-----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, FK9WLX7DT944JKjVfYxIGBlajc9YJgngHClBm/PEoc4OMSctLsIJ2Ys+miDzHIyE fZETVVUyPN9QZqosZpsmVg== 0001047469-98-032753.txt : 19980827 0001047469-98-032753.hdr.sgml : 19980827 ACCESSION NUMBER: 0001047469-98-032753 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980826 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: 98697993 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 SEMIANNUAL REPORT JUNE 30, 1998 [LOGO] OPPENHEIMER FUNDS-Registered Trademark- THE RIGHT WAY TO INVEST OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND 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 ART ZIMMER, PORTFOLIO MANAGER In a period of excitement and volatility for stock markets here and abroad, money market funds(1), such as Oppenheimer Money Fund, generally continued to provide stable returns. Yields moved in a very narrow range, as the Federal Reserve Board, which raises and lowers short-term interest rates based on its view of inflation, stayed on the sidelines for the entire six-month period. Two opposing forces have kept the Fed from raising or lowering rates. On one hand, the U.S. economy continues to grow at a strong pace, with the unemployment rate at just 4.3% and consumer confidence soaring. On the other hand, the Asian financial crisis shows no signs of easing, which has weakened global demand for goods and services. Since the United States is a major exporter to Asia, slackening demand and devalued currencies in the Far East have created a dampening effect on inflation. Remarkably, seven years into an economic expansion, U.S. inflation is still below 2%. For the six-month period ended June 30, 1998, Oppenheimer Money Fund produced a compounded annualized yield of 5.33%. Without compounding, the corresponding yield was 5.20%. The seven-day annualized yields, with and without compounding on June 30, 1998 were 5.30% and 5.17%, respectively.(2) It is 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. The supply of money market securities varied considerably during the year. For example, in January 1998, corporations issued a great deal of commercial paper to take advantage of very low interest rates. By June, the excess supply was absorbed by strong demand, which boosted prices and brought yields down. To be sure, there are still opportunities to add yield to the portfolio without taking material credit risk. For example, we recently purchased a security issued by a major insurance company that was offering a slightly higher yield than the market for commercial paper. In addition, the security carried a "put" option. In the event that interest rates rise, the put option gives us the right to sell the security back to the issuer at the price we originally paid for. The put option is important, because without it, rising interest rates would decrease the security's relative return. During the rest of 1998 and beyond, we plan to continue monitoring global events so that we can position the portfolio accordingly. If the Asian crisis diminishes and the U.S. economy continues growing, then we would expect the Federal Reserve Board to raise short-term interest rates to ward off inflation. In that event, we would keep the portfolio's maturity fairly short to allow us to reinvest at higher yields. On the other hand, if the U.S. economy should begin to slow and it looks like the Fed would lower short-term interest rates, then we would lengthen the portfolio's maturity to lock in higher yields. In either case, we will continue to invest conservatively, always keeping in mind your objectives of safety and liquidity. Thank you for your confidence in Oppenheimer Variable Account Funds - Oppenheimer Money Fund. We look forward to helping you reach your investment goals, part of our commitment to you as THE RIGHT WAY TO INVEST. - ---------------------------- 1. An investment in money market funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although these funds may seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these funds. 2. Compounded yields assume reinvestment of dividends. Past performance is not indicative of future results. 1 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND OPPENHEIMER HIGH INCOME FUND, a series of Oppenheimer Variable Account Funds, seeks a high level of current income from investing in high-yield, high-risk fixed-income securities, including unrated securities or securities in the lower rating categories. These securities may be considered to be speculative. NARRATIVE BY TOM REEDY, PORTFOLIO MANAGER Oppenheimer High Income Fund provided a cumulative total return of 4.76%, as of June 30, 1998.(1) In part, the Fund's performance was driven by positive domestic economic conditions. Although basic economic growth in the United States was stronger than most forecasters expected, inflation remained at historically low levels. Even record-high employment failed to rekindle inflationary pressures. In our view, this is primarily because of enormous productivity improvements within the corporate sector, the result of technological advances, as well as price competition from foreign exporters. These economic influences helped high-yield corporate bonds rank as the top-performing sector of the bond market over the last six months. High-yield bonds were in great demand by investors who sought to maximize yields in a low interest-rate environment. In addition, the Fund's performance over the past six months was the result of our asset allocation strategy. Our analyses of the U.S. and global economies helped us identify those industries and market sectors that we believed would perform best in the prevailing environment. During the first half of 1998, we continued to find especially attractive conditions in the telecommunications industry. That's because many large telecommunications companies have acquired smaller ones in order to enter new markets or to become more dominant in existing markets. On the other hand, we tended to avoid industries that we believed had weak prospects. For example, the Fund limited its investment in bonds issued by industrial commodities producers, such as steel, paper and chemical companies.(2) These companies' earnings were hurt by falling demand from Asia. In addition, a low-inflation environment prevented commodities producers from raising prices in other markets. Therefore, the credit quality of these industrial companies tended to erode, and their bond prices fell. The Fund also benefited from our decision late last year to purchase high-yield bonds issued by companies and governments in the emerging markets of Latin America. These bonds declined sharply last Fall in the aftermath of the Asian crisis, and we were able to buy them at very attractive prices. We held these bonds as the Latin American markets recovered in 1998, and we took profits before they declined again in May amid renewed concerns over Asia. Looking forward, we are cautiously optimistic regarding the second half of this year. Over the near term, we would not be surprised to see continued volatility in the financial markets until the Asian crisis and its effects on the U.S. economy become clearer. Over the longer term, however, we believe that a neutral U.S. monetary policy, low inflation and slowing economic growth could set the stage for long-term interest rates to decline further. If our forecast is correct, a lower interest-rate environment could produce healthy demand for the higher income levels offered by existing high-yield corporate bonds. Of course, we will continue to monitor the U.S. economy and high-yield bond market carefully. Whatever the next six months bring, we intend to remain vigilant in our efforts to have Oppenheimer Variable Account Funds - Oppenheimer High Income Fund deliver a high level of current income potential from a broadly diversified portfolio of high-yield securities. We believe this disciplined approach to investing remains an effective strategy to help you meet your financial goals. It's also part of what makes OppenheimerFunds - THE RIGHT WAY TO INVEST. - ---------------------------- 1. Includes changes in net asset value per share and does not include the charges associated with the separate account products which offer this fund. Such performance is not annualized and would have been lower if such charges were taken into account. 2. The Fund's portfolio is subject to change. 2 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND OBJECTIVE OPPENHEIMER BOND FUND, a series of Oppenheimer Variable Account Funds, primarily seeks a high level of current income. The Fund invests in fixed-income securities. Secondarily, the Fund seeks capital growth when this is consistent with its primary objective of high income. NARRATIVE BY DAVID NEGRI, CO-PORTFOLIO MANAGER Oppenheimer Bond Fund provided positive performance for the six-month period ended June 30, 1998, generating a cumulative total return of 3.94%.(1) The Fund's performance was driven primarily by positive domestic economic conditions. Although basic economic growth in the United States was stronger than most forecasters had expected, inflation remained near historically low levels. Even record-high employment failed to rekindle inflationary pressures. In our view, this is primarily because of enormous productivity improvements within the corporate sector, as well as price competition from imported goods. Early in the year, some investors feared that the high rate of economic growth might cause the Federal Reserve Board to raise short-term interest rates. However, this did not occur. That's because the aftereffects of the Asian financial crisis are likely to slow U.S. economic growth. Despite some volatility early in the year, long-term interest rates ended the six-month period modestly lower than where they began. Different sectors of the bond market responded differently to these economic influences. High-yield corporate bonds, which represented the top-performing sector of the bond market over the last six months, were in great demand by investors looking to maximize yields in a low interest-rate environment. Investment-grade corporate bonds and commercial mortgage-backed securities performed relatively well because of the strong economy and rising corporate earnings. Prices of U.S. government agency mortgage-backed securities declined, while U.S. Treasury securities provided returns slightly lower than investment-grade corporate securities. In this market environment, we made some modest changes to our allocations among the various bond market sectors in order to increase our holdings of higher yielding securities. For example, we took advantage of the Fund's recent prospectus change to add a small allocation of high-yield corporate bonds to the portfolio. We kept the Fund's exposure to investment-grade corporate bonds unchanged while increasing our holdings of commercial mortgage-backed securities. We also slightly decreased our holdings of mortgage-backed securities issued by U.S. government agencies. And finally, we established a small position in bank trust preferred stock, which provided attractive yields and high credit quality relative to many other fixed-income securities.(2) Looking forward, we are optimistic regarding the second half of this year. We believe that the Federal Reserve Board will not tighten U.S. monetary policy because of the increasing likelihood of an economic slowdown stemming from the recessions throughout Asia. In fact, we believe that the economic impact of the Asian crisis is finally starting to affect the U.S. economy, and will probably constrain economic growth during the second half of this year. A neutral interest-rate policy, low inflation and slowing economic growth could set the stage for long-term interest rates to decline further, which may be especially good for U.S. Treasury bond prices. At the same time, we would expect healthy demand to support prices of corporate and commercial bonds. Of course, we will continue to monitor the U.S. economy and bond market carefully. Whatever the next six months bring, we intend to remain vigilant in our efforts to deliver solid income potential from a broadly diversified portfolio of quality securities. That's what makes Oppenheimer Variable Account Funds - Oppenheimer Bond Fund part of THE RIGHT WAY TO INVEST. - ---------------------------- 1. Includes changes in net asset value per share and does not include the charges associated with the separate account products which offer this fund. Such performance is not annualized and would have been lower if such charges were taken into account. 2. The Fund's portfolio is subject to change. The Fund may invest in below-investment-grade securities, which may entail greater risks, as described in the prospectus. 3 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER AGGRESSIVE GROWTH FUND OBJECTIVE OPPENHEIMER AGGRESSIVE GROWTH FUND, a series of Oppenheimer Variable Account Funds, primarily seeks capital appreciation by investing in "growth-type" companies. Prior to May 1, 1998, this Fund was named Oppenheimer Capital Appreciation Fund. NARRATIVE BY BRUCE BARTLETT, PORTFOLIO MANAGER Oppenheimer Aggressive Growth Fund, a series of Oppenheimer Variable Account Funds, provided a cumulative total return of 17.40% for the six-month period ended June 30, 1998.(1) After a challenging year in 1997, the performance of the Fund accelerated sharply during the first few months of 1998. Our holdings in a number of stocks were driven higher by a market that favored the Fund's growth style of investment. In addition, small- and mid-cap stocks participated in the market's rise, adding to the Fund's positive performance. During the first half of the year, the Fund's success arose from its aggressive strategy of investing in industries that represent emerging growth and new technologies, as well as businesses that provide innovative products and services. As always, we maintained our disciplined approach of selecting the stocks of individual companies--small, medium, and large--that met our criteria for growth. Consumer cyclicals and technology were the two primary sectors that fueled the Fund's growth during the period. We dramatically increased our holdings in the area of consumer cyclicals. In particular, we focused on stocks of specialty retail companies with strong fundamentals, such as Lowe's and CVS. These companies benefited from exceptional consumer purchasing power, which was driven by low unemployment, low interest rates and growing real wages. Technology was another area of strong growth in which we invested substantially during the period. We sold some of our technology holdings in the semiconductor and PC-related businesses, areas that exhibited weakness during the first half of the year. Instead, we found attractive opportunities in the stocks of telecommunications equipment and productivity-enhancing software companies. We also identified substantial growth opportunities in the waste industry. Allied Waste is an example of one such company that exhibited strong internal growth, as well as growth through acquisitions. Their stock responded positively to the company's increasing economies of scale and growing customer base. On the other hand, the Fund's performance suffered as a result of our holdings in companies that provide physician practice management services. During the first half of 1998, we began to doubt the sustainability of revenue and earnings growth for many of these companies. And, shortly thereafter, stocks of the companies in question weakened, which in turn constrained the Fund's performance toward the end of the period. However, we minimized our losses by swiftly reevaluating our positions, and sharply reducing our holdings in this sector. We shifted those resources into investments that we believe have better growth potential. Looking ahead to the second half of 1998, we believe that the U.S. economy is likely to show signs of slowing growth. The performance of individual stocks in such an environment will likely depend on the reliability of each company's earnings. Accordingly, we are focusing on companies we believe can sustain strong revenue and earnings growth in the face of a slowing economy. That's what makes Oppenheimer Variable Account Funds - Oppenheimer Aggressive Growth Fund part of THE RIGHT WAY TO INVEST. - ---------------------------- 1. Includes changes in net asset value per share and does not include the charges associated with the separate account products which offer this fund. Such performance is not annualized and would have been lower if such charges were taken into account. 4 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND 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, PORTFOLIO MANAGER Oppenheimer Growth Fund provided a cumulative total return of 17.03% for the six-month period ended June 30, 1998.(1) The strongest contributors to performance during the first half of the year were technology and consumer cyclical stocks. Earlier in the year, the Asian economic crisis caused a decrease in demand in the technology sector, as well as lower prices for competing products that are produced overseas. In turn, these conditions led to fears of slowing growth, and lower prices for many technology-related stocks. We responded by eliminating certain semiconductor equipment stocks, component outsourcers, and other technology companies from our portfolio because we thought the events in Asia would greatly impact those industries. As prices and valuations fell for attractive companies in the sector, we added to our holdings in the areas of technology that showed the highest growth potential. For example, we increased our holdings of software vendors, such as Microsoft and PeopleSoft, and also initiated positions in telecommunications equipment and information technology outsourcing companies. These holdings performed strongly during the first six months of 1998, as stock prices rebounded.(2) Consumer cyclical stocks surged during the period as a result of the continuing health of the U.S. economy. We found opportunities among the stocks of car-rental companies, where prices were relatively low despite high earnings prospects. The Fund also shared in the positive performance of some retailers and apparel companies, as well as housing-related stocks. These industries benefited from low unemployment, low inflation, low interest rates and high levels of consumer confidence. On the other hand, we were disappointed by the performance of several oil service companies that we originally thought had been oversold and represented good buying opportunities. However, the oil industry performed poorly during the first six months of the year. As the period progressed, we reevaluated our holdings and sold the stocks of companies that appeared subject to further price deterioration. As always, we select stocks on a company-by-company, investment-by-investment basis. Buying opportunities among technology and consumer cyclical stocks enabled us to lower the Fund's cash levels. We thereby positioned the Fund to share more fully in the equity market's strong showing during the first half of the year. However, overall valuations remain high in this market making it difficult for us, as price-sensitive buyers, to find attractive investments at reasonable valuations. Going forward, we plan to adhere to our fundamental approach of seeking growth at the right price. We believe that the U.S. economy's growth is likely to be slowed by the continuing impact of the events in Asia. As a result, we are focusing on domestic, consumer-oriented companies, such as advertising agencies and grocery and drug chains, that have improved their earnings outlook through restructurings and other positive developments. We are particularly concentrating on stocks we expect to grow faster than the overall market. In today's volatile economic environment, we believe our disciplined approach and emphasis on individual stock selection should serve investors well. That's why Oppenheimer Variable Account Funds - Oppenheimer Growth Fund continues to be part of THE RIGHT WAY TO INVEST. - ---------------------------- 1. Includes changes in net asset value per share and does not include the charges associated with the separate account products which offer this fund. Such performance is not annualized and would have been lower if such charges were taken into account. 2. The Fund's portfolio is subject to change. 5 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND OBJECTIVE OPPENHEIMER MULTIPLE STRATEGIES FUND, a series of Oppenheimer Variable Account Funds, seeks a total investment return, which includes current income and capital appreciation, from investments in common stocks and other equity securities, bonds and other debt securities and money market securities. NARRATIVE BY RICHARD RUBINSTEIN, CO-PORTFOLIO MANAGER Oppenheimer Multiple Strategies Fund provided a cumulative total return of 7.09% for the six-month period ended June 30, 1998.(1) The first six months of the year proved to be a period of opportunity and challenge. Although some markets and types of investments performed well, others disappointed. U.S. and European equity markets showed strength, but Asian markets experienced a continuation of the economic difficulties that began late last year. In addition, emerging markets suffered as a result of the Asian crisis. Not surprisingly, considering its diversified nature, the Fund shared in both the markets' strengths and weaknesses. By maintaining the Fund's exposure to a wide range of U.S. and global equities and bonds, we positioned the Fund to take advantage of attractive investments, while actively managing risk. The Fund's exposure to equities was about 51% of the portfolio at the end of the period. This enabled the Fund to participate in the stock market's positive performance. Two of our largest and most successful areas of industry focus were health care and banks. Health care stocks, including major drug companies, added a strong growth component to the portfolio. We also invested in smaller biotechnology companies we believed to be undervalued and were bringing innovative, new products to market. Our bank holdings included several European institutions, where U.S.-style management changes have improved efficiency, lowered costs, raised revenue growth rates and increased profitability.(2) On the other hand, our equity holdings in technology suffered as a result of the overall weakness within that sector. We responded by focusing tightly on companies with dominant franchises in their specific markets, such as Intel and Xerox. We believe these market leaders are likely to be among the first to rebound when conditions again become favorable for the sector. They have the resources to take advantage of competitors' weaknesses, as well as the size to attract the interest of many institutional investors. The Fund's bond portfolio over the period consisted of a mix of U.S. Treasuries, mortgage-backed instruments, high-yield corporate bonds and foreign bonds from a combination of developed and emerging countries. Cash holdings allowed us to increase our allocations to attractive opportunities in the bond markets, such as mortgage-backed securities and Treasury bonds. These investments performed well, supported by a beneficial environment of falling interest rates. We also invested in certain emerging market bonds. However, falling spreads (the difference between the return from high-yield bonds and U.S. Treasury bonds) made it increasingly difficult to find attractive, high-yield bond investments. As an alternative, we found attractive opportunities among REITs (Real Estate Investment Trusts) and electric utility stocks. A REIT is a company that buys and manages real estate and/or mortgages on behalf of its shareholders. Although both REITs and electric utility stocks are equity investments, they may offer bond-like yields, along with the potential for modest capital appreciation. While REITs failed to provide capital appreciation during the period, electric utilities proved to be among the strongest performers in the Fund's portfolio. Looking ahead, we remain cautiously optimistic about the market's prospects over the coming months. While many domestic equities appear somewhat overvalued and earnings seem to be slowing, market fundamentals, such as consumer spending and money flows, remain strong. And although Asian economies continue to struggle, the rest of the world has thus far weathered the situation fairly well. In Europe, companies are beginning to benefit from the management changes and corporate restructurings that helped U.S. companies become more efficient over the past decade. Latin America has also learned some difficult lessons and appears to be on track toward better economic growth. - ---------------------------- 1. Includes changes in net asset value per share and does not include the charges associated with the separate account products which offer this fund. Such performance is not annualized and would have been lower if such charges were taken into account. 2. The Fund's portfolio and allocations are subject to change. 6 Our diversified investment approach positions the Fund to participate in rising markets, while providing protection against unexpected market declines. In particular, the Fund is positioned to take advantage of exceptional values that may become available during market corrections. Whatever direction the market and economy take, we believe broad diversification is the key to managing risk while attempting to produce above-average returns. We plan to rigorously maintain our disciplined strategy of diversification, not just among asset types, but also among investment styles, including growth, value, contrarian, high-yield and international. By drawing on the various talents of OppenheimerFunds' investment professionals, we aim to maintain a "portfolio for all seasons," one that is positioned to confront the challenges and take advantage of the opportunities that may arise. That's what makes Oppenheimer Variable Account Multiple Strategies Fund part of THE RIGHT WAY TO INVEST. 7 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND 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, PORTFOLIO MANAGER Oppenheimer Global Securities Fund performed well for the six-month period ended June 30, 1998, generating a cumulative total return, of 12.19%.(1) We attribute this performance to our disciplined investment approach, in which we select stocks on a company-by-company basis, rather than according to broad economic trends. Our "bottom-up" strategy was particularly important over the past six months because of the widely divergent performance of the global stock markets. Fortunately, our investment discipline led us to invest about 50% of the portfolio in Europe, the top-performing market over the past six months. European companies have benefited from preparations for the European Monetary Union (EMU), which is expected to eliminate trade and currency barriers and create a single European marketplace. Companies that have traditionally dominated their national markets are now attempting to succeed in the larger continental market. In addition, like American companies over the past several years, European firms are restructuring to reduce costs and boost productivity.(2) While the U.S. stocks in our portfolio provided positive returns, most of those gains were achieved in the first four months of the year. May and June saw heightened volatility amid renewed concerns about the Asian crisis's effect on U.S. corporate earnings. We found few Asian companies that we considered attractive. A combination of economic forces, including ill-advised economic policies and a weak banking system, led to last year's massive currency devaluations in many Asian countries. Economic difficulties, numerous corporate bankruptcies and steep market declines followed. Finally, while we continued to find attractive investments in growing Latin American companies, stocks there have also declined in the aftermath of the Asian crisis. In our opinion, that sell-off was unwarranted by the region's fundamentals, and we believe Latin American stock prices should rise when investors realize that the region does not share Asia's economic problems. Within these markets, we continued to invest in companies we expect to benefit from our long-term investment themes. For example, the telecommunications and media theme contributed substantially to the Fund's performance. We believe the introduction of digital television in Europe, scheduled for later this year, will create higher earnings for many media companies. We established positions in digital broadcasters and content developers, such as Canal Plus, the French pay television and satellite television producer, and Carlton Communications in the United Kingdom. We also saw positive contributions from companies participating in our capital markets development and corporate restructuring themes, especially in Europe. Banks, brokerage firms and other financial services providers are expected to benefit greatly from EMU because of the elimination of cross-border trade barriers. We've received especially good returns from Italian and Portuguese financial stocks over the past six months as more investors have recognized their growth prospects. Our outlook varies depending on which region of the world we're considering. As explained earlier, we believe that EMU will have long-lasting benefits for many European companies. Although we expect the U.S. economy to remain healthy, we believe that corporate earnings growth will moderate, and we do not expect dramatic increases in domestic stock prices. However, we remain optimistic about Latin America. Stock valuations are very low, but earnings growth is strong. This combination could drive stock prices higher when investor confidence returns to the region. On the other hand, we are less optimistic about Japan and Asia. In our view, despite recent efforts by the U.S. government to support Asia's economies, the region's problems require fundamental economic change. No matter what the future brings, we will continue to strive to help our shareholders participate in the world's most attractive companies. In our view, this disciplined approach to global investing is part of THE RIGHT WAY TO INVEST. - ---------------------------- 1. Includes changes in net asset value per share and does not include the charges associated with the separate account products which offer this fund. Such performance is not annualized and would have been lower if such charges were taken into account. 2. The Fund's portfolio is subject to change. 8 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND OBJECTIVE OPPENHEIMER STRATEGIC BOND FUND, a series of Oppenheimer Variable Account Funds, primarily seeks a high level of current income from debt securities. The Fund primarily invests in three sectors: foreign fixed-income securities, U.S. government securities and lower rated high-yield domestic corporate bonds (commonly known as "junk bonds.") Investing in foreign securities entails additional expenses and risks including foreign currency fluctuations while investing in junk bonds carries a greater risk of default. NARRATIVE BY DAVID NEGRI, CO-PORTFOLIO MANAGER Oppenheimer Strategic Bond Fund provided positive performance during the first six months of 1998, generating a cumulative total return of 3.30%.(1) The Fund's performance was driven primarily by positive economic conditions in the United States, Europe and Latin America. Although basic economic growth in the United States was stronger than most forecasters expected, inflation remained at near historically low levels. In our view, this is primarily because of enormous productivity improvements within the corporate sector, as well as price competition from imports. In Europe, the economic effects of the impending formation of the European Monetary Union (EMU), scheduled for January 1, 1999, have been very positive. EMU is expected to eliminate trade and currency barriers, creating a single European marketplace and economy. In the U.S. bond market, the likelihood that the aftereffects of the Asian financial crisis will soon slow economic growth helped prevent the Federal Reserve from tightening monetary policy during the first half of 1998. Despite some volatility early in the year, long-term U.S. interest rates ended the six-month period lower than where they began. About two-thirds of the Fund's assets were invested in domestic bonds as of June 30, 1998. High-yield corporate bonds performed well because they were in great demand by investors looking to maximize yields in a low interest-rate environment. U.S. government securities generally provided returns slightly higher than or equal to their coupons.(2) The foreign bond sector accounted for about 15% of the Fund's assets. We maintained a lower-than-average position in the developed markets of Europe, Canada, Australia and New Zealand because interest rates there have been generally lower than in the United States. However, the Fund benefited from positive changes in these nations' currency exchange rates. Our exposure to the emerging markets was focused primarily on debt of Latin America, including Argentina and Mexico, which offered attractive premiums to Brady bonds. Brady bonds are securities issued by foreign governments, backed by the U.S. Federal Reserve Bank, and are often U.S.-dollar denominated. In Eastern Europe, we held modest positions in Poland, Russia and Bulgaria. And while we had no exposure to Southeast Asia when the crisis began, we recently established some small positions, primarily in Korea, in attractively priced bonds. Looking forward, we are optimistic regarding the second half of 1998. In the United States, we believe that the Federal Reserve Board will refrain from tightening monetary policy. That's because the Asian crisis's aftermath is likely to constrain U.S. economic growth during the second half of this year. We remain optimistic about the European economy as EMU approaches. And, in our opinion, Latin America also remains attractive as its economies continue to expand. Of course, we will continue to monitor the global economies and bond markets carefully. Whatever the next six months bring, we intend to remain vigilant in our efforts to deliver solid income potential from a broadly diversified portfolio of fixed-income securities. In our view, this disciplined approach to investing is part of THE RIGHT WAY TO INVEST. - ---------------------------- 1. Includes changes in net asset value per share and does not include the charges associated with the separate account products which offer this fund. Such performance is not annualized and would have been lower if such charges were taken into account. 2. The Fund's portfolio is subject to change. 9 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND 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 MIKE LEVINE, PORTFOLIO MANAGER Oppenheimer Growth & Income Fund continued to perform well during the first half of 1998. For the six-month period ended June 30, 1998, the Fund provided a cumulative total return of 13.09%.(1) In general, the Fund's strong performance can be explained by three factors: 1) being fully invested in a strong market; 2) capitalizing on opportunities in the financial and technology sectors, as well as in consumer-oriented industries, including airlines, entertainment and retail; and 3) good individual stock selection. Specific stocks that have contributed to the Fund's strong performance include Chase Manhattan, Time Warner and Waters Corp., a manufacturer of analytical instruments. Our basic strategy for the Fund is to buy the stocks of individual companies that exhibit positive fundamentals at reasonable prices. But, we also take a contrarian approach at times to look for new investment ideas among underperforming securities. As an example, during the first half of 1998, we increased our holdings in the oil services sector where, despite a recent decline in oil prices, we believed that the long-term fundamentals were extremely positive. We still view these stocks favorably and believe that oil service stocks will rebound sharply when prices recover.(2) Another feature of the Fund that has worked to its advantage is the flexibility to invest in convertible securities, which made up about 15% of the portfolio at the end of the period. Convertible securities are debt or preferred instruments that may be converted to shares of the issuer's common stock at a future date. Therefore, their performance is linked to movements in both interest rates and the underlying stock. The convertible securities market has done well over the past six months, comparing favorably to most fixed-income alternatives. While our outlook for the rest of 1998 is cautious due to high valuations of stocks, slowing corporate earnings growth and the continuing impact of the Asian economic crisis, we nevertheless continue to see a number of attractive investment opportunities in the market. We also believe that the key to the Fund's potential for continued good performance is its flexibility to invest in attractive market opportunities as they arise. Thank you for your confidence in Oppenheimer Variable Account Funds - Oppenheimer Growth & Income Fund. We look forward to helping you reach your investment goals, part of our commitment to you as THE RIGHT WAY TO INVEST. - ---------------------------- 1. Includes changes in net asset value per share and does not include the charges associated with the separate account products which offer this fund. Such performance is not annualized and would have been lower if such charges were taken into account. 2. The Fund's portfolio is subject to change. 10 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER SMALL CAP GROWTH FUND OBJECTIVE OPPENHEIMER SMALL CAP GROWTH FUND, a series of Oppenheimer Variable Account Funds, seeks capital appreciation. In seeking its objective, the Fund emphasizes investments in securities of growth-type companies with market capitalizations less than $1 billion. NARRATIVE BY JAY TRACEY, CO-PORTFOLIO MANAGER The Fund commenced operations on May 1, 1998. In our view, this brief period is too short a time-frame to realistically evaluate the Fund's ability to generate long-term growth. The Fund's first month, May, was very difficult for small-capitalization growth stocks. Although almost all sectors of the U.S. stock market suffered set-backs in May, small-capitalization stocks declined more sharply than large- capitalization stocks. Furthermore, within the small-cap market, growth-oriented stocks generally fell more than value-oriented stocks. In June, small-capitalization stocks recovered somewhat, but not enough to offset May's decline. We believe the small-cap stock market's sell-off was related to concerns over the ongoing financial crisis in Asia. Even though most small U.S. companies derive their revenues from domestic sources, rather than from overseas markets, small-cap stocks declined because of a "flight to quality" among both domestic and overseas investors. When faced with the possibility of increased market volatility, investors shifted their assets toward well-known blue-chip stocks with track records of consistent growth and ready liquidity in the financial markets. In our opinion, the sharp decline of small-cap stocks in May was not justified by these companies' fundamentals. In fact, the majority of our holdings continue to report earnings that either meet or exceed most analysts' expectations. Even in this difficult market environment, we continued to find investment opportunities in companies that we believe have excellent growth prospects. We identified these stocks using a highly disciplined investment approach in which we consider investments on a company-by-company basis rather than according to broader economic trends or market conditions. When analyzing individual companies, we first look for a history of earnings growth at a rate that we believe is sustainable. Often, sustainable long-term growth is the result of expansion into new markets or the development of innovative product and services. We particularly like companies that can finance a superior rate of expansion without borrowing or issuing additional shares of stock. Such criteria led us to a number of companies with good growth prospects. For example, as of June 30, the Fund's largest concentration of assets was in the commercial services sector. Many services companies are growing because of gains in their market share. These companies are also benefiting from consolidation within their respective industries, whether consumer, business or healthcare focused. Service companies are also less sensitive to changes in the economy. So, they tend to provide relatively stable performance. We also found a number of attractive stocks in the technology sector, especially software companies with innovative business ideas, and consulting services companies that make their business customers more productive by increasing the efficiency of their operations.(1) Despite the recent weakness in small-cap growth stocks, our outlook remains generally positive. While U.S. corporate earnings growth has begun to slow, this trend has so far mostly affected large-capitalization companies. In spite of liquidity concerns, we expect more investors to turn to small-capitalization growth stocks when they realize that large-capitalization stocks may have difficulty generating the high growth rates of the past several years. Accordingly, we intend to adhere to our "bottom-up," growth-oriented investment approach as we navigate through short-term economic influences and market conditions. In our opinion, maintaining a long-term perspective and a disciplined approach are important parts of THE RIGHT WAY TO INVEST. - ---------------------------- 1. The Fund's portfolio is subject to change. 11 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
PRINCIPAL VALUE AMOUNT NOTE 1 - -------------------------------------------------------------------------------------- CERTIFICATES OF DEPOSIT - 1.5% - -------------------------------------------------------------------------------------- Deutsche Bank AG, 5.65%, 1/22/99 $2,000,000 $ 2,000,000 - -------------------------------------------------------------------------------------- DIRECT BANK OBLIGATIONS - 1.4% - -------------------------------------------------------------------------------------- Abbey National PLC guaranteeing commercial paper of Abbey National North America Corp., 5.47%, 10/30/98 2,000,000 1,963,230 - -------------------------------------------------------------------------------------- LETTERS OF CREDIT - 8.9% - -------------------------------------------------------------------------------------- ABN Amro Bank PLC guaranteeing commercial paper of Glencore Finance (Bermuda) Ltd., Series B, 5.60%, 7/22/98 3,000,000 2,990,200 - -------------------------------------------------------------------------------------- Barclays Bank PLC guaranteeing commercial paper of Banca Serfin SA, Institcion de Banca Multiple Group Financiero Serfin, Nassau Branch, 5.42%, 11/23/98 3,000,000 2,934,387 - -------------------------------------------------------------------------------------- Barclays Bank PLC guaranteeing commercial paper of Banco Nacional de Comericio Exterior, SNC, Series A, 5.47%, 10/14/98 2,500,000 2,460,115 - -------------------------------------------------------------------------------------- Credit Suisse guaranteeing commercial paper of Daewoo International (America) Corp., 5.52%, 12/2/98 3,000,000 2,929,160 - -------------------------------------------------------------------------------------- Credit Suisse guaranteeing commercial paper of Minmetals Capitals & Securities, Inc., 5.40%, 8/24/98 700,000 694,246 ------------ Total Letters of Credit 12,008,108 - -------------------------------------------------------------------------------------- SHORT-TERM NOTES - 86.4% - -------------------------------------------------------------------------------------- ASSET-BACKED - 23.2% Asset Backed Capital Finance, Inc., 5.47%, 10/22/98(1) 5,000,000 4,914,151 - -------------------------------------------------------------------------------------- Cooperative Assn. of Tractor Dealers, Series A, 5.40%, 7/17/98 2,600,000 2,593,760 - -------------------------------------------------------------------------------------- Cooperative Assn. of Tractor Dealers, Series A, 5.42%, 8/21/98 2,300,000 2,282,340 - -------------------------------------------------------------------------------------- CXC, Inc., 5.50%, 12/16/98(1) 2,000,000 1,948,667 - -------------------------------------------------------------------------------------- CXC, Inc., 5.515%, 12/7/98(1) 2,000,000 1,951,284 - -------------------------------------------------------------------------------------- CXC, Inc., 5.523%, 11/16/98(1) 2,000,000 1,957,657 - -------------------------------------------------------------------------------------- Enterprise Funding Corp., 5.49%, 12/14/98(1) 2,000,000 1,949,370 - -------------------------------------------------------------------------------------- Enterprise Funding Corp., 5.63%, 7/31/98(1) 3,000,000 2,985,925 - -------------------------------------------------------------------------------------- Preferred Receivables Funding Corp., 5.52%, 11/12/98(1) 2,425,000 2,375,174 - -------------------------------------------------------------------------------------- Sigma Finance, Inc., 5.44%, 9/10/98(1) 3,000,000 2,967,813 - -------------------------------------------------------------------------------------- Sigma Finance, Inc., 5.58%, 8/28/98(1) 2,500,000 2,477,525 - -------------------------------------------------------------------------------------- SMM Trust, 5.656%, 7/29/98(2)(3) 3,000,000 3,000,000 ------------ 31,403,666 - -------------------------------------------------------------------------------------- BANK HOLDING COMPANIES - 1.3% Morgan (J.P.) & Co., Inc., 5.37%, 7/17/98 1,729,000 1,724,850 - -------------------------------------------------------------------------------------- BEVERAGES - 3.6% Coca-Cola Enterprises, Inc., 5.48%, 10/23/98(1) 5,000,000 4,913,233 - -------------------------------------------------------------------------------------- BROKER/DEALERS - 16.6% Bear Stearns Cos., Inc., 5.45%, 10/22/98 2,000,000 1,965,786 - -------------------------------------------------------------------------------------- Bear Stearns Cos., Inc., 5.47%, 10/28/98 2,500,000 2,454,797 - -------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., 5.46%, 9/18/98 3,000,000 2,964,055
12 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL VALUE AMOUNT NOTE 1 - -------------------------------------------------------------------------------------- BROKER/DEALERS (CONTINUED) Lehman Brothers Holdings, Inc., 5.658%, 7/20/98(2) $2,000,000 $ 2,000,000 - -------------------------------------------------------------------------------------- Morgan Stanley Dean Witter & Co., 6.50%, 7/1/98(2) 5,000,000 5,000,000 - -------------------------------------------------------------------------------------- Republic New York Securities Corp., 6.75%, 7/1/98(2) 5,000,000 5,000,000 - -------------------------------------------------------------------------------------- Salomon Smith Barney Holdings, Inc., 5.717%, 7/20/98(2) 3,000,000 3,000,000 ------------ 22,384,638 - -------------------------------------------------------------------------------------- COMMERCIAL FINANCE - 4.4% Countrywide Home Loans, 5.57%, 8/3/98 2,500,000 2,487,236 - -------------------------------------------------------------------------------------- FINOVA Capital Corp., 5.55%, 11/13/98 2,000,000 1,958,375 - -------------------------------------------------------------------------------------- FINOVA Capital Corp., 5.56%, 11/6/98 1,500,000 1,470,347 ------------ 5,915,958 - -------------------------------------------------------------------------------------- CONSUMER FINANCE - 2.2% Beneficial Corp., 5.505%, 9/23/98 3,000,000 2,961,465 - -------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 10.3% General Electric Capital Services, 6.50%, 7/1/98 5,500,000 5,500,000 - -------------------------------------------------------------------------------------- Household Finance Corp., 5.556%, 7/29/98(2) 5,000,000 4,997,440 - -------------------------------------------------------------------------------------- Prudential Funding Corp., 5.50%, 11/18/98 3,500,000 3,425,139 ------------ 13,922,579 - -------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 4.8% Baxter International, Inc., 5.55%, 7/20/98 2,000,000 1,994,142 - -------------------------------------------------------------------------------------- Baxter International, Inc., 5.55%, 7/27/98(1) 2,500,000 2,489,979 - -------------------------------------------------------------------------------------- Baxter International, Inc., 5.625%, 8/14/98 2,000,000 1,986,250 ------------ 6,470,371 - -------------------------------------------------------------------------------------- INDUSTRIAL SERVICES - 1.5% Atlas Copco AB, 5.56%, 7/7/98(1) 2,000,000 1,998,147 - -------------------------------------------------------------------------------------- INSURANCE - 11.1% AIG Life Insurance Co., 5.645%, 7/1/98(2) 3,000,000 3,000,000 - -------------------------------------------------------------------------------------- Pacific Mutual Life Insurance Co., 5.649%, 7/1/98(2)(3)(4) 5,000,000 5,000,000 - -------------------------------------------------------------------------------------- Protective Life Insurance Co., 5.682%, 7/1/98(2) 5,000,000 5,000,000 - -------------------------------------------------------------------------------------- Travelers Insurance Co., 5.664%, 7/1/98(2)(3) 2,000,000 2,000,000 ------------ 15,000,000 - -------------------------------------------------------------------------------------- LEASING & FACTORING - 3.7% American Honda Finance Corp., 5.687%, 7/20/98(2)(3) 3,000,000 3,000,000 - -------------------------------------------------------------------------------------- American Honda Finance Corp., 5.70%, 7/17/98 2,000,000 1,994,933 ------------ 4,994,933 - -------------------------------------------------------------------------------------- NONDURABLE HOUSEHOLD GOODS - 1.5% Avon Capital Corp., 5.65%, 7/8/98(1) 2,000,000 1,997,803 - -------------------------------------------------------------------------------------- OIL-INTEGRATED - 2.2% Fina Oil & Chemical Co., 5.52%, 8/14/98(1) 3,000,000 2,979,760 ------------ Total Short-Term Notes 116,667,403 - -------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 1.5% - -------------------------------------------------------------------------------------- Finnish Export Credit Ltd., 5.55%, 7/15/98 2,000,000 1,995,683
13 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
VALUE NOTE 1 - -------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE 99.7% $134,634,424 - -------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.3 421,906 ---------- ------------ NET ASSETS 100.0% $135,056,330 ---------- ------------ ---------- ------------
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. Security issued in an exempt transaction without registration under the Securities Act of 1933. Such securities amount to $37,906,488, or 28.07% of the Fund's net assets, and have been determined to be liquid pursuant to guidelines adopted by the Board of Trustees. 2. 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 June 30, 1998. This instrument may also have a demand feature which allows, on up to 30 days' notice, the recovery of principal at any time, or at specified intervals not exceeding one year. Maturity date shown represents effective maturity based on variable rate and, if applicable, demand feature. 3. Represents a restricted security which is considered illiquid, by virtue of the absence of a readily available market or because of legal or contractual restrictions on resale. Such securities amount to $13,000,000, or 9.63% 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. 4. Put obligation redeemable at full face value on the date reported. See accompanying Notes to Financial Statements. 14 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ MORTGAGE-BACKED OBLIGATIONS - 2.9% - ------------------------------------------------------------------------------------------ Amresco Commercial Mortgage Funding I Corp., Multiclass Mtg. Pass-Through Certificates, Series 1997-C1, Cl. H, 7%, 6/17/29(2) $ 200,000 $ 180,625 - ------------------------------------------------------------------------------------------ Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates, Series 1997-D4: Cl. B1, 7.525%, 4/14/29(3) 167,000 161,651 Cl. B2, 7.525%, 4/14/29(3) 167,000 158,128 Cl. B3, 7.525%, 4/14/29(3) 166,000 153,394 - ------------------------------------------------------------------------------------------ CBA Mortgage Corp., Mtg. Pass-Through Certificates, Series 1993-C1: Cl. E, 7.76%, 12/25/03(2)(3) 250,000 253,875 Cl. F, 7.76%, 12/25/03(2)(3) 700,000 563,500 - ------------------------------------------------------------------------------------------ CS First Boston Mortgage Securities Corp., Mtg. Pass-Through Certificates, Series 1997-C1: Cl. F, 7.50%, 6/20/13(2) 300,000 296,550 Cl. G, 7.50%, 6/20/14(2) 500,000 472,500 Cl. H, 7.50%, 8/20/14(2) 225,000 183,375 - ------------------------------------------------------------------------------------------ First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates, Series 1997-CHL1: 6.929%, 2/25/11(2)(3) 1,500,000 1,321,500 8.129%, 5/25/08(2)(3) 300,000 308,610 - ------------------------------------------------------------------------------------------ Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates: Series 1996-C1, Cl. E, 7.438%, 2/15/28(2)(3) 835,342 814,197 Series 1997-HF1, Cl. F, 6.86%, 2/15/10(2) 300,000 280,219 - ------------------------------------------------------------------------------------------ Mortgage Capital Funding, Inc.: Commercial Mtg. Pass-Through Certificates, Series 1997-MC1, Cl. F, 7.452%, 5/20/07(2) 254,890 247,243 Multifamily Mtg. Pass-Through Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06(4) 750,000 713,906 - ------------------------------------------------------------------------------------------ Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates: Series 1994-C1, Cl. E, 8%, 6/25/26 650,527 654,451 Series 1994-C2, Cl. G, 8%, 4/25/25 720,488 722,244 Series 1995-C1, Cl. F, 6.90%, 2/25/27 647,865 614,896 - ------------------------------------------------------------------------------------------ Salomon Brothers Mortgage Securities VII, Series 1996-B, Cl. 1, 7.132%, 4/25/26 1,463,375 1,090,672 - ------------------------------------------------------------------------------------------ Structured Asset Securities Corp., Multiclass Pass-Through Certificates, Series 1996-C3, Cl. E, 8.458%, 6/25/30(4) 650,000 661,680 ------------ Total Mortgage-Backed Obligations (Cost $8,824,937) 9,853,216 - ------------------------------------------------------------------------------------------ FOREIGN GOVERNMENT OBLIGATIONS - 0.9% - ------------------------------------------------------------------------------------------ Brazil (Federal Republic of) Capitalization Bonds, 8%, 4/15/14 2,320,420 1,714,210 - ------------------------------------------------------------------------------------------ PT Hutama Karya Promissory Nts., Zero Coupon, 2/10/98(2)(5)(IDR) 1,000,000,000 16,892 - ------------------------------------------------------------------------------------------ Russia (Government of) Principal Loan Debs., 3.313%, 12/15/20(6) 3,000,000 1,420,785 ------------ Total Foreign Government Obligations (Cost $3,531,283) 3,151,887 - ------------------------------------------------------------------------------------------ CORPORATE BONDS AND NOTES - 66.7% - ------------------------------------------------------------------------------------------ AEROSPACE - 2.3% America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 1,000,000 1,070,000
15 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ AEROSPACE (CONTINUED) Amtran, Inc., 10.50% Sr. Nts., 8/1/04 $ 700,000 $ 740,250 - ------------------------------------------------------------------------------------------ Atlas Air, Inc.: 10.75% Sr. Nts., 8/1/05 700,000 745,500 9.25% Sr. Nts., 4/15/08(4) 1,325,000 1,325,000 - ------------------------------------------------------------------------------------------ Constellation Finance LLC, 9.80% Airline Receivable Asset-Backed Nts., Series 1997-1, 1/1/01(2) 800,000 812,000 - ------------------------------------------------------------------------------------------ Pegasus Aircraft Lease Securitization Trust, 11.76% Sr. Nts., Cl. B, 6/15/04(2) 331,061 341,821 - ------------------------------------------------------------------------------------------ Trans World Airlines Lease, 14% Equipment Trust, 7/2/08(2) 872,561 933,641 - ------------------------------------------------------------------------------------------ Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 1,850,000 1,951,750 ------------ 7,919,962 - ------------------------------------------------------------------------------------------ CHEMICALS - 1.0% ClimaChem, Inc., 10.75% Gtd. Sr. Unsec. Nts., Series B, 12/1/07 120,000 125,700 - ------------------------------------------------------------------------------------------ ICO, Inc., 10.375% Sr. Nts., 6/1/07 275,000 281,875 - ------------------------------------------------------------------------------------------ Laroche Industries, Inc., 9.50% Sr. Sub. Nts., Series B, 9/15/07 330,000 323,400 - ------------------------------------------------------------------------------------------ PCI Chemicals Canada, Inc., 9.25% Gtd. Nts., 10/15/07 825,000 810,562 - ------------------------------------------------------------------------------------------ Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 600,000 597,000 - ------------------------------------------------------------------------------------------ Sovereign Specialty Chemicals, Inc., 9.50% Sr. Unsec. Sub. Nts., Series B, 8/1/07 775,000 794,375 - ------------------------------------------------------------------------------------------ Sterling Chemicals, Inc., 11.25% Sr. Sub. Nts., 4/1/07 330,000 328,350 ------------ 3,261,262 - ------------------------------------------------------------------------------------------ CONSUMER DURABLES - 0.7% Holmes Products Corp., 9.875% Gtd. Sr. Unsec. Sub. Nts., Series B, 11/15/07 425,000 439,875 - ------------------------------------------------------------------------------------------ Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., Series B, 7/15/02 800,000 832,000 - ------------------------------------------------------------------------------------------ IHF Holdings, Inc., 0%/15% Sr. Sub. Disc. Nts., Series B, 11/15/04(7) 780,000 588,900 - ------------------------------------------------------------------------------------------ TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(2) 350,000 410,711 ------------ 2,271,486 - ------------------------------------------------------------------------------------------ CONSUMER NON-DURABLES - 2.0% AKI Holdings, Inc.: 0%/13.50% Sr. Disc. Debs., 7/1/09(4)(7) 1,080,000 572,400 10.50% Sr. Nts., 7/1/08(4) 510,000 515,100 - ------------------------------------------------------------------------------------------ Galey & Lord, Inc., 9.125% Sr. Unsec. Sub. Nts., 3/1/08 500,000 485,000 - ------------------------------------------------------------------------------------------ Phillips-Van Heusen Corp., 9.50% Sr. Sub. Nts., 5/1/08(4) 720,000 722,700 - ------------------------------------------------------------------------------------------ Revlon Consumer Products Corp., 8.625% Sr. Unsec. Sub. Nts., 2/1/08 1,750,000 1,760,937 - ------------------------------------------------------------------------------------------ Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts., 10.133%, 3/15/01(8) 1,800,000 1,404,000 - ------------------------------------------------------------------------------------------ Styling Technology Corp., 10.875% Sr. Sub. Nts., 7/1/08(4) 1,000,000 1,020,000 - ------------------------------------------------------------------------------------------ William Carter Co., 10.375% Sr. Sub. Nts., Series A, 12/1/06 235,000 251,450 ------------ 6,731,587 - ------------------------------------------------------------------------------------------ ENERGY - 4.4% Belden & Blake Corp., 9.875% Sr. Sub. Nts., 6/15/07 900,000 884,250 - ------------------------------------------------------------------------------------------ Clark Refinancing & Marketing, Inc., 8.875% Sr. Sub. Nts., 11/15/07 1,040,000 1,042,600 - ------------------------------------------------------------------------------------------ Clark USA, Inc., 10.875% Sr. Nts., Series B, 12/1/05 275,000 300,437 - ------------------------------------------------------------------------------------------ Dailey International, Inc., 9.50% Sr. Unsec. Nts., Series B, 2/15/08 800,000 784,000
16 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ ENERGY (CONTINUED) Denbury Management, Inc., 9% Sr. Sub. Nts., 3/1/08 $ 800,000 $ 768,000 - ------------------------------------------------------------------------------------------ Empresa Electric Del Norte, 10.50% Sr. Debs., 6/15/05(2) 1,000,000 1,025,000 - ------------------------------------------------------------------------------------------ Gothic Production Corp., 11.125% Sr. Sec. Nts., 5/1/05(4) 500,000 481,250 - ------------------------------------------------------------------------------------------ Grant Geophysical, Inc., 9.75% Sr. Nts., 2/15/08 1,100,000 1,097,250 - ------------------------------------------------------------------------------------------ J. Ray McDermott SA, 9.375% Sr. Sub. Bonds, 7/15/06 495,000 534,600 - ------------------------------------------------------------------------------------------ Ocean Rig Norway AS, 10.25% Gtd. Sr. Sec. Nts., 6/1/08(4) 1,420,000 1,356,100 - ------------------------------------------------------------------------------------------ P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., 5/15/08(4) 1,150,000 1,187,375 - ------------------------------------------------------------------------------------------ Petroleum Heat & Power Co., Inc., 9.375% Sub. Debs., 2/1/06 1,175,000 1,063,375 - ------------------------------------------------------------------------------------------ Pogo Producing Co., 8.75% Sr. Sub. Nts., 5/15/07 800,000 816,000 - ------------------------------------------------------------------------------------------ RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08 1,000,000 1,010,000 - ------------------------------------------------------------------------------------------ Statia Terminals International/Statia Terminals (Canada), Inc., 11.75% First Mtg. Nts., Series B, 11/15/03 225,000 237,375 - ------------------------------------------------------------------------------------------ Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 1,100,000 1,113,750 - ------------------------------------------------------------------------------------------ Universal Compression Holdings, Inc.: 0%/11.375% Sr. Disc. Nts., 2/15/09(4)(7) 720,000 428,400 0%/9.875% Sr. Disc. Nts., 2/15/08(4)(7) 1,325,000 841,375 ------------ 14,971,137 - ------------------------------------------------------------------------------------------ FINANCIAL - 2.0% Bakrie Investindo, Zero Coupon Promissory Nts., 3/26/98(2)(5)(IDR) 1,000,000,000 16,892 - ------------------------------------------------------------------------------------------ Bank Plus Corp., 12% Sr. Nts., 7/18/07 517,000 591,965 - ------------------------------------------------------------------------------------------ CB Richard Ellis Services, Inc., 8.875% Sr. Unsec. Sub. Nts., 6/1/06 900,000 897,750 - ------------------------------------------------------------------------------------------ ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(2) 79,380 79,579 - ------------------------------------------------------------------------------------------ Local Financial Corp., 11% Sr. Nts., 9/8/04(4) 800,000 876,000 - ------------------------------------------------------------------------------------------ Ocwen Capital Trust I, 10.875% Gtd. Bonds, 8/1/27 450,000 492,750 - ------------------------------------------------------------------------------------------ Ocwen Financial Corp., 11.875% Nts., 10/1/03 850,000 964,750 - ------------------------------------------------------------------------------------------ PT Polysindo Eka Perkasa, Zero Coupon Nts., Series 2, 7/15/98(2)(5)(IDR) 657,200,000 8,881 - ------------------------------------------------------------------------------------------ Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts., Series B, 4/1/08 1,900,000 1,885,750 - ------------------------------------------------------------------------------------------ Southern Pacific Funding Corp., 11.50% Sr. Nts., 11/1/04 600,000 597,000 - ------------------------------------------------------------------------------------------ Veritas Capital Trust, 10% Gtd. Debs., 1/1/28(2) 550,000 578,875 ------------ 6,990,192 - ------------------------------------------------------------------------------------------ FOOD & DRUG - 1.9% Fleming Cos., Inc.: 10.50% Sr. Sub. Nts., Series B, 12/1/04 475,000 496,375 10.625% Sr. Sub. Nts., Series B, 7/31/07 1,625,000 1,702,187 - ------------------------------------------------------------------------------------------ Pathmark Stores, Inc., 0%/10.75% Jr. Sub. Deferred Coupon Nts., 11/1/03(7) 2,100,000 1,774,500 - ------------------------------------------------------------------------------------------ Randall's Food Markets, Inc., 9.375% Sr. Sub. Nts., Series B, 7/1/07 1,520,000 1,611,200 - ------------------------------------------------------------------------------------------ Stater Brothers Holdings, Inc., 9% Sr. Unsec. Sub. Nts., 7/1/04 775,000 794,375 ------------ 6,378,637 - ------------------------------------------------------------------------------------------ FOOD/TOBACCO - 1.9% Aurora Foods, Inc., 8.75% Sr. Sub. Nts., 7/1/08(4) 520,000 525,850 - ------------------------------------------------------------------------------------------ Del Monte Foods Co., 0%/12.50% Sr. Disc. Nts., 12/15/07(4)(7) 750,000 491,250 - ------------------------------------------------------------------------------------------ Eagle Family Foods, Inc., 8.75% Sr. Sub. Nts., 1/15/08(4) 480,000 470,400
17 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ FOOD/TOBACCO (CONTINUED) Favorite Brands International, Inc., 10.75% Sr. Nts., 5/15/06(4) $ 400,000 $ 406,000 - ------------------------------------------------------------------------------------------ Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., 2/1/05(4) 1,250,000 1,275,000 - ------------------------------------------------------------------------------------------ Purina Mills, Inc., 9% Sr. Sub. Nts., 3/15/10(4) 600,000 619,500 - ------------------------------------------------------------------------------------------ SmithField Foods, Inc., 7.625% Sr. Sub. Nts., 2/15/08(4) 925,000 938,875 - ------------------------------------------------------------------------------------------ Sparkling Spring Water Group Ltd., 11.50% Sr. Sec. Sub. Nts., 11/15/07 1,175,000 1,233,750 - ------------------------------------------------------------------------------------------ Windy Hill Pet Food, Inc., 9.75% Sr. Sub. Nts., 5/15/07 600,000 630,000 ------------ 6,590,625 - ------------------------------------------------------------------------------------------ FOREST PRODUCTS/CONTAINERS - 0.4% Four M Corp., 12% Sr. Nts., Series B, 6/1/06(2) 230,000 247,250 - ------------------------------------------------------------------------------------------ Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 1,250,000 1,306,250 ------------ 1,553,500 - ------------------------------------------------------------------------------------------ GAMING/LEISURE - 4.4% AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts., 3/15/08(4)(7) 450,000 274,500 - ------------------------------------------------------------------------------------------ Apoca, Inc., 9.25% Sr. Sub. Nts., 3/15/08(4) 940,000 937,650 - ------------------------------------------------------------------------------------------ Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/95(9) 9,500 -- - ------------------------------------------------------------------------------------------ Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 840,000 875,700 - ------------------------------------------------------------------------------------------ Empress Entertainment, Inc., 8.125% Sr. Sub. Nts., 7/1/06(4) 1,160,000 1,168,700 - ------------------------------------------------------------------------------------------ Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03 680,000 748,000 - ------------------------------------------------------------------------------------------ Hard Rock Hotel, Inc., 9.25% Sr. Sub. Nts., 4/1/05(4) 1,600,000 1,648,000 - ------------------------------------------------------------------------------------------ Harveys Casino Resorts, 10.625% Sr. Unsec. Sub. Nts., 6/1/06 120,000 133,500 - ------------------------------------------------------------------------------------------ HMH Properties, Inc., 8.875% Sr. Nts., 7/15/07 400,000 448,000 - ------------------------------------------------------------------------------------------ Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 1,300,000 1,382,875 - ------------------------------------------------------------------------------------------ Mohegan Tribal Gaming Authority (Connecticut), 13.50% Sr. Sec. Nts., Series B, 11/15/02 725,000 917,125 - ------------------------------------------------------------------------------------------ Outboard Marine Corp., 10.75% Sr. Nts., 6/1/08(4) 1,100,000 1,116,500 - ------------------------------------------------------------------------------------------ Premier Parks, Inc.: 0%/10% Sr. Disc. Nts., 4/1/08(7) 1,180,000 789,125 9.25% Sr. Nts., 4/1/06 520,000 539,500 - ------------------------------------------------------------------------------------------ Rio Hotel & Casino, Inc.: 10.625% Sr. Sub. Nts., 7/15/05 125,000 134,375 9.50% Gtd. Sr. Sub. Nts., 4/15/07 1,205,000 1,268,262 - ------------------------------------------------------------------------------------------ Showboat Marina Casino Partnership/Showboat Marina Finance Corp., 13.50% First Mtg. Nts., Series B, 3/15/03 1,125,000 1,310,625 - ------------------------------------------------------------------------------------------ Six Flags Entertainment Corp., 8.75% Sr. Unsec. Nts., 4/1/06 1,000,000 1,023,750 - ------------------------------------------------------------------------------------------ Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03 200,000 208,000 ------------ 14,924,187 - ------------------------------------------------------------------------------------------ HEALTHCARE - 1.8% Fresenius Medical Care Capital Trust II, 7.875% Gtd. Nts., 2/1/08(2) 1,050,000 1,034,250 - ------------------------------------------------------------------------------------------ Fresenius Medical Care Capital Trust III, 7.375% Gtd. Nts., 2/1/08(4)(DEM) 1,225,000 687,783 - ------------------------------------------------------------------------------------------ Integrated Health Services, Inc.: 10.25% Sr. Sub. Nts., 4/30/06 35,000 37,625 9.50% Sr. Sub. Nts., 9/15/07 815,000 855,750 - ------------------------------------------------------------------------------------------ Magellan Health Services, Inc., 9% Sr. Sub. Nts., 2/15/08(4) 1,525,000 1,521,187
18 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ HEALTHCARE (CONTINUED) Oxford Health Plans, Inc., 11% Sr. Nts., 5/15/05(4) $ 1,200,000 $ 1,236,000 - ------------------------------------------------------------------------------------------ Sun Healthcare Group, Inc., 9.50% Sr. Sub. Nts., 7/1/07(4) 680,000 693,600 ------------ 6,066,195 - ------------------------------------------------------------------------------------------ HOUSING - 1.0% Engle Homes, Inc., 9.25% Sr. Nts., 2/1/08 1,300,000 1,287,000 - ------------------------------------------------------------------------------------------ Nortek, Inc.: 9.125% Sr. Nts., Series B, 9/1/07 1,400,000 1,438,500 9.25% Sr. Nts., Series B, 3/15/07 625,000 645,312 ------------ 3,370,812 - ------------------------------------------------------------------------------------------ INFORMATION TECHNOLOGY - 4.5% Amazon.Com, Inc., 0%/10% Sr. Disc. Nts., 5/1/08(4)(7) 1,500,000 918,750 - ------------------------------------------------------------------------------------------ Bell Technology Group Ltd., Units (each unit consists of $1,000 principal amount of 13% sr. nts., 5/1/05 and one warrant to purchase one share of common stock)(4)(10) 1,800,000 1,827,000 - ------------------------------------------------------------------------------------------ Concentric Network Corp., 12.75% Sr. Unsec. Nts., 12/15/07 625,000 664,062 - ------------------------------------------------------------------------------------------ Covad Communications Group, Inc., Units (each unit consists of $1,000 principal amount of 0%/13.50% sr. disc. nts., 3/15/08 and one warrant to purchase 6.4792 common shares)(4)(7)(10) 900,000 472,500 - ------------------------------------------------------------------------------------------ Details, Inc., 10% Sr. Sub. Nts., Series B, 11/15/05 1,125,000 1,125,000 - ------------------------------------------------------------------------------------------ Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 625,000 646,875 - ------------------------------------------------------------------------------------------ Exodus Communications, Inc., 11.25% Sr. Nts., 7/1/08(4) 865,000 868,784 - ------------------------------------------------------------------------------------------ ICG Services, Inc., 0%/10% Sr. Disc. Nts., 2/15/08(4)(7) 2,035,000 1,215,913 - ------------------------------------------------------------------------------------------ PSINet, Inc., 10% Sr. Unsec. Nts., Series B, 2/15/05 3,110,000 3,187,750 - ------------------------------------------------------------------------------------------ Tracor, Inc., 8.50% Sr. Sub. Nts., 3/1/07 375,000 408,750 - ------------------------------------------------------------------------------------------ Unisys Corp., 11.75% Sr. Nts., 10/15/04 275,000 318,656 - ------------------------------------------------------------------------------------------ Verio, Inc.: 10.375% Sr. Nts., 4/1/05(4) 1,480,000 1,528,100 13.50% Sr. Nts., 6/15/04(4) 385,000 442,750 - ------------------------------------------------------------------------------------------ WAM!Net, Inc., Units (each unit consists of $1,000 principal amount of 0%/13.25% sr. disc. nts., 3/1/05 and three warrants to purchase 6.03 shares of common stock)(4)(7)(10) 1,750,000 1,111,250 - ------------------------------------------------------------------------------------------ Wavetek Corp., 10.125% Sr. Sub. Nts., 6/15/07 500,000 522,500 ------------ 15,258,640 - ------------------------------------------------------------------------------------------ MANUFACTURING - 3.2% American Standard Cos., Inc., 7.625% Sr. Nts., 2/15/10 1,500,000 1,481,250 - ------------------------------------------------------------------------------------------ Burke Industries, Inc., 10% Sr. Sub. Nts., 8/15/07 400,000 404,000 - ------------------------------------------------------------------------------------------ Clark-Schwebel, Inc.: 10.50% Sr. Nts., 4/15/06 725,000 812,000 12.50% Debs., Series B, 7/15/07(2)(12) 620,000 660,300 - ------------------------------------------------------------------------------------------ Eagle-Picher Industries, Inc., 9.375% Sr. Sub. Nts., 3/1/08(4) 850,000 862,750 - ------------------------------------------------------------------------------------------ Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08(4) 635,000 635,000 - ------------------------------------------------------------------------------------------ Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 725,000 746,750 - ------------------------------------------------------------------------------------------ Insilco Corp., 10.25% Sr. Unsec. Sub. Nts., 8/15/07 850,000 892,500 - ------------------------------------------------------------------------------------------ International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 500,000 550,625
19 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ MANUFACTURING (CONTINUED) Maxxam Group, Inc., 0%/12.25% Sr. Sec. Disc. Nts., 8/1/03(7) $ 200,000 $ 210,500 - ------------------------------------------------------------------------------------------ Moll Industries, Inc., 10.50% Sr. Sub. Nts., 7/1/08(4) 560,000 574,000 - ------------------------------------------------------------------------------------------ Polymer Group, Inc.: 8.75% Sr. Sub. Nts., 3/1/08(4) 1,500,000 1,505,625 9% Sr. Sub. Nts., 7/1/07 450,000 457,313 - ------------------------------------------------------------------------------------------ Roller Bearing Co. of America, Inc., 9.625% Gtd. Sr. Sub. Nts., Series B, 6/15/07 560,000 575,400 - ------------------------------------------------------------------------------------------ Terex Corp., 8.875% Sr. Sub. Nts., 4/1/08(4) 630,000 622,125 ------------ 10,990,138 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-BROADCASTING - 1.7% Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 625,000 659,375 - ------------------------------------------------------------------------------------------ Chancellor Media Corp., 8.75% Gtd. Sr. Unsec. Sub. Nts., Series B, 6/15/07 975,000 1,018,875 - ------------------------------------------------------------------------------------------ Jacor Communications Co., 8% Sr. Sub. Nts., 2/15/10 1,180,000 1,197,700 - ------------------------------------------------------------------------------------------ Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 1,000,000 1,042,676 - ------------------------------------------------------------------------------------------ Radio One, Inc., 7% Sr. Sub. Nts., Series B, 5/15/04(11) 400,000 410,000 - ------------------------------------------------------------------------------------------ Sinclair Broadcast Group, Inc., 9% Gtd. Sr. Sub. Nts., 7/15/07 1,300,000 1,358,500 - ------------------------------------------------------------------------------------------ Spanish Broadcasting Systems, Inc., 11% Sr. Nts., 3/15/04 25,000 27,125 ------------ 5,714,251 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-CABLE/WIRELESS VIDEO - 4.2% Adelphia Communications Corp.: 10.50% Sr. Unsec. Nts., Series B, 7/15/04 340,000 373,150 8.375% Sr. Nts., Series B, 2/1/08 1,100,000 1,100,000 9.25% Sr. Nts., 10/1/02 390,000 406,575 9.875% Sr. Nts., Series B, 3/1/07 140,000 151,900 - ------------------------------------------------------------------------------------------ Cablevision Systems Corp. Holdings, Inc.: 10.50% Sr. Sub. Debs., 5/15/16 250,000 293,125 7.875% Sr. Debs., 2/15/18 1,000,000 1,057,500 9.875% Sr. Sub. Debs., 4/1/23 450,000 498,375 - ------------------------------------------------------------------------------------------ Cablevision Systems Corp. Holdings, Inc., 9.875% Sr. Sub. Nts., 5/15/06 550,000 603,625 - ------------------------------------------------------------------------------------------ EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04(7) 200,000 196,000 - ------------------------------------------------------------------------------------------ EchoStar DBS Corp., 12.50% Gtd. Sr. Nts., 7/1/02 1,585,000 1,771,238 - ------------------------------------------------------------------------------------------ EchoStar Satellite Broadcasting Corp., 0%/13.125% Sr. Sec. Disc. Nts., 3/15/04(7) 2,005,000 1,849,613 - ------------------------------------------------------------------------------------------ Falcon Holding Group LP: 0%/9.285% Sr. Disc. Debs., 4/15/10(4)(7) 1,000,000 652,500 8.375% Sr. Debs., 4/15/10(4) 2,025,000 2,035,125 - ------------------------------------------------------------------------------------------ Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B, 11/1/03(3) 885,000 951,375 - ------------------------------------------------------------------------------------------ Optel, Inc., 13% Sr. Nts., Series B, 2/15/05 1,020,000 1,127,100 - ------------------------------------------------------------------------------------------ Rogers Communications, Inc., 8.75% Sr. Nts., 7/15/07(CAD) 500,000 344,886 - ------------------------------------------------------------------------------------------ TCI Satellite Entertainment, Inc., 0%/12.25% Sr. Sub. Disc. Nts., 2/15/07(7) 425,000 289,000 - ------------------------------------------------------------------------------------------ United International Holdings, Inc., 0%/10.75% Sr. Disc. Nts., Series B, 2/15/08(7) 1,040,000 644,800 ------------ 14,345,887 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-DIVERSIFIED MEDIA - 2.0% Chancellor Media Corp., 10.50% Sr. Sub. Nts., Series B, 1/15/07 450,000 502,875 - ------------------------------------------------------------------------------------------ GSP I Corp., 10.15% First Mtg. Bonds, 6/24/10(4) 457,873 457,837
20 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-DIVERSIFIED MEDIA (CONTINUED) Hollywood Theaters, Inc., 10.625% Sr. Sub. Nts., 8/1/07 $ 225,000 $ 234,000 - ------------------------------------------------------------------------------------------ Imax Corp., 10% Sr. Nts., 3/1/01 1,600,000 1,674,000 - ------------------------------------------------------------------------------------------ Lamar Advertising Co.: 8.625% Sr. Sub. Nts., 9/15/07 1,225,000 1,260,219 9.625% Sr. Sub. Nts., 12/1/06 815,000 876,125 - ------------------------------------------------------------------------------------------ SFX Entertainment, Inc., 9.125% Sr. Sub. Nts., 2/1/08(4) 1,800,000 1,773,000 ------------ 6,778,056 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-TELECOMMUNICATIONS - 9.9% COLT Telecom Group plc: 0%/12% Sr. Unsec. Disc. Nts., 12/15/06(7) 225,000 180,000 10.125% Sr. Nts., 11/30/07(GBP) 400,000 720,360 8.875% Sr. Nts., 11/30/07(DEM) 250,000 152,378 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)(7)(10) 1,775,000 1,766,125 - ------------------------------------------------------------------------------------------ Convergent Communications, Inc., Units (each unit consists of $1,000 principal amount of 13% sr. nts., 4/1/08 and four warrants to purchase 10.8 shares of common stock)(4)(10) 800,000 772,000 - ------------------------------------------------------------------------------------------ Diamond Cable Communications plc, 0%/11.75% Sr. Disc. Nts., 12/15/05(7) 2,100,000 1,743,000 - ------------------------------------------------------------------------------------------ Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08(4) 400,000 417,000 - ------------------------------------------------------------------------------------------ DTI Holdings, Inc., Units (each unit consists of $1,000 principal amount of 0%/12.50% sr. disc. nts., 3/1/08 and five warrants to purchase 7.76 shares of common stock)(4)(6)(7) 1,250,000 681,250 - ------------------------------------------------------------------------------------------ e.spire Communications, Inc., 13.75% Sr. Nts., 7/15/07(12) 725,000 830,125 - ------------------------------------------------------------------------------------------ FaciliCom International, Inc., 10.50% Sr. Nts., 1/15/08(4) 1,325,000 1,311,750 - ------------------------------------------------------------------------------------------ Firstworld Communications, Inc., Units (each unit consists of $1,000 principal amount of 0%/13% sr. disc. nts., 4/15/08 and one warrant to purchase 7.9002 shares of series b common stock)(4)(7)(10) 1,875,000 834,375 - ------------------------------------------------------------------------------------------ Focal Communications Corp., 0%/12.125% Sr. Disc. Nts., 2/15/08(4)(7) 1,820,000 1,094,275 - ------------------------------------------------------------------------------------------ Global Crossing Holdings Ltd., 9.625% Sr. Nts., 5/15/08(4) 750,000 784,688 - ------------------------------------------------------------------------------------------ GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub. Disc. Nts., 12/15/05(4)(7) 178,000 144,403 - ------------------------------------------------------------------------------------------ GST Telecommunications, Inc., 12.75% Sr. Sub. Nts., 11/15/07 1,000,000 1,175,000 - ------------------------------------------------------------------------------------------ ICG Holdings, Inc.: 0%/12.50% Gtd. Sr. Disc. Nts., 5/1/06(7) 115,000 90,275 0%/13.50% Sr. Disc. Nts., 9/15/05(7) 1,025,000 871,250 - ------------------------------------------------------------------------------------------ Intermedia Communications, Inc.: 0%/11.25% Sr. Disc. Nts., Series B, 7/15/07(7) 500,000 368,125 8.50% Sr. Nts., Series B, 1/15/08 925,000 929,625 8.60% Sr. Nts., 6/1/08(4) 1,000,000 1,017,500 8.875% Sr. Nts., 11/1/07 460,000 472,650 - ------------------------------------------------------------------------------------------ ITC Deltacom, Inc.: 11% Sr. Nts., 6/1/07 750,000 849,375 8.875% Sr. Nts., 3/1/08 1,000,000 1,025,000 - ------------------------------------------------------------------------------------------ KMC Telecom Holdings, Inc., Units (each unit consists of $1,000 principal amount of 0%/12.50% sr. disc. nts., 2/15/08 and one warrant to purchase .21785 ordinary shares)(4)(7)(10) 2,455,000 1,436,175 - ------------------------------------------------------------------------------------------ Level 3 Communications, Inc., 9.125% Sr. Nts., 5/1/08(4) 1,350,000 1,321,313
21 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-TELECOMMUNICATIONS (CONTINUED) Long Distance International, Inc., Units (each unit consists of $1,000 principal amount of 12.25% sr. nts., 4/15/08 and one warrant to purchase 15.0874 shares of common stock)(4)(10) $ 800,000 $ 796,000 - ------------------------------------------------------------------------------------------ McLeodUSA, Inc.: 0%/10.50% Sr. Disc. Nts., 3/1/07(7) 270,000 202,500 8.375% Sr. Nts., 3/15/08(4) 665,000 669,988 - ------------------------------------------------------------------------------------------ Metronet Communications Corp., 0%/9.95% Sr. Disc.Nts., 6/15/08(4)(7) 475,000 296,281 - ------------------------------------------------------------------------------------------ Netia Holdings BV, 0%/11% Gtd. Sr. Disc. Nts., 11/1/07(7)(DEM) 700,000 260,399 - ------------------------------------------------------------------------------------------ NEXTLINK Communications, Inc.: 0%/9.45% Sr. Disc. Nts., 4/15/08(4)(7) 2,000,000 1,232,500 9% Sr. Nts., 3/15/08(4) 800,000 804,000 9.625% Sr. Nts., 10/1/07 1,125,000 1,158,750 - ------------------------------------------------------------------------------------------ NTL, Inc.: 0%/10.875% Sr. Deferred Coupon Nts., 10/15/03(7) 100,000 99,500 10% Sr. Nts., 2/15/07 425,000 456,875 9.50% Sr. Unsub. Nts., Series REGS, 4/1/08(GBP) 1,000,000 1,646,657 - ------------------------------------------------------------------------------------------ Onepoint Communications Corp., Units (each unit consists of $1,000 principal amount of 14.50% sr. nts., 6/1/08 and one warrant to purchase one share of common stock @ $.01 per share)(4)(10) 540,000 510,300 - ------------------------------------------------------------------------------------------ Petersburg Long Distance, Inc., 9% Cv. Sub. Nts., 6/1/06(4) 170,000 178,500 - ------------------------------------------------------------------------------------------ Qwest Communications International, Inc., 0%/9.47% Sr. Disc. Nts., 10/15/07(7) 2,000,000 1,505,000 - ------------------------------------------------------------------------------------------ RSL Communications plc: 0%/10.125% Sr. Disc. Nts., 3/1/08(4)(7) 720,000 432,000 9.125% Sr. Nts., 3/1/08(4) 500,000 487,500 - ------------------------------------------------------------------------------------------ TeleWest Communications plc, 0%/11% Sr. Disc. Debs., 10/1/07(7) 790,000 659,650 - ------------------------------------------------------------------------------------------ Viatel, Inc.: Units (each unit consists of $1,000 principal amount of 0%/12.50% sr. disc. nts., 4/15/08 and .49 shares of series a preferred stock)(4)(7)(10) 1,000,000 610,000 Units (each unit consists of $1,000 principal amount of 11.25% sr. nts., and .483 shares of series a preferred stock)(4)(10) 580,000 609,000 ------------ 33,603,417 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-WIRELESS COMMUNICATIONS - 7.0% American Mobile Satellite Corp./AMSC Acquisition Co., Inc., Units (each unit consists of $1,000 principal amount of 12.25% sr. nts., 4/1/08 and one warrant to purchase 3.75749 shares of common stock)(4)(10) 875,000 826,875 - ------------------------------------------------------------------------------------------ Arch Communications, Inc., 12.75% Sr. Nts., 7/1/07(4) 400,000 404,500 - ------------------------------------------------------------------------------------------ CellNet Data Systems, Inc., 0%/14% Sr. Disc. Nts., 10/1/07(7) 2,319,000 1,298,640 - ------------------------------------------------------------------------------------------ Cellular Communications International, Inc., 0%/9.50% Bonds, 4/1/05(4)(7)(XEU) 2,750,000 2,181,418 - ------------------------------------------------------------------------------------------ Crown Castle International Corp., 0%/10.625% Sr. Unsec. Disc. Nts., 11/15/07(7) 940,000 646,250 - ------------------------------------------------------------------------------------------ Dobson Communications Corp., 11.75% Sr. Nts., 4/15/07(12) 240,000 258,000 - ------------------------------------------------------------------------------------------ Geotek Communications, Inc., 0%/15% Sr. Sec. Disc. Nts., Series B, 7/15/05(7) 226,000 19,210 - ------------------------------------------------------------------------------------------ Iridium LLC/Iridium Capital Corp., 13% Sr. Nts., Series A, 7/15/05 200,000 215,500 - ------------------------------------------------------------------------------------------ Microcell Telecommunications, Inc., 0%/14% Sr. Disc. Nts., Series B, 6/1/06(7) 870,000 650,325 - ------------------------------------------------------------------------------------------ Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(7) 300,000 233,250
22 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-WIRELESS COMMUNICATIONS (CONTINUED) Nextel Communications, Inc.: 0%/10.65% Sr. Disc. Nts., 9/15/07(7) $ 2,000,000 $ 1,355,000 0%/9.75% Sr. Disc. Nts., 10/31/07(7) 1,500,000 982,500 - ------------------------------------------------------------------------------------------ Omnipoint Corp., 11.625% Sr. Nts., Series A, 8/15/06 1,920,000 2,030,400 - ------------------------------------------------------------------------------------------ ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 1,200,000 1,365,000 - ------------------------------------------------------------------------------------------ Orbital Imaging Corp., 11.625% Sr. Nts., 3/1/05(4) 750,000 774,375 - ------------------------------------------------------------------------------------------ Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(7) 1,150,000 879,750 - ------------------------------------------------------------------------------------------ Pinnacle Holdings, Inc., 0%/10% Sr. Disc. Nts., 3/15/08(4)(7) 2,000,000 1,320,000 - ------------------------------------------------------------------------------------------ Price Communications Cellular Holdings, Inc., 0%/13.50% Sr. Disc. Nts., Series B, 8/1/07(7) 1,800,000 1,264,500 - ------------------------------------------------------------------------------------------ Price Communications Wireless, Inc.: 11.75% Sr. Sub. Nts., 7/15/07 425,000 469,625 9.125% Sr. Sec. Nts., 12/15/06(4) 800,000 803,000 - ------------------------------------------------------------------------------------------ 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)(7)(10) 1,000,000 535,000 - ------------------------------------------------------------------------------------------ Rural Cellular Corp., 9.625% Sr. Sub. Nts., 5/15/08(4) 2,100,000 2,110,500 - ------------------------------------------------------------------------------------------ SBA Communications Corp., 0%/12% Sr. Disc. Nts., 3/1/08(4)(7) 3,100,000 1,953,000 - ------------------------------------------------------------------------------------------ Spectrasite Holdings, Inc., 0%/12% Sr. Disc. Nts., 7/15/08(4)(7) 1,640,000 918,400 - ------------------------------------------------------------------------------------------ Sprint Spectrum LP/Sprint Spectrum Finance Corp.: 0%/12.50% Sr. Disc. Nts., 8/15/06(7) 400,000 343,000 11% Sr. Nts., 8/15/06 25,000 28,938 ------------ 23,866,956 - ------------------------------------------------------------------------------------------ METALS/MINERALS - 1.8% AK Steel Corp., 9.125% Sr. Nts., 12/15/06 1,440,000 1,512,000 - ------------------------------------------------------------------------------------------ Algoma Steel, Inc., 12.375% First Mtg. Nts., 7/15/05 700,000 787,500 - ------------------------------------------------------------------------------------------ Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01 320,000 344,800 - ------------------------------------------------------------------------------------------ Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., 5/15/08(4) 1,500,000 1,537,500 - ------------------------------------------------------------------------------------------ International Utility Structures, Inc., 10.75% Sr. Sub. Nts., 2/1/08(4) 400,000 410,000 - ------------------------------------------------------------------------------------------ Keystone Consolidated Industries, Inc., 9.625% Sr. Sec. Nts., 8/1/07 850,000 873,375 - ------------------------------------------------------------------------------------------ Metallurg, Inc., 11% Sr. Nts., 12/1/07 540,000 567,000 ------------ 6,032,175 - ------------------------------------------------------------------------------------------ RETAIL - 1.4% Boyds Collection Ltd., 9% Sr. Sub. Nts., 5/15/08(4) 1,030,000 1,035,150 - ------------------------------------------------------------------------------------------ Eye Care Centers of America, Inc.: 12% Sr. Nts., 10/1/03 630,000 680,400 9.125% Sr. Sub. Nts., 5/1/08(4) 910,000 910,000 - ------------------------------------------------------------------------------------------ Finlay Enterprises, Inc., 9% Debs., 5/1/08 480,000 483,600 - ------------------------------------------------------------------------------------------ Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 600,000 605,250 - ------------------------------------------------------------------------------------------ Home Interiors & Gifts, Inc., 10.125% Sr. Sub. Nts., 6/1/08(4) 600,000 615,750 - ------------------------------------------------------------------------------------------ Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 325,000 333,125 ------------ 4,663,275 - ------------------------------------------------------------------------------------------ SERVICE - 2.3% Allied Waste Industries, Inc., 0%/11.30% Sr. Disc. Nts., 6/1/07(7) 450,000 330,750
23 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ SERVICE (CONTINUED) Borg-Warner Security Corp., 9.625% Sr. Sub. Nts., 3/15/07 $ 125,000 $ 140,625 - ------------------------------------------------------------------------------------------ Coinstar, Inc., 0%/13% Sr. Disc. Nts., 10/1/06(7) 775,000 631,625 - ------------------------------------------------------------------------------------------ Comforce Operating, Inc., 12% Sr. Nts., Series B, 12/1/07 750,000 806,250 - ------------------------------------------------------------------------------------------ CTI Holdings SA, 0%/11.50% Sr. Nts., 4/15/08(4)(7) 1,000,000 560,000 - ------------------------------------------------------------------------------------------ Fisher Scientific International, Inc., 9% Sr. Unsec. Sub. Nts., 2/1/08 2,050,000 2,044,875 - ------------------------------------------------------------------------------------------ Newcor, Inc., 9.875% Sr. Sub. Nts., 3/1/08(4) 1,500,000 1,518,750 - ------------------------------------------------------------------------------------------ Protection One Alarm Monitoring, Inc.: 0%/13.625% Sr. Disc. Nts., 6/30/05(7) 400,000 452,000 6.75% Cv. Gtd. Sr. Sub. Nts., 9/15/03 950,000 1,109,125 - ------------------------------------------------------------------------------------------ SF Holdings Group, Inc., Units (each unit consists of $1,000 principal amount of 0%/12.75% sr. disc. nts., 3/15/08 and one warrant to purchase two shares of cl. c common stock)(4)(7)(10) 600,000 324,000 ------------ 7,918,000 - ------------------------------------------------------------------------------------------ TRANSPORTATION - 3.3% American Communication Lines LLC, 10.25% Bonds, 6/30/08(4) 650,000 661,375 - ------------------------------------------------------------------------------------------ Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., Series B, 7/15/07 500,000 507,500 - ------------------------------------------------------------------------------------------ Coach USA, Inc., 9.375% Gtd. Sr. Sub. Nts., Series B, 7/1/07 1,010,000 1,055,450 - ------------------------------------------------------------------------------------------ Collins & Aikman Products Co., 11.50% Gtd. Sr. Sub. Nts., 4/15/06 125,000 139,063 - ------------------------------------------------------------------------------------------ Golden Ocean Group Ltd., 10% Gtd. Sr. Unsec. Nts., 8/31/01(4) 240,000 186,000 - ------------------------------------------------------------------------------------------ Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 600,000 675,000 - ------------------------------------------------------------------------------------------ Key Plastics, Inc., 10.25% Sr. Sub. Nts., Series B, 3/15/07 25,000 26,125 - ------------------------------------------------------------------------------------------ Navigator Gas Transport plc: 10.50% First Priority Ship Mtg. Nts., 6/30/07(4) 1,175,000 1,230,813 Units (each unit consists of $1,000 principal amount of 12% second priority ship mtg. nts., 6/30/07 and 7.66 warrants)(4)(10) 500,000 567,500 - ------------------------------------------------------------------------------------------ Oxford Automotive, Inc., 10.125% Sr. Unsec. Sub. Nts., 6/15/07 1,525,000 1,578,375 - ------------------------------------------------------------------------------------------ Pacific & Atlantic Holdings, Inc., 11.50% First Preferred Ship Mtg. Nts., 5/30/08(4) 700,000 661,500 - ------------------------------------------------------------------------------------------ Sea Containers Ltd., 7.875% Sr. Nts., 2/15/08 1,500,000 1,496,250 - ------------------------------------------------------------------------------------------ Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts., Series B, 12/15/03(7) 2,600,000 2,431,000 ------------ 11,215,951 - ------------------------------------------------------------------------------------------ UTILITY - 1.6% Calpine Corp.: 10.50% Sr. Nts., 5/15/06 25,000 27,375 8.75% Sr. Nts., 7/15/07 545,000 562,713 - ------------------------------------------------------------------------------------------ El Paso Electric Co., 9.40% First Mtg. Bonds, Series E, 5/1/11 555,000 635,475 - ------------------------------------------------------------------------------------------ ESI Tractebel Acquisition Corp., 7.99% Bonds, 12/30/11(4) 1,000,000 1,017,494 - ------------------------------------------------------------------------------------------ Niagara Mohawk Power Corp., 7.75% Sr. Unsec. Nts., Series G, 10/1/08 2,400,000 2,475,000 - ------------------------------------------------------------------------------------------ US Xchange LLC, 15% Sr. Nts., 7/1/08(4) 800,000 820,000 ------------ 5,538,057 ------------ Total Corporate Bonds and Notes (Cost $222,847,827) 226,954,385
24 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------------------------------------ PREFERRED STOCKS - 6.5% - ------------------------------------------------------------------------------------------ CGA Group Ltd., Preferred Stock, Series A(2)(13) 62,000 $ 1,550,000 - ------------------------------------------------------------------------------------------ Chesapeake Energy Corp., 7% Cv. Cum. Preferred Stock(4) 29,575 1,253,241 - ------------------------------------------------------------------------------------------ Clark USA, Inc., 11.50% Sr. Cum. Exchangeable Preferred Stock(2)(12) 407 430,402 - ------------------------------------------------------------------------------------------ Concentric Network Corp., 13.50% Exchangeable Preferred Stock(4)(12) 500 496,250 - ------------------------------------------------------------------------------------------ Dobson Communications Corp., 12.25% Preferred Stock(4)(12) 1,028 1,071,690 - ------------------------------------------------------------------------------------------ e.spire Communications, Inc., 12.75% Jr. Redeemable Preferred Stock(12) 1,581 1,774,672 - ------------------------------------------------------------------------------------------ Eagle-Picher Holdings, Inc., Preferred Stock(2)(13) 8,000 466,000 - ------------------------------------------------------------------------------------------ EchoStar Communications Corp., 12.125% Sr. Redeemable Exchangeable Preferred Stock, Series B(2)(12) 771 861,592 - ------------------------------------------------------------------------------------------ El Paso Electric Co., 11.40% Preferred Stock, Series A(12) 9,571 1,050,417 - ------------------------------------------------------------------------------------------ Fidelity Federal Bank FSB Glendale California, l2% Non-Cum. Exchangeable Perpetual Preferred Stock, Series A(2) 20 545 - ------------------------------------------------------------------------------------------ Golden State Bancorp, 8.75% Cv. Preferred Stock, Series A 6,500 563,469 - ------------------------------------------------------------------------------------------ Hyperion Telecommunications, Inc., 12.875% Sr. Preferred Stock, Series B(12) 549 546,255 - ------------------------------------------------------------------------------------------ ICG Holdings, Inc., 14.25% Exchangeable Preferred Stock(2)(12) 247 300,722 - ------------------------------------------------------------------------------------------ Intermedia Communications, Inc., 13.50% Exchangeable Preferred Stock, Series B(2)(12) 742 874,632 - ------------------------------------------------------------------------------------------ Intermedia Communications, Inc., Depositary Shares Representing one one-hundredth 7% Cum. Cv. Jr. Preferred Stock, Series E, Non-Vtg.(4) 5,660 210,128 - ------------------------------------------------------------------------------------------ Nebco Evans Holdings Co., 11.25% Nts., 3/1/08(2)(12) 6,159 629,758 - ------------------------------------------------------------------------------------------ Nextel Communications, Inc., 11.125% Preferred Stock(4) 749 773,343 - ------------------------------------------------------------------------------------------ NEXTLINK Communications, Inc., 14% Sr. Exchangeable Preferred(12) 22,743 1,336,151 - ------------------------------------------------------------------------------------------ Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable Preferred Stock(4)(12) 40 393,000 - ------------------------------------------------------------------------------------------ Prime Retail, Inc., 8.50% Cv. Preferred Stock, Series B 14,245 292,023 - ------------------------------------------------------------------------------------------ PRIMEDIA, Inc.: 8.625% Preferred Stock 14,000 1,365,000 9.20% Preferred Stock, Series F 2,500 254,375 - ------------------------------------------------------------------------------------------ Rural Cellular Corp., 11.375% Sr. Exchangeable Preferred Stock(2)(12) 1,000 1,005,000 - ------------------------------------------------------------------------------------------ SD Warren Co., 14% Cum. Exchangeable Preferred Stock, Series B, Non-Vtg. 15,000 753,750 - ------------------------------------------------------------------------------------------ SF Holdings Group, Inc., Units (each unit consists of one share of preferred stock and 37 cl. c shares of common stock)(2)(10)(12) 196 1,749,300 - ------------------------------------------------------------------------------------------ SFX Broadcasting, Inc., 12.625% Cum., Series E, Non-Vtg.(12) 2,126 240,770 - ------------------------------------------------------------------------------------------ Spanish Broadcasting Systems, Inc., 14.25% Cum. Sr. Exchangeable Preferred Stock, Non-Vtg.(2)(12) 562 592,910 - ------------------------------------------------------------------------------------------ Walden Residential Properties, Inc.: 9.16% Cv. Preferred Stock, Series B 30,000 855,000 9.20% Sr. Preferred Stock 8,950 227,666 ------------ Total Preferred Stocks (Cost $21,590,147) 21,918,061
25 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------------------------------------ COMMON STOCKS - 0.5% - ------------------------------------------------------------------------------------------ Celcaribe SA(2)(13) 121,950 $ 548,775 - ------------------------------------------------------------------------------------------ Coinstar, Inc. 5,250 48,563 - ------------------------------------------------------------------------------------------ ECM Fund, L.P.I.(2) 150 132,750 - ------------------------------------------------------------------------------------------ Equitable Bag, Inc.(2)(13) 3,723 14,892 - ------------------------------------------------------------------------------------------ Gulfstream Holding, Inc.(13) 56 -- - ------------------------------------------------------------------------------------------ Horizon Group Properties, Inc.(13) 851 5,611 - ------------------------------------------------------------------------------------------ Intermedia Communications, Inc.(13) 140 5,871 - ------------------------------------------------------------------------------------------ Omnipoint Corp.(2)(13) 46,875 1,021,436 - ------------------------------------------------------------------------------------------ Optel, Inc.(2)(13) 945 9 ------------ Total Common Stocks (Cost $1,061,231) 1,777,907 UNITS - ------------------------------------------------------------------------------------------ RIGHTS, WARRANTS AND CERTIFICATES - 0.4% - ------------------------------------------------------------------------------------------ American Telecasting, Inc. Wts., Exp. 6/99(2) 6,000 60 - ------------------------------------------------------------------------------------------ Ames Department Stores, Inc., Litigation Trust(2) 39,658 397 - ------------------------------------------------------------------------------------------ Australis Holdings PTY Ltd., Australia Media Ltd. Wts., Exp. 5/00(2) 125 1 - ------------------------------------------------------------------------------------------ Capital Gaming International, Inc. Wts., Exp. 2/99 21,112 -- - ------------------------------------------------------------------------------------------ CellNet Data Systems, Inc. Wts., Exp. 10/07(2) 1,919 10,794 - ------------------------------------------------------------------------------------------ CGA Group Ltd. Wts., Exp. 12/49(2) 62,000 31,000 - ------------------------------------------------------------------------------------------ Clearnet Communications, Inc. Wts., Exp. 9/05(2) 660 2,939 - ------------------------------------------------------------------------------------------ Concentric Network Corp. Wts., Exp. 12/07 750 101,250 - ------------------------------------------------------------------------------------------ e.spire Communications, Inc. Wts., Exp. 11/05(2) 475 92,528 - ------------------------------------------------------------------------------------------ Foamex LP/JPS Automotive Corp. Wts., Exp. 7/99(2) 500 10,000 - ------------------------------------------------------------------------------------------ Geotek Communications, Inc. Wts., Exp. 7/05(2) 52,500 525 - ------------------------------------------------------------------------------------------ Gothic Energy Corp. Wts.: Exp. 1/03(2) 13,117 131 Exp. 9/04(2) 14,000 15,750 - ------------------------------------------------------------------------------------------ ICG Communications, Inc. Wts., Exp. 9/05(2) 5,940 175,307 - ------------------------------------------------------------------------------------------ IHF Capital, Inc. Wts., Exp. 11/99(2) 250 7,531 - ------------------------------------------------------------------------------------------ IHF Capital, Inc., Series I Wts., Exp. 11/99(2) 400 4,050 - ------------------------------------------------------------------------------------------ In-Flight Phone Corp. Wts., Exp. 8/02 950 -- - ------------------------------------------------------------------------------------------ Jewel Recovery LP, Participation Units of Limited Partners' Interest 2,360 -- - ------------------------------------------------------------------------------------------ Microcell Telecommunications, Inc. Wts., Exp. 6/06(2) 3,200 88,874 - ------------------------------------------------------------------------------------------ Omnipoint Corp. Wts., Exp. 11/00(2) 7,500 163,430 - ------------------------------------------------------------------------------------------ Orbital Imaging Corp. Wts., Exp. 3/05(2) 750 33,750 - ------------------------------------------------------------------------------------------ Orion Network Systems, Inc. Wts., Exp. 1/07(2) 800 12,100 - ------------------------------------------------------------------------------------------ Price Communications Corp. Wts., Exp. 8/07(2) 8,600 130,075 - ------------------------------------------------------------------------------------------ Protection One, Inc. Wts., Exp. 11/03(2) 28,000 350,000 - ------------------------------------------------------------------------------------------ Protection One, Inc. Wts., Exp. 6/05(2) 1,600 16,000 - ------------------------------------------------------------------------------------------ Trizec Hahn Corp. Wts., Exp. 7/99 3,970 12,419 - ------------------------------------------------------------------------------------------ United International Holdings, Inc. Wts., Exp. 11/99(2) 1,440 29,067 - ------------------------------------------------------------------------------------------ Venezuela Government Wts., Exp. 4/20 3,570 -- ------------ Total Rights, Warrants and Certificates (Cost $339,332) 1,287,978
26 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ STRUCTURED INSTRUMENTS - 9.1% - ------------------------------------------------------------------------------------------ AIG International, Inc., Goldman Sachs Commodity Excess Return Index Linked Nts., 5.79%, 11/30/99 $ 500,000 $ 440,834 - -------------------------------------------------------------------------------------------- Bank of America NT & SA (London Branch), Goldman Sachs Excess Return Commodity Index Linked Nts., 5.50%, 1/5/00 500,000 504,750 - -------------------------------------------------------------------------------------------- Bankers Trust, Lehman High Yield Index Nts., 8.438%, 8/5/98 2,500,000 2,484,875 - -------------------------------------------------------------------------------------------- Bear Stearns High Yield Composite Index Linked Nts., 9%: 2/5/99 1,500,000 1,500,600 8/10/98 15,000,000 15,619,500 - -------------------------------------------------------------------------------------------- Chase Manhattan Bank USA, National Assn., Chase Physical Commodity Excess Return Index Linked Nts., 5.875%, 11/30/99 500,000 458,800 - -------------------------------------------------------------------------------------------- Commercial Bank International SA, Energy Linked Nts., 7/1/99(6) 500,000 588,100 - -------------------------------------------------------------------------------------------- Goldman Sachs Group LP, High Yield Index Nts., 8%, 3/4/99 1,500,000 1,492,500 - -------------------------------------------------------------------------------------------- Morgan Guaranty Trust Co. of New York, Leveraged Nts. on The Emerging Markets Bond Index, 9.50%, 10/29/98 3,000,000 2,791,941 - -------------------------------------------------------------------------------------------- Shoshone Partners Loan Trust Sr. Nts.: 5/31/02 (representing a basket of reference loans and a total return swap between Chase Manhattan Bank and the Trust)(2) 3,000,000 3,000,000 9.719%, 4/28/02 (representing a basket of reference loans and a total return swap between Chase Manhattan Bank and the Trust)(2)(3) 2,000,000 2,214,712 ------------ Total Structured Instruments (Cost $30,560,000) 31,096,612 - -------------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 13.4% - -------------------------------------------------------------------------------------------- Repurchase agreement with Salomon Smith Barney Holdings, Inc., 5.90%, dated 6/30/98, to be repurchased at $45,507,457 on 7/1/98, collateralized by U.S. Treasury Bonds, 8.75%-10.625%, 2/15/15-2/15/19, with a value of $46,709,786 (Cost $45,500,000) 45,500,000 45,500,000 - -------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $334,254,757) 100.4% 341,540,046 - -------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.4) (1,422,143) -------------- ------------ NET ASSETS 100.0% $340,117,903 -------------- ------------ -------------- ------------
1. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: CAD - Canadian Dollar DEM - German Mark GBP - British Pound Sterling IDR - Indonesian Rupiah XEU - European Currency Units 2. Identifies issues considered to be illiquid or restricted - See Note 7 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 $85,549,065 or 25.15% of the Fund's net assets as of June 30, 1998. 5. Issuer is in default. 6. When-issued security to be delivered and settled after June 30, 1998. 27 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 7. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 8. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 9. Non-income producing - issuer is in default of interest payment. 10. 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. 11. Represents the current interest rate for an increasing rate security. 12. Interest or dividend is paid in kind. 13. Non-income producing security. See accompanying Notes to Financial Statements. 28 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ MORTGAGE-BACKED OBLIGATIONS - 45.5% - ------------------------------------------------------------------------------------------ GOVERNMENT AGENCY - 27.4% - ------------------------------------------------------------------------------------------ FHLMC/FNMA/SPONSORED - 21.6% 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 $ 3,208,430 Series 151, Cl. F, 9%, 5/15/21 1,000,000 1,067,022 Series 1541, Cl. H, 7%, 10/15/22 4,750,000 4,935,535 Series 1712, Cl. B, 6%, 3/15/09 1,000,000 993,430 Series 1714, Cl. M, 7%, 8/15/23 2,000,000 2,037,500 Gtd. Multiclass Mtg. Participation Certificates, 7%, 4/1/26 4,370,881 4,438,761 Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1914, Cl. G, 6.50%, 2/15/24 3,000,000 2,997,180 Interest-Only Stripped Mtg.-Backed Security, Series 177, Cl. B, 6.35%-7.28%, 7/1/26(2) 39,237,118 8,883,529 - ------------------------------------------------------------------------------------------ Federal Home Loan Mortgage Corp. - Government National Mortgage Assn., Gtd. Multiclass Mtg. Participation Certificates, Series 26, Cl. B, 6%, 5/25/15 6,499,999 6,384,918 - ------------------------------------------------------------------------------------------ Federal National Mortgage Assn.: 6.50%, 3/1/11 758,981 764,295 6.50%, 7/1/28-7/25/12(3) 32,975,000 33,005,849 7%, 4/1/04-11/1/25 1,218,050 1,233,402 7%, 7/1/12-8/25/27(3) 29,060,000 29,539,003 7.50%, 1/1/08-1/1/26 3,868,685 3,970,371 8%, 5/1/17 595,155 620,462 Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, 8.75%, 11/25/05 2,334,390 2,436,178 Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates: Trust 1989-17, Cl. E, 10.40%, 4/25/19 1,061,648 1,176,105 Trust 1997-25, Cl. B, 7%, 12/18/22 1,370,000 1,393,426 Trust G93-31, Cl. PN, 7%, 9/25/23 5,000,000 5,252,084 Interest-Only Stripped Mtg.-Backed Security, Trust 276, Cl. 2, 11.924%, 10/1/24(2) 19,577,416 5,148,249 Principal-Only Stripped Mtg.-Backed Security: Trust 277-C1, 6.843%, 4/1/27(4) 810,688 690,605 Trust 294, Cl. 1, 3.576%, 2/1/28(4) 4,022,499 3,171,489 ------------ 123,347,823 - ------------------------------------------------------------------------------------------ GNMA/GUARANTEED - 5.8% Government National Mortgage Assn.: 7%, 1/15/09-5/15/09 582,891 598,118 7%, 7/1/28(3) 18,425,000 18,718,694 7.50%, 7/15/26-6/15/27 13,355,830 13,734,495 ------------ 33,051,307 - ------------------------------------------------------------------------------------------ PRIVATE - 18.1% - ------------------------------------------------------------------------------------------ COMMERCIAL - 15.1% Asset Securitization Corp.: Commercial Mtg. Pass-Through Certificates: Series 1997-D5, Cl. A6, 7.18%, 2/14/41(5) 3,000,000 3,020,625 Series 1997-D5, Cl. B2, 6.93%, 2/14/41 5,400,000 4,814,437 Series 1997-MD7, Cl. A6, 7.97%, 1/13/30(5) 500,000 538,437
29 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ COMMERCIAL (CONTINUED) Asset Securitization Corp.: (Continued) Series 1998-MD6, Cl. A3, 6.979%, 3/15/30 $ 6,000,000 $ 6,270,937 Interest-Only Stripped Mtg.-Backed Security, Series 1997-D5, Cl. PS1, 1.367%, 2/14/41(2) 18,607,236 1,985,741 - ------------------------------------------------------------------------------------------ BKB Commercial Mortgage Trust, Commercial Mtg. Obligations, Series 1997-C1, Cl. C, 7.45%, 10/25/00(6) 815,000 815,255 - ------------------------------------------------------------------------------------------ Capital Lease Funding Securitization LP, Interest-Only Stripped Mtg.-Backed Security, Series 1997-CTL1, 10.611%, 6/22/24(2)(6) 32,063,182 1,516,589 - ------------------------------------------------------------------------------------------ Commercial Mortgage Acceptance Corp., Collateralized Mtg. Obligations, Series 1996-C1, Cl. D, 7.71%, 2/25/20(5)(6) 2,500,000 2,552,344 - ------------------------------------------------------------------------------------------ CRIIMI MAE Trust I, Collateralized Mtg. Obligations, Series 1996-C1, Cl. A2, 7.56%, 8/30/05(7) 2,000,000 2,020,625 - ------------------------------------------------------------------------------------------ CS First Boston Mortgage Securities Corp., Interest-Only Stripped Mtg.-Backed Security, Series 1998-C1, Cl. AX, 1.071%, 4/11/30(2) 25,250,000 1,994,750 - ------------------------------------------------------------------------------------------ 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 1,549,500 Cl. 2-E, 8.70%, 9/25/25(6) 1,500,000 1,563,750 - ------------------------------------------------------------------------------------------ First Union-Lehman Brothers Commercial Mortgage Trust, Interest-Only Stripped Mtg.-Backed Security: Series 1997-C1, 6.993%, 4/18/27(2) 8,158,602 598,829 Series 1997-C1, 7.319%, 4/18/27(2) 16,938,450 1,243,256 Series 1998-C2, 8.15%, 5/18/28(2) 30,000,000 1,366,992 Series 1998-C2, Cl. E, 6.778%, 11/15/35(2) 2,000,000 1,893,750 - ------------------------------------------------------------------------------------------ General Motors Acceptance Corp.: Collateralized Mtg. Obligations: Series 1997-C2, Cl. D, 7.192%, 1/15/08 3,500,000 3,550,312 Series 1998-C1, Cl. E, 7.153%, 3/15/11 3,500,000 3,568,906 Interest-Only Stripped Mtg.-Backed Security: Series 1997-C1, Cl. X, 7.956%, 7/15/27(2) 9,539,722 921,179 Series 1997-C1, Cl. X, 8.449%, 7/15/27(2) 19,177,825 1,851,859 - ------------------------------------------------------------------------------------------ GS Mortgage Securities Corp. II, Commercial Mtg. Pass-Through Certificates: Series 1997-CL1, Cl. F, 6.845%, 7/13/30 1,000,000 1,023,437 Series 1997-CL1, Cl. F, 7.823%, 7/13/30 4,000,000 4,117,500 - ------------------------------------------------------------------------------------------ Lehman Brothers Commercial Conduit Mortgage Trust, Interest-Only Stripped Mtg.-Backed Security, Series 1998-C1, Cl. IO, 8.841%, 2/18/28(2) 44,839,844 2,998,665 - ------------------------------------------------------------------------------------------ Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates: Series 1996-C1, Cl. D, 7.42%, 4/25/28 2,000,000 2,063,437 Series 1997-C2, Cl. D, 6.87%, 12/10/29(5) 4,000,000 4,050,000 - ------------------------------------------------------------------------------------------ Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates: Series 1996-C1, Cl. D-1, 7.438%, 2/15/28(5)(6) 1,000,000 1,036,875 Series 1997-RR, 7.67%, 4/30/39(6) 4,300,000 4,199,219 Series 1997-XL1, Cl. F, 7.414%, 10/3/30(5) 2,500,000 2,558,594 - ------------------------------------------------------------------------------------------ NationsCommercial Corp., NB Commercial Mtg. Pass-Through Certificates, Series-DMC: Cl. B, 8.562%, 8/12/11(6) 1,600,000 1,717,000 Cl. C, 8.921%, 8/12/11(6) 4,400,000 4,758,875
30 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ COMMERCIAL (CONTINUED) Potomac Gurnee Financial Corp., Commercial Mtg. Pass-Through Certificates, Series 1: Cl. C, 7.217%, 12/26/26(6) $ 250,000 $ 256,000 Cl. D, 7.683%, 12/21/26(6) 500,000 516,250 - ------------------------------------------------------------------------------------------ Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates: Series 1994-C1, Cl. C, 8%, 6/25/26 1,500,000 1,525,664 Series 1995-C1, Cl. D, 6.90%, 2/25/27 3,000,000 2,998,500 - ------------------------------------------------------------------------------------------ Structured Asset Securities Corp.: Commercial Mtg. Pass-Through Certificates, Series 1997-LLI, Cl. E, 7.30%, 10/20/34 4,000,000 4,111,250 Multiclass Pass-Through Certificates: Series 1996-C3, Cl. C, 7.375%, 6/25/30(5)(6) 3,000,000 3,044,062 Series 1996-CFL, Cl. D, 7.034%, 2/25/28 1,800,000 1,815,188 ------------ 86,428,589 - ------------------------------------------------------------------------------------------ MANUFACTURED HOUSING - 0.0% Green Tree Financial Corp., Series 1994-6, Cl. A3, 7.70%, 1/15/20 187,084 187,377 - ------------------------------------------------------------------------------------------ MULTI-FAMILY - 0.4% Countrywide Funding Corp., Mtg. Pass-Through Certificates, Series 1993-12, Cl. B1, 6.625%, 2/25/24 1,000,000 985,547 - ------------------------------------------------------------------------------------------ Merrill Lynch Trust, Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 43, Cl. E, 6.50%, 8/27/15 500,000 501,560 - ------------------------------------------------------------------------------------------ Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1991-M5, Cl. A, 9%, 3/25/17 796,662 796,725 ------------ 2,283,832 - ------------------------------------------------------------------------------------------ OTHER - 0.0% GE Capital Mortgage Services, Inc., Series 1994-14, Cl. A1, 6.50%, 4/25/24(6) 18,515 18,446 - ------------------------------------------------------------------------------------------ Salomon Brothers Mortgage Securities VI, Interest-Only Stripped Mtg.-Backed Security, Series 1987-3: Cl. B, 7.102%, 10/23/17(2) 90,042 25,226 Cl. A, Zero Coupon, 8.864%, 10/23/17(4) 32,228 26,871 Cl. A, 8.864%, 10/23/17(4) 97,383 81,194 ------------ 151,737 - ------------------------------------------------------------------------------------------ RESIDENTIAL - 2.6% CS First Boston Mortgage Securities Corp., Mtg. Pass-Through Certificates, Series 1997-C1, Cl. E, 7.50%, 3/1/11(6) 5,006,000 5,298,851 - ------------------------------------------------------------------------------------------ First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates, Series 1997-CHL1, 8.129%, 7/25/06(5)(6) 4,024,000 4,255,380 - ------------------------------------------------------------------------------------------ Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates: Series 1997-HF1, Cl. E, 7.55%, 7/15/29(6) 1,500,000 1,540,313 Series 1997-WF1, Cl. E, 7.49%, 5/15/09(6) 1,000,000 1,028,750 - ------------------------------------------------------------------------------------------ NationsBank Trust, Lease Pass-Through Certificates, Series 1997A-1, 7.442%, 1/10/11(5) 2,500,000 2,630,469 - ------------------------------------------------------------------------------------------ Ryland Mortgage Securities Corp. III, Sub. Bonds, Series 1992-A, Cl. 1A, 8.23%, 3/29/30(5) 328,791 333,621 ------------ 15,087,384 ------------ Total Mortgage-Backed Obligations (Cost $261,742,762) 260,538,049
31 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ U.S. GOVERNMENT OBLIGATIONS - 25.5% - ------------------------------------------------------------------------------------------ U.S. Treasury Bonds: 10.375%, 11/15/09 $ 500,000 $ 625,626 10.375%, 11/15/12 500,000 669,844 12.75%, 11/15/10 1,000,000 1,425,313 7.25%, 5/15/16 33,000,000 38,682,204 9.25%, 2/15/16 8,300,000 11,552,571 - ------------------------------------------------------------------------------------------ U.S. Treasury Nts.: 5.75%, 11/30/02 3,667,000 3,697,942 6.375%, 8/15/02 14,250,000 14,686,421 6.50%, 10/15/06 8,840,000 9,392,509 6.625%, 5/15/07 4,000,000 4,300,004 6.75%, 6/30/99(8) 22,150,000 22,419,964 7.25%, 5/15/04 1,000,000 1,085,313 7.25%, 8/15/04 13,665,000 14,877,782 7.50%, 11/15/01 19,400,000 20,551,894 9.25%, 8/15/98(8) 2,000,000 2,010,002 ------------ Total U.S. Government Obligations (Cost $139,612,602) 145,977,389 - ------------------------------------------------------------------------------------------ FOREIGN GOVERNMENT OBLIGATIONS - 0.1% - ------------------------------------------------------------------------------------------ Ontario, Canada (Province of) Bonds, 8%, 10/17/01 750,000 796,432 - ------------------------------------------------------------------------------------------ PT Hutama Karya Medium-Term Nts., Zero Coupon, 3/17/99(6)(9)(IDR) 1,000,000,000 16,892 ------------ Total Foreign Government Obligations (Cost $1,102,252) 813,324 - ------------------------------------------------------------------------------------------ LOAN PARTICIPATIONS - 0.2% - ------------------------------------------------------------------------------------------ Colombia (Republic of) 1989-1990 Integrated Loan Facility Bonds, 6.688%, 7/1/01(5)(6) (Cost $888,005) 928,319 891,187 - ------------------------------------------------------------------------------------------ MUNICIPAL BONDS AND NOTES - 0.9% - ------------------------------------------------------------------------------------------ Dade Cnty., FL Educational Facilities Authority Exchangeable Revenue Bonds, University of Miami, Prerefunded, MBIA Insured, 7.65%, 4/1/10 175,000 189,441 - ------------------------------------------------------------------------------------------ Dade Cnty., FL Educational Facilities Authority Revenue Bonds, University of Miami, MBIA Insured, 7.65%, 4/1/10 205,000 221,168 - ------------------------------------------------------------------------------------------ Dade Cnty., FL Educational Facilities Authority Taxable Exchange Revenue Bonds, University of Miami, MBIA Insured, 7.65%, 4/1/10 120,000 129,465 - ------------------------------------------------------------------------------------------ Pinole, CA Redevelopment Agency Tax Allocation Taxable Bonds, Pinole Vista Redevelopment, Series B, 8.35%, 8/1/17 670,000 710,629 - ------------------------------------------------------------------------------------------ Port of Portland, OR Special Obligation Taxable Revenue Bonds, PAMCO Project, 9.20%, 5/15/22 500,000 624,150 - ------------------------------------------------------------------------------------------ Virgin Islands Public Finance Authority Taxable Revenue Refunding Bonds, Sr. Lien Loan Nts., Series B, 6.99%, 10/1/01 3,265,000 3,287,071 ------------ Total Municipal Bonds and Notes (Cost $4,928,437) 5,161,924 - ------------------------------------------------------------------------------------------ CORPORATE BONDS AND NOTES - 38.3% - ------------------------------------------------------------------------------------------ AEROSPACE - 0.5% Atlas Air, Inc., 8.01% Nts., 1/2/10(7) 3,000,000 3,018,543
32 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ CHEMICALS - 0.1% ClimaChem, Inc., 10.75% Gtd. Sr. Unsec. Nts., Series B, 12/1/07 $ 300,000 $ 314,250 - ------------------------------------------------------------------------------------------ CONSUMER DURABLES - 0.2% Toro Co., 7.125% Nts., 6/15/07 1,000,000 1,044,577 - ------------------------------------------------------------------------------------------ CONSUMER NON-DURABLES - 1.3% AKI Holdings, Inc., 10.50% Sr. Nts., 7/1/08(7) 300,000 303,000 - ------------------------------------------------------------------------------------------ Fruit of the Loom, Inc., 7% Debs., 3/15/11 1,097,000 1,031,009 - ------------------------------------------------------------------------------------------ Harman International Industries, Inc., 7.32% Nts., 7/1/07 5,000,000 5,081,015 - ------------------------------------------------------------------------------------------ Procter & Gamble Co., 9.36% Debs., Series A, 1/1/21 500,000 664,904 - ------------------------------------------------------------------------------------------ Styling Technology Corp., 10.875% Sr. Sub. Nts., 7/1/08(7) 500,000 510,000 ------------ 7,589,928 - ------------------------------------------------------------------------------------------ ENERGY - 5.8% BP America, Inc., 10.875% Unsec. Unsub. Nts., 8/1/01(CAD) 1,000,000 776,499 - ------------------------------------------------------------------------------------------ Coastal Corp., 8.75% Sr. Nts., 5/15/99 500,000 511,137 - ------------------------------------------------------------------------------------------ Colorado International Gas Corp., 10% Sr. Debs., 6/15/05 500,000 608,070 - ------------------------------------------------------------------------------------------ Eastern Energy Ltd., 6.75% Sr. Nts., 12/1/06(7) 2,000,000 2,056,552 - ------------------------------------------------------------------------------------------ Enron Corp., 9.875% Debs., 6/15/03 375,000 433,967 - ------------------------------------------------------------------------------------------ ENSCO International, Inc.: 6.75% Nts., 11/15/07 5,000,000 5,082,575 7.20% Debs., 11/15/27 3,000,000 3,123,900 - ------------------------------------------------------------------------------------------ Enterprise Oil plc, 6.70% Sr. Nts., 9/15/07 4,000,000 4,121,120 - ------------------------------------------------------------------------------------------ Global Marine, Inc., 7.125% Nts., 9/1/07 8,000,000 8,386,648 - ------------------------------------------------------------------------------------------ Gothic Production Corp., 11.125% Sr. Sec. Nts., 5/1/05(7) 300,000 288,750 - ------------------------------------------------------------------------------------------ HNG Internorth/Enron Corp., 9.625% Debs., 3/15/06 500,000 605,742 - ------------------------------------------------------------------------------------------ McDermott, Inc., 9.375% Nts., 3/15/02 400,000 430,199 - ------------------------------------------------------------------------------------------ Mitchell Energy & Development Corp., 9.25% Sr. Nts., 1/15/02 55,000 60,085 - ------------------------------------------------------------------------------------------ Ocean Rig Norway AS, 10.25% Gtd. Sr. Sec. Nts., 6/1/08(7) 400,000 382,000 - ------------------------------------------------------------------------------------------ P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., 5/15/08(7) 1,000,000 1,032,500 - ------------------------------------------------------------------------------------------ Saga Petroleum ASA, 7.25% Debs., 9/23/27 1,000,000 1,038,201 - ------------------------------------------------------------------------------------------ Talisman Energy, Inc., 7.25% Debs., 10/15/27 2,500,000 2,620,690 - ------------------------------------------------------------------------------------------ Texaco Capital, Inc., 8.875% Gtd. Debs., 9/1/21 500,000 652,962 - ------------------------------------------------------------------------------------------ TransCanada PipeLines Ltd., 9.875% Debs., 1/1/21 750,000 1,023,120 ------------ 33,234,717 - ------------------------------------------------------------------------------------------ FINANCIAL - 12.9% Aeltus CBO II Ltd./Aeltus CBO II Corp., 7.982% Sr. Sec. Sub. Bonds, 8/6/09(7) 5,000,000 5,025,000 - ------------------------------------------------------------------------------------------ Aetna Services, Inc., 7.125% Nts., 8/15/06 1,000,000 1,043,574 - ------------------------------------------------------------------------------------------ Allmerica Capital I, 8.207% Debs., 2/3/27 2,000,000 2,304,660 - ------------------------------------------------------------------------------------------ American General Finance Corp., 5.875% Sr. Nts., 7/1/00 196,000 195,725 - ------------------------------------------------------------------------------------------ BankAmerica Corp., 7.75% Sub. Nts., 7/15/02 750,000 795,499 - ------------------------------------------------------------------------------------------ Banque Centrale de Tunisie, 7.50% Nts., 9/19/07 900,000 870,352 - ------------------------------------------------------------------------------------------ Chase Manhattan Corp. (New), 10.125% Sub. Nts., 11/1/00 750,000 816,457
33 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ FINANCIAL (CONTINUED) Citicorp Capital I, 7.933% Gtd. Bonds, 2/15/27 $ 2,000,000 $ 2,179,044 - ------------------------------------------------------------------------------------------ CNA Financial Corp., 6.25% Nts., 11/15/03 2,195,000 2,189,840 - ------------------------------------------------------------------------------------------ Equity Office Properties Operating LP, 6.625% Sr. Nts., 2/15/05(7) 1,000,000 999,769 - ------------------------------------------------------------------------------------------ First Chicago Corp.: 11.25% Sub. Nts., 2/20/01 750,000 843,993 9% Sub. Nts., 6/15/99 150,000 154,133 - ------------------------------------------------------------------------------------------ Fleet Mtg. Group, Inc., 6.50% Nts., 9/15/99 500,000 503,158 - ------------------------------------------------------------------------------------------ Ford Motor Credit Co., 6.75% Nts., 8/15/08 1,000,000 1,036,828 - ------------------------------------------------------------------------------------------ Household Finance Corp.: 6.40% Sr. Unsec. Unsub. Nts., Series EMTN, 6/17/08 2,000,000 2,002,918 8.95% Debs., 9/15/99 500,000 516,335 - ------------------------------------------------------------------------------------------ Household International BV, 6% Gtd. Sr. Nts., 3/15/99 131,000 131,426 - ------------------------------------------------------------------------------------------ HSBC Americas Capital Trust II, 8.38% Capital Securities, 5/15/27(7) 3,000,000 3,313,305 - ------------------------------------------------------------------------------------------ Lehman Brothers Holdings, Inc., 6.625% Sr. Sub. Nts., 2/15/08 3,000,000 3,038,487 - ------------------------------------------------------------------------------------------ Liberty Mutual Insurance Co., 7.697% Nts., 10/15/2097(7) 7,000,000 7,739,263 - ------------------------------------------------------------------------------------------ Long Island Savings Bank, 6.20% Nts., 4/2/01 4,000,000 4,007,960 - ------------------------------------------------------------------------------------------ Lumbermens Mutual Casualty Co., 8.30% Surplus Nts., 12/1/37(7) 2,000,000 2,217,948 - ------------------------------------------------------------------------------------------ Merrill Lynch & Co., Inc.: 6.56% Nts., 12/16/07 2,000,000 2,046,742 6.875% Nts., 3/1/03 750,000 775,023 - ------------------------------------------------------------------------------------------ Metropolitan Life Insurance Co., 6.30% Nts., 11/1/03(7) 3,000,000 2,995,650 - ------------------------------------------------------------------------------------------ Morgan Stanley Dean Witter & Co., 7% Debs., 10/1/13 1,000,000 1,061,661 - ------------------------------------------------------------------------------------------ Norsk Hydro AS, 8.75% Bonds, 10/23/01 1,000,000 1,075,000 - ------------------------------------------------------------------------------------------ Penske Truck Leasing Co. LP, 7.75% Sr. Nts., 5/15/99 1,000,000 1,015,133 - ------------------------------------------------------------------------------------------ Prudential Insurance Co. of America: 6.875% Nts., 4/15/03(7) 3,000,000 3,077,238 8.30% Nts., 7/1/25(7) 3,000,000 3,474,135 - ------------------------------------------------------------------------------------------ Rank Group Finance plc, 6.75% Gtd. Nts., 11/30/04 3,000,000 3,047,901 - ------------------------------------------------------------------------------------------ Salomon Smith Barney Holdings, Inc., 6.25% Bonds, 1/15/05 3,000,000 3,000,945 - ------------------------------------------------------------------------------------------ Salomon, Inc., 7.30% Nts., 5/15/02 1,000,000 1,040,893 - ------------------------------------------------------------------------------------------ SunAmerica, Inc.: 9% Sr. Nts., 1/15/99 196,000 198,857 9.95% Debs., 2/1/12 3,000,000 3,824,532 - ------------------------------------------------------------------------------------------ Travelers Group, Inc., 6.875% Debs., 2/15/2098 1,000,000 1,021,418 - ------------------------------------------------------------------------------------------ U.S. Leasing International, Inc., 6.625% Sr. Nts., 5/15/03 750,000 767,966 - ------------------------------------------------------------------------------------------ Washington Mutual Capital I, 8.375% Gtd. Bonds, 6/1/27 3,000,000 3,331,011 ------------ 73,679,779 - ------------------------------------------------------------------------------------------ FOOD & DRUG - 0.3% Fleming Cos., Inc., 10.625% Sr. Sub. Nts., Series B, 7/31/07 1,000,000 1,047,500 - ------------------------------------------------------------------------------------------ Pathmark Stores, Inc., 0%/10.75% Jr. Sub. Deferred Coupon Nts., 11/1/03(10) 850,000 718,250 ------------ 1,765,750
34 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ FOOD/TOBACCO - 0.4% Aurora Foods, Inc., 8.75% Sr. Sub. Nts., 7/1/08(7) $ 300,000 $ 303,375 - ------------------------------------------------------------------------------------------ Bass America, Inc., 6.75% Gtd. Nts., 8/1/99 750,000 758,404 - ------------------------------------------------------------------------------------------ Coca-Cola Enterprises, Inc., 6.95% Debs., 11/15/26 1,000,000 1,051,620 ------------ 2,113,399 - ------------------------------------------------------------------------------------------ FOREST PRODUCTS/CONTAINERS - 0.8% Boise Cascade Corp., 9.90% Nts., 3/15/00 750,000 789,388 - ------------------------------------------------------------------------------------------ Fletcher Challenge Capital Canada, Inc., 7.75% Nts., 6/20/06 1,800,000 1,932,196 - ------------------------------------------------------------------------------------------ Potlatch Corp., 9.46% Medium-Term Nts., 4/2/02 500,000 557,807 - ------------------------------------------------------------------------------------------ Scotia Pacific Holding Co., 7.95% Timber Collateralized Nts., 7/20/15 1,365,263 1,441,243 ------------ 4,720,634 - ------------------------------------------------------------------------------------------ GAMING/LEISURE - 0.8% Circus Circus Enterprises, Inc., 6.75% Nts., 7/15/03 375,000 362,773 - ------------------------------------------------------------------------------------------ Hilton Hotels Corp., 7.95% Sr. Nts., 4/15/07 4,000,000 4,173,660 - ------------------------------------------------------------------------------------------ Premier Parks, Inc., 0%/10% Sr. Disc. Nts., 4/1/08(10) 300,000 200,625 ------------ 4,737,058 - ------------------------------------------------------------------------------------------ HEALTHCARE - 0.2% Roche Holdings, Inc., 2.75% Bonds, 4/14/00 1,250,000 1,189,844 - ------------------------------------------------------------------------------------------ INFORMATION TECHNOLOGY - 0.2% PSINet, Inc., 10% Sr. Unsec. Nts., Series B, 2/15/05 1,000,000 1,025,000 - ------------------------------------------------------------------------------------------ MANUFACTURING - 0.3% Moll Industries, Inc., 10.50% Sr. Sub. Nts., 7/1/08(7) 250,000 256,250 - ------------------------------------------------------------------------------------------ Tenneco, Inc. (New): 10.20% Debs., 3/15/08 400,000 520,667 8.075% Nts., 10/1/02 650,000 695,595 ------------ 1,472,512 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-BROADCASTING - 0.7% Time Warner, Inc., 6.95% Debs., 1/15/28 4,000,000 4,067,644 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-CABLE/WIRELESS VIDEO - 1.4% Comcast Cable Communications, Inc., 8.125% Unsec. Nts., 5/1/04 5,000,000 5,443,085 - ------------------------------------------------------------------------------------------ TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 2,200,000 2,410,641 ------------ 7,853,726 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-DIVERSIFIED MEDIA - 3.3% GSP I Corp., 10.15% First Mtg. Bonds, 6/24/10(7) 1,098,897 1,098,810 - ------------------------------------------------------------------------------------------ Reed Elsevier, Inc., 6.625% Nts., 10/15/23(7) 600,000 610,950 - ------------------------------------------------------------------------------------------ Reed Publishing (USA), Inc., 7.66% Medium-Term Nts., 2/19/99 500,000 504,783 - ------------------------------------------------------------------------------------------ Time Warner Entertainment Co. LP, 8.375% Sr. Debs., 3/15/23 1,295,000 1,520,439 - ------------------------------------------------------------------------------------------ Time Warner, Inc., 9.15% Debs., 2/1/23 12,000,000 15,270,120 ------------ 19,005,102 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-TELECOMMUNICATIONS - 0.7% Cable & Wire Communications plc, 6.625% Nts., 3/6/05 1,000,000 1,019,179 - ------------------------------------------------------------------------------------------ Intermedia Communications, Inc., 8.60% Sr. Nts., 6/1/08(7) 1,000,000 1,017,500
35 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-TELECOMMUNICATIONS (CONTINUED) Onepoint Communications Corp., Units (each unit consists of $1,000 principal amount of 14.50% sr. nts., 6/1/08 and one warrant to purchase one share of common stock @ $.01 per share)(7)(11) $ 200,000 $ 189,000 - ------------------------------------------------------------------------------------------ Shaw Communications, Inc., 8.54% Debs., 9/30/27(CAD) 3,000,000 2,049,183 ------------ 4,274,862 - ------------------------------------------------------------------------------------------ MEDIA/ENTERTAINMENT-WIRELESS COMMUNICATIONS - 1.1% Arch Communications, Inc., 12.75% Sr. Nts., 7/1/07(7) 400,000 404,500 - ------------------------------------------------------------------------------------------ Price Communications Wireless, Inc., 9.125% Sr. Sec. Nts., 12/15/06(7) 1,000,000 1,003,750 - ------------------------------------------------------------------------------------------ SBA Communications Corp., 0%/12% Sr. Disc. Nts., 3/1/08(7)(10) 700,000 441,000 - ------------------------------------------------------------------------------------------ Spectrasite Holdings, Inc., 0%/12% Sr. Disc. Nts., 7/15/08(7)(10) 600,000 336,000 - ------------------------------------------------------------------------------------------ U.S. Cellular Corp., 7.25% Nts., 8/15/07 4,000,000 4,133,536 ------------ 6,318,786 - ------------------------------------------------------------------------------------------ METALS/MINERALS - 0.1% Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., 5/15/08(7) 750,000 768,750 - ------------------------------------------------------------------------------------------ RETAIL - 1.5% Eye Care Centers of America, Inc., 9.125% Sr. Sub. Nts., 5/1/08(7) 250,000 250,000 - ------------------------------------------------------------------------------------------ Neiman Marcus Group, Inc., 6.65% Sr. Nts., 6/1/08 3,000,000 3,029,907 - ------------------------------------------------------------------------------------------ Staples, Inc., 7.125% Sr. Nts., 8/15/07 5,000,000 5,199,280 ------------ 8,479,187 - ------------------------------------------------------------------------------------------ SERVICE - 1.6% Archer Daniels Midland Co., 7.125% Debs., 3/1/13 750,000 807,025 - ------------------------------------------------------------------------------------------ Arvin Industries, Inc., 6.75% Nts., 3/15/08 2,500,000 2,515,728 - ------------------------------------------------------------------------------------------ Clear Channel Communications, Inc., 6.625% Nts., 6/15/08 3,000,000 2,981,367 - ------------------------------------------------------------------------------------------ Williams Cos., Inc., 6.125% Sec. Nts., 2/15/02 3,000,000 3,004,080 ------------ 9,308,200 - ------------------------------------------------------------------------------------------ TRANSPORTATION - 1.7% Chrysler Corp., 7.40% Debs., 8/1/2097 2,000,000 2,166,534 - ------------------------------------------------------------------------------------------ Johnson Controls, Inc., 7.70% Debs., 3/1/15 500,000 560,839 - ------------------------------------------------------------------------------------------ Kansas City Southern Industries, Inc., 6.625% Nts., 3/1/05 750,000 770,265 - ------------------------------------------------------------------------------------------ UAL Corp., 9.125% Debs., 1/15/12 5,000,000 6,084,010 - ------------------------------------------------------------------------------------------ Union Pacific Corp., 9.65% Medium-Term Nts., 4/17/00 400,000 424,248 ------------ 10,005,896 - ------------------------------------------------------------------------------------------ UTILITY - 2.4% Alltel Corp., 6.50% Debs., 11/1/13 1,000,000 1,019,231 - ------------------------------------------------------------------------------------------ Cleveland Electric Illuminating Co./Toledo Edison Co., 7.13% Sec. Nts., Series B, 7/1/07 3,000,000 3,185,739 - ------------------------------------------------------------------------------------------ Consolidated Natural Gas Co., 6.625% Debs., 12/1/13 1,000,000 1,038,186 - ------------------------------------------------------------------------------------------ GTE Corp., 9.375% Debs., 12/1/00 500,000 536,349 - ------------------------------------------------------------------------------------------ Long Island Lighting Co., 7% Nts., 3/1/04 150,000 156,789 - ------------------------------------------------------------------------------------------ National Fuel Gas Co., 7.75% Debs., 2/1/04 500,000 534,166 - ------------------------------------------------------------------------------------------ Northern Telecom Ltd., 6.875% Nts., 10/1/02 500,000 517,660
36 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------------------------------ UTILITY (CONTINUED) Public Service Co. of Colorado, 8.75% First Mtg. Bonds, 3/1/22 $ 750,000 $ 825,419 - ------------------------------------------------------------------------------------------ South Carolina Electric & Gas Co., 9% Mtg. Bonds, 7/15/06 500,000 587,173 - ------------------------------------------------------------------------------------------ TE Products Pipeline Co., 6.45% Sr. Nts., 1/15/08 4,000,000 4,004,940 - ------------------------------------------------------------------------------------------ Texas Gas Transmission Corp., 8.625% Nts., 4/1/04 500,000 559,350 - ------------------------------------------------------------------------------------------ Washington Gas Light Co., 8.75% First Mtg. Bonds, 7/1/19 500,000 511,289 ------------ 13,476,291 ------------ Total Corporate Bonds and Notes (Cost $212,739,309) 219,464,435 SHARES - ------------------------------------------------------------------------------------------ PREFERRED STOCKS - 0.5% - ------------------------------------------------------------------------------------------ Allstate Financing I, 7.95% Gtd. Quarterly Income Preferred Securities, Series A (Cost $3,000,000) 120,000 3,067,500 PRINCIPAL AMOUNT(1) - ------------------------------------------------------------------------------------------ STRUCTURED INSTRUMENTS - 1.3% - ------------------------------------------------------------------------------------------ Bayerische Landesbank Girozentrale (New York Branch) Lehman High Yield Index Nts., 8.50%, 3/8/99 $ 6,000,000 6,000,000 - ------------------------------------------------------------------------------------------ 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)(11) 1,000,000 1,166,500 ------------ Total Structured Instruments (Cost $7,100,540) 7,166,500 - ------------------------------------------------------------------------------------------ REPURCHASE AGREEMENTS - 2.7% - ------------------------------------------------------------------------------------------ Repurchase agreement with Salomon Smith Barney Holdings, Inc., 5.90%, dated 6/30/98, to be repurchased at $15,202,491 on 7/1/98, collateralized by U.S. Treasury Bonds, 8.75%-10.625%, 2/15/15-2/15/19, with a value of $15,604,148 (Cost $15,200,000) 15,200,000 15,200,000 - ------------------------------------------------------------------------------------------ TOTAL INVESTMENTS, AT VALUE (COST $646,313,907) 115.0% 658,280,308 - ------------------------------------------------------------------------------------------ LIABILITIES IN EXCESS OF OTHER ASSETS (15.0) (85,684,219 ) -------------- ------------ NET ASSETS 100.0% $572,596,089 -------------- ------------ -------------- ------------
1. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: CAD - Canadian Dollar IDR - Indonesian Rupiah 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 June 30, 1998. 37 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 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 $44,101,663 or 7.70% of the Fund's net assets as of June 30, 1998. 8. Securities with an aggregate market value of $2,313,570 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 9. Issuer is in default. 10. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 11. Units may be comprised of several components, such as debt and equity and/or warrants to purchase equity at some point in the future. For units which represent debt securities, principal amount disclosed represents total underlying principal. See accompanying Notes to Financial Statements. 38 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER AGGRESSIVE GROWTH FUND STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
MARKET VALUE SHARES NOTE 1 - ----------------------------------------------------------------------------------------- COMMON STOCKS - 96.9% - ----------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 20.7% - ----------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 5.9% Landry's Seafood Restaurants, Inc.(1) 340,000 $ 6,151,875 - ----------------------------------------------------------------------------------------- Outback Steakhouse, Inc.(1) 200,000 7,800,000 - ----------------------------------------------------------------------------------------- Premier Parks, Inc.(1) 158,400 10,553,400 - ----------------------------------------------------------------------------------------- Royal Caribbean Cruises Ltd. 244,400 19,429,800 - ----------------------------------------------------------------------------------------- SFX Entertainment, Inc., Cl. A(1) 145,000 6,651,875 - ----------------------------------------------------------------------------------------- Starbucks Corp.(1) 250,000 13,359,375 -------------- 63,946,325 - ----------------------------------------------------------------------------------------- MEDIA - 0.5% Young & Rubicam, Inc.(1) 186,300 5,961,600 - ----------------------------------------------------------------------------------------- RETAIL: GENERAL - 4.5% CVS Corp. 640,000 24,920,000 - ----------------------------------------------------------------------------------------- Jones Apparel Group, Inc.(1) 379,200 13,864,500 - ----------------------------------------------------------------------------------------- Kohl's Corp.(1) 200,000 10,375,000 -------------- 49,159,500 - ----------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 9.8% Ethan Allen Interiors, Inc. 150,000 7,490,625 - ----------------------------------------------------------------------------------------- Fred Meyer, Inc.(1) 220,000 9,350,000 - ----------------------------------------------------------------------------------------- General Nutrition Cos., Inc. 500,000 15,562,500 - ----------------------------------------------------------------------------------------- Guitar Center, Inc.(1) 40,000 1,205,000 - ----------------------------------------------------------------------------------------- Linens 'N Things, Inc.(1) 644,000 19,682,250 - ----------------------------------------------------------------------------------------- Lowe's Cos., Inc. 600,000 24,337,500 - ----------------------------------------------------------------------------------------- Pier 1 Imports, Inc. 280,000 6,685,000 - ----------------------------------------------------------------------------------------- Restoration Hardware, Inc.(1) 83,500 2,097,937 - ----------------------------------------------------------------------------------------- Stage Stores, Inc.(1) 270,000 12,217,500 - ----------------------------------------------------------------------------------------- TJX Cos., Inc. 340,000 8,202,500 -------------- 106,830,812 - ----------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 14.2% - ----------------------------------------------------------------------------------------- FOOD - 1.0% Twinlab Corp.(1) 255,000 11,140,312 - ----------------------------------------------------------------------------------------- HEALTHCARE/DRUGS - 1.8% BioChem Pharma, Inc.(1) 360,000 9,540,000 - ----------------------------------------------------------------------------------------- Biogen, Inc.(1) 150,000 7,350,000 - ----------------------------------------------------------------------------------------- CliniChem Development, Inc. 9,000 51,750 - ----------------------------------------------------------------------------------------- Incyte Pharmaceuticals, Inc. 62,800 2,143,050 -------------- 19,084,800 - ----------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 10.1% Cardinal Health, Inc. 200,000 18,750,000 - ----------------------------------------------------------------------------------------- Covance, Inc.(1) 300,000 6,750,000
39 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER AGGRESSIVE GROWTH FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ----------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES (CONTINUED) HEALTHSOUTH Corp.(1) 595,000 $ 15,879,062 - ----------------------------------------------------------------------------------------- McKesson Corp. 170,000 13,812,500 - ----------------------------------------------------------------------------------------- Medical Manager Corp.(1) 104,400 2,884,050 - ----------------------------------------------------------------------------------------- Orthodontic Centers of America, Inc.(1) 350,000 7,328,125 - ----------------------------------------------------------------------------------------- Quintiles Transnational Corp.(1) 200,000 9,837,500 - ----------------------------------------------------------------------------------------- Total Renal Care Holdings, Inc.(1) 995,008 34,327,776 -------------- 109,569,013 - ----------------------------------------------------------------------------------------- HOUSEHOLD GOODS - 1.3% Blyth Industries, Inc.(1) 410,800 13,659,100 - ----------------------------------------------------------------------------------------- ENERGY - 2.7% - ----------------------------------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 2.7% Coflexip SA, Sponsored ADR 85,000 5,195,625 - ----------------------------------------------------------------------------------------- Global Industries Ltd.(1) 400,000 6,750,000 - ----------------------------------------------------------------------------------------- Halliburton Co. 200,000 8,912,500 - ----------------------------------------------------------------------------------------- Santa Fe International Corp. 180,000 5,445,000 - ----------------------------------------------------------------------------------------- Stolt Comex Seaway SA(1) 117,500 2,276,562 - ----------------------------------------------------------------------------------------- Stolt Comex Seaway SA, ADR(1) 58,750 1,028,125 -------------- 29,607,812 - ----------------------------------------------------------------------------------------- FINANCIAL - 7.3% - ----------------------------------------------------------------------------------------- BANKS - 2.1% Fifth Third Bancorp 127,800 8,051,400 - ----------------------------------------------------------------------------------------- National Commerce Bancorp 95,300 3,990,687 - ----------------------------------------------------------------------------------------- Providian Financial Corp. 145,000 11,391,562 -------------- 23,433,649 - ----------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 4.5% Affiliated Managers Group, Inc.(1) 190,000 7,053,750 - ----------------------------------------------------------------------------------------- Amvescap plc, Sponsored ADR 150,000 7,368,750 - ----------------------------------------------------------------------------------------- Associates First Capital Corp., Cl. A 216,000 16,605,000 - ----------------------------------------------------------------------------------------- Finova Group, Inc. 150,000 8,493,750 - ----------------------------------------------------------------------------------------- Freddie Mac 205,000 9,647,812 -------------- 49,169,062 - ----------------------------------------------------------------------------------------- INSURANCE - 0.7% MBIA, Inc. 97,030 7,265,121 - ----------------------------------------------------------------------------------------- INDUSTRIAL - 11.5% - ----------------------------------------------------------------------------------------- INDUSTRIAL SERVICES - 8.5% AccuStaff, Inc.(1) 330,000 10,312,500 - ----------------------------------------------------------------------------------------- Affiliated Computer Services, Inc., Cl. A(1) 200,000 7,700,000 - ----------------------------------------------------------------------------------------- Allied Waste Industries, Inc.(1) 654,300 15,703,200 - ----------------------------------------------------------------------------------------- American Disposal Services, Inc.(1) 297,900 13,964,063 - ----------------------------------------------------------------------------------------- Central Parking Corp. 26,200 1,192,100 - ----------------------------------------------------------------------------------------- CIBER, Inc.(1) 402,600 15,298,800
40 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER AGGRESSIVE GROWTH FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ----------------------------------------------------------------------------------------- INDUSTRIAL SERVICES (CONTINUED) U.S. Rentals, Inc.(1) 181,500 $ 7,157,906 - ----------------------------------------------------------------------------------------- United Rentals, Inc.(1) 100,000 4,200,000 - ----------------------------------------------------------------------------------------- USA Waste Services, Inc.(1) 344,600 17,014,625 -------------- 92,543,194 - ----------------------------------------------------------------------------------------- MANUFACTURING - 3.0% Tyco International Ltd. 525,000 33,075,000 - ----------------------------------------------------------------------------------------- TECHNOLOGY - 39.4% - ----------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 1.0% Gulfstream Aerospace Corp.(1) 242,200 11,262,300 - ----------------------------------------------------------------------------------------- COMPUTER HARDWARE - 3.6% Dell Computer Corp.(1) 100,000 9,281,250 - ----------------------------------------------------------------------------------------- EMC Corp.(1) 150,000 6,721,875 - ----------------------------------------------------------------------------------------- Telxon Corp. 397,500 12,869,063 - ----------------------------------------------------------------------------------------- Waters Corp.(1) 175,000 10,314,063 -------------- 39,186,251 - ----------------------------------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 24.1% Aspen Technologies, Inc.(1) 125,700 6,347,850 - ----------------------------------------------------------------------------------------- AXENT Technologies, Inc.(1) 65,000 1,990,625 - ----------------------------------------------------------------------------------------- Cambridge Technology Partners, Inc.(1) 486,600 26,580,525 - ----------------------------------------------------------------------------------------- Cap Gemini SA 116,666 18,290,734 - ----------------------------------------------------------------------------------------- Citrix Systems, Inc.(1) 360,000 24,615,000 - ----------------------------------------------------------------------------------------- Compuware Corp.(1) 340,000 17,382,500 - ----------------------------------------------------------------------------------------- Electronic Arts, Inc.(1) 200,000 10,800,000 - ----------------------------------------------------------------------------------------- Harbinger Corp.(1) 327,250 7,915,359 - ----------------------------------------------------------------------------------------- HBO & Co. 760,000 26,790,000 - ----------------------------------------------------------------------------------------- I2 Technologies, Inc.(1) 225,000 7,903,125 - ----------------------------------------------------------------------------------------- JDA Software Group, Inc.(1) 420,000 18,375,000 - ----------------------------------------------------------------------------------------- Lernout & Hauspie Speech Products NV(1) 317,600 18,956,750 - ----------------------------------------------------------------------------------------- Microsoft Corp.(1) 75,000 8,128,125 - ----------------------------------------------------------------------------------------- Network Associates, Inc.(1) 300,000 14,362,500 - ----------------------------------------------------------------------------------------- Peoplesoft, Inc.(1) 150,000 7,050,000 - ----------------------------------------------------------------------------------------- Saville Systems Ireland plc, Sponsored ADR(1) 450,000 22,556,250 - ----------------------------------------------------------------------------------------- Sungard Data Systems, Inc.(1) 150,000 5,756,250 - ----------------------------------------------------------------------------------------- Visio Corp.(1) 380,500 18,168,875 -------------- 261,969,468 - ----------------------------------------------------------------------------------------- ELECTRONICS - 2.1% Sanmina Corp.(1) 260,000 11,277,500 - ----------------------------------------------------------------------------------------- Vitesse Semiconductor Corp.(1) 370,000 11,423,750 -------------- 22,701,250 - ----------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 8.6% Ascend Communications, Inc.(1) 200,000 9,912,500
41 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER AGGRESSIVE GROWTH FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ----------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY (CONTINUED) Broadcom Corp., Cl. A(1) 4,500 $ 331,313 - ----------------------------------------------------------------------------------------- CIENA Corp.(1) 225,000 15,665,625 - ----------------------------------------------------------------------------------------- Cisco Systems, Inc. 75,000 6,904,688 - ----------------------------------------------------------------------------------------- Nextel Communications, Inc., Cl. A(1) 400,000 9,950,000 - ----------------------------------------------------------------------------------------- Northern Telecom Ltd. 150,000 8,512,500 - ----------------------------------------------------------------------------------------- Tellabs, Inc.(1) 170,000 12,176,250 - ----------------------------------------------------------------------------------------- Uniphase Corp.(1) 223,000 14,000,219 - ----------------------------------------------------------------------------------------- WinStar Communications, Inc.(1) 380,000 16,316,250 -------------- 93,769,345 - ----------------------------------------------------------------------------------------- UTILITIES - 1.1% - ----------------------------------------------------------------------------------------- TELEPHONE UTILITIES - 1.1% Qwest Communications International, Inc.(1) 116,610 4,066,774 - ----------------------------------------------------------------------------------------- WorldCom, Inc.(1) 155,000 7,507,813 -------------- 11,574,587 -------------- Total Common Stocks (Cost $748,434,098) 1,054,908,501 - ----------------------------------------------------------------------------------------- PREFERRED STOCKS - 0.8% - ----------------------------------------------------------------------------------------- L & H Capital Trust, Inc., 4.75% Cv. Preferred Income Equity Redeemable Securities(2) (Cost $6,695,000) 132,500 8,446,875 PRINCIPAL AMOUNT - ----------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 1.0% - ----------------------------------------------------------------------------------------- Comverse Technology, Inc., 4.50% Cv. Sub. Nts., 7/1/05(3) $ 5,000,000 5,093,750 - ----------------------------------------------------------------------------------------- Concentra Managed Care, Inc., 4.50% Cv. Sub. Nts., 3/15/03(2) 2,300,000 2,075,750 - ----------------------------------------------------------------------------------------- United Waste Systems, Inc., 4.50% Cv. Sub. Nts., 6/1/01 2,000,000 3,362,500 -------------- Total Corporate Bonds and Notes (Cost $9,300,000) 10,532,000 - ----------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 2.6% - ----------------------------------------------------------------------------------------- Repurchase agreement with Salomon Smith Barney Holdings, Inc., 5.90%, dated 6/30/98, to be repurchased at $28,004,589 on 7/1/98, collateralized by U.S. Treasury Bonds, 8.75%-10.625%, 2/15/15-2/15/19, with a value of $28,744,483 (Cost $28,000,000) 28,000,000 28,000,000 - ----------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $792,429,098) 101.3% 1,101,887,376 - ----------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (1.3) (13,943,749) ----------- -------------- NET ASSETS 100.0% $1,087,943,627 ----------- -------------- ----------- --------------
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 $10,522,625 or 0.97% of the Fund's net assets as of June 30, 1998. 3. Identifies issues considered to be illiquid or restricted - See Note 5 of Notes to Financial Statements. See accompanying Notes to Financial Statements. 42 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- COMMON STOCKS - 87.4% - --------------------------------------------------------------------------------------- BASIC MATERIALS - 2.8% - --------------------------------------------------------------------------------------- CHEMICALS - 2.8% Crompton & Knowles Corp. 100,200 $ 2,523,787 - --------------------------------------------------------------------------------------- Dexter Corp. 27,800 884,387 - --------------------------------------------------------------------------------------- Du Pont (E.I.) De Nemours & Co. 35,000 2,611,875 - --------------------------------------------------------------------------------------- Ferro Corp. 85,000 2,151,562 - --------------------------------------------------------------------------------------- Morton International, Inc. 139,000 3,475,000 - --------------------------------------------------------------------------------------- PPG Industries, Inc. 95,000 6,608,437 ------------ 18,255,048 - --------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 19.6% - --------------------------------------------------------------------------------------- AUTOS & HOUSING - 4.9% Arvin Industries, Inc. 49,300 1,790,206 - --------------------------------------------------------------------------------------- Boston Properties, Inc. 88,200 3,042,900 - --------------------------------------------------------------------------------------- Budget Group, Inc., Cl. A(1) 238,600 7,620,287 - --------------------------------------------------------------------------------------- Centex Corp. 136,000 5,134,000 - --------------------------------------------------------------------------------------- Hertz Corp., Cl. A 65,000 2,880,312 - --------------------------------------------------------------------------------------- Magna International, Inc., Cl. A 22,000 1,509,750 - --------------------------------------------------------------------------------------- Pulte Corp. 44,000 1,314,500 - --------------------------------------------------------------------------------------- Republic Industries, Inc.(1) 206,000 5,150,000 - --------------------------------------------------------------------------------------- Toll Brothers, Inc.(1) 120,000 3,442,500 ------------ 31,884,455 - --------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 4.0% Callaway Golf Co. 147,700 2,907,844 - --------------------------------------------------------------------------------------- Carnival Corp., Cl. A 290,000 11,491,250 - --------------------------------------------------------------------------------------- CKE Restaurants, Inc. 120,000 4,950,000 - --------------------------------------------------------------------------------------- Delta Air Lines, Inc. 23,100 2,985,675 - --------------------------------------------------------------------------------------- Harrah's Entertainment, Inc.(1) 70,000 1,627,500 - --------------------------------------------------------------------------------------- Time Warner, Inc. 30,000 2,563,125 ------------ 26,525,394 - --------------------------------------------------------------------------------------- MEDIA - 2.8% Belo (A.H.) Corp., Cl. A 98,200 2,393,625 - --------------------------------------------------------------------------------------- New York Times Co. 78,000 6,181,500 - --------------------------------------------------------------------------------------- Omnicom Group, Inc. 135,000 6,733,125 - --------------------------------------------------------------------------------------- Young & Rubicam, Inc.(1) 97,200 3,110,400 ------------ 18,418,650 - --------------------------------------------------------------------------------------- RETAIL: GENERAL - 5.5% CVS Corp. 300,000 11,681,250 - --------------------------------------------------------------------------------------- Dayton Hudson Corp. 68,000 3,298,000 - --------------------------------------------------------------------------------------- Federated Department Stores, Inc.(1) 60,000 3,228,750
43 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- RETAIL: GENERAL (CONTINUED) Jones Apparel Group, Inc.(1) 153,000 $ 5,594,062 - --------------------------------------------------------------------------------------- Tommy Hilfiger Corp.(1) 111,800 6,987,500 - --------------------------------------------------------------------------------------- WestPoint Stevens, Inc.(1) 154,400 5,095,200 ------------ 35,884,762 - --------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 2.4% Ethan Allen Interiors, Inc. 80,000 3,995,000 - --------------------------------------------------------------------------------------- Gap, Inc. 35,500 2,187,687 - --------------------------------------------------------------------------------------- Intimate Brands, Inc., Cl. A 45,000 1,240,312 - --------------------------------------------------------------------------------------- Nine West Group, Inc.(1) 100,500 2,694,656 - --------------------------------------------------------------------------------------- Tiffany & Co. 30,000 1,440,000 - --------------------------------------------------------------------------------------- TJX Cos., Inc. 184,000 4,439,000 ------------ 15,996,655 - --------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 13.2% - --------------------------------------------------------------------------------------- FOOD - 4.4% Hershey Foods Corp. 20,000 1,380,000 - --------------------------------------------------------------------------------------- Keebler Foods Co.(1) 100,400 2,761,000 - --------------------------------------------------------------------------------------- Kroger Co.(1) 79,000 3,387,125 - --------------------------------------------------------------------------------------- McCormick & Co., Inc., Non-Vtg. 94,900 3,389,709 - --------------------------------------------------------------------------------------- Richfood Holdings, Inc. 92,200 1,907,387 - --------------------------------------------------------------------------------------- Safeway, Inc.(1) 310,000 12,613,125 - --------------------------------------------------------------------------------------- Smithfield Foods, Inc.(1) 82,000 2,501,000 - --------------------------------------------------------------------------------------- U.S. Foodservice, Inc.(1) 27,600 967,725 ------------ 28,907,071 - --------------------------------------------------------------------------------------- HEALTHCARE/DRUGS - 3.2% Lilly (Eli) & Co. 40,000 2,642,500 - --------------------------------------------------------------------------------------- Pfizer, Inc. 85,000 9,238,437 - --------------------------------------------------------------------------------------- Schering-Plough Corp. 102,800 9,419,050 ------------ 21,299,987 - --------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 3.9% Baxter International, Inc. 53,000 2,852,062 - --------------------------------------------------------------------------------------- Becton, Dickinson & Co. 51,000 3,958,875 - --------------------------------------------------------------------------------------- First Health Group Corp.(1) 157,600 4,491,600 - --------------------------------------------------------------------------------------- HEALTHSOUTH Corp.(1) 88,000 2,348,500 - --------------------------------------------------------------------------------------- Lincare Holdings, Inc.(1) 70,000 2,944,375 - --------------------------------------------------------------------------------------- Medtronic, Inc. 45,000 2,868,750 - --------------------------------------------------------------------------------------- Minimed, Inc.(1) 46,800 2,451,150 - --------------------------------------------------------------------------------------- Total Renal Care Holdings, Inc.(1) 101,750 3,510,375 ------------ 25,425,687 - --------------------------------------------------------------------------------------- HOUSEHOLD GOODS - 1.1% Avon Products, Inc. 90,000 6,975,000
44 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- TOBACCO - 0.6% Philip Morris Cos., Inc. 62,000 $ 2,441,250 - --------------------------------------------------------------------------------------- RJR Nabisco Holdings Corp. 63,000 1,496,250 ------------ 3,937,500 - --------------------------------------------------------------------------------------- ENERGY - 2.9% - --------------------------------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 1.9% BJ Services Co.(1) 50,000 1,453,125 - --------------------------------------------------------------------------------------- Coflexip SA, Sponsored ADR 42,200 2,579,475 - --------------------------------------------------------------------------------------- Global Industries Ltd.(1) 45,100 761,062 - --------------------------------------------------------------------------------------- Halliburton Co. 101,800 4,536,462 - --------------------------------------------------------------------------------------- Varco International, Inc.(1) 166,200 3,292,837 ------------ 12,622,961 - --------------------------------------------------------------------------------------- OIL-INTEGRATED - 1.0% Mobil Corp. 18,200 1,394,575 - --------------------------------------------------------------------------------------- Texaco, Inc. 29,000 1,730,937 - --------------------------------------------------------------------------------------- Total SA, Sponsored ADR 55,000 3,595,625 ------------ 6,721,137 - --------------------------------------------------------------------------------------- FINANCIAL - 16.1% - --------------------------------------------------------------------------------------- BANKS - 5.1% Banc One Corp. 124,488 6,947,998 - --------------------------------------------------------------------------------------- BankBoston Corp. 30,000 1,668,750 - --------------------------------------------------------------------------------------- Chase Manhattan Corp. (New) 31,280 2,361,640 - --------------------------------------------------------------------------------------- Credito Italiano SpA 1,265,000 6,621,937 - --------------------------------------------------------------------------------------- Fleet Financial Group, Inc. 35,000 2,922,500 - --------------------------------------------------------------------------------------- Greenpoint Financial Corp. 20,000 752,500 - --------------------------------------------------------------------------------------- NationsBank Corp. 45,125 3,452,063 - --------------------------------------------------------------------------------------- Skandinaviska Enskilda Banken Group 160,000 2,738,576 - --------------------------------------------------------------------------------------- Star Banc Corp. 50,500 3,225,688 - --------------------------------------------------------------------------------------- State Street Corp. 39,200 2,724,400 - --------------------------------------------------------------------------------------- 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) 9,500 280,250 ------------ 33,696,302 - --------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 7.1% Associates First Capital Corp., Cl. A 70,000 5,381,250 - --------------------------------------------------------------------------------------- CMAC Investment Corp. 52,800 3,247,200 - --------------------------------------------------------------------------------------- Fannie Mae 36,000 2,187,000 - --------------------------------------------------------------------------------------- Finova Group, Inc. 60,800 3,442,800 - --------------------------------------------------------------------------------------- Franklin Resources, Inc. 71,200 3,844,800 - --------------------------------------------------------------------------------------- Freddie Mac 60,000 2,823,750 - --------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc. 65,000 5,996,250 - --------------------------------------------------------------------------------------- Morgan Stanley Dean Witter & Co. 40,200 3,673,275
45 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL (CONTINUED) Price (T. Rowe) Associates, Inc. 61,000 $ 2,291,313 - --------------------------------------------------------------------------------------- Schwab (Charles) Corp. 30,000 975,000 - --------------------------------------------------------------------------------------- Travelers Group, Inc. 208,499 12,640,252 ------------ 46,502,890 - --------------------------------------------------------------------------------------- INSURANCE - 3.9% Conseco, Inc. 173,000 8,087,750 - --------------------------------------------------------------------------------------- Equitable Cos., Inc. 82,000 6,144,875 - --------------------------------------------------------------------------------------- Life Re Corp. 60,500 4,961,000 - --------------------------------------------------------------------------------------- Progressive Corp. 15,000 2,115,000 - --------------------------------------------------------------------------------------- SunAmerica, Inc. 78,500 4,508,844 ------------ 25,817,469 - --------------------------------------------------------------------------------------- INDUSTRIAL - 6.2% - --------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 0.6% Emerson Electric Co. 45,000 2,716,875 - --------------------------------------------------------------------------------------- General Electric Co. 14,000 1,274,000 ------------ 3,990,875 - --------------------------------------------------------------------------------------- INDUSTRIAL MATERIALS - 1.3% Owens-Illinois, Inc.(1) 42,800 1,915,300 - --------------------------------------------------------------------------------------- Rayonier, Inc. 32,400 1,490,400 - --------------------------------------------------------------------------------------- Southdown, Inc. 70,300 5,017,663 ------------ 8,423,363 - --------------------------------------------------------------------------------------- INDUSTRIAL SERVICES - 0.7% AccuStaff, Inc.(1) 116,000 3,625,000 - --------------------------------------------------------------------------------------- Corrections Corp. of America(1) 55,000 1,292,500 ------------ 4,917,500 - --------------------------------------------------------------------------------------- MANUFACTURING - 2.4% American Standard Cos., Inc.(1) 58,400 2,609,750 - --------------------------------------------------------------------------------------- Cooper Industries, Inc. 43,000 2,362,313 - --------------------------------------------------------------------------------------- Herman Miller, Inc. 120,000 2,917,500 - --------------------------------------------------------------------------------------- Illinois Tool Works, Inc. 49,000 3,267,688 - --------------------------------------------------------------------------------------- Tyco International Ltd. 75,000 4,725,000 ------------ 15,882,251 - --------------------------------------------------------------------------------------- TRANSPORTATION - 1.2% Kansas City Southern Industries, Inc. 153,000 7,592,625 - --------------------------------------------------------------------------------------- TECHNOLOGY - 24.4% - --------------------------------------------------------------------------------------- COMPUTER HARDWARE - 5.9% Compaq Computer Corp. 235,000 6,668,125 - --------------------------------------------------------------------------------------- Dell Computer Corp.(1) 65,000 6,032,813 - --------------------------------------------------------------------------------------- EMC Corp.(1) 98,000 4,391,625 - --------------------------------------------------------------------------------------- Gateway 2000, Inc.(1) 115,600 5,852,250 - --------------------------------------------------------------------------------------- Seagate Technology, Inc.(1) 180,000 4,286,250
46 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- COMPUTER HARDWARE (CONTINUED) Sun Microsystems, Inc.(1) 68,000 $ 2,953,750 - --------------------------------------------------------------------------------------- Waters Corp.(1) 100,000 5,893,750 - --------------------------------------------------------------------------------------- Western Digital Corp.(1) 217,000 2,563,313 ------------ 38,641,876 - --------------------------------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 10.5% BMC Software, Inc.(1) 156,800 8,143,800 - --------------------------------------------------------------------------------------- Cambridge Technology Partners, Inc.(1) 91,300 4,987,263 - --------------------------------------------------------------------------------------- Computer Associates International, Inc. 41,000 2,278,063 - --------------------------------------------------------------------------------------- Computer Sciences Corp. 40,000 2,560,000 - --------------------------------------------------------------------------------------- Gartner Group, Inc., Cl. A(1) 91,000 3,185,000 - --------------------------------------------------------------------------------------- HBO & Co. 130,000 4,582,500 - --------------------------------------------------------------------------------------- Microsoft Corp.(1) 180,000 19,507,500 - --------------------------------------------------------------------------------------- Network Associates, Inc.(1) 127,350 6,096,881 - --------------------------------------------------------------------------------------- Peoplesoft, Inc.(1) 166,000 7,802,000 - --------------------------------------------------------------------------------------- PLATINUM Technology, Inc.(1) 120,300 3,436,069 - --------------------------------------------------------------------------------------- Sungard Data Systems, Inc.(1) 163,300 6,266,638 ------------ 68,845,714 - --------------------------------------------------------------------------------------- ELECTRONICS - 2.3% LSI Logic Corp.(1) 63,000 1,452,938 - --------------------------------------------------------------------------------------- Texas Instruments, Inc. 103,000 6,006,188 - --------------------------------------------------------------------------------------- Vitesse Semiconductor Corp.(1) 246,400 7,607,600 ------------ 15,066,726 - --------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 5.7% CIENA Corp.(1) 94,300 6,565,638 - --------------------------------------------------------------------------------------- Cisco Systems, Inc. 120,000 11,047,500 - --------------------------------------------------------------------------------------- General Instrument Corp.(1) 210,000 5,709,375 - --------------------------------------------------------------------------------------- Newbridge Networks Corp.(1) 67,000 1,603,813 - --------------------------------------------------------------------------------------- Premisys Communications, Inc.(1) 110,000 2,736,250 - --------------------------------------------------------------------------------------- Tellabs, Inc.(1) 110,000 7,878,750 - --------------------------------------------------------------------------------------- Uniphase Corp.(1) 35,900 2,253,847 ------------ 37,795,173 - --------------------------------------------------------------------------------------- UTILITIES - 2.2% - --------------------------------------------------------------------------------------- TELEPHONE UTILITIES - 2.2% Qwest Communications International, Inc.(1) 118,942 4,148,102 - --------------------------------------------------------------------------------------- SBC Communications, Inc. 70,000 2,800,000 - --------------------------------------------------------------------------------------- WorldCom, Inc.(1) 161,000 7,798,438 ------------ 14,746,540 ------------ Total Common Stocks (Cost $415,248,197) 574,773,611
47 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT NOTE 1 - --------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 13.3% - --------------------------------------------------------------------------------------- Repurchase agreement with Salomon Smith Barney Holdings, Inc., 5.90%, dated 6/30/98, to be repurchased at $87,114,275 on 7/1/98, collateralized by U.S. Treasury Bonds, 8.75%-10.625%, 2/15/15-2/15/19, with a value of $89,415,875 (Cost $87,100,000) $87,100,000 $87,100,000 - --------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $502,348,197) 100.7% 661,873,611 - --------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.7) (4,393,694) ----------- ------------ NET ASSETS 100.0% $657,479,917 ----------- ------------ ----------- ------------
1. Non-income producing security. 2. Units may be comprised of several components, such as debt and equity and/or warrants to purchase equity at some point in the future. For units which represent debt securities, principal amount disclosed represents total underlying principal. See accompanying Notes to Financial Statements. 48 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- COMMON STOCKS - 50.8% - --------------------------------------------------------------------------------------- BASIC MATERIALS - 2.0% - --------------------------------------------------------------------------------------- CHEMICALS - 1.2% Bayer AG, Sponsored ADR 47,000 $ 2,431,973 - --------------------------------------------------------------------------------------- Du Pont (E.I.) De Nemours & Co. 20,000 1,492,500 - --------------------------------------------------------------------------------------- IMC Global, Inc. 36,000 1,084,500 - --------------------------------------------------------------------------------------- Morton International, Inc. 44,000 1,100,000 - --------------------------------------------------------------------------------------- Potash Corp. of Saskatchewan, Inc. 25,000 1,889,062 ------------ 7,998,035 - --------------------------------------------------------------------------------------- METALS - 0.2% Alumax, Inc.(1) 300 13,912 - --------------------------------------------------------------------------------------- De Beers Consolidated Mines Ltd., ADR 70,000 1,225,000 ------------ 1,238,912 - --------------------------------------------------------------------------------------- PAPER - 0.6% Aracruz Celulose SA, Sponsored ADR 92,000 1,052,250 - --------------------------------------------------------------------------------------- MacMillan Bloedel Ltd. 148,773 1,588,350 - --------------------------------------------------------------------------------------- Wausau-Mosinee Paper Corp. 64,000 1,464,000 ------------ 4,104,600 - --------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 9.5% - --------------------------------------------------------------------------------------- AUTOS & HOUSING - 1.0% Chastain Capital Corp. 92,500 1,190,937 - --------------------------------------------------------------------------------------- Dana Corp. 33,000 1,765,500 - --------------------------------------------------------------------------------------- IRSA Inversiones y Representaciones SA 357,510 1,051,206 - --------------------------------------------------------------------------------------- Post Properties, Inc. 28,000 1,078,000 - --------------------------------------------------------------------------------------- Toll Brothers, Inc.(2) 46,000 1,319,625 ------------ 6,405,268 - --------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 4.5% Alaska Air Group, Inc.(1)(2) 40,000 2,182,500 - --------------------------------------------------------------------------------------- AMR Corp.(1)(2) 33,000 2,747,250 - --------------------------------------------------------------------------------------- Berjaya Sports Toto Berhad 410,000 607,957 - --------------------------------------------------------------------------------------- Brunswick Corp. 40,000 990,000 - --------------------------------------------------------------------------------------- Callaway Golf Co. 98,500 1,939,219 - --------------------------------------------------------------------------------------- Cracker Barrel Old Country Store, Inc.(1) 69,000 2,190,750 - --------------------------------------------------------------------------------------- Host Marriott Corp.(2) 72,500 1,291,406 - --------------------------------------------------------------------------------------- International Game Technology(1) 105,000 2,546,250 - --------------------------------------------------------------------------------------- Luby's Cafeterias, Inc. 79,000 1,387,437 - --------------------------------------------------------------------------------------- Mirage Resorts, Inc.(2) 150,000 3,196,875 - --------------------------------------------------------------------------------------- Nintendo Co. Ltd. 32,000 2,962,867 - --------------------------------------------------------------------------------------- Outback Steakhouse, Inc.(1)(2) 6,800 265,200
49 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT (CONTINUED) Shangri-La Asia Ltd. 535,000 $ 345,225 - --------------------------------------------------------------------------------------- Shimano, Inc. 100,000 2,536,297 - --------------------------------------------------------------------------------------- SkyWest, Inc.(1) 50,000 1,400,000 - --------------------------------------------------------------------------------------- Time Warner, Inc. 25,000 2,135,937 - --------------------------------------------------------------------------------------- West Marine, Inc.(2) 105,000 1,890,000 ------------ 30,615,170 - --------------------------------------------------------------------------------------- MEDIA - 1.2% CBS Corp.(1) 113,026 3,588,575 - --------------------------------------------------------------------------------------- MediaOne Group, Inc.(2) 72,000 3,163,500 - --------------------------------------------------------------------------------------- South China Morning Post Holdings Ltd. 2,258,000 1,085,496 ------------ 7,837,571 - --------------------------------------------------------------------------------------- RETAIL: GENERAL - 1.2% Cone Mills Corp.(2) 223,000 1,923,375 - --------------------------------------------------------------------------------------- Dayton Hudson Corp.(1) 36,000 1,746,000 - --------------------------------------------------------------------------------------- Federated Department Stores, Inc.(1)(2) 41,000 2,206,312 - --------------------------------------------------------------------------------------- Neiman Marcus Group, Inc.(2) 56,000 2,432,500 ------------ 8,308,187 - --------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 1.6% AutoZone, Inc.(2) 53,100 1,695,881 - --------------------------------------------------------------------------------------- Books-A-Million, Inc.(2) 300,000 1,387,500 - --------------------------------------------------------------------------------------- General Nutrition Cos., Inc.(1) 82,000 2,552,250 - --------------------------------------------------------------------------------------- Gymboree Corp.(1)(2) 58,000 879,062 - --------------------------------------------------------------------------------------- JLK Direct Distribution, Inc.(2) 60,000 1,312,500 - --------------------------------------------------------------------------------------- Petco Animal Supplies, Inc.(1)(2) 60,000 1,196,250 - --------------------------------------------------------------------------------------- Saks Holdings, Inc.(2) 60,000 1,657,500 ------------ 10,680,943 - --------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 7.8% - --------------------------------------------------------------------------------------- BEVERAGES - 0.5% Coca-Cola Amatil Ltd. 55,000 367,833 - --------------------------------------------------------------------------------------- Diageo plc 155,800 1,853,648 - --------------------------------------------------------------------------------------- Whitman Corp. 62,000 1,422,125 ------------ 3,643,606 - --------------------------------------------------------------------------------------- FOOD - 0.6% Groupe Danone 10,000 2,751,052 - --------------------------------------------------------------------------------------- Nestle SA, Sponsored ADR 14,000 1,498,010 ------------ 4,249,062 - --------------------------------------------------------------------------------------- HEALTHCARE/DRUGS - 3.9% Abbott Laboratories 57,000 2,329,875 - --------------------------------------------------------------------------------------- American Home Products Corp.(1) 77,000 3,984,750 - --------------------------------------------------------------------------------------- Astra AB Free, Series A 120,000 2,452,681
50 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- HEALTHCARE/DRUGS (CONTINUED) BioChem Pharma, Inc.(2) 60,000 $ 1,590,000 - --------------------------------------------------------------------------------------- Bristol-Myers Squibb Co.(1) 11,000 1,264,313 - --------------------------------------------------------------------------------------- Centocor, Inc.(2) 44,000 1,595,000 - --------------------------------------------------------------------------------------- CliniChem Development, Inc. 1,500 8,625 - --------------------------------------------------------------------------------------- Genzyme Corp. (General Division)(1)(2) 65,000 1,661,562 - --------------------------------------------------------------------------------------- Johnson & Johnson(1) 40,000 2,950,000 - --------------------------------------------------------------------------------------- Mylan Laboratories, Inc.(1) 75,000 2,254,688 - --------------------------------------------------------------------------------------- Novartis AG 2,000 3,328,035 - --------------------------------------------------------------------------------------- SmithKline Beecham plc, Sponsored ADR, Cl. A(1) 46,000 2,783,000 ------------ 26,202,529 - --------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 1.4% Acuson Corp.(2) 61,500 1,118,531 - --------------------------------------------------------------------------------------- Alternative Living Services, Inc.(2) 70,000 1,890,000 - --------------------------------------------------------------------------------------- Biomet, Inc.(1) 50,000 1,653,125 - --------------------------------------------------------------------------------------- Boston Scientific Corp.(1)(2) 16,000 1,146,000 - --------------------------------------------------------------------------------------- Innovasive Devices, Inc.(2) 110,000 1,031,250 - --------------------------------------------------------------------------------------- Manor Care, Inc.(1) 8,800 338,250 - --------------------------------------------------------------------------------------- United Healthcare Corp.(1) 32,800 2,082,800 ------------ 9,259,956 - --------------------------------------------------------------------------------------- HOUSEHOLD GOODS - 0.6% Fort James Corp. 37,000 1,646,500 - --------------------------------------------------------------------------------------- Wella AG 2,150 2,128,831 - --------------------------------------------------------------------------------------- Wella AG, Preference 200 225,689 ------------ 4,001,020 - --------------------------------------------------------------------------------------- TOBACCO - 0.8% Imperial Tobacco Group plc 260,000 1,916,291 - --------------------------------------------------------------------------------------- Philip Morris Cos., Inc. 87,000 3,425,625 ------------ 5,341,916 - --------------------------------------------------------------------------------------- ENERGY - 3.5% - --------------------------------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 1.3% Coflexip SA, Sponsored ADR 5,000 305,625 - --------------------------------------------------------------------------------------- Input/Output, Inc.(1)(2) 138,000 2,458,125 - --------------------------------------------------------------------------------------- Santa Fe International Corp.(1) 72,500 2,193,125 - --------------------------------------------------------------------------------------- Schlumberger Ltd. 15,000 1,024,688 - --------------------------------------------------------------------------------------- Transocean Offshore, Inc. 55,000 2,447,500 - --------------------------------------------------------------------------------------- Western Atlas, Inc.(1)(2) 7,200 611,100 ------------ 9,040,163 - --------------------------------------------------------------------------------------- OIL-INTEGRATED - 2.2% Comstock Resources, Inc.(2) 60,800 452,200 - --------------------------------------------------------------------------------------- Enron Corp. 40,000 2,162,500
51 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- OIL-INTEGRATED (CONTINUED) Kerr-McGee Corp. 33,000 $ 1,909,875 - --------------------------------------------------------------------------------------- Petroleo Brasileiro SA, Preference 3,330,000 619,009 - --------------------------------------------------------------------------------------- Royal Dutch Petroleum Co., NY Shares 30,800 1,688,225 - --------------------------------------------------------------------------------------- Talisman Energy, Inc.(2) 95,510 2,734,346 - --------------------------------------------------------------------------------------- Total SA, Sponsored ADR 17,501 1,144,128 - --------------------------------------------------------------------------------------- Unocal Corp. 65,000 2,323,750 - --------------------------------------------------------------------------------------- YPF SA, Cl. D, ADR 65,000 1,954,063 ------------ 14,988,096 - --------------------------------------------------------------------------------------- FINANCIAL - 12.6% - --------------------------------------------------------------------------------------- BANKS - 7.0% ABN Amro Holding NV 62,700 1,467,156 - --------------------------------------------------------------------------------------- Banc One Corp. 20,000 1,116,250 - --------------------------------------------------------------------------------------- Banco Frances del Rio de la Plata SA 95,000 698,334 - --------------------------------------------------------------------------------------- Chase Manhattan Corp. (New)(1) 177,000 13,363,500 - --------------------------------------------------------------------------------------- Credit Suisse Group 5,225 1,162,595 - --------------------------------------------------------------------------------------- Credito Italiano SpA 460,700 2,411,641 - --------------------------------------------------------------------------------------- Deutsche Bank AG 11,400 963,873 - --------------------------------------------------------------------------------------- Fleet Financial Group, Inc.(1) 19,000 1,586,500 - --------------------------------------------------------------------------------------- Morgan J.P. & Co., Inc. 10,000 1,171,250 - --------------------------------------------------------------------------------------- NationsBank Corp.(1) 160,000 12,240,000 - --------------------------------------------------------------------------------------- PNC Bank Corp. 30,500 1,641,281 - --------------------------------------------------------------------------------------- Societe Generale 26,200 5,435,003 - --------------------------------------------------------------------------------------- UBS AG 4,175 1,552,402 - --------------------------------------------------------------------------------------- Wells Fargo & Co. 6,500 2,398,500 ------------ 47,208,285 - --------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 1.6% American Express Co.(1) 22,800 2,599,200 - --------------------------------------------------------------------------------------- CRIIMI MAE, Inc. 100,000 1,387,500 - --------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc.(1) 26,200 2,416,950 - --------------------------------------------------------------------------------------- Morgan Stanley Dean Witter & Co.(1) 45,800 4,184,975 ------------ 10,588,625 - --------------------------------------------------------------------------------------- FINANCIAL - 0.2% Cornerstone Properties, Inc. 68,000 1,198,500 - --------------------------------------------------------------------------------------- INSURANCE - 1.6% ACE Ltd. 54,000 2,106,000 - --------------------------------------------------------------------------------------- Cigna Corp.(1) 28,000 1,932,000 - --------------------------------------------------------------------------------------- Everest Reinsurance Holdings, Inc. 52,500 2,017,969 - --------------------------------------------------------------------------------------- Skandia Forsakrings AB 162,000 2,315,752 - --------------------------------------------------------------------------------------- UNUM Corp. 48,600 2,697,300 ------------ 11,069,021
52 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS - 2.2% Avalon Bay Communities, Inc. 30,732 $ 1,167,816 - --------------------------------------------------------------------------------------- Brandywine Realty Trust 56,000 1,253,000 - --------------------------------------------------------------------------------------- Camden Property Trust 40,000 1,190,000 - --------------------------------------------------------------------------------------- CarrAmerica Realty Corp. 48,000 1,362,000 - --------------------------------------------------------------------------------------- Chelsea GCA Realty, Inc. 32,000 1,280,000 - --------------------------------------------------------------------------------------- Developers Diversified Realty Corp. 31,000 1,214,813 - --------------------------------------------------------------------------------------- JDN Realty Corp. 40,000 1,275,000 - --------------------------------------------------------------------------------------- Manufactured Home Communities, Inc. 44,000 1,061,500 - --------------------------------------------------------------------------------------- Security Capital Pacific Trust 52,000 1,170,000 - --------------------------------------------------------------------------------------- Shurgard Storage Centers, Inc. 44,000 1,221,000 - --------------------------------------------------------------------------------------- Simon DeBartolo Group, Inc. 37,500 1,218,750 - --------------------------------------------------------------------------------------- Sunstone Hotel Investors, Inc. 80,000 1,065,000 ------------ 14,478,879 - --------------------------------------------------------------------------------------- INDUSTRIAL - 2.8% - --------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT - 0.5% Methode Electronics, Inc., Cl. A 105,000 1,627,500 - --------------------------------------------------------------------------------------- Rockwell International Corp. 36,300 1,744,669 ------------ 3,372,169 - --------------------------------------------------------------------------------------- INDUSTRIAL MATERIALS - 0.4% Owens Corning 63,000 2,571,188 - --------------------------------------------------------------------------------------- INDUSTRIAL SERVICES - 0.1% Children's Comprehensive Services, Inc.(2) 40,000 595,000 - --------------------------------------------------------------------------------------- MANUFACTURING - 1.1% AGCO Corp. 79,000 1,624,438 - --------------------------------------------------------------------------------------- Cognex Corp.(2) 70,000 1,295,000 - --------------------------------------------------------------------------------------- Hutchison Whampoa Ltd. 35,000 184,744 - --------------------------------------------------------------------------------------- Pall Corp. 105,000 2,152,500 - --------------------------------------------------------------------------------------- Tenneco, Inc. (New) 63,000 2,397,938 ------------ 7,654,620 - --------------------------------------------------------------------------------------- TRANSPORTATION - 0.7% Burlington Northern Santa Fe Corp. 28,000 2,749,250 - --------------------------------------------------------------------------------------- Stolt-Nielsen SA 64,200 1,099,425 - --------------------------------------------------------------------------------------- Stolt-Nielsen SA, Sponsored ADR 17,650 306,669 - --------------------------------------------------------------------------------------- Transportacion Maritima Mexicana SA de CV, Sponsored ADR, L Shares(2) 130,000 861,250 ------------ 5,016,594 - --------------------------------------------------------------------------------------- TECHNOLOGY - 10.6% - --------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.3% Lockheed Martin Corp.(1) 18,000 1,905,750 - --------------------------------------------------------------------------------------- COMPUTER HARDWARE - 2.4% Adaptec, Inc.(2) 88,000 1,259,500 - --------------------------------------------------------------------------------------- Cabletron Systems, Inc.(2) 67,500 907,031
53 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- COMPUTER HARDWARE (CONTINUED) Canon, Inc. 50,000 $ 1,134,849 - --------------------------------------------------------------------------------------- Hewlett-Packard Co.(1) 39,000 2,335,125 - --------------------------------------------------------------------------------------- International Business Machines Corp. 60,000 6,888,750 - --------------------------------------------------------------------------------------- Xerox Corp.(1) 34,700 3,526,388 ------------ 16,051,643 - --------------------------------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 3.8% America Online, Inc.(1) 33,700 3,572,200 - --------------------------------------------------------------------------------------- Broderbund Software, Inc.(2) 74,000 1,688,125 - --------------------------------------------------------------------------------------- Computer Associates International, Inc.(1) 67,499 3,750,441 - --------------------------------------------------------------------------------------- Electronic Arts, Inc.(1)(2) 27,000 1,458,000 - --------------------------------------------------------------------------------------- First Data Corp.(1) 80,500 2,681,656 - --------------------------------------------------------------------------------------- Novell, Inc.(2) 139,000 1,772,250 - --------------------------------------------------------------------------------------- PLATINUM Technology, Inc.(2) 62,500 1,785,156 - --------------------------------------------------------------------------------------- Rational Software Corp.(1)(2) 133,000 2,028,250 - --------------------------------------------------------------------------------------- Sabre Group Holdings, Inc.(2) 66,100 2,511,800 - --------------------------------------------------------------------------------------- SELECT Software Tools Ltd., ADR(2) 120,000 555,000 - --------------------------------------------------------------------------------------- Structural Dynamics Research Corp.(2) 167 3,862 - --------------------------------------------------------------------------------------- Symantec Corp.(1)(2) 49,764 1,300,085 - --------------------------------------------------------------------------------------- Synopsys, Inc.(1)(2) 31,000 1,418,250 - --------------------------------------------------------------------------------------- Transition Systems, Inc.(1)(2) 71,400 758,625 ------------ 25,283,700 - --------------------------------------------------------------------------------------- ELECTRONICS - 2.6% Analog Devices, Inc.(2) 22,500 552,656 - --------------------------------------------------------------------------------------- CAE, Inc. 131,535 1,113,610 - --------------------------------------------------------------------------------------- Credence Systems Corp.(2) 34,000 646,000 - --------------------------------------------------------------------------------------- General Motors Corp., Cl. H(1) 42,200 1,988,675 - --------------------------------------------------------------------------------------- Intel Corp.(1) 108,000 8,005,500 - --------------------------------------------------------------------------------------- Keyence Corp. 9,000 979,212 - --------------------------------------------------------------------------------------- Nokia Corp., A Shares, Sponsored ADR(1) 17,100 1,240,819 - --------------------------------------------------------------------------------------- STMicroelectronics NV(1)(2) 17,500 1,222,813 - --------------------------------------------------------------------------------------- Teradyne, Inc.(1)(2) 18,500 494,875 - --------------------------------------------------------------------------------------- Xilinx, Inc.(1)(2) 45,000 1,530,000 ------------ 17,774,160 - --------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 1.5% Airtouch Communications, Inc.(2) 38,000 2,220,625 - --------------------------------------------------------------------------------------- CIENA Corp.(1)(2) 35,000 2,436,875 - --------------------------------------------------------------------------------------- Cisco Systems, Inc.(1) 36,000 3,314,250 - --------------------------------------------------------------------------------------- ECI Telecommunications Ltd.(1) 29,800 1,128,675 - --------------------------------------------------------------------------------------- Newbridge Networks Corp.(2) 10,700 256,131
54 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - --------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY (CONTINUED) QUALCOMM, Inc.(1)(2) 19,000 $ 1,067,563 ------------ 10,424,119 - --------------------------------------------------------------------------------------- UTILITIES - 2.0% - --------------------------------------------------------------------------------------- ELECTRIC UTILITIES - 0.9% Allegheny Energy, Inc. 48,000 1,446,000 - --------------------------------------------------------------------------------------- Houston Industries, Inc. 76,000 2,346,500 - --------------------------------------------------------------------------------------- Southern Co. 72,000 1,993,500 ------------ 5,786,000 - --------------------------------------------------------------------------------------- TELEPHONE UTILITIES - 1.1% MCI Communications Corp. 57,000 3,313,124 - --------------------------------------------------------------------------------------- Qwest Communications International, Inc.(2) 22,000 767,250 - --------------------------------------------------------------------------------------- SBC Communications, Inc. 44,000 1,760,000 - --------------------------------------------------------------------------------------- Telecomunicacoes Brasileiras SA 8,100,000 644,298 - --------------------------------------------------------------------------------------- U S West, Inc.(1) 21,000 987,000 ------------ 7,471,672 ------------ Total Common Stocks (Cost $241,662,064) 342,364,959 - --------------------------------------------------------------------------------------- PREFERRED STOCKS - 0.7% - --------------------------------------------------------------------------------------- Budget Group, Inc., 6.25% Cv.(3) 20,000 1,162,500 - --------------------------------------------------------------------------------------- ICG Communications, Inc., 6.75% Cv. Preferred Stock(3) 25,000 2,090,625 - --------------------------------------------------------------------------------------- Intermedia Communications, Inc., 7% Cv. Preferred Stock(3) 30,000 1,668,750 - --------------------------------------------------------------------------------------- Time Warner, Inc., 10.25% Exchangeable Preferred, Series M(4) 1 1,170 ------------ Total Preferred Stocks (Cost $4,231,250) 4,923,045 UNITS - --------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.0% - --------------------------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99(5) 6,000 60 - --------------------------------------------------------------------------------------- Gaylord Container Corp. Wts., Exp. 11/02 9,232 69,240 - --------------------------------------------------------------------------------------- IHF Capital, Inc., Series I Wts., Exp. 11/99(5) 1,000 10,125 - --------------------------------------------------------------------------------------- Perkin-Elmer Corp. Wts., Exp. 9/03 249 1,183 - --------------------------------------------------------------------------------------- Terex Corp. Rts., Exp. 5/02(5) 4,000 92,500 ------------ Total Rights, Warrants and Certificates (Cost $20,772) 173,108 PRINCIPAL AMOUNT(6) - --------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 2.3% - --------------------------------------------------------------------------------------- Federal National Mortgage Assn., 6.50%, 11/1/27-12/1/27 $ 7,831,380 4,912,050 - --------------------------------------------------------------------------------------- Government National Mortgage Assn.: 7%, 7/1/28(7) 6,000,000 6,095,640 8%, 7/15/22-4/15/23 3,517,277 3,657,708
55 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(6) NOTE 1 - --------------------------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS (CONTINUED) - --------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1994-C2, Cl. E, 8%, 4/25/25 $ 660,862 $ 666,707 ------------ Total Mortgage-Backed Obligations (Cost $15,214,092) 15,332,105 - --------------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 11.0% - --------------------------------------------------------------------------------------- U.S. Treasury Bonds: 8.875%, 8/15/17 2,900,000 3,955,783 STRIPS: 7.101%, 11/15/18(8) 24,500,000 7,674,135 7.258%, 11/15/18(8) 18,600,000 5,826,078 7.313%, 8/15/19(8) 26,800,000 8,042,278 - --------------------------------------------------------------------------------------- U.S. Treasury Nts.: 5.875%, 9/30/02 15,000,000 15,192,195 6.125%, 9/30/00 15,000,000 15,192,195 6.25%, 2/15/07 8,800,000 9,220,754 6.375%, 8/15/02 5,000,000 5,153,130 6.50%, 10/15/06 3,710,000 3,941,879 ------------ Total U.S. Government Obligations (Cost $67,756,501) 74,198,427 - --------------------------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 17.5% - --------------------------------------------------------------------------------------- ARGENTINA - 6.2% Argentina (Republic of) Bonds: Bonos de Consolidacion de Deudas, Series I, 5.667%, 4/1/01(9) 1,788,722 1,702,450 Series L, 6.625%, 3/31/05(9) 8,740,000 7,748,010 - --------------------------------------------------------------------------------------- Argentina (Republic of) Nts., 9.15%, 11/30/02(9) 15,000,000 14,906,250 - --------------------------------------------------------------------------------------- Argentina (Republic of) Par Bonds, 5.75%, 3/31/23(10) 23,750,000 17,678,906 ------------ 42,035,616 - --------------------------------------------------------------------------------------- AUSTRALIA - 0.5% New South Wales Treasury Corp. Gtd. Bonds, 7%, 4/1/04(AUD) 3,160,000 2,086,477 - --------------------------------------------------------------------------------------- Queensland Treasury Corp. Exchangeable Gtd. Nts., 10.50%, 5/15/03(AUD) 1,800,000 1,348,599 ------------ 3,435,076 - --------------------------------------------------------------------------------------- CANADA - 2.6% Canada (Government of) Bonds: 8.50%, 4/1/02(CAD) 1,500,000 1,130,797 8.75%, 12/1/05(CAD) 12,200,000 10,021,468 9.75%, 12/1/01(CAD) 3,000,000 2,321,817 9.75%, 6/1/01(CAD) 2,000,000 1,523,343 Series WL43, 5.75%, 6/1/29(CAD) 3,670,000 2,618,990 ------------ 17,616,415 - --------------------------------------------------------------------------------------- DENMARK - 0.8% Denmark (Kingdom of) Bonds, 8%, 3/15/06(DKK) 32,100,000 5,587,264 - --------------------------------------------------------------------------------------- GREAT BRITAIN - 1.1% United Kingdom Treasury Bonds, 6.75%, 11/26/04(GBP) 2,680,000 4,621,123
56 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(6) NOTE 1 - --------------------------------------------------------------------------------------- GREAT BRITAIN (CONTINUED) United Kingdom Treasury Nts., 13%, 7/14/00(GBP) $ 1,590,000 $ 2,944,629 ------------ 7,565,752 - --------------------------------------------------------------------------------------- IRELAND - 0.3% Ireland (Government of) Bonds, 9.25%, 7/11/03(IEP) 1,110,000 1,854,823 - --------------------------------------------------------------------------------------- MEXICO - 0.6% United Mexican States Collateralized Fixed Rate Par Bonds, Series A, 6.25%, 12/31/19 4,450,000 3,696,281 - --------------------------------------------------------------------------------------- NEW ZEALAND - 4.4% New Zealand (Government of) Bonds: 10%, 3/15/02(NZD) 16,800,000 9,557,501 8%, 2/15/01(NZD) 19,440,000 10,292,752 - --------------------------------------------------------------------------------------- New Zealand (Government of) Nts., 6.50%, 2/15/00(NZD) 18,600,000 9,535,485 ------------ 29,385,738 - --------------------------------------------------------------------------------------- PHILIPPINES - 0.4% Philippines (Republic of) Bonds, 8.60%, 6/15/27 1,500,000 1,293,750 - --------------------------------------------------------------------------------------- Philippines (Republic of) Par Bonds, Series B, 6.50%, 12/1/17(5)(10) 1,675,000 1,476,094 ------------ 2,769,844 - --------------------------------------------------------------------------------------- POLAND - 0.4% Poland (Republic of) Bonds, 15%, 10/12/99(PLZ) 9,000,000 2,439,043 - --------------------------------------------------------------------------------------- SOUTH AFRICA - 0.2% Eskom Depositary Receipts, Series E168, 11%, 6/1/08(ZAR) 12,570,000 1,659,194 ------------ Total Foreign Government Obligations (Cost $116,588,098) 118,045,046 - --------------------------------------------------------------------------------------- NON-CONVERTIBLE CORPORATE BONDS AND NOTES - 7.7% - --------------------------------------------------------------------------------------- BASIC MATERIALS - 1.1% - --------------------------------------------------------------------------------------- CHEMICALS - 0.3% Harris Chemical North America, Inc., 10.75% Gtd. Sr. Sub. Nts., 10/15/03 100,000 105,625 - --------------------------------------------------------------------------------------- Laroche Industries, Inc., 9.50% Sr. Sub. Nts., Series B, 9/15/07 500,000 490,000 - --------------------------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 85,000 94,031 - --------------------------------------------------------------------------------------- Sterling Chemicals, Inc., 11.75% Sr. Unsec. Sub. Nts., 8/15/06 1,115,000 1,120,575 ------------ 1,810,231 - --------------------------------------------------------------------------------------- METALS - 0.4% AK Steel Corp., 9.125% Sr. Nts., 12/15/06 1,150,000 1,207,500 - --------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 1,000,000 1,067,500 - --------------------------------------------------------------------------------------- Metallurg, Inc., 11% Sr. Nts., 12/1/07 450,000 472,500 ------------ 2,747,500 - --------------------------------------------------------------------------------------- PAPER - 0.4% APP International Finance Co. BV, 11.75% Gtd. Sec. Nts., 10/1/05 500,000 441,250
57 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(6) NOTE 1 - --------------------------------------------------------------------------------------- PAPER (CONTINUED) Aracruz Celulose SA, 10.375% Debs., 1/31/02 $ 430,000 $ 425,700 - --------------------------------------------------------------------------------------- Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 425,000 438,812 - --------------------------------------------------------------------------------------- Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 500,000 522,500 - --------------------------------------------------------------------------------------- SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 750,000 833,437 ------------ 2,661,699 - --------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 2.3% - --------------------------------------------------------------------------------------- AUTOS & HOUSING - 0.5% Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., Series B, 7/15/07 500,000 507,500 - --------------------------------------------------------------------------------------- Chrysler Financial Corp., 13.25% Nts., 10/15/99 500,000 544,088 - --------------------------------------------------------------------------------------- Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 500,000 562,500 - --------------------------------------------------------------------------------------- Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., Series B, 7/15/02 1,000,000 1,040,000 - --------------------------------------------------------------------------------------- Kaufman & Broad Home Corp., 7.75% Sr. Nts., 10/15/04 400,000 400,500 ------------ 3,054,588 - --------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 0.5% Casino America, Inc., 12.50% Sr. Nts., 8/1/03 250,000 283,750 - --------------------------------------------------------------------------------------- Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03 500,000 550,000 - --------------------------------------------------------------------------------------- Hard Rock Hotel, Inc., 9.25% Sr. Sub. Nts., 4/1/05(3) 500,000 515,000 - --------------------------------------------------------------------------------------- HMH Properties, Inc., 8.875% Sr. Nts., 7/15/07 750,000 840,000 - --------------------------------------------------------------------------------------- Imax Corp., 10% Sr. Nts., 3/1/01 600,000 627,750 - --------------------------------------------------------------------------------------- Rio Hotel & Casino, Inc., 9.50% Gtd. Sr. Sub. Nts., 4/15/07 750,000 789,375 ------------ 3,605,875 - --------------------------------------------------------------------------------------- MEDIA - 1.3% American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04(11) 157,000 40,035 - --------------------------------------------------------------------------------------- Cablevision Systems Corp. Holdings, Inc., 9.875% Sr. Sub. Nts., 5/15/06 250,000 274,375 - --------------------------------------------------------------------------------------- Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 400,000 422,000 - --------------------------------------------------------------------------------------- EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04(11) 540,000 529,200 - --------------------------------------------------------------------------------------- Falcon Holding Group LP, 0%/9.285% Sr. Disc. Debs., 4/15/10(3)(11) 600,000 391,500 - --------------------------------------------------------------------------------------- Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B, 11/1/03(9) 550,000 591,250 - --------------------------------------------------------------------------------------- Lamar Advertising Co., 9.625% Sr. Sub. Nts., 12/1/06 150,000 161,250 - --------------------------------------------------------------------------------------- Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 1,000,000 1,042,676 - --------------------------------------------------------------------------------------- Rogers Cablesystems Ltd., 10% Second Priority Sr. Sec. Debs., 12/1/07 1,000,000 1,115,000 - --------------------------------------------------------------------------------------- Sinclair Broadcast Group, Inc.: 8.75% Sr. Sub. Nts., 12/15/07 500,000 517,500 9% Gtd. Sr. Sub. Nts., 7/15/07 450,000 470,250 - --------------------------------------------------------------------------------------- TCI Satellite Entertainment, Inc., 10.875% Sr. Sub. Nts., 2/15/07 200,000 200,000 - --------------------------------------------------------------------------------------- Time Warner Entertainment Co. LP, 10.15% Sr. Nts., 5/1/12 500,000 663,705 - --------------------------------------------------------------------------------------- Time Warner, Inc., 9.125% Debs., 1/15/13 500,000 616,706 - --------------------------------------------------------------------------------------- TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 1,000,000 1,095,746
58 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(6) NOTE 1 - --------------------------------------------------------------------------------------- MEDIA (CONTINUED) Young Broadcasting, Inc., 8.75% Sr. Sub. Debs., 6/15/07 $ 900,000 $ 938,250 ------------ 9,069,443 - --------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 0.8% - --------------------------------------------------------------------------------------- FOOD - 0.4% Fleming Cos., Inc.: 10.50% Sr. Sub. Nts., Series B, 12/1/04 300,000 313,500 10.625% Sr. Sub. Nts., Series B, 7/31/07 800,000 838,000 - --------------------------------------------------------------------------------------- Randall's Food Markets, Inc., 9.375% Sr. Sub. Nts., Series B, 7/1/07 800,000 848,000 - --------------------------------------------------------------------------------------- RJR Nabisco, Inc., 8.625% Medium-Term Nts., 12/1/02 500,000 518,632 - --------------------------------------------------------------------------------------- Stater Brothers Holdings, Inc., 9% Sr. Unsec. Sub. Nts., 7/1/04 500,000 512,500 ------------ 3,030,632 - --------------------------------------------------------------------------------------- HEALTHCARE/DRUGS - 0.0% Integrated Health Services, Inc., 9.50% Sr. Sub. Nts., 9/15/07 220,000 231,000 - --------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 0.2% Sun Healthcare Group, Inc., 9.375% Sr. Sub. Nts., 5/1/08(3) 1,000,000 1,015,000 - --------------------------------------------------------------------------------------- HOUSEHOLD GOODS - 0.2% Revlon Consumer Products Corp., 8.625% Sr. Unsec. Sub. Nts., 2/1/08 500,000 503,125 - --------------------------------------------------------------------------------------- Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts., 10.085%, 3/15/01(8) 1,000,000 780,000 ------------ 1,283,125 - --------------------------------------------------------------------------------------- ENERGY - 0.4% - --------------------------------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 0.4% Gothic Production Corp., 11.125% Sr. Sec. Nts., 5/1/05(3) 950,000 914,375 - --------------------------------------------------------------------------------------- Grey Wolf, Inc., 8.875% Sr. Nts., 7/1/07(3) 1,000,000 970,000 - --------------------------------------------------------------------------------------- J. Ray McDermott SA, 9.375% Sr. Sub. Bonds, 7/15/06 535,000 577,800 ------------ 2,462,175 - --------------------------------------------------------------------------------------- FINANCIAL - 0.1% - --------------------------------------------------------------------------------------- BANKS - 0.1% First Chicago Corp.: 11.25% Sub. Nts., 2/20/01 250,000 281,331 9% Sub. Nts., 6/15/99 250,000 256,888 ------------ 538,219 - --------------------------------------------------------------------------------------- INDUSTRIAL - 0.5% - --------------------------------------------------------------------------------------- INDUSTRIAL MATERIALS - 0.2% American Standard Cos., Inc., 10.875% Sr. Nts., 5/15/99(5) 500,000 523,750 - --------------------------------------------------------------------------------------- Building Materials Corp. of America, 8.625% Sr. Nts., Series B, 12/15/06 100,000 104,000 - --------------------------------------------------------------------------------------- Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03 850,000 888,250 ------------ 1,516,000 - --------------------------------------------------------------------------------------- INDUSTRIAL SERVICES - 0.0% Allied Waste North America, Inc., 10.25% Sr. Sub. Nts., 12/1/06 285,000 313,500 - --------------------------------------------------------------------------------------- MANUFACTURING - 0.2% International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 500,000 550,625
59 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(6) NOTE 1 - --------------------------------------------------------------------------------------- MANUFACTURING (CONTINUED) Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 $ 500,000 $ 508,125 ------------ 1,058,750 - --------------------------------------------------------------------------------------- TRANSPORTATION - 0.1% Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07(3) 500,000 523,750 - --------------------------------------------------------------------------------------- TECHNOLOGY - 1.9% - --------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 0.2% Amtran, Inc., 10.50% Sr. Nts., 8/1/04 500,000 528,750 - --------------------------------------------------------------------------------------- Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 1,000,000 1,055,000 ------------ 1,583,750 - --------------------------------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 0.2% PSINet, Inc., 10% Sr. Unsec. Nts., Series B, 2/15/05 1,250,000 1,281,250 - --------------------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 1.5% Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc. Nts., 12/1/04(11) 800,000 768,000 - --------------------------------------------------------------------------------------- Convergent Communications, Inc., Units (each unit consists of $1,000 principal amount of 13% sr. nts., 4/1/08 and four warrants to purchase 10.8 shares of common stock)(3)(12) 500,000 482,500 - --------------------------------------------------------------------------------------- FaciliCom International, Inc., 10.50% Sr. Nts., 1/15/08(3) 500,000 495,000 - --------------------------------------------------------------------------------------- Global Crossing Holdings Ltd., 9.625% Sr. Nts., 5/15/08(3) 750,000 784,688 - --------------------------------------------------------------------------------------- GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(11) 500,000 407,500 - --------------------------------------------------------------------------------------- ICG Holdings, Inc., 0%/13.50% Sr. Disc. Nts., 9/15/05(11) 800,000 680,000 - --------------------------------------------------------------------------------------- Intermedia Communications, Inc., 8.50% Sr. Nts., Series B, 1/15/08 500,000 502,500 - --------------------------------------------------------------------------------------- Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(11) 750,000 583,125 - --------------------------------------------------------------------------------------- NTL, Inc.: 0%/10.875% Sr. Deferred Coupon Nts., 10/15/03(11) 500,000 497,500 0%/9.75% Sr. Nts., 4/1/08(3)(11) 500,000 327,500 - --------------------------------------------------------------------------------------- Omnipoint Corp.: 11.625% Sr. Nts., 8/15/06 590,000 623,925 11.625% Sr. Nts., Series A, 8/15/06 110,000 116,325 - --------------------------------------------------------------------------------------- ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 200,000 227,500 - --------------------------------------------------------------------------------------- Rural Cellular Corp., 9.625% Sr. Sub. Nts., 5/15/08(3) 750,000 753,750 - --------------------------------------------------------------------------------------- Teleport Communications Group, Inc., 0%/11.125% Sr. Disc. Nts., 7/1/07(11) 1,000,000 870,000 - --------------------------------------------------------------------------------------- TeleWest Communications plc: 0%/11% Sr. Disc. Debs., 10/1/07(11) 1,000,000 835,000 9.625% Sr. Debs., 10/1/06 500,000 529,375 - --------------------------------------------------------------------------------------- USA Mobile Communications, Inc. II, 9.50% Sr. Nts., 2/1/04 1,000,000 912,500 ------------ 10,396,688 - --------------------------------------------------------------------------------------- UTILITIES - 0.6% - --------------------------------------------------------------------------------------- ELECTRIC UTILITIES - 0.4% California Energy, Inc., 10.25% Sr. Disc. Nts., 1/15/04 750,000 808,125 - --------------------------------------------------------------------------------------- Calpine Corp.: 10.50% Sr. Nts., 5/15/06 800,000 876,000 8.75% Sr. Nts., 7/15/07 400,000 413,000
60 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(6) NOTE 1 - --------------------------------------------------------------------------------------- ELECTRIC UTILITIES (CONTINUED) First PV Funding Corp.: 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16(5) $ 315,000 $ 336,042 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 6,000 6,000 ------------ 2,439,167 - --------------------------------------------------------------------------------------- GAS UTILITIES - 0.2% Beaver Valley II Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17(5) 989,000 1,117,570 ------------ Total Non-Convertible Corporate Bonds and Notes (Cost $49,860,320) 51,739,912 - --------------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 10.8% - --------------------------------------------------------------------------------------- Repurchase agreement with Salomon Smith Barney Holdings, Inc., 5.90%, dated 6/30/98, to be repurchased at $72,911,948 on 7/1/98, collateralized by U.S. Treasury Bonds, 8.75%-10.625%, 2/15/15-2/15/19, with a value of $74,838,316 (Cost $72,900,000) 72,900,000 72,900,000 - --------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $568,233,097) 100.8% 679,676,602 - --------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.8) (5,644,091) ----------- ------------ NET ASSETS 100.0% $674,032,511 ----------- ------------ ----------- ------------
1. A sufficient amount of securities has been designated to cover outstanding written call options, as follows:
SHARES SUBJECT MARKET TO EXPIRATION EXERCISE PREMIUM VALUE NOTE CALL DATE PRICE RECEIVED 1 - ----------------------------------------------------------------------------------- AMR Corp. 12,000 8/98 $75.00 $ 25,319 $ 117,000 Alaska Air Group, Inc. 7,000 10/98 60.00 46,163 15,750 Alaska Air Group, Inc. 4,000 10/98 65.00 18,379 7,000 Alaska Air Group, Inc. 8,600 7/98 50.00 30,916 35,475 Alaska Air Group, Inc. 4,400 7/98 50.00 22,967 18,150 Alumax, Inc. 300 7/98 40.00 441 1,875 America Online, Inc. 8,000 10/98 100.00 76,757 120,000 America Online, Inc. 10,000 10/98 70.00 71,098 377,500 America Online, Inc. 6,600 7/98 55.00 22,175 336,600 American Express Co. 6,500 10/98 115.00 44,304 44,688 American Home Products Corp. 15,600 7/98 52.50 25,115 11,700 Biomet, Inc. 16,000 10/98 35.00 19,519 27,000 Biomet, Inc. 14,000 7/98 30.00 26,704 47,250 Boston Scientific Corp. 12,000 11/98 75.00 68,638 76,500 Boston Scientific Corp. 4,000 8/98 60.00 14,880 49,500 Bristol-Myers Squibb Co. 6,000 12/98 115.00 51,568 59,250 CBS Corp. 22,500 7/98 35.00 44,324 4,219 CIENA Corp. 7,000 1/99 60.00 73,545 101,500 CIENA Corp. 7,000 10/98 60.00 40,914 84,000 Chase Manhattan Corp. 18,000 9/98 70.00 85,227 144,000 Cigna Corp. 3,600 10/98 73.63 16,463 8,775 Cisco Systems, Inc. 12,000 10/98 80.00 43,139 187,500 Cisco Systems, Inc. 6,000 7/98 70.00 20,069 134,250 Computer Associates International, Inc. 15,000 8/98 60.00 53,923 28,125 Cracker Barrel Old Country Store, Inc. 14,000 9/98 40.00 25,829 875 Dayton Hudson Corp. 8,000 7/98 37.50 20,379 90,000 ECI Telecommunications Ltd. 15,800 8/98 30.00 41,000 126,400
61 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 1. Outstanding written call options (continued)
SHARES SUBJECT MARKET TO EXPIRATION EXERCISE PREMIUM VALUE NOTE CALL DATE PRICE RECEIVED 1 - ----------------------------------------------------------------------------------- Electronic Arts, Inc. 10,000 12/98 $50.00 $ 62,340 $ 92,500 Electronic Arts, Inc. 11,500 9/98 45.00 38,466 120,750 Federated Department Stores, Inc. 8,000 11/98 55.00 20,259 26,000 First Data Corp. 12,000 8/98 35.00 36,750 6,750 Fleet Financial Group, Inc. 3,800 10/98 95.00 15,560 5,463 General Motors Corp. 7,000 12/98 60.00 36,539 7,875 General Nutrition Cos., Inc. 15,000 7/98 40.00 42,674 938 Genzyme Corp. (General Division) 12,000 10/98 35.00 26,639 1,500 Gymboree Corp. 8,000 7/98 30.00 33,759 500 Hewlett-Packard Co. 7,000 11/98 85.00 27,789 2,625 Input/Output, Inc. 15,000 11/98 30.00 28,612 5,625 Intel Corp. 30,000 10/98 90.00 137,845 41,250 International Game Technology 20,000 10/98 30.00 44,399 7,500 Johnson & Johnson 9,000 7/98 70.00 32,354 41,625 Lockheed Martin Corp. 3,600 9/98 115.00 18,341 7,200 Lockheed Martin Corp. 3,600 9/98 120.00 26,891 3,150 Manor Care, Inc. 8,800 7/98 40.00 20,635 2,750 MediaOne Group, Inc. 14,400 10/98 40.00 27,467 97,200 Merrill Lynch & Co., Inc. 4,800 10/98 105.00 16,055 13,800 Morgan Stanley Dean Witter & Co. 9,000 1/99 90.00 28,979 76,500 Mylan Laboratories, Inc. 11,500 7/98 25.00 28,404 70,438 NationsBank Corp. 28,000 11/98 90.00 55,158 33,250 Nokia Corp., A Shares, Sponsored ADR 9,800 7/98 42.50 34,377 303,800 Nokia Corp., A Shares, Sponsored ADR 7,300 7/98 45.00 19,136 199,838 Outback Steakhouse, Inc. 6,800 11/98 45.00 7,141 5,950 Petco Animal Supplies, Inc. 4,000 12/98 22.50 9,380 4,500 QUALCOMM, Inc. 3,800 10/98 65.00 14,136 9,738 Rational Software Corp. 25,000 10/98 20.00 38,311 10,938 SGS-Thomson Microelectronics NV 1,000 10/98 95.00 6,970 750 SGS-Thomson Microelectronics NV 3,000 7/98 75.00 17,534 1,875 Santa Fe International Corp. 9,000 10/98 45.00 25,604 1,125 SkyWest, Inc. 50,000 10/98 22.50 92,997 375,000 SmithKline Beecham plc, ADR 5,300 8/98 75.00 9,116 1,988 Symantec Corp. 17,600 10/98 25.00 105,068 68,200 Symantec Corp. 14,000 10/98 30.00 45,078 28,000 Symantec Corp. 17,600 7/98 30.00 58,870 5,500 Synopsys, Inc. 6,200 9/98 45.00 19,188 25,575 Teradyne, Inc. 3,000 10/98 50.00 24,284 188 Teradyne, Inc. 5,000 7/98 40.00 34,849 313 Transition Systems, Inc. 3,500 12/98 25.00 8,645 1,531 U S West Communications Group 10,000 7/98 55.00 20,949 1,250 United Healthcare Corp. 4,100 12/98 75.00 17,814 8,200 Western Atlas, Inc. 3,000 12/98 85.00 32,534 26,625 Xerox Corp. 6,000 10/98 120.00 18,569 12,000 Xerox Corp. 8,000 7/98 85.00 33,759 135,000 Xilinx, Inc. 9,000 12/98 50.00 61,603 11,250 ---------- ---------- $2,591,585 $4,159,200 ---------- ---------- ---------- ----------
62 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 2. Non-income producing security. 3. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $12,094,938 or 1.79% of the Fund's net assets as of June 30, 1998. 4. Interest or dividend is paid in kind. 5. Identifies issues considered to be illiquid or restricted - See Note 6 of Notes to Financial Statements. 6. 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
7. When-issued security to be delivered and settled after June 30, 1998. 8. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 9. Represents the current interest rate for a variable rate security. 10. Represents the current interest rate for an increasing rate security. 11. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 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. See accompanying Notes to Financial Statements. 63 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------------------------------------ COMMON STOCKS - 86.9% - ------------------------------------------------------------------------------------------ BASIC MATERIALS - 1.4% - ------------------------------------------------------------------------------------------ CHEMICALS - 0.5% Minerals Technologies, Inc. 100,000 $ 5,087,500 - ------------------------------------------------------------------------------------------ GOLD & PLATINUM - 0.6% Barrick Gold Corp. 200,000 3,837,500 - ------------------------------------------------------------------------------------------ Newmont Mining Corp. 120,500 2,846,812 -------------- 6,684,312 - ------------------------------------------------------------------------------------------ METALS - 0.3% Cia de Minas Buenaventura SA, Sponsored ADR 46,000 603,750 - ------------------------------------------------------------------------------------------ De Beers Consolidated Mines Ltd., ADR 150,400 2,632,000 -------------- 3,235,750 - ------------------------------------------------------------------------------------------ CONSUMER CYCLICALS - 20.2% - ------------------------------------------------------------------------------------------ AUTOS & HOUSING - 4.0% Brazil Realty SA, GDR(1) 60,000 1,322,832 - ------------------------------------------------------------------------------------------ Brisa-Auto Estradas de Portugal SA 70,300 3,006,550 - ------------------------------------------------------------------------------------------ IRSA Inversiones y Representaciones SA 1,714,678 5,041,758 - ------------------------------------------------------------------------------------------ Porsche AG, Preference 8,800 25,458,568 - ------------------------------------------------------------------------------------------ Solidere, GDR(1) 110,000 1,364,000 - ------------------------------------------------------------------------------------------ Volkswagen AG 10,000 9,597,301 -------------- 45,791,009 - ------------------------------------------------------------------------------------------ LEISURE & ENTERTAINMENT - 5.6% Callaway Golf Co. 454,200 8,942,062 - ------------------------------------------------------------------------------------------ Corporacion Interamericana de Entretenimiento SA(2) 140,101 325,851 - ------------------------------------------------------------------------------------------ Corporacion Interamericana de Entretenimiento SA, Cl. B 1,050,764 2,970,098 - ------------------------------------------------------------------------------------------ Granada Group plc 830,000 15,251,959 - ------------------------------------------------------------------------------------------ Hasbro, Inc. 300,000 11,793,750 - ------------------------------------------------------------------------------------------ International Game Technology 494,000 11,979,500 - ------------------------------------------------------------------------------------------ Nintendo Co. Ltd. 129,000 11,944,013 - ------------------------------------------------------------------------------------------ Resorts World Berhad 563,000 618,995 -------------- 63,826,228 - ------------------------------------------------------------------------------------------ MEDIA - 8.9% Canal Plus 232,000 43,264,296 - ------------------------------------------------------------------------------------------ Carlton Communications plc 2,500,000 22,281,974 - ------------------------------------------------------------------------------------------ Grupo Televisa SA, Sponsored GDR(1)(2) 349,200 13,138,650 - ------------------------------------------------------------------------------------------ Publicis SA 28,000 4,838,023 - ------------------------------------------------------------------------------------------ Singapore Press Holdings Ltd. 400,000 2,681,697 - ------------------------------------------------------------------------------------------ Television Broadcasts Ltd. 427,000 1,129,691 - ------------------------------------------------------------------------------------------ Television Francaise(1) 8,500 1,314,382
64 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------------------------------------ MEDIA (CONTINUED) TeleWest Communications plc(2) 5,430,000 $ 12,766,883 -------------- 101,415,596 - ------------------------------------------------------------------------------------------ RETAIL: GENERAL - 1.0% Credit Saison Co. Ltd. 290,000 5,746,298 - ------------------------------------------------------------------------------------------ Sonae Investimentos 109,600 5,986,109 -------------- 11,732,407 - ------------------------------------------------------------------------------------------ RETAIL: SPECIALTY - 0.7% Borders Group, Inc.(2) 200,000 7,400,000 - ------------------------------------------------------------------------------------------ Giordano International Ltd. 2,100,000 425,498 -------------- 7,825,498 - ------------------------------------------------------------------------------------------ CONSUMER NON-CYCLICALS - 17.1% - ------------------------------------------------------------------------------------------ BEVERAGES - 2.2% Cadbury Schweppes plc 1,200,000 18,559,280 - ------------------------------------------------------------------------------------------ Cia Cervejaria Brahma, Preference 4,700,000 2,907,513 - ------------------------------------------------------------------------------------------ South African Breweries Ltd. 178,900 3,705,556 -------------- 25,172,349 - ------------------------------------------------------------------------------------------ FOOD - 4.0% Carrefour Supermarche SA 12,000 7,574,882 - ------------------------------------------------------------------------------------------ Cresud SA, Sponsored ADR(2) 95,000 1,543,750 - ------------------------------------------------------------------------------------------ Dairy Farm International Holdings Ltd. 7,080,216 7,575,831 - ------------------------------------------------------------------------------------------ Great Atlantic & Pacific Tea Co., Inc. (The) 593,300 19,615,981 - ------------------------------------------------------------------------------------------ Raision Tehtaat Oy 504,000 9,094,349 -------------- 45,404,793 - ------------------------------------------------------------------------------------------ HEALTHCARE/DRUGS - 5.8% Amgen, Inc.(2) 150,000 9,806,250 - ------------------------------------------------------------------------------------------ BioChem Pharma, Inc.(2) 198,900 5,270,850 - ------------------------------------------------------------------------------------------ Fresenius AG, Preference 40,800 7,583,140 - ------------------------------------------------------------------------------------------ Genzyme Corp. (General Division)(2) 200,000 5,112,500 - ------------------------------------------------------------------------------------------ Gilead Sciences, Inc.(2) 72,700 2,330,944 - ------------------------------------------------------------------------------------------ Glaxo Wellcome plc, Sponsored ADR 200,000 11,962,500 - ------------------------------------------------------------------------------------------ Incyte Pharmaceuticals, Inc. 28,200 962,325 - ------------------------------------------------------------------------------------------ Millennium Pharmaceuticals, Inc.(2) 103,000 1,454,875 - ------------------------------------------------------------------------------------------ Novartis AG 5,000 8,320,087 - ------------------------------------------------------------------------------------------ Pfizer, Inc. 120,000 13,042,500 -------------- 65,845,971 - ------------------------------------------------------------------------------------------ HEALTHCARE/SUPPLIES & SERVICES - 3.6% Gehe AG 80 4,293 - ------------------------------------------------------------------------------------------ Luxottica Group SpA, Sponsored ADR 879,500 13,632,250 - ------------------------------------------------------------------------------------------ Pliva d.d., Sponsored GDR(1) 800,000 12,655,440
65 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------------------------------------ HEALTHCARE/SUPPLIES & SERVICES (CONTINUED) United States Surgical Corp. 307,000 $ 14,006,875 -------------- 40,298,858 - ------------------------------------------------------------------------------------------ HOUSEHOLD GOODS - 1.5% Wella AG, Preference 15,000 16,926,651 - ------------------------------------------------------------------------------------------ ENERGY - 2.1% - ------------------------------------------------------------------------------------------ ENERGY SERVICES & PRODUCERS - 1.9% Coflexip SA, Sponsored ADR 70,000 4,278,750 - ------------------------------------------------------------------------------------------ Global Marine, Inc.(2) 100,000 1,868,750 - ------------------------------------------------------------------------------------------ McDermott International, Inc. 200,000 6,887,500 - ------------------------------------------------------------------------------------------ Transocean Offshore, Inc. 120,818 5,376,401 - ------------------------------------------------------------------------------------------ Western Atlas, Inc.(2) 40,400 3,428,950 -------------- 21,840,351 - ------------------------------------------------------------------------------------------ OIL-INTEGRATED - 0.2% British Petroleum Co. plc, ADR 26,661 2,352,833 - ------------------------------------------------------------------------------------------ FINANCIAL - 17.8% - ------------------------------------------------------------------------------------------ BANKS - 13.0% Amalgamated Banks of South Africa Ltd. 150,000 942,272 - ------------------------------------------------------------------------------------------ Banco Bradesco SA, Preference 683,276,747 5,730,369 - ------------------------------------------------------------------------------------------ Banco Espirito Santo e Comercial de Lisboa SA 180,000 5,405,261 - ------------------------------------------------------------------------------------------ Banco Frances del Rio de la Plata SA, Sponsored ADR 144,450 3,313,322 - ------------------------------------------------------------------------------------------ Banco Latinoamericano de Exportaciones SA, Cl. E 64,400 1,980,300 - ------------------------------------------------------------------------------------------ Banco Pinto & Sotto Mayor SA 131,700 3,268,971 - ------------------------------------------------------------------------------------------ Banco Rio de la Plata SA, ADR 300,000 3,168,750 - ------------------------------------------------------------------------------------------ Bank Austria AG 60,000 4,880,223 - ------------------------------------------------------------------------------------------ Banque Libanaise Pour Le Commercial, GDR(2) 50,000 702,500 - ------------------------------------------------------------------------------------------ Barclays plc 97,000 2,794,997 - ------------------------------------------------------------------------------------------ Bayerische Vereinsbank AG 150,000 12,736,475 - ------------------------------------------------------------------------------------------ Cie Financiere de Paribas(2) 135,000 14,414,556 - ------------------------------------------------------------------------------------------ Credito Italiano SpA 2,291,900 11,997,484 - ------------------------------------------------------------------------------------------ Deutsche Bank AG 150,000 12,682,542 - ------------------------------------------------------------------------------------------ Grupo Financiero Banamex Accival SA de CV, Cl. B(2) 1,676,700 3,175,754 - ------------------------------------------------------------------------------------------ Industrial Finance Corp. of Thailand (The) 1,048,000 215,546 - ------------------------------------------------------------------------------------------ Istituto Bancario San Paolo di Torino 500,000 7,214,986 - ------------------------------------------------------------------------------------------ National Westminster Bank plc 618,070 11,058,681 - ------------------------------------------------------------------------------------------ Northern Trust Corp. 47,600 3,629,500 - ------------------------------------------------------------------------------------------ Skandinaviska Enskilda Banken Group 600,000 10,269,661 - ------------------------------------------------------------------------------------------ UBS AG 50,000 18,591,637
66 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------------------------------------ BANKS (CONTINUED) 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(3) 336,300 $ 9,920,850 -------------- 148,094,637 - ------------------------------------------------------------------------------------------ DIVERSIFIED FINANCIAL - 3.8% American Express Co. 49,000 5,586,000 - ------------------------------------------------------------------------------------------ Associates First Capital Corp., Cl. A 160,000 12,300,000 - ------------------------------------------------------------------------------------------ Fannie Mae 150,000 9,112,500 - ------------------------------------------------------------------------------------------ First NIS Regional Fund(1) 193,700 1,815,937 - ------------------------------------------------------------------------------------------ Housing Development Finance Corp. Ltd.(2) 22,290 1,574,371 - ------------------------------------------------------------------------------------------ Industrial Credit & Investment Corp. of India Ltd., GDR(1) 212,500 2,172,812 - ------------------------------------------------------------------------------------------ Ladbroke Group plc(2) 2,000,000 11,030,515 -------------- 43,592,135 - ------------------------------------------------------------------------------------------ INSURANCE - 1.0% American International Group, Inc. 23,700 3,460,200 - ------------------------------------------------------------------------------------------ Chubb Corp. 100,000 8,037,500 -------------- 11,497,700 - ------------------------------------------------------------------------------------------ INDUSTRIAL - 4.3% - ------------------------------------------------------------------------------------------ INDUSTRIAL SERVICES - 3.4% Adecco SA 10,000 4,509,461 - ------------------------------------------------------------------------------------------ Grupo Elektra SA de CV 491,700 483,709 - ------------------------------------------------------------------------------------------ IHC Caland NV 22,200 1,249,569 - ------------------------------------------------------------------------------------------ Rentokil Initial plc 2,950,000 21,226,030 - ------------------------------------------------------------------------------------------ UNOVA, Inc. 49,300 1,059,950 - ------------------------------------------------------------------------------------------ WPP Group plc 1,500,000 9,867,434 -------------- 38,396,153 - ------------------------------------------------------------------------------------------ MANUFACTURING - 0.7% Powerscreen International plc 959,403 1,479,820 - ------------------------------------------------------------------------------------------ Societe BIC SA 85,932 6,097,988 -------------- 7,577,808 - ------------------------------------------------------------------------------------------ TRANSPORTATION - 0.2% Guangshen Railway Co. Ltd., Sponsored ADR 246,700 1,680,644 - ------------------------------------------------------------------------------------------ TECHNOLOGY - 19.5% - ------------------------------------------------------------------------------------------ AEROSPACE/DEFENSE - 0.9% Rolls-Royce plc 2,366,138 9,765,202 - ------------------------------------------------------------------------------------------ COMPUTER HARDWARE - 2.0% International Business Machines Corp. 100,000 11,481,250 - ------------------------------------------------------------------------------------------ Sun Microsystems, Inc.(2) 250,000 10,859,375 -------------- 22,340,625 - ------------------------------------------------------------------------------------------ COMPUTER SOFTWARE/SERVICES - 3.9% Cap Gemini SA 150,000 23,516,792
67 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------------------------------------ COMPUTER SOFTWARE/SERVICES (CONTINUED) Computer Associates International, Inc. 91,700 $ 5,095,081 - ------------------------------------------------------------------------------------------ First Data Corp. 87,000 2,898,188 - ------------------------------------------------------------------------------------------ Microsoft Corp.(2) 66,000 7,152,750 - ------------------------------------------------------------------------------------------ Misys plc 100,000 5,684,509 -------------- 44,347,320 - ------------------------------------------------------------------------------------------ ELECTRONICS - 3.6% Advanced Micro Devices, Inc.(2) 500,000 8,531,250 - ------------------------------------------------------------------------------------------ National Semiconductor Corp.(2) 1,000,000 13,187,500 - ------------------------------------------------------------------------------------------ Royal Philips Electronics NV 100,000 8,406,162 - ------------------------------------------------------------------------------------------ Sony Corp. 100,000 8,610,440 - ------------------------------------------------------------------------------------------ STMicroelectronics NV(2) 34,000 2,375,750 -------------- 41,111,102 - ------------------------------------------------------------------------------------------ TELECOMMUNICATIONS-TECHNOLOGY - 9.1% Alcatel Alsthom SA 150,000 30,472,811 - ------------------------------------------------------------------------------------------ Cable & Wireless Communications plc(2) 380,000 3,843,088 - ------------------------------------------------------------------------------------------ Cisco Systems, Inc. 61,650 5,675,653 - ------------------------------------------------------------------------------------------ Energis plc(2) 265,600 4,041,354 - ------------------------------------------------------------------------------------------ General Instrument Corp.(2) 600,000 16,312,500 - ------------------------------------------------------------------------------------------ Kinnevik Investments AB Free, Series B 300,000 9,761,820 - ------------------------------------------------------------------------------------------ Pairgain Technologies, Inc.(2) 130,200 2,270,363 - ------------------------------------------------------------------------------------------ QUALCOMM, Inc.(2) 180,000 10,113,750 - ------------------------------------------------------------------------------------------ Scientific-Atlanta, Inc. 434,200 11,017,825 - ------------------------------------------------------------------------------------------ SK Telecommunications Co. Ltd. 8,710 4,063,184 - ------------------------------------------------------------------------------------------ Telecom Italia Mobile SpA 1,000,000 6,115,158 -------------- 103,687,506 - ------------------------------------------------------------------------------------------ UTILITIES - 4.5% - ------------------------------------------------------------------------------------------ TELEPHONE UTILITIES - 4.5% CPT Telefonica del Peru SA, Cl. B 2,720,031 5,450,193 - ------------------------------------------------------------------------------------------ Hellenic Tellecommunication Organization SA 388,888 9,968,863 - ------------------------------------------------------------------------------------------ Portugal Telecom SA 200,000 10,599,824 - ------------------------------------------------------------------------------------------ Telecomunicacoes de Sao Paulo SA, Preference 21,008,000 5,013,119 - ------------------------------------------------------------------------------------------ Telesp Celular SA, Cl. B(2) 21,008,000 1,761,857 - ------------------------------------------------------------------------------------------ Videsh Sanchar Nigam Ltd., GDR(2) 250,000 2,675,000 - ------------------------------------------------------------------------------------------ WorldCom, Inc.(2) 326,200 15,800,313 -------------- 51,269,169 -------------- Total Common Stocks (Cost $838,848,833) 986,800,107
68 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------------------------------------ PREFERRED STOCKS - 0.6% - ------------------------------------------------------------------------------------------ Marschollek, Lautenschlaeger und Partner AG, Non-Vtg. Preferred Stock (Cost $1,603,264) 13,257 $ 6,489,902 UNITS - ------------------------------------------------------------------------------------------ RIGHTS, WARRANTS AND CERTIFICATES - 0.1% - ------------------------------------------------------------------------------------------ American Satellite Network, Inc. Wts., Exp. 6/99 6,250 -- - ------------------------------------------------------------------------------------------ Bank Austria AG Rts., Exp. 7/98 60,000 -- - ------------------------------------------------------------------------------------------ Industrial Finance Corp. of Thailand (The) Rts., Exp. 12/99 528,500 -- - ------------------------------------------------------------------------------------------ Kinnevik Investments AB Free, Series B Rts., Exp. 7/98 300,000 1,410,668 - ------------------------------------------------------------------------------------------ PT Pan Indonesia Bank Wts., Exp. 6/00 415,500 1,292 - ------------------------------------------------------------------------------------------ Telecomunicacoes de Sao Paulo SA, Non-Vtg. Rts., Exp. 7/98 987,329 15,792 - ------------------------------------------------------------------------------------------ TeleWest Communications plc Rts., Exp. 7/98 994,225 -- -------------- Total Rights, Warrants and Certificates (Cost $0) 1,427,752 PRINCIPAL AMOUNT - ------------------------------------------------------------------------------------------ U.S. GOVERNMENT OBLIGATIONS - 2.4% - ------------------------------------------------------------------------------------------ U.S. Treasury Bonds, STRIPS, 13.95%, 11/15/18 (Cost $21,462,424)(4) $ 86,770,000 27,178,967 - ------------------------------------------------------------------------------------------ REPURCHASE AGREEMENTS - 11.1% - ------------------------------------------------------------------------------------------ Repurchase agreement with Salomon Barney Holdings, Inc., 5.90%, dated 6/30/98, to be repurchased at $125,920,634 on 7/1/98, collateralized by U.S. Treasury Bonds, 8.75%-10.625%, 2/15/15-2/15/19, with a value of $129,247,516 (Cost $125,900,000) 125,900,000 125,900,000 - ------------------------------------------------------------------------------------------ TOTAL INVESTMENTS, AT VALUE (COST $987,814,520) 101.1% 1,147,796,728 - ------------------------------------------------------------------------------------------ LIABILITIES IN EXCESS OF OTHER ASSETS (1.1) (11,983,559) ------------ -------------- NET ASSETS 100.0% $1,135,813,169 ------------ -------------- ------------ --------------
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 $32,469,671 or 2.86% of the Fund's net assets as of June 30, 1998. 2. Non-income producing security. 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. 4. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 69 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- Distribution of investments by country of issue, as a percentage of total investments at value, is as follows:
COUNTRY MARKET VALUE PERCENT - --------------------------------------------------------------------- United States $ 461,259,330 40.1% - --------------------------------------------------------------------- Great Britain 163,967,060 14.3 - --------------------------------------------------------------------- France 138,148,231 12.0 - --------------------------------------------------------------------- Germany 91,478,872 8.0 - --------------------------------------------------------------------- Italy 38,959,879 3.4 - --------------------------------------------------------------------- Switzerland 31,421,186 2.7 - --------------------------------------------------------------------- Portugal 28,266,715 2.5 - --------------------------------------------------------------------- Brazil 26,672,332 2.3 - --------------------------------------------------------------------- Japan 26,300,750 2.3 - --------------------------------------------------------------------- Sweden 21,442,149 1.9 - --------------------------------------------------------------------- Mexico 20,094,062 1.8 - --------------------------------------------------------------------- Argentina 13,067,580 1.1 - --------------------------------------------------------------------- Singapore 10,257,528 0.9 - --------------------------------------------------------------------- Greece 9,968,863 0.9 - --------------------------------------------------------------------- The Netherlands 9,655,731 0.8 - --------------------------------------------------------------------- Canada 9,108,350 0.8 - --------------------------------------------------------------------- Finland 9,094,349 0.8 - --------------------------------------------------------------------- South Africa 7,279,828 0.6 - --------------------------------------------------------------------- India 6,422,183 0.6 - --------------------------------------------------------------------- Peru 6,053,943 0.5 - --------------------------------------------------------------------- Austria 4,880,223 0.4 - --------------------------------------------------------------------- Korea, Republic of (South) 4,063,184 0.4 - --------------------------------------------------------------------- Lebanon 2,066,500 0.2 - --------------------------------------------------------------------- Panama 1,980,300 0.2 - --------------------------------------------------------------------- Russia 1,815,938 0.2 - --------------------------------------------------------------------- China 1,680,644 0.1 - --------------------------------------------------------------------- Hong Kong 1,555,189 0.1 - --------------------------------------------------------------------- Malaysia 618,995 0.1 - --------------------------------------------------------------------- Thailand 215,546 0.0 - --------------------------------------------------------------------- Indonesia 1,291 0.0 --------------- --------- Total $ 1,147,796,728 100.0% --------------- --------- --------------- ---------
See accompanying Notes to Financial Statements. 70 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- MORTGAGE-BACKED OBLIGATIONS - 22.5% - ------------------------------------------------------------------- GOVERNMENT AGENCY - 17.6% - ------------------------------------------------------------------- FHLMC/FNMA/SPONSORED - 7.2% Federal Home Loan Mortgage Corp.: Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 151, Cl. F, 9%, 5/15/21 $ 1,500,000 $ 1,600,533 Interest-Only Stripped Mtg.-Backed Security, Series 177, Cl. B, 10.017%, 7/1/26(2) 10,891,671 2,465,943 - ------------------------------------------------------------------- Federal National Mortgage Assn.: 6.50%, 7/25/12(3) 4,500,000 4,525,335 7%, 7/1/12(3) 7,140,000 7,269,448 7.50%, 8/1/25 784,938 805,402 Interest-Only Stripped Mtg.-Backed Security, Trust 276, Cl. 2, 13.517%, 10/1/24(2) 3,559,530 936,045 Principal-Only Stripped Mtg.-Backed Security, Trust 277-C1, 3.279%, 4/1/27(4) 1,028,950 876,537 ------------ 18,479,243 - ------------------------------------------------------------------- GNMA/GUARANTEED - 10.4% Government National Mortgage Assn.: 7%, 11/20/25-3/15/28 8,424,716 8,565,220 7%, 7/1/28(3) 10,090,000 10,250,835 7.50%, 2/15/27 3,980,506 4,092,877 8%, 11/15/25-5/15/26 3,656,086 3,789,132 ------------ 26,698,064 - ------------------------------------------------------------------- PRIVATE - 4.9% - ------------------------------------------------------------------- COMMERCIAL - 3.5% Amresco Commercial Mortgage Funding I Corp., Multiclass Mtg. Pass-Through Certificates, Series 1997-C1, Cl. G, 7%, 6/17/29(5) 100,000 93,250 - ------------------------------------------------------------------- Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates: Series 1997-D4, Cl. B1, 7.525%, 4/14/29(6) 375,000 362,988 Series 1997-D5, Cl. B1, 6.93%, 2/14/41 300,000 274,125 Series 1997-D5, Cl. B2, 6.93%, 2/14/41 1,250,000 1,114,453 - ------------------------------------------------------------------- CRIIMI MAE Trust I, Collateralized Mtg. Obligations, Series 1996-C1, Cl. A2, 7.56%, 8/30/05(7) 100,000 101,031 - ------------------------------------------------------------------- CS First Boston Mortgage Securities Corp., Mtg. Pass-Through Certificates, Series 1997-C2, Cl. F, 7.46%, 5/17/14 150,000 144,000 - ------------------------------------------------------------------- FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1994-C1, Cl. 2-G, 8.70%, 9/25/25(5) 153,594 157,818 - ------------------------------------------------------------------- General Motors Acceptance Corp.: Collateralized Mtg. Obligations, Series 1997-C1, Cl. G, 7.414%, 11/15/11 440,000 418,275 Collateralized Mtg. Obligations, Series 1997-C2, Cl. F, 6.75%, 4/16/29 250,000 216,094 Interest-Only Stripped Mtg.-Backed Security, Series 1997-C1, Cl. X, 8.452%, 7/15/27(2) 4,228,953 408,358 - ------------------------------------------------------------------- Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates, Series 1995-C2, Cl. D, 8.26%, 6/15/21(6) 336,523 346,699
71 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- COMMERCIAL (CONTINUED) Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates: Series 1996-C1, Cl. F, 7.438%, 2/15/28(5)(6) $ 162,744 $ 137,722 Series 1997-HF1, Cl. F, 6.86%, 2/15/10(5) 150,000 140,109 Series 1997-RR, Cl. D, 7.671%, 4/30/39(5) 450,000 439,453 Series 1997-RR, Cl. E, 7.74%, 4/30/39(5)(6) 300,000 285,562 Series 1997-RR, Cl. F, 7.739%, 4/30/39(5) 600,000 501,562 Series 1997-XL1, Cl. G, 7.695%, 10/3/30(5)(6) 390,000 387,380 - ------------------------------------------------------------------- NationsCommercial Corp., NB Commercial Mtg. Pass-Through Certificates, Series-DMC, Cl. C, 8.921%, 8/12/11(5) 200,000 216,313 - ------------------------------------------------------------------- Nykredit AS: 8% Cv. Bonds, 10/1/26(DKK) 6,900,000 1,027,222 Mtg.-Backed Security, Series ANN, 6%, 10/1/26(DKK) 3,214,000 465,952 - ------------------------------------------------------------------- Realkredit Danmark, Mtg.-Backed Security, 6%, 10/1/26(DKK) 3,217,000 467,322 - ------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates: Series 1992-CHF, Cl. D, 8.25%, 12/25/20 106,964 106,868 Series 1993-C1, Cl. D, 9.45%, 5/25/24 91,000 91,067 Series 1994-C2, Cl. E, 8%, 4/25/25 1,011,945 1,020,895 - ------------------------------------------------------------------- Structured Asset Securities Corp.: Commercial Mtg. Pass-Through Certificates, Series 1997-LLI, Cl. F, 7.30%, 4/12/12(5) 200,000 194,625 Multiclass Pass-Through Certificates, Series 1995-C4, Cl. E, 8.74%, 6/25/26(5)(6) 46,290 47,679 ------------ 9,166,822 - ------------------------------------------------------------------- MULTI-FAMILY - 0.7% Mortgage Capital Funding, Inc.: Commercial Mtg. Pass-Through Certificates, Series 1997-MC1, Cl. F, 7.452%, 5/20/07(5) 63,720 61,808 Multifamily Mtg. Pass-Through Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06(7) 800,000 761,500 - ------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Series 1996-CL, Cl. F, 9.209%, 1/20/28(6) 1,000,000 880,625 ------------ 1,703,933 - ------------------------------------------------------------------- RESIDENTIAL - 0.7% CS First Boston Mortgage Securities Corp., Mtg. Pass-Through Certificates: Series 1997-C1, Cl. F, 7.50%, 6/20/13(5) 100,000 98,850 Series 1997-C1, Cl. G, 7.50%, 6/20/14(5) 100,000 94,500 Series 1997-C1, Cl. H, 7.50%, 8/20/14(5) 60,000 48,900 Series 1997-C2, Cl. H, 7.46%, 1/17/35 100,000 82,250 - ------------------------------------------------------------------- First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates Series 1997-CHL1: 6.929%, 2/25/11(5)(6) 600,000 528,600 8.129%, 5/25/08(5)(6) 350,000 360,045 - ------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Series 1996-B, Cl. 1, 7.132%, 4/25/26 390,233 290,846 - ------------------------------------------------------------------- Salomon, Inc., Commercial Mtg. Pass-Through Certificates, Series 1998-A1, 5%, 12/25/20(5) 447,887 429,972 ------------ 1,933,963 ------------ Total Mortgage-Backed Obligations (Cost $57,992,165) 57,982,025
72 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 27.0% - ------------------------------------------------------------------- TREASURY - 27.0% U.S. Treasury Bonds: 10.75%, 8/15/05 $ 2,750,000 $ 3,578,440 11.875%, 11/15/03 7,200,000 9,281,253 5.50%, 1/31/03 1,000,000 999,376 6%, 2/15/26(8) 1,730,000 1,800,283 6.125%, 11/15/27(9) 2,390,000 2,561,784 6.50%, 11/15/26 6,340,000 7,043,347 8%, 11/15/21 800,000 1,031,501 8.125%, 8/15/19 500,000 645,469 9.375%, 2/15/06 3,205,000 3,960,181 - ------------------------------------------------------------------- U.S. Treasury Nts.: 10.75%, 5/15/03 2,700,000 3,290,628 6.25%, 10/31/01 4,315,000 4,405,347 6.25%, 2/15/03(10) 2,100,000 2,161,690 6.50%, 10/15/06 19,810,000 21,048,145 6.50%, 5/15/05 4,810,000 5,079,062 6.50%, 8/15/05 2,450,000 2,587,048 ------------ Total U.S. Government Obligations (Cost $68,347,853) 69,473,554 - ------------------------------------------------------------------- FOREIGN GOVERNMENT OBLIGATIONS - 14.8% - ------------------------------------------------------------------- ARGENTINA - 2.4% Argentina (Republic of) Bonds: 5%, 12/20/02(JPY) 60,000,000 435,047 Bonos de Consolidacion de Deudas, Series I, 3.108%, 4/1/07(6)(ARP) 1,240,405 871,354 Bonos de Consolidacion de Deudas, Series I, 5.667%, 4/1/01(6) 122,385 116,483 Series L, 6.625%, 3/31/05(6) 646,000 572,679 - ------------------------------------------------------------------- Argentina (Republic of) Global Bonds, Unsec Nts., Series BGL5, 11.375%, 1/30/17 990,000 1,056,330 - ------------------------------------------------------------------- Argentina (Republic of) Nts., Series REGS, 11.75%, 2/12/07(ARP) 390,000 363,719 - ------------------------------------------------------------------- Argentina (Republic of) Par Bonds, 5.75%, 3/31/23(11) 770,000 573,169 - ------------------------------------------------------------------- Argentina (Republic of) Sr. Unsec. Unsub. Bonds, 11%, 10/9/06 50,000 52,750 - ------------------------------------------------------------------- Argentina (Republic of) Unsec. Unsub. Medium-Term Nts.: 5.50%, 3/27/01(JPY) 170,000,000 1,275,321 8.75%, 7/10/02(ARP) 660,000 569,318 - ------------------------------------------------------------------- Banco Hipotecario Nacional (Argentina) Medium-Term Nts., 10.625%, 8/7/06(9) 400,000 405,000 ------------ 6,291,170 - ------------------------------------------------------------------- BRAZIL - 1.2% Brazil (Federal Republic of) Bonds, Series RG, 6.688%, 4/15/12(6) 1,000,000 699,370 - ------------------------------------------------------------------- Brazil (Federal Republic of) Capitalization Bonds, 8%, 4/15/14 2,419,037 1,787,064 - ------------------------------------------------------------------- Brazil (Federal Republic of) Eligible Interest Bonds, 6.625%, 4/15/06(6) 679,000 560,175 ------------ 3,046,609
73 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- BULGARIA - 0.2% Bulgaria (Republic of) Front-Loaded Interest Reduction Bearer Bonds, Tranche A, 2.263%, 7/28/12(11) $ 510,000 $ 314,288 - ------------------------------------------------------------------- Bulgaria (Republic of) Interest Arrears Bonds, 6.563%, 7/28/11(6) 160,000 114,500 ------------ 428,788 - ------------------------------------------------------------------- CANADA - 0.6% Canada (Government of) Bonds: 9.75%, 6/1/01(CAD) 1,155,000 879,731 Series A-33, 11.50%, 9/1/00(CAD) 760,000 582,411 ------------ 1,462,142 - ------------------------------------------------------------------- ECUADOR - 0.1% Ecuador (Republic of) Disc. Bonds, 6.625%, 2/28/25(6) 50,000 34,875 - ------------------------------------------------------------------- Ecuador (Republic of) Past Due Interest Bonds, 6.625%, 2/27/15(6) 344,927 193,159 ------------ 228,034 - ------------------------------------------------------------------- GERMANY - 2.1% Germany (Republic of) Bonds: Series 97, 6%, 7/4/07(DEM) 2,535,000 1,526,076 Series 98, 5.25%, 1/4/08(DEM) 2,490,000 1,425,710 - ------------------------------------------------------------------- Germany (Republic of) Nts., Series 98, 4%, 3/17/00(DEM) 4,390,000 2,429,337 ------------ 5,381,123 - ------------------------------------------------------------------- GREAT BRITAIN - 1.2% United Kingdom Treasury Bonds: 8.50%, 12/7/05(GBP) 1,550,000 2,956,166 9%, 8/6/12(GBP) 40,000 86,898 ------------ 3,043,064 - ------------------------------------------------------------------- GREECE - 0.1% Hellenic Republic Government Bonds, 8.90%, 4/1/03(GRD) 75,600,000 247,896 - ------------------------------------------------------------------- HUNGARY - 0.1% Hungary (Government of) Bonds, Series 99-G, 16.50%, 7/24/99(HUF) 44,000,000 200,914 - ------------------------------------------------------------------- INDONESIA - 0.1% PT Bank Negara Indonesia Sr. Nts., 7.625%, 2/15/07 497,000 294,473 - ------------------------------------------------------------------- ITALY - 1.0% Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali: 10.50%, 4/1/05(ITL) 175,000,000 129,767 8.50%, 1/1/04(ITL) 2,180,000,000 1,444,462 9%, 10/1/03(ITL) 1,360,000,000 914,063 ------------ 2,488,292 - ------------------------------------------------------------------- IVORY COAST - 0.1% Ivory Coast (Government of) Past Due Interest Bonds, 2%, 3/29/18(7)(11) 587,000 218,658 - ------------------------------------------------------------------- JORDAN - 0.0% Hashemite (Kingdom of Jordan) Bonds, Series DEF, 5%, 12/23/23(11) 210,000 148,313 - ------------------------------------------------------------------- KOREA, REPUBLIC OF (SOUTH) - 0.2% Korea (Republic of) Nts., 8.281%, 4/8/00(5)(6) 580,000 547,520
74 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- MEXICO - 1.2% United Mexican States Bonds: 10.375%, 1/29/03(DEM) 725,000 $ 448,663 16.50%, 9/1/08(5)(GBP) 20,000 50,692 8.125%, 9/10/04(11)(DEM) 750,000 446,243 - ------------------------------------------------------------------- United Mexican States Collateralized Fixed Rate Par Bonds: Series B, 6.25%, 12/31/19 600,000 498,375 Series W-A, 6.25%, 12/31/19 250,000 207,656 Series W-B, 6.25%, 12/31/19 1,600,000 1,329,000 - ------------------------------------------------------------------- United Mexican States Petroleos Mexicanos Gtd. Unsec. Unsub. Nts., 7.875%, 3/2/99(CAD) 200,000 136,854 ------------ 3,117,483 - ------------------------------------------------------------------- NEW ZEALAND - 0.3% New Zealand (Government of) Bonds: 8%, 2/15/01(NZD) 500,000 264,731 8%, 4/15/04(NZD) 1,115,000 613,782 ------------ 878,513 - ------------------------------------------------------------------- NORWAY - 0.4% Norway (Government of) Bonds, 9.50%, 10/31/02(NOK) 7,810,000 1,170,145 - ------------------------------------------------------------------- PANAMA - 0.1% Panama (Government of) Past Due Interest Debs., 6.563%, 7/17/16(6) 229,123 175,852 - ------------------------------------------------------------------- PERU - 0.5% Peru (Republic of) Sr. Nts., Zero Coupon, 4.534%, 2/28/16(12) 3,378,514 1,418,976 - ------------------------------------------------------------------- POLAND - 0.8% Poland (Republic of) Bonds: 14%, 2/12/00(PLZ) 2,160,000 571,959 16%, 2/12/99(PLZ) 450,000 124,675 Series 0600, 14%, 6/12/00(PLZ) 1,000,000 263,835 Series 5 yr., 12%, 2/12/02(PLZ) 1,300,000 319,965 - ------------------------------------------------------------------- Poland (Republic of) Past Due Interest Bonds, 4%, 10/27/14(11) 765,000 690,891 ------------ 1,971,325 - ------------------------------------------------------------------- RUSSIA - 0.6% City of St. Petersburg Sr. Unsub. Nts., 9.50%, 6/18/02(7) 180,000 139,950 - ------------------------------------------------------------------- Ministry of Finance (Russian Government) Unsec. Unsub. Bonds, 10%, 6/26/07(7) 320,000 241,600 - ------------------------------------------------------------------- Russia (Government of) Bonds: 18.29%, 4/28/99(RUR) 860,000 124,233 29.80%, 7/14/99(RUR) 1,500,000 198,313 Series 2, 29.80%, 7/14/99(RUR) 745,000 98,495 Series 3, 18.29%, 4/28/99(RUR) 790,000 114,121 - ------------------------------------------------------------------- Russia (Government of) Debs., Series 19 yr., 6.625%, 12/15/15(6) 282,788 157,213 - ------------------------------------------------------------------- Russia (Government of) Federal Loan Bonds, Series 5022, 15%, 2/23/00(RUR) 5,417,000 466,435 ------------ 1,540,360 - ------------------------------------------------------------------- SOUTH AFRICA - 0.3% South Africa (Republic of) Bonds, Series 153, 13%, 8/31/10(ZAR) 4,600,000 689,364 - ------------------------------------------------------------------- SWEDEN - 0.1% Sweden (Kingdom of) Bonds, Series 1037, 8%, 8/15/07(SEK) 1,600,000 245,039
75 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- TURKEY - 0.5% Turkey (Republic of) Treasury Bills, Zero Coupon: 85.002%, 1/27/99(12)(TRL) 220,300,000,000 $ 574,868 88.982%, 9/30/98(12)(TRL) 250,000,000,000 806,287 ------------ 1,381,155 - ------------------------------------------------------------------- VENEZUELA - 0.6% Venezuela (Republic of) Bonds, 9.25%, 9/15/27 990,000 772,200 - ------------------------------------------------------------------- Venezuela (Republic of) Disc. Bonds, Series DL, 6.625%, 12/18/07(6) 678,570 556,428 - ------------------------------------------------------------------- Venezuela (Republic of) New Money Bonds, Series A, 6.75%, 12/18/05(6) 220,589 181,435 ------------ 1,510,063 - ------------------------------------------------------------------- VIETNAM - 0.0% Vietnam (Government of) Bonds, 3%, 3/12/28(6) 54,000 19,238 ------------ Total Foreign Government Obligations (Cost $39,942,771) 38,144,509 - ------------------------------------------------------------------- LOAN PARTICIPATIONS - 0.2% - ------------------------------------------------------------------- Jamaica (Government of) 1990 Refinancing Agreement Nts., Tranche A, 6.50%, 10/16/00(5)(6) 31,250 30,000 - ------------------------------------------------------------------- Morocco (Kingdom of) Loan Participation Agreement, Tranche A, 6.563%, 1/1/09(5)(6) 740,000 632,700 ------------ Total Loan Participations (Cost $682,009) 662,700 - ------------------------------------------------------------------- CORPORATE BONDS AND NOTES - 33.0% - ------------------------------------------------------------------- AEROSPACE - 1.1% America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 450,000 481,500 - ------------------------------------------------------------------- Amtran, Inc., 10.50% Sr. Nts., 8/1/04 150,000 158,625 - ------------------------------------------------------------------- Atlas Air, Inc.: 10.75% Sr. Nts., 8/1/05 125,000 133,125 12.25% Pass-Through Certificates, 12/1/02 350,000 386,750 9.25% Sr. Nts., 4/15/08(7) 300,000 300,000 - ------------------------------------------------------------------- Constellation Finance LLC, 9.80% Airline Receivable Asset-Backed Nts., Series 1997-1, 1/1/01(5) 175,000 177,625 - ------------------------------------------------------------------- Greater Toronto Airport, 5.40% Debs., 12/3/02(CAD) 240,000 162,345 - ------------------------------------------------------------------- Pegasus Aircraft Lease Securitization Trust, 11.76% Sr. Nts., Cl. B, 6/15/04(5) 93,438 96,475 - ------------------------------------------------------------------- SC International Services, Inc., 9.25% Sr. Sub. Nts., Series B, 9/1/07 325,000 338,000 - ------------------------------------------------------------------- Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 580,000 611,900 ------------ 2,846,345 - ------------------------------------------------------------------- CHEMICALS - 0.8% ClimaChem, Inc., 10.75% Gtd. Sr. Unsec. Nts., Series B, 12/1/07 150,000 157,125 - ------------------------------------------------------------------- Harris Chemical North America, Inc., 10.75% Gtd. Sr. Sub. Nts., 10/15/03 100,000 105,625 - ------------------------------------------------------------------- ICO, Inc., 10.375% Sr. Nts., 6/1/07 50,000 51,250 - ------------------------------------------------------------------- Laroche Industries, Inc., 9.50% Sr. Sub. Nts., Series B, 9/15/07 150,000 147,000 - ------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 140,000 154,875 - ------------------------------------------------------------------- PCI Chemicals Canada, Inc., 9.25% Gtd. Nts., 10/15/07 175,000 171,937 - ------------------------------------------------------------------- Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 200,000 199,000
76 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- CHEMICALS (CONTINUED) Polytama International Finance BV, 11.25% Gtd. Sec. Nts., 6/15/07 $ 150,000 $ 63,562 - ------------------------------------------------------------------- Sovereign Specialty Chemicals, Inc., 9.50% Sr. Unsec. Sub. Nts., Series B, 8/1/07 425,000 435,625 - ------------------------------------------------------------------- Sterling Chemicals, Inc.: 11.25% Sr. Sub. Nts., 4/1/07 50,000 49,750 11.75% Sr. Unsec. Sub. Nts., 8/15/06 475,000 477,375 ------------ 2,013,124 - ------------------------------------------------------------------- CONSUMER DURABLES - 0.3% Holmes Products Corp., 9.875% Gtd. Sr. Unsec. Sub. Nts., Series B, 11/15/07 200,000 207,000 - ------------------------------------------------------------------- Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., Series B, 7/15/02 300,000 312,000 - ------------------------------------------------------------------- IHF Holdings, Inc., 0%/15% Sr. Sub. Disc. Nts., Series B, 11/15/04(13) 135,000 101,925 - ------------------------------------------------------------------- TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(5) 100,000 117,346 ------------ 738,271 - ------------------------------------------------------------------- CONSUMER NON-DURABLES - 0.7% AKI Holdings, Inc.: 0%/13.50% Sr. Disc. Debs., 7/1/09(7)(13) 150,000 79,500 10.50% Sr. Nts., 7/1/08(7) 100,000 101,000 - ------------------------------------------------------------------- American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05 200,000 203,000 - ------------------------------------------------------------------- Chattem, Inc., 8.875% Sr. Sub. Nts., 4/1/08(7) 100,000 100,000 - ------------------------------------------------------------------- Galey & Lord, Inc., 9.125% Sr. Unsec. Sub. Nts., 3/1/08 400,000 388,000 - ------------------------------------------------------------------- Indorayon International Finance Co. BV, 10% Gtd. Unsec. Unsub. Nts., 3/29/01(5) 100,000 60,000 - ------------------------------------------------------------------- Phillips-Van Heusen Corp., 9.50% Sr. Sub. Nts., 5/1/08(7) 200,000 200,750 - ------------------------------------------------------------------- Revlon Consumer Products Corp., 8.625% Sr. Unsec. Sub. Nts., 2/1/08 100,000 100,625 - ------------------------------------------------------------------- Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts., 10.085%, 3/15/01(12) 375,000 292,500 - ------------------------------------------------------------------- Styling Technology Corp., 10.875% Sr. Sub. Nts., 7/1/08(7) 100,000 102,000 - ------------------------------------------------------------------- William Carter Co., 10.375% Sr. Sub. Nts., Series A, 12/1/06 135,000 144,450 - ------------------------------------------------------------------- Williams (J. B.) Holdings, Inc., 12% Sr. Nts., 3/1/04(5) 100,000 102,500 ------------ 1,874,325 - ------------------------------------------------------------------- ENERGY - 2.5% Belden & Blake Corp., 9.875% Sr. Sub. Nts., 6/15/07 100,000 98,250 - ------------------------------------------------------------------- Chesapeake Energy Corp.: 9.125% Sr. Unsec. Nts., 4/15/06 100,000 98,750 9.625% Sr. Nts., 5/1/05(7) 250,000 251,875 - ------------------------------------------------------------------- Clark Refinancing & Marketing, Inc., 8.875% Sr. Sub. Nts., 11/15/07 245,000 245,612 - ------------------------------------------------------------------- Clark USA, Inc., 10.875% Sr. Nts., Series B, 12/1/05 125,000 136,562 - ------------------------------------------------------------------- Dailey International, Inc., 9.50% Sr. Unsec. Nts., Series B, 2/15/08 400,000 392,000 - ------------------------------------------------------------------- Denbury Management, Inc., 9% Sr. Sub. Nts., 3/1/08 400,000 384,000 - ------------------------------------------------------------------- DI Industries, Inc., 8.875% Sr. Nts., 7/1/07 75,000 72,750 - ------------------------------------------------------------------- Empresa Electric Del Norte, 10.50% Sr. Debs., 6/15/05(5) 100,000 102,500 - ------------------------------------------------------------------- Forcenergy, Inc.: 8.50% Sr. Sub. Nts., Series B, 2/15/07 90,000 85,950 9.50% Sr. Sub. Nts., 11/1/06 400,000 403,000
77 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- ENERGY (CONTINUED) Gothic Energy Corp., Units (each unit consists of $1,000 principal amount of 0%/14.125% sr. disc. nts., 5/1/06 and 7.933 warrants to purchase 7.933 shares of common stock)(7)(13)(14) $ 275,000 $ 160,875 - ------------------------------------------------------------------- Gothic Production Corp., 11.125% Sr. Sec. Nts., 5/1/05(7) 200,000 192,500 - ------------------------------------------------------------------- Grant Geophysical, Inc., 9.75% Sr. Nts., 2/15/08 600,000 598,500 - ------------------------------------------------------------------- J. Ray McDermott SA, 9.375% Sr. Sub. Bonds, 7/15/06 215,000 232,200 - ------------------------------------------------------------------- Ocean Rig Norway AS, 10.25% Gtd. Sr. Sec. Nts., 6/1/08(7) 250,000 238,750 - ------------------------------------------------------------------- P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., 5/15/08(7) 300,000 309,750 - ------------------------------------------------------------------- Petroleum Heat & Power Co., Inc., 9.375% Sub. Debs., 2/1/06 425,000 384,625 - ------------------------------------------------------------------- Pogo Producing Co., 8.75% Sr. Sub. Nts., 5/15/07 370,000 377,400 - ------------------------------------------------------------------- RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08 600,000 606,000 - ------------------------------------------------------------------- Statia Terminals International/Statia Terminals (Canada), Inc., 11.75% First Mtg. Nts., Series B, 11/15/03 175,000 184,625 - ------------------------------------------------------------------- Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 355,000 359,437 - ------------------------------------------------------------------- Universal Compression Holdings, Inc.: 0%/11.375% Sr. Disc. Nts., 2/15/09(7)(13) 400,000 238,000 0%/9.875% Sr. Disc. Nts., 2/15/08(7)(13) 500,000 317,500 ------------ 6,471,411 - ------------------------------------------------------------------- FINANCIAL - 3.8% AMRESCO, Inc.: 10% Sr. Sub. Nts., Series 97-A, 3/15/04 100,000 103,250 9.875% Sr. Sub. Nts., Series 98-A, 3/15/05 300,000 307,125 - ------------------------------------------------------------------- Bakrie Investindo, Zero Coupon Promissory Nts., 7/10/98(5)(15)(IDR) 1,000,000,000 16,892 - ------------------------------------------------------------------- Banco del Atlantico SA, 7.875% Eurobonds, 11/5/98(5) 370,000 370,925 - ------------------------------------------------------------------- Banco Nacional de Mexico SA, 11% Sub. Exchangeable Capital Debs., 7/15/03(5) 130,000 134,225 - ------------------------------------------------------------------- Bank Plus Corp., 12% Sr. Nts., 7/18/07 7,000 8,015 - ------------------------------------------------------------------- Bayerische Vereinsbank AG, 5% Sec. Nts., Series 661, 7/28/04(DEM) 4,055,000 2,279,620 - ------------------------------------------------------------------- CB Richard Ellis Services, Inc., 8.875% Sr. Unsec. Sub. Nts., 6/1/06 250,000 249,375 - ------------------------------------------------------------------- Deutsche Pfandbrief & Hypobank, 4.75% Sec. Nts., Series 452, 3/20/03(DEM) 2,800,000 1,563,093 - ------------------------------------------------------------------- Emergent Group, Inc., 10.75% Sr. Nts., Series B, 9/15/04 80,000 58,800 - ------------------------------------------------------------------- First Nationwide Holdings, Inc., 10.625% Sr. Sub. Nts., 10/1/03 120,000 133,200 - ------------------------------------------------------------------- Ford Motor Credit Co., 5.25% Bonds, 6/16/08(DEM) 1,350,000 745,364 - ------------------------------------------------------------------- Hypothekenbank in Essen AG: 4.50% Sec. Nts., Series 478, 5/2/03(DEM) 575,000 317,589 5.25% Sec. Nts., Series 502, 1/22/08(DEM) 890,000 501,763 5.50% Sec. Nts., Series 459, 2/20/07(DEM) 830,000 477,119 - ------------------------------------------------------------------- Industrial Bank of Japan Preferred Capital Co. (The) LLC, 8.79% Bonds, 12/29/49(6)(7) 400,000 366,198 - ------------------------------------------------------------------- Kreditanstalt fuer Wiederaufbau, 5% Bonds, 1/4/09(DEM) 650,000 361,576 - ------------------------------------------------------------------- Local Financial Corp., 11% Sr. Nts., 9/8/04(7) 150,000 164,250 - ------------------------------------------------------------------- Ocwen Capital Trust I, 10.875% Gtd. Bonds, 8/1/27 150,000 164,250
78 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- FINANCIAL (CONTINUED) Ocwen Financial Corp., 11.875% Nts., 10/1/03 $ 150,000 $ 170,250 - ------------------------------------------------------------------- Ongko International Finance Co. BV, 10.50% Gtd. Nts., 3/29/04(7)(16) 90,000 13,387 - ------------------------------------------------------------------- PT Polysindo Eka Perkasa: Zero Coupon Nts., Series 2, 7/15/98(5)(15)(IDR) 164,300,000 2,220 Zero Coupon Promissory Nts., 7/14/98(5)(15) 100,000 35,000 - ------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts., Series B, 4/1/08 350,000 347,375 - ------------------------------------------------------------------- SBS Agro Finance BV Bonds, 10.25%, 7/21/00 339,000 259,335 - ------------------------------------------------------------------- Southern Pacific Funding Corp., 11.50% Sr. Nts., 11/1/04 250,000 248,750 - ------------------------------------------------------------------- Veritas Capital Trust, 10% Gtd. Debs., 1/1/28(5) 100,000 105,250 - ------------------------------------------------------------------- Veritas Holdings, Inc., 9.625% Sr. Nts., 12/15/03 129,000 135,772 - ------------------------------------------------------------------- Wilshire Financial Services Group, Inc., 13% Nts., 1/1/04 60,000 65,250 ------------ 9,705,218 - ------------------------------------------------------------------- FOOD & DRUG - 0.8% Ameriking, Inc., 10.75% Sr. Nts., 12/1/06 125,000 134,375 - ------------------------------------------------------------------- Carrols Corp., 11.50% Sr. Nts., 8/15/03 100,000 104,750 - ------------------------------------------------------------------- Fleming Cos., Inc.: 10.50% Sr. Sub. Nts., Series B, 12/1/04 50,000 52,250 10.625% Sr. Sub. Nts., Series B, 7/31/07 850,000 890,375 - ------------------------------------------------------------------- Pathmark Stores, Inc., 0%/10.75% Jr. Sub. Deferred Coupon Nts., 11/1/03(13) 200,000 169,000 - ------------------------------------------------------------------- Randall's Food Markets, Inc., 9.375% Sr. Sub. Nts., Series B, 7/1/07 350,000 371,000 - ------------------------------------------------------------------- Shoppers Food Warehouse Corp., 9.75% Sr. Nts., 6/15/04 155,000 172,050 - ------------------------------------------------------------------- Stater Brothers Holdings, Inc., 9% Sr. Unsec. Sub. Nts., 7/1/04 125,000 128,125 ------------ 2,021,925 - ------------------------------------------------------------------- FOOD/TOBACCO - 0.6% Aurora Foods, Inc., 8.75% Sr. Sub. Nts., 7/1/08(7) 150,000 151,687 - ------------------------------------------------------------------- Del Monte Foods Co., 0%/12.50% Sr. Disc. Nts., 12/15/07(7)(13) 100,000 65,500 - ------------------------------------------------------------------- Eagle Family Foods, Inc., 8.75% Sr. Sub. Nts., 1/15/08(7) 50,000 49,000 - ------------------------------------------------------------------- Favorite Brands International, Inc., 10.75% Sr. Nts., 5/15/06(7) 150,000 152,250 - ------------------------------------------------------------------- Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., 2/1/05(7) 100,000 102,000 - ------------------------------------------------------------------- Purina Mills, Inc., 9% Sr. Sub. Nts., 3/15/10(7) 250,000 258,125 - ------------------------------------------------------------------- SmithField Foods, Inc., 7.625% Sr. Sub. Nts., 2/15/08(7) 400,000 406,000 - ------------------------------------------------------------------- Sparkling Spring Water Group Ltd., 11.50% Sr. Sec. Sub. Nts., 11/15/07 200,000 210,000 - ------------------------------------------------------------------- Windy Hill Pet Food, Inc., 9.75% Sr. Sub. Nts., 5/15/07 150,000 157,500 ------------ 1,552,062 - ------------------------------------------------------------------- FOREST PRODUCTS/CONTAINERS - 0.9% Consumers International, Inc., 10.25% Sr. Sec. Nts., 4/1/05(5) 250,000 268,750 - ------------------------------------------------------------------- Fletcher Challenge Finance U.S.A., Inc., 8.05% Debs., 6/15/03(NZD) 80,000 40,559 - ------------------------------------------------------------------- Fletcher Challenge Ltd.: 10% Cv. Unsec. Sub. Nts., 4/30/05(NZD) 60,000 33,549 14.50% Cv. Sub. Nts., 9/30/00(NZD) 60,000 34,592 - ------------------------------------------------------------------- Florida Coast Paper Co. LLC, 12.75% First Mtg. Nts., 6/1/03 230,000 257,025
79 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- FOREST PRODUCTS/CONTAINERS (CONTINUED) Four M Corp., 12% Sr. Nts., Series B, 6/1/06(5) $ 125,000 $ 134,375 - ------------------------------------------------------------------- Indah Kiat International Finance Co. BV, 11.375% Gtd. Sec. Nts., 6/15/99(5) 205,000 174,250 - ------------------------------------------------------------------- Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 365,000 376,862 - ------------------------------------------------------------------- Riverwood International Corp.: 10.625% Sr. Unsec. Nts., 8/1/07 450,000 470,250 10.875% Sr. Sub. Nts., 4/1/08 200,000 203,000 - ------------------------------------------------------------------- SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 200,000 222,250 - ------------------------------------------------------------------- U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07 150,000 156,000 ------------ 2,371,462 - ------------------------------------------------------------------- GAMING/LEISURE - 2.1% AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts., 3/15/08(7)(13) 50,000 30,500 - ------------------------------------------------------------------- Apoca, Inc., 9.25% Sr. Sub. Nts., 3/15/08(7) 100,000 99,750 - ------------------------------------------------------------------- Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 275,000 286,687 - ------------------------------------------------------------------- Casino America, Inc., 12.50% Sr. Nts., 8/1/03 50,000 56,750 - ------------------------------------------------------------------- Casino Magic of Louisiana Corp., 13% First Mtg. Nts., Series B, 8/15/03 120,000 138,600 - ------------------------------------------------------------------- Empress Entertainment, Inc., 8.125% Sr. Sub. Nts., 7/1/06(7) 400,000 403,000 - ------------------------------------------------------------------- Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03 350,000 385,000 - ------------------------------------------------------------------- Grupo Posadas SA de CV, 10.375% Bonds, 2/13/02 50,000 50,750 - ------------------------------------------------------------------- Hard Rock Hotel, Inc., 9.25% Sr. Sub. Nts., 4/1/05(7) 300,000 309,000 - ------------------------------------------------------------------- HMC Acquisition Properties, Inc., 9% Sr. Nts., Series B, 12/15/07 150,000 163,500 - ------------------------------------------------------------------- HMH Properties, Inc., 8.875% Sr. Nts., 7/15/07 300,000 336,000 - ------------------------------------------------------------------- Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 425,000 452,094 - ------------------------------------------------------------------- Majestic Star Casino LLC (The), 12.75% Sr. Sec. Nts., 5/15/03 400,000 439,000 - ------------------------------------------------------------------- Mohegan Tribal Gaming Authority (Connecticut), 13.50% Sr. Sec. Nts., Series B, 11/15/02 200,000 253,000 - ------------------------------------------------------------------- Outboard Marine Corp., 10.75% Sr. Nts., 6/1/08(7) 200,000 203,000 - ------------------------------------------------------------------- Premier Cruises Ltd., 11% Sr. Nts., 3/15/08(7) 250,000 167,500 - ------------------------------------------------------------------- Premier Parks, Inc.: 0%/10% Sr. Disc. Nts., 4/1/08(13) 200,000 133,750 9.25% Sr. Nts., 4/1/06 100,000 103,750 - ------------------------------------------------------------------- Rio Hotel & Casino, Inc., 9.50% Gtd. Sr. Sub. Nts., 4/15/07 350,000 368,375 - ------------------------------------------------------------------- Showboat Marina Casino Partnership/Showboat Marina Finance Corp., 13.50% First Mtg. Nts., Series B, 3/15/03 350,000 407,750 - ------------------------------------------------------------------- Six Flags Entertainment Corp., 8.75% Sr. Unsec. Nts., 4/1/06 200,000 204,750 - ------------------------------------------------------------------- Venetian Casino Resort LLC/Las Vegas Sands, Inc.: 10% Sr. Unsec. Sub. Nts., 11/15/05(11) 150,000 139,500 12.25% Mtg. Nts., 11/15/04 150,000 155,625 ------------ 5,287,631 - ------------------------------------------------------------------- HEALTHCARE - 0.6% Fresenius Medical Care Capital Trust II, 7.875% Gtd. Nts., 2/1/08(5) 500,000 492,500 - ------------------------------------------------------------------- Fresenius Medical Care Capital Trust III, 7.375% Gtd. Nts., 2/1/08(7)(DEM) 400,000 224,582
80 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- HEALTHCARE (CONTINUED) Integrated Health Services, Inc.: 10.25% Sr. Sub. Nts., 4/30/06 $ 15,000 $ 16,125 9.50% Sr. Sub. Nts., 9/15/07 150,000 157,500 - ------------------------------------------------------------------- Magellan Health Services, Inc., 9% Sr. Sub. Nts., 2/15/08(7) 250,000 249,375 - ------------------------------------------------------------------- Oxford Health Plans, Inc., 11% Sr. Nts., 5/15/05(7) 150,000 154,500 - ------------------------------------------------------------------- Sun Healthcare Group, Inc., 9.50% Sr. Sub. Nts., 7/1/07(7) 265,000 270,300 ------------ 1,564,882 - ------------------------------------------------------------------- HOUSING - 0.6% Building Materials Corp. of America, 8.625% Sr. Nts., Series B, 12/15/06 50,000 52,000 - ------------------------------------------------------------------- Falcon Building Products, Inc., 9.50% Sr. Sub. Nts., 6/15/07 175,000 173,250 - ------------------------------------------------------------------- Greystone Homes, Inc., 10.75% Gtd. Sr. Nts., 3/1/04(5) 50,000 54,250 - ------------------------------------------------------------------- Hovnanian K. Enterprises, Inc., 11.25% Gtd. Sub. Nts., 4/15/02 75,000 78,000 - ------------------------------------------------------------------- Kaufman & Broad Home Corp., 7.75% Sr. Nts., 10/15/04 300,000 300,375 - ------------------------------------------------------------------- Nortek, Inc.: 9.125% Sr. Nts., Series B, 9/1/07 650,000 667,875 9.25% Sr. Nts., Series B, 3/15/07 150,000 154,875 ------------ 1,480,625 - ------------------------------------------------------------------- INFORMATION TECHNOLOGY - 1.4% Amazon.Com, Inc., 0%/10% Sr. Disc. Nts., 5/1/08(7)(13) 200,000 122,500 - ------------------------------------------------------------------- Bell Technology Group Ltd., Units (each unit consists of $1,000 principal amount of 13% sr. nts., 5/1/05 and one warrant to purchase one share of common stock)(7)(14) 325,000 329,875 - ------------------------------------------------------------------- Concentric Network Corp., 12.75% Sr. Unsec. Nts., 12/15/07 80,000 85,000 - ------------------------------------------------------------------- Covad Communications Group, Inc., Units (each unit consists of $1,000 principal amount of 0%/13.50% sr. disc. nts., 3/15/08 and one warrant to purchase 6.4792 common shares)(7)(13)(14) 600,000 315,000 - ------------------------------------------------------------------- Details, Inc., 10% Sr. Sub. Nts., Series B, 11/15/05 250,000 250,000 - ------------------------------------------------------------------- DII Group, Inc., 8.50% Sr. Sub. Nts., 9/15/07 20,000 19,700 - ------------------------------------------------------------------- Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 350,000 362,250 - ------------------------------------------------------------------- Exodus Communications, Inc., 11.25% Sr. Nts., 7/1/08(7) 200,000 200,875 - ------------------------------------------------------------------- ICG Services, Inc., 0%/10% Sr. Disc. Nts., 2/15/08(7)(13) 190,000 113,525 - ------------------------------------------------------------------- Iron Mountain, Inc., 8.75% Sr. Sub. Nts., 9/30/09 150,000 154,500 - ------------------------------------------------------------------- PSINet, Inc., 10% Sr. Unsec. Nts., Series B, 2/15/05 750,000 768,750 - ------------------------------------------------------------------- Unisys Corp., 11.75% Sr. Nts., 10/15/04 150,000 173,812 - ------------------------------------------------------------------- Verio, Inc.: 10.375% Sr. Nts., 4/1/05(7) 225,000 232,312 13.50% Sr. Nts., 6/15/04(7) 65,000 74,750 - ------------------------------------------------------------------- WAM!Net, Inc., Units (each unit consists of $1,000 principal amount of 0%/13.25% sr. disc. nts., 3/1/05 and three warrants to purchase 6.03 shares of common stock)(7)(13)(14) 500,000 317,500 - ------------------------------------------------------------------- Wavetek Corp., 10.125% Sr. Sub. Nts., 6/15/07 175,000 182,875 ------------ 3,703,224
81 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- MANUFACTURING - 1.0% Burke Industries, Inc., 10% Sr. Sub. Nts., 8/15/07 $ 150,000 $ 151,500 - ------------------------------------------------------------------- Cia Latino Americana de Infraestructura & Servicios SA - CLISA, 11.625% Gtd. Sr. Nts., 6/1/04(5) 30,000 30,300 - ------------------------------------------------------------------- Clark-Schwebel, Inc.: 10.50% Sr. Nts., 4/15/06 100,000 112,000 12.50% Debs., Series B, 7/15/07(5)(17) 115,994 123,534 - ------------------------------------------------------------------- Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05 250,000 281,250 - ------------------------------------------------------------------- Eagle-Picher Industries, Inc., 9.375% Sr. Sub. Nts., 3/1/08(7) 400,000 406,000 - ------------------------------------------------------------------- Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08(7) 100,000 100,000 - ------------------------------------------------------------------- Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 150,000 154,500 - ------------------------------------------------------------------- Insilco Corp., 10.25% Sr. Unsec. Sub. Nts., 8/15/07 300,000 315,000 - ------------------------------------------------------------------- International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 125,000 137,656 - ------------------------------------------------------------------- Maxxam Group, Inc., 0%/12.25% Sr. Sec. Disc. Nts., 8/1/03(13) 25,000 26,312 - ------------------------------------------------------------------- Mechala Group Jamaica Ltd., 12.75% Gtd. Sr. Sec. Sub. Nts., Series B, 12/30/99 85,000 85,212 - ------------------------------------------------------------------- Moll Industries, Inc., 10.50% Sr. Sub. Nts., 7/1/08(7) 200,000 205,000 - ------------------------------------------------------------------- Paragon Corp. Holdings, Inc., 9.625% Sr. Nts., 4/1/08(7) 125,000 116,250 - ------------------------------------------------------------------- Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 100,000 101,625 - ------------------------------------------------------------------- Roller Bearing Co. of America, Inc., 9.625% Gtd. Sr. Sub. Nts., Series B, 6/15/07 140,000 143,850 - ------------------------------------------------------------------- Terex Corp., 8.875% Sr. Sub. Nts., 4/1/08(7) 150,000 148,125 - ------------------------------------------------------------------- Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03(5) 50,000 52,750 ------------ 2,690,864 - ------------------------------------------------------------------- MEDIA/ENTERTAINMENT-BROADCASTING - 1.1% Azteca Holdings SA, 11% Sr. Sec. Nts., 6/15/02 155,000 156,162 - ------------------------------------------------------------------- Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 275,000 290,125 - ------------------------------------------------------------------- Chancellor Media Corp.: 8.125% Sr. Sub. Nts., Series B, 12/15/07 200,000 203,500 8.75% Gtd. Sr. Unsec. Sub. Nts., Series B, 6/15/07 100,000 104,500 - ------------------------------------------------------------------- Jacor Communications Co.: 8% Sr. Sub. Nts., 2/15/10 500,000 507,500 8.75% Gtd. Sr. Sub. Nts., Series B, 6/15/07 100,000 104,500 - ------------------------------------------------------------------- Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02 95,000 102,362 - ------------------------------------------------------------------- Radio One, Inc., 7% Sr. Sub. Nts., Series B, 5/15/04(11) 100,000 102,500 - ------------------------------------------------------------------- Sinclair Broadcast Group, Inc.: 10% Sr. Sub. Nts., 9/30/05 100,000 107,750 8.75% Sr. Sub. Nts., 12/15/07 150,000 155,250 9% Gtd. Sr. Sub. Nts., 7/15/07 250,000 261,250 - ------------------------------------------------------------------- Spanish Broadcasting Systems, Inc., 11% Sr. Nts., 3/15/04 100,000 108,500 - ------------------------------------------------------------------- TV Azteca SA de CV: 10.125% Gtd. Sr. Nts., Series A, 2/15/04 100,000 99,750 10.50% Gtd. Sr. Nts., Series B, 2/15/07 150,000 150,000 - ------------------------------------------------------------------- Young Broadcasting, Inc.: 8.75% Sr. Sub. Debs., 6/15/07 275,000 286,687
82 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- MEDIA/ENTERTAINMENT-BROADCASTING (CONTINUED) Young Broadcasting, Inc.: (Continued) 9% Sr. Sub. Nts., Series B, 1/15/06 $ 100,000 $ 104,500 ------------ 2,844,836 - ------------------------------------------------------------------- MEDIA/ENTERTAINMENT-CABLE/WIRELESS VIDEO - 1.5% Adelphia Communications Corp.: 10.50% Sr. Unsec. Nts., Series B, 7/15/04 70,000 76,825 8.375% Sr. Nts., Series B, 2/1/08 100,000 100,000 9.25% Sr. Nts., 10/1/02 100,000 104,250 - ------------------------------------------------------------------- American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04(13) 49,000 12,495 - ------------------------------------------------------------------- Cablevision Systems Corp. Holdings, Inc.: 9.875% Sr. Sub. Debs., 4/1/23 150,000 166,125 9.875% Sr. Sub. Nts., 5/15/06 250,000 274,375 - ------------------------------------------------------------------- EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04(13) 40,000 39,200 - ------------------------------------------------------------------- EchoStar DBS Corp., 12.50% Gtd. Sr. Nts., 7/1/02 250,000 279,375 - ------------------------------------------------------------------- EchoStar I, 8.25% Bonds, 2/26/01(5) 135,185 134,509 - ------------------------------------------------------------------- EchoStar II, 8.25% Bonds, 11/9/01(5) 131,308 130,652 - ------------------------------------------------------------------- EchoStar Satellite Broadcasting Corp., 0%/13.125% Sr. Sec. Disc. Nts., 3/15/04(13) 400,000 369,000 - ------------------------------------------------------------------- Falcon Holding Group LP, 0%/9.285% Sr. Disc. Debs., 4/15/10(7)(13) 350,000 228,375 - ------------------------------------------------------------------- Fundy Cable Ltd./Ltee, 11% Sr. Sec. Second Priority Nts., 11/15/05(5) 100,000 110,750 - ------------------------------------------------------------------- Helicon Group LP/Helicon Capital Corp., 11% Sr. Sec. Nts., Series B, 11/1/03(6) 175,000 188,125 - ------------------------------------------------------------------- Marcus Cable Operating Co. LP/Marcus Cable Capital Corp., 0%/13.50% Gtd. Sr. Sub. Disc. Nts., Series II, 8/1/04(13) 200,000 195,000 - ------------------------------------------------------------------- Optel, Inc., 13% Sr. Nts., Series B, 2/15/05 310,000 342,550 - ------------------------------------------------------------------- Rogers Cablesystems Ltd., 10% Second Priority Sr. Sec. Debs., 12/1/07 200,000 223,000 - ------------------------------------------------------------------- Rogers Communications, Inc., 8.75% Sr. Nts., 7/15/07(CAD) 400,000 275,909 - ------------------------------------------------------------------- TCI Satellite Entertainment, Inc.: 0%/12.25% Sr. Sub. Disc. Nts., 2/15/07(13) 300,000 204,000 10.875% Sr. Sub. Nts., 2/15/07 100,000 100,000 - ------------------------------------------------------------------- United International Holdings, Inc.: 0%/10.75% Sr. Disc. Nts., Series B, 2/15/08(13) 70,000 43,400 0%/14% Sr. Disc. Nts., Series B, 5/15/06(13) 400,000 246,500 ------------ 3,844,415 - ------------------------------------------------------------------- MEDIA/ENTERTAINMENT-DIVERSIFIED MEDIA - 0.8% Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/03 200,000 211,000 - ------------------------------------------------------------------- Chancellor Media Corp., 10.50% Sr. Sub. Nts., Series B, 1/15/07 90,000 100,575 - ------------------------------------------------------------------- Hollywood Theaters, Inc., 10.625% Sr. Sub. Nts., 8/1/07 100,000 104,000 - ------------------------------------------------------------------- Imax Corp., 10% Sr. Nts., 3/1/01 200,000 209,250 - ------------------------------------------------------------------- IPC Magazines Group plc, 9.675% Bonds, 3/15/08(7)(GBP) 300,000 473,987 - ------------------------------------------------------------------- Lamar Advertising Co.: 8.625% Sr. Sub. Nts., 9/15/07 150,000 154,313 9.625% Sr. Sub. Nts., 12/1/06 50,000 53,750 - ------------------------------------------------------------------- SFX Entertainment, Inc., 9.125% Sr. Sub. Nts., 2/1/08(7) 500,000 492,500
83 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- MEDIA/ENTERTAINMENT-DIVERSIFIED MEDIA (CONTINUED) Time Warner Entertainment Co. LP, 8.375% Sr. Debs., 3/15/23 $ 300,000 $ 352,225 ------------ 2,151,600 - ------------------------------------------------------------------- MEDIA/ENTERTAINMENT-TELECOMMUNICATIONS - -4.5% Call-Net Enterprises, Inc.: 0%/13.25% Sr. Disc. Nts., 12/1/04(13) 200,000 192,000 0%/9.27% Sr. Disc. Nts., 8/15/07(13) 75,000 52,875 - ------------------------------------------------------------------- COLT Telecom Group plc: 0%/12% Sr. Unsec. Disc. Nts., 12/15/06(13) 200,000 160,000 10.125% Sr. Nts., 11/30/07(GBP) 170,000 306,153 8.875% Sr. Nts., 11/30/07(DEM) 100,000 60,951 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)(14) 200,000 199,000 - ------------------------------------------------------------------- Comcast UK Cable Partners Ltd., 0%/11.20% Sr. Disc. Debs., 11/15/07(13) 250,000 209,375 - ------------------------------------------------------------------- Convergent Communications, Inc., Units (each unit consists of $1,000 principal amount of 13% sr. nts., 4/1/08 and four warrants to purchase 10.8 shares of common stock)(7)(14) 250,000 241,250 - ------------------------------------------------------------------- Diamond Cable Communications plc, 0%/11.75% Sr. Disc. Nts., 12/15/05(13) 825,000 684,750 - ------------------------------------------------------------------- Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08(7) 50,000 52,125 - ------------------------------------------------------------------- e.spire Communications, Inc., 13.75% Sr. Nts., 7/15/07(17) 110,000 125,950 - ------------------------------------------------------------------- FaciliCom International, Inc., 10.50% Sr. Nts., 1/15/08(7) 750,000 742,500 - ------------------------------------------------------------------- Firstworld Communications, Inc., Units (each unit consists of $1,000 principal amount of 0%/13% sr. disc. nts., 4/15/08 and one warrant to purchase 7.9002 shares of series b common stock)(7)(13)(14) 250,000 111,250 - ------------------------------------------------------------------- Focal Communications Corp., 0%/12.125% Sr. Disc. Nts., 2/15/08(7)(13) 1,150,000 691,438 - ------------------------------------------------------------------- Global Crossing Holdings Ltd., 9.625% Sr. Nts., 5/15/08(7) 210,000 219,713 - ------------------------------------------------------------------- GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub. Disc. Nts., 12/15/05(7)(13) 25,000 20,281 - ------------------------------------------------------------------- GST Telecommunications, Inc./GST Network Funding Corp., Inc., 0%/10.50% Sr. Disc. Nts., 5/1/08(7)(13) 150,000 90,750 - ------------------------------------------------------------------- GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(13) 425,000 346,375 - ------------------------------------------------------------------- ICG Holdings, Inc.: 0%/12.50% Gtd. Sr. Disc. Nts., 5/1/06(13) 195,000 153,075 0%/13.50% Sr. Disc. Nts., 9/15/05(13) 125,000 106,250 - ------------------------------------------------------------------- Intermedia Communications, Inc.: 0%/11.25% Sr. Disc. Nts., Series B, 7/15/07(13) 300,000 220,875 8.50% Sr. Nts., Series B, 1/15/08 250,000 251,250 8.60% Sr. Nts., 6/1/08(7) 250,000 254,375 8.875% Sr. Nts., 11/1/07 200,000 205,500 - ------------------------------------------------------------------- KMC Telecom Holdings, Inc., Units (each unit consists of $1,000 principal amount of 0%/12.50% sr. disc. nts., 2/15/08 and one warrant to purchase .21785 ordinary shares)(7)(13)(14) 725,000 424,125 - ------------------------------------------------------------------- Level 3 Communications, Inc., 9.125% Sr. Nts., 5/1/08(7) 450,000 440,438 - ------------------------------------------------------------------- Long Distance International, Inc., Units (each unit consists of $1,000 principal amount of 12.25% sr. nts., 4/15/08 and one warrant to purchase 15.0874 shares of common stock)(7)(14) 200,000 199,000
84 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- MEDIA/ENTERTAINMENT-TELECOMMUNICATIONS (CONTINUED) McLeodUSA, Inc.: 0%/10.50% Sr. Disc. Nts., 3/1/07(13) $ 140,000 $ 105,000 8.375% Sr. Nts., 3/15/08(7) 300,000 302,250 9.25% Sr. Nts., 7/15/07 75,000 78,188 - ------------------------------------------------------------------- Metronet Communications Corp.: 0%/10.75% Sr. Disc. Nts., 11/1/07(13) 175,000 115,719 0%/9.95% Sr. Disc.Nts., 6/15/08(7)(13) 100,000 62,375 - ------------------------------------------------------------------- Netia Holdings BV: 0%/11% Gtd. Sr. Disc. Nts., 11/1/07(13)(DEM) 400,000 148,800 0%/11% Gtd. Sr. Disc. Nts., Series B, 11/1/07(13)(DEM) 200,000 74,400 0%/11.25% Sr. Disc. Nts., Series B, 11/1/07(13) 100,000 66,250 10.25% Sr. Nts., Series B, 11/1/07 50,000 48,188 - ------------------------------------------------------------------- NEXTLINK Communications, Inc.: 0%/9.45% Sr. Disc. Nts., 4/15/08(7)(13) 400,000 246,500 9% Sr. Nts., 3/15/08(7) 200,000 201,000 9.625% Sr. Nts., 10/1/07 350,000 360,500 - ------------------------------------------------------------------- NTL, Inc.: 0%/10.75% Sr. Unsec. Unsub. Nts., Series REGS, 4/1/08(13)(GBP) 200,000 200,100 0%/9.75% Sr. Nts., 4/1/08(7)(13) 300,000 196,500 10% Sr. Nts., 2/15/07 100,000 107,500 - ------------------------------------------------------------------- Onepoint Communications Corp., Units (each unit consists of $1,000 principal amount of 14.50% sr. nts., 6/1/08 and one warrant to purchase one share of common stock @ $.01 per share)(7)(14) 100,000 94,500 - ------------------------------------------------------------------- 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)(7)(13)(14) 300,000 279,000 - ------------------------------------------------------------------- PTC International Finance BV, 0%/10.75% Gtd. Sr. Unsec. Sub. Bonds, 7/1/07(13) 134,000 91,623 - ------------------------------------------------------------------- Qwest Communications International, Inc.: 0%/8.29% Sr. Disc. Nts., 2/1/08(7)(13) 365,000 264,625 0%/9.47% Sr. Disc. Nts., 10/15/07(13) 635,000 477,838 - ------------------------------------------------------------------- RSL Communications plc: 0%/10% Bonds, 3/15/08(13)(DEM) 200,000 64,650 0%/10% Bonds, Series REGS, 3/15/08(7)(13)(DEM) 150,000 48,488 0%/10.125% Sr. Disc. Nts., 3/1/08(7)(13) 300,000 180,000 - ------------------------------------------------------------------- Shaw Communications, Inc., 8.54% Debs., 9/30/27(CAD) 340,000 232,241 - ------------------------------------------------------------------- Teleport Communications Group, Inc., 0%/11.125% Sr. Disc. Nts., 7/1/07(13) 425,000 369,750 - ------------------------------------------------------------------- TeleWest Communications plc, 0%/11% Sr. Disc. Debs., 10/1/07(13) 200,000 167,000 - ------------------------------------------------------------------- Viatel, Inc., Units (each unit consists of $1,000 principal amount of 11.25% sr. nts., and 0.483 shares of series a preferred stock)(7)(14) 300,000 315,000 ------------ 11,659,609 - ------------------------------------------------------------------- MEDIA/ENTERTAINMENT-WIRELESS COMMUNICATIONS - 3.3% American Mobile Satellite Corp./AMSC Acquisition Co., Inc., Units (each unit consists of $1,000 principal amount of 12.25% sr. nts., 4/1/08 and one warrant to purchase 3.75749 shares of common stock)(7)(14) 150,000 141,750 - ------------------------------------------------------------------- Arch Communications, Inc., 12.75% Sr. Nts., 7/1/07(7) 200,000 202,250
85 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- MEDIA/ENTERTAINMENT-WIRELESS COMMUNICATIONS (CONTINUED) Celcaribe SA, 13.50% Sr. Sec. Nts., 3/15/04(5) $ 150,000 $ 153,000 - ------------------------------------------------------------------- CellNet Data Systems, Inc., 0%/14% Sr. Disc. Nts., 10/1/07(13) 500,000 280,000 - ------------------------------------------------------------------- Cellular Communications International, Inc., 0%/9.50% Bonds, 4/1/05(7)(13)(XEU) 650,000 515,608 - ------------------------------------------------------------------- Clearnet Communications, Inc., 0%/14.75% Sr. Disc. Nts., 12/15/05(13) 150,000 126,375 - ------------------------------------------------------------------- Comunicacion Celular SA, 0%/13.125% Sr. Deferred Coupon Bonds, 11/15/03(13) 350,000 271,250 - ------------------------------------------------------------------- Crown Castle International Corp., 0%/10.625% Sr. Unsec. Disc. Nts., 11/15/07(13) 350,000 240,625 - ------------------------------------------------------------------- Geotek Communications, Inc.: 0%/15% Sr. Sec. Disc. Nts., Series B, 7/15/05(13) 90,000 7,650 12% Cv. Sr. Sub. Nts., 2/15/01(5)(16) 210,000 5,250 - ------------------------------------------------------------------- Iridium LLC/Iridium Capital Corp.: 11.25% Sr. Nts., Series C/EN, 7/15/05 155,000 156,163 13% Sr. Nts., Series A, 7/15/05 125,000 134,688 - ------------------------------------------------------------------- Microcell Telecommunications, Inc.: 0%/11.125% Sr. Disc. Nts., Series B, 10/15/07(13)(CAD) 300,000 129,544 0%/14% Sr. Disc. Nts., Series B, 6/1/06(13) 200,000 149,500 - ------------------------------------------------------------------- Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(13) 210,000 163,275 - ------------------------------------------------------------------- Nextel Communications, Inc.: 0%/10.65% Sr. Disc. Nts., 9/15/07(13) 950,000 643,625 0%/9.75% Sr. Disc. Nts., 10/31/07(13) 500,000 327,500 0%/9.95% Sr. Disc. Nts., 2/15/08(7)(13) 325,000 209,219 - ------------------------------------------------------------------- Omnipoint Corp.: 11.625% Sr. Nts., 8/15/06 365,000 385,988 11.625% Sr. Nts., Series A, 8/15/06 80,000 84,600 - ------------------------------------------------------------------- ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 300,000 341,250 - ------------------------------------------------------------------- Orbital Imaging Corp., 11.625% Sr. Nts., 3/1/05(7) 325,000 335,563 - ------------------------------------------------------------------- Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(13) 550,000 420,750 - ------------------------------------------------------------------- Pinnacle Holdings, Inc., 0%/10% Sr. Disc. Nts., 3/15/08(7)(13) 325,000 214,500 - ------------------------------------------------------------------- Price Communications Cellular Holdings, Inc., 0%/13.50% Sr. Disc. Nts., Series B, 8/1/07(13) 900,000 632,250 - ------------------------------------------------------------------- Price Communications Wireless, Inc.: 11.75% Sr. Sub. Nts., 7/15/07 275,000 303,875 9.125% Sr. Sec. Nts., 12/15/06(7) 250,000 250,938 - ------------------------------------------------------------------- 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)(7)(13)(14) 300,000 160,500 - ------------------------------------------------------------------- Rural Cellular Corp., 9.625% Sr. Sub. Nts., 5/15/08(7) 300,000 301,500 - ------------------------------------------------------------------- Satelites Mexicanos SA, 10.125% Sr. Nts., 11/1/04(7) 100,000 97,625 - ------------------------------------------------------------------- SBA Communications Corp., 0%/12% Sr. Disc. Nts., 3/1/08(7)(13) 700,000 441,000 - ------------------------------------------------------------------- Spectrasite Holdings, Inc., 0%/12% Sr. Disc. Nts., 7/15/08(7)(13) 500,000 280,000 - ------------------------------------------------------------------- Sprint Spectrum LP/Sprint Spectrum Finance Corp., 0%/12.50% Sr. Disc. Nts., 8/15/06(13) 65,000 55,738
86 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- MEDIA/ENTERTAINMENT-WIRELESS COMMUNICATIONS (CONTINUED) USA Mobile Communications, Inc. II: 14% Sr. Nts., 11/1/04 $ 200,000 $ 221,000 9.50% Sr. Nts., 2/1/04 100,000 91,250 ------------ 8,475,599 - ------------------------------------------------------------------- METALS/MINERALS - 0.9% AK Steel Corp., 9.125% Sr. Nts., 12/15/06 350,000 367,500 - ------------------------------------------------------------------- Algoma Steel, Inc., 12.375% First Mtg. Nts., 7/15/05 300,000 337,500 - ------------------------------------------------------------------- Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01 45,000 48,488 - ------------------------------------------------------------------- Centaur Mining & Exploration Ltd., 11% Gtd. Sr. Nts., 12/1/07(7) 100,000 102,500 - ------------------------------------------------------------------- Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., 5/15/08(7) 500,000 512,500 - ------------------------------------------------------------------- International Utility Structures, Inc., 10.75% Sr. Sub. Nts., 2/1/08(7) 50,000 51,250 - ------------------------------------------------------------------- Keystone Consolidated Industries, Inc., 9.625% Sr. Sec. Nts., 8/1/07 200,000 205,500 - ------------------------------------------------------------------- Metallurg, Inc., 11% Sr. Nts., 12/1/07 745,000 782,250 ------------ 2,407,488 - ------------------------------------------------------------------- RETAIL - 0.6% Boyds Collection Ltd., 9% Sr. Sub. Nts., 5/15/08(7) 400,000 402,000 - ------------------------------------------------------------------- Central Termica Guemes, 12% Bonds, 11/26/01(7) 100,000 98,875 - ------------------------------------------------------------------- Eye Care Centers of America, Inc.: 12% Sr. Nts., 10/1/03 70,000 75,600 9.125% Sr. Sub. Nts., 5/1/08(7) 300,000 300,000 - ------------------------------------------------------------------- Finlay Enterprises, Inc., 9% Debs., 5/1/08 100,000 100,750 - ------------------------------------------------------------------- Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 100,000 100,875 - ------------------------------------------------------------------- Home Interiors & Gifts, Inc., 10.125% Sr. Sub. Nts., 6/1/08(7) 225,000 230,906 - ------------------------------------------------------------------- Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 200,000 205,000 ------------ 1,514,006 - ------------------------------------------------------------------- SERVICE - 0.9% Allied Waste Industries, Inc., 0%/11.30% Sr. Disc. Nts., 6/1/07(13) 300,000 220,500 - ------------------------------------------------------------------- Allied Waste North America, Inc., 10.25% Sr. Sub. Nts., 12/1/06 250,000 275,000 - ------------------------------------------------------------------- Borg-Warner Security Corp.: 9.125% Sr. Sub. Nts., 5/1/03(5) 100,000 104,562 9.625% Sr. Sub. Nts., 3/15/07 100,000 112,500 - ------------------------------------------------------------------- Coinstar, Inc., 0%/13% Sr. Disc. Nts., 10/1/06(13) 100,000 81,500 - ------------------------------------------------------------------- CTI Holdings SA, 0%/11.50% Sr. Nts., 4/15/08(7)(13) 175,000 98,000 - ------------------------------------------------------------------- Fisher Scientific International, Inc., 9% Sr. Unsec. Sub. Nts., 2/1/08 600,000 598,500 - ------------------------------------------------------------------- Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 50,000 50,625 - ------------------------------------------------------------------- Kinetic Concepts, Inc., 9.625% Gtd. Unsec. Nts., Series B, 11/1/07 500,000 507,500 - ------------------------------------------------------------------- Protection One Alarm Monitoring, Inc., 6.75% Cv. Gtd. Sr. Sub. Nts., 9/15/03 125,000 145,938 - ------------------------------------------------------------------- SF Holdings Group, Inc., Units (each unit consists of $1,000 principal amount of 0%/12.75% sr. disc. nts., 3/15/08 and one warrant to purchase two shares of cl. c common stock)(7)(13)(14) 100,000 54,000 ------------ 2,248,625
87 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- TRANSPORTATION - 1.7% American Communication Lines LLC, 10.25% Bonds, 6/30/08(7) $ 200,000 $ 203,500 - ------------------------------------------------------------------- Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., Series B, 7/15/07 75,000 76,125 - ------------------------------------------------------------------- Coach USA, Inc., 9.375% Gtd. Sr. Sub. Nts., Series B, 7/1/07 200,000 209,000 - ------------------------------------------------------------------- Collins & Aikman Products Co., 11.50% Gtd. Sr. Sub. Nts., 4/15/06 300,000 333,750 - ------------------------------------------------------------------- Federal-Mogul Corp., 7.875% Nts., 7/1/10 300,000 302,763 - ------------------------------------------------------------------- Hayes Wheels International, Inc.: 11% Sr. Sub. Nts., 7/15/06 225,000 253,125 9.125% Sr. Sub. Nts., 7/15/07 100,000 105,500 - ------------------------------------------------------------------- Key Plastics, Inc., 10.25% Sr. Sub. Nts., Series B, 3/15/07 300,000 313,500 - ------------------------------------------------------------------- Lear Corp., 9.50% Sub. Nts., 7/15/06 200,000 219,500 - ------------------------------------------------------------------- Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07(7) 275,000 288,063 - ------------------------------------------------------------------- Navigator Gas Transport plc, Units (each unit consists of $1,000 principal amount of 12% second priority ship mtg. nts., 6/30/07 and 7.66 warrants)(7)(14) 150,000 170,250 - ------------------------------------------------------------------- Oxford Automotive, Inc., 10.125% Sr. Unsec. Sub. Nts., 6/15/07 900,000 931,500 - ------------------------------------------------------------------- Pycsa Panama SA, 10.28% Sr. Sec. Bonds, 12/15/12(7) 200,000 189,750 - ------------------------------------------------------------------- TFM SA de CV, 10.25% Gtd. Sr. Nts., 6/15/07 200,000 194,500 - ------------------------------------------------------------------- Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts., Series B, 12/15/03(13) 300,000 280,500 - ------------------------------------------------------------------- Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(5) 238,609 186,712 - ------------------------------------------------------------------- Trico Marine Services, Inc., 8.50% Gtd. Sr. Nts., Series D, 8/1/05 40,000 39,100 ------------ 4,297,138 - ------------------------------------------------------------------- UTILITY - 0.5% Beaver Valley II Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17(5) 199,000 224,870 - ------------------------------------------------------------------- California Energy, Inc., 10.25% Sr. Disc. Nts., 1/15/04 150,000 161,625 - ------------------------------------------------------------------- Calpine Corp.: 10.50% Sr. Nts., 5/15/06 100,000 109,500 8.75% Sr. Nts., 7/15/07 230,000 237,475 - ------------------------------------------------------------------- El Paso Electric Co., 9.40% First Mtg. Bonds, Series E, 5/1/11 250,000 286,250 - ------------------------------------------------------------------- First PV Funding Corp.: 10.30% Lease Obligation Bonds, Series 1986A: 1/15/14(5) 136,000 144,650 1/15/14 4,000 4,000 ------------ 1,168,370 ------------ Total Corporate Bonds and Notes (Cost $84,411,805) 84,933,055 SHARES - ------------------------------------------------------------------- PREFERRED STOCKS - 3.4% - ------------------------------------------------------------------- American Radio Systems Corp., 11.375% Cum. Exchangeable Preferred, Series B(5) 751 89,369 - ------------------------------------------------------------------- AmeriKing, Inc., 13% Cum. Sr. Exchangeable Preferred Stock, Non-Vtg.(5) 2,475 64,969 - ------------------------------------------------------------------- BankUnited Capital Trust, 10.25% Gtd. Bonds, 12/31/26(5) 100,000 108,000 - ------------------------------------------------------------------- California Federal Bank, 11.50% Non-Cum., Non-Vtg. 1,500 169,125 - ------------------------------------------------------------------- CGA Group Ltd., Preferred Stock, Series A(5)(18) 16,000 400,000
88 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------------- PREFERRED STOCKS (CONTINUED) - ------------------------------------------------------------------- Chesapeake Energy Corp., 7% Cv. Cum. Preferred Stock(7) 4,000 $ 169,500 - ------------------------------------------------------------------- Clark USA, Inc., 11.50% Sr. Cum. Exchangeable Preferred Stock(5)(17) 52 54,990 - ------------------------------------------------------------------- Concentric Network Corp., 13.50% Exchangeable Preferred Stock(7)(17) 200 198,500 - ------------------------------------------------------------------- CRIIMI MAE, Inc., 10.875% Cum. Cv. Preferred Stock, Series B, Non-Vtg. 46,000 1,549,625 - ------------------------------------------------------------------- Crown American Realty Trust, 11% Cum. Non-Vtg. Preferred, Series A 2,000 107,250 - ------------------------------------------------------------------- Doane Products Co., 14.25% Sr. Exchangeable Preferred Stock, Non-Vtg.(5)(18) 5,000 201,250 - ------------------------------------------------------------------- Dobson Communications Corp., 12.25% Preferred Stock(7)(17) 205 213,712 - ------------------------------------------------------------------- e.spire Communications, Inc., 12.75% Jr. Redeemable Preferred Stock 154 172,865 - ------------------------------------------------------------------- Eagle-Picher Holdings, Inc., Preferred Stock(5)(18) 5,000 291,250 - ------------------------------------------------------------------- Earthwatch, Inc., 12% Cv. Sr. Preferred Stock, Series C(5)(17) 10,000 17,500 - ------------------------------------------------------------------- EchoStar Communications Corp., 12.125% Sr. Redeemable Exchangeable Preferred Stock, Series B(5)(17) 136 151,980 - ------------------------------------------------------------------- El Paso Electric Co., 11.40% Preferred Stock, Series A(17) 1,921 210,830 - ------------------------------------------------------------------- Fidelity Federal Bank FSB Glendale California, l2% Non-Cum. Exchangeable Perpetual Preferred Stock, Series A(5) 20 545 - ------------------------------------------------------------------- Fresenius Medical Care Capital Trust III, 9% Gtd. Nts., 12/1/06(5) 275,000 286,687 - ------------------------------------------------------------------- Golden State Bancorp, 8.75% Cv. Preferred Stock, Series A 1,000 86,687 - ------------------------------------------------------------------- ICG Holdings, Inc., 14.25% Exchangeable Preferred Stock(5)(17) 108 131,490 - ------------------------------------------------------------------- Intermedia Communications, Inc., Depositary Shares Representing one one-hundredth 7% Cum. Cv. Jr. Preferred Stock, Series E, Non-Vtg.(7) 2,100 77,963 - ------------------------------------------------------------------- International Utility Structures, Inc., Units (each unit consists of $1,000 principal amount of 13% sr. exchangeable preferred stock and one warrant to purchase 30 shares of common stock)(5)(14)(17) 50 54,750 - ------------------------------------------------------------------- Kelley Oil & Gas Corp., $2.625 Cv. 1,800 42,300 - ------------------------------------------------------------------- Nebco Evans Holdings Co., 11.25% Nts., 3/1/08(5)(17) 5,132 524,747 - ------------------------------------------------------------------- Nextel Communications, Inc., 11.125% Preferred Stock(7) 105 108,413 - ------------------------------------------------------------------- NEXTLINK Communications, Inc., 14% Sr. Exchangeable Preferred(17) 15,481 909,509 - ------------------------------------------------------------------- Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable Preferred Stock(7)(17) 20 196,500 - ------------------------------------------------------------------- Prime Retail, Inc., 8.50% Cv. Preferred Stock, Series B 6,000 123,000 - ------------------------------------------------------------------- PRIMEDIA, Inc.: 8.625% Preferred Stock 8,000 780,000 9.20% Preferred Stock, Series F 1,000 101,750 - ------------------------------------------------------------------- Rural Cellular Corp., 11.375% Sr. Exchangeable Preferred Stock(5)(17) 200 201,000 - ------------------------------------------------------------------- SD Warren Co., 14% Cum. Exchangeable Preferred Stock, Series B, Non-Vtg. 9,000 452,250 - ------------------------------------------------------------------- SF Holdings Group, Inc., Units (each unit consists of one share of preferred stock and 37 cl. c shares of common stock)(5)(14)(17) 10 89,250 - ------------------------------------------------------------------- Spanish Broadcasting Systems, Inc., 14.25% Cum. Sr. Exchangeable Preferred Stock, Non-Vtg.(5)(17) 113 119,215 - ------------------------------------------------------------------- Time Warner, Inc., 10.25% Exchangeable Preferred, Series M(17) 1 1,170
89 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------------- PREFERRED STOCKS (CONTINUED) - ------------------------------------------------------------------- Walden Residential Properties, Inc.: 9.16% Cv. Preferred Stock, Series B 10,000 $ 285,000 9.20% Sr. Preferred Stock 1,000 25,438 ------------ Total Preferred Stocks (Cost $8,745,834) 8,768,379 - ------------------------------------------------------------------- COMMON STOCKS - 0.3% - ------------------------------------------------------------------- Celcaribe SA(5)(18) 24,390 109,755 - ------------------------------------------------------------------- Coinstar, Inc. 700 6,475 - ------------------------------------------------------------------- Horizon Group Properties, Inc.(18) 358 2,361 - ------------------------------------------------------------------- Intermedia Communications, Inc.(18) 50 2,097 - ------------------------------------------------------------------- Optel, Inc.(5)(18) 210 2 - ------------------------------------------------------------------- Vail Resorts, Inc.(18) 15,500 412,687 - ------------------------------------------------------------------- WorldCom, Inc.(18) 6,885 333,492 ------------ Total Common Stocks (Cost $354,276) 866,869 UNITS - ------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES - 0.1% - ------------------------------------------------------------------- American Telecasting, Inc. Wts., Exp. 6/99(5) 1,500 15 - ------------------------------------------------------------------- CGA Group Ltd. Wts., Exp. 12/49(5) 16,000 8,000 - ------------------------------------------------------------------- Clearnet Communications, Inc. Wts., Exp. 9/05(5) 165 735 - ------------------------------------------------------------------- Comunicacion Celular SA Wts., Exp. 11/03(5) 200 14,025 - ------------------------------------------------------------------- Concentric Network Corp. Wts., Exp. 12/07 100 13,500 - ------------------------------------------------------------------- Geotek Communications, Inc. Wts., Exp. 7/05(5) 7,500 75 - ------------------------------------------------------------------- Gothic Energy Corp. Wts.: Exp. 1/03(5) 2,621 26 Exp. 9/04(5) 2,800 3,150 - ------------------------------------------------------------------- Hyperion Telecommunications, Inc. Wts., Exp. 4/01(5) 60 5,820 - ------------------------------------------------------------------- ICG Communications, Inc. Wts., Exp. 9/05(5) 825 24,348 - ------------------------------------------------------------------- IHF Capital, Inc., Series I Wts., Exp. 11/99(5) 200 2,025 - ------------------------------------------------------------------- In-Flight Phone Corp. Wts., Exp. 8/02 200 -- - ------------------------------------------------------------------- Mexican Value Rts., Exp. 6/03 1,100 -- - ------------------------------------------------------------------- Microcell Telecommunications, Inc. Wts., Exp. 6/06(5) 600 16,664 - ------------------------------------------------------------------- Occidente y Caribe Celular SA Wts., Exp. 3/04(5) 800 16,100 - ------------------------------------------------------------------- Orbital Imaging Corp. Wts., Exp. 3/05(5) 325 14,625 - ------------------------------------------------------------------- Orion Network Systems, Inc. Wts., Exp. 1/07(5) 150 2,269 - ------------------------------------------------------------------- Price Communications Corp. Wts., Exp. 8/07(5) 3,096 46,827 - ------------------------------------------------------------------- United International Holdings, Inc. Wts., Exp. 11/99(5) 200 4,037 ------------ Total Rights, Warrants and Certificates (Cost $43,252) 172,241
90 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT(1) NOTE 1 - ------------------------------------------------------------------- STRUCTURED INSTRUMENTS - 5.8% - ------------------------------------------------------------------- Bankers Trust, Lehman High Yield Index Nts., 8.438%, 8/5/98 $ 1,000,000 $ 993,950 - ------------------------------------------------------------------- Bayerische Landesbank Girozentrale (New York Branch), Lehman High Yield Index Nts.: 8.50%, 3/8/99 1,000,000 1,000,000 7.95%, 8/5/98 500,000 496,900 9%, 7/8/98 500,000 516,875 - ------------------------------------------------------------------- Bear Stearns High Yield Composite Index Linked Nts., 9%: 10/13/98 500,000 507,750 2/16/99(5) 600,000 601,920 2/5/99 1,000,000 1,000,400 8/25/98 1,500,000 1,528,800 9/4/98 750,000 761,250 - ------------------------------------------------------------------- Chase Manhattan Bank USA, National Assn., Chase Physical Commodity Excess Return Index Linked Nts., 5.655%, 9/30/99 250,000 183,950 - ------------------------------------------------------------------- Deutsche Morgan Grenfell, Russian Federal Loan Floating Rate Linked Bonds: 12%, 10/25/00 240,000 155,283 15%, 2/23/00 240,000 155,573 - ------------------------------------------------------------------- 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)(5) 104,347 104,817 - ------------------------------------------------------------------- Korea Development Bank Industrial Bank Finance U.S. Dollar/South Korean Won Linked Nts., Zero Coupon, 3/5/99(5) 470,000 485,416 - ------------------------------------------------------------------- Lehman Brothers Holdings, Inc.: Chilean Peso/Japanese Yen Linked Nts., 17.50%, 7/28/98 250,000 256,645 Chilean Peso/Japanese Yen Linked Nts., 18%, 7/28/98 240,000 249,163 Greek Drachma/European Currency Unit Linked Nts., Zero Coupon, 3/26/99 280,000 296,156 Greek Drachma/Swiss Franc Linked Nts., Zero Coupon, 3/31/99 175,000 191,030 - ------------------------------------------------------------------- Rabobank, Lehman High Yield Index Nts., 7.988%, 7/6/98 400,000 397,480 - ------------------------------------------------------------------- Salomon Smith Barney Holdings, Inc., Brazil Credit Linked Unsec. Nts., 6%, 4/2/03 620,000 509,702 - ------------------------------------------------------------------- Salomon, Inc., Russian S-Account Credit Linked Nts., Zero Coupon: 9.785%, 7/31/98(12) 400,000 392,420 9.78%, 8/7/98(12) 585,000 568,591 - ------------------------------------------------------------------- Salomon, Inc.: United Mexican States 2016 Linked Nts., 12.02%, 9/16/98 808,330 795,640 United Mexican States 2026 Linked Nts., 12.328%, 9/16/98 1,410,553 1,404,488 - ------------------------------------------------------------------- Shoshone Partners Loan Trust Sr. Nts., 9.719%, 4/28/02 (representing a basket of reference loans and a total return swap between Chase Manhattan Bank and the Trust)(5)(6) 750,000 830,517 - ------------------------------------------------------------------- Standard Chartered Bank: Philippines Peso/Japanese Yen Linked Nts., 20.25%, 11/9/98 240,000 234,888 Thailand Baht/Japanese Yen Linked Nts., 48%, 8/11/98 210,000 208,509 ------------ Total Structured Instruments (Cost $14,928,102) 14,828,113
91 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE DATE STRIKE CONTRACTS NOTE 1 - ------------------------------------------------------------------------------------- CALL OPTIONS PURCHASED - 0.0% - ------------------------------------------------------------------------------------- German Mark/Swiss Franc Call Opt. 10/98 .84DEM/CHF 960,000 $4,678 - ------------------------------------------------------------------------------------- U.S. Treasury Bonds, 6.125%, 11/15/27 Call Opt. 11/98 107.125% 2,500 60,156 ---------- Total Call Options Purchased (Cost $31,387) 64,834 - ------------------------------------------------------------------------------------- PUT OPTIONS PURCHASED - 0.1% - ------------------------------------------------------------------------------------- Japanese Yen Put Opt. 9/98 136 JPY) 439,040,000 205,910 - ------------------------------------------------------------------------------------- Japanese Yen Put Opt. 9/98 145.40 JPY) 191,740,000 21,475 - ------------------------------------------------------------------------------------- U.S. Treasury Bonds, 6.125%, 11/15/15 Put Opt. 7/98 105.344% 2,500 6,075 ---------- Total Put Options Purchased (Cost $98,750) 233,460
PRINCIPAL AMOUNT(1) - ------------------------------------------------------------------- REPURCHASE AGREEMENTS - 0.3% - ------------------------------------------------------------------- Repurchase agreement with Salomon Smith Barney Holdings, Inc., 5.90%, dated 6/30/98, to be repurchased at $700,115 on 7/1/98, collateralized by U.S. Treasury Bonds, 8.75%-10.625%, 2/15/15-2/15/19, with a value of $718,612 (Cost $700,000) $ 700,000 700,000 - ------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $276,278,205) 107.5% 276,829,739 - ------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (7.5) (19,392,015) ---------------- ------------ NET ASSETS 100.0% $257,437,724 ---------------- ------------ ---------------- ------------
1. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: ARP - Argentine Peso JPY - Japanese Yen CAD - Canadian Dollar NOK - Norwegian Krone CHF - Swiss Franc NZD - New Zealand Dollar DEM - German Mark PLZ - Polish Zloty DKK - Danish Krone RUR - Russian Ruble GBP - British Pound Sterling SEK - Swedish Krona GRD - Greek Drachma TRL - Turkish Lira HUF - Hungarian Forint XEU - European Currency Units IDR - Indonesian Rupiah ZAR - South African Rand ITL - Italian Lira
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 June 30, 1998. 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. 92 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 5. Identifies issues considered to be illiquid or restricted - See Note 8 of Notes to Financial Statements. 6. Represents the current interest rate for a variable rate security. 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 $24,265,835 or 9.43% of the Fund's net assets as of June 30, 1998. 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. A sufficient amount of securities has been designated to cover outstanding written call options, as follows:
PRINCIPAL/CONTRACTS 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 8/7/00 100.00 $ 3,680 $ 6,000 German Mark/Swiss Franc Call Option 960,000 10/22/98 0.60 (DEM\CHF) 3,262 531 U.S. Treasury Bonds, 6.125% 11/15/15 Put Option 2,500,000 7/13/98 96.00% 28,125 7,812 ----------- ------------- $ 35,067 $ 14,343 ----------- ------------- ----------- -------------
10. Securities with an aggregate market value of $617,626 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 11. Represents the current interest rate for an increasing rate security. 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. 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. 15. Issuer is in default. 16. Non-income producing--issuer is in default of interest payment. 17. Interest or dividend is paid in kind. 18. Non-income producing security. See accompanying Notes to Financial Statements. 93 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------- COMMON STOCKS - 85.5% - ------------------------------------------------------------- BASIC MATERIALS - 1.5% - ------------------------------------------------------------- CHEMICALS - 1.5% Ferro Corp. 27,500 $ 696,094 - ------------------------------------------------------------- IMC Global, Inc. 55,000 1,656,875 - ------------------------------------------------------------- Olin Corp. 35,000 1,459,062 ------------ 3,812,031 - ------------------------------------------------------------- CONSUMER CYCLICALS - 23.8% - ------------------------------------------------------------- AUTOS & HOUSING - 9.0% Budget Group, Inc., Cl. A(1) 77,500 2,475,156 - ------------------------------------------------------------- Champion Enterprises, Inc.(1) 20,000 585,000 - ------------------------------------------------------------- CSK Auto Corp.(1) 275,000 6,943,750 - ------------------------------------------------------------- General Motors Corp. 17,500 1,169,219 - ------------------------------------------------------------- Lear Corp.(1) 17,500 897,969 - ------------------------------------------------------------- Republic Industries, Inc.(1) 350,000 8,750,000 - ------------------------------------------------------------- Tower Realty Trust, Inc. 42,500 950,937 - ------------------------------------------------------------- United Road Services, Inc.(1) 95,000 1,816,875 ------------ 23,588,906 - ------------------------------------------------------------- LEISURE & ENTERTAINMENT - 7.9% AMR Corp.(1)(2) 10,000 832,500 - ------------------------------------------------------------- Brinker International, Inc.(1) 60,000 1,155,000 - ------------------------------------------------------------- Brunswick Corp. 17,500 433,125 - ------------------------------------------------------------- Callaway Golf Co. 75,000 1,476,562 - ------------------------------------------------------------- Delta Air Lines, Inc. 15,000 1,938,750 - ------------------------------------------------------------- Harrah's Entertainment, Inc.(1) 107,500 2,499,375 - ------------------------------------------------------------- Hilton Hotels Corp. 30,000 855,000 - ------------------------------------------------------------- Host Marriott Corp.(1) 70,000 1,246,875 - ------------------------------------------------------------- Luby's Cafeterias, Inc. 55,000 965,937 - ------------------------------------------------------------- Mirage Resorts, Inc.(1)(2) 65,000 1,385,312 - ------------------------------------------------------------- News Corp. Ltd., Sponsored ADR, Preference 77,500 2,189,375 - ------------------------------------------------------------- Time Warner, Inc. 35,000 2,990,312 - ------------------------------------------------------------- Viacom, Inc., Cl. B(1) 50,000 2,912,500 ------------ 20,880,623 - ------------------------------------------------------------- MEDIA - 3.2% Capstar Broadcasting Corp.(1) 100,000 2,512,500 - ------------------------------------------------------------- CBS Corp.(2) 70,000 2,222,500 - ------------------------------------------------------------- Emmis Broadcasting Corp., Cl. A(1) 40,000 1,912,500 - ------------------------------------------------------------- Jacor Communications, Inc.(1) 30,000 1,770,000 ------------ 8,417,500 - ------------------------------------------------------------- RETAIL: GENERAL - 1.7% Federated Department Stores, Inc.(1) 85,000 4,574,062
94 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------- RETAIL: SPECIALTY - 2.0% AutoZone, Inc.(1) 70,000 $ 2,235,625 - ------------------------------------------------------------- Nine West Group, Inc.(1) 85,000 2,279,062 - ------------------------------------------------------------- Petco Animal Supplies, Inc.(1) 40,000 797,500 ------------ 5,312,187 - ------------------------------------------------------------- CONSUMER NON-CYCLICALS - 5.8% - ------------------------------------------------------------- BEVERAGES - 0.7% Anheuser-Busch Cos., Inc. 41,000 1,934,687 - ------------------------------------------------------------- FOOD - 0.5% Unilever NV, NY Shares 15,000 1,184,062 - ------------------------------------------------------------- HEALTHCARE/DRUGS - 0.9% American Home Products Corp. 17,500 905,625 - ------------------------------------------------------------- BioChem Pharma, Inc.(1) 50,000 1,325,000 - ------------------------------------------------------------- CliniChem Development, Inc. 1,250 7,187 ------------ 2,237,812 - ------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 0.2% Acuson Corp.(1) 25,000 454,687 - ------------------------------------------------------------- HOUSEHOLD GOODS - 0.7% Fort James Corp. 25,000 1,112,500 - ------------------------------------------------------------- Kimberly-Clark Corp. 15,000 688,125 ------------ 1,800,625 - ------------------------------------------------------------- TOBACCO - 2.8% Philip Morris Cos., Inc. 115,000 4,528,125 - ------------------------------------------------------------- RJR Nabisco Holdings Corp. 115,000 2,731,250 ------------ 7,259,375 - ------------------------------------------------------------- ENERGY - 5.1% - ------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 4.9% BJ Services Co.(1) 27,500 799,219 - ------------------------------------------------------------- Coflexip SA, Sponsored ADR 40,000 2,445,000 - ------------------------------------------------------------- Cooper Cameron Corp.(1) 32,500 1,657,500 - ------------------------------------------------------------- EVI Weatherford, Inc.(1) 21,375 793,547 - ------------------------------------------------------------- Marine Drilling Cos., Inc.(1) 35,000 560,000 - ------------------------------------------------------------- Santa Fe International Corp. 55,000 1,663,750 - ------------------------------------------------------------- Stolt Comex Seaway SA(1) 135,000 2,615,625 - ------------------------------------------------------------- Stolt Comex Seaway SA, ADR(1) 67,500 1,181,250 - ------------------------------------------------------------- Transocean Offshore, Inc. 25,000 1,112,500 ------------ 12,828,391 - ------------------------------------------------------------- OIL-INTEGRATED - 0.2% Petroleo Brasileiro SA, Preference 2,630,000 488,887 - ------------------------------------------------------------- FINANCIAL - 19.1% - ------------------------------------------------------------- BANKS - 11.3% Banco Rio de la Plata SA, ADR 50,000 528,125 - ------------------------------------------------------------- BankAmerica Corp. 29,000 2,506,687
95 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------- BANKS (CONTINUED) Chase Manhattan Corp. (New) 85,000 $ 6,417,500 - ------------------------------------------------------------- Citicorp 12,880 1,922,340 - ------------------------------------------------------------- Commercial Federal Corp. 32,500 1,027,812 - ------------------------------------------------------------- Compass Bancshares, Inc. 10,000 451,250 - ------------------------------------------------------------- Credito Italiano SpA 190,000 994,599 - ------------------------------------------------------------- First Chicago NBD Corp. 11,400 1,010,325 - ------------------------------------------------------------- First Union Corp. 68,850 4,010,513 - ------------------------------------------------------------- Fleet Financial Group, Inc. 25,000 2,087,500 - ------------------------------------------------------------- Hubco, Inc. 47,500 1,701,094 - ------------------------------------------------------------- KeyCorp 20,000 712,500 - ------------------------------------------------------------- Societe Generale 7,500 1,555,821 - ------------------------------------------------------------- Sovereign Bancorp, Inc. 92,500 1,511,797 - ------------------------------------------------------------- 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(3) 25,000 737,500 - ------------------------------------------------------------- Union Planters Corp. 45,000 2,646,563 ------------ 29,821,926 - ------------------------------------------------------------- DIVERSIFIED FINANCIAL - 3.0% American Express Co.(2) 15,000 1,710,000 - ------------------------------------------------------------- Arm Financial Group, Inc., Cl. A 55,000 1,216,875 - ------------------------------------------------------------- CRIIMI MAE, Inc. 25,000 346,875 - ------------------------------------------------------------- Merrill Lynch & Co., Inc.(2) 2,500 230,625 - ------------------------------------------------------------- Morgan Stanley Dean Witter & Co. 18,500 1,690,438 - ------------------------------------------------------------- Travelers Group, Inc. 10,000 606,250 - ------------------------------------------------------------- UniCapital Corp.(1) 115,000 2,199,375 ------------ 8,000,438 - ------------------------------------------------------------- INSURANCE - 4.8% Allstate Corp. 35,000 3,204,688 - ------------------------------------------------------------- Cigna Corp. 9,000 621,000 - ------------------------------------------------------------- Everest Reinsurance Holdings, Inc. 200,000 7,687,500 - ------------------------------------------------------------- Life Re Corp. 15,000 1,230,000 ------------ 12,743,188 - ------------------------------------------------------------- INDUSTRIAL - 12.2% - ------------------------------------------------------------- ELECTRICAL EQUIPMENT - 0.6% Raychem Corp. 55,000 1,625,938 - ------------------------------------------------------------- INDUSTRIAL MATERIALS - 1.9% Kennametal, Inc. 67,500 2,818,125 - ------------------------------------------------------------- Owens Corning 25,000 1,020,313 - ------------------------------------------------------------- Owens-Illinois, Inc.(1) 25,000 1,118,750 ------------ 4,957,188 - ------------------------------------------------------------- INDUSTRIAL SERVICES - 4.7% Allied Waste Industries, Inc.(1) 27,500 660,000
96 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------- INDUSTRIAL SERVICES (CONTINUED) Ikon Office Solutions, Inc. 225,000 $ 3,276,563 - ------------------------------------------------------------- Loewen Group, Inc. 20,000 540,000 - ------------------------------------------------------------- Waste Management, Inc. 225,000 7,875,000 ------------ 12,351,563 - ------------------------------------------------------------- MANUFACTURING - 5.0% American Standard Cos., Inc.(1) 75,000 3,351,563 - ------------------------------------------------------------- Halter Marine Group, Inc.(1) 305,000 4,594,063 - ------------------------------------------------------------- MascoTech, Inc. 40,000 960,000 - ------------------------------------------------------------- Mettler-Toledo International, Inc.(1) 202,500 4,062,656 - ------------------------------------------------------------- Tenneco, Inc. (New) 7,500 285,469 ------------ 13,253,751 - ------------------------------------------------------------- TECHNOLOGY - 14.5% - ------------------------------------------------------------- AEROSPACE/DEFENSE - 0.1% Boeing Co. 6,500 289,656 - ------------------------------------------------------------- COMPUTER HARDWARE - 4.2% International Business Machines Corp. 17,500 2,009,219 - ------------------------------------------------------------- Seagate Technology, Inc.(1)(2) 20,000 476,250 - ------------------------------------------------------------- Sun Microsystems, Inc.(1) 30,000 1,303,125 - ------------------------------------------------------------- Waters Corp.(1) 122,500 7,219,844 ------------ 11,008,438 - ------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 8.0% First Data Corp.(2) 125,000 4,164,063 - ------------------------------------------------------------- PLATINUM Technology, Inc.(1) 250,000 7,140,625 - ------------------------------------------------------------- Structural Dynamics Research Corp.(1) 357,500 8,267,188 - ------------------------------------------------------------- Unigraphics Solutions, Inc.(1) 99,400 1,391,600 ------------ 20,963,476 - ------------------------------------------------------------- ELECTRONICS - 0.3% Intel Corp.(2) 4,000 296,500 - ------------------------------------------------------------- LSI Logic Corp.(1)(2) 7,500 172,969 - ------------------------------------------------------------- Xilinx, Inc.(1)(2) 6,000 204,000 ------------ 673,469 - ------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 1.9% CIENA Corp.(1)(2) 20,000 1,392,500 - ------------------------------------------------------------- Cisco Systems, Inc.(2) 22,500 2,071,406 - ------------------------------------------------------------- RCN Corp.(1) 73,800 1,429,875 ------------ 4,893,781 - ------------------------------------------------------------- UTILITIES - 3.5% - ------------------------------------------------------------- TELEPHONE UTILITIES - 3.5% MCI Communications Corp. 72,500 4,214,063 - ------------------------------------------------------------- Qwest Communications International, Inc.(1) 99,118 3,456,740
97 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ------------------------------------------------------------- TELEPHONE UTILITIES (CONTINUED) Telecomunicacoes Brasileiras SA, Sponsored ADR 14,250 $ 1,555,922 ------------ 9,226,725 ------------ Total Common Stocks (Cost $199,647,145) 224,583,372 - ------------------------------------------------------------- PREFERRED STOCKS - 7.2% - ------------------------------------------------------------- Automatic Commission Exchange Security Trust II, 6.50% Cv. Preferred (exchangeable to common stock of Republic Industries, Inc. "TRACES" effective 5/15/00) 100,000 2,400,000 - ------------------------------------------------------------- Budget Group, Inc., 6.25% Cv.(4) 25,000 1,453,125 - ------------------------------------------------------------- Continental Airlines Finance Trust, 8.50% Cv. Trust Originated Preferred Securities 10,000 1,273,750 - ------------------------------------------------------------- Evergreen Media Corp., 6% Cv. Preferred(4) 20,000 2,055,000 - ------------------------------------------------------------- Host Marriott Corp. 6.75% Preferred Stock 2,500 132,188 - ------------------------------------------------------------- Host Marriott Financial Trust, 6.75% Cv. Preferred Stock(4) 25,000 1,321,875 - ------------------------------------------------------------- ICG Communications, Inc., 6.75% Cv. Preferred Stock(4) 50,000 4,181,250 - ------------------------------------------------------------- Intermedia Communications, Inc., 7% Cv. Preferred Stock(4) 72,770 4,047,831 - ------------------------------------------------------------- QUALCOMM Financial Trust I, 5.75% Cum. Cv. Preferred Securities, Non-Vtg. 25,000 1,206,250 - ------------------------------------------------------------- Union Pacific Capital Trust, 6.25% Cv. Preferred Stock(4) 20,000 922,500 ------------ Total Preferred Stocks (Cost $14,399,660) 18,993,769 - ------------------------------------------------------------- OTHER SECURITIES - 0.9% - ------------------------------------------------------------- Houston Industries, Inc., 7% Automatic Common Exchange Securities, 7/1/00 (Time Warner, Inc.) 25,000 1,862,500 - ------------------------------------------------------------- Merrill Lynch & Co., Inc., 6.25% Structured Yield Product Exchangeable for Stock of IMC Global, Inc. 17,500 551,250 ------------ Total Other Securities (Cost $1,813,623) 2,413,750 PRINCIPAL AMOUNT - ------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS - 2.4% - ------------------------------------------------------------- U.S. Treasury Bonds, 6.375%, 8/15/27 $1,500,000 1,648,126 - ------------------------------------------------------------- U.S. Treasury Bonds, 6.50%, 11/15/26 3,500,000 3,888,283 - ------------------------------------------------------------- U.S. Treasury Bonds, STRIPS, 6.146%, 2/15/27(5) 3,000,000 608,802 ------------ Total U.S. Government Obligations (Cost $5,389,128) 6,145,211 - ------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES - 4.7% - ------------------------------------------------------------- Adaptec, Inc., 4.75% Cv. Sub. Nts., 2/1/04(4) 1,000,000 760,000 - ------------------------------------------------------------- Adaptec, Inc., 4.75% Cv. Sub. Nts., 2/1/04 500,000 380,000 - ------------------------------------------------------------- AMF Bowling, Inc., Zero Coupon Cv. Debs., 7%, 5/12/18(4)(5) 5,000,000 1,300,000 - ------------------------------------------------------------- Continental Airlines, Inc., 6.75% Cv. Sub. Nts., 4/15/06 500,000 1,033,125 - ------------------------------------------------------------- Corporate Express, Inc., 4.50% Cv. Sub. Nts., 7/1/00 1,250,000 1,156,250 - ------------------------------------------------------------- Magna International, Inc., 4.875% Cv. Sub. Debs., 2/15/05(4) 500,000 552,500 - ------------------------------------------------------------- PLATINUM Technology, Inc., 6.25% Cv. Sub. Nts., 12/15/02(4) 2,000,000 2,072,500 - ------------------------------------------------------------- PLATINUM Technology, Inc., 6.75% Cv. Sub. Nts., 11/15/01 500,000 1,056,875 - ------------------------------------------------------------- Quantum Corp., 7% Cv. Sub. Nts., 8/1/04 1,250,000 1,200,000 - ------------------------------------------------------------- Saks Holdings, Inc., 5.50% Cv. Sub. Nts., 9/15/06 1,750,000 1,614,375
98 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
PRINCIPAL MARKET VALUE AMOUNT NOTE 1 - ------------------------------------------------------------- CONVERTIBLE CORPORATE BONDS AND NOTES (CONTINUED) - ------------------------------------------------------------- Tower Automotive, Inc., 5% Cv. Sub. Nts., 8/1/04(4) $ 500,000 $ 520,625 - ------------------------------------------------------------- Western Digital Corp., Zero Coupon Cv. Sub. Debs., 5.249%, 2/18/18(4)(5) 3,000,000 787,500 ------------ Total Convertible Corporate Bonds and Notes (Cost $11,743,013) 12,433,750 - ------------------------------------------------------------- REPURCHASE AGREEMENTS - 0.2% - ------------------------------------------------------------- Repurchase agreement with Salomon Smith Barney Holdings, Inc., 5.90%, dated 6/30/98, to be repurchased at $500,082 7/1/98, collateralized by U.S. Treasury Bonds, 8.75%-10.625%, 2/15/15-2/15/19, with a value of $513,294 500,000 500,000 - ------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $233,492,569) 100.9% 265,069,852 - ------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.9) (2,289,590) ---------- ------------ NET ASSETS 100.0% $262,780,262 ---------- ------------ ---------- ------------
1. Non-income producing security. 2. A sufficient amount of liquid assets has been designated to cover outstanding written call options, as follows:
MARKET SHARES SUBJECT EXPIRATION EXERCISE PREMIUM VALUE TO CALL DATE PRICE RECEIVED NOTE 1 - ---------------------------------------------------------------------------------------------------------------- AMR Corp. 5,000 7/98 $ 78 $ 22,974 $ 31,875 American Express Co. 7,500 10/98 115 50,711 51,563 CBS Corp. 50,000 7/98 38 67,248 3,125 CIENA Corp. 20,000 7/98 60 71,898 200,000 Cisco Systems, Inc. 15,000 7/98 67 171,108 380,625 First Data Corp. 75,000 8/98 40 54,373 4,688 First Data Corp. 30,000 7/98 35 30,974 9,375 Intel Corp. 4,000 7/98 75 5,630 9,000 LSI Logic Corp. 7,500 7/98 25 7,275 2,812 Merrill Lynch & Co., Inc. 2,500 7/98 95 4,924 5,937 Mirage Resorts, Inc. 30,000 8/98 30 38,474 1,875 Seagate Technology, Inc. 7,500 7/98 25 5,162 6,094 Xilinx, Inc. 6,000 7/98 40 2,880 1,500 ----------- ----------- $ 533,631 $ 708,469 ----------- ----------- ----------- -----------
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. 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 $19,974,706 or 7.60% of the Trust's net assets as of June 30, 1998. 5. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. See accompanying Notes to Financial Statements. 99 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER SMALL CAP GROWTH FUND STATEMENT OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
MARKET VALUE SHARES NOTE 1 - ----------------------------------------------------------------------------- COMMON STOCKS - 98.5% - ----------------------------------------------------------------------------- CONSUMER CYCLICALS - 14.4% - ----------------------------------------------------------------------------- AUTOS & HOUSING - 1.4% Fairfield Communities, Inc.(1) 200 $ 3,837 - ----------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 4.1% Cinar Films, Inc., Cl. B(1) 400 7,800 - ----------------------------------------------------------------------------- Star Buffet, Inc.(1) 400 3,300 ------- 11,100 - ----------------------------------------------------------------------------- MEDIA - 1.7% Applied Graphics Technologies, Inc.(1) 100 4,575 - ----------------------------------------------------------------------------- RETAIL: SPECIALTY - 7.2% Central Garden & Pet Co.(1) 100 3,112 - ----------------------------------------------------------------------------- Linens 'N Things, Inc.(1) 200 6,112 - ----------------------------------------------------------------------------- Pier 1 Imports, Inc. 200 4,775 - ----------------------------------------------------------------------------- Renters Choice, Inc.(1) 200 5,675 ------- 19,674 - ----------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 21.9% - ----------------------------------------------------------------------------- EDUCATION - 5.1% Education Management Corp.(1) 200 6,575 - ----------------------------------------------------------------------------- Strayer Education, Inc. 200 7,250 ------- 13,825 - ----------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 16.8% Cornell Corrections, Inc.(1) 400 8,400 - ----------------------------------------------------------------------------- Covance, Inc.(1) 200 4,500 - ----------------------------------------------------------------------------- Medical Manager Corp.(1) 200 5,525 - ----------------------------------------------------------------------------- Renal Care Group, Inc.(1) 200 8,812 - ----------------------------------------------------------------------------- Serologicals Corp.(1) 400 12,900 - ----------------------------------------------------------------------------- Ventana Medical Systems, Inc.(1) 200 5,600 ------- 45,737 - ----------------------------------------------------------------------------- ENERGY - 5.0% - ----------------------------------------------------------------------------- ENERGY SERVICES & PRODUCERS - 5.0% Cal Dive International, Inc.(1) 200 5,512 - ----------------------------------------------------------------------------- Core Laboratories NV(1) 200 4,325 - ----------------------------------------------------------------------------- Cross Timbers Oil Co. 200 3,813 ------- 13,650
100 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER SMALL CAP GROWTH FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ----------------------------------------------------------------------------- FINANCIAL - 7.7% - ----------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 7.7% First Alliance Corp.(1) 200 $ 1,400 - ----------------------------------------------------------------------------- Investors Financial Services Corp. 200 10,600 - ----------------------------------------------------------------------------- Resource America, Inc., Cl. A 300 8,888 ------- 20,888 - ----------------------------------------------------------------------------- INDUSTRIAL - 18.2% - ----------------------------------------------------------------------------- INDUSTRIAL SERVICES - 16.9% American Disposal Services, Inc.(1) 200 9,375 - ----------------------------------------------------------------------------- CORT Business Services Corp.(1) 100 3,150 - ----------------------------------------------------------------------------- Eastern Environmental Services, Inc.(1) 200 6,800 - ----------------------------------------------------------------------------- Group Maintenance America Corp.(1) 200 3,600 - ----------------------------------------------------------------------------- Metzler Group, Inc.(1) 200 7,325 - ----------------------------------------------------------------------------- NCO Group, Inc.(1) 200 4,400 - ----------------------------------------------------------------------------- Service Experts, Inc.(1) 100 3,450 - ----------------------------------------------------------------------------- U.S. Rentals, Inc.(1) 200 7,888 ------- 45,988 - ----------------------------------------------------------------------------- MANUFACTURING - 1.3% Applied Power, Inc., Cl. A 100 3,438 - ----------------------------------------------------------------------------- TECHNOLOGY - 21.7% - ----------------------------------------------------------------------------- COMPUTER HARDWARE - 4.6% Network Appliance, Inc.(1) 100 3,894 - ----------------------------------------------------------------------------- Zebra Technologies Corp., Cl. A(1) 200 8,550 ------- 12,444 - ----------------------------------------------------------------------------- COMPUTER SOFTWARE/SERVICES - 11.4% Aspen Technologies, Inc.(1) 100 5,050 - ----------------------------------------------------------------------------- Documentum, Inc.(1) 100 4,800 - ----------------------------------------------------------------------------- Engineering Animation, Inc.(1) 100 6,100 - ----------------------------------------------------------------------------- JDA Software Group, Inc.(1) 100 4,375 - ----------------------------------------------------------------------------- New Era of Networks, Inc.(1) 200 6,100 - ----------------------------------------------------------------------------- Visio Corp.(1) 100 4,775 ------- 31,200 - ----------------------------------------------------------------------------- ELECTRONICS - 2.7% Pittway Corp., Cl. A 100 7,388 - ----------------------------------------------------------------------------- TELECOMMUNICATIONS-TECHNOLOGY - 3.0% General Cable Corp. 150 4,331 - ----------------------------------------------------------------------------- Pacific Gateway Exchange, Inc.(1) 100 4,006 ------- 8,337
101 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER SMALL CAP GROWTH FUND STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES NOTE 1 - ----------------------------------------------------------------------------- UTILITIES - 9.6% - ----------------------------------------------------------------------------- TELEPHONE UTILITIES - 9.6% Electric Lightwave, Inc.(1) 200 $ 2,213 - ----------------------------------------------------------------------------- ICG Communications, Inc.(1) 100 3,656 - ----------------------------------------------------------------------------- RSL Communications Ltd., Cl. A(1) 200 6,000 - ----------------------------------------------------------------------------- Star Telecommunications, Inc. 200 4,475 - ----------------------------------------------------------------------------- Telegroup, Inc.(1) 400 3,700 - ----------------------------------------------------------------------------- US LEC Corp., Cl. A(1) 300 6,263 ------- 26,307 - ----------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $274,288) 98.5% 268,388 - ----------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.5 3,965 ------ ------- NET ASSETS 100.0% $272,353 ------ ------- ------ -------
1. Non-income producing security. See accompanying Notes to Financial Statements. 102 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 1998 (UNAUDITED)
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER AGGRESSIVE OPPENHEIMER MONEY HIGH INCOME BOND GROWTH GROWTH FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (cost *) (including repurchase agreements **) - see accompanying statements $ 134,634,424 $ 341,540,046 $ 658,280,308 $ 1,101,887,376 $ 661,873,611 - ------------------------------------------------------------------------------------------------------------------------- Unrealized appreciation on forward foreign currency exchange contracts - see applicable note -- 2,899 37,810 -- -- - ------------------------------------------------------------------------------------------------------------------------- Cash 41,074 47,303 4,122,700 85,962 252,868 - ------------------------------------------------------------------------------------------------------------------------- Receivables: Dividends, interest and principal paydowns 242,566 5,457,756 8,176,645 262,168 324,484 Closed forward foreign currency exchange contracts -- 122,437 -- -- -- Daily variation on futures contracts - see applicable note -- -- 159,189 -- -- Shares of beneficial interest sold 1,416,947 629,311 769,532 114,694 528,369 Investments sold -- 1,923,434 86,916,137 15,798,193 2,341,593 - ------------------------------------------------------------------------------------------------------------------------- Other 2,664 3,594 3,828 3,517 3,873 ------------- ------------- ------------- --------------- ------------- Total assets 136,337,675 349,726,780 758,466,149 1,118,151,910 665,324,798 - ------------------------------------------------------------------------------------------------------------------------- LIABILITIES Bank overdraft -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------- Options written, at value (premiums received ***) - see accompanying statements and notes -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------- Unrealized depreciation on forward foreign exchange contracts - see applicable note -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Closed forward foreign currency exchange contracts -- -- 16,014 -- -- Daily variation on futures contracts - see applicable note -- -- 66,516 -- -- Dividends 230,095 -- -- -- -- Custodian fees 1,714 13,308 15,782 7,854 8,288 Shareholder reports 21,565 53,455 79,628 74,914 73,932 Legal, auditing and other professional fees 4,544 7,334 6,579 8,600 6,333 Investments purchased (including those purchased on a when-issued basis ****) - see applicable note -- 8,753,878 184,893,140 15,255,568 6,620,975 Shares of beneficial interest redeemed 1,014,734 713,324 781,554 14,842,137 1,111,628 Other 8,693 67,578 10,847 19,210 23,725 ------------- ------------- ------------- --------------- ------------- Total liabilities 1,281,345 9,608,877 185,870,060 30,208,283 7,844,881 - ------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 135,056,330 $ 340,117,903 $ 572,596,089 $ 1,087,943,627 $ 657,479,917 ------------- ------------- ------------- --------------- ------------- ------------- ------------- ------------- --------------- ------------- - ------------------------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS Paid-in capital $ 135,072,452 $ 321,311,816 $ 550,102,017 $ 767,040,666 $ 477,057,694 - ------------------------------------------------------------------------------------------------------------------------- Undistributed (overdistributed) net investment income -- 7,936,671 10,105,624 (523,288) 2,014,855 - ------------------------------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) from investments and foreign currency transactions (16,122) 3,581,502 (147,266) 11,967,970 18,881,716 - ------------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies -- 7,287,914 12,535,714 309,458,279 159,525,652 ------------- ------------- ------------- --------------- ------------- Net Assets $ 135,056,330 $ 340,117,903 $ 572,596,089 $ 1,087,943,627 $ 657,479,917 ------------- ------------- ------------- --------------- ------------- ------------- ------------- ------------- --------------- ------------- - ------------------------------------------------------------------------------------------------------------------------- SHARES OF BENEFICIAL INTEREST OUTSTANDING 135,072,473 29,561,356 47,768,614 23,226,754 18,996,908 - ------------------------------------------------------------------------------------------------------------------------- NET ASSETS VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $ 1.00 $ 11.51 $ 11.99 $ 46.84 $ 34.61 * Cost $ 134,634,424 $ 334,254,757 $ 646,313,907 $ 792,429,098 $ 502,348,197 ** Repurchase agreements $ -- $ 45,500,000 $ 15,200,000 $ 28,000,000 $ 87,100,000 *** Premiums received $ -- $ -- $ -- $ -- $ -- **** When-issued $ -- $ 1,472,599 $ 167,878,635 $ -- $ --
See accompanying Notes to Financial Statements. 103 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 1998 (UNAUDITED) (CONTINUED)
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER MULTIPLE GLOBAL STRATEGIC GROWTH & SMALL STRATEGIES SECURITIES BOND INCOME CAP GROWTH FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (cost *) (including repurchase agreements **) - see accompanying statements $ 679,676,602 $ 1,147,796,728 $ 276,829,739 $ 265,069,852 $ 268,388 - ------------------------------------------------------------------------------------------------------------------------------- Unrealized appreciation on forward foreign currency exchange contracts - see applicable note -- -- 119,388 -- -- - ------------------------------------------------------------------------------------------------------------------------------- Cash 600,465 -- 258,088 1,190,321 7,986 - ------------------------------------------------------------------------------------------------------------------------------- Receivables: Dividends, interest and principal paydowns 4,569,235 1,844,610 4,303,016 458,387 -- Closed forward foreign currency exchange contracts -- 2,258,320 108,498 -- -- Daily variation on futures contracts - see applicable note -- -- 66,699 -- -- Shares of beneficial interest sold 179,763 374,264 80,513 480,216 1,251 Investments sold 246,911 2,951,544 3,803,435 2,547,726 -- - ------------------------------------------------------------------------------------------------------------------------------- Other 5,443 5,608 2,629 3,424 356 ------------- --------------- --------------- ---------------- -------------- Total assets 685,278,419 1,155,231,074 285,572,005 269,749,926 277,981 - ------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Bank overdraft -- 41,276 -- -- -- - ------------------------------------------------------------------------------------------------------------------------------- Options written, at value (premiums received ***) - see accompanying statements and notes 4,159,200 -- 14,343 708,469 -- - ------------------------------------------------------------------------------------------------------------------------------- Unrealized depreciation on forward foreign exchange contracts - see applicable note -- -- 11,255 -- -- - ------------------------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Closed forward foreign currency exchange contracts -- -- -- -- -- Daily variation on futures contracts - see applicable note -- -- -- -- -- Dividends -- -- -- -- -- Custodian fees 11,690 48,100 4,220 2,730 -- Shareholder reports 56,021 134,255 38,627 27,239 -- Legal, auditing and other professional fees 8,218 9,954 5,528 4,822 -- Investments purchased (including those purchased on a when-issued basis ****) - see applicable note 6,497,696 18,071,265 27,327,681 5,766,845 5,563 Shares of beneficial interest redeemed 513,012 1,094,872 718,539 431,912 -- Other 71 18,183 14,088 27,647 65 ------------- --------------- --------------- ---------------- -------------- Total liabilities 11,245,908 19,417,905 28,134,281 6,969,664 5,628 - ------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 674,032,511 $ 1,135,813,169 $ 257,437,724 $ 262,780,262 $ 272,353 ------------- --------------- --------------- ---------------- -------------- ------------- --------------- --------------- ---------------- -------------- - ------------------------------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS Paid-in capital $ 537,353,354 $ 902,385,261 $ 251,985,026 $ 222,385,707 $ 284,350 - ------------------------------------------------------------------------------------------------------------------------------- Undistributed (overdistributed) net investment income 7,955,462 6,429,535 6,225,829 668,366 (218) - ------------------------------------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) from investments and foreign currency transactions 18,875,263 66,987,773 (1,547,090) 8,323,744 (5,879) - ------------------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies 109,848,432 160,010,600 773,959 31,402,445 (5,900) ------------- --------------- --------------- ---------------- -------------- Net Assets $ 674,032,511 $ 1,135,813,169 $ 257,437,724 $ 262,780,262 $ 272,353 ------------- --------------- --------------- ---------------- -------------- ------------- --------------- --------------- ---------------- -------------- - ------------------------------------------------------------------------------------------------------------------------------- SHARES OF BENEFICIAL INTEREST OUTSTANDING 39,377,086 52,333,382 50,044,023 11,882,321 28,498 - ------------------------------------------------------------------------------------------------------------------------------- NET ASSETS VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $ 17.12 $ 21.70 $ 5.14 $ 22.12 $ 9.56 * Cost $ 568,233,097 $ 987,814,520 $ 276,278,205 $ 233,492,569 $ 274,288 ** Repurchase agreements $ 72,900,000 $ 125,900,000 $ 700,000 $ 500,000 $ -- *** Premiums received $ 2,591,585 $ -- $ 35,067 $ 533,631 $ -- **** When-issued $ 6,108,646 $ -- $ -- $ -- $ --
See accompanying Notes to Financial Statements. 104 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER AGGRESSIVE OPPENHEIMER MONEY HIGH INCOME BOND GROWTH GROWTH FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME Interest (net of withholding taxes of *) $ 3,583,705 $ 13,295,561 $ 19,195,999 $ 2,193,522 $ 2,524,652 - ------------------------------------------------------------------------------------------------------------------------ Dividends (net of withholding taxes of **) -- 807,461 119,249 742,064 1,718,135 ------------ ------------ ------------ ------------- ------------ Total income 3,583,705 14,103,022 19,315,248 2,935,586 4,242,787 - ------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees - see applicable note 282,326 1,164,161 1,968,262 3,302,300 2,059,876 - ------------------------------------------------------------------------------------------------------------------------ Custodian fees and expenses 5,666 348 5,403 22,032 14,739 - ------------------------------------------------------------------------------------------------------------------------ Legal, auditing and other professional fees 5,352 8,536 8,465 11,761 8,196 - ------------------------------------------------------------------------------------------------------------------------ Insurance expenses 1,705 2,486 2,497 3,477 2,501 - ------------------------------------------------------------------------------------------------------------------------ Trustees' fees and expenses 1,275 1,956 2,016 2,298 1,104 - ------------------------------------------------------------------------------------------------------------------------ Shareholder reports 19,808 53,724 56,937 62,057 72,712 - ------------------------------------------------------------------------------------------------------------------------ Other 5,294 17,907 13,111 23,520 26,382 ------------ ------------ ------------ ------------- ------------ Total expenses 321,426 1,249,118 2,056,691 3,427,445 2,185,510 - ------------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME (LOSS) 3,262,279 12,853,904 17,258,557 (491,859) 2,057,277 - ------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investments 13 5,476,478 2,797,815 15,136,947 19,246,751 Closing of futures contracts -- (718,512) (529,917) -- -- Closing and expiration of options written -- (34,656) -- -- -- Foreign currency transactions -- 241,282 175,431 (96) (114,060) - ------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation or depreciation on: Investments -- (3,297,928) 1,259,325 142,645,519 68,484,345 Translation of assets and liabilities denominated in foreign currencies -- (73,031) (265,254) 72,475 (208,526) ------------ ------------ ------------ ------------- ------------ Net realized and unrealized gain (loss) 13 1,593,633 3,437,400 157,854,845 87,408,510 - ------------------------------------------------------------------------------------------------------------------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 3,262,292 $ 14,447,537 $ 20,695,957 $ 157,362,986 $ 89,465,787 ------------ ------------ ------------ ------------- ------------ ------------ ------------ ------------ ------------- ------------ * Withholding taxes - interest $ -- $ -- $ 8,942 $ -- $ -- ** Withholding taxes - dividends $ -- $ -- $ -- $ -- $ --
1. For the period from May 1, 1998 (commencement of operations) to June 30, 1998. See accompanying Notes to Financial Statements. 105 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED) (CONTINUED)
OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER OPPENHEIMER MULTIPLE GLOBAL STRATEGIC GROWTH & SMALL CAP STRATEGIES SECURITIES BOND INCOME GROWTH FUND FUND FUND FUND FUND(1) - ------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME Interest (net of withholding taxes of *) $ 12,788,689 $ 7,041,632 $ 10,069,984 $ 762,632 $ 73 - ------------------------------------------------------------------------------------------------------------------------ Dividends (net of withholding taxes of **) 2,355,406 6,500,217 193,545 1,061,842 36 ------------ ------------- ------------ ------------ ------------ Total income 15,144,095 13,541,849 10,263,529 1,824,474 109 - ------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees - see applicable note 2,351,674 3,591,385 860,659 772,758 327 - ------------------------------------------------------------------------------------------------------------------------ Custodian fees and expenses 61,255 185,287 21,850 4,109 -- - ------------------------------------------------------------------------------------------------------------------------ Legal, auditing and other professional fees 11,745 14,284 6,793 8,317 -- - ------------------------------------------------------------------------------------------------------------------------ Insurance expenses 3,150 3,547 1,847 1,920 -- - ------------------------------------------------------------------------------------------------------------------------ Trustees' fees and expenses 4,147 2,370 678 1,310 -- - ------------------------------------------------------------------------------------------------------------------------ Shareholder reports 55,254 133,710 28,355 18,336 -- - ------------------------------------------------------------------------------------------------------------------------ Other 2,241 23,155 28,300 30,242 -- ------------ ------------- ------------ ------------ ------------ Total expenses 2,489,466 3,953,738 948,482 836,992 327 - ------------------------------------------------------------------------------------------------------------------------ NET INVESTMENT INCOME (LOSS) 12,654,629 9,588,111 9,315,047 987,482 (218) - ------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investments 20,134,610 81,848,753 958,461 8,321,705 (5,879) Closing of futures contracts -- (2,745,618) 540,883 -- -- Closing and expiration of options written 606,742 -- 27,036 121,772 -- Foreign currency transactions (1,106,375) (12,124,466) (1,600,504) (49,118) -- - ------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation or depreciation on: Investments 17,606,092 62,901,448 (2,599,726) 13,183,162 (5,900) Translation of assets and liabilities denominated in foreign currencies (5,164,837) (19,501,835) 809,683 (33,017) -- ------------ ------------- ------------ ------------ ------------ Net realized and unrealized gain (loss) 32,076,232 110,378,282 (1,864,167) 21,544,504 (11,779) - ------------------------------------------------------------------------------------------------------------------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 44,730,861 $ 119,966,393 $ 7,450,880 $ 22,531,986 $ (11,997) ------------ ------------- ------------ ------------ ------------ ------------ ------------- ------------ ------------ ------------ * Withholding taxes - interest $ -- $ -- $ 49,348 $ -- $ -- ** Withholding taxes - dividends $ 61,592 $ 322,537 $ -- $ -- $ --
1. For the period from May 1, 1998 (commencement of operations) to June 30, 1998. See accompanying Notes to Financial Statements. 106 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF CHANGES IN NET ASSETS FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1997
OPPENHEIMER OPPENHEIMER MONEY HIGH INCOME FUND FUND 1998 1997 1998 1997 - --------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 3,262,279 $ 6,934,054 $ 12,853,904 $ 19,861,042 - --------------------------------------------------------------------------------------------- Net realized gain (loss) 13 2,232 4,964,592 6,265,470 - --------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation -- -- (3,370,959) 93,210 ------------- ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations 3,262,292 6,936,286 14,447,537 26,219,722 - --------------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income (3,262,279) (6,937,040) (6,694,100) (18,546,183) - --------------------------------------------------------------------------------------------- Distributions from net realized gain -- -- (8,113,249) (138,778) - --------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS Net increase (decrease) in net assets resulting from beneficial interest transactions - see applicable note 8,273,935 (2,935,384) 49,154,924 92,494,657 - --------------------------------------------------------------------------------------------- NET ASSETS Total increase (decrease) 8,273,948 (2,936,138) 48,795,112 100,029,418 - --------------------------------------------------------------------------------------------- Beginning of period 126,782,382 129,718,520 291,322,791 191,293,373 ------------- ------------- ------------- ------------- End of period $ 135,056,330 $ 126,782,382 $ 340,117,903 $ 291,322,791 ------------- ------------- ------------- ------------- ------------- ------------- ------------- ------------- Undistributed (overdistributed) net investment income $ -- $ -- $ 7,936,671 $ 1,776,867
OPPENHEIMER OPPENHEIMER BOND AGGRESSIVE GROWTH FUND FUND 1998 1997 1998 1997 - ----------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 17,258,557 $ 30,219,733 $ (491,859) $ 2,349,366 - ----------------------------------------------------------------------------------------------- Net realized gain (loss) 2,443,329 4,038,585 15,136,851 21,293,313 - ----------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 994,071 6,440,140 142,717,994 61,517,825 ------------- ------------- --------------- ------------- Net increase (decrease) in net assets resulting from operations 20,695,957 40,698,458 157,362,986 85,160,504 - ----------------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income (9,009,960) (27,908,616) (2,267,792) (1,547,409) - ----------------------------------------------------------------------------------------------- Distributions from net realized gain (8,154,014) (1,447,022) (23,288,487) (30,466,762) - ----------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS Net increase (decrease) in net assets resulting from beneficial interest transactions - see applicable note 48,986,078 82,296,263 78,329,447 207,268,868 - ----------------------------------------------------------------------------------------------- NET ASSETS Total increase (decrease) 52,518,061 93,639,083 210,136,154 260,415,201 - ----------------------------------------------------------------------------------------------- Beginning of period 520,078,028 426,438,945 877,807,473 617,392,272 ------------- ------------- --------------- ------------- End of period $ 572,596,089 $ 520,078,028 $ 1,087,943,627 $ 877,807,473 ------------- ------------- --------------- ------------- ------------- ------------- --------------- ------------- Undistributed (overdistributed) net investment income $ 10,105,624 $ 1,857,027 $ (523,288) $ 2,236,363
See accompanying Notes to Financial Statements. 107 OPPENHEIMER VARIABLE ACCOUNT FUNDS STATEMENTS OF CHANGES IN NET ASSETS FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1997 (CONTINUED)
OPPENHEIMER OPPENHEIMER OPPENHEIMER GROWTH MULTIPLE STRATEGIES GLOBAL SECURITIES FUND FUND FUND 1998 1997 1998 1997 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 2,057,277 $ 3,966,775 $ 12,654,629 $ 21,778,851 $ 9,588,111 $ 12,143,675 - ------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) 19,132,691 47,435,793 19,634,977 34,197,105 66,978,669 103,718,556 - ------------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 68,275,819 34,194,334 12,441,255 32,455,612 43,399,613 33,657,002 ------------- ------------- ------------- ------------- --------------- ------------- Net increase (decrease) in net assets resulting from operations 89,465,787 85,596,902 44,730,861 88,431,568 119,966,393 149,519,233 - ------------------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income (3,939,381) (1,639,463) (5,964,037) (21,242,764) (21,307,082) (8,181,958) - ------------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gain (47,530,889) (17,220,011) (34,591,414) (18,354,349) (80,203,951) -- - ------------------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS Net increase (decrease) in net assets resulting from beneficial interest transactions - see applicable note 125,578,426 141,248,396 32,312,271 104,424,895 158,247,589 235,692,756 - ------------------------------------------------------------------------------------------------------------------------------- NET ASSETS Total increase (decrease) 163,573,943 207,985,824 36,487,681 153,259,350 176,702,949 377,030,031 - ------------------------------------------------------------------------------------------------------------------------------- Beginning of period 493,905,974 285,920,150 637,544,830 484,285,480 959,110,220 582,080,189 ------------- ------------- ------------- ------------- --------------- ------------- End of period $ 657,479,917 $ 493,905,974 $ 674,032,511 $ 637,544,830 $ 1,135,813,169 $ 959,110,220 ------------- ------------- ------------- ------------- --------------- ------------- ------------- ------------- ------------- ------------- --------------- ------------- Undistributed (overdistributed) net investment income $ 2,014,855 $ 3,896,959 $ 8,187,872 $ 1,264,870 $ 6,429,535 $ 18,148,506
OPPENHEIMER OPPENHEIMER OPPENHEIMER STRATEGIC BOND GROWTH & INCOME SMALL CAP FUND FUND GROWTH FUND(1) 1998 1997 1998 1997 1998 1997 - ------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 9,315,047 $ 13,156,048 $ 987,482 $ 1,094,913 $ (218) $ -- - ------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) (74,124) 894,858 8,394,359 9,837,467 (5,879) -- - ------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation (1,790,043) (441,401) 13,150,145 15,049,196 (5,900) -- ------------- ------------- ------------- ------------- --------- ------------- Net increase (decrease) in net assets resulting from operations 7,450,880 13,609,505 22,531,986 25,981,576 (11,997) -- - ------------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS Dividends from net investment income (3,974,494) (12,654,390) (449,201) (976,438) -- -- - ------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gain (2,561,341) (207,080) (9,891,404) (2,670,354) -- -- - ------------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS Net increase (decrease) in net assets resulting from beneficial interest transactions - see applicable note 48,683,275 88,374,959 95,221,131 86,023,722 284,350 -- - ------------------------------------------------------------------------------------------------------------------------- NET ASSETS Total increase (decrease) 49,598,320 89,122,994 107,412,512 108,358,506 272,353 -- - ------------------------------------------------------------------------------------------------------------------------- Beginning of period 207,839,404 118,716,410 155,367,750 47,009,244 -- -- ------------- ------------- ------------- ------------- --------- ------------- End of period $ 257,437,724 $ 207,839,404 $ 262,780,262 $ 155,367,750 $ 272,353 $ -- ------------- ------------- ------------- ------------- --------- ------------- ------------- ------------- ------------- ------------- --------- ------------- Undistributed (overdistributed) net investment income $ 6,225,829 $ 885,276 $ 668,366 $ 130,085 $ (218) $ --
1. For period from May 1, 1998 (commencement of operations) to June 30, 1998. See accompanying Notes to Financial Statements. 108 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MONEY FUND FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 1998 ------------------------------------------------------------ (UNAUDITED) 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 $1.00 - -------------------------------------------------------------------------------------------------------------- Income from investment operations - net investment income and net realized gain .03 .05 .05 .06 .04 .03 Dividends and distributions to shareholders (.03) (.05) (.05) (.06) (.04) (.03) - -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 - -------------------------------------------------------------------------------------------------------------- TOTAL RETURN(1) 2.61% 5.31% 5.13% 5.62% 4.25% 3.09% - -------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $ 135,056 $126,782 $129,719 $ 65,386 $ 89,671 $ 61,221 - -------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 126,567 $133,707 $ 99,263 $ 75,136 $ 90,264 $ 57,654 - -------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 5.20%(2) 5.19% 5.01% 5.52% 4.18% 3.12% Expenses 0.51%(2) 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. 2. Annualized. See accompanying Notes to Financial Statements. 109 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER HIGH INCOME FUND FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 1998 ------------------------------------------------------------ (UNAUDITED) 1997 1996 1995 1994 1993 - -------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $11.52 $11.13 $10.63 $ 9.79 $11.02 $ 9.74 - -------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .43 .94 .97 .98 .94 .82 Net realized and unrealized gain (loss) .11 .37 .58 .94 (1.27) 1.65 - -------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations .54 1.31 1.55 1.92 (.33) 2.47 - -------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.25) (.91) (1.05) (1.08) (.66) (1.19) Distributions from net realized gain (.30) (.01) -- -- (.24) -- - -------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (.55) (.92) (1.05) (1.08) (.90) (1.19) - -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $11.51 $11.52 $11.13 $10.63 $ 9.79 $11.02 ------------- -------- -------- -------- -------- -------- ------------- -------- -------- -------- -------- -------- - -------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 4.76% 12.21% 15.26% 20.37% (3.18)% 26.34% - -------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $ 340,118 $291,323 $191,293 $133,451 $ 95,698 $ 93,011 - -------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 317,995 $223,617 $157,203 $115,600 $101,096 $ 67,000 - -------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 8.15%(2) 8.88% 9.18% 9.81% 9.15% 10.50% Expenses 0.79%(2) 0.82% 0.81% 0.81% 0.67% 0.68% - -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(3) 144.3% 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. Annualized. 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 June 30, 1998 were $443,903,801 and $376,184,299, respectively. See accompanying Notes to Financial Statements. 110 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER BOND FUND FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 1998 ------------------------------------------------------------ (UNAUDITED) 1997 1996 1995 1994 1993 - -------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $11.91 $11.63 $11.84 $10.78 $11.65 $10.99 - -------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .37 .76 .69 .72 .76 .65 Net realized and unrealized gain (loss) .09 .28 (.15) 1.07 (.98) .76 - -------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations .46 1.04 .54 1.79 (.22) 1.41 - -------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.20) (.72) (.74) (.73) (.62) (.75) Distributions from net realized gain (.18) (.04) (.01) -- (.03) -- - -------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (.38) (.76) (.75) (.73) (.65) (.75) - -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $11.99 $11.91 $11.63 $11.84 $10.78 $11.65 ------ -------- -------- -------- -------- -------- ------ -------- -------- -------- -------- -------- - -------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 3.94% 9.25% 4.80% 17.00% (1.94)% 13.04% - -------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $ 572,596 $520,078 $426,439 $211,232 $135,067 $111,846 - -------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 549,442 $449,760 $296,253 $170,929 $121,884 $ 87,215 - -------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 6.33%(2) 6.72% 6.72% 6.91% 7.30% 7.20% Expenses 0.75%(2) 0.78% 0.78% 0.80% 0.57% 0.46% - -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(3) 12.4% 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. Annualized. 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 June 30, 1998 were $136,308,857 and $63,248,543, respectively. See accompanying Notes to Financial Statements. 111 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER AGGRESSIVE GROWTH FUND FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 1998 ------------------------------------------------------------ (UNAUDITED) 1997 1996 1995 1994 1993 - -------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $40.96 $38.71 $34.21 $25.95 $31.64 $26.04 - -------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (.02) .10 .09 .11 .10 .05 Net realized and unrealized gain (loss) 7.07 4.01 6.59 8.29 (2.22) 6.71 - -------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations 7.05 4.11 6.68 8.40 (2.12) 6.76 - -------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.10) (.09) (.11) (.09) (.04) (.06) Distributions from net realized gain (1.07) (1.77) (2.07) (.05) (3.53) (1.10) - -------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (1.17) (1.86) (2.18) (.14) (3.57) (1.16) - -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $46.84 $40.96 $38.71 $34.21 $25.95 $31.64 ------ -------- -------- -------- -------- -------- ------ -------- -------- -------- -------- -------- - -------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 17.40% 11.67% 20.22% 32.52% (7.59)% 27.32% - -------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $1,087,944 $877,807 $617,392 $325,404 $185,774 $136,885 - -------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 971,134 $753,852 $467,080 $240,730 $153,832 $ 98,228 - -------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income (0.10)%(2) 0.31% 0.32% 0.47% 0.50% 0.23% Expenses 0.71%(2) 0.73% 0.75% 0.78% 0.57% 0.47% - -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(3) 36.7% 87.6% 100.1% 125.5% 96.5% 122.8%
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. Annualized. 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 June 30, 1998 were $475,558,904 and $334,257,411, respectively. See accompanying Notes to Financial Statements. 112 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH FUND FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 1998 ------------------------------------------------------------ (UNAUDITED) 1997 1996 1995 1994 1993 - -------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $32.44 $27.24 $23.55 $17.68 $17.70 $16.96 - -------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 0.09 .25 .15 .25 .22 .46 Net realized and unrealized gain (loss) 5.26 6.62 5.46 6.10 (.05) .74 - -------------------------------------------------------------------------------------------------------------- Total income from investment operations 5.35 6.87 5.61 6.35 .17 1.20 - -------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.24) (.15) (.25) (.22) (.15) (.14) Distributions from net realized gain (2.94) (1.52) (1.67) (.26) (.04) (.32) - -------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (3.18) (1.67) (1.92) (.48) (.19) (.46) - -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $34.61 $32.44 $27.24 $23.55 $17.68 $17.70 ------ -------- -------- -------- -------- -------- ------ -------- -------- -------- -------- -------- - -------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 17.03% 26.68% 25.20% 36.65% 0.97% 7.25% - -------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $ 657,480 $493,906 $285,920 $117,710 $ 63,283 $ 56,701 - -------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 577,221 $390,447 $152,466 $ 88,803 $ 59,953 $ 46,389 - -------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 0.72%(2) 1.02% 1.08% 1.46% 1.38% 1.13% Expenses 0.76%(2) 0.75% 0.81%(3) 0.79% 0.58% 0.50% - -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(4) 32.1% 66.0% 65.4% 58.2% 53.8% 12.6%
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. Annualized. 3. The expense ratio was 0.79% net of the voluntary reimbursement by the Manager. 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 June 30, 1998 were $254,181,356 and $156,337,547, respectively. See accompanying Notes to Financial Statements. 113 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER MULTIPLE STRATEGIES FUND FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 1998 ------------------------------------------------------------ (UNAUDITED) 1997 1996 1995 1994 1993 - -------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $17.01 $15.63 $14.55 $12.91 $13.88 $12.47 - -------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .32 .62 .72 .66 .63 .55 Net realized and unrealized gain (loss) .88 1.95 1.45 2.00 (.90) 1.41 - -------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations 1.20 2.57 2.17 2.66 (.27) 1.96 - -------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.16) (.61) (.74) (.65) (.60) (.55) Distributions from net realized gain (.93) (.58) (.35) (.37) (.10) -- - -------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (1.09) (1.19) (1.09) (1.02) (.70) (.55) - -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $17.12 $17.01 $15.63 $14.55 $12.91 $13.88 ------ -------- -------- -------- -------- -------- ------ -------- -------- -------- -------- -------- - -------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 7.09% 17.22% 15.50% 21.36% (1.95)% 15.95% - -------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $ 674,033 $637,545 $484,285 $381,263 $292,067 $250,290 - -------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 664,192 $564,369 $428,277 $344,745 $279,949 $199,954 - -------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 3.84%(2) 3.86% 4.89% 4.81% 4.90% 4.44% Expenses 0.76%(2) 0.75% 0.77% 0.77% 0.56% 0.48% - -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(3) 29.4% 41.9% 40.3% 39.0% 31.4% 32.4%
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. Annualized. 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 June 30, 1998 were $169,849,310 and $164,777,119, respectively. See accompanying Notes to Financial Statements. 114 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GLOBAL SECURITIES FUND FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 1998 ------------------------------------------------------------ (UNAUDITED) 1997 1996 1995 1994 1993 - -------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $21.37 $17.67 $15.00 $15.09 $16.30 $ 9.57 - -------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) .18 .25 .15 .12 .04 (.02) Net realized and unrealized gain (loss) 2.33 3.68 2.52 .19 (.96) 6.75 - -------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations 2.51 3.93 2.67 .31 (.92) 6.73 - -------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.46) (.23) -- -- (.04) -- Distributions from net realized gain (1.72) -- -- (.40) (.25) -- - -------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (2.18) (.23) -- (.40) (.29) -- - -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $21.70 $21.37 $17.67 $15.00 $15.09 $16.30 ------ -------- -------- -------- -------- -------- ------ -------- -------- -------- -------- -------- - -------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(1) 12.19% 22.42% 17.80% 2.24% (5.72)% 70.32% - -------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $1,135,813 $959,110 $582,080 $360,979 $297,842 $ 96,425 - -------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $1,068,024 $802,389 $466,750 $332,336 $214,545 $ 31,696 - -------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 1.81%(2) 1.51% 1.09% 0.86% 0.54% 0.72% Expenses 0.75%(2) 0.76% 0.81% 0.89% 0.91% 0.92% - -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(3) 44.3% 67.1% 89.9% 131.3% 70.4% 65.1%
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. Annualized. 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 June 30, 1998 were $414,965,998 and $411,048,811, respectively. See accompanying Notes to Financial Statements. 115 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER STRATEGIC BOND FUND FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 1998 ------------------------------------------------------------ (UNAUDITED) 1997 1996 1995 1994 1993(1) - -------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $5.12 $5.09 $4.91 $4.60 $5.12 $5.00 - -------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .19 .39 .38 .38 .35 .10 Net realized and unrealized gain (loss) (.02) .04 .19 .30 (.54) .11 - -------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations .17 .43 .57 .68 (.19) .21 - -------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.09) (.39) (.39) (.37) (.32) (.09) Distributions in excess of net realized gain (.06) (.01) -- -- (.01) -- - -------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (.15) (.40) (.39) (.37) (.33) (.09) - -------------------------------------------------------------------------------------------------------------- Net asset value, end of period $5.14 $5.12 $5.09 $4.91 $4.60 $5.12 ------------- -------- -------- -------- -------- -------- ------------- -------- -------- -------- -------- -------- - -------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(2) 3.30% 8.71% 12.07% 15.33% (3.78)% 4.25% - -------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $ 257,438 $207,839 $118,716 $ 60,098 $ 20,320 $9,887 - -------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 232,999 $159,934 $ 82,604 $ 37,698 $ 15,389 $4,259 - -------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 8.06%(3) 8.23% 8.48% 9.32% 8.36% 5.67%(3) Expenses 0.82%(3) 0.83% 0.85% 0.85% 0.87% 0.96%(3) - -------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(4) 100.5% 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 June 30, 1998 were $251,069,880 and $212,695,324, respectively. See accompanying Notes to Financial Statements. 116 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER GROWTH & INCOME FUND FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, 1998 ---------------------------------- (UNAUDITED) 1997 1996 1995(1) - ------------------------------------------------------------------------------------ PER SHARE OPERATING DATA Net asset value, beginning of period $20.58 $16.37 $12.51 $10.00 - ------------------------------------------------------------------------------------ Income from investment operations: Net investment income .09 .19 .14 .01 Net realized and unrealized gain 2.60 4.91 3.91 2.52 - ------------------------------------------------------------------------------------ Total income from investment operations 2.69 5.10 4.05 2.53 - ------------------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.05) (.17) (.14) (.02) Distributions from net realized gain (1.10) (.72) (.05) -- - ------------------------------------------------------------------------------------ Total dividends and distributions to shareholders (1.15) (.89) (.19) (.02) - ------------------------------------------------------------------------------------ Net asset value, end of period $22.12 $20.58 $16.37 $12.51 ------ -------- -------- -------- ------ -------- -------- -------- - ------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE(2) 13.09% 32.48% 32.51% 25.25% - ------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $ 262,780 $155,368 $ 47,009 $4,288 - ------------------------------------------------------------------------------------ Average net assets (in thousands) $ 209,180 $ 94,906 $ 21,562 $1,809 - ------------------------------------------------------------------------------------ Ratios to average net assets: Net investment income 0.95%(3) 1.15% 1.41% 0.50%(3) Expenses 0.81%(3) 0.83% 1.00% 2.07%(3) - ------------------------------------------------------------------------------------ Portfolio turnover rate(4) 62.2% 78.5% 112.6% 23.7%
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 June 30, 1998 were $153,925,679 and $128,725,131, respectively. See accompanying Notes to Financial Statements. 117 OPPENHEIMER VARIABLE ACCOUNT FUNDS - OPPENHEIMER SMALL CAP GROWTH FUND FINANCIAL HIGHLIGHTS
PERIOD ENDED JUNE 30, 1998(1) (UNAUDITED) - ------------------------------------------------------------------------------- PER SHARE OPERATING DATA Net asset value, beginning of period $ 10.00 - ------------------------------------------------------------------------------- Income from investment operations: Net investment income (.01) Net realized and unrealized gain (.43) - ------------------------------------------------------------------------------- Total income from investment operations (.44) - ------------------------------------------------------------------------------- Net asset value, end of period $ 9.56 ------ ------ - ------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(2) (4.40)% - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in thousands) $272 - ------------------------------------------------------------------------------- Average net assets (in thousands) $262 - ------------------------------------------------------------------------------- Ratios to average net assets: Net investment income (0.50)%(3) Expenses 0.75%(3) - ------------------------------------------------------------------------------- Portfolio turnover rate(4) 23.2%
1. For the period from May 1, 1998 (commencement of operations) to June 30, 1998. 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 June 30, 1998 were $334,718 and $59,070, respectively. See accompanying Notes to Financial Statements. 118 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Money Fund (OMF), Oppenheimer High Income Fund (OHIF), Oppenheimer Bond Fund (OBF), Oppenheimer Aggressive Growth Fund (OAGF) operated under the name Oppenheimer Capital Appreciation Fund through April 30, 1998, Oppenheimer Growth Fund (OGF), Oppenheimer Multiple Strategies Fund (OMSF), Oppenheimer Global Securities Fund (OGSF), Oppenheimer Strategic Bond Fund (OSBF), Oppenheimer Growth & Income Fund (OGIF) and Oppenheimer Small Cap Growth Fund (OSCGF), (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. The Fund's investments include unrated securities or high risk securities in the lower rating categories, commonly known as "junk bonds", which are subject to a greater risk of loss of principal and nonpayment of interest than higher-rated securities. OPPENHEIMER BOND FUND primarily seeks a high level of current income. Secondarily, this Fund seeks capital growth when consistent with its primary objective. The Fund will, under normal market conditions, invest at least 65% of its total assets in investment grade debt securities. OPPENHEIMER AGGRESSIVE GROWTH 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 and 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 situations which are considered to have appreciation possibilities, but which may be considered to be speculative. OPPENHEIMER STRATEGIC BOND FUND seeks a high level of current income principally derived from interest on debt securities and seeks to enhance such income by writing covered call options on debt securities. The Fund intends to invest principally in: (i) foreign government and corporate debt securities, (ii) securities of the U.S. Government and its agencies and instrumentalities ("U.S. Government securities"), and (iii) lower-rated high yield domestic debt securities, commonly know as "junk bonds", which are subject to a greater risk of loss of principal and nonpayment of interest than higher-rated securities. Capital appreciation is not the objective. 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. From time to time this Fund may focus on small to medium capitalization common stocks, bonds and convertible securities. OPPENHEIMER SMALL CAP GROWTH FUND seeks capital appreciation. Current income is not an objective, In seeking its objective, the Fund emphasizes investments in securities of "growth-type" companies with market capitalization less than $1 billion, including common stocks, preferred stocks, convertible securities, rights, warrants and options, in proportions which may vary from time to time. 119 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) INVESTMENT VALUATION. Portfolio securities of OMF are valued on the basis of amortized cost, which approximates market value. Portfolio securities of OHIF, OBF, OAGF, OGF, OMSF, OGSF, OSBF, OGIF and OSCGF 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 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. The Funds may invest in commodity and foreign currency-linked structured notes whereby the market value and redemption price are linked to commodity indices and foreign currency exchange rates. The structured notes may be leveraged, which increase the notes' volatility relative to the face value of the security. Fluctuations in values of the securities are recorded as unrealized gains and losses in the accompanying financial statements. During the six months ended June 30, 1998, the market value of these securities comprised an average of 7% and 5%, respectively, of the net assets of OHIF and OSBF, and resulted in realized and unrealized gains of $294,901 and $628,052, respectively. - -------------------------------------------------------------------------------- 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 this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The 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 June 30, 1998, 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 $ 1,472,599 Oppenheimer Bond Fund 167,878,635 Oppenheimer Multiple Strategies Fund 6,108,646 Oppenheimer Strategic Bond Fund 22,106,088
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. 120 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. The aggregate market value of securities in default at June 30, 1998 for OHIF, OMSF and OSBF are shown below:
PERCENTAGE OF NET AMOUNT ASSETS - ------------------------------------------------------------------------------------------------------ Oppenheimer High Income Fund $ 42,665 0.01% Oppenheimer Multiple Strategies Fund 2,162,500 0.32 Oppenheimer Strategic Bond Fund 72,749 0.01
- -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The accounting records of the Funds are maintained in U.S. dollars. Prices of securities purchased by OHIF, OBF, OAGF, 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, OAGF, 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. - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders of OHIF, OBF, OAGF, OGF, OMSF, OGSF, OSBF, OGIF and OSCGF 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 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. 121 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 on the ex-date. 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. - -------------------------------------------------------------------------------- 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:
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1998 DECEMBER 31, 1997 -------------------------- -------------------------- OPPENHEIMER MONEY FUND SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------------------- Sold 148,757,96 $148,757,967 390,437,217 $390,437,217 Dividends and distributions reinvested 3,275,949 3,275,949 6,901,000 6,901,000 Redeemed (143,759,981) (143,759,981) (400,273,601) (400,273,601) ------------ ------------ ------------ ------------ Net increase (decrease) 8,273,935 $ 8,273,935 (2,935,384) $ (2,935,384) ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
OPPENHEIMER HIGH INCOME FUND - -------------------------------------------------------------------------------------------------- Sold 6,872,284 $79,631,842 14,372,458 $163,481,515 Dividends and distributions reinvested 1,300,031 14,807,349 1,658,451 18,684,961 Redeemed (3,908,532) (45,284,267) (7,919,351) (89,671,819) ------------ ------------ ------------ ------------ Net increase 4,263,783 $49,154,924 8,111,558 $ 92,494,657 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
OPPENHEIMER BOND FUND - --------------------------------------------------------------------------------------------------- Sold 9,163,206 $109,657,567 12,079,029 $142,326,116 Dividends and distributions reinvested 1,463,254 17,163,974 2,509,897 29,264,275 Redeemed (6,509,116) (77,835,463) (7,613,095) (89,294,128) ------------ ------------ ------------ ------------- Net increase 4,117,344 $ 48,986,078 6,975,831 $ 82,296,263 ------------ ------------ ------------ ------------- ------------ ------------ ------------ -------------
OPPENHEIMER AGGRESSIVE GROWTH FUND - --------------------------------------------------------------------------------------------------- Sold 5,823,298 $255,958,927 9,511,150 $368,762,665 Dividends and distributions reinvested 580,165 25,556,279 952,236 32,014,171 Redeemed (4,608,376) (203,185,759) (4,981,695) (193,507,968) ------------ ------------ ------------ ------------- Net increase 1,795,087 $ 78,329,447 5,481,691 $207,268,868 ------------ ------------ ------------ ------------- ------------ ------------ ------------ -------------
122 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST (CONTINUED)
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1998 DECEMBER 31, 1997 -------------------------- -------------------------- OPPENHEIMER GROWTH FUND SHARES AMOUNT SHARES AMOUNT - -------------------------------------------------------------------------------------------------- Sold 4,330,157 $145,734,005 10,437,357 $318,824,006 Dividends and distributions reinvested 1,565,398 51,470,270 720,274 18,842,365 Redeemed (2,122,009) (71,625,849) (6,429,313) (191,417,975) ------------ ------------- ------------ ------------ Net increase 3,773,546 $125,578,426 4,728,318 $141,248,396 ------------ ------------- ------------ ------------ ------------ ------------- ------------ ------------
OPPENHEIMER MULTIPLE STRATEGIES FUND - --------------------------------------------------------------------------------------------------- Sold 2,156,497 $37,223,913 6,728,904 $110,124,465 Dividends and distributions reinvested 2,387,019 40,555,452 2,517,354 39,597,113 Redeemed (2,639,502) (45,467,094) (2,765,980) (45,296,683) ------------ ------------ ------------ ------------- Net increase 1,904,014 $32,312,271 6,480,278 $104,424,895 ------------ ------------ ------------ ------------- ------------ ------------ ------------ -------------
OPPENHEIMER GLOBAL SECURITIES FUND - --------------------------------------------------------------------------------------------------- Sold 6,606,784 $143,954,552 17,881,768 $354,780,849 Dividends and distributions reinvested 4,877,993 101,511,033 446,370 8,181,958 Redeemed (4,035,341) (87,217,996) (6,390,329) (127,270,051) ------------ ------------ ------------ ------------ Net increase 7,449,436 $158,247,589 11,937,809 $235,692,756 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
OPPENHEIMER STRATEGIC BOND FUND - -------------------------------------------------------------------------------------------------- Sold 11,535,682 $59,546,651 18,907,314 $96,727,423 Dividends and distributions reinvested 1,279,028 6,535,834 2,528,920 12,861,470 Redeemed (3,375,252) (17,399,210) (4,147,991) (21,213,934) ------------ ------------ ------------ ------------ Net increase 9,439,458 $48,683,275 17,288,243 $88,374,959 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
OPPENHEIMER GROWTH & INCOME FUND - -------------------------------------------------------------------------------------------------- Sold 4,688,369 $102,660,619 5,209,743 $95,997,604 Dividends and distributions reinvested 468,325 10,340,605 216,162 3,646,792 Redeemed (825,554) (17,780,093) (745,544) (13,620,674) ------------ ------------ ------------ ------------ Net increase 4,331,140 $ 95,221,131 4,680,361 $86,023,722 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
PERIOD ENDED OPPENHEIMER SMALL CAP GROWTH FUND JUNE 30, 1998(1) - -------------------------------------------------------------------------------------------------- Sold 28,503 $ 284,402 -- $ -- Redeemed (5) (52) -- -- ------------ ------------ ------------ ------------ Net increase 28,498 $ 284,350 -- $ -- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
1. For the period from May 1, 1998 (commencement of operations) to June 30, 1998. 123 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS At June 30, 1998, net unrealized appreciation or depreciation on investments and options written consisted of the following:
OPPENHEIMER OPPENHEIMER HIGH INCOME OPPENHEIMER AGGRESSIVE OPPENHEIMER FUND BOND FUND GROWTH FUND GROWTH FUND - ------------------------------------------------------------------------------------------------------- Gross appreciation $10,884,978 $19,763,740 $316,497,388 $173,714,123 Gross depreciation 3,599,689 7,797,339 7,039,109 14,188,709 ----------- ----------- ------------ ------------ Net unrealized appreciation $ 7,285,289 $11,966,401 $309,458,279 $159,525,414 ----------- ----------- ------------ ------------ ----------- ----------- ------------ ------------
OPPENHEIMER OPPENHEIMER MULTIPLE GLOBAL OPPENHEIMER OPPENHEIMER STRATEGIES SECURITIES STRATEGIC GROWTH & FUND FUND BOND FUND INCOME FUND - ------------------------------------------------------------------------------------------------------- Gross appreciation $128,783,861 $218,615,689 $6,231,507 $42,514,387 Gross depreciation 18,907,971 58,633,482 5,659,249 11,111,942 ------------ ------------ ----------- ----------- Net unrealized appreciation $109,875,890 $159,982,207 $ 572,258 $31,402,445 ------------ ------------ ----------- ----------- ------------ ------------ ----------- -----------
OPPENHEIMER SMALL CAP GROWTH FUND - -------------------------------------------------------------- Gross appreciation $ 14,104 Gross depreciation 20,004 ----------- Net unrealized depreciation $ 5,900 ----------- -----------
- -------------------------------------------------------------------------------- 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, OAGF, OGF, OMSF, OGSF, OSBF, OGIF and OSCGF, 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 annual 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. 124 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 5. FORWARD CONTRACTS (CONTINUED) 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. At June 30, 1998, outstanding forward contracts were as follows:
VALUATION AS EXPIRATION CONTRACT OF JUNE 30, UNREALIZED UNREALIZED OPPENHEIMER HIGH INCOME FUND DATES AMOUNT (000'S) 1998 APPRECIATION DEPRECIATION - ------------------------------------------------------------------------------------------------------------- CONTRACTS TO SELL - ----------------------------- Canadian Dollar (CAD) 7/15/98 525 CAD $ 360,280 $ 2,899 $ --
OPPENHEIMER BOND FUND - ------------------------------------------------------------------------------------------------------------- CONTRACTS TO SELL - ----------------------------- Canadian Dollar (CAD) 7/15/98 4,000 CAD $ 2,722,905 $ 37,810 $ --
OPPENHEIMER STRATEGIC BOND FUND - -------------------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE - ----------------------------- Danish Krone (DKK) 7/1/98 832 DKK $ 120,983 $ 1,822 $ -- Greek Drachma (GRD) 7/17/98-7/20/98 218,300 GRD 714,651 -- 11,211 Japanese Yen (JPY) 7/31/98 7,560 JPY 55,066 -- 44 New Zealand Dollar (NZD) 7/22/98 1,875 NZD 969,175 7,791 -- South African Rand (ZAR) 7/3/98 5,080 ZAR 860,269 109,027 -- ----------- ------------- 118,640 11,255 ----------- ------------- CONTRACTS TO SELL - ----------------------------- Australian Dollar (AUD) 7/22/98 537 AUD 333,325 748 -- ----------- ------------- Total Unrealized Appreciation and Depreciation $ 119,388 $ 11,255 ----------- ------------- ----------- -------------
- -------------------------------------------------------------------------------- 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 in an amount (initial margin) 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. 125 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS (CONTINUED) 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. At June 30, 1998, outstanding futures contracts were as follows:
VALUATION AS UNREALIZED EXPIRATION NUMBER OF OF APPRECIATION OPPENHEIMER BOND FUND DATE CONTRACTS JUNE 30, 1998 (DEPRECIATION) - ------------------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE - ----------------------------------------------- U.S. Treasury Bonds, 30 yr. 9/98 566 $69,954,063 $ 796,563 ------------- CONTRACTS TO SELL - ----------------------------------------------- U.S. Treasury Nts., 5 yr. 9/98 265 29,067,188 (155,273) U.S. Treasury Nts., 10 yr. 9/98 156 17,759,625 (107,039) ------------- (262,312) ------------- $ 534,251 ------------- ------------- OPPENHEIMER STRATEGIC BOND FUND - ------------------------------------------------------------------------------------------------------ CONTRACTS TO PURCHASE - ----------------------------------------------- U.S. Treasury Bonds, 30 yr. 9/98 129 $15,943,594 $ 237,969 ------------- CONTRACTS TO SELL - ----------------------------------------------- German Government Bonds 9/98 5 749,253 (4,481) Standard & Poors 500 Index 9/98 14 4,000,500 (126,875) ------------- (131,356) ------------- $ 106,613 ------------- -------------
- -------------------------------------------------------------------------------- 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. 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. 126 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 7. OPTION ACTIVITY (CONTINUED) 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 six months June 30, 1998 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, 1997 -- $ -- -- $ -- Options written 200 45,875 6 50,220 Options closed or expired (200) (45,875) (6) (50,220) --------- ---------- ----------- ----------- Options outstanding at June 30, 1998 -- $ -- -- $ -- --------- ---------- ----------- ----------- --------- ---------- ----------- ----------- OPPENHEIMER MULTIPLE STRATEGIES FUND - ------------------------------------------------------------------------------------------------------ Options outstanding at December 31, 1997 6,056 $1,797,849 -- $ -- Options written 7,411 2,531,943 -- -- Options closed or expired (3,491) (1,043,730) -- -- Options exercised (2,497) (694,477) -- -- --------- ---------- ----------- ----------- Options outstanding at June 30, 1998 7,479 $2,591,585 -- $ -- --------- ---------- ----------- ----------- --------- ---------- ----------- ----------- OPPENHEIMER STRATEGIC BOND FUND - ------------------------------------------------------------------------------------------------------ Options outstanding at December 31, 1997 400 $ 3,679 224,820,000 $ 31,046 Options written 3,210,000 25,133 561,454,500 101,529 Options closed or expired (3,210,000) (25,133) (416,242,000) (44,571) Options exercised -- -- (369,070,000) (56,616) --------- ---------- ----------- ----------- Options outstanding at June 30, 1998 400 $ 3,679 962,500 $ 31,388 --------- ---------- ----------- ----------- --------- ---------- ----------- ----------- OPPENHEIMER GROWTH & INCOME FUND - ------------------------------------------------------------------------------------------------------ Options outstanding at December 31, 1997 880 $ 61,758 -- $ -- Options written 8,145 1,623,621 -- -- Options closed or expired (4,815) (641,383) -- -- Options exercised (1,610) (510,365) -- -- --------- ---------- ----------- ----------- Options outstanding at June 30, 1998 2,600 $ 533,631 -- $ -- --------- ---------- ----------- ----------- --------- ---------- ----------- -----------
- -------------------------------------------------------------------------------- 8. ILLIQUID AND RESTRICTED SECURITIES At June 30, 1998, 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 its 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 June 30, 1998 are shown below: 127 OPPENHEIMER VARIABLE ACCOUNT FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- 8. ILLIQUID AND RESTRICTED SECURITIES (CONTINUED) Information concerning restricted securities is as follows:
PERCENTAGE OF NET AMOUNT ASSETS - ------------------------------------------------------------------------------------------------------------ Oppenheimer Money Fund $13,000,000 9.62% Oppenheimer High Income Fund 27,656,030 8.13 Oppenheimer Bond Fund 37,742,036 6.60 Oppenheimer Aggressive Growth Fund 5,093,750 0.47 Oppenheimer Multiple Strategies Fund 3,556,141 0.53 Oppenheimer Strategic Bond Fund 14,409,842 5.60
OPPENHEIMER MONEY FUND The aggregate value of restricted securities is $3,000,000.
VALUATION PER UNIT AS OF ACQUISITION COST PER JUNE 30, SECURITY DATE UNIT 1998 - -------------------------------------------------------------------------------------------------------- SHORT-TERM NOTES - ----------------------------------------------------------- American Honda Finance Corp., 5.687%, 1/19/99 1/22/98 100.00% 100.00%
OPPENHEIMER HIGH INCOME FUND The aggregate value of restricted securities is $3,911,835.
VALUATION PER UNIT AS ACQUISITION COST PER OF SECURITY DATE UNIT JUNE 30, 1998 - -------------------------------------------------------------------------------------------------------- BONDS - ----------------------------------------------------------- ECM Fund, L.P. I., 14% Sub. Nts., 6/10/02 4/14/92 100.00% 100.25% Trans World Airlines Lease, 14% Equipment Trust, 7/2/08 3/19/98 101.00 107.00 STOCKS AND WARRANTS - ----------------------------------------------------------- CGA Group Ltd., Preferred Stock, Series A 6/17/97 $ 25.00 $ 25.00 CGA Group Ltd. Wts., Exp. 12/49 6/17/97 .00 .50 ECM Fund, L.P. I. 4/14/92 1,000.00 885.00 Omnipoint Corp. 1/16/96 16.00 21.79 Omnipoint Corp. Wts., Exp. 11/00 11/29/95 .00 21.79
OPPENHEIMER BOND FUND The aggregate value of restricted securities is $1,166,500.
VALUATION PER UNIT AS OF ACQUISITION COST PER JUNE 30, SECURITY DATE UNIT 1998 - -------------------------------------------------------------------------------------------------------- BONDS - ----------------------------------------------------------- Merrill Lynch & Co., Inc., Units, 9.75%, 6/15/99 5/15/95 110.05% 116.65%
OPPENHEIMER STRATEGIC BOND FUND The aggregate value of restricted securities is $408,000.
VALUATION PER UNIT AS OF ACQUISITION COST PER JUNE 30, SECURITY DATE UNIT 1998 - ------------------------------------------------------------------------------------------------------- STOCKS AND WARRANTS - ----------------------------------------------------------- CGA Group Ltd., Preferred Stock, Series A 6/17/97 $ 25.00 $25.00 CGA Group Ltd. Wts., Exp. 12/49 6/17/97 .00 .50
128 OPPENHEIMER VARIABLE ACCOUNT FUNDS SHAREHOLDER MEETING (UNAUDITED) - -------------------------------------------------------------------------------- On April 3, 1998, a shareholder meeting was held at which the following items and proposals were approved, as described in the Trust's proxy statement for that meeting. The following is a report of the votes cast:
WITHELD/ NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL - -------------------------------------------------------------------------------------------------- 1. Robert G. Avis 343,078,839.117 9,606,314.100 1,599,420.050 354,284,573.267 William A. Baker 341,475,509.412 11,209,603.805 1,599,420.050 354,284,533.267 Charles Conrad, Jr. 343,080,485.338 9,604,667.875 1,599,420.050 354,284,573.263 Jon S. Fossel 343,120,429.591 9,564,693.626 1,599,420.050 354,284,543.267 Sam Freedman 343,067,197.485 9,617,955.932 1,599,420.050 354,284,573.467 Raymond Kalinowski 343,091,550.638 9,593,562.482 1,599,420.050 354,284,533.170 C. Howard Kast 342,398,240.944 10,286,872.273 1,599,420.050 354,284,533.267 Robert M. Kirschner 342,299,180.973 10,385,932.244 1,599,420.050 354,284,533.267 Ned M. Steel 341,433,552.912 11,251,560.305 1,599,420.050 354,284,533.267 James C. Swain 343,086,111.667 9,595,015.871 1,603,405.729 354,284,533.267 2. Ratification of the selection of Deloitte & Touche LLP as independent auditors of the Trust for the fiscal year beginning January 1, 1998 (Proposal No. 1): 335,797,488.589 2,214,452.724 15,273,182.843 353,285,124.156 3(i). Approval of changes to the fundamental investment policies of Oppenheimer Money Fund on warrants, borrowing, investing in oil and gas exploration, investing in other investment companies and hedging. (Proposal No. 2): 96,286,996.003 11,207,036.137 9,478,262.875 116,972,295.015 3(ii). Approval of changes to the fundamental investment policies of Oppenheimer High Income Fund on warrants, borrowing, investing in oil and gas exploration, investing in other investment companies and hedging. (Proposal No. 2): 21,954,279.29 1,416,150.736 2,507,353.000 25,877,783.026 3(iii). Approval of changes to the fundamental investment policies of Oppenheimer Bond Fund on warrants, borrowing, investing in oil and gas exploration, investing in other investment companies and hedging. (Proposal No. 2): 34,400,730.76 2,437,071.467 2,884,944.412 39,722,748.643 3(iv). Approval of changes to the fundamental investment policies of Oppenheimer Strategic Bond Fund on warrants, borrowing, investing in oil and gas exploration, investing in other investment companies and hedging. (Proposal No. 2): 36,871,222.256 1,735,365.400 2,761,054.592 41,367,642.248 3(v). Approval of changes to the fundamental investment policies of Oppenheimer Aggressive Growth Fund on warrants, borrowing, investing in oil and gas exploration, investing in other investment companies and hedging. (Proposal No. 2): 17,965,586.548 1,398,668.778 1,384,173.270 20,748,428.596
129 OPPENHEIMER VARIABLE ACCOUNT FUNDS SHAREHOLDER MEETING (UNAUDITED) (CONTINUED) - --------------------------------------------------------------------------------
WITHELD/ NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL - -------------------------------------------------------------------------------------------------- 3(vi). Approval of changes to the fundamental investment policies of Oppenheimer Growth Fund on warrants, borrowing, investing in oil and gas exploration, investing in other investment companies and hedging. (Proposal No. 2): 10,043,951.548 796,895.779 743,803.638 11,584,650.965 3(vii). Approval of changes to the fundamental investment policies of Oppenheimer Multiple Strategies Fund on warrants, borrowing, investing in oil and gas exploration, investing in other investment companies and hedging. (Proposal No. 2): 31,193,142.790 2,281,462.346 3,087,828.124 36,562,433.260 3(viii). Approval of changes to the fundamental investment policies of Oppenheimer Growth & Income Fund on warrants, borrowing, investing in oil and gas exploration, investing in other investment companies and hedging. (Proposal No. 2): 7,029,838.247 410,269.718 504,078.630 7,944,186.595 3(ix). Approval of changes to the fundamental investment policies of Oppenheimer Global Securities Fund on warrants, borrowing, investing in oil and gas exploration, investing in other investment companies and hedging. (Proposal No. 2): 37,466,080.901 2,849,132.245 3,176,056.564 43,491,269.710 4. Approval of changes to certain in Oppenheimer Bond Fund's investment objective and fundamental investment policies. (Proposal No. 3): 34,444,138.694 2,098,267.244 3,180,342.705 29,722,748.643 5. Approval of amendments to the Trust's Declaration of Trust to permit each Fund to issue additional classes of shares. (Proposal No. 4): 309,886,066.129 18,994,944.838 24,404,133.189 353,285,144.156
130 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 Bruce L. Bartlett, Vice President Alan Gilston, Vice President John Kowalik, Vice President Michael S. Levine, Vice President David P. Negri, Vice President Jane Putnam, Vice President Thomas P. Reedy, Vice President Richard H. Rubinstein, Vice President Arthur P. Steinmetz, Vice President Jay W. Tracey, Vice President William L. Wilby, Vice President Arthur J. Zimmer, 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. The financial statements included herein have been taken from the records of the Funds without examination of the independent auditors. 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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