-----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, BoZOlV0Pu9rCnoa+yplmev9mgpqjBoPTRyTsKa2omzA41XgtvSS0SEJCAQIe2Pmu 2DqajW7g2lhxUbA7bUcXPg== 0001086144-99-000042.txt : 19990820 0001086144-99-000042.hdr.sgml : 19990820 ACCESSION NUMBER: 0001086144-99-000042 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990819 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: 99695735 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 SAR ------------------------------- Semiannual Report June 30, 1999 ------------------------------- O P P E N H E I M E R Main Street(R) Growth & Income Fund/VA A Series of Oppenheimer Variable Account Funds [graphic of traffic light] [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 Nikolaos Monoyios, Co-Portfolio Manager For the six-month period that ended June 30, 1999, Oppenheimer Main Street Growth & Income Fund provided a cumulative total return of 14.64%.(1) Positive conditions in the U.S. stock market were one factor supporting the Fund's positive returns. Another important factor was the Fund's stock selection process, which enabled us to add value to the portfolio. The most notable development within the Fund over the past six months was the arrival of a new management team, consisting of Charles Albers and myself, Nikolaos Monoyios. As of May 1, 1999, when we became the Fund's new portfolio managers, we adopted the disciplined investment process that we have developed together over the past 19 years. Our investment approach combines technical and fundamental analysis to uncover stocks that we believe are poised for capital appreciation. On the technical side, we have developed sophisticated mathematical models that evaluate statistics related to more than 2,000 individual stocks. These computer programs look at a variety of data to determine which areas of the stock market offer the best prospects. For example, the models help us decide whether to favor growth stocks or value stocks, large-cap stocks or smaller stocks, foreign stocks or domestic stocks, etc. The models also suggest which industries and market sectors may contain the most attractive investment opportunities. They also take into account special considerations such as the effects of spin-offs, stock buy-backs, new stock offerings, and changes in dividend policy. After further quantitative analysis, we assign a ranking to each of the 2,000 stocks according to its prospects over the next six to 12 months. After the computer models have completed their work, we look carefully at the stocks in the top 10% of the models' rankings. We evaluate such factors as each company's quality of management, competitive forces and legal or accounting issues. Consistent with the Fund's new investment style, we have begun to make a number of portfolio changes that we hope will result in improved performance. In addition, we have increased the number of securities in the portfolio, from approximately 120 when we took over as portfolio managers to about 240 at the end of June. Our computer models have continued to favor large-cap quality growth stocks, which have outperformed most other stock market sectors by a significant margin over the past several years. Accordingly, we have emphasized quality large-cap companies such as Wal-Mart Stores, Inc., Merck & Co., Inc. and AT&T Corp.(2) Although we have maintained our focus on large-capitalization growth stocks, we are aware that smaller stocks and value-oriented stocks rallied strongly in April, May and much of June. In our view, it is too early to determine whether this shift in market leadership will persist. While some of our models' indicators suggest that this may, indeed, be the beginning of a lasting change in the market, we need more evidence before we restructure the portfolio. Nonetheless, we have begun to move the portfolio toward a more value-oriented stance by establishing a number of smaller positions in economically sensitive stocks that we believe will perform well in the prevailing economic environment. Finally, we would like to thank you for your continued participation in Oppenheimer Main Street Growth & Income Fund/VA. We look forward to helping you achieve your goals in a way that is consistent with OppenheimerFunds' philosophy of being The Right Way to Invest. 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 contact your financial advisor, call us at 1-800-525-7048 or visit our website, www.oppenheimerfunds.com. 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. Performance is not annualized and would have been lower if such charges were taken into account. 2. The Fund's portfolio is subject to change. 2 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments June 30, 1999 (Unaudited) - --------------------------------------------------------------------------------
Market Value Shares Note 1 ================================================================================================================================== Common Stocks--92.7% ================================================================================================================================== Basic Materials--0.5% - ---------------------------------------------------------------------------------------------------------------------------------- Chemicals--0.3% Dexter Corp. 7,000 $ 285,687 - ---------------------------------------------------------------------------------------------------------------------------------- Lafarge Corp. 12,000 425,250 - ---------------------------------------------------------------------------------------------------------------------------------- Lone Star Industries, Inc. 10,000 375,625 ------------ 1,086,562 - ---------------------------------------------------------------------------------------------------------------------------------- Metals--0.2% Reliance Steel & Aluminum Co. 10,000 390,000 - ---------------------------------------------------------------------------------------------------------------------------------- Ryerson Tull, Inc. 13,000 293,312 ------------ 683,312 ================================================================================================================================== Capital Goods--9.5% - ---------------------------------------------------------------------------------------------------------------------------------- Aerospace/Defense--0.4% General Dynamics Corp. 6,000 411,000 - ---------------------------------------------------------------------------------------------------------------------------------- Gulfstream Aerospace Corp.(1) 15,000 1,013,437 ------------ 1,424,437 - ---------------------------------------------------------------------------------------------------------------------------------- Electrical Equipment--4.9% CommScope, Inc.(1) 65,000 1,998,750 - ---------------------------------------------------------------------------------------------------------------------------------- Conexant Systems, Inc.(1) 4,700 272,894 - ---------------------------------------------------------------------------------------------------------------------------------- Emerson Electric Co. 30,000 1,886,250 - ---------------------------------------------------------------------------------------------------------------------------------- General Electric Co. 98,500 11,130,500 - ---------------------------------------------------------------------------------------------------------------------------------- Honeywell, Inc. 8,000 927,000 - ---------------------------------------------------------------------------------------------------------------------------------- Raychem Corp. 40,000 1,480,000 - ---------------------------------------------------------------------------------------------------------------------------------- Rockwell International Corp. 17,900 1,087,425 - ---------------------------------------------------------------------------------------------------------------------------------- Symbol Technologies, Inc. 8,850 326,344 ------------ 19,109,163 - ---------------------------------------------------------------------------------------------------------------------------------- Industrial Services--0.7% Coflexip SA, Sponsored ADR 62,500 2,718,750 - ---------------------------------------------------------------------------------------------------------------------------------- SEI Investments Co. 1,000 88,250 - ---------------------------------------------------------------------------------------------------------------------------------- Valassis Communications, Inc.(1) 3,000 109,875 ------------ 2,916,875 - ---------------------------------------------------------------------------------------------------------------------------------- Manufacturing--3.5% Albany International Corp., Cl. A 8,000 166,000 - ---------------------------------------------------------------------------------------------------------------------------------- AlliedSignal, Inc. 35,000 2,205,000 - ---------------------------------------------------------------------------------------------------------------------------------- American Standard Cos., Inc.(1) 75,000 3,600,000 - ---------------------------------------------------------------------------------------------------------------------------------- Avery-Dennison Corp. 30,000 1,811,250 - ---------------------------------------------------------------------------------------------------------------------------------- Briggs & Stratton Corp. 4,000 231,000 - ---------------------------------------------------------------------------------------------------------------------------------- Mettler-Toledo International, Inc.(1) 6,000 148,875 - ---------------------------------------------------------------------------------------------------------------------------------- Minnesota Mining & Manufacturing Co. 13,300 1,156,269 - ---------------------------------------------------------------------------------------------------------------------------------- Tyco International Ltd. 20,500 1,942,375 - ---------------------------------------------------------------------------------------------------------------------------------- United Technologies Corp. 36,000 2,580,750 ------------ 13,841,519 Oppenheimer Main Street Growth & Income Fund/VA 3 - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 ================================================================================================================================== Communication Services--9.5% - ---------------------------------------------------------------------------------------------------------------------------------- Telecommunications: Long Distance--3.2% ALLTELL Corp. 4,600 $ 328,900 - ---------------------------------------------------------------------------------------------------------------------------------- AT&T Corp. 155,000 8,650,937 - ---------------------------------------------------------------------------------------------------------------------------------- Qwest Communications International, Inc.(1) 27,000 892,687 - ---------------------------------------------------------------------------------------------------------------------------------- Sprint Corp. (Fon Group) 50,000 2,640,625 ------------- 12,513,149 - ---------------------------------------------------------------------------------------------------------------------------------- Telephone Utilities--6.3% Ameritech Corp. 82,500 6,063,750 - ---------------------------------------------------------------------------------------------------------------------------------- BellSouth Corp. 147,000 6,890,625 - ---------------------------------------------------------------------------------------------------------------------------------- GTE Corp. 134,800 10,211,100 - ---------------------------------------------------------------------------------------------------------------------------------- SBC Communications, Inc. 23,000 1,334,000 ------------- 24,499,475 ================================================================================================================================== Consumer Cyclicals--15.7% - ---------------------------------------------------------------------------------------------------------------------------------- Autos & Housing--2.6% Arvin Industries, Inc. 6,900 261,337 - ---------------------------------------------------------------------------------------------------------------------------------- Centex Construction Products, Inc. 6,000 204,750 - ---------------------------------------------------------------------------------------------------------------------------------- Champion Enterprises, Inc.(1) 15,000 279,375 - ---------------------------------------------------------------------------------------------------------------------------------- Delphi Automotive Systems Corp.(1) 12,231 227,038 - ---------------------------------------------------------------------------------------------------------------------------------- Ford Motor Co. 59,200 3,341,100 - ---------------------------------------------------------------------------------------------------------------------------------- Fortune Brands, Inc. 15,000 620,625 - ---------------------------------------------------------------------------------------------------------------------------------- General Motors Corp. 17,500 1,155,000 - ---------------------------------------------------------------------------------------------------------------------------------- Hughes Supply, Inc. 6,900 204,844 - ---------------------------------------------------------------------------------------------------------------------------------- Lear Corp.(1) 17,500 870,625 - ---------------------------------------------------------------------------------------------------------------------------------- Leggett & Platt, Inc. 1,800 50,062 - ---------------------------------------------------------------------------------------------------------------------------------- Maytag Corp. 9,000 627,187 - ---------------------------------------------------------------------------------------------------------------------------------- Meritor Automotive, Inc. 12,000 306,000 - ---------------------------------------------------------------------------------------------------------------------------------- NVR, Inc.(1) 5,000 260,937 - ---------------------------------------------------------------------------------------------------------------------------------- Owens Corning 25,000 859,375 - ---------------------------------------------------------------------------------------------------------------------------------- Ryland Group, Inc. (The) 7,000 207,812 - ---------------------------------------------------------------------------------------------------------------------------------- Southdown, Inc. 3,000 192,750 - ---------------------------------------------------------------------------------------------------------------------------------- Tower Automotive, Inc.(1) 8,900 226,394 - ---------------------------------------------------------------------------------------------------------------------------------- Webb (Del E.) Corp. 9,900 236,362 ------------- 10,131,573 - ---------------------------------------------------------------------------------------------------------------------------------- Consumer Services--0.8% Budget Group, Inc., Cl. A(1) 17,400 214,237 - ---------------------------------------------------------------------------------------------------------------------------------- CDI Corp.(1) 9,900 337,219 - ---------------------------------------------------------------------------------------------------------------------------------- Dun & Bradstreet Corp. 12,000 425,250 - ---------------------------------------------------------------------------------------------------------------------------------- H&R Block, Inc. 9,000 450,000 - ---------------------------------------------------------------------------------------------------------------------------------- Hertz Corp., Cl. A 5,000 310,000 - ---------------------------------------------------------------------------------------------------------------------------------- Intermedia Communications, Inc.(1)(2) 1,230 29,520 - ---------------------------------------------------------------------------------------------------------------------------------- Interpublic Group of Cos., Inc. 15,000 1,299,375 - ---------------------------------------------------------------------------------------------------------------------------------- Young & Rubicam, Inc.(1) 3,000 136,312 ------------- 3,201,913 4 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ---------------------------------------------------------------------------------------------------------------------------------- Leisure & Entertainment--0.5% Harley-Davidson, Inc. 10,000 $ 543,750 - ---------------------------------------------------------------------------------------------------------------------------------- Marriott International, Inc., Cl. A 17,000 635,375 - ---------------------------------------------------------------------------------------------------------------------------------- MGM Grand, Inc.(1) 3,000 147,000 - ---------------------------------------------------------------------------------------------------------------------------------- Park Place Entertainment Corp.(1) 50,000 484,375 ------------- 1,810,500 - ---------------------------------------------------------------------------------------------------------------------------------- Media--1.2% Deluxe Corp. 6,000 233,625 - ---------------------------------------------------------------------------------------------------------------------------------- Gannett Co., Inc. 28,000 1,998,500 - ---------------------------------------------------------------------------------------------------------------------------------- Harland (John H.) Co. 10,000 199,375 - ---------------------------------------------------------------------------------------------------------------------------------- Knight-Ridder, Inc. 7,000 384,562 - ---------------------------------------------------------------------------------------------------------------------------------- McClatchy Co., Cl. A 5,000 165,625 - ---------------------------------------------------------------------------------------------------------------------------------- New York Times Co., Cl. A 15,000 552,187 - ---------------------------------------------------------------------------------------------------------------------------------- R.H. Donnelley Corp. 9,900 193,669 - ---------------------------------------------------------------------------------------------------------------------------------- Readers Digest Assn., Inc. (The), Cl. A, Non-Vtg. 5,000 198,750 - ---------------------------------------------------------------------------------------------------------------------------------- Tribune Co. 10,000 871,250 ------------- 4,797,543 - ---------------------------------------------------------------------------------------------------------------------------------- Retail: General--5.2% Costco Cos., Inc.(1) 8,000 640,500 - ---------------------------------------------------------------------------------------------------------------------------------- Family Dollar Stores, Inc. 3,000 72,000 - ---------------------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc.(1) 87,500 4,632,031 - ---------------------------------------------------------------------------------------------------------------------------------- May Department Stores Co. 25,000 1,021,875 - ---------------------------------------------------------------------------------------------------------------------------------- Wal-Mart Stores, Inc. 290,000 13,992,500 ------------- 20,358,906 - ---------------------------------------------------------------------------------------------------------------------------------- Retail: Specialty--4.7% Abercrombie & Fitch Co., Cl. A(1) 28,000 1,344,000 - ---------------------------------------------------------------------------------------------------------------------------------- American Eagle Outfitters, Inc.(1) 10,000 455,000 - ---------------------------------------------------------------------------------------------------------------------------------- Ann Taylor Stores Corp.(1) 5,000 225,000 - ---------------------------------------------------------------------------------------------------------------------------------- Best Buy Co., Inc. 16,000 1,080,000 - ---------------------------------------------------------------------------------------------------------------------------------- BJ's Wholesale Club, Inc.(1) 4,000 120,250 - ---------------------------------------------------------------------------------------------------------------------------------- Gap, Inc. 67,500 3,400,312 - ---------------------------------------------------------------------------------------------------------------------------------- Home Depot, Inc. 100,000 6,443,750 - ---------------------------------------------------------------------------------------------------------------------------------- Lowe's Cos., Inc. 26,000 1,473,875 - ---------------------------------------------------------------------------------------------------------------------------------- Payless ShoeSource, Inc.(1) 10,000 535,000 - ---------------------------------------------------------------------------------------------------------------------------------- Ross Stores, Inc. 15,000 755,625 - ---------------------------------------------------------------------------------------------------------------------------------- Shopko Stores, Inc.(1) 10,000 362,500 - ---------------------------------------------------------------------------------------------------------------------------------- Tandy Corp. 20,000 977,500 - ---------------------------------------------------------------------------------------------------------------------------------- Tiffany & Co. 1,600 154,400 - ---------------------------------------------------------------------------------------------------------------------------------- TJX Cos., Inc. 24,000 799,500 - ---------------------------------------------------------------------------------------------------------------------------------- Zale Corp.(1) 12,000 480,000 ------------- 18,606,712 Oppenheimer Main Street Growth & Income Fund/VA 5 - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ---------------------------------------------------------------------------------------------------------------------------------- Textile/Apparel & Home Furnishings--0.7% Jones Apparel Group, Inc.(1) 45,099 $ 1,547,459 - ---------------------------------------------------------------------------------------------------------------------------------- Mohawk Industries, Inc.(1) 7,900 239,962 - ---------------------------------------------------------------------------------------------------------------------------------- Shaw Industries, Inc.(1) 33,000 544,500 - ---------------------------------------------------------------------------------------------------------------------------------- VF Corp. 9,000 384,750 ------------- 2,716,671 ================================================================================================================================== Consumer Staples--8.6% - ---------------------------------------------------------------------------------------------------------------------------------- Beverages--0.7% Anheuser-Busch Cos., Inc. 36,900 2,617,594 - ---------------------------------------------------------------------------------------------------------------------------------- Broadcasting--1.0% CBS Corp.(1) 50,000 2,171,875 - ---------------------------------------------------------------------------------------------------------------------------------- Cox Communications, Inc., Cl. A(1) 10,000 368,125 - ---------------------------------------------------------------------------------------------------------------------------------- MediaOne Group, Inc.(1) 21,000 1,561,875 ------------- 4,101,875 - ---------------------------------------------------------------------------------------------------------------------------------- Entertainment--2.9% Brinker International, Inc.(1) 85,000 2,310,937 - ---------------------------------------------------------------------------------------------------------------------------------- Darden Restaurants, Inc. 10,000 218,125 - ---------------------------------------------------------------------------------------------------------------------------------- McDonald's Corp. 45,000 1,859,063 - ---------------------------------------------------------------------------------------------------------------------------------- Ruby Tuesday, Inc. 10,000 190,000 - ---------------------------------------------------------------------------------------------------------------------------------- Time Warner, Inc. 40,000 2,940,000 - ---------------------------------------------------------------------------------------------------------------------------------- Tricon Global Restaurants, Inc.(1) 5,000 270,625 - ---------------------------------------------------------------------------------------------------------------------------------- Viacom, Inc., Cl. B(1) 73,100 3,216,400 - ---------------------------------------------------------------------------------------------------------------------------------- Wendy's International, Inc. 10,000 283,125 ------------- 11,288,275 - ---------------------------------------------------------------------------------------------------------------------------------- Food--0.2% Agribrands International, Inc.(1) 10,000 395,625 - ---------------------------------------------------------------------------------------------------------------------------------- Corn Products International, Inc. 9,900 301,331 ------------- 696,956 - ---------------------------------------------------------------------------------------------------------------------------------- Food & Drug Retailers--0.8% Albertson's, Inc. 25,200 1,299,375 - ---------------------------------------------------------------------------------------------------------------------------------- CVS Corp. 40,000 2,030,000 ------------- 3,329,375 - ---------------------------------------------------------------------------------------------------------------------------------- Household Goods--1.3% Kimberly-Clark Corp. 44,000 2,508,000 - ---------------------------------------------------------------------------------------------------------------------------------- Procter & Gamble Co. 29,200 2,606,100 ------------- 5,114,100 - ---------------------------------------------------------------------------------------------------------------------------------- Tobacco--1.7% Philip Morris Cos., Inc. 162,500 6,530,469 ================================================================================================================================== Energy--7.1% - ---------------------------------------------------------------------------------------------------------------------------------- Energy Services--3.4% BJ Services Co.(1) 57,500 1,692,656 - ---------------------------------------------------------------------------------------------------------------------------------- Cooper Cameron Corp.(1) 60,000 2,223,750 6 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ---------------------------------------------------------------------------------------------------------------------------------- Energy Services (continued) Nabors Industries, Inc.(1) 30,000 $ 733,125 - ---------------------------------------------------------------------------------------------------------------------------------- Santa Fe International Corp. 105,000 2,415,000 - ---------------------------------------------------------------------------------------------------------------------------------- Stolt Comex Seaway SA, ADR(1) 315,000 3,386,250 - ---------------------------------------------------------------------------------------------------------------------------------- Transocean Offshore, Inc. 45,000 1,181,250 - ---------------------------------------------------------------------------------------------------------------------------------- Weatherford International, Inc.(1) 50,000 1,831,250 ------------- 13,463,281 - ---------------------------------------------------------------------------------------------------------------------------------- Oil: Domestic--2.6% Chieftain International, Inc.(1) 50,000 875,000 - ---------------------------------------------------------------------------------------------------------------------------------- Conoco, Inc., Cl. A 20,000 557,500 - ---------------------------------------------------------------------------------------------------------------------------------- Frontier Oil Corp.(1) 50,000 340,625 - ---------------------------------------------------------------------------------------------------------------------------------- Mobil Corp. 54,000 5,346,000 - ---------------------------------------------------------------------------------------------------------------------------------- Murphy Oil Corp. 5,000 244,063 - ---------------------------------------------------------------------------------------------------------------------------------- Texaco, Inc. 4,500 281,250 - ---------------------------------------------------------------------------------------------------------------------------------- Vastar Resources, Inc. 50,000 2,621,875 ------------- 10,266,313 - ---------------------------------------------------------------------------------------------------------------------------------- Oil: International--1.1% Anderson Exploration Ltd.(1) 50,000 653,695 - ---------------------------------------------------------------------------------------------------------------------------------- Canadian 88 Energy Corp.(1) 300,000 835,108 - ---------------------------------------------------------------------------------------------------------------------------------- Canadian Natural Resources Ltd.(1) 35,000 685,789 - ---------------------------------------------------------------------------------------------------------------------------------- Newport Petroleum Corp.(1) 50,000 170,603 - ---------------------------------------------------------------------------------------------------------------------------------- Paramount Resources Ltd. 10,300 140,924 - ---------------------------------------------------------------------------------------------------------------------------------- Poco Petroleums Ltd.(1) 150,000 1,206,042 - ---------------------------------------------------------------------------------------------------------------------------------- Ranger Oil Ltd.(1) 85,300 412,078 - ---------------------------------------------------------------------------------------------------------------------------------- Rio Alto Exploration Ltd.(1) 20,000 302,017 ------------- 4,406,256 ================================================================================================================================== Financial--11.6% - ---------------------------------------------------------------------------------------------------------------------------------- Banks--5.1% AmSouth Bancorp 15,000 347,813 - ---------------------------------------------------------------------------------------------------------------------------------- Bank of New York Co., Inc. (The) 20,000 733,750 - ---------------------------------------------------------------------------------------------------------------------------------- Bank One Corp. 20,500 1,221,031 - ---------------------------------------------------------------------------------------------------------------------------------- BankBoston Corp. 49,000 2,505,125 - ---------------------------------------------------------------------------------------------------------------------------------- BB&T Corp. 15,000 550,313 - ---------------------------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. 90,000 7,796,250 - ---------------------------------------------------------------------------------------------------------------------------------- Golden State Bancorp, Inc.(1) 30,000 660,000 - ---------------------------------------------------------------------------------------------------------------------------------- M&T Bank Corp. 100 55,000 - ---------------------------------------------------------------------------------------------------------------------------------- National City Corp. 22,000 1,441,000 - ---------------------------------------------------------------------------------------------------------------------------------- Northern Trust Corp. 10,000 970,000 - ---------------------------------------------------------------------------------------------------------------------------------- Old Kent Financial Corp. 10,500 439,688 - ---------------------------------------------------------------------------------------------------------------------------------- Prosperity Bancshares, Inc. 67,500 987,188 - ---------------------------------------------------------------------------------------------------------------------------------- Wachovia Corp. 15,000 1,283,438 - ---------------------------------------------------------------------------------------------------------------------------------- Wells Fargo Co. 23,000 983,250 - ---------------------------------------------------------------------------------------------------------------------------------- Zions Bancorp 1,800 114,300 ------------- 20,088,146 Oppenheimer Main Street Growth & Income Fund/VA 7 - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ---------------------------------------------------------------------------------------------------------------------------------- Diversified Financial--4.1% AMBAC Financial Group, Inc. 7,000 $ 399,875 - ---------------------------------------------------------------------------------------------------------------------------------- American Express Co. 12,500 1,626,563 - ---------------------------------------------------------------------------------------------------------------------------------- Citigroup, Inc. 60,000 2,850,000 - ---------------------------------------------------------------------------------------------------------------------------------- Fannie Mae 35,000 2,393,125 - ---------------------------------------------------------------------------------------------------------------------------------- Financial Security Assurance Holdings Ltd. 7,000 364,000 - ---------------------------------------------------------------------------------------------------------------------------------- Freddie Mac 45,000 2,610,000 - ---------------------------------------------------------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The)(1) 4,600 332,350 - ---------------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Dean Witter & Co. 20,000 2,050,000 - ---------------------------------------------------------------------------------------------------------------------------------- PaineWebber Group, Inc. 23,000 1,075,250 - ---------------------------------------------------------------------------------------------------------------------------------- PMI Group, Inc. (The) 14,000 879,375 - ---------------------------------------------------------------------------------------------------------------------------------- Schwab (Charles) Corp. 12,000 1,318,500 ------------- 15,899,038 - ---------------------------------------------------------------------------------------------------------------------------------- Insurance--2.4% AFLAC, Inc. 6,300 301,613 - ---------------------------------------------------------------------------------------------------------------------------------- Allmerica Financial Corp. 16,000 973,000 - ---------------------------------------------------------------------------------------------------------------------------------- Allstate Corp. 16,800 602,700 - ---------------------------------------------------------------------------------------------------------------------------------- American General Corp. 18,000 1,356,750 - ---------------------------------------------------------------------------------------------------------------------------------- Chicago Title Corp. 5,000 178,438 - ---------------------------------------------------------------------------------------------------------------------------------- Cigna Corp. 18,000 1,602,000 - ---------------------------------------------------------------------------------------------------------------------------------- Equitable Cos., Inc. 23,000 1,541,000 - ---------------------------------------------------------------------------------------------------------------------------------- Hartford Financial Services Group, Inc. 7,000 408,188 - ---------------------------------------------------------------------------------------------------------------------------------- Hartford Life, Inc., Cl. A 10,000 526,250 - ---------------------------------------------------------------------------------------------------------------------------------- Jefferson-Pilot Corp. 8,000 529,500 - ---------------------------------------------------------------------------------------------------------------------------------- Lincoln National Corp. 20,000 1,046,250 - ---------------------------------------------------------------------------------------------------------------------------------- Marsh & McLennan Cos., Inc. 5,000 377,500 ------------- 9,443,189 ================================================================================================================================== Healthcare--9.7% - ---------------------------------------------------------------------------------------------------------------------------------- Healthcare/Drugs--9.4% Abbott Laboratories 100,000 4,550,000 - ---------------------------------------------------------------------------------------------------------------------------------- Amgen, Inc.(1) 47,800 2,909,825 - ---------------------------------------------------------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 135,000 9,509,063 - ---------------------------------------------------------------------------------------------------------------------------------- Immunex Corp.(1) 6,000 764,625 - ---------------------------------------------------------------------------------------------------------------------------------- Johnson & Johnson 99,000 9,702,000 - ---------------------------------------------------------------------------------------------------------------------------------- Medimmune, Inc.(1) 3,000 203,250 - ---------------------------------------------------------------------------------------------------------------------------------- Merck & Co., Inc. 100,800 7,459,200 - ---------------------------------------------------------------------------------------------------------------------------------- Millennium Pharmaceuticals, Inc.(1) 6,000 216,000 - ---------------------------------------------------------------------------------------------------------------------------------- Pharmacia & Upjohn, Inc. 26,900 1,528,256 ------------- 36,842,219 - ---------------------------------------------------------------------------------------------------------------------------------- Healthcare/Supplies & Services--0.3% Allergan, Inc. 5,000 555,000 - ---------------------------------------------------------------------------------------------------------------------------------- Biomet, Inc. 7,000 278,250 - ---------------------------------------------------------------------------------------------------------------------------------- Guidant Corp. 10,000 514,375 ------------- 1,347,625 8 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 ================================================================================================================================== Technology--17.1% - ---------------------------------------------------------------------------------------------------------------------------------- Computer Hardware--6.9% Adaptec, Inc.(1) 5,900 $ 208,344 - ---------------------------------------------------------------------------------------------------------------------------------- Apple Computer, Inc.(1) 10,000 463,125 - ---------------------------------------------------------------------------------------------------------------------------------- Hewlett-Packard Co. 70,000 7,035,000 - ---------------------------------------------------------------------------------------------------------------------------------- International Business Machines Corp. 124,000 16,027,000 - ---------------------------------------------------------------------------------------------------------------------------------- Lexmark International Group, Inc., Cl. A(1) 36,000 2,378,250 - ---------------------------------------------------------------------------------------------------------------------------------- Pitney Bowes, Inc. 15,400 989,450 ------------- 27,101,169 - ---------------------------------------------------------------------------------------------------------------------------------- Computer Services--0.4% Automatic Data Processing, Inc. 20,000 880,000 - ---------------------------------------------------------------------------------------------------------------------------------- DST Systems, Inc.(1) 3,000 188,625 - ---------------------------------------------------------------------------------------------------------------------------------- Sungard Data Systems, Inc.(1) 13,000 448,500 ------------- 1,517,125 - ---------------------------------------------------------------------------------------------------------------------------------- Computer Software--4.9% Adobe Systems, Inc. 4,000 328,625 - ---------------------------------------------------------------------------------------------------------------------------------- BMC Software, Inc.(1) 27,500 1,485,000 - ---------------------------------------------------------------------------------------------------------------------------------- Compuware Corp.(1) 55,000 1,749,688 - ---------------------------------------------------------------------------------------------------------------------------------- Microsoft Corp.(1) 172,250 15,534,797 ------------- 19,098,110 - ---------------------------------------------------------------------------------------------------------------------------------- Communications Equipment--2.6% Cisco Systems, Inc.(1) 94,000 6,057,125 - ---------------------------------------------------------------------------------------------------------------------------------- General Instrument Corp.(1) 11,000 467,500 - ---------------------------------------------------------------------------------------------------------------------------------- Lucent Technologies, Inc. 23,000 1,551,063 - ---------------------------------------------------------------------------------------------------------------------------------- QUALCOMM, Inc.(1) 1,800 258,300 - ---------------------------------------------------------------------------------------------------------------------------------- Tellabs, Inc.(1) 30,000 2,026,875 ------------- 10,360,863 - ---------------------------------------------------------------------------------------------------------------------------------- Electronics--2.3% Analog Devices, Inc.(1) 12,000 602,250 - ---------------------------------------------------------------------------------------------------------------------------------- Intel Corp. 115,000 6,842,500 - ---------------------------------------------------------------------------------------------------------------------------------- Lam Research Corp.(1) 10,000 466,875 - ---------------------------------------------------------------------------------------------------------------------------------- QLogic Corp.(1) 3,000 396,000 - ---------------------------------------------------------------------------------------------------------------------------------- Waters Corp.(1) 7,400 393,125 - ---------------------------------------------------------------------------------------------------------------------------------- Xilinx, Inc.(1) 7,000 400,750 ------------- 9,101,500 ================================================================================================================================== Transportation--1.3% - ---------------------------------------------------------------------------------------------------------------------------------- Air Transportation--0.9% Continental Airlines, Inc., Cl. B(1) 51,558 1,939,870 - ---------------------------------------------------------------------------------------------------------------------------------- Delta Air Lines, Inc. 17,000 979,625 - ---------------------------------------------------------------------------------------------------------------------------------- Northwest Airlines Corp., Cl. A(1) 7,000 227,500 - ---------------------------------------------------------------------------------------------------------------------------------- Southwest Airlines Co. 10,000 311,250 ------------- 3,458,245 Oppenheimer Main Street Growth & Income Fund/VA 9 - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares Note 1 - ---------------------------------------------------------------------------------------------------------------------------------- Railroads & Truckers--0.4% Union Pacific Corp. 20,000 $ 1,166,250 - ---------------------------------------------------------------------------------------------------------------------------------- XTRA Corp.(1) 5,000 229,688 -------------- 1,395,938 ================================================================================================================================== Utilities--2.1% - ---------------------------------------------------------------------------------------------------------------------------------- Electric Utilities--2.1% Allegheny Energy, Inc. 20,000 641,250 - ---------------------------------------------------------------------------------------------------------------------------------- Conectiv, Inc. 4,000 97,750 - ---------------------------------------------------------------------------------------------------------------------------------- Consolidated Edison Co. of New York, Inc. 15,000 678,750 - ---------------------------------------------------------------------------------------------------------------------------------- Energy East Corp. 30,000 780,000 - ---------------------------------------------------------------------------------------------------------------------------------- FirstEnergy Corp. 12,000 372,000 - ---------------------------------------------------------------------------------------------------------------------------------- Florida Progress Corp. 16,000 661,000 - ---------------------------------------------------------------------------------------------------------------------------------- FPL Group, Inc. 14,000 764,750 - ---------------------------------------------------------------------------------------------------------------------------------- IPALCO Enterprises, Inc. 10,000 211,875 - ---------------------------------------------------------------------------------------------------------------------------------- OGE Energy Corp. 9,900 235,125 - ---------------------------------------------------------------------------------------------------------------------------------- Peco Energy Co. 15,000 628,125 - ---------------------------------------------------------------------------------------------------------------------------------- PG&E Corp. 36,000 1,170,000 - ---------------------------------------------------------------------------------------------------------------------------------- Public Service Enterprise Group, Inc. 25,000 1,021,875 - ---------------------------------------------------------------------------------------------------------------------------------- Unicom Corp. 20,000 771,250 - ---------------------------------------------------------------------------------------------------------------------------------- UtiliCorp United, Inc. 3,000 72,937 -------------- 8,106,687 -------------- Total Common Stocks (Cost $323,540,182) 363,272,658 ================================================================================================================================== Other Securities--0.8% - ---------------------------------------------------------------------------------------------------------------------------------- Houston Industries, Inc., 7% Automatic Common Exchange Securities for Time Warner, Inc. Common Stock (Cost $1,170,994) 25,000 2,981,250 Principal Amount ================================================================================================================================== Convertible Corporate Bonds and Notes--1.0% - ---------------------------------------------------------------------------------------------------------------------------------- PLATINUM technology international, inc., 6.25% Cv. Sub. Nts., 12/15/02(3) $ 2,000,000 2,012,500 - ---------------------------------------------------------------------------------------------------------------------------------- PLATINUM technology international, inc., 6.25% Cv. Unsec. Sub. Nts., 12/15/02 2,000,000 2,012,500 -------------- Total Convertible Corporate Bonds and Notes (Cost $3,751,523) 4,025,000 ================================================================================================================================== Repurchase Agreements--5.1% - ---------------------------------------------------------------------------------------------------------------------------------- Repurchase agreement with First Chicago Capital Markets, 4.80%, dated 6/30/99, to be repurchased at $20,002,667 on 7/1/99, collateralized by U.S. Treasury Nts., 5.50%-8%, 11/30/99-7/15/06, with a value of $16,884,024, U.S. Treasury Bonds, 6%-9.25%, 2/15/16-2/15/26, with a value of $3,535,652 (Cost $20,000,000) 20,000,000 20,000,000 - ---------------------------------------------------------------------------------------------------------------------------------- Total Investments, at Value (Cost $348,462,699) 99.6% 390,278,908 - ---------------------------------------------------------------------------------------------------------------------------------- Other Assets Net of Liabilities 0.4 1,633,503 ----------- -------------- Net Assets 100.0% $391,912,411 =========== ==============
1. Non-income producing security. 2. Identifies issues considered to be illiquid or restricted--See Note 7 of Notes to Financial Statements. 3. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $2,012,500 or 0.51% of the Fund's net assets as of June, 30, 1999. See accompanying Notes to Financial Statements. 10 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Assets and Liabilities June 30, 1999 (Unaudited) - -------------------------------------------------------------------------------- ============================================================================================= Assets Investments, at value (cost $348,462,699)--see accompanying statement $390,278,908 - --------------------------------------------------------------------------------------------- Cash 18,253 - --------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold 4,346,679 Shares of beneficial interest sold 707,009 Interest and dividends 351,635 Other 35,597 ------------ Total assets 395,738,081 ============================================================================================= Liabilities Payables and other liabilities: Investments purchased 3,341,833 Shares of beneficial interest redeemed 415,831 Custodian fees 9,860 Shareholder reports 9,561 Other 48,585 ------------ Total liabilities 3,825,670 ============================================================================================= Net Assets $391,912,411 ============ ============================================================================================= Composition of Net Assets Paid-in capital $324,413,765 - --------------------------------------------------------------------------------------------- Undistributed net investment income 925,622 - --------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 24,756,815 - --------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 41,816,209 ------------ Net assets--applicable to 16,894,388 shares of beneficial interest outstanding $391,912,411 ============ ============================================================================================= Net Asset Value, Redemption Price Per Share and Offering Price Per Share $23.20
See accompanying Notes to Financial Statements. Oppenheimer Main Street Growth & Income Fund/VA 11 - -------------------------------------------------------------------------------- Statement of Operations For the Six Months Ended June 30, 1999 (Unaudited) - -------------------------------------------------------------------------------- ====================================================================================== Investment Income Dividends (net of foreign withholding taxes of $7,653) $ 1,930,977 - -------------------------------------------------------------------------------------- Interest 335,816 ------------ Total income 2,266,793 ====================================================================================== Expenses Management fees--Note 4 1,232,215 - -------------------------------------------------------------------------------------- Custodian fees and expenses 54,378 - -------------------------------------------------------------------------------------- Registration and filing fees 40,790 - -------------------------------------------------------------------------------------- Legal, auditing and other professional fees 8,672 - -------------------------------------------------------------------------------------- Insurance expenses 1,637 - -------------------------------------------------------------------------------------- Trustees' compensation 1,162 - -------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees--Note 4 1,046 - -------------------------------------------------------------------------------------- Other 564 ------------ Total expenses 1,340,464 Less expenses paid indirectly--Note 1 (1,004) ------------ Net expenses 1,339,460 ====================================================================================== Net Investment Income 927,333 ====================================================================================== Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments 30,482,739 Closing and expiration of option contracts written--Note 6 (1,299,413) Foreign currency transactions 7,026 ------------ Net realized gain 29,190,352 - -------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on: Investments 17,280,801 Translation of assets and liabilities denominated in foreign currencies (52,689) ------------ Net change 17,228,112 ------------ Net realized and unrealized gain 46,418,464 ====================================================================================== Net Increase in Net Assets Resulting from Operations $ 47,345,797 ============
See accompanying Notes to Financial Statements. 12 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statements of Changes in Net Assets - --------------------------------------------------------------------------------
Six Months Ended Year Ended June 30, 1999 December 31, (Unaudited) 1998 ======================================================================================== Operations Net investment income $ 927,333 $ 1,744,608 - ---------------------------------------------------------------------------------------- Net realized gain (loss) 29,190,352 (1,957,235) - ---------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 17,228,112 6,335,797 ------------- ------------- Net increase in net assets resulting from operations 47,345,797 6,123,170 ======================================================================================== Dividends and 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--Note 2 40,046,191 157,202,998 ======================================================================================== Net Assets Total increase 83,559,097 152,985,564 - ---------------------------------------------------------------------------------------- Beginning of period 308,353,314 155,367,750 ------------- ------------- End of period (including undistributed net investment income of $925,622 and $1,425,924, respectively) $ 391,912,411 $ 308,353,314 ============= =============
See accompanying Notes to Financial Statements. Oppenheimer Main Street Growth & Income Fund/VA 13 - -------------------------------------------------------------------------------- Financial Highlights - --------------------------------------------------------------------------------
Six Months Ended June 30, 1999 Year Ended December 31, (Unaudited) 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 .05 .13 .19 .14 .01 Net realized and unrealized gain 2.92 .92 4.91 3.91 2.52 - ---------------------------------------------------------------------------------------------------------------------------- Total income from investment operations 2.97 1.05 5.10 4.05 2.53 - ---------------------------------------------------------------------------------------------------------------------------- Dividends and 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 distributions to shareholders (.25) (1.15) (.89) (.19) (.02) - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $23.20 $20.48 $20.58 $16.37 $12.51 ====== ====== ====== ====== ====== ============================================================================================================================ Total Return, at Net Asset Value(2) 14.64% 4.70% 32.48% 32.51% 25.25% ============================================================================================================================ Ratios/Supplemental Data Net assets, end of period (in thousands) $391,912 $308,353 $155,368 $47,009 $4,288 - ---------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $337,249 $234,306 $ 94,906 $21,562 $1,809 - ---------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(3) Net investment income 0.55% 0.74% 1.15% 1.41% 0.50% Expenses(4) 0.80% 0.79% 0.83% 1.00% 2.07% - ---------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(5) 178% 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 theses charges would reduce the total return figures for all periods shown. 3. Annualized for periods less than one full year. 4. The expense ratio reflects the effect of expenses paid indirectly by the Fund. Prior year expense ratios have not been adjusted. 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 June 30, 1999, were $339,133,962 and $324,369,943, respectively. See accompanying Notes to Financial Statements. 14 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Notes to Financial Statements (Unaudited) - -------------------------------------------------------------------------------- ================================================================================ 1. Significant Accounting Policies Oppenheimer Main Street Growth & Income Fund/VA (the Fund) is a separate series of Oppenheimer Variable Account Funds (the Trust), a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund operated under the name Oppenheimer Growth & Income Fund through April 30, 1999. 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 Trust'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. - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- Distributions to Shareholders. Distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. - -------------------------------------------------------------------------------- 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. Oppenheimer Main Street Growth & Income Fund/VA 15 - -------------------------------------------------------------------------------- Notes to Financial Statements (Unaudited) (Continued) - -------------------------------------------------------------------------------- ================================================================================ 1. Significant Accounting Policies (continued) 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:
Six Months Ended June 30, 1999 Year Ended December 31, 1998 ------------------------------ ---------------------------- Shares Amount Shares Amount - ----------------------------------------------------------------------------------------------------------- Sold 3,238,022 $ 69,512,397 9,181,075 $189,060,690 Dividends and distributions reinvested 186,334 3,832,892 468,325 10,340,604 Redeemed (1,584,672) (33,299,098) (2,145,877) (42,198,296) --------- ------------ --------- ------------ Net increase 1,839,684 $ 40,046,191 7,503,523 $157,202,998 ========== ============ ========== ============
================================================================================ 3. Unrealized Gains and Losses on Securities As of June 30, 1999, net unrealized appreciation on investments and options written of $41,816,209 was composed of gross appreciation of $47,471,289, and gross depreciation of $5,655,080. ================================================================================ 4. Management Fees and Other Transactions with Affiliates Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee of 0.75% of the first $200 million of average annual net assets, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million and 0.60% of average annual net assets over $800 million. The Fund's management fee for the six months ended June 30, 1999 was 0.74% of average annual net assets. 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 at cost. ================================================================================ 5. Foreign Currency Contracts A foreign currency exchange 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 exchange contracts for operational purposes and to seek to protect against adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates as provided by a reliable bank, dealer or pricing service. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities. The Fund may realize a gain or loss upon the closing or settlement of the foreign currency transactions. Realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. Securities denominated in foreign currency to cover net exposure on outstanding foreign currency contracts are noted in the Statement of Investments where applicable. 16 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Notes to Financial Statements (Unaudited) (Continued) - -------------------------------------------------------------------------------- ================================================================================ 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 six months ended June 30, 1999, was as follows:
Call Options ----------------------------- Number Amount of of Options Premiums - ------------------------------------------------------------------------------- Options outstanding as of December 31, 1998 1,325 $ 570,160 Options closed or expired (1,325) (570,160) ------ --------- Options outstanding as of June 30, 1999 -- $ -- ====== =========
================================================================================ 7. Illiquid or Restricted Securities As of June 30, 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 10% 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 June 30, 1999 was $29,520, which represents 0.01% of the Fund's net assets, of which $29,520 is considered restricted. Information concerning restricted securities is as follows:
Valuation Per Acquisition Cost Per Unit as of Security Dates Unit June 30, 1999 - -------------------------------------------------------------------------------------------------- Intermedia Communications, Inc. 9/28/98-12/29/98 $12.51-$21.54 $24.00
Oppenheimer Main Street Growth & Income Fund/VA 17 - -------------------------------------------------------------------------------- Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- A Series of Oppenheimer Variable Account Funds =============================================================================================== Officers and Trustees James C. Swain, Chairman and Chief Executive Officer Bridget A. Macaskill, President Robert G. Avis, Trustee William A. Baker, 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, Vice President and 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. The financial statements included herein have been taken from the records of the Fund without examination of the independent auditors. 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.
18 Oppenheimer Main Street Growth & Income Fund/VA -----END PRIVACY-ENHANCED MESSAGE-----