-----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, SjxXsRp/lGBFWb+EuFkgUXJy6kAql5Y12JTucxmQ4LqbjRjnDoqcBryrmNwejA2s cm2pxN5vuz39Z4/Mqi/bhQ== 0001047469-98-008495.txt : 19980305 0001047469-98-008495.hdr.sgml : 19980305 ACCESSION NUMBER: 0001047469-98-008495 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980304 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER VARIABLE ACCOUNT FUNDS CENTRAL INDEX KEY: 0000752737 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 840974272 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-04108 FILM NUMBER: 98556897 BUSINESS ADDRESS: STREET 1: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 2: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER VARIABLE LIFE FUNDS DATE OF NAME CHANGE: 19860609 N-30D 1 N-30D OPPENHEIMER VARIABLE ACCOUNT FUNDS ANNUAL REPORT DECEMBER 31, 1997 [LOGO] OPPENHEIMER MONEY FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER MONEY FUND, a series of Oppenheimer Variable Account Funds, primarily seeks maximum current income in "money market" securities that offer individual investors low capital risk and the maintenance of liquidity. These securities include short-term U.S. Government securities, certificates of deposit (CDS), bankers' acceptances and commercial paper. NARRATIVE BY DOROTHY WARMACK, FUND MANAGER Compared to the volatility in world stock markets during the past few months, short-term interest rates have remained relatively calm. As is often the case, U.S. money market instruments became a safe haven in times of stress. In addition to safety and liquidity, money market fund investors also enjoyed high yields during the year ended December 31, 1997. One reason: the Federal Reserve Board raised short-term interest rates by 0.25 percentage points in late March of 1997. This new interest rate was in place for most of the period covered by this report. For the year ended December 31, 1997, Oppenheimer Money Fund, a series of Oppenheimer Variable Account Funds, provided a compounded annual yield of 5.32%. Without compounding, the corresponding yield was 5.19%. The seven-day annualized yields with and without compounding on December 31, 1997 were 5.38% and 5.24%, respectively.(1) It's important to remember that an investment in the Fund is neither insured nor guaranteed by the U.S. government, and there is no assurance that the Fund will maintain a stable $1.00 share price in the future. Typically, long-term and short-term interest rates move in the same direction. During the past few months, long-term rates have fallen sharply. That's because investors worldwide increasingly invested in U.S. Treasury bonds of all maturities when they liquidated their Asia equity positions. Generally, when the demand for bonds rises, bond prices increase, and issuers can pay lower yields to attract the same number of investors. However, while long-term interest rates have been falling, U.S. money market yields have actually been rising in recent weeks. The main reason is that Japan, the world's second largest issuer of short-term debt, continues to have financial difficulties. Because investors perceive a lowered credit quality there, issuers have been required to pay higher interest rates to compensate for the additional risk. To compete, American issuers in both the government and corporate sectors have been forced to also raise their short-term rates. With this backdrop of heightened credit concerns, our strategy remains constant: to invest in securities that present minimal credit risk. Today, U.S. blue chip corporations offer a wide selection of commercial paper and other money market instruments that currently are paying attractive yields. All things considered, the U.S. economy is the envy of the world. Inflation is virtually non-existent, long-term interest rates have fallen below 6%, the federal budget is nearly balanced, unemployment is under 5% and economic growth continues to be strong. True, Asia's devalued currencies and uncertain business environment will slow our economy somewhat, because our exports to the Far East will be curtailed. However, our economy was beginning to overheat in 1997 and had the events in Asia not taken place, the Federal Reserve Board might have intervened by raising short-term interest rates to slow down the economy. As we have seen, world events can have a dramatic impact on interest rates as well as the investment markets. However, we don't try to predict the future course of interest rates and use those predictions to set our investment strategy. Instead, we "ladder" the portfolio with some securities maturing in a few days, some maturing in a month, some maturing in two months and so on. With a relatively broad maturity spectrum, the portfolio is widely diversified and able to take advantage of a variety of market conditions. Money market yields are often compared with the rate of inflation to determine a "real" rate of return. The real rate of return equals the stated money market yield minus the rate of inflation. At the same time, money market funds provide a strong combination of liquidity and safety of principal during times of volatility in other markets. We appreciate your confidence in Oppenheimer Variable Account Funds - Oppenheimer Money Fund. We look forward to helping you reach your financial goals in the future. - ---------------------------- 1. Compounded yields assume reinvestment of dividends. Past performance does not guarantee future results. OPPENHEIMER HIGH INCOME FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER HIGH INCOME FUND, a series of Oppenheimer Variable Account Funds, seeks a high level of current income. The Fund invests in high-yielding, lower-rated and unrated fixed-income securities.(1) NARRATIVE BY DAVID NEGRI, FUND MANAGER (2) After a slow start, Oppenheimer High Income Fund performed relatively well during 1997. For the one year period ended December 31, 1997, the Fund provided an average annual total return of 12.21%.(3) These results reflect changes in share price, plus reinvested income distributions, but are calculated before insurance product charges are considered. High-yield bonds had a good year in 1997. As yields on U.S. government securities and investment-grade corporate bonds declined, investors began to look to the high-yield bond market for incrementally higher yields. Greater demand caused prices to rise, and existing high-yield bondholders benefited from capital appreciation, which contributed to high total rates of return. This trend continued until late in the year, when the market declines in Asia shifted demand to high-quality credits such as U.S. Treasury securities. This "flight to quality" caused U.S. Treasury securities to outperform other types of bonds, including high-yield bonds, in the fourth quarter of 1997. With the exception of our foreign bond position, which declined, we maintained a steady allocation among bond market sectors during the year. We also invested about 4% of the portfolio in preferred stocks.(4) Our positions in corporate bonds were primarily in telecommunications companies, including wireless communications. We also held bonds from companies in the cable television and financial services industries. All three industries are in the midst of deregulation, which we believe will be good for their businesses. At the start of the year, our foreign bond positions were primarily in emerging markets, including Latin America, Eastern Europe and Asia. As the U.S. dollar gained strength, we cut back our exposure to Asia and Eastern Europe. After the crisis in Asia developed and markets there plunged, we found very attractive opportunities in Latin America. Bond markets in Latin America declined in the wake of Asia's fall, despite the fact that the two regions do not share the same problems. However, we expect Latin America's economic growth rates to be very good next year. That's because Brazil has announced aggressive steps to protect its currency and its financial system, and Mexico should be a beneficiary of the strong U.S. economy. Inflation in these countries is down to levels we haven't seen in many decades, and they've increased the strength of their financial sector substantially. While we're not excited about Asia just yet - we think it's still too early - we think Latin America will do well in 1998. We are also optimistic about prospects for the U.S. high-yield bond market during 1998. Most important, we believe economic conditions should remain favorable. We expect growth to slow from current levels, largely in response to declining demand for U.S. products overseas. We believe the rate of inflation should remain at its current low levels. We expect these factors and others to cause long-term interest rates to decline modestly from current levels, and investors should continue to seek higher yields in the high-yield marketplace. We plan to continue to allocate assets among those sectors of the high-yield and foreign bond markets that we believe should provide the best yields relative to risk. We believe this strategy should enable the Fund to provide a high level of income and the opportunity for attractive total returns for its shareholders. We appreciate your confidence in Oppenheimer Variable Account Funds - Oppenheimer High Income Fund. We look forward to helping you reach your financial goals in the future. - ---------------------------- 1. The Fund invests in below-investment-grade securities, which may entail greater credit risks, as described in the prospectus. 2. Effective January 1, 1998 the Fund's portfolio manager is Tom Reedy. 3. Includes changes in net asset value per share without deducting insurance product charges. Such performance would have been lower if these charges were taken into account. 4. The Fund's portfolio is subject to change. OPPENHEIMER BOND FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER BOND FUND, a series of Oppenheimer Variable Account Funds, primarily seeks a high level of current income from investing in high-yield fixed-income securities. Secondarily, the Fund seeks capital growth when this is consistent with its primary objective of high current income. NARRATIVE BY DAVID NEGRI, FUND MANAGER After a slow start, Oppenheimer Bond Fund performed relatively well during 1997. For the one year period ended December 31, 1997, the Fund provided an average annual total return of 9.25%.(1) These results reflect changes in share price, plus reinvested income distributions, but are calculated before insurance product charges are considered. As it became apparent toward mid-year that inflation would remain low, our view of the interest rate environment became more positive. As a result, we increased the Fund's AVERAGE DURATION, a measure of the portfolio's sensitivity to changes in interest rates. By increasing the average duration from about 5.0 years early in the year to a high of 5.8 years, we created a portfolio that was more sensitive to DECLINING interest rates, which helped produce commensurately higher rates of capital appreciation.(2) Our allocation of assets among the various types of bonds did not change significantly during the year, however. We kept about 65% of the Fund's assets in U.S. government securities, including U.S. Treasuries and mortgage-backed securities issued by federal agencies. Another 30% of the portfolio was invested in investment-grade corporate bonds, primarily in the cable television, media and commercial banking industries. These industries are in the midst of deregulation, which we believe will be good for their businesses. On the other hand, we've de-emphasized companies in the metals, paper and retail industries because, at this late stage of the economic cycle, we don't want exposure to companies that are too sensitive to changes in the economy. About 15% of our corporate bond position was allocated to commercial private mortgage securities, which represent pools of mortgages on hotels, shopping malls, apartment buildings and other enterprises. During the past 12 months, commercial mortgage bonds offered attractively high yields compared to other bonds, as well as the relative safety of secured underlying assets. The other 2% of the portfolio was invested in bonds issued by governments and corporations overseas. While the Fund had virtually no exposure to Southeast Asia, we did, and still do, have some positions in bonds issued in Australia. The bond markets there have performed exceedingly well, but the ripple effect from the Asian crisis caused a devaluation of their currencies relative to the U.S. dollar, which offset the returns from the bond market rallies in those countries for U.S. investors. As for the future, we are optimistic about prospects for the U.S. bond market during 1998. We expect economic growth to slow from current levels, in large part in response to declining demand for U.S. products overseas. We believe the rate of inflation should remain at its current low levels as growth moderates. The federal government's progress toward a balanced budget should contribute to less issuance of U.S. Treasury securities. Yet demand for these bonds should remain high as overseas investors seek the safety of bonds issued by the most creditworthy government in the world. We expect these factors and others to cause long-term interest rates to decline modestly from current levels. We intend to maintain the Fund's current strategic orientation. We expect to keep the portfolio's average duration relatively long to hold higher yielding securities for as long as possible while interest rates fall. What's more, we plan to continue to allocate assets among those sectors of the bond market that we believe should provide the best yields relative to risk. We believe this strategy should enable the Fund to provide a competitive level of income and the opportunity for attractive total returns for its shareholders. We appreciate your confidence in Oppenheimer Variable Account Funds - Oppenheimer Bond Fund. We look forward to helping you reach your financial goals in the future. - ---------------------------- 1. Includes changes in net asset value per share without deducting insurance product charges. Such performance would have been lower if these charges were taken into account. 2. The Fund's portfolio is subject to change. OPPENHEIMER CAPITAL APPRECIATION FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER CAPITAL APPRECIATION FUND, a series of Oppenheimer Variable Account Funds, primarily seeks capital appreciation through investments in the common stocks of "growth-type" companies. In addition, the Fund may selectively invest in "special situations" that management believes may provide opportunities for growth. NARRATIVE BY PAUL LAROCCO, FUND MANAGER Oppenheimer Capital Appreciation Fund, a series of Oppenheimer Variable Account Funds, provided an average annual total return, without considering insurance product charges, of 11.67% for the one-year period ended December 31, 1997.(1) Back in April of 1997, we felt the fundamentals of the Fund's portfolio were very strong - even though some of the holdings had low values in the market. We believed these relatively low valuations represented a great buying opportunity, and we used some of the Fund's cash to add to our positions. Over June, July and August, many of these holdings increased in value, and resulted in a positive performance swing for the Fund. The fundamentals of these companies remained strong, and their valuations continued to improve. In this Fund, we continue to aggressively pursue stocks in industries which represent emerging growth, new technologies, and innovative products and services. These are exciting areas in which to invest because many large open-ended opportunities exist to invest in a company that's small today - but, due to its potential for rapid growth, may become a much larger company in the next several years. In particular, information technology service companies represent an interesting area for us. Due to the increasing complexity of technology, many corporations rely on outside consulting resources to help them understand what their needs are and how to address their information technology challenges. We're also investing in companies that provide software and services for the healthcare industry, an area which represents a huge untapped opportunity. Historically, hospitals and doctors have spent a much lower percentage of their revenues on software and hardware than other businesses. Now, they need to implement new information technologies to automate their business processes (much of which are still hand-written) and provide the best quality care at the lowest cost. This includes everything from scheduling doctors and ordering supplies to interfacing between labs and handling billing and managed care. Another positive contributor to the Fund has been energy and oil service companies. Today there's more demand for oil exploration equipment and technology than in recent years because the cost of finding oil has gone down so much - and the success rate has risen. As a result, drilling has become more economically attractive, even with the relatively low price of oil. On the other hand, the Fund has shifted away from some technology companies that manufacture semiconductor and telecommunications equipment, due to their exposure to the turmoil in Asia. The products and fundamentals of these companies appear fine, but we believe that demand will weaken in the uncertain economies of the Asia/ Pacific region, which will result in a significant hit to earnings for several quarters. However, because this Fund has a small/mid-cap focus, it is much more domestically oriented than many of its peers. And, as a result, the Fund is less exposed to overseas market fluctuations than are funds invested in larger multinational companies. In 1998, we believe investors will be looking for earnings growth as the U.S. economy slows. If the earnings of multinational companies are disappointing, investors may leave those stocks and choose to invest in the companies where earnings are growing strong - which we believe include small and mid-cap stocks. With that thought in mind, we're very optimistic for the Fund over the coming year. We appreciate your confidence in Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund. We look forward to helping you reach your financial goals in the future. - ---------------------------- 1. Includes changes in net asset value per share without deducting insurance product charges. Such performance would have been lower if these charges were taken into account. OPPENHEIMER GROWTH FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER GROWTH FUND, a series of Oppenheimer Variable Account Funds, seeks capital appreciation from investments in securities of well-known and established companies. The Fund's present focus is in securities of mid-or large-cap companies with a history of earnings and dividend growth. NARRATIVE BY JANE PUTNAM, FUND MANAGER Oppenheimer Growth Fund exhibited strong performance over the past year. The Fund's average annual total return, without considering insurance product charges, for the one-year period ended December 31, 1997 was 26.68%.1 This strong performance is particularly impressive in light of the Fund's significant cash holdings - holdings that should be understood in context of our investment strategy and style. We make investment choices, both what to buy and what to sell, on a stock-by-stock basis - a "bottom-up" approach. And while we focus on stocks with good prospects for growth, we are price-sensitive, following a "growth at a good price" strategy. In a market like the one we experienced in 1997, our approach typically leads us to sell more stocks than we buy. When a number of stocks we held reached our target price levels, we sold them. We have identified many stocks that we'd like to purchase based on their fundamentals, however, we often thought they were simply too expensive. And, while growth prospects were certainly there, we could not buy growth "at a good price," and as a result, we developed a cash cushion. That cash cushion proved valuable during the market volatility we experienced in October and November. Cash on hand both helped dampen the effect of market swings on the Fund and provided the liquidity to take advantage of the attractive buying opportunities that were created when stock prices temporarily dropped. While we select stocks based on their individual merit, many of the stocks we held were in industry sectors which outperformed the overall market. The Fund held large positions in the financial, consumer cyclical and energy sectors, all of which showed solid growth. Within those industries we emphasized investments in market segments that reported solid returns: in the financial industry, brokers and consumer finance companies; in the consumer cyclical sector, selected department, drug and grocery stores; and in the energy sector, oil service companies and drillers.2 In the financial sector we trimmed our bank holdings during the year, choosing instead to invest in asset managers, insurance companies, consumer lenders and other specialized financial service firms, like the Travelers, a top holding of the Fund. As the world's population grows older, we believe increased savings for retirement will become a more important theme, not just in the United States, but throughout Europe and selected other countries as well. We also believe that as the asset management industry consolidates, the stronger firms will become even stronger. A firm with the Travelers' strengths - exceptional management, broad product line, global presence, strong financial track record and proven acquisition expertise - is well positioned to grow and to dominate its market globally. CVS, a major consumer cyclical holding of the Fund, is another firm that has shown the ability to take advantage of extensive industry consolidation. CVS has been resourceful in laying out the front of its stores: the area filled with high-margin impulse purchases, such as batteries and suntan lotion, that shoppers walk through on the way to the prescription counter in the back. CVS recently acquired Revco, a similar firm, but one that's much less successful in front-end, high margin sales. By bringing its management ability and layout strategy to bear, CVS should be able to create their typical much higher per store returns in the stores acquired from Revco. On the other hand, performance in certain sectors lagged. Technology, in which we are traditionally an aggressive investor, had mixed results. While some subsectors, such as software and selected PC manufacturers, were strong, other areas in which we hold positions, such as disk drive and semiconductor manufacturers, held down performance. We have reduced overall exposure to technology stocks, targeting those companies that we believe are most vulnerable should a slowdown in overall technology spending occur. Instead, we are focusing on more familiar domestic names that have a high visibility and possess more stable earnings histories. Going forward, we plan to remain focused on our fundamental approach of seeking growth at the right price. We hope to reduce our cash level by identifying companies with solid operating and financial fundamentals and by purchasing their shares at what we believe are reasonable price levels. In 1998, unsettled conditions in certain sectors of the global economy may well dampen growth and could reduce corporate profits. In such an environment, we believe that our disciplined approach and emphasis on individual stock selection should serve investors well. We appreciate your confidence in Oppenheimer Variable Account Funds - Oppenheimer Growth Fund. We look forward to helping you reach your financial goals in the future. - ---------------------------- 1. Includes changes in net asset value per share without deducting insurance product charges. Such performance would have been lower if these charges were taken into account. 2. The Fund's portfolio is subject to change. OPPENHEIMER MULTIPLE STRATEGIES FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER MULTIPLE STRATEGIES FUND, a series of Oppenheimer Variable Account Funds, seeks total return from investments in common stocks and other equity securities, bonds and other debt securities, and "money market" securities. Total return includes current income as well as capital appreciation. The current allocation of the Fund's portfolio aims to take advantage of current economic conditions, while seeking to manage risk. NARRATIVE BY RICHARD RUBINSTEIN, FUND MANAGER Oppenheimer Multiple Strategies Fund performed relatively well during 1997. For the one year period ended December 31, 1997, the Fund provided an average annual total return of 17.22%, without considering insurance product charges.(1) Our approach to managing the Fund is to attempt to produce above-average returns while seeking to manage risk, regardless of the prevailing economic and market environments. We strive to control risk through broad diversification, which enables shareholders to participate in many different markets and types of investments simultaneously. By maintaining exposure to many different areas of the financial markets, shareholders are more likely to participate in attractive investments at any given time. During 1997, several different types of investments performed well. The Fund's exposure to the stock market ranged between 48% and 54% of assets during the year, enabling shareholders to participate in the stock market's exceptional performance. The balance of between 46% and 52% of the Fund was invested in bonds. In addition to contributing to returns as interest rates declined, our bond market exposure helped cushion shareholders from the negative effects of the stock market's sharp sell-offs, including a drop of more than 10% in the spring and the one-day decline of about 8% in late October.(2) We also emphasize broad diversification within each asset class. Our bond portfolio consists of a mix of U.S. Treasury securities, high-yield corporate bonds and foreign bonds from a combination of developed and emerging countries. We increased our holdings of U.S. Treasury securities over the year. We commensurately reduced our positions in corporate and foreign bonds as the differences in yields between these bond sectors and U.S. Treasury securities narrowed. The Fund's stock portfolio is diversified, not just among companies and industries, but also among investment styles, including the growth, value, contrarian, high-yield and international areas. Some of our largest international holdings included banks in Switzerland, Italy, France, and Germany. We expect these companies to benefit from improved efficiency, lower costs, higher revenues and greater profitability. In the high-yield area, we increased our position in electric utilities because of their attractive dividend yields. In the contrarian area, we found opportunities in companies with good businesses that have encountered short-term or intermediate-term problems. If those problems are resolved, we expect their stock prices to rise. Looking toward the future, we are cautiously optimistic. We are optimistic because of the state of the U.S. economy as well as most regions overseas. In the U.S., moderate rates of growth and low inflation should continue to support the revenues of domestic companies. European companies are in the early stages of the process of corporate restructuring that helped U.S. companies become more efficient over the past decade. Latin America also has learned some difficult lessons and appears to be on track toward more economic growth. On the other hand, we are cautious because of our longstanding experience that markets do not rise or fall in a straight line. The markets' volatility in 1997 may be a signal that further turbulence is ahead. And the persistent problems in Japan and Southeast Asia could constrain growth in the economies of the rest of the world. With stock valuations at historical highs, and bond yields at recent lows, we are concerned that any unexpected disappointments could trigger a market decline. Our multiple-strategies approach should enable us to participate in rising markets, while broad diversification provides protection against unexpected market declines. We regard the Fund as a "portfolio for all seasons." Whatever the future brings, we believe that the Fund is well positioned to confront the challenges and take advantage of the opportunities. We appreciate your confidence in Oppenheimer Variable Account Funds - Oppenheimer Multiple Strategies Fund. We look forward to helping you reach your financial goals in the future. - ---------------------------- 1. Includes changes in net asset value per share without deducting insurance product charges. Such performance would have been lower if these charges were taken into account. 2. The Fund's portfolio is subject to change. OPPENHEIMER GLOBAL SECURITIES FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER GLOBAL SECURITIES FUND, a series of Oppenheimer Variable Account Funds, seeks long term capital appreciation from growth companies worldwide. NARRATIVE BY BILL WILBY, FUND MANAGER Oppenheimer Global Securities Fund performed well during 1997. For the one-year period ended December 31, 1997, the Fund provided an average annual total return of 22.42%.1 These results reflect changes in share price, plus reinvested distributions, but are calculated before insurance product charges are considered. We also performed well relative to our peers, ranking 4 of 199 among global sub-accounts, as measured by Lipper Analytical Services for the one-year period ended December 31, 1997.2 While the performance of the international markets was mixed in 1997, our investment approach, which emphasizes individual opportunities rather than specific international regions, worked quite well. Our approached helped us avoid the trouble spots in the global equity markets and participate where prospects were brightest. With that said, we believe it is important to understand the environment in which we operated. That's because 1997 was an extraordinarily difficult year for some of the world's stock markets and a strong year for others. For example, European markets provided attractive returns, the result of increased investor confidence in an economic recovery. Another major theme driving Europe's markets has been the corporate restructuring taking place as companies prepare for the anticipated debut of the European Monetary Union on January 1, 1999. In contrast, the Asian markets did very poorly. In Japan, a prolonged economic recession kept stock prices depressed, and the emerging markets of Southeast Asia declined sharply between July and October. Because we held only a few minor positions in markets such as Indonesia and Thailand, the Fund avoided the brunt of the Asian sell-off. Instead, we focused primarily on Europe, where we found several attractive investments, primarily in the financial services industry. For example, our European holdings include French banks engaged in aggressive cost-cutting programs, a reorientation towards shareholder value and a strong earnings recovery. In addition, we held a large position in Cap Gemini, one Europe's largest software companies, which performed very well over the past year.3 In contrast, we reduced our positions in U.S. financial services companies, including some of the large banks. We believe that consumer credit problems may intensify, which could affect lenders' earnings. On the other hand, we have maintained positions in U.S. technology leaders, such as IBM, which is in the midst of a change from a mainframe manufacturer to a technology services company. As IBM completes this shift, we believe the market may reward them with a higher stock price. The global oil services industry contributed significantly to the Fund's performance in 1997. Holdings such as Global Marine and TransOcean Offshore have high quality fleets of semi-submersible oil rigs, and these companies have benefitted from increased exploration for oil. Looking forward, we have adopted a more defensive posture. Whatever the future brings, however, we remain confident that our disciplined investment approach can help our shareholders participate in the global financial markets. We appreciate your confidence in Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund. We look forward to helping you reach your financial goals in the future. - ---------------------------- 1. Includes changes in net asset value per share without deducting insurance product charges. Such performance would have been lower if these charges were taken into account. 2. Source: LIPPER ANALYTICAL SERVICES, INC., 12/31/97. Based on the comparisons between changes in net asset value without considering insurance product charges, with dividends and capital gains distributions reinvested. The Fund was ranked 4 of 199 (1-year) and 3 of 60 (5-year) among global sub-accounts for the period ended 12/31/97. Past performance does not guarantee future results. 3. The Fund's portfolio is subject to change. OPPENHEIMER STRATEGIC BOND FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER STRATEGIC BOND FUND, a series of Oppenheimer Variable Account Funds, seeks a high level of current income from debt securities. The Fund primarily invests in three sectors: foreign fixed-income securities(1), lower rated high-yield domestic corporate bonds and U.S. government securities. NARRATIVE BY DAVID NEGRI, FUND MANAGER After a slow start, Oppenheimer Strategic Bond Fund performed relatively well during 1997. For the one year period ended December 31, 1997, the Fund provided an average annual total return of 8.71%.(2) These results reflect changes in share price, plus reinvested income distributions, but are calculated before insurance product charges are considered. As it became apparent toward mid-year that inflation would probably remain low, our view of the interest rate environment became more positive. As a result, we increased the Fund's AVERAGE DURATION, a measure of the portfolio's sensitivity to changes in interest rates. By increasing the average duration to a high of 5.1 years, we created a portfolio that was more sensitive to DECLINING interest rates, which helped produce higher rates of return.(3) Our allocation of assets among the various types of bonds did not change significantly, however. We kept about 30% of the Fund's assets in U.S. government securities, including U.S. Treasuries and mortgage-backed securities issued by federal agencies. Another 35% of the portfolio was invested in high-yield corporate bonds, which performed particularly well. We also invested about 20% of the portfolio in bonds from foreign governments and corporations. Our foreign bond positions were split evenly between bonds from developed countries, such as Europe, Australia, Canada, New Zealand, and bonds from emerging markets, including Latin America, Eastern Europe and Asia. Our positions in corporate bonds were primarily in telecommunications companies, including wireless communications. We also held bonds from companies in the cable television and financial services industries. These industries are in the midst of deregulation, which we believe will be good for their businesses. In the foreign bond sector, the Fund had virtually no exposure to Southeast Asia, and the Fund performed relatively well when the Asian crisis developed. However, the problems in Asia also affected bond markets in Latin America, despite the fact that the two regions do not share the same problems. When bond prices fell in Latin America, we took advantage of the opportunity to add to our positions at very attractive prices. Our positions in bonds issued in New Zealand and Australia have performed well, but the ripple effect from the Asian crisis caused a devaluation of their currencies relative to the U.S. dollar. Devaluation offset the returns from the bond market rallies in those countries for U.S. investors. We are optimistic about prospects for the U.S. bond market. Perhaps most important, 1998 economic conditions should remain favorable. We expect economic growth to slow from current levels in response to declining demand for U.S. products overseas. The rate of inflation should remain at its current low levels as growth moderates. The federal government's progress toward a balanced budget should contribute to less issuance of U.S. Treasury securities. Yet demand for these bonds should remain high as economic problems overseas cause investors to seek the safety of bonds issued by the most creditworthy government in the world. We expect these factors and others to cause long-term interest rates to decline modestly from current levels. We intend to maintain the Fund's current strategic orientation. We are keeping the portfolio's average duration relatively long to hold higher yielding securities for as long as possible while interest rates fall. We also plan to continue to allocate assets among those sectors of the bond market that we believe should provide the best yields relative to risk. We believe this strategy should enable the Fund to provide a competitive level of income and the opportunity for attractive total returns for its shareholders. We appreciate your confidence in Oppenheimer Variable Account Funds - Oppenheimer Strategic Bond Fund. We look forward to helping you reach your financial goals in the future. - ---------------------------- 1. Investing in foreign securities entails special risks, such as currency fluctuations, described in the prospectus. 2. Includes changes in net asset value per share without deducting insurance product charges. Such performance would have been lower if these charges were taken into account. 3. The Fund's portfolio is subject to change. OPPENHEIMER GROWTH & INCOME FUND, A SERIES OF OPPENHEIMER VARIABLE ACCOUNT FUNDS OBJECTIVE OPPENHEIMER GROWTH & INCOME FUND, a series of Oppenheimer Variable Account Funds, seeks high total return, which includes growth in the value of its shares, as well as current income from equity and debt securities. NARRATIVE BY ROBERT MILNAMOW, FUND MANAGER Oppenheimer Growth & Income Fund performed very well during 1997. For the one-year period ended December 31, 1997, the Fund provided an average annual total return, without considering insurance product charges, of 32.48%.(1) We also performed well relative to our peers, ranking 26 of 475 among growth and income sub-accounts, as measured by Lipper Analytical Services for the one-year period ended December 31, 1997.(2) In general, the Fund's performance has improved during the past six months due to investments in both strong sectors/industries and specific stocks. For example, the Fund held several financial stocks throughout the year, many of which have benefited from both excellent fundamentals and consolidation activity. One of our largest holdings, Chase Manhattan Bank, was an above average performer during 1997. We remain positive on Chase because of its inexpensive valuation, tight expense controls, and strong global presence. Furthermore, Chase has been aggressively buying back its stock, a bullish sign. Other strong performers in the financial arena are some of our insurance holdings, including Allstate and Everest Re. Allstate has reported positive earnings gains due to its ability to improve its operating costs during the past year, as well as its ability to limit its exposures to major risk areas and natural disasters. Everest Re, a reinsurance company that provides excess layers of property and casualty insurance to other insurance companies, has also exhibited strong gains during the period. Technology stocks have also been key contributors to the Fund's positive performance throughout the year, though they have become somewhat volatile in recent months. We have eliminated our positions in a few companies with deteriorating fundamentals, and we have increased our holdings in a number of other technology companies, including Ikon, First Data and Structural Dynamics. These companies have all underperformed the market during the past year, but, we continue to believe that these companies still have very promising fundamentals. Another position we added to during the last few months is Republic Industries. Republic Industries is a rapidly growing company in the new, used and rental car businesses. By offering user-friendly "one-stop shopping," Republic is trying to simplify and improve the whole automotive buying experience for consumers. The Fund was unable to benefit last year from its limited holdings in energy service companies. While the energy sector has corrected sharply during the past few months, the group was an above average performer during 1997. We continue to like the fundamentals in this sector, and as a result, over the past few months we've been adding to our energy service holdings. We are particularly excited about companies that specialize in deep-water drilling activity. Looking into 1998, our biggest concern is what impact the financial crisis in Southeast Asia will have on earnings growth for many of our investments. We will continue to monitor our holdings closely to identify those companies most at risk to earnings disappointments. In conclusion, we believe that the key to the Fund's ability to continue outperforming its peers is its ability to be flexible and opportunistic, and to seek to capitalize on market opportunities as they arise. We appreciate your confidence in Oppenheimer Variable Account Funds - Oppenheimer Growth & Income Fund. We look forward to helping you reach your financial goals in the future. - ---------------------------- 1. Includes changes in net asset value per share without deducting any insurance product charges. Such performance would have been lower if these charges were taken into account. 2. Source: LIPPER ANALYTICAL SERVICES, INC., 12/31/97. Based on the comparisons between changes in net asset value without considering insurance product charges, with dividends and capital gains distributions reinvested. Past performance does not guarantee future results. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1997
PRINCIPAL VALUE AMOUNT NOTE 1 - ------------------------------------------------------------- DIRECT BANK OBLIGATIONS - 9.4% - ------------------------------------------------------------- Abbey National North America Corp., 5.54%, 1/23/98 $6,000,000 $ 5,979,687 - ------------------------------------------------------------- Bankers Trust Co., New York, 5.71%, 4/15/98(1) 3,000,000 3,000,000 - ------------------------------------------------------------- National Westminster Bank of Canada, 5.59%, 4/30/98 3,000,000 2,944,585 ------------ Total Direct Bank Obligations 11,924,272 - ------------------------------------------------------------- LETTERS OF CREDIT - 8.6% - ------------------------------------------------------------- ABN Amro Bank NV, guaranteeing commercial paper of Formosa Plastics Corp., USA-Series A, 5.55%, 2/27/98 2,000,000 1,982,425 - ------------------------------------------------------------- Bank of America, guaranteeing commercial paper of Formosa Plastics Corp., USA-Series B, 5.55%, 3/19/98 2,000,000 1,976,258 - ------------------------------------------------------------- Credit Suisse, guaranteeing commercial paper of Daewoo International Corp., 5.63%, 4/22/98 5,000,000 4,913,204 - ------------------------------------------------------------- Societe Generale, guaranteeing commercial paper of Nacional Financiera SNC-Series B, 5.535%, 2/17/98 2,000,000 1,985,548 ------------ Total Letters of Credit 10,857,435 - ------------------------------------------------------------- SHORT-TERM NOTES - 75.7% - ------------------------------------------------------------- AUTOMOTIVE - 0.8% BMW US Capital Corp., 5.65%, 1/14/98 1,000,000 997,960 - ------------------------------------------------------------- BANKS - 4.9% Bankers Trust New York Corp., 5.54%, 2/17/98 3,280,000 3,256,276 - ------------------------------------------------------------- Barnett Banks, Inc., 5.92%, 1/16/98 3,000,000 2,992,500 ------------ 6,248,776 - ------------------------------------------------------------- BROKER/DEALERS - 24.5% Bear Stearns Cos., Inc., 6.169%, 3/23/98(1) 5,000,000 5,002,296 - ------------------------------------------------------------- Lehman Brothers Holdings, Inc.: 4.975%, 8/14/98(1) 2,000,000 2,000,000 5.70%, 4/10/98 3,000,000 2,952,975 - ------------------------------------------------------------- Merrill Lynch & Co., Inc., 5.67%, 5/22/98 6,250,000 6,111,203 - ------------------------------------------------------------- Morgan Stanley, Dean Witter, Discover & Co., 6.75%, 3/24/98 5,000,000 5,000,000 - ------------------------------------------------------------- Republic New York Securities Corp., 7%, 4/24/98 5,000,000 5,000,000 - ------------------------------------------------------------- Salomon Smith Barney, Inc.: 5.77%, 3/30/98 2,000,000 1,971,791 5.884%, 10/20/98(1) 3,000,000 3,000,000 ------------ 31,038,265 - ------------------------------------------------------------- COMMERCIAL FINANCE - 6.5% CIT Group Holdings, Inc., 5.902%, 3/11/98(1) 1,000,000 1,000,000 - ------------------------------------------------------------- FINOVA Capital Corp.: 5.60%, 1/5/98 2,000,000 1,998,756 5.61%, 4/29/98 2,000,000 1,963,223 - ------------------------------------------------------------- Heller Financial, Inc.: 6%, 1/9/98 334,000 333,555 6%, 4/2/98 3,000,000 2,954,500 ------------ 8,250,034 - ------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 1.5% First Data Corp., 5.67%, 5/19/98 2,000,000 1,956,530 - ------------------------------------------------------------- DIVERSIFIED FINANCIAL - 3.2% General Electric Capital Corp., 5.55%, 2/23/98 2,510,000 2,489,491 - ------------------------------------------------------------- General Motors Acceptance Corp., 5.56%, 1/26/98 1,500,000 1,494,208 ------------ 3,983,699
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL VALUE AMOUNT NOTE 1 - ------------------------------------------------------------- INDUSTRIAL SERVICES - 4.7% PHH Corp.: 5.939%, 1/27/98(1) $1,000,000 $ 999,986 5.96%, 1/15/98(1) 5,000,000 4,999,981 ------------ 5,999,967 - ------------------------------------------------------------- INSURANCE - 5.5% Pacific Mutual Life Insurance Co., 5.647%, 1/2/98(1)(2) 5,000,000 5,000,000 - ------------------------------------------------------------- Travelers Insurance Co., 5.708%, 9/16/98(1)(2) 2,000,000 2,000,000 ------------ 7,000,000 - ------------------------------------------------------------- LEASING & FACTORING - 3.9% American Honda Finance Corp., 5.58%, 1/22/98 5,000,000 4,983,725 - ------------------------------------------------------------- MANUFACTURING - 1.4% Rexam PLC, 6%, 1/12/98(3) 1,750,000 1,746,792 - ------------------------------------------------------------- METALS/MINING - 3.3% Rio Tinto America, Inc., 5.55%, 2/27/98(3) 4,200,000 4,163,093 - ------------------------------------------------------------- NONDURABLE HOUSEHOLD GOODS - 2.6% Newell Co., 6.80%, 1/2/98(3) 3,345,000 3,344,368 - ------------------------------------------------------------- SPECIAL PURPOSE FINANCIAL - 12.9% Asset Backed Capital Finance, Inc.: 5.60%, 2/9/98(3) 1,500,000 1,490,900 5.68%, 1/8/98(3) 2,000,000 1,997,791 - ------------------------------------------------------------- Beta Finance, Inc.: 5.54%, 2/25/98(3) 2,000,000 1,983,072 5.56%, 3/12/98(3) 2,000,000 1,978,300 5.57%, 4/29/98(3) 2,000,000 1,963,486 - ------------------------------------------------------------- Cooperative Assn. of Tractor Dealers-Series A, 5.95%, 2/10/98 1,000,000 993,389 - ------------------------------------------------------------- CXC, Inc.: 5.59%, 2/17/98(3) 3,000,000 2,978,106 5.68%, 3/26/98(3) 3,000,000 2,960,240 ------------ 16,345,284 ------------ Total Short-Term Notes 96,058,493 - ------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 5.5% - ------------------------------------------------------------- Finnish Export Credit Ltd., 5.55%, 7/15/98 2,000,000 1,939,875 - ------------------------------------------------------------- Westseutsche Landsbank Girozentrale, 8%, 1/2/98 5,000,000 4,998,889 ------------ Total Foreign Government Obligations 6,938,764 - ------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE 99.2% 125,778,964 - ------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.8 1,003,418 ---------- ------------ NET ASSETS 100.0% $126,782,382 ---------- ------------ ---------- ------------
Short-term notes, direct bank obligations and letters of credit are generally traded on a discount basis; the interest rate is the discount rate received by the Fund at the time of purchase. Other securities normally bear interest at the rates shown. 1. Floating or variable rate obligation. The interest rate, which is based on specific, or an index of, market interest rates, is subject to change periodically and is the effective rate on December 31, 1997. This instrument may also have a demand feature which allows the recovery of principal at any time, or at specified intervals not exceeding one year, on up to 30 days' notice. Maturity date shown represents effective maturity based on variable rate and, if applicable, demand feature. 2. Restricted securities which are considered illiquid, by virtue of the absence of a readily available market or because of legal or contractual restrictions on resale, amount to $7,000,000, or 5.52% of the Fund's net assets. The Fund may not invest more than 10% of its net assets (determined at the time of purchase) in illiquid securities. 3. Security issued in an exempt transaction without registration under the Securities Act of 1933. Such securities amount to $24,606,148, or 19.41% of the Fund's net assets and have been determined to be liquid pursuant to guidelines adopted by the Board of Trustees. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1997
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 4.6% - ---------------------------------------------------------------------- Amresco Commercial Mortgage Funding I Corp., Multiclass Mtg. Pass- Through Certificates, Series 1997-C1, Cl. H, 7%, 6/17/29(2) $ 200,000 $ 178,813 - ---------------------------------------------------------------------- Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates, Series 1997-D4: Cl. B1, 7.525%, 4/14/29(3) 167,000 165,435 Cl. B2, 7.525%, 4/14/29(3) 167,000 161,338 Cl. B3, 7.525%, 4/14/29(3) 166,000 153,835 - ---------------------------------------------------------------------- CBA Mortgage Corp., Mtg. Pass-Through Certificates, Series 1993-C1: Cl. E, 7.76%, 12/25/03(3) 250,000 252,675 Cl. F, 7.76%, 12/25/03(3)(4) 700,000 562,590 - ---------------------------------------------------------------------- CS First Boston Mortgage Securities Corp., Mtg. Pass-Through Certificates, Series 1997-C1: Cl. E, 7.50%, 3/1/11(2) 506,000 523,862 Cl. F, 7.50%, 6/20/13(2) 300,000 291,000 Cl. G, 7.50%, 6/20/14(2) 500,000 462,350 Cl. H, 7.50%, 8/20/14(2) 225,000 177,660 - ---------------------------------------------------------------------- Commercial Mortgage Acceptance Corp., Collateralized Mtg. Obligation, Series 1996-C1, Cl. E, 8.129%, 12/25/20(3)(4) 250,000 261,250 - ---------------------------------------------------------------------- First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates, Series 1997-CHL1: 8.116%, 2/25/11(2)(3) 1,500,000 1,276,950 8.116%, 5/25/08(2)(3) 300,000 304,290 - ---------------------------------------------------------------------- First Union-Lehman Brothers Commercial Mortgage Trust, Interest-Only Stripped Mtg.-Backed Security, Series 1997-C1, 7.086%, 4/18/27(5) 8,207,763 640,109 - ---------------------------------------------------------------------- General Motors Acceptance Corp., Interest-Only Stripped Mtg.-Backed Security, Series 1997-C1, Cl. X, 8.905%, 7/15/27(5) 9,689,791 975,035 - ---------------------------------------------------------------------- Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates, Series 1995-C2, Cl. D, 8.189%, 6/15/21(3) 367,685 375,958 - ---------------------------------------------------------------------- Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates: Series 1996-C1, Cl. E, 7.51%, 2/15/28(2)(3) 835,342 798,404 Series 1997-HF1, Cl. F, 6.86%, 2/15/10(2) 300,000 273,375 - ---------------------------------------------------------------------- Mortgage Capital Funding, Inc.: Commercial Mtg. Pass-Through Certificates, Series 1997-MC1, Cl. F, 7.452%, 5/20/07(2) 254,890 242,783 Multifamily Mtg. Pass-Through Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06(4) 750,000 712,734 - ---------------------------------------------------------------------- NationsCommercial Corp., NB Commercial Mtg. Pass-Through Certificates, Series-DMC, Cl. C, 8.921%, 8/12/11(4) 900,000 961,031 - ---------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates: Series 1994-C1, Cl. E, 8%, 6/25/26 664,744 656,286 Series 1994-C2, Cl. G, 8%, 4/25/25 745,616 744,456 Series 1995-C1, Cl. F, 6.90%, 2/25/27 724,039 682,516
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS (CONTINUED) - ---------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Series 1996-B, Cl. 1, 7.136%, 4/25/26 $ 1,473,761 $ 1,040,844 - ---------------------------------------------------------------------- Structured Asset Securities Corp., Multiclass Pass-Through Certificates, Series 1996-C3, Cl. E, 8.458%, 6/25/30(4) 650,000 651,625 ------------ Total Mortgage-Backed Obligations (Cost $12,447,815) 13,527,204 - ---------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 3.2% - ---------------------------------------------------------------------- U.S. Treasury Bonds, 6.125%, 11/15/27 (Cost $9,255,469) 9,000,000 9,250,317 - ---------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 2.1% - ---------------------------------------------------------------------- Argentina (Republic of) Unsec. Unsub. Medium-Term Nts., 5.50%, 3/27/01 JPY 110,000,000 835,103 - ---------------------------------------------------------------------- Argentina (Republic of) Unsec. Unsub. Medium-Term Nts., 8.75%, 7/10/02 ARP 420,000 364,417 - ---------------------------------------------------------------------- Bulgaria (Republic of) Interest Arrears Bonds, 6.69%, 7/28/11(3) 50,000 36,625 - ---------------------------------------------------------------------- Ecuador (Republic of) Disc. Bonds, 6.688%, 2/28/25(3) 335,000 252,925 - ---------------------------------------------------------------------- Ecuador (Republic of) Past Due Interest Bonds, 6.688%, 2/27/15(3) 699,878 458,420 - ---------------------------------------------------------------------- Financiera Energetica Nacional SA Nts., 9.375%, 6/15/06 500,000 504,688 - ---------------------------------------------------------------------- Halkbank Turkiye Halk Bonds, 8%, 2/26/02 DEM 170,000 89,820 - ---------------------------------------------------------------------- Hashemite (Kingdom of Jordan) Collateralized Par Bonds, Series DEF, 4%, 12/23/23(3) 580,000 400,200 - ---------------------------------------------------------------------- Hashemite (Kingdom of Jordan) Disc. Bonds, 6.875%, 12/23/23(3) 500,000 417,031 - ---------------------------------------------------------------------- Ivory Coast (Government of) Past Due Interest Bonds, 12/29/49(7) 1,375,000 543,125 - ---------------------------------------------------------------------- Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%, 1/5/10 319,347 225,695 - ---------------------------------------------------------------------- Pakistan (Republic of) Bonds, 9.856%, 5/30/00(3) 130,000 125,125 - ---------------------------------------------------------------------- Pakistan (Republic of) Debs., 11.50%, 12/22/99 54,000 54,135 - ---------------------------------------------------------------------- Pera Financial Services Sec. Nts., 9.375%, 10/15/02(4) 110,000 101,337 - ---------------------------------------------------------------------- Peru (Republic of) Front-Loaded Interest Reduction Bonds, 3.25%, 3/7/17(3) 300,000 177,750 - ---------------------------------------------------------------------- Peru (Republic of) Past Due Interest Bonds, 4%, 3/7/17(3) 260,000 168,675 - ---------------------------------------------------------------------- Petroleos Mexicanos Debs., 14.50%, 3/31/06 GBP 180,000 376,139 - ---------------------------------------------------------------------- PT Hutama Karya Promissory Nts., Zero Coupon, 28.69%, 2/10/98(8) IDR 1,000,000,000 174,620 - ---------------------------------------------------------------------- Romania (Government of) Bonds, 7.75%, 6/17/02 DEM 98,000 52,732 - ---------------------------------------------------------------------- Turkey (Republic of) Treasury Bills, Zero Coupon, 101.517%, 3/18/98(8) TRL 20,000,000,000 79,557 - ---------------------------------------------------------------------- Venezuela (Republic of) Bonds, 9.25%, 9/15/27 65,000 58,403 - ---------------------------------------------------------------------- Venezuela (Republic of) Disc. Bonds, Series W-B, 6.75%, 3/31/20(3) 3,570 3,209 - ---------------------------------------------------------------------- Venezuela (Republic of) Disc. Bonds, Series DL, 6.75%, 12/18/07(3) 238,095 214,137 - ---------------------------------------------------------------------- Venezuela (Republic of) Sr. Unsec. Unsub. Nts., Series REGS, 9.125%, 6/18/07 300,000 294,000 ------------ Total Foreign Government Obligations (Cost $6,283,361) 6,007,868
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- LOAN PARTICIPATIONS - 0.7% - ---------------------------------------------------------------------- Algeria (Republic of) Reprofiled Debt Loan Participation, Tranche A, 6.625%, 9/4/06(3) $ 1,010,000 $ 828,200 - ---------------------------------------------------------------------- Morocco (Kingdom of) Loan Participation Agreement, Tranche A, 6.66%, 1/1/09(3) 100,000 86,391 - ---------------------------------------------------------------------- Russian (Government of) Principal Loans Debs., 6.719%, 6/2/98(2)(3)(7) 1,115,000 689,906 - ---------------------------------------------------------------------- Trinidad & Tobago Loan Participation Agreement, Tranche B, 1.575%, 9/30/00(2)(3) JPY 59,260,366 423,871 ------------ Total Loan Participations (Cost $2,073,605) 2,028,368 - ---------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 57.5% - ---------------------------------------------------------------------- BASIC INDUSTRY - 3.5% - ---------------------------------------------------------------------- CHEMICALS - 1.8% ClimaChem, Inc., 10.75% Gtd. Sr. Unsec. Nts., 12/1/07(4) 300,000 310,500 - ---------------------------------------------------------------------- ICO, Inc., 10.375% Sr. Nts., 6/1/07 250,000 269,375 - ---------------------------------------------------------------------- Laroche Industries, Inc., 9.50% Sr. Sub. Nts., 9/15/07(4) 475,000 470,250 - ---------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 1,045,000 1,162,562 - ---------------------------------------------------------------------- PCI Chemicals Canada, Inc., 9.25% Sr. Nts., 10/15/07(4) 400,000 396,000 - ---------------------------------------------------------------------- Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 575,000 582,187 - ---------------------------------------------------------------------- Sovereign Specialty Chemicals, Inc., 9.50% Sr. Sub. Nts., 8/1/07(4) 750,000 772,500 - ---------------------------------------------------------------------- Sterling Chemicals Holdings, Inc., 0%/13.50% Sr. Disc. Nts., 8/15/08(9) 650,000 399,750 - ---------------------------------------------------------------------- Sterling Chemicals, Inc.: 11.25% Sr. Sub. Nts., 4/1/07 300,000 301,500 11.75% Sr. Unsec. Sub. Nts., 8/15/06 635,000 650,875 ------------ 5,315,499 - ---------------------------------------------------------------------- CONTAINERS - 0.1% Consumers International, Inc., 10.25% Sr. Sec. Nts., 4/1/05(2) 375,000 412,500 - ---------------------------------------------------------------------- METALS/MINING - 0.2% Metallurg, Inc., 11% Sr. Nts., 12/1/07(4) 535,000 551,050 - ---------------------------------------------------------------------- PAPER - 0.4% Four M Corp., 12% Sr. Nts., Series B, 6/1/06(2) 150,000 159,750 - ---------------------------------------------------------------------- Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 750,000 765,000 - ---------------------------------------------------------------------- U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07 300,000 312,000 ------------ 1,236,750 - ---------------------------------------------------------------------- STEEL - 1.0% AK Steel Corp., 9.125% Sr. Nts., 12/15/06 540,000 556,200 - ---------------------------------------------------------------------- Algoma Steel, Inc., 12.375% First Mtg. Nts., 7/15/05 675,000 783,000 - ---------------------------------------------------------------------- Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01 700,000 764,750 - ---------------------------------------------------------------------- Keystone Consolidated Industries, Inc., 9.625% Sr. Nts., 8/1/07(4) 825,000 832,219 ------------ 2,936,169
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- CONSUMER RELATED - 7.6% - ---------------------------------------------------------------------- CONSUMER PRODUCTS - 1.9% Coleman Escrow Corp., Zero Coupon Sr. First Priority Disc. Nts., 10.71%, 5/15/01(8) $ 530,000 $ 353,775 - ---------------------------------------------------------------------- Dyersburg Corp., 9.75% Sr. Unsec. Sub. Nts., 9/1/07 250,000 262,500 - ---------------------------------------------------------------------- Holmes Products Corp., 9.875% Gtd. Nts., 11/15/07(4) 400,000 409,000 - ---------------------------------------------------------------------- Icon Fitness Corp., 0%/14% Sr. Disc. Nts., 11/15/06(2)(9) 900,000 513,000 - ---------------------------------------------------------------------- Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., Series B, 7/15/02 800,000 898,000 - ---------------------------------------------------------------------- IHF Holdings, Inc., 0%/15% Sr. Sub. Disc. Nts., Series B, 11/15/04(9) 1,450,000 1,268,750 - ---------------------------------------------------------------------- Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts.: 10.56%, 3/15/01(8) 1,515,000 1,052,925 12.33%, 3/15/98(8) 350,000 346,421 - ---------------------------------------------------------------------- TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(2) 350,000 421,750 ------------ 5,526,121 - ---------------------------------------------------------------------- FOOD/BEVERAGES/TOBACCO - 0.6% CFP Holdings, Inc., 11.625% Gtd. Sr. Nts., Series B, 1/15/04 75,000 75,375 - ---------------------------------------------------------------------- Del Monte Foods Co., 0%/12.50% Sr. Disc. Nts., 12/15/07(4)(9) 500,000 288,750 - ---------------------------------------------------------------------- Sparkling Spring Water Group Ltd., 11.50% Sr. Sub. Nts., 11/15/07(4) 1,000,000 1,035,000 - ---------------------------------------------------------------------- Windy Hill Pet Food, Inc., 9.75% Sr. Sub. Nts., 5/15/07 350,000 358,750 ------------ 1,757,875 - ---------------------------------------------------------------------- HEALTHCARE - 0.6% Genesis Health Ventures, Inc., 9.25% Sr. Sub. Nts., 10/1/06 115,000 117,731 - ---------------------------------------------------------------------- Integrated Health Services, Inc.: 10.25% Sr. Sub. Nts., 4/30/06 35,000 37,275 9.50% Sr. Sub. Nts., 9/15/07(4) 765,000 787,950 - ---------------------------------------------------------------------- Sun Healthcare Group, Inc., 9.50% Sr. Sub. Nts., 7/1/07(4) 655,000 674,650 ------------ 1,617,606 - ---------------------------------------------------------------------- HOTEL/GAMING - 3.5% Boyd Gaming Corp.: 9.25% Sr. Unsec. Gtd. Nts., 10/1/03 575,000 605,187 9.50% Sr. Unsec. Sub. Nts., 7/15/07 125,000 131,562 - ---------------------------------------------------------------------- Capital Gaming International, Inc., Promissory Nts., 8/1/95(10) 9,500 0 - ---------------------------------------------------------------------- Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 825,000 853,875 - ---------------------------------------------------------------------- Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03 1,550,000 1,674,000 - ---------------------------------------------------------------------- HMH Properties, Inc., 8.875% Sr. Nts., 7/15/07 400,000 423,000 - ---------------------------------------------------------------------- Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 1,275,000 1,341,937 - ---------------------------------------------------------------------- Mohegan Tribal Gaming Authority (Connecticut), 13.50% Sr. Sec. Nts., Series B, 11/15/02 700,000 899,500 - ---------------------------------------------------------------------- Rio Hotel & Casino, Inc.: 10.625% Sr. Sub. Nts., 7/15/05 125,000 135,625 9.50% Gtd. Sr. Sub. Nts., 4/15/07 550,000 584,375 - ---------------------------------------------------------------------- Showboat Marina Casino Partnership/Showboat Marina Finance Corp., 13.50% First Mtg. Nts., Series B, 3/15/03 1,100,000 1,325,500
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- HOTEL/GAMING (CONTINUED) Signature Resorts, Inc., 9.75% Sr. Sub. Nts., 10/1/07(4) $ 900,000 $ 904,500 - ---------------------------------------------------------------------- Station Casinos, Inc.: 10.125% Sr. Sub. Nts., 3/15/06 735,000 779,100 9.625% Sr. Sub. Nts., 6/1/03 200,000 207,000 - ---------------------------------------------------------------------- Venetian Casino Resort LLC/Las Vegas Sands, Inc., 12.25% Mtg. Nts., 11/15/04(4) 375,000 377,344 ------------ 10,242,505 - ---------------------------------------------------------------------- RESTAURANTS - 0.7% Ameriking, Inc., 10.75% Sr. Nts., 12/1/06 755,000 796,525 - ---------------------------------------------------------------------- Foodmaker, Inc.: 9.25% Sr. Nts., 3/1/99 139,000 142,127 9.75% Sr. Sub. Nts., 6/1/02(11) 950,000 980,875 ------------ 1,919,527 - ---------------------------------------------------------------------- TEXTILE/APPAREL - 0.3% CMI Industries, Inc., 9.50% Sr. Sub. Nts., 10/1/03(2) 95,000 93,812 - ---------------------------------------------------------------------- Dan River, Inc., 10.125% Sr. Sub. Nts., 12/15/03 250,000 268,437 - ---------------------------------------------------------------------- Tultex Corp., 9.625% Sr. Unsec. Nts., 4/15/07 150,000 150,000 - ---------------------------------------------------------------------- William Carter Co., 10.375% Sr. Sub. Nts., Series A, 12/1/06 350,000 369,250 ------------ 881,499 - ---------------------------------------------------------------------- ENERGY - 4.3% - ---------------------------------------------------------------------- Belden & Blake Corp., 9.875% Sr. Sub. Nts., 6/15/07 1,385,000 1,405,775 - ---------------------------------------------------------------------- Clark R&M, Inc., 8.875% Sr. Sub. Nts., 11/15/07(4) 1,200,000 1,218,000 - ---------------------------------------------------------------------- Clark USA, Inc., 10.875% Sr. Nts., Series B, 12/1/05 275,000 301,125 - ---------------------------------------------------------------------- Cliffs Drilling Co., 10.25% Sr. Nts., 5/15/03 200,000 218,750 - ---------------------------------------------------------------------- Dailey International, Inc., 9.75% Gtd. Sr. Unsec. Nts., 8/15/07(4) 425,000 448,375 - ---------------------------------------------------------------------- Energy Corp. of America, 9.50% Sr. Sub. Nts., Series A, 5/15/07 665,000 666,662 - ---------------------------------------------------------------------- Forcenergy, Inc.: 8.50% Sr. Sub. Nts., Series B, 2/15/07 400,000 407,000 9.50% Sr. Sub. Nts., 11/1/06 280,000 298,200 - ---------------------------------------------------------------------- Gothic Energy Corp., 12.25% Sr. Nts., 9/1/04(2) 1,000,000 1,050,000 - ---------------------------------------------------------------------- J. Ray McDermott SA, 9.375% Sr. Sub. Bonds, 7/15/06 1,500,000 1,614,375 - ---------------------------------------------------------------------- Parker Drilling Corp., 9.75% Gtd. Sr. Nts., 11/15/06 600,000 649,500 - ---------------------------------------------------------------------- Petroleum Heat & Power Co., Inc., 9.375% Sub. Debs., 2/1/06 1,150,000 1,040,750 - ---------------------------------------------------------------------- Pogo Producing Co., 8.75% Sr. Sub. Nts., 5/15/07 910,000 928,200 - ---------------------------------------------------------------------- Statia Terminals International/Statia Terminals (Canada), Inc., 11.75% First Mtg. Nts., Series B, 11/15/03 225,000 238,500 - ---------------------------------------------------------------------- Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 1,675,000 1,712,687 - ---------------------------------------------------------------------- Wiser Oil Co., 9.50% Sr. Sub. Nts., 5/15/07 265,000 261,025 ------------ 12,458,924
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- FINANCIAL SERVICES - 3.0% - ---------------------------------------------------------------------- BANKS & THRIFTS - 0.5% Bank Plus Corp., 12% Sr. Nts., 7/18/07 $ 517,000 $ 581,625 - ---------------------------------------------------------------------- Local Financial Corp., 11% Sr. Nts., 9/8/04(2) 800,000 848,000 ------------ 1,429,625 - ---------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 1.8% Amresco, Inc., 10% Sr. Sub. Nts., Series 97-A, 3/15/04 600,000 625,500 - ---------------------------------------------------------------------- Bakrie Investindo, Zero Coupon Promissory Nts., 19.09%, 3/26/98(8) IDR 1,000,000,000 166,261 - ---------------------------------------------------------------------- ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(2) 91,619 91,849 - ---------------------------------------------------------------------- Emergent Group, Inc., 10.75% Sr. Nts., 9/15/04 425,000 423,406 - ---------------------------------------------------------------------- Ocwen Capital Trust I, 10.875% Gtd. Bonds, 8/1/27 450,000 490,500 - ---------------------------------------------------------------------- Ocwen Financial Corp., 11.875% Nts., 10/1/03 850,000 962,625 - ---------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Sec. Nts., Series B, 4/1/02 1,200,000 1,290,000 - ---------------------------------------------------------------------- Southern Pacific Funding Corp., 11.50% Sr. Nts., 11/1/04 600,000 603,000 - ---------------------------------------------------------------------- Veritas Capital Trust, 10% Gtd. Debs., 1/1/28(4) 525,000 536,812 ------------ 5,189,953 - ---------------------------------------------------------------------- INSURANCE - 0.7% Residential Reinsurance, 11.447% Nts., 12/15/98(3) 1,000,000 1,032,175 - ---------------------------------------------------------------------- Veritas Holdings, Inc., 9.625% Sr. Nts., 12/15/03 1,000,000 1,070,000 ------------ 2,102,175 - ---------------------------------------------------------------------- HOUSING RELATED - 0.9% - ---------------------------------------------------------------------- BUILDING MATERIALS - 0.2% Nortek, Inc., 9.25% Sr. Nts., Series B, 3/15/07 600,000 615,000 - ---------------------------------------------------------------------- HOMEBUILDERS/REAL ESTATE - 0.7% Continental Homes Holding Corp., 10% Gtd. Unsec. Bonds, 4/15/06 80,000 87,600 - ---------------------------------------------------------------------- First Place Tower, Inc., Units (each unit consists of one $10 principal amount of 8.50% cv. sub. debs., 12/15/15 and 40 common shares)(12) CAD 180,660 473,421 - ---------------------------------------------------------------------- Greystone Homes, Inc., 10.75% Sr. Gtd. Nts., 3/1/04(2) 280,000 306,600 - ---------------------------------------------------------------------- Hovnanian K. Enterprises, Inc., 11.25% Gtd. Sub. Nts., 4/15/02 200,000 210,500 - ---------------------------------------------------------------------- Nortek, Inc., 9.125% Sr. Nts., Series B, 9/1/07 1,000,000 1,020,000 ------------ 2,098,121 - ---------------------------------------------------------------------- MANUFACTURING - 5.3% - ---------------------------------------------------------------------- AEROSPACE - 2.4% America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05(11) 1,700,000 1,827,500 - ---------------------------------------------------------------------- Amtran, Inc., 10.50% Sr. Nts., 8/1/04(4) 700,000 731,500 - ---------------------------------------------------------------------- Atlas Air, Inc.: 10.75% Sr. Nts., 8/1/05 700,000 742,000 12.25% Pass-Through Certificates, 12/1/02 950,000 1,059,250 - ---------------------------------------------------------------------- Constellation Finance LLC, 9.80% Airline Receivable Asset-Backed Nts., Series 1997-1, 1/1/01(2) 500,000 505,000
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- AEROSPACE (CONTINUED) Kitty Hawk, Inc., 9.95% Sr. Nts., 11/15/04(4) $ 525,000 $ 530,250 - ---------------------------------------------------------------------- Pegasus Aircraft Lease Securitization Trust, 11.76% Sr. Nts., Cl. B, 6/15/04(2) 340,067 350,847 - ---------------------------------------------------------------------- Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04(4) 1,200,000 1,212,000 ------------ 6,958,347 - ---------------------------------------------------------------------- AUTOMOTIVE - 0.9% Aftermarket Technology Corp., 12% Sr. Sub. Nts., Series B, 8/1/04 300,000 334,500 - ---------------------------------------------------------------------- Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., 7/15/07(4) 450,000 472,500 - ---------------------------------------------------------------------- Collins & Aikman Products Co., 11.50% Gtd. Sr. Sub. Nts., 4/15/06 100,000 113,000 - ---------------------------------------------------------------------- Delco Remy International, Inc., 8.625% Sr. Nts., 12/15/07 225,000 229,219 - ---------------------------------------------------------------------- Hayes Wheels International, Inc.: 11% Sr. Sub. Nts., 7/15/06 600,000 672,000 9.125% Sr. Sub. Nts., 7/15/07 300,000 311,625 - ---------------------------------------------------------------------- Lear Corp., 9.50% Sub. Nts., 7/15/06 300,000 330,750 ------------ 2,463,594 - ---------------------------------------------------------------------- CAPITAL GOODS - 2.0% Burke Industries, Inc., 10% Sr. Nts., 8/15/07(4) 375,000 387,187 - ---------------------------------------------------------------------- Clark-Schwebel, Inc., 10.50% Sr. Nts., 4/15/06 725,000 793,875 - ---------------------------------------------------------------------- Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05 1,050,000 1,176,000 - ---------------------------------------------------------------------- Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 675,000 700,313 - ---------------------------------------------------------------------- Insilco Corp., 10.25% Unsec. Sr. Sub. Nts., 8/15/07(4) 825,000 868,313 - ---------------------------------------------------------------------- International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 475,000 522,500 - ---------------------------------------------------------------------- Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 450,000 451,125 - ---------------------------------------------------------------------- Roller Bearing Co. of America, Inc., 9.625% Gtd. Sr. Sub. Nts., 6/15/07(2) 535,000 541,688 - ---------------------------------------------------------------------- Synthetic Industries, Inc., 9.25% Sr. Sub. Nts., 2/15/07 170,000 180,200 - ---------------------------------------------------------------------- Titan Wheel International, Inc., 8.75% Sr. Sub. Nts., 4/1/07 150,000 157,875 ------------ 5,779,076 - ---------------------------------------------------------------------- MEDIA - 11.8% - ---------------------------------------------------------------------- BROADCASTING - 2.1% Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 600,000 616,500 - ---------------------------------------------------------------------- Chancellor Radio Broadcasting Co., 8.75% Sr. Sub. Nts., 6/15/07 450,000 460,125 - ---------------------------------------------------------------------- Jacor Communications Co., 8.75% Gtd. Sr. Sub. Nts., 6/15/07(4) 455,000 465,238 - ---------------------------------------------------------------------- Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03(11) 1,000,000 1,062,842 - ---------------------------------------------------------------------- Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02 495,000 532,125 - ---------------------------------------------------------------------- Radio One, Inc., 7% Sr. Sub. Nts., Series B, 5/15/04(6) 400,000 398,000 - ---------------------------------------------------------------------- Sinclair Broadcast Group, Inc.: 10% Sr. Sub. Nts., 9/30/05 100,000 105,750 9% Gtd. Sr. Sub. Nts., 7/15/07 1,300,000 1,332,500
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- BROADCASTING (CONTINUED) Young Broadcasting, Inc.: 8.75% Sr. Sub. Debs., 6/15/07 $ 650,000 $ 646,750 9% Sr. Sub. Nts., Series B, 1/15/06 425,000 427,125 ------------ 6,046,955 - ---------------------------------------------------------------------- CABLE TELEVISION - 3.0% Adelphia Communications Corp.: 10.50% Sr. Unsec. Nts., Series B, 7/15/04 340,000 368,050 9.25% Sr. Nts., 10/1/02 700,000 717,500 9.875% Sr. Nts., Series B, 3/1/07 200,000 212,500 - ---------------------------------------------------------------------- Cablevision Systems Corp.: 10.50% Sr. Sub. Debs., 5/15/16 250,000 291,875 9.875% Sr. Sub. Debs., 4/1/23 450,000 497,250 9.875% Sr. Sub. Nts., 5/15/06 100,000 110,250 - ---------------------------------------------------------------------- EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04(9) 200,000 184,000 - ---------------------------------------------------------------------- EchoStar DBS Corp., 12.50% Gtd. Nts., 7/1/02 2,000,000 2,170,000 - ---------------------------------------------------------------------- EchoStar Satellite Broadcasting Corp., 0%/13.125% Sr. Sec. Disc. Nts., 3/15/04(9) 1,230,000 1,051,650 - ---------------------------------------------------------------------- FrontierVision Holdings LP/FrontierVision Holdings Capital Corp., 0%/11.875% Sr. Disc. Nts., 9/15/07(9) 135,000 99,900 - ---------------------------------------------------------------------- Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B, 11/1/03(3) 885,000 955,800 - ---------------------------------------------------------------------- Knology Holdings, Inc., Units (each unit consists of $1,000 principal amount of 0%/11.875% sr. disc. nts., 10/15/07 and one warrant to purchase .003734 shares of preferred stock)(2)(9)(12) 500,000 275,000 - ---------------------------------------------------------------------- Optel, Inc., 13% Sr. Nts., Series B, 2/15/05 945,000 1,006,425 - ---------------------------------------------------------------------- Rogers Communications, Inc., 8.75% Sr. Nts., 7/15/07 CAD 1,000,000 682,409 - ---------------------------------------------------------------------- TCI Satellite Entertainment, Inc., 10.875% Sr. Sub. Nts., 2/15/07(4) 100,000 105,250 ------------ 8,727,859 - ---------------------------------------------------------------------- DIVERSIFIED MEDIA - 5.5% Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/03 750,000 802,500 - ---------------------------------------------------------------------- GSP I Corp., 10.15% First Mtg. Bonds, 6/24/10(4) 462,719 453,127 - ---------------------------------------------------------------------- Heritage Media Corp., 8.75% Sr. Sub. Nts., 2/15/06 160,000 169,600 - ---------------------------------------------------------------------- Hollywood Theaters, Inc., 10.625% Sr. Sub. Nts., 8/1/07(4) 200,000 213,500 - ---------------------------------------------------------------------- ITT Promedia CVA, 9.125% Sr. Sub. Nts., 9/15/07(4) DEM 19,775,000 11,589,215 - ---------------------------------------------------------------------- Katz Media Corp., 10.50% Sr. Sub. Nts., Series B, 1/15/07 425,000 470,688 - ---------------------------------------------------------------------- Lamar Advertising Co.: 8.625% Sr. Sub. Nts., 9/15/07 700,000 722,750 9.625% Sr. Sub. Nts., 12/1/06 815,000 881,219 - ---------------------------------------------------------------------- Outdoor Systems, Inc., 8.875% Sr. Sub. Nts., 6/15/07 400,000 418,000 - ---------------------------------------------------------------------- Universal Outdoor, Inc., 9.75% Sr. Sub. Nts., Series B, 10/15/06 250,000 281,250 ------------ 16,001,849
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- ENTERTAINMENT/FILM - 0.8% Ascent Entertainment Group, Inc., 0%/11.875% Sr. Sec. Disc. Nts., 12/15/04(4)(9) $ 1,000,000 $ 577,500 - ---------------------------------------------------------------------- Imax Corp., 10% Sr. Nts., 3/1/01 1,600,000 1,688,000 ------------ 2,265,500 - ---------------------------------------------------------------------- PUBLISHING/PRINTING - 0.4% American Lawyer Media Holdings, Inc., 9.75% Sr. Nts., 12/15/07(4) 625,000 637,500 - ---------------------------------------------------------------------- Hollinger International Publishing, Inc., 9.25% Gtd. Sr. Sub. Nts., 3/15/07 200,000 211,000 - ---------------------------------------------------------------------- Sun Media Corp., 9.50% Sr. Sub. Nts., 2/15/07 350,000 378,000 ------------ 1,226,500 - ---------------------------------------------------------------------- OTHER - 1.5% - ---------------------------------------------------------------------- CONGLOMERATES - 0.1% Maxxam Group, Inc., 0%/12.25% Sr. Sec. Disc. Nts., 8/1/03(9) 200,000 199,000 - ---------------------------------------------------------------------- ENVIRONMENTAL - 0.1% Allied Waste Industries, Inc., 0%/11.30% Sr. Disc. Nts., 6/1/07(4)(9) 450,000 317,250 - ---------------------------------------------------------------------- SERVICES - 1.3% Borg-Warner Security Corp., 9.625% Sr. Sub. Nts., 3/15/07 100,000 104,500 - ---------------------------------------------------------------------- Coinstar, Inc., 0%/13% Sr. Disc. Nts., 10/1/06(2)(9) 750,000 618,750 - ---------------------------------------------------------------------- Comforce Operating, Inc., 12% Sr. Nts., 12/1/07(4) 200,000 202,500 - ---------------------------------------------------------------------- Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 150,000 150,000 - ---------------------------------------------------------------------- Oxford Automotive, Inc., 10.125% Sr. Unsec. Sub. Nts., 6/15/07 1,000,000 1,056,250 - ---------------------------------------------------------------------- Protection One Alarm Monitoring, Inc.: 0%/13.625% Sr. Disc. Nts., 6/30/05(9) 600,000 648,000 6.75% Cv. Gtd. Sr. Sub. Nts., 9/15/03 950,000 1,126,938 ------------ 3,906,938 - ---------------------------------------------------------------------- RETAIL - 2.8% - ---------------------------------------------------------------------- SPECIALTY RETAILING - 0.4% Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03 630,000 683,550 - ---------------------------------------------------------------------- Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03(2) 95,000 100,225 - ---------------------------------------------------------------------- Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07(2) 300,000 307,500 - ---------------------------------------------------------------------- Specialty Retailers, Inc., 8.50% Gtd. Sr. Nts., 7/15/05 145,000 148,625 ------------ 1,239,900 - ---------------------------------------------------------------------- SUPERMARKETS - 2.4% Fleming Cos., Inc.: 10.50% Sr. Sub. Nts., 12/1/04(4) 475,000 499,938 10.625% Sr. Sub. Nts., 7/31/07(4) 1,600,000 1,696,000 - ---------------------------------------------------------------------- Ralph's Grocery Co., 10.45% Sr. Nts., 6/15/04 1,100,000 1,237,500 - ---------------------------------------------------------------------- Randall's Food Markets, Inc., 9.375% Sr. Sub. Nts., 7/1/07(4) 1,575,000 1,638,000 - ---------------------------------------------------------------------- Shoppers Food Warehouse Corp., 9.75% Sr. Nts., 6/15/04(4) 1,000,000 1,025,000
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- SUPERMARKETS (CONTINUED) Stater Brothers Holdings, Inc., 9% Sr. Unsec. Sub. Nts., 7/1/04 $ 750,000 $ 787,500 ------------ 6,883,938 - ---------------------------------------------------------------------- TECHNOLOGY - 14.0% - ---------------------------------------------------------------------- INFORMATION TECHNOLOGY - 8.4% Amphenol Corp., 9.875% Sr. Sub. Nts., 5/15/07 275,000 292,875 - ---------------------------------------------------------------------- CellNet Data Systems, Inc., 0%/14% Sr. Disc. Nts., 10/1/07(4)(9) 1,919,000 901,930 - ---------------------------------------------------------------------- Cellular Communications International, Inc., Zero Coupon Sr. Disc. Nts., 12.52%, 8/15/00(8) 2,315,000 1,863,575 - ---------------------------------------------------------------------- Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03(9) 2,000,000 2,015,000 - ---------------------------------------------------------------------- Clearnet Communications, Inc., 0%/14.75% Sr. Disc. Nts., 12/15/05(9) 575,000 455,688 - ---------------------------------------------------------------------- Computervision Corp., 11.375% Sr. Sub. Nts., 8/15/99 155,000 156,744 - ---------------------------------------------------------------------- Concentic Network Corp., Units (each unit consists of $1,000 principal amount of 12.75% sr. nts., 12/15/07 and one warrant to purchase 6.34 shares of common stock)(4)(12) 615,000 632,681 - ---------------------------------------------------------------------- Consorcio Ecuatoriano de Telecom SA, 14% Nts., 5/1/02(2) 15,000 15,150 - ---------------------------------------------------------------------- Crown Castle International Corp., 0%/10.625% Sr. Disc. Nts., 11/15/07(4)(9) 800,000 502,000 - ---------------------------------------------------------------------- Details, Inc., 10% Sr. Sub. Nts., 11/15/05(4) 600,000 616,500 - ---------------------------------------------------------------------- Dial Call Communications, Inc., 0%/12.25% Sr. Disc. Nts., 4/15/04(9) 1,200,000 1,149,000 - ---------------------------------------------------------------------- DII Group, Inc., 8.50% Sr. Sub. Nts., 9/15/07(4) 115,000 113,275 - ---------------------------------------------------------------------- Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 600,000 612,000 - ---------------------------------------------------------------------- Geotek Communications, Inc., 0%/15% Sr. Sec. Disc. Nts., 7/15/05(9) 250,000 146,250 - ---------------------------------------------------------------------- Iridium LLC/Iridium Capital Corp., 11.25% Sr. Nts., 7/15/05(4) 500,000 492,500 - ---------------------------------------------------------------------- Metrocall, Inc., 9.75% Sr. Sub. Nts., 11/1/07(4) 175,000 173,688 - ---------------------------------------------------------------------- Microcell Telecommunications, Inc.: 0%/11.125% Sr. Disc. Nts., 10/15/07(4)(9) CAD 1,085,000 428,384 0%/14% Sr. Disc. Nts., Series B, 6/1/06(9) 1,000,000 675,000 - ---------------------------------------------------------------------- Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(9) 500,000 368,750 - ---------------------------------------------------------------------- Nextel Communications, Inc.: 0%/10.65% Sr. Disc. Nts., 9/15/07(4)(9) 2,000,000 1,270,000 0%/11.50% Sr. Disc. Nts., 9/1/03(9) 700,000 700,000 0%/9.75% Sr. Disc. Nts., 10/31/07(4)(9) 1,775,000 1,091,625 - ---------------------------------------------------------------------- Occidente y Caribe Celular SA, 0%/14% Sr. Disc. Nts., Series B, 3/15/04(9) 300,000 226,500 - ---------------------------------------------------------------------- Omnipoint Corp.: 11.625% Sr. Nts., 8/15/06 245,000 259,700 11.625% Sr. Nts., Series A, 8/15/06 620,000 657,200 - ---------------------------------------------------------------------- ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 600,000 654,000 - ---------------------------------------------------------------------- Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(9) 800,000 598,000 - ---------------------------------------------------------------------- Price Communications Cellular Holdings, Inc., 0%/13.50% Sr. Disc. Nts., Series A, 8/1/07(2)(9) 1,000,000 635,000 - ---------------------------------------------------------------------- Price Communications Wireless, Inc., 11.75% Sr. Sub. Nts., 7/15/07(4) 325,000 354,250
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- INFORMATION TECHNOLOGY (CONTINUED) PriCellular Wireless Corp.: 0%/12.25% Sr. Sub. Disc. Nts., 10/1/03(9) $ 500,000 $ 515,000 0%/14% Sr. Sub. Disc. Nts., 11/15/01(9) 2,050,000 2,285,750 10.75% Sr. Nts., 11/1/04 605,000 657,938 - ---------------------------------------------------------------------- Real Time Data, Inc., Units (each unit consists of $1,000 principal amount of 0%/13.50% sub. disc. nts., 8/15/06 and one warrant to purchase six ordinary shares)(2)(9)(12) 1,000,000 380,000 - ---------------------------------------------------------------------- Star Choice Communications, Inc., Units (each unit consists of $1,000 principal amount of 13% sr. sec. nts., 12/15/05 and one warrant to buy common stock)(12) 700,000 721,000 - ---------------------------------------------------------------------- Teletrac, Inc., 14% Sr. Nts., 8/1/07(4) 170,000 162,350 - ---------------------------------------------------------------------- Tracor, Inc., 8.50% Sr. Sub. Nts., 3/1/07 300,000 309,000 - ---------------------------------------------------------------------- Unisys Corp., 11.75% Sr. Nts., 10/15/04 250,000 286,875 - ---------------------------------------------------------------------- USA Mobile Communications, Inc. II: 14% Sr. Nts., 11/1/04 405,000 449,550 9.50% Sr. Nts., 2/1/04 100,000 98,000 - ---------------------------------------------------------------------- Wavetek Corp., 10.125% Sr. Sub. Nts., 6/15/07 475,000 486,875 ------------ 24,409,603 - ---------------------------------------------------------------------- TELECOMMUNICATIONS/TECHNOLOGY - 5.6% American Communications Services, Inc., 13.75% Sr. Nts., 7/15/07(4) 325,000 386,750 - ---------------------------------------------------------------------- Brooks Fiber Properties, Inc.: 0%/10.875% Sr. Disc. Nts., 3/1/06(9) 550,000 459,250 0%/11.875% Sr. Disc. Nts., 11/1/06(9) 420,000 338,100 10% Sr. Nts., 6/1/07 800,000 924,000 - ---------------------------------------------------------------------- BTI Telecom Corp., 10.50% Sr. Nts., 9/15/07(4) 250,000 256,250 - ---------------------------------------------------------------------- Call-Net Enterprises, Inc.: 0%/9.27% Sr. Disc. Nts., 8/15/07(9) 675,000 460,688 8.375% Sr. Nts., 8/15/07 CAD 100,000 73,383 - ---------------------------------------------------------------------- COLT Telecom Group plc: 10.125% Sr. Nts., 11/30/07 GBP 400,000 671,324 8.875% Sr. Nts., 11/30/07 DEM 250,000 141,734 Units (each unit consists of $1,000 principal amount of 0%/12% sr. disc. nts., 12/15/06 and one warrant to purchase 7.8 ordinary shares)(9)(12) 1,750,000 1,365,000 - ---------------------------------------------------------------------- Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc. Debs., 11/15/07(9) 575,000 468,625 - ---------------------------------------------------------------------- Diamond Cable Communications plc, 0%/11.75% Sr. Disc. Nts., 12/15/05(9) 600,000 466,500 - ---------------------------------------------------------------------- GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub. Disc. Nts., 12/15/05(4)(9) 178,000 136,726 - ---------------------------------------------------------------------- GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(9) 775,000 596,750 - ---------------------------------------------------------------------- ICG Holdings, Inc.: 0%/12.50% Gtd. Sr. Disc. Nts., 5/1/06(9) 115,000 86,825 0%/13.50% Sr. Disc. Nts., 9/15/05(9) 700,000 570,500 - ---------------------------------------------------------------------- Intermedia Communications, Inc.: 0%/11.25% Sr. Disc. Nts., Series B, 7/15/07(9) 1,465,000 1,051,138
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- TELECOMMUNICATIONS/TECHNOLOGY (CONTINUED) Intermedia Communications, Inc.: (Continued) 8.50% Sr. Nts., 1/15/08(4) $ 500,000 $ 502,500 8.875% Sr. Nts., 11/1/07(4) 490,000 504,700 - ---------------------------------------------------------------------- McLeodUSA, Inc., 0%/10.50% Sr. Disc. Nts., 3/1/07(9) 550,000 398,750 - ---------------------------------------------------------------------- Metronet Communications Corp., 0%/10.75% Sr. Disc. Nts., 11/1/07(4)(9) 700,000 432,250 - ---------------------------------------------------------------------- NEXTLINK Communications, Inc., 9.625% Sr. Nts., 10/1/07 1,100,000 1,144,000 - ---------------------------------------------------------------------- NTL, Inc.: 0%/10.875% Sr. Deferred Coupon Nts., 10/15/03(9) 100,000 95,000 10% Sr. Nts., 2/15/07 400,000 423,000 - ---------------------------------------------------------------------- Petersburg Long Distance, Inc.: 9% Cv. Sub. Nts., 6/1/06(4) 170,000 176,163 Units (each unit consists of $1,000 principal amount of 0%/14% sr. disc. nts., 6/1/04 and one warrant to purchase 34 ordinary shares)(4)(9)(12) 1,150,000 1,098,250 - ---------------------------------------------------------------------- Qwest Communications International, Inc., 0%/9.47% Sr. Disc. Nts., 10/15/07(4)(9) 2,100,000 1,428,000 - ---------------------------------------------------------------------- Teleport Communications Group, Inc., 0%/11.125% Sr. Disc. Nts., 7/1/07(9) 1,650,000 1,348,875 - ---------------------------------------------------------------------- Telewest Communications plc, 0%/11% Sr. Disc. Debs., 10/1/07(9) 290,000 226,563 - ---------------------------------------------------------------------- UNIFI Communications, Inc., 14% Sr. Nts., 3/1/04 260,000 205,400 ------------ 16,436,994 - ---------------------------------------------------------------------- TRANSPORTATION - 2.1% - ---------------------------------------------------------------------- RAILROADS - 0.8% Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts., Series B, 12/15/03(9) 2,500,000 2,200,000 - ---------------------------------------------------------------------- SHIPPING - 0.8% Navigator Gas Transport plc: 10.50% First Priority Ship Mtg. Nts., 6/30/07(4) 1,125,000 1,198,125 Units (each unit consists of $1,000 principal amount of 12% second priority ship mtg. nts., 6/30/07 and 7.66 warrants)(4)(12) 875,000 988,750 - ---------------------------------------------------------------------- Trico Marine Services, Inc., 8.50% Gtd. Sr. Nts., 8/1/05(4) 225,000 229,219 ------------ 2,416,094 - ---------------------------------------------------------------------- TRUCKING - 0.5% Coach USA, Inc., 9.375% Gtd. Sr. Sub. Nts., Series B, 7/1/07 960,000 993,600 - ---------------------------------------------------------------------- Road King Infrastructure Finance (1997) Ltd., 9.50% Gtd. Unsec. Unsub. Bonds, 7/15/07(2) 200,000 166,000 - ---------------------------------------------------------------------- Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(2) 456,092 377,416 ------------ 1,537,016 - ---------------------------------------------------------------------- UTILITIES - 0.7% - ---------------------------------------------------------------------- ELECTRIC UTILITIES - 0.7% Calpine Corp.: 8.75% Sr. Nts., 7/15/07(4) 545,000 558,625 9.25% Sr. Nts., 2/1/04 135,000 138,375 - ---------------------------------------------------------------------- El Paso Electric Co., 9.40% First Mtg. Bonds, Series E, 5/1/11 800,000 904,000
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ---------------------------------------------------------------------- ELECTRIC UTILITIES (CONTINUED) Panda Global Energy Co., 12.50% Sr. Nts., 4/15/04(2) $ 460,000 $ 420,900 - ---------------------------------------------------------------------- Subic Power Corp., 9.50% Sr. Sec. Nts., 12/28/08 128,965 123,192 ------------ 2,145,092 ------------ Total Corporate Bonds and Notes (Cost $161,209,728) 167,452,404 SHARES - ---------------------------------------------------------------------- COMMON STOCKS - 1.0% - ---------------------------------------------------------------------- Celcaribe SA(2)(13) 121,950 609,750 - ---------------------------------------------------------------------- CellNet Data Systems, Inc.(13) 4,800 37,200 - ---------------------------------------------------------------------- Coinstar, Inc.(13) 5,250 47,906 - ---------------------------------------------------------------------- ECM Fund, L.P.I.(2) 150 165,375 - ---------------------------------------------------------------------- EchoStar Communications Corp., Cl. A(13) 4,000 67,000 - ---------------------------------------------------------------------- Equitable Bag, Inc.(2)(13) 3,723 18,615 - ---------------------------------------------------------------------- Grand Union Co.(13) 20,511 43,586 - ---------------------------------------------------------------------- Gulfstream Holding, Inc.(13) 56 -- - ---------------------------------------------------------------------- J. Ray McDermott SA(13) 10,965 471,495 - ---------------------------------------------------------------------- Omnipoint Corp.(2)(13) 46,875 1,040,918 - ---------------------------------------------------------------------- Optel, Inc.(2)(13) 945 10 - ---------------------------------------------------------------------- Station Casinos, Inc.(13) 5,000 50,938 - ---------------------------------------------------------------------- Vail Resorts, Inc.(13) 14,010 363,384 - ---------------------------------------------------------------------- Walter Industries, Inc.(13) 6,455 133,134 ------------ Total Common Stocks (Cost $1,989,139) 3,049,311 - ---------------------------------------------------------------------- PREFERRED STOCKS - 4.6% - ---------------------------------------------------------------------- AmeriKing, Inc., 13% Cum. Sr. Exchangeable Preferred Stock, Non-Vtg.(2)(13) 455 12,171 - ---------------------------------------------------------------------- BankUnited Capital Trust, 10.25% Redeemable Trust Preferred Securities(2) 750,000 774,375 - ---------------------------------------------------------------------- California Federal Bank, 11.50% Non-Cum., Non-Vtg. 6,000 679,500 - ---------------------------------------------------------------------- CGA Group Ltd., Preferred Stock, Series A(2)(13) 62,000 1,550,000 - ---------------------------------------------------------------------- Clark USA, Inc., 11.50% Cum. Preferred Stock(4)(14) 385 409,062 - ---------------------------------------------------------------------- CRIIMI MAE, Inc., 10.875% Cum. Cv. Preferred Stock, Series B 14,000 478,625 - ---------------------------------------------------------------------- Crown American Realty Trust, 11% Cum. Non-Vtg. Preferred, Series A 4,500 235,125 - ---------------------------------------------------------------------- EchoStar Communications Corp., 12.125% Sr. Redeemable Exchangeable Preferred Stock, Series B(4)(13)(14) 825 864,188 - ---------------------------------------------------------------------- El Paso Electric Co., 11.40% Preferred Stock, Series A(14) 9,049 1,002,177 - ---------------------------------------------------------------------- Fidelity Federal Bank FSB Glendale California, l2% Non-Cum. Exchangeable Perpetual Preferred Stock, Series A(2) 20 555 - ---------------------------------------------------------------------- Golden State Bancorp, 8.75% Cv. Preferred Stock, Series A 6,500 592,313 - ---------------------------------------------------------------------- ICG Holdings, Inc., 14.25% Exchangeable Preferred Stock 230 269,100
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ---------------------------------------------------------------------- PREFERRED STOCKS (CONTINUED) - ---------------------------------------------------------------------- Intermedia Communications, Inc., 13.50% Exchangeable Preferred Stock, Series B(14) 280 $ 339,500 - ---------------------------------------------------------------------- Kelley Oil & Gas Corp., $2.625 Cv. 15,300 336,600 - ---------------------------------------------------------------------- Navistar International Corp., $6.00 Cv., Series G 2,500 149,375 - ---------------------------------------------------------------------- NEXTLINK Communications, Inc., 14% Sr. Exchangeable Preferred(14) 17,669 1,099,895 - ---------------------------------------------------------------------- Prime Retail, Inc., 8.50% Cv. Preferred Stock, Series B 14,500 348,000 - ---------------------------------------------------------------------- PRIMEDIA, Inc.: 11.625% Preferred Stock, Series B(14) 8,668 936,144 9.20% Preferred Stock, Series E(2)(13) 2,500 250,625 - ---------------------------------------------------------------------- SD Warren Co., 14% Cum. Exchangeable, Series B(13) 22,000 1,083,500 - ---------------------------------------------------------------------- SFX Broadcasting, Inc., 12.625% Cum., Series E, Non-Vtg.(14) 212 242,210 - ---------------------------------------------------------------------- Spanish Broadcasting Systems, Inc., 14.25% Cum. Sr. Exchangeable Preferred Stock, Non-Vtg.(4)(14) 500 531,250 - ---------------------------------------------------------------------- Walden Residential Properties, Inc.: 9.16% Cv. Preferred Stock, Series B 30,000 870,000 9.20% Sr. Preferred Stock 13,000 333,125 ------------ Total Preferred Stocks (Cost $12,064,850) 13,387,415 - ---------------------------------------------------------------------- OTHER SECURITIES - 0.0% - ---------------------------------------------------------------------- Intermedia Communications, Inc., Depositary Shares representing one one-hundredth 7% Cum. Cv. Jr. Preferred Stock, Series E, Non-Vtg. (4)(13) (Cost $137,505) 5,660 160,602 UNITS - ---------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.4% - ---------------------------------------------------------------------- American Communications Services, Inc. Wts., Exp. 11/05(2) 475 45,362 - ---------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99(2) 6,000 60 - ---------------------------------------------------------------------- Ames Department Stores, Inc., Litigation Trust(2) 39,658 398 - ---------------------------------------------------------------------- Australis Media Ltd. Wts., Exp. 5/00(2) 125 -- - ---------------------------------------------------------------------- Capital Gaming International, Inc. Wts., Exp. 2/99(2) 21,112 -- - ---------------------------------------------------------------------- CellNet Data Systems, Inc. Wts., Exp. 6/02(2) 1,919 3,838 - ---------------------------------------------------------------------- Cellular Communications International, Inc. Wts., Exp. 8/03(2) 2,920 49,640 - ---------------------------------------------------------------------- CGA Group Ltd. Wts., Exp. 12/49(2) 62,000 31,000 - ---------------------------------------------------------------------- Clearnet Communications, Inc. Wts., Exp. 9/05 660 3,795 - ---------------------------------------------------------------------- Eye Care Centers of America, Inc. Wts., Exp. 10/03(2) 630 2,205 - ---------------------------------------------------------------------- Foamex LP/JPS Automotive Corp. Wts., Exp. 7/99(2) 500 10,000 - ---------------------------------------------------------------------- Gaylord Container Corp. Wts., Exp. 11/02 14,410 82,857 - ---------------------------------------------------------------------- Geotek Communications, Inc. Wts., Exp. 7/05(2) 52,500 52,500 - ---------------------------------------------------------------------- Gothic Energy Corp. Wts., Exp. 9/04 14,000 28,000 - ---------------------------------------------------------------------- ICG Communications, Inc. Wts., Exp. 9/05(2) 5,940 74,250 - ---------------------------------------------------------------------- IHF Capital, Inc. Wts.: Exp. 11/99(2) 250 40,000 Series I Wts., Exp. 11/99(2) 400 20,000
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE UNITS NOTE 1 - ---------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES (CONTINUED) - ---------------------------------------------------------------------- In-Flight Phone Corp. Wts., Exp. 8/02 950 $ -- - ---------------------------------------------------------------------- Jewel Recovery LP, Participation Units of Limited Partners' Interest 2,360 -- - ---------------------------------------------------------------------- Microcell Telecommunications, Inc.: Conditional Wts., Exp. 6/06(2) 3,200 2,000 Wts., Exp. 6/06(2) 3,200 41,600 - ---------------------------------------------------------------------- NEXTLINK Communications, Inc. Wts., Exp. 2/09(2) 16,000 160 - ---------------------------------------------------------------------- Occidente y Caribe Celular SA Wts., Exp. 3/04(2) 1,200 16,500 - ---------------------------------------------------------------------- Omnipoint Corp. Wts., Exp. 11/00(2) 7,500 166,547 - ---------------------------------------------------------------------- Orion Network Systems, Inc. Wts., Exp. 1/07(2) 800 10,000 - ---------------------------------------------------------------------- Price Communications Corp. Wts., Exp. 8/07(2) 3,440 34 - ---------------------------------------------------------------------- Protection One, Inc. Wts.: Exp. 11/03(2) 28,000 357,000 Exp. 6/05(2) 1,600 20,400 - ---------------------------------------------------------------------- Teletrac, Inc. Wts., Exp. 8/07(2) 170 935 - ---------------------------------------------------------------------- Trizec Hahn Corp. Wts., Exp. 7/99 3,970 18,449 - ---------------------------------------------------------------------- UNIFI Communications, Inc. Wts., Exp. 3/07(2) 260 390 - ---------------------------------------------------------------------- United International Holdings, Inc. Wts., Exp. 11/99(2) 1,440 17,280 ------------ Total Rights, Warrants and Certificates (Cost $369,452) 1,095,200 PRINCIPAL AMOUNT(1) - ---------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 8.7% - ---------------------------------------------------------------------- Bear Stearns High Yield Composite Index Linked Nts., 9%, 8/10/98 $ 15,000,000 15,000,000 - ---------------------------------------------------------------------- Canadian Imperial Bank of Commerce, U.S. Dollar Nts. Linked to the Ministry of Finance of the Russian Federation GKO, Zero Coupon, 9.86%, 9/17/98(8) 1,250,000 1,079,625 - ---------------------------------------------------------------------- Goldman Sachs Group, LP, Taiwanese Dollar Linked Nts., 5.75%, 6/12/98 40,000 40,392 - ---------------------------------------------------------------------- ING (U.S.) Financial Holdings Corp., PT Polysindo Linked Nts., Zero Coupon, 10.43%, 7/15/98(2)(8) 200,000 180,074 - ---------------------------------------------------------------------- Merrill Lynch & Co., Inc., U.S. Dollar Nts. Linked to the Ministry of Finance of Ukraine OVGZ's, Zero Coupon, 11.52%, 10/19/98(8) 235,000 198,316 - ---------------------------------------------------------------------- Morgan Guaranty Trust Co. of New York, 2 Times Leveraged Nts. on The Emerging Markets Bond Index, Zero Coupon: 5.781%, 1/29/98(8) 4,000,000 4,163,600 5.75%, 2/4/98(8) 1,500,000 1,614,300 5.906%, 5/20/98(8) 500,000 546,150 5.906%, 5/22/98(8) 500,000 517,350 - ---------------------------------------------------------------------- Shoshone Partners Loan Trust, 7.50% Sr. Nts., 5/31/02(2)(3) 1,979,000 2,098,870 ------------ Total Structured Instruments (Cost $25,091,176) 25,438,677
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE DATE STRIKE CONTRACTS NOTE 1 - ----------------------------------------------------------------------------- PUT OPTIONS PURCHASED - 0.0% - ----------------------------------------------------------------------------- The Emerging Bond Market Index Put Opt. (Cost $8,190) 2/98 $341.01 390 $ 4,758
PRINCIPAL AMOUNT(1) - --------------------------------------------------------------- REPURCHASE AGREEMENTS - 25.5% - --------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6.60%, dated 12/31/97, to be repurchased at $74,177,188 on 1/2/98, collateralized by U.S. Treasury Bonds, 8%-10.625%, 8/15/15-11/15/21, with a value of $54,960,145, and U.S. Treasury Nts., 5.875%-7.50%, 9/30/01-12/31/01, with a value of $20,712,858 (Cost $74,150,000) $74,150,000 74,150,000 - --------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $305,080,290) 108.3% 315,552,124 - --------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (8.3) (24,229,333) ----------- ------------- NET ASSETS 100.0% $291,322,791 ----------- ------------- ----------- -------------
1. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: ARP - Argentine Peso IDR - Indonesian Rupiah CAD - Canadian Dollar JPY - Japanese Yen DEM - German Mark TRL - Turkish Lira GBP - British Pound Sterling
2. Identifies issues considered to be illiquid or restricted - See Note 8 of Notes to Financial Statements. 3. Represents the current interest rate for a variable rate security. 4. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $53,485,828 or 18.36% of the Fund's net assets as of December 31, 1997. 5. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. 6. Represents the current interest rate for an increasing rate security. 7. When-issued security to be delivered and settled after December 31, 1997. 8. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 9. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 10. Non-income producing - issuer is in default of interest payment. 11. Securities with an aggregate market value of $3,871,217 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 12. Units may be comprised of several components, such as debt and equity and/or warrants to purchase equity at some point in the future. For units which represent debt securities, principal amount disclosed represents total underlying principal. 13. Non-income producing security. 14. Interest or dividend is paid in kind. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1997
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 51.1% - -------------------------------------------------------------------- GOVERNMENT AGENCY - 36.7% - -------------------------------------------------------------------- FHLMC/FNMA/SPONSORED - 23.4% Federal Home Loan Mortgage Corp.: Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 1092, Cl. K, 8.50%, 6/15/21 $ 3,000,000 $ 3,265,168 Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 151, Cl. F, 9%, 5/15/21 1,000,000 1,085,287 Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 1712, Cl. B, 6%, 3/15/09 1,000,000 975,000 Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 1714, Cl. M, 7%, 8/15/23 2,000,000 2,010,000 Government National Mortgage Assn., Gtd. Multiclass Mtg. Participation Certificates, Series 26, Cl. B, 6%, 5/25/15 6,499,999 6,327,947 Gtd. Multiclass Mtg. Participation Certificates, 7%, 4/1/26 4,748,012 4,800,953 Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1610, Cl. PM, 6.25%, 4/15/22 5,000,000 4,975,000 Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1914, Cl. G, 6.50%, 2/15/24 3,000,000 2,951,250 Interest-Only Stripped Mtg.-Backed Security, Series 177, Cl. B, 9.063%-10.208%, 7/1/26(2) 42,823,288 12,519,121 - -------------------------------------------------------------------- Federal National Mortgage Assn.: 6.50%, 3/1/11 827,885 833,358 7%, 1/1/13(3) 8,850,000 8,980,006 7%, 1/25/28(3) 45,450,000 45,776,785 7%, 11/1/25 1,173,366 1,186,449 7%, 4/1/04 225,391 225,418 7.50%, 1/1/08 258,228 265,451 7.50%, 1/1/26 4,554,544 4,670,822 7.50%, 4/1/08 223,295 229,541 8%, 5/1/17 605,292 634,177 Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, 8.75%, 11/25/05 2,773,827 2,922,213 Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust 1989-17, Cl. E, 10.40%, 4/25/19 1,229,023 1,383,413 Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust 1997-25, Cl. B, 7%, 12/18/22 1,370,000 1,387,044 Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust G93-31, Cl. PN, 7%, 9/25/23 5,000,000 5,163,355 Interest-Only Stripped Mtg.-Backed Security, Trust 276, Cl. 2, 12.324%, 10/1/24(2) 20,577,744 6,250,490 Principal-Only Stripped Mtg.-Backed Security, Trust 277-C1, 8.42%, 4/1/27(4) 3,912,338 3,061,405 ------------- 121,879,653 - -------------------------------------------------------------------- GNMA/GUARANTEED - 13.3% Government National Mortgage Assn.: 6%, 8/20/27 11,923,744 12,091,393 6.875%, 10/20/24 1,978,481 2,034,749
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------- GNMA/GUARANTEED (CONTINUED) Government National Mortgage Assn.: (Continued) 6.875%, 10/20/25 $ 3,701,878 $ 3,802,532 7%, 1/1/28(3) 24,025,000 24,201,688 7%, 1/15/09 299,533 306,642 7%, 5/15/09 312,455 319,576 7.50%, 1/15/27 2,922,203 2,995,054 7.50%, 12/1/27(3) 11,000,000 11,268,180 7.50%, 4/15/27 2,962,971 3,036,839 7.50%, 6/15/27 2,961,869 3,035,709 7.50%, 7/15/26 5,876,735 6,025,064 ------------- 69,117,426 - -------------------------------------------------------------------- PRIVATE - 14.4% - -------------------------------------------------------------------- COMMERCIAL - 10.9% Asset Securitization Corp.: Commercial Mtg. Pass-Through Certificates, Series 1997-MD7, Cl. A6, 8.11%, 1/13/30(5) 500,000 528,047 Interest-Only Stripped Mtg.-Backed Security, Series 1997-D5, Cl. A6, 7.184%, 2/14/41(2) 3,000,000 3,007,500 Interest-Only Stripped Mtg.-Backed Security, Series 1997-D5, Cl. PS1, 1.367%, 2/14/41(2) 18,750,000 2,036,133 - -------------------------------------------------------------------- BKB Commercial Mortgage Trust, Commercial Mtg. Obligations, Series 1997-C1, Cl. C, 7.45%, 10/25/00(6) 810,722 814,523 - -------------------------------------------------------------------- Capital Lease Funding Securitization LP, Interest-Only Stripped Mtg.-Backed Security, Series 1997-CTL1, 10.611%, 6/22/24(2)(6) 33,119,181 1,583,097 - -------------------------------------------------------------------- Commercial Mortgage Acceptance Corp., Collateralized Mtg. Obligation, Series 1996-C1, Cl. D, 7.658%, 12/25/20(5)(6) 2,500,000 2,583,594 - -------------------------------------------------------------------- CRIIMI MAE Trust I, Collateralized Mtg. Obligations, Series 1996-C1, Cl. A-2, 7.56%, 8/30/05(7) 2,000,000 2,047,188 - -------------------------------------------------------------------- FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates: Series 1994-C1, Cl. 2-D, 8.70%, 9/25/25(6) 1,500,000 1,556,250 Series 1994-C1, Cl. 2-E, 8.70%, 9/25/25(6) 1,500,000 1,558,050 - -------------------------------------------------------------------- First Union-Lehman Brothers Commercial Mortgage Trust, Interest-Only Stripped Mtg.-Backed Security, Series 1997-C1, 7.083%, 4/18/27(2) 17,027,190 1,327,921 - -------------------------------------------------------------------- General Motors Acceptance Corp.: Collateralized Mtg. Obligations, Series 1995-C2, Cl. D, 7.192%, 1/15/08 3,500,000 3,508,750 Interest-Only Stripped Mtg.-Backed Security, Series 1997-C1, Cl. X, 8.905%, 7/15/27(2) 19,479,477 1,960,122 - -------------------------------------------------------------------- GS Mortgage Securities Corp. II, Commercial Mtg. Pass-Through Certificates: Series 1997-CL1, Cl. F, 7.353%, 7/13/30 1,000,000 1,018,125 Series 1997-CL1, Cl. F, 7.823%, 7/13/30 4,000,000 4,143,750 - -------------------------------------------------------------------- Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates: Series 1996-C1, Cl. D, 7.42%, 4/25/28 2,000,000 2,039,531 Series 1997-C2, Cl. D, 7.075%, 12/10/29 4,000,000 3,988,750
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------- COMMERCIAL (CONTINUED) Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates: Series 1996-C1, Cl. D-1, 7.51%, 2/15/28(5)(6) $ 1,000,000 $ 1,016,563 Series 1997-XL1, Cl. F, 7.42%, 10/3/30(5) 2,500,000 2,510,938 - -------------------------------------------------------------------- NationsCommercial Corp., NB Commercial Mtg. Pass-Through Certificates: Series-DMC, Cl. B, 8.562%, 8/12/11(6) 1,600,000 1,697,000 Series-DMC, Cl. C, 8.921%, 8/12/11(7) 3,500,000 3,737,344 - -------------------------------------------------------------------- Potomac Gurnee Financial Corp., Commercial Mtg. Pass-Through Certificates: Series 1, Cl. C, 7.217%, 12/21/26(6) 250,000 255,825 Series 1, Cl. D, 7.683%, 12/21/26(6) 500,000 515,800 - -------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates: Series 1994-C1, Cl. C, 8%, 6/25/26 1,500,000 1,530,900 Series 1995-C1, Cl. D, 6.90%, 2/25/27 3,000,000 2,987,119 - -------------------------------------------------------------------- Structured Asset Securities Corp.: Commercial Mtg. Pass-Through Certificates, Series 1997-LLI, Cl. E, 7.30%, 10/20/34 4,000,000 4,027,500 Multiclass Pass-Through Certificates, Series 1996-C3, Cl. C, 7.375%, 6/25/30(5)(6) 3,000,000 3,029,063 Multiclass Pass-Through Certificates, Series 1996-CFL, Cl. D, 7.034%, 2/25/28 1,800,000 1,800,000 ------------- 56,809,383 - -------------------------------------------------------------------- MANUFACTURED HOUSING - 0.1% Green Tree Financial Corp., Series 1994-6, Cl. A3, 7.70%, 1/15/20 606,220 608,494 - -------------------------------------------------------------------- MULTI-FAMILY - 0.5% Countrywide Funding Corp., Mtg. Pass-Through Certificates, Series 1993-12, Cl. B1, 6.625%, 2/25/24 1,000,000 971,044 - -------------------------------------------------------------------- Merrill Lynch Trust, Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 43, Cl. E, 6.50%, 8/27/15 500,000 497,810 - -------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1991-M5, Cl. A, 9%, 3/25/17 1,226,291 1,240,916 ------------- 2,709,770 - -------------------------------------------------------------------- OTHER - 0.1% GE Capital Mortgage Services, Inc., Series 1994-14, Cl. A1, 6.50%, 4/25/24 68,492 68,256 - -------------------------------------------------------------------- Salomon Brothers Mortgage Securities VI: Interest-Only Stripped Mtg.-Backed Security, Series 1987-3, Cl. B, 7.102%, 10/23/17(2) 111,586 31,820 Principal-Only Stripped Mtg.-Backed Security, Series 1987-3, Cl. A, 15.181%, 10/23/17(4) 113,751 96,866 ------------- 196,942 - -------------------------------------------------------------------- RESIDENTIAL - 2.8% Contimortgage Home Equity Loan Trust, Series 1995-2, Cl. A2, 7.95%, 4/15/10 25,452 25,437 - -------------------------------------------------------------------- CS First Boston Mortgage Securities Corp., Mtg. Pass-Through Certificates, Series 1997-C1, Cl. E, 7.50%, 3/1/11(6) 4,500,000 4,658,850 - -------------------------------------------------------------------- First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates, Series 1997-CHL1, 8.116%, 7/25/06(5)(6) 4,024,000 4,225,602 - -------------------------------------------------------------------- Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates: Series 1997-HF1, Cl. E, 7.55%, 7/15/29(6) 1,500,000 1,518,984 Series 1997-WF1, Cl. E, 7.49%, 5/15/09(6) 1,000,000 1,008,750
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------- RESIDENTIAL (CONTINUED) NationsBank Trust, Lease Pass-Through Certificates, Series 1997A-1, 7.442%, 1/10/11(5) $ 2,500,000 $ 2,604,688 - -------------------------------------------------------------------- Ryland Mortgage Securities Corp. III, Sub. Bonds, Series 1992-A, Cl. 1A, 8.268%, 3/29/30(5) 346,586 352,435 ------------- 14,394,746 ------------- Total Mortgage-Backed Obligations (Cost $263,590,350) 265,716,414 - -------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 24.8% - -------------------------------------------------------------------- U.S. Treasury Bonds: 10.375%, 11/15/09(8) 500,000 625,156 10.375%, 11/15/12 500,000 664,844 12.75%, 11/15/10 1,000,000 1,427,501 7.25%, 5/15/16 33,000,000 37,578,783 9.25%, 2/15/16 8,300,000 11,259,473 - -------------------------------------------------------------------- U.S. Treasury Nts.: 5.75%, 11/30/02 3,667,000 3,671,587 6.375%, 8/15/02 14,250,000 14,624,077 6.50%, 10/15/06 8,840,000 9,259,909 6.625%, 5/15/07 4,000,000 4,236,252 6.75%, 6/30/99(9) 22,150,000 22,503,027 7.25%, 5/15/04 1,000,000 1,079,688 7.25%, 8/15/04 13,665,000 14,775,295 7.50%, 11/15/01 3,150,000 3,341,955 7.875%, 1/15/98 1,900,000 1,902,377 9.25%, 8/15/98(9) 2,000,000 2,044,376 ------------- Total U.S. Government Obligations (Cost $124,042,603) 128,994,300
- ------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 0.7% - ------------------------------------------------------------------------- Lithuania (Republic of) Bonds, 7.125%, 7/22/02(6) 950,000 930,990 - ------------------------------------------------------------------------- Ontario, Canada (Province of) Bonds, 8%, 10/17/01 750,000 798,300 - ------------------------------------------------------------------------- PT Hutama Karya Medium-Term Nts., Zero Coupon, 27.053%, 3/17/98(10) IDR 1,000,000,000 168,151 - ------------------------------------------------------------------------- South Africa (Republic of) Bonds: Series 150, 12%, 2/28/05 ZAR 4,777,350 906,523 Series 162, 12.50%, 1/15/02 ZAR 3,665,780 724,547 Series 175, 9%, 10/15/02 ZAR 905,340 154,973 ------------- Total Foreign Government Obligations (Cost $3,878,519) 3,683,484 - ------------------------------------------------------------------------- LOAN PARTICIPATIONS - 0.2% - ------------------------------------------------------------------------- Colombia (Republic of) 1989-1990 Integrated Loan Facility Bonds, 6.75%, 7/1/01 (Cost $1,085,369)(5)(6) 1,143,214 1,091,770 - ------------------------------------------------------------------------- MUNICIPAL BONDS AND NOTES - 0.4% - ------------------------------------------------------------------------- Dade County, FL Educational Facilities Authority: Exchangeable Revenue Bonds, University of Miami, Prerefunded, MBIA Insured, 7.65%, 4/1/10 175,000 192,019
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------- MUNICIPAL BONDS AND NOTES (CONTINUED) - ------------------------------------------------------------------------- Dade County, FL Educational Facilities Authority: (Continued) Revenue Bonds, University of Miami, MBIA Insured, 7.65%, 4/1/10 $ 205,000 $ 223,144 Taxable Exchange Revenue Bonds, University of Miami, MBIA Insured, 7.65%, 4/1/10 120,000 130,621 - ------------------------------------------------------------------------- Pinole, CA Redevelopment Agency Tax Allocation Taxable Bonds, Pinole Vista Redevelopment, Series B, 8.35%, 8/1/17 670,000 712,887 - ------------------------------------------------------------------------- Port of Portland, OR Special Obligation Taxable Revenue Bonds, PAMCO Project, 9.20%, 5/15/22 500,000 607,190 ------------- Total Municipal Bonds and Notes (Cost $1,664,376) 1,865,861 - ------------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 34.4% - ------------------------------------------------------------------------- BASIC INDUSTRY - 1.3% - ------------------------------------------------------------------------- CHEMICALS - 0.4% Quantum Chemical Corp., 10.375% First Mtg. Nts., 6/1/03 2,100,000 2,203,589 - ------------------------------------------------------------------------- PAPER - 0.9% Boise Cascade Corp., 9.90% Nts., 3/15/00 750,000 803,701 - ------------------------------------------------------------------------- Fletcher Challenge Capital Canada, Inc., 7.75% Nts., 6/20/06 1,800,000 1,943,305 - ------------------------------------------------------------------------- Potlatch Corp., 9.46% Medium-Term Nts., 4/2/02 500,000 559,844 - ------------------------------------------------------------------------- Scotia Pacific Holding Co., 7.95% Timber Collateralized Nts., 7/20/15 1,412,832 1,466,254 ------------- 4,773,104 - ------------------------------------------------------------------------- CONSUMER RELATED - 3.1% - ------------------------------------------------------------------------- CONSUMER PRODUCTS - 1.3% Harman International Industries, Inc., 7.32% Nts., 7/1/07 5,000,000 5,218,230 - ------------------------------------------------------------------------- Procter & Gamble Co., 9.36% Debs., Series A, 1/1/21 500,000 644,266 - ------------------------------------------------------------------------- Toro Co., 7.125% Nts., 6/15/07 1,000,000 1,030,664 ------------- 6,893,160 - ------------------------------------------------------------------------- FOOD/BEVERAGES/TOBACCO - 0.5% Bass America, Inc., 6.75% Gtd. Nts., 8/1/99 750,000 762,071 - ------------------------------------------------------------------------- Coca-Cola Enterprises, Inc., 6.95% Debs., 11/15/26 1,000,000 1,015,027 - ------------------------------------------------------------------------- Gruma SA de CV, 7.625% Bonds, 10/15/07(7) 700,000 689,261 ------------- 2,466,359 - ------------------------------------------------------------------------- HEALTHCARE - 0.2% Roche Holdings, Inc., 2.75% Bonds, 4/14/00 1,250,000 1,171,875 - ------------------------------------------------------------------------- HOTEL/GAMING - 0.9% Circus Circus Enterprises, Inc., 6.75% Nts., 7/15/03 375,000 373,046 - ------------------------------------------------------------------------- Hilton Hotels Corp., 7.95% Sr. Nts., 4/15/07 4,000,000 4,306,608 ------------- 4,679,654 - ------------------------------------------------------------------------- TEXTILE/APPAREL - 0.2% Fruit of the Loom, Inc., 7% Debs., 3/15/11 1,097,000 1,081,372 - ------------------------------------------------------------------------- ENERGY - 3.9% - ------------------------------------------------------------------------- BP America, Inc., 10.875% Nts., 8/1/01 CAD 1,000,000 808,427 - ------------------------------------------------------------------------- Coastal Corp., 8.75% Sr. Nts., 5/15/99 500,000 516,919 - ------------------------------------------------------------------------- Colorado International Gas Corp., 10% Sr. Debs., 6/15/05 500,000 604,269
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------- ENERGY (CONTINUED) - ------------------------------------------------------------------------- Eastern Energy Ltd., 6.75% Sr. Nts., 12/1/06(7) $ 2,000,000 $ 2,013,104 - ------------------------------------------------------------------------- Enron Corp., 9.875% Debs., 6/15/03 375,000 434,418 - ------------------------------------------------------------------------- Enterprise Oil plc, 6.70% Sr. Nts., 9/15/07 4,000,000 4,108,420 - ------------------------------------------------------------------------- Global Marine, Inc., 7.125% Nts., 9/1/07(6) 8,000,000 8,080,000 - ------------------------------------------------------------------------- HNG Internorth/Enron Corp., 9.625% Debs., 3/15/06 500,000 600,241 - ------------------------------------------------------------------------- McDermott, Inc., 9.375% Nts., 3/15/02 400,000 425,942 - ------------------------------------------------------------------------- Mitchell Energy & Development Corp., 9.25% Sr. Nts., 1/15/02 55,000 60,515 - ------------------------------------------------------------------------- Saga Petroleum ASA, 7.25% Debs., 9/23/27 1,000,000 1,026,844 - ------------------------------------------------------------------------- Texaco Capital, Inc., 8.875% Gtd. Debs., 9/1/21 500,000 626,775 - ------------------------------------------------------------------------- TransCanada PipeLines Ltd., 9.875% Debs., 1/1/21 750,000 997,500 ------------- 20,303,374 - ------------------------------------------------------------------------- FINANCIAL SERVICES - 10.6% - ------------------------------------------------------------------------- BANKS & THRIFTS - 1.3% Banco Ganadero SA, 9.75% Medium-Term Nts., 8/26/99(7) 125,000 127,344 - ------------------------------------------------------------------------- BankAmerica Corp., 7.75% Sub. Nts., 7/15/02 750,000 793,961 - ------------------------------------------------------------------------- Banque Centrale de Tunisie, 7.50% Nts., 9/19/07 900,000 846,802 - ------------------------------------------------------------------------- Chase Manhattan Corp. (New), 10.125% Sub. Nts., 11/1/00 750,000 827,285 - ------------------------------------------------------------------------- Citicorp Capital I, 7.933% Gtd. Bonds, 2/15/27 2,000,000 2,138,990 - ------------------------------------------------------------------------- First Chicago Corp.: 11.25% Sub. Nts., 2/20/01 750,000 857,208 9% Sub. Nts., 6/15/99 150,000 156,123 - ------------------------------------------------------------------------- First Fidelity Bancorp, 8.50% Sub. Capital Nts., 4/1/98 850,000 854,519 - ------------------------------------------------------------------------- Suntrust Banks, Inc., 8.875% Debs., 2/1/98 500,000 501,029 ------------- 7,103,261 - ------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 5.6% Aeltus CBO II Ltd./Aeltus CBO II Corp., 7.982% Sr. Sec. Sub. Bonds, 8/6/09(6) 5,000,000 5,062,500 - ------------------------------------------------------------------------- American General Finance Corp., 5.875% Sr. Nts., 7/1/00 196,000 194,883 - ------------------------------------------------------------------------- Fleet Mtg. Group, Inc., 6.50% Nts., 9/15/99 500,000 503,650 - ------------------------------------------------------------------------- Ford Motor Credit Co., 6.75% Nts., 8/15/08 1,000,000 1,012,842 - ------------------------------------------------------------------------- Guangdong Enterprises Holdings Ltd., 8.875% Sr. Nts., 5/22/07(7) 610,000 563,829 - ------------------------------------------------------------------------- Household Finance Corp., 8.95% Debs., 9/15/99 500,000 522,488 - ------------------------------------------------------------------------- Household International BV, 6% Gtd. Sr. Nts., 3/15/99 131,000 131,269 - ------------------------------------------------------------------------- HSBC Americas Capital Trust II, 8.38% Capital Securities, 5/15/27(7) 3,000,000 3,198,993 - ------------------------------------------------------------------------- Merrill Lynch & Co., Inc.: 6.56% Nts., 12/16/07 2,000,000 2,010,162 6.875% Nts., 3/1/03 750,000 770,451 - ------------------------------------------------------------------------- Morgan Stanley, Dean Witter, Discover & Co., 7% Debs., 10/1/13 1,000,000 1,018,604 - ------------------------------------------------------------------------- Norsk Hydro AS, 8.75% Bonds, 10/23/01 1,000,000 1,077,500 - ------------------------------------------------------------------------- Penske Truck Leasing Co. LP, 7.75% Sr. Nts., 5/15/99 1,000,000 1,023,932
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------- DIVERSIFIED FINANCIAL (CONTINUED) Rank Group Finance plc, 6.75% Gtd. Nts., 11/30/04 $ 3,000,000 $ 3,010,500 - ------------------------------------------------------------------------- Salomon, Inc., 7.30% Nts., 5/15/02 1,000,000 1,035,115 - ------------------------------------------------------------------------- SunAmerica, Inc., 9.95% Debs., 2/1/12 3,000,000 3,765,333 - ------------------------------------------------------------------------- U.S. Leasing International, Inc., 6.625% Sr. Nts., 5/15/03 750,000 761,647 - ------------------------------------------------------------------------- Washington Mutual Capital I, 8.375% Gtd. Bonds, 6/1/27 3,000,000 3,271,428 ------------- 28,935,126 - ------------------------------------------------------------------------- INSURANCE - 3.7% Aetna Services, Inc., 7.125% Nts., 8/15/06 1,000,000 1,031,609 - ------------------------------------------------------------------------- Allmerica Capital I, 8.207% Debs., 2/3/27 2,000,000 2,209,596 - ------------------------------------------------------------------------- CNA Financial Corp., 6.25% Nts., 11/15/03 2,195,000 2,166,584 - ------------------------------------------------------------------------- Liberty Mutual Insurance Co., 7.697% Nts., 10/15/2097(6) 7,000,000 7,359,044 - ------------------------------------------------------------------------- Prudential Insurance Co. of America: 6.875% Nts., 4/15/03(7) 3,000,000 3,035,838 7.65% Surplus Nts., 7/1/07(7) 3,000,000 3,186,858 - ------------------------------------------------------------------------- SunAmerica, Inc., 9% Sr. Nts., 1/15/99 196,000 201,222 ------------- 19,190,751 - ------------------------------------------------------------------------- MANUFACTURING - 0.5% - ------------------------------------------------------------------------- AUTOMOTIVE - 0.5% Chrysler Corp., 7.40% Debs., 8/1/2097 2,000,000 2,141,498 - ------------------------------------------------------------------------- Johnson Controls, Inc., 7.70% Debs., 3/1/15 500,000 564,073 ------------- 2,705,571 - ------------------------------------------------------------------------- MEDIA - 4.2% - ------------------------------------------------------------------------- CABLE TELEVISION - 0.5% TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 2,200,000 2,445,617 - ------------------------------------------------------------------------- DIVERSIFIED MEDIA - 3.4% GSP I Corp., 10.15% First Mtg. Bonds, 6/24/10(7) 1,110,527 1,087,506 - ------------------------------------------------------------------------- News America Holdings, Inc., 10.125% Gtd. Sr. Debs., 10/15/12 500,000 591,928 - ------------------------------------------------------------------------- Time Warner Entertainment Co. LP, 8.375% Sr. Debs., 3/15/23 1,295,000 1,481,516 - ------------------------------------------------------------------------- Time Warner, Inc., 9.15% Debs., 2/1/23 12,000,000 14,791,788 ------------- 17,952,738 - ------------------------------------------------------------------------- ENTERTAINMENT/FILM - 0.1% Columbia Pictures Entertainment, Inc., 9.875% Sr. Sub. Nts., 2/1/98 500,000 501,292 - ------------------------------------------------------------------------- PUBLISHING/PRINTING - 0.2% Reed Elsevier, Inc., 6.625% Nts., 10/15/23(7) 600,000 587,754 - ------------------------------------------------------------------------- Reed Publishing (USA), Inc., 7.66% Medium-Term Nts., 2/19/99 500,000 508,750 ------------- 1,096,504 - ------------------------------------------------------------------------- OTHER - 3.0% - ------------------------------------------------------------------------- CONGLOMERATES - 0.2% Tenneco, Inc. (New): 10.20% Debs., 3/15/08 400,000 512,797
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------- CONGLOMERATES (CONTINUED) Tenneco, Inc. (New): (Continued) 8.075% Nts., 10/1/02 $ 650,000 $ 696,023 ------------- 1,208,820 - ------------------------------------------------------------------------- SERVICES - 2.8% Archer Daniels Midland Co., 7.125% Debs., 3/1/13 750,000 800,963 - ------------------------------------------------------------------------- Comcast Cable Communications, Inc., 8.125% Unsec. Nts., 5/1/04 5,000,000 5,404,590 - ------------------------------------------------------------------------- ENSCO International, Inc.: 6.75% Nts., 11/15/07 5,000,000 5,035,175 7.20% Nts., 11/15/27 3,000,000 3,055,386 ------------- 14,296,114 - ------------------------------------------------------------------------- RETAIL - 1.0% - ------------------------------------------------------------------------- SPECIALTY RETAILING - 1.0% Staples, Inc., 7.125% Sr. Nts., 8/15/07 5,000,000 5,104,230 - ------------------------------------------------------------------------- TECHNOLOGY - 3.4% - ------------------------------------------------------------------------- INFORMATION TECHNOLOGY - 0.8% U.S. Cellular Corp., 7.25% Nts., 8/15/07 4,000,000 4,088,556 - ------------------------------------------------------------------------- TELECOMMUNICATIONS/TECHNOLOGY - 2.6% Bell Cablemedia plc, 0%/11.95% Sr. Disc. Nts., 7/15/04(11) 2,100,000 1,984,500 - ------------------------------------------------------------------------- Shaw Communications, Inc., 8.54% Debs., 9/30/27 CAD 3,000,000 1,948,549 - ------------------------------------------------------------------------- U S West Capital Funding, Inc.: 7.30% Gtd. Unsec. Nts., 1/15/07 5,000,000 5,194,145 7.95% Gtd. Bonds, 2/1/2097 4,000,000 4,446,788 ------------- 13,573,982
- -------------------------------------------------------------------- TRANSPORTATION - 1.4% - -------------------------------------------------------------------- AIR TRANSPORTATION - 1.2% UAL Corp., 9.125% Debs., 1/15/12 5,000,000 6,015,535 - -------------------------------------------------------------------- RAILROADS - 0.2% Kansas City Southern Industries, Inc., 6.625% Nts., 3/1/05 750,000 758,272 - -------------------------------------------------------------------- Union Pacific Corp., 9.65% Medium-Term Nts., 4/17/00 400,000 429,143 ------------- 1,187,415 - -------------------------------------------------------------------- UTILITIES - 2.0% - -------------------------------------------------------------------- ELECTRIC UTILITIES - 0.9% Cleveland Electric Illuminating Co./Toledo Edison Co., 7.13% Sec. Nts., Series B, 7/1/07 3,000,000 3,173,586 - -------------------------------------------------------------------- Long Island Lighting Co., 7% Nts., 3/1/04 150,000 151,842 - -------------------------------------------------------------------- Public Service Co. of Colorado, 8.75% First Mtg. Bonds, 3/1/22 750,000 828,344 - -------------------------------------------------------------------- South Carolina Electric & Gas Co., 9% Mtg. Bonds, 7/15/06 500,000 583,366 ------------- 4,737,138 - -------------------------------------------------------------------- GAS UTILITIES - 0.5% Consolidated Natural Gas Co., 6.625% Debs., 12/1/13 1,000,000 1,018,392
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------- GAS UTILITIES (CONTINUED) National Fuel Gas Co., 7.75% Debs., 2/1/04 $ 500,000 $ 532,226 - -------------------------------------------------------------------- Texas Gas Transmission Corp., 8.625% Nts., 4/1/04 500,000 555,629 - -------------------------------------------------------------------- Washington Gas Light Co., 8.75% First Mtg. Bonds, 7/1/19 500,000 518,978 ------------- 2,625,225 - -------------------------------------------------------------------- TELEPHONE UTILITIES - 0.6% Alltel Corp., 6.50% Debs., 11/1/13 1,000,000 1,003,891 - -------------------------------------------------------------------- GTE Corp.: 8.85% Debs., 3/1/98 750,000 753,043 9.375% Debs., 12/1/00 500,000 541,604 - -------------------------------------------------------------------- Northern Telecom Ltd., 6.875% Nts., 10/1/02 500,000 513,475 ------------- 2,812,013 ------------- Total Corporate Bonds and Notes (Cost $175,107,227) 179,152,375 SHARES - -------------------------------------------------------------------- PREFERRED STOCKS - 0.6% - -------------------------------------------------------------------- Allstate Financing I, 7.95% Gtd. Quarterly Income Preferred Securities, Series A (Cost $3,000,000) 120,000 3,112,500 PRINCIPAL AMOUNT(1) - -------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 0.9% - -------------------------------------------------------------------- Canadian Imperial Bank of Commerce (New York Branch) Canadian Dollar Three Month Banker's Acceptance Linked Maximum Rate Nts., 8.66%, 4/13/98 $ 500,000 494,700 - -------------------------------------------------------------------- Canadian Imperial Bank of Commerce, U.S. Dollar Nts. Linked to the Ministry of Finance of the Russian Federation GKO, Zero Coupon, 9.857%, 9/17/98(10) 2,300,000 1,986,510 - -------------------------------------------------------------------- Goldman Sachs Group, LP: South Korean Won Linked Nts., 5.60%, 1/20/98 100,000 103,530 Taiwanese Dollar Linked Nts., 5.75%, 6/12/98 200,000 201,960 - -------------------------------------------------------------------- Lehman Brothers Holdings, Inc. Greek Drachma/Swiss Franc Linked Nts., Zero Coupon, 14.709%, 1/15/98(10) 800,000 832,000 - -------------------------------------------------------------------- Merrill Lynch & Co., Inc., Units, 9.75%, 6/15/99 (representing debt of Chemical Banking Corp., sub. capital nts., and equity of Citicorp, 7.75% preferred, series 22)(6) 1,000,000 1,172,800 - -------------------------------------------------------------------- Morgan Guaranty Trust Co. of New York, Japanese Government Bond 193 Currency Protected Bank Nts., 8.14%, 4/29/98 10,000 5,871 ------------- Total Structured Instruments (Cost $4,976,564) 4,797,371
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------- REPURCHASE AGREEMENTS - 2.6% - -------------------------------------------------------------------- Repurchase agreement with Smith, Barney, Harris, Upham & Co., Inc., 6.625%, dated 12/31/97, to be repurchased at $13,504,969 on 1/2/98, collateralized by U.S. Treasury Bonds, 8.875%-11.25%, 2/15/15-2/15/19, with a value of $13,829,656 (Cost $13,500,000) $ 13,500,000 $ 13,500,000 - -------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $590,845,008) 115.7% 601,914,075 - -------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (15.7) (81,836,047) --------------- ------------- NET ASSETS 100.0% $520,078,028 --------------- ------------- --------------- -------------
1. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: CAD - Canadian Dollar IDR - Indonesian Rupiah ZAR - South African Rand
2. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. 3. When-issued security to be delivered and settled after December 31, 1997. 4. Principal-Only Strips represent the right to receive the monthly principal payments on an underlying pool of mortgage loans. The value of these securities generally increases as interest rates decline and prepayment rates rise. The price of these securities is typically more volatile than that of coupon-bearing bonds of the same maturity. Interest rates disclosed represent current yields based upon the current cost basis and estimated timing of future cash flows. 5. Represents the current interest rate for a variable rate security. 6. Identifies issues considered to be illiquid or restricted - See Note 8 of Notes to Financial Statements. 7. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $20,275,019 or 3.90% of the Fund's net assets as of December 31, 1997. 8. A sufficient amount of securities has been designated to cover outstanding forward foreign currency exchange contracts. See Note 5 of Notes to Financial Statements. 9. Securities with an aggregate market value of $2,349,157 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 10. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 11. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1997
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- COMMON STOCKS - 88.0% - --------------------------------------------------------------- CONSUMER CYCLICALS - 13.5% - --------------------------------------------------------------- LEISURE & ENTERTAINMENT - 3.5% CKE Restaurants, Inc. 273,500 $11,521,187 - --------------------------------------------------------------- Landry's Seafood Restaurants, Inc.(1) 340,000 8,160,000 - --------------------------------------------------------------- Outback Steakhouse, Inc.(1) 150,000 4,312,500 - --------------------------------------------------------------- Signature Resorts, Inc.(1) 320,000 7,000,000 ------------ 30,993,687 - --------------------------------------------------------------- RETAIL: GENERAL - 2.1% Jones Apparel Group, Inc.(1) 219,600 9,442,800 - --------------------------------------------------------------- Nautica Enterprises, Inc.(1) 130,000 3,022,500 - --------------------------------------------------------------- North Face, Inc. (The)(1) 165,000 3,630,000 - --------------------------------------------------------------- Vans, Inc.(1) 150,000 2,268,750 ------------ 18,364,050 - --------------------------------------------------------------- RETAIL: SPECIALTY - 7.9% Cendant Corp.(1) 570,310 19,604,406 - --------------------------------------------------------------- Fred Meyer, Inc.(1) 170,000 6,183,750 - --------------------------------------------------------------- General Nutrition Cos., Inc. 550,000 18,700,000 - --------------------------------------------------------------- Linens 'N Things, Inc.(1) 300,500 13,109,312 - --------------------------------------------------------------- Petco Animal Supplies, Inc.(1) 330,000 7,920,000 - --------------------------------------------------------------- TJX Cos., Inc. 120,000 4,125,000 ------------ 69,642,468 - --------------------------------------------------------------- CONSUMER NON-CYCLICALS - 16.7% - --------------------------------------------------------------- HEALTHCARE/DRUGS - 3.0% BioChem Pharma, Inc.(1) 360,000 7,515,000 - --------------------------------------------------------------- Dura Pharmaceuticals, Inc.(1) 230,000 10,551,250 - --------------------------------------------------------------- Human Genome Sciences, Inc.(1) 120,000 4,770,000 - --------------------------------------------------------------- Incyte Pharmaceuticals, Inc.(1) 62,800 2,826,000 - --------------------------------------------------------------- Nuerocrine Biosciences, Inc.(1) 105,000 826,875 ------------ 26,489,125 - --------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 12.5% AmeriSource Health Corp., Cl. A(1) 136,600 8,025,250 - --------------------------------------------------------------- Covance, Inc.(1) 300,000 5,962,500 - --------------------------------------------------------------- ESC Medical Systems Ltd.(1) 292,100 11,318,875 - --------------------------------------------------------------- FPA Medical Management, Inc.(1) 460,000 8,567,500 - --------------------------------------------------------------- HEALTHSOUTH Corp.(1) 340,000 9,435,000 - --------------------------------------------------------------- Integ, Inc.(1) 111,500 446,000 - --------------------------------------------------------------- McKesson Corp. 70,000 7,573,125 - --------------------------------------------------------------- MedPartners, Inc.(1) 175,000 3,915,625
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES (CONTINUED) Parexel International Corp.(1) 235,000 $ 8,695,000 - --------------------------------------------------------------- Pediatrix Medical Group, Inc.(1) 200,000 8,550,000 - --------------------------------------------------------------- PhyCor, Inc.(1) 159,000 4,293,000 - --------------------------------------------------------------- Quintiles Transnational Corp.(1) 150,000 5,737,500 - --------------------------------------------------------------- Renal Treatment Centers, Inc.(1) 405,000 14,630,625 - --------------------------------------------------------------- Total Renal Care Holdings, Inc.(1) 454,333 12,494,157 ------------ 109,644,157 - --------------------------------------------------------------- HOUSEHOLD GOODS - 1.2% Blyth Industries, Inc.(1) 352,500 10,552,969 - --------------------------------------------------------------- ENERGY - 5.6% - --------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 5.6% Calpine Corp.(1) 232,500 3,458,437 - --------------------------------------------------------------- Coflexip SA, Sponsored ADR 80,000 4,440,000 - --------------------------------------------------------------- Cooper Cameron Corp.(1) 80,000 4,880,000 - --------------------------------------------------------------- Diamond Offshore Drilling, Inc. 153,800 7,401,625 - --------------------------------------------------------------- Global Industries Ltd.(1) 300,000 5,100,000 - --------------------------------------------------------------- Halliburton Co. 200,000 10,387,500 - --------------------------------------------------------------- Nabors Industries, Inc.(1) 200,000 6,287,500 - --------------------------------------------------------------- Santa Fe International Corp. 180,000 7,323,750 ------------ 49,278,812 - --------------------------------------------------------------- FINANCIAL - 11.9% - --------------------------------------------------------------- BANKS - 1.4% Providian Financial Corp. 120,000 5,422,500 - --------------------------------------------------------------- TCF Financial Corp. 200,000 6,787,500 ------------ 12,210,000 - --------------------------------------------------------------- DIVERSIFIED FINANCIAL - 3.7% Affiliated Managers Group, Inc.(1) 190,000 5,510,000 - --------------------------------------------------------------- Arm Financial Group, Inc., Cl. A 300,000 7,912,500 - --------------------------------------------------------------- Associates First Capital Corp., Cl. A 161,000 11,451,125 - --------------------------------------------------------------- C.I.T. Group, Inc., Cl. A(1) 234,700 7,569,075 ------------ 32,442,700 - --------------------------------------------------------------- INSURANCE - 6.8% ACE Ltd. 50,000 4,825,000 - --------------------------------------------------------------- CapMAC Holdings, Inc. 100,600 3,495,850 - --------------------------------------------------------------- Conseco, Inc. 300,000 13,631,250 - --------------------------------------------------------------- Everest Reinsurance Holdings, Inc. 250,000 10,312,500 - --------------------------------------------------------------- Executive Risk, Inc. 135,000 9,424,687 - --------------------------------------------------------------- EXEL Ltd. 70,000 4,436,250 - --------------------------------------------------------------- Frontier Insurance Group, Inc. 200,000 4,575,000
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- INSURANCE (CONTINUED) Travelers Property Casualty Corp., Cl. A 200,000 $ 8,800,000 ------------ 59,500,537 - --------------------------------------------------------------- INDUSTRIAL - 12.5% - --------------------------------------------------------------- INDUSTRIAL SERVICES - 10.0% AccuStaff, Inc.(1) 330,000 7,590,000 - --------------------------------------------------------------- Affiliated Computer Services, Inc., Cl. A(1) 200,000 5,262,500 - --------------------------------------------------------------- Allied Waste Industries, Inc.(1) 604,300 14,087,744 - --------------------------------------------------------------- American Disposal Services, Inc.(1) 175,400 6,402,100 - --------------------------------------------------------------- Cambridge Technology Partners, Inc.(1) 486,600 20,254,725 - --------------------------------------------------------------- CIBER, Inc.(1) 231,300 13,415,400 - --------------------------------------------------------------- Newpark Resources, Inc.(1) 346,800 6,069,000 - --------------------------------------------------------------- U.S. Rentals, Inc.(1) 181,500 4,265,250 - --------------------------------------------------------------- United Rentals, Inc.(1) 125,000 2,414,063 - --------------------------------------------------------------- USA Waste Services, Inc.(1) 196,600 7,716,550 ------------ 87,477,332 - --------------------------------------------------------------- MANUFACTURING - 2.5% Tyco International Ltd. 410,000 18,475,625 - --------------------------------------------------------------- U.S. Filter Corp.(1) 108,600 3,251,213 ------------ 21,726,838 - --------------------------------------------------------------- TECHNOLOGY - 27.8% - --------------------------------------------------------------- COMPUTER HARDWARE - 1.3% Telxon Corp. 480,000 11,460,000 - --------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 16.6% Aspen Technologies, Inc.(1) 315,700 10,812,725 - --------------------------------------------------------------- Cap Gemini SA 105,000 8,613,479 - --------------------------------------------------------------- Citrix Systems, Inc.(1) 240,000 18,240,000 - --------------------------------------------------------------- Compuware Corp.(1) 310,000 9,920,000 - --------------------------------------------------------------- Harbinger Corp.(1) 276,500 7,776,563 - --------------------------------------------------------------- HBO & Co. 380,000 18,240,000 - --------------------------------------------------------------- Hypercom Corp.(1) 183,200 2,587,700 - --------------------------------------------------------------- JDA Software Group, Inc.(1) 400,000 14,000,000 - --------------------------------------------------------------- Oracle Corp.(1) 100,000 2,231,250 - --------------------------------------------------------------- Rogue Wave Software, Inc.(1) 150,000 1,659,375 - --------------------------------------------------------------- Saville Systems Ireland plc, Sponsored ADR(1) 450,000 18,675,000 - --------------------------------------------------------------- Synopsys, Inc.(1) 275,000 9,831,250 - --------------------------------------------------------------- USWeb Corp.(1) 310,000 2,906,250 - --------------------------------------------------------------- Versant Object Technology Corp.(1) 225,000 3,107,813 - --------------------------------------------------------------- Visio Corp.(1) 440,000 16,885,000 ------------ 145,486,405
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- ELECTRONICS - 2.4% Lernout & Hauspie Speech Products NV(1) 177,500 $ 8,253,750 - --------------------------------------------------------------- Vitesse Semiconductor Corp.(1) 185,000 6,983,750 - --------------------------------------------------------------- Waters Corp.(1) 150,000 5,643,750 ------------ 20,881,250 - --------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 7.5% Advanced Fibre Communications, Inc.(1) 110,000 3,203,750 - --------------------------------------------------------------- Allen Telecom, Inc.(1) 121,200 2,234,625 - --------------------------------------------------------------- Comverse Technology, Inc.(1) 120,000 4,680,000 - --------------------------------------------------------------- Newbridge Networks Corp.(1) 210,000 7,323,750 - --------------------------------------------------------------- Nextel Communications, Inc., Cl. A(1) 350,000 9,100,000 - --------------------------------------------------------------- Pacific Gateway Exchange, Inc.(1) 50,000 2,690,625 - --------------------------------------------------------------- Scientific-Atlanta, Inc. 170,000 2,847,500 - --------------------------------------------------------------- Tel-Save Holdings, Inc.(1) 130,000 2,583,750 - --------------------------------------------------------------- Teledata Communications Ltd.(1) 234,800 4,285,100 - --------------------------------------------------------------- Tellabs, Inc.(1) 170,000 8,988,750 - --------------------------------------------------------------- Uniphase Corp.(1) 203,000 8,399,125 - --------------------------------------------------------------- WinStar Communications, Inc. 380,000 9,476,250 ------------ 65,813,225 ------------ Total Common Stocks (Cost $605,998,270) 771,963,555 PRINCIPAL AMOUNT - --------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES - 0.3% - --------------------------------------------------------------- United Waste Systems, Inc., 4.50% Cv. Sub. Nts., 6/1/01 (Cost $2,000,000)(2) $ 2,000,000 2,775,000 - --------------------------------------------------------------- REPURCHASE AGREEMENTS - 12.2% - --------------------------------------------------------------- Repurchase agreement with Smith, Barney, Harris, Upham & Co., Inc., 6.625%, dated 12/31/97, to be repurchased at $107,289,474 on 1/2/98, collateralized by U.S. Treasury Bonds, 8.875%-11.25%, 2/15/15-2/15/19, with a value of $109,868,933 (Cost $107,250,000) 107,250,000 107,250,000 - --------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $715,248,270) 100.5% 881,988,555 - --------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.5) (4,181,082 ) ------------ ------------ NET ASSETS 100.0% $877,807,473 ------------ ------------ ------------ ------------
1. Non-income producing security. 2. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $2,775,000 or 0.32% of the Fund's net assets as of December 31, 1997. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1997
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- COMMON STOCKS - 78.9% - --------------------------------------------------------------- BASIC MATERIALS - 2.2% - --------------------------------------------------------------- CHEMICALS - 2.2% Crompton & Knowles Corp. 38,200 $ 1,012,300 - --------------------------------------------------------------- Ferro Corp. 80,000 1,945,000 - --------------------------------------------------------------- Morton International, Inc. 127,000 4,365,625 - --------------------------------------------------------------- Praxair, Inc. 45,600 2,052,000 - --------------------------------------------------------------- Scotts Co. (The), Cl. A(1) 56,000 1,694,000 ------------ 11,068,925 - --------------------------------------------------------------- CONSUMER CYCLICALS - 14.0% - --------------------------------------------------------------- AUTOS & HOUSING - 2.4% Arvin Industries, Inc. 54,300 1,808,869 - --------------------------------------------------------------- Autoliv, Inc. 54,889 1,797,615 - --------------------------------------------------------------- Centex Corp. 39,000 2,454,562 - --------------------------------------------------------------- Furniture Brands International, Inc.(1) 60,100 1,232,050 - --------------------------------------------------------------- Magna International, Inc., Cl. A 22,000 1,381,875 - --------------------------------------------------------------- Pulte Corp. 22,000 919,875 - --------------------------------------------------------------- Toll Brothers, Inc.(1) 90,000 2,407,500 ------------ 12,002,346 - --------------------------------------------------------------- LEISURE & ENTERTAINMENT - 1.5% Callaway Golf Co. 82,200 2,347,837 - --------------------------------------------------------------- Carnival Corp., Cl. A 75,000 4,153,125 - --------------------------------------------------------------- Disney (Walt) Co. 7,000 693,437 ------------ 7,194,399 - --------------------------------------------------------------- MEDIA - 1.5% Chancellor Media Corp.(1) 30,000 2,238,750 - --------------------------------------------------------------- New York Times Co. 78,000 5,157,750 ------------ 7,396,500 - --------------------------------------------------------------- RETAIL: GENERAL - 4.1% CVS Corp. 114,500 7,335,156 - --------------------------------------------------------------- Dayton Hudson Corp. 30,000 2,025,000 - --------------------------------------------------------------- Federated Department Stores, Inc.(1) 65,000 2,799,062 - --------------------------------------------------------------- Jones Apparel Group, Inc.(1) 76,500 3,289,500 - --------------------------------------------------------------- Nautica Enterprises, Inc.(1) 62,000 1,441,500 - --------------------------------------------------------------- Tommy Hilfiger Corp.(1) 95,800 3,364,975 ------------ 20,255,193 - --------------------------------------------------------------- RETAIL: SPECIALTY - 4.5% Bed Bath & Beyond, Inc.(1) 21,000 808,500 - --------------------------------------------------------------- Cendant Corp.(1) 110,000 3,781,250 - --------------------------------------------------------------- Ethan Allen Interiors, Inc. 70,500 2,718,656
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- RETAIL: SPECIALTY (CONTINUED) Gap, Inc. 25,500 $ 903,656 - --------------------------------------------------------------- Intimate Brands, Inc., Cl. A 95,000 2,285,937 - --------------------------------------------------------------- Nine West Group, Inc.(1) 43,600 1,130,875 - --------------------------------------------------------------- Ross Stores, Inc. 60,000 2,182,500 - --------------------------------------------------------------- Stride Rite Corp. 35,000 420,000 - --------------------------------------------------------------- Tiffany & Co. 44,000 1,586,750 - --------------------------------------------------------------- TJX Cos., Inc. 92,000 3,162,500 - --------------------------------------------------------------- Williams-Sonoma, Inc.(1) 75,500 3,161,562 ------------ 22,142,186 - --------------------------------------------------------------- CONSUMER NON-CYCLICALS - 14.0% - --------------------------------------------------------------- FOOD - 4.3% Hershey Foods Corp. 20,000 1,238,750 - --------------------------------------------------------------- JP Foodservice, Inc.(1) 32,600 1,204,162 - --------------------------------------------------------------- Kroger Co.(1) 49,000 1,809,937 - --------------------------------------------------------------- McCormick & Co., Inc., Non-Vtg. 13,000 364,000 - --------------------------------------------------------------- Richfood Holdings, Inc. 87,200 2,463,400 - --------------------------------------------------------------- Safeway, Inc.(1) 152,000 9,614,000 - --------------------------------------------------------------- Smithfield Foods, Inc.(1) 82,000 2,706,000 - --------------------------------------------------------------- Suiza Foods Corp.(1) 29,750 1,771,984 ------------ 21,172,233 - --------------------------------------------------------------- HEALTHCARE/DRUGS - 3.8% Biogen, Inc.(1) 26,000 945,750 - --------------------------------------------------------------- Lilly (Eli) & Co. 74,180 5,164,782 - --------------------------------------------------------------- Pfizer, Inc. 90,000 6,710,625 - --------------------------------------------------------------- Schering-Plough Corp. 92,800 5,765,200 ------------ 18,586,357 - --------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 4.5% Becton, Dickinson & Co. 25,000 1,250,000 - --------------------------------------------------------------- HealthCare COMPARE Corp.(1) 70,800 3,619,650 - --------------------------------------------------------------- HEALTHSOUTH Corp.(1) 88,000 2,442,000 - --------------------------------------------------------------- Lincare Holdings, Inc.(1) 82,700 4,713,900 - --------------------------------------------------------------- Medtronic, Inc. 35,000 1,830,937 - --------------------------------------------------------------- Minimed, Inc.(1) 46,800 1,819,350 - --------------------------------------------------------------- Oxford Health Plans, Inc.(1) 54,800 852,825 - --------------------------------------------------------------- Renal Treatment Centers, Inc.(1) 50,000 1,806,250 - --------------------------------------------------------------- VISX, Inc.(1) 11,000 243,375 - --------------------------------------------------------------- WellPoint Health Networks, Inc.(1) 88,400 3,734,900 ------------ 22,313,187 - --------------------------------------------------------------- HOUSEHOLD GOODS - 0.2% Blyth Industries, Inc.(1) 25,000 748,437
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- TOBACCO - 1.2% Philip Morris Cos., Inc. 102,000 $ 4,621,875 - --------------------------------------------------------------- RJR Nabisco Holdings Corp. 40,000 1,500,000 ------------ 6,121,875 - --------------------------------------------------------------- ENERGY - 5.8% - --------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 3.8% BJ Services Co.(1) 25,000 1,798,437 - --------------------------------------------------------------- ENSCO International, Inc. 68,000 2,278,000 - --------------------------------------------------------------- Global Marine, Inc.(1) 100,000 2,450,000 - --------------------------------------------------------------- Halliburton Co. 89,800 4,663,987 - --------------------------------------------------------------- Nabors Industries, Inc.(1) 53,900 1,694,481 - --------------------------------------------------------------- Smith International, Inc.(1) 38,000 2,332,250 - --------------------------------------------------------------- Varco International, Inc.(1) 166,200 3,562,913 ------------ 18,780,068 - --------------------------------------------------------------- OIL-INTEGRATED - 2.0% Camco International, Inc. 48,500 3,088,844 - --------------------------------------------------------------- Mobil Corp. 18,200 1,313,813 - --------------------------------------------------------------- Phillips Petroleum Co. 33,000 1,604,625 - --------------------------------------------------------------- Royal Dutch Petroleum Co., NY Shares 10,000 541,875 - --------------------------------------------------------------- Texaco, Inc. 29,000 1,576,875 - --------------------------------------------------------------- USX-Marathon Group 58,000 1,957,500 ------------ 10,083,532 - --------------------------------------------------------------- FINANCIAL - 17.8% - --------------------------------------------------------------- BANKS - 5.6% Banc One Corp. 127,262 6,911,917 - --------------------------------------------------------------- BankBoston Corp. 23,000 2,160,563 - --------------------------------------------------------------- Barnett Banks, Inc. 38,000 2,731,250 - --------------------------------------------------------------- Chase Manhattan Corp. (New) 15,640 1,712,580 - --------------------------------------------------------------- Credito Italiano 1,320,000 4,072,746 - --------------------------------------------------------------- Fleet Financial Group, Inc. 20,000 1,498,750 - --------------------------------------------------------------- Greenpoint Financial Corp. 12,000 870,750 - --------------------------------------------------------------- Societe Generale 21,500 2,930,586 - --------------------------------------------------------------- Star Banc Corp. 43,500 2,495,813 - --------------------------------------------------------------- State Street Corp. 39,200 2,280,950 ------------ 27,665,905 - --------------------------------------------------------------- DIVERSIFIED FINANCIAL - 8.1% Associates First Capital Corp., Cl. A 55,000 3,911,875 - --------------------------------------------------------------- Countrywide Credit Industries, Inc. 10,000 428,750 - --------------------------------------------------------------- Fannie Mae 36,000 2,054,250 - --------------------------------------------------------------- Finova Group, Inc. 60,800 3,021,000 - --------------------------------------------------------------- Franklin Resources, Inc. 23,100 2,008,256
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- DIVERSIFIED FINANCIAL (CONTINUED) Freddie Mac 60,000 $ 2,516,250 - --------------------------------------------------------------- Green Tree Financial Corp. 128,000 3,352,000 - --------------------------------------------------------------- Merrill Lynch & Co., Inc. 44,000 3,209,250 - --------------------------------------------------------------- MGIC Investment Corp. 32,200 2,141,300 - --------------------------------------------------------------- Money Store, Inc. (The) 40,000 840,000 - --------------------------------------------------------------- Morgan Stanley, Dean Witter, Discover & Co. 40,200 2,376,825 - --------------------------------------------------------------- Price (T. Rowe) Associates, Inc. 30,500 1,917,688 - --------------------------------------------------------------- Schwab (Charles) Corp. 30,000 1,258,125 - --------------------------------------------------------------- Travelers Group, Inc. 203,499 10,963,509 ------------ 39,999,078 - --------------------------------------------------------------- INSURANCE - 4.1% ACE Ltd. 25,800 2,489,700 - --------------------------------------------------------------- Allstate Corp. 27,500 2,499,063 - --------------------------------------------------------------- Conseco, Inc. 90,000 4,089,375 - --------------------------------------------------------------- Equitable Cos., Inc. 69,000 3,432,750 - --------------------------------------------------------------- Executive Risk, Inc. 40,000 2,792,500 - --------------------------------------------------------------- Progressive Corp. 15,000 1,798,125 - --------------------------------------------------------------- SunAmerica, Inc. 78,500 3,355,875 ------------ 20,457,388 - --------------------------------------------------------------- INDUSTRIAL - 5.9% - --------------------------------------------------------------- ELECTRICAL EQUIPMENT - 0.7% Emerson Electric Co. 37,000 2,088,188 - --------------------------------------------------------------- General Electric Co. 18,000 1,320,750 ------------ 3,408,938 - --------------------------------------------------------------- INDUSTRIAL MATERIALS - 0.7% Rayonier, Inc. 32,400 1,379,025 - --------------------------------------------------------------- Southdown, Inc. 36,900 2,177,100 ------------ 3,556,125 - --------------------------------------------------------------- INDUSTRIAL SERVICES - 0.7% Corrections Corp. of America(1) 55,000 2,038,438 - --------------------------------------------------------------- Kent Electronics Corp.(1) 56,000 1,407,000 ------------ 3,445,438 - --------------------------------------------------------------- MANUFACTURING - 2.3% Aeroquip-Vickers, Inc. 35,000 1,717,188 - --------------------------------------------------------------- AGCO Corp. 25,200 737,100 - --------------------------------------------------------------- American Standard Cos., Inc.(1) 50,000 1,915,625 - --------------------------------------------------------------- Illinois Tool Works, Inc. 45,000 2,705,625 - --------------------------------------------------------------- MascoTech, Inc. 97,000 1,782,375 - --------------------------------------------------------------- Sealed Air Corp.(1) 38,000 2,346,500 ------------ 11,204,413
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- TRANSPORTATION - 1.5% Canadian Pacific Ltd. (New) 90,000 $ 2,452,500 - --------------------------------------------------------------- Kansas City Southern Industries, Inc. 153,000 4,857,750 ------------ 7,310,250 - --------------------------------------------------------------- TECHNOLOGY - 18.2% - --------------------------------------------------------------- COMPUTER HARDWARE - 5.7% Adaptec, Inc.(1) 167,200 6,207,300 - --------------------------------------------------------------- Cabletron Systems, Inc.(1) 87,000 1,305,000 - --------------------------------------------------------------- Compaq Computer Corp. 82,000 4,627,875 - --------------------------------------------------------------- EMC Corp.(1) 84,000 2,304,750 - --------------------------------------------------------------- Gateway 2000, Inc.(1) 80,600 2,629,575 - --------------------------------------------------------------- International Business Machines Corp. 37,000 3,868,813 - --------------------------------------------------------------- Quantum Corp.(1) 40,000 802,500 - --------------------------------------------------------------- Seagate Technology, Inc.(1) 180,000 3,465,000 - --------------------------------------------------------------- Sun Microsystems, Inc.(1) 36,000 1,435,500 - --------------------------------------------------------------- Western Digital Corp.(1) 85,000 1,365,313 ------------ 28,011,626 - --------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 7.3% BMC Software, Inc.(1) 58,400 3,832,500 - --------------------------------------------------------------- Computer Associates International, Inc. 39,000 2,062,125 - --------------------------------------------------------------- First Data Corp. 93,000 2,720,250 - --------------------------------------------------------------- Gartner Group, Inc., Cl. A(1) 91,000 3,389,750 - --------------------------------------------------------------- HBO & Co. 65,000 3,120,000 - --------------------------------------------------------------- Microsoft Corp.(1) 69,000 8,918,250 - --------------------------------------------------------------- Network Associates, Inc.(1) 75,900 4,013,213 - --------------------------------------------------------------- Peoplesoft, Inc.(1) 130,800 5,101,200 - --------------------------------------------------------------- Structural Dynamics Research Corp.(1) 60,600 1,363,500 - --------------------------------------------------------------- Sungard Data Systems, Inc.(1) 54,000 1,674,000 ------------ 36,194,788 - --------------------------------------------------------------- ELECTRONICS - 2.4% Analog Devices, Inc.(1) 28,333 784,470 - --------------------------------------------------------------- LSI Logic Corp.(1) 50,000 987,500 - --------------------------------------------------------------- Sanmina Corp.(1) 49,000 3,319,750 - --------------------------------------------------------------- Teradyne, Inc.(1) 30,000 960,000 - --------------------------------------------------------------- Vitesse Semiconductor Corp.(1) 48,200 1,819,550 - --------------------------------------------------------------- Waters Corp.(1) 100,000 3,762,500 ------------ 11,633,770 - --------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 2.8% Ascend Communications, Inc.(1) 25,750 630,875 - --------------------------------------------------------------- Newbridge Networks Corp.(1) 30,000 1,046,250 - --------------------------------------------------------------- Pairgain Technologies, Inc.(1) 85,000 1,646,875
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY (CONTINUED) Tellabs, Inc.(1) 128,200 $ 6,778,575 - --------------------------------------------------------------- WorldCom, Inc. 125,000 3,781,250 ------------ 13,883,825 - --------------------------------------------------------------- UTILITIES - 1.0% - --------------------------------------------------------------- ELECTRIC UTILITIES - 0.6% American Electric Power Co., Inc. 11,550 596,269 - --------------------------------------------------------------- CalEnergy, Inc.(1) 59,500 1,710,625 - --------------------------------------------------------------- CMS Energy Corp. 16,200 713,813 ------------ 3,020,707 - --------------------------------------------------------------- TELEPHONE UTILITIES - 0.4% Cincinnati Bell, Inc. 23,600 731,600 - --------------------------------------------------------------- LCI International, Inc.(1) 42,000 1,291,500 ------------ 2,023,100 ------------ Total Common Stocks (Cost $298,431,087) 389,680,589 PRINCIPAL AMOUNT - --------------------------------------------------------------- REPURCHASE AGREEMENTS - 20.5% - --------------------------------------------------------------- Repurchase agreement with Smith, Barney, Harris, Upham & Co., Inc., 6.625%, dated 12/31/97, to be repurchased at $101,537,358 on 1/2/98, collateralized by U.S. Treasury Bonds, 8.875%-11.25%, 2/15/15-2/15/19, with a value of $103,978,524 (Cost $101,500,000) $101,500,000 101,500,000 - --------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $399,931,087) 99.4% 491,180,589 - --------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.6 2,725,385 ------------ ------------ NET ASSETS 100.0% $493,905,974 ------------ ------------ ------------ ------------
1. Non-income producing security. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1997
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- COMMON STOCKS - 48.2% - --------------------------------------------------------------- BASIC MATERIALS - 2.2% - --------------------------------------------------------------- CHEMICALS - 0.9% Bayer AG, Sponsored ADR 51,000 $ 1,906,069 - --------------------------------------------------------------- Ecolab, Inc.(1) 14,000 776,125 - --------------------------------------------------------------- IMC Global, Inc. 47,700 1,562,175 - --------------------------------------------------------------- Potash Corp. of Saskatchewan, Inc. 20,000 1,660,000 ------------ 5,904,369 - --------------------------------------------------------------- METALS - 0.9% Alumax, Inc.(2) 58,000 1,972,000 - --------------------------------------------------------------- Brush Wellman, Inc. 78,000 1,911,000 - --------------------------------------------------------------- De Beers Consolidated Mines Ltd., ADR 52,300 1,068,881 - --------------------------------------------------------------- Oregon Metallurgical Corp.(2) 30,000 1,001,250 ------------ 5,953,131 - --------------------------------------------------------------- PAPER - 0.4% Aracruz Celulose SA, Sponsored ADR 66,499 955,923 - --------------------------------------------------------------- MacMillan Bloedel Ltd. 103,880 1,077,986 - --------------------------------------------------------------- MacMillan Bloedel Ltd. 24,200 257,125 ------------ 2,291,034 - --------------------------------------------------------------- CONSUMER CYCLICALS - 9.3% - --------------------------------------------------------------- AUTOS & HOUSING - 0.7% Dana Corp. 33,000 1,567,500 - --------------------------------------------------------------- General Motors Corp.(1) 5,000 303,125 - --------------------------------------------------------------- IRSA Inversiones y Representaciones SA 357,510 1,330,181 - --------------------------------------------------------------- Toll Brothers, Inc.(2) 46,000 1,230,500 ------------ 4,431,306 - --------------------------------------------------------------- LEISURE & ENTERTAINMENT - 4.5% Alaska Air Group, Inc.(1)(2) 54,000 2,092,500 - --------------------------------------------------------------- AMR Corp.(1)(2) 21,500 2,762,750 - --------------------------------------------------------------- Berjaya Sports Toto Berhad 410,000 1,049,929 - --------------------------------------------------------------- Brunswick Corp. 36,000 1,091,250 - --------------------------------------------------------------- Callaway Golf Co. 22,500 642,656 - --------------------------------------------------------------- Cheesecake Factory (The)(2) 30,000 915,000 - --------------------------------------------------------------- Circus Circus Enterprises, Inc.(2) 83,000 1,701,500 - --------------------------------------------------------------- Cracker Barrel Old Country Store, Inc.(1) 70,000 2,336,250 - --------------------------------------------------------------- Disney (Walt) Co.(1) 5,000 495,312 - --------------------------------------------------------------- Global Motorsport Group, Inc.(2) 59,000 685,875 - --------------------------------------------------------------- International Game Technology(1) 100,000 2,525,000 - --------------------------------------------------------------- Mirage Resorts, Inc.(2) 47,500 1,080,625
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- LEISURE & ENTERTAINMENT (CONTINUED) Nintendo Co. Ltd. 32,000 $ 3,150,258 - --------------------------------------------------------------- Outback Steakhouse, Inc.(1)(2) 26,800 770,500 - --------------------------------------------------------------- Primadonna Resorts, Inc.(2) 48,000 801,000 - --------------------------------------------------------------- Shangri-La Asia Ltd. 535,000 452,262 - --------------------------------------------------------------- Shimano, Inc. 85,000 1,568,976 - --------------------------------------------------------------- SkyWest, Inc.(1) 60,000 1,777,500 - --------------------------------------------------------------- Time Warner, Inc. 23,000 1,426,000 - --------------------------------------------------------------- West Marine, Inc.(1)(2) 73,000 1,633,384 ------------ 28,958,527 - --------------------------------------------------------------- MEDIA - 1.3% CBS Corp.(1) 113,026 3,327,203 - --------------------------------------------------------------- Comcast Corp., Cl. A Special(1) 57,000 1,799,062 - --------------------------------------------------------------- South China Morning Post Holdings Ltd. 1,706,000 1,199,972 - --------------------------------------------------------------- U S West Media Group(2) 72,000 2,079,000 ------------ 8,405,237 - --------------------------------------------------------------- RETAIL: GENERAL - 1.0% Cone Mills Corp.(2) 261,000 2,022,750 - --------------------------------------------------------------- Dayton Hudson Corp. 20,000 1,350,000 - --------------------------------------------------------------- Federated Department Stores, Inc.(2) 41,000 1,765,562 - --------------------------------------------------------------- Neiman-Marcus Group, Inc.(2) 50,500 1,527,625 ------------ 6,665,937 - --------------------------------------------------------------- RETAIL: SPECIALTY - 1.8% AutoZone, Inc.(1)(2) 60,000 1,740,000 - --------------------------------------------------------------- Books-A-Million, Inc.(2) 300,000 1,743,750 - --------------------------------------------------------------- Circuit City Stores, Inc. - CarMax Group(2) 65,000 585,000 - --------------------------------------------------------------- Costco Cos., Inc.(1)(2) 14,900 664,912 - --------------------------------------------------------------- General Nutrition Cos., Inc.(1) 75,000 2,550,000 - --------------------------------------------------------------- Gymboree Corp.(1)(2) 61,900 1,694,512 - --------------------------------------------------------------- Movie Gallery, Inc.(2) 80,000 235,000 - --------------------------------------------------------------- Toys 'R' Us, Inc.(2) 73,000 2,294,937 ------------ 11,508,111 - --------------------------------------------------------------- CONSUMER NON-CYCLICALS - 7.9% - --------------------------------------------------------------- BEVERAGES - 0.3% Diageo plc 200,000 1,837,915 - --------------------------------------------------------------- FOOD - 0.7% Chiquita Brands International, Inc. 90,000 1,468,125 - --------------------------------------------------------------- Groupe Danone 10,413 1,860,743 - --------------------------------------------------------------- Nestle SA, Sponsored ADR 12,000 900,482 ------------ 4,229,350
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- HEALTHCARE/DRUGS - 3.3% Abbott Laboratories 33,000 $ 2,163,562 - --------------------------------------------------------------- American Home Products Corp. 38,500 2,945,250 - --------------------------------------------------------------- Astra AB Free, Series A 80,000 1,386,375 - --------------------------------------------------------------- BioChem Pharma, Inc.(2) 46,500 970,687 - --------------------------------------------------------------- Bristol-Myers Squibb Co. 11,000 1,040,875 - --------------------------------------------------------------- Genzyme Corp. (General Division)(1)(2) 72,000 1,998,000 - --------------------------------------------------------------- Johnson & Johnson(1) 40,000 2,635,000 - --------------------------------------------------------------- Mylan Laboratories, Inc.(1) 95,000 1,989,062 - --------------------------------------------------------------- Novartis AG 2,106 3,422,040 - --------------------------------------------------------------- SmithKline Beecham plc, ADR 46,000 2,366,125 ------------ 20,916,976 - --------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 2.6% Acuson Corp.(2) 48,000 795,000 - --------------------------------------------------------------- Alternative Living Services, Inc.(2) 73,000 2,158,062 - --------------------------------------------------------------- Apache Medical Systems, Inc.(2) 287,000 367,719 - --------------------------------------------------------------- Biomet, Inc. 80,000 2,050,000 - --------------------------------------------------------------- Boston Scientific Corp.(2) 16,000 734,000 - --------------------------------------------------------------- Innovasive Devices, Inc.(2) 110,000 1,003,750 - --------------------------------------------------------------- Manor Care, Inc.(1) 34,985 1,224,475 - --------------------------------------------------------------- MedPartners, Inc.(2) 100,000 2,237,500 - --------------------------------------------------------------- Oxford Health Plans, Inc.(2) 42,000 653,625 - --------------------------------------------------------------- United Healthcare Corp.(1) 41,000 2,037,187 - --------------------------------------------------------------- United States Surgical Corp. 51,000 1,494,937 - --------------------------------------------------------------- WellPoint Health Networks, Inc.(1)(2) 39,981 1,689,197 ------------ 16,445,452 - --------------------------------------------------------------- HOUSEHOLD GOODS - 0.2% Wella AG 1,550 1,094,801 - --------------------------------------------------------------- Wella AG, Preference 200 146,826 ------------ 1,241,627 - --------------------------------------------------------------- TOBACCO - 0.8% Imperial Tobacco Group plc 220,000 1,386,416 - --------------------------------------------------------------- Philip Morris Cos., Inc. 73,500 3,330,469 - --------------------------------------------------------------- PT Hanjaya Mandala Sampoerna 492,000 385,245 ------------ 5,102,130 - --------------------------------------------------------------- ENERGY - 3.6% - --------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 1.0% Global Marine, Inc.(1)(2) 54,000 1,323,000 - --------------------------------------------------------------- Transocean Offshore, Inc.(1) 43,000 2,072,062 - --------------------------------------------------------------- Weatherford Enterra, Inc.(1)(2) 33,000 1,443,750
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- ENERGY SERVICES & PRODUCERS (CONTINUED) Western Atlas, Inc.(1)(2) 19,000 $ 1,406,000 ------------ 6,244,812 - --------------------------------------------------------------- OIL-INTEGRATED - 2.6% Atlantic Richfield Co. 32,000 2,564,000 - --------------------------------------------------------------- Enron Corp. 35,000 1,454,688 - --------------------------------------------------------------- Kerr-McGee Corp. 30,000 1,899,375 - --------------------------------------------------------------- Occidental Petroleum Corp. 41,000 1,201,813 - --------------------------------------------------------------- Ranger Oil Ltd. 161,213 1,098,397 - --------------------------------------------------------------- Royal Dutch Petroleum Co., NY Shares 30,800 1,668,975 - --------------------------------------------------------------- Talisman Energy, Inc.(2) 43,900 1,342,138 - --------------------------------------------------------------- Total SA, Sponsored ADR 17,501 971,306 - --------------------------------------------------------------- Unocal Corp. 62,000 2,406,375 - --------------------------------------------------------------- YPF SA, Cl. D, ADR 62,000 2,119,625 ------------ 16,726,692 - --------------------------------------------------------------- FINANCIAL - 7.8% - --------------------------------------------------------------- BANKS - 4.6% ABN Amro Holding NV 66,000 1,285,993 - --------------------------------------------------------------- Akbank T.A.S. 3,721,215 327,890 - --------------------------------------------------------------- Banco Frances del Rio de la Plata SA 100,050 928,634 - --------------------------------------------------------------- Chase Manhattan Corp. (New)(1) 72,000 7,884,000 - --------------------------------------------------------------- Credit Suisse Group 5,500 852,216 - --------------------------------------------------------------- Credito Italiano 485,000 1,496,426 - --------------------------------------------------------------- Deutsche Bank AG 12,000 839,579 - --------------------------------------------------------------- Fleet Financial Group, Inc. 5,000 374,688 - --------------------------------------------------------------- NationsBank Corp. 120,000 7,297,500 - --------------------------------------------------------------- PNC Bank Corp. 32,000 1,826,000 - --------------------------------------------------------------- Societe Generale 21,200 2,889,694 - --------------------------------------------------------------- UBS, Bearer 880 1,274,251 - --------------------------------------------------------------- Wells Fargo & Co. 5,800 1,968,738 ------------ 29,245,609 - --------------------------------------------------------------- DIVERSIFIED FINANCIAL - 1.5% American Express Co.(1) 30,400 2,713,200 - --------------------------------------------------------------- Freddie Mac 34,000 1,425,875 - --------------------------------------------------------------- Merrill Lynch & Co., Inc.(1) 36,000 2,625,750 - --------------------------------------------------------------- Morgan Stanley, Dean Witter, Discover & Co. 45,800 2,707,925 ------------ 9,472,750 - --------------------------------------------------------------- INSURANCE - 1.7% ACE Ltd.(1) 31,500 3,039,750 - --------------------------------------------------------------- Cigna Corp. 7,500 1,297,969 - --------------------------------------------------------------- Equitable Cos., Inc.(1) 35,100 1,746,225
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- INSURANCE (CONTINUED) Everest Reinsurance Holdings, Inc. 8,300 $ 342,375 - --------------------------------------------------------------- Skandia Forsakrings AB 36,000 1,699,191 - --------------------------------------------------------------- UNUM Corp. 48,600 2,642,625 ------------ 10,768,135 - --------------------------------------------------------------- INDUSTRIAL - 3.8% - --------------------------------------------------------------- ELECTRICAL EQUIPMENT - 0.6% General Electric Co.(1) 6,800 498,950 - --------------------------------------------------------------- Methode Electronics, Inc., Cl. A(1) 100,000 1,625,000 - --------------------------------------------------------------- Rockwell International Corp. 36,300 1,896,675 ------------ 4,020,625 - --------------------------------------------------------------- INDUSTRIAL MATERIALS - 0.5% Owens Corning 60,000 2,047,500 - --------------------------------------------------------------- Wolverine Tube, Inc.(2) 40,000 1,240,000 ------------ 3,287,500 - --------------------------------------------------------------- INDUSTRIAL SERVICES - 0.3% Calgon Carbon Corp. 101,000 1,085,750 - --------------------------------------------------------------- Children's Comprehensive Services, Inc.(2) 40,000 740,000 - --------------------------------------------------------------- UNOVA, Inc.(2) 4,800 78,900 ------------ 1,904,650 - --------------------------------------------------------------- MANUFACTURING - 1.2% AGCO Corp. 72,000 2,106,000 - --------------------------------------------------------------- Citic Pacific Ltd. 55,000 218,630 - --------------------------------------------------------------- Cognex Corp.(2) 48,000 1,308,000 - --------------------------------------------------------------- Eaton Corp. 9,000 803,250 - --------------------------------------------------------------- Hutchison Whampoa Ltd. 35,000 219,533 - --------------------------------------------------------------- Tenneco, Inc. 48,000 1,896,000 - --------------------------------------------------------------- Westinghouse Air Brake Co. 50,000 1,281,250 ------------ 7,832,663 - --------------------------------------------------------------- TRANSPORTATION - 1.2% Burlington Northern Santa Fe Corp. 31,000 2,881,063 - --------------------------------------------------------------- Canadian National Railway Co. 23,000 1,081,677 - --------------------------------------------------------------- Spartan Motors, Inc. 130,000 804,375 - --------------------------------------------------------------- Stolt-Nielsen SA 64,200 1,360,238 - --------------------------------------------------------------- Stolt-Nielsen SA, Sponsored ADR 17,650 386,094 - --------------------------------------------------------------- Transportacion Maritima Mexicana SA de CV, Sponsored ADR, L Shares(2) 130,000 958,750 ------------ 7,472,197 - --------------------------------------------------------------- TECHNOLOGY - 11.4% - --------------------------------------------------------------- AEROSPACE/DEFENSE - 0.4% Lockheed Martin Corp. 18,000 1,773,000
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- AEROSPACE/DEFENSE (CONTINUED) Raytheon Co., Cl. A 15,502 $ 764,442 ------------ 2,537,442 - --------------------------------------------------------------- COMPUTER HARDWARE - 2.4% Cabletron Systems, Inc.(2) 95,000 1,425,000 - --------------------------------------------------------------- Canon, Inc. 40,000 935,233 - --------------------------------------------------------------- Hewlett-Packard Co. 39,000 2,437,500 - --------------------------------------------------------------- International Business Machines Corp. 55,000 5,750,938 - --------------------------------------------------------------- Iomega Corp.(1)(2) 92,000 1,144,250 - --------------------------------------------------------------- Quantum Corp.(2) 9,900 198,619 - --------------------------------------------------------------- Xerox Corp.(1) 42,700 3,151,794 ------------ 15,043,334 - --------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 3.1% America Online, Inc.(1)(2) 22,850 2,037,934 - --------------------------------------------------------------- Computer Associates International, Inc.(1) 75,962 4,016,517 - --------------------------------------------------------------- Electronic Arts, Inc.(1)(2) 38,500 1,455,781 - --------------------------------------------------------------- First Data Corp. 75,000 2,193,750 - --------------------------------------------------------------- Inference Corp., Cl. A(2) 160,000 630,000 - --------------------------------------------------------------- Novell, Inc.(2) 200,000 1,500,000 - --------------------------------------------------------------- Rational Software Corp.(2) 133,000 1,512,875 - --------------------------------------------------------------- Sabre Group Holdings, Inc.(1)(2) 66,100 1,908,638 - --------------------------------------------------------------- SELECT Software Tools Ltd., ADR(2) 150,000 843,750 - --------------------------------------------------------------- Symantec Corp.(1)(2) 67,364 1,477,798 - --------------------------------------------------------------- Synopsys, Inc.(2) 15,000 536,250 - --------------------------------------------------------------- Transition Systems, Inc.(2) 65,000 1,438,125 ------------ 19,551,418 - --------------------------------------------------------------- ELECTRONICS - 3.9% CAE, Inc. 131,066 1,025,800 - --------------------------------------------------------------- Credence Systems Corp.(2) 29,100 862,088 - --------------------------------------------------------------- Dynatech Corp.(2) 40,000 1,875,000 - --------------------------------------------------------------- General Motors Corp., Cl. H 27,000 997,313 - --------------------------------------------------------------- Input/Output, Inc.(1)(2) 138,000 4,096,875 - --------------------------------------------------------------- Intel Corp.(1) 130,000 9,132,500 - --------------------------------------------------------------- Keyence Corp. 7,700 1,142,968 - --------------------------------------------------------------- LSI Logic Corp.(2) 75,000 1,481,250 - --------------------------------------------------------------- Nokia Corp., A Shares, Sponsored ADR(1) 9,800 686,000 - --------------------------------------------------------------- Novellus Systems, Inc.(1)(2) 8,400 271,425 - --------------------------------------------------------------- SGS-Thomson Microelectronics NV(1)(2) 17,500 1,068,594 - --------------------------------------------------------------- Teradyne, Inc.(2) 15,000 480,000 - --------------------------------------------------------------- Xilinx, Inc.(2) 45,000 1,577,813 ------------ 24,697,626
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 1.6% Airtouch Communications, Inc.(1)(2) 59,000 $ 2,452,188 - --------------------------------------------------------------- Cisco Systems, Inc.(1)(2) 36,000 2,007,000 - --------------------------------------------------------------- ECI Telecommunications Ltd.(1) 59,000 1,504,500 - --------------------------------------------------------------- MCI Communications Corp. 57,000 2,440,313 - --------------------------------------------------------------- Newbridge Networks Corp.(1)(2) 18,500 645,188 - --------------------------------------------------------------- QUALCOMM, Inc.(2) 19,000 959,500 - --------------------------------------------------------------- Tellabs, Inc.(2) 7,000 370,125 ------------ 10,378,814 - --------------------------------------------------------------- UTILITIES - 2.2% - --------------------------------------------------------------- ELECTRIC UTILITIES - 1.2% Allegheny Energy, Inc. 42,000 1,365,000 - --------------------------------------------------------------- Houston Industries, Inc. 80,000 2,135,000 - --------------------------------------------------------------- PacifiCorp 60,000 1,638,750 - --------------------------------------------------------------- Southern Co. 60,000 1,552,500 - --------------------------------------------------------------- Union Electric Co. 18,500 800,125 ------------ 7,491,375 - --------------------------------------------------------------- TELEPHONE UTILITIES - 1.0% BCE, Inc. 40,000 1,332,500 - --------------------------------------------------------------- Qwest Communications International, Inc.(2) 20,000 1,190,000 - --------------------------------------------------------------- SBC Communications, Inc. 19,000 1,391,750 - --------------------------------------------------------------- Telecomunicacoes Brasileiras SA 6,860,000 697,667 - --------------------------------------------------------------- U S West Communications Group(1) 44,000 1,985,500 ------------ 6,597,417 ------------ Total Common Stocks (Cost $223,270,684) 307,164,161 - --------------------------------------------------------------- PREFERRED STOCKS - 0.0% - --------------------------------------------------------------- Time Warner, Inc., 10.25% Exchangeable Preferred, Series M (Cost $0)(3) 1 1,183 - --------------------------------------------------------------- OTHER SECURITIES - 0.1% - --------------------------------------------------------------- Pantry Pride, Inc., $14.875 Exchangeable, Series B (Cost $782,000)(4) 8,000 803,000 UNITS - --------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.1% - --------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99(4) 6,000 60 - --------------------------------------------------------------- Gaylord Container Corp. Wts., Exp. 11/02 9,232 53,084 - --------------------------------------------------------------- IHF Capital, Inc., Series I Wts., Exp. 11/99(4) 1,000 50,000 - --------------------------------------------------------------- PerSeptive Biosystems, Inc. Wts., Exp. 9/03 249 700 - --------------------------------------------------------------- Terex Corp. Rts., Exp. 5/02(4) 4,000 81,000 ------------ Total Rights, Warrants and Certificates (Cost $20,772) 184,844
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(5) NOTE 1 - --------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 1.7% - --------------------------------------------------------------- Government National Mortgage Assn.: 7%, 1/1/28(6) $ 6,000,000 $ 6,043,140 8%, 4/15/23 2,848,896 2,966,727 8%, 7/15/22 1,256,791 1,310,344 - --------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1994-C2, Cl. E, 8%, 4/25/25 673,355 679,496 ------------ Total Mortgage-Backed Obligations (Cost $10,886,646) 10,999,707
- -------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 9.1% - -------------------------------------------------------------------- U.S. Treasury Bonds, STRIPS: 7.26%, 11/15/18(10) 18,600,000 5,308,384 7.10%, 11/15/18(10) 24,500,000 6,977,992 7.31%, 8/15/19(10) 26,800,000 7,295,228 - -------------------------------------------------------------------- U.S. Treasury Nts.: 5.875%, 9/30/02 15,000,000 15,093,765 6.25%, 2/15/07 8,800,000 9,086,009 6.375%, 8/15/02 5,000,000 5,131,255 9.25%, 8/15/98 9,000,000 9,199,692 ------------ Total U.S. Government Obligations (Cost $53,411,213) 58,092,325 - -------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 15.9% - -------------------------------------------------------------------- ARGENTINA - 6.6% Argentina (Republic of) Bonds, Bonos de Consolidacion de Deudas, Series I, 5.66%, 4/1/01(7) 2,103,652 1,982,009 - -------------------------------------------------------------------- Argentina (Republic of) Floating Rate Bonds, Series L, 6.69%, 3/31/05(7) 8,880,000 7,958,700 - -------------------------------------------------------------------- Argentina (Republic of) Nts., 9.50%, 11/30/02(7) 15,000,000 14,906,250 - -------------------------------------------------------------------- Argentina (Republic of) Par Bonds, 5.50%, 3/31/23(8) 23,750,000 17,470,975 ------------ 42,317,934 - -------------------------------------------------------------------- AUSTRALIA - 0.6% Queensland Treasury Corp. Exchangeable Gtd. Nts., 10.50%, 5/15/03 AUD 1,800,000 1,414,755 - -------------------------------------------------------------------- Treasury Corp. of Victoria Gtd. Bonds, 8.25%, 10/15/03 AUD 3,000,000 2,164,829 ------------ 3,579,584 - -------------------------------------------------------------------- BRAZIL - 1.3% Brazil (Federal Republic of) Par Bonds, 5.25%, 4/15/24(8) 11,500,000 8,308,750 - -------------------------------------------------------------------- CANADA - 2.4% Canada (Government of) Bonds: 8.50%, 4/1/02 CAD 1,500,000 1,171,955 8.75%, 12/1/05 CAD 12,200,000 10,251,018 9.75%, 12/1/01 CAD 3,000,000 2,418,333 9.75%, 6/1/01 CAD 2,000,000 1,589,161 ------------ 15,430,467 - -------------------------------------------------------------------- DENMARK - 0.9% Denmark (Kingdom of) Bonds, 8%, 3/15/06 DKK 32,100,000 5,431,095
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(5) NOTE 1 - -------------------------------------------------------------------- GREAT BRITAIN - 1.2% United Kingdom Treasury Bonds, 6.75%, 11/26/04 GBP 2,680,000 $ 4,490,982 - -------------------------------------------------------------------- United Kingdom Treasury Nts., 13%, 7/14/00 GBP 1,590,000 2,986,545 ------------ 7,477,527 - -------------------------------------------------------------------- IRELAND - 0.3% Ireland (Government of) Bonds, 9.25%, 7/11/03 IEP 1,110,000 1,890,321 - -------------------------------------------------------------------- MEXICO - 0.6% United Mexican States Collateralized Fixed Rate Par Bonds, Series A, 6.25%, 12/31/19 4,450,000 3,726,875 - -------------------------------------------------------------------- NEW ZEALAND - 1.0% New Zealand (Government of) Bonds, 8%, 2/15/01 NZD 10,440,000 6,159,839 - -------------------------------------------------------------------- PHILIPPINES - 0.4% Philippines (Republic of) Bonds, 8.60%, 6/15/27 1,500,000 1,383,750 - -------------------------------------------------------------------- Philippines (Republic of) Par Bonds, Series B, 6.50%, 12/1/17(4)(8) 1,675,000 1,417,469 ------------ 2,801,219 - -------------------------------------------------------------------- POLAND - 0.3% Poland (Republic of) Bonds, 15%, 10/12/99 PLZ 9,000,000 2,236,265 - -------------------------------------------------------------------- SOUTH AFRICA - 0.3% Eskom Depositary Receipts, Series E168, 11%, 6/1/08 ZAR 12,570,000 2,178,925 ------------ Total Foreign Government Obligations (Cost $95,796,002) 101,538,801
- ---------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES - 8.5% - ---------------------------------------------------------------- BASIC MATERIALS - 1.2% - ---------------------------------------------------------------- CHEMICALS - 0.4% Harris Chemical North America, Inc., 10.75% Gtd. Sr. Sub. Nts., 10/15/03 100,000 107,250 - ---------------------------------------------------------------- Laroche Industries, Inc., 9.50% Sr. Sub. Nts., 9/15/07(9) 500,000 495,000 - ---------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 85,000 94,562 - ---------------------------------------------------------------- Quantum Chemical Corp., 10.375% First Mtg. Nts., 6/1/03 500,000 524,664 - ---------------------------------------------------------------- Sterling Chemicals, Inc., 11.75% Sr. Unsec. Sub. Nts., 8/15/06 1,115,000 1,142,875 ------------- 2,364,351 - ---------------------------------------------------------------- METALS - 0.3% AK Steel Corp., 9.125% Sr. Nts., 12/15/06 1,150,000 1,184,500 - ---------------------------------------------------------------- Metallurg, Inc., 11% Sr. Nts., 12/1/07(9) 500,000 515,000 ------------- 1,699,500 - ---------------------------------------------------------------- PAPER - 0.5% APP International Finance Co. BV, 11.75% Gtd. Sec. Nts., 10/1/05 500,000 461,250 - ---------------------------------------------------------------- Aracruz Celulose SA, 10.375% Debs., 1/31/02 430,000 439,675 - ---------------------------------------------------------------- Gaylord Container Corp., 9.75% Sr. Nts., 6/15/07 500,000 487,500 - ---------------------------------------------------------------- Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 425,000 439,875 - ---------------------------------------------------------------- Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 500,000 510,000 - ---------------------------------------------------------------- SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 750,000 836,250 ------------- 3,174,550
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(5) NOTE 1 - ---------------------------------------------------------------- CONSUMER CYCLICALS - 3.1% - ---------------------------------------------------------------- AUTOS & HOUSING - 0.7% Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., 7/15/07(9) $ 500,000 $ 525,000 - ---------------------------------------------------------------- Chrysler Financial Corp., 13.25% Nts., 10/15/99 500,000 559,926 - ---------------------------------------------------------------- Coleman Escrow Corp., Zero Coupon Sr. First Priority Disc. Nts., 11.13%, 5/15/01(10) 770,000 513,975 - ---------------------------------------------------------------- Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 500,000 560,000 - ---------------------------------------------------------------- Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., Series B, 7/15/02 1,000,000 1,122,500 - ---------------------------------------------------------------- Kaufman & Broad Home Corp., 7.75% Sr. Nts., 10/15/04 500,000 497,500 - ---------------------------------------------------------------- Samsonite Corp., 11.125% Sr. Sub. Nts., 7/15/05 345,000 388,125 ------------- 4,167,026 - ---------------------------------------------------------------- LEISURE & ENTERTAINMENT - 0.7% Casino America, Inc., 12.50% Sr. Nts., 8/1/03 250,000 272,812 - ---------------------------------------------------------------- Foodmaker, Inc.: 9.25% Sr. Nts., 3/1/99 315,000 322,087 9.75% Sr. Sub. Nts., 6/1/02 350,000 361,375 - ---------------------------------------------------------------- Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03 755,000 815,400 - ---------------------------------------------------------------- HMH Properties, Inc., 8.875% Sr. Nts., 7/15/07 750,000 793,125 - ---------------------------------------------------------------- Imax Corp., 10% Sr. Nts., 3/1/01 600,000 633,000 - ---------------------------------------------------------------- Rio Hotel & Casino, Inc., 9.50% Gtd. Sr. Sub. Nts., 4/15/07 750,000 796,875 - ---------------------------------------------------------------- Station Casinos, Inc., 10.125% Sr. Sub. Nts., 3/15/06 445,000 471,700 ------------- 4,466,374 - ---------------------------------------------------------------- MEDIA - 1.5% American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04(11) 229,000 76,715 - ---------------------------------------------------------------- Cablevision Systems Corp., 9.875% Sr. Sub. Nts., 5/15/06 250,000 275,625 - ---------------------------------------------------------------- Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 400,000 411,000 - ---------------------------------------------------------------- EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04(11) 540,000 496,800 - ---------------------------------------------------------------- Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B, 11/1/03 550,000 594,000 - ---------------------------------------------------------------- Lamar Advertising Co., 9.625% Sr. Sub. Nts., 12/1/06 150,000 162,187 - ---------------------------------------------------------------- Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 1,000,000 1,062,842 - ---------------------------------------------------------------- Rogers Cablesystems Ltd., 10% Second Priority Sr. Sec. Debs., 12/1/07 1,000,000 1,105,000 - ---------------------------------------------------------------- SCI Television, Inc., 11% Sr. Sec. Nts., 6/30/05(4) 500,000 528,365 - ---------------------------------------------------------------- Sinclair Broadcast Group, Inc.: 8.75% Sr. Sub. Nts., 12/15/07 500,000 502,500 9% Gtd. Sr. Sub. Nts., 7/15/07 450,000 461,250 - ---------------------------------------------------------------- TCI Satellite Entertainment, Inc., 10.875% Sr. Sub. Nts., 2/15/07(9) 200,000 210,500 - ---------------------------------------------------------------- Time Warner Entertainment LP, 10.15% Sr. Nts., 5/1/12 500,000 651,878 - ---------------------------------------------------------------- Time Warner, Inc., 9.125% Debs., 1/15/13 500,000 598,423 - ---------------------------------------------------------------- TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 1,000,000 1,111,644 - ---------------------------------------------------------------- Universal Outdoor, Inc., 9.75% Sr. Sub. Nts., Series B, 10/15/06 500,000 562,500 - ---------------------------------------------------------------- Young Broadcasting, Inc., 8.75% Sr. Sub. Debs., 6/15/07 900,000 895,500 ------------- 9,706,729
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(5) NOTE 1 - ---------------------------------------------------------------- RETAIL: GENERAL - 0.1% CMI Industries, Inc., 9.50% Sr. Sub. Nts., 10/1/03(4) $ 25,000 $ 24,688 - ---------------------------------------------------------------- Dan River, Inc., 10.125% Sr. Sub. Nts., 12/15/03 500,000 536,875 ------------- 561,563 - ---------------------------------------------------------------- RETAIL: SPECIALTY - 0.1% Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03(4) 750,000 791,250 - ---------------------------------------------------------------- CONSUMER NON-CYCLICALS - 0.9% - ---------------------------------------------------------------- FOOD - 0.6% Fleming Cos., Inc.: 10.50% Sr. Sub. Nts., 12/1/04(9) 300,000 315,750 10.625% Sr. Sub. Nts., 7/31/07(9) 800,000 848,000 - ---------------------------------------------------------------- Ralph's Grocery Co., 10.45% Sr. Nts., 6/15/04 850,000 956,250 - ---------------------------------------------------------------- Randall's Food Markets, Inc., 9.375% Sr. Sub. Nts., 7/1/07(9) 800,000 832,000 - ---------------------------------------------------------------- RJR Nabisco, Inc., 8.625% Medium-Term Nts., 12/1/02 500,000 532,428 - ---------------------------------------------------------------- Stater Brothers Holdings, Inc., 9% Sr. Unsec. Sub. Nts., 7/1/04 500,000 525,000 ------------- 4,009,428 - ---------------------------------------------------------------- HEALTHCARE/DRUGS - 0.0% Integrated Health Services, Inc., 9.50% Sr. Sub. Nts., 9/15/07(9) 220,000 226,600 - ---------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 0.1% Genesis Health Ventures, Inc., 9.25% Sr. Sub. Nts., 10/1/06 340,000 348,075 - ---------------------------------------------------------------- Magellan Health Services, Inc., 11.25% Sr. Sub. Nts., Series A, 4/15/04 355,000 395,381 ------------- 743,456 - ---------------------------------------------------------------- HOUSEHOLD GOODS - 0.2% Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts.: Series B, 13.17%, 3/15/98(10) 500,000 494,888 10.09%, 3/15/01(10) 1,000,000 695,000 ------------- 1,189,888 - ---------------------------------------------------------------- ENERGY - 0.1% - ---------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 0.1% J. Ray McDermott SA, 9.375% Sr. Sub. Bonds, 7/15/06 750,000 807,188 - ---------------------------------------------------------------- FINANCIAL - 0.3% - ---------------------------------------------------------------- BANKS - 0.1% First Chicago Corp.: 11.25% Sub. Nts., 2/20/01 250,000 285,736 9% Sub. Nts., 6/15/99 250,000 260,205 ------------- 545,941 - ---------------------------------------------------------------- DIVERSIFIED FINANCIAL - 0.2% Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Sec. Nts., Series B, 4/1/02 950,000 1,021,250 - ---------------------------------------------------------------- INDUSTRIAL - 0.6% - ---------------------------------------------------------------- INDUSTRIAL MATERIALS - 0.2% American Standard Cos., Inc., 10.875% Sr. Nts., 5/15/99(4) 500,000 527,500 - ---------------------------------------------------------------- Building Materials Corp. of America, 8.625% Sr. Nts., Series B, 12/15/06 100,000 103,500
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(5) NOTE 1 - ---------------------------------------------------------------- INDUSTRIAL MATERIALS (CONTINUED) Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03 $ 850,000 $ 896,750 ------------- 1,527,750 - ---------------------------------------------------------------- INDUSTRIAL SERVICES - 0.0% Allied Waste North America, Inc., 10.25% Sr. Sub. Nts., 12/1/06 285,000 314,213 - ---------------------------------------------------------------- MANUFACTURING - 0.3% International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 500,000 550,000 - ---------------------------------------------------------------- Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 500,000 501,250 - ---------------------------------------------------------------- Synthetic Industries, Inc., 9.25% Sr. Sub. Nts., 2/15/07 80,000 84,800 - ---------------------------------------------------------------- Terex Corp., 13.25% Sr. Sec. Nts., 5/15/02 665,000 761,425 ------------- 1,897,475 - ---------------------------------------------------------------- TRANSPORTATION - 0.1% Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07(9) 500,000 532,500 - ---------------------------------------------------------------- TECHNOLOGY - 1.6% - ---------------------------------------------------------------- AEROSPACE/DEFENSE - 0.2% America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 925,000 994,375 - ---------------------------------------------------------------- Amtran, Inc., 10.50% Sr. Nts., 8/1/04(9) 500,000 522,500 ------------- 1,516,875 - ---------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 1.4% Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc. Nts., 12/1/04(11) 800,000 733,000 - ---------------------------------------------------------------- GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(11) 500,000 385,000 - ---------------------------------------------------------------- ICG Holdings, Inc., 0%/13.50% Sr. Disc. Nts., 9/15/05(11) 800,000 652,000 - ---------------------------------------------------------------- Intermedia Communications, Inc., 8.50% Sr. Nts., 1/15/08(9) 500,000 502,500 - ---------------------------------------------------------------- Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(11) 750,000 553,125 - ---------------------------------------------------------------- NTL, Inc., 0%/10.875% Sr. Deferred Coupon Nts., 10/15/03(11) 500,000 475,000 - ---------------------------------------------------------------- Omnipoint Corp.: 11.625% Sr. Nts., 8/15/06 590,000 625,400 11.625% Sr. Nts., Series A, 8/15/06 110,000 116,600 - ---------------------------------------------------------------- ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 200,000 218,000 - ---------------------------------------------------------------- PriCellular Wireless Corp., 14% Sr. Sub. Disc. Nts., 11/15/01 1,000,000 1,115,000 - ---------------------------------------------------------------- Teleport Communications Group, Inc., 0%/11.125% Sr. Disc. Nts., 7/1/07(11) 1,500,000 1,226,250 - ---------------------------------------------------------------- Telewest Communications plc: 0%/11% Sr. Disc. Debs., 10/1/07(11) 1,000,000 781,250 9.625% Sr. Debs., 10/1/06 500,000 521,250 - ---------------------------------------------------------------- USA Mobile Communications, Inc. II, 9.50% Sr. Nts., 2/1/04 1,000,000 980,000 ------------- 8,884,375 - ---------------------------------------------------------------- UTILITIES - 0.7% - ---------------------------------------------------------------- ELECTRIC UTILITIES - 0.5% California Energy, Inc., 10.25% Sr. Disc. Nts., 1/15/04 750,000 810,000 - ---------------------------------------------------------------- Calpine Corp.: 10.50% Sr. Nts., 5/15/06(4) 800,000 876,000 8.75% Sr. Nts., 7/15/07(9) 400,000 410,000
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(5) NOTE 1 - ---------------------------------------------------------------- ELECTRIC UTILITIES (CONTINUED) First PV Funding Corp.: 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16(4) $ 741,000 $ 787,313 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 18,000 18,000 ------------- 2,901,313 - ---------------------------------------------------------------- GAS UTILITIES - 0.2% Beaver Valley II Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17(4) 989,000 1,092,845 ------------- Total Non-Convertible Corporate Bonds and Notes (Cost $51,489,616) 54,142,440 - ---------------------------------------------------------------- CORPORATE BONDS AND NOTES - 0.2% - ---------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 (Cost $1,043,750) 1,000,000 1,072,500 - ---------------------------------------------------------------- REPURCHASE AGREEMENTS - 16.9% - ---------------------------------------------------------------- Repurchase agreement with Smith, Barney, Harris, Upham & Co., Inc., 6.625%, dated 12/31/97, to be repurchased at $107,839,676 on 1/2/98, collateralized by U.S. Treasury Bonds, 8.875%-11.25%, 2/15/15-2/15/19, with a value of $110,432,364 (Cost $107,800,000) 107,800,000 107,800,000 - ---------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $544,500,683) 100.7% 641,798,961 - ---------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.7) (4,254,131) ------------ ------------- NET ASSETS 100.0% $637,544,830 ------------ ------------- ------------ -------------
1. A sufficient amount of securities has been designated to cover outstanding written call options, as follows:
SHARES SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED NOTE 1 - --------------------------------------------------------------------------------------------------- ACE Ltd. 6,200 2/23 $ 90.00 $ 26,163 $ 50,375 AMR Corp. 5,000 5/18 120.00 62,348 73,750 Airtouch Communications, Inc. 14,000 1/20 40.00 20,579 31,500 Alaska Air Group, Inc. 11,000 1/20 35.00 14,304 38,500 America Online, Inc. 6,000 4/20 90.00 65,818 60,750 American Express Co. 7,600 4/18 90.00 39,671 40,850 AutoZone, Inc. 12,000 6/22 35.00 13,890 9,000 CBS Corp. 22,500 7/20 35.00 44,324 28,125 Chase Manhattan Corp., New 9,000 3/23 125.00 62,728 15,750 Cisco Systems, Inc. 8,000 4/18 63.38 42,759 36,000 Comcast Corp., 20,000 1/19 20.00 17,099 225,000 Computer Associates International, Inc. 10,000 1/20 53.38 37,199 33,750 Costco Cos., Inc. 10,000 4/20 40.00 43,449 17,500 Costco Cos., Inc. 4,900 4/20 45.00 11,184 18,375 Cracker Barrel Old Country Store, Inc. 14,000 3/23 35.00 20,579 22,750 Disney (Walt) Co. 5,000 1/20 90.00 6,725 45,625 ECI Telecommunications Ltd. 14,000 2/23 35.00 32,829 3,500 Ecolab, Inc. 6,000 4/20 55.00 18,569 27,000 Electronic Arts, Inc. 14,700 3/23 45.00 43,658 25,725 Equitable Cos., Inc. 11,000 1/19 35.00 21,669 165,000 General Electric Co. 6,800 3/23 80.00 18,495 10,200 General Motors Corp. 5,000 3/23 70.00 26,099 10,000 General Nutrition Cos., Inc. 15,000 7/20 40.00 42,674 34,687 Genzyme Corp. (General Division) 13,000 4/20 35.00 40,234 6,500
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) 1. Outstanding written call options (continued)
SHARES SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED NOTE 1 - --------------------------------------------------------------------------------------------------- Global Marine, Inc. 8,400 1/19 $ 25.00 $ 20,747 $ 9,450 Global Marine, Inc. 8,400 4/20 35.00 31,247 7,350 Gymboree Corp. 8,000 7/21 30.00 33,759 22,000 Input/Output, Inc. 27,000 2/23 30.00 53,188 72,563 Intel Corp. 17,000 1/19 97.50 53,931 1,063 Intel Corp. 7,000 4/18 115.00 17,289 875 International Game Technology 20,000 4/20 25.00 31,899 52,500 Iomega Corp. 20,000 2/24 17.50 20,324 5,000 Johnson & Johnson 9,000 7/20 70.00 32,354 30,375 Manor Care, Inc. 8,800 7/21 40.00 20,635 15,400 Merrill Lynch & Co., Inc. 2,600 1/19 60.00 7,397 32,500 Merrill Lynch & Co., Inc. 7,200 4/20 80.00 33,983 25,200 Methode Electronics, Inc. 18,000 4/20 30.00 19,709 1,125 Mylan Laboratories, Inc. 11,500 7/21 25.00 28,404 17,250 Newbridge Networks Corp. 7,800 3/23 70.00 41,690 975 Newbridge Networks Corp. 2,900 6/22 65.00 4,263 544 Nokia Corp., A Shares, Sponsored ADR 9,800 1/20 85.00 70,754 1,225 Novellus Systems, Inc. 8,400 3/23 57.50 95,421 525 Outback Steakhouse, Inc. 10,000 2/23 30.00 17,943 11,875 Outback Steakhouse, Inc. 10,000 5/18 35.00 8,780 8,125 SGS-Thomson Microelectronics NV 1,800 4/20 100.00 16,145 450 Sabre Group Holdings, Inc. 6,400 5/18 40.00 14,608 1,200 SkyWest, Inc. 13,000 4/20 22.50 20,734 97,500 Symantec Corp. 17,600 1/19 20.00 54,470 45,100 Symantec Corp. 17,600 4/18 25.00 43,471 36,300 Symantec Corp. 17,600 7/20 30.00 58,870 34,100 Transocean Offshore, Inc. 7,000 2/23 60.00 36,539 4,375 U S West Communications Group 10,000 4/21 47.50 20,324 13,750 United Healthcare Corp. 8,200 6/23 60.00 25,378 15,375 Weatherford Enterra, Inc. 5,000 3/23 50.00 11,566 7,186 WellPoint Health Networks, Inc. 2,300 1/19 50.00 12,581 432 West Marine, Inc. 13,800 1/20 30.00 20,285 1,725 Western Atlas, Inc. 4,800 3/23 85.00 26,855 50,400 Xerox Corp. 8,000 4/20 90.00 19,260 5,500 ----------- ------------- $ 1,797,849 $ 1,659,525 ----------- ------------- ----------- -------------
2. Non-income producing security. 3. Interest or dividend is paid in kind. 4. Identifies issues considered to be illiquid or restricted - See Note 6 of Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (CONTINUED) 5. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: AUD - Australian Dollar IEP - Irish Punt CAD - Canadian Dollar NZD - New Zealand Dollar DKK - Danish Krone PLZ - Polish Zloty GBP - British Pound Sterling ZAR - South African Rand
6. When-issued security to be delivered and settled after December 31, 1997. 7. Represents the current interest rate for a variable rate security. 8. Represents the current interest rate for an increasing rate security. 9. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $5,935,350 or 0.93% of the Fund's net assets as of December 31, 1997. 10. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 11. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1997
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- COMMON STOCKS - 75.0% - --------------------------------------------------------------- BASIC MATERIALS - 1.3% - --------------------------------------------------------------- CHEMICALS - 0.5% Minerals Technologies, Inc. 100,000 $ 4,543,750 - --------------------------------------------------------------- GOLD & PLATINUM - 0.4% Newmont Mining Corp. 120,500 3,539,687 - --------------------------------------------------------------- METALS - 0.4% Cia de Minas Buenaventura SA, Sponsored ADR 46,000 736,000 - --------------------------------------------------------------- De Beers Consolidated Mines Ltd., ADR 150,400 3,073,800 ------------ 3,809,800 - --------------------------------------------------------------- CONSUMER CYCLICALS - 14.3% - --------------------------------------------------------------- AUTOS & HOUSING - 3.1% Brazil Realty SA, GDR(1) 60,000 1,236,534 - --------------------------------------------------------------- Brisa-Auto Estradas de Portugal SA(2) 70,300 2,521,088 - --------------------------------------------------------------- IRSA Inversiones y Representaciones SA 1,714,678 6,379,770 - --------------------------------------------------------------- Porsche AG, Preference 11,000 18,475,643 - --------------------------------------------------------------- Solidere, GDR(1) 110,000 1,443,750 ------------ 30,056,785 - --------------------------------------------------------------- LEISURE & ENTERTAINMENT - 5.7% Callaway Golf Co. 220,800 6,306,600 - --------------------------------------------------------------- Corporacion Interamericana de Entretenimiento SA, Cl. B(2) 434,200 3,371,566 - --------------------------------------------------------------- Granada Group plc 406,200 6,215,772 - --------------------------------------------------------------- International Game Technology 350,000 8,837,500 - --------------------------------------------------------------- Nintendo Co. Ltd. 300,000 29,533,670 - --------------------------------------------------------------- Resorts World Berhad 563,000 949,080 ------------ 55,214,188 - --------------------------------------------------------------- MEDIA - 4.2% Canal Plus 80,100 14,899,261 - --------------------------------------------------------------- Grupo Televisa SA, Sponsored GDR(1) 267,100 10,333,431 - --------------------------------------------------------------- Havas SA 200,000 14,395,277 - --------------------------------------------------------------- Reed International plc 33,200 333,227 ------------ 39,961,196 - --------------------------------------------------------------- RETAIL: GENERAL - 1.2% Credit Saison Co. Ltd. 290,000 7,181,912 - --------------------------------------------------------------- PT Matahari Putra Prima(2) 542,000 46,019 - --------------------------------------------------------------- Sonae Investimentos 118,000 4,777,910 ------------ 12,005,841 - --------------------------------------------------------------- RETAIL: SPECIALTY - 0.1% Giordano International Ltd. 2,100,000 725,001
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- RETAIL: SPECIALTY (CONTINUED) Wolford AG 4,550 $ 275,140 ------------ 1,000,141 - --------------------------------------------------------------- CONSUMER NON-CYCLICALS - 13.5% - --------------------------------------------------------------- BEVERAGES - 2.6% Cadbury Schweppes plc 1,000,000 10,094,545 - --------------------------------------------------------------- Cia Cervejaria Brahma, Preference 4,700,000 3,158,546 - --------------------------------------------------------------- Diageo plc 700,000 6,432,701 - --------------------------------------------------------------- Fraser & Neave Ltd. 127,000 550,228 - --------------------------------------------------------------- South African Breweries Ltd. 178,900 4,411,516 ------------ 24,647,536 - --------------------------------------------------------------- FOOD - 3.3% Cresud SA, Sponsored ADR(2) 95,000 1,876,250 - --------------------------------------------------------------- Dairy Farm International Holdings Ltd. 7,080,216 7,646,633 - --------------------------------------------------------------- Disco SA, Sponsored ADR(2) 93,200 4,188,175 - --------------------------------------------------------------- Great Atlantic & Pacific Tea Co., Inc. (The) 593,300 17,613,594 ------------ 31,324,652 - --------------------------------------------------------------- HEALTHCARE/DRUGS - 4.0% Amgen, Inc.(2) 150,000 8,118,750 - --------------------------------------------------------------- BioChem Pharma, Inc.(2) 198,900 4,152,037 - --------------------------------------------------------------- Genzyme Corp. (General Division)(2) 200,000 5,550,000 - --------------------------------------------------------------- Gilead Sciences, Inc.(2) 72,700 2,780,775 - --------------------------------------------------------------- Glaxo Wellcome plc, Sponsored ADR 200,000 9,575,000 - --------------------------------------------------------------- Novartis AG 5,000 8,124,502 ------------ 38,301,064 - --------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 1.3% Gehe AG 69,990 3,542,235 - --------------------------------------------------------------- United States Surgical Corp. 307,000 8,998,937 ------------ 12,541,172 - --------------------------------------------------------------- HOUSEHOLD GOODS - 2.3% Wella AG, Preference 29,900 21,950,532 - --------------------------------------------------------------- TOBACCO - 0.0% PT Gudang Garam 79,500 125,625 - --------------------------------------------------------------- PT Hanjaya Mandala Sampoerna 100,000 78,302 ------------ 203,927 - --------------------------------------------------------------- ENERGY - 2.0% - --------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 1.6% Coflexip SA, Sponsored ADR 70,000 3,885,000 - --------------------------------------------------------------- Global Marine, Inc.(2) 100,000 2,450,000 - --------------------------------------------------------------- Transocean Offshore, Inc. 120,818 5,821,917
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- ENERGY SERVICES & PRODUCERS (CONTINUED) Western Atlas, Inc.(2) 49,300 $ 3,648,200 ------------ 15,805,117 - --------------------------------------------------------------- OIL-INTEGRATED - 0.4% British Petroleum Co. plc, ADR 51,818 4,129,247 - --------------------------------------------------------------- FINANCIAL - 17.6% - --------------------------------------------------------------- BANKS - 14.1% Amalgamated Banks of South Africa Ltd. 150,000 863,069 - --------------------------------------------------------------- Banco Bradesco SA, Preference 655,260,951 6,458,550 - --------------------------------------------------------------- Banco Espirito Santo e Comercial de Lisboa SA 90,000 2,681,235 - --------------------------------------------------------------- Banco Frances del Rio de la Plata SA, Sponsored ADR 63,250 1,731,469 - --------------------------------------------------------------- Banco Latinoamericano de Exportaciones SA, Cl. E 66,100 2,734,887 - --------------------------------------------------------------- Banco Pinto & Sotto Mayor SA 131,700 1,887,626 - --------------------------------------------------------------- Banco Rio de la Plata SA, ADR(2) 223,300 3,126,200 - --------------------------------------------------------------- Bankers Trust New York Corp. 40,000 4,497,500 - --------------------------------------------------------------- Banque Libanaise Pour Le Comm SAL, GDR, Cl. B(2) 50,000 907,500 - --------------------------------------------------------------- Barclays plc 97,000 2,582,394 - --------------------------------------------------------------- Cie Financiere de Paribas, Series A 180,300 15,674,711 - --------------------------------------------------------------- Credito Italiano 4,000,000 12,341,654 - --------------------------------------------------------------- Deutsche Bank AG 150,000 10,494,743 - --------------------------------------------------------------- Industrial Finance Corp. 1,048,000 161,068 - --------------------------------------------------------------- Istituto Bancario San Paolo di Torino 1,000,000 9,558,843 - --------------------------------------------------------------- Long-Term Credit Bank of Japan Ltd. (The) 2,043,000 3,283,983 - --------------------------------------------------------------- National Westminster Bank plc 487,600 8,099,201 - --------------------------------------------------------------- Northern Trust Corp. 7,600 530,100 - --------------------------------------------------------------- PT Pan Indonesia Bank 2,908,500 370,422 - --------------------------------------------------------------- Societe Generale 97,000 13,221,713 - --------------------------------------------------------------- UBS, Bearer 20,000 28,960,249 - --------------------------------------------------------------- Unibanco-Uniao de Bancos Brasileiros SA, Sponsored GDR Representing 500 Units of one Preferred Share of Unibanco and one Preferred Share of Unibanco Holdings SA(2) 145,500 4,683,281 ------------ 134,850,398 - --------------------------------------------------------------- DIVERSIFIED FINANCIAL - 3.1% American Express Co. 24,500 2,186,625 - --------------------------------------------------------------- Associates First Capital Corp., Cl. A 160,000 11,380,000 - --------------------------------------------------------------- Fannie Mae 150,000 8,559,375 - --------------------------------------------------------------- First NIS Regional Fund(1)(2) 180,000 3,105,000 - --------------------------------------------------------------- Housing Development Finance Corp. Ltd.(3) 22,290 1,749,542 - --------------------------------------------------------------- Industrial Credit & Investment Corp. of India Ltd., GDR(1) 162,500 2,112,500 - --------------------------------------------------------------- ING Groep NV 10,500 442,328 ------------ 29,535,370
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- INSURANCE - 0.4% American International Group, Inc. 23,700 $ 2,577,375 - --------------------------------------------------------------- Reinsurance Australia Corp. Ltd. 577,000 1,503,815 ------------ 4,081,190 - --------------------------------------------------------------- INDUSTRIAL - 6.7% - --------------------------------------------------------------- INDUSTRIAL SERVICES - 5.4% Adecco SA 40,000 11,614,266 - --------------------------------------------------------------- Atos SA(2) 50,000 6,449,616 - --------------------------------------------------------------- Grupo Elektra SA de CV, CPO 1,461,000 2,577,017 - --------------------------------------------------------------- IHC Caland NV 45,000 2,335,210 - --------------------------------------------------------------- Rentokil Group plc 2,500,000 11,065,332 - --------------------------------------------------------------- UNOVA, Inc.(2) 49,300 810,369 - --------------------------------------------------------------- VBH Holding AG 247,000 3,296,918 - --------------------------------------------------------------- WPP Group plc 3,000,000 13,303,080 ------------ 51,451,808 - --------------------------------------------------------------- MANUFACTURING - 1.0% Powerscreen International plc 738,303 7,379,944 - --------------------------------------------------------------- Societe BIC SA 35,932 2,623,885 ------------ 10,003,829 - --------------------------------------------------------------- TRANSPORTATION - 0.3% Guangshen Railway Co. Ltd., Sponsored ADR 220,200 2,958,938 - --------------------------------------------------------------- TECHNOLOGY - 16.6% - --------------------------------------------------------------- AEROSPACE/DEFENSE - 1.3% Rolls-Royce plc 3,164,038 12,234,373 - --------------------------------------------------------------- COMPUTER HARDWARE - 2.6% International Business Machines Corp. 100,000 10,456,250 - --------------------------------------------------------------- Iomega Corp.(2) 700,000 8,706,250 - --------------------------------------------------------------- Sun Microsystems, Inc.(2) 142,000 5,662,250 ------------ 24,824,750 - --------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 4.2% Cap Gemini SA 300,000 24,609,940 - --------------------------------------------------------------- First Data Corp. 87,000 2,544,750 - --------------------------------------------------------------- Microsoft Corp.(2) 58,000 7,496,500 - --------------------------------------------------------------- Misys plc 194,914 5,869,030 ------------ 40,520,220 - --------------------------------------------------------------- ELECTRONICS - 3.4% Intel Corp. 20,000 1,405,000 - --------------------------------------------------------------- Keyence Corp. 27,500 4,082,030 - --------------------------------------------------------------- National Semiconductor Corp.(2) 350,000 9,078,125 - --------------------------------------------------------------- Sony Corp. 200,000 17,843,259 ------------ 32,408,414
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 5.1% Alcatel Alsthom SA 150,000 $19,074,573 - --------------------------------------------------------------- Cisco Systems, Inc.(2) 61,650 3,436,988 - --------------------------------------------------------------- Newbridge Networks Corp.(2) 80,000 2,790,000 - --------------------------------------------------------------- QUALCOMM, Inc.(2) 231,400 11,685,700 - --------------------------------------------------------------- SK Telecom Co. Ltd. 8,457 2,586,698 - --------------------------------------------------------------- Telecom Italia Mobile SpA 2,000,000 9,236,444 ------------ 48,810,403 - --------------------------------------------------------------- UTILITIES - 3.0% - --------------------------------------------------------------- TELEPHONE UTILITIES - 3.0% CPT Telefonica del Peru SA, Cl. B 3,400,031 7,595,917 - --------------------------------------------------------------- Portugal Telecom SA 375,000 17,419,621 - --------------------------------------------------------------- Videsh Sanchar Nigam Ltd., GDR 250,000 3,506,250 ------------ 28,521,788 ------------ Total Common Stocks (Cost $617,877,896) 719,236,116 - --------------------------------------------------------------- PREFERRED STOCKS - 0.3% - --------------------------------------------------------------- Marschollek, Lautenschlaeger und Partner AG, Non-Vtg. Preferred Stock (Cost $1,603,264) 13,257 3,428,452 UNITS - --------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% - --------------------------------------------------------------- Banco Bradesco SA, Preference, Rts. Exp. 2/98 28,015,796 -- - --------------------------------------------------------------- American Satellite Network, Inc. Wts., Exp. 6/99 6,250 -- - --------------------------------------------------------------- PT Pan Indonesia Bank Wts., Exp. 6/00 415,500 3,685 ------------ Total Rights, Warrants and Certificates (Cost $0) 3,685 PRINCIPAL AMOUNT - --------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 7.7% - --------------------------------------------------------------- U.S. Treasury Bonds: STRIPS, 6.98%, 11/15/18(4)(5) $ 86,770,000 24,763,898 STRIPS, 6.93%, 8/15/19(5) 180,000,000 48,997,800 ------------ Total U.S. Government Obligations (Cost $61,980,756) 73,761,698 - --------------------------------------------------------------- REPURCHASE AGREEMENTS - 17.3% - --------------------------------------------------------------- Repurchase agreement with Smith, Barney, Harris, Upham & Co., Inc., 6.625%, dated 12/31/97, to be repurchased at $165,760,987 on 1/2/98, collateralized by U.S. Treasury Bonds, 8.875%-11.25%, 2/15/15-2/15/19, with a value of $169,746,221 (Cost $165,700,000) 165,700,000 165,700,000 - --------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $847,161,916) 100.3% 962,129,951 - --------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.3) (3,019,731 ) ------------ ------------ NET ASSETS 100.0% $959,110,220 ------------ ------------ ------------ ------------
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (CONTINUED) 1. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $18,231,215 or 1.90% of the Fund's net assets as of December 31, 1997. 2. Non-income producing security. 3. Identifies issues considered to be illiquid or restricted - See Note 7 of Notes to Financial Statements. 4. Securities with an aggregate market value of $8,561,910 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 5. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. Distribution of investments by country of issue, as a percentage of total investments at value, is as follows:
COUNTRY MARKET VALUE PERCENT - ------------------------------------------------------------ United States $411,474,565 42.8% - ------------------------------------------------------------ France 114,833,976 11.9 - ------------------------------------------------------------ Great Britain 97,313,846 10.1 - ------------------------------------------------------------ Japan 61,924,854 6.4 - ------------------------------------------------------------ Germany 61,188,523 6.4 - ------------------------------------------------------------ Switzerland 48,699,017 5.1 - ------------------------------------------------------------ Italy 31,136,942 3.2 - ------------------------------------------------------------ Portugal 29,287,479 3.0 - ------------------------------------------------------------ Argentina 17,301,863 1.8 - ------------------------------------------------------------ Mexico 16,282,015 1.7 - ------------------------------------------------------------ Brazil 15,536,910 1.6 - ------------------------------------------------------------ South Africa 8,348,385 0.9 - ------------------------------------------------------------ Peru 8,331,917 0.9 - ------------------------------------------------------------ Singapore 8,196,861 0.9 - ------------------------------------------------------------ India 7,368,292 0.8 - ------------------------------------------------------------ Canada 4,152,037 0.4 - ------------------------------------------------------------ Russia 3,105,000 0.3 - ------------------------------------------------------------ China 2,958,938 0.3 - ------------------------------------------------------------ The Netherlands 2,777,538 0.3 - ------------------------------------------------------------ Panama 2,734,888 0.3 - ------------------------------------------------------------ Korea, Republic of (South) 2,586,698 0.3 - ------------------------------------------------------------ Lebanon 2,351,250 0.2 - ------------------------------------------------------------ Australia 1,503,815 0.2 - ------------------------------------------------------------ Malaysia 949,080 0.1 - ------------------------------------------------------------ Hong Kong 725,001 0.1 - ------------------------------------------------------------ Indonesia 624,053 0.1 - ------------------------------------------------------------ Austria 275,140 0.0 - ------------------------------------------------------------ Thailand 161,068 0.0 ------------- ------- Total $962,129,951 100.0% ------------- ------- ------------- -------
See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1997
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 22.6% - -------------------------------------------------------------------------- GOVERNMENT AGENCY - 18.7% - -------------------------------------------------------------------------- FHLMC/FNMA/SPONSORED - 9.2% Federal Home Loan Mortgage Corp.: Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 151, Cl. F, 9%, 5/15/21 $ 1,500,000 $ 1,627,931 Interest-Only Stripped Mtg.-Backed Security, Series 177, Cl. B, 13.03%, 7/1/26(2) 11,852,995 3,465,149 - -------------------------------------------------------------------------- Federal National Mortgage Assn.: 6.375%, 8/15/07 AUD 1,250,000 819,614 7%, 1/1/13(3) 10,000,000 10,146,900 7%, 9/26/00 NZD 1,120,000 632,904 7.50%, 8/1/25 928,642 952,350 Interest-Only Stripped Mtg.-Backed Security, Trust 249, Cl. 2, 4.99%, 10/25/23(2) 3,728,368 1,138,318 Sr. Unsub. Medium-Term Nts., 6.50%, 7/10/02 AUD 430,000 287,024 ------------- 19,070,190 - -------------------------------------------------------------------------- GNMA/GUARANTEED - 9.5% Government National Mortgage Assn.: 6.875%, 11/20/25 556,633 571,679 7%, 1/1/28(3) 10,000,000 10,071,900 7.50%, 2/15/27 4,591,784 4,706,257 8%, 11/15/25 2,508,396 2,601,934 8%, 5/15/26 1,652,123 1,713,202 ------------- 19,664,972 - -------------------------------------------------------------------------- PRIVATE - 3.9% - -------------------------------------------------------------------------- COMMERCIAL - 2.8% Amresco Commercial Mortgage Funding I Corp., Multiclass Mtg. Pass- Through Certificates, Series 1997-C1, Cl. E, 7%, 6/17/29(4) 100,000 92,438 - -------------------------------------------------------------------------- Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates: Series 1997-D5, Cl. B1, 6.93%, 2/14/41 300,000 273,984 Series 1997-D5, Cl. B2, 6.93%, 2/14/41 250,000 223,906 - -------------------------------------------------------------------------- CRIIMI MAE Trust I, Collateralized Mtg. Obligations, Series 1996-C1, Cl. A-2, 7.56%, 8/30/05(5) 100,000 102,359 - -------------------------------------------------------------------------- CS First Boston Mortgage Securities Corp., Mtg. Pass-Through Certificates, Series 1997-C2, Cl. F, 7.46%, 1/17/35 150,000 140,859 - -------------------------------------------------------------------------- FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1994-C1, Cl. 2-G, 8.70%, 9/25/25(4) 153,594 157,695 - -------------------------------------------------------------------------- First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates: Series 1997-CHL1, 8.116%, 2/25/11(4)(6) 600,000 510,780 Series 1997-CHL1, 8.116%, 5/25/08(4)(6) 350,000 355,005 - -------------------------------------------------------------------------- General Motors Acceptance Corp., Collateralized Mtg. Obligations: Series 1997-C1, Cl. G, 7.414%, 11/15/11 440,000 411,400 Series 1997-C2, Cl. F, 6.75%, 4/16/29 250,000 214,297
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- COMMERCIAL (CONTINUED) General Motors Acceptance Corp., Interest-Only Stripped Mtg.-Backed Security, Series 1997-C1, Cl. X, 8.91%, 7/15/27(2) $ 4,295,474 $ 432,232 - -------------------------------------------------------------------------- Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates, Series 1995-C2, Cl. D, 8.189%, 6/15/21(6) 367,685 375,958 - -------------------------------------------------------------------------- Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates: Series 1996-C1, Cl. F, 7.51%, 2/15/28(4)(6) 162,744 131,111 Series 1997-HF1, Cl. F, 6.86%, 2/15/10(4) 150,000 136,688 Series 1997-RR, Cl. D, 7.74%, 4/30/39 50,000 48,250 Series 1997-RR, Cl. F, 7.74%, 4/30/39 300,000 235,125 Series 1997-XL1, Cl. G, 7.695%, 10/3/30(6) 290,000 282,569 - -------------------------------------------------------------------------- NationsCommercial Corp., NB Commercial Mtg. Pass-Through Certificates, Series-DMC, Cl. C, 8.921%, 8/12/11(5) 200,000 213,563 - -------------------------------------------------------------------------- Nykredit AS, Mtg.-Backed Security, Series ANN, 6%, 10/1/26 DKK 3,243,000 461,546 - -------------------------------------------------------------------------- Realkredit Danmark, Mtg.-Backed Security, 6%, 10/1/26 DKK 3,245,000 461,120 - -------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates: Series 1992-CHF, Cl. D, 8.25%, 12/25/20 121,210 121,133 Series 1993-C1, Cl. D, 9.45%, 5/25/24 91,000 91,825 Series 1994-C2, Cl. E, 8%, 4/25/25 210,423 212,342 - -------------------------------------------------------------------------- Structured Asset Securities Corp.: Commercial Mtg. Pass-Through Certificates, Series 1997-LLI, Cl. F, 7.30%, 4/12/12(4) 200,000 185,813 Multiclass Pass-Through Certificates, Series 1995-C4, Cl. E, 8.77%, 6/25/26(4)(6) 46,290 47,765 ------------- 5,919,763 - -------------------------------------------------------------------------- MULTI-FAMILY - 0.8% Mortgage Capital Funding, Inc.: Commercial Mtg. Pass-Through Certificates, Series 1997-MC1, Cl. F, 7.452%, 5/20/07(4) 63,720 60,693 Multifamily Mtg. Pass-Through Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06(5) 800,000 760,250 - -------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Series 1996-CL, Cl. F, 9.19%, 1/20/28(6) 1,000,000 869,375 ------------- 1,690,318 - -------------------------------------------------------------------------- RESIDENTIAL - 0.3% CS First Boston Mortgage Securities Corp., Mtg. Pass-Through Certificates: Series 1997-C1, Cl. F, 7.50%, 6/20/13(4) 100,000 97,000 Series 1997-C1, Cl. G, 7.50%, 6/20/14(4) 100,000 92,470 Series 1997-C1, Cl. H, 7.50%, 8/20/14(4) 60,000 47,376 Series 1997-C2, Cl. H, 7.46%, 1/17/35 100,000 79,969 - -------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Series 1996-B, Cl. 1, 7.136%, 4/25/26 393,408 277,845 ------------- 594,660 ------------- Total Mortgage-Backed Obligations (Cost $46,435,758) 46,939,903
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 29.3% - -------------------------------------------------------------------------- U.S. Treasury Bonds: 10.75%, 2/15/03 $ 5,600,000 $ 6,828,506 11.25%, 2/15/15 690,000 1,081,360 11.625%, 11/15/02 1,085,000 1,352,860 11.625%, 11/15/04 7,215,000 9,573,410 11.875%, 11/15/03 2,495,000 3,245,840 13.125%, 5/15/01 2,800,000 3,428,253 6%, 2/15/26(7) 730,000 729,316 6.50%, 11/15/26 3,170,000 3,384,967 6.875%, 8/15/25(8) 1,100,000 1,226,501 8.125%, 8/15/19 163,000 204,056 9.375%, 2/15/06 900,000 1,107,844 - -------------------------------------------------------------------------- U.S. Treasury Nts.: 10.75%, 5/15/03 8,568,000 10,522,584 14.25%, 2/15/02 400,000 523,875 6.25%, 10/31/01(8)(9) 6,985,000 7,109,424 6.25%, 2/15/03 3,325,000 3,401,894 7.25%, 5/15/04 935,000 1,009,508 7.50%, 10/31/99 1,750,000 1,804,689 7.50%, 5/15/02 4,020,000 4,293,867 ------------- Total U.S. Government Obligations (Cost $60,289,411) 60,828,754 - -------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 20.1% - -------------------------------------------------------------------------- ARGENTINA - 1.8% Argentina (Republic of) Bonds: 5%, 12/20/02 JPY 60,000,000 429,692 Bonos de Consolidacion de Deudas, Series I, 5.66%, 4/1/01(6) 143,934 135,611 - -------------------------------------------------------------------------- Argentina (Republic of) Floating Rate Bonds, Series L, 6.69%, 3/31/05(6) 172,800 154,872 - -------------------------------------------------------------------------- Argentina (Republic of) Nts., Series REGS, 11.75%, 2/12/07 ARP 440,000 416,976 - -------------------------------------------------------------------------- Argentina (Republic of) Par Bonds, 5.50%, 3/31/23(10) 770,000 566,427 - -------------------------------------------------------------------------- Argentina (Republic of) Unsec. Unsub. Medium-Term Nts.: 5.50%, 3/27/01 JPY 170,000,000 1,290,614 8.75%, 7/10/02 ARP 320,000 277,651 - -------------------------------------------------------------------------- Banco Hipotecario Nacional (Argentina) Medium-Term Nts., 10.625%, 8/7/06(9) 400,000 406,000 ------------- 3,677,843 - -------------------------------------------------------------------------- AUSTRALIA - 1.8% New South Wales Treasury Corp. Gtd. Bonds, 8%, 12/1/01 AUD 1,610,000 1,126,815 - -------------------------------------------------------------------------- Queensland Treasury Corp. Exchangeable Gtd. Nts.: 8%, 8/14/01 AUD 1,858,000 1,301,406 8%, 9/14/07 AUD 1,560,000 1,141,743 - -------------------------------------------------------------------------- Treasury Corp. of Victoria Gtd. Bonds, 8.25%, 10/15/03 AUD 115,000 82,985 ------------- 3,652,949 - -------------------------------------------------------------------------- BRAZIL - 1.4% Banco Estado Minas Gerais, 8.25%, 2/10/00 250,000 238,125
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- BRAZIL (CONTINUED) Brazil (Federal Republic of) Capitalization Bonds, 8%, 4/15/14 $ 2,753,727 $ 2,163,397 - -------------------------------------------------------------------------- Brazil (Federal Republic of) Eligible Interest Bonds, 6.69%, 4/15/06(6) 686,000 593,390 ------------- 2,994,912 - -------------------------------------------------------------------------- BULGARIA - 0.2% Bulgaria (Republic of) Front-Loaded Interest Reduction Bearer Bonds, Tranche A, 2.30%, 7/28/12(10) 510,000 311,100 - -------------------------------------------------------------------------- Bulgaria (Republic of) Interest Arrears Bonds, 6.69%, 7/28/11(6) 160,000 117,200 ------------- 428,300 - -------------------------------------------------------------------------- CANADA - 1.2% Canada (Government of) Bonds: 9.75%, 6/1/01 CAD 1,995,000 1,585,188 Series A-33, 11.50%, 9/1/00 CAD 1,100,000 886,169 ------------- 2,471,357 - -------------------------------------------------------------------------- COLOMBIA - 0.2% Financiera Energetica Nacional SA Nts., 9.375%, 6/15/06 500,000 504,688 - -------------------------------------------------------------------------- DENMARK - 0.5% Denmark (Kingdom of) Bonds, 7%, 11/10/24 DKK 5,880,000 958,015 - -------------------------------------------------------------------------- ECUADOR - 0.3% Ecuador (Republic of) Disc. Bonds, 6.688%, 2/28/25(6) 300,000 226,500 - -------------------------------------------------------------------------- Ecuador (Republic of) Past Due Interest Bonds, 6.688%, 2/27/15(6) 601,458 393,955 ------------- 620,455 - -------------------------------------------------------------------------- GERMANY - 0.5% Germany (Republic of) Bonds, Series 94, 6.25%, 1/4/24 DEM 1,630,000 952,503 - -------------------------------------------------------------------------- GREAT BRITAIN - 1.3% United Kingdom Treasury Nts.: 7.25%, 3/30/98 GBP 805,000 1,324,549 7.75%, 9/8/06 GBP 730,000 1,308,496 ------------- 2,633,045 - -------------------------------------------------------------------------- HUNGARY - 0.5% Hungary (Government of) Bonds: Series 98-I, 23.50%, 5/17/98 HUF 160,000,000 793,312 Series 99-G, 16.50%, 7/24/99 HUF 44,000,000 208,991 ------------- 1,002,303 - -------------------------------------------------------------------------- IRELAND - 0.4% Ireland (Government of) Bonds, 9.25%, 7/11/03 IEP 255,000 434,263 - -------------------------------------------------------------------------- National Treasury Management Agency (Irish Government) Bonds, 8%, 8/18/06 IEP 235,000 390,495 ------------- 824,758 - -------------------------------------------------------------------------- ITALY - 1.3% Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali: 10.50%, 4/1/00 ITL 550,000,000 346,862 10.50%, 4/1/05 ITL 600,000,000 438,293 12%, 1/1/02 ITL 1,535,000,000 1,079,191
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- ITALY (CONTINUED) Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali: (Continued) 9%, 10/1/03 ITL 1,360,000,000 $ 907,310 ------------- 2,771,656 - -------------------------------------------------------------------------- JORDAN - 0.2% Hashemite (Kingdom of Jordan) Disc. Bonds, 6.875%, 12/23/23(6) 500,000 417,031 - -------------------------------------------------------------------------- MEXICO - 1.9% Banco Nacional de Comercio Exterior SNC International Finance BV Gtd. Registered Bonds, 11.25%, 5/30/06 265,000 295,475 - -------------------------------------------------------------------------- United Mexican States Bonds: 10.375%, 1/29/03 DEM 725,000 441,723 11.375%, 9/15/16 880,000 998,800 16.50%, 9/1/08(4) GBP 20,000 48,704 - -------------------------------------------------------------------------- United Mexican States Collateralized Fixed Rate Par Bonds: Series B, 6.25%, 12/31/19 600,000 502,500 Series W-A, 6.25%, 12/31/19 250,000 209,375 Series W-B, 6.25%, 12/31/19 1,600,000 1,340,000 - -------------------------------------------------------------------------- United Mexican States Petroleos Mexicanos Gtd. Unsec. Unsub. Nts., 7.875%, 3/2/99 CAD 200,000 141,682 ------------- 3,978,259 - -------------------------------------------------------------------------- NEW ZEALAND - 1.1% New Zealand (Government of) Bonds, 7%, 7/15/09 NZD 3,795,000 2,213,013 - -------------------------------------------------------------------------- NORWAY - 0.4% Norway (Government of) Bonds, 9.50%, 10/31/02 NOK 4,680,000 750,673 - -------------------------------------------------------------------------- PANAMA - 0.1% Panama (Government of) Past Due Interest Debs., 6.89%, 7/17/16(6) 225,968 184,447 - -------------------------------------------------------------------------- PERU - 0.1% Peru (Republic of) Front-Loaded Interest Reduction Bonds, 3.25%, 3/7/17(6) 455,000 269,588 - -------------------------------------------------------------------------- PHILIPPINES - 0.0% Philippines (Republic of) Par Bonds, Series B, 6.50%, 12/1/17(4)(10) 110,000 93,088 - -------------------------------------------------------------------------- POLAND - 0.9% Poland (Republic of) Bonds: 14%, 2/12/00 PLZ 2,160,000 515,930 15%, 10/12/99 PLZ 1,100,000 273,321 16%, 2/12/99 PLZ 2,150,000 559,562 16%, 6/12/98 PLZ 650,000 176,518 - -------------------------------------------------------------------------- Poland (Republic of) Past Due Interest Bonds, 4%, 10/27/14(10) 440,000 381,150 ------------- 1,906,481 - -------------------------------------------------------------------------- RUSSIA - 0.5% City of St. Petersburg Sr. Unsub. Nts., 9.50%, 6/18/02(5) 180,000 164,925 - -------------------------------------------------------------------------- Ministry of Finance (Russian Government) Unsec. Unsub. Bonds, 10%, 6/26/07(5) 320,000 297,280 - -------------------------------------------------------------------------- Russia (Government of) Bonds, 22%, 4/28/99(11) RUR 1,585,000,000 227,391
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- RUSSIA (CONTINUED) SBS Agro Finance BV Bonds, 10.25%, 7/21/00 $ 339,000 $ 300,015 ------------- 989,611 - -------------------------------------------------------------------------- SOUTH AFRICA - 0.7% South Africa (Republic of) Bonds: Series 150, 12%, 2/28/05 ZAR 3,605,570 684,172 Series 162, 12.50%, 1/15/02 ZAR 1,950,240 385,468 Series 175, 9%, 10/15/02 ZAR 2,046,800 350,365 ------------- 1,420,005 - -------------------------------------------------------------------------- SPAIN - 0.9% Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado: 10.30%, 6/15/02 ESP 21,500,000 170,029 10.50%, 10/30/03 ESP 59,550,000 491,550 11.45%, 8/30/98 ESP 12,000,000 82,034 12.25%, 3/25/00 ESP 141,000,000 1,070,298 ------------- 1,813,911 - -------------------------------------------------------------------------- SWEDEN - 0.4% Sweden (Kingdom of) Bonds, Series 1037, 8%, 8/15/07 SEK 6,300,000 910,933 - -------------------------------------------------------------------------- TURKEY - 0.4% Turkey (Republic of) Treasury Bills, Zero Coupon, 92.27%, 3/4/98(12) TRL 232,300,000,000 938,223 - -------------------------------------------------------------------------- VENEZUELA - 1.1% Venezuela (Republic of) Bonds, 9.25%, 9/15/27 970,000 871,545 - -------------------------------------------------------------------------- Venezuela (Republic of) Collateralized Par Bonds, Series W-A, 6.75%, 3/31/20 1,000,000 870,000 - -------------------------------------------------------------------------- Venezuela (Republic of) Disc. Bonds, Series DL, 6.75%, 12/18/07(6) 476,190 428,274 - -------------------------------------------------------------------------- Venezuela (Republic of) New Money Bonds, Series A, 6.91%, 12/18/05(6) 250,000 223,750 ------------- 2,393,569 ------------- Total Foreign Government Obligations (Cost $43,127,415) 41,771,616 - -------------------------------------------------------------------------- LOAN PARTICIPATIONS - 0.6% - -------------------------------------------------------------------------- GS Moskovskaya, 19% Nts., 6/12/98(4) 265,000 258,879 - -------------------------------------------------------------------------- Jamaica (Government of) 1990 Refinancing Agreement Nts., Tranche A, 6.56%, 10/16/00(4)(6) 37,500 35,625 - -------------------------------------------------------------------------- Russian (Government of) Principal Loans Debs., 6.719%, 6/2/98(3)(4)(6) 1,535,000 949,781 ------------- Total Loan Participations (Cost $1,252,430) 1,244,285 - -------------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 28.2% - -------------------------------------------------------------------------- BASIC INDUSTRY - 2.9% - -------------------------------------------------------------------------- CHEMICALS - 1.0% ClimaChem, Inc., 10.75% Gtd. Sr. Unsec. Nts., 12/1/07(5) 150,000 155,250 - -------------------------------------------------------------------------- Harris Chemical North America, Inc., 10.75% Gtd. Sr. Sub. Nts., 10/15/03 100,000 107,250 - -------------------------------------------------------------------------- ICO, Inc., 10.375% Sr. Nts., 6/1/07 50,000 53,875 - -------------------------------------------------------------------------- ISP Holdings, Inc., 9% Sr. Nts., Series B, 10/15/03 55,000 57,269
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- CHEMICALS (CONTINUED) Laroche Industries, Inc., 9.50% Sr. Sub. Nts., 9/15/07(5) $ 150,000 $ 148,500 - -------------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 140,000 155,750 - -------------------------------------------------------------------------- PCI Chemicals Canada, Inc., 9.25% Sr. Nts., 10/15/07(5) 175,000 173,250 - -------------------------------------------------------------------------- Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 200,000 202,500 - -------------------------------------------------------------------------- Polytama International Finance BV, 11.25% Gtd. Sec. Nts., 6/15/07 170,000 126,650 - -------------------------------------------------------------------------- Sovereign Specialty Chemicals, Inc., 9.50% Sr. Sub. Nts., 8/1/07(5) 425,000 437,750 - -------------------------------------------------------------------------- Sterling Chemicals Holdings, Inc., 0%/13.50% Sr. Disc. Nts., 8/15/08(13) 200,000 123,000 - -------------------------------------------------------------------------- Sterling Chemicals, Inc.: 11.25% Sr. Sub. Nts., 4/1/07 50,000 50,250 11.75% Sr. Unsec. Sub. Nts., 8/15/06(8) 200,000 205,000 ------------- 1,996,294 - -------------------------------------------------------------------------- CONTAINERS - 0.1% Consumers International, Inc., 10.25% Sr. Sec. Nts., 4/1/05(4) 250,000 275,000 - -------------------------------------------------------------------------- METALS/MINING - 0.2% Centaur Mining & Exploration Ltd., 11% Gtd. Sr. Nts., 12/1/07(4) 100,000 100,750 - -------------------------------------------------------------------------- Metallurg, Inc., 11% Sr. Nts., 12/1/07(5) 225,000 231,750 ------------- 332,500 - -------------------------------------------------------------------------- PAPER - 1.1% Asia Pulp & Paper International Finance Co., Zero Coupon Asian Currency Nts., 14.46%, 1/23/98(12) IDR 200,000,000 36,425 - -------------------------------------------------------------------------- Fletcher Challenge Finance U.S.A., Inc., 8.05% Debs., 6/15/03 NZD 80,000 44,890 - -------------------------------------------------------------------------- Fletcher Challenge Ltd.: 10% Cv. Unsec. Sub. Nts., 4/30/05 NZD 60,000 37,102 14.50% Cv. Sub. Nts., 9/30/00 NZD 60,000 39,251 - -------------------------------------------------------------------------- Florida Coast Paper Co. LLC, 12.75% First Mtg. Nts., 6/1/03 130,000 138,450 - -------------------------------------------------------------------------- Four M Corp., 12% Sr. Nts., Series B, 6/1/06(4) 125,000 133,125 - -------------------------------------------------------------------------- Gaylord Container Corp., 9.75% Sr. Nts., 6/15/07 200,000 195,000 - -------------------------------------------------------------------------- Indah Kiat International Finance Co. BV, 11.375% Gtd. Sec. Nts., 6/15/99 205,000 198,850 - -------------------------------------------------------------------------- Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 365,000 377,775 - -------------------------------------------------------------------------- Pindo Deli Finance Mauritius Ltd., 10.75% Gtd. Nts., 10/1/07(4) 125,000 108,125 - -------------------------------------------------------------------------- Repap New Brunswick, Inc., 9.063% First Priority Sr. Sec. Nts., 7/15/00(6) 200,000 198,000 - -------------------------------------------------------------------------- Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 450,000 459,000 - -------------------------------------------------------------------------- SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 200,000 223,000 - -------------------------------------------------------------------------- U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07 150,000 156,000 ------------- 2,344,993 - -------------------------------------------------------------------------- STEEL - 0.5% AK Steel Corp., 9.125% Sr. Nts., 12/15/06 350,000 360,500 - -------------------------------------------------------------------------- Algoma Steel, Inc., 12.375% First Mtg. Nts., 7/15/05 300,000 348,000 - -------------------------------------------------------------------------- Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01 100,000 109,250
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- STEEL (CONTINUED) Keystone Consolidated Industries, Inc., 9.625% Sr. Nts., 8/1/07(5) $ 200,000 $ 201,750 ------------- 1,019,500 - -------------------------------------------------------------------------- CONSUMER RELATED - 4.2% - -------------------------------------------------------------------------- CONSUMER PRODUCTS - 1.2% Coleman Escrow Corp., Zero Coupon Sr. First Priority Disc. Nts., 11.13%, 5/15/01(12) 305,000 203,587 - -------------------------------------------------------------------------- Dyersburg Corp., 9.75% Sr. Unsec. Sub. Nts., 9/1/07 75,000 78,750 - -------------------------------------------------------------------------- Holmes Products Corp., 9.875% Gtd. Nts., 11/15/07(5) 200,000 204,500 - -------------------------------------------------------------------------- Icon Fitness Corp., 0%/14% Sr. Disc. Nts., 11/15/06(4)(13) 200,000 114,000 - -------------------------------------------------------------------------- Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., Series B, 7/15/02 300,000 336,750 - -------------------------------------------------------------------------- IHF Holdings, Inc., 0%/15% Sr. Sub. Disc. Nts., Series B, 11/15/04(13) 250,000 218,750 - -------------------------------------------------------------------------- Indorayon International Finance Co. BV, 10% Gtd. Unsec. Unsub. Nts., 3/29/01(4) 100,000 89,000 - -------------------------------------------------------------------------- MacAndrews & Forbes Holdings, Inc., 13% Sub. Debs., 3/1/99(4) 131,000 132,146 - -------------------------------------------------------------------------- Pillowtex Corp., 9% Sr. Sub. Nts., 12/15/07(5) 200,000 206,000 - -------------------------------------------------------------------------- Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts., 10.88%, 3/15/01(12) 450,000 312,750 - -------------------------------------------------------------------------- Samsonite Corp., 11.125% Sr. Sub. Nts., 7/15/05 137,000 154,125 - -------------------------------------------------------------------------- Sealy Mattress Co., 9.875% Sr. Sub. Nts., 12/15/07(5) 100,000 103,000 - -------------------------------------------------------------------------- TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(4) 100,000 120,500 - -------------------------------------------------------------------------- Vitro SA, 13% Nts., 12/7/99(6) MXP 438,000 119,483 - -------------------------------------------------------------------------- Williams (J. B.) Holdings, Inc., 12% Sr. Nts., 3/1/04 100,000 106,500 ------------- 2,499,841 - -------------------------------------------------------------------------- FOOD/BEVERAGES/TOBACCO - 0.2% CFP Holdings, Inc., 11.625% Gtd. Sr. Nts., Series B, 1/15/04 15,000 15,075 - -------------------------------------------------------------------------- Del Monte Foods Co., 0%/12.50% Sr. Disc. Nts., 12/15/07(5)(13) 100,000 57,750 - -------------------------------------------------------------------------- Sparkling Spring Water Group Ltd., 11.50% Sr. Sub. Nts., 11/15/07(5) 200,000 207,000 - -------------------------------------------------------------------------- Windy Hill Pet Food, Inc., 9.75% Sr. Sub. Nts., 5/15/07 150,000 153,750 ------------- 433,575 - -------------------------------------------------------------------------- HEALTHCARE - 0.4% Genesis Health Ventures, Inc., 9.25% Sr. Sub. Nts., 10/1/06 30,000 30,712 - -------------------------------------------------------------------------- Integrated Health Services, Inc.: 10.25% Sr. Sub. Nts., 4/30/06 15,000 15,975 9.50% Sr. Sub. Nts., 9/15/07(5) 150,000 154,500 - -------------------------------------------------------------------------- Kinetics Concepts, Inc., 9.625% Sr. Sub. Nts., 11/1/07(5) 50,000 51,062 - -------------------------------------------------------------------------- Magellan Health Services, Inc., 11.25% Sr. Sub. Nts., Series A, 4/15/04 100,000 111,375 - -------------------------------------------------------------------------- Mariner Health Group, Inc., 9.50% Sr. Sub. Nts., Series B, 4/1/06(4) 100,000 104,000 - -------------------------------------------------------------------------- Sun Healthcare Group, Inc., 9.50% Sr. Sub. Nts., 7/1/07(5) 265,000 272,950 ------------- 740,574
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- HOTEL/GAMING - 1.8% Boyd Gaming Corp.: 9.25% Sr. Unsec. Gtd. Nts., 10/1/03 $ 100,000 $ 105,250 9.50% Sr. Unsec. Sub. Nts., 7/15/07 50,000 52,625 - -------------------------------------------------------------------------- Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 275,000 284,625 - -------------------------------------------------------------------------- Casino America, Inc., 12.50% Sr. Nts., 8/1/03 50,000 54,562 - -------------------------------------------------------------------------- Casino Magic of Louisiana Corp., 13% First Mtg. Nts., Series B, 8/15/03 150,000 144,750 - -------------------------------------------------------------------------- Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03 350,000 378,000 - -------------------------------------------------------------------------- Grupo Posadas SA de CV, 10.375% Bonds, 2/13/02(4) 50,000 51,375 - -------------------------------------------------------------------------- HMC Acquisition Properties, Inc., 9% Sr. Nts., Series B, 12/15/07 150,000 156,375 - -------------------------------------------------------------------------- HMH Properties, Inc., 8.875% Sr. Nts., 7/15/07 300,000 317,250 - -------------------------------------------------------------------------- Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 425,000 447,312 - -------------------------------------------------------------------------- Mohegan Tribal Gaming Authority (Connecticut), 13.50% Sr. Sec. Nts., Series B, 11/15/02 200,000 257,000 - -------------------------------------------------------------------------- Rio Hotel & Casino, Inc., 9.50% Gtd. Sr. Sub. Nts., 4/15/07 350,000 371,875 - -------------------------------------------------------------------------- Showboat Marina Casino Partnership/Showboat Marina Finance Corp., 13.50% First Mtg. Nts., Series B, 3/15/03 350,000 421,750 - -------------------------------------------------------------------------- Signature Resorts, Inc., 9.75% Sr. Sub. Nts., 10/1/07(5) 200,000 201,000 - -------------------------------------------------------------------------- Station Casinos, Inc., 10.125% Sr. Sub. Nts., 3/15/06 110,000 116,600 - -------------------------------------------------------------------------- Venetian Casino Resort LLC/Las Vegas Sands, Inc.: 10% Sr. Sub. Nts., 11/15/05(5) 200,000 183,500 12.25% Mtg. Nts., 11/15/04(5) 150,000 150,937 ------------- 3,694,786 - -------------------------------------------------------------------------- RESTAURANTS - 0.3% Ameriking, Inc., 10.75% Sr. Nts., 12/1/06 125,000 131,875 - -------------------------------------------------------------------------- Carrols Corp., 11.50% Sr. Nts., 8/15/03 100,000 106,500 - -------------------------------------------------------------------------- Foodmaker, Inc.: 9.25% Sr. Nts., 3/1/99 79,000 80,777 9.75% Sr. Sub. Nts., 6/1/02 300,000 309,750 ------------- 628,902 - -------------------------------------------------------------------------- TEXTILE/APPAREL - 0.3% CMI Industries, Inc., 9.50% Sr. Sub. Nts., 10/1/03(4) 10,000 9,875 - -------------------------------------------------------------------------- Dan River, Inc., 10.125% Sr. Sub. Nts., 12/15/03 50,000 53,687 - -------------------------------------------------------------------------- PT Polysindo Eka Perkasa, Zero Coupon Promissory Nts., 9.39%, 7/14/98(12) 100,000 84,682 - -------------------------------------------------------------------------- Tultex Corp., 9.625% Sr. Unsec. Nts., 4/15/07 200,000 200,000 - -------------------------------------------------------------------------- William Carter Co., 10.375% Sr. Sub. Nts., Series A, 12/1/06 200,000 211,000 ------------- 559,244 - -------------------------------------------------------------------------- ENERGY - 2.6% Belden & Blake Corp., 9.875% Sr. Sub. Nts., 6/15/07 580,000 588,700 - -------------------------------------------------------------------------- Chesapeake Energy Corp.: 12% Gtd. Sr. Exchangeable Nts., 3/1/01 200,000 210,500 9.125% Sr. Unsec. Nts., 4/15/06 100,000 103,250
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- ENERGY (CONTINUED) - -------------------------------------------------------------------------- Clark R&M, Inc.: 8.375% Sr. Nts., 11/15/07(5) $ 125,000 $ 126,094 8.875% Sr. Sub. Nts., 11/15/07(5) 250,000 253,750 - -------------------------------------------------------------------------- Clark USA, Inc., 10.875% Sr. Nts., Series B, 12/1/05 125,000 136,875 - -------------------------------------------------------------------------- Cliffs Drilling Co., 10.25% Sr. Nts., 5/15/03 50,000 54,687 - -------------------------------------------------------------------------- Dailey International, Inc., 9.75% Gtd. Sr. Unsec. Nts., 8/15/07(5) 125,000 131,875 - -------------------------------------------------------------------------- DI Industries, Inc., 8.875% Sr. Nts., 7/1/07 75,000 78,000 - -------------------------------------------------------------------------- Energy Corp. of America, 9.50% Sr. Sub. Nts., Series A, 5/15/07 245,000 245,612 - -------------------------------------------------------------------------- Forcenergy, Inc., 8.50% Sr. Sub. Nts., Series B, 2/15/07 190,000 193,325 - -------------------------------------------------------------------------- Forcenergy, Inc., 9.50% Sr. Sub. Nts., 11/1/06 445,000 473,925 - -------------------------------------------------------------------------- Gothic Energy Corp., 12.25% Sr. Nts., 9/1/04(4) 200,000 210,000 - -------------------------------------------------------------------------- J. Ray McDermott SA, 9.375% Sr. Sub. Bonds, 7/15/06 350,000 376,687 - -------------------------------------------------------------------------- National Energy Group, Inc., 10.75% Sr. Nts., 11/1/06 425,000 445,187 - -------------------------------------------------------------------------- Parker Drilling Corp., 9.75% Gtd. Sr. Nts., 11/15/06 300,000 324,750 - -------------------------------------------------------------------------- Petroleum Heat & Power Co., Inc., 9.375% Sub. Debs., 2/1/06 425,000 384,625 - -------------------------------------------------------------------------- Pogo Producing Co., 8.75% Sr. Sub. Nts., 5/15/07 395,000 402,900 - -------------------------------------------------------------------------- Statia Terminals International/Statia Terminals (Canada), Inc., 11.75% First Mtg. Nts., Series B, 11/15/03 175,000 185,500 - -------------------------------------------------------------------------- Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 355,000 362,987 - -------------------------------------------------------------------------- Wiser Oil Co., 9.50% Sr. Sub. Nts., 5/15/07 135,000 132,975 ------------- 5,422,204 - -------------------------------------------------------------------------- FINANCIAL SERVICES - 2.1% - -------------------------------------------------------------------------- BANKS & THRIFTS - 1.1% Alliance & Leicester Building Society, 8.75% Unsec. Sub. Nts., 12/7/06 GBP 80,000 143,973 - -------------------------------------------------------------------------- Banco de Colombia, 5.20% Cv. Jr. Unsec. Sub. Nts., 2/1/99 200,000 212,000 - -------------------------------------------------------------------------- Banco Nacional de Mexico SA, 11% Sub. Exchangeable Capital Debs., 7/15/03(4) 130,000 133,575 - -------------------------------------------------------------------------- Bank Plus Corp., 12% Sr. Nts., 7/18/07 7,000 7,875 - -------------------------------------------------------------------------- First Nationwide Holdings, Inc., 10.625% Sr. Sub. Nts., 10/1/03 120,000 135,000 - -------------------------------------------------------------------------- Korea Development Bank: 6.50% Bonds, 11/15/02 120,000 96,276 6.625% Bonds, 11/21/03 250,000 201,303 7.125% Bonds, 9/17/01 135,000 115,019 7.375% Bonds, 9/17/04 120,000 98,497 7.90% Nts., 2/1/02 220,000 191,710 - -------------------------------------------------------------------------- Local Financial Corp., 11% Sr. Nts., 9/8/04(4) 150,000 159,000 - -------------------------------------------------------------------------- Ongko International Finance Co. BV, 10.50% Gtd. Nts., 3/29/04(5) 90,000 81,900 - -------------------------------------------------------------------------- Westpac Banking Corp., Zero Coupon Bills, 19.23%, 3/31/98(12)(17) NZD 1,150,000 654,350 ------------- 2,230,478 - -------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 0.8% Amresco, Inc., 10% Sr. Sub. Nts., Series 97-A, 3/15/04 100,000 104,250
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- DIVERSIFIED FINANCIAL (CONTINUED) Bakrie Investindo, Zero Coupon Promissory Nts., 26.54%, 7/10/98(12) IDR 1,000,000,000 $ 148,457 - -------------------------------------------------------------------------- Banco del Atlantico SA, 7.875% Eurobonds, 11/5/98 370,000 369,691 - -------------------------------------------------------------------------- Emergent Group, Inc., 10.75% Sr. Nts., 9/15/04 25,000 24,906 - -------------------------------------------------------------------------- Ocwen Capital Trust I, 10.875% Gtd. Bonds, 8/1/27 150,000 163,500 - -------------------------------------------------------------------------- Ocwen Financial Corp., 11.875% Nts., 10/1/03 150,000 169,875 - -------------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Sec. Nts., Series B, 4/1/02 200,000 215,000 - -------------------------------------------------------------------------- Southern Pacific Funding Corp., 11.50% Sr. Nts., 11/1/04 250,000 251,250 - -------------------------------------------------------------------------- Veritas Capital Trust, 10% Gtd. Debs., 1/1/28(5) 100,000 102,250 - -------------------------------------------------------------------------- Wilshire Financial Services Group, Inc., 13% Nts., 1/1/04 60,000 61,350 ------------- 1,610,529 - -------------------------------------------------------------------------- INSURANCE - 0.2% Terra Nova Insurance (UK) Holdings plc, 10.75% Sr. Nts., 7/1/05 100,000 112,406 - -------------------------------------------------------------------------- Veritas Holdings, Inc., 9.625% Sr. Nts., 12/15/03 200,000 214,000 ------------- 326,406 - -------------------------------------------------------------------------- HOUSING RELATED - 0.6% - -------------------------------------------------------------------------- BUILDING MATERIALS - 0.2% Building Materials Corp. of America, 8.625% Sr. Nts., Series B, 12/15/06 50,000 51,750 - -------------------------------------------------------------------------- Falcon Building Products, Inc., 9.50% Sr. Sub. Nts., 6/15/07 175,000 182,437 - -------------------------------------------------------------------------- Nortek, Inc., 9.25% Sr. Nts., Series B, 3/15/07 150,000 153,750 ------------- 387,937 - -------------------------------------------------------------------------- HOMEBUILDERS/REAL ESTATE - 0.4% Continental Homes Holding Corp., 10% Gtd. Unsec. Bonds, 4/15/06 50,000 54,750 - -------------------------------------------------------------------------- Greystone Homes, Inc., 10.75% Sr. Gtd. Nts., 3/1/04(4) 50,000 54,750 - -------------------------------------------------------------------------- Hovnanian K. Enterprises, Inc., 11.25% Gtd. Sub. Nts., 4/15/02 75,000 78,938 - -------------------------------------------------------------------------- International de Ceramica SA, 9.75% Gtd. Unsec. Unsub. Nts., 8/1/02(4) 70,000 66,850 - -------------------------------------------------------------------------- Kaufman & Broad Home Corp., 7.75% Sr. Nts., 10/15/04 400,000 398,000 - -------------------------------------------------------------------------- Nortek, Inc., 9.125% Sr. Nts., Series B, 9/1/07 150,000 153,000 ------------- 806,288 - -------------------------------------------------------------------------- MANUFACTURING - 2.5% - -------------------------------------------------------------------------- AEROSPACE - 1.0% America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 450,000 483,750 - -------------------------------------------------------------------------- Amtran, Inc., 10.50% Sr. Nts., 8/1/04(5) 150,000 156,750 - -------------------------------------------------------------------------- Atlas Air, Inc.: 10.75% Sr. Nts., 8/1/05 125,000 132,500 12.25% Pass-Through Certificates, 12/1/02 350,000 390,250 - -------------------------------------------------------------------------- Constellation Finance LLC, 9.80% Airline Receivable Asset-Backed Nts., Series 1997-1, 1/1/01(4) 125,000 126,250 - -------------------------------------------------------------------------- Kitty Hawk, Inc., 9.95% Sr. Nts., 11/15/04(5) 100,000 101,000 - -------------------------------------------------------------------------- Pegasus Aircraft Lease Securitization Trust, 11.76% Sr. Nts., Cl. B, 6/15/04(4) 97,191 100,273 - -------------------------------------------------------------------------- SC International Services, Inc., 9.25% Sr. Sub. Nts., 9/1/07(5) 325,000 338,000
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- AEROSPACE (CONTINUED) Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04(5) $ 300,000 $ 303,000 ------------- 2,131,773 - -------------------------------------------------------------------------- AUTOMOTIVE - 0.7% Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., 7/15/07(5) 75,000 78,750 - -------------------------------------------------------------------------- Collins & Aikman Products Co., 11.50% Gtd. Sr. Sub. Nts., 4/15/06 300,000 339,000 - -------------------------------------------------------------------------- Delco Remy International, Inc., 8.625% Sr. Nts., 12/15/07 50,000 50,938 - -------------------------------------------------------------------------- Hayes Wheels International, Inc.: 11% Sr. Sub. Nts., 7/15/06 225,000 252,000 9.125% Sr. Sub. Nts., 7/15/07 100,000 103,875 - -------------------------------------------------------------------------- Key Plastics, Inc., 10.25% Sr. Sub. Nts., Series B, 3/15/07 300,000 320,250 - -------------------------------------------------------------------------- Lear Corp., 9.50% Sub. Nts., 7/15/06 200,000 220,500 ------------- 1,365,313 - -------------------------------------------------------------------------- CAPITAL GOODS - 0.8% Burke Industries, Inc., 10% Sr. Nts., 8/15/07(5) 150,000 154,875 - -------------------------------------------------------------------------- Clark-Schwebel, Inc.: 10.50% Sr. Nts., 4/15/06 100,000 109,500 12.50% Debs., 7/15/07(5)(14) 45,994 49,444 - -------------------------------------------------------------------------- Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05 250,000 280,000 - -------------------------------------------------------------------------- Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 150,000 155,625 - -------------------------------------------------------------------------- Insilco Corp., 10.25% Unsec. Sr. Sub. Nts., 8/15/07(5) 300,000 315,750 - -------------------------------------------------------------------------- International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 125,000 137,500 - -------------------------------------------------------------------------- Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 100,000 100,250 - -------------------------------------------------------------------------- Roller Bearing Co. of America, Inc., 9.625% Gtd. Sr. Sub. Nts., 6/15/07(4) 140,000 141,750 - -------------------------------------------------------------------------- Synthetic Industries, Inc., 9.25% Sr. Sub. Nts., 2/15/07 45,000 47,700 - -------------------------------------------------------------------------- Titan Wheel International, Inc., 8.75% Sr. Sub. Nts., 4/1/07 100,000 105,250 - -------------------------------------------------------------------------- Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03(4) 50,000 52,250 ------------- 1,649,894 - -------------------------------------------------------------------------- MEDIA - 3.6% - -------------------------------------------------------------------------- BROADCASTING - 1.2% Azteca Holdings SA, 11% Sr. Nts., 6/15/02(5) 155,000 160,425 - -------------------------------------------------------------------------- Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 275,000 282,563 - -------------------------------------------------------------------------- Chancellor Radio Broadcasting Co.: 8.125% Sr. Sub. Nts., 12/15/07(5) 200,000 196,750 8.75% Sr. Sub. Nts., 6/15/07 100,000 102,250 - -------------------------------------------------------------------------- Jacor Communications Co., 8.75% Gtd. Sr. Sub. Nts., 6/15/07(5) 100,000 102,250 - -------------------------------------------------------------------------- Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02 95,000 102,125 - -------------------------------------------------------------------------- Radio One, Inc., 7% Sr. Sub. Nts., Series B, 5/15/04(10) 100,000 99,500 - -------------------------------------------------------------------------- SFX Broadcasting, Inc., 10.75% Sr. Sub. Nts., Series B, 5/15/06 150,000 165,000 - -------------------------------------------------------------------------- Sinclair Broadcast Group, Inc.: 10% Sr. Sub. Nts., 9/30/05 100,000 105,750
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- BROADCASTING (CONTINUED) Sinclair Broadcast Group, Inc.: (Continued) 8.75% Sr. Sub. Nts., 12/15/07 $ 150,000 $ 150,750 9% Gtd. Sr. Sub. Nts., 7/15/07 250,000 256,250 - -------------------------------------------------------------------------- Spanish Broadcasting Systems, Inc., 11% Sr. Nts., 3/15/04 100,000 110,500 - -------------------------------------------------------------------------- TV Azteca SA de CV: 10.125% Gtd. Sr. Nts., Series A, 2/15/04 100,000 103,250 10.50% Gtd. Sr. Nts., Series B, 2/15/07 150,000 155,250 - -------------------------------------------------------------------------- Young Broadcasting, Inc.: 8.75% Sr. Sub. Debs., 6/15/07 275,000 273,625 9% Sr. Sub. Nts., Series B, 1/15/06 100,000 100,500 ------------- 2,466,738 - -------------------------------------------------------------------------- CABLE TELEVISION - 1.4% Adelphia Communications Corp.: 10.50% Sr. Unsec. Nts., Series B, 7/15/04 70,000 75,775 9.25% Sr. Nts., 10/1/02 100,000 102,500 - -------------------------------------------------------------------------- American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04(13) 72,000 24,120 - -------------------------------------------------------------------------- Cablevision Systems Corp.: 9.875% Sr. Sub. Debs., 4/1/23 150,000 165,750 9.875% Sr. Sub. Nts., 5/15/06 250,000 275,625 - -------------------------------------------------------------------------- EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04(13) 40,000 36,800 - -------------------------------------------------------------------------- EchoStar DBS Corp., 12.50% Gtd. Nts., 7/1/02 250,000 271,250 - -------------------------------------------------------------------------- EchoStar I, 8.25% Bonds, 2/26/01(4) 159,783 158,185 - -------------------------------------------------------------------------- EchoStar II, 8.25% Bonds, 11/9/01(4) 147,612 146,136 - -------------------------------------------------------------------------- EchoStar Satellite Broadcasting Corp., 0%/13.125% Sr. Sec. Disc. Nts., 3/15/04(13) 400,000 342,000 - -------------------------------------------------------------------------- Fundy Cable Ltd./Ltee, 11% Sr. Sec. Second Priority Nts., 11/15/05(4) 100,000 108,250 - -------------------------------------------------------------------------- Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B, 11/1/03(6) 175,000 189,000 - -------------------------------------------------------------------------- Knology Holdings, Inc., Units (each unit consists of $1,000 principal amount of 0%/11.875% sr. disc. nts., 10/15/07 and one warrant to purchase .003734 shares of preferred stock)(4)(13)(15) 100,000 55,000 - -------------------------------------------------------------------------- Marcus Cable Operating Co. LP/Marcus Cable Capital Corp., 0%/13.50% Gtd. Sr. Sub. Disc. Nts., Series II, 8/1/04(13) 200,000 186,000 - -------------------------------------------------------------------------- Optel, Inc., 13% Sr. Nts., Series B, 2/15/05 210,000 223,650 - -------------------------------------------------------------------------- Rogers Cablesystems Ltd., 10% Second Priority Sr. Sec. Debs., 12/1/07 200,000 221,000 - -------------------------------------------------------------------------- Rogers Communications, Inc., 8.75% Sr. Nts., 7/15/07 CAD 400,000 272,964 - -------------------------------------------------------------------------- TCI Satellite Entertainment, Inc., 10.875% Sr. Sub. Nts., 2/15/07(5) 100,000 105,250 ------------- 2,959,255 - -------------------------------------------------------------------------- DIVERSIFIED MEDIA - 0.8% Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/03 200,000 214,000 - -------------------------------------------------------------------------- Hollywood Theaters, Inc., 10.625% Sr. Sub. Nts., 8/1/07(5) 100,000 106,750 - -------------------------------------------------------------------------- ITT Promedia CVA, 9.125% Sr. Sub. Nts., 9/15/07(5) DEM 850,000 498,146 - -------------------------------------------------------------------------- Katz Media Corp., 10.50% Sr. Sub. Nts., Series B, 1/15/07 90,000 99,675
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- DIVERSIFIED MEDIA (CONTINUED) Lamar Advertising Co.: 8.625% Sr. Sub. Nts., 9/15/07 $ 150,000 $ 154,875 9.625% Sr. Sub. Nts., 12/1/06 50,000 54,063 - -------------------------------------------------------------------------- Outdoor Systems, Inc., 8.875% Sr. Sub. Nts., 6/15/07 150,000 156,750 - -------------------------------------------------------------------------- Time Warner Entertainment Co. LP, 8.375% Sr. Debs., 3/15/23 300,000 343,208 - -------------------------------------------------------------------------- Universal Outdoor, Inc.: 9.75% Sr. Sub. Nts., 10/15/06 20,000 22,500 9.75% Sr. Sub. Nts., Series B, 10/15/06 70,000 78,750 ------------- 1,728,717 - -------------------------------------------------------------------------- ENTERTAINMENT/FILM - 0.1% Ascent Entertainment Group, Inc., 0%/11.875% Sr. Sec. Disc. Nts., 12/15/04(5)(13) 150,000 86,625 - -------------------------------------------------------------------------- Imax Corp., 10% Sr. Nts., 3/1/01(6) 200,000 211,000 ------------- 297,625 - -------------------------------------------------------------------------- PUBLISHING/PRINTING - 0.1% American Lawyer Media Holdings, Inc., 9.75% Sr. Nts., 12/15/07(5) 100,000 102,000 - -------------------------------------------------------------------------- Sun Media Corp., 9.50% Sr. Sub. Nts., 2/15/07 150,000 162,000 ------------- 264,000 - -------------------------------------------------------------------------- OTHER - 0.8% - -------------------------------------------------------------------------- CONGLOMERATES - 0.1% Cia Latino Americana de Infraestructura & Servicios SA - CLISA, 11.625% Gtd. Sr. Nts., 6/1/04(4) 30,000 30,300 - -------------------------------------------------------------------------- Maxxam Group, Inc., 0%/12.25% Sr. Sec. Disc. Nts., 8/1/03(13) 25,000 24,875 - -------------------------------------------------------------------------- Mechala Group Jamaica Ltd., 12.75% Gtd. Sr. Sec. Sub. Nts., Series B, 12/30/99 85,000 80,750 ------------- 135,925 - -------------------------------------------------------------------------- ENVIRONMENTAL - 0.2% Allied Waste Industries, Inc., 0%/11.30% Sr. Disc. Nts., 6/1/07(5)(13) 300,000 211,500 - -------------------------------------------------------------------------- Allied Waste North America, Inc., 10.25% Sr. Sub. Nts., 12/1/06 250,000 275,625 ------------- 487,125 - -------------------------------------------------------------------------- SERVICES - 0.5% Borg-Warner Security Corp.: 9.125% Sr. Sub. Nts., 5/1/03 100,000 102,625 9.625% Sr. Sub. Nts., 3/15/07 100,000 104,500 - -------------------------------------------------------------------------- Coinstar, Inc., 0%/13% Sr. Disc. Nts., 10/1/06(4)(13) 100,000 82,500 - -------------------------------------------------------------------------- Greater Toronto Airport, 5.40% Debs., 12/3/02 CAD 240,000 165,990 - -------------------------------------------------------------------------- Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 50,000 50,000 - -------------------------------------------------------------------------- Oxford Automotive, Inc., 10.125% Sr. Unsec. Sub. Nts., 6/15/07 300,000 316,875 - -------------------------------------------------------------------------- Protection One Alarm Monitoring, Inc., 6.75% Cv. Gtd. Sr. Sub. Nts., 9/15/03 125,000 148,281 ------------- 970,771
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- RETAIL - 1.1% - -------------------------------------------------------------------------- SPECIALTY RETAILING - 0.3% Central Termica Guemes, 12% Bonds, 11/26/01(4) $ 100,000 $ 101,500 - -------------------------------------------------------------------------- Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03 70,000 75,950 - -------------------------------------------------------------------------- Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03(4) 100,000 105,500 - -------------------------------------------------------------------------- Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07(4) 200,000 205,000 - -------------------------------------------------------------------------- Specialty Retailers, Inc., 8.50% Gtd. Sr. Nts., 7/15/05 75,000 76,875 ------------- 564,825 - -------------------------------------------------------------------------- SUPERMARKETS - 0.8% Fleming Cos., Inc.: 10.50% Sr. Sub. Nts., 12/1/04(5) 50,000 52,625 10.625% Sr. Sub. Nts., 7/31/07(5) 300,000 318,000 - -------------------------------------------------------------------------- Ralph's Grocery Co.: 11% Sr. Sub. Nts., 6/15/05 50,000 57,125 10.45% Sr. Nts., 6/15/04 325,000 365,625 - -------------------------------------------------------------------------- Randall's Food Markets, Inc., 9.375% Sr. Sub. Nts., 7/1/07(5) 375,000 390,000 - -------------------------------------------------------------------------- Shoppers Food Warehouse Corp., 9.75% Sr. Nts., 6/15/04(5) 400,000 410,000 - -------------------------------------------------------------------------- Stater Brothers Holdings, Inc., 9% Sr. Unsec. Sub. Nts., 7/1/04 125,000 131,250 ------------- 1,724,625 - -------------------------------------------------------------------------- TECHNOLOGY - 6.6% - -------------------------------------------------------------------------- INFORMATION TECHNOLOGY - 3.5% Amphenol Corp., 9.875% Sr. Sub. Nts., 5/15/07 75,000 79,875 - -------------------------------------------------------------------------- Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04(4)(13) 150,000 159,000 - -------------------------------------------------------------------------- Cellular Communications International, Inc., Zero Coupon Sr. Disc. Nts., 12.03%, 8/15/00(12) 475,000 382,375 - -------------------------------------------------------------------------- Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03(13) 50,000 50,375 - -------------------------------------------------------------------------- Clearnet Communications, Inc., 0%/14.75% Sr. Disc. Nts., 12/15/05(13) 150,000 118,875 - -------------------------------------------------------------------------- Comcast Cellular Communications, Inc., 9.50% Sr. Nts., 5/1/07 150,000 157,125 - -------------------------------------------------------------------------- Computervision Corp., 11.375% Sr. Sub. Nts., 8/15/99 40,000 40,450 - -------------------------------------------------------------------------- Comunicacion Celular SA, 0%/13.125% Sr. Deferred Coupon Bonds, 11/15/03(13) 350,000 266,875 - -------------------------------------------------------------------------- Concentic Network Corp., Units (each unit consists of $1,000 principal amount of 12.75% sr. nts., 12/15/07 and one warrant to purchase 6.34 shares of common stock)(5)(15) 100,000 102,875 - -------------------------------------------------------------------------- Consorcio Ecuatoriano de Telecom SA, 14% Nts., 5/1/02(4) 70,000 70,700 - -------------------------------------------------------------------------- Crown Castle International Corp., 0%/10.625% Sr. Disc. Nts., 11/15/07(5)(13) 350,000 219,625 - -------------------------------------------------------------------------- Details, Inc., 10% Sr. Sub. Nts., 11/15/05(5) 150,000 154,125 - -------------------------------------------------------------------------- Dial Call Communications, Inc., 0%/12.25% Sr. Disc. Nts., 4/15/04(13) 400,000 383,000 - -------------------------------------------------------------------------- DII Group, Inc., 8.50% Sr. Sub. Nts., 9/15/07(5) 30,000 29,550 - -------------------------------------------------------------------------- Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 350,000 357,000 - -------------------------------------------------------------------------- Geotek Communications, Inc.: 0%/15% Sr. Sec. Disc. Nts., 7/15/05(13) 100,000 58,500 12% Cv. Sr. Sub. Nts., 2/15/01(4) 210,000 168,000
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- INFORMATION TECHNOLOGY (CONTINUED) Iridium LLC/Iridium Capital Corp., 11.25% Sr. Nts., 7/15/05(5) $ 125,000 $ 123,125 - -------------------------------------------------------------------------- Iron Mountain, Inc., 8.75% Sr. Sub. Nts., 9/30/09(5) 150,000 154,500 - -------------------------------------------------------------------------- Metrocall, Inc., 9.75% Sr. Sub. Nts., 11/1/07(5) 75,000 74,438 - -------------------------------------------------------------------------- Microcell Telecommunications, Inc.: 0%/11.125% Sr. Disc. Nts., 10/15/07(5)(13) CAD 300,000 118,447 0%/14% Sr. Disc. Nts., Series B, 6/1/06(13) 200,000 135,000 - -------------------------------------------------------------------------- Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(13) 210,000 154,875 - -------------------------------------------------------------------------- Nextel Communications, Inc.: 0%/10.65% Sr. Disc. Nts., 9/15/07(5)(13) 400,000 254,000 0%/11.50% Sr. Disc. Nts., 9/1/03(13) 150,000 150,000 0%/9.75% Sr. Disc. Nts., 10/31/07(5)(13) 500,000 307,500 - -------------------------------------------------------------------------- Occidente y Caribe Celular SA, 0%/14% Sr. Disc. Nts., Series B, 3/15/04(13) 200,000 151,000 - -------------------------------------------------------------------------- Omnipoint Corp.: 11.625% Sr. Nts., 8/15/06 295,000 312,700 11.625% Sr. Nts., Series A, 8/15/06 80,000 84,800 - -------------------------------------------------------------------------- ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 300,000 327,000 - -------------------------------------------------------------------------- Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(13) 150,000 112,125 - -------------------------------------------------------------------------- Price Communications Cellular Holdings, Inc., 0%/13.50% Sr. Disc. Nts., Series A, 8/1/07(4)(13) 150,000 95,250 - -------------------------------------------------------------------------- Price Communications Wireless, Inc., 11.75% Sr. Sub. Nts., 7/15/07(5) 225,000 245,250 - -------------------------------------------------------------------------- PriCellular Wireless Corp.: 0%/12.25% Sr. Sub. Disc. Nts., 10/1/03(13) 150,000 154,500 0%/14% Sr. Sub. Disc. Nts., 11/15/01(13) 500,000 557,500 10.75% Sr. Nts., 11/1/04 75,000 81,563 - -------------------------------------------------------------------------- Real Time Data, Inc., Units (each unit consists of $1,000 principal amount of 0%/13.50% sub. disc. nts., 8/15/06 and one warrant to purchase six ordinary shares)(4)(13)(15) 300,000 114,000 - -------------------------------------------------------------------------- Star Choice Communications, Inc., Units (each unit consists of $1,000 principal amount of 13% sr. sec. nts., 12/15/05 and one warrant to buy common stock)(15) 100,000 103,000 - -------------------------------------------------------------------------- Teletrac, Inc., 14% Sr. Nts., 8/1/07 85,000 81,175 - -------------------------------------------------------------------------- Unisys Corp., 11.75% Sr. Nts., 10/15/04 150,000 172,125 - -------------------------------------------------------------------------- USA Mobile Communications, Inc. II: 14% Sr. Nts., 11/1/04 200,000 222,000 9.50% Sr. Nts., 2/1/04 100,000 98,000 - -------------------------------------------------------------------------- Wavetek Corp., 10.125% Sr. Sub. Nts., 6/15/07 175,000 179,375 ------------- 7,361,573 - -------------------------------------------------------------------------- TELECOMMUNICATIONS/TECHNOLOGY - 3.1% American Communications Services, Inc.: 0%/12.75% Sr. Disc. Nts., 4/1/06(13) 65,000 50,050 13.75% Sr. Nts., 7/15/07(5) 110,000 130,900 - -------------------------------------------------------------------------- Bell Cablemedia plc, 0%/11.95% Sr. Disc. Nts., 7/15/04(13) 300,000 283,500
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- TELECOMMUNICATIONS/TECHNOLOGY (CONTINUED) Brooks Fiber Properties, Inc.: 0%/10.875% Sr. Disc. Nts., 3/1/06(13) $ 300,000 $ 250,500 0%/11.875% Sr. Disc. Nts., 11/1/06(13) 90,000 72,450 10% Sr. Nts., 6/1/07 300,000 346,500 - -------------------------------------------------------------------------- BTI Telecom Corp., 10.50% Sr. Nts., 9/15/07(5) 75,000 76,875 - -------------------------------------------------------------------------- Call-Net Enterprises, Inc.: 0%/13.25% Sr. Disc. Nts., 12/1/04(13) 200,000 183,250 0%/9.27% Sr. Disc. Nts., 8/15/07(13) 75,000 51,188 8.375% Sr. Nts., 8/15/07 CAD 150,000 110,075 - -------------------------------------------------------------------------- COLT Telecom Group plc: 10.125% Sr. Nts., 11/30/07 GBP 170,000 285,313 8.875% Sr. Nts., 11/30/07 DEM 100,000 56,694 Units (each unit consists of $1,000 principal amount of 0%/12% sr. disc. nts., 12/15/06 and one warrant to purchase 7.8 ordinary shares)(13)(15) 200,000 156,000 - -------------------------------------------------------------------------- Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc. Debs., 11/15/07(13) 250,000 203,750 - -------------------------------------------------------------------------- Diamond Cable Communications plc, 0%/11.75% Sr. Disc. Nts., 12/15/05(13) 215,000 167,163 - -------------------------------------------------------------------------- GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub. Disc. Nts., 12/15/05(5)(13) 25,000 19,203 - -------------------------------------------------------------------------- GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(13) 425,000 327,250 - -------------------------------------------------------------------------- ICG Holdings, Inc.: 0%/12.50% Gtd. Sr. Disc. Nts., 5/1/06(13) 195,000 147,225 0%/13.50% Sr. Disc. Nts., 9/15/05(13) 125,000 101,875 - -------------------------------------------------------------------------- Intermedia Communications, Inc.: 0%/11.25% Sr. Disc. Nts., Series B, 7/15/07(13) 400,000 287,000 8.50% Sr. Nts., 1/15/08(5) 200,000 201,000 8.875% Sr. Nts., 11/1/07(5) 200,000 206,000 - -------------------------------------------------------------------------- McLeodUSA, Inc.: 0%/10.50% Sr. Disc. Nts., 3/1/07(13) 140,000 101,500 9.25% Sr. Nts., 7/15/07(5) 75,000 78,938 - -------------------------------------------------------------------------- Metronet Communications Corp., 0%/10.75% Sr. Disc. Nts., 11/1/07(5)(13) 175,000 108,063 - -------------------------------------------------------------------------- MGC Communications, Inc., Units (each unit consists of $1,000 principal amount of 13% sr. sec. nts., 10/1/04 and one warrant to purchase 8.07 shares of common stock at $0.01 per share)(5)(15) 150,000 151,500 - -------------------------------------------------------------------------- Netia Holdings BV: 0%/11% Sr. Gtd. Disc. Nts., 11/1/07(4)(13) DEM 350,000 111,684 10.25% Sr. Gtd. Nts., 11/1/07(4) 50,000 47,875 - -------------------------------------------------------------------------- NEXTLINK Communications, Inc., 9.625% Sr. Nts., 10/1/07 350,000 364,000 - -------------------------------------------------------------------------- NTL, Inc., 10% Sr. Nts., 2/15/07 100,000 105,750 - -------------------------------------------------------------------------- Petersburg Long Distance, Inc., Units (each unit consists of $1,000 principal amount of 0%/14% sr. disc. nts., 6/1/04 and one warrant to purchase 34 ordinary shares)(5)(13)(15) 300,000 286,500
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- TELECOMMUNICATIONS/TECHNOLOGY (CONTINUED) PTC International Finance BV, 0%/10.75% Gtd. Sr. Sub. Unsec. Bonds, 7/1/07(5)(13) $ 134,000 $ 87,435 - -------------------------------------------------------------------------- Qwest Communications International, Inc., 0%/9.47% Sr. Disc. Nts., 10/15/07(5)(13) 700,000 476,000 - -------------------------------------------------------------------------- Shaw Communications, Inc., 8.54% Debs., 9/30/27 CAD 340,000 220,836 - -------------------------------------------------------------------------- Teleport Communications Group, Inc., 0%/11.125% Sr. Disc. Nts., 7/1/07(13) 425,000 347,438 - -------------------------------------------------------------------------- Telewest Communications plc, 0%/11% Sr. Disc. Debs., 10/1/07(13) 200,000 156,250 - -------------------------------------------------------------------------- UNIFI Communications, Inc., 14% Sr. Nts., 3/1/04 25,000 19,750 ------------- 6,377,280 - -------------------------------------------------------------------------- TRANSPORTATION - 0.7% - -------------------------------------------------------------------------- RAILROADS - 0.2% TFM SA de CV, 10.25% Gtd. Sr. Nts., 6/15/07(5) 200,000 206,000 - -------------------------------------------------------------------------- Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts., Series B, 12/15/03(13) 300,000 264,000 ------------- 470,000 - -------------------------------------------------------------------------- SHIPPING - 0.2% Navigator Gas Transport plc: 10.50% First Priority Ship Mtg. Nts., 6/30/07(5) 275,000 292,875 Units (each unit consists of $1,000 principal amount of 12% second priority ship mtg. nts., 6/30/07 and 7.66 warrants)(5)(15) 150,000 169,500 - -------------------------------------------------------------------------- Trico Marine Services, Inc., 8.50% Gtd. Sr. Nts., 8/1/05(5) 50,000 50,938 ------------- 513,313 - -------------------------------------------------------------------------- TRUCKING - 0.3% Coach USA, Inc., 9.375% Gtd. Sr. Sub. Nts., Series B, 7/1/07 200,000 207,000 - -------------------------------------------------------------------------- Pycsa Panama SA, 10.28% Sr. Sec. Bonds, 12/15/12(4) 200,000 194,000 - -------------------------------------------------------------------------- Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(4) 242,602 200,753 ------------- 601,753 - -------------------------------------------------------------------------- UTILITIES - 0.5% - -------------------------------------------------------------------------- ELECTRIC UTILITIES - 0.4% California Energy, Inc., 10.25% Sr. Disc. Nts., 1/15/04 150,000 162,000 - -------------------------------------------------------------------------- Calpine Corp.: 10.50% Sr. Nts., 5/15/06(4) 100,000 109,500 8.75% Sr. Nts., 7/15/07(5) 230,000 235,750 - -------------------------------------------------------------------------- El Paso Electric Co., 9.40% First Mtg. Bonds, Series E, 5/1/11 250,000 282,500 - -------------------------------------------------------------------------- First PV Funding Corp., 10.30% Lease Obligation Bonds, Series 1986A, 1/15/14(4) 144,000 153,720 ------------- 943,470 - -------------------------------------------------------------------------- GAS UTILITIES - 0.1% Beaver Valley II Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17(4) 199,000 219,895 ------------- Total Corporate Bonds and Notes (Cost $57,018,717) 58,542,921
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES(1) NOTE 1 - -------------------------------------------------------------------------- COMMON STOCKS - 0.3% - -------------------------------------------------------------------------- Celcaribe SA(4)(16) 24,390 $ 121,950 - -------------------------------------------------------------------------- Coinstar, Inc.(16) 700 6,388 - -------------------------------------------------------------------------- Optel, Inc.(4)(16) 210 2 - -------------------------------------------------------------------------- Vail Resorts, Inc.(16) 15,500 402,031 ------------- Total Common Stocks (Cost $193,719) 530,371 - -------------------------------------------------------------------------- PREFERRED STOCKS - 1.9% - -------------------------------------------------------------------------- American Radio Systems Corp., 11.375% Cum. Exchangeable Preferred 772 91,965 - -------------------------------------------------------------------------- AmeriKing, Inc., 13% Cum. Sr. Exchangeable Preferred Stock, Non-Vtg.(4)(16) 2,323 62,140 - -------------------------------------------------------------------------- BankUnited Capital Trust, 10.25% Redeemable Trust Preferred Securities(4) 100,000 103,250 - -------------------------------------------------------------------------- California Federal Bank, 11.50% Non-Cum., Non-Vtg. 1,500 169,875 - -------------------------------------------------------------------------- CGA Group Ltd., Preferred Stock, Series A(4)(16) 16,000 400,000 - -------------------------------------------------------------------------- Clark USA, Inc., 11.50% Cum. Preferred Stock(5)(14) 50 53,125 - -------------------------------------------------------------------------- CRIIMI MAE, Inc., 10.875% Cum. Cv. Preferred Stock, Series B, Non-Vtg. 6,000 205,125 - -------------------------------------------------------------------------- Crown American Realty Trust, 11% Cum. Non-Vtg. Preferred, Series A 2,000 104,500 - -------------------------------------------------------------------------- Doane Products Co., 14.25% Sr. Exchangeable Preferred Stock, Non-Vtg.(16) 5,000 195,000 - -------------------------------------------------------------------------- Earthwatch, Inc., 12% Cv. Sr. Preferred Stock, Series C(4)(14) 10,000 75,000 - -------------------------------------------------------------------------- EchoStar Communications Corp., 12.125% Sr. Redeemable Exchangeable Preferred Stock, Series B(5)(14)(16) 125 130,938 - -------------------------------------------------------------------------- El Paso Electric Co., 11.40% Preferred Stock, Series A(14) 1,817 201,233 - -------------------------------------------------------------------------- Fidelity Federal Bank FSB Glendale California, 12% Non-Cum. Exchangeable Perpetual Preferred Stock, Series A(4) 20 555 - -------------------------------------------------------------------------- Fresenius Medical Care Trust, 9% Preferred Securities 275,000 288,750 - -------------------------------------------------------------------------- Golden State Bancorp, 8.75% Cv. Preferred Stock, Series A 1,000 91,125 - -------------------------------------------------------------------------- ICG Holdings, Inc., 14.25% Exchangeable Preferred Stock 101 118,170 - -------------------------------------------------------------------------- Kelley Oil & Gas Corp., $2.625 Cv. 1,800 39,600 - -------------------------------------------------------------------------- NEXTLINK Communications, Inc., 14% Sr. Exchangeable Preferred(14) 5,708 355,323 - -------------------------------------------------------------------------- Prime Retail, Inc., 8.50% Cv. Preferred Stock, Series B 6,000 144,000 - -------------------------------------------------------------------------- PRIMEDIA, Inc., 9.20% Preferred Stock, Series E(4)(16) 1,000 100,250 - -------------------------------------------------------------------------- SD Warren Co., 14% Cum. Exchangeable, Series B(16) 9,000 443,250 - -------------------------------------------------------------------------- Spanish Broadcasting Systems, Inc., 14.25% Cum. Sr. Exchangeable Preferred Stock, Non-Vtg.(5)(14) 106 112,625 - -------------------------------------------------------------------------- Time Warner, Inc., 10.25% Exchangeable Preferred, Series M(14) 1 1,183 - -------------------------------------------------------------------------- Walden Residential Properties, Inc.: 9.16% Cv. Preferred Stock, Series B 10,000 290,000
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES(1) NOTE 1 - -------------------------------------------------------------------------- PREFERRED STOCKS (CONTINUED) - -------------------------------------------------------------------------- Walden Residential Properties, Inc.: (Continued) 9.20% Sr. Preferred Stock 1,000 $ 25,625 ------------- Total Preferred Stocks (Cost $3,492,228) 3,802,607 - -------------------------------------------------------------------------- OTHER SECURITIES - 0.1% - -------------------------------------------------------------------------- Intermedia Communications, Inc., Depositary Shares representing one one-hundredth 7% Cum. Cv. Jr. Preferred Stock, Series E, Non-Vtg.(5)(16) 2,100 59,587 - -------------------------------------------------------------------------- WorldCom, Inc., 8% Cv. Depositary Shares each Representing 1/100 Share of Dividend Enhanced Convertible Stock 2,000 210,000 ------------- Total Other Securities (Cost $207,309) 269,587 UNITS - -------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% - -------------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99(4) 1,500 15 - -------------------------------------------------------------------------- Cellular Communications International, Inc. Wts., Exp. 8/03(4) 300 5,100 - -------------------------------------------------------------------------- CGA Group Ltd. Wts., Exp. 12/49(4) 16,000 8,000 - -------------------------------------------------------------------------- Clearnet Communications, Inc. Wts., Exp. 9/05 165 949 - -------------------------------------------------------------------------- Comunicacion Celular SA Wts., Exp. 11/03(4) 200 14,000 - -------------------------------------------------------------------------- Eye Care Centers of America, Inc. Wts., Exp. 10/03(4) 70 245 - -------------------------------------------------------------------------- Geotek Communications, Inc. Wts., Exp. 7/05(4) 7,500 7,500 - -------------------------------------------------------------------------- Gothic Energy Corp. Wts., Exp. 9/04 2,800 5,600 - -------------------------------------------------------------------------- Hyperion Telecommunications, Inc. Wts., Exp. 4/01(4) 60 3,600 - -------------------------------------------------------------------------- ICG Communications, Inc. Wts., Exp. 9/05(4) 825 10,313 - -------------------------------------------------------------------------- IHF Capital, Inc., Series I Wts., Exp. 11/99(4) 200 10,000 - -------------------------------------------------------------------------- In-Flight Phone Corp. Wts., Exp. 8/02 200 -- - -------------------------------------------------------------------------- Mexican Value Rights 1,100 -- - -------------------------------------------------------------------------- Microcell Telecommunications, Inc.: Conditional Wts., Exp. 6/06(4) 600 375 Wts., Exp. 6/06(4) 600 7,800 - -------------------------------------------------------------------------- NEXTLINK Communications, Inc. Wts., Exp. 2/09(4) 4,100 41 - -------------------------------------------------------------------------- Occidente y Caribe Celular SA Wts., Exp. 3/04(4) 800 11,000 - -------------------------------------------------------------------------- Orion Network Systems, Inc. Wts., Exp. 1/07(4) 150 1,875 - -------------------------------------------------------------------------- Price Communications Corp. Wts., Exp. 8/07(4) 516 5 - -------------------------------------------------------------------------- Teletrac, Inc. Wts., Exp. 8/07(4) 85 467 - -------------------------------------------------------------------------- UNIFI Communications, Inc. Wts., Exp. 3/07(4) 25 38 - -------------------------------------------------------------------------- United International Holdings, Inc. Wts., Exp. 11/99(4) 200 2,400 ------------- Total Rights, Warrants and Certificates (Cost $22,677) 89,323 PRINCIPAL AMOUNT(1) - -------------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 3.9% - -------------------------------------------------------------------------- Bayerische Landesbank Girozentrale (New York Branch) Canada Banker's Acceptance Index Yield Nts., 8.405%, 5/22/98 $ 400,000 397,000 - -------------------------------------------------------------------------- Bayerische Landesbank Girozentrale (New York Branch) Lehman Brothers High Yield Bond Index Nts., 12.50%, 2/4/98 250,000 249,600
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - -------------------------------------------------------------------------- STRUCTURED INSTRUMENTS (CONTINUED) - -------------------------------------------------------------------------- Cargill Financial Services Corp., Contingent Promissory Nts., 5.80%, 6/10/99 $ 250,000 $ 209,067 - -------------------------------------------------------------------------- Daiwa Finance Corp. (New York), Daiwa Physical Commodity Index Linked Nts., 4.906%, 3/24/98(6) 250,000 231,225 - -------------------------------------------------------------------------- First Boston Corp. (The), Russian GKO Linked Nts., Zero Coupon, 13.95%, 1/20/98(12) 100,000 98,500 - -------------------------------------------------------------------------- Goldman, Sachs & Co. Argentina Local Market Securities Trust, 11.30%, 4/1/00 (representing debt of Argentina (Republic of) Bonos del Tesoro Bonds, Series 10, 11.30%, 4/1/00 and an interest rate swap between Goldman Sachs and the Trust)(4) 130,434 131,087 - -------------------------------------------------------------------------- Goldman Sachs Group, LP: South Korean Won Linked Nts., 5.60%, 1/20/98 245,000 253,648 Taiwanese Dollar Linked Nts., 5.75%, 6/12/98 880,000 888,624 - -------------------------------------------------------------------------- ING (U.S.) Financial Holdings Corp.: Czech Koruna/U.S. Dollar Linked Nts., Zero Coupon, 11.10%, 3/4/98(12) 180,000 145,496 PT Polysindo Linked Nts., Zero Coupon, 10.43%, 7/15/98(4)(12) 50,000 45,018 - -------------------------------------------------------------------------- Lehman Brothers Holdings, Inc. Greek Drachma/Swiss Franc Linked Nts., Zero Coupon, 14.71%, 1/15/98(12) 100,000 104,000 - -------------------------------------------------------------------------- Lehman High Yield Index Nts.: 12.50%, 7/6/98 200,000 200,680 12.50%, 7/8/98 250,000 248,750 - -------------------------------------------------------------------------- Morgan Guaranty Trust Co. of New York: 2 Times Leveraged Nts. on The Emerging Markets Bond Index, Zero Coupon, 2/4/98 100,000 107,620 Japanese Government Bond 193 Currency Protected Bank Nts., 8.14%, 4/29/98 160,000 93,936 - -------------------------------------------------------------------------- Salomon Brothers, Inc. Chilean Peso Linked Nts.: Zero Coupon, 9.33%, 6/24/98(12) 110,000 98,659 Zero Coupon, 9.18%, 9/9/98(12) 110,000 96,195 - -------------------------------------------------------------------------- Salomon, Inc.: Chilean Peso Indexed Credit Linked Nts., Zero Coupon, 9.32%, 7/22/98(12) 1,000,000 893,400 Chilean Peso Indexed Enhanced Access Nts., Zero Coupon, 9.18%, 6/18/98(12) 200,000 180,820 - -------------------------------------------------------------------------- Salomon, Inc. Russian S-Account Credit Linked Nts.: Zero Coupon, 13.71%, 4/3/98(12) 400,000 385,140 Zero Coupon, 14.17%, 5/22/98(12) 225,000 211,511 Zero Coupon, 14.10%, 5/7/98(12) 700,000 662,375 Zero Coupon, 9.79%, 7/31/98(12) 400,000 359,260 Zero Coupon, 15.21%, 8/7/98(12) 700,000 624,960 - -------------------------------------------------------------------------- Shoshone Partners Loan Trust, 7.50% Sr. Nts., 5/31/02(4)(6) 742,000 786,944 - -------------------------------------------------------------------------- Standard Chartered Bank, U.S. Dollar/Chinese Yuan Linked Nts., 9.50%, 2/3/98 440,000 435,688 ------------- Total Structured Instruments (Cost $8,396,216) 8,139,203
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE DATE STRIKE CONTRACTS NOTE 1 - ----------------------------------------------------------------------------------------- CALL OPTIONS PURCHASED - 0.1% - ----------------------------------------------------------------------------------------- German Mark/Japanese Yen Call Opt. 1/98 67.68% DEM/JPY 1,654,846 $ 59,995 - ----------------------------------------------------------------------------------------- German Mark/Japanese Yen Call Opt. 3/98 68.59% DEM/JPY 1,990,000 59,963 - ----------------------------------------------------------------------------------------- U.S. Treasury Bonds, 6.125%, 11/15/27 Call Opt. 1/98 103.406% 1,000 7,031 - ----------------------------------------------------------------------------------------- U.S. Treasury Bonds, 6.125%, 11/15/27 Call Opt. 3/98 100.266% 4,600 148,062 ------------- Total Call Options Purchased (Cost $192,207) 275,051
PRINCIPAL AMOUNT(1) - ---------------------------------------------------------------------- REPURCHASE AGREEMENTS - 0.8% - ---------------------------------------------------------------------- Repurchase agreement with Smith, Barney, Harris, Upham & Co., Inc., 6.625%, dated 12/31/97, to be repurchased at $1,750,644 on 1/2/98, collateralized by U.S. Treasury Bonds, 8.875%-11.25%, 2/15/15-2/15/19, with a value of $1,792,733 (Cost $1,750,000) $ 1,750,000 1,750,000 - ---------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $222,378,087) 107.9% 224,183,620 - ---------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (7.9) (16,344,216) ----------------- ------------- NET ASSETS 100.0% $207,839,404 ----------------- ------------- ----------------- -------------
1. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: ARP - Argentine Peso ITL - Italian Lira AUD - Australian Dollar JPY - Japanese Yen CAD - Canadian Dollar MXP - Mexican Peso DEM - German Mark NOK - Norwegian Krone DKK - Danish Krone NZD - New Zealand Dollar ESP - Spanish Peseta PLZ - Polish Zloty GBP - British Pound Sterling RUR - Russian Ruble HUF - Hungarian Forint SEK - Swedish Krona IDR - Indonesian Rupiah TRL - Turkish Lira IEP - Irish Punt ZAR - South African Rand
2. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. 3. When-issued security to be delivered and settled after December 31, 1997. 4. Identifies issues considered to be illiquid or restricted - See Note 8 of Notes to Financial Statements. 5. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $14,529,773 or 6.99% of the Fund's net assets as of December 31, 1997. 6. Represents the current interest rate for a variable rate security. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (CONTINUED) 7. A sufficient amount of securities has been designated to cover outstanding forward foreign currency exchange contracts. See Note 5 of Notes to Financial Statements. 8. Securities with an aggregate market value of $1,327,157 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 9. A sufficient amount of securities has been designated to cover outstanding written options if applicable, as follows:
PRINCIPAL/UNITS EXPIRATION EXERCISE PREMIUM MARKET VALUE SUBJECT TO CALL DATE PRICE RECEIVED NOTE 1 - ------------------------------------------------------------------------------------------------------ Banco Hopotecario Nacional (Argentina) Medium-Term Nts., 10.625%, 8/7/06 Call Option 400,000 8/00 100.00 $ 3,680 $ 10,000 German Mark Put Option 1,820,000 3/98 1.82 DEM 11,600 11,266 Japanese Yen Put Option 223,000,000 1/98 125.00 JPY 19,445 69,576 -------- ------------- $34,725 $ 90,842 -------- ------------- -------- -------------
10. Represents the current interest rate for an increasing rate security. 11. Non-income producing - issuer is in default of interest payment. 12. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 13. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 14. Interest or dividend is paid in kind. 15. Units may be comprised of several components, such as debt and equity and/or warrants to purchase equity at some point in the future. For units which represent debt securities, principal amount disclosed represents total underlying principal. 16. Non-income producing security. 17. A sufficient amount of securities has been designated to cover outstanding interest rate swap transactions. See Note 9 of Notes to Financial Statements. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS DECEMBER 31, 1997
MARKET VALUE SHARES NOTE 1 - ---------------------------------------------------------------- COMMON STOCKS - 79.0% - ---------------------------------------------------------------- BASIC MATERIALS - 2.5% - ---------------------------------------------------------------- CHEMICALS - 2.5% Du Pont (E.I.) De Nemours & Co. 5,000 $ 300,312 - ---------------------------------------------------------------- Ferro Corp. 26,250 638,203 - ---------------------------------------------------------------- IMC Global, Inc. 50,000 1,637,500 - ---------------------------------------------------------------- Olin Corp. 27,500 1,289,062 ------------- 3,865,077 - ---------------------------------------------------------------- CONSUMER CYCLICALS - 18.0% - ---------------------------------------------------------------- AUTOS & HOUSING - 3.4% Champion Enterprises, Inc.(1) 25,000 514,062 - ---------------------------------------------------------------- General Motors Corp. 15,000 909,375 - ---------------------------------------------------------------- Lear Corp.(1) 17,500 831,250 - ---------------------------------------------------------------- Republic Industries, Inc.(1) 110,000 2,564,375 - ---------------------------------------------------------------- Tower Realty Trust, Inc. 20,000 492,500 ------------- 5,311,562 - ---------------------------------------------------------------- LEISURE & ENTERTAINMENT - 6.3% AMR Corp.(1)(2) 2,500 321,250 - ---------------------------------------------------------------- Brinker International, Inc.(1) 26,500 424,000 - ---------------------------------------------------------------- Callaway Golf Co. 13,500 385,594 - ---------------------------------------------------------------- Circus Circus Enterprises, Inc.(1) 7,500 153,750 - ---------------------------------------------------------------- Delta Air Lines, Inc. 10,000 1,190,000 - ---------------------------------------------------------------- Harrah's Entertainment, Inc. 100,000 1,887,500 - ---------------------------------------------------------------- Host Marriott Corp. 32,500 637,812 - ---------------------------------------------------------------- Mirage Resorts, Inc.(1) 20,000 455,000 - ---------------------------------------------------------------- Nintendo Co. Ltd. 4,000 393,782 - ---------------------------------------------------------------- Time Warner, Inc. 32,500 2,015,000 - ---------------------------------------------------------------- Viacom, Inc., Cl. B(1) 47,500 1,968,281 ------------- 9,831,969 - ---------------------------------------------------------------- MEDIA - 3.2% CBS Corp.(2) 50,000 1,471,875 - ---------------------------------------------------------------- Chancellor Media Corp.(1) 10,000 746,250 - ---------------------------------------------------------------- Comcast Corp., Cl. A Special 20,000 631,250 - ---------------------------------------------------------------- Jacor Communications, Inc.(1) 20,000 1,062,500 - ---------------------------------------------------------------- U S West Media Group(1) 37,500 1,082,812 ------------- 4,994,687 - ---------------------------------------------------------------- RETAIL: GENERAL - 2.8% Dayton Hudson Corp. 2,500 168,750 - ---------------------------------------------------------------- Dillard's, Inc. 25,000 881,250
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ---------------------------------------------------------------- RETAIL: GENERAL (CONTINUED) Federated Department Stores, Inc.(1) 75,000 $ 3,229,687 ------------- 4,279,687 - ---------------------------------------------------------------- RETAIL: SPECIALTY - 2.3% Abercrombie & Fitch Co., Cl. A(1)(2) 35,000 1,093,750 - ---------------------------------------------------------------- AutoZone, Inc.(1) 47,500 1,377,500 - ---------------------------------------------------------------- Nine West Group, Inc.(1) 45,000 1,167,187 ------------- 3,638,437 - ---------------------------------------------------------------- CONSUMER NON-CYCLICALS - 7.1% - ---------------------------------------------------------------- BEVERAGES - 1.2% Anheuser-Busch Cos., Inc. 41,000 1,804,000 - ---------------------------------------------------------------- FOOD - 0.6% Unilever NV, NY Shares 16,000 999,000 - ---------------------------------------------------------------- HEALTHCARE/DRUGS - 1.8% American Home Products Corp. 8,000 612,000 - ---------------------------------------------------------------- Amgen, Inc.(1) 20,000 1,082,500 - ---------------------------------------------------------------- Merck & Co., Inc. 5,000 531,250 - ---------------------------------------------------------------- Schering-Plough Corp. 10,000 621,250 ------------- 2,847,000 - ---------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 0.1% Boston Scientific Corp.(1)(2) 2,500 114,688 - ---------------------------------------------------------------- HOUSEHOLD GOODS - 0.5% Kimberly-Clark Corp. 15,000 739,687 - ---------------------------------------------------------------- TOBACCO - 2.9% Philip Morris Cos., Inc. 50,000 2,265,625 - ---------------------------------------------------------------- RJR Nabisco Holdings Corp. 58,500 2,193,750 ------------- 4,459,375 - ---------------------------------------------------------------- ENERGY - 4.2% - ---------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 2.8% Apache Corp. 8,750 306,797 - ---------------------------------------------------------------- BJ Services Co.(1) 6,250 449,609 - ---------------------------------------------------------------- Coflexip SA, Sponsored ADR 10,000 555,000 - ---------------------------------------------------------------- Cooper Cameron Corp.(1) 12,500 762,500 - ---------------------------------------------------------------- Schlumberger Ltd. 4,500 362,250 - ---------------------------------------------------------------- Stolt Comex Seaway SA(1) 27,500 1,375,000 - ---------------------------------------------------------------- Weatherford Enterra, Inc.(1) 11,000 481,250 ------------- 4,292,406 - ---------------------------------------------------------------- OIL-INTEGRATED - 1.4% Atlantic Richfield Co. 5,500 440,687 - ---------------------------------------------------------------- Enron Corp. 10,000 415,625 - ---------------------------------------------------------------- Mobil Corp. 3,000 216,562 - ---------------------------------------------------------------- Royal Dutch Petroleum Co., NY Shares 5,000 270,937
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ---------------------------------------------------------------- OIL-INTEGRATED (CONTINUED) Texaco, Inc. 3,000 $ 163,125 - ---------------------------------------------------------------- Unocal Corp. 6,000 232,875 - ---------------------------------------------------------------- YPF SA, Cl. D, ADR 10,500 358,969 ------------- 2,098,780 - ---------------------------------------------------------------- FINANCIAL - 18.3% - ---------------------------------------------------------------- BANKS - 10.4% Banco Rio de la Plata SA, ADR(1) 50,000 700,000 - ---------------------------------------------------------------- Barnett Banks, Inc. 2,500 179,688 - ---------------------------------------------------------------- Chase Manhattan Corp. (New) 34,000 3,723,000 - ---------------------------------------------------------------- Citicorp 4,000 505,750 - ---------------------------------------------------------------- Commercial Federal Corp. 22,500 800,156 - ---------------------------------------------------------------- Compass Bancshares, Inc. 10,000 437,500 - ---------------------------------------------------------------- CoreStates Financial Corp. 21,000 1,681,313 - ---------------------------------------------------------------- Credito Italiano 100,000 308,541 - ---------------------------------------------------------------- First Commerce Corp. 7,500 504,375 - ---------------------------------------------------------------- First International Bancorp, Inc. 15,000 181,875 - ---------------------------------------------------------------- Fleet Financial Group, Inc. 25,000 1,873,438 - ---------------------------------------------------------------- Hubco, Inc. 15,000 586,875 - ---------------------------------------------------------------- J.P. Morgan & Co., Inc. 4,500 507,938 - ---------------------------------------------------------------- KeyCorp 6,500 460,281 - ---------------------------------------------------------------- Mellon Bank Corp. 2,500 151,563 - ---------------------------------------------------------------- NationsBank Corp. 2,500 152,031 - ---------------------------------------------------------------- Societe Generale 7,250 988,221 - ---------------------------------------------------------------- Sovereign Bancorp, Inc. 40,000 830,000 - ---------------------------------------------------------------- Unibanco-Uniao de Bancos Brasileiros SA, Sponsored GDR Representing 500 Units of one Preferred Share of Unibanco and one Preferred Share of Unibanco Holdings SA(1)(3) 13,500 434,531 - ---------------------------------------------------------------- Union Planters Corp. 17,500 1,188,906 ------------- 16,195,982 - ---------------------------------------------------------------- DIVERSIFIED FINANCIAL - 3.8% Advanta Corp., Cl. B 13,500 342,563 - ---------------------------------------------------------------- American Express Co. 15,000 1,338,750 - ---------------------------------------------------------------- C.I.T. Group, Inc., Cl. A(1) 16,300 525,675 - ---------------------------------------------------------------- Fannie Mae 7,500 427,969 - ---------------------------------------------------------------- Freddie Mac 9,000 377,438 - ---------------------------------------------------------------- MoneyGram Payment Systems, Inc.(1) 17,000 182,750 - ---------------------------------------------------------------- Morgan Stanley, Dean Witter, Discover & Co. 18,500 1,093,813 - ---------------------------------------------------------------- Travelers Group, Inc. 30,510 1,643,726 ------------- 5,932,684
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ---------------------------------------------------------------- INSURANCE - 4.1% Allstate Corp. 26,000 $ 2,362,750 - ---------------------------------------------------------------- Cigna Corp. 1,500 259,594 - ---------------------------------------------------------------- Everest Reinsurance Holdings, Inc. 91,700 3,782,625 ------------- 6,404,969 - ---------------------------------------------------------------- INDUSTRIAL - 8.3% - ---------------------------------------------------------------- ELECTRICAL EQUIPMENT - 1.5% Raychem Corp. 55,000 2,368,438 - ---------------------------------------------------------------- INDUSTRIAL MATERIALS - 0.5% Crown Cork & Seal Co., Inc. 15,000 751,875 - ---------------------------------------------------------------- INDUSTRIAL SERVICES - 4.1% Cognizant Corp. 32,000 1,426,000 - ---------------------------------------------------------------- Mettler-Toledo International, Inc.(1) 100,000 1,725,000 - ---------------------------------------------------------------- USA Waste Services, Inc.(1) 80,000 3,140,000 ------------- 6,291,000 - ---------------------------------------------------------------- MANUFACTURING - 2.2% American Standard Cos., Inc.(1) 55,000 2,107,188 - ---------------------------------------------------------------- Halter Marine Group, Inc.(1) 22,500 649,688 - ---------------------------------------------------------------- MascoTech, Inc. 40,000 735,000 ------------- 3,491,876 - ---------------------------------------------------------------- TECHNOLOGY - 18.4% - ---------------------------------------------------------------- AEROSPACE/DEFENSE - 0.2% Boeing Co. 6,500 318,094 - ---------------------------------------------------------------- Raytheon Co., Cl. A 956 47,143 ------------- 365,237 - ---------------------------------------------------------------- COMPUTER HARDWARE - 6.8% Adaptec, Inc.(1) 12,500 464,063 - ---------------------------------------------------------------- Cabletron Systems, Inc.(1) 27,500 412,500 - ---------------------------------------------------------------- Ikon Office Solutions, Inc. 120,000 3,375,000 - ---------------------------------------------------------------- Ingram Micro, Inc., Cl. A(1) 20,000 582,500 - ---------------------------------------------------------------- International Business Machines Corp. 15,000 1,568,438 - ---------------------------------------------------------------- Iomega Corp.(1) 135,000 1,679,063 - ---------------------------------------------------------------- Seagate Technology, Inc.(1) 17,500 336,875 - ---------------------------------------------------------------- Sun Microsystems, Inc.(1)(2) 25,000 996,875 - ---------------------------------------------------------------- Xerox Corp. 16,000 1,181,000 ------------- 10,596,314 - ---------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 5.7% First Data Corp. 115,000 3,363,750 - ---------------------------------------------------------------- PLATINUM Technology, Inc.(1) 35,000 988,750 - ---------------------------------------------------------------- Structural Dynamics Research Corp.(1) 200,000 4,500,000 ------------- 8,852,500
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ---------------------------------------------------------------- ELECTRONICS - 2.8% Intel Corp. 4,000 $ 281,000 - ---------------------------------------------------------------- LSI Logic Corp.(1) 7,500 148,125 - ---------------------------------------------------------------- Waters Corp.(1) 100,000 3,762,500 - ---------------------------------------------------------------- Xilinx, Inc.(1) 6,000 210,375 ------------- 4,402,000 - ---------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 2.9% ADC Telecommunications, Inc.(1) 32,500 1,356,875 - ---------------------------------------------------------------- Bay Networks, Inc.(1) 10,000 255,625 - ---------------------------------------------------------------- Cisco Systems, Inc.(1) 22,500 1,254,375 - ---------------------------------------------------------------- Intermedia Communications, Inc.(1) 503 30,557 - ---------------------------------------------------------------- MCI Communications Corp. 32,500 1,391,406 - ---------------------------------------------------------------- Tellabs, Inc.(1) 2,500 132,188 - ---------------------------------------------------------------- WorldCom, Inc. 2,500 75,625 ------------- 4,496,651 - ---------------------------------------------------------------- UTILITIES - 2.2% - ---------------------------------------------------------------- TELEPHONE UTILITIES - 2.2% LCI International, Inc.(1) 80,000 2,460,000 - ---------------------------------------------------------------- Telecomunicacoes Brasileiras SA, Sponsored ADR 7,750 902,391 ------------- 3,362,391 ------------- Total Common Stocks (Cost $107,792,827) 122,788,272 - ---------------------------------------------------------------- PREFERRED STOCKS - 6.1% - ---------------------------------------------------------------- Automatic Commission Exchange Security Trust II, 6.50% Cv. Preferred (exchangeable to common stock of Republic Industries, Inc. "TRACES" effective 5/15/00) 75,000 1,762,500 - ---------------------------------------------------------------- Evergreen Media Corp., 6% Cv. Preferred(4) 20,000 1,547,500 - ---------------------------------------------------------------- Host Marriott Financial Trust, 6.75% Cv. Preferred Stock(4) 12,500 762,500 - ---------------------------------------------------------------- ICG Communications, Inc., 6.75% Cv. Preferred Stock(4) 35,000 2,213,750 - ---------------------------------------------------------------- Intermedia Communications, Inc., 7% Cv. Preferred Stock(1)(4) 50,000 2,056,250 - ---------------------------------------------------------------- QUALCOMM Financial Trust I, 5.75% Cum. Cv. Preferred Securities, Non-Vtg. 25,000 1,200,000 ------------- Total Preferred Stocks (Cost $7,862,050) 9,542,500 - ---------------------------------------------------------------- OTHER SECURITIES - 1.8% - ---------------------------------------------------------------- Continental Airlines Finance Trust, 8.50% Cv. Trust Originated Preferred Securities 10,000 1,028,750 - ---------------------------------------------------------------- Houston Industries, Inc., 7% Automatic Common Exchange Securities, Exchangeable for Time Warner, Inc. Common Stock 25,000 1,426,562 - ---------------------------------------------------------------- Merrill Lynch & Co., Inc., 6.25% Structured Yield Product Exchangeable for Stock 10,000 345,000 ------------- Total Other Securities (Cost $2,239,123) 2,800,312 PRINCIPAL AMOUNT - ---------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 3.2% - ---------------------------------------------------------------- U.S. Treasury Bonds: 6.375%, 8/15/27 $ 1,150,000 1,212,891
OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT NOTE 1 - ---------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS (CONTINUED) - ---------------------------------------------------------------- U.S. Treasury Bonds: (Continued) 6.50%, 11/15/26 $ 3,500,000 $ 3,737,346 ------------- Total U.S. Government Obligations (Cost $4,488,195) 4,950,237 - ---------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES - 8.0% - ---------------------------------------------------------------- Adaptec, Inc., 4.75% Cv. Sub. Nts., 2/1/04(5) 1,000,000 1,030,000 - ---------------------------------------------------------------- Continental Airlines, Inc., 6.75% Cv. Sub. Nts., 4/15/06 500,000 820,000 - ---------------------------------------------------------------- Corporate Express, Inc., 4.50% Cv. Sub. Nts., 7/1/00 1,250,000 1,110,937 - ---------------------------------------------------------------- Fine Host Corp., 5% Cv. Sub. Nts., 11/1/04(4) 1,000,000 625,000 - ---------------------------------------------------------------- Interpublic Group Cos., 1.80% Cv. Sub. Debs., 9/16/04(4) 1,000,000 823,750 - ---------------------------------------------------------------- Loews Corp., 3.125% Cv. Sub. Nts., 9/15/07 1,000,000 995,000 - ---------------------------------------------------------------- PLATINUM Technology, Inc.: 6.25% Cv. Sub. Nts., 12/15/02(5) 2,000,000 2,117,500 6.75% Cv. Sub. Nts., 11/15/01 500,000 1,046,875 - ---------------------------------------------------------------- Quantum Corp., 7% Cv. Sub. Nts., 8/1/04 1,250,000 1,175,000 - ---------------------------------------------------------------- Saks Holdings, Inc., 5.50% Cv. Sub. Nts., 9/15/06 1,500,000 1,280,625 - ---------------------------------------------------------------- Tower Automotive, Inc., 5% Cv. Sub. Nts., 8/1/04(4) 500,000 520,000 - ---------------------------------------------------------------- U.S. Office Products Co., 5.50% Cv. Sub. Nts., 5/15/03(4) 1,000,000 903,750 ------------- Total Convertible Corporate Bonds and Notes (Cost $11,947,833) 12,448,437 - ---------------------------------------------------------------- REPURCHASE AGREEMENTS - 0.8% - ---------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 6.60%, dated 12/31/97, to be repurchased at $1,200,440 on 1/2/98, collateralized by U.S. Treasury Bonds, 8%-10.625%, 8/15/15-11/15/21, with a value of $889,443, and U.S. Treasury Nts., 5.875%-7.50%, 9/30/01-12/31/01, with a value of $335,205 (Cost $1,200,000) $ 1,200,000 1,200,000 - ---------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $135,530,028) 98.9% 153,729,758 - ---------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.1 1,637,992 ----------- ------------- NET ASSETS 100.0% $155,367,750 ----------- ------------- ----------- -------------
1. Non-income producing security. 2. A sufficient amount of liquid assets has been designated to cover outstanding written call options, as follows:
SHARES SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE TO CALL DATE PRICE RECEIVED NOTE 1 - ---------------------------------------------------------------------------------------------- Abercrombie & Fitch Cl. A 8,000 1/98 $ 35 $22,759 $2,000 AMR Corp. 2,500 1/98 135 9,612 2,188 Boston Scientific Corp. 2,500 1/98 55 1,200 313 CBS Corp. 50,000 1/98 35 17,749 3,125 Sun Microsystems, Inc. 25,000 1/98 50 10,438 1,562 -------- ------ $61,758 $9,188 -------- ------ -------- ------
3. Units may be comprised of several components, such as debt and equity and/or warrants to purchase equity at some point in the future. For units which represent debt securities, principal amount disclosed represents total underlying principal. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (CONTINUED) - -------------------------------------------------------------------------------- 4. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $9,452,500 or 6.08% of the Fund's net assets as of December 31, 1997. 5. Identifies issues considered to be illiquid or restricted - See Note 6 of Notes to Financial Statements. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1997
OPPENHEIMER OPPENHEIMER OPPENHEIMER MONEY HIGH INCOME BOND FUND FUND FUND - ---------------------------------------------------------------------------------- ASSETS: Investments, at value (cost * ) (including repurchase agreements **) - see accompanying statements $125,778,964 $315,552,124 $601,914,075 - ---------------------------------------------------------------------------------- Unrealized appreciation on forward foreign currency exchange contracts - -see applicable note -- 211,244 193,971 - ---------------------------------------------------------------------------------- Cash 2,083 10,676 750,383 - ---------------------------------------------------------------------------------- Receivables: Dividends, interest and principal paydowns 184,276 3,819,980 7,588,406 Closed forward foreign currency exchange contracts -- 138,584 1,683 Daily variation on futures contracts - see applicable note -- -- 171,203 Shares of beneficial interest sold 1,081,045 260,980 352,813 Investments sold -- 2,112,567 32,654,999 - ---------------------------------------------------------------------------------- Other 4,564 5,251 6,192 ------------- ------------- ------------- Total assets 127,050,932 322,111,406 643,633,725 - ---------------------------------------------------------------------------------- LIABILITIES: Bank overdraft -- -- -- - ---------------------------------------------------------------------------------- Options written, at value (premiums received ***) - see accompanying statements and notes -- -- -- - ---------------------------------------------------------------------------------- Unrealized depreciation on forward foreign exchange contracts - see applicable note -- 62,395 2,803 - ---------------------------------------------------------------------------------- Unrealized depreciation on interest rate swaps - see applicable note -- -- -- - ---------------------------------------------------------------------------------- Payables and other liabilities: Closed forward foreign currency exchange contracts -- 13,758 16,014 Daily variation on futures contracts - see applicable note -- -- -- Dividends 243,614 -- -- Custodian fees 3,783 38,682 71,463 Registration and filing fees 2,059 27,228 24,389 Shareholder reports 5,704 6,971 7,401 Legal and auditing fees 9,321 14,678 -- Investments purchased (including those purchased on a when-issued basis****) - see applicable note -- 30,065,705 122,645,501 Shares of beneficial interest redeemed -- 387,715 775,130 Other 4,069 171,483 12,996 ------------- ------------- ------------- Total liabilities 268,550 30,788,615 123,555,697 - ---------------------------------------------------------------------------------- NET ASSETS $126,782,382 $291,322,791 $520,078,028 ------------- ------------- ------------- ------------- ------------- ------------- - ---------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS: Paid-in capital $126,798,517 $272,156,892 $501,115,939 - ---------------------------------------------------------------------------------- Undistributed net investment income -- 1,776,867 1,857,027 - ---------------------------------------------------------------------------------- Accumulated net realized gain (loss) from investments and foreign currency transactions (16,135) 6,730,159 5,563,419 - ---------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies -- 10,658,873 11,541,643 ------------- ------------- ------------- Net assets $126,782,382 $291,322,791 $520,078,028 ------------- ------------- ------------- ------------- ------------- ------------- - ---------------------------------------------------------------------------------- SHARES OF BENEFICIAL INTEREST OUTSTANDING 126,798,538 25,297,573 43,651,270 - ---------------------------------------------------------------------------------- NET ASSETS VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $ 1.00 $ 11.52 $ 11.91 * Cost $125,778,964 $305,080,290 $590,845,008 ** Repurchase agreements $ -- $ 74,150,000 $ 13,500,000 *** Premiums received $ -- $ -- $ -- ****When-issued $ -- $ 1,480,181 $122,707,112
See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1997 (CONTINUED)
OPPENHEIMER OPPENHEIMER CAPITAL OPPENHEIMER MULTIPLE APPRECIATION GROWTH STRATEGIES FUND FUND FUND - ---------------------------------------------------------------------------------- ASSETS: Investments, at value (cost * ) (including repurchase agreements **) - see accompanying statements $881,988,555 $491,180,589 $641,798,961 - ---------------------------------------------------------------------------------- Unrealized appreciation on forward foreign currency exchange contracts - -see applicable note -- -- -- - ---------------------------------------------------------------------------------- Cash 14,363 294,871 -- - ---------------------------------------------------------------------------------- Receivables: Dividends, interest and principal paydowns 125,802 268,765 4,206,562 Closed forward foreign currency exchange contracts -- -- -- Daily variation on futures contracts - see applicable note -- -- -- Shares of beneficial interest sold 619,393 1,707,785 119,130 Investments sold 7,415,298 1,898,266 6,153,594 - ---------------------------------------------------------------------------------- Other 7,782 5,536 8,008 ------------- ------------- ------------- Total assets 890,171,193 495,355,812 652,286,255 - ---------------------------------------------------------------------------------- LIABILITIES: Bank overdraft -- -- 191,501 - ---------------------------------------------------------------------------------- Options written, at value (premiums received ***) - see accompanying statements and notes -- -- 1,659,525 - ---------------------------------------------------------------------------------- Unrealized depreciation on forward foreign exchange contracts - see applicable note -- -- -- - ---------------------------------------------------------------------------------- Unrealized depreciation on interest rate swaps - see applicable note -- -- -- - ---------------------------------------------------------------------------------- Payables and other liabilities: Closed forward foreign currency exchange contracts -- -- -- Daily variation on futures contracts - see applicable note -- -- -- Dividends -- -- -- Custodian fees 28,264 14,814 32,669 Registration and filing fees 60,358 41,484 30,771 Shareholder reports 9,099 5,283 5,111 Legal and auditing fees 14,386 10,400 15,420 Investments purchased (including those purchased on a when-issued basis****) - see applicable note 11,980,470 -- 12,430,220 Shares of beneficial interest redeemed 269,803 1,377,532 322,021 Other 1,340 325 54,187 ------------- ------------- ------------- Total liabilities 12,363,720 1,449,838 14,741,425 - ---------------------------------------------------------------------------------- NET ASSETS $877,807,473 $493,905,974 $637,544,830 ------------- ------------- ------------- ------------- ------------- ------------- - ---------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS: Paid-in capital $688,711,219 $351,479,268 $505,041,083 - ---------------------------------------------------------------------------------- Undistributed net investment income 2,236,363 3,896,959 1,264,870 - ---------------------------------------------------------------------------------- Accumulated net realized gain (loss) from investments and foreign currency transactions 20,119,606 47,279,914 33,831,700 - ---------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 166,740,285 91,249,833 97,407,177 ------------- ------------- ------------- Net assets $877,807,473 $493,905,974 $637,544,830 ------------- ------------- ------------- ------------- ------------- ------------- - ---------------------------------------------------------------------------------- SHARES OF BENEFICIAL INTEREST OUTSTANDING 21,431,667 15,223,362 37,473,072 - ---------------------------------------------------------------------------------- NET ASSETS VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $ 40.96 $ 32.44 $ 17.01 * Cost $715,248,270 $399,931,087 $544,500,683 ** Repurchase agreements $107,250,000 $101,500,000 $107,800,000 *** Premiums received $ -- $ -- $ 1,797,849 ****When-issued $ -- $ -- $ 12,187,250
See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1997 (CONTINUED)
OPPENHEIMER OPPENHEIMER OPPENHEIMER GLOBAL STRATEGIC GROWTH & SECURITIES BOND INCOME FUND FUND FUND - ---------------------------------------------------------------------------------- ASSETS: Investments, at value (cost * ) (including repurchase agreements **) - see accompanying statements $962,129,951 $224,183,620 $153,729,758 - ---------------------------------------------------------------------------------- Unrealized appreciation on forward foreign currency exchange contracts - -see applicable note 1,799,690 595,613 -- - ---------------------------------------------------------------------------------- Cash 2,017,169 699,965 231,605 - ---------------------------------------------------------------------------------- Receivables: Dividends, interest and principal paydowns 1,240,888 3,691,367 360,188 Closed forward foreign currency exchange contracts -- 84,889 -- Daily variation on futures contracts - see applicable note -- 116,794 -- Shares of beneficial interest sold 137,876 212,467 422,551 Investments sold 1,195,436 11,561,416 677,712 - ---------------------------------------------------------------------------------- Other 76,135 3,937 3,526 ------------- ------------- ------------- Total assets 968,597,145 241,150,068 155,425,340 - ---------------------------------------------------------------------------------- LIABILITIES: Bank overdraft -- -- -- - ---------------------------------------------------------------------------------- Options written, at value (premiums received ***) - see accompanying statements and notes -- 90,842 9,188 - ---------------------------------------------------------------------------------- Unrealized depreciation on forward foreign exchange contracts - see applicable note -- 36,840 -- - ---------------------------------------------------------------------------------- Unrealized depreciation on interest rate swaps - see applicable note -- 13,161 -- - ---------------------------------------------------------------------------------- Payables and other liabilities: Closed forward foreign currency exchange contracts -- 24,680 -- Daily variation on futures contracts - see applicable note 148,871 -- -- Dividends -- -- -- Custodian fees 149,388 22,286 10,063 Registration and filing fees 69,677 25,784 25,194 Shareholder reports 2,651 6,995 4,972 Legal and auditing fees 14,856 -- 7,454 Investments purchased (including those purchased on a when-issued basis****) - see applicable note 7,860,390 33,068,507 -- Shares of beneficial interest redeemed 1,241,092 12,563 117 Other -- 9,006 602 ------------- ------------- ------------- Total liabilities 9,486,925 33,310,664 57,590 - ---------------------------------------------------------------------------------- NET ASSETS $959,110,220 $207,839,404 $155,367,750 ------------- ------------- ------------- ------------- ------------- ------------- - ---------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS: Paid-in capital $744,137,672 $203,301,751 $127,164,576 - ---------------------------------------------------------------------------------- Undistributed net investment income 18,148,506 885,276 130,085 - ---------------------------------------------------------------------------------- Accumulated net realized gain (loss) from investments and foreign currency transactions 80,213,055 1,088,375 9,820,789 - ---------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 116,610,987 2,564,002 18,252,300 ------------- ------------- ------------- Net assets $959,110,220 $207,839,404 $155,367,750 ------------- ------------- ------------- ------------- ------------- ------------- - ---------------------------------------------------------------------------------- SHARES OF BENEFICIAL INTEREST OUTSTANDING 44,883,946 40,604,565 7,551,181 - ---------------------------------------------------------------------------------- NET ASSETS VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $ 21.37 $ 5.12 $ 20.58 * Cost $847,161,916 $222,378,087 $135,530,028 ** Repurchase agreements $165,700,000 $ 1,750,000 $ 1,200,000 *** Premiums received $ -- $ 34,725 $ 61,758 ****When-issued $ -- $ 30,736,603 $ --
See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997
OPPENHEIMER OPPENHEIMER OPPENHEIMER MONEY HIGH INCOME BOND FUND FUND FUND - ------------------------------------------------------------------------------ INVESTMENT INCOME: Interest (net of withholding taxes of *) $7,577,599 $20,442,056 $33,458,444 - ------------------------------------------------------------------------------ Dividends (net of withholding taxes of **) -- 1,258,134 258,565 ----------- ------------ ------------ Total income 7,577,599 21,700,190 33,717,009 - ------------------------------------------------------------------------------ EXPENSES: Management fees - see applicable note 601,698 1,667,490 3,281,556 - ------------------------------------------------------------------------------ Custodian fees and expenses 13,515 103,951 154,627 - ------------------------------------------------------------------------------ Legal and auditing fees 11,852 19,951 16,713 - ------------------------------------------------------------------------------ Insurance expenses 3,192 4,124 11,009 - ------------------------------------------------------------------------------ Trustees' fees and expenses 2,531 3,923 2,633 - ------------------------------------------------------------------------------ Registration and filing fees 6,580 27,204 25,949 - ------------------------------------------------------------------------------ Shareholder reports 1,022 7,350 4,789 - ------------------------------------------------------------------------------ Other 3,155 5,155 -- ----------- ------------ ------------ Total expenses 643,545 1,839,148 3,497,276 - ------------------------------------------------------------------------------ NET INVESTMENT INCOME 6,934,054 19,861,042 30,219,733 - ------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on: Investments (including premiums on written options exercised) 2,232 7,036,521 5,711,116 Closing of futures contracts -- 826,665 1,316,170 Closing and expiration of options written -- (51,550) (146,182) Foreign currency transactions -- (1,546,166) (2,842,519) - ------------------------------------------------------------------------------ Net change in unrealized appreciation or depreciation on: Investments -- 563,196 6,848,511 Translation of assets and liabilities denominated in foreign currencies -- (469,986) (408,371) ----------- ------------ ------------ Net realized and unrealized gain 2,232 6,358,680 10,478,725 - ------------------------------------------------------------------------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $6,936,286 $26,219,722 $40,698,458 ----------- ------------ ------------ ----------- ------------ ------------ * Interest $ -- $ 10,065 $ 4,337 ** Dividends $ -- $ -- $ --
See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (CONTINUED)
OPPENHEIMER OPPENHEIMER CAPITAL OPPENHEIMER MULTIPLE APPRECIATION GROWTH STRATEGIES FUND FUND FUND - ------------------------------------------------------------------------------- INVESTMENT INCOME: Interest (net of withholding taxes of *) $ 7,105,846 $ 4,639,011 $22,495,840 - ------------------------------------------------------------------------------- Dividends (net of withholding taxes of **) 720,291 2,269,196 3,524,342 ------------ ------------ ------------ Total income 7,826,137 6,908,207 26,020,182 - ------------------------------------------------------------------------------- EXPENSES: Management fees - see applicable note 5,324,309 2,859,202 4,068,887 - ------------------------------------------------------------------------------- Custodian fees and expenses 52,443 17,577 91,673 - ------------------------------------------------------------------------------- Legal and auditing fees 19,986 7,969 23,261 - ------------------------------------------------------------------------------- Insurance expenses 5,743 3,820 6,306 - ------------------------------------------------------------------------------- Trustees' fees and expenses 4,447 2,538 8,486 - ------------------------------------------------------------------------------- Registration and filing fees 61,056 41,602 32,647 - ------------------------------------------------------------------------------- Shareholder reports 4,975 5,552 6,420 - ------------------------------------------------------------------------------- Other 3,812 3,172 3,651 ------------ ------------ ------------ Total expenses 5,476,771 2,941,432 4,241,331 - ------------------------------------------------------------------------------- NET INVESTMENT INCOME 2,349,366 3,966,775 21,778,851 - ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on: Investments (including premiums on written options exercised) 19,490,648 47,415,133 33,641,766 Closing of futures contracts 1,783,530 -- 491,399 Closing and expiration of options written -- -- 786,716 Foreign currency transactions 19,135 20,660 (722,776) - ------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on: Investments 61,402,694 34,345,899 38,520,567 Translation of assets and liabilities denominated in foreign currencies 115,131 (151,565) (6,064,955) ------------ ------------ ------------ Net realized and unrealized gain 82,811,138 81,630,127 66,652,717 - ------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $85,160,504 $85,596,902 $88,431,568 ------------ ------------ ------------ ------------ ------------ ------------ * Interest $ -- $ -- $ 209 ** Dividends $ 6,162 $ 1,341 $ 61,592
See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (CONTINUED)
OPPENHEIMER OPPENHEIMER OPPENHEIMER GLOBAL STRATEGIC GROWTH & SECURITIES BOND INCOME FUND FUND FUND - -------------------------------------------------------------------------------- INVESTMENT INCOME: Interest (net of withholding taxes of *) $ 9,183,668 $14,212,979 $ 979,655 - -------------------------------------------------------------------------------- Dividends (net of withholding taxes of **) 9,092,481 264,213 906,266 ------------- ------------ ------------ Total income 18,276,149 14,477,192 1,885,921 - -------------------------------------------------------------------------------- EXPENSES: Management fees - see applicable note 5,615,606 1,197,613 709,577 - -------------------------------------------------------------------------------- Custodian fees and expenses 400,943 71,266 20,090 - -------------------------------------------------------------------------------- Legal and auditing fees 24,221 9,307 17,255 - -------------------------------------------------------------------------------- Insurance expenses 5,865 3,511 3,408 - -------------------------------------------------------------------------------- Trustees' fees and expenses 5,100 1,201 2,424 - -------------------------------------------------------------------------------- Registration and filing fees 71,845 26,345 25,431 - -------------------------------------------------------------------------------- Shareholder reports 6,035 8,252 8,542 - -------------------------------------------------------------------------------- Other 2,859 3,649 4,281 ------------- ------------ ------------ Total expenses 6,132,474 1,321,144 791,008 - -------------------------------------------------------------------------------- NET INVESTMENT INCOME 12,143,675 13,156,048 1,094,913 - -------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS): Net realized gain (loss) on: Investments (including premiums on written options exercised) 113,207,351 2,473,943 9,650,814 Closing of futures contracts (5,626,341) (369,000) -- Closing and expiration of options written -- 118,947 262,534 Foreign currency transactions (3,862,454) (1,329,032) (75,881) - -------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on: Investments 58,404,815 1,600,922 15,100,642 Translation of assets and liabilities denominated in foreign currencies (24,747,813) (2,042,323) (51,446) ------------- ------------ ------------ Net realized and unrealized gain 137,375,558 453,457 24,886,663 - -------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $149,519,233 $13,609,505 $25,981,576 ------------- ------------ ------------ ------------- ------------ ------------ * Interest $ -- $ 5,972 $ -- ** Dividends $ -- $ -- $ --
See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
OPPENHEIMER OPPENHEIMER MONEY HIGH INCOME FUND FUND 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 6,934,054 $ 4,976,254 $ 19,861,042 $ 14,430,943 - ------------------------------------------------------------------------------------------- Net realized gain 2,232 2,966 6,265,470 3,333,591 - ------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation -- -- 93,210 4,840,420 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations 6,936,286 4,979,220 26,219,722 22,604,954 - ------------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (6,937,040) (4,976,254) (18,546,183) (15,283,448) - ------------------------------------------------------------------------------------------- Distributions from net realized gain -- -- (138,778) -- - ------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - see applicable note (2,935,384) 64,329,094 92,494,657 50,521,087 - ------------------------------------------------------------------------------------------- NET ASSETS: Total increase (decrease) (2,936,138) 64,332,060 100,029,418 57,842,593 - ------------------------------------------------------------------------------------------- Beginning of period 129,718,520 65,386,460 191,293,373 133,450,780 ------------ ------------ ------------ ------------ End of period $126,782,382 $129,718,520 $291,322,791 $191,293,373 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Undistributed net investment income $ -- $ -- $ 1,776,867 $ 913,946
OPPENHEIMER OPPENHEIMER CAPITAL BOND APPRECIATION FUND FUND 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 30,219,733 $ 19,901,086 $ 2,349,366 $ 1,496,337 - ------------------------------------------------------------------------------------------- Net realized gain 4,038,585 2,269,644 21,293,313 29,569,670 - ------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 6,440,140 (4,742,040) 61,517,825 42,247,113 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations 40,698,458 17,428,690 85,160,504 73,313,120 - ------------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (27,908,616) (20,181,337) (1,547,409) (1,132,964) - ------------------------------------------------------------------------------------------- Distributions from net realized gain (1,447,022) (133,010) (30,466,762) (21,289,429) - ------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - see applicable note 82,296,263 218,092,832 207,268,868 241,097,454 - ------------------------------------------------------------------------------------------- NET ASSETS: Total increase (decrease) 93,639,083 215,207,175 260,415,201 291,988,181 - ------------------------------------------------------------------------------------------- Beginning of period 426,438,945 211,231,770 617,392,272 325,404,091 ------------ ------------ ------------ ------------ End of period $520,078,028 $426,438,945 $877,807,473 $617,392,272 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Undistributed net investment income $ 1,857,027 $ 1,873,402 $ 2,236,363 $ 1,479,312
See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996 (CONTINUED)
OPPENHEIMER OPPENHEIMER MULTIPLE GROWTH STRATEGIES FUND FUND 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 3,966,775 $ 1,650,969 $ 21,778,851 $ 20,927,009 - ------------------------------------------------------------------------------------------- Net realized gain 47,435,793 17,101,200 34,197,105 18,594,692 - ------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 34,194,334 14,349,688 32,455,612 22,792,094 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations 85,596,902 33,101,857 88,431,568 62,313,795 - ------------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (1,639,463) (1,310,185) (21,242,764) (21,290,805) - ------------------------------------------------------------------------------------------- Distributions from net realized gain (17,220,011) (8,706,724) (18,354,349) (9,273,309) - ------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - see applicable note 141,248,396 145,125,312 104,424,895 71,272,635 - ------------------------------------------------------------------------------------------- NET ASSETS: Total increase (decrease) 207,985,824 168,210,260 153,259,350 103,022,316 - ------------------------------------------------------------------------------------------- Beginning of period 285,920,150 117,709,890 484,285,480 381,263,164 ------------ ------------ ------------ ------------ End of period $493,905,974 $285,920,150 $637,544,830 $484,285,480 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Undistributed net investment income $ 3,896,959 $ 1,631,413 $ 1,264,870 $ 961,193
OPPENHEIMER OPPENHEIMER GLOBAL STRATEGIC SECURITIES BOND FUND FUND 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------- OPERATIONS: Net investment income $ 12,143,675 $ 5,075,730 $ 13,156,048 $ 7,004,776 - ------------------------------------------------------------------------------------------- Net realized gain 103,718,556 11,775,734 894,858 1,835,670 - ------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 33,657,002 59,143,734 (441,401) 1,164,352 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations 149,519,233 75,995,198 13,609,505 10,004,798 - ------------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (8,181,958) -- (12,654,390) (6,891,899) - ------------------------------------------------------------------------------------------- Distributions from net realized gain -- -- (207,080) -- - ------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - see applicable note 235,692,756 145,106,158 88,374,959 55,505,898 - ------------------------------------------------------------------------------------------- NET ASSETS: Total increase (decrease) 377,030,031 221,101,356 89,122,994 58,618,797 - ------------------------------------------------------------------------------------------- Beginning of period 582,080,189 360,978,833 118,716,410 60,097,613 ------------ ------------ ------------ ------------ End of period $959,110,220 $582,080,189 $207,839,404 $118,716,410 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Undistributed net investment income $ 18,148,506 $ 7,724,243 $ 885,276 $ 751,089
See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996 (CONTINUED)
OPPENHEIMER GROWTH & INCOME 1997 FUND1996 - -------------------------------------------------------------- OPERATIONS: Net investment income $ 1,094,913 $ 303,556 - -------------------------------------------------------------- Net realized gain 9,837,467 2,657,756 - -------------------------------------------------------------- Net change in unrealized appreciation or depreciation 15,049,196 2,697,929 ------------ ----------- Net increase in net assets resulting from operations 25,981,576 5,659,241 - -------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment income (976,438) (291,690) - -------------------------------------------------------------- Distributions from net realized gain (2,670,354) (31,219) - -------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS: Net increase (decrease) in net assets resulting from beneficial interest transactions - see applicable note 86,023,722 37,384,461 - -------------------------------------------------------------- NET ASSETS: Total increase (decrease) 108,358,506 42,720,793 - -------------------------------------------------------------- Beginning of period 47,009,244 4,288,451 ------------ ----------- End of period $155,367,750 $47,009,244 ------------ ----------- ------------ ----------- Undistributed net investment income $ 130,085 $ 12,643
See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, ---------------------------------------------------- 1997 1996 1995 1994 1993 - ----------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ----------------------------------------------------------------------------------------- Income from investment operations - net investment income and net realized gain .05 .05 .06 .04 .03 Dividends and distributions to shareholders (.05) (.05) (.06) (.04) (.03) - ----------------------------------------------------------------------------------------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- - ----------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 5.31% 5.13% 5.62% 4.25% 3.09% - ----------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $126,782 $129,719 $ 65,386 $ 89,671 $ 61,221 - ----------------------------------------------------------------------------------------- Average net assets (in thousands) $133,707 $ 99,263 $ 75,136 $ 90,264 $ 57,654 - ----------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 5.19% 5.01% 5.52% 4.18% 3.12% Expenses 0.48% 0.49% 0.51% 0.43% 0.43%
1. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends 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 of less than one full year. Total returns reflect changes in net investment income only. 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. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, ---------------------------------------------------- 1997 1996 1995 1994 1993 - ----------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.13 $ 10.63 $ 9.79 $ 11.02 $ 9.74 - ----------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .94 .97 .98 .94 .82 Net realized and unrealized gain (loss) .37 .58 .94 (1.27) 1.65 - ----------------------------------------------------------------------------------------- Total income (loss) from investment operations 1.31 1.55 1.92 (.33) 2.47 - ----------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.91) (1.05) (1.08) (.66) (1.19) Distributions from net realized gain (.01) -- -- (.24) -- - ----------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (.92) (1.05) (1.08) (.90) (1.19) - ----------------------------------------------------------------------------------------- Net asset value, end of period $ 11.52 $ 11.13 $ 10.63 $ 9.79 $ 11.02 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- - ----------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 12.21% 15.26% 20.37% (3.18)% 26.34% - ----------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $291,323 $191,293 $133,451 $ 95,698 $ 93,011 - ----------------------------------------------------------------------------------------- Average net assets (in thousands) $223,617 $157,203 $115,600 $101,096 $ 67,000 - ----------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 8.88% 9.18% 9.81% 9.15% 10.50% Expenses 0.82% 0.81% 0.81% 0.67% 0.68% - ----------------------------------------------------------------------------------------- Portfolio turnover rate(2) 167.6% 125.0% 107.1% 110.1% 135.7%
1. Assumes a hypothetical initial 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 of less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 2. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1997 were $378,724,828 and $329,656,036, respectively. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, ---------------------------------------------------- 1997 1996 1995 1994 1993 - ----------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 11.63 $ 11.84 $ 10.78 $ 11.65 $ 10.99 - ----------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .76 .69 .72 .76 .65 Net realized and unrealized gain (loss) .28 (.15) 1.07 (.98) .76 - ----------------------------------------------------------------------------------------- Total income (loss) from investment operations 1.04 .54 1.79 (.22) 1.41 - ----------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.72) (.74) (.73) (.62) (.75) Distributions from net realized gain (.04) (.01) -- (.03) -- - ----------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (.76) (.75) (.73) (.65) (.75) - ----------------------------------------------------------------------------------------- Net asset value, end of period $ 11.91 $ 11.63 $ 11.84 $ 10.78 $ 11.65 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- - ----------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 9.25% 4.80% 17.00% (1.94)% 13.04% - ----------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $520,078 $426,439 $211,232 $135,067 $111,846 - ----------------------------------------------------------------------------------------- Average net assets (in thousands) $449,760 $296,253 $170,929 $121,884 $ 87,215 - ----------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 6.72% 6.72% 6.91% 7.30% 7.20% Expenses 0.78% 0.78% 0.80% 0.57% 0.46% - ----------------------------------------------------------------------------------------- Portfolio turnover rate(2) 116.9% 82.3% 79.4% 35.1% 36.3%
1. Assumes a hypothetical initial 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 of less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 2. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities and mortgage "dollar rolls") for the period ended December 31, 1997 were $497,189,725 and $456,241,630, respectively. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS DECEMBER 31, 1997
YEAR ENDED DECEMBER 31, ---------------------------------------------------- 1997 1996 1995 1994 1993 - ----------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 38.71 $ 34.21 $ 25.95 $ 31.64 $ 26.04 - ----------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .10 .09 .11 .10 .05 Net realized and unrealized gain (loss) 4.01 6.59 8.29 (2.22) 6.71 - ----------------------------------------------------------------------------------------- Total income (loss) from investment operations 4.11 6.68 8.40 (2.12) 6.76 - ----------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.09) (.11) (.09) (.04) (.06) Distributions from net realized gain (1.77) (2.07) (.05) (3.53) (1.10) - ----------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (1.86) (2.18) (.14) (3.57) (1.16) - ----------------------------------------------------------------------------------------- Net asset value, end of period $ 40.96 $ 38.71 $ 34.21 $ 25.95 $ 31.64 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- - ----------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 11.67% 20.22% 32.52% (7.59)% 27.32% - ----------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $877,807 $617,392 $325,404 $185,774 $136,885 - ----------------------------------------------------------------------------------------- Average net assets (in thousands) $753,852 $467,080 $240,730 $153,832 $ 98,228 - ----------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 0.31% 0.32% 0.47% 0.50% 0.23% Expenses 0.73% 0.75% 0.78% 0.57% 0.47% - ----------------------------------------------------------------------------------------- Portfolio turnover rate(2) 87.6% 100.1% 125.5% 96.5% 122.8% Average brokerage commission rate(3) $ 0.0626 $ 0.0583 $ 0.0577 -- --
1. Assumes a hypothetical initial 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 of less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 2. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1997 were $762,900,287 and $551,581,444, respectively. 3. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the total of related shares purchased and sold. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, ------------------------------------------------------ 1997 1996 1995 1994 1993 - ------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 27.24 $ 23.55 $ 17.68 $ 17.70 $ 16.96 - ------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .25 .15 .25 .22 .46 Net realized and unrealized gain (loss) 6.62 5.46 6.10 (.05) .74 - ------------------------------------------------------------------------------------------- Total income from investment operations 6.87 5.61 6.35 .17 1.20 - ------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.15) (.25) (.22) (.15) (.14) Distributions from net realized gain (1.52) (1.67) (.26) (.04) (.32) - ------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (1.67) (1.92) (.48) (.19) (.46) - ------------------------------------------------------------------------------------------- Net asset value, end of period $ 32.44 $ 27.24 $ 23.55 $ 17.68 $ 17.70 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- - ------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 26.68% 25.20% 36.65% 0.97% 7.25% - ------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $493,906 $285,920 $117,710 $ 63,283 $ 56,701 - ------------------------------------------------------------------------------------------- Average net assets (in thousands) $390,447 $152,466 $ 88,803 $ 59,953 $ 46,389 - ------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 1.02% 1.08% 1.46% 1.38% 1.13% Expenses, before voluntary reimbursement by the Manager 0.75% 0.81%(2) 0.79% 0.58% 0.50% - ------------------------------------------------------------------------------------------- Portfolio turnover rate(3) 66.0% 65.4% 58.2% 53.8% 12.6% Average brokerage commission rate(4) $ 0.0549 $ 0.0589 $ 0.0590 -- --
1. Assumes a hypothetical initial 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 of less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 2. The expense ratio was 0.79% net of the voluntary reimbursement by the Manager. 3. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1997 were $308,605,124 and $200,244,411, respectively. 4. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the total number of related shares purchased and sold. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, ---------------------------------------------------- 1997 1996 1995 1994 1993 - ----------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 15.63 $ 14.55 $ 12.91 $ 13.88 $ 12.47 - ----------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .62 .72 .66 .63 .55 Net realized and unrealized gain (loss) 1.95 1.45 2.00 (.90) 1.41 - ----------------------------------------------------------------------------------------- Total income (loss) from investment operations 2.57 2.17 2.66 (.27) 1.96 - ----------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.61) (.74) (.65) (.60) (.55) Distributions from net realized gain (.58) (.35) (.37) (.10) -- - ----------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (1.19) (1.09) (1.02) (.70) (.55) - ----------------------------------------------------------------------------------------- Net asset value, end of period $ 17.01 $ 15.63 $ 14.55 $ 12.91 $ 13.88 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- - ----------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 17.22% 15.50% 21.36% (1.95)% 15.95% - ----------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $637,545 $484,285 $381,263 $292,067 $250,290 - ----------------------------------------------------------------------------------------- Average net assets (in thousands) $564,369 $428,277 $344,745 $279,949 $199,954 - ----------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 3.86% 4.89% 4.81% 4.90% 4.44% Expenses 0.75% 0.77% 0.77% 0.56% 0.48% - ----------------------------------------------------------------------------------------- Portfolio turnover rate(2) 41.9% 40.3% 39.0% 31.4% 32.4% Average brokerage commission rate(3) $ 0.0217 $ 0.0361 $ 0.0329 -- --
1. Assumes a hypothetical initial 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 of less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 2. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1997 were $258,504,039 and $195,905,788, respectively. 3. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the total number of related shares purchased and sold. Generally, non-U.S. commissions are lower than U.S. commissions when expressed as cents per share but higher when expressed as a percentage of transactions because of the lower per-share prices of many non-U.S. securities. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, --------------------------------------------------- 1997 1996 1995 1994 1993 - ---------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 17.67 $ 15.00 $ 15.09 $ 16.30 $ 9.57 - ---------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) .25 .15 .12 .04 (.02) Net realized and unrealized gain (loss) 3.68 2.52 .19 (.96) 6.75 - ---------------------------------------------------------------------------------------- Total income (loss) from investment operations 3.93 2.67 .31 (.92) 6.73 - ---------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.23) -- -- (.04) -- Distributions from net realized gain -- -- (.40) (.25) -- - ---------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (.23) -- (.40) (.29) -- - ---------------------------------------------------------------------------------------- Net asset value, end of period $ 21.37 $ 17.67 $ 15.00 $ 15.09 $ 16.30 -------- -------- -------- -------- ------- -------- -------- -------- -------- ------- - ---------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 22.42% 17.80% 2.24% (5.72)% 70.32% - ---------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $959,110 $582,080 $360,979 $297,842 $96,425 - ---------------------------------------------------------------------------------------- Average net assets (in thousands) $802,389 $466,750 $332,336 $214,545 $31,696 - ---------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 1.51% 1.09% 0.86% 0.54% 0.72% Expenses 0.76% 0.81% 0.89% 0.91% 0.92% - ---------------------------------------------------------------------------------------- Portfolio turnover rate(2) 67.1% 89.9% 131.3% 70.4% 65.1% Average brokerage commission rate(3) $ 0.0041 $ 0.0045 $ 0.0092 -- --
1. Assumes a hypothetical initial 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 of less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 2. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1997 were $595,489,366 and $459,609,905, respectively. 3. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the total number of related shares purchased and sold. Generally, non-U.S. commissions are lower than U.S. commissions when expressed as cents per share but higher when expressed as a percentage of transactions because of the lower per-share prices of many non-U.S. securities. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, ---------------------------------------------------- 1997 1996 1995 1994 1993(1) - ----------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 5.09 $ 4.91 $ 4.60 $ 5.12 $ 5.00 - ----------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .39 .38 .38 .35 .10 Net realized and unrealized gain (loss) .04 .19 .30 (.54) .11 - ----------------------------------------------------------------------------------------- Total income (loss) from investment operations .43 .57 .68 (.19) .21 - ----------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.39) (.39) (.37) (.32) (.09 ) Distributions from net realized gain (.01) -- -- (.01) -- - ----------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (.40) (.39) (.37) (.33) (.09 ) - ----------------------------------------------------------------------------------------- Net asset value, end of period $ 5.12 $ 5.09 $ 4.91 $ 4.60 $ 5.12 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- - ----------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(2) 8.71% 12.07% 15.33% (3.78)% 4.25% - ----------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $207,839 $118,716 $ 60,098 $ 20,320 $ 9,887 - ----------------------------------------------------------------------------------------- Average net assets (in thousands) $159,934 $ 82,604 $ 37,698 $ 15,389 $ 4,259 - ----------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 8.23% 8.48% 9.32% 8.36% 5.67%(3) Expenses 0.83% 0.85% 0.85% 0.87% 0.96%(3) - ----------------------------------------------------------------------------------------- Portfolio turnover rate(4) 149.7% 144.3% 87.0% 136.6% 10.9%
1. For the period from May 3, 1993 (commencement of operations) to December 31, 1993. 2. Assumes a hypothetical initial 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 of less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1997 were $280,894,743 and $221,120,528, respectively. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND FINANCIAL HIGHLIGHTS
YEAR ENDED DECEMBER 31, ------------------------------ 1997 1996 1995(1) - ------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $ 16.37 $ 12.51 $ 10.00 - ------------------------------------------------------------------- Income from investment operations: Net investment income .19 .14 .01 Net realized and unrealized gain 4.91 3.91 2.52 - ------------------------------------------------------------------- Total income from investment operations 5.10 4.05 2.53 - ------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.17) (.14) (.02) Distributions from net realized gain (.72) (.05) -- - ------------------------------------------------------------------- Total dividends and distributions to shareholders (.89) (.19) (.02) - ------------------------------------------------------------------- Net asset value, end of period $ 20.58 $ 16.37 $ 12.51 -------- -------- -------- -------- -------- -------- - ------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(2) 32.48% 32.51% 25.25% - ------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $155,368 $ 47,009 $ 4,288 - ------------------------------------------------------------------- Average net assets (in thousands) $ 94,906 $ 21,562 $ 1,809 - ------------------------------------------------------------------- Ratios to average net assets: Net investment income 1.15% 1.41% 0.50%(3) Expenses 0.83% 1.00% 2.07%(3) - ------------------------------------------------------------------- Portfolio turnover rate(4) 78.5% 112.6% 23.7% Average brokerage commission rate(5) $ 0.0602 $ 0.0618 $ 0.0598
1. For the period from July 5, 1995 (commencement of operations) to December 31, 1995. 2. Assumes a hypothetical initial 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 of less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1997 were $155,403,150 and $71,649,903, respectively. 5. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the total number of related shares purchased and sold. See accompanying Notes to Financial Statements. OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Money Fund (OMF), Oppenheimer High Income Fund (OHIF), Oppenheimer Bond Fund (OBF), Oppenheimer Capital Appreciation Fund (OCAP), Oppenheimer Growth Fund (OGF), Oppenheimer Multiple Strategies Fund (OMSF), Oppenheimer Global Securities Fund (OGSF), Oppenheimer Strategic Bond Fund (OSBF) and Oppenheimer Growth & Income Fund (OGIF) (collectively, the Funds) are separate series of Oppenheimer Variable Account Funds (the Trust), a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended. The Trust's investment advisor is OppenheimerFunds, Inc. (the Manager). The following is a summary of significant accounting policies consistently followed by the Funds. The Funds' objectives are as follows: OPPENHEIMER MONEY FUND seeks the maximum current income from investments in "money market" securities consistent with low capital risk and the maintenance of liquidity. OPPENHEIMER HIGH INCOME FUND seeks a high level of current income from investment in high yield fixed-income securities. OPPENHEIMER BOND FUND seeks a high level of current income from investments in high yield fixed-income securities rated "Baa" or better by Moody's or "BBB" or better by Standard & Poor's. OPPENHEIMER CAPITAL APPRECIATION FUND seeks to achieve capital appreciation by investing in "growth-type" companies. OPPENHEIMER GROWTH FUND seeks to achieve capital appreciation by investing in securities of well-known established companies. OPPENHEIMER MULTIPLE STRATEGIES FUND seeks a total investment return which includes current income as well as capital appreciation in the value of its shares from investments in common stocks and other equity securities, bonds and other debt securities, and "money market" securities. OPPENHEIMER GLOBAL SECURITIES FUND seeks long-term capital appreciation by investing a substantial portion of assets in securities of foreign issuers, "growth-type" companies, cyclical industries and special institutions which are considered to have appreciation possibilities. OPPENHEIMER STRATEGIC BOND FUND seeks a high level of current income principally derived from interest on debt securities and to enhance such income by writing covered call options on debt securities. OPPENHEIMER GROWTH & INCOME FUND seeks a high total return, which includes growth in the value of its shares, as well as current income from equity and debt securities. - -------------------------------------------------------------------------------- INVESTMENT VALUATION. Portfolio securities of OMF are valued on the basis of amortized cost, which approximates market value. Portfolio securities of OHIF, OBF, OCAP, OGF, OMSF, OGSF, OSBF and OGIF are valued at the close of the New York Stock Exchange on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or the last sale price on the prior trading day. Long-term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of Trustees. Such securities which cannot be valued by an approved portfolio pricing service are valued using dealer-supplied valuations provided the Manager is satisfied that the firm rendering the quotes is reliable and that the quotes reflect current market value, or are valued under consistently applied procedures established by the Board of Trustees to determine fair value in good faith. Short-term "money market type" debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. Forward foreign currency exchange contracts are valued based on the closing prices of the forward currency contract rates in the London foreign exchange markets on a daily basis as provided by a reliable bank or dealer. Options are valued based upon the last sale price on the principal exchange on which the option is traded or, in the absence of any transactions that day, the value is based upon the last sale on the prior trading date if it is OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) within the spread between the closing bid and asked prices. If the last sale price is outside the spread, the closing bid is used. - -------------------------------------------------------------------------------- STRUCTURED NOTES. OHIF and OSBF invest in commodity, foreign currency and index-linked structured notes whereby the market value and redemption price are linked to commodity indices, foreign currency exchange rates and bond indices. The structured notes may be leveraged, which increases the notes' volatility relative to the face of the security. Fluctuations in values of the securities are recorded as unrealized gains and losses in the accompanying financial statements. During the year ended December 31, 1997, the market value of these securities comprised an average of 5% for OHIF and OSBF, and resulted in realized and unrealized losses of $646,867 for OHIF and $872,513 for OSBF. - -------------------------------------------------------------------------------- SECURITIES PURCHASED ON A WHEN-ISSUED BASIS. Delivery and payment for securities that have been purchased by OHIF, OBF, OMSF, OSBF and OGIF on a forward commitment or when-issued basis can take place a month or more after the transaction date. During the period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Funds maintain, in segregated accounts with the custodian, assets with a market value equal to the amount of their purchase commitments. The purchase of securities on a when-issued or forward commitment basis may increase the volatility of the Funds' net asset values to the extent the Funds make such purchases while remaining substantially fully invested. As of December 31, 1997, OHIF, OBF, OMSF and OSBF had entered into outstanding when-issued or forward commitments as shown below:
OUTSTANDING WHEN-ISSUED OR FORWARD COMMITMENTS - ------------------------------------------------------------------------------------------------------ Oppenheimer High Income Fund $ 1,480,181 Oppenheimer Bond Fund 122,707,112 Oppenheimer Multiple Strategies Fund 12,187,250 Oppenheimer Strategic Bond Fund 30,736,603
In connection with their ability to purchase securities on a when-issued or forward commitment basis, OHIF, OBF and OSBF may enter into mortgage "dollar-rolls" in which the Funds sell securities for delivery in the current month and simultaneously contract with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The Funds record each dollar-roll as a sale and a new purchase transaction. - -------------------------------------------------------------------------------- SECURITY CREDIT RISK. OHIF, OMSF and OSBF invest in high yield securities, which may be subject to a greater degree of credit risk, greater market fluctuations and risk of loss of income and principal, and may be more sensitive to economic conditions than lower yielding, higher rated fixed income securities. The Funds may acquire securities in default, and are not obligated to dispose of securities whose issuers subsequently default. At December 31, 1997, securities with an aggregate market value of $227,391, representing 0.11% of OSBF's net assets, were in default. - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The accounting records of the Funds are maintained in U.S. dollars. Prices of securities purchased by OHIF, OBF, OCAP, OGF, OMSF, OGSF, OSBF and OGIF that are denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. For OHIF, OBF, OCAP, OGF, OMSF, OGSF, OSBF and OGIF, 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 Funds' Statements of Operations. - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS. The Funds require the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Funds may be delayed or limited. OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) FEDERAL TAXES. The Trust intends for each Fund to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income or excise tax provision is required. - -------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders of OHIF, OBF, OCAP, OGF, OMSF, OGSF, OSBF and OGIF are recorded on the ex-dividend date. OMF intends to declare dividends from net investment income each day the New York Stock Exchange is open for business and pay such dividends monthly. To effect its policy of maintaining a net asset value of $1.00 per share, OMF may withhold dividends or make distributions of net realized gains. - -------------------------------------------------------------------------------- CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of premium amortization, paydown gains and losses and the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of the distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Funds. The Funds adjusted the classification of distributions to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations. Changes in classification during the year ended December 31, 1997 are shown below:
ADJUSTMENTS FOR THE YEAR ENDED DECEMBER 31, 1997 ---------------------------------------------------- INCREASE INCREASE (DECREASE) (DECREASE) IN ACCUMULATED INCREASE IN UNDISTRIBUTED NET REALIZED (DECREASE) NET GAIN IN PAID-IN INVESTMENT INCOME ON INVESTMENTS CAPITAL - ------------------------------------------------------------------------------------------------------ Oppenheimer High Income Fund $ (451,938) $ 970,781 $(518,843) Oppenheimer Bond Fund (2,327,492) 1,641,033 686,459 Oppenheimer Capital Appreciation Fund (44,906) 44,906 -- Oppenheimer Growth Fund (61,766) 120,736 (58,970) Oppenheimer Multiple Strategies Fund (232,410) 232,410 -- Oppenheimer Global Securities Fund 6,462,546 (6,457,702) (4,844) Oppenheimer Strategic Bond Fund (367,471) 367,376 95 Oppenheimer Growth & Income Fund (1,033) 1,033 --
- -------------------------------------------------------------------------------- OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Discount on securities purchased by OHIF, OBF, OMSF, OGSF, OSBF and OGIF is amortized over the life of the respective securities, in accordance with federal income tax requirements. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. Dividends-in-kind are recognized as income on the ex-dividend date, at the current market value of the underlying security. Interest on payment-in-kind debt instruments is accrued as income at the coupon rate, and a market adjustment is made periodically. The preparation of financial statements in conformity with 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. OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Funds have authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
YEAR ENDED YEAR ENDED DECEMBER 31, 1997 DECEMBER 31, 1996 ------------------------------ ------------------------------ OPPENHEIMER MONEY FUND SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------------------ Sold 390,437,217 $ 390,437,217 304,073,729 $ 304,073,729 Dividends and distributions reinvested 6,901,000 6,901,000 4,923,661 4,923,661 Issued in connection with the acquisition of Panorama Series Fund, Inc. - -- -- -- -- Money Market Portfolio - Note 9 -- -- 63,968,818 63,968,791 Redeemed (400,273,601) (400,273,601) (308,637,087) (308,637,087) ------------- -------------- ------------- -------------- Net increase (decrease) (2,935,384) $ (2,935,384) 64,329,121 $ 64,329,094 ------------- -------------- ------------- -------------- ------------- -------------- ------------- --------------
OPPENHEIMER HIGH INCOME FUND - ------------------------------------------------------------------------------------------------------ Sold 14,372,458 $ 163,481,515 9,857,582 $ 107,788,590 Dividends and distributions reinvested 1,658,451 18,684,961 1,412,713 15,283,448 Redeemed (7,919,351) (89,671,819) (6,635,862) (72,550,951) ------------- -------------- ------------- -------------- Net increase 8,111,558 $ 92,494,657 4,634,433 $ 50,521,087 ------------- -------------- ------------- -------------- ------------- -------------- ------------- --------------
OPPENHEIMER BOND FUND - ------------------------------------------------------------------------------------------------------ Sold 12,079,029 $ 142,326,116 10,037,878 $ 116,328,846 Dividends and distributions reinvested 2,509,897 29,264,275 1,774,316 20,314,347 Issued in connection with the acquisition of: Panorama Series Fund, Inc. - -- -- -- -- Income Portfolio - Note 9 -- -- 9,249,653 107,187,159 Panorama Series Fund, Inc. - -- -- -- -- Government Securities Portfolio - Note 9 -- -- 4,237 48,557 JP Investment Grade Bond Fund, Inc. - Note 9 -- -- 2,594,896 30,151,368 Redeemed (7,613,095) (89,294,128) (4,827,959) (55,937,445) ------------- -------------- ------------- -------------- Net increase 6,975,831 $ 82,296,263 18,833,021 $ 218,092,832 ------------- -------------- ------------- -------------- ------------- -------------- ------------- --------------
OPPENHEIMER CAPITAL APPRECIATION FUND - ------------------------------------------------------------------------------------------------------ Sold 9,511,150 $ 368,762,665 12,247,492 $ 455,862,164 Dividends and distributions reinvested 952,236 32,014,171 643,582 22,422,394 Redeemed (4,981,695) (193,507,968) (6,453,749) (237,187,104) ------------- -------------- ------------- -------------- Net increase 5,481,691 $ 207,268,868 6,437,325 $ 241,097,454 ------------- -------------- ------------- -------------- ------------- -------------- ------------- --------------
OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST (CONTINUED)
YEAR ENDED YEAR ENDED DECEMBER 31, 1997 DECEMBER 31, 1996 ------------------------------ ------------------------------ OPPENHEIMER GROWTH FUND SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------------------ Sold 10,437,357 $ 313,824,006 5,738,355 $ 144,756,556 Dividends and distributions reinvested 720,274 18,842,365 430,280 10,016,909 Issued in connection with the acquisition of JP Capital Appreciation Fund, Inc. - Note 9 -- -- 3,293,050 90,009,399 Redeemed (6,429,313) (191,417,975) (3,964,366) (99,657,552) ------------- -------------- ------------- -------------- Net increase 4,728,318 $ 141,248,396 5,497,319 $ 145,125,312 ------------- -------------- ------------- -------------- ------------- -------------- ------------- --------------
OPPENHEIMER MULTIPLE STRATEGIES FUND - ------------------------------------------------------------------------------------------------------ Sold 6,728,904 $ 110,124,465 5,556,735 $ 83,206,142 Dividends and distributions reinvested 2,517,354 39,597,113 2,062,453 30,564,114 Redeemed (2,765,980) (45,296,683) (2,838,629) (42,497,621) ------------- -------------- ------------- -------------- Net increase 6,480,278 $ 104,424,895 4,780,559 $ 71,272,635 ------------- -------------- ------------- -------------- ------------- -------------- ------------- --------------
OPPENHEIMER GLOBAL SECURITIES FUND - ------------------------------------------------------------------------------------------------------ Sold 17,881,768 $ 354,780,849 14,595,634 $ 237,535,239 Dividends and distributions reinvested 446,370 8,181,958 -- -- Redeemed (6,390,329) (127,270,051) (5,717,318) (92,429,081) ------------- -------------- ------------- -------------- Net increase 11,937,809 $ 235,692,756 8,878,316 $ 145,106,158 ------------- -------------- ------------- -------------- ------------- -------------- ------------- --------------
OPPENHEIMER STRATEGIC BOND FUND - ------------------------------------------------------------------------------------------------------ Sold 18,907,314 $ 96,727,423 12,624,581 $ 63,274,177 Dividends and distributions reinvested 2,528,920 12,861,470 1,387,256 6,891,899 Redeemed (4,147,991) (21,213,934) (2,946,444) (14,660,178) ------------- -------------- ------------- -------------- Net increase 17,288,243 $ 88,374,959 11,065,393 $ 55,505,898 ------------- -------------- ------------- -------------- ------------- -------------- ------------- --------------
OPPENHEIMER GROWTH & INCOME FUND - ------------------------------------------------------------------------------------------------------ Sold 5,209,743 $ 95,997,603 2,942,183 $ 43,552,642 Dividends and distributions reinvested 216,162 3,646,792 21,023 322,909 Redeemed (745,544) (13,620,674) (435,180) (6,491,090) ------------- -------------- ------------- -------------- Net increase 4,680,361 $ 86,023,722 2,528,026 $ 37,384,461 ------------- -------------- ------------- -------------- ------------- -------------- ------------- --------------
OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS At December 31, 1997, net unrealized appreciation or depreciation on investments and options written consisted of the following:
OPPENHEIMER OPPENHEIMER CAPITAL HIGH INCOME OPPENHEIMER APPRECIATION OPPENHEIMER FUND BOND FUND FUND GROWTH FUND - ------------------------------------------------------------------------------------------------------ Gross appreciation $ 12,810,405 $ 15,832,646 $ 183,508,779 $ 106,896,721 Gross depreciation 2,338,571 4,763,579 16,768,494 15,647,219 -------------- -------------- -------------- -------------- Net unrealized appreciation $ 10,471,834 $ 11,069,067 $ 166,740,285 $ 91,249,502 -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
OPPENHEIMER OPPENHEIMER MULTIPLE GLOBAL OPPENHEIMER OPPENHEIMER STRATEGIES SECURITIES STRATEGIC BOND GROWTH & FUND FUND FUND INCOME FUND - ------------------------------------------------------------------------------------------------------ Gross appreciation $ 112,337,379 $ 144,961,412 $ 5,930,571 $ 22,519,758 Gross depreciation 14,900,777 29,993,377 4,181,155 4,267,458 -------------- -------------- -------------- -------------- Net unrealized appreciation $ 97,436,602 $ 114,968,035 $ 1,749,416 $ 18,252,300 -------------- -------------- -------------- -------------- -------------- -------------- -------------- --------------
- -------------------------------------------------------------------------------- 4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management fees paid to the Manager were in accordance with the investment advisory agreements with the Trust. For OHIF, OBF, OCAP, OGF, OMSF, OGSF, OSBF and OGIF, the annual fees are 0.75% of the first $200 million of average annual net assets, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million and 0.60% of average annual net assets over $800 million. In addition, management fees for OHIF, OBF and OSBF are 0.50% of average annual net assets in excess of $1 billion. Management fees for OMF are 0.45% of the first $500 million of average annual net assets, 0.425% of the next $500 million, 0.40% of the next $500 million and 0.375% of average annual net assets in excess of $1.5 billion. For OSBF, the Manager has agreed to limit the management fee charged so that the ordinary operating expenses of the Fund will not exceed 1.0% of its average net assets in any fiscal year. - -------------------------------------------------------------------------------- 5. FORWARD CONTRACTS A forward foreign currency exchange contract (forward contract) is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Funds (except OMF) use forward contracts to seek to manage foreign currency risks. They may also be used to tactically shift portfolio currency risk. The Funds generally enter into forward contracts as a hedge upon the purchase or sale of a security denominated in a foreign currency. In addition, the Funds may enter into such contracts as a hedge against changes in foreign currency exchange rates on portfolio positions. Forward contracts are valued based on the closing prices of the forward currency contract rates in the London foreign exchange markets on a daily basis as provided by a reliable bank or dealer. The Funds will realize a gain or loss upon the closing or settlement of the forward transaction. Securities held in segregated accounts to cover net exposure on outstanding forward contracts are noted in the Statements of Investments where applicable. Unrealized appreciation or depreciation on forward contracts is reported in the Statements of Assets and Liabilities. Realized gains and losses are reported with all other foreign currency gains and losses in the Funds' Statements of Operations. Risks include the potential inability of the counterparty to meet the terms of the contract and unanticipated movements in the value of a foreign currency relative to the U.S. dollar. OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 5. FORWARD CONTRACTS (CONTINUED) At December 31, 1997, outstanding forward contracts were as follows:
VALUATION AS EXPIRATION CONTRACT OF DECEMBER UNREALIZED UNREALIZED OPPENHEIMER HIGH INCOME FUND DATES AMOUNT (000'S) 31, 1997 APPRECIATION DEPRECIATION - ------------------------------------------------------------------------------------------------------ CONTRACTS TO PURCHASE - ----------------------------- German Mark (DEM) 1/2/98 16,138 DEM $ 8,975,065 $ -- $ 53,947 ----------- ------------- CONTRACTS TO SELL - ----------------------------- Canadian Dollar (CAD) 1/21/98 2,375 CAD 1,661,542 -- 8,448 German Mark (DEM) 2/19/98 23,080 DEM 12,883,786 44,714 -- Indonesian Rupiah (IDR) 2/10/98 2,055,000 IDR 384,240 166,530 -- ----------- ------------- 211,244 8,448 ----------- ------------- Total Unrealized Appreciation and Depreciation $ 211,244 $ 62,395 ----------- ------------- ----------- -------------
OPPENHEIMER BOND FUND - ------------------------------------------------------------------------------------------------------ CONTRACTS TO SELL - ----------------------------- Canadian Dollar (CAD) 1/21/98 4,000 CAD $ 2,798,387 $ 82,235 $ 1,078 German Mark (DEM) 1/20/98 1,600 DEM 891,392 39,582 -- Greek Drachma (GRD) 1/15/98 168,876 GRD 593,250 6,750 -- Indonesian Rupiah (IDR) 2/10/98-4/6/98 911,340 IDR 169,866 60,641 1,725 Japanese Yen (JPY) 1/12/98 12,400 JPY 95,387 4,722 -- South African Rand (ZAR) 1/29/98 8,446 ZAR 1,712,542 41 -- ----------- ------------- Total Unrealized Appreciation and Depreciation $ 193,971 $ 2,803 ----------- ------------- ----------- -------------
OPPENHEIMER GLOBAL SECURITIES FUND - ------------------------------------------------------------------------------------------------------ CONTRACTS TO PURCHASE - ----------------------------- French Franc (FRF) 3/24/98 228,832 FRF $38,246,095 $ 311,565 $ -- Japanese Yen (JPY) 5/26/98 4,919,200 JPY 38,514,965 1,485,035 -- Swiss Franc (CHF) 7/6/98 57,156 CHF 39,996,909 3,090 -- ----------- ------------- Total Unrealized Appreciation $1,799,690 $ -- ----------- ------------- ----------- -------------
OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 5. FORWARD CONTRACTS (CONTINUED)
VALUATION AS OPPENHEIMER STRATEGIC BOND EXPIRATION CONTRACT OF DECEMBER UNREALIZED UNREALIZED FUND DATES AMOUNT (000'S) 31, 1997 APPRECIATION DEPRECIATION - ------------------------------------------------------------------------------------------------------ CONTRACTS TO PURCHASE - ----------------------------- Canadian Dollar (CAD) 1/20/98 3,594 CAD $ 2,514,335 $ -- $ 32,003 German Mark (DEM) 1/2/98 215 DEM 119,668 -- 719 ----------- ------------- -- 32,722 ----------- ------------- CONTRACTS TO SELL - ----------------------------- Australian Dollar (AUD) 1/14/98-1/30/98 6,724 AUD 4,383,521 290,647 -- Canadian Dollar (CAD) 1/21/98 515 CAD 360,292 15,192 -- German Mark (DEM) 2/19/98 605 DEM 337,725 4,562 -- Greek Drachma (GRD) 1/15/98 27,584 GRD 96,901 1,102 -- Indonesian Rupiah (IDR) 2/10/98-3/24/98 1,333,500 IDR 248,972 96,149 302 Irish Punt (IEP) 1/20/98-1/30/98 558 IEP 793,708 36,517 -- Japanese Yen (JPY) 3/23/98 163,000 JPY 1,263,813 27,327 -- Malaysian Ringgit (MYR) 2/3/98 1,558 MYR 401,436 38,564 -- Mexican Peso (MXP) 3/31/98 838 MXP 103,489 -- 3,489 New Zealand Dollar (NZD) 1/28/98-2/11/98 2,885 NZD 1,669,373 85,553 -- South African Rand (ZAR) 1/26/98 2,600 ZAR 530,336 -- 327 ----------- ------------- 595,613 4,118 ----------- ------------- Total Unrealized Appreciation and Depreciation $ 595,613 $ 36,840 ----------- ------------- ----------- -------------
- -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS The Funds (except OMF) may buy and sell interest rate futures contracts in order to gain exposure to or protect against changes in interest rates. The Funds may also buy or write put or call options on these futures contracts. The Funds generally sell futures contracts to hedge against increases in interest rates and the resulting negative effect on the value of fixed rate portfolio securities. The Funds may also purchase futures contracts to gain exposure to changes in interest rates as it may be more efficient or cost effective than actually buying fixed income securities. Upon entering into a futures contract, the Funds are required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Funds each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Funds recognize a realized gain or loss when the contract is closed or expires. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statements of Investments. The Statements of Assets and Liabilities reflect a receivable or payable for the daily mark to market for variation margin. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS (CONTINUED) At December 31, 1997, outstanding futures contracts were as follows:
UNREALIZED EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION OPPENHEIMER BOND FUND DATE CONTRACTS DECEMBER 31, 1997 (DEPRECIATION) - ------------------------------------------------------------------------------------------------------ CONTRACTS TO PURCHASE - ------------------------------------------- U.S. Treasury Nts., 5 yr. 3/98 13 $ 1,412,125 $ 6,828 U.S. Treasury Nts., 10 yr. 3/98 12 1,345,875 9,375 U.S. Treasury Bonds, 30 yr. 3/98 285 34,333,594 278,125 ------------- 294,328 ------------- CONTRACTS TO SELL - ------------------------------------------- U.S. Treasury Nts., 2 yr. 3/98 22 4,570,500 (9,969) ------------- $ 284,359 ------------- ------------- OPPENHEIMER STRATEGIC BOND FUND - ------------------------------------------------------------------------------------------------------ CONTRACTS TO PURCHASE - ------------------------------------------- U.S. Treasury Nts., 5 yr. 3/98 50 $ 5,431,250 $ 25,781 U.S. Treasury Nts., 10 yr. 3/98 157 17,608,531 122,656 U.S. Treasury Bonds, 30 yr. 3/98 100 12,046,875 141,063 ------------- 289,500 ------------- CONTRACTS TO SELL - ------------------------------------------- German Government Bonds 3/98 4 579,463 (2,725) Gold 100 oz. 6/98 1 29,360 1,820 Standard & Poors 500 Index 3/98 14 3,426,850 14,900 ------------- 13,995 ------------- $ 303,495 ------------- -------------
OPPENHEIMER GLOBAL SECURITIES FUND - ------------------------------------------------------------------------------------------------------ CONTRACTS TO SELL - ------------------------------------------- Standard & Poors 500 Index Futures 3/98 82 $20,071,550 $(148,871)
- -------------------------------------------------------------------------------- 7. OPTION ACTIVITY The Funds (except OMF) may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Funds generally purchase put options or write covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Funds receive a premium and become obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Funds will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 7. OPTION ACTIVITY (CONTINUED) Securities designated to cover outstanding call options are noted in the Statements of Investments where applicable. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a footnote to the Statements of Investments. Options written are reported as a liability in the Statements of Assets and Liabilities. Gains and losses are reported in the Statements of Operations. The risk in writing a call option is that the Funds give up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Funds may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Funds pay a premium whether or not the option is exercised. The Funds also have the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. The Funds may also write over-the-counter options where the completion of the obligation is dependent upon the credit standing of the counterparty. Written option activity for the year ended December 31, 1997 was as follows:
CALL OPTIONS PUT OPTIONS ------------------------------ ---------------------------- NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF OPPENHEIMER HIGH INCOME FUND OPTIONS PREMIUMS OPTIONS PREMIUMS - ------------------------------------------------------------------------------------------------------ Options outstanding at December 31, 1996 2,460,530 $ 42,285 -- $ -- Options written 173,558,037 477,850 64,036,345 58,865 Options closed or expired (175,634,322) (464,709) (16,136,255) (33,534) Options exercised (384,245) (55,426) (47,900,090) (25,331) ------------- -------------- --------------- ---------- Options outstanding at December 31, 1997 -- $ -- -- $ -- ------------- -------------- --------------- ---------- ------------- -------------- --------------- ---------- OPPENHEIMER BOND FUND - ------------------------------------------------------------------------------------------------------ Options outstanding at December 31, 1996 6,199,750 $ 80,185 -- $ -- Options written 112,600,092 848,642 61,722,790 117,129 Options closed or expired (118,009,842) (921,295) (54,072,790) (75,278) Options exercised (790,000) (7,532) (7,650,000) (41,851) ------------- -------------- --------------- ---------- Options outstanding at December 31, 1997 -- $ -- -- $ -- ------------- -------------- --------------- ---------- ------------- -------------- --------------- ---------- OPPENHEIMER MULTIPLE STRATEGIES FUND - ------------------------------------------------------------------------------------------------------ Options outstanding at December 31, 1996 4,569 $ 1,235,136 -- $ -- Options written 13,114 3,551,560 -- -- Options closed or expired (7,680) (1,917,115) -- -- Options exercised (3,947) (1,071,732) -- -- ------------- -------------- --------------- ---------- Options outstanding at December 31, 1997 6,056 $ 1,797,849 -- $ -- ------------- -------------- --------------- ---------- ------------- -------------- --------------- ---------- OPPENHEIMER STRATEGIC BOND FUND - ------------------------------------------------------------------------------------------------------ Options outstanding at December 31, 1996 9,375,291 $ 111,246 375 $ 8,992 Options written 126,239,395 643,389 1,808,805,495 174,556 Options closed or expired (133,489,381) (239,934) (1,257,985,870) (135,791) Options exercised (2,124,905) (511,022) (326,000,000) (16,711) ------------- -------------- --------------- ---------- Options outstanding at December 31, 1997 400 $ 3,679 224,820,000 $ 31,046 ------------- -------------- --------------- ---------- ------------- -------------- --------------- ----------
OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 7. OPTION ACTIVITY (CONTINUED)
CALL OPTIONS PUT OPTIONS ------------------------------ ---------------------------- NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF OPPENHEIMER GROWTH & INCOME FUND OPTIONS PREMIUMS OPTIONS PREMIUMS - ------------------------------------------------------------------------------------------------------ Options outstanding at December 31, 1996 -- $ -- -- $ -- Options written 2,525 421,955 1,170 168,966 Options closed or expired (1,080) (207,516) (1,107) (151,583) Options exercised (565) (152,681) (63) (9,383) ------------- -------------- --------------- ---------- Options outstanding at December 31, 1997 880 $ 61,758 -- $ -- ------------- -------------- --------------- ---------- ------------- -------------- --------------- ----------
- -------------------------------------------------------------------------------- 8. ILLIQUID AND RESTRICTED SECURITIES At December 31, 1997, investments in securities included issues that are illiquid or restricted. Restricted securities are often purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may be considered illiquid if it lacks a readily-available market or if its valuation has not changed for a certain period of time. The Funds intend to invest no more than 10% of their net assets (determined at the time of purchase and reviewed periodically) in illiquid and restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limit. The aggregate value of illiquid and restricted securities subject to this 10% limitation at December 31, 1997 are shown below:
PERCENTAGE OF AMOUNT NET ASSETS - ------------------------------------------------------------------------------------------------------ Oppenheimer High Income Fund $21,897,438 7.52% Oppenheimer Bond Fund 49,719,055 9.56 Oppenheimer Multiple Strategies Fund 6,979,490 1.09 Oppenheimer Global Securities Fund 1,749,542 0.18 Oppenheimer Strategic Bond Fund 10,129,223 4.87 Oppenheimer Growth & Income Fund 3,147,500 2.03
OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 8. ILLIQUID AND RESTRICTED SECURITIES (CONTINUED) Information concerning restricted securities is as follows: OPPENHEIMER HIGH INCOME FUND The aggregate value of restricted securities is $3,045,689.
VALUATION ACQUISITION COST PER PER UNIT AS OF SECURITY DATE UNIT DECEMBER 31, 1997 - ------------------------------------------------------------------------------------------------------ BONDS - ------------------------------------------------------ ECM Fund, L.P. I., 14% Sub. Nts., 6/10/02 4/14/92 100.00% 100.25% STOCKS AND WARRANTS - ------------------------------------------------------ ECM Fund, L.P. I. 4/14/92 $1,000.00 $1,102.50 CGA Group Ltd., Preferred 6/17/97 25.00 25.00 CGA Group Ltd. Wts., Exp. 12/49 6/17/97 .00 .50 Omnipoint Corp. 1/26/96 16.00 22.21 Omnipoint Corp. Wts., Exp. 11/00 11/29/95 .00 22.21
OPPENHEIMER BOND FUND The aggregate value of restricted securities is $1,172,800.
VALUATION ACQUISITION COST PER PER UNIT AS OF SECURITY DATE UNIT DECEMBER 31, 1997 - ------------------------------------------------------------------------------------------------------ BONDS - ------------------------------------------------------ Merrill Lynch & Co., Inc., Units, 9.75%, 6/15/99 5/15/95 110.05% 117.28%
OPPENHEIMER STRATEGIC BOND FUND The aggregate value of restricted securities is $408,000.
VALUATION ACQUISITION COST PER PER UNIT AS OF SECURITY DATE UNIT DECEMBER 31, 1997 - ------------------------------------------------------------------------------------------------------ STOCKS AND WARRANTS - ------------------------------------------------------ CGA Group Ltd. Preferred 6/17/97 $ 25.00 $ 25.00 CGA Group Ltd. Wts., Exp. 12/49 6/17/97 .00 .50
- -------------------------------------------------------------------------------- 9. ACQUISITIONS On June 3, 1996, OMF acquired a portion of the net assets of Panorama Series Fund, Inc. - Money Market Portfolio. The Fund issued 49,302,270 shares of beneficial interest, valued at $49,302,270, in exchange for the net assets, resulting in combined net assets of $113,051,628 on June 3, 1996. On December 2, 1996, OMF acquired the remaining net assets of Panorama Series Fund, Inc. - Money Market Portfolio. The Fund issued 14,666,548 shares of beneficial interest, valued at $14,666,521, in exchange for the net assets, resulting in combined net assets of $124,845,270 on December 2, 1996. On May 1, June 3 and December 2, 1996, OBF acquired all the net assets of Panorama Series Fund, Inc. - Income Portfolio. The Fund issued 12,999, 6,743,062 and 2,493,592 shares of beneficial interest, respectively, valued at $148,965, $77,208,064 and $29,830,130, respectively, in exchange for the net assets, resulting in combined net assets of $227,552,225, $308,666,225 and $396,656,585. OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) - -------------------------------------------------------------------------------- 9. ACQUISITIONS (CONTINUED) On May 1, 1996, OBF acquired a portion of the net assets of Panorama Series Fund, Inc. - Government Securities Portfolio. The Fund issued 4,237 shares of beneficial interest valued at $48,557, in exchange for the net assets, resulting in combined net assets of $227,552,225 on May 1, 1996. On December 20, 1996, OBF acquired all the net assets of JP Investment Grade Bond Fund, Inc., pursuant to an agreement and plan of reorganization approved by the JP Investment Grade Bond Fund, Inc. shareholders on December 3, 1996. The Fund issued 2,594,896 shares of beneficial interest valued at $30,151,368, in exchange for the net assets, resulting in combined net assets of $426,447,902 on December 20, 1996. The net assets acquired included net unrealized appreciation of $1,017,069. The exchange qualified as a tax-free reorganization for federal income tax purposes. On December 20, 1996, OGF acquired all the net assets of JP Capital Appreciation Fund, Inc., pursuant to an agreement and plan of reorganization approved by the JP Capital Appreciation Fund, Inc. shareholders on December 3, 1996. The Fund issued 3,293,050 shares of beneficial interest, valued at $90,009,399, in exchange for the net assets, resulting in combined net assets of $289,484,969 on December 20, 1996. The net assets acquired included net unrealized appreciation of $19,087,888. The exchange qualified as a tax-free reorganization for federal income tax purposes. - -------------------------------------------------------------------------------- 10. INTEREST RATE SWAP TRANSACTIONS OSBF entered into an interest rate swap transaction to seek to maintain a total return or yield spread on a particular investment or portion of its portfolio, or for other non-speculative purposes. Interest rate swaps involve the exchange of commitments to pay or receive interest, e.g., an exchange of floating rate payments for fixed rate payments. The coupon payments are based on an agreed upon principal amount and a specified index. Because the principal amount is not exchanged, it represents neither an asset nor a liability to either counterparty, and is referred to as a notional principal amount. The Fund records an increase or decrease to interest income, the amount due or owed by the Fund at termination or settlement. The Fund enters into swaps only on securities it owns. Interest rate swaps are subject to credit risks (if the other party fails to meet its obligations) and also to interest rate risks. The Fund could be obligated to pay more under its swap agreements than it receives under them, as a result of interest rate changes. The Fund segregates liquid assets to cover any amounts it could owe under swaps that exceed the amounts it is entitled to receive. As of December 31, 1997, OSBF had entered into the following interest rate swap agreement:
FLOATING RATE PAID RATE BY THE RECEIVED FUND BY THE NET NOTIONAL AT FUND AT TERMINATION UNREALIZED SWAP COUNTERPARTY PRINCIPAL 12/31/97 12/31/97 FLOATING RATE INDEX DATE LOSS - ------------------------------------------------------------------------------------------------------ Morgan Guaranty Trust Co. 1,110,000 7.50% 7.31% New Zealand Bank Bill 12/8/00 $13,161
OPPENHEIMER VARIABLE ACCOUNT FUNDS INDEPENDENT AUDITORS' REPORT - -------------------------------------------------------------------------------- The Board of Trustees and Shareholders of Oppenheimer Variable Account Funds: We have audited the accompanying statements of assets and liabilities, including the statements of investments, of Oppenheimer Money Fund, Oppenheimer High Income Fund, Oppenheimer Bond Fund, Oppenheimer Capital Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple Strategies Fund, Oppenheimer Global Securities Fund, Oppenheimer Strategic Bond Fund and Oppenheimer Growth & Income Fund (all of which are series of Oppenheimer Variable Account Funds) as of December 31, 1997, the related statements of operations for the year then ended, the statements of changes in net assets for the years ended December 31, 1997 and 1996, and the financial highlights for the applicable periods ended December 31, 1997, 1996, 1995, 1994 and 1993. These financial statements and financial highlights are the responsibility of the Funds' 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 generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at December 31, 1997 by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of Oppenheimer Money Fund, Oppenheimer High Income Fund, Oppenheimer Bond Fund, Oppenheimer Capital Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple Strategies Fund, Oppenheimer Global Securities Fund, Oppenheimer Strategic Bond Fund and Oppenheimer Growth & Income Fund at December 31, 1997, the results of their operations, the changes in their net assets, and the financial highlights for the respective stated periods, in conformity with generally accepted accounting principles. DELOITTE & TOUCHE LLP Denver, Colorado January 23, 1998 Oppenheimer Variable Account Funds Federal Income Tax Information (Unaudited) - -------------------------------------------------------------------------------- In early 1998, shareholders will receive information regarding all dividends and distributions paid to them by the Funds during calendar year 1997. Regulations of the U.S. Treasury Department require the Funds to report this information to the Internal Revenue Service. Certain distributions paid on March 24, 1997, were designated as a capital gain distribution in the "28% Rate Group" for federal income tax purposes as shown in the table below. Whether received in stock or cash, the capital gain distribution should be treated by shareholders as a gain from the sale of capital assets. Dividends paid by the Funds during the fiscal year ended December 31, 1997 which are not designated as capital gain distributions should be multiplied by the percentages listed below to arrive at the net amount eligible for the corporate dividend-received deduction.
Long-Term Capital Corporate Dividend- Gain Distribution Received Deduction - ------------------------------------------------------------------------------------------------------ Oppenheimer Money Fund N/A N/A Oppenheimer High Income Fund $ 0.008 3.98% Oppenheimer Bond Fund N/A 0.77% Oppenheimer Capital Appreciation Fund $ 1.250 25.10% Oppenheimer Growth Fund $ 1.063 10.53% Oppenheimer Multiple Strategies Fund $ 0.443 12.26% Oppenheimer Global Securities Fund N/A 6.73% Oppenheimer Strategic Bond Fund $ 0.008 1.67% Oppenheimer Growth & Income Fund $ 0.008 9.04%
The foregoing information is presented to assist shareholders in reporting distributions received from the Funds 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 the state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. Oppenheimer Variable Account Funds - ------------------------------------------------------------------------------------------------------ Officers and Trustees James C. Swain, Chairman and Chief Executive Officer Bridget A. Macaskill, President and Trustee Robert G. Avis, Trustee William A. Baker, Trustee Charles Conrad, Jr., Trustee Jon S. Fossel, Trustee Sam Freedman, Trustee Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee Ned M. Steel, Trustee George C. Bowen, Vice President, Treasurer and Assistant Secretary Andrew J. Donohue, Vice President and Secretary Paul LaRocco, Vice President Robert J. Milnamow, Vice President David P. Negri, Vice President Jane Putnam, Vice President Richard H. Rubinstein, Vice President Arthur P. Steinmetz, Vice President Dorothy G. Warmack, Vice President William Wilby, Vice President Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer Robert G. Zack, Assistant Secretary - ------------------------------------------------------------------------------------------------------ Investment Advisor OppenheimerFunds, Inc. - ------------------------------------------------------------------------------------------------------ Transfer Agent OppenheimerFunds Services - ------------------------------------------------------------------------------------------------------ Custodian of Portfolio The Bank of New York Securities - ------------------------------------------------------------------------------------------------------ Independent Auditors Deloitte & Touche LLP - ------------------------------------------------------------------------------------------------------ Legal Counsel Myer, Swanson, Adams & Wolf, P.C. This is a copy of a report to shareholders of Oppenheimer Variable Account Funds. This report must be preceded or accompanied by a Prospectus of Oppenheimer Variable Account Funds. For material information concerning the Funds, see the Prospectus. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested.
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