-----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, EPzrGK39SUB4cgH/Ri//u4u7N7mpKmgqgsEiQewrXGuMNq918ZDLMIfWYZKZvBrL wI0O57APOnHbwl4sJ2UeEw== 0000935069-03-001093.txt : 20030827 0000935069-03-001093.hdr.sgml : 20030827 20030827155058 ACCESSION NUMBER: 0000935069-03-001093 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030827 EFFECTIVENESS DATE: 20030827 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-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-04108 FILM NUMBER: 03868623 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 2: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER VARIABLE LIFE FUNDS DATE OF NAME CHANGE: 19860609 N-CSR 1 rs0265_8010vef.txt RS0265_8010VEF UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-4108 Oppenheimer Strategic Bond Fund/VA (Exact name of registrant as specified in charter) 6803 South Tucson Way, Centennial, Colorado 80112-3924 (Address of principal executive offices) (Zip code) Robert G. Zack, Esq. OppenheimerFunds, Inc. 498 Seventh Avenue, New York, New York 10018 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 -------------- Date of fiscal year end: December 31 Date of reporting period: January 1, 2003 - June 30, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS June 30, 2003 / Unaudited - -------------------------------------------------------------------------------- Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Asset-Backed Securities--4.1% American Money Management Corp., Commercial Debt Obligations Sub. Bonds, Series I, Cl. D1, 13.602%, 1/15/12 1 $ 172,858 $ 69,143 - ----------------------------------------------------------------- BMW Vehicle Owner Trust, Automobile Loan Certificates, Series 2003-A, Cl. A2, 1.45%, 11/25/05 1 810,000 811,988 - ----------------------------------------------------------------- Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts., Series 2003-2, Cl. A2A, 1.20%, 5/16/05 760,000 759,696 - ----------------------------------------------------------------- Caterpillar Financial Asset Trust, Equipment Loan Pass-Through Certificates, Series 2003-A, Cl. A2, 1.25%, 10/25/05 460,000 459,978 - ----------------------------------------------------------------- Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates: Series 2003-A, Cl. AF1, 1.836%, 10/25/17 239,999 240,205 Series 2003-B, Cl. AF1, 1.64%, 2/25/18 280,000 280,000 - ----------------------------------------------------------------- Chase Funding Mortgage Loan Asset-Backed Certificates, Home Equity Mtg. Obligations, Series 2003-3, Cl. 1A1, 1.40%, 8/25/17 2 407,863 407,806 - ----------------------------------------------------------------- Chase Manhattan Auto Owner Trust, Automobile Loan Pass- Through Certificates, Series 2003-A, Cl. A2, 1.26%, 1/16/06 1 290,000 290,265 - ----------------------------------------------------------------- CitiFinancial Mortgage Securities, Inc., Home Equity Collateralized Mtg. Obligations: Series 2003-1, Cl. AF1, 1.94%, 1/25/33 1 551,553 552,427 Series 2003-2, Cl. AF1, 1.128%, 5/25/33 2 540,000 540,000 - ----------------------------------------------------------------- Conseco Finance Securitizations Corp., Home Equity Loan Pass- Through Certificates, Series 2001-D, Cl. M2, 2.93%, 11/15/32 2 3,000,000 2,915,075 - ----------------------------------------------------------------- Consumer Credit Reference Index Securities Program, Credit Card Asset-Backed Certificates, Series 2002-B, Cl. FX, 10.421%, 3/22/07 1 500,000 527,662 - ----------------------------------------------------------------- Embarcadero Aircraft Securitization Trust, Airplane Collateral Obligations, Series 2000-A, Cl. B, 0.244%, 8/15/25 1,2 1,820,063 18,201 - ----------------------------------------------------------------- Ford Credit Auto Owner Trust, Automobile Installment Sales, Series 2003-A, Cl. A2A, 1.62%, 8/15/05 630,000 631,592 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Asset-Backed Securities Continued Honda Auto Receivables Owner Trust, Automobile Receivables Obligations, Series 2003-1, Cl. A2, 1.46%, 9/19/05 $ 690,000 $ 691,368 - ----------------------------------------------------------------- Impac Secured Assets CMN Owner Trust, Home Equity Collateralized Mtg. Obligations, Series 2001-5, Cl. M1, 7.25%, 8/25/31 2,197,000 2,303,004 - ----------------------------------------------------------------- Lehman ABS Manufactured Housing Contract, Commercial Mtg. Pass-Through Certificates, Series 2001-B, Cl. A4, 5.27%, 9/15/18 3,000,000 3,187,421 - ----------------------------------------------------------------- NC Finance Trust, Collateralized Mtg. Obligations, Series 1999-I, Cl. ECFD, 8.75%, 12/25/28 1 74,242 25,242 - ----------------------------------------------------------------- Nissan Auto Receivables Owner Trust, Auto Receivable Nts.: Series 2003-A, Cl. A2, 1.45%, 5/16/05 1 1,000,000 1,001,576 Series 2003-B, Cl. A2, 1.20%, 11/15/05 1,110,000 1,110,000 - ----------------------------------------------------------------- Principal Residential Mortgage Capital Resources Trust, Real Estate Mtg. Investment Conduit Participation Certificates, Series 2000-1, Cl. B, 2.754%, 6/20/05 1,2 1,000,000 986,875 - ----------------------------------------------------------------- Residential Funding Mortgage Securities II, Inc., Home Equity Loan Pass-Through Certificates, Series 2003-HS1, Cl. AI2, 1.135%, 1/25/33 1,2 855,181 855,269 - ----------------------------------------------------------------- Toyota Auto Receivables Owner Trust, Automobile Mtg.-Backed Obligations, Series 2003-A, Cl. A2, 1.28%, 8/15/05 1,130,000 1,130,820 - ----------------------------------------------------------------- Volkswagen Auto Loan Enhanced Trust, Automobile Loan Receivables, Series 2003-1, Cl. A2, 1.11%, 12/20/05 1,420,000 1,419,390 --------------- Total Asset-Backed Securities (Cost $22,922,250) 21,215,003 - ----------------------------------------------------------------- Mortgage-Backed Obligations--19.9% Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates: Series 1996-D2, Cl. A3, 7.498%, 2/14/29 2 3,000,000 3,286,791 Series 1996-MD6, Cl. A7, 7.962%, 11/13/29 2 2,000,000 1,740,291 Series 1997-D4, Cl. B1, 7.525%, 4/14/29 375,000 372,856 3 | OPPENHEIMER STRATEGIC BOND FUND/VA - ----------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - ----------------------------------------------------------------- Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Mortgage-Backed Obligations Continued Federal Home Loan Mortgage Corp., Gtd. Mtg. Pass-Through Participation Certificates: 11%, 11/1/14 $ 171,130 $ 192,165 Series 151, Cl. F, 9%, 5/15/21 232,504 236,490 - ----------------------------------------------------------------- Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security, Series 208, Cl. IO, (55.81)%, 6/1/30 3 2,577,833 291,781 - ----------------------------------------------------------------- Federal Home Loan Mortgage Corp., Real Estate Mtg. Investment Conduit Multiclass Certificates, Series 2551, Cl. FD, 1.71%, 1/15/33 2 455,918 456,842 - ----------------------------------------------------------------- Federal National Mortgage Assn.: 6%, 7/25/33 4 36,069,000 37,489,217 6.50%, 5/1/29-5/1/32 3,460,266 3,610,138 6.50%, 7/1/33 4 5,489,000 5,722,282 7%, 7/14/33-8/25/33 4 21,055,000 22,176,352 7.50%, 8/1/25 67,869 72,530 8.50%, 7/1/32 176,606 189,898 - ----------------------------------------------------------------- Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates: Trust 1993-202, Cl. PH, 6.50%, 2/25/22 5 2,609,601 2,633,613 Trust 2002-77, Cl. WF, 1.508%, 12/18/32 2 713,939 715,553 - ----------------------------------------------------------------- Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Trust 294, Cl. 2, (52.336)%, 2/1/28 3 464,433 56,964 Trust 313, Cl. 2, (96.017)%, 6/25/31 3 3,345,833 369,676 - ----------------------------------------------------------------- FHLMC Structured Pass-Through Securities, Collateralized Mtg. Obligations: Series H002, Cl. A2, 1.861%, 12/15/06 318,059 317,773 Series H003, Cl. A2, 1.88%, 1/15/07 988,859 998,118 Series H006, Cl. A1, 1.724%, 4/15/08 1 544,552 545,753 - ----------------------------------------------------------------- First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates: Series 1997-CHL1, Cl. D, 7.939%, 4/29/39 1,2 350,000 359,679 Series 1997-CHL1, Cl. E, 9.939%, 4/29/39 1,2 600,000 526,594 - ----------------------------------------------------------------- GMAC Commercial Mortgage Securities, Inc., Interest-Only Stripped Mtg.-Backed Security Pass-Through Certificates, Series 1997-C1, Cl. X, 8.35%, 7/15/27 3 3,288,881 189,854 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Mortgage-Backed Obligations Continued GMAC Commercial Mortgage Securities, Inc., Mtg. Pass-Through Certificates: Series 1997-C2, Cl. F, 6.75%, 4/15/29 1 $ 250,000 $ 75,000 Series 1998-C1, Cl. F, 7.172%, 5/15/30 2 1,800,000 1,750,588 - ----------------------------------------------------------------- Government National Mortgage Assn.: 5.625%, 11/20/25 2 34,497 35,518 7%, 3/15/28-7/15/28 3,201,358 3,387,294 7.50%, 2/15/27 432,186 460,070 8%, 11/15/25-5/15/26 468,898 508,671 - ----------------------------------------------------------------- Government National Mortgage Assn., Gtd. Multiclass Mtg. Participation Certificates, Series 1999-27, Cl. PQ, 7.50%, 8/16/28 8,220,125 8,519,742 - ----------------------------------------------------------------- Lehman Structured Securities Corp., Collateralized Mtg. Obligations, Series 2001-GE4, Cl. A, 8.946%, 10/25/30 2 434,507 442,654 - ----------------------------------------------------------------- Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates, Series 1995-C2, Cl. D, 7.733%, 6/15/21 2 191,990 211,391 - ----------------------------------------------------------------- Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates: Series 1996-C1, Cl. F, 7.457%, 2/15/28 2,6 162,744 149,641 Series 1997-RR, Cl. D, 7.642%, 4/30/39 2,6 450,024 429,845 Series 1997-RR, Cl. E, 7.642%, 4/30/39 2,6 300,016 251,153 Series 1997-RR, Cl. F, 7.642%, 4/30/39 2,6 600,032 421,490 Series 1997-XL1, Cl. G, 7.695%, 10/3/30 6 390,000 418,398 - ----------------------------------------------------------------- Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass- Through Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 556,000 669,902 - ----------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Inc., Commercial Mtg. Pass-Through Certificates: Series 1996-B, Cl. 1, 6.893%, 4/25/26 1,2 114,729 102,109 Series 1996-C1, Cl. F, 8.467%, 1/20/06 1,2 1,000,000 976,875 - ----------------------------------------------------------------- Structured Asset Securities Corp., Commercial Mtg. Obligations, Series 1995-C4, Cl. E, 8.964%, 6/25/26 1,2 6,204 6,205 4 | OPPENHEIMER STRATEGIC BOND FUND/VA Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Mortgage-Backed Obligations Continued Washington Mutual Mortgage Securities Corp., Collateralized Mtg. Obligations, Pass-Through Certificates: Series 2002-AR19, Cl. A1, 1.77%, 1/25/33 2 $ 389,310 $ 389,752 Series 2003-AR7, Cl. A1, 1.507%, 8/25/33 1,070,000 1,070,000 - ----------------------------------------------------------------- Wells Fargo Mortgage-Backed Securities Trust, Collateralized Mtg. Obligations, Series 2003-A, Cl. A1, 1.79%, 2/25/33 1 46,227 46,288 --------------- Total Mortgage-Backed Obligations (Cost $103,589,210) 102,873,796 - ----------------------------------------------------------------- U.S. Government Obligations--8.6% Federal Home Loan Mortgage Corp. Unsec. Nts., 4.50%, 1/15/13 5,000,000 5,262,635 - ----------------------------------------------------------------- Federal National Mortgage Assn. Unsec. Nts.: 4.25%, 7/15/07 8,840,000 9,521,476 7.25%, 5/15/30 4,000,000 5,289,636 - ----------------------------------------------------------------- U.S. Treasury Bonds: 4.375%, 8/15/12 1,333,000 1,429,696 6.25%, 5/15/30 755,000 940,152 8.75%, 5/15/17 1,660,000 2,485,267 8.875%, 2/15/19 735,000 1,125,871 11.875%, 11/15/03 500,000 520,293 STRIPS, 4.96%, 2/15/16 7 171,000 99,211 STRIPS, 5.48%, 11/15/27 7 408,000 121,283 - ----------------------------------------------------------------- U.S. Treasury Nts.: 1.625%, 3/31/05 4,500,000 4,532,346 1.75%, 12/31/04 4,450,000 4,489,983 2.625%, 5/15/08 1,134,000 1,144,721 4.875%, 2/15/12 364,000 404,723 5.875%, 2/15/04 8 2,300,000 2,370,348 6.75%, 5/15/05 9 2,700,000 2,974,325 7%, 7/15/06 1,760,000 2,034,726 --------------- Total U.S. Government Obligations (Cost $43,267,503) 44,746,692 - ----------------------------------------------------------------- Foreign Government Obligations--25.2% - ----------------------------------------------------------------- Argentina--0.4% Argentina (Republic of) Bonds: 1.369%, 8/3/12 2 2,195,000 1,284,075 Series PR12, 2%, 1/3/16 1,10,11 [ARP] 15,300 3,302 - ----------------------------------------------------------------- Argentina (Republic of) Disc. Bonds, 2.345%, 3/31/23 10,11 260,000 149,500 - ----------------------------------------------------------------- Argentina (Republic of) Par Bonds, 5.984%, 3/31/23 10 565,000 300,863 - ----------------------------------------------------------------- Buenos Aires (Province of) Bonds, Bonos de Consolidacion de Deudas, Series PBA1, 3.257%, 4/1/07 1,10 [ARP] 106,202 31,665 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Argentina Continued JPMorgan Chase Bank, Argentina (Republic of) Treasury Bills, 8.84%, 2/20/04 1 [ARP] 35,000 $ 11,886 --------------- 1,781,291 - ----------------------------------------------------------------- Austria--0.7% Austria (Republic of) Nts.: 5.50%, 10/20/07 [EUR] 825,000 1,048,409 Series 98-1, 5%, 1/15/08 [EUR] 1,190,000 1,483,648 Series 98-3, 3.90%, 10/20/05 [EUR] 190,000 226,372 - ----------------------------------------------------------------- Austria (Republic of) Sr. Unsec. Unsub. Nts., Series 1, 5%, 7/15/12 [EUR] 529,000 665,236 --------------- 3,423,665 - ----------------------------------------------------------------- Belgium--1.4% Belgium (Kingdom of) Bonds: 5%, 9/28/11 [EUR] 540,000 677,841 Series 19, 6.50%, 3/31/05 [EUR] 1,180,000 1,455,327 Series 26, 6.25%, 3/28/07 [EUR] 3,170,000 4,091,299 Series 28, 5.75%, 3/28/08 [EUR] 755,000 971,825 --------------- 7,196,292 - ----------------------------------------------------------------- Brazil--4.4% Brazil (Federal Republic of) Bonds: 11.50%, 3/12/08 1,180,000 1,239,000 Series 15 yr., 2.188%, 4/15/09 2 1,023,529 862,324 - ----------------------------------------------------------------- Brazil (Federal Republic of) Debt Conversion Bonds, Series 18 yr., 2.188%, 4/15/12 2 2,795,000 2,103,237 - ----------------------------------------------------------------- Brazil (Federal Republic of) Disc. Bonds, 2.125%, 4/15/24 2 14,765,000 10,999,925 - ----------------------------------------------------------------- Brazil (Federal Republic of) Nts., 12%, 4/15/10 1,840,000 1,920,960 - ----------------------------------------------------------------- Brazil (Federal Republic of) Par Bonds, Series 30 yr., 6%, 4/15/24 2 6,490,000 5,305,575 - ----------------------------------------------------------------- Brazil (Federal Republic of) Unsec. Unsub. Bonds: 11%, 8/17/39 345,000 315,675 11.25%, 7/26/07 105,000 109,725 --------------- 22,856,421 - ----------------------------------------------------------------- Canada--0.4% Canada (Government of) Bonds: 5.75%, 9/1/06 [CAD] 2,020,000 1,596,019 Series WL43, 5.75%, 6/1/29 [CAD] 785,000 633,489 --------------- 2,229,508 - ----------------------------------------------------------------- Colombia--0.3% Colombia (Republic of) Unsec. Unsub. Bonds, 8.375%, 2/15/27 1,725,000 1,638,750 5 | OPPENHEIMER STRATEGIC BOND FUND/VA - ----------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - ----------------------------------------------------------------- Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Denmark--0.3% Denmark (Kingdom of) Nts., 4%, 8/15/08 [DKK] 8,005,000 $ 1,284,739 - ----------------------------------------------------------------- Dominican Republic--0.1% Dominican (Republic of) Unsec. Unsub. Bonds, 9.50%, 9/27/06 346,000 329,565 - ----------------------------------------------------------------- Ecuador--0.1% Ecuador (Republic of) Unsec. Bonds, 6%, 8/15/30 2 913,000 559,212 - ----------------------------------------------------------------- France--1.0% France (Government of) Obligations Assimilables du Tresor Bonds: 5%, 4/25/12 [EUR] 1,060,000 1,332,890 5.50%, 10/25/07 [EUR] 315,000 399,712 - ----------------------------------------------------------------- France (Government of) Treasury Nts.: 3.50%, 1/12/05 [EUR] 940,000 1,102,716 3.75%, 1/12/07 [EUR] 2,065,000 2,460,932 --------------- 5,296,250 - ----------------------------------------------------------------- Germany--2.5% Germany (Republic of) Bonds: 5.375%, 1/4/10 [EUR] 1,285,000 1,646,065 Series 01, 5%, 7/4/11 [EUR] 3,685,000 4,624,792 Series 139, 4%, 2/16/07 [EUR] 2,890,000 3,469,402 Series 140, 4.50%, 8/17/07 [EUR] 2,735,000 3,343,001 --------------- 13,083,260 - ----------------------------------------------------------------- Great Britain--0.5% United Kingdom Treasury Nts., 7.50%, 12/7/06 [GBP] 1,345,000 2,493,998 - ----------------------------------------------------------------- Greece--1.3% Greece (Republic of) Bonds: 3.50%, 4/18/08 [EUR] 3,555,000 4,167,400 4.60%, 5/20/13 [EUR] 1,545,000 1,868,482 5.35%, 5/18/11 [EUR] 575,000 734,833 --------------- 6,770,715 - ----------------------------------------------------------------- Guatemala--0.1% Guatemala (Republic of) Nts.: 10.25%, 11/8/11 355,000 412,688 10.25%, 11/8/11 6 250,000 290,625 --------------- 703,313 - ----------------------------------------------------------------- Italy--1.6% Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali: 4.25%, 11/1/09 [EUR] 3,605,000 4,357,142 5%, 10/15/07 [EUR] 1,550,000 1,934,388 5.25%, 8/1/11 [EUR] 1,550,000 1,974,846 --------------- 8,266,376 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Ivory Coast--0.0% Ivory Coast (Government of) Past Due Interest Bonds, 1.90%, 3/29/18 1,10,11 [FRF] 2,194,500 $ 77,796 - ----------------------------------------------------------------- Japan--1.6% Japan (Government of) Bonds: 2 yr., Series 189, 0.10%, 10/20/03 [JPY] 44,000,000 366,540 2 yr., Series 197, 0.10%, 6/21/04 [JPY] 97,000,000 808,564 4 yr., Series 58, 0.80%, 12/22/03 [JPY] 240,000,000 2,006,186 6 yr., Series 27, 1%, 9/20/04 [JPY] 401,850,000 3,386,952 10 yr., Series 172, 4.20%, 9/20/04 [JPY] 31,000,000 269,170 Series 174, 4.60%, 9/20/04 [JPY] 177,900,000 1,550,171 --------------- 8,387,583 - ----------------------------------------------------------------- Mexico--1.7% United Mexican States Bonds: Series A, 6.375%, 1/16/13 1,210,000 1,285,625 Series M5C, 10.50%, 8/24/06 [MXN] 2,690,000 293,900 - ----------------------------------------------------------------- United Mexican States Collateralized Fixed Rate Par Bonds: Series M7, 9%, 7/9/09 [MXN] 22,391,400 2,274,025 Series MI10, 9%, 12/20/12 [MXN] 9,809,000 1,028,677 - ----------------------------------------------------------------- United Mexican States Nts.: 8.125%, 12/30/19 2,575,000 2,941,937 8.375%, 1/14/11 950,000 1,140,475 --------------- 8,964,639 - ----------------------------------------------------------------- New Zealand--0.7% New Zealand (Government of) Bonds, Series 205, 6.50%, 2/15/05 [NZD] 6,055,000 3,633,838 - ----------------------------------------------------------------- Nigeria--0.1% Central Bank of Nigeria Gtd. Bonds, Series WW, 6.25%, 11/15/20 275,000 236,500 - ----------------------------------------------------------------- Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%, 1/5/10 290,921 225,262 --------------- 461,762 - ----------------------------------------------------------------- Peru--0.2% Peru (Republic of) Sr. Nts., Zero Coupon, 4.53%, 2/28/16 7 1,734,447 1,002,163 - ----------------------------------------------------------------- Philippines--0.6% Philippines (Republic of) Bonds, 9.375%, 1/18/17 790,000 869,000 - ----------------------------------------------------------------- Philippines (Republic of) Unsec. Bonds: 8.875%, 4/15/08 400,000 441,000 9.875%, 1/15/19 1,479,000 1,636,144 --------------- 2,946,144 6 | OPPENHEIMER STRATEGIC BOND FUND/VA Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Portugal--0.7% Portugal (Republic of) Obrig Do Tes Medio Prazo Unsec. Bonds, 5.375%, 6/23/08 [EUR] 1,400,000 $ 1,783,813 - ----------------------------------------------------------------- Portugal (Republic of) Obrig Do Tes Medio Prazo Unsec. Unsub. Bonds, 5.85%, 5/20/10 [EUR] 1,300,000 1,710,304 --------------- 3,494,117 - ----------------------------------------------------------------- Russia--1.2% Deutsche Bank AG, OAO Gazprom Loan Participation Nts., 9.10%, 12/17/03 1,470,000 1,488,669 - ----------------------------------------------------------------- Ministry Finance of Russia Debs.: Series V, 3%, 5/14/08 3,210,000 2,941,162 Series VI, 3%, 5/14/06 20,000 19,538 - ----------------------------------------------------------------- Russia (Government of) Unsec. Unsub. Bonds, 0%/7.50%, 3/31/30 6,12 1,390,000 1,351,775 - ----------------------------------------------------------------- Russian Federation Unsub. Nts., 5%, 3/31/30 2 574,875 558,527 --------------- 6,359,671 - ----------------------------------------------------------------- South Africa--0.3% South Africa (Republic of) Bonds, Series 153, 13%, 8/31/10 [ZAR] 9,530,000 1,527,433 - ----------------------------------------------------------------- Spain--0.6% Spain (Kingdom of) Treasury Bills, Zero Coupon, 2.02%, 10/10/03 7 [EUR] 2,675,000 3,055,095 - ----------------------------------------------------------------- Sweden--0.7% Sweden (Kingdom of) Debs., Series 1040, 6.50%, 5/5/08 [SEK] 24,660,000 3,469,088 - ----------------------------------------------------------------- The Netherlands--0.7% The Netherlands (Government of) Bonds: 4%, 7/15/05 [EUR] 175,000 207,995 5%, 7/15/11 [EUR] 675,000 849,549 Series 1, 5.75%, 2/15/07 [EUR] 2,070,000 2,624,064 --------------- 3,681,608 - ----------------------------------------------------------------- Turkey--0.8% Turkey (Republic of) Bonds, 11.75%, 6/15/10 2,400,000 2,502,000 - ----------------------------------------------------------------- Turkey (Republic of) Nts., 10.50%, 1/13/08 640,000 658,400 - ----------------------------------------------------------------- Turkey (Republic of) Sr. Unsub. Bonds, 12.375%, 6/15/09 1,015,000 1,096,200 --------------- 4,256,600 - ----------------------------------------------------------------- Ukraine--0.2% Ukraine (Government of) Bonds, 7.65%, 6/11/13 665,000 662,925 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Ukraine Continued Ukraine (Government of) Sr. Unsec. Nts., 11%, 3/15/07 $ 410,669 $ 452,762 --------------- 1,115,687 --------------- Total Foreign Government Obligations (Cost $125,151,341) 130,346,579 - ----------------------------------------------------------------- Loan Participations--0.5% Algeria (Republic of) Loan Participation Nts., 2.188%, 3/4/10 1,2 543,667 520,561 - ----------------------------------------------------------------- Deutsche Bank AG, Indonesian Rupiah Loan Participation Nts.: 2.636%, 5/21/04 1,330,000 1,193,675 2.636%, 3/25/05 695,000 595,962 2.636%, 12/14/13 795,000 536,625 --------------- Total Loan Participations (Cost $2,283,268) 2,846,823 - ----------------------------------------------------------------- Corporate Bonds and Notes--41.4% - ----------------------------------------------------------------- Consumer Discretionary--12.5% - ----------------------------------------------------------------- Auto Components--0.7% Cambridge Industries, Inc., Liquidating Trust Interests, 7/15/07 10,11 77,456 -- - ----------------------------------------------------------------- Collins & Aikman Floorcoverings, Inc., 9.75% Sr. Sub. Nts., Series B, 2/15/10 1 200,000 210,000 - ----------------------------------------------------------------- Collins & Aikman Products Co., 10.75% Sr. Nts., 12/31/11 400,000 354,000 - ----------------------------------------------------------------- Dana Corp.: 9% Unsec. Nts., 8/15/11 420,000 456,750 10.125% Nts., 3/15/10 200,000 221,500 - ----------------------------------------------------------------- Dura Operating Corp.: 9% Sr. Sub. Nts., Series B, 5/1/09 [EUR] 400,000 424,889 9% Sr. Unsec. Sub. Nts., Series D, 5/1/09 500,000 462,500 - ----------------------------------------------------------------- Metaldyne Corp., 11% Sr. Sub. Nts., 6/15/12 300,000 250,500 - ----------------------------------------------------------------- Stoneridge, Inc., 11.50% Sr. Nts., 5/1/12 600,000 675,000 - ----------------------------------------------------------------- Tenneco Automotive, Inc., 10.25% Sr. Sec. Nts., 7/15/13 6 150,000 152,625 - ----------------------------------------------------------------- United Components, Inc., 9.375% Sr. Sub. Nts., 6/15/13 6 200,000 208,500 --------------- 3,416,264 - ----------------------------------------------------------------- Automobiles--0.6% DirecTV Holdings LLC, 8.375% Sr. Nts., 3/15/13 6 800,000 896,000 7 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Automobiles Continued Ford Motor Credit Co.: 7.25% Nts., 10/25/11 $ 1,442,000 $ 1,484,784 7.375% Nts., 10/28/09 615,000 645,687 - ----------------------------------------------------------------- General Motors Acceptance Corp., 6.875% Unsec. Unsub. Nts., 8/28/12 305,000 304,796 --------------- 3,331,267 - ----------------------------------------------------------------- Hotels, Restaurants & Leisure--3.3% Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 1 100,000 35,500 - ----------------------------------------------------------------- Aztar Corp., 9% Sr. Unsec. Sub. Nts., 8/15/11 850,000 924,375 - ----------------------------------------------------------------- Boca Resorts, Inc., 9.875% Sr. Sub. Nts., 4/15/09 450,000 487,125 - ----------------------------------------------------------------- Boyd Gaming Corp., 8.75% Sr. Sub. Nts., 4/15/12 300,000 330,000 - ----------------------------------------------------------------- Coast Hotels & Casinos, Inc., 9.50% Sr. Unsec. Sub. Nts., 4/1/09 300,000 322,500 - ----------------------------------------------------------------- Dominos, Inc., 8.25% Sr. Sub. Nts., 7/1/11 6 400,000 415,000 - ----------------------------------------------------------------- Hilton Hotels Corp., 7.625% Nts., 12/1/12 600,000 660,000 - ----------------------------------------------------------------- Hollywood Park, Inc., 9.25% Sr. Unsec. Sub. Nts., Series B, 2/15/07 325,000 321,750 - ----------------------------------------------------------------- Intrawest Corp., 9.75% Sr. Nts., 8/15/08 350,000 367,063 - ----------------------------------------------------------------- Isle of Capri Casinos, Inc., 9% Sr. Sub. Nts., 3/15/12 500,000 547,500 - ----------------------------------------------------------------- John Q. Hammons Hotels, Inc., 8.875% Sr. Nts., Series B, 5/15/12 300,000 316,500 - ----------------------------------------------------------------- Jupiters Ltd., 8.50% Sr. Unsec. Nts., 3/1/06 1 400,000 442,000 - ----------------------------------------------------------------- Mandalay Resort Group, 10.25% Sr. Unsec. Sub. Nts., Series B, 8/1/07 650,000 737,750 - ----------------------------------------------------------------- MGM Mirage, Inc., 8.375% Sr. Unsec. Sub. Nts., 2/1/11 5 1,200,000 1,371,000 - ----------------------------------------------------------------- Mohegan Tribal Gaming Authority: 8% Sr. Sub. Nts., 4/1/12 400,000 434,000 8.125% Sr. Nts., 1/1/06 300,000 327,000 8.375% Sr. Sub. Nts., 7/1/11 600,000 652,500 8.75% Sr. Unsec. Sub. Nts., 1/1/09 700,000 757,750 - ----------------------------------------------------------------- Park Place Entertainment Corp., 7.875% Sr. Sub. Nts., 3/15/10 200,000 216,000 - --------------------------------------------------------------- Premier Cruise Ltd., 11% Sr. Nts., 3/15/08 1,10,11 250,000 -- - ----------------------------------------------------------------- Premier Parks, Inc., 9.75% Sr. Nts., 6/15/07 500,000 497,500 - ----------------------------------------------------------------- Prime Hospitality Corp., 8.375% Sr. Sub. Nts., 5/1/12 400,000 386,000 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Hotels, Restaurants & Leisure Continued Royal Caribbean Cruises Ltd.: 8% Sr. Unsec. Nts., 5/15/10 $ 250,000 $ 261,250 8.75% Sr. Unsub. Nts., 2/2/11 300,000 319,500 - ----------------------------------------------------------------- Six Flags, Inc.: 8.875% Sr. Nts., 2/1/10 800,000 772,000 9.75% Sr. Nts., 4/15/13 6 1,000,000 995,000 - ----------------------------------------------------------------- Starwood Hotels & Resorts Worldwide, Inc., 7.875% Sr. Nts., 5/1/12 900,000 990,000 - ----------------------------------------------------------------- Station Casinos, Inc., 9.875% Sr. Unsec. Sub. Nts., 7/1/10 800,000 884,000 - ----------------------------------------------------------------- Sun International Hotels Ltd., 8.875% Sr. Unsec. Sub. Nts., 8/15/11 700,000 761,250 - ----------------------------------------------------------------- Trump Atlantic City Associates/ Trump Atlantic City Funding, Inc., 11.25% First Mtg. Nts., 5/1/06 25,000 19,750 - ----------------------------------------------------------------- Trump Casino Holdings LLC/ Trump Casino Funding, Inc., 11.625% Nts., 3/15/10 6 350,000 336,000 - ----------------------------------------------------------------- Universal City Development Partners, 11.75% Sr. Nts., 4/1/10 1 500,000 551,250 - ----------------------------------------------------------------- Vail Resorts, Inc., 8.75% Sr. Unsec. Sub. Nts., 5/15/09 1 200,000 210,000 - ----------------------------------------------------------------- Venetian Casino Resort LLC/ Las Vegas Sands, Inc., 11% Sec. Nts., 6/15/10 400,000 453,000 --------------- 17,101,813 - ----------------------------------------------------------------- Household Durables--1.0% Beazer Homes USA, Inc., 8.375% Sr. Nts., 4/15/12 400,000 445,000 - ----------------------------------------------------------------- D.R. Horton, Inc.: 9.375% Sr. Unsec. Sub. Nts., 3/15/11 1 400,000 442,000 9.75% Sr. Sub. Nts., 9/15/10 400,000 457,000 - ----------------------------------------------------------------- Del Webb Corp., 10.25% Sr. Unsec. Sub. Debs., 2/15/10 300,000 328,500 - ----------------------------------------------------------------- KB Home: 7.75% Sr. Nts., 10/15/04 300,000 316,125 8.625% Sr. Sub. Nts., 12/15/08 250,000 285,000 9.50% Sr. Unsec. Sub. Nts., 2/15/11 400,000 454,500 - ----------------------------------------------------------------- Salton, Inc., 10.75% Sr. Unsec. Sub. Nts., 12/15/05 425,000 429,250 - ----------------------------------------------------------------- Standard Pacific Corp., 9.25% Sr. Sub. Nts., 4/15/12 1 200,000 225,500 - ----------------------------------------------------------------- WCI Communities, Inc., 9.125% Sr. Sub. Nts., 5/1/12 300,000 321,000 - ----------------------------------------------------------------- William Lyon Homes, Inc., 10.75% Sr. Nts., 4/1/13 400,000 427,000 - ----------------------------------------------------------------- Williams Scotsman, Inc., 9.875% Sr. Unsec. Nts., 6/1/07 800,000 788,000 --------------- 4,918,875 8 | OPPENHEIMER STRATEGIC BOND FUND/VA Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Internet & Catalog Retail--0.1% InterActiveCorp, 7% Nts., 1/15/13 $ 473,000 $ 545,775 - ----------------------------------------------------------------- Leisure Equipment & Products--0.0% Remington Arms Co., Inc., 10.50% Sr. Nts., 2/1/11 6 200,000 210,000 - ----------------------------------------------------------------- Media--5.6% Adelphia Communications Corp.: 7.875% Sr. Unsec. Nts., 5/1/09 10,11 350,000 213,500 10.25% Sr. Unsec. Nts., 11/1/06 10,11 400,000 246,000 10.25% Sr. Unsec. Sub. Nts., 6/15/11 10,11 400,000 258,000 10.875% Sr. Unsec. Nts., 10/1/10 10,11 400,000 250,000 - ----------------------------------------------------------------- Allbritton Communications Co., 7.75% Sr. Unsec. Sub. Nts., 12/15/12 1,200,000 1,245,000 - ----------------------------------------------------------------- AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11 500,000 520,000 - ----------------------------------------------------------------- AOL Time Warner, Inc., 6.875% Nts., 5/1/12 1,321,000 1,511,133 - ----------------------------------------------------------------- Block Communications, Inc., 9.25% Sr. Sub. Nts., 4/15/09 400,000 438,000 - ----------------------------------------------------------------- British Sky Broadcasting Group plc, 8.20% Sr. Unsec. Nts., 7/15/09 790,000 937,521 - ----------------------------------------------------------------- Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp.: 0%/9.92% Sr. Unsec. Disc. Nts., 4/1/11 12 900,000 596,250 8.625% Sr. Unsec. Nts., 4/1/09 2,400,000 1,740,000 10.75% Sr. Unsec. Nts., 10/1/09 1,100,000 858,000 11.125% Sr. Unsec. Nts., 1/15/11 500,000 390,000 - ----------------------------------------------------------------- Cinemark USA, Inc., 9% Sr. Sub. Nts., 2/1/13 400,000 436,000 - ----------------------------------------------------------------- Classic Cable, Inc., 10.50% Sr. Sub. Nts., 3/1/10 1,10,11 200,000 -- - ----------------------------------------------------------------- Comcast Cable Communications, Inc.: 6.75% Sr. Unsub. Nts., 1/30/11 848,000 975,160 8.875% Unsub. Nts., 5/1/17 877,000 1,176,274 - ----------------------------------------------------------------- Corus Entertainment, Inc., 8.75% Sr. Sub. Nts., 3/1/12 300,000 324,000 - ----------------------------------------------------------------- Cox Communications, Inc., 7.125% Nts., 10/1/12 1,128,000 1,349,341 - ----------------------------------------------------------------- CSC Holdings, Inc., 7.625% Sr. Unsec. Unsub. Nts., Series B, 4/1/11 1,750,000 1,776,250 - ----------------------------------------------------------------- EchoStar DBS Corp.: 9.375% Sr. Unsec. Nts., 2/1/09 750,000 803,437 10.375% Sr. Unsec. Nts., 10/1/07 800,000 890,000 - ----------------------------------------------------------------- Emmis Communications Corp.: 0%/12.50% Sr. Unsec. Disc. Nts., 3/15/11 12 548,000 476,760 8.125% Sr. Unsec. Sub. Nts., Series B, 3/15/09 600,000 631,500 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Media Continued Entravision Communications Corp., 8.125% Sr. Sub. Nts., 3/15/09 $ 400,000 $ 418,000 - ----------------------------------------------------------------- Hollinger International Publishing, Inc., 9% Sr. Unsec. Nts., 12/15/10 400,000 430,000 - ----------------------------------------------------------------- Houghton Mifflin Co., 8.25% Sr. Nts., 2/1/11 6 400,000 424,000 - ----------------------------------------------------------------- Insight Midwest LP/Insight Capital, Inc., 9.75% Sr. Nts., 10/1/09 200,000 212,500 - ----------------------------------------------------------------- Lin Television Corp., 6.50% Sr. Sub. Nts., 5/15/13 6 400,000 401,000 - ----------------------------------------------------------------- LodgeNet Entertainment Corp., 9.50% Sr. Sub. Debs., 6/15/13 200,000 206,000 - ----------------------------------------------------------------- Mediacom LLC/Mediacom Capital Corp., 9.50% Sr. Unsec. Nts., 1/15/13 500,000 531,250 - ----------------------------------------------------------------- News America Holdings, Inc.: 7.75% Sr. Unsec. Debs., 12/1/45 280,000 334,241 8.875% Sr. Debs., 4/26/23 625,000 801,078 - ----------------------------------------------------------------- PanAmSat Corp., 8.50% Sr. Unsec. Nts., 2/1/12 900,000 978,750 - ----------------------------------------------------------------- PRIMEDIA, Inc., 8% Sr. Nts., 5/15/13 6 900,000 927,000 - ----------------------------------------------------------------- R.H. Donnelley Financial Corp. I, 10.875% Sr. Sub. Nts., 12/15/12 6 400,000 468,000 - ----------------------------------------------------------------- Radio One, Inc., 8.875% Sr. Unsec. Sub. Nts., Series B, 7/1/11 200,000 221,000 - ----------------------------------------------------------------- Regal Cinemas, Inc., 9.375% Sr. Sub. Nts., Series B, 2/1/12 200,000 221,500 - ----------------------------------------------------------------- Rogers Communications, Inc., 8.75% Sr. Nts., 7/15/07 [CAD] 400,000 303,956 - ----------------------------------------------------------------- Shaw Communications, Inc., 8.54% Debs., 9/30/27 [CAD] 340,000 219,612 - ----------------------------------------------------------------- Sinclair Broadcast Group, Inc.: 8% Sr. Sub. Nts., 3/15/12 750,000 804,375 8% Sr. Sub. Nts., 3/15/12 6 300,000 321,750 8.75% Sr. Sub. Nts., 12/15/11 300,000 330,750 - ----------------------------------------------------------------- Spanish Broadcasting System, Inc., 9.625% Sr. Unsec. Sub. Nts., 11/1/09 800,000 854,000 - ----------------------------------------------------------------- United Pan-Europe Communications NV: 0%/13.375% Sr. Unsec. Disc. Nts., Series B, 11/1/09 10,11,12 500,000 73,750 0%/13.75% Sr. Unsec. Disc. Nts., Series B, 2/1/10 10,11,12 200,000 28,500 11.25% Sr. Nts., Series B, 11/1/09 1,10,11 [EUR] 250,000 55,623 - ----------------------------------------------------------------- Vertis, Inc., 9.75% Sr. Sec. Nts., 4/1/09 6 200,000 209,000 - ----------------------------------------------------------------- Vivendi Universal SA, 9.25% Sr. Nts., 4/15/10 6 550,000 628,375 9 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Media Continued WRC Media, Inc./Weekly Reader Corp./Compass Learning Corp., 12.75% Sr. Sub. Nts., 11/15/09 $ 500,000 $ 523,125 --------------- 28,969,261 - ----------------------------------------------------------------- Multiline Retail--0.4% J. C. Penney Co., Inc., 8% Nts., 3/1/10 800,000 842,000 - ----------------------------------------------------------------- Saks, Inc.: 8.25% Sr. Unsec. Nts., 11/15/08 700,000 743,750 9.875% Nts., 10/1/11 1 400,000 452,000 --------------- 2,037,750 - ----------------------------------------------------------------- Specialty Retail--0.6% Asbury Automotive Group, Inc., 9% Sr. Sub. Nts., 6/15/12 300,000 291,000 - ----------------------------------------------------------------- AutoNation, Inc., 9% Sr. Unsec. Nts., 8/1/08 500,000 557,500 - ----------------------------------------------------------------- CSK Auto, Inc., 12% Sr. Unsec. Nts., 6/15/06 400,000 446,000 - ----------------------------------------------------------------- Eye Care Centers of America, Inc., 9.125% Sr. Unsec. Sub. Nts., 5/1/08 1 200,000 187,000 - ----------------------------------------------------------------- Finlay Enterprises, Inc., 9% Debs., 5/1/08 100,000 101,500 - ----------------------------------------------------------------- Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 1 300,000 312,000 - ----------------------------------------------------------------- Gap, Inc. (The), 6.90% Nts., 9/15/07 100,000 108,250 - ----------------------------------------------------------------- Hollywood Entertainment Corp., 9.625% Sr. Sub. Nts., 3/15/11 400,000 439,500 - ----------------------------------------------------------------- Petco Animal Supplies, Inc., 10.75% Sr. Sub. Nts., 11/1/11 1 200,000 229,000 - ----------------------------------------------------------------- Rent-A-Center, Inc., 7.50% Sr. Sub. Nts., 5/1/10 6 150,000 158,250 --------------- 2,830,000 - ----------------------------------------------------------------- Textiles, Apparel & Luxury Goods--0.2% Galey & Lord, Inc., 9.125% Sr. Unsec. Sub. Nts., 3/1/08 1,10,11 400,000 4,500 - ----------------------------------------------------------------- Levi Strauss & Co., 12.25% Sr. Nts., 12/15/12 600,000 502,500 - ----------------------------------------------------------------- Oxford Industries, Inc., 8.875% Sr. Nts., 6/1/11 6 250,000 263,750 - ----------------------------------------------------------------- Phillips/Van Heusen Corp., 9.50% Sr. Unsec. Sub. Nts., 5/1/08 1 200,000 208,000 - ----------------------------------------------------------------- Russell Corp., 9.25% Sr. Nts., 5/1/10 1 200,000 219,000 --------------- 1,197,750 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Consumer Staples--1.4% - ----------------------------------------------------------------- Beverages--0.1% Constellation Brands, Inc., 8.125% Sr. Sub. Nts., 1/15/12 $ 300,000 $ 325,500 - ----------------------------------------------------------------- Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/1/05 200,000 203,000 --------------- 528,500 - ----------------------------------------------------------------- Food & Staples Retailing--0.5% Delhaize America, Inc., 8.125% Unsub. Debs., 4/15/11 1,132,000 1,245,200 - ----------------------------------------------------------------- Fleming Cos., Inc.: 10.125% Sr. Unsec. Nts., 4/1/08 10,11 400,000 62,000 10.625% Sr. Unsec. Sub. Nts., Series D, 7/31/07 1,10 200,000 1,250 - ----------------------------------------------------------------- Great Atlantic & Pacific Tea Co., Inc. (The), 9.125% Sr. Nts., 12/15/11 400,000 376,000 - ----------------------------------------------------------------- Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 200,000 207,000 - ----------------------------------------------------------------- Real Time Data Co., 13% Disc. Nts., 5/31/09 1,10,11,13 142,981 2,860 - ----------------------------------------------------------------- Rite Aid Corp.: 8.125% Sr. Sec. Nts., 5/1/10 6 450,000 468,000 9.50% Sr. Sec. Nts., 2/15/11 6 200,000 216,000 --------------- 2,578,310 - ----------------------------------------------------------------- Food Products--0.6% American Seafood Group LLC, 10.125% Sr. Sub. Nts., 4/15/10 1 200,000 228,000 - ----------------------------------------------------------------- Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08 10 200,000 71,500 - ----------------------------------------------------------------- Burns Philp Capital Pty Ltd., 9.75% Sr. Sub. Nts., 7/15/12 6 450,000 441,000 - ----------------------------------------------------------------- Del Monte Corp., 8.625% Sr. Sub. Nts., 12/15/12 6 400,000 426,000 - ----------------------------------------------------------------- Doane Pet Care Co., 10.75% Sr. Nts., 3/1/10 350,000 383,250 - ----------------------------------------------------------------- Dole Food Co., Inc.: 8.625% Sr. Nts., 5/1/09 400,000 425,000 8.875% Sr. Nts., 3/15/11 6 200,000 213,000 - ----------------------------------------------------------------- Smithfield Foods, Inc., 7.625% Sr. Unsec. Sub. Nts., 2/15/08 400,000 413,000 - ----------------------------------------------------------------- United Biscuits Finance plc, 10.75% Sr. Sub. Nts., 4/15/11 1 [GBP] 400,000 742,567 --------------- 3,343,317 - ----------------------------------------------------------------- Household Products--0.2% AKI, Inc., 10.50% Sr. Unsec. Nts., 7/1/08 1 350,000 360,500 - ----------------------------------------------------------------- Playtex Products, Inc., 9.375% Sr. Unsec. Sub. Nts., 6/1/11 500,000 502,500 10 | OPPENHEIMER STRATEGIC BOND FUND/VA Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Household Products Continued Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08 1,10,11 $ 70,000 $ -- --------------- 863,000 - ----------------------------------------------------------------- Energy--3.1% - ----------------------------------------------------------------- Energy Equipment & Services--0.7% Dresser, Inc., 9.375% Sr. Sub. Nts., 4/15/11 300,000 310,500 - ----------------------------------------------------------------- Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/15/08 1,10,11 560,000 142,800 - ----------------------------------------------------------------- Hanover Equipment Trust 2001A, 8.50% Sr. Sec. Nts., Series A, 9/1/08 500,000 527,500 - ----------------------------------------------------------------- Hornbeck-Leevac Marine Services, Inc., 10.625% Sr. Nts., 8/1/08 1,000,000 1,107,500 - ----------------------------------------------------------------- Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08 700,000 585,375 - ----------------------------------------------------------------- Petroleum Helicopters, Inc., 9.375% Sr. Nts., 5/1/09 200,000 225,250 - ----------------------------------------------------------------- Universal Compression, Inc., 7.25% Sr. Nts., 5/15/10 6 400,000 416,000 --------------- 3,314,925 - ----------------------------------------------------------------- Oil & Gas--2.4% Chesapeake Energy Corp.: 7.75% Sr. Unsec. Nts., 1/15/15 400,000 429,000 8.125% Sr. Unsec. Nts., 4/1/11 600,000 649,500 - ----------------------------------------------------------------- El Paso Energy Partners LP: 8.50% Sr. Sub. Nts., 6/1/10 6 300,000 322,500 10.625% Sr. Sub. Nts., 12/1/12 350,000 406,000 - ----------------------------------------------------------------- Forest Oil Corp., 7.75% Sr. Nts., 5/1/14 300,000 313,500 - ----------------------------------------------------------------- Frontier Escrow Corp., 8% Sr. Nts., 4/15/13 6 300,000 315,000 - ----------------------------------------------------------------- Frontier Oil Corp., 11.75% Sr. Nts., 11/15/09 400,000 442,000 - ----------------------------------------------------------------- Leviathan Gas Pipeline Partners LP/ Leviathan Finance Corp., 10.375% Sr. Unsec. Sub. Nts., Series B, 6/1/09 1 400,000 429,000 - ----------------------------------------------------------------- Newfield Exploration Co., 8.375% Sr. Sub. Nts., 8/15/12 500,000 565,625 - ----------------------------------------------------------------- Pemex Project Funding Master Trust: 6.625% Nts., 4/4/10 [EUR] 690,000 825,244 7.75% Sr. Unsec. Unsub. Nts., 8/2/07 [EUR] 1,190,000 1,509,169 8.50% Unsub. Nts., 2/15/08 420,000 491,400 - ----------------------------------------------------------------- Petroleos Mexicanos, 9.375% Sr. Unsec. Bonds, 12/2/08 585,000 716,625 - ----------------------------------------------------------------- Pioneer Natural Resources Co., 7.50% Sr. Nts., 4/15/12 600,000 688,493 - ----------------------------------------------------------------- Pogo Producing Co., 8.75% Sr. Sub. Nts., Series B, 5/15/07 1 300,000 310,500 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Oil & Gas Continued Premcor Refining Group, Inc., 9.50% Sr. Nts., 2/1/13 $ 900,000 $ 999,000 - ----------------------------------------------------------------- Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 270,000 281,475 - ----------------------------------------------------------------- Tesoro Petroleum Corp., 8% Sr. Sec. Nts., 4/15/08 6 1,000,000 1,030,000 - ----------------------------------------------------------------- Westport Resources Corp.: 8.25% Sr. Sub. Nts., 11/1/11 6 800,000 880,000 8.25% Sr. Unsec. Sub. Nts., 11/1/11 400,000 440,000 - ----------------------------------------------------------------- XTO Energy, Inc., 7.50% Sr. Nts., 4/15/12 500,000 570,000 --------------- 12,614,031 - ----------------------------------------------------------------- Financials--2.5% - ----------------------------------------------------------------- Capital Markets--0.2% Credit Suisse First Boston Inc. (USA), 6.125% Nts., 11/15/11 790,000 886,454 - ----------------------------------------------------------------- Commercial Banks--0.5% Bank Plus Corp., 12% Sr. Nts., 7/18/07 1 7,000 7,534 - ----------------------------------------------------------------- BankUnited Capital Trust, 10.25% Capital Securities, 12/31/26 1 100,000 107,250 - ----------------------------------------------------------------- Household Finance Corp., 7% Nts., 5/15/12 1,356,000 1,607,760 - ----------------------------------------------------------------- Local Financial Corp., 11% Sr. Nts., 9/8/04 1 150,000 153,750 - ----------------------------------------------------------------- Ongko International Finance Co. BV, 10.50% Sec. Nts., 3/29/04 1,10,11 90,000 675 - ----------------------------------------------------------------- Western Financial Bank, 9.625% Unsec. Sub. Debs., 5/15/12 500,000 542,500 --------------- 2,419,469 - ----------------------------------------------------------------- Diversified Financial Services--0.8% AmeriCredit Corp., 9.875% Sr. Nts., 4/15/06 200,000 197,000 - ----------------------------------------------------------------- Berry Plastics Corp., 10.75% Sr. Sub. Nts., 7/15/12 400,000 442,000 - ----------------------------------------------------------------- CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 655,000 782,273 - ----------------------------------------------------------------- Finova Group, Inc. (The), 7.50% Nts., 11/15/09 900,000 396,000 - ----------------------------------------------------------------- J.P. Morgan Chase & Co., 6.75% Sub. Nts., 2/1/11 620,000 728,797 - ----------------------------------------------------------------- LaBranche & Co., Inc., 12% Sr. Unsec. Sub. Nts., 3/2/07 200,000 229,000 - ----------------------------------------------------------------- MBNA Corp., 6.125% Nts., 3/1/13 565,000 615,657 - ----------------------------------------------------------------- Pemex Project Funding Master Trust, 7.375% Bonds, 12/15/14 6 740,000 812,150 - ----------------------------------------------------------------- SBS Agro Finance BV, 10.25% Bonds, 7/21/00 1,10,11 339,000 -- --------------- 4,202,877 11 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Insurance--0.0% Conseco, Inc., 10.75% Sr. Unsec. Nts., 6/15/09 1,10,11 $ 300,000 $ 163,500 - ----------------------------------------------------------------- Real Estate--1.0% Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 175,000 159,250 - ----------------------------------------------------------------- CB Richard Ellis Services, Inc., 11.25% Sr. Unsec. Sub. Nts., 6/15/11 1 250,000 269,375 - ----------------------------------------------------------------- Corrections Corp. of America: 7.50% Sr. Nts., 5/1/11 200,000 210,000 9.875% Sr. Nts., 5/1/09 300,000 336,375 - ----------------------------------------------------------------- Felcor Lodging LP, 9% Sr. Nts., 6/1/11 406,000 411,075 - ----------------------------------------------------------------- Felcor Suites LP, 7.375% Sr. Nts., 10/1/04 400,000 407,000 - ----------------------------------------------------------------- HMH Properties, Inc., 7.875% Sr. Nts., Series B, 8/1/08 800,000 816,000 - ----------------------------------------------------------------- Host Marriott LP, 9.50% Sr. Nts., 1/15/07 400,000 432,000 - ----------------------------------------------------------------- iStar Financial, Inc., 8.75% Sr. Unsec. Nts., 8/15/08 200,000 219,000 - ----------------------------------------------------------------- MeriStar Hospitality Corp.: 8.75% Sr. Unsec. Sub. Nts., 8/15/07 325,000 294,125 9.125% Sr. Unsec. Nts., 1/15/11 1,300,000 1,280,500 - ----------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts., Series B, 4/1/08 245,000 246,225 --------------- 5,080,925 - ----------------------------------------------------------------- Thrifts & Mortgage Finance--0.0% Ocwen Financial Corp., 11.875% Nts., 10/1/03 1 235,000 236,763 - ----------------------------------------------------------------- Health Care--2.1% - ----------------------------------------------------------------- Health Care Equipment & Supplies--0.3% Fisher Scientific International, Inc., 8.125% Sr. Sub. Nts., 5/1/12 300,000 322,500 - ----------------------------------------------------------------- HMP Equity Holdings Corp., Units (each unit consists of $1,000 zero coupon sr. sec. disc. nts., 15.43%, 5/15/08 and one warrant to purchase 2.8094 shares of Huntsman Corp. common stock) 7,14 300,000 153,000 - ----------------------------------------------------------------- Kinetic Concepts, Inc., 9.625% Sr. Unsec. Sub. Nts., Series B, 11/1/07 1 250,000 261,250 - ----------------------------------------------------------------- Sybron Dental Specialties, Inc., 8.125% Sr. Sub. Nts., 6/15/12 300,000 318,000 - ----------------------------------------------------------------- Vanguard Health Systems, Inc., 9.75% Sr. Unsec. Sub. Nts., 8/1/11 300,000 300,000 --------------- 1,354,750 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Health Care Providers & Services--1.8% AmeriPath, Inc., 10.50% Sr. Sub. Nts., 4/1/13 6 $ 300,000 $ 323,250 - ----------------------------------------------------------------- AmerisourceBergen Corp., 7.25% Sr. Unsec. Nts., 11/15/12 300,000 327,000 - ----------------------------------------------------------------- Beverly Enterprises, Inc., 9.625% Sr. Unsec. Nts., 4/15/09 800,000 772,000 - ----------------------------------------------------------------- Extendicare Health Services, Inc., 9.50% Sr. Unsec. Sub. Nts., 7/1/10 300,000 316,500 - ----------------------------------------------------------------- Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08 900,000 949,500 - ----------------------------------------------------------------- Fresenius Medical Care Capital Trust III, 7.375% Nts., 2/1/08 [DEM] 25,000 15,266 - ----------------------------------------------------------------- Fresenius Medical Care Capital Trust IV, 7.875% Trust Preferred Nts., 6/15/11 600,000 636,000 - ----------------------------------------------------------------- Hanger Orthopedic Group, Inc., 10.375% Sr. Nts., 2/15/09 125,000 138,750 - ----------------------------------------------------------------- HCA, Inc., 6.30% Sr. Unsec. Nts., 10/1/12 500,000 512,070 - ----------------------------------------------------------------- Healthsouth Corp., 7.625% Nts., 6/1/12 10,11 1,000,000 780,000 - ----------------------------------------------------------------- Magellan Health Services, Inc., 9.375% Sr. Nts., 11/15/07 6 700,000 703,500 - ----------------------------------------------------------------- Medquest, Inc., 11.875% Sr. Unsec. Sub. Nts., Series B, 8/15/12 600,000 627,000 - ----------------------------------------------------------------- NDCHealth Corp., 10.50% Sr. Sub. Nts., 12/1/12 6 250,000 269,375 - ----------------------------------------------------------------- PacifiCare Health Systems, Inc., 10.75% Sr. Unsec. Unsub. Nts., 6/1/09 900,000 1,037,250 - ----------------------------------------------------------------- Tenet Healthcare Corp., 6.375% Sr. Nts., 12/1/11 1,044,000 970,920 - ----------------------------------------------------------------- Triad Hospitals, Inc., 8.75% Sr. Unsec. Nts., Series B, 5/1/09 400,000 427,500 - ----------------------------------------------------------------- US Oncology, Inc., 9.625% Sr. Sub. Nts., 2/1/12 300,000 322,500 --------------- 9,128,381 - ----------------------------------------------------------------- Pharmaceuticals--0.0% aaiPharma, Inc., 11% Sr. Sub. Nts., 4/1/10 200,000 221,000 - ----------------------------------------------------------------- Industrials--4.8% - ----------------------------------------------------------------- Aerospace & Defense--0.6% Alliant Techsystems, Inc., 8.50% Sr. Unsec. Sub. Nts., 5/15/11 300,000 334,500 - ----------------------------------------------------------------- American Plumbing & Mechanical, Inc., 11.625% Sr. Sub. Nts., Series B, 10/15/08 425,000 142,375 - ----------------------------------------------------------------- BE Aerospace, Inc., 8.875% Sr. Unsec. Sub. Nts., 5/1/11 200,000 158,000 12 | OPPENHEIMER STRATEGIC BOND FUND/VA Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Aerospace & Defense Continued Boeing Capital Corp., 5.80% Nts., 1/15/13 $ 305,000 $ 330,234 - ----------------------------------------------------------------- K&F Industries, Inc., 9.625% Sr. Unsec. Sub. Nts., 12/15/10 225,000 250,875 - ----------------------------------------------------------------- L-3 Communications Corp., 7.625% Sr. Sub. Nts., 6/15/12 300,000 331,500 - ----------------------------------------------------------------- Rexnord Corp., 10.125% Sr. Sub. Nts., 12/15/12 6 350,000 386,750 - ----------------------------------------------------------------- TransDigm, Inc., 10.375% Sr. Sub. Nts., 12/1/08 200,000 217,786 - ----------------------------------------------------------------- TRW Automotive, Inc.: 9.375% Sr. Nts., 2/15/13 6 250,000 272,500 11% Sr. Sub. Nts., 2/15/13 6 300,000 328,500 - ----------------------------------------------------------------- Vought Aircraft Industries, Inc., 8% Sr. Nts., 7/15/11 6 200,000 202,000 --------------- 2,955,020 - ----------------------------------------------------------------- Air Freight & Logistics--0.0% Atlas Air, Inc.: 9.25% Sr. Nts., 4/15/08 10,11 100,000 21,625 9.375% Sr. Unsec. Nts., 11/15/06 10,11 650,000 140,562 --------------- 162,187 - ----------------------------------------------------------------- Airlines--0.2% America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 1 450,000 254,250 - ----------------------------------------------------------------- Amtran, Inc., 10.50% Sr. Nts., 8/1/04 700,000 507,500 --------------- 761,750 - ----------------------------------------------------------------- Building Products--0.3% Associated Materials, Inc., 9.75% Sr. Sub. Nts., 4/15/12 200,000 219,250 - ----------------------------------------------------------------- Jacuzzi Brands, Inc., 9.625% Sr. Sec. Nts., 7/1/10 4,6 400,000 413,000 - ----------------------------------------------------------------- Nortek, Inc.: 9.125% Sr. Unsec. Nts., Series B, 9/1/07 1 650,000 682,500 9.25% Sr. Nts., Series B, 3/15/07 1 150,000 155,250 9.875% Sr. Unsec. Sub. Nts., 6/15/11 1 250,000 264,375 --------------- 1,734,375 - ----------------------------------------------------------------- Commercial Services & Supplies--1.8% Allied Waste North America, Inc.: 7.875% Sr. Nts., 4/15/13 400,000 420,500 8.50% Sr. Sub. Nts., 12/1/08 900,000 972,000 8.875% Sr. Nts., Series B, 4/1/08 800,000 872,000 9.25% Sr. Nts., 9/1/12 6 1,450,000 1,605,875 10% Sr. Unsec. Sub. Nts., Series B, 8/1/09 500,000 533,750 - ----------------------------------------------------------------- American Color Graphics, Inc., 10% Sr. Sec. Nts., 6/15/10 4,6 200,000 200,000 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Commercial Services & Supplies Continued Budget Group, Inc., 9.125% Sr. Unsec. Nts., 4/1/06 1,10,11 $ 700,000 $ 165,375 - ----------------------------------------------------------------- Buhrmann US, Inc., 12.25% Sr. Unsec. Sub. Nts., 11/1/09 500,000 540,000 - ----------------------------------------------------------------- Coinmach Corp., 9% Sr. Nts., 2/1/10 250,000 268,750 - ----------------------------------------------------------------- Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 1 150,000 106,125 - ----------------------------------------------------------------- IT Group, Inc., 11.25% Sr. Unsec. Sub. Nts., Series B, 4/1/09 1,10,11 400,000 -- - ----------------------------------------------------------------- Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 500,000 506,250 - ----------------------------------------------------------------- Mail-Well I Corp., 9.625% Sr. Nts., 3/15/12 400,000 423,000 - ----------------------------------------------------------------- Moore North American Finance, Inc., 7.875% Sr. Nts., 1/15/11 6 200,000 209,500 - ----------------------------------------------------------------- Protection One, Inc./Protection One Alarm Monitoring, Inc., 7.375% Sr. Unsec. Nts., 8/15/05 400,000 330,000 - ----------------------------------------------------------------- Safety-Kleen Corp., 9.25% Sr. Unsec. Nts., 5/15/09 1,10,11 400,000 22,000 - ----------------------------------------------------------------- Synagro Technologies, Inc., 9.50% Sr. Sub. Nts., 4/1/09 200,000 215,000 - ----------------------------------------------------------------- United Rentals (North America), Inc.: 9.25% Sr. Unsec. Sub. Nts., Series B, 1/15/09 250,000 247,500 10.75% Sr. Nts., 4/15/08 6 300,000 329,250 10.75% Sr. Nts., 4/15/08 6 400,000 439,000 10.75% Sr. Unsec. Nts., 4/15/08 500,000 548,750 - ----------------------------------------------------------------- Waste Management, Inc., 6.375% Sr. Nts., 11/15/12 183,000 208,453 --------------- 9,163,078 - ----------------------------------------------------------------- Construction & Engineering--0.2% Integrated Electrical Services, Inc., 9.375% Sr. Sub. Nts., Series C, 2/1/09 700,000 714,000 - ----------------------------------------------------------------- URS Corp.: 11.50% Sr. Unsec. Nts., 9/15/09 1 150,000 160,500 12.25% Sr. Sub. Nts., Series B, 5/1/09 1 375,000 373,125 --------------- 1,247,625 - ----------------------------------------------------------------- Electrical Equipment--0.0% Dayton Superior Corp., 13% Sr. Unsec. Sub. Nts., 6/15/09 1 200,000 171,000 - ----------------------------------------------------------------- Industrial Conglomerates--0.5% Great Lakes Dredge & Dock Corp., 11.25% Sr. Unsec. Sub. Nts., 8/15/08 500,000 532,500 13 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Industrial Conglomerates Continued Tyco International Group SA: 6.375% Nts., 10/15/11 $ 1,600,000 $ 1,696,000 6.75% Sr. Unsub. Nts., 2/15/11 300,000 319,500 --------------- 2,548,000 - ----------------------------------------------------------------- Machinery--0.9% Actuant Corp., 13% Sr. Sub. Nts., 5/1/09 208,000 244,400 - ----------------------------------------------------------------- AGCO Corp., 9.50% Sr. Unsec. Nts., 5/1/08 800,000 868,000 - ----------------------------------------------------------------- Blount, Inc., 13% Sr. Sub. Nts., 8/1/09 300,000 256,500 - ----------------------------------------------------------------- Eagle-Picher Industries, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/1/08 300,000 282,000 - ----------------------------------------------------------------- Insilco Corp., 12% Sr. Sub. Nts., 8/15/07 1,10,11 400,000 7,500 - ----------------------------------------------------------------- Manitowoc Co., Inc. (The), 10.50% Sr. Sub. Nts., 8/1/12 500,000 557,500 - ----------------------------------------------------------------- NMHG Holding Co., 10% Sr. Nts., 5/15/09 300,000 331,500 - ----------------------------------------------------------------- Roller Bearing Co. of America, Inc., 9.625% Sr. Sub. Nts., Series B, 6/15/07 540,000 461,700 - ----------------------------------------------------------------- SPX Corp., 7.50% Sr. Nts., 1/1/13 600,000 652,500 - ----------------------------------------------------------------- Terex Corp.: 8.875% Sr. Unsec. Sub. Nts., 4/1/08 250,000 261,250 8.875% Sr. Unsec. Sub. Nts., Series C, 4/1/08 50,000 52,250 9.25% Sr. Unsec. Sub. Nts., 7/15/11 400,000 432,000 --------------- 4,407,100 - ----------------------------------------------------------------- Marine--0.2% CP Ships Ltd., 10.375% Sr. Nts., 7/15/12 600,000 672,750 - ----------------------------------------------------------------- Millenium Seacarriers, Inc., 12% Sr. Sec. Nts., 7/15/05 1,10,11 250,000 112,500 - ----------------------------------------------------------------- Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07 1,10,11 175,000 56,875 --------------- 842,125 - ----------------------------------------------------------------- Road & Rail--0.1% Kansas City Southern Railway Co. (The), 7.50% Sr. Nts., 6/15/09 400,000 416,500 - ----------------------------------------------------------------- Stena AB, 9.625% Sr. Nts., 12/1/12 250,000 275,938 --------------- 692,438 - ----------------------------------------------------------------- Transportation Infrastructure--0.0% Worldspan LP/Worldspan Financial Corp., 9.625% Sr. Nts., 6/15/11 6 150,000 155,250 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Information Technology--1.4% - ----------------------------------------------------------------- Communications Equipment--0.1% Orion Network Systems, Inc., 12.50% Sr. Disc. Nts., 1/15/07 10 $ 675,000 $ 233,887 - ----------------------------------------------------------------- Computers & Peripherals--0.1% Seagate Technology Hdd Holdings, 8% Sr. Nts., 5/15/09 200,000 217,500 - ----------------------------------------------------------------- Electronic Equipment & Instruments--0.3% Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05 1 250,000 253,125 - ----------------------------------------------------------------- Flextronics International Ltd., 9.875% Sr. Unsec. Sub. Nts., 7/1/10 500,000 550,000 - ----------------------------------------------------------------- Ingram Micro, Inc., 9.875% Sr. Unsec. Sub. Nts., 8/15/08 1 700,000 759,500 --------------- 1,562,625 - ----------------------------------------------------------------- Internet Software & Services--0.0% Exodus Communications, Inc., 10.75% Sr. Nts., 12/15/09 1,10,11 [EUR] 346,521 17,907 - ----------------------------------------------------------------- FirstWorld Communications, Inc., 0%/13% Sr. Disc. Nts., 4/15/08 1,10,11,12 250,000 25 - ----------------------------------------------------------------- Globix Corp., 11% Sr. Nts., 4/26/08 1 65,615 49,539 - ----------------------------------------------------------------- PSINet, Inc.: 10.50% Sr. Unsec. Nts., 12/1/06 1,10,11 [EUR] 100,000 5,742 11% Sr. Nts., 8/1/09 10,11 275,784 18,960 --------------- 92,173 - ----------------------------------------------------------------- IT Services--0.1% Iron Mountain, Inc., 7.75% Sr. Sub. Nts., 1/15/15 400,000 425,000 - ----------------------------------------------------------------- Titan Corp. (The), 8% Sr. Sub. Nts., 5/15/11 6 100,000 106,500 --------------- 531,500 - ----------------------------------------------------------------- Office Electronics--0.0% ASAT Finance LLC, 12.50% Sr. Unsec. Nts., 11/1/06 1 162,500 140,563 - ----------------------------------------------------------------- Semiconductors & Semiconductor Equipment--0.8% AMI Semiconductor, Inc., 10.75% Sr. Sub. Nts., 2/1/13 6 600,000 681,000 - ----------------------------------------------------------------- Amkor Technology, Inc.: 7.75% Sr. Nts., 5/15/13 6 1,150,000 1,098,250 9.25% Sr. Unsec. Sub. Nts., 2/15/08 250,000 261,250 - ----------------------------------------------------------------- ChipPAC International Co. Ltd., 12.75% Sr. Unsec. Sub. Nts., Series B, 8/1/09 600,000 678,000 - ----------------------------------------------------------------- Fairchild Semiconductor Corp., 10.375% Sr. Unsec. Nts., 10/1/07 500,000 528,440 14 | OPPENHEIMER STRATEGIC BOND FUND/VA Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Semiconductors & Semiconductor Equipment Continued Micron Technology, Inc., 6.50% Sub. Nts., 9/30/05 $ 1,000,000 $ 960,000 --------------- 4,206,940 - ----------------------------------------------------------------- Materials--5.3% - ----------------------------------------------------------------- Chemicals--1.4% Compass Minerals Group, Inc., 10% Sr. Sub. Nts., 8/15/11 450,000 506,250 - ----------------------------------------------------------------- Equistar Chemicals LP/Equistar Funding Corp.: 8.75% Sr. Unsec. Nts., 2/15/09 600,000 585,000 10.625% Sr. Nts., 5/1/11 6 400,000 412,000 - ----------------------------------------------------------------- Huntsman Corp./ ICI Chemical Co. plc: Zero Coupon Sr. Unsec. Disc. Nts., 26.72%, 12/31/09 7 600,000 237,000 10.125% Sr. Unsec. Sub. Nts., 7/1/09 1,000,000 965,000 10.125% Sr. Unsec. Sub. Nts., 7/1/09 [EUR] 200,000 211,871 - ----------------------------------------------------------------- Huntsman International LLC: 9.875% Sr. Nts., 3/1/09 300,000 313,500 9.875% Sr. Nts., 3/1/09 6 450,000 470,250 - ----------------------------------------------------------------- ISP Holdings, Inc., 10.625% Sr. Sec. Nts., 12/15/09 200,000 213,500 - ----------------------------------------------------------------- Lyondell Chemical Co.: 9.50% Sec. Nts., 12/15/08 300,000 286,500 9.625% Sr. Sec. Nts., Series A, 5/1/07 5 400,000 394,000 9.875% Sec. Nts., Series B, 5/1/07 1,400,000 1,379,000 - ----------------------------------------------------------------- Millennium America, Inc., 9.25% Sr. Nts., 6/15/08 6 450,000 486,000 - ----------------------------------------------------------------- OM Group, Inc., 9.25% Sr. Sub. Nts., 12/15/11 200,000 196,000 - ----------------------------------------------------------------- PCI Chemicals Canada, 10% Sr. Sec. Nts., 12/31/08 113,061 98,646 - ----------------------------------------------------------------- Pioneer Cos., Inc., 4.60% Sr. Sec. Nts., 12/31/06 2 35,804 30,612 - ----------------------------------------------------------------- Resolution Performance Products LLC/RPP Capital Corp., 9.50% Sr. Sec. Nts., 4/15/10 6 150,000 156,750 - ----------------------------------------------------------------- Sterling Chemicals, Inc.: 10% Sr. Sec. Nts., 12/19/07 1 159,788 148,403 11.25% Sr. Sub. Nts., 8/15/06 10,11 540,000 -- 11.75% Sr. Unsec. Sub. Nts., 8/15/06 10,11 540,000 -- - ----------------------------------------------------------------- Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03 1 47,000 47,294 --------------- 7,137,576 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Construction Materials--0.1% Formica Corp., 10.875% Sr. Unsec. Sub. Nts., Series B, 3/1/09 10,11 $ 200,000 $ 51,000 - ----------------------------------------------------------------- Texas Industries, Inc., 10.25% Sr. Nts., 6/15/11 6 400,000 420,000 --------------- 471,000 - ----------------------------------------------------------------- Containers & Packaging--1.7% Ball Corp.: 6.875% Sr. Unsec. Nts., 12/15/12 6 300,000 319,500 7.75% Sr. Unsec. Nts., 8/1/06 125,000 137,500 8.25% Sr. Unsec. Sub. Nts., 8/1/08 125,000 131,875 - ----------------------------------------------------------------- Consumers International, Inc., 10.25% Sr. Sec. Nts., 4/1/05 1,10,11 250,000 625 - ----------------------------------------------------------------- Crown Euro Holdings SA: 9.50% Sr. Sec. Nts., 3/1/11 6 500,000 542,500 10.875% Sr. Sec. Nts., 3/1/13 6 200,000 219,000 - ----------------------------------------------------------------- Graphic Packaging Corp., 8.625% Sub. Nts., 2/15/12 500,000 512,500 - ----------------------------------------------------------------- Jefferson Smurfit Corp., 8.25% Sr. Unsec. Nts., 10/1/12 250,000 269,375 - ----------------------------------------------------------------- MDP Acquisitions plc, 9.625% Sr. Nts., 10/1/12 400,000 444,000 - ----------------------------------------------------------------- Owens-Brockway Glass Container, Inc.: 7.75% Sr. Sec. Nts., 5/15/11 6 450,000 478,125 8.25% Sr. Unsec. Nts., 5/15/13 6 400,000 420,000 8.75% Sr. Sec. Nts., 11/15/12 1,000,000 1,090,000 8.875% Sr. Sec. Nts., 2/15/09 200,000 218,000 - ----------------------------------------------------------------- Packaging Corp. of America, 9.625% Sr. Unsec. Sub. Nts., 4/1/09 750,000 829,687 - ----------------------------------------------------------------- Riverwood International Corp.: 10.625% Sr. Unsec. Nts., 8/1/07 750,000 781,875 10.875% Sr. Sub. Nts., 4/1/08 250,000 257,500 - ----------------------------------------------------------------- Stone Container Corp.: 8.375% Sr. Nts., 7/1/12 600,000 646,500 9.25% Sr. Unsec. Nts., 2/1/08 200,000 219,000 9.75% Sr. Unsec. Nts., 2/1/11 600,000 660,000 - ----------------------------------------------------------------- TriMas Corp., 9.875% Sr. Unsec. Sub. Nts., 6/15/12 500,000 515,000 --------------- 8,692,562 - ----------------------------------------------------------------- Metals & Mining--1.3% AK Steel Corp.: 7.75% Sr. Unsec. Nts., 6/15/12 1,200,000 1,002,000 7.875% Sr. Unsec. Nts., 2/15/09 500,000 427,500 - ----------------------------------------------------------------- Arch Western Finance LLC, 6.75% Sr. Nts., 7/1/13 6 400,000 412,000 - ----------------------------------------------------------------- Better Minerals & Aggregates Co., 13% Sr. Unsec. Sub. Nts., 9/15/09 100,000 67,000 - ----------------------------------------------------------------- California Steel Industries Corp., 8.50% Sr. Unsec. Nts., Series B, 4/1/09 200,000 204,000 15 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Metals & Mining Continued Centaur Mining & Exploration Ltd., 11% Sr. Nts., 12/1/07 1,10 $ 94,344 $ 1,415 - ----------------------------------------------------------------- Century Aluminum Co., 11.75% Sr. Sec. Nts., 4/15/08 500,000 512,500 - ----------------------------------------------------------------- Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., Series B, 5/15/08 473,000 404,415 - ----------------------------------------------------------------- International Utility Structures, Inc., 13% Unsec. Sub. Nts., 2/1/08 1 71,000 3,550 - ----------------------------------------------------------------- Jorgensen (Earle M.) Co., 9.75% Sr. Sec. Nts., 6/1/12 1 500,000 532,500 - ----------------------------------------------------------------- Kaiser Aluminum & Chemical Corp.: 10.875% Sr. Nts., Series B, 10/15/06 1,10,11 500,000 392,500 12.75% Sr. Sub. Nts., 2/1/04 1,10,11 800,000 50,000 - ----------------------------------------------------------------- Metallurg, Inc., 11% Sr. Nts., 12/1/07 500,000 272,500 - ----------------------------------------------------------------- National Steel Corp., 9.875% First Mtg. Bonds, Series D, 3/1/09 10,11 244,879 14,693 - ----------------------------------------------------------------- Oregon Steel Mills, Inc., 10% Sr. Nts., 7/15/09 400,000 362,000 - ----------------------------------------------------------------- Peabody Energy Corp., 6.875% Sr. Nts., 3/15/13 6 400,000 421,000 - ----------------------------------------------------------------- Steel Dynamics, Inc., 9.50% Sr. Nts., 3/15/09 200,000 210,500 - ----------------------------------------------------------------- UCAR Finance, Inc., 10.25% Sr. Nts., 2/15/12 300,000 295,500 - ----------------------------------------------------------------- United States Steel Corp.: 9.75% Sr. Nts., 5/15/10 400,000 408,000 10.75% Sr. Nts., 8/1/08 800,000 844,000 --------------- 6,837,573 - ----------------------------------------------------------------- Paper & Forest Products--0.8% Abitibi-Consolidated, Inc., 8.55% Nts., 8/1/10 200,000 224,394 - ----------------------------------------------------------------- Ainsworth Lumber Co. Ltd.: 12.50% Sr. Nts., 7/15/07 13 400,000 454,000 13.875% Sr. Sec. Nts., 7/15/07 1 400,000 456,000 - ----------------------------------------------------------------- Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04 1,10,11 900,000 198,000 - ----------------------------------------------------------------- Fort James Corp., 6.875% Sr. Nts., 9/15/07 500,000 511,250 - ----------------------------------------------------------------- Georgia-Pacific Corp.: 8.125% Sr. Unsec. Nts., 5/15/11 1,450,000 1,497,125 9.375% Sr. Nts., 2/1/13 6 800,000 886,000 - ----------------------------------------------------------------- U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07 300,000 174,750 --------------- 4,401,519 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Telecommunication Services--4.6% - ----------------------------------------------------------------- Diversified Telecommunication Services--2.1% 360networks, Inc., 13% Sr. Unsec. Nts., 5/1/08 1,10,11 [EUR] 250,000 $ 29 - ----------------------------------------------------------------- Adelphia Business Solutions, Inc., 12% Sr. Sub. Nts., 11/1/07 1,10,11 200,000 3,000 - ----------------------------------------------------------------- American Tower Corp., 9.375% Sr. Nts., 2/1/09 700,000 707,000 - ----------------------------------------------------------------- COLO.com, Inc., 13.875% Sr. Nts., 3/15/10 1,10,11 344,725 3,447 - ----------------------------------------------------------------- Comcast UK Cable Partner Ltd., 11.20% Sr. Unsec. Disc. Debs., 11/15/07 250,000 245,313 - ----------------------------------------------------------------- Concentric Network Corp., Escrow Shares, 12/15/07 10,11 80,000 -- - ----------------------------------------------------------------- Deutsche Telekom International Finance BV, 8.50% Unsub. Nts., 6/15/10 305,000 375,267 - ----------------------------------------------------------------- Dex Media East LLC/Dex Media East Finance Co., 9.875% Sr. Unsec. Nts., 11/15/09 200,000 224,000 - ----------------------------------------------------------------- Focal Communications Corp.: 11.875% Sr. Unsec. Nts., Series B, 1/15/10 1,10,11 75,000 4,500 12.125% Sr. Unsec. Disc. Nts., 2/15/08 1,10,11 80,000 4,800 - ----------------------------------------------------------------- France Telecom SA, 9.25% Sr. Unsec. Nts., 3/1/11 1,040,000 1,311,186 - ----------------------------------------------------------------- Intermedia Communications, Inc., 0%/12.25% Sr. Disc. Nts., Series B, 3/1/09 10,11,12 200,000 64,000 - ----------------------------------------------------------------- IPC Acquisition Corp., 11.50% Sr. Sub. Nts., 12/15/09 200,000 213,000 - ----------------------------------------------------------------- Level 3 Communications, Inc., 0%/10.50% Sr. Disc. Nts., 12/1/08 12 700,000 607,250 - ----------------------------------------------------------------- Metromedia Fiber Network, Inc., 10% Sr. Unsec. Nts., Series B, 11/15/08 10,11 400,000 25,500 - ----------------------------------------------------------------- Nextlink Communications, Inc.: Escrow Shares, 10/1/07 10,11 200,000 -- Escrow Shares, 3/15/08 10,11 250,000 -- Escrow Shares, 11/15/08 10,11 300,000 -- Escrow Shares, 6/1/09 10,11 400,000 -- - ----------------------------------------------------------------- NorthPoint Communications Group, Inc., 12.875% Nts., 2/15/10 10,11 250,000 43,750 - ----------------------------------------------------------------- Qwest Corp.: 7.20% Unsec. Nts., 11/1/04 1,600,000 1,648,000 8.875% Nts., 3/15/12 6 300,000 336,750 - ----------------------------------------------------------------- Qwest Services Corp., 13.50% Nts., 12/15/10 6 300,000 340,500 16 | OPPENHEIMER STRATEGIC BOND FUND/VA Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Diversified Telecommunication Services Continued Sprint Capital Corp.: 8.375% Nts., 3/15/12 $ 950,000 $ 1,139,638 8.75% Nts., 3/15/32 790,000 948,995 - ----------------------------------------------------------------- Telewest Communications plc: 0%/9.25% Sr. Disc. Nts., 4/15/09 10,11,12 600,000 190,500 0%/9.875% Sr. Disc. Nts., 4/15/09 1,10,11,12 [GBP] 200,000 101,484 - ----------------------------------------------------------------- Teligent, Inc., 11.50% Sr. Nts., 12/1/07 1,10,11 500,000 -- - ----------------------------------------------------------------- Telus Corp., 7.50% Nts., 6/1/07 790,000 884,800 - ----------------------------------------------------------------- Time Warner Telecom LLC/ Time Warner Telecom, Inc., 9.75% Sr. Nts., 7/15/08 500,000 485,000 - ----------------------------------------------------------------- Verizon Global Funding Corp., 7.375% Sr. Nts., 9/1/12 915,000 1,118,350 - ----------------------------------------------------------------- Viatel, Inc., 11.25% Sr. Sec. Nts., 4/15/08 1,10,11 500,000 -- - ----------------------------------------------------------------- Winstar Communications, Inc., 12.75% Sr. Nts., 4/15/10 1,10,11 250,000 25 --------------- 11,026,084 - ----------------------------------------------------------------- Wireless Telecommunication Services--2.5% Alamosa Delaware, Inc., 12.50% Sr. Unsec. Nts., 2/1/11 650,000 536,250 - ----------------------------------------------------------------- American Cellular Corp., 9.50% Sr. Sub. Nts., 10/15/09 10 550,000 277,750 - ----------------------------------------------------------------- American Tower Escrow Corp., Zero Coupon Sr. Sub. Disc. Nts., 12.25%, 8/1/08 7 800,000 520,000 - ----------------------------------------------------------------- AT&T Corp., 8.50% Sr. Nts., 11/15/31 2 500,000 568,916 - ----------------------------------------------------------------- AT&T Wireless Services, Inc., 7.50% Sr. Unsec. Nts., 5/1/07 790,000 911,572 - ----------------------------------------------------------------- CellNet Data Systems, Inc., 14% Sr. Unsec. Disc. Nts., 10/1/07 1,10,11 400,000 -- - ----------------------------------------------------------------- Centennial Cellular Operating Co./ Centennial Communications Corp., 10.125% Sr. Nts., 6/15/13 6 600,000 597,000 - ----------------------------------------------------------------- Crown Castle International Corp.: 0%/10.375% Sr. Disc. Nts., 5/15/11 12 1,300,000 1,248,000 10.625% Sr. Unsec. Disc. Nts., 11/15/07 500,000 528,750 - ----------------------------------------------------------------- IPCS, Inc., 0%/14% Sr. Unsec. Disc. Nts., 7/15/10 1,10,11,12 300,000 16,500 - ----------------------------------------------------------------- Leap Wireless International, Inc.: 0%/14.50% Sr. Unsec. Disc. Nts., 4/15/10 1,10,11,12 700,000 66,500 12.50% Sr. Nts., 4/15/10 1,10 100,000 13,500 - ----------------------------------------------------------------- Nextel Communications, Inc.: 9.375% Sr. Unsec. Nts., 11/15/09 2,200,000 2,373,250 10.65% Sr. Disc. Nts., 9/15/07 750,000 778,125 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Wireless Telecommunication Services Continued Nextel Partners, Inc.: 11% Sr. Nts., 3/15/10 $ 500,000 $ 542,500 11% Sr. Unsec. Nts., 3/15/10 150,000 162,750 12.50% Sr. Nts., 11/15/09 500,000 565,000 - ----------------------------------------------------------------- Orbcomm Global LP, Escrow Shares, 8/15/04 10,11 200,000 -- - ----------------------------------------------------------------- Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 500,000 445,000 - ----------------------------------------------------------------- SBA Communications Corp.: 10.25% Sr. Unsec. Nts., 2/1/09 200,000 185,000 12% Sr. Unsec. Disc. Nts., 3/1/08 1,100,000 1,130,250 - ----------------------------------------------------------------- SpectraSite, Inc., 8.25% Sr. Nts., 5/15/10 6 200,000 209,000 - ----------------------------------------------------------------- Triton PCS, Inc.: 8.50% Sr. Nts., 6/1/13 6 400,000 432,000 8.75% Sr. Unsec. Sub. Nts., 11/15/11 200,000 200,500 - ----------------------------------------------------------------- US Unwired, Inc., 0%/13.375% Sr. Unsec. Sub. Disc. Nts., Series B, 11/1/09 12 900,000 373,500 --------------- 12,681,613 - ----------------------------------------------------------------- Utilities--3.7% - ----------------------------------------------------------------- Electric Utilities--2.0% AES Corp. (The): 8.75% Sr. Sec. Nts., 5/15/13 6 1,300,000 1,358,500 8.75% Sr. Unsec. Unsub. Nts., 6/15/08 244,000 242,780 8.875% Sr. Unsec. Nts., 2/15/11 103,000 101,197 9.375% Sr. Unsec. Nts., 9/15/10 97,000 97,970 10.25% Sr. Unsec. Sub. Nts., 7/15/06 550,000 547,250 - ----------------------------------------------------------------- AES Drax Holdings Ltd., 10.41% Sr. Sec. Sub. Nts., Series B, 12/31/20 1 300,000 195,000 - ----------------------------------------------------------------- Caithness Coso Funding Corp., 9.05% Sr. Sec. Nts., Series B, 12/15/09 356,634 381,598 - ----------------------------------------------------------------- Calpine Corp.: 8.25% Sr. Unsec. Nts., 8/15/05 200,000 187,000 8.50% Sr. Unsec. Nts., 2/15/11 2,300,000 1,736,500 8.75% Sr. Nts., 7/15/07 200,000 164,500 - ----------------------------------------------------------------- Central Termica Guemes SA, 1.20% Nts., 1/1/12 1 90,000 9,000 - ----------------------------------------------------------------- CMS Energy Corp.: 8.50% Sr. Nts., 4/15/11 250,000 262,188 9.875% Sr. Unsec. Nts., 10/15/07 900,000 964,125 - ----------------------------------------------------------------- CMS Energy X-TRAS Pass- Through Trust I, 7% Sr. Unsec. Pass-Through Certificates, 1/15/05 300,000 296,625 - ----------------------------------------------------------------- Edison Mission Energy, 10% Sr. Unsec. Nts., 8/15/08 800,000 760,000 - ----------------------------------------------------------------- FirstEnergy Corp., 7.375% Sr. Unsub. Nts., Series C, 11/15/31 1,006,000 1,131,040 17 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Electric Utilities Continued Funding Corp./Beaver Valley Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17 $ 199,000 $ 238,983 - ----------------------------------------------------------------- Mirant Americas Generation LLC, 7.625% Sr. Unsec. Nts., 5/1/06 10,11 200,000 155,000 - ----------------------------------------------------------------- MSW Energy Holdings LLC/ MSW Energy Finance Co., Inc., 8.50% Sr. Sec. Nts., 9/1/10 6 200,000 206,500 - ----------------------------------------------------------------- PG&E Corp., 6.875% Sr. Sec. Nts., 7/15/08 6 400,000 416,000 - ----------------------------------------------------------------- Reliant Resources, Inc.: 9.25% Sr. Sec. Nts., 7/15/10 6 250,000 251,563 9.50% Sr. Sec. Nts., 7/15/13 6 250,000 252,500 - ----------------------------------------------------------------- Westar Energy, Inc., 9.75% Sr. Unsec. Nts., 5/15/07 600,000 675,000 --------------- 10,630,819 - ----------------------------------------------------------------- Gas Utilities--0.7% AmeriGas Partners LP/AmeriGas Eagle Finance Corp., 8.875% Sr. Unsec. Nts., Series B, 5/20/11 500,000 547,500 - ----------------------------------------------------------------- El Paso Energy Corp., 7.625% Nts., 7/15/11 200,000 183,000 - ----------------------------------------------------------------- NiSource Finance Corp., 7.875% Sr. Unsec. Nts., 11/15/10 382,000 451,675 - ----------------------------------------------------------------- SEMCO Energy, Inc.: 7.125% Sr. Nts., 5/15/08 6 150,000 157,500 7.75% Sr. Nts., 5/15/13 6 150,000 160,500 - ----------------------------------------------------------------- Southern Natural Gas Co., 8% Sr. Unsub. Nts., 3/1/32 300,000 325,875 - ----------------------------------------------------------------- Tennessee Gas Pipeline Co., 7.50% Bonds, 4/1/17 800,000 826,000 - ----------------------------------------------------------------- Williams Cos., Inc. (The), 7.125% Nts., 9/1/11 1,100,000 1,078,000 --------------- 3,730,050 - ----------------------------------------------------------------- Multi-Utilities & Unregulated Power--1.0% AES Red Oak LLC, 8.54% Sr. Sec. Bonds, Series A, 11/30/19 591,022 619,095 - ----------------------------------------------------------------- Consumers Energy Co., 7.375% Nts., 9/15/23 250,000 261,204 - ----------------------------------------------------------------- Dynegy Holdings, Inc.: 6.875% Sr. Unsec. Unsub. Nts., 4/1/11 1,100,000 929,500 8.75% Sr. Nts., 2/15/12 850,000 794,750 - ----------------------------------------------------------------- El Paso Production Holding Co., 7.75% Sr. Nts., 6/1/13 6 650,000 651,625 - ----------------------------------------------------------------- Mirant Mid-Atlantic LLC, 8.625% Sec. Pass-Through Certificates, Series A, 6/30/12 467,843 450,108 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Multi-Utilities & Unregulated Power Continued Williams Cos., Inc. (The): 8.625% Sr. Nts., 6/1/10 $ 400,000 $ 420,000 9.25% Sr. Unsec. Unsub. Nts., 3/15/04 800,000 824,000 --------------- 4,950,282 --------------- Total Corporate Bonds and Notes (Cost $214,052,361) 213,879,171 Shares - ----------------------------------------------------------------- Preferred Stocks--0.4% AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg. 1,13 4,253 43 - ----------------------------------------------------------------- Crown American Realty Trust, 11% Cum., Series A, Non-Vtg. 2,000 117,900 - ----------------------------------------------------------------- Digital Globe, Inc., 8.50% Cv., Series C, Non-Vtg. 1 6,264 6,264 - ----------------------------------------------------------------- Doane Pet Care Co., 14.25% Jr. Sub. Debs., Non-Vtg. 1,11 5,000 201,250 - ----------------------------------------------------------------- e.spire Communications, Inc., 12.75% Jr. Redeemable, Non-Vtg. 1,11,13 216 22 - ----------------------------------------------------------------- Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable, Series B, Non-Vtg. 1,11 5,000 221,250 - ----------------------------------------------------------------- ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg. 1,11,13 151 1 - ----------------------------------------------------------------- Nebco Evans Holdings, Inc., 11.25% Sr. Redeemable Exchangeable, Non-Vtg. 1,13 6,061 -- - ----------------------------------------------------------------- Nextel Communications, Inc., 13% Cum., Series D, Non-Vtg. 13 2 213 - ----------------------------------------------------------------- NTL Europe, Inc., 10% Nts., Series A, Non-Vtg.1, 11 8 16 - ----------------------------------------------------------------- Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable, Non-Vtg. 13 36 355,500 - ----------------------------------------------------------------- Rural Cellular Corp., 11.375% Cum., Series B, Non-Vtg. 13 631 399,107 - ----------------------------------------------------------------- Sovereign Real Estate Investment Trust, 12% Non-Cum., Series A 1 4,600 668,150 -------------- Total Preferred Stocks (Cost $2,972,965) 1,969,716 - ----------------------------------------------------------------- Common Stocks--0.3% Adelphia Business Solutions, Inc. 11 363 8 - ----------------------------------------------------------------- Charles River Laboratories International, Inc. 11 2,660 85,599 - ----------------------------------------------------------------- Contour Energy Co. 1,11 5,400 151 - ----------------------------------------------------------------- Covad Communications Group, Inc. 11 16,528 16,693 - ----------------------------------------------------------------- Criimi MAE, Inc. 11 71,447 782,345 - ----------------------------------------------------------------- Equinix, Inc. 11 3,286 25,795 18 | OPPENHEIMER STRATEGIC BOND FUND/VA Market Value Shares See Note 1 - ----------------------------------------------------------------- Common Stocks Continued Geotek Communications, Inc. 1,11 90 $ -- - ----------------------------------------------------------------- Geotek Communications, Inc., Series B (Escrow Shares) 1,11 210 -- - ----------------------------------------------------------------- Globix Corp. 1,11 6,880 18,920 - ----------------------------------------------------------------- ICO Global Communication Holdings Ltd. 1,11 6,016 5,114 - ----------------------------------------------------------------- Microcell Telecommunications, Inc. 11 770 6,590 - ----------------------------------------------------------------- Microcell Telecommunications, Inc., Cl. A 11 6 55 - ----------------------------------------------------------------- Microcell Telecommunications, Inc., Cl. B 11 766 5,988 - ----------------------------------------------------------------- NTL, Inc. 11 7,842 267,569 - ----------------------------------------------------------------- Orbital Sciences Corp. 11 457 3,336 - ----------------------------------------------------------------- Pioneer Cos., Inc. 11 7,312 26,689 - ----------------------------------------------------------------- Prandium, Inc. 11 24,165 13,532 - ----------------------------------------------------------------- Premier Holdings Ltd. 1,11 18,514 -- - ----------------------------------------------------------------- Southern Pacific Funding Corp., Liquidating Trust 1 83,868 -- - ----------------------------------------------------------------- Star Gas Partners LP 187 4,108 - ----------------------------------------------------------------- Sterling Chemicals, Inc. 11 676 11,492 - ----------------------------------------------------------------- TVMAX Holdings, Inc. 1,11 1,000 2,125 - ----------------------------------------------------------------- Viatel Holding Ltd. (Bermuda) 1,11 1,958 979 - ----------------------------------------------------------------- Wilshire Financial Services Group, Inc. 11 6,273 25,782 - ----------------------------------------------------------------- WRC Media Corp. 1,11 1,082 22 - ----------------------------------------------------------------- XO Communications, Inc. 11 1,100 7,975 --------------- Total Common Stocks (Cost $1,859,149) 1,310,867 Units - ----------------------------------------------------------------- Rights, Warrants and Certificates--0.5% American Tower Corp. Wts., Exp. 8/1/08 1,11 800 82,400 - ----------------------------------------------------------------- ASAT Finance LLC Wts., Exp. 11/1/06 1,11 250 437 - ----------------------------------------------------------------- Chesapeake Energy Corp. Wts.: Exp. 9/1/04 11 534 120 Exp. 5/1/05 11 416 -- - ----------------------------------------------------------------- Citigroup, Inc. Wts., Exp. 12/31/50 (Litigation Wts.) 11 2,404 2,452 - ----------------------------------------------------------------- COLO.com, Inc. Wts., Exp. 3/15/10 1,11 400 4 - ----------------------------------------------------------------- Comunicacion Celular SA Wts., Exp. 11/15/03 1,11 200 2 - ----------------------------------------------------------------- Concentric Network Corp. Wts., Exp. 12/15/07 1,11 100 1 - ----------------------------------------------------------------- Covergent Communications, Inc. Wts., Exp. 4/1/08 1,11 400 4 - ----------------------------------------------------------------- HF Holdings, Inc. Wts., Exp. 9/27/09 1,11 530 119 Market Value Units See Note 1 - ----------------------------------------------------------------- Rights, Warrants and Certificates Continued Horizon PCS, Inc. Wts., Exp. 10/1/10 1,11 1,000 $ 50 - ----------------------------------------------------------------- ICG Communications, Inc. Wts., Exp. 9/15/05 1,11 825 8 - ----------------------------------------------------------------- ICO Global Communication Holdings Ltd. Wts.: Exp. 5/16/06 1,11 1,509 8 Exp. 5/16/06 1,11 2 -- - ----------------------------------------------------------------- Imperial Credit Industries, Inc. Wts., Exp. 1/31/08 1,11 2,135 -- - ----------------------------------------------------------------- Insilco Corp. Wts., Exp. 8/15/07 1,11 270 -- - ----------------------------------------------------------------- IPCS, Inc. Wts., Exp. 6/15/10 1,11 300 3 - ----------------------------------------------------------------- Leap Wireless International, Inc. Wts., Exp. 4/15/10 1,11 275 -- - ----------------------------------------------------------------- Long Distance International, Inc. Wts., Exp. 4/13/08 1,11 200 -- - ----------------------------------------------------------------- Loral Space & Communications Ltd. Wts., Exp. 1/15/07 1,11 150 1 - ----------------------------------------------------------------- Microcell Telecommunications, Inc.: Cl. A Wts., Exp. 5/1/05 11 284 96 Cl. B Wts., Exp. 5/1/08 11 474 279 - ----------------------------------------------------------------- Millenium Seacarriers, Inc. Wts., Exp. 7/15/05 1,11 250 3 - ----------------------------------------------------------------- Morgan Stanley Capital I, Inc. All Country Asia Free (except for Japan) Wts., Exp. 3/4/05 11 105,050 1,188,242 - ----------------------------------------------------------------- Morgan Stanley Capital I, Inc. Basket of countries Wts., Exp. 3/4/05 11 117,454 1,234,970 - ----------------------------------------------------------------- Ntelos, Inc. Wts., Exp. 8/15/10 1,11 450 675 - ----------------------------------------------------------------- Occidente y Caribe Celular SA Wts., Exp. 3/15/04 1,11 800 8 - ----------------------------------------------------------------- Pathmark Stores, Inc. Wts., Exp. 9/19/10 11 5,710 7,880 - ----------------------------------------------------------------- PLD Telekom, Inc. Wts., Exp. 6/1/06 (cv. into Metromedia International Group, Inc.) 1,11 300 3 - ----------------------------------------------------------------- Real Time Data Co. Wts., Exp. 5/31/04 1,11 36,431 -- - ----------------------------------------------------------------- Republic Technologies International LLC Wts., Exp. 7/15/09 1,11 200 2 - ----------------------------------------------------------------- Sterling Chemicals, Inc. Wts., Exp. 12/19/08 11 1,099 -- - ----------------------------------------------------------------- Telus Corp. Wts., Exp. 9/15/05 11 269 1,899 - ----------------------------------------------------------------- Verado Holdings, Inc., Cl. B Wts., Exp. 4/15/08 1,11 175 3 - ----------------------------------------------------------------- XO Communications, Inc.: Cl. A Wts., Exp. 1/16/10 11 2,204 7,273 Cl. B Wts., Exp. 1/16/10 11 1,653 2,645 Cl. C Wts., Exp. 1/16/10 11 1,653 909 --------------- Total Rights, Warrants and Certificates (Cost $2,255,058) 2,530,496 19 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Structured Notes--5.6% Citigroup Global Capital Markets Holdings, Inc.: Chilean Peso Unsec. Linked Nts., 0.675%, 9/22/03 [CLP] 384,696,000 $ 545,190 Zero Coupon Brazilian Real Linked Nts., 23.18%, 5/20/04 7 [BRR] 559,878 157,562 - ----------------------------------------------------------------- Credit Suisse First Boston Corp. (Nassau Branch), U.S. Dollar/ Philippine Peso Linked Nts., 12.50%, 3/5/12 2 [PHP] 47,430,000 909,374 - ----------------------------------------------------------------- Credit Suisse First Boston Corp. (New York Branch), Russian Obligatzii Federal'nogo Zaima Linked Nts.: Series 27010, 10.028%, 9/17/03 1,2 [RUR] 2,047,150 67,978 Series 27010, 10.028%, 9/17/03 1,2 [RUR] 277,180 9,204 Series 27011, 10.028%, 10/8/03 1,2 [RUR] 3,646,190 121,243 Series 27011, 10.028%, 10/8/03 1,2 [RUR] 277,180 9,217 Series 28001, 10.028%, 1/21/04 1,2 [RUR] 277,180 9,341 - ----------------------------------------------------------------- Credit Suisse First Boston International, U.S. Dollar/South African Rand Linked Nts., Series FBi 43, 1.065%, 5/23/22 2 825,000 808,170 - ----------------------------------------------------------------- Deutsche Bank AG: Deposit Linked Nts. to Basket Emerging Market Currencies, 0.98%, 9/24/03 2,090,000 2,229,821 Indonesian Rupiah Linked Nts., 14%, 6/22/09 963,196 1,156,798 Indonesian Rupiah Linked Nts., 14%, 6/22/09 524,383 595,489 Indonesian Rupiah Linked Nts., 14%, 6/22/09 470,000 556,574 Peruvian New Sol Linked Nts., 4.716%, 4/29/06 2 575,000 554,645 Turkey (Republic of) Treasury Bill Linked Nts., 44.50%, 5/26/04 7 875,912 598,914 Turkey (Republic of) Treasury Bills Linked Nts., 55.96%, 4/28/04 7 875,365 598,539 Venezuela (Republic of) Credit Linked Nts., 1.094%, 6/15/04 2 775,000 783,990 - ----------------------------------------------------------------- JPMorgan Chase Bank: High Beta High Yield Index Nts., 10%, 6/20/08 2,500,000 2,531,250 High Yield Index-100 Nts., 8%, 6/20/08 8,200,000 8,507,500 High Yield Index-B Nts., 9%, 6/20/08 5,200,000 5,447,000 Principal Market Value Amount See Note 1 - ----------------------------------------------------------------- Structured Notes Continued Pioneer 2002 Ltd. Sec. Nts.: Series 2002-1, Cl. E-A, 5.509%, 6/15/06 2 $ 500,000 $ 492,300 Series 2003-II, Cl. A, 7.088%, 6/15/06 1,2 500,000 497,725 Series 2003-II, Cl. B, 6.088%, 6/15/06 1,2 500,000 498,050 Series 2003-II, Cl. C, 5.838%, 6/15/06 1,2 500,000 498,000 - ----------------------------------------------------------------- Russia (Government of) Federal Loan Obligatzii Federal'nogo Zaima Bonds, Series 27010, 10.028%, 9/17/03 1,2 [RUR] 3,590,420 119,223 - ----------------------------------------------------------------- Standard Chartered Bank, South African Rand Linked Nts., 13.287%, 7/24/03 [ZAR] 4,001,765 533,272 --------------- Total Structured Notes (Cost $28,371,863) 28,836,369 Date Strike Contracts - ----------------------------------------------------------------- Options Purchased--0.0% Japanese Yen Call 1,11 (Cost $66,925) 6/1/04 107JPY 660,000,000 36,630 Principal Amount - ----------------------------------------------------------------- Joint Repurchase Agreements--4.8% Undivided interest of 5.69% in joint repurchase agreement (Principal Amount/Market Value $440,796,000, with a maturity value of $440,808,979) with Banc One Capital Markets, Inc., 1.06%, dated 6/30/03, to be repurchased at $25,093,739 on 7/1/03, collateralized by U.S. Treasury Bonds, 3.375%, 4/30/04, with a value of $449,915,616 (Cost $25,093,000) $ 25,093,000 25,093,000 - ----------------------------------------------------------------- Total Investments, at Value (Cost $571,884,893) 111.3% 575,685,142 - ----------------------------------------------------------------- Liabilities in Excess of Other Assets (11.3) (59,112,855) ----------------------- Net Assets 100.0% $516,572,287 ======================= 20 | OPPENHEIMER STRATEGIC BOND FUND/VA Footnotes to Statement of Investments Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: ARP Argentine Peso BRR Brazilian Real CAD Canadian Dollar CLP Chilean Peso DEM German Mark DKK Danish Krone EUR Euro FRF French Franc GBP British Pound Sterling JPY Japanese Yen MXN Mexican Nuevo Peso NZD New Zealand Dollar PHP Philippines Peso RUR Russian Ruble SEK Swedish Krona ZAR South African Rand 1. Identifies issues considered to be illiquid or restricted--See Note 11 of Notes to Financial Statements. 2. Represents the current interest rate for a variable or increasing rate security. 3. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. These securities amount to $908,275 or 0.18% of the Fund's net assets as of June 30, 2003. 4. When-issued security to be delivered and settled after June 30, 2003. See Note 1 of Notes to Financial Statements. 5. Securities with an aggregate market value of $2,015,397 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 6. 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 $34,603,390 or 6.70% of the Fund's net assets as of June 30, 2003. 7. Zero coupon bond reflects effective yield on the date of purchase. 8. A sufficient amount of securities has been designated to cover outstanding foreign currency contracts. See Note 5 of Notes to Financial Statements. 9. A sufficient amount of liquid assets has been designated to cover outstanding written options, as follows:
Contracts Expiration Exercise Premium Market Value Subject to Put Dates Price Received See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Japanese Yen 744,000 6/1/04 1.200JPY $138,880 $195,598
10. Issuer is in default. See Note 1 of Notes to Financial Statements. 11. Non-income producing security. 12. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 13. Interest or dividend is paid-in-kind. 14. 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. 21 | OPPENHEIMER STRATEGIC BOND FUND/VA
- ------------------------------------------------------------------------------------------------------------------------------------ STATEMENT OF ASSETS AND LIABILITIES Unaudited - ------------------------------------------------------------------------------------------------------------------------------------ June 30, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ Assets Investments, at value (cost $571,884,893)--see accompanying statement $575,685,142 - ------------------------------------------------------------------------------------------------------------------------------------ Cash 646,880 - ------------------------------------------------------------------------------------------------------------------------------------ Cash--foreign currencies (cost $6,646) 6,646 - ------------------------------------------------------------------------------------------------------------------------------------ Unrealized appreciation on foreign currency contracts 320,705 - ------------------------------------------------------------------------------------------------------------------------------------ Receivables and other assets: Investments sold (including $18,706,033 sold on a when-issued basis) 24,227,323 Interest, dividends and principal paydowns 7,882,603 Shares of beneficial interest sold 2,439,885 Other 2,534 -------------- Total assets 611,211,718 - ------------------------------------------------------------------------------------------------------------------------------------ Liabilities Unrealized depreciation on foreign currency contracts 1,220,115 - ------------------------------------------------------------------------------------------------------------------------------------ Options written, at value (premiums received $138,880)--see accompanying statement 195,598 - ------------------------------------------------------------------------------------------------------------------------------------ Swaptions, at value (premiums received $19,758)--see accompanying statement 24,634 - ------------------------------------------------------------------------------------------------------------------------------------ Payables and other liabilities: Investments purchased (including $85,536,066 purchased on a when-issued basis) 91,352,271 Shares of beneficial interest redeemed 682,382 Swap contracts 549,555 Closed foreign currency contracts 395,313 Daily variation on futures contracts 118,217 Shareholder reports 35,926 Service plan fees 13,917 Trustees' compensation 1,931 Transfer and shareholder servicing agent fees 1,576 Other 47,996 -------------- Total liabilities 94,639,431 - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets $516,572,287 ============== - ------------------------------------------------------------------------------------------------------------------------------------ Composition of Net Assets - ------------------------------------------------------------------------------------------------------------------------------------ Par value of shares of beneficial interest $ 109,692 - ------------------------------------------------------------------------------------------------------------------------------------ Additional paid-in capital 525,781,861 - ------------------------------------------------------------------------------------------------------------------------------------ Undistributed net investment income 11,461,437 - ------------------------------------------------------------------------------------------------------------------------------------ Accumulated net realized loss on investments and foreign currency transactions (23,204,554) - ------------------------------------------------------------------------------------------------------------------------------------ Net unrealized appreciation on investments and translation of assets and 2,423,851 liabilities denominated in foreign currencies -------------- Net Assets $516,572,287 ============== - ------------------------------------------------------------------------------------------------------------------------------------ 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 $486,188,947 and 103,358,288 shares of beneficial interest outstanding) $4.70 - ------------------------------------------------------------------------------------------------------------------------------------ Service shares: Net asset value, redemption price per share and offering price per share (based on net assets of $30,383,340 and 6,333,949 shares of beneficial interest outstanding) $4.80
See accompanying Notes to Financial Statements. 22 | OPPENHEIMER STRATEGIC BOND FUND/VA
- ------------------------------------------------------------------------------------------------------------------------------------ STATEMENT OF OPERATIONS Unaudited - ------------------------------------------------------------------------------------------------------------------------------------ For the Six Months Ended June 30, 2003 - ------------------------------------------------------------------------------------------------------------------------------------ Investment Income Interest (net of foreign withholding taxes of $38,855) $15,449,912 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends (net of foreign withholding taxes of $2,834) 137,192 ------------- Total investment income 15,587,104 - ------------------------------------------------------------------------------------------------------------------------------------ Expenses Management fees 1,686,358 - ------------------------------------------------------------------------------------------------------------------------------------ Distribution and service plan fees--Service shares 20,764 - ------------------------------------------------------------------------------------------------------------------------------------ Transfer and shareholder servicing agent fees: Non-Service shares 5,420 Service shares 3,275 - ------------------------------------------------------------------------------------------------------------------------------------ Shareholder reports 23,149 - ------------------------------------------------------------------------------------------------------------------------------------ Custodian fees and expenses 20,719 - ------------------------------------------------------------------------------------------------------------------------------------ Trustees' compensation 9,285 - ------------------------------------------------------------------------------------------------------------------------------------ Other 32,242 ------------- Total expenses 1,801,212 Less reduction to custodian expenses (2,842) ------------- Net expenses 1,798,370 - ------------------------------------------------------------------------------------------------------------------------------------ Net Investment Income 13,788,734 - ------------------------------------------------------------------------------------------------------------------------------------ Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments (including premiums on options exercised) 5,571,947 Closing of futures contracts (2,538,627) Closing and expiration of option contracts written 120,018 Foreign currency transactions 3,591,240 ------------- Net realized gain 6,744,578 - ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) on: Investments 24,621,901 Futures contracts 409,948 Translation of assets and liabilities denominated in foreign currencies (1,055,142) ------------- Net change in unrealized appreciation 23,976,707 - ------------------------------------------------------------------------------------------------------------------------------------ Net Increase in Net Assets Resulting from Operations $44,510,019 =============
See accompanying Notes to Financial Statements. 23 | OPPENHEIMER STRATEGIC BOND FUND/VA
- ------------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ Six Months Year Ended Ended June 30, 2003 December 31, (Unaudited) 2002 - ------------------------------------------------------------------------------------------------------------------------------------ Operations Net investment income $ 13,788,734 $ 25,945,473 - ------------------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) 6,744,578 (2,441,898) - ------------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation 23,976,707 4,037,800 ----------------------------- Net increase in net assets resulting from operations 44,510,019 27,541,375 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or Distributions to Shareholders Dividends from net investment income: Non-Service shares (28,473,133) (28,654,014) Service shares (842,251) (2,128) - ------------------------------------------------------------------------------------------------------------------------------------ Beneficial Interest Transactions Net increase in net assets resulting from beneficial interest transactions: Non-Service shares 65,554,148 55,824,134 Service shares 21,558,991 7,864,978 - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets Total increase 102,307,774 62,574,345 - ------------------------------------------------------------------------------------------------------------------------------------ Beginning of period 414,264,513 351,690,168 ----------------------------- End of period [including undistributed net investment income of $11,461,437 and $26,988,087, respectively] $516,572,287 $414,264,513 =============================
See accompanying Notes to Financial Statements. 24 | OPPENHEIMER STRATEGIC BOND FUND/VA
- ------------------------------------------------------------------------------------------------------------------------------------ FINANCIAL HIGHLIGHTS - ------------------------------------------------------------------------------------------------------------------------------------ Six Months Year Ended Ended June 30, 2003 December 31, Non-Service shares (Unaudited) 2002 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------------------------------ Per Share Operating Data Net asset value, beginning of period $4.57 $4.62 $4.69 $4.97 $5.12 $5.12 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .11 .29 .41 .41 .45 .39 Net realized and unrealized gain (loss) .32 .03 (.19) (.28) (.31) (.24) ------------------------------------------------------------------------- Total from investment operations .43 .32 .22 .13 .14 .15 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.30) (.37) (.29) (.41) (.29) (.09) Distributions from net realized gain -- -- -- -- -- (.06) ------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.30) (.37) (.29) (.41) (.29) (.15) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $4.70 $4.57 $4.62 $4.69 $4.97 $5.12 ========================================================================= - ------------------------------------------------------------------------------------------------------------------------------------ Total Return, at Net Asset Value 1 9.89% 7.44% 4.85% 2.63% 2.83% 2.90% - ------------------------------------------------------------------------------------------------------------------------------------ Ratios/Supplemental Data Net assets, end of period (in thousands) $486,189 $406,126 $351,686 $304,562 $282,086 $279,200 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $450,445 $374,519 $330,711 $289,923 $278,668 $250,227 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 2 Net investment income 6.01% 6.89% 8.78% 9.23% 9.08% 8.17% Expenses, gross 0.76% 0.79% 0.79% 0.79% 0.78% 0.80% 3 Expenses, net 0.76% 4 0.78% 4,5 0.79% 4 0.79% 4 0.78% 4 0.80% - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 59% 65% 104% 104% 81% 134%
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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. 4. Reduction to custodian expenses less than 0.01%. 5. Net of voluntary reimbursement of expenses. See accompanying Notes to Financial Statements. 25 | OPPENHEIMER STRATEGIC BOND FUND/VA
- ------------------------------------------------------------------------------------------------------------------------------------ FINANCIAL HIGHLIGHTS Continued - ------------------------------------------------------------------------------------------------------------------------------------ Six Months Year Ended Ended June 30, 2003 December 31, Service shares (Unaudited) 2002 2001 1 - ------------------------------------------------------------------------------------------------------------------------------------ Per Share Operating Data Net asset value, beginning of period $4.67 $4.73 $4.64 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .16 .03 .15 Net realized and unrealized gain (loss) .27 .28 (.06) -------------------------------------------------- Total from investment operations .43 .31 .09 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.30) (.37) -- Distributions from net realized gain -- -- -- -------------------------------------------------- Total dividends and/or distributions to shareholders (.30) (.37) -- - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $4.80 $4.67 $4.73 ================================================== - ------------------------------------------------------------------------------------------------------------------------------------ Total Return, at Net Asset Value 2 9.62% 7.03% 1.94% - ------------------------------------------------------------------------------------------------------------------------------------ Ratios/Supplemental Data Net assets, end of period (in thousands) $30,383 $8,138 $4 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $16,876 $2,307 $2 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 3 Net investment income 4.22% 5.40% 8.17% Expenses, gross 1.05% 1.06% 0.92% Expenses, net 1.05% 4 1.03% 4,5,6 0.92% 4 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 59% 65% 104%
1. For the period from March 19, 2001 (inception of offering) to December 31, 2001. 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Net of voluntary reimbursement of expenses. 6. Net of voluntary waiver of transfer agent fees. See accompanying Notes to Financial Statements. 26 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. Significant Accounting Policies Oppenheimer Strategic Bond Fund/VA (the Fund) is a separate series of Oppenheimer Variable Account Funds (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 level of current income principally derived from interest on debt securities. 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. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities (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 using consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- Structured Notes. The Fund invests in foreign currency-linked structured notes whose market values and redemption prices are linked to foreign currency exchange rates. The Fund also invests in "index-linked" notes whose principal and/or interest payments depend on the performance of an underlying index. The structured notes are leveraged, increasing the volatility of each note's market value relative to the change in the underlying foreign currency exchange rate or underlying index. Fluctuations in value of these securities are recorded as unrealized gains and losses in the accompanying financial statements. The Fund records a realized gain or loss when a structured note is sold or matures. As of June 30, 2003, the market value of these securities comprised 5.6% of the Fund's net assets and resulted in unrealized gains in the current period of $464,506. The Fund also hedges a portion of the foreign currency exposure generated by these securities, as discussed in Note 5. - -------------------------------------------------------------------------------- Securities on a When-Issued Basis. Delivery and payment for securities that have been purchased by the Fund on a when-issued basis can take place a month or more after the trade date. Normally the settlement date occurs within six months after the trade date; however, the Fund may, from time to time, purchase securities whose settlement date extends six months or more beyond trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Fund maintains segregated assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a when-issued basis may increase the volatility of the Fund's net asset value to the extent the Fund makes such purchases while remaining substantially fully invested. As of June 30, 2003, the Fund had entered into when-issued purchase commitments of $85,536,066. Additionally, the Fund had when-issued sale commitments of $18,706,033. In connection with its ability to purchase securities on a when-issued basis, the Fund may enter into forward roll transactions with respect to mortgage-related securities. Forward roll transactions require the sale of securities for delivery in the current month, and a simultaneous agreement with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The forward roll may not extend for 27 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. Significant Accounting Policies Continued a period of greater than one year. The Fund records the incremental difference between the forward purchase and sale of each forward roll as interest income. Risks of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Fund to receive inferior securities to what was sold to the counterparty at redelivery; counterparty credit risk; and the potential pay down speed variance between the mortgage-related pools. - -------------------------------------------------------------------------------- Security Credit Risk. The Fund invests in high-yield securities, which may be subject to a greater degree of credit risk, market fluctuations and loss of income and principal, and may be more sensitive to economic conditions than lower-yielding, higher-rated fixed-income securities. The Fund may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. As of June 30, 2003, securities with an aggregate market value of $5,399,060, representing 1.05% of the Fund's net assets, were in default. - -------------------------------------------------------------------------------- Foreign Currency Translation. The Fund's accounting records 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. - -------------------------------------------------------------------------------- Joint Repurchase Agreements. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. Secured by U.S. government securities, these balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- Federal Taxes. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders. As of June 30, 2003, the Fund had available for federal income tax purposes an estimated unused capital loss carryforward of $19,809,859. This estimated capital loss carryforward represents carryforward as of the end of the last fiscal year, increased for losses deferred under tax accounting rules to the current fiscal year and increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. During the six months ended June 30, 2003, the Fund used $6,744,578 of carryforward to offset capital gains realized. During the year ended December 31, 2002, the Fund did not use carryforward to offset capital gains realized. 28 | OPPENHEIMER STRATEGIC BOND FUND/VA As of December 31, 2002, the Fund had available for federal income tax purposes unused capital loss carryforwards as follows: Expiring ------------------------- 2006 $ 1,014,382 2007 5,399,072 2008 253,735 2009 9,904,928 2010 6,861,637 ----------- Total $23,433,754 =========== - -------------------------------------------------------------------------------- Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income distributions, if any, are declared daily and paid monthly. Capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- 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 due to paydown gains and losses and 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. The tax character of distributions paid during the six months ended June 30, 2003 and the year ended December 31, 2002 was as follows: Six Months Ended Year Ended June 30, 2003 December 31, 2002 ----------------------------------------------------------------------- Distributions paid from: Ordinary income $29,315,384 $28,656,142 - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- Expense Offset Arrangement. The reduction of custodian fees represents earnings on cash balances maintained by the Fund. - -------------------------------------------------------------------------------- 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. 29 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. Shares of Beneficial Interest The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
Six Months Ended June 30, 2003 Year Ended December 31, 2002 Shares Amount Shares Amount - ------------------------------------------------------------------------------------------------------------------------------------ Non-Service shares Sold 21,448,449 $ 99,016,237 39,611,608 $ 174,444,145 Dividends and/or distributions reinvested 6,471,166 28,473,133 6,617,555 28,654,014 Redeemed (13,442,276) (61,935,277) (33,471,553) (147,274,025) ------------------------------------------------------------------- Net increase 14,477,339 $65,554,093 12,757,610 $55,824,134 =================================================================== - ------------------------------------------------------------------------------------------------------------------------------------ Service shares Sold 4,660,952 $ 21,928,789 1,855,564 $ 8,365,056 Dividends and/or distributions reinvested 187,166 842,251 479 2,128 Redeemed (258,016) (1,212,049) (113,038) (502,206) ------------------------------------------------------------------- Net increase 4,590,102 $ 21,558,991 1,743,005 $ 7,864,978 ===================================================================
- -------------------------------------------------------------------------------- 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, 2003, were $354,654,152 and $280,375,610, 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 which provides for a fee at an annual rate of 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, 0.60% of the next $200 million and 0.50% of average annual net assets over $1 billion. - -------------------------------------------------------------------------------- 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 $22.50 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 0.35% of average net assets of the Fund. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 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. For the six months ended June 30, 2003, expense under the Service Plan totaled $20,764. - -------------------------------------------------------------------------------- 5. Foreign Currency Contracts A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. 30 | OPPENHEIMER STRATEGIC BOND FUND/VA The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Contracts closed or settled with the same broker are recorded as net realized gain or loss. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of June 30, 2003, the Fund had outstanding foreign currency contracts as follows:
Expiration Contract Valuation as of Unrealized Unrealized Contract Description Dates Amount (000s) June 30, 2003 Appreciation Depreciation - ------------------------------------------------------------------------------------------------------------------------------------ Contracts to Purchase Australian Dollar (AUD) 7/31/03-8/11/03 7,205AUD $ 4,811,876 $ 67,456 $ -- Brazilian Real (BRR) 8/27/03-4/23/04 5,391BRR 1,811,733 84,898 -- British Pound Sterling (GBP) 8/19/03 1,275GBP 2,096,427 39,792 -- Chilean Peso (CLP) 7/17/03-8/25/03 1,532,828CLP 2,181,873 31,871 -- Columbian Peso (COP) 7/28/03 945,035COP 333,159 -- 1,841 Euro (EUR) 7/16/03-6/17/04 29,425EUR 33,564,381 19,174 709,517 Japanese Yen (JPY) 7/10/03-7/11/03 1,252,735JPY 10,437,176 -- 291,813 Mexican Nuevo Peso (MXN) 9/11/03 12,062MXN 1,146,755 31,769 -- New Zealand Dollar (NZD) 7/31/03 1,920NZD 1,119,720 4,968 -- Norwegian Krone (NOK) 7/31/03 7,160NOK 989,160 1,901 -- ------------------------------ 281,829 1,003,171 ------------------------------ Contracts to Sell British Pound Sterling (GBP) 8/1/03-9/8/03 980GBP 1,610,893 -- 55,365 Canadian Dollar (CAD) 8/21/03 645CAD 473,184 419 -- Euro (EUR) 10/8/03 645EUR 738,549 -- 52,269 Indonesia Rupian (IDR) 8/12/03 5,176,500IDR 627,454 -- 32,451 Japanese Yen (JPY) 7/31/03-9/10/03 369,000JPY 3,079,292 33,516 -- New Zealand Dollar (NZD) 8/11/03 6,075NZD 3,538,700 -- 60,202 Philippines Peso (PHP) 7/28/03 46,606PHP 866,657 -- 16,657 Swiss Franc (CHF) 7/31/03 1,425CHF 1,052,856 4,941 -- ------------------------------ 38,876 216,944 ------------------------------ Total Unrealized Appreciation and Depreciation $320,705 $1,220,115 ==============================
- -------------------------------------------------------------------------------- 6. Futures Contracts A futures contract is a commitment to buy or sell a specific amount of a commodity or financial instrument at a negotiated price on a stipulated future date. Futures contracts are traded on a commodity exchange. The Fund may buy and sell futures contracts that relate to broadly based securities indices "financial futures" or debt securities "interest rate futures" in order to gain exposure to or protection from changes in market value of stock and bonds or interest rates. The Fund may also buy or write put or call options on these futures contracts. The Fund generally sells futures contracts as a hedge against increases in interest rates and decreases in market value of portfolio securities. The Fund may also purchase futures contracts to gain exposure to market changes as it may be more efficient or cost effective than actually buying fixed income securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or has expired. 31 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 6. Futures Contracts Continued Cash held by the broker to cover initial margin requirements on open futures contracts is noted in the Statement of Assets and Liabilities. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. The Statement of Assets and Liabilities reflects a receivable and/or payable for the daily mark to market for variation margin. Realized gains and losses are reported on the Statement of Operations as closing and expiration of futures contracts. The net change in unrealized appreciation and depreciation is reported on the Statement of Operations. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. As of June 30, 2003, the Fund had outstanding futures contracts as follows:
Unrealized Expiration Number of Valuation as of Appreciation Contract Description Dates Contracts June 30, 2003 (Depreciation) - ------------------------------------------------------------------------------------------------------------------------------------ Contracts to Purchase Euro-Bobl 9/8/03 45 $ 5,856,930 $ (27,905) Euro-Bundesobligation 9/8/03 62 8,318,027 (92,961) Japan (Government of) Bonds Futures, 10 yr. 9/10/03 1 1,178,930 (1,374) NASDAQ 100 Index 9/18/03 10 1,204,500 (33,650) Nikkei 225 Index 9/11/03 2 90,950 683 United Kingdom Long Gilt 9/26/03 2 402,076 207 ----------- (155,000) ----------- Contracts to Sell DAX Index 9/19/03 4 370,745 837 FTSE 100 Index 9/19/03 1 66,237 423 U.S. Long Bonds 9/19/03 78 9,152,813 262,656 U.S. Treasury Nts., 2 yr. 9/29/03 105 22,711,172 (15,296) U.S. Treasury Nts., 5 yr. 9/19/03 212 24,406,500 (1,344) U.S. Treasury Nts., 10 yr. 9/19/03 204 23,957,250 2,266 ----------- 249,542 ----------- $ 94,542 ===========
- -------------------------------------------------------------------------------- 7. Option Activity The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. 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. 32 | OPPENHEIMER STRATEGIC BOND FUND/VA 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, 2003 was as follows:
Call Options Put Options ------------------------------ ------------------------------- Principal (000s)/ Principal (000s)/ Number of Amount of Number of Amount of Contracts Premiums Contracts Premiums - ------------------------------------------------------------------------------------------------------------------------------------ Options outstanding as of December 31, 2002 7,895,000 $ 59,288 -- $ -- Options written 7,232,110 111,735 747,091,695 273,660 Options closed or expired (1,015,000) (11,266) (3,091,695) (134,780) Options exercised (14,112,110) (159,757) -- -- --------------------------------------------------------------------- Options outstanding as of June 30, 2003 -- $ -- 744,000,000 $ 138,880 =====================================================================
- -------------------------------------------------------------------------------- 8. Credit Swap Contracts The Fund may enter into a credit swap transaction to maintain a total return on a particular investment or portion of its portfolio, or for other non-speculative purposes. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as a notional principal amount. The Fund records an increase or decrease to interest income, in the amount due to or owed by the Fund at termination or settlement. Credit swaps are subject to credit risks (if the counterparty fails to meet its obligations). During the six months ended June 30, 2003, the Fund entered into a transaction to hedge credit risk. The Fund pays an annual 2% interest fee on the notional amount in exchange for the counterparty paying in a potential credit event. Information regarding the credit swap is as follows:
Unrealized Expiration Notional Valuation as of Appreciation Contract Description Date Amount June 30, 2003 (Depreciation) - ------------------------------------------------------------------------------------------------------------------------------------ Deutsche Bank AG, Brazil (Federal Republic of) Credit Nts. 6/12/06 $ 870,000 $ (3,261) $ (3,261) Deutsche Bank AG, Venezuela (Republic of) Credit Nts. 4/9/06 1,035,000 (154,473) (154,473) Deutsche Bank AG, Venezuela (Republic of) Credit Nts. 4/10/06 520,000 (85,673) (85,673) JPMorgan Chase Bank, Jordan (Kingdom of) Credit Nts. 6/6/06 250,000 1,716 1,716 ------------ $(241,691) ============
- -------------------------------------------------------------------------------- 9. Interest Rate Swap Contracts The Fund may enter into an interest rate swap transaction to maintain a total return or yield spread on a particular investment, or portion of its portfolio, or for other non-speculative purposes. Interest rate swaps involve the exchange of commitments to pay or receive interest, e.g., an exchange of floating rate payments for fixed rate payments. The coupon payments are based on an agreed upon principal amount and a specified index. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as notional. The Fund records an increase or decrease to interest income, in the amount due to or owed by the Fund at termination or settlement. Interest rate swaps are subject to credit risk (if the counterparty fails to meet its obligations) and interest rate risk. The Fund could be obligated to pay more under its swap agreements than it receives under them, as a result of interest rate changes. 33 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 9. Interest Rate Swap Contracts Continued As of June 30, 2003, the Fund had entered into the following interest rate swap agreements:
Floating Rate Rate Paid by Received by Notional the Fund at the Fund at Floating Termination Unrealized Swap Counterparty Principal June 30, 2003 June 30, 2003 Rate Index Date Depreciation - ------------------------------------------------------------------------------------------------------------------------------------ Three-Month Deutsche Bank $3,185,000 3.1025% 1.33063% LIBOR BBA Flat 3/4/08 $ 58,895 Three-Month JPMorgan Chase Bank 9,465,000 3.052 1.3175 LIBOR BBA Rate 3/10/08 149,665 Three-Month JPMorgan Chase Bank 4,140,000 3.23 1.34 LIBOR BBA Flat 2/24/08 99,304 ----------- $307,864 ===========
- -------------------------------------------------------------------------------- 10. Swaptions The Fund may enter into a swaption transaction, whereby a contract that grants the holder, in return for payment of the purchase price (the "premium") of the option, the right, but not the obligation, to enter into an interest rate swap at a preset rate within a specified period of time, with the writer of the contract. The writer receives premiums and bears the risk of unfavorable changes in the preset rate on the underlying interest rate swap. Swaption contracts written by the Fund do not give rise to counterparty credit risk as they obligate the Fund, not its counterparty, to perform. Unrealized gains/losses on swaptions are reflected in investment assets and investment liabilities on the statement of financial condition. As of June 30, 2003, the Fund had entered into the following swaptions:
Contracts Expiration Exercise Premium Market Value Swaptions Subject to Call Dates Price Received See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Deutsche Bank 2,220,000 5/17/04 $2.825 $19,758 $24,634
- -------------------------------------------------------------------------------- 11. Illiquid or Restricted Securities As of June 30, 2003, investments in securities included issues that are illiquid or restricted. Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 15% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. The aggregate value of illiquid or restricted securities subject to this limitation as of June 30, 2003 was $24,704,135, which represents 4.78% of the Fund's net assets, of which zero is considered restricted. Information concerning restricted securities is as follows:
Unrealized Acquisition Valuation as of Appreciation Security Dates Cost June 30, 2003 (Depreciation) - ------------------------------------------------------------------------------------------------------------------------------------ Stocks and/or Warrants Geotek Communications, Inc. 4/6/00 $ -- $ -- $ -- Geotek Communications, Inc., Series B (Escrow Shares) 1/4/01 840 -- (840) Real Time Data Co. Wts., Exp. 5/31/04 6/30/99 364 -- (364) Currency Argentine Peso 6/10/03-6/17/03 1,779 1,774 (5) Russian Ruble 6/18/03 4,867 4,872 5
34 | OPPENHEIMER STRATEGIC BOND FUND/VA - -------------------------------------------------------------------------------- 12. Borrowing and Lending Arrangements The Fund entered into an "interfund borrowing and lending arrangement" with other funds in the Oppenheimer funds complex, to allow funds to borrow for liquidity purposes. The arrangement was initiated pursuant to exemptive relief granted by the Securities and Exchange Commission to allow these affiliated funds to lend money to, and borrow money from, each other, in an attempt to reduce borrowing costs below those of bank loan facilities. Under the arrangement the Fund may lend money to other Oppenheimer funds and may borrow from other Oppenheimer funds at a rate set by the Fund's Board of Trustees, based upon a recommendation by the Manager. The Fund's borrowings, if any, are subject to asset coverage requirements under the Investment Company Act and the provisions of the SEC order and other applicable regulations. If the Fund borrows money, there is a risk that the loan could be called on one day's notice, in which case the Fund might have to borrow from a bank at higher rates if a loan were not available from another Oppenheimer fund. If the Fund lends money to another fund, it will be subject to the risk that the other fund might not repay the loan in a timely manner, or at all. The Fund had no interfund borrowings or loans outstanding during the six months ended or at June 30, 2003. - -------------------------------------------------------------------------------- Portfolio Proxy Voting Policies and Procedures The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.225.5677, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund will be required to file new Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The first such filing is due no later than August 31, 2004, for the twelve months ended June 30, 2004. Once filed, the Fund's Form N-PX filing will be available (i) without charge, upon request, by calling the Fund toll-free at 1.800.225.5677, and (ii) on the SEC's website at www.sec.gov. 35 | OPPENHEIMER STRATEGIC BOND FUND/VA ITEM 2. CODE OF ETHICS - NOT REQUIRED ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT - NOT REQUIRED ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT REQUIRED ITEM 5. RESERVED ITEM 6. RESERVED ITEM 7. NOT APPLICABLE ITEM 8. RESERVED ITEM 9. CONTROLS AND PROCEDURES (a) Based on their evaluation of registrant's disclosure controls and procedures (as defined in rule 30a-2(c) under the Investment Company Act of 1940 (17 CFR 270.30a-2(c)) as of June 30, 2003, registrant's principal executive officer and principal financial officer found registrant's disclosure controls and procedures to be appropriately designed to ensure that information required to be disclosed by registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. (b) There have been no significant changes in registrant's internal controls or in other factors that could significantly affect registrant's internal controls subsequent to the date of the most recent evaluation as indicated, including no significant deficiencies or material weaknesses that required corrective action. ITEM 10. EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS) EX-99.302CERT 3 ex99_302cert-265.txt EX99_302CERT-265 Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, John V. Murphy, certify that: -------------- 1. I have reviewed this report on Form N-CSR of Oppenheimer Strategic Bond Fund/VA; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. Date: 08/14/03 /s/John V. Murphy ----------------- John V. Murphy Chief Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, Brian W. Wixted, certify that: --------------- 1. I have reviewed this report on Form N-CSR of Oppenheimer Strategic Bond Fund/VA; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. Date: 08/14/03 /s/Brian W. Wixted ------------------ Brian W. Wixted Chief Financial Officer EX-99.906CERT 4 ex99_906cert-265.txt EX99_906CERT-265 EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2003 John V. Murphy, Chief Executive Officer, and Brian W. Wixted Chief -------------- --------------- Financial Officer of Oppenheimer Strategic Bond Fund/VA (the "Registrant"), each certify to the best of his or her knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended June 30, 2003 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Chief Executive Officer Chief Financial Officer Oppenheimer Strategic Bond Fund/VA Oppenheimer Strategic Bond Fund/VA /s/John V. Murphy /s/Brian W. Wixted - ----------------- ------------------ John V. Murphy Brian W. Wixted Date: 08/14/03 Date: 08/14/03 -----END PRIVACY-ENHANCED MESSAGE-----