-----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, S+5VS4gJ4Pm2jBBsfo26V+b21g9CJWXNI5NoAaBEDCEVLu+q1CXavq/SPsrGIWPN A7f8aV7WmTwTrm0KmR/xNQ== 0000935069-05-000313.txt : 20050225 0000935069-05-000313.hdr.sgml : 20050225 20050225153112 ACCESSION NUMBER: 0000935069-05-000313 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050225 DATE AS OF CHANGE: 20050225 EFFECTIVENESS DATE: 20050225 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: 05641139 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 ra610_12025ncsr.txt RA610_12025NCSR.TXT 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 Capital Appreciation 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, 2004 - December 31, 2004 ITEM 1. REPORTS TO STOCKHOLDERS. FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Over the 12-month period ended December 31, 2004, the Fund participated in the market's rise to a substantial degree. However, returns proved mildly weaker than the benchmark, the S&P 500 Index. Performance compared to the benchmark suffered primarily from the Fund's relatively large exposure to media and technology stocks, two areas that lagged behind the market for the period as a whole. Throughout the reporting period, the Fund maintained its focus on companies that, in our opinion, offered strong potential for above-average growth while exhibiting reasonable valuations relative to their future growth prospects. As the period progressed, we found an increasing number of investments meeting our criteria in the industrial sector. The Fund's growing exposure to industrials significantly contributed to returns. Top performers included diversified industrials, such as General Electric Co.; delivery and shipping services companies; and various defense and aerospace contractors. Returns also benefited from energy holdings, such as Exxon Mobil Corp, which rose on the strength of climbing oil and gas prices. The Fund's energy exposure roughly equaled that of the S&P 500 Index, enabling the Fund to match the benchmark's exceptional gains in the sector. On the other hand, technology stocks pulled back in mid-2004 after delivering very strong gains the prior year. Cyclical semiconductor makers and communications equipment holdings, such as Intel Corp., Cisco Systems, Inc. and an integrated circuits maker experienced the greatest declines. The Fund shifted some assets out of these industries and into other areas of technology, deriving strong gains from holdings such as Yahoo! Inc. and a publishing software developer. Nevertheless, our relatively heavy technology weighting undermined returns on average. Returns compared to the benchmark also suffered due to the Fund's holdings of media stocks, such as Viacom, Inc. and a leading radio station operator, and, to a lesser degree, U.S. pharmaceutical stocks, such as Pfizer, Inc. and another major drug maker. Both areas appeared to offer attractive valuations after sustained declines in prior periods. However, media stocks were dogged by concerns regarding consumer confidence and advertising revenues, while large-cap U.S. pharmaceutical stocks were undermined by issues related to product safety and the depth of drug pipelines. Gains in other consumer discretionary holdings, such as Royal Caribbean Cruises, Ltd., helped compensate for these losses, as did positive returns from other health care holdings, such as Johnson & Johnson and a maker of cancer and autoimmune diseases treatments. As of the end of the period, we continue to believe that a select group of stocks in both areas exhibit attractive valuations relative to their growth prospects. The Fund's portfolio holdings, allocations and strategies 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, 2004. 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 September 18, 2001. Performance information does not reflect charges that apply to separate accounts investing in the Fund. If these charges were taken into account, performance would be lower. The graph assumes that all dividends and capital gains distributions were reinvested in additional shares. The Fund's performance is compared to the performance of the S&P 500 Index, an unmanaged index of equity securities that is a measure of the general domestic stock market. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs show the effect of taxes. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the index. 4 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA NON-SERVICE SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Capital Appreciation Fund/VA (Non-Service) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Capital Appreciation Fund/VA S&P 500 (Non-Service) Index 12/31/1994 10,000 10,000 03/31/1995 10,892 10,973 06/30/1995 12,047 12,019 09/30/1995 13,114 12,973 12/31/1995 13,666 13,753 03/31/1996 14,616 14,491 06/30/1996 15,219 15,141 09/30/1996 16,205 15,609 12/31/1996 17,110 16,909 03/31/1997 16,945 17,363 06/30/1997 19,644 20,392 09/30/1997 22,183 21,919 12/31/1997 21,675 22,548 03/31/1998 24,436 25,691 06/30/1998 25,367 26,544 09/30/1998 21,204 23,910 12/31/1998 26,877 28,997 03/31/1999 28,639 30,441 06/30/1999 31,129 32,583 09/30/1999 29,632 30,554 12/31/1999 38,073 35,096 03/31/2000 43,630 35,900 06/30/2000 41,659 34,946 09/30/2000 41,439 34,608 12/31/2000 37,985 31,902 03/31/2001 34,053 28,122 06/30/2001 36,132 29,767 09/30/2001 28,742 25,399 12/31/2001 33,208 28,113 03/31/2002 32,246 28,191 06/30/2002 26,835 24,416 09/30/2002 22,574 20,200 12/31/2002 24,289 21,902 03/31/2003 23,492 21,212 06/30/2003 27,295 24,476 09/30/2003 28,496 25,124 12/31/2003 31,805 28,181 03/31/2004 32,108 28,658 06/30/2004 32,558 29,151 09/30/2004 31,317 28,606 12/31/2004 34,011 31,245 AVERAGE ANNUAL TOTAL RETURNS OF NON-SERVICE SHARES OF THE FUND AT 12/31/04 1 -Year 6.93% 5-Year -2.23% 10-Year 13.02% SERVICE SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Capital Appreciation Fund/VA (Service) S&P 500 Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Captial Appreciation Fund/VA S&P 500 (Service) Index 09/18/2001 10,000 10,000 09/30/2001 10,000 10,000 12/31/2001 11,551 11,068 03/31/2002 11,209 11,099 06/30/2002 9,311 9,613 09/30/2002 7,825 7,953 12/31/2002 8,422 8,623 03/31/2003 8,131 8,352 06/30/2003 9,448 9,637 09/30/2003 9,859 9,892 12/31/2003 11,007 11,095 03/31/2004 11,102 11,283 06/30/2004 11,252 11,477 09/30/2004 10,815 11,262 12/31/2004 11,735 12,302 AVERAGE ANNUAL TOTAL RETURNS OF SERVICE SHARES OF THE FUND AT 12/31/04 1-Year 6.62% 5-Year N/A Since Inception (9/18/01) 4.99% 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 PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, 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. THE FUND'S TOTAL RETURNS DO NOT INCLUDE THE CHARGES ASSOCIATED WITH THE SEPARATE ACCOUNT PRODUCTS THAT OFFER THIS FUND. SUCH PERFORMANCE WOULD HAVE BEEN LOWER IF SUCH CHARGES WERE TAKEN INTO ACCOUNT. 5 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended December 31, 2004. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any charges associated with the separate accounts that offer this Fund. Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these separate account charges were included, your costs would have been higher. BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (7/1/04) (12/31/04) DECEMBER 31, 2004 - -------------------------------------------------------------------------------- Non-Service shares Actual $1,000.00 $1,044.60 $ 3.40 - -------------------------------------------------------------------------------- Non-Service shares Hypothetical 1,000.00 1,021.82 3.36 - -------------------------------------------------------------------------------- Service shares Actual 1,000.00 1,042.90 4.68 - -------------------------------------------------------------------------------- Service shares Hypothetical 1,000.00 1,020.56 4.63 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended December 31, 2004 are as follows: CLASS EXPENSE RATIOS - --------------------------------------- Non-Service shares 0.66% - --------------------------------------- Service shares 0.91 6 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA STATEMENT OF INVESTMENTS December 31, 2004 - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMON STOCKS--97.1% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--18.7% - -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--1.9% Carnival Corp. 325,500 $ 18,758,565 - -------------------------------------------------------------------------------- Royal Caribbean Cruises Ltd. 358,200 19,500,408 --------------- 38,258,973 - -------------------------------------------------------------------------------- MEDIA--11.7% Clear Channel Communications, Inc. 437,300 14,645,177 - -------------------------------------------------------------------------------- Comcast Corp., Cl. A Special, Non-Vtg. 1 1,955,800 64,228,472 - -------------------------------------------------------------------------------- News Corp., Inc., Cl. B 1,332,400 25,582,080 - -------------------------------------------------------------------------------- Omnicom Group, Inc. 103,300 8,710,256 - -------------------------------------------------------------------------------- Time Warner, Inc. 1 2,280,700 44,336,808 - -------------------------------------------------------------------------------- Univision Communications, Inc., Cl. A 1 444,165 13,000,710 - -------------------------------------------------------------------------------- Viacom, Inc., Cl. B 1,264,300 46,007,877 - -------------------------------------------------------------------------------- Walt Disney Co. (The) 677,000 18,820,600 --------------- 235,331,980 - -------------------------------------------------------------------------------- MULTILINE RETAIL--2.0% Federated Department Stores, Inc. 209,700 12,118,563 - -------------------------------------------------------------------------------- J.C. Penney Co., Inc. (Holding Co.) 122,800 5,083,920 - -------------------------------------------------------------------------------- Target Corp. 459,600 23,867,028 --------------- 41,069,511 - -------------------------------------------------------------------------------- SPECIALTY RETAIL--3.1% Best Buy Co., Inc. 231,700 13,767,614 - -------------------------------------------------------------------------------- Gap, Inc. (The) 828,800 17,504,256 - -------------------------------------------------------------------------------- Home Depot, Inc. 394,100 16,843,834 - -------------------------------------------------------------------------------- Lowe's Cos., Inc. 176,100 10,141,599 - -------------------------------------------------------------------------------- Williams-Sonoma, Inc. 1 114,900 4,026,096 --------------- 62,283,399 - -------------------------------------------------------------------------------- CONSUMER STAPLES--7.6% - -------------------------------------------------------------------------------- BEVERAGES--2.9% Anheuser-Busch Cos., Inc. 382,000 19,378,860 - -------------------------------------------------------------------------------- Coca-Cola Co. (The) 146,100 6,082,143 - -------------------------------------------------------------------------------- PepsiCo, Inc. 629,200 32,844,240 --------------- 58,305,243 - -------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--2.5% Costco Wholesale Corp. 227,800 11,027,798 - -------------------------------------------------------------------------------- Wal-Mart Stores, Inc. 644,100 34,021,362 - -------------------------------------------------------------------------------- Walgreen Co. 130,500 5,007,285 --------------- 50,056,445 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- HOUSEHOLD PRODUCTS--1.6% Kimberly-Clark Corp. 70,200 $ 4,619,862 - -------------------------------------------------------------------------------- Procter & Gamble Co. (The) 529,500 29,164,860 --------------- 33,784,722 - -------------------------------------------------------------------------------- PERSONAL PRODUCTS--0.6% Estee Lauder Cos., Inc. (The), Cl. A 255,800 11,707,966 - -------------------------------------------------------------------------------- ENERGY--4.4% - -------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--0.8% Halliburton Co. 36,100 1,416,564 - -------------------------------------------------------------------------------- Schlumberger Ltd. 221,600 14,836,120 --------------- 16,252,684 - -------------------------------------------------------------------------------- OIL & GAS--3.6% Amerada Hess Corp. 81,900 6,746,922 - -------------------------------------------------------------------------------- Burlington Resources, Inc. 136,300 5,929,050 - -------------------------------------------------------------------------------- Devon Energy Corp. 105,400 4,102,168 - -------------------------------------------------------------------------------- Exxon Mobil Corp. 792,700 40,633,802 - -------------------------------------------------------------------------------- Kinder Morgan Management LLC 249,768 10,165,558 - -------------------------------------------------------------------------------- Murphy Oil Corp. 69,600 5,599,320 --------------- 73,176,820 - -------------------------------------------------------------------------------- FINANCIALS--10.9% - -------------------------------------------------------------------------------- COMMERCIAL BANKS--0.5% Bank of America Corp. 216,200 10,159,238 - -------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--8.3% American Express Co. 435,500 24,549,135 - -------------------------------------------------------------------------------- Bear Stearns Cos., Inc. (The) 112,900 11,550,799 - -------------------------------------------------------------------------------- Citigroup, Inc. 977,500 47,095,950 - -------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The) 116,300 12,099,852 - -------------------------------------------------------------------------------- JPMorgan Chase & Co. 627,028 24,460,362 - -------------------------------------------------------------------------------- MBNA Corp. 369,100 10,404,929 - -------------------------------------------------------------------------------- Morgan Stanley 660,500 36,670,960 --------------- 166,831,987 - -------------------------------------------------------------------------------- INSURANCE--2.1% American International Group, Inc. 381,550 25,056,389 - -------------------------------------------------------------------------------- Prudential Financial, Inc. 245,700 13,503,672 - -------------------------------------------------------------------------------- XL Capital Ltd., Cl. A 59,200 4,596,880 --------------- 43,156,941 - -------------------------------------------------------------------------------- HEALTH CARE--16.1% - -------------------------------------------------------------------------------- BIOTECHNOLOGY--3.1% Amgen, Inc. 1 423,800 27,186,770 - -------------------------------------------------------------------------------- Applera Corp./Applied Biosystems Group 167,700 3,506,607 - -------------------------------------------------------------------------------- Digene Corp. 1 92,200 2,411,030 - -------------------------------------------------------------------------------- Genentech, Inc. 1 183,100 9,967,964 - -------------------------------------------------------------------------------- Gilead Sciences, Inc. 1 469,400 16,424,306 7 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- BIOTECHNOLOGY Continued MedImmune, Inc. 1 124,600 $ 3,377,906 --------------- 62,874,583 - -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--4.4% Medtronic, Inc. 787,700 39,125,059 - -------------------------------------------------------------------------------- Millipore Corp. 1 364,700 18,165,707 - -------------------------------------------------------------------------------- PerkinElmer, Inc. 396,300 8,912,787 - -------------------------------------------------------------------------------- Stryker Corp. 286,900 13,842,925 - -------------------------------------------------------------------------------- Varian Medical Systems, Inc. 1 89,500 3,869,980 - -------------------------------------------------------------------------------- Waters Corp. 1 83,500 3,906,965 --------------- 87,823,423 - -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--0.4% Laboratory Corp. of America Holdings 1 77,300 3,851,086 - -------------------------------------------------------------------------------- Pharmaceutical Product Development, Inc. 1 70,600 2,915,074 - -------------------------------------------------------------------------------- Quest Diagnostics, Inc. 21,200 2,025,660 --------------- 8,791,820 - -------------------------------------------------------------------------------- PHARMACEUTICALS--8.2% Abbott Laboratories 86,400 4,030,560 - -------------------------------------------------------------------------------- Eli Lilly & Co. 307,000 17,422,250 - -------------------------------------------------------------------------------- Johnson & Johnson 633,600 40,182,912 - -------------------------------------------------------------------------------- Merck & Co., Inc. 403,867 12,980,285 - -------------------------------------------------------------------------------- Novartis AG 497,588 25,074,129 - -------------------------------------------------------------------------------- Pfizer, Inc. 1,437,300 38,648,997 - -------------------------------------------------------------------------------- Roche Holdings AG 45,716 5,262,707 - -------------------------------------------------------------------------------- Teva Pharmaceutical Industries Ltd., Sponsored ADR 707,396 21,122,845 --------------- 164,724,685 - -------------------------------------------------------------------------------- INDUSTRIALS--13.0% - -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--3.3% Empresa Brasileira de Aeronautica SA, ADR 325,000 10,868,000 - -------------------------------------------------------------------------------- Honeywell International, Inc. 217,600 7,705,216 - -------------------------------------------------------------------------------- L-3 Communications Holdings, Inc. 127,900 9,367,396 - -------------------------------------------------------------------------------- Lockheed Martin Corp. 284,300 15,792,865 - -------------------------------------------------------------------------------- Northrop Grumman Corp. 111,700 6,072,012 - -------------------------------------------------------------------------------- Rockwell Collins, Inc. 37,700 1,486,888 - -------------------------------------------------------------------------------- United Technologies Corp. 154,700 15,988,245 --------------- 67,280,622 - -------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS--2.0% Expeditors International of Washington, Inc. 180,500 10,086,340 - -------------------------------------------------------------------------------- FedEx Corp. 122,600 12,074,874 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- AIR FREIGHT & LOGISTICS Continued United Parcel Service, Inc., Cl. B 213,100 $ 18,211,526 --------------- 40,372,740 - -------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--0.9% Manpower, Inc. 96,300 4,651,290 - -------------------------------------------------------------------------------- Waste Management, Inc. 464,900 13,919,106 --------------- 18,570,396 - -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--0.1% Rockwell Automation, Inc. 47,300 2,343,715 - -------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--5.9% General Electric Co. 2,802,900 102,305,850 - -------------------------------------------------------------------------------- Tyco International Ltd. 467,600 16,712,024 --------------- 119,017,874 - -------------------------------------------------------------------------------- MACHINERY--0.8% Ingersoll-Rand Co., Cl. A 186,300 14,959,890 - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--22.4% - -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--4.1% Cisco Systems, Inc. 1 2,029,200 39,163,560 - -------------------------------------------------------------------------------- Lucent Technologies, Inc. 1 1,925,200 7,238,752 - -------------------------------------------------------------------------------- Motorola, Inc. 645,800 11,107,760 - -------------------------------------------------------------------------------- Nokia Corp., Sponsored ADR 957,200 14,999,324 - -------------------------------------------------------------------------------- Telefonaktiebolaget LM Ericsson, Sponsored ADR 1 313,900 9,884,711 --------------- 82,394,107 - -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--3.9% Dell, Inc. 1 474,300 19,987,002 - -------------------------------------------------------------------------------- EMC Corp. 1 249,300 3,707,091 - -------------------------------------------------------------------------------- International Business Machines Corp. 472,700 46,598,766 - -------------------------------------------------------------------------------- Sun Microsystems, Inc. 1 1,462,200 7,866,636 --------------- 78,159,495 - -------------------------------------------------------------------------------- ELECTRONIC EQUIPMENT & INSTRUMENTS--1.5% Agilent Technologies, Inc. 1 496,200 11,958,420 - -------------------------------------------------------------------------------- Ingram Micro, Inc., Cl. A 1 381,000 7,924,800 - -------------------------------------------------------------------------------- Tektronix, Inc. 357,800 10,809,138 --------------- 30,692,358 - -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--1.6% VeriSign, Inc. 1 44,400 1,488,288 - -------------------------------------------------------------------------------- Yahoo!, Inc. 1 796,600 30,015,888 --------------- 31,504,176 - -------------------------------------------------------------------------------- IT SERVICES--0.3% Accenture Ltd., Cl. A 1 231,400 6,247,800 8 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--3.7% Altera Corp. 1 149,800 $ 3,100,860 - -------------------------------------------------------------------------------- Analog Devices, Inc. 251,600 9,289,072 - -------------------------------------------------------------------------------- Broadcom Corp., Cl. A 1 321,000 10,361,880 - -------------------------------------------------------------------------------- Intel Corp. 1,578,100 36,911,759 - -------------------------------------------------------------------------------- Texas Instruments, Inc. 601,500 14,808,930 --------------- 74,472,501 - -------------------------------------------------------------------------------- SOFTWARE--7.3% Adobe Systems, Inc. 374,100 23,471,034 - -------------------------------------------------------------------------------- Cadence Design Systems, Inc. 1 517,200 7,142,532 - -------------------------------------------------------------------------------- Citrix Systems, Inc. 1 393,500 9,652,555 - -------------------------------------------------------------------------------- Mercury Interactive Corp. 1 222,800 10,148,540 - -------------------------------------------------------------------------------- Microsoft Corp. 2,760,400 73,730,284 - -------------------------------------------------------------------------------- Novell, Inc. 1 323,400 2,182,950 - -------------------------------------------------------------------------------- SAP AG, Sponsored ADR 499,000 22,060,789 --------------- 148,388,684 - -------------------------------------------------------------------------------- MATERIALS--2.7% - -------------------------------------------------------------------------------- CHEMICALS--2.6% Air Products & Chemicals, Inc. 258,600 14,991,042 - -------------------------------------------------------------------------------- Dow Chemical Co. 88,800 4,396,488 - -------------------------------------------------------------------------------- E.I. DuPont de Nemours & Co. 288,500 14,150,925 - -------------------------------------------------------------------------------- Praxair, Inc. 455,600 20,114,740 --------------- 53,653,195 - -------------------------------------------------------------------------------- METALS & MINING--0.1% Alcan, Inc. 38,800 1,902,752 - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--1.3% - -------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--1.1% Sprint Corp. 450,800 11,202,380 - -------------------------------------------------------------------------------- Telefonos de Mexico SA de CV, Sponsored ADR 294,600 11,289,072 --------------- 22,491,452 - -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--0.2% AT&T Corp. 196,900 3,752,914 --------------- Total Common Stocks (Cost $1,800,967,668) 1,960,795,091 VALUE UNITS SEE NOTE 1 - -------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% - -------------------------------------------------------------------------------- Lucent Technologies, Inc. Wts., Exp. 12/10/07 1 (Cost $0) 84,120 $ 132,910 PRINCIPAL AMOUNT - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--3.1% - -------------------------------------------------------------------------------- Undivided interest of 4.34% in joint repurchase agreement (Principal Amount/Value $1,443,703,000, with a maturity value of $1,443,962,867) with UBS Warburg LLC, 2.16%, dated 12/31/04, to be repurchased at $62,698,284 on 1/3/05, collateralized by Federal National Mortgage Assn., 5%--6%, 4/1/34--10/1/34, with a value of $1,474,609,071 (Cost $62,687,000) $ 62,687,000 62,687,000 - -------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $1,863,654,668) 100.2% 2,023,615,001 - -------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.2) (4,692,277) ------------------------------ NET ASSETS 100.0% $2,018,922,724 ============================== FOOTNOTE TO STATEMENT OF INVESTMENTS 1. Non-income producing security. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 9 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA STATEMENT OF ASSETS AND LIABILITIES December 31, 2004 - -------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- ASSETS - ---------------------------------------------------------------------------------------------------------------------- Investments, at value (cost $1,863,654,668)--see accompanying statement of investments $ 2,023,615,001 - ---------------------------------------------------------------------------------------------------------------------- Cash 294,467 - ---------------------------------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold 4,968,096 Interest and dividends 1,981,833 Shares of beneficial interest sold 1,782,291 Other 18,729 ---------------- Total assets 2,032,660,417 - ---------------------------------------------------------------------------------------------------------------------- LIABILITIES - ---------------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 12,631,037 Shares of beneficial interest redeemed 819,695 Distribution and service plan fees 141,957 Shareholder communications 61,796 Trustees' compensation 27,565 Transfer and shareholder servicing agent fees 1,773 Other 53,870 ---------------- Total liabilities 13,737,693 - ---------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 2,018,922,724 ================ - ---------------------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ---------------------------------------------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 54,633 - ---------------------------------------------------------------------------------------------------------------------- Additional paid-in capital 2,126,705,195 - ---------------------------------------------------------------------------------------------------------------------- Accumulated net investment income 17,399,802 - ---------------------------------------------------------------------------------------------------------------------- Accumulated net realized loss on investments and foreign currency transactions (285,201,028) - ---------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 159,964,122 ---------------- NET ASSETS $ 2,018,922,724 ================ - ---------------------------------------------------------------------------------------------------------------------- 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 $1,770,273,281 and 47,863,861 shares of beneficial interest outstanding) $ 36.99 - ---------------------------------------------------------------------------------------------------------------------- Service Shares: Net asset value, redemption price per share and offering price per share (based on net assets of $248,649,443 and 6,769,088 shares of beneficial interest outstanding) $ 36.73
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 10 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA STATEMENT OF OPERATIONS For the Year Ended December 31, 2004 - -------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME - ---------------------------------------------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $167,336) $ 30,583,919 - ---------------------------------------------------------------------------------------------------------------------- Interest 821,751 ---------------- Total investment income 31,405,670 - ---------------------------------------------------------------------------------------------------------------------- EXPENSES - ---------------------------------------------------------------------------------------------------------------------- Management fees 12,193,670 - ---------------------------------------------------------------------------------------------------------------------- Distribution and service plan fees--Service shares 459,798 - ---------------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Non-Service shares 10,276 Service shares 10,036 - ---------------------------------------------------------------------------------------------------------------------- Shareholder communications: Non-Service shares 90,788 Service shares 11,222 - ---------------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 48,830 - ---------------------------------------------------------------------------------------------------------------------- Trustees' compensation 35,958 - ---------------------------------------------------------------------------------------------------------------------- Other 79,122 ---------------- Total expenses 12,939,700 Less reduction to custodian expenses (5,579) ---------------- Net expenses 12,934,121 - ---------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 18,471,549 - ---------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - ---------------------------------------------------------------------------------------------------------------------- Net realized gain on: Investments 81,657,867 Foreign currency transactions 1,248,945 Net increase from payment by affiliate 153,724 ---------------- Net realized gain 83,060,536 - ---------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments 25,551,439 Translation of assets and liabilities denominated in foreign currencies 1,809,774 ---------------- Net change in unrealized appreciation 27,361,213 - ---------------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 128,893,298 ================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 11 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 2004 2003 - ---------------------------------------------------------------------------------------------------------------------- OPERATIONS - ---------------------------------------------------------------------------------------------------------------------- Net investment income $ 18,471,549 $ 5,758,596 - ---------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) 83,060,536 (149,446,395) - ---------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) 27,361,213 558,998,061 ---------------------------------- Net increase in net assets resulting from operations 128,893,298 415,310,262 - ---------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ---------------------------------------------------------------------------------------------------------------------- Dividends from net investment income: Non-Service shares (5,404,905) (5,643,286) Service shares (357,596) (84,026) - ---------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - ---------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from beneficial interest transactions: Non-Service shares (53,964,830) (18,705,242) Service shares 114,818,206 87,031,915 - ---------------------------------------------------------------------------------------------------------------------- NET ASSETS - ---------------------------------------------------------------------------------------------------------------------- Total increase 183,984,173 477,909,623 - ---------------------------------------------------------------------------------------------------------------------- Beginning of period 1,834,938,551 1,357,028,928 ---------------------------------- End of period (including accumulated net investment income of $17,399,802 and $5,752,602, respectively) $2,018,922,724 $ 1,834,938,551 ==================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 12 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
NON-SERVICE SHARES YEAR ENDED DECEMBER 31, 2004 2003 2002 2001 2000 - ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 34.70 $ 26.62 $ 36.58 $ 46.63 $ 49.84 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .35 1 .12 .11 .18 .27 Net realized and unrealized gain (loss) 2.05 8.07 (9.89) (5.86) .02 ----------------------------------------------------------------------------- Total from investment operations 2.40 8.19 (9.78) (5.68) .29 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.11) (.11) (.18) (.27) (.06) Distributions from net realized gain -- -- -- (4.10) (3.44) ----------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.11) (.11) (.18) (4.37) (3.50) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 36.99 $ 34.70 $ 26.62 $ 36.58 $ 46.63 ============================================================================= - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 2 6.93% 30.94% (26.86)% (12.58)% (0.23)% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 1,770,273 $ 1,715,240 $ 1,338,769 $ 1,975,345 $ 2,095,803 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 1,708,511 $ 1,468,297 $ 1,630,430 $ 2,000,314 $ 1,922,099 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 3 Net investment income 0.99% 0.39% 0.35% 0.51% 0.66% Total expenses 0.66% 4 0.67% 4 0.66% 4 0.68% 4 0.67% 4 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 44% 48% 32% 45% 38%
1. Per share amounts calculated based on the average shares outstanding during the period. 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. 13 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SERVICE SHARES YEAR ENDED DECEMBER 31, 2004 2003 2002 2001 1 - ------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 34.53 $ 26.53 $ 36.56 $ 31.66 - ------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .29 2 .08 .20 -- 3 Net realized and unrealized gain (loss) 1.99 8.02 (10.05) 4.90 ----------------------------------------------------------- Total from investment operations 2.28 8.10 (9.85) 4.90 - ------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.08) (.10) (.18) -- Distributions from net realized gain -- -- -- -- ----------------------------------------------------------- Total dividends and/or distributions to shareholders (.08) (.10) (.18) -- - ------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 36.73 $ 34.53 $ 26.53 $ 36.56 =========================================================== - ------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 4 6.62% 30.69% (27.09)% 15.51% - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 248,649 $ 119,699 $ 18,260 $ 90 - ------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 184,273 $ 48,178 $ 6,263 $ 16 - ------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 5 Net investment income 0.85% 0.14% 0.26% 0.11% Total expenses 0.91% 6 0.94% 6 0.81% 6,7 0.81% 6 - ------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 44% 48% 32% 45%
1. For the period from September 18, 2001 (inception of offering) to December 31, 2001. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Less than $0.005 per share. 4. 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. 5. Annualized for periods of less than one full year. 6. Reduction to custodian expenses less than 0.01%. 7. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 14 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Capital Appreciation 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 capital appreciation by investing in securities of well-known, established companies. 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. Both 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 due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. 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. Corporate, government and municipal debt instruments having a remaining maturity in excess of 60 days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic 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 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). - -------------------------------------------------------------------------------- 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 as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. 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. Foreign exchange rates may be valued primarily using dealer supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. 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. 15 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued 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. 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 -------------------------------------------------------------------------- $17,418,420 $-- $277,090,190 $151,853,324 1. As of December 31, 2004, the Fund had $277,090,190 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, 2004, details of the capital loss carryforwards were as follows: EXPIRING ------------------------- 2010 $ 83,313,825 2011 193,776,365 ------------ Total $277,090,190 ============ 2. During the fiscal year ended December 31, 2004, the Fund utilized $83,521,467 of capital loss carryforward to offset capital gains realized in that fiscal year. 3. During the fiscal year ended December 31, 2003, the Fund did not utilize any capital loss carryforward. 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, 2004. Net assets of the Fund were unaffected by the reclassifications. REDUCTION TO REDUCTION TO ACCUMULATED ACCUMULATED NET NET INVESTMENT REALIZED LOSS INCOME ON INVESTMENTS --------------------------------------- $1,061,848 $1,061,848 16 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA The tax character of distributions paid during the years ended December 31, 2004 and December 31, 2003 was as follows: YEAR ENDED YEAR ENDED DECEMBER 31, 2004 DECEMBER 31, 2003 -------------------------------------------------------------------------- Distributions paid from: Ordinary income $5,762,501 $5,727,312 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, 2004 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 $1,871,765,466 =============== Gross unrealized appreciation $ 290,087,257 Gross unrealized depreciation (138,233,933) --------------- Net unrealized appreciation $ 151,853,324 =============== - -------------------------------------------------------------------------------- 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. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- 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 U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 17 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
YEAR ENDED DECEMBER 31, 2004 YEAR ENDED DECEMBER 31, 2003 SHARES AMOUNT SHARES AMOUNT - --------------------------------------------------------------------------------------------------------------- NON-SERVICE SHARES Sold 5,578,990 $ 194,357,727 11,371,657 $ 330,561,752 Dividends and/or distributions reinvested 155,940 5,404,905 223,231 5,643,286 Redeemed (7,294,682) (253,727,462) (12,455,978) (354,910,280) --------------------------------------------------------------- Net decrease (1,559,752) $ (53,964,830) (861,090) $ (18,705,242) =============================================================== - --------------------------------------------------------------------------------------------------------------- SERVICE SHARES Sold 3,992,696 $ 138,774,693 2,961,561 $ 92,475,323 Dividends and/or distributions reinvested 10,365 357,596 3,339 84,026 Redeemed (700,538) (24,314,083) (186,681) (5,527,434) --------------------------------------------------------------- Net increase 3,302,523 $114,818,206 2,778,219 $ 87,031,915 ===============================================================
- -------------------------------------------------------------------------------- 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, 2004, were $926,341,824 and $809,068,289, 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 Fund 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. - -------------------------------------------------------------------------------- ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for preparing and filing the Fund's tax returns. - -------------------------------------------------------------------------------- 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, 2004, the Fund paid $20,206 to OFS for services to the Fund. Additionally, funds offered in variable annuity separate accounts are subject to minimum fees of $10,000 per class for class level assets of $10 million or more. Each class is subject to the minimum fee in the event that the per account fee does not equal or exceed the applicable minimum fee. - -------------------------------------------------------------------------------- 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 and personal service and account maintenance 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 Service shares of the Fund. The Distributor currently uses all of those fees to compensate sponsor(s) of the insurance product that offers Fund shares, for providing personal service and maintenance of accounts of their variable contract owners that hold Service shares. The impact of the service plan is to increase operating expenses of the Service shares, which results in lower performance compared to the Fund's shares that are not subject to a service fee. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations. 18 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA - -------------------------------------------------------------------------------- PAYMENTS AND WAIVERS OF EXPENSES. Following a review of its use of brokerage commissions for sales that is permitted under its investment advisory agreement, the Fund's Manager terminated that practice in July 2003. Subsequently, the Manager paid the Fund $153,724, an amount equivalent to certain of such commissions incurred in prior years. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 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, 2004, the Fund had no outstanding foreign currency contracts. - -------------------------------------------------------------------------------- 6. LITIGATION A consolidated amended complaint has been filed as putative derivative and class actions against the Manager, OFS and the Distributor (collectively, the "Oppenheimer defendants"), as well as 51 of the Oppenheimer funds (as "Nominal Defendants") excluding the Fund, 31 present and former Directors or Trustees and 9 present and former officers of the funds. This complaint, filed in the U.S. District Court for the Southern District of New York on January 10, 2005, consolidates into a single action and amends six individual previously-filed putative derivative and class action complaints. Like those prior complaints, the complaint alleges that the Manager charged excessive fees for distribution and other costs, improperly used assets of the funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the funds, and failed to properly disclose the use of assets of the funds to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those prior complaints, the complaint further alleges that by permitting and/or participating in those actions, the Directors/Trustees and the Officers breached their fiduciary duties to shareholders of the funds under the Investment Company Act of 1940 and at common law. The complaint seeks unspecified compensatory and punitive damages, rescission of the funds' investment advisory agreements, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. The Oppenheimer defendants believe that the allegations contained in the Complaints are without merit and that they, the funds named as Nominal Defendants, and the Directors/Trustees of those funds have meritorious defenses against the claims asserted. The Oppenheimer defendants intend to defend these lawsuits vigorously and to contest any claimed liability, and they have retained legal counsel to defend such suits. The Oppenheimer defendants believe that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. 19 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER CAPITAL APPRECIATION FUND/VA: We have audited the accompanying statement of assets and liabilities of Oppenheimer Capital Appreciation Fund/VA, a series of Oppenheimer Variable Account Funds, including the statement of investments, as of December 31, 2004, 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 presented. 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 the standards of the Public Company Accounting Oversight Board (United States). 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, 2004, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. Additionally, an audit 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 Capital Appreciation Fund/VA as of December 31, 2004, 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 presented, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Denver, Colorado February 11, 2005 20 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2005, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2004. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends of $0.1095 and $0.0792 per share were paid to Non-service and Service shareholders, respectively, on March 15, 2004, 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, 2004 which are not designated as capital gain distributions should be multiplied by 100% 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; UPDATES TO STATEMENTS OF INVESTMENTS 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 1.800.525.7048, (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 is 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 Fund's Form N-PX filing is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 21 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA TRUSTEES AND OFFICERS Unaudited - --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------- NAME, POSITION(S) HELD PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD BY WITH FUND, LENGTH OF TRUSTEE; NUMBER OF PORTFOLIOS IN FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEE SERVICE, AGE 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 Chairman of the Board Company (since 1991), Centennial State Mortgage Company (since 1994), The El Paso of Trustees (since 2003) Mortgage Company (since 1993), Transland Financial Services, Inc. (since 1997); and Trustee (since 1999) Chairman of the following private companies: Great Frontier Insurance (insurance Age: 67 agency) (since 1995), Ambassador Media 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 Trustee (since 1993) private equity funds) (until February 2001); Chairman, President and Chief Executive Age: 73 Officer of A.G. 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 Assistant Secretary and a director (December 1991-April 1999) of Centennial Trustee (since 1999) Asset Management Corporation; President, Treasurer and a director (June 1989-April Age: 68 1999) of Centennial Capital Corporation; Chief Executive Officer and a director of MultiSource Services, Inc. (March 1996-April 1999). Until April 1999 Mr. Bowen held several positions in subsidiary or affiliated companies of the Manager. Oversees 39 portfolios in the OppenheimerFunds complex. EDWARD L. CAMERON, A member of The Life Guard of Mount Vernon, George Washington's home (since June Trustee (since 1999) 2000). Formerly Director (March 2001-May 2002) of Genetic ID, Inc. and its Age: 66 subsidiaries (a privately held biotech company); a partner (July 1974-June 1999) with PricewaterhouseCoopers LLP (an accounting firm); and Chairman (July 1994-June 1998) of Price Waterhouse LLP Global Investment Management Industry Services Group. Oversees 38 portfolios in the OppenheimerFunds complex. JON S. FOSSEL, Director (since February 1998) of Rocky Mountain Elk Foundation (a not-for-profit Trustee (since 1990) foundation); a director (since 1997) of Putnam Lovell Finance (finance company); a Age: 63 director (since June 2002) of UNUMProvident (an insurance company). Formerly a director (October 1999-October 2003) of P.R. Pharmaceuticals (a privately held company); 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 (until October 1995) of Oppenheimer Acquisition Corp., Shareholders Services Inc. and Shareholder Financial Services, Inc. Oversees 38 portfolios in the OppenheimerFunds complex. SAM FREEDMAN, Director of Colorado Uplift (a non-profit charity) (since September 1984). Formerly Trustee (since 1996) (until October 1994) Mr. Freedman held several positions in subsidiary or affiliated Age: 64 companies of the Manager. Oversees 38 portfolios in the OppenheimerFunds complex.
22 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA - --------------------------------------------------------------------------------------------------------------------- BEVERLY L. HAMILTON, Trustee of Monterey International Studies (an educational organization) (since Trustee (since 2002) February 2000); a director of The California Endowment (a philanthropic organization) Age: 58 (since April 2002) and of Community Hospital of Monterey Peninsula (educational organization) (since February 2002); a director of America Funds Emerging Markets Growth Fund (since October 1991) (an investment company); an advisor to Credit Suisse First Boston's Sprout venture capital unit. Mrs. Hamilton also is a member of the investment committees of the Rockefeller Foundation and of the University of Michigan. Formerly, Trustee of MassMutual Institutional Funds (open-end investment company) (1996-May 2004); a director of MML Series Investment Fund (April 1989-May 2004) and MML Services (April 1987-May 2004) (investment companies); member of the investment committee (2000- 2003) of Hartford Hospital; an advisor (2000-2003) to Unilever (Holland)'s pension fund; and President (February 1991-April 2000) of ARCO Investment Management Company. Oversees 37 portfolios in the OppenheimerFunds complex. ROBERT J. MALONE, Chairman, Chief Executive Officer and Director of Steele Street State Bank (a Trustee (since 2002) commercial banking entity) (since August 2003); director of Colorado UpLIFT (a Age: 60 non-profit organization) (since 1986); trustee (since 2000) of the Gallagher Family Foundation (non-profit organization). Formerly, Chairman of U.S. Bank-Colorado (a subsidiary of U.S. Bancorp and formerly Colorado National Bank,) (July 1996-April 1, 1999), a director of: Commercial Assets, Inc. (a REIT) (1993-2000), Jones Knowledge, Inc. (a privately held company) (2001-July 2004) and U.S. Exploration, Inc. (oil and gas exploration) (1997-February 2004). Oversees 37 portfolios in the OppenheimerFunds complex. F. WILLIAM MARSHALL, JR., Trustee of MassMutual Institutional Funds (since 1996) and MML Series Investment Fund Trustee (since 2000) (since 1987) (both open-end investment companies) and the Springfield Library and Age: 62 Museum Association (since 1995) (museums) and the Community Music School of Springfield (music school) (since 1996); Trustee (since 1987), Chairman of the Board (since 2003) and Chairman of the investment committee (since 1994) for the Worcester Polytech Institute (private university); and President and Treasurer (since January 1999) of the SIS Fund (a private not for profit charitable fund). 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) (commercial bank); and Executive Vice President (January 1999-July 1999) of Peoples Heritage Financial Group, Inc. (commercial bank). Oversees 38 portfolios in the OppenheimerFunds complex. - -------------------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER, 225 AND OFFICER LIBERTY STREET, 11TH FLOOR, 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 President and Trustee September 2000) of the Manager; President and a director or trustee of other (since 2001) Oppenheimer funds; President and a director (since July 2001) of Oppenheimer Age: 55 Acquisition Corp. (the Manager's parent holding company) and of Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the Manager); a director (since November 2001) of OppenheimerFunds Distributor, Inc. (a subsidiary of the Manager); Chairman and a director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager); 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 the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (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.; 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 the shares of Babson Capital Management LLC); a member of the Investment Company Institute's Board of Governors (elected to serve from October 3, 2003 through September 30, 2006). 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 62 portfolios as Trustee/Director and 21 additional portfolios as Officer in the OppenheimerFunds complex.
23 | OPPENHEIMER CAPITAL APPRECIATION FUND/VA TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MS. PUTNAM AND MR. ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY 10281-1008, FOR MESSRS. VANDEHEY AND 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. JANE PUTNAM, Vice President of the Manager since October 1995; an officer of 2 portfolios in the Vice President and OppenheimerFunds complex. Portfolio Manager (since 1994) Age: 44 BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer of Treasurer (since 1999) HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Age: 45 Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership Holdings, Inc. (since March 1999), of OFI Private Investments, Inc. (since March 2000), of OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May 2000), of OFI Institutional Asset Management, Inc. (since November 2000), and of OppenheimerFunds Legacy Program (a Colorado non-profit corporation) (since June 2003); 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. Formerly Assistant Treasurer of Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer (March 1995-March 1999) at Bankers Trust Company-Mutual Fund Services Division. An officer of 83 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since February Vice President and 2002) of the Manager; General Counsel and a director (since November 2001) of the Secretary (since 2001) Distributor; General Counsel (since November 2001) of Centennial Asset Management Age: 56 Corporation; Senior Vice President and General Counsel (since November 2001) of HarbourView Asset Management Corporation; Secretary and General Counsel (since November 2001) of Oppenheimer Acquisition Corp.; Assistant Secretary and a director (since October 1997) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and a director (since November 2001) of Oppenheimer Partnership Holdings, Inc.; a director (since November 2001) of Oppenheimer Real Asset Management, Inc.; Senior Vice President, General Counsel and a director (since November 2001) of Shareholder Financial Services, Inc., Shareholder Services, Inc., OFI Private Investments, Inc. and OFI Trust Company; Vice President (since November 2001) of OppenheimerFunds Legacy Program; Senior Vice President and General Counsel (since November 2001) of OFI Institutional Asset Management, Inc.; a director (since June 2003) of OppenheimerFunds (Asia) Limited. Formerly Senior Vice President (May 1985-December 2003), 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); and OppenheimerFunds International Ltd. (October 1997-November 2001). An officer of 83 portfolios in the OppenheimerFunds complex. MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer (since March 2004) of the Manager; Vice President and Vice President (since June 1983) of OppenheimerFunds Distributor, Inc., Centennial Chief Compliance Officer Asset Management Corporation and Shareholder Services, Inc. Formerly (until February (since 2004) 2004) Vice President and Director of Internal Audit of OppenheimerFunds, Inc. An Age: 54 officer of 83 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, BY CALLING 1.800.981.2871. 24| OPPENHEIMER CAPITAL APPRECIATION 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 registrant 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 $22,000 in fiscal 2004 and $21,000 in fiscal 2003. (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 no such fees in fiscal 2004 and $35,859 in fiscal 2003 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 include: internal control reviews. (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 no such fees in fiscal 2004 and $5,548 in fiscal 2003 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 include: 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 no such fees during the last two fiscal years 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. (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. Under applicable laws, pre-approval of non-audit services maybe 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 no such fees in fiscal 2004 and $41,407 in fiscal 2003 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. SCHEDULE OF INVESTMENTS Not applicable ITEM 7. NOT APPLICABLE ITEM 8. NOT APPLICABLE ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The registrant's Board of Trustees has established a Governance Committee, one function of which is to create and oversee the process by which shareholders can submit nominees for positions on the Board. The Governance Committee has not yet adopted a charter, but anticipates that it will do so by the end of this calendar year. The Committee has temporarily adopted the process previously adopted by the Audit Committee regarding shareholder submission of nominees for board positions. Shareholders may submit names of individuals, accompanied by complete and properly supported resumes, for the Governance Committee's consideration by mailing such information to the Committee in care of the Fund. The Committee may consider such persons at such time as it meets to consider possible nominees. The Committee, however, reserves solo discretion to determine the candidates for trustees and independent trustees to recommend to the Board and/or shareholders and may identify candidates other than those submitted by Shareholders. The Committee may, but need not, consider the advice and recommendation of the Manager and its affiliates in selecting nominees. The full Board elects new trustees except for those instances when a shareholder vote is required. Shareholders who desire to communicate with the Board should address correspondence to the Board of Trustees of the registrant, or to an individual Trustee c/o the Secretary of the Fund at 6803 South Tucson Way, Centennial, Colorado 80112 and may submit their correspondence electronically at WWW.OPPENHEIMERFUNDS.COM under the caption "contact us." If your correspondence is intended for a particular Trustee, please indicate the name of the Trustee for whom it is intended. The sender should indicate in the address whether it is intended for the entire board, the Independent Trustees as group, or to an individual Trustee. The Governance Committee will consider if a different process should be recommended to the Board. ITEM 10. CONTROLS AND PROCEDURES (a) Based on their evaluation of registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of December 31, 2004, 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 changes in registrant's internal controls over financial reporting that occurred during the registrant's last fiscal quarter 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)(NOT APPLICABLE TO SEMIANNUAL REPORTS) (B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS) EX-99.CODE ETH 2 ra610_12025ex99codeeth.txt RA610_12025EX99CODEETH.TXT 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 communications 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. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. - -------- 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. 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 whether 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 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 - ---------- 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. 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 3 ra610_12025ex-99cert.txt RA610_12025EX-99CERT.TXT 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 Capital Appreciation 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-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) 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 d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting 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: 2/8/05 /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 Capital Appreciation 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-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) 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 d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting 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: 2/8/05 /s/ Brian W. Wixted ---------------------------- Brian W. Wixted Chief Financial Officer EX-99.906 4 ra610_12025ex906cert.txt RA610_12025EX906CERT.TXT 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 2002 JOHN V. MURPHY, Chief Executive Officer, and BRIAN W. WIXTED, Chief Financial Officer, of Oppenheimer Capital Appreciation 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, 2004 (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 Capital Appreciation Oppenheimer Capital Appreciation Fund/VA Fund/VA /s/ John V. Murphy /s/ Brian W. Wixted - ---------------------------- ---------------------------- John V. Murphy Brian W. Wixted Date: 2/8/05 Date: 2/8/05 -----END PRIVACY-ENHANCED MESSAGE-----