sai part 4
Appendix A
RATINGS DEFINITIONS
Below are summaries of the rating definitions used by the nationally-recognized
rating agencies listed below. Those ratings represent the opinion of the agency
as to the credit quality of issues that they rate. The summaries below are based
upon publicly available information provided by the rating organizations.
Moody's Investors Service, Inc. ("Moody's")
Long-Term Ratings: Bonds and Preferred Stock Issuer Ratings
Aaa: Bonds and preferred stock rated "Aaa" are judged to be the best quality.
They carry the smallest degree of investment risk. Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change, the changes
that can be expected are most unlikely to impair the fundamentally strong
position of such issues.
Aa: Bonds and preferred stock rated "Aa" are judged to be of high quality by all
standards. Together with the "Aaa" group, they comprise what are generally known
as high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as with "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than that of "Aaa"
securities.
A: Bonds and preferred stock rated "A" possess many favorable investment
attributes and are to be considered as upper-medium grade obligations. Factors
giving security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment some time in the
future.
Baa: Bonds and preferred stock rated "Baa" are considered medium-grade
obligations; that is, they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and have speculative characteristics as well.
Ba: Bonds and preferred stock rated "Ba" are judged to have speculative
elements. Their future cannot be considered well-assured. Often the protection
of interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B: Bonds and preferred stock rated "B" generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa: Bonds and preferred stock rated "Caa" are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.
Ca: Bonds and preferred stock rated "Ca" represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C: Bonds and preferred stock rated "C" are the lowest class of rated bonds and
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.
Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from "Aa" through "Caa." The modifier "1" indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
"2" indicates a mid-range ranking; and the modifier "3" indicates a ranking in
the lower end of that generic rating category. Advanced refunded issues that are
secured by certain assets are identified with a # symbol.
Prime Rating System (Short-Term Ratings - Taxable Debt) These ratings are
opinions of the ability of issuers to honor senior financial obligations and
contracts. Such obligations generally have an original maturity not exceeding
one year, unless explicitly noted.
Prime-1: Issuer has a superior ability for repayment of senior short-term debt
obligations.
Prime-2: Issuer has a strong ability for repayment of senior short-term debt
obligations. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.
Prime-3: Issuer has an acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market compositions may
be more pronounced. Variability in earnings and profitability may result in
changes in the level of debt protection measurements and may require relatively
high financial leverage. Adequate alternate liquidity is maintained.
Not Prime: Issuer does not fall within any Prime rating category.
Standard amp; Poor's Ratings Services ("Standard amp; Poor's"), a division of
The McGraw-Hill Companies, Inc.
Long-Term Issue Credit Ratings Issue credit ratings are based in varying
degrees, on the following considerations: o Likelihood of payment-capacity and
willingness of the obligor to meet its financial commitment on an obligation in
accordance with the terms of the obligation; o Nature of and provisions of the
obligation; and o Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization, or other arrangement
under the laws of bankruptcy and other laws affecting creditors' rights. The
issue ratings definitions are expressed in terms of default risk. As such, they
pertain to senior obligations of an entity. Junior obligations are typically
rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above.
AAA: An obligation rated "AAA" have the highest rating assigned by Standard amp;
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA: An obligation rated "AA" differ from the highest rated obligations only in
small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A: An obligation rated "A" are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB: An obligation rated "BBB" exhibit adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.
BB, B, CCC, CC, and C An obligation rated `BB', `B', `CCC', `CC', and `C' are
regarded as having significant speculative characteristics. `BB' indicates the
least degree of speculation and `C' the highest. While such obligations will
likely have some quality and protective characteristics, these may be outweighed
by large uncertainties or major exposures to adverse conditions.
BB: An obligation rated "BB" are less vulnerable to nonpayment than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.
B: An obligation rated "B" are more vulnerable to nonpayment than obligations
rated "BB", but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.
CCC: An obligation rated "CCC" are currently vulnerable to nonpayment, and are
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated "CC" are currently highly vulnerable to nonpayment.
C: Subordinated debt or preferred stock obligations rated "C" are currently
highly vulnerable to nonpayment. The "C" rating may be used to cover a situation
where a bankruptcy petition has been filed or similar action taken, but payments
on this obligation are being continued. A "C" also will be assigned to a
preferred stock issue in arrears on dividends or sinking fund payments, but that
is currently paying.
D: An obligation rated "D" are in payment default. The "D" rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard amp; Poor's believes
that such payments will be made during such grace period. The "D" rating also
will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.
The ratings from "AA" to "CCC" may be modified by the addition of a plus
(+) or minus (-) sign to show relative standing within the major rating
categories.
c: The `c' subscript is used to provide additional information to investors
that the bank may terminate its obligation to purchase tendered bonds if
the long-term credit rating of the issuer is below an investment-grade
level and/or the issuer's bonds are deemed taxable.
p: The letter `p' indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project financed by the
debt being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful, timely completion of the
project. This rating, however, while addressing credit quality subsequent
to completion of the project, makes no comment on the likelihood of or the
risk of default upon failure of such completion. The investor should
exercise his own judgment with respect to such likelihood and risk.
Continuance of the ratings is contingent upon Standard amp; Poor's receipt
of an executed copy of the escrow agreement or closing documentation
confirming investments and cash flows.
r: The `r' highlights derivative, hybrid, and certain other obligations
that Standard amp; Poor's believes may experience high volatility or high
variability in expected returns as a result of noncredit risks. Examples of
such obligations are securities with principal or interest return indexed
to equities, commodities, or currencies; certain swaps and options; and
interest-only and principal-only mortgage securities. The absence of an `r'
symbol should not be taken as an indication that an obligation will exhibit
no volatility or variability in total return.
N.R. Not rated.
Debt obligations of issuers outside the United States and its territories
are rated on the same basis as domestic corporate and municipal issues. The
ratings measure the creditworthiness of the obligor but do not take into
account currency exchange and related uncertainties.
Bond Investment Quality Standards
Under present commercial bank regulations issued by the Comptroller of the
Currency, bonds rated in the top four categories (`AAA', `AA', `A', `BBB',
commonly known as investment-grade ratings) generally are regarded as
eligible for bank investment. Also, the laws of various states governing
legal investments impose certain rating or other standards for obligations
eligible for investment by savings banks, trust companies, insurance
companies, and fiduciaries in general
Short-Term Issue Credit Ratings Short-term ratings are generally assigned
to those obligations considered short-term in the relevant market. In the
U.S., for example, that means obligations with an original maturity of no
more than 365 days-including commercial paper.
A-1: A short-term obligation rated "A-1" is rated in the highest category
by Standard amp; Poor's. The obligor's capacity to meet its financial
commitment on the obligation is strong. Within this category, certain
obligations are designated with a plus sign (+). This indicates that the
obligor's capacity to meet its financial commitment on these obligations is
extremely strong.
A-2: A short-term obligation rated "A-2" is somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions
than obligations in higher rating categories. However, the obligor's
capacity to meet its financial commitment on the obligation is
satisfactory.
A-3: A short-term obligation rated "A-3" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.
B: A short-term obligation rated "B" is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet
its financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation.
C: A short-term obligation rated "C" is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic
conditions for the obligor to meet its financial commitment on the
obligation.
D: A short-term obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation are not made on the date
due even if the applicable grace period has not expired, unless Standard
amp; Poor's believes that such payments will be made during such grace
period. The "D" rating also will be used upon the filing of a bankruptcy
petition or the taking of a similar action if payments on an obligation are
jeopardized.
Notes: A Standard amp; Poor's note rating reflects the liquidity factors
and market access risks unique to notes. Notes due in three years or less
will likely receive a note rating. Notes maturing beyond three years will
most likely receive a long-term debt rating. The following criteria will be
used in making that assessment: o Amortization schedule-the larger the
final maturity relative to other maturities, the more likely it will be
treated as a note; and o Source of payment-the more dependent the issue is
on the market for its refinancing, the more likely it will be treated as a
note.
SP-1: Strong capacity to pay principal and interest. An issue with a very
strong capacity to pay debt service is given a (+) designation.
SP-2: Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of
the notes.
SP-3: Speculative capacity to pay principal and interest.
Fitch, Inc. International credit ratings assess the capacity to meet
foreign currency or local currency commitments. Both "foreign currency" and
"local currency" ratings are internationally comparable assessments. The
local currency rating measures the probability of payment within the
relevant sovereign state's currency and jurisdiction and therefore, unlike
the foreign currency rating, does not take account of the possibility of
foreign exchange controls limiting transfer into foreign currency.
International Long-Term Credit Ratings The following ratings scale applies
to foreign currency and local currency ratings.
Investment Grade:
AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is
highly unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.
A: High Credit Quality. "A" ratings denote a low expectation of credit
risk. The capacity for timely payment of financial commitments is
considered strong. This capacity may, nevertheless, be more vulnerable to
changes in circumstances or in economic conditions than is the case for
higher ratings.
BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of
financial commitments is considered adequate, but adverse changes in
circumstances and in economic conditions are more likely to impair this
capacity. This is the lowest investment-grade category.
Speculative Grade:
BB: Speculative. "BB" ratings indicate that there is a possibility of
credit risk developing, particularly as the result of adverse economic
change over time. However, business or financial alternatives may be
available to allow financial commitments to be met. Securities rated
in this category are not investment grade.
B: Highly Speculative. "B" ratings indicate that significant credit
risk is present, but a limited margin of safety remains. Financial
commitments are currently being met. However, capacity for continued
payment is contingent upon a sustained, favorable business and
economic environment.
CCC, CC C: High Default Risk. Default is a real possibility. Capacity
for meeting financial commitments is solely reliant upon sustained,
favorable business or economic developments. A "CC" rating indicates
that default of some kind appears probable. "C" ratings signal
imminent default.
DDD, DD, and D: Default. The ratings of obligations in this category
are based on their prospects for achieving partial or full recovery in
a reorganization or liquidation of the obligor. While expected
recovery values are highly speculative and cannot be estimated with
any precision, the following serve as general guidelines. "DDD"
obligations have the highest potential for recovery, around 90%-100%
of outstanding amounts and accrued interest. "DD" indicates potential
recoveries in the range of 50%-90%, and "D" the lowest recovery
potential, i.e., below 50%.
Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for
resumption of performance or continued operation with or without a
formal reorganization process. Entities rated "DD" and "D" are
generally undergoing a formal reorganization or liquidation process;
those rated "DD" are likely to satisfy a higher portion of their
outstanding obligations, while entities rated "D" have a poor prospect
for repaying all obligations.
Plus (+) and minus (-) signs may be appended to a rating symbol to
denote relative status within the major rating categories. Plus and
minus signs are not added to the "AAA" category or to categories below
"CCC," nor to short-term ratings other than "F1" (see below).
International Short-Term Credit Ratings The following ratings scale
applies to foreign currency and local currency ratings. A short-term
rating has a time horizon of less than 12 months for most obligations,
or up to three years for U.S. public finance securities, and thus
places greater emphasis on the liquidity necessary to meet financial
commitments in a timely manner.
F1: Highest credit quality. Strongest capacity for timely payment of
financial commitments. May have an added "+" to denote any
exceptionally strong credit feature.
F2: Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in
the case of higher ratings.
F3: Fair credit quality. Capacity for timely payment of financial
commitments is adequate. However, near-term adverse changes could
result in a reduction to non-investment grade.
B: Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in
financial and economic conditions.
C: High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon a sustained,
favorable business and economic environment.
D: Default. Denotes actual or imminent payment default.
Dominion Bond Rating Service Limited ("DBRS")
R-1: Short term debt rated "R-1 (high)" is of the highest credit
quality, and indicates an entity which possesses unquestioned ability
to repay current liabilities as they fall due. Entities rated in this
category normally maintain strong liquidity positions, conservative
debt levels and profitability which is both stable and above average.
Companies achieving an "R-1 (high)" rating are normally leaders in
structurally sound industry segments with proven track records,
sustainable positive future results and no substantial qualifying
negative factors. Given the extremely tough definition which DBRS has
established for an "R-1 (high)", few entities are strong enough to
achieve this rating. Short term debt rated "R-1 (middle)" is of
superior credit quality and, in most cases, ratings in this category
differ from "R-1 (high)" credits to only a small degree. Given the
extremely tough definition which DBRS has for the "R-1 (high)"
category (which few companies are able to achieve), entities rated
"R-1 (middle)" are also considered strong credits which typically
exemplify above average strength in key areas of consideration for
debt protection. Short term debt rated "R-1 (low)" is of satisfactory
credit quality. The overall strength and outlook for key liquidity,
debt and profitability ratios is not normally as favorable as with
higher rating categories, but these considerations are still
respectable. Any qualifying negative factors which exist are
considered manageable, and the entity is normally of sufficient size
to have some influence in its industry.
R-2: Short term debt rated "R-2" is of adequate credit quality and
within the three subset grades (high, middle, low), debt protection
ranges from having reasonable ability for timely repayment to a level
which is considered only just adequate. The liquidity and debt ratios
of entities in the "R-2" classification are not as strong as those in
the "R-1" category, and the past and future trend may suggest some
risk of maintaining the strength of key ratios in these areas.
Alternative sources of liquidity support are considered satisfactory;
however, even the strongest liquidity support will not improve the
commercial paper rating of the issuer. The size of the entity may
restrict its flexibility, and its relative position in the industry is
not typically as strong as the "R-1 credit". Profitability trends,
past and future, may be less favorable, earnings not as stable, and
there are often negative qualifying factors present which could also
make the entity more vulnerable to adverse changes in financial and
economic conditions.
Appendix B
INDUSTRY CLASSIFICATIONS (Oppenheimer Money Fund/VA)
Aerospace amp; Defense Industrial Conglomerates
Air Freight amp; Couriers Insurance
Airlines Internet amp; Catalog Retail
Asset Backed Securities Internet amp; Software amp; Services
Auto Components IT Services
Automobiles Leasing amp; Factoring
Beverages Leisure Equipment amp; Products
Biotechnology Machinery
Broker-Dealer Marine
Building Products Media
Capital Markets Metals amp; Mining
Chemicals Multiline Retail
Commercial Banks Multi-Utilities
Commercial Finance Municipal
Commercial Services amp; Supplies Office Electronics
Communications Equipment Oil amp; Gas
Computers amp; Peripherals Paper amp; Forest Products
Construction amp; Engineering Personal Products
Construction Materials Pharmaceuticals
Consulting amp; Services Real Estate
Consumer Finance Repurchase Agreements
Containers amp; Packaging Road amp; Rail
Distributors Semiconductor and Semiconductor Equipment
Diversified Financial Services Software
Diversified Telecommunication Special Purpose Financial
Electric Utilities Specialty Retail
Electrical Equipment Textiles, Apparel amp; Luxury Goods
Electronic Equipment amp; Instruments Thrifts amp; Mortgage Finance
Energy Equipment amp; Services Tobacco
Food amp; Drug Retailing Trading Companies amp; Distributors
Food Products Transportation Infrastructure
Foreign Government U.S. Government Agencies-Full Faith and Credit
Gas Utilities U.S. Government Agencies-Government Sponsored
Enterprises
Health Care Equipment amp; Supplies U.S. Government Instrumentalities
Health Care Providers amp; Services U.S. Government Obligations
Hotels Restaurants amp; Leisure Water Utilities
Household Durables Wireless Transportation Services
Household Products
Appendix C
INDUSTRY CLASSIFICATIONS (all Funds except Oppenheimer Money Fund/VA)
Aerospace amp; Defense Household Products
Air Freight amp; Couriers Industrial Conglomerates
Airlines Insurance
Auto Components Internet amp; Catalog Retail
Automobiles Internet Software amp; Services
Beverages IT Services
Biotechnology Leisure Equipment amp; Products
Building Products Machinery
Chemicals Marine
Consumer Finance Media
Commercial Banks Metals amp; Mining
Commercial Services amp; Supplies Multiline Retail
Communications Equipment Multi-Utilities
Computers amp; Peripherals Office Electronics
Construction amp; Engineering Oil amp; Gas
Construction Materials Paper amp; Forest Products
Containers amp; Packaging Personal Products
Distributors Pharmaceuticals
Diversified Financial Services Real Estate
Diversified Telecommunication Road amp; Rail
Services
Electric Utilities Semiconductors and Semiconductor
Equipment
Electrical Equipment Software
Electronic Equipment amp; Instruments Specialty Retail
Energy Equipment amp; Services Textiles, Apparel amp; Luxury Goods
Food amp; Staples Retailing Thrifts amp; Mortgage Finance
Food Products Tobacco
Gas Utilities Trading Companies amp; Distributors
Health Care Equipment amp; Supplies Transportation Infrastructure
Health Care Providers amp; Services Water Utilities
Hotels Restaurants amp; Leisure Wireless Telecommunication Services
Household Durables
Appendix D
Major Shareholders. As of March 31, 2005 the total number of shares
outstanding, and the number of shares and approximate percentage of Fund
shares held of record by separate accounts of the following insurance
companies (and their respective subsidiaries) and by OppenheimerFunds, Inc.
("OFI") were as follows. ["*" indicates less than 5% of the outstanding
shares of that fund or class]:
Oppenheimer Variable Account
Funds
(consisting of 11 separate Total Shares Allmerica Allstate
Funds) in the fund Allianz Financial Financial
Aggressive Growth Fund/VA 26,781,056.324 * * *
Non-Service Shares
Aggressive Growth Fund/VA 603,238.283 * * *
Service Shares
Balanced Fund/VA 32,450,812.347 * * *
Non-Service Shares
Balanced Fund/VA 4,077,834.698 * 580,503.917 *
Service Shares
14.24%
Capital Appreciation Fund/VA 46,827,565.765 * *
Non-Service Shares
Capital Appreciation Fund/VA 7,385,080.732 * 507,274.107 *
Service Shares
6.87%
Core Bond Fund/VA 44,017,325.636 * * *
Non-Service Shares
Core Bond Fund/VA 468,185.238 * * *
Service Shares
Global Securities Fund/VA 85,501,337.512 8,215,672.743 * *
Non-Service Shares
9.61%
Global Securities Fund/VA 12,805,429.819 * 1,162,413.377 *
Service Shares
9.08%
Global Securities Fund/VA 9,613,031.055 * * *
Class 3 shares
Global Securities Fund/VA 1,625,936.088 * * *
Class 4 shares
High Income Fund/VA 54,637,269.586 5,310,746.846 * *
Non-Service Shares
9.72%
High Income/VA 15,825,669.459 * 3,367,162.723 *
Service Shares
21.28%
Main Street Fund/VA 58,105,140.430 9,063,829.785 * *
Non-Service Shares
15.60%
Main Street Fund/VA 19,831,863.824 * * *
Service Shares
Main Street Small Cap Fund/VA 2,527,035.289 * * 282,588.373
Non-Service Shares
11.18%
Main Street Small Cap Fund/VA 11,988,173.961 * * *
Service Shares
Money Fund/VA 189,404,895.300 * * *
Non-Service Shares
Strategic Bond Fund/VA 125,859,150.212 * * *
Non-Service Shares
*
Strategic Bond Fund/VA 58,844,095.379 * * *
Service Shares
*
Value Fund/VA * * * *
Non-Service Shares
Oppenheimer Variable Account
Funds Allstate
(consisting of 11 separate Life Allstate Life American American
Funds) of NY Ins. Co. Express General
Aggressive Growth Fund/VA * * * *
Non-Service Shares
Aggressive Growth Fund/VA 53,788.546 334,387.046 * *
Service Shares
8.92% 55.43%
Balanced Fund/VA * * * *
Non-Service Shares
Balanced Fund/VA 337,941.382 2,218,853.805 * *
Service Shares
8.29% 54.41%
Capital Appreciation Fund/VA * * * *
Non-Service Shares
Capital Appreciation Fund/VA * 1,218,973.166 891,053.502 *
Service Shares
16.51% 12.07%
Core Bond Fund/VA * * * *
Non-Service Shares
Core Bond Fund/VA 87,130.170 156,817.619 * *
Service Shares
18.61% 33.49%
Global Securities Fund/VA * * * *
Non-Service Shares
Global Securities Fund/VA * 971,431.913 * *
Service Shares
7.59%
Global Securities Fund/VA * * * *
Class 3 shares
Global Securities Fund/VA * * * *
Class 4 shares
High Income Fund/VA * * * *
Non-Service Shares
High Income/VA 906,702.112 4,130,160.942 * *
Service Shares
5.73% 26.10%
Main Street Fund/VA * * * *
Non-Service Shares
Main Street Fund/VA * 2,895,841.007 * *
Service Shares
14.60%
Main Street Small Cap Fund/VA 144,181.237 * * 318,185.813
Non-Service Shares
5.71% 12.59%
Main Street Small Cap Fund/VA * 1,961,925.917 687,171.522 *
Service Shares
16.37% 5.73%
Money Fund/VA * * * *
Non-Service Shares
Strategic Bond Fund/VA * * * *
Non-Service Shares
Strategic Bond Fund/VA 2,946,934.2716,581,698.96813,363,031.431 *
Service Shares
5.01% 28.18% 22.71%
Value Fund/VA * * * *
Non-Service Shares
Oppenheimer Variable Account
Funds
(consisting of 11 separate Security
Funds) Cuna Benefit GE IDS Life
Aggressive Growth Fund/VA * * 2,424,195.293 *
Non-Service Shares
9.05%
Aggressive Growth Fund/VA * * 153,225.794 *
Service Shares
25.40%
Balanced Fund/VA * * 5,106,237.963 *
Non-Service Shares
15.74%
Balanced Fund/VA * * 892,969.487 *
Service Shares
21.90%
Capital Appreciation Fund/VA * * 4,617,366.648 *
Non-Service Shares
9.86%
Capital Appreciation Fund/VA * * 489,562.758 *
Service Shares
6.63%
Core Bond Fund/VA * * 7,724,610.929 *
Non-Service Shares
17.55%
Core Bond Fund/VA * * * *
Service Shares
Global Securities Fund/VA * * * *
Non-Service Shares
Global Securities Fund/VA * * 3,821,670.8281,340,540.525
Service Shares
29.84% 10.47%
Global Securities Fund/VA * * * *
Class 3 shares
Global Securities Fund/VA * * * *
Class 4 shares
High Income Fund/VA 8,829,384.258 * 10,661,396.170 *
Non-Service Shares
16.16% 19.51%
High Income/VA * * * *
Service Shares
Main Street Fund/VA * * * *
Non-Service Shares
Main Street Fund/VA * * 3,283,512.159 *
Service Shares
16.56%
Main Street Small Cap Fund/VA * * * *
Non-Service Shares
Main Street Small Cap Fund/VA * 622,924.0381,818,115.0151,616,514.898
Service Shares
5.20% 15.17% 13.48%
Money Fund/VA * * * *
Non-Service Shares
Strategic Bond Fund/VA * * * *
Non-Service Shares
Strategic Bond Fund/VA * * * 15,954,272.458
Service Shares
27.11%
Value Fund/VA * * * *
Non-Service Shares
Oppenheimer Variable Account
Funds
(consisting of 11 separate Lincoln Mass
Funds) ING Kemper Benefit Mutual
Aggressive Growth Fund/VA * * * 14,626,387.364
Non-Service Shares
54.61%
Aggressive Growth Fund/VA * * * *
Service Shares
Balanced Fund/VA * * * 10,415,229.884
Non-Service Shares
32.10%
Balanced Fund/VA * * * *
Service Shares
Capital Appreciation Fund/VA * * * 13,747,926.263
Non-Service Shares
29.36%
Capital Appreciation Fund/VA * * * *
Service Shares
Core Bond Fund/VA * * * 17,530,992.366
Non-Service Shares
39.83%
Core Bond Fund/VA * * * *
Service Shares
Global Securities Fund/VA 17,116,243.379 * * 33,858,537.926
Non-Service Shares
20.02% 39.60%
Global Securities Fund/VA * 922,694.041 * *
Service Shares
7.21%
Global Securities Fund/VA * * * *
Class 3 shares
Global Securities Fund/VA * * * *
Class 4 shares
High Income Fund/VA * * * 21,145,084.899
Non-Service Shares
38.70%
High Income/VA * * * *
Service Shares
Main Street Fund/VA 3,534,160.562 * * 15,947,530.795
Non-Service Shares
6.08% 27.45%
Main Street Fund/VA * * * *
Service Shares
Main Street Small Cap Fund/VA * * * 994,605.123
Non-Service Shares
39.36%
Main Street Small Cap Fund/VA * 601,227.6222,767,597.168 *
Service Shares
5.02% 23.09%
Money Fund/VA * * * 151,541,495.820
Non-Service Shares
80.01%
Strategic Bond Fund/VA 24,709,486.581 * * 75,791,209.495
Non-Service Shares
19.63% 60.22%
Strategic Bond Fund/VA * * * *
Service Shares
Value Fund/VA * * * *
Non-Service Shares
Oppenheimer Variable Account
Funds
(consisting of 11 separate Merrill Minnesota MONY
Funds) Lynch Life Life Nationwide
Aggressive Growth Fund/VA * * * 7,166,013.071
Non-Service Shares
26.76%
Aggressive Growth Fund/VA * * *
Service Shares
Balanced Fund/VA 2,298,787.985 * * 11,465,669.286
Non-Service Shares
7.08% 35.33%
Balanced Fund/VA * * * *
Service Shares
Capital Appreciation Fund/VA * * * 21,898,855.207
Non-Service Shares
46.76%
Capital Appreciation Fund/VA * * * 2,050,675.390
Service Shares
27.77%
Core Bond Fund/VA * * * 16,132,965.875
Non-Service Shares
36.65%
Core Bond Fund/VA * * * *
Service Shares
Global Securities Fund/VA * * * 22,231,333.933
Non-Service Shares
26.00%
Global Securities Fund/VA * * 1,016,583.121,313,346.600
Service Shares
7.94% 10.26%
Global Securities Fund/VA * * * 9,613,031.055
Class 3 shares
100.00%
Global Securities Fund/VA * * * 1,625,936.088
Class 4 shares
100.00%
High Income Fund/VA * * * *
Non-Service Shares
High Income/VA * 2,783,539.293 * 3,063,180.015
Service Shares
17.59% 19.36%
Main Street Fund/VA * * * 22,312,739.087
Non-Service Shares
38.40%
Main Street Fund/VA * * * 3,084,943.221
Service Shares
15.56%
Main Street Small Cap Fund/VA * * * 460,703.579
Non-Service Shares
18.23%
Main Street Small Cap Fund/VA * * * 932,149.856
Service Shares
7.78%
Money Fund/VA 16,161,004.130 * * *
Non-Service Shares
8.53%
Strategic Bond Fund/VA * * * *
Non-Service Shares
Strategic Bond Fund/VA * * * 4,692,183.731
Service Shares
7.97%
Value Fund/VA * * * *
Non-Service Shares
Oppenheimer Variable Account
Funds
(consisting of 11 separate SunLife
Funds) Protective Sage Financial Travelers
Aggressive Growth Fund/VA * * * *
Non-Service Shares
Aggressive Growth Fund/VA * * * *
Service Shares
Balanced Fund/VA * * * *
Non-Service Shares
Balanced Fund/VA * * * *
Service Shares
Capital Appreciation Fund/VA * * * *
Non-Service Shares
Capital Appreciation Fund/VA * * 874,085.538 520,990.307
Service Shares
11.84% 7.05%
Core Bond Fund/VA * * * *
Non-Service Shares
Core Bond Fund/VA * 224,237.449 * *
Service Shares
47.90%
Global Securities Fund/VA * * * *
Non-Service Shares
Global Securities Fund/VA * * * *
Service Shares
Global Securities Fund/VA * * * *
Class 3 shares
Global Securities Fund/VA * * * *
Class 4 shares
High Income Fund/VA * * * *
Non-Service Shares
High Income/VA * * * *
Service Shares
Main Street Fund/VA 3,261,298.056 * * *
Non-Service Shares
5.61%
Main Street Fund/VA * * 7,268,178.7681,136,163.499
Service Shares
36.65% 5.73%
Main Street Small Cap Fund/VA * * * *
Non-Service Shares
Main Street Small Cap Fund/VA * * * *
Service Shares
Money Fund/VA 15,365,629.760 * * *
Non-Service Shares
8.11%
Strategic Bond Fund/VA 17,993,662.069 * * *
Non-Service Shares
14.30%
Strategic Bond Fund/VA * * * *
Service Shares
Value Fund/VA * * * *
Non-Service Shares
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Oppenheimer Variable Account Funds
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Investment Advisor
OppenheimerFunds, Inc.
Two World Financial Center
225 Liberty Street, 11th Floor
New York, New York 10281-1008
Distributor
OppenheimerFunds Distributor, Inc.
Two World Financial Center
225 Liberty Street, 11th Floor
New York, New York 10281-1008
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1.800.981.2871
Custodian Bank
JPMorgan Chase Bank
4 Chase Metro Tech Center
Brooklyn, New York 11245
Independent Registered Public Accounting Firm
Deloitte amp; Touche LLP
555 Seventeenth Street
Denver, Colorado 80202
Counsel to the Funds
Myer, Swanson, Adams amp; Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
Counsel to the Independent Trustees
Bell, Boyd amp; Lloyd LLC
70 West Madison Street, Suite 3100
Chicago, Illinois 60602
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PXOVAF.001.0405