-----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, OpRfikvFSU2/KQSpq9tuvWAGXgDEZhDSgtHYUu1Tjt2bbz/5KMqYOiqGo5c2wozZ Yr1T3HKw/NTiRjdaXS00tg== 0001086144-00-000018.txt : 20000307 0001086144-00-000018.hdr.sgml : 20000307 ACCESSION NUMBER: 0001086144-00-000018 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000303 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: 560247 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 MAIN STREET GROWTH & INCOME FUND/VA Annual Report December 31, 1999 ================================================================================ Oppenheimer Main Street(R) Growth & Income Fund/VA A Series of Oppenheimer Variable Account Funds [logo] OppenheimerFunds(R) The Right Way to Invest - -------------------------------------------------------------------------------- Oppenheimer Variable Account Funds--Oppenheimer Main Street(R) Growth & Income Fund/VA - -------------------------------------------------------------------------------- ================================================================================ Objective Oppenheimer Main Street Growth & Income Fund/VA, a series of Oppenheimer Variable Account Funds, seeks high total return, which includes growth in the value of its shares, as well as current income from equity and debt securities. Prior to May 1, 1999, the Fund was named Oppenheimer Growth & Income Fund. ================================================================================ Narrative by Charles Albers and Nikolaos Monoyios, Co-portfolio Managers For the fiscal year that ended December 31, 1999, Oppenheimer Main Street Growth & Income/VA Fund provided an average annual total return of 21.71%.(1) During 1999, the Fund's increasing emphasis on large capitalization growth stocks was a major factor in its success. In addition, we sold convertible bonds from the portfolio, which helped the Fund's performance because the fixed income markets did not perform well during the year. Another important plus was the Fund's stock selection process, which enabled us to add value to the portfolio. On May 1, 1999, we became the Fund's new portfolio managers and adopted a disciplined investment process for the Fund that we have developed together over nearly 20 years. Our computer models evaluate statistics related to more than 2,000 individual stocks, determining which areas of the stock market offer the best prospects--growth versus value, large-cap or small-cap stocks, domestic or foreign. We assign a ranking to each of these stocks, setting aside the top ten percent for further analysis. We evaluate such qualitative factors as the company's management, competitive forces and legal or accounting issues. As of December 31, 1999, the Fund contained a broadly diversified portfolio. The Standard & Poor's 500 Index is divided into eleven different economic sectors. Compared to the S&P 500 Index, the Fund was overweight in consumer cyclicals such as automotive, building materials, home builders, publishing and retailing. These industries have benefited from the strength of the U.S. economy as well as robust consumer spending.(2) We have also benefited from a strong weighting in energy. The price of oil has more than doubled since the beginning of 1999, and that has made energy companies much more profitable than the year before. In addition, we believe the natural gas industry holds great promise, despite a warmer than normal winter. Although energy stocks lost some of their steam in the fourth quarter, our view is that the companies, which have cut costs substantially, can continue to be very profitable at current energy prices. In 1999, technology was the most explosive area of growth in the stock market. It is an area of the market that has been driven by "momentum" investors. We have profited from many of our investments in technology. Regardless of the strength of the overall market, we believe that valuation does matter in the end. Our system enforces a discipline because it rigorously analyzes trends in earnings patterns and price behavior of stocks. Over the long term, we believe that our process is likely to produce more consistent results, making Oppenheimer Main Street Growth & Income Fund/VA an important part of The Right Way to Invest. 1. Includes changes in net asset value per share and does not include the charges associated with the separate account products that offer this Fund. Such performance would have been lower if such charges were taken into account. This performance was achieved in part during periods of rapidly rising markets, and there is no assurance that the Fund will continue to achieve those gains in the future. 2. The Fund's portfolio is subject to change. 2 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Oppenheimer Variable Account Funds--Oppenheimer Main Street(R) Growth & Income Fund/VA - -------------------------------------------------------------------------------- ================================================================================ Management's discussion of performance. The stock market continued to forge ahead during the Fund's fiscal year that ended December 31, 1999. Although technology was the leader in 1999, other investment sectors performed well, including consumer cyclicals such as home building and retailing. The Fund benefited from its strong emphasis in these areas, as well as an underemphasis on poor performers such as financial services and consumer staples such as food and beverages. Due to their extremely high stock prices, the Fund held a smaller than average proportion of technology stocks. The Fund's portfolio holdings, allocations 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, a broad-based index of equity securities widely regarded as a general measure of the performance of the U.S. equity 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 graphs that follow shows the effect of taxes. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the index. Comparison of Change in Value of $10,000 Hypothetical Investments in: OVAF/Oppenheimer Main Street Growth & Income Fund/VA and S&P 500 Index [line graph]
OVAF/Oppenheimer Main Street Growth & Income Fund/VA S&P 500 Index 7.5.95 10000 10000 12.31.95 12525 11443 12.31.96 16598 14066 12.31.97 21989 18755 12.31.98 23022 24116 12.31.99 28020 29185
Average Annual Total Return of the Fund at 12/31/99 1-Year 21.71% Life 25.80% 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 the S&P 500 Index begins on 6/30/95. The inception date of the Fund is 7/5/95. 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 Main Street Growth & Income Fund/VA 3 - -------------------------------------------------------------------------------- Statement of Investments December 31, 1999 - --------------------------------------------------------------------------------
Market Value Shares Note 1 =================================================================================================================== Common Stocks--94.6% - ------------------------------------------------------------------------------------------------------------------- Basic Materials--2.9% - ------------------------------------------------------------------------------------------------------------------- Chemicals--2.0% Dexter Corp. 7,000 $ 278,250 - ------------------------------------------------------------------------------------------------------------------- Dow Chemical Co. 18,500 2,472,062 - ------------------------------------------------------------------------------------------------------------------- Du Pont (E.I.) De Nemours & Co. 88,400 5,823,350 - ------------------------------------------------------------------------------------------------------------------- Ecolab, Inc. 6,900 269,962 - ------------------------------------------------------------------------------------------------------------------- Engelhard Corp. 3,000 56,625 - ------------------------------------------------------------------------------------------------------------------- Great Lakes Chemical Corp. 1,200 45,825 - ------------------------------------------------------------------------------------------------------------------- International Flavors & Fragrances, Inc. 3,000 113,250 - ------------------------------------------------------------------------------------------------------------------- Lafarge Corp. 8,100 223,762 - ------------------------------------------------------------------------------------------------------------------- Rohm & Haas Co. 6,900 280,744 - ------------------------------------------------------------------------------------------------------------------- Schulman (A.), Inc. 10,000 163,125 - ------------------------------------------------------------------------------------------------------------------- Union Carbide Corp. 20,500 1,368,375 - ------------------------------------------------------------------------------------------------------------------- Universal Corp. 5,000 114,062 - ------------------------------------------------------------------------------------------------------------------- W.R. Grace & Co.(1) 4,000 55,500 ----------- 11,264,892 - ------------------------------------------------------------------------------------------------------------------- Gold & Precious Minerals--0.0% Homestake Mining Co. 10,100 78,906 - ------------------------------------------------------------------------------------------------------------------- Metals--0.6% AK Steel Holding Corp. 10,000 188,750 - ------------------------------------------------------------------------------------------------------------------- Alcoa, Inc. 18,400 1,527,200 - ------------------------------------------------------------------------------------------------------------------- Inco Ltd.(1) 19,900 467,650 - ------------------------------------------------------------------------------------------------------------------- Nucor Corp. 6,000 328,875 - ------------------------------------------------------------------------------------------------------------------- Reliance Steel & Aluminum Co. 15,000 351,562 - ------------------------------------------------------------------------------------------------------------------- Ryerson Tull, Inc. 13,000 252,687 - ------------------------------------------------------------------------------------------------------------------- Worthington Industries, Inc. 1,600 26,500 ----------- 3,143,224 - ------------------------------------------------------------------------------------------------------------------- Paper--0.3% Georgia Pacific Group 7,600 385,700 - ------------------------------------------------------------------------------------------------------------------- Louisiana-Pacific Corp. 21,300 303,525 - ------------------------------------------------------------------------------------------------------------------- Rayonier, Inc. 4,000 193,250 - ------------------------------------------------------------------------------------------------------------------- Weyerhaeuser Co. 8,300 596,044 - ------------------------------------------------------------------------------------------------------------------- Willamette Industries, Inc. 7,000 325,062 ----------- 1,803,581 - ------------------------------------------------------------------------------------------------------------------- Capital Goods--10.5% - ------------------------------------------------------------------------------------------------------------------- Aerospace/Defense--1.6% Boeing Co. 147,100 6,113,844 - ------------------------------------------------------------------------------------------------------------------- General Dynamics Corp. 25,300 1,334,575 - ------------------------------------------------------------------------------------------------------------------- Lockheed Martin Corp. 11,600 253,750 - ------------------------------------------------------------------------------------------------------------------- Northrop Grumman Corp. 8,000 432,500 - ------------------------------------------------------------------------------------------------------------------- Raytheon Co., Cl. B 15,000 398,437 - ------------------------------------------------------------------------------------------------------------------- TRW, Inc. 7,600 394,725 ----------- 8,927,831 4 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Electrical Equipment--3.7% AVX Corp. 9,400 $ 469,412 - ------------------------------------------------------------------------------------------------------------------- CommScope, Inc.(1) 65,000 2,620,312 - ------------------------------------------------------------------------------------------------------------------- Conexant Systems, Inc.(1) 9,400 623,925 - ------------------------------------------------------------------------------------------------------------------- Emerson Electric Co. 30,000 1,721,250 - ------------------------------------------------------------------------------------------------------------------- General Electric Co. 80,000 12,380,000 - ------------------------------------------------------------------------------------------------------------------- Integrated Device Technology, Inc.(1) 7,000 203,000 - ------------------------------------------------------------------------------------------------------------------- Rockwell International Corp. 24,700 1,182,512 - ------------------------------------------------------------------------------------------------------------------- SPX Corp.(1) 6,000 484,875 - ------------------------------------------------------------------------------------------------------------------- Symbol Technologies, Inc. 8,850 562,528 ----------- 20,247,814 - ------------------------------------------------------------------------------------------------------------------- Industrial Services--0.6% Coflexip SA, Sponsored ADR 62,500 2,375,000 - ------------------------------------------------------------------------------------------------------------------- Fluor Corp. 4,900 224,787 - ------------------------------------------------------------------------------------------------------------------- Payches, Inc. 3,300 132,000 - ------------------------------------------------------------------------------------------------------------------- Valassis Communications, Inc.(1) 10,000 422,500 ----------- 3,154,287 - ------------------------------------------------------------------------------------------------------------------- Manufacturing--4.6% American Standard Cos., Inc.(1) 75,000 3,440,625 - ------------------------------------------------------------------------------------------------------------------- Avery-Dennison Corp. 28,500 2,076,937 - ------------------------------------------------------------------------------------------------------------------- Ball Corp. 3,400 133,875 - ------------------------------------------------------------------------------------------------------------------- Bemis Co., Inc. 4,700 163,912 - ------------------------------------------------------------------------------------------------------------------- Briggs & Stratton Corp. 4,000 214,500 - ------------------------------------------------------------------------------------------------------------------- Cooper Industries, Inc. 13,900 562,081 - ------------------------------------------------------------------------------------------------------------------- Corning, Inc. 4,500 580,219 - ------------------------------------------------------------------------------------------------------------------- Crown Cork & Seal Co., Inc. 2,500 55,937 - ------------------------------------------------------------------------------------------------------------------- Cummins Engine Co., Inc. 1,200 57,975 - ------------------------------------------------------------------------------------------------------------------- Danaher Corp. 5,700 275,025 - ------------------------------------------------------------------------------------------------------------------- Dover Corp. 23,200 1,052,700 - ------------------------------------------------------------------------------------------------------------------- Eaton Corp. 8,700 631,837 - ------------------------------------------------------------------------------------------------------------------- Honeywell International, Inc. 84,375 4,867,383 - ------------------------------------------------------------------------------------------------------------------- Illinois Tool Works, Inc. 20,300 1,371,519 - ------------------------------------------------------------------------------------------------------------------- Mark IV Industries, Inc. 15,000 265,312 - ------------------------------------------------------------------------------------------------------------------- Mettler-Toledo International, Inc.(1) 6,000 229,125 - ------------------------------------------------------------------------------------------------------------------- Microchip Technology, Inc.(1) 3,000 205,312 - ------------------------------------------------------------------------------------------------------------------- Miller (Herman), Inc. 10,000 230,000 - ------------------------------------------------------------------------------------------------------------------- Minnesota Mining & Manufacturing Co. 42,500 4,159,687 - ------------------------------------------------------------------------------------------------------------------- PACCAR, Inc. 1,800 79,762 - ------------------------------------------------------------------------------------------------------------------- Parker-Hannifin Corp. 7,100 364,319 - ------------------------------------------------------------------------------------------------------------------- Pentair, Inc. 2,000 77,000 - ------------------------------------------------------------------------------------------------------------------- Temple-Inland, Inc. 2,000 131,875 - ------------------------------------------------------------------------------------------------------------------- Tyco International Ltd. 33,300 1,294,537 - ------------------------------------------------------------------------------------------------------------------- United Technologies Corp. 47,500 3,087,500 ----------- 25,608,954 Oppenheimer Main Street Growth & Income Fund/VA 5 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Communication Services--5.7% - ------------------------------------------------------------------------------------------------------------------- Telecommunications: Long Distance--3.8% ADC Telecommunications, Inc.(1) 5,700 $ 413,606 - ------------------------------------------------------------------------------------------------------------------- ALLTELL Corp. 21,000 1,736,437 - ------------------------------------------------------------------------------------------------------------------- AT&T Corp. 299,300 15,189,475 - ------------------------------------------------------------------------------------------------------------------- Comverse Technology, Inc.(1) 4,000 579,000 - ------------------------------------------------------------------------------------------------------------------- Intermedia Communications, Inc.(1)(2) 1,230 38,191 - ------------------------------------------------------------------------------------------------------------------- Sprint Corp. (Fon Group) 50,000 3,365,625 ----------- 21,322,334 - ------------------------------------------------------------------------------------------------------------------- Telephone Utilities--1.9% BellSouth Corp. 166,000 7,770,875 - ------------------------------------------------------------------------------------------------------------------- GTE Corp. 29,800 2,102,762 - ------------------------------------------------------------------------------------------------------------------- Western Wireless Corp.(1) 9,000 600,750 ----------- 10,474,387 - ------------------------------------------------------------------------------------------------------------------- Telecommunications: Wireless--0.0% United States Cellular Corp.(1) 2,000 201,875 - ------------------------------------------------------------------------------------------------------------------- Consumer Cyclicals--17.1% - ------------------------------------------------------------------------------------------------------------------- Autos & Housing--2.2% Arvin Industries, Inc. 6,900 195,787 - ------------------------------------------------------------------------------------------------------------------- Bandag, Inc. 2,000 50,000 - ------------------------------------------------------------------------------------------------------------------- Centex Construction Products, Inc. 6,000 234,000 - ------------------------------------------------------------------------------------------------------------------- Cooper Tire & Rubber Co. 7,700 119,831 - ------------------------------------------------------------------------------------------------------------------- Dana Corp. 3,800 113,762 - ------------------------------------------------------------------------------------------------------------------- Delphi Automotive Systems Corp. 79,231 1,247,888 - ------------------------------------------------------------------------------------------------------------------- Fortune Brands, Inc. 15,000 495,937 - ------------------------------------------------------------------------------------------------------------------- Furniture Brands International, Inc.(1) 5,000 110,000 - ------------------------------------------------------------------------------------------------------------------- General Motors Corp. 57,500 4,179,531 - ------------------------------------------------------------------------------------------------------------------- Hughes Supply, Inc. 6,900 148,781 - ------------------------------------------------------------------------------------------------------------------- Johns Manville Corp. 25,800 361,200 - ------------------------------------------------------------------------------------------------------------------- Johnson Controls, Inc. 6,600 375,375 - ------------------------------------------------------------------------------------------------------------------- Lear Corp.(1) 17,500 560,000 - ------------------------------------------------------------------------------------------------------------------- Leggett & Platt, Inc. 14,100 302,269 - ------------------------------------------------------------------------------------------------------------------- Masco Corp. 9,000 228,375 - ------------------------------------------------------------------------------------------------------------------- Maytag Corp. 9,000 432,000 - ------------------------------------------------------------------------------------------------------------------- Meritor Automotive, Inc. 12,000 232,500 - ------------------------------------------------------------------------------------------------------------------- NVR, Inc.(1) 5,000 238,750 - ------------------------------------------------------------------------------------------------------------------- Ryland Group, Inc. (The) 7,000 161,437 - ------------------------------------------------------------------------------------------------------------------- Snap-On, Inc. 4,300 114,219 - ------------------------------------------------------------------------------------------------------------------- Southdown, Inc. 5,400 278,775 - ------------------------------------------------------------------------------------------------------------------- Toll Brothers, Inc.(1) 10,000 186,250 - ------------------------------------------------------------------------------------------------------------------- Tower Automotive, Inc.(1) 8,900 137,394 - ------------------------------------------------------------------------------------------------------------------- Vulcan Materials Co. 8,000 319,500 6 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Autos & Housing (continued) Webb (Del E.) Corp.(1) 9,900 $ 246,881 - ------------------------------------------------------------------------------------------------------------------- Whirlpool Corp. 12,700 826,294 - ------------------------------------------------------------------------------------------------------------------- York International Corp. 4,800 131,700 ----------- 12,028,436 - ------------------------------------------------------------------------------------------------------------------- Consumer Services--0.8% Avis Rent A Car, Inc.(1) 18,000 460,125 - ------------------------------------------------------------------------------------------------------------------- Catalina Marketing Corp.(1) 3,500 405,125 - ------------------------------------------------------------------------------------------------------------------- CDI Corp.(1) 9,900 238,837 - ------------------------------------------------------------------------------------------------------------------- Dun & Bradstreet Corp. 12,000 354,000 - ------------------------------------------------------------------------------------------------------------------- H&R Block, Inc. 14,000 612,500 - ------------------------------------------------------------------------------------------------------------------- Hertz Corp., Cl. A 5,000 250,625 - ------------------------------------------------------------------------------------------------------------------- Interpublic Group of Cos., Inc. 27,000 1,557,562 - ------------------------------------------------------------------------------------------------------------------- Young & Rubicam, Inc. 8,000 566,000 ----------- 4,444,774 - ------------------------------------------------------------------------------------------------------------------- Leisure & Entertainment--0.5% Brunswick Corp. 25,000 556,250 - ------------------------------------------------------------------------------------------------------------------- Harley-Davidson, Inc. 10,000 640,625 - ------------------------------------------------------------------------------------------------------------------- Hasbro, Inc. 10,000 190,625 - ------------------------------------------------------------------------------------------------------------------- Marriott International, Inc., Cl. A 17,000 536,562 - ------------------------------------------------------------------------------------------------------------------- MGM Grand, Inc. 8,624 433,895 - ------------------------------------------------------------------------------------------------------------------- Park Place Entertainment Corp.(1) 50,000 625,000 ----------- 2,982,957 - ------------------------------------------------------------------------------------------------------------------- Media--3.0% Central Newspapers, Inc., Cl. A 5,000 196,875 - ------------------------------------------------------------------------------------------------------------------- Deluxe Corp. 10,000 274,375 - ------------------------------------------------------------------------------------------------------------------- Dow Jones & Co., Inc. 4,000 272,000 - ------------------------------------------------------------------------------------------------------------------- Gannett Co., Inc. 28,000 2,283,750 - ------------------------------------------------------------------------------------------------------------------- Harland (John H.) Co. 10,000 183,125 - ------------------------------------------------------------------------------------------------------------------- Knight-Ridder, Inc. 10,800 642,600 - ------------------------------------------------------------------------------------------------------------------- McClatchy Co., Cl. A 5,000 216,250 - ------------------------------------------------------------------------------------------------------------------- New York Times Co., Cl. A 15,000 736,875 - ------------------------------------------------------------------------------------------------------------------- R.H. Donnelley Corp.(1) 9,900 186,862 - ------------------------------------------------------------------------------------------------------------------- Readers Digest Assn., Inc., Cl. A, Non-Vtg. 28,300 827,775 - ------------------------------------------------------------------------------------------------------------------- Snyder Communications, Inc.(1) 5,000 96,250 - ------------------------------------------------------------------------------------------------------------------- Time Warner, Inc. 114,700 8,308,581 - ------------------------------------------------------------------------------------------------------------------- Times Mirror Co. (The), Cl. A 2,400 160,800 - ------------------------------------------------------------------------------------------------------------------- Tribune Co. 20,000 1,101,250 - ------------------------------------------------------------------------------------------------------------------- USA Networks, Inc.(1) 20,000 1,105,000 ----------- 16,592,368 Oppenheimer Main Street Growth & Income Fund/VA 7 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Retail: General--4.8% Dayton Hudson Corp. 15,600 $ 1,145,625 - ------------------------------------------------------------------------------------------------------------------- Dillard's, Inc. 4,000 80,750 - ------------------------------------------------------------------------------------------------------------------- Dollar General Corp. 15,600 354,900 - ------------------------------------------------------------------------------------------------------------------- Family Dollar Stores, Inc. 6,000 97,875 - ------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc.(1) 87,500 4,424,219 - ------------------------------------------------------------------------------------------------------------------- K Mart Corp.(1) 55,000 553,437 - ------------------------------------------------------------------------------------------------------------------- Kohl's Corp.(1) 7,700 555,844 - ------------------------------------------------------------------------------------------------------------------- May Department Stores Co. 45,000 1,451,250 - ------------------------------------------------------------------------------------------------------------------- Nordstrom, Inc. 6,000 157,125 - ------------------------------------------------------------------------------------------------------------------- Penney (J.C.) Co., Inc. 7,000 139,562 - ------------------------------------------------------------------------------------------------------------------- Sears Roebuck & Co. 42,000 1,278,375 - ------------------------------------------------------------------------------------------------------------------- Wal-Mart Stores, Inc. 237,700 16,431,012 ----------- 26,669,974 - ------------------------------------------------------------------------------------------------------------------- Retail: Specialty--5.1% Abercrombie & Fitch Co., Cl. A(1) 43,000 1,147,562 - ------------------------------------------------------------------------------------------------------------------- American Eagle Outfitters, Inc.(1) 11,200 504,000 - ------------------------------------------------------------------------------------------------------------------- American Greetings Corp., Cl. A 2,200 51,975 - ------------------------------------------------------------------------------------------------------------------- Ann Taylor Stores Corp.(1) 10,000 344,375 - ------------------------------------------------------------------------------------------------------------------- Bed Bath & Beyond, Inc.(1) 2,700 93,825 - ------------------------------------------------------------------------------------------------------------------- Best Buy Co., Inc.(1) 23,000 1,154,312 - ------------------------------------------------------------------------------------------------------------------- BJ's Wholesale Club, Inc.(1) 8,000 292,000 - ------------------------------------------------------------------------------------------------------------------- Circuit City Stores-Circuit City Group 9,600 432,600 - ------------------------------------------------------------------------------------------------------------------- Gap, Inc. 55,500 2,553,000 - ------------------------------------------------------------------------------------------------------------------- Home Depot, Inc. 180,600 12,382,387 - ------------------------------------------------------------------------------------------------------------------- Lands' End, Inc.(1) 4,700 163,325 - ------------------------------------------------------------------------------------------------------------------- Limited, Inc. 20,700 896,569 - ------------------------------------------------------------------------------------------------------------------- Linens 'N Things, Inc.(1) 5,000 148,125 - ------------------------------------------------------------------------------------------------------------------- Lowe's Cos., Inc. 21,500 1,284,625 - ------------------------------------------------------------------------------------------------------------------- Nike, Inc., Cl. B 20,000 991,250 - ------------------------------------------------------------------------------------------------------------------- Office Depot, Inc.(1) 20,000 218,750 - ------------------------------------------------------------------------------------------------------------------- Payless ShoeSource, Inc.(1) 15,000 705,000 - ------------------------------------------------------------------------------------------------------------------- Ross Stores, Inc. 43,000 771,312 - ------------------------------------------------------------------------------------------------------------------- Sherwin-Williams Co. 23,000 483,000 - ------------------------------------------------------------------------------------------------------------------- Shopko Stores, Inc.(1) 10,000 230,000 - ------------------------------------------------------------------------------------------------------------------- Tandy Corp. 20,000 983,750 - ------------------------------------------------------------------------------------------------------------------- Tiffany & Co. 10,000 892,500 - ------------------------------------------------------------------------------------------------------------------- TJX Cos., Inc. 31,200 637,650 - ------------------------------------------------------------------------------------------------------------------- Too, Inc.(1) 2,957 51,008 - ------------------------------------------------------------------------------------------------------------------- Toys "R" Us, Inc.(1) 23,000 329,187 - ------------------------------------------------------------------------------------------------------------------- Zale Corp.(1) 12,000 580,500 ----------- 28,322,587 8 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Textile/Apparel & Home Furnishings--0.7% Jones Apparel Group, Inc.(1) 65,099 $1,765,810 - ------------------------------------------------------------------------------------------------------------------- Liz Claiborne, Inc. 14,000 526,750 - ------------------------------------------------------------------------------------------------------------------- Mohawk Industries, Inc.(1) 7,900 208,362 - ------------------------------------------------------------------------------------------------------------------- Shaw Industries, Inc. 46,000 710,125 - ------------------------------------------------------------------------------------------------------------------- VF Corp. 16,000 480,000 - ------------------------------------------------------------------------------------------------------------------- Warnaco Group, Inc. (The), Cl. A 11,600 142,825 - ------------------------------------------------------------------------------------------------------------------- WestPoint Stevens, Inc. 12,000 210,000 ---------- 4,043,872 - ------------------------------------------------------------------------------------------------------------------- Consumer Staples--5.7% - ------------------------------------------------------------------------------------------------------------------- Beverages--0.5% Adolph Coors Co., Cl. B 3,500 183,750 - ------------------------------------------------------------------------------------------------------------------- Anheuser-Busch Cos., Inc. 37,800 2,679,075 - ------------------------------------------------------------------------------------------------------------------- Brown-Forman Corp., Cl. B 700 40,075 ---------- 2,902,900 - ------------------------------------------------------------------------------------------------------------------- Broadcasting--1.7% CBS Corp.(1) 38,000 2,429,625 - ------------------------------------------------------------------------------------------------------------------- Comcast Corp., Cl. A Special 101,000 5,106,813 - ------------------------------------------------------------------------------------------------------------------- Cox Communications, Inc., Cl. A(1) 10,000 515,000 - ------------------------------------------------------------------------------------------------------------------- MediaOne Group, Inc.(1) 21,000 1,613,063 ---------- 9,664,501 - ------------------------------------------------------------------------------------------------------------------- Entertainment--0.7% Brinker International, Inc.(1) 85,000 2,040,000 - ------------------------------------------------------------------------------------------------------------------- Darden Restaurants, Inc. 14,600 264,625 - ------------------------------------------------------------------------------------------------------------------- Ruby Tuesday, Inc. 10,000 181,875 - ------------------------------------------------------------------------------------------------------------------- Tricon Global Restaurants, Inc.(1) 27,600 1,066,050 - ------------------------------------------------------------------------------------------------------------------- Wendy's International, Inc. 26,600 548,625 ---------- 4,101,175 - ------------------------------------------------------------------------------------------------------------------- Food--0.4% Agribrands International, Inc.(1) 10,000 460,000 - ------------------------------------------------------------------------------------------------------------------- ConAgra, Inc. 12,500 282,031 - ------------------------------------------------------------------------------------------------------------------- Corn Products International, Inc. 9,900 324,225 - ------------------------------------------------------------------------------------------------------------------- Hormel Foods Corp. 4,000 162,500 - ------------------------------------------------------------------------------------------------------------------- IBP, Inc. 12,000 216,000 - ------------------------------------------------------------------------------------------------------------------- Sysco Corp. 20,800 822,900 ---------- 2,267,656 - ------------------------------------------------------------------------------------------------------------------- Food & Drug Retailers--0.4% Albertson's, Inc. 31,800 1,025,550 - ------------------------------------------------------------------------------------------------------------------- CVS Corp. 26,500 1,058,344 - ------------------------------------------------------------------------------------------------------------------- SUPERVALU, Inc. 7,700 154,000 - ------------------------------------------------------------------------------------------------------------------- Walgreen Co. 5,100 149,175 ---------- 2,387,069 - ------------------------------------------------------------------------------------------------------------------- Household Goods--0.6% Kimberly-Clark Corp. 50,000 3,262,500 Oppenheimer Main Street Growth & Income Fund/VA 9 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Tobacco--1.4% Philip Morris Cos., Inc. 275,000 $ 6,376,563 - ------------------------------------------------------------------------------------------------------------------- R.J. Reynolds Tobacco Holdings, Inc. 44,900 791,363 - ------------------------------------------------------------------------------------------------------------------- UST, Inc. 15,700 395,444 ----------- 7,563,370 - ------------------------------------------------------------------------------------------------------------------- Energy--11.5% - ------------------------------------------------------------------------------------------------------------------- Energy Services--3.0% BJ Services Co.(1) 57,500 2,404,219 - ------------------------------------------------------------------------------------------------------------------- Coastal Corp. 4,600 163,013 - ------------------------------------------------------------------------------------------------------------------- Cooper Cameron Corp.(1) 60,000 2,936,250 - ------------------------------------------------------------------------------------------------------------------- Nabors Industries, Inc.(1) 30,000 928,125 - ------------------------------------------------------------------------------------------------------------------- Noble Drilling Corp.(1) 60,000 1,965,000 - ------------------------------------------------------------------------------------------------------------------- Santa Fe International Corp. 50,000 1,293,750 - ------------------------------------------------------------------------------------------------------------------- Stolt Comex Seaway SA, ADR(1) 315,000 3,465,000 - ------------------------------------------------------------------------------------------------------------------- Transocean Sedco Forex, Inc. 39,000 1,313,813 - ------------------------------------------------------------------------------------------------------------------- Weatherford International, Inc. 50,000 1,996,875 ----------- 16,466,045 - ------------------------------------------------------------------------------------------------------------------- Oil: Domestic--5.2% Amerada Hess Corp. 13,700 777,475 - ------------------------------------------------------------------------------------------------------------------- Burlington Resources, Inc. 37,500 1,239,844 - ------------------------------------------------------------------------------------------------------------------- Chevron Corp. 37,700 3,265,763 - ------------------------------------------------------------------------------------------------------------------- Chieftain International, Inc.(1) 53,600 924,600 - ------------------------------------------------------------------------------------------------------------------- Conoco, Inc., Cl. B 11,000 273,625 - ------------------------------------------------------------------------------------------------------------------- Devon Energy Corp. 25,000 821,875 - ------------------------------------------------------------------------------------------------------------------- EOG Resources, Inc. 35,600 625,225 - ------------------------------------------------------------------------------------------------------------------- Exxon Mobil Corp. 140,288 11,301,952 - ------------------------------------------------------------------------------------------------------------------- Frontier Oil Corp.(1) 61,300 413,775 - ------------------------------------------------------------------------------------------------------------------- Murphy Oil Corp. 21,600 1,239,300 - ------------------------------------------------------------------------------------------------------------------- Newfield Exploration Co.(1) 16,000 428,000 - ------------------------------------------------------------------------------------------------------------------- Noble Affiliates, Inc. 8,000 171,500 - ------------------------------------------------------------------------------------------------------------------- Phillips Petroleum Co. 15,000 705,000 - ------------------------------------------------------------------------------------------------------------------- Stone Energy Corp.(1) 9,700 345,563 - ------------------------------------------------------------------------------------------------------------------- Tesoro Petroleum Corp.(1) 34,000 393,125 - ------------------------------------------------------------------------------------------------------------------- Texaco, Inc. 55,100 2,992,619 - ------------------------------------------------------------------------------------------------------------------- Tosco Corp. 5,000 135,938 - ------------------------------------------------------------------------------------------------------------------- Vastar Resources, Inc. 50,000 2,950,000 ----------- 29,005,179 10 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Oil: International--3.3% Anderson Exploration Ltd.(1) 66,400 $ 791,405 - ------------------------------------------------------------------------------------------------------------------- Beau Canada Exploration Ltd.(1) 308,600 362,482 - ------------------------------------------------------------------------------------------------------------------- Berkley Petroleum Corp.(1) 90,000 786,637 - ------------------------------------------------------------------------------------------------------------------- Canadian 88 Energy Corp. 300,000 414,565 - ------------------------------------------------------------------------------------------------------------------- Canadian Hunter Exploration Ltd.(1) 15,000 246,148 - ------------------------------------------------------------------------------------------------------------------- Canadian Natural Resources Ltd.(1) 70,000 1,704,899 - ------------------------------------------------------------------------------------------------------------------- Encal Energy Ltd.(1) 70,000 319,215 - ------------------------------------------------------------------------------------------------------------------- Newport Petroleum Corp.(1) 152,500 347,716 - ------------------------------------------------------------------------------------------------------------------- Paramount Resources Ltd. 49,900 586,126 - ------------------------------------------------------------------------------------------------------------------- Prize Energy, Inc.(1) 57,692 11,959 - ------------------------------------------------------------------------------------------------------------------- Ranger Oil Ltd.(1) 85,300 265,218 - ------------------------------------------------------------------------------------------------------------------- Rio Alto Exploration Ltd.(1) 29,300 412,990 - ------------------------------------------------------------------------------------------------------------------- Royal Dutch Petroleum Co., NY Shares 173,100 10,461,731 - ------------------------------------------------------------------------------------------------------------------- Talisman Energy, Inc.(1) 50,000 1,274,788 - ------------------------------------------------------------------------------------------------------------------- Ulster Petroleums Ltd.(1) 35,000 310,751 ----------- 18,296,630 - ------------------------------------------------------------------------------------------------------------------- Financial--9.2% - ------------------------------------------------------------------------------------------------------------------- Banks--2.7% Bank of America Corp. 30,000 1,505,625 - ------------------------------------------------------------------------------------------------------------------- BB&T Corp. 11,600 317,550 - ------------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. 70,000 5,438,125 - ------------------------------------------------------------------------------------------------------------------- First Union Corp. 41,200 1,351,875 - ------------------------------------------------------------------------------------------------------------------- M&T Bank Corp. 100 41,425 - ------------------------------------------------------------------------------------------------------------------- National City Corp. 6,000 142,125 - ------------------------------------------------------------------------------------------------------------------- Northern Trust Corp. 10,600 561,800 - ------------------------------------------------------------------------------------------------------------------- Old Kent Financial Corp. 17,000 601,375 - ------------------------------------------------------------------------------------------------------------------- PNC Bank Corp. 32,000 1,424,000 - ------------------------------------------------------------------------------------------------------------------- Prosperity Bancshares, Inc. 67,500 1,080,000 - ------------------------------------------------------------------------------------------------------------------- TCF Financial Corp. 3,000 74,625 - ------------------------------------------------------------------------------------------------------------------- Wachovia Corp. 6,800 462,400 - ------------------------------------------------------------------------------------------------------------------- Wells Fargo Co. 42,800 1,730,725 - ------------------------------------------------------------------------------------------------------------------- Zions Bancorp 3,000 177,563 ----------- 14,909,213 Oppenheimer Main Street Growth & Income Fund/VA 11 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Diversified Financial--3.6% AMBAC Financial Group, Inc. 7,000 $ 365,313 - ------------------------------------------------------------------------------------------------------------------- Bear Stearns Cos., Inc. 8,500 363,375 - ------------------------------------------------------------------------------------------------------------------- Citigroup, Inc. 134,500 7,473,156 - ------------------------------------------------------------------------------------------------------------------- Financial Security Assurance Holdings Ltd. 7,000 364,875 - ------------------------------------------------------------------------------------------------------------------- Freddie Mac 26,800 1,261,275 - ------------------------------------------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The) 18,600 1,751,888 - ------------------------------------------------------------------------------------------------------------------- Household International, Inc. 17,000 633,250 - ------------------------------------------------------------------------------------------------------------------- MGIC Investment Corp. 21,500 1,294,031 - ------------------------------------------------------------------------------------------------------------------- Morgan Stanley Dean Witter & Co. 17,300 2,469,575 - ------------------------------------------------------------------------------------------------------------------- PaineWebber Group, Inc. 7,400 287,213 - ------------------------------------------------------------------------------------------------------------------- PMI Group, Inc. (The) 30,000 1,464,375 - ------------------------------------------------------------------------------------------------------------------- Providian Financial Corp. 19,000 1,730,188 - ------------------------------------------------------------------------------------------------------------------- SEI Investments Co. 2,000 238,031 ----------- 19,696,545 - ------------------------------------------------------------------------------------------------------------------- Insurance--2.4% Aetna, Inc. 9,000 502,313 - ------------------------------------------------------------------------------------------------------------------- AFLAC, Inc. 6,300 297,281 - ------------------------------------------------------------------------------------------------------------------- Allmerica Financial Corp. 16,000 890,000 - ------------------------------------------------------------------------------------------------------------------- Allstate Corp. 48,000 1,152,000 - ------------------------------------------------------------------------------------------------------------------- American General Corp. 11,400 864,975 - ------------------------------------------------------------------------------------------------------------------- AXA Financial, Inc. 46,000 1,558,250 - ------------------------------------------------------------------------------------------------------------------- Cigna Corp. 32,000 2,578,000 - ------------------------------------------------------------------------------------------------------------------- Cincinnati Financial Corp. 9,700 302,519 - ------------------------------------------------------------------------------------------------------------------- Conseco, Inc. 14,600 260,975 - ------------------------------------------------------------------------------------------------------------------- Hartford Life, Inc., Cl. A 10,000 440,000 - ------------------------------------------------------------------------------------------------------------------- Jefferson-Pilot Corp. 9,500 648,375 - ------------------------------------------------------------------------------------------------------------------- Lincoln National Corp. 20,000 800,000 - ------------------------------------------------------------------------------------------------------------------- Loews Corp. 15,100 916,381 - ------------------------------------------------------------------------------------------------------------------- Marsh & McLennan Cos., Inc. 8,000 765,500 - ------------------------------------------------------------------------------------------------------------------- Progressive Corp. 5,200 380,250 - ------------------------------------------------------------------------------------------------------------------- Quantum Corp.-DLT & Storage Systems(1) 6,000 90,750 - ------------------------------------------------------------------------------------------------------------------- Radian Group, Inc. 4,000 191,000 - ------------------------------------------------------------------------------------------------------------------- UnumProvident Corp. 12,000 384,750 ----------- 13,023,319 - ------------------------------------------------------------------------------------------------------------------- Savings & Loans--0.5% Dime Bancorp, Inc. 15,000 226,875 - ------------------------------------------------------------------------------------------------------------------- Golden State Bancorp, Inc.(1) 30,000 517,500 - ------------------------------------------------------------------------------------------------------------------- Golden West Financial Corp. 5,000 167,500 - ------------------------------------------------------------------------------------------------------------------- Greenpoint Financial Corp. 13,000 309,563 - ------------------------------------------------------------------------------------------------------------------- Washington Mutual, Inc. 62,000 1,612,000 - ------------------------------------------------------------------------------------------------------------------- Webster Financial Corp. 5,000 117,813 ----------- 2,951,251 12 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Healthcare--7.4% - ------------------------------------------------------------------------------------------------------------------- Healthcare/Drugs--6.4% Abbott Laboratories 51,100 $ 1,855,569 - ------------------------------------------------------------------------------------------------------------------- Alpharma, Inc. 5,000 153,750 - ------------------------------------------------------------------------------------------------------------------- ALZA Corp., Cl. A(1) 5,000 173,125 - ------------------------------------------------------------------------------------------------------------------- Amgen, Inc.(1) 84,200 5,057,263 - ------------------------------------------------------------------------------------------------------------------- Andrx Corp.(1) 10,000 423,125 - ------------------------------------------------------------------------------------------------------------------- Biogen, Inc.(1) 19,000 1,605,500 - ------------------------------------------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 98,500 6,322,469 - ------------------------------------------------------------------------------------------------------------------- Johnson & Johnson 92,200 8,586,125 - ------------------------------------------------------------------------------------------------------------------- Mallinckrodt, Inc. 4,000 127,250 - ------------------------------------------------------------------------------------------------------------------- Medimmune, Inc.(1) 6,000 995,250 - ------------------------------------------------------------------------------------------------------------------- Merck & Co., Inc. 88,600 5,941,738 - ------------------------------------------------------------------------------------------------------------------- Millennium Pharmaceuticals, Inc.(1) 6,000 732,000 - ------------------------------------------------------------------------------------------------------------------- Pharmacia & Upjohn, Inc. 16,800 756,000 - ------------------------------------------------------------------------------------------------------------------- Schering-Plough Corp. 57,500 2,425,781 - ------------------------------------------------------------------------------------------------------------------- Trigon Healthcare, Inc.(1) 7,500 221,250 ----------- 35,376,195 - ------------------------------------------------------------------------------------------------------------------- Healthcare/Supplies & Services--1.0% Alberto-Culver Co., Cl. B 2,000 51,625 - ------------------------------------------------------------------------------------------------------------------- Allergan, Inc. 15,200 756,200 - ------------------------------------------------------------------------------------------------------------------- Biomet, Inc. 7,000 280,000 - ------------------------------------------------------------------------------------------------------------------- Cardinal Health, Inc. 33,000 1,579,875 - ------------------------------------------------------------------------------------------------------------------- Guidant Corp.(1) 2,100 98,700 - ------------------------------------------------------------------------------------------------------------------- PacifiCare Health Systems, Inc.(1) 2,600 137,800 - ------------------------------------------------------------------------------------------------------------------- PerkinElmer, Inc. 5,200 216,775 - ------------------------------------------------------------------------------------------------------------------- Shared Medical Systems Corp. 1,000 50,938 - ------------------------------------------------------------------------------------------------------------------- United Healthcare Corp. 31,600 1,678,750 - ------------------------------------------------------------------------------------------------------------------- VISX, Inc.(1) 8,000 414,000 ----------- 5,264,663 - ------------------------------------------------------------------------------------------------------------------- Technology--20.8% - ------------------------------------------------------------------------------------------------------------------- Computer Hardware--4.9% Adaptec, Inc.(1) 12,000 598,500 - ------------------------------------------------------------------------------------------------------------------- Apple Computer, Inc.(1) 17,000 1,747,813 - ------------------------------------------------------------------------------------------------------------------- Cabletron Systems, Inc.(1) 42,000 1,092,000 - ------------------------------------------------------------------------------------------------------------------- Electronics for Imaging, Inc.(1) 14,000 813,750 - ------------------------------------------------------------------------------------------------------------------- Gateway, Inc.(1) 8,000 576,500 - ------------------------------------------------------------------------------------------------------------------- Hewlett-Packard Co. 50,000 5,696,875 - ------------------------------------------------------------------------------------------------------------------- International Business Machines Corp. 109,000 11,772,000 - ------------------------------------------------------------------------------------------------------------------- KLA Instruments Corp.(1) 4,800 534,600 - ------------------------------------------------------------------------------------------------------------------- Lexmark International Group, Inc., Cl. A(1) 15,300 1,384,650 - ------------------------------------------------------------------------------------------------------------------- NCR Corp.(1) 5,000 189,375 - ------------------------------------------------------------------------------------------------------------------- Pitney Bowes, Inc. 15,400 744,013 - ------------------------------------------------------------------------------------------------------------------- Seagate Technology, Inc.(1) 31,000 1,443,438 Oppenheimer Main Street Growth & Income Fund/VA 13 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Computer Hardware (continued) Xircom, Inc.(1) 10,000 $ 750,000 ----------- 27,343,514 - ------------------------------------------------------------------------------------------------------------------- Computer Services--0.7% Automatic Data Processing, Inc. 28,300 1,524,663 - ------------------------------------------------------------------------------------------------------------------- DST Systems, Inc.(1) 3,000 228,938 - ------------------------------------------------------------------------------------------------------------------- First Data Corp. 33,000 1,627,313 - ------------------------------------------------------------------------------------------------------------------- Keane, Inc.(1) 6,000 190,500 ----------- 3,571,414 - ------------------------------------------------------------------------------------------------------------------- Computer Software--6.7% Adobe Systems, Inc. 8,000 538,000 - ------------------------------------------------------------------------------------------------------------------- BMC Software, Inc.(1) 12,900 1,031,194 - ------------------------------------------------------------------------------------------------------------------- Cadence Design Systems, Inc.(1) 9,000 216,000 - ------------------------------------------------------------------------------------------------------------------- Computer Sciences Corp.(1) 4,000 378,500 - ------------------------------------------------------------------------------------------------------------------- Compuware Corp.(1) 29,000 1,080,250 - ------------------------------------------------------------------------------------------------------------------- Electronic Arts, Inc.(1) 4,000 336,000 - ------------------------------------------------------------------------------------------------------------------- Electronic Data Systems Corp. 31,500 2,108,531 - ------------------------------------------------------------------------------------------------------------------- Legato Systems, Inc.(1) 10,000 688,125 - ------------------------------------------------------------------------------------------------------------------- Microsoft Corp.(1) 228,150 26,636,513 - ------------------------------------------------------------------------------------------------------------------- Peoplesoft, Inc.(1) 20,000 426,250 - ------------------------------------------------------------------------------------------------------------------- Siebel Systems, Inc.(1) 10,000 840,000 - ------------------------------------------------------------------------------------------------------------------- Synopsys, Inc.(1) 3,400 226,950 - ------------------------------------------------------------------------------------------------------------------- Veritas Software Corp.(1) 18,000 2,576,250 ----------- 37,082,563 - ------------------------------------------------------------------------------------------------------------------- Communications Equipment--2.3% Cisco Systems, Inc.(1) 94,000 10,069,750 - ------------------------------------------------------------------------------------------------------------------- General Instrument Corp.(1) 11,000 935,000 - ------------------------------------------------------------------------------------------------------------------- Harmonic, Inc.(1) 4,000 379,750 - ------------------------------------------------------------------------------------------------------------------- Tellabs, Inc.(1) 17,400 1,116,863 ----------- 12,501,363 - ------------------------------------------------------------------------------------------------------------------- Electronics--5.5% Advanced Micro Devices, Inc. 12,400 358,825 - ------------------------------------------------------------------------------------------------------------------- Analog Devices, Inc.(1) 18,000 1,674,000 - ------------------------------------------------------------------------------------------------------------------- Cypress Semiconductor Corp.(1) 36,000 1,165,500 - ------------------------------------------------------------------------------------------------------------------- Grainger (W.W.), Inc. 17,000 812,813 - ------------------------------------------------------------------------------------------------------------------- Intel Corp. 187,000 15,392,438 - ------------------------------------------------------------------------------------------------------------------- Lam Research Corp.(1) 10,000 1,115,625 - ------------------------------------------------------------------------------------------------------------------- Micron Technology, Inc. 40,000 3,110,000 - ------------------------------------------------------------------------------------------------------------------- Motorola, Inc. 9,300 1,369,425 - ------------------------------------------------------------------------------------------------------------------- National Semiconductor Corp.(1) 34,700 1,485,594 - ------------------------------------------------------------------------------------------------------------------- QLogic Corp.(1) 6,000 959,250 - ------------------------------------------------------------------------------------------------------------------- RF Micro Devices, Inc.(1) 7,000 479,063 - ------------------------------------------------------------------------------------------------------------------- Teradyne, Inc.(1) 14,500 957,000 - ------------------------------------------------------------------------------------------------------------------- Waters Corp.(1) 9,400 498,200 - ------------------------------------------------------------------------------------------------------------------- Xilinx, Inc.(1) 30,000 1,364,063 ----------- 30,741,796 14 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Photography--0.7% Eastman Kodak Co. 46,000 $3,047,500 - ------------------------------------------------------------------------------------------------------------------- Xerox Corp. 45,000 1,020,938 ---------- 4,068,438 - ------------------------------------------------------------------------------------------------------------------- Transportation--1.4% - ------------------------------------------------------------------------------------------------------------------- Air Transportation--0.8% Alaska Air Group, Inc.(1) 16,000 562,000 - ------------------------------------------------------------------------------------------------------------------- Continental Airlines, Inc., Cl. B(1) 51,558 2,287,886 - ------------------------------------------------------------------------------------------------------------------- Delta Air Lines, Inc. 25,000 1,245,313 - ------------------------------------------------------------------------------------------------------------------- Northwest Airlines Corp., Cl. A(1) 3,000 66,750 - ------------------------------------------------------------------------------------------------------------------- UAL Corp.(1) 2,900 224,931 ---------- 4,386,880 - ------------------------------------------------------------------------------------------------------------------- Railroads & Truckers--0.6% Burlington Northern Santa Fe Corp. 35,800 868,150 - ------------------------------------------------------------------------------------------------------------------- CNF Transportation, Inc. 10,000 345,000 - ------------------------------------------------------------------------------------------------------------------- Navistar International Corp.(1) 2,000 94,750 - ------------------------------------------------------------------------------------------------------------------- Rollins Truck Leasing Co. 10,000 119,375 - ------------------------------------------------------------------------------------------------------------------- Union Pacific Corp. 39,600 1,727,550 - ------------------------------------------------------------------------------------------------------------------- USFreightways Corp. 2,000 95,750 - ------------------------------------------------------------------------------------------------------------------- XTRA Corp.(1) 5,000 213,125 ---------- 3,463,700 - ------------------------------------------------------------------------------------------------------------------- Utilities--2.4% - ------------------------------------------------------------------------------------------------------------------- Electric Utilities--2.4% Allegheny Energy, Inc. 20,000 538,750 - ------------------------------------------------------------------------------------------------------------------- Ameren Corp. 13,300 435,575 - ------------------------------------------------------------------------------------------------------------------- Calpine Corp.(1) 6,000 384,000 - ------------------------------------------------------------------------------------------------------------------- Carolina Power & Light Co. 3,500 106,531 - ------------------------------------------------------------------------------------------------------------------- Conectiv, Inc. 4,000 67,250 - ------------------------------------------------------------------------------------------------------------------- Consolidated Edison Co. of New York, Inc. 12,000 414,000 - ------------------------------------------------------------------------------------------------------------------- DTE Energy Co. 16,700 523,963 - ------------------------------------------------------------------------------------------------------------------- Duke Energy Corp. 11,000 551,375 - ------------------------------------------------------------------------------------------------------------------- Edison International 5,500 144,031 - ------------------------------------------------------------------------------------------------------------------- Energy East Corp. 30,000 624,375 - ------------------------------------------------------------------------------------------------------------------- Entergy Corp. 19,300 496,975 - ------------------------------------------------------------------------------------------------------------------- FirstEnergy Corp. 30,000 680,625 - ------------------------------------------------------------------------------------------------------------------- Florida Progress Corp. 16,000 677,000 - ------------------------------------------------------------------------------------------------------------------- FPL Group, Inc. 21,600 924,750 - ------------------------------------------------------------------------------------------------------------------- GPU, Inc. 15,000 449,063 - ------------------------------------------------------------------------------------------------------------------- IPALCO Enterprises, Inc. 10,000 170,625 - ------------------------------------------------------------------------------------------------------------------- Northeast Utilities Co. 10,400 213,850 - ------------------------------------------------------------------------------------------------------------------- OGE Energy Corp. 9,900 188,100 - ------------------------------------------------------------------------------------------------------------------- Peco Energy Co. 19,600 681,100 - ------------------------------------------------------------------------------------------------------------------- PG&E Corp. 31,300 641,650 - ------------------------------------------------------------------------------------------------------------------- PP&L Resources, Inc. 25,500 583,313 Oppenheimer Main Street Growth & Income Fund/VA 15 - -------------------------------------------------------------------------------- Statement of Investments (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ------------------------------------------------------------------------------------------------------------------- Electric Utilities (continued) Public Service Enterprise Group, Inc. 25,000 $ 870,313 - ------------------------------------------------------------------------------------------------------------------- Southern Co. 32,300 759,050 - ------------------------------------------------------------------------------------------------------------------- Texas Utilities Co. 16,000 569,000 - ------------------------------------------------------------------------------------------------------------------- TNP Enterprises, Inc. 18,000 742,500 - ------------------------------------------------------------------------------------------------------------------- Unicom Corp. 26,000 871,000 - ------------------------------------------------------------------------------------------------------------------- UtiliCorp United, Inc. 3,000 58,313 ------------ 13,367,077 - ------------------------------------------------------------------------------------------------------------------- Gas Utilities--0.0% NICOR, Inc. 1,200 39,000 - ------------------------------------------------------------------------------------------------------------------- Sempra Energy 8,700 151,163 ------------ 190,163 ------------ Total Common Stocks (Cost $460,541,934) 525,168,172 =================================================================================================================== Other Securities--0.5% - ------------------------------------------------------------------------------------------------------------------- Reliant Energy, Inc., 7% Automatic Common Exchange Securities for Time Warner, Inc. Common Stock (Cost $1,170,994) 25,000 3,012,500 Principal Amount =================================================================================================================== Repurchase Agreements--7.3% - ------------------------------------------------------------------------------------------------------------------- Repurchase agreement with PaineWebber, Inc., 3%, dated 12/31/99, to be repurchased at $40,310,075 on 1/3/00, collateralized by U.S. Treasury Nts., 5.625%-6.125%, 11/30/00-12/31/01, with a value of $41,163,751 (Cost $40,300,000) $40,300,000 40,300,000 - ------------------------------------------------------------------------------------------------------------------- Total Investments, at Value (Cost $502,012,928) 102.4% 568,480,672 - ------------------------------------------------------------------------------------------------------------------- Liabilities in Excess of Other Assets (2.4) (13,169,640) ----------- ------------ Net Assets 100.0% $555,311,032 =========== ============
1. Non-income producing security. 2. Identifies issues considered to be illiquid or restricted--See Note 7 of Notes to Financial Statements. See accompanying Notes to Financial Statements. 16 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Assets and Liabilities December 31, 1999 - -------------------------------------------------------------------------------- =============================================================================================== Assets Investments, at value (cost $502,012,928)--see accompanying statement $568,480,672 - ----------------------------------------------------------------------------------------------- Cash 815,492 - ----------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold 1,561,996 Shares of beneficial interest sold 1,353,452 Interest and dividends 408,004 Other 5,662 ------------ Total assets 572,625,278 =============================================================================================== Liabilities Payables and other liabilities: Investments purchased 16,455,193 Shares of beneficial interest redeemed 757,476 Transfer and shareholder servicing agent fees 186 Other 101,391 ------------ Total liabilities 17,314,246 =============================================================================================== Net Assets $555,311,032 ============ =============================================================================================== Composition of Net Assets Paid-in capital $454,999,711 - ----------------------------------------------------------------------------------------------- Undistributed net investment income 2,471,016 - ----------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 31,372,614 - ----------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 66,467,691 ------------ Net assets--applicable to 22,545,003 shares of beneficial interest outstanding $555,311,032 ============ =============================================================================================== Net Asset Value, Redemption Price Per Share and Offering Price Per Share $24.63
See accompanying Notes to Financial Statements. Oppenheimer Main Street Growth & Income Fund/VA 17 - -------------------------------------------------------------------------------- Statement of Operations For the Year Ended December 31, 1999 - -------------------------------------------------------------------------------- ================================================================================================ Investment Income Dividends (net of foreign withholding taxes of $9,543) $ 4,116,206 - ------------------------------------------------------------------------------------------------ Interest 1,409,101 ----------- Total income 5,525,307 ================================================================================================ Expenses Management fees 2,864,220 - ------------------------------------------------------------------------------------------------ Custodian fees and expenses 102,216 - ------------------------------------------------------------------------------------------------ Trustees' compensation 2,364 - ------------------------------------------------------------------------------------------------ Transfer and shareholder servicing agent fees 2,103 - ------------------------------------------------------------------------------------------------ Other 85,634 ----------- Total expenses 3,056,537 Less expenses paid indirectly (5,133) ----------- Net expenses 3,051,404 ================================================================================================ Net Investment Income 2,473,903 ================================================================================================ Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments (including premiums on options exercised) 37,106,529 Closing and expiration of option contracts written (1,299,413) Foreign currency transactions (2,141) ----------- Net realized gain 35,804,975 - ------------------------------------------------------------------------------------------------ Net change in unrealized appreciation or depreciation on: Investments 41,728,791 Translation of assets and liabilities denominated in foreign currencies 150,803 ----------- Net change 41,879,594 ----------- Net realized and unrealized gain 77,684,569 ================================================================================================ Net Increase in Net Assets Resulting from Operations $80,158,472 ===========
See accompanying Notes to Financial Statements. 18 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statements of Changes in Net Assets - --------------------------------------------------------------------------------
Year Ended December 31, 1999 1998 ================================================================================================== Operations Net investment income $ 2,473,903 $ 1,744,608 - -------------------------------------------------------------------------------------------------- Net realized gain (loss) 35,804,975 (1,957,235) - -------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 41,879,594 6,335,797 ------------ ------------ Net increase in net assets resulting from operations 80,158,472 6,123,170 ================================================================================================== Dividends and/or Distributions to Shareholders Dividends from net investment income (1,427,635) (449,201) - -------------------------------------------------------------------------------------------------- Distributions from net realized gain (2,405,256) (9,891,403) ================================================================================================== Beneficial Interest Transactions Net increase in net assets resulting from beneficial interest transactions 170,632,137 157,202,998 ================================================================================================== Net Assets Total increase 246,957,718 152,985,564 - -------------------------------------------------------------------------------------------------- Beginning of period 308,353,314 155,367,750 ------------ ------------ End of period (including undistributed net investment income of $2,471,016 and $1,425,924, respectively) $555,311,032 $308,353,314 ============ ============
See accompanying Notes to Financial Statements. Oppenheimer Main Street Growth & Income Fund/VA 19 - -------------------------------------------------------------------------------- Financial Highlights - --------------------------------------------------------------------------------
Year Ended December 31, 1999 1998 1997 1996 1995(1) =========================================================================================================================== Per Share Operating Data Net asset value, beginning of period $20.48 $20.58 $16.37 $12.51 $10.00 - --------------------------------------------------------------------------------------------------------------------------- Income from investment operations: Net investment income .11 .13 .19 .14 .01 Net realized and unrealized gain 4.29 .92 4.91 3.91 2.52 - --------------------------------------------------------------------------------------------------------------------------- Total income from investment operations 4.40 1.05 5.10 4.05 2.53 - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.09) (.05) (.17) (.14) (.02) Distributions from net realized gain (.16) (1.10) (.72) (.05) -- - --------------------------------------------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.25) (1.15) (.89) (.19) (.02) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $24.63 $20.48 $20.58 $16.37 $12.51 ====== ====== ====== ====== ====== =========================================================================================================================== Total Return, at Net Asset Value(2) 21.71% 4.70% 32.48% 32.51% 25.25% =========================================================================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $555,311 $308,353 $155,368 $47,009 $4,288 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $391,063 $234,306 $ 94,906 $21,562 $1,809 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(3) Net investment income 0.63% 0.74% 1.15% 1.41% 0.50% Expenses 0.78% 0.79%(4) 0.83%(4) 1.00%(4) 2.07%(4) - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(5) 118% 86% 79% 113% 24%
1. For the period from July 5, 1995 (commencement of operations) to December 31, 1995. 2. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period (or commencement of operations), 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. 3. Annualized for periods less than one full year. 4. Expense ratio has not been grossed up to reflect the effect of expenses paid indirectly. 5. 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 $585,193,287 and $443,805,600, respectively. See accompanying Notes to Financial Statements. 20 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Notes to Financial Statements - -------------------------------------------------------------------------------- ================================================================================ 1. Significant Accounting Policies Oppenheimer Main Street Growth & Income Fund/VA (the Fund), formerly known as Oppenheimer Growth & Income 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 high total return (which includes growth in the value of its shares as well as current income) from equity and debt securities. 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. - -------------------------------------------------------------------------------- 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. Oppenheimer Main Street Growth & Income Fund/VA 21 - -------------------------------------------------------------------------------- Notes to Financial Statements (Continued) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. Significant Accounting Policies (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 $1,176. 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 9,936,050 $224,240,741 9,181,075 $189,060,690 Dividends and/or distributions reinvested 186,334 3,832,892 468,325 10,340,604 Redeemed (2,632,085) (57,441,496) (2,145,877) (42,198,296) ---------- ------------ ---------- ------------ Net increase 7,490,299 $170,632,137 7,503,523 $157,202,998 ========== ============ ========== ============
================================================================================ 3. Unrealized Gains and Losses on Securities As of December 31, 1999, net unrealized appreciation on securities of $66,467,744 was composed of gross appreciation of $85,539,274, and gross depreciation of $19,071,530. ================================================================================ 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 0.73% 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. 22 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- 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. 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 Put Options -------------------------------- -------------------------- Number of Amount of Number of Amount of Options Premiums Options Premiums - -------------------------------------------------------------------------------------------------------------------------- Options outstanding as of December 31, 1998 1,325 $ 570,160 100 $ 41,573 Options written 6,829 5,027,060 -- -- Options closed or expired (7,593) (5,445,702) -- -- Options exercised (561) (151,518) (100) (41,573) ------ ----------- ---- -------- Options outstanding as of December 31, 1999 -- $ -- -- $ -- ====== =========== ==== ========
Oppenheimer Main Street Growth & Income Fund/VA 23 - -------------------------------------------------------------------------------- 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 $38,191, which represents 0.01% of the Fund's net assets, of which $38,191 is considered restricted. Information concerning restricted securities is as follows:
Valuation Per Unit as of Acquisition Cost Per December 31, Security Dates Unit 1999 - ------------------------------------------------------------------------------------------------------- Intermedia Communications, Inc. 9/29/98-12/29/98 $12.51-$21.54 $31.05
24 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Independent Auditors' Report - -------------------------------------------------------------------------------- ================================================================================ To the Board of Trustees and Shareholders of Oppenheimer Main Street Growth & Income Fund/VA: We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Oppenheimer Main Street Growth & Income/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 July 5, 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 Main Street Growth & Income 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 Oppenheimer Main Street Growth & Income Fund/VA 25 - -------------------------------------------------------------------------------- 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 $0.2470 per share were paid to shareholders on March 22, 1999, of which $0.1550 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 18.90% 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. 26 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Oppenheimer Main Street(R) Growth & Income 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 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 Charles Albers, Vice President Nikolaos Monoyios, 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 Main Street Growth & Income Fund/VA. This report must be preceded or accompanied by a Prospectus of Oppenheimer Main Street Growth & Income 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. Oppenheimer Main Street Growth & Income Fund/VA 27 -----END PRIVACY-ENHANCED MESSAGE-----