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 31
Date of reporting period: 06/30/2007
ITEM 1. REPORTS TO STOCKHOLDERS.
OPPENHEIMER BALANCED 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, 2007.
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
(1/1/07) (6/30/07) JUNE 30, 2007
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Non-Service shares Actual $ 1,000.00 $ 1,059.40 $ 3.89
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Non-Service shares Hypothetical 1,000.00 1,021.03 3.82
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Service shares Actual 1,000.00 1,057.70 5.17
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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,
excluding affiliated fund indirect expenses, based on the 6-month period ended
June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- ----------------------------------------
Non-Service shares 0.76%
- ----------------------------------------
Service shares 1.01
The expense ratios reflect reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager that can be terminated at any time, without
advance notice. The "Financial Highlights" tables in the Fund's financial
statements, included in this report, also show the gross expense ratios, without
such waivers or reimbursements.
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5 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
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VALUE
SHARES SEE NOTE 1
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COMMON STOCKS--54.8%
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CONSUMER DISCRETIONARY--6.6%
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INTERNET & CATALOG RETAIL--0.8%
Liberty Media Holding
Corp.-Interactive, Series A 1 200,390 $ 4,474,709
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MEDIA--5.0%
Liberty Global, Inc., Series A 1 338,018 13,872,259
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Liberty Global, Inc., Series C 1 342,790 13,471,647
----------------
27,343,906
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SPECIALTY RETAIL--0.8%
Office Depot, Inc. 1 132,700 4,020,810
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CONSUMER STAPLES--5.9%
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FOOD & STAPLES RETAILING--1.8%
Costco Wholesale Corp. 171,200 10,018,624
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FOOD PRODUCTS--0.4%
ConAgra Foods, Inc. 71,900 1,931,234
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TOBACCO--3.7%
Altria Group, Inc. 176,030 12,346,744
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Loews Corp./Carolina Group 100,140 7,737,818
----------------
20,084,562
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ENERGY--2.9%
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OIL & GASS--2.9%
BP plc, ADR 45,120 3,254,957
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Exxon Mobil Corp. 102,610 8,606,927
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Petroleo Brasileiro SA, ADR 15,300 1,855,431
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Petroleo Brasileiro SA, Preference 69,490 1,855,228
----------------
15,572,543
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FINANCIALS--10.4%
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CAPITAL MARKETS--3.9%
Bear Stearns Cos., Inc. (The) 20,900 2,926,000
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E*TRADE Financial Corp. 1 292,290 6,456,686
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UBS AG 203,510 12,165,634
----------------
21,548,320
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COMMERCIAL BANKS--2.7%
Wachovia Corp. 175,445 8,991,556
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Wells Fargo & Co. 161,720 5,687,692
----------------
14,679,248
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CONSUMER FINANCE--0.3%
Capital One Financial Corp. 18,390 1,442,512
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DIVERSIFIED FINANCIAL SERVICES--0.6%
Bank of America Corp. 61,538 3,008,593
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INSURANCE--2.4%
Everest Re Group Ltd. 51,380 5,581,923
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Genworth Financial, Inc., Cl. A 76,150 2,619,560
VALUE
SHARES SEE NOTE 1
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INSURANCE Continued
National Financial Partners Corp. 35,300 $ 1,634,743
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Platinum Underwriters Holdings Ltd. 94,680 3,290,130
----------------
13,126,356
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THRIFTS & MORTGAGE FINANCE--0.5%
Freddie Mac 48,900 2,968,230
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HEALTH CARE--6.9%
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BIOTECHNOLOGY--2.5%
Amgen, Inc. 1,2 48,430 2,677,695
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deCODE genetics, Inc. 1 193,500 722,723
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Human Genome Sciences, Inc. 1 263,700 2,352,204
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Orexigen Therapeutics, Inc. 1 173,230 2,601,915
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Vanda Pharmaceuticals, Inc. 1 255,000 5,166,300
----------------
13,520,837
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HEALTH CARE EQUIPMENT & SUPPLIES--0.8%
Beckman Coulter, Inc. 37,430 2,420,972
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Boston Scientific Corp. 1 140,780 2,159,565
----------------
4,580,537
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HEALTH CARE PROVIDERS & SERVICES--1.4%
Medco Health Solutions, Inc. 1 21,200 1,653,388
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Skilled Healthcare Group, Inc., Cl. A 1 93,500 1,450,185
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WellPoint, Inc. 1 55,700 4,446,531
----------------
7,550,104
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PHARMACEUTICALS--2.2%
Medicines Co. (The) 1 153,170 2,698,855
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Novartis AG, ADR 79,060 4,432,894
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Sanofi-Aventis SA, ADR 114,790 4,622,593
----------------
11,754,342
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INDUSTRIALS--6.3%
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AEROSPACE & DEFENSE--4.4%
Boeing Co. 82,400 7,923,584
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Empresa Brasileira de Aeronautica SA,
ADR 33,720 1,625,641
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Orbital Sciences Corp. 1 74,024 1,555,244
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Spirit Aerosystems Holdings, Inc.,
Cl. A 1 90,440 3,260,362
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United Technologies Corp. 139,840 9,918,851
----------------
24,283,682
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INDUSTRIAL CONGLOMERATES--1.4%
Siemens AG, Sponsored ADR 51,900 7,424,814
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MACHINERY--0.5%
Navistar International Corp. 1 43,400 2,864,400
6 | OPPENHEIMER BALANCED FUND/VA
VALUE
SHARES SEE NOTE 1
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INFORMATION TECHNOLOGY--12.8%
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COMMUNICATIONS EQUIPMENT--1.0%
Cisco Systems, Inc. 1 155,250 $ 4,323,713
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QUALCOMM, Inc. 32,650 1,416,684
----------------
5,740,397
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COMPUTERS & PERIPHERALS--0.8%
International Business Machines Corp. 39,310 4,137,378
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ELECTRONIC EQUIPMENT & INSTRUMENTS--0.0%
CalAmp Corp. 1 19 78
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INTERNET SOFTWARE & SERVICES--1.3%
eBay, Inc. 1 122,690 3,948,164
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Google, Inc., Cl. A 1 3,300 1,727,154
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Yahoo!, Inc. 1 51,020 1,384,173
----------------
7,059,491
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SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.9%
Texas Instruments, Inc. 135,130 5,084,942
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SOFTWARE--8.8%
Microsoft Corp. 501,800 14,788,046
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Novell, Inc. 1 568,740 4,430,485
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Synopsys, Inc. 1 272,520 7,202,704
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Take-Two Interactive Software, Inc. 1 1,083,450 21,636,497
----------------
48,057,732
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MATERIALS--1.5%
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CHEMICALS--0.4%
Lubrizol Corp. (The) 26,400 1,704,120
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Sinomem Technology Ltd. 1 643,000 638,484
----------------
2,342,604
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CONSTRUCTION MATERIALS--0.6%
Texas Industries, Inc. 15,060 1,180,855
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Vulcan Materials Co. 16,180 1,853,257
----------------
3,034,112
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METALS & MINING--0.5%
Companhia Vale do Rio Doce,
Sponsored ADR 73,670 2,777,359
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TELECOMMUNICATION SERVICES--0.0%
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DIVERSIFIED TELECOMMUNICATION SERVICES--0.0%
XO Holdings, Inc. 1 85 379
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UTILITIES--1.5%
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ENERGY TRADERS--1.5%
AES Corp. (The) 1 306,800 6,712,784
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Dynegy, Inc., Cl. A 1 176,900 1,669,936
----------------
8,382,720
----------------
Total Common Stocks
(Cost $223,417,236) 298,815,555
VALUE
UNITS SEE NOTE 1
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RIGHTS, WARRANTS AND CERTIFICATES--0.0%
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Lucent Technologies, Inc. Wts.,
Exp. 12/10/07 1 8,881 $ 1,510
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XO Communications, Inc.:
Series A Wts., Exp. 1/16/10 1 171 127
Series B Wts., Exp. 1/16/10 1 128 50
Series C Wts., Exp. 1/16/10 1,3 128 20
----------------
Total Rights, Warrants and Certificates (Cost $0) 1,707
PRINCIPAL
AMOUNT
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ASSET-BACKED SECURITIES--1.6%
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Aesop Funding II LLC, Automobile
Asset-Backed Certificates, Series
2005-1A, Cl. A2, 5.38%, 4/20/08 4,5 $ 370,000 370,185
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Argent Securities Trust 2004-W8,
Asset-Backed Pass-Through
Certificates, Series 2004-W8, Cl.
A2, 5.80%, 5/25/34 5 830,484 833,891
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Citibank Credit Card Issuance Trust,
Credit Card Receivable Nts., Series
2003-C4, Cl. C4, 5%, 6/10/15 180,000 171,855
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Citigroup Mortgage Loan Trust
2005-WF2, Asset-Backed
Pass-Through Certificates, Series
2005-WF2, Cl. AF2, 4.922%, 8/25/35 5 285,298 284,080
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CWABS Asset-Backed Certificates
Trust 2002-4, Asset-Backed Certificates,
Series 2002-4, Cl. A1, 6.06%, 2/25/33 5 18,836 18,639
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CWABS Asset-Backed Certificates
Trust 2005-16, Asset-Backed
Certificates, Series 2005-16, Cl. 2AF2,
5.382%, 5/25/36 5 360,000 358,251
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CWABS Asset-Backed Certificates
Trust 2005-17, Asset-Backed
Certificates, Series 2005-17, Cl. 1AF2,
5.363%, 5/25/36 5 240,000 238,862
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CWABS Asset-Backed Certificates
Trust 2006-25, Asset-Backed
Certificates, Series 2006-25, Cl. 2A2,
5.44%, 12/25/29 5 480,000 480,154
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Ford Credit Auto Owner Trust,
Automobile Loan Pass-Through
Certificates, Series 2005-A, Cl. A3,
3.48%, 11/17/08 181,660 181,283
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Household Home Equity Loan Trust, Home
Equity Loan Pass-Through Certificates:
Series 2005-3, Cl. A1, 5.58%, 1/20/35 5 398,292 398,624
Series 2006-4, Cl. A2V, 5.43%, 3/20/36 3,5 180,000 180,060
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Lehman XS Trust, Mtg. Pass-Through
Certificates, Series 2005-2, Cl. 2A1B,
5.18%, 8/25/35 5 378,339 377,945
7 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
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PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
MBNA Credit Card Master Note
Trust, Credit Card Receivables,
Series 2003-C7, Cl. C7, 6.67%, 3/15/16 5 $ 1,710,000 $ 1,798,743
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Option One Mortgage Loan Trust,
Asset-Backed Certificates, Series
2006-2, Cl. 2A2, 5.42%, 7/1/36 5 1,100,000 1,100,549
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Popular ABS Mortgage Pass-Through
Trust 2005-2, Mtg. Pass-Through
Certificates, Series 2005-2, Cl. AF2,
4.415%, 4/25/35 5 179,603 178,977
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RAMP Series 2004-RS7 Trust, Mtg.
Asset-Backed Pass-Through
Certificates, Series 2004-RS7, Cl. AI32,
4.45%, 7/25/28 216,676 215,619
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RASC Series 2006-KS7 Trust, Home
Equity Mtg. Asset-Backed Pass-Through
Certificates, Series 2006-KS7, Cl. A2,
5.42%, 9/25/36 5 800,000 800,407
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Structured Asset Securities Corp., Mtg.
Pass-Through Certificates, Series
2005-4XS, Cl. 3A1, 5.18%, 3/26/35 463,608 463,817
----------------
Total Asset-Backed Securities (Cost $8,459,126) 8,451,941
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MORTGAGE-BACKED OBLIGATIONS--28.3%
- --------------------------------------------------------------------------------
GOVERNMENT AGENCY--24.6%
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FHLMC/FNMA/SPONSORED--24.5%
Federal Home Loan Mortgage Corp.:
4.50%, 5/1/19-7/1/19 1,980,566 1,885,344
5%, 12/1/32-12/1/34 3,348,779 3,155,701
6.50%, 4/1/18-4/1/34 3,052,274 3,117,548
7%, 5/1/29-11/1/32 1,321,965 1,364,895
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Federal Home Loan Mortgage Corp.,
CMO Gtd. Multiclass Mtg.
Participation Certificates, Series 3094,
Cl. HS, 4.877%, 6/15/34 5 236,477 217,125
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Federal Home Loan Mortgage Corp.,
CMO Gtd. Real Estate Mtg.
Investment Conduit Multiclass
Pass-Through Certificates:
Series 2006-11, Cl. PS, 5.06%, 3/25/36 5 379,620 351,471
Series 2043, Cl. ZP, 6.50%, 4/15/28 629,244 625,422
Series 2055, Cl. ZM, 6.50%, 5/15/28 363,454 368,492
Series 2075, Cl. D, 6.50%, 8/15/28 867,433 881,763
Series 2080, Cl. Z, 6.50%, 8/15/28 235,160 239,032
Series 2387, Cl. PD, 6%, 4/15/30 47,651 47,613
Series 2461, Cl. PZ, 6.50%, 6/15/32 719,065 736,716
Series 2500, Cl. FD, 5.82%, 3/15/32 5 111,885 113,420
Series 2526, Cl. FE, 5.72%, 6/15/29 5 164,846 166,474
Series 2551, Cl. FD, 5.72%, 1/15/33 5 128,086 129,393
Series 2676, Cl. KY, 5%, 9/15/23 298,000 278,150
Series 3025, Cl. SJ, 5.243%, 8/15/35 5 125,653 116,854
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
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FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage Corp.,
Interest-Only Stripped
Mtg.-Backed Security:
Series 176, Cl. IO, 14.531%, 6/1/26 6 $ 227,151 $ 57,478
Series 183, Cl. IO, 12.058%, 4/1/27 6 356,243 94,902
Series 184, Cl. IO, 17.755%, 12/1/26 6 386,463 99,119
Series 192, Cl. IO, 15.018%, 2/1/28 6 106,347 26,759
Series 200, Cl. IO, 13.646%, 1/1/29 6 126,548 34,614
Series 2003-118, Cl. S, 10.134%,
12/25/33 6 1,843,141 218,148
Series 2005-87, Cl. SE, 6.84%, 10/25/35 6 2,833,444 70,350
Series 2005-87, Cl. SG, 12.46%,
10/25/35 6 2,816,955 130,055
Series 2130, Cl. SC, (0.81)%, 3/15/29 6 276,740 18,919
Series 216, Cl. IO, 13.611%, 12/1/31 6 198,102 51,059
Series 224, Cl. IO, 10.644%, 3/1/33 6 933,926 241,593
Series 243, Cl. 6, 8.611%, 12/15/32 6 385,017 99,438
Series 2796, Cl. SD, 2.901%, 7/15/26 6 405,520 28,084
Series 2802, Cl. AS, 4.498%, 4/15/33 6 618,493 29,847
Series 2920, Cl. S, (1.217)%, 1/15/35 6 2,219,066 87,703
Series 3000, Cl. SE, (2.435)%, 7/15/25 6 2,277,816 56,257
Series 3110, Cl. SL, 6.092%, 2/15/26 6 323,457 8,384
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Federal Home Loan Mortgage Corp.,
Principal-Only Stripped Mtg.-Backed
Security:
Series 176, Cl. PO, 4.25%, 6/1/26 7 99,968 77,031
Series 192, Cl. PO, 5.708%, 2/1/28 7 106,347 81,899
Series 224, Cl. PO, 4.438%, 3/1/33 7 309,499 226,903
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Federal National Mortgage Assn.:
4.50%, 5/1/18-12/1/20 12,250,752 11,669,601
5%, 12/1/17-9/1/35 21,788,417 20,871,584
5%, 7/1/22 8 1,382,000 1,335,573
5.50%, 3/1/33-11/1/34 8,455,486 8,191,809
5.50%, 7/1/22-8/1/37 8 25,356,000 24,485,493
6%, 8/1/32-3/1/33 9,197,827 9,137,342
6%, 7/1/22-7/1/37 8 10,237,000 10,249,438
6.50%, 6/1/17-10/1/30 5,406,318 5,519,780
7%, 11/1/17-11/1/35 2,934,131 3,034,636
7.50%, 1/1/33 397,230 415,850
8.50%, 7/1/32 13,368 14,372
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Federal National Mortgage Assn.
Grantor Trust, CMO, Trust 2002-T1,
Cl. A2, 7%, 11/25/31 767,837 785,246
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Federal National Mortgage Assn.,
CMO Gtd. Real Estate Mtg.
Investment Conduit Pass-Through
Certificates:
Trust 1993-215, Cl. ZQ, 6.50%,
11/25/23 731,842 742,644
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 663,297 676,322
Trust 1998-61, Cl. PL, 6%, 11/25/28 346,693 346,333
Trust 2001-50, Cl. NE, 6%, 8/25/30 39,004 38,926
Trust 2001-51, Cl. OD, 6.50%, 10/25/31 905,722 922,088
Trust 2001-70, Cl. LR, 6%, 9/25/30 99,478 99,564
8 | OPPENHEIMER BALANCED FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.,
CMO Gtd. Real Estate Mtg.
Investment Conduit Pass-Through
Certificates: Continued
Trust 2001-74, Cl. PD, 6%, 5/25/30 $ 806 $ 804
Trust 2001-82, Cl. ZA, 6.50%, 1/25/32 324,877 331,199
Trust 2002-9, Cl. PC, 6%, 3/25/17 787,115 793,120
Trust 2003-28, Cl. KG, 5.50%, 4/25/23 1,052,000 1,006,985
Trust 2003-84, Cl. PW, 3%, 6/25/22 482,920 476,135
Trust 2004-101, Cl. BG, 5%, 1/25/20 1,110,000 1,070,961
Trust 2006-24, Cl. DB, 5.50%, 4/25/26 1,000,000 963,721
Trust 2006-44, Cl. OA, 5.50%, 12/25/26 1,621,873 1,618,520
Trust 2006-46, Cl. SW, 4.693%, 6/25/36 5 281,297 251,336
Trust 2006-50, Cl. KS, 4.693%, 6/25/36 5 744,788 643,673
Trust 2006-50, Cl. SA, 4.693%, 6/25/36 5 225,159 194,493
Trust 2006-50, Cl. SK, 4.693%, 6/25/36 5 711,098 634,671
Trust 2006-57, Cl. PA, 5.50%, 8/25/27 1,970,982 1,966,565
Trust 2006-64, Cl. MD, 5.50%, 7/25/36 2,983,000 2,845,151
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Federal National Mortgage Assn.,
Interest-Only Stripped Mtg.-Backed
Security:
Trust 2001-65, Cl. S, 10.097%, 11/25/31 6 1,041,884 103,233
Trust 2001-81, Cl. S, 4.499%, 1/25/32 6 223,932 21,332
Trust 2002-47, Cl. NS, 3.788%, 4/25/32 6 489,351 46,188
Trust 2002-51, Cl. S, 3.909%, 8/25/32 6 449,340 42,673
Trust 2002-52, Cl. SD, 0.528%, 9/25/32 6 504,397 42,300
Trust 2002-77, Cl. SH, 5.516%,
12/18/32 6 299,449 27,197
Trust 2002-84, Cl. SA, 11.261%,
12/25/32 6 900,568 87,468
Trust 2002-9, Cl. MS, 4.625%, 3/25/32 6 332,765 33,055
Trust 2003-33, Cl. SP, 13.322%, 5/25/33 6 985,064 105,268
Trust 2003-4, Cl. S, 10.467%, 2/25/33 6 573,180 57,646
Trust 2003-46, Cl. IH, 6.91%, 6/25/33 6 3,375,286 706,144
Trust 2004-54, Cl. DS, (2.276)%,
11/25/30 6 437,556 23,458
Trust 2005-19, Cl. SA, 0.016%, 3/25/35 6 5,828,482 240,676
Trust 2005-40, Cl. SA, (0.14)%, 5/25/35 6 1,247,802 49,301
Trust 2005-6, Cl. SE, 1.693%, 2/25/35 6 1,577,780 63,681
Trust 2005-71, Cl. SA, 2.929%, 8/25/25 6 1,438,187 66,666
Trust 2006-33, Cl. SP, 14.61%, 5/25/36 6 3,025,075 223,940
Trust 222, Cl. 2, 16.539%, 6/1/23 6 802,060 199,967
Trust 233, Cl. 2, 13.828%, 8/1/23 6 701,653 184,159
Trust 240, Cl. 2, 21.21%, 9/1/23 6 1,280,415 339,906
Trust 252, Cl. 2, 14.768%, 11/1/23 6 603,014 167,178
Trust 273, Cl. 2, 16.172%, 8/1/26 6 170,676 42,712
Trust 319, Cl. 2, 14.287%, 2/1/32 6 222,282 58,848
Trust 321, Cl. 2, 10.183%, 4/1/32 6 2,299,775 607,625
Trust 331, Cl. 9, 8.632%, 2/1/33 6 629,466 157,400
Trust 334, Cl. 17, 22.917%, 2/1/33 6 361,321 101,164
Trust 339, Cl. 7, 5.678%, 7/1/33 6 2,344,978 573,786
Trust 342, Cl. 2, 12.235%, 9/1/33 6 1,148,678 300,645
Trust 344, Cl. 2, 10.216%, 12/1/33 6 4,308,538 1,129,769
Trust 345, Cl. 9, 8.846%, 1/1/34 6 839,865 207,902
Trust 346, Cl. 2, 13.179%, 12/1/33 6 1,186,917 311,271
Trust 362, Cl. 12, 6.752%, 8/1/35 6 1,458,008 337,038
Trust 362, Cl. 13, 6.735%, 8/1/35 6 808,327 186,484
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.,
Principal-Only Stripped Mtg.-Backed
Security, Trust 1993-184, Cl. M,
5.104%, 9/25/23 7 $ 274,067 $ 220,941
----------------
133,934,911
- --------------------------------------------------------------------------------
GNMA/GUARANTEED--0.1%
Government National Mortgage
Assn., 8%, 4/15/23 158,056 167,377
- --------------------------------------------------------------------------------
Government National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21, Cl. SB, (3.129)%,
1/16/27 6 466,030 31,219
Series 2002-15, Cl. SM, (6.147)%,
2/16/32 6 543,909 36,433
Series 2002-76, Cl. SY, (3.889)%,
12/16/26 6 1,115,748 81,584
Series 2004-11, Cl. SM, (6.242)%,
1/17/30 6 386,616 24,683
----------------
341,296
- --------------------------------------------------------------------------------
NON-AGENCY--3.7%
- --------------------------------------------------------------------------------
COMMERCIAL--3.2%
Banc of America Commercial
Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates, Series
2005-3, Cl. A2, 4.501%, 7/10/43 1,050,000 1,022,677
- --------------------------------------------------------------------------------
Banc of America Funding Corp.,
CMO Pass-Through Certificates,
Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 691,417 697,506
- --------------------------------------------------------------------------------
Banc of America Mortgage
Securities, Inc., CMO Pass-Through
Certificates, Series 2004-8, Cl. 5A1,
6.50%, 5/25/32 549,797 549,882
- --------------------------------------------------------------------------------
ChaseFlex Trust 2006-2, Multiclass
Mtg. Pass-Through Certificates,
Series 2006-2, Cl. A1B, 5.42%, 8/25/08 5 369,849 370,176
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust
2006-WF1, Asset-Backed Pass-Through
Certificates, Series 2006-WF1, Cl.
A2B, 5.536%, 3/1/36 260,000 259,026
- --------------------------------------------------------------------------------
Citigroup/Deutsche Bank Commercial
Mortgage Trust, Commercial Mtg.
Obligations, Series 2007-CD4, Cl.
A2B, 5.205%, 12/11/49 3 570,000 559,907
- --------------------------------------------------------------------------------
Deutsche Alt-A Securities Mortgage
Loan Trust, Mtg. Pass-Through Certificates:
Series 2006-AB2, Cl. A7, 5.961%,
6/25/36 679,782 678,541
Series 2006-AB3, Cl. A7, 6.36%, 4/25/08 202,821 202,686
9 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL Continued
First Union National Bank/Lehman
Brothers/Bank of America
Commercial Mtg. Trust, Pass-Through
Certificates, Series 1998-C2, Cl. A2,
6.56%, 11/18/35 $ 345,269 $ 346,835
- --------------------------------------------------------------------------------
GE Capital Commercial Mortgage
Corp., Commercial Mtg. Obligations,
Series 2005-C3, Cl. A2, 4.853%, 7/10/45 620,000 609,978
- --------------------------------------------------------------------------------
Greenwich Capital Commercial
Funding Corp., Commercial Mtg.
Pass-Through Certificates:
Series 2005-GG3, Cl. A2, 4.305%,
8/10/42 890,000 867,575
Series 2005-GG5, Cl. A2, 5.117%,
4/10/37 680,000 672,874
Series 2007-GG9, Cl. A2, 5.381%,
3/10/39 3 820,000 811,055
- --------------------------------------------------------------------------------
JPMorgan Chase Commercial
Mortgage Securities Corp., Commercial
Mtg. Pass-Through Certificates:
Series 2005-LDP2, Cl. A2, 4.575%,
7/15/42 260,000 253,706
Series 2005-LDP4, Cl. A2, 4.79%,
10/15/42 890,000 872,689
Series 2007-LDPX, Cl. A2S, 5.305%,
1/15/49 210,000 206,646
- --------------------------------------------------------------------------------
LB-UBS Commercial Mortgage
Trust, Commercial Mtg.
Pass-Through Certificates:
Series 2005-C5, Cl. A2, 4.885%, 9/15/30 740,000 729,708
Series 2007-C1, Cl. A2, 5.318%, 1/15/12 910,000 898,864
- --------------------------------------------------------------------------------
Mastr Alternative Loan Trust, CMO
Pass-Through Certificates:
Series 2004-9, Cl. A3, 4.70%, 8/25/34 5 441,295 439,525
Series 2004-6, Cl. 10A1, 6%, 7/25/34 916,091 907,820
- --------------------------------------------------------------------------------
Nomura Asset Securities Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1998-D6, Cl. A1B,
6.59%, 3/15/30 245,897 247,503
- --------------------------------------------------------------------------------
Prudential Mortgage Capital Co. II
LLC, Commercial Mtg. Pass-Through
Certificates, Series PRU-HTG 2000-C1,
Cl. A2, 7.306%, 10/6/15 3 983,000 1,046,588
- --------------------------------------------------------------------------------
RALI Series 2003-QS1 Trust, Mtg.
Asset-Backed Pass-Through
Certificates, Series 2003-QS1, Cl.
A2, 5.75%, 1/25/33 429,943 428,498
- --------------------------------------------------------------------------------
RALI Series 2007-QS6 Trust, Mtg.
Asset-Backed Pass-Through
Certificates, Series 2007-QS6, Cl.
A114, 5.75%, 4/25/37 780,635 775,754
- --------------------------------------------------------------------------------
Residential Asset Securitization Trust
2006-A9CB, CMO Pass-Through
Certificates, Series 2006-A9CB, Cl.
A5, 6%, 9/25/36 1,148,025 1,145,452
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL Continued
Wachovia Bank Commercial Mortgage
Trust 2005-C17, Commercial Mtg.
Pass-Through Certificates, Series
2005-C17, Cl. A2, 4.782%, 3/15/42 $ 1,450,000 $ 1,427,516
- --------------------------------------------------------------------------------
Wachovia Bank Commercial Mortgage
Trust 2006-C29, Commercial Mtg.
Pass-Through Certificates, Series
2006-C29, Cl. A2, 5.272%, 11/15/48 256,000 252,200
----------------
17,281,187
- --------------------------------------------------------------------------------
RESIDENTIAL--0.5%
Countrywide Alternative Loan Trust,
CMO, Series 2005-J1, Cl. 3A1, 6.50%,
8/25/32 1,307,261 1,311,551
- --------------------------------------------------------------------------------
RALI Series 2006-QS13 Trust, Mtg.
Asset-Backed Pass-Through
Certificates, Series 2006-QS13, Cl.
1A8, 6%, 9/25/36 839,837 838,326
- --------------------------------------------------------------------------------
RALI Series 2006-QS5 Trust, Mtg.
Asset-Backed Pass-Through
Certificates, Series 2006-QS5, Cl.
2A2, 6%, 4/25/08 833,853 832,492
- --------------------------------------------------------------------------------
WAMU Mortgage Pass-Through
Certificates, Series 2005-AR5 Trust,
Series 2005-AR5, Cl. A1, 4.676%,
5/25/35 5 48,425 48,447
----------------
3,030,816
----------------
Total Mortgage-Backed Obligations
(Cost $156,193,428) 154,588,210
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--4.3%
- --------------------------------------------------------------------------------
Federal Home Loan Bank Unsec.
Bonds, 3.50%, 11/15/07 650,000 645,621
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.
Unsec. Nts., 4.25%, 7/15/07 2,015,000 2,014,136
- --------------------------------------------------------------------------------
U.S. Treasury Bonds:
4.50%, 5/15/17 2,771,000 2,657,564
4.50%, 2/15/36 9,10 2,535,000 2,296,157
5.375%, 2/15/31 9 193,000 198,247
8.875%, 8/15/17 9 687,000 890,202
- --------------------------------------------------------------------------------
U.S. Treasury Nts.:
3.875%, 2/15/13 9 1,081,000 1,027,035
4.50%, 5/15/10-4/30/12 8,928,000 8,767,541
4.75%, 2/15/10-5/31/12 3,684,000 3,666,773
4.875%, 5/31/09 1,398,000 1,398,001
----------------
Total U.S. Government Obligations
(Cost $23,826,194) 23,561,277
10 | OPPENHEIMER BALANCED FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--12.2%
- --------------------------------------------------------------------------------
ABN Amro Bank NV (NY Branch),
7.125% Sub. Nts., Series B, 10/15/93 $ 400,000 $ 428,092
- --------------------------------------------------------------------------------
Albertson's, Inc., 8% Sr. Unsec. Debs.,
5/1/31 880,000 903,838
- --------------------------------------------------------------------------------
Barclays Bank plc, 6.278%
Perpetual Bonds 11 2,080,000 1,891,594
- --------------------------------------------------------------------------------
Belo Corp., 8% Sr. Unsec. Unsub. Nts.,
11/1/08 1,520,000 1,561,317
- --------------------------------------------------------------------------------
British Sky Broadcasting Group plc,
8.20% Sr. Unsec. Nts., 7/15/09 665,000 697,757
- --------------------------------------------------------------------------------
Buckeye Partners LP, 4.625% Sr. Nts.,
7/15/13 1,195,000 1,118,183
- --------------------------------------------------------------------------------
Caesars Entertainment, Inc., 7.50%
Sr. Unsec. Nts., 9/1/09 3 1,195,000 1,222,495
- --------------------------------------------------------------------------------
Capmark Financial Group, Inc.,
5.875% Nts., 5/10/12 4 585,000 577,934
- --------------------------------------------------------------------------------
CenterPoint Energy, Inc., 7.25%
Sr. Nts., Series B, 9/1/10 1,005,000 1,050,246
- --------------------------------------------------------------------------------
Centex Corp., 5.80% Sr. Unsec. Nts.,
9/15/09 705,000 704,367
- --------------------------------------------------------------------------------
Chancellor Media CCU, 8% Sr.
Unsec. Nts., 11/1/08 845,000 866,983
- --------------------------------------------------------------------------------
CIT Group Funding Co. of Canada,
4.65% Sr. Unsec. Nts., 7/1/10 670,000 650,832
- --------------------------------------------------------------------------------
Clear Channel Communications,
Inc., 6.25% Nts., 3/15/11 710,000 683,816
- --------------------------------------------------------------------------------
Coca-Cola Co. (The), 7.375% Unsec.
Debs., 7/29/93 360,000 417,492
- --------------------------------------------------------------------------------
Comcast Corp., 6.45% Unsec. Nts.,
3/15/37 1,385,000 1,339,065
- --------------------------------------------------------------------------------
Cox Enterprises, Inc., 4.375% Nts.,
5/1/08 4 1,075,000 1,064,436
- --------------------------------------------------------------------------------
CSC Holdings, Inc., 7.25% Sr. Unsec.
Nts., 7/15/08 835,000 843,350
- --------------------------------------------------------------------------------
D.R. Horton, Inc.:
5.375% Sr. Unsec. Nts., 6/15/12 690,000 648,023
6.125% Nts., 1/15/14 525,000 503,943
8% Sr. Nts., 2/1/09 285,000 293,113
- --------------------------------------------------------------------------------
DaimlerChrysler North America
Holding Corp.:
5.71% Nts., Series E, 3/13/09 5 395,000 395,893
7.30% Nts., 1/15/12 460,000 488,340
- --------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub.
Debs., 4/15/31 606,000 735,168
- --------------------------------------------------------------------------------
Dillard's, Inc., 6.625% Unsec. Nts.,
11/15/08 3 275,000 277,063
- --------------------------------------------------------------------------------
Earthgrains Co. (The), 6.50% Nts.,
4/15/09 335,000 339,110
- --------------------------------------------------------------------------------
Eastman Kodak Co., 3.625% Nts.,
Series A, 5/15/08 3 131,000 128,053
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
EchoStar DBS Corp., 5.75% Sr. Unsec.
Nts., 10/1/08 $ 1,285,000 $ 1,285,000
- --------------------------------------------------------------------------------
El Paso Corp., 6.50% Sr. Unsec. Nts.,
6/1/08 210,000 211,991
- --------------------------------------------------------------------------------
Ford Motor Credit Co., 9.75% Sr.
Unsec. Nts., 9/15/10 2,030,000 2,121,139
- --------------------------------------------------------------------------------
Gap, Inc. (The):
6.90% Nts., 9/15/07 985,000 990,747
9.80% Unsub. Nts., 12/15/08 5 141,000 149,558
- --------------------------------------------------------------------------------
General Motors Acceptance Corp.,
8% Bonds, 11/1/31 930,000 953,571
- --------------------------------------------------------------------------------
Goldman Sachs Capital, Inc. (The),
6.345% Sub. Bonds, 2/15/34 1,675,000 1,602,462
- --------------------------------------------------------------------------------
HBOS plc, 6.413% Sub. Perpetual
Bonds, Series A 4,11 2,100,000 1,971,703
- --------------------------------------------------------------------------------
HCA, Inc., 8.75% Sr. Nts., 9/1/10 505,000 528,356
- --------------------------------------------------------------------------------
Heinz (H.J.) Co., 6.428% Bonds,
12/1/08 4 150,000 151,547
- --------------------------------------------------------------------------------
Hilton Hotels Corp., 8.25% Sr. Unsec.
Nts., 2/15/11 3 785,000 830,138
- --------------------------------------------------------------------------------
HSBC Finance Capital Trust IX,
5.911% Nts., 11/30/35 5 1,600,000 1,551,654
- --------------------------------------------------------------------------------
Hyundai Motor Manufacturing
Alabama LLC, 5.30% Sr. Unsec. Nts.,
12/19/08 4 610,000 605,239
- --------------------------------------------------------------------------------
IPALCO Enterprises, Inc., 8.375% Sr.
Sec. Nts., 11/14/08 5 540,000 553,500
- --------------------------------------------------------------------------------
Kaneb Pipe Line Operating
Partnership LP:
5.875% Sr. Unsec. Nts., 6/1/13 830,000 826,619
7.75% Sr. Unsec. Nts., 2/15/12 100,000 107,344
- --------------------------------------------------------------------------------
Kinder Morgan Energy Partners LP,
7.30% Sr. Unsec. Nts., 8/15/33 1,235,000 1,293,511
- --------------------------------------------------------------------------------
Kroger Co. (The), 5.50% Unsec.
Unsub. Nts., 2/1/13 1,110,000 1,082,291
- --------------------------------------------------------------------------------
Lennar Corp., 7.625% Sr. Unsec. Nts.,
3/1/09 1,010,000 1,039,949
- --------------------------------------------------------------------------------
Liberty Media Corp., 7.875% Sr. Nts.,
7/15/09 290,000 302,266
- --------------------------------------------------------------------------------
Liberty Media LLC, 7.75% Sr. Nts.,
7/15/09 950,000 987,762
- --------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc.:
5.875% Sr. Unsec. Bonds, 8/1/33 135,000 114,007
7.125% Sr. Unsec. Nts., 6/15/09 630,000 646,074
- --------------------------------------------------------------------------------
May Department Stores Co., 7.90%
Unsec. Debs., 10/15/07 410,000 411,964
- --------------------------------------------------------------------------------
MBIA, Inc., 5.70% Sr. Unsec. Unsub.
Nts., 12/1/34 565,000 521,035
- --------------------------------------------------------------------------------
MGM Mirage, Inc., 6% Sr. Sec. Nts.,
10/1/09 1,305,000 1,300,106
11 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
Monongahela Power Co., 7.36%
Unsec. Nts., Series A, 1/15/10 $ 1,030,000 $ 1,072,474
- --------------------------------------------------------------------------------
NCR Corp., 7.125% Sr. Unsec. Unsub.
Nts., 6/15/09 855,000 873,821
- --------------------------------------------------------------------------------
Nextel Communications, Inc.,
7.375% Sr. Nts., Series D, 8/1/15 1,050,000 1,050,459
- --------------------------------------------------------------------------------
PF Export Receivables Master Trust,
3.748% Sr. Nts., Series B, 6/1/13 4 315,861 294,109
- --------------------------------------------------------------------------------
Popular North America, Inc., 4.70%
Nts., 6/30/09 1,360,000 1,340,145
- --------------------------------------------------------------------------------
Prudential Holdings LLC, 8.695%
Bonds, Series C, 12/18/23 4 1,285,000 1,555,807
- --------------------------------------------------------------------------------
Prudential Insurance Co. of America,
8.30% Nts., 7/1/25 1,110,000 1,352,635
- --------------------------------------------------------------------------------
PSEG Funding Trust I, 5.381% Nts.,
11/16/07 690,000 689,447
- --------------------------------------------------------------------------------
Pulte Homes, Inc., 4.875% Nts., 7/15/09 450,000 442,964
- --------------------------------------------------------------------------------
Qwest Corp.:
5.625% Unsec. Nts., 11/15/08 3 131,000 131,164
7.875% Sr. Unsec. Nts., 9/1/11 1,020,000 1,068,450
- --------------------------------------------------------------------------------
R&B Falcon Corp., 9.50% Sr. Unsec.
Nts., 12/15/08 500,000 527,616
- --------------------------------------------------------------------------------
Rogers Wireless, Inc., 9.625% Sr. Sec.
Nts., 5/1/11 960,000 1,081,157
- --------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd., 7% Sr.
Unsec. Unsub. Nts., 10/15/07 3 294,000 296,385
- --------------------------------------------------------------------------------
Ryder System, Inc., 5.95% Nts., 5/2/11 265,000 265,907
- --------------------------------------------------------------------------------
Sara Lee Corp., 2.75% Unsec. Nts.,
6/15/08 450,000 437,725
- --------------------------------------------------------------------------------
SLM Corp., 4% Nts., 1/15/09 895,000 860,252
- --------------------------------------------------------------------------------
Standard Pacific Corp., 5.125% Sr.
Unsec. Unsub. Nts., 4/1/09 470,000 444,150
- --------------------------------------------------------------------------------
Telecom Italia Capital SpA, 4%
Unsec. Unsub. Nts., 1/15/10 930,000 894,560
- --------------------------------------------------------------------------------
TEPPCO Partners LP:
6.125% Nts., 2/1/13 490,000 493,227
7.625% Sr. Unsec. Nts., 2/15/12 320,000 341,907
- --------------------------------------------------------------------------------
Textron Financial Corp., 6% Jr. Unsec.
Sub. Nts., 2/15/67 4,5 545,000 514,186
- --------------------------------------------------------------------------------
Time Warner Entertainment Co. LP,
8.375% Sr. Nts., 7/15/33 1,130,000 1,315,195
- --------------------------------------------------------------------------------
Tribune Co., 5.50% Nts., Series E,
10/6/08 765,000 758,850
- --------------------------------------------------------------------------------
TXU Energy Co. LLC:
5.86% Sr. Nts., 9/16/08 4,5 865,000 865,584
6.125% Nts., 3/15/08 755,000 756,746
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued
- --------------------------------------------------------------------------------
Univision Communications, Inc.:
3.50% Sr. Unsec. Nts., 10/15/07 $ 670,000 $ 666,650
3.875% Sr. Unsec. Nts., 10/15/08 3 315,000 305,156
- --------------------------------------------------------------------------------
Valero Logistics Operations LP,
6.05% Nts., 3/15/13 210,000 210,170
- --------------------------------------------------------------------------------
Westar Energy, Inc., 7.125% Sr. Unsec.
Nts., 8/1/09 985,000 1,012,347
- --------------------------------------------------------------------------------
Williams Cos., Inc. (The), Credit Linked
Certificate Trust, 6.75% Nts., 4/15/09 3 1,210,000 1,228,150
- --------------------------------------------------------------------------------
Xerox Corp., 9.75% Sr. Unsec. Nts.,
1/15/09 1,510,000 1,597,885
----------------
Total Non-Convertible Corporate
Bonds and Notes (Cost $66,930,139) 66,715,316
SHARES
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--5.0%
- --------------------------------------------------------------------------------
Oppenheimer Institutional Money
Market Fund, Cl. E, 5.28% 12,13
(Cost $27,169,434) 27,169,434 27,169,434
- --------------------------------------------------------------------------------
Total Investments, at Value (excluding Investments
Purchased with Cash Collateral from Securities
Loaned) (Cost $505,995,557) 579,303,440
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES
LOANED--0.1% 14
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.1%
Undivided interest of 0.02% in joint repurchase
agreement (Principal Amount/Value
$1,320,000,000, with a maturity value
of $1,320,596,750) with Nomura
Securities, 5.425%, dated 6/29/07,
to be repurchased at $299,930
on 7/2/07, collateralized by
Private Label CMOs, 0%-6.75%,
10/25/21-1/25/47, with a
value of $1,386,000,000
(Cost $299,794) $ 299,794 299,794
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $506,295,351) 106.3% 579,603,234
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (6.3) (34,121,195)
-------------------------------
NET ASSETS 100.0% $ 545,482,039
===============================
12 | OPPENHEIMER BALANCED FUND/VA
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. A sufficient amount of liquid assets has been designated to cover outstanding
written call options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE
SUBJECT TO CALL DATE PRICE RECEIVED SEE NOTE 1
- -------------------------------------------------------------------------------
Amgen, Inc. 437 1/21/08 $70 $149,192 $30,590
3. Illiquid security. The aggregate value of illiquid securities as of June 30,
2007 was $7,016,234, which represents 1.29% of the Fund's net assets. See Note
10 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 $7,970,730 or 1.46% of the Fund's net
assets as of June 30, 2007.
5. Represents the current interest rate for a variable or increasing rate
security.
6. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $8,372,708 or 1.53% of the Fund's net assets
as of June 30, 2007.
7. 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 $606,774 or 0.11% of the Fund's net assets as of June
30, 2007.
8. When-issued security or forward commitment to be delivered and settled after
June 30, 2007. See Note 1 of accompanying Notes.
9. Partial or fully-loaned security. See Note 11 of accompanying Notes.
10. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures contracts. The aggregate market
value of such securities is $1,177,517. See Note 6 of accompanying Notes.
11. 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.
12. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 2007, by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- ---------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E 15,913,062 149,655,807 138,399,435 27,169,434
VALUE DIVIDEND
SEE NOTE 1 INCOME
- ---------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E $27,169,434 $437,397
13. Rate shown is the 7-day yield as of June 30, 2007.
14. The security/securities have 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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- --------------------------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $479,125,917) $552,433,800
Affiliated companies (cost $27,169,434) 27,169,434
-------------
579,603,234
- --------------------------------------------------------------------------------------------------------------------
Cash 134,166
- --------------------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums paid $270,498) 1,069,771
- --------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $11,851,396 sold on a when-issued basis or forward commitment) 12,534,335
Interest, dividends and principal paydowns 2,627,866
Futures margins 44,860
Shares of beneficial interest sold 9,021
Other 13,329
-------------
Total assets 596,036,582
- --------------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $149,192)--see accompanying statement of investments 30,590
- --------------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 299,794
- --------------------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums paid $124,846) 530,776
- --------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $47,897,627 purchased on a when-issued basis or forward commitment) 49,301,617
Shares of beneficial interest redeemed 208,482
Shareholder communications 73,862
Distribution and service plan fees 72,371
Trustees' compensation 10,329
Transfer and shareholder servicing agent fees 1,821
Other 24,901
-------------
Total liabilities 50,554,543
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS $545,482,039
=============
- --------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 32,607
- --------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 441,045,542
- --------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 6,615,881
- --------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 24,243,321
- --------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities denominated in
foreign currencies 73,544,688
-------------
NET ASSETS $545,482,039
=============
- --------------------------------------------------------------------------------------------------------------------
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
$426,052,475 and 25,430,785 shares of beneficial interest outstanding) $ 16.75
- --------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of
$119,429,564 and 7,176,623 shares of beneficial interest outstanding) $ 16.64
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER BALANCED FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2007
- ---------------------------------------------------------------------------------------
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------
Interest $ 6,227,868
- ---------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $112,795) 2,125,142
Affiliated companies 437,397
- ---------------------------------------------------------------------------------------
Portfolio lending fees 40,803
-------------
Total investment income 8,831,210
- ---------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------
Management fees 1,949,823
- ---------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 140,177
- ---------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,066
Service shares 5,011
- ---------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 28,473
Service shares 7,440
- ---------------------------------------------------------------------------------------
Trustees' compensation 8,711
- ---------------------------------------------------------------------------------------
Custodian fees and expenses 3,549
- ---------------------------------------------------------------------------------------
Administration service fees 750
- ---------------------------------------------------------------------------------------
Other 31,889
-------------
Total expenses 2,180,889
Less reduction to custodian expenses (514)
Less waivers and reimbursements of expenses (8,348)
-------------
Net expenses 2,172,027
- ---------------------------------------------------------------------------------------
NET INVESTMENT INCOME 6,659,183
- ---------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ---------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments 24,098,889
Closing and expiration of option contracts written 46,768
Closing and expiration of futures contracts 450,954
Foreign currency transactions (6,080)
Swap contracts (3,482)
Net increase from payment by affiliate 51,312
-------------
Net realized gain 24,638,361
- ---------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (10,148)
Translation of assets and liabilities denominated in foreign currencies 29,563
Futures contracts (265,448)
Option contracts written 82,959
Swap contracts 119,602
-------------
Net change in unrealized appreciation (43,472)
- ---------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 31,254,072
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER BALANCED FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006
- ------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------
Net investment income $ 6,659,183 $ 13,221,942
- ------------------------------------------------------------------------------------------------------------------------
Net realized gain 24,638,361 49,442,386
- ------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (43,472) (4,993,484)
-------------------------------
Net increase in net assets resulting from operations 31,254,072 57,670,844
- ------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (10,919,746) (10,383,550)
Service shares (2,568,291) (1,826,958)
-------------------------------
(13,488,037) (12,210,508)
- ------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Non-Service shares (34,150,478) (22,826,230)
Service shares (8,836,795) (4,434,656)
-------------------------------
(42,987,273) (27,260,886)
- ------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares 10,576,526 (81,734,942)
Service shares 13,125,146 18,628,043
-------------------------------
23,701,672 (63,106,899)
- ------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------
Total decrease (1,519,566) (44,907,449)
- ------------------------------------------------------------------------------------------------------------------------
Beginning of period 547,001,605 591,909,054
-------------------------------
End of period (including accumulated net investment income of $6,615,881
and $13,444,735, respectively) $ 545,482,039 $ 547,001,605
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16 | OPPENHEIMER BALANCED FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.69 $ 17.07 $ 17.35 $ 15.92 $ 13.16 $ 15.40
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .21 1 .40 1 .33 1 .26 1 .27 .50
Net realized and unrealized gain (loss) .75 1.38 .31 1.33 2.90 (2.02)
-------------------------------------------------------------------------------------------
Total from investment operations .96 1.78 .64 1.59 3.17 (1.52)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.46) (.36) (.30) (.16) (.41) (.51)
Distributions from net realized gain (1.44) (.80) (.62) -- -- (.21)
-------------------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (1.90) (1.16) (.92) (.16) (.41) (.72)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.75 $ 17.69 $ 17.07 $ 17.35 $ 15.92 $ 13.16
===========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 5.94% 11.15% 3.89% 10.10% 24.96% (10.40)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 426,052 $435,639 $503,753 $547,290 $533,710 $ 458,848
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 430,637 $456,513 $522,754 $528,655 $475,389 $ 517,516
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 2.52% 2.42% 1.98% 1.59% 1.82% 3.31%
Total expenses 0.76% 4,5,6 0.75% 4,5 0.74% 6 0.74% 6 0.76% 6 0.74% 6
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 7 76% 7 67% 7 68% 7 248% 42%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Total returns are not annualized for
periods less than one full year. Total return information does not reflect
expenses that apply at the separate account level or to related insurance
products. Inclusion of these charges would reduce the total return figures for
all periods shown. Returns do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.76%
Year Ended December 31, 2006 0.75
5. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
6. Reduction to custodian expenses less than 0.005%.
7. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- -------------------------------------------------------------------------------
Six Months Ended June 30, 2007 $ 214,217,072 $ 202,971,357
Year Ended December 31, 2006 612,825,833 666,549,894
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.
17 | OPPENHEIMER BALANCED FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 17.57 $ 16.97 $ 17.26 $ 15.87 $ 13.14 $ 14.51
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .19 2 .36 2 .29 2 .23 2 .39 .13
Net realized and unrealized gain (loss) .74 1.37 .31 1.31 2.74 (1.50)
-----------------------------------------------------------------------------------------
Total from investment operations .93 1.73 .60 1.54 3.13 (1.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.42) (.33) (.27) (.15) (.40) --
Distributions from net realized gain (1.44) (.80) (.62) -- -- --
-----------------------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (1.86) (1.13) (.89) (.15) (.40) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 16.64 $ 17.57 $ 16.97 $ 17.26 $ 15.87 $ 13.14
=========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 5.77% 10.86% 3.67% 9.79% 24.69% (9.44)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 119,430 $111,363 $88,156 $59,650 $25,302 $ 2,306
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 113,116 $100,010 $72,977 $39,851 $ 9,908 $ 1,037
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.27% 2.17% 1.74% 1.41% 1.37% 3.30%
Total expenses 1.01% 5,6,7 1.01% 5,6 1.00% 7 1.02% 7 1.01% 7 0.99% 7
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 37% 8 76% 8 67% 8 68% 8 248% 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 less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 1.01%
Year Ended December 31, 2006 1.01
6. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
7. Reduction to custodian expenses less than 0.005%.
8. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- -------------------------------------------------------------------------------
Six Months Ended June 30, 2007 $ 214,217,072 $ 202,971,357
Year Ended December 31, 2006 612,825,833 666,549,894
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
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(R) 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. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. 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 take place generally at least 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
19 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
or forward commitment prior to settlement of the original purchase. As of June
30, 2007, the Fund had purchased $47,897,627 of securities issued on a
when-issued basis or forward commitment and sold $11,851,396 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.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
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.
20 | OPPENHEIMER BALANCED FUND/VA
- --------------------------------------------------------------------------------
INVESTMENTS WITH OFF-BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities.
- --------------------------------------------------------------------------------
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, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of zero. 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, 2007, it is estimated that the Fund will utilize $291,587 of capital loss
carryforward to offset realized capital gains. During the fiscal year ended
December 31, 2006, the Fund did not utilize any capital loss carryforward to
offset capital gains realized in that fiscal year.
As of December 31, 2006, the Fund had available for federal income tax
purposes post-October foreign currency losses of $180 and straddle losses of
$291,407.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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 compensation deferral 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.
21 | OPPENHEIMER BALANCED 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. 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.
- --------------------------------------------------------------------------------
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, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 539,551 $ 9,103,522 714,924 $ 11,819,806
Dividends and/or distributions reinvested 2,818,651 45,070,224 2,069,145 33,209,780
Redeemed (2,550,212) (43,597,220) (7,669,019) (126,764,528)
------------------------------------------------------------
Net increase (decrease) 807,990 $ 10,576,526 (4,884,950) $ (81,734,942)
============================================================
- -----------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 751,409 $ 12,600,390 1,978,250 $ 32,390,681
Dividends and/or distributions reinvested 717,301 11,405,086 392,086 6,261,614
Redeemed (631,861) (10,880,330) (1,226,866) (20,024,252)
------------------------------------------------------------
Net increase 836,849 $ 13,125,146 1,143,470 $ 18,628,043
============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
June 30, 2007, were as follows:
PURCHASES SALES
--------------------------------------------------------------
Investment securities $ 136,584,041 $ 166,408,334
U.S. government and government
agency obligations 51,923,911 48,207,660
To Be Announced (TBA)
mortgage-related securities 214,217,072 202,971,357
22 | OPPENHEIMER BALANCED FUND/VA
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
---------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Over $800 million 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, 2007, the Fund paid
$9,981 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.
- --------------------------------------------------------------------------------
PAYMENTS, 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.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended June 30, 2007, the Manager waived $8,348 for
IMMF management fees.
During the six months ended June 30, 2007, the Manager voluntarily
reimbursed the Fund $51,312 for certain transactions.
- --------------------------------------------------------------------------------
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.
23 | OPPENHEIMER BALANCED 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, 2007, 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 at 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, 2007, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS JUNE 30, 2007 (DEPRECIATION)
- --------------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Treasury Long Bonds 9/19/07 149 $16,054,750 $(139,144)
----------
CONTRACTS TO SELL
U.S. Treasury Nts., 2 yr. 9/28/07 277 56,447,406 87,626
U.S. Treasury Nts., 5 yr. 9/28/07 52 5,412,063 21,632
U.S. Treasury Nts., 10 yr. 9/19/07 2 211,406 3,432
----------
112,690
----------
$ (26,454)
==========
- --------------------------------------------------------------------------------
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.
24 | OPPENHEIMER BALANCED FUND/VA
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 or put options are noted
in the Statement of Investments where applicable. Contracts subject to call or
put, 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, 2007 was as follows:
CALL OPTIONS
------------------------
NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS
- --------------------------------------------------------------------------
Options outstanding as of December 31, 2006 89 $ 46,768
Options written 437 149,192
Options closed or expired (89) (46,768)
------------------------
Options outstanding as of June 30, 2007 437 $149,192
========================
- --------------------------------------------------------------------------------
8. CREDIT DEFAULT SWAP CONTRACTS
A credit default swap is a bilateral contract that enables an investor to buy or
sell protection against a defined-issuer credit event. The Fund may enter into
credit default swaps to hedge an existing position or to obtain exposure to a
security or market by purchasing or selling credit protection. The Fund may
enter into credit default swaps on a single security, or a basket of securities.
In a credit default swap contract, the purchaser of the contract will pay
a periodic interest fee, similar to an insurance premium, on the notional amount
of the swap contract to the counterparty (the seller of the contract). If there
is a credit event (for example, bankruptcy or a failure to timely pay interest
or principal), the purchaser will exercise the contract and will receive a
payment from the seller of the contract equal to the notional value of the
credit default swap contract less the value of the underlying security.
The periodic interest fees are accrued daily as a component of unrealized
appreciation (depreciation) and are recorded as realized gain (loss) upon
payment. In the event that the credit default swap is exercised due to a credit
event, the difference between the value of the underlying security and the
notional amount is recorded as realized gain (loss) and is included on the
Statement of Operations.
Credit default swaps are marked to market daily using primarily quotations
from counterparties and brokers. The value of the contracts is separately
disclosed on the Statement of Assets and Liabilities. The unrealized
appreciation (depreciation) related to the change in the valuation of the
notional amount of the swap is combined with the accrued interest due to (owed
by) the Fund at termination or settlement. The net change in this amount during
the period is included on the Statement of Operations.
25 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. CREDIT DEFAULT SWAP CONTRACTS Continued
Risks of credit default swaps include, but are not limited to, the cost of
paying for credit protection if there are no credit events, pricing transparency
when assessing the cost of a credit default swap, counterparty risk, adverse
pricing when purchasing bonds to satisfy its delivery obligation, and the need
to fund the delivery obligation (either cash or defaulted securities depending
on whether the Fund is the purchaser or seller of the credit default swap
contract, respectively).
Information regarding such credit default swaps as of June 30, 2007 is as
follows:
BUY/SELL NOTIONAL PREMIUM
CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES (RECEIVED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc:
Beazer Homes USA, Inc. Sell $ 305 2.1000% 6/20/08 $ -- $ (3,955)
Capmark Financial Group, Inc. Sell 520 1.0000 6/20/12 -- 1,507
Lear Corp. Sell 875 1.0000 6/20/08 -- 2,400
Toys R US, Inc. Sell 550 1.4500 9/20/08 -- (4,156)
- -----------------------------------------------------------------------------------------------------------------------------------
Credit Suisse
International:
Belo Corp. Buy 1,645 0.9000 6/20/13 -- 19,895
CDX North America High
Yield Index Buy 525 2.7500 6/20/12 1,039 10,136
CDX North America High
Yield Index Buy 2,550 2.7500 6/20/14 46,201 117,676
CDX North America High
Yield Index Buy 895 2.7500 6/20/14 12,909 41,302
CDX North America High
Yield Index Sell 2,550 2.7500 6/20/12 14,361 (49,233)
CDX North America High
Yield Index Sell 895 2.7500 6/20/12 7,228 (17,280)
Freescale Semiconductor, Inc. Sell 515 0.6000 3/20/08 -- (3,489)
Freescale Semiconductor, Inc. Sell 545 0.7500 3/20/08 -- (3,089)
Rite Aid Corp. Sell 860 0.8750 6/20/08 -- (5,415)
Univision Communications, Inc. Sell 250 0.7500 3/20/08 -- (1,560)
- -----------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank
AG:
Abitibi-Consolidated Co. of
Canada Sell 860 1.5200 9/20/07 -- (576)
Allied Waste North America, Inc. Sell 340 2.0000 9/20/09 -- 2,294
Allied Waste North America, Inc. Sell 530 2.0000 9/20/09 -- 3,577
Bombardier, Inc. Sell 265 0.9000 9/20/07 -- 397
CDX North America High
Yield Index Buy 1,030 2.7500 6/20/12 (9,613) 17,094
CDX North America High
Yield Index Buy 2,555 2.7500 6/20/14 50,071 121,645
CDX North America High
Yield Index Buy 2,550 2.7500 6/20/14 42,819 121,407
CDX North America High
Yield Index Buy 1,510 2.7500 6/20/14 20,008 71,892
CDX North America High
Yield Index Sell 2,555 2.7500 6/20/12 12,207 (50,299)
CDX North America High
Yield Index Sell 2,550 2.7500 6/20/12 16,150 (50,200)
CDX North America High
Yield Index Sell 2,525 2.7500 6/20/12 17,763 (49,708)
26 | OPPENHEIMER BALANCED FUND/VA
BUY/SELL NOTIONAL PREMIUM
CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES (RECEIVED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank
AG: Continued
CDX North America High
Yield Index Sell $ 1,510 2.7500% 6/20/12 $ 13,968 $ (29,727)
CDX.NA.IG.7 Buy 4,700 0.4000 12/20/11 483 (4,250)
Dillard's, Inc. Sell 225 0.7500 9/20/08 -- 90
Dow Jones CDX North America
Crossover Index Buy 2,525 2.7500 6/20/14 39,050 120,217
Eastman Kodak Co. Sell 735 1.0000 12/20/08 -- 149
Levi Strauss & Co. Sell 500 1.0000 9/20/08 -- 252
Levi Strauss & Co. Sell 375 0.9000 9/20/08 -- --
Tenet Healthcare Corp. Sell 870 1.6000 3/20/09 -- (1,372)
Weyerhaeuser Co. Buy 1,070 0.5800 9/20/11 -- (9,472)
- -----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets LP:
Capmark Financial Group, Inc. Sell 535 0.9500 6/20/12 -- (1,293)
First Data Corp. Sell 545 1.1500 9/20/08 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services, Inc.:
ArvinMeritor, Inc. Sell 295 1.0500 9/20/07 -- 212
ArvinMeritor, Inc. Sell 240 1.1000 9/20/07 -- 203
ArvinMeritor, Inc. Sell 20 1.2000 9/20/07 -- 22
Beazer Homes USA, Inc. Sell 560 2.1500 6/20/08 -- (11,918)
Bombardier, Inc. Sell 295 1.0500 9/20/07 -- 642
Bombardier, Inc. Sell 290 1.0000 9/20/07 -- 594
CDX North America High
Yield Index Buy 2,495 2.7500 6/20/14 35,883 115,662
CDX North America High
Yield Index Buy 2,425 2.7500 6/20/14 32,131 112,417
CDX North America High
Yield Index Sell 2,495 2.7500 6/20/12 20,255 (47,648)
CDX North America High
Yield Index Sell 2,425 2.7500 6/20/12 22,431 (46,311)
CountrywideHome Loans, Inc. Sell 1,615 0.4200 6/20/09 -- 808
El Paso Corp. Sell 1,060 0.5200 3/20/10 -- (3,025)
Ford Motor Co. Buy 1,100 5.4000 12/20/08 -- (49,200)
Ford Motor Co. Buy 525 5.3000 12/20/08 -- (22,733)
Ford Motor Co. Sell 1,100 7.1500 12/20/16 -- 65,738
Ford Motor Co. Sell 525 7.0500 12/20/16 -- 28,649
General Motors Corp. Buy 545 4.0000 12/20/08 -- (15,178)
General Motors Corp. Buy 535 3.9500 12/20/08 -- (14,517)
General Motors Corp. Sell 545 5.8000 12/20/16 -- 35,083
General Motors Corp. Sell 535 5.7500 12/20/16 -- 32,933
Inco Ltd. Buy 545 0.7000 3/20/17 -- (9,248)
Inco Ltd. Buy 550 0.6300 3/20/17 -- (6,476)
J.C. Penney Co., Inc. Sell 1,070 0.6100 6/20/13 -- (3,640)
K. Hovnanian Enterprises, Inc. Sell 270 1.8500 6/20/08 -- (1,113)
K. Hovnanian Enterprises, Inc. Sell 270 1.8500 6/20/08 -- (1,113)
Kroger Co. (The) Buy 1,110 0.4775 6/20/12 -- (3,988)
Tribune Co. Sell 505 1.0000 6/20/08 -- (9,594)
Vale Overseas Ltd. Sell 545 1.1700 3/20/17 -- 11,935
Vale Overseas Ltd. Sell 550 1.1000 3/20/17 -- 9,153
-----------------------
$ 395,344 $ 535,205
=======================
27 | OPPENHEIMER BALANCED FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. TOTAL RETURN SWAP CONTRACTS
A total return swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. One cash flow stream will typically be
based on a reference interest rate or index and the other on the total return of
a reference asset such as a security, a basket of securities, or an index. The
total return includes appreciation or depreciation on the reference asset, plus
any interest or dividend payments. Payments under the swap are based on an
agreed upon principal amount but since this principal amount is not exchanged,
it represents neither an asset nor a liability to either counterparty, and is
referred to as notional. Total return swaps are marked to market daily using
primarily quotations from counterparties and brokers. The value of the contracts
is separately disclosed on the Statement of Assets and Liabilities. The
unrealized appreciation (depreciation) related to the change in the valuation of
the notional amount of the swap is combined with the amount due to (owed by) the
Fund at termination or settlement. The net change in this amount during the
period is included on the Statement of Operations. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations. The primary risks associated with total return swaps are credit
risks (if the counterparty fails to meet its obligations) and market risk (if
there is no liquid market for the agreement or unfavorable changes occur in the
reference asset).
As of June 30, 2007, the Fund had entered into the following total return swap
agreements:
RECEIVED BY TERMINATION
SWAP COUNTERPARTY NOTIONAL AMOUNT PAID BY THE FUND THE FUND DATES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
If positive, the total
If negative, the absolute return of the Lehman
value of the Lehman CMBS Index plus
Deutsche Bank AG $ 2,900,000 CMBS Index. 27.5 basis points. 11/1/07 $ 1,598
- ------------------------------------------------------------------------------------------------------------------------------
If positive, the absolute
If negative, the absolute value of Lehman Brothers
value of Lehman Brothers U.S. CMBS Index:
Goldman Sachs Capital U.S. CMBS Index: Aggregate AAA plus
Markets LP 2,140,000 Aggregate AAA. 15 basis points. 9/1/07 905
- ------------------------------------------------------------------------------------------------------------------------------
If positive, the total return
If negative, the absolute of the Lehman
Lehman Brothers value of the Lehman CMBS Index plus
Special Financing, Inc. 2,380,000 CMBS Index. 32.5 basis points. 11/1/07 1,287
--------
$ 3,790
========
Abbreviation is as follows:
CMBS Commercial Mortgage Backed Securities
- --------------------------------------------------------------------------------
10. ILLIQUID SECURITIES
As of June 30, 2007, 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.
28 | OPPENHEIMER BALANCED FUND/VA
- --------------------------------------------------------------------------------
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, 2007, the Fund had
on loan securities valued at $1,803,763, which are included in the Statement of
Assets and Liabilities as "Investments, at value" and, when applicable, as
"Receivable for Investments sold." Collateral of $1,846,095 was received for the
loans, of which $299,794 was received in cash and subsequently invested in
approved investments. In addition, collateral of $1,546,301 was also received in
the form of securities.
- --------------------------------------------------------------------------------
12. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
29 | OPPENHEIMER BALANCED FUND/VA
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in 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 BALANCED FUND/VA
OPPENHEIMER MAIN STREET 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, 2007.
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
(1/1/07) (6/30/07) JUNE 30, 2007
- ----------------------------------------------------------------------------
Non-Service shares Actual $ 1,000.00 $ 1,070.80 $ 3.34
- ----------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.57 3.26
- ----------------------------------------------------------------------------
Service shares Actual 1,000.00 1,069.40 4.63
- ----------------------------------------------------------------------------
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,
excluding affiliated fund indirect expenses, based on the 6-month period ended
June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------------
Non-Service shares 0.65%
- -----------------------------------
Service shares 0.90
The expense ratios reflect reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager that can be terminated at any time, without
advance notice. The "Financial Highlights" tables in the Fund's financial
statements, included in this report, also show the gross expense ratios, without
such waivers or reimbursements.
- --------------------------------------------------------------------------------
5 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--99.6%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--9.2%
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.0%
Chipotle Mexican Grill, Inc., Cl. B 1 7,419 $ 583,356
- --------------------------------------------------------------------------------
McDonald's Corp. 295,600 15,004,656
- --------------------------------------------------------------------------------
Yum! Brands, Inc. 2 274,800 8,991,456
----------------
24,579,468
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.3%
Amazon.com, Inc. 1,2 35,100 2,401,191
- --------------------------------------------------------------------------------
Liberty Media Holding
Corp.-Interactive, Series A 1,2 159,400 3,559,402
----------------
5,960,593
- --------------------------------------------------------------------------------
MEDIA--4.1%
CBS Corp., Cl. B 2 263,600 8,783,152
- --------------------------------------------------------------------------------
Citadel Broadcasting Corp. 2 56,422 363,922
- --------------------------------------------------------------------------------
Clear Channel Communications, Inc. 303,700 11,485,934
- --------------------------------------------------------------------------------
DirecTV Group, Inc. (The) 1 237,500 5,488,625
- --------------------------------------------------------------------------------
EchoStar Communications
Corp., Cl. A 1,2 137,500 5,963,375
- --------------------------------------------------------------------------------
Gannett Co., Inc. 145,200 7,978,740
- --------------------------------------------------------------------------------
Liberty Media Holding
Corp.-Capital, Series A 1 44,734 5,264,297
- --------------------------------------------------------------------------------
News Corp., Inc., Cl. A 250,200 5,306,742
- --------------------------------------------------------------------------------
Omnicom Group, Inc. 137,000 7,250,040
- --------------------------------------------------------------------------------
Time Warner, Inc. 2,300 48,392
- --------------------------------------------------------------------------------
Viacom, Inc., Cl. B 1 280,673 11,684,417
- --------------------------------------------------------------------------------
Walt Disney Co. (The) 808,800 27,612,432
----------------
97,230,068
- --------------------------------------------------------------------------------
MULTILINE RETAIL--2.4%
J.C. Penney Co., Inc. (Holding Co.) 95,000 6,876,100
- --------------------------------------------------------------------------------
Kohl's Corp. 1,2 184,300 13,090,829
- --------------------------------------------------------------------------------
Macy's, Inc. 253,000 10,064,340
- --------------------------------------------------------------------------------
Nordstrom, Inc. 220,100 11,251,512
- --------------------------------------------------------------------------------
Sears Holdings Corp. 1,2 40,600 6,881,700
- --------------------------------------------------------------------------------
Target Corp. 141,000 8,967,600
----------------
57,132,081
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--1.1%
Best Buy Co., Inc. 62,800 2,930,876
- --------------------------------------------------------------------------------
Home Depot, Inc. 388,200 15,275,670
- --------------------------------------------------------------------------------
Lowe's Cos., Inc. 12,700 389,763
- --------------------------------------------------------------------------------
TJX Cos., Inc. (The) 2 270,800 7,447,000
----------------
26,043,309
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.3%
Coach, Inc. 1 147,400 $ 6,985,286
- --------------------------------------------------------------------------------
Nike, Inc., Cl. B 8,700 507,123
----------------
7,492,409
- --------------------------------------------------------------------------------
CONSUMER STAPLES--8.1%
- --------------------------------------------------------------------------------
BEVERAGES--1.8%
Coca-Cola Co. (The) 416,800 21,802,808
- --------------------------------------------------------------------------------
PepsiCo, Inc. 337,450 21,883,633
----------------
43,686,441
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.0%
Kroger Co. (The) 398,800 11,218,244
- --------------------------------------------------------------------------------
Safeway, Inc. 248,100 8,442,843
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 85,000 4,089,350
----------------
23,750,437
- --------------------------------------------------------------------------------
FOOD PRODUCTS--2.1%
Campbell Soup Co. 2 154,100 5,980,621
- --------------------------------------------------------------------------------
ConAgra Foods, Inc. 287,000 7,708,820
- --------------------------------------------------------------------------------
General Mills, Inc. 140,000 8,178,800
- --------------------------------------------------------------------------------
Heinz (H.J.) Co. 156,300 7,419,561
- --------------------------------------------------------------------------------
Kellogg Co. 2 130,700 6,768,953
- --------------------------------------------------------------------------------
Kraft Foods, Inc., Cl. A 113,300 3,993,825
- --------------------------------------------------------------------------------
Sara Lee Corp. 575,100 10,006,740
----------------
50,057,320
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--1.0%
Colgate-Palmolive Co. 21,200 1,374,820
- --------------------------------------------------------------------------------
Procter & Gamble Co. (The) 366,215 22,408,696
----------------
23,783,516
- --------------------------------------------------------------------------------
TOBACCO--2.2%
Altria Group, Inc. 738,600 51,805,404
- --------------------------------------------------------------------------------
ENERGY--13.4%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--1.3%
National Oilwell Varco, Inc. 1 102,900 10,726,296
- --------------------------------------------------------------------------------
Schlumberger Ltd. 232,100 19,714,574
----------------
30,440,870
- --------------------------------------------------------------------------------
OIL & GAS--12.1%
Anadarko Petroleum Corp. 227,700 11,838,123
- --------------------------------------------------------------------------------
Apache Corp. 116,400 9,497,076
- --------------------------------------------------------------------------------
Chesapeake Energy Corp. 2 182,500 6,314,500
- --------------------------------------------------------------------------------
Chevron Corp. 753,126 63,443,334
- --------------------------------------------------------------------------------
ConocoPhillips 313,283 24,592,716
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 1,459,916 122,457,754
- --------------------------------------------------------------------------------
Marathon Oil Corp. 271,400 16,273,144
6 | OPPENHEIMER MAIN STREET FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
Occidental Petroleum Corp. 312,700 $ 18,099,076
- --------------------------------------------------------------------------------
Valero Energy Corp. 206,800 15,274,248
----------------
287,789,971
- --------------------------------------------------------------------------------
FINANCIALS--17.7%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--3.2%
Ameriprise Financial, Inc. 168,500 10,711,545
- --------------------------------------------------------------------------------
Bank of New York Co., Inc. (The) 252,700 10,471,888
- --------------------------------------------------------------------------------
Bear Stearns Cos., Inc. (The) 16,600 2,324,000
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 79,200 17,166,600
- --------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 189,000 15,796,620
- --------------------------------------------------------------------------------
Morgan Stanley 226,000 18,956,880
----------------
75,427,533
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--3.1%
Fifth Third Bancorp 2 152,600 6,068,902
- --------------------------------------------------------------------------------
SunTrust Banks, Inc. 117,800 10,100,172
- --------------------------------------------------------------------------------
U.S. Bancorp 362,970 11,959,862
- --------------------------------------------------------------------------------
Wachovia Corp. 385,293 19,746,266
- --------------------------------------------------------------------------------
Wells Fargo & Co. 723,600 25,449,012
----------------
73,324,214
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--4.9%
Bank of America Corp. 927,809 45,360,582
- --------------------------------------------------------------------------------
CIT Group, Inc. 27,700 1,518,791
- --------------------------------------------------------------------------------
Citigroup, Inc. 682,488 35,004,810
- --------------------------------------------------------------------------------
JPMorgan Chase & Co. 728,644 35,302,802
----------------
117,186,985
- --------------------------------------------------------------------------------
INSURANCE--4.9%
ACE Ltd. 18,300 1,144,116
- --------------------------------------------------------------------------------
Allstate Corp. 247,600 15,229,876
- --------------------------------------------------------------------------------
American International Group, Inc. 451,240 31,600,337
- --------------------------------------------------------------------------------
Chubb Corp. 216,900 11,742,966
- --------------------------------------------------------------------------------
CNA Financial Corp. 2 67,100 3,199,999
- --------------------------------------------------------------------------------
Genworth Financial, Inc., Cl. A 301,500 10,371,600
- --------------------------------------------------------------------------------
Loews Corp. 22,500 1,147,050
- --------------------------------------------------------------------------------
MetLife, Inc. 97,100 6,261,008
- --------------------------------------------------------------------------------
Principal Financial Group, Inc. (The) 172,800 10,072,512
- --------------------------------------------------------------------------------
Prudential Financial, Inc. 51,200 4,978,176
- --------------------------------------------------------------------------------
Travelers Cos., Inc. (The) 251,000 13,428,500
- --------------------------------------------------------------------------------
XL Capital Ltd., Cl. A 105,300 8,875,737
----------------
118,051,877
- --------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--0.1%
General Growth Properties, Inc. 2 31,400 1,662,630
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--1.5%
Fannie Mae 199,400 $ 13,026,802
- --------------------------------------------------------------------------------
Freddie Mac 152,200 9,238,540
- --------------------------------------------------------------------------------
Washington Mutual, Inc. 2 298,300 12,719,512
----------------
34,984,854
- --------------------------------------------------------------------------------
HEALTH CARE--15.2%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--0.5%
Amgen, Inc. 1 198,400 10,969,536
- --------------------------------------------------------------------------------
Genentech, Inc. 1 31,600 2,390,856
----------------
13,360,392
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.8%
Medtronic, Inc. 197,700 10,252,722
- --------------------------------------------------------------------------------
Zimmer Holdings, Inc. 1,2 100,000 8,489,000
----------------
18,741,722
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--5.3%
Aetna, Inc. 285,800 14,118,520
- --------------------------------------------------------------------------------
Cardinal Health, Inc. 18,300 1,292,712
- --------------------------------------------------------------------------------
CIGNA Corp. 197,700 10,323,894
- --------------------------------------------------------------------------------
Express Scripts, Inc. 1,2 129,800 6,491,298
- --------------------------------------------------------------------------------
McKesson Corp. 188,400 11,236,176
- --------------------------------------------------------------------------------
Medco Health Solutions, Inc. 1 155,500 12,127,445
- --------------------------------------------------------------------------------
UnitedHealth Group, Inc. 736,148 37,646,609
- --------------------------------------------------------------------------------
WellPoint, Inc. 1 416,012 33,210,238
----------------
126,446,892
- --------------------------------------------------------------------------------
PHARMACEUTICALS--8.6%
Abbott Laboratories 263,400 14,105,070
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 404,600 12,769,176
- --------------------------------------------------------------------------------
Eli Lilly & Co. 203,000 11,343,640
- --------------------------------------------------------------------------------
Forest Laboratories, Inc. 1 217,600 9,933,440
- --------------------------------------------------------------------------------
Johnson & Johnson 898,106 55,341,292
- --------------------------------------------------------------------------------
Merck & Co., Inc. 440,500 21,936,900
- --------------------------------------------------------------------------------
Pfizer, Inc. 2,270,600 58,059,242
- --------------------------------------------------------------------------------
Schering-Plough Corp. 297,000 9,040,680
- --------------------------------------------------------------------------------
Wyeth 213,800 12,259,292
----------------
204,788,732
- --------------------------------------------------------------------------------
INDUSTRIALS--8.1%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--4.4%
Boeing Co. 136,200 13,096,992
- --------------------------------------------------------------------------------
General Dynamics Corp. 125,100 9,785,322
- --------------------------------------------------------------------------------
Honeywell International, Inc. 284,000 15,983,520
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 158,300 14,900,779
- --------------------------------------------------------------------------------
Northrop Grumman Corp. 179,300 13,962,091
- --------------------------------------------------------------------------------
Precision Castparts Corp. 2 63,000 7,645,680
7 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE Continued
Raytheon Co. 260,300 $ 14,027,567
- --------------------------------------------------------------------------------
United Technologies Corp. 207,600 14,725,068
----------------
104,127,019
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.4%
United Parcel Service, Inc., Cl. B 133,600 9,752,800
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--2.7%
3M Co. 127,200 11,039,688
- --------------------------------------------------------------------------------
General Electric Co. 1,026,900 39,309,732
- --------------------------------------------------------------------------------
Tyco International Ltd. 426,700 14,418,193
----------------
64,767,613
- --------------------------------------------------------------------------------
MACHINERY--0.5%
Deere & Co. 19,900 2,402,726
- --------------------------------------------------------------------------------
Eaton Corp. 2 99,400 9,244,200
----------------
11,646,926
- --------------------------------------------------------------------------------
ROAD & RAIL--0.1%
CSX Corp. 2 48,100 2,168,348
- --------------------------------------------------------------------------------
Laidlaw International, Inc. 10,900 376,595
----------------
2,544,943
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--20.5%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--3.7%
Cisco Systems, Inc. 1 2,172,600 60,506,910
- --------------------------------------------------------------------------------
Juniper Networks, Inc. 1,2 357,800 9,005,826
- --------------------------------------------------------------------------------
Motorola, Inc. 233,800 4,138,260
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 338,300 14,678,837
----------------
88,329,833
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--6.5%
Apple, Inc. 1 213,100 26,006,724
- --------------------------------------------------------------------------------
Dell, Inc. 1 575,600 16,433,380
- --------------------------------------------------------------------------------
EMC Corp. 1 698,000 12,633,800
- --------------------------------------------------------------------------------
Hewlett-Packard Co. 903,700 40,323,094
- --------------------------------------------------------------------------------
International Business Machines
Corp. 561,500 59,097,875
----------------
154,494,873
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.4%
Agilent Technologies, Inc. 1 233,100 8,960,364
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.0%
Google, Inc., Cl. A 1,2 46,100 24,127,818
- --------------------------------------------------------------------------------
IT SERVICES--2.3%
Accenture Ltd., Cl. A 2 194,700 8,350,683
- --------------------------------------------------------------------------------
Automatic Data Processing, Inc. 244,400 11,846,068
- --------------------------------------------------------------------------------
Electronic Data Systems Corp. 376,500 10,440,345
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
IT SERVICES Continued
First Data Corp. 475,200 $ 15,524,784
- --------------------------------------------------------------------------------
MasterCard, Inc., Cl. A 2 45,700 7,580,259
- --------------------------------------------------------------------------------
Western Union Co. 107,900 2,247,557
----------------
55,989,696
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.5%
Xerox Corp. 1 699,200 12,921,216
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.7%
Analog Devices, Inc. 234,700 8,834,108
- --------------------------------------------------------------------------------
Applied Materials, Inc. 486,700 9,670,729
- --------------------------------------------------------------------------------
MEMC Electronic Materials, Inc. 1,2 93,700 5,726,944
- --------------------------------------------------------------------------------
NVIDIA Corp. 1 121,100 5,002,641
- --------------------------------------------------------------------------------
Texas Instruments, Inc. 297,500 11,194,925
----------------
40,429,347
- --------------------------------------------------------------------------------
SOFTWARE--4.4%
Adobe Systems, Inc. 1 148,200 5,950,230
- --------------------------------------------------------------------------------
Electronic Arts, Inc. 1,2 75,300 3,563,196
- --------------------------------------------------------------------------------
Microsoft Corp. 2,596,800 76,527,696
- --------------------------------------------------------------------------------
Oracle Corp. 1 924,800 18,227,808
----------------
104,268,930
- --------------------------------------------------------------------------------
MATERIALS--2.4%
- --------------------------------------------------------------------------------
CHEMICALS--0.8%
Dow Chemical Co. (The) 255,300 11,289,366
- --------------------------------------------------------------------------------
PPG Industries, Inc. 73,600 5,601,696
- --------------------------------------------------------------------------------
Rohm & Haas Co. 28,600 1,563,848
----------------
18,454,910
- --------------------------------------------------------------------------------
METALS & MINING--1.2%
Nucor Corp. 158,900 9,319,485
- --------------------------------------------------------------------------------
Southern Copper Corp. 2 84,300 7,946,118
- --------------------------------------------------------------------------------
United States Steel Corp. 96,400 10,483,500
----------------
27,749,103
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.4%
International Paper Co. 282,200 11,019,910
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.9%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.9%
AT&T, Inc. 261,828 10,865,862
- --------------------------------------------------------------------------------
Qwest Communications
International, Inc. 1,2 840,200 8,149,940
- --------------------------------------------------------------------------------
Verizon Communications, Inc. 631,256 25,988,810
----------------
45,004,612
8 | OPPENHEIMER MAIN STREET FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.0%
Alltel Corp. 128,500 $ 8,680,175
- --------------------------------------------------------------------------------
Sprint Nextel Corp. 704,823 14,596,884
----------------
23,277,059
- --------------------------------------------------------------------------------
UTILITIES--2.1%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.4%
Duke Energy Corp. 2 559,300 10,235,190
- --------------------------------------------------------------------------------
Edison International, Inc. 2 145,000 8,137,400
- --------------------------------------------------------------------------------
Exelon Corp. 88,300 6,410,580
- --------------------------------------------------------------------------------
FirstEnergy Corp. 2 35,800 2,317,334
- --------------------------------------------------------------------------------
Progress Energy, Inc. 2 117,300 5,347,707
- --------------------------------------------------------------------------------
Progress Energy, Inc., Contingent
Value Obligation 1, 3 32,000 10,560
----------------
32,458,771
- --------------------------------------------------------------------------------
ENERGY TRADERS--0.1%
Constellation Energy Group, Inc. 36,300 3,164,271
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.6%
PG&E Corp. 174,000 7,882,200
- --------------------------------------------------------------------------------
Sempra Energy 114,900 6,805,524
----------------
14,687,724
----------------
Total Common Stocks
(Cost $1,946,066,796) 2,371,905,456
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.0%
- --------------------------------------------------------------------------------
Wachovia Corp., Dividend Equalization
Preferred Shares 1 (Cost $0) 6,000 10
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
Dime Bancorp, Inc. Wts., Exp. 1/2/10 1 31,900 8,294
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. Wts.,
Exp. 12/10/07 1 4,837 822
----------------
Total Rights, Warrants and Certificates
(Cost $0) 9,116
SHARES
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--0.4%
- --------------------------------------------------------------------------------
Oppenheimer Institutional Money
Market Fund, Cl. E, 5.28% 4,5
(Cost $9,621,433) 9,621,433 9,621,433
- --------------------------------------------------------------------------------
Total Investments, at Value (excluding Investments
Purchased with Cash Collateral from Securities
Loaned) (Cost $1,955,688,229) 2,381,536,015
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM
SECURITIES LOANED--4.9% 6
- --------------------------------------------------------------------------------
ASSET BACKED FLOATING NOTE--0.2%
Citigroup Mortgage Loan Trust, Inc.,
Series 2006-HE1, Cl. A1,
5.38%, 7/25/07 $ 551,632 $ 551,632
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Series 2005-17, Cl. 4AV1,
5.43%, 7/25/07 69,022 69,022
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Series 2006-2, Cl. 2A1,
5.39%, 7/25/07 745,449 745,449
- --------------------------------------------------------------------------------
GSAA Home Equity Trust,
Series 2005-15, Cl. 2A1, 5.41%, 7/25/07 962,758 962,758
- --------------------------------------------------------------------------------
Whitehawk CDO Funding Corp.,
5.41%, 9/17/07 2,000,000 2,000,000
----------------
4,328,861
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--3.1%
Undivided interest of 1.49% in joint repurchase
agreement (Principal Amount/Value $1,320,000,000,
with a maturity value of $1,320,596,750) with
Nomura Securities, 5.425%, dated 6/29/07, to
be repurchased at $19,618,939 on 7/2/07,
collateralized by Private Label CMOs,
0%-6.75%, 10/25/21-1/25/47, with a
value of $1,386,000,000 19,610,074 19,610,074
- --------------------------------------------------------------------------------
Undivided interest of 11.01% in joint repurchase
agreement (Principal Amount/Value $500,000,000,
with a maturity value of $500,225,625) with
Barclays Capital, 5.415%, dated 6/29/07, to
be repurchased at $55,056,106 on 7/2/07,
collateralized by Private Label CMOs,
0%, 5/27/35-2/25/48, with a value
of $525,000,000 55,031,273 55,031,273
----------------
74,641,347
- --------------------------------------------------------------------------------
MEDIUM-TERM FLOATING NOTE--1.4%
ANZ National (Int'l) Ltd., 5.37%,
7/2/07 3,998,161 3,998,161
- --------------------------------------------------------------------------------
Caixa Catal, 5.39%, 9/7/07 5,000,000 5,000,000
- --------------------------------------------------------------------------------
CAM US Finance SA Unipersonal,
5.41%, 8/1/07 4,500,000 4,500,000
- --------------------------------------------------------------------------------
CC USA, Inc., 5.39%, 7/2/07 1,499,060 1,499,060
- --------------------------------------------------------------------------------
HSBC Finance Corp., 5.33%, 7/6/07 3,000,000 3,000,000
- --------------------------------------------------------------------------------
MBIA Global Funding LLC, 5.33%,
7/30/07 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Metropolitan Life Global Funding,
5.31%, 7/23/07 3,500,000 3,500,000
- --------------------------------------------------------------------------------
Nationwide Global Fund I, 5.36%,
9/17/07 4,004,055 4,004,055
- --------------------------------------------------------------------------------
Tango Finance Corp., 5.38%, 7/2/07 4,499,321 4,499,321
----------------
33,000,597
9 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
YANKEE FLOATING CERTIFICATE OF DEPOSIT--0.2%
Natexis Banques Populaires NY,
5.37%, 7/2/07 $ 2,000,000 $ 2,000,000
- --------------------------------------------------------------------------------
Natexis Banques Populaires NY,
5.39%, 7/2/07 1,999,854 1,999,854
----------------
3,999,854
----------------
Total Investments Purchased with
Cash Collateral from Securities Loaned
(Cost $115,970,659) 115,970,659
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $2,071,658,888) 104.9% 2,497,506,674
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS
OF OTHER ASSETS (4.9) (115,981,610)
------------------------------
NET ASSETS 100.0% $ 2,381,525,064
==============================
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,
2007 was $10,560, which represents less than 0.005% of the Fund's net assets.
See Note 6 of accompanying Notes.
4. Rate shown is the 7-day yield as of June 30, 2007.
5. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 2007, by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- --------------------------------------------------------------------------------
Oppenheimer
Institutional
Money Market
Fund, Cl. E 12,793,527 194,472,900 197,644,994 9,621,433
VALUE DIVIDEND
SEE NOTE 1 INCOME
- --------------------------------------------------------------------------------
Oppenheimer
Institutional
Money Market
Fund, Cl. E $ 9,621,433 $ 349,260
6. The security/securities have 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.
10 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- ------------------------------------------------------------------------------------------------------
ASSETS
- ------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $2,062,037,455) $2,487,885,241
Affiliated companies (cost $9,621,433) 9,621,433
---------------
2,497,506,674
- ------------------------------------------------------------------------------------------------------
Cash 756,435
- ------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 23,239,198
Shares of beneficial interest sold 4,094,012
Interest and dividends 2,847,659
Other 23,747
---------------
Total assets 2,528,467,725
- ------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 115,970,659
- ------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 21,212,712
Shares of beneficial interest redeemed 8,700,167
Distribution and service plan fees 815,814
Shareholder communications 194,625
Trustees' compensation 17,475
Transfer and shareholder servicing agent fees 2,044
Other 29,165
---------------
Total liabilities 146,942,661
- ------------------------------------------------------------------------------------------------------
NET ASSETS $2,381,525,064
===============
- ------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 91,091
- ------------------------------------------------------------------------------------------------------
Additional paid-in capital 1,909,971,440
- ------------------------------------------------------------------------------------------------------
Accumulated net investment income 13,486,496
- ------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 32,128,251
- ------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 425,847,786
---------------
NET ASSETS $2,381,525,064
===============
- ------------------------------------------------------------------------------------------------------
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 $1,027,426,571 and 39,124,786 shares of beneficial interest
outstanding) $ 26.26
- ------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on
net assets of $1,354,098,493 and 51,966,123 shares of beneficial interest
outstanding) $ 26.06
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2007
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies $ 21,855,737
Affiliated companies 349,260
- ----------------------------------------------------------------------------------------
Interest 12,186
- ----------------------------------------------------------------------------------------
Portfolio lending fees 197,064
--------------
Total investment income 22,414,247
- ----------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------
Management fees 7,144,177
- ----------------------------------------------------------------------------------------
Distribution and service plan fees:
Service shares 1,515,013
- ----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,125
Service shares 5,142
- ----------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 51,900
Service shares 60,960
- ----------------------------------------------------------------------------------------
Trustees' compensation 20,462
- ----------------------------------------------------------------------------------------
Custodian fees and expenses 7,088
- ----------------------------------------------------------------------------------------
Administration service fees 750
- ----------------------------------------------------------------------------------------
Other 46,836
--------------
Total expenses 8,857,453
Less reduction to custodian expenses (32)
Less waivers and reimbursements of expenses (6,648)
--------------
Net expenses 8,850,773
- ----------------------------------------------------------------------------------------
NET INVESTMENT INCOME 13,563,474
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ----------------------------------------------------------------------------------------
Net realized gain on:
Investments 99,960,125
Foreign currency transactions 157,394
--------------
Net realized gain 100,117,519
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 40,298,978
Translation of assets and liabilities denominated in foreign currencies (129,200)
--------------
Net change in unrealized appreciation 40,169,778
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 153,850,771
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER MAIN STREET FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006
- --------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------
Net investment income $ 13,563,474 $ 20,239,611
- --------------------------------------------------------------------------------------------------------------------------
Net realized gain 100,117,519 112,205,051
- --------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 40,169,778 135,126,116
---------------------------------
Net increase in net assets resulting from operations 153,850,771 267,570,778
- --------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (10,356,753) (12,723,204)
Service shares (9,852,371) (6,609,246)
---------------------------------
(20,209,124) (19,332,450)
- --------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares (79,378,643) (210,884,469)
Service shares 181,823,333 388,260,650
---------------------------------
102,444,690 177,376,181
- --------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------
Total increase 236,086,337 425,614,509
- --------------------------------------------------------------------------------------------------------------------------
Beginning of period 2,145,438,727 1,719,824,218
---------------------------------
End of period (including accumulated net investment income of $13,486,496
and $20,132,146, respectively) $2,381,525,064 $2,145,438,727
=================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER MAIN STREET FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 24.78 $ 21.79 $ 20.84 $ 19.20 $ 15.32 $ 18.99
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .17 1 .27 1 .26 1 .27 1 .18 .16
Net realized and unrealized
gain (loss) 1.56 2.98 .97 1.53 3.86 (3.70)
-------------------------------------------------------------------------------------------------
Total from investment
operations 1.73 3.25 1.23 1.80 4.04 (3.54)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment
income (.25) (.26) (.28) (.16) (.16) (.13)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 26.26 $ 24.78 $ 21.79 $ 20.84 $ 19.20 $ 15.32
=================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE 2 7.08% 15.03% 5.98% 9.46% 26.72% (18.80)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,027,427 $1,046,146 $1,121,476 $1,238,948 $1,214,960 $890,740
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $1,038,963 $1,054,522 $1,156,299 $1,216,081 $1,003,396 $999,275
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 3
Net investment income 1.34% 1.19% 1.26% 1.39% 1.10% 0.94%
Total expenses 0.65% 4,5,6 0.66% 4,5 0.67% 6 0.67% 6 0.70% 6 0.69% 6
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 54% 100% 88% 82% 85% 98%
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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.65%
Year Ended December 31, 2006 0.66
5. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
6. Reduction to custodian expenses less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER MAIN STREET FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 24.58 $ 21.63 $ 20.70 $ 19.10 $ 15.26 $ 18.95
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .14 1 .22 1 .21 1 .25 1 .14 .13
Net realized and unrealized gain
(loss) 1.55 2.95 .96 1.49 3.85 (3.70)
-------------------------------------------------------------------------------------------
Total from investment operations 1.69 3.17 1.17 1.74 3.99 (3.57)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.21) (.22) (.24) (.14) (.15) (.12)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 26.06 $ 24.58 $ 21.63 $ 20.70 $ 19.10 $ 15.26
===========================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 6.94% 14.76% 5.74% 9.15% 26.44% (18.99)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,354,098 $1,099,293 $598,348 $372,845 $166,717 $51,929
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,223,506 $ 810,181 $462,272 $262,660 $ 98,210 $34,604
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 1.10% 0.95% 1.02% 1.30% 0.83% 0.87%
Total expenses 0.90% 4,5,6 0.91% 4,5 0.91% 6 0.92% 6 0.96% 6 0.84% 6
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 54% 100% 88% 82% 85% 98%
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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.90%
Year Ended December 31, 2006 0.91
5. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
6. Reduction to custodian expenses less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | 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(R) 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. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. 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
16 | OPPENHEIMER MAIN STREET FUND/VA
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.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
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, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of zero. 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, 2007, it is estimated that the Fund will utilize $51,200,524 of capital loss
carryforward to offset realized capital gains. During the fiscal year ended
December 31, 2006, the Fund utilized $112,599,269 of capital loss carryforward
to offset capital gains realized in that fiscal year.
As of December 31, 2006, the Fund had available for federal income tax purposes
post-October foreign currency losses of $4,544 and unused capital loss
carryforwards as follows:
EXPIRING
-----------------------
2010 $24,626,627
2011 26,569,353
-----------
Total $51,195,980
===========
17 | OPPENHEIMER MAIN STREET FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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 compensation deferral 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.
- --------------------------------------------------------------------------------
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.
18 | OPPENHEIMER MAIN STREET FUND/VA
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED JUNE 30, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 1,177,602 $ 29,821,717 2,514,408 $ 57,767,133
Dividends and/or distributions reinvested 425,853 10,356,753 570,547 12,723,204
Redeemed (4,694,460) (119,557,113) (12,341,295) (281,374,806)
-------------------------------------------------------------
Net decrease (3,091,005) $ (79,378,643) (9,256,340) $ (210,884,469)
=============================================================
- ---------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 9,694,779 $ 244,544,319 19,602,827 $ 446,509,884
Dividends and/or distributions reinvested 407,708 9,846,137 298,058 6,604,957
Redeemed (2,862,614) (72,567,123) (2,838,200) (64,854,191)
-------------------------------------------------------------
Net increase 7,239,873 $ 181,823,333 17,062,685 $ 388,260,650
=============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
June 30, 2007, were as follows:
PURCHASES SALES
- --------------------------------------------------------------------
Investment securities $ 1,300,874,637 $ 1,201,188,163
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
---------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Over $800 million 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, 2007, the Fund paid
$9,994 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
19 | OPPENHEIMER MAIN STREET FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended June 30, 2007, the Manager waived $6,648 for
IMMF management fees.
- --------------------------------------------------------------------------------
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, 2007, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. ILLIQUID SECURITIES
As of June 30, 2007, 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, 2007, the Fund
20 | OPPENHEIMER MAIN STREET FUND/VA
had on loan securities valued at $113,727,569, which are included in the
Statement of Assets and Liabilities as "Investments, at value" and, when
applicable, as "Receivable for Investments sold." Collateral of $115,970,659 was
received for the loans, all of which was received in cash and subsequently
invested in approved investments.
- --------------------------------------------------------------------------------
8. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
21 | OPPENHEIMER MAIN STREET FUND/VA
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in 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.
22 | OPPENHEIMER MAIN STREET 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, 2007.
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
(1/1/07) (6/30/07) JUNE 30, 2007
- --------------------------------------------------------------------------------
Actual $ 1,000.00 $ 1,024.50 $ 2.51
- --------------------------------------------------------------------------------
Hypothetical 1,000.00 1,022.32 2.51
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, 2007 is as follows:
EXPENSE RATIO
- -------------
0.50%
The expense ratios reflect reduction to custodian fees. The "Financial
Highlights" tables in the Fund's financial statements, included in this report,
also show the gross expense ratios, without such waivers or reimbursements.
- --------------------------------------------------------------------------------
5 | OPPENHEIMER MONEY FUND/VA
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT--9.3%
- --------------------------------------------------------------------------------
Abbey National Treasury Services plc,
Stamford CT, 5.30%, 8/1/07 $ 2,000,000 $ 2,000,000
- --------------------------------------------------------------------------------
Barclays Bank plc, New York,
5.30%, 7/23/07 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Citibank NA, 5.30%, 8/2/07 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Skandinaviska Enskilda Banken,
New York, 5.31%, 8/21/07 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Societe Generale, New York,
5.30%, 7/30/07 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Toronto Dominion Bank,
New York, 5.32%, 9/24/07 2,500,000 2,500,000
- --------------------------------------------------------------------------------
UBS AG, Stamford CT, 5.30%, 7/16/07 2,400,000 2,400,000
- --------------------------------------------------------------------------------
Washington Mutual Bank FA,
5.30%, 8/6/07 1,500,000 1,500,000
--------------
Total Certificates of Deposit (Cost $16,400,000) 16,400,000
- --------------------------------------------------------------------------------
DIRECT BANK OBLIGATIONS--21.4%
- --------------------------------------------------------------------------------
ABN AMRO North America Finance,
Inc., 5.23%, 8/6/07 3,000,000 2,984,310
- --------------------------------------------------------------------------------
Barclays US Funding LLC,
5.23%, 7/13/07 2,000,000 1,996,513
- --------------------------------------------------------------------------------
DnB NOR Bank ASA, 5.23%, 7/12/07 3,000,000 2,995,206
- --------------------------------------------------------------------------------
Governor & Co. of the Bank of Ireland,
5.24%, 7/10/07 1 3,000,000 2,996,074
- --------------------------------------------------------------------------------
HBOS Treasury Services plc, Sydney,
5.24%, 7/20/07 1,500,000 1,495,852
- --------------------------------------------------------------------------------
Marshall & Ilsley Corp., 5.26%, 9/21/07 1,500,000 1,482,028
- --------------------------------------------------------------------------------
Nationwide Building Society:
5.235%, 7/18/07 1 2,700,000 2,693,325
5.253%, 9/13/07 1 2,000,000 1,978,404
- --------------------------------------------------------------------------------
Nordea North America, Inc.,
5.23%, 7/13/07 2,000,000 1,996,513
- --------------------------------------------------------------------------------
Scotiabanc, Inc., 5.28%, 9/27/07 1 2,000,000 1,974,211
- --------------------------------------------------------------------------------
Societe Generale North America,
5.27%, 9/27/07 1,500,000 1,480,677
- --------------------------------------------------------------------------------
St. George Bank Ltd.:
5.235%, 7/3/07 1 2,000,000 1,999,418
5.25%, 9/4/07 1 2,000,000 1,981,042
5.25%, 9/6/07 1 1,200,000 1,188,275
- --------------------------------------------------------------------------------
Swedbank AB, 5.23%, 8/17/07 3,000,000 2,979,516
- --------------------------------------------------------------------------------
Swedbank Mortgage AB,
5.23%, 8/9/07 2,000,000 1,988,668
- --------------------------------------------------------------------------------
UBS Finance (Delaware) LLC:
5.23%, 7/23/07 1,000,000 996,804
5.23%, 8/2/07 800,000 796,274
5.23%, 8/6/07 1,500,000 1,492,155
--------------
Total Direct Bank Obligations (Cost $37,495,265) 37,495,265
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
SHORT-TERM NOTES--69.0%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.2%
Montgomery, AL Industrial
Development Board, Revenue Bonds,
Industrial Bristol Project,
Series B, 5.67%, 8/1/07 2 $ 320,000 $ 320,000
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--24.0%
Amsterdam Funding Corp.:
5.28%, 7/2/07 1 1,000,000 999,853
5.29%, 7/31/07 1 3,200,000 3,185,893
5.45%, 7/5/07 1 300,000 299,818
- --------------------------------------------------------------------------------
Capital Auto Receivables Asset Trust
2007-SN1, Automobile Asset-Backed
Securities, Series 2007-A1B, Cl. A1B,
5.32%, 6/16/08 2,3 2,264,165 2,264,165
- --------------------------------------------------------------------------------
Chesham Finance LLC, 5.28%, 9/4/07 3,074,000 3,044,695
- --------------------------------------------------------------------------------
Crown Point Capital Co., 5.33%, 7/5/07 3,200,000 3,198,105
- --------------------------------------------------------------------------------
FCAR Owner Trust II:
5.25%, 7/26/07 1,500,000 1,494,531
5.31%, 7/19/07 1,262,000 1,258,649
- --------------------------------------------------------------------------------
Gemini Securitization Corp.:
5.245%, 8/27/07 1 2,000,000 1,983,391
5.255%, 7/5/07 1 1,500,000 1,499,124
- --------------------------------------------------------------------------------
GOVCO, Inc.:
5.24%, 7/12/07 1 2,000,000 1,996,798
5.24%, 7/17/07 1 2,500,000 2,494,178
- --------------------------------------------------------------------------------
Mont Blanc Capital Corp.,
5.27%, 9/21/07 1 1,500,000 1,481,994
- --------------------------------------------------------------------------------
New Center Asset Trust:
5.29%, 7/20/07 1,500,000 1,495,812
5.30%, 7/5/07 2,049,000 2,047,793
- --------------------------------------------------------------------------------
Saint Germain Holdings, Inc.:
5.33%, 7/6/07 4 4,000,000 3,997,056
5.34%, 7/23/07 4 1,200,000 1,196,084
- --------------------------------------------------------------------------------
Victory Receivables Corp.:
5.30%, 7/20/07 1 1,812,000 1,806,931
5.31%, 7/3/07 1 3,500,000 3,498,968
- --------------------------------------------------------------------------------
Yorktown Capital LLC,
5.28%, 8/9/07 1 3,000,000 2,982,840
--------------
42,226,678
- --------------------------------------------------------------------------------
AUTOMOBILES--1.1%
Ande Chevrolet Olds, Inc.,
Series 2004, 5.47%, 7/2/07 2 1,935,000 1,935,000
- --------------------------------------------------------------------------------
CAPITAL MARKETS--5.4%
Banc of America Securities
LLC, 5.32%, 7/2/07 2 5,000,000 5,000,000
- --------------------------------------------------------------------------------
Lehman Brothers, Inc., 5.50%, 7/2/07 2 1,000,000 1,000,000
- --------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.,
Series C, 5.48%, 10/19/07 2 2,000,000 2,000,906
- --------------------------------------------------------------------------------
Morgan Stanley, 5.23%, 8/3/07 1,427,000 1,420,159
--------------
9,421,065
6 | OPPENHEIMER MONEY FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CHEMICALS--0.6%
BASF AG, 5.25%, 8/17/07 1 $ 1,000,000 $ 993,152
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--3.1%
Bank of America Corp.:
5.225%, 7/30/07 1,600,000 1,593,266
5.26%, 9/27/07 2,000,000 1,974,284
- --------------------------------------------------------------------------------
J.P. Morgan Chase & Co., 5.23%,
8/24/07 1 2,000,000 1,984,310
--------------
5,551,860
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--8.0%
General Electric Capital Corp.,
5.23%, 7/30/07 3,200,000 3,186,531
- --------------------------------------------------------------------------------
General Electric Capital Services,
5.24%, 9/14/07 2,000,000 1,978,167
- --------------------------------------------------------------------------------
Greenwich Capital Holdings, Inc.,
5.53%, 11/15/07 2 2,000,000 2,000,000
- --------------------------------------------------------------------------------
HSBC Finance Corp.:
5.23%, 7/11/07 1,500,000 1,497,821
5.23%, 8/10/07 2,000,000 1,988,378
5.26%, 9/17/07 1,500,000 1,482,905
- --------------------------------------------------------------------------------
Prudential Funding LLC,
5.24%, 8/15/07 3 2,000,000 1,986,900
--------------
14,120,702
- --------------------------------------------------------------------------------
FOOD PRODUCTS--2.1%
Nestle Capital Corp., 5.40%, 7/2/07 1 3,700,000 3,699,445
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.3%
Alta Mira LLC, Series 2004,
5.42%, 7/2/07 2 2,250,000 2,250,000
- --------------------------------------------------------------------------------
INSURANCE--5.4%
ING America Insurance
Holdings, Inc., 5.23%, 8/9/07 3,000,000 2,983,003
- --------------------------------------------------------------------------------
Jackson National Life Global Funding,
Series 2004-6, 5.41%, 7/16/07 2,3 2,500,000 2,500,000
- --------------------------------------------------------------------------------
Metropolitan Life Global Funding I,
Series 2003-5, 5.41%, 7/16/07 2,3 4,000,000 4,000,000
--------------
9,483,003
- --------------------------------------------------------------------------------
LEASING & FACTORING--2.8%
American Honda Finance Corp.:
5.325%, 10/30/07 2,4 1,000,000 999,996
5.326%, 8/8/07 2,4 2,000,000 2,000,000
5.33%, 9/26/07 2,4 2,000,000 2,000,000
--------------
4,999,996
- --------------------------------------------------------------------------------
MACHINERY--1.2%
Jackson Tube Service, Inc.,
5.37%, 7/2/07 2 2,150,000 2,150,000
- --------------------------------------------------------------------------------
MUNICIPAL--0.4%
Hayward, CA Multifamily Housing
Revenue Bonds, Lord Tennyson Apts.,
5.62%, 7/2/07 2 710,000 710,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--3.3%
Procter & Gamble International
Funding SCA:
5.25%, 9/13/07 1 $ 2,000,000 $ 1,978,396
5.26%, 9/20/07 1 2,000,000 1,976,330
- --------------------------------------------------------------------------------
Reckitt Benckiser plc, 5.25%, 7/17/07 1 1,800,000 1,795,800
--------------
5,750,526
- --------------------------------------------------------------------------------
REAL ESTATE--0.6%
St. Johns Cnty., FL Industrial
Development Authority Revenue
Bonds, 5.42%, 7/4/07 2 1,000,000 1,000,000
- --------------------------------------------------------------------------------
SPECIAL PURPOSE FINANCIAL--9.5%
Cooperative Assn. of Tractor
Dealers, Inc., Series B, 5.32%, 7/2/07 4,963,000 4,962,268
- --------------------------------------------------------------------------------
K2 (USA) LLC, 5.23%, 9/20/07 2,000,000 1,976,465
- --------------------------------------------------------------------------------
LINKS Finance LLC 1, 5.32%, 12/20/07 2,4 1,000,000 999,908
- --------------------------------------------------------------------------------
Parkland (USA) LLC, 5.33%, 12/12/07 2,4 1,000,000 999,910
- --------------------------------------------------------------------------------
RACERS Trust, Series 2004-6-MM,
5.37%, 7/23/07 2 1,000,000 1,000,000
- --------------------------------------------------------------------------------
Ticonderoga Funding LLC,
5.30%, 8/29/07 1,700,000 1,685,233
- --------------------------------------------------------------------------------
Union Hamilton Special Purpose
Funding LLC, 5.36%, 9/28/07 2 2,000,000 2,000,000
- --------------------------------------------------------------------------------
ZAIS Levered Loan Fund Ltd. CLO,
Series 2006-1A, Cl. 1, 5.43%, 1/2/08 2,3 3,000,000 3,000,000
--------------
16,623,784
--------------
Total Short-Term Notes (Cost $121,235,211) 121,235,211
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $175,130,476) 99.7% 175,130,476
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.3 590,240
----------------------------
NET ASSETS 100.0% $ 175,720,716
============================
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. Security issued in an exempt transaction without registration under the
Securities Act of 1933. Such securities amount to $49,467,970, or 28.15% of the
Fund's net assets, and have been determined to be liquid pursuant to guidelines
adopted by the Board of Trustees.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Illiquid security. The aggregate value of illiquid securities as of June 30,
2007 was $13,751,065, which represents 7.83% 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 $12,192,954 or 6.94% of the Fund's net
assets as of June 30, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7 | OPPENHEIMER MONEY FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- -------------------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------------------
Investments, at value (cost $175,130,476)--see accompanying statement of investments $ 175,130,476
- -------------------------------------------------------------------------------------------------------------------
Cash 216,606
- -------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 644,893
Interest 285,647
Other 4,685
---------------
Total assets 176,282,307
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Dividends 301,590
Shares of beneficial interest redeemed 242,098
Trustees' compensation 3,468
Shareholder communications 2,777
Transfer and shareholder servicing agent fees 879
Other 10,779
---------------
Total liabilities 561,591
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 175,720,716
===============
- -------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 175,696
- -------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 175,546,087
- -------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (1,067)
---------------
NET ASSETS--applicable to 175,695,695 shares of beneficial interest outstanding $ 175,720,716
===============
- -------------------------------------------------------------------------------------------------------------------
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, 2007
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------------------
Interest $ 4,657,355
- -------------------------------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------------------------------
Management fees 390,378
- -------------------------------------------------------------------------------------------------------------------
Shareholder communications 20,657
- -------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 4,993
- -------------------------------------------------------------------------------------------------------------------
Trustees' compensation 3,515
- -------------------------------------------------------------------------------------------------------------------
Administration service fees 750
- -------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 570
- -------------------------------------------------------------------------------------------------------------------
Other 14,567
---------------
Total expenses 435,430
Less reduction to custodian expenses (66)
---------------
Net expenses 435,364
- -------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 4,221,991
- -------------------------------------------------------------------------------------------------------------------
NET REALIZED LOSS ON INVESTMENTS (2)
- -------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,221,989
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER MONEY FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 4,221,991 $ 7,889,511
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (2) 3,420
--------------------------------
Net increase in net assets resulting from operations 4,221,989 7,892,931
- -----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (4,221,991) (7,889,609)
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (3,645) (6,674)
- -----------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions 4,203,667 (1,637,470)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) 4,200,020 (1,640,822)
- -----------------------------------------------------------------------------------------------------------------------------------
Beginning of period 171,520,696 173,161,518
--------------------------------
End of period $ 175,720,716 $ 171,520,696
================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER MONEY FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
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 .05 1 .03 1 .01 1 .01 .01
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.02) (.05) (.03) (.01) (.01) (.01)
Distributions from net realized gain -- 2 -- 2 -- -- -- -- 2
-----------------------------------------------------------------------------
Total dividends and/or distributions to
shareholders (.02) (.05) (.03) (.01) (.01) (.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 3 2.45% 4.71% 2.86% 0.98% 0.79% 1.47%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $175,721 $171,521 $173,162 $196,503 $237,613 $379,969
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $174,960 $171,118 $186,453 $218,243 $316,096 $386,457
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 4.87% 4.61% 2.80% 0.97% 0.80% 1.46%
Total expenses 0.50% 5 0.49% 0.48% 5 0.48% 5 0.47% 5 0.47% 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 less than one full year.
5. Reduction to custodian expenses less than 0.005%.
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).
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. As permitted under Rule 2a-7 of the Investment Company Act
of 1940, portfolio securities are valued on the basis of amortized cost, which
approximates market value. If amortized cost is determined not to approximate
market value, the fair value of the portfolio securities will be determined
under procedures approved by the Fund's Board of Trustees.
- --------------------------------------------------------------------------------
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, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $2 expiring by 2015. 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, 2007, it is estimated that the Fund will utilize $2 of
capital loss carryforward to offset realized capital gains. During the fiscal
year ended December 31, 2006, the Fund did not utilize any capital loss
carryforward to offset capital gains realized in that fiscal year.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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 compensation deferral 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.
12 | OPPENHEIMER MONEY FUND/VA
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
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, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------
Sold 66,707,129 $ 66,707,129 102,552,229 $ 102,552,229
Dividends and/or distributions reinvested 4,225,636 4,225,636 7,809,321 7,809,321
Redeemed (66,729,098) (66,729,098) (111,999,020) (111,999,020)
-------------------------------------------------------------
Net increase (decrease) 4,203,667 $ 4,203,667 (1,637,470) $ (1,637,470)
=============================================================
- --------------------------------------------------------------------------------
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
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
---------------------------------------------
Up to $500 million 0.450%
Next $500 million 0.425
Next $500 million 0.400
Over $1.5 billion 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, 2007, the Fund paid
$4,988 to OFS for services to the Fund.
13 | OPPENHEIMER MONEY FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
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.
- --------------------------------------------------------------------------------
4. ILLIQUID SECURITIES
As of June 30, 2007, 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. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
14 | OPPENHEIMER MONEY FUND/VA
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in 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 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, 2007.
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.
5 | OPPENHEIMER HIGH INCOME FUND/VA
FUND EXPENSES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(1/1/07) (6/30/07) JUNE 30, 2007 1,2
- --------------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,031.70 $3.73
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.12 3.72
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,029.40 5.04
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,019.84 5.02
ENDING EXPENSES
BEGINNING ACCOUNT PAID DURING
ACCOUNT VALUE PERIOD ENDED
VALUE (6/30/07) JUNE 30, 2007 2,3
- --------------------------------------------------------------------------------
Class 3 Actual $1,000.00 $ 995.10 $1.25
- --------------------------------------------------------------------------------
Class 3 Hypothetical 1,000.00 1,021.08 3.77
- --------------------------------------------------------------------------------
Class 4 Actual 1,000.00 993.90 1.63
- --------------------------------------------------------------------------------
Class 4 Hypothetical 1,000.00 1,019.93 4.92
Hypothetical assumes 5% annual return before expenses.
1. Actual expenses paid for Non-Service shares and Service shares 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).
2. Hypothetical expenses paid for all classes 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).
3. Actual expenses paid for Class 3 and Class 4 are equal to the Fund's
annualized expense ratio for that class, multiplied by the average account value
over the period, multiplied by 61/365 [to reflect the period from May 1, 2007
(inception of offering) to June 30, 2006].
Those annualized expense ratios, excluding affiliated fund indirect expenses,
based on the 6-month period ended June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- ----------------------------------------
Non-Service shares 0.74%
- ----------------------------------------
Service shares 1.00
- ----------------------------------------
Class 3 0.75
- ----------------------------------------
Class 4 0.98
The expense ratios reflect reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager that can be terminated at any time, without
advance notice. The "Financial Highlights" tables in the Fund's financial
statements, included in this report, also show the gross expense ratios, without
such waivers or reimbursements.
- --------------------------------------------------------------------------------
6 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--78.1%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--27.1%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--1.0%
Goodyear Tire & Rubber Co. (The):
7.857% Nts., 8/15/11 $ 1,250,000 $ 1,281,250
9% Sr. Unsec. Nts., 7/1/15 303,419 328,451
- --------------------------------------------------------------------------------
Stoneridge, Inc., 11.50% Sr. Nts., 5/1/12 900,000 945,000
- --------------------------------------------------------------------------------
Tenneco Automotive, Inc.,
10.25% Sr. Sec. Nts., Series B, 7/15/13 900,000 972,000
- --------------------------------------------------------------------------------
Visteon Corp.,
8.25% Sr. Unsec. Nts., 8/1/10 1,800,000 1,795,500
-------------
5,322,201
- --------------------------------------------------------------------------------
AUTOMOBILES--0.4%
General Motors Acceptance Corp.,
8% Bonds, 11/1/31 2,250,000 2,307,026
- --------------------------------------------------------------------------------
DISTRIBUTORS--0.2%
SGS International, Inc.,
12% Sr. Unsec. Sub. Nts., 12/15/13 745,000 815,775
- --------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--0.2%
Education Management
LLC/Education Management Corp.,
10.25% Sr. Unsec. Sub. Nts., 6/1/16 830,000 877,725
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--6.6%
American Casino & Entertainment
Properties LLC, 7.85% Sr. Sec. Nts., 2/1/12 1,300,000 1,342,250
- --------------------------------------------------------------------------------
Buffets, Inc.,
12.50% Sr. Unsec. Nts., 11/1/14 315,000 303,188
- --------------------------------------------------------------------------------
CCM Merger, Inc.,
8% Unsec. Nts., 8/1/13 1 1,340,000 1,340,000
- --------------------------------------------------------------------------------
French Lick Resorts & Casino LLC,
10.75% First Mtg. Nts., 4/15/14 1 1,310,000 1,126,600
- --------------------------------------------------------------------------------
Gaylord Entertainment Co.:
6.75% Sr. Unsec. Unsub. Nts., 11/15/14 500,000 493,750
8% Sr. Nts., 11/15/13 700,000 713,125
- --------------------------------------------------------------------------------
Greektown Holdings, Inc.,
10.75% Sr. Nts., 12/1/13 2 1,435,000 1,528,275
- --------------------------------------------------------------------------------
Isle of Capri Casinos, Inc.:
7% Sr. Unsec. Sub. Nts., 3/1/14 1,150,000 1,093,938
9% Sr. Sub. Nts., 3/15/12 600,000 628,500
- --------------------------------------------------------------------------------
Mandalay Resort Group:
9.375% Sr. Sub. Nts., 2/15/10 41,000 43,460
10.25% Sr. Unsec. Sub. Nts.,
Series B, 8/1/07 800,000 803,000
- --------------------------------------------------------------------------------
MGM Mirage, Inc.:
6.75% Sr. Unsec. Nts., 4/1/13 510,000 487,050
8.375% Sr. Unsec. Sub. Nts., 2/1/11 3,200,000 3,288,000
- --------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority:
6.125% Sr. Unsec. Sub. Nts., 2/15/13 440,000 429,000
6.375% Sr. Sub. Nts., 7/15/09 800,000 796,000
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE Continued
Mohegan Tribal Gaming Authority: Continued
6.875% Sr. Unsec. Sub. Nts., 2/15/15 $ 915,000 $ 894,413
8% Sr. Sub. Nts., 4/1/12 1,700,000 1,763,750
- --------------------------------------------------------------------------------
NCL Corp.,
10.625% Sr. Unsub. Nts., 7/15/14 2 800,000 776,000
- --------------------------------------------------------------------------------
Park Place Entertainment Corp.,
7.875% Sr. Sub. Nts., 3/15/10 1,000,000 1,028,800
- --------------------------------------------------------------------------------
Penn National Gaming, Inc.:
6.75% Sr. Unsec. Sub. Nts., 3/1/15 145,000 149,350
6.875% Sr. Sub. Nts., 12/1/11 150,000 153,188
- --------------------------------------------------------------------------------
Pinnacle Entertainment, Inc.,
8.25% Sr. Unsec. Sub. Nts., 3/15/12 2,350,000 2,432,250
- --------------------------------------------------------------------------------
Pokagon Gaming Authority,
10.375% Sr. Nts., 6/15/14 1 610,000 675,575
- --------------------------------------------------------------------------------
Six Flags, Inc.:
9.625% Sr. Nts., 6/1/14 957,000 892,403
9.75% Sr. Nts., 4/15/13 850,000 804,313
- --------------------------------------------------------------------------------
Station Casinos, Inc.:
6.50% Sr. Unsec. Sub. Nts., 2/1/14 1,800,000 1,602,000
6.875% Sr. Unsec. Sub. Nts., 3/1/16 480,000 426,000
- --------------------------------------------------------------------------------
Travelport LLC,
11.875% Sr. Unsec. Sub. Nts., 9/1/16 1,800,000 2,043,000
- --------------------------------------------------------------------------------
Trump Entertainment Resorts, Inc.,
8.50% Sec. Nts., 6/1/15 1,500,000 1,496,250
- --------------------------------------------------------------------------------
Universal City Development
Partners Ltd.,
11.75% Sr. Nts., 4/1/10 1,000,000 1,062,500
- --------------------------------------------------------------------------------
Vail Resorts, Inc.,
6.75% Sr. Sub. Nts., 2/15/14 1,100,000 1,076,625
- --------------------------------------------------------------------------------
Wynn Las Vegas LLC/Wynn Las Vegas
Capital Corp., 6.625% Nts., 12/1/14 2,500,000 2,421,875
-------------
34,114,428
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.6%
Beazer Homes USA, Inc.:
6.875% Sr. Unsec. Nts., 7/15/15 300,000 259,500
8.375% Sr. Nts., 4/15/12 500,000 475,000
- --------------------------------------------------------------------------------
D.R. Horton, Inc.,
9.75% Sr. Sub. Nts., 9/15/10 300,000 325,287
- --------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc.:
6.50% Sr. Nts., 1/15/14 300,000 267,000
7.75% Sr. Unsec. Sub. Nts., 5/15/13 900,000 792,000
8.875% Sr. Sub. Nts., 4/1/12 800,000 740,000
- --------------------------------------------------------------------------------
KB Home:
8.625% Sr. Sub. Nts., 12/15/08 150,000 153,750
9.50% Sr. Unsec. Sub. Nts., 2/15/11 350,000 360,500
- --------------------------------------------------------------------------------
Meritage Homes Corp.,
6.25% Sr. Unsec. Nts., 3/15/15 300,000 268,500
- --------------------------------------------------------------------------------
Sealy Mattress Co.,
8.25% Sr. Sub. Nts., 6/15/14 460,000 473,800
7 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES Continued
Standard Pacific Corp.:
6.25% Sr. Unsec. Unsub. Nts., 4/1/14 $ 600,000 $ 531,000
7.75% Sr. Nts., 3/15/13 650,000 601,250
9.25% Sr. Sub. Nts., 4/15/12 700,000 665,000
- --------------------------------------------------------------------------------
Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 500,000 518,750
- --------------------------------------------------------------------------------
WCI Communities, Inc.,
9.125% Sr. Sub. Nts., 5/1/12 800,000 776,000
- --------------------------------------------------------------------------------
William Lyon Homes, Inc.,
10.75% Sr. Nts., 4/1/13 1,150,000 1,086,750
-------------
8,294,087
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.3%
Leslie's Poolmart, Inc.,
7.75% Sr. Unsec. Nts., 2/1/13 1,245,000 1,245,000
- --------------------------------------------------------------------------------
Steinway Musical Instruments, Inc.,
7% Sr. Nts., 3/1/14 1 275,000 269,500
-------------
1,514,500
- --------------------------------------------------------------------------------
MEDIA--14.1%
Adelphia Communications Corp.:
7.875% Escrow Shares, Series B, 5/1/09 3,4 360,000 110,700
8.125% Escrow Shares, Series B, 7/15/03 3,4 575,000 180,406
8.375% Escrow Shares, Series B, 2/1/08 3,4 1,000,000 313,750
10.25% Escrow Shares, Series B, 6/15/11 3,4 1,000,000 327,500
10.875% Escrow Shares, Series B, 10/1/10 3,4 1,000,000 315,000
- --------------------------------------------------------------------------------
Allbritton Communications Co.,
7.75% Sr. Unsec. Sub. Nts., 12/15/12 700,000 707,000
- --------------------------------------------------------------------------------
AMC Entertainment, Inc.,
8% Sr. Unsec. Sub. Nts., 3/1/14 1,050,000 1,034,250
- --------------------------------------------------------------------------------
American Media Operations, Inc.:
8.875% Sr. Unsec. Sub. Nts., 1/15/11 900,000 859,500
10.25% Sr. Unsec. Sub. Nts.,
Series B, 5/1/09 1,450,000 1,381,125
- --------------------------------------------------------------------------------
Block Communications, Inc.,
8.25% Sr. Nts., 12/15/15 1 625,000 634,375
- --------------------------------------------------------------------------------
Charter Communications Holdings II
LLC/Charter Communications
Holdings II Capital Corp.:
10.25% Sr. Unsec. Nts., 9/15/10 2,050,000 2,152,500
10.25% Sr. Unsec. Nts., Series B, 9/15/10 1,845,000 1,934,944
- --------------------------------------------------------------------------------
Charter Communications
Operating LLC/Charter
Communications Operating
Capital Corp.,
8.375% Sr. Nts., Second Lien, 4/30/14 1 2,450,000 2,505,125
- --------------------------------------------------------------------------------
Cinemark, Inc.,
0%/9.75% Sr. Unsec. Disc. Nts., 3/15/14 5 2,700,000 2,470,500
- --------------------------------------------------------------------------------
CSC Holdings, Inc.:
7.625% Sr. Unsec. Debs., 7/15/18 1,500,000 1,432,500
7.625% Sr. Unsec. Unsub. Nts.,
Series B, 4/1/11 900,000 897,750
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Dex Media East LLC/Dex
Media East Finance Co.,
9.875% Sr. Unsec. Nts., 11/15/09 $ 800,000 $ 831,000
- --------------------------------------------------------------------------------
Dex Media West LLC/Dex
Media West Finance Co.:
8.50% Sr. Nts., 8/15/10 700,000 727,125
9.875% Sr. Sub. Nts., 8/15/13 1,772,000 1,904,900
- --------------------------------------------------------------------------------
Dex Media, Inc.:
0%/9% Unsec. Disc. Nts., 11/15/13 5 500,000 473,125
8% Unsec. Nts., 11/15/13 2,250,000 2,295,000
- --------------------------------------------------------------------------------
DirecTV Holdings LLC/DirecTV
Financing Co., Inc.:
6.375% Sr. Unsec. Nts., 6/15/15 1,100,000 1,036,750
8.375% Sr. Unsec. Nts., 3/15/13 1,800,000 1,892,250
- --------------------------------------------------------------------------------
EchoStar DBS Corp.:
6.625% Sr. Unsec. Nts., 10/1/14 2,800,000 2,681,000
7% Sr. Unsec. Nts., 10/1/13 640,000 633,600
7.125% Sr. Unsec. Nts., 2/1/16 800,000 786,000
- --------------------------------------------------------------------------------
Idearc, Inc., 8% Sr. Unsec. Nts., 11/15/16 2,300,000 2,334,500
- --------------------------------------------------------------------------------
Lamar Media Corp.:
6.625% Sr. Unsec. Sub. Nts., 8/15/15 1,357,000 1,292,543
7.25% Sr. Unsec. Sub. Nts., 1/1/13 200,000 200,500
- --------------------------------------------------------------------------------
Lin Television Corp.,
6.50% Sr. Sub. Nts., 5/15/13 785,000 771,263
- --------------------------------------------------------------------------------
Marquee Holdings, Inc.,
0%/12% Sr. Disc. Nts., 8/15/14 5 2,200,000 1,925,000
- --------------------------------------------------------------------------------
Mediacom Broadband LLC/Mediacom
Broadband Corp.:
8.50% Sr. Nts., 10/15/15 1 1,465,000 1,479,650
8.50% Sr. Unsec. Nts., 10/15/15 280,000 282,800
- --------------------------------------------------------------------------------
Mediacom LLC/Mediacom Capital Corp.,
9.50% Sr. Unsec. Nts., 1/15/13 957,000 980,925
- --------------------------------------------------------------------------------
MediaNews Group, Inc.:
6.375% Sr. Sub. Nts., 4/1/14 1,400,000 1,172,500
6.875% Sr. Unsec. Sub. Nts., 10/1/13 800,000 692,000
- --------------------------------------------------------------------------------
Nielsen Finance LLC/Nielsen Finance Co.:
0%/12.50% Sr. Sub. Disc. Nts., 8/1/16 1,5 1,090,000 773,900
10% Sr. Nts., 8/1/14 1 3,230,000 3,431,875
- --------------------------------------------------------------------------------
Paxson Communications Corp.,
11.61% Sr. Sec. Nts., 1/15/13 1,6 1,165,000 1,208,688
- --------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8% Sr. Nts., 5/15/13 1,100,000 1,163,250
8.875% Sr. Unsec. Nts., 5/15/11 1,157,000 1,194,603
- --------------------------------------------------------------------------------
Quebecor World Capital Corp.,
8.75% Sr. Nts., 3/15/16 1 460,000 455,400
- --------------------------------------------------------------------------------
R.H. Donnelley Corp.:
6.875% Sr. Disc. Nts., Series A-1, 1/15/13 4,135,000 3,938,588
6.875% Sr. Disc. Nts., Series A-2, 1/15/13 1,960,000 1,866,900
6.875% Sr. Nts., 1/15/13 2,700,000 2,571,750
8.875% Sr. Unsec. Nts.,
Series A-3, 1/15/16 2,855,000 2,983,475
8 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
R.H. Donnelley Financial Corp. I,
10.875% Sr. Sub. Nts., 12/15/12 1 $ 1,000,000 $ 1,071,250
- --------------------------------------------------------------------------------
Radio One, Inc., 8.875% Sr. Unsec.
Sub. Nts., Series B, 7/1/11 800,000 823,000
- --------------------------------------------------------------------------------
Rainbow National Services LLC,
8.75% Sr. Nts., 9/1/12 1 900,000 940,500
- --------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc.,
8% Sr. Unsec. Sub. Nts., 3/15/12 1,908,400 1,965,652
- --------------------------------------------------------------------------------
Sirius Satellite Radio, Inc.,
9.625% Sr. Unsec. Nts., 8/1/13 730,000 719,050
- --------------------------------------------------------------------------------
Vertis, Inc.:
9.75% Sr. Sec. Nts., 4/1/09 1,400,000 1,428,000
10.875% Sr. Unsec. Nts., Series B, 6/15/09 400,000 394,000
- --------------------------------------------------------------------------------
Warner Music Group,
7.375% Sr. Sub. Bonds, 4/15/14 800,000 748,000
- --------------------------------------------------------------------------------
WMG Holdings Corp.,
0%/9.50% Sr. Disc. Nts., 12/15/14 5 2,365,000 1,809,225
- --------------------------------------------------------------------------------
XM Satellite Radio Holdings, Inc.,
9.75% Sr. Unsec. Nts., 5/1/14 1,500,000 1,477,500
-------------
72,613,962
- --------------------------------------------------------------------------------
MULTILINE RETAIL--0.8%
Bon-Ton Stores, Inc. (The),
10.25% Sr. Unsec. Unsub. Nts., 3/15/14 1,800,000 1,831,500
- --------------------------------------------------------------------------------
Neiman Marcus Group, Inc. (The):
9% Sr. Unsec. Nts., 10/15/15 1,345,000 1,445,875
10.375% Sr. Unsec. Sub. Nts., 10/15/15 625,000 690,625
-------------
3,968,000
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.9%
Boise Cascade LLC,
7.125% Sr. Unsec. Sub. Nts., 10/15/14 550,000 525,250
- --------------------------------------------------------------------------------
Claire's Stores, Inc.,
10.50% Sr. Sub. Nts., 6/1/17 1 2,195,000 2,013,913
- --------------------------------------------------------------------------------
Gamestop Corp.,
8% Sr. Unsec. Nts., 10/1/12 900,000 945,000
- --------------------------------------------------------------------------------
Linens 'N Things, Inc.,
10.981% Sr. Sec. Nts., 1/15/14 6 1,335,000 996,244
- --------------------------------------------------------------------------------
Rent-A-Center, Inc.,
7.50% Sr. Unsec. Sub. Nts.,
Series B, 5/1/10 350,000 357,000
-------------
4,837,407
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.0%
Invista, Inc., 9.25% Sr. Nts., 5/1/12 1 1,075,000 1,142,188
- --------------------------------------------------------------------------------
Levi Strauss & Co.,
9.75% Sr. Unsec. Unsub. Nts., 1/15/15 2,270,000 2,440,250
- --------------------------------------------------------------------------------
Oxford Industries, Inc.,
8.875% Sr. Nts., 6/1/11 2 500,000 518,750
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS Continued
Quiksilver, Inc.,
6.875% Sr. Unsec. Nts., 4/15/15 $ 975,000 $ 921,375
-------------
5,022,563
- --------------------------------------------------------------------------------
CONSUMER STAPLES--5.8%
- --------------------------------------------------------------------------------
BEVERAGES--0.4%
Constellation Brands, Inc.:
7.25% Sr. Nts., 5/15/17 1 604,000 591,920
7.25% Sr. Nts., 9/1/16 825,000 808,500
8.125% Sr. Sub. Nts., 1/15/12 500,000 511,250
-------------
1,911,670
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.6%
Albertson's, Inc.,
8% Sr. Unsec. Debs., 5/1/31 2,530,000 2,598,535
- --------------------------------------------------------------------------------
Delhaize America, Inc.,
9% Unsub. Debs., 4/15/31 4,040,000 4,901,122
- --------------------------------------------------------------------------------
Real Time Data Co.,
11% Disc. Nts., 5/31/09 2,3,4,7 476,601 --
- --------------------------------------------------------------------------------
Rite Aid Corp.,
8.125% Sr. Sec. Nts., 5/1/10 900,000 914,625
-------------
8,414,282
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.5%
Del Monte Corp.:
6.75% Sr. Unsec. Sub. Nts., 2/15/15 350,000 335,125
8.625% Sr. Sub. Nts., 12/15/12 1,000,000 1,037,500
- --------------------------------------------------------------------------------
Dole Food Co., Inc.:
7.25% Sr. Unsec. Nts., 6/15/10 420,000 407,400
8.625% Sr. Nts., 5/1/09 687,000 688,718
8.875% Sr. Unsec. Nts., 3/15/11 146,000 144,540
- --------------------------------------------------------------------------------
Hines Nurseries, Inc.,
10.25% Sr. Unsec. Sub. Nts., 10/1/11 1,200,000 942,000
- --------------------------------------------------------------------------------
Pinnacle Foods Finance LLC/Pinnacle
Foods Finance Corp., 10.625%
Sr. Sub. Nts., 4/1/17 1 2,475,000 2,394,563
- --------------------------------------------------------------------------------
Smithfield Foods, Inc.:
7.625% Sr. Unsec. Sub. Nts., 2/15/08 925,000 931,938
8% Sr. Nts., Series B, 10/15/09 900,000 931,500
-------------
7,813,284
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.6%
Church & Dwight Co., Inc.,
6% Sr. Unsec. Sub. Nts., 12/15/12 900,000 867,375
- --------------------------------------------------------------------------------
Nutro Products, Inc.,
10.75% Sr. Sub. Nts., 4/15/14 1 460,000 536,839
- --------------------------------------------------------------------------------
Spectrum Brands, Inc.,
7.375% Sr. Unsec. Sub. Nts., 2/1/15 1,900,000 1,536,625
-------------
2,940,839
9 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--1.2%
Elizabeth Arden, Inc.,
7.75% Sr. Unsec. Sub. Nts., 1/15/14 $ 1,150,000 $ 1,164,375
- --------------------------------------------------------------------------------
Playtex Products, Inc.:
8% Sr. Sec. Nts., 3/1/11 1,000,000 1,035,000
9.375% Sr. Unsec. Sub. Nts., 6/1/11 1,295,000 1,337,088
- --------------------------------------------------------------------------------
Sally Holdings LLC:
9.25% Sr. Nts., 11/15/14 1 1,630,000 1,642,225
10.50% Sr. Sub. Nts., 11/15/16 1 1,002,000 1,012,020
-------------
6,190,708
- --------------------------------------------------------------------------------
TOBACCO--0.5%
Reynolds American, Inc.,
7.25% Sr. Sec. Nts., 6/1/13 2,265,000 2,362,384
- --------------------------------------------------------------------------------
ENERGY--7.6%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.7%
Basic Energy Services, Inc.,
7.125% Sr. Unsec. Nts., 4/15/16 455,000 436,800
- --------------------------------------------------------------------------------
Hanover Compressor Co.,
8.625% Sr. Unsec. Sub. Nts., 12/15/10 700,000 725,375
- --------------------------------------------------------------------------------
Hanover Equipment Trust,
8.50% Sr. Sec. Nts., Series A, 9/1/08 221,000 221,000
- --------------------------------------------------------------------------------
PHI, Inc., 7.125% Sr. Unsec. Nts., 4/15/13 545,000 523,200
- --------------------------------------------------------------------------------
RathGibson, Inc.,
11.25% Sr. Unsec. Nts., 2/15/14 2 660,000 696,300
- --------------------------------------------------------------------------------
Universal Compression, Inc.,
7.25% Sr. Unsec. Sub. Nts., 5/15/10 800,000 805,000
-------------
3,407,675
- --------------------------------------------------------------------------------
OIL & GAS--6.9%
Arch Western Finance LLC,
6.75% Sr. Nts., 7/1/13 900,000 868,500
- --------------------------------------------------------------------------------
Atlas Pipeline Partners LP,
8.125% Sr. Unsec. Nts., 12/15/15 450,000 451,125
- --------------------------------------------------------------------------------
Berry Petroleum Co.,
8.25% Sr. Sub. Nts., 11/1/16 260,000 263,250
- --------------------------------------------------------------------------------
Chesapeake Energy Corp.:
6.375% Sr. Unsec. Nts., 6/15/15 1,150,000 1,102,563
6.875% Sr. Unsec. Nts., 1/15/16 1,920,000 1,886,400
7.50% Sr. Nts., 6/15/14 700,000 712,250
- --------------------------------------------------------------------------------
Compton Petroleum Finance Corp.,
7.625% Sr. Nts., 12/1/13 1,400,000 1,389,500
- --------------------------------------------------------------------------------
Copano Energy LLC,
8.125% Sr. Unsec. Nts., 3/1/16 425,000 433,500
- --------------------------------------------------------------------------------
Forest Oil Corp., 7.75% Sr. Nts., 5/1/14 1,000,000 1,015,000
- --------------------------------------------------------------------------------
Foundation PA Coal Co.,
7.25% Sr. Unsec. Nts., 8/1/14 850,000 846,813
- --------------------------------------------------------------------------------
Frontier Oil Corp.,
6.625% Sr. Unsec. Nts., 10/1/11 450,000 441,000
- --------------------------------------------------------------------------------
Inergy LP/Inergy Finance Corp.,
8.25% Sr. Unsec. Nts., 3/1/16 1,165,000 1,202,863
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
Kinder Morgan Energy Partners LP,
7.30% Sr. Unsec. Nts., 8/15/33 $ 4,612,000 $ 4,830,503
- --------------------------------------------------------------------------------
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 1,600,000 1,552,000
- --------------------------------------------------------------------------------
Pacific Energy Partners LP/Pacific
Energy Finance Corp.,
6.25% Sr. Unsec. Nts., 9/15/15 195,000 191,857
- --------------------------------------------------------------------------------
Peabody Energy Corp.,
6.875% Sr. Unsec. Nts., Series B, 3/15/13 2,035,000 2,035,000
- --------------------------------------------------------------------------------
Pogo Producing Co.:
6.875% Sr. Unsec. Sub. Nts., 10/1/17 200,000 199,500
7.875% Sr. Unsec. Sub. Nts., 5/1/13 440,000 451,000
- --------------------------------------------------------------------------------
Premcor Refining Group, Inc.,
9.50% Sr. Nts., 2/1/13 1,000,000 1,064,913
- --------------------------------------------------------------------------------
Quicksilver Resources, Inc.,
7.125% Sr. Sub. Nts., 4/1/16 1,515,000 1,469,550
- --------------------------------------------------------------------------------
Range Resources Corp.:
6.375% Sr. Sub. Nts., 3/15/15 745,000 709,613
7.375% Sr. Sub. Nts., 7/15/13 400,000 406,000
7.50% Sr. Sub. Nts., 5/15/16 1,760,000 1,790,800
- --------------------------------------------------------------------------------
Sabine Pass LNG LP:
7.25% Sr. Sec. Nts., 11/30/13 1 1,300,000 1,293,500
7.50% Sr. Sec. Nts., 11/30/16 1 2,600,000 2,593,500
- --------------------------------------------------------------------------------
Stone Energy Corp.:
6.75% Sr. Unsec. Sub. Nts., 12/15/14 860,000 795,500
8.25% Sr. Unsec. Sub. Nts., 12/15/11 1,300,000 1,306,500
- --------------------------------------------------------------------------------
Targa Resources, Inc.,
8.50% Sr. Nts., 11/1/13 1 950,000 969,000
- --------------------------------------------------------------------------------
Teekay Shipping Corp.,
8.875% Sr. Nts., 7/15/11 375,000 399,375
- --------------------------------------------------------------------------------
Tesoro Corp.:
6.25% Sr. Unsec. Nts., 11/1/12 515,000 513,713
6.625% Sr. Unsec. Nts., 11/1/15 515,000 512,425
- --------------------------------------------------------------------------------
Whiting Petroleum Corp.:
7.25% Sr. Sub. Nts., 5/1/12 800,000 764,000
7.25% Sr. Unsec. Sub. Nts., 5/1/13 350,000 334,250
- --------------------------------------------------------------------------------
Williams Holdings of Delaware, Inc.,
6.50% Nts., 12/1/08 2 300,000 302,250
-------------
35,493,513
- --------------------------------------------------------------------------------
FINANCIALS--3.0%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.9%
Berry Plastics Holding Corp.:
8.875% Sr. Sec. Nts., 9/15/14 1,180,000 1,200,650
9.235% Sr. Sec. Nts., 9/15/14 6 275,000 279,125
10.25% Sr. Unsec. Sub. Nts., 3/1/16 1,475,000 1,475,000
- --------------------------------------------------------------------------------
E*TRADE Financial Corp.:
7.375% Sr. Unsec. Nts., 9/15/13 691,000 704,820
8% Sr. Nts., 6/15/11 825,000 849,750
-------------
4,509,345
10 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--0.1%
Bank Plus Corp., 12% Sr. Nts., 7/18/07 2 $ 517,000 $ 520,231
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.7%
Ace Cash Express, Inc.,
10.25% Sr. Nts., 10/1/14 2 785,000 806,588
- --------------------------------------------------------------------------------
SLM Corp., 4.50% Nts., Series A, 7/26/10 3,335,000 3,085,732
-------------
3,892,320
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.5%
AAC Group Holding Corp.,
0%/10.25% Sr. Unsec. Disc. Nts., 10/1/12 5 200,000 181,000
- --------------------------------------------------------------------------------
JSG Funding plc,
7.75% Sr. Unsec. Sub. Nts., 4/1/15 865,000 870,406
- --------------------------------------------------------------------------------
Nell AF Sarl, 8.375% Sr. Nts., 8/15/15 1 920,000 885,500
- --------------------------------------------------------------------------------
Universal City Florida:
8.375% Sr. Unsec. Nts., 5/1/10 270,000 277,425
10.106% Sr. Unsec. Nts., 5/1/10 6 270,000 276,750
-------------
2,491,081
- --------------------------------------------------------------------------------
REAL ESTATE--0.8%
Felcor Lodging LP, 8.50% Sr. Nts., 6/1/11 6 837,000 884,081
- --------------------------------------------------------------------------------
Host Hotels & Resorts LP,
6.875% Sr. Unsub. Nts., 11/1/14 260,000 258,375
- --------------------------------------------------------------------------------
Host Marriott LP:
6.375% Sr. Nts., Series O, 3/15/15 2,025,000 1,954,125
6.75% Sr. Nts., Series Q, 6/1/16 500,000 492,500
- --------------------------------------------------------------------------------
Ventas Realty LP/Ventas Capital Corp.,
6.75% Sr. Nts., 4/1/17 550,000 545,875
-------------
4,134,956
- --------------------------------------------------------------------------------
HEALTH CARE--3.8%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--0.1%
Angiotech Pharmaceuticals, Inc.,
7.75% Sr. Sub. Nts., 4/1/14 455,000 431,113
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--3.5%
Community Health Systems, Inc.,
6.50% Sr. Unsec. Sub. Nts., 12/15/12 900,000 939,347
- --------------------------------------------------------------------------------
DaVita, Inc.:
6.625% Sr. Unsec. Nts., 3/15/13 890,000 873,313
7.25% Sr. Unsec. Sub. Nts., 3/15/15 1,910,000 1,895,675
- --------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust II,
7.875% Nts., 2/1/08 1,600,000 1,612,000
- --------------------------------------------------------------------------------
Genesis HealthCare Corp.,
8% Sr. Sub. Nts., 10/15/13 400,000 426,960
- --------------------------------------------------------------------------------
HCA, Inc., 6.375% Nts., 1/15/15 3,698,000 3,152,545
- --------------------------------------------------------------------------------
HealthSouth Corp.,
10.75% Sr. Unsec. Nts., 6/15/16 505,000 550,450
- --------------------------------------------------------------------------------
Omnicare, Inc.:
6.75% Sr. Sub. Nts., 12/15/13 185,000 177,600
6.875% Sr. Sub. Nts., 12/15/15 285,000 272,175
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
Psychiatric Solutions, Inc.,
7.75% Sr. Unsec. Sub. Nts., 7/15/15 $ 485,000 $ 481,969
- --------------------------------------------------------------------------------
Select Medical Corp.,
7.625% Sr. Unsec. Sub. Nts., 2/1/15 1,450,000 1,305,000
- --------------------------------------------------------------------------------
Tenet Healthcare Corp.:
6.375% Sr. Nts., 12/1/11 974,000 894,863
7.375% Nts., 2/1/13 77,000 69,974
9.875% Sr. Nts., 7/1/14 1,950,000 1,940,250
- --------------------------------------------------------------------------------
Triad Hospitals, Inc.,
7% Sr. Sub. Nts., 11/15/13 20,000 21,074
- --------------------------------------------------------------------------------
US Oncology, Inc.:
9% Sr. Unsec. Nts., 8/15/12 650,000 672,750
10.75% Sr. Unsec. Sub. Nts., 8/15/14 650,000 698,750
- --------------------------------------------------------------------------------
Vanguard Health Holding Co. I LLC,
0%/11.25% Sr. Disc. Nts., 10/1/15 5 2,777,000 2,277,140
-------------
18,261,835
- --------------------------------------------------------------------------------
PHARMACEUTICALS--0.2%
Valeant Pharmaceuticals
International, Inc.,
7% Sr. Nts., 12/15/11 2 800,000 784,000
- --------------------------------------------------------------------------------
INDUSTRIALS--7.2%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.2%
Alliant Techsystems, Inc.,
6.75% Sr. Sub. Nts., 4/1/16 910,000 887,250
- --------------------------------------------------------------------------------
Bombardier, Inc., 8% Sr. Nts., 11/15/14 1 455,000 473,200
- --------------------------------------------------------------------------------
DRS Technologies, Inc.:
6.625% Sr. Nts., 2/1/16 735,000 712,950
6.875% Sr. Unsec. Sub. Nts., 11/1/13 300,000 292,500
7.625% Sr. Sub. Nts., 2/1/18 320,000 324,800
- --------------------------------------------------------------------------------
L-3 Communications Corp.:
5.875% Sr. Sub. Nts., 1/15/15 684,000 637,830
6.125% Sr. Unsec. Sub. Nts., 1/15/14 1,100,000 1,042,250
6.375% Sr. Unsec. Sub. Nts.,
Series B, 10/15/15 1,280,000 1,216,000
7.625% Sr. Sub. Nts., 6/15/12 500,000 514,375
-------------
6,101,155
- --------------------------------------------------------------------------------
AIRLINES--0.0%
ATA Holdings Corp.,
13% Sr. Unsec. Nts., 2/1/09 2,3,4 1,575,000 --
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--0.6%
Dayton Superior Corp.,
13% Sr. Unsec. Sub. Nts., 6/15/09 2 100,000 102,250
- --------------------------------------------------------------------------------
Goodman Global Holding Co., Inc.,
7.875% Sr. Unsec. Sub. Nts., 12/15/12 2,225,000 2,213,875
- --------------------------------------------------------------------------------
Nortek, Inc.,
8.50% Sr. Unsec. Unsub. Nts., 9/1/14 600,000 574,500
-------------
2,890,625
11 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.4%
Allied Waste North America, Inc.:
7.375% Sr. Sec. Nts., Series B, 4/15/14 $ 2,850,000 $ 2,828,625
9.25% Sr. Sec. Debs., Series B, 9/1/12 283,000 297,504
- --------------------------------------------------------------------------------
American Pad & Paper Co.,
13% Sr. Sub. Nts., Series B, 11/15/05 2,3,4 200,000 --
- --------------------------------------------------------------------------------
ARAMARK Corp., 8.50% Sr. Nts., 2/1/15 1 730,000 746,425
- --------------------------------------------------------------------------------
Cenveo Corp.,
7.875% Sr. Sub. Nts., 12/1/13 1,100,000 1,083,500
- --------------------------------------------------------------------------------
Corrections Corp. of America:
6.25% Sr. Unsec. Sub. Nts., 3/15/13 890,000 858,850
7.50% Sr. Nts., 5/1/11 500,000 509,375
- --------------------------------------------------------------------------------
FTI Consulting, Inc.,
7.75% Sr. Unsec. Nts., 10/1/16 640,000 656,000
-------------
6,980,279
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.0%
Great Lakes Dredge & Dock Co.,
7.75% Sr. Unsec. Sub. Nts., 12/15/13 2 250,000 247,500
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.2%
Belden & Blake Corp.,
8.75% Sec. Nts., 7/15/12 650,000 669,500
- --------------------------------------------------------------------------------
UCAR Finance, Inc.,
10.25% Sr. Nts., 2/15/12 2 230,000 242,075
-------------
911,575
- --------------------------------------------------------------------------------
MACHINERY--1.6%
Case New Holland, Inc.:
7.125% Sr. Unsec. Nts., 3/1/14 730,000 742,775
9.25% Sr. Nts., 8/1/11 800,000 842,560
- --------------------------------------------------------------------------------
Douglas Dynamics LLC,
7.75% Sr. Nts., 1/15/12 2 600,000 573,000
- --------------------------------------------------------------------------------
Greenbrier Cos., Inc.,
8.375% Sr. Unsec. Nts., 5/15/15 740,000 749,250
- --------------------------------------------------------------------------------
Manitowoc Co., Inc. (The):
7.125% Sr. Nts., 11/1/13 150,000 151,125
10.50% Sr. Sub. Nts., 8/1/12 2 520,000 548,600
- --------------------------------------------------------------------------------
Milacron Escrow Corp.,
11.50% Sr. Sec. Nts., 5/15/11 2 1,700,000 1,653,250
- --------------------------------------------------------------------------------
TriMas Corp.,
9.875% Sr. Unsec. Sub. Nts., 6/15/12 1,774,000 1,831,655
- --------------------------------------------------------------------------------
Trinity Industries, Inc.,
6.50% Sr. Nts., 3/15/14 1,000,000 982,500
-------------
8,074,715
- --------------------------------------------------------------------------------
ROAD & RAIL--0.9%
Avis Budget Car Rental LLC:
7.625% Sr. Unsec. Unsub. Nts., 5/15/14 800,000 812,000
7.75% Sr. Unsec. Unsub. Nts., 5/15/16 455,000 466,375
7.86% Sr. Unsec. Unsub. Nts., 5/15/14 6 180,000 183,600
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ROAD & RAIL Continued
Hertz Corp.:
8.875% Sr. Unsec. Nts., 1/1/14 $ 90,000 $ 94,275
10.50% Sr. Unsec. Sub. Nts., 1/1/16 1,570,000 1,742,700
- --------------------------------------------------------------------------------
Kansas City Southern Railway Co. (The),
7.50% Sr. Nts., 6/15/09 500,000 498,750
- --------------------------------------------------------------------------------
Stena AB:
7% Sr. Unsec. Nts., 12/1/16 150,000 150,750
7.50% Sr. Unsec. Nts., 11/1/13 928,000 941,920
-------------
4,890,370
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--1.2%
Ashtead Capital, Inc., 9% Nts., 8/15/16 1 440,000 463,100
- --------------------------------------------------------------------------------
H&E Equipment Services, Inc.,
8.375% Sr. Unsec. Nts., 7/15/16 480,000 506,400
- --------------------------------------------------------------------------------
Interline Brands, Inc.,
8.125% Sr. Sub. Nts., 6/15/14 575,000 582,188
- --------------------------------------------------------------------------------
United Rentals, Inc.,
7% Sr. Sub. Nts., 2/15/14 8 5,000,000 4,900,000
-------------
6,451,688
- --------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.1%
Horizon Lines LLC, 9% Nts., 11/1/12 473,000 502,563
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--2.0%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.5%
NXP BV/NXP Funding LLC,
9.50% Sr. Unsec. Unsub. Nts., 10/15/15 2,357,000 2,333,430
- --------------------------------------------------------------------------------
Orion Network Systems, Inc.,
12.50% Sr. Unsub. Disc. Nts., 1/15/07 3,4 1,150,000 12
-------------
2,333,442
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.1%
RBS Global & Rexnord Corp.:
9.50% Sr. Nts., 8/1/14 1 75,000 77,250
11.75% Sr. Sub. Nts., 8/1/16 1 265,000 286,200
-------------
363,450
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.0%
Exodus Communications, Inc.,
10.75% Sr. Nts., 12/15/09 2,3,4 [EUR] 846,550 --
- --------------------------------------------------------------------------------
NorthPoint Communications Group, Inc.,
12.875% Nts., 2/15/10 2,3,4 240,208 --
- --------------------------------------------------------------------------------
PSINet, Inc.,
10.50% Sr. Unsec. Nts., 12/1/06 2,3,4 [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 1,267,538
12 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
IT SERVICES Continued
iPayment Holdings, Inc.,
9.75% Sr. Unsec. Sub. Nts., 5/15/14 $ 750,000 $ 753,750
- --------------------------------------------------------------------------------
Iron Mountain, Inc.:
7.75% Sr. Sub. Nts., 1/15/15 200,000 196,000
8.625% Sr. Unsec. Sub. Nts., 4/1/13 1,000,000 1,007,500
- --------------------------------------------------------------------------------
SunGard Data Systems, Inc.:
9.125% Sr. Unsec. Nts., 8/15/13 700,000 720,125
10.25% Sr. Unsec. Sub. Nts., 8/15/15 2,325,000 2,470,313
-------------
6,415,226
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.2%
Freescale Semiconductor, Inc.,
10.125% Sr. Sub. Nts., 12/15/16 1 1,087,000 1,027,215
- --------------------------------------------------------------------------------
MATERIALS--6.5%
- --------------------------------------------------------------------------------
CHEMICALS--1.4%
Equistar Chemicals
LP/Equistar Funding Corp.:
8.75% Sr. Unsec. Nts., 2/15/09 400,000 416,000
10.125% Sr. Unsec. Nts., 9/1/08 45,217 47,252
10.625% Sr. Unsec. Nts., 5/1/11 799,000 844,943
- --------------------------------------------------------------------------------
Huntsman International LLC:
7.375% Sr. Unsub. Nts., 1/15/15 420,000 443,100
7.875% Sr. Unsec. Sub. Nts., 11/15/14 260,000 279,825
- --------------------------------------------------------------------------------
Huntsman LLC:
11.50% Sr. Unsec. Nts., 7/15/12 6 332,000 370,180
11.625% Sr. Unsec. Nts., 10/15/10 37,000 39,868
- --------------------------------------------------------------------------------
Ineos Group Holdings plc,
8.50% Nts., 2/15/16 1 590,000 579,675
- --------------------------------------------------------------------------------
KI Holdings, Inc., 0%/9.875%
Sr. Unsec. Sub. Disc. Nts., 11/15/14 5 750,000 645,000
- --------------------------------------------------------------------------------
Lyondell Chemical Co.:
8% Sr. Unsec. Nts., 9/15/14 1,375,000 1,419,688
8.25% Sr. Unsec. Nts., 9/15/16 735,000 771,750
10.50% Sr. Sec. Nts., 6/1/13 800,000 868,000
- --------------------------------------------------------------------------------
Rockwood Specialties Group, Inc.,
7.50% Sr. Sub. Nts., 11/15/14 200,000 202,000
- --------------------------------------------------------------------------------
Tronox Worldwide LLC/Tronox
Finance Corp.,
9.50% Sr. Unsec. Nts., 12/1/12 195,000 204,263
-------------
7,131,544
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.4%
NTK Holdings, Inc.,
0%/10.75% Sr. Disc. Nts., 3/1/14 5 2,420,000 1,766,600
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--2.9%
Ball Corp., 6.625% Sr. Nts., 3/15/18 910,000 875,875
- --------------------------------------------------------------------------------
Crown Americas, Inc., 7.75%
Sr. Nts., 11/15/15 760,000 767,600
- --------------------------------------------------------------------------------
Graham Packaging Co., Inc.,
9.875% Sr. Unsec. Sub. Nts., 10/15/14 3,500,000 3,556,875
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING Continued
Graphic Packaging International Corp.:
8.50% Sr. Nts., 8/15/11 $ 1,000,000 $ 1,027,500
9.50% Sr. Sub. Nts., 8/15/13 950,000 991,563
- --------------------------------------------------------------------------------
Jefferson Smurfit Corp.,
8.25% Sr. Unsec. Nts., 10/1/12 1,850,000 1,845,375
- --------------------------------------------------------------------------------
MDP Acquisitions plc,
9.625% Sr. Nts., 10/1/12 74,000 77,885
- --------------------------------------------------------------------------------
Owens-Brockway Glass Container, Inc.:
7.75% Sr. Sec. Nts., 5/15/11 500,000 515,625
8.25% Sr. Unsec. Nts., 5/15/13 1,657,000 1,723,280
8.75% Sr. Sec. Nts., 11/15/12 1,350,000 1,414,125
8.875% Sr. Sec. Nts., 2/15/09 264,000 269,940
- --------------------------------------------------------------------------------
Pliant Corp.,
11.85% Sr. Sec. Nts., 6/15/09 4,7 641,295 692,599
- --------------------------------------------------------------------------------
Solo Cup Co.,
8.50% Sr. Sub. Nts., 2/15/14 1,100,000 968,000
- --------------------------------------------------------------------------------
Stone Container Corp.,
8.375% Sr. Nts., 7/1/12 220,000 221,375
-------------
14,947,617
- --------------------------------------------------------------------------------
METALS & MINING--1.2%
AK Steel Corp.,
7.75% Sr. Unsec. Nts., 6/15/12 1,107,000 1,112,535
- --------------------------------------------------------------------------------
Century Aluminum Co.,
7.50% Sr. Unsec. Nts., 8/15/14 1,000,000 1,013,750
- --------------------------------------------------------------------------------
Ispat Inland ULC,
9.75% Sr. Sec. Nts., 4/1/14 1,364,000 1,512,362
- --------------------------------------------------------------------------------
Koppers Industry, Inc.,
9.875% Sr. Sec. Nts., 10/15/13 2 614,000 658,515
- --------------------------------------------------------------------------------
Novelis, Inc.,
7.25% Sr. Unsec. Nts., 2/15/15 6 1,935,000 1,995,469
-------------
6,292,631
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.6%
Domtar, Inc., 7.125% Nts., 8/15/15 800,000 779,000
- --------------------------------------------------------------------------------
Mercer International, Inc.,
9.25% Sr. Nts., 2/15/13 440,000 431,750
- --------------------------------------------------------------------------------
Norske Skog Canada Ltd.,
7.375% Sr. Unsec. Nts., 3/1/14 1,000,000 903,750
- --------------------------------------------------------------------------------
Verso Paper Holdings
LLC/Verson Paper, Inc.:
9.106% Sr. Sec. Nts., 8/1/14 1,6 530,000 543,250
11.375% Sr. Sub. Nts., 8/1/16 1 530,000 568,425
-------------
3,226,175
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--10.0%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--5.0%
Citizens Communications Co.,
6.25% Sr. Nts., 1/15/13 1 4,250,000 4,095,938
- --------------------------------------------------------------------------------
Intelsat Bermuda Ltd.,
11.25% Sr. Unsec. Nts., 6/15/16 430,000 483,750
13 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- -------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES Continued
Intelsat Subsidiary Holding Co. Ltd.:
8.25% Sr. Nts., 1/15/13 6 $ 1,300,000 $ 1,326,000
8.625% Sr. Nts., 1/15/15 625,000 643,750
- --------------------------------------------------------------------------------
Nordic Telephone Co. Holdings ApS,
8.875% Sr. Nts., 5/1/16 1 455,000 484,575
- --------------------------------------------------------------------------------
NTL Cable plc, 9.125% Sr. Nts., 8/15/16 395,000 415,738
- --------------------------------------------------------------------------------
PanAmSat Corp.:
9% Sr. Unsec. Nts., 6/15/16 495,000 520,988
9% Sr. Unsec. Nts., 8/15/14 1,300,000 1,361,750
- --------------------------------------------------------------------------------
Qwest Capital Funding, Inc.,
7.90% Unsec. Nts., 8/15/10 757,000 774,033
- --------------------------------------------------------------------------------
Qwest Corp.:
7.50% Sr. Unsec. Nts., 10/1/14 555,000 571,650
8.875% Unsec. Unsub. Nts., 3/15/12 5,730,000 6,202,725
- --------------------------------------------------------------------------------
Teligent, Inc., 11.50% Sr. Nts., 12/1/07 2,3,4 400,000 --
- --------------------------------------------------------------------------------
Time Warner Telecom Holdings, Inc.,
9.25% Sr. Unsec. Unsub. Nts., 2/15/14 2,650,000 2,822,250
- --------------------------------------------------------------------------------
Valor Telecommunications
Enterprises LLC, 7.75% Sr. Unsec.
Sub. Nts., 2/15/15 445,000 468,424
- --------------------------------------------------------------------------------
West Corp.:
9.50% Sr. Unsec. Nts., 10/15/14 1,040,000 1,071,200
11% Sr. Unsec. Sub. Nts., 10/15/16 935,000 981,750
- --------------------------------------------------------------------------------
Windstream Corp.:
8.125% Sr. Unsec. Unsub. Nts., 8/1/13 8 655,000 687,750
8.625% Sr. Unsec. Unsub. Nts., 8/1/16 2,555,000 2,714,688
- --------------------------------------------------------------------------------
Winstar Communications, Inc.,
12.75% Sr. Nts., 4/15/10 2,3,4 1,000,000 --
-------------
25,626,959
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--5.0%
Alamosa Delaware, Inc.,
11% Sr. Unsec. Nts., 7/31/10 57,000 60,391
- --------------------------------------------------------------------------------
American Cellular Corp.,
10% Sr. Nts., Series B, 8/1/11 348,000 366,270
- --------------------------------------------------------------------------------
American Tower Corp.:
7.125% Sr. Unsec. Nts., 10/15/12 500,000 513,750
7.50% Sr. Nts., 5/1/12 1,450,000 1,497,125
- --------------------------------------------------------------------------------
CellNet Data Systems, Inc.,
Sr. Unsec. Disc. Nts., 10/1/07 2,3,4 1,834,000 --
- --------------------------------------------------------------------------------
Centennial Cellular Operating Co.
LLC/Centennial Communications
Corp., 10.125% Sr. Nts., 6/15/13 2,200,000 2,370,500
- --------------------------------------------------------------------------------
Centennial Communications
Corp., 10% Sr. Unsec. Nts., 1/1/13 300,000 323,250
- --------------------------------------------------------------------------------
Cricket Communications, Inc.,
9.375% Sr. Unsec. Nts., 11/1/14 1,170,000 1,213,875
- --------------------------------------------------------------------------------
Dobson Cellular Systems, Inc.,
8.375% Sr. Sec. Nts., 11/1/11 470,000 493,500
- --------------------------------------------------------------------------------
Dobson Communications Corp.:
8.875% Sr. Nts., 10/1/13 769,000 807,450
9.606% Sr. Unsec. Nts., 10/15/12 6 290,000 297,250
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES Continued
Nextel Communications, Inc.,
7.375% Sr. Nts., Series D, 8/1/15 $15,015,000 $ 15,021,562
- --------------------------------------------------------------------------------
Rogers Wireless, Inc.:
6.375% Sec. Nts., 3/1/14 700,000 708,425
7.50% Sec. Nts., 3/15/15 900,000 965,504
8% Sr. Sub. Nts., 12/15/12 600,000 639,130
- --------------------------------------------------------------------------------
Rural Cellular Corp.,
9.875% Sr. Nts., 2/1/10 600,000 630,000
-------------
25,907,982
- --------------------------------------------------------------------------------
UTILITIES--5.1%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.1%
Edison Mission Energy:
7% Sr. Nts., 5/15/17 1 2,991,000 2,833,973
7.50% Sr. Unsec. Nts., 6/15/13 445,000 442,775
7.75% Sr. Unsec. Nts., 6/15/16 525,000 525,000
- --------------------------------------------------------------------------------
Reliant Energy, Inc.,
6.75% Sr. Sec. Nts., 12/15/14 600,000 615,000
- --------------------------------------------------------------------------------
Sierra Pacific Resources,
6.75% Sr. Unsec. Nts., 8/15/17 1,081,000 1,068,093
-------------
5,484,841
- --------------------------------------------------------------------------------
ENERGY TRADERS--3.7%
AES Corp. (The):
7.75% Sr. Unsec. Unsub. Nts., 3/1/14 200,000 201,500
8.75% Sr. Sec. Nts., 5/15/13 1 1,550,000 1,643,000
- --------------------------------------------------------------------------------
AES Red Oak LLC:
8.54% Sr. Sec. Bonds, Series A, 11/30/19 566,062 619,838
9.20% Sr. Sec. Bonds, Series B, 11/30/29 500,000 592,500
- --------------------------------------------------------------------------------
Dynegy Holdings, Inc.:
6.875% Sr. Unsec. Unsub. Nts., 4/1/11 1,501,000 1,482,238
8.75% Sr. Nts., 2/15/12 1,042,000 1,078,470
- --------------------------------------------------------------------------------
Mirant Americas Generation LLC:
8.30% Sr. Unsec. Nts., 5/1/11 4,400,000 4,565,000
9.125% Sr. Unsec. Nts., 5/1/31 1,200,000 1,320,000
- --------------------------------------------------------------------------------
Mirant Mid-Atlantic LLC,
8.625% Sec. Pass-Through
Certificates, Series A, 6/30/12 1,129,345 1,186,518
- --------------------------------------------------------------------------------
NRG Energy, Inc.:
7.375% Sr. Nts., 1/15/17 2,300,000 2,314,375
7.375% Sr. Nts., 2/1/16 4,140,000 4,160,700
-------------
19,164,139
- --------------------------------------------------------------------------------
GAS UTILITIES--0.1%
SEMCO Energy, Inc.,
7.125% Sr. Nts., 5/15/08 400,000 403,578
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.2%
CMS Energy Corp.:
7.50% Sr. Nts., 1/15/09 357,000 367,874
7.75% Sr. Nts., 8/1/10 400,000 417,955
14 | OPPENHEIMER HIGH INCOME FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER Continued
NorthWestern Corp.,
5.875% Sr. Sec. Nts., 11/1/14 $ 580,000 $ 563,674
-------------
1,349,503
-------------
Total Corporate Bonds and Notes
(Cost $404,183,982) 401,738,282
SHARES
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.7%
- --------------------------------------------------------------------------------
AmeriKing, Inc., 13% Cum. Sr.
Exchangeable, Non-Vtg. 2,3,7 13,764 --
- --------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc., 11.75% Cum.
Exchangeable, Series B, Non-Vtg. 2,3 8,000 --
- --------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25%
Exchangeable, Non-Vtg. 2,3,7 342 --
- --------------------------------------------------------------------------------
ION Media Networks, Inc.:
14.25% Cum., Non-Vtg. 3,7 229 2,060,569
9.75% Cv., Series AI 2,3,7 1 1,080
- --------------------------------------------------------------------------------
Sovereign Real Estate Investment Trust,
12% Non-Cum., Series A 2 10,000 1,432,500
-------------
Total Preferred Stocks (Cost $3,974,576) 3,494,149
- --------------------------------------------------------------------------------
COMMON STOCKS--4.3%
- --------------------------------------------------------------------------------
Adelphia Recovery Trust 2,3 3,858,003 385,800
- --------------------------------------------------------------------------------
AT&T, Inc. 131,390 5,452,685
- --------------------------------------------------------------------------------
Cebridge Connections Holding LLC 2,3 18,668 --
- --------------------------------------------------------------------------------
Constellation Energy Group, Inc. 60,541 5,277,359
- --------------------------------------------------------------------------------
DaimlerChrysler AG 9 30,102 2,767,879
- --------------------------------------------------------------------------------
Global Aero Logistics, Inc. 2,3 4,647 72,029
- --------------------------------------------------------------------------------
Gulfstream Holding, Inc. 2,3 56 --
- --------------------------------------------------------------------------------
Public Service Enterprise Group, Inc. 63,212 5,548,749
- --------------------------------------------------------------------------------
Revlon, Inc., Cl. A 3 714,500 978,865
- --------------------------------------------------------------------------------
Telus Corp. 21,153 1,266,276
- --------------------------------------------------------------------------------
Time Warner Cable, Inc., Cl. A 3 13,411 525,309
-------------
Total Common Stocks (Cost $22,278,254) 22,274,951
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
ATA Holdings Corp. Wts., Exp. 2/28/11 3 570 4,473
- --------------------------------------------------------------------------------
DeCrane Aircraft Holdings, Inc. Wts.,
Exp. 9/30/08 2,3 1,750 --
- --------------------------------------------------------------------------------
Long Distance International, Inc. Wts.,
Exp. 4/13/08 2,3 800 --
-------------
Total Rights, Warrants and Certificates
(Cost $4,339) 4,473
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES--0.3%
- --------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., High Yield
Targeted Return Index Securities, Series
2006-1, 7.22%, 5/1/16 2
(Cost $1,715,158) $ 1,700,000 $ 1,717,578
SHARES
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--15.2%
- --------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E, 5.28% 10,11
(Cost $77,888,538) 77,888,538 77,888,538
- --------------------------------------------------------------------------------
Total Investments, at Value
(excluding Investments
Purchased with Cash
Collateral from
Securities Loaned)
(Cost $510,044,847) 507,117,971
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES
LOANED--0.5% 12
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.5%
Undivided interest of 0.21% in joint repurchase
agreement (Principal Amount/Value $1,320,000,000,
with a maturity value of $1,320,596,750) with
Nomura Securities, 5.425%, dated 6/29/07,
to be repurchased at $2,740,520 on 7/2/07,
collateralized by Private Label CMOs,
0%-6.75%, 10/25/21-1/25/47, with a
value of $1,386,000,000
(Cost $2,739,282) $ 2,739,282 2,739,282
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $512,784,129) 99.1% 509,857,253
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.9 4,453,427
---------------------------
NET ASSETS 100.0% $514,310,680
===========================
15 | OPPENHEIMER HIGH INCOME FUND/VA
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS
Principal amount is reported in U.S. Dollars (USD), except for those denoted in
the following currency:
EUR Euro
1. 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 $44,809,832 or 8.71% of the Fund's net
assets as of June 30, 2007.
2. Illiquid security. The aggregate value of illiquid securities as of June 30,
2007 was $13,566,571, which represents 2.64% of the Fund's net assets. See Note
8 of accompanying Notes.
3. Non-income producing security.
4. Issue is in default. See Note 1 of accompanying Notes.
5. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
6. Represents the current interest rate for a variable or increasing rate
security.
7. Interest or dividend is paid-in-kind, when applicable.
8. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures contracts. The aggregate market
value of such securities is $1,505,000. See Note 6 of accompanying Notes.
9. Partial or fully-loaned security. See Note 9 of accompanying Notes.
10. Rate shown is the 7-day yield as of June 30, 2007.
11. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 2007, by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E 29,765,155 153,170,442 105,047,059 77,888,538
VALUE DIVIDEND
SEE NOTE 1 INCOME
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E $ 77,888,538 $ 1,725,304
12. The security/securities have 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.
16 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- ----------------------------------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $434,895,591) $ 431,968,715
Affiliated companies (cost $77,888,538) 77,888,538
--------------
509,857,253
- ----------------------------------------------------------------------------------------------------------------------------
Cash 576,780
- ----------------------------------------------------------------------------------------------------------------------------
Swaps, at value 187,187
- ----------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 8,955,980
Investments sold 5,405,419
Shares of beneficial interest sold 971,721
Futures margins 207,019
Other 12,403
--------------
Total assets 526,173,762
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 2,739,282
- ----------------------------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums paid $536,850) 1,555,725
- ----------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 7,196,854
Shares of beneficial interest redeemed 200,002
Distribution and service plan fees 112,896
Shareholder communications 18,451
Trustees' compensation 9,595
Transfer and shareholder servicing agent fees 1,891
Other 28,386
--------------
Total liabilities 11,863,082
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 514,310,680
==============
- ----------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 62,788
- ----------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 595,453,627
- ----------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 17,984,567
- ----------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (95,142,167)
- ----------------------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of assets and liabilities denominated in foreign
currencies (4,048,135)
--------------
NET ASSETS $ 514,310,680
==============
17 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
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
$335,659,395 and 40,899,889 shares of beneficial interest outstanding) $ 8.21
- ---------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of
$170,977,758 and 20,953,867 shares of beneficial interest outstanding) $ 8.16
- ---------------------------------------------------------------------------------------------------------
Class 3 Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of
$3,058,353 and 372,029 shares of beneficial interest outstanding) $ 8.22
- ---------------------------------------------------------------------------------------------------------
Class 4 Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of
$4,615,174 and 562,335 shares of beneficial interest outstanding) $ 8.21
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER HIGH INCOME FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2007
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------
Interest $ 18,778,788
- ---------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies 145,087
Affiliated companies 1,725,304
- ---------------------------------------------------------------------------------------
Portfolio lending fees 231
-------------
Total investment income 20,649,410
- ---------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------
Management fees 1,923,541
- ---------------------------------------------------------------------------------------
Distribution and service plan fees:
Service shares 220,554
Class 4 shares 925
- ---------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,098
Service shares 5,044
Class 3 shares 19
Class 4 shares 3
- ---------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 16,375
Service shares 8,183
Class 3 shares 14
Class 4 shares 25
- ---------------------------------------------------------------------------------------
Trustees' compensation 8,437
- ---------------------------------------------------------------------------------------
Custodian fees and expenses 1,682
- ---------------------------------------------------------------------------------------
Administration service fees 750
- ---------------------------------------------------------------------------------------
Other 37,919
-------------
Total expenses 2,228,569
Less reduction to custodian expenses (964)
Less waivers and reimbursements of expenses (32,878)
-------------
Net expenses 2,194,727
- ---------------------------------------------------------------------------------------
NET INVESTMENT INCOME 18,454,683
- ---------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ---------------------------------------------------------------------------------------
Net realized gain on:
Investments 4,742,025
Closing and expiration of futures contracts 2,198,598
Foreign currency transactions 100,095
Swap contracts 1,027,643
-------------
Net realized gain 8,068,361
- ---------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (9,083,437)
Translation of assets and liabilities denominated in foreign currencies (28,553)
Futures contracts 744,461
Swap contracts (1,899,509)
-------------
Net change in unrealized depreciation (10,267,038)
- ---------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 16,256,006
=============
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, 2007 DECEMBER 31,
(UNAUDITED) 2006
- ----------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------
Net investment income $ 18,454,683 $ 36,670,389
- ----------------------------------------------------------------------------------------------------------
Net realized gain 8,068,361 2,937,133
- ----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (10,267,038) 7,687,971
------------------------------
Net increase in net assets resulting from operations 16,256,006 47,295,493
- ----------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (24,967,707) (28,179,781)
Service shares (11,831,305) (11,514,103)
Class 3 shares -- --
Class 4 shares -- --
------------------------------
(36,799,012) (39,693,884)
- ----------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial
interest transactions:
Non-Service shares (11,979,475) (28,076,230)
Service shares 4,331,363 14,875,665
Class 3 shares 3,092,142 --
Class 4 shares 4,666,100 --
------------------------------
110,130 (13,200,565)
- ----------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------
Total decrease (20,432,876) (5,598,956)
- ----------------------------------------------------------------------------------------------------------
Beginning of period 534,743,556 540,342,512
------------------------------
End of period (including accumulated net investment income of $17,984,567
and $36,328,896, respectively) $ 514,310,680 $ 534,743,556
==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER HIGH INCOME FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.55 $ 8.44 $ 8.80 $ 8.61 $ 7.51 $ 8.54
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .29 1 .58 1 .57 1 .58 1 .60 .58
Net realized and unrealized gain (loss) (.02) .17 (.37) .15 1.09 (.76)
---------------------------------------------------------------------------
Total from investment operations .27 .75 .20 .73 1.69 (.18)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.61) (.64) (.56) (.54) (.59) (.85)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.21 $ 8.55 $ 8.44 $ 8.80 $ 8.61 $ 7.51
===========================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.17% 9.42% 2.31% 8.97% 23.96% (2.40)%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $335,660 $361,445 $384,726 $479,405 $480,112 $345,670
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $356,838 $365,154 $444,477 $460,877 $396,858 $335,894
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 7.03% 7.05% 6.79% 6.91% 8.31% 8.29%
Total expenses 0.75% 4 0.74% 4 0.75% 0.75% 0.76% 0.77%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 0.74% 0.74% 0.75% 0.75% 0.76% 0.77%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 57% 64% 51% 48% 75%
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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.76%
Year Ended December 31, 2006 0.74
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 | OPPENHEIMER HIGH INCOME FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.50 $ 8.39 $ 8.76 $ 8.58 $ 7.49 $ 8.54
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .28 1 .56 1 .55 1 .56 1 .61 .88
Net realized and unrealized gain (loss) (.03) .17 (.38) .15 1.06 (1.08)
---------------------------------------------------------------------------
Total from investment operations .25 .73 .17 .71 1.67 (.20)
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.59) (.62) (.54) (.53) (.58) (.85)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.16 $ 8.50 $ 8.39 $ 8.76 $ 8.58 $ 7.49
===========================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 2.94% 9.23% 2.01% 8.73% 23.79% (2.67)%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $170,978 $173,299 $155,617 $134,013 $ 76,354 $ 17,705
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $177,893 $160,703 $141,287 $101,464 $ 41,246 $ 5,602
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 6.78% 6.80% 6.54% 6.63% 7.84% 8.91%
Total expenses 1.01% 4 1.00% 4 1.00% 1.01% 1.04% 1.02%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 1.00% 1.00% 1.00% 1.01% 1.04% 1.02%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 57% 64% 51% 48% 75%
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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 1.02%
Year Ended December 31, 2006 1.00
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER HIGH INCOME FUND/VA
CLASS 3 SHARES CLASS 4 SHARES
PERIOD ENDED PERIOD ENDED
JUNE 30, 2007 1 JUNE 30 2007 1,
(UNAUDITED) (UNAUDITED)
- ----------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.26 $ 8.26
- ----------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .09 2 .09 2
Net realized and unrealized loss (.13) (.14)
-------------------------------
Total from investment operations (.04) (.05)
- ----------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- --
- ----------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.22 $ 8.21
===============================
- ----------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (0.49)% (0.61)%
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $3,058 $4,615
- ----------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,377 $2,288
- ----------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 6.98% 6.72%
Total expenses 0.76% 5 0.99% 6
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 0.75% 0.98%
- ----------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 22%
1. For the period from May 1, 2007 (inception of offering) to June 30, 2007.
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 less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Period Ended June 30, 2007 0.77%
6. Total expenses including indirect expenses from affiliated fund were as
follows:
Period Ended June 30, 2007 1.00%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer High Income Fund/VA (the Fund) is a separate series of Oppenheimer
Variable Account Funds, 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 by investing mainly in a
diversified portfolio of high-yield, lower-grade, fixed-income securities that
the Fund's investment manager, OppenheimerFunds, Inc. (the Manager), believes
does not involve undue risk.
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(R) 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. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. 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
24 | OPPENHEIMER HIGH INCOME FUND/VA
and losses in the accompanying Statement of Operations. The Fund records a
realized gain or loss when a structured note is sold or matures.
- --------------------------------------------------------------------------------
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, 2007, securities with an aggregate
market value of $1,939,967, representing 0.38% 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.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INVESTMENTS WITH OFF BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities.
25 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
As of June 30, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $93,895,256 expiring by 2015.
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, 2007, it is estimated that the Fund will utilize
$8,068,361 of capital loss carryforward to offset realized capital gains. During
the fiscal year ended December 31, 2006, the Fund utilized $2,201,464 of capital
loss carryforward to offset capital gains realized in that fiscal year.
As of December 31, 2006, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
EXPIRING
------------------------
2007 $ 2,974,885
2008 11,572,833
2009 22,696,701
2010 56,061,391
2011 8,529,303
2012 128,504
------------
Total $101,963,617
============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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 compensation deferral 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.
26 | OPPENHEIMER HIGH INCOME FUND/VA
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, 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.
- --------------------------------------------------------------------------------
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, 2007 1 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 3,243,319 $ 27,173,296 5,280,216 $ 43,432,010
Dividends and/or distributions reinvested 3,059,768 24,967,707 3,544,627 28,179,781
Redeemed (7,659,791) (64,120,478) (12,151,871) (99,688,021)
-------------------------------------------------------------------
Net decrease (1,356,704) $ (11,979,475) (3,327,028) $ (28,076,230)
===================================================================
- -----------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 2,384,544 $ 19,823,636 5,002,490 $ 40,899,612
Dividends and/or distributions reinvested 1,457,057 11,831,305 1,455,639 11,514,103
Redeemed (3,279,536) (27,323,578) (4,611,753) (37,538,050)
-------------------------------------------------------------------
Net increase 562,065 $ 4,331,363 1,846,376 $ 14,875,665
===================================================================
- -----------------------------------------------------------------------------------------------------------------
CLASS 3 SHARES
Sold 385,569 $ 3,204,253 -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed (13,540) (112,111) 2 -- --
-------------------------------------------------------------------
Net increase 372,029 $ 3,092,142 -- $ --
===================================================================
27 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED JUNE 30, 2007 1 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------------------------------------------------------------------
CLASS 4 SHARES
Sold 562,335 $ 4,666,100 -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed -- -- -- --
-------------------------------------------------------------
Net increase 562,335 $ 4,666,100 -- $ --
=============================================================
1. For the six months ended June 30, 2007, for Non-Service and Service shares,
and for the period from May 1, 2007 (inception of offering) to June 30, 2007,
for Class 3 and Class 4 shares.
2. Net of redemption fees of $133 for Class 3.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
June 30, 2007, were as follows:
PURCHASES SALES
--------------------------------------------------------------
Investment securities $ 98,118,862 $ 152,823,952
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
------------------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Next $200 million 0.60
Over $1 billion 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, 2007, the Fund paid
$10,000 to OFS for services to the Fund.
Additionally, funds offered in variable annuity separate accounts are
subject to minimum fees of $10,000 per class, for class level assets of $10
million or more. Each class is subject to the minimum fee in the event that the
per account fee does not equal or exceed the applicable minimum fee.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE SHARES AND CLASS 4 SHARES. The Fund
has adopted a Distribution and Service Plan (the "Plan") for Service shares 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 shares 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 shares 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 shares and Class
4 shares. The impact of the Service Plan is to increase operating expenses of
the Service shares 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.
28 | OPPENHEIMER HIGH INCOME FUND/VA
- --------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. This undertaking may be amended or
withdrawn at any time.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended June 30, 2007, the Manager waived $32,878 for
IMMF management fees.
- --------------------------------------------------------------------------------
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, 2007, 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 at 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.
29 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS Continued
As of June 30, 2007, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS JUNE 30, 2007 (DEPRECIATION)
- -----------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Standard & Poor's 500 Index 9/20/07 26 $ 9,850,100 $ (46,859)
U.S. Treasury Nts., 2 yr. 9/28/07 180 36,680,625 27,396
U.S. Treasury Nts., 10 yr. 9/19/07 444 46,932,188 831,054
---------------
811,591
---------------
CONTRACTS TO SELL
U.S. Treasury Long Bonds 9/19/07 15 1,616,250 9,920
U.S. Treasury Nts., 5 yr. 9/28/07 135 14,050,547 (37,382)
---------------
(27,462)
---------------
$ 784,129
===============
- --------------------------------------------------------------------------------
7. CREDIT DEFAULT SWAP CONTRACTS
A credit default swap is a bilateral contract that enables an investor to buy or
sell protection against a defined-issuer credit event. The Fund may enter into
credit default swaps to hedge an existing position or to obtain exposure to a
security or market by purchasing or selling credit protection. The Fund may
enter into credit default swaps on a single security, or a basket of securities.
In a credit default swap contract, the purchaser of the contract will pay
a periodic interest fee, similar to an insurance premium, on the notional amount
of the swap contract to the counterparty (the seller of the contract). If there
is a credit event (for example, bankruptcy or a failure to timely pay interest
or principal), the purchaser will exercise the contract and will receive a
payment from the seller of the contract equal to the notional value of the
credit default swap contract less the value of the underlying security.
The periodic interest fees are accrued daily as a component of unrealized
appreciation (depreciation) and are recorded as realized gain (loss) upon
payment. In the event that the credit default swap is exercised due to a credit
event, the difference between the value of the underlying security and the
notional amount is recorded as realized gain (loss) and is included on the
Statement of Operations.
Credit default swaps are marked to market daily using primarily quotations
from counterparties and brokers. The value of the contracts is separately
disclosed on the Statement of Assets and Liabilities. The unrealized
appreciation (depreciation) related to the change in the valuation of the
notional amount of the swap is combined with the accrued interest due to (owed
by) the Fund at termination or settlement. The net change in this amount during
the period is included on the Statement of Operations.
Risks of credit default swaps include, but are not limited to, the cost of
paying for credit protection if there are no credit events, pricing transparency
when assessing the cost of a credit default swap, counterparty risk, adverse
pricing when purchasing bonds to satisfy its delivery obligation, and the need
to fund the delivery obligation (either cash or defaulted securities depending
on whether the Fund is the purchaser or seller of the credit default swap
contract, respectively).
30 | OPPENHEIMER HIGH INCOME FUND/VA
Information regarding such credit default swaps as of June 30, 2007 is as
follows:
BUY/SELL NOTIONAL PREMIUM
CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES (RECEIVED) VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc:
Beazer Homes USA, Inc. Sell $ 890 4.700% 9/20/08 $ -- $ --
Constellation Brands, Inc. Sell 925 1.010 6/20/11 -- (7,125)
Constellation Brands, Inc. Sell 720 1.030 6/20/11 -- (5,074)
Dow Jones CDX North
America Crossover Index Sell 910 1.650 12/20/11 15,275 (318)
Mosaic Co. (The) Sell 450 1.500 9/20/12 -- 959
Residential Capital LLC Sell 1,801 1.220 3/20/08 -- (2,794)
Residential Capital LLC Sell 901 1.200 3/20/08 -- (1,531)
Residential Capital LLC Sell 1,328 1.750 3/20/08 -- 3,137
Smithfield Foods, Inc. Sell 910 1.500 3/20/12 -- (13,632)
- ---------------------------------------------------------------------------------------------------------------------------------
Citibank NA, New York:
Allied Waste North
America, Inc. Sell 980 1.880 3/20/12 -- (31,721)
El Paso Corp. Sell 928 0.720 6/20/11 -- (10,278)
El Paso Corp. Sell 795 0.820 6/20/11 -- (6,265)
El Paso Corp. Sell 830 0.780 6/20/11 -- (7,524)
Ford Motor Credit Co. Sell 1,700 2.320 3/20/12 -- (33,404)
Reliant Energy, Inc. Sell 465 2.450 9/20/11 -- (1,637)
Reliant Energy, Inc. Sell 1,070 2.600 9/20/11 -- 1,920
Univision Communications,
Inc. Sell 442 1.100 6/20/08 -- 953
Williams Cos., Inc. Sell 400 1.110 3/20/12 -- 5,033
- ---------------------------------------------------------------------------------------------------------------------------------
Credit Suisse International:
Constellation Brands, Inc. Sell 515 1.020 6/20/11 -- (4,807)
Constellation Brands, Inc. Sell 456 1.000 6/20/11 -- (4,560)
Dean Foods Co. Sell 455 1.020 6/20/11 -- (6,139)
Dean Foods Co. Sell 465 1.000 6/20/11 -- (6,620)
Dow Jones CDX North
America Crossover Index Sell 3,655 1.650 12/20/11 57,490 4,243
Dow Jones CDX North
America Crossover Index Sell 1,370 3.250 12/20/11 50,804 18,237
Dow Jones CDX North
America Crossover Index Sell 1,370 1.650 12/20/11 23,361 1,593
El Paso Corp. Sell 460 0.740 6/20/11 -- (4,566)
El Paso Corp. Sell 465 0.770 6/20/11 -- (4,144)
Ford Motor Credit Co. Sell 4,100 2.385 3/20/12 -- (55,498)
Ford Motor Credit Co. Sell 875 2.550 3/20/12 -- (6,570)
Freescale Semiconductor, Inc. Sell 455 3.200 9/20/11 -- (6,370)
Freescale Semiconductor, Inc. Sell 455 3.600 9/20/11 -- (182)
Freescale Semiconductor, Inc. Sell 270 3.500 9/20/11 -- (1,026)
GMAC LLC Sell 1,810 1.390 3/20/17 -- (90,350)
Inco Ltd. Buy 445 0.580 3/20/17 -- (3,261)
NXP BV/NXP Funding LLC Sell 455 4.000 9/20/12 -- (2,249)
NXP BV/NXP Funding LLC Sell 270 4.400 9/20/12 -- 2,970
NXP BV/NXP Funding LLC Sell 270 4.080 9/20/12 -- (480)
Residential Capital LLC Sell 885 1.300 3/20/08 -- (221)
Smithfield Foods, Inc. Sell 900 1.490 3/20/12 -- (9,876)
TXU Corp. Sell 925 1.530 6/20/11 -- (35,113)
TXU Corp. Sell 410 1.610 6/20/11 -- (14,571)
Vale Overseas Ltd. Sell 445 1.030 3/20/17 -- 4,870
Williams Cos., Inc. Sell 3,000 1.150 3/20/12 -- 41,860
- ---------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Dow Jones CDX North
America Crossover Index Sell 7,305 1.650 12/20/11 116,434 535
Dow Jones CDX North
America Crossover Index Sell 3,645 1.650 12/20/11 57,452 275
Dow Jones CDX North
America Crossover Index Sell 1,375 1.650 12/20/11 23,737 101
31 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. CREDIT DEFAULT SWAP CONTRACTS Continued
BUY/SELL NOTIONAL PREMIUM
CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES (RECEIVED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Continued
Dow Jones CDX North
America High Yield Index Sell $ 3,835 3.250% 12/20/11 $ 142,214 $ 53,230
Ford Motor Co. Buy 1,865 3.650 12/20/08 -- (30,437)
Ford Motor Co. Buy 2,200 3.050 12/20/08 -- (17,105)
Ford Motor Co. Sell 2,335 6.000 12/20/16 -- (3,596)
Ford Motor Co. Sell 3,440 5.850 12/20/16 -- (31,236)
Ford Motor Co. Sell 2,750 5.800 12/20/16 -- (31,882)
Ford Motor Credit Co. Sell 2,805 2.390 3/20/12 -- (39,586)
Ford Motor Credit Co. Sell 1,360 2.340 3/20/12 -- (21,728)
General Motors Corp. Buy 933 2.550 12/20/08 -- (2,498)
General Motors Corp. Sell 1,865 4.750 12/20/16 -- (1,718)
General Motors Corp. Sell 2,200 4.680 12/20/16 -- (10,253)
GMAC LLC Sell 1,820 1.370 3/20/17 -- (99,395)
Inco Ltd. Buy 910 0.420 3/20/17 -- 3,392
Inco Ltd. Buy 840 0.630 3/20/17 -- (10,080)
Vale Overseas Ltd. Sell 910 1.000 3/20/17 -- 7,701
Vale Oversees Ltd. Sell 840 1.050 3/20/17 -- 10,521
Williams Cos., Inc. Sell 990 1.020 3/20/12 -- 9,673
- -----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets LP:
General Motors Corp. Buy 1,865 2.700 12/20/08 -- (12,400)
General Motors Corp. Sell 1,865 4.950 12/20/16 -- 14,761
- -----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
International:
Beazer Homes USA, Inc. Sell 920 2.500 6/20/08 -- (16,539)
Beazer Homes USA, Inc. Sell 810 2.650 9/20/08 -- (17,374)
Beazer Homes USA, Inc. Sell 890 4.800 9/20/08 -- --
Freescale Semiconductor, Inc. Sell 910 3.600 9/20/11 -- 904
Freescale Semiconductor, Inc. Sell 440 3.750 9/20/11 -- --
Freescale Semiconductor, Inc. Sell 270 3.700 9/20/11 -- --
GMAC LLC Sell 910 1.390 3/20/17 -- (52,163)
GMAC LLC Sell 1,095 1.390 3/20/17 -- (62,767)
GMAC LLC Sell 1,030 1.370 3/20/17 -- (60,240)
GMAC LLC Sell 2,290 1.390 3/20/17 -- (131,267)
K. Hovnanian
Enterprises, Inc. Sell 1,097 2.000 6/20/08 -- (11,257)
K. Hovnanian
Enterprises, Inc. Sell 1,775 2.000 6/20/08 -- (18,215)
K. Hovnanian
Enterprises, Inc. Sell 1,775 1.800 6/20/08 -- (21,627)
Residential Capital LLC Sell 900 1.180 3/20/08 -- (1,752)
Residential Capital LLC Sell 879 1.360 3/20/08 -- (545)
Standard-Pacific Corp. Sell 3,410 2.200 6/20/08 -- (29,971)
- -----------------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank
NA, NY Branch:
Dean Foods Co. Sell 930 1.030 6/20/11 -- (16,816)
Dean Foods Co. Sell 930 1.060 6/20/11 -- (15,838)
Dean Foods Co. Sell 460 1.050 6/20/11 -- (7,809)
Dean Foods Co. Sell 1,200 1.080 6/20/11 -- (19,202)
Ford Motor Co. Buy 1,865 3.600 12/20/08 -- (31,607)
Ford Motor Co. Sell 2,335 6.000 12/20/16 -- (330)
General Motors Corp. Buy 2,760 2.350 12/20/08 -- (9,412)
General Motors Corp. Sell 2,760 4.750 12/20/16 -- 1,879
Inco Ltd. Buy 460 0.520 3/20/17 -- 377
Mosaic Co. (The) Sell 450 1.350 9/20/12 -- (1,858)
Mosaic Co. (The) Sell 455 1.500 9/20/12 -- 1,086
Rite Aid Corp. Sell 555 1.400 9/20/08 -- 529
32 | OPPENHEIMER HIGH INCOME FUND/VA
BUY/SELL NOTIONAL PREMIUM
CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES (RECEIVED) VALUE
- ---------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Special
Financing, Inc.:
Allied Waste North
America, Inc. Sell $ 840 1.880% 3/20/12 $ -- $ (25,905)
Allied Waste North
America, Inc. Sell 330 1.880 3/20/12 -- (10,177)
Beazer Homes USA, Inc. Sell 1,650 2.650 6/20/08 -- (25,989)
Beazer Homes USA, Inc. Sell 465 2.330 6/20/08 -- (8,741)
Constellation Brands, Inc. Sell 920 1.000 6/20/11 -- (11,692)
Dow Jones CDX North
American High Yield Index Sell 899 3.250 12/20/11 17,406 11,696
Dow Jones CDX North
American High Yield Index Sell 899 3.250 12/20/11 17,406 11,696
El Paso Corp. Sell 1,392 0.730 6/20/11 -- (14,022)
El Paso Corp. Sell 400 0.800 6/20/11 -- (3,152)
Freescale Semiconductor, Inc. Sell 635 3.550 9/20/11 -- (2,041)
GMAC LLC Sell 910 1.400 3/20/17 -- (48,930)
GMAC LLC Sell 975 1.400 3/20/17 -- (52,425)
Mosaic Co. (The) Sell 910 1.200 9/20/12 -- (13,750)
NXP BV/NXP Funding LLC Sell 635 4.150 9/20/12 -- (4,889)
NXP BV/NXP Funding LLC Sell 450 4.450 9/20/12 -- 1,797
Reliant Energy, Inc. Sell 845 2.150 9/20/11 -- (8,780)
Reliant Energy, Inc. Sell 440 2.500 9/20/11 -- 879
Rite Aid Corp. Sell 455 1.350 9/20/08 -- (1,056)
Rite Aid Corp. Sell 1,080 1.350 9/20/08 -- --
Smithfield Foods, Inc. Sell 1,190 1.580 3/20/12 -- (12,137)
Toys R US, Inc. Sell 905 1.850 9/20/08 -- 14
Univision Communications,
Inc. Sell 442 1.100 6/20/08 -- (2,464)
Univision Communications,
Inc. Sell 884 1.150 6/20/08 -- (4,498)
- ---------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch International:
Peabody Energy Corp. Sell 270 1.200 9/20/12 -- 1,071
Reliant Energy, Inc. Sell 420 2.050 9/20/11 -- (4,980)
TXU Corp. Sell 925 1.530 6/20/11 -- (26,075)
TXU Corp. Sell 930 1.580 6/20/11 -- (24,861)
TXU Corp. Sell 925 1.590 6/20/11 -- (24,565)
TXU Corp. Sell 1,150 1.620 6/20/11 -- (29,439)
TXU Corp. Sell 1,310 2.060 6/20/11 -- (13,605)
- ---------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services, Inc.:
Dean Foods Co. Sell 930 0.950 6/20/11 -- (11,014)
Dow Jones CDX North
America Crossover Index Sell 910 1.650 12/20/11 15,271 705
Ford Motor Co. Buy 1,865 3.700 12/20/08 -- (38,178)
Ford Motor Co. Buy 120 2.450 12/20/08 -- (316)
Ford Motor Co. Sell 2,335 6.150 12/20/16 -- 18,295
Ford Motor Co. Sell 150 5.900 12/20/16 -- (772)
General Motors Corp. Buy 120 1.650 12/20/08 -- 690
General Motors Corp. Sell 1,865 4.900 12/20/16 -- 25,518
General Motors Corp. Sell 120 4.620 12/20/16 -- (251)
Inco Ltd. Buy 895 0.520 3/20/17 -- (3,231)
Inco Ltd. Buy 905 0.520 3/20/17 -- (3,267)
Inco Ltd. Buy 880 0.600 3/20/17 -- (8,402)
Smithfield Foods, Inc. Sell 140 1.510 3/20/12 -- (1,703)
Smithfield Foods, Inc. Sell 160 1.770 3/20/12 -- (320)
33 | OPPENHEIMER HIGH INCOME FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. CREDIT DEFAULT SWAP CONTRACTS Continued
BUY/SELL NOTIONAL PREMIUM
CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES (RECEIVED) VALUE
- ----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services, Inc.:
Continued
Vale Overseas Ltd. Sell $ 460 1.060% 3/20/17 $ -- $ 6,274
Vale Overseas Ltd. Sell 895 0.970 3/20/17 -- 6,160
Vale Overseas Ltd. Sell 905 0.920 3/20/17 -- 2,831
Vale Overseas Ltd. Sell 880 1.040 3/20/17 -- 11,133
-------------------------
$ 536,850 $ (1,368,538)
=========================
- --------------------------------------------------------------------------------
8. ILLIQUID SECURITIES
As of June 30, 2007, 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 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, 2007, the Fund had
on loan securities valued at $2,767,879, which are included in the Statement of
Assets and Liabilities as "Investments, at value" and, when applicable, as
"Receivable for Investments sold." Collateral of $2,739,282 was received for the
loans, all of which was received in cash and subsequently invested in approved
investments.
- --------------------------------------------------------------------------------
10. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
34 | OPPENHEIMER HIGH INCOME FUND/VA
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in 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.
35 | 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; 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, 2007.
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
(1/1/07) (6/30/07) JUNE 30, 2007
- --------------------------------------------------------------------------------
Non-Service shares Actual $ 1,000.00 $ 1,128.70 $ 6.56
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,018.65 6.23
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,128.80 7.89
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,017.41 7.48
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,
excluding affiliated fund indirect expenses, based on the 6-month period ended
June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- ----------------------------------------
Non-Service shares 1.24%
- ----------------------------------------
Service shares 1.49
The expense ratios reflect reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager that can be terminated at any time, without
advance notice. The "Financial Highlights" tables in the Fund's financial
statements, included in this report, also show the gross expense ratios, without
such waivers or reimbursements.
- --------------------------------------------------------------------------------
5 | OPPENHEIMER VALUE FUND/VA
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--94.5%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--8.7%
- --------------------------------------------------------------------------------
MEDIA--7.5%
Cinemark Holdings, Inc. 1 400 $ 7,156
- --------------------------------------------------------------------------------
Liberty Global, Inc., Series C 1 9,518 374,057
- --------------------------------------------------------------------------------
News Corp., Inc., Cl. A 6,292 133,453
----------------
514,666
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--1.2%
Office Depot, Inc. 1 2,749 83,295
- --------------------------------------------------------------------------------
CONSUMER STAPLES--9.6%
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--6.0%
Costco Wholesale Corp. 5,839 341,698
- --------------------------------------------------------------------------------
SUPERVALU, Inc. 1,461 67,674
----------------
409,372
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.0%
ConAgra Foods, Inc. 2,620 70,373
- --------------------------------------------------------------------------------
TOBACCO--2.6%
Altria Group, Inc. 2,551 178,927
- --------------------------------------------------------------------------------
ENERGY--10.2%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--1.5%
Halliburton Co. 2,870 99,015
- --------------------------------------------------------------------------------
OIL & GAS--8.7%
Exxon Mobil Corp. 3,796 318,408
- --------------------------------------------------------------------------------
Murphy Oil Corp. 1,130 67,167
- --------------------------------------------------------------------------------
Petroleo Brasileiro SA, ADR 910 110,356
- --------------------------------------------------------------------------------
Total SA, Sponsored ADR 1,247 100,982
----------------
596,913
- --------------------------------------------------------------------------------
FINANCIALS--29.7%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--8.2%
Bear Stearns Cos., Inc. (The) 1,230 172,200
- --------------------------------------------------------------------------------
E*TRADE Financial Corp. 1 2,669 58,958
- --------------------------------------------------------------------------------
UBS AG 5,457 327,475
----------------
558,633
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--7.4%
Wachovia Corp. 6,144 314,880
- --------------------------------------------------------------------------------
Wells Fargo & Co. 5,536 194,701
----------------
509,581
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--6.3%
Bank of America Corp. 2,400 117,336
- --------------------------------------------------------------------------------
Citigroup, Inc. 6,079 311,792
----------------
429,128
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INSURANCE--4.9%
Everest Re Group Ltd. 1,907 $ 207,176
- --------------------------------------------------------------------------------
Genworth Financial, Inc., Cl. A 1,582 54,421
- --------------------------------------------------------------------------------
National Financial Partners Corp. 730 33,806
- --------------------------------------------------------------------------------
Platinum Underwriters Holdings Ltd. 1,139 39,580
----------------
334,983
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--2.9%
Freddie Mac 3,329 202,070
- --------------------------------------------------------------------------------
HEALTH CARE--5.1%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--0.2%
Vanda Pharmaceuticals, Inc. 1 835 16,917
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--2.4%
Medco Health Solutions, Inc. 1 870 67,851
- --------------------------------------------------------------------------------
WellPoint, Inc. 1 1,253 100,027
----------------
167,878
- --------------------------------------------------------------------------------
PHARMACEUTICALS--2.5%
Novartis AG, ADR 2,415 135,409
- --------------------------------------------------------------------------------
Sanofi-Aventis SA, ADR 810 32,619
----------------
168,028
- --------------------------------------------------------------------------------
INDUSTRIALS--15.8%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--10.3%
Alliant Techsystems, Inc. 1 699 69,306
- --------------------------------------------------------------------------------
Boeing Co. 3,524 338,868
- --------------------------------------------------------------------------------
United Technologies Corp. 4,199 297,835
----------------
706,009
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--2.0%
Siemens AG, Sponsored ADR 944 135,049
- --------------------------------------------------------------------------------
MACHINERY--3.5%
Deere & Co. 860 103,836
- --------------------------------------------------------------------------------
Navistar International Corp. 1 2,103 138,798
----------------
242,634
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--5.6%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.1%
Cisco Systems, Inc. 1 2,599 72,382
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.6%
Applied Materials, Inc. 5,440 108,093
- --------------------------------------------------------------------------------
SOFTWARE--2.9%
Microsoft Corp. 2,135 62,918
- --------------------------------------------------------------------------------
Novell, Inc. 1 4,848 37,766
- --------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1 4,980 99,451
----------------
200,135
- --------------------------------------------------------------------------------
MATERIALS--1.5%
- --------------------------------------------------------------------------------
CHEMICALS--1.5%
Lubrizol Corp. (The) 1,597 103,086
6 | OPPENHEIMER VALUE FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--0.9%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.9%
Verizon Communications, Inc. 1,526 $ 62,825
- --------------------------------------------------------------------------------
UTILITIES--7.4%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--6.0%
Exelon Corp. 3,766 273,412
- --------------------------------------------------------------------------------
FirstEnergy Corp. 2,100 135,933
----------------
409,345
- --------------------------------------------------------------------------------
ENERGY TRADERS--0.5%
Dynegy, Inc., Cl. A 1 3,623 34,201
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.9%
CMS Energy Corp. 3,521 60,563
----------------
Total Common Stocks (Cost $5,819,372) 6,474,101
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--6.5%
- --------------------------------------------------------------------------------
Oppenheimer Institutional Money
Market Fund, Cl. E, 5.28% 2,3
(Cost $447,991) 447,991 447,991
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $6,267,363) 101.0% 6,922,092
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (1.0) (66,911)
------------------------------
NET ASSETS 100.0% $ 6,855,181
==============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Rate shown is the 7-day yield as of June 30, 2007.
3. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 2007, by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- --------------------------------------------------------------------------------
Oppenheimer
Institutional
Money Market
Fund, Cl. E 183,179 2,705,375 2,440,563 447,991
VALUE DIVIDEND
SEE NOTE 1 INCOME
- --------------------------------------------------------------------------------
Oppenheimer
Institutional
Money Market
Fund, Cl. E $ 447,991 $ 7,315
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7 | OPPENHEIMER VALUE FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- -----------------------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $5,819,372) $ 6,474,101
Affiliated companies (cost $447,991) 447,991
--------------
6,922,092
- -----------------------------------------------------------------------------------------------------------
Cash 26,540
- -----------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 112,777
Investments sold 86,595
Interest and dividends 8,503
Other 2,709
--------------
Total assets 7,159,216
- -----------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 287,742
Shareholder communications 2,765
Trustees' compensation 2,333
Distribution and service plan fees 1,446
Shares of beneficial interest redeemed 293
Other 9,456
--------------
Total liabilities 304,035
- -----------------------------------------------------------------------------------------------------------
NET ASSETS $ 6,855,181
==============
- -----------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 525
- -----------------------------------------------------------------------------------------------------------
Additional paid-in capital 5,846,508
- -----------------------------------------------------------------------------------------------------------
Accumulated net investment income 13,476
- -----------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 339,943
- -----------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 654,729
--------------
NET ASSETS $ 6,855,181
==============
- -----------------------------------------------------------------------------------------------------------
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 $3,001,385 and 229,559 shares of beneficial interest outstanding) $ 13.07
- -----------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net
assets of $3,853,796 and 295,125 shares of beneficial interest outstanding) $ 13.06
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | OPPENHEIMER VALUE FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2007
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $2,201) $ 40,829
Affiliated companies 7,315
- ----------------------------------------------------------------------------------------
Interest 7
-------------
Total investment income 48,151
- ----------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------
Management fees 16,553
- ----------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 1,998
- ----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Service shares 28
- ----------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 2,178
Service shares 1,001
- ----------------------------------------------------------------------------------------
Legal, auditing and other professional fees 11,023
- ----------------------------------------------------------------------------------------
Trustees' compensation 3,203
- ----------------------------------------------------------------------------------------
Administration service fees 750
- ----------------------------------------------------------------------------------------
Custodian fees and expenses 132
- ----------------------------------------------------------------------------------------
Other 1,576
-------------
Total expenses 38,442
Less reduction to custodian expenses (7)
Less waivers and reimbursements of expenses (8,841)
-------------
Net expenses 29,594
- ----------------------------------------------------------------------------------------
NET INVESTMENT INCOME 18,557
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- ----------------------------------------------------------------------------------------
Net realized gain on investments 259,505
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 229,918
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 507,980
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER VALUE FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006
- -----------------------------------------------------------------------------------------------------------------
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------
Net investment income (loss) $ 18,557 $ (8,861)
- -----------------------------------------------------------------------------------------------------------------
Net realized gain 259,505 359,434
- -----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 229,918 23,864
-----------------------------
Net increase in net assets resulting from operations 507,980 374,437
- -----------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares -- (1,194)
Service shares -- --
-----------------------------
-- (1,194)
- -----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Non-Service shares -- (263,215)
Service shares -- (37,589)
-----------------------------
-- (300,804)
- -----------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Non-Service shares -- --
Service shares 3,235,014 477,488
-----------------------------
3,235,014 477,488
- -----------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------
Total increase 3,742,994 549,927
- -----------------------------------------------------------------------------------------------------------------
Beginning of period 3,112,187 2,562,260
-----------------------------
End of period (including accumulated net investment income (loss) of $13,476 and
$(5,081), respectively) $ 6,855,181 $ 3,112,187
=============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER VALUE FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 1
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.58 $ 11.16 $ 12.26 $ 12.90 $ 10.00
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .06 2 (.03) 2 .02 2 (.01) 2 .03
Net realized and unrealized gain 1.43 1.61 .71 1.82 2.87
------------------------------------------------------------------
Total from investment operations 1.49 1.58 .73 1.81 2.90
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.01) (.02) (.03) --
Distributions from net realized gain -- (1.15) (1.81) (2.42) --
------------------------------------------------------------------
Total dividends and/or distributions to shareholders -- (1.16) (1.83) (2.45) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.07 $ 11.58 $ 11.16 $ 12.26 $ 12.90
==================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 12.87% 14.03% 5.88% 14.50% 29.00%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 3,001 $ 2,657 $ 2,562 $ 2,815 $ 3,871
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 2,841 $ 2,695 $ 2,878 $ 3,370 $ 3,205
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 0.92% (0.29)% 0.15% (0.08)% 0.27%
Total expenses 1.66% 5 2.14% 5 1.78% 1.82% 1.39%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian expenses 1.24% 2.14% 1.78% 1.82% 1.39%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 124% 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 less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 1.67%
Year Ended December 31, 2006 2.14
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER VALUE FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD ENDED
JUNE 30, 2007 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2006 1
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.57 $ 11.89
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 .04 (.05)
Net realized and unrealized gain 1.45 .88
---------------------------
Total from investment operations 1.49 .83
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- --
Distributions from net realized gain -- (1.15)
---------------------------
Total dividends and/or distributions to shareholders -- (1.15)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.06 $ 11.57
===========================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 12.88% 6.81%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 3,854 $ 455
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,630 $ 268
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 0.69% (1.30)%
Total expenses 1.86% 5 2.89% 5
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.49% 2.88%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 124%
1. For the period from September 18, 2006 (inception of offering) to December
31, 2006.
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 less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 1.87%
Year Ended December 31, 2006 2.89
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | 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, 2007,
100% of the Fund's Non-Service shares were owned by 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(R) 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. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. 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
13 | OPPENHEIMER VALUE FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
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, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of zero. 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, 2007, it is estimated that the Fund will utilize $458 of capital loss
carryforward to offset realized capital gains. During the fiscal year ended
December 31, 2006, the Fund did not utilize any capital loss carryforward to
offset capital gains realized in that fiscal year.
As of December 31, 2006, the Fund had available for federal income tax
purposes straddle losses of $458.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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 compensation deferral plan.
14 | OPPENHEIMER VALUE 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.
- --------------------------------------------------------------------------------
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, 2007 YEAR ENDED DECEMBER 31, 2006 1
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold -- $ -- -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed -- -- -- --
------------------------------------------------------------
Net increase (decrease) -- $ -- -- $ --
============================================================
- -------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 266,750 $ 3,368,932 41,097 $ 500,936
Dividends and/or distributions reinvested -- -- 3,229 37,589
Redeemed (10,908) (133,918) (5,043) (61,037)
------------------------------------------------------------
Net increase 255,842 $ 3,235,014 39,283 $ 477,488
============================================================
1. For the year ended December 31, 2006 for Non-Service Shares and for the
period from September 18, 2006 (inception of offering) to December 31, 2006 for
Service Shares.
15 | OPPENHEIMER VALUE 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 and investments in IMMF, for the six months ended
June 30, 2007, were as follows:
PURCHASES SALES
------------------------------------------------------
Investment securities $5,299,259 $2,471,763
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
----------------------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Over $800 million 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, 2007, the Fund paid $28
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. Effective January 1, 2007, the Manager
voluntarily agreed to an expense waiver of any total expenses over 1.25% of
average annual net assets for Non-Service shares and 1.50% of average annual net
assets for Service shares. During the six months ended June 30, 2007, OFS waived
$5,805 and $2,895 for Non-Service and Service shares, respectively. The expense
waiver is a voluntary undertaking and may be terminated by the Manager at any
time.
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.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended June 30, 2007, the Manager waived $141 for
IMMF management fees.
16 | OPPENHEIMER VALUE FUND/VA
- --------------------------------------------------------------------------------
5. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
17 | OPPENHEIMER VALUE FUND/VA
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in 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 VALUE 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, 2007.
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
(1/1/07) (6/30/07) JUNE 30, 2007
- ---------------------------------------------------------------------------
Non-Service shares Actual $1,000.00 $1,010.90 $3.65
- ---------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.17 3.66
- ---------------------------------------------------------------------------
Service shares Actual 1,000.00 1,008.70 4.94
- ---------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,019.89 4.97
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period). Those annualized expense ratios,
excluding affiliated fund indirect expenses, based on the 6-month period ended
June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- ------------------------------------
Non-Service shares 0.73%
- ------------------------------------
Service shares 0.99
The expense ratios reflect reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager that can be terminated at any time, without
advance notice. The "Financial Highlights" tables in the Fund's financial
statements, included in this report, also show the gross expense ratios, without
such waivers or reimbursements.
- --------------------------------------------------------------------------------
5 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--3.6%
- --------------------------------------------------------------------------------
Aesop Funding II LLC, Automobile
Asset-Backed Certificates,
Series 2005-1A,
Cl. A2, 5.38%, 4/20/08 1,2 $ 640,000 $ 640,321
- --------------------------------------------------------------------------------
Argent Securities Trust 2004-W8,
Asset-Backed Pass-Through
Certificates, Series 2004-W8,
Cl. A2, 5.80%, 5/25/34 2 1,476,940 1,482,999
- --------------------------------------------------------------------------------
Citibank Credit Card Issuance Trust,
Credit Card Receivable Nts.,
Series 2003-C4,
Cl. C4, 5%, 6/10/15 310,000 295,973
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust
2005-WF2, Asset-Backed
Pass-Through Certificates,
Series 2005-WF2,
Cl. AF2, 4.922%, 8/25/35 2 551,446 549,090
- --------------------------------------------------------------------------------
CWABS Asset-Backed
Certificates Trust
2002-4, Asset-Backed Certificates,
Series 2002-4,
Cl. A1, 6.06%, 2/25/33 2 35,747 35,373
- --------------------------------------------------------------------------------
CWABS Asset-Backed
Certificates Trust
2005-16, Asset-Backed Certificates,
Series 2005-16,
Cl. 2AF2, 5.382%, 5/25/36 2 670,000 666,744
- --------------------------------------------------------------------------------
CWABS Asset-Backed
Certificates Trust
2005-17, Asset-Backed Certificates,
Series 2005-17,
Cl. 1AF2, 5.363%, 5/25/36 2 440,000 437,913
- --------------------------------------------------------------------------------
Household Home Equity Loan Trust,
Home Equity Loan Pass-Through
Certificates, Series 2005-3,
Cl. A1, 5.58%, 1/20/35 2 762,164 762,799
- --------------------------------------------------------------------------------
Lehman XS Trust, Mtg. Pass-Through
Certificates:
Series 2005-10, Cl. 2A3B,
5.55%, 1/25/36 794,050 789,217
Series 2005-4, Cl. 2A1B,
5.17%, 10/25/35 634,276 632,530
- --------------------------------------------------------------------------------
Litigation Settlement Monetized
Fee Trust, Asset-Backed Certificates,
Series 2001-1A, Cl. A1, 8.33%, 4/25/31 3 2,533,301 2,586,019
- --------------------------------------------------------------------------------
NC Finance Trust, CMO Pass-Through
Certificates, Series 1999-I, Cl. ECFD,
0.274%, 1/25/29 3 3,370,016 707,703
- --------------------------------------------------------------------------------
Popular ABS Mortgage Pass-Through
Trust 2005-2, Mtg. Pass-Through
Certificates, Series 2005-2, Cl. AF2,
4.415%, 4/25/35 2 312,168 311,079
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Popular ABS Mortgage Pass-Through
Trust 2005-6, Mtg. Pass-Through
Certificates, Series 2005-6,
Cl. A3, 5.68%, 1/25/36 2 $ 690,000 $ 688,001
- --------------------------------------------------------------------------------
RAMP Series 2004-RS7 Trust, Mtg.
Asset-Backed Pass-Through
Certificates, Series 2004-RS7,
Cl. AI32, 4.45%, 7/25/28 433,352 431,238
- --------------------------------------------------------------------------------
Structured Asset Securities Corp.,
Mtg. Pass-Through Certificates,
Series 2002-AL1,
Cl. B2, 3.45%, 2/25/32 2,488,536 2,187,899
- --------------------------------------------------------------------------------
Tobacco Settlement Authority,
Asset-Backed Securities,
Series 2001-A, 6.79%, 6/1/10 1,570,000 1,596,062
-----------------
Total Asset-Backed Securities
(Cost $17,247,739) 14,800,960
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--70.5%
- --------------------------------------------------------------------------------
GOVERNMENT AGENCY--61.0%
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--60.8%
Fannie Mae Whole Loan,
CMO Pass-Through Certificates,
Trust 2004-W9, Cl. 2A2, 7%, 2/25/44 561,140 574,251
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
4.50%, 5/1/19 10,264,998 9,778,710
5%, 8/1/33 4,222,843 3,979,683
6%, 7/1/17-10/1/29 8,683,151 8,713,983
6.50%, 4/1/18-4/1/34 1,347,452 1,376,008
7%, 5/1/29-3/1/35 6,370,395 6,571,844
8%, 4/1/16 633,524 667,326
9%, 8/1/22-5/1/25 179,869 192,786
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., CMO Gtd. Multiclass Mtg.
Participation Certificates,
Series 3094, Cl. HS, 4.877%, 6/15/34 2 436,572 400,847
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., CMO Gtd. Real Estate Mtg.
Investment Conduit Multiclass
Pass-Through Certificates:
Series 2006-11, Cl. PS, 5.06%, 3/25/36 2 701,435 649,423
Series 2043, Cl. ZP, 6.50%, 4/15/28 1,165,952 1,158,870
Series 2066, Cl. Z, 6.50%, 6/15/28 2,421,952 2,463,397
Series 2195, Cl. LH, 6.50%, 10/15/29 1,366,762 1,384,880
Series 2326, Cl. ZP, 6.50%, 6/15/31 483,241 491,840
Series 2461, Cl. PZ, 6.50%, 6/15/32 1,331,653 1,364,341
Series 2500, Cl. FD, 5.82%, 3/15/32 2 342,938 347,641
Series 2526, Cl. FE, 5.72%, 6/15/29 2 555,320 560,803
Series 2551, Cl. FD, 5.72%, 1/15/33 2 432,774 437,192
Series 2676, Cl. KY, 5%, 9/15/23 552,000 515,230
Series 3025, Cl. SJ, 5.243%, 8/15/35 2 150,784 140,225
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., CMO Pass-Through
Participation Certificates,
Series 151, Cl. F, 9%, 5/15/21 32,568 32,512
6 | OPPENHEIMER CORE BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal Home Loan Mortgage
Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 176, Cl. IO, 14.611%, 6/1/26 4 $ 613,426 $ 155,221
Series 183, Cl. IO, 12.122%, 4/1/27 4 928,179 247,263
Series 184, Cl. IO, 17.819%, 12/1/26 4 1,017,244 260,900
Series 192, Cl. IO, 15.085%, 2/1/28 4 246,278 61,968
Series 200, Cl. IO, 13.709%, 1/1/29 4 292,990 80,139
Series 2003-118,
Cl. S, 10.134%, 12/25/33 4 3,561,160 421,486
Series 2005-87,
Cl. SE, 6.84%, 10/25/35 4 5,284,882 131,216
Series 2005-87,
Cl. SG, 12.46%, 10/25/35 4 5,310,990 245,202
Series 206, Cl. IO, (5.709)%, 12/1/29 4 595,179 158,407
Series 2130, Cl. SC, (0.81)%, 3/15/29 4 648,363 44,324
Series 216, Cl. IO, 13.611%, 12/1/31 4 383,065 98,732
Series 224, Cl. IO, 10.645%, 3/1/33 4 1,750,205 452,752
Series 243, Cl. 6, 8.611%, 12/15/32 4 725,265 187,313
Series 2796, Cl. SD, 2.879%, 7/15/26 4 1,056,562 73,172
Series 2802, Cl. AS, 4.498%, 4/15/33 4 1,167,622 56,346
Series 2920, Cl. S, (1.217)%, 1/15/35 4 3,824,482 151,153
Series 3000, Cl. SE, (2.435)%, 7/15/25 4 4,542,311 112,186
Series 3110, Cl. SL, 6.09%, 2/15/26 4 623,247 16,155
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., Principal-Only Stripped
Mtg.-Backed Security:
Series 176, Cl. PO, 4.24%, 6/1/26 5 249,919 192,579
Series 192, Cl. PO, 5.708%, 2/1/28 5 246,278 189,661
Series 224, Cl. PO, 4.438%, 3/1/33 5 575,559 421,959
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.:
4.50%, 9/1/18-8/1/20 16,067,057 15,304,454
5%, 12/1/17-3/1/34 43,261,958 41,405,471
5%, 7/1/22 6 2,792,000 2,698,206
5.50%, 1/1/33-1/1/34 13,580,133 13,160,779
5.50%, 7/1/22-8/1/37 6 48,907,000 47,235,317
6%, 5/1/29-11/1/33 10,423,893 10,358,002
6%, 7/1/22-7/1/37 6 17,247,000 17,221,821
6.50%, 3/1/11-11/1/31 11,377,365 11,605,407
7%, 11/1/17-7/1/35 4,270,775 4,417,287
7.50%, 1/1/08-1/1/33 27,601 28,796
8%, 5/1/17 7,243 7,581
8.50%, 7/1/32 47,776 51,368
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
CMO Gtd. Real Estate Mtg.
Investment Conduit Pass-Through
Certificates:
Trust 1989-17, Cl. E, 10.40%, 4/25/19 64,363 68,882
Trust 1993-87, Cl. Z, 6.50%, 6/25/23 1,416,642 1,444,459
Trust 1998-58, Cl. PC, 6.50%, 10/25/28 1,192,801 1,215,963
Trust 1998-61, Cl. PL, 6%, 11/25/28 652,598 651,921
Trust 1999-54, Cl. LH, 6.50%, 11/25/29 902,433 919,519
Trust 2001-70, Cl. LR, 6%, 9/25/30 228,906 229,104
Trust 2001-74, Cl. PD, 6%, 5/25/30 1,820 1,815
Trust 2001-82, Cl. ZA, 6.50%, 1/25/32 612,625 624,547
Trust 2002-9, Cl. PC, 6%, 3/25/17 1,499,540 1,510,980
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.,
CMO Gtd. Real Estate Mtg.
Investment Conduit Pass-Through
Certificates: Continued
Trust 2003-28, Cl. KG, 5.50%, 4/25/23 $ 3,964,000 $ 3,794,381
Trust 2003-84, Cl. PW, 3%, 6/25/22 919,293 906,378
Trust 2004-101, Cl. BG, 5%, 1/25/20 1,908,000 1,840,895
Trust 2005-100, Cl. BQ, 5.50%, 11/25/25 1,120,000 1,066,014
Trust 2006-44, Cl. OA, 5.50%, 12/25/26 3,087,421 3,081,039
Trust 2006-46, Cl. SW, 4.693%, 6/25/36 2 531,139 474,567
Trust 2006-50, Cl. KS, 4.693%, 6/25/36 2 1,172,827 1,013,601
Trust 2006-50, Cl. SA, 4.693%, 6/25/36 2 1,494,003 1,290,529
Trust 2006-50, Cl. SK, 4.693%, 6/25/36 2 476,854 425,603
Trust 2006-57, Cl. PA, 5.50%, 8/25/27 3,630,756 3,622,620
Trust 2006-64, Cl. MD, 5.50%, 7/25/36 4,671,000 4,455,146
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Interest-Only Stripped
Mtg.-Backed Security:
Trust 2001-65, Cl. S, 10.096%, 11/25/31 4 2,029,991 201,137
Trust 2001-81, Cl. S, 4.499%, 1/25/32 4 489,734 46,653
Trust 2002-47, Cl. NS, 3.788%, 4/25/32 4 1,273,757 120,224
Trust 2002-51, Cl. S, 3.909%, 8/25/32 4 1,169,313 111,048
Trust 2002-52, Cl. SD, 0.385%, 9/25/32 4 1,318,259 110,554
Trust 2002-77, Cl. SH, 5.516%, 12/18/32 4 604,310 54,886
Trust 2002-84, Cl. SA, 11.261%, 12/25/32 4 1,758,366 170,781
Trust 2003-33, Cl. SP, 13.322%, 5/25/33 4 1,810,133 193,438
Trust 2003-4, Cl. S, 10.467%, 2/25/33 4 1,163,217 116,987
Trust 2004-54, Cl. DS, (2.276)%, 11/25/30 4 972,904 52,159
Trust 2005-19, Cl. SA, 0.016%, 3/25/35 4 9,725,723 401,604
Trust 2005-40, Cl. SA, (0.14)%, 5/25/35 4 2,172,320 85,829
Trust 2005-6, Cl. SE, 1.727%, 2/25/35 4 2,756,122 111,240
Trust 2005-71, Cl. SA, 2.929%, 8/25/25 4 2,863,241 132,724
Trust 2006-33, Cl. SP, 14.61%, 5/25/36 4 4,067,615 301,117
Trust 222, Cl. 2, 17.213%, 6/1/23 4 2,025,436 504,974
Trust 240, Cl. 2, 19.987%, 9/1/23 4 2,451,853 650,883
Trust 252, Cl. 2, 14.865%, 11/1/23 4 1,577,552 437,357
Trust 273, Cl. 2, 16.275%, 8/1/26 4 460,941 115,351
Trust 303, Cl. IO, (1.508)%, 11/1/29 4 264,752 73,834
Trust 319, Cl. 2, 14.375%, 2/1/32 4 432,806 114,583
Trust 321, Cl. 2, 10.037%, 4/1/32 4 4,765,962 1,259,218
Trust 331, Cl. 9, 8.707%, 2/1/33 4 1,110,142 277,595
Trust 334, Cl. 17, 23.044%, 2/1/33 4 762,774 213,564
Trust 339, Cl. 7, 6.705%, 7/1/33 4 3,814,237 933,295
Trust 342, Cl. 2, 12.244%, 9/1/33 4 1,197,800 313,502
Trust 344, Cl. 2, 9.915%, 12/1/33 4 7,516,238 1,970,881
Trust 345, Cl. 9, 8.846%, 1/1/34 4 1,533,887 379,703
Trust 346, Cl. 2, 13.179%, 12/1/33 4 3,325,789 872,195
Trust 350, Cl. 2, 11.319%, 3/1/34 4 2,486,715 651,895
Trust 362, Cl. 12, 6.752%, 8/1/35 4 2,069,938 478,494
Trust 362, Cl. 13, 6.735%, 8/1/35 4 1,147,584 264,752
- --------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Principal-Only Stripped
Mtg.-Backed Security,
Trust 1993-184, Cl. M, 5.09%, 9/25/23 5 579,894 467,485
-----------------
249,882,320
7 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
GNMA/GUARANTEED--0.2%
Government National
Mortgage Assn.:
7%, 1/15/09-5/15/09 $ 13,596 $ 13,817
8.50%, 8/15/17-12/15/17 268,668 286,156
- --------------------------------------------------------------------------------
Government National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 2001-21,
Cl. SB, (3.096)%, 1/16/27 4 1,044,563 69,975
Series 2002-15,
Cl. SM, (6.147)%, 2/16/32 4 1,260,952 84,462
Series 2004-11,
Cl. SM, (6.242)%, 1/17/30 4 882,835 56,364
Series 2006-47,
Cl. SA, 14.941%, 8/16/36 4 6,456,627 322,804
-----------------
833,578
- --------------------------------------------------------------------------------
NON-AGENCY--9.5%
- --------------------------------------------------------------------------------
COMMERCIAL--7.9%
Asset Securitization Corp.,
Commercial Interest-Only Stripped
Mtg.-Backed Security,
Series 1997-D4,
Cl. PS1, 1.695%, 4/14/29 4 14,558,053 642,335
- --------------------------------------------------------------------------------
Asset Securitization Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1996-MD6,
Cl. A3, 7.546%, 11/13/29 2 1,200,000 1,206,835
- --------------------------------------------------------------------------------
Banc of America Commercial
Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates,
Series 2005-3, Cl. A2, 4.501%, 7/10/43 2,100,000 2,045,355
- --------------------------------------------------------------------------------
Banc of America Funding Corp.,
CMO Pass-Through Certificates,
Series 2004-2, Cl. 2A1, 6.50%, 7/20/32 1,524,664 1,538,091
- --------------------------------------------------------------------------------
Banc of America Mortgage
Securities, Inc., CMO Pass-Through
Certificates, Series 2004-8,
Cl. 5A1, 6.50%, 5/25/32 1,165,132 1,165,314
- --------------------------------------------------------------------------------
Capital Lease Funding
Securitization LP, Interest-Only
Corporate-Backed Pass-Through
Certificates, Series 1997-CTL1,
(5.673)%, 6/22/24 4 12,729,502 380,598
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan
Trust 2006-WF1, Asset-Backed
Pass-Through Certificates,
Series 2006-WF1,
Cl. A2B, 5.536%, 3/1/36 460,000 458,277
- --------------------------------------------------------------------------------
Citigroup/Deutsche Bank
Commercial Mortgage Trust,
Commercial Mtg. Obligations,
Series 2007-CD4,
Cl. A2B, 5.205%, 12/11/49 3 1,510,000 1,483,262
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL Continued
Deutsche Alt-A Securities
Mortgage Loan Trust, Mtg.
Pass-Through Certificates:
Series 2006-AB2,
Cl. A7, 5.961%, 6/25/36 $ 1,246,268 $ 1,243,991
Series 2006-AB3, Cl. A7, 6.36%, 4/25/08 384,516 384,258
- --------------------------------------------------------------------------------
GE Capital Commercial
Mortgage Corp., Commercial
Mtg. Obligations, Series 2005-C3,
Cl. A2, 4.853%, 7/10/45 1,190,000 1,170,764
- --------------------------------------------------------------------------------
Greenwich Capital Commercial
Funding Corp., Commercial
Mtg. Pass-Through Certificates:
Series 2005-GG3,
Cl. A2, 4.305%, 8/10/42 1,460,000 1,423,213
Series 2005-GG5,
Cl. A2, 5.117%, 4/10/37 1,290,000 1,276,481
Series 2007-GG9,
Cl. A2, 5.381%, 3/10/39 3 1,530,000 1,513,311
- --------------------------------------------------------------------------------
JPMorgan Chase Commercial
Mortgage Securities Corp.,
Commercial Mtg. Pass-Through
Certificates:
Series 2005-LDP2,
Cl. A2, 4.575%, 7/15/42 510,000 497,654
Series 2005-LDP4,
Cl. A2, 4.79%, 10/15/42 1,720,000 1,686,546
Series 2007-LDPX,
Cl. A2S, 5.305%, 1/15/49 590,000 580,576
- --------------------------------------------------------------------------------
LB-UBS Commercial Mortgage
Trust, Commercial Mtg.
Pass-Through Certificates:
Series 2005-C5,
Cl. A2, 4.885%, 9/15/30 1,430,000 1,410,111
Series 2007-C1,
Cl. A2, 5.318%, 1/15/12 1,700,000 1,679,197
- --------------------------------------------------------------------------------
Lehman Brothers Commercial
Conduit Mortgage Trust,
Interest-Only Stripped
Mtg.-Backed Security,
Series 1998-C1,
Cl. IO, 5.628%, 2/18/30 4 13,699,526 227,651
- --------------------------------------------------------------------------------
Lehman Structured Securities Corp.,
CMO, Series 2002-GE1,
Cl. A, 2.514%, 7/26/24 3 287,619 222,905
- --------------------------------------------------------------------------------
Mastr Alternative Loan Trust,
CMO Pass-Through Certificates:
Series 2004-9, Cl. A3, 4.70%, 8/25/34 2 514,046 511,985
Series 2004-6, Cl. 10A1, 6%, 7/25/34 1,703,288 1,687,911
- --------------------------------------------------------------------------------
RALI Series 2003-QS1 Trust,
Mtg. Asset-Backed Pass-Through
Certificates, Series 2003-QS1,
Cl. A2, 5.75%, 1/25/33 857,094 854,214
8 | OPPENHEIMER CORE BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL Continued
RALI Series 2007-QS6 Trust, Mtg.
Asset-Backed Pass-Through
Certificates, Series 2007-QS6,
Cl. A114, 5.75%, 4/25/37 $ 1,432,811 $ 1,423,852
- --------------------------------------------------------------------------------
Residential Asset Securitization
Trust 2006-A9CB, CMO
Pass-Through Certificates,
Series 2006-A9CB,
Cl. A5, 6%, 9/25/36 2,178,103 2,173,221
- --------------------------------------------------------------------------------
Salomon Brothers Mortgage
Securities VII, Inc., Interest-Only
Commercial Mtg. Pass-Through
Certificates, Series 1999-C1, Cl. X,
(4.73)%, 5/18/32 4 278,517,425 683,788
- --------------------------------------------------------------------------------
Wachovia Bank Commercial
Mortgage Trust 2005-C17,
Commercial Mtg. Pass-Through
Certificates, Series 2005-C17,
Cl. A2, 4.782%, 3/15/42 2,520,000 2,480,924
- --------------------------------------------------------------------------------
Wachovia Bank Commercial
Mortgage Trust 2006-C29,
Commercial Mtg. Pass-Through
Certificates, Series 2006-C29,
Cl. A2, 5.272%, 11/15/48 355,000 349,731
-----------------
32,402,351
- --------------------------------------------------------------------------------
MULTIFAMILY--0.1%
WAMU Mortgage Pass-Through
Certificates, Series 2005-AR8 Trust,
Series 2005-AR8,
Cl. 2AB1, 5.57%, 7/25/45 2 275,479 275,743
- --------------------------------------------------------------------------------
OTHER--0.0%
Salomon Brothers Mortgage
Securities VI, Inc., Interest-Only
Stripped Mtg.-Backed Security,
Series 1987-3, Cl. B, 74.26%, 10/23/17 4 10,527 1,704
- --------------------------------------------------------------------------------
Salomon Brothers Mortgage
Securities VI, Inc., Principal-Only
Stripped Mtg.-Backed Security,
Series 1987-3, Cl. A, 5.858%, 10/23/17 5 15,581 14,357
-----------------
16,061
- --------------------------------------------------------------------------------
RESIDENTIAL--1.5%
Countrywide Alternative Loan Trust, CMO:
Series 2005-J1, Cl. 3A1, 6.50%, 8/25/32 2,521,710 2,529,984
Series 2005-J3, Cl. 3A1, 6.50%, 9/25/34 2,290,725 2,308,924
- --------------------------------------------------------------------------------
RALI Series 2006-QS5 Trust,
Mtg. Asset-Backed Pass-Through
Certificates, Series 2006-QS5,
Cl. 2A2, 6%, 4/25/08 1,560,688 1,558,141
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
RESIDENTIAL Continued
WAMU Mortgage Pass-Through
Certificates, Series 2005-AR5 Trust,
Series 2005-AR5,
Cl. A1, 4.676%, 5/25/35 2 $ 110,423 $ 110,475
-----------------
6,507,524
-----------------
Total Mortgage-Backed Obligations
(Cost $293,318,727) 289,917,577
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--6.2%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds,
4.50%, 5/15/17-2/15/36 7 6,506,000 6,109,286
- --------------------------------------------------------------------------------
U.S. Treasury Nts.:
3.875%, 2/15/13 7 2,030,000 1,928,660
4.50%, 3/31/09-4/30/12 7 12,885,000 12,658,949
4.75%, 5/31/12 7 2,113,000 2,097,155
4.875%, 5/31/09 7 2,797,000 2,797,003
-----------------
Total U.S. Government Obligations
(Cost $25,920,952) 25,591,053
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--30.0%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--12.3%
- --------------------------------------------------------------------------------
AUTOMOBILES--2.1%
DaimlerChrysler North America
Holding Corp.:
5.71% Nts., Series E, 3/13/09 2 770,000 771,741
7.30% Nts., 1/15/12 7 820,000 870,519
- --------------------------------------------------------------------------------
Ford Motor Credit Co., 9.75%
Sr. Unsec. Nts., 9/15/10 3,860,000 4,033,299
- --------------------------------------------------------------------------------
General Motors Acceptance
Corp., 8% Bonds, 11/1/31 7 1,660,000 1,702,073
- --------------------------------------------------------------------------------
Hyundai Motor Manufacturing
Alabama LLC, 5.30% Sr. Unsec.
Nts., 12/19/08 1 1,115,000 1,106,297
-----------------
8,483,929
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.7%
Caesars Entertainment, Inc., 7.50%
Sr. Unsec. Nts., 9/1/09 3 2,250,000 2,301,768
- --------------------------------------------------------------------------------
Hilton Hotels Corp., 8.25% Sr.
Unsec. Nts., 2/15/11 3 1,475,000 1,559,813
- --------------------------------------------------------------------------------
MGM Mirage, Inc., 6% Sr.
Sec. Nts., 10/1/09 2,415,000 2,405,944
- --------------------------------------------------------------------------------
Royal Caribbean Cruises Ltd.,
7% Sr. Unsec. Unsub. Nts., 10/15/07 3 545,000 549,422
-----------------
6,816,947
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.9%
Centex Corp., 5.80% Sr. Unsec.
Nts., 9/15/09 1,305,000 1,303,828
9 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES Continued
D.R. Horton, Inc.:
5.375% Sr. Unsec. Nts., 6/15/12 $ 1,200,000 $ 1,126,997
6.125% Nts., 1/15/14 1,035,000 993,488
8% Sr. Nts., 2/1/09 615,000 632,508
- --------------------------------------------------------------------------------
Lennar Corp.,
7.625% Sr. Unsec. Nts., 3/1/09 1,930,000 1,987,228
- --------------------------------------------------------------------------------
Pulte Homes, Inc.,
4.875% Nts., 7/15/09 7 825,000 812,101
- --------------------------------------------------------------------------------
Standard Pacific Corp.,
5.125% Sr. Unsec. Unsub. Nts., 4/1/09 865,000 817,425
-----------------
7,673,575
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.1%
Eastman Kodak Co., 3.625%
Nts., Series A, 5/15/08 3 247,000 241,443
- --------------------------------------------------------------------------------
MEDIA--5.7%
Belo Corp.,
8% Sr. Unsec. Unsub. Nts., 11/1/08 2,805,000 2,881,246
- --------------------------------------------------------------------------------
British Sky Broadcasting Group plc,
8.20% Sr. Unsec. Nts., 7/15/09 1,265,000 1,327,313
- --------------------------------------------------------------------------------
Chancellor Media CCU,
8% Sr. Unsec. Nts., 11/1/08 1,540,000 1,580,063
- --------------------------------------------------------------------------------
Clear Channel Communications, Inc.,
6.25% Nts., 3/15/11 1,370,000 1,319,476
- --------------------------------------------------------------------------------
Comcast Corp.,
6.45% Unsec. Nts., 3/15/37 2,555,000 2,470,261
- --------------------------------------------------------------------------------
Cox Enterprises, Inc.,
4.375% Nts., 5/1/08 1 2,015,000 1,995,199
- --------------------------------------------------------------------------------
CSC Holdings, Inc.,
7.25% Sr. Unsec. Nts., 7/15/08 1,535,000 1,550,350
- --------------------------------------------------------------------------------
EchoStar DBS Corp.,
5.75% Sr. Unsec. Nts., 10/1/08 2,445,000 2,445,000
- --------------------------------------------------------------------------------
Liberty Media Corp.,
7.875% Sr. Nts., 7/15/09 480,000 500,303
- --------------------------------------------------------------------------------
Liberty Media LLC,
7.75% Sr. Nts., 7/15/09 1,840,000 1,913,138
- --------------------------------------------------------------------------------
Time Warner Entertainment Co. LP,
8.375% Sr. Nts., 7/15/33 2,085,000 2,426,709
- --------------------------------------------------------------------------------
Tribune Co.,
5.50% Nts., Series E, 10/6/08 1,427,000 1,415,528
- --------------------------------------------------------------------------------
Univision Communications, Inc.:
3.50% Sr. Unsec. Nts., 10/15/07 1,270,000 1,263,650
3.875% Sr. Unsec. Nts., 10/15/08 3 590,000 571,563
-----------------
23,659,799
- --------------------------------------------------------------------------------
MULTILINE RETAIL--0.3%
Dillard's, Inc.,
6.625% Unsec. Nts., 11/15/08 3 515,000 518,863
- --------------------------------------------------------------------------------
May Department Stores Co.,
7.90% Unsec. Debs., 10/15/07 785,000 788,760
-----------------
1,307,623
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.5%
Gap, Inc. (The):
6.90% Nts., 9/15/07 $ 1,620,000 $ 1,629,453
9.80% Unsub. Nts., 12/15/08 2 466,000 494,282
-----------------
2,123,735
- --------------------------------------------------------------------------------
CONSUMER STAPLES--1.7%
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--1.3%
Albertson's, Inc.,
8% Sr. Unsec. Debs., 5/1/31 7,8 1,675,000 1,720,374
- --------------------------------------------------------------------------------
Delhaize America, Inc.,
9% Unsub. Debs., 4/15/31 1,141,000 1,384,203
- --------------------------------------------------------------------------------
Kroger Co. (The),
5.50% Unsec. Unsub. Nts., 2/1/13 7 2,065,000 2,013,451
-----------------
5,118,028
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.4%
Earthgrains Co. (The),
6.50% Nts., 4/15/09 600,000 607,361
- --------------------------------------------------------------------------------
Heinz (H.J.) Co.,
6.428% Bonds, 12/1/08 1 280,000 282,888
- --------------------------------------------------------------------------------
Sara Lee Corp.,
2.75% Unsec. Nts., 6/15/08 845,000 821,951
-----------------
1,712,200
- --------------------------------------------------------------------------------
ENERGY--2.9%
- --------------------------------------------------------------------------------
OIL & GAS--2.9%
Buckeye Partners LP,
4.625% Sr. Nts., 7/15/13 2,255,000 2,110,044
- --------------------------------------------------------------------------------
El Paso Corp.,
6.50% Sr. Unsec. Nts., 6/1/08 390,000 393,697
- --------------------------------------------------------------------------------
Kaneb Pipe Line Operating
Partnership LP:
5.875% Sr. Unsec. Nts., 6/1/13 1,560,000 1,553,645
7.75% Sr. Unsec. Nts., 2/15/12 180,000 193,219
- --------------------------------------------------------------------------------
Kinder Morgan Energy Partners LP,
7.30% Sr. Unsec. Nts., 8/15/33 2,285,000 2,393,256
- --------------------------------------------------------------------------------
PF Export Receivables Master Trust,
3.748% Sr. Nts., Series B, 6/1/13 1 1,132,131 1,054,167
- --------------------------------------------------------------------------------
TEPPCO Partners LP:
6.125% Nts., 2/1/13 900,000 905,927
7.625% Sr. Unsec. Nts., 2/15/12 630,000 673,129
- --------------------------------------------------------------------------------
Valero Logistics Operations LP,
6.05% Nts., 3/15/13 390,000 390,315
- --------------------------------------------------------------------------------
Williams Cos., Inc. (The),
Credit Linked Certificate
Trust, 6.75% Nts., 4/15/09 3 2,330,000 2,364,950
-----------------
12,032,349
- --------------------------------------------------------------------------------
FINANCIALS--6.6%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.7%
Goldman Sachs Capital, Inc. (The),
6.345% Sub. Bonds, 2/15/34 7 3,075,000 2,941,834
10 | OPPENHEIMER CORE BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--3.0%
Barclays Bank plc,
6.278% Perpetual Bonds 9 $ 3,850,000 $ 3,501,267
- --------------------------------------------------------------------------------
HBOS plc, 6.413% Sub. Perpetual
Bonds, Series A 1,9 3,900,000 3,661,733
- --------------------------------------------------------------------------------
HSBC Finance Capital Trust IX,
5.911% Nts., 11/30/35 2 3,000,000 2,909,352
- --------------------------------------------------------------------------------
Popular North America, Inc.,
4.70% Nts., 6/30/09 2,485,000 2,448,721
-----------------
12,521,073
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.4%
SLM Corp., 4% Nts., 1/15/09 1,670,000 1,605,162
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.6%
Capmark Financial Group, Inc.,
5.875% Nts., 5/10/12 1 1,090,000 1,076,835
- --------------------------------------------------------------------------------
CIT Group Funding Co. of Canada,
4.65% Sr. Unsec. Nts., 7/1/10 1,235,000 1,199,668
-----------------
2,276,503
- --------------------------------------------------------------------------------
INSURANCE--1.9%
Marsh & McLennan Cos., Inc.:
5.875% Sr. Unsec. Bonds, 8/1/33 260,000 219,570
7.125% Sr. Unsec. Nts., 6/15/09 1,145,000 1,174,214
- --------------------------------------------------------------------------------
MBIA, Inc., 5.70% Sr. Unsec.
Unsub. Nts., 12/1/34 1,055,000 972,906
- --------------------------------------------------------------------------------
Prudential Holdings LLC,
8.695% Bonds, Series C, 12/18/23 1 2,400,000 2,905,788
- --------------------------------------------------------------------------------
Prudential Insurance Co. of America,
8.30% Nts., 7/1/25 2,035,000 2,479,831
-----------------
7,752,309
- --------------------------------------------------------------------------------
HEALTH CARE--0.2%
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.2%
HCA, Inc., 8.75% Sr. Nts., 9/1/10 7 940,000 983,475
- --------------------------------------------------------------------------------
INDUSTRIALS--0.4%
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.3%
Textron Financial Corp.,
6% Jr. Unsec. Sub. Nts., 2/15/67 1,2,7 1,015,000 957,613
- --------------------------------------------------------------------------------
ROAD & RAIL--0.1%
Ryder System, Inc.,
5.95% Nts., 5/2/11 495,000 496,694
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--1.1%
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.4%
NCR Corp., 7.125% Sr. Unsec.
Unsub. Nts., 6/15/09 1,580,000 1,614,781
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.7%
Xerox Corp.,
9.75% Sr. Unsec. Nts., 1/15/09 7 2,830,000 2,994,714
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.9%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.9%
Qwest Corp.:
5.625% Unsec. Nts., 11/15/08 3 $ 250,000 $ 250,313
7.875% Sr. Unsec. Nts., 9/1/11 1,880,000 1,969,300
- --------------------------------------------------------------------------------
Telecom Italia Capital SpA,
4% Unsec. Unsub. Nts., 1/15/10 1,785,000 1,716,979
-----------------
3,936,592
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.0%
Nextel Communications, Inc.,
7.375% Sr. Nts., Series D, 8/1/15 1,955,000 1,955,854
- --------------------------------------------------------------------------------
Rogers Wireless, Inc.,
9.625% Sr. Sec. Nts., 5/1/11 1,780,000 2,004,645
-----------------
3,960,499
- --------------------------------------------------------------------------------
UTILITIES--2.9%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.9%
Monongahela Power Co.,
7.36% Unsec. Nts., Series A, 1/15/10 1,925,000 2,004,381
- --------------------------------------------------------------------------------
Westar Energy, Inc.,
7.125% Sr. Unsec. Nts., 8/1/09 1,820,000 1,870,529
-----------------
3,874,910
- --------------------------------------------------------------------------------
ENERGY TRADERS--1.1%
IPALCO Enterprises, Inc.,
8.375% Sr. Sec. Nts., 11/14/08 2 1,180,000 1,209,500
- --------------------------------------------------------------------------------
TXU Energy Co. LLC:
5.86% Sr. Nts., 9/16/08 1,2 1,695,000 1,696,144
6.125% Nts., 3/15/08 1,430,000 1,433,308
-----------------
4,338,952
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.9%
CenterPoint Energy, Inc.,
7.25% Sr. Nts., Series B, 9/1/10 1,880,000 1,964,632
- --------------------------------------------------------------------------------
PSEG Funding Trust I,
5.381% Nts., 11/16/07 1,835,000 1,833,528
-----------------
3,798,160
-----------------
Total Corporate Bonds and Notes
(Cost $123,909,622) 123,222,899
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
Pathmark Stores, Inc. Wts.,
Exp. 9/19/10 10
(Cost $14,872) 5,408 277
SHARES
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--4.4%
- --------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E, 5.28% 11,12
(Cost $17,882,412) 17,882,412 17,882,412
11 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
Total Investments, at Value
(excluding Investments
Purchased with Cash
Collateral from
Securities Loaned)
(Cost $478,294,324) $ 471,415,178
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM
SECURITIES LOANED--7.2% 13
- --------------------------------------------------------------------------------
ASSET-BACKED FLOATING NOTE--0.3%
Whitehawk CDO Funding Corp.,
5.41%, 9/17/07 $ 1,500,000 1,500,000
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--6.9%
Undivided interest of 0.38% in joint repurchase agreement
(Principal Amount/Value $3,500,000,000, with a maturity
value of $3,501,573,542) with Bank of America NA,
5.395%, dated 6/29/07, to be repurchased at
$13,220,357 on 7/2/07, collateralized by
U.S. Agency Mortgages, 5%-5.50%,
8/1/33-3/1/35,
with a value of $3,570,000,000 13,214,416 13,214,416
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS Continued
Undivided interest of 3% in joint repurchase agreement
(Principal Amount/Value $500,000,000,with a maturity
value of $500,225,625) with Barclays Capital, 5.415%,
dated 6/29/07, to be repurchased at $15,006,769
on 7/2/07, collateralized by Private Label
CMOs, 0%, 5/27/35-2/25/48,
with a value of $525,000,000 $ 15,000,000 $ 15,000,000
-----------------
28,214,416
-----------------
Total Investments Purchased with
Cash Collateral from Securities Loaned
(Cost $29,714,416) 29,714,416
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $508,008,740) 121.9% 501,129,594
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (21.9) (90,154,482)
----------------------------------
NET ASSETS 100.0% $ 410,975,112
==================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. 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 $15,376,985 or 3.74% of the Fund's net
assets as of June 30, 2007.
2. Represents the current interest rate for a variable or increasing rate
security.
3. Illiquid security. The aggregate value of illiquid securities as of June 30,
2007 was $14,871,335, which represents 3.62% of the Fund's net assets. See Note
9 of accompanying Notes.
4. 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 $17,146,073 or 4.17% of the Fund's net assets
as of June 30, 2007.
5. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
These securities amount to $1,286,041 or 0.31% of the Fund's net assets as of
June 30, 2007.
6. When-issued security or forward commitment to be delivered and settled after
June 30, 2007. See Note 1 of accompanying Notes.
7. Partial or fully-loaned security. See Note 10 of accompanying Notes.
8. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures contracts. The aggregate market
value of such securities is $513,545. See Note 6 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. Rate shown is the 7-day yield as of June 30, 2007.
12. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 2007, by virtue of the Fund, owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E 4,562,502 140,858,747 127,538,837 17,882,412
VALUE DIVIDEND
SEE NOTE 1 INCOME
- ------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E $17,882,412 $326,158
13. The security/securities have been segregated to satisfy the forward
commitment to return the cash collateral received in securities lending
transactions upon the borrower's return of the securities loaned. See Note 10 of
accompanying Notes.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- ----------------------------------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $490,126,328) $ 483,247,182
Affiliated companies (cost $17,882,412) 17,882,412
---------------
501,129,594
- ----------------------------------------------------------------------------------------------------------------------------
Cash 131,281
- ----------------------------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums paid $503,482) 1,992,808
- ----------------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $19,410,760 sold on a when-issued basis or forward commitment) 20,623,659
Interest, dividends and principal paydowns 3,817,969
Shares of beneficial interest sold 1,649,154
Futures margins 154,021
Other 11,949
---------------
Total assets 529,510,435
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 29,714,416
- ----------------------------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums paid $231,784) 987,227
- ----------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $86,559,888 purchased on a when-issued basis or forward commitment) 87,608,188
Shares of beneficial interest redeemed 87,093
Shareholder communications 70,725
Distribution and service plan fees 34,328
Trustees' compensation 9,705
Transfer and shareholder servicing agent fees 1,794
Other 21,847
---------------
Total liabilities 118,535,323
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 410,975,112
===============
- ----------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 38,426
- ----------------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 445,606,552
- ----------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 9,933,721
- ----------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (37,476,391)
- ----------------------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments (7,127,196)
---------------
NET ASSETS $ 410,975,112
===============
- ----------------------------------------------------------------------------------------------------------------------------
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
$343,056,325 and 32,045,023 shares of beneficial interest outstanding) $ 10.71
- ----------------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of
$67,918,787 and 6,380,817 shares of beneficial interest outstanding) $ 10.64
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER CORE BOND FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2007
- ----------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------------------------------------------
Interest $ 11,117,401
- ----------------------------------------------------------------------------------------------------------------------------
Dividends from affiliated companies 326,158
- ----------------------------------------------------------------------------------------------------------------------------
Fee income 58,403
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio lending fees 34,900
---------------
Total investment income 11,536,862
- ----------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------------------------------------------
Management fees 1,393,598
- ----------------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 62,695
- ----------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,048
Service shares 5,001
- ----------------------------------------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 30,649
Service shares 4,304
- ----------------------------------------------------------------------------------------------------------------------------
Trustees' compensation 7,578
- ----------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 1,396
- ----------------------------------------------------------------------------------------------------------------------------
Administration service fees 750
- ----------------------------------------------------------------------------------------------------------------------------
Other 28,463
---------------
Total expenses 1,539,482
Less reduction to custodian expenses (779)
Less waivers and reimbursements of expenses (6,197)
---------------
Net expenses 1,532,506
- ----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 10,004,356
- ----------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments (1,533,495)
Closing and expiration of futures contracts 306,092
Foreign currency transactions 298
Swap contracts 184
---------------
Net realized loss (1,226,921)
- ----------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (4,088,243)
Futures contracts (702,594)
Swap contracts 207,738
---------------
Net change in unrealized depreciation (4,583,099)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,194,336
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER CORE BOND FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 10,004,356 $ 19,887,682
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized loss (1,226,921) (1,856,406)
- -----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation (4,583,099) 2,736,740
------------------------------
Net increase in net assets resulting from operations 4,194,336 20,768,016
- -----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (18,342,384) (21,803,446)
Service shares (2,404,569) (608,147)
------------------------------
(20,746,953) (22,411,593)
- -----------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares (9,542,435) (61,099,902)
Service shares 28,772,741 29,289,033
------------------------------
19,230,306 (31,810,869)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) 2,677,689 (33,454,446)
- -----------------------------------------------------------------------------------------------------------------------------------
Beginning of period 408,297,423 441,751,869
------------------------------
End of period (including accumulated net investment income of $9,933,721
and $20,676,318, respectively) $ 410,975,112 $ 408,297,423
==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER CORE BOND FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.16 $ 11.19 $ 11.50 $ 11.42 $ 11.31 $ 11.21
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .27 1 .53 1 .51 1 .43 1 .51 .65
Net realized and unrealized gain (loss) (.15) .03 (.23) .18 .23 .27
Payment from affiliate -- -- -- -- -- .01
--------------------------------------------------------------------------------------
Total from investment operations .12 .56 .28 .61 .74 .93
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.57) (.59) (.59) (.53) (.63) (.83)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.71 $ 11.16 $ 11.19 $ 11.50 $ 11.42 $ 11.31
======================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN:
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at net asset value 2 1.09% 5.28% 2.59% 5.49% 6.78% 9.02%
Total return before payment from
affiliate 3 N/A N/A N/A N/A N/A 8.93%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 343,056 $ 367,106 $ 430,642 $ 504,244 $ 618,234 $ 724,787
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 357,141 $ 391,750 $ 466,033 $ 552,293 $ 691,931 $ 686,932
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income before payment from
affiliate 4.98% 4.83% 4.56% 3.82% 4.03% 5.91% 3
Net investment income after payment from
affiliate N/A N/A N/A N/A N/A 6.07%
Total expenses 0.73% 5,6,7 0.77% 5,6 0.76% 7 0.75% 7 0.73% 7 0.73% 7
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 45% 8 114% 8 111% 8 95% 8 101% 157%
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 less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.73%
Year Ended December 31, 2006 0.77
6. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
7. Reduction to custodian expenses less than 0.005%.
8. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------------
Six Months Ended June 30, 2007 $ 402,110,270 $ 379,092,649
Year Ended December 31, 2006 1,168,229,255 1,270,329,129
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.
16 | OPPENHEIMER CORE BOND FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002 1
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.10 $ 11.15 $ 11.47 $ 11.39 $ 11.30 $ 10.46
- ------------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .25 2 .49 2 .47 2 .40 2 .43 .11
Net realized and unrealized gain (loss) (.15) .03 (.22) .18 .28 .72
Payment from affiliate -- -- -- -- -- .01
--------------------------------------------------------------------------------------
Total from investment operations .10 .52 .25 .58 .71 .84
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.56) (.57) (.57) (.50) (.62) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.64 $ 11.10 $ 11.15 $ 11.47 $ 11.39 $ 11.30
======================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN:
- ------------------------------------------------------------------------------------------------------------------------------------
Total return at net asset value 3 0.87% 4.93% 2.33% 5.22% 6.56% 8.03%
Total return before payment from
affiliate 4 N/A N/A N/A N/A N/A 7.94%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 67,919 $ 41,191 $ 11,110 $ 3,505 $ 3,835 $ 2,435
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 50,715 $ 21,265 $ 7,213 $ 3,002 $ 3,903 $ 834
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income before payment from
affiliate 4.72% 4.56% 4.29% 3.55% 3.73% 4.37% 4
Net investment income after payment from
affiliate N/A N/A N/A N/A N/A 5.04%
Total expenses 0.99% 6,7,8 1.06% 6,7 1.03% 8 0.99% 8 0.98% 8 0.98% 8,9
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 45% 10 114% 10 111% 10 95% 10 101% 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 less than one full year.
6. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.99%
Year Ended December 31, 2006 1.06
7. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
8. Reduction to custodian expenses less than 0.005%.
9. Voluntary waiver of transfer agent fees less than 0.005%.
10. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- --------------------------------------------------------------------------------
Six Months Ended June 30, 2007 $ 402,110,270 $ 379,092,649
Year Ended December 31, 2006 1,168,229,255 1,270,329,129
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
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(R) 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. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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 Trustees. Investments
in open-end registered investment companies (including affiliated funds) are
valued at that fund's net asset value. 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 take place generally at least 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, 2007, the Fund had purchased
18 | OPPENHEIMER CORE BOND FUND/VA
$86,559,888 of securities issued on a when-issued basis or forward commitment
and sold $19,410,760 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.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INVESTMENTS WITH OFF BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists
19 | OPPENHEIMER CORE BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
when the maximum potential loss on a particular financial instrument is greater
than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities.
- --------------------------------------------------------------------------------
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, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $37,458,211 expiring by 2015.
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. As of June
30, 2007, it is estimated that the Fund will not utilize any capital loss
carryforward to reset realized capital gains. During the fiscal year ended
December 31, 2006, the Fund did not utilized any capital loss carryforward to
offset capital gains realized in that fiscal year.
As of December 31, 2006, the Fund had available for federal income tax purposes
post-October losses of $206,945 and unused capital loss carryforwards as
follows:
EXPIRING
----------------------------
2010 $29,885,554
2013 57,295
2014 6,081,496
-----------
Total $36,024,345
===========
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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 compensation deferral 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.
20 | OPPENHEIMER CORE BOND FUND/VA
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, 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.
- --------------------------------------------------------------------------------
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, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 683,753 $ 7,507,968 953,894 $ 10,320,632
Dividends and/or distributions reinvested 1,704,683 18,342,384 2,058,871 21,803,446
Redeemed (3,236,338) (35,392,787) (8,604,369) (93,223,980)
------------------------------------------------------------
Net decrease (847,902) $ (9,542,435) (5,591,604) $(61,099,902)
============================================================
- ----------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 2,498,589 $ 26,943,503 2,826,656 $ 30,522,972
Dividends and/or distributions reinvested 224,516 2,404,569 57,590 608,147
Redeemed (53,024) (575,331) (170,116) (1,842,086)
------------------------------------------------------------
Net increase 2,670,081 $ 28,772,741 2,714,130 $ 29,289,033
============================================================
21 | OPPENHEIMER CORE 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 and investments in IMMF, for the six months ended
June 30, 2007, were as follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
Investment securities $ 97,395,657 $106,882,638
U.S. government and government agency obligations 81,397,856 62,943,824
To Be Announced (TBA) mortgage-related securities 402,110,270 379,092,649
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE FOR MAY 1, 2007 TO JUNE 30, 2007
---------------------------------------------
Up to $1 billion 0.60%
Over $1 billion 0.50
FEE SCHEDULE FOR DEC. 31, 2006 TO APRIL 30, 2007
------------------------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Next $200 million 0.60
Over $1 billion 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, 2007, the Fund paid
$9,977 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.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended June 30, 2007, the Manager waived $6,197 for
IMMF management fees.
- --------------------------------------------------------------------------------
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
22 | OPPENHEIMER CORE BOND FUND/VA
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, 2007, 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 at 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, 2007, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS JUNE 30, 2007 (DEPRECIATION)
- ------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Treasury Long Bonds 9/19/07 413 $ 44,500,750 $(520,687)
U.S. Treasury Nts., 5 yr. 9/28/07 191 19,878,922 (104,837)
----------
(625,524)
----------
CONTRACTS TO SELL
U.S. Treasury Nts., 2 yr. 9/28/07 598 121,861,188 165,166
U.S. Treasury Nts., 10 yr. 9/19/07 263 27,799,922 (58,007)
----------
107,159
----------
$(518,365)
==========
23 | OPPENHEIMER CORE BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. CREDIT DEFAULT SWAP CONTRACTS
A credit default swap is a bilateral contract that enables an investor to buy or
sell protection against a defined-issuer credit event. The Fund may enter into
credit default swaps to hedge an existing position or to obtain exposure to a
security or market by purchasing or selling credit protection. The Fund may
enter into credit default swaps on a single security, or a basket of securities.
In a credit default swap contract, the purchaser of the contract will pay
a periodic interest fee, similar to an insurance premium, on the notional amount
of the swap contract to the counterparty (the seller of the contract). If there
is a credit event (for example, bankruptcy or a failure to timely pay interest
or principal), the purchaser will exercise the contract and will receive a
payment from the seller of the contract equal to the notional value of the
credit default swap contract less the value of the underlying security.
The periodic interest fees are accrued daily as a component of unrealized
appreciation (depreciation) and are recorded as realized gain(loss) upon
payment. In the event that the credit default swap is exercised due to a credit
event, the difference between the value of the underlying security and the
notional amount is recorded as realized gain (loss) and is included on the
Statement of Operations.
Credit default swaps are marked to market daily using primarily quotations
from counterparties and brokers. The value of the contracts is separately
disclosed on the Statement of Assets and Liabilities. The unrealized
appreciation (depreciation) related to the change in the valuation of the
notional amount of the swap is combined with the accrued interest due to (owed
by) the Fund at termination or settlement. The net change in this amount during
the period is included on the Statement of Operations.
Risks of credit default swaps include, but are not limited to, the cost of
paying for credit protection if there are no credit events, pricing transparency
when assessing the cost of a credit default swap, counterparty risk, adverse
pricing when purchasing bonds to satisfy its delivery obligation, and the need
to fund the delivery obligation (either cash or defaulted securities depending
on whether the Fund is the purchaser or seller of the credit default swap
contract, respectively).
Information regarding such credit default swaps as of June 30, 2007 is as
follows:
BUY/SELL NOTIONAL PREMIUM
CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES (RECEIVED) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc:
Beazer Homes
USA, Inc. Sell $ 570 2.1000% 6/20/08 $ -- $ (7,392)
Capmark Financial
Group, Inc. Sell 950 1.0000 6/20/12 -- 2,753
Lear Corp. Sell 1,605 1.0000 6/20/08 -- 4,402
Toys R US, Inc. Sell 1,000 1.4500 9/20/08 -- (7,557)
- ------------------------------------------------------------------------------------------------------------------------------------
Credit Suisse
International:
Belo Corp. Buy 3,065 0.9000 6/20/13 -- 37,070
CDX North America
High Yield Index Buy 1,045 2.7500 6/20/12 2,068 20,176
CDX North America
High Yield Index Buy 4,730 2.7500 6/20/14 85,698 218,278
CDX North America
High Yield Index Buy 1,890 2.7500 6/20/14 27,261 87,219
CDX North America
High Yield Index Sell 4,730 2.7500 6/20/12 26,639 (91,323)
CDX North America
High Yield Index Sell 1,890 2.7500 6/20/12 15,264 (36,491)
Freescale
Semiconductor, Inc. Sell 975 0.6000 3/20/08 -- (6,605)
Freescale
Semiconductor, Inc. Sell 1,085 0.7500 3/20/08 -- (6,149)
Rite Aid Corp. Sell 1,595 0.8750 6/20/08 -- (10,042)
24 | OPPENHEIMER CORE BOND FUND/VA
BUY/SELL NOTIONAL PREMIUM
CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES (RECEIVED) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Credit Suisse
International:
Continued Univision
Communications, Inc. Sell $ 490 0.7500% 3/20/08 $ -- $ (3,057)
- ------------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Abitibi-Consolidated
Co. of Canada Sell 1,630 1.5200 9/20/07 -- (1,091)
Allied Waste North
America, Inc. Sell 630 2.0000 9/20/09 -- 4,251
Allied Waste North
America, Inc. Sell 990 2.0000 9/20/09 -- 6,681
Bombardier, Inc. Sell 500 0.9000 9/20/07 -- 750
CDX North America
High Yield Index Buy 1,935 2.7500 6/20/12 (18,060) 32,113
CDX North America
High Yield Index Buy 4,730 2.7500 6/20/14 92,695 225,198
CDX North America
High Yield Index Buy 4,710 2.7500 6/20/14 79,089 224,246
CDX North America
High Yield Index Buy 2,790 2.7500 6/20/14 36,968 132,833
CDX North America
High Yield Index Sell 4,730 2.7500 6/20/12 22,599 (93,117)
CDX North America
High Yield Index Sell 4,710 2.7500 6/20/12 29,830 (92,723)
CDX North America
High Yield Index Sell 4,745 2.7500 6/20/12 33,380 (93,412)
CDX North America
High Yield Index Sell 2,790 2.7500 6/20/12 25,808 (54,926)
CDX.NA.IG.7 Buy 3,600 0.4000 12/20/11 370 (3,255)
Dillard's, Inc. Sell 420 0.7500 9/20/08 -- 168
Dow Jones
CDX North America
Crossover Index Buy 4,745 2.7500 6/20/14 73,383 225,912
Eastman Kodak Co. Sell 1,390 1.0000 12/20/08 -- 282
Levi Strauss & Co. Sell 935 1.0000 9/20/08 -- 471
Levi Strauss & Co. Sell 700 0.9000 9/20/08 -- --
Tenet Healthcare Corp. Sell 1,635 1.6000 3/20/09 -- (2,578)
Weyerhaeuser Co. Buy 2,010 0.5800 9/20/11 -- (17,793)
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets LP:
Capmark Financial Group, Inc. Sell 1,035 0.9500 6/20/12 -- (2,500)
First Data Corp. Sell 1,020 1.1500 9/20/08 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital
Services, Inc.:
ArvinMeritor, Inc. Sell 555 1.0500 9/20/07 -- 399
ArvinMeritor, Inc. Sell 445 1.1000 9/20/07 -- 377
Beazer Homes USA, Inc. Sell 1,040 2.1500 6/20/08 -- (22,134)
Bombardier, Inc. Sell 555 1.0500 9/20/07 -- 1,208
Bombardier, Inc. Sell 550 1.0000 9/20/07 -- 1,127
CDX North America
High Yield Index Buy 4,650 2.7500 6/20/14 66,876 215,562
CDX North America
High Yield Index Buy 4,340 2.7500 6/20/14 57,504 201,191
CDX North America
High Yield Index Sell 4,650 2.7500 6/20/12 37,749 (88,803)
CDX North America
High Yield Index Sell 4,340 2.7500 6/20/12 40,145 (82,883)
25 | OPPENHEIMER CORE BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. CREDIT DEFAULT SWAP CONTRACTS Continued
BUY/SELL NOTIONAL PREMIUM
CREDIT AMOUNT PAY/RECEIVE TERMINATION PAID/
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES (RECEIVED) VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital
Services, Inc.: Continued
CountrywideHome
Loans, Inc. Sell $ 3,070 0.4200% 6/20/09 $ -- $ 1,536
El Paso Corp. Sell 2,050 0.5200 3/20/10 -- (5,851)
Ford Motor Co. Buy 2,065 5.4000 12/20/08 -- (92,362)
Ford Motor Co. Buy 980 5.3000 12/20/08 -- (42,434)
Ford Motor Co. Sell 2,065 7.1500 12/20/16 -- 123,409
Ford Motor Co. Sell 980 7.0500 12/20/16 -- 53,478
General Motors Corp. Buy 1,035 4.0000 12/20/08 -- (28,824)
General Motors Corp. Buy 1,000 3.9500 12/20/08 -- (27,134)
General Motors Corp. Sell 1,035 5.8000 12/20/16 -- 66,625
General Motors Corp. Sell 1,000 5.7500 12/20/16 -- 61,556
Inco Ltd. Buy 1,030 0.7000 3/20/17 -- (17,478)
Inco Ltd. Buy 1,015 0.6300 3/20/17 -- (11,951)
J.C. Penney Co., Inc. Sell 2,005 0.6100 6/20/13 -- (6,821)
K. Hovnanian Enterprises, Inc. Sell 500 1.8500 6/20/08 -- (2,061)
K. Hovnanian Enterprises, Inc. Sell 500 1.8500 6/20/08 -- (2,061)
Kroger Co. (The) Buy 2,065 0.4775 6/20/12 -- (7,420)
Tribune Co. Sell 1,000 1.0000 6/20/08 -- (18,999)
Vale Overseas Ltd. Sell 1,030 1.1700 3/20/17 -- 22,555
Vale Overseas Ltd. Sell 1,015 1.1000 3/20/17 -- 16,892
-------------------------
$ 735,266 $ 1,001,491
=========================
- --------------------------------------------------------------------------------
8. TOTAL RETURN SWAP CONTRACTS
A total return swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. One cash flow stream will typically be
based on a reference interest rate or index and the other on the total return of
a reference asset such as a security, a basket of securities, or an index. The
total return includes appreciation or depreciation on the reference asset, plus
any interest or dividend payments. Payments under the swap are based on an
agreed upon principal amount but since this principal amount is not exchanged,
it represents neither an asset nor a liability to either counterparty, and is
referred to as notional. Total return swaps are marked to market daily using
primarily quotations from counterparties and brokers. The value of the contracts
is separately disclosed on the Statement of Assets and Liabilities. The
unrealized appreciation (depreciation) related to the change in the valuation of
the notional amount of the swap is combined with the amount due to (owed by) the
Fund at termination or settlement. The net change in this amount during the
period is included on the Statement of Operations. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations. The primary risks associated with total return swaps are credit
risks (if the counterparty fails to meet its obligations) and market risk (if
there is no liquid market for the agreement or unfavorable changes occur in the
reference asset).
As of June 30, 2007, the Fund had entered into the following total return swap
agreements:
NOTIONAL PAID BY RECEIVED BY TERMINATION
SWAP COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- -----------------------------------------------------------------------------------------------------
If positive, the
If negative, the Total Return of
absolute value the Lehman CMBS
of the Lehman Index plus 27.5
Deutsche Bank AG $4,800,000 CMBS Index. basis points. 11/1/07 $ --
26 | OPPENHEIMER CORE BOND FUND/VA
NOTIONAL PAID BY RECEIVED BY TERMINATION
SWAP COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE
- ---------------------------------------------------------------------------------------------------------
If positive, the
If negative, the absolute value
absolute value of Lehman Brothers
of Lehman Brothers U.S. CMBS Index:
Goldman Sachs U.S. CMBS Index: Aggregate AAA
Capital Markets LP $4,030,000 Aggregate AAA. plus 15 basis points. 9/1/07 $1,705
- ---------------------------------------------------------------------------------------------------------
If positive, the
If negative, the Total Return of
absolute value the Lehman CMBS
Lehman Brothers Special of the Lehman Index plus 32.5
Financing, Inc. 4,410,000 CMBS Index. basis points. 11/1/07 2,385
-------
$4,090
=======
Abbreviation is as follows:
CMBS Commercial Mortgage Backed Securities
- --------------------------------------------------------------------------------
9. ILLIQUID SECURITIES
As of June 30, 2007, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund will not invest more than 15% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities. Securities that are
illiquid are marked with the applicable footnote on the Statement of
Investments.
- --------------------------------------------------------------------------------
10. SECURITIES LENDING
The Fund lends portfolio securities from time to time in order to earn
additional income. In return, the Fund receives collateral in the form of
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, 2007, the Fund had
on loan securities valued at $32,778,579, which are included in the Statement of
Assets and Liabilities as "Investments, at value" and, when applicable, as
"Receivable for Investments sold." Collateral of $33,310,571 was received for
the loans, $29,714,416 of which was received in cash and subsequently invested
in approved investments or held as cash. In addition, collateral of $3,596,155
was also received in the form of securities.
27 | OPPENHEIMER CORE BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
11. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
28 | OPPENHEIMER CORE BOND FUND/VA
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in 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 CORE BOND FUND/VA
OPPENHEIMER MIDCAP 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, 2007.
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
(1/1/07) (6/30/07) JUNE 30, 2007
- --------------------------------------------------------------------------------
Non-Service shares Actual $ 1,000.00 $ 1,077.70 $ 3.61
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.32 3.51
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,076.10 5.00
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,019.98 4.87
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period). Those annualized expense ratios,
excluding affiliated fund indirect expenses, based on the 6-month period ended
June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- ----------------------------------------
Non-Service shares 0.70%
- ----------------------------------------
Service shares 0.97
The expense ratios reflect reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager that can be terminated at any time, without
advance notice. The "Financial Highlights" tables in the Fund's financial
statements, included in this report, also show the gross expense ratios, without
such waivers or reimbursements.
- --------------------------------------------------------------------------------
5 | OPPENHEIMER MIDCAP FUND/VA
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--97.6%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--12.2%
- --------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--1.0%
ITT Educational Services, Inc. 1 93,600 $ 10,986,768
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.1%
Las Vegas Sands Corp. 1 152,500 11,649,475
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--6.9%
GameStop Corp., Cl. A 1 237,900 9,301,890
- --------------------------------------------------------------------------------
O'Reilly Automotive, Inc. 1 823,924 30,114,422
- --------------------------------------------------------------------------------
Tiffany & Co. 472,400 25,065,544
- --------------------------------------------------------------------------------
Tractor Supply Co. 1 228,500 11,893,425
----------------
76,375,281
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--3.2%
Coach, Inc. 1 138,000 6,539,820
- --------------------------------------------------------------------------------
Polo Ralph Lauren Corp., Cl. A 297,200 29,158,292
----------------
35,698,112
- --------------------------------------------------------------------------------
ENERGY--5.5%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--3.0%
Cameron International Corp. 1 133,200 9,519,804
- --------------------------------------------------------------------------------
Dril-Quip, Inc. 1 144,000 6,472,800
- --------------------------------------------------------------------------------
Smith International, Inc. 291,700 17,105,288
----------------
33,097,892
- --------------------------------------------------------------------------------
OIL & GAS--2.5%
Murphy Oil Corp. 271,700 16,149,848
- --------------------------------------------------------------------------------
Range Resources Corp. 298,900 11,181,849
----------------
27,331,697
- --------------------------------------------------------------------------------
FINANCIALS--13.8%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--3.8%
Affiliated Managers Group, Inc. 1 185,800 23,923,608
- --------------------------------------------------------------------------------
Bear Stearns Cos., Inc. (The) 84,600 11,844,000
- --------------------------------------------------------------------------------
Jefferies Group, Inc. 241,500 6,515,670
----------------
42,283,278
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--2.8%
East West Bancorp, Inc. 378,500 14,716,080
- --------------------------------------------------------------------------------
Marshall & Ilsley Corp. 346,000 16,479,980
----------------
31,196,060
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.6%
Chicago Mercantile Exchange (The) 13,000 6,946,680
- --------------------------------------------------------------------------------
INSURANCE--3.0%
AMBAC Financial Group, Inc. 137,100 11,953,749
- --------------------------------------------------------------------------------
Philadelphia Consolidated
Holding Co. 1 505,500 21,129,900
----------------
33,083,649
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT--3.6%
CB Richard Ellis Group, Inc., Cl. A 1 525,420 $ 19,177,830
- --------------------------------------------------------------------------------
Jones Lang LaSalle, Inc. 176,400 20,021,400
----------------
39,199,230
- --------------------------------------------------------------------------------
HEALTH CARE--19.2%
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--6.7%
Bard (C.R.), Inc. 412,600 34,093,138
- --------------------------------------------------------------------------------
IDEXX Laboratories, Inc. 1 232,200 21,973,086
- --------------------------------------------------------------------------------
Immucor, Inc. 1 164,400 4,598,268
- --------------------------------------------------------------------------------
Kyphon, Inc. 1 79,100 3,808,665
- --------------------------------------------------------------------------------
Varian Medical Systems, Inc. 1 216,900 9,220,419
----------------
73,693,576
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--6.1%
Coventry Health Care, Inc. 1 507,975 29,284,759
- --------------------------------------------------------------------------------
Laboratory Corp. of America
Holdings 1 132,700 10,385,102
- --------------------------------------------------------------------------------
Schein (Henry), Inc. 1 250,500 13,384,215
- --------------------------------------------------------------------------------
VCA Antech, Inc. 1 155,800 5,872,102
- --------------------------------------------------------------------------------
WellCare Health Plans, Inc. 1 95,300 8,625,603
----------------
67,551,781
- --------------------------------------------------------------------------------
HEALTH CARE TECHNOLOGY--2.2%
Cerner Corp. 1 441,000 24,462,270
- --------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES--3.6%
Covance, Inc. 1 493,700 33,848,072
- --------------------------------------------------------------------------------
Techne Corp. 1 102,600 5,869,746
----------------
39,717,818
- --------------------------------------------------------------------------------
PHARMACEUTICALS--0.6%
Shire Pharmaceuticals Group plc,
ADR 97,100 7,198,023
- --------------------------------------------------------------------------------
INDUSTRIALS--14.7%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--2.8%
Rockwell Collins, Inc. 432,800 30,572,992
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--1.5%
C.H. Robinson Worldwide, Inc. 174,900 9,185,748
- --------------------------------------------------------------------------------
Expeditors International of
Washington, Inc. 169,400 6,996,220
----------------
16,181,968
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--4.6%
Corrections Corp. of America 1 61,400 3,874,954
- --------------------------------------------------------------------------------
Dun & Bradstreet Corp. 159,600 16,435,608
- --------------------------------------------------------------------------------
Robert Half International, Inc. 95,730 3,494,145
- --------------------------------------------------------------------------------
Stericycle, Inc. 1 618,400 27,494,064
----------------
51,298,771
6 | OPPENHEIMER MIDCAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.9%
Rockwell Automation, Inc. 142,700 $ 9,909,088
- --------------------------------------------------------------------------------
MACHINERY--2.3%
Joy Global, Inc. 378,100 22,054,573
- --------------------------------------------------------------------------------
Manitowoc Co., Inc. (The) 49,100 3,946,658
----------------
26,001,231
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--2.6%
Fastenal Co. 695,700 29,122,002
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--24.2%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.6%
Research in Motion Ltd. 1 33,400 6,679,666
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--1.3%
Network Appliance, Inc. 1 477,200 13,934,240
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--4.0%
Agilent Technologies, Inc. 1 288,700 11,097,628
- --------------------------------------------------------------------------------
Amphenol Corp., Cl. A 349,300 12,452,545
- --------------------------------------------------------------------------------
Trimble Navigation Ltd. 1 649,500 20,913,900
----------------
44,464,073
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.4%
Digital River, Inc. 1 331,000 14,977,750
- --------------------------------------------------------------------------------
IT SERVICES--4.5%
Cognizant Technology
Solutions Corp. 1 63,800 4,790,742
- --------------------------------------------------------------------------------
Fidelity National Information
Services, Inc. 72,700 3,946,156
- --------------------------------------------------------------------------------
Fiserv, Inc. 1 178,400 10,133,120
- --------------------------------------------------------------------------------
SAIC, Inc. 1 763,300 13,792,831
- --------------------------------------------------------------------------------
VeriFone Holdings, Inc. 1 482,500 17,008,125
----------------
49,670,974
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.7%
FormFactor, Inc. 1 337,300 12,918,590
- --------------------------------------------------------------------------------
Microchip Technology, Inc. 701,600 25,987,264
- --------------------------------------------------------------------------------
Varian Semiconductor Equipment
Associates, Inc. 1 64,650 2,589,879
----------------
41,495,733
- --------------------------------------------------------------------------------
SOFTWARE--8.7%
Activision, Inc. 1 190,700 3,560,369
- --------------------------------------------------------------------------------
Amdocs Ltd. 1 620,600 24,712,292
- --------------------------------------------------------------------------------
Ansys, Inc. 1 286,600 7,594,900
- --------------------------------------------------------------------------------
Autodesk, Inc. 1 272,900 12,848,132
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SOFTWARE Continued
Citrix Systems, Inc. 1 364,500 $ 12,272,715
- --------------------------------------------------------------------------------
FactSet Research Systems, Inc. 398,550 27,240,893
- --------------------------------------------------------------------------------
Salesforce.com, Inc. 1 187,800 8,049,108
----------------
96,278,409
- --------------------------------------------------------------------------------
MATERIALS--5.6%
- --------------------------------------------------------------------------------
CHEMICALS--3.6%
Ecolab, Inc. 619,300 26,444,110
- --------------------------------------------------------------------------------
Sigma-Aldrich Corp. 311,600 13,295,972
----------------
39,740,082
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.7%
Vulcan Materials Co. 72,200 8,269,788
- --------------------------------------------------------------------------------
METALS & MINING--1.3%
Allegheny Technologies, Inc. 55,300 5,799,864
- --------------------------------------------------------------------------------
Titanium Metals Corp. 1 251,900 8,035,610
----------------
13,835,474
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.7%
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.7%
Crown Castle International Corp. 1 161,760 5,867,035
- --------------------------------------------------------------------------------
NII Holdings, Inc. 1 155,500 12,555,069
----------------
18,422,104
- --------------------------------------------------------------------------------
UTILITIES--0.7%
- --------------------------------------------------------------------------------
GAS UTILITIES--0.7%
Questar Corp. 150,500 7,953,925
----------------
Total Common Stocks (Cost $872,221,961) 1,079,279,860
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.0%
- --------------------------------------------------------------------------------
Blaze Network Products, Inc., 8%
Cv., Series D 1,2,3 (Cost $7,346,317) 1,147,862 --
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--3.2%
- --------------------------------------------------------------------------------
Oppenheimer Institutional Money
Market Fund, Cl. E, 5.28% 3,4
(Cost $35,003,700) 35,003,700 35,003,700
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $914,571,978) 100.8% 1,114,283,560
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.8) (8,798,363)
-------------------------------
NET ASSETS 100.0% $ 1,105,485,197
===============================
7 | OPPENHEIMER MIDCAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Illiquid or restricted security. See Note 5 of accompanying Notes.
3. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 2007, by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- ------------------------------------------------------------------------------------------------------------------------------------
Blaze Network Products, Inc., 8% Cv., Series D 1,147,862 -- -- 1,147,862
Oppenheimer Institutional Money Market Fund, Cl. E 19,997,273 250,016,166 235,009,739 35,003,700
VALUE DIVIDEND
SEE NOTE 1 INCOME
- ------------------------------------------------------------------------------------------------------------------------------------
Blaze Network Products, Inc., 8% Cv., Series D $ -- $ --
Oppenheimer Institutional Money Market Fund, Cl. E 35,003,700 637,056
4. Rate shown is the 7-day yield as of June 30, 2007.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | OPPENHEIMER MIDCAP FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- -------------------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $872,221,961) $ 1,079,249,860
Affiliated companies (cost $42,350,017) 35,033,700
----------------
1,114,283,560
- -------------------------------------------------------------------------------------------------------------------
Cash 2,193
- -------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 658,546
Interest and dividends 314,054
Other 18,993
----------------
Total assets 1,115,277,346
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 8,744,612
Shares of beneficial interest redeemed 824,157
Shareholder communications 150,176
Distribution and service plan fees 31,184
Trustees' compensation 14,875
Transfer and shareholder servicing agent fees 1,892
Other 25,253
----------------
Total liabilities 9,792,149
- -------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 1,105,485,197
================
- -------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 20,187
- -------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 1,412,244,392
- -------------------------------------------------------------------------------------------------------------------
Accumulated net investment loss (452,315)
- -------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (506,038,649)
- -------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 199,711,582
----------------
NET ASSETS $ 1,105,485,197
================
- -------------------------------------------------------------------------------------------------------------------
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
$1,054,577,561 and 19,244,697 shares of beneficial interest outstanding) $ 54.80
- -------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of
$50,907,636 and 942,544 shares of beneficial interest outstanding) $ 54.01
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER MIDCAP FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2007
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends:
Unaffiliated companies $ 2,837,630
Affiliated companies 637,056
- --------------------------------------------------------------------------------
Interest 449
--------------
Total investment income 3,475,135
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 3,713,982
- --------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 60,751
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,113
Service shares 4,998
- --------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 73,863
Service shares 3,414
- --------------------------------------------------------------------------------
Trustees' compensation 13,828
- --------------------------------------------------------------------------------
Custodian fees and expenses 3,632
- --------------------------------------------------------------------------------
Administration service fees 750
- --------------------------------------------------------------------------------
Other 36,401
--------------
Total expenses 3,916,732
Less reduction to custodian expenses (178)
Less waivers and reimbursements of expenses (12,179)
--------------
Net expenses 3,904,375
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (429,240)
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain on investments 143,044,205
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments (59,852,711)
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 82,762,254
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER MIDCAP FUND/VA
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006
- ------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment loss $ (429,240) $ (641,546)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain 143,044,205 123,157,163
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (59,852,711) (84,577,802)
----------------------------------
Net increase in net assets resulting from operations 82,762,254 37,937,815
- ------------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares (79,391,340) (210,102,500)
Service shares 174,327 9,672,618
----------------------------------
(79,217,013) (200,429,882)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) 3,545,241 (162,492,067)
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning of period 1,101,939,956 1,264,432,023
----------------------------------
End of period (including accumulated net investment loss of $452,315 and $23,075, respectively) $ 1,105,485,197 $ 1,101,939,956
==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER MIDCAP FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 50.85 $ 49.39 $ 43.97 $ 36.71 $ 29.23 $ 40.72
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss (.02) 1 (.02) 1 (.12) 1 (.15) 1 (.15) (.10)
Net realized and unrealized
gain (loss) 3.97 1.48 5.54 7.41 7.63 (11.16)
-------------------------------------------------------------------------------------------------
Total from investment
operations 3.95 1.46 5.42 7.26 7.48 (11.26)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment
income -- -- -- -- -- (.23)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 54.80 $ 50.85 $ 49.39 $ 43.97 $ 36.71 $ 29.23
=================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE 2 7.77% 2.96% 12.33% 19.78% 25.59% (27.79)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 1,054,577 $ 1,054,809 $ 1,227,881 $ 1,209,459 $ 1,113,743 $ 979,919
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in
thousands) $ 1,059,241 $ 1,135,831 $ 1,177,979 $ 1,124,874 $ 1,041,584 $ 1,240,435
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 3
Net investment loss (0.07)% (0.04)% (0.26)% (0.39)% (0.43)% (0.29)%
Total expenses 0.70% 4,5,6 0.69% 4,5 0.69% 6 0.69% 6 0.70% 6 0.68% 6
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 56% 32% 53% 154% 54%
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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.70%
Year Ended December 31, 2006 0.69
5. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
6. Reduction to custodian expenses less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER MIDCAP FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 50.19 $ 48.87 $ 43.64 $ 36.54 $ 29.13 $ 40.70
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.09) 1 (.16) 1 (.25) 1 (.27) 1 -- 2 .16
Net realized and unrealized gain (loss) 3.91 1.48 5.48 7.37 7.41 (11.53)
---------------------------------------------------------------------------------
Total from investment operations 3.82 1.32 5.23 7.10 7.41 (11.37)
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income -- -- -- -- -- (.20)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 54.01 $ 50.19 $ 48.87 $ 43.64 $ 36.54 $ 29.13
=================================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 7.61% 2.70% 11.99% 19.43% 25.44% (28.05)%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 50,908 $ 47,131 $ 36,551 $ 24,151 $ 11,698 $ 144
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 49,026 $ 44,273 $ 28,798 $ 17,579 $ 3,858 $ 72
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (0.34)% (0.33)% (0.54)% (0.68)% (0.72)% (0.56)%
Total expenses 0.97% 5 0.97% 5 0.97% 0.99% 0.95% 1.55%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 0.97% 0.97% 0.97% 0.99% 0.95% 0.98%
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 56% 32% 53% 154% 54%
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 less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.97%
Year Ended December 31, 2006 0.97
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER MIDCAP FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer MidCap 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 "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 NASDAQ(R) 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. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. Short-term "money market type" debt securities
with remaining maturities of sixty days or less are valued at amortized cost
(which approximates market value).
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
14 | OPPENHEIMER MIDCAP FUND/VA
- --------------------------------------------------------------------------------
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, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $505,751,549 expiring by
2015. 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, 2007, it is estimated that the Fund will utilize
$143,044,205 of capital loss carryforward to offset realized capital gains.
During the fiscal year ended December 31, 2006, the Fund utilized $104,242,991
of capital loss carryfor-ward to offset capital gains realized in that fiscal
year.
As of December 31, 2006, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
EXPIRING
-----------------------
2009 $418,570,932
2010 230,224,822
------------
Total $648,795,754
============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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 compensation deferral 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.
15 | OPPENHEIMER MIDCAP 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. 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.
- --------------------------------------------------------------------------------
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, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 760,230 $ 40,227,529 1,908,858 $ 96,341,176
Redeemed (2,257,673) (119,618,869) (6,030,134) (306,443,676)
-----------------------------------------------------------
Net decrease (1,497,443) $ (79,391,340) (4,121,276) $ (210,102,500)
===========================================================
- ----------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 90,240 $ 4,715,355 330,109 $ 16,552,889
Redeemed (86,764) (4,541,028) (138,912) (6,880,271)
-----------------------------------------------------------
Net increase 3,476 $ 174,327 191,197 $ 9,672,618
===========================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
June 30, 2007, were as follows:
PURCHASES SALES
--------------------------------------------------------------
Investment securities $621,310,972 $705,693,307
16 | OPPENHEIMER MIDCAP FUND/VA
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
---------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Next $700 million 0.60
Over $1.5 billion 0.58
- --------------------------------------------------------------------------------
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, 2007, the Fund paid
$9,964 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.
The Manager will waive fees and/or reimburse Fund
expenses in an amount equal to the indirect management fees incurred through the
Fund's investment in IMMF. During the six months ended June 30, 2007, the
Manager waived $12,179 for IMMF management fees.
- --------------------------------------------------------------------------------
5. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2007, 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
17 | OPPENHEIMER MIDCAP FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. ILLIQUID OR RESTRICTED SECURITIES Continued
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, 2007 DEPRECIATION
- -----------------------------------------------------------------------------------------------------------
Blaze Network Products, Inc., 8% Cv., Series D 10/17/00 $7,346,317 $-- $7,346,317
- --------------------------------------------------------------------------------
6. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
18 | 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 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in 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 MIDCAP 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, 2007.
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
(1/1/07) (6/30/07) JUNE 30, 2007
- ------------------------------------------------------------------------------
Non-Service shares Actual $ 1,000.00 $ 1,085.30 $ 3.42
- ------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.52 3.31
- ------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,084.20 4.71
- ------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,020.28 4.57
- ------------------------------------------------------------------------------
Class 3 Actual 1,000.00 1,085.30 3.42
- ------------------------------------------------------------------------------
Class 3 Hypothetical 1,000.00 1,021.52 3.31
- ------------------------------------------------------------------------------
Class 4 Actual 1,000.00 1,084.00 4.71
- ------------------------------------------------------------------------------
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,
excluding affiliated fund indirect expenses, based on the 6-month period ended
June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- ---------------------------------------
Non-Service shares 0.66%
- ---------------------------------------
Service shares 0.91
- ---------------------------------------
Class 3 0.66
- ---------------------------------------
Class 4 0.91
The expense ratios reflect reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager that can be terminated at any time, without
advance notice. The "Financial Highlights" tables in the Fund's financial
statements, included in this report, also show the gross expense ratios, without
such waivers or reimbursements.
- --------------------------------------------------------------------------------
5 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--96.8%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--19.6%
- --------------------------------------------------------------------------------
AUTOMOBILES--2.5%
Bayerische Motoren Werke AG 635,930 $ 41,021,078
- --------------------------------------------------------------------------------
Porsche AG, Preference 18,103 32,251,903
- --------------------------------------------------------------------------------
Toyota Motor Corp. 459,300 28,960,570
----------------
102,233,551
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.6%
Carnival Corp. 999,400 48,740,738
- --------------------------------------------------------------------------------
International Game Technology 575,700 22,855,290
- --------------------------------------------------------------------------------
McDonald's Corp. 549,400 27,887,544
- --------------------------------------------------------------------------------
Scientific Games Corp., Cl. A 1 125,831 4,397,793
- --------------------------------------------------------------------------------
Shuffle Master, Inc. 1 246,800 4,096,880
----------------
107,978,245
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--2.5%
Koninklijke (Royal) Philips
Electronics NV 1,128,100 47,823,690
- --------------------------------------------------------------------------------
Sony Corp. 1,033,800 53,148,865
----------------
100,972,555
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.2%
Sega Sammy Holdings, Inc. 520,600 8,435,306
- --------------------------------------------------------------------------------
MEDIA--5.1%
Citadel Broadcasting Corp. 82,824 534,215
- --------------------------------------------------------------------------------
Dish TV India Ltd. 1 2,397,922 6,285,672
- --------------------------------------------------------------------------------
Getty Images, Inc. 1 241,300 11,536,553
- --------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored GDR 1,543,296 42,610,403
- --------------------------------------------------------------------------------
Pearson plc 1,104,328 18,599,770
- --------------------------------------------------------------------------------
Singapore Press Holdings Ltd. 3,040,840 9,217,376
- --------------------------------------------------------------------------------
Sirius Satellite Radio, Inc. 1 9,396,210 28,376,554
- --------------------------------------------------------------------------------
Walt Disney Co. (The) 1,078,500 36,819,990
- --------------------------------------------------------------------------------
Wire & Wireless India Ltd. 1 2,085,150 3,252,844
- --------------------------------------------------------------------------------
WPP Group plc 1,371,500 20,516,947
- --------------------------------------------------------------------------------
Zee Entertainment Enterprises Ltd. 4,170,300 30,458,916
- --------------------------------------------------------------------------------
Zee News Ltd. 1 1,885,392 2,128,332
----------------
210,337,572
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--3.9%
H&M Hennes & Mauritz AB, Cl. B 1,317,200 77,864,458
- --------------------------------------------------------------------------------
Industria de Diseno Textil SA 663,000 39,108,527
- --------------------------------------------------------------------------------
Tiffany & Co. 783,300 41,561,898
----------------
158,534,883
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--2.8%
Bulgari SpA 1,284,618 20,602,538
- --------------------------------------------------------------------------------
Burberry Group plc 1,299,628 17,758,976
- --------------------------------------------------------------------------------
Coach, Inc. 1 296,000 14,027,440
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS Continued
LVMH Moet Hennessey Louis
Vuitton 471,570 $ 54,350,271
- --------------------------------------------------------------------------------
Tod's SpA 115,389 10,327,772
----------------
117,066,997
- --------------------------------------------------------------------------------
CONSUMER STAPLES--7.9%
- --------------------------------------------------------------------------------
BEVERAGES--2.5%
Companhia de Bebidas das
Americas, ADR, Preference 453,815 31,767,050
- --------------------------------------------------------------------------------
Diageo plc 1,101,407 22,935,842
- --------------------------------------------------------------------------------
Fomento Economico Mexicano
SA de CV, UBD 7,491,300 29,366,090
- --------------------------------------------------------------------------------
Grupo Modelo SA de CV, Series C 3,449,300 18,789,402
----------------
102,858,384
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--2.0%
Seven & I Holdings Co. Ltd. 431,053 12,323,302
- --------------------------------------------------------------------------------
Tesco plc 3,919,983 32,815,527
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 743,300 35,760,163
----------------
80,898,992
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.0%
Cadbury Schweppes plc 3,006,164 40,902,756
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--2.4%
Colgate-Palmolive Co. 452,200 29,325,170
- --------------------------------------------------------------------------------
Hindustan Unilever Ltd. 3,934,500 18,229,866
- --------------------------------------------------------------------------------
Reckitt Benckiser plc 951,648 52,108,457
----------------
99,663,493
- --------------------------------------------------------------------------------
ENERGY--5.8%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--2.5%
Technip SA 597,970 49,340,464
- --------------------------------------------------------------------------------
Transocean, Inc. 1 507,800 53,816,644
----------------
103,157,108
- --------------------------------------------------------------------------------
OIL & GAS--3.3%
BP plc, ADR 437,669 31,573,442
- --------------------------------------------------------------------------------
Chevron Corp. 354,244 29,841,515
- --------------------------------------------------------------------------------
Husky Energy, Inc. 607,815 50,040,249
- --------------------------------------------------------------------------------
Total SA 286,310 23,241,738
----------------
134,696,944
- --------------------------------------------------------------------------------
FINANCIALS--14.3%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--3.3%
Credit Suisse Group 770,953 54,679,221
- --------------------------------------------------------------------------------
Morgan Stanley 515,600 43,248,528
- --------------------------------------------------------------------------------
Northern Trust Corp. 597,300 38,370,552
----------------
136,298,301
6 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--4.9%
BNP Paribas SA 91,750 $ 10,930,528
- --------------------------------------------------------------------------------
HSBC Holdings plc 2,091,487 38,116,035
- --------------------------------------------------------------------------------
ICICI Bank Ltd., Sponsored ADR 236,450 11,621,518
- --------------------------------------------------------------------------------
Resona Holdings, Inc. 5,213 12,438,759
- --------------------------------------------------------------------------------
Royal Bank of Scotland
Group plc (The) 4,837,479 61,178,839
- --------------------------------------------------------------------------------
Societe Generale, Cl. A 200,478 37,046,029
- --------------------------------------------------------------------------------
Sumitomo Mitsui Financial Group, Inc. 3,015 28,160,406
----------------
199,492,114
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.4%
Credit Saison Co. Ltd. 687,700 17,745,389
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.6%
Investor AB, B Shares 936,738 24,236,280
- --------------------------------------------------------------------------------
INSURANCE--5.1%
ACE Ltd. 397,571 24,856,139
- --------------------------------------------------------------------------------
AFLAC, Inc. 195,800 10,064,120
- --------------------------------------------------------------------------------
Allianz SE 237,151 55,399,963
- --------------------------------------------------------------------------------
American International Group, Inc. 290,500 20,343,715
- --------------------------------------------------------------------------------
Berkshire Hathaway, Inc., Cl. B 1 6,110 22,026,550
- --------------------------------------------------------------------------------
Manulife Financial Corp. 559,426 20,922,349
- --------------------------------------------------------------------------------
Prudential plc 2,472,137 35,205,176
- --------------------------------------------------------------------------------
XL Capital Ltd., Cl. A 255,900 21,569,811
----------------
210,387,823
- --------------------------------------------------------------------------------
HEALTH CARE--7.5%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--1.9%
3SBio, Inc., ADS 1 168,800 1,627,232
- --------------------------------------------------------------------------------
Acadia Pharmaceuticals, Inc. 1 302,500 4,135,175
- --------------------------------------------------------------------------------
Genentech, Inc. 1 186,300 14,095,458
- --------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 822,720 31,896,854
- --------------------------------------------------------------------------------
InterMune, Inc. 1 271,600 7,045,304
- --------------------------------------------------------------------------------
NicOx SA 1 212,570 5,163,179
- --------------------------------------------------------------------------------
Regeneron Pharmaceuticals, Inc. 1 176,802 3,168,292
- --------------------------------------------------------------------------------
Seattle Genetics, Inc. 1 170,256 1,670,211
- --------------------------------------------------------------------------------
Theravance, Inc. 1 271,000 8,672,000
----------------
77,473,705
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.5%
Boston Scientific Corp. 1 1,736,053 26,631,053
- --------------------------------------------------------------------------------
Medtronic, Inc. 269,500 13,976,270
- --------------------------------------------------------------------------------
Smith & Nephew plc 1,688,877 20,899,753
----------------
61,507,076
- --------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES--0.2%
Affymetrix, Inc. 1 322,800 8,034,492
- --------------------------------------------------------------------------------
Nektar Therapeutics 1 314,361 2,983,286
----------------
11,017,778
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PHARMACEUTICALS--3.9%
Chugai Pharmaceutical Co. Ltd. 647,500 $ 11,648,426
- --------------------------------------------------------------------------------
Johnson & Johnson 148,300 9,138,246
- --------------------------------------------------------------------------------
Novartis AG 341,694 19,233,257
- --------------------------------------------------------------------------------
Novo Nordisk AS, Cl. B 139,600 15,233,522
- --------------------------------------------------------------------------------
Roche Holding AG 266,433 47,263,460
- --------------------------------------------------------------------------------
Sanofi-Aventis SA 463,505 37,427,560
- --------------------------------------------------------------------------------
Shionogi & Co. Ltd. 1,224,000 19,981,645
----------------
159,926,116
- --------------------------------------------------------------------------------
INDUSTRIALS--10.9%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--4.2%
Boeing Co. 286,600 27,559,456
- --------------------------------------------------------------------------------
Empresa Brasileira de
Aeronautica SA, ADR 833,734 40,194,316
- --------------------------------------------------------------------------------
European Aeronautic Defence &
Space Co. 2 1,247,910 40,422,912
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 236,100 22,224,093
- --------------------------------------------------------------------------------
Northrop Grumman Corp. 261,900 20,394,153
- --------------------------------------------------------------------------------
Raytheon Co. 432,900 23,328,981
----------------
174,123,911
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--0.5%
Assa Abloy AB, Cl. B 935,085 20,624,915
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.7%
Experian Group Ltd. 646,239 8,141,704
- --------------------------------------------------------------------------------
Secom Co. Ltd. 419,000 19,771,695
----------------
27,913,399
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.0%
Emerson Electric Co. 856,200 40,070,160
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--3.5%
3M Co. 456,700 39,636,993
- --------------------------------------------------------------------------------
Hutchison Whampoa Ltd. 1,447,000 14,369,699
- --------------------------------------------------------------------------------
Siemens AG 623,739 89,527,673
----------------
143,534,365
- --------------------------------------------------------------------------------
MACHINERY--1.0%
Fanuc Ltd. 104,500 10,795,858
- --------------------------------------------------------------------------------
Hyundai Heavy Industries Co. Ltd. 89,299 33,347,573
----------------
44,143,431
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--25.7%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--7.1%
Cisco Systems, Inc. 1 621,100 17,297,635
- --------------------------------------------------------------------------------
Corning, Inc. 1 1,742,100 44,510,655
- --------------------------------------------------------------------------------
Juniper Networks, Inc. 1 2,164,200 54,472,914
- --------------------------------------------------------------------------------
Tandberg ASA 1,020,150 22,691,937
- --------------------------------------------------------------------------------
Telefonaktiebolaget LM Ericsson,
B Shares 38,566,000 153,842,076
---------------
292,815,217
7 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.1%
Benq Corp. 1 11,647,000 $ 4,412,011
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--2.8%
Hoya Corp. 850,600 28,152,247
- --------------------------------------------------------------------------------
Keyence Corp. 82,640 18,075,088
- --------------------------------------------------------------------------------
Kyocera Corp. 203,700 21,739,029
- --------------------------------------------------------------------------------
Murata Manufacturing Co. Ltd. 522,200 39,228,854
- --------------------------------------------------------------------------------
Nidec Corp. 138,200 8,126,441
----------------
115,321,659
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.6%
eBay, Inc. 1 1,826,400 58,773,552
- --------------------------------------------------------------------------------
Yahoo!, Inc. 1 263,300 7,143,329
----------------
65,916,881
- --------------------------------------------------------------------------------
IT SERVICES--2.1%
Automatic Data Processing, Inc. 903,100 43,773,257
- --------------------------------------------------------------------------------
Infosys Technologies Ltd. 896,126 42,468,293
----------------
86,241,550
- --------------------------------------------------------------------------------
OFFICE ELECTRONICS--0.4%
Canon, Inc. 269,450 15,822,323
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--6.1%
Advanced Micro Devices, Inc. 1 2,378,000 34,005,400
- --------------------------------------------------------------------------------
Altera Corp. 1,173,000 25,958,490
- --------------------------------------------------------------------------------
Cree, Inc. 1 821,900 21,246,115
- --------------------------------------------------------------------------------
Linear Technology Corp. 493,096 17,840,213
- --------------------------------------------------------------------------------
Maxim Integrated Products, Inc. 964,165 32,212,753
- --------------------------------------------------------------------------------
MediaTek, Inc. 2,692,700 41,947,983
- --------------------------------------------------------------------------------
Samsung Electronics Co. 37,722 23,110,518
- --------------------------------------------------------------------------------
Taiwan Semiconductor
Manufacturing Co. Ltd. 11,326,176 24,433,332
- --------------------------------------------------------------------------------
Taiwan Semiconductor
Manufacturing Co. Ltd., ADR 947,413 10,544,707
- --------------------------------------------------------------------------------
Xilinx, Inc. 783,700 20,979,649
----------------
252,279,160
- --------------------------------------------------------------------------------
SOFTWARE--5.5%
Adobe Systems, Inc. 1 1,009,463 40,529,939
- --------------------------------------------------------------------------------
Enix Corp. 542,500 13,702,944
- --------------------------------------------------------------------------------
Intuit, Inc. 1 1,232,100 37,061,568
- --------------------------------------------------------------------------------
Microsoft Corp. 2,121,000 62,505,870
- --------------------------------------------------------------------------------
Nintendo Co. Ltd. 71,000 26,006,904
- --------------------------------------------------------------------------------
SAP AG 907,185 46,485,788
----------------
226,293,013
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MATERIALS--0.5%
- --------------------------------------------------------------------------------
CHEMICALS--0.5%
Praxair, Inc. 150,600 $ 10,841,694
- --------------------------------------------------------------------------------
Syngenta AG 47,067 9,177,124
----------------
20,018,818
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--4.0%
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--4.0%
KDDI Corp. 5,409 40,108,971
- --------------------------------------------------------------------------------
SK Telecom Co. Ltd., ADR 1,368,460 37,427,381
- --------------------------------------------------------------------------------
Vodafone Group plc 26,214,532 88,332,830
----------------
165,869,182
- --------------------------------------------------------------------------------
UTILITIES--0.6%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.6%
Fortum Oyj 840,200 26,240,260
----------------
Total Common Stocks
(Cost $2,578,049,125) 3,987,461,623
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--2.5%
- --------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E,
5.28% 3,4 (Cost $102,276,994) 102,276,994 102,276,994
- --------------------------------------------------------------------------------
Total Investments, at Value
(excluding Investments Purchased
with Cash Collateral from Securities
Loaned) (Cost $2,680,326,119) 4,089,738,617
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM
SECURITIES LOANED--0.6% 5
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--0.6%
Undivided interest of 1.78% in joint
repurchase agreement (Principal
Amount/Value $1,320,000,000, with
a maturity value of $1,320,596,750)
with Nomura Securities, 5.425%,
dated 6/29/07, to be repurchased at
$23,452,150 on 7/2/07, collateralized
by Private Label CMOs, 0%-6.75%,
10/25/21-1/25/47, with a value of
$1,386,000,000 (Cost $23,441,552) $23,441,552 23,441,552
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $2,703,767,671) 99.9% 4,113,180,169
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.1 3,729,125
------------------------------
NET ASSETS 100.0% $ 4,116,909,294
==============================
8 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Partial or fully-loaned security. See Note 6 of accompanying Notes.
3. Rate shown is the 7-day yield as of June 30, 2007.
4. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 2007, by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- ----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E 51,475,095 242,791,918 191,990,019 102,276,994
VALUE DIVIDEND
SEE NOTE 1 INCOME
- ----------------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E $102,276,994 $1,800,292
5. The security/securities have 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 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 $1,483,163,908 36.1%
United Kingdom 480,944,350 11.7
Japan 434,373,022 10.6
Sweden 276,567,729 6.7
Germany 264,686,405 6.4
France 217,499,769 5.3
Switzerland 130,353,062 3.2
India 114,445,441 2.8
Korea, Republic of South 93,885,472 2.3
Mexico 90,765,895 2.2
The Netherlands 88,246,602 2.1
Taiwan 81,338,033 2.0
Brazil 71,961,366 1.7
Canada 70,962,598 1.7
Cayman Islands 46,425,950 1.1
Spain 39,108,527 1.0
Italy 30,930,310 0.8
Finland 26,240,260 0.6
Norway 22,691,937 0.6
Denmark 15,233,522 0.4
Hong Kong 14,369,699 0.3
Singapore 9,217,376 0.2
Jersey, Channel Islands 8,141,704 0.2
China 1,627,232 0.0
--------------------------
Total $4,113,180,169 100.0%
==========================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- ---------------------------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $2,601,490,677) $4,010,903,175
Affiliated companies (cost $102,276,994) 102,276,994
---------------
4,113,180,169
- ---------------------------------------------------------------------------------------------------------------------
Cash 276,728
- ---------------------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $3,641,864) 3,637,576
- ---------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 19,002,710
Interest and dividends 7,493,977
Other 46,561
---------------
Total assets 4,143,637,721
- ---------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 23,441,552
- ---------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 1,927,940
Distribution and service plan fees 794,569
Shareholder communications 345,486
Trustees' compensation 37,097
Investments purchased 4,227
Transfer and shareholder servicing agent fees 3,992
Other 173,564
---------------
Total liabilities 26,728,427
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS $4,116,909,294
===============
- ---------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 110,412
- ---------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,595,251,370
- ---------------------------------------------------------------------------------------------------------------------
Accumulated net investment income 26,852,774
- ---------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 85,237,525
- ---------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities denominated in
foreign currencies 1,409,457,213
---------------
NET ASSETS $4,116,909,294
===============
- ---------------------------------------------------------------------------------------------------------------------
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
$2,369,130,177 and 63,409,047 shares of beneficial interest outstanding) $ 37.36
- ---------------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of
$1,219,275,622 and 32,895,498 shares of beneficial interest outstanding) $ 37.07
- ---------------------------------------------------------------------------------------------------------------------
Class 3 Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of
$402,840,621 and 10,719,039 shares of beneficial interest outstanding) $ 37.58
- ---------------------------------------------------------------------------------------------------------------------
Class 4 Shares:
Net asset value, redemption price per share and offering price per share (based on net assets of
$125,662,874 and 3,388,832 shares of beneficial interest outstanding) $ 37.08
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2007
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $1,582,019) $ 54,976,553
Affiliated companies 1,800,292
- ----------------------------------------------------------------------------------------
Interest 16,578
- ----------------------------------------------------------------------------------------
Portfolio lending fees 2,246,618
--------------
Total investment income 59,040,041
- ----------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------
Management fees 12,094,906
- ----------------------------------------------------------------------------------------
Distribution and service plan fees:
Service shares 1,348,439
Class 4 shares 147,675
- ----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,290
Service shares 5,128
Class 3 shares 5,044
Class 4 shares 5,008
- ----------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 142,950
Service shares 67,461
Class 3 shares 24,636
Class 4 shares 7,350
- ----------------------------------------------------------------------------------------
Custodian fees and expenses 302,636
- ----------------------------------------------------------------------------------------
Trustees' compensation 37,727
- ----------------------------------------------------------------------------------------
Administration service fees 750
- ----------------------------------------------------------------------------------------
Other 72,657
--------------
Total expenses 14,267,657
Less reduction to custodian expenses (3,494)
Less waivers and reimbursements of expenses (34,377)
--------------
Net expenses 14,229,786
- ----------------------------------------------------------------------------------------
NET INVESTMENT INCOME 44,810,255
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
- ----------------------------------------------------------------------------------------
Net realized gain on:
Investments 92,400,135
Foreign currency transactions 3,524,221
--------------
Net realized gain 95,924,356
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments (net of foreign capital gains tax of $1,587) 172,271,674
Translation of assets and liabilities denominated in foreign currencies 8,877,697
--------------
Net change in unrealized appreciation 181,149,371
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 321,883,982
==============
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, 2007 DECEMBER 31,
(UNAUDITED) 2006
- --------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------------------
Net investment income $ 44,810,255 $ 40,843,985
- --------------------------------------------------------------------------------------------------------------------------
Net realized gain 95,924,356 202,740,034
- --------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 181,149,371 316,441,660
---------------------------------
Net increase in net assets resulting from operations 321,883,982 560,025,679
- --------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (30,881,671) (22,390,271)
Service shares (12,491,101) (5,586,912)
Class 3 shares (5,291,097) (3,732,415)
Class 4 shares (1,330,580) (875,877)
---------------------------------
(49,994,449) (32,585,475)
- --------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Non-Service shares (112,256,514) (116,956,054)
Service shares (52,238,025) (34,605,939)
Class 3 shares (19,263,594) (19,539,725)
Class 4 shares (5,788,329) (5,424,732)
---------------------------------
(189,546,462) (176,526,450)
- --------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares 24,665,790 (44,482,210)
Service shares 211,304,862 340,074,365
Class 3 shares (1,275,963) 12,707,608
Class 4 shares 8,865,724 13,427,523
---------------------------------
243,560,413 321,727,286
- --------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------
Total increase 325,903,484 672,641,040
- --------------------------------------------------------------------------------------------------------------------------
Beginning of period 3,791,005,810 3,118,364,770
---------------------------------
End of period (including accumulated net investment income of $26,852,774 and
$32,036,968, respectively) $4,116,909,294 $3,791,005,810
=================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 36.79 $ 33.38 $ 29.51 $ 25.08 $ 17.70 $ 22.84
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .43 1 .43 1 .32 1 .26 1 .19 .16
Net realized and unrealized
gain (loss) 2.47 5.20 3.85 4.49 7.34 (5.19)
-------------------------------------------------------------------------------------------------
Total from investment
operations 2.90 5.63 4.17 4.75 7.53 (5.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or
distributions to shareholders:
Dividends from net investment
income (.50) (.36) (.30) (.32) (.15) (.11)
Distributions from net
realized gain (1.83) (1.86) -- -- -- --
-------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (2.33) (2.22) (.30) (.32) (.15) (.11)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 37.36 $ 36.79 $ 33.38 $ 29.51 $ 25.08 $ 17.70
=================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE 2 8.53% 17.69% 14.31% 19.16% 43.02% (22.13)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $2,369,130 $2,297,315 $2,124,413 $2,518,867 $2,280,752 $1,549,993
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $2,319,200 $2,189,511 $2,123,523 $2,451,188 $1,751,226 $1,776,289
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 3
Net investment income 2.36% 1.27% 1.08% 1.01% 0.99% 0.80%
Total expenses 0.66% 4,5,6 0.66% 4,5,6 0.67% 5 0.66% 5 0.67% 5 0.67% 5
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 7% 21% 35% 30% 34% 34%
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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.66%
Year Ended December 31, 2006 0.66
5. Reduction to custodian expenses less than 0.005%.
6. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 36.49 $ 33.16 $ 29.33 $ 24.96 $ 17.61 $ 22.78
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .39 1 .33 1 .24 1 .20 1 .12 .12
Net realized and unrealized gain (loss) 2.46 5.16 3.84 4.46 7.36 (5.19)
--------------------------------------------------------------------------------------
Total from investment operations 2.85 5.49 4.08 4.66 7.48 (5.07)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.44) (.30) (.25) (.29) (.13) (.10)
Distributions from net realized gain (1.83) (1.86) -- -- -- --
--------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (2.27) (2.16) (.25) (.29) (.13) (.10)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 37.07 $ 36.49 $ 33.16 $ 29.33 $ 24.96 $ 17.61
======================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 8.42% 17.36% 14.06% 18.88% 42.86% (22.37)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,219,276 $983,558 $557,284 $346,403 $168,739 $52,830
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,088,909 $750,499 $413,849 $247,490 $ 91,800 $34,847
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 2.17% 0.98% 0.79% 0.77% 0.68% 0.51%
Total expenses 0.91% 4,5,6 0.91% 4,5,6 0.92% 5 0.91% 5 0.93% 5 0.90% 5
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 7% 21% 35% 30% 34% 34%
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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.91%
Year Ended December 31, 2006 0.91
5. Reduction to custodian expenses less than 0.005%.
6. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
CLASS 3 SHARES (UNAUDITED) 2006 2005 2004 2003 1
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 36.99 $ 33.55 $ 29.65 $ 25.19 $ 17.55
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .43 2 .43 2 .32 2 .26 2 .07
Net realized and unrealized gain 2.49 5.23 3.88 4.52 7.57
-------------------------------------------------------------------------
Total from investment operations 2.92 5.66 4.20 4.78 7.64
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.50) (.36) (.30) (.32) --
Distributions from net realized gain (1.83) (1.86) -- -- --
-------------------------------------------------------------------------
Total dividends and distributions to shareholders (2.33) (2.22) (.30) (.32) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 37.58 $ 36.99 $ 33.55 $ 29.65 $ 25.19
=========================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 8.53% 17.69% 14.34% 19.19% 43.53%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $402,840 $395,901 $346,064 $265,044 $147,576
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $399,460 $369,406 $296,252 $199,388 $ 80,579
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.36% 1.26% 1.06% 1.00% 0.73%
Total expenses 0.66% 5,6,7 0.66% 5,6,7 0.67% 6 0.66% 6 0.68% 6
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 7% 21% 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 less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.66%
Year Ended December 31, 2006 0.66
6. Reduction to custodian expenses less than 0.005%.
7. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
CLASS 4 SHARES (UNAUDITED) 2006 2005 2004 1
- ---------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 36.49 $ 33.15 $ 29.35 $ 25.21
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 2 .38 .34 .24 .09
Net realized and unrealized gain 2.46 5.16 3.84 4.05
------------------------------------------------------------
Total from investment operations 2.84 5.50 4.08 4.14
- ---------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.42) (.30) (.28) --
Distributions from net realized gain (1.83) (1.86) -- --
------------------------------------------------------------
Total dividends and distributions to shareholders (2.25) (2.16) (.28) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 37.08 $ 36.49 $ 33.15 $ 29.35
============================================================
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 8.40% 17.40% 14.05% 16.42%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $125,663 $114,232 $90,604 $37,384
- ---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $119,181 $100,973 $61,380 $19,774
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 2.12% 1.00% 0.79% 0.53%
Total expenses 0.91% 5,6,7 0.91% 5,6,7 0.93% 6 0.94% 6
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 7% 21% 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 less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.91%
Year Ended December 31, 2006 0.91
6. Reduction to custodian expenses less than 0.005%.
7. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
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(R) 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. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. 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.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
During the fiscal year ended December 31, 2006, the Fund did not utilize
any capital loss carryforward to offset capital gains realized in that fiscal
year.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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
18 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
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 compensation deferral 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.
- --------------------------------------------------------------------------------
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, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 2,762,883 $ 101,119,633 6,575,899 $ 223,540,908
Dividends and/or distributions reinvested 4,207,472 143,138,185 4,267,881 139,346,325
Redeemed (6,004,480) (219,592,028) (12,034,584) (407,369,443)
-------------------------------------------------------------
Net increase (decrease) 965,875 $ 24,665,790 (1,190,804) $ (44,482,210)
=============================================================
19 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED JUNE 30, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 5,463,468 $ 198,588,181 11,801,332 $ 396,822,488
Dividends and/or distributions reinvested 1,916,197 64,729,126 1,238,609 40,192,851
Redeemed (1,436,450) (52,012,445) (2,895,139) (96,940,974)
---------------------------------------------------------------
Net increase 5,943,215 $ 211,304,862 10,144,802 $ 340,074,365
===============================================================
- -----------------------------------------------------------------------------------------------------------------
CLASS 3 SHARES
Sold 261,620 $ 9,623,088 1,146,143 $ 39,045,508
Dividends and/or distributions reinvested 717,554 24,554,691 708,868 23,272,140
Redeemed (962,732) (35,453,742) 1 (1,466,336) (49,610,040) 2
---------------------------------------------------------------
Net increase (decrease) 16,442 $ (1,275,963) 388,675 $ 12,707,608
===============================================================
- -----------------------------------------------------------------------------------------------------------------
CLASS 4 SHARES
Sold 217,953 $ 7,901,353 850,052 $ 28,652,172
Dividends and/or distributions reinvested 210,681 7,118,909 194,164 6,300,609
Redeemed (170,171) (6,154,538) 1 (646,862) (21,525,258) 2
---------------------------------------------------------------
Net increase 258,463 $ 8,865,724 397,354 $ 13,427,523
===============================================================
1. Net of redemption fees of $8,900 and $2,212 for Class 3 and Class 4,
respectively.
2. Net of redemption fees of $22,231 and $22,178 for Class 3 and Class 4,
respectively.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
June 30, 2007, were as follows:
PURCHASES SALES
- --------------------------------------------------------------------------------
Investment securities $287,936,098 $306,504,107
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
---------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Over $800 million 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, 2007, the Fund paid
$19,969 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.
20 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FOR SERVICE SHARES AND CLASS 4 SHARES. The Fund
has adopted a Distribution and Service Plan (the "Plan") for Service shares 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 shares 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 shares 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 shares and Class
4 shares. The impact of the Service Plan is to increase operating expenses of
the Service shares 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.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended June 30, 2007, the Manager waived $34,377 for
IMMF management fees.
- --------------------------------------------------------------------------------
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, 2007, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. 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, 2007, the Fund had
on loan securities valued at $22,426,545, which are included in the Statement of
Assets and Liabilities as "Investments, at value" and, when applicable, as
"Receivable for Investments sold." Collateral of $23,441,552 was received for
the loans, all of which was received in cash and subsequently invested in
approved investments or held as cash.
21 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS) No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
22 | OPPENHEIMER GLOBAL SECURITIES FUND/VA
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in 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
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, 2007.
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
(1/1/07) (6/30/07) JUNE 30, 2007
- --------------------------------------------------------------------------------
Non-Service shares Actual $ 1,000.00 $1,093.80 $3.43
- --------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.52 3.31
- --------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,092.30 4.78
- --------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,020.23 4.62
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,
excluding affiliated fund indirect expenses, based on the 6-month period ended
June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- ------------------------------------
Non-Service shares 0.66%
- ------------------------------------
Service shares 0.92
The expense ratios reflect reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager that can be terminated at any time, without
advance notice. The "Financial Highlights" tables in the Fund's financial
statements, included in this report, also show the gross expense ratios, without
such waivers or reimbursements.
- --------------------------------------------------------------------------------
5 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--98.5%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--10.8%
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--2.0%
Las Vegas Sands Corp. 1 365,800 $ 27,943,462
- --------------------------------------------------------------------------------
Starbucks Corp. 1 534,100 14,014,784
----------------
41,958,246
- --------------------------------------------------------------------------------
MEDIA--2.2%
Comcast Corp., Cl. A Special, Non-Vtg. 1 1,201,450 33,592,542
- --------------------------------------------------------------------------------
XM Satellite Radio Holdings, Inc., Cl. A 1 1,184,000 13,935,680
----------------
47,528,222
- --------------------------------------------------------------------------------
MULTILINE RETAIL--2.7%
J.C. Penney Co., Inc. (Holding Co.) 407,800 29,516,564
- --------------------------------------------------------------------------------
Target Corp. 441,600 28,085,760
----------------
57,602,324
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--2.7%
Staples, Inc. 1,227,100 29,119,083
- --------------------------------------------------------------------------------
Tiffany & Co. 241,000 12,787,460
- --------------------------------------------------------------------------------
TJX Cos., Inc. (The) 559,400 15,383,500
----------------
57,290,043
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.2%
Polo Ralph Lauren Corp., Cl. A 271,100 26,597,621
- --------------------------------------------------------------------------------
CONSUMER STAPLES--7.0%
- --------------------------------------------------------------------------------
BEVERAGES--1.4%
Fomento Economico Mexicano SA de
CV, UBD 2,483,800 9,736,560
- --------------------------------------------------------------------------------
PepsiCo, Inc. 321,100 20,823,335
----------------
30,559,895
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--2.2%
Costco Wholesale Corp. 563,900 32,999,428
- --------------------------------------------------------------------------------
Sysco Corp. 458,470 15,124,925
----------------
48,124,353
- --------------------------------------------------------------------------------
FOOD PRODUCTS--2.1%
Cadbury Schweppes plc 1,326,530 18,049,159
- --------------------------------------------------------------------------------
Nestle SA 71,120 27,011,601
----------------
45,060,760
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--1.3%
Reckitt Benckiser plc 487,710 26,705,059
- --------------------------------------------------------------------------------
ENERGY--7.1%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--3.6%
Schlumberger Ltd. 546,100 46,385,734
- --------------------------------------------------------------------------------
Smith International, Inc. 532,800 31,243,392
----------------
77,629,126
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS--3.5%
Kinder Morgan Management LLC 1 184,495 $ 9,575,291
- --------------------------------------------------------------------------------
Occidental Petroleum Corp. 487,100 28,193,348
- --------------------------------------------------------------------------------
Range Resources Corp. 446,640 16,708,802
- --------------------------------------------------------------------------------
XTO Energy, Inc. 328,400 19,736,840
----------------
74,214,281
- --------------------------------------------------------------------------------
FINANCIALS--11.8%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--5.6%
Blackstone Group LP (The) 1 97,300 2,847,971
- --------------------------------------------------------------------------------
Fortress Investment Group LLC, Cl. A 216,984 5,168,559
- --------------------------------------------------------------------------------
Franklin Resources, Inc. 116,000 15,366,520
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 137,900 29,889,825
- --------------------------------------------------------------------------------
Legg Mason, Inc. 213,500 21,004,130
- --------------------------------------------------------------------------------
Northern Trust Corp. 259,000 16,638,160
- --------------------------------------------------------------------------------
UBS AG 494,197 29,542,626
----------------
120,457,791
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--1.5%
Chicago Mercantile Exchange (The) 60,300 32,221,908
- --------------------------------------------------------------------------------
INSURANCE--3.8%
American International Group, Inc. 496,350 34,759,391
- --------------------------------------------------------------------------------
Hartford Financial Services Group,
Inc. (The) 159,900 15,751,749
- --------------------------------------------------------------------------------
Prudential Financial, Inc. 311,600 30,296,868
----------------
80,808,008
- --------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT--0.9%
CB Richard Ellis Group, Inc., Cl. A 1 519,550 18,963,575
- --------------------------------------------------------------------------------
HEALTH CARE--12.7%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--2.7%
Celgene Corp. 1 313,300 17,961,489
- --------------------------------------------------------------------------------
Genentech, Inc. 1 279,900 21,177,234
- --------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 451,600 17,508,532
----------------
56,647,255
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.5%
Bard (C.R.), Inc. 85,990 7,105,354
- --------------------------------------------------------------------------------
St. Jude Medical, Inc. 1 401,700 16,666,533
- --------------------------------------------------------------------------------
Varian Medical Systems, Inc. 1 202,160 8,593,822
----------------
32,365,709
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--2.9%
Medco Health Solutions, Inc. 1 289,800 22,601,502
- --------------------------------------------------------------------------------
Schein (Henry), Inc. 1 221,340 11,826,196
- --------------------------------------------------------------------------------
WellPoint, Inc. 1 355,800 28,403,514
----------------
62,831,212
6 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES--2.0%
Covance, Inc. 1 221,327 $ 15,174,179
- --------------------------------------------------------------------------------
Thermo Fisher Scientific, Inc. 1 550,180 28,455,310
----------------
43,629,489
- --------------------------------------------------------------------------------
PHARMACEUTICALS--3.6%
Allergan, Inc. 222,700 12,836,428
- --------------------------------------------------------------------------------
Roche Holding AG 176,605 31,328,564
- --------------------------------------------------------------------------------
Schering-Plough Corp. 341,800 10,404,392
- --------------------------------------------------------------------------------
Shionogi & Co. Ltd. 479,000 7,819,614
- --------------------------------------------------------------------------------
Shire Pharmaceuticals Group plc 592,980 14,697,814
----------------
77,086,812
- --------------------------------------------------------------------------------
INDUSTRIALS--9.4%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--5.9%
Boeing Co. 418,820 40,273,731
- --------------------------------------------------------------------------------
Empresa Brasileira de Aeronautica SA,
ADR 301,200 14,520,852
- --------------------------------------------------------------------------------
General Dynamics Corp. 278,000 21,745,160
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 32,900 3,096,877
- --------------------------------------------------------------------------------
Rockwell Collins, Inc. 135,010 9,537,106
- --------------------------------------------------------------------------------
United Technologies Corp. 524,700 37,216,971
----------------
126,390,697
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--1.1%
Corporate Executive Board Co. (The) 280,150 18,184,537
- --------------------------------------------------------------------------------
Robert Half International, Inc. 136,560 4,984,440
----------------
23,168,977
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.9%
ABB Ltd. 841,617 18,938,602
- --------------------------------------------------------------------------------
MACHINERY--0.6%
Joy Global, Inc. 219,880 12,825,600
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.9%
Fastenal Co. 477,400 19,983,964
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--32.2%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--9.7%
Cisco Systems, Inc. 1 2,519,400 70,165,290
- --------------------------------------------------------------------------------
Corning, Inc. 1 1,523,800 38,933,090
- --------------------------------------------------------------------------------
F5 Networks, Inc. 1 169,500 13,661,700
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 614,100 26,645,799
- --------------------------------------------------------------------------------
Research in Motion Ltd. 1 170,600 34,118,294
- --------------------------------------------------------------------------------
Telefonaktiebolaget LM Ericsson,
Sponsored ADR 579,500 23,116,255
----------------
206,640,428
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--4.4%
Apple, Inc. 1 358,300 43,726,932
- --------------------------------------------------------------------------------
EMC Corp. 1 1,798,400 32,551,040
- --------------------------------------------------------------------------------
Network Appliance, Inc. 1 644,700 18,825,240
----------------
95,103,212
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--5.8%
eBay, Inc. 1 1,077,000 $ 34,657,860
- --------------------------------------------------------------------------------
Google, Inc., Cl. A 1 142,000 74,319,960
- --------------------------------------------------------------------------------
Yahoo!, Inc. 1 520,100 14,110,313
----------------
123,088,133
- --------------------------------------------------------------------------------
IT SERVICES--3.1%
Affiliated Computer Services, Inc.,
Cl. A 1 479,150 27,177,388
- --------------------------------------------------------------------------------
Automatic Data Processing, Inc. 502,020 24,332,909
- --------------------------------------------------------------------------------
Cognizant Technology Solutions Corp. 1 201,100 15,100,599
----------------
66,610,896
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.3%
ASML Holding NV 1 533,100 14,633,595
- --------------------------------------------------------------------------------
Broadcom Corp., Cl. A 1 796,600 23,300,550
- --------------------------------------------------------------------------------
Microchip Technology, Inc. 470,000 17,408,800
- --------------------------------------------------------------------------------
SiRF Technology Holdings, Inc. 1 180,040 3,734,030
- --------------------------------------------------------------------------------
Texas Instruments, Inc. 312,400 11,755,612
----------------
70,832,587
- --------------------------------------------------------------------------------
SOFTWARE--5.9%
Activision, Inc. 1 334,400 6,243,248
- --------------------------------------------------------------------------------
Adobe Systems, Inc. 1 608,200 24,419,230
- --------------------------------------------------------------------------------
Amdocs Ltd. 1 629,040 25,048,373
- --------------------------------------------------------------------------------
Autodesk, Inc. 1 592,200 27,880,776
- --------------------------------------------------------------------------------
Microsoft Corp. 716,100 21,103,467
- --------------------------------------------------------------------------------
Red Hat, Inc. 1 612,600 13,648,728
- --------------------------------------------------------------------------------
Salesforce.com, Inc. 1 205,100 8,790,586
----------------
127,134,408
- --------------------------------------------------------------------------------
MATERIALS--4.0%
- --------------------------------------------------------------------------------
CHEMICALS--3.5%
Monsanto Co. 668,100 45,123,474
- --------------------------------------------------------------------------------
Praxair, Inc. 426,300 30,689,337
----------------
75,812,811
- --------------------------------------------------------------------------------
METALS & MINING--0.5%
Allegheny Technologies, Inc. 93,110 9,765,377
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.5%
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--3.5%
America Movil SAB de CV, ADR,
Series L 323,100 20,009,583
- --------------------------------------------------------------------------------
American Tower Corp. 1 567,900 23,851,800
- --------------------------------------------------------------------------------
Crown Castle International Corp. 1 466,700 16,927,209
- --------------------------------------------------------------------------------
NII Holdings, Inc. 1 188,000 15,179,120
----------------
75,967,712
----------------
Total Common Stocks
(Cost $1,608,919,786) 2,110,545,093
7 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--0.3%
- --------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund,
Cl. E, 5.28% 2,3 (Cost $6,895,904) 6,895,904 $ 6,895,904
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $1,615,815,690) 98.8% 2,117,440,997
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.2 25,761,446
-------------------------------
NET ASSETS 100.0% $ 2,143,202,443
===============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Rate shown is the 7-day yield as of June 30, 2007.
3. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 2007, by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E 15,177,546 125,567,446 133,849,088 6,895,904
VALUE DIVIDEND
SEE NOTE 1 INCOME
- -------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E $ 6,895,904 $ 425,570
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- --------------------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $1,608,919,786) $ 2,110,545,093
Affiliated companies (cost $6,895,904) 6,895,904
-----------------
2,117,440,997
- --------------------------------------------------------------------------------------------------------------
Cash 52,247
- --------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 51,762,386
Interest and dividends 1,147,409
Shares of beneficial interest sold 955,548
Other 27,912
-----------------
Total assets 2,171,386,499
- --------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 24,101,276
Shares of beneficial interest redeemed 3,437,685
Distribution and service plan fees 311,834
Shareholder communications 272,484
Trustees' compensation 21,641
Transfer and shareholder servicing agent fees 2,121
Other 37,015
-----------------
Total liabilities 28,184,056
- --------------------------------------------------------------------------------------------------------------
NET ASSETS $ 2,143,202,443
=================
- --------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 47,489
- --------------------------------------------------------------------------------------------------------------
Additional paid-in capital 1,838,530,788
- --------------------------------------------------------------------------------------------------------------
Accumulated net investment income 366,104
- --------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (197,365,269)
- --------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 501,623,331
-----------------
NET ASSETS $ 2,143,202,443
=================
- --------------------------------------------------------------------------------------------------------------
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 $1,634,945,088 and 36,163,893 shares of beneficial interest outstanding) $ 45.21
- --------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on
net assets of $508,257,355 and 11,324,794 shares of beneficial interest outstanding) $ 44.88
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2007
- ---------------------------------------------------------------------------------------
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $402,506) $ 8,822,897
Affiliated companies 425,570
- ---------------------------------------------------------------------------------------
Interest 2,539
- ---------------------------------------------------------------------------------------
Portfolio lending fees 15,676
-------------
Total investment income 9,266,682
- ---------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------
Management fees 6,687,133
- ---------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 604,666
- ---------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,259
Service shares 5,073
- ---------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 120,781
Service shares 36,373
- ---------------------------------------------------------------------------------------
Trustees' compensation 21,833
- ---------------------------------------------------------------------------------------
Custodian fees and expenses 21,497
- ---------------------------------------------------------------------------------------
Administration service fees 750
- ---------------------------------------------------------------------------------------
Other 45,222
-------------
Total expenses 7,548,587
Less reduction to custodian expenses (589)
Less waivers and reimbursements of expenses (8,067)
-------------
Net expenses 7,539,931
- ---------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,726,751
- ---------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ---------------------------------------------------------------------------------------
Net realized gain on:
Investments 89,314,367
Foreign currency transactions 1,233,982
-------------
Net realized gain 90,548,349
- ---------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 97,219,005
Translation of assets and liabilities denominated in foreign currencies (1,039,359)
-------------
Net change in unrealized appreciation 96,179,646
- ---------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $188,454,746
=============
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, 2007 DECEMBER 31,
(UNAUDITED) 2006
- -------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------
Net investment income $ 1,726,751 $ 2,413,546
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain 90,548,349 29,967,822
- -------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 96,179,646 123,054,073
--------------------------------
Net increase in net assets resulting from operations 188,454,746 155,435,441
- -------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (3,712,463) (6,085,308)
Service shares (46,654) (772,510)
--------------------------------
(3,759,117) (6,857,818)
- -------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Non-Service shares (105,705,446) (169,765,856)
Service shares 2,105,708 49,160,827
--------------------------------
(103,599,738) (120,605,029)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
Total increase 81,095,891 27,972,594
- -------------------------------------------------------------------------------------------------------------------------
Beginning of period 2,062,106,552 2,034,133,958
--------------------------------
End of period (including accumulated net investment income of $366,104 and $2,398,470,
respectively) $2,143,202,443 $2,062,106,552
================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period $ 41.43 $ 38.52 $ 36.99 $ 34.70 $ 26.62 $ 36.58
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .05 1 .07 1 .18 1 .35 1,2 .12 .11
Net realized and
unrealized gain (loss) 3.83 2.98 1.68 2.05 8.07 (9.89)
---------------------------------------------------------------------------------------------------
Total from investment
operations 3.88 3.05 1.86 2.40 8.19 (9.78)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or
distributions to
shareholders:
Dividends from net
investment income (.10) (.14) (.33) (.11) (.11) (.18)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 45.21 $ 41.43 $ 38.52 $ 36.99 $ 34.70 $ 26.62
===================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET
ASSET VALUE 3 9.38% 7.95% 5.10% 6.93% 30.94% (26.86)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $1,634,945 $1,598,967 $1,652,282 $1,770,273 $1,715,240 $1,338,769
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $1,619,979 $1,615,352 $1,658,910 $1,708,511 $1,468,297 $1,630,430
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 4
Net investment income 0.22% 0.17% 0.47% 0.99% 2 0.39% 0.35%
Total expenses 0.66% 5,6,7 0.67% 5,6,7 0.66% 6 0.66% 6 0.67% 6 0.66% 6
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 28% 47% 70% 44% 48% 32%
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 less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.66%
Year Ended December 31, 2006 0.67
6. Reduction to custodian expenses less than 0.005%.
7. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $ 41.09 $ 38.23 $ 36.73 $ 34.53 $ 26.53 $ 36.56
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income
(loss) (.01) 1 (.03) 1 .08 1 .29 1,2 .08 .20
Net realized and
unrealized gain (loss) 3.80 2.96 1.69 1.99 8.02 (10.05)
-------------------------------------------------------------------------------------------------
Total from investment
operations 3.79 2.93 1.77 2.28 8.10 (9.85)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or
distributions to
shareholders:
Dividends from net
investment income -- 3 (.07) (.27) (.08) (.10) (.18)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $ 44.88 $ 41.09 $ 38.23 $ 36.73 $ 34.53 $ 26.53
=================================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET
ASSET VALUE 4 9.23% 7.68% 4.87% 6.62% 30.69% (27.09)%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $508,257 $463,140 $381,852 $248,649 $119,699 $18,260
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $487,998 $426,539 $301,780 $184,273 $ 48,178 $ 6,263
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net
assets: 5
Net investment income
(loss) (0.03)% (0.08)% 0.20% 0.85% 2 0.14% 0.26%
Total expenses 0.92% 6,7,8 0.92% 6,7,8 0.91% 7 0.91% 7 0.94% 7 0.81% 7,9
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 28% 47% 70% 44% 48% 32%
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. 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 less than one full year.
6. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.92%
Year Ended December 31, 2006 0.92
7. Reduction to custodian expenses less than 0.005%.
8. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
9. Voluntary waiver of transfer agent fees less than 0.005%.
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(R) 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. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. 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
14 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
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.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
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, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of $192,393,163 expiring by
2015. 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, 2007, it is estimated that the Fund will utilize
$90,548,349 of capital loss carryforward to offset realized capital gains.
During the fiscal year ended December 31, 2006, the Fund utilized $28,826,516 of
capital loss carryfor-ward to offset capital gains realized in that fiscal year.
As of December 31, 2006, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
EXPIRING
-----------------------------
2010 $ 54,487,309
2011 193,776,365
2013 34,677,838
---------------
Total $ 282,941,512
===============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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
15 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 compensation deferral 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.
- --------------------------------------------------------------------------------
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, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 1,582,024 $ 68,264,704 4,072,357 $ 160,034,277
Dividends and/or distributions reinvested 88,964 3,712,463 154,136 6,085,308
Redeemed (4,099,367) (177,682,613) (8,524,929) (335,885,441)
---------------------------------------------------------------
Net decrease (2,428,379) $ (105,705,446) (4,298,436) $ (169,765,856)
===============================================================
16 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
SIX MONTHS ENDED JUNE 30, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 883,851 $ 37,849,545 3,206,477 $ 125,342,151
Dividends and/or distributions reinvested 1,121 46,477 19,641 770,510
Redeemed (831,954) (35,790,314) (1,942,425) (76,951,834)
---------------------------------------------------------------
Net increase 53,018 $ 2,105,708 1,283,693 $ 49,160,827
===============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
June 30, 2007, were as follows:
PURCHASES SALES
---------------------------------------------------------
Investment securities $ 572,066,678 $ 682,775,246
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
-------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Over $800 million 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, 2007, the Fund paid
$9,981 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.
17 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended June 30, 2007, the Manager waived $8,067 for
IMMF management fees.
- --------------------------------------------------------------------------------
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, 2007, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. 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, 2007, the Fund had
no securities on loan.
- --------------------------------------------------------------------------------
7. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
18 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in 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, 2007.
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
(1/1/07) (6/30/07) JUNE 30, 2007
- --------------------------------------------------------------------------
Non-Service shares Actual $ 1,000.00 $ 1,039.70 $ 3.04
- --------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.82 3.01
- --------------------------------------------------------------------------
Service shares Actual 1,000.00 1,039.30 4.31
- --------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,020.58 4.27
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,
excluding affiliated fund indirect expenses, based on the 6-month period ended
June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------------------
Non-Service shares 0.60%
- -----------------------------------------
Service shares 0.85
The expense ratios reflect reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager that can be terminated at any time, without
advance notice. The "Financial Highlights" tables in the Fund's financial
statements, included in this report, also show the gross expense ratios, without
such waivers or reimbursements.
- --------------------------------------------------------------------------------
5 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--1.1%
- --------------------------------------------------------------------------------
Ace Securities Corp. Home Equity
Loan Trust, Asset-Backed
Pass-Through Certificates,
Series 2005-HE7, Cl. A2B, 5.50%,
11/25/35 1 $ 530,000 $ 530,449
- --------------------------------------------------------------------------------
Aesop Funding II LLC,
Automobile Asset-Backed
Certificates, Series 2005-1A,
Cl. A2, 5.38%, 4/20/08 1,2 200,000 200,100
- --------------------------------------------------------------------------------
Argent Securities Trust 2004-W8,
Asset-Backed Pass-Through
Certificates, Series 2004-W8,
Cl. A2, 5.80%, 5/25/34 1 924,857 928,651
- --------------------------------------------------------------------------------
Argent Securities Trust 2006-M3,
Asset-Backed Pass-Through
Certificates, Series 2006-M3,
Cl. A2B, 5.42%, 9/25/36 1,3 530,000 529,574
- --------------------------------------------------------------------------------
Argent Securities Trust 2006-W5,
Asset-Backed Pass-Through
Certificates, Series 2006-W5, Cl.
A2B, 5.42%, 5/26/36 1 810,000 810,003
- --------------------------------------------------------------------------------
BMW Vehicle Owner Trust
2006-A, Automobile Asset-Backed
Securities, Series 2006-A, Cl. A2,
5.30%, 5/26/09 836,533 836,961
- --------------------------------------------------------------------------------
Capital Auto Receivables Asset
Trust 2004-2, Automobile
Asset-Backed Securities,
Series 2004-2, Cl. A3, 3.58%,
1/15/09 678,310 675,323
- --------------------------------------------------------------------------------
Centex Home Equity Loan Trust
2006-A, Asset-Backed Certificates,
Series 2006-A, Cl. AV2, 5.42%,
5/16/36 1 1,180,000 1,180,734
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust
2005-WF2, Asset-Backed
Pass-Through Certificates,
Series 2005-WF2, Cl. AF2, 4.922%,
8/25/35 1 85,743 85,376
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust
2006-WFH3, Asset-Backed
Pass-Through Certificates,
Series 2006-WFH3, Cl. A2, 5.42%,
10/31/36 1,3 730,000 729,898
- --------------------------------------------------------------------------------
CWABS Asset-Backed Certificates
Trust 2005-16, Asset-Backed
Certificates, Series 2005-16,
Cl. 2AF2, 5.382%, 5/25/36 1 1,530,000 1,522,565
- --------------------------------------------------------------------------------
CWABS Asset-Backed Certificates
Trust 2005-17, Asset-Backed
Certificates:
Series 2005-17, Cl. 1AF1, 5.52%,
5/25/36 1 173,585 173,701
Series 2005-17, Cl. 1AF2,
5.363%, 5/25/36 1 250,000 248,814
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
CWABS Asset-Backed Certificates
Trust 2006-25, Asset-Backed
Certificates, Series 2006-25,
Cl. 2A2, 5.44%, 12/25/29 1 $ 1,050,000 $ 1,050,336
- --------------------------------------------------------------------------------
DaimlerChrysler Auto Trust,
Automobile Loan Pass-Through
Certificates, Series 2006-C, Cl. A2,
5.33%, 5/8/09 1,424,984 1,425,623
- --------------------------------------------------------------------------------
Embarcadero Aircraft
Securitization Trust, Airplane
Receivable Nts., Series 2000-A,
Cl. B, 8/15/25 3,4,5 1,820,063 18,201
- --------------------------------------------------------------------------------
First Franklin Mortgage Loan
Trust 2005-FF10, Mtg.
Pass-Through Certificates,
Series 2005-FF10, Cl. A3,
5.53%, 11/25/35 1 1,500,000 1,501,159
- --------------------------------------------------------------------------------
First Franklin Mortgage Loan
Trust 2006-FF10, Mtg.
Pass-Through Certificates,
Series 2006-FF10, Cl. A3, 5.41%,
7/25/36 1 1,000,000 1,000,346
- --------------------------------------------------------------------------------
First Franklin Mortgage Loan
Trust 2006-FF5, Mtg.
Pass-Through Certificates,
Series 2006-FF5, Cl. 2A1,
5.37%, 5/15/36 1 313,891 314,109
- --------------------------------------------------------------------------------
First Franklin Mortgage Loan
Trust 2006-FF9, Mtg.
Pass-Through Certificates,
Series 2006-FF9, Cl. 2A2,
5.43%, 7/7/36 1 430,000 430,218
- --------------------------------------------------------------------------------
Ford Credit Auto Owner Trust,
Automobile Loan Pass-Through
Certificates, Series 2005-A,
Cl. A3, 3.48%, 11/17/08 107,433 107,210
- --------------------------------------------------------------------------------
Household Home Equity Loan
Trust, Home Equity Loan
Pass-Through Certificates:
Series 2005-3, Cl. A1, 5.58%,
1/20/35 1 319,617 319,884
Series 2006-4, Cl. A2V, 5.43%,
3/20/36 1,3 440,000 440,147
- --------------------------------------------------------------------------------
Lehman XS Trust, Mtg.
Pass-Through Certificates:
Series 2005-10, Cl. 2A3B,
5.55%, 1/25/36 359,213 357,027
- --------------------------------------------------------------------------------
Series 2005-2, Cl. 2A1B, 5.18%,
8/25/35 1 253,886 253,621
Series 2005-4, Cl. 2A1B, 5.17%,
10/25/35 246,874 246,194
6 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Mastr Asset-Backed Securities
Trust 2006-WMC3, Mtg.
Pass-Through Certificates,
Series 2006-WMC3, Cl. A3,
5.42%, 8/25/36 1 $ 1,310,000 $ 1,310,467
- --------------------------------------------------------------------------------
Morgan Stanley ABS Capital I,
Mtg. Pass-Through Certificates,
Series 2005-WMC6, Cl. A2B,
5.58%, 7/25/35 1 247,860 248,127
- --------------------------------------------------------------------------------
NC Finance Trust, CMO
Pass-Through Certificates,
Series 1999-I, Cl. ECFD,
0.274%, 1/25/29 3 66,744 14,016
- --------------------------------------------------------------------------------
Option One Mortgage Loan
Trust, Asset-Backed Certificates,
Series 2006-2, Cl. 2A2,
5.42%, 7/1/36 1 1,420,000 1,420,709
- --------------------------------------------------------------------------------
Popular ABS Mortgage
Pass-Through Trust 2005-2,
Mtg. Pass-Through Certificates,
Series 2005-2, Cl. AF2,
4.415%, 4/25/35 1 102,630 102,273
- --------------------------------------------------------------------------------
Popular ABS Mortgage
Pass-Through Trust 2005-6,
Mtg. Pass-Through Certificates,
Series 2005-6, Cl. A3,
5.68%, 1/25/36 1 400,000 398,841
- --------------------------------------------------------------------------------
RAMP Series 2004-RS7 Trust,
Mtg. Asset-Backed Pass-Through
Certificates, Series 2004-RS7,
Cl. AI32, 4.45%, 7/25/28 193,564 192,620
- --------------------------------------------------------------------------------
RAMP Series 2006-RS4 Trust,
Mtg. Asset-Backed Pass-Through
Certificates, Series 2006-RS4,
Cl. A1, 5.40%, 7/25/36 1 370,248 370,496
- --------------------------------------------------------------------------------
RASC Series 2006-KS7 Trust,
Home Equity Mtg. Asset-Backed
Pass-Through Certificates,
Series 2006-KS7, Cl. A2,
5.42%, 9/25/36 1 1,070,000 1,070,544
- --------------------------------------------------------------------------------
Specialty Underwriting &
Residential Finance Trust,
Home Equity Asset-Backed
Obligations, Series 2005-BC3,
Cl. A2B, 5.57%, 6/25/36 1 2,320,321 2,322,982
- --------------------------------------------------------------------------------
Start CLO Ltd., Asset-Backed
Credit Linked Securities,
Series 2006-3A, Cl. F, 22.36%,
6/7/11 1,3 950,000 950,000
- --------------------------------------------------------------------------------
Structured Asset Investment
Loan Trust, Mtg. Pass-Through
Certificates, Series 2006-2,
Cl. A1, 5.38%, 4/25/36 1 915,311 915,726
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES Continued
- --------------------------------------------------------------------------------
Structured Asset Securities
Corp., Mtg. Pass-Through
Certificates, Series 2005-4XS,
Cl. 3A1, 5.18%, 3/26/35 $ 216,092 $ 216,189
- --------------------------------------------------------------------------------
Taganka Car Loan Finance plc,
Automobile Asset-Backed
Certificates, Series 2006-1A, Cl. C,
8.62%, 11/14/13 1,3 655,000 655,000
- --------------------------------------------------------------------------------
Wells Fargo Home Equity
Asset-Backed Securities 2006-2
Trust, Home Equity Asset-Backed
Certificates, Series 2006-2, Cl.
A2, 5.42%, 7/25/36 1 1,000,000 1,000,335
---------------
Total Asset-Backed Securities
(Cost $28,963,653) 27,104,549
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--19.0%
- --------------------------------------------------------------------------------
Banc of America Commercial
Mortgage, Inc., Commercial Mtg.
Pass-Through Certificates:
Series 2005-3, Cl. A2,
4.501%, 7/10/43 690,000 672,045
Series 2006-5, Cl. A2, 5.348%,
10/10/11 1,700,000 1,678,595
- --------------------------------------------------------------------------------
Banc of America Funding Corp.,
CMO Pass-Through Certificates,
Series 2004-2, Cl. 2A1,
6.50%, 7/20/32 414,850 418,504
- --------------------------------------------------------------------------------
Banc of America Mortgage
Securities, Inc., CMO
Pass-Through Certificates,
Series 2004-8, Cl. 5A1,
6.50%, 5/25/32 338,617 338,669
- --------------------------------------------------------------------------------
ChaseFlex Trust 2006-2, Multiclass
Mtg. Pass-Through Certificates,
Series 2006-2, Cl. A1B,
5.42%, 8/25/08 1 487,772 488,203
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust
2006-WF1, Asset-Backed
Pass-Through Certificates,
Series 2006-WF1, Cl. A2B,
5.536%, 3/1/36 260,000 259,026
- --------------------------------------------------------------------------------
Citigroup/Deutsche Bank
Commercial Mortgage Trust,
Commercial Mtg. Obligations,
Series 2007-CD4, Cl. A2B,
5.205%, 12/11/49 3 2,710,000 2,662,013
- --------------------------------------------------------------------------------
Countrywide Alternative Loan
Trust, CMO, Series 2005-J1,
Cl. 3A1, 6.50%, 8/25/32 1,340,534 1,344,932
- --------------------------------------------------------------------------------
Countrywide Alternative Loan
Trust, Mtg. Pass-Through
Certificates, Series 2007-8CB,
Cl. A1, 5.50%, 5/25/37 6,204,782 6,139,804
7 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Deutsche Alt-A Securities
Mortgage Loan Trust, Mtg.
Pass-Through Certificates:
Series 2006-AB1, Cl. A2A,
5.50%, 2/25/36 $ 1,316,954 $ 1,312,088
Series 2006-AB2, Cl. A1,
5.888%, 6/25/36 2,514,600 2,508,827
Series 2006-AB2, Cl. A7,
5.961%, 6/25/36 976,206 974,423
Series 2006-AB3, Cl. A7,
6.36%, 4/25/08 320,300 320,085
Series 2006-AB4, Cl. A1A,
6.005%, 10/25/36 2,284,383 2,284,364
- --------------------------------------------------------------------------------
DLJ Commercial Mortgage Corp.,
Commercial Mtg. Pass-Through
Certificates, Series 1998-CF2,
Cl. A1B, 6.24%, 11/12/31 1,548,427 1,558,600
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp.:
4.50%, 12/1/18-7/1/19 4,207,555 4,010,246
5%, 9/1/33 3,567,673 3,362,239
6%, 5/1/18-1/1/32 5,752,995 5,769,883
6.50%, 3/1/18-6/1/35 7,640,886 7,805,373
7%, 3/1/31-10/1/31 526,933 544,047
7.50%, 4/1/36 1,701,458 1,780,540
11%, 11/1/14 13,171 13,641
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., CMO Gtd. Multiclass Mtg.
Participation Certificates:
Series 1897, Cl. K, 7%, 9/15/26 2,315,674 2,359,389
Series 2191, Cl. MF, 5.92%,
12/17/27 1 37,679 37,717
Series 2410, Cl. PF, 6.30%, 2/15/32 1 3,707,181 3,819,702
Series 2435, Cl. EQ, 6%, 5/15/31 1,974,265 1,984,273
Series 2453, Cl. BD, 6%, 5/15/17 331,225 334,148
Series 2641, Cl. CE, 3.50%, 9/15/25 1,022,438 997,656
Series 2727, Cl. UA, 3.50%,
10/15/22 539,569 531,031
Series 2736, Cl. DB, 3.30%, 11/15/26 4,462,357 4,323,065
Series 2777, Cl. PJ, 4%, 5/15/24 571,177 563,570
Series 2934, Cl. NA, 5%, 4/15/24 1,525,613 1,516,312
Series 3094, Cl. HS, 4.877%,
6/15/34 1 582,097 534,462
Series 3105, Cl. BD, 5.50%, 1/15/26 1,500,000 1,445,702
Series 3138, Cl. PA, 5.50%, 2/15/27 6,078,820 6,073,629
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., CMO Gtd. Real Estate Mtg.
Investment Conduit Multiclass
Pass-Through Certificates:
Series 1360, Cl. PZ, 7.50%, 9/15/22 2,055,909 2,109,554
Series 1674, Cl. Z, 6.75%, 2/15/24 1,483,949 1,523,615
Series 2002-66, Cl. FG, 6.32%,
9/25/32 1 2,532,737 2,579,309
Series 2002-84, Cl. FB, 6.32%,
12/25/32 1 2,532,739 2,626,232
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 2003-11, Cl. FA,
6.32%, 9/25/32 1 $ 2,532,655 $ 2,626,151
Series 2006-11, Cl. PS, 5.06%,
3/25/36 1 845,518 782,823
Series 2043, Cl. ZP, 6.50%, 4/15/28 1,036,402 1,030,107
Series 2055, Cl. ZM, 6.50%, 5/15/28 184,287 186,841
Series 2080, Cl. Z, 6.50%, 8/15/28 117,580 119,516
Series 2106, Cl. FG, 5.77%,
12/15/28 1 2,608,938 2,638,700
Series 2116, Cl. ZA, 6%, 1/15/29 1,021,042 1,023,732
Series 2135, Cl. OH, 6.50%, 3/15/29 1,516,184 1,544,436
Series 2173, Cl. Z, 6.50%, 7/15/29 882,482 899,829
Series 2195, Cl. LH, 6.50%, 10/15/29 1,092,682 1,107,166
Series 2326, Cl. ZP, 6.50%, 6/15/31 191,762 195,175
Series 2344, Cl. FP, 6.27%, 8/15/31 1 787,255 811,082
Series 2368, Cl. PR, 6.50%, 10/15/31 755,353 769,167
Series 2387, Cl. PD, 6%, 4/15/30 24,989 24,968
Series 2412, Cl. GF, 6.27%, 2/15/32 1 1,820,867 1,874,314
Series 2449, Cl. FL, 5.87%, 1/15/32 1 1,024,663 1,040,424
Series 2451, Cl. FD, 6.32%, 3/15/32 1 581,398 599,020
Series 2461, Cl. PZ, 6.50%, 6/15/32 1,604,068 1,643,442
Series 2464, Cl. FI, 6.32%, 2/15/32 1 587,997 609,602
Series 2470, Cl. AF, 6.32%, 3/15/32 1 997,884 1,029,313
Series 2470, Cl. LF, 6.32%, 2/15/32 1 601,730 624,780
Series 2471, Cl. FD, 6.32%, 3/15/32 1 1,094,645 1,133,732
Series 2477, Cl. FZ, 5.87%, 6/15/31 1 2,245,931 2,281,441
Series 2500, Cl. FD, 5.82%, 3/15/32 1 57,598 58,388
Series 2517, Cl. GF, 6.32%, 2/15/32 1 523,173 542,215
Series 2526, Cl. FE, 5.72%, 6/15/29 1 84,726 85,562
Series 2551, Cl. FD, 5.72%, 1/15/33 1 65,984 66,657
Series 2676, Cl. KY, 5%, 9/15/23 3,843,000 3,587,009
Series 2939, Cl. PE, 5%, 2/15/35 1,585,000 1,437,035
Series 3025, Cl. SJ, 5.243%, 8/15/35 1 1,063,866 989,367
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., CMO Pass-Through
Participation Certificates,
Series 151, Cl. F, 9%, 5/15/21 48,851 48,767
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 177, Cl. IO, 14.797%, 7/1/26 6 219,582 57,682
Series 192, Cl. IO, 14.92%, 2/1/28 6 57,151 14,380
Series 200, Cl. IO, 13.553%, 1/1/29 6 68,207 18,656
Series 2003-118, Cl. S, 10.134%,
12/25/33 6 1,438,901 170,303
Series 2003-13, Cl. IO, 11.937%,
3/25/33 6 1,252,246 338,216
Series 2003-26, Cl. DI, 6.432%,
4/25/33 6 972,343 257,105
Series 2005-87, Cl. SE, 8.381%,
10/25/35 6 13,616,198 338,071
8 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., Interest-Only Stripped
Mtg.-Backed Security:
Continued
Series 2005-87, Cl. SG,
12.46%, 10/25/35 6 $ 3,655,171 $ 168,754
Series 205, Cl. IO, 11.432%,
9/1/29 6 291,060 79,364
Series 2074, Cl. S, 1.375%,
7/17/28 6 72,783 7,053
Series 2079, Cl. S, 1.829%,
7/17/28 6 118,294 12,067
Series 208, Cl. IO, (15.964)%,
6/1/30 6 327,678 86,921
Series 2136, Cl. SG, 9.70%,
3/15/29 6 3,152,840 204,756
Series 216, Cl. IO, 13.611%,
12/1/31 6 310,293 79,976
Series 2177, Cl. S, 9.314%,
8/15/29 6 3,513,393 307,985
Series 224, Cl. IO, 10.644%,
3/1/33 6 2,249,747 581,976
Series 2399, Cl. SG, 7.784%,
12/15/26 6 1,905,804 148,898
Series 243, Cl. 6, 8.611%,
12/15/32 6 913,297 235,876
Series 2437, Cl. SB, 11.815%,
4/15/32 6 5,593,382 424,963
Series 2526, Cl. SE, 2.574%,
6/15/29 6 158,400 8,649
Series 2802, Cl. AS, 4.498%,
4/15/33 6 1,589,585 76,709
Series 2920, Cl. S, (1.289)%,
1/15/35 6 1,290,921 51,021
Series 3000, Cl. SE, (3.03)%,
7/15/25 6 1,491,903 36,847
Series 3110, Cl. SL, 6.09%,
2/15/26 6 820,477 21,267
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., Principal-Only Stripped
Mtg.-Backed Security:
Series 192, Cl. PO, 5.708%, 2/1/28 7 57,151 44,012
Series 224, Cl. PO, 4.438%, 3/1/33 7 769,222 563,939
- --------------------------------------------------------------------------------
Federal National Mortgage
Assn.:
4.50%, 5/1/18-12/1/20 32,865,010 31,308,502
5%, 12/1/17-3/1/34 53,289,953 50,957,162
5%, 7/1/22 8 5,037,000 4,867,787
5.50%, 3/1/33-1/1/34 21,537,510 20,870,890
5.50%, 7/1/22-8/1/37 8 65,131,000 62,876,632
6%, 10/1/16-4/1/33 17,414,514 17,363,817
6%, 7/1/22-7/1/37 8 31,992,000 31,910,399
6.50%, 3/1/17-1/1/34 16,493,395 16,843,056
7%, 11/1/17-6/1/34 8,188,842 8,489,808
7%, 7/1/37 8 1,180,000 1,211,713
7.50%, 2/1/27-3/1/33 4,882,151 5,110,909
8.50%, 7/1/32 7,179 7,719
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 1999-54, Cl. LH,
6.50%, 11/25/29 $ 1,132,842 $ 1,154,290
Trust 2001-44, Cl. QC, 6%,
9/25/16 2,404,073 2,422,243
Trust 2001-50, Cl. NE, 6%,
8/25/30 20,186 20,146
Trust 2001-51, Cl. OD, 6.50%,
10/25/31 570,269 580,574
Trust 2001-69, Cl. PF, 6.32%,
12/25/31 1 1,260,000 1,289,120
Trust 2001-70, Cl. LR, 6%, 9/25/30 52,413 52,458
Trust 2001-74, Cl. PD, 6%, 5/25/30 416 415
Trust 2001-80, Cl. ZB, 6%, 1/25/32 1,445,418 1,443,853
Trust 2001-82, Cl. ZA, 6.50%,
1/25/32 538,367 548,844
Trust 2002-12, Cl. PG, 6%, 3/25/17 1,010,604 1,018,370
Trust 2002-29, Cl. F, 6.32%, 4/25/32 1 639,577 661,709
Trust 2002-56, Cl. KW, 6%, 4/25/23 2,810,000 2,823,884
Trust 2002-60, Cl. FH, 6.32%,
8/25/32 1 1,332,396 1,377,825
Trust 2002-64, Cl. FJ, 6.32%,
4/25/32 1 196,947 202,127
Trust 2002-68, Cl. FH, 5.82%,
10/18/32 1 455,918 462,824
Trust 2002-9, Cl. PC, 6%, 3/25/17 1,057,147 1,065,212
Trust 2002-9, Cl. PR, 6%, 3/25/17 1,294,426 1,304,301
Trust 2002-90, Cl. FH, 5.82%,
9/25/32 1 1,466,723 1,482,071
Trust 2003-116, Cl. FA, 5.72%,
11/25/33 1 168,105 169,567
Trust 2003-17, Cl. EQ, 5.50%,
3/25/23 1,452,000 1,374,601
Trust 2003-23, Cl. EQ, 5.50%,
4/25/23 2,883,000 2,727,451
Trust 2003-81, Cl. NB, 4.50%,
11/25/14 3,160,000 3,098,651
Trust 2003-81, Cl. PW, 4%, 3/25/25 1,190,169 1,169,967
Trust 2003-84, Cl. AJ, 3%, 4/25/13 1,386,019 1,364,161
Trust 2003-84, Cl. GC, 4.50%,
5/25/15 3,790,000 3,716,503
Trust 2003-84, Cl. PW, 3%, 6/25/22 2,664,785 2,627,348
Trust 2004-101, Cl. BG, 5%, 1/25/20 630,000 607,843
Trust 2004-52, Cl. JR, 4.50%,
7/25/24 2,252,536 2,228,637
Trust 2005-100, Cl. BQ, 5.50%,
11/25/25 520,000 494,935
Trust 2005-109, Cl. AH, 5.50%,
12/25/25 2,160,000 2,034,832
Trust 2005-31, Cl. PB, 5.50%,
4/25/35 560,000 537,127
Trust 2005-71, Cl. DB, 4.50%,
8/25/25 480,000 431,605
Trust 2006-44, Cl. OA, 5.50%,
12/25/26 2,169,011 2,164,527
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., CMO Gtd. Real Estate
Mtg. Investment Conduit
Pass-Through Certificates:
Continued
Trust 2006-46, Cl. SW, 4.693%,
6/25/36 1 $ 1,445,129 $ 1,291,206
Trust 2006-50, Cl. KS, 4.693%,
6/25/36 1 624,937 540,094
Trust 2006-50, Cl. SA, 4.693%,
6/25/36 1 424,923 367,051
Trust 2006-50, Cl. SK, 4.693%,
6/25/36 1 1,564,416 1,396,277
Trust 2006-57, Cl. PA, 5.50%,
8/25/27 2,417,844 2,412,426
- --------------------------------------------------------------------------------
Federal National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security:
Trust 2001-61, Cl. SH, 10.498%,
11/18/31 6 743,360 74,015
Trust 2001-63, Cl. SD, 3.511%,
12/18/31 6 169,182 15,316
Trust 2001-68, Cl. SC, 2.854%,
11/25/31 6 116,720 11,527
Trust 2001-81, Cl. S, 4.492%,
1/25/32 6 137,841 13,131
Trust 2002-28, Cl. SA, 4.263%,
4/25/32 6 81,321 7,190
Trust 2002-38, Cl. IO, (1.166)%,
4/25/32 6 398,748 19,335
Trust 2002-48, Cl. S, 3.849%,
7/25/32 6 130,313 12,177
Trust 2002-52, Cl. SL, 4.651%,
9/25/32 6 81,714 7,936
Trust 2002-56, Cl. SN, 5.551%,
7/25/32 6 179,067 17,034
Trust 2002-77, Cl. IS, 3.815%,
12/18/32 6 679,349 59,301
Trust 2002-77, Cl. SH, 5.516%,
12/18/32 6 179,489 16,302
Trust 2002-9, Cl. MS, 4.635%,
3/25/32 6 173,733 17,258
Trust 2003-33, Cl. SP, 13.322%,
5/25/33 6 1,179,567 126,053
Trust 2003-4, Cl. S, 10.467%,
2/25/33 6 360,766 36,283
Trust 2005-105, Cl. S, 11.958%,
12/25/35 6 3,497,336 158,507
Trust 2005-40, Cl. SA, (0.14)%,
5/25/35 6 3,663,271 144,738
Trust 2005-40, Cl. SB, 6.925%,
5/25/35 6 5,866,686 233,100
Trust 2005-63, Cl. SA, 10.798%,
10/25/31 6 284,482 13,143
Trust 2005-71, Cl. SA, 2.929%,
8/25/25 6 945,657 43,835
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
Federal National Mortgage
Assn., Interest-Only Stripped
Mtg.-Backed Security:
Continued
Trust 2005-83, Cl. SL, 10.362%,
10/25/35 6 $ 5,134,372 $ 229,628
Trust 2005-85, Cl. SA, 8.367%,
10/25/35 6 14,076,738 350,792
Trust 2006-119, Cl. MS,
11.242%, 12/25/36 6 2,787,313 126,510
Trust 2006-33, Cl. SP, 14.61%,
5/25/36 6 3,242,128 240,008
Trust 2006-34, Cl. SK, 14.398%,
5/25/36 6 5,858,976 446,006
Trust 2006-90, Cl. SX, 14.776%,
9/25/36 6 3,585,386 185,353
Trust 214, Cl. 2, 19.691%, 3/1/23 6 896,243 212,638
Trust 221, Cl. 2, 15.229%, 5/1/23 6 97,749 23,144
Trust 240, Cl. 2, 24.597%, 9/1/23 6 187,318 49,727
Trust 254, Cl. 2, 8.508%, 1/1/24 6 1,499,640 415,846
Trust 2682, Cl. TQ, 15.633%,
10/15/33 6 1,348,635 67,091
Trust 2981, Cl. BS, 14.587%,
5/15/35 6 2,550,398 100,900
Trust 301, Cl. 2, 8.647%, 4/1/29 6 406,646 107,553
Trust 313, Cl. 2, (10.228)%,
6/1/31 6 431,641 111,030
Trust 319, Cl. 2, 14.215%, 2/1/32 6 132,532 35,087
Trust 321, Cl. 2, 14.63%, 4/1/32 6 588,093 155,381
Trust 324, Cl. 2, 8.848%, 7/1/32 6 1,024,131 270,780
Trust 331, Cl. 5, 9.245%, 2/1/33 6 2,239,484 577,011
Trust 334, Cl. 12, 5.34%, 2/1/33 6 1,906,416 480,524
Trust 334, Cl. 5, 11.409%, 5/1/33 6 1,282,068 321,787
Trust 339, Cl. 7, 5.98%, 7/1/33 6 8,977,460 2,196,670
Trust 342, Cl. 2, 12.236%, 9/1/33 6 8,778,406 2,297,586
Trust 344, Cl. 2, 10.514%, 12/1/33 6 6,422,302 1,684,033
Trust 345, Cl. 9, 8.846%, 1/1/34 6 2,235,781 553,451
Trust 346, Cl. 2, 13.179%, 12/1/33 6 4,549,524 1,193,122
Trust 350, Cl. 2, 11.319%, 3/1/34 6 9,018,123 2,364,112
Trust 362, Cl. 12, 6.754%, 8/1/35 6 1,384,066 319,946
Trust 362, Cl. 13, 6.737%, 8/1/35 6 825,755 190,505
- --------------------------------------------------------------------------------
First Union National
Bank/Lehman Brothers/Bank
of America Commercial Mtg.
Trust, Pass-Through
Certificates, Series 1998-C2,
Cl. A2, 6.56%, 11/18/35 796,232 799,843
- --------------------------------------------------------------------------------
GE Capital Commercial
Mortgage Corp., Commercial
Mtg. Obligations:
Series 2004-C3, Cl. A2,
4.433%, 7/10/39 390,000 382,718
Series 2005-C3, Cl. A2,
4.853%, 7/10/45 430,000 423,049
10 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
GMAC Commercial Mortgage
Securities, Inc., Commercial
Mtg. Pass-Through Certificates,
Series 1998-C1, Cl. F, 7.206%,
5/15/30 1 $ 1,567,000 $ 1,589,815
- --------------------------------------------------------------------------------
Government National
Mortgage Assn.:
6.125%, 11/20/25 1 8,921 9,034
7%, 3/15/28-7/15/28 444,966 464,002
7.50%, 2/15/27 45,443 47,642
8%, 11/15/25-5/15/26 106,853 113,328
- --------------------------------------------------------------------------------
Government National
Mortgage Assn., CMO,
Series 2001-62, Cl. KZ, 6.50%,
12/16/31 2,661,057 2,702,629
- --------------------------------------------------------------------------------
Government National
Mortgage Assn., CMO
Gtd. Real Estate Mtg.
Investment Conduit
Pass-Through Certificates:
Series 1999-32, Cl. ZB, 8%, 9/16/29 1,870,017 1,970,576
Series 2000-12, Cl. ZA, 8%, 2/16/30 4,489,813 4,735,207
- --------------------------------------------------------------------------------
Government National
Mortgage Assn., Interest-Only
Stripped Mtg.-Backed Security:
Series 1998-19, Cl. SB, (0.28)%,
7/16/28 6 235,434 24,116
Series 1998-6, Cl. SA, (0.724)%,
3/16/28 6 143,707 13,129
Series 2001-21, Cl. SB, (3.257)%,
1/16/27 6 1,125,886 75,423
Series 2006-47, Cl. SA, 14.941%,
8/16/36 6 2,210,855 110,533
- --------------------------------------------------------------------------------
Greenwich Capital
Commercial Funding Corp.,
Commercial Mtg.
Pass-Through Certificates:
Series 2005-GG3, Cl. A2,
4.305%, 8/10/42 500,000 487,402
Series 2005-GG5, Cl. A2,
5.117%, 4/10/37 1,725,000 1,706,922
Series 2007-GG9, Cl. A2,
5.381%, 3/10/39 3 1,990,000 1,968,293
- --------------------------------------------------------------------------------
GS Mortgage Securities
Corp. II, Commercial Mtg.
Obligations, Series 2006-GG8,
Cl. A2, 5.479%, 11/10/39 1 1,702,000 1,693,034
- --------------------------------------------------------------------------------
Ice Em CLO, CLO:
Series 2007-1A, Cl. C, 8/15/22 1,3,8 5,270,000 5,270,000
Series 2007-1A, Cl. D, 8/15/22 1,3,8 5,270,000 5,270,000
- --------------------------------------------------------------------------------
JP Morgan Mortgage Trust,
CMO Pass-Through Certificates,
Series 2005-S2, Cl. 3A1, 6.726%,
2/25/32 1 1,991,952 1,998,093
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
JPMorgan Chase Commercial
Mortgage Securities Corp.,
Commercial Mtg.
Pass-Through Certificates:
Series 2005-LDP2, Cl. A2,
4.575%, 7/15/42 $ 160,000 $ 156,127
Series 2005-LDP4, Cl. A2,
4.79%, 10/15/42 2,225,000 2,181,723
Series 2007-LDPX, Cl. A2S,
5.305%, 1/15/49 2,380,000 2,341,986
- --------------------------------------------------------------------------------
LB-UBS Commercial
Mortgage Trust, Commercial
Mtg. Pass-Through Certificates:
Series 2005-C5, Cl. A2, 4.885%,
9/15/30 520,000 512,768
Series 2007-C1, Cl. A2,
5.318%, 1/15/12 2,210,000 2,182,956
- --------------------------------------------------------------------------------
Mastr Alternative Loan
Trust, CMO Pass-Through
Certificates:
Series 2004-6, Cl. 10A1, 6%,
7/25/34 505,623 501,058
Series 2004-9, Cl. A3, 4.70%,
8/25/34 1 138,971 138,413
- --------------------------------------------------------------------------------
Morgan Stanley Capital I
Trust, Commercial Mtg.
Pass-Through Certificates,
Series 1997-XL1, Cl. G,
7.695%, 10/3/30 390,000 375,035
- --------------------------------------------------------------------------------
Nomura Asset Securities
Corp., Commercial Mtg.
Pass-Through Certificates,
Series 1998-D6, Cl. A1B,
6.59%, 3/15/30 3,352,707 3,374,613
- --------------------------------------------------------------------------------
Prudential Mortgage Capital
Co. II LLC, Commercial Mtg.
Pass-Through Certificates,
Series PRU-HTG 2000-C1,
Cl. A2, 7.306%, 10/6/15 3 556,000 591,966
- --------------------------------------------------------------------------------
RALI Series 2006-QS13 Trust:
Mtg. Asset-Backed
Pass-Through Certificates,
Series 2006-QS13, Cl. 1A5,
6%, 9/25/36 4,701,837 4,708,870
- --------------------------------------------------------------------------------
Mtg. Asset-Backed
Pass-Through Certificates,
Series 2006-QS13, Cl. 1A8,
6%, 9/25/36 1,329,238 1,326,847
- --------------------------------------------------------------------------------
RALI Series 2006-QS5 Trust,
Mtg. Asset-Backed
Pass-Through Certificates,
Series 2006-QS5, Cl. 2A2,
6%, 4/25/08 1,021,136 1,019,469
11 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS Continued
- --------------------------------------------------------------------------------
RALI Series 2007-QS6 Trust,
Mtg. Asset-Backed
Pass-Through Certificates,
Series 2007-QS6, Cl. A114,
5.75%, 4/25/37 $ 2,045,462 $ 2,032,671
- --------------------------------------------------------------------------------
Residential Asset Securitization
Trust 2006-A9CB, CMO
Pass-Through Certificates,
Series 2006-A9CB, Cl. A5, 6%,
9/25/36 1,486,143 1,482,812
- --------------------------------------------------------------------------------
Wachovia Bank Commercial
Mortgage Trust 2005-C17,
Commercial Mtg. Pass-Through
Certificates, Series 2005-C17,
Cl. A2, 4.782%, 3/15/42 820,000 807,285
- --------------------------------------------------------------------------------
Wachovia Bank Commercial
Mortgage Trust 2006-C29,
Commercial Mtg. Pass-Through
Certificates, Series 2006-C29,
Cl. A2, 5.272%, 11/15/48 2,997,000 2,952,517
- --------------------------------------------------------------------------------
WAMU Mortgage
Pass-Through Certificates:
Series 2005-AR5 Trust,
Series 2005-AR5, Cl. A1,
4.676%, 5/25/35 1 34,044 34,060
Series 2005-AR8 Trust,
Series 2005-AR8, Cl. 2AB1,
5.57%, 7/25/45 1 108,224 108,328
---------------
Total Mortgage-Backed
Obligations
(Cost $494,330,798) 490,851,883
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--11.2%
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp. Unsec. Nts.:
5.208%, 2/4/08 9 10,880,000 10,551,108
3.375%, 4/15/09 38,125,000 36,957,308
4.125%, 7/12/10 10 2,066,000 2,005,892
4.75%, 4/24/09 51,485,000 51,111,476
5%, 6/11/09 10 36,060,000 35,944,644
5.50%, 8/20/12 32,470,000 32,587,541
- --------------------------------------------------------------------------------
Federal National Mortgage
Assn. Unsec. Nts.:
4.25%, 7/15/07 10 2,198,000 2,197,057
5%, 10/15/11-5/11/17 10 13,135,000 12,917,768
5.125%, 4/15/11 10 6,750,000 6,731,235
6%, 5/15/11 10,11 17,875,000 18,361,111
7.25%, 1/15/10 5,077,000 5,324,245
- --------------------------------------------------------------------------------
Resolution Funding Corp.
Bonds, Residual Funding
STRIPS, 5.26%, 1/15/21 9,10 5,667,000 2,737,988
- --------------------------------------------------------------------------------
U.S. Treasury Bonds:
4.50%, 2/15/36 10 50,000 45,289
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS Continued
- --------------------------------------------------------------------------------
U.S. Treasury Bonds: Continued
STRIPS, 4.201%, 2/15/11 9,10,11 $ 900,000 $ 757,755
STRIPS, 4.249%, 2/15/16 9,10,11 4,491,000 2,914,434
- --------------------------------------------------------------------------------
U.S. Treasury Nts., 4.50%, 3/31/09 10 69,450,000 68,967,114
---------------
Total U.S. Government
Obligations
(Cost $291,441,963) 290,111,965
- --------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--21.4%
- --------------------------------------------------------------------------------
ARGENTINA--1.4%
Argentina (Republic of) Bonds:
2%, 9/30/14 [ARP] 1,802,000 652,656
5.475%, 8/3/12 1 7,497,000 7,102,036
7%, 10/3/15 1,270,000 1,148,398
Series V, 7%, 3/28/11 10,485,000 10,248,358
Series VII, 7%, 9/12/13 11,595,000 11,071,776
- --------------------------------------------------------------------------------
Central Bank of Argentina
Bonds, 2%, 2/4/18 [ARP] 12,002,240 5,698,347
- --------------------------------------------------------------------------------
Neuquen (Province Del) Sr.
Sec. Nts., 8.656%, 10/18/14 2 1,635,000 1,655,438
---------------
37,577,009
- --------------------------------------------------------------------------------
AUSTRALIA--1.1%
New South Wales Treasury
Corp. Gtd. Bonds, 8%,
3/1/08 [AUD] 24,035,000 20,585,083
- --------------------------------------------------------------------------------
New South Wales Treasury
Corp. Sr. Unsec. Nts.,
Series 17RG, 5.50%, 3/1/17 [AUD] 9,545,000 7,451,941
---------------
28,037,024
- --------------------------------------------------------------------------------
BELGIUM--0.6%
Belgium (Kingdom of) Bonds,
Series 44, 5%, 3/28/35 [EUR] 3,055,000 4,273,217
- --------------------------------------------------------------------------------
Belgium (Kingdom of)
Treasury Bills, 0.041%,
11/15/07 9 [EUR] 7,570,000 10,090,615
---------------
14,363,832
- --------------------------------------------------------------------------------
BRAZIL--1.8%
Brazil (Federal Republic of)
Bonds:
6%, 1/17/17 8,070,000 7,928,775
8%, 1/15/18 12,205,000 13,443,808
8.75%, 2/4/25 5,525,000 6,851,000
8.875%, 10/14/19 8,885,000 10,808,603
10.50%, 7/14/14 6,288,000 7,932,312
- --------------------------------------------------------------------------------
Brazil (Federal Republic of)
Nts., 7.875%, 3/7/15 130,000 144,105
---------------
47,108,603
- --------------------------------------------------------------------------------
BULGARIA--0.1%
Bulgaria (Republic of) Bonds:
8.25%, 1/15/15 740,000 854,700
12 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
BULGARIA Continued
Bulgaria (Republic of) Bonds: Continued
8.25%, 1/15/15 2 $ 710,000 $ 820,050
---------------
1,674,750
- --------------------------------------------------------------------------------
CANADA--0.8%
Canada (Government of)
Treasury Bills:
4.268%, 11/1/07 9 [CAD] 7,630,000 7,058,386
4.438%, 12/27/07 9 [CAD] 14,660,000 13,462,635
---------------
20,521,021
- --------------------------------------------------------------------------------
COLOMBIA--1.1%
Colombia (Republic of) Bonds:
7.375%, 9/18/37 4,790,000 5,328,875
10.75%, 1/15/13 1,390,000 1,704,140
12%, 10/22/15 [COP] 17,234,000,000 10,108,732
- --------------------------------------------------------------------------------
Colombia (Republic of) Nts.:
8.25%, 12/22/14 933,000 1,048,226
11.75%, 3/1/10 [COP] 1,308,000,000 701,681
- --------------------------------------------------------------------------------
Colombia (Republic of)
Unsec. Unsub. Bonds, 9.85%,
6/28/27 [COP] 15,940,000,000 8,568,231
---------------
27,459,885
- --------------------------------------------------------------------------------
COSTA RICA--0.1%
Costa Rica (Republic of)
Unsec. Bonds, 9.995%, 8/1/20 1,323,000 1,723,208
- --------------------------------------------------------------------------------
DENMARK--0.1%
Denmark (Kingdom of) Bonds:
4%, 11/15/10 [DKK] 6,545,000 1,169,426
4%, 11/15/15 [DKK] 4,770,000 832,477
7%, 11/10/24 [DKK] 1,735,000 398,773
- --------------------------------------------------------------------------------
Denmark (Kingdom of) Nts.,
4%, 8/15/08 [DKK] 6,850,000 1,239,202
---------------
3,639,878
- --------------------------------------------------------------------------------
DOMINICAN REPUBLIC--0.1%
Dominican Republic Unsec.
Unsub. Bonds, Series REGS,
9.04%, 1/23/18 1,721,439 1,956,415
- --------------------------------------------------------------------------------
Dominican Republic Unsec.
Unsub. Nts., 9.50%, 9/27/11 2 395,226 422,892
---------------
2,379,307
- --------------------------------------------------------------------------------
EL SALVADOR--0.1%
El Salvador (Republic of) Bonds:
7.625%, 9/21/34 2 590,000 678,500
7.65%, 6/15/35 2 2,190,000 2,507,550
---------------
3,186,050
- --------------------------------------------------------------------------------
FRANCE--0.8%
France (Government of)
Bonds, 3.25%, 4/25/16 [EUR] 3,335,000 4,085,369
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
FRANCE Continued
France (Government of)
Obligations Assimilables du
Tresor Bonds, 4%,
10/25/38 [EUR] 10,035,000 $ 11,966,525
- --------------------------------------------------------------------------------
France (Government of)
Treasury Bills, 9.79%,
7/26/07 9 [EUR] 4,075,000 5,500,773
---------------
21,552,667
- --------------------------------------------------------------------------------
GERMANY--1.8%
Germany (Federal Republic of)
Bonds:
Series 03, 3.75%, 7/4/13 [EUR] 1,850,000 2,403,110
Series 05, 4%, 1/4/37 [EUR] 12,095,000 14,580,020
- --------------------------------------------------------------------------------
Germany (Federal Republic of)
Treasury Bills:
Series 0107, 0.038%,
7/18/07 9 [EUR] 19,655,000 26,558,471
Series 0307, 3.994%,
9/12/07 9 [EUR] 1,350,000 1,812,939
---------------
45,354,540
- --------------------------------------------------------------------------------
GREECE--0.4%
Greece (Republic of) Bonds,
4.60%, 5/20/13 [EUR] 7,070,000 9,537,012
- --------------------------------------------------------------------------------
GUATEMALA--0.0%
Guatemala (Republic of) Nts.:
10.25%, 11/8/11 2 250,000 290,375
10.25%, 11/8/11 95,000 110,343
---------------
400,718
- --------------------------------------------------------------------------------
INDONESIA--0.4%
Indonesia (Republic of) Nts.:
6.75%, 3/10/14 2 3,740,000 3,828,825
7.25%, 4/20/15 2 4,215,000 4,452,094
- --------------------------------------------------------------------------------
Indonesia (Republic of)
Unsec. Nts., 8.50%, 10/12/35 2 2,070,000 2,468,475
---------------
10,749,394
- --------------------------------------------------------------------------------
ISRAEL--0.4%
Israel (State of) Bonds,
Series 2682, 7.50%, 3/31/14 [ILS] 34,853,000 9,188,924
- --------------------------------------------------------------------------------
ITALY--1.2%
Italy (Republic of) Nts.,
Certificati di Credito del
Tesoro, 4%, 7/1/09 1 [EUR] 22,155,000 30,115,027
- --------------------------------------------------------------------------------
JAPAN--1.8%
Japan (Government of) Bonds:
2 yr., Series 252, 0.80%,
1/15/09 [JPY] 2,268,000,000 18,381,990
10 yr., Series 245, 0.90%,
12/20/12 [JPY] 1,059,000,000 8,319,504
10 yr., Series 268, 1.50%,
3/20/15 [JPY] 1,124,000,000 8,976,937
13 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
JAPAN Continued
Japan (Government of) Bonds: Continued
30 yr., Series 25, 2.30%,
12/20/36 [JPY] 1,526,000,000 $ 11,983,422
---------------
47,661,853
- --------------------------------------------------------------------------------
MALAYSIA--0.2%
Johor Corp. Malaysia
(Government of) Bonds,
Series P3, 1%, 7/31/12 3 [MYR] 7,980,000 2,727,415
- --------------------------------------------------------------------------------
Malaysia (Government of)
Bonds, Series 2/05, 4.72%,
9/30/15 [MYR] 8,950,000 2,897,700
---------------
5,625,115
- --------------------------------------------------------------------------------
MEXICO--0.2%
United Mexican States Bonds,
Series M20, 10%, 12/5/24 1 [MXN] 45,000,000 5,097,306
- --------------------------------------------------------------------------------
NIGERIA--0.3%
Nigeria (Federal Republic of)
Bonds, Series 5Y, 13.50%,
9/11/11 [NGN] 184,190,000 1,592,212
- --------------------------------------------------------------------------------
Nigeria (Federal Republic of)
Nts., Series 3Y2S, 12.50%,
2/24/09 [NGN] 60,500,000 507,772
- --------------------------------------------------------------------------------
Nigeria (Federal Republic of)
Promissory Nts., Series RC,
5.092%, 1/5/10 130,618 119,252
- --------------------------------------------------------------------------------
Nigeria (Federal Republic of)
Treasury Bonds:
Series 5Y13, 12.99%, 9/29/11 [NGN] 142,800,000 1,291,092
Series 7Y16, 11.99%,
12/22/13 [NGN] 236,500,000 2,118,743
Series 7YR, 12.74%,
10/27/13 [NGN] 317,100,000 2,915,576
---------------
8,544,647
- --------------------------------------------------------------------------------
PANAMA--0.4%
Panama (Republic of) Bonds:
6.70%, 1/26/36 3,740,000 3,833,500
7.25%, 3/15/15 4,485,000 4,821,375
8.875%, 9/30/27 1,375,000 1,724,553
9.375%, 4/1/29 655,000 871,150
---------------
11,250,578
- --------------------------------------------------------------------------------
PERU--1.0%
Peru (Republic of) Bonds:
7.84%, 8/12/20 [PEN] 45,800,000 16,744,486
8.20%, 8/12/26 [PEN] 11,825,000 4,584,074
9.91%, 5/5/15 [PEN] 8,101,000 3,207,563
Series 7, 8.60%, 8/12/17 [PEN] 3,450,000 1,303,982
Series 8-1, 12.25%, 8/10/11 [PEN] 1,427,000 559,983
Peru (Republic of) Sr. Nts.,
4.533%, 2/28/16 9 614,792 365,672
---------------
26,765,760
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
PHILIPPINES--0.4%
Philippines (Republic of the)
Unsec. Bonds:
7.75%, 1/14/31 $ 5,762,000 $ 6,381,415
9%, 2/15/13 3,855,000 4,317,600
---------------
10,699,015
- --------------------------------------------------------------------------------
POLAND--0.3%
Poland (Republic of) Bonds:
Series 0K0807, 4.243%,
8/12/07 9 [PLZ] 1,200,000 428,385
Series DS1013, 5%, 10/24/13 [PLZ] 20,240,000 7,046,032
Series WS0922, 5.75%,
9/23/22 [PLZ] 1,000,000 362,873
---------------
7,837,290
- --------------------------------------------------------------------------------
SPAIN--0.6%
Spain (Government of) Bonds,
3.80%, 1/31/17 [EUR] 3,385,000 4,293,835
- --------------------------------------------------------------------------------
Spain (Government of) Treasury
Bills, 4.031%, 10/19/07 9 [EUR] 8,125,000 10,864,385
---------------
15,158,220
- --------------------------------------------------------------------------------
THE NETHERLANDS--0.1%
Netherlands (Kingdom of the)
Bonds, 5%, 7/15/11 [EUR] 2,520,000 3,466,641
- --------------------------------------------------------------------------------
TURKEY--1.6%
Turkey (Republic of) Bonds, 7%,
9/26/16 9,710,000 9,867,788
- --------------------------------------------------------------------------------
Turkey (Republic of) Nts.:
0.205%, 7/16/08 9 [TRY] 16,225,000 10,332,117
7.25%, 3/15/15 5,635,000 5,839,269
16%, 3/7/12 [TRY] 9,640,000 7,461,246
18.705%, 8/13/08 9 [TRY] 11,520,000 7,242,986
---------------
40,743,406
- --------------------------------------------------------------------------------
UNITED KINGDOM--1.3%
United Kingdom Treasury Bonds:
5%, 3/7/08 [GBP] 4,965,000 9,920,429
6%, 12/7/28 [GBP] 5,705,000 12,840,603
- --------------------------------------------------------------------------------
United Kingdom Treasury
Nts., 4%, 3/7/09 [GBP] 5,120,000 9,993,860
---------------
32,754,892
- --------------------------------------------------------------------------------
URUGUAY--0.9%
Uruguay (Oriental Republic of)
Bonds:
4.25%, 4/5/27 [UYU] 48,300,000 2,187,464
7.625%, 3/21/36 9,240,000 10,164,000
14 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
URUGUAY Continued
Uruguay (Oriental Republic of)
Unsec. Bonds:
5%, 9/14/18 [UYU] 54,110,000 $ 2,726,279
8%, 11/18/22 6,450,000 7,191,750
---------------
22,269,493
---------------
Total Foreign Government
Obligations
(Cost $533,208,993) 552,443,065
- --------------------------------------------------------------------------------
LOAN PARTICIPATIONS--0.3%
- --------------------------------------------------------------------------------
Credit Suisse First Boston
International, Export-Import
Bank of Ukraine Loan
Participation Nts., 8.40%, 2/9/16 1,740,000 1,792,200
- --------------------------------------------------------------------------------
Dali Capital plc/Bank of
Moscow Loan Participation
Nts., Series 28, Tranche 1, 7.25%,
11/25/09 [RUR] 137,800,000 5,442,469
- --------------------------------------------------------------------------------
Dali Capital SA (ROSBANK)
Loan Participation Nts.,
Series 23, Tranche 1, 8%,
9/30/09 3 [RUR] 36,400,000 1,434,803
---------------
Total Loan Participations
(Cost $8,305,865) 8,669,472
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--20.2%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--4.6%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--0.2%
Goodyear Tire & Rubber
Co. (The):
7.857% Nts., 8/15/11 1,125,000 1,153,125
9% Sr. Unsec. Nts., 7/1/15 750,097 811,980
- --------------------------------------------------------------------------------
Stoneridge, Inc., 11.50% Sr.
Nts., 5/1/12 1,200,000 1,260,000
- --------------------------------------------------------------------------------
Tenneco Automotive, Inc.:
8.625% Sr. Unsec. Sub. Nts.,
11/15/14 900,000 931,500
10.25% Sr. Sec. Nts., Series B,
7/15/13 650,000 702,000
- --------------------------------------------------------------------------------
Visteon Corp., 8.25% Sr. Unsec.
Nts., 8/1/10 1,700,000 1,695,750
---------------
6,554,355
- --------------------------------------------------------------------------------
AUTOMOBILES--0.1%
General Motors Acceptance
Corp., 8% Bonds, 11/1/31 2,253,000 2,310,102
- --------------------------------------------------------------------------------
DISTRIBUTORS--0.0%
SGS International, Inc., 12% Sr.
Unsec. Sub. Nts., 12/15/13 580,000 635,100
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--0.0%
Education Management
LLC/Education Management
Corp., 10.25% Sr. Unsec. Sub.
Nts., 6/1/16 $ 1,140,000 $ 1,205,550
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.2%
American Casino &
Entertainment Properties
LLC, 7.85% Sr. Sec. Nts., 2/1/12 500,000 516,250
- --------------------------------------------------------------------------------
Buffets, Inc., 12.50% Sr. Unsec.
Nts., 11/1/14 185,000 178,063
- --------------------------------------------------------------------------------
CCM Merger, Inc., 8% Unsec.
Nts., 8/1/13 2 1,040,000 1,040,000
- --------------------------------------------------------------------------------
French Lick Resorts & Casino
LLC, 10.75% First Mtg. Nts.,
4/15/14 2 1,460,000 1,255,600
- --------------------------------------------------------------------------------
Gaylord Entertainment Co.,
8% Sr. Nts., 11/15/13 900,000 916,875
- --------------------------------------------------------------------------------
Greektown Holdings, Inc.,
10.75% Sr. Nts., 12/1/13 3 1,335,000 1,421,775
- --------------------------------------------------------------------------------
Isle of Capri Casinos, Inc.:
7% Sr. Unsec. Sub. Nts., 3/1/14 2,100,000 1,997,625
9% Sr. Sub. Nts., 3/15/12 500,000 523,750
- --------------------------------------------------------------------------------
Mandalay Resort Group,
10.25% Sr. Unsec. Sub. Nts.,
Series B, 8/1/07 650,000 652,438
- --------------------------------------------------------------------------------
MGM Mirage, Inc.:
6.75% Sr. Unsec. Nts., 4/1/13 650,000 620,750
8.375% Sr. Unsec. Sub. Nts., 2/1/11 2,300,000 2,363,250
- --------------------------------------------------------------------------------
Mohegan Tribal Gaming
Authority:
6.125% Sr. Unsec. Sub. Nts., 2/15/13 225,000 219,375
6.375% Sr. Sub. Nts., 7/15/09 250,000 248,750
6.875% Sr. Unsec. Sub. Nts., 2/15/15 515,000 503,413
7.125% Sr. Unsec. Sub. Nts., 8/15/14 500,000 497,500
8% Sr. Sub. Nts., 4/1/12 1,200,000 1,245,000
- --------------------------------------------------------------------------------
NCL Corp., 10.625% Sr. Unsub.
Nts., 7/15/14 3 800,000 776,000
- --------------------------------------------------------------------------------
Park Place Entertainment
Corp., 7.875% Sr. Sub. Nts., 3/15/10 800,000 823,040
- --------------------------------------------------------------------------------
Penn National Gaming, Inc.:
6.75% Sr. Unsec. Sub. Nts.,
3/1/15 230,000 236,900
6.875% Sr. Sub. Nts., 12/1/11 500,000 510,625
- --------------------------------------------------------------------------------
Pinnacle Entertainment, Inc.,
8.25% Sr. Unsec. Sub. Nts., 3/15/12 1,900,000 1,966,500
- --------------------------------------------------------------------------------
Pokagon Gaming Authority,
10.375% Sr. Nts., 6/15/14 2 525,000 581,438
- --------------------------------------------------------------------------------
Premier Cruise Ltd., 11% Sr.
Nts., 3/15/08 3,4,5 250,000 --
- --------------------------------------------------------------------------------
Six Flags, Inc.:
8.875% Sr. Unsec. Nts., 2/1/10 574,000 569,695
9.625% Sr. Nts., 6/1/14 669,000 623,843
9.75% Sr. Nts., 4/15/13 400,000 378,500
15 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
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 $ 1,960,670
6.875% Sr. Unsec. Sub. Nts.,
3/1/16 235,000 208,563
- --------------------------------------------------------------------------------
Travelport LLC, 11.875% Sr.
Unsec. Sub. Nts., 9/1/16 1,000,000 1,135,000
- --------------------------------------------------------------------------------
Trump Entertainment Resorts,
Inc., 8.50% Sec. Nts., 6/1/15 3,100,000 3,092,250
- --------------------------------------------------------------------------------
Universal City Development
Partners Ltd., 11.75% Sr. Nts.,
4/1/10 500,000 531,250
- --------------------------------------------------------------------------------
Vail Resorts, Inc., 6.75% Sr. Sub.
Nts., 2/15/14 1,100,000 1,076,625
- --------------------------------------------------------------------------------
Wynn Las Vegas LLC/Wynn
Las Vegas Capital Corp., 6.625%
Nts., 12/1/14 2,274,000 2,202,938
---------------
30,874,251
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.2%
Beazer Homes USA, Inc., 8.375%
Sr. Nts., 4/15/12 400,000 380,000
- -------------------------------------------------------------------------------
D.R. Horton, Inc., 9.75% Sr. Sub.
Nts., 9/15/10 400,000 433,716
- --------------------------------------------------------------------------------
K. Hovnanian Enterprises, Inc.,
7.75% Sr. Unsec. Sub. Nts., 5/15/13 300,000 264,000
- --------------------------------------------------------------------------------
KB Home:
8.625% Sr. Sub. Nts., 12/15/08 250,000 256,250
9.50% Sr. Unsec. Sub. Nts., 2/15/11 400,000 412,000
- --------------------------------------------------------------------------------
Sealy Mattress Co., 8.25% Sr. Sub.
Nts., 6/15/14 450,000 463,500
- --------------------------------------------------------------------------------
Standard Pacific Corp., 9.25% Sr.
Sub. Nts., 4/15/12 200,000 190,000
- --------------------------------------------------------------------------------
WCI Communities, Inc., 9.125%
Sr. Sub. Nts., 5/1/12 800,000 776,000
- --------------------------------------------------------------------------------
William Lyon Homes, Inc., 10.75%
Sr. Nts., 4/1/13 900,000 850,500
---------------
4,025,966
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.1%
Leslie's Poolmart, Inc., 7.75% Sr.
Unsec. Nts., 2/1/13 825,000 825,000
- --------------------------------------------------------------------------------
Steinway Musical Instruments,
Inc., 7% Sr. Nts., 3/1/14 2 785,000 769,300
---------------
1,594,300
- --------------------------------------------------------------------------------
MEDIA--2.2%
Adelphia Communications
Corp.:
7.875% Escrow Shares,
Series B, 5/1/09 4,5 350,000 107,625
10.25% Escrow Shares,
Series B, 6/15/11 4,5 200,000 65,500
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Adelphia Communications
Corp.: Continued
10.875% Escrow Shares,
Series B, 10/1/10 4,5 $ 400,000 $ 126,000
- --------------------------------------------------------------------------------
Allbritton Communications
Co., 7.75% Sr. Unsec.
Sub. Nts., 12/15/12 1,100,000 1,111,000
- --------------------------------------------------------------------------------
AMC Entertainment, Inc., 8%
Sr. Unsec. Sub. Nts., 3/1/14 650,000 640,250
- --------------------------------------------------------------------------------
American Media Operations,
Inc.:
8.875% Sr. Unsec. Sub. Nts.,
1/15/11 150,000 143,250
10.25% Sr. Unsec. Sub. Nts.,
Series B, 5/1/09 1,250,000 1,190,625
- --------------------------------------------------------------------------------
Block Communications, Inc.,
8.25% Sr. Nts., 12/15/15 2 405,000 411,075
- --------------------------------------------------------------------------------
Charter Communications
Holdings II LLC/Charter
Communications Holdings II
Capital Corp.:
10.25% Sr. Unsec. Nts., 9/15/10 1,100,000 1,155,000
10.25% Sr. Unsec. Nts., Series B,
9/15/10 1,735,000 1,819,581
- --------------------------------------------------------------------------------
Charter Communications
Operating LLC/Charter
Communications Operating
Capital Corp., 8.375% Sr. Nts.,
Second Lien, 4/30/14 2 2,653,000 2,712,693
- --------------------------------------------------------------------------------
Cinemark, Inc., 0%/9.75% Sr.
Unsec. Disc. Nts., 3/15/14 12 1,500,000 1,372,500
- --------------------------------------------------------------------------------
CSC Holdings, Inc.:
7.625% Sr. Unsec. Debs., 7/15/18 1,000,000 955,000
7.625% Sr. Unsec. Unsub. Nts.,
Series B, 4/1/11 1,106,000 1,103,235
- --------------------------------------------------------------------------------
Dex Media East LLC/Dex
Media East Finance Co., 9.875%
Sr. Unsec. Nts., 11/15/09 200,000 207,750
- --------------------------------------------------------------------------------
Dex Media West LLC/Dex
Media West Finance Co.:
8.50% Sr. Nts., 8/15/10 300,000 311,625
9.875% Sr. Sub. Nts., 8/15/13 586,000 629,950
- --------------------------------------------------------------------------------
Dex Media, Inc.:
0%/9% Unsec. Disc. Nts.,
11/15/13 12 300,000 283,875
0%/9% Unsec. Disc. Nts.,
11/15/13 12 400,000 378,500
8% Unsec. Nts., 11/15/13 3,575,000 3,646,500
- --------------------------------------------------------------------------------
DirecTV Holdings LLC/DirecTV
Financing Co., Inc.:
6.375% Sr. Unsec. Nts., 6/15/15 450,000 424,125
8.375% Sr. Unsec. Nts., 3/15/13 1,100,000 1,156,375
16 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
EchoStar DBS Corp.:
6.625% Sr. Unsec. Nts., 10/1/14 $ 1,427,000 $ 1,366,353
7% Sr. Unsec. Nts., 10/1/13 535,000 529,650
7.125% Sr. Unsec. Nts., 2/1/16 1,400,000 1,375,500
- --------------------------------------------------------------------------------
Idearc, Inc., 8% Sr. Unsec. Nts.,
11/15/16 1,930,000 1,958,950
- --------------------------------------------------------------------------------
Lamar Media Corp., 6.625% Sr.
Unsec. Sub. Nts., 8/15/15 1,275,000 1,214,438
- --------------------------------------------------------------------------------
Lin Television Corp., 6.50% Sr.
Sub. Nts., 5/15/13 550,000 540,375
- --------------------------------------------------------------------------------
Marquee Holdings, Inc.,
0%/12% Sr. Disc. Nts., 8/15/14 12 1,600,000 1,400,000
- --------------------------------------------------------------------------------
Mediacom Broadband
LLC/Mediacom Broadband
Corp.:
8.50% Sr. Nts., 10/15/15 2 1,220,000 1,232,200
8.50% Sr. Unsec. Nts., 10/15/15 280,000 282,800
- --------------------------------------------------------------------------------
Mediacom LLC/Mediacom
Capital Corp., 9.50% Sr. Unsec.
Nts., 1/15/13 969,000 993,225
- --------------------------------------------------------------------------------
MediaNews Group, Inc.:
6.375% Sr. Sub. Nts., 4/1/14 1,300,000 1,088,750
6.875% Sr. Unsec. Sub. Nts.,
10/1/13 700,000 605,500
- --------------------------------------------------------------------------------
Nielsen Finance LLC/Nielsen
Finance Co.:
0%/12.50% Sr. Sub. Disc. Nts.,
8/1/16 2,12 1,725,000 1,224,750
10% Sr. Nts., 8/1/14 2 2,195,000 2,332,188
- --------------------------------------------------------------------------------
Paxson Communications
Corp., 11.61% Sr. Sec. Nts.,
1/15/13 1,2 760,000 788,500
- --------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8% Sr. Nts., 5/15/13 900,000 951,750
8.875% Sr. Unsec. Nts., 5/15/11 319,000 329,368
- --------------------------------------------------------------------------------
Quebecor World Capital
Corp., 8.75% Sr. Nts., 3/15/16 2 315,000 311,850
- --------------------------------------------------------------------------------
R.H. Donnelley Corp.:
6.875% Sr. Disc. Nts.,
Series A-1, 1/15/13 2,730,000 2,600,325
6.875% Sr. Disc. Nts.,
Series A-2, 1/15/13 1,865,000 1,776,413
6.875% Sr. Nts., 1/15/13 1,300,000 1,238,250
8.875% Sr. Unsec. Nts.,
Series A-3, 1/15/16 3,540,000 3,699,300
- --------------------------------------------------------------------------------
R.H. Donnelley Financial
Corp. I, 10.875% Sr. Sub. Nts.,
12/15/12 2 400,000 428,500
- --------------------------------------------------------------------------------
Radio One, Inc., 8.875% Sr.
Unsec. Sub. Nts., Series B, 7/1/11 600,000 617,250
- --------------------------------------------------------------------------------
Rainbow National Services
LLC, 8.75% Sr. Nts., 9/1/12 2 900,000 940,500
- --------------------------------------------------------------------------------
Shaw Communications, Inc.,
8.54% Debs., 9/30/27 [CAD] 340,000 319,333
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Sinclair Broadcast Group, Inc.,
8% Sr. Unsec. Sub. Nts., 3/15/12 $ 1,271,000 $ 1,309,130
- --------------------------------------------------------------------------------
Sirius Satellite Radio, Inc.,
9.625% Sr. Unsec. Nts., 8/1/13 390,000 384,150
- --------------------------------------------------------------------------------
Vertis, Inc.:
9.75% Sr. Sec. Nts., 4/1/09 700,000 714,000
10.875% Sr. Unsec. Nts.,
Series B, 6/15/09 800,000 788,000
- --------------------------------------------------------------------------------
Warner Music Group,
7.375% Sr. Sub. Bonds, 4/15/14 500,000 467,500
- --------------------------------------------------------------------------------
WMG Holdings Corp.,
0%/9.50% Sr. Disc. Nts.,
12/15/14 12 2,057,000 1,573,605
- --------------------------------------------------------------------------------
XM Satellite Radio
Holdings, Inc., 9.75% Sr.
Unsec. Nts., 5/1/14 930,000 916,050
---------------
56,250,487
- --------------------------------------------------------------------------------
MULTILINE RETAIL--0.2%
Bon-Ton Stores, Inc. (The),
10.25% Sr. Unsec. Unsub. Nts.,
3/15/14 1,980,000 2,014,650
- --------------------------------------------------------------------------------
Neiman Marcus Group, Inc.
(The):
9% Sr. Unsec. Nts., 10/15/15 2,020,000 2,171,500
10.375% Sr. Unsec. Sub. Nts.,
10/15/15 660,000 729,300
---------------
4,915,450
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--0.2%
Boise Cascade LLC, 7.125% Sr.
Unsec. Sub. Nts., 10/15/14 1,308,000 1,249,140
- --------------------------------------------------------------------------------
Claire's Stores, Inc., 10.50% Sr.
Sub. Nts., 6/1/17 2 2,390,000 2,192,825
- --------------------------------------------------------------------------------
Gamestop Corp., 8% Sr. Unsec.
Nts., 10/1/12 300,000 315,000
- --------------------------------------------------------------------------------
Linens 'N Things, Inc., 10.981%
Sr. Sec. Nts., 1/15/14 1 1,480,000 1,104,450
- --------------------------------------------------------------------------------
Rent-A-Center, Inc., 7.50% Sr.
Unsec. Sub. Nts., Series B, 5/1/10 550,000 561,000
---------------
5,422,415
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.2%
Invista, Inc., 9.25% Sr. Nts.,
5/1/12 2 1,067,000 1,133,688
- --------------------------------------------------------------------------------
Levi Strauss & Co., 9.75% Sr.
Unsec. Unsub. Nts., 1/15/15 1,919,000 2,062,925
- --------------------------------------------------------------------------------
Oxford Industries, Inc., 8.875%
Sr. Nts., 6/1/11 3 250,000 259,375
- --------------------------------------------------------------------------------
Quiksilver, Inc., 6.875% Sr.
Unsec. Nts., 4/15/15 610,000 576,450
---------------
4,032,438
17 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CONSUMER STAPLES--0.9%
- --------------------------------------------------------------------------------
BEVERAGES--0.1%
Constellation Brands, Inc.:
7.25% Sr. Nts., 5/15/17 2 $ 592,000 $ 580,160
7.25% Sr. Nts., 9/1/16 615,000 602,700
8.125% Sr. Sub. Nts., 1/15/12 300,000 306,750
---------------
1,489,610
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.3%
Albertson's, Inc., 8% Sr. Unsec.
Debs., 5/1/31 2,558,000 2,627,294
- --------------------------------------------------------------------------------
Delhaize America, Inc., 9% Unsub.
Debs., 4/15/31 3,799,000 4,608,753
- --------------------------------------------------------------------------------
Real Time Data Co., 11% Disc.
Nts., 5/31/09 3,4,5,13 142,981 --
- --------------------------------------------------------------------------------
Rite Aid Corp., 8.125% Sr. Sec. Nts.,
5/1/10 450,000 457,313
---------------
7,693,360
- --------------------------------------------------------------------------------
FOOD PRODUCTS--0.2%
Del Monte Corp.:
6.75% Sr. Unsec. Sub. Nts., 2/15/15 180,000 172,350
8.625% Sr. Sub. Nts., 12/15/12 400,000 415,000
- --------------------------------------------------------------------------------
Dole Food Co., Inc.:
7.25% Sr. Unsec. Nts., 6/15/10 100,000 97,000
8.625% Sr. Nts., 5/1/09 306,000 306,765
8.875% Sr. Unsec. Nts., 3/15/11 71,000 70,290
- --------------------------------------------------------------------------------
Hines Nurseries, Inc., 10.25% Sr.
Unsec. Sub. Nts., 10/1/11 1,300,000 1,020,500
- --------------------------------------------------------------------------------
MHP SA, 10.25% Sr. Sec. Sub.
Bonds, 11/30/11 2 1,360,000 1,414,400
- --------------------------------------------------------------------------------
Pinnacle Foods Finance
LLC/Pinnacle Foods Finance
Corp., 10.625% Sr. Sub. Nts., 4/1/17 2 2,636,000 2,550,330
- --------------------------------------------------------------------------------
Smithfield Foods, Inc., 7.625% Sr.
Unsec. Sub. Nts., 2/15/08 400,000 403,000
---------------
6,449,635
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.1%
Church & Dwight Co., Inc., 6% Sr.
Unsec. Sub. Nts., 12/15/12 350,000 337,313
- --------------------------------------------------------------------------------
Nutro Products, Inc., 10.75% Sr.
Sub. Nts., 4/15/14 2 370,000 431,806
- --------------------------------------------------------------------------------
Spectrum Brands, Inc., 7.375% Sr.
Unsec. Sub. Nts., 2/1/15 900,000 727,875
---------------
1,496,994
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.1%
Elizabeth Arden, Inc., 7.75% Sr.
Unsec. Sub. Nts., 1/15/14 1,175,000 1,189,688
- --------------------------------------------------------------------------------
Playtex Products, Inc.:
8% Sr. Sec. Nts., 3/1/11 500,000 517,500
9.375% Sr. Unsec. Sub. Nts., 6/1/11 740,000 764,050
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS Continued
Sally Holdings LLC:
9.25% Sr. Nts., 11/15/14 2 $ 1,531,000 $ 1,542,483
10.50% Sr. Sub. Nts., 11/15/16 2 936,000 945,360
---------------
4,959,081
- --------------------------------------------------------------------------------
TOBACCO--0.1%
Reynolds American, Inc., 7.25% Sr.
Sec. Nts., 6/1/13 1,805,000 1,882,606
- --------------------------------------------------------------------------------
ENERGY--1.6%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--0.1%
Basic Energy Services, Inc., 7.125%
Sr. Unsec. Nts., 4/15/16 335,000 321,600
- --------------------------------------------------------------------------------
Hanover Compressor Co., 8.625%
Sr. Unsec. Sub. Nts., 12/15/10 800,000 829,000
- --------------------------------------------------------------------------------
Hanover Equipment Trust, 8.50%
Sr. Sec. Nts., Series A, 9/1/08 221,000 221,000
- --------------------------------------------------------------------------------
PHI, Inc., 7.125% Sr. Unsec. Nts.,
4/15/13 400,000 384,000
- --------------------------------------------------------------------------------
RathGibson, Inc., 11.25% Sr.
Unsec. Nts., 2/15/14 3 300,000 316,500
- --------------------------------------------------------------------------------
Universal Compression, Inc.,
7.25% Sr. Unsec. Sub. Nts., 5/15/10 400,000 402,500
---------------
2,474,600
- --------------------------------------------------------------------------------
OIL & GAS--1.5%
Arch Western Finance LLC,
6.75% Sr. Nts., 7/1/13 700,000 675,500
- --------------------------------------------------------------------------------
Atlas Pipeline Partners LP,
8.125% Sr. Unsec. Nts., 12/15/15 290,000 290,725
- --------------------------------------------------------------------------------
Berry Petroleum Co., 8.25%
Sr. Sub. Nts., 11/1/16 370,000 374,625
- --------------------------------------------------------------------------------
Chesapeake Energy Corp.:
6.375% Sr. Unsec. Nts., 6/15/15 250,000 239,688
6.875% Sr. Unsec. Nts., 1/15/16 1,822,000 1,790,115
7.50% Sr. Nts., 6/15/14 300,000 305,250
- --------------------------------------------------------------------------------
Compton Petroleum Finance
Corp., 7.625% Sr. Nts., 12/1/13 1,310,000 1,300,175
- --------------------------------------------------------------------------------
Copano Energy LLC, 8.125% Sr.
Unsec. Nts., 3/1/16 180,000 183,600
- --------------------------------------------------------------------------------
Forest Oil Corp., 7.75% Sr. Nts.,
5/1/14 300,000 304,500
- --------------------------------------------------------------------------------
Foundation PA Coal Co., 7.25%
Sr. Unsec. Nts., 8/1/14 550,000 547,938
- --------------------------------------------------------------------------------
Frontier Oil Corp., 6.625% Sr.
Unsec. Nts., 10/1/11 700,000 686,000
- --------------------------------------------------------------------------------
Gaz Capital SA, 8.625% Sr.
Unsec. Nts., 4/28/34 2 2,065,000 2,582,283
- --------------------------------------------------------------------------------
Inergy LP/Inergy Finance Corp.,
8.25% Sr. Unsec. Nts., 3/1/16 880,000 908,600
- --------------------------------------------------------------------------------
Kinder Morgan Energy Partners
LP, 7.30% Sr. Unsec. Nts., 8/15/33 4,327,000 4,532,000
18 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
Massey Energy Co.:
6.625% Sr. Nts., 11/15/10 $ 200,000 $ 198,000
6.875% Sr. Unsec. Nts., 12/15/13 285,000 262,556
- --------------------------------------------------------------------------------
National Gas Co., 6.05% Nts.,
1/15/36 2 1,510,000 1,446,157
- --------------------------------------------------------------------------------
Newfield Exploration Co.,
6.625% Sr. Unsec. Sub. Nts., 9/1/14 1,900,000 1,843,000
- --------------------------------------------------------------------------------
Pacific Energy Partners
LP/Pacific Energy Finance
Corp., 6.25% Sr. Unsec. Nts.,
9/15/15 100,000 98,388
- --------------------------------------------------------------------------------
Peabody Energy Corp.,
6.875% Sr. Unsec. Nts.,
Series B, 3/15/13 2,215,000 2,215,000
- --------------------------------------------------------------------------------
Petroleum Export Ltd.
Cayman SPV, 5.265% Sr. Nts.,
Cl. A3, 6/15/11 2 3,284,271 3,191,884
- --------------------------------------------------------------------------------
Pogo Producing Co., 7.875%
Sr. Unsec. Sub. Nts., 5/1/13 365,000 374,125
- --------------------------------------------------------------------------------
Premcor Refining Group, Inc.,
9.50% Sr. Nts., 2/1/13 835,000 889,202
- --------------------------------------------------------------------------------
Quicksilver Resources, Inc.,
7.125% Sr. Sub. Nts., 4/1/16 1,340,000 1,299,800
- --------------------------------------------------------------------------------
Range Resources Corp.:
6.375% Sr. Sub. Nts., 3/15/15 430,000 409,575
7.375% Sr. Sub. Nts., 7/15/13 200,000 203,000
7.50% Sr. Sub. Nts., 5/15/16 1,505,000 1,531,338
- --------------------------------------------------------------------------------
Sabine Pass LNG LP:
7.25% Sr. Sec. Nts., 11/30/13 2 1,335,000 1,328,325
7.50% Sr. Sec. Nts., 11/30/16 2 2,770,000 2,763,075
- --------------------------------------------------------------------------------
Stone Energy Corp., 6.75% Sr.
Unsec. Sub. Nts., 12/15/14 1,020,000 943,500
- --------------------------------------------------------------------------------
Targa Resources, Inc., 8.50% Sr.
Nts., 11/1/13 2 525,000 535,500
- --------------------------------------------------------------------------------
Tengizchevroil LLP, 6.124%
Nts., 11/15/14 2 2,123,000 2,093,915
- --------------------------------------------------------------------------------
Tesoro Corp.:
6.25% Sr. Unsec. Nts., 11/1/12 405,000 403,988
6.625% Sr. Unsec. Nts., 11/1/15 905,000 900,475
- --------------------------------------------------------------------------------
Whiting Petroleum Corp.,
7.25% Sr. Sub. Nts., 5/1/12 1,500,000 1,432,500
---------------
39,084,302
- --------------------------------------------------------------------------------
FINANCIALS--5.0%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--1.3%
Berry Plastics Holding Corp.:
8.875% Sr. Sec. Nts., 9/15/14 1,275,000 1,297,313
9.235% Sr. Sec. Nts., 9/15/14 1 295,000 299,425
10.25% Sr. Unsec. Sub. Nts., 3/1/16 1,280,000 1,280,000
- --------------------------------------------------------------------------------
E*TRADE Financial Corp.:
7.375% Sr. Unsec. Nts., 9/15/13 1,146,000 1,168,920
8% Sr. Nts., 6/15/11 410,000 422,300
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CAPITAL MARKETS Continued
E*TRADE Financial Corp.:
Continued
Eirles Two Ltd., 8.519% Sec.
Nts., Series 324, 4/20/12 1,3 $ 4,100,000 $ 4,088,561
- --------------------------------------------------------------------------------
HBOS Treasury Services plc:
4.375% Sr. Sec. Nts., 7/13/16 [EUR] 12,290,000 16,053,267
4.50% Sr. Sec. Nts., 7/13/21 [EUR] 5,885,000 7,581,642
- --------------------------------------------------------------------------------
Morgan Stanley, 10.09% Sr.
Unsec. Nts., 5/3/17 3 [BRR] 4,410,000 2,314,736
---------------
34,506,164
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--1.1%
African Development Bank,
9.25% Bonds, 1/18/08 [NGN] 218,200,000 1,808,016
- --------------------------------------------------------------------------------
AIB Mortgage Bank, 3.75%
Sec. Bonds, Series 2, 4/30/13 [EUR] 1,690,000 2,170,192
- --------------------------------------------------------------------------------
Banco Bilbao Vizcaya
Argentaria SA, 4.25% Sec.
Bonds, 7/15/14 [EUR] 3,340,000 4,365,823
- --------------------------------------------------------------------------------
Banco BMG SA, 9.15% Nts.,
1/15/16 2 2,980,000 3,192,474
- --------------------------------------------------------------------------------
Banco de Credito del Peru,
6.95% Sub. Nts., 11/7/21 1,2 1,345,000 1,368,538
- --------------------------------------------------------------------------------
Bank of Ireland Mortgage
Bank, 4% Sr. Sec. Nts.,
Series 6, Tranche 1, 7/5/13 [EUR] 1,680,000 2,180,874
- --------------------------------------------------------------------------------
Bank Plus Corp., 12% Sr. Nts.,
7/18/07 3 7,000 7,044
- --------------------------------------------------------------------------------
Depfa ACS Bank, 3.875% Sec.
Nts., 11/14/16 [EUR] 1,920,000 2,413,506
- --------------------------------------------------------------------------------
HSBC Bank plc:
11.601% Sr. Unsec. Nts., 1/12/10 3,9 2,510,000 1,706,800
12.278% Sr. Unsec. Nts., 3/9/09 3,9 1,960,000 1,477,840
9.751% Sr. Unsec. Nts., 7/8/09 3,9 1,960,000 1,562,120
- --------------------------------------------------------------------------------
ICICI Bank Ltd., 6.375% Bonds,
4/30/22 1,2 2,795,000 2,660,667
- --------------------------------------------------------------------------------
Inter-American
Development Bank:
6.26% Nts., 12/8/09 1 [BRR] 920,000 485,659
7.889% Nts., 1/25/12 1 [COP] 883,571,436 477,855
- --------------------------------------------------------------------------------
Ongko International Finance
Co. BV, 10.50% Sec. Nts., 3/29/10 3,4,5 90,000 --
- --------------------------------------------------------------------------------
Salisbury International
Investments Ltd., 9.508% Sec.
Nts., Series 2006-003, Tranche
E, 7/20/11 1,3 1,100,000 1,100,000
---------------
26,977,408
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.1%
Ace Cash Express, Inc.,
10.25% Sr. Nts., 10/1/14 3 250,000 256,875
19 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CONSUMER FINANCE Continued
SLM Corp., 4.50% Nts.,
Series A, 7/26/10 $ 3,445,000 $ 3,187,510
---------------
3,444,385
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--1.2%
AAC Group Holding Corp.,
0%/10.25% Sr. Unsec. Disc. Nts.,
10/1/12 12 100,000 90,500
- --------------------------------------------------------------------------------
Astana-finance:
7.625% Unsec. Bonds, 2/16/09 1,210,000 1,205,765
9% Sr. Unsec. Unsub. Bonds,
11/16/11 910,000 912,152
- --------------------------------------------------------------------------------
Autopistas del Nordeste
Cayman Ltd., 9.39% Nts., 1/15/26 2 3,946,539 4,222,797
- --------------------------------------------------------------------------------
BA Covered Bond Issuer, 4.25%
Sec. Nts., 4/5/17 [EUR] 2,790,000 3,581,516
- --------------------------------------------------------------------------------
Banco Invex SA, 24.639% Mtg.
Backed Certificates,
Series 062U, 3/13/34 1,14 [MXN] 5,610,000 1,954,030
- --------------------------------------------------------------------------------
Cloverie plc, 9.60% Sec. Nts.,
Series 2005-93, 12/20/10 1,3 1,100,000 1,108,800
- --------------------------------------------------------------------------------
Depfa ACS Bank, 3.50%
Sec. Nts., 3/16/11 [EUR] 2,220,000 2,883,236
- --------------------------------------------------------------------------------
Halyk Savings Bank Kazakhstan
Europe BV, 7.75% Nts., 5/13/13 2 1,625,000 1,665,625
- --------------------------------------------------------------------------------
JP Morgan Hipotecaria
su Casita:
6.10% Mtg. Backed
Certificates,
Series 06U, 9/25/35 [MXN] 4,027,800 1,356,469
6.47% Sec. Nts., 8/26/35 3 [MXN] 7,112,700 653,875
- --------------------------------------------------------------------------------
JPMorgan, Red Square Capital
Ltd., 9% CDO Nts., 11/20/08 3 [RUR] 62,000,000 2,412,564
- --------------------------------------------------------------------------------
JSG Funding plc, 7.75% Sr.
Unsec. Sub. Nts., 4/1/15 330,000 332,063
- --------------------------------------------------------------------------------
Nell AF Sarl, 8.375% Sr. Nts.,
8/15/15 2 850,000 818,125
- --------------------------------------------------------------------------------
Piazza Vittoria Finance SrL,
6.20% Asset-Backed Nts.,
7/20/10 1 [EUR] 5,405,282 7,278,494
- --------------------------------------------------------------------------------
Tiers-BSP, 0%/8.60%
Collateralized Trust, Cl. A,
6/15/97 12 2,695,000 1,269,226
- --------------------------------------------------------------------------------
Universal City Florida:
8.375% Sr. Unsec. Nts., 5/1/10 130,000 133,575
10.106% Sr. Unsec. Nts., 5/1/10 1 130,000 133,250
---------------
32,012,062
- --------------------------------------------------------------------------------
REAL ESTATE--0.1%
Felcor Lodging LP, 8.50%
Sr. Nts., 6/1/11 1 925,000 977,031
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
REAL ESTATE Continued
Host Hotels & Resorts LP,
6.875% Sr. Unsub. Nts., 11/1/14 $ 375,000 $ 372,656
- --------------------------------------------------------------------------------
Host Marriott LP:
6.375% Sr. Nts., Series O, 3/15/15 730,000 704,450
6.75% Sr. Nts., Series Q, 6/1/16 500,000 492,500
- --------------------------------------------------------------------------------
Ventas Realty LP/Ventas
Capital Corp., 6.75% Sr. Nts.,
4/1/17 450,000 446,625
---------------
2,993,262
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--1.2%
Banco Hipotecario SA,
9.75% Sr. Unsec. Nts., 4/27/16 2 2,340,000 2,421,900
- --------------------------------------------------------------------------------
Northern Rock plc, 3.625% Sr.
Sec. Nts., Series 4, Tranche 1,
3/28/13 [EUR] 1,690,000 2,154,456
- --------------------------------------------------------------------------------
WM Covered Bond Program:
3.875% Sec. Nts., Series1,
9/27/11 [EUR] 7,760,000 10,131,744
- --------------------------------------------------------------------------------
4% Sec. Mtg. Nts., Series 2,
9/27/16 [EUR] 12,640,000 15,950,898
---------------
30,658,998
- --------------------------------------------------------------------------------
HEALTH CARE--0.7%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--0.0%
Angiotech Pharmaceuticals,
Inc., 7.75% Sr. Sub. Nts., 4/1/14 325,000 307,938
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.7%
Community Health Systems,
Inc., 6.50% Sr. Unsec. Sub. Nts.,
12/15/12 400,000 417,488
- --------------------------------------------------------------------------------
DaVita, Inc.:
6.625% Sr. Unsec. Nts., 3/15/13 465,000 456,281
7.25% Sr. Unsec. Sub. Nts., 3/15/15 1,975,000 1,960,188
- --------------------------------------------------------------------------------
Fresenius Medical Care
Capital Trust II, 7.875% Nts.,
2/1/08 900,000 906,750
- --------------------------------------------------------------------------------
Fresenius Medical Care
Capital Trust III, 7.375% Nts.,
2/1/08 [DEM] 25,000 17,517
- --------------------------------------------------------------------------------
Fresenius Medical Care
Capital Trust IV, 7.875% Trust
Preferred Securities, 6/15/11 600,000 624,000
- --------------------------------------------------------------------------------
Genesis HealthCare Corp.,
8% Sr. Sub. Nts., 10/15/13 200,000 213,480
- --------------------------------------------------------------------------------
HCA, Inc., 6.375% Nts., 1/15/15 3,877,000 3,305,143
- --------------------------------------------------------------------------------
HealthSouth Corp., 10.75%
Sr. Unsec. Nts., 6/15/16 875,000 953,750
- --------------------------------------------------------------------------------
Omnicare, Inc.:
6.75% Sr. Sub. Nts., 12/15/13 230,000 220,800
6.875% Sr. Sub. Nts., 12/15/15 285,000 272,175
20 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES Continued
Psychiatric Solutions, Inc., 7.75%
Sr. Unsec. Sub. Nts., 7/15/15 $ 220,000 $ 218,625
- --------------------------------------------------------------------------------
Select Medical Corp., 7.625% Sr.
Unsec. Sub. Nts., 2/1/15 1,319,000 1,187,100
- --------------------------------------------------------------------------------
Tenet Healthcare Corp.:
6.375% Sr. Nts., 12/1/11 1,282,000 1,177,838
7.375% Nts., 2/1/13 119,000 108,141
9.875% Sr. Nts., 7/1/14 1,932,000 1,922,340
- --------------------------------------------------------------------------------
Triad Hospitals, Inc., 7% Sr. Sub.
Nts., 11/15/13 100,000 105,370
- --------------------------------------------------------------------------------
US Oncology, Inc.:
9% Sr. Unsec. Nts., 8/15/12 300,000 310,500
10.75% Sr. Unsec. Sub. Nts., 8/15/14 300,000 322,500
- --------------------------------------------------------------------------------
Vanguard Health Holding Co. I
LLC, 0%/11.25% Sr. Disc. Nts.,
10/1/15 12 2,615,000 2,144,300
---------------
16,844,286
- --------------------------------------------------------------------------------
PHARMACEUTICALS--0.0%
Valeant Pharmaceuticals
International, Inc., 7% Sr. Nts.,
12/15/11 3 350,000 343,000
- --------------------------------------------------------------------------------
INDUSTRIALS--1.5%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--0.2%
Alliant Techsystems, Inc.,
6.75% Sr. Sub. Nts., 4/1/16 1,335,000 1,301,625
- --------------------------------------------------------------------------------
Bombardier, Inc., 8% Sr. Nts.,
11/15/14 2 400,000 416,000
- --------------------------------------------------------------------------------
DRS Technologies, Inc.:
6.625% Sr. Nts., 2/1/16 970,000 940,900
7.625% Sr. Sub. Nts., 2/1/18 205,000 208,075
- --------------------------------------------------------------------------------
L-3 Communications Corp.:
5.875% Sr. Sub. Nts., 1/15/15 583,000 543,648
6.125% Sr. Unsec. Sub. Nts.,
1/15/14 400,000 379,000
- --------------------------------------------------------------------------------
6.375% Sr. Unsec. Sub. Nts.,
Series B, 10/15/15 515,000 489,250
7.625% Sr. Sub. Nts., 6/15/12 500,000 514,375
---------------
4,792,873
- --------------------------------------------------------------------------------
AIRLINES--0.0%
ATA Holdings Corp., 13% Sr.
Unsec. Nts., 2/1/09 3,4,5 735,000 --
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--0.1%
Dayton Superior Corp., 13% Sr.
Unsec. Sub. Nts., 6/15/09 3 200,000 204,500
- --------------------------------------------------------------------------------
Goodman Global Holding Co.,
Inc., 7.875% Sr. Unsec. Sub. Nts.,
12/15/12 2,405,000 2,392,975
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
BUILDING PRODUCTS Continued
Nortek, Inc., 8.50% Sr. Unsec.
Unsub. Nts., 9/1/14 $ 1,250,000 $ 1,196,875
---------------
3,794,350
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.2%
Allied Waste North
America, Inc.:
7.375% Sr. Sec. Nts.,
Series B, 4/15/14 1,300,000 1,290,250
9.25% Sr. Sec. Debs.,
Series B, 9/1/12 434,000 456,243
- --------------------------------------------------------------------------------
ARAMARK Corp., 8.50% Sr.
Nts., 2/1/15 2 685,000 700,413
- --------------------------------------------------------------------------------
Cenveo Corp., 7.875% Sr. Sub.
Nts., 12/1/13 1,500,000 1,477,500
- --------------------------------------------------------------------------------
Corrections Corp. of America:
6.25% Sr. Unsec. Sub. Nts.,
3/15/13 460,000 443,900
7.50% Sr. Nts., 5/1/11 200,000 203,750
- --------------------------------------------------------------------------------
FTI Consulting, Inc., 7.75% Sr.
Unsec. Nts., 10/1/16 535,000 548,375
---------------
5,120,431
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--0.3%
Great Lakes Dredge & Dock
Co., 7.75% Sr. Unsec. Sub. Nts.,
12/15/13 3 120,000 118,800
- --------------------------------------------------------------------------------
IIRSA Norte Finance Ltd.,
8.75% Sr. Nts., 5/30/24 2 7,095,120 8,265,814
---------------
8,384,614
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.1%
Belden & Blake Corp.,
8.75% Sec. Nts., 7/15/12 325,000 334,750
- --------------------------------------------------------------------------------
Eletropaulo Metropolitana SA,
19.125% Nts., 6/28/10 2 [BRR] 1,115,000 703,739
- --------------------------------------------------------------------------------
UCAR Finance, Inc., 10.25% Sr.
Nts., 2/15/12 3 172,000 181,030
---------------
1,219,519
- --------------------------------------------------------------------------------
MACHINERY--0.2%
Case New Holland, Inc.:
7.125% Sr. Unsec. Nts., 3/1/14 500,000 508,750
9.25% Sr. Nts., 8/1/11 200,000 210,640
- --------------------------------------------------------------------------------
Douglas Dynamics LLC,
7.75% Sr. Nts., 1/15/12 3 700,000 668,500
- --------------------------------------------------------------------------------
Greenbrier Cos., Inc., 8.375%
Sr. Unsec. Nts., 5/15/15 380,000 384,750
- --------------------------------------------------------------------------------
Manitowoc Co., Inc. (The),
10.50% Sr. Sub. Nts., 8/1/12 3 325,000 342,875
21 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MACHINERY Continued
Milacron Escrow Corp.,
11.50% Sr. Sec. Nts., 5/15/11 3 $ 700,000 $ 680,750
- --------------------------------------------------------------------------------
TriMas Corp., 9.875% Sr. Unsec.
Sub. Nts., 6/15/12 1,002,000 1,034,565
- --------------------------------------------------------------------------------
Trinity Industries, Inc., 6.50%
Sr. Nts., 3/15/14 300,000 294,750
---------------
4,125,580
- --------------------------------------------------------------------------------
ROAD & RAIL--0.1%
Avis Budget Car Rental LLC:
7.75% Sr. Unsec. Unsub. Nts.,
5/15/16 335,000 343,375
7.86% Sr. Unsec. Unsub. Nts.,
5/15/14 1 135,000 137,700
- --------------------------------------------------------------------------------
Hertz Corp.:
8.875% Sr. Unsec. Nts., 1/1/14 610,000 638,975
10.50% Sr. Unsec. Sub. Nts.,
1/1/16 1,135,000 1,259,850
- --------------------------------------------------------------------------------
Kansas City Southern Railway
Co. (The), 7.50% Sr. Nts., 6/15/09 400,000 399,000
- --------------------------------------------------------------------------------
Stena AB:
7% Sr. Unsec. Nts., 12/1/16 150,000 150,750
7.50% Sr. Unsec. Nts., 11/1/13 387,000 392,805
---------------
3,322,455
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.2%
Ashtead Capital, Inc., 9% Nts.,
8/15/16 2 385,000 405,213
- --------------------------------------------------------------------------------
H&E Equipment Services, Inc.,
8.375% Sr. Unsec. Nts., 7/15/16 420,000 443,100
- --------------------------------------------------------------------------------
Interline Brands, Inc., 8.125%
Sr. Sub. Nts., 6/15/14 570,000 577,125
- --------------------------------------------------------------------------------
United Rentals, Inc., 7% Sr.
Sub. Nts., 2/15/14 11 4,000,000 3,920,000
---------------
5,345,438
- --------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.1%
Horizon Lines LLC, 9% Nts.,
11/1/12 236,000 250,750
- --------------------------------------------------------------------------------
Transshipment Megahub Bhd:
5.15% Nts., 11/2/12 3 [MYR] 2,000,000 573,845
6.70% Bonds, Series F,
11/2/12 3 [MYR] 1,000,000 307,690
6.85% Nts., 11/2/12 3 [MYR] 2,000,000 619,435
6.95% Nts., 11/2/12 3 [MYR] 1,000,000 311,050
---------------
2,062,770
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--0.4%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--0.1%
NXP BV/NXP Funding LLC,
9.50% Sr. Unsec. Unsub. Nts.,
10/15/15 2,586,000 2,560,140
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
Orion Network Systems, Inc.,
12.50% Sr. Unsub. Disc. Nts.,
1/15/07 4,5 $ 675,000 $ 7
---------------
2,560,147
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--0.1%
RBS Global & Rexnord Corp.:
9.50% Sr. Nts., 8/1/14 2 585,000 602,550
11.75% Sr. Sub. Nts., 8/1/16 2 930,000 1,004,400
---------------
1,606,950
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--0.0%
Exodus Communications, Inc.,
10.75% Sr. Nts., 12/15/09 3,4,5 [EUR] 338,620 --
- --------------------------------------------------------------------------------
NorthPoint Communications
Group, Inc., 12.875% Nts.,
2/15/10 3,4,5 200,173 --
- --------------------------------------------------------------------------------
PSINet, Inc., 10.50% Sr. Unsec. Nts.,
12/1/06 3,4,5 [EUR] 100,000 --
---------------
--
- --------------------------------------------------------------------------------
IT SERVICES--0.2%
DI Finance/DynCorp International
LLC, 9.50% Sr. Unsec. Sub. Nts.,
Series B, 2/15/13 607,000 648,731
- --------------------------------------------------------------------------------
iPayment Holdings, Inc., 9.75% Sr.
Unsec. Sub. Nts., 5/15/14 415,000 417,075
- --------------------------------------------------------------------------------
Iron Mountain, Inc., 7.75% Sr. Sub.
Nts., 1/15/15 400,000 392,000
- --------------------------------------------------------------------------------
SunGard Data Systems, Inc.:
9.125% Sr. Unsec. Nts., 8/15/13 1,535,000 1,579,131
10.25% Sr. Unsec. Sub. Nts.,
8/15/15 1,820,000 1,933,750
---------------
4,970,687
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.0%
Freescale Semiconductor, Inc.,
10.125% Sr. Sub. Nts., 12/15/16 2 1,190,000 1,124,550
- --------------------------------------------------------------------------------
MATERIALS--1.9%
- --------------------------------------------------------------------------------
CHEMICALS--0.3%
Equistar Chemicals LP/Equistar
Funding Corp.:
8.75% Sr. Unsec. Nts., 2/15/09 550,000 572,000
10.125% Sr. Unsec. Nts., 9/1/08 77,086 80,555
10.625% Sr. Unsec. Nts., 5/1/11 343,000 362,723
- --------------------------------------------------------------------------------
Huntsman International LLC:
7.375% Sr. Unsub. Nts., 1/15/15 790,000 833,450
7.875% Sr. Unsec. Sub. Nts.,
11/15/14 375,000 403,594
- --------------------------------------------------------------------------------
Huntsman LLC:
11.50% Sr. Unsec. Nts., 7/15/12 1 198,000 220,770
11.625% Sr. Unsec. Nts., 10/15/10 13,000 14,008
22 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CHEMICALS Continued
Ineos Group Holdings plc,
8.50% Nts., 2/15/16 2 $ 1,230,000 $ 1,208,475
- --------------------------------------------------------------------------------
KI Holdings, Inc., 0%/9.875%
Sr. Unsec. Sub. Disc. Nts.,
11/15/14 12 350,000 301,000
- --------------------------------------------------------------------------------
Lyondell Chemical Co.:
8% Sr. Unsec. Nts., 9/15/14 1,125,000 1,161,563
8.25% Sr. Unsec. Nts., 9/15/16 600,000 630,000
10.50% Sr. Sec. Nts., 6/1/13 600,000 651,000
- --------------------------------------------------------------------------------
Rockwood Specialties Group,
Inc., 7.50% Sr. Sub. Nts.,
11/15/14 100,000 101,000
- --------------------------------------------------------------------------------
Tronox Worldwide LLC/Tronox
Finance Corp., 9.50% Sr. Unsec.
Nts., 12/1/12 237,000 248,258
---------------
6,788,396
- --------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--0.2%
C10 Capital SPV Ltd., 6.722%
Unsec. Perpetual Debs. 2,15 4,270,000 4,168,417
- --------------------------------------------------------------------------------
NTK Holdings, Inc., 0%/10.75%
Sr. Disc. Nts., 3/1/14 12 1,225,000 894,250
---------------
5,062,667
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--0.7%
Ball Corp., 6.625% Sr. Nts.,
3/15/18 1,035,000 996,188
- --------------------------------------------------------------------------------
Crown Americas, Inc., 7.75% Sr.
Nts., 11/15/15 1,435,000 1,449,350
- --------------------------------------------------------------------------------
Graham Packaging Co., Inc.:
8.50% Sr. Unsec. Nts., 10/15/12 200,000 202,250
9.875% Sr. Unsec. Sub. Nts.,
10/15/14 1,800,000 1,829,250
- --------------------------------------------------------------------------------
Graphic Packaging
International Corp.:
8.50% Sr. Nts., 8/15/11 800,000 822,000
9.50% Sr. Sub. Nts., 8/15/13 1,050,000 1,095,938
- --------------------------------------------------------------------------------
Jefferson Smurfit Corp., 8.25%
Sr. Unsec. Nts., 10/1/12 1,575,000 1,571,063
- --------------------------------------------------------------------------------
MDP Acquisitions plc, 9.625%
Sr. Nts., 10/1/12 37,000 38,943
- --------------------------------------------------------------------------------
Owens-Brockway Glass
Container, Inc.:
7.75% Sr. Sec. Nts., 5/15/11 450,000 464,063
8.25% Sr. Unsec. Nts., 5/15/13 1,719,000 1,787,760
8.75% Sr. Sec. Nts., 11/15/12 928,000 972,080
8.875% Sr. Sec. Nts., 2/15/09 176,000 179,960
- --------------------------------------------------------------------------------
Pliant Corp., 11.85% Sr. Sec.
Nts., 6/15/09 5,13 427,529 461,731
- --------------------------------------------------------------------------------
Solo Cup Co., 8.50% Sr. Sub.
Nts., 2/15/14 1,675,000 1,474,000
- --------------------------------------------------------------------------------
Stone Container Corp., 8.375%
Sr. Nts., 7/1/12 470,000 472,938
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING Continued
Vitro SA de CV:
8.625% Sr. Unsec. Unsub. Nts.,
2/1/12 2 $ 1,415,000 $ 1,443,300
9.125% Sr. Unsec. Nts., 2/1/17 2 2,405,000 2,477,150
---------------
17,737,964
- --------------------------------------------------------------------------------
METALS & MINING--0.6%
AK Steel Corp.:
7.75% Sr. Unsec. Nts., 6/15/12 1,019,000 1,024,095
7.875% Sr. Unsec. Nts., 2/15/09 33,000 33,083
- --------------------------------------------------------------------------------
Alrosa Finance SA, 8.875%
Nts., 11/17/14 2 11,230,000 12,667,440
- --------------------------------------------------------------------------------
Century Aluminum Co., 7.50%
Sr. Unsec. Nts., 8/15/14 600,000 608,250
- --------------------------------------------------------------------------------
International Utility Structures,
Inc., 13% Unsec. Sub. Nts.,
2/1/08 3,4,5 71,000 --
- --------------------------------------------------------------------------------
Ispat Inland ULC, 9.75% Sr. Sec.
Nts., 4/1/14 585,000 648,630
- --------------------------------------------------------------------------------
Koppers Industry, Inc., 9.875%
Sr. Sec. Nts., 10/15/13 3 204,000 218,790
- --------------------------------------------------------------------------------
Novelis, Inc., 7.25% Sr. Unsec.
Nts., 2/15/15 1 1,675,000 1,727,344
---------------
16,927,632
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.1%
Catalyst Paper Corp., 8.625% Sr.
Unsec. Nts., Series D, 6/15/11 500,000 486,250
- --------------------------------------------------------------------------------
Domtar, Inc., 7.125% Nts.,
8/15/15 500,000 486,875
- --------------------------------------------------------------------------------
Mercer International, Inc.,
9.25% Sr. Nts., 2/15/13 225,000 220,781
- --------------------------------------------------------------------------------
Norske Skog Canada Ltd.,
7.375% Sr. Unsec. Nts., 3/1/14 700,000 632,625
- --------------------------------------------------------------------------------
Verso Paper Holdings
LLC/Verson Paper, Inc.:
9.106% Sr. Sec. Nts., 8/1/14 1,2 460,000 471,500
11.375% Sr. Sub. Nts., 8/1/16 2 460,000 493,350
---------------
2,791,381
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.1%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.9%
Citizens Communications Co.,
6.25% Sr. Nts., 1/15/13 2 4,645,000 4,476,619
- --------------------------------------------------------------------------------
Intelsat Bermuda Ltd., 11.25%
Sr. Unsec. Nts., 6/15/16 530,000 596,250
- --------------------------------------------------------------------------------
Intelsat Subsidiary Holding
Co. Ltd.:
8.25% Sr. Nts., 1/15/13 1 1,000,000 1,020,000
8.625% Sr. Nts., 1/15/15 815,000 839,450
- --------------------------------------------------------------------------------
Nordic Telephone Co.
Holdings ApS, 8.875% Sr. Nts.,
5/1/16 2 345,000 367,425
23 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES Continued
NTL Cable plc, 9.125% Sr. Nts.,
8/15/16 $ 355,000 $ 373,638
- --------------------------------------------------------------------------------
PanAmSat Corp.:
9% Sr. Unsec. Nts., 6/15/16 900,000 947,250
9% Sr. Unsec. Nts., 8/15/14 1,350,000 1,414,125
- --------------------------------------------------------------------------------
Qwest Capital Funding, Inc.,
7.90% Unsec. Nts., 8/15/10 1,719,000 1,757,678
- --------------------------------------------------------------------------------
Qwest Corp.:
7.50% Sr. Unsec. Nts., 10/1/14 625,000 643,750
8.875% Unsec. Unsub. Nts.,
3/15/12 5,405,000 5,850,913
- --------------------------------------------------------------------------------
Telefonica del Peru SA, 8% Sr.
Unsec. Bonds, 4/11/16 2 [PEN] 3,290,100 1,151,379
- --------------------------------------------------------------------------------
Teligent, Inc., 11.50% Sr. Nts.,
12/1/07 3,4,5 500,000 --
- --------------------------------------------------------------------------------
Time Warner Telecom
Holdings, Inc., 9.25% Sr. Unsec.
Unsub. Nts., 2/15/14 1,700,000 1,810,500
- --------------------------------------------------------------------------------
Valor Telecommunications
Enterprises LLC, 7.75% Sr.
Unsec. Sub. Nts., 2/15/15 225,000 236,844
- --------------------------------------------------------------------------------
West Corp.:
9.50% Sr. Unsec. Nts., 10/15/14 1,080,000 1,112,400
11% Sr. Unsec. Sub. Nts.,
10/15/16 470,000 493,500
- --------------------------------------------------------------------------------
Windstream Corp.:
8.125% Sr. Unsec. Unsub. Nts.,
8/1/13 575,000 603,750
8.625% Sr. Unsec. Unsub. Nts.,
8/1/16 875,000 929,688
- --------------------------------------------------------------------------------
Winstar Communications, Inc.,
12.75% Sr. Nts., 4/15/10 3,4,5 250,000 --
---------------
24,625,159
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.2%
Alamosa Delaware, Inc., 11%
Sr. Unsec. Nts., 7/31/10 19,000 20,130
- --------------------------------------------------------------------------------
America Movil SAB de CV,
8.46% Bonds, 12/18/36 2 [MXN] 52,700,000 4,965,366
- --------------------------------------------------------------------------------
American Cellular Corp., 10%
Sr. Nts., Series B, 8/1/11 185,000 194,713
- --------------------------------------------------------------------------------
American Tower Corp.:
7.125% Sr. Unsec. Nts., 10/15/12 250,000 256,875
7.50% Sr. Nts., 5/1/12 400,000 413,000
- --------------------------------------------------------------------------------
CellNet Data Systems, Inc., Sr.
Unsec. Disc. Nts., 10/1/07 3,4,5 400,000 --
- --------------------------------------------------------------------------------
Centennial Cellular Operating
Co. LLC/Centennial
Communications Corp.,
10.125% Sr. Nts., 6/15/13 2,014,000 2,170,085
- --------------------------------------------------------------------------------
Centennial Communications
Corp., 10% Sr. Unsec. Nts.,
1/1/13 200,000 215,500
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES Continued
Cricket Communications, Inc.,
9.375% Sr. Unsec. Nts., 11/1/14 $ 935,000 $ 970,063
- --------------------------------------------------------------------------------
Dobson Cellular Systems, Inc.,
8.375% Sr. Sec. Nts., 11/1/11 280,000 294,000
- --------------------------------------------------------------------------------
Dobson Communications Corp.:
8.875% Sr. Nts., 10/1/13 859,000 901,950
9.606% Sr. Unsec. Nts., 10/15/12 1 145,000 148,625
- --------------------------------------------------------------------------------
Nextel Communications, Inc.,
7.375% Sr. Nts., Series D, 8/1/15 16,470,000 16,477,197
- --------------------------------------------------------------------------------
Rogers Wireless, Inc.:
7.50% Sec. Nts., 3/15/15 882,000 946,194
8% Sr. Sub. Nts., 12/15/12 800,000 852,173
- --------------------------------------------------------------------------------
Rural Cellular Corp., 9.875%
Sr. Nts., 2/1/10 1,400,000 1,470,000
---------------
30,295,871
- --------------------------------------------------------------------------------
UTILITIES--1.5%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.8%
Edison Mission Energy:
7% Sr. Nts., 5/15/17 2 3,440,000 3,259,400
7.50% Sr. Unsec. Nts., 6/15/13 360,000 358,200
7.75% Sr. Unsec. Nts., 6/15/16 500,000 500,000
- --------------------------------------------------------------------------------
ISA Capital do Brasil SA:
7.875% Sr. Nts., 1/30/12 2 1,130,000 1,158,250
8.80% Sr. Nts., 1/30/17 2 1,410,000 1,512,225
- --------------------------------------------------------------------------------
Majapahit Holding BV:
7.25% Nts., 10/17/11 2 1,990,000 2,022,338
7.75% Nts., 10/17/16 2 1,835,000 1,867,113
- --------------------------------------------------------------------------------
National Power Corp.:
5.875% Unsec. Unsub. Bonds,
12/19/16 [PHP] 109,600,000 2,187,450
6.875% Nts., 11/2/16 2 1,324,000 1,333,930
9.625% Unsec. Bonds, 5/15/28 2,270,000 2,894,250
- --------------------------------------------------------------------------------
Reliant Energy, Inc., 6.75% Sr.
Sec. Nts., 12/15/14 200,000 205,000
- --------------------------------------------------------------------------------
Sierra Pacific Resources, 6.75%
Sr. Unsec. Nts., 8/15/17 1,777,000 1,755,783
---------------
19,053,939
- --------------------------------------------------------------------------------
ENERGY TRADERS--0.7%
AES Corp. (The), 8.75% Sr. Sec.
Nts., 5/15/13 2 2,000,000 2,120,000
- --------------------------------------------------------------------------------
AES Dominicana Energia
Finance SA, 11% Sr. Nts., 12/13/15 2 2,313,000 2,463,345
- --------------------------------------------------------------------------------
AES Panama SA, 6.35% Sr. Nts.,
12/21/16 2 1,100,000 1,065,771
- --------------------------------------------------------------------------------
AES Red Oak LLC, 8.54% Sr.
Sec. Bonds, Series A, 11/30/19 403,703 442,055
- --------------------------------------------------------------------------------
Dynegy Holdings, Inc.:
6.875% Sr. Unsec. Unsub. Nts.,
4/1/11 621,000 613,238
8.75% Sr. Nts., 2/15/12 988,000 1,022,580
24 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ENERGY TRADERS Continued
Mirant Americas Generation
LLC:
8.30% Sr. Unsec. Nts., 5/1/11 $ 3,700,000 $ 3,838,750
9.125% Sr. Unsec. Nts., 5/1/31 500,000 550,000
- --------------------------------------------------------------------------------
Mirant Mid-Atlantic LLC,
8.625% Sec. Pass-Through
Certificates, Series A, 6/30/12 699,118 734,511
- --------------------------------------------------------------------------------
NRG Energy, Inc.:
7.375% Sr. Nts., 1/15/17 11 2,000,000 2,012,500
7.375% Sr. Nts., 2/1/16 3,615,000 3,633,075
---------------
18,495,825
- --------------------------------------------------------------------------------
GAS UTILITIES--0.0%
SEMCO Energy, Inc., 7.125% Sr.
Nts., 5/15/08 150,000 151,342
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.0%
CMS Energy Corp.:
7.50% Sr. Nts., 1/15/09 19,000 19,579
7.75% Sr. Nts., 8/1/10 200,000 208,978
8.50% Sr. Nts., 4/15/11 250,000 267,155
- --------------------------------------------------------------------------------
NorthWestern Corp., 5.875% Sr.
Sec. Nts., 11/1/14 90,000 87,467
---------------
583,179
---------------
Total Corporate Bonds
and Notes
(Cost $521,734,403) 522,381,824
SHARES
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.1%
- --------------------------------------------------------------------------------
AmeriKing, Inc., 13% Cum. Sr.
Exchangeable, Non-Vtg. 3,4,13 4,253 --
- --------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc.,
11.75% Cum. Exchangeable,
Series B, Non-Vtg. 3,4 5,000 --
- --------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25%
Exchangeable, Non-Vtg. 3,4,13 151 --
- --------------------------------------------------------------------------------
ION Media Networks, Inc.:
14.25% Cum., Non-Vtg. 4,13 124 1,114,439
9.75% Cv., Series AI 3,4,13 1 7,380
- --------------------------------------------------------------------------------
Sovereign Real Estate
Investment Trust, 12%
Non-Cum., Series A 3 4,600 658,950
---------------
Total Preferred Stocks
(Cost $2,004,351) 1,780,769
- --------------------------------------------------------------------------------
COMMON STOCKS--1.3%
- --------------------------------------------------------------------------------
Adelphia Recovery Trust 3,4 923,634 92,363
- --------------------------------------------------------------------------------
Arco Capital Corp. Ltd. 3,4 690,638 10,359,570
- --------------------------------------------------------------------------------
AT&T, Inc. 137,145 5,691,518
- --------------------------------------------------------------------------------
Cebridge Connections
Holding LLC 3,4 3,734 --
- --------------------------------------------------------------------------------
Constellation Energy Group, Inc. 61,508 5,361,652
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS Continued
- --------------------------------------------------------------------------------
DaimlerChrysler AG 10 30,583 $ 2,812,107
- --------------------------------------------------------------------------------
Global Aero Logistics, Inc. 3,4 2,168 33,604
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The) 2,168 469,914
- --------------------------------------------------------------------------------
Premier Holdings Ltd. 3,4 18,514 --
- --------------------------------------------------------------------------------
Public Service Enterprise Group,
Inc. 63,147 5,543,044
- --------------------------------------------------------------------------------
Revlon, Inc., Cl. A 4 733,200 1,004,484
- --------------------------------------------------------------------------------
Societe des Autoroutes
Paris-Rhin-Rhone 3,346 340,555
- --------------------------------------------------------------------------------
Telus Corp. 21,754 1,302,279
- --------------------------------------------------------------------------------
Time Warner Cable, Inc., Cl. A 4 3,210 125,736
- --------------------------------------------------------------------------------
Unibail-Rodamco 1,738 443,910
---------------
Total Common Stocks
(Cost $33,572,329) 33,580,736
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
ATA Holdings Corp. Wts., Exp.
2/28/11 4 266 2,087
- --------------------------------------------------------------------------------
Long Distance International, Inc.
Wts., Exp. 4/13/08 3,4 200 --
- --------------------------------------------------------------------------------
Venezuela (Republic of) Oil
Linked Payment Obligation
Wts., Exp. 4/15/20 3,4 2,300 86,250
---------------
Total Rights, Warrants and
Certificates (Cost $2,025) 88,337
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
STRUCTURED NOTES--13.2%
- --------------------------------------------------------------------------------
Aiolos Ltd. Catastrophe Linked
Nts., 8.694%, 4/8/09 1,2 [EUR] 800,000 1,081,437
- --------------------------------------------------------------------------------
Calabash Re Ltd. Catastrophe
Linked Nts., Cl. A-1, 13.86%,
6/1/09 1,2 1,750,000 1,781,150
- --------------------------------------------------------------------------------
Cascadia Ltd. Catastrophe
Linked Nts.:
8.485%, 6/13/08 1,2 500,000 499,805
9.36%, 8/31/09 1 1,130,000 1,142,430
- --------------------------------------------------------------------------------
Cat-Mex Ltd. Catastrophe
Linked Nts., Cl. A, 7.708%,
5/19/09 1,2 1,950,000 1,926,639
- --------------------------------------------------------------------------------
Champlain Ltd. Catastrophe
Linked Nts., Series A, 18.10%,
1/7/09 1,2 940,000 953,419
- --------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc.:
Argentina (Republic of)
Credit Linked Nts., 11.278%,
5/22/08 3,14 [ARP] 840,000 767,043
Argentina (Republic of)
Credit Linked Nts., 4%,
5/18/09 3 [ARP] 1,334,000 1,217,849
25 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc.: Continued
Argentina (Republic of) Unsec.
Credit Linked Nts., 20.616%,
4/16/10 3,14 [ARP] 1,134,005 $ 598,445
Brazil (Federal Republic of)
Credit Linked Nts., 10%,
1/5/10 1 [BRR] 10,670,000 5,450,141
Brazil (Federal Republic of)
Unsec. Credit Linked Nts., 10%,
1/5/10 [BRR] 2,927,000 1,567,883
Brazil (Federal Republic of)
Unsec. Credit Linked Nts., 10%,
1/5/10 [BRR] 4,619,000 2,474,223
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
14.809%, 1/5/10 9 [BRR] 2,480,096 996,014
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
15.427%, 1/2/09 9 [BRR] 2,231,957 993,159
Brazil (Federal Republic of)
Unsec. Credit Linked Nts.,
15.728%, 1/3/08 9 [BRR] 1,948,615 958,023
Colombia (Republic of) Credit
Linked Bonds, 11%,
7/24/20 [COP] 1,060,000,000 579,485
Colombia (Republic of) Credit
Linked Nts., Series II, 15%,
4/27/12 [COP] 552,359,546 330,206
Colombia (Republic of) Unsec.
Credit Linked Nts., 15%,
4/27/12 [COP] 1,200,000,000 717,373
Colombia (Republic of) Unsec.
Credit Linked Nts., 15%,
4/27/12 [COP] 1,034,000,000 618,136
Colombia (Republic of) Unsec.
Credit Linked Nts., 15%,
4/27/12 [COP] 927,000,000 554,170
Dominican Republic Credit
Linked Nts., 10.086%,
3/20/08 3,9 [DOP] 22,900,000 630,504
Dominican Republic Credit
Linked Nts., 10.105%,
7/2/07 9 [DOP] 16,200,000 488,688
Dominican Republic Credit
Linked Nts., 11.01%,
9/4/07 9 [DOP] 48,700,000 1,448,871
Dominican Republic Credit
Linked Nts., 22%,
10/3/11 [DOP] 25,600,000 998,800
Dominican Republic Credit
Linked Nts., 9.522%,
5/12/08 8,9 [DOP] 19,900,000 554,661
Dominican Republic Credit
Linked Nts., 9.826%,
3/20/08 9 [DOP] 21,220,000 599,412
Dominican Republic Credit
Linked Nts., 9.931%,
12/24/07 9 [DOP] 20,820,000 602,380
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Citigroup Global Markets
Holdings, Inc.: Continued
Dominican Republic Unsec.
Credit Linked Nts., 11.648%,
9/24/07 9 [DOP] 65,700,000 $ 1,945,471
Dominican Republic Unsec.
Credit Linked Nts., 15%,
3/12/12 [DOP] 49,300,000 1,561,766
Dominican Republic Unsec.
Credit Linked Nts., 9.696%,
3/10/08 9 [DOP] 33,430,000 947,674
Dominican Republic Unsec.
Credit Linked Nts., Series 007,
9.302%, 5/12/08 9 [DOP] 40,900,000 1,137,274
Egypt (The Arab Republic of)
Credit Linked Nts., 8.70%,
7/12/07 3,9 [EGP] 7,610,000 1,333,732
Egypt (The Arab Republic of)
Unsec. Credit Linked Nts.,
8.376%, 2/28/08 3,9 [EGP] 9,260,000 1,547,872
Egypt (The Arab Republic of)
Unsec. Credit Linked Nts.,
8.50%, 2/16/08 [EGP] 4,450,000 805,104
Ghana (Republic of) Credit
Linked Nts., 13.50%,
4/2/10 [GHC] 29,900,000,000 3,361,894
Nigeria (Federal Republic of)
Credit Linked Nts., 12.474%,
7/22/07 9 [NGN] 219,970,000 1,721,211
Nigeria (Federal Republic of)
Credit Linked Nts., 14.50%,
3/1/11 [NGN] 347,000,000 3,231,286
Nigeria (Federal Republic of)
Credit Linked Nts., Series II,
14.50%, 4/4/11 [NGN] 265,000,000 2,476,193
Renins Nonlife Ltd. Credit
Linked Nts., 12.50%, 5/30/12 3 4,310,000 4,310,000
Russian Federation Credit
Linked Nts., 5.315%, 1/20/11 10,000,000 10,360,400
Russian Federation Credit
Linked Nts., 7.65%,
12/4/08 1,3 [RUR] 21,350,000 842,397
Russian Federation Credit
Linked Nts., Series 2, 7.50%,
12/4/08 1 [RUR] 50,900,000 2,004,381
Ukraine Hryvnia Unsec.
Credit Linked Nts., 11.94%,
1/4/10 [UAH] 880,000 189,766
Zambia (Republic of) Credit
Linked Nts., 8.833%,
2/21/08 9 [ZMK] 6,515,000,000 1,601,271
- --------------------------------------------------------------------------------
Credit Suisse First Boston
International:
Boryspil Airport Total
Return Linked Nts., 10%,
4/19/10 1 [UAH] 4,840,000 992,094
EES Total Return Linked Nts.,
7.10%, 12/12/08 1 [RUR] 37,100,000 1,456,627
EESRRU Total Return Linked
Nts., 8.252%, 6/22/10 1 [RUR] 93,500,000 3,774,239
26 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Credit Suisse First Boston
International: Continued
Gazprom Total Return Linked
Nts., 6.79%, 10/29/09 [RUR] 73,800,000 $ 2,927,959
Gazprom Total Return Linked
Nts., Series 002, 6.95%,
8/6/09 [RUR] 72,600,000 2,940,294
Indonesia (Republic of) Total
Return Linked Nts., 12%,
9/16/11 3 [IDR] 14,800,000,000 1,817,099
Moitk Total Return Linked
Nts., 8.966%, 3/26/11 1,3 [RUR] 59,900,000 2,328,520
NAK Naftogaz of Ukraine
Credit Linked Nts., 5%,
1/20/09 3 3,890,000 4,021,404
Orenburgskaya IZHK Total
Return Linked Nts., 9.24%,
2/21/12 1,3 [RUR] 116,835,000 4,573,572
Romania (The State of) Total
Return Linked Nts.,
Series 0003, 5.882%,
8/15/07 9 [RON] 12,380,000 5,318,282
Rurail Total Return Linked Nts.,
6.67%, 1/22/09 1 [RUR] 49,210,000 1,930,179
Turkey (Republic of) Credit
Linked Nts., Series EMG 59,
21.41%, 7/16/08 9 [TRY] 3,485,000 2,220,607
Ukraine (Republic of) Credit
Linked Nts., Series EMG 13,
11.94%, 12/30/09 [UAH] 2,195,000 482,348
Vietnam Shipping Industry
Group Total Return Linked
Nts., 10.50%, 1/19/17 3 [VND] 14,609,000,000 963,470
- --------------------------------------------------------------------------------
Credit Suisse First Boston, Inc.
(Nassau Branch):
Russian Specialized
Construction and
Installation Administration
Credit Linked Nts., 8.59%,
5/20/10 1 [RUR] 97,250,000 3,791,784
Ukraine (Republic of) Credit
Linked Nts., 11.94%,
12/30/09 [UAH] 5,650,000 1,241,579
Ukraine (Republic of) Credit
Linked Nts., Series EMG
11, 11.94%, 12/30/09 [UAH] 661,000 145,254
Ukraine (Republic of) Credit
Linked Nts., Series NPC
12, 11.94%, 12/30/09 [UAH] 4,170,000 916,351
- --------------------------------------------------------------------------------
Credit Suisse Group, Russian
Moscoblgaz-Finance Total
Return Linked Nts., 9.25%,
6/24/12 8 [RUR] 106,500,000 4,143,169
- --------------------------------------------------------------------------------
Deutsche Bank AG:
Argentina (Republic of) Credit
Linked Nts., 11.278%,
12/21/11 3 [ARP] 2,990,000 2,740,027
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Deutsche Bank AG: Continued
Arrendadora Capita Corp. SA
de CV/Capita Corp. (The) de
Mexico SA de CV Credit
Linked Nts., 9.09%,
1/5/113 [MXN] 14,550,124 $ 1,353,531
Arrendadora Capita Corp. SA
de CV/Capita Corp. (The) de
Mexico SA de CV Credit
Linked Nts., 9.65%,
1/5/11 3 [MXN] 9,626,287 895,489
Brazil Real Credit Linked Nts.,
13.882%, 3/3/10 9 [BRR] 4,580,760 2,397,953
Brazil Real Credit Linked Nts.,
6%, 8/18/10 [BRR] 2,065,000 1,739,848
Colombia (Republic of) Credit
Linked Nts., 13.50%,
9/15/14 3 [COP] 2,002,000,000 1,193,123
Colombia (Republic of) Total
Return Linked Bonds,
Series 002, 11%, 7/28/20 [COP] 6,840,000,000 3,739,260
Egypt (The Arab Republic of)
Credit Linked Nts., 9.381%,
2/5/08 3,9 [EGP] 6,230,000 1,033,244
Egypt (The Arab Republic of)
Total Return Linked Nts.,
10.029%, 9/12/07 3,9 [EGP] 11,720,000 2,020,637
European Investment Bank,
Russian Federation Credit
Linked Nts., 5.502%, 1/19/10 9 705,000 606,653
Grupo TMM SA Credit
Linked Nts., 6%, 9/7/12 3 2,381,322 2,452,762
Halyk Bank of Kazakhstan
Total Return Linked Nts.,
Series I, 7.25%, 3/20/09 [KZT] 258,990,000 2,142,905
Indonesia (Republic of)
Credit Linked Nts., 9.50%,
6/22/15 820,000 852,226
Indonesia (Republic of)
Credit Linked Nts., Series III,
14.25%, 6/15/13 873,600 1,096,019
Nigeria (Federal Republic of)
Credit Linked Nts., 12.50%,
2/24/09 [NGN] 67,900,000 576,176
Nigeria (Federal Republic of)
Credit Linked Nts., 15%,
1/27/09 [NGN] 91,000,000 811,026
OAO Gazprom I Credit Nts.,
9.407%, 10/20/07 790,000 813,298
Peru (Republic of) Credit
Linked Nts., 6.665%, 2/20/11 1 875,000 896,311
RosSelkhoz Bank Total Return
Linked Nts., 6.926%,
2/22/08 9 [RUR] 57,640,000 2,146,087
Russian Federation Credit
Linked Nts., 0%, 12/2/09 9 [RUR] 19,221,000 783,051
Russian Federation Credit
Linked Nts., 6.942%,
2/22/08 9 [RUR] 82,600,000 3,075,991
27 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Deutsche Bank AG: Continued
Russian Federation Credit Linked
Nts., 7.176%, 2/21/08 9 [RUR] 39,800,000 $ 1,481,857
Russian Federation Total Return
Linked Nts., Series II, 9%,
4/22/11 [RUR] 21,590,000 918,841
Russian Railways Total Return
Linked Bonds, 6.67%,
1/26/09 1 [RUR] 75,090,000 2,947,905
Russian Unified Energy Systems
Total Return Linked Nts.,
Series FSK3, 7.10%,
12/16/08 1 [RUR] 50,530,000 1,982,975
Sberbank Total Return Linked
Nts., 6.588%, 2/27/08 9 [RUR] 76,860,000 2,862,564
Sberbank Total Return Linked
Nts., 6.593%, 2/20/08 9 [RUR] 57,640,000 2,149,560
Singapore, Vietnam Shipping
Industry Group Total Return
Linked Nts., 9%, 4/20/17 3 [VND] 36,800,000,000 2,287,598
Ukraine (Republic of) 5 yr. Credit
Linked Nts., 4.05%, 8/25/10 885,000 934,640
Ukraine (Republic of) 5.5 yr.
Credit Linked Nts., 4.05%, 2/25/11 885,000 935,410
Ukraine (Republic of) 6 yr.
Credit Linked Nts., 4.05%, 8/25/11 885,000 936,994
Ukraine (Republic of) 6.5 yr.
Credit Linked Nts., 4.05%, 2/27/12 885,000 937,835
Ukraine (Republic of) 7 yr.
Credit Linked Nts., 4.05%, 8/28/12 885,000 937,932
Ukraine (Republic of) Credit
Linked Nts., 11.94%,
12/30/09 [UAH] 269,000 59,695
Ukraine (Republic of) Credit
Linked Nts., 11.94%,
12/30/09 [UAH] 955,000 211,930
United Mexican States Credit
Linked Nts., 9.52%, 1/5/11 3 [MXN] 9,634,325 896,237
Videocon International Ltd.
Credit Linked Nts., 6.26%,
12/29/09 3 1,630,000 1,633,684
- --------------------------------------------------------------------------------
Dow Jones CDX High Yield
Index, Pass-Through Certificates,
8.25%, Series 4-T1, 6/29/10 3 5,221,200 5,430,048
- --------------------------------------------------------------------------------
Dresdner Bank AG, Lukoil Credit
Linked Nts., Series 3, 7.04%,
12/8/11 1 [RUR] 34,190,000 1,369,354
- --------------------------------------------------------------------------------
Eurus Ltd. Catastrophe Linked
Nts., 11.605%, 4/8/09 1,2 1,400,000 1,420,300
- --------------------------------------------------------------------------------
Fhu-Jin Ltd. Catastrophe Linked
Nts., Cl. B, 9.255%, 8/10/11 1,2 1,630,000 1,656,553
- --------------------------------------------------------------------------------
Foundation Re II Ltd. Catastrophe
Linked Nts., 15.16%, 1/8/09 1,3 926,000 916,740
- --------------------------------------------------------------------------------
Foundation Re Ltd. Catastrophe
Linked Nts., 9.46%, 11/24/08 1,2 1,000,000 951,890
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Fusion 2007 Ltd. Catastrophe
Linked Nts., 11.34%, 5/19/09 1,3 $ 2,600,000 $ 2,601,300
- --------------------------------------------------------------------------------
Goldman Sachs & Co., Turkey
(Republic of) Credit Linked
Nts., 14.802%, 3/29/17 9 [TRY] 21,980,000 4,434,517
- --------------------------------------------------------------------------------
Goldman Sachs Capital
Markets LP, Colombia
(Republic of) Credit Linked
Nts., 10.476%, 2/8/37 9 [COP] 63,720,800,000 1,522,500
- --------------------------------------------------------------------------------
Goldman Sachs International,
Russian Federation Total
Return Linked Nts., 8%,
5/13/09 1 [RUR] 84,500,000 3,382,711
- --------------------------------------------------------------------------------
ING Bank NV, Ukraine
(Republic of) Credit Linked
Nts., Series 725, 11.89%,
12/30/09 3 [UAH] 4,689,000 1,058,525
- --------------------------------------------------------------------------------
JPMorgan Chase Bank:
Argentina (Republic of)
Credit Linked Nts., 11.232%,
12/19/11 3 [ARP] 4,355,000 3,956,120
Brazil (Federal Republic of)
Credit Linked Nts., 14.35%,
2/20/12 [BRR] 5,770,000 3,244,242
Brazil (Federal Republic of)
Credit Linked Nts., 15.326%,
1/2/15 9 [BRR] 10,948,600 2,650,503
Brazil (Federal Republic of)
Credit Linked Nts., 2.731%,
11/30/12 9 [ARP] 4,550,000 1,422,537
Brazil (Federal Republic of)
Credit Linked Nts., 6%,
5/16/45 3 [BRR] 5,855,000 5,079,129
Brazil (Federal Republic of)
Credit Linked Nts., Series III,
12.184%, 1/2/15 9 [BRR] 8,500,000 2,057,731
Colombia (Republic of)
Credit Linked Bonds, 10.19%,
1/5/16 9 [COP] 20,100,000,000 4,520,707
Colombia (Republic of)
Credit Linked Bonds, 10.218%,
10/31/16 3,9 [COP] 12,177,000,000 2,514,979
Colombia (Republic of)
Credit Linked Bonds, 11.198%,
8/3/20 9 [COP] 11,160,000,000 1,564,304
Colombia (Republic of)
Credit Linked Bonds, Series A,
10.218%, 10/31/16 3,9 [COP] 12,125,000,000 2,504,240
Peru (Republic of) Credit
Linked Nts., 8.115%,
9/2/15 9 [PEN] 3,470,000 642,268
Swaziland (Kingdom of)
Credit Linked Nts., 7.25%,
6/20/10 1,120,000 1,112,272
- --------------------------------------------------------------------------------
JSC Astana Finance, 9.16% Nts.,
3/14/12 3 7,200,000 7,018,041
28 | OPPENHEIMER STRATEGIC BOND FUND/VA
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Lakeside Re Ltd. Catastrophe
Linked Nts., 11.849%, 12/31/09 1,2 $ 2,000,000 $ 2,056,400
- --------------------------------------------------------------------------------
Lehman Brothers Holdings,
Inc., High Yield Targeted Return
Index Securities, Series 2006-1,
7.22%, 5/1/16 3,16 8,500,000 8,587,890
- --------------------------------------------------------------------------------
Lehman Brothers International,
Romania (Republic of) Total
Return Linked Nts., 7.90%,
2/9/10 [RON] 821,400 368,322
- --------------------------------------------------------------------------------
Lehman Brothers Special
Financing, Inc.:
CMS 10 yr. Curve Credit
Linked Nts., 6%, 2/5/17 13,350,000 12,582,375
Microvest Capital
Management LLC Credit
Linked Nts., 10.75%, 5/24/12 3 8,650,000 8,650,000
Romania (Republic of) Total
Return Linked Nts., 6.50%,
3/9/10 [RON] 2,228,300 963,197
Romania (Republic of) Total
Return Linked Nts., 6.75%,
3/11/08 [RON] 2,600,000 1,142,754
Romania (Republic of) Total
Return Linked Nts., 7.25%,
4/19/10 [RON] 213,000 93,126
Romania (Republic of) Total
Return Linked Nts., 7.75%,
4/21/08 [RON] 199,000 87,504
Romania (Republic of) Total
Return Linked Nts., 7.75%,
4/21/08 [RON] 512,000 225,135
Romania (Republic of) Total
Return Linked Nts., 7.90%,
2/12/08 [RON] 1,885,100 842,101
- --------------------------------------------------------------------------------
Medquake Ltd. Catastrophe
Linked Nts., 10.46%, 5/31/10 1,3 1,250,000 1,250,938
- --------------------------------------------------------------------------------
Merrill Lynch:
Colombia (Republic of) Credit
Linked Nts., 10%,
11/17/16 3 [COP] 1,784,000,000 921,147
Renaissance Capital
International Services Ltd.
Total Return Linked Nts.,
10.50%, 10/7/08 3 [RUR] 80,000,000 3,109,876
- --------------------------------------------------------------------------------
Morgan Stanley, Russian
Federation Total Return
Linked Securities, Series 007,
Cl. VR, 5%, 8/15/34 [RUR] 114,600,000 4,012,214
- --------------------------------------------------------------------------------
Morgan Stanley & Co.
International Ltd./Red Arrow
International Leasing plc:
Total Return Linked Nts.,
Series A, 8.375%, 6/30/12 3 [RUR] 30,244,794 1,222,748
Total Return Linked Nts.,
Series B, 11%, 6/30/12 3 [RUR] 24,746,681 1,000,468
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
Morgan Stanley Capital
Services, Inc.:
Bank Center Credit Total
Return Linked Nts., 7.52%,
6/6/08 [KZT] 482,000,000 $ 3,986,864
Brazil (Federal Republic of)
Linked Nts., 12.551%,
1/5/22 9 [BRR] 28,914,000 3,252,638
Brazil (Federal Republic of)
Sr. Linked Nts., 14.40%,
8/4/16 [BRR] 5,793,682 4,132,766
Philippines (Republic of the)
Credit Linked Nts., 10.20%,
9/20/15 3 10,300,000 12,456,297
Philippines (Republic of the)
Credit Linked Nts., 8.619%,
9/20/15 3 1,230,000 1,432,974
Philippines (Republic of the)
Credit Linked Nts., 8.21%,
6/20/16 1,3 1,360,000 1,470,835
Sukhoi Co. Total Return
Linked Nts., 7.85%,
3/31/17 1,3 [RUR] 107,700,000 4,207,604
United Mexican States Credit
Linked Nts., 5.64%, 11/20/15 2,000,000 2,100,218
WTI Trading Ltd. Total Return
Linked Nts., Series A,
0%, 2/6/09 3,9 3,630,000 3,811,500
WTI Trading Ltd. Total Return
Linked Nts., Series B,
0%, 2/6/09 3,9 4,850,000 5,092,500
- --------------------------------------------------------------------------------
Nelson Re Ltd. Catastrophe
Linked Nts., Series 2007-I,
Cl. A, 17.26%, 6/21/10 1,3 2,290,000 2,290,000
- --------------------------------------------------------------------------------
Osiris Capital plc Catastrophe
Linked Combined Mortality
Index Nts., Series D, 10.356%,
1/15/10 1,2 890,000 899,434
- --------------------------------------------------------------------------------
Residential Reinsurance Ltd.
Catastrophe Linked Nts.,
Series B, 13.81%, 6/6/08 1,2 1,300,000 1,228,208
- --------------------------------------------------------------------------------
Residential Reinsurance Ltd.
Nts., Series CL3, 17.61%, 6/7/10 1,3 1,000,000 1,000,000
- --------------------------------------------------------------------------------
Successor Euro Wind Ltd.
Catastrophe Linked Nts.:
Cl. A-I, 10.61%, 6/6/08 1,3 1,040,000 1,044,420
Cl. A-I, 22.86%, 6/6/08 1,3 1,450,000 1,477,695
- --------------------------------------------------------------------------------
Successor Japan Quake Ltd.
Catastrophe Linked Nts.,
Cl. A-I, 9.61%, 6/6/08 1,2 2,450,000 2,480,013
- --------------------------------------------------------------------------------
Swiss Re Capital Markets
Corp./Akibare Ltd.
Catastrophe Linked Nts.,
Cl. A, 8.31%, 5/22/12 1,3 738,000 739,697
29 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
STRUCTURED NOTES Continued
- --------------------------------------------------------------------------------
UBS AG:
Ghana (Republic of) Credit
Linked Nts., 14.47%,
12/28/11 3 [GHC] 12,220,520,000 $ 1,358,938
Israel (State of) Credit Linked
Nts., 7.50%, 4/5/14 [ILS] 4,792,700 1,276,511
- --------------------------------------------------------------------------------
VASCO Re 2006 Ltd.
Catastrophe Linked Nts.,
13.86%, 6/5/09 1,2 1,550,000 1,561,470
- --------------------------------------------------------------------------------
Willow Re Ltd. Catastrophe
Linked Nts., 10.485%, 6/16/10 1,3 2,480,000 2,480,000
---------------
Total Structured Notes
(Cost $314,612,881) 341,302,431
EXPIRATION STRIKE
DATES PRICE CONTRACTS
- --------------------------------------------------------------------------------
OPTIONS PURCHASED--0.0%
- --------------------------------------------------------------------------------
Basket of
Currencies
Put 4 7/25/07 $ 95.00 26,640,000 --
- --------------------------------------------------------------------------------
Basket of
Currencies
Put 3,4 12/7/07 92.50 27,590,000 165,540
---------------
Total Options
Purchased
(Cost $480,268) 165,540
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
SHORT-TERM NOTES--3.8%
- --------------------------------------------------------------------------------
Federal Home Loan Mortgage
Corp., 5.08%, 8/20/07 $ 71,880,000 71,372,847
- --------------------------------------------------------------------------------
U.S. Treasury Bills, 4.965%,
7/26/07 10,17 27,000,000 26,906,906
---------------
Total Short-Term Notes
(Cost $98,279,753) 98,279,753
SHARES
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--10.5%
- --------------------------------------------------------------------------------
Oppenheimer Institutional
Money Market Fund, Cl. E,
5.28% 18,19
(Cost $271,555,350) 271,555,350 271,555,350
- --------------------------------------------------------------------------------
Total Investments,
at Value (excluding
Investments Purchased
with Cash Collateral
from Securities Loaned)
(Cost $2,598,492,632) 2,638,315,674
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES
LOANED--3.3% 20
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--3.3%
Undivided interest of 0.55% in joint
repurchase agreement (Principal
Amount/Value $3,500,000,000, with a
maturity value of $3,501,573,542) with Bank
of America NA, 5.395%, dated 6/29/07, to be
repurchased at $19,407,804 on 7/2/07,
collateralized by U.S. Agency Mortgages,
5%-5.50%, 8/1/33-3/1/35, with a value of
$3,570,000,000 $ 19,399,082 $ 19,399,082
- --------------------------------------------------------------------------------
Undivided interest of 1.61% in joint
repurchase agreement (Principal
Amount/Value $310,000,000, with a maturity
value of $310,139,888) with Barclays
Capital, 5.415%, dated 6/29/07, to be
repurchased at $5,002,256 on 7/2/07,
collateralized by AAA Asset-Backed
Securities, 0%-5.54%, 1/29/20-5/11/52, with
a value of $319,300,000 5,000,000 5,000,000
- --------------------------------------------------------------------------------
Undivided interest of 12% in joint
repurchase agreement (Principal
Amount/Value $500,000,000, with a maturity
value of $500,225,625) with Barclays
Capital, 5.415%, dated 6/29/07, to be
repurchased at $60,027,075 on 7/2/07,
collateralized by Private Label CMOs, 0%,
5/27/35-2/25/48, with a value of
$525,000,000 60,000,000 60,000,000
---------------
84,399,082
- --------------------------------------------------------------------------------
MEDIUM-TERM FLOATING NOTE--0.0%
Metropolitan Life
Global Funding,
5.31%, 7/23/07 750,000 750,000
---------------
Total Investments Purchased
with Cash Collateral from
Securities Loaned
(Cost $85,149,082) 85,149,082
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS,
AT VALUE
(COST $2,683,641,714) 105.4% 2,723,464,756
- --------------------------------------------------------------------------------
LIABILITIES IN
EXCESS OF
OTHER ASSETS (5.4) (140,484,193)
----------------------------------
NET ASSETS 100.0% $2,582,980,563
==================================
30 | OPPENHEIMER STRATEGIC BOND FUND/VA
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
GHS Ghana Cedi
IDR Indonesia Rupiah
ILS Israeli Shekel
JPY Japanese Yen
KZT Kazakhstan Tenge
MXN Mexican Nuevo Peso
MYR Malaysian Ringgit
NGN Nigeria Naira
PEN Peruvian New Sol
PHP Philippines Peso
PLZ Polish Zloty
RON New Romanian Leu
RUR Russian Ruble
TRY New Turkish Lira
UAH Ukraine Hryvnia
UYU Uruguay Peso
VND Vietnam Dong
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 $154,847,400 or 5.99% of the Fund's net
assets as of June 30, 2007.
3. Illiquid security. The aggregate value of illiquid securities as of June 30,
2007 was $194,841,001, which represents 7.54% of the Fund's net assets. See Note
12 of accompanying Notes.
4. Non-income producing security.
5. Issue is in default. 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 $20,283,098 or 0.79% of the Fund's net assets
as of June 30, 2007.
7. 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 $607,951 or 0.02% of the Fund's net assets as of June
30, 2007.
8. When-issued security or forward commitment to be delivered and settled after
June 30, 2007. See Note 1 of accompanying Notes.
9. Zero coupon bond reflects effective yield on the date of purchase.
10. Partial or fully-loaned security. See Note 13 of accompanying Notes.
11. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures contracts. The aggregate market
value of such securities is $7,959,712. See Note 6 of accompanying Notes.
12. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
13. Interest or dividend is paid-in-kind, when applicable.
14. Denotes an inflation-indexed security: coupon and principal are indexed to
the consumer price index.
15. 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.
16. Interest rate represents a weighted average rate comprised of the interest
rates of the underlying securities.
17. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of accompanying Notes.
18. Rate shown is the 7-day yield as of June 30, 2007.
31 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
19. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 2007, by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- ------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E 349,023,806 594,253,236 671,721,692 271,555,350
VALUE DIVIDEND
SEE NOTE 1 INCOME
- ------------------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E $ 271,355,350 $ 7,318,194
20. The security/securities have 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, 2007
- --------------------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $2,412,086,364) $2,451,909,406
Affiliated companies (cost $271,555,350) 271,555,350
---------------
2,723,464,756
- --------------------------------------------------------------------------------------------------------------
Cash 11,097,055
- --------------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $659,069) 658,919
- --------------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 13,056,500
- --------------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums received $37,980) 12,169,243
- --------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $26,504,820 sold on a when-issued basis
or forward commitment) 35,178,271
Interest, dividends and principal paydowns 29,114,652
Shares of beneficial interest sold 12,827,464
Closed foreign currency contracts 1,946,074
Futures margins 1,766,577
Other 19,741
---------------
Total assets 2,841,299,252
- --------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 85,149,082
- --------------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency contracts 5,415,257
- --------------------------------------------------------------------------------------------------------------
Swaps, at value (net premiums paid $497,683) 6,066,047
- --------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $142,593,148 purchased on a when-issued
basis or forward commitment) 160,211,886
Distribution and service plan fees 1,103,225
Shares of beneficial interest redeemed 211,747
Shareholder communications 82,478
Trustees' compensation 13,154
Transfer and shareholder servicing agent fees 1,787
Other 64,026
---------------
Total liabilities 258,318,689
- --------------------------------------------------------------------------------------------------------------
NET ASSETS $2,582,980,563
===============
- --------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 484,200
- --------------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,468,428,179
- --------------------------------------------------------------------------------------------------------------
Accumulated net investment income 53,170,104
- --------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign
currency transactions 8,567,009
- --------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and
liabilities denominated in foreign currencies 52,331,071
---------------
NET ASSETS $2,582,980,563
===============
- --------------------------------------------------------------------------------------------------------------
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 $656,079,279
and 124,440,386 shares of beneficial interest outstanding) $ 5.27
- --------------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per
share (based on net assets of $1,926,901,284
and 359,759,877 shares of beneficial interest outstanding) $ 5.36
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER STRATEGIC BOND FUND/VA
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2007
- --------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $19,994) $ 59,343,586
- --------------------------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $2,597) 134,165
Affiliated companies 7,318,194
- --------------------------------------------------------------------------------------------------------------
Fee income 96,756
- --------------------------------------------------------------------------------------------------------------
Portfolio lending fees 112,500
---------------
Total investment income 67,005,201
- --------------------------------------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------------------------------------
Management fees 6,545,069
- --------------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Service shares 2,032,943
- --------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,010
Service shares 5,037
- --------------------------------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 41,363
Service shares 103,937
- --------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 64,614
- --------------------------------------------------------------------------------------------------------------
Trustees' compensation 19,600
- --------------------------------------------------------------------------------------------------------------
Administration service fees 750
- --------------------------------------------------------------------------------------------------------------
Other 77,131
---------------
Total expenses 8,895,454
Less reduction to custodian expenses (2,906)
Less waivers and reimbursements of expenses (139,630)
---------------
Net expenses 8,752,918
- --------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 58,252,283
- --------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments (including premiums on options exercised) 6,657,673
Closing and expiration of option contracts written 412,988
Closing and expiration of futures contracts (8,650,696)
Foreign currency transactions 15,289,907
Swap contracts 8,082,996
---------------
Net realized gain 21,792,868
- --------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (15,581,630)
Translation of assets and liabilities denominated in foreign currencies 19,864,806
Futures contracts 2,359,173
Option contracts written (103,918)
Swap contracts (2,996,638)
---------------
Net change in unrealized appreciation 3,541,793
- --------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 83,586,944
===============
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, 2007 DECEMBER 31,
(UNAUDITED) 2006
- --------------------------------------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------------------------------------
Net investment income $ 58,252,283 $ 77,566,732
- --------------------------------------------------------------------------------------------------------------
Net realized gain 21,792,868 3,360,150
- --------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 3,541,793 36,763,035
--------------------------------
Net increase in net assets resulting from operations 83,586,944 117,689,917
- --------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (22,674,018) (23,204,298)
Service shares (53,839,537) (32,674,854)
--------------------------------
(76,513,555) (55,879,152)
- --------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Non-Service shares 47,739,368 50,531,351
Service shares 525,348,283 694,229,148
--------------------------------
573,087,651 744,760,499
- --------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Total increase 580,161,040 806,571,264
- --------------------------------------------------------------------------------------------------------------
Beginning of period 2,002,819,523 1,196,248,259
--------------------------------
End of period (including accumulated net investment income of $53,170,104
and $71,431,376, respectively) $2,582,980,563 $2,002,819,523
================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35 | OPPENHEIMER STRATEGIC BOND FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.26 $ 5.11 $ 5.21 $ 5.05 $ 4.57 $ 4.62
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .14 1 .26 1 .25 1 .22 1 .22 .29
Net realized and unrealized gain (loss) .06 .11 (.12) .20 .56 .03
-----------------------------------------------------------------------------------
Total from investment operations .20 .37 .13 .42 .78 .32
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.19) (.22) (.23) (.26) (.30) (.37)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.27 $ 5.26 $ 5.11 $ 5.21 $ 5.05 $ 4.57
===================================================================================
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.97% 7.49% 2.67% 8.67% 18.07% 7.44%
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 656,079 $ 606,632 $538,141 $614,915 $571,445 $ 406,126
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 632,160 $ 564,248 $550,201 $584,878 $472,213 $ 374,519
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 5.34% 5.05% 4.91% 4.50% 5.61% 6.89%
Total expenses 0.61% 4 0.64% 4 0.71% 0.74% 0.75% 0.79%
Expenses after waivers, payments and/or
reimbursements and reduction to custodian
expenses 0.60% 0.63% 0.71% 0.74% 0.75% 0.78%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 5 93% 5 98% 5 88% 5 117% 65%
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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.62%
Year Ended December 31, 2006 0.64
5. The portfolio turnover rate excludes purchase and sale transactions of To Be
Announced (TBA) mortgage-related securities as follows:
PURCHASE TRANSACTIONS SALE TRANSACTIONS
- -------------------------------------------------------------------------------
Six Months Ended June 30, 2007 $ 628,405,619 $ 589,215,332
Year Ended December 31, 2006 742,785,501 749,719,239
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 YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.34 $ 5.19 $ 5.29 $ 5.13 $ 4.67 $ 4.73
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .13 1 .25 1 .21 1 .19 1 .27 .03
Net realized and unrealized gain (loss) .08 .11 (.08) .22 .49 .28
----------------------------------------------------------------------------------
Total from investment operations .21 .36 .13 .41 .76 .31
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.19) (.21) (.23) (.25) (.30) (.37)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 5.36 $ 5.34 $ 5.19 $ 5.29 $ 5.13 $ 4.67
==================================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 3.93% 7.23% 2.48% 8.43% 17.16% 7.03%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,926,902 $1,396,188 $ 658,107 $ 242,705 $ 79,782 $ 8,138
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,642,749 $1,016,582 $ 408,515 $ 150,040 $ 34,744 $ 2,307
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 5.09% 4.83% 4.20% 3.82% 4.57% 5.40%
Total expenses 0.86% 4 0.89% 4 0.96% 0.99% 1.02% 1.06%
Expenses after waivers, payments and/or
reimbursements and reduction to custodian
expenses 0.85% 0.88% 0.96% 0.99% 1.02% 1.03%
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 34% 5 93% 5 98% 5 88% 5 117% 65%
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 less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.87%
Year Ended December 31, 2006 0.89
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, 2007 $ 628,405,619 $ 589,215,332
Year Ended December 31, 2006 742,785,501 749,719,239
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(R) 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. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. 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.
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 take place generally at least 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, 2007, the Fund had purchased $142,593,148
of securities issued on a when-issued basis or forward commitment and sold
$26,504,820 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, 2007, securities with an aggregate
market value of $779,064, representing 0.03% 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.
39 | OPPENHEIMER STRATEGIC BOND 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.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
INVESTMENTS WITH OFF BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities.
- --------------------------------------------------------------------------------
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, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of zero. 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, 2007, it is estimated that the Fund will utilize $13,919,075 of capital loss
carryforward to offset realized capital gains. During the fiscal year ended
December 31, 2006, the Fund utilized $3,873,854 of capital loss carryforward to
offset capital gains realized in that fiscal year.
40 | OPPENHEIMER STRATEGIC BOND FUND/VA
As of December 31, 2006, the Fund had available for federal income tax purposes
post-October losses of $535,577, straddle losses of $33,629 and unused capital
loss carryforwards as follows:
EXPIRING
--------------------------------
2009 $ 6,488,232
2010 6,861,637
-----------
Total $13,349,869
===========
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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 compensation deferral 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.
- --------------------------------------------------------------------------------
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.
41 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
SIX MONTHS ENDED JUNE 30, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 11,346,312 $ 59,823,222 21,634,226 $ 109,527,181
Dividends and/or distributions reinvested 4,394,189 22,674,018 4,678,286 23,204,298
Redeemed (6,595,716) (34,757,872) (16,241,080) (82,200,128)
------------------------------------------------------------------
Net increase 9,144,785 $ 47,739,368 10,071,432 $ 50,531,351
==================================================================
- ---------------------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 90,186,537 $482,923,875 149,725,536 $ 769,804,954
Dividends and/or distributions reinvested 10,255,150 53,839,537 6,483,106 32,674,854
Redeemed (2,138,695) (11,415,129) (21,471,021) (108,250,660)
------------------------------------------------------------------
Net increase 98,302,992 $525,348,283 134,737,621 $ 694,229,148
==================================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
June 30, 2007, were as follows:
PURCHASES SALES
--------------------------------------------------------------------
Investment securities $689,363,764 $436,997,956
U.S. government and
government agency obligations 329,702,453 120,022,776
To Be Announced (TBA)
mortgage-related securities 628,405,619 589,215,332
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
------------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Next $200 million 0.60
Over $1 billion 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, 2007, the Fund paid
$9,992 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
42 | OPPENHEIMER STRATEGIC BOND FUND/VA
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.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended June 30, 2007, the Manager waived $139,630 for
IMMF management fees.
- --------------------------------------------------------------------------------
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, 2007, the Fund had outstanding foreign currency contracts as
follows:
CONTRACT
EXPIRATION AMOUNT VALUATION AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) JUNE 30, 2007 APPRECIATION DEPRECIATION
- -----------------------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Australian Dollar (AUD) 7/17/07 3,040 AUD $ 2,576,157 $ -- $ 3,527
Brazilian Real (BRR) 8/2/07-1/5/10 138,263 BRR 70,054,811 10,231,865 13,012
British Pound Sterling (GBP) 7/17/07-12/21/07 10,620 GBP 21,287,210 221,653 --
Canadian Dollar (CAD) 7/17/07-8/21/07 4,230 CAD 3,973,773 22,666 --
Chilean Peso (CLP) 8/16/07-8/27/07 3,574,000 CLP 6,770,555 2,473 67,348
Dominican Republic Peso (DOP) 7/9/07 18,401 DOP 555,096 836 --
Euro (EUR) 7/5/07-7/17/07 17,450 EUR 23,622,975 19,392 122,531
Hungarian Forint (HUF) 8/2/07 1,852,000 HUF 10,124,621 -- 13,880
Indian Rupee (INR) 7/3/07-8/3/07 390,184 INR 9,566,278 68,109 --
Japanese Yen (JPY) 7/17/07-12/21/07 8,245,000 JPY 67,887,682 21,161 1,960,853
Malaysian Ringgit (MYR) 8/16/07-9/17/07 25,290 MYR 7,348,412 16,258 72,217
Mexican Nuevo Peso (MXN) 8/24/07-8/27/07 133,570 MXN 12,323,148 -- 23,998
New Turkish Lira (TRY) 7/25/07-8/2/07 22,990 TRY 17,329,944 374,164 5,678
New Zealand Dollar (NZD) 7/17/07-12/21/07 9,300 NZD 7,101,267 86,029 --
Norwegian Krone (NOK) 1/29/08 29,000 NOK 4,925,452 186,843 --
Polish Zloty (PLZ) 8/7/07 35,280 PLZ 12,671,368 -- 135,602
Russian Ruble (RUR) 7/3/07-2/21/08 568,485 RUR 22,163,451 251,425 --
Singapore Dollar (SGD) 2/5/08 11,210 SGD 7,445,205 959 11,975
South African Rand (ZAR) 8/2/07 65,900 ZAR 9,285,366 15,426 --
South Korean Won (KRW) 7/12/07-10/2/07 6,733,000 KRW 7,299,701 45,326 --
43 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued
CONTRACT
EXPIRATION AMOUNT VALUATION AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) JUNE 30, 2007 APPRECIATION DEPRECIATION
- -----------------------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE Continued
Swedish Krone (SEK) 8/2/07-10/10/07 70,490 SEK $ 10,337,406 $ 62,153 $ 149,697
Swiss Franc (CHF) 7/17/07 3,190 CHF 2,615,004 39,796 --
------------------------------
11,666,534 2,580,318
------------------------------
CONTRACTS TO SELL
Australian Dollar (AUD) 7/12/07-10/10/07 19,993 AUD 16,901,424 -- 584,307
Brazilian Real (BRR) 7/3/07 5,937 BRR 3,076,320 1,988 362
British Pound Sterling (GBP) 7/12/07-9/27/07 6,255 GBP 12,553,289 -- 221,597
Canadian Dollar (CAD) 7/12/07-12/21/07 6,260 CAD 5,888,425 14,434 26,905
Chinese Renminbi (Yuan) (CNY) 8/2/07 77,600 CNY 10,234,662 -- 10,683
Czech Koruna (CZK) 12/19/07-1/25/08 303,180 CZK 14,431,668 113,968 51,141
Euro (EUR) 7/12/07-1/29/08 73,440 EUR 99,621,347 181,422 872,557
Hong Kong Dollar (HKD) 12/19/07-1/25/08 221,945 HKD 28,507,462 229,382 --
Indian Rupee (INR) 8/16/07 207,000 INR 5,071,048 -- 37,001
Japanese Yen (JPY) 7/12/07-2/5/08 4,560,000 JPY 37,374,792 714,442 --
Mexican Nuevo Peso (MXN) 8/24/07 45,360 MXN 4,185,279 13,011 --
New Taiwan Dollar (TWD) 8/2/07 328,000 TWD 10,001,607 16,719 --
New Turkish Lira (TRY) 8/7/07-8/8/07 5,105 TRY 3,833,656 -- 159,627
New Zealand Dollar (NZD) 1/16/08 8,570 NZD 6,499,307 -- 657,675
Singapore Dollar (SGD) 8/2/07 15,325 SGD 10,039,725 -- 28,947
Swedish Krone (SEK) 12/21/07 21,390 SEK 3,151,023 -- 76,466
Swiss Franc (CHF) 7/12/07-1/25/08 30,313 CHF 25,028,474 104,600 107,671
------------------------------
1,389,966 2,834,939
------------------------------
$ 13,056,500 $ 5,415,257
==============================
- --------------------------------------------------------------------------------
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 at 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.
44 | OPPENHEIMER STRATEGIC BOND FUND/VA
As of June 30, 2007, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS JUNE 30, 2007 (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Australia (Commonwealth of) Bonds, 10 yr. 9/17/07 8 $ 665,527 $ (1,995)
Canada (Government of) Bonds, 10 yr. 9/19/07 55 5,721,755 (28,736)
DAX Index 9/21/07 26 7,107,024 274,933
Euro-Bundesobligation, 10 yr. 9/6/07 91 13,640,455 (127,601)
Euro-Schatz 9/6/07 454 62,979,942 (36,743)
IBEX 35 Index 7/20/07 12 2,407,633 16,263
Japan (Government of) Bonds, 10 yr. 9/7/07 38 4,075,143 5,796
NASDAQ 100 Index 9/21/07 215 8,410,800 91,197
Nikkei 225 Index 9/13/07 20 2,949,848 1,354
OMXS30 Index 7/27/07 125 2,294,219 (54,989)
Standard & Poor's 500 Index 9/20/07 26 9,850,100 (46,859)
Standard & Poor's/MIB Index, 10 yr. 9/21/07 9 2,580,260 10,759
U.S. Treasury Nts., 5 yr. 9/28/07 611 63,591,734 340,295
U.S. Treasury Nts., 10 yr. 9/19/07 3,561 376,408,828 (668,406)
U.S. Treasury Nts., 30 yr. 9/19/07 1,816 195,674,000 (553,862)
United Kingdom Long Gilt 9/28/07 7 1,458,111 (1,941)
--------------
(780,535)
--------------
CONTRACTS TO SELL
CAC40 10 Euro 7/20/07 46 3,779,739 (74,342)
DAX Index 9/21/07 17 4,646,901 (181,776)
Euro-Bundesobligation, 10 yr. 9/6/07 35 5,246,329 49,038
FTSE 100 Index 9/21/07 81 10,797,181 (34,660)
Japan (Government of) Bonds, 10 yr. 9/10/07 9 9,649,462 (13,694)
Mexican Bolsa Index 9/21/07 90 2,619,484 87,234
Nikkei 225 Index 9/13/07 68 10,029,482 (71,769)
Standard & Poor's 500 E-Mini 9/21/07 492 37,278,840 175,160
U.S. Treasury Nts., 2 yr. 9/28/07 1,164 237,201,375 120,147
U.S. Treasury Nts., 5 yr. 9/28/07 1,010 105,118,906 205,898
U.S. Treasury Nts., 10 yr. 9/19/07 1,657 175,150,078 (726,003)
U.S. Treasury Nts., 30 yr. 9/19/07 330 35,557,500 435,507
--------------
(29,260)
--------------
$ (809,795)
==============
- --------------------------------------------------------------------------------
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 or put options are noted
in the Statement of Investments where applicable. Contracts subject to call or
put, 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.
45 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY Continued
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, 2007 was as follows:
CALL OPTIONS PUT OPTIONS
--------------------------- ----------------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- ------------------------------------------------------------------------------------------------------
Options outstanding as of
December 31, 2006 -- $ -- 25,680,000 $ 253,204
Options written 3,459,000,000 174,493 3,459,000,000 174,456
Options closed or expired (2,910,000,000) (147,486) (753,680,000) (288,544)
Options exercised (549,000,000) (27,007) (2,731,000,000) (139,116)
----------------------------------------------------------
Options outstanding as of June 30, 2007 -- $ -- -- $ --
==========================================================
- --------------------------------------------------------------------------------
8. CREDIT SWAP CONTRACTS
A credit default swap is a bilateral contract that enables an investor to buy or
sell protection against a defined-issuer credit event. The Fund may enter into
credit default swaps to hedge an existing position or to obtain exposure to a
security or market by purchasing or selling credit protection. The Fund may
enter into credit default swaps on a single security, or a basket of securities.
In a credit default swap contract, the purchaser of the contract will pay
a periodic interest fee, similar to an insurance premium, on the notional amount
of the swap contract to the counterparty (the seller of the contract). If there
is a credit event (for example, bankruptcy or a failure to timely pay interest
or principal), the purchaser will exercise the contract and will receive a
payment from the seller of the contract equal to the notional value of the
credit default swap contract less the value of the underlying security.
The periodic interest fees are accrued daily as a component of unrealized
appreciation (depreciation) and are recorded as realized gain (loss) upon
payment. In the event that the credit default swap is exercised due to a credit
event, the difference between the value of the underlying security and the
notional amount is recorded as realized gain (loss) and is included on the
Statement of Operations.
Credit default swaps are marked to market daily using primarily quotations
from counterparties and brokers. The value of the contracts is separately
disclosed on the Statement of Assets and Liabilities. The unrealized
appreciation (depreciation) related to the change in the valuation of the
notional amount of the swap is combined with the accrued interest due to (owed
by) the Fund at termination or settlement. The net change in this amount during
the period is included on the Statement of Operations.
Risks of credit default swaps include, but are not limited to, the cost of
paying for credit protection if there are no credit events, pricing transparency
when assessing the cost of a credit default swap, counterparty risk, adverse
pricing when purchasing bonds to satisfy its delivery obligation, and the need
to fund the delivery obligation (either cash or defaulted securities depending
on whether the Fund is the purchaser or seller of the credit default swap
contract, respectively).
46 | OPPENHEIMER STRATEGIC BOND FUND/VA
Information regarding such credit default swaps as of June 30, 2007 is as
follows:
BUY/SELL NOTIONAL
CREDIT AMOUNT PAY/RECEIVE TERMINATION PREMIUM
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES PAID/(RECEIVED) VALUE
- --------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc:
Beazer Homes
USA, Inc. Sell $ 1,000 4.700% 9/20/08 $ -- $ --
CDX Emerging
Markets Index Buy 10,850 1.250 6/20/12 -- (63,051)
Constellation
Brands, Inc. Sell 965 1.010 6/20/11 -- (7,435)
Constellation
Brands, Inc. Sell 830 1.030 6/20/11 -- (5,849)
Dow Jones CDX
North America
Crossover Index Sell 885 1.650 12/20/11 14,855 (310)
Mosaic Co. (The) Sell 490 1.500 9/20/12 -- 1,045
Residential Capital LLC Sell 1,807 1.220 3/20/08 -- (2,803)
Residential Capital LLC Sell 905 1.200 3/20/08 -- (1,537)
Residential Capital LLC Sell 942 1.750 3/20/08 -- 2,226
Smithfield Foods, Inc. Sell 855 1.500 3/20/12 -- (12,808)
Turkey (Republic of) Sell 3,120 1.620 4/20/12 -- 42,354
Ukraine (Republic of) Buy 2,960 1.570 4/20/12 -- (45,066)
- --------------------------------------------------------------------------------------------------------------------------------
Citibank NA,
New York:
Allied Waste North
America, Inc. Sell 2,300 1.880 3/20/12 -- (74,448)
El Paso Corp. Sell 850 0.780 6/20/11 -- (7,705)
El Paso Corp. Sell 936 0.720 6/20/11 -- (10,367)
El Paso Corp. Sell 870 0.820 6/20/11 -- (6,856)
Ford Motor Credit Co. Sell 1,800 2.320 3/20/12 -- (35,368)
Hungary (Republic of) Buy 2,300 0.400 12/20/15 -- (21,245)
Reliant Energy, Inc. Sell 500 2.450 9/20/11 -- (1,760)
Reliant Energy, Inc. Sell 1,200 2.600 9/20/11 -- 2,153
Turkey (Republic of) Sell 2,340 2.470 4/20/17 -- 44,193
Univision Communications,
Inc. Sell 468 1.100 6/20/08 -- 1,011
Williams Cos., Inc. Sell 850 0.650 3/20/12 -- (5,288)
Williams Cos., Inc. Sell 500 1.110 3/20/12 -- 6,291
- --------------------------------------------------------------------------------------------------------------------------------
Credit Suisse
International:
Constellation Brands, Inc. Sell 1,115 1.020 6/20/11 -- (10,407)
Constellation Brands, Inc. Sell 438 1.000 6/20/11 -- (4,380)
Dean Foods Co. Sell 515 1.020 6/20/11 -- (6,949)
Dean Foods Co. Sell 475 1.000 6/20/11 -- (6,762)
Dow Jones CDX North
America Crossover Index Sell 3,440 1.650 12/20/11 54,108 3,994
Dow Jones CDX North
America Crossover Index Sell 1,280 3.250 12/20/11 47,467 17,040
Dow Jones CDX North
America Crossover Index Sell 1,300 1.650 12/20/11 22,168 1,513
El Paso Corp. Sell 475 0.740 6/20/11 -- (4,715)
El Paso Corp. Sell 495 0.770 6/20/11 -- (4,411)
Ford Motor Credit Co. Sell 3,750 2.385 3/20/12 -- (50,760)
Ford Motor Credit Co. Sell 1,150 2.550 3/20/12 -- (8,635)
Freescale Semiconductor, Inc. Sell 485 3.200 9/20/11 -- (6,790)
Freescale Semiconductor, Inc. Sell 495 3.600 9/20/11 -- (198)
Freescale Semiconductor, Inc. Sell 290 3.500 9/20/11 -- (1,102)
47 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. CREDIT SWAP CONTRACTS Continued
BUY/SELL NOTIONAL
CREDIT AMOUNT PAY/RECEIVE TERMINATION PREMIUM
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES PAID/(RECEIVED) VALUE
- --------------------------------------------------------------------------------------------------------------------------------
Credit Suisse
International:
Continued
GMAC LLC Sell $ 1,690 1.390% 3/20/17 $ -- $ (84,360)
Inco Ltd. Buy 460 0.580 3/20/17 -- (3,371)
NJSC Naftogaz Sell 2,570 3.250 4/20/11 -- (3,892)
NXP BV/NXP Funding LLC Sell 485 4.000 9/20/12 -- (2,397)
NXP BV/NXP Funding LLC Sell 295 4.400 9/20/12 -- 3,245
NXP BV/NXP Funding LLC Sell 290 4.080 9/20/12 -- (516)
Residential Capital LLC Sell 900 1.300 3/20/08 -- (225)
Smithfield Foods, Inc. Sell 865 1.490 3/20/12 -- (9,492)
TXU Corp. Sell 940 1.530 6/20/11 -- (35,682)
TXU Corp. Sell 490 1.610 6/20/11 -- (17,414)
Vale Overseas Ltd. Sell 460 1.030 3/20/17 -- 5,035
Williams Cos., Inc. Sell 800 1.150 3/20/12 -- 11,164
- --------------------------------------------------------------------------------------------------------------------------------
Deutsche
Bank AG:
Dow Jones CDX North
America Crossover Index Sell 6,875 1.650 12/20/11 109,580 504
Dow Jones CDX North
America Crossover Index Sell 3,460 1.650 12/20/11 54,536 261
Dow Jones CDX North
America Crossover Index Sell 1,380 1.650 12/20/11 23,824 101
Dow Jones CDX North
America High Yield Index Sell 3,615 3.250 12/20/11 134,056 50,177
Ford Motor Co. Buy 1,650 3.650 12/20/08 -- (26,928)
Ford Motor Co. Buy 2,035 3.050 12/20/08 -- (15,822)
Ford Motor Co. Sell 2,065 6.000 12/20/16 -- (3,180)
Ford Motor Co. Sell 3,180 5.850 12/20/16 -- (28,875)
Ford Motor Co. Sell 2,540 5.800 12/20/16 -- (29,448)
Ford Motor Co. Buy 2,545 3.300 12/20/08 -- (28,849)
Ford Motor Credit Co. Sell 2,760 2.390 3/20/12 -- (38,951)
Ford Motor Credit Co. Sell 1,300 2.340 3/20/12 -- (20,770)
General Motors Corp. Buy 825 2.550 12/20/08 -- (2,209)
General Motors Corp. Sell 1,650 4.750 12/20/16 -- (1,520)
General Motors Corp. Sell 2,035 4.680 12/20/16 -- (9,484)
GMAC LLC Sell 1,750 1.370 3/20/17 -- (95,572)
Inco Ltd. Buy 865 0.420 3/20/17 -- 3,225
Inco Ltd. Buy 995 0.630 3/20/17 -- (11,940)
Peru (Republic of) Buy 1,900 1.710 12/20/16 -- (100,256)
Peru (Republic of) Sell 405 1.320 4/20/17 -- 10,524
Vale Overseas Ltd. Sell 865 1.000 3/20/17 -- 7,320
Vale Oversees Ltd. Sell 995 1.050 3/20/17 -- 12,462
Williams Cos., Inc. Sell 1,850 1.020 3/20/12 -- 18,076
- --------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets LP:
CDX Emerging Markets
Index Sell 10,900 0.600 6/20/17 -- (102,539)
CDX North America High
Yield Index Buy 5,450 1.300 6/20/17 -- 217,496
CDX North America High
Yield Index Buy 5,450 1.350 6/20/17 -- 197,190
CDX North America
Investment Grade Index Buy 11,010 1.415 6/20/17 -- 346,658
48 | OPPENHEIMER STRATEGIC BOND FUND/VA
BUY/SELL NOTIONAL
CREDIT AMOUNT PAY/RECEIVE TERMINATION PREMIUM
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES PAID/(RECEIVED) VALUE
- --------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Markets LP:
Continued
CDX North America
Investment Grade Index Sell $ 22,020 0.600% 6/20/17 $ -- $ (207,126)
CDX North America
Investment Grade Index Sell 10,900 0.600 6/20/17 (17,690) (102,539)
General Motors Corp. Buy 1,650 2.700 12/20/08 -- (10,971)
General Motors Corp. Sell 1,650 4.950 12/20/16 -- 13,060
- --------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
International:
Beazer Homes USA, Inc. Sell 940 2.500 6/20/08 -- (16,899)
Beazer Homes USA, Inc. Sell 1,300 2.650 9/20/08 -- (27,884)
Beazer Homes USA, Inc. Sell 1,000 4.800 9/20/08 -- --
Freescale Semiconductor,
Inc. Sell 990 3.600 9/20/11 -- 983
Freescale Semiconductor,
Inc. Sell 525 3.750 9/20/11 -- --
Freescale Semiconductor,
Inc. Sell 300 3.700 9/20/11 -- --
GMAC LLC Sell 850 1.390 3/20/17 -- (48,724)
GMAC LLC Sell 1,040 1.390 3/20/17 -- (59,615)
GMAC LLC Sell 1,200 1.370 3/20/17 -- (70,183)
GMAC LLC Sell 2,190 1.390 3/20/17 -- (125,535)
K. Hovnanian Enterprises,
Inc. Sell 2,950 2.000 6/20/08 -- (30,273)
K. Hovnanian Enterprises,
Inc. Sell 1,875 2.000 6/20/08 -- (19,241)
K. Hovnanian Enterprises,
Inc. Sell 1,880 1.800 6/20/08 -- (22,906)
Residential Capital LLC Sell 903 1.180 3/20/08 -- (1,758)
Residential Capital LLC Sell 1,350 1.360 3/20/08 -- (837)
Standard-Pacific Corp. Sell 5,450 2.200 6/20/08 -- (47,901)
- --------------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase
Bank NA, NY
Branch:
Dean Foods Co. Sell 915 1.030 6/20/11 -- (16,545)
Dean Foods Co. Sell 915 1.060 6/20/11 -- (15,583)
Dean Foods Co. Sell 500 1.050 6/20/11 -- (8,488)
Dean Foods Co. Sell 1,250 1.080 6/20/11 -- (20,002)
Ford Motor Co. Buy 1,650 3.600 12/20/08 -- (27,964)
Ford Motor Co. Sell 2,065 6.000 12/20/16 -- (292)
General Motors Corp. Buy 2,545 2.350 12/20/08 -- (8,679)
General Motors Corp. Sell 2,545 4.750 12/20/16 -- 1,733
Inco Ltd. Buy 435 0.520 3/20/17 -- 357
Mosaic Co. (The) Sell 495 1.350 9/20/12 -- (2,044)
Mosaic Co. (The) Sell 500 1.500 9/20/12 -- 1,193
Rite Aid Corp. Sell 1,135 1.400 9/20/08 -- 1,082
- --------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing,
Inc.:
Allied Waste North
America, Inc. Sell 640 1.880 3/20/12 -- (19,737)
Allied Waste North
America, Inc. Sell 330 1.880 3/20/12 -- (10,177)
Beazer Homes USA, Inc. Sell 1,900 2.650 6/20/08 -- (29,927)
49 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. CREDIT SWAP CONTRACTS Continued
BUY/SELL NOTIONAL
CREDIT AMOUNT PAY/RECEIVE TERMINATION PREMIUM
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES PAID/(RECEIVED) VALUE
- --------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing,
Inc.: Continued
Beazer Homes USA,
Inc. Sell $ 465 2.330% 6/20/08 $ -- $ (8,741)
CDX North America
Investment Grade Index Sell 16,430 0.350 6/20/12 425 (38,811)
CDX North America
Investment Grade Index Sell 17,200 0.350 6/20/12 -- (40,630)
Constellation Brands, Inc. Sell 980 1.000 6/20/11 -- (12,454)
Dow Jones CDX North
American High Yield Index Sell 908 3.250 12/20/11 17,580 11,813
Dow Jones CDX North
American High Yield Index Sell 908 3.250 12/20/11 17,580 11,813
El Paso Corp. Sell 1,404 0.730 6/20/11 -- (14,143)
El Paso Corp. Sell 530 0.800 6/20/11 -- (4,176)
Freescale Semiconductor,
Inc. Sell 685 3.550 9/20/11 -- (2,202)
GMAC LLC Sell 850 1.400 3/20/17 -- (45,704)
GMAC LLC Sell 970 1.400 3/20/17 -- (52,156)
iTraxx Europe Crossover
Index Buy 2,110 2.300 6/20/12 (37,980) (12,976)
iTraxx Europe Crossover
Index Buy 2,200 2.300 6/20/12 -- (13,529)
Mosaic Co. (The) Sell 960 1.200 9/20/12 -- (14,505)
NXP BV/NXP Funding LLC Sell 690 4.150 9/20/12 -- (5,312)
NXP BV/NXP Funding LLC Sell 520 4.450 9/20/12 -- 2,076
Reliant Energy, Inc. Sell 1,190 2.150 9/20/11 -- (12,365)
Reliant Energy, Inc. Sell 520 2.500 9/20/11 -- 1,039
Rite Aid Corp. Sell 500 1.350 9/20/08 -- (1,160)
Rite Aid Corp. Sell 1,255 1.350 9/20/08 -- --
Smithfield Foods, Inc. Sell 1,130 1.580 3/20/12 -- (11,525)
Toys R US, Inc. Sell 985 1.850 9/20/08 -- 15
Univision Communications,
Inc. Sell 468 1.100 6/20/08 -- (2,609)
Univision Communications,
Inc. Sell 941 1.150 6/20/08 -- (4,788)
Univision Communications,
Inc. Sell 2,079 1.200 6/20/08 -- (9,569)
- --------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch
International:
Peabody Energy Corp. Sell 295 1.200 9/20/12 -- 1,170
Reliant Energy, Inc. Sell 595 2.050 9/20/11 -- (7,056)
Turkey (Republic of) Sell 1,570 2.470 4/20/17 -- 23,364
TXU Corp. Sell 935 1.530 6/20/11 -- (26,357)
TXU Corp. Sell 960 1.580 6/20/11 -- (25,663)
TXU Corp. Sell 960 1.590 6/20/11 -- (25,495)
TXU Corp. Sell 1,210 1.620 6/20/11 -- (30,975)
TXU Corp. Sell 1,405 2.060 6/20/11 -- (14,592)
- --------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
& Co. International
Ltd. Smithfield Foods, Inc. Sell 1,500 1.510 3/20/12 -- (18,242)
50 | OPPENHEIMER STRATEGIC BOND FUND/VA
BUY/SELL NOTIONAL
CREDIT AMOUNT PAY/RECEIVE TERMINATION PREMIUM
COUNTERPARTY REFERENCE ENTITY PROTECTION (000S) FIXED RATE DATES PAID/(RECEIVED) VALUE
- --------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley
Capital Services,
Inc.:
CDX Emerging Markets
Index Buy $ 10,850 1.250% 6/20/12 $ -- $ (68,235)
CDX North America
Investment Grade Index Sell 10,300 3.000 3/23/13 -- 79,952
Colombia (Republic of) Buy 1,080 3.700 8/20/15 -- (193,329)
Dean Foods Co. Sell 920 0.950 6/20/11 -- (10,896)
Dow Jones CDX North
America Crossover Index Sell 885 1.650 12/20/11 14,853 685
Ford Motor Co. Buy 1,650 3.700 12/20/08 -- (33,776)
Ford Motor Co. Buy 420 2.450 12/20/08 -- (1,107)
Ford Motor Co. Sell 2,065 6.150 12/20/16 -- 16,180
Ford Motor Co. Sell 520 5.900 12/20/16 -- (2,676)
General Motors Corp. Buy 420 1.650 12/20/08 -- 2,416
General Motors Corp. Sell 1,650 4.900 12/20/16 -- 22,576
General Motors Corp. Sell 420 4.620 12/20/16 -- (877)
Inco Ltd. Buy 895 0.520 3/20/17 -- (3,231)
Inco Ltd. Buy 900 0.520 3/20/17 -- (3,249)
Inco Ltd. Buy 975 0.600 3/20/17 -- (9,309)
Istanbul Bond Co. SA
for Finansbank Sell 5,180 1.300 3/24/13 -- 23,901
Peru (Republic of) Sell 2,330 1.040 6/20/17 -- 3,551
Smithfield Foods, Inc. Sell 1,000 1.770 3/20/12 -- (2,000)
Turkey (Republic of) Sell 1,145 2.750 11/20/16 -- 45,689
Turkey (Republic of) Sell 3,140 1.600 4/20/12 -- 37,118
Vale Overseas Ltd. Sell 435 1.060 3/20/17 -- 5,933
Vale Overseas Ltd. Sell 895 0.970 3/20/17 -- 6,160
Vale Overseas Ltd. Sell 900 0.920 3/20/17 -- 2,816
Vale Overseas Ltd. Sell 975 1.040 3/20/17 -- 12,335
- --------------------------------------------------------------------------------------------------------------------------------
UBS AG:
Indonesia (Republic of) Sell 375 2.300 9/20/11 -- 20,541
Philippines (Republic of the) Sell 3,095 1.450 6/20/17 -- (67,825)
----------------------------
$ 455,362 $(1,529,963)
============================
- --------------------------------------------------------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS
An interest rate swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. Interest rate swaps involve the exchange
of rights to receive or commitments to pay interest. One cash flow stream will
typically be a floating rate payment based upon a specified index while the
other is typically a fixed rate. Payments under the swap are based on an agreed
upon principal amount but since this principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as notional. Interest rate swaps are marked to market daily using
primarily quotations from counterparties, and brokers. The value of the
contracts is separately disclosed on the Statement of Assets and Liabilities.
The unrealized appreciation (depreciation) related to the change in the
valuation of the notional amount of the swap is combined with the amount due to
(owed by) the Fund at termination or settlement. The net change in this amount
during the period is included on the Statement of Operations. The Fund also
records any periodic payments received from (paid to) the counterparty,
including at termination, under such contracts as realized gain (loss) on the
Statement of Operations.
51 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS Continued
Swap agreements entail both interest rate risk and credit risk. There is a
risk, based on movements of interest rates in the future, the payments made by
the Fund under a swap agreement will be greater than the payments it received.
Credit risk arises from the possibility that the counterparty will default. If
the counterparty defaults, the Fund's loss will consist of the net amount of
contractual interest payments that the Fund has not yet received. The Manager
will monitor the creditworthiness of counterparties to the Fund's interest rate
swap transactions on an ongoing basis.
As of June 30, 2007, the Fund had entered into the following interest rate swap
agreements:
NOTIONAL PAID BY RECEIVED BY TERMINATION
SWAP COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- --------------------------------------------------------------------------------------------------------------------------------
Banco Santander
Central Hispano:
4,420,000BRR BZDI 14.000% 1/3/12 $ 190,129
56,000,000BRR BZDI 12.290 1/4/10 810,955
- --------------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc:
Six-Month
3,430,000GBP 5.5525% GBP LIBOR 6/13/09 87,447
Six-Month
5,020,000EUR EURIBOR 4.112 6/15/09 (72,486)
41,700,000MXN MXN TIIE 9.270I 7/17/26 424,353
Six-Month
41,510,000NOK NIBOR 5.385 1/29/10 (78,977)
Six-Month
5,050,000EUR 4.2200 EURIBOR 1/29/10 71,653
- --------------------------------------------------------------------------------------------------------------------------------
Citibank NA, London:
Six-Month
1,260,000PLZ WIBOR 5.520 3/24/10 1,409
Six-Month
2,016,000PLZ WIBOR 5.550 3/25/10 2,850
- --------------------------------------------------------------------------------------------------------------------------------
Citibank NA, NY 73,200,000TWD 2.3200 TWD-telerate 6/27/11 8,893
- --------------------------------------------------------------------------------------------------------------------------------
Credit Suisse First 28-Day
Boston International 9,530,000MXN MXN TIIE 10.000 7/9/15 103,491
- --------------------------------------------------------------------------------------------------------------------------------
Credit Suisse First
Boston, Inc. 3,640,000PLZ Six-Month WIBOR 4.480 7/1/10 (8,009)
- --------------------------------------------------------------------------------------------------------------------------------
Credit Suisse
International 22,480,000MXN MXN TIIE 8.300 12/17/26 25,692
- --------------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
Six-Month
360,000,000HUF 8.4400 BUBOR 7/3/11 (1,032)
INR MIBOR-OIS
73,400,000INR 7.1750 Compound 6/27/11 36,858
- --------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Capital Market LP:
5.470 5/2/10 (66,264)
42,610,000NOK Six-Month NIBOR EUR-EURIBOR-
5,290,000EUR 4.4155 Telerate 5/2/10 55,656
- --------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The) 23,010,000MXN MXN TIIE 9.840 12/31/09 93,514
- --------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs CNY-
International 18,300,000CNY 4.0000 CFXSREPOFIX01 2/16/17 138,285
- --------------------------------------------------------------------------------------------------------------------------------
J Aron & Co.:
4,420,000BRR BZDI 14.050 1/2/12 199,338
6,090,000MXN MXN TIIIE 9.410 8/31/20 60,564
52 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTIONAL PAID BY RECEIVED BY TERMINATION
SWAP COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ----------------------------------------------------------------------------------------------------------------------------
J Aron & Co.: Continued
15,800,000MXN MXN TIIE 8.700% 2/5/16 $ 58,582
18,300,000MXN MXN TIIE 9.510 8/26/25 225,481
12,220,000MXN MXN TIIE 9.500 8/28/25 149,337
22,300,000MXN MXN TIIIE 9.150 8/27/26 205,351
25,560,000BRR BZDI 14.890 1/4/10 1,077,359
33,400,000MXN MXN TIIE 9.290 7/17/26 352,144
7,990,000MXN MXN TIIIE 10.290 6/4/15 99,035
9,700,000MXN MXN TIIIE 9.330 9/16/26 106,026
8,790,000BRR BZDI 12.920 1/2/14 307,052
4,390,000BRR BZDI 12.870 1/2/14 149,993
2,630,000BRR BZDI 12.840 1/2/14 88,637
8,750,000BRR BZDI 12.710 1/4/10 165,847
5,710,000BRR BZDI 12.730 1/2/14 182,740
15,140,000BRR BZDI 12.610 1/4/10 271,041
19,400,000BRR BZDI 12.390 1/2/12 435,365
21,000,000BRR BZDI 14.550 1/4/10 1,306,278
6,910,000BRR BZDI 12.260 1/2/15 178,153
3,160,000BRR BZDI 12.290 1/2/15 83,015
- ----------------------------------------------------------------------------------------------------------------------------
JPMorgan
Chase Bank 8,750,000BRR BZDI 13.910 1/2/12 374,599
- ----------------------------------------------------------------------------------------------------------------------------
JPMorgan
Chase Bank NA:
19,400,000BRR BZDI 12.380 1/2/12 763,679
Three-Month
39,520,000ZAR 8.2900 JIBA 6/23/08 96,143
Three-Month
82,000,000 LIBOR 5.570 5/26/16 (775,796)
- ----------------------------------------------------------------------------------------------------------------------------
Lehman Brothers
Special Financing, Inc.:
4,680,000PLZ Six-Month WIBOR 4.53 7/4/10 (11,316)
Fund pays the
greater of 0% and
8* (-0.0031375 -
(10 yr. CMS Index
+ 2 yr. CMS Index)
13,350,000 quarterly. $ 400,500 2/5/17 (388,548)
- ----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley &
Co. International 1,421,000,000KZT 8.2500 Three-Month KZT 6/29/12 --
-------------
$ 7,584,516
=============
Notional amount is reported in U.S. Dollars (USD), except for those denoted in
the following currencies:
BRR Brazilian Real
CNY Chinese Renminbi
EUR Euro
GBP British Pound Sterling
HUF Hungarian Forint
INR Indian Rupee
KZT Kazakhstan Tenge
MXN Mexican Nuevo Peso
NOK Norwegian Krone
PLZ Polish Zloty
TWD New Taiwan Dollar
ZAR South African Rand
53 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. INTEREST RATE SWAP CONTRACTS Continued
Index abbreviations are as follows:
BUBOR Budapest Interbank Offered Rate
BZDI Brazil Interbank Deposit Rate
CMS Constant Maturity Swap
CNY-
CFXSREPOFIX01 Chinese Renminbi 7 Days Repurchase Fixing Rates
EURIBOR Euro Interbank Offered Rate
JIBA South Africa Johannesburg Interbank Agreed Rate
LIBOR London-Interbank Offered Rate
MXN TIIE Mexican Peso-Interbank Equilibrium Interest Rate
MIBOR-OIS Mid Market Interest Rate for French Franc/Austrian Schilling and
India Swap Composites-Overnight Indexed Swap
NIBOR Norwegian Interbank Offered Rate
WIBOR Poland Warsaw Interbank Offer Bid Rate
- --------------------------------------------------------------------------------
10. TOTAL RETURN SWAP CONTRACTS
A total return swap is an agreement under which a set of future cash flows is
exchanged between two counterparties. One cash flow stream will typically be
based on a reference interest rate or index and the other on the total return of
a reference asset such as a security, a basket of securities, or an index. The
total return includes appreciation or depreciation on the reference asset, plus
any interest or dividend payments. Payments under the swap are based on an
agreed upon principal amount but since this principal amount is not exchanged,
it represents neither an asset nor a liability to either counterparty, and is
referred to as notional. Total return swaps are marked to market daily using
primarily quotations from counterparties and brokers. The value of the contracts
is separately disclosed on the Statement of Assets and Liabilities. The
unrealized appreciation (depreciation) related to the change in the valuation of
the notional amount of the swap is combined with the amount due to (owed by) the
Fund at termination or settlement. The net change in this amount during the
period is included on the Statement of Operations. The Fund also records any
periodic payments received from (paid to) the counterparty, including at
termination, under such contracts as realized gain (loss) on the Statement of
Operations. The primary risks associated with total return swaps are credit
risks (if the counterparty fails to meet its obligations) and market risk (if
there is no liquid market for the agreement or unfavorable changes occur in the
reference asset).
As of June 30, 2007, the Fund had entered into the following total return swap
agreements:
NOTIONAL PAID BY RECEIVED BY TERMINATION
SWAP COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ---------------------------------------------------------------------------------------------------------------------------
Citibank NA New York:
Twelve-Month
JPY BBA LIBOR plus
40 basis points and
if negative, the absolute If positive, the
value of the Total Total Return of a
Return of a custom custom basket
$ 918,415,561 basket of securities. of securities. 4/8/08 $ (115,135)
Twelve-Month
GBP BBA LIBOR plus
35 basis points and
if negative, the absolute If positive, the
value of the Total Total Return of a
Return of a custom custom basket
3,769,864 basket of securities. of securities. 5/7/08 (369,246)
54 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTIONAL PAID BY RECEIVED BY TERMINATION
SWAP COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ----------------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG:
If positive, the
If negative, the Total Return of
absolute value of the Lehman
the Lehman CMBS Index plus
$2,500,000 CMBS Index. 27.5 basis points. 11/1/07 $ 1,377
Six-Month USD
1,620,000 BBA LIBOR 5.46% 5/13/15 340,784
Six-Month USD
930,000 BBA LIBOR 5.25 6/23/15 164,250
- ----------------------------------------------------------------------------------------------------------------------------
If positive, the
If negative, the absolute value of
absolute value of Lehman Brothers
Lehman Brothers U.S. CMBS Index:
Goldman Sachs U.S. CMBS Index: Aggregate AAA
Capital Markets 5,310,000 Aggregate AAA. plus 15 basis points. 9/1/07 2,246
- ----------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The):
Six-Month USD
920,000 BBA LIBOR 5.10 1/14/15 193,325
Six-Month USD
920,000 BBA LIBOR 5.08 1/20/15 209,646
- ----------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
International:
One-Month USD
BBA LIBOR
plus 30 basis points
and if negative,
the absolute value If positive,
of the Total Return the Total Return
of a custom of a custom
24,303,657 equity basket. equity basket. 6/10/08 (812,821)
One-Month USD
BBA LIBOR
minus 5 basis points
and if negative,
the absolute value If positive,
of the Total Return the Total Return
of a custom of a custom
6,186,936 equity basket. equity basket. 6/10/08 (132,285)
One-Month USD
BBA LIBOR
and if negative,
the absolute value If positive,
of the Total Return the Total Return
of the MSCI Daily of the MSCI Daily
Total Return Net Total Return
Belgium USD Net Belgium USD
325,119 Market Index. Market Index. 10/9/07 (3,340)
55 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10. TOTAL RETURN SWAP CONTRACTS Continued
NOTIONAL PAID BY RECEIVED BY TERMINATION
SWAP COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
Goldman Sachs
International:
Continued
One-Month USD
BBA LIBOR
and if negative,
the absolute value If positive,
of the Total Return the Total Return
of the MSCI Daily of the MSCI
Total Return Net Daily Total Return
Belgium USD Net Belgium
$ 1,730,144 Market Index. USD Market Index. 10/9/07 $ (20,384)
One-Month USD
BBA LIBOR
and if negative,
the absolute value If positive,
of the Total Return the Total Return
of the MSCI Daily of the MSCI
Total Return Net Daily Total Return
Belgium USD Net Belgium USD
434,124 Market Index. Market Index. 10/9/07 (4,261)
If negative, the
If positive, the absolute value
Total Return of of the Total
the INDF/NSE Return INDF/NSE
NIFTY Index NIFTY Index
102,972,291 7/07 Future. 7/07 Future. 8/2/07 (38,619)
If positive, the
absolute value of If negative, the
the Total Return of Total Return of
the Swiss Market the Swiss Market
2,763,418 Index 9/07 Future. Index 9/07 Future. 9/18/07 (11,867)
If negative, the
absolute value of If positive, the
the Total Return Total Return of
of the BMU/BOVESPA the BMU/BOVESPA
5,004,384 8/07 Index. 8/07 Index. 8/16/07 132,856
- -----------------------------------------------------------------------------------------------------------------------------
If positive, the
If negative, the Total Return of
absolute value the Lehman CMBS
Lehman Brothers of the Lehman Index plus 32.5
Special Financing, Inc. 5,920,000 CMBS Index. basis points. 11/1/07 3,202
- -----------------------------------------------------------------------------------------------------------------------------
The Constant
Maturity
Merrill Lynch Option Price
Capital Services, Inc. 54,700,000 4.66 divided by 10,000. 6/11/17 (115,408)
- -----------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Three-Month
Capital Services, Inc. 271,430,000 USD BBA LIBOR 7.75 12/26/13 10,450
56 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTIONAL PAID BY RECEIVED BY TERMINATION
SWAP COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ----------------------------------------------------------------------------------------------------------------------------
One-Month EUR
BBA LIBOR plus If positive, the
30 basis points and Total Return of
if negative, the a custom basket
absolute value of of securities plus
the Total Return the dividends
Morgan Stanley of a custom basket from the basket
International $ 6,686,800 of securities. of securities. 10/9/07 $ (266,358)
-------------
$ (831,588)
=============
Abbreviations are as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered
Rate
BMU/BOVESPA Bovespa Index that trades on the Sao Paulo Stock
Exchange
CMBS Commercial Mortgage Backed Securities
EUR Euro
GBP British Pound Sterling
INDF/NSE
NIFTY Index Indian National Stock Exchange Nifty Index
JPY Japanese Yen
MSCI Morgan Stanley Capital International
- --------------------------------------------------------------------------------
11. CURRENCY SWAP CONTRACTS
A currency swap is an arrangement under which counterparties agree to exchange
different currencies equivalent to the notional value at contract inception and
reverse the exchange of the same notional values of those currencies at contract
termination. The contract may also include periodic exchanges of cash flows
based on a specified index or interest rate. Currency swaps are marked to market
daily using primarily quotations from counterparties and brokers and the value
of the contracts is separately disclosed on the Statement of Assets and
Liabilities in the annual and semi-annual reports. The unrealized appreciation
(depreciation) related to the change in the valuation of the notional amount of
the swap is combined with the amount due to (owed by) the Fund at termination or
settlement. The net change in this amount during the period is included on the
Statement of Operations. The Fund also records any periodic payments received
from (paid to) the counterparty, including at termination, under such contracts
as realized gain (loss) on the Statement of Operations.
Currency swap agreements entail exchange rate risk, interest rate risk and
credit risk. Due to the exchange of currency at contract termination, changes in
currency exchange rates may result in the Fund paying an amount greater than the
amount received. There is a risk, based on movements of interest rates or
indexes that the periodic payments made by the Fund will be greater than the
payments received. Credit risk arises from the possibility that the counterparty
will default on its payments to the Fund. The Manager monitors the
creditworthiness of counterparties on an ongoing basis.
As of June 30, 2007, the Fund entered into the following currency swap
arrangements:
NOTIONAL PAID BY RECEIVED BY TERMINATION
SWAP COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- ---------------------------------------------------------------------------------------------------------
Credit Suisse International:
3 Month USD
$ 3,170,000 BBA LIBOR 16.75% 2/26/12 $ 286,963
3 Month USD
1,255,000 BBA LIBOR 17.25 2/7/12 149,276
3 Month USD
1,890,000 BBA LIBOR 17.30 2/9/12 223,384
57 | OPPENHEIMER STRATEGIC BOND FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
11. CURRENCY SWAP CONTRACTS Continued
NOTIONAL PAID BY RECEIVED BY TERMINATION
SWAP COUNTERPARTY AMOUNT THE FUND THE FUND DATES VALUE
- -------------------------------------------------------------------------------------------------------
3 Month USD
Merrill Lynch International $ 1,960,000 BBA LIBOR 17.10% 2/6/12 $ 220,608
-------------
$ 880,231
=============
Abbreviation is as follows:
BBA LIBOR British Bankers' Association London-Interbank Offered Rate
- --------------------------------------------------------------------------------
12. ILLIQUID SECURITIES
As of June 30, 2007, 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.
- --------------------------------------------------------------------------------
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, 2007, the Fund had
on loan securities valued at $145,594,206, which are included in the Statement
of Assets and Liabilities as "Investments, at value" and, when applicable, as
"Receivable for Investments sold." Collateral of $85,149,082 was received for
the loans, all of which was received in cash and subsequently invested in
approved investments. In addition, $63,008,603 was received in the form of
securities.
- --------------------------------------------------------------------------------
14. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
58 | OPPENHEIMER STRATEGIC BOND FUND/VA
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in 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.
59 | OPPENHEIMER STRATEGIC BOND FUND/VA
OPPENHEIMER MAIN STREET SMALL CAP 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, 2007.
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
(1/1/07) (6/30/07) JUNE 30, 2007
- ------------------------------------------------------------------------------
Non-Service shares Actual $ 1,000.00 $ 1,099.20 $ 3.91
- ------------------------------------------------------------------------------
Non-Service shares Hypothetical 1,000.00 1,021.08 3.77
- ------------------------------------------------------------------------------
Service shares Actual 1,000.00 1,098.20 5.16
- ------------------------------------------------------------------------------
Service shares Hypothetical 1,000.00 1,019.89 4.97
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period). Those annualized expense ratios,
excluding affiliated fund indirect expenses, based on the 6-month period ended
June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- ---------------------------------------
Non-Service shares 0.75%
- ---------------------------------------
Service shares 0.99
The expense ratios reflect reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager that can be terminated at any time, without
advance notice. The "Financial Highlights" tables in the Fund's financial
statements, included in this report, also show the gross expense ratios, without
such waivers or reimbursements.
- --------------------------------------------------------------------------------
5 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--99.0%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--18.7%
- --------------------------------------------------------------------------------
AUTO COMPONENTS--1.5%
Aftermarket Technology Corp. 1 13,800 $ 409,584
- --------------------------------------------------------------------------------
American Axle & Manufacturing
Holdings, Inc. 2 67,500 1,999,350
- --------------------------------------------------------------------------------
ArvinMeritor, Inc. 2 115,700 2,568,540
- --------------------------------------------------------------------------------
Cooper Tire & Rubber Co. 17,400 480,588
- --------------------------------------------------------------------------------
Drew Industries, Inc. 1 10,100 334,714
- --------------------------------------------------------------------------------
Fuel Systems Solutions, Inc. 1,2 4,299 71,277
- --------------------------------------------------------------------------------
GenTek, Inc. 1,2 7,300 257,106
- --------------------------------------------------------------------------------
Gentex Corp. 2 58,700 1,155,803
- --------------------------------------------------------------------------------
Goodyear Tire & Rubber Co. (The) 1 20,800 723,008
- --------------------------------------------------------------------------------
Lear Corp. 1 30,000 1,068,300
- --------------------------------------------------------------------------------
Modine Manufacturing Co. 2 10,300 232,780
- --------------------------------------------------------------------------------
Sauer-Danfoss, Inc. 2 28,800 857,088
- --------------------------------------------------------------------------------
Shiloh Industries, Inc. 3,500 42,630
- --------------------------------------------------------------------------------
Standard Motor Products, Inc. 13,200 198,396
- --------------------------------------------------------------------------------
Tenneco, Inc. 1,2 95,900 3,360,336
----------------
13,759,500
- --------------------------------------------------------------------------------
AUTOMOBILES--0.1%
Monaco Coach Corp. 2 18,900 271,215
- --------------------------------------------------------------------------------
Winnebago Industries, Inc. 2 25,400 749,808
----------------
1,021,023
- --------------------------------------------------------------------------------
DISTRIBUTORS--0.0%
Keystone Automotive Industries, Inc. 1 2,300 95,151
- --------------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES--1.8%
Coinstar, Inc. 1 52,900 1,665,292
- --------------------------------------------------------------------------------
CPI Corp. 4,400 305,800
- --------------------------------------------------------------------------------
DeVry, Inc. 79,900 2,718,198
- --------------------------------------------------------------------------------
INVESTools, Inc. 1,2 10,500 104,580
- --------------------------------------------------------------------------------
ITT Educational Services, Inc. 1 9,000 1,056,420
- --------------------------------------------------------------------------------
Jackson Hewitt Tax Service, Inc. 2 28,400 798,324
- --------------------------------------------------------------------------------
Matthews International Corp., Cl. A 2 1,100 47,971
- --------------------------------------------------------------------------------
Pre-Paid Legal Services, Inc. 1 9,200 591,652
- --------------------------------------------------------------------------------
Regis Corp. 58,700 2,245,275
- --------------------------------------------------------------------------------
Service Corp. International 26,700 341,226
- --------------------------------------------------------------------------------
Sotheby's 2 24,700 1,136,694
- --------------------------------------------------------------------------------
Steiner Leisure Ltd. 1,2 17,300 849,776
- --------------------------------------------------------------------------------
Stewart Enterprises, Inc. 2 97,200 757,188
- --------------------------------------------------------------------------------
Strayer Education, Inc. 22,600 2,976,646
- --------------------------------------------------------------------------------
Vertrue, Inc. 1 5,900 287,802
----------------
15,882,844
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--3.1%
AFC Enterprises, Inc. 1,2 19,600 $ 338,884
- --------------------------------------------------------------------------------
Ambassadors Group, Inc. 2 10,300 365,959
- --------------------------------------------------------------------------------
Ameristar Casinos, Inc. 32,800 1,139,472
- --------------------------------------------------------------------------------
Applebee's International, Inc. 81,500 1,964,150
- --------------------------------------------------------------------------------
Bally Technologies, Inc. 1,2 22,100 583,882
- --------------------------------------------------------------------------------
Bob Evans Farms, Inc. 75,914 2,797,431
- --------------------------------------------------------------------------------
Brinker International, Inc. 32,400 948,348
- --------------------------------------------------------------------------------
Buffalo Wild Wings, Inc. 1,2 14,400 598,896
- --------------------------------------------------------------------------------
California Pizza Kitchen, Inc. 1,2 12,750 273,870
- --------------------------------------------------------------------------------
CBRL Group, Inc. 2 51,950 2,206,836
- --------------------------------------------------------------------------------
CEC Entertainment, Inc. 1 47,900 1,686,080
- --------------------------------------------------------------------------------
CKE Restaurants, Inc. 2 88,000 1,766,160
- --------------------------------------------------------------------------------
Darden Restaurants, Inc. 25,800 1,134,942
- --------------------------------------------------------------------------------
Denny's Corp. 1 79,100 351,995
- --------------------------------------------------------------------------------
Domino's Pizza, Inc. 2 94,800 1,731,996
- --------------------------------------------------------------------------------
Dover Downs Gaming &
Entertainment, Inc. 2 2,900 43,529
- --------------------------------------------------------------------------------
IHOP Corp. 2 42,300 2,302,389
- --------------------------------------------------------------------------------
Jack in the Box, Inc. 1,2 27,000 1,915,380
- --------------------------------------------------------------------------------
Luby's, Inc. 1 13,900 134,274
- --------------------------------------------------------------------------------
McCormick & Schmick's Seafood
Restaurants, Inc. 1,2 12,300 319,062
- --------------------------------------------------------------------------------
Monarch Casino & Resort, Inc. 1,2 12,100 324,885
- --------------------------------------------------------------------------------
MTR Gaming Group, Inc. 1 1,300 20,020
- --------------------------------------------------------------------------------
O'Charley's, Inc. 16,500 332,640
- --------------------------------------------------------------------------------
Premier Exhibitions, Inc. 1,2 8,400 132,384
- --------------------------------------------------------------------------------
Ruby Tuesday, Inc. 2 29,700 782,001
- --------------------------------------------------------------------------------
Speedway Motorsports, Inc. 4,100 163,918
- --------------------------------------------------------------------------------
Vail Resorts, Inc. 1,2 19,800 1,205,226
- --------------------------------------------------------------------------------
Wendy's International, Inc. 35,200 1,293,600
- --------------------------------------------------------------------------------
WMS Industries, Inc. 1,2 5,850 168,831
- --------------------------------------------------------------------------------
Wyndham Worldwide Corp. 1 20,700 750,582
----------------
27,777,622
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES--1.6%
American Greetings Corp., Cl. A 2 102,000 2,889,660
- --------------------------------------------------------------------------------
Avatar Holdings, Inc. 1,2 3,400 261,596
- --------------------------------------------------------------------------------
Black & Decker Corp. 6,200 547,522
- --------------------------------------------------------------------------------
Blyth, Inc. 48,400 1,286,472
- --------------------------------------------------------------------------------
Champion Enterprises, Inc. 1,2 54,200 532,786
- --------------------------------------------------------------------------------
CSS Industries, Inc. 2,750 108,928
- --------------------------------------------------------------------------------
Helen of Troy Ltd. 1 10,200 275,400
- --------------------------------------------------------------------------------
Hooker Furniture Corp. 4,700 105,468
- --------------------------------------------------------------------------------
Kimball International, Inc., Cl. B 2 53,300 746,733
- --------------------------------------------------------------------------------
La-Z-Boy, Inc. 2 25,900 296,814
- --------------------------------------------------------------------------------
Leggett & Platt, Inc. 2 16,400 361,620
6 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HOUSEHOLD DURABLES Continued
Libbey, Inc. 2 6,100 $ 131,577
- --------------------------------------------------------------------------------
Newell Rubbermaid, Inc. 8,000 235,440
- --------------------------------------------------------------------------------
NVR, Inc. 1 800 543,800
- --------------------------------------------------------------------------------
Ryland Group, Inc. (The) 15,700 586,709
- --------------------------------------------------------------------------------
Stanley Furniture Co., Inc. 2 5,400 110,916
- --------------------------------------------------------------------------------
Tempur-Pedic International, Inc. 2 100,100 2,592,590
- --------------------------------------------------------------------------------
Tupperware Brands Corp. 91,500 2,629,710
- --------------------------------------------------------------------------------
Universal Electronics, Inc. 1,2 7,100 257,872
----------------
14,501,613
- --------------------------------------------------------------------------------
INTERNET & CATALOG RETAIL--0.8%
1-800-FLOWERS.com, Inc. 1,2 22,500 212,175
- --------------------------------------------------------------------------------
Blue Nile, Inc. 1,2 15,500 936,200
- --------------------------------------------------------------------------------
Expedia, Inc. 1 51,501 1,508,464
- --------------------------------------------------------------------------------
FTD Group, Inc. 18,700 344,267
- --------------------------------------------------------------------------------
Gaiam, Inc. 1,2 6,300 114,849
- --------------------------------------------------------------------------------
GSI Commerce, Inc. 1,2 14,800 336,108
- --------------------------------------------------------------------------------
PetMed Express, Inc. 1,2 4,400 56,496
- --------------------------------------------------------------------------------
Priceline.com, Inc. 1,2 45,400 3,120,796
- --------------------------------------------------------------------------------
Systemax, Inc. 2 12,400 258,044
- --------------------------------------------------------------------------------
ValueVision Media, Inc., Cl. A 1,2 3,300 37,356
----------------
6,924,755
- --------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS--0.8%
Brunswick Corp. 25,800 841,854
- --------------------------------------------------------------------------------
Hasbro, Inc. 37,200 1,168,452
- --------------------------------------------------------------------------------
JAKKS Pacific, Inc. 1,2 18,300 514,962
- --------------------------------------------------------------------------------
K2, Inc. 1 8,000 121,520
- --------------------------------------------------------------------------------
Mattel, Inc. 49,600 1,254,384
- --------------------------------------------------------------------------------
Nautilus, Inc. 2 23,500 282,940
- --------------------------------------------------------------------------------
Polaris Industries, Inc. 2 35,100 1,901,016
- --------------------------------------------------------------------------------
RC2 Corp. 1 19,500 780,195
- --------------------------------------------------------------------------------
Steinway Musical Instruments, Inc. 2 5,500 190,245
- --------------------------------------------------------------------------------
Sturm, Ruger & Co., Inc. 1,2 19,100 296,432
----------------
7,352,000
- --------------------------------------------------------------------------------
MEDIA--2.5%
Arbitron, Inc. 2 44,600 2,298,238
- --------------------------------------------------------------------------------
Belo Corp., Cl. A 66,800 1,375,412
- --------------------------------------------------------------------------------
Carmike Cinemas, Inc. 2 3,300 72,468
- --------------------------------------------------------------------------------
Catalina Marketing Corp. 4,300 135,450
- --------------------------------------------------------------------------------
Citadel Broadcasting Corp. 2 23,100 148,995
- --------------------------------------------------------------------------------
Cox Radio, Inc., Cl. A 1,2 77,500 1,103,600
- --------------------------------------------------------------------------------
Cumulus Media, Inc., Cl. A 1,2 26,200 244,970
- --------------------------------------------------------------------------------
DG Fastchannel, Inc. 1,2 5,800 118,204
- --------------------------------------------------------------------------------
DreamWorks Animation SKG, Inc. 1 30,200 870,968
- --------------------------------------------------------------------------------
Entravision Communications Corp. 1 144,226 1,504,277
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIA Continued
Gemstar-TV Guide International, Inc. 1,2 210,900 $ 1,037,628
- --------------------------------------------------------------------------------
Getty Images, Inc. 1 20,500 980,105
- --------------------------------------------------------------------------------
Global Sources Ltd. 1 16,100 365,470
- --------------------------------------------------------------------------------
Gray Television, Inc. 2 5,200 48,204
- --------------------------------------------------------------------------------
Harris Interactive, Inc. 1,2 22,700 121,445
- --------------------------------------------------------------------------------
Idearc, Inc. 34,700 1,225,951
- --------------------------------------------------------------------------------
Interactive Data Corp. 1,700 45,526
- --------------------------------------------------------------------------------
Journal Communications, Inc. 2 32,900 428,029
- --------------------------------------------------------------------------------
Knology, Inc. 1,2 9,500 165,015
- --------------------------------------------------------------------------------
Lee Enterprises, Inc. 2 31,900 665,434
- --------------------------------------------------------------------------------
Lin TV Corp. 1,2 41,000 771,210
- --------------------------------------------------------------------------------
Live Nation, Inc. 1,2 29,900 669,162
- --------------------------------------------------------------------------------
Marvel Entertainment, Inc. 1,2 38,000 968,240
- --------------------------------------------------------------------------------
Mediacom Communications Corp. 1,2 92,000 891,480
- --------------------------------------------------------------------------------
Meredith Corp. 14,200 874,720
- --------------------------------------------------------------------------------
Nexstar Broadcasting Group, Inc., Cl. A 1 3,500 45,990
- --------------------------------------------------------------------------------
R.H. Donnelley Corp. 1 11,700 886,626
- --------------------------------------------------------------------------------
Regal Entertainment Group 20,200 442,986
- --------------------------------------------------------------------------------
Scholastic Corp. 1 26,800 963,192
- --------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., Cl. A 151,100 2,148,642
- --------------------------------------------------------------------------------
Tribune Co. 17,358 510,325
- --------------------------------------------------------------------------------
Westwood One, Inc. 19,200 138,048
- --------------------------------------------------------------------------------
Wiley (John) & Sons, Inc., Cl. A 5,900 284,911
- --------------------------------------------------------------------------------
World Wrestling Federation
Entertainment, Inc. 2 19,700 315,003
----------------
22,865,924
- --------------------------------------------------------------------------------
MULTILINE RETAIL--0.7%
99 Cents Only Stores 1,2 35,900 470,649
- --------------------------------------------------------------------------------
Big Lots, Inc. 1 46,600 1,370,972
- --------------------------------------------------------------------------------
Dillard's, Inc., Cl. A 20,400 732,972
- --------------------------------------------------------------------------------
Dollar Tree Stores, Inc. 1 36,300 1,580,865
- --------------------------------------------------------------------------------
Family Dollar Stores, Inc. 40,500 1,389,960
- --------------------------------------------------------------------------------
Fred's, Inc. 2 20,900 279,642
- --------------------------------------------------------------------------------
Saks, Inc. 30,300 646,905
----------------
6,471,965
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--4.2%
A.C. Moore Arts & Crafts, Inc. 1 12,900 252,969
- --------------------------------------------------------------------------------
Aeropostale, Inc. 1 71,600 2,984,288
- --------------------------------------------------------------------------------
American Eagle Outfitters, Inc. 33,650 863,459
- --------------------------------------------------------------------------------
AnnTaylor Stores Corp. 1 20,500 726,110
- --------------------------------------------------------------------------------
Asbury Automotive Group, Inc. 79,400 1,981,030
- --------------------------------------------------------------------------------
AutoZone, Inc. 1 9,700 1,325,214
- --------------------------------------------------------------------------------
Big 5 Sporting Goods Corp. 2 5,700 145,350
- --------------------------------------------------------------------------------
Blockbuster, Inc., Cl. A 1,2 80,200 345,662
7 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SPECIALTY RETAIL Continued
Books-A-Million, Inc. 2 17,200 $ 291,368
- --------------------------------------------------------------------------------
Brown Shoe Co., Inc. 28,575 694,944
- --------------------------------------------------------------------------------
Buckle, Inc. (The) 2 61,100 2,407,340
- --------------------------------------------------------------------------------
Casual Male Retail Group, Inc. 1,2 14,000 141,400
- --------------------------------------------------------------------------------
Cato Corp., Cl. A 5,150 112,991
- --------------------------------------------------------------------------------
Charming Shoppes, Inc. 1,2 41,900 453,777
- --------------------------------------------------------------------------------
Conn's, Inc. 1,2 3,900 111,384
- --------------------------------------------------------------------------------
CSK Auto Corp. 1 29,600 544,640
- --------------------------------------------------------------------------------
Dress Barn, Inc. (The) 1,2 67,600 1,387,152
- --------------------------------------------------------------------------------
DSW, Inc., Cl. A 1,2 31,200 1,086,384
- --------------------------------------------------------------------------------
GameStop Corp., Cl. A 1 2,200 86,020
- --------------------------------------------------------------------------------
Genesco, Inc. 1,2 33,700 1,762,847
- --------------------------------------------------------------------------------
Gymboree Corp. 1 61,900 2,439,479
- --------------------------------------------------------------------------------
Haverty Furniture Cos., Inc. 2 100 1,167
- --------------------------------------------------------------------------------
Jo-Ann Stores, Inc. 1 18,500 525,955
- --------------------------------------------------------------------------------
Jos. A. Banks Clothiers, Inc. 1,2 8,400 348,348
- --------------------------------------------------------------------------------
Men's Wearhouse, Inc. (The) 21,950 1,120,987
- --------------------------------------------------------------------------------
Midas, Inc. 1,2 12,800 290,176
- --------------------------------------------------------------------------------
Monro Muffler Brake, Inc. 5,500 205,975
- --------------------------------------------------------------------------------
Office Depot, Inc. 1 15,800 478,740
- --------------------------------------------------------------------------------
Payless ShoeSource, Inc. 1 48,000 1,514,400
- --------------------------------------------------------------------------------
Pep Boys-Manny, Moe & Jack 2 26,700 538,272
- --------------------------------------------------------------------------------
RadioShack Corp. 42,000 1,391,880
- --------------------------------------------------------------------------------
Rent-A-Center, Inc. 1 114,600 3,005,958
- --------------------------------------------------------------------------------
Ross Stores, Inc. 35,900 1,105,720
- --------------------------------------------------------------------------------
Sally Beauty Holdings, Inc. 1 124,100 1,116,900
- --------------------------------------------------------------------------------
Sherwin-Williams Co. 19,800 1,316,106
- --------------------------------------------------------------------------------
Shoe Carnival, Inc. 1,2 8,900 244,661
- --------------------------------------------------------------------------------
Sonic Automotive, Inc. 2 63,700 1,845,389
- --------------------------------------------------------------------------------
Stage Stores, Inc. 54,175 1,135,508
- --------------------------------------------------------------------------------
Syms Corp. 1,2 3,200 63,136
- --------------------------------------------------------------------------------
TravelCenters of America LLC 1 1,000 40,450
- --------------------------------------------------------------------------------
Tween Brands, Inc. 1,2 12,700 566,420
- --------------------------------------------------------------------------------
West Marine, Inc. 1,2 7,900 108,704
- --------------------------------------------------------------------------------
Wet Seal, Inc., Cl. A 1,2 52,400 314,924
----------------
37,423,584
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--1.6%
Cherokee, Inc. 2 5,600 204,624
- --------------------------------------------------------------------------------
Columbia Sportswear Co. 2 13,400 920,312
- --------------------------------------------------------------------------------
Deckers Outdoor Corp. 1,2 23,400 2,361,060
- --------------------------------------------------------------------------------
Fossil, Inc. 1,2 55,700 1,642,593
- --------------------------------------------------------------------------------
Hanesbrands, Inc. 1 24,300 656,829
- --------------------------------------------------------------------------------
Kellwood Co. 2 31,700 891,404
- --------------------------------------------------------------------------------
Liz Claiborne, Inc. 28,500 1,063,050
- --------------------------------------------------------------------------------
Maidenform Brands, Inc. 1 15,600 309,816
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS Continued
Movado Group, Inc. 2 22,600 $ 762,524
- --------------------------------------------------------------------------------
Oxford Industries, Inc. 2 11,000 487,740
- --------------------------------------------------------------------------------
Perry Ellis International, Inc. 1,2 10,600 341,002
- --------------------------------------------------------------------------------
Phillips/Van Heusen Corp. 6,000 363,420
- --------------------------------------------------------------------------------
Skechers USA, Inc., Cl. A 1 5,000 146,000
- --------------------------------------------------------------------------------
Steven Madden Ltd. 11,500 376,740
- --------------------------------------------------------------------------------
Stride Rite Corp. 9,400 190,444
- --------------------------------------------------------------------------------
UniFirst Corp. 2 6,000 264,300
- --------------------------------------------------------------------------------
Warnaco Group, Inc. (The) 1 25,100 987,434
- --------------------------------------------------------------------------------
Wolverine World Wide, Inc. 2 89,550 2,481,431
----------------
14,450,723
- --------------------------------------------------------------------------------
CONSUMER STAPLES--3.7%
- --------------------------------------------------------------------------------
BEVERAGES--0.2%
Boston Beer Co., Inc., Cl. A 1,2 7,300 287,255
- --------------------------------------------------------------------------------
Central European Distribution Corp. 1,2 1,700 58,854
- --------------------------------------------------------------------------------
MGP Ingredients, Inc. 2 10,800 182,520
- --------------------------------------------------------------------------------
Molson Coors Brewing Co., Cl. B 1,500 138,690
- --------------------------------------------------------------------------------
National Beverage Corp. 1,2 3,700 42,587
- --------------------------------------------------------------------------------
Pepsi Bottling Group, Inc. (The) 32,300 1,087,864
----------------
1,797,770
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.8%
Arden Group, Inc., Cl. A 2 1,505 205,282
- --------------------------------------------------------------------------------
BJ's Wholesale Club, Inc. 1 19,700 709,791
- --------------------------------------------------------------------------------
Casey's General Stores, Inc. 2 28,200 768,732
- --------------------------------------------------------------------------------
Ingles Markets, Inc., Cl. A 22,700 782,015
- --------------------------------------------------------------------------------
Longs Drug Stores, Inc. 25,200 1,323,504
- --------------------------------------------------------------------------------
Nash Finch Co. 2 10,700 529,650
- --------------------------------------------------------------------------------
Pathmark Stores, Inc. 1 1,800 23,328
- --------------------------------------------------------------------------------
Performance Food Group Co. 1,2 56,500 1,835,685
- --------------------------------------------------------------------------------
Spartan Stores, Inc. 2 10,000 329,100
- --------------------------------------------------------------------------------
Topps Co., Inc. (The) 1,500 15,765
- --------------------------------------------------------------------------------
Wild Oats Markets, Inc. 1 6,700 112,292
----------------
6,635,144
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.0%
Cal-Maine Foods, Inc. 2 10,400 170,352
- --------------------------------------------------------------------------------
Corn Products International, Inc. 3,900 177,255
- --------------------------------------------------------------------------------
Dean Foods Co. 31,300 997,531
- --------------------------------------------------------------------------------
Flowers Foods, Inc. 2 59,500 1,984,920
- --------------------------------------------------------------------------------
Fresh Del Monte Produce, Inc. 2 20,500 513,525
- --------------------------------------------------------------------------------
Hain Celestial Group, Inc. 1,2 1,900 51,566
- --------------------------------------------------------------------------------
Imperial Sugar Co. 2 12,000 369,480
- --------------------------------------------------------------------------------
J&J Snack Foods Corp. 2 6,000 226,440
- --------------------------------------------------------------------------------
J.M. Smucker Co. (The) 16,200 1,031,292
- --------------------------------------------------------------------------------
Lance, Inc. 2,100 49,476
8 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
FOOD PRODUCTS Continued
Ralcorp Holdings, Inc. 1,2 26,000 $ 1,389,700
- --------------------------------------------------------------------------------
Reddy Ice Holdings, Inc. 2 12,800 365,056
- --------------------------------------------------------------------------------
Seaboard Corp. 2 450 1,055,250
- --------------------------------------------------------------------------------
Tyson Foods, Inc., Cl. A 38,200 880,128
----------------
9,261,971
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.3%
Clorox Co. (The) 21,100 1,310,310
- --------------------------------------------------------------------------------
Energizer Holdings, Inc. 1 14,100 1,404,360
- --------------------------------------------------------------------------------
WD-40 Co. 6,700 220,229
----------------
2,934,899
- --------------------------------------------------------------------------------
PERSONAL PRODUCTS--0.8%
Alberto-Culver Co. 41,600 986,752
- --------------------------------------------------------------------------------
Chattem, Inc. 1,2 24,000 1,521,120
- --------------------------------------------------------------------------------
Elizabeth Arden, Inc. 1 13,100 317,806
- --------------------------------------------------------------------------------
Estee Lauder Cos., Inc. (The), Cl. A 21,800 992,118
- --------------------------------------------------------------------------------
Inter Parfums, Inc. 2 1,900 50,578
- --------------------------------------------------------------------------------
Mannatech, Inc. 2 10,900 173,201
- --------------------------------------------------------------------------------
NBTY, Inc. 1 28,100 1,213,920
- --------------------------------------------------------------------------------
Nu Skin Asia Pacific, Inc., Cl. A 2 17,100 282,150
- --------------------------------------------------------------------------------
Playtex Products, Inc. 1,2 90,800 1,344,748
- --------------------------------------------------------------------------------
Prestige Brands Holdings, Inc. 1,2 23,600 306,328
----------------
7,188,721
- --------------------------------------------------------------------------------
TOBACCO--0.6%
Loews Corp./Carolina Group 17,300 1,336,771
- --------------------------------------------------------------------------------
Universal Corp. 2 43,000 2,619,560
- --------------------------------------------------------------------------------
UST, Inc. 2 27,300 1,466,283
- --------------------------------------------------------------------------------
Vector Group Ltd. 2 1,400 31,542
----------------
5,454,156
- --------------------------------------------------------------------------------
ENERGY--4.7%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--1.9%
Atwood Oceanics, Inc. 1,2 16,500 1,132,230
- --------------------------------------------------------------------------------
Dawson Geophysical Co. 1,2 4,900 301,154
- --------------------------------------------------------------------------------
Dresser-Rand Group, Inc. 1 6,300 248,850
- --------------------------------------------------------------------------------
ENSCO International, Inc. 5,000 305,050
- --------------------------------------------------------------------------------
Ensign Energy Services, Inc. 14,500 258,625
- --------------------------------------------------------------------------------
Global Industries Ltd. 1 46,400 1,244,448
- --------------------------------------------------------------------------------
Grey Wolf, Inc. 1,2 235,000 1,936,400
- --------------------------------------------------------------------------------
Gulf Island Fabrication, Inc. 2 200 6,940
- --------------------------------------------------------------------------------
Gulfmark Offshore, Inc. 1,2 37,600 1,925,872
- --------------------------------------------------------------------------------
Hercules Offshore, Inc. 1,2 50,000 1,619,000
- --------------------------------------------------------------------------------
Input/Output, Inc. 1,2 37,500 585,375
- --------------------------------------------------------------------------------
Leader Energy Services Ltd. 1,3 74,600 52,523
- --------------------------------------------------------------------------------
Lufkin Industries, Inc. 3,000 193,650
- --------------------------------------------------------------------------------
Matrix Service Co. 1,2 15,400 382,690
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES Continued
NATCO Group, Inc., Cl. A 1,2 11,900 $ 547,876
- --------------------------------------------------------------------------------
Newpark Resources, Inc. 1,2 18,100 140,275
- --------------------------------------------------------------------------------
North American Energy Partners, Inc. 1 2,600 52,676
- --------------------------------------------------------------------------------
Oil States International, Inc. 1,2 30,900 1,277,406
- --------------------------------------------------------------------------------
Parker Drilling Co. 1 56,400 594,456
- --------------------------------------------------------------------------------
Patterson-UTI Energy, Inc. 3,400 89,114
- --------------------------------------------------------------------------------
Superior Offshore International, Inc. 1 11,100 202,020
- --------------------------------------------------------------------------------
T-3 Energy Services, Inc. 1 4,900 163,905
- --------------------------------------------------------------------------------
Technicoil Corp. 1 7,100 6,598
- --------------------------------------------------------------------------------
Technicoil Corp. 1 126,700 117,750
- --------------------------------------------------------------------------------
Tidewater, Inc. 2 19,700 1,396,336
- --------------------------------------------------------------------------------
Todco 1 18,100 854,501
- --------------------------------------------------------------------------------
Trican Well Service Ltd. 11,100 226,012
- --------------------------------------------------------------------------------
Trico Marine Services, Inc. 1,2 12,400 506,912
- --------------------------------------------------------------------------------
Universal Compression Holdings, Inc. 1 15,300 1,108,791
----------------
17,477,435
- --------------------------------------------------------------------------------
OIL & GAS--2.8%
Alberta Clipper Energy, Inc. 1 3,887 11,385
- --------------------------------------------------------------------------------
Alon USA Energy, Inc. 2 42,500 1,870,425
- --------------------------------------------------------------------------------
Alpha Natural Resources, Inc. 1,2 46,900 975,051
- --------------------------------------------------------------------------------
Arlington Tankers Ltd. 2 1,200 34,416
- --------------------------------------------------------------------------------
Berry Petroleum Co., Cl. A 2 52,600 1,981,968
- --------------------------------------------------------------------------------
Cabot Oil & Gas Corp., Cl. A 2,200 81,136
- --------------------------------------------------------------------------------
Celtic Exploration Ltd. 1 6,800 92,624
- --------------------------------------------------------------------------------
Continental Resources, Inc. 1 62,600 1,001,600
- --------------------------------------------------------------------------------
Copano Energy LLC 2 11,300 482,171
- --------------------------------------------------------------------------------
Delek US Holdings, Inc. 2 21,600 575,640
- --------------------------------------------------------------------------------
Delphi Energy Corp. 1 1,700 2,920
- --------------------------------------------------------------------------------
Delphi Energy Corp. 1 3,700 6,356
- --------------------------------------------------------------------------------
Frontier Oil Corp. 25,700 1,124,889
- --------------------------------------------------------------------------------
Frontline Ltd. 2 17,800 816,130
- --------------------------------------------------------------------------------
Galleon Energy, Inc., Cl. A 1 10,350 170,419
- --------------------------------------------------------------------------------
Galleon Energy, Inc., Subscription
Receipts 1 11,250 185,238
- --------------------------------------------------------------------------------
General Maritime Corp. 2 45,700 1,223,846
- --------------------------------------------------------------------------------
Golar LNG Ltd. 6,000 99,960
- --------------------------------------------------------------------------------
Holly Corp. 17,900 1,328,001
- --------------------------------------------------------------------------------
Jura Energy Corp. 1 110,300 93,189
- --------------------------------------------------------------------------------
Kereco Energy Ltd. 1 7,265 40,238
- --------------------------------------------------------------------------------
Knightsbridge Tankers Ltd. 2 8,700 265,437
- --------------------------------------------------------------------------------
Mariner Energy, Inc. 1 45,300 1,098,525
- --------------------------------------------------------------------------------
MarkWest Hydrocarbon, Inc. 2 4,100 235,463
- --------------------------------------------------------------------------------
Meridian Resource Corp. (The) 1 7,500 22,650
- --------------------------------------------------------------------------------
Midnight Oil Exploration Ltd. 1 45,050 72,740
- --------------------------------------------------------------------------------
Midnight Oil Exploration Ltd. 1,3 27,900 45,049
9 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
OIL & GAS Continued
Noble Energy, Inc. 11,300 $ 705,007
- --------------------------------------------------------------------------------
Overseas Shipholding Group, Inc. 15,500 1,261,700
- --------------------------------------------------------------------------------
Paramount Resources Ltd., Cl. A 1 16,200 314,039
- --------------------------------------------------------------------------------
Petroleum Development Corp. 1,2 5,300 251,644
- --------------------------------------------------------------------------------
PetroQuest Energy, Inc. 1,2 18,100 263,174
- --------------------------------------------------------------------------------
Plains Exploration & Production Co. 1 10,200 487,662
- --------------------------------------------------------------------------------
ProEx Energy Ltd. 1 8,840 124,478
- --------------------------------------------------------------------------------
Real Resources, Inc. 1 4,800 41,635
- --------------------------------------------------------------------------------
Redstar Oil & Gas, Inc. 1 35,955 35,440
- --------------------------------------------------------------------------------
Rosetta Resources, Inc. 1,2 47,800 1,029,612
- --------------------------------------------------------------------------------
Ship Finance International Ltd. 2 16,600 492,688
- --------------------------------------------------------------------------------
Sound Energy Trust 16,966 64,344
- --------------------------------------------------------------------------------
Sunoco, Inc. 17,600 1,402,368
- --------------------------------------------------------------------------------
Sure Energy, Inc. 1 6,023 7,350
- --------------------------------------------------------------------------------
Swift Energy Co. 1,2 1,700 72,692
- --------------------------------------------------------------------------------
Teekay Corp. 2 6,500 376,415
- --------------------------------------------------------------------------------
Tesoro Corp. 24,400 1,394,460
- --------------------------------------------------------------------------------
Thunder Energy Trust 11,833 44,322
- --------------------------------------------------------------------------------
True Energy Trust 1,464 7,902
- --------------------------------------------------------------------------------
Tusk Energy Corp. 1 43,812 81,434
- --------------------------------------------------------------------------------
Tusk Energy Corp. 1,4 21,300 39,591
- --------------------------------------------------------------------------------
Tusk Energy Corp. 1 77,900 144,794
- --------------------------------------------------------------------------------
USEC, Inc. 1,2 81,600 1,793,568
- --------------------------------------------------------------------------------
Vero Energy, Inc. 1 2,482 17,475
- --------------------------------------------------------------------------------
Western Refining, Inc. 2 14,100 814,980
----------------
25,206,240
- --------------------------------------------------------------------------------
FINANCIALS--14.5%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--0.8%
Apollo Investment Corp. 2 16,200 348,624
- --------------------------------------------------------------------------------
Ares Capital Corp. 2 22,900 385,865
- --------------------------------------------------------------------------------
Cohen & Steers, Inc. 2 19,000 825,550
- --------------------------------------------------------------------------------
GAMCO Investors, Inc., Cl. A 2 5,900 330,695
- --------------------------------------------------------------------------------
GFI Group, Inc. 1 6,400 463,872
- --------------------------------------------------------------------------------
Janus Capital Group, Inc. 47,400 1,319,616
- --------------------------------------------------------------------------------
Knight Capital Group, Inc., Cl. A 1 43,200 717,120
- --------------------------------------------------------------------------------
MCG Capital Corp. 2 13,000 208,260
- --------------------------------------------------------------------------------
Piper Jaffray Cos., Inc. 1,2 39,800 2,218,054
- --------------------------------------------------------------------------------
Prospect Capital Corp. 2 1,900 33,193
- --------------------------------------------------------------------------------
SWS Group, Inc. 14,150 305,923
- --------------------------------------------------------------------------------
Technology Investment Capital Corp. 600 9,474
- --------------------------------------------------------------------------------
U.S. Global Investors, Inc., Cl. A 2 5,400 122,418
- --------------------------------------------------------------------------------
W.P. Carey & Co. LLC 6,200 194,990
----------------
7,483,654
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--1.1%
Amcore Financial, Inc. 2 2,400 $ 69,576
- --------------------------------------------------------------------------------
BancorpSouth, Inc. 5,700 139,422
- --------------------------------------------------------------------------------
BankFinancial Corp. 2 1,800 27,810
- --------------------------------------------------------------------------------
Central Pacific Financial Corp. 2 9,700 320,197
- --------------------------------------------------------------------------------
Citizens Republic Bancorp, Inc. 2 21,800 398,940
- --------------------------------------------------------------------------------
City Holding Co. 7,400 283,642
- --------------------------------------------------------------------------------
Colonial BancGroup, Inc. (The) 6,100 152,317
- --------------------------------------------------------------------------------
Columbia Banking System, Inc. 2 490 14,333
- --------------------------------------------------------------------------------
Comerica, Inc. 23,500 1,397,545
- --------------------------------------------------------------------------------
F.N.B. Corp. 2 41,200 689,688
- --------------------------------------------------------------------------------
First BanCorp 2 7,100 78,029
- --------------------------------------------------------------------------------
First Citizens BancShares, Inc., Cl. A 1,000 194,400
- --------------------------------------------------------------------------------
First Security Group, Inc. 14,800 159,840
- --------------------------------------------------------------------------------
FirstMerit Corp. 2 21,700 454,181
- --------------------------------------------------------------------------------
Frontier Financial Corp. 2 1,350 30,416
- --------------------------------------------------------------------------------
Greater Bay Bancorp 28,100 782,304
- --------------------------------------------------------------------------------
Hanmi Financial Corp. 2 15,600 266,136
- --------------------------------------------------------------------------------
Huntington Bancshares, Inc. 44,700 1,016,478
- --------------------------------------------------------------------------------
International Bancshares Corp. 2 4,130 105,811
- --------------------------------------------------------------------------------
Intervest Bancshares Corp. 3,300 92,928
- --------------------------------------------------------------------------------
National Penn Bancshares, Inc. 2 12,715 212,086
- --------------------------------------------------------------------------------
Oriental Financial Group, Inc. 2 1,100 12,001
- --------------------------------------------------------------------------------
Park National Corp. 2 4,100 347,639
- --------------------------------------------------------------------------------
Porter Bancorp, Inc. 2,400 54,624
- --------------------------------------------------------------------------------
Preferred Bank 3,200 128,000
- --------------------------------------------------------------------------------
Republic Bancorp, Inc., Cl. A 2 1,915 31,770
- --------------------------------------------------------------------------------
Southwest Bancorp, Inc. 900 21,636
- --------------------------------------------------------------------------------
SVB Financial Group 1,2 33,500 1,779,185
- --------------------------------------------------------------------------------
TCF Financial Corp. 4,400 122,320
- --------------------------------------------------------------------------------
Texas Capital Bancshares, Inc. 1 1,500 33,525
- --------------------------------------------------------------------------------
UMB Financial Corp. 2 8,500 313,395
- --------------------------------------------------------------------------------
WesBanco, Inc. 2 2,700 79,650
----------------
9,809,824
- --------------------------------------------------------------------------------
CONSUMER FINANCE--0.8%
Advance America Cash Advance
Centers, Inc. 24,400 432,856
- --------------------------------------------------------------------------------
Advanta Corp., Cl. B 2 69,750 2,172,015
- --------------------------------------------------------------------------------
AmeriCredit Corp. 1,2 45,400 1,205,370
- --------------------------------------------------------------------------------
Cash America International, Inc. 41,600 1,649,440
- --------------------------------------------------------------------------------
Dollar Financial Corp. 1,2 6,100 173,850
- --------------------------------------------------------------------------------
EZCORP, Inc., Cl. A 1 19,300 255,532
- --------------------------------------------------------------------------------
World Acceptance Corp. 1,2 20,400 871,692
----------------
6,760,755
10 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--0.5%
Asset Acceptance Capital Corp. 1 12,000 $ 212,400
- --------------------------------------------------------------------------------
ASTA Funding, Inc. 2 11,200 430,416
- --------------------------------------------------------------------------------
CIT Group, Inc. 2,400 131,592
- --------------------------------------------------------------------------------
International Securities Exchange, Inc.,
Cl. A 2 39,200 2,561,720
- --------------------------------------------------------------------------------
MarketAxess Holdings, Inc. 1,2 11,700 210,483
- --------------------------------------------------------------------------------
Portfolio Recovery Associates, Inc. 2 15,100 906,302
- --------------------------------------------------------------------------------
Resource America, Inc., Cl. A 2 4,400 90,684
----------------
4,543,597
- --------------------------------------------------------------------------------
INSURANCE--6.5%
Affirmative Insurance Holdings, Inc. 3,800 57,950
- --------------------------------------------------------------------------------
Alfa Corp. 2 6,400 99,648
- --------------------------------------------------------------------------------
Allied World Assurance Holdings Ltd. 10,400 533,000
- --------------------------------------------------------------------------------
AMBAC Financial Group, Inc. 16,200 1,412,478
- --------------------------------------------------------------------------------
American Equity Investment Life
Holding Co. 2 27,000 326,160
- --------------------------------------------------------------------------------
American Financial Group, Inc. 24,600 840,090
- --------------------------------------------------------------------------------
American Physicians Capital, Inc. 1 10,850 439,425
- --------------------------------------------------------------------------------
Amerisafe, Inc. 1 10,500 206,115
- --------------------------------------------------------------------------------
AmTrust Financial Services, Inc. 2 25,700 482,903
- --------------------------------------------------------------------------------
Arch Capital Group Ltd. 1 2,600 188,604
- --------------------------------------------------------------------------------
Argonaut Group, Inc. 2 43,400 1,354,514
- --------------------------------------------------------------------------------
Aspen Insurance Holdings Ltd. 45,500 1,277,185
- --------------------------------------------------------------------------------
Assurant, Inc. 25,600 1,508,352
- --------------------------------------------------------------------------------
Assured Guaranty Ltd. 28,700 848,372
- --------------------------------------------------------------------------------
Bristol West Holdings, Inc. 14,600 326,602
- --------------------------------------------------------------------------------
Cincinnati Financial Corp. 10,600 460,040
- --------------------------------------------------------------------------------
CNA Surety Corp. 1,2 32,100 607,011
- --------------------------------------------------------------------------------
Commerce Group, Inc. (The) 28,300 982,576
- --------------------------------------------------------------------------------
Darwin Professional Underwriters, Inc. 1 6,000 151,020
- --------------------------------------------------------------------------------
Delphi Financial Group, Inc., Cl. A 68,050 2,845,851
- --------------------------------------------------------------------------------
Donegal Group, Inc., Cl. A 2 3,966 59,093
- --------------------------------------------------------------------------------
EMC Insurance Group, Inc. 2 5,500 136,510
- --------------------------------------------------------------------------------
Endurance Specialty Holdings Ltd. 14,100 564,564
- --------------------------------------------------------------------------------
FBL Financial Group, Inc., Cl. A 2 16,700 656,644
- --------------------------------------------------------------------------------
Fidelity National Title Group, Inc., Cl. A 53,200 1,260,840
- --------------------------------------------------------------------------------
First American Corp. (The) 19,700 975,150
- --------------------------------------------------------------------------------
FPIC Insurance Group, Inc. 1,2 9,800 399,546
- --------------------------------------------------------------------------------
Great American Financial Resources,
Inc. 2 1,800 43,542
- --------------------------------------------------------------------------------
Greenlight Capital Re Ltd., Cl. A 1 1,800 40,554
- --------------------------------------------------------------------------------
Harleysville Group, Inc. 22,100 737,256
- --------------------------------------------------------------------------------
Hilb, Rogal & Hamilton Co. 22,400 960,064
- --------------------------------------------------------------------------------
Horace Mann Educators Corp. 2 67,100 1,425,204
- --------------------------------------------------------------------------------
Infinity Property & Casualty Corp. 38,700 1,963,251
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INSURANCE Continued
IPC Holdings Ltd. 53,100 $ 1,714,599
- --------------------------------------------------------------------------------
LandAmerica Financial Group, Inc. 2 34,000 3,280,660
- --------------------------------------------------------------------------------
Markel Corp. 1 600 290,736
- --------------------------------------------------------------------------------
Max Capital Group Ltd. 26,800 758,440
- --------------------------------------------------------------------------------
MBIA, Inc. 2 20,200 1,256,844
- --------------------------------------------------------------------------------
Meadowbrook Insurance Group, Inc. 1,2 28,800 315,648
- --------------------------------------------------------------------------------
Midland Co. (The) 2 6,500 305,110
- --------------------------------------------------------------------------------
Montpelier Re Holdings Ltd. 41,200 763,848
- --------------------------------------------------------------------------------
National Western Life Insurance Co.,
Cl. A 2 800 202,336
- --------------------------------------------------------------------------------
Nationwide Financial Services, Inc.,
Cl. A 19,100 1,207,502
- --------------------------------------------------------------------------------
NYMAGIC, Inc. 7,000 281,400
- --------------------------------------------------------------------------------
Odyssey Re Holdings Corp. 13,500 579,015
- --------------------------------------------------------------------------------
Ohio Casualty Corp. 81,600 3,534,096
- --------------------------------------------------------------------------------
Old Republic International Corp. 2,550 54,213
- --------------------------------------------------------------------------------
Partnerre Holdings Ltd. 2 10,600 821,500
- --------------------------------------------------------------------------------
Philadelphia Consolidated Holding Co. 1 7,600 317,680
- --------------------------------------------------------------------------------
Phoenix Cos., Inc. (The) 153,600 2,305,536
- --------------------------------------------------------------------------------
Platinum Underwriters Holdings Ltd. 31,700 1,101,575
- --------------------------------------------------------------------------------
ProAssurance Corp. 1,2 32,600 1,814,842
- --------------------------------------------------------------------------------
ProCentury Corp. 15,100 253,076
- --------------------------------------------------------------------------------
Pxre Group Ltd. 1 15,300 70,992
- --------------------------------------------------------------------------------
Reinsurance Group of America, Inc. 12,900 777,096
- --------------------------------------------------------------------------------
RenaissanceRe Holdings Ltd. 10,900 675,691
- --------------------------------------------------------------------------------
RLI Corp. 2 44,900 2,512,155
- --------------------------------------------------------------------------------
Safeco Corp. 22,000 1,369,720
- --------------------------------------------------------------------------------
Safety Insurance Group, Inc. 2 7,900 327,060
- --------------------------------------------------------------------------------
Seabright Insurance Holdings, Inc. 1 16,800 293,664
- --------------------------------------------------------------------------------
Security Capital Assurance Ltd. 2 17,800 549,486
- --------------------------------------------------------------------------------
Selective Insurance Group, Inc. 2 48,300 1,298,304
- --------------------------------------------------------------------------------
State Auto Financial Corp. 17,000 521,050
- --------------------------------------------------------------------------------
Transatlantic Holdings, Inc. 3,200 227,616
- --------------------------------------------------------------------------------
United America Indemnity Ltd., Cl. A 1 43,706 1,086,968
- --------------------------------------------------------------------------------
United Fire & Casualty Co. 2 7,900 279,502
- --------------------------------------------------------------------------------
Universal American Financial Corp. 1,2 5,800 123,424
- --------------------------------------------------------------------------------
Zenith National Insurance Corp. 61,700 2,905,453
----------------
58,346,951
- --------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--3.1%
Acadia Realty Trust 2 2,200 57,090
- --------------------------------------------------------------------------------
Agree Realty Corp. 2 7,300 228,125
- --------------------------------------------------------------------------------
Alesco Financial, Inc. 2 27,900 226,827
- --------------------------------------------------------------------------------
Alexander's, Inc. 1,2 200 80,850
- --------------------------------------------------------------------------------
Alexandria Real Estate Equities, Inc. 6,000 580,920
11 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS Continued
American Home Mortgage Investment
Corp. 2 3,300 $ 60,654
- --------------------------------------------------------------------------------
Anthracite Capital, Inc. 2 3,000 35,100
- --------------------------------------------------------------------------------
Arbor Realty Trust, Inc. 12,600 325,206
- --------------------------------------------------------------------------------
Ashford Hospitality Trust 43,700 513,912
- --------------------------------------------------------------------------------
Associated Estates Realty Corp. 2 5,200 81,068
- --------------------------------------------------------------------------------
BioMed Realty Trust, Inc. 2 1,300 32,656
- --------------------------------------------------------------------------------
Brandywine Realty Trust 17,114 489,118
- --------------------------------------------------------------------------------
Capital Trust, Cl. A 6,700 228,738
- --------------------------------------------------------------------------------
CBL & Associates Properties, Inc. 17,300 623,665
- --------------------------------------------------------------------------------
Cedar Shopping Centers, Inc. 9,000 129,150
- --------------------------------------------------------------------------------
Colonial Properties Trust 2 4,254 155,058
- --------------------------------------------------------------------------------
Corporate Office Properties Trust 2 7,300 299,373
- --------------------------------------------------------------------------------
Crescent Real Estate Equities, Inc. 8,100 181,764
- --------------------------------------------------------------------------------
DCT Industrial Trust, Inc. 2 300 3,228
- --------------------------------------------------------------------------------
Deerfield Triarc Capital Corp. 2 5,500 80,465
- --------------------------------------------------------------------------------
DiamondRock Hospitality Co. 39,400 751,752
- --------------------------------------------------------------------------------
Digital Realty Trust, Inc. 26,300 990,984
- --------------------------------------------------------------------------------
EastGroup Properties, Inc. 2 6,300 276,066
- --------------------------------------------------------------------------------
Entertainment Properties Trust 2 13,000 699,140
- --------------------------------------------------------------------------------
Equity Inns, Inc. 23,100 517,440
- --------------------------------------------------------------------------------
Equity Lifestyle Properties, Inc. 6,800 354,892
- --------------------------------------------------------------------------------
Equity One, Inc. 2 20,900 533,995
- --------------------------------------------------------------------------------
FelCor Lodging Trust, Inc. 2 41,400 1,077,642
- --------------------------------------------------------------------------------
First Industrial Realty Trust, Inc. 2 31,200 1,209,312
- --------------------------------------------------------------------------------
Glimcher Realty Trust 2 4,300 107,500
- --------------------------------------------------------------------------------
Gramercy Capital Corp. 2 10,400 286,416
- --------------------------------------------------------------------------------
Hersha Hospitality Trust 2 9,400 111,108
- --------------------------------------------------------------------------------
Highland Hospitality Corp. 26,100 501,120
- --------------------------------------------------------------------------------
Highwoods Properties, Inc. 20,400 765,000
- --------------------------------------------------------------------------------
Home Properties of New York, Inc. 5,600 290,808
- --------------------------------------------------------------------------------
Inland Real Estate Corp. 2 40,400 685,992
- --------------------------------------------------------------------------------
Innkeepers USA Trust 2 9,000 159,570
- --------------------------------------------------------------------------------
Jer Investors Trust, Inc. 2 3,800 57,000
- --------------------------------------------------------------------------------
Kite Realty Group Trust 2 11,300 214,926
- --------------------------------------------------------------------------------
KKR Financial Holdings LLC 5,500 137,005
- --------------------------------------------------------------------------------
LaSalle Hotel Properties 2 10,400 451,568
- --------------------------------------------------------------------------------
Lexington Realty Trust 2 21,300 443,040
- --------------------------------------------------------------------------------
LTC Properties, Inc. 2 12,200 277,550
- --------------------------------------------------------------------------------
Luminent Mortgage Capital, Inc. 2 6,800 68,612
- --------------------------------------------------------------------------------
Medical Properties Trust, Inc. 2 5,300 70,119
- --------------------------------------------------------------------------------
Mid-America Apartment Communities,
Inc. 2 7,300 383,104
- --------------------------------------------------------------------------------
National Health Investors, Inc. 5,200 164,944
- --------------------------------------------------------------------------------
National Retail Properties, Inc. 2 32,400 708,264
- --------------------------------------------------------------------------------
Nationwide Health Properties, Inc. 51,400 1,398,080
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS Continued
Newcastle Investment Corp. 2 21,200 $ 531,484
- --------------------------------------------------------------------------------
Omega Healthcare Investors, Inc. 2 30,200 478,066
- --------------------------------------------------------------------------------
Parkway Properties, Inc. 2 9,500 456,285
- --------------------------------------------------------------------------------
Pennsylvania Real Estate Investment
Trust 2 21,300 944,229
- --------------------------------------------------------------------------------
PS Business Parks, Inc. 8,500 538,645
- --------------------------------------------------------------------------------
RAIT Financial Trust 2 21,600 562,032
- --------------------------------------------------------------------------------
Ramco-Gershenson Properties Trust 2 8,900 319,777
- --------------------------------------------------------------------------------
Realty Income Corp. 2 37,300 939,587
- --------------------------------------------------------------------------------
Redwood Trust, Inc. 2 7,000 338,660
- --------------------------------------------------------------------------------
Resource Capital Corp. 2 1,800 25,164
- --------------------------------------------------------------------------------
Saul Centers, Inc. 2 3,600 163,260
- --------------------------------------------------------------------------------
Senior Housing Properties Trust 2 43,600 887,260
- --------------------------------------------------------------------------------
Sovran Self Storage, Inc. 5,100 245,616
- --------------------------------------------------------------------------------
Spirit Finance Corp. 22,400 326,144
- --------------------------------------------------------------------------------
Strategic Hotels & Resorts, Inc. 23,200 521,768
- --------------------------------------------------------------------------------
Sunstone Hotel Investors, Inc. 2 27,400 777,886
- --------------------------------------------------------------------------------
Tanger Factory Outlet Centers, Inc. 2 21,100 790,195
- --------------------------------------------------------------------------------
Taubman Centers, Inc. 9,600 476,256
- --------------------------------------------------------------------------------
Washington Real Estate Investment
Trust 2 11,400 387,600
- --------------------------------------------------------------------------------
Winston Hotels, Inc. 6,900 103,500
----------------
27,919,330
- --------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT--0.1%
Jones Lang LaSalle, Inc. 9,000 1,021,500
- --------------------------------------------------------------------------------
Stratus Properties, Inc. 1,2 2,400 82,800
- --------------------------------------------------------------------------------
Thomas Properties Group, Inc. 2 900 14,382
----------------
1,118,682
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--1.6%
Astoria Financial Corp. 8,500 212,840
- --------------------------------------------------------------------------------
City Bank (Lynnwood Washington) 2 1,800 56,718
- --------------------------------------------------------------------------------
Corus Bankshares, Inc. 2 44,700 771,522
- --------------------------------------------------------------------------------
Downey Financial Corp. 2 22,500 1,484,550
- --------------------------------------------------------------------------------
Federal Agricultural Mortgage Corp.,
Non-Vtg. 2 7,700 263,494
- --------------------------------------------------------------------------------
First Financial Holdings, Inc. 2 1,700 55,607
- --------------------------------------------------------------------------------
First Niagara Financial Group, Inc. 134,100 1,756,710
- --------------------------------------------------------------------------------
FirstFed Financial Corp. 1,2 30,200 1,713,246
- --------------------------------------------------------------------------------
Franklin Bank Corp. 1,2 6,200 92,380
- --------------------------------------------------------------------------------
Hudson City Bancorp, Inc. 71,500 873,730
- --------------------------------------------------------------------------------
ITLA Capital Corp. 2 2,500 130,300
- --------------------------------------------------------------------------------
MAF Bancorp, Inc. 32,300 1,752,598
- --------------------------------------------------------------------------------
MGIC Investment Corp. 10,900 619,774
- --------------------------------------------------------------------------------
Ocwen Financial Corp. 1,2 47,900 638,507
- --------------------------------------------------------------------------------
PFF Bancorp, Inc. 2 3,610 100,827
12 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE Continued
PMI Group, Inc. (The) 24,300 $ 1,085,481
- --------------------------------------------------------------------------------
Provident Financial Services, Inc. 2 49,800 784,848
- --------------------------------------------------------------------------------
Radian Group, Inc. 13,800 745,200
- --------------------------------------------------------------------------------
TierOne Corp. 11,200 337,120
- --------------------------------------------------------------------------------
Triad Guaranty, Inc. 1,2 5,500 219,615
- --------------------------------------------------------------------------------
Washington Federal, Inc. 31,300 760,903
- --------------------------------------------------------------------------------
Westfield Financial, Inc. 3,600 35,892
- --------------------------------------------------------------------------------
WSFS Financial Corp. 2 2,700 176,661
--------------
14,668,523
- --------------------------------------------------------------------------------
HEALTH CARE--8.8%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--0.3%
Acorda Therapeutics, Inc. 1 19,500 332,670
- --------------------------------------------------------------------------------
Alexion Pharmaceuticals, Inc. 1,2 7,300 328,938
- --------------------------------------------------------------------------------
Alnylam Pharmaceuticals, Inc. 1,2 2,500 37,975
- --------------------------------------------------------------------------------
Array BioPharma, Inc. 1,2 8,900 103,863
- --------------------------------------------------------------------------------
CytRx Corp. 1,2 34,600 107,952
- --------------------------------------------------------------------------------
Halozyme Therapeutics, Inc. 1,2 3,700 34,151
- --------------------------------------------------------------------------------
Immunomedics, Inc. 1,2 39,700 164,755
- --------------------------------------------------------------------------------
Indevus Pharmaceuticals, Inc. 1,2 4,000 26,920
- --------------------------------------------------------------------------------
Isis Pharmaceuticals, Inc. 1,2 27,600 267,168
- --------------------------------------------------------------------------------
Maxygen, Inc. 1 1,400 11,998
- --------------------------------------------------------------------------------
Medarex, Inc. 1,2 2,700 38,583
- --------------------------------------------------------------------------------
Myriad Genetics, Inc. 1,2 4,400 163,636
- --------------------------------------------------------------------------------
OSI Pharmaceuticals, Inc. 1 7,700 278,817
- --------------------------------------------------------------------------------
Pharmion Corp. 1,2 4,200 121,590
- --------------------------------------------------------------------------------
Regeneron Pharmaceuticals, Inc. 1,2 50,500 904,960
--------------
2,923,976
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--1.7%
Advanced Medical Optics, Inc. 1,2 24,000 837,120
- --------------------------------------------------------------------------------
Align Technology, Inc. 1,2 19,200 463,872
- --------------------------------------------------------------------------------
Analogic Corp. 2 6,400 470,464
- --------------------------------------------------------------------------------
Cholestech Corp. 1 5,700 125,343
- --------------------------------------------------------------------------------
ConMed Corp. 1 43,700 1,279,536
- --------------------------------------------------------------------------------
Cynosure, Inc., Cl. A 1,2 3,200 116,576
- --------------------------------------------------------------------------------
Dade Behring Holdings, Inc. 23,700 1,258,944
- --------------------------------------------------------------------------------
Datascope Corp. 2 6,500 248,820
- --------------------------------------------------------------------------------
Edwards Lifesciences Corp. 1 21,100 1,041,074
- --------------------------------------------------------------------------------
Greatbatch, Inc. 1,2 19,400 628,560
- --------------------------------------------------------------------------------
Hologic, Inc. 1 3,800 210,178
- --------------------------------------------------------------------------------
Immucor, Inc. 1,2 93,200 2,606,804
- --------------------------------------------------------------------------------
Integra LifeSciences Holdings Corp. 1,2 7,400 365,708
- --------------------------------------------------------------------------------
Kinetic Concepts, Inc. 1,2 17,600 914,672
- --------------------------------------------------------------------------------
Mentor Corp. 2 9,000 366,120
- --------------------------------------------------------------------------------
Meridian Bioscience, Inc. 2 16,850 364,971
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES Continued
Quidel Corp. 1,2 14,700 $ 258,132
- --------------------------------------------------------------------------------
Steris Corp. 65,500 2,004,300
- --------------------------------------------------------------------------------
TomoTherapy, Inc. 1 9,200 201,664
- --------------------------------------------------------------------------------
West Pharmaceutical Services, Inc. 2 36,900 1,739,835
--------------
15,502,693
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--3.7%
Air Methods Corp. 1,2 9,200 337,364
- --------------------------------------------------------------------------------
Alliance Imaging, Inc. 1 39,700 372,783
- --------------------------------------------------------------------------------
American Dental Partners, Inc. 1 6,200 161,014
- --------------------------------------------------------------------------------
AmerisourceBergen Corp. 28,500 1,409,895
- --------------------------------------------------------------------------------
Apria Healthcare Group, Inc. 1 93,000 2,675,610
- --------------------------------------------------------------------------------
Centene Corp. 1 30,700 657,594
- --------------------------------------------------------------------------------
Chemed Corp. 2 50,500 3,347,645
- --------------------------------------------------------------------------------
Community Health Systems, Inc. 1 20,100 813,045
- --------------------------------------------------------------------------------
CorVel Corp. 1 8,700 227,418
- --------------------------------------------------------------------------------
Coventry Health Care, Inc. 1 23,700 1,366,305
- --------------------------------------------------------------------------------
Cross Country Healthcare, Inc. 1,2 8,400 140,112
- --------------------------------------------------------------------------------
CryoLife, Inc. 1,2 14,200 184,742
- --------------------------------------------------------------------------------
Emergency Medical Services LP, Cl. A 1,2 37,100 1,451,723
- --------------------------------------------------------------------------------
Genesis HealthCare Corp. 1 8,600 588,412
- --------------------------------------------------------------------------------
Hanger Orthopedic Group, Inc. 1 3,500 37,800
- --------------------------------------------------------------------------------
Health Net, Inc. 1 24,800 1,309,440
- --------------------------------------------------------------------------------
HealthExtras, Inc. 1,2 24,500 724,710
- --------------------------------------------------------------------------------
Healthspring, Inc. 1 93,700 1,785,922
- --------------------------------------------------------------------------------
Humana, Inc. 1 23,500 1,431,385
- --------------------------------------------------------------------------------
InVentiv Health, Inc. 1,2 3,532 129,307
- --------------------------------------------------------------------------------
Kindred Healthcare, Inc. 1,2 78,300 2,405,376
- --------------------------------------------------------------------------------
Laboratory Corp. of America Holdings 1 16,100 1,259,986
- --------------------------------------------------------------------------------
Landauer, Inc. 2 5,800 285,650
- --------------------------------------------------------------------------------
LCA-Vision, Inc. 2 42,500 2,008,550
- --------------------------------------------------------------------------------
LifePoint Hospitals, Inc. 1 12,900 498,972
- --------------------------------------------------------------------------------
Matria Healthcare, Inc. 1,2 5,300 160,484
- --------------------------------------------------------------------------------
MedCath Corp. 1,2 18,400 585,120
- --------------------------------------------------------------------------------
Molina Healthcare, Inc. 1 47,300 1,443,596
- --------------------------------------------------------------------------------
National HealthCare Corp. 2 1,500 77,400
- --------------------------------------------------------------------------------
Nighthawk Radiology Holdings, Inc. 1,2 9,200 166,060
- --------------------------------------------------------------------------------
Option Care, Inc. 2 2,600 40,040
- --------------------------------------------------------------------------------
PSS World Medical, Inc. 1,2 82,300 1,499,506
- --------------------------------------------------------------------------------
Sierra Health Services, Inc. 1 3,800 158,004
- --------------------------------------------------------------------------------
Skilled Healthcare Group, Inc., Cl. A 1,2 35,500 550,605
- --------------------------------------------------------------------------------
Sunrise Senior Living, Inc. 1,2 42,600 1,703,574
- --------------------------------------------------------------------------------
WellCare Health Plans, Inc. 1 10,800 977,508
--------------
32,972,657
13 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
HEALTH CARE TECHNOLOGY--0.2%
Hlth Corp. 1 46,700 $ 654,267
- --------------------------------------------------------------------------------
Omnicell, Inc. 1,2 22,800 473,784
- --------------------------------------------------------------------------------
Phase Forward, Inc. 1,2 26,500 445,995
--------------
1,574,046
- --------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES--1.2%
Bio-Rad Laboratories, Inc., Cl. A 1 4,500 340,065
- --------------------------------------------------------------------------------
Bruker BioSciences Corp. 1 21,800 196,418
- --------------------------------------------------------------------------------
Dionex Corp. 1,2 24,200 1,717,958
- --------------------------------------------------------------------------------
eResearch Technology, Inc. 1,2 2,600 24,726
- --------------------------------------------------------------------------------
Invitrogen Corp. 1 16,700 1,231,625
- --------------------------------------------------------------------------------
Parexel International Corp. 1 19,700 828,582
- --------------------------------------------------------------------------------
PerkinElmer, Inc. 36,800 959,008
- --------------------------------------------------------------------------------
Pharmanet Development Group, Inc. 1,2 14,900 475,012
- --------------------------------------------------------------------------------
Varian, Inc. 1 52,500 2,878,575
- --------------------------------------------------------------------------------
Ventana Medical Systems, Inc. 1,2 27,800 2,148,106
--------------
10,800,075
- --------------------------------------------------------------------------------
PHARMACEUTICALS--1.7%
Alpharma, Inc., Cl. A 2 72,000 1,872,720
- --------------------------------------------------------------------------------
BioMimetic Therapeutics, Inc. 1 15,300 239,139
- --------------------------------------------------------------------------------
Bradley Pharmaceuticals, Inc. 1,2 16,100 349,531
- --------------------------------------------------------------------------------
Cypress Bioscience, Inc. 1,2 19,700 261,222
- --------------------------------------------------------------------------------
Impax Laboratories, Inc. 1 2,500 30,000
- --------------------------------------------------------------------------------
K-V Pharmaceutical Co., Cl. A 1,2 57,500 1,566,300
- --------------------------------------------------------------------------------
King Pharmaceuticals, Inc. 1 54,200 1,108,932
- --------------------------------------------------------------------------------
Medicines Co. (The) 1 33,200 584,984
- --------------------------------------------------------------------------------
MGI Pharma, Inc. 1 54,500 1,219,165
- --------------------------------------------------------------------------------
Noven Pharmaceuticals, Inc. 1,2 14,300 335,335
- --------------------------------------------------------------------------------
Par Pharmaceutical Cos., Inc. 1,2 69,000 1,947,870
- --------------------------------------------------------------------------------
Perrigo Co. 137,000 2,682,460
- --------------------------------------------------------------------------------
Pozen, Inc. 1,2 17,900 323,453
- --------------------------------------------------------------------------------
Salix Pharmaceuticals Ltd. 1,2 6,300 77,490
- --------------------------------------------------------------------------------
Sciele Pharma, Inc. 1,2 94,700 2,231,132
- --------------------------------------------------------------------------------
ViroPharma, Inc. 1,2 60,400 833,520
- --------------------------------------------------------------------------------
Vivus, Inc. 1,2 2,000 10,460
--------------
15,673,713
- --------------------------------------------------------------------------------
INDUSTRIALS--17.2%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.4%
Aeroviroment, Inc. 1,2 4,900 100,989
- --------------------------------------------------------------------------------
Alliant Techsystems, Inc. 1,2 8,400 832,860
- --------------------------------------------------------------------------------
Armor Holdings, Inc. 1,2 13,700 1,190,119
- --------------------------------------------------------------------------------
Astronics Corp., Cl. B 1 650 20,865
- --------------------------------------------------------------------------------
BE Aerospace, Inc. 1 15,600 644,280
- --------------------------------------------------------------------------------
Ceradyne, Inc. 1,2 38,500 2,847,460
- --------------------------------------------------------------------------------
Cubic Corp. 1,400 42,252
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE Continued
Curtiss-Wright Corp. 2 45,500 $ 2,120,755
- --------------------------------------------------------------------------------
DRS Technologies, Inc. 3,100 177,537
- --------------------------------------------------------------------------------
Ducommun, Inc. 1 3,100 79,763
- --------------------------------------------------------------------------------
DynCorp International, Inc., Cl. A 1,2 34,700 763,053
- --------------------------------------------------------------------------------
EDO Corp. 2 8,700 285,969
- --------------------------------------------------------------------------------
Innovative Solutions & Support, Inc. 1,2 11,800 273,996
- --------------------------------------------------------------------------------
Orbital Sciences Corp. 1 123,700 2,598,937
- --------------------------------------------------------------------------------
United Industrial Corp. 2 4,700 281,906
--------------
12,260,741
- --------------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS--0.5%
ABX Air, Inc. 1 29,300 236,158
- --------------------------------------------------------------------------------
Atlas Air Worldwide Holdings, Inc. 1,2 4,800 282,912
- --------------------------------------------------------------------------------
EGL, Inc. 1 19,900 924,952
- --------------------------------------------------------------------------------
Hub Group, Inc., Cl. A 1 79,400 2,791,704
- --------------------------------------------------------------------------------
Pacer International, Inc. 2 11,400 268,128
--------------
4,503,854
- --------------------------------------------------------------------------------
AIRLINES--0.3%
AMR Corp. 1,2 42,300 1,114,605
- --------------------------------------------------------------------------------
Continental Airlines, Inc., Cl. B 1 5,300 179,511
- --------------------------------------------------------------------------------
Pinnacle Airlines Corp. 1,2 12,900 241,875
- --------------------------------------------------------------------------------
Republic Airways Holdings, Inc. 1,2 28,900 588,115
- --------------------------------------------------------------------------------
SkyWest, Inc. 32,900 784,007
--------------
2,908,113
- --------------------------------------------------------------------------------
BUILDING PRODUCTS--0.2%
American Woodmark Corp. 2 9,200 318,320
- --------------------------------------------------------------------------------
Apogee Enterprises, Inc. 2 15,100 420,082
- --------------------------------------------------------------------------------
Builders FirstSource, Inc. 1,2 4,000 64,240
- --------------------------------------------------------------------------------
Lennox International, Inc. 10,800 369,684
- --------------------------------------------------------------------------------
Universal Forest Products, Inc. 2 20,900 883,234
--------------
2,055,560
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--6.4%
ABM Industries, Inc. 88,500 2,284,185
- --------------------------------------------------------------------------------
Acco Brands Corp. 1,2 87,700 2,021,485
- --------------------------------------------------------------------------------
Administaff, Inc. 2 54,900 1,838,601
- --------------------------------------------------------------------------------
Angelica Corp. 2 800 16,864
- --------------------------------------------------------------------------------
Bowne & Co., Inc. 2 17,900 349,229
- --------------------------------------------------------------------------------
CDI Corp. 2 13,500 434,700
- --------------------------------------------------------------------------------
Cenveo, Inc. 1 51,025 1,183,270
- --------------------------------------------------------------------------------
Clean Harbors, Inc. 1,2 7,500 370,650
- --------------------------------------------------------------------------------
Comfort Systems USA, Inc. 2 24,200 343,156
- --------------------------------------------------------------------------------
COMSYS IT Partners, Inc. 1 25,000 570,250
- --------------------------------------------------------------------------------
Consolidated Graphics, Inc. 1 30,700 2,126,896
- --------------------------------------------------------------------------------
Cornell Corrections, Inc. 1,2 3,400 83,504
- --------------------------------------------------------------------------------
Deluxe Corp. 82,300 3,342,203
14 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES Continued
Diamond Management & Technology
Consultants, Inc. 21,800 287,760
- --------------------------------------------------------------------------------
Donnelley (R.R.) & Sons Co. 36,500 1,588,115
- --------------------------------------------------------------------------------
Dun & Bradstreet Corp. 600 61,788
- --------------------------------------------------------------------------------
Ennis, Inc. 14,500 341,040
- --------------------------------------------------------------------------------
Exponent, Inc. 1,2 15,700 351,209
- --------------------------------------------------------------------------------
First Consulting Group, Inc. 1 5,700 54,150
- --------------------------------------------------------------------------------
FTI Consulting, Inc. 1,2 15,800 600,874
- --------------------------------------------------------------------------------
Geo Group, Inc. (The) 1,2 11,200 325,920
- --------------------------------------------------------------------------------
Healthcare Services Group, Inc. 2 2,774 81,833
- --------------------------------------------------------------------------------
Heidrick & Struggles International, Inc. 1,2 41,160 2,109,038
- --------------------------------------------------------------------------------
HNI Corp. 9,800 401,800
- --------------------------------------------------------------------------------
Hudson Highland Group, Inc. 1 16,900 361,491
- --------------------------------------------------------------------------------
IHS, Inc., Cl. A 1 22,500 1,035,000
- --------------------------------------------------------------------------------
Ikon Office Solutions, Inc. 190,600 2,975,266
- --------------------------------------------------------------------------------
Interface, Inc., Cl. A 2 60,400 1,139,144
- --------------------------------------------------------------------------------
Kelly Services, Inc., Cl. A 11,100 304,806
- --------------------------------------------------------------------------------
Kforce, Inc. 1,2 5,600 89,488
- --------------------------------------------------------------------------------
Knoll, Inc. 98,600 2,208,640
- --------------------------------------------------------------------------------
Korn-Ferry International 1 105,300 2,765,178
- --------------------------------------------------------------------------------
Labor Ready, Inc. 1 114,400 2,643,784
- --------------------------------------------------------------------------------
M&F Worldwide Corp. 1,2 2,300 153,134
- --------------------------------------------------------------------------------
Manpower, Inc. 16,800 1,549,632
- --------------------------------------------------------------------------------
McGrath Rentcorp 2 3,000 101,070
- --------------------------------------------------------------------------------
Miller (Herman), Inc. 28,000 884,800
- --------------------------------------------------------------------------------
Mine Safety Appliances Co. 2 200 8,752
- --------------------------------------------------------------------------------
PHH Corp. 1 48,700 1,519,927
- --------------------------------------------------------------------------------
Pike Electric Corp. 1,2 15,000 335,700
- --------------------------------------------------------------------------------
Republic Services, Inc. 44,150 1,352,756
- --------------------------------------------------------------------------------
Resources Connection, Inc. 1 9,200 305,256
- --------------------------------------------------------------------------------
Rollins, Inc. 2 35,200 801,504
- --------------------------------------------------------------------------------
RSC Holdings, Inc. 1 52,200 1,044,000
- --------------------------------------------------------------------------------
Spherion Corp. 1,2 43,700 410,343
- --------------------------------------------------------------------------------
Steelcase, Inc., Cl. A 46,600 862,100
- --------------------------------------------------------------------------------
Taleo Corp., Cl. A 1 12,800 288,384
- --------------------------------------------------------------------------------
Team, Inc. 1,2 7,400 332,778
- --------------------------------------------------------------------------------
TeleTech Holdings, Inc. 1,2 28,900 938,672
- --------------------------------------------------------------------------------
Tetra Tech, Inc. 1,2 107,400 2,314,470
- --------------------------------------------------------------------------------
United Stationers, Inc. 1 40,700 2,712,248
- --------------------------------------------------------------------------------
Viad Corp. 2 56,500 2,382,605
- --------------------------------------------------------------------------------
Volt Information Sciences, Inc. 1,2 30,550 563,342
- --------------------------------------------------------------------------------
Waste Connections, Inc. 1 23,200 701,568
- --------------------------------------------------------------------------------
Waste Industries USA, Inc. 4,700 160,458
- --------------------------------------------------------------------------------
Watson Wyatt & Co. Holdings 62,300 3,144,904
--------------
57,559,720
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING--1.4%
Aecom Technology Corp. 1 30,800 $ 764,148
- --------------------------------------------------------------------------------
Chicago Bridge & Iron Co. NV 26,400 996,336
- --------------------------------------------------------------------------------
EMCOR Group, Inc. 1 49,900 3,637,710
- --------------------------------------------------------------------------------
Granite Construction, Inc. 13,100 840,758
- --------------------------------------------------------------------------------
Infrasource Services, Inc. 1 85,900 3,186,890
- --------------------------------------------------------------------------------
Integrated Electrical Services, Inc. 1 6,500 214,305
- --------------------------------------------------------------------------------
Jacobs Engineering Group, Inc. 1 3,700 212,787
- --------------------------------------------------------------------------------
Perini Corp. 1 42,200 2,596,566
- --------------------------------------------------------------------------------
Washington Group International, Inc. 1,2 4,800 384,048
--------------
12,833,548
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.4%
Acuity Brands, Inc. 27,500 1,657,700
- --------------------------------------------------------------------------------
AZZ, Inc. 1,2 7,000 235,550
- --------------------------------------------------------------------------------
Baldor Electric Co. 2 6,400 315,392
- --------------------------------------------------------------------------------
Belden, Inc. 2 27,800 1,538,730
- --------------------------------------------------------------------------------
EnerSys, Inc. 1,2 19,200 351,360
- --------------------------------------------------------------------------------
Genlyte Group, Inc. (The) 1 5,700 447,678
- --------------------------------------------------------------------------------
GrafTech International Ltd. 1,2 187,800 3,162,552
- --------------------------------------------------------------------------------
II-VI, Inc. 1,2 29,300 796,081
- --------------------------------------------------------------------------------
Lamson & Sessions Co. (The) 1,2 8,900 236,473
- --------------------------------------------------------------------------------
Powell Industries, Inc. 1,2 1,200 38,112
- --------------------------------------------------------------------------------
Thomas & Betts Corp. 1 18,700 1,084,600
- --------------------------------------------------------------------------------
Vicor Corp. 2 6,500 85,995
- --------------------------------------------------------------------------------
Woodward Governor Co. 2 53,400 2,865,978
--------------
12,816,201
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.2%
Raven Industries, Inc. 2 1,200 42,852
- --------------------------------------------------------------------------------
Sequa Corp., Cl. A 1,2 7,900 884,800
- --------------------------------------------------------------------------------
Standex International Corp. 1,600 45,504
- --------------------------------------------------------------------------------
Teleflex, Inc. 3,700 302,586
- --------------------------------------------------------------------------------
Tredegar Corp. 2 35,500 756,150
--------------
2,031,892
- --------------------------------------------------------------------------------
MACHINERY--3.5%
Accuride Corp. 1 26,000 400,660
- --------------------------------------------------------------------------------
AGCO Corp. 1 8,300 360,303
- --------------------------------------------------------------------------------
American Railcar Industries, Inc. 2 7,000 273,000
- --------------------------------------------------------------------------------
Ampco-Pittsburgh Corp. 9,600 384,864
- --------------------------------------------------------------------------------
Astec Industries, Inc. 1 14,900 629,078
- --------------------------------------------------------------------------------
Blount International, Inc. 1 1,400 18,312
- --------------------------------------------------------------------------------
Cascade Corp. 2 7,800 611,832
- --------------------------------------------------------------------------------
CIRCOR International, Inc. 2 6,900 278,967
- --------------------------------------------------------------------------------
Clarcor, Inc. 2 5,700 213,351
- --------------------------------------------------------------------------------
Columbus McKinnon Corp. 1,2 6,500 209,300
- --------------------------------------------------------------------------------
Cummins, Inc. 19,900 2,014,079
15 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
MACHINERY Continued
EnPro Industries, Inc. 1 6,000 $ 256,740
- --------------------------------------------------------------------------------
Freightcar America, Inc. 2 5,600 267,904
- --------------------------------------------------------------------------------
Gardner Denver, Inc. 1 37,900 1,612,645
- --------------------------------------------------------------------------------
Gorman-Rupp Co. (The) 2 1,275 40,622
- --------------------------------------------------------------------------------
Hardinge, Inc. 2 4,200 142,926
- --------------------------------------------------------------------------------
Hurco Cos., Inc. 1,2 4,900 244,902
- --------------------------------------------------------------------------------
Kadant, Inc. 1,2 13,600 424,320
- --------------------------------------------------------------------------------
Kaydon Corp. 2 43,600 2,272,432
- --------------------------------------------------------------------------------
Lydall, Inc. 1 1,100 16,071
- --------------------------------------------------------------------------------
Manitowoc Co., Inc. (The) 11,000 884,180
- --------------------------------------------------------------------------------
McCoy Corp. 3 46,600 240,601
- --------------------------------------------------------------------------------
Middleby Corp. (The) 1,2 34,500 2,063,790
- --------------------------------------------------------------------------------
Miller Industries, Inc. 1 1,200 30,120
- --------------------------------------------------------------------------------
Mueller Industries, Inc. 19,700 678,468
- --------------------------------------------------------------------------------
NACCO Industries, Inc., Cl. A 2 11,700 1,819,233
- --------------------------------------------------------------------------------
Navistar International Corp. 1,2 13,700 904,200
- --------------------------------------------------------------------------------
Nordson Corp. 30,200 1,514,832
- --------------------------------------------------------------------------------
Pall Corp. 30,000 1,379,700
- --------------------------------------------------------------------------------
RBC Bearings, Inc. 1,2 11,300 466,125
- --------------------------------------------------------------------------------
Robbins & Myers, Inc. 10,300 547,239
- --------------------------------------------------------------------------------
SPX Corp. 15,100 1,325,931
- --------------------------------------------------------------------------------
Sun Hydraulics Corp. 2 5,300 261,025
- --------------------------------------------------------------------------------
Tecumseh Products Co., Cl. A 1,2 3,600 56,556
- --------------------------------------------------------------------------------
Tennant Co. 2 4,800 175,200
- --------------------------------------------------------------------------------
Terex Corp. 1 9,700 788,610
- --------------------------------------------------------------------------------
Titan International, Inc. 2 10,600 335,066
- --------------------------------------------------------------------------------
Toro Co. (The) 23,500 1,383,915
- --------------------------------------------------------------------------------
Valmont Industries, Inc. 2 38,000 2,764,880
- --------------------------------------------------------------------------------
Wabash National Corp. 2 23,900 349,657
- --------------------------------------------------------------------------------
Wabtec Corp. 79,000 2,885,870
--------------
31,527,506
- --------------------------------------------------------------------------------
MARINE--0.3%
Eagle Bulk Shipping, Inc. 2 6,500 145,665
- --------------------------------------------------------------------------------
Excel Maritime Carriers Ltd. 9,200 231,656
- --------------------------------------------------------------------------------
Genco Shipping & Trading Ltd. 2 5,700 235,182
- --------------------------------------------------------------------------------
Horizon Lines, Inc., Cl. A 61,900 2,027,844
--------------
2,640,347
- --------------------------------------------------------------------------------
ROAD & RAIL--0.7%
Avis Budget Group, Inc. 1 37,600 1,068,968
- --------------------------------------------------------------------------------
Con-way, Inc. 18,700 939,488
- --------------------------------------------------------------------------------
Dollar Thrifty Automotive Group, Inc. 1 13,500 551,340
- --------------------------------------------------------------------------------
Genesee & Wyoming, Inc., Cl. A 1 1,200 35,808
- --------------------------------------------------------------------------------
Kansas City Southern, Inc. 1 29,500 1,107,430
- --------------------------------------------------------------------------------
Laidlaw International, Inc. 31,300 1,081,415
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ROAD & RAIL Continued
Landstar System, Inc. 17,700 $ 854,025
- --------------------------------------------------------------------------------
P.A.M. Transportation Services, Inc. 1 100 1,828
- --------------------------------------------------------------------------------
Saia, Inc. 1 9,100 248,066
--------------
5,888,368
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.8%
Applied Industrial Technologies, Inc. 2 83,675 2,468,413
- --------------------------------------------------------------------------------
BlueLinx Holdings, Inc. 2 11,500 120,635
- --------------------------------------------------------------------------------
Kaman Corp., Cl. A 2 9,500 296,305
- --------------------------------------------------------------------------------
TAL International Group, Inc. 2 3,900 115,869
- --------------------------------------------------------------------------------
UAP Holding Corp. 90,900 2,739,726
- --------------------------------------------------------------------------------
W.W. Grainger, Inc. 15,200 1,414,360
- --------------------------------------------------------------------------------
Watsco, Inc. 1,700 92,480
--------------
7,247,788
- --------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE--0.1%
CAI International, Inc. 1 30,300 399,354
- --------------------------------------------------------------------------------
Macquarie Infrastructure Co. LLC 2 3,100 128,588
--------------
527,942
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--18.8%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--3.1%
3Com Corp. 1 52,900 218,477
- --------------------------------------------------------------------------------
ADC Telecommunications, Inc. 1 8,900 163,137
- --------------------------------------------------------------------------------
ADTRAN, Inc. 2 111,900 2,906,043
- --------------------------------------------------------------------------------
Anaren Microwave, Inc. 1,2 15,400 271,194
- --------------------------------------------------------------------------------
Andrew Corp. 1 60,100 867,844
- --------------------------------------------------------------------------------
Arris Group, Inc. 1 195,400 3,437,086
- --------------------------------------------------------------------------------
Avaya, Inc. 1 76,200 1,283,208
- --------------------------------------------------------------------------------
BigBand Networks, Inc. 1,2 3,300 43,263
- --------------------------------------------------------------------------------
C-COR.net Corp. 1 26,600 373,996
- --------------------------------------------------------------------------------
CommScope, Inc. 1 32,700 1,908,045
- --------------------------------------------------------------------------------
Comtech Group, Inc. 1 3,800 62,738
- --------------------------------------------------------------------------------
Comtech Telecommunications Corp. 1,2 52,200 2,423,124
- --------------------------------------------------------------------------------
Digi International, Inc. 1,2 2,900 42,746
- --------------------------------------------------------------------------------
Ditech Networks, Inc. 1,2 20,400 167,076
- --------------------------------------------------------------------------------
Dycom Industries, Inc. 1,2 77,000 2,308,460
- --------------------------------------------------------------------------------
EMS Technologies, Inc. 1,2 12,700 280,162
- --------------------------------------------------------------------------------
Extreme Networks, Inc. 1,2 69,100 279,855
- --------------------------------------------------------------------------------
Foundry Networks, Inc. 1 64,200 1,069,572
- --------------------------------------------------------------------------------
Infinera Corp. 1,2 25,800 642,936
- --------------------------------------------------------------------------------
Inter-Tel, Inc. 2 1,100 26,323
- --------------------------------------------------------------------------------
InterDigital Communications Corp. 1,2 78,800 2,534,996
- --------------------------------------------------------------------------------
Loral Space & Communications Ltd. 1,2 10,700 527,296
- --------------------------------------------------------------------------------
Netgear, Inc. 1,2 57,344 2,078,720
- --------------------------------------------------------------------------------
Network Equipment Technologies,
Inc. 1,2 15,600 148,824
16 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
Oplink Communications, Inc. 1 12,400 $ 186,000
- --------------------------------------------------------------------------------
Performance Technologies, Inc. 1 5,200 23,504
- --------------------------------------------------------------------------------
Plantronics, Inc. 2 26,300 689,586
- --------------------------------------------------------------------------------
Polycom, Inc. 1 7,300 245,280
- --------------------------------------------------------------------------------
Sonus Networks, Inc. 1 195,700 1,667,364
- --------------------------------------------------------------------------------
Starent Networks Corp. 1 15,090 221,823
- --------------------------------------------------------------------------------
UTStarcom, Inc. 1,2 84,200 472,362
- --------------------------------------------------------------------------------
ViaSat, Inc. 1,2 17,300 555,330
--------------
28,126,370
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.7%
Avid Technology, Inc. 1,2 7,600 268,660
- --------------------------------------------------------------------------------
Brocade Communications Systems,
Inc. 1 55,700 435,574
- --------------------------------------------------------------------------------
Data Domain, Inc. 1 7,650 175,950
- --------------------------------------------------------------------------------
Electronics for Imaging, Inc. 1,2 69,300 1,955,646
- --------------------------------------------------------------------------------
Emulex Corp. 1 61,300 1,338,792
- --------------------------------------------------------------------------------
Hutchinson Technology, Inc. 1,2 200 3,762
- --------------------------------------------------------------------------------
Hypercom Corp. 1,2 37,000 218,670
- --------------------------------------------------------------------------------
Immersion Corp. 1 1,200 17,976
- --------------------------------------------------------------------------------
Intevac, Inc. 1,2 15,100 321,026
- --------------------------------------------------------------------------------
Novatel Wireless, Inc. 1,2 22,300 580,246
- --------------------------------------------------------------------------------
Palm, Inc. 1,2 28,300 453,083
- --------------------------------------------------------------------------------
Stratasys, Inc. 1,2 6,300 295,974
- --------------------------------------------------------------------------------
Western Digital Corp. 1 33,700 652,095
--------------
6,717,454
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS--1.9%
Acacia Research Corp. 1,2 27,800 449,248
- --------------------------------------------------------------------------------
Aeroflex, Inc. 1 24,800 351,416
- --------------------------------------------------------------------------------
Agilysys, Inc. 2 19,500 438,750
- --------------------------------------------------------------------------------
Arrow Electronics, Inc. 1 25,300 972,279
- --------------------------------------------------------------------------------
AuthenTec, Inc. 1 27,800 287,730
- --------------------------------------------------------------------------------
Avnet, Inc. 1 30,200 1,197,128
- --------------------------------------------------------------------------------
AVX Corp. 2 22,300 373,302
- --------------------------------------------------------------------------------
Bel Fuse, Inc., Cl. A 4,800 177,504
- --------------------------------------------------------------------------------
Checkpoint Systems, Inc. 1 19,600 494,900
- --------------------------------------------------------------------------------
Cognex Corp. 2 28,700 646,037
- --------------------------------------------------------------------------------
CPI International, Inc. 1 6,400 126,912
- --------------------------------------------------------------------------------
CTS Corp. 2 20,600 260,796
- --------------------------------------------------------------------------------
Dolby Laboratories, Inc., Cl. A 1 6,100 216,001
- --------------------------------------------------------------------------------
Echelon Corp. 1,2 2,300 35,949
- --------------------------------------------------------------------------------
Excel Technology, Inc. 1 4,000 111,760
- --------------------------------------------------------------------------------
FARO Technologies, Inc. 1 9,500 302,670
- --------------------------------------------------------------------------------
FLIR Systems, Inc. 1,2 9,400 434,750
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS Continued
Insight Enterprises, Inc. 1 37,200 $ 839,604
- --------------------------------------------------------------------------------
Littlefuse, Inc. 1 52,700 1,779,679
- --------------------------------------------------------------------------------
LoJack Corp. 1 10,700 238,503
- --------------------------------------------------------------------------------
Methode Electronics, Inc., Cl. A 25,300 395,945
- --------------------------------------------------------------------------------
Mettler-Toledo International, Inc. 1 11,100 1,060,161
- --------------------------------------------------------------------------------
MTS Systems Corp. 2 10,400 464,568
- --------------------------------------------------------------------------------
National Instruments Corp. 9,300 302,901
- --------------------------------------------------------------------------------
OYO Geospace Corp. 1,2 2,800 207,732
- --------------------------------------------------------------------------------
Park Electrochemical Corp. 2 14,400 405,792
- --------------------------------------------------------------------------------
PC Connection, Inc. 1,2 13,500 178,740
- --------------------------------------------------------------------------------
Rofin-Sinar Technologies, Inc. 1,2 36,600 2,525,400
- --------------------------------------------------------------------------------
Rogers Corp. 1,2 600 22,200
- --------------------------------------------------------------------------------
Smart Modular Technologies, Inc. 1 13,800 189,888
- --------------------------------------------------------------------------------
SYNNEX Corp. 1,2 3,700 76,257
- --------------------------------------------------------------------------------
Technitrol, Inc. 21,700 622,139
- --------------------------------------------------------------------------------
Tektronix, Inc. 5,000 168,700
- --------------------------------------------------------------------------------
Vishay Intertechnology, Inc. 1 14,000 221,480
- --------------------------------------------------------------------------------
X-Rite, Inc. 800 11,816
- --------------------------------------------------------------------------------
Zygo Corp. 1,2 8,400 120,036
--------------
16,708,673
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--1.8%
AsiaInfo Holdings, Inc. 1,2 26,800 259,960
- --------------------------------------------------------------------------------
Chordiant Software, Inc. 1 24,600 385,236
- --------------------------------------------------------------------------------
CMGI, Inc. 1,2 789,100 1,538,745
- --------------------------------------------------------------------------------
comScore, Inc. 1 4,900 113,435
- --------------------------------------------------------------------------------
DealerTrack Holdings, Inc. 1 15,100 556,284
- --------------------------------------------------------------------------------
EarthLink, Inc. 1,2 24,400 182,268
- --------------------------------------------------------------------------------
Greenfield Online, Inc. 1 2,800 44,548
- --------------------------------------------------------------------------------
iBasis, Inc. 1 1,600 16,080
- --------------------------------------------------------------------------------
Imergent, Inc. 2 9,500 232,370
- --------------------------------------------------------------------------------
Internet Capital Group, Inc. 1,2 4,100 50,840
- --------------------------------------------------------------------------------
Interwoven, Inc. 1 28,300 397,332
- --------------------------------------------------------------------------------
j2 Global Communications, Inc. 1,2 73,400 2,561,660
- --------------------------------------------------------------------------------
Limelight Networks, Inc. 1,2 22,510 445,248
- --------------------------------------------------------------------------------
Open Text Corp. 1,2 73,000 1,588,480
- --------------------------------------------------------------------------------
S1 Corp. 1 48,400 386,716
- --------------------------------------------------------------------------------
Savvis, Inc. 1,2 11,246 556,789
- --------------------------------------------------------------------------------
SonicWALL, Inc. 1 34,500 296,355
- --------------------------------------------------------------------------------
TechTarget, Inc. 1 7,690 98,817
- --------------------------------------------------------------------------------
TheStreet.com, Inc. 2 20,500 223,040
- --------------------------------------------------------------------------------
Travelzoo, Inc. 1,2 4,800 127,632
- --------------------------------------------------------------------------------
United Online, Inc. 159,200 2,625,208
- --------------------------------------------------------------------------------
ValueClick, Inc. 1 42,600 1,254,996
- --------------------------------------------------------------------------------
VeriSign, Inc. 1 43,400 1,377,082
17 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES Continued
Vignette Corp. 1 21,800 $ 417,688
- --------------------------------------------------------------------------------
Websense, Inc. 1,2 32,600 692,750
--------------
16,429,559
- --------------------------------------------------------------------------------
IT SERVICES--2.6%
Acxiom Corp. 30,000 793,500
- --------------------------------------------------------------------------------
Alliance Data Systems Corp. 1 11,100 857,808
- --------------------------------------------------------------------------------
Authorize.Net Holdings, Inc. 1,2 29,000 518,810
- --------------------------------------------------------------------------------
BISYS Group, Inc. (The) 1 163,500 1,934,205
- --------------------------------------------------------------------------------
Broadridge Financial Solutions LLC 34,700 663,464
- --------------------------------------------------------------------------------
Ceridian Corp. 1 5,800 203,000
- --------------------------------------------------------------------------------
CIBER, Inc. 1,2 41,500 339,470
- --------------------------------------------------------------------------------
Computer Sciences Corp. 1 26,500 1,567,475
- --------------------------------------------------------------------------------
Convergys Corp. 1 43,200 1,047,168
- --------------------------------------------------------------------------------
Covansys Corp. 1 59,100 2,005,263
- --------------------------------------------------------------------------------
CSG Systems International, Inc. 1 96,500 2,558,215
- --------------------------------------------------------------------------------
eFunds Corp. 1,2 9,000 317,610
- --------------------------------------------------------------------------------
EnerNOC, Inc. 1 2,700 102,951
- --------------------------------------------------------------------------------
Fiserv, Inc. 1 29,900 1,698,320
- --------------------------------------------------------------------------------
Forrester Research, Inc. 1,2 11,200 315,056
- --------------------------------------------------------------------------------
Gartner, Inc., Cl. A 1 20,100 494,259
- --------------------------------------------------------------------------------
infoUSA, Inc. 2 2,200 22,484
- --------------------------------------------------------------------------------
ManTech International Corp. 1 46,200 1,424,346
- --------------------------------------------------------------------------------
MPS Group, Inc. 1 113,600 1,518,832
- --------------------------------------------------------------------------------
NCI, Inc., Cl. A 1,2 12,300 206,271
- --------------------------------------------------------------------------------
Perot Systems Corp., Cl. A 1 88,300 1,504,632
- --------------------------------------------------------------------------------
PROS Holdings, Inc. 34,900 457,190
- --------------------------------------------------------------------------------
Safeguard Scientifics, Inc. 1,2 50,200 141,062
- --------------------------------------------------------------------------------
SAIC, Inc. 1,2 29,000 524,030
- --------------------------------------------------------------------------------
Sapient Corp. 1,2 23,400 180,882
- --------------------------------------------------------------------------------
Sykes Enterprises, Inc. 1 23,300 442,467
- --------------------------------------------------------------------------------
Syntel, Inc. 2 24,600 747,594
- --------------------------------------------------------------------------------
TNS, Inc. 400 5,764
- --------------------------------------------------------------------------------
Total System Services, Inc. 2 23,700 699,387
- --------------------------------------------------------------------------------
Wright Express Corp. 1,2 10,000 342,700
--------------
23,634,215
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--5.0%
Actel Corp. 1,2 17,200 239,252
- --------------------------------------------------------------------------------
Advanced Energy Industries, Inc. 1 102,100 2,313,586
- --------------------------------------------------------------------------------
AMIS Holdings, Inc. 1,2 112,600 1,409,752
- --------------------------------------------------------------------------------
Amkor Technology, Inc. 1,2 125,200 1,971,900
- --------------------------------------------------------------------------------
Asyst Technologies, Inc. 1,2 26,300 190,149
- --------------------------------------------------------------------------------
Atheros Communications, Inc. 1,2 80,100 2,470,284
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT Continued
ATMI, Inc. 1,2 57,900 $ 1,737,000
- --------------------------------------------------------------------------------
Axcelis Technologies, Inc. 1,2 56,100 364,089
- --------------------------------------------------------------------------------
Brooks Automation, Inc. 1,2 124,500 2,259,675
- --------------------------------------------------------------------------------
Cabot Microelectronics Corp. 1,2 5,000 177,450
- --------------------------------------------------------------------------------
Cohu, Inc. 1,200 26,700
- --------------------------------------------------------------------------------
Credence Systems Corp. 1,2 26,300 94,680
- --------------------------------------------------------------------------------
Cymer, Inc. 1,2 62,200 2,500,440
- --------------------------------------------------------------------------------
Entegris, Inc. 1,2 116,600 1,385,208
- --------------------------------------------------------------------------------
Exar Corp. 1 24,900 333,660
- --------------------------------------------------------------------------------
Fairchild Semiconductor International,
Inc., Cl. A 1 46,800 904,176
- --------------------------------------------------------------------------------
FEI Co. 1,2 71,000 2,304,660
- --------------------------------------------------------------------------------
Hittite Microwave Corp. 1,2 20,200 863,146
- --------------------------------------------------------------------------------
Intersil Corp., Cl. A 8,900 279,994
- --------------------------------------------------------------------------------
KLA-Tencor Corp. 8,200 450,590
- --------------------------------------------------------------------------------
Kulicke & Soffa Industries, Inc. 1,2 47,600 498,372
- --------------------------------------------------------------------------------
Lam Research Corp. 1 20,600 1,058,840
- --------------------------------------------------------------------------------
LTX Corp. 1,2 26,000 144,560
- --------------------------------------------------------------------------------
Mattson Technology, Inc. 1,2 6,800 65,960
- --------------------------------------------------------------------------------
Micrel, Inc. 196,000 2,493,120
- --------------------------------------------------------------------------------
Microchip Technology, Inc. 2,200 81,488
- --------------------------------------------------------------------------------
MKS Instruments, Inc. 1 94,500 2,617,650
- --------------------------------------------------------------------------------
Monolithic Power Systems, Inc. 1,2 3,400 59,330
- --------------------------------------------------------------------------------
National Semiconductor Corp. 52,000 1,470,040
- --------------------------------------------------------------------------------
Netlogic Microsystems, Inc. 1,2 9,100 289,744
- --------------------------------------------------------------------------------
Novellus Systems, Inc. 1 33,000 936,210
- --------------------------------------------------------------------------------
ON Semiconductor Corp. 1 107,300 1,150,256
- --------------------------------------------------------------------------------
Redcorp Ventures Ltd. 1, 3 666,400 290,895
- --------------------------------------------------------------------------------
RF Micro Devices, Inc. 1,2 61,500 383,760
- --------------------------------------------------------------------------------
Rudolph Technologies, Inc. 1 1,200 19,932
- --------------------------------------------------------------------------------
Semtech Corp. 1,2 55,000 953,150
- --------------------------------------------------------------------------------
Silicon Storage Technology, Inc. 1,2 71,200 265,576
- --------------------------------------------------------------------------------
SiRF Technology Holdings, Inc. 1,2 15,400 319,396
- --------------------------------------------------------------------------------
Supertex, Inc. 1,2 7,200 225,648
- --------------------------------------------------------------------------------
Teradyne, Inc. 1 54,400 956,352
- --------------------------------------------------------------------------------
Tessera Technologies, Inc. 1 49,800 2,019,390
- --------------------------------------------------------------------------------
TriQuint Semiconductor, Inc. 1 37,100 187,726
- --------------------------------------------------------------------------------
Varian Semiconductor Equipment
Associates, Inc. 1,2 31,950 1,279,917
- --------------------------------------------------------------------------------
Verigy Ltd. 1 77,300 2,211,553
- --------------------------------------------------------------------------------
Xilinx, Inc. 41,100 1,100,247
- --------------------------------------------------------------------------------
Zoran Corp. 1 61,000 1,222,440
--------------
44,577,943
18 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SOFTWARE--3.7%
Actuate Corp. 1,2 64,500 $ 437,955
- --------------------------------------------------------------------------------
Advent Software, Inc. 1,2 9,400 305,970
- --------------------------------------------------------------------------------
Ansoft Corp. 1,2 19,900 586,851
- --------------------------------------------------------------------------------
Aspen Technology, Inc. 1,2 115,700 1,619,800
- --------------------------------------------------------------------------------
Blackbaud, Inc. 57,989 1,280,397
- --------------------------------------------------------------------------------
Blackboard, Inc. 1,2 4,500 189,540
- --------------------------------------------------------------------------------
BMC Software, Inc. 1 43,600 1,321,080
- --------------------------------------------------------------------------------
Cadence Design Systems, Inc. 1 59,400 1,304,424
- --------------------------------------------------------------------------------
Cognos, Inc. 1,2 17,400 690,258
- --------------------------------------------------------------------------------
Compuware Corp. 1 112,600 1,335,436
- --------------------------------------------------------------------------------
Comverge, Inc. 1 1,430 44,344
- --------------------------------------------------------------------------------
Epicor Software Corp. 1,2 51,700 768,779
- --------------------------------------------------------------------------------
EPIQ Systems, Inc. 1,2 27,900 450,864
- --------------------------------------------------------------------------------
Fair Isaac Corp. 29,400 1,179,528
- --------------------------------------------------------------------------------
FalconStor Software, Inc. 1,2 31,000 327,050
- --------------------------------------------------------------------------------
Henry (Jack) & Associates, Inc. 56,100 1,444,575
- --------------------------------------------------------------------------------
i2 Technoloogies, Inc. 1,2 9,400 175,216
- --------------------------------------------------------------------------------
Interactive Intelligence, Inc. 1 1,500 30,900
- --------------------------------------------------------------------------------
Magma Design Automation, Inc. 1,2 28,700 402,948
- --------------------------------------------------------------------------------
Manhattan Associates, Inc. 1 34,400 960,104
- --------------------------------------------------------------------------------
McAfee, Inc. 1 40,000 1,408,000
- --------------------------------------------------------------------------------
Mentor Graphics Corp. 1 147,800 1,946,526
- --------------------------------------------------------------------------------
MICROS Systems, Inc. 1,2 17,800 968,320
- --------------------------------------------------------------------------------
MicroStrategy, Inc., Cl. A 1,2 21,200 2,003,188
- --------------------------------------------------------------------------------
OPNET Technologies, Inc. 1 1,000 11,510
- --------------------------------------------------------------------------------
Parametric Technology Corp. 1 86,700 1,873,587
- --------------------------------------------------------------------------------
Quality Systems, Inc. 2 20,200 766,994
- --------------------------------------------------------------------------------
Quest Software, Inc. 1 64,800 1,049,112
- --------------------------------------------------------------------------------
Radiant Systems, Inc. 1,2 7,700 101,948
- --------------------------------------------------------------------------------
Secure Computing Corp. 1,2 33,100 251,229
- --------------------------------------------------------------------------------
SPSS, Inc. 1,2 23,700 1,046,118
- --------------------------------------------------------------------------------
Sybase, Inc. 1 41,100 981,879
- --------------------------------------------------------------------------------
Synopsys, Inc. 1 42,100 1,112,703
- --------------------------------------------------------------------------------
The9 Ltd., ADR 1 26,100 1,207,386
- --------------------------------------------------------------------------------
TIBCO Software, Inc. 1 319,200 2,888,760
- --------------------------------------------------------------------------------
Tyler Technologies, Inc. 1,2 20,100 249,441
- --------------------------------------------------------------------------------
Wind River Systems, Inc. 1,2 31,800 349,800
--------------
33,072,520
- --------------------------------------------------------------------------------
MATERIALS--7.2%
- --------------------------------------------------------------------------------
CHEMICALS--3.4%
Albemarle Corp. 23,600 909,308
- --------------------------------------------------------------------------------
Cabot Corp. 22,200 1,058,496
- --------------------------------------------------------------------------------
Calgon Carbon Corp. 1,2 32,200 373,520
- --------------------------------------------------------------------------------
Celanese Corp., Series A 23,300 903,574
- --------------------------------------------------------------------------------
CF Industries Holdings, Inc. 37,200 2,227,908
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
CHEMICALS Continued
Ferro Corp. 62,100 $ 1,548,153
- --------------------------------------------------------------------------------
Fuller (H.B.) Co. 41,100 1,228,479
- --------------------------------------------------------------------------------
Hercules, Inc. 1 113,200 2,224,380
- --------------------------------------------------------------------------------
Innophos Holdings, Inc. 2 16,200 231,660
- --------------------------------------------------------------------------------
Innospec, Inc. 2 5,800 343,418
- --------------------------------------------------------------------------------
International Flavors & Fragrances, Inc. 7,400 385,836
- --------------------------------------------------------------------------------
Koppers Holdings, Inc. 14,200 478,256
- --------------------------------------------------------------------------------
Landec Corp. 1,2 15,100 202,340
- --------------------------------------------------------------------------------
LSB Industries, Inc. 1,2 6,300 134,694
- --------------------------------------------------------------------------------
Lubrizol Corp. (The) 19,300 1,245,815
- --------------------------------------------------------------------------------
Lyondell Chemical Co. 35,500 1,317,760
- --------------------------------------------------------------------------------
Minerals Technologies, Inc. 9,800 656,110
- --------------------------------------------------------------------------------
Nalco Holding Co. 39,000 1,070,550
- --------------------------------------------------------------------------------
NewMarket Corp. 7,200 348,264
- --------------------------------------------------------------------------------
Olin Corp. 33,700 707,700
- --------------------------------------------------------------------------------
OM Group, Inc. 1 6,200 328,104
- --------------------------------------------------------------------------------
Pioneer Cos., Inc. 1 11,100 381,507
- --------------------------------------------------------------------------------
PolyOne Corp. 1,2 51,000 366,690
- --------------------------------------------------------------------------------
Rockwood Holdings, Inc. 1 44,800 1,637,440
- --------------------------------------------------------------------------------
Schulman (A.), Inc. 2 3,800 92,454
- --------------------------------------------------------------------------------
Sensient Technologies Corp. 97,900 2,485,681
- --------------------------------------------------------------------------------
Spartech Corp. 74,900 1,988,595
- --------------------------------------------------------------------------------
Stepan Co. 2 3,900 118,092
- --------------------------------------------------------------------------------
Terra Industries, Inc. 1,2 79,000 2,008,180
- --------------------------------------------------------------------------------
Tronox, Inc., Cl. A 2 20,600 296,228
- --------------------------------------------------------------------------------
Tronox, Inc., Cl. B 3,400 47,770
- --------------------------------------------------------------------------------
Valhi, Inc. 2 19,300 314,590
- --------------------------------------------------------------------------------
Valspar Corp. (The) 27,400 778,434
- --------------------------------------------------------------------------------
W.R. Grace & Co. 1,2 101,600 2,488,184
--------------
30,928,170
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--1.0%
AEP Industries, Inc. 1 5,500 247,555
- --------------------------------------------------------------------------------
AptarGroup, Inc. 2 25,800 917,448
- --------------------------------------------------------------------------------
Crown Holdings, Inc. 1 14,900 372,053
- --------------------------------------------------------------------------------
Greif, Inc., Cl. A 2 2,700 160,947
- --------------------------------------------------------------------------------
Myers Industries, Inc. 2 20,600 455,466
- --------------------------------------------------------------------------------
Owens-Illinois, Inc. 1 2,200 77,000
- --------------------------------------------------------------------------------
Packaging Corp. of America 27,100 685,901
- --------------------------------------------------------------------------------
Pactiv Corp. 1 36,600 1,167,174
- --------------------------------------------------------------------------------
Rock-Tenn Co., Cl. A 75,100 2,382,172
- --------------------------------------------------------------------------------
Silgan Holdings, Inc. 18,400 1,017,152
- --------------------------------------------------------------------------------
Sonoco Products Co. 24,700 1,057,407
--------------
8,540,275
19 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
METALS & MINING--2.5%
A. M. Castle & Co. 2 4,900 $ 175,959
- --------------------------------------------------------------------------------
AK Steel Holding Corp. 1,2 17,200 642,764
- --------------------------------------------------------------------------------
Amerigo Resources Ltd. 66,000 172,241
- --------------------------------------------------------------------------------
Brush Engineered Materials, Inc. 1,2 18,200 764,218
- --------------------------------------------------------------------------------
Century Aluminum Co. 1,2 51,300 2,802,519
- --------------------------------------------------------------------------------
Chaparral Steel Co. 18,800 1,351,156
- --------------------------------------------------------------------------------
Cleveland-Cliffs, Inc. 2 22,100 1,716,507
- --------------------------------------------------------------------------------
Compass Minerals International, Inc. 57,700 1,999,882
- --------------------------------------------------------------------------------
Farallon Resources Ltd. 1 156,700 113,268
- --------------------------------------------------------------------------------
FNX Mining Co., Inc. 1 1,098 33,417
- --------------------------------------------------------------------------------
Haynes International, Inc. 1,200 101,316
- --------------------------------------------------------------------------------
Hecla Mining Co. 1 235,800 2,013,732
- --------------------------------------------------------------------------------
Inmet Mining Corp. 1,500 116,029
- --------------------------------------------------------------------------------
Meridian Gold, Inc. 1 900 24,628
- --------------------------------------------------------------------------------
Metal Management, Inc. 56,300 2,481,141
- --------------------------------------------------------------------------------
Pearl Exploration & Production Ltd. 1 6,146 29,252
- --------------------------------------------------------------------------------
Quanex Corp. 44,923 2,187,750
- --------------------------------------------------------------------------------
Schnitzer Steel Industries, Inc. 2 50,800 2,435,352
- --------------------------------------------------------------------------------
Steel Dynamics, Inc. 27,900 1,169,289
- --------------------------------------------------------------------------------
Universal Stainless & Alloy Products,
Inc. 1,2 3,400 119,782
- --------------------------------------------------------------------------------
Worthington Industries, Inc. 2 101,400 2,195,310
--------------
22,645,512
- --------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.3%
Bowater, Inc. 2 47,400 1,182,630
- --------------------------------------------------------------------------------
Buckeye Technologies, Inc. 1 30,900 478,023
- --------------------------------------------------------------------------------
Mercer International, Inc. 1,2 17,400 177,480
- --------------------------------------------------------------------------------
Neenah Paper, Inc. 2 11,100 457,986
- --------------------------------------------------------------------------------
Schweitzer-Mauduit International, Inc. 2 11,900 368,900
--------------
2,665,019
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.1%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.8%
Alaska Communications Systems
Group, Inc. 2 29,700 470,448
- --------------------------------------------------------------------------------
Atlantic Tele-Network, Inc. 4,500 128,880
- --------------------------------------------------------------------------------
Cbeyond, Inc. 1,2 50,200 1,933,202
- --------------------------------------------------------------------------------
CenturyTel, Inc. 27,900 1,368,495
- --------------------------------------------------------------------------------
Cincinnati Bell, Inc. 1 512,400 2,961,672
- --------------------------------------------------------------------------------
Citizens Communications Co. 76,591 1,169,545
- --------------------------------------------------------------------------------
Cogent Communications Group, Inc. 1,2 85,400 2,550,898
- --------------------------------------------------------------------------------
Consolidated Communications
Holdings, Inc. 2 17,470 394,822
- --------------------------------------------------------------------------------
CT Communications, Inc. 2 15,500 472,905
- --------------------------------------------------------------------------------
Embarq Corp. 27,000 1,710,990
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES Continued
General Communication, Inc., Cl. A 1,2 25,900 $ 331,779
- --------------------------------------------------------------------------------
Golden Telecom, Inc. 2 2,200 121,022
- --------------------------------------------------------------------------------
Iowa Telecommunications Services,
Inc. 2 20,400 463,692
- --------------------------------------------------------------------------------
North Pittsburgh Systems, Inc. 2 1,500 31,875
- --------------------------------------------------------------------------------
NTELOS Holdings Corp. 8,400 232,176
- --------------------------------------------------------------------------------
PAETEC Holding Corp. 1,2 40,000 451,600
- --------------------------------------------------------------------------------
Premiere Global Services, Inc. 1 96,100 1,251,222
--------------
16,045,223
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.3%
Cellcom Israel Ltd. 2 23,080 610,928
- --------------------------------------------------------------------------------
Dobson Communications Corp., Cl. A 1,2 45,400 504,394
- --------------------------------------------------------------------------------
InPhonic, Inc. 1,2 3,800 17,708
- --------------------------------------------------------------------------------
Rural Cellular Corp., Cl. A 1 1,800 78,858
- --------------------------------------------------------------------------------
Telephone & Data Systems, Inc. 23,000 1,439,110
- --------------------------------------------------------------------------------
USA Mobility, Inc. 2 18,800 503,088
--------------
3,154,086
- --------------------------------------------------------------------------------
UTILITIES--3.3%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.9%
ALLETE, Inc. 2 14,900 701,045
- --------------------------------------------------------------------------------
Central Vermont Public Service Corp. 3,800 143,184
- --------------------------------------------------------------------------------
El Paso Electric Co. 1 83,200 2,043,392
- --------------------------------------------------------------------------------
IDACORP, Inc. 2 29,200 935,568
- --------------------------------------------------------------------------------
Otter Tail Corp. 2 21,500 689,505
- --------------------------------------------------------------------------------
Portland General Electric Co. 11,100 304,584
- --------------------------------------------------------------------------------
UIL Holdings Corp. 2 3,366 111,415
- --------------------------------------------------------------------------------
UniSource Energy Corp. 69,800 2,295,722
- --------------------------------------------------------------------------------
Westar Energy, Inc. 26,200 636,136
--------------
7,860,551
- --------------------------------------------------------------------------------
ENERGY TRADERS--0.2%
Canadian Hydro Developers, Inc. 1 14,000 81,352
- --------------------------------------------------------------------------------
Mirant Corp. 1 8,300 353,995
- --------------------------------------------------------------------------------
NRG Energy, Inc. 1,2 39,700 1,650,329
--------------
2,085,676
- --------------------------------------------------------------------------------
GAS UTILITIES--1.4%
Atmos Energy Corp. 32,200 967,932
- --------------------------------------------------------------------------------
Cascade Natural Gas Corp. 2 1,200 31,692
- --------------------------------------------------------------------------------
New Jersey Resources Corp. 2 43,100 2,198,962
- --------------------------------------------------------------------------------
Nicor, Inc. 2 25,500 1,094,460
- --------------------------------------------------------------------------------
Northwest Natural Gas Co. 2 33,300 1,538,127
- --------------------------------------------------------------------------------
ONEOK, Inc. 27,500 1,386,275
- --------------------------------------------------------------------------------
South Jersey Industries, Inc. 24,100 852,658
- --------------------------------------------------------------------------------
Southwest Gas Corp. 51,100 1,727,691
20 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
GAS UTILITIES Continued
UGI Corp. 26,700 $ 728,376
- --------------------------------------------------------------------------------
WGL Holdings, Inc. 59,400 1,938,816
--------------
12,464,989
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.8%
Avista Corp. 2 80,200 1,728,310
- --------------------------------------------------------------------------------
Black Hills Corp. 2 52,200 2,074,950
- --------------------------------------------------------------------------------
CenterPoint Energy, Inc. 70,700 1,230,180
- --------------------------------------------------------------------------------
CH Energy Group, Inc. 2 3,000 134,910
- --------------------------------------------------------------------------------
DTE Energy Co. 6,300 303,786
- --------------------------------------------------------------------------------
Energy East Corp. 10,100 263,509
- --------------------------------------------------------------------------------
NiSource, Inc. 50,400 1,043,784
- --------------------------------------------------------------------------------
PNM Resources, Inc. 8,500 236,215
- --------------------------------------------------------------------------------
Vectren Corp. 13,600 366,246
--------------
7,381,890
--------------
Total Common Stocks (Cost $768,087,750) 892,421,221
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.0%
- --------------------------------------------------------------------------------
Simon Property Group, Inc., 6% Cv.,
Non-Vtg. (Cost $3,213) 60 4,559
UNITS
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
Redcorp Ventures Ltd. Wts., Exp. 7/5/09 1,4
(Cost $0) 333,200 11,386
SHARES
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--1.2%
- --------------------------------------------------------------------------------
Oppenheimer Institutional Money
Market Fund, Cl. E, 5.28% 5, 6
(Cost $10,596,740) 10,596,740 10,596,740
- --------------------------------------------------------------------------------
Total Investments, at Value (excluding
Investments Purchased with Cash
Collateral from Securities Loaned)
(Cost $778,687,703) 903,033,906
PRINCIPAL
AMOUNT
- --------------------------------------------------------------------------------
INVESTMENTS PURCHASED WITH CASH COLLATERAL FROM SECURITIES
LOANED--24.2% 7
- --------------------------------------------------------------------------------
ASSET BACKED FLOATING NOTE--0.8%
Citigroup Mortgage Loan Trust, Inc.,
Series 2006-HE1, Cl. A1, 5.38%,
7/25/07 $ 689,541 689,541
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Series 2005-17, Cl. 4AV1,
5.43%, 7/25/07 138,044 138,044
- --------------------------------------------------------------------------------
Countrywide Asset-Backed
Certificates, Series 2006-2, Cl. 2A1,
5.39%, 7/25/07 745,449 745,449
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
ASSET BACKED FLOATING NOTE Continued
GSAA Home Equity Trust,
Series 2005-15, Cl. 2A1, 5.41%,
7/25/07 $ 962,758 $ 962,758
- --------------------------------------------------------------------------------
Specialty Underwriting & Residential
Finance Trust, Series 2006 BC1,
Cl. A2A, 5.40%, 7/25/07 1,316,927 1,316,927
- --------------------------------------------------------------------------------
Structured Asset Investment Loan
Trust, Series 2005-11, Cl. A4,
5.41%, 7/25/07 625,640 625,640
- --------------------------------------------------------------------------------
Whitehawk CDO Funding Corp.,
5.41%, 9/17/07 2,250,000 2,250,000
--------------
6,728,359
- --------------------------------------------------------------------------------
BANK FLOATING RATE NOTE--0.7%
Wachovia Bank NA, 5.36%, 7/2/07 6,000,000 6,000,000
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--8.3%
Undivided interest of 1% in joint repurchase agreement
(Principal Amount/Value $3,500,000,000, with a maturity
value of $3,501,573,542) with Bank of America NA, 5.395%,
dated 6/29/07, to be repurchased at $34,851,711 on
7/2/07, collateralized by U.S. Agency Mortgages,
5%-5.50%, 8/1/33-3/1/35, with a value of
$3,570,000,000 34,836,049 34,836,049
- --------------------------------------------------------------------------------
Undivided interest of 1.33% in joint repurchase
agreement (Principal Amount/Value $750,000,000,
with a maturity value of $750,338,438) with
Barclays Capital, 5.415%, dated 6/29/07, to
be repurchased at $10,004,513 on 7/2/07,
collateralized by Private Label CMOs,
0%, 11/12/16-2/25/48, with a value of
$787,500,000 10,000,000 10,000,000
- --------------------------------------------------------------------------------
Undivided interest of 6% in joint repurchase agreement
(Principal Amount/Value $500,000,000, with a maturity
value of $500,225,625) with Barclays Capital, 5.415%,
dated 6/29/07, to be repurchased at $30,013,538
on 7/2/07, collateralized by Private Label CMOs,
0%, 5/27/35-2/25/48, with a value of
$525,000,000 30,000,000 30,000,000
--------------
74,836,049
- --------------------------------------------------------------------------------
MASTER FLOATING NOTE--0.3%
CDC Financial Products, Inc., 5.43%,
7/2/07 3,000,000 3,000,000
- --------------------------------------------------------------------------------
MEDIUM-TERM FLOATING NOTE--13.7%
American Express Credit Corp.,
5.33%, 7/16/07 4,000,000 4,000,000
- --------------------------------------------------------------------------------
American General Finance Corp.,
5.35%, 7/9/07 6,502,124 6,502,124
- --------------------------------------------------------------------------------
American Honda Finance Corp.,
5.37%, 9/10/07 6,505,437 6,505,437
- --------------------------------------------------------------------------------
ANZ National (Int'l) Ltd., 5.37%,
7/2/07 7,996,323 7,996,323
- --------------------------------------------------------------------------------
Bear Stearns, 5.37%, 7/2/07 5,000,000 5,000,000
21 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------
MEDIUM-TERM FLOATING NOTE Continued
Beta Finance, Inc., 5.37%, 7/2/07 $ 2,999,674 $ 2,999,674
- --------------------------------------------------------------------------------
Beta Finance, Inc., 5.39%, 7/2/07 4,996,860 4,996,860
- --------------------------------------------------------------------------------
Caixa Catal, 5.39%, 9/7/07 8,000,000 8,000,000
- --------------------------------------------------------------------------------
CAM US Finance SA Unipersonal,
5.41%, 8/1/07 6,000,000 6,000,000
- --------------------------------------------------------------------------------
CC USA, Inc., 5.37%, 7/2/07 3,000,000 3,000,000
- --------------------------------------------------------------------------------
CC USA, Inc., 5.37%, 7/2/07 1,000,000 1,000,000
- --------------------------------------------------------------------------------
CC USA, Inc., 5.39%, 7/2/07 4,497,179 4,497,179
- --------------------------------------------------------------------------------
Citigroup Funding, Inc., 5.36%, 7/2/07 5,000,000 5,000,000
- --------------------------------------------------------------------------------
Dorada Finance, Inc., 5.37%, 7/2/07 7,500,000 7,500,000
- --------------------------------------------------------------------------------
Goldman Sachs Group, Inc., 5.54%,
7/2/07 7,000,000 7,000,000
- --------------------------------------------------------------------------------
HSBC Finance Corp., 5.33%, 7/6/07 2,000,000 2,000,000
- --------------------------------------------------------------------------------
K2 (USA) LLC, 5.37%, 7/2/07 5,996,400 5,996,400
- --------------------------------------------------------------------------------
K2 (USA) LLC, 5.39%, 7/2/07 2,999,433 2,999,433
- --------------------------------------------------------------------------------
LINKS Finance LLC, 5.37%, 7/2/07 3,000,217 3,000,217
- --------------------------------------------------------------------------------
MBIA Global Funding LLC, 5.33%,
7/30/07 2,000,000 2,000,000
- --------------------------------------------------------------------------------
MBIA Global Funding LLC, 5.37%,
7/2/07 2,500,000 2,500,000
- --------------------------------------------------------------------------------
MBIA Global Funding LLC, 5.37%,
7/2/07 4,000,000 4,000,000
- --------------------------------------------------------------------------------
Metropolitan Life Global Funding,
5.31%, 7/23/07 7,250,000 7,250,000
- --------------------------------------------------------------------------------
Nationwide Global Fund I, 5.36%,
9/17/07 7,007,095 7,007,095
- --------------------------------------------------------------------------------
Sigma Finance, Inc., 5.37%, 7/2/07 3,000,000 3,000,000
- --------------------------------------------------------------------------------
Tango Finance Corp., 5.38%, 7/2/07 3,499,472 3,499,472
--------------
123,250,214
- --------------------------------------------------------------------------------
YANKEE FLOATING CERTIFICATE OF DEPOSIT--0.4%
Natexis Banques Populaires NY,
5.37%, 7/2/07 2,000,000 2,000,000
- --------------------------------------------------------------------------------
Natexis Banques Populaires NY, 5.39%,
7/2/07 1,999,854 1,999,854
--------------
3,999,854
--------------
Total Investments Purchased with
Cash Collateral from Securities Loaned
(Cost $217,814,476) 217,814,476
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $996,502,179) 124.4% 1,120,848,382
- --------------------------------------------------------------------------------
LIABILITIES IN EXCESS
OF OTHER ASSETS (24.4) (220,037,047)
----------------------------
NET ASSETS 100.0% $ 900,811,335
============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Partial or fully-loaned security. See Note 7 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 $629,068 or 0.07% of the Fund's net assets
as of June 30, 2007.
4. Illiquid or restricted security. The aggregate value of illiquid or
restricted securities as of June 30, 2007 was $50,977, which represents 0.01% of
the Fund's net assets, of which $39,591 is considered restricted. See Note 6 of
accompanying Notes.
5. Rate shown is the 7-day yield as of June 30, 2007.
6. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended June 30, 2007, by virtue of the Fund owning at least
5% of the voting securities of the issuer or as a result of the Fund and the
issuer having the same investment advisor. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- --------------------------------------------------------------------------------
Oppenheimer
Institutional
Money Market
Fund, Cl. E 7,142,041 123,408,214 119,953,515 10,596,740
VALUE DIVIDEND
SEE NOTE 1 INCOME
- --------------------------------------------------------------------------------
Oppenheimer
Institutional
Money Market
Fund, Cl.E $ 10,596,740 $ 179,695
7. The security/securities have 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.
22 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- -----------------------------------------------------------------------------------------------------------
ASSETS
- -----------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $985,905,439) $ 1,110,251,642
Affiliated companies (cost $10,596,740) 10,596,740
----------------
1,120,848,382
- -----------------------------------------------------------------------------------------------------------
Cash 330,994
- -----------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 6,997,933
Investments sold 1,465,877
Interest and dividends 843,370
Other 7,379
----------------
Total assets 1,130,493,935
- -----------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------
Return of collateral for securities loaned 217,814,476
- -----------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 9,485,471
Shares of beneficial interest redeemed 1,810,578
Distribution and service plan fees 475,101
Shareholder communications 67,652
Trustees' compensation 4,738
Transfer and shareholder servicing agent fees 2,025
Other 22,559
----------------
Total liabilities 229,682,600
- -----------------------------------------------------------------------------------------------------------
NET ASSETS $ 900,811,335
================
- -----------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- -----------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 44,812
- -----------------------------------------------------------------------------------------------------------
Additional paid-in capital 737,671,227
- -----------------------------------------------------------------------------------------------------------
Accumulated net investment income 2,815,076
- -----------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 35,935,589
- -----------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 124,344,631
----------------
NET ASSETS $ 900,811,335
================
- -----------------------------------------------------------------------------------------------------------
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 $101,753,550 and 5,024,200 shares of beneficial interest outstanding) $ 20.25
- -----------------------------------------------------------------------------------------------------------
Service Shares:
Net asset value, redemption price per share and offering price per share (based on net
assets of $799,057,785 and 39,787,897 shares of beneficial interest outstanding) $ 20.08
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, 2007
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $6,001) $ 5,967,510
Affiliated companies 179,695
- ----------------------------------------------------------------------------------------
Interest 13,009
- ----------------------------------------------------------------------------------------
Portfolio lending fees 351,636
-------------
Total investment income 6,511,850
- ----------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------
Management fees 2,824,716
- ----------------------------------------------------------------------------------------
Distribution and service plan fees--Service shares 890,612
- ----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Non-Service shares 5,025
Service shares 5,241
- ----------------------------------------------------------------------------------------
Shareholder communications:
Non-Service shares 10,185
Service shares 78,763
- ----------------------------------------------------------------------------------------
Trustees' compensation 8,354
- ----------------------------------------------------------------------------------------
Custodian fees and expenses 2,753
- ----------------------------------------------------------------------------------------
Administration service fees 750
- ----------------------------------------------------------------------------------------
Other 35,146
-------------
Total expenses 3,861,545
Less reduction to custodian expenses (1,881)
Less waivers and reimbursements of expenses (3,496)
-------------
Net expenses 3,856,168
- ----------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,655,682
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ----------------------------------------------------------------------------------------
Net realized gain on:
Investments 37,868,611
Foreign currency transactions 161,288
-------------
Net realized gain 38,029,899
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 33,824,145
Translation of assets and liabilities denominated in foreign currencies (9,286)
-------------
Net change in unrealized appreciation 33,814,859
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 74,500,440
=============
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, 2007 DECEMBER 31,
(UNAUDITED) 2006
- ------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
Net investment income $ 2,655,682 $ 1,411,195
- ------------------------------------------------------------------------------------------------------------------
Net realized gain 38,029,899 27,049,092
- ------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 33,814,859 41,212,121
-------------------------------
Net increase in net assets resulting from operations 74,500,440 69,672,408
- ------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Non-Service shares (284,891) (79,081)
Service shares (1,096,034) (90,296)
-------------------------------
(1,380,925) (169,377)
- ------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Non-Service shares (3,038,041) (1,560,912)
Service shares (23,704,364) (11,399,106)
-------------------------------
(26,742,405) (12,960,018)
- ------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Non-Service shares 15,162,997 29,898,135
Service shares 121,435,777 271,706,391
-------------------------------
136,598,774 301,604,526
- ------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------
Total increase 182,975,884 358,147,539
- ------------------------------------------------------------------------------------------------------------------
Beginning of period 717,835,451 359,687,912
-------------------------------
End of period (including accumulated net investment income of $2,815,076 and
$1,540,319, respectively) $ 900,811,335 $ 717,835,451
===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
NON-SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 19.15 $ 17.18 $ 16.05 $ 13.44 $ 9.31 $ 11.05
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .09 1 .08 1 .04 1 .01 1 (.03) (.01)
Net realized and unrealized gain (loss) 1.75 2.46 1.51 2.60 4.16 (1.73)
-----------------------------------------------------------------------------------
Total from investment operations 1.84 2.54 1.55 2.61 4.13 (1.74)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.06) (.03) -- -- -- --
Distributions from net realized gain (.68) (.54) (.42) -- -- --
-----------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.74) (.57) (.42) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.25 $ 19.15 $ 17.18 $ 16.05 $ 13.44 $ 9.31
===================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 9.92% 15.00% 9.92% 19.42% 44.36% (15.75)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 101,753 $ 81,405 $ 44,820 $ 38,636 $ 27,551 $ 19,577
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 93,136 $ 62,659 $ 39,708 $ 30,871 $ 20,271 $ 20,505
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 0.87% 0.46% 0.23% 0.06% (0.30)% (0.09)%
Total expenses 0.75% 4,5,6 0.77% 4,5 0.81% 6 0.83% 6 1.01% 6 1.00% 6
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 52% 110% 110% 147% 130% 121%
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 less than one full year.
4. Total Expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.75%
Year Ended December 31, 2006 0.77
5. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
6. Reduction to custodian expenses less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
SERVICE SHARES (UNAUDITED) 2006 2005 2004 2003 2002
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 18.98 $ 17.06 $ 15.97 $ 13.40 $ 9.29 $ 11.05
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .06 1 .04 1 -- 1,2 (.02) 1 (.02) (.01)
Net realized and unrealized gain (loss) 1.75 2.42 1.51 2.59 4.13 (1.75)
-------------------------------------------------------------------------------
Total from investment operations 1.81 2.46 1.51 2.57 4.11 (1.76)
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.03) -- 2 -- -- -- --
Distributions from net realized gain (.68) (.54) (.42) -- -- --
-------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.71) (.54) (.42) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 20.08 $ 18.98 $ 17.06 $ 15.97 $ 13.40 $ 9.29
===============================================================================
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 9.82% 14.66% 9.71% 19.18% 44.24% (15.93)%
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 799,058 $ 636,430 $ 314,868 $ 173,612 $ 62,660 $ 6,111
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 719,266 $ 479,456 $ 221,324 $ 112,279 $ 25,018 $ 2,228
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) 0.63% 0.23% 0.02% (0.14)% (0.43)% (0.26)%
Total expenses 0.99% 5 1.00% 5 1.04% 1.06% 1.23% 1.21%
Expenses after payments, waivers
and/or reimbursements and reduction
to custodian expenses 0.99% 1.00% 1.04% 1.06% 1.23% 1.19%
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 52% 110% 110% 147% 130% 121%
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 less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.99%
Year Ended December 31, 2006 1.00
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(R) 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. Options are
valued daily based upon the last sale price on the principal exchange on which
the option is traded. 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. Investments in
open-end registered investment companies (including affiliated funds) are valued
at that fund's net asset value. 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
28 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
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.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") which seeks current income and
stability of principal. IMMF is a registered open-end management investment
company, regulated as a money market fund under the Investment Company Act of
1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund.
During the fiscal year ended December 31, 2006, the Fund did not utilize
any capital loss carryforward.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a compensation
deferral 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 compensation deferral plan.
29 | OPPENHEIMER MAIN STREET SMALL CAP 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. 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.
- --------------------------------------------------------------------------------
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, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
NON-SERVICE SHARES
Sold 1,159,914 $ 22,975,437 2,252,265 $ 40,943,154
Dividends and/or distributions reinvested 177,034 3,322,932 91,722 1,639,993
Redeemed (564,726) (11,135,372) (700,330) (12,685,012)
----------------------------------------------------------
Net increase 772,222 $ 15,162,997 1,643,657 $ 29,898,135
==========================================================
- ----------------------------------------------------------------------------------------------------------
SERVICE SHARES
Sold 7,274,643 $ 142,535,050 17,621,426 $ 317,270,866
Dividends and/or distributions reinvested 1,328,184 24,744,065 639,766 11,362,246
Redeemed (2,344,523) (45,843,338) (3,189,608) (56,926,721)
----------------------------------------------------------
Net increase 6,258,304 $ 121,435,777 15,071,584 $ 271,706,391
==========================================================
30 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
June 30, 2007, were as follows:
PURCHASES SALES
-------------------------------------------------------
Investment securities $ 522,129,049 $ 416,634,166
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
-------------------------------
Up to $200 million 0.75%
Next $200 million 0.72
Next $200 million 0.69
Next $200 million 0.66
Over $800 million 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, 2007, the Fund paid
$10,008 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.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended June 30, 2007, the Manager waived $3,496 for
IMMF management fees.
- --------------------------------------------------------------------------------
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.
31 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued
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, 2007, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. ILLIQUID OR RESTRICTED SECURITIES
As of June 30, 2007, 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 DATE COST JUNE 30, 2007 APPRECIATION
- --------------------------------------------------------------------------------
Tusk Energy Corp. 11/15/04 $ 38,148 $ 39,591 $ 1,443
- --------------------------------------------------------------------------------
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, 2007, the Fund had
on loan securities valued at $212,943,265, which are included in the Statement
of Assets and Liabilities as "Investments, at value" and, when applicable, as
"Receivable for Investments sold." Collateral of $217,814,476 was received for
the loans, all of which was received in cash and subsequently invested in
approved investments.
32 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
- --------------------------------------------------------------------------------
8. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
33 | OPPENHEIMER MAIN STREET SMALL CAP FUND/VA
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF
INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in 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.
34 | OPPENHEIMER MAIN STREET SMALL CAP 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 06/30/2007, 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: 08/08/2007
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: 08/08/2007
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 08/08/2007