-----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, SM+Fu5M+Dzy4iPxCW3Ao+qHDQqGJZOWRiw0Lo3fJkzEMOTv2WMhzK5EUUBg4JOX3 2gGY7YOK3VFUDhVlTbwzFw== 0000935069-02-000994.txt : 20020830 0000935069-02-000994.hdr.sgml : 20020830 20020830145029 ACCESSION NUMBER: 0000935069-02-000994 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020830 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER VARIABLE ACCOUNT FUNDS CENTRAL INDEX KEY: 0000752737 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: 02754149 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 g5291_oppmultiplestratva.txt SEMIANNUAL REPORT JUNE 30, 2002 Oppenheimer Multiple Strategies Fund/VA A Series of Oppenheimer Variable Account Funds [GRAPHIC OMITTED] OPPENHEIMER FUNDS LOGO ART - -------------------------------------------------------------------------------- OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- OBJECTIVE OPPENHEIMER MULTIPLE STRATEGIES FUND/VA, a series of Oppenheimer Variable Account Funds, seeks a high total investment return, which includes current income and capital appreciation in the value of its shares. - -------------------------------------------------------------------------------- NARRATIVE BY RICHARD RUBINSTEIN, PORTFOLIO MANAGER. For the six-months ended June 30, 2002, Oppenheimer Multiple Strategies Fund/VA, on a relative basis, slightly underperformed its peer group, the Lipper Balance Fund/VA category.(1) Since the Fund is broadly diversified, it spreads risks among various asset classes, investment styles and capitalization ranges. This helped to protect the Fund from the market volatility and declines during the period. However, even in times of market weakness, we continued to be opportunistic buyers, purchasing a number of fundamentally sound stocks at attractive prices. We began to see indications that the U.S. economy was emerging from recession. However, the pace of recovery proved uneven. In particular, most growth-oriented technology and telecommunications companies continued to suffer from relatively low levels of corporate capital spending. The market's uncertainties were heightened by the accounting irregularities that surfaced at a few well-known companies, raising broader concerns regarding the integrity of corporate reporting. International political tensions further undermined confidence in the market. During the period, the Fund received positive performances from four main sectors: consumer, media, energy and specialty chemical. The consumer area continued to show strength, as the economic recovery was stronger than most had expected. The media sector, which includes advertising and entertainment stocks, benefited from a strong recovery in ad sales. Energy stocks performed well as the sector was helped by a rebound in energy prices. Finally, specialty chemicals, an overweight position for the Fund, continue to provide strong returns benefiting performance. The two main sectors that detracted from performance were technology and telecommunications. However, even with both of these sectors down, we continued to look for favorable investment opportunities in companies, which should increase market share in a turnaround. In looking at the fixed income investments, the Fund's holdings of U.S Treasury securities, mortgage-backed securities and international bonds provided particularly strong returns. However, they were partially offset by losses in our high-yield corporate and emerging market bonds. Emerging markets dropped from peak levels as uncertainties about the situations in Argentina and Brazil continue to linger. However, the Fund's concentration in Brady Bonds proved less volatile than the benchmark's for fixed-income securities, the Lehman Brothers Aggregate Bond Index. 1. Total returns include changes in net asset value per share but do not include the charges associated with the separate account products which offer this Fund. Such performance would have been lower if such charges were taken into account, and can be provided by the separate account product sponsor. The Fund's performance is compared to the average of the total return of the 619 funds in the Lipper Balanced Fund/VA category for the six-month period ended 6/30/02. 2 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA The Fund's makeup has stayed fairly consistent over the course of the period, holding about 53% in stocks, 30% in bonds and 17% in cash. The high cash allotment allows us to be opportunistic buyers, in this weak market environment. The Fund continues to have a value tilt, with about a 2-to-1 value/growth ratio. Going forward, the Fund has shifted some focus to large-cap stocks and the health care sector. We have added such large-cap companies as Merrill Lynch & Co., Inc., AT&T Corp. and American International Group, Inc. during the period. Our belief, now that the dollar has weakened and foreign currencies have strengthened, is that large-cap companies will take advantage of and receive better returns from their international divisions. Even though our health care holdings detracted from performance for the period, we continue to believe in the long-term strength of the sector. We are shifting this sector to an overweight position within the Fund. Although we expect continuing political, economic and market uncertainty to limit broad stock market gains, we have continued to be opportunistic and to look for attractive opportunities in individual stocks. In fact, we believe that our balanced approach to investing is particularly well suited to investment climates like this one. This conservative, disciplined and diversified approach to investing is what makes Oppenheimer Multiple Strategies Fund/VA an important part of THE RIGHT WAY TO INVEST. IN REVIEWING PERFORMANCE, PLEASE REMEMBER THAT PAST PERFORMANCE CANNOT GUARANTEE FUTURE RESULTS. BECAUSE OF ONGOING MARKET VOLATILITY, THE FUND'S PERFORMANCE MAY BE SUBJECT TO FLUCTUATIONS, AND CURRENT PERFORMANCE MAY BE LESS THAN THE RESULTS SHOWN. The Fund's portfolio is subject to change. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. SHARES OF OPPENHEIMER FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, ARE NOT GUARANTEED BY ANY BANK, ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY, AND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. 3 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS June 30, 2002 / Unaudited - -------------------------------------------------------------------------------- MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMON STOCKS--51.7% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--8.7% - -------------------------------------------------------------------------------- AUTO COMPONENTS--0.5% Borg-Warner Automotive, Inc.(1,2) 20,000 $ 1,155,200 Delphi Corp. 110,000 1,452,000 ------------- 2,607,200 - -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--0.6% Brinker International, Inc.(1,2) 78,000 2,476,500 MGM Mirage, Inc.(1,2) 22,000 742,500 ------------- 3,219,000 - -------------------------------------------------------------------------------- HOUSEHOLD DURABLES--0.7% Matsushita Electric Industrial Co. Ltd., Sponsored ADR 82,000 1,134,060 Nintendo Co. Ltd. 10,000 1,472,551 Sony Corp. 13,000 686,551 Sony Corp., Sponsored ADR 6,000 318,600 ------------- 3,611,762 - -------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS--1.4% Callaway Golf Co.(2) 122,000 1,932,480 Hasbro, Inc.(2) 90,000 1,220,400 Mattel, Inc. 138,000 2,909,045 Shimano, Inc. 100,000 1,356,583 -- ------------- 7,418,508 - -------------------------------------------------------------------------------- MEDIA--3.7% Cox Radio, Inc., Cl. A(1,2) 48,300 1,164,030 EchoStar Communications Corp., Cl. A(1) 96,000 1,781,760 General Motors Corp., Cl. H(1,2) 36,000 374,400 Martha Stewart Living Omnimedia, Inc., Cl. A(1) 59,000 676,730 News Corp. Ltd. (The), Sponsored ADR, Preference 56,000 1,106,000 Omnicom Group, Inc. 45,700 2,093,060 Reed Elsevier plc 144,000 1,368,578 SCMP Group Ltd. 1,608,000 932,846 SES Global, FDR 80,000 790,080 Viacom, Inc., Cl. B(1) 200,000 8,874,000 ------------- 19,161,484 - -------------------------------------------------------------------------------- MULTILINE RETAIL--0.3% Federated Department Stores, Inc.(1,2) 42,100 1,671,370 - -------------------------------------------------------------------------------- SPECIALTY RETAIL--1.0% Borders Group, Inc.(1,2) 60,000 1,104,000 Children's Place Retail Stores, Inc.(1,2) 27,500 728,777 Gap, Inc. (The) 115,100 1,634,420 Talbots, Inc. (The)(2) 30,000 1,050,000 Tiffany & Co. 24,800 872,960 ------------- 5,390,157 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- TEXTILES & APPAREL--0.5% Jones Apparel Group, Inc.(1,2) 23,500 $ 881,250 Nike, Inc., Cl. B(2) 32,500 1,743,625 ------------- 2,624,875 - -------------------------------------------------------------------------------- CONSUMER STAPLES--2.9% - -------------------------------------------------------------------------------- FOOD & DRUG RETAILING--0.0% Companhia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR 14,000 249,060 - -------------------------------------------------------------------------------- FOOD PRODUCTS--1.3% ConAgra Foods, Inc. 78,000 2,156,700 Sara Lee Corp. 30,000 619,200 Tyson Foods, Inc., Cl. A 151,000 2,342,010 Unilever NV, NY Shares 26,000 1,684,800 ------------- 6,802,710 - -------------------------------------------------------------------------------- PERSONAL PRODUCTS--0.9% Estee Lauder Cos., Inc. (The), Cl. A 36,000 1,267,200 Wella AG 55,900 3,240,641 ------------- 4,507,841 - -------------------------------------------------------------------------------- TOBACCO--0.7% Philip Morris Cos., Inc. 82,000 3,581,760 - -------------------------------------------------------------------------------- ENERGY--4.4% - -------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--1.4% Cooper Cameron Corp.(1,2) 28,000 1,355,760 Core Laboratories NV(1) 67,000 805,340 GlobalSantaFe Corp. 69,000 1,887,150 Noble Corp.(1,2) 60,600 2,339,160 Petroleum Geo-Services ASA, Sponsored ADR(1) 140,000 504,000 Transocean, Inc.(2) 24,000 747,600 ------------- 7,639,010 - -------------------------------------------------------------------------------- OIL & GAS--3.0% Devon Energy Corp.(2) 46,000 2,266,880 Houston Exploration Co.(1) 24,400 707,600 Murphy Oil Corp.(2) 12,600 1,039,500 Ocean Energy, Inc. 40,000 866,800 Petroleo Brasileiro SA, Preference 33,300 575,931 Talisman Energy, Inc. 64,000 2,871,984 TotalFinaElf SA, B Shares 1,700 276,014 TotalFinaElf SA, Sponsored ADR 17,100 1,383,390 Unocal Corp.(2) 130,000 4,802,200 Westport Resources Corp.(1) 50,000 820,000 ------------- 15,610,299 4 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- FINANCIALS--7.8% - -------------------------------------------------------------------------------- BANKS--3.1% Bank of America Corp.(2) 87,500 $ 6,156,500 Bank of New York Co., Inc. (The) 50,000 1,687,500 BBVA Banco Frances SA, ADR(1) 15,833 22,958 ICICI Bank Ltd., Sponsored ADR 44,375 310,625 U.S. Bancorp 89,000 2,078,150 UBS AG(1) 25,050 1,259,822 UniCredito Italiano SpA 414,000 1,872,608 Washington Mutual, Inc. 77,000 2,857,470 ------------- 16,245,633 - -------------------------------------------------------------------------------- DIVERSIFIED FINANCIALS--1.7% J.P. Morgan Chase & Co. 235,000 7,971,200 Merrill Lynch & Co., Inc. 20,000 810,000 Morgan Stanley 4,500 193,860 Perez Companc SA, Sponsored ADR(1) 14,880 84,816 ------------- 9,059,876 - -------------------------------------------------------------------------------- INSURANCE--0.8% American International Group, Inc. 17,500 1,194,025 Hartford Financial Services Group, Inc. 40,000 2,378,800 Zurich Financial Services AG 2,400 484,580 ------------- 4,057,405 - -------------------------------------------------------------------------------- REAL ESTATE--2.2% Camden Property Trust 28,000 1,036,840 CarrAmerica Realty Corp. 33,000 1,018,050 Developers Diversified Realty Corp. 100,000 2,250,000 Equity Office Properties Trust 46,000 1,384,600 Health Care Property Investors, Inc. 33,800 1,450,020 Host Marriott Corp. 270,000 3,051,000 IRSA Inversiones y Representaciones SA, Sponsored GDR(1) 16,195 66,399 Shurgard Storage Centers, Inc. 44,000 1,526,800 ------------- 11,783,709 - -------------------------------------------------------------------------------- HEALTH CARE--7.8% - -------------------------------------------------------------------------------- BIOTECHNOLOGY--1.0% Affymetrix, Inc.(1,2) 41,000 983,590 Biogen, Inc.(1) 10,000 414,300 Human Genome Sciences, Inc.(1,2) 73,500 984,900 Millennium Pharmaceuticals, Inc.(1,2) 35,000 425,250 Wyeth 46,000 2,355,200 ------------- 5,163,240 - -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--0.6% Boston Scientific Corp.(1,2) 56,000 1,641,920 Guidant Corp.(1) 55,000 1,662,650 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- Sun Healthcare Group, Inc.(1) 496 $ 7,998 ------------- 3,312,568 - -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--1.9% Anthem, Inc.(1,2) 23,400 1,579,032 Covance, Inc.(1) 125,500 2,353,125 Healthsouth Corp.(1) 125,000 1,598,750 Humana, Inc.(1) 108,000 1,688,040 Quintiles Transnational Corp.(1) 108,000 1,348,920 Service Corp. International(1) 265,000 1,279,950 ------------- 9,847,817 - -------------------------------------------------------------------------------- PHARMACEUTICALS--4.3% Abbott Laboratories 77,000 2,899,050 AstraZeneca plc 38,000 1,579,457 Bristol-Myers Squibb Co. 45,000 1,156,500 GlaxoSmithKline plc, ADR 62,000 2,674,680 Johnson & Johnson(2) 78,000 4,076,280 Merck & Co., Inc. 44,000 2,228,160 Novartis AG 74,800 3,289,431 Pliva d.d., GDR(3) 20,000 294,800 Schering-Plough Corp. 95,000 2,337,000 Watson Pharmaceuticals, Inc.(1) 80,200 2,026,654 ------------- 22,562,012 - -------------------------------------------------------------------------------- INDUSTRIALS--3.2% - -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--0.4% Boeing Co.(2) 33,000 1,485,000 Northrop Grumman Corp. 4,600 575,000 Orbital Sciences Corp.(1) 1,019 8,121 ------------- 2,068,121 - -------------------------------------------------------------------------------- AIR FREIGHT & COURIERS--0.2% United Parcel Service, Inc., Cl. B 19,000 1,173,250 - -------------------------------------------------------------------------------- AIRLINES--0.3% Delta Air Lines, Inc.(2) 46,000 920,000 Singapore Airlines Ltd. 116,000 846,955 ------------- 1,766,955 - -------------------------------------------------------------------------------- BUILDING PRODUCTS--0.4% GrafTech International Ltd.(1) 195,000 2,398,500 - -------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--0.4% Pittston Brink's Group 79,000 1,896,000 - -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--0.1% Active Power, Inc.(1) 137,000 494,570 - -------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--0.3% Tyco International Ltd.(2) 113,000 1,526,630 - -------------------------------------------------------------------------------- MACHINERY--0.4% Komatsu Ltd. 196,000 701,519 Morgan Crucible Co. plc 321,800 553,993 Wolverine Tube, Inc.(1) 83,600 631,180 ------------- 1,886,692 5 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- ROAD & RAIL--0.7% Burlington Northern Santa Fe Corp. 46,000 $ 1,380,000 Swift Transportation Co., Inc.(1,2) 90,000 2,097,000 ------------- 3,477,000 - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--9.2% - -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--0.9% Brocade Communications Systems, Inc.(1) 67,400 1,178,152 Cisco Systems, Inc.(1) 97,000 1,353,150 Juniper Networks, Inc.(1) 45,000 254,250 Motorola, Inc. 133,000 1,917,860 ------------- 4,703,412 - -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--1.9% EMC Corp.(1) 90,000 679,500 International Business Machines Corp.(2) 128,000 9,216,000 ------------- 9,895,500 - -------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--1.2% Cognex Corp.(1,2) 73,000 1,463,650 Keyence Corp. 8,360 1,770,903 Millipore Corp. 32,000 1,023,360 SureBeam Corp., Cl. A(1) 58,000 316,680 Thermo Electron Corp. 25,000 412,500 Waters Corp.(1,2) 55,000 1,468,500 ------------- 6,455,593 - -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--0.3% Check Point Software Technologies Ltd.(1) 60,000 813,600 Yahoo!, Inc.(1,2) 49,000 723,240 ------------- 1,536,840 - -------------------------------------------------------------------------------- IT CONSULTING & SERVICES--0.4% Titan Corp. (The)(1,2) 110,000 2,011,900 - -------------------------------------------------------------------------------- OFFICE ELECTRONICS--0.1% Canon, Inc. 22,000 831,470 - -------------------------------------------------------------------------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS--3.1% Analog Devices, Inc.(1) 53,000 1,574,100 Applied Micro Circuits Corp. 80,000 378,400 ASML Holding NV(1) 70,000 1,058,400 Intel Corp. 221,000 4,037,670 International Rectifier Corp.(1) 17,000 495,550 KLA-Tencor Corp.(1,2) 43,000 1,891,570 Lam Research Corp.(1) 81,000 1,456,380 National Semiconductor Corp.(1,2) 64,000 1,866,880 STMicroelectronics NV, NY Registered Shares 64,000 1,557,120 Teradyne, Inc.(1,2) 94,000 2,209,000 ------------- 16,525,070 MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- SOFTWARE--1.3% BEA Systems, Inc.(1) 83,000 $ 789,330 Computer Associates International, Inc.(2) 15,000 238,350 i2 Technologies, Inc.(1) 150,000 222,000 Intuit, Inc.(1,2) 5,000 248,600 Peoplesoft, Inc.(1,2) 80,000 1,190,400 Red Hat, Inc.(1) 111,000 651,570 Reynolds & Reynolds Co., Cl. A 30,900 863,655 Synopsys, Inc.(1,2) 35,000 1,918,350 Veritas Software Corp.(1,2) 31,700 627,343 ------------- 6,749,598 - -------------------------------------------------------------------------------- MATERIALS--4.6% - -------------------------------------------------------------------------------- CHEMICALS--2.8% Cabot Corp.(2) 75,400 2,160,210 Dow Chemical Co. 29,000 997,020 Engelhard Corp.(2) 80,000 2,265,600 Ferro Corp. 88,000 2,653,200 Hercules, Inc.(1,2) 142,000 1,647,200 International Flavors & Fragrances, Inc.(2) 64,000 2,079,360 Monsanto Co. 49,000 872,200 Praxair, Inc.(2) 36,000 2,050,920 ------------- 14,725,710 - -------------------------------------------------------------------------------- METALS & MINING--0.9% Alcoa, Inc. 35,000 1,160,250 Companhia Vale do Rio Doce, Sponsored ADR 68,800 1,785,360 Quanex Corp. 38,095 1,664,752 ------------- 4,610,362 - -------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS--0.9% Georgia-Pacific Corp. 113,000 2,777,540 Sappi Ltd., Sponsored ADR 50,000 701,000 UPM-Kymmene Oyj 34,000 1,338,435 ------------- 4,816,975 - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--1.2% - -------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.1% SBC Communications, Inc.(2) 10,500 320,250 Tele Norte Leste Participacoes SA (Telemar) 26,283,402 220,189 Tele Norte Leste Participacoes SA (Telemar), Preference 3,077,585 30,738 Telefonica SA, BDR 16,262 134,637 WorldCom, Inc./WorldCom Group(1) 375,000 33,750 ------------- 739,564 - -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--1.1% AT&T Corp. 298,000 3,188,600 6 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA MARKET VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES Continued AT&T Wireless Services, Inc.(1) 363,000 $ 2,123,550 Millicom International Cellular SA(1) 205,000 328,000 Telesp Celular Participacoes SA(1) 49,153,261 68,802 ------------- 5,708,952 - -------------------------------------------------------------------------------- UTILITIES--1.9% - -------------------------------------------------------------------------------- ELECTRIC UTILITIES--0.9% Edison International(1,2) 41,000 697,000 Northeast Utilities Co. 86,000 1,617,660 Progress Energy, Inc. 28,000 1,456,280 Xcel Energy, Inc. 56,000 939,120 ------------- 4,710,060 - -------------------------------------------------------------------------------- GAS UTILITIES--0.5% El Paso Corp.(2) 66,400 1,368,504 NiSource, Inc. 54,000 1,178,820 ------------- 2,547,324 - -------------------------------------------------------------------------------- MULTI-UTILITIES--0.5% Energy East Corp. 65,000 1,469,000 NorthWestern Corp. 67,000 1,135,650 ------------- 2,604,650 ------------- Total Common Stocks (Cost $242,867,479) 271,987,994 - -------------------------------------------------------------------------------- PREFERRED STOCKS--0.5% Qwest Trends Trust, 5.75% Cv.(3) 63,000 574,875 Rouse Co. (The), $3.00 Cv., Series B 23,000 1,081,000 Sovereign Capital Trust II, 7.50% Cv. Preferred Income Equity Redeemable Stock, Units (each unit consists of one preferred plus one warrant to purchase 5.3355 shares of Sovereign Bancorp common stock)(4) 12,500 1,025,000 ------------- Total Preferred Stocks (Cost $4,740,578) 2,680,875 UNITS - -------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% Applera Corp./Applied Biosystems Group, Cl. G Wts., Exp. 9/11/03(1,5) 249 747 Covergent Communications, Inc. Wts., Exp. 4/1/08(1,5) 1,000 10 Health Facilities Holdings, Inc. Wts., Exp. 9/27/09(1,5) 2,593 259 Mexico Value Rts., Exp. 6/30/03(1) 4,450,000 1,152 Sun Healthcare Group, Inc. Wts., Exp. 2/28/05(1,5) 1,241 621 ------------- Total Rights, Warrants and Certificates (Cost $38,888) 2,789 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS--5.7% Federal Home Loan Mortgage Corp., Gtd. Multiclass Mtg. Pass-Through Certificates, 7%, 5/1/29 $ 2,649,211 $ 2,748,345 Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Series 203, Cl. IO, 6.50%, 6/15/29(6) 10,250,892 2,260,002 Series 204, Cl. IO, 6%, 5/15/29(6) 9,967,942 2,317,547 Federal National Mortgage Assn.: 6%, 5/1/16 16,898,666 17,263,000 6.50%, 11/1/27 - 12/1/27 2,345,552 2,400,696 Federal National Mortgage Assn. Nts.: 5.125%, 2/13/04 1,750,000 1,816,498 7.125%, 1/15/30 400,000 449,359 Government National Mortgage Assn., 8%, 4/15/23 842,429 908,333 ------------- Total Mortgage-Backed Obligations (Cost $29,343,152) 30,163,780 - -------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS--14.8% U.S. Treasury Bonds: 6%, 2/15/26 575,000 598,268 7.50%, 11/15/16 1,310,000 1,576,922 8.875%, 8/15/17 2,900,000 3,912,468 U.S. Treasury Bonds, STRIPS: 6.30%, 8/15/25(7) 10,965,000 2,788,586 6.54%, 8/15/15(7) 6,035,000 2,893,945 7.10%, 11/15/18(7) 13,600,000 5,199,390 7.26%, 11/15/18(7) 8,500,000 3,259,971 7.31%, 8/15/19(7) 15,300,000 5,597,260 U.S. Treasury Nts.: 3.50%, 11/15/06 5,000,000 4,912,505 5%, 8/15/11 5,000,000 5,071,010 5.75%, 8/15/03 3,300,000 3,432,518 5.875%, 9/30/02 15,000,000 15,163,845 6.125%, 8/15/07 3,500,000 3,815,896 6.25%, 2/15/07 8,800,000 9,632,031 6.375%, 8/15/02 5,000,000 5,031,895 6.50%, 8/15/05 - 10/15/06 4,655,000 5,114,830 ------------- Total U.S. Government Obligations (Cost $72,632,672) 78,001,340 7 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE ACCOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS--9.0% - -------------------------------------------------------------------------------- ARGENTINA--0.6% Argentina (Republic of) Nts., 14.062%, 11/30/02(1,8) $13,125,000 $ 2,428,125 Argentina (Republic of) Par Bonds, 5.984%, 3/31/23(1,8) 1,665,000 740,925 ------------- 3,169,050 - -------------------------------------------------------------------------------- AUSTRALIA--0.5% New South Wales Treasury Corp. Gtd. Bonds, 7%, 4/1/04 [AUD] 3,160,000 1,809,926 Queensland Treasury Corp. Global Exchangeable Gtd. Nts., 10.50%, 5/15/03 [AUD] 1,800,000 1,054,938 ------------- 2,864,864 - -------------------------------------------------------------------------------- BRAZIL--2.8% Brazil (Federal Republic of) Eligible Interest Bonds, 3.063%, 4/15/06(9) 8,915,200 7,154,448 Brazil (Federal Republic of) Debt Capitalization Bonds, Series 20 yr., 8%, 4/15/14 11,876,949 7,541,863 ------------- 14,696,311 - -------------------------------------------------------------------------------- CANADA--2.2% Canada (Government of) Bonds, Series WL43, 5.75%, 6/1/29 [CAD] 3,670,000 2,399,773 Canada (Government of) Bonds, 8.75%, 12/1/05 [CAD] 12,200,000 9,105,922 ------------- 11,505,695 - -------------------------------------------------------------------------------- DENMARK--0.9% Denmark (Kingdom of) Bonds, 8%, 3/15/06 [DKK] 32,100,000 4,731,420 - -------------------------------------------------------------------------------- GREAT BRITAIN--0.8% United Kingdom Treasury Bonds, 6.75%, 11/26/04 [GBP] 2,680,000 4,263,644 - -------------------------------------------------------------------------------- MEXICO--0.8% United Mexican States Collateralized Fixed Rate Par Bonds, Series W-A, 6.25%, 12/31/19 4,450,000 4,221,937 - -------------------------------------------------------------------------------- PHILIPPINES--0.2% Philippines (Republic of) Bonds, 8.60%, 6/15/27(5) 1,150,000 940,125 PRINCIPAL MARKET VALUE ACCOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- SOUTH AFRICA--0.2% Eskom Depositary Receipts, Series E168, 11%, 6/1/08 [ZAR] 12,570,000 $ 1,153,406 ------------- Total Foreign Government Obligations (Cost $62,171,429) 47,546,452 - -------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES--10.1% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--4.0% - -------------------------------------------------------------------------------- AUTO COMPONENTS--0.0% Cambridge Industries, Inc. Liquidating Trust Interests, 7/15/07 309,823 -- Collins & Aikman Floorcoverings, Inc., 9.75% Sr. Sub. Nts., 2/15/10(3) 200,000 205,000 ------------- 205,000 - -------------------------------------------------------------------------------- AUTOMOBILES--0.1% Ford Motor Co., 7.70% Unsec. Debs., 5/15/97 400,000 363,374 - -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--0.6% Boyd Gaming Corp., 8.75% Nts., 4/15/12(3) 200,000 202,000 Coast Hotels & Casinos, Inc., 9.50% Sr. Sub. Nts., 4/1/09(3) 200,000 211,000 Horseshoe Gaming LLC, 8.625% Sr. Sub. Nts., 5/15/09 400,000 409,000 Isle of Capri Casinos, Inc., 9% Sr. Sub. Nts., 3/15/12(3) 300,000 304,500 MGM Mirage, Inc., 8.375% Sr. Unsec. Sub. Nts., 2/1/11 400,000 404,000 Mohegan Tribal Gaming Authority, 8% Sr. Sub. Nts., 4/1/12(3) 400,000 403,500 Penn National Gaming, Inc., 8.875% Sr. Sub. Nts., 3/15/10 500,000 496,250 Premier Parks, Inc., 9.75% Sr. Nts., 6/15/07 500,000 515,000 Sun International Hotels Ltd., 8.875% Sr. Sub. Nts., 8/15/11(3) 400,000 410,500 ------------- 3,355,750 - -------------------------------------------------------------------------------- HOUSEHOLD DURABLES--1.0% Beazer Homes USA, Inc., 8.375% Sr. Nts., 4/15/12(3) 400,000 406,000 Blount, Inc., 13% Sr. Sub. Nts., 8/1/09 700,000 476,000 D.R. Horton, Inc., 9.75% Sr. Sub. Nts., 9/15/10 400,000 416,000 8 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA PRINCIPAL MARKET VALUE ACCOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- HOUSEHOLD DURABLES Continued K. Hovnanian Enterprises, Inc., 8.875% Sr. Sub. Nts., 4/1/12(3) $ 700,000 $ 692,125 KB Home: 7.75% Sr. Nts., 10/15/04 400,000 406,000 8.625% Sr. Sub. Nts., 12/15/08 600,000 609,000 Standard Pacific Corp., 9.25% Sr. Sub. Nts., 4/15/12 200,000 202,000 Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 1,750,000 1,767,500 Williams Scotsman, Inc., 9.875% Sr. Unsec. Nts., 6/1/07(3) 400,000 384,000 ------------- 5,358,625 - -------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--0.1% Amazon.com, Inc., 0%/10% Sr. Unsec. Disc. Nts., 5/1/08(10) 500,000 457,500 - -------------------------------------------------------------------------------- MEDIA--1.9% Adelphia Communications Corp.: 10.25% Sr. Unsec. Sub. Nts., 6/15/11(8) 400,000 166,000 10.875% Sr. Unsec. Nts., 10/1/10(8) 200,000 80,000 AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11 300,000 298,875 Chancellor Media Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 6/15/07 1,000,000 1,005,000 Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp.: 0%/9.92% Sr. Unsec. Disc. Nts., 4/1/11(10) 400,000 193,000 10% Sr. Nts., 4/1/09 600,000 417,000 Cumulus Media, Inc., 10.375% Sr. Unsec. Sub. Nts., 7/1/08 300,000 319,500 EchoStar Broadband Corp., 10.375% Sr. Unsec. Nts., 10/1/07 1,000,000 960,000 EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09 700,000 651,000 Entravision Communications Corp., 8.125% Sr. Sub. Nts., 3/15/09(3) 200,000 202,000 Lamar Advertising Co., 9.625% Sr. Unsec. Sub. Nts., 12/1/06 150,000 154,875 Mediacom LLC/Mediacom Capital Corp., 9.50% Sr. Unsec. Nts., 1/15/13 500,000 435,000 Rogers Cablesystems Ltd., 10% Second Priority Sr. Sec. Debs., 12/1/07 1,000,000 1,045,000 PRINCIPAL MARKET VALUE ACCOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- Sinclair Broadcast Group, Inc.: 8.75% Sr. Sub. Nts., 12/15/07 $ 900,000 $ 900,000 8.75% Sr. Sub. Nts., 12/15/11 250,000 251,250 9% Sr. Unsec. Sub. Nts., 7/15/07 375,000 376,875 Six Flags, Inc., 8.875% Sr. Nts., 2/1/10 300,000 300,000 Time Warner Entertainment Co. LP, 10.15% Sr. Nts., 5/1/12 500,000 571,918 Time Warner, Inc., 9.125% Debs., 1/15/13 500,000 554,380 United Pan-Europe Communications NV, 10.875% Sr. Unsec. Nts., Series B, 8/1/09(8) 400,000 54,000 Viacom, Inc., 7.70% Sr. Unsec. Nts., 7/30/10 750,000 821,319 ------------- 9,756,992 - -------------------------------------------------------------------------------- MULTILINE RETAIL--0.1% Wal-Mart Stores, Inc., 7.55% Sr. Unsec. Nts., 2/15/30 400,000 461,230 - -------------------------------------------------------------------------------- SPECIALTY RETAIL--0.2% CSK Auto, Inc., 12% Sr. Nts., 6/15/06(3) 300,000 322,125 Petco Animal Supplies, Inc., 10.75% Sr. Sub. Nts., 11/1/11 250,000 271,250 United Auto Group, Inc., 9.625% Sr. Sub. Nts., 3/15/12(3) 200,000 202,000 United Rentals, Inc., 9% Sr. Unsec. Sub. Nts., Series B, 4/1/09 500,000 500,000 ------------- 1,295,375 - -------------------------------------------------------------------------------- CONSUMER STAPLES--0.7% - -------------------------------------------------------------------------------- BEVERAGES--0.1% Coca-Cola Co. (The), 7.375% Unsec. Debs., 7/29/93 360,000 380,577 - -------------------------------------------------------------------------------- FOOD & DRUG RETAILING--0.3% Fleming Cos., Inc., 10.625% Sr. Unsec. Sub. Nts., Series D, 7/31/07 1,000,000 985,000 Great Atlantic & Pacific Tea Co., Inc. (The), 9.125% Sr. Nts., 12/15/11 100,000 93,500 Pathmark Stores, Inc., 8.75% Sr. Sub. Nts., 2/1/12 300,000 306,000 ------------- 1,384,500 - -------------------------------------------------------------------------------- FOOD PRODUCTS--0.3% Canandaigua Brands, Inc., 8.625% Sr. Unsec. Nts., 8/1/06 700,000 738,500 Dole Food Co., Inc., 7.25% Nts., 5/1/09(3) 500,000 511,922 Smithfield Foods, Inc., 8% Sr. Nts., Series B, 10/15/09 400,000 408,000 ------------- 1,658,422 9 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE ACCOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--0.0% Revlon Consumer Products Corp., 12% Sr. Sec. Nts., 12/1/05 $ 250,000 $ 250,000 - -------------------------------------------------------------------------------- ENERGY--0.9% - -------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--0.2% BRL Universal Equipment Corp., 8.875% Sr. Sec. Nts., 2/15/08 500,000 497,500 Hornbeck-Leevac Marine Services, Inc., 10.625% Sr. Nts., 8/1/08 250,000 262,812 R&B Falcon Corp., 9.50% Sr. Unsec. Nts., 12/15/08 500,000 593,504 ------------- 1,353,816 - -------------------------------------------------------------------------------- OIL & GAS--0.7% Chesapeake Energy Corp.: 8.125% Sr. Unsec. Nts., 4/1/11 200,000 197,500 8.375% Sr. Unsec. Nts., 11/1/08 400,000 402,000 Conoco, Inc., 6.95% Sr. Unsec. Nts., 4/15/29 400,000 410,044 Forest Oil Corp., 10.50% Sr. Unsec. Sub. Nts., 1/15/06 400,000 428,000 Frontier Oil Corp., 11.75% Sr. Nts., 11/15/09 250,000 266,875 Funding Corp./Beaver Valley Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17 989,000 1,060,296 Pennzoil-Quaker State Co., 10% Sr. Nts., 11/1/08(5) 250,000 294,062 Stone Energy Corp., 8.25% Sr. Unsec. Sub. Nts., 12/15/11 250,000 251,250 Westport Resources Corp., 8.25% Sr. Unsec. Sub. Nts., 11/1/11 250,000 257,500 ------------- 3,567,527 - -------------------------------------------------------------------------------- FINANCIALS--0.9% - -------------------------------------------------------------------------------- BANKS--0.2% ABN Amro Bank NV (NY Branch), 7.125% Sub. Nts., Series B, 10/15/93 400,000 424,938 Bank of America Corp., 7.80% Jr. Unsec. Sub. Nts., 2/15/10 400,000 448,268 ------------- 873,206 - -------------------------------------------------------------------------------- DIVERSIFIED FINANCIALS--0.4% Citigroup, Inc., 6.875% Unsec. Nts., 2/15/98 450,000 446,709 General Electric Capital Corp., 7.25% Nts., Series A, 2/1/05 400,000 431,412 Goldman Sachs Group, Inc. (The), 7.80% Sr. Unsec. Unsub. Nts., Series B, 1/28/10 400,000 439,371 PRINCIPAL MARKET VALUE ACCOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- J.P. Morgan Chase & Co., 6.75% Sub. Nts., 2/1/11 $ 750,000 $ 778,646 Metris Cos., Inc., 10% Sr. Unsec. Nts., 11/1/04 200,000 185,000 ------------- 2,281,138 - -------------------------------------------------------------------------------- REAL ESTATE--0.3% Host Marriott LP, 9.50% Sr. Nts., 1/15/07(3) 400,000 405,500 MeriStar Hospitality Corp.: 8.75% Sr. Unsec. Sub. Nts., 8/15/07 500,000 445,000 9.125% Sr. Nts., 1/15/11 500,000 480,000 9.125% Sr. Unsec. Nts., 1/15/11(3) 200,000 192,000 MeriStar Hospitality Operating Partnership/Finance Corp. II, 10.50% Sr. Nts., 6/15/09(3) 250,000 253,750 ------------- 1,776,250 - -------------------------------------------------------------------------------- HEALTH CARE--0.0% - -------------------------------------------------------------------------------- BIOTECHNOLOGY--0.0% Amgen, Inc., 8.125% Unsec. Debs., 4/1/97 91,000 99,287 - -------------------------------------------------------------------------------- INDUSTRIALS--1.0% - -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--0.1% Boeing Capital Corp., 6.50% Nts., 2/15/12 750,000 787,788 - -------------------------------------------------------------------------------- AIRLINES--0.1% Amtran, Inc., 10.50% Sr. Nts., 8/1/04 500,000 362,500 - -------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--0.2% Allied Waste North America, Inc.: 8.50% Sr. Sub. Nts., 12/1/08 300,000 291,000 8.875% Sr. Nts., Series B, 4/1/08 200,000 197,000 10% Sr. Unsec. Sub. Nts., Series B, 8/1/09 500,000 493,790 IT Group, Inc., 11.25% Sr. Unsec. Sub. Nts., Series B, 4/1/09(5,8) 400,000 500 ------------- 982,290 - -------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--0.1% Tyco International Group SA, 6.375% Nts., 10/15/11 750,000 575,243 - -------------------------------------------------------------------------------- MACHINERY--0.4% Caterpillar, Inc., 7.375% Unsec. Debs., 3/1/97 400,000 419,248 International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 500,000 450,000 John Deere Capital Corp., 6% Unsec. Nts., 2/15/09 500,000 507,546 Terex Corp., 9.25% Sr. Unsec. Sub. Nts., 7/15/11 250,000 260,000 10 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA PRINCIPAL MARKET VALUE ACCOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- MACHINERY Continued Wolverine Tube, Inc., 10.50% Sr. Nts., 4/1/09(3) $ 500,000 $ 492,500 ------------- 2,129,294 - -------------------------------------------------------------------------------- ROAD & RAIL--0.1% Norfolk Southern Corp., 7.90% Sr. Bonds, 5/15/97 400,000 430,722 - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--0.2% - -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--0.0% Motorola, Inc., 5.22% Unsec. Debs., 10/1/97 140,000 80,923 - -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--0.1% International Business Machines Corp., 7.125% Sr. Unsec. Unsub. Debs., 12/1/96 400,000 404,500 - -------------------------------------------------------------------------------- SEMICONDUCTOR EQUIPMENT & PRODUCTS--0.1% Amkor Technology, Inc., 9.25% Sr. Unsec. Nts., 5/1/06 700,000 577,500 - -------------------------------------------------------------------------------- MATERIALS--1.3% - -------------------------------------------------------------------------------- CHEMICALS--0.6% Avecia Group plc, 11% Sr. Unsec. Nts., 7/1/09 500,000 500,000 Huntsman Corp./ICI Chemical Co. plc, Zero Coupon Sr. Unsec. Disc. Nts., 13.08%, 12/31/09(7) 500,000 122,500 Huntsman International LLC, 9.875% Sr. Nts., 3/1/09(3) 200,000 201,500 ISP Holdings, Inc., 10.625% Bonds, 12/15/09(3) 250,000 248,750 Lyondell Chemical Co.: 9.625% Sr. Sec. Nts., Series A, 5/1/07 150,000 143,625 9.875% Sec. Nts., Series B, 5/1/07 400,000 384,000 NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 53,000 53,265 OM Group, Inc., 9.25% Sr. Sub. Nts., 12/15/11 250,000 260,000 Rohm & Haas Co., 7.85% Unsec. Debs., 7/15/29 400,000 461,246 Sterling Chemicals, Inc.: 11.75% Sr. Unsec. Sub. Nts., 8/15/06(8) 335,000 48,575 12.375% Sr. Sec. Nts., Series B, 7/15/06(8) 650,000 607,750 ------------- 3,031,211 PRINCIPAL MARKET VALUE ACCOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- CONTAINERS & PACKAGING--0.0% Graphic Packaging Corp., 8.625% Sr. Sub. Nts., 2/15/12(3) $ 200,000 $ 207,500 - -------------------------------------------------------------------------------- METALS & MINING--0.5% AK Steel Corp., 9.125% Sr. Nts., 12/15/06 350,000 367,710 Alcoa, Inc., 6% Bonds, 1/15/12 750,000 771,073 Kaiser Aluminum & Chemical Corp.: 10.875% Sr. Nts., Series B, 10/15/06(8) 250,000 196,250 12.75% Sr. Sub. Nts., 2/1/03(8) 800,000 148,000 Metallurg, Inc., 11% Sr. Nts., 12/1/07 450,000 407,250 United States Steel LLC, 10.75% Sr. Nts., 8/1/08 600,000 627,000 ------------- 2,517,283 - -------------------------------------------------------------------------------- PAPER & FOREST PRODUCTS--0.2% Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04(8) 700,000 143,500 Georgia-Pacific Corp., 8.125% Sr. Unsec. Nts., 5/15/11 600,000 575,144 Repap New Brunswick, Inc., 11.50% Sr. Sec. Nts., 6/1/04 200,000 228,500 ------------- 947,144 - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--0.8% - -------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--0.1% American Tower Corp., 9.375% Sr. Nts., 2/1/09 200,000 111,000 PanAmSat Corp., 8.50% Sr. Nts., 2/1/12(3) 300,000 277,500 WorldCom, Inc., 6.95% Sr. Unsec. Nts., 8/15/28(1,8) 900,000 139,500 XO Communications, Inc., 0%/12.25% Sr. Unsec. Disc. Nts., 6/1/09(1,8,10) 350,000 7,000 ------------- 535,000 - -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--0.7% American Cellular Corp., 9.50% Sr. Sub. Nts., 10/15/09 700,000 129,500 Crown Castle International Corp., 9% Sr. Nts., 5/15/11 500,000 307,500 Leap Wireless International, Inc.: 0%/14.50% Sr. Unsec. Disc. Nts., 4/15/10(10) 300,000 16,500 12.50% Sr. Nts., 4/15/10 400,000 46,000 Millicom International Cellular SA, 13.50% Sr. Disc. Nts., 6/1/06 1,250,000 443,750 Nextel Communications, Inc.: 0%/9.95% Sr. Disc. Nts., 2/15/08(10) 200,000 96,500 9.375% Sr. Unsec. Nts., 11/15/09 400,000 204,000 12% Sr. Unsec. Nts., 11/1/08 250,000 138,125 11 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE ACCOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES Continued Omnipoint Corp., 11.50% Sr. Nts., 9/15/09(3) $ 250,000 $ 251,250 Orbcomm Global LP (Escrow), 8/15/04 200,000 -- Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 750,000 348,750 Tritel PCS, Inc., 10.375% Sr. Sub. Nts., 1/15/11 262,000 239,730 Triton PCS, Inc., 8.75% Sr. Unsec. Sub. Nts., 11/15/11 400,000 248,000 Vodafone Group plc, 7.75% Unsec. Unsub. Nts., 2/15/10 400,000 426,042 VoiceStream Wireless Corp., 10.375% Sr. Unsec. Nts., 11/15/09 660,000 636,900 ------------- 3,532,547 - -------------------------------------------------------------------------------- UTILITIES--0.3% - -------------------------------------------------------------------------------- ELECTRIC UTILITIES--0.2% AES Corp. (The), 8.875% Sr. Unsec. Nts., 2/15/11 400,000 250,000 Calpine Corp.: 8.50% Sr. Unsec. Nts., 2/15/11 1,000,000 675,000 8.75% Sr. Nts., 7/15/07 300,000 211,500 ------------- 1,136,500 - -------------------------------------------------------------------------------- MULTI-UTILITIES--0.1% Dynegy Holdings, Inc., 8.75% Sr. Nts., 2/15/12 250,000 186,574 ------------- Total Non-Convertible Corporate Bonds and Notes (Cost $58,501,591) 53,303,088 - -------------------------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES--0.6% Gilat Satellite Networks Ltd., 4.25% Cv. Unsec. Sub. Nts., 3/15/05 1,500,000 285,000 Incyte Genomics, Inc., 5.50% Cv. Unsec. Nts., 2/1/07 2,500,000 1,759,375 RF Micro Devices, Inc., 3.75% Cv. Nts., 8/15/05 -- -- Vitesse Semiconductor Corp., 4% Cv. Sub. Nts., 3/15/05 1,000,000 780,000 ------------- Total Convertible Corporate Bonds and Notes (Cost $3,850,494) 2,824,375 PRINCIPAL MARKET VALUE ACCOUNT SEE NOTE 1 - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS--6.2% Repurchase agreement with DB Alex Brown LLC, 1.87%, dated 6/28/02, to be repurchased at $32,580,076 on 7/1/02, collateralized by U.S. Treasury Bonds, 6%--6.50%, 2/15/26--11/15/26, with a value of $33,296,778 (Cost $32,575,000) $32,575,000 $ 32,575,000 - -------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $506,721,283) 98.6% 519,085,693 - -------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.4 7,557,072 ----------------------------- NET ASSETS 100.0% $526,642,765 ============================= FOOTNOTES TO STATEMENT OF INVESTMENTS Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: AUD Australian Dollar DKK Danish Krone GBP British Pound Sterling ZAR South African Rand CAD Canadian Dollar 1. Non-income producing security. 12 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA FOOTNOTES TO STATEMENT OF INVESTMENTS Continued 2. A sufficient amount of liquid assets has been designated to cover outstanding written options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM MARKET VALUE SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------- Affymetrix, Inc. 120 8/19/02 $ 60.00 $ 33,238 $ -- Anthem, Inc. 74 9/23/02 60.00 24,198 68,820 Anthem, Inc. 100 12/23/02 80.00 51,699 28,000 Bank of America Corp. 180 11/18/02 75.00 50,759 47,700 Boeing Co. 100 8/19/02 45.00 23,699 22,000 Boeing Co. 100 8/19/02 50.00 15,700 5,000 Boeing Co. 130 8/19/02 55.00 19,110 -- Borders Group, Inc. 120 11/18/02 25.00 23,040 -- Borg-Warner Automotive, Inc. 100 7/22/02 55.00 52,199 38,000 Borg-Warner Automotive, Inc. 100 10/21/02 65.00 49,824 25,000 Boston Scientific Corp. 280 8/19/02 25.00 66,359 131,600 Boston Scientific Corp. 280 8/19/02 30.00 41,159 44,800 Brinker International, Inc. 170 7/22/02 35.00 21,589 850 Cabot Corp. 170 7/22/02 35.00 39,526 -- Cabot Corp. 180 10/21/02 40.00 21,960 -- Callaway Golf Co. 220 11/18/02 22.50 23,540 4,400 Children's Place Retail Stores, Inc. 105 9/23/02 40.00 14,385 525 Cognex Corp. 240 8/19/02 30.00 25,680 2,400 Computer Associates International, Inc. 150 8/19/02 45.00 27,299 -- Cooper Cameron Corp. 80 8/19/02 50.00 35,759 21,600 Cox Radio, Inc., Cl. A 153 8/19/02 30.00 17,136 -- Delta Air Lines, Inc. 90 7/22/02 35.00 28,530 -- Delta Air Lines, Inc. 90 10/21/02 45.00 24,930 -- Devon Energy Corp. 100 7/22/02 45.00 30,859 46,000 Devon Energy Corp. 88 10/21/02 55.00 16,016 14,520 Edison International 410 10/21/02 17.50 47,969 49,200 El Paso Corp. 160 7/22/02 55.00 31,769 -- Engelhard Corp. 160 10/21/02 35.00 13,440 800 Federated Department Stores, Inc. 125 8/19/02 42.50 58,373 11,875 Federated Department Stores, Inc. 175 11/18/02 47.50 57,662 17,500 General Motors Corp., Cl. H 360 9/23/02 17.50 51,119 -- Hasbro, Inc. 900 10/21/02 17.50 91,799 9,000 Hercules, Inc. 450 9/23/02 12.50 42,299 20,250 Human Genome Sciences, Inc. 80 7/22/02 45.00 6,720 -- International Business Machines Corp. 184 10/21/02 140.00 20,608 -- International Flavors & Fragrances, Inc. 128 8/19/02 35.00 16,256 7,680 Intuit, Inc. 50 10/21/02 50.00 14,850 25,500 Johnson & Johnson 150 7/22/02 65.00 26,174 750 Jones Apparel Group, Inc. 235 8/19/02 35.00 94,215 79,900 KLA-Tencor Corp. 114 9/23/02 75.00 57,797 -- KLA-Tencor Corp. 140 9/23/02 100.00 26,180 -- MGM Mirage, Inc. 110 9/23/02 40.00 23,870 8,250 Millennium Pharmaceuticals, Inc. 170 8/19/02 30.00 26,690 -- Millennium Pharmaceuticals, Inc. 180 11/18/02 45.00 13,320 -- Murphy Oil Corp. 126 7/22/02 85.00 74,682 25,200 National Semiconductor Corp. 320 8/19/02 35.00 88,639 32,000 National Semiconductor Corp. 320 11/18/02 45.00 63,039 17,600 Nike, Inc., Cl. B 52 7/22/02 65.00 16,743 -- Nike, Inc., Cl. B 52 10/21/02 75.00 9,984 1,300 Noble Corp. 126 1/20/03 50.00 27,342 18,900 Noble Drilling Corp. 120 9/23/02 45.00 34,439 16,200 Peoplesoft, Inc. 150 7/22/02 50.00 89,547 -- Peoplesoft, Inc. 150 7/22/02 47.50 19,050 -- Praxair, Inc. 70 7/22/02 60.00 21,489 1,750 Praxair, Inc. 140 10/21/02 65.00 31,593 10,500 SBC Communications, Inc. 105 10/21/02 45.00 9,870 525 Swift Transportation Co., Inc. 180 10/21/02 25.00 43,034 22,500 Synopsys, Inc. 350 9/23/02 60.00 121,448 96,250 Talbots, Inc. (The) 90 8/19/02 45.00 26,472 -- Teradyne, Inc. 140 7/22/02 45.00 21,279 --
13 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS Continued 2. Outstanding written options continued
CONTRACTS EXPIRATION EXERCISE PREMIUM MARKET VALUE SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1 - -------------------------------------------------------------------------------------------------------------------------------- Teradyne, Inc. 320 10/21/02 $50.00 $ 84,139 $ -- Tiffany & Co. 60 8/19/02 37.50 14,820 5,700 Tiffany & Co. 60 11/18/02 42.50 15,720 6,000 Titan Corp. (The) 400 7/22/02 25.00 51,355 -- Transocean Sedco Forex, Inc. 120 11/18/02 45.00 14,040 7,200 Tyco International Ltd. 240 10/21/02 47.50 24,480 -- Unocal Corp. 180 10/21/02 40.00 40,859 13,500 Veritas Software Corp. 70 8/19/02 65.00 34,089 -- Waters Corp. 88 8/19/02 45.00 15,136 -- Waters Corp. 88 8/19/02 50.00 23,055 -- Yahoo!, Inc. 490 7/22/02 30.00 46,058 -- - -------------------------------------------------------------------------------------------------------------------------------- $2,561,699 $1,007,045 ================================= 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 $7,856,597 or 1.49% of the Fund's net assets as of June 30, 2002. 4. 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. 5. Identifies issues considered to be illiquid--See Note 7 of Notes to Financial Statements. 6. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. 7. Zero coupon bond reflects effective yield on the date of purchase. 8. Issuer is in default. 9. Represents the current interest rate for a variable or increasing rate security. 10. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 14 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES Unaudited - --------------------------------------------------------------------------------
June 30, 2002 - -------------------------------------------------------------------------------- ASSETS Investments, at value (cost $506,721,283)-- see accompanying statement $519,085,693 - ------------------------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold 10,063,718 Interest, dividends and principal paydowns 3,493,955 Shares of beneficial interest sold 205,789 Other 3,213 Total assets 532,852,368 - ------------------------------------------------------------------------------------------------------------- LIABILITIES Bank overdraft 528,910 - ------------------------------------------------------------------------------------------------------------- Options written, at value (premiums received $2,561,699) 1,007,045 - ------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 3,887,028 Shares of beneficial interest redeemed 722,495 Shareholder reports 53,301 Transfer and shareholder servicing agent fees 1,508 Trustees' compensation 487 Distribution and service plan fees 56 Other 8,773 -------------- Total liabilities 6,209,603 - ------------------------------------------------------------------------------------------------------------- NET ASSETS $526,642,765 - ------------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS Par value of shares of beneficial interest $ 38,563 - ------------------------------------------------------------------------------------------------------------- Additional paid-in capital 520,895,536 - ------------------------------------------------------------------------------------------------------------- Undistributed net investment income 9,145,359 - ------------------------------------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (17,366,100) - ------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 13,929,407 -------------- NET ASSETS $526,642,765 ============== - ------------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE Non-Service shares: Net asset value, redemption price per share and offering price per share (based on net assets of $526,223,465 and 38,532,771 shares of beneficial interest outstanding) $13.66 - ------------------------------------------------------------------------------------------------------------- Service shares: Net asset value, redemption price per share and offering price per share (based on net assets of $419,300 and 30,720 shares of beneficial interest outstanding) $13.65
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 15 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS Unaudited - --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2002 - -------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest $ 9,569,586 - -------------------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $53,087) 2,135,960 -------------- Total income 11,705,546 - -------------------------------------------------------------------------------------------- EXPENSES Management fees 2,042,776 - -------------------------------------------------------------------------------------------- Shareholder reports 11,284 - -------------------------------------------------------------------------------------------- Custodian fees and expenses 10,106 - -------------------------------------------------------------------------------------------- Trustees' compensation 8,135 - -------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees 6,495 - -------------------------------------------------------------------------------------------- Distribution and service plan fees--Service shares 56 - -------------------------------------------------------------------------------------------- Other 37,591 -------------- Total expenses 2,116,443 Less reduction to custodian expenses (1,599) -------------- Net expenses 2,114,844 - -------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 9,590,702 - -------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investments (including premiums on options exercised) (10,758,219) Closing and expiration of option contracts written 1,900,732 Foreign currency transactions (2,965,467) -------------- Net realized loss (11,822,954) - -------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments (43,754,599) Translation of assets and liabilities denominated in foreign currencies 5,487,652 -------------- Net change (38,266,947) -------------- Net realized and unrealized loss (50,089,901) - -------------------------------------------------------------------------------------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(40,499,199) ==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 16 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS YEAR ENDED ENDED JUNE 30, 2002 DECEMBER 31, (UNAUDITED) 2001 - --------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 9,590,702 $ 20,489,430 - --------------------------------------------------------------------------------------------------------------- Net realized gain (loss) (11,822,954) 2,713,633 - --------------------------------------------------------------------------------------------------------------- Net change in unrealized depreciation (38,266,947) (11,868,642) ------------------------------- Net increase (decrease) in net assets resulting from operations (40,499,199) 11,334,421 - --------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income: Non-Service shares (19,151,437) (22,752,705) Service shares -- -- - --------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Non-Service shares (7,948,868) (30,390,350) Service shares -- -- - --------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS Net increase in net assets resulting from beneficial interest transactions: Non-Service shares 780,058 45,543,527 Service shares 429,474 -- - --------------------------------------------------------------------------------------------------------------- NET ASSETS Total increase (decrease) (66,389,972) 3,734,893 - --------------------------------------------------------------------------------------------------------------- Beginning of period 593,032,737 589,297,844 ------------------------------- End of period (including undistributed net investment income of $9,145,359 and $18,706,094, respectively) $526,642,765 $593,032,737 ===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 17 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED JUNE 30, 2002 DECEMBER 31, NON-SERVICE SHARES (UNAUDITED) 2001 2000 1999 1998 1997 - --------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $ 15.40 $ 16.55 $ 17.46 $ 17.05 $ 17.01 $ 15.63 - --------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .26 .53 .72 .82 .71 .62 Net realized and unrealized gain (loss) (1.28) (.19) .38 1.04 .42 1.95 --------------------------------------------------------------------------------- Total from investment operations (1.02) .34 1.10 1.86 1.13 2.57 - --------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.51) (.64) (.82) (.59) (.16) (.61) Distributions from net realized gain (.21) (.85) (1.19) (.86) (.93) (.58) --------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.72) (1.49) (2.01) (1.45) (1.09) (1.19) - --------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 13.66 $ 15.40 $ 16.55 $ 17.46 $ 17.05 $ 17.01 ================================================================================= - --------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) (7.00)% 2.22% 6.44% 11.80% 6.66% 17.22% - --------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $526,223 $593,033 $589,298 $578,783 $622,333 $637,545 - --------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $570,515 $599,324 $566,724 $593,151 $640,131 $564,369 - --------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(2) Net investment income 3.39% 3.42% 4.36% 4.46% 4.05% 3.86% Expenses 0.75% 0.76% 0.76% 0.73% 0.76%(3) 0.75%(3) - --------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 12% 30% 42% 17% 43% 42% 1. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 18 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA PERIOD ENDED JUNE 30, 2002(1) SERVICE SHARES (UNAUDITED) - --------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $ 14.51 - --------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .08 Net realized and unrealized loss (.94) --------- Total from investment operations (.86) - --------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- Distributions from net realized gain -- --------- Total dividends and/or distributions to shareholders -- - --------------------------------------------------------------------- Net asset value, end of period $ 13.65 ========= - --------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(2) (5.93)% - --------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $419 - --------------------------------------------------------------------- Average net assets (in thousands) $157 ===================================================================== Ratios to average net assets:(3) Net investment income 9.87% Expenses 0.96% - --------------------------------------------------------------------- Portfolio turnover rate 12% 1. For the period from May 1, 2002 (inception of offering) to June 30, 2002. 2. Assumes an investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized for periods of less than one full year. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 19 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Multiple Strategies Fund/VA (the Fund) is a separate series of Oppenheimer Variable Account Funds (the Trust), an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund's investment objective is to seek a high total investment return, which includes current income and capital appreciation in the value of its shares. The Trust's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers two classes of shares. Both classes are sold at their offering price, which is the net asset value per share, to separate investment accounts of participating insurance companies as an underlying investment for variable life insurance policies, variable annuity contracts or other investment products. The class of shares designated as Service shares is subject to a distribution and service plan. All classes of shares have identical rights and voting privileges. Earnings, net assets and net asset value per share may differ by minor amounts due to each class having its own expenses directly attributable to that class. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities (including restricted securities) for which quotations are not readily available are valued primarily using dealer-supplied valuations, a portfolio pricing service authorized by the Board of Trustees, or at their fair value. Fair value is determined in good faith under consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- SECURITY CREDIT RISK. The Fund invests 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 Fund may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. As of June 30, 2002, securities with an aggregate market value of $4,760,125, representing 0.90% of the Fund's net assets, were in default. - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. 20 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. The Fund, along with other affiliated entities managed by OFI, may transfer uninvested cash balances into one or more joint repurchase agreement accounts. These balances are invested in one or more repurchase agreements, secured by U.S. government securities. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to 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 capital loss carryforwards, if any, to shareholders. As of June 30, 2002, the Fund had available for federal income tax purposes an estimated unused capital loss carryforward of $14,133,114. This estimated capital loss carryforward represents losses deferred under tax accounting rules to the current fiscal year and increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. - -------------------------------------------------------------------------------- CLASSIFICATION OF DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. 21 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED JUNE 30, 2002 YEAR ENDED DECEMBER 31, 2001(1) SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------------------- NON-SERVICE SHARES Sold 1,941,696 $ 28,697,855 6,369,169 $ 100,976,185 Dividends and/or distributions reinvested 1,834,820 27,100,305 3,507,792 53,143,055 Redeemed (3,756,357) (55,018,101) (6,967,146) (108,575,713) ------------------------------------------------------------------ Net increase 20,159 $ 780,058 2,909,815 $ 45,543,527 ================================================================== - ----------------------------------------------------------------------------------------------------------------------------- SERVICE SHARES Sold 30,732 $ 429,639 -- $ -- Dividends and/or distributions reinvested -- -- -- -- Redeemed (12) (165) -- -- ------------------------------------------------------------------ Net increase 30,720 $ 429,474 -- $ -- ==================================================================
1. For the six months ended June 30, 2002, for Non-Service shares and for the period from May 1, 2002 (inception of offering) to June 30, 2002, for Service shares. - -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended June 30, 2002, were $59,603,118 and $82,725,069, respectively. - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Trust. The annual fees are 0.75% of the first $200 million of average annual net assets, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million and 0.60% of average annual net assets over $800 million. The Fund's management fee for the six months ended June 30, 2002 was an annualized rate of 0.72%. - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a $19.75 per account fee. Additionally, funds offered in variable annuity separate accounts are subject to minimum fees of $5,000 for assets of less than $10 million and $10,000 for assets of $10 million or more. The Fund is subject to the minimum fee in the event that the per account fee does not equal or exceed the applicable minimum fee. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees up to an annual rate of 0.25% of average net assets per annum of funds offered in variable annuity separate accounts. This undertaking may be amended or withdrawn at any time. 22 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN FOR SERVICE SHARES. The Fund has adopted a Distribution and Service Plan for Service shares to pay OppenheimerFunds Distributor, Inc., the Distributor, for distribution-related services for the Fund's Service shares. Under the Plan, payments are made quarterly at an annual rate of up to 0.25% of the average annual net assets of the Service shares of the Fund. - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts for operational purposes and to seek to protect against adverse exchange rate fluctuations. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates as provided by a reliable bank, dealer or pricing service. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign currency transactions. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. - -------------------------------------------------------------------------------- 6. OPTION ACTIVITY The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a note to the Statement of Investments. Options written are reported as a liability in the Statement of Assets and Liabilities. Realized gains and losses are reported in the Statement of Operations. 23 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 6. OPTION ACTIVITY Continued The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Written option activity for the six months ended June 30, 2002 was as follows: CALL OPTIONS ------------------------------ NUMBER OF AMOUNT OF CONTRACT DESCRIPTION CONTRACTS PREMIUMS - ------------------------------------------------------------------------------- Options outstanding as of December 31, 2001 11,211 $ 2,712,380 Options written 10,042 1,995,884 Options closed or expired (8,003) (1,864,301) Options exercised (842) (282,264) ------------------------------ Options outstanding as of June 30, 2002 12,408 $2,561,699 ============================== - -------------------------------------------------------------------------------- 7. ILLIQUID SECURITIES As of June 30, 2002, investments in securities included issues that are illiquid. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 15% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid securities. The aggregate value of illiquid securities subject to this limitation as of June 30, 2002 was $1,236,324, which represents 0.23% of the Fund's net assets. 24 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS ================================================================================ TRUSTEES AND OFFICERS James C. Swain, Trustee, CEO and Chairman of the Board John V. Murphy, President and Trustee William L. Armstrong, Trustee Robert G. Avis, Trustee George C. Bowen, Trustee Edward L. Cameron, Trustee Jon S. Fossel, Trustee Sam Freedman, Trustee Beverly L. Hamilton, Trustee Robert J. Malone, Trustee F. William Marshall, Jr., Trustee Richard H. Rubinstein, Vice President David P. Negri, Vice President George Evans, Vice President Michael Levine, Vice President Susan Switzer, Vice President Robert G. Zack, Vice President and Secretary Brian W. Wixted, Treasurer Katherine P. Feld, Assistant Secretary Kathleen T. Ives, Assistant Secretary Denis R. Molleur, Assistant Secretary ================================================================================ INVESTMENT ADVISOR OppenheimerFunds, Inc. ================================================================================ DISTRIBUTOR OppenheimerFunds Distributor, Inc. ================================================================================ TRANSFER AGENT OppenheimerFunds Services ================================================================================ INDEPENDENT AUDITORS Deloitte & Touche LLP ================================================================================ LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C. The financial statements included herein have been taken from the records of the Fund without examination of those records by the independent auditors. For more complete information about Oppenheimer Multiple Strategies Fund/VA, please refer to the Prospectus. To obtain a copy or for more information on how to obtain a separate account prospectus, call OppenheimerFunds, Inc. at 1.800.981.2871. 25 OPPENHEIMER MULTIPLE STRATEGIES FUND/VA This page intentionally left blank. This page intentionally left blank. [GRAPHIC OMITTED] OPPENHEIMER FUNDS LOGO ART [COPYRIGHT]Copyright 2002 OppenheimerFunds, Inc. All rights reserved. -----END PRIVACY-ENHANCED MESSAGE-----