-----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, NJTYL6xu5Yk8TzFSxOkkwM3+wNMcG1Rq9sPU/91KL9UTNZ4rWEzNLjg0+sLbzjFI 8ImBXJsg3WR7h49vPBguDQ== 0000935069-04-000308.txt : 20040302 0000935069-04-000308.hdr.sgml : 20040302 20040301184854 ACCESSION NUMBER: 0000935069-04-000308 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: 04640675 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 ra0670_9476vef.txt RA0670_9476VEF 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 MULTIPLE STRATEGIES 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. The Fund's strong performance in its equity portion during its fiscal year ended December 31, 2003, was primarily driven by its stock-selection strategy. The portfolio manager's "bottom-up" investment approach seeking companies with above-average fundamentals at below average prices led it to stocks from a variety of market-capitalization ranges and representing a number of investment styles. In addition, the Fund's performance was supported by income derived from dividend-paying stocks and relatively strong total returns from a diversified portfolio of bonds. The Fund benefited from strong performance in the consumer discretionary, industrials, financial and consumer staples sectors during the reporting period. Diversified franchiser Cendant Corp. saw its stock price rise as investors gradually recognized that its business fundamentals were better than they had anticipated. Cendant's housing-related businesses, such as realtor Century 21, benefited from a persistently strong housing market, and its cyclical travel-related businesses, such as car rental agencies Avis and Budget, strengthened along with the overall economy. In the industrials sector, aeronautical and defense contractors proved to be wise investments this year, as Brazilian aircraft manufacturer Empresa Brasileira de Aeronautica SA (Embraer) and Orbital Sciences Corp. added to performance. Orbital, a key contractor for Northrop, has been engaged to take part in an 8-year contract to develop and test an antimissile defense system for the U.S. Defense Department. Other positive contributors during the latter part of 2003 included Liberty Media Corp., which struggled early in the year but rallied following a large stock buyback, and financial services provider J.P. Morgan Chase & Co., which benefited from strong mortgage activity and a rebounding stock market during the year. The Fund's overweight position in real estate also proved beneficial. Host Marriott Corp. was a strong contributor to the Fund's performance as both room rates and occupancy rose throughout 2003. Also, healthcare holdings, like Province Healthcare Co. and Guidant Corp., a leader in the treatment of cardiac and vascular disease, were also strong performers this year. On the other hand, some holdings produced disappointing returns during the period. Schering-Plough, a manufacturer of pharmaceutical and health care products underperformed due to disappointing results from their allergy and hepatitis drugs. Despite what we believe to be the high quality of its assets, media conglomerate Viacom, Inc., failed to benefit as much as we had hoped from an upturn in advertising revenues. The Fund's fixed-income segment successfully added value to the overall performance through an emphasis on corporate bonds, which rallied dramatically as investors became more comfortable with credit-related risks after many issuers reduced debt and improved their cost structures in the wake of 2002's corporate governance scandals. Mortgage-backed securities also contributed positively to performance, primarily due to a focus on higher-coupon securities that held up relatively well during the market-decline in July and August. Finally, our decision to maintain slightly less duration, or interest-rate sensitivity, than many of our peers, proved to significantly benefit performance once rates began backing up in June. The Fund's holdings, strategies and management are subject to change. 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 shares, performance is measured over a ten-year period. In the case of Service shares, performance is measured from inception of the class on May 1, 2002. 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 both the S&P 500 Index, an unmanaged index of U.S. equity securities that is a measure of the general domestic stock market and the Lehman Brothers Aggregate Bond Index, an unmanaged index of U.S. corporate, government and mortgage-backed securities that is a measure of the domestic 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 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. 4 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA NON-SERVICE SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Multiple Strategies Fund/VA (Non-Service) S&P 500 Index Lehman Brothers Aggregate Bond Index [LINE GRAPH]
Oppenheimer Multiple Strategies S&P 500 Lehman Brothers Fund/VA (Non-Service) Index Aggregate Bond Index 12/31/1993 $10,000 $10,000 $10,000 03/31/1994 9,759 9,621 9,713 06/30/1994 9,593 9,662 9,613 09/30/1994 9,976 10,133 9,672 12/31/1994 9,805 10,131 9,708 03/31/1995 10,440 11,117 10,198 06/30/1995 11,128 12,176 10,819 09/30/1995 11,656 13,143 11,032 12/31/1995 11,900 13,934 11,502 03/31/1996 12,303 14,682 11,298 06/30/1996 12,635 15,340 11,362 09/30/1996 13,126 15,814 11,572 12/31/1996 13,744 17,131 11,919 03/31/1997 13,748 17,591 11,853 06/30/1997 15,001 20,660 12,288 09/30/1997 16,164 22,207 12,696 12/31/1997 16,110 22,845 13,070 03/31/1998 17,223 26,029 13,274 06/30/1998 17,253 26,893 13,584 09/30/1998 15,449 24,224 14,158 12/31/1998 17,182 29,378 14,206 03/31/1999 17,460 30,841 14,135 06/30/1999 18,637 33,011 14,011 09/30/1999 18,021 30,955 14,106 12/31/1999 19,210 35,557 14,089 03/31/2000 20,384 36,371 14,400 06/30/2000 20,496 35,405 14,651 09/30/2000 20,557 35,062 15,092 12/31/2000 20,446 32,321 15,727 03/31/2001 20,275 28,491 16,204 06/30/2001 21,538 30,158 16,296 09/30/2001 19,176 25,733 17,047 12/31/2001 20,900 28,482 17,055 03/31/2002 20,974 28,561 17,071 06/30/2002 19,437 24,737 17,701 09/30/2002 17,545 20,466 18,512 12/31/2002 18,726 22,190 18,804 03/31/2003 18,534 21,491 19,066 06/30/2003 20,857 24,798 19,542 09/30/2003 21,591 25,454 19,514 12/31/2003 23,399 28,551 19,576
AVERAGE ANNUAL TOTAL RETURNS OF NON-SERVICE SHARES OF THE FUND AT 12/31/03 1-Year 24.96% 5-Year 6.37% 10-Year 8.87% Inception Date 2/9/1987 SERVICE SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Multiple Strategies Fund/VA (Service) S&P 500 Index Lehman Brothers Aggregate Bond Index [LINE GRAPH]
Oppenheimer Multiple Strategies S&P 500 Lehman Brothers Fund/VA (Service) Index Aggregate Bond Index 05/01/2002 $10,000 $10,000 $10,000 06/30/2002 9,407 9,220 10,172 09/30/2002 8,491 7,628 10,638 12/31/2002 9,056 8,271 10,806 03/31/2003 8,951 8,010 10,956 06/30/2003 10,075 9,242 11,230 09/30/2003 10,423 9,487 11,214 12/31/2003 11,291 10,641 11,249
CUMULATIVE TOTAL RETURN OF SERVICE SHARES OF THE FUND AT 12/31/03 1-Year 24.69% Since Inception (5/1/02) 7.56% Inception Date 5/1/2002 THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. 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. 5 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA STATEMENT OF INVESTMENTS December 31, 2003 - -------------------------------------------------------------------------------- MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------- COMMON STOCKS--56.4% - ---------------------------------------------------------------- CONSUMER DISCRETIONARY--10.1% - ---------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--1.6% Brinker International, Inc. 1 117,700 $ 3,902,932 - ---------------------------------------------------------------- McDonald's Corp. 192,000 4,767,360 -------------- 8,670,292 - ---------------------------------------------------------------- HOUSEHOLD DURABLES--1.0% Toll Brothers, Inc. 1 111,100 4,417,336 - ---------------------------------------------------------------- WCI Communities, Inc. 1 61,000 1,257,210 -------------- 5,674,546 - ---------------------------------------------------------------- MEDIA--5.7% AMC Entertainment, Inc. 1 144,500 2,197,850 - ---------------------------------------------------------------- EchoStar Communications Corp., Cl. A 1,2 94,600 3,216,400 - ---------------------------------------------------------------- Gilat Satellite Networks Ltd. 1 44,600 218,094 - ---------------------------------------------------------------- Liberty Media Corp., Cl. A 1 779,900 9,273,011 - ---------------------------------------------------------------- Regal Entertainment Group 46,600 956,232 - ---------------------------------------------------------------- UnitedGlobalCom, Inc., Cl. A 1 978,171 8,294,890 - ---------------------------------------------------------------- Viacom, Inc., Cl. B 2 169,800 7,535,724 -------------- 31,692,201 - ---------------------------------------------------------------- MULTILINE RETAIL--1.2% Sears Roebuck & Co. 142,300 6,473,227 - ---------------------------------------------------------------- SPECIALTY RETAIL--0.5% Gap, Inc. (The) 2 126,900 2,945,349 - ---------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS--0.1% Nike, Inc., Cl. B 2 11,500 787,290 - ---------------------------------------------------------------- CONSUMER STAPLES--3.8% - ---------------------------------------------------------------- BEVERAGES--1.0% Adolph Coors Co., Cl. B 22,900 1,284,690 - ---------------------------------------------------------------- Constellation Brands, Inc., Cl. A 1 133,900 4,409,327 -------------- 5,694,017 - ---------------------------------------------------------------- FOOD PRODUCTS--1.1% Tyson Foods, Inc., Cl. A 308,500 4,084,540 - ---------------------------------------------------------------- Unilever NV, NY Shares 30,000 1,947,000 -------------- 6,031,540 - ---------------------------------------------------------------- PERSONAL PRODUCTS--0.4% Estee Lauder Cos., Inc. (The), Cl. A 58,000 2,277,080 - ---------------------------------------------------------------- TOBACCO--1.3% Altria Group, Inc. 136,300 7,417,446 - ---------------------------------------------------------------- ENERGY--3.3% - ---------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--0.3% Halliburton Co. 42,600 1,107,600 - ---------------------------------------------------------------- Schlumberger Ltd. 16,100 880,992 -------------- 1,988,592 MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------- OIL & GAS--3.0% BP plc, ADR 34,800 $ 1,717,380 - ---------------------------------------------------------------- Devon Energy Corp. 17,900 1,024,954 - ---------------------------------------------------------------- Houston Exploration Co. 1 18,300 668,316 - ---------------------------------------------------------------- LUKOIL, Sponsored ADR 9,300 865,830 - ---------------------------------------------------------------- Petroleo Brasileiro SA, Preference 81,000 2,145,026 - ---------------------------------------------------------------- Pioneer Natural Resources Co. 1 46,000 1,468,780 - ---------------------------------------------------------------- Talisman Energy, Inc. 56,300 3,203,077 - ---------------------------------------------------------------- Total SA, B Shares 1,700 316,069 - ---------------------------------------------------------------- TotalFinaElf SA, Sponsored ADR 24,000 2,220,240 - ---------------------------------------------------------------- Westport Resources Corp. 1 53,900 1,609,454 - ---------------------------------------------------------------- YUKOS, ADR 36,617 1,537,914 -------------- 16,777,040 - ---------------------------------------------------------------- FINANCIALS--9.3% - ---------------------------------------------------------------- CAPITAL MARKETS--0.9% Bank of New York Co., Inc. (The) 2 87,700 2,904,624 - ---------------------------------------------------------------- UBS AG 25,042 1,715,025 -------------- 4,619,649 - ---------------------------------------------------------------- COMMERCIAL BANKS--2.6% FleetBoston Financial Corp. 146,200 6,381,630 - ---------------------------------------------------------------- SunTrust Banks, Inc. 41,500 2,967,250 - ---------------------------------------------------------------- U.S. Bancorp 106,700 3,177,526 - ---------------------------------------------------------------- Wells Fargo & Co. 35,300 2,078,817 -------------- 14,605,223 - ---------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--2.5% CIT Group, Inc. 72,000 2,588,400 - ---------------------------------------------------------------- Citigroup, Inc. 98,900 4,800,606 - ---------------------------------------------------------------- J.P. Morgan Chase & Co. 2 144,500 5,307,485 - ---------------------------------------------------------------- Merrill Lynch & Co., Inc. 2 23,000 1,348,950 -------------- 14,045,441 - ---------------------------------------------------------------- INSURANCE--2.3% American International Group, Inc. 2 6,000 397,680 - ---------------------------------------------------------------- Chubb Corp. 49,900 3,398,190 - ---------------------------------------------------------------- Platinum Underwriters Holdings Ltd. 55,400 1,662,000 - ---------------------------------------------------------------- Prudential Financial, Inc. 96,600 4,034,982 - ---------------------------------------------------------------- XL Capital Ltd., Cl. A 44,200 3,427,710 -------------- 12,920,562 - ---------------------------------------------------------------- REAL ESTATE--1.0% Developers Diversified Realty Corp. 42,800 1,436,796 - ---------------------------------------------------------------- Host Marriott Corp. 1 334,900 4,125,968 -------------- 5,562,764 6 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------- HEALTH CARE--8.4% - ---------------------------------------------------------------- BIOTECHNOLOGY--0.8% Applera Corp./Celera Genomics Group 1 48 $ 668 - ---------------------------------------------------------------- Medimmune, Inc. 1 25,500 647,700 - ---------------------------------------------------------------- Wyeth 93,100 3,952,095 -------------- 4,600,463 - ---------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--1.4% Applera Corp./Applied Biosystems Group 192 3,976 - ---------------------------------------------------------------- Beckman Coulter, Inc. 61,000 3,100,630 - ---------------------------------------------------------------- Guidant Corp. 2 54,400 3,274,880 - ---------------------------------------------------------------- Millipore Corp. 1 29,800 1,282,890 -------------- 7,662,376 - ---------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--1.6% Aetna, Inc. 58,400 3,946,672 - ---------------------------------------------------------------- Covance, Inc. 1 63,800 1,709,840 - ---------------------------------------------------------------- Province Healthcare Co. 1 206,600 3,305,600 -------------- 8,962,112 - ---------------------------------------------------------------- PHARMACEUTICALS--4.6% Abbott Laboratories 2 96,500 4,496,900 - ---------------------------------------------------------------- GlaxoSmithKline plc, ADR 62,600 2,918,412 - ---------------------------------------------------------------- Johnson & Johnson 2 12,000 619,920 - ---------------------------------------------------------------- Novartis AG 89,813 4,077,623 - ---------------------------------------------------------------- Pfizer, Inc. 140,700 4,970,931 - ---------------------------------------------------------------- Schering-Plough Corp. 175,200 3,046,728 - ---------------------------------------------------------------- Teva Pharmaceutical Industries Ltd., Sponsored ADR 51,800 2,937,578 - ---------------------------------------------------------------- Watson Pharmaceuticals, Inc. 1 54,200 2,493,200 -------------- 25,561,292 - ---------------------------------------------------------------- INDUSTRIALS--6.6% - ---------------------------------------------------------------- AEROSPACE & DEFENSE--2.6% Boeing Co. 38,700 1,630,818 - ---------------------------------------------------------------- Empresa Brasileira de Aeronautica SA, ADR 101,400 3,552,042 - ---------------------------------------------------------------- Northrop Grumman Corp. 2 5,000 478,000 - ---------------------------------------------------------------- Orbital Sciences Corp. 1 433,164 5,206,631 - ---------------------------------------------------------------- Raytheon Co. 121,800 3,658,872 -------------- 14,526,363 - ---------------------------------------------------------------- AIRLINES--0.1% Singapore Airlines Ltd. 116,000 765,000 - ---------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--2.7% Brink's Co. (The) 74,000 1,673,140 - ---------------------------------------------------------------- Cendant Corp. 1 484,500 10,789,815 - ---------------------------------------------------------------- ChoicePoint, Inc. 1 67,500 2,571,075 -------------- 15,034,030 MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--0.4% Tyco International Ltd. 2 76,000 $ 2,014,000 - ---------------------------------------------------------------- ROAD & RAIL--0.8% Burlington Northern Santa Fe Corp. 40,600 1,313,410 - ---------------------------------------------------------------- Canadian National Railway Co. 22,000 1,392,160 - ---------------------------------------------------------------- Swift Transportation Co., Inc. 1 87,000 1,828,740 -------------- 4,534,310 - ---------------------------------------------------------------- INFORMATION TECHNOLOGY--9.7% - ---------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--0.2% Cisco Systems, Inc. 1,2 20,000 485,800 - ---------------------------------------------------------------- QUALCOMM, Inc. 14,300 771,199 -------------- 1,256,999 - ---------------------------------------------------------------- COMPUTERS & PERIPHERALS--3.1% Hewlett-Packard Co. 334,200 7,676,574 - ---------------------------------------------------------------- International Business Machines Corp. 2 103,500 9,592,380 -------------- 17,268,954 - ---------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--1.3% Flextronics International Ltd. 1 347,800 5,161,352 - ---------------------------------------------------------------- Keyence Corp. 9,160 1,930,805 -------------- 7,092,157 - ---------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--0.6% Net2Phone, Inc. 1 466,000 3,168,800 - ---------------------------------------------------------------- IT SERVICES--0.5% Infosys Technologies Ltd., Sponsored ADR 10,700 1,023,990 - ---------------------------------------------------------------- Titan Corp. (The) 1 91,000 1,984,710 -------------- 3,008,700 - ---------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--2.8% Analog Devices, Inc. 2 40,200 1,835,130 - ---------------------------------------------------------------- ASML Holding NV 1 82,100 1,646,105 - ---------------------------------------------------------------- Brooks Automation, Inc. 1 54,900 1,326,933 - ---------------------------------------------------------------- Intel Corp. 2 164,600 5,300,120 - ---------------------------------------------------------------- KLA-Tencor Corp. 1,2 20,500 1,202,735 - ---------------------------------------------------------------- Novellus Systems, Inc. 1 30,600 1,286,730 - ---------------------------------------------------------------- STMicroelectronics NV 2 43,000 1,161,430 - ---------------------------------------------------------------- Teradyne, Inc. 1 69,500 1,768,775 -------------- 15,527,958 - ---------------------------------------------------------------- SOFTWARE--1.2% BEA Systems, Inc. 1,2 30,000 369,000 - ---------------------------------------------------------------- Compuware Corp. 1 120,800 729,632 - ---------------------------------------------------------------- Microsoft Corp. 72,500 1,996,650 - ---------------------------------------------------------------- Oracle Corp. 1 4,200 55,440 - ---------------------------------------------------------------- Take-Two Interactive Software, Inc. 1 123,800 3,566,678 -------------- 6,717,400 7 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA STATEMENT OF INVESTMENTS Continued - ---------------------------------------------------------------- MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------- MATERIALS--2.0% - ---------------------------------------------------------------- CHEMICALS--0.9% Dow Chemical Co. 95,300 $ 3,961,621 - ---------------------------------------------------------------- Praxair, Inc. 35,000 1,337,000 - ---------------------------------------------------------------- Sterling Chemicals, Inc. 1 18 473 -------------- 5,299,094 - ---------------------------------------------------------------- METALS & MINING--0.5% Companhia Vale do Rio Doce, Sponsored ADR 54,900 2,827,899 - ---------------------------------------------------------------- PAPER & FOREST PRODUCTS--0.6% Boise Cascade Corp. 48,433 1,591,509 - ---------------------------------------------------------------- Bowater, Inc. 33,700 1,560,647 -------------- 3,152,156 - ---------------------------------------------------------------- TELECOMMUNICATION SERVICES--1.5% - ---------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--1.2% IDT Corp., Cl. B 1 224,800 5,199,624 - ---------------------------------------------------------------- Qwest Communications International, Inc. 1 365,700 1,579,824 - ---------------------------------------------------------------- WorldCom, Inc./ WorldCom Group 1 375,000 5,175 -------------- 6,784,623 - ---------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--0.3% AT&T Corp. 57,000 1,157,100 - ---------------------------------------------------------------- AT&T Wireless Services, Inc. 1,2 72,000 575,280 -------------- 1,732,380 - ---------------------------------------------------------------- UTILITIES--1.7% - ---------------------------------------------------------------- ELECTRIC UTILITIES--1.3% AES Corp. (The) 1 389,900 3,680,656 - ---------------------------------------------------------------- Dominion Resources, Inc. 19,600 1,251,068 - ---------------------------------------------------------------- Edison International 1,2 25,500 559,215 - ---------------------------------------------------------------- PG&E Corp. 1 58,100 1,613,437 -------------- 7,104,376 - ---------------------------------------------------------------- GAS UTILITIES--0.1% Kinder Morgan, Inc. 13,600 803,760 - ---------------------------------------------------------------- MULTI-UTILITIES & UNREGULATED POWER--0.3% Equitable Resources, Inc. 42,600 1,828,392 -------------- Total Common Stocks (Cost $214,617,654) 315,415,853 - ---------------------------------------------------------------- PREFERRED STOCKS--0.3% Rouse Co. (The), $3 Cum. Cv., Series B (Cost $995,900) 23,000 1,409,900 MARKET VALUE UNITS SEE NOTE 1 - ---------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% Covergent Communications, Inc. Wts., Exp. 4/1/08 1,3 1,000 $ 10 - ---------------------------------------------------------------- HF Holdings, Inc. Wts., Exp. 9/27/09 1,3 2,593 350 - ---------------------------------------------------------------- Sterling Chemicals, Inc. Wts., Exp. 12/19/08 1,3 692 -- - ---------------------------------------------------------------- Sun Healthcare Group, Inc. Wts., Exp. 2/28/05 1,3 1,241 312 - ---------------------------------------------------------------- United Mexican States Bonds, Series E Rts., Exp. 6/30/07 1,3 4,450,000 5,563 - ---------------------------------------------------------------- United Mexican States Collateralized Fixed Rate Par Bonds: Series B, 6.25%, 12/31/19 Rts., Exp. 6/30/04 1 4,450,000 44,500 Series C, 6.25%, 12/31/19 Rts., Exp. 6/30/05 1,3 4,450,000 8,900 Series D, 6.25%, 12/31/19 Rts., Exp. 6/30/06 1,3 4,450,000 8,900 - ---------------------------------------------------------------- XO Communications, Inc.: Cl. A Wts., Exp. 1/16/10 1 506 987 Cl. B Wts., Exp. 1/16/10 1 379 644 Cl. C Wts., Exp. 1/16/10 1 379 417 -------------- Total Rights, Warrants and Certificates (Cost $40,537) 70,583 PRINCIPAL AMOUNT - ---------------------------------------------------------------- ASSET-BACKED SECURITIES--9.3% Bank One Auto Securitization Trust, Automobile Receivables, Series 2003-1, Cl. A2, 1.29%, 8/21/06 $ 1,250,000 1,249,710 - ---------------------------------------------------------------- BMW Vehicle Owner Trust, Automobile Loan Certificates, Series 2003-A, Cl. A2, 1.45%, 11/25/05 3 1,759,658 1,762,517 - ---------------------------------------------------------------- Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts., Series 2003-2, Cl. A2A, 1.20%, 5/16/05 1,470,000 1,470,782 - ---------------------------------------------------------------- Caterpillar Financial Asset Trust, Equipment Loan Pass-Through Certificates, Series 2003-A, Cl. A2,1.25%, 10/25/05 880,000 880,358 - ---------------------------------------------------------------- Centex Home Equity Co. LLC, Home Equity Loan Asset-Backed Certificates: Series 2003-A, Cl. AF1, 1.836%, 10/25/17 270,603 270,842 Series 2003-B, Cl. AF1, 1.64%, 2/25/18 3 420,526 420,415 Series 2003-C, Cl. AF1, 2.14%, 7/25/18 1,274,467 1,277,429 8 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- ASSET-BACKED SECURITIES Continued Chase Funding Mortgage Loan Asset-Backed Certificates, Home Equity Mtg. Obligations: Series 2003-3, Cl. 1A1, 1.199%, 8/25/17 4 $ 648,200 $ 648,281 Series 2003-4, Cl. 1A1, 1.24%, 9/25/17 4 1,430,738 1,431,090 - ---------------------------------------------------------------- Chase Manhattan Auto Owner Trust, Automobile Loan Pass-Through Certificates: Series 2003-A, Cl. A2,1.26%, 1/16/06 3 560,000 560,367 Series 2003-B, Cl. A2,1.287%, 3/15/06 690,000 690,235 - ---------------------------------------------------------------- CitiFinancial Mortgage Securities, Inc., Home Equity Collateralized Mtg. Obligations: Series 2003-1, Cl. AF1, 1.94%, 1/25/33 491,394 491,814 Series 2003-2, Cl. AF1, 1.219%, 5/25/33 3,4 666,554 666,525 Series 2003-3, Cl. AF1, 1.261%, 8/25/33 3,4 1,021,633 1,021,656 - ---------------------------------------------------------------- DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates: Series 2002-B, Cl. A2, 2.20%, 4/6/05 119,581 119,779 Series 2003-A, Cl. A2, 1.52%, 12/8/05 2,080,000 2,083,765 Series 2003-B, Cl. A2, 1.61%, 7/8/06 2,470,000 2,451,228 - ---------------------------------------------------------------- Ford Credit Auto Owner Trust, Automobile Loan Pass-Through Certificates, Series 2003-A, Cl. A2A, 1.62%, 8/15/05 597,795 599,077 - ---------------------------------------------------------------- Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.: Series 2002-2, Cl. A1, 1.91%, 4/16/07 619,148 621,266 Series 2003-3, Cl. A1, 1.50%, 1/15/08 1,827,112 1,830,249 - ---------------------------------------------------------------- Honda Auto Receivables Owner Trust, Automobile Receivables Obligations: Series 2003-1, Cl. A2, 1.46%, 9/19/05 1,094,314 1,095,991 Series 2003-2, Cl. A2, 1.34%, 12/21/05 1,603,000 1,604,634 Series 2003-3, Cl. A2, 1.52%, 4/21/06 2,310,000 2,313,790 Series 2003-4, Cl. A2, 1.58%, 7/17/06 2,170,000 2,173,529 - ---------------------------------------------------------------- Household Automotive Trust, Automobile Loan Certificates, Series 2003-2, Cl. A2, 1.56%, 12/18/06 1,080,000 1,081,449 - ---------------------------------------------------------------- M&I Auto Loan Trust, Automobile Loan Certificates: Series 2002-1, Cl. A3, 2.49%, 10/22/07 1,590,000 1,603,812 Series 2003-1, Cl. A2, 1.60%, 7/20/06 1,780,000 1,780,684 - ---------------------------------------------------------------- Nissan Auto Lease Trust, Auto Lease Obligations, Series 2003-A, Cl. A2, 1.69%, 12/15/05 1,390,000 1,393,851 - ---------------------------------------------------------------- Nissan Auto Receivables Owner Trust, Automobile Receivable Nts.: Series 2003-A, Cl. A2, 1.45%, 5/16/05 1,585,470 1,587,537 Series 2003-B, Cl. A2, 1.20%, 11/15/05 2,140,000 2,140,837 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- ASSET-BACKED SECURITIES Continued Residential Funding Mortgage Securities II, Inc., Home Equity Loan Pass-Through Certificates, Serie 2003-HS1, Cl. AI2, 1.241%, 1/25/33 4 $ 547,113 $ 547,419 - ---------------------------------------------------------------- Toyota Auto Receivables Owner Trust, Automobile Mtg.-Backed Obligations: Series 2002-B, Cl. A3, 3.76%, 6/15/06 571,105 578,747 Series 2003-A, Cl. A2, 1.28%, 8/15/05 1,919,011 1,920,760 Series 2003-B, Cl. A2, 1.43%, 2/15/06 1,510,000 1,510,782 - ---------------------------------------------------------------- USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.: Series 2002-1, Cl. A3, 2.41%, 10/16/06 909,950 916,488 Series 2003-1, Cl. A2, 1.22%, 4/17/06 1,280,000 1,280,488 - ---------------------------------------------------------------- Volkswagen Auto Loan Enhanced Trust, Automobile Loan Receivables: Series 2003-1, Cl. A2, 1.11%, 12/20/05 2,770,000 2,768,972 Series 2003-2, Cl. A2, 1.55%, 6/20/06 1,200,000 1,201,937 - ---------------------------------------------------------------- Whole Auto Loan Trust, Automobile Loan Receivables: Series 2002-1, Cl. A2, 1.88%, 6/15/05 1,519,986 1,524,122 Series 2003-1, Cl. A2A, 1.40%, 4/15/06 2,240,000 2,241,947 -------------- Total Asset-Backed Securities (Cost $51,784,349) 51,815,161 - ---------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS--24.0% CIT Equipment Collateral, Equipment Receivable-Backed Nts., Series 2003-EF1, Cl. A2, 1.49%, 12/20/05 600,000 600,292 - ---------------------------------------------------------------- Federal Home Loan Mortgage Corp.: 5%, 1/1/34 5 2,672,000 2,637,766 7%, 5/1/29-11/1/33 3,841,335 4,072,957 - ---------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment Conduit Multiclass Pass-Through Certificates: Series 2500, Cl. FD, 1.62%, 3/15/32 4 509,042 505,721 Series 2526, Cl. FE, 1.52%, 6/15/29 4 556,460 554,878 Series 2551, Cl. FD, 1.52%, 1/15/33 4 480,961 482,916 - ---------------------------------------------------------------- Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Series 176, Cl. IO, 0.11%, 6/1/26 6 776,041 129,710 Series 177, Cl. B, 2.489%, 7/1/26 6 1,325,734 233,985 Series 183, Cl. IO, 3.34%, 4/1/27 6 1,278,610 217,735 Series 184, Cl. IO, 0.119%, 12/1/26 6 1,253,253 211,110 - ---------------------------------------------------------------- Federal Home Loan Mortgage Corp., Structured Pass-Through Securities, Collateralized Mtg. Obligations: Series H006, Cl. A1, 1.724%, 4/15/08 302,204 301,969 Series T-42, Cl. A2, 5.50%, 2/25/42 276,035 280,202 9 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA STATEMENT OF INVESTMENTS Continued - ---------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS Continued Federal National Mortgage Assn.: 5%, 1/1/34 5 $ 7,578,000 $ 7,499,856 5.50%, 1/14/34 5 19,268,000 19,520,893 6%, 5/1/16 4,566,251 4,796,106 6.50%, 11/1/27-12/1/27 423,538 444,023 6.50%, 1/25/34 5 42,266,000 44,207,616 7%, 9/1/33-11/1/33 1,855,125 1,967,553 7%, 7/1/32-1/25/34 5 37,260,017 39,460,899 8.50%, 7/1/32 174,277 188,205 - ---------------------------------------------------------------- Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust 2002-77, Cl. WF, 1.52%, 12/18/32 4 834,958 837,555 - ---------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust 2003-81, Cl. PA, 5%, 2/25/12 473,112 484,583 - ---------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates Interest-Only Stripped Mtg.-Backed Security: Trust 2002-47, Cl. NS, 24.442%, 4/25/32 6 1,879,860 192,999 Trust 2002-51, Cl. S, 24.442%, 8/25/32 6 1,726,155 175,590 - ---------------------------------------------------------------- Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Trust 2002-52, Cl. SD, 6.90%, 9/25/32 6 2,332,251 213,994 Trust 222, Cl. 2, (2.144)%, 6/1/23 6 1,634,395 306,960 Trust 240, Cl. 2, (4.534)%, 9/1/23 6 2,615,342 483,523 Trust 252, Cl. 2, (6.48)%, 11/1/23 6 1,832,083 367,296 Trust 273, Cl. 2, (0.977)%, 7/1/26 6 561,834 94,857 - ---------------------------------------------------------------- Government National Mortgage Assn., 8%, 4/15/23 417,675 457,924 - ---------------------------------------------------------------- Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15 983,000 1,134,033 - ---------------------------------------------------------------- Washington Mutual Mortgage Securities Corp., Collateralized Mtg. Obligations Pass-Through Certificates, Series 2003-AR7, Cl. A1, 1.507%, 8/25/33 4 1,164,590 1,165,473 -------------- Total Mortgage-Backed Obligations (Cost $133,254,209) 134,229,179 - ---------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS--5.7% Federal Home Loan Bank Unsec. Bonds: 2.875%, 12/15/06 1,385,000 1,395,911 4.875%, 11/15/13 760,000 769,712 Series EY06, 5.25%, 8/15/06 2,045,000 2,190,925 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS Continued Federal Home Loan Mortgage Corp. Unsec. Nts.: 4.50%, 1/15/13 $ 1,695,000 $ 1,689,540 5.50%, 7/15/06 7 12,500,000 13,476,113 - ---------------------------------------------------------------- Federal National Mortgage Assn. Unsec. Nts.: 4.25%, 7/15/07 5,550,000 5,801,104 7.25%, 1/15/10 3,300,000 3,895,680 - ---------------------------------------------------------------- Freddie Mac Unsec. Nts., 6.875%, 9/15/10 1,500,000 1,744,517 - ---------------------------------------------------------------- Tennessee Valley Authority Bonds: 5.375%, 11/13/08 247,000 266,749 7.125%, 5/1/30 460,000 553,622 -------------- Total U.S. Government Obligations (Cost $31,715,476) 31,783,873 - ---------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS--0.1% United Mexican States Nts., 7.50%, 1/14/12 (Cost $527,240) 475,000 536,988 - ---------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES--10.7% ABN Amro Bank NV (NY Branch), 7.125% Sub. Nts., Series B, 10/15/93 400,000 443,375 - ---------------------------------------------------------------- Aetna, Inc., 7.375% Sr. Unsec. Nts., 3/1/06 400,000 440,302 - ---------------------------------------------------------------- Allied Waste North America, Inc., 10% Sr. Unsec. Sub. Nts., Series B, 8/1/09 400,000 434,000 - ---------------------------------------------------------------- American Honda Finance Corp., 3.85% Nts., 11/6/08 310,000 312,488 - ---------------------------------------------------------------- Amgen, Inc., 8.125% Unsec. Debs., 4/1/97 91,000 112,727 - ---------------------------------------------------------------- AT&T Wireless Services, Inc., 7.50% Sr. Unsec. Nts., 5/1/07 885,000 992,989 - ---------------------------------------------------------------- AXA, 8.60% Unsec. Sub. Nts., 12/15/30 750,000 948,783 - ---------------------------------------------------------------- Bank of America Corp., 7.80% Jr. Unsec. Sub. Nts., 2/15/10 400,000 476,273 - ---------------------------------------------------------------- Bankers Trust Corp., 7.375% Unsec. Sub. Nts., 5/1/08 100,000 114,474 - ---------------------------------------------------------------- Beazer Homes USA, Inc., 8.625% Sr. Unsec. Nts., 5/15/11 565,000 624,325 - ---------------------------------------------------------------- Boeing Capital Corp.: 6.50% Nts., 2/15/12 7 750,000 821,311 7.375% Sr. Nts., 9/27/10 1,340,000 1,542,356 - ---------------------------------------------------------------- British Sky Broadcasting Group plc, 8.20% Sr. Unsec. Nts., 7/15/09 505,000 602,028 - ---------------------------------------------------------------- British Telecommunications plc, 7.875% Nts., 12/15/05 770,000 849,014 - ---------------------------------------------------------------- Cambridge Industries, Inc., Liquidating Trust Interests, 7/15/07 3,8 309,823 -- 10 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued CenterPoint Energy, Inc., 5.875% Nts., 6/1/08 9 $ 690,000 $ 719,504 - ---------------------------------------------------------------- CIT Group, Inc., 7.75% Sr. Unsec. Unsub. Nts., 4/2/12 1,000,000 1,183,293 - ---------------------------------------------------------------- Citigroup, Inc., 6.875% Unsec. Nts., 2/15/98 450,000 498,395 - ---------------------------------------------------------------- Citizens Communications Co., 9.25% Sr. Nts., 5/15/11 555,000 657,228 - ---------------------------------------------------------------- Coca-Cola Co. (The), 7.375% Unsec. Debs., 7/29/93 360,000 420,836 - ---------------------------------------------------------------- Conoco, Inc., 6.95% Sr. Unsec. Nts., 4/15/29 400,000 455,051 - ---------------------------------------------------------------- Credit Suisse First Boston, Inc. (USA), 6.125% Nts., 11/15/11 880,000 959,589 - ---------------------------------------------------------------- CSX Corp., 6.25% Unsec. Nts., 10/15/08 585,000 641,789 - ---------------------------------------------------------------- D.R. Horton, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/15/11 520,000 592,800 - ---------------------------------------------------------------- DaimlerChrysler NA Holding Corp., 6.40% Nts., 5/15/06 7 1,055,000 1,130,956 - ---------------------------------------------------------------- Delphi Corp., 6.55% Nts., 6/15/06 515,000 552,929 - ---------------------------------------------------------------- Deutsche Telekom International Finance BV, 8.50% Unsub. Nts., 6/15/10 770,000 932,448 - ---------------------------------------------------------------- Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04 1,3,10 700,000 122,500 - ---------------------------------------------------------------- Dominion Resources, Inc., 8.125% Sr. Unsub. Nts., 6/15/10 530,000 636,746 - ---------------------------------------------------------------- DTE Energy Co., 6.375% Sr. Nts., 4/15/33 605,000 594,922 - ---------------------------------------------------------------- EOP Operating LP: 6.763% Sr. Unsec. Nts., 6/15/07 180,000 199,516 8.375% Nts., 3/15/06 425,000 476,129 - ---------------------------------------------------------------- Ford Motor Co.: 7.70% Unsec. Debs., 5/15/97 400,000 385,190 8.90% Unsec. Unsub. Debs., 1/15/32 340,000 382,106 - ---------------------------------------------------------------- France Telecom SA: 8.45% Sr. Unsec. Nts., 3/1/06 115,000 128,531 9% Sr. Unsec. Nts., 3/1/11 540,000 649,645 9.75% Sr. Unsec. Nts., 3/1/31 4 230,000 306,645 - ---------------------------------------------------------------- Franklin Resources, Inc., 3.70% Nts., 4/15/08 425,000 423,108 - ---------------------------------------------------------------- Gap, Inc. (The), 6.90% Nts., 9/15/07 495,000 548,831 - ---------------------------------------------------------------- General Electric Capital Corp.: 6.75% Nts., Series A, 3/15/32 195,000 216,606 7.25% Nts., Series A, 2/1/05 400,000 423,743 - ---------------------------------------------------------------- General Motors Acceptance Corp., 6.875% Unsec. Unsub. Nts., 8/28/12 1,665,000 1,794,187 - ---------------------------------------------------------------- General Motors Corp., 8.375% Sr. Unsec. Debs., 7/15/33 790,000 919,799 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued Goldman Sachs Group, Inc. (The), 7.80% Sr. Unsec. Unsub. Nts., Series B, 1/28/10 $ 400,000 $ 474,908 - ---------------------------------------------------------------- Hartford Financial Services Group, Inc. (The), 2.375% Nts., 6/1/06 345,000 343,471 - ---------------------------------------------------------------- Health Net, Inc., 8.375% Sr. Unsec. Unsub. Nts., 4/15/11 480,000 577,565 - ---------------------------------------------------------------- Hertz Corp. (The), 7.625% Sr. Nts., 6/1/12 1,280,000 1,388,799 - ---------------------------------------------------------------- Household Finance Corp., 7% Nts., 5/15/12 820,000 936,611 - ---------------------------------------------------------------- Huntsman Corp./ICI Chemical Co. plc, 13.08% Sr. Unsec. Disc. Nts., 12/31/09 11 500,000 243,750 - ---------------------------------------------------------------- Hutchison Whampoa International Ltd., 7.45% Sr. Bonds., 11/24/33 9 495,000 517,450 - ---------------------------------------------------------------- IT Group, Inc., 11.25% Sr. Unsec. Sub. Nts., Series B, 4/1/09 1,3,10 400,000 -- - ---------------------------------------------------------------- John Hancock Global Funding II, 7.90% Nts., 7/2/10 9 920,000 1,097,715 - ---------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 10.875% Sr. Nts., Series B, 10/15/06 1,3,10 250,000 226,250 - ---------------------------------------------------------------- Kinder Morgan, Inc., 6.50% Sr. Unsec. Nts., 9/1/12 595,000 657,682 - ---------------------------------------------------------------- Kroger Co. (The), 7.80% Sr. Nts., 8/15/07 905,000 1,033,442 - ---------------------------------------------------------------- Leap Wireless International, Inc.: 0%/14.50% Sr. Unsec. Disc. Nts., 4/15/10 1,3, 10, 12 300,000 37,500 12.50% Sr. Nts., 4/15/10 3,10 400,000 58,000 - ---------------------------------------------------------------- Liberty Media Corp., 3.50% Nts., 9/25/06 600,000 603,464 - ---------------------------------------------------------------- MeadWestvaco Corp., 2.75% Nts., 12/1/05 945,000 937,443 - ---------------------------------------------------------------- Merrill Lynch & Co., Inc., 3.375% Nts., Series B, 9/14/07 685,000 694,448 - ---------------------------------------------------------------- Metallurg, Inc., 11% Sr. Nts., 12/1/07 450,000 254,250 - ---------------------------------------------------------------- Morgan Stanley, 6.60% Nts., 4/1/12 570,000 637,624 - ---------------------------------------------------------------- News America Holdings, Inc., 7.75% Sr. Unsec. Debs., 12/1/45 825,000 978,879 - ---------------------------------------------------------------- Nextlink Communications, Inc., Escrow Shares, 6/1/09 3,8 350,000 -- - ---------------------------------------------------------------- Niagara Mohawk Power Corp., 5.375% Sr. Unsec. Nts., 10/1/04 370,000 380,178 - ---------------------------------------------------------------- NiSource Finance Corp.: 3.20% Nts., 11/1/06 180,000 181,575 7.875% Sr. Unsec. Nts., 11/15/10 790,000 940,899 11 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA STATEMENT OF INVESTMENTS Continued - ---------------------------------------------------------------- PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued Northrop Grumman Corp., 7.125% Sr. Nts., 2/15/11 $ 635,000 $ 735,477 - ---------------------------------------------------------------- Orbcomm Global LP, Escrow Shares, 8/15/04 3,8 200,000 -- - ---------------------------------------------------------------- Petroleos Mexicanos, 9.50% Sr. Sub. Nts., 9/15/27 365,000 432,525 - ---------------------------------------------------------------- PF Export Receivables Master Trust, 3.748% Sr. Nts., Series B, 6/1/13 9 445,000 434,020 - ---------------------------------------------------------------- Progress Energy, Inc., 6.55% Sr. Unsec. Nts., 3/1/04 1,160,000 1,168,708 - ---------------------------------------------------------------- Prudential Holdings LLC, 8.695% Bonds, Series C, 12/18/23 9 900,000 1,114,210 - ---------------------------------------------------------------- Prudential Insurance Co. of America, 8.30% Nts., 7/1/25 9 920,000 1,128,512 - ---------------------------------------------------------------- PSEG Energy Holdings, 7.75% Unsec. Nts., 4/16/07 595,000 634,419 - ---------------------------------------------------------------- Pulte Homes, Inc., 8.375% Sr. Nts., 8/15/04 225,000 231,249 - ---------------------------------------------------------------- R&B Falcon Corp., 9.50% Sr. Unsec. Nts., 12/15/08 500,000 618,073 - ---------------------------------------------------------------- Raytheon Co., 6.50% Unsec. Nts., 7/15/05 835,000 890,165 - ---------------------------------------------------------------- Rogers Wireless Communications, Inc., 9.625% Sr. Sec. Nts., 5/1/11 168,000 201,600 - ---------------------------------------------------------------- Safeway, Inc., 3.80% Sr. Unsec. Nts., 8/15/05 1,080,000 1,103,157 - ---------------------------------------------------------------- Sears Roebuck Acceptance Corp., 3.07% Nts., Series VII, 2/25/04 4 825,000 826,422 - ---------------------------------------------------------------- Shopping Center Associates, 6.75% Sr. Unsec. Nts., 1/15/04 9 195,000 195,256 - ---------------------------------------------------------------- Sprint Capital Corp., 8.75% Nts., 3/15/32 920,000 1,090,671 - ---------------------------------------------------------------- Sterling Chemicals, Inc.: 10% Sr. Sec. Nts., 12/19/07 3 221,615 214,413 11.25% Sr. Sub. Nts., 8/15/06 1,3,10 335,000 -- - ---------------------------------------------------------------- TCI Communications, Inc., 9.80% Sr. Unsec. Debs., 2/1/12 1,400,000 1,828,932 - ---------------------------------------------------------------- TECO Energy, Inc., 10.50% Sr. Unsec. Nts., 12/1/07 475,000 556,938 - ---------------------------------------------------------------- Telefonos de Mexico SA, 8.25% Sr. Unsec. Nts., 1/26/06 475,000 526,101 - ---------------------------------------------------------------- Time Warner Cos., Inc., 9.125% Debs., 1/15/13 530,000 674,668 - ---------------------------------------------------------------- Time Warner Entertainment Co. LP: 8.375% Sr. Debs., 3/15/23 10,000 12,430 10.15% Sr. Nts., 5/1/12 500,000 668,460 - ---------------------------------------------------------------- Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11 565,000 626,444 - ---------------------------------------------------------------- Tyco International Group SA: 6.375% Nts., 10/15/11 750,000 805,313 6.75% Sr. Unsub. Nts., 2/15/11 1,910,000 2,096,225 PRINCIPAL MARKET VALUE AMOUNT SEE NOTE 1 - ---------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES Continued Vornado Realty LP, 5.625% Sr. Unsec. Unsub. Nts., 6/15/07 $ 680,000 $ 726,567 - ---------------------------------------------------------------- Waste Management, Inc.: 7% Sr. Nts., 7/15/28 220,000 237,509 7.375% Sr. Unsub. Nts., 8/1/10 435,000 503,322 - ---------------------------------------------------------------- Weyerhaeuser Co., 5.50% Unsec. Unsub. Nts., 3/15/05 845,000 879,941 -------------- Total Non-Convertible Corporate Bonds and Notes (Cost $57,824,667) 60,031,097 - ---------------------------------------------------------------- STRUCTURED NOTES--2.5% Deutsche Bank AG, COUNTS Corp. Sec. Credit Linked Nts., Series 2003-1, 2.89%, 1/7/05 3,4 3,550,000 3,499,590 - ---------------------------------------------------------------- JPMorgan Chase Bank, TRAC-X NA High Yield T1 Credit Default Swap Bonds, 7.375%, 3/25/09 9 447,000 468,233 - ---------------------------------------------------------------- JPMorgan Chase Bank, TRAC-X NA High Yield T2 Credit Default Swap Bonds, 6.05%, 3/25/09 9 6,100,000 6,275,375 - ---------------------------------------------------------------- UBS AG, High Grade Credit Linked Nts., 2.814%, 12/10/04 3,4 3,550,000 3,581,063 -------------- Total Structured Notes (Cost $13,647,000) 13,824,261 - ---------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--12.1% 13 Undivided interest of 4.22% 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 $67,634,419 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 $67,631,000) 67,631,000 67,631,000 - ---------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $572,038,032) 121.1% 676,747,895 - ---------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (21.1) (117,735,883) ---------------------------- NET ASSETS 100.0% $559,012,012 ============================ 12 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income producing security. 2. A sufficient amount of liquid assets has been designated to cover outstanding written options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM MARKET VALUE SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- AT&T Wireless Services, Inc. 720 1/20/04 $ 12.50 $ 69,838 $ -- Abbott Laboratories 200 1/20/04 60.00 17,800 -- American International Group, Inc. 60 1/20/04 90.00 11,820 -- Analog Devices, Inc. 150 1/20/04 55.00 24,750 750 Bank of New York Co., Inc. (The) 66 1/20/04 40.00 7,722 -- BEA Systems, Inc. 300 1/20/04 25.00 26,700 -- Cisco Systems, Inc. 200 1/20/04 25.00 15,800 4,000 EchoStar Communications Corp., Cl. A 220 1/20/04 35.00 27,528 12,100 Edison International 255 1/20/04 15.00 33,772 178,500 Gap, Inc. (The) 450 1/20/04 20.00 43,424 148,500 Guidant Corp. 180 1/20/04 50.00 15,523 181,800 Intel Corp. 360 1/20/04 30.00 33,839 86,400 International Business Machines Corp. 128 1/20/04 130.00 20,096 -- J.P. Morgan Chase & Co. 440 1/20/04 35.00 44,879 79,200 Johnson & Johnson 120 1/20/04 75.00 16,440 -- KLA-Tencor Corp. 150 1/20/04 50.00 56,549 126,000 Merrill Lynch & Co., Inc. 223 1/20/04 60.00 39,470 10,035 Nike, Inc., Cl. B 115 1/20/04 60.00 29,555 96,600 Northrop Grumman Corp. 50 1/20/04 135.00 18,850 -- STMicroelectronics NV 180 1/20/04 40.00 31,860 -- Tyco International Ltd. 420 1/20/04 25.00 74,339 71,400 Viacom, Inc., Cl. B 300 1/20/04 60.00 84,819 -- -------------------------- $745,373 $995,285 ==========================
3. Identifies issues considered to be illiquid. See Note 9 of Notes to Financial Statements. 4. Represents the current interest rate for a variable or increasing rate security. 5. When-issued security to be delivered and settled after December 31, 2003. See Note 1 of Notes to Financial Statements. 6. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. These securities amount to $2,627,759 or 0.47% of the Fund's net assets as of December 31, 2003. 7. Securities with an aggregate market value of $2,056,608 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 8. Received as the result of issuer reorganization. Currently has minimal market value. 9. 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 $11,950,275 or 2.14% of the Fund's net assets as of December 31, 2003. 10. Issue is in default. See Note 1 of Notes to Financial Statements. 11. Zero coupon bond reflects effective yield on the date of purchase. 12. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 13. 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. 13 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA STATEMENT OF ASSETS AND LIABILITIES December 31, 2003 - --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (including cost and market value of $67,631,000 in repurchase agreements) (including securities loaned of approximately $11,172,000) (cost $572,038,032)--see accompanying statement $676,747,895 - ---------------------------------------------------------------------------------------------------------------------------- Collateral for securities loaned 11,372,436 - ---------------------------------------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold on a when-issued basis 4,230,766 Interest, dividends and principal paydowns 2,745,933 Shares of beneficial interest sold 596,016 Futures margins 48,158 Swap contracts 7,964 Other 4,731 ------------- Total assets 695,753,899 - ---------------------------------------------------------------------------------------------------------------------------- LIABILITIES Bank overdraft 6,039,241 - ---------------------------------------------------------------------------------------------------------------------------- Return of collateral for securities loaned 11,372,436 - ---------------------------------------------------------------------------------------------------------------------------- Options written, at value (premiums received $745,373)--see accompanying statement 995,285 - ---------------------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased (including $117,363,430 purchased on a when-issued basis) 118,065,502 Shares of beneficial interest redeemed 187,067 Shareholder reports 33,896 Distribution and service plan fees 12,442 Trustees' compensation 3,730 Transfer and shareholder servicing agent fees 845 Other 31,443 ------------- Total liabilities 136,741,887 - ---------------------------------------------------------------------------------------------------------------------------- NET ASSETS $559,012,012 ============= COMPOSITION OF NET ASSETS Par value of shares of beneficial interest $ 35,117 - ---------------------------------------------------------------------------------------------------------------------------- Additional paid-in capital 478,197,495 - ---------------------------------------------------------------------------------------------------------------------------- Accumulated net investment income 5,770,535 - ---------------------------------------------------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (29,943,928) - ---------------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 104,952,793 ------------- NET ASSETS $559,012,012 ============= - ---------------------------------------------------------------------------------------------------------------------------- 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 $533,709,907 and 33,522,899 shares of beneficial interest outstanding) $15.92 - ---------------------------------------------------------------------------------------------------------------------------- Service Shares: Net asset value, redemption price per share and offering price per share (based on net assets of $25,302,105 and 1,594,246 shares of beneficial interest outstanding) $15.87
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 14 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA STATEMENT OF OPERATIONS For the Year Ended December 31, 2003 - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest $ 8,230,452 - ------------------------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $107,442) 4,271,870 - ------------------------------------------------------------------------------------------------- Portfolio lending fees 8,348 ------------- Total investment income 12,510,670 - ------------------------------------------------------------------------------------------------- EXPENSES Management fees 3,526,680 - ------------------------------------------------------------------------------------------------- Distribution and service plan fees--Service shares 24,612 - ------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Non-Service shares 10,410 Service shares 140 - ------------------------------------------------------------------------------------------------- Shareholder reports 73,256 - ------------------------------------------------------------------------------------------------- Custodian fees and expenses 21,676 - ------------------------------------------------------------------------------------------------- Trustees' compensation 19,746 - ------------------------------------------------------------------------------------------------- Other 40,490 ------------- Total expenses 3,717,010 Less reduction to custodian expenses (2,429) ------------- Net expenses 3,714,581 - ------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 8,796,089 - ------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investments (including premiums on options exercised) 2,398,673 Closing of futures contracts (1,666,008) Closing and expiration of option contracts written 977,861 Foreign currency transactions (358,495) ------------- Net realized gain 1,352,031 - ------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments 95,352,119 Translation of assets and liabilities denominated in foreign currencies 1,670,853 Futures contracts 2,155,452 ------------- Net change in unrealized appreciation (depreciation) 99,178,424 - ------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $109,326,544 =============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 15 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2003 2002 - ---------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 8,796,089 $ 17,145,616 - ---------------------------------------------------------------------------------------------------------------- Net realized gain (loss) 1,352,031 (31,600,661) - ---------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation 99,178,424 (46,421,985) ----------------------------- Net increase (decrease) in net assets resulting from operations 109,326,544 (60,877,030) - ---------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income: Non-Service shares (13,791,025) (19,151,437) Service shares (86,954) -- - ---------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Non-Service shares -- (7,948,868) Service shares -- -- - ---------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS Net increase (decrease) in net assets resulting from beneficial interest transactions: Non-Service shares (18,122,603) (46,188,223) Service shares 20,531,465 2,287,406 - ---------------------------------------------------------------------------------------------------------------- NET ASSETS Total increase (decrease) 97,857,427 (131,878,152) - ---------------------------------------------------------------------------------------------------------------- Beginning of period 461,154,585 593,032,737 ----------------------------- End of period [including accumulated net investment income of $5,770,535 and $13,848,088, respectively] $559,012,012 $461,154,585 =============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 16 | OPPENHEIMER MULTIPLE STRATEGIES 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 $13.16 $15.40 $16.55 $17.46 $17.05 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .27 .50 .53 .72 .82 Net realized and unrealized gain (loss) 2.90 (2.02) (.19) .38 1.04 ------------------------------------------------------------ Total from investment operations 3.17 (1.52) .34 1.10 1.86 - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.41) (.51) (.64) (.82) (.59) Distributions from net realized gain -- (.21) (.85) (1.19) (.86) ------------------------------------------------------------ Total dividends and/or distributions to shareholders (.41) (.72) (1.49) (2.01) (1.45) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $15.92 $13.16 $15.40 $16.55 $17.46 ============================================================ - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 1 24.96% (10.40)% 2.22% 6.44% 11.80% - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $533,710 $458,848 $593,033 $589,298 $578,783 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $475,389 $517,516 $599,324 $566,724 $593,151 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 2 Net investment income 1.82% 3.31% 3.42% 4.36% 4.46% Total expenses 0.76% 3 0.74% 3 0.76% 3 0.76% 3 0.73% 3 - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 248% 42% 30% 42% 17% 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.
17 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SERVICE SHARES YEAR ENDED DECEMBER 31 2003 2002 1 - -------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $13.14 $14.51 - -------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .39 .13 Net realized and unrealized gain (loss) 2.74 (1.50) ---------------------- Total from investment operations 3.13 (1.37) - -------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.40) -- Distributions from net realized gain -- -- ---------------------- Total dividends and/or distributions to shareholders (.40) -- - -------------------------------------------------------------------------------------- Net asset value, end of period $15.87 $13.14 ====================== - -------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 24.69% (9.44)% - -------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $25,302 $2,306 - -------------------------------------------------------------------------------------- Average net assets (in thousands) $9,908 $1,037 - -------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income 1.37% 3.30% Total expenses 1.01% 4 0.99% 4 - -------------------------------------------------------------------------------------- Portfolio turnover rate 248% 42% 1. For the period from May 1, 2002 (inception of offering) to December 31, 2002. 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%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer multiple strategies fund/VA (the Fund) is a separate series of Oppenheimer Variable Account Funds (the Trust), an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund's investment objective is to seek a high total investment return, which includes current income and capital appreciation in the value of its shares. The Trust's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers two classes of shares. Both classes are sold at their offering price, which is the net asset value per share, to separate investment accounts of participating insurance companies as an underlying investment for variable life insurance policies, variable annuity contracts or other investment products. The class of shares designated as Service shares is subject to a distribution and service plan. All classes of shares have identical rights and voting privileges 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 index-linked structured notes whose principal and/or interest depend on the performance of an underlying index. The structured notes are leveraged, which increases the volatility of each note's market value relative to the change in the 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 2.5% of the Fund's net assets, and resulted in unrealized gains of $177,261. - -------------------------------------------------------------------------------- SECURITIES ON A WHEN ISSUED BASIS. Delivery and payment for securities that have been purchased by the Fund on a when issued basis can take place a month or more after the trade date. Normally the settlement date occurs within six months after the trade date; however, the Fund may, from time to time, purchase securities whose settlement date extends six months or more beyond trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Fund maintains segregated assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a when issued basis may increase the volatility of the Fund's net asset value to the extent the Fund executes such purchases while remaining substantially fully invested. As of December 31, 2003, the Fund had entered into net when issued commitments of $113,132,664. In connection with its ability to purchase securities on a when issued basis, the Fund may enter into forward roll transactions with respect to mortgage-related securities. Forward roll transactions require the sale of securities for delivery in the current month, and a simultaneous agreement with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The Fund records the 19 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued incremental difference between the forward purchase and sale of each forward roll as free income or realized gain (loss) on investments. Risks of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Fund to receive inferior securities to what was sold to the counterparty at redelivery; counterparty credit risk; and the potential pay down speed variance between the mortgage-related pools. - -------------------------------------------------------------------------------- SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be subject to a greater degree of credit risk, market fluctuations and loss of income and principal, and may be more sensitive to economic conditions than lower-yielding, higher-rated fixed-income securities. The Fund may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. As of December 31, 2003, securities with an aggregate market value of $444,250, representing 0.08% of the Fund's net assets, were in default. - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. Secured by U.S. government securities, these balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders. 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 ------------------------------------------------------------------------------------------- $5,770,532 $-- $29,278,783 $104,287,645
1. As of December 31, 2003, the Fund had $28,540,378 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: 20 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA EXPIRING ------------------------- 2010 $13,317,573 2011 15,222,805 ----------- Total $28,540,378 =========== 2. During the fiscal years ended December 31, 2003 and December 31, 2002, the Fund did not utilize any capital loss carryforwards. 3. The Fund had $738,405 of straddle losses which were deferred. 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. REDUCTION TO REDUCTION TO ACCUMULATED ACCUMULATED NET NET INVESTMENT REALIZED LOSS ON INCOME INVESTMENTS ----------------------------------------------- $2,995,663 $2,995,663 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 $13,877,979 $23,577,984 Long-term capital gain -- 3,522,321 ------------------------------------ Total $13,877,979 $27,100,305 ==================================== 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 $572,220,690 Federal tax cost of other investments 79,313,454 ------------ Total federal tax cost $651,534,144 ============ Gross unrealized appreciation $111,351,997 Gross unrealized depreciation (7,064,352) ------------ Net unrealized appreciation (depreciation) $104,287,645 ============ - -------------------------------------------------------------------------------- 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 21 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued 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. - -------------------------------------------------------------------------------- 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 1 SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------------- NON-SERVICE SHARES Sold 2,968,658 $ 42,421,336 3,369,152 $ 47,017,452 Dividends and/or distributions reinvested 1,109,495 13,791,025 1,834,820 27,100,305 Redeemed (5,419,511) (74,334,964) (8,852,327) (120,305,980) ------------------------------------------------------------------- Net decrease (1,341,358) $(18,122,603) (3,648,355) $(46,188,223) =================================================================== - ----------------------------------------------------------------------------------------------------------------------- SERVICE SHARES Sold 1,500,492 $ 21,676,028 205,258 $ 2,669,841 Dividends and/or distributions reinvested 7,012 86,954 -- -- Redeemed (88,818) (1,231,517) (29,698) (382,435) ------------------------------------------------------------------- Net increase 1,418,686 $ 20,531,465 175,560 $ 2,287,406 ===================================================================
1. For the year ended December 31, 2002, for Non-Service shares and for the period from May 1, 2002 (inception of offering) to December 31, 2002, for Service shares. - -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended December 31, 2003, were $1,285,127,765 and $1,199,348,827, 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 and 0.60% of average annual net assets over $800 million. - -------------------------------------------------------------------------------- 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 $10,148 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. 22 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA 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 Operations. - -------------------------------------------------------------------------------- 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. 23 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS Continued As of December 31, 2003, the Fund had outstanding futures contracts as follows:
UNREALIZED EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION CONTRACT DESCRIPTION DATES CONTRACTS DECEMBER 31, 2003 (DEPRECIATION) - ------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE U.S. Long Bonds 3/22/04 157 $17,162,063 $ 90,247 U.S. Treasury Nts., 10 yr. 3/22/04 225 25,259,766 465,375 -------- 555,622 -------- CONTRACTS TO SELL U.S. Treasury Nts., 2 yr. 3/30/04 90 19,264,219 (3,479) U.S. Treasury Nts., 5 yr. 3/22/04 149 16,632,125 (69,652) -------- (73,131) -------- $482,491 ========
- -------------------------------------------------------------------------------- 7. OPTION ACTIVITY The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a note to the Statement of Investments. Options written are reported as a liability in the Statement of Assets and Liabilities. Realized gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Written option activity for the year ended December 31, 2003 was as follows: CALL OPTIONS ------------------------- NUMBER OF AMOUNT OF CONTRACTS PREMIUMS - --------------------------------------------------------------- Options outstanding as of December 31, 2002 12,390 $2,063,251 Options closed or expired (6,409) (1,129,063) Options exercised (694) (188,815) ------------------------- Options outstanding as of December 31, 2003 5,287 $ 745,373 ========================= 24 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA - -------------------------------------------------------------------------------- 8. TOTAL RETURN SWAP CONTRACTS The Fund may enter into a total return swap transaction to maintain a total return on a particular investment, or portion of its portfolio, or for other non-speculative purposes. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as notional. The Fund records an increase or decrease to interest income, in the amount due to or owed by the Fund at termination or settlement. Total return swaps are subject to risks (if the counterparty fails to meet its obligations). As of December 31, 2003, the Fund had entered into the following total return swap agreements:
PAID BY RECEIVED BY SWAP NOTIONAL THE FUND AT THE FUND AT TERMINATION UNREALIZED COUNTERPARTY AMOUNT DECEMBER 31, 2003 DECEMBER 31, 2003 DATE APPRECIATION - ---------------------------------------------------------------------------------------------------------- Value of total return One-Month LIBOR of Lehman Brothers Deutsche Bank AG $8,704,000 Flat CMBS Index 6/30/04 $7,964
- -------------------------------------------------------------------------------- 9. ILLIQUID SECURITIES As of December 31, 2003, investments in securities included issues that are illiquid. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 15% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid securities. The aggregate value of illiquid securities subject to this limitation as of December 31, 2003 was $12,194,831, which represents 2.18% of the Fund's net assets. - -------------------------------------------------------------------------------- 10. 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 $11,172,000. Cash of $11,372,436 was received as collateral for the loans, and has been invested in approved instruments. - -------------------------------------------------------------------------------- 11. 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. 25 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 12. OTHER MATTERS On December 15, 2003, the Board of Trustees of the Fund approved a name change. Effective February 27, 2004, the Fund will change its name to Oppenheimer Balanced Fund/VA. 26 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA INDEPENDENT AUDITORS' REPORT - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER MULTIPLE STRATEGIES FUND/VA: We have audited the accompanying statement of assets and liabilities of Oppenheimer Multiple Strategies Fund/VA, (which is 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 Multiple Strategies 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 27 | OPPENHEIMER MULTIPLE STRATEGIES 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 $0.4094 and $0.4014 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 52.77% 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. 28 | OPPENHEIMER MULTIPLE STRATEGIES 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.
29 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA TRUSTEES AND OFFICERS Unaudited / Continued - --------------------------------------------------------------------------------
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.
30 | OPPENHEIMER MULTIPLE STRATEGIES FUND/VA
- ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. FERREIRA, LEAVY, MANIOUDAKIS 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. EMMANUEL FERREIRA, Vice President of the Manager (since January 2003). An officer of 3 portfolios in the Vice President and OppenheimerFunds complex. Formerly, Portfolio Manager at Lashire Investments (July Portfolio Manager 1999-December 2002), and a Senior Analyst at Mark Asset Management (July 1997-June 1999). (since 2003) Age: 36 CHRISTOPHER LEAVY, Senior Vice President (since September 2000) of the Manager; an officer of 7 portfolios in the Vice President and Portfolio OppenheimerFunds complex; prior to joining the Manager in September 2000, he was a portfolio Manager (since 2003) manager of Morgan Stanley Dean Witter Investment Management (1997 - September 2000). Age: 32 ANGELO MANIOUDAKIS, Senior Vice President of the Manager (since April 2002); an officer of 12 Vice President and Portfolio portfolios in the OppenheimerFunds complex; formerly Executive Director and Manager (since 2003) portfolio manager for Miller, Anderson & Sherrerd, a division of Morgan Stanley Age: 37 Investment Management (August 1993-April 2002). 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. 31 | OPPENHEIMER MULTIPLE STRATEGIES 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 $19,000 in fiscal 2003 and $18,500 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 $3,500 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 $90,100 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 ETH 3 ex99_code-670.txt EX99_CODE-670 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-670.txt EX99_302CERT-670 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 Multiple Strategies 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 Multiple Strategies 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-670.txt EX99_906CERT-670 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 Multiple Strategies 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 Multiple Oppenheimer Multiple Strategies Fund/VA Strategies 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-----