-----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, BxemLbtaA905z/7tq2yDNHK4BqKIUDM5wxhXL/4FFokBmvRJ3RS383qQdChEf4xz 4Njm1Rpn+0hHtWK5e+9UDw== 0000935069-04-000304.txt : 20040302 0000935069-04-000304.hdr.sgml : 20040302 20040301173336 ACCESSION NUMBER: 0000935069-04-000304 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040302 EFFECTIVENESS DATE: 20040302 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: 04640412 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 ra0640_9473vef.txt RA0640_9473VEF 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 HIGH INCOME 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. Two World Financial Center, New York, New York 10281-1008 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 -------------- Date of fiscal year end: DECEMBER 31 ----------- Date of reporting period: JANUARY 1, 2003 - DECEMBER 31, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. During the Fund's 12-month period that ended December 31, 2003, Oppenheimer High Income Fund/VA benefited most from its investments in lower-rated securities related to the telecommunications and cable industries. For instance, the largest position in the portfolio--and the biggest contributor to total return--was Charter Communications, a provider of broadband services (e.g., digital cable, high-speed internet access and video on demand). Also making major contributions were SBA Communications Corp. and Crown Castle International Corp., companies that build and operate towers for wireless communications antennas. One major reason we selected these and other companies was their focus on deleveraging - that is, on reducing debt levels. Through deleveraging, the companies have positioned themselves so that even relatively small increases in sales may have a larger, more positive effect on profitability. Due to our emphasis on deleveraging, the portfolio increased its holdings in securities from telecommunications and cable companies but also included securities from a wide range of other industries, from automotive parts suppliers and steel manufacturers, to clothing, specialty chemicals companies and utilities. In fact, utilities investments that the Fund initiated or augmented in January 2003 helped boost performance very early in the period. Following a prolonged period when utilities companies had difficulty securing financing, lenders eased credit restrictions. The outlook for the energy-generation industry brightened, triggering advances for the Fund's holdings of Tennessee Gas Pipeline Co. and Dynegy Holdings, Inc. There were some holdings that detracted from performance over the period. We were disappointed with our investments in AK Steel Corp. and Levi Strauss & Co. We did not accurately assess the degree to which foreign competition was hurting AK Steel and were unpleasantly surprised by its weak September-quarter earnings. We also discovered that the company understated the amount of its unfunded pension liabilities. Even thorough research was no protection against this intentional obfuscation. As for Levi Strauss, their earnings fell short of expectations. We've maintained our position, for two reasons. First, "Levi's" is a strong retail brand name and has continued to give the company underlying value. Second, we suspect the owners of this privately held company are highly motivated to make its coupon payments; if not, they could lose control. COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the performance of a hypothetical $10,000 investment in each share class of the Fund held until December 31, 2003. In the case of Non-Service, performance is measured over a ten-year period. In the case of Service shares, performance is measured from inception of the class on September 18, 2001. Performance information does not reflect charges that apply to separate accounts investing in the Fund. If these charges were taken into account, performance would be lower. The graphs assume that all dividends and capital gains distributions were reinvested in additional shares. The Fund's performance is compared to the performance of the Merrill Lynch High Yield Master Index, an unmanaged index of U.S. corporate and government bonds that is a measure of the performance of the high-yield corporate bond market. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the index. 3 | OPPENHEIMER HIGH INCOME FUND/VA FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- NON-SERVICE SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer High Income Fund/VA (Non-Service) Merrill Lynch High Yield Master Index [LINE GRAPH] Oppenheimer High Income Merrill Lynch High Yield Fund/VA (Non-Service) Master Index 12/31/1993 $10,000 $10,000 03/31/1994 9,812 9,815 06/30/1994 9,839 9,701 09/30/1994 9,934 9,834 12/31/1994 9,682 9,884 03/31/1995 10,109 10,480 06/30/1995 10,757 11,145 09/30/1995 11,162 11,470 12/31/1995 11,654 11,852 03/31/1996 12,083 12,024 06/30/1996 12,388 12,189 09/30/1996 12,911 12,665 12/31/1996 13,432 13,163 03/31/1997 13,487 13,301 06/30/1997 14,067 13,932 09/30/1997 14,841 14,477 12/31/1997 15,073 14,851 03/31/1998 15,667 15,265 06/30/1998 15,791 15,520 09/30/1998 14,666 14,965 12/31/1998 15,119 15,395 03/31/1999 15,649 15,561 06/30/1999 15,693 15,666 09/30/1999 15,517 15,470 12/31/1999 15,767 15,637 03/31/2000 15,554 15,355 06/30/2000 15,668 15,451 09/30/2000 15,865 15,661 12/31/2000 15,177 15,044 03/31/2001 15,820 15,979 06/30/2001 15,476 15,776 09/30/2001 14,588 15,139 12/31/2001 15,476 15,978 03/31/2002 15,568 16,290 06/30/2002 14,924 15,290 09/30/2002 14,381 14,807 12/31/2002 15,105 15,795 03/31/2003 15,919 16,885 06/30/2003 17,333 18,518 09/30/2003 17,789 18,986 12/31/2003 18,724 20,095 AVERAGE ANNUAL TOTAL RETURNS OF NON-SERVICE SHARES OF THE FUND AT 12/31/03 1-Year 23.96% 5-Year 4.37% 10-Year 6.47% Inception Date 4/30/86 SERVICE SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer High Income Fund/VA (Service) Merrill Lynch High Yield Master Index [LINE GRAPH] Oppenheimer High Income Merrill Lynch High Yield Fund/VA (Service Shares) Master Index 09/18/2001 $10,000 $10,000 09/30/2001 9,583 10,000 12/31/2001 10,167 10,554 03/31/2002 10,225 10,761 06/30/2002 9,789 10,100 09/30/2002 9,432 9,781 12/31/2002 9,895 10,433 03/31/2003 10,436 11,153 06/30/2003 11,350 12,232 09/30/2003 11,649 12,541 12/31/2003 12,249 13,274 AVERAGE ANNUAL TOTAL RETURNS OF SERVICE SHARES OF THE FUND AT 12/31/03 1-Year 23.79% Since Inception 9.28% Inception Date 9/18/01 THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULT. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR MORE CURRENT PERFORMANCE DATA, CALL US AT 1.800.981.2871. THE FUND'S TOTAL RETURNS SHOULD NOT BE EXPECTED TO BE THE SAME AS THE RETURNS OF OTHER FUNDS, WHETHER OR NOT BOTH FUNDS HAVE THE SAME PORTFOLIO MANAGERS AND/OR SIMILAR NAMES. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR OR CALLING US AT 1.800.981.2871. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. GRAPHS ARE NOT DRAWN TO SAME SCALE. AN EXPLANATION OF THE CALCULATION OF THE PERFORMANCE IS IN THE STATEMENT OF ADDITIONAL INFORMATION. 4 | OPPENHEIMER HIGH INCOME FUND/VA STATEMENT OF INVESTMENTS DECEMBER 31, 2003 - ---------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- ASSET-BACKED SECURITIES--0.1% Consumer Credit Reference Index Securities Program, Credit Card Asset-Backed Certificates, Series 2002-B, Cl. FX, 10.421%, 3/22/07 1 (Cost $497,606) $ 500,000 $ 526,130 - ---------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS--1.2% Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates, Series 1996-D2, Cl. A3, 7.515%, 2/14/29 2 3,000,000 3,156,246 - ---------------------------------------------------------------- First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates: Series 1997-CHL1, Cl. D, 7.96%, 4/29/39 1,2 300,000 299,813 Series 1997-CHL1, Cl. E, 7.96%, 4/29/39 1,2 1,500,000 1,216,875 - ---------------------------------------------------------------- Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates, Series 1997-RR, Cl. D, 7.709%, 4/30/39 2,3 2,150,116 2,016,793 - ---------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Inc., Commercial Mtg. Pass-Through Certificates, Series 1996-B, Cl. 1, 6.865%, 4/25/26 1,2 255,525 222,147 -------------- Total Mortgage-Backed Obligations (Cost $6,655,477) 6,911,874 - ---------------------------------------------------------------- LOAN PARTICIPATIONS--0.0% Telergy, Inc., Sr. Sec. Credit Facilities Term Loan Participation Nts., Tranche A, 11.111%, 1/1/02 1,4,5 (Cost $966,644) 986,362 -- - ---------------------------------------------------------------- CORPORATE BONDS AND NOTES--74.3% - ---------------------------------------------------------------- CONSUMER DISCRETIONARY--21.9% - ---------------------------------------------------------------- AUTO COMPONENTS--2.3% Collins & Aikman Floorcoverings, Inc., 9.75% Sr. Sub. Nts., Series B, 2/15/10 800,000 860,000 - ---------------------------------------------------------------- Collins & Aikman Products Co., 10.75% Sr. Nts., 12/31/11 500,000 493,750 - ---------------------------------------------------------------- Dana Corp.: 9% Unsec. Nts., 8/15/11 1,480,000 1,790,800 10.125% Nts., 3/15/10 500,000 585,000 - ---------------------------------------------------------------- Dura Operating Corp.: 8.625% Sr. Nts., Series B, 4/15/12 1,000,000 1,070,000 9% Sr. Sub. Nts., Series B, 5/1/09 [EUR] 100,000 122,982 9% Sr. Unsec. Sub. Nts., Series D, 5/1/09 200,000 201,000 - ---------------------------------------------------------------- Eagle-Picher, Inc., 9.75% Sr. Nts., 9/1/13 3 1,200,000 1,302,000 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- AUTO COMPONENTS Continued Keystone Automotive Operations, Inc., 9.75% Sr. Sub. Nts., 11/1/13 3 $ 200,000 $ 216,000 - ---------------------------------------------------------------- Lear Corp., 8.11% Sr. Unsec. Nts., Series B, 5/15/09 1,300,000 1,535,625 - ---------------------------------------------------------------- Metaldyne Corp.: 10% Sr. Nts., 11/1/13 3 500,000 507,500 11% Sr. Sub. Nts., 6/15/12 750,000 693,750 - ---------------------------------------------------------------- Stoneridge, Inc., 11.50% Sr. Nts., 5/1/12 1,400,000 1,659,000 - ---------------------------------------------------------------- Tenneco Automotive, Inc., 10.25% Sr. Sec. Nts., Series B, 7/15/13 900,000 1,028,250 - ---------------------------------------------------------------- United Components, Inc., 9.375% Sr. Sub. Nts., 6/15/13 400,000 439,000 -------------- 12,504,657 - ---------------------------------------------------------------- AUTOMOBILES--0.5% DirecTV Holdings LLC/DirecTV Financing Co., Inc., 8.375% Sr. Unsec. Nts., 3/15/13 2,300,000 2,679,500 - ---------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--5.6% Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 1 940,000 343,100 - ---------------------------------------------------------------- Aztar Corp., 9% Sr. Unsec. Sub. Nts., 8/15/11 450,000 496,125 - ---------------------------------------------------------------- Boca Resorts, Inc., 9.875% Sr. Sub. Nts., 4/15/09 800,000 856,000 - ---------------------------------------------------------------- Boyd Gaming Corp., 8.75% Sr. Sub. Nts., 4/15/12 800,000 882,000 - ---------------------------------------------------------------- Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/1995 1,4,5 9,500 -- - ---------------------------------------------------------------- Coast Hotels & Casinos, Inc., 9.50% Sr. Unsec. Sub. Nts., 4/1/09 1,100,000 1,168,750 - ---------------------------------------------------------------- Dominos, Inc., 8.25% Sr. Sub. Nts., 7/1/11 3 800,000 861,000 - ---------------------------------------------------------------- Gaylord Entertainment Co., 8% Sr. Nts., 11/15/13 3 700,000 742,000 - ---------------------------------------------------------------- Herbst Gaming, Inc., 10.75% Sr. Sec. Nts., 9/1/08 1 250,000 282,500 - ---------------------------------------------------------------- Hilton Hotels Corp.: 7.625% Nts., 5/15/08 700,000 782,250 7.625% Nts., 12/1/12 500,000 564,375 - ---------------------------------------------------------------- Hollywood Park, Inc., 9.25% Sr. Unsec. Sub. Nts., Series B, 2/15/07 1,000,000 1,040,000 - ---------------------------------------------------------------- Intrawest Corp., 7.50% Sr. Nts., 10/15/13 3 917,000 958,265 - ---------------------------------------------------------------- Isle of Capri Casinos, Inc., 9% Sr. Sub. Nts., 3/15/12 600,000 670,500 - ---------------------------------------------------------------- John Q. Hammons Hotels, Inc., 8.875% Sr. Nts., Series B, 5/15/12 900,000 996,750 - ---------------------------------------------------------------- Jupiters Ltd., 8.50% Sr. Unsec. Nts., 3/1/06 1 1,000,000 1,095,000 5 | OPPENHEIMER HIGH INCOME FUND/VA STATEMENT OF INVESTMENTS CONTINUED - ---------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE Continued Mandalay Resort Group, 10.25% Sr. Unsec. Sub. Nts., Series B, 8/1/07 $ 800,000 $ 928,000 - ---------------------------------------------------------------- MGM Mirage, Inc.: 8.375% Sr. Unsec. Sub. Nts., 2/1/11 1,700,000 1,933,750 9.75% Sr. Unsec. Sub. Nts., 6/1/07 500,000 572,500 - ---------------------------------------------------------------- Mohegan Tribal Gaming Authority: 6.375% Sr. Sub. Nts., 7/15/09 800,000 830,000 8% Sr. Sub. Nts., 4/1/12 700,000 761,250 8.375% Sr. Sub. Nts., 7/1/11 1 1,200,000 1,314,000 - ---------------------------------------------------------------- Park Place Entertainment Corp.: 7.875% Sr. Sub. Nts., 3/15/10 1,500,000 1,668,750 9.375% Sr. Unsec. Sub. Nts., 2/15/07 500,000 567,500 - ---------------------------------------------------------------- Penn National Gaming, Inc., 8.875% Sr. Sub. Nts., 3/15/10 1 600,000 654,000 - ---------------------------------------------------------------- Prime Hospitality Corp., 8.375% Sr. Sub. Nts., 5/1/12 400,000 415,000 - ---------------------------------------------------------------- River Rock Entertainment LLC, 9.75% Sr. Nts., 11/1/11 3 600,000 648,000 - ---------------------------------------------------------------- Royal Caribbean Cruises Ltd.: 8% Sr. Unsec. Nts., 5/15/10 200,000 219,000 8.75% Sr. Unsub. Nts., 2/2/11 600,000 681,000 - ---------------------------------------------------------------- Six Flags, Inc.: 8.875% Sr. Nts., 2/1/10 400,000 412,500 9.75% Sr. Nts., 4/15/13 1,500,000 1,586,250 - ---------------------------------------------------------------- Starwood Hotels & Resorts Worldwide, Inc., 7.875% Sr. Nts., 5/1/12 1,500,000 1,695,000 - ---------------------------------------------------------------- Sun International Hotels Ltd., 8.875% Sr. Unsec. Sub. Nts., 8/15/11 1,000,000 1,097,500 - ---------------------------------------------------------------- Trump Casino Holdings LLC/Trump Casino Funding, Inc., 11.625% Sr. Sec. Nts., 3/15/10 600,000 577,500 - ---------------------------------------------------------------- Universal City Development Partners Ltd., 11.75% Sr. Nts., 4/1/10 3 1,000,000 1,175,000 - ---------------------------------------------------------------- Vail Resorts, Inc., 8.75% Sr. Unsec. Sub. Nts., 5/15/09 700,000 742,000 - ---------------------------------------------------------------- Venetian Casino Resort LLC/ Las Vegas Sands, Inc., 11% Sec. Nts., 6/15/10 850,000 990,250 -------------- 31,207,365 - ---------------------------------------------------------------- HOUSEHOLD DURABLES--1.8% Beazer Homes USA, Inc., 8.375% Sr. Nts., 4/15/12 500,000 553,750 - ---------------------------------------------------------------- Blount, Inc., 13% Sr. Sub. Nts., 8/1/09 650,000 703,625 - ---------------------------------------------------------------- D.R. Horton, Inc., 9.75% Sr. Sub. Nts., 9/15/10 300,000 358,500 - ---------------------------------------------------------------- K. Hovnanian Enterprises, Inc., 8.875% Sr. Sub. Nts., 4/1/12 800,000 884,000 - ---------------------------------------------------------------- KB Home: 8.625% Sr. Sub. Nts., 12/15/08 150,000 168,750 9.50% Sr. Unsec. Sub. Nts., 2/15/11 350,000 392,000 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- HOUSEHOLD DURABLES Continued Meritage Corp., 9.75% Sr. Unsec. Nts., 6/1/11 $ 1,200,000 $ 1,347,000 - ---------------------------------------------------------------- Norcraft Cos. LP, 9% Sr. Sub. Nts., 11/1/11 3 300,000 325,500 - ---------------------------------------------------------------- Salton, Inc., 10.75% Sr. Unsec. Sub. Nts., 12/15/05 500,000 512,500 - ---------------------------------------------------------------- Standard Pacific Corp., 9.25% Sr. Sub. Nts., 4/15/12 700,000 784,000 - ---------------------------------------------------------------- Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 500,000 554,375 - ---------------------------------------------------------------- WCI Communities, Inc.: 9.125% Sr. Sub. Nts., 5/1/12 800,000 884,000 10.625% Sr. Unsec. Sub. Nts., 2/15/11 600,000 681,000 - ---------------------------------------------------------------- William Lyon Homes, Inc., 10.75% Sr. Nts., 4/1/13 800,000 914,000 - ---------------------------------------------------------------- Williams Scotsman, Inc., 9.875% Sr. Unsec. Nts., 6/1/07 1,000,000 1,017,500 -------------- 10,080,500 - ---------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS--0.2% Remington Arms Co., Inc., 10.50% Sr. Unsec. Nts., 2/1/11 800,000 856,000 - ---------------------------------------------------------------- MEDIA--9.3% Adelphia Communications Corp.: 7.875% Sr. Unsec. Nts., 5/1/09 4,5 360,000 331,200 8.125% Sr. Nts., Series B, 7/15/03 4,5 1,000,000 930,000 8.375% Sr. Nts., Series B, 2/1/08 4,5 1,000,000 937,500 10.875% Sr. Unsec. Nts., 10/1/10 4,5 1,000,000 940,000 - ---------------------------------------------------------------- Allbritton Communications Co., 7.75% Sr. Unsec. Sub. Nts., 12/15/12 700,000 729,750 - ---------------------------------------------------------------- AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11 2,200,000 2,321,000 - ---------------------------------------------------------------- American Media Operations, Inc., 8.875% Sr. Unsec. Sub. Nts., 1/15/11 600,000 654,000 - ---------------------------------------------------------------- Block Communications, Inc., 9.25% Sr. Sub. Nts., 4/15/09 600,000 648,000 - ---------------------------------------------------------------- British Sky Broadcasting Group plc, 8.20% Sr. Unsec. Nts., 7/15/09 700,000 834,495 - ---------------------------------------------------------------- CanWest Media, Inc., 7.625% Sr. Unsec. Sub. Nts., Cl. B, 4/15/13 300,000 330,000 - ---------------------------------------------------------------- Carmike Cinemas, Inc., 10.375% Gtd. Sr. Sub. Nts., Series B, 2/1/09 1,250,000 1,318,750 - ---------------------------------------------------------------- CBD Media LLC/CBD Finance, Inc., 8.625% Sr. Sub. Nts., 6/1/11 3 200,000 221,000 - ---------------------------------------------------------------- Charter Communications Holdings II, 10.25% Sr. Unsec. Nts., 9/15/10 3 1,600,000 1,688,000 - ---------------------------------------------------------------- Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp.: 0%/11.75% Sr. Unsec. Sub. Disc. Nts., 5/15/11 6 1,500,000 1,012,500 6 | OPPENHEIMER HIGH INCOME FUND/VA PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- MEDIA Continued Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp.: Continued 0%/9.92% Sr. Unsec. Disc. Nts., 4/1/11 6 $ 3,200,000 $ 2,752,000 8.625% Sr. Unsec. Nts., 4/1/09 3,500,000 3,071,250 10% Sr. Nts., 4/1/09 500,000 447,500 11.125% Sr. Unsec. Nts., 1/15/11 600,000 553,500 - ---------------------------------------------------------------- Cinemark USA, Inc., 9% Sr. Unsec. Sub. Nts., 2/1/13 800,000 904,000 - ---------------------------------------------------------------- Corus Entertainment, Inc., 8.75% Sr. Sub. Nts., 3/1/12 800,000 884,000 - ---------------------------------------------------------------- CSC Holdings, Inc., 7.625% Sr. Unsec. Unsub. Nts., Series B, 4/1/11 2,800,000 2,961,000 - ---------------------------------------------------------------- Diva Systems Corp., 12.625% Sr. Unsec. Disc. Nts., Series B, 3/1/08 1,4,5 500,000 32,500 - ---------------------------------------------------------------- EchoStar DBS Corp.: 9.125% Sr. Nts., 1/15/09 195,000 219,131 9.375% Sr. Unsec. Nts., 2/1/09 450,000 473,063 10.375% Sr. Unsec. Nts., 10/1/07 3,000,000 3,303,750 - ---------------------------------------------------------------- Emmis Communications Corp.: 0%/12.50% Sr. Unsec. Disc. Nts., 3/15/11 6 500,000 465,625 8.125% Sr. Unsec. Sub. Nts., Series B, 3/15/09 1,300,000 1,369,875 - ---------------------------------------------------------------- Entravision Communications Corp., 8.125% Sr. Sub. Nts., 3/15/09 600,000 645,000 - ---------------------------------------------------------------- Granite Broadcasting Corp., 9.75% Sr. Sec. Nts., 12/1/10 1,200,000 1,203,000 - ---------------------------------------------------------------- Gray Television, Inc., 9.25% Sr. Sub. Nts., 12/15/11 500,000 560,000 - ---------------------------------------------------------------- Hollinger International Publishing, Inc., 9% Sr. Unsec. Nts., 12/15/10 600,000 640,500 - ---------------------------------------------------------------- Houghton Mifflin Co., 8.25% Sr. Unsec. Nts., 2/1/11 500,000 537,500 - ---------------------------------------------------------------- Lamar Media Corp., 7.25% Sr. Unsec. Sub. Nts., 1/1/13 200,000 216,000 - ---------------------------------------------------------------- Liberty Media Corp., 7.875% Sr. Nts., 7/15/09 1,750,000 2,029,937 - ---------------------------------------------------------------- Lin Television Corp., 6.50% Sr. Sub. Nts., 5/15/13 3 500,000 503,125 - ---------------------------------------------------------------- LodgeNet Entertainment Corp., 9.50% Sr. Sub. Debs., 6/15/13 1 400,000 440,000 - ---------------------------------------------------------------- Mediacom LLC/Mediacom Capital Corp., 9.50% Sr. Unsec. Nts., 1/15/13 1,000,000 1,065,000 - ---------------------------------------------------------------- News America Holdings, Inc., 8.875% Sr. Debs., 4/26/23 625,000 803,294 - ---------------------------------------------------------------- PanAmSat Corp., 8.50% Sr. Unsec. Nts., 2/1/12 1,200,000 1,338,000 - ---------------------------------------------------------------- PRIMEDIA, Inc., 8% Sr. Nts., 5/15/13 3 1,700,000 1,742,500 - ---------------------------------------------------------------- R.H. Donnelley Financial Corp. I: 8.875% Sr. Nts., 12/15/10 3 700,000 791,000 10.875% Sr. Sub. Nts., 12/15/12 3 1,000,000 1,191,250 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 MEDIA Continued Radio One, Inc., 8.875% Sr. Unsec. Sub. Nts., Series B, 7/1/11 $ 300,000 $ 332,250 - ---------------------------------------------------------------- Regal Cinemas, Inc., 9.375% Sr. Sub. Nts., Series B, 2/1/12 1,200,000 1,362,000 - ---------------------------------------------------------------- Sinclair Broadcast Group, Inc., 8% Sr. Unsec. Sub. Nts., 3/15/12 1,600,000 1,736,000 - ---------------------------------------------------------------- Spanish Broadcasting System, Inc., 9.625% Sr. Unsec. Sub. Nts., 11/1/09 600,000 643,500 - ---------------------------------------------------------------- Time Warner, Inc., 6.875% Nts., 5/1/12 850,000 958,358 - ---------------------------------------------------------------- Vertis, Inc.: 9.75% Sr. Sec. Nts., 4/1/09 500,000 545,625 10.875% Sr. Unsec. Nts., Series B, 6/15/09 200,000 213,500 - ---------------------------------------------------------------- Vivendi Universal SA, 9.25% Sr. Nts., 4/15/10 3 800,000 952,000 - ---------------------------------------------------------------- WRC Media, Inc./Weekly Reader Corp./CompassLearning, Inc., 12.75% Sr. Sub. Nts., 11/15/09 1,100,000 1,056,000 -------------- 51,838,728 - ---------------------------------------------------------------- MULTILINE RETAIL--0.5% J.C. Penney Co., Inc.: 7.60% Nts., 4/1/07 1,000,000 1,108,750 8% Nts., 3/1/10 800,000 921,000 - ---------------------------------------------------------------- Saks, Inc.: 8.25% Sr. Unsec. Nts., 11/15/08 250,000 278,750 9.875% Nts., 10/1/11 600,000 717,000 -------------- 3,025,500 - ---------------------------------------------------------------- SPECIALTY RETAIL--1.3% Asbury Automotive Group, Inc., 9% Sr. Sub. Nts., 6/15/12 600,000 637,500 - ---------------------------------------------------------------- AutoNation, Inc., 9% Sr. Unsec. Nts., 8/1/08 1,200,000 1,383,000 - ---------------------------------------------------------------- Building Materials Corp., 8% Sr. Nts., 12/1/08 300,000 297,000 - ---------------------------------------------------------------- CSK Auto, Inc., 12% Sr. Unsec. Nts., 6/15/06 900,000 1,037,250 - ---------------------------------------------------------------- Finlay Enterprises, Inc., 9% Debs., 5/1/08 700,000 720,125 - ---------------------------------------------------------------- Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 600,000 624,000 - ---------------------------------------------------------------- Gap, Inc. (The), 10.55% Unsub. Nts., 12/15/08 200,000 247,500 - ---------------------------------------------------------------- Hollywood Entertainment Corp., 9.625% Sr. Sub. Nts., 3/15/11 1 800,000 864,000 - ---------------------------------------------------------------- Petco Animal Supplies, Inc., 10.75% Sr. Sub. Nts., 11/1/11 1 750,000 881,250 - ---------------------------------------------------------------- Rent-A-Center, Inc., 7.50% Sr. Sub. Nts., Cl. B, 5/1/10 350,000 371,000 7 | OPPENHEIMER HIGH INCOME FUND/VA STATEMENT OF INVESTMENTS CONTINUED - ---------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- SPECIALTY RETAIL--1.3% United Auto Group, Inc., 9.625% Sr. Unsec. Sub. Nts., 3/15/12 $ 200,000 $ 225,000 -------------- 7,287,625 - ---------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS--0.4% Broder Bros. Co., 11.25% Sr. Nts., 10/15/10 3 700,000 693,000 - ---------------------------------------------------------------- Galey & Lord, Inc., 9.125% Sr. Unsec. Sub. Nts., 3/1/08 1,4,5 700,000 8,750 - ---------------------------------------------------------------- Levi Strauss & Co.: 7% Unsec. Nts., 11/1/06 300,000 194,250 11.625% Sr. Unsec. Nts., 1/15/08 100,000 65,750 12.25% Sr. Nts., 12/15/12 300,000 196,500 - ---------------------------------------------------------------- Oxford Industries, Inc., 8.875% Sr. Nts., 6/1/11 3 500,000 549,375 - ---------------------------------------------------------------- Russell Corp., 9.25% Sr. Nts., 5/1/10 600,000 624,750 -------------- 2,332,375 - ---------------------------------------------------------------- CONSUMER STAPLES--3.7% - ---------------------------------------------------------------- BEVERAGES--0.1% Constellation Brands, Inc., 8.125% Sr. Sub. Nts., 1/15/12 500,000 550,000 - ---------------------------------------------------------------- FOOD & STAPLES RETAILING--0.7% Delhaize America, Inc., 8.125% Unsub. Debs., 4/15/11 1,500,000 1,732,500 - ---------------------------------------------------------------- Fleming Cos., Inc., 10.125% Sr. Unsec. Nts., 4/1/08 4 500,000 112,500 - ---------------------------------------------------------------- Great Atlantic & Pacific Tea Co., Inc. (The), 9.125% Sr. Nts., 12/15/11 400,000 368,000 - ---------------------------------------------------------------- Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 325,000 338,000 - ---------------------------------------------------------------- Real Time Data Co., 13% Disc. Nts., 5/31/09 1,4,5,7 476,601 -- - ---------------------------------------------------------------- Rite Aid Corp.: 8.125% Sr. Sec. Nts., 5/1/10 900,000 972,000 9.50% Sr. Sec. Nts., 2/15/11 450,000 509,625 -------------- 4,032,625 - ---------------------------------------------------------------- FOOD PRODUCTS--2.3% American Seafoods Group LLC, 10.125% Sr. Sub. Nts., 4/15/10 1 500,000 596,875 - ---------------------------------------------------------------- Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08 4 500,000 392,500 - ---------------------------------------------------------------- Burns Philp Capital Pty Ltd., 9.75% Sr. Sub. Nts., 7/15/12 3 400,000 430,000 - ---------------------------------------------------------------- Del Monte Corp.: 8.625% Sr. Sub. Nts., 12/15/12 1,000,000 1,100,000 9.25% Sr. Unsec. Sub. Nts., 5/15/11 100,000 111,000 - ---------------------------------------------------------------- Doane Pet Care Co.: 9.75% Sr. Unsec. Sub. Nts., 5/15/07 700,000 630,000 10.75% Sr. Nts., 3/1/10 1 1,100,000 1,144,000 - ---------------------------------------------------------------- Dole Food Co., Inc.: 8.625% Sr. Nts., 5/1/09 900,000 992,250 8.875% Sr. Unsec. Nts., 3/15/11 400,000 441,000 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- FOOD PRODUCTS Continued Hines Nurseries, Inc., 10.25% Sr. Nts., 10/1/11 3 $ 600,000 $ 657,000 - ---------------------------------------------------------------- Michael Foods, Inc., 8% Sr. Sub. Nts., 11/15/13 3 500,000 523,750 - ---------------------------------------------------------------- New World Pasta Co., 9.25% Sr. Nts., 2/15/09 1 200,000 53,000 - ---------------------------------------------------------------- Pinnacle Foods Holding Corp., 8.25% Sr. Sub. Nts., 12/1/13 3 500,000 520,000 - ---------------------------------------------------------------- Smithfield Foods, Inc.: 7.625% Sr. Unsec. Sub. Nts., 2/15/08 925,000 938,875 8% Sr. Nts., Series B, 10/15/09 900,000 954,000 - ---------------------------------------------------------------- Swift & Co., 10.125% Sr. Nts., 10/1/09 1,000,000 1,065,000 - ---------------------------------------------------------------- Tembec Industries, Inc., 7.75% Sr. Nts., 3/15/12 700,000 700,000 - ---------------------------------------------------------------- United Biscuits Finance plc, 10.625% Sr. Sub. Nts., 4/15/11 1 [EUR] 1,000,000 1,431,633 -------------- 12,680,883 - ---------------------------------------------------------------- HOUSEHOLD PRODUCTS--0.5% AKI, Inc., 10.50% Sr. Unsec. Nts., 7/1/08 1 1,000,000 1,045,000 - ---------------------------------------------------------------- Armkel LLC/Armkel Finance, Inc., 9.50% Sr. Sub. Nts., 8/15/09 600,000 661,500 - ---------------------------------------------------------------- Holmes Products Corp., 9.875% Sr. Unsec. Sub. Nts., Series B, 11/15/07 1 300,000 311,250 - ---------------------------------------------------------------- Playtex Products, Inc., 9.375% Sr. Unsec. Sub. Nts., 6/1/11 500,000 507,500 - ---------------------------------------------------------------- Revlon Consumer Products Corp., 12% Sr. Sec. Nts., 12/1/05 400,000 402,000 - ---------------------------------------------------------------- Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08 1,4,5 600,000 -- -------------- 2,927,250 - ---------------------------------------------------------------- PERSONAL PRODUCTS--0.1% French Fragrances, Inc., 10.375% Sr. Unsec. Nts., Series B, 5/15/07 382,000 397,120 - ---------------------------------------------------------------- ENERGY--4.6% - ---------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--1.4% BRL Universal Equipment Corp., 8.875% Sr. Sec. Nts., 2/15/08 1 750,000 808,125 - ---------------------------------------------------------------- Dresser, Inc., 9.375% Sr. Sub. Nts., 4/15/11 400,000 437,000 - ---------------------------------------------------------------- Grant Prideco Escrow Corp., 9% Sr. Unsec. Nts., 12/15/09 300,000 332,250 - ---------------------------------------------------------------- Hanover Compress Co., 8.625% Sr. Nts., 12/15/10 700,000 731,500 - ---------------------------------------------------------------- Hanover Equipment Trust 2001A, 8.50% Sr. Sec. Nts., Series A, 9/1/08 500,000 532,500 - ---------------------------------------------------------------- Hornbeck-Leevac Marine Services, Inc., 10.625% Sr. Nts., 8/1/08 1,750,000 1,942,500 - ---------------------------------------------------------------- Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08 1,600,000 1,512,000 8 | OPPENHEIMER HIGH INCOME FUND/VA PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES Continued Petroleum Helicopters, Inc., 9.375% Sr. Nts., 5/1/09 $ 600,000 $ 640,500 - ---------------------------------------------------------------- Universal Compression, Inc., 7.25% Sr. Unsec. Sub. Nts., 5/15/10 800,000 836,000 -------------- 7,772,375 - ---------------------------------------------------------------- OIL & GAS--3.2% Belden & Blake Corp., 9.875% Sr. Sub. Nts., 6/15/07 500,000 495,000 - ---------------------------------------------------------------- Chesapeake Energy Corp.: 8.125% Sr. Unsec. Nts., 4/1/11 1,000,000 1,115,000 8.375% Sr. Unsec. Nts., 11/1/08 1,000,000 1,105,000 9% Sr. Nts., 8/15/12 300,000 346,500 - ---------------------------------------------------------------- El Paso Energy Partners LP, 8.50% Sr. Unsec. Sub. Nts., Series B, 6/1/11 469,000 529,970 - ---------------------------------------------------------------- Forest Oil Corp., 7.75% Sr. Nts., 5/1/14 1,000,000 1,062,500 - ---------------------------------------------------------------- Frontier Oil Corp., 11.75% Sr. Nts., 11/15/09 800,000 908,000 - ---------------------------------------------------------------- GulfTerra Energy Partners LP: 8.50% Sr. Unsec. Sub. Nts., Series B, 6/1/10 425,000 484,500 10.625% Sr. Sub. Nts., 12/1/12 469,000 583,905 - ---------------------------------------------------------------- Leviathan Gas Pipeline Partners LP/Leviathan Finance Corp., 10.375% Sr. Unsec. Sub. Nts., Series B, 6/1/09 1 500,000 545,000 - ---------------------------------------------------------------- Newfield Exploration Co., 8.375% Sr. Sub. Nts., 8/15/12 600,000 675,000 - ---------------------------------------------------------------- Paramount Resources Ltd., 7.875% Sr. Nts., 11/1/10 700,000 700,000 - ---------------------------------------------------------------- Pioneer Natural Resources Co., 7.50% Sr. Nts., 4/15/12 1,000,000 1,151,148 - ---------------------------------------------------------------- Premcor Refining Group, Inc., 9.50% Sr. Nts., 2/1/13 1 1,300,000 1,488,500 - ---------------------------------------------------------------- Stone Energy Corp., 8.25% Sr. Unsec. Sub. Nts., 12/15/11 800,000 876,000 - ---------------------------------------------------------------- Teekay Shipping Corp., 8.875% Sr. Nts., 7/15/11 575,000 655,500 - ---------------------------------------------------------------- Tesoro Petroleum Corp.: 8% Sr. Sec. Nts., 4/15/08 1,000,000 1,067,500 9.625% Sr. Sub. Nts., 4/1/12 700,000 770,000 - ---------------------------------------------------------------- Tom Brown, Inc., Units (each unit consists of $512 principal amount of 7.25% sr. sub. nts., due 2013 and $488 principal amount of Tom Brown Resources Funding Corp., 7.25% sr. sub. nts., due 2013) 8 400,000 425,000 - ---------------------------------------------------------------- Westport Resources Corp., 8.25% Sr. Unsec. Sub. Nts., 11/1/11 1,400,000 1,547,000 - ---------------------------------------------------------------- XTO Energy, Inc., 7.50% Sr. Nts., 4/15/12 1,000,000 1,135,000 -------------- 17,666,023 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- FINANCIALS--2.6% - ---------------------------------------------------------------- CAPITAL MARKETS--0.6% American Color Graphics, Inc., 10% Sr. Sec. Nts., 6/15/10 3 $ 400,000 $ 412,000 - ---------------------------------------------------------------- Berry Plastics Corp.: 10.75% Sr. Sub. Nts., 7/15/12 800,000 925,000 10.75% Sr. Sub. Nts., 7/15/12 3 800,000 925,000 - ---------------------------------------------------------------- Decrane Aircraft Holdings, Inc., 12% Sr. Unsec. Sub. Nts., Series B, 9/30/08 1,550,000 798,250 -------------- 3,060,250 - ---------------------------------------------------------------- COMMERCIAL BANKS--0.3% Bank Plus Corp., 12% Sr. Nts., 7/18/07 1 517,000 555,775 - ---------------------------------------------------------------- Local Financial Corp., 11% Sr. Nts., 9/8/04 1 800,000 838,000 - ---------------------------------------------------------------- Western Financial Bank, 9.625% Unsec. Sub. Debs., 5/15/12 400,000 448,000 -------------- 1,841,775 - ---------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--0.3% Bombardier Recreational, Inc., 8.375% Sr. Sub. Nts., 12/15/13 3 550,000 577,500 - ---------------------------------------------------------------- Couche-Tard US LP/Couche-Tard Finance Corp., 7.50% Sr. Sub. Nts., 12/15/13 3 300,000 315,750 - ---------------------------------------------------------------- Finova Group, Inc. (The), 7.50% Nts., 11/15/09 500,000 302,500 - ---------------------------------------------------------------- LaBranche & Co., Inc., 12% Sr. Unsec. Sub. Nts., 3/2/07 600,000 609,000 -------------- 1,804,750 - ---------------------------------------------------------------- REAL ESTATE--1.2% Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 1 200,000 203,500 - ---------------------------------------------------------------- Corrections Corp. of America: 7.50% Sr. Nts., 5/1/11 500,000 527,500 9.875% Sr. Nts., 5/1/09 500,000 560,625 - ---------------------------------------------------------------- Felcor Lodging LP: 9% Sr. Nts., 6/1/11 780,000 850,200 10% Sr. Unsec. Nts., 9/15/08 200,000 217,000 - ---------------------------------------------------------------- Felcor Suites LP, 7.375% Sr. Nts., 10/1/04 200,000 205,750 - ---------------------------------------------------------------- HMH Properties, Inc., 7.875% Sr. Nts., Series B, 8/1/08 1,750,000 1,828,750 - ---------------------------------------------------------------- MeriStar Hospitality Corp.: 9.125% Sr. Unsec. Nts., 1/15/11 400,000 426,000 10.50% Sr. Unsec. Nts., 6/15/09 350,000 381,500 - ---------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts., Series B, 4/1/08 1,300,000 1,363,375 -------------- 6,564,200 9 | OPPENHEIMER HIGH INCOME FUND/VA STATEMENT OF INVESTMENTS CONTINUED - ---------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE--0.2% WMC Finance Co., 11.75% Sr. Nts., 12/15/08 3 $ 1,000,000 $ 1,002,500 - ---------------------------------------------------------------- HEALTH CARE--4.7% - ---------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--0.7% Dade Behring Holdings, Inc., 11.91% Sr. Unsec. Sub. Nts., 10/3/10 1 200,000 231,000 - ---------------------------------------------------------------- Fisher Scientific International, Inc., 8.125% Sr. Sub. Nts., 5/1/12 782,000 842,605 - ---------------------------------------------------------------- HMP Equity Holdings Corp., Units (each unit consists of $1,000 principal amount of 15.43% sr. sec. disc. nts., 5/15/08 and one warrant to purchase 2.8094 shares of Huntsman Corp. common stock) 8,9 1,000,000 615,000 - ---------------------------------------------------------------- Sybron Dental Specialties, Inc., 8.125% Sr. Sub. Nts., 6/15/12 700,000 764,750 - ---------------------------------------------------------------- Universal Hospital Services, Inc., 10.125% Sr. Nts., 11/1/11 3 800,000 844,000 - ---------------------------------------------------------------- Vanguard Health Systems, Inc., 9.75% Sr. Unsec. Sub. Nts., 8/1/11 500,000 545,000 -------------- 3,842,355 - ---------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--3.9% Alderwoods Group, Inc., 12.25% Sr. Nts., 1/2/09 700,000 791,000 - ---------------------------------------------------------------- Alliance Imaging, Inc., 10.375% Sr. Unsec. Sub. Nts., 4/15/11 300,000 319,500 - ---------------------------------------------------------------- AmeriPath, Inc., 10.50% Sr. Unsec. Sub. Nts., 4/1/13 700,000 749,000 - ---------------------------------------------------------------- AmerisourceBergen Corp., 7.25% Sr. Unsec. Nts., 11/15/12 200,000 216,500 - ---------------------------------------------------------------- Beverly Enterprises, Inc., 9.625% Sr. Unsec. Nts., 4/15/09 925,000 1,024,438 - ---------------------------------------------------------------- Extendicare Health Services, Inc., 9.50% Sr. Unsec. Sub. Nts., 7/1/10 1 500,000 557,500 - ---------------------------------------------------------------- Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08 1 1,600,000 1,716,000 - ---------------------------------------------------------------- Genesis Healthcare Corp., 8% Sr. Sub. Nts., 10/15/13 3 400,000 419,000 - ---------------------------------------------------------------- Hanger Orthopedic Group, Inc., 10.375% Sr. Nts., 2/15/09 1 400,000 456,000 - ---------------------------------------------------------------- HCA, Inc.: 6.30% Sr. Unsec. Nts., 10/1/12 300,000 309,823 6.95% Sr. Nts., 5/1/12 1,000,000 1,073,915 7.875% Sr. Nts., 2/1/11 305,000 348,336 8.75% Sr. Nts., 9/1/10 400,000 476,912 - ---------------------------------------------------------------- Healthsouth Corp., 7.625% Nts., 6/1/12 1,000,000 940,000 - ---------------------------------------------------------------- InSight Health Services Corp., 9.875% Sr. Sub. Nts., 11/1/11 500,000 532,500 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES Continued Magellan Health Services, Inc.: 9% Sr. Sub. Nts., 2/15/08 4,5 $ 300,000 $ 223,500 9.375% Sr. Nts., 11/15/07 3 2,000,000 2,110,000 - ---------------------------------------------------------------- Medquest, Inc., 11.875% Sr. Unsec. Sub. Nts., Series B, 8/15/12 700,000 768,250 - ---------------------------------------------------------------- National Nephrology Assn., 9% Sr. Sub. Nts., 11/1/11 3 200,000 210,500 - ---------------------------------------------------------------- NDCHealth Corp., 10.50% Sr. Unsec. Sub. Nts., 12/1/12 600,000 678,000 - ---------------------------------------------------------------- PacifiCare Health Systems, Inc., 10.75% Sr. Unsec. Unsub. Nts., 6/1/09 714,000 846,090 - ---------------------------------------------------------------- Quintiles Transnational Corp., 10% Sr. Sub. Nts., 10/1/13 3 600,000 651,000 - ---------------------------------------------------------------- Rotech Healthcare, Inc., 9.50% Sr. Unsec. Sub. Nts., 4/1/12 600,000 630,000 - ---------------------------------------------------------------- Stewart Enterprises, Inc., 10.75% Sr. Unsec. Sub. Nts., 7/1/08 1 1,800,000 2,043,000 - ---------------------------------------------------------------- Tenet Healthcare Corp., 6.375% Sr. Nts., 12/1/11 760,000 733,400 - ---------------------------------------------------------------- Triad Hospitals, Inc., 7% Sr. Sub. Nts., 11/15/13 3 1,420,000 1,437,750 - ---------------------------------------------------------------- US Oncology, Inc., 9.625% Sr. Sub. Nts., 2/1/12 300,000 330,750 - ---------------------------------------------------------------- Vicar Operating, Inc., 9.875% Sr. Sub. Nts., 12/1/09 1 1,000,000 1,115,000 -------------- 21,707,664 - ---------------------------------------------------------------- PHARMACEUTICALS--0.1% aaiPharma, Inc., 11% Sr. Sub. Nts., 4/1/10 100,000 114,000 - ---------------------------------------------------------------- Valeant Pharmaceuticals International, Inc., 7% Sr. Nts., 12/15/11 3 800,000 828,000 -------------- 942,000 - ---------------------------------------------------------------- INDUSTRIALS--8.1% - ---------------------------------------------------------------- AEROSPACE & DEFENSE--1.0% Alliant Techsystems, Inc., 8.50% Sr. Unsec. Sub. Nts., 5/15/11 900,000 994,500 - ---------------------------------------------------------------- American Plumbing & Mechanical, Inc., 11.625% Sr. Sub. Nts., Series B, 10/15/08 1,4 500,000 125,625 - ---------------------------------------------------------------- K&F Industries, Inc., 9.625% Sr. Unsec. Sub. Nts., 12/15/10 300,000 337,875 - ---------------------------------------------------------------- L-3 Communications Corp., 7.625% Sr. Sub. Nts., 6/15/12 800,000 871,000 - ---------------------------------------------------------------- Rexnord Corp., 10.125% Sr. Unsec. Sub. Nts., 12/15/12 700,000 770,000 - ---------------------------------------------------------------- TransDigm, Inc., 8.375% Sr. Sub. Nts., 7/15/11 800,000 855,000 10 | OPPENHEIMER HIGH INCOME FUND/VA PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- AEROSPACE & DEFENSE Continued TRW Automotive, Inc.: 9.375% Sr. Nts., 2/15/13 $ 650,000 $ 745,875 11% Sr. Sub. Nts., 2/15/13 700,000 827,750 - ---------------------------------------------------------------- Vought Aircraft Industries, Inc., 8% Sr. Nts., 7/15/11 3 300,000 307,875 -------------- 5,835,500 - ---------------------------------------------------------------- AIR FREIGHT & LOGISTICS--0.0% Atlas Air, Inc., 9.25% Sr. Nts., 4/15/08 4 500,000 187,500 - ---------------------------------------------------------------- AIRLINES--0.4% America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 1,000,000 975,000 - ---------------------------------------------------------------- Amtran, Inc., 10.50% Sr. Nts., 8/1/04 1,500,000 1,301,250 -------------- 2,276,250 - ---------------------------------------------------------------- BUILDING PRODUCTS--0.5% Associated Materials, Inc., 9.75% Sr. Sub. Nts., 4/15/12 700,000 770,000 - ---------------------------------------------------------------- Green Star Products, Inc., 10.15% Bonds, 6/24/10 3 321,938 330,815 - ---------------------------------------------------------------- Jacuzzi Brands, Inc., 9.625% Sr. Sec. Nts., 7/1/10 3 544,000 601,120 - ---------------------------------------------------------------- Nortek, Inc.: 9.125% Sr. Unsec. Nts., Series B, 9/1/07 200,000 207,750 9.875% Sr. Unsec. Sub. Nts., 6/15/11 400,000 443,000 - ---------------------------------------------------------------- North America Energy Partners, Inc., 8.75% Sr. Unsec. Nts., 12/1/11 3 300,000 316,500 -------------- 2,669,185 - ---------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--2.9% Allied Waste North America, Inc.: 7.875% Sr. Nts., 4/15/13 800,000 870,000 7.875% Sr. Unsec. Nts., Series B, 1/1/09 400,000 419,000 8.50% Sr. Sub. Nts., 12/1/08 1,000,000 1,117,500 8.875% Sr. Nts., Series B, 4/1/08 1,900,000 2,137,500 9.25% Sr. Sec. Debs., Series B, 9/1/12 2,000,000 2,280,000 10% Sr. Unsec. Sub. Nts., Series B, 8/1/09 400,000 434,000 - ---------------------------------------------------------------- American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05 1,4,5 200,000 1,305 - ---------------------------------------------------------------- Budget Group, Inc., 9.125% Sr. Unsec. Nts., 4/1/06 4,5 900,000 166,500 - ---------------------------------------------------------------- Buhrmann US, Inc., 12.25% Sr. Unsec. Sub. Nts., 11/1/09 600,000 675,000 - ---------------------------------------------------------------- Coinmach Corp., 9% Sr. Nts., 2/1/10 800,000 872,000 - ---------------------------------------------------------------- Comforce Operating, Inc., 12% Sr. Nts., Series B,12/1/07 1 350,000 229,250 - ---------------------------------------------------------------- Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 1 250,000 239,375 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES Continued IT Group, Inc., 11.25% Sr. Unsec. Sub. Nts., Series B, 4/1/09 1,4,5 $ 550,000 $ -- - ---------------------------------------------------------------- Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 1 750,000 765,000 - ---------------------------------------------------------------- Mail-Well I Corp., 9.625% Sr. Nts., 3/15/12 700,000 780,500 - ---------------------------------------------------------------- Moore North American Finance, Inc., 7.875% Sr. Nts., 1/15/11 3 400,000 455,000 - ---------------------------------------------------------------- Protection One, Inc./Protection One Alarm Monitoring, Inc., 7.375% Sr. Unsec. Nts., 8/15/05 1 900,000 832,500 - ---------------------------------------------------------------- Stericycle, Inc., 12.375% Sr. Unsec. Sub. Nts., Series B, 11/15/09 488,000 563,640 - ---------------------------------------------------------------- Synagro Technologies, Inc., 9.50% Sr. Sub. Nts., 4/1/09 700,000 763,000 - ---------------------------------------------------------------- United Rentals (North America), Inc.: 9% Sr. Unsec. Sub. Nts., Series B, 4/1/09 1,000,000 1,063,750 10.75% Sr. Unsec. Nts., Series B, 4/15/08 400,000 452,000 10.75% Sr. Unsec. Nts., Series B, 4/15/08 700,000 791,000 -------------- 15,907,820 - ---------------------------------------------------------------- CONSTRUCTION & ENGINEERING--0.2% Integrated Electrical Services, Inc.: 9.375% Sr. Sub. Nts., Series B, 2/1/09 1 100,000 105,500 9.375% Sr. Sub. Nts., Series C, 2/1/09 100,000 105,500 - ---------------------------------------------------------------- URS Corp., 11.50% Sr. Unsec. Nts., 9/15/09 1 700,000 795,375 -------------- 1,006,375 - ---------------------------------------------------------------- ELECTRICAL EQUIPMENT--0.1% Dayton Superior Corp., 13% Sr. Unsec. Sub. Nts., 6/15/09 1 100,000 87,500 - ---------------------------------------------------------------- General Cable Corp., 9.50% Sr. Nts., 11/15/10 3 500,000 537,500 -------------- 625,000 - ---------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--0.8% Great Lakes Dredge & Dock Co., 7.75% Sr. Sub. Nts., 12/15/13 3 550,000 568,563 - ---------------------------------------------------------------- Norse CBO Ltd., 9.342% Sub. Bonds, Series 1A, Cl. C2, 8/13/10 1 1,500,000 577,500 - ---------------------------------------------------------------- Tyco International Group SA: 6.375% Nts., 10/15/11 2,900,000 3,113,875 6.75% Sr. Unsub. Nts., 2/15/11 100,000 109,750 -------------- 4,369,688 11 | OPPENHEIMER HIGH INCOME FUND/VA STATEMENT OF INVESTMENTS CONTINUED - ---------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- MACHINERY--1.1% Actuant Corp., 13% Sr. Sub. Nts., 5/1/09 $ 378,000 $ 493,290 - ---------------------------------------------------------------- AGCO Corp., 9.50% Sr. Unsec. Nts., 5/1/08 1,000,000 1,100,000 - ---------------------------------------------------------------- Insilco Corp., 12% Sr. Sub. Nts., 8/15/07 1,4,5 1,200,000 10,950 - ---------------------------------------------------------------- Manitowoc Co., Inc. (The): 7.125% Sr. Nts., 11/1/13 150,000 155,813 10.50% Sr. Sub. Nts., 8/1/12 800,000 915,000 - ---------------------------------------------------------------- NMHG Holding Co., 10% Sr. Nts., 5/15/09 1 600,000 666,000 - ---------------------------------------------------------------- Roller Bearing Co. of America, Inc., 9.625% Sr. Sub. Nts., Series B, 6/15/07 560,000 524,300 - ---------------------------------------------------------------- SPX Corp., 7.50% Sr. Nts., 1/1/13 900,000 983,250 - ---------------------------------------------------------------- Terex Corp.: 9.25% Sr. Unsec. Sub. Nts., 7/15/11 800,000 884,000 10.375% Sr. Unsec. Sub. Nts., Series B, 4/1/11 1 500,000 562,500 -------------- 6,295,103 - ---------------------------------------------------------------- MARINE--0.6% CP Ships Ltd., 10.375% Sr. Nts., 7/15/12 1,000,000 1,165,000 - ---------------------------------------------------------------- Millenium Seacarriers, Inc., 12% Sr. Sec. Nts., 7/15/05 1,4,5 700,000 269,290 - ---------------------------------------------------------------- Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07 1,4,5 1,000,000 425,000 - ---------------------------------------------------------------- Pacific & Atlantic Holdings, Inc., 3.75% Sec. Nts., 12/31/07 3 387,497 117,702 - ---------------------------------------------------------------- Sea Containers Ltd., 7.875% Sr. Nts., 2/15/08 1,500,000 1,485,000 -------------- 3,461,992 - ---------------------------------------------------------------- ROAD & RAIL--0.4% Kansas City Southern Railway Co. (The), 7.50% Sr. Nts., 6/15/09 500,000 515,000 - ---------------------------------------------------------------- Stena AB: 7.50% Sr. Nts., 11/1/13 928,000 960,480 9.625% Sr. Nts., 12/1/12 600,000 679,500 -------------- 2,154,980 - ---------------------------------------------------------------- TRANSPORTATION INFRASTRUCTURE--0.1% Worldspan LP/Worldspan Financial Corp., 9.625% Sr. Nts., 6/15/11 3 350,000 362,250 - ---------------------------------------------------------------- INFORMATION TECHNOLOGY--1.8% - ---------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--0.1% Orion Network Systems, Inc., 12.50% Sr. Disc. Nts., 1/15/07 1,4 1,150,000 606,625 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- COMPUTERS & PERIPHERALS--0.1% Seagate Technology Hdd Holdings, 8% Sr. Nts., 5/15/09 $ 700,000 $ 757,750 - ---------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--0.4% Ingram Micro, Inc., 9.875% Sr. Unsec. Sub. Nts., 8/15/08 1 1,200,000 1,332,000 - ---------------------------------------------------------------- Sensus Metering Systems, Inc., 8.625% Sr. Sub. Nts., 12/15/13 3 1,000,000 1,031,250 -------------- 2,363,250 - ---------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--0.0% Exodus Communications, Inc., 10.75% Sr. Nts., 12/15/09 1,4 [EUR] 846,550 48,051 - ---------------------------------------------------------------- Globix Corp., 11% Sr. Nts., 4/26/08 1 109,359 96,783 - ---------------------------------------------------------------- NorthPoint Communications Group, Inc., 12.875% Nts., 2/15/10 1,4 240,208 24 - ---------------------------------------------------------------- PSINet, Inc.: 10.50% Sr. Unsec. Nts., 12/1/06 1,4,5 [EUR] 1,000,000 52,031 11% Sr. Nts., 8/1/09 1,4,5 901,558 51,840 - ---------------------------------------------------------------- Verado Holdings, Inc., 0%/13% Sr. Disc. Nts., 4/15/08 1,4,5,6 500,000 50 -------------- 248,779 - ---------------------------------------------------------------- IT SERVICES--0.5% Iron Mountain, Inc.: 7.75% Sr. Sub. Nts., 1/15/15 500,000 526,250 8.625% Sr. Unsec. Sub. Nts., 4/1/13 1,600,000 1,736,000 - ---------------------------------------------------------------- Titan Corp. (The), 8% Sr. Sub. Nts., 5/15/11 3 400,000 456,000 -------------- 2,718,250 - ---------------------------------------------------------------- OFFICE ELECTRONICS--0.1% ASAT Finance LLC, 12.50% Sr. Unsec. Nts., 11/1/06 1 325,000 346,531 - ---------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.6% AMI Semiconductor, Inc., 10.75% Sr. Unsec. Sub. Nts., 2/1/13 682,000 816,695 - ---------------------------------------------------------------- Amkor Technology, Inc.: 7.75% Sr. Nts., 5/15/13 600,000 646,500 9.25% Sr. Unsec. Sub. Nts., 2/15/08 1,000,000 1,140,000 - ---------------------------------------------------------------- ChipPAC International Co. Ltd., 12.75% Sr. Unsec. Sub. Nts., Series B, 8/1/09 500,000 555,000 -------------- 3,158,195 - ---------------------------------------------------------------- MATERIALS--9.8% - ---------------------------------------------------------------- CHEMICALS--3.6% Applied Extrusion Technologies, Inc., 10.75% Sr. Nts., Series B, 7/1/11 450,000 375,750 - ---------------------------------------------------------------- Avecia Group plc, 11% Sr. Unsec. Nts., 7/1/09 200,000 181,000 12 | OPPENHEIMER HIGH INCOME FUND/VA PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- CHEMICALS Continued ClimaChem, Inc., 10.75% Sr. Unsec. Nts., Series B, 12/1/07 1 $ 250,000 $ 101,250 - ---------------------------------------------------------------- Compass Minerals Group, Inc., 10% Sr. Sub. Nts., 8/15/11 1,200,000 1,350,000 - ---------------------------------------------------------------- Equistar Chemicals LP/Equistar Funding Corp.: 8.75% Sr. Unsec. Nts., 2/15/09 600,000 630,000 10.625% Sr. Nts., 5/1/11 3 1,000,000 1,110,000 10.625% Sr. Unsec. Nts., 5/1/11 800,000 888,000 - ---------------------------------------------------------------- Huntsman Corp./ ICI Chemical Co. plc: 13.09% Sr. Unsec. Disc. Nts., 12/31/09 9 400,000 195,000 10.125% Sr. Unsec. Sub. Nts., 7/1/09 1,800,000 1,863,000 10.125% Sr. Unsec. Sub. Nts., 7/1/09 [EUR] 100,000 123,770 - ---------------------------------------------------------------- Huntsman International LLC, 9.875% Sr. Nts., 3/1/09 1,800,000 1,980,000 - ---------------------------------------------------------------- IMC Global, Inc., 7.625% Bonds, 11/1/05 1 3,000 3,090 - ---------------------------------------------------------------- ISP Chemco, Inc., 10.25% Sr. Unsec. Sub. Nts., 7/1/11 1 500,000 565,000 - ---------------------------------------------------------------- ISP Holdings, Inc., 10.625% Sr. Sec. Nts., 12/15/09 1 300,000 331,500 - ---------------------------------------------------------------- Koppers Industry, Inc., 9.875% Sr. Sec. Nts., 10/15/13 3 900,000 996,750 - ---------------------------------------------------------------- Kraton Polymers LLC/Capital Corp., 8.125% Sr. Sub. Nts., 1/15/14 3 400,000 418,000 - ---------------------------------------------------------------- Lyondell Chemical Co.: 9.50% Sec. Nts., 12/15/08 500,000 525,000 9.50% Sr. Sec. Nts., 12/15//08 100,000 105,000 9.625% Sr. Sec. Nts., Series A, 5/1/07 900,000 958,500 9.875% Sec. Nts., Series B, 5/1/07 600,000 636,000 - ---------------------------------------------------------------- Millennium America, Inc., 9.25% Sr. Nts., 6/15/08 3 800,000 876,000 - ---------------------------------------------------------------- Noveon, Inc., 11% Sr. Unsec. Sub. Nts., Series B, 2/28/11 1 1,200,000 1,398,000 - ---------------------------------------------------------------- OM Group, Inc., 9.25% Sr. Sub. Nts., 12/15/11 100,000 104,500 - ---------------------------------------------------------------- PCI Chemicals Canada, 10% Sr. Sec. Nts., 12/31/08 319,909 291,117 - ---------------------------------------------------------------- Pioneer Cos., Inc., 4.64% Sr. Sec. Nts., 12/31/06 1,2 101,304 92,187 - ---------------------------------------------------------------- Polyone Corp., 8.875% Sr. Unsec. Nts., 5/1/12 1,700,000 1,572,500 - ---------------------------------------------------------------- Resolution Performance Products LLC, 8% Sec. Nts., 12/15/09 3 450,000 468,000 - ---------------------------------------------------------------- Rockwood Specialties Corp., 10.625% Sr. Sub. Nts., 5/15/11 3 400,000 448,000 - ---------------------------------------------------------------- Sterling Chemicals, Inc.: 10% Sr. Sec. Nts., 12/19/07 1 409,135 395,838 11.25% Sr. Sub. Nts., 8/15/06 1,4,5 300,000 -- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- CHEMICALS Continued Westlake Chemical Corp., 8.75% Sr. Nts., 7/15/11 3 $ 800,000 $ 880,000 -------------- 19,862,752 - ---------------------------------------------------------------- CONSTRUCTION MATERIALS--0.2% Texas Industries, Inc., 10.25% Sr. Unsec. Nts., 6/15/11 800,000 908,000 - ---------------------------------------------------------------- CONTAINERS & PACKAGING--2.5% Ball Corp.: 6.875% Sr. Unsec. Nts., 12/15/12 3 300,000 315,000 7.75% Sr. Unsec. Nts., 8/1/06 700,000 756,000 - ---------------------------------------------------------------- Crown Euro Holdings SA, 9.50% Sr. Sec. Nts., 3/1/11 900,000 1,023,750 - ---------------------------------------------------------------- Graphic Packaging International Corp.: 8.50% Sr. Nts., 8/15/11 3 1,000,000 1,100,000 9.50% Sr. Sub. Nts., 8/15/13 3 700,000 777,000 - ---------------------------------------------------------------- Jefferson Smurfit Corp., 8.25% Sr. Unsec. Nts., 10/1/12 900,000 981,000 - ---------------------------------------------------------------- MDP Acquisitions plc, 9.625% Sr. Nts., 10/1/12 800,000 900,000 - ---------------------------------------------------------------- Owens-Brockway Glass Container, Inc.: 7.75% Sr. Sec. Nts., 5/15/11 1,000,000 1,078,750 8.25% Sr. Unsec. Nts., 5/15/13 500,000 539,375 8.75% Sr. Sec. Nts., 11/15/12 1,350,000 1,510,313 8.875% Sr. Sec. Nts., 2/15/09 1,300,000 1,431,625 - ---------------------------------------------------------------- Stone Container Corp.: 8.375% Sr. Nts., 7/1/12 400,000 436,000 9.25% Sr. Unsec. Nts., 2/1/08 1,000,000 1,110,000 9.75% Sr. Unsec. Nts., 2/1/11 1,000,000 1,110,000 - ---------------------------------------------------------------- TriMas Corp., 9.875% Sr. Unsec. Sub. Nts., 6/15/12 1,000,000 1,047,500 -------------- 14,116,313 - ---------------------------------------------------------------- METALS & MINING--2.0% AK Steel Corp., 7.875% Sr. Unsec. Nts., 2/15/09 300,000 264,750 - ---------------------------------------------------------------- Arch Western Finance LLC, 6.75% Sr. Nts., 7/1/13 3 800,000 826,000 - ---------------------------------------------------------------- California Steel Industries Corp., 8.50% Sr. Unsec. Nts., Series B, 4/1/09 300,000 316,125 - ---------------------------------------------------------------- Century Aluminum Co., 11.75% Sr. Sec. Nts., 4/15/08 1,385,000 1,551,200 - ---------------------------------------------------------------- IMCO Recycling, Inc., 10.375% Sr. Sec. Nts., 10/15/10 3 700,000 722,750 - ---------------------------------------------------------------- IPSCO, Inc., 8.75% Sr. Nts., 6/1/13 300,000 333,000 - ---------------------------------------------------------------- Jorgensen (Earle M.) Co., 9.75% Sr. Sec. Nts., 6/1/12 800,000 892,000 - ---------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 10.875% Sr. Nts., Series B, 10/15/06 1,4,5 1,000,000 905,000 13 | OPPENHEIMER HIGH INCOME FUND/VA STATEMENT OF INVESTMENTS CONTINUED - ---------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- METALS & MINING Continued Massey Energy Co., 6.625% Sr. Nts., 11/15/10 3 $ 400,000 $ 412,000 - ---------------------------------------------------------------- Metallurg, Inc., 11% Sr. Nts., 12/1/07 740,000 418,100 - ---------------------------------------------------------------- Northwest Pipeline Corp., 8.125% Sr. Nts., 3/1/10 200,000 223,000 - ---------------------------------------------------------------- Oregon Steel Mills, Inc., 10% Sr. Nts., 7/15/09 1,100,000 970,750 - ---------------------------------------------------------------- Peabody Energy Corp., 6.875% Sr. Unsec. Nts., Series B, 3/15/13 1,000,000 1,060,000 - ---------------------------------------------------------------- Steel Dynamics, Inc., 9.50% Sr. Nts., 3/15/09 400,000 446,000 - ---------------------------------------------------------------- UCAR Finance, Inc., 10.25% Sr. Nts., 2/15/12 400,000 462,000 - ---------------------------------------------------------------- United States Steel Corp.: 9.75% Sr. Nts., 5/15/10 600,000 678,000 10.75% Sr. Nts., 8/1/08 600,000 705,000 -------------- 11,185,675 - ---------------------------------------------------------------- PAPER & FOREST PRODUCTS--1.5% Abitibi-Consolidated, Inc., 8.55% Nts., 8/1/10 300,000 334,590 - ---------------------------------------------------------------- Ainsworth Lumber Co. Ltd.: 12.50% Sr. Nts., 7/15/07 1,7 400,000 472,000 13.875% Sr. Sec. Nts., 7/15/07 250,000 288,750 - ---------------------------------------------------------------- Boise Cascade Co.: 6.50% Sr. Nts., 11/1/10 400,000 417,837 7% Sr. Nts., 11/1/13 650,000 676,718 - ---------------------------------------------------------------- Buckeye Technologies, Inc., 8.50% Sr. Nts., 10/1/13 350,000 376,250 - ---------------------------------------------------------------- Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04 1,4,5 2,000,000 350,000 - ---------------------------------------------------------------- Georgia-Pacific Corp.: 8.125% Sr. Unsec. Nts., 5/15/11 2,200,000 2,431,000 9.375% Sr. Unsec. Nts., 2/1/13 1,600,000 1,848,000 - ---------------------------------------------------------------- Inland Fiber Group LLC, 9.625% Sr. Unsec. Nts., 11/15/07 4 300,000 157,500 - ---------------------------------------------------------------- Louisiana-Pacific Corp., 10.875% Sr. Sub. Nts., 11/15/08 1 250,000 298,750 - ---------------------------------------------------------------- Tekni-Plex, Inc., 8.75% Sr. Sec. Nts., 11/15/13 3 700,000 733,250 -------------- 8,384,645 - ---------------------------------------------------------------- TELECOMMUNICATION SERVICES--8.4% - ---------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--3.8% 360networks, Inc.: 13% Sr. Unsec. Nts., 5/1/08 1,4,5 [EUR] 500,000 63 13% Sr. Unsec. Nts., 5/1/08 1,4,5 400,000 40 - ---------------------------------------------------------------- American Tower Corp., 9.375% Sr. Nts., 2/1/09 850,000 909,500 - ---------------------------------------------------------------- COLO.com, Inc., 13.875% Sr. Nts., 3/15/10 1,4,5 504,605 3,785 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES Continued Concentric Network Corp., Escrow Shares, 12/15/07 1,10 $ 800,000 $ -- - ---------------------------------------------------------------- Crown Castle International Corp., 7.50% Sr. Nts., 12/1/13 3 700,000 707,000 - ---------------------------------------------------------------- Dex Media East LLC/Dex Media East Finance Co., 9.875% Sr. Unsec. Nts., 11/15/09 800,000 920,000 - ---------------------------------------------------------------- Dex Media West LLC/Dex Media West Finance Co.: 8.50% Sr. Nts., 8/15/10 3 700,000 783,125 9.875% Sr. Sub. Nts., 8/15/13 3 1,200,000 1,401,000 - ---------------------------------------------------------------- Dex Media, Inc., 8% Nts., 11/15/13 3 1,500,000 1,582,500 - ---------------------------------------------------------------- Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08 200,000 207,750 - ---------------------------------------------------------------- Focal Communications Corp., 11.875% Sr. Unsec. Nts., Series B, 1/15/10 1,4 100,000 8,000 - ---------------------------------------------------------------- Intermedia Communications, Inc., 0%/12.25% Sr. Disc. Nts., Series B, 3/1/09 4,5,6 200,000 75,000 - ---------------------------------------------------------------- IPC Acquisition Corp., 11.50% Sr. Sub. Nts., 12/15/09 350,000 383,250 - ---------------------------------------------------------------- Level 3 Communications, Inc.: 0%/10.50% Sr. Disc. Nts., 12/1/08 6 200,000 189,500 9.125% Sr. Unsec. Nts., 5/1/08 1,000,000 915,000 - ---------------------------------------------------------------- MCI Communications Corp., 7.75% Sr. Unsec. Debs., 3/23/25 4,5 600,000 486,000 - ---------------------------------------------------------------- Metromedia Fiber Network, Inc., 10% Sr. Unsec. Nts., Series B, 11/15/08 1,4,5 600,000 39,000 - ---------------------------------------------------------------- Nextlink Communications, Inc.: Escrow Shares, 10/1/07 1,10 500,000 -- Escrow Shares, 3/15/08 1,10 800,000 -- Escrow Shares, 11/15/08 1,10 200,000 -- Escrow Shares, 6/1/09 1,10 500,000 -- - ---------------------------------------------------------------- Qwest Capital Funding, Inc., 5.875% Nts., 8/3/04 1,400,000 1,410,500 - ---------------------------------------------------------------- Qwest Corp.: 7.20% Unsec. Nts., 11/1/04 400,000 411,000 8.875% Nts., 3/15/12 3 1,600,000 1,844,000 - ---------------------------------------------------------------- Qwest Services Corp., 13.50% Nts., 12/15/10 3 3,400,000 4,148,000 - ---------------------------------------------------------------- Sprint Capital Corp., 8.375% Nts., 3/15/12 750,000 877,619 - ---------------------------------------------------------------- Telewest Communications plc: 0%/9.25% Sr. Disc. Nts., 4/15/09 4,5,6 1,000,000 525,000 0%/9.875% Sr. Disc. Nts., 4/15/09 4,5,6 [GBP] 500,000 456,489 11.25% Sr. Nts., 11/1/08 4,5 800,000 518,000 - ---------------------------------------------------------------- Teligent, Inc., 11.50% Sr. Nts., 12/1/07 1,4,5 400,000 -- 14 | OPPENHEIMER HIGH INCOME FUND/VA PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES Continued Time Warner Telecom LLC/ Time Warner Telecom, Inc., 9.75% Sr. Nts., 7/15/08 $ 1,500,000 $ 1,552,500 - ---------------------------------------------------------------- Time Warner Telecom, Inc., 10.125% Sr. Unsec. Sub. Nts., 2/1/11 700,000 749,000 - ---------------------------------------------------------------- Viatel, Inc., 11.25% Sr. Sec. Nts., 4/15/08 1,4,5 600,000 -- - ---------------------------------------------------------------- Winstar Communications, Inc., 12.75% Sr. Nts., 4/15/10 1,4,5 1,000,000 100 -------------- 21,102,721 - ---------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--4.6% Alamosa Delaware, Inc., 12.50% Sr. Unsec. Nts., 2/1/11 1,000,000 1,025,000 - ---------------------------------------------------------------- American Tower Escrow Corp., 12.25% Sr. Sub. Disc. Nts., 8/1/08 9 1,400,000 973,000 - ---------------------------------------------------------------- CellNet Data Systems, Inc., Sr. Unsec. Disc. Nts., 10/1/07 1,4,5 1,834,000 -- - ---------------------------------------------------------------- Centennial Cellular Operating Co./ Centennial Communications Corp., 10.125% Sr. Nts., 6/15/13 1,000,000 1,102,500 - ---------------------------------------------------------------- Crown Castle International Corp., 10.75% Sr. Nts., 8/1/11 1,350,000 1,525,500 - ---------------------------------------------------------------- CTI Holdings SA, 0%/11.50% Sr. Deferred Coupon Nts., 4/15/08 1,4,5,6 1,000,000 125,000 - ---------------------------------------------------------------- Dobson Communications Corp.: 8.875% Sr. Nts., 10/1/13 3 1,650,000 1,678,875 10.875% Sr. Unsec. Nts., 7/1/10 700,000 766,500 - ---------------------------------------------------------------- IPCS, Inc., 0%/14% Sr. Unsec. Disc. Nts., 7/15/10 1,4,6 350,000 49,000 - ---------------------------------------------------------------- Leap Wireless International, Inc.: 0%/14.50% Sr. Unsec. Disc. Nts., 4/15/10 1,4,5,6 400,000 50,000 12.50% Sr. Nts., 4/15/10 1,4 400,000 58,000 - ---------------------------------------------------------------- Nextel Communications, Inc.: 7.375% Sr. Nts., 8/1/15 490,000 529,200 9.375% Sr. Unsec. Nts., 11/15/09 5,050,000 5,529,750 9.50% Sr. Unsec. Nts., 2/1/11 1,200,000 1,362,000 - ---------------------------------------------------------------- Nextel Partners, Inc.: 11% Sr. Nts., 3/15/10 300,000 333,000 12.50% Sr. Nts., 11/15/09 1,162,000 1,353,730 - ---------------------------------------------------------------- Orbcomm Global LP, Escrow Shares, 8/15/04 1,10 600,000 -- - ---------------------------------------------------------------- Rural Cellular Corp.: 9.625% Sr. Sub. Nts., Series B, 5/15/08 950,000 931,000 9.75% Sr. Sub. Nts., 1/15/10 500,000 491,250 9.875% Sr. Nts., 2/1/10 1,100,000 1,177,000 - ---------------------------------------------------------------- SBA Communications Corp.: 10.25% Sr. Unsec. Nts., 2/1/09 1,600,000 1,580,000 12% Sr. Unsec. Disc. Nts., 3/1/08 1 445,000 486,163 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES Continued SBA Telecommunications, Inc./ SBA Communications Corp., 0%/9.75% Sr. Disc. Nts., 12/15/11 3,6 $ 1,500,000 $ 1,065,000 - ---------------------------------------------------------------- SpectraSite, Inc., 8.25% Sr. Nts., 5/15/10 1 400,000 429,000 - ---------------------------------------------------------------- Triton PCS, Inc.: 8.50% Sr. Unsec. Nts., 6/1/13 800,000 864,000 8.75% Sr. Unsec. Sub. Nts., 11/15/11 300,000 297,000 9.375% Sr. Unsec. Sub. Nts., 2/1/11 300,000 307,500 - ---------------------------------------------------------------- US Unwired, Inc., 0%/13.375% Sr. Unsec. Sub. Disc. Nts., Series B, 11/1/09 6 800,000 584,000 - ---------------------------------------------------------------- Western Wireless Corp., 9.25% Sr. Unsec. Nts., 7/15/13 900,000 954,000 -------------- 25,626,968 - ---------------------------------------------------------------- UTILITIES--8.7% - ---------------------------------------------------------------- ELECTRIC UTILITIES--4.0% AES Corp. (The): 8.75% Sr. Sec. Nts., 5/15/13 3 2,200,000 2,469,500 8.75% Sr. Unsec. Unsub. Nts., 6/15/08 451,000 485,953 8.875% Sr. Unsec. Nts., 2/15/11 144,000 157,680 9.375% Sr. Unsec. Nts., 9/15/10 252,000 280,665 9.50% Sr. Unsec. Nts., 6/1/09 58,000 64,598 10% Sec. Nts., 7/15/05 3 583,574 596,705 - ---------------------------------------------------------------- AES Drax Holdings Ltd., 10.41% Sr. Sec. Sub. Nts., Series B, 12/31/20 1,4 300,000 261,000 - ---------------------------------------------------------------- Allegheny Energy, Inc., 7.75% Nts., 8/1/05 300,000 304,125 - ---------------------------------------------------------------- Caithness Coso Funding Corp., 9.05% Sr. Sec. Nts., Series B, 12/15/09 418,500 456,165 - ---------------------------------------------------------------- Calpine Corp.: 7.625% Sr. Nts., 4/15/06 550,000 489,500 8.25% Sr. Unsec. Nts., 8/15/05 400,000 389,000 8.50% Sr. Sec. Nts., 7/15/10 3 3,400,000 3,332,000 8.625% Sr. Nts., 8/15/10 200,000 157,000 8.75% Sr. Nts., 7/15/07 800,000 660,000 8.75% Sr. Sec. Nts., 7/15/13 3 950,000 931,000 9.875% Sr. Sec. Nts., 12/1/11 3 1,000,000 1,032,500 - ---------------------------------------------------------------- CMS Energy Corp.: 7.50% Sr. Nts., 1/15/09 300,000 310,500 7.75% Sr. Nts., 8/1/10 3 400,000 422,500 9.875% Sr. Unsec. Nts., 10/15/07 1,400,000 1,568,000 - ---------------------------------------------------------------- CMS Energy X-TRAS Pass-Through Trust I, 7% Sr. Unsec. Pass-Through Certificates, 1/15/05 500,000 515,000 - ---------------------------------------------------------------- Edison Mission Energy, 10% Sr. Unsec. Nts., 8/15/08 200,000 208,500 - ---------------------------------------------------------------- ESI Tractebel Acquisition Corp., 7.99% Sec. Bonds, Series B, 12/30/11 922,000 977,320 - ---------------------------------------------------------------- Mirant Americas Generation LLC, 8.30% Sr. Unsec. Nts., 5/1/11 4 200,000 170,000 15 | OPPENHEIMER HIGH INCOME FUND/VA STATEMENT OF INVESTMENTS CONTINUED - -------------------------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- ELECTRIC UTILITIES Continued MSW Energy Holdings LLC/MSW Energy Finance Co., Inc.: 7.375% Sr. Sec. Nts., 9/1/10 3 $ 700,000 $ 735,000 8.50% Sr. Sec. Nts., 9/1/10 3 400,000 438,000 - ---------------------------------------------------------------- NRG Energy, Inc., 8% Sr. Sec. Nts., 12/15/13 3 1,600,000 1,690,000 - ---------------------------------------------------------------- PG&E Corp., 6.875% Sr. Sec. Nts., 7/15/08 3 800,000 870,000 - ---------------------------------------------------------------- Reliant Resources, Inc.: 9.25% Sr. Sec. Nts., 7/15/10 3 1,200,000 1,278,000 9.50% Sr. Sec. Nts., 7/15/13 3 700,000 752,500 -------------- 22,002,711 - ---------------------------------------------------------------- GAS UTILITIES--2.2% AmeriGas Partners LP/AmeriGas Eagle Finance Corp., 8.875% Sr. Unsec. Nts., Series B, 5/20/11 11 1,400,000 1,547,000 - ---------------------------------------------------------------- ANR Pipeline Co., 8.875% Sr. Nts., 3/15/10 400,000 452,000 - ---------------------------------------------------------------- El Paso Corp., 7.875% Sr. Unsec. Nts., 6/15/12 1,200,000 1,140,000 - ---------------------------------------------------------------- El Paso Energy Corp., 7.625% Nts., 7/15/11 800,000 745,000 - ---------------------------------------------------------------- SEMCO Energy, Inc.: 7.125% Sr. Nts., 5/15/08 400,000 418,500 7.75% Sr. Nts., 5/15/13 400,000 422,500 - ---------------------------------------------------------------- Southern Natural Gas Co.: 7.35% Nts., 2/15/31 600,000 595,500 8% Sr. Unsub. Nts., 3/1/32 900,000 933,750 8.875% Sr. Nts., 3/15/10 700,000 791,000 - ---------------------------------------------------------------- Tennessee Gas Pipeline Co., 7.50% Bonds, 4/1/17 2,365,000 2,453,688 - ---------------------------------------------------------------- Williams Cos., Inc. (The), 7.125% Nts., 9/1/11 2,850,000 3,028,125 -------------- 12,527,063 - ---------------------------------------------------------------- MULTI-UTILITIES & UNREGULATED POWER--2.4% AES Red Oak LLC, 8.54% Sr. Sec. Bonds, Series A, 11/30/19 1,057,581 1,147,476 - ---------------------------------------------------------------- Aquila, Inc., 7% Sr. Unsec. Nts., 7/15/04 300,000 301,500 - ---------------------------------------------------------------- Consumers Energy Co.: 6.25% Nts., 9/15/06 300,000 324,130 6.375% Sr. Sec. Nts., 2/1/08 450,000 490,094 7.375% Nts., 9/15/23 350,000 358,843 - ---------------------------------------------------------------- Dynegy Holdings, Inc.: 6.875% Sr. Unsec. Unsub. Nts., 4/1/11 3,540,000 3,278,925 8.75% Sr. Nts., 2/15/12 600,000 608,250 10.125% Sr. Sec. Nts., 7/15/13 3 1,800,000 2,079,000 - ---------------------------------------------------------------- El Paso Production Holding Co., 7.75% Sr. Nts., 6/1/13 3 1,100,000 1,089,000 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- MULTI-UTILITIES & UNREGULATED POWER Continued Mirant Mid-Atlantic LLC, 8.625% Sec. Pass-Through Certificates, Series A, 6/30/12 1 $ 868,851 $ 873,739 - ---------------------------------------------------------------- Transcontinental Gas Pipe Line Corp.: 6.125% Nts., 1/15/05 200,000 204,250 8.875% Sr. Unsub. Nts., Series B, 7/15/12 200,000 237,500 - ---------------------------------------------------------------- Williams Cos., Inc. (The): 8.625% Sr. Nts., 6/1/10 1,350,000 1,522,109 9.25% Sr. Unsec. Unsub. Nts., 3/15/04 700,000 712,250 - ---------------------------------------------------------------- Williams Holdings of Delaware, Inc., 6.50% Nts., 12/1/08 300,000 311,625 -------------- 13,538,691 - ---------------------------------------------------------------- WATER UTILITIES--0.1% National Waterworks, Inc., 10.50% Sr. Unsec. Sub. Nts., Series B, 12/1/12 1 300,000 336,750 -------------- Total Corporate Bonds and Notes (Cost $393,156,285) 413,547,332 SHARES - ---------------------------------------------------------------- PREFERRED STOCKS--0.7% - ---------------------------------------------------------------- AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg. 1,5,7 13,764 138 - ---------------------------------------------------------------- Dobson Communications Corp., 6% Cv., Series F (converts into Dobson Communications Corp., Cl. A common stock), Non-Vtg. 800 144,000 - ---------------------------------------------------------------- e.spire Communications, Inc., 12.75% Jr. Redeemable, Non-Vtg. 1,5,7 498 50 - ---------------------------------------------------------------- Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable, Series B, Non-Vtg. 1,5 8,000 586,000 - ---------------------------------------------------------------- ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg. 1,5,7 342 -- - ---------------------------------------------------------------- McLeodUSA, Inc., 2.50% Cv., Series A 5 3,258 24,826 - ---------------------------------------------------------------- Nebco Evans Holdings, Inc., 11.25% Sr. Redeemable Exchangeable, Non-Vtg. 1,5,7 7,274 -- - ---------------------------------------------------------------- NTL Europe, Inc., 10% Cum., Series A, Non-Vtg. 23 189 - ---------------------------------------------------------------- Pacific & Atlantic Holdings, Inc., 7.50% Cum. Cv., Series A 1,5,7 19,640 39,280 - ---------------------------------------------------------------- Paxson Communications Corp.: 14.25% Cum. 5,7 -- 3,192 14.25% Cum. Jr. Exchangeable, Non-Vtg. 7 80 738,000 - ---------------------------------------------------------------- Rural Cellular Corp., 11.375% Cum., Series B, Non-Vtg. 7 1,177 921,003 - ---------------------------------------------------------------- Sovereign Real Estate Investment Trust, 12% Non-Cum., Series A 1,5 10,000 1,497,500 16 | OPPENHEIMER HIGH INCOME FUND/VA MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------- PREFERRED STOCKS Continued XO Communications, Inc., 13.50% Sr., Series E, Non-Vtg. 1,5,7 1 $ -- -------------- Total Preferred Stocks (Cost $5,061,967) 3,954,178 - ---------------------------------------------------------------- COMMON STOCKS--1.0% Charles River Laboratories International, Inc. 5 8,360 286,999 - ---------------------------------------------------------------- Chesapeake Energy Corp. 100,909 1,370,344 - ---------------------------------------------------------------- Classic Cable, Inc. 5 2,645 -- - ---------------------------------------------------------------- Covad Communications Group, Inc. 5 20,660 74,376 - ---------------------------------------------------------------- Dobson Communications Corp., Cl. A 5 51,491 270,637 - ---------------------------------------------------------------- Equinix, Inc. 5 16,434 463,439 - ---------------------------------------------------------------- Geotek Communications, Inc., Liquidating Trust 1,5,10 226 -- - ---------------------------------------------------------------- Globix Corp. 5 11,467 45,868 - ---------------------------------------------------------------- Gulfstream Holding, Inc. 1,5 56 -- - ---------------------------------------------------------------- Horizon Natural Resources Co. 1,5 20,000 -- - ---------------------------------------------------------------- ICO Global Communication Holdings Ltd 1,5 42,107 21,475 - ---------------------------------------------------------------- Manitowoc Co., Inc. (The) 1,039 32,417 - ---------------------------------------------------------------- Microcell Telecommunications, Inc. 5 1,861 24,828 - ---------------------------------------------------------------- Microcell Telecommunications, Inc., Cl. A 5 15 210 - ---------------------------------------------------------------- Microcell Telecommunications, Inc., Cl. B 5 1,850 24,753 - ---------------------------------------------------------------- NTL, Inc. 5 18,902 1,318,415 - ---------------------------------------------------------------- Orbital Sciences Corp. 5 2,235 26,865 - ---------------------------------------------------------------- Pioneer Cos., Inc. 5 20,688 168,607 - ---------------------------------------------------------------- Polymer Group, Inc., Cl. A 5 20,634 154,755 - ---------------------------------------------------------------- Prandium, Inc. 5 62,829 2,513 - ---------------------------------------------------------------- Southern Pacific Funding Corp., Liquidating Trust 1,10 251,604 -- - ---------------------------------------------------------------- Sterling Chemicals, Inc. 5 380 9,975 - ---------------------------------------------------------------- TVMAX Holdings, Inc. 1,5 7,500 18,750 - ---------------------------------------------------------------- UnitedGlobalCom, Inc., Cl. A 5 112,362 952,830 - ---------------------------------------------------------------- Viatel Holding Ltd. (Bermuda) 1,5 2,349 5,168 - ---------------------------------------------------------------- WRC Media Corp. 1,5 1,353 27 - ---------------------------------------------------------------- XO Communications, Inc. 5 2,646 15,215 -------------- Total Common Stocks (Cost $5,822,865) 5,288,466 UNITS - ---------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.1% American Tower Corp. Wts., Exp. 8/1/08 1,5 1,400 175,700 MARKET VALUE UNITS SEE NOTE 1 - ---------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES Continued ASAT Finance LLC Wts., Exp. 11/1/06 1,5 500 $ 563 - ---------------------------------------------------------------- Chesapeake Energy Corp. Wts., Exp. 9/1/04 5 2,671 298 - ---------------------------------------------------------------- Citigroup, Inc. Litigation Wts., Exp. 12/31/50 5 15,626 16,564 - ---------------------------------------------------------------- COLO.com, Inc. Wts., Exp. 3/15/10 1,5 600 6 - ---------------------------------------------------------------- Concentric Network Corp. Wts., Exp. 12/15/07 1,5 750 -- - ---------------------------------------------------------------- Covergent Communications, Inc. Wts., Exp. 4/1/08 1,5 2,000 20 - ---------------------------------------------------------------- Decrane Aircraft Holdings, Inc. Wts., Exp. 9/30/08 1,5 1,750 -- - ---------------------------------------------------------------- Diva Systems Corp. Wts., Exp. 3/1/08 1,5 1,500 15 - ---------------------------------------------------------------- e.spire Communications, Inc. Wts., Exp. 11/1/05 1,5 475 5 - ---------------------------------------------------------------- Horizon PCS, Inc. Wts., Exp. 10/1/10 1,5 1,300 -- - ---------------------------------------------------------------- ICG Communications, Inc. Wts., Exp. 9/15/05 1,5 5,940 59 - ---------------------------------------------------------------- ICO Global Communication Holdings Ltd. Wts.: Exp. 5/16/06 1,5 10,561 53 Exp. 5/16/06 1,5 16 -- - ---------------------------------------------------------------- Imperial Credit Industries, Inc. Wts., Exp. 1/31/08 1,5 5,148 -- - ---------------------------------------------------------------- Insilco Corp. Wts., Exp. 8/15/07 1,5 765 -- - ---------------------------------------------------------------- IPCS, Inc. Wts., Exp. 6/15/10 1,5 750 8 - ---------------------------------------------------------------- Leap Wireless International, Inc. Wts., Exp. 4/15/10 1,5 550 -- - ---------------------------------------------------------------- Long Distance International, Inc. Wts., Exp. 4/13/08 1,5 800 -- - ---------------------------------------------------------------- Loral Space & Communications Ltd. Wts., Exp. 1/15/07 1,5 800 8 - ---------------------------------------------------------------- McLeodUSA, Inc. Wts., Exp. 4/16/07 5 7,220 3,682 - ---------------------------------------------------------------- Microcell Telecommunications, Inc.: Cl. A Wts., Exp. 5/1/05 5 687 1,047 Cl. B Wts., Exp. 5/1/08 5 1,145 2,437 - ---------------------------------------------------------------- Millenium Seacarriers, Inc. Wts., Exp. 7/15/05 1,5 1,500 15 - ---------------------------------------------------------------- Ntelos, Inc. Wts., Exp. 8/15/10 1,5 1,000 500 - ---------------------------------------------------------------- Pathmark Stores, Inc. Wts., Exp. 9/19/10 5 20,000 18,800 - ---------------------------------------------------------------- Protection One, Inc. Wts., Exp. 6/30/05 1,5 1,600 -- - ---------------------------------------------------------------- Real Time Data Co. Wts., Exp. 5/31/04 1,5 121,440 -- - ---------------------------------------------------------------- Republic Technologies International LLC Wts., Exp. 7/15/09 1,5 500 -- - ---------------------------------------------------------------- Sterling Chemicals, Inc. Wts., Exp. 12/19/08 1,5 619 -- 17 | OPPENHEIMER HIGH INCOME FUND/VA STATEMENT OF INVESTMENTS CONTINUED - -------------------------------------------------------------------------------- MARKET VALUE UNITS SEE NOTE 1 - ---------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES Continued Telergy, Inc. Wts., Exp. 9/25/10 1,5 2,019 $ -- - ---------------------------------------------------------------- Telus Corp. Wts., Exp. 9/15/05 5 1,079 8,816 - ---------------------------------------------------------------- Transocean, Inc. Wts., Exp. 5/1/09 3,5 1,000 190,125 - ---------------------------------------------------------------- XO Communications, Inc.: Cl. A Wts., Exp. 1/16/10 5 5,300 10,335 Cl. B Wts., Exp. 1/16/10 5 3,975 6,758 Cl. C Wts., Exp. 1/16/10 5 3,975 4,373 -------------- Total Rights, Warrants and Certificates (Cost $173,416) 440,187 PRINCIPAL AMOUNT - ---------------------------------------------------------------- STRUCTURED NOTES--6.6% Bear Stearns Cos., Inc. (The), High Yield Index Linked Nts.: 5%, 3/11/04 $ 3,000,000 3,162,600 8.65%, 5/31/04 3,000,000 3,066,900 - ---------------------------------------------------------------- JPMorgan Chase Bank, TRAC-X NA High Yield T3 Credit Default Swap Bonds, 8%, 3/25/09 3 28,900,000 30,308,875 -------------- Total Structured Notes (Cost $34,900,000) 36,538,375 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--14.1% 12 Undivided interest of 4.91% in joint repurchase agreement (Principal Amount/Market Value $1,603,898,000, with a maturity value of $1,603,979,086) with PaineWebber, Inc., 0.91%, dated 12/31/03, to be repurchased at $78,700,979 on 1/2/04, collateralized by Federal Home Loan Mortgage Corp., 5%--5.50%, 9/1/33--11/1/33, with a value of $405,980,626 and Federal National Mortgage Assn., 4.50%, 10/1/33, with a value of $1,234,398,060 (Cost $78,697,000) $78,697,000 $ 78,697,000 - ---------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $525,931,260) 98.1% 545,903,542 - ---------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.9 10,561,839 ---------------------------- NET ASSETS 100.0% $556,465,381 ============================ FOOTNOTES TO STATEMENT OF INVESTMENTS Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: EUR Euro GBP British Pound Sterling 1. Identifies issues considered to be illiquid or restricted. See Note 7 of Notes to Financial Statements. 2. Represents the current interest rate for a variable or increasing rate security. 3. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $105,538,588 or 18.97% of the Fund's net assets as of December 31, 2003. 4. Issue is in default. See Note 1 of Notes to Financial Statements. 5. Non-income producing security. 6. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 7. Interest or dividend is paid-in-kind. 8. 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. 9. Zero coupon bond reflects effective yield on the date of purchase. 10. Received as the result of issuer reorganization. Currently has minimal market value. 11. Securities with an aggregate market value of $243,100 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 12. The Fund may have elements of risk due to concentrated investments. Such concentrations may subject the Fund to additional risks. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 18 | OPPENHEIMER HIGH INCOME FUND/VA STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2003 - --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (including cost and market value of $78,697,000 in repurchase agreements) (including securities loaned of approximately $2,143,000) (cost $525,931,260)--see accompanying statement $ 545,903,542 - -------------------------------------------------------------------------------------------------------------------------- Cash 665,365 - -------------------------------------------------------------------------------------------------------------------------- Collateral for securities loaned 2,164,744 - -------------------------------------------------------------------------------------------------------------------------- Receivables and other assets: Interest, dividends and principal paydowns 8,962,318 Shares of beneficial interest sold 1,660,275 Futures margins 906 Other 4,827 -------------- Total assets 559,361,977 - -------------------------------------------------------------------------------------------------------------------------- LIABILITIES Return of collateral for securities loaned 2,164,744 - -------------------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Shares of beneficial interest redeemed 621,566 Distribution and service plan fees 40,110 Shareholder reports 29,620 Trustees' compensation 3,596 Transfer and shareholder servicing agent fees 1,664 Other 35,296 -------------- Total liabilities 2,896,596 - -------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 556,465,381 ============== - -------------------------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS Par value of shares of beneficial interest $ 64,644 - -------------------------------------------------------------------------------------------------------------------------- Additional paid-in capital 612,593,582 - -------------------------------------------------------------------------------------------------------------------------- Accumulated net investment income 33,660,739 - -------------------------------------------------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (109,833,855) - -------------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 19,980,271 -------------- NET ASSETS $ 556,465,381 ============== - -------------------------------------------------------------------------------------------------------------------------- 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 $480,111,635 and 55,747,289 shares of beneficial interest outstanding) $8.61 - -------------------------------------------------------------------------------------------------------------------------- Service shares: Net asset value, redemption price per share and offering price per share (based on net assets of $76,353,746 and 8,896,395 shares of beneficial interest outstanding) $8.58
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 19 | OPPENHEIMER HIGH INCOME FUND/VA STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------ INVESTMENT INCOME Interest $39,300,227 - ------------------------------------------------------------------------------------------------------ Dividends 296,800 - ------------------------------------------------------------------------------------------------------ Portfolio lending fees 40,956 ------------ Total investment income 39,637,983 - ------------------------------------------------------------------------------------------------------ EXPENSES Management fees 3,196,862 - ------------------------------------------------------------------------------------------------------ Distribution and service plan fees--Service shares 102,739 - ------------------------------------------------------------------------------------------------------ Transfer and shareholder servicing agent fees: Non-Service shares 10,394 Service shares 10,845 - ------------------------------------------------------------------------------------------------------ Shareholder reports 48,921 - ------------------------------------------------------------------------------------------------------ Trustees' compensation 17,679 - ------------------------------------------------------------------------------------------------------ Custodian fees and expenses 8,998 - ------------------------------------------------------------------------------------------------------ Other 45,981 ------------ Total expenses 3,442,419 Less reduction to custodian expenses (2,707) ------------ Net expenses 3,439,712 - ------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME 36,198,271 - ------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investments (7,092,371) Closing of futures contracts (142,823) Foreign currency transactions 3,861,537 ------------ Net realized loss (3,373,657) - ------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) on: Investments 59,477,154 Translation of assets and liabilities denominated in foreign currencies 892,393 Futures contracts (104,277) ------------ Net change in unrealized appreciation (depreciation) 60,265,270 - ------------------------------------------------------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $93,089,884 ============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 20 | OPPENHEIMER HIGH INCOME FUND/VA STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2003 2002 - ---------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 36,198,271 $ 28,331,405 - ---------------------------------------------------------------------------------------------------------------- Net realized loss (3,373,657) (54,882,881) - ---------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) 60,265,270 18,653,181 ----------------------------- Net increase (decrease) in net assets resulting from operations 93,089,884 (7,898,295) - ---------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income: Non-Service shares (26,819,814) (35,408,403) Service shares (1,672,018) (306) - ---------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS Net increase in net assets resulting from beneficial interest transactions: Non-Service shares 76,658,765 44,572,082 Service shares 51,833,851 17,318,687 - ---------------------------------------------------------------------------------------------------------------- NET ASSETS Total increase 193,090,668 18,583,765 - ---------------------------------------------------------------------------------------------------------------- Beginning of period 363,374,713 344,790,948 ----------------------------- End of period [including accumulated net investment income of $33,660,739 and $25,973,552, respectively] $556,465,381 $363,374,713 =============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 21 | OPPENHEIMER HIGH INCOME FUND/VA FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
NON-SERVICE SHARES YEAR ENDED DECEMBER 31 2003 2002 2001 2000 1999 - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $7.51 $8.54 $9.27 $10.72 $11.02 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .60 .58 .84 1.00 1.01 Net realized and unrealized gain (loss) 1.09 (.76) (.62) (1.36) (.55) ------------------------------------------------------------- Total from investment operations 1.69 (.18) .22 (.36) .46 - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.59) (.85) (.95) (1.09) (.76) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $8.61 $7.51 $8.54 $ 9.27 $10.72 ============================================================= - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 1 23.96% (2.40)% 1.97% (3.74)% 4.29% - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $480,112 $345,670 $344,788 $333,533 $340,829 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $396,858 $335,894 $347,723 $329,260 $340,519 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income 8.31% 8.29% 9.94% 10.47% 9.61% Total expenses 0.76% 3 0.77% 3 0.79% 3 0.79% 3 0.75% 3 - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 48% 75% 46% 31% 33%
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. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 22 | OPPENHEIMER HIGH INCOME FUND/VA
SERVICE SHARES YEAR ENDED DECEMBER 31 2003 2002 2001 1 - -------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $7.49 $ 8.54 $8.40 - -------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .61 .88 .20 Net realized and unrealized gain (loss) 1.06 (1.08) (.06) ---------------------------------- Total from investment operations 1.67 (.20) .14 - -------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.58) (.85) -- - -------------------------------------------------------------------------------------------- Net asset value, end of period $8.58 $ 7.49 $8.54 ================================== - -------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 23.79% (2.67)% 1.67% - -------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $76,354 $17,705 $3 - -------------------------------------------------------------------------------------------- Average net assets (in thousands) $41,246 $ 5,602 $2 - -------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 7.84% 8.91% 12.51% Total expenses 1.04% 4 1.02% 4,5 0.96% 4 - -------------------------------------------------------------------------------------------- Portfolio turnover rate 48% 75% 46%
1. For the period from September 18, 2001 (inception of offering) to December 31, 2001. 2. Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 23 |OPPENHEIMER HIGH INCOME FUND/VA NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer High Income 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 from investment in high-yield fixed-income 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 with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ 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. Securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective foreign exchanges will be fair valued. 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 December 31, 2003, the market value of these securities comprised 6.6% of the Fund's net assets and resulted in unrealized gains of $1,638,375. The Fund also hedges a portion of the foreign currency exposure generated by these securities, as discussed in Note 5. - -------------------------------------------------------------------------------- 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 December 31, 2003, securities with an aggregate market value of $10,090,218, representing 1.81% 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. 24 |OPPENHEIMER HIGH INCOME FUND/VA 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. The tax components of capital shown in the table below represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes. NET UNREALIZED APPRECIATION BASED ON COST OF SECURITIES AND UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES ---------------------------------------------------------------------------- $34,835,883 $-- $107,217,947 $17,364,325 1. As of December 31, 2003, the Fund had $107,195,065 of net capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. As of December 31, 2003, details of the capital loss carryforwards were as follows: EXPIRING ------------------------- 2006 $ 3,401,577 2007 4,933,260 2008 11,572,833 2009 22,696,701 2010 56,061,391 2011 8,529,303 ------------ Total $107,195,065 ============ 2. During the fiscal years ended December 31, 2003 and December 31, 2002, the Fund did not utilize any capital loss carryforwards. 3. As of December 31, 2003, the Fund had $22,882 of post-October losses available to offset future realized capital gains, if any. Such losses, if unutilized, will expire in 2012. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. Accordingly, the following amounts have been reclassified for December 31, 2003. Net assets of the Fund were unaffected by the reclassifications. 25 | OPPENHEIMER HIGH INCOME FUND/VA NOTES TO FINANCIAL STATEMENTS CONTINUED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued REDUCTION TO REDUCTION TO ACCUMULATED NET ACCUMULATED NET REALIZED INVESTMENT INCOME LOSS ON INVESTMENTS ---------------------------------------------- $19,252 $19,252 The tax character of distributions paid during the years ended December 31, 2003 and December 31, 2002 was as follows: YEAR ENDED YEAR ENDED DECEMBER 31, 2003 DECEMBER 31, 2002 ------------------------------------------------------------------------- Distributions paid from: Ordinary income $28,491,832 $35,408,709 The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of December 31, 2003 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $528,541,326 Federal tax cost of other investments 782,016 ------------ Total federal tax cost $529,323,342 ============ Gross unrealized appreciation $ 42,939,083 Gross unrealized depreciation (25,574,758) ------------ Net unrealized appreciation $ 17,364,325 ============ - -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or are invested in other Oppenheimer funds selected by the Trustee. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable, 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. 26 | OPPENHEIMER HIGH INCOME FUND/VA - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
YEAR ENDED DECEMBER 31, 2003 YEAR ENDED DECEMBER 31, 2002 SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------- NON-SERVICE SHARES Sold 28,774,062 $ 229,684,313 22,935,486 $ 176,263,288 Dividends and/or distributions reinvested 3,719,807 26,819,814 4,568,826 35,408,403 Redeemed (22,801,608) (179,845,362) (21,816,082) (167,099,609) -------------------------------------------------------------------- Net increase 9,692,261 $ 76,658,765 5,688,230 $ 44,572,082 ==================================================================== - ----------------------------------------------------------------------------------------------------------------- SERVICE SHARES Sold 13,073,333 $ 104,602,083 2,741,181 $ 20,012,961 Dividends and/or distributions reinvested 232,224 1,672,018 39 306 Redeemed (6,772,325) (54,440,250) (378,418) (2,694,580) -------------------------------------------------------------------- Net increase 6,533,232 $ 51,833,851 2,362,802 $ 17,318,687 ====================================================================
- -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended December 31, 2003, were $259,809,157 and $176,211,604, 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% on 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 per account fee. For the year ended December 31, 2003, the Fund paid $20,025 to OFS for services to the Fund. 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. Fees incurred by the Fund under the plan are detailed in the Statement of Investments. 27 | OPPENHEIMER HIGH INCOME FUND/VA NOTES TO FINANCIAL STATEMENTS CONTINUED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Contracts closed or settled with the same broker are recorded as net realized gains or losses. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of December 31, 2003, the Fund had no outstanding foreign currency contracts. - -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS A futures contract is a commitment to buy or sell a specific amount of a commodity or financial instrument at a negotiated price on a stipulated future date. Futures contracts are traded on a commodity exchange. The Fund may buy and sell futures contracts that relate to broadly based securities indices "financial futures" or debt securities "interest rate futures" in order to gain exposure to or protection from changes in market value of 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. 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 December 31, 2003, the Fund had outstanding futures contracts as follows:
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED CONTRACT DESCRIPTION DATES CONTRACTS DECEMBER 31, 2003 APPRECIATION - --------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE U.S. Treasury Nts., 5 yr. 3/22/04 6 $669,750 $3,681 U.S. Treasury Nts., 10 yr. 3/22/04 1 112,266 2,199 ------ $5,880 ======
28 | OPPENHEIMER HIGH INCOME FUND/VA - -------------------------------------------------------------------------------- 7. ILLIQUID OR RESTRICTED SECURITIES As of December 31, 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 December 31, 2003 was $41,523,423, which represents 7.50% of the Fund's net assets, of which zero is considered restricted. Information concerning restricted securities is as follows:
ACQUISITION VALUATION AS OF UNREALIZED SECURITY DATES COST DECEMBER 31, 2003 DEPRECIATION - ------------------------------------------------------------------------------------------- STOCKS AND/OR WARRANTS Geotek Communications, Inc., Liquidating Trust 4/6/00 $ -- $-- $ -- Real Time Data Co. Wts. 6/30/99 1,214 -- 1,214
- -------------------------------------------------------------------------------- 8. SECURITIES LENDING The Fund lends portfolio securities from time to time in order to earn additional income. In return, the Fund receives collateral in the form of US Treasury obligations or cash, against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the funds and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund could experience delays and cost in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. As of December 31, 2003, the Fund had on loan securities valued at approximately $2,143,000. Cash of $2,164,744 was received as collateral for the loans, and has been invested in approved instruments. - -------------------------------------------------------------------------------- 9. 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 (the SEC) 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. The SEC's order requires the Fund's Board of Trustees to adopt operating policies and procedures to administer interfund borrowing and lending. 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 year ended or at December 31, 2003. 29 | OPPENHEIMER HIGH INCOME FUND/VA INDEPENDENT AUDITORS' REPORT - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER HIGH INCOME FUND/VA: We have audited the accompanying statement of assets and liabilities of Oppenheimer High Income Fund/VA, a series of Oppenheimer Variable Account Funds, including the statement of investments, as of December 31, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2003, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer High Income Fund/VA as of December 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Denver, Colorado February 12, 2004 30 | OPPENHEIMER HIGH INCOME FUND/VA FEDERAL INCOME TAX INFORMATION UNAUDITED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2004, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2003. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends of $0.5855 and $0.5808 per share were paid to Non-Service and Service shareholders, respectively, on March 14, 2003, all of which was designated as ordinary income for federal income tax purposes. Dividends, if any, paid by the Fund during the fiscal year ended December 31, 2003 which are not designated as capital gain distributions should be multiplied by 0.16% to arrive at the amount eligible for the corporate dividend-received deduction. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES UNAUDITED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.225.5677, (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. 31 | OPPENHEIMER HIGH INCOME FUND/VA TRUSTEES AND OFFICERS UNAUDITED - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD BY TRUSTEE; FUND, LENGTH OF SERVICE, AGE NUMBER OF FUNDS IN FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEE INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO TRUSTEES 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek Mortgage Company Chairman of the Board (since 1991), Centennial State Mortgage Company (since 1994), The El Paso Mortgage Company (since 2003) and (since 1993), Transland Financial Services, Inc. (since 1997); Chairman of the following Trustee (since 1999) private companies: Great Frontier Insurance (insurance agency) (since 1995), Ambassador Media Age: 66 Corporation and Broadway Ventures (since 1984); a director of the following public companies: Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992) and UNUMProvident (insurance company) (since 1991). Mr. Armstrong is also a Director/Trustee of Campus Crusade for Christ and the Bradley Foundation. Formerly a director of the following: Storage Technology Corporation (a publicly-held computer equipment company) (1991-February 2003), and International Family Entertainment (television channel) (1992-1997), Frontier Real Estate, Inc. (residential real estate brokerage) (1994-1999), and Frontier Title (title insurance agency) (1995-June 1999); a U.S. Senator (January 1979-January 1991). Oversees 38 portfolios in the OppenheimerFunds complex. ROBERT G. AVIS, Formerly, Director and President of A.G. Edwards Capital, Inc. (General Partner of private Trustee (since 1993) equity funds) (until February 2001); Chairman, President and Chief Executive Officer of A.G. Age: 72 Edwards Capital, Inc. (until March 2000); Vice Chairman and Director of A.G. Edwards, Inc. and Vice Chairman of A.G. Edwards & Sons, Inc. (its brokerage company subsidiary) (until March 1999); Chairman of A.G. Edwards Trust Company and A.G.E. Asset Management (investment advisor) (until March 1999); and a Director (until March 2000) of A.G. Edwards & Sons and A.G. Edwards Trust Company. Oversees 38 portfolios in the OppenheimerFunds complex. GEORGE C. BOWEN, Formerly (until April 1999): Senior Vice President (from September 1987) and Treasurer (from Trustee (since 1997) March 1985) of OppenheimerFunds, Inc. (the Manager); Vice President (from June 1983) and Age: 67 Treasurer (since March 1985) of OppenheimerFunds Distributor, Inc. (a subsidiary of the Manager); Senior Vice President (since February 1992), Treasurer (since July 1991) Assistant Secretary and a director (since December 1991) of Centennial Asset Management Corporation; Vice President (since October 1989) and Treasurer (since April 1986) of HarbourView Asset Management Corporation (an investment advisory subsidiary of the Manager); President, Treasurer and a director (June 1989-January 1990) of Centennial Capital Corporation (an investment advisory subsidiary of the Manager); Vice President and Treasurer (since August 1978) and Secretary (since April 1981) of Shareholder Services, Inc. (a transfer agent subsidiary of the Manager); Vice President, Treasurer and Secretary (since November 1989) of Shareholder Financial Services, Inc. (a transfer agent subsidiary of the Manager); Assistant Treasurer (since March 1998) of Oppenheimer Acquisition Corp. (the Manager's parent corporation); Treasurer (since November 1989) of Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the Manager); Vice President and Treasurer (since July 1996) of Oppenheimer Real Asset Management, Inc. (an investment advisory subsidiary of the Manager); Chief Executive Officer and director (since March 1996) of MultiSource Services, Inc. (a broker-dealer subsidiary of the Manager); Treasurer (since October 1997) of OppenheimerFunds International Ltd. and OppenheimerFunds plc (offshore fund management subsidiaries of the Manager). Oversees 38 portfolios in the OppenheimerFunds complex. EDWARD L. CAMERON, A member of The Life Guard of Mount Vernon, George Washington's home (since June 2000). Trustee (since 1999) Formerly (March 2001 - May 2002) Director of Genetic ID, Inc. and its subsidiaries (a privately Age: 65 held biotech company); a partner with PricewaterhouseCoopers LLP (from 1974-1999) (an accounting firm) and Chairman (from 1994-1998), Price Waterhouse LLP Global Investment Management Industry Services Group. Oversees 38 portfolios in the OppenheimerFunds complex. JON S. FOSSEL, Chairman and Director (since 1998) of Rocky Mountain Elk Foundation (a not-for-profit Trustee (since 1990) foundation); and a director (since October 1999) of P.R. Pharmaceuticals (a privately held Age: 61 company) and UNUMProvident (an insurance company) (since June 1, 2002). Formerly Chairman and a director (until October 1996) and President and Chief Executive Officer (until October 1995) of the Manager; President, Chief Executive Officer and a director of Oppenheimer Acquisition Corp., Shareholders Services Inc. and Shareholder Financial Services, Inc. (until October 1995). Oversees 38 portfolios in the OppenheimerFunds complex.
32 | OPPENHEIMER HIGH INCOME FUND/VA
SAM FREEDMAN, Director of Colorado Uplift (a non-profit charity) (since September 1984). Formerly (until Trustee (since 1996) October 1994) Mr. Freedman held several positions in subsidiary or affiliated companies of the Age: 63 Manager. Oversees 38 portfolios in the OppenheimerFunds complex. BEVERLY L. HAMILTON, Trustee (since 1996) of MassMutual Institutional Funds and of MML Series Investment Fund Trustee (since 2002) (open-end investment companies); Director of MML Services (since April 1987) and America Funds Age: 57 Emerging Markets Growth Fund (since October 1991) (both are investment companies), The California Endowment (a philanthropy organization) (since April 2002), and Community Hospital of Monterey Peninsula, (since February 2002); a trustee (since February 2000) of Monterey International Studies (an educational organization), and an advisor to Unilever (Holland)'s pension fund and to Credit Suisse First Boston's Sprout venture capital unit. Mrs. Hamilton also is a member of the investment committees of the Rockefeller Foundation, the University of Michigan and Hartford Hospital. Formerly, President (February 1991-April 2000) ARCO Investment Management Company. Oversees 37 portfolios in the OppenheimerFunds complex. ROBERT J. MALONE, Chairman and CEO (since 2003) of Steele Street State Bank (a commercial banking entity); Trustee (since 2002) Director (since 2001) of Jones Knowledge, Inc. (a privately held company), U.S. Exploration, Age: 59 Inc., (since 1997), Colorado UpLIFT (a non-profit organization) (since 1986) and a trustee of the Gallagher Family Foundation (non-profit organization) (since 2000). Formerly, Chairman of U.S. Bank (a subsidiary of U.S. Bancorp and formerly Colorado National Bank,) (July 1996-April 1, 1999) and a director of Commercial Assets, Inc. (a REIT) (1993-2000). Oversees 37 portfolios in the OppenheimerFunds complex. F. WILLIAM MARSHALL, JR., Trustee (since 1996) of MassMutual Institutional Funds and of MML Series Investment Fund Trustee (since 2000) (open-end investment companies); Trustee (since 1987), Chairman of the Board (since 2003) and Age: 61 Chairman of the investment committee (since 1994) for the Worcester Polytech Institute; President and Treasurer (since January 1999) of the SIS Fund (a private not for profit charitable fund); Trustee (since 1995) of the Springfield Library and Museum Association; Trustee (since 1996) of the Community Music School of Springfield. Formerly, member of the investment committee of the Community Foundation of Western Massachusetts (1998 - 2003); Chairman (January 1999-July 1999) of SIS & Family Bank, F.S.B. (formerly SIS Bank); President, Chief Executive Officer and Director (May 1993-December 1998) of SIS Bankcorp, Inc. and SIS Bank (formerly Springfield Institution for Savings) and Executive Vice President (January 1999-July 1999) of Peoples Heritage Financial Group, Inc. Oversees 38 portfolios in the OppenheimerFunds complex. - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, AND OFFICER NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR AN INDEFINITE TERM, UNTIL HIS RESIGNATION, DEATH OR REMOVAL. JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President (since September President and Trustee 2000) of the Manager; President and a director or trustee of other Oppenheimer funds; President (since 2001) and a director (since July 2001) of Oppenheimer Acquisition Corp. and of Oppenheimer Age: 54 Partnership Holdings, Inc.; a director (since November 2001) of OppenheimerFunds Distributor, Inc.; Chairman and a director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial Services, Inc.; President and a director (since July 2001) of OppenheimerFunds Legacy Program (a charitable trust program established by the Manager); a director of the following investment advisory subsidiaries of OppenheimerFunds, Inc.: OFI Institutional Asset Management, Inc. and Centennial Asset Management Corporation (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and a director (since July 2001) of Oppenheimer Real Asset Management, Inc.; a director (since November 2001) of Trinity Investment Management Corp. and Tremont Advisers, Inc. (investment advisory affiliates of the Manager); Executive Vice President (since February 1997) of Massachusetts Mutual Life Insurance Company (the Manager's parent company); a director (since June 1995) of DLB Acquisition Corporation (a holding company that owns shares of David L. Babson & Company, Inc.); formerly, Chief Operating Officer (September 2000-June 2001) of the Manager; President and trustee (November 1999-November 2001) of MML Series Investment Fund and MassMutual Institutional Funds (open-end investment companies); a director (September 1999-August 2000) of C.M. Life Insurance Company; President, Chief Executive Officer and director (September 1999-August 2000) of MML Bay State Life Insurance Company; a director (June 1989-June 1998) of Emerald Isle Bancorp and Hibernia Savings Bank (a wholly-owned subsidiary of Emerald Isle Bancorp). Oversees 72 portfolios as a Trustee/Officer and 10 portfolios as an Officer in the OppenheimerFunds complex.
33 | OPPENHEIMER HIGH INCOME FUND/VA TRUSTEES AND OFFICERS UNAUDITED / CONTINUED - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. STEINMETZ, KOURKOULAKOS AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NY 10281-1008, FOR MR. WIXTED, 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS OR HER EARLIER RESIGNATION, DEATH OR REMOVAL. ARTHUR P. STEINMETZ, Senior Vice President of the Manager (since March 1993) and of HarbourView Asset Management Vice President and Portfolio Corporation (since March 2000); an officer of 6 portfolios in the OppenheimerFunds complex. Manager (since 2003) Age: 45 DIMITRIOS KOURKOULAKOS, Vice President of the Manager (since December 2001); an officer of 3 portfolios in the Vice President and Portfolio OppenheimerFunds complex; formerly a High Yield Analyst (1998 - 2001) and a Securities Analyst Manager (since 2002) (1995 - 1998) of the Manager. Age: 37 BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer (since March Treasurer (since 1999) 1999) of HarbourView Asset Management Corporation, Shareholder Services, Inc., Oppenheimer Real Age: 44 Asset Management Corporation, Shareholder Financial Services, Inc., Oppenheimer Partnership Holdings, Inc., OFI Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. and OppenheimerFunds plc (offshore fund management subsidiaries of the Manager) (since May 2000) and OFI Institutional Asset Management, Inc. (since November 2000); Treasurer and Chief Financial Officer (since May 2000) of OFI Trust Company (a trust company subsidiary of the Manager); Assistant Treasurer (since March 1999) of Oppenheimer Acquisition Corp. and OppenheimerFunds Legacy Program (since April 2000); formerly Principal and Chief Operating Officer (March 1995-March 1999), Bankers Trust Company-Mutual Fund Services Division. An officer of 82 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since February 2002) of the Vice President and Secretary Manager; General Counsel and a director (since November 2001) of OppenheimerFunds Distributor, (since 2001) Inc.; Senior Vice President and General Counsel (since November 2001) of HarbourView Asset Age: 55 Management Corporation; Vice President and a director (since November 2000) of Oppenheimer Partnership Holdings, Inc.; Senior Vice President, General Counsel and a director (since November 2001) of Shareholder Services, Inc., Shareholder Financial Services, Inc., OFI Private Investments, Inc., OFI Trust Company and OFI Institutional Asset Management, Inc.; General Counsel (since November 2001) of Centennial Asset Management Corporation; a director (since November 2001) of Oppenheimer Real Asset Management, Inc.; Assistant Secretary and a director (since November 2001) of OppenheimerFunds International Ltd.; Vice President (since November 2001) of OppenheimerFunds Legacy Program; Secretary (since November 2001) of Oppenheimer Acquisition Corp.; formerly Senior Vice President (May 1985-January 2004), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001); OppenheimerFunds International Ltd. And OppenheimerFunds plc (October 1997-November 2001). An officer of 82 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST. 34 | OPPENHEIMER HIGH INCOME FUND/VA ITEM 2. CODE OF ETHICS The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT The Board of Trustees of the Fund has determined that Edward L. Cameron, the Chairman of the Board's Audit Committee, and George C. Bowen, a member of the Board's Audit Committee, possess the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as "audit committee financial experts," and has designated Messrs. Cameron and Bowen as the Audit Committee's financial experts. Messrs. Cameron and Bowen are "independent" Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES (a) Audit Fees The principal accountant for the audit of the registrant's annual financial statements billed $16,500 in fiscal 2003 and $15,500 in fiscal 2002. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $75,000 in fiscal 2003 and $65,000 in fiscal 2002 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees would include, among others: due diligence related to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, internal control reviews and consultation concerning financial accounting and reporting standards. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $11,600 in fiscal 2003 and $6,500 in fiscal 2002 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees would include, among others: tax compliance, tax planning and tax advice. Tax compliance generally involves preparation of original and amended tax returns, claims for a refund and tax payment-planning services. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions and requests for rulings or technical advice from taxing authorities. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $0 in fiscal 2003 and $3,500 in fiscal 2002 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such fees would include services provided to the registrant's Board of Trustees with respect to the annual renewal of the registrant's investment advisory agreement. (e) (1) During its regularly scheduled periodic meetings, the registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting. Pre-approval of non-audit services is waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. (2) 100% (f) Not applicable as less than 50%. (g) The principal accountant for the audit of the registrant's annual financial statements billed $86,600 in fiscal 2003 and $75,000 in fiscal 2002 to the registrant and the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. (h) The registrant's audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal account's independence. No such services were rendered. ITEM 5. NOT APPLICABLE ITEM 6. RESERVED ITEM 7. NOT APPLICABLE ITEM 8. NOT APPLICABLE ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable for fiscal periods ending December 31, 2003. ITEM 10. 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 December 31, 2003, registrant's principal executive officer and principal financial officer found registrant's disclosure controls and procedures to provide reasonable assurances 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 over financial reporting that occurred during the registrant's second fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT) (B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS) EX-99.CODE 3 ex99_code-640.txt EX99_CODE-640 EX-99.CODE ETH CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF THE OPPENHEIMER FUNDS AND OF OPPENHEIMERFUNDS, INC. This Code of Ethics for Principal Executive and Senior Financial Officers (referred to in this document as the "Code") has been adopted by each of the investment companies for which OppenheimerFunds, Inc. or one of its subsidiaries or affiliates (referred to collectively in this document as "OFI") acts as investment adviser (individually, a "Fund" and collectively, the "Funds"), and by OFI to effectuate compliance with Section 406 under the Sarbanes-Oxley Act of 2002 and the rules adopted to implement Section 406. This Code applies to each Fund's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions ("Covered Officers"). A listing of positions currently within the ambit of Covered Officers is attached as EXHIBIT A.(1) 1. Purpose of the Code This Code sets forth standards and procedures that are reasonably designed to deter wrongdoing and promote: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely, and understandable disclosure in reports and documents that a Fund files with, or submits to, the U.S. Securities and Exchange Commission ("SEC") and in other public ommunications made by the Fund; o compliance with applicable governmental laws, rules and regulations; o the prompt internal reporting of violations of this Code to the Code Administrator identified below; and o accountability for adherence to this Code. In general, the principles that govern honest and ethical conduct, including the avoidance of conflicts of interest between personal and professional relationships, reflect, at the minimum, the following: (1) the duty at all times in performing any responsibilities as a Fund financial officer, controller, accountant or principal executive officer to place the interests of the Funds ahead of personal interests; (2) the fundamental standard that Covered Officers should not take inappropriate advantage of their positions; (3) the duty to assure that a Fund's financial statements and reports to its shareholders are prepared honestly and accurately in accordance with applicable rules, regulations and accounting standards; and (4) the duty to conduct the Funds' business and affairs in an honest and ethical manner. - -------- 1 The obligations imposed by this Code on Covered Officers are separate from and in addition to any obligations that may be imposed on such persons as Covered Persons under the Code of Ethics adopted by the Oppenheimer Funds dated May 15, 2002, under Rule 17j-1 of the Investment Company Act of 1940, as amended and any other code of conduct applicable to Covered Officers in whatever capacity they serve. This Code does not incorporate by reference any provisions of the Rule 17j-1 Code of Ethics and accordingly, any violations or waivers granted under the Rule 17j-1 Code of Ethics will not be considered a violation or waiver under this Code. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. It is acknowledged that, as a result of the contractual relationship between each Fund and OFI, of which the Covered Officers are also officers or employees, and subject to OFI's fiduciary duties to each Fund, the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on OFI and the Funds. It is further acknowledged that the participation of the Covered Officers in such activities is inherent in the contractual relationship between each Fund and OFI and is consistent with the expectations of the Board of Trustees/Directors of the performance by the Covered Officers of their duties as officers of the Funds. 2. Prohibitions The specific provisions and reporting requirements of this Code are concerned primarily with promoting honest and ethical conduct and avoiding conflicts of interest in personal and professional relationships. No Covered Officer may use information concerning the business and affairs of a Fund, including the investment intentions of a Fund, or use his or her ability to influence such investment intentions, for personal gain to himself or herself, his or her family or friends or any other person or in a manner detrimental to the interests of a Fund or its shareholders. No Covered Officer may use his or her personal influence or personal relationships to influence the preparation and issuance of financial reports of a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund and its shareholders. No Covered Officer shall intentionally for any reason take any action or fail to take any action in connection with his or her official acts on behalf of a Fund that causes the Fund to violate applicable laws, rules and regulations. No Covered Officer shall, in connection with carrying out his or her official duties and responsibilities on behalf of a Fund: (i) employ any device, scheme or artifice to defraud a Fund or its shareholders; (ii) intentionally cause a Fund to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading in its official documents, regulatory filings, financial statements or communications to the public; (iii) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund or its shareholders; (iv) engage in any manipulative practice with respect to any Fund; (v) use his or her personal influence or personal relationships to influence any business decision, investment decisions, or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund or its shareholders; (vi) intentionally cause a Fund to fail to comply with applicable laws, rules and regulations, including failure to comply with the requirement of full, fair, accurate, understandable and timely disclosure in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by the Fund; (vii) intentionally mislead or omit to provide material information to the Fund's independent auditors or to the Board of Trustees/Directors or the officers of the Fund or its investment adviser in connection with financial reporting matters; (viii) fail to notify the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser promptly if he or she becomes aware of any existing or potential violations of this Code or applicable laws; (ix) retaliate against others for, or otherwise discourage the reporting of, actual or apparent violations of this Code; or (x) fails to acknowledge or certify compliance with this Code if requested to do so. 3. Reports of Conflicts of Interests If a Covered Officer becomes aware of a conflict of interest under this Code or, to the Covered Officer's reasonable belief, the appearance of one, he or she must immediately report the matter to the Code's Administrator. If the Code Administrator is involved or believed to be involved in the conflict of interest or appearance of conflict of interest, the Covered Officer shall report the matter directly to the OFI's Chief Executive Officer. Upon receipt of a report of a conflict, the Code Administrator will take prompt steps to determine whether a conflict of interest exists. If the Code Administrator determines that an actual conflict of interest exists, the Code Administrator will take steps to resolve the conflict. If the Code Administrator determines that the appearance of a conflict exists, the Code Administrator will take appropriate steps to remedy such appearance. If the Code Administrator determines that no conflict or appearance of a conflict exists, the Code Administrator shall meet with the Covered Officer to advise him or her of such finding and of his or her reason for taking no action. In lieu of determining whether a conflict or appearance of conflict exists, the Code Administrator may in his or her discretion refer the matter to the Fund's Board of Trustees/Directors. 4. Waivers Any Covered Officer requesting a waiver of any of the provisions of this Code must submit a written request for such waiver to the Code Administrator, setting forth the basis of such request and all necessary facts upon which such request can be evaluated. The Code Administrator shall review such request and make a written determination thereon, which shall be binding. The Code Administrator may in reviewing such request, consult at his discretion with legal counsel to OFI or to the Fund. In determining whether to waive any of the provisions of this Code, the Code Administrator shall consider hether the proposed waiver: : (i) is prohibited by this Code; (ii) is consistent with honest and ethical conduct; and (iii) will result in a conflict of interest between the Covered Officer's personal and professional obligations to a Fund. In lieu of determining whether to grant a waiver, the Code Administrator in his or her discretion may refer the matter to the appropriate Fund's Board of Trustees/Directors. 5. Reporting Requirements (a) Each Covered Officer shall, upon becoming subject to this Code, be provided with a copy of this Code and shall affirm in writing that he or she has received, read, understands and shall adhere to this Code. (b) At least annually, all Covered Officers shall be provided with a copy of this Code and shall certify that they have read and understand this Code and recognize that they are subject thereto. (c) At least annually, all Covered Officers shall certify that they have complied with the requirements of this Code and that they have disclosed or reported any violations of this Code to the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser. (d) The Code Administrator shall submit a quarterly report to the Board of Trustees/Directors of each Fund containing (i) a description of any report of a conflict of interest or apparent conflict and the disposition thereof; (ii) a description of any request for a waiver from this Code and the disposition thereof; (iii) any violation of the Code that has been reported or found and the sanction imposed; (iv) interpretations issued under the Code by the Code Administrator; and (v) any other significant information arising under the Code including any proposed amendments. (e) Each Covered Officer shall notify the Code Administrator promptly if he or she knows of or has a reasonable belief that any violation of this Code has occurred or is likely to occur. Failure to do so is itself a violation of this Code. (f) Any changes to or waivers of this Code, including "implicit" waivers as defined in applicable SEC rules, will, to the extent required, be disclosed by the Code Administrator or his or her designee as provided by applicable SEC rules.(2) 6. Annual Renewal At least annually, the Board of Trustees/Directors of each Fund shall review the Code and determine whether any amendments (including any amendments that may be recommended by OFI or the Fund's legal counsel) are necessary or desirable, and shall consider whether to renew and/or amend the Code. 7. Sanctions Any violation of this Code of Ethics shall be subject to the imposition of such sanctions by OFI as may be deemed appropriate under the circumstances to achieve the purposes of this Code and may include, without limitation, a letter of censure, suspension from employment or termination of employment, in the sole discretion of OFI. 8. Administration and Construction (a) The administration of this Code of Ethics shall be the responsibility of OFI's General Counsel or his designee as the "Code Administrator" of this Code, acting under the terms of this Code and the oversight of the Trustees/Directors of the Funds. (b) The duties of such Code Administrator will include: (i) Continuous maintenance of a current list of the names of all Covered Officers; (ii) Furnishing all Covered Officers a copy of this Code and initially and periodically informing them of their duties and obligations thereunder; (iii) Maintaining or supervising the maintenance of all records required by this Code, including records of waivers granted hereunder; (iv) Issuing interpretations of this Code which appear to the Code Administrator to be consistent with the objectives of this Code and any applicable laws or regulations; (v) Conducting such inspections or investigations as shall reasonably be required to detect and report any violations of this Code, with his or her recommendations, to the Chief Executive Officer of OFI and to the Trustees/Directors of the - ----------- 2 An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the General Counsel, the Code Administrator, an executive officer of the Fund or OFI. affected Fund(s) or any committee appointed by them to deal with such information; and (vi) Periodically conducting educational training programs as needed to explain and reinforce the terms of this Code. (c) In carrying out the duties and responsibilities described under this Code, the Code Administrator may consult with legal counsel, who may include legal counsel to the applicable Funds, and such other persons as the Administrator shall deem necessary or desirable. The Code Administrator shall be protected from any liability hereunder or under any applicable law, rule or regulation, for decisions made in good faith based upon his or her reasonable judgment. 9. Required Records The Administrator shall maintain and cause to be maintained in an easily accessible place, the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of OFI in which the applicable event or report occurred): (a) A copy of any Code which has been in effect during the period; (b) A record of any violation of any such Code and of any action taken as a result of such violation, during the period; (c) A copy of each annual report pursuant to the Code made by a Covered Officer during the period; (d) A copy of each report made by the Code Administrator pursuant to this Code during the period; (e) A list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (f) A record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; and (g) A record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision. 10. Amendments and Modifications This Code may not be amended or modified except by an amendment in writing which is approved or ratified by OFI and by a majority vote of the Independent Trustees/Directors of each of the applicable Funds. 11. Confidentiality. This Code is identified for the internal use of the Funds and OFI. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees/Directors of the affected Fund(s) and their counsel, the independent auditors of the affected Funds and/or OFI, and to OFI, except as such disclosure may be required pursuant to applicable judicial or regulatory process. Dated as of: June 25, 2003 Adopted by Board I of the Oppenheimer Funds June 13, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board II of the Oppenheimer/Centennial Funds June 24, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board III of the Oppenheimer Funds June 9, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by Board IV of the Oppenheimer Funds May 21, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Secretary Adopted by the Boards of Directors of OppenheimerFunds, Inc. and its subsidiaries and affiliates that act as investment adviser to the Oppenheimer or Centennial funds June 1, 2003 /S/ ROBERT G. ZACK Robert G. Zack, Senior Vice President and General Counsel EXHIBIT A POSITIONS COVERED BY THIS CODE OF ETHICS FOR SENIOR OFFICERS Each Oppenheimer or Centennial fund Principal Executive Officer Principal Financial Officer Treasurer Assistant Treasurer Personnel of OFI who by virtue of their jobs perform critical financial and accounting functions for OFI on behalf of a Fund, including: Treasurer Senior Vice President/Fund Accounting Vice President/Fund Accounting EX-99.CERT 4 ex99_302cert-640.txt EX99_302CERT-640 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 High Income 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 c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 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 control over financial reporting. Date: 2/11/04 /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 High Income 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 c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 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 control over financial reporting. Date: 2/11/04 /s/Brian W. Wixted ---------------------------- Brian W. Wixted Chief Financial Officer EX-99.906 5 ex99_906cert-640.txt EX99_906CERT-640 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 High Income 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 December 31, 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 High Income Fund/VA Oppenheimer High Income Fund/VA /s/John V. Murphy /s/Brian W. Wixted - ---------------------------- --------------------------- John V. Murphy Brian W. Wixted Date: 2/11/04 Date: 2/11/04 -----END PRIVACY-ENHANCED MESSAGE-----