-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MH2g3maOYSCvf9WHi8Z67jYB4g1n/VrWC3cJ5w3k6E6APromLQ1U/wwlCjZrORv8 LsfpDLs+5fjrWRWK2O+BWQ== 0000912057-97-008211.txt : 19970310 0000912057-97-008211.hdr.sgml : 19970310 ACCESSION NUMBER: 0000912057-97-008211 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970307 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER VARIABLE ACCOUNT FUNDS CENTRAL INDEX KEY: 0000752737 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 840974272 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04108 FILM NUMBER: 97552949 BUSINESS ADDRESS: STREET 1: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 2: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER VARIABLE LIFE FUNDS DATE OF NAME CHANGE: 19860609 N-30D 1 N-30D OPPENHEIMER VARIABLE ACCOUNT FUNDS ANNUAL REPORT DECEMBER 31, 1996 OPPENHEIMER MONEY FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER MONEY FUND, a series of Oppenheimer Variable Account Funds, primarily seeks maximum current income in "money market" securities that offer individual investors low capital risk and the maintenance of liquidity. These securities include short-term U.S. Government securities, certificates of deposit (CDs), bankers' acceptances and commercial paper. It's important to remember, however, that an investment in the Money Fund is neither insured nor guaranteed by the U.S. Government. While the Money Fund seeks to maintain a stable net asset value of $1.00 per share, there is no assurance that it will be able to do so. NARRATIVE BY DOROTHY WARMACK, FUND MANAGER This was a difficult year for the fixed income market, but against many odds, this portfolio performed well. Our strategy of positioning our investments in securities that offered competitive yields and relatively steady prices enabled us to successfully provide investors with a competitive level of income, while maintaining a constant share price. In order to meet the portfolio's objective of preserving capital while capturing the highest possible yield, our assets must be invested in low risk, short-term securities such as commercial paper, letters of credit and floating-rate securities. While these are all generally conservative investments, we took even further steps to maximize the portfolio's performance as the market fluctuated throughout the year. For example, when interest rates began to rise early in the year, we invested in securities that had shorter maturity dates. Because we invested in securities that had short maturities, the yields paid were directly related to the prevailing interest rates. Therefore, last year's climbing interest rates worked to our advantage. Current interest rates are higher than they were at the beginning and middle of 1996, and we believe they should continue to work in our favor over the near term. And, unless we begin to see clear evidence of a slowdown in the economy, relative to last year, we will remain fairly short in our average maturity. Given this outlook for the market, we expect to continue to provide investors a competitive income stream along with safety of principal as the year progresses. We appreciate your confidence in Oppenheimer Money Fund. We look forward to helping you reach your financial goals in the future. i OPPENHEIMER HIGH INCOME FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER HIGH INCOME FUND, a series of Oppenheimer Variable Account Funds, seeks a high level of current income. The Fund invests in high-yielding, lower-rated and unrated fixed income securities. NARRATIVE BY DAVID NEGRI, FUND MANAGER While the bond market of 1996 was somewhat difficult due to rising interest rates early in the year, Oppenheimer High Income Fund performed very well. High-yield bonds, while having greater credit risks, continued to perform better than most other fixed income investments during this generally weak market and our early, aggressive positioning allowed us to take advantage of that strength. Over the past year, we benefited most from emphasis on the telecommunications sector. This industry, which also includes media and cable companies, has tended to be fairly aggressive and has shown strong performance for several years. In addition, recent government deregulation caused increased demand for domestic and international telecommunication products, and this in turn, has driven earnings growth. This sector also benefited from a surge in the number of corporate mergers and acquisitions. All of these measures have added up to increased profitability within this sector. Another factor that contributed to the Fund's positive performance was reduced emphasis in the casino and gaming industry. Consolidations within the industry have not prevented an earnings slowdown. Because we had allocated very little of the Fund's assets to this industry, we were able to avoid some of these disappointments. We also benefited from having fewer investments in paper and forest products, segments that were poor performers during this period due to light demand coupled with ample supply of these products. This year we invested about 15 percent of the Fund's assets in foreign government bonds, split fairly evenly between emerging markets and developed countries. These securities, while entailing additional risks, such as currency fluctuations, enjoyed exceptionally strong performance last year, producing even higher returns than high-yield corporate bonds. By investing internationally, we were able to diversify the portfolio, as well as significantly increase returns over the period. Looking ahead to 1997, we are concentrating on improving the overall relative credit quality of our holdings. For example, as we decreased the portfolio's exposure to some cyclical industries that underperformed in 1996, such as metals and paper and forest products, we substantially increased investments in the oil and gas sector, which has offered higher-quality, higher-rated investments. In addition to higher credit quality, these investments tend to be less cyclical by nature, making them less vulnerable should the economy begin to show signs of slowing. We appreciate your confidence in Oppenheimer High Income Fund. We look forward to helping you reach your financial goals in the future. ii OPPENHEIMER BOND FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER BOND FUND, a series of Oppenheimer Variable Account Funds, primarily seeks a high level of current income from investing in high yield fixed income securities rated "Baa" or better by Moody's or "BBB" or better according to Standard & Poor's. Secondarily, the Fund seeks capital growth when this is consistent with its primary objective of high current income. NARRATIVE BY DAVID NEGRI, FUND MANAGER In spite of a somewhat difficult bond market this past year, Oppenheimer Bond Fund's performance was relatively strong. While rising interest rates hindered the performance of many other fixed income investments, our performance was positive. What's more, we continued to provide competitive monthly income over the period. The Fund's strong performance can be attributed to two major factors. First, we maintained a defensive position and kept the portfolio's average maturity relatively short. Because shorter-maturity bonds are typically less sensitive to changes in interest rates, we avoided some of the price fluctuations associated with longer-term investments as interest rates rose throughout the year. This strategy also enabled the Fund to capture a competitive level of income. The second factor that contributed to the Fund's positive performance was our strategic diversification over a variety of bonds. Overall, however, mortgage-backed securities were the strongest performers in the portfolio. As is typically the case, when interest rates rise, mortgage prepayment risk decreases because homeowners are less likely to refinance. In addition to offering less prepayment risk, mortgage-backed securities also paid very competitive income during the year and this further benefited the portfolio's performance. In contrast, as interest rates climbed over the period, our existing holdings of U.S. Treasury bonds performed relatively poorly. Fortunately, by holding those bonds with shorter maturities, we were able to limit their negative impact on portfolio performance. During the second half of the year, we focused on corporate bonds to capture as much income as possible. Specifically, we found the greatest potential in bonds issued by financial services firms and oil- and gas-related businesses. Within the financial services companies, corporate restructuring and consolidations have improved profitability and balance sheets, while advanced technology has strengthened the profits of many companies within the oil and gas industry. As we move into 1997, we expect to see continued modest economic growth in the United States, accompanied by low inflation and flat corporate earnings. In an environment such as this, it does not seem likely that the Federal Reserve will cut interest rates. We appreciate your confidence in Oppenheimer Bond Fund. We look forward to helping you meet your financial goals in the future. iii OPPENHEIMER CAPITAL APPRECIATION FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS. OBJECTIVE OPPENHEIMER CAPITAL APPRECIATION FUND, a series of Oppenheimer Variable Account Funds, primarily seeks capital appreciation through investments in the common stocks of "growth-type" companies. In addition, the Fund may selectively invest in some "special situations" that management believes may provide opportunities for growth. NARRATIVE BY PAUL LAROCCO, FUND MANAGER Oppenheimer Capital Appreciation Fund had an excellent year in 1996. We attribute this performance to the strength of the stocks of high growth companies over the period and some well-timed investment decisions. Because we use a bottom-up approach to our stock selection, we look for individual companies that display superior growth characteristics, demonstrate the ability to have solid earnings and strong management. In addition, these companies are addressing large, open-ended opportunities by offering new products, new services or a new way of doing things. Our strongest performers over the period were from the healthcare and technology industries. In healthcare, we owned selected physician practice management stocks. This is a growing part of the healthcare industry that helps doctors manage their practices, thereby enabling them to spend more time with patients and less time doing administrative work. Technology stocks were successful due to the development of efficiency-enhancing products, such as software programs and other applied technologies. Demand for these innovations has been strong, largely because they can help reduce costs of the businesses that implement the systems, while also improving their revenue opportunities.(1) Another area that performed well for us was the business services area. Our biggest successes were in information technology services, which benefited from the explosive growth in technology. We've also done well with our holdings in the industrial services area, which includes environmental companies, data processing companies and niche-consumer cyclical companies like selected retailers, apparel manufacturers and restaurants. Many of the stocks that disappointed us owe their less-than-spectacular results mainly to failure to deliver on their growth prospects. In fact, these companies no longer display superior growth characteristics, and consequently, we sold many of them. Going forward, we're focusing on companies that we expect will have solid earnings growth in 1997. We have trimmed the number of stocks in the portfolio to concentrate on fewer holdings, but we have a higher degree of confidence in the ability of these companies to deliver robust growth. In addition, we expect to see moderate but steady economic growth in the United States, coupled with stable interest rates in the near term. Both factors should benefit the portfolio. Of course, we'll continue to select stocks based on their individual merit, regardless of near-term market predictions, because solid companies with good fundamentals tend to stand the test of time. We appreciate your confidence in Oppenheimer Capital Appreciation Fund. We look forward to helping you reach your financial goals in the future. ____________________ (1) The Fund's portfolio is subject to change. iv OPPENHEIMER GROWTH FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER GROWTH FUND, a series of Oppenheimer Variable Account Funds, primarily seeks capital appreciation from investments in securities of well-known and established companies. Current income is a secondary consideration. The Fund's present focus is in securities of mid- or large-cap companies with a history of earnings and dividend growth. NARRATIVE BY JANE PUTNAM, FUND MANAGER Oppenheimer Growth Fund performed very well, finishing 46th out of 531 growth variable annuity funds ranked by Lipper Analytical Services for the 1-year period ended 12/31/96. The fund was ranked in the top quartile over the latter six months of that period, and remained in the top half throughout the year.(1) In this aging economic expansion, investors have been more willing to pay higher premiums for stocks that offer a high degree of earnings currently. As a result, large-cap established growth stocks outperformed smaller cap stocks, helping to make 1996 a very successful year for the Fund. This year, our holdings in the technology and financial sectors were the strongest performers. Corporate America's ongoing quest to improve efficiency, reduce costs and generally increase competitiveness continues to drive demand for technology. One example of an industry that has benefited through investments in technology has been the banking industry.(2) Electronic banking and automated-teller machines have greatly reduced the costs of delivering services. And, fortunately, banks have spent their increased cash flows wisely, by raising dividends and implementing stock buybacks. In fact, financial services firms across the board have shown tremendous gains, with banks, asset management and brokerage firms all reporting positive earnings. In addition to these successes, we've also done well with our holdings in niche-consumer cyclicals, like selected women's apparel companies and footwear manufacturers. Because prices have risen so much over the past year, we've had some difficulty finding stocks at what we'd consider reasonable price levels. As a consequence, our cash position was slightly higher than normal, a factor that has held us back somewhat. However, even though a high cash level can hinder the Fund's performance when the stock market increases, the flip side is that it also allows us to quickly take advantage of any opportunities when they present themselves. Currently, many stock prices appear pretty fully valued. However, there are stocks of many growing companies that, we believe, are still attractive. Looking ahead to 1997, we plan to focus specifically on companies that exhibit good earnings growth, usually a consequence of new product cycles or market share gains. In addition, we are keeping our eyes open for companies that have lagged the market somewhat. In doing so, we have recently begun to add certain low-expectation companies that we believe have solid potential, are reasonably priced and offer a promising risk-reward ratio. We also plan to continue looking for strong companies within the energy sector, an area we believe will exhibit growth for the long-term. Finally, as we mentioned earlier, we plan to continue holding enough cash to take advantage of any opportunities as they arise. We appreciate your confidence in Oppenheimer Growth Fund. We look forward to helping you reach your financial goals in the future. _____________________ (1) Source: Lipper Analytical Services 12/31/96. Oppenheimer Variable Account--Growth Fund was ranked 31 out of 193 variable annuity funds for the 5-year period ended 12/31/96 and 35 out of 96 funds for the 10-year period ended 12/31/96. Oppenheimer Growth Fund is categorized by Lipper as a growth variable annuity fund. Lipper performance is based on total returns and does not take sales charges or separate account charges into account. (2) The Fund's portfolio is subject to change. v OPPENHEIMER MULTIPLE STRATEGIES FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER MULTIPLE STRATEGIES FUND, a series of Oppenheimer Variable Account Funds, seeks a total investment return (including current income and capital appreciation in the value of its shares) from investments in common stocks and other equity securities, bonds and other debt securities, and "money market" securities. The current allocation of the Fund's portfolio aims to take advantage of current economic conditions while managing risk. NARRATIVE BY RICHARD RUBENSTEIN, FUND MANAGER This was a very positive year for Oppenheimer Multiple Strategies Fund. We attribute the portfolio's performance to a solid investment strategy designed to benefit from a diversified selection of bonds and our ability to take advantage of the strength of the domestic stock market. Our bond selection strategy was by far the most notable contributor to the Fund's performance over the year. Specifically, our high-yield corporate and foreign bond holdings were the strongest components of the Fund. High-yield bonds benefited from strong corporate earnings and refinancing and foreign bonds did well due to their higher yields. There were also several interesting opportunities in emerging markets, particularly Argentina and Brazil. However, because foreign investments carry additional risks such as currency and political uncertainties, we tend to prefer Brady bonds, which are foreign securities that are partially backed by U.S. government bonds. By owning Brady bonds, we were able to capitalize on opportunities within emerging markets while reducing our currency risk. Within our domestic equity holdings, technology, financial services and healthcare were the strongest performing sectors. Technology stocks were successful due to the development of efficiency-enhancing products, such as software programs and other applied technologies. Demand for these innovations has been strong, largely because they can help lower costs for businesses, while also improving their quality of service. One of the chief beneficiaries of these programs is the banking industry. Electronic banking and automated-teller machines have greatly reduced the costs of delivering services. And fortunately, many banks have spent their increased cash flows wisely, by raising dividends and instituting stock buybacks. Healthcare companies benefited during the period from renewed faith in the industry. Four years ago, with the advent of the Clinton administration, the industry was clouded with concerns about rising healthcare costs. We took advantage of some low-priced healthcare companies at that time, and those companies have since regained their stature. Even though the Fund's international equity holdings contributed less to the portfolio's total return than did its U.S. equity component, our broad international investments added to the Fund's diversification. In addition, we've been able to locate some very good foreign stocks that were reasonably priced. Some of our recent additions include a large hotel chain and an English language newspaper in Hong Kong. We also purchased some energy companies in Canada because international energy companies are currently more appealing to us than their domestic counterparts. Going forward, our performance will depend primarily on the stocks we choose for the portfolio. While many U.S. stocks currently appear overvalued, there are still growing companies that remain at reasonable price levels. So, despite a highly valued stock market, our long-term outlook is positive. We believe the Fund is diversified enough to weather any unforeseen economic changes with the opportunity for solid returns and reduced risk. We appreciate your confidence in Oppenheimer Multiple Strategies Fund. We look forward to helping you reach your financial goals in the future. vi OPPENHEIMER GLOBAL SECURITIES FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER GLOBAL SECURITIES FUND, a series of Oppenheimer Variable Account Funds, seeks capital growth by investing in a diversified portfolio of foreign and domestic stocks. NARRATIVE BY WILLIAM WILBY, FUND MANAGER The Fund performed well over the past year, despite difficulties in the foreign markets. By combining our theme approach with strong individual stock selection, we were able to produce solid returns for the year. Despite on-again, off-again fears of too much or too little growth, the U.S. market has been the Fund's biggest contributor of positive return this year. Economic growth overseas has been weak, and most foreign markets lagged the U.S. despite their lower valuations. We attribute this to the universal focus of investors on "shareholder friendly" managements which are generally more numerous in the U.S. As European managements have moved to embrace "shareholder value", those markets began to perform while the less "shareholder oriented" managements in Asia lagged.(1) Our natural resources theme also provided some big winners during this period. Several years ago, we began to invest in oil service companies in Europe and North America. These companies, which specialize in deep-water drilling rigs, had seen a steady decline in day rates to well below replacement cost, while the demand for offshore drilling facilities increased. In 1996, day rates rose sharply along with the oil price, which in turn rose because of seasonally low inventory levels. Meanwhile, demand for oil in emerging economies has continued to grow unabated. On the negative side, our Japanese holdings did not perform as expected. Although we correctly anticipated the economic recovery in Japan, and the positive impact it would have on corporate earnings, the market did not bounce back. In fact, it declined. Going forward, we have recently added to our biotechnology holdings within our healthcare theme. Prior to the election, biotechnology stocks fell sharply on fears that a Democratic Congress might reintroduce a Clinton healthcare plan. We believed those fears were overblown and felt that the long-term fundamentals of these companies remained excellent. We used the sharp decline to buy into this sector before the election, and we are continuing to add shares where the fundamentals are strong. As the global economic cycle continues to age, and stock valuations move higher, we have approached 1997 with caution. We believe, however, that the Fund's portfolio, with substantial investments in high-growth-potential stocks, continues to offer investors an outstanding opportunity both for diversification and long-term appreciation potential. We appreciate your confidence in Oppenheimer Global Securities Fund. We look forward to helping you reach your financial goals in the future. _____________________ (1) The Fund's portfolio is subject to change. vii OPPENHEIMER STRATEGIC BOND FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER STRATEGIC BOND FUND, a series of Oppenheimer Variable Account Funds, seeks a high level of current income from debt securities principally by investing in three sectors: foreign fixed income securities, lower-rated high-yield domestic corporate bonds and U.S. government securities. NARRATIVE BY DAVID NEGRI, FUND MANAGER The year 1996 was a good year for Oppenheimer Strategic Bond Fund. Before I discuss the factors that contributed to the Fund's strong performance, however, I'd like to briefly review the core concept behind the Fund's investment strategy. Strategic Bond Fund is designed to take advantage of opportunities in three primary fixed income sectors: foreign fixed income securities; lower-rated high-yield domestic corporate bonds; and U.S. government issues. The goal of this flexible investment strategy is to diversify assets among sectors that tend to perform independently, thereby aiming to reduce the risk associated with investing in a single sector of the bond market. This is a strategy that has worked well for us. For example, although U.S. government bonds did not perform well during the first half of 1996 due to the rise in interest rates, the performance of the high-yield and international sectors during the same period was very strong. As a result of the Fund's diversification, it managed to remain in the middle of its peer group last year. On the whole, the bonds that performed best over the past year were those that were more credit rate sensitive, rather than interest rate sensitive. For example, our holdings in emerging international markets were the best performers, followed by high-yield corporate bonds. Emerging markets performed so well this year because these relatively riskier securities markets exhibited strong economic growth while maintaining generally low rates of inflation. And even though the Fund's allocation to emerging markets comprised only about 15% of total assets, long-term returns from this sector exceeded those of other investments within the portfolio. When you combine that success with that of our high-yield corporate bond holdings -- approximately 30% of the Fund's portfolio -- the two added up to very positive results for the Fund. Of course, high-yield bonds do have greater credit risks than investment grade securities. Currently, as emerging markets are entering a more mature, slower growth phase in their economic cycle, we are monitoring investments in these markets for yield potential rather than price appreciation. This has led us to look more closely at short-term money market instruments in local currencies of foreign countries. While they have no price appreciation potential, they offer attractive yields. And because we tend to emphasize liquid short-term holdings, we would have the ability to move out of those investments quickly, if necessary, without experiencing large price movements. Of course, foreign investments entail greater risk and expenses, including adverse currency fluctuations. But over time, we expect that the potential for greater long-term returns will more than compensate for temporary risks. Internationally, we've seen good performance from some of the higher-yielding debt in select foreign countries, particularly Italy and Spain. However, because our investments in these countries have reached what we feel are peak values, we have begun to take profits, shifting those assets to the German, United Kingdom and Canadian markets. On the negative side, as the yield on the benchmark 30-year U.S. Treasury bond moved from 6% in January to about 6.6% by year end, the U.S. government securities held by the Fund, specifically U.S. Treasuries, did not perform as well as expected. Interest-rate fluctuations over the year have caused long-term bonds to become increasingly volatile. In response, we decreased our holdings in long-term Treasuries and, in turn, increased our holdings in mortgage-backed securities, buying high coupon and very low coupon mortgage securities. Finally, we cut back on some holdings in the media and broadcast cable industries -- an area where we think our investments are fully valued -- and have shifted those assets into energy bonds. Because the energy sector typically has offered lower risk and higher-quality issues, our expansion in this area has helped build a higher level of credit quality viii into the portfolio. Looking ahead to 1997, our outlook is very positive. We will continue to monitor interest rates and worldwide economic growth and adjust the Fund's portfolio as needed. We feel our strategy of focusing on yield while seeking lower risk through diversification will allow the Fund to take advantage of the upcoming market environment. We appreciate your confidence in Oppenheimer Strategic Bond Fund. We look forward to helping you reach your financial goals in the future. ix OPPENHEIMER GROWTH & INCOME FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER GROWTH & INCOME FUND, a series of Oppenheimer Variable Account Funds, seeks high total return, which includes growth in the value of its shares as well as current income from equity and debt securities. NARRATIVE BY ROBERT MILNAMOW AND MIKE LEVINE, FUND MANAGERS Oppenheimer Growth & Income Fund performed very well over the past year. We attribute this success to our investment approach of strategically positioning our holdings in the stocks of companies representing five key areas of the market. These five areas are comprised of companies in emerging and improving industries; large growth companies that define their industries; smaller companies with niche businesses; companies undergoing restructuring; and finally, companies that are fundamentally strong selling at extremely low valuations.(1) In the first half of 1996, small stocks outperformed their larger counterparts, due to the demand for their superior growth rates. However, in the second half of the year, investors became anxious about the economic and political environments. As a result, they were looking for stocks that offered a greater level of certainty and during the second half of the year, large capitalization stocks were the stronger performers. Our best sectors last year were the technology and financial industries. Technology stocks were successful due to the development of efficiency-enhancing products, including both hardware and software. Demand for these products has been strong, largely because they can help lower operating costs, while also improving the quality of service. Banks have also performed well last year. Banks have spent their cash flows wisely last year, by both raising dividends and implementing stock buybacks. In fact, financial services firms across the board have shown tremendous gains, with banks, brokerage and asset management firms, as well as insurance companies all performing very well. And while the banking industry profited from consolidations, the insurance industry has also benefited from new legislation that reduced their exposure to natural disasters. Many of the stocks that disappointed us were concentrated in a few industries, including cable, entertainment and airlines. One of our largest holdings within the entertainment industry experienced delays in divesting selected assets, which had a negative impact on the company's valuation. We also experienced some disappointments in the airline industry, which underperformed due to increased oil prices and concerns that earnings may have reached their peak last year. Looking ahead to 1997, we plan to maintain our concentration in technology and financial industries. We are also seeking opportunities in other companies and sectors that may have underperformed in 1996, but appear poised for improvements in their fundamentals. For example, the gaming industry is currently experiencing some short-term difficulties, however, we believe over the long term, many of these companies have the ability to offer very positive performance results. In addition, we are targeting global agricultural companies, such as the producers of fertilizers and genetically engineered plants and crops. We believe these companies will benefit from growing worldwide demand for food. Because Oppenheimer Growth & Income Fund seeks to provide long-term growth and current income, its portfolio is positioned to do well in almost any market environment. We believe the Fund can react quickly when necessary, and is flexible enough to take advantage of market opportunities. We appreciate your confidence in Oppenheimer Growth & Income Fund. We look forward to helping you reach your financial goals in the future. ____________ (1) The Fund's portfolio is subject to change. x OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1996 PRINCIPAL VALUE AMOUNT (NOTE 1) - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- BANKERS' ACCEPTANCES - 1.0% - ---------------------------------------------------------------------------------------------------------- First National Bank of Boston, 5.45%, 2/3/97 (Cost $1,293,506) $ 1,300,000 $ 1,293,506 - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- DIRECT BANK OBLIGATIONS - 3.1% - ---------------------------------------------------------------------------------------------------------- Bank of Scotland Treasury Services PLC, 5.45%, 2/25/97 2,000,000 1,983,347 ---------------------------------------------------------------------------------------------------- CoreStates Capital Corp., 5.54%, 12/18/97 (1) 2,000,000 1,998,908 ------------ Total Direct Bank Obligations (Cost $3,982,255) 3,982,255 - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- LETTERS OF CREDIT - 3.8% - ---------------------------------------------------------------------------------------------------------- Bayerische Vereinsbank AG, guaranteeing commercial paper of Galicia Funding Corp.-Series B: 5.38%, 2/28/97 (2) 500,000 495,682 5.41%, 3/5/97 (2) 2,000,000 1,981,065 ---------------------------------------------------------------------------------------------------- Societe Generale, guaranteeing commercial paper of: Girsa Funding Corp., 5.32%, 4/3/97 (2) 2,000,000 1,972,809 Nacional Financiera, SNC-Series A, 5.44%, 1/9/97 500,000 499,396 ------------ Total Letters of Credit (Cost $4,948,952) 4,948,952 - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- SHORT-TERM NOTES - 82.8% - ---------------------------------------------------------------------------------------------------------- BEVERAGES - 3.1% ---------------------------------------------------------------------------------------------------- Coca-Cola Enterprises, Inc., 5.34%, 1/31/97 (2) 4,000,000 3,982,200 - ---------------------------------------------------------------------------------------------------------- BROKER/DEALERS - 12.5% ---------------------------------------------------------------------------------------------------- Dean Witter, Discover & Co.: 5.73%, 1/15/97 2,000,000 2,000,181 5.81%, 9/29/97 (1) 2,500,000 2,504,222 ---------------------------------------------------------------------------------------------------- Goldman Sachs Group, L.P.: 5.42%, 1/17/97 4,000,000 3,990,364 8.25%, 1/2/97 2,050,000 2,049,530 ---------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 5.33%, 1/2/97 700,000 699,896 ---------------------------------------------------------------------------------------------------- Morgan Stanley Group, Inc., 5.26%, 6/27/97 (1) 5,000,000 5,000,000 ------------ 16,244,193 - ---------------------------------------------------------------------------------------------------------- COMMERCIAL FINANCE - 11.9% ---------------------------------------------------------------------------------------------------- CIT Group Holdings, Inc.: 5.67%, 3/11/98 (1) 1,000,000 1,000,000 7%, 1/3/97 5,000,000 4,998,055 ---------------------------------------------------------------------------------------------------- Countrywide Home Loans, 5.33%, 1/23/97 590,000 588,078 ---------------------------------------------------------------------------------------------------- FINOVA Capital Corp., 5.43%, 2/26/97 4,000,000 3,966,276 ---------------------------------------------------------------------------------------------------- Heller Financial, Inc.: 5.45%, 3/21/97 3,000,000 2,964,121 5.46%, 10/10/97 (1) 2,000,000 1,999,691 ------------ 15,516,221
1 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- CONGLOMERATES - 4.2% ------------------------------------------------------------------------------------------------ Mitsubishi International Corp.: 5.34%, 1/8/97 $ 500,000 $ 499,481 5.50%, 3/17/97 5,000,000 4,942,708 ---------- 5,442,189 - ------------------------------------------------------------------------------------------------------ CONSUMER FINANCE - 3.8% ------------------------------------------------------------------------------------------------ Island Finance Puerto Rico, Inc., 5.32%, 2/26/97 5,000,000 4,958,622 - ------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 10.9% ------------------------------------------------------------------------------------------------ Associates Corp. of North America, 7.28%, 1/2/97 6,000,000 5,998,787 ------------------------------------------------------------------------------------------------ Ford Motor Credit Co.: 5.32%, 1/6/97 385,000 384,715 5.40%, 1/2/97 5,000,000 4,999,011 ------------------------------------------------------------------------------------------------ General Motors Acceptance Corp.: 5.35%, 1/8/97 500,000 499,480 7.75%, 4/15/97 2,200,000 2,213,215 ---------- 14,095,208 - ------------------------------------------------------------------------------------------------------- ELECTRONICS - 3.0% ------------------------------------------------------------------------------------------------ Mitsubishi Electric Finance America, Inc.: 5.33%, 1/30/97 (2) 715,000 711,918 5.36%, 2/12/97 (2) 3,200,000 3,179,989 ---------- 3,891,907 - ------------------------------------------------------------------------------------------------------- MANUFACTURING - 0.9% ------------------------------------------------------------------------------------------------ Rexam PLC, 5.32%, 1/29/97 (2) 1,125,000 1,120,345 - ------------------------------------------------------------------------------------------------------- OIL-INTEGRATED - 3.8% ------------------------------------------------------------------------------------------------ Repsol International Finance BV, 5.33%, 1/6/97 5,000,000 4,996,299 - ------------------------------------------------------------------------------------------------------- SPECIAL PURPOSE FINANCIAL - 23.8% ------------------------------------------------------------------------------------------------ CIESCO L.P.: 5.35%, 2/14/97 800,000 794,769 5.78%, 5/19/97 (1)(2) 3,000,000 2,999,805 ------------------------------------------------------------------------------------------------ Cooperative Association of Tractor Dealers, Inc., 5.40%, 1/24/97 1,176,000 1,171,943 ------------------------------------------------------------------------------------------------ Enterprise Funding Corp., 6.10%, 1/9/97 (2) 1,525,000 1,522,933 ------------------------------------------------------------------------------------------------ Falcon Asset Securitization Corp., 5.32%, 1/13/97 (2) 590,000 588,954 ------------------------------------------------------------------------------------------------ First Deposit Master Trust 1993-3: 5.32%, 2/24/97 (2) 2,000,000 1,984,040 5.35%, 1/21/97 (2) 774,000 771,699 5.36%, 1/15/97 (2) 3,000,000 2,993,747 ------------------------------------------------------------------------------------------------ Preferred Receivables Funding Corp., 5.53%, 1/16/97 5,000,000 4,988,479 ------------------------------------------------------------------------------------------------ RACERS Series 1996-MM-12-3, 5.59%, 12/15/97 (1)(3) 2,000,000 2,000,000 ------------------------------------------------------------------------------------------------ Sheffield Receivables Corp.: 5.32%, 1/16/97 (2) 3,550,000 3,542,131 5.32%, 1/9/97 2,000,000 1,997,636 ------------------------------------------------------------------------------------------------ Sigma Finance, Inc.: 5.31%, 2/25/97 (2) 545,000 540,579 5.37%, 4/15/97 (2) 3,000,000 2,953,460 5.44%, 2/28/97 (2) 2,000,000 1,982,471 ---------- 30,832,646
2 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL VALUE AMOUNT (NOTE 1) - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- SPECIALTY RETAILING - 1.1% ------------------------------------------------------------------------------------------------- Marks & Spencer, guaranteeing commercial paper of: St. Michael Finance Ltd., 5.70%, 2/10/97 $ 1,390,000 $ 1,381,197 - ------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 3.8% ------------------------------------------------------------------------------------------------- NYNEX Corp., 5.42%, 1/13/97 5,000,000 4,990,967 ------------- Total Short-Term Notes (Cost $107,451,994) 107,451,994 - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCIES - 3.8% - ------------------------------------------------------------------------------------------------------- Federal Home Loan Bank, 5.68%, 8/1/97 (Cost $4,997,438) (1) 5,000,000 4,997,438 - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 3.1% - ------------------------------------------------------------------------------------------------------- Bayerische Landesbank Girozentrale, 5.07%, 7/29/97 (1) 2,000,000 2,000,000 ------------------------------------------------------------------------------------------------- Westdeutsche Landesbank Girozentrale, guaranteeing commercial paper of: Comision Federal de Electricidad-Series A, 5.36%, 3/11/97 2,000,000 1,979,453 ------------- Total Foreign Government Obligations (Cost $3,979,453) 3,979,453 ------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE 97.6% 126,653,598 ------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 2.4 3,064,922 ------------- ------------ NET ASSETS 100.0% $129,718,520 ------------- ------------ ------------- ------------
Short-term notes, bankers' acceptances, direct bank obligations and letters of credit are generally traded on a discount basis; the interest rate is the discount rate received by the Fund at the time of purchase. Other securities normally bear interest at the rates shown. 1. Floating or variable rate obligation. The interest rate, which is based on specific, or an index of, market interest rates, is subject to change periodically and is the effective rate on December 31, 1996. This instrument may also have a demand feature which allows the recovery of principal at any time, or at specified intervals not exceeding one year, on up to 30 days' notice. Maturity date shown represents effective maturity based on variable rate and, if applicable, demand feature. 2. Restricted securities, including those issued in exempt transactions without registration under the Securities Act of 1933 (the Act), amounting to $33,323,827 or 25.69% of the Fund's net assets, have been determined to be liquid pursuant to guidelines adopted by the Board of Trustees. 3. Restricted securities which are considered illiquid, by virtue of the absence of a readily available market or because of legal or contractual restrictions on resale, amount to $2,000,000, or 1.54% of the Fund's net assets. The Fund may not invest more than 10% of its net assets (determined at the time of purchase) in illiquid securities. See accompanying Notes to Financial Statements. 3 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1996 PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 4.1% - -------------------------------------------------------------------------------------------------------------- CBA Mortgage Corp., Mtg. Pass-Through Certificates, Series 1993-C1, Cl. F, 7.773%, 12/25/03 (2)(3) $ 700,000 $ 548,625 ------------------------------------------------------------------------------------------------------------ Commercial Mortgage Acceptance Corp., Collateralized Mtg. Obligation, Series 1996-C1, Cl. E, 8.075%, 12/25/20 (2)(4) 250,000 252,344 ------------------------------------------------------------------------------------------------------------ Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates, Series 1995-C2, Cl. D, 7.989%, 6/15/21 (2) 449,587 456,050 ------------------------------------------------------------------------------------------------------------ Morgan Stanley Capital I, Inc., Commercial Mtg. Pass- Through Certificates, Series 1996-C1, Cl. E, 7.51%, 2/15/28 (2)(3) 835,342 678,715 ------------------------------------------------------------------------------------------------------------ Mortgage Capital Funding, Inc., Multifamily Mtg. Pass- Through Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06 (4) 750,000 607,969 ------------------------------------------------------------------------------------------------------------ NationsCommercial Corp., NB Commercial Mtg. Pass- Through Certificates, Series-DMC, Cl. C, 8.921%, 8/12/11 (4) 900,000 916,312 ------------------------------------------------------------------------------------------------------------ Nomura Asset Securities Corp., Series 1994-MD1, Cl. B2, 8.421%, 3/15/18 (2)(3) 750,000 658,008 ------------------------------------------------------------------------------------------------------------ Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates: Series 1994-C1, Cl. E, 8%, 6/25/26 700,166 644,153 Series 1994-C2, Cl. G, 8%, 4/25/25 815,728 732,244 Series 1995-C1, Cl. F, 6.90%, 2/25/27 913,739 805,519 ------------------------------------------------------------------------------------------------------------ Salomon Brothers Mortgage Securities VII, Series 1996-B, Cl. 1, 7.136%, 4/25/26 1,491,164 892,835 ------------------------------------------------------------------------------------------------------------ Structured Asset Securities Corp., Multiclass Pass-Through Certificates, Series 1996-C3, Cl. E, 8.458%, 6/25/30 (4) 650,000 574,234 ----------- Total Mortgage-Backed Obligations (Cost $7,521,680) 7,767,008 - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 10.7% - -------------------------------------------------------------------------------------------------------------- Argentina (Republic of): Treasury Bills, Zero Coupon, 12.117%, 1/17/97 (5) ARP 700,000 698,215 Unsec. Unsub. Bonds, 11.50%, 8/14/01 GBP 120,000 211,727 ------------------------------------------------------------------------------------------------------------ Banco Estado Minas Gerais, 8.25%, 2/10/00 550,000 531,094 ------------------------------------------------------------------------------------------------------------ Banco Nacional de Comercio Exterior SNC International Finance BV Gtd. Registered Bonds, 11.25%, 5/30/06 180,000 196,425 ------------------------------------------------------------------------------------------------------------ Bonos de la Tesoreria de la Federacion, Zero Coupon: 25.785%, 11/6/97 (5) MXP 4,000,000 416,640 29.171%, 7/3/97 (5) MXP 3,450,000 387,598 27.799%, 9/4/97 (5) MXP 3,900,000 423,613 ------------------------------------------------------------------------------------------------------------ Brazil (Federal Republic of) Multi-Year Discount Facility Agreement Trust Certificates, Series REGS, 6.688%, 9/15/07 (2) 390,000 334,669 ------------------------------------------------------------------------------------------------------------ Buenos Aires (Province of) Bonds, 10%, 3/5/01 DEM 420,000 291,881 ------------------------------------------------------------------------------------------------------------ Bulgaria (Republic of) Disc. Bonds, Tranche A, 6.688%, 7/28/24 (2) 540,000 306,450 ------------------------------------------------------------------------------------------------------------ Canada (Government of) Debs., 10.50%, 7/1/00 CAD 2,015,000 1,724,474 ------------------------------------------------------------------------------------------------------------ Central Bank of Costa Rica Interest Claim Bonds, Series B, 6.344%, 5/21/05 (2)(4) 224,763 212,120 ------------------------------------------------------------------------------------------------------------ Denmark (Kingdom of) Bonds, 8%, 11/15/01 DKK 6,640,000 1,249,452
4 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - -------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED) - -------------------------------------------------------------------------------------------------------------- Financiera Energetica Nacional SA Nts., 9.375%, 6/15/06 $ 820,000 $ 875,042 ------------------------------------------------------------------------------------------------------------ Hashemite Kingdom of Jordan: Disc. Bonds, 6.50%, 12/23/23 (2) 1,000,000 773,750 Interest Arrears Bonds, 6.50%, 12/23/05 (2) 300,000 276,750 ------------------------------------------------------------------------------------------------------------ Italy (Republic of): Sr. Unsec. Unsub. Global Bonds, 0.563%, 7/26/99 (2) JPY 91,000,000 788,086 Treasury Bonds, Buoni del Tesoro Poliennali, 10.50%, 11/1/98 ITL 940,000,000 662,028 ------------------------------------------------------------------------------------------------------------ New Zealand (Government of): Bonds, 8%, 4/15/04 NZD 545,000 402,253 Index Linked Bonds, 4.60%, 2/15/16 (2) NZD 303,000 209,750 ------------------------------------------------------------------------------------------------------------ Norwegian Government Bonds, 9.50%, 10/31/02 NOK 1,105,000 206,693 ------------------------------------------------------------------------------------------------------------ Panama (Republic of) Interest Reduction Bonds, 3.50%, 7/17/14 (6) 1,550,000 1,078,707 ------------------------------------------------------------------------------------------------------------ Portugal (Republic of) Gtd. Bonds, Obrigicion do tes Medio Prazo, 11.625%, 2/23/98 PTE 146,000,000 997,525 ------------------------------------------------------------------------------------------------------------ Russia (Government of) Interest Nts., 12/29/49 (7)(8) 330,000 229,763 ------------------------------------------------------------------------------------------------------------ Sweden (Kingdom of) Bonds, Series 1030, 13%, 6/15/01 SEK 3,600,000 679,774 ------------------------------------------------------------------------------------------------------------ Telecomunicacoes Brasileiras SA Bonds, 13%, 2/5/99 ITL 385,000,000 272,666 ------------------------------------------------------------------------------------------------------------ Telkom SA Ltd. Bonds, Series TK05, 12%, 3/31/98 ZAR 955,000 194,442 ------------------------------------------------------------------------------------------------------------ Treasury Corp. of Victoria Gtd. Bonds, 12%, 9/22/01 AUD 1,325,000 1,258,521 ------------------------------------------------------------------------------------------------------------ United Kingdom Treasury Nts., 12.50%, 11/21/05 GBP 975,000 2,115,904 ------------------------------------------------------------------------------------------------------------ United Mexican States Bonds, 10.375%, 1/29/03 DEM 1,895,000 1,326,160 ------------------------------------------------------------------------------------------------------------ Venezuela (Republic of): Collateralized Par Bonds, Series W-A, 6.75%, 3/31/20 250,000 191,875 Front-Loaded Interest Reduction Bonds, Series B, 6.50%, 3/31/07 (2) 500,000 446,875 New Money Bonds, Series P, 6.50%, 12/18/05 (2) 500,000 447,344 ----------- Total Foreign Government Obligations (Cost $19,831,187) 20,418,266 - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- LOAN PARTICIPATIONS - 1.3% - -------------------------------------------------------------------------------------------------------------- Algeria (Republic of) Reprofiled Debt Loan Participation Agreement, Tranche A, 6.625%, 9/4/06 (2)(4) 1,305,000 1,008,113 ------------------------------------------------------------------------------------------------------------ Morocco (Kingdom of) Loan Participation Agreement, Tranche A, 6.437%, 1/1/09 (2)(9) 990,000 807,159 ------------------------------------------------------------------------------------------------------------ Trinidad & Tobago Loan Participation Agreement, Tranche B, 1.772%, 9/30/00 (2)(4) JPY 82,062,000 657,514 ----------- Total Loan Participations (Cost $2,329,670) 2,472,786 - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- MUNICIPAL BONDS AND NOTES - 0.8% - -------------------------------------------------------------------------------------------------------------- San Joaquin Hills, California Transportation Corridor Agency Toll Road Capital Appreciation Revenue Bonds, Jr. Lien, Zero Coupon, 9.002%, 1/1/28 (Cost $816,147) (5) 12,500,000 1,499,000
5 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 61.0% - -------------------------------------------------------------------------------------------------------------- BASIC INDUSTRY - 5.5% - -------------------------------------------------------------------------------------------------------------- CHEMICALS - 0.3% ------------------------------------------------------------------------------------------------------------ NL Industries, Inc.: 0%/13% Sr. Sec. Disc. Nts., 10/15/05 (8) $ 300,000 $ 260,250 11.75% Sr. Sec. Nts., 10/15/03 260,000 276,250 ----------- 536,500 - -------------------------------------------------------------------------------------------------------------- METALS/MINING - 0.9% ------------------------------------------------------------------------------------------------------------ Carbide/Graphite Group, Inc. (The), 11.50% Sr. Nts., 9/1/03 454,000 498,265 ------------------------------------------------------------------------------------------------------------ Royal Oak Mines, Inc., 11% Sr. Sub. Nts., 8/15/06 1,250,000 1,275,000 ----------- 1,773,265 - -------------------------------------------------------------------------------------------------------------- PAPER - 3.0% ------------------------------------------------------------------------------------------------------------ APP International Finance Co. BV, 11.75% Gtd. Sec. Nts., 10/1/05 1,400,000 1,499,750 ------------------------------------------------------------------------------------------------------------ Florida Coast Paper Co. LLC, 12.75% First Mtg. Nts., 6/1/03 550,000 598,125 ------------------------------------------------------------------------------------------------------------ Indah Kiat International Finance Co. BV: 11.875% Sr. Sec. Gtd. Nts., 6/15/02 100,000 109,375 12.50% Sr. Sec. Gtd. Nts., Series C, 6/15/06 1,000,000 1,106,250 ------------------------------------------------------------------------------------------------------------ Repap New Brunswick, Inc., 10.625% Second Priority Sr. Sec. Nts., 4/15/05 1,000,000 1,050,000 ------------------------------------------------------------------------------------------------------------ Repap Wisconsin, Inc., 9.25% First Priority Sr. Sec. Nts., 2/1/02 500,000 508,750 ------------------------------------------------------------------------------------------------------------ SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 250,000 271,250 ------------------------------------------------------------------------------------------------------------ Stone Container Corp.: 10.75% First Mtg. Nts., 10/1/02 500,000 528,750 10.75% Sr. Sub. Nts., 6/15/97 100,000 101,750 ----------- 5,774,000 - -------------------------------------------------------------------------------------------------------------- STEEL - 1.3% ------------------------------------------------------------------------------------------------------------ AK Steel Corp., 9.125% Sr. Nts., 12/15/06 (3) 1,400,000 1,438,500 ------------------------------------------------------------------------------------------------------------ Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01 600,000 612,000 ------------------------------------------------------------------------------------------------------------ Gulf States Steel, Inc. (Alabama), 13.50% First Mtg. Nts., Series B, 4/15/03 200,000 190,000 ------------------------------------------------------------------------------------------------------------ Jorgensen (Earle M.) Co., 10.75% Sr. Nts., 3/1/00 175,000 179,375 ----------- 2,419,875 - -------------------------------------------------------------------------------------------------------------- CONSUMER RELATED - 7.7% - -------------------------------------------------------------------------------------------------------------- CONSUMER PRODUCTS - 2.4% ------------------------------------------------------------------------------------------------------------ Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., Series B, 11.617%, 5/27/98 (5) 750,000 629,062 ------------------------------------------------------------------------------------------------------------ E & S Holdings Corp., 10.375% Sr. Sub. Nts., 10/1/06 (3) 550,000 578,187 ------------------------------------------------------------------------------------------------------------ Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 1,650,000 1,806,750 ------------------------------------------------------------------------------------------------------------ International Semi-Tech Microelectronics, Inc., 0%/11.50% Sr. Sec. Disc. Nts., 8/15/03 (8) 500,000 326,250 ------------------------------------------------------------------------------------------------------------ Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts., 12.333%, 3/15/98 (5) 350,000 305,375 ------------------------------------------------------------------------------------------------------------ TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05 350,000 404,250 ------------------------------------------------------------------------------------------------------------ Williams (J. B.) Holdings, Inc., 12% Sr. Nts., 3/1/04 600,000 612,000 ----------- 4,661,874
6 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- FOOD/BEVERAGES/TOBACCO - 0.5% ------------------------------------------------------------------------------------------------------------ Consolidated Cigar Corp., 10.50% Sr. Sub. Nts., 3/1/03 $ 400,000 $ 418,000 ------------------------------------------------------------------------------------------------------------ Doane Products Co., 10.625% Sr. Nts., 3/1/06 250,000 265,000 ------------------------------------------------------------------------------------------------------------ Foodbrands America, Inc., 10.75% Sr. Sub. Nts., 5/15/06 235,000 250,275 ----------- 933,275 - -------------------------------------------------------------------------------------------------------------- HEALTHCARE - 1.4% ------------------------------------------------------------------------------------------------------------ Genesis Health Ventures, Inc., 9.25% Sr. Sub. Nts., 10/1/06 (3) 850,000 877,625 ------------------------------------------------------------------------------------------------------------ Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., 7/15/02 400,000 452,000 ------------------------------------------------------------------------------------------------------------ IHF Holdings, Inc., 0%/15% Sr. Sub. Disc. Nts., Series B, 11/15/04 (4)(8) 1,050,000 769,303 ------------------------------------------------------------------------------------------------------------ Magellan Health Services, Inc., 11.25% Sr. Sub. Nts., Series A, 4/15/04 500,000 557,500 ----------- 2,656,428 - -------------------------------------------------------------------------------------------------------------- HOTEL/GAMING - 1.0% ------------------------------------------------------------------------------------------------------------ Capital Gaming International, Inc., Promissory Nts., 8/1/95 (10) 9,500 -- ------------------------------------------------------------------------------------------------------------ Majestic Star Casino LLC (The), 12.75% Sr. Sec. Nts., 5/15/03 280,000 302,400 ------------------------------------------------------------------------------------------------------------ Mohegan Tribal Gaming Authority, 13.50% Sr. Sec. Nts., Series B, 11/15/02 600,000 795,000 ------------------------------------------------------------------------------------------------------------ Showboat Marina Casino Partnership/Showboat Marina Finance Corp., 13.50% First Mtg. Nts., Series B, 3/15/03 750,000 828,750 ----------- 1,926,150 - -------------------------------------------------------------------------------------------------------------- LEISURE - 0.1% ------------------------------------------------------------------------------------------------------------ Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02 (4) 278,779 290,976 - -------------------------------------------------------------------------------------------------------------- RESTAURANTS - 1.1% ------------------------------------------------------------------------------------------------------------ Ameriking, Inc., 10.75% Sr. Nts., 12/1/06 505,000 525,200 ------------------------------------------------------------------------------------------------------------ Carrols Corp., 11.50% Sr. Nts., 8/15/03 430,000 456,875 ------------------------------------------------------------------------------------------------------------ Foodmaker, Inc.: 9.25% Sr. Nts., 3/1/99 200,000 204,000 9.75% Sr. Sub. Nts., 6/1/02 950,000 971,375 ----------- 2,157,450 - -------------------------------------------------------------------------------------------------------------- TEXTILE/APPAREL - 1.2% ------------------------------------------------------------------------------------------------------------ Clark-Schwebel, Inc., 10.50% Sr. Nts., 4/15/06 725,000 775,750 ------------------------------------------------------------------------------------------------------------ Polysindo International Finance Co. BV, 11.375% Gtd. Sec. Nts., 6/15/06 600,000 647,250 ------------------------------------------------------------------------------------------------------------ Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 500,000 553,750 ------------------------------------------------------------------------------------------------------------ William Carter Co., 10.375% Sr. Sub. Nts., 12/1/06 (3) 350,000 364,000 ----------- 2,340,750 - -------------------------------------------------------------------------------------------------------------- ENERGY - 6.9% ------------------------------------------------------------------------------------------------------------ BP America, Inc., 10.875% Nts., 8/1/01 CAD 350,000 307,221 ------------------------------------------------------------------------------------------------------------ Chesapeake Energy Corp.: 10.50% Sr. Nts., 6/1/02 600,000 654,000 9.125% Sr. Nts., 4/15/06 1,000,000 1,042,500 ------------------------------------------------------------------------------------------------------------ DeepTech International, Inc., 12% Sr. Sec. Nts., 12/15/00 200,000 215,000 ------------------------------------------------------------------------------------------------------------ Falcon Drilling Co., Inc., 8.875% Sr. Nts., Series B, 3/15/03 300,000 307,875 ------------------------------------------------------------------------------------------------------------ J. Ray McDermott SA, 9.375% Sr. Sub. Bonds, 7/15/06 1,400,000 1,473,500 ------------------------------------------------------------------------------------------------------------ Mariner Energy, Inc., 10.50% Sr. Sub. Nts., 8/1/06 (3) 925,000 985,125 ------------------------------------------------------------------------------------------------------------ Maxus Energy Corp., 11.50% Debs., 11/15/15 800,000 848,000
7 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - -------------------------------------------------------------------------------------------------------------- ENERGY (CONTINUED) - -------------------------------------------------------------------------------------------------------------- Mesa Operating Co.: 0%/11.625% Gtd. Sr. Sub. Disc. Nts., 7/1/06 (8) $ 1,050,000 $ 729,750 10.625% Gtd. Sr. Sub. Nts., 7/1/06 1,450,000 1,576,875 ------------------------------------------------------------------------------------------------------------ Parker Drilling Corp., 9.75% Gtd. Sr. Nts., 11/15/06 (3) 150,000 158,625 ------------------------------------------------------------------------------------------------------------ Petroleum Heat & Power Co., Inc.: 12.25% Sub. Debs., 2/1/05 157,000 176,232 9.375% Sub. Debs., 2/1/06 850,000 828,750 ------------------------------------------------------------------------------------------------------------ TransTexas Gas Corp., 11.50% Sr. Sec. Gtd. Nts., 6/15/02 3,300,000 3,584,625 ------------------------------------------------------------------------------------------------------------ Triton Energy Corp., 9.75% Sr. Sub. Disc. Nts., 12/15/00 200,000 210,000 ------------------------------------------------------------------------------------------------------------ Vintage Petroleum, Inc., 9% Sr. Sub. Nts., 12/15/05 100,000 103,000 ----------- 13,201,078 - -------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES - 4.2% - -------------------------------------------------------------------------------------------------------------- BANKS & THRIFTS - 1.8% ------------------------------------------------------------------------------------------------------------ Bank of America Malaysia, Zero Coupon Nts., 7.12%, 4/30/97 (5)(7) MYR 1,100,000 425,930 ------------------------------------------------------------------------------------------------------------ Chase Malaysia, Zero Coupon Nts., 7.203%, 4/25/97 (5) MYR 1,000,000 387,455 ------------------------------------------------------------------------------------------------------------ Citibank Malaysia Banker's Acceptance, Zero Coupon Negotiable CD, 7.169%, 4/30/97 (5) MYR 500,000 193,567 ------------------------------------------------------------------------------------------------------------ First Nationwide Escrow Corp., 10.625% Sr. Sub. Nts., 10/1/03 (3) 750,000 813,750 ------------------------------------------------------------------------------------------------------------ Ocwen Financial Corp., 11.875% Nts., 10/1/03 800,000 876,000 ------------------------------------------------------------------------------------------------------------ PT Inti Indorayon Utama, Zero Coupon Promissory Nts., 17.234%, 2/12/97 (5) IDR 1,800,000,000 748,885 ----------- 3,445,587 - -------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 2.0% ------------------------------------------------------------------------------------------------------------ Aames Financial Corp., 9.125% Sr. Nts., 11/1/03 200,000 204,500 ------------------------------------------------------------------------------------------------------------ ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02 (4) 144,131 159,265 ------------------------------------------------------------------------------------------------------------ GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 1,500,000 1,533,750 ------------------------------------------------------------------------------------------------------------ Snap Ltd., 11.50% Sec. Bonds, 1/29/09 DEM 2,070,000 1,359,978 ------------------------------------------------------------------------------------------------------------ Wilshire Financial Services Group, Inc., 13% Nts., 1/1/04 600,000 606,000 ----------- 3,863,493 - -------------------------------------------------------------------------------------------------------------- INSURANCE - 0.4% ------------------------------------------------------------------------------------------------------------ Veritas Holdings, Inc., 9.625% Sr. Nts., 12/15/03 (3) 750,000 761,250 - -------------------------------------------------------------------------------------------------------------- HOUSING RELATED - 1.4% - -------------------------------------------------------------------------------------------------------------- BUILDING MATERIALS - 0.1% ------------------------------------------------------------------------------------------------------------ Building Materials Corp. of America, 8.625% Sr. Nts., 12/15/06 (3) 165,000 164,587 - -------------------------------------------------------------------------------------------------------------- HOMEBUILDERS/REAL ESTATE - 1.3% ------------------------------------------------------------------------------------------------------------ First Place Tower, Inc.: 9.22% First Mtg. Bonds, 12/15/05 CAD 300,400 244,863 Units (each unit consists of one $10 principal amount of 8.50% cv. sub. debs., 12/15/15 and 40 common shares) (11) CAD 180,660 270,202 ------------------------------------------------------------------------------------------------------------ Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Sec. Nts., Series B, 4/1/02 1,200,000 1,296,000 ------------------------------------------------------------------------------------------------------------ Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11 (3) 700,000 586,687 ----------- 2,397,752
8 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- MANUFACTURING - 2.3% - -------------------------------------------------------------------------------------------------------------- AEROSPACE/ELECTRONICS/COMPUTERS - 1.2% ------------------------------------------------------------------------------------------------------------ Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05 $ 1,000,000 $ 1,117,500 ------------------------------------------------------------------------------------------------------------ Rohr, Inc., 11.625% Sr. Nts., 5/15/03 800,000 900,000 ------------------------------------------------------------------------------------------------------------ Unisys Corp., 11.75% Sr. Nts., 10/15/04 250,000 267,813 ----------- 2,285,313 - -------------------------------------------------------------------------------------------------------------- AUTOMOTIVE - 0.9% ------------------------------------------------------------------------------------------------------------ Aftermarket Technology Corp., 12% Sr. Sub. Nts., Series B, 8/1/04 400,000 446,000 ------------------------------------------------------------------------------------------------------------ Foamex LP/Foamex Capital Corp., 9.50% Gtd. Sr. Sec. Nts., 6/1/00 240,000 247,200 ------------------------------------------------------------------------------------------------------------ Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 400,000 436,000 ------------------------------------------------------------------------------------------------------------ Lear Corp., 9.50% Sub. Nts., 7/15/06 300,000 321,000 ------------------------------------------------------------------------------------------------------------ Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 225,000 218,250 ----------- 1,668,450 - -------------------------------------------------------------------------------------------------------------- CAPITAL GOODS - 0.2% ------------------------------------------------------------------------------------------------------------ Farley, Inc., Zero Coupon Sub. Debs., 14.143%, 12/30/12 (4)(5) 198,000 22,516 ------------------------------------------------------------------------------------------------------------ Mettler Toledo, Inc., 9.75% Gtd. Sr. Sub. Nts., 10/1/06 350,000 369,250 ----------- 391,766 - -------------------------------------------------------------------------------------------------------------- MEDIA - 11.5% - -------------------------------------------------------------------------------------------------------------- BROADCASTING - 2.3% ------------------------------------------------------------------------------------------------------------ American Radio Systems Corp., 9% Sr. Sub. Nts., 2/1/06 700,000 693,000 ------------------------------------------------------------------------------------------------------------ Argyle Television, Inc., 9.75% Sr. Sub. Nts., 11/1/05 200,000 203,000 ------------------------------------------------------------------------------------------------------------ Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 (12) 1,000,000 1,104,535 ------------------------------------------------------------------------------------------------------------ Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02 815,000 855,750 ------------------------------------------------------------------------------------------------------------ Summit Communications Group, Inc., 10.50% Sr. Sub. Debs., 4/15/05 (4) 850,000 928,625 ------------------------------------------------------------------------------------------------------------ Young Broadcasting, Inc., 9% Sr. Sub. Nts., Series B, 1/15/06 550,000 537,625 ----------- 4,322,535 - -------------------------------------------------------------------------------------------------------------- CABLE TELEVISION - 5.8% ------------------------------------------------------------------------------------------------------------ American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04 (8) 50,106 20,794 ------------------------------------------------------------------------------------------------------------ Bell Cablemedia plc: 0%/11.875% Sr. Disc. Nts., 9/15/05 (8) 1,100,000 893,750 0%/11.95% Sr. Disc. Nts., 7/15/04 (8) 1,700,000 1,496,000 ------------------------------------------------------------------------------------------------------------ Cablevision Industries Corp., 9.25% Sr. Debs., Series B, 4/1/08 600,000 637,107 ------------------------------------------------------------------------------------------------------------ Cablevision Systems Corp.: 10.50% Sr. Sub. Debs., 5/15/16 250,000 260,000 10.75% Sr. Sub. Debs., 4/1/04 500,000 521,250 ------------------------------------------------------------------------------------------------------------ Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc. Debs., 11/15/07 (8) 800,000 574,000 ------------------------------------------------------------------------------------------------------------ Diamond Cable Communications plc: 0%/11.75% Sr. Disc. Nts., 12/15/05 (8) 1,425,000 1,020,656 0%/13.25% Sr. Disc. Nts., 9/30/04 (8) 250,000 206,563
9 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - -------------------------------------------------------------------------------------------------------------- CABLE TELEVISION (CONTINUED) ------------------------------------------------------------------------------------------------------------ EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04 (8) $ 400,000 $ 333,000 ------------------------------------------------------------------------------------------------------------ Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B, 11/1/03 (2) 885,000 907,125 ------------------------------------------------------------------------------------------------------------ International CableTel, Inc.: 0%/10.875% Sr. Deferred Coupon Nts., 10/15/03 (8) 100,000 85,250 0%/12.75% Sr. Deferred Coupon Nts., 4/15/05 (8) 350,000 263,375 ------------------------------------------------------------------------------------------------------------ Rogers Cablesystems Ltd.: 10% Sr. Sec. Second Priority Debs., 12/1/07 200,000 212,000 11% Sr. Sub. Gtd. Debs., 12/1/15 250,000 269,375 ------------------------------------------------------------------------------------------------------------ TeleWest plc, 0%/11% Sr. Disc. Debs., 10/1/07 (8) 4,050,000 2,835,000 ------------------------------------------------------------------------------------------------------------ TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 300,000 324,608 ------------------------------------------------------------------------------------------------------------ Videotron Holdings plc, 0%/11% Sr. Disc. Nts., 8/15/05 (8) 250,000 204,375 ----------- 11,064,228 - -------------------------------------------------------------------------------------------------------------- DIVERSIFIED MEDIA - 2.5% ------------------------------------------------------------------------------------------------------------ Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/03 750,000 798,750 ------------------------------------------------------------------------------------------------------------ GSPI Corp., 10.15% First Mtg. Bonds, 6/24/10 (3) 471,719 443,846 ------------------------------------------------------------------------------------------------------------ Heritage Media Corp., 8.75% Sr. Sub. Nts., 2/15/06 350,000 337,750 ------------------------------------------------------------------------------------------------------------ Katz Media Corp., 10.50% Sr. Sub. Nts., 1/15/07 (3) 475,000 486,281 ------------------------------------------------------------------------------------------------------------ Lamar Advertising Co., 9.625% Sr. Sub. Nts., 12/1/06 400,000 416,000 ------------------------------------------------------------------------------------------------------------ Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03 (8) 1,850,000 1,725,125 ------------------------------------------------------------------------------------------------------------ Universal Outdoor, Inc.: 9.75% Sr. Sub. Nts., 10/15/06 250,000 258,750 9.75% Sr. Sub. Nts., 10/15/06 (3) 250,000 258,125 ----------- 4,724,627 - -------------------------------------------------------------------------------------------------------------- ENTERTAINMENT/FILM - 0.9% ------------------------------------------------------------------------------------------------------------ Imax Corp., 7% Sr. Nts., 3/1/01 (6) 1,600,000 1,640,000 - -------------------------------------------------------------------------------------------------------------- OTHER - 1.3% - -------------------------------------------------------------------------------------------------------------- CONGLOMERATES - 0.0% ------------------------------------------------------------------------------------------------------------ Maxxam Group, Inc., 0%/12.25% Sr. Sec. Disc. Nts., 8/1/03 (8) 100,000 85,000 - -------------------------------------------------------------------------------------------------------------- ENVIRONMENTAL - 0.3% ------------------------------------------------------------------------------------------------------------ Allied Waste North America, Inc., 10.25% Sr. Sub. Nts., 12/1/06 (3) 525,000 553,219 - -------------------------------------------------------------------------------------------------------------- SERVICES - 1.0% ------------------------------------------------------------------------------------------------------------ Coinstar, Inc., Units (each unit consists of $1,000 principal amount of 0%/13% sr. sub. disc. nts., 10/1/06 and one warrant to purchase seven ordinary shares) (4)(8)(11) 750,000 526,500 ------------------------------------------------------------------------------------------------------------ Iron Mountain, Inc., 10.125% Sr. Sub. Nts., 10/1/06 500,000 532,500 ------------------------------------------------------------------------------------------------------------ Protection One Alarm Monitoring, Inc.: 0%/13.625% Sr. Disc. Nts., 6/30/05 (8) 550,000 525,250 6.75% Cv. Gtd. Sr. Sub. Nts., 9/15/03 390,000 358,800 ----------- 1,943,050 - -------------------------------------------------------------------------------------------------------------- RETAIL - 1.9% - -------------------------------------------------------------------------------------------------------------- SPECIALTY RETAILING - 0.4% ------------------------------------------------------------------------------------------------------------ Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03 630,000 683,550
10 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - -------------------------------------------------------------------------------------------------------------- SUPERMARKETS - 1.5% ------------------------------------------------------------------------------------------------------------ Grand Union Co., 12% Sr. Nts., 9/1/04 $ 800,000 $ 852,000 ------------------------------------------------------------------------------------------------------------ Ralph's Grocery Co.: 10.45% Sr. Nts., 6/15/04 250,000 266,875 10.45% Sr. Nts., 6/15/04 1,100,000 1,174,250 ------------------------------------------------------------------------------------------------------------ Smith's Food & Drug Centers, Inc., 11.25% Sr. Unsec. Sub. Nts., 5/15/07 550,000 610,500 ----------- 2,903,625 - -------------------------------------------------------------------------------------------------------------- TRANSPORTATION - 1.3% - -------------------------------------------------------------------------------------------------------------- AIR TRANSPORTATION - 0.4% ------------------------------------------------------------------------------------------------------------ Atlas Air, Inc., 12.25% Pass-Through Certificates, 12/1/02 750,000 836,250 - -------------------------------------------------------------------------------------------------------------- RAILROADS - 0.9% ------------------------------------------------------------------------------------------------------------ Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts., Series B, 12/15/03 (8) 2,200,000 1,771,000 - -------------------------------------------------------------------------------------------------------------- UTILITIES - 17.0% - -------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES - 2.4% ------------------------------------------------------------------------------------------------------------ CalEnergy, Inc., 9.50% Sr. Nts., 9/15/06 (3) 425,000 440,938 ------------------------------------------------------------------------------------------------------------ California Energy, Inc., 0%/10.25% Sr. Disc. Nts., 1/15/04 (8) 1,400,000 1,487,500 ------------------------------------------------------------------------------------------------------------ El Paso Electric Co., 9.40% First Mtg. Bonds, Series E, 5/1/11 1,000,000 1,075,000 ------------------------------------------------------------------------------------------------------------ First PV Funding Corp.: 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 210,000 223,913 10.30% Lease Obligation Bonds, Series 1986A, 1/15/14 740,000 789,025 ------------------------------------------------------------------------------------------------------------ Subic Power Corp., 9.50% Sr. Sec. Nts., 12/28/08 620,689 648,621 ----------- 4,664,997 - -------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 14.6% ------------------------------------------------------------------------------------------------------------ American Communications Services, Inc.: 0%/12.75% Sr. Disc. Nts., 4/1/06 (8) 600,000 334,500 0%/13% Sr. Disc. Nts., 11/1/05 (8) 500,000 297,500 ------------------------------------------------------------------------------------------------------------ Arch Communications Group, Inc., 0%/10.875% Sr. Disc. Nts., 3/15/08 (8) 200,000 115,250 ------------------------------------------------------------------------------------------------------------ Brooks Fiber Properties, Inc.: 0%/10.875% Sr. Disc. Nts., 3/1/06 (8) 200,000 134,500 0%/11.875% Sr. Disc. Nts., 11/1/06 (3)(8) 2,050,000 1,317,125 ------------------------------------------------------------------------------------------------------------ Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04 (4)(8) 1,025,000 855,875 ------------------------------------------------------------------------------------------------------------ CellNet Data Systems, Inc., 0%/13% Sr. Disc. Nts., 6/15/05 (4)(8) 600,000 417,000 ------------------------------------------------------------------------------------------------------------ Cellular Communications International, Inc., Zero Coupon Sr. Disc. Nts., 12.376%, 8/15/00 (5)(9)(13) 3,600,000 2,511,000 ------------------------------------------------------------------------------------------------------------ Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (8) 2,000,000 1,830,000 ------------------------------------------------------------------------------------------------------------ Central Temica Guemes, 12% Bonds, 11/26/01 (4) 200,000 203,000 ------------------------------------------------------------------------------------------------------------ Colt Telecom Group plc, Units (each unit consists of $1,000 principal amount of 0%/12% sr. disc. nts., 12/15/06 and one warrant to purchase 7.8 ordinary shares) (8)(11) 1,100,000 665,500 ------------------------------------------------------------------------------------------------------------ Comunicacion Celular SA, 0%/13.125% Sr. Deferred Coupon Bonds, 11/15/03 (8) 875,000 581,875 ------------------------------------------------------------------------------------------------------------ Geotek Communications, Inc., 0%/15% Sr. Sec. Disc. Nts., 7/15/05 (8) 1,350,000 857,250 ------------------------------------------------------------------------------------------------------------ GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub. Disc. Nts., 12/15/05 (3)(8) 178,000 115,700
11 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - -------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS (CONTINUED) ------------------------------------------------------------------------------------------------------------ GST USA, Inc., 0%/13.875% Bonds, 12/15/05 (8) $ 1,499,000 $ 921,885 ------------------------------------------------------------------------------------------------------------ Hyperion Telecommunications, Inc., 0%/13% Sr. Disc. Nts., Series B, 4/15/03 (8) 100,000 57,250 ------------------------------------------------------------------------------------------------------------ IntelCom Group (USA), Inc.: 0%/12.50% Gtd. Sr. Disc. Nts., 5/1/06 (8) 150,000 98,625 0%/13.50% Sr. Disc. Nts., 9/15/05 (8) 1,550,000 1,108,250 ------------------------------------------------------------------------------------------------------------ Metrocall, Inc., 10.375% Sr. Sub. Nts., 10/1/07 1,225,000 1,047,375 ------------------------------------------------------------------------------------------------------------ MFS Communications Co., Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (8) 1,650,000 1,443,750 ------------------------------------------------------------------------------------------------------------ Occidente y Caribe Celular SA, Units (each unit consists of $1,000 principal amount of 0%/14% sr. disc. nts., 3/15/04 and one warrant to purchase 5.709 ordinary shares) (3)(8)(11) 300,000 181,500 ------------------------------------------------------------------------------------------------------------ Omnipoint Corp.: 11.625% Sr. Nts., 8/15/06 700,000 731,500 11.625% Sr. Nts., 8/15/06 (3) 500,000 522,500 ------------------------------------------------------------------------------------------------------------ ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 (3) 1,060,000 1,078,550 ------------------------------------------------------------------------------------------------------------ Petersburg Long Distance, Inc.: 9% Cv. Sub. Nts., 6/1/06 (3) 170,000 179,350 Units (each unit consists of $1,000 principal amount of 0%/14% sr. disc. nts., 6/1/04 and one warrant to purchase 34 ordinary shares) (3)(8)(11) 1,150,000 948,750 ------------------------------------------------------------------------------------------------------------ PriCellular Wireless Corp.: 0%/12.25% Sr. Sub. Disc. Nts., 10/1/03 (8) 500,000 430,000 0%/14% Sr. Sub. Disc. Nts., 11/15/01 (8) 1,750,000 1,710,625 10.75% Sr. Nts., 11/1/04 (3) 800,000 834,000 ------------------------------------------------------------------------------------------------------------ Real Time Data, Inc., Units (each unit consists of $1,000 principal amount of 0%/13.50% sub. disc. nts., 8/15/06 and one warrant to purchase six ordinary shares) (4)(8)(11) 1,900,000 1,045,000 ------------------------------------------------------------------------------------------------------------ Sprint Spectrum LP/Sprint Spectrum Finance Corp., 0%/12.50% Sr. Disc. Nts., 8/15/06 (8) 1,350,000 914,625 ------------------------------------------------------------------------------------------------------------ Teleport Communications Group, Inc.: 0%/11.125% Sr. Disc. Nts., 7/1/07 (8) 2,975,000 2,052,750 9.875% Sr. Nts., 7/1/06 300,000 322,500 ------------------------------------------------------------------------------------------------------------ USA Mobile Communications, Inc. II, 9.50% Sr. Nts., 2/1/04 150,000 143,250 ------------------------------------------------------------------------------------------------------------ Western Wireless Corp.: 10.50% Sr. Sub. Nts., 2/1/07 (3) 350,000 367,063 10.50% Sr. Sub. Nts., 6/1/06 (9) 1,400,000 1,471,750 ----------- 27,846,923 ----------- Total Corporate Bonds and Notes (Cost $110,703,118) 116,688,823 SHARES - -------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 1.7% - -------------------------------------------------------------------------------------------------------------- Berg Electronics Corp. (3)(14) 11,246 330,351 ------------------------------------------------------------------------------------------------------------ Celcaribe SA (4)(14) 121,950 207,315 ------------------------------------------------------------------------------------------------------------ EchoStar Communications Corp., Cl. A (14) 4,000 88,000
12 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------------------------------------- COMMON STOCKS (CONTINUED) - -------------------------------------------------------------------------------------------------------------- ECM Fund, L.P.I. (4) 150 $ 150,750 ------------------------------------------------------------------------------------------------------------ El Paso Electric Co. (14) 12,384 80,496 ------------------------------------------------------------------------------------------------------------ Equitable Bag, Inc. (4)(14) 3,723 18,615 ------------------------------------------------------------------------------------------------------------ Gillett Holdings, Inc. (4)(14) 22,355 804,780 ------------------------------------------------------------------------------------------------------------ Grand Union Co. (14) 20,511 102,555 ------------------------------------------------------------------------------------------------------------ GST Telecommunications, Inc. (14) 8,800 78,100 ------------------------------------------------------------------------------------------------------------ J. Ray McDermott SA (14) 10,965 241,230 ------------------------------------------------------------------------------------------------------------ MFS Communications, Inc. (14) 147 8,011 ------------------------------------------------------------------------------------------------------------ Omnipoint Corp. (4)(14) 46,875 857,227 ------------------------------------------------------------------------------------------------------------ Triangle Wire & Cable, Inc. (4)(14) 21,111 21,111 ------------------------------------------------------------------------------------------------------------ Walter Industries, Inc. (14) 18,455 260,677 ----------- Total Common Stocks (Cost $2,637,945) 3,249,218 - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 7.9% - -------------------------------------------------------------------------------------------------------------- BankAmerica Corp., 8.375%, Series K 13,000 328,250 ------------------------------------------------------------------------------------------------------------ BankUnited Capital Trust Preferred Securities (3) 600 600,750 ------------------------------------------------------------------------------------------------------------ Cablevision Systems Corp., 8.50% Cum. Cv., Series I 14,600 299,300 ------------------------------------------------------------------------------------------------------------ California Federal Bank, 10.625% Non-Cum., Series B 9,500 1,054,500 ------------------------------------------------------------------------------------------------------------ CRIIMI MAE, Inc., 10.875% Cum. Cv. Preferred Stock, Series B 37,000 1,073,000 ------------------------------------------------------------------------------------------------------------ Earthwatch, Inc., 12% Cv. Sr. Preferred Stock, Series C (4)(15) 90,000 900,000 ------------------------------------------------------------------------------------------------------------ El Paso Electric Co., 11.40% Series A Preferred Stock (15) 5,367 601,104 ------------------------------------------------------------------------------------------------------------ Fidelity Federal Bank, 12% Non-Cum. Exchangeable Perpetual Preferred Stock, Series A (4) 20,000 565,000 ------------------------------------------------------------------------------------------------------------ First Nationwide Bank, 11.50% Non-Cum. 6,000 688,500 ------------------------------------------------------------------------------------------------------------ Fresenius Medical Care Trust, 9% Preferred Securities 2,260,000 2,305,200 ------------------------------------------------------------------------------------------------------------ Glendale Federal Bank, F.S.B., 8.75% Non-Cum. Cv., Series E 16,500 969,375 ------------------------------------------------------------------------------------------------------------ K-III Communications Corp., $11.625 Exchangeable, Series B (4)(15) 8,423 852,849 ------------------------------------------------------------------------------------------------------------ Kelley Oil & Gas Corp., $2.625 Cv. (14) 13,000 310,375 ------------------------------------------------------------------------------------------------------------ Navistar International Corp., $6.00 Cv., Series G 2,500 141,250 ------------------------------------------------------------------------------------------------------------ Panamsat Corp., 12.75% Sr. Preferred Exchangeable (4)(15) 1,450 1,779,875 ------------------------------------------------------------------------------------------------------------ Pantry Pride, Inc., $14.875 Exchangeable, Series B 2,000 201,000 ------------------------------------------------------------------------------------------------------------ Prime Retail, Inc., $19.00 Cv., Series B 7,000 152,250 ------------------------------------------------------------------------------------------------------------ SDW Holdings Corp., 15% Cum. Sr. Exchangeable Preferred Stock (4) 37,500 1,312,500 ------------------------------------------------------------------------------------------------------------ Walden Residential Properties, Inc.: Preferred Stock 5,000 120,625 9.16% Cv. Preferred Stock, Series B 30,000 866,250 ----------- Total Preferred Stocks (Cost $13,725,104) 15,121,953 - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- OTHER SECURITIES - 0.6% - -------------------------------------------------------------------------------------------------------------- MFS Communications Co., Inc., 8% Cv. Depositary Shares each Representing 1/100 Share of Dividend Enhanced Convertible Stock (Cost $968,719) 13,000 1,186,250
13 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE UNITS (NOTE 1) - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.5% - -------------------------------------------------------------------------------------------------------------- American Communications Services, Inc. Wts., Exp. 11/05 475 $ 42,750 ------------------------------------------------------------------------------------------------------------ American Telecasting, Inc. Wts., Exp. 6/99 6,000 10,500 ------------------------------------------------------------------------------------------------------------ Ames Department Stores, Inc.: Excess Cash Flow Payment Certificates, Series AG-7A (4) 12,400 124 Litigation Trust (4) 39,658 397 ------------------------------------------------------------------------------------------------------------ Australis Media Ltd. Wts., Exp. 5/00 (4) 125 1 ------------------------------------------------------------------------------------------------------------ Capital Gaming International, Inc. Wts., Exp. 2/99 (4) 21,112 327 ------------------------------------------------------------------------------------------------------------ CellNet Data Systems, Inc. Wts., Exp. 6/05 (3) 4,800 70,200 ------------------------------------------------------------------------------------------------------------ Cellular Communications International, Inc. Wts., Exp. 8/03 (4) 2,920 58,400 ------------------------------------------------------------------------------------------------------------ Comunicacion Celular SA Wts., Exp. 11/03 (4) 875 65,625 ------------------------------------------------------------------------------------------------------------ Eye Care Centers of America, Inc. Wts., Exp. 10/03 (4) 630 2,835 ------------------------------------------------------------------------------------------------------------ Foamex LP/JPS Automotive Corp. Wts., Exp. 7/99 (4) 500 15,000 ------------------------------------------------------------------------------------------------------------ Gaylord Container Corp. Wts., Exp. 11/02 14,410 88,261 ------------------------------------------------------------------------------------------------------------ Geotek Communications, Inc. Wts., Exp. 7/05 52,500 131,250 ------------------------------------------------------------------------------------------------------------ Hyperion Telecommunications, Inc. Wts., Exp. 4/01 (4) 100 2,000 ------------------------------------------------------------------------------------------------------------ Icon Health & Fitness, Inc. Wts., Exp. 11/99 (4) 400 20,000 ------------------------------------------------------------------------------------------------------------ IHF Holdings, Inc. Wts., Exp. 11/99 (4) 250 37,500 ------------------------------------------------------------------------------------------------------------ In-Flight Phone Corp. Wts., Exp. 8/02 950 -- ------------------------------------------------------------------------------------------------------------ IntelCom Group, Inc. Wts., Exp. 9/05 5,940 53,460 ------------------------------------------------------------------------------------------------------------ Jewel Recovery LP, Participation Units of Limited Partners' Interest 2,360 -- ------------------------------------------------------------------------------------------------------------ Omnipoint Corp. Wts., Exp. 11/00 (4) 7,500 137,157 ------------------------------------------------------------------------------------------------------------ Protection One, Inc. Wts.: Exp. 11/03 (4) 28,000 175,000 Exp. 6/05 (4) 1,600 13,200 ------------------------------------------------------------------------------------------------------------ SDW Holdings Corp., Cl. B Wts., Exp. 12/06 (4) 3,750 48,750 ------------------------------------------------------------------------------------------------------------ Trizec Corp. Wts., Exp. 7/99 3,970 16,944 ------------------------------------------------------------------------------------------------------------ United International Securities Ltd. Wts., Exp. 11/99 (4) 1,440 28,800 ------------------------------------------------------------------------------------------------------------ Venezuela Government Wts., Exp. 4/20 1,250 -- ----------- Total Rights, Warrants and Certificates (Cost $399,755) 1,018,481 PRINCIPAL AMOUNT(1) - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 3.4% - -------------------------------------------------------------------------------------------------------------- Bayerische Landesbank Girozentrale, New York Branch, 6.28% Deutsche Mark Currency Protected Yield Curve CD, 7/25/97 $ 300,000 298,950 ------------------------------------------------------------------------------------------------------------ Canadian Imperial Bank of Commerce, New York Branch: 16.75% CD, 4/16/97 (indexed to the Federation GKO, Zero Coupon, 4/9/97) (4) 800,000 797,600 17% CD, 2/26/97 (indexed to the Federation GKO, Zero Coupon, 2/19/97) (4) 250,000 249,625 17% CD, 4/2/97 (indexed to the Russian Federation GKO, Zero Coupon, 3/26/97) 400,000 399,000 17.30% CD, 2/26/97 (indexed to the Federation GKO, Zero Coupon, 2/19/97) (4) 300,000 299,550
14 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - -------------------------------------------------------------------------------------------------------------- STRUCTURED INSTRUMENTS (CONTINUED) - -------------------------------------------------------------------------------------------------------------- ING (U.S.) Financial Holdings Corp., Zero Coupon: Korean Won/U.S. Dollar Linked Nts., 10.871%, 6/9/97 (5) $ 200,000 $ 185,960 Nts. Linked to the Greek Drachma/Swiss Franc Exchange Rate, 14.829%, 12/4/97 (5) 600,000 509,040 Nts., Linked to Greek Drachma/Swiss Franc Exchange Rate, 14.437%, 12/10/97 (5) 285,000 243,048 ------------------------------------------------------------------------------------------------------------ Internationale Nederlanden (U.S.) Capital Holdings Corp., Zero Coupon: Chilean Peso Linked Nts., 11.813%, 6/23/97 (5) 420,000 384,468 Czech Koruna Linked Nts., 11.911%, 6/26/97 (5) 350,000 333,585 ------------------------------------------------------------------------------------------------------------ Lehman Brothers Holdings: U.S. Dollar Nts. Linked to Czech Koruna/Swiss Franc, 15%, 12/21/98 100,000 99,920 Zero Coupon, U.S. Dollar Nts. Linked to: Czech Koruna/Swiss Franc, 15.411%, 12/29/97 (5) 500,000 500,900 Greek Drachma/Swiss Franc, 15.453%, 12/26/97 (5) 400,000 399,440 Greek Drachma/Swiss Franc, 15.499%, 12/30/97 (5) 200,000 200,000 Greek Drachma/Swiss Franc, 15.639%, 12/23/97 (5) 400,000 398,640 ------------------------------------------------------------------------------------------------------------ Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts., 12.677%, 1/3/97 (indexed to the Brazilian National Treasury Nts., Zero Coupon, 1/2/97) (5) 800,000 799,680 ------------------------------------------------------------------------------------------------------------ Swiss Bank Corp., New York Branch, 6.05% CD, 6/20/97 (indexed to the closing Nikkei 225 Index on 1/23/97, 5 yr. & 3 mos. Japanese Yen Swap rate & New Zealand Dollar) 450,000 459,225 ----------- Total Structured Instruments (Cost $6,588,493) 6,558,631
DATE STRIKE CONTRACTS - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- PUT OPTIONS PURCHASED - 0.0% - -------------------------------------------------------------------------------------------------------------- Australian Dollar Put Opt. 1/97 1.28AUD 770,000 1,040 ------------------------------------------------------------------------------------------------------------ Australian Dollar Put Opt. 2/97 1.282AUD 770,000 2,041 ------------------------------------------------------------------------------------------------------------ Deutsche Mark Put Opt. 2/97 1.545DEM 6,160,000 33,855 ------------------------------------------------------------------------------------------------------------ Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali, 9.50%, 2/1/06 Put Opt. 7/97 99.96%ITL 480 336 ------------------------------------------------------------------------------------------------------------ Japanese Yen Put Opt. 3/97 115JPY 165,000,000 22,770 ------------------------------------------------------------------------------------------------------------ New Zealand Dollar Put Opt. 3/97 1.4286NZD 573,000 3,461 ------------------------------------------------------------------------------------------------------------ New Zealand Dollar Put Opt. 3/97 1.44NZD 205,700 749 ------------------------------------------------------------------------------------------------------------ New Zealand Dollar Put Opt. 3/97 1.453NZD 91,500 210 ----------- Total Put Options Purchased (Cost $104,672) 64,462
15 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - -------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT - 6.8% - -------------------------------------------------------------------------------------------------------------- Repurchase agreement with Goldman, Sachs & Co., 6.52%, dated 12/31/96, to be repurchased at $12,904,673 on 1/2/97, collateralized by U.S. Treasury Nts., 5.50%-7.50%, 7/15/99-8/15/05, with a value of $13,195,771 (Cost $12,900,000) $ 12,900,000 $ 12,900,000 ------------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS, AT VALUE (COST $178,526,490) 98.8% 188,944,878 ------------------------------------------------------------------------------------------------------------ OTHER ASSETS NET OF LIABILITIES 1.2 2,348,495 ------------ ------------ NET ASSETS 100.0% $191,293,373 ------------ ------------ ------------ ------------
1. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: ARP - Argentine Peso JPY - Japanese Yen AUD - Australian Dollar MXP - Mexican Peso CAD - Canadian Dollar MYR - Malaysian Ringgit DEM - German Deutsche Mark NOK - Norwegian Krone DKK - Danish Krone NZD - New Zealand Dollar GBP - British Pound Sterling PTE - Portuguese Escudo IDR - Indonesian Rupiah SEK - Swedish Krona ITL - Italian Lira ZAR - South African Rand 2. Represents the current interest rate for a variable rate security. 3. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $17,341,932 or 9.07% of the Fund's net assets, at December 31, 1996. 4. Identifies issues considered to be illiquid - See applicable note of Notes to Financial Statements. 5. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 6. Represents the current interest rate for an increasing rate security. 7. When-issued security to be delivered and settled after December 31, 1996. 8. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 9. A sufficient amount of securities has been designated to cover outstanding written call options, as follows: CONTRACTS/PRINCIPAL SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED (NOTE 1) --------------------------------------------------------------------------------------------------------------------------- Call option on Australian Dollar 626,780 1/97 1.2285AUD $ 4,043 $ 63 Call option on British Pound Sterling 300,000 1/97 1.632GBP 6,756 23,970 Call option on British Pound Sterling 600,000 3/97 1.69GBP 11,040 20,004 Call option on British Pound Sterling 200,000 3/97 1.71GBP 3,906 6,220 Call option on Morocco (Kingdom of) Loan Participation Agreement, Tranche A, 6.437%, 1/1/09 990,000 1/97 79.88% 10,791 29,700 Call option on New Zealand Dollar 205,700 3/97 1.4194NZD 1,327 1,483 Call option on New Zealand Dollar 573,000 3/97 1.4124NZD 3,782 3,364 Call option on New Zealand Dollar 91,500 3/97 1.4276NZD 640 866 ------- ------- $42,285 $85,670 ------- ------- ------- -------
16 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) 10. Non-income producing--issuer is in default of interest payment. 11. Units may be comprised of several components, such as debt and equity and/or warrants to purchase equity at some point in the future. For units which represent debt securities, principal amount disclosed represents total underlying principal. 12. Securities with an aggregate market value of $104,535 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See applicable note of Notes to Financial Statements. 13. A sufficient amount of securities has been designated to cover outstanding forward foreign currency exchange contracts. See applicable note of Notes to Financial Statements. 14. Non-income producing security. 15. Interest or dividend is paid in kind. See accompanying Notes to Financial Statements. 17 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1996 PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ SHORT-TERM NOTES - 0.2% - ------------------------------------------------------------------------------------------------------------------ General Motors Acceptance Corp., 7.75%, 4/15/97 (Cost $733,498) $ 700,000 $ 733,498 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ MORTGAGE-BACKED OBLIGATIONS - 26.2% - ------------------------------------------------------------------------------------------------------------------ GOVERNMENT AGENCY - 18.9% - ------------------------------------------------------------------------------------------------------------------ FHLMC/FNMA/SPONSORED - 13.2% -------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp.: Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates: Series 1712, Cl. B, 6%, 3/15/09 1,000,000 928,430 Series 1714, Cl. M, 7%, 8/15/23 2,000,000 1,898,740 7%, 4/1/26 5,078,575 4,985,942 Interest-Only Stripped Mtg.-Backed Security, Trust 177, Cl. B: 14.13%, 7/1/26 (2) 6,902,607 2,409,441 14.341%, 7/15/26 (2) 3,155,477 1,101,459 -------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: 6.50%, 3/1/11 928,945 912,281 7%, 11/1/25 1,839,735 1,800,733 7%, 11/1/25 7,646,654 7,484,545 7%, 4/1/04 404,189 408,094 7.50%, 1/1/08 344,370 350,324 7.50%, 1/1/26 4,860,349 4,864,772 7.50%, 1/15/27 (3) 23,200,000 23,185,616 7.50%, 4/1/08 269,575 274,237 8%, 5/1/17 784,672 811,021 Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates: 8.75%, 11/25/05 3,000,000 3,124,680 10.40%, 4/25/19 1,565,940 1,689,258 ------------ 56,229,573 - ------------------------------------------------------------------------------------------------------------------ GNMA/GUARANTEED - 5.7% -------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn.: 6%, 10/20/25 4,710,209 4,818,403 7%, 1/15/09-10/20/24 9,630,297 9,582,739 7.50%, 7/15/26 9,903,936 9,915,128 ------------ 24,316,270 - ------------------------------------------------------------------------------------------------------------------ PRIVATE - 7.3% - ------------------------------------------------------------------------------------------------------------------ COMMERCIAL - 6.0% -------------------------------------------------------------------------------------------------------------- Commercial Mortgage Acceptance Corp., Collateralized Mtg. Obligation, Series 1996-C1, Cl. D, 7.605%, 12/25/20 (4)(5) 2,500,000 2,515,625 -------------------------------------------------------------------------------------------------------------- Criimi Mae Financial Corp., Collateralized Mtg. Obligations, Trust I, Cl. A-2, 7.56%, 8/30/05 (4) 2,000,000 1,996,250 -------------------------------------------------------------------------------------------------------------- FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit Pass- Through Certificates, Series 1994-C1: Cl. 2-D, 8.70%, 9/25/25 (5) 1,500,000 1,580,156 Cl. 2-E, 8.70%, 9/25/25 (5) 1,500,000 1,573,594
18 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------ COMMERCIAL (CONTINUED) -------------------------------------------------------------------------------------------------------------- Merrill Lynch Mortgage Investors, Inc., Mtg. Pass- Through Certificates, Series 1995-C2, Cl. C, 7.629%, 6/15/21 (4) $ 894,334 $ 905,164 -------------------------------------------------------------------------------------------------------------- Morgan Stanley Capital I, Inc., Commercial Mtg. Pass- Through Certificates, Series 1996-C1, Cl. D-1, 7.51%, 2/15/28 (4)(5) 1,000,000 983,125 -------------------------------------------------------------------------------------------------------------- NationsCommercial Corp., NB Commercial Mtg. Pass-Through Certificates, Series-DMC: Cl. B, 8.562%, 8/12/11 (5) 1,600,000 1,629,750 Cl. C, 8.921%, 8/12/11 (5) 3,500,000 3,563,437 -------------------------------------------------------------------------------------------------------------- Potomac Gurnee Financial Corp., Commercial Mtg. Pass- Through Certificates: Cl. C, 7.217%, 12/21/26 250,000 250,078 Cl. D, 7.685%, 12/21/26 500,000 500,156 -------------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates: Series 1992-CHF, Cl. C, 8.25%, 12/25/20 1,008,390 1,019,735 Series 1994-C1, Cl. C, 8%, 6/25/26 1,500,000 1,542,422 Series 1995-C1, Cl. D, 6.90%, 2/25/27 3,000,000 2,827,266 -------------------------------------------------------------------------------------------------------------- Structured Asset Securities Corp., Multiclass Pass-Through Certificates: Series 1996-C3, Cl. C, 7.375%, 6/25/30 (4)(5) 3,000,000 2,992,500 Series 1996-CFL, Cl. D, 7.034%, 2/25/28 1,800,000 1,784,250 ------------- 25,663,508 - ------------------------------------------------------------------------------------------------------------------ MANUFACTURED HOUSING - 0.2% -------------------------------------------------------------------------------------------------------------- Green Tree Financial Corp., Series 1994-6, Cl. A3, 7.70%, 1/15/20 1,000,000 1,015,620 - ------------------------------------------------------------------------------------------------------------------ MULTI-FAMILY - 0.8% -------------------------------------------------------------------------------------------------------------- Countrywide Funding Corp., Series 1993-12, Cl. B1, 6.625%, 2/25/24 1,000,000 917,109 -------------------------------------------------------------------------------------------------------------- Merrill Lynch Trust, Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 43, Cl. E, 6.50%, 8/27/15 500,000 485,465 -------------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1991-M5, Cl. A, 9%, 3/25/17 1,846,874 1,903,146 ------------- 3,305,720 - ------------------------------------------------------------------------------------------------------------------ OTHER - 0.1% -------------------------------------------------------------------------------------------------------------- GE Capital Mortgage Services, Inc., Series 1994-14, Cl. A1, 6.50%, 4/25/24 141,512 141,070 -------------------------------------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VI: Interest-Only Stripped Mtg.-Backed Security, Series 1987-3, Cl. B: 6.113%, 10/23/17 (2) 98,443 31,871 6.113%, 10/23/17 (2) 34,999 11,331 Principal-Only Stripped Mtg.-Backed Security, Series 1987-3, Cl. A, Zero Coupon: 9.543%, 10/23/17 (6) 143,993 100,480 8.411%, 10/23/17 (6) 51,121 35,673 ------------ 320,425
19 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ RESIDENTIAL - 0.2% -------------------------------------------------------------------------------------------------------------- Contimortgage Home Equity Loan Trust, Series 1995-2, Cl. A2, 7.95%, 4/15/10 $ 547,848 $ 552,813 -------------------------------------------------------------------------------------------------------------- Ryland Mortgage Securities Corp. III, Sub. Bonds, Series 1992-A, Cl. 1A, 8.285%, 3/29/30 (4) 378,157 378,040 ------------ 930,853 ------------ Total Mortgage-Backed Obligations (Cost $110,759,887) 111,781,969 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ U.S. GOVERNMENT OBLIGATIONS - 38.8% - ------------------------------------------------------------------------------------------------------------------ U.S. Treasury Bonds: 10.375%, 11/15/09-11/15/12 1,000,000 1,262,188 12.75%, 11/15/10 1,000,000 1,415,938 6.75%, 8/15/26 5,000,000 5,035,940 6.875%, 8/15/25 3,500,000 3,567,816 7.125%, 2/15/23 4,500,000 4,696,879 7.50%, 11/15/16 9,200,000 9,959,008 8%, 11/15/21 5,000,000 5,732,815 8.125%, 8/15/19 2,800,000 3,236,626 8.875%, 8/15/17 1,500,000 1,852,032 9.25%, 2/15/16 1,000,000 1,269,063 STRIPS, Zero Coupon: 7.144%, 5/15/15 (7) 1,500,000 432,256 7.142%, 8/15/14 (7) 5,000,000 1,520,869 -------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts.: 5.125%, 11/30/98 500,000 493,125 5.75%, 8/15/03 470,000 456,047 5.875%, 4/30/98 2,500,000 2,498,440 6%, 8/31/97-12/31/97 26,000,000 26,032,524 6.375%, 6/30/97 (8) 1,000,000 1,003,751 6.375%, 3/31/01-8/15/02 2,000,000 2,013,752 6.50%, 4/30/99-10/15/06 31,500,000 31,715,643 6.75%, 6/30/99 (9) 22,150,000 22,544,557 6.875%, 3/31/00 500,000 511,407 7.25%, 5/15/04 1,000,000 1,052,813 7.25%, 8/15/04 (10) 12,750,000 13,427,355 7.375%, 11/15/97 2,000,000 2,023,752 7.50%, 11/15/01-2/15/05 15,150,000 16,157,358 7.875%, 11/15/04 2,000,000 2,183,126 8.50%, 5/15/97-7/15/97 1,000,000 1,012,500 9.25%, 8/15/98 (8) 2,000,000 2,101,252 ------------- Total U.S. Government Obligations (Cost $162,639,776) 165,208,832 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ FOREIGN GOVERNMENT OBLIGATIONS - 15.4% - ------------------------------------------------------------------------------------------------------------------ Bonos de la Tesoreria de la Federacion, Zero Coupon: 25.785%, 11/6/97 (7)MXP 8,000,000 833,280 24.602%, 12/4/97 (7)MXP 9,915,000 1,015,679 37.786%, 3/6/97 (7)MXP 5,300,000 643,949
20 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------ FOREIGN GOVERNMENT OBLIGATIONS - 15.4% - ------------------------------------------------------------------------------------------------------------------ Bonos de la Tesoreria de la Federacion, Zero Coupon: 28.589%, 7/31/97 (7)MXP 5,200,000 $ 574,528 27.799%, 9/4/97 (7)MXP 6,820,000 740,780 -------------------------------------------------------------------------------------------------------------- Canada (Government of) Debs., 10.50%, 7/1/00 CAD 5,180,000 4,433,139 -------------------------------------------------------------------------------------------------------------- Corporacion Andina de Fomento Sr. Unsec. Debs.: 6.625%, 10/14/98 (11) 1,000,000 1,004,050 7.25%, 4/30/98 (11) 1,000,000 1,012,425 -------------------------------------------------------------------------------------------------------------- Denmark (Kingdom of) Bonds, 8%, 11/15/01 DKK 26,800,000 5,042,968 -------------------------------------------------------------------------------------------------------------- Financiera Energetica Nacional SA: Eurobonds, 9.375%, 6/15/06 (11) 2,350,000 2,507,744 Nts., 9.375%, 6/15/06 700,000 746,987 -------------------------------------------------------------------------------------------------------------- Germany (Republic of) Bonds, Series 90, 8.50%, 8/21/00 DEM 4,500,000 3,318,552 -------------------------------------------------------------------------------------------------------------- Italy (Republic of): Sr. Unsec. Unsub. Global Bonds, 0.563%, 7/26/99 (4)JPY 434,000,000 3,758,566 Treasury Bonds, Buoni del Tesoro Poliennali, 10.50%, 11/1/98 ITL 3,425,000,000 2,412,175 -------------------------------------------------------------------------------------------------------------- Landesbank Rheinland-Pfalz-Girozentrale Bonds, 5.75%, 10/16/03 DEM 3,400,000 2,229,975 -------------------------------------------------------------------------------------------------------------- Netherlands (Government of) Bonds, 8.75%, 9/15/01 NLG 900,000 608,503 -------------------------------------------------------------------------------------------------------------- New Zealand (Government of): Bonds, 8%, 4/15/04 NZD 1,345,000 992,717 Index Linked Bonds, 4.60%, 2/15/16 (4)NZD 333,000 230,518 -------------------------------------------------------------------------------------------------------------- Norwegian Government Bonds, 9.50%, 10/31/02 NOK 17,135,000 3,205,142 -------------------------------------------------------------------------------------------------------------- Ontario, Canada (Province of) Bonds, 8%, 10/17/01 750,000 797,737 -------------------------------------------------------------------------------------------------------------- Poland (Republic of) Disc. Bonds, 6.50%, 10/27/24 (4) 7,250,000 7,059,687 -------------------------------------------------------------------------------------------------------------- Portugal (Republic of) Gtd. Bonds, Obrigicion do tes Medio Prazo, 11.625%, 2/23/98 PTE 259,000,000 1,769,583 -------------------------------------------------------------------------------------------------------------- South Africa (Republic of) Debs., 9.625%, 12/15/99 1,000,000 1,066,250 -------------------------------------------------------------------------------------------------------------- Sweden (Kingdom of) Bonds, Series 1030, 13%, 6/15/01 SEK 5,200,000 981,896 -------------------------------------------------------------------------------------------------------------- Telkom SA Ltd. Bonds, Series TK05, 12%, 3/31/98 ZAR 2,390,000 486,614 -------------------------------------------------------------------------------------------------------------- Treasury Corp. of Victoria Gtd. Bonds, 12%, 9/22/01 AUD 2,885,000 2,740,252 -------------------------------------------------------------------------------------------------------------- United Kingdom Treasury Nts., 12.50%, 11/21/05 GBP 3,365,000 7,302,580 -------------------------------------------------------------------------------------------------------------- United Mexican States Bonds, 7.688%, 8/6/01 (4)(11) 8,000,000 8,030,000 ------------- Total Foreign Government Obligations (Cost $64,734,768) 65,546,276 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ LOAN PARTICIPATIONS - 0.3% - ------------------------------------------------------------------------------------------------------------------ Colombia (Republic of) 1989-1990 Integrated Loan Facility Bonds, 6.563%, 7/1/01 (Cost $1,335,840) (4)(5) 1,428,800 1,364,504 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ MUNICIPAL BONDS AND NOTES - 0.4% - ------------------------------------------------------------------------------------------------------------------ Dade County, FL Educational Facilities Authority: Exchangeable Revenue Bonds, University of Miami, Prerefunded, MBIA Insured, 7.65%, 4/1/10 175,000 195,919 Revenue Bonds, University of Miami, MBIA Insured, 7.65%, 4/1/10 205,000 226,960
21 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------ MUNICIPAL BONDS AND NOTES (CONTINUED) - ------------------------------------------------------------------------------------------------------------------ Dade County, FL Educational Facilities Authority: (Continued) Taxable Exchange Revenue Bonds, University of Miami, MBIA Insured, 9.70%, 4/1/10 $ 120,000 $ 132,854 -------------------------------------------------------------------------------------------------------------- Pinole, CA Redevelopment Agency Tax Allocation Taxable Bonds, Pinole Vista Redevelopment, Series B, 8.35%, 8/1/17 670,000 702,703 -------------------------------------------------------------------------------------------------------------- Port of Portland, OR Special Obligation Taxable Revenue Bonds, PAMCO Project, 9.20%, 5/15/22 500,000 567,900 ---------- Total Municipal Bonds and Notes (Cost $1,664,053) 1,826,336 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ CORPORATE BONDS AND NOTES - 18.2% - ------------------------------------------------------------------------------------------------------------------ BASIC INDUSTRY - 1.3% - ------------------------------------------------------------------------------------------------------------------ CHEMICALS - 0.6% -------------------------------------------------------------------------------------------------------------- Lyondell Petrochemical Co., 8.25% Nts., 3/15/97 262,000 263,155 -------------------------------------------------------------------------------------------------------------- Quantum Chemical Corp., 10.375% First Mtg. Nts., 6/1/03 2,100,000 2,282,357 ---------- 2,545,512 - ------------------------------------------------------------------------------------------------------------------ PAPER - 0.7% -------------------------------------------------------------------------------------------------------------- Boise Cascade Corp., 9.90% Nts., 3/15/00 750,000 816,983 -------------------------------------------------------------------------------------------------------------- Potlatch Corp., 9.46% Medium-Term Nts., 4/2/02 500,000 560,402 -------------------------------------------------------------------------------------------------------------- Scotia Pacific Holding Co., 7.95% Timber Collateralized Nts., 7/20/15 1,484,210 1,488,992 ---------- 2,866,377 - ------------------------------------------------------------------------------------------------------------------ CONSUMER RELATED - 1.4% - ------------------------------------------------------------------------------------------------------------------ CONSUMER PRODUCTS - 0.6% -------------------------------------------------------------------------------------------------------------- Fletcher Challenge Capital Canada, Inc., 7.75% Nts., 6/20/06 1,800,000 1,868,207 -------------------------------------------------------------------------------------------------------------- Procter & Gamble Co., 9.36% Debs., 1/1/21 500,000 609,486 ---------- 2,477,693 - ------------------------------------------------------------------------------------------------------------------ FOOD/BEVERAGES/TOBACCO - 0.2% -------------------------------------------------------------------------------------------------------------- Bass America, Inc., 6.75% Gtd. Nts., 8/1/99 750,000 756,647 - ------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 0.3% -------------------------------------------------------------------------------------------------------------- Roche Holdings, Inc., 2.75% Bonds, 4/14/00 1,250,000 1,137,500 - ------------------------------------------------------------------------------------------------------------------ HOTEL/GAMING - 0.1% -------------------------------------------------------------------------------------------------------------- Circus Circus Enterprises, Inc., 6.75% Nts., 7/15/03 375,000 370,134 - ------------------------------------------------------------------------------------------------------------------ TEXTILE/APPAREL - 0.2% -------------------------------------------------------------------------------------------------------------- Fruit of the Loom, Inc., 7% Debs., 3/15/11 1,097,000 1,021,576 - ------------------------------------------------------------------------------------------------------------------ ENERGY - 2.0% - ------------------------------------------------------------------------------------------------------------------ BP America, Inc., 10.875% Nts., 8/1/01 CAD 650,000 570,554 -------------------------------------------------------------------------------------------------------------- Coastal Corp.: 8.75% Sr. Nts., 5/15/99 500,000 524,372 9.75% Sr. Debs., 8/1/03 200,000 229,281 -------------------------------------------------------------------------------------------------------------- Colorado International Gas Corp., 10% Sr. Debs., 6/15/05 500,000 592,560 -------------------------------------------------------------------------------------------------------------- Eastern Energy Ltd., 6.75% Nts., 12/1/06 (5) 2,000,000 1,950,000 -------------------------------------------------------------------------------------------------------------- Enron Corp., 9.875% Debs., 6/15/03 375,000 434,551 -------------------------------------------------------------------------------------------------------------- HNG Internorth/Enron Corp., 9.625% Debs., 3/15/06 500,000 587,111 -------------------------------------------------------------------------------------------------------------- McDermott, Inc., 9.375% Nts., 3/15/02 400,000 421,403
22 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------ ENERGY (CONTINUED) - ------------------------------------------------------------------------------------------------------------------ Mitchell Energy & Development Corp., 9.25% Sr. Nts., 1/15/02 $ 1,000,000 $ 1,072,891 -------------------------------------------------------------------------------------------------------------- Southwest Gas Corp., 9.75% Debs., Series F, 6/15/02 500,000 557,007 -------------------------------------------------------------------------------------------------------------- Texaco Capital, Inc., 8.875% Gtd. Debs., 9/1/21 500,000 590,300 -------------------------------------------------------------------------------------------------------------- TransCanada PipeLines Ltd., 9.875% Debs., 1/1/21 750,000 940,815 ------------ 8,470,845 - ------------------------------------------------------------------------------------------------------------------ FINANCIAL SERVICES - 6.7% - ------------------------------------------------------------------------------------------------------------------ BANKS & THRIFTS - 3.8% -------------------------------------------------------------------------------------------------------------- Banco Ganadero SA, 9.75% Sr. Unsec. Unsub. Nts., 8/26/99 (11) 250,000 264,375 -------------------------------------------------------------------------------------------------------------- BankAmerica Corp., 7.75% Sub. Nts., 7/15/02 750,000 785,092 -------------------------------------------------------------------------------------------------------------- BankAmerica Institute, 8.07% Gtd. Bonds, Series A, 12/31/26 (5) 2,000,000 2,024,600 -------------------------------------------------------------------------------------------------------------- Chase Malaysia, Zero Coupon Nts.: 7.203%, 4/23/97 (7)MYR 2,125,000 823,667 7.202%, 4/25/97 (7)MYR 475,000 184,041 -------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New), 10.125% Sub. Nts., 11/1/00 750,000 839,884 -------------------------------------------------------------------------------------------------------------- Citibank Malaysia Banker's Acceptance, Zero Coupon Negotiable CD: 7.19%, 4/28/97 (7)MYR 600,000 232,371 7.169%, 4/30/97 (7)MYR 400,000 154,853 7.121%, 5/26/97 (3)(7)MYR 1,439,000 554,225 -------------------------------------------------------------------------------------------------------------- Citicorp Capital Trust I, 7.933% Gtd. Bonds, 2/15/27 2,000,000 2,026,200 -------------------------------------------------------------------------------------------------------------- Deutsche Bank Financial, Inc., 6.70% Gtd. Nts., 12/13/06 2,000,000 1,982,500 -------------------------------------------------------------------------------------------------------------- First Chicago Corp.: 11.25% Sub. Nts., 2/20/01 750,000 871,756 9% Sub. Nts., 6/15/99 150,000 159,024 -------------------------------------------------------------------------------------------------------------- First Fidelity Bancorporation, 8.50% Sub. Capital Nts., 4/1/98 850,000 872,074 -------------------------------------------------------------------------------------------------------------- PT Hutama Karya, Zero Coupon Medium-Term Nts., 15.103%, 4/15/97 (7)IDR 2,500,000,000 1,013,588 -------------------------------------------------------------------------------------------------------------- Standard Charter Berhad Banker's Acceptance, Zero Coupon Negotiable CD, 7.313%, 4/4/97 (7)MYR 2,270,000 883,179 -------------------------------------------------------------------------------------------------------------- Suntrust Banks, Inc., 8.875% Debs., 2/1/98 500,000 514,460 -------------------------------------------------------------------------------------------------------------- Swiss Bank Corp., 7.25% Sub. Nts., 9/1/06 2,000,000 2,035,610 ------------ 16,221,499 - ------------------------------------------------------------------------------------------------------------------ DIVERSIFIED FINANCIAL - 2.6% -------------------------------------------------------------------------------------------------------------- Allied-Lyons Finance BV, 6.50% Debs., 8/26/97 500,000 501,325 -------------------------------------------------------------------------------------------------------------- American Car Line Co., 8.25% Equipment Trust Certificates, Series 1993-A, 4/15/08 578,000 591,416 -------------------------------------------------------------------------------------------------------------- American General Finance Corp., 5.875% Sr. Nts., 7/1/00 196,000 192,315 -------------------------------------------------------------------------------------------------------------- Associates Corp. of North America, 8.625% Sr. Nts., 6/15/97 500,000 506,450 -------------------------------------------------------------------------------------------------------------- Countrywide Funding Corp., 6.57% Gtd. Medium-Term Nts., Series A, 8/4/97 196,000 196,970 -------------------------------------------------------------------------------------------------------------- Fleet Mtg. Group, Inc., 6.50% Nts., 9/15/99 500,000 501,476 -------------------------------------------------------------------------------------------------------------- Ford Motor Credit Co., 6.75% Nts., 8/15/08 1,000,000 967,526
23 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------ DIVERSIFIED FINANCIAL (CONTINUED) -------------------------------------------------------------------------------------------------------------- Golden West Financial Corp.: 10.25% Sub. Nts., 5/15/97 $ 131,000 $ 133,058 8.625% Sub. Nts., 8/30/98 250,000 259,376 -------------------------------------------------------------------------------------------------------------- Household Finance Corp., 8.95% Debs., 9/15/99 500,000 531,395 -------------------------------------------------------------------------------------------------------------- Household International BV, 6% Gtd. Sr. Nts., 3/15/99 131,000 129,772 -------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 6.875% Nts., 3/1/03 750,000 750,541 -------------------------------------------------------------------------------------------------------------- Morgan Stanley Group, Inc., 7% Debs., 10/1/13 1,000,000 965,282 -------------------------------------------------------------------------------------------------------------- Norsk Hydro AS, 8.75% Bonds, 10/23/01 1,000,000 1,087,500 -------------------------------------------------------------------------------------------------------------- Penske Truck Leasing Co. LP, 7.75% Sr. Nts., 5/15/99 1,000,000 1,033,717 -------------------------------------------------------------------------------------------------------------- PHH Corp., 6.50% Nts., 2/1/00 500,000 501,017 -------------------------------------------------------------------------------------------------------------- Smith Barney Holdings, Inc. (New), 7.50% Nts., 5/1/02 750,000 772,693 -------------------------------------------------------------------------------------------------------------- U.S. Leasing International, Inc.: 7% Nts., 11/1/97 750,000 756,631 6.625% Sr. Nts., 5/15/03 750,000 740,557 ----------- 11,119,017 - ------------------------------------------------------------------------------------------------------------------ INSURANCE - 0.3% -------------------------------------------------------------------------------------------------------------- Aetna Services, Inc., 7.125% Nts., 8/15/06 1,000,000 1,005,660 -------------------------------------------------------------------------------------------------------------- SunAmerica, Inc., 9% Sr. Nts., 1/15/99 196,000 205,105 ---------- 1,210,765 - ------------------------------------------------------------------------------------------------------------------ MANUFACTURING - 0.4% - ------------------------------------------------------------------------------------------------------------------ AEROSPACE/ELECTRONICS/COMPUTERS - 0.2% -------------------------------------------------------------------------------------------------------------- British Aerospace plc, 8% Debs., 5/27/97 1,000,000 1,008,125 - ------------------------------------------------------------------------------------------------------------------ AUTOMOTIVE - 0.2% -------------------------------------------------------------------------------------------------------------- Chrysler Corp., 10.95% Debs., 8/1/17 800,000 861,408 - ------------------------------------------------------------------------------------------------------------------ MEDIA - 2.5% - ----------------------------------------------------------------------------------------------------------------- CABLE TELEVISION - 1.3% ------------------------------------------------------------------------------------------------------------- Cablevision Industries Corp., 9.25% Sr. Debs., Series B, 4/1/08 3,000,000 3,185,535 ------------------------------------------------------------------------------------------------------------- TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 2,200,000 2,380,455 --------- 5,565,990 - ----------------------------------------------------------------------------------------------------------------- DIVERSIFIED MEDIA - 0.8% -------------------------------------------------------------------------------------------------------------- GSPI Corp., 10.15% First Mtg. Bonds, 6/24/10 (11) 1,132,126 1,065,229 -------------------------------------------------------------------------------------------------------------- News America Holdings, Inc., 10.125% Sr. Gtd. Debs., 10/15/12 500,000 576,731 -------------------------------------------------------------------------------------------------------------- Time Warner Entertainment LP/Time Warner, Inc., 8.375% Sr. Debs., 3/15/23 1,850,000 1,885,505 --------- 3,527,465 - ----------------------------------------------------------------------------------------------------------------- ENTERTAINMENT/FILM - 0.1% -------------------------------------------------------------------------------------------------------------- Columbia Pictures Entertainment, Inc., 9.875% Sr. Sub. Nts., 2/1/98 500,000 519,416 - ----------------------------------------------------------------------------------------------------------------- PUBLISHING/PRINTING - 0.3% -------------------------------------------------------------------------------------------------------------- Reed Elsevier, Inc., 6.625% Nts., 10/15/23 (11) 600,000 536,664 -------------------------------------------------------------------------------------------------------------- Reed Publishing (USA), Inc.: 7.24% Gtd. Medium-Term Nts., 2/10/97 500,000 500,720 7.66% Medium-Term Nts., 2/19/99 500,000 514,000 --------- 1,551,384
24 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------ OTHER - 0.8% - ------------------------------------------------------------------------------------------------------------------ CONGLOMERATES - 0.3% -------------------------------------------------------------------------------------------------------------- Tenneco, Inc. (New): 10.20% Exchangeable Debs., 3/15/08 $ 400,000 $ 481,083 8.075% Nts., 10/1/02 650,000 691,313 ---------- 1,172,396 - ----------------------------------------------------------------------------------------------------------------- SERVICES - 0.5% -------------------------------------------------------------------------------------------------------------- Archer Daniels Midland Co., 7.125% Debs., 3/1/13 750,000 747,339 -------------------------------------------------------------------------------------------------------------- Johnson Controls, Inc., 7.70% Debs., 3/1/15 500,000 526,784 -------------------------------------------------------------------------------------------------------------- Laidlaw, Inc., 7.70% Debs., 8/15/02 500,000 519,856 -------------------------------------------------------------------------------------------------------------- Philip Morris Cos., 8.25% Debs., 10/15/03 500,000 531,468 ---------- 2,325,447 - ----------------------------------------------------------------------------------------------------------------- RETAIL - 0.1% - ----------------------------------------------------------------------------------------------------------------- Hook-SupeRx, Inc., 10.125% Sr. Nts., 6/1/02 600,000 637,279 - ----------------------------------------------------------------------------------------------------------------- TRANSPORTATION - 0.3% - ----------------------------------------------------------------------------------------------------------------- Kansas City Southern Industries, Inc., 6.625% Nts., 3/1/05 750,000 729,815 -------------------------------------------------------------------------------------------------------------- Union Pacific Corp., 9.65% Medium-Term Nts., 4/17/00 400,000 436,784 ---------- 1,166,599 - ----------------------------------------------------------------------------------------------------------------- UTILITIES - 2.7% - ----------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES - 1.1% -------------------------------------------------------------------------------------------------------------- Consolidated Natural Gas Co., 6.625% Debs., 12/1/13 1,000,000 952,257 -------------------------------------------------------------------------------------------------------------- Long Island Lighting Co., 7% Nts., 3/1/04 150,000 144,488 -------------------------------------------------------------------------------------------------------------- Midwest Power Systems, Inc., 7% General Mtg. Bonds, 2/15/05 500,000 501,363 -------------------------------------------------------------------------------------------------------------- National Fuel Gas Co., 7.75% Debs., 2/1/04 500,000 520,030 -------------------------------------------------------------------------------------------------------------- Public Service Co. of Colorado, 8.75% First Mtg. Bonds, 3/1/22 750,000 810,742 -------------------------------------------------------------------------------------------------------------- South Carolina Electric & Gas Co., 9% Mtg. Bonds, 7/15/06 500,000 564,942 -------------------------------------------------------------------------------------------------------------- Texas Gas Transmission Corp., 8.625% Nts., 4/1/04 500,000 546,702 -------------------------------------------------------------------------------------------------------------- Washington Gas Light Co., 8.75% First Mtg. Bonds, 7/1/19 500,000 527,895 ---------- 4,568,419 - ----------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 1.6% -------------------------------------------------------------------------------------------------------------- 360 Communications Co.: 7.125% Sr. Nts., 3/1/03 1,450,000 1,435,278 7.50% Sr. Nts., 3/1/06 2,000,000 1,987,418 -------------------------------------------------------------------------------------------------------------- Alltel Corp., 6.50% Debs., 11/1/13 1,000,000 918,925 -------------------------------------------------------------------------------------------------------------- GTE Corp.: 8.85% Debs., 3/1/98 750,000 772,672 9.375% Debs., 12/1/00 500,000 549,396 -------------------------------------------------------------------------------------------------------------- Northern Telecom Ltd., 6.875% Nts., 10/1/02 500,000 506,280 -------------------------------------------------------------------------------------------------------------- United Telephone Co. (Pennsylvania), 7.375% First Mtg. Nts., Series Y, 12/1/02 500,000 511,806 ---------- 6,681,775 ---------- Total Corporate Bonds and Notes (Cost $77,541,108) 77,783,268
25 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE1) - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 1.0% Allstate Financing I, 7.95% Gtd. Quarterly Income Preferred Securities, Series A 120,000 $ 3,000,000 ------------------------------------------------------------------------------------------------------------- BankAmerica Corp., 8.375%, Series K 45,400 1,146,350 ----------- Total Preferred Stocks (Cost $4,177,404) 4,146,350 Principal Amount(1) - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 2.8% - ----------------------------------------------------------------------------------------------------------------- Bayerische Landesbank Girozentrale, New York Branch, 6.28% Deutsche Mark Currency Protected Yield Curve CD, 7/25/97 $ 150,000 149,475 -------------------------------------------------------------------------------------------------------------- Canadian Imperial Bank of Commerce, New York Branch, 13.50% Greek Drachma/Swiss Franc Linked Nts., 2/5/97 250,000 253,025 -------------------------------------------------------------------------------------------------------------- Deutsche Bank AG, New York Branch, Czech Koruna Linked Nts., Zero Coupon Debs., 12.548%, 2/3/97 (7)CZK 11,000,000 399,905 -------------------------------------------------------------------------------------------------------------- ING (U.S.) Financial Holdings Corp., Zero Coupon: Chilean Peso Linked Nts., with Chilean Sovereign Risk, 9.05%, 3/12/97 (7) 768,639 748,040 Korean Won/U.S. Dollar Linked Nts., 10.87%, 6/9/97 (7) 500,000 464,900 Nts. Linked to the Greek Drachma/Swiss Franc Exchange Rate: 14.829%, 12/4/97 (7) 1,000,000 848,400 14.437%, 12/10/97 (7) 1,150,000 980,720 -------------------------------------------------------------------------------------------------------------- Internationale Nederlanden (U.S.) Capital Holdings Corp., Zero Coupon Chilean Peso Linked Nts.: 11.813%, 6/23/97 (7) 900,000 823,860 11.741%, 6/24/97 (7) 900,000 823,590 -------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings: U.S. Dollar Nts. Linked to Czech Koruna/Swiss Franc, 15%, 12/21/98 500,000 499,600 Zero Coupon Greek Drachma/Swiss Franc Linked Nts., 16.93%, 1/13/97 (7) 800,000 815,600 Zero Coupon U.S. Dollar Nts. Linked to: (7) 1,000,000 1,001,800 Czech Koruna/Swiss Franc, 15.411%, 12/29/97 Greek Drachma/Swiss Franc: 15.639%, 12/23/97 (7) 500,000 498,300 15.453%, 12/26/97 (7) 500,000 499,300 15.323%, 12/30/97 (7) 1,000,000 1,000,000 ------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., Units, 9.75%, 6/15/99 (representing debt of Chemical Banking Corp., sub. capital nts., and equity of Citicorp, 7.75% preferred, series 22) (5)(12) 1,000,000 1,188,000 ------------------------------------------------------------------------------------------------------------- Swiss Bank Corp., New York Branch, 6.05% CD, 6/20/97 (indexed to the closing Nikkei 225 Index on 1/23/97, 5 yr. & 3 mos. Japanese Yen Swap rate & New Zealand Dollar) 800,000 816,400 ---------- Total Structured Instruments (Cost $11,812,162) 11,810,915
26 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE DATE STRIKE CONTRACTS (NOTE 1) - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- PUT OPTIONS PURCHASED - 0.0% - ------------------------------------------------------------------------------------------------------------------------------- Australian Dollar Put Opt. 1/97 1.28AUD 1,675,000 $ 2,261 --------------------------------------------------------------------------------------------------------------------------- Australian Dollar Put Opt. 2/97 1.282AUD 1,670,000 4,425 --------------------------------------------------------------------------------------------------------------------------- Deutsche Mark Put Opt. 2/97 1.545DEM 17,350,000 95,356 --------------------------------------------------------------------------------------------------------------------------- Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali, 9.50%, 2/1/06 Put Opt. 7/97 99.96%ITL 1,700 1,190 --------------------------------------------------------------------------------------------------------------------------- Japanese Yen Put Opt. 3/97 115JPY 437,500,000 60,375 --------------------------------------------------------------------------------------------------------------------------- New Zealand Dollar Put Opt. 3/97 1.4286NZD 1,414,500 8,544 --------------------------------------------------------------------------------------------------------------------------- New Zealand Dollar Put Opt. 3/97 1.44NZD 226,300 824 --------------------------------------------------------------------------------------------------------------------------- New Zealand Dollar Put Opt. 3/97 1.453NZD 100,500 231 -------- Total Put Options Purchased (Cost $294,450) 173,206 PRINCIPAL AMOUNT(1) - ------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT - 3.3% - ------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with Goldman, Sachs & Co., 6.52%, dated 12/31/96, to be repurchased at $14,005,071 on 1/2/97, collateralized by U.S. Treasury Nts., 5.50%-7.50%, 7/15/99-8/15/05, with a value of $14,320,992 (Cost $14,000,000) $ 14,000,000 14,000,000 --------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $449,692,946) 106.6% 454,375,154 --------------------------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (6.6) (27,936,209) ------------------------------- NET ASSETS 100.0% $ 426,438,945 ------------------------------- ------------------------------- 1. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: AUD - Australian Dollar MXP - Mexican Peso CAD - Canadian Dollar MYR - Malaysian Ringgit CZK - Czech Koruna NLG - Netherlands Guilder DEM - German Deutsche Mark NOK - Norwegian Krone DKK - Danish Krone NZD - New Zealand Dollar GBP - British Pound Sterling PTE - Portuguese Escudo IDR - Indonesian Rupiah SEK - Swedish Krona ITL - Italian Lira ZAR - South African Rand JPY - Japanese Yen 2. 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. 3. When-issued security to be delivered and settled after December 31, 1996. 4. Represents the current interest rate for a variable rate security. 5. Identifies issues considered to be illiquid - See applicable note of Notes to Financial Statements.
27 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) 6. Principal-Only Strips represent the right to receive the monthly principal payments on an underlying pool of mortgage loans. The value of these securities generally increases as interest rates decline and prepayment rates rise. The price of these securities is typically more volatile than that of coupon-bearing bonds of the same maturity. Interest rates disclosed represent current yields based upon the current cost basis and estimated timing of future cash flows. 7. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 8. Securities with an aggregate market value of $3,105,003 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See applicable note of Notes to Financial Statements. 9. A sufficient amount of securities has been designated to cover outstanding written call options, as follows: CONTRACTS SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED (NOTE 1) ------------------------------------------------------------------------------------------------------------------ Call option on Australian Dollar 1,363,450 1/97 1.2285AUD $ 8,794 $ 136 Call option on British Pound Sterling 495,000 1/97 1.632GBP 11,147 39,550 Call option on British Pound Sterling 1,800,000 3/97 1.69GBP 33,120 60,012 Call option on British Pound Sterling 800,000 3/97 1.71GBP 15,624 24,880 Call option on New Zealand Dollar 1,414,500 3/97 1.4124NZD 9,336 8,303 Call option on New Zealand Dollar 226,300 3/97 1.4194NZD 1,460 1,632 Call option on New Zealand Dollar 100,500 3/97 1.4276NZD 703 952 ---------- --------- $ 80,184 $ 135,465 ---------- --------- ---------- --------- 10. A sufficient amount of securities has been designated to cover outstanding forward foreign currency exchange contracts. See applicable note of Notes to Financial Statements. 11. 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 $14,420,487 or 3.38% of the Fund's net assets, at December 31, 1996. 12. Units may be comprised of several components, such as debt and equity and/or warrants to purchase equity at some point in the future. For units which represent debt securities, principal amount disclosed represents total underlying principal.
See accompanying Notes to Financial Statements. 28 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1996 PRINCIPAL MARKET VALUE AMOUNT (NOTE 1) - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES - 0.7% - ---------------------------------------------------------------------------------------------------------- Danka Business Systems plc, 6.75% Cv. Sub. Nts., 4/1/02 (1) $ 800,000 $ 1,083,000 ------------------------------------------------------------------------------------------------------ Southern Pacific Funding Corp., 6.75% Cv. Sub. Nts., 10/15/06 1,000,000 1,068,750 ------------------------------------------------------------------------------------------------------ United Waste Systems, Inc., 4.50% Cv. Sub. Nts., 6/1/01 (2) 2,000,000 2,392,500 ----------- Total Convertible Corporate Bonds and Notes (Cost $3,800,000) 4,544,250 SHARES - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- COMMON STOCKS - 78.1% - ---------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 14.1% - ---------------------------------------------------------------------------------------------------------- AUTOS & HOUSING - 0.3% ------------------------------------------------------------------------------------------------------ Alrenco, Inc. (3) 42,000 446,250 ------------------------------------------------------------------------------------------------------ NHP, Inc. (3) 75,000 1,162,500 ----------- 1,608,750 - ---------------------------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 4.8% - ---------------------------------------------------------------------------------------------------------- Applebee's International, Inc. 120,000 3,300,000 ------------------------------------------------------------------------------------------------------ CKE Restaurants, Inc. 230,000 8,280,000 ------------------------------------------------------------------------------------------------------ HFS, Inc. (3) 80,000 4,780,000 ------------------------------------------------------------------------------------------------------ International Game Technology 220,000 4,015,000 ------------------------------------------------------------------------------------------------------ Landry's Seafood Restaurants, Inc. (3) 200,000 4,275,000 ------------------------------------------------------------------------------------------------------ Rainforest Cafe, Inc. (3) 75,000 1,762,500 ------------------------------------------------------------------------------------------------------ Regal Cinemas, Inc. (3) 99,900 3,071,925 ----------- 29,484,425 - ---------------------------------------------------------------------------------------------------------- MEDIA - 1.6% ------------------------------------------------------------------------------------------------------ Chancellor Broadcasting Co., Cl. A (3) 58,900 1,398,875 ------------------------------------------------------------------------------------------------------ Evergreen Media Corp., Cl. A (3) 50,000 1,250,000 ------------------------------------------------------------------------------------------------------ Getty Communications plc, ADR (3) 130,000 1,950,000 ------------------------------------------------------------------------------------------------------ Infinity Broadcasting Corp., Cl. A (3) 60,000 2,017,500 ------------------------------------------------------------------------------------------------------ Raster Graphics, Inc. (3) 220,000 2,612,500 ------------------------------------------------------------------------------------------------------ SFX Broadcasting, Inc., Cl. A (3) 23,200 690,200 ----------- 9,919,075 - ---------------------------------------------------------------------------------------------------------- RETAIL: GENERAL - 3.1% ------------------------------------------------------------------------------------------------------ Fila Holding SpA, Sponsored ADR 40,000 2,325,000 ------------------------------------------------------------------------------------------------------ Meyer (Fred), Inc. (3) 97,000 3,443,500 ------------------------------------------------------------------------------------------------------ Nautica Enterprises, Inc. (3) 105,000 2,651,250 ------------------------------------------------------------------------------------------------------ North Face, Inc. (The) (3) 115,000 2,213,750 ------------------------------------------------------------------------------------------------------ Vans, Inc. (3) 350,000 4,375,000 ------------------------------------------------------------------------------------------------------ Wolverine World Wide, Inc. 133,500 3,871,500 ----------- 18,880,000 - ---------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 4.3% ------------------------------------------------------------------------------------------------------ Abercrombie & Fitch Co., Cl. A (3) 24,800 409,200 ------------------------------------------------------------------------------------------------------ Central Garden & Pet Co. (3) 230,000 4,844,375 ------------------------------------------------------------------------------------------------------ Corporate Express, Inc. (3) 62,500 1,839,844 ------------------------------------------------------------------------------------------------------ CUC International, Inc. (3) 300,000 7,125,000 ------------------------------------------------------------------------------------------------------ Linens 'N Things, Inc. (3) 200,500 3,934,812 ------------------------------------------------------------------------------------------------------ Petco Animal Supplies, Inc. (3) 135,000 2,801,250 ------------------------------------------------------------------------------------------------------ Staples, Inc. (3) 61,250 1,106,328
29 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY (CONTINUED) TJX Cos., Inc. 90,000 $ 4,263,750 ----------- 26,324,559 - ---------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 21.9% - ---------------------------------------------------------------------------------------------------------- FOOD - 1.6% ------------------------------------------------------------------------------------------------------ Richfood Holdings, Inc. 150,000 3,637,500 ------------------------------------------------------------------------------------------------------ Safeway, Inc. (3) 150,000 6,412,500 ----------- 10,050,000 - ---------------------------------------------------------------------------------------------------------- HEALTHCARE/DRUGS - 7.3% ------------------------------------------------------------------------------------------------------ Agouron Pharmaceuticals, Inc. (3) 30,000 2,032,500 ------------------------------------------------------------------------------------------------------ Alpha-Beta Technology, Inc. (3) 126,900 1,340,381 ------------------------------------------------------------------------------------------------------ BioChem Pharma, Inc. (3) 165,000 8,291,250 ------------------------------------------------------------------------------------------------------ Biogen, Inc. (3) 200,000 7,750,000 ------------------------------------------------------------------------------------------------------ Dura Pharmaceuticals, Inc. (3) 180,000 8,595,000 ------------------------------------------------------------------------------------------------------ Incyte Pharmaceuticals, Inc. (3) 80,000 4,120,000 ------------------------------------------------------------------------------------------------------ Millennium Pharmaceuticals, Inc. (3) 100,000 1,737,500 ------------------------------------------------------------------------------------------------------ Nuerocrine Biosciences, Inc. (3) 105,000 1,050,000 ------------------------------------------------------------------------------------------------------ Physician Support Systems, Inc. (3) 220,000 4,235,000 ------------------------------------------------------------------------------------------------------ SangStat Medical Corp. (3) 220,000 5,830,000 ----------- 44,981,631 - ---------------------------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 11.1% ------------------------------------------------------------------------------------------------------ AmeriSource Health Corp., Cl. A (3) 165,500 7,985,375 ------------------------------------------------------------------------------------------------------ Apache Medical Systems, Inc. (3) 50,000 534,375 ------------------------------------------------------------------------------------------------------ Biosource International, Inc. (3) 7,500 51,562 ------------------------------------------------------------------------------------------------------ Capstone Pharmacy Services, Inc. (3) 190,000 2,161,250 ------------------------------------------------------------------------------------------------------ Cardinal Health, Inc. 97,500 5,679,375 ------------------------------------------------------------------------------------------------------ Cardiovascular Dynamics, Inc. (3) 139,700 1,816,100 ------------------------------------------------------------------------------------------------------ ESC Medical Systems Ltd. (3) 107,100 2,731,050 ------------------------------------------------------------------------------------------------------ FPA Medical Management, Inc. (3) 230,000 5,146,250 ------------------------------------------------------------------------------------------------------ HEALTHSOUTH Corp. (3) 170,000 6,566,250 ------------------------------------------------------------------------------------------------------ Hologic, Inc. (3) 50,000 1,237,500 ------------------------------------------------------------------------------------------------------ IMPATH, Inc. (3) 135,000 2,531,250 ------------------------------------------------------------------------------------------------------ Integ, Inc. (3) 126,500 1,233,375 ------------------------------------------------------------------------------------------------------ MedPartners, Inc. (3) 150,000 3,150,000 ------------------------------------------------------------------------------------------------------ OccuSystems, Inc. (3) 45,000 1,215,000 ------------------------------------------------------------------------------------------------------ Omnicare, Inc. 153,600 4,934,400 ------------------------------------------------------------------------------------------------------ Orthodontic Centers of America, Inc. (3) 120,000 1,920,000 ------------------------------------------------------------------------------------------------------ Pediatrix Medical Group, Inc. (3) 127,500 4,701,562 ------------------------------------------------------------------------------------------------------ PhyCor, Inc. (3) 97,500 2,766,562 ------------------------------------------------------------------------------------------------------ Renal Treatment Centers, Inc. (3) 200,000 5,100,000 ------------------------------------------------------------------------------------------------------ Total Renal Care Holdings, Inc. (3) 197,600 7,163,000 ----------- 68,624,236 - ---------------------------------------------------------------------------------------------------------- HOUSEHOLD GOODS - 1.3% ------------------------------------------------------------------------------------------------------ Blyth Industries, Inc. (3) 170,000 7,756,250 ------------------------------------------------------------------------------------------------------ Nu Skin Asia Pacific, Inc., Cl. A (3) 7,500 231,562 ----------- 7,987,812 - ---------------------------------------------------------------------------------------------------------- TOBACCO - 0.6% ------------------------------------------------------------------------------------------------------ Swisher International Group, Inc., Cl. A (3) 225,000 3,571,875
30 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- ENERGY - 2.8% - ---------------------------------------------------------------------------------------------------------- Calpine Corp. (3) 225,000 $ 4,500,000 ------------------------------------------------------------------------------------------------------ Diamond Offshore Drilling, Inc. (3) 76,900 4,383,300 ------------------------------------------------------------------------------------------------------ Energy Ventures, Inc. (3) 100,200 5,097,675 ------------------------------------------------------------------------------------------------------ Nabors Industries, Inc. (3) 150,000 2,887,500 ------------------------------------------------------------------------------------------------------ NUMAR Corp. (3) 51,000 698,063 -------------- 17,566,538 - ---------------------------------------------------------------------------------------------------------- FINANCIAL - 5.3% - ---------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 2.8% ------------------------------------------------------------------------------------------------------ Associates First Capital Corp., Cl. A 161,000 7,104,125 ------------------------------------------------------------------------------------------------------ Concord EFS, Inc. (3) 100,000 2,825,000 ------------------------------------------------------------------------------------------------------ Green Tree Financial Corp. 85,000 3,283,125 ------------------------------------------------------------------------------------------------------ Southern Pacific Funding Corp. (3) 130,000 4,046,250 -------------- 17,258,500 - ---------------------------------------------------------------------------------------------------------- INSURANCE - 2.5% ------------------------------------------------------------------------------------------------------ Berkley (W.R.) Corp. 30,000 1,522,500 ------------------------------------------------------------------------------------------------------ CapMAC Holdings, Inc. 100,600 3,332,375 ------------------------------------------------------------------------------------------------------ Conseco, Inc. 100,000 6,375,000 ------------------------------------------------------------------------------------------------------ Executive Risk, Inc. 120,000 4,440,000 -------------- 15,669,875 - ---------------------------------------------------------------------------------------------------------- INDUSTRIAL - 8.8% - ---------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 0.4% ------------------------------------------------------------------------------------------------------ Honeywell, Inc. 40,000 2,630,000 - ---------------------------------------------------------------------------------------------------------- INDUSTRIAL SERVICES - 6.3% ------------------------------------------------------------------------------------------------------ Abacus Direct Corp. (3) 80,000 1,500,000 ------------------------------------------------------------------------------------------------------ Affiliated Computer Services, Inc., Cl. A (3) 160,000 4,760,000 ------------------------------------------------------------------------------------------------------ CIBER, Inc. (3) 63,000 1,890,000 ------------------------------------------------------------------------------------------------------ Corrections Corp. of America (3) 100,000 3,062,500 ------------------------------------------------------------------------------------------------------ CORT Business Services Corp. (3) 106,800 2,202,750 ------------------------------------------------------------------------------------------------------ Danka Business Systems plc, Sponsored ADR 70,000 2,476,250 ------------------------------------------------------------------------------------------------------ May & Speh, Inc. (3) 34,900 427,525 ------------------------------------------------------------------------------------------------------ Precision Response Corp. (3) 85,000 2,985,625 ------------------------------------------------------------------------------------------------------ SITEL Corp. (3) 152,200 2,168,850 ------------------------------------------------------------------------------------------------------ Tetra Technologies, Inc. (3) 125,000 3,156,250 ------------------------------------------------------------------------------------------------------ Transaction Systems Architects, Inc., Cl. A (3) 92,000 3,059,000 ------------------------------------------------------------------------------------------------------ United Waste Systems, Inc. (3) 94,000 3,231,250 ------------------------------------------------------------------------------------------------------ USA Waste Services, Inc. (3) 171,300 5,460,188 ------------------------------------------------------------------------------------------------------ Whittman-Hart, Inc. (3) 110,000 2,818,750 -------------- 39,198,938 - ---------------------------------------------------------------------------------------------------------- MANUFACTURING - 2.1% ------------------------------------------------------------------------------------------------------ PRI Automation, Inc. (3) 70,000 3,185,000 ------------------------------------------------------------------------------------------------------ RockShox, Inc. (3) 200,000 2,900,000 ------------------------------------------------------------------------------------------------------ U.S. Filter Corp. (3) 208,600 6,623,050 -------------- 12,708,050 - ---------------------------------------------------------------------------------------------------------- TECHNOLOGY - 24.0% - ---------------------------------------------------------------------------------------------------------- COMPUTER HARDWARE - 0.5% ------------------------------------------------------------------------------------------------------ Cascade Communications Corp. (3) 60,000 3,307,500
31 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE - 10.7% ------------------------------------------------------------------------------------------------------ Adobe Systems, Inc. 50,000 $ 1,868,750 ------------------------------------------------------------------------------------------------------ Aspen Technologies, Inc. (3) 70,000 5,617,500 ------------------------------------------------------------------------------------------------------ Centennial Technologies, Inc. (3) 55,000 2,860,000 ------------------------------------------------------------------------------------------------------ Computer Associates International, Inc. 135,000 6,716,250 ------------------------------------------------------------------------------------------------------ CyberMedia, Inc. (3) 100,300 1,579,725 ------------------------------------------------------------------------------------------------------ Eidos plc, Sponsored ADR (3) 100,000 1,200,000 ------------------------------------------------------------------------------------------------------ First Data Corp. 67,576 2,466,524 ------------------------------------------------------------------------------------------------------ HBO & Co. 70,000 4,156,250 ------------------------------------------------------------------------------------------------------ Indus Group, Inc. (The) (3) 75,000 1,931,250 ------------------------------------------------------------------------------------------------------ Informix Corp. (3) 50,000 1,018,750 ------------------------------------------------------------------------------------------------------ Legato Systems, Inc. (3) 60,000 1,957,500 ------------------------------------------------------------------------------------------------------ Mecon, Inc. (3) 55,000 364,375 ------------------------------------------------------------------------------------------------------ Oracle Corp. (3) 67,500 2,818,125 ------------------------------------------------------------------------------------------------------ Pure Atria Corp. (3) 51,400 1,272,150 ------------------------------------------------------------------------------------------------------ Rational Software Corp. (3) 87,500 3,461,719 ------------------------------------------------------------------------------------------------------ Rogue Wave Software, Inc. (3) 200,000 3,150,000 ------------------------------------------------------------------------------------------------------ SELECT Software Tools Ltd., ADR (3) 220,000 4,015,000 ------------------------------------------------------------------------------------------------------ Sunquest Information Systems, Inc. (3) 50,000 712,500 ------------------------------------------------------------------------------------------------------ Systemsoft Corp. (3) 100,000 1,487,500 ------------------------------------------------------------------------------------------------------ Transition Systems, Inc. (3) 40,000 565,000 ------------------------------------------------------------------------------------------------------ Vantive Corp. (3) 70,000 2,187,500 ------------------------------------------------------------------------------------------------------ Verilink Corp. (3) 175,000 5,818,750 ------------------------------------------------------------------------------------------------------ Versant Object Technology Corp. (3) 200,000 3,725,000 ------------------------------------------------------------------------------------------------------ Visigenic Software, Inc. (3) 235,000 3,583,750 ------------------------------------------------------------------------------------------------------ White Pine Software, Inc. (3) 183,000 1,326,750 --------------- 65,860,618 - ---------------------------------------------------------------------------------------------------------- ELECTRONICS - 4.0% ------------------------------------------------------------------------------------------------------ Altera Corp. (3) 50,000 3,634,375 ------------------------------------------------------------------------------------------------------ ESS Technology, Inc. (3) 175,000 4,921,875 ------------------------------------------------------------------------------------------------------ Nokia Corp., A Shares, Sponsored ADR 85,000 4,898,125 ------------------------------------------------------------------------------------------------------ Sawtek, Inc. (3) 95,100 3,768,338 ------------------------------------------------------------------------------------------------------ SDL, Inc. (3) 165,000 4,331,250 ------------------------------------------------------------------------------------------------------ Waters Corp. (3) 100,000 3,037,500 --------------- 24,591,463 - ---------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 8.8% ------------------------------------------------------------------------------------------------------ Ascend Communications, Inc. (3) 40,000 2,485,000 ------------------------------------------------------------------------------------------------------ Cisco Systems, Inc. (3) 115,000 7,316,875 ------------------------------------------------------------------------------------------------------ Comverse Technology, Inc. (3) 170,000 6,428,125 ------------------------------------------------------------------------------------------------------ Davox Corp. (3) 60,000 2,475,000 ------------------------------------------------------------------------------------------------------ LCI International, Inc. (3) 120,600 2,592,900 ------------------------------------------------------------------------------------------------------ Newbridge Networks Corp. (3) 130,000 3,672,500 ------------------------------------------------------------------------------------------------------ PageMart Wireless, Inc., Cl. A (3) 103,100 683,038 ------------------------------------------------------------------------------------------------------ Periphonics Corp. (3) 205,800 6,019,650 ------------------------------------------------------------------------------------------------------ Sterling Commerce, Inc. (3) 45,500 1,603,875 ------------------------------------------------------------------------------------------------------ Tel-Save Holdings, Inc. (3) 100,000 2,900,000 ------------------------------------------------------------------------------------------------------ Teledata Communications Ltd. (3) 240,000 5,520,000 ------------------------------------------------------------------------------------------------------ Tellabs, Inc. (3) 160,000 6,020,000
32 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY (CONTINUED) ------------------------------------------------------------------------------------------------------ U.S. Robotics Corp. (3) 95,000 $ 6,840,000 --------------- 54,556,963 - ---------------------------------------------------------------------------------------------------------- UTILITIES - 1.2% - ---------------------------------------------------------------------------------------------------------- ACC Corp. (3) 58,200 1,760,550 ------------------------------------------------------------------------------------------------------ Advanced Fibre Communications, Inc. (3) 45,000 2,503,125 ------------------------------------------------------------------------------------------------------ West TeleServices Corp. (3) 125,200 2,848,300 --------------- 7,111,975 --------------- Total Common Stocks (Cost $377,931,267) 481,892,783 UNITS - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% - ---------------------------------------------------------------------------------------------------------- PerSeptive Biosystems, Inc. Wts., Exp. 9/03 (Cost $0) 961 -- PRINCIPAL z AMOUNT - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 22.3% - ---------------------------------------------------------------------------------------------------------- Repurchase agreement with PaineWebber, Inc., 6.50%, dated 12/31/96, to be repurchased at $15,905,742 on 1/2/97, collateralized by U.S. Treasury Nts., 5.75%-8.75%, 9/30/97-8/31/00, with a value of $16,394,610 $ 15,900,000 15,900,000 ------------------------------------------------------------------------------------------------------ Repurchase agreement with Goldman, Sachs & Co., 6.52%, dated 12/31/96, to be repurchased at $122,144,227 on 1/2/97, collateralized by U.S. Treasury Nts., 5.50%-7.50%, 7/15/99-8/15/05, with a value of $124,899,505 122,100,000 122,100,000 --------------- Total Repurchase Agreements (Cost $138,000,000) 138,000,000 ------------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS, AT VALUE (COST $519,731,267) 101.1% 624,437,033 ------------------------------------------------------------------------------------------------------ LIABILITIES IN EXCESS OF OTHER ASSETS (1.1) (7,044,761) -------------- ------------- NET ASSETS 100.0% $617,392,272 -------------- ------------- -------------- -------------
1. Identifies issues considered to be illiquid - See applicable note 6 of Notes to Financial Statements. 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 $2,392,500 or 0.39% of the Fund's net assets, at December 31, 1996. 3. Non-income producing security. See accompanying Notes to Financial Statements. 33 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1996 PRINCIPAL MARKET VALUE AMOUNT (NOTE 1) - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- SHORT-TERM NOTES - 2.4% - ----------------------------------------------------------------------------------------------------- CIESCO L.P., 5.52%, 1/2/97 $ 3,850,000 $ 3,849,409 -------------------------------------------------------------------------------------------------- Ford Motor Credit Co., 5.62%, 1/2/97 3,000,000 2,999,532 ------------- Total Short-Term Notes (Cost $6,848,941) 6,848,941 SHARES - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- COMMON STOCKS - 70.9% - ----------------------------------------------------------------------------------------------------- BASIC MATERIALS - 3.0% - ----------------------------------------------------------------------------------------------------- CHEMICALS - 2.2% - ----------------------------------------------------------------------------------------------------- FMC Corp. (1) 2,200 154,275 -------------------------------------------------------------------------------------------------- IMC Global, Inc. 19,000 743,375 -------------------------------------------------------------------------------------------------- Morton International, Inc. 29,000 1,181,750 -------------------------------------------------------------------------------------------------- Potash Corp. of Saskatchewan, Inc. 10,000 850,000 -------------------------------------------------------------------------------------------------- Praxair, Inc. 36,600 1,688,175 -------------------------------------------------------------------------------------------------- Terra Industries, Inc. 46,000 678,500 -------------------------------------------------------------------------------------------------- Union Carbide Corp. 22,000 899,250 ------------- 6,195,325 - ----------------------------------------------------------------------------------------------------- METALS - 0.6% -------------------------------------------------------------------------------------------------- Oregon Steel Mills, Inc. 58,000 971,500 -------------------------------------------------------------------------------------------------- USX-U.S. Steel Group, Inc. 25,000 784,375 ------------- 1,755,875 - ----------------------------------------------------------------------------------------------------- PAPER - 0.2% -------------------------------------------------------------------------------------------------- Bowater, Inc. 11,000 413,875 -------------------------------------------------------------------------------------------------- Sonoco Products Co. 8,400 217,350 ------------- 631,225 - ----------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 9.8% - ----------------------------------------------------------------------------------------------------- AUTOS & HOUSING - 1.2% -------------------------------------------------------------------------------------------------- Arvin Industries, Inc. 24,900 616,275 -------------------------------------------------------------------------------------------------- Champion Enterprises, Inc. (1) 64,000 1,248,000 -------------------------------------------------------------------------------------------------- Pulte Corp. 22,000 676,500 -------------------------------------------------------------------------------------------------- Toll Brothers, Inc. (1) 46,000 897,000 ------------- 3,437,775 - ----------------------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 1.8% -------------------------------------------------------------------------------------------------- AMR Corp. (1) 3,000 264,375 -------------------------------------------------------------------------------------------------- Applebee's International, Inc. 19,500 536,250 -------------------------------------------------------------------------------------------------- Callaway Golf Co. 41,200 1,184,500 -------------------------------------------------------------------------------------------------- Carmike Cinemas, Inc., Cl. A (1) 1,500 38,062 -------------------------------------------------------------------------------------------------- CKE Restaurants, Inc. 17,800 640,800 -------------------------------------------------------------------------------------------------- Disney (Walt) Co. 13,000 905,125 -------------------------------------------------------------------------------------------------- ITT Corp. (New) (1) 12,000 520,500 -------------------------------------------------------------------------------------------------- McDonald's Corp. 4,000 181,000 -------------------------------------------------------------------------------------------------- Outback Steakhouse, Inc. (1) 10,000 267,500 -------------------------------------------------------------------------------------------------- Wendy's International, Inc. 35,800 733,900 ------------- 5,272,012 - ----------------------------------------------------------------------------------------------------- MEDIA - 0.3% -------------------------------------------------------------------------------------------------- American Greetings Corp., Cl. A 30,000 851,250 34 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ----------------------------------------------------------------------------------------------------- RETAIL: GENERAL - 3.4% -------------------------------------------------------------------------------------------------- Donna Karan International, Inc. (1) 51,100 $ 721,787 -------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. (1) 60,000 2,047,500 -------------------------------------------------------------------------------------------------- Fruit of the Loom, Inc., Cl. A (1) 30,000 1,136,250 -------------------------------------------------------------------------------------------------- Jones Apparel Group, Inc. (1) 28,200 1,053,975 -------------------------------------------------------------------------------------------------- Liz Claiborne, Inc. 11,000 424,875 -------------------------------------------------------------------------------------------------- Mac Frugal's Bargains-Close-Outs, Inc. (1) 43,500 1,136,437 -------------------------------------------------------------------------------------------------- Nautica Enterprises, Inc. (1) 17,000 429,250 -------------------------------------------------------------------------------------------------- Neiman-Marcus Group, Inc. (1) 34,000 867,000 -------------------------------------------------------------------------------------------------- Tommy Hilfiger Corp. (1) 23,800 1,142,400 -------------------------------------------------------------------------------------------------- Wal-Mart Stores, Inc. 37,000 846,375 ------------- 9,805,849 - ----------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 3.1% -------------------------------------------------------------------------------------------------- American Pad & Paper Co. (1) 42,500 961,562 -------------------------------------------------------------------------------------------------- AnnTaylor Stores Corp. (1) 37,000 647,500 -------------------------------------------------------------------------------------------------- Bed Bath & Beyond, Inc. (1) 18,000 436,500 -------------------------------------------------------------------------------------------------- Brown Group, Inc. 45,000 826,875 -------------------------------------------------------------------------------------------------- Claire's Stores, Inc. 27,000 351,000 -------------------------------------------------------------------------------------------------- Consolidated Stores Corp. (1) 25,000 803,125 -------------------------------------------------------------------------------------------------- Gap, Inc. (The) 33,000 994,125 -------------------------------------------------------------------------------------------------- Home Depot, Inc. 22,000 1,102,750 -------------------------------------------------------------------------------------------------- Nine West Group, Inc. (1) 41,000 1,901,375 -------------------------------------------------------------------------------------------------- Stride Rite Corp. 40,000 400,000 -------------------------------------------------------------------------------------------------- Tiffany & Co. 15,000 549,375 ------------ 8,974,187 - ----------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 12.6% - ----------------------------------------------------------------------------------------------------- BEVERAGES - 0.5% -------------------------------------------------------------------------------------------------- Boston Beer Co., Inc., Cl. A (1) 13,000 133,250 -------------------------------------------------------------------------------------------------- Coca-Cola Co. (The) 21,000 1,105,125 -------------------------------------------------------------------------------------------------- Cott Corp. 35,000 253,750 ------------- 1,492,125 - ----------------------------------------------------------------------------------------------------- EDUCATION - 0.2% -------------------------------------------------------------------------------------------------- National Education Corp. (1) 32,000 488,000 - ----------------------------------------------------------------------------------------------------- FOOD - 2.8% -------------------------------------------------------------------------------------------------- American Stores Co. 17,000 694,875 -------------------------------------------------------------------------------------------------- Hershey Foods Corp. 22,000 962,500 -------------------------------------------------------------------------------------------------- JP Foodservice, Inc. (1) 25,600 713,600 -------------------------------------------------------------------------------------------------- Kroger Co. (1) 23,000 1,069,500 -------------------------------------------------------------------------------------------------- Richfood Holdings, Inc. 52,500 1,273,125 -------------------------------------------------------------------------------------------------- Safeway, Inc. (1) 35,000 1,496,250 -------------------------------------------------------------------------------------------------- Sara Lee Corp. 45,000 1,676,250 ------------- 7,886,100 - ----------------------------------------------------------------------------------------------------- HEALTHCARE/DRUGS - 3.9% -------------------------------------------------------------------------------------------------- Abbott Laboratories 4,000 203,000 -------------------------------------------------------------------------------------------------- Amgen, Inc. (1) 8,000 435,000 -------------------------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 6,500 706,875 -------------------------------------------------------------------------------------------------- Incyte Pharmaceuticals, Inc. (1) 12,600 648,900 -------------------------------------------------------------------------------------------------- Johnson & Johnson 55,516 2,761,921 -------------------------------------------------------------------------------------------------- Lilly (Eli) & Co. 32,090 2,342,570 35 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- HEALTHCARE/DRUGS (Continued) -------------------------------------------------------------------------------------------------- Merck & Co., Inc. 6,000 $ 475,500 -------------------------------------------------------------------------------------------------- Pfizer, Inc. 24,500 2,030,437 -------------------------------------------------------------------------------------------------- Schering-Plough Corp. 25,400 1,644,650 ------------- 11,248,853 -------------------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 3.6% -------------------------------------------------------------------------------------------------- Baxter International, Inc. 10,000 410,000 -------------------------------------------------------------------------------------------------- Boston Scientific Corp. (1) 17,000 1,020,000 -------------------------------------------------------------------------------------------------- Guidant Corp. 27,916 1,591,212 -------------------------------------------------------------------------------------------------- HealthCare COMPARE Corp. (1) 35,900 1,521,262 -------------------------------------------------------------------------------------------------- HEALTHSOUTH Corp. (1) 40,000 1,545,000 -------------------------------------------------------------------------------------------------- Medtronic, Inc. 21,000 1,428,000 -------------------------------------------------------------------------------------------------- Nellcor Puritan Bennett, Inc. (1) 31,600 691,250 -------------------------------------------------------------------------------------------------- Oxford Health Plans, Inc. (1) 23,000 1,346,937 -------------------------------------------------------------------------------------------------- Sofamor Danek Group, Inc. (1) 19,000 579,500 -------------------------------------------------------------------------------------------------- VISX, Inc. (1) 11,000 243,375 ------------- 10,376,536 - ----------------------------------------------------------------------------------------------------- HOUSEHOLD GOODS - 0.4% -------------------------------------------------------------------------------------------------- Procter & Gamble Co. 10,000 1,075,000 - ----------------------------------------------------------------------------------------------------- TOBACCO - 1.2% -------------------------------------------------------------------------------------------------- Philip Morris Cos., Inc. 23,000 2,590,375 -------------------------------------------------------------------------------------------------- UST, Inc. 23,000 744,625 ------------- 3,335,000 - ----------------------------------------------------------------------------------------------------- ENERGY - 6.0% - ----------------------------------------------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 1.5% -------------------------------------------------------------------------------------------------- BJ Services Co. (1) 20,000 1,020,000 -------------------------------------------------------------------------------------------------- Global Marine, Inc. (1) 60,000 1,237,500 -------------------------------------------------------------------------------------------------- Tidewater, Inc. 10,000 452,500 -------------------------------------------------------------------------------------------------- Transocean Offshore, Inc. 25,000 1,565,625 ------------- 4,275,625 - ----------------------------------------------------------------------------------------------------- OIL-INTEGRATED - 4.5% -------------------------------------------------------------------------------------------------- Amerada Hess Corp. 15,500 897,062 -------------------------------------------------------------------------------------------------- Amoco Corp. 15,600 1,255,800 -------------------------------------------------------------------------------------------------- Atlantic Richfield Co. 13,600 1,802,000 -------------------------------------------------------------------------------------------------- Mobil Corp. 16,100 1,968,225 -------------------------------------------------------------------------------------------------- Pennzoil Co. 13,000 734,500 -------------------------------------------------------------------------------------------------- Phillips Petroleum Co. 33,000 1,460,250 -------------------------------------------------------------------------------------------------- Royal Dutch Petroleum Co. 13,000 2,219,750 -------------------------------------------------------------------------------------------------- Unocal Corp. 40,000 1,625,000 -------------------------------------------------------------------------------------------------- USX-Marathon Group 41,000 978,875 ------------- 12,941,462 - ----------------------------------------------------------------------------------------------------- FINANCIAL - 14.2% - ----------------------------------------------------------------------------------------------------- BANKS - 3.5% -------------------------------------------------------------------------------------------------- Bank of Boston Corp. 23,000 1,477,750 -------------------------------------------------------------------------------------------------- Bank of New York Co., Inc. (The) 28,800 972,000 -------------------------------------------------------------------------------------------------- BankAmerica Corp. 7,500 748,125 -------------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New) 22,640 2,020,620 -------------------------------------------------------------------------------------------------- Citicorp 20,600 2,121,800 -------------------------------------------------------------------------------------------------- Mellon Bank Corp. 18,000 1,278,000 36 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ----------------------------------------------------------------------------------------------------- BANKS (Continued) - ----------------------------------------------------------------------------------------------------- State Street Boston Corp. 21,600 $ 1,393,200 ------------- 10,011,495 - ----------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 7.0% -------------------------------------------------------------------------------------------------- Advanta Corp., Cl. A 20,000 855,000 -------------------------------------------------------------------------------------------------- Associates First Capital Corp., Cl. A 22,000 970,750 -------------------------------------------------------------------------------------------------- Countrywide Credit Industries, Inc. 28,000 801,500 -------------------------------------------------------------------------------------------------- Everen Capital Corp. 22,000 492,250 -------------------------------------------------------------------------------------------------- Fannie Mae 32,000 1,192,000 -------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. 16,000 1,762,000 -------------------------------------------------------------------------------------------------- Finova Group, Inc. 23,000 1,477,750 -------------------------------------------------------------------------------------------------- First USA, Inc. 86,000 2,977,750 -------------------------------------------------------------------------------------------------- Franklin Resources, Inc. 15,400 1,052,975 -------------------------------------------------------------------------------------------------- Green Tree Financial Corp. 54,000 2,085,750 -------------------------------------------------------------------------------------------------- Morgan Stanley Group, Inc. 7,000 399,875 -------------------------------------------------------------------------------------------------- Price (T. Rowe) Associates 29,200 1,270,200 -------------------------------------------------------------------------------------------------- Salomon, Inc. 24,000 1,131,000 -------------------------------------------------------------------------------------------------- Schwab (Charles) Corp. (New) 25,000 800,000 -------------------------------------------------------------------------------------------------- Travelers Group, Inc. 60,666 2,752,720 ------------- 20,021,520 - ----------------------------------------------------------------------------------------------------- INSURANCE - 3.7% -------------------------------------------------------------------------------------------------- AFLAC, Inc. 19,400 829,350 -------------------------------------------------------------------------------------------------- Allstate Corp. 40,500 2,343,937 -------------------------------------------------------------------------------------------------- American International Group, Inc. 3,000 324,750 -------------------------------------------------------------------------------------------------- Cigna Corp. 10,600 1,448,225 -------------------------------------------------------------------------------------------------- Equitable Cos., Inc. 54,000 1,329,750 -------------------------------------------------------------------------------------------------- ITT Hartford Group, Inc. 5,000 337,500 -------------------------------------------------------------------------------------------------- Loews Corp. 11,000 1,036,750 -------------------------------------------------------------------------------------------------- MGIC Investment Corp. 12,100 919,600 -------------------------------------------------------------------------------------------------- SunAmerica, Inc. 44,000 1,952,500 ------------- 10,522,362 - ----------------------------------------------------------------------------------------------------- INDUSTRIAL - 6.1% - ----------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 2.1% -------------------------------------------------------------------------------------------------- Emerson Electric Co. 23,000 2,225,250 -------------------------------------------------------------------------------------------------- General Electric Co. 28,000 2,768,500 -------------------------------------------------------------------------------------------------- Honeywell, Inc. 15,300 1,005,975 ------------ 5,999,725 - ----------------------------------------------------------------------------------------------------- INDUSTRIAL MATERIALS - 1.0% -------------------------------------------------------------------------------------------------- Centex Corp 34,000 1,279,250 -------------------------------------------------------------------------------------------------- Fluor Corp. 6,000 376,500 -------------------------------------------------------------------------------------------------- Rayonier, Inc. 28,400 1,089,850 ------------- 2,745,600 - ----------------------------------------------------------------------------------------------------- INDUSTRIAL SERVICES - 0.3% -------------------------------------------------------------------------------------------------- Kent Electronics Corp. (1) 16,400 422,300 -------------------------------------------------------------------------------------------------- Manpower, Inc. 10,000 325,000 ------------- 747,300 - ----------------------------------------------------------------------------------------------------- MANUFACTURING - 1.6% -------------------------------------------------------------------------------------------------- AGCO Corp. 25,200 721,350 -------------------------------------------------------------------------------------------------- AlliedSignal, Inc. 14,000 938,000 37 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- MANUFACTURING (Continued) -------------------------------------------------------------------------------------------------- Deere & Co. 10,000 $ 406,250 -------------------------------------------------------------------------------------------------- Sealed Air Corp. (1) 33,000 1,373,625 -------------------------------------------------------------------------------------------------- U.S. Filter Corp. (1) 40,300 1,279,525 ------------- 4,718,750 TRANSPORTATION - 1.1% -------------------------------------------------------------------------------------------------- Burlington Northern Santa Fe Corp. 7,000 604,625 -------------------------------------------------------------------------------------------------- Canadian Pacific Ltd. (New) 78,000 2,067,000 -------------------------------------------------------------------------------------------------- Illinois Central Corp. 15,000 480,000 ------------- 3,151,625 - ----------------------------------------------------------------------------------------------------- TECHNOLOGY - 16.8% -------------------------------------------------------------------------------------------------- Aerospace/Defense - 0.6% -------------------------------------------------------------------------------------------------- Goodrich (B.F.) Co. 24,000 972,000 -------------------------------------------------------------------------------------------------- Lockheed Martin Corp. 8,707 796,691 ------------- 1,768,691 - ----------------------------------------------------------------------------------------------------- COMPUTER HARDWARE - 4.1% -------------------------------------------------------------------------------------------------- Adaptec, Inc. (1) 26,000 1,040,000 -------------------------------------------------------------------------------------------------- Cabletron Systems, Inc. (1) 44,000 1,463,000 -------------------------------------------------------------------------------------------------- Cascade Communications Corp. (1) 43,500 2,397,938 -------------------------------------------------------------------------------------------------- EMC Corp. (1) 36,000 1,192,500 -------------------------------------------------------------------------------------------------- Gateway 2000, Inc. (1) 30,800 1,649,725 -------------------------------------------------------------------------------------------------- International Business Machines Corp. 8,000 1,208,000 -------------------------------------------------------------------------------------------------- Quantum Corp. (1) 22,000 629,750 -------------------------------------------------------------------------------------------------- Seagate Technology (1) 30,000 1,185,000 -------------------------------------------------------------------------------------------------- Sun Microsystems, Inc. (1) 35,000 899,063 ------------- 11,664,976 - ----------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE - 4.9% -------------------------------------------------------------------------------------------------- Automatic Data Processing, Inc. 7,000 300,125 -------------------------------------------------------------------------------------------------- BMC Software, Inc. (1) 42,000 1,737,750 -------------------------------------------------------------------------------------------------- Computer Associates International, Inc. 9,000 447,750 -------------------------------------------------------------------------------------------------- First Data Corp. 29,000 1,058,500 -------------------------------------------------------------------------------------------------- HBO & Co. 30,000 1,781,250 -------------------------------------------------------------------------------------------------- Microsoft Corp. (1) 50,000 4,131,250 -------------------------------------------------------------------------------------------------- Oracle Corp. (1) 40,400 1,686,700 -------------------------------------------------------------------------------------------------- PLATINUM Technology, Inc. (1) 33,000 449,625 -------------------------------------------------------------------------------------------------- SAP AG, Preference (1) 5,000 687,172 -------------------------------------------------------------------------------------------------- Shiva Corp. (1) 20,000 697,500 -------------------------------------------------------------------------------------------------- Sungard Data Systems, Inc. (1) 23,000 908,500 ------------- 13,886,122 - ----------------------------------------------------------------------------------------------------- ELECTRONICS - 2.8% -------------------------------------------------------------------------------------------------- Altera Corp. (1) 6,000 436,125 -------------------------------------------------------------------------------------------------- Analog Devices, Inc. (1) 25,000 846,875 -------------------------------------------------------------------------------------------------- Applied Materials, Inc. (1) 32,000 1,150,000 -------------------------------------------------------------------------------------------------- Intel Corp. 20,000 2,618,750 -------------------------------------------------------------------------------------------------- LSI Logic Corp. (1) 4,000 107,000 -------------------------------------------------------------------------------------------------- Novellus Systems, Inc. (1) 16,200 877,838 -------------------------------------------------------------------------------------------------- SCI Systems, Inc. (1) 25,200 1,124,550 -------------------------------------------------------------------------------------------------- Varian Associates, Inc. 15,300 778,388 ------------- 7,939,526 38 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 4.4% -------------------------------------------------------------------------------------------------- 3Com Corp. (1) 13,000 $ 953,875 -------------------------------------------------------------------------------------------------- Cisco Systems, Inc. (1) 47,000 2,990,375 -------------------------------------------------------------------------------------------------- Hong Kong Telecommunications Ltd., Sponsored ADR 21,572 350,545 -------------------------------------------------------------------------------------------------- Newbridge Networks Corp. (1) 35,000 988,750 -------------------------------------------------------------------------------------------------- Sprint Corp. 26,500 1,056,688 -------------------------------------------------------------------------------------------------- Telecom Corp. of New Zealand Ltd., Sponsored ADR 7,000 567,000 -------------------------------------------------------------------------------------------------- Tellabs, Inc. (1) 90,600 3,408,825 -------------------------------------------------------------------------------------------------- WorldCom, Inc. (1) 85,000 2,215,313 ------------ 12,531,371 - ----------------------------------------------------------------------------------------------------- UTILITIES - 2.4% - ----------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES - 1.0% -------------------------------------------------------------------------------------------------- American Electric Power Co., Inc. 11,550 474,994 -------------------------------------------------------------------------------------------------- CMS Energy Corp. 16,200 544,725 -------------------------------------------------------------------------------------------------- FPL Group, Inc. 13,600 625,600 -------------------------------------------------------------------------------------------------- Peco Energy Co. 8,300 209,575 -------------------------------------------------------------------------------------------------- Pinnacle West Capital Corp. 32,000 1,016,000 ------------ 2,870,894 - ----------------------------------------------------------------------------------------------------- GAS UTILITIES - 0.5% -------------------------------------------------------------------------------------------------- Questar Corp. 14,000 514,500 -------------------------------------------------------------------------------------------------- Sonat, Inc. 18,000 927,000 ------------- 1,441,500 - ----------------------------------------------------------------------------------------------------- TELEPHONE UTILITIES - 0.9% -------------------------------------------------------------------------------------------------- Bell Atlantic Corp. 6,300 407,925 -------------------------------------------------------------------------------------------------- BellSouth Corp. 14,600 589,475 -------------------------------------------------------------------------------------------------- Century Telephone Enterprises, Inc. 14,000 432,250 -------------------------------------------------------------------------------------------------- Cincinnati Bell, Inc. 11,800 727,175 -------------------------------------------------------------------------------------------------- SBC Communications, Inc. 6,400 331,200 ------------- 2,488,025 ------------- Total Common Stocks (Cost $145,462,807) 202,551,681 - ----------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 0.0% - ----------------------------------------------------------------------------------------------------- TCI Communications, Inc., $2.125 Cum. Cv., Series A (Cost $150,000) 3,000 116,625 PRINCIPAL AMOUNT - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 25.5% - ----------------------------------------------------------------------------------------------------- Repurchase agreement with J.P. Morgan Securities, Inc., 6.50%, dated 12/31/96, to be repurchased at $23,008,306 on 1/2/97, collateralized by U.S. Treasury Bonds, 7.875%-12%, 5/15/09-2/15/21, with a value of $18,981,947 and U.S. Treasury Nts., 4.75%-6%, 8/31/98-9/30/98, with a value of $4,712,989 $23,000,000 23,000,000 39 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT (NOTE 1) - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- Repurchase Agreements (Continued) - ----------------------------------------------------------------------------------------------------- Repurchase agreement with Goldman, Sachs & Co., 6.52%, dated 12/31/96, to be repurchased at $50,018,111 on 1/2/97, collateralized by U.S. Treasury Nts., 5.50%-7.50%, 7/15/99-8/15/05, with a value of $51,146,398 $ 50,000,000 $ 50,000,000 ------------- Total Repurchase Agreements (Cost $73,000,000) 73,000,000 -------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $225,461,748) 98.8% 282,517,247 -------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.2 3,402,903 ----- ------------- NET ASSETS 100.0% $285,920,150 ----- ------------- ----- -------------
1. Non-income producing security. See accompanying Notes to Financial Statements. 40 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1996 PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 2.4% - --------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: 7.50%, 1/15/27 (2) $ 3,000,000 $ 2,998,140 8.50%, 1/15/27 (2) 3,000,000 3,109,680 ----------------------------------------------------------------------------------------------------------- Government National Mortgage Assn.: 8%, 4/15/23 3,215,702 3,300,726 8%, 7/15/22 1,439,933 1,480,712 ----------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1994-C2, Cl. E, 8%, 4/25/25 708,271 706,280 ------------ Total Mortgage-Backed Obligations (Cost $11,581,318) 11,595,538 - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 7.5% - --------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds: STRIPS, Zero Coupon, 7.101%, 11/15/18 (3) 24,500,000 5,511,248 STRIPS, Zero Coupon, 7.313%, 8/15/19 (3) 26,800,000 5,714,563 ----------------------------------------------------------------------------------------------------------- U.S. Treasury Nts.: 6.375%, 8/15/02 5,000,000 5,034,380 6.75%, 5/31/97 10,300,000 10,345,072 9.25%, 8/15/98 9,000,000 9,455,633 ------------ Total U.S. Government Obligations (Cost $35,122,095) 36,060,896 - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 16.2% - --------------------------------------------------------------------------------------------------------------- Argentina (Republic of): Bonds, Bonos de Consolidacion de Deudas, Series I, 5.375%, 4/1/01 (4)(5) 2,478,092 2,340,150 Par Bonds, 5.25%, 3/31/23 (6) 24,000,000 15,150,000 Past Due Interest Bonds, Series L, 6.625%, 3/31/05 (4) 8,820,000 7,678,912 ----------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Par Bonds, 5%, 4/15/24 (6) 8,000,000 5,020,000 ----------------------------------------------------------------------------------------------------------- Canada (Government of) Bonds: 8.50%, 4/1/02 CAD 1,500,000 1,237,184 8.75%, 12/1/05 CAD 12,200,000 10,376,451 9.75%, 12/1/01 CAD 3,000,000 2,584,352 9.75%, 6/1/01 CAD 2,000,000 1,707,551 ----------------------------------------------------------------------------------------------------------- Denmark (Kingdom of) Bonds, 8%, 3/15/06 DKK 32,100,000 5,985,855 ----------------------------------------------------------------------------------------------------------- Eskom Depositary Receipts, Series E168, 11%, 6/1/08 ZAR 12,570,000 1,967,471 ----------------------------------------------------------------------------------------------------------- Ireland (Government of) Bonds, 9.25%, 7/11/03 IEP 1,110,000 2,176,463 ----------------------------------------------------------------------------------------------------------- Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali, 8.50%, 8/1/99 ITL 2,700,000,000 1,860,455 ----------------------------------------------------------------------------------------------------------- New Zealand (Government of) Bonds, 8%, 2/15/01 NZD 10,440,000 7,630,155 ----------------------------------------------------------------------------------------------------------- Poland (Republic of) Treasury Bills, Zero Coupon, 20.70%, 1/8/97 (3) PLZ 3,150,000 1,097,181 ----------------------------------------------------------------------------------------------------------- Queensland Treasury Corp. Exchangeable Gtd. Nts., 10.50%, 5/15/03 AUD 1,800,000 1,661,406 ----------------------------------------------------------------------------------------------------------- Treasury Corp. of Victoria Gtd. Bonds, 8.25%, 10/15/03 AUD 3,000,000 2,497,435 41 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED) - --------------------------------------------------------------------------------------------------------------- United Kingdom Treasury: Bonds, 6.75%, 11/26/04 GBP 2,680,000 $ 4,410,077 Nts., 13%, 7/14/00 GBP 1,590,000 3,204,569 ------------ Total Foreign Government Obligations (Cost $71,329,300) 78,585,667 - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES - 13.7% - --------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 1.6% - --------------------------------------------------------------------------------------------------------------- CHEMICALS - 0.3% ----------------------------------------------------------------------------------------------------------- NL Industries, Inc., 0%/13% Sr. Sec. Disc. Nts., 10/15/05 (7) 800,000 694,000 ----------------------------------------------------------------------------------------------------------- Quantum Chemical Corp., 10.375% First Mtg. Nts., 6/1/03 500,000 543,418 ------------ 1,237,418 - --------------------------------------------------------------------------------------------------------------- GOLD - 0.3% ----------------------------------------------------------------------------------------------------------- Royal Oak Mines, Inc., 11% Sr. Sub. Nts., 8/15/06 1,250,000 1,275,000 - --------------------------------------------------------------------------------------------------------------- METALS - 0.5% ----------------------------------------------------------------------------------------------------------- AK Steel Corp., 9.125% Sr. Nts., 12/15/06 (8) 1,250,000 1,284,375 ----------------------------------------------------------------------------------------------------------- Armco, Inc., 8.50% Sinking Fund Debs., 9/1/01 178,000 179,335 ----------------------------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 1,000,000 1,072,500 ------------ 2,536,210 - --------------------------------------------------------------------------------------------------------------- PAPER - 0.5% ----------------------------------------------------------------------------------------------------------- APP International Finance Co. BV, 11.75% Gtd. Sec. Nts., 10/1/05 500,000 535,625 ----------------------------------------------------------------------------------------------------------- Repap Wisconsin, Inc., 9.875% Second Priority Sr. Nts., 5/1/06 1,000,000 1,012,500 ----------------------------------------------------------------------------------------------------------- SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 750,000 813,750 ------------ 2,361,875 - --------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 4.5% - --------------------------------------------------------------------------------------------------------------- AUTOS & HOUSING - 0.7% ----------------------------------------------------------------------------------------------------------- Chrysler Financial Corp., 13.25% Nts., 10/15/99 500,000 585,946 ----------------------------------------------------------------------------------------------------------- Collins & Aikman Products Co., 11.50% Gtd. Sr. Sub. Nts., 4/15/06 600,000 656,250 ----------------------------------------------------------------------------------------------------------- Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 500,000 545,000 ----------------------------------------------------------------------------------------------------------- Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 525,000 509,250 ----------------------------------------------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Sec. Nts., Series B, 4/1/02 950,000 1,026,000 ------------ 3,322,446 - --------------------------------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 0.4% ----------------------------------------------------------------------------------------------------------- Foodmaker, Inc.: 9.25% Sr. Nts., 3/1/99 450,000 459,000 9.75% Sr. Sub. Nts., 6/1/02 350,000 357,875 ----------------------------------------------------------------------------------------------------------- Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03 500,000 507,500 ----------------------------------------------------------------------------------------------------------- Imax Corp., 7% Sr. Nts., 3/1/01 (6) 600,000 615,000 ------------ 1,939,375 - --------------------------------------------------------------------------------------------------------------- MEDIA - 2.9% ----------------------------------------------------------------------------------------------------------- American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04 (7) 749,948 311,228 42 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - --------------------------------------------------------------------------------------------------------------- MEDIA (CONTINUED) ----------------------------------------------------------------------------------------------------------- Bell & Howell Co. (New), 0%/11.50% Sr. Disc. Debs., Series B, 3/1/05 (7) $ 1,000,000 $ 732,500 ----------------------------------------------------------------------------------------------------------- Bell Cablemedia plc, 0%/11.95% Sr. Disc. Nts., 7/15/04 (7) 900,000 792,000 ----------------------------------------------------------------------------------------------------------- Cablevision Industries Corp., 9.25% Sr. Debs., Series B, 4/1/08 500,000 530,922 ----------------------------------------------------------------------------------------------------------- Cablevision Systems Corp., 9.875% Sr. Sub. Nts., 5/15/06 250,000 257,813 ----------------------------------------------------------------------------------------------------------- EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04 (7) 900,000 749,250 ----------------------------------------------------------------------------------------------------------- Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B, 11/1/03 (4) 650,000 666,250 ----------------------------------------------------------------------------------------------------------- International CableTel, Inc., 0%/10.875% Sr. Deferred Coupon Nts., 10/15/03 (7) 500,000 426,250 ----------------------------------------------------------------------------------------------------------- Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 1,000,000 1,104,535 ----------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp.: 0%/11.375% Sr. Sub. Disc. Nts., 8/1/03 (7) 1,000,000 932,500 9.75% Sr. Sec. Nts., 8/1/00 500,000 532,500 ----------------------------------------------------------------------------------------------------------- Rogers Cablesystems Ltd., 10% Sr. Sec. Second Priority Debs., 12/1/07 1,000,000 1,060,000 ----------------------------------------------------------------------------------------------------------- SCI Television, Inc., 11% Sr. Sec. Nts., 6/30/05 500,000 537,500 ----------------------------------------------------------------------------------------------------------- Sinclair Broadcast Group, Inc., 10% Sr. Sub. Nts., 9/30/05 500,000 511,875 ----------------------------------------------------------------------------------------------------------- TeleWest plc: 0%/11% Sr. Disc. Debs., 10/1/07 (7) 1,250,000 875,000 9.625% Sr. Debs., 10/1/06 500,000 515,000 ----------------------------------------------------------------------------------------------------------- Time Warner Entertainment LP/Time Warner, Inc.: 10.15% Sr. Nts., 5/1/12 500,000 602,999 8.375% Sr. Debs., 3/15/23 500,000 509,596 ----------------------------------------------------------------------------------------------------------- Time Warner, Inc., 9.125% Debs., 1/15/13 500,000 542,930 ----------------------------------------------------------------------------------------------------------- TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 1,000,000 1,082,025 ----------------------------------------------------------------------------------------------------------- Universal Outdoor, Inc., 9.75% Sr. Sub. Nts., 10/15/06 (8) 500,000 516,250 ------------ 13,788,923 - --------------------------------------------------------------------------------------------------------------- RETAIL: GENERAL - 0.1% ----------------------------------------------------------------------------------------------------------- Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 600,000 664,500 - --------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 0.4% ----------------------------------------------------------------------------------------------------------- Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01 1,000,000 1,107,500 ----------------------------------------------------------------------------------------------------------- Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 750,000 787,500 ------------ 1,895,000 - --------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 2.3% - --------------------------------------------------------------------------------------------------------------- FOOD - 0.6% ----------------------------------------------------------------------------------------------------------- Grand Union Co., 12% Sr. Nts., 9/1/04 1,500,000 1,597,500 ----------------------------------------------------------------------------------------------------------- Ralph's Grocery Co., 10.45% Sr. Nts., 6/15/04 600,000 640,500 ----------------------------------------------------------------------------------------------------------- RJR Nabisco, Inc., 8.625% Medium-Term Nts., 12/1/02 500,000 504,814 ------------ 2,742,814 - --------------------------------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 0.8% ----------------------------------------------------------------------------------------------------------- Genesis Health Ventures, Inc., 9.25% Sr. Sub. Nts., 10/1/06 (8) 1,900,000 1,961,750 ----------------------------------------------------------------------------------------------------------- Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., 7/15/02 1,000,000 1,130,000 ----------------------------------------------------------------------------------------------------------- Magellan Health Services, Inc., 11.25% Sr. Sub. Nts., Series A, 4/15/04 500,000 557,500 ------------ 3,649,250 43 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - --------------------------------------------------------------------------------------------------------------- HOUSEHOLD GOODS - 0.9% ----------------------------------------------------------------------------------------------------------- Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., Series B, 11.404%, 5/27/98 (3) $ 1,500,000 $ 1,258,125 ----------------------------------------------------------------------------------------------------------- Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 1,000,000 1,095,000 ----------------------------------------------------------------------------------------------------------- Repap New Brunswick, Inc., 10.625% Second Priority Sr. Sec. Nts., 4/15/05 1,000,000 1,050,000 ----------------------------------------------------------------------------------------------------------- Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts., Series B, 13.169%, 3/15/98 (3) 500,000 436,250 ----------------------------------------------------------------------------------------------------------- Samsonite Corp., 11.125% Sr. Sub. Nts., 7/15/05 500,000 552,500 ------------ 4,391,875 - --------------------------------------------------------------------------------------------------------------- ENERGY - 1.3% ----------------------------------------------------------------------------------------------------------- J. Ray McDermott SA, 9.375% Sr. Sub. Bonds, 7/15/06 750,000 789,375 ----------------------------------------------------------------------------------------------------------- Mesa Operating Co., 10.625% Gtd. Sr. Sub. Nts., 7/1/06 1,500,000 1,631,250 ----------------------------------------------------------------------------------------------------------- OPI International, Inc., 12.875% Sr. Gtd. Nts., 7/15/02 (9) 1,000,000 1,097,500 ----------------------------------------------------------------------------------------------------------- TransTexas Gas Corp., 11.50% Sr. Sec. Gtd. Nts., 6/15/02 1,350,000 1,466,438 ----------------------------------------------------------------------------------------------------------- Triton Energy Corp., 0%/9.75% Sr. Sub. Disc. Nts., 12/15/00 1,000,000 1,050,000 ------------ 6,034,563 - --------------------------------------------------------------------------------------------------------------- FINANCIAL - 0.3% - --------------------------------------------------------------------------------------------------------------- BANKS - 0.1% ----------------------------------------------------------------------------------------------------------- First Chicago Corp.: 11.25% Sub. Nts., 2/20/01 250,000 290,585 9% Sub. Nts., 6/15/99 250,000 265,040 ------------ 555,625 - --------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 0.2% ----------------------------------------------------------------------------------------------------------- GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 1,000,000 1,022,500 - --------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 1.3% - --------------------------------------------------------------------------------------------------------------- INDUSTRIAL MATERIALS - 0.6% ----------------------------------------------------------------------------------------------------------- American Standard, Inc., 10.875% Sr. Nts., 5/15/99 500,000 535,000 ----------------------------------------------------------------------------------------------------------- Owens-Illinois, Inc.: 10% Sr. Sub. Nts., 8/1/02 500,000 525,000 11% Sr. Debs., 12/1/03 500,000 558,750 ----------------------------------------------------------------------------------------------------------- Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 425,000 433,500 ----------------------------------------------------------------------------------------------------------- Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03 850,000 911,625 ------------ 2,963,875 - --------------------------------------------------------------------------------------------------------------- INDUSTRIAL SERVICES - 0.4% ----------------------------------------------------------------------------------------------------------- Allied Waste North America, Inc., 10.25% Sr. Sub. Nts., 12/1/06 (8) 285,000 300,319 ----------------------------------------------------------------------------------------------------------- EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 750,000 708,750 ----------------------------------------------------------------------------------------------------------- Iron Mountain, Inc., 10.125% Sr. Sub. Nts., 10/1/06 1,000,000 1,065,000 ------------ 2,074,069 - --------------------------------------------------------------------------------------------------------------- MANUFACTURING - 0.3% ----------------------------------------------------------------------------------------------------------- Mettler Toledo, Inc., 9.75% Gtd. Sr. Sub. Nts., 10/1/06 500,000 527,500 ----------------------------------------------------------------------------------------------------------- Terex Corp., 13.25% Sr. Sec. Nts., 5/15/02 1,000,000 1,080,000 ------------ 1,607,500 - --------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 1.7% - --------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.1% ----------------------------------------------------------------------------------------------------------- Unisys Corp., 15% Credit Sensitive Nts., 7/1/97 (4) 650,000 685,750 44 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - --------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 1.6% ----------------------------------------------------------------------------------------------------------- 360 Communications Co., 7.50% Sr. Nts., 3/1/06 $ 500,000 $ 496,854 ----------------------------------------------------------------------------------------------------------- Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc. Nts., 12/1/04 (7) 800,000 660,000 ----------------------------------------------------------------------------------------------------------- IntelCom Group (USA), Inc., 0%/13.50% Sr. Disc. Nts., 9/15/05 (7) 900,000 643,500 ----------------------------------------------------------------------------------------------------------- MFS Communications Co., Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (7) 1,850,000 1,618,750 ----------------------------------------------------------------------------------------------------------- Omnipoint Corp., 11.625% Sr. Nts., 8/15/06 1,000,000 1,045,000 ----------------------------------------------------------------------------------------------------------- PriCellular Wireless Corp., 0%/14% Sr. Sub. Disc. Nts., 11/15/01 (7) 1,000,000 977,500 ----------------------------------------------------------------------------------------------------------- Teleport Communications Group, Inc.: 0%/11.125% Sr. Disc. Nts., 7/1/07 (7) 1,600,000 1,104,000 9.875% Sr. Nts., 7/1/06 400,000 430,000 ----------------------------------------------------------------------------------------------------------- USA Mobile Communications, Inc. II, 9.50% Sr. Nts., 2/1/04 1,000,000 955,000 ------------ 7,930,604 - --------------------------------------------------------------------------------------------------------------- UTILITIES - 0.7% - --------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES - 0.5% ----------------------------------------------------------------------------------------------------------- Calfornia Energy, Inc., 0%/10.25% Sr. Disc. Nts., 1/15/04 (7) 750,000 796,875 ----------------------------------------------------------------------------------------------------------- Calpine Corp., 10.50% Sr. Nts., 5/15/06 800,000 851,000 ----------------------------------------------------------------------------------------------------------- First PV Funding Corp., 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 770,000 821,013 ------------ 2,468,888 - --------------------------------------------------------------------------------------------------------------- GAS UTILITIES - 0.2% ----------------------------------------------------------------------------------------------------------- Beaver Valley II Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17 989,000 951,913 ------------ Total Non-Convertible Corporate Bonds and Notes (Cost $63,199,248) 66,099,973 - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES - 0.2% ----------------------------------------------------------------------------------------------------------- Castorama Dubois Investissements SA, 3.15% Cv. Bonds, 1/1/03 FRF 165,000 38,530 ----------------------------------------------------------------------------------------------------------- MEDIQ, Inc., 7.50% Exchangeable Sub. Debs., 7/15/03 1,000,000 930,000 ------------ Total Convertible Corporate Bonds and Notes (Cost $971,148) 968,530 SHARES - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 45.6% - --------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 2.9% - --------------------------------------------------------------------------------------------------------------- CHEMICALS - 1.6% ----------------------------------------------------------------------------------------------------------- Agrium, Inc. 141,000 1,938,750 ----------------------------------------------------------------------------------------------------------- Bayer AG, Sponsored ADR 56,000 2,281,989 ----------------------------------------------------------------------------------------------------------- Dow Chemical Co. (11) 8,000 627,000 ----------------------------------------------------------------------------------------------------------- Georgia Gulf Corp. 29,000 779,375 ----------------------------------------------------------------------------------------------------------- Great Lakes Chemical Corp. 16,500 771,375 ----------------------------------------------------------------------------------------------------------- Monsanto Co. (11) 18,000 699,750 ----------------------------------------------------------------------------------------------------------- Sybron Chemical Industries, Inc. (10) 48,000 768,000 ------------ 7,866,239 45 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - --------------------------------------------------------------------------------------------------------------- METALS - 0.8% ----------------------------------------------------------------------------------------------------------- Alumax, Inc. (10) 32,918 $ 1,098,638 ----------------------------------------------------------------------------------------------------------- Brush Wellman, Inc. 83,500 1,367,312 ----------------------------------------------------------------------------------------------------------- Custom Chrome, Inc. (10) 45,000 905,625 ----------------------------------------------------------------------------------------------------------- Inco Ltd. 15,200 484,500 ------------ 3,856,075 - --------------------------------------------------------------------------------------------------------------- PAPER - 0.5% ----------------------------------------------------------------------------------------------------------- Aracruz Celulose SA, Sponsored ADR, Cl. B 139,000 1,146,750 ----------------------------------------------------------------------------------------------------------- MacMillan Bloedel Ltd. 91,830 1,202,601 ----------------------------------------------------------------------------------------------------------- MacMillan Bloedel Ltd. 4,200 54,600 ------------ 2,403,951 - --------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 10.0% - --------------------------------------------------------------------------------------------------------------- AUTOS & HOUSING - 1.3% ----------------------------------------------------------------------------------------------------------- AutoZone, Inc. (10) 38,500 1,058,750 ----------------------------------------------------------------------------------------------------------- Black & Decker Corp. 20,000 602,500 ----------------------------------------------------------------------------------------------------------- Chromcraft Revington, Inc. (10) 7,400 205,350 ----------------------------------------------------------------------------------------------------------- Duracell International, Inc. 20,000 1,397,500 ----------------------------------------------------------------------------------------------------------- Eaton Corp. (11) 16,000 1,116,000 ----------------------------------------------------------------------------------------------------------- General Motors Corp. (11) 25,000 1,393,750 ----------------------------------------------------------------------------------------------------------- IRSA Inversiones y Representaciones SA 214,506 688,685 ------------ 6,462,535 - --------------------------------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 4.7% ----------------------------------------------------------------------------------------------------------- Alaska Air Group, Inc. (10) 45,000 945,000 ----------------------------------------------------------------------------------------------------------- AMR Corp. (10)(11) 25,500 2,247,187 ----------------------------------------------------------------------------------------------------------- Brinker International, Inc. (10) 58,800 940,800 ----------------------------------------------------------------------------------------------------------- Carnival Corp., Cl. A 34,100 1,125,300 ----------------------------------------------------------------------------------------------------------- Cheesecake Factory (The) (10) 30,000 543,750 ----------------------------------------------------------------------------------------------------------- Choice Hotels International, Inc. (10) 24,985 440,361 ----------------------------------------------------------------------------------------------------------- Circus Circus Enterprises, Inc. (10) 25,500 876,562 ----------------------------------------------------------------------------------------------------------- Cracker Barrel Old Country Store, Inc. 70,000 1,776,250 ----------------------------------------------------------------------------------------------------------- Disney (Walt) Co. (11) 20,793 1,447,713 ----------------------------------------------------------------------------------------------------------- Eastman Kodak Co. (11) 20,000 1,605,000 ----------------------------------------------------------------------------------------------------------- Gaylord Entertainment Co., Cl. A 50,000 1,143,750 ----------------------------------------------------------------------------------------------------------- International Game Technology 88,000 1,606,000 ----------------------------------------------------------------------------------------------------------- King World Productions, Inc. (10)(11) 31,000 1,143,125 ----------------------------------------------------------------------------------------------------------- Mattel, Inc. (11) 39,296 1,090,471 ----------------------------------------------------------------------------------------------------------- Nintendo Co. Ltd. 32,000 2,285,517 ----------------------------------------------------------------------------------------------------------- Outback Steakhouse, Inc. (10)(11) 14,600 390,550 ----------------------------------------------------------------------------------------------------------- Primadonna Resorts, Inc. (10)(11) 55,000 935,000 ----------------------------------------------------------------------------------------------------------- Shangri-La Asia Ltd. 725,000 1,073,207 ----------------------------------------------------------------------------------------------------------- Shimano, Inc. 70,000 1,188,076 ------------ 22,803,619 - --------------------------------------------------------------------------------------------------------------- MEDIA - 1.3% ----------------------------------------------------------------------------------------------------------- Comcast Corp., Cl. A Special 93,000 1,656,562 ----------------------------------------------------------------------------------------------------------- Dow Jones & Co., Inc. 36,000 1,219,500 ----------------------------------------------------------------------------------------------------------- South China Morning Post Holdings Ltd. 1,800,000 1,489,335 ----------------------------------------------------------------------------------------------------------- Time Warner, Inc. 16,500 618,750 ----------------------------------------------------------------------------------------------------------- U S West Media Group (10) 75,000 1,387,500 ------------ 6,371,647 46 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - --------------------------------------------------------------------------------------------------------------- RETAIL: GENERAL - 1.0% ----------------------------------------------------------------------------------------------------------- Cone Mills Corp. (10) 196,300 $ 1,545,862 ----------------------------------------------------------------------------------------------------------- Donna Karan International, Inc. (10) 71,500 1,009,937 ----------------------------------------------------------------------------------------------------------- Price/Costco, Inc. (10)(11) 58,900 1,479,862 ----------------------------------------------------------------------------------------------------------- Starter Corp. (10) 100,000 575,000 ------------ 4,610,661 - --------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 1.7% ----------------------------------------------------------------------------------------------------------- Books-A-Million, Inc. (10) 120,000 825,000 ----------------------------------------------------------------------------------------------------------- Burlington Coat Factory Warehouse Corp. (10) 62,000 806,000 ----------------------------------------------------------------------------------------------------------- Castorama Dubois Investissements SA 4,131 709,592 ----------------------------------------------------------------------------------------------------------- General Nutrition Cos., Inc. (10) 68,000 1,147,500 ----------------------------------------------------------------------------------------------------------- Gymboree Corp. (10)(11) 61,900 1,415,962 ----------------------------------------------------------------------------------------------------------- Movie Gallery, Inc. (10) 50,000 650,000 ----------------------------------------------------------------------------------------------------------- Toys 'R' Us, Inc. (10)(11) 60,500 1,815,000 ----------------------------------------------------------------------------------------------------------- Tractor Supply Co. (10) 46,300 954,937 ------------ 8,323,991 - --------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 7.8% - --------------------------------------------------------------------------------------------------------------- BEVERAGES - 0.3% ----------------------------------------------------------------------------------------------------------- Guinness plc 100,000 783,698 ----------------------------------------------------------------------------------------------------------- PepsiCo, Inc. 27,000 789,750 ------------ 1,573,448 - --------------------------------------------------------------------------------------------------------------- FOOD - 0.9% ----------------------------------------------------------------------------------------------------------- Chiquita Brands International, Inc. 69,080 880,770 ----------------------------------------------------------------------------------------------------------- Grand Union Co. (10) 6,185 30,925 ----------------------------------------------------------------------------------------------------------- Groupe Danone 6,513 905,777 ----------------------------------------------------------------------------------------------------------- Nestle SA, Sponsored ADR 12,000 642,128 ----------------------------------------------------------------------------------------------------------- Sara Lee Corp. 48,000 1,788,000 ------------ 4,247,600 - --------------------------------------------------------------------------------------------------------------- HEALTHCARE/DRUGS - 2.9% ----------------------------------------------------------------------------------------------------------- Abbott Laboratories 22,000 1,116,500 ----------------------------------------------------------------------------------------------------------- Agouron Pharmaceuticals, Inc. (10)(11) 11,400 772,350 ----------------------------------------------------------------------------------------------------------- American Home Products Corp. 19,000 1,113,875 ----------------------------------------------------------------------------------------------------------- Astra AB Free, Series A 14,500 715,653 ----------------------------------------------------------------------------------------------------------- Bristol-Myers Squibb Co. (11) 18,800 2,044,500 ----------------------------------------------------------------------------------------------------------- Genzyme Corp. (10) 55,000 1,196,250 ----------------------------------------------------------------------------------------------------------- Johnson & Johnson 29,800 1,482,550 ----------------------------------------------------------------------------------------------------------- Mylan Laboratories, Inc. 84,000 1,407,000 ----------------------------------------------------------------------------------------------------------- Novartis AG (10) 2,346 2,678,455 ----------------------------------------------------------------------------------------------------------- SmithKline Beecham plc, ADR 24,400 1,659,200 ------------ 14,186,333 - --------------------------------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 2.5% ----------------------------------------------------------------------------------------------------------- Alternative Living Services, Inc. (10) 73,000 1,058,500 ----------------------------------------------------------------------------------------------------------- Biomet, Inc. 50,000 756,250 ----------------------------------------------------------------------------------------------------------- Datascope Corp. (10) 35,000 700,000 ----------------------------------------------------------------------------------------------------------- Heartport, Inc. (10) 26,000 594,750 ----------------------------------------------------------------------------------------------------------- HemaSure, Inc. (10) 128,000 800,000 ----------------------------------------------------------------------------------------------------------- Innovasive Devices, Inc. (10) 85,000 658,750 ----------------------------------------------------------------------------------------------------------- Integrated Health Services, Inc. 32,500 792,187 ----------------------------------------------------------------------------------------------------------- Manor Care, Inc. (11) 24,985 674,595 47 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - --------------------------------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES (CONTINUED) ----------------------------------------------------------------------------------------------------------- Medtronic, Inc. (11) 15,700 $ 1,067,600 ----------------------------------------------------------------------------------------------------------- Nellcor Puritan Bennett, Inc. (10) 68,400 1,496,250 ----------------------------------------------------------------------------------------------------------- PerSeptive Biosystems, Inc. (10) 440 3,053 ----------------------------------------------------------------------------------------------------------- Sofamor Danek Group, Inc. (10)(11) 30,000 915,000 ----------------------------------------------------------------------------------------------------------- United Healthcare Corp. (11) 22,000 990,000 ----------------------------------------------------------------------------------------------------------- WellPoint Health Networks, Inc. (10)(11) 49,981 1,718,097 ------------ 12,225,032 - --------------------------------------------------------------------------------------------------------------- HOUSEHOLD GOODS - 0.7% ----------------------------------------------------------------------------------------------------------- Kimberly-Clark Corp. (11) 13,100 1,247,775 ----------------------------------------------------------------------------------------------------------- Procter & Gamble Co. (11) 13,200 1,419,000 ----------------------------------------------------------------------------------------------------------- Scott's Liquid Gold, Inc. (10) 57,200 92,950 ----------------------------------------------------------------------------------------------------------- Wella AG 1,550 819,702 ------------ 3,579,427 - --------------------------------------------------------------------------------------------------------------- TOBACCO - 0.5% ----------------------------------------------------------------------------------------------------------- Philip Morris Cos., Inc. (11) 21,300 2,398,913 - --------------------------------------------------------------------------------------------------------------- ENERGY - 3.2% - --------------------------------------------------------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 0.7% ----------------------------------------------------------------------------------------------------------- Kerr-McGee Corp. (11) 12,000 864,000 ----------------------------------------------------------------------------------------------------------- Weatherford Enterra, Inc. (10) 29,000 870,000 ----------------------------------------------------------------------------------------------------------- Western Atlas, Inc. (10)(11) 22,000 1,559,250 ------------ 3,293,250 - --------------------------------------------------------------------------------------------------------------- OIL-INTEGRATED - 2.5% ----------------------------------------------------------------------------------------------------------- Atlantic Richfield Co. (11) 14,300 1,894,750 ----------------------------------------------------------------------------------------------------------- Elan Energy, Inc. (10) 121,000 1,059,349 ----------------------------------------------------------------------------------------------------------- Enterprise Oil plc 118,000 1,305,786 ----------------------------------------------------------------------------------------------------------- Louisiana Land & Exploration Co. 31,000 1,662,375 ----------------------------------------------------------------------------------------------------------- Royal Dutch Petroleum Co. (11) 9,500 1,622,125 ----------------------------------------------------------------------------------------------------------- Talisman Energy, Inc. (10) 19,000 632,108 ----------------------------------------------------------------------------------------------------------- Total SA, Sponsored ADR 21,701 873,465 ----------------------------------------------------------------------------------------------------------- Unocal Corp. 36,000 1,462,500 ----------------------------------------------------------------------------------------------------------- YPF SA, Cl. D, ADR 52,000 1,313,000 ------------ 11,825,458 - --------------------------------------------------------------------------------------------------------------- FINANCIAL - 5.5% - --------------------------------------------------------------------------------------------------------------- BANKS - 3.0% ----------------------------------------------------------------------------------------------------------- Akbank T.A.S. 2,660,750 359,742 ----------------------------------------------------------------------------------------------------------- Banco Frances del Rio de la Plata SA 100,050 935,632 ----------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New) (11) 61,000 5,444,250 ----------------------------------------------------------------------------------------------------------- Citicorp (11) 13,000 1,339,000 ----------------------------------------------------------------------------------------------------------- Deutsche Bank, Sponsored ADR 13,250 618,175 ----------------------------------------------------------------------------------------------------------- NationsBank Corp. (11) 49,600 4,848,400 ----------------------------------------------------------------------------------------------------------- PNC Bank Corp. 29,000 1,091,125 ------------ 14,636,324 - --------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 1.2% ----------------------------------------------------------------------------------------------------------- American Express Co. (11) 38,000 2,147,000 ----------------------------------------------------------------------------------------------------------- Dean Witter, Discover & Co. (11) 23,000 1,523,750 ----------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. (11) 9,700 1,068,213 ----------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc. 10,500 855,750 ------------ 5,594,713 48 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - --------------------------------------------------------------------------------------------------------------- INSURANCE - 1.3% ----------------------------------------------------------------------------------------------------------- ACE Ltd. 27,000 $ 1,623,375 ----------------------------------------------------------------------------------------------------------- American International Group, Inc. (11) 12,600 1,363,950 ----------------------------------------------------------------------------------------------------------- Equitable Cos., Inc. 35,000 861,875 ----------------------------------------------------------------------------------------------------------- Skandia Forsakrings AB 40,000 1,130,634 ----------------------------------------------------------------------------------------------------------- UNUM Corp. 21,000 1,517,250 ------------ 6,497,084 - --------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 4.5% - --------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 0.5% ----------------------------------------------------------------------------------------------------------- Core Industries, Inc. 50,000 825,000 ----------------------------------------------------------------------------------------------------------- General Electric Co. (11) 14,400 1,423,800 ------------ 2,248,800 - --------------------------------------------------------------------------------------------------------------- INDUSTRIAL MATERIALS - 0.8% ----------------------------------------------------------------------------------------------------------- Owens Corning 33,000 1,406,625 ----------------------------------------------------------------------------------------------------------- Rubbermaid, Inc. 33,000 750,750 ----------------------------------------------------------------------------------------------------------- Wolverine Tube, Inc. (10) 51,000 1,797,750 ------------ 3,955,125 - --------------------------------------------------------------------------------------------------------------- INDUSTRIAL SERVICES - 0.4% ----------------------------------------------------------------------------------------------------------- Calgon Carbon Corp. 84,500 1,035,125 ----------------------------------------------------------------------------------------------------------- Ecolab, Inc. 23,400 880,425 ------------ 1,915,550 - --------------------------------------------------------------------------------------------------------------- MANUFACTURING - 1.6% ----------------------------------------------------------------------------------------------------------- AGCO Corp. 39,600 1,133,550 ----------------------------------------------------------------------------------------------------------- Citic Pacific Ltd. 162,000 940,375 ----------------------------------------------------------------------------------------------------------- Cognex Corp. (10) 40,000 740,000 ----------------------------------------------------------------------------------------------------------- Hutchison Whampoa Ltd. 128,000 1,005,301 ----------------------------------------------------------------------------------------------------------- Mannesmann AG 2,100 902,350 ----------------------------------------------------------------------------------------------------------- Tenneco, Inc. (New) (11) 28,500 1,286,063 ----------------------------------------------------------------------------------------------------------- Trinity Industries, Inc. 23,000 862,500 ----------------------------------------------------------------------------------------------------------- Westinghouse Air Brake Co. 71,200 898,900 ------------ 7,769,039 - --------------------------------------------------------------------------------------------------------------- TRANSPORTATION - 1.2% ----------------------------------------------------------------------------------------------------------- Airborne Freight Corp. 32,000 748,000 ----------------------------------------------------------------------------------------------------------- Burlington Northern Santa Fe Corp. 15,600 1,347,450 ----------------------------------------------------------------------------------------------------------- Canadian National Railway Co. 30,000 1,140,332 ----------------------------------------------------------------------------------------------------------- Newport News Shipbuilding, Inc. (10) 5,700 85,500 ----------------------------------------------------------------------------------------------------------- Spartan Motors, Inc. 108,000 729,000 ----------------------------------------------------------------------------------------------------------- Stolt-Nielsen SA 66,100 1,247,638 ----------------------------------------------------------------------------------------------------------- Stolt-Nielsen SA, Sponsored ADR 22,050 413,438 ------------ 5,711,358 - --------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 10.3% - --------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.3% ----------------------------------------------------------------------------------------------------------- Boeing Co. 1,008 107,226 ----------------------------------------------------------------------------------------------------------- Rockwell International Corp. 24,000 1,461,000 ------------ 1,568,226 - --------------------------------------------------------------------------------------------------------------- COMPUTER HARDWARE - 2.0% ----------------------------------------------------------------------------------------------------------- International Business Machines Corp. (11) 19,200 2,899,200 ----------------------------------------------------------------------------------------------------------- Komag, Inc. (10) 25,000 678,125 ----------------------------------------------------------------------------------------------------------- Moore Corp. Ltd. 65,600 1,336,600 49 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - --------------------------------------------------------------------------------------------------------------- COMPUTER HARDWARE (CONTINUED) ----------------------------------------------------------------------------------------------------------- Optical Data Systems, Inc. (10) 58,700 $ 704,400 ----------------------------------------------------------------------------------------------------------- Seagate Technology (10)(11) 28,000 1,106,000 ----------------------------------------------------------------------------------------------------------- Xerox Corp. (11) 51,000 2,683,875 ------------ 9,408,200 - --------------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE - 2.5% ----------------------------------------------------------------------------------------------------------- America Online, Inc. (10) 32,540 1,081,955 ----------------------------------------------------------------------------------------------------------- American Software, Inc. (10) 100,000 637,500 ----------------------------------------------------------------------------------------------------------- Arbor Software Corp. (10) 7,000 169,750 ----------------------------------------------------------------------------------------------------------- Astea International, Inc. (10) 50,000 284,375 ----------------------------------------------------------------------------------------------------------- Business Objects SA, Sponsored ADR (10) 45,000 607,500 ----------------------------------------------------------------------------------------------------------- Computer Associates International, Inc. (11) 45,975 2,287,256 ----------------------------------------------------------------------------------------------------------- Electronic Arts, Inc. (10)(11) 37,200 1,113,675 ----------------------------------------------------------------------------------------------------------- Inference Corp., Cl. A (10) 112,500 815,625 ----------------------------------------------------------------------------------------------------------- Microsoft Corp. (10)(11) 9,800 809,725 ----------------------------------------------------------------------------------------------------------- Novell, Inc. (10) 158,000 1,496,063 ----------------------------------------------------------------------------------------------------------- Sabre Group Holdings, Inc. (10) 22,000 613,250 ----------------------------------------------------------------------------------------------------------- Structural Dynamics Research Corp. (10)(11) 31,000 620,000 ----------------------------------------------------------------------------------------------------------- Symantec Corp. (10)(11) 110,364 1,600,278 ------------ 12,136,952 - --------------------------------------------------------------------------------------------------------------- ELECTRONICS - 3.7% ----------------------------------------------------------------------------------------------------------- CAE, Inc. 75,433 569,606 ----------------------------------------------------------------------------------------------------------- Cypress Semiconductor Corp. (10) 75,000 1,059,375 ----------------------------------------------------------------------------------------------------------- General Motors Corp., Cl. H 17,000 956,250 ----------------------------------------------------------------------------------------------------------- Hewlett-Packard Co. 31,500 1,582,875 ----------------------------------------------------------------------------------------------------------- Input/Output, Inc. (10) 53,000 980,500 ----------------------------------------------------------------------------------------------------------- Intel Corp. (11) 55,400 7,253,938 ----------------------------------------------------------------------------------------------------------- Kyocera Corp. 14,000 870,854 ----------------------------------------------------------------------------------------------------------- LSI Logic Corp. (10)(11) 37,800 1,011,150 ----------------------------------------------------------------------------------------------------------- Nokia Corp., A Shares, Sponsored ADR (11) 23,000 1,325,375 ----------------------------------------------------------------------------------------------------------- Novellus Systems, Inc. (10)(11) 15,000 812,813 ----------------------------------------------------------------------------------------------------------- Proxima Corp. (10) 56,000 721,000 ----------------------------------------------------------------------------------------------------------- Xilinx, Inc. (10)(11) 18,200 669,988 ------------ 17,813,724 - --------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 1.8% ----------------------------------------------------------------------------------------------------------- Airtouch Communications, Inc. (10) 72,000 1,818,000 ----------------------------------------------------------------------------------------------------------- Bay Networks, Inc. (10) 16,607 346,671 ----------------------------------------------------------------------------------------------------------- Cisco Systems, Inc. (10) 13,500 858,938 ----------------------------------------------------------------------------------------------------------- ECI Telecommunications Ltd. (11) 70,000 1,487,500 ----------------------------------------------------------------------------------------------------------- Kinnevik Investments AB Free, Series B 24,500 674,573 ----------------------------------------------------------------------------------------------------------- MCI Communications Corp. (11) 57,000 1,863,188 ----------------------------------------------------------------------------------------------------------- Newbridge Networks Corp. (10) 31,000 875,750 ----------------------------------------------------------------------------------------------------------- Tellabs, Inc. (10)(11) 19,200 722,400 ------------ 8,647,020 - --------------------------------------------------------------------------------------------------------------- UTILITIES - 1.4% - --------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES - 0.3% ----------------------------------------------------------------------------------------------------------- Public Service Enterprise Group, Inc. 52,000 1,417,000 50 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - --------------------------------------------------------------------------------------------------------------- GAS UTILITIES - 0.3% ----------------------------------------------------------------------------------------------------------- El Paso Natural Gas Co. 2,651 $ 133,876 ----------------------------------------------------------------------------------------------------------- Southwestern Energy Co. 92,000 1,391,500 ------------ 1,525,376 - --------------------------------------------------------------------------------------------------------------- TELEPHONE UTILITIES - 0.8% ----------------------------------------------------------------------------------------------------------- BCE, Inc. (11) 28,000 1,337,000 ----------------------------------------------------------------------------------------------------------- SBC Communications, Inc. 16,000 828,000 ----------------------------------------------------------------------------------------------------------- U S West Communications Group 55,000 1,773,750 ------------ 3,938,750 ------------ Total Common Stocks (Cost $165,892,959) 220,811,420 - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 0.5% ----------------------------------------------------------------------------------------------------------- Cyprus Amax Minerals Co., $4.00 Cv., Series A 24,000 1,287,000 ----------------------------------------------------------------------------------------------------------- K-III Communications Corp., Sr. Exchangeable, Series A 20,000 537,500 ----------------------------------------------------------------------------------------------------------- Pantry Pride, Inc., $14.875 Exchangeable, Series B 8,000 804,000 ----------------------------------------------------------------------------------------------------------- Time Warner, Inc., 10.25% Preferred, Series M (5) 1 1,090 ------------ Total Preferred Stocks (Cost $2,661,833) 2,629,590 UNITS - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% ----------------------------------------------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99 6,000 10,500 ----------------------------------------------------------------------------------------------------------- Gaylord Container Corp. Wts., Exp. 11/02 9,232 56,546 ----------------------------------------------------------------------------------------------------------- Hong Kong & China Gas Co. Ltd. Wts., Exp. 9/97 29,376 16,331 ----------------------------------------------------------------------------------------------------------- Icon Health & Fitness, Inc. Wts., Exp. 11/99 (9) 1,000 50,000 ----------------------------------------------------------------------------------------------------------- PerSeptive Biosystems, Inc. Wts., Exp. 9/03 249 -- ----------------------------------------------------------------------------------------------------------- Terex Corp. Rts., Exp. 5/02 (9) 4,000 9,000 ------------ Total Rights, Warrants and Certificates (Cost $28,557) 142,377 PRINCIPAL AMOUNT(1) - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT - 15.2% ----------------------------------------------------------------------------------------------------------- Repurchase agreement with Goldman, Sachs & Co., 6.52%, dated 12/31/96, to be repurchased at $73,626,660 on 1/2/97, collateralized by U.S. Treasury Nts., 5.50%- 7.50%, 7/15/99-8/15/05, with a value of $75,287,498 (Cost $73,600,000) $ 73,600,000 73,600,000 ----------------------------------------------------------------------------------------------------------- Total Investments, at Value (Cost $424,386,458) 101.3% 490,493,991 ----------------------------------------------------------------------------------------------------------- Liabilities in Excess of Other Assets (1.3) (6,208,511) ------------ ------------ Net Assets 100.0% $484,285,480 ------------ ------------ ------------ ------------
51 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) 1. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: AUD - Australian Dollar IEP - Irish Punt CAD - Canadian Dollar ITL - Italian Lira DKK - Danish Krone NZD - New Zealand Dollar FRF - French Franc PLZ - Polish Zloty GBP - British Pound Sterling ZAR - South African Rand HKD - Hong Kong Dollar 2. When-issued security to be delivered and settled after December 31, 1996. 3. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 4. Represents the current interest rate for a variable rate security. 5. Interest or dividend is paid in kind. 6. Represents the current interest rate for an increasing rate security. 7. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 8. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $4,062,694 or 0.84% of the Fund's net assets, at December 31, 1996. 9. Identifies issues considered to be illiquid - See applicable note of Notes to Financial Statements. 10. Non-income producing security. 11. A sufficient amount of securities has been designated to cover outstanding written call options, as follows: SHARES SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED (NOTE 1) - ------------------------------------------------------------------------------------------------- AMR Corp. 4,400 1/97 $ 95.00 $ 11,417 $ 2,750 Agouron Pharmaceuticals, Inc. 11,400 2/97 45.00 38,131 267,900 American Express Co. 7,600 7/97 60.00 11,646 25,650 American International Group, Inc. 2,400 2/97 100.00 8,6272 3,700 Atlantic Richfield Co. 2,800 7/97 145.00 6,040 6,475 BCE, Inc. 5,600 6/97 50.00 5,781 10,150 Bristol-Myers Squibb Co. 4,600 3/97 120.00 9,061 9,200 Chase Manhattan Corp. (New) 11,600 3/97 80.00 44,600 139,200 Citicorp 2,600 1/97 90.00 12,271 38,675 Citicorp 2,600 4/97 115.00 7,071 6,663 Computer Associates International, Inc. 9,000 1/97 55.00 28,979 5,063 Computer Associates International, Inc. 9,000 1/97 60.00 42,479 1,688 Dean Witter, Discover & Co. 4,600 4/97 70.00 9,975 12,938 Dean Witter, Discover & Co. 4,600 7/97 70.00 14,812 20,700 Disney (Walt) Co. 4,000 7/97 80.00 9,880 7,500 Dow Chemical Co. 2,000 3/97 90.00 3,815 750 ECI Telecommunications Ltd. 10,800 2/97 25.00 19,925 5,400 Eastman Kodak Co. 8,000 7/97 90.00 24,259 18,000 Eaton Corp. 3,200 7/97 75.00 5,504 7,000 Electronic Arts, Inc. 9,000 3/97 30.00 32,354 29,250 Electronic Arts, Inc. 11,900 6/97 40.00 26,417 19,338 Electronic Arts, Inc. 5,400 6/97 45.00 15,131 5,738 Federal Home Loan Mortgage Corp. 1,800 4/97 28.75 7,821 9,900 Federal Home Loan Mortgage Corp. 1,800 7/97 30.00 10,521 13,050 General Electric Co. 2,800 3/97 110.00 8,666 4,550
52 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) 11. Outstanding written call options (continued) SHARES SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED (NOTE 1) - ------------------------------------------------------------------------------------------------- General Motors Corp. 5,000 3/97 $ 60.00 $ 7,350 $ 4,688 Gymboree Corp. 10,000 1/97 35.00 13,450 -- Intel Corp. 11,000 1/97 90.00 34,044 457,875 Intel Corp. 11,000 4/97 135.00 56,043 126,500 International Business Machines Corp. 3,800 4/97 175.00 21,735 13,300 Kerr-McGee Corp. 2,400 7/97 75.00 4,728 6,900 Kimberly-Clark Corp. 2,600 7/97 100.00 12,597 12,350 King World Productions, Inc. 6,200 5/97 40.00 9,114 8,138 LSI Logic Corp. 7,400 7/97 35.00 20,127 12,950 MCI Communications Corp. 11,400 7/97 32.50 23,882 31,350 Manor Care, Inc. 4,800 4/97 40.00 6,456 27,600 Mattel, Inc. 6,400 7/97 35.00 6,608 4,800 Medtronic, Inc. 3,000 2/97 55.00 9,660 43,125 Medtronic, Inc. 3,000 7/97 70.00 11,910 12,000 Microsoft Corp. 9,800 1/97 62.50 43,952 198,450 Monsanto Co. 3,600 7/97 45.00 7,092 6,750 NationsBank Corp. 9,800 2/97 90.00 51,154 94,325 Nokia Corp., A Shares, Sponsored ADR 4,600 4/97 45.00 12,512 60,375 Nokia Corp., A Shares, Sponsored ADR 4,600 4/97 60.00 15,961 16,100 Novellus Systems, Inc. 3,000 7/97 65.00 18,284 12,000 Outback Steakhouse, Inc. 14,600 5/97 30.00 28,761 18,250 Philip Morris Cos., Inc. 4,200 6/97 110.00 18,773 41,474 Price/Costco, Inc. 11,600 4/97 25.00 14,152 23,925 Primadonna Resorts, Inc. 11,000 4/97 22.50 11,357 6,875 Procter & Gamble Co. 2,600 7/97 115.00 8,372 11,700 Royal Dutch Petroleum Co. 1,800 7/97 175.00 11,421 14,625 Seagate Technology 14,000 1/97 25.00 39,164 204,750 Seagate Technology 14,000 6/97 42.50 44,414 57,750 Sofamor Danek Group, Inc. 2,600 3/97 30.00 11,947 9,100 Structural Dynamics Research Corp. 30,100 2/97 22.50 54,576 22,574 Symantec Corp. 22,000 4/97 17.50 24,089 24,750 Tellabs, Inc. 5,200 6/97 45.00 30,146 16,250 Tenneco, Inc. (New) 5,500 8/97 50.00 8,772 8,936 Toys 'R' Us, Inc. 10,000 3/97 35.00 10,325 3,750 Toys 'R' Us, Inc. 9,800 6/97 40.00 15,018 4,900 United Healthcare Corp. 4,400 3/97 47.50 9,768 9,900 WellPoint Health Networks, Inc. 10,000 7/97 35.00 34,699 36,250 Western Atlas, Inc. 4,400 6/97 70.00 23,517 25,850 Xerox Corp. 5,000 1/97 55.00 10,615 2,187 Xilinx, Inc. 3,600 6/97 45.00 15,641 10,800 Xilinx, Inc. 3,600 6/97 50.00 7,767 6,750 ---------- ---------- $1,235,136 $2,402,150 ---------- ---------- ---------- ----------
See accompanying Notes to Financial Statements. 53 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1996 PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 0.9% - ---------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, Zero Coupon, 36.92%, 4/3/97 (Cost $5,151,307) (2) MXP 41,760,000 $ 4,978,611 SHARES - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- COMMON STOCKS - 88.1% - ---------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 2.4% - ---------------------------------------------------------------------------------------------------------- CHEMICALS - 0.7% ----------------------------------------------------------------------------------------------------- Minerals Technologies, Inc. 100,000 4,100,000 - ---------------------------------------------------------------------------------------------------------- GOLD - 0.9% ----------------------------------------------------------------------------------------------------- Newmont Mining Corp. 120,500 5,392,375 - ---------------------------------------------------------------------------------------------------------- METALS - 0.8% ----------------------------------------------------------------------------------------------------- Cia de Minas Buenaventura SA, Sponsored ADR 46,000 787,750 ----------------------------------------------------------------------------------------------------- Cia Vale Do Rio Doce, Preference 31,000 596,674 ----------------------------------------------------------------------------------------------------- Freeport-McMoRan Copper & Gold, Inc., Cl. B 107,000 3,196,625 -------------- 4,581,049 - ---------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 12.6% - ---------------------------------------------------------------------------------------------------------- AUTOS & HOUSING - 2.9% ----------------------------------------------------------------------------------------------------- Brazil Realty SA, GDR (3)(4) 60,000 1,140,000 ----------------------------------------------------------------------------------------------------- IRSA Inversiones y Representaciones SA 1,028,807 3,303,052 ----------------------------------------------------------------------------------------------------- Mahindra & Mahindra Ltd., GDR (4) 200,000 2,350,000 ----------------------------------------------------------------------------------------------------- Porsche AG, Preference (3) 9,750 8,699,093 ----------------------------------------------------------------------------------------------------- Solidere, GDR (3) 100,000 1,145,000 -------------- 16,637,145 - ---------------------------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 4.0% ----------------------------------------------------------------------------------------------------- Nintendo Co. Ltd. 275,000 19,641,164 ----------------------------------------------------------------------------------------------------- Resorts World Berhad 770,000 3,506,228 -------------- 23,147,392 - ---------------------------------------------------------------------------------------------------------- MEDIA - 0.8% ----------------------------------------------------------------------------------------------------- News Corp. Ltd., ADR 150,000 3,131,250 ----------------------------------------------------------------------------------------------------- Reuters Holdings plc, Series B, ADR 20,000 1,530,000 -------------- 4,661,250 - ---------------------------------------------------------------------------------------------------------- RETAIL: GENERAL - 0.2% ----------------------------------------------------------------------------------------------------- PT Matahari Putra Prima 1,000,000 1,164,021 - ---------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 4.7% ----------------------------------------------------------------------------------------------------- adidas AG 25,000 2,157,537 ----------------------------------------------------------------------------------------------------- Giordano International Ltd. 2,100,000 1,791,856 ----------------------------------------------------------------------------------------------------- Jusco Co. 85,000 2,878,005 ----------------------------------------------------------------------------------------------------- Reebok International Ltd. 80,000 3,360,000 ----------------------------------------------------------------------------------------------------- Wella AG 24,305 12,932,310 ----------------------------------------------------------------------------------------------------- Wolford AG 33,600 4,060,690 -------------- 27,180,398 - ---------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 15.5% - ---------------------------------------------------------------------------------------------------------- BEVERAGES - 2.3% ----------------------------------------------------------------------------------------------------- Allied Domecq plc 344,400 2,702,005 ----------------------------------------------------------------------------------------------------- Hellenic Bottling Co., SA 35,000 1,121,458 ----------------------------------------------------------------------------------------------------- Panamerican Beverages, Inc., Cl. A 100,000 4,687,500
54 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ---------------------------------------------------------------------------------------------------------- BEVERAGES (CONTINUED) ----------------------------------------------------------------------------------------------------- South African Breweries Ltd. 178,900 $ 4,532,265 --------------- 13,043,228 - ---------------------------------------------------------------------------------------------------------- FOOD - 0.6% ----------------------------------------------------------------------------------------------------- Dairy Farm International Holdings Ltd. 1,186,000 954,730 ----------------------------------------------------------------------------------------------------- Disco SA, Sponsored ADR (3) 93,200 2,632,900 --------------- 3,587,630 - ---------------------------------------------------------------------------------------------------------- HEALTHCARE/DRUGS - 8.2% ----------------------------------------------------------------------------------------------------- Amgen, Inc. (3) 100,000 5,437,500 ----------------------------------------------------------------------------------------------------- Astra AB Free, Series A 100,000 4,935,541 ----------------------------------------------------------------------------------------------------- BioChem Pharma, Inc. (3) 125,000 6,281,250 ----------------------------------------------------------------------------------------------------- Genzyme Corp. (3) 220,800 4,802,400 ----------------------------------------------------------------------------------------------------- Gilead Sciences, Inc. (3) 72,700 1,817,500 ----------------------------------------------------------------------------------------------------- Glaxo Wellcome plc, Sponsored ADR 400,000 12,700,000 ----------------------------------------------------------------------------------------------------- Johnson & Johnson 23,000 1,144,250 ----------------------------------------------------------------------------------------------------- Novartis AG (3) 4,266 4,870,541 ----------------------------------------------------------------------------------------------------- Sanofi SA 60,000 5,955,293 --------------- 47,944,275 - ---------------------------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 3.0% ----------------------------------------------------------------------------------------------------- Gehe AG 69,990 4,489,307 ----------------------------------------------------------------------------------------------------- Rhoen-Klinikum AG, Preference, Non-vtg. 4,820 476,962 ----------------------------------------------------------------------------------------------------- United States Surgical Corp. 315,500 12,422,812 --------------- 17,389,081 - ---------------------------------------------------------------------------------------------------------- TOBACCO - 1.4% ----------------------------------------------------------------------------------------------------- B.A.T. Industries plc 600,000 4,979,692 ----------------------------------------------------------------------------------------------------- Philip Morris Cos., Inc. 20,000 2,252,500 ----------------------------------------------------------------------------------------------------- PT Gudang Garam (3) 79,500 343,238 ----------------------------------------------------------------------------------------------------- PT Hanjaya Mandala Sampoerna (3) 100,000 533,333 --------------- 8,108,763 - ---------------------------------------------------------------------------------------------------------- ENERGY - 6.4% - ---------------------------------------------------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 2.9% ----------------------------------------------------------------------------------------------------- Coflexip SA, Sponsored ADR (3) 105,000 2,756,250 ----------------------------------------------------------------------------------------------------- Global Marine, Inc. (3) 117,500 2,423,437 ----------------------------------------------------------------------------------------------------- Transocean Offshore, Inc. 135,459 8,483,120 ----------------------------------------------------------------------------------------------------- Western Atlas, Inc. (3) 49,300 3,494,138 --------------- 17,156,945 - ---------------------------------------------------------------------------------------------------------- OIL-INTEGRATED - 3.5% ----------------------------------------------------------------------------------------------------- British Petroleum Co. plc, ADR 25,442 3,596,863 ----------------------------------------------------------------------------------------------------- Gulf Canada Resources Ltd. (3) 565,600 4,126,500 ----------------------------------------------------------------------------------------------------- Lukoil Oil Co., Sponsored ADR 66,900 3,005,502 ----------------------------------------------------------------------------------------------------- Petroleo Brasileiro SA, Preference 34,132,000 5,436,324 ----------------------------------------------------------------------------------------------------- Renaissance Energy Ltd. (3) 45,800 1,558,797 ----------------------------------------------------------------------------------------------------- Unocal Corp. 64,000 2,600,000 --------------- 20,323,986 - ---------------------------------------------------------------------------------------------------------- FINANCIAL - 17.1% - ---------------------------------------------------------------------------------------------------------- BANKS - 11.6% ----------------------------------------------------------------------------------------------------- ABN Amro Holding NV 70,000 4,548,668 ----------------------------------------------------------------------------------------------------- Banco Bradesco SA, Preference 455,260,951 3,299,142 ----------------------------------------------------------------------------------------------------- Banco Frances del Rio de la Plata SA, Sponsored ADR 63,250 1,739,375
55 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ---------------------------------------------------------------------------------------------------------- BANKS (CONTINUED) ----------------------------------------------------------------------------------------------------- Banco Latinoamericano de Exportaciones SA, Cl. E 80,000 $ 4,060,000 ----------------------------------------------------------------------------------------------------- Banque Libanaise Pour Le Comm SAL, GDR, Cl. B (3) 50,000 607,500 ----------------------------------------------------------------------------------------------------- Barclays plc 300,414 5,148,666 ----------------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New) 52,000 4,641,000 ----------------------------------------------------------------------------------------------------- Cie Financiere de Paribas, Series A 180,000 12,149,489 ----------------------------------------------------------------------------------------------------- Citicorp 45,000 4,635,000 ----------------------------------------------------------------------------------------------------- HSBC Holdings plc 154,836 3,312,912 ----------------------------------------------------------------------------------------------------- Industrial Credit & Investment Corp. of India Ltd. (The), GDR (3)(4) 162,500 1,584,375 ----------------------------------------------------------------------------------------------------- Industrial Finance Corp. 758,100 2,054,909 ----------------------------------------------------------------------------------------------------- Merita Ltd., Cl. A (3) 2,000,000 6,205,237 ----------------------------------------------------------------------------------------------------- Northern Trust Corp. 37,400 1,355,750 ----------------------------------------------------------------------------------------------------- PT Panin Bank 387,000 442,286 ----------------------------------------------------------------------------------------------------- Societe Generale 110,000 11,870,191 ------------- 67,654,500 - ---------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 2.9% ----------------------------------------------------------------------------------------------------- American Express Co. 24,500 1,384,250 ----------------------------------------------------------------------------------------------------- First NIS Regional Fund (5) 180,000 2,115,000 ----------------------------------------------------------------------------------------------------- ING Groep NV 90,432 3,251,865 ----------------------------------------------------------------------------------------------------- MBNA Corp. 55,000 2,282,500 ----------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc. 30,000 2,445,000 ----------------------------------------------------------------------------------------------------- Promise Co. Ltd. (3) 40,000 1,964,332 ----------------------------------------------------------------------------------------------------- Takefuji Corp. (3) 50,000 3,596,967 ------------- 17,039,914 - ---------------------------------------------------------------------------------------------------------- INSURANCE - 2.6% ----------------------------------------------------------------------------------------------------- American International Group, Inc. 35,000 3,788,750 ----------------------------------------------------------------------------------------------------- National Mutual Asia Ltd. 2,634,000 2,502,897 ----------------------------------------------------------------------------------------------------- Reinsurance Australia Corp. Ltd. 2,283,000 8,885,089 ------------- 15,176,736 - ---------------------------------------------------------------------------------------------------------- INDUSTRIAL - 11.3% - ---------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 0.4% ----------------------------------------------------------------------------------------------------- FORE Systems, Inc. (3) 38,000 1,249,250 ----------------------------------------------------------------------------------------------------- Ushio, Inc. 100,000 1,085,552 ------------- 2,334,802 - ---------------------------------------------------------------------------------------------------------- INDUSTRIAL SERVICES - 5.6% - ---------------------------------------------------------------------------------------------------------- Adecco SA 17,000 4,254,048 ----------------------------------------------------------------------------------------------------- Boskalis Westminster 150,000 3,035,143 ----------------------------------------------------------------------------------------------------- IHC Caland NV 45,000 2,567,731 ----------------------------------------------------------------------------------------------------- PT Citra Marga Nusaphala Persada 2,331,000 1,825,333 ----------------------------------------------------------------------------------------------------- Rentokil Group plc 700,000 5,276,041 ----------------------------------------------------------------------------------------------------- VBH Holding AG 247,000 5,489,391 ----------------------------------------------------------------------------------------------------- WPP Group plc 2,290,100 9,964,274 ------------- 32,411,961 - ---------------------------------------------------------------------------------------------------------- MANUFACTURING - 4.1% ----------------------------------------------------------------------------------------------------- Bic Corp. 24,200 3,621,572 ----------------------------------------------------------------------------------------------------- Bobst Bearers AG 2,000 2,696,018 ----------------------------------------------------------------------------------------------------- Bombardier, Inc., Cl. B 250,000 4,614,589 ----------------------------------------------------------------------------------------------------- Hutchison Whampoa Ltd. 751,000 5,898,290
56 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ---------------------------------------------------------------------------------------------------------- MANUFACTURING (CONTINUED) Powerscreen International plc 730,100 $ 7,066,238 ------------ 23,896,707 - ---------------------------------------------------------------------------------------------------------- TRANSPORTATION - 1.2% ----------------------------------------------------------------------------------------------------- Brambles Industries Ltd. 180,000 3,509,811 ----------------------------------------------------------------------------------------------------- Guangshen Railway Co. Ltd., Sponsored ADR (3) 180,000 3,712,500 ------------ 7,222,311 - ---------------------------------------------------------------------------------------------------------- TECHNOLOGY - 16.4% - ---------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 1.7% ----------------------------------------------------------------------------------------------------- Rolls-Royce plc 2,210,075 9,729,659 - ---------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE - 6.4% ----------------------------------------------------------------------------------------------------- Cap Gemini SA (3) 205,000 9,893,653 ----------------------------------------------------------------------------------------------------- Computer Associates International, Inc. 60,000 2,985,000 ----------------------------------------------------------------------------------------------------- First Data Corp. 174,236 6,359,614 ----------------------------------------------------------------------------------------------------- Ines Corp. 42,000 611,528 ----------------------------------------------------------------------------------------------------- Microsoft Corp. (3) 70,000 5,783,750 ----------------------------------------------------------------------------------------------------- Misys plc 201,600 3,836,737 ----------------------------------------------------------------------------------------------------- Oracle Corp. (3) 117,900 4,922,325 ----------------------------------------------------------------------------------------------------- SAP AG, Preference 20,000 2,748,670 ------------ 37,141,277 - ---------------------------------------------------------------------------------------------------------- ELECTRONICS - 3.7% ----------------------------------------------------------------------------------------------------- Advanced Semiconductor Engineering, Inc., GDR 102,420 1,003,716 ----------------------------------------------------------------------------------------------------- Intel Corp. 20,000 2,618,750 ----------------------------------------------------------------------------------------------------- Keyence Corp. 25,000 3,080,038 ----------------------------------------------------------------------------------------------------- SGS-Thomson Microelectronics NV (3) 200,000 14,000,000 ----------------------------------------------------------------------------------------------------- Taiwan Semiconductor Manufacturing Co. (3)(5) 512,000 1,051,926 ------------ 21,754,430 - ---------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 4.6% ----------------------------------------------------------------------------------------------------- Ascend Communications, Inc. (3) 18,800 1,167,950 ----------------------------------------------------------------------------------------------------- Cisco Systems, Inc. (3) 74,600 4,746,425 ----------------------------------------------------------------------------------------------------- Korea Mobile Telecommunications Corp. 3,000 3,029,734 ----------------------------------------------------------------------------------------------------- Millicom International Cellular SA (3) 90,000 2,891,250 ----------------------------------------------------------------------------------------------------- Millicom, Inc. (3) 25,000 -- ----------------------------------------------------------------------------------------------------- QUALCOMM, Inc. (3) 130,700 5,211,663 ----------------------------------------------------------------------------------------------------- Telecom Italia Mobile SpA 1,819,700 4,600,230 ----------------------------------------------------------------------------------------------------- Telecom Italia SpA 2,000,000 5,194,463 ------------ 26,841,715 - ---------------------------------------------------------------------------------------------------------- UTILITIES - 6.4% - ---------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES - 0.7% ----------------------------------------------------------------------------------------------------- Empresa Nacional de Electricidad SA 60,000 4,269,542 - ---------------------------------------------------------------------------------------------------------- GAS UTILITIES - 0.3% ----------------------------------------------------------------------------------------------------- Gazprom, ADR (3)(4) 110,000 1,933,250 - ---------------------------------------------------------------------------------------------------------- TELEPHONE UTILITIES - 5.4% ----------------------------------------------------------------------------------------------------- CPT Telefonica del Peru SA, Cl. B 3,400,031 6,362,708 ----------------------------------------------------------------------------------------------------- PLD Telekom, Inc. (3) 159,900 979,388 ----------------------------------------------------------------------------------------------------- Portugal Telecom SA 144,000 4,099,709 ----------------------------------------------------------------------------------------------------- SBC Communications, Inc. 128,500 6,649,875
57 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKLET VALUE SHARES (NOTE 1) - ---------------------------------------------------------------------------------------------------------- TELEPHONE UTILITIES (CONTINUED) ----------------------------------------------------------------------------------------------------- Telecomunicacoes Brasileiras SA, Preference 172,548,000 $ 13,284,509 ------------- 31,376,189 ------------- Total Common Stocks (Cost $436,933,605) 513,200,531 - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 1.7% - ---------------------------------------------------------------------------------------------------------- Marschollek, Lautenschlaeger und Partner-VO, Non-vtg. Preferred Stock (Cost $5,017,476) 70,257 9,755,960 UNITS - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% - ---------------------------------------------------------------------------------------------------------- American Satellite Network, Inc. Wts., Exp. 6/99 (Cost $0) 6,250 -- PRINCIPAL AMOUNT(1) - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT - 10.4% - ---------------------------------------------------------------------------------------------------------- Repurchase agreement with Goldman, Sachs & Co., 6.52%, dated 12/31/96, to be repurchased at $60,521,914 on 1/2/97, collateralized by U.S. Treasury Nts., 5.50%-7.50%, 7/15/99-8/15/05, with a value of $61,887,142 (Cost $60,500,000) $ 60,500,000 60,500,000 ----------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $507,602,388) 101.1% 588,435,102 ----------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (1.1) (6,354,913) ------------- -------------- NET ASSETS 100.0% $ 582,080,189 ------------- -------------- ------------- --------------
1. Principal amount is reported in U.S. Dollars, except for those denoted in the following currency - MXP - Mexican Peso 2. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 3. Non-income producing security. 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 $7,007,625 or 1.21% of the Fund's net assets, at December 31, 1996. 5. Identifies issues considered to be illiquid - See applicable note of Notes to Financial Statements. Affiliated company. Represents ownership of at least 5% of the voting securities of the issuer and is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended December 31, 1996. There were no affiliate securities held as of December 31, 1996. Transactions during the period in which the the issuer was an affiliate are as follows: BALANCE BALANCE DECEMBER 31, 1995 GROSS ADDITIONS GROSS REDUCTIONS DECEMBER 31, 1996 DIVIDEND - ---------------------------------------------------------------------------------------------------------- SHARES COST SHARES COST SHARES COST SHARES COST INCOME - ---------------------------------------------------------------------------------------------------------- Pharmavit GDS 114,000 $1,401,000 -- $ -- 114,000 $1,401,000 -- $ -- $ --
58 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (CONTINUED) Distribution of investments by country of issue, as a percentage of total investments at value, is as follows: COUNTRY MARKET VALUE PERCENT ---------------------------------------------------------- United States $ 186,544,759 31.7% ---------------------------------------------------------- Great Britain 66,530,176 11.3 ---------------------------------------------------------- France 60,246,448 10.2 ---------------------------------------------------------- Germany 46,749,230 7.9 ---------------------------------------------------------- Japan 32,857,584 5.6 ---------------------------------------------------------- Brazil 23,756,648 4.0 ---------------------------------------------------------- Canada 16,581,137 2.8 ---------------------------------------------------------- Australia 15,526,150 2.6 ---------------------------------------------------------- Hong Kong 14,460,685 2.5 ---------------------------------------------------------- The Netherlands 13,403,408 2.3 ---------------------------------------------------------- Switzerland 11,820,607 2.0 ---------------------------------------------------------- Italy 9,794,693 1.7 ---------------------------------------------------------- Mexico 9,666,111 1.6 ---------------------------------------------------------- Russia 8,033,140 1.4 ---------------------------------------------------------- Argentina 7,675,327 1.3 ---------------------------------------------------------- Peru 7,150,458 1.2 ---------------------------------------------------------- Finland 6,205,237 1.1 ---------------------------------------------------------- Sweden 4,935,541 0.8 ---------------------------------------------------------- South Africa 4,532,265 0.8 ---------------------------------------------------------- Indonesia 4,308,211 0.7 ---------------------------------------------------------- Spain 4,269,542 0.7 ---------------------------------------------------------- Portugal 4,099,709 0.7 ---------------------------------------------------------- Austria 4,060,690 0.7 ---------------------------------------------------------- Panama 4,060,000 0.7 ---------------------------------------------------------- India 3,934,375 0.7 ---------------------------------------------------------- China 3,712,500 0.6 ---------------------------------------------------------- Malaysia 3,506,228 0.6 ---------------------------------------------------------- Korea, Republic of (South) 3,029,734 0.5 ---------------------------------------------------------- Taiwan 2,055,642 0.4 ---------------------------------------------------------- Thailand 2,054,909 0.4 ---------------------------------------------------------- Lebanon 1,752,500 0.3 ---------------------------------------------------------- Greece 1,121,458 0.2 ------------- ------- Total $ 588,435,102 100.0% ------------- ------- ------------- ------- See accompanying Notes to Financial Statements. 59 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1996 PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 21.2% - ------------------------------------------------------------------------------------------------------------------------- GOVERNMENT AGENCY - 18.4% - ------------------------------------------------------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED - 9.6% ----------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 176, Cl. F, 8.95%, 3/15/20 $ 9,579 $ 9,582 ----------------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: 7.50%, 1/15/27 (2) 10,000,000 9,993,800 7.50%, 8/1/25 1,056,334 1,057,296 Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust 1992-103, Cl. JB, 10.50%, 11/25/20 130,000 146,128 Series 1994-83, Cl. Z, 7.50%, 6/25/24 192,884 179,803 ------------ 11,386,609 - ------------------------------------------------------------------------------------------------------------------------- GNMA/GUARANTEED - 8.8% ----------------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn.: 6%, 11/20/25 709,161 725,117 7.50%, 8/15/25 4,821,287 4,820,371 8%, 11/15/25 2,956,081 3,020,376 8%, 5/15/26 1,912,554 1,952,374 ------------ 10,518,238 - ------------------------------------------------------------------------------------------------------------------------- PRIVATE - 2.8% - ------------------------------------------------------------------------------------------------------------------------- COMMERCIAL - 1.3% ----------------------------------------------------------------------------------------------------------------------- Criimi Mae Financial Corp., Collateralized Mtg. Obligations, Trust I, Cl. A-2, 7.56%, 8/30/05 (3) 100,000 99,813 ----------------------------------------------------------------------------------------------------------------------- FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit Pass- Through Certificates, Series 1994-C1, Cl. 2-G, 8.70%, 9/25/25 (4) 153,594 156,906 ----------------------------------------------------------------------------------------------------------------------- Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates, Series 1995-C2, Cl. D, 7.989%, 6/15/21 (3) 449,587 456,050 ----------------------------------------------------------------------------------------------------------------------- Morgan Stanley Capital I, Inc., Commercial Mtg. Pass- Through Certificates, Series 1996-C1, Cl. F, 7.51%, 2/15/28 (4) 162,744 109,445 ----------------------------------------------------------------------------------------------------------------------- NationsCommercial Corp., NB Commercial Mtg. Pass- Through Certificates, Series-DMC, Cl. C, 8.921%, 8/12/11 (4) 200,000 203,625 ----------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates: Series 1992-CHF, Cl. D, 8.25%, 12/25/20 123,327 124,561 Series 1993-C1, Cl. D, 9.45%, 5/25/24 91,000 93,624 Series 1994-C2, Cl. E, 8%, 4/25/25 221,334 220,713 ----------------------------------------------------------------------------------------------------------------------- Structured Asset Securities Corp., Multiclass Pass-Through Certificates, Series 1995-C4, Cl. E, 8.791%, 6/25/26 (3)(4) 46,290 39,318 ------------ 1,504,055 - ------------------------------------------------------------------------------------------------------------------------- MULTI-FAMILY - 1.2% ----------------------------------------------------------------------------------------------------------------------- Mortgage Capital Funding, Inc., Multifamily Mtg. Pass- Through Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06 (4) 800,000 648,500 ----------------------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1991-M6, Cl. B4, 7.012%, 6/25/21 (3) 31,767 31,306
60 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- MULTI-FAMILY (CONTINUED) ----------------------------------------------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Series 1996-CL, Cl. F, 9.185%, 1/20/28 (3) $ 1,000,000 $ 746,250 ------------ 1,426,056 - ------------------------------------------------------------------------------------------------------------------------- RESIDENTIAL - 0.2% ----------------------------------------------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Series 1996-B, Cl. 1, 7.136%, 4/25/26 397,643 238,089 - ------------------------------------------------------------------------------------------------------------------------- OTHER - 0.1% ----------------------------------------------------------------------------------------------------------------------- Nomura Asset Securities Corp., Series 1994-MD1, Cl. B2, 8.421%, 3/15/18 (3)(5) 100,000 87,734 ------------ Total Mortgage-Backed Obligations (Cost $24,954,103) 25,160,781 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 21.7% ----------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds: 11.625%, 11/15/02 (6) 4,300,000 5,422,033 13.125%, 5/15/01 2,800,000 3,535,877 6.875%, 8/15/25 (7) 1,200,000 1,223,251 8.125%, 8/15/19 (7) 163,000 188,418 ----------------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts.: 6%, 2/15/26 (6) 1,330,000 1,210,301 6.25%, 10/31/01 (6) 12,955,000 12,967,151 6.25%, 2/15/03 1,250,000 1,249,220 ----------- Total U.S. Government Obligations (Cost $26,071,407) 25,796,251 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 32.4% - ------------------------------------------------------------------------------------------------------------------------- ARGENTINA - 2.8% ----------------------------------------------------------------------------------------------------------------------- Argentina (Republic of): Bonds, Bonos de Consolidacion de Duedas, Series I, 3.414%, 4/1/01 (3)(8) ARP 109,529 94,595 Bonds, Bonos de Consolidacion de Deudas, Series I, 5.375%, 4/1/01 (3)(8) 1,121,663 1,059,226 Discount Bonds, 6.375%, 3/31/23 (3) 1,180,000 908,600 Par Bonds, 5.25%, 3/31/23 (9) 1,260,000 795,375 ----------------------------------------------------------------------------------------------------------------------- Banco Hipotecario Nacional (Argentina) Medium-Term Nts., 10.625%, 8/7/06 (6) 400,000 415,000 ------------ 3,272,796 - ------------------------------------------------------------------------------------------------------------------------- AUSTRALIA - 3.6% ----------------------------------------------------------------------------------------------------------------------- Australia (Commonwealth of) Bonds: 9.50%, 8/15/03 AUD 920,000 817,925 Series 399, 6.25%, 3/15/99 AUD 1,550,000 1,226,958 ----------------------------------------------------------------------------------------------------------------------- Queensland Treasury Corp.: Exchangeable Gtd. Nts., 8%, 8/14/01 AUD 603,000 496,896 Gtd. Nts., 10.50%, 5/15/03 AUD 175,000 161,526 ----------------------------------------------------------------------------------------------------------------------- Treasury Corp. of Victoria Gtd. Bonds, 12.50%, 10/15/03 AUD 510,000 515,654 ----------------------------------------------------------------------------------------------------------------------- Western Australia Treasury Corp. Gtd. Bonds, 10%, 7/15/05 AUD 1,120,000 1,026,616 ------------ 4,245,575
61 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- BRAZIL - 1.4% - ------------------------------------------------------------------------------------------------------------------------- Banco Estado Minas Gerais, 8.25%, 2/10/00 $ 250,000 $ 241,406 ----------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Eligible Interest Bonds, 6.50%, 4/15/06 (3) 1,650,000 1,439,625 ----------------------------------------------------------------------------------------------------------------------- Telecomunicacoes Brasileiras SA Medium-Term Nts., 11.30%, 12/9/99 (3) 10,000 10,500 ------------ 1,691,531 - ------------------------------------------------------------------------------------------------------------------------- BULGARIA - 0.1% - ------------------------------------------------------------------------------------------------------------------------- Bulgaria (Republic of): Front-Loaded Interest Reduction Bearer Bonds, Tranche A, 2.25%, 7/8/12 (9) 305,000 117,234 Interest Arrears Bonds, 6.688%, 7/28/11 (3) 20,000 10,350 ------------ 127,584 - ------------------------------------------------------------------------------------------------------------------------- CANADA - 6.3% - ------------------------------------------------------------------------------------------------------------------------- Canada (Government of) Bonds: 11.75%, 2/1/03 CAD 910,000 863,876 7%, 12/1/06 CAD 1,620,000 1,235,696 8.75%, 12/1/05 CAD 640,000 544,338 9.75%, 12/1/01 CAD 540,000 465,183 9.75%, 6/1/01 CAD 2,905,000 2,480,218 Series A-33, 11.50%, 9/1/00 CAD 260,000 229,674 Series A-76, 9%, 6/1/25 CAD 1,200,000 1,080,168 ----------------------------------------------------------------------------------------------------------------------- Ontario, Canada (Province of) Bonds, 8.25%, 12/1/05 CAD 700,000 570,279 ------------ 7,469,432 - ------------------------------------------------------------------------------------------------------------------------- COLOMBIA - 0.4% - ------------------------------------------------------------------------------------------------------------------------- Financiera Energetica Nacional SA Nts., 9.375%, 6/15/06 500,000 533,563 - ------------------------------------------------------------------------------------------------------------------------- DENMARK - 1.1% - ------------------------------------------------------------------------------------------------------------------------- Denmark (Kingdom of) Bonds: 8%, 11/15/01 DKK 4,000,000 752,682 8%, 3/15/06 DKK 2,705,000 504,416 ------------ 1,257,098 - ------------------------------------------------------------------------------------------------------------------------- FINLAND - 0.2% - ------------------------------------------------------------------------------------------------------------------------- Finland (Republic of) Bonds, 7.25%, 4/18/06 FIM 1,000,000 232,709 - ------------------------------------------------------------------------------------------------------------------------- GERMANY - 2.7% - ------------------------------------------------------------------------------------------------------------------------- Germany (Republic of) Bonds, Series 94, 6.25%, 1/4/24 DEM 5,190,000 3,196,289 - ------------------------------------------------------------------------------------------------------------------------- GREAT BRITAIN - 1.7% - ------------------------------------------------------------------------------------------------------------------------- United Kingdom Treasury: Bonds, 10%, 9/8/03 GBP 500,000 971,592 Nts.: 12.50%, 11/21/05 GBP 158,000 342,885 13%, 7/14/00 GBP 200,000 403,090 8%, 6/10/03 GBP 185,000 327,006 ------------ 2,044,573 - ------------------------------------------------------------------------------------------------------------------------- INDONESIA - 0.3% - ------------------------------------------------------------------------------------------------------------------------- Wijaya Karya, Zero Coupon Negotiable Promissory Nts., 14.788%, 12/9/97 (10) IDR 1,000,000,000 370,636 - ------------------------------------------------------------------------------------------------------------------------- IRELAND - 0.2% - ------------------------------------------------------------------------------------------------------------------------- Ireland (Government of) Bonds, 9.25%, 7/11/03 IEP 100,000 196,078
62 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- ITALY - 0.9% - ------------------------------------------------------------------------------------------------------------------------- Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali, 10.50%: 4/1/00 ITL 550,000,000 $ 403,527 7/15/00 ITL 560,000,000 413,521 7/15/98 ITL 380,000,000 264,722 ------------ 1,081,770 - ------------------------------------------------------------------------------------------------------------------------- JORDAN - 0.3% - ------------------------------------------------------------------------------------------------------------------------- Hashemite Kingdom of Jordan Disc. Bonds, 6.50%, 12/23/23 (3) 500,000 386,875 - ------------------------------------------------------------------------------------------------------------------------- MALAYSIA - 0.2% - ------------------------------------------------------------------------------------------------------------------------- Petronas Carigali, Zero Coupon Nts., 7.146%, 5/12/97 (10) MYR 500,000 193,032 - ------------------------------------------------------------------------------------------------------------------------- MEXICO - 2.5% - ------------------------------------------------------------------------------------------------------------------------- Banco Nacional de Comercio Exterior SNC International Finance BV: Gtd. Bonds, 10.629%, 6/23/97 (3)(5) 250,000 255,938 Gtd. Registered Bonds, 11.25%, 5/30/06 275,000 300,094 ----------------------------------------------------------------------------------------------------------------------- Bonos de la Tesoreria de la Federacion, Zero Coupon: 28.333%, 1/30/97 (10) MXP 1,300,000 161,822 30.061%, 2/13/97 (10) MXP 12,358,200 1,521,614 ----------------------------------------------------------------------------------------------------------------------- United Mexican States Bonds: 10.375%, 1/29/03 DEM 725,000 507,370 16.50%, 9/1/08 (4) GBP 20,000 46,251 Petroleos Mexicanos Gtd. Unsec. Unsub. Nts., 7.875%, 3/2/99 CAD 200,000 149,746 ------------ 2,942,835 - ------------------------------------------------------------------------------------------------------------------------- NEW ZEALAND - 2.1% - ------------------------------------------------------------------------------------------------------------------------- New Zealand (Government of): Bonds, 10%, 7/15/97 NZD 2,593,000 1,856,002 Bonds, 8%, 11/15/06 NZD 670,000 499,798 Index Linked Bonds, 4.60%, 2/15/16 (3) NZD 140,000 96,914 ------------ 2,452,714 - ------------------------------------------------------------------------------------------------------------------------- PANAMA - 0.1% - ------------------------------------------------------------------------------------------------------------------------- Panama (Republic of) Interest Reduction Bonds, 3.50%, 7/17/14 (9) 270,000 187,904 - ------------------------------------------------------------------------------------------------------------------------- SPAIN - 2.0% - ------------------------------------------------------------------------------------------------------------------------- Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado: 10.30%, 6/15/02 ESP 59,100,000 536,178 10.50%, 10/30/03 ESP 59,550,000 557,527 11.45%, 8/30/98 ESP 12,000,000 100,524 12.25%, 3/25/00 ESP 131,000,000 1,197,008 ------------ 2,391,237 - ------------------------------------------------------------------------------------------------------------------------- SUPRANATIONAL - 0.2% - ------------------------------------------------------------------------------------------------------------------------- International Bank for Reconstruction & Development Bonds, 12.50%, 7/25/97 NZD 325,000 235,508
63 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- SWEDEN - 1.8% - ------------------------------------------------------------------------------------------------------------------------- Sweden (Kingdom of) Bonds: Series 1030, 13%, 6/15/01 SEK 6,700,000 $ 1,265,136 Series 1033, 10.25%, 5/5/03 SEK 3,100,000 552,523 Series 1035, 6%, 2/9/05 SEK 2,100,000 298,046 ------------ 2,115,705 - ------------------------------------------------------------------------------------------------------------------------- VENEZUELA - 1.5% - ------------------------------------------------------------------------------------------------------------------------- Venezuela (Republic of): Collateralized Par Bonds, Series W-A, 6.75%, 3/31/20 500,000 383,750 Disc. Bonds, Series DL, 6.50%, 12/18/07 (3) 250,000 220,625 Front-Loaded Interest Reduction Bonds, Series A, 6.625%, 3/31/07 (3) 1,100,000 983,125 New Money Bonds, Series A, 6.625%, 12/18/05 (3) 250,000 223,047 ------------ 1,810,547 ------------ Total Foreign Government Obligations (Cost $37,225,474) 38,435,991 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- LOAN PARTICIPATIONS - 0.7% - ------------------------------------------------------------------------------------------------------------------------- Colombia (Republic of) 1989-1990 Integrated Loan Facility Bonds, 6.563%, 7/1/01 (3)(4) 214,320 204,676 ----------------------------------------------------------------------------------------------------------------------- Jamaica (Government of) 1990 Refinancing Agreement Nts.: Tranche A, 5.531%, 10/16/00 (3)(4) 62,500 60,703 Tranche B, 6.312%, 11/15/04 (3)(4) 150,000 129,000 ----------------------------------------------------------------------------------------------------------------------- Morocco (Kingdom of) Loan Participation Agreement: Tranche A, 6.437%, 1/1/09 (3) 421,000 343,246 Tranche B, 6.437%, 1/1/04 (3) 44,117 41,181 ----------------------------------------------------------------------------------------------------------------------- United Mexican States, Combined Facility 3, Loan Participation Agreement, Tranche A, 6.437%, 9/20/97 (3)(4) 47,680 42,197 ------------ Total Loan Participations (Cost $766,570) 821,003 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 23.5% - ------------------------------------------------------------------------------------------------------------------------- BASIC INDUSTRY - 3.0% - ------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 0.4% ----------------------------------------------------------------------------------------------------------------------- ISP Holdings, Inc., 9% Sr. Nts., 10/15/03 (5) 150,000 153,000 ----------------------------------------------------------------------------------------------------------------------- NL Industries, Inc., 0%/13% Sr. Sec. Disc. Nts., 10/15/05 (11) 200,000 173,500 ----------------------------------------------------------------------------------------------------------------------- Tri Polyta Finance BV, 11.375% Gtd. Sec. Nts., 12/1/03 200,000 209,000 ------------ 535,500 - ------------------------------------------------------------------------------------------------------------------------- METALS/MINING - 0.4% ----------------------------------------------------------------------------------------------------------------------- Carbide/Graphite Group, Inc. (The), 11.50% Sr. Nts., 9/1/03 200,000 219,500 ----------------------------------------------------------------------------------------------------------------------- Royal Oak Mines, Inc., 11% Sr. Sub. Nts., 8/15/06 200,000 204,000 ------------ 423,500 - ------------------------------------------------------------------------------------------------------------------------- PAPER - 1.7% ----------------------------------------------------------------------------------------------------------------------- APP International Finance Co. BV, 11.75% Gtd. Sec. Nts., 10/1/05 200,000 214,250 ----------------------------------------------------------------------------------------------------------------------- Asia Pulp & Paper International Finance Co., Zero Coupon Asian Currency Nts., 15.146%, 12/4/97 (10) IDR 1,400,000,000 514,126 ----------------------------------------------------------------------------------------------------------------------- Florida Coast Paper Co. LLC, 12.75% First Mtg. Nts., 6/1/03 130,000 141,375
64 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- PAPER (CONTINUED) - ------------------------------------------------------------------------------------------------------------------------- Indah Kiat International Finance Co. BV: 11.875% Sr. Sec. Gtd. Nts., 6/15/02 $ 100,000 $ 109,375 12.50% Sr. Sec. Gtd. Nts., Series C, 6/15/06 250,000 276,562 ----------------------------------------------------------------------------------------------------------------------- Repap New Brunswick, Inc., 10.625% Second Priority Sr. Sec. Nts., 4/15/05 300,000 315,000 ----------------------------------------------------------------------------------------------------------------------- Riverwood International Corp., 10.25% Sr. Nts., 4/1/06 200,000 198,000 ----------------------------------------------------------------------------------------------------------------------- Stone Container Corp., 10.75% First Mtg. Nts., 10/1/02 190,000 200,925 ------------ 1,969,613 - ------------------------------------------------------------------------------------------------------------------------- STEEL - 0.5% ----------------------------------------------------------------------------------------------------------------------- AK Steel Corp., 9.125% Sr. Nts., 12/15/06 (5) 250,000 256,875 ----------------------------------------------------------------------------------------------------------------------- Gulf States Steel, Inc. (Alabama), 13.50% First Mtg. Nts., Series B, 4/15/03 200,000 190,000 ----------------------------------------------------------------------------------------------------------------------- Jorgensen (Earle M.) Co., 10.75% Sr. Nts., 3/1/00 50,000 51,250 ----------------------------------------------------------------------------------------------------------------------- WCI Steel, Inc., 10% Sr. Nts., 12/1/04 (5) 100,000 102,500 ------------ 600,625 - ------------------------------------------------------------------------------------------------------------------------- CONSUMER RELATED - 3.2% - ------------------------------------------------------------------------------------------------------------------------- CONSUMER PRODUCTS - 0.9% ----------------------------------------------------------------------------------------------------------------------- Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., Series B, 12.712%, 5/27/98 (10) 150,000 125,812 ----------------------------------------------------------------------------------------------------------------------- Fletcher Challenge Industries Ltd., 10% Cv. Sub. Unsec. Nts., 4/30/05 NZD 60,000 45,468 ----------------------------------------------------------------------------------------------------------------------- Fletcher Challenge Ltd., 14.50% Cv. Sub. Nts., 9/30/00 NZD 60,000 50,334 ----------------------------------------------------------------------------------------------------------------------- Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 150,000 164,250 ----------------------------------------------------------------------------------------------------------------------- International Semi-Tech Microelectronics, Inc., 0%/11.50% Sr. Sec. Disc. Nts., 8/15/03 (11) 400,000 261,000 ----------------------------------------------------------------------------------------------------------------------- Samsonite Corp., 11.125% Sr. Sub. Nts., 7/15/05 200,000 221,000 ----------------------------------------------------------------------------------------------------------------------- TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05 100,000 115,500 ----------------------------------------------------------------------------------------------------------------------- Williams (J. B.) Holdings, Inc., 12% Sr. Nts., 3/1/04 100,000 102,000 ------------ 1,085,364 - ------------------------------------------------------------------------------------------------------------------------- FOOD/BEVERAGES/TOBACCO - 0.2% ----------------------------------------------------------------------------------------------------------------------- Dr. Pepper Bottling Holdings, Inc., 0%/11.625% Sr. Disc. Nts., 2/15/03 (11) 200,000 188,000 ----------------------------------------------------------------------------------------------------------------------- HEALTHCARE - 0.4% ----------------------------------------------------------------------------------------------------------------------- Genesis Health Ventures, Inc., 9.25% Sr. Sub. Nts., 10/1/06 (5) 150,000 154,875 ----------------------------------------------------------------------------------------------------------------------- Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., 7/15/02 200,000 226,000 ----------------------------------------------------------------------------------------------------------------------- IHF Holdings, Inc., 0%/15% Sr. Sub. Disc. Nts., Series B, 11/15/04 (4)(11) 200,000 146,534 ------------ 527,409 - ------------------------------------------------------------------------------------------------------------------------- HOTEL/GAMING - 0.6% HMC Acquisition Properties, Inc., 9% Sr. Nts., Series B, 12/15/07 150,000 153,000 ----------------------------------------------------------------------------------------------------------------------- Majestic Star Casino LLC (The), 12.75% Sr. Sec. Nts., 5/15/03 85,000 91,800 ----------------------------------------------------------------------------------------------------------------------- Mohegan Tribal Gaming Authority, 13.50% Sr. Sec. Nts., Series B, 11/15/02 100,000 132,500 ----------------------------------------------------------------------------------------------------------------------- Showboat Marina Casino Partnership/Showboat Marina Finance Corp., 13.50% First Mtg. Nts., Series B, 3/15/03 200,000 221,000
65 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- HOTEL/GAMING (CONTINUED) ----------------------------------------------------------------------------------------------------------------------- Trump Atlantic City Associates/Trump Atlantic City Funding, Inc., 11.25% First Mtg. Nts., 5/1/06 $ 100,000 $ 99,500 ------------ 697,800 - ------------------------------------------------------------------------------------------------------------------------- RESTAURANTS - 0.5% ----------------------------------------------------------------------------------------------------------------------- Ameriking, Inc., 10.75% Sr. Nts., 12/1/06 80,000 83,200 ----------------------------------------------------------------------------------------------------------------------- Carrols Corp., 11.50% Sr. Nts., 8/15/03 100,000 106,250 ----------------------------------------------------------------------------------------------------------------------- Foodmaker, Inc.: 9.25% Sr. Nts., 3/1/99 100,000 102,000 9.75% Sr. Sub. Nts., 6/1/02 300,000 306,750 ------------ 598,200 - ------------------------------------------------------------------------------------------------------------------------- TEXTILE/APPAREL - 0.6% ----------------------------------------------------------------------------------------------------------------------- Clark-Schwebel, Inc., 10.50% Sr. Nts., 4/15/06 100,000 107,000 ----------------------------------------------------------------------------------------------------------------------- PT Polysindo Eka Perkasa, Zero Coupon Promissory Nts., 19.348%, 4/29/97 (10) IDR 560,000,000 224,058 ----------------------------------------------------------------------------------------------------------------------- Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 100,000 110,750 ----------------------------------------------------------------------------------------------------------------------- Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03 50,000 51,250 ----------------------------------------------------------------------------------------------------------------------- William Carter Co., 10.375% Sr. Sub. Nts., 12/1/06 (5) 200,000 208,000 ------------ 701,058 - ------------------------------------------------------------------------------------------------------------------------- ENERGY - 2.4% - ------------------------------------------------------------------------------------------------------------------------- Chesapeake Energy Corp., 10.50% Sr. Nts., 6/1/02 150,000 163,500 ----------------------------------------------------------------------------------------------------------------------- Falcon Drilling Co., Inc., 8.875% Sr. Nts., Series B, 3/15/03 200,000 205,250 ----------------------------------------------------------------------------------------------------------------------- J. Ray McDermott SA, 9.375% Sr. Sub. Bonds, 7/15/06 250,000 263,125 ----------------------------------------------------------------------------------------------------------------------- Mariner Energy, Inc., 10.50% Sr. Sub. Nts., 8/1/06 (5) 200,000 213,000 ----------------------------------------------------------------------------------------------------------------------- Mesa Operating Co.: 0%/11.625% Gtd. Sr. Sub. Disc. Nts., 7/1/06 (11) 300,000 208,500 10.625% Gtd. Sr. Sub. Nts., 7/1/06 250,000 271,875 ----------------------------------------------------------------------------------------------------------------------- National Energy Group, Inc., 10.75% Sr. Nts., 11/1/06 (5) 500,000 527,500 ----------------------------------------------------------------------------------------------------------------------- Parker Drilling Corp., 9.75% Gtd. Sr. Nts., 11/15/06 (5) 100,000 105,750 ----------------------------------------------------------------------------------------------------------------------- Petroleum Heat & Power Co., Inc.: 12.25% Sub. Debs., 2/1/05 64,000 71,840 9.375% Sub. Debs., 2/1/06 350,000 341,250 ----------------------------------------------------------------------------------------------------------------------- TransTexas Gas Corp., 11.50% Sr. Sec. Gtd. Nts., 6/15/02 250,000 271,563 ----------------------------------------------------------------------------------------------------------------------- United Meridian Corp., 10.375% Sr. Sub. Nts., 10/15/05 200,000 219,000 ----------------------------------------------------------------------------------------------------------------------- Vintage Petroleum, Inc., 9% Sr. Sub. Nts., 12/15/05 35,000 36,050 ------------ 2,898,203 - ------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES - 2.4% - ------------------------------------------------------------------------------------------------------------------------- BANKS & THRIFTS - 1.4% ----------------------------------------------------------------------------------------------------------------------- Alliance & Leicester Building Society, 8.75% Sub. Unsec. Nts., 12/7/06 GBP 80,000 139,952 ----------------------------------------------------------------------------------------------------------------------- Banco de Colombia, 5.20% Cv. Jr. Sub. Unsec. Nts., 2/1/99 (4) 200,000 186,000 ----------------------------------------------------------------------------------------------------------------------- Bank Dagang Nasional Indonesia, Zero Coupon Negotiable CD, 14.91%, 11/21/97 (10) IDR 400,000,000 149,711 ----------------------------------------------------------------------------------------------------------------------- Bank of America Malaysia, Zero Coupon Nts., 7.202%, 4/25/97 (10) MYR 150,000 58,118 ----------------------------------------------------------------------------------------------------------------------- First Nationwide Escrow Corp., 10.625% Sr. Sub. Nts., 10/1/03 (5) 50,000 54,250 ----------------------------------------------------------------------------------------------------------------------- Ocwen Financial Corp., 11.875% Nts., 10/1/03 100,000 109,500
66 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- BANKS & THRIFTS (CONTINUED) ----------------------------------------------------------------------------------------------------------------------- PT Hutama Karya, Zero Coupon Medium-Term Nts., 17.514%, 3/19/97 (10) IDR 400,000,000 $ 164,100 ----------------------------------------------------------------------------------------------------------------------- PT Inti Indorayon Utama, Zero Coupon Promissory Nts., 17.242%, 2/12/97 (10) IDR 1,400,000,000 582,466 ----------------------------------------------------------------------------------------------------------------------- Transpower Finance Ltd., 8% Gtd. Unsec. Unsub. Bonds: 2/15/01 (4) NZD 125,000 90,235 3/15/02 NZD 125,000 90,211 ------------ 1,624,543 - ------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 0.8% ----------------------------------------------------------------------------------------------------------------------- Aames Financial Corp., 9.125% Sr. Nts., 11/1/03 100,000 102,250 ----------------------------------------------------------------------------------------------------------------------- Banco del Atlantico SA, 7.875% Eurobonds, 11/5/98 370,000 367,225 ----------------------------------------------------------------------------------------------------------------------- GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 300,000 306,750 ----------------------------------------------------------------------------------------------------------------------- Olympic Financial Ltd., 13% Sr. Nts., 5/1/00 100,000 111,500 ----------------------------------------------------------------------------------------------------------------------- Wilshire Financial Services Group, Inc., 13% Nts., 1/1/04 100,000 101,000 ------------ 988,725 - ------------------------------------------------------------------------------------------------------------------------- INSURANCE - 0.2% ----------------------------------------------------------------------------------------------------------------------- Terra Nova Insurance (UK) Holdings plc, 10.75% Sr. Nts., 7/1/05 100,000 112,826 ----------------------------------------------------------------------------------------------------------------------- Veritas Holdings, Inc., 9.625% Sr. Nts., 12/15/03 (5) 100,000 101,500 ------------ 214,326 - ------------------------------------------------------------------------------------------------------------------------- HOUSING RELATED - 0.4% - ------------------------------------------------------------------------------------------------------------------------- BUILDING MATERIALS - 0.1% ----------------------------------------------------------------------------------------------------------------------- Building Materials Corp. of America, 8.625% Sr. Nts., 12/15/06 (5) 50,000 49,875 ----------------------------------------------------------------------------------------------------------------------- Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 100,000 102,000 ------------ 151,875 - ------------------------------------------------------------------------------------------------------------------------- HOMEBUILDERS/REAL ESTATE - 0.3% ----------------------------------------------------------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Sec. Nts., Series B, 4/1/02 100,000 108,000 ----------------------------------------------------------------------------------------------------------------------- Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11 (5) 250,000 209,531 ------------ 317,531 - ------------------------------------------------------------------------------------------------------------------------- MANUFACTURING - 1.1% - ------------------------------------------------------------------------------------------------------------------------- AEROSPACE/ELECTRONICS/COMPUTERS - 0.5% ----------------------------------------------------------------------------------------------------------------------- Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05 200,000 223,500 ----------------------------------------------------------------------------------------------------------------------- Rohr, Inc., 11.625% Sr. Nts., 5/15/03 100,000 112,500 ----------------------------------------------------------------------------------------------------------------------- Unisys Corp.: 11.75% Sr. Nts., 10/15/04 150,000 160,688 15% Credit Sensitive Nts., 7/1/97 (3) 50,000 52,750 ------------ 549,438 - ------------------------------------------------------------------------------------------------------------------------- AUTOMOTIVE - 0.6% ----------------------------------------------------------------------------------------------------------------------- Collins & Aikman Products Co., 11.50% Gtd. Sr. Sub. Nts., 4/15/06 150,000 164,063 ----------------------------------------------------------------------------------------------------------------------- Foamex LP/Foamex Capital Corp., 11.25% Sr. Nts., 10/1/02 100,000 107,000 ----------------------------------------------------------------------------------------------------------------------- Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 150,000 163,500 ----------------------------------------------------------------------------------------------------------------------- Lear Corp., 9.50% Sub. Nts., 7/15/06 200,000 214,000
67 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- AUTOMOTIVE (CONTINUED) ----------------------------------------------------------------------------------------------------------------------- Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 $ 100,000 $ 97,000 ------------ 745,563 - ------------------------------------------------------------------------------------------------------------------------- CAPITAL GOODS - 0.0% ----------------------------------------------------------------------------------------------------------------------- Mettler Toledo, Inc., 9.75% Gtd. Sr. Sub. Nts., 10/1/06 50,000 52,750 - ------------------------------------------------------------------------------------------------------------------------- MEDIA - 3.5% - ------------------------------------------------------------------------------------------------------------------------- BROADCASTING - 0.4% ----------------------------------------------------------------------------------------------------------------------- Argyle Television, Inc., 9.75% Sr. Sub. Nts., 11/1/05 100,000 101,500 ----------------------------------------------------------------------------------------------------------------------- New City Communications, Inc., 11.375% Sr. Sub. Nts., 11/1/03 (4) 50,000 54,000 ----------------------------------------------------------------------------------------------------------------------- Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02 160,000 168,000 ----------------------------------------------------------------------------------------------------------------------- Young Broadcasting, Inc., 9% Sr. Sub. Nts., Series B, 1/15/06 100,000 97,750 ------------ 421,250 - ------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION - 2.3% ----------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04 (11) 222,316 92,261 ----------------------------------------------------------------------------------------------------------------------- Bell Cablemedia plc: 0%/11.875% Sr. Disc. Nts., 9/15/05 (11) 100,000 81,250 0%/11.95% Sr. Disc. Nts., 7/15/04 (11) 300,000 264,000 ----------------------------------------------------------------------------------------------------------------------- Cablevision Systems Corp.: 10.75% Sr. Sub. Debs., 4/1/04 100,000 104,250 9.875% Sr. Sub. Nts., 5/15/06 150,000 154,688 ----------------------------------------------------------------------------------------------------------------------- Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc. Debs., 11/15/07 (11) 300,000 215,250 ----------------------------------------------------------------------------------------------------------------------- Diamond Cable Communications plc, 0%/11.75% Sr. Disc. Nts., 12/15/05 (11) 525,000 376,031 ----------------------------------------------------------------------------------------------------------------------- EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04 (11) 150,000 124,875 ----------------------------------------------------------------------------------------------------------------------- Fundy Cable Ltd./Ltee, 11% Sr. Sec. Second Priority Nts., 11/15/05 (4) 100,000 106,500 ----------------------------------------------------------------------------------------------------------------------- Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B, 11/1/03 (3) 175,000 179,375 ----------------------------------------------------------------------------------------------------------------------- International CableTel, Inc., 0%/11.50% Sr. Deferred Coupon Nts., Series B, 2/1/06 (11) 360,000 246,600 ----------------------------------------------------------------------------------------------------------------------- Marcus Cable Operating Co. LP/Marcus Cable Capital Corp., 0%/13.50% Sr. Sub. Gtd. Disc. Nts., Series II, 8/1/04 (11) 200,000 164,500 ----------------------------------------------------------------------------------------------------------------------- Rogers Cablesystems Ltd., 10% Sr. Sec. Second Priority Debs., 12/1/07 200,000 212,000 ----------------------------------------------------------------------------------------------------------------------- TeleWest plc, 0%/11% Sr. Disc. Debs., 10/1/07 (11) 500,000 350,000 ----------------------------------------------------------------------------------------------------------------------- United International Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., 12.544%, 11/15/99 (10) 75,000 53,625 ------------ 2,725,205 - ------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED MEDIA - 0.6% ----------------------------------------------------------------------------------------------------------------------- Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/03 200,000 213,000 ----------------------------------------------------------------------------------------------------------------------- Katz Media Corp., 10.50% Sr. Sub. Nts., 1/15/07 (5) 100,000 102,375 ----------------------------------------------------------------------------------------------------------------------- Lamar Advertising Co., 9.625% Sr. Sub. Nts., 12/1/06 50,000 52,000
68 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED MEDIA (CONTINUED) ----------------------------------------------------------------------------------------------------------------------- Panamsat LP/Panamsat Capital Corp., 9.75% Sr. Sec. Nts., 8/1/00 $ 25,000 $ 26,625 ----------------------------------------------------------------------------------------------------------------------- Time Warner Entertainment LP/Time Warner, Inc., 8.375% Sr. Debs., 3/15/23 200,000 203,838 ----------------------------------------------------------------------------------------------------------------------- Universal Outdoor, Inc.: 9.75% Sr. Sub. Nts., 10/15/06 80,000 82,800 9.75% Sr. Sub. Nts., 10/15/06 (5) 70,000 72,275 ------------ 752,913 - ------------------------------------------------------------------------------------------------------------------------- ENTERTAINMENT/FILM - 0.2% ----------------------------------------------------------------------------------------------------------------------- Imax Corp., 7% Sr. Nts., 3/1/01 (9) 200,000 205,000 - ------------------------------------------------------------------------------------------------------------------------- OTHER - 0.6% - ------------------------------------------------------------------------------------------------------------------------- CONGLOMERATES - 0.1% ----------------------------------------------------------------------------------------------------------------------- MacAndrews & Forbes Holdings, Inc., 13% Sub. Debs., 3/1/99 (4) 175,000 175,875 - ------------------------------------------------------------------------------------------------------------------------- ENVIRONMENTAL - 0.1% ----------------------------------------------------------------------------------------------------------------------- Allied Waste North America, Inc., 10.25% Sr. Sub. Nts., 12/1/06 (5) 85,000 89,569 - ------------------------------------------------------------------------------------------------------------------------- SERVICES - 0.4% ----------------------------------------------------------------------------------------------------------------------- Borg-Warner Security Corp., 9.125% Sr. Sub. Nts., 5/1/03 100,000 100,375 ----------------------------------------------------------------------------------------------------------------------- Coinstar, Inc., Units (each unit consists of $1,000 principal amount of 0%/13% sr. sub. disc. nts., 10/1/06 and one warrant to purchase seven ordinary shares) (4)(11)(12) 100,000 70,200 ----------------------------------------------------------------------------------------------------------------------- Empresas ICA Sociedad Controladora SA de CV, 11.875% Nts., 5/30/01 60,000 63,900 ----------------------------------------------------------------------------------------------------------------------- Iron Mountain, Inc., 10.125% Sr. Sub. Nts., 10/1/06 100,000 106,500 ----------------------------------------------------------------------------------------------------------------------- Mechala Group Jamaica Ltd., 12.75% Bonds, 12/30/99 (4) 85,000 85,531 ----------------------------------------------------------------------------------------------------------------------- Protection One Alarm Monitoring, Inc., 6.75% Cv. Gtd. Sr. Sub. Nts., 9/15/03 75,000 69,000 ------------ 495,506 - ------------------------------------------------------------------------------------------------------------------------- RETAIL - 0.6% - ------------------------------------------------------------------------------------------------------------------------- SPECIALTY RETAILING - 0.2% ----------------------------------------------------------------------------------------------------------------------- Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03 70,000 75,950 ----------------------------------------------------------------------------------------------------------------------- Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 100,000 105,000 ------------ 180,950 - ------------------------------------------------------------------------------------------------------------------------- SUPERMARKETS - 0.4% ----------------------------------------------------------------------------------------------------------------------- Grand Union Co., 12% Sr. Nts., 9/1/04 200,000 213,000 ----------------------------------------------------------------------------------------------------------------------- Ralph's Grocery Co.: 10.45% Sr. Nts., 6/15/04 100,000 106,750 10.45% Sr. Nts., 6/15/04 200,000 213,500 ------------ 533,250 - ------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION - 0.4% - ------------------------------------------------------------------------------------------------------------------------- AIR TRANSPORTATION - 0.3% ----------------------------------------------------------------------------------------------------------------------- American International Group, Inc., 11.70% Unsec. Unsub. Bonds, 12/4/01 ITL 90,000,000 70,748 ----------------------------------------------------------------------------------------------------------------------- Atlas Air, Inc., 12.25% Pass-Through Certificates, 12/1/02 250,000 278,750 ------------ 349,498
69 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- RAILROADS - 0.1% ----------------------------------------------------------------------------------------------------------------------- Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts., Series B, 12/15/03 (11) $ 200,000 $ 161,000 - ------------------------------------------------------------------------------------------------------------------------- UTILITIES - 5.9% - ------------------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES - 1.1% ----------------------------------------------------------------------------------------------------------------------- Beaver Valley II Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17 199,000 191,538 ----------------------------------------------------------------------------------------------------------------------- California Energy, Inc., 0%/10.25% Sr. Disc. Nts., 1/15/04 (11) 150,000 159,375 ----------------------------------------------------------------------------------------------------------------------- Calpine Corp., 10.50% Sr. Nts., 5/15/06 100,000 106,375 ----------------------------------------------------------------------------------------------------------------------- El Paso Electric Co., 9.40% First Mtg. Bonds, Series E, 5/1/11 250,000 268,750 ----------------------------------------------------------------------------------------------------------------------- First PV Funding Corp., 10.30% Lease Obligation Bonds, Series 1986A, 1/15/14 158,000 168,468 ----------------------------------------------------------------------------------------------------------------------- New Zealand Electric Corp., 10% Debs., 10/15/01 NZD 535,000 413,610 ------------ 1,308,116 - ------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS - 4.8% ----------------------------------------------------------------------------------------------------------------------- American Communications Services, Inc., 0%/12.75% Sr. Disc. Nts., 4/1/06 (11) 300,000 167,250 ----------------------------------------------------------------------------------------------------------------------- Arch Communications Group, Inc., 0%/10.875% Sr. Disc. Nts., 3/15/08 (11) 100,000 57,625 ----------------------------------------------------------------------------------------------------------------------- Brooks Fiber Properties, Inc., 0%/11.875% Sr. Disc. Nts., 11/1/06 (5)(11) 450,000 289,125 ----------------------------------------------------------------------------------------------------------------------- Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc. Nts., 12/1/04 (11) 200,000 165,000 ----------------------------------------------------------------------------------------------------------------------- Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04 (4)(11) 150,000 125,250 ----------------------------------------------------------------------------------------------------------------------- Cellular Communications International, Inc., Zero Coupon Sr. Disc. Nts., 11.409%, 8/15/00 (10) 600,000 418,500 ----------------------------------------------------------------------------------------------------------------------- Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (11) 50,000 45,750 ----------------------------------------------------------------------------------------------------------------------- Central Temica Guemes, 12% Bonds, 11/26/01 (4) 100,000 101,500 ----------------------------------------------------------------------------------------------------------------------- Colt Telecom Group plc, Units (each unit consists of $1,000 principal amount of 0%/12% sr. disc. nts., 12/15/06 and one warrant to purchase 7.8 ordinary shares) (11)(12) 200,000 121,000 ----------------------------------------------------------------------------------------------------------------------- Comunicacion Celular SA, 0%/13.125% Sr. Deferred Coupon Bonds, 11/15/03 (11) 200,000 133,000 ----------------------------------------------------------------------------------------------------------------------- Geotek Communications, Inc.: 0%/15% Sr. Sec. Disc. Nts., 7/15/05 (11) 250,000 158,750 12% Cv. Sr. Sub. Nts., 2/15/01 250,000 256,250 ----------------------------------------------------------------------------------------------------------------------- GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub. Disc. Nts., 12/15/05 (5)(11) 25,000 16,250 ----------------------------------------------------------------------------------------------------------------------- GST USA, Inc., 0%/13.875% Bonds, 12/15/05 (11) 200,000 123,000 ----------------------------------------------------------------------------------------------------------------------- Hyperion Telecommunications, Inc., 0%/13% Sr. Disc. Nts., Series B, 4/15/03 (11) 200,000 114,500 ----------------------------------------------------------------------------------------------------------------------- IntelCom Group (USA), Inc.: 0%/12.50% Gtd. Sr. Disc. Nts., 5/1/06 (11) 270,000 177,525 0%/13.50% Sr. Disc. Nts., 9/15/05 (11) 200,000 143,000 ----------------------------------------------------------------------------------------------------------------------- Metrocall, Inc., 10.375% Sr. Sub. Nts., 10/1/07 125,000 106,875 ----------------------------------------------------------------------------------------------------------------------- MFS Communications Co., Inc.: 0%/8.875% Sr. Disc. Nts., 1/15/06 (11) 100,000 74,125 0%/9.375% Sr. Disc. Nts., 1/15/04 (11) 300,000 262,500
70 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS (CONTINUED) ----------------------------------------------------------------------------------------------------------------------- Occidente y Caribe Celular SA, Units (each unit consists of $1,000 principal amount of 0%/14% sr. disc. nts., 3/15/04 and one warrant to purchase 5.709 ordinary shares) (5)(11)(12) $ 200,000 $ 121,000 ----------------------------------------------------------------------------------------------------------------------- Omnipoint Corp., 11.625% Sr. Nts., 8/15/06 300,000 313,500 ----------------------------------------------------------------------------------------------------------------------- ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 (5) 160,000 162,800 ----------------------------------------------------------------------------------------------------------------------- Petersburg Long Distance, Inc., Units (each unit consists of $1,000 principal amount of 0%/14% sr. disc. nts., 6/1/04 and one warrant to purchase 34 ordinary shares) (5)(11)(12) 300,000 247,500 ----------------------------------------------------------------------------------------------------------------------- PriCellular Wireless Corp.: 0%/12.25% Sr. Sub. Disc. Nts., 10/1/03 (11) 150,000 129,000 0%/14% Sr. Sub. Disc. Nts., 11/15/01 (11) 300,000 293,250 ----------------------------------------------------------------------------------------------------------------------- Real Time Data, Inc., Units (each unit consists of $1,000 principal amount of 0%/13.50% sub. disc. nts., 8/15/06 and one warrant to purchase six ordinary shares) (4)(11)(12) 300,000 165,000 ----------------------------------------------------------------------------------------------------------------------- Sprint Spectrum LP/Sprint Spectrum Finance Corp., 0%/12.50% Sr. Disc. Nts., 8/15/06 (11) 300,000 203,250 ----------------------------------------------------------------------------------------------------------------------- Teleport Communications Group, Inc.: 0%/11.125% Sr. Disc. Nts., 7/1/07 (11) 700,000 483,000 9.875% Sr. Nts., 7/1/06 100,000 107,500 ----------------------------------------------------------------------------------------------------------------------- USA Mobile Communications, Inc. II, 14% Sr. Nts., 11/1/04 150,000 168,750 ----------------------------------------------------------------------------------------------------------------------- Western Wireless Corp., 10.50% Sr. Sub. Nts., 6/1/06 200,000 210,250 ------------ 5,661,575 ------------ Total Corporate Bonds and Notes (Cost $26,794,049) 27,929,730
SHARES - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 0.5% - ------------------------------------------------------------------------------------------------------------------------- Celcaribe SA (4)(13) 24,390 41,463 ----------------------------------------------------------------------------------------------------------------------- El Paso Electric Co. (13) 4,954 32,201 ----------------------------------------------------------------------------------------------------------------------- Gillett Holdings, Inc. (4)(13) 15,000 540,000 ----------------------------------------------------------------------------------------------------------------------- MFS Communications, Inc. (13) 14 763 ------------ Total Common Stocks (Cost $374,238) 614,427 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 2.4% - ------------------------------------------------------------------------------------------------------------------------- BankAmerica Corp., 8.375%, Series K 7,000 176,750 ----------------------------------------------------------------------------------------------------------------------- BankUnited Capital Trust Preferred Securities (5) 100 100,125 ----------------------------------------------------------------------------------------------------------------------- Cablevision Systems Corp., 8.50% Cum. Cv., Series I 4,000 82,000 ----------------------------------------------------------------------------------------------------------------------- California Federal Bank, 10.625% Non-Cum., Series B 2,500 277,500 ----------------------------------------------------------------------------------------------------------------------- CRIIMI MAE, Inc., 10.875% Cum. Cv. Preferred Stock, Series B 7,000 203,000 ----------------------------------------------------------------------------------------------------------------------- Earthwatch, Inc., 12% Cv. Sr. Preferred Stock, Series C (4)(8) 10,000 100,000 ----------------------------------------------------------------------------------------------------------------------- El Paso Electric Co., 11.40% Series A Preferred Stock (8) 1,626 182,112 ----------------------------------------------------------------------------------------------------------------------- First Nationwide Bank, 11.50% Non-Cum. 1,500 172,125 ----------------------------------------------------------------------------------------------------------------------- Fresenius Medical Care Trust, 9% Preferred Securities 450,000 459,000 ----------------------------------------------------------------------------------------------------------------------- Glendale Federal Bank, F.S.B., 8.75% Non-Cum. Cv., Series E 1,000 58,750
71 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS (CONTINUED) - ------------------------------------------------------------------------------------------------------------------------- Kelley Oil & Gas Corp., $2.625 Cv. (13) 1,000 $ 23,875 ----------------------------------------------------------------------------------------------------------------------- Panamsat Corp., 12.75% Sr. Preferred Exchangeable (4)(8) 350 429,625 ----------------------------------------------------------------------------------------------------------------------- Prime Retail, Inc., $19.00 Cv., Series B 6,000 130,500 ----------------------------------------------------------------------------------------------------------------------- SDW Holdings Corp., 15% Cum. Sr. Exchangeable Preferred Stock (4) 3,750 131,250 ----------------------------------------------------------------------------------------------------------------------- Time Warner, Inc., 10.25% Preferred, Series M (8) 1 1,090 ----------------------------------------------------------------------------------------------------------------------- Walden Residential Properties, Inc., 9.16% Cv. Preferred Stock, Series B 10,000 288,750 ------------ Total Preferred Stocks (Cost $2,675,866) 2,816,452 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- OTHER SECURITIES - 0.1% - ------------------------------------------------------------------------------------------------------------------------- MFS Communications Co., Inc., 8% Cv. Depositary Shares each Representing 1/100 Share of Dividend Enhanced Convertible Stock (Cost $156,459) 2,000 182,500 UNITS - ------------------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.1% - ------------------------------------------------------------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99 1,500 2,625 ----------------------------------------------------------------------------------------------------------------------- Cellular Communications International, Inc. Wts., Exp. 8/03 (4) 300 6,000 ----------------------------------------------------------------------------------------------------------------------- Comunicacion Celular SA Wts., Exp. 11/03 (4) 200 15,000 ----------------------------------------------------------------------------------------------------------------------- Eye Care Centers of America, Inc. Wts., Exp. 10/03 (4) 70 315 ----------------------------------------------------------------------------------------------------------------------- Geotek Communications, Inc. Wts., Exp. 7/05 7,500 18,750 ----------------------------------------------------------------------------------------------------------------------- Hyperion Telecommunications, Inc. Wts., Exp. 4/01 (4) 200 4,000 ----------------------------------------------------------------------------------------------------------------------- Icon Health & Fitness, Inc. Wts., Exp. 11/99 (4) 200 10,000 ----------------------------------------------------------------------------------------------------------------------- In-Flight Phone Corp. Wts., Exp. 8/02 200 -- ----------------------------------------------------------------------------------------------------------------------- IntelCom Group, Inc. Wts., Exp. 9/05 825 7,425 ----------------------------------------------------------------------------------------------------------------------- SDW Holdings Corp., Cl. B Wts., Exp. 12/06 (4) 375 4,875 ----------------------------------------------------------------------------------------------------------------------- United International Securities Ltd. Wts., Exp. 11/99 (4) 200 4,000 ------------ Total Rights, Warrants and Certificates (Cost $10,175) 72,990 Principal Amount(1) - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 4.0% - ------------------------------------------------------------------------------------------------------------------------- Bayerische Landesbank Girozentrale, New York Branch, 7.15% Deutsche Mark Currency Protected Yield Curve CD, 7/25/97 $ 130,000 129,974 ----------------------------------------------------------------------------------------------------------------------- Canadian Imperial Bank of Commerce, New York Branch: 13.50% Greek Drachma/Swiss Franc Linked Nts., 2/5/97 150,000 151,815 16.75% CD, 4/16/97 (indexed to the Federation GKO, Zero Coupon, 4/9/97) (4) 100,000 99,700 17.30% CD, 2/26/97 (indexed to the Federation GKO, Zero Coupon, 2/19/97) (4) 200,000 199,700
72 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) PRINCIPAL MARKET VALUE AMOUNT(1) (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- STRUCTURED INSTRUMENTS (CONTINUED) - ------------------------------------------------------------------------------------------------------------------------- Goldman, Sachs & Co. Argentina Local Market Securities Trust, 11.30%, 4/1/00 [representing debt of Argentina (Republic of) Bonos del Tesoro Bonds, Series 10, 5.563%, 4/1/00 and an interest rate swap between Goldman Sachs and the Trust] (4) $ 182,608 $ 188,315 ----------------------------------------------------------------------------------------------------------------------- ING (U.S.) Financial Holdings Corp. Zero Coupon: Chilean Peso Linked Nts., with Chilean Sovereign Risk, 9.05%, 3/12/97 (10) 269,522 262,300 Korean Won/U.S. Dollar Linked Nts., 10.87%, 6/9/97 (10) 160,000 148,768 Nts. Linked to the Greek Drachma/Swiss Franc Exchange Rate, 14.829%, 12/4/97 (10) 650,000 551,460 ----------------------------------------------------------------------------------------------------------------------- Internationale Nederlanden (U.S.) Capital Holdings Corp. Zero Coupon Czech Koruna Linked: Nts., 12.267%, 2/18/97 (10) CZK 14,573,624 527,643 Promissory Nts.: 12.184%, 6/23/97 (10) CZK 4,380,000 152,097 12.285%, 6/20/97 (10) CZK 10,614,246 368,933 ----------------------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings Zero Coupon: Greek Drachma/Swiss Franc Linked Nts., 1.361%, 1/13/97 (10) 100,000 101,950 U.S. Dollar Nts. Linked to Greek Drachma/Swiss Franc: 15.639%, 12/23/97 (10) 300,000 298,980 15.453%, 12/26/97 (10) 350,000 349,510 15.499%, 12/30/97 (10) 700,000 700,000 ----------------------------------------------------------------------------------------------------------------------- Salomon, Inc., Zero Coupon Chilean Peso-Indexed Enhanced Access Nts.: 9.25%, 3/11/97 (10) 99,713 96,871 10.116%, 6/17/97 (10) 152,868 144,537 ----------------------------------------------------------------------------------------------------------------------- Swiss Bank Corp., New York Branch, 6.60% CD, 1/30/97 (indexed to the closing Nikkei 225 Index on 1/23/97) NZD 362,428 241,063 ------------ Total Structured Instruments (Cost $4,728,667) 4,713,616
DATE STRIKE CONTRACTS - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- PUT OPTIONS PURCHASED - 0.0% - ------------------------------------------------------------------------------------------------------------------------- Deutsche Mark Put Opt. 2/97 1.54DEM 2,720,000 17,410 Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali, 9.50%, 5/1/01 Put Opt. 7/97 102.30% 395 119 ------------- Total Put Options Purchased (Cost $36,228) 17,529 ----------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $123,793,236) 106.6% 126,561,270 ----------------------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (6.6) (7,844,860) --------- ------------- NET ASSETS 100.0% $118,716,410 --------- ------------- --------- -------------
73 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) 1. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: ARP - Argentine Peso GBP - British Pound Sterling AUD - Australian Dollar IDR - Indonesian Rupiah CAD - Canadian Dollar IEP - Irish Punt CZK - Czech Koruna ITL - Italian Lira DEM - German Deutsche Mark MXP - Mexican Peso DKK - Danish Krone MYR - Malaysian Ringgit ESP - Spanish Peseta NZD - New Zealand Dollar FIM - Finnish Markka SEK - Swedish Krona 2. When-issued security to be delivered and settled after December 31, 1996. 3. Represents the current interest rate for a variable rate security. 4. Identifies issues considered to be illiquid - See applicable note of Notes to Financial Statements. 5. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $3,681,347 or 3.10% of the Fund's net assets, at December 31, 1996. 6. A sufficient amount of securities has been designated to cover outstanding written call options, as follows: CONTRACTS/ PRINCIPAL SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED (NOTE 1) - ------------------------------------------------------------------------------------------------------------------------- Call option on Australian Dollar 515,968 2/97 1.24AUD $ 5,315 $ 1,868 Call option on Australian Dollar 512,384 2/97 1.249AUD 5,124 2,864 Call option on Australian Dollar 1,250,000 3/97 1.25AUD 11,750 6,813 Call option on Australian Dollar 1,280,000 3/97 1.2578AUD 11,776 10,752 Call option on Banco Hipotecario Nacional (Argentina) Medium-Term Nts., 10.625%, 8/7/06 400,000 8/00 100.00% 3,680 12,000 Call option on British Pound 1,295,000 1/97 1.632GBP 29,163 103,471 Call option on New Zealand Dollar 564,771 2/97 1.3988NZD 4,631 3,106 Call option on New Zealand Dollar 298,830 2/97 1.4055NZD 2,435 1,584 Call option on New Zealand Dollar 440,000 2/97 1.4071NZD 1,122 1,760 Call option on New Zealand Dollar 341,136 2/97 1.4071NZD 2,780 1,910 Call option on New Zealand Dollar 700,000 3/97 1.413NZD 4,760 4,354 Call option on New Zealand Dollar 395,472 3/97 1.416NZD 3,678 2,531 Call option on New Zealand Dollar 685,000 3/97 1.424NZD 4,658 5,617 Call option on New Zealand Dollar 605,000 3/97 1.4288NZD 4,023 5,929 Call option on New Zealand Dollar 490,000 3/97 1.4288NZD 3,259 4,802 Call option on New Zealand Dollar 1,330,000 1/97 91.00% 13,092 13,092 Put option on Germany (Republic of) Bonds, Series 118, 5.25%, 2/21/01 374,662 7/97 99.57%DEM 8,992 1,011 -------- -------- $120,238 $183,464 -------- -------- -------- --------
7. Securities with an aggregate market value of $1,411,669 collateralized accounts to cover initial margin requirements on open futures sales contracts. See applicable note of Notes to Financial Statements. 8. Interest or dividend is paid in kind. 9. Represents the current interest rate for an increasing rate security. 10. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 11. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 74 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) 12. Units may be comprised of several components, such as debt and equity and/or warrants to purchase equity at some point in the future. For units which represent debt securities, principal amount disclosed represents total underlying principal. 13. Non-income producing security. See accompanying Notes to Financial Statements. 75 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1996 PRINCIPAL MARKET VALUE AMOUNT (NOTE 1) - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- Non-Convertible Corporate Bonds and Notes - 0.3% - --------------------------------------------------------------------------------------------------------------- Penn Traffic Co., 11.50% Sr. Nts., 4/15/06 (Cost $154,500) $ 150,000 $ 132,000 - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES - 9.2% - --------------------------------------------------------------------------------------------------------------- ALZA Corp., 5% Cv. Sub. Debs., 5/1/06 200,000 193,000 ----------------------------------------------------------------------------------------------------------- Apple Computer, Inc., 6% Cv. Sub. Nts., 6/1/01 (1) 250,000 246,563 ----------------------------------------------------------------------------------------------------------- Apple Computer, Inc., 6% Cv. Sub. Nts., 6/1/01 (2) 100,000 98,625 ----------------------------------------------------------------------------------------------------------- Central Garden & Pet Co., 6% Cv. Sub. Nts., 11/15/03 (1) 300,000 297,750 ----------------------------------------------------------------------------------------------------------- Cirrus Logic, Inc., 6% Cv. Sub. Nts., 12/15/03 (1) 400,000 367,000 ----------------------------------------------------------------------------------------------------------- Continental Airlines, Inc., 6.75% Cv. Sub. Nts., 4/15/06 (1) 500,000 550,000 ----------------------------------------------------------------------------------------------------------- Corporate Express, Inc., 4.50% Cv. Sub. Nts., 7/1/00 (1) 250,000 231,875 ----------------------------------------------------------------------------------------------------------- Home Depot, Inc., 3.25% Cv. Sub. Nts., 10/1/01 230,000 225,112 ----------------------------------------------------------------------------------------------------------- Omnicom Group, Inc., 4.25% Cv. Sub. Debs., 1/3/07 (1)(3) 500,000 510,625 ----------------------------------------------------------------------------------------------------------- Platinum Technology, Inc., 6.75% Cv. Sub. Nts., 11/15/01 500,000 611,875 ----------------------------------------------------------------------------------------------------------- Saks Holdings, Inc., 5.50% Cv. Sub. Nts., 9/15/06 150,000 137,625 ----------------------------------------------------------------------------------------------------------- Softkey International, Inc., 5.50% Cv. Sr. Nts., 11/1/00 300,000 249,375 ----------------------------------------------------------------------------------------------------------- Time Warner, Inc., Zero Coupon Cv. Sr. Sub. Nts., 28.10%, 6/22/13 (4) 500,000 215,000 ----------------------------------------------------------------------------------------------------------- U.S. Office Products Co., 5.50% Cv. Sub. Nts., 5/15/03 (1) 400,000 370,500 ----------- Total Convertible Corporate Bonds and Notes (Cost $4,214,828) 4,304,925 Shares - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- COMMON STOCKS - 74.6% - --------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 2.8% - --------------------------------------------------------------------------------------------------------------- CHEMICALS - 2.8% ----------------------------------------------------------------------------------------------------------- IMC Global, Inc. 15,000 586,875 ----------------------------------------------------------------------------------------------------------- Olin Corp. 6,500 244,562 ----------------------------------------------------------------------------------------------------------- Potash Corp. of Saskatchewan, Inc. 6,000 510,000 ----------- 1,341,437 - --------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 18.7% - --------------------------------------------------------------------------------------------------------------- AUTOS & HOUSING - 0.8% ----------------------------------------------------------------------------------------------------------- General Motors Corp. 7,000 390,250 - --------------------------------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 8.4% ----------------------------------------------------------------------------------------------------------- AMR Corp. (5) 4,500 396,562 ----------------------------------------------------------------------------------------------------------- Brinker International, Inc. (5) 16,950 271,200 ----------------------------------------------------------------------------------------------------------- Delta Air Lines, Inc. 8,250 584,719 ----------------------------------------------------------------------------------------------------------- Eastman Kodak Co. 2,500 200,625 ----------------------------------------------------------------------------------------------------------- Gaylord Entertainment Co., Cl. A 7,500 171,562 ----------------------------------------------------------------------------------------------------------- Host Marriott Corp. (5) 10,000 160,000 ----------------------------------------------------------------------------------------------------------- ITT Corp. (New) (5) 12,500 542,187 ----------------------------------------------------------------------------------------------------------- Nintendo Co. Ltd. 10,000 714,224 ----------------------------------------------------------------------------------------------------------- Northwest Airlines Corp., Cl. A (5) 5,000 195,625 ----------------------------------------------------------------------------------------------------------- Viacom, Inc., Cl. B (5) 20,000 697,500 ----------- 3,934,204 - --------------------------------------------------------------------------------------------------------------- Media - 5.2% ----------------------------------------------------------------------------------------------------------- Comcast Corp., Cl. A Special 15,000 267,187 ----------------------------------------------------------------------------------------------------------- Evergreen Media Corp., Cl. A (5) 12,000 300,000
76 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - --------------------------------------------------------------------------------------------------------------- MEDIA (CONTINUED) ----------------------------------------------------------------------------------------------------------- Heritage Media Corp., Cl. A (5) 12,500 $ 140,625 ----------------------------------------------------------------------------------------------------------- Metro Networks, Inc. (5) 17,500 441,875 ----------------------------------------------------------------------------------------------------------- SFX Broadcasting, Inc., Cl. A (5) 12,500 371,875 ----------------------------------------------------------------------------------------------------------- Tele-Communications, Inc. (New), TCI Group, Series A (5) 5,000 65,312 ----------------------------------------------------------------------------------------------------------- Time Warner, Inc. 6,000 225,000 ----------------------------------------------------------------------------------------------------------- U S West Media Group (5) 17,500 323,750 ----------------------------------------------------------------------------------------------------------- World Color Press, Inc. (5) 15,000 288,750 ----------- 2,424,374 - --------------------------------------------------------------------------------------------------------------- RETAIL: GENERAL - 1.8% ----------------------------------------------------------------------------------------------------------- Dillard Department Stores, Inc., Cl. A 10,000 308,750 ----------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. (5) 16,000 546,000 ----------- 854,750 - --------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 2.5% ----------------------------------------------------------------------------------------------------------- Alco Standard Corp. 8,000 413,000 ----------------------------------------------------------------------------------------------------------- Gap, Inc. (The) 2,500 75,312 ----------------------------------------------------------------------------------------------------------- Intelligent Electronics, Inc. (5) 45,000 360,000 ----------------------------------------------------------------------------------------------------------- Intimate Brands, Inc., Cl. A 7,500 127,500 ----------------------------------------------------------------------------------------------------------- Limited, Inc. 10,000 183,750 ---------- 1,159,562 - --------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 12.4% - --------------------------------------------------------------------------------------------------------------- BEVERAGES - 0.6% ----------------------------------------------------------------------------------------------------------- Cott Corp. 40,000 290,000 - --------------------------------------------------------------------------------------------------------------- FOOD - 1.3% ----------------------------------------------------------------------------------------------------------- Dominick's Supermarkets, Inc. (5) 15,000 326,250 ----------------------------------------------------------------------------------------------------------- H.J. Heinz Co. 7,500 268,125 ----------- 594,375 - --------------------------------------------------------------------------------------------------------------- HEALTHCARE/DRUGS - 1.2% ----------------------------------------------------------------------------------------------------------- Pharmacia & Upjohn, Inc. 10,000 396,250 ----------------------------------------------------------------------------------------------------------- Schering-Plough Corp. 2,500 161,875 ----------- 558,125 - --------------------------------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 5.6% ----------------------------------------------------------------------------------------------------------- American Medical Response, Inc. (5) 31,000 1,007,500 ----------------------------------------------------------------------------------------------------------- Columbia/HCA Healthcare Corp. 5,250 213,937 ----------------------------------------------------------------------------------------------------------- Guidant Corp. 9,500 541,500 ----------------------------------------------------------------------------------------------------------- MedPartners/Mullikin, Inc. (5) 10,000 210,000 ----------------------------------------------------------------------------------------------------------- OrNda Healthcorp (5) 10,000 292,500 ----------------------------------------------------------------------------------------------------------- Ventritex, Inc. (5) 15,000 369,375 ----------- 2,634,812 - --------------------------------------------------------------------------------------------------------------- HOUSEHOLD GOODS - 1.1% ----------------------------------------------------------------------------------------------------------- Kimberly-Clark Corp. 3,500 333,375 ----------------------------------------------------------------------------------------------------------- Tambrands, Inc. 4,000 163,500 ----------- 496,875 - --------------------------------------------------------------------------------------------------------------- TOBACCO - 2.6% ----------------------------------------------------------------------------------------------------------- Philip Morris Cos., Inc. 8,750 985,469 ----------------------------------------------------------------------------------------------------------- RJR Nabisco Holdings Corp. 7,500 255,000 ----------- 1,240,469 - --------------------------------------------------------------------------------------------------------------- ENERGY - 1.7% - --------------------------------------------------------------------------------------------------------------- Apache Corp. 2,500 88,437
77 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - --------------------------------------------------------------------------------------------------------------- ENERGY (CONTINUED) - --------------------------------------------------------------------------------------------------------------- Kerr-McGee Corp. 3,000 $ 216,000 ----------------------------------------------------------------------------------------------------------- Tidewater, Inc. 3,000 135,750 ----------------------------------------------------------------------------------------------------------- Weatherford Enterra, Inc. (5) 7,000 210,000 ----------------------------------------------------------------------------------------------------------- Western Atlas, Inc. (5) 2,000 141,750 ------------ 791,937 - --------------------------------------------------------------------------------------------------------------- FINANCIAL - 12.9% - --------------------------------------------------------------------------------------------------------------- BANKS - 5.4% ----------------------------------------------------------------------------------------------------------- Boatmen's Bancshares, Inc. 4,000 258,000 ----------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New) 8,750 780,937 ----------------------------------------------------------------------------------------------------------- Commonwealth Bancorp, Inc. 10,000 150,000 ----------------------------------------------------------------------------------------------------------- First Commerce Corp. 6,500 252,687 ----------------------------------------------------------------------------------------------------------- First Union Corp. 3,250 240,500 ----------------------------------------------------------------------------------------------------------- Fleet Financial Group, Inc. 9,500 473,813 ----------------------------------------------------------------------------------------------------------- J.P. Morgan & Co., Inc. 2,250 219,656 ----------------------------------------------------------------------------------------------------------- Standard Federal Bancorporation 2,500 142,188 ------------ 2,517,781 - --------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 5.0% ----------------------------------------------------------------------------------------------------------- Advanta Corp., Cl. B 20,000 817,500 ----------------------------------------------------------------------------------------------------------- American Express Co. 8,750 494,375 ----------------------------------------------------------------------------------------------------------- Dean Witter, Discover & Co. 8,500 563,125 ----------------------------------------------------------------------------------------------------------- Fannie Mae 3,000 111,750 ----------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. 1,000 110,125 ----------------------------------------------------------------------------------------------------------- Travelers Group, Inc. 6,000 272,250 ------------ 2,369,125 - --------------------------------------------------------------------------------------------------------------- INSURANCE - 2.5% ----------------------------------------------------------------------------------------------------------- Allstate Corp. 8,000 463,000 ----------------------------------------------------------------------------------------------------------- Everest Reinsurance Holdings, Inc. 14,500 416,875 ----------------------------------------------------------------------------------------------------------- IPC Holdings Ltd. 12,500 279,688 ------------ 1,159,563 - --------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 4.8% - --------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 0.4% ----------------------------------------------------------------------------------------------------------- Raychem Corp. 2,500 200,313 - --------------------------------------------------------------------------------------------------------------- INDUSTRIAL SERVICES - 2.4% ----------------------------------------------------------------------------------------------------------- Cognizant Corp. 8,500 280,500 ----------------------------------------------------------------------------------------------------------- DecisionOne Holdings Corp. (5) 15,000 247,500 ----------------------------------------------------------------------------------------------------------- ICTS International NV (5) 32,500 329,063 ----------------------------------------------------------------------------------------------------------- Intelligroup, Inc. (5) 12,500 137,500 ----------------------------------------------------------------------------------------------------------- Viad Corp. 8,000 132,000 ------------ 1,126,563 - --------------------------------------------------------------------------------------------------------------- MANUFACTURING - 2.0% ----------------------------------------------------------------------------------------------------------- AGCO Corp. 5,000 143,125 ----------------------------------------------------------------------------------------------------------- American Standard Cos., Inc. (5) 13,500 516,375 ----------------------------------------------------------------------------------------------------------- Brown & Sharpe Manufacturing Co. (5) 20,000 280,000 ------------ 939,500 - --------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 20.7% - --------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 3.4% ----------------------------------------------------------------------------------------------------------- Boeing Co. 3,168 336,996 ----------------------------------------------------------------------------------------------------------- Lockheed Martin Corp. 3,500 320,250
78 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE (CONTINUED) ----------------------------------------------------------------------------------------------------------- Raytheon Co. 2,500 $ 120,313 ----------------------------------------------------------------------------------------------------------- Rockwell International Corp. 2,000 121,750 ----------------------------------------------------------------------------------------------------------- Sundstrand Corp. 4,500 191,250 ----------------------------------------------------------------------------------------------------------- TRW, Inc. 10,000 495,000 ------------ 1,585,559 - --------------------------------------------------------------------------------------------------------------- COMPUTER HARDWARE - 7.8% ----------------------------------------------------------------------------------------------------------- Adaptec, Inc. (5) 8,000 320,000 ----------------------------------------------------------------------------------------------------------- Cabletron Systems, Inc. (5) 17,500 581,875 ----------------------------------------------------------------------------------------------------------- Ingram Micro, Inc., Cl. A (5) 5,000 115,000 ----------------------------------------------------------------------------------------------------------- International Business Machines Corp. 5,000 755,000 ----------------------------------------------------------------------------------------------------------- Lexmark International Group, Inc., Cl. A (5) 14,000 386,750 ----------------------------------------------------------------------------------------------------------- Read-Rite Corp. (5) 10,000 252,500 ----------------------------------------------------------------------------------------------------------- Seagate Technology (5) 18,000 711,000 ----------------------------------------------------------------------------------------------------------- Sun Microsystems, Inc. (5) 22,000 565,125 ------------ 3,687,250 - --------------------------------------------------------------------------------------------------------------- COMPUTER SOFTWARE - 3.9% ----------------------------------------------------------------------------------------------------------- Electronic Data Systems Corp. 4,500 194,625 ----------------------------------------------------------------------------------------------------------- First Data Corp. 5,000 182,500 ----------------------------------------------------------------------------------------------------------- Informix Corp. (5) 10,000 203,750 ----------------------------------------------------------------------------------------------------------- PLATINUM Technology, Inc. (5) 12,500 170,313 ----------------------------------------------------------------------------------------------------------- Structural Dynamics Research Corp. (5) 37,500 750,000 ----------------------------------------------------------------------------------------------------------- Versant Object Technology Corp. (5) 10,000 186,250 ----------------------------------------------------------------------------------------------------------- Worldtalk Corp. (5) 20,000 150,000 ------------ 1,837,438 - --------------------------------------------------------------------------------------------------------------- ELECTRONICS - 3.6% ----------------------------------------------------------------------------------------------------------- ADT Ltd. (5) 10,000 228,750 ----------------------------------------------------------------------------------------------------------- Applied Materials, Inc. (5) 2,000 71,875 ----------------------------------------------------------------------------------------------------------- Intel Corp. 1,250 163,672 ----------------------------------------------------------------------------------------------------------- LSI Logic Corp. (5) 10,000 267,500 ----------------------------------------------------------------------------------------------------------- Novellus Systems, Inc. (5) 2,250 121,922 ----------------------------------------------------------------------------------------------------------- Waters Corp. (5) 27,500 835,313 ------------ 1,689,032 - --------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 2.0% ----------------------------------------------------------------------------------------------------------- Cisco Systems, Inc. (5) 1,500 95,438 ----------------------------------------------------------------------------------------------------------- LCI International, Inc. (5) 12,500 268,750 ----------------------------------------------------------------------------------------------------------- MCI Communications Corp. 12,500 408,594 ----------------------------------------------------------------------------------------------------------- WorldCom, Inc. (5) 1,500 39,094 ----------------------------------------------------------------------------------------------------------- XLConnect Solutions, Inc. (5) 5,000 143,750 ------------ 955,626 - --------------------------------------------------------------------------------------------------------------- UTILITIES - 0.6% - --------------------------------------------------------------------------------------------------------------- GTE Corp. 6,250 284,375 ------------ Total Common Stocks (Cost $31,800,395) 35,063,295 - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 5.3% - --------------------------------------------------------------------------------------------------------------- Cablevision Systems Corp., 8.50% Cum. Cv., Series I 7,500 153,750 ----------------------------------------------------------------------------------------------------------- Host Marriott Financial Trust, 6.75% Cv. Preferred Stock (1)(5) 10,000 535,000 ----------------------------------------------------------------------------------------------------------- K-Mart Financing I, 7.75% Cv. Preferred Stock 7,500 365,625
79 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) MARKET VALUE SHARES (NOTE 1) - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS (CONTINUED) - --------------------------------------------------------------------------------------------------------------- Microsoft Corp., $2.196 Cv., Series A 2,500 $ 200,313 ----------------------------------------------------------------------------------------------------------- SFX Broadcasting, Inc., 6.50% Cv. Preferred, Series D (1) 5,000 231,875 ----------------------------------------------------------------------------------------------------------- SunAmerica, Inc., $3.188 Cv. Preferred Equity Redemption Cum. Stock (5) 12,500 528,125 ----------------------------------------------------------------------------------------------------------- Trans World Airlines, Inc., 8% Cum. Cv. Exchangeable Preferred Stock (1) 10,000 242,500 ----------------------------------------------------------------------------------------------------------- Vanstar Financing Trust, 6.75% Cv. Preferred Stock (1) 5,000 260,000 ------------ Total Preferred Stocks (Cost $2,706,706) 2,517,188 - --------------------------------------------------------------------------------------------------------------- Other Securities - 4.8% - --------------------------------------------------------------------------------------------------------------- AnnTaylor Finance Trust, 8.50% Cv. Trust Originated Preferred Securities 7,500 393,750 ----------------------------------------------------------------------------------------------------------- Elsag Bailey Financing Trust, 5.50% Cv. Trust Originated Preferred Securities (1) 7,500 270,000 ----------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 6% Cv. Preferred, Structured Yield Product Exchangeable for Cox Communications, Inc. Common Stock 17,500 389,375 ----------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 6.25% Structured Yield Product Exchangeable for Stock of IMC Global, Inc. 10,000 401,250 ----------------------------------------------------------------------------------------------------------- Salomon, Inc., 7.625% Cv. Preferred, Debt Exchangeable for Common Stock of Financial Security Assurance Holdings Ltd. 6,800 209,950 ----------------------------------------------------------------------------------------------------------- Wendy's Financing I/Wendy's International, Inc., 5% Cum. Cv. Preferred Stock, Series A 5,000 260,000 ----------------------------------------------------------------------------------------------------------- Westinghouse Electric Corp., Participating Equity Preferred Shares, $1.30 Cv., Series C (1) 20,000 357,500 ------------ Total Other Securities (Cost $2,219,700) 2,281,825 PRINCIPAL MARKET VALUE AMOUNT (NOTE 1) - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT - 6.4% - --------------------------------------------------------------------------------------------------------------- Repurchase agreement with Goldman, Sachs & Co., 6.52%, dated 12/31/96, to be repurchased at $3,001,087 on 1/2/97, collateralized by U.S. Treasury Nts., 5.50%-7.50%, 7/15/99-8/15/05, with a value of $3,068,784 (Cost $3,000,000) $ 3,000,000 3,000,000 ----------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $44,096,129) 100.6% 47,299,233 ----------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.6) (289,989) ------------ ------------ NET ASSETS 100.0% $ 47,009,244 ------------ ------------ ------------ ------------
80 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) 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 $4,471,188 or 9.51% of the Fund's net assets, at December 31, 1996. 2. Identifies issues considered to be illiquid - See applicable note of Notes to Financial Statements. 3. When-issued security to be delivered and settled after December 31, 1996. 4. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 5. Non-income producing security. See accompanying Notes to Financial Statements. 81 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996 OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER CAPITAL OPPENHEIMER MONEY HIGH INCOME BOND APPRECIATION GROWTH FUND FUND FUND FUND FUND ------------------------------------------------------------------------ ASSETS: Investments, at value (cost * ) (including repurchase agreements **) - see accompanying statements $126,653,598 $188,944,878 $454,375,154 $624,437,033 $282,517,247 Unrealized appreciation on forward foreign currency exchange contracts - See applicable note -- 214,142 493,660 -- -- Cash 46,464 1,661,545 283,522 1,370,404 402,646 Receivables: Closed forward foreign currency exchange contracts -- 39,075 160,642 -- -- Daily variation on futures contracts - See applicable note -- -- -- -- -- Dividends, interest and principal paydowns 279,382 2,648,895 5,918,417 87,611 209,594 Shares of beneficial interest sold 3,274,696 48,723 257,841 743,805 265,873 Investments sold -- 2,034,126 105,013 3,398,148 6,576,480 Other 5,797 5,662 22,853 7,041 5,364 ------------------------------------------------------------------------ Total assets 130,259,937 195,597,046 461,617,102 630,044,042 289,977,204 ------------------------------------------------------------------------ LIABILITIES: Options written, at value (premiums received ***) - see accompanying statements and notes -- 85,670 135,465 -- -- Unrealized depreciation on forward foreign currency exchange contracts - See applicable note -- 817 840 -- -- Payables and other liabilities: Closed forward foreign currency exchange contracts -- 73,512 194,781 -- -- Daily variation on futures contracts - See applicable note -- 16,431 51,600 627,000 -- Dividends 207,568 -- -- -- -- Custodian fees 9,988 21,606 18,186 12,417 28,869 Investments purchased (including those purchased on a when-issued basis ****) - See applicable note -- 3,985,947 34,639,233 9,598,112 3,846,972 Shares of beneficial interest redeemed 298,879 87,930 47,480 2,324,434 145,589 Other 24,982 31,760 90,572 89,807 35,624 ------------------------------------------------------------------------ Total liabilities 541,417 4,303,673 35,178,157 12,651,770 4,057,054 ------------------------------------------------------------------------ NET ASSETS $129,718,520 $191,293,373 $426,438,945 $617,392,272 $285,920,150 ------------------------------------------------------------------------ ------------------------------------------------------------------------ COMPOSITION OF NET ASSETS: Paid-in capital $129,733,901 $180,181,078 $418,133,217 $481,442,351 $210,289,842 Undistributed net investment income -- 913,946 1,873,402 1,479,312 1,631,413 Accumulated net realized gain (loss) from investments and foreign currency transactions (15,381) (367,314) 1,330,823 29,248,149 16,943,396 Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies -- 10,565,663 5,101,503 105,222,460 57,055,499 ------------------------------------------------------------------------ NET ASSETS $129,718,520 $191,293,373 $426,438,945 $617,392,272 $285,920,150 ------------------------------------------------------------------------ ------------------------------------------------------------------------ SHARES OF BENEFICIAL INTEREST OUTSTANDING 129,733,922 17,186,015 36,675,439 15,949,976 10,495,044 NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $1.00 $11.13 $11.63 $38.71 $ 27.24 Cost $126,653,598 $178,526,490 $449,692,946 $519,731,267 $225,461,748 **Repurchase agreements -- $ 12,900,000 $ 14,000,000 $138,000,000 $ 73,000,000 ***Premiums received -- $ 42,285 $ 80,184 -- -- ****When-issued basis -- $ 1,137,309 $ 23,817,266 -- --
See accompanying Notes to Financial Statements. 82 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) DECEMBER 31, 1996 OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER MULTIPLE GLOBAL STRATEGIC GROWTH STRATEGIES SECURITIES BOND BOND FUND FUND FUND FUND ------------------------------------------------------ ASSETS: Investments, at value (cost * ) (including repurchase agreements **) - see accompanying statements $490,493,991 $588,435,102 $126,561,270 $47,299,233 Unrealized appreciation on forward foreign currency exchange contracts - See applicable note -- 2,384,877 177,714 -- Cash 382,731 249,257 1,078,050 347,450 Receivables: Closed forward foreign currency exchange contracts -- 141,470 31,726 -- Daily variation on futures contracts - See applicable note -- -- 112,480 -- Dividends, interest and principal paydowns 3,758,618 729,667 2,037,566 84,424 Shares of beneficial interest sold 250,065 325,558 70,406 102,680 Investments sold 382,810 965,585 447,735 -- Other 8,366 7,129 3,551 3,067 ------------------------------------------------------ Total assets 495,276,581 593,238,645 130,520,498 47,836,854 ------------------------------------------------------ LIABILITIES: Options written, at value (premiums received ***) - see accompanying statements and notes 2,402,150 -- 183,464 -- Unrealized depreciation on forward foreign currency exchange contracts - See applicable note -- 259,966 -- -- Payables and other liabilities: Closed forward foreign currency exchange contracts -- -- 8,704 -- Daily variation on futures contracts - See applicable note -- -- 1,000 -- Dividends -- -- -- -- Custodian fees 34,558 144,157 15,974 12,963 Investments purchased (including those purchased on a when-issued basis ****) - See applicable note 8,378,745 10,463,998 10,988,361 755,000 Shares of beneficial interest redeemed 133,561 229,118 581,333 39,701 Other 42,087 61,217 25,252 19,946 ------------------------------------------------------ Total liabilities 10,991,101 11,158,456 11,804,088 827,610 ------------------------------------------------------ NET ASSETS $484,285,480 $582,080,189 $118,716,410 $47,009,244 ------------------------------------------------------ ------------------------------------------------------ COMPOSITION OF NET ASSETS: Paid-in capital $400,616,188 $508,449,760 $114,926,697 $41,140,854 Undistributed net investment income 961,193 7,724,243 751,089 12,643 Accumulated net realized gain (loss) from investments and foreign currency transactions 17,756,534 (17,047,799) 33,221 2,652,643 Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 64,951,565 82,953,985 3,005,403 3,203,104 ------------------------------------------------------ NET ASSETS $484,285,480 $582,080,189 $118,716,410 $47,009,244 ------------------------------------------------------ ------------------------------------------------------ SHARES OF BENEFICIAL INTEREST OUTSTANDING 30,992,794 32,946,137 23,316,322 2,870,820 NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $ 15.63 $ 17.67 $5.09 $ 16.37 *Cost $424,386,458 $507,602,388 $123,793,236 $44,096,129 **Repurchase agreements $ 73,600,000 $ 60,500,000 -- $ 3,000,000 ***Premiums received $ 1,235,136 -- $ 120,238 -- ****When-issued basis $ 6,145,771 -- $ 10,061,458 $ 500,000
See accompanying Notes to Financial Statements. 83 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER CAPITAL OPPENHEIMER MONEY HIGH INCOME BOND APPRECIATION GROWTH FUND FUND FUND FUND FUND ------------------------------------------------------------------------ INVESTMENT INCOME: Interest (net of withholding taxes of *) $5,465,680 $14,989,197 $22,103,878 $ 4,761,662 $ 1,546,005 Dividends (net of withholding taxes of **) -- 722,664 118,899 255,664 1,313,796 ------------------------------------------------------------------------ Total income 5,465,680 15,711,861 22,222,777 5,017,326 2,859,801 ------------------------------------------------------------------------ EXPENSES: Management fees - See applicable note 445,899 1,177,754 2,188,350 3,382,840 1,139,255 Custodian fees and expenses 18,295 59,180 39,017 38,039 30,306 Legal and auditing fees 13,168 16,801 13,317 14,799 13,953 Insurance expenses 3,668 5,140 6,266 8,469 4,605 Trustees' fees and expenses 2,377 3,406 4,796 4,586 2,165 Registration and filing fees 3,693 18,035 68,766 71,749 45,206 Other 2,326 602 1,179 507 618 ------------------------------------------------------------------------ Total expenses 489,426 1,280,918 2,321,691 3,520,989 1,236,108 ------------------------------------------------------------------------ Less reimbursement of expenses by OppenheimerFunds, Inc. - See applicable note -- -- -- -- (27,276) ------------------------------------------------------------------------ Net expenses 489,426 1,280,918 2,321,691 3,520,989 1,208,832 ------------------------------------------------------------------------ NET INVESTMENT INCOME 4,976,254 14,430,943 19,901,086 1,496,337 1,650,969 ------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) from: Investments: Unaffiliated companies 2,966 2,988,616 1,627,695 29,669,378 17,101,200 Affiliated companies -- -- -- -- -- Closing of futures contracts -- (110,588) (317,839) (99,708) -- Closing and expiration of options written -- 256,826 111,765 -- -- Foreign currency transactions -- 198,737 848,023 -- -- Net change in unrealized appreciation or depreciation on: Investments -- 4,835,153 (5,057,017) 42,247,113 52,525,464 Translation of assets and liabilities denominated in foreign currencies -- 5,267 314,977 -- -- ------------------------------------------------------------------------ Net realized and unrealized gain (loss) 2,966 8,174,011 (2,472,396) 71,816,783 69,626,664 ------------------------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,979,220 $22,604,954 $17,428,690 $73,313,120 $71,277,633 ------------------------------------------------------------------------ ------------------------------------------------------------------------ *Interest -- $ 10,053 $ 27,906 -- -- **Dividends -- -- -- -- --
See accompanying Notes to Financial Statements. 84 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF OPERATIONS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 1996 OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER MULTIPLE GLOBAL STRATEGIC GROWTH & STRATEGIES SECURITIES BOND INCOME FUND FUND FUND FUND ------------------------------------------------------ INVESTMENT INCOME: Interest (net of withholding taxes of *) $20,239,476 $ 2,558,378 $ 7,601,520 $ 279,949 Dividends (net of withholding taxes of **) 3,975,470 6,284,482 102,704 239,716 ------------------------------------------------------ Total income 24,214,946 8,842,860 7,704,224 519,665 ------------------------------------------------------ EXPENSES: Management fees - See applicable note 3,132,569 3,395,740 618,338 160,819 Custodian fees and expenses 80,873 292,641 47,774 28,358 Legal and auditing fees 22,096 20,195 11,149 8,682 Insurance expenses 8,720 8,139 3,117 1,853 Trustees' fees and expenses 9,483 4,647 937 2,157 Registration and filing fees 28,677 44,572 17,357 11,310 Other 5,519 1,196 776 2,930 ------------------------------------------------------ Total expenses 3,287,937 3,767,130 699,448 216,109 ------------------------------------------------------ Less reimbursement of expenses by OppenheimerFunds, Inc. - See applicable note -- -- -- -- ------------------------------------------------------ Net expenses 3,287,937 3,767,130 699,448 216,109 ------------------------------------------------------ NET INVESTMENT INCOME 20,927,009 5,075,730 7,004,776 303,556 ------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) from: Investments: Unaffiliated companies 17,262,810 13,879,186 1,992,319 2,651,709 Affiliated companies -- 20,580 -- -- Closing of futures contracts -- -- (200,568) -- Closing and expiration of options written 1,047,239 -- 6,447 4,530 Foreign currency transactions 284,643 (2,124,032) 37,472 1,517 Net change in unrealized appreciation or depreciation on: Investments 23,243,765 61,185,137 938,418 2,697,929 Translation of assets and liabilities denominated in foreign currencies (451,671) (2,041,403) 225,934 -- ------------------------------------------------------ Net realized and unrealized gain (loss) 41,386,786 70,919,468 3,000,022 5,355,685 ------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $62,313,795 $75,995,198 $10,004,798 $5,659,241 ------------------------------------------------------ ------------------------------------------------------ *Interest $ 18,557 -- $ 20,561 -- **Dividends $ 86,118 $ 397,043 -- $ 1,148
See accompanying Notes to Financial Statements. 85 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 OPPENHEIMER OPPENHEIMER MONEY HIGH INCOME FUND FUND ----------------------------------------------------------- 1996 1995 1996 1995 ----------------------------------------------------------- OPERATIONS: Net investment income $ 4,976,254 $ 4,149,627 $ 14,430,943 $ 11,343,977 Net realized gain (loss) 2,966 5,356 3,333,591 622,733 Net change in unrealized appreciation or depreciation -- -- 4,840,420 9,413,001 ----------------------------------------------------------- Net increase in net assets resulting from operations 4,979,220 4,154,983 22,604,954 21,379,711 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (4,976,254) (4,149,626) (15,283,448) (12,039,383) Distributions from net realized gain -- -- -- -- Distributions in excess of net realized gain -- -- -- -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - See applicable note 64,329,094 (24,289,814) 50,521,087 28,412,143 ----------------------------------------------------------- NET ASSETS: Total increase (decrease) 64,332,060 (24,284,457) 57,842,593 37,752,471 Beginning of period 65,386,460 89,670,917 133,450,780 95,698,309 ----------------------------------------------------------- End of period $129,718,520 $ 65,386,460 $191,293,373 $133,450,780 ----------------------------------------------------------- ----------------------------------------------------------- Undistributed (overdistributed) net investment income $ 0 $ 0 $ 913,946 $ 1,473,129
OPPENHEIMER BOND FUND ---------------------------- 1996 1995 ---------------------------- OPERATIONS: Net investment income $ 19,901,086 $ 11,813,502 Net realized gain (loss) 2,269,644 1,310,131 Net change in unrealized appreciation or depreciation (4,742,040) 13,318,419 ---------------------------- Net increase in net assets resulting from operations 17,428,690 26,442,052 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (20,181,337) (11,209,883) Distributions from net realized gain (133,010) -- Distributions in excess of net realized gain -- -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - See applicable note 218,092,832 60,932,217 ---------------------------- NET ASSETS: Total increase (decrease) 215,207,175 76,164,386 Beginning of period 211,231,770 135,067,384 ---------------------------- End of period $426,438,945 $211,231,770 ---------------------------- ---------------------------- Undistributed (overdistributed) net investment income $ 1,873,402 $ 1,342,481
See accompanying Notes to Financial Statements. 86 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 OPPENHEIMER CAPITAL OPPENHEIMER APPRECIATION GROWTH FUND FUND ----------------------------------------------------------- 1996 1995 1996 1995 ----------------------------------------------------------- OPERATIONS: Net investment income $ 1,496,337 $ 1,123,451 $ 1,650,969 $ 1,297,719 Net realized gain (loss) 29,569,670 22,379,477 17,101,200 8,674,291 Net change in unrealized appreciation or depreciation 42,247,113 47,042,428 14,349,688 16,396,856 ----------------------------------------------------------- Net increase in net assets resulting from operations 73,313,120 70,545,356 33,101,857 26,368,866 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (1,132,964) (719,183) (1,310,185) (821,641) Distributions from net realized gain (21,289,429) (363,458) (8,706,724) (973,385) Distributions in excess of net realized gain -- -- -- -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - See applicable note 241,097,454 70,167,835 145,125,312 29,852,876 ----------------------------------------------------------- NET ASSETS: Total increase (decrease) 291,988,181 139,630,550 168,210,260 54,426,716 Beginning of period 325,404,091 185,773,541 117,709,890 63,283,174 ----------------------------------------------------------- End of period $617,392,272 $325,404,091 $285,920,150 $117,709,890 ----------------------------------------------------------- ----------------------------------------------------------- Undistributed (overdistributed) net investment income $ 1,479,312 $ 1,115,939 $ 1,631,413 $ 1,290,629
OPPENHEIMER MULTIPLE STRATEGIES FUND --------------------------- 1996 1995 --------------------------- OPERATIONS: Net investment income $ 20,927,009 $ 16,593,514 Net realized gain (loss) 18,594,692 8,275,324 Net change in unrealized appreciation or depreciation 22,792,094 39,976,755 --------------------------- Net increase in net assets resulting from operations 62,313,795 64,845,593 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (21,290,805) (16,066,432) Distributions from net realized gain (9,273,309) (8,717,288) Distributions in excess of net realized gain -- -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - See applicable note 71,272,635 49,134,087 --------------------------- NET ASSETS: Total increase (decrease) 103,022,316 89,195,960 Beginning of period 381,263,164 292,067,204 --------------------------- End of period $484,285,480 $381,263,164 --------------------------- --------------------------- Undistributed (overdistributed) net investment income $ 961,193 $ 1,361,279
See accompanying Notes to Financial Statements. 87 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995 OPPENHEIMER OPPENHEIMER GLOBAL STRATEGIC SECURITIES BOND FUND FUND ----------------------------------------------------------- 1996 1995 1996 1995 ----------------------------------------------------------- OPERATIONS: Net investment income $ 5,075,730 $ 2,845,513 $ 7,004,776 $ 3,514,505 Net realized gain (loss) 11,775,734 (25,767,883) 1,835,670 (869,176) Net change in unrealized appreciation or depreciation 59,143,734 31,653,008 1,164,352 2,877,343 ----------------------------------------------------------- Net increase in net assets resulting from operations 75,995,198 8,730,638 10,004,798 5,522,672 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income -- -- (6,891,899) (3,151,540) Distributions from net realized gain -- (8,174,158) -- -- Distributions in excess of net realized gain -- -- -- -- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - See applicable note 145,106,158 62,580,432 55,505,898 37,406,166 ----------------------------------------------------------- NET ASSETS: Total increase (decrease) 221,101,356 63,136,912 58,618,797 39,777,298 Beginning of period 360,978,833 297,841,921 60,097,613 20,320,315 ----------------------------------------------------------- End of period $582,080,189 $360,978,833 $118,716,410 $60,097,613 ----------------------------------------------------------- ----------------------------------------------------------- Undistributed (overdistributed) net investment income $ 7,724,243 $ (1,068) $ 751,089 $ 483,938
OPPENHEIMER GROWTH & INCOME FUND --------------------------- 1996 1995(1) --------------------------- OPERATIONS: Net investment income $ 303,556 $ 4,573 Net realized gain (loss) 2,657,756 27,238 Net change in unrealized appreciation or depreciation 2,697,929 505,175 -------------------------- Net increase in net assets resulting from operations 5,659,241 536,986 DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (291,690) (4,891) Distributions from net realized gain (31,219) -- Distributions in excess of net realized gain -- 37 BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - See applicable note 37,384,461 3,756,393 -------------------------- NET ASSETS: Total increase (decrease) 42,720,793 4,288,451 Beginning of period 4,288,451 -- -------------------------- End of period $47,009,244 $4,288,451 -------------------------- -------------------------- Undistributed (overdistributed) net investment income $ 12,643 $ (318)
1. For the period from July 5, 1995 (commencement of operations) to December 31, 1995. See accompanying Notes to Financial Statements. 88 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND FINANCIAL HIGHLIGHTS DECEMBER 31, 1996 YEAR ENDED DECEMBER 31, 1996 1995 1994 1993 1992 - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA: Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 - ------------------------------------------------------------------------------------------------ Income from investment operations - net investment income and net realized gain .05 .06 .04 .03 .04 Dividends and distributions to shareholders (.05) (.06) (.04) (.03) (.04) - ------------------------------------------------------------------------------------------------ Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 ------------------------------------------------------ ------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE(1) 5.13% 5.62% 4.25% 3.09% 3.93% - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $129,719 $65,386 $89,671 $61,221 $58,266 - ------------------------------------------------------------------------------------------------ Average net assets (in thousands) $99,263 $75,136 $90,264 $57,654 $61,317 - ------------------------------------------------------------------------------------------------ Ratios to average net assets: Net investment income 5.01% 5.52% 4.18% 3.12% 3.76% Expenses 0.49% 0.51% 0.43% 0.43% 0.50%
1. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends 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 of less than one full year. Total returns reflect changes in net investment income only. 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. See accompanying Notes to Financial Statements. 89 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND FINANCIAL HIGHLIGHTS (CONTINUED) YEAR ENDED DECEMBER 31, 1996 1995 1994 1993 1992 - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 10.63 $ 9.79 $ 11.02 $ 9.74 $ 9.40 - ---------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .97 .98 .94 .82 1.19 Net realized and unrealized gain (loss) .58 .94 (1.27) 1.65 .43 - ---------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations 1.55 1.92 (.33) 2.47 1.62 - ---------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (1.05) (1.08) (.66) (1.19) (1.28) Distributions from net realized gain -- -- (.24) -- -- - ---------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (1.05) (1.08) (.90) (1.19) (1.28) - ---------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.13 $ 10.63 $ 9.79 $ 11.02 $ 9.74 ---------------------------------------------------------- ---------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 15.26% 20.37% (3.18)% 26.34% 17.92% - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $191,293 $133,451 $ 95,698 $93,011 $40,817 - ---------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $157,203 $115,600 $101,096 $67,000 $36,861 - ---------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 9.18% 9.81% 9.15% 10.50% 12.08% Expenses 0.81% 0.81% 0.67% 0.68% 0.73% - ---------------------------------------------------------------------------------------------------------- Portfolio turnover rate(2) 125.0% 107.1% 110.1% 135.7% 144.2%
1. Assumes a hypothetical initial 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 of 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. 2. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1996 were $216,284,607 and $177,884,266, respectively. See accompanying Notes to Financial Statements. 90 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND FINANCIAL HIGHLIGHTS (CONTINUED) YEAR ENDED DECEMBER 31, 1996 1995 1994 1993 1992 - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.84 $ 10.78 $ 11.65 $ 10.99 $ 11.15 - ---------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .69 .72 .76 .65 .87 Net realized and unrealized gain (loss) (.15) 1.07 (.98) .76 (.17) - ---------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations .54 1.79 (.22) 1.41 .70 - ---------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.74) (.73) (.62) (.75) (.86) Distributions from net realized gain (.01) -- (.03) -- -- - ---------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (.75) (.73) (.65) (.75) (.86) - ---------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.63 $ 11.84 $ 10.78 $ 11.65 $ 10.99 ---------------------------------------------------------- ---------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 4.80% 17.00% (1.94)% 13.04% 6.50% - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $426,439 $211,232 $135,067 $111,846 $63,354 - ---------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $296,253 $170,929 $121,884 $ 87,215 $45,687 - ---------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 6.72% 6.91% 7.30% 7.20% 7.81% Expenses 0.78% 0.80% 0.57% 0.46% 0.56% - ---------------------------------------------------------------------------------------------------------- Portfolio turnover rate(2) 82.3% 79.4% 35.1% 36.3% 41.3%
1. Assumes a hypothetical initial 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 of 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. 2. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1996 were $449,994,454 and $218,747,414, respectively. See accompanying Notes to Financial Statements. 91 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS (CONTINUED) YEAR ENDED DECEMBER 31, 1996 1995 1994 1993 1992 - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $34.21 $25.95 $31.64 $26.04 $23.24 - ------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .09 .11 .10 .05 .06 Net realized and unrealized gain (loss) 6.59 8.29 (2.22) 6.71 3.43 - ------------------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations: 6.68 8.40 (2.12) 6.76 3.49 - ------------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.11) (.09) (.04) (.06) (.14) Distributions from net realized gain (2.07) (.05) (3.53) (1.10) (.55) - ------------------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (2.18) (.14) (3.57) (1.16) (.69) - ------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $38.71 $34.21 $25.95 $31.64 $26.04 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 20.22% 32.52% (7.59)% 27.32% 15.42% - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $617,392 $325,404 $185,774 $136,885 $83,335 - ------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $467,080 $240,730 $153,832 $98,228 $56,371 - ------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 0.32% 0.47% 0.50% 0.23% 0.30% Expenses 0.75% 0.78% 0.57% 0.47% 0.54% - ------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(2) 100.1% 125.5% 96.5% 122.8% 78.9% Average brokerage commission rate(3) $0.0583 $0.0577 -- -- --
1. Assumes a hypothetical initial 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 of 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. 2. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1996 were $507,743,146 and $384,247,154, respectively. 3. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the total of related shares purchased and sold. See accompanying Notes to Financial Statements. 92 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND FINANCIAL HIGHLIGHTS (CONTINUED) YEAR ENDED DECEMBER 31, 1996 1995 1994 1993 1992 - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA: Net asset value, beginning of period $23.55 $17.68 $17.70 $16.96 $15.17 - ------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .15 .25 .22 .46 .16 Net realized and unrealized gain (loss) 5.46 6.10 (.05) .74 1.99 - ------------------------------------------------------------------------------------------------ Total income from investment operations 5.61 6.35 .17 1.20 2.15 - ------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.25) (.22) (.15) (.14) (.36) Distributions from net realized gain (1.67) (.26) (.04) (.32) -- - ------------------------------------------------------------------------------------------------ Total dividends and distributions to shareholders (1.92) (.48) (.19) (.46) (.36) - ------------------------------------------------------------------------------------------------ Net asset value, end of period $27.24 $23.55 $17.68 $17.70 $16.96 ----------------------------------------------------- ----------------------------------------------------- - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE(1) 25.20% 36.65% 0.97% 7.25% 14.53% - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $285,920 $117,710 $63,283 $56,701 $36,494 - ------------------------------------------------------------------------------------------------ Average net assets (in thousands) $152,466 $88,803 $59,953 $46,389 $25,750 - ------------------------------------------------------------------------------------------------ Ratios to average net assets: Net investment income 1.08% 1.46% 1.38% 1.13% 1.36% Expenses, before voluntary reimbursement by the Manager 0.81% 0.79% 0.58% 0.50% 0.61% Expenses, net of voluntary reimbursement by the Manager 0.79% N/A N/A N/A N/A - ------------------------------------------------------------------------------------------------ Portfolio turnover rate(2) 65.4% 58.2% 53.8% 12.6% 48.7% Average brokerage commission rate(3) $0.0589 $0.0590 -- -- --
1. Assumes a hypothetical initial 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 of 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. 2. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1996 were $117,544,250 and $78,446,013, respectively. 3. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the total number of related shares purchased and sold. See accompanying Notes to Financial Statements. 93 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND FINANCIAL HIGHLIGHTS (CONTINUED) YEAR ENDED DECEMBER 31, 1996 1995 1994 1993 1992 - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 14.55 $ 12.91 $ 13.88 $ 12.47 $ 11.96 - ---------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .72 .66 .63 .55 .55 Net realized and unrealized gain (loss) 1.45 2.00 (.90) 1.41 .50 - ---------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations 2.17 2.66 (.27) 1.96 1.05 - ---------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.74) (.65) (.60) (.55) (.54) Distributions from net realized gain (.35) (.37) (.10) -- -- - ---------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (1.09) (1.02) (.70) (.55) (.54) - ---------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 15.63 $ 14.55 $ 12.91 $ 13.88 $ 12.47 ---------------------------------------------------------- ---------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 15.50% 21.36% (1.95)% 15.95% 8.99% - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $484,285 $381,263 $292,067 $250,290 $159,464 - ---------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $428,277 $344,745 $279,949 $199,954 $139,011 - ---------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 4.89% 4.81% 4.90% 4.44% 4.63% Expenses 0.77% 0.77% 0.56% 0.48% 0.55% - ---------------------------------------------------------------------------------------------------------- Portfolio turnover rate(2) 40.3% 39.0% 31.4% 32.4% 57.8% Average brokerage commission rate(3) $ 0.0361 $ 0.0329 -- -- --
1. Assumes a hypothetical initial 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 of 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. 2. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1996 were $211,489,140 and $146,222,245 respectively. 3. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the total number of related shares purchased and sold. See accompanying Notes to Financial Statements. 94 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND FINANCIAL HIGHLIGHTS (CONTINUED) YEAR ENDED DECEMBER 31, 1996 1995 1994 1993 1992 - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 15.00 $ 15.09 $ 16.30 $ 9.57 $ 10.38 - ---------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) .15 .12 .04 (.02) .07 Net realized and unrealized gain (loss) 2.52 .19 (.96) 6.75 (.80) - ---------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations 2.67 .31 (.92) 6.73 (.73) - ---------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income -- -- (.04) -- (.04) Distributions from net realized gain -- (.40) (.25) -- (.04) - ---------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders -- (.40) (.29) -- (.08) - ---------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 17.67 $ 15.00 $ 15.09 $ 16.30 $ 9.57 ---------------------------------------------------------- ---------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 17.80% 2.24% (5.72)% 70.32% (7.11)% - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $580,998 $360,979 $297,842 $96,425 $13,537 - ---------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $466,750 $332,336 $214,545 $31,696 $11,181 - ---------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 1.09% 0.86% 0.54% 0.72% 1.04% Expenses 0.81% 0.89% 0.91% 0.92% 1.06% - ---------------------------------------------------------------------------------------------------------- Portfolio turnover rate(2) 89.9% 131.3% 70.4% 65.1% 34.1% Average brokerage commission rate(3) $ 0.0045 $ 0.0092 -- -- --
1. Assumes a hypothetical initial 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 of 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. 2. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1996 were $508,437,343 and $396,821,829, respectively. 3. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the total number of related shares purchased and sold. See accompanying Notes to Financial Statements. 95 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND FINANCIAL HIGHLIGHTS (CONTINUED) YEAR ENDED DECEMBER 31, 1996 1995 1994 1993(1) - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 4.91 $ 4.60 $ 5.12 $ 5.00 - --------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .38 .38 .35 .10 Net realized and unrealized gain (loss) .19 .30 (.54) .11 - --------------------------------------------------------------------------------------------- Total income (loss) from investment operations .57 .68 (.19) .21 - --------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.39) (.37) (.32) (.09) Distributions in excess of net realized gain -- -- (.01) -- - --------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (.39) (.37) (.33) (.09) - --------------------------------------------------------------------------------------------- Net asset value, end of period $ 5.09 $ 4.91 $ 4.60 $ 5.12 --------------------------------------------- --------------------------------------------- - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(2) 12.07% 15.33% (3.78)% 4.25% - --------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $118,716 $60,098 $20,320 $9,887 - --------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 82,604 $37,698 $15,389 $4,259 - --------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 8.48% 9.32% 8.36% 5.67%(3) Expenses 0.85% 0.85% 0.87% 0.96%(3) - --------------------------------------------------------------------------------------------- Portfolio turnover rate(4) 144.3% 87.0% 136.6% 10.9%
1. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. 2. Assumes a hypothetical initial 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 of 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1996 were $173,855,919 and $107,646,460, respectively. See accompanying Notes to Financial Statements. 96 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND FINANCIAL HIGHLIGHTS (CONTINUED) YEAR ENDED DECEMBER 31, 1996 1995(1) - ----------------------------------------------------------------------- - ----------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 12.51 $ 10.00 - ----------------------------------------------------------------------- Income from investment operations: Net investment income .14 .01 Net realized and unrealized gain 3.91 2.52 - ----------------------------------------------------------------------- Total income from investment operations 4.05 2.53 - ----------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.14) (.02) Distributions from net realized gain (.05) -- - ----------------------------------------------------------------------- Total dividends and distributions to shareholders (.19) (.02) - ----------------------------------------------------------------------- Net asset value, end of period $ 16.37 $ 12.51 --------------------- --------------------- - ----------------------------------------------------------------------- - ----------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(2) 32.51% 25.25% - ----------------------------------------------------------------------- - ----------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $47,009 $ 4,288 - ----------------------------------------------------------------------- Average net assets (in thousands) $21,562 $ 1,809 - ----------------------------------------------------------------------- Ratios to average net assets: Net investment income 1.41% 0.50%(3) Expenses 1.00% 2.07%(3) - ----------------------------------------------------------------------- Portfolio turnover rate(4) 112.6% 23.7% Average brokerage commission rate(5) $0.0618 $0.0598 1. For the period from July 5, 1995 (commencement of operations) to December 31, 1995. 2. Assumes a hypothetical initial 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 of 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. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1996 were $58,041,356 and $22,631,948, respectively. 5. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the total number of related shares purchased and sold. See accompanying Notes to Financial Statements. 97 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Money Fund (OMF), Oppenheimer High Income Fund (OHIF), Oppenheimer Bond Fund (OBF), Oppenheimer Capital Appreciation Fund (OCAP), Oppenheimer Growth Fund (OGF), Oppenheimer Multiple Strategies Fund (OMSF), Oppenheimer Global Securities Fund (OGSF), Oppenheimer Strategic Bond Fund (OSBF) and Oppenheimer Growth & Income Fund (OGIF) (collectively, the Funds) are separate series of Oppenheimer Variable Account Funds (the Trust), a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended. The Trust's investment adviser is OppenheimerFunds, Inc. (the Manager). Shares of the Oppenheimer Variable Account Funds are sold only to separate accounts of insurance companies, principally MassMutual Life Insurance Company, an affiliate of the Manager, Aetna Life Insurance & Annuity Company, Merrill Lynch Insurance Group, Bankers Security Life Insurance Society, Life Insurance Company of Virginia, Nationwide Life Insurance Company, and Jefferson Pilot. The following is a summary of significant accounting policies consistently followed by the Funds. The Funds' objectives are as follows: OPPENHEIMER MONEY FUND seeks the maximum current income from investments in "money market" securities consistent with low capital risk and the maintenance of liquidity. OPPENHEIMER HIGH INCOME FUND seeks a high level of current income from investments in high yield fixed income securities. OPPENHEIMER BOND FUND primarily seeks a high level of current income from investments in high yield fixed income securities. OPPENHEIMER CAPITAL APPRECIATION FUND seeks to achieve capital appreciation by investing in "growth-type" companies. OPPENHEIMER GROWTH FUND seeks to achieve capital appreciation by investing in securities of well-known established companies. OPPENHEIMER MULTIPLE STRATEGIES FUND seeks a total investment return (which includes current income and capital appreciation in the value of its shares) from investments in common stocks and other equity securities, bonds and other debt securities, and "money market" securities. OPPENHEIMER GLOBAL SECURITIES FUND seeks long-term capital appreciation by investing a substantial portion of assets in securities of foreign issuers, "growth-type" companies, cyclical industries and special institutions which are considered to have appreciation possibilities. OPPENHEIMER STRATEGIC BOND FUND seeks a high level of current income principally derived from interest on debt securities. OPPENHEIMER GROWTH & INCOME FUND seeks a high total return (which includes growth in the value of its shares as well as current income) from equity and debt securities. From time to time this Fund may focus on small to medium capitalization common stocks, bonds and convertible securities. INVESTMENT VALUATION. Portfolio securities of OMF are valued on the basis of amortized cost, which approximates market value. Portfolio securities of OHIF, OBF, OCAP, OGF, OMSF, OGSF, OSBF and OGIF are valued at the close of the New York Stock Exchange on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or the last sale price on the prior trading day. Long-term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of Trustees. Such securities which cannot be valued by the approved portfolio pricing service are valued using dealer-supplied valuations provided the Manager is satisfied that the firm rendering the quotes is reliable and that the quotes reflect current market value, or are valued under consistently applied procedures established by the Board of Trustees to determine fair value in good faith. Short-term "money market type" debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. Forward foreign currency exchange contracts are valued based on the closing prices of the forward currency contract rates in the London foreign exchange markets on a daily basis as provided by a reliable bank or dealer. Options are valued based upon the last sale price on the principal exchange on which the option is traded or, in the absence of any transactions that day, the value is based upon the last sale on the prior trading date if it is within the spread between the closing bid and asked prices. If the last sale price is outside the spread, the closing bid is used. 98 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 1. SIGNIFICANT ACCOUNTING POLICIES (continued) SECURITIES PURCHASED ON A WHEN-ISSUED BASIS. Delivery and payment for securities that have been purchased by OHIF, OBF, OMSF, OSBF and OGIF on a forward commitment or when-issued basis can take place a month or more after the transaction date. During the period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Funds maintain, in segregated accounts with the custodian, assets with a market value equal to the amount of their purchase commitments. The purchase of securities on a when-issued or forward commitment basis may increase the volatility of the Funds' net asset values to the extent the Funds make such purchases while remaining substantially fully invested. In connection with their ability to purchase securities on a when-issued or forward commitment basis, OHIF, OBF and OSBF may enter into mortgage "dollar-rolls" in which the Funds sell securities for delivery in the current month and simultaneously contract with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The Funds record each dollar-roll as a sale and a new purchase transaction. As of December 31, 1996, OBF had entered into outstanding when-issued or forward commitments for mortgage "dollar-rolls" of $23,817,266. SECURITY CREDIT RISK. OHIF, OMSF and OSBF invest in high yield securities, which may be subject to a greater degree of credit risk, greater market fluctuations and risk of loss of income and principal, and may be more sensitive to economic conditions than lower yielding, higher rated fixed income securities. The Funds may acquire securities in default, and are not obligated to dispose of securities whose issuers subsequently default. FOREIGN CURRENCY TRANSLATION. The accounting records of the Funds are maintained in U.S. dollars. Prices of securities purchased by OHIF, OBF, OMSF, OGSF, OSBF and OGIF that are denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. For OHIF, OBF, OMSF, OGSF, OSBF and OGIF, 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 Funds' Statements of Operations. REPURCHASE AGREEMENTS. The Funds require the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Funds may be delayed or limited. FEDERAL TAXES. The Trust intends for each Fund to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income or excise tax provision is required. At December 31, 1996, OBF and OGSF had available for federal income tax purposes an unused capital loss carryover of approximately $727,000 and $16,867,000, which expires in 2003. DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders of OHIF, OBF, OCAP, OGF, OMSF, OGSF, OSBF and OGIF are recorded on the ex-dividend date. OMF intends to declare dividends from net investment income each day the New York Stock Exchange is open for business and pay such dividends monthly. To effect its policy of maintaining a net asset value of $1.00 per share, OMF may withhold dividends or make distributions of net realized gains. 99 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 1. SIGNIFICANT ACCOUNTING POLICIES (continued) CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of premium amortization, paydown gains and losses and the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of the distributions made during the 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 dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gain (loss) was recorded by the Funds. During the year ended December 31, 1996, the Funds adjusted the classification of distributions to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations. Changes in classification made during the fiscal year ended December 31, 1996 are shown below:
Adjustments for the Fiscal Year Ended December 31, 1996 ----------------------------------------------------------------------- Undistributed Net Investment Income Undistributed Net Realized Paid-in (Loss) Gain (Loss) on Investments Capital - ------------------------------------------------------------------------------------------------------------------- Oppenheimer High Income Fund $ 293,322 $ (293,322) -- - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Bond Fund 811,172 (811,172) -- - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Multiple Strategies Fund (36,290) 36,290 -- - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Global Securities Fund 2,649,581 (2,649,581) -- - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Strategic Bond Fund 154,274 (154,274) -- - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Growth & Income Fund 1,095 (1,095) -- - -------------------------------------------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Discount on securities purchased by OHIF, OBF, OMSF, OGSF, OSBF and OGIF is amortized over the life of the respective securities, in accordance with federal income tax requirements. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. Dividends-in-kind are recognized as income on the ex-dividend date, at the current market value of the underlying security. Interest on payment-in-kind debt instruments is accrued as income at the coupon rate, and a market adjustment is made on the ex-date. The preparation of financial statements in conformity with 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. 100 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 2. SHARES OF BENEFICIAL INTEREST The Funds have authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows: OPPENHEIMER MONEY FUND
Year Ended December 31, 1996 Year Ended December 31, 1995 ----------------------------- ----------------------------- Shares Amount Shares Amount ---------- ------------- ----------- ------------- Sold 304,073,729 $ 304,073,729 202,748,102 $ 202,748,102 Dividends and distributions reinvested 4,923,661 4,923,661 4,222,747 4,222,747 Issued in connection with the acquisition of: Panorama Series Fund, Inc., Money Market Portfolio - Note 9 63,968,818 63,968,791 -- -- Redeemed (308,637,087) (308,637,087) (231,260,663) (231,260,663) ------------ ------------ ------------ ------------- Net increase (decrease) 64,329,121 $ 64,329,094 (24,289,814) $ (24,289,814) ------------ ------------ ------------ ------------- ------------ ------------ ------------ ------------- OPPENHEIMER HIGH INCOME FUND Year Ended December 31, 1996 Year Ended December 31, 1995 ----------------------------- ----------------------------- Shares Amount Shares Amount ---------- ------------- ----------- ------------- Sold 9,857,582 $107,788,590 5,873,231 $ 60,932,670 Dividends and distributions reinvested 1,412,713 15,283,448 1,162,957 12,040,152 Redeemed (6,635,862) (72,550,951) (4,263,757) (44,560,679) ------------ ------------ ------------ ------------- Net increase 4,634,433 $ 50,521,087 2,772,431 $ 28,412,143 ------------ ------------ ------------ ------------- ------------ ------------ ------------ ------------- OPPENHEIMER BOND FUND Year Ended December 31, 1996 Year Ended December 31, 1995 ----------------------------- ----------------------------- Shares Amount Shares Amount ---------- ------------- ----------- ------------- Sold 10,037,878 $116,328,846 7,311,733 $ 83,544,442 Dividends and distributions reinvested 1,774,316 20,314,347 976,291 11,209,883 Issued in connection with the acquisition of: Panorama Series Fund, Inc., Income Portfolio - Note 9 9,249,653 107,187,159 -- -- Panorama Series Fund, Inc., Government Securities Portfolio - Note 9 4,237 48,557 -- -- JP Investment Grade Bond Fund, Inc. - Note 9 2,594,896 30,151,368 -- -- Redeemed (4,827,959) (55,937,445) (2,972,687) (33,822,108) ------------ ------------ ------------ ------------- Net increase 18,833,021 $218,092,832 5,315,337 $ 60,932,217 ------------ ------------ ------------ ------------- ------------ ------------ ------------ ------------- 101 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 2. SHARES OF BENEFICIAL INTEREST (continued) OPPENHEIMER CAPITAL APPRECIATION FUND Year Ended December 31, 1996 Year Ended December 31, 1995 ----------------------------- ----------------------------- Shares Amount Shares Amount ---------- ------------- ----------- ------------- Sold 12,247,492 $455,862,164 8,882,212 $ 260,650,476 Dividends and distributions reinvested 643,582 22,422,394 40,594 1,082,642 Redeemed (6,453,749) (237,187,104) (6,567,729) (191,565,283) ------------ ------------ ------------ ------------- Net increase 6,437,325 $ 241,097,454 2,355,077 $ 70,167,835 ------------ ------------ ------------ ------------- ------------ ------------ ------------ ------------- OPPENHEIMER GROWTH FUND Year Ended December 31, 1996 Year Ended December 31, 1995 ----------------------------- ----------------------------- Shares Amount Shares Amount ---------- ------------- ----------- ------------- Sold 5,738,355 $144,756,556 4,302,304 $ 89,007,340 Dividends and distributions reinvested 430,280 10,016,909 95,991 1,795,026 Issued in connection with the acquisition of JP Capital Appreciation Fund, Inc. - Note 5 3,293,050 90,009,399 -- -- Redeemed (3,964,366) (99,657,552) (2,980,080) (60,949,490) ------------ ------------ ------------ ------------- Net increase 5,497,319 $145,125,312 1,418,215 $ 29,852,876 ------------ ------------ ------------ ------------- ------------ ------------ ------------ ------------- OPPENHEIMER MULTIPLE STRATEGIES FUND Year Ended December 31, 1996 Year Ended December 31, 1995 ----------------------------- ----------------------------- Shares Amount Shares Amount ---------- ------------- ----------- ------------- Sold 5,556,735 $ 83,206,142 6,445,242 $ 88,771,497 ------------ ------------ ------------ ------------- Dividends and distributions reinvested 2,062,453 30,564,114 1,818,313 24,783,721 Redeemed (2,838,629) (42,497,621) (4,671,097) (64,421,131) ------------ ------------ ------------ ------------- Net increase 4,780,559 $ 71,272,635 3,592,458 $ 49,134,087 ------------ ------------ ------------ ------------- ------------ ------------ ------------ ------------- 102 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 2. SHARES OF BENEFICIAL INTEREST (continued) OPPENHEIMER GLOBAL SECURITIES FUND Year Ended December 31, 1996 Year Ended December 31, 1995 ----------------------------- ----------------------------- Shares Amount Shares Amount ---------- ------------- ----------- ------------- Sold 14,595,634 $237,535,239 11,235,722 $ 166,766,446 Dividends and distributions reinvested -- -- 585,961 8,174,158 Redeemed (5,717,318) (92,429,081) (7,497,205) (112,360,172) ------------ ------------ ------------ ------------- Net increase 8,878,316 $145,106,158 4,324,478 $ 62,580,432 ------------ ------------ ------------ ------------- ------------ ------------ ------------ ------------- OPPENHEIMER STRATEGIC BOND FUND Year Ended December 31, 1996 Year Ended December 31, 1995 ----------------------------- ----------------------------- Shares Amount Shares Amount ---------- ------------- ----------- ------------- Sold 12,624,581 $ 63,274,177 9,417,090 $ 44,897,472 Dividends and distributions reinvested 1,387,256 6,891,899 661,301 3,151,540 Redeemed (2,946,444) (14,660,178) (2,245,623) (10,642,846) ------------ ------------ ------------ ------------- Net increase 11,065,393 $ 55,505,898 7,832,768 $ 37,406,166 ------------ ------------ ------------ ------------- ------------ ------------ ------------ ------------- OPPENHEIMER GROWTH & INCOME FUND Year Ended December 31, 1996 Year Ended December 31, 1995(1) ----------------------------- ------------------------------- Shares Amount Shares Amount ---------- ------------- ------------ -------------- Sold 2,942,183 $43,552,642 358,253 $3,933,459 Dividends and distributions reinvested 21,023 322,909 404 4,928 Redeemed (435,180) (6,491,090) (15,863) (181,994) ------------ ------------ ------------ ------------- Net increase 2,528,026 $37,384,461 342,794 $3,756,393 ------------ ------------ ------------ ------------- ------------ ------------ ------------ -------------
1. For the period from July 5, 1995 (commencement of operations) to December 31, 1995. 103 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS At December 31, 1996, net unrealized appreciation or depreciation on investments and options written consisted of the following: OPPENHEIMER OPPENHEIMER OPPENHEIMER CAPITAL OPPENHEIMER HIGH INCOME BOND APPRECIATION GROWTH FUND FUND FUND FUND ------------------------------------------------------- Gross appreciation $11,696,415 $ 7,567,187 $116,514,163 $60,419,855 Gross depreciation (1,321,412) (2,940,260) (11,808,397) (3,364,356) ------------------------------------------------------- Net unrealized appreciation $10,375,003 $ 4,626,927 $104,705,766 $57,055,499 ------------------------------------------------------- ------------------------------------------------------- OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER MULTIPLE GLOBAL STRATEGIC GROWTH & STATEGIES SECURITIES BOND INCOME FUND FUND FUND FUND ------------------------------------------------------- Gross appreciation $74,183,201 $89,877,396 $3,681,908 $ 4,492,146 Gross depreciation (9,242,682) (9,044,682) (977,100) (1,289,042) ------------------------------------------------------- Net unrealized appreciation $64,940,519 $80,832,714 $2,704,808 $ 3,203,104 ------------------------------------------------------- ------------------------------------------------------- 4. OPTION ACTIVITY The Funds (except OMF) 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 Funds generally purchase put options or write covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Funds receive a premium and become 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 Funds will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. Securities designated to cover outstanding call options are noted in the Statements of Investments where applicable. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a footnote to the Statements of Investments. Options written are reported as a liability in the Statements of Assets and Liabilities. Gains and losses are reported in the Statements of Operations. The risk in writing a call option is that the Funds give 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 Funds 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 Funds pay a premium whether or not the option is exercised. The Funds also have the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. The Funds may also write over-the-counter options where the completion of the obligation is dependent upon the credit standing of the counterparty. 104 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 4. OPTION ACTIVITY (continued) OHIF option activity for the year ended December 31, 1996 was as follows: CALL OPTIONS PUT OPTIONS --------------------- ------------------- Number of Amount of Number of Amount of Options Premiums Options Premiums ---------- -------- -------- --------- Options outstanding at December 31, 1995 100 $ 1,430 -- $ -- Options written 13,189,736 158,172 229,892 288,149 Options closed or expired (8,691,827) (94,602) (229,892) (288,149) Options exercised (2,037,479) (22,715) -- -- ---------- -------- -------- --------- Options outstanding at December 31, 1996 2,460,530 $ 42,285 -- $ -- ---------- -------- -------- --------- ---------- -------- -------- --------- OBF option activity for the year ended December 31, 1996 was as follows: CALL OPTIONS ------------------------- Number of Amount of Options Premiums ----------- --------- Options outstanding at December 31, 1995 -- $ -- Options written 31,041,247 255,822 Options closed or expired (20,301,055) (150,082) Options exercised (4,540,442) (25,556) ----------- --------- Options outstanding at December 31, 1996 6,199,750 $ 80,184 ----------- --------- ----------- --------- OMSF option activity for the year ended December 31, 1996 was as follows: CALL OPTIONS ------------------------- Number of Amount of Options Premiums ----------- --------- Options outstanding at December 31, 1995 3,603 $ 1,100,095 Options written 8,420 2,216,105 Options closed or expired (5,866) (1,583,301) Options exercised (1,588) (497,763) ----------- ----------- Options outstanding at December 31, 1996 4,569 $ 1,235,136 ----------- ----------- ----------- ----------- OSBF option activity for the year ended December 31, 1996 was as follows: CALL OPTIONS PUT OPTIONS --------------------- -------------------- Number of Amount of Number of Amount of Options Premiums Options Premiums ---------- -------- -------- --------- Options outstanding at December 31, 1995 1,000 $ 14,300 -- $ -- ---------- -------- -------- --------- Options written 21,470,679 231,513 158,210 100,144 ---------- -------- -------- --------- Options closed or expired (8,767,062) (112,587) -- -- Options exercised (3,329,326) (21,980) (157,835) (91,152) ---------- -------- -------- --------- Options outstanding at December 31, 1996 9,375,291 $ 111,246 375 $ 8,992 ---------- -------- -------- --------- ---------- -------- -------- --------- 105 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 4. OPTION ACTIVITY (continued) OGIF option activity for the year ended December 31, 1996 was as follows: CALL OPTIONS ------------------------- Number of Amount of Options Premiums ----------- --------- Options outstanding at December 31, 1995 -- $ -- Options written 19 6,301 Options closed or expired (19) (6,301) --- ------- Options outstanding at December 31, 1996 -- $ -- --- ------- --- ------- 5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS A forward foreign currency exchange contract (forward contract) is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Funds (except OMF) use forward contracts to seek to manage foreign currency risks. They may also be used to tactically shift portfolio currency risk. The Funds generally enter into forward contracts as a hedge upon the purchase or sale of a security denominated in a foreign currency. In addition, the Funds may enter into such contracts as a hedge against changes in foreign currency exchange rates on portfolio positions. Forward contracts are valued based on the closing prices of the forward currency contract rates in the London foreign exchange markets on a daily basis as provided by a reliable bank or dealer. The Funds will realize a gain or loss upon the closing or settlement of the forward transaction. Securities held in segregated accounts to cover net exposure on outstanding forward contracts are noted in the Statements of Investments where applicable. Unrealized appreciation or depreciation on forward contracts is reported in the Statements of Assets and Liabilities. Realized gains and losses are reported with all other foreign currency gains and losses in the Funds' Statements of Operations. Risks include the potential inability of the counterparty to meet the terms of the contract and unanticipated movements in the value of a foreign currency relative to the U.S. dollar. At December 31, 1996, outstanding forward contracts to purchase and sell foreign currencies were as follows: OPPENHEIMER HIGH INCOME FUND
CONTRACT AMOUNT VALUATION AS OF UNREALIZED UNREALIZED CONTRACTS TO PURCHASE EXPIRATION DATE (000'S) DECEMBER 31, 1996 APPRECIATION DEPECIATION - --------------------------------------------------------------------------------------------------------------------------------- South African Rand (ZAR) 1/3/97 940 ZAR $ 200,737 $ 547 $ -- Spanish Peseta (ESP) 10/20/97 135,015 ESP 1,038,134 9,835 -- ---------- -------- ---- $1,238,871 10,382 -- ---------- -------- ---- ---------- CONTRACTS TO SELL - ----------------- Swiss Franc (CHF) 1/21/97-10/20/97 4,920 CHF $3,708,898 $203,760 817 ---------- -------- ---- ---------- Total Unrealized Appreciation and Depreciation $214,142 $817 -------- ---- -------- ---- 106 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS (continued) OPPENHEIMER BOND FUND CONTRACT AMOUNT VALUATION AS OF UNREALIZED UNREALIZED CONTRACTS TO PURCHASE EXPIRATION DATE (000'S) DECEMBER 31, 1996 APPRECIATION DEPECIATION - --------------------------------------------------------------------------------------------------------------------------------- South African Rand (ZAR) 1/3/97 2,352 ZAR $ 502,368 $ 1,369 $ Spanish Peseta (ESP) 10/20/97 387,303 ESP 2,977,974 21,075 -- ---------- ------------ ------ $3,480,342 22,444 -- ---------- ------------ ------ ---------- CONTRACTS TO SELL - ----------------- Canadian Dollar (CAD) 3/3/97 1,700 CAD 1,245,403 23,727 -- Swiss Franc (CHF) 1/21/97-10/20/97 10,860 CHF 8,205,646 447,489 840 ---------- ------------ ------ $9,451,049 471,216 840 ---------- ------------ ------ ---------- Total Unrealized Appreciation and Depreciation $ 493,660 $840 ------------ ------ ------------ ------ OPPENHEIMER GLOBAL SECURITIES FUND CONTRACT AMOUNT VALUATION AS OF UNREALIZED UNREALIZED CONTRACTS TO PURCHASE EXPIRATION DATE (000'S) DECEMBER 31, 1996 APPRECIATION DEPECIATION - --------------------------------------------------------------------------------------------------------------------------------- British Pound Sterling (GBP) 1/7/97 126 GBP $ 216,416 $ 2,493 $ -- Deutsche Mark (DEM) 1/2/97-1/3/97 3,477 DEM 2,256,966 19,488 -- ------------ ---------- -------- $ 2,473,382 21,981 -- ------------ ---------- -------- ------------ CONTRACTS TO SELL - ----------------- Brazilian Real (BRR) 1/2/97 303 BRR $ 292,022 -- 339 French Franc (FRF) 3/11/97 130,595 FRF 25,256,084 -- 256,084 Swiss Franc (CHF) 1/8/97 17,203 CHF 12,832,949 990,675 -- Deutsche Mark (DEM) 1/6/97-1/8/97 29,194 DEM 19,081,287 1,372,221 3,543 ------------ ---------- --------- $ 57,462,342 2,362,896 259,966 ------------ ---------- --------- ------------ Total Unrealized Appreciation and Depreciation $2,384,877 $ 259,966 ---------- --------- ---------- --------- OPPENHEIMER STRATEGIC BOND FUND CONTRACT AMOUNT VALUATION AS OF UNREALIZED CONTRACTS TO SELL EXPIRATION DATE (000'S) DECEMBER 31, 1996 APPRECIATION - -------------------------------------------------------------------------------------------------------------- Canadian Dollar (CAD) 2/12/97-3/5/97 4,680 CAD $3,427,518 $ 44,790 Swedish Krona (SEK) 2/3/97 2,500 SEK 368,393 14,045 Swiss Franc (CHF) 1/21/97-3/17/97 3,395 CHF 2,540,623 118,879 ---------- --------- $6,336,534 $177,714 ---------- --------- ---------- ---------
6. FUTURES CONTRACTS The Funds (except OMF) may buy and sell interest rate futures contracts in order to gain exposure to or protect against changes in interest rates. The Funds may also buy or write put or call options on these futures contracts. The Funds generally sell futures contracts to hedge against increases in interest rates and the resulting negative effect on the value of fixed rate portfolio securities. The Funds may also purchase futures contracts to gain exposure to changes in interest rates as it may be more efficient or cost effective than actually buying fixed income securities. Upon entering into a futures contract, the Funds are required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Funds 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 Funds recognize a realized gain or loss when the contract is closed or expires. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statements of Investments. The Statements of Assets and Liabilities reflect a receivable or payable for the daily mark to market for variation margin. 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. 107 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 6. FUTURES CONTRACTS (continued) At December 31, 1996, outstanding futures contracts were as follows: OPPENHEIMER HIGH INCOME FUND
Expiration Number of Valuation as of Unrealized Date Futures Contracts December 31, 1996 Depreciation - ------------------------------------------------------------------------------------------------ Russell 2000 Index 3/97 35 $ 3,730,781 $17,500 ----------- ------- ----------- ------- OPPENHEIMER BOND FUND Expiration Number of Valuation as of Unrealized Date Futures Contracts December 31, 1996 Depreciation - ------------------------------------------------------------------------------------------------ U.S. Treasury Nts. 3/97 30 $ 3,197,813 $15,000 U.S. Treasury Bonds 3/97 30 3,378,750 250 ----------- ------- $ 6,576,563 $15,250 ----------- ------- ----------- ------- OPPENHEIMER CAPITAL APPRECIATION FUND Expiration Number of Valuation as of Unrealized Date Futures Contracts December 31, 1996 Depreciation - ------------------------------------------------------------------------------------------------ Russell 2000 Index 3/97 440 $79,805,000 $516,694 ----------- ------- ----------- ------- OPPENHEIMER STRATEGIC BOND FUND Unrealized Expiration Number of Valuation as of Appreciation Date Futures Contracts December 31, 1996 (Depreciation) - ------------------------------------------------------------------------------------------------ French Nts. 3/97 20 $ 2,468,292 $ 15,485 German Nts. 3/97 3 490,507 (3,196) U.S. Treasury Nts. 3/97 89 9,724,938 121,406 ----------- -------- $12,683,737 $133,695 ----------- --------- ----------- ---------
7. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management fees paid to the Manager were in accordance with the investment advisory agreements with the Trust. For OHIF, OBF, OCAP, OGF, OMSF, OGSF, OSBF and OGIF, the annual fees are 0.75% of the first $200 million of net assets, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million and 0.60% of net assets in excess of $800 million. In addition, management fees for OHIF, OBF and OSBF are 0.50% of net assets in excess of $1 billion. Management fees for OMF are 0.45% of the first $500 million, 0.425% of the next $500 million, 0.40% of the next $500 million and 0.375% of net assets in excess of $1.5 billion. For OSBF, the Manager has agreed to limit the management fee charged so that the ordinary operating expenses of the Fund will not exceed 1.0% of its average net assets in any fiscal year. The Manager has agreed to reimburse OGF for SEC fees incurred in connection with the acquisition of JP Capital Appreciation Fund, Inc. 8. ILLIQUID AND RESTRICTED SECURITIES At December 31, 1996, investments in securities included issues that are illiquid or restricted. Restricted securities are often 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 be considered illiquid if it lacks a readily-available market or if its valuation has not changed for a certain period of time. The Funds intend to invest no more than 10% of its net assets (determined at the time of purchase and reviewed from time to time) in illiquid and restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limit. The aggregate value of illiquid and restricted securities subject to this 10% limitation at December 31, 1996 are shown on the following page: 108 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 8. ILLIQUID AND RESTRICTED SECURITIES (continued) PERCENTAGE TO AMOUNT NET ASSETS - ------------------------------------------------------------------------------ Oppenheimer High Income Fund $18,868,579 9.86% - ------------------------------------------------------------------------------ Oppenheimer Bond Fund $21,365,291 5.01% - ------------------------------------------------------------------------------ Oppenheimer Capital Appreciation Fund $ 1,083,000 0.18% - ------------------------------------------------------------------------------ Oppenheimer Growth Fund -- -- - ------------------------------------------------------------------------------ Oppenheimer Multiple Strategies Fund $ 1,156,500 0.24% - ------------------------------------------------------------------------------ Oppenheimer Global Securities Fund $ 3,166,926 0.55% - ------------------------------------------------------------------------------ Oppenheimer Strategic Bond Fund $ 4,733,489 3.99% - ------------------------------------------------------------------------------ Oppenheimer Growth & Income Fund $ 98,625 0.21% - ------------------------------------------------------------------------------ Information concerning restricted securities is as follows: OPPENHEIMER HIGH INCOME FUND Valuation Per Unit as of Acquisition Cost December 31, Security Date Per Unit 1996 - ------------------------------------------------------------------------------ BONDS ECM Fund L.P.I., 14% Sub. Nts., 6/10/02 4/14/92 100.00% 110.50% STOCKS AND WARRANTS ECM Fund L.P.I. 4/14/92 $1,000.00 $1,005.00 Gillett Holdings, Inc. 12/1/92-1/18/96 $ 16.27 $ 36.00 Omnipoint Corp. 1/26/96 $ 16.00 $ 18.29 Omnipoint Corp. Wts., Exp. 11/00 11/29/95 $ 0.00 $ 18.29 OPPENHEIMER BOND FUND Valuation Per Unit as of Acquisition Cost December 31, Security Date Per Unit 1996 - ------------------------------------------------------------------------------ Merrill Lynch & Co., Inc. Units, 9.75%, 6/15/99 5/15/95 110.05% 118.80% OPPENHEIMER STRATEGIC BOND FUND Valuation Per Unit as of Acquisition Cost December 31, Security Date Per Unit 1996 - ------------------------------------------------------------------------------ BONDS Trasnpower Finance Ltd., 8% Gtd. Unsec. Unsub. Bonds, 2/15/01 5/17/96 6.49% 72.19% STOCKS Gillett Holdings, Inc. 1/18/96 $21.25 $36.00 109 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (Continued) 9. ACQUISITIONS On June 3, 1996, OMF acquired a portion of the net assets of Panorama Series Fund, Inc. - Money Market Portfolio. The Fund issued 49,302,270 shares of beneficial interest, valued at $49,302,270, in exchange for the net assets, resulting in combined net assets of $113,051,628 on June 3, 1996. On December 2, 1996, OMF acquired the remaining net assets of Panorama Series Fund, Inc. - Money Market Portfolio. The Fund issued 14,666,548 shares of beneficial interest, valued at $14,666,521, in exchange for the net assets, resulting in combined net assets of $124,845,270 on December 2, 1996. On May 1, June 3 and December 2, 1996, OBF acquired all the net assets of Panorama Series Fund, Inc., Income Portfolio. The Fund issued 12,999, 6,743,062 and 2,493,592 shares of beneficial interest, respectively, valued at $148,965, $77,208,064 and $29,830,130, respectively, in exchange for the net assets, resulting in combined net assets of $227,552,225, $308,666,225 and $396,656,585. On May 1, 1996, OBF acquired a portion of the net assets of Panorama Series Fund, Inc., Government Securities Portfolio. The Fund issued 4,237 shares of beneficial interest valued at $48,557, in exchange for the net assets, resulting in combined net assets of $227,552,225 on May 1, 1996. On December 20, 1996, OBF acquired all the net assets of JP Investment Grade Bond Fund, Inc., pursuant to an agreement and plan of reorganization approved by the JP Investment Grade Bond Fund, Inc. shareholders on December 3, 1996. The Fund issued 2,594,896 shares of beneficial interest valued at $30,151,368, in exchange for the net assets, resulting in combined net assets of $426,447,902 on December 20, 1996. The net assets acquired included net unrealized appreciation of $1,017,069. The exchange qualifies as a tax-free reorganization for federal income tax purposes. On December 20, 1996, OGF acquired all the net assets of JP Capital Appreciation Fund, Inc., pursuant to an agreement and plan of reorganization approved by the JP Capital Appreciation Fund, Inc. shareholders on December 3, 1996. The Fund issued 3,293,050 shares of beneficial interest, valued at $90,009,399, in exchange for the net assets, resulting in combined net assets of $289,484,969 on December 20, 1996. The net assets acquired included net unrealized appreciation of $19,087,888. The exchange qualifies as a tax-free reorganization for federal income tax purposes. 110 INDEPENDENT AUDITORS' REPORT The Board of Trustees and Shareholders of Oppenheimer Variable Account Funds: We have audited the accompanying statements of assets and liabilities, including the statements of investments, of Oppenheimer Money Fund, Oppenheimer High Income Fund, Oppenheimer Bond Fund, Oppenheimer Capital Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple Strategies Fund, Oppenheimer Global Securities Fund, Oppenheimer Strategic Bond Fund and Oppenheimer Growth & Income Fund (all of which are series of Oppenheimer Variable Account Funds) as of December 31, 1996, the related statements of operations for the year then ended, the statements of changes in net assets for the years ended December 31, 1996 and 1995, and the financial highlights for the applicable periods ended December 31, 1996, 1995, 1994, 1993 and 1992. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at December 31, 1996 by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of Oppenheimer Money Fund, Oppenheimer High Income Fund, Oppenheimer Bond Fund, Oppenheimer Capital Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple Strategies Fund, Oppenheimer Global Securities Fund, Oppenheimer Strategic Bond Fund and Oppenheimer Growth & Income Fund at December 31, 1996, the results of their operations, the changes in their net assets, and the financial highlights for the respective stated periods, in conformity with generally accepted accounting principles. DELOITTE & TOUCHE LLP Denver, Colorado January 22, 1997 111 FEDERAL INCOME TAX INFORMATION (Unaudited) In early 1997, shareholders will receive information regarding all dividends and distributions paid to them by the Funds during calendar year 1996. Regulations of the U.S. Treasury Department require the Funds to report this information to the Internal Revenue Service. Certain distributions paid on March 25, 1996 were designated as "capital gain distributions" for federal income tax purposes. These distributions are shown in the table below. Whether received in stock or cash, a capital gain distribution should be treated by shareholders as a gain from the sale of capital assets held for more than one year (long-term capital gains). Dividends paid by the Funds during the fiscal year ended December 31, 1996 which are not designated as capital gain distributions should be multiplied by the percentages listed below to arrive at the net amount eligible for the corporate dividend-received deduction. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Long-Term Capital Corporate Dividend- Gains Distribution Received Deduction - ------------------------------------------------------------------------------- Oppenheimer Money Fund N/A N/A - ------------------------------------------------------------------------------- Oppenheimer High Income Fund N/A 3.78% - ------------------------------------------------------------------------------- Oppenheimer Bond Fund N/A 0.53% - ------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund $1.413 2.26% - ------------------------------------------------------------------------------- Oppenheimer Growth Fund $0.948 17.06% - ------------------------------------------------------------------------------- Oppenheimer Multiple Strateges Fund $0.327 12.13% - ------------------------------------------------------------------------------- Oppenheimer Global Securities Fund N/A 13.50% - ------------------------------------------------------------------------------- Oppenheimer Strategic Bond Fund N/A 1.43% - ------------------------------------------------------------------------------- Oppenheimer Growth & Income Fund N/A 7.52% - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- The foregoing information is presented to assist shareholders in reporting distributions received from the Funds to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in the state and local tax regulations, we recommend that you consult your tax adviser for specific guidance. 112 OPPENHEIMER VARIABLE ACCOUNT FUNDS OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer Bridget A. Macaskill, President Robert G. Avis, Trustee William A. Baker, Trustee Charles Conrad, Jr., Trustee Sam Freedman, Trustee Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee Ned M. Steel, Trustee George C. Bowen, Vice President, Treasurer and Assistant Secretary Andrew J. Donohue, Vice President and Secretary Paul LaRocco, Vice President Robert J. Milnamow, Vice President David P. Negri, Vice President Jane Putnam, Vice President Richard H. Rubinstein, Vice President Arthur P. Steinmetz, Vice President Dorothy G. Warmack, Vice President William Wilby, Vice President Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer Robert G. Zack, Assistant Secretary INVESTMENT ADVISER OppenheimerFunds, Inc. TRANSFER AGENT OppenheimerFunds Services CUSTODIAN OF PORTFOLIO SECURITIES The Bank of New York INDEPENDENT AUDITORS Deloitte & Touche LLP LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C. This is a copy of a report to shareholders of Oppenheimer Variable Account Funds. This report must be preceded or accompanied by a Prospectus of Oppenheimer Variable Account Funds. For material information concerning the Funds, see the Prospectus. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested. 113 -----END PRIVACY-ENHANCED MESSAGE-----