-----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, EjOL0lhParW6KVXBV14zc1uOOfpweuKeNwbbJ9lrhNP9/oNWfT1nzUKnnkfUVEpM I112yxbbP2ZAe/OMCaD2Lw== 0001086144-00-000009.txt : 20000307 0001086144-00-000009.hdr.sgml : 20000307 ACCESSION NUMBER: 0001086144-00-000009 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000302 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: 559830 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 MULTIPLE STRATEGIES FUND/VA Annual Report December 31, 1999 ================================================================================ Oppenheimer Multiple Strategies Fund/VA A Series of Oppenheimer Variable Account Funds [logo] OppenheimerFunds(R) The Right Way to Invest - -------------------------------------------------------------------------------- Oppenheimer Variable Account Funds--Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- ================================================================================ Objective Oppenheimer Multiple Strategies Fund/VA, 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 Overall, the Fund met its objective of providing total return consistent with preservation of principal during the fiscal year that ended December 31, 1999. The stock market continued its advance throughout 1999. But the market's rise was very deceiving. To a large extent, gains were mostly limited to a few very large growth companies and the technology sector. This "narrow" growth disguised the lackluster performance of many stocks. For a brief moment in the second quarter of 1999, investors began favoring economically sensitive, smaller capitalization, and more value-oriented stocks. This "broadening" of the market's rally was seen as very positive for the health of the stock market. With investors seeking a wider universe of stocks for their portfolios, more companies were able to benefit from the market's ascent. However, the "rally" of value stocks was short-lived. With the ongoing strength of the U.S. economy, there have been concerns over an increase in inflation. As a result, the Federal Reserve Board raised short-term interest rates three times this past year. Investors now appear preoccupied with the future direction of interest rates. With regard to the Fund, we continue to broadly diversify the portfolio among U.S. government, high yield corporate and foreign bonds in order to take advantage of different investment opportunities as they arise. This diversification strategy has worked well for the Fund, as we have been able to generate extra yield and temper risk. In the U.S. government market we have emphasized Treasuries, among high yield bonds our largest exposure was in the communications sector, and our foreign bonds were dominated by dollar-linked and selective emerging market debt. In recent months, we have used a portion of our cash position to increase our position in U.S. Treasuries. In doing so we were able to lock in the higher yields of a rising interest rate environment. Many of our technology stocks were strong performers over the last year. Two securities that have performed particularly well were IBM Corp. and Analog Devices, Inc. IBM Corp.'s strong sales have helped it surpass Wall Street's earnings expectations and generate very strong returns. Analog Devices, Inc. is one of a handful of companies that produce Digital Signal Processor, or DSP chips. These chips combine analog and digital chips in a single unit. Demand for the firm's products suffered during last year's economic crisis in Asia. But, just as many Asian economies have rebounded, so have Analog Devices, Inc.'s sales. With few competitors and high profit margins, demand for DSP chips has led to record revenues for Analog Devices, Inc. The Fund's investments in Argentinean Brady Bonds did not perform as we had expected. Brady Bonds are U.S.-dollar denominated foreign debt obligations, often collateralized by U.S. Treasury zero coupon obligations with the same maturity. We believed Argentina's vast resources could help it withstand their economic difficulties that occurred as a result of last year's Asian economic crisis. This did not prove to be the case. While the economy still exhibits significant strength, we expect to see slower growth as we move into the year 2000. This could occur for a variety of reasons. Consumer spending has been exceptionally strong for quite some time, and growing debt levels could make that difficult to sustain. In addition, with excess capacity in much of the world, demand for U.S. exports has fallen. While we don't anticipate a recession, we would expect to see growth rates in the United States fall modestly in the future. Given our outlook, we are satisfied with the Fund's current portfolio. We remain highly diversified, and believe that our disciplined investment approach will continue to serve our shareholders well. These are just two reasons why Oppenheimer Multiple Strategies Fund/VA is part of The Right Way to Invest. 2 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Oppenheimer Variable Account Funds--Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Management's discussion of performance. During the fiscal year that ended December 31, 1999, Oppenheimer Multiple Strategies Fund/VA produced positive returns. The Fund's investment in many value and technology stocks also enhanced performance. The Fund's diversification strategy among its bond holdings helped to generate incremental yield. In addition, the Fund used the rising interest rate environment as an opportunity to lock in higher yield through its increased exposure to U.S. Treasuries. However, economic troubles caused our holdings of Argentina's Brady Bonds to perform poorly. The Fund continued to meet its objective of providing total return consistent with preservation of principal for its shareholders. The Fund's portfolio holdings, allocation and strategies are subject to change. - -------------------------------------------------------------------------------- Comparing the Fund's performance to the market. The graph that follows shows the performance of a hypothetical $10,000 investment in the Fund held until December 31, 1999. Performance information does not reflect charges that apply to separate accounts investing in the Fund. If these charges were taken into account, performance would be lower. The graph assumes that all dividends and capital gains distributions were reinvested in additional shares. The Fund's performance is compared to the performance of the S&P 500 Index and the Lehman Brothers Aggregate Bond Index. The S&P 500 Index is a broad-based index of equity securities widely regarded as a general measurement of the performance of the U.S. equity securities market. The Lehman Brothers Aggregate Bond Index is a broad-based, unmanaged index of U.S. corporate bond issues, U.S. Government securities and mortgage-backed securities, widely recognized as a measure of the performance of the domestic debt securities market. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graph shows the effect of taxes. The Fund's performance reflects the effects of Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the indices. [Begin Line Chart] Comparison of Change in Value of $10,000 Hypothetical Investments in: OVAF/Oppenheimer Multiple Strategies Fund/VA, S&P 500 Index and Lehman Brothers Aggregate Bond Index
OVAF/Oppenheimer Multiple Strategies Fund/VA S&P 500 Index Lehman Brothers Aggregate Bond Index 12.31.89 10000 10000 10000 9809 9690 10896 12.31.91 11524 12635 12640 12560 13597 13575 12.31.93 14563 14966 14899 14279 15162 14464 12.31.95 17329 20851 17136 20013 25630 17759 12.31.97 23461 34176 19473 25022 43944 21165 12.31.99 27973 53181 20991
Average Annual Total Return of the Fund at 12/31/99 1-Year 11.80% 5-Year 14.40% 10-Year 10.83% [End Line Chart] Because the stock market can be volatile, the Fund's performance may be subject to substantial short-term changes. For updates on the Fund's performance, please call us at 1.800.981.2871. The performance information in the graph for both indices begins on 12/31/89. The inception date of the Fund is 2/9/87. Total returns include changes in net asset value per share and do not include the charges associated with the separate account products that offer this Fund. Such performance would have been lower if such charges were taken into account. Total returns and the ending account value in the graph show change in share value and include reinvestment of all dividends and capital gains distributions. Past performance is not predictive of future performance. Oppenheimer Multiple Strategies Fund/VA 3 - -------------------------------------------------------------------------------- Statement of Investments December 31, 1999 - --------------------------------------------------------------------------------
Market Value Shares Note 1 ========================================================================================================= Common Stocks--50.3% - --------------------------------------------------------------------------------------------------------- Basic Materials--1.8% - --------------------------------------------------------------------------------------------------------- Chemicals--0.8% Bayer AG, Sponsored ADR 34,000 $1,601,682 - --------------------------------------------------------------------------------------------------------- Du Pont (E.I.) De Nemours & Co.(1) 7,672 505,393 - --------------------------------------------------------------------------------------------------------- Potash Corp. of Saskatchewan, Inc. 29,500 1,421,531 - --------------------------------------------------------------------------------------------------------- Praxair, Inc.(1) 23,000 1,157,187 ---------- 4,685,793 - --------------------------------------------------------------------------------------------------------- Metals--0.3% De Beers Consolidated Mines Ltd., ADR 68,000 1,967,750 - --------------------------------------------------------------------------------------------------------- Paper--0.7% Pactiv Corp.(2) 50,000 531,250 - --------------------------------------------------------------------------------------------------------- Sonoco Products Co. 9,500 216,125 - --------------------------------------------------------------------------------------------------------- Wausau-Mosinee Paper Corp. 76,400 892,925 - --------------------------------------------------------------------------------------------------------- Weyerhaeuser Co. 36,647 2,631,713 ---------- 4,272,013 - --------------------------------------------------------------------------------------------------------- Capital Goods--1.5% - --------------------------------------------------------------------------------------------------------- Aerospace/Defense--0.4% Goodrich (B.F.) Co. 80,000 2,200,000 - --------------------------------------------------------------------------------------------------------- Industrial Services--0.1% Service Corp. International 125,000 867,187 - --------------------------------------------------------------------------------------------------------- Manufacturing--1.0% Hexcel Corp.(2) 140,000 778,750 - --------------------------------------------------------------------------------------------------------- Honeywell International, Inc. 19,687 1,135,694 - --------------------------------------------------------------------------------------------------------- Pall Corp. 115,000 2,479,687 - --------------------------------------------------------------------------------------------------------- Tyco International Ltd. 37,500 1,457,812 ---------- 5,851,943 - --------------------------------------------------------------------------------------------------------- Communication Services--1.8% - --------------------------------------------------------------------------------------------------------- Telecommunications: Long Distance--1.0% Intermedia Communications, Inc.(2) 3,812 147,953 - --------------------------------------------------------------------------------------------------------- Intermedia Communications, Inc.(2)(3) 201 6,241 - --------------------------------------------------------------------------------------------------------- MCI WorldCom, Inc.(2) 108,750 5,770,547 ---------- 5,924,741 - --------------------------------------------------------------------------------------------------------- Telephone Utilities--0.7% GTE Corp. 17,500 1,234,844 - --------------------------------------------------------------------------------------------------------- SBC Communications, Inc. 44,000 2,145,000 - --------------------------------------------------------------------------------------------------------- Tele Norte Leste Participacoes SA (Telemar) 26,250,000 472,253 - --------------------------------------------------------------------------------------------------------- Telesp Tele de Sao Paulo 19,200,000 265,813 ---------- 4,117,910 - --------------------------------------------------------------------------------------------------------- Telecommunications: Wireless--0.1% Telesp Celular Participacoes SA 49,150,000 465,245
4 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Market Value Shares Note 1 - --------------------------------------------------------------------------------------------------------- Consumer Cyclicals--7.0% - --------------------------------------------------------------------------------------------------------- Autos & Housing--1.7% Dana Corp. 75,000 $ 2,245,312 - --------------------------------------------------------------------------------------------------------- IRSA Inversiones y Representaciones SA 292,230 946,920 - --------------------------------------------------------------------------------------------------------- Lear Corp.(2) 55,000 1,760,000 - --------------------------------------------------------------------------------------------------------- Owens Corning 140,000 2,703,750 - --------------------------------------------------------------------------------------------------------- Southdown, Inc. 17,500 903,437 - --------------------------------------------------------------------------------------------------------- Toll Brothers, Inc.(2) 61,000 1,136,125 ----------- 9,695,544 - --------------------------------------------------------------------------------------------------------- Consumer Services--0.2% Alterra Healthcare Corp.(2) 115,000 955,937 - --------------------------------------------------------------------------------------------------------- Leisure & Entertainment--2.3% Berjaya Sports Toto Berhad 200,000 431,579 - --------------------------------------------------------------------------------------------------------- Brunswick Corp. 56,000 1,246,000 - --------------------------------------------------------------------------------------------------------- Callaway Golf Co. 140,000 2,476,250 - --------------------------------------------------------------------------------------------------------- Host Marriott Corp. 130,000 1,072,500 - --------------------------------------------------------------------------------------------------------- International Game Technology 192,500 3,910,156 - --------------------------------------------------------------------------------------------------------- Mattel, Inc. 115,000 1,509,378 - --------------------------------------------------------------------------------------------------------- Mirage Resorts, Inc.(2) 62,000 949,375 - --------------------------------------------------------------------------------------------------------- Shimano, Inc. 100,000 1,760,736 ----------- 13,355,974 - --------------------------------------------------------------------------------------------------------- Media--0.7% South China Morning Post Holdings Ltd. 1,694,000 1,460,063 - --------------------------------------------------------------------------------------------------------- Time Warner, Inc.(1) 32,000 2,318,000 ----------- 3,778,063 - --------------------------------------------------------------------------------------------------------- Retail: General--0.8% Federated Department Stores, Inc.(2) 42,500 2,148,906 - --------------------------------------------------------------------------------------------------------- Neiman Marcus Group, Inc. (The), Cl. A(2) 40,000 1,117,500 - --------------------------------------------------------------------------------------------------------- Saks, Inc.(2) 93,000 1,447,312 ----------- 4,713,718 - --------------------------------------------------------------------------------------------------------- Retail: Specialty--0.7% - --------------------------------------------------------------------------------------------------------- Abercrombie & Fitch Co., Cl. A(2) 35,000 934,063 - --------------------------------------------------------------------------------------------------------- AutoZone, Inc.(2) 43,000 1,389,438 - --------------------------------------------------------------------------------------------------------- Borders Group, Inc.(2) 70,000 1,124,375 - --------------------------------------------------------------------------------------------------------- Gap, Inc.(1) 14,500 667,000 ----------- 4,114,876 - --------------------------------------------------------------------------------------------------------- Textile/Apparel & Home Furnishings--0.6% Jones Apparel Group, Inc.(2) 77,000 2,088,625 - --------------------------------------------------------------------------------------------------------- Tommy Hilfiger Corp.(2) 48,500 1,130,656 ----------- 3,219,281 - --------------------------------------------------------------------------------------------------------- Consumer Staples--4.8% - --------------------------------------------------------------------------------------------------------- Beverages--0.3% Coca-Cola Enterprises, Inc. 41,800 841,225 - --------------------------------------------------------------------------------------------------------- Diageo plc 125,800 1,012,086 ----------- 1,853,311
Oppenheimer Multiple Strategies Fund/VA 5 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Market Value Shares Note 1 - --------------------------------------------------------------------------------------------------------- Broadcasting--1.8% CBS Corp.(1)(2) 110,000 $ 7,033,125 - --------------------------------------------------------------------------------------------------------- MediaOne Group, Inc.(1)(2) 35,000 2,688,438 - --------------------------------------------------------------------------------------------------------- RCN Corp.(2) 12,500 606,250 ----------- 10,327,813 - --------------------------------------------------------------------------------------------------------- Entertainment--0.9% Brinker International, Inc.(2) 35,000 840,000 - --------------------------------------------------------------------------------------------------------- Disney (Walt) Co. 32,500 950,625 - --------------------------------------------------------------------------------------------------------- Luby's, Inc. 90,000 1,023,750 - --------------------------------------------------------------------------------------------------------- Nintendo Co. Ltd. 14,400 2,391,783 ----------- 5,206,158 - --------------------------------------------------------------------------------------------------------- Food--0.4% Groupe Danone 7,500 1,766,231 - --------------------------------------------------------------------------------------------------------- Nestle SA, Sponsored ADR 6,000 546,688 ----------- 2,312,919 - --------------------------------------------------------------------------------------------------------- Food & Drug Retailers--0.1% Cia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR 14,000 452,375 - --------------------------------------------------------------------------------------------------------- Household Goods--0.9% - --------------------------------------------------------------------------------------------------------- Avon Products, Inc.(1) 45,000 1,485,000 - --------------------------------------------------------------------------------------------------------- Fort James Corp. 45,000 1,231,875 - --------------------------------------------------------------------------------------------------------- Rexall Sundown, Inc.(2) 125,000 1,289,063 - --------------------------------------------------------------------------------------------------------- Wella AG 55,900 1,147,658 - --------------------------------------------------------------------------------------------------------- Wella AG, Preference 5,200 114,085 ----------- 5,267,681 - --------------------------------------------------------------------------------------------------------- Tobacco--0.4% Philip Morris Cos., Inc. 100,000 2,318,750 - --------------------------------------------------------------------------------------------------------- Energy--3.1% - --------------------------------------------------------------------------------------------------------- Energy Services--1.0% Input/Output, Inc.(2) 193,000 977,063 - --------------------------------------------------------------------------------------------------------- Santa Fe International Corp. 87,000 2,251,125 - --------------------------------------------------------------------------------------------------------- Schlumberger Ltd. 22,500 1,265,625 - --------------------------------------------------------------------------------------------------------- Transocean Sedco Forex, Inc. 43,356 1,460,555 ----------- 5,954,368 - --------------------------------------------------------------------------------------------------------- Oil: Domestic--1.3% Comstock Resources, Inc.(2) 175,000 492,188 - --------------------------------------------------------------------------------------------------------- Conoco, Inc., Cl. B 24,567 611,104 - --------------------------------------------------------------------------------------------------------- Exxon Mobil Corp. 28,501 2,296,112 - --------------------------------------------------------------------------------------------------------- Kerr-McGee Corp. 35,000 2,170,000 - --------------------------------------------------------------------------------------------------------- Unocal Corp. 65,000 2,181,563 ----------- 7,750,967 - --------------------------------------------------------------------------------------------------------- Oil: International--0.8% Petroleo Brasileiro SA, Preference 3,330,000 847,938 - --------------------------------------------------------------------------------------------------------- Talisman Energy, Inc.(2) 105,510 2,690,057 - --------------------------------------------------------------------------------------------------------- Total Fina SA, Sponsored ADR 16,000 1,108,000 ----------- 4,645,995
6 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Market Value Shares Note 1 - --------------------------------------------------------------------------------------------------------- Financial--9.7% - --------------------------------------------------------------------------------------------------------- Banks--5.7% ABN Amro Holding NV 62,700 $ 1,564,911 - --------------------------------------------------------------------------------------------------------- Banco Frances del Rio de la Plata SA 95,000 750,575 - --------------------------------------------------------------------------------------------------------- Bank of America Corp.(1) 160,000 8,030,000 - --------------------------------------------------------------------------------------------------------- Bank One Corp. 50,000 1,603,125 - --------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. 133,000 10,332,438 - --------------------------------------------------------------------------------------------------------- Societe Generale 20,000 4,649,567 - --------------------------------------------------------------------------------------------------------- UBS AG 4,175 1,128,875 - --------------------------------------------------------------------------------------------------------- UniCredito Italiano SpA 414,000 2,033,249 - --------------------------------------------------------------------------------------------------------- Wells Fargo Co. 70,000 2,830,625 ----------- 32,923,365 - --------------------------------------------------------------------------------------------------------- Diversified Financial--0.9% Finova Group, Inc. 26,000 923,000 - --------------------------------------------------------------------------------------------------------- ICICI Ltd., Sponsored ADR(2) 35,500 523,625 - --------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc. 16,000 1,336,000 - --------------------------------------------------------------------------------------------------------- Morgan Stanley Dean Witter & Co. 12,500 1,784,375 - --------------------------------------------------------------------------------------------------------- Simon Property Group, Inc. 37,500 860,156 ----------- 5,427,156 - --------------------------------------------------------------------------------------------------------- Insurance--1.0% ACE Ltd. 140,000 2,336,250 - --------------------------------------------------------------------------------------------------------- Skandia Forsakrings AB 115,000 3,472,769 ----------- 5,809,019 - --------------------------------------------------------------------------------------------------------- Real Estate Investment Trusts--2.1% Archstone Communities Trust 52,000 1,066,000 - --------------------------------------------------------------------------------------------------------- Avalonbay Communities, Inc. 30,732 1,054,492 - --------------------------------------------------------------------------------------------------------- Brandywine Realty Trust 56,000 917,000 - --------------------------------------------------------------------------------------------------------- Camden Property Trust 40,000 1,095,000 - --------------------------------------------------------------------------------------------------------- CarrAmerica Realty Corp. 48,000 1,014,000 - --------------------------------------------------------------------------------------------------------- Chastain Capital Corp.(2) 134,000 58,625 - --------------------------------------------------------------------------------------------------------- Chelsea GCA Realty, Inc. 32,000 952,000 - --------------------------------------------------------------------------------------------------------- Cornerstone Properties, Inc. 68,000 994,500 - --------------------------------------------------------------------------------------------------------- Developers Diversified Realty Corp. 62,000 798,250 - --------------------------------------------------------------------------------------------------------- JDN Realty Corp. 60,000 967,500 - --------------------------------------------------------------------------------------------------------- Manufactured Home Communities, Inc. 44,000 1,069,750 - --------------------------------------------------------------------------------------------------------- Post Properties, Inc. 28,000 1,071,000 - --------------------------------------------------------------------------------------------------------- Shurgard Storage Centers, Inc. 44,000 1,020,250 ----------- 12,078,367
Oppenheimer Multiple Strategies Fund/VA 7 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Market Value Shares Note 1 - --------------------------------------------------------------------------------------------------------- Healthcare--4.7% - --------------------------------------------------------------------------------------------------------- Healthcare/Drugs--3.4% Abbott Laboratories 38,000 $ 1,379,875 - --------------------------------------------------------------------------------------------------------- American Home Products Corp. 48,500 1,912,719 - --------------------------------------------------------------------------------------------------------- AstraZeneca Group plc 60,540 2,560,884 - --------------------------------------------------------------------------------------------------------- Elan Corp. plc, ADR(2) 32,000 944,000 - --------------------------------------------------------------------------------------------------------- Johnson & Johnson(1) 33,867 3,153,864 - --------------------------------------------------------------------------------------------------------- Merck & Co., Inc. 30,000 2,011,875 - --------------------------------------------------------------------------------------------------------- Mylan Laboratories, Inc. 110,000 2,770,625 - --------------------------------------------------------------------------------------------------------- Novartis AG 1,700 2,499,277 - --------------------------------------------------------------------------------------------------------- Pliva d.d., Sponsored GDR(4) 20,000 261,000 - --------------------------------------------------------------------------------------------------------- SmithKline Beecham plc, Cl. A, Sponsored ADR 30,000 1,933,125 ----------- 19,427,244 - --------------------------------------------------------------------------------------------------------- Healthcare/Supplies & Services--1.3% Acuson Corp.(2) 180,000 2,261,250 - --------------------------------------------------------------------------------------------------------- Innovasive Devices, Inc.(2) 110,000 880,000 - --------------------------------------------------------------------------------------------------------- Manor Care, Inc.(2) 75,000 1,200,000 - --------------------------------------------------------------------------------------------------------- McKesson HBOC, Inc. 20,000 451,250 - --------------------------------------------------------------------------------------------------------- St. Jude Medical, Inc.(2) 30,000 920,625 - --------------------------------------------------------------------------------------------------------- United Healthcare Corp. 32,800 1,742,500 ----------- 7,455,625 - --------------------------------------------------------------------------------------------------------- Technology--14.5% - --------------------------------------------------------------------------------------------------------- Computer Hardware--2.8% Canon, Inc. 50,000 1,985,718 - --------------------------------------------------------------------------------------------------------- Hewlett-Packard Co.(1) 10,000 1,139,375 - --------------------------------------------------------------------------------------------------------- International Business Machines Corp.(1) 120,000 12,960,000 ----------- 16,085,093 - --------------------------------------------------------------------------------------------------------- Computer Services--0.1% barnesandnoble.com, inc.(2) 36,100 512,169 - --------------------------------------------------------------------------------------------------------- Computer Software--2.4% Computer Associates International, Inc.(1) 48,599 3,398,928 - --------------------------------------------------------------------------------------------------------- Compuware Corp.(1)(2) 49,100 1,828,975 - --------------------------------------------------------------------------------------------------------- Novell, Inc.(2) 126,000 5,032,125 - --------------------------------------------------------------------------------------------------------- Oracle Corp.(1)(2) 12,500 1,400,781 - --------------------------------------------------------------------------------------------------------- Rational Software Corp.(1)(2) 7,700 378,263 - --------------------------------------------------------------------------------------------------------- Sabre Holdings Corp.(2) 34,500 1,768,125 - --------------------------------------------------------------------------------------------------------- Structural Dynamics Research Corp.(2) 167 2,129 ----------- 13,809,326 - --------------------------------------------------------------------------------------------------------- Communications Equipment--1.7% Cisco Systems, Inc.(1)(2) 41,000 4,392,125 - --------------------------------------------------------------------------------------------------------- Optical Coating Laboratory, Inc.(1) 18,000 5,328,000 ----------- 9,720,125
8 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Market Value Shares Note 1 - --------------------------------------------------------------------------------------------------------- Electronics--6.9% Analog Devices, Inc.(1)(2) 67,200 $ 6,249,600 - --------------------------------------------------------------------------------------------------------- ASM Lithography Holding NV 13,400 1,524,250 - --------------------------------------------------------------------------------------------------------- Cognex Corp.(2) 50,000 1,950,000 - --------------------------------------------------------------------------------------------------------- Coherent, Inc.(1)(2) 70,000 1,872,500 - --------------------------------------------------------------------------------------------------------- General Motors Corp., Cl. H(1)(2) 30,200 2,899,200 - --------------------------------------------------------------------------------------------------------- Grainger (W.W.), Inc. 21,000 1,004,063 - --------------------------------------------------------------------------------------------------------- Intel Corp. 156,000 12,840,750 - --------------------------------------------------------------------------------------------------------- Keyence Corp. 8,000 3,247,579 - --------------------------------------------------------------------------------------------------------- Methode Electronics, Inc., Cl. A(1) 104,000 3,341,000 - --------------------------------------------------------------------------------------------------------- STMicroelectronics NV, NY Registered Shares(1) 22,400 3,392,200 - --------------------------------------------------------------------------------------------------------- Teradyne, Inc.(1)(2) 28,000 1,848,000 ------------ 40,169,142 - --------------------------------------------------------------------------------------------------------- Photography--0.6% Eastman Kodak Co. 26,500 1,755,625 - --------------------------------------------------------------------------------------------------------- Xerox Corp.(1) 67,500 1,531,406 ------------ 3,287,031 - --------------------------------------------------------------------------------------------------------- Transportation--0.5% - --------------------------------------------------------------------------------------------------------- Air Transportation--0.2% Alaska Air Group, Inc.(2) 29,500 1,036,188 - --------------------------------------------------------------------------------------------------------- Railroads & Truckers--0.3% Burlington Northern Santa Fe Corp. 67,000 1,624,750 - --------------------------------------------------------------------------------------------------------- Shipping--0.0% Stolt-Nielsen SA 20,000 285,000 - --------------------------------------------------------------------------------------------------------- Utilities--0.9% - --------------------------------------------------------------------------------------------------------- Electric Utilities--0.9% Allegheny Energy, Inc. 50,500 1,360,344 - --------------------------------------------------------------------------------------------------------- Reliant Energy, Inc. 80,000 1,830,000 - --------------------------------------------------------------------------------------------------------- Southern Co. 90,000 2,115,000 ------------ 5,305,344 ------------ Total Common Stocks (Cost $201,240,567) 291,231,256 ========================================================================================================= Preferred Stocks--0.6% - --------------------------------------------------------------------------------------------------------- ICG Communications, Inc., 6.75% Cum. Cv., Non-Vtg. 45,000 2,041,875 - --------------------------------------------------------------------------------------------------------- Intermedia Communications, Inc., 7% Cv.(4) 5,000 134,375 - --------------------------------------------------------------------------------------------------------- Intermedia Communications, Inc., Depositary Shares Representing one one-hundredth 7% Cum. Cv. Jr., Series D, Non-Vtg. 30,000 1,522,500 ------------ Total Preferred Stocks (Cost $4,472,031) 3,698,750 ========================================================================================================= Other Securities--1.0% - --------------------------------------------------------------------------------------------------------- Budget Group, Inc., 6.25% Cum. Cv. Term Income Deferred Equity Securities, Non-Vtg.(4) 20,000 615,000 - --------------------------------------------------------------------------------------------------------- Monsanto Co., 6.50% Cv. Adjustable Conversion-rate Equity Security 35,000 1,159,375 - --------------------------------------------------------------------------------------------------------- Qwest Trends Trust, 5.75% Cv.(4) 55,000 3,884,375 ------------ Total Other Securities (Cost $5,245,203) 5,658,750
Oppenheimer Multiple Strategies Fund/VA 9 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Market Value Shares Note 1 ========================================================================================================= Rights, Warrants and Certificates--0.0% - --------------------------------------------------------------------------------------------------------- Covergent Communications, Inc. Wts., Exp. 4/1/08 1,000 $ 12,250 - --------------------------------------------------------------------------------------------------------- Gaylord Container Corp. Wts., Exp. 11/1/02 9,232 60,008 - --------------------------------------------------------------------------------------------------------- HF Holdings, Inc. Wts., Exp. 9/27/00(3) 2,592 38,888 - --------------------------------------------------------------------------------------------------------- PE Corp. Cl. G Wts., Exp. 9/11/03 249 12,699 - --------------------------------------------------------------------------------------------------------- Terex Corp. Rts., Exp. 5/15/02(3) 4,000 56,500 ----------- Total Rights, Warrants and Certificates (Cost $59,660) 180,345 Principal Amount(5) ========================================================================================================= Mortgage-Backed Obligations--2.0% - --------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Multiclass Mtg. Participation Certificates, 7%, 5/1/29 $ 4,769,214 4,615,694 - --------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., 6.50%, 11/1/27-12/1/27 4,205,093 3,971,206 - --------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., 8%, 7/15/22-4/15/23 2,084,740 2,112,922 - --------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates, Series 1994-C2, Cl. E, 8%, 4/25/25 635,799 620,104 ----------- Total Mortgage-Backed Obligations (Cost $11,602,003) 11,319,926 ========================================================================================================= U.S. Government Obligations--11.7% - --------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds: 8.875%, 8/15/17 2,900,000 3,505,375 STRIPS, 6.30%, 8/15/25(6) 12,900,000 2,438,332 STRIPS, 6.53%, 8/15/15(6) 7,100,000 2,450,210 STRIPS, 7.10%, 11/15/18(6) 16,000,000 4,449,696 STRIPS, 7.26%, 11/15/18(6) 10,000,000 2,786,070 STRIPS, 7.31%, 8/15/19(6) 18,000,000 4,766,058 - --------------------------------------------------------------------------------------------------------- U.S. Treasury Nts.: 5.875%, 9/30/02 15,000,000 14,845,320 6.125%, 9/30/00 15,000,000 15,018,750 6.25%, 2/15/07 8,800,000 8,662,500 6.375%, 8/15/02 5,000,000 5,010,940 6.50%, 10/15/06 3,710,000 3,700,725 ----------- Total U.S. Government Obligations (Cost $68,185,746) 67,633,976 ========================================================================================================= Foreign Government Obligations--23.7% - --------------------------------------------------------------------------------------------------------- Argentina--6.4% Argentina (Republic of) Bonds: Series BT06, 11.25%, 5/24/04 1,178,000 1,169,165 Series L, 6.812%, 3/31/05(7) 8,096,000 7,387,600 - --------------------------------------------------------------------------------------------------------- Argentina (Republic of) Nts., 14.25%, 11/30/02(7) 13,125,000 12,993,750 - --------------------------------------------------------------------------------------------------------- Argentina (Republic of) Par Bonds, 6%, 3/31/23(7) 23,750,000 15,645,312 ----------- 37,195,827 - --------------------------------------------------------------------------------------------------------- Australia--0.6% New South Wales Treasury Corp. Gtd. Bonds, 7%, 4/1/04AUD 3,160,000 2,076,929 - --------------------------------------------------------------------------------------------------------- Queensland Treasury Corp. Exchangeable Gtd. Nts., 10.50%, 5/15/03AUD 1,800,000 1,313,947 ----------- 3,390,876
10 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Principal Market Value Amount(5) Note 1 - --------------------------------------------------------------------------------------------------------- Brazil--5.2% Brazil (Federal Republic of) Capitalization Bonds, 6.916%, 4/15/14 $21,716,459 $ 16,368,781 - --------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Eligible Interest Bonds, 6.937%, 4/15/06(7) 15,463,000 13,646,097 ------------ 30,014,878 - --------------------------------------------------------------------------------------------------------- Canada--2.9% Canada (Government of) Bonds: 8.50%, 4/1/02CAD 1,500,000 1,090,721 8.75%, 12/1/05CAD 12,200,000 9,469,183 9.75%, 12/1/01-6/1/01CAD 5,000,000 3,672,397 Series WL43, 5.75%, 6/1/29CAD 3,670,000 2,389,240 ------------ 16,621,541 - --------------------------------------------------------------------------------------------------------- Denmark--0.9% Denmark (Kingdom of) Bonds, 8%, 3/15/06DKK 32,100,000 4,905,143 - --------------------------------------------------------------------------------------------------------- Great Britain--1.2% United Kingdom Treasury Bonds, 6.75%, 11/26/04GBP 2,680,000 4,446,440 - --------------------------------------------------------------------------------------------------------- United Kingdom Treasury Nts., 13%, 7/14/00GBP 1,590,000 2,662,916 ------------ 7,109,356 - --------------------------------------------------------------------------------------------------------- Ireland--0.3% Ireland (Government of) Bonds, 9.25%, 7/11/03(3)EUR 1,409,409 1,628,357 - --------------------------------------------------------------------------------------------------------- Mexico--0.6% United Mexican States Collateralized Fixed Rate Par Bonds, Series W-A, 6.25%, 12/31/19 4,450,000 3,515,500 - --------------------------------------------------------------------------------------------------------- New Zealand--5.1% New Zealand (Government of) Bonds: 8%, 2/15/01NZD 19,440,000 10,391,131 10%, 3/15/02NZD 16,800,000 9,395,771 - --------------------------------------------------------------------------------------------------------- New Zealand (Government of) Nts., 6.50%, 2/15/00NZD 18,600,000 9,753,559 ------------ 29,540,461 - --------------------------------------------------------------------------------------------------------- Philippines--0.2% Philippines (Republic of) Bonds, 8.60%, 6/15/27 1,500,000 1,267,994 - --------------------------------------------------------------------------------------------------------- South Africa--0.3% Eskom Depositary Receipts, Series E168, 11%, 6/1/08ZAR 12,570,000 1,734,295 ------------ Total Foreign Government Obligations (Cost $137,782,080) 136,924,228 ========================================================================================================= Non-Convertible Corporate Bonds and Notes--6.7% - --------------------------------------------------------------------------------------------------------- Basic Materials--1.3% - --------------------------------------------------------------------------------------------------------- Chemicals--0.5% Huntsman Corp./ICI Chemical Co. plc, Zero Coupon Sr. Disc. Nts., 13.08%, 12/31/09(4)(6) 1,000,000 306,250 - --------------------------------------------------------------------------------------------------------- Lyondell Chemical Co., 10.875% Sr. Sub. Nts., 5/1/09 500,000 517,500 - --------------------------------------------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 85,000 88,400 - --------------------------------------------------------------------------------------------------------- Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 500,000 487,500 - --------------------------------------------------------------------------------------------------------- Sterling Chemicals, Inc.: 11.75% Sr. Unsec. Sub. Nts., 8/15/06 535,000 403,925 12.375% Sr. Sec. Nts., Series B, 7/15/06 250,000 260,000 - --------------------------------------------------------------------------------------------------------- ZSC Specialty Chemical plc, 11% Sr. Nts., 7/1/09(4) 500,000 521,250 ------------ 2,584,825
Oppenheimer Multiple Strategies Fund/VA 11 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Principal Market Value Amount(5) Note 1 - --------------------------------------------------------------------------------------------------------- Metals--0.4% AK Steel Corp., 9.125% Sr. Nts., 12/15/06 $1,015,000 $1,037,837 - --------------------------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 1,000,000 1,005,000 - --------------------------------------------------------------------------------------------------------- Metallurg, Inc., 11% Sr. Nts., 12/1/07 450,000 407,250 ---------- 2,450,087 - --------------------------------------------------------------------------------------------------------- Paper--0.4% Aracruz Celulose SA, 10.375% Debs., 1/31/02(4) 430,000 431,075 - --------------------------------------------------------------------------------------------------------- Repap New Brunswick, Inc., 10.625% Second Priority Sr. Sec. Nts., 300,000 280,500 - --------------------------------------------------------------------------------------------------------- Riverwood International Corp.: 10.625% Sr. Unsec. Nts., 8/1/07 500,000 517,500 10.875% Sr. Sub. Nts., 4/1/08 250,000 247,500 - --------------------------------------------------------------------------------------------------------- SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 750,000 785,625 ---------- 2,262,200 - --------------------------------------------------------------------------------------------------------- Capital Goods--0.4% - --------------------------------------------------------------------------------------------------------- Aerospace/Defense--0.1% Amtran, Inc., 10.50% Sr. Nts., 8/1/04 500,000 502,500 - --------------------------------------------------------------------------------------------------------- Industrial Services--0.1% Allied Waste North America, Inc., 10% Sr. Sub. Nts., 8/1/09(4) 750,000 675,000 - --------------------------------------------------------------------------------------------------------- Manufacturing--0.2% Blount, Inc., 13% Sr. Sub. Nts., 8/1/09(4) 700,000 742,000 - --------------------------------------------------------------------------------------------------------- International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 500,000 518,750 ---------- 1,260,750 - --------------------------------------------------------------------------------------------------------- Communication Services--2.1% - --------------------------------------------------------------------------------------------------------- Telecommunications: Long Distance--1.3% Exodus Communications, Inc., 11.25% Sr. Nts., 7/1/08 500,000 518,750 - --------------------------------------------------------------------------------------------------------- Global Crossing Ltd., 9.625% Sr. Nts., 5/15/08 750,000 753,750 - --------------------------------------------------------------------------------------------------------- Intermedia Communications, Inc., 8.50% Sr. Nts., Series B, 1/15/08 500,000 460,000 - --------------------------------------------------------------------------------------------------------- Metromedia Fiber Network, Inc.: 10% Sr. Nts., 12/15/09 250,000 257,500 10% Sr. Unsec. Nts., Series B, 11/15/08 750,000 770,625 - --------------------------------------------------------------------------------------------------------- NTL Communications Corp., 0%/12.375% Sr. Unsec. Nts., Series B, 10/1/08(8) 500,000 356,250 - --------------------------------------------------------------------------------------------------------- NTL, Inc., 0%/9.75% Sr. Deferred Coupon Nts., Series B, 4/1/08(8) 500,000 347,500 - --------------------------------------------------------------------------------------------------------- PSINet, Inc., 10% Sr. Unsec. Nts., Series B, 2/15/05 1,000,000 993,750 - --------------------------------------------------------------------------------------------------------- Telewest Communications plc: 0%/11% Sr. Disc. Debs., 10/1/07(8) 1,000,000 937,500 9.625% Sr. Debs., 10/1/06 500,000 507,500 - --------------------------------------------------------------------------------------------------------- United Pan-Europe Communications NV, 10.875% Sr. Nts., 8/1/09 400,000 407,000 - --------------------------------------------------------------------------------------------------------- Verio, Inc., 11.25% Sr. Unsec. Nts., 12/1/08 600,000 633,000 - --------------------------------------------------------------------------------------------------------- Worldwide Fiber, Inc., 12% Sr. Nts., 8/1/09(4) 400,000 414,000 ---------- 7,357,125 - --------------------------------------------------------------------------------------------------------- Telecommunications: Wireless--0.8% Loral Space & Communications Ltd., 9.50% Sr. Nts., 1/15/06 200,000 181,000 - --------------------------------------------------------------------------------------------------------- Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(8) 750,000 603,750 - --------------------------------------------------------------------------------------------------------- Omnipoint Corp.: 11.50% Sr. Nts., 9/15/09(4) 250,000 270,000 11.625% Sr. Nts., 8/15/06 535,000 569,775 11.625% Sr. Nts., Series A, 8/15/06 590,000 628,350
12 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Principal Market Value Amount(5) Note 1 - --------------------------------------------------------------------------------------------------------- Telecommunications: Wireless (continued) ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 $ 200,000 $ 145,000 - --------------------------------------------------------------------------------------------------------- Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 750,000 770,625 - --------------------------------------------------------------------------------------------------------- USA Mobile Communications, Inc. II, 9.50% Sr. Nts., 2/1/04 1,000,000 821,250 - --------------------------------------------------------------------------------------------------------- Voicestream Wireless Corp., 10.375% Sr. Nts., 11/15/09(4) 400,000 414,000 ---------- 4,403,750 - --------------------------------------------------------------------------------------------------------- Consumer Cyclicals--0.8% - --------------------------------------------------------------------------------------------------------- Autos & Housing--0.4% Building Materials Corp. of America, 8.625% Sr. Nts., Series B, 12/15/06 100,000 95,500 - --------------------------------------------------------------------------------------------------------- Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., Series B, 7/15/07 300,000 117,750 - --------------------------------------------------------------------------------------------------------- Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 500,000 525,000 - --------------------------------------------------------------------------------------------------------- Icon Health & Fitness, Inc., 12% Unsec. Nts., 7/15/05(3) 270,840 148,962 - --------------------------------------------------------------------------------------------------------- Kaufman & Broad Home Corp., 7.75% Sr. Nts., 10/15/04 400,000 378,000 - --------------------------------------------------------------------------------------------------------- Nortek, Inc., 8.875% Sr. Unsec. Nts., Series B, 8/1/08 750,000 716,250 - --------------------------------------------------------------------------------------------------------- Tenneco, Inc., 11.625% Sr. Sub. Nts., 10/15/09(4) 400,000 410,000 ---------- 2,391,462 - --------------------------------------------------------------------------------------------------------- Leisure & Entertainment--0.2% Hard Rock Hotel, Inc., 9.25% Sr. Sub. Nts., 4/1/05 250,000 178,750 - --------------------------------------------------------------------------------------------------------- Meristar Hospitality Corp., 8.75% Sr. Unsec. Sub. Nts., 8/15/07 500,000 462,500 - --------------------------------------------------------------------------------------------------------- Premier Parks, Inc., 9.75% Sr. Nts., 6/15/07 500,000 500,000 ---------- 1,141,250 - --------------------------------------------------------------------------------------------------------- Media--0.2% Lamar Media Corp., 9.625% Sr. Unsec. Sub. Nts., 12/1/06 150,000 153,750 - --------------------------------------------------------------------------------------------------------- Time Warner Entertainment Co. LP, 10.15% Sr. Nts., 5/1/12 500,000 589,339 - --------------------------------------------------------------------------------------------------------- Time Warner, Inc., 9.125% Debs., 1/15/13 500,000 549,601 ---------- 1,292,690 Consumer Staples--1.4% - --------------------------------------------------------------------------------------------------------- Beverages--0.1% Canadaiqua Brands, Inc., 8.625% Sr. Unsec. Nts., 8/1/06 700,000 700,875 - --------------------------------------------------------------------------------------------------------- Broadcasting--1.1% Aldelphia Communications Corp., 9.375% Sr. Nts., 11/15/09 750,000 738,750 - --------------------------------------------------------------------------------------------------------- Chancellor Media Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 6/15/07 1,000,000 1,012,500 - --------------------------------------------------------------------------------------------------------- Charter Communication Holdings LLC/Charter Communication Holdings Capital Corp., 8.625% Sr. Unsec. Nts., 4/1/09 750,000 696,563 - --------------------------------------------------------------------------------------------------------- CSC Holdings, Inc., 9.875% Sr. Sub. Nts., 5/15/06 250,000 265,000 - --------------------------------------------------------------------------------------------------------- EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09 700,000 707,000 - --------------------------------------------------------------------------------------------------------- Falcon Holding Group LP, 0%/9.285% Sr. Disc. Debs., Series B, 4/15/10(8) 600,000 452,250 - --------------------------------------------------------------------------------------------------------- Rogers Cablesystems Ltd., 10% Second Priority Sr. Sec. Debs., 12/1/07 1,000,000 1,071,250 - --------------------------------------------------------------------------------------------------------- Sinclair Broadcast Group, Inc.: 8.75% Sr. Sub. Nts., 12/15/07 500,000 463,750 9% Sr. Unsec. Sub. Nts., 7/15/07 375,000 353,438 - --------------------------------------------------------------------------------------------------------- Young Broadcasting, Inc., 8.75% Sr. Sub. Debs., 6/15/07 900,000 857,250 ---------- 6,617,751
Oppenheimer Multiple Strategies Fund/VA 13 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Principal Market Value Amount(5) Note 1 - --------------------------------------------------------------------------------------------------------- Food & Drug Retailers--0.1% Fleming Cos., Inc.: 10.50% Sr. Sub. Nts., Series B, 12/1/04 $ 300,000 $ 276,750 10.625% Sr. Sub. Nts., Series B, 7/31/07 560,000 508,200 ------------ 784,950 - --------------------------------------------------------------------------------------------------------- Household Goods--0.1% Revlon Consumer Products Corp.: 8.625% Sr. Unsec. Sub. Nts., 2/1/08 400,000 202,000 9% Sr. Nts., 11/1/06 70,000 52,850 ------------ 254,850 - --------------------------------------------------------------------------------------------------------- Energy--0.1% - --------------------------------------------------------------------------------------------------------- Energy Services--0.1% Gothic Production Corp., 11.125% Sr. Sec. Nts., Series B, 5/1/05(4) 950,000 812,250 - --------------------------------------------------------------------------------------------------------- Financial--0.1% - --------------------------------------------------------------------------------------------------------- Banks--0.1% First Chicago Corp., 11.25% Sub. Nts., 2/20/01 250,000 261,387 - --------------------------------------------------------------------------------------------------------- Healthcare--0.0% - --------------------------------------------------------------------------------------------------------- Healthcare/Supplies & Services--0.0% Sun Healthcare Group, Inc., 9.375% Sr. Sub. Nts., 5/1/08(2)(4)(9) 1,000,000 65,000 - --------------------------------------------------------------------------------------------------------- Transportation--0.1% - --------------------------------------------------------------------------------------------------------- Air Transportation--0.1% Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 1,000,000 648,750 - --------------------------------------------------------------------------------------------------------- Shipping--0.0% Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07(4) 500,000 232,500 - --------------------------------------------------------------------------------------------------------- Utilities--0.4% - --------------------------------------------------------------------------------------------------------- Electric Utilities--0.2% Calpine Corp.: 8.75% Sr. Nts., 7/15/07 400,000 403,000 10.50% Sr. Nts., 5/15/06 800,000 848,000 ------------ 1,251,000 - --------------------------------------------------------------------------------------------------------- Gas Utilities--0.2% Beaver Valley II Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17 989,000 987,764 ------------ Total Non-Convertible Corporate Bonds and Notes (Cost $41,563,563) 38,938,716 ========================================================================================================= Repurchase Agreements--3.5% - --------------------------------------------------------------------------------------------------------- Repurchase agreement with Banc One Capital Markets, Inc., 2.75%, dated 12/31/99, to be repurchased at $20,504,698 on 1/3/00, collateralized by U.S. Treasury Bonds, 5.25%-12%, 2/15/01-11/15/28, with a value of $8,046,039 and U.S. Treasury Nts., 5%-7.50%, 12/31/00-2/15/07, with a value of $12,875,859 (Cost $20,500,000) 20,500,000 20,500,000 - --------------------------------------------------------------------------------------------------------- Total Investments, at Value (Cost $490,650,853) 99.5% 576,085,947 - --------------------------------------------------------------------------------------------------------- Other Assets Net of Liabilities 0.5 2,696,887 ----------- ------------ Net Assets 100.0% $578,782,834 =========== ============
14 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------------ 1. A sufficient amount of liquid assets has been designated to cover outstanding written call options, as follows:
Shares Expiration Exercise Premium Market Value Subject to Call Date Price Received Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Analog Devices, Inc. 6,700 6/19/00 $ 95.00 $ 41,670 $ 102,175 Avon Products, Inc. 10,000 7/24/00 40.00 43,450 26,875 Bank of America Corp. 22,000 1/24/00 90.00 59,838 -- CBS Corp. 33,000 1/24/00 55.00 93,885 305,250 Cisco Systems, Inc. 6,000 1/24/00 67.50 38,819 237,750 Cisco Systems, Inc. 5,000 4/24/00 70.00 40,474 195,000 Coherent, Inc. 4,000 5/22/00 35.00 8,380 4,500 Computer Associates International, Inc. 10,000 1/24/00 65.00 37,199 62,500 Computer Associates International, Inc. 6,000 5/22/00 75.00 44,820 42,750 Compuware Corp. 8,000 1/24/00 35.00 40,759 34,000 Du Pont (E.I.) De Nemours & Co. 7,000 1/24/00 75.00 41,789 1,750 Gap, Inc. 14,500 6/19/00 60.00 28,564 33,531 General Motors Corp., Cl. H 4,500 3/20/00 95.00 29,115 41,625 Hewlett-Packard Co. 10,000 2/22/00 125.00 55,948 52,500 International Business Machines Corp. 5,000 1/24/00 150.00 46,098 313 International Business Machines Corp. 4,000 4/24/00 110.00 43,879 40,000 Johnson & Johnson 15,000 1/18/00 60.00 61,423 23,437 MediaOne Group, Inc. 7,000 4/24/00 90.00 14,228 5,250 Methode Electronics, Inc., Cl. A 15,000 4/24/00 35.00 40,799 45,000 Optical Coating Laboratory, Inc. 6,000 5/22/00 250.00 249,562 445,500 Oracle Corp. 1,800 3/20/00 100.00 9,171 40,050 Praxair, Inc. 4,000 1/24/00 55.00 13,597 250 Rational Software Corp. 7,700 1/24/00 40.00 39,458 74,113 STMicroelectronics NV 3,000 4/24/00 140.00 49,033 76,125 Teradyne, Inc. 4,000 1/24/00 37.50 26,689 113,500 Time Warner, Inc. 6,400 6/19/00 80.00 19,007 32,000 Xerox Corp. 9,600 1/24/00 70.00 34,511 600 ---------- ---------- $1,252,165 $2,036,344 ========== ==========
2. Non-income producing security. 3. Identifies issues considered to be illiquid or restricted--See Note 6 of Notes to Financial Statements. 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 $10,188,075 or 1.76% of the Fund's net assets as of December 31, 1999. 5. Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: AUD -- Australian Dollar GBP -- British Pound Sterling CAD -- Canadian Dollar NZD -- New Zealand Dollar DKK -- Danish Krone ZAR -- South African Rand EUR -- Euro 6. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase. 7. Represents the current interest rate for a variable or increasing rate security. 8. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 9. Issuer is in default. See accompanying Notes to Financial Statements. Oppenheimer Multiple Strategies Fund/VA 15 - -------------------------------------------------------------------------------- Statement of Assets and Liabilities December 31, 1999 - -------------------------------------------------------------------------------- ========================================================================================================= Assets Investments, at value (cost $490,650,853)--see accompanying statement $576,085,947 - --------------------------------------------------------------------------------------------------------- Cash 1,043,942 - --------------------------------------------------------------------------------------------------------- Receivables and other assets: Interest 5,069,984 Shares of beneficial interest sold 34,787 Other 6,374 ------------ Total assets 582,241,034 ========================================================================================================= Liabilities Options written, at value (premiums received $1,252,165)--see accompanying statement 2,036,344 - --------------------------------------------------------------------------------------------------------- Payables and other liabilities: Shares of beneficial interest redeemed 734,934 Investments purchased 664,056 Transfer and shareholder servicing agent fees 184 Trustees' compensation 49 Other 22,633 ------------ Total liabilities 3,458,200 ========================================================================================================= Net Assets $578,782,834 ============ ========================================================================================================= Composition of Net Assets Paid-in capital $432,093,512 - --------------------------------------------------------------------------------------------------------- Undistributed net investment income 25,784,656 - --------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 36,252,948 - --------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 84,651,718 ------------ Net assets--applicable to 33,148,390 shares of beneficial interest outstanding $578,782,834 ============ ========================================================================================================= Net Asset Value, Redemption Price Per Share and Offering Price Per Share $17.46
See accompanying Notes to Financial Statements. 16 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Statement of Operations For the Year Ended December 31, 1999 - -------------------------------------------------------------------------------- ========================================================================================================= Investment Income Interest $25,857,230 - --------------------------------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $24,091) 4,941,295 ----------- Total income 30,798,525 ========================================================================================================= Expenses Management fees 4,271,996 - --------------------------------------------------------------------------------------------------------- Custodian fees and expenses 60,945 - --------------------------------------------------------------------------------------------------------- Trustees' compensation 6,600 - --------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees 2,105 - --------------------------------------------------------------------------------------------------------- Other 7,362 ----------- Total expenses 4,349,008 Less expenses paid indirectly (5,741) ----------- Net expenses 4,343,267 ========================================================================================================= Net Investment Income 26,455,258 ========================================================================================================= Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments (including premiums on options exercised) 36,754,035 Closing and expiration of option contracts written 853,989 Foreign currency transactions (1,215,313) ----------- Net realized gain 36,392,711 - --------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on: Investments 3,765,208 Translation of assets and liabilities denominated in foreign currencies (624,794) ----------- Net change 3,140,414 ----------- Net realized and unrealized gain 39,533,125 ========================================================================================================= Net Increase in Net Assets Resulting from Operations $65,988,383 ===========
See accompanying Notes to Financial Statements. Oppenheimer Multiple Strategies Fund/VA 17 - -------------------------------------------------------------------------------- Statements of Changes in Net Assets - --------------------------------------------------------------------------------
Year Ended December 31, 1999 1998 ============================================================================================================================== Operations Net investment income $ 26,455,258 $ 25,911,095 - ------------------------------------------------------------------------------------------------------------------------------ Net realized gain 36,392,711 29,540,227 - ------------------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation or depreciation 3,140,414 (15,895,873) ------------ ------------ Net increase in net assets resulting from operations 65,988,383 39,555,449 ============================================================================================================================== Dividends and/or Distributions to Shareholders Dividends from net investment income (20,765,472) (5,964,037) - ------------------------------------------------------------------------------------------------------------------------------ Distributions from net realized gain (30,037,334) (34,591,414) ============================================================================================================================== Beneficial Interest Transactions Net decrease in net assets resulting from beneficial interest transactions (58,736,044) (14,211,527) ============================================================================================================================== Net Assets Total decrease (43,550,467) (15,211,529) - ------------------------------------------------------------------------------------------------------------------------------ Beginning of period 622,333,301 637,544,830 ------------ ------------ End of period (including undistributed net investment income of $25,784,656 and $20,748,181, respectively) $578,782,834 $622,333,301 ============ ============
See accompanying Notes to Financial Statements. 18 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Financial Highlights - --------------------------------------------------------------------------------
Year Ended December 31, 1999 1998 1997 1996 1995 ================================================================================================================================ Per Share Operating Data Net asset value, beginning of period $17.05 $17.01 $15.63 $14.55 $12.91 - -------------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income .82 .71 .62 .72 .66 Net realized and unrealized gain 1.04 .42 1.95 1.45 2.00 - -------------------------------------------------------------------------------------------------------------------------------- Total income from investment operations 1.86 1.13 2.57 2.17 2.66 - -------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.59) (.16) (.61) (.74) (.65) Distributions from net realized gain (.86) (.93) (.58) (.35) (.37) - -------------------------------------------------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.45) (1.09) (1.19) (1.09) (1.02) - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $17.46 $17.05 $17.01 $15.63 $14.55 ====== ====== ====== ====== ====== ================================================================================================================================ Total Return, at Net Asset Value(1) 11.80% 6.66% 17.22% 15.50% 21.36% ================================================================================================================================ Ratios/Supplemental Data Net assets, end of period (in thousands) $578,783 $622,333 $637,545 $484,285 $381,263 - -------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $593,151 $640,131 $564,369 $428,277 $344,745 - -------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(2) Net investment income 4.46% 4.05% 3.86% 4.89% 4.81% Expenses 0.73% 0.76%(3) 0.75%(3) 0.77%(3) 0.77%(3) - -------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(4) 17% 43% 42% 40% 39%
1. Assumes a $1,000 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 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 for periods less than one full year. 3. Expense ratio has not been grossed up to reflect the effect of expenses paid indirectly. 4. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1999, were $94,111,384 and $130,260,786, respectively. See accompanying Notes to Financial Statements. Oppenheimer Multiple Strategies Fund/VA 19 - -------------------------------------------------------------------------------- Notes to Financial Statements - -------------------------------------------------------------------------------- ================================================================================ 1. Significant Accounting Policies Oppenheimer Multiple Strategies Fund/VA (the Fund) is a separate series of Oppenheimer Variable Account Funds (the Trust), a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund's investment objective is to seek a total investment return, which includes current income and capital appreciation in the value of its shares. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- Securities Valuation. Portfolio securities 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. Foreign currency exchange contracts are valued based on the closing prices of the foreign 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 price 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. - -------------------------------------------------------------------------------- Security Credit Risk. The Fund invests 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 Fund may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. As of December 31, 1999, securities with an aggregate market value of $65,000, representing 0.01% of the Fund's net assets, were in default. - -------------------------------------------------------------------------------- Foreign Currency Translation. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- Repurchase Agreements. The Fund requires 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 Fund may be delayed or limited. - -------------------------------------------------------------------------------- Federal Taxes. The Fund intends 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. - -------------------------------------------------------------------------------- Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. 20 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Notes to Financial Statements (Continued) - -------------------------------------------------------------------------------- ================================================================================ 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 the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of 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 Fund. The Fund adjusts the classification of distributions to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations. Accordingly, during the year ended December 31, 1999, amounts have been reclassified to reflect a decrease in undistributed net investment income of $653,311. Accumulated net realized gain on investments was increased by the same amount. - -------------------------------------------------------------------------------- Expense Offset Arrangements. Expenses paid indirectly represent a reduction of custodian fees for earnings on cash balances maintained by the Fund. - -------------------------------------------------------------------------------- Other. Investment transactions are accounted for as of trade date and dividend income is recorded on the ex-dividend date. Realized gains and losses on investments and options written and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. 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 Fund has authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
Year Ended December 31, 1999 Year Ended December 31, 1998 ------------------------------ ------------------------------ Shares Amount Shares Amount - ------------------------------------------------------------------------------------------------------------------------------ Sold 1,494,012 $ 25,019,610 3,352,415 $ 56,547,384 Dividends and/or distributions reinvested 3,209,274 50,802,806 2,387,019 40,555,451 Redeemed (8,052,445) (134,558,460) (6,714,957) (111,314,362) ---------- ------------- ---------- ------------- Net decrease (3,349,159) $ (58,736,044) (975,523) $ (14,211,527) ========== ============= ========== =============
================================================================================ 3. Unrealized Gains and Losses on Securities As of December 31, 1999, net unrealized appreciation on securities and options written of $84,650,915 was composed of gross appreciation of $121,520,407, and gross depreciation of $36,869,492. ================================================================================ 4. Management Fees and Other Transactions with Affiliates Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Trust. 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. The Fund's management fee for the year ended December 31, 1999, was 0.72% of average annual net assets. - -------------------------------------------------------------------------------- Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager, is the transfer agent for the Fund and is responsible for maintaining the shareholder registry and shareholder accounting records for the Fund. OFS provides these services for cost. Oppenheimer Multiple Strategies Fund/VA 21 - -------------------------------------------------------------------------------- Notes to Financial Statements (Continued) - -------------------------------------------------------------------------------- ================================================================================ 5. Foreign Currency Contracts A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts for operational purposes and to seek to protect against adverse exchange rate fluctuations. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates as provided by a reliable bank, dealer or pricing service. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities. The Fund may realize a gain or loss upon the closing or settlement of the foreign currency transaction. Realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. Securities denominated in foreign currency to cover net exposure on outstanding foreign currency contracts are noted in the Statement of Investments where applicable. ================================================================================ 6. Option Activity The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a note to the Statement of Investments. Options written are reported as a liability in the Statement of Assets and Liabilities. Gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Written option activity for the year ended December 31, 1999, was as follows:
Call Options ------------------------------ Number of Amount of Options Premiums - -------------------------------------------------------------------------------------------------------------- Options outstanding as of December 31, 1998 5,871 $ 1,686,387 Options written 7,204 3,421,612 Options closed or expired (7,188) (2,544,448) Options exercised (3,535) (1,311,386) ------ ----------- Options outstanding as of December 31, 1999 2,352 $ 1,252,165 ====== ===========
22 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Notes to Financial Statements (Continued) - -------------------------------------------------------------------------------- ================================================================================ 7. Illiquid or Restricted Securities As of December 31, 1999, 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 also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 15% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. The aggregate value of illiquid or restricted securities subject to this limitation as of December 31, 1999, was $1,878,948, which represents 0.32% of the Fund's net assets, of which $6,241 is considered restricted. Information concerning restricted securities is as follows:
Valuation Per Unit as of Acquisition Cost Per December 31, Security Date Unit 1999 - --------------------------------------------------------------------------------------------------------------------------- Intermedia Communications, Inc. 9/29/98 $21.69 $31.05
Oppenheimer Multiple Strategies Fund/VA 23 - -------------------------------------------------------------------------------- Independent Auditors' Report - -------------------------------------------------------------------------------- ================================================================================ To the Board of Trustees and Shareholders of Oppenheimer Multiple Strategies Fund/VA: We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Oppenheimer Multiple Strategies Fund/VA (which is a series of Oppenheimer Variable Account Funds) as of December 31, 1999, the related statement of operations for the year then ended, the statements of changes in net assets for the years ended December 31, 1999 and 1998, and the financial highlights for the period January 1, 1995, to December 31, 1999. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1999, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of Oppenheimer Multiple Strategies Fund/VA as of December 31, 1999, the results of its operations, the changes in its net assets, and the financial highlights for the respective stated periods, in conformity with generally accepted accounting principles. Deloitte & Touche LLP Denver, Colorado January 24, 2000 24 Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- Federal Income Tax Information (Unaudited) - -------------------------------------------------------------------------------- ================================================================================ In early 2000 shareholders will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 1999. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Distributions of $1.4520 per share were paid to shareholders on March 22, 1999, of which $0.8570 was designated as a "capital gain distribution" for federal income tax purposes. Whether received in stock or in cash, the capital gain distribution should be treated by shareholders as a gain from the sale of capital assets held for more than one year (long-term capital gains). Dividends paid by the Fund during the fiscal year ended December 31, 1999, which are not designated as capital gain distributions should be multiplied by 15.33% to arrive at the net amount eligible for the corporate dividend-received deduction. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. Oppenheimer Multiple Strategies Fund/VA 25 - -------------------------------------------------------------------------------- Oppenheimer Multiple Strategies Fund/VA - -------------------------------------------------------------------------------- A Series of Oppenheimer Variable Account Funds ===================================================================================================== Officers and Trustees James C. Swain, Trustee and Chairman of the Board Bridget A. Macaskill, President William H. Armstrong, Trustee Robert G. Avis, Trustee William A. Baker, Trustee Edward L. Cameron, Trustee Jon S. Fossel, Trustee Sam Freedman, Trustee Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee Ned M. Steel, Trustee John P. Doney, Vice President Michael S. Levine, Vice President Richard H. Rubinstein, Vice President Andrew J. Donohue, Vice President and Secretary Brian W. Wixted, Treasurer Robert G. Zack, Assistant Secretary Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer ===================================================================================================== Investment Advisor OppenheimerFunds, Inc. ===================================================================================================== Transfer Agent OppenheimerFunds Services ===================================================================================================== Custodian of Portfolio Securities The Bank of New York ===================================================================================================== Independent Auditors Deloitte & Touche LLP ===================================================================================================== Legal Counsel Myer, Swanson, Adams & Wolf, P.C. This is a copy of a report to shareholders of Oppenheimer Multiple Strategies Fund/VA. This report must be preceded or accompanied by a Prospectus of Oppenheimer Multiple Strategies Fund/VA. For material information concerning the Fund, see the Prospectus. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.
26 Oppenheimer Multiple Strategies Fund/VA -----END PRIVACY-ENHANCED MESSAGE-----