-----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, UWtqbWHdUPEjxYW88piHQLeiDziqNmpwA1suzbi4rf1PRas0SzbTQjbDR2/PJ4uc ZGqaX/zpXNTyXe+bkd/q9g== 0001110538-01-500121.txt : 20010907 0001110538-01-500121.hdr.sgml : 20010907 ACCESSION NUMBER: 0001110538-01-500121 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010906 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER VARIABLE ACCOUNT FUNDS CENTRAL INDEX KEY: 0000752737 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 840974272 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04108 FILM NUMBER: 1732339 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 mainstreet_growthandincome.txt [GRAPHIC] Semiannual Report June 30, 2001 Oppenheimer Main Street(R)Growth & Income Fund/VA A Series of Oppenheimer Variable Account Funds [LOGO] Oppenheimer Funds(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 shares as well as current income from equity and debt securities. ================================================================================ Narrative by Charles Albers and Nikolaos Monoyios, Co-Portfolio Managers For the six-month period ended June 30, 2001, Oppenheimer Main Street Growth & Income Fund/VA provided a cumulative total return of -5.95% for non-service shares(1). In comparison, the Fund's benchmark, the Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index"), provided a -6.70% cumulative total return over the same period(2). The S&P 500 Index's return reflects the reinvestment of dividends and, where applicable, capital gain distributions. We are generally pleased with the Fund's performance, especially given the challenging investment environment that prevailed during the six-month reporting period. The stock market's weakness can be attributed primarily to a deteriorating U.S. economy and its adverse effects on corporate earnings. Stock price declines were particularly severe among technology and telecommunications companies. Overall, the market for large-cap stocks remained highly volatile, experiencing sudden rallies and sharp reversals from month to month. For example, prices of growth-oriented stocks rallied strongly in January, fell steeply in February and March, and subsequently rose again in April and May. Fortunately, heightened short-term volatility did not compromise the effectiveness of the Fund's quantitative models. The Fund's models, combined with our own professional judgment, led us to invest in individual stocks from some of the period's best performing industry groups. The Fund's above-average exposure to energy stocks was particularly helpful as these companies benefited from rising crude oil and natural gas prices. In fact, the energy group represented one of the Fund's largest overweight of holdings relative to the S&P 500 Index as of June 30, 2001(3). The Fund also received positive contributions to performance from its increased emphasis on stocks within a variety of defensive industry groups, including utilities, financial services, healthcare and consumer staples. Similarly, because we reduced our holdings in technology and communications services during the reporting period, the Fund avoided the brunt of the declines in those areas. Throughout 2001, the disciplined application of our stock scoring system continued to suggest that better opportunities were available at the lower end of the large-capitalization market, leading us away from mega-cap stocks and closer to the mid-cap category. While the Fund's weighted average market capitalization of $90.7 billion as of June 30 remains firmly within the large-cap arena, it has declined to 80% of that of the S&P 500 Index, its lowest level in three years. Indeed, this ongoing shift has helped the Fund's performance as relatively smaller stocks have continued to produce better overall returns than the largest stocks. In reviewing performance, please remember that past performance cannot guarantee future results. Because of ongoing market volatility, the Fund's performance may be subject to substantial fluctuations, and current performance may be less than the results shown. 1. Includes changes in net asset value per share and reinvestment of dividends and capital gains distributions and does not include the charges associated with the separate account products which offer this Fund. Such performance is not annualized and would have been lower if such charges were taken into account. 2. The S&P 500 Index is a broad-based index of equity securities with reinvestment of dividends and is widely regarded as a general measurement of the performance of the U.S. equity securities market. The Index cannot be purchased directly by investors. 3. The Fund's portfolio is subject to change. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. 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. 2 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Oppenheimer Variable Account Funds--Oppenheimer Main Street(r) Growth & Income Fund/VA - -------------------------------------------------------------------------------- ================================================================================ Although our disciplined approach to stock selection was the primary driver of the Fund's returns during the six-month period, diversification was also a key contributor. As of June 30, 2001, the Fund held 512 individual securities representing nearly every industry group.3 In our opinion, diversification works because the stock market is highly complex, and prices are driven by a number of factors with varying degrees of influence. By diversifying broadly, investors are more likely to avoid company-specific pitfalls and participate in the positive trends influencing entire sectors and industries. Please keep in mind, however, that stocks fluctuate in price, and they may experience significant volatility at times. Looking forward, we believe that the Fund is well positioned for whatever lies ahead. In addition to our emphasis on certain defensive industry groups and bias toward the lower end of the large-cap range, we have recently increased our emphasis on stocks that are highly rated by independent rating agencies such as Standard & Poor's. As quantitative portfolio managers, we rely primarily on our quantitative stock scoring system when making investment decisions, not economic forecasts. Among the many benefits of this approach is our ability to disregard temporary near-term factors in favor of those that we believe influence individual stocks and market sectors over the long term. In our view, a long-term perspective such as ours may be particularly appropriate for retirement assets in variable annuity accounts, and is an important part of what makes Oppenheimer Main Street Growth & Income Fund/VA The Right Way to Invest. Oppenheimer Main Street Growth & Income Fund/VA 3 - -------------------------------------------------------------------------------- Statement of Investments June 30, 2001 (Unaudited) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 =============================================================================== Common Stocks--96.9% - ------------------------------------------------------------------------------- Basic Materials--1.1% - ------------------------------------------------------------------------------- Chemicals--0.7% Air Products & Chemicals, Inc. 28,800 $ 1,317,600 - ------------------------------------------------------------------------------- Cabot Corp. 4,000 144,080 - ------------------------------------------------------------------------------- Cabot Microelectronics Corp.(1) 18,000 1,116,000 - ------------------------------------------------------------------------------- Du Pont (E.I.) de Nemours & Co. 70,900 3,420,216 - ------------------------------------------------------------------------------- Eastman Chemical Co. 6,000 285,780 - ------------------------------------------------------------------------------- Ecolab, Inc. 5,300 217,141 - ------------------------------------------------------------------------------- Engelhard Corp. 11,000 283,690 - ------------------------------------------------------------------------------- Goodrich Corp. 16,800 638,064 - ------------------------------------------------------------------------------- Universal Corp. 3,500 138,810 --------------- 7,561,381 - ------------------------------------------------------------------------------- Metals--0.3% Alcan, Inc. 54,400 2,285,888 - ------------------------------------------------------------------------------- Alcoa, Inc. 24,900 981,060 - ------------------------------------------------------------------------------- Freeport-McMoRan Copper & Gold, Inc., Cl. A(1) 2,000 20,060 - ------------------------------------------------------------------------------- Freeport-McMoRan Copper & Gold, Inc., Cl. B(1) 3,500 38,675 - ------------------------------------------------------------------------------- Inco Ltd.(1) 700 12,082 - ------------------------------------------------------------------------------- Reliance Steel & Aluminum Co. 6,400 161,600 --------------- 3,499,365 - ------------------------------------------------------------------------------- Paper--0.1% Pactiv Corp.(1) 29,200 391,280 - ------------------------------------------------------------------------------- Rayonier, Inc. 6,800 315,860 - ------------------------------------------------------------------------------- Weyerhaeuser Co. 13,700 753,089 --------------- 1,460,229 - ------------------------------------------------------------------------------- Capital Goods--7.2% - ------------------------------------------------------------------------------- Aerospace/Defense--1.2% Alliant Techsystems, Inc.(1) 2,100 188,790 - ------------------------------------------------------------------------------- Boeing Co. 86,100 4,787,160 - ------------------------------------------------------------------------------- General Dynamics Corp. 30,800 2,396,548 - ------------------------------------------------------------------------------- Lockheed Martin Corp. 92,300 3,419,715 - ------------------------------------------------------------------------------- Precision Castparts Corp. 2,400 89,808 - ------------------------------------------------------------------------------- Raytheon Co. 58,500 1,553,175 --------------- 12,435,196 - ------------------------------------------------------------------------------- Electrical Equipment--3.7% AVX Corp. 37,500 787,500 - ------------------------------------------------------------------------------- EMCOR Group, Inc.(1) 4,300 155,445 - ------------------------------------------------------------------------------- Emerson Electric Co. 7,700 465,850 - ------------------------------------------------------------------------------- General Electric Co. 748,000 36,465,000 - ------------------------------------------------------------------------------- Molex, Inc., Cl. A 26,350 785,757 - ------------------------------------------------------------------------------- Rockwell International Corp. 17,600 670,912 --------------- 39,330,464 4 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - -------------------------------------------------------------------------------- Industrial Services--0.1% Miller (Herman), Inc. 13,000 $ 314,600 - -------------------------------------------------------------------------------- Professional Detailing, Inc.(1) 800 73,600 - -------------------------------------------------------------------------------- Teekay Shipping Corp. 4,400 176,088 - -------------------------------------------------------------------------------- Viad Corp. 3,900 102,960 --------------- 667,248 - -------------------------------------------------------------------------------- Manufacturing--2.2% American Standard Cos., Inc.(1) 48,100 2,890,810 - -------------------------------------------------------------------------------- Avery-Dennison Corp. 24,800 1,266,040 - -------------------------------------------------------------------------------- Ball Corp. 2,300 109,388 - -------------------------------------------------------------------------------- Bemis Co., Inc. 3,900 156,663 - -------------------------------------------------------------------------------- Caterpillar, Inc. 18,100 905,905 - -------------------------------------------------------------------------------- Cooper Industries, Inc. 23,400 926,406 - -------------------------------------------------------------------------------- Dover Corp. 29,400 1,106,910 - -------------------------------------------------------------------------------- Eaton Corp. 1,900 133,190 - -------------------------------------------------------------------------------- Honeywell International, Inc. 40,475 1,416,220 - -------------------------------------------------------------------------------- Mettler-Toledo International, Inc.(1) 3,900 168,675 - -------------------------------------------------------------------------------- Minnesota Mining & Manufacturing Co. 59,300 6,766,130 - -------------------------------------------------------------------------------- Oakley, Inc.(1) 3,000 55,500 - -------------------------------------------------------------------------------- Tektronix, Inc.(1) 25,800 700,470 - -------------------------------------------------------------------------------- Tyco International Ltd. 85,066 4,636,097 - -------------------------------------------------------------------------------- United Technologies Corp. 28,300 2,073,258 --------------- 23,311,662 - -------------------------------------------------------------------------------- Communication Services--2.7% - -------------------------------------------------------------------------------- Telecommunications: Long Distance--1.2% AT&T Corp. 36,200 796,400 - -------------------------------------------------------------------------------- Intermedia Communications, Inc.(1)(2) 1,230 17,411 - -------------------------------------------------------------------------------- Metro One Telecommunication, Inc.(1) 1,600 103,792 - -------------------------------------------------------------------------------- Sprint Corp. (Fon Group) 119,200 2,546,112 - -------------------------------------------------------------------------------- Verizon Communications, Inc. 178,056 9,525,996 - -------------------------------------------------------------------------------- WorldCom, Inc.-MCI Group(1) 1,204 19,384 - -------------------------------------------------------------------------------- WorldCom, Inc.-WorldCom Group(1) 30,100 427,420 --------------- 13,436,515 - -------------------------------------------------------------------------------- Telephone Utilities--1.2% BellSouth Corp. 152,800 6,153,256 - -------------------------------------------------------------------------------- SBC Communications, Inc. 160,500 6,429,630 --------------- 12,582,886 - -------------------------------------------------------------------------------- Telecommunications: Wireless--0.3% Amdocs Ltd.(1) 24,600 1,324,710 - -------------------------------------------------------------------------------- AT&T Wireless Group(1) 91,845 1,501,666 --------------- 2,826,376 Oppenheimer Main Street Growth & Income Fund/VA 5 - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - -------------------------------------------------------------------------------- Consumer Cyclicals--8.6% - -------------------------------------------------------------------------------- Autos & Housing--0.9% Bandag, Inc. 600 $ 16,380 - -------------------------------------------------------------------------------- Centex Construction Products, Inc. 1,400 45,500 - -------------------------------------------------------------------------------- Centex Corp. 20,100 819,075 - -------------------------------------------------------------------------------- D.R. Horton, Inc. 16,400 372,280 - -------------------------------------------------------------------------------- Ford Motor Co. 114,415 2,808,888 - -------------------------------------------------------------------------------- Fortune Brands, Inc. 11,400 437,304 - -------------------------------------------------------------------------------- General Motors Corp. 13,200 849,420 - -------------------------------------------------------------------------------- Johnson Controls, Inc. 2,000 144,940 - -------------------------------------------------------------------------------- KB Home 16,500 497,805 - -------------------------------------------------------------------------------- Lafarge Corp. 2,800 93,828 - -------------------------------------------------------------------------------- Lear Corp.(1) 9,200 321,080 - -------------------------------------------------------------------------------- NVR, Inc.(1) 8,600 1,272,800 - -------------------------------------------------------------------------------- Pulte Homes, Inc. 4,200 179,046 - -------------------------------------------------------------------------------- Ryland Group, Inc. (The) 13,400 678,040 - -------------------------------------------------------------------------------- Stanley Works (The) 5,100 213,588 - -------------------------------------------------------------------------------- Toll Brothers, Inc.(1) 22,900 900,199 - -------------------------------------------------------------------------------- Vulcan Materials Co. 1,400 75,250 - -------------------------------------------------------------------------------- Webb (Del E.) Corp.(1) 4,300 166,367 --------------- 9,891,790 - -------------------------------------------------------------------------------- Consumer Services--0.5% Cendant Corp.(1) 53,200 1,037,400 - -------------------------------------------------------------------------------- Dun & Bradstreet Corp.(1) 6,000 169,200 - -------------------------------------------------------------------------------- Expedia, Inc., Cl. A(1) 1,600 74,560 - -------------------------------------------------------------------------------- Fluor Corp. 16,200 731,430 - -------------------------------------------------------------------------------- H&R Block, Inc. 13,900 897,245 - -------------------------------------------------------------------------------- IMS Health, Inc. 56,700 1,615,950 - -------------------------------------------------------------------------------- Moody's Corp. 12,000 402,000 - -------------------------------------------------------------------------------- Omnicom Group, Inc. 9,900 851,400 - -------------------------------------------------------------------------------- Rent-A-Center, Inc.(1) 2,000 105,200 --------------- 5,884,385 6 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - -------------------------------------------------------------------------------- Leisure & Entertainment--1.0% Activision, Inc.(1) 3,900 $ 153,075 - -------------------------------------------------------------------------------- Brunswick Corp. 30,100 723,303 - -------------------------------------------------------------------------------- GTech Holdings Corp.(1) 4,800 170,448 - -------------------------------------------------------------------------------- Harley-Davidson, Inc. 71,100 3,347,388 - -------------------------------------------------------------------------------- Harrah's Entertainment, Inc.(1) 9,000 317,700 - -------------------------------------------------------------------------------- International Game Technology(1) 26,000 1,631,500 - -------------------------------------------------------------------------------- Marriott International, Inc., Cl. A 36,500 1,727,910 - -------------------------------------------------------------------------------- Mattel, Inc. 17,900 338,668 - -------------------------------------------------------------------------------- MGM Mirage, Inc.(1) 19,248 576,670 - -------------------------------------------------------------------------------- Park Place Entertainment Corp.(1) 80,300 971,630 - -------------------------------------------------------------------------------- Starwood Hotels & Resorts Worldwide, Inc. 14,400 536,832 - -------------------------------------------------------------------------------- WMS Industries, Inc.(1) 7,000 225,190 --------------- 10,720,314 - -------------------------------------------------------------------------------- Media--0.5% Deluxe Corp. 2,200 63,580 - -------------------------------------------------------------------------------- Harland (John H.) Co. 10,000 233,000 - -------------------------------------------------------------------------------- Harte-Hanks, Inc. 8,700 215,412 - -------------------------------------------------------------------------------- Havas Advertising SA, ADR(1) 5,255 57,174 - -------------------------------------------------------------------------------- Knight-Ridder, Inc. 8,300 492,190 - -------------------------------------------------------------------------------- McGraw-Hill, Inc. 15,400 1,018,710 - -------------------------------------------------------------------------------- New York Times Co., Cl. A 20,200 848,400 - -------------------------------------------------------------------------------- R.H. Donnelley Corp.(1) 11,200 358,400 - -------------------------------------------------------------------------------- Readers Digest Assn., Inc. (The), Cl. A 43,400 1,247,750 - -------------------------------------------------------------------------------- Tribune Co. 12,000 480,120 --------------- 5,014,736 - -------------------------------------------------------------------------------- Retail: General--2.8% Costco Wholesale Corp.(1) 16,200 665,496 - -------------------------------------------------------------------------------- Dillard's, Inc., Cl. A 21,000 320,670 - -------------------------------------------------------------------------------- Federated Department Stores, Inc.(1) 49,900 2,120,750 - -------------------------------------------------------------------------------- Kohl's Corp.(1) 61,800 3,876,714 - -------------------------------------------------------------------------------- May Department Stores Co. 73,000 2,500,980 - -------------------------------------------------------------------------------- Sears Roebuck & Co. 93,600 3,960,216 - -------------------------------------------------------------------------------- Wal-Mart Stores, Inc. 344,100 16,792,080 --------------- 30,236,906 Oppenheimer Main Street Growth & Income Fund/VA 7 - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - -------------------------------------------------------------------------------- Retail: Specialty--2.4% American Eagle Outfitters, Inc.(1) 17,700 $ 623,748 - -------------------------------------------------------------------------------- AnnTaylor Stores Corp.(1) 8,800 315,040 - -------------------------------------------------------------------------------- BJ's Wholesale Club, Inc.(1) 21,700 1,155,742 - -------------------------------------------------------------------------------- Chico's FAS, Inc.(1) 10,700 318,325 - -------------------------------------------------------------------------------- Christopher & Banks Corp.(1) 5,100 166,260 - -------------------------------------------------------------------------------- Copart, Inc.(1) 2,100 61,425 - -------------------------------------------------------------------------------- Gap, Inc. 105,000 3,045,000 - -------------------------------------------------------------------------------- Genesco, Inc.(1) 2,000 67,200 - -------------------------------------------------------------------------------- Home Depot, Inc. 212,700 9,901,185 - -------------------------------------------------------------------------------- Hot Topic, Inc.(1) 10,400 323,440 - -------------------------------------------------------------------------------- Intimate Brands, Inc., Cl. A 10,200 153,714 - -------------------------------------------------------------------------------- Limited, Inc. (The) 32,600 538,552 - -------------------------------------------------------------------------------- Men's Wearhouse, Inc. (The)(1) 2,500 69,000 - -------------------------------------------------------------------------------- Nike, Inc., Cl. B 32,000 1,343,680 - -------------------------------------------------------------------------------- Pacific Sunwear of California, Inc.(1) 4,500 100,935 - -------------------------------------------------------------------------------- Payless ShoeSource, Inc.(1) 1,650 106,755 - -------------------------------------------------------------------------------- Pier 1 Imports, Inc. 2,018 23,207 - -------------------------------------------------------------------------------- Reebok International Ltd.(1) 8,000 255,600 - -------------------------------------------------------------------------------- Ross Stores, Inc. 34,700 831,065 - -------------------------------------------------------------------------------- Skechers U.S.A., Inc., Cl. A(1) 14,000 409,220 - -------------------------------------------------------------------------------- Talbots, Inc. (The) 29,300 1,281,875 - -------------------------------------------------------------------------------- Target Corp. 79,100 2,736,860 - -------------------------------------------------------------------------------- Tiffany & Co. 10,600 383,932 - -------------------------------------------------------------------------------- Timberland Co., Cl. A(1) 2,500 98,775 - -------------------------------------------------------------------------------- TJX Cos., Inc. 60,300 1,921,761 - -------------------------------------------------------------------------------- Venator Group, Inc.(1) 600 9,237 --------------- 26,241,533 - -------------------------------------------------------------------------------- Textile/Apparel & Home Furnishings--0.5% Abercrombie & Fitch Co., Cl. A(1) 35,300 1,570,850 - -------------------------------------------------------------------------------- Coach, Inc.(1) 24,924 948,358 - -------------------------------------------------------------------------------- Jones Apparel Group, Inc.(1) 30,299 1,308,917 - -------------------------------------------------------------------------------- Liz Claiborne, Inc. 21,600 1,089,720 - -------------------------------------------------------------------------------- Tommy Hilfiger Corp.(1) 6,500 91,000 - -------------------------------------------------------------------------------- Too, Inc.(1) 8,157 223,502 - -------------------------------------------------------------------------------- VF Corp. 200 7,276 --------------- 5,239,623 - -------------------------------------------------------------------------------- Consumer Staples--10.3% - -------------------------------------------------------------------------------- Beverages--2.1% Anheuser-Busch Cos., Inc. 151,000 6,221,200 - -------------------------------------------------------------------------------- Coca-Cola Co. (The) 243,400 10,953,000 - -------------------------------------------------------------------------------- Constellation Brands, Inc., Cl. A(1) 5,400 221,400 - -------------------------------------------------------------------------------- Pepsi Bottling Group, Inc. (The) 14,300 573,430 - -------------------------------------------------------------------------------- PepsiCo, Inc. 95,000 4,199,000 --------------- 22,168,030 8 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of InvestmentS (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - -------------------------------------------------------------------------------- Broadcasting--0.2% AT&T Corp./Liberty Media Corp., Cl. A(1) 58,900 $ 1,030,161 - -------------------------------------------------------------------------------- EchoStar Communications Corp., Cl. A(1) 7,900 256,118 - -------------------------------------------------------------------------------- Gemstar-TV Guide International, Inc.(1) 8,200 349,320 - -------------------------------------------------------------------------------- General Motors Corp., Cl. H(1) 16,700 338,175 - -------------------------------------------------------------------------------- 1,973,774 - -------------------------------------------------------------------------------- Education--0.0% Apollo Group, Inc., Cl. A(1) 7,650 324,742 - -------------------------------------------------------------------------------- ITT Educational Services, Inc.(1) 4,700 211,500 --------------- 536,242 - -------------------------------------------------------------------------------- Entertainment--1.3% Applebee's International, Inc. 6,300 201,600 - -------------------------------------------------------------------------------- Brinker International, Inc.(1) 45,800 1,183,930 - -------------------------------------------------------------------------------- CEC Entertainment, Inc.(1) 8,800 434,280 - -------------------------------------------------------------------------------- Darden Restaurants, Inc. 49,100 1,369,890 - -------------------------------------------------------------------------------- Disney (Walt) Co. 10,200 294,678 - -------------------------------------------------------------------------------- McDonald's Corp. 155,000 4,194,300 - -------------------------------------------------------------------------------- Midway Games, Inc.(1) 300 5,550 - -------------------------------------------------------------------------------- P.F. Chang's China Bistro, Inc.(1) 7,100 269,090 - -------------------------------------------------------------------------------- Ruby Tuesday, Inc. 38,400 656,640 - -------------------------------------------------------------------------------- Ryan's Family Steak Houses, Inc.(1) 5,900 72,275 - -------------------------------------------------------------------------------- Starbucks Corp.(1) 45,400 1,044,200 - -------------------------------------------------------------------------------- THQ, Inc.(1) 3,400 202,742 - -------------------------------------------------------------------------------- Viacom, Inc., Cl. B(1) 60,830 3,147,952 - -------------------------------------------------------------------------------- Wendy's International, Inc. 30,100 768,754 --------------- 13,845,881 - -------------------------------------------------------------------------------- Food--2.4% Archer-Daniels-Midland Co. 72,600 943,800 - -------------------------------------------------------------------------------- Campbell Soup Co. 75,400 1,941,550 - -------------------------------------------------------------------------------- ConAgra Foods, Inc. 69,300 1,372,833 - -------------------------------------------------------------------------------- Heinz (H.J.) Co. 67,100 2,743,719 - -------------------------------------------------------------------------------- Hershey Foods Corp. 30,800 1,900,668 - -------------------------------------------------------------------------------- Kraft Foods, Inc., Cl. A(1) 93,000 2,883,000 - -------------------------------------------------------------------------------- Quaker Oats Co. 6,500 593,125 - -------------------------------------------------------------------------------- Ralston Purina Co. 12,000 360,240 - -------------------------------------------------------------------------------- Sara Lee Corp. 150,438 2,849,296 - -------------------------------------------------------------------------------- Sysco Corp. 172,200 4,675,230 - -------------------------------------------------------------------------------- Unilever NV, NY Shares 68,300 4,068,631 - -------------------------------------------------------------------------------- Wrigley William Jr. Co. 29,000 1,358,650 - -------------------------------------------------------------------------------- 25,690,742 Oppenheimer Main Street Growth & Income Fund/VA 9 - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - -------------------------------------------------------------------------------- Food & Drug Retailers--1.7% CVS Corp. 98,500 $ 3,802,100 - -------------------------------------------------------------------------------- Duane Reade, Inc.(1) 2,700 87,750 - -------------------------------------------------------------------------------- Express Scripts, Inc.(1) 13,400 737,402 - -------------------------------------------------------------------------------- Fleming Cos., Inc. 5,800 207,060 - -------------------------------------------------------------------------------- Kroger Co. (The)(1) 158,000 3,950,000 - -------------------------------------------------------------------------------- Safeway, Inc.(1) 101,100 4,852,800 - -------------------------------------------------------------------------------- Walgreen Co. 143,400 4,897,110 - -------------------------------------------------------------------------------- Whole Foods Market, Inc.(1) 3,200 86,720 - -------------------------------------------------------------------------------- Winn-Dixie Stores, Inc. 5,500 143,715 --------------- 18,764,657 - -------------------------------------------------------------------------------- Household Goods--1.0% Avon Products, Inc. 24,000 1,110,720 - -------------------------------------------------------------------------------- Colgate-Palmolive Co. 64,200 3,787,158 - -------------------------------------------------------------------------------- Energizer Holdings, Inc.(1) 3,300 75,735 - -------------------------------------------------------------------------------- Gillette Co. 50,900 1,475,591 - -------------------------------------------------------------------------------- Kimberly-Clark Corp. 20,700 1,157,130 - -------------------------------------------------------------------------------- Procter & Gamble Co. 50,900 3,247,420 --------------- 10,853,754 - -------------------------------------------------------------------------------- Tobacco--1.6% Philip Morris Cos., Inc. 247,400 12,555,550 - -------------------------------------------------------------------------------- R.J. Reynolds Tobacco Holdings, Inc. 78,900 4,307,940 - -------------------------------------------------------------------------------- UST, Inc. 12,100 349,206 --------------- 17,212,696 - -------------------------------------------------------------------------------- Energy--13.0% - -------------------------------------------------------------------------------- Energy Services--2.0% Baker Hughes, Inc. 13,600 455,600 - -------------------------------------------------------------------------------- BJ Services Co.(1) 49,400 1,401,972 - -------------------------------------------------------------------------------- CONSOL Energy, Inc. 11,400 288,420 - -------------------------------------------------------------------------------- ENSCO International, Inc. 212,400 4,970,160 - -------------------------------------------------------------------------------- Global Marine, Inc.(1) 147,300 2,744,199 - -------------------------------------------------------------------------------- Halliburton Co. 18,200 647,920 - -------------------------------------------------------------------------------- Helmerich & Payne, Inc. 3,200 98,624 - -------------------------------------------------------------------------------- Massey Energy Co. 5,800 114,608 - -------------------------------------------------------------------------------- Nabors Industries, Inc.(1) 10,900 405,480 - -------------------------------------------------------------------------------- Noble Drilling Corp.(1) 63,400 2,076,350 - -------------------------------------------------------------------------------- Peabody Energy Corp.(1) 10,500 343,875 - -------------------------------------------------------------------------------- Progress Energy, Inc., Contingent Value Obligation(1) 32,000 16,000 - -------------------------------------------------------------------------------- Santa Fe International Corp. 77,500 2,247,500 - -------------------------------------------------------------------------------- Schlumberger Ltd. 64,200 3,380,130 - -------------------------------------------------------------------------------- Smith International, Inc.(1) 16,600 994,340 - -------------------------------------------------------------------------------- Stolt Offshore SA, ADR(1) 64,400 788,900 - -------------------------------------------------------------------------------- Tidewater, Inc. 10,600 399,620 - -------------------------------------------------------------------------------- Weatherford International, Inc.(1) 6,800 326,400 --------------- 21,700,098 10 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - ------------------------------------------------------------------------------- Oil: Domestic--8.0% Amerada Hess Corp. 38,000 $ 3,070,400 - ------------------------------------------------------------------------------- Anadarko Petroleum Corp. 34,800 1,880,244 - ------------------------------------------------------------------------------- Ashland, Inc. 2,800 112,280 - ------------------------------------------------------------------------------- Brown (Tom), Inc.(1) 103,900 2,493,600 - ------------------------------------------------------------------------------- Burlington Resources, Inc. 61,100 2,440,945 - ------------------------------------------------------------------------------- Cabot Oil & Gas Corp., Cl. A 21,000 512,400 - ------------------------------------------------------------------------------- Chevron Corp. 78,900 7,140,450 - ------------------------------------------------------------------------------- Chieftain International, Inc.(1) 86,100 2,474,514 - ------------------------------------------------------------------------------- Conoco, Inc., Cl. A 77,100 2,174,220 - ------------------------------------------------------------------------------- Conoco, Inc., Cl. B 73,700 2,129,930 - ------------------------------------------------------------------------------- Devon Energy Corp. 59,600 3,129,000 - ------------------------------------------------------------------------------- EOG Resources, Inc. 75,300 2,676,915 - ------------------------------------------------------------------------------- Exxon Mobil Corp. 296,808 25,926,179 - ------------------------------------------------------------------------------- Frontier Oil Corp. 154,800 2,051,100 - ------------------------------------------------------------------------------- Gulf Canada Resources Ltd.(1) 200,000 1,618,345 - ------------------------------------------------------------------------------- Kerr-McGee Corp. 39,500 2,617,665 - ------------------------------------------------------------------------------- Murphy Oil Corp. 68,600 5,048,960 - ------------------------------------------------------------------------------- Newfield Exploration Co.(1) 24,800 795,088 - ------------------------------------------------------------------------------- Noble Affiliates, Inc. 2,200 77,770 - ------------------------------------------------------------------------------- Occidental Petroleum Corp. 91,100 2,422,349 - ------------------------------------------------------------------------------- Phillips Petroleum Co. 45,800 2,610,600 - ------------------------------------------------------------------------------- St. Mary Land & Exploration Co. 1,200 28,032 - ------------------------------------------------------------------------------- Stone Energy Corp.(1) 24,400 1,080,920 - ------------------------------------------------------------------------------- Tesoro Petroleum Corp.(1) 29,000 365,400 - ------------------------------------------------------------------------------- Texaco, Inc. 82,700 5,507,820 - ------------------------------------------------------------------------------- Tosco Corp. 46,600 2,052,730 - ------------------------------------------------------------------------------- Ultramar Diamond Shamrock Corp. 4,900 231,525 - ------------------------------------------------------------------------------- Unocal Corp. 37,700 1,287,455 - ------------------------------------------------------------------------------- USX-Marathon Group, Inc. 50,700 1,496,157 ---------------- 85,452,993 - ------------------------------------------------------------------------------- Oil: International--3.0% Anderson Exploration Ltd.(1) 252,979 5,109,256 - ------------------------------------------------------------------------------- Canadian 88 Energy Corp.(1) 580,000 859,910 - ------------------------------------------------------------------------------- Canadian Hunter Exploration Ltd.(1) 38,400 936,215 - ------------------------------------------------------------------------------- Canadian Hunter Exploration Ltd.(1) 78,500 1,913,877 - ------------------------------------------------------------------------------- Canadian Natural Resources Ltd. 152,184 4,497,531 - ------------------------------------------------------------------------------- Compton Petroleum Corp.(1) 240,000 692,673 - ------------------------------------------------------------------------------- Husky Energy, Inc. 56,229 600,972 - ------------------------------------------------------------------------------- Paramount Resources Ltd.(1) 147,700 1,450,138 - ------------------------------------------------------------------------------- Rio Alto Exploration Ltd.(1) 78,450 1,356,953 - ------------------------------------------------------------------------------- Royal Dutch Petroleum Co., NY Shares 179,200 10,441,984 - ------------------------------------------------------------------------------- Talisman Energy, Inc. 112,700 4,288,630 - ------------------------------------------------------------------------------- Varco International, Inc.(1) 26,000 483,860 ---------------- 32,631,999 Oppenheimer Main Street Growth & Income Fund/VA 11 - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - -------------------------------------------------------------------------------- Financial--18.9% - -------------------------------------------------------------------------------- Banks--3.8% Astoria Financial Corp. 3,800 $ 209,000 - -------------------------------------------------------------------------------- Bank of America Corp. 105,200 6,315,156 - -------------------------------------------------------------------------------- Bank of New York Co., Inc. (The) 20,200 969,600 - -------------------------------------------------------------------------------- Banknorth Group, Inc. 3,600 81,540 - -------------------------------------------------------------------------------- BB&T Corp. 35,900 1,317,530 - -------------------------------------------------------------------------------- Charter One Financial, Inc. 18,600 593,340 - -------------------------------------------------------------------------------- City National Corp. 1,700 75,293 - -------------------------------------------------------------------------------- Comerica, Inc. 42,400 2,442,240 - -------------------------------------------------------------------------------- Commerce Bancorp, Inc. 2,800 196,280 - -------------------------------------------------------------------------------- Cullen/Frost Bankers, Inc. 3,300 111,705 - -------------------------------------------------------------------------------- Fifth Third Bancorp 29,044 1,744,092 - -------------------------------------------------------------------------------- First Tennessee National Corp. 8,500 295,035 - -------------------------------------------------------------------------------- First Union Corp. 9,600 335,424 - -------------------------------------------------------------------------------- FleetBoston Financial Corp. 28,000 1,104,600 - -------------------------------------------------------------------------------- Hibernia Corp., Cl. A 5,000 89,000 - -------------------------------------------------------------------------------- Investors Financial Services Corp. 2,700 180,900 - -------------------------------------------------------------------------------- J.P. Morgan Chase & Co. 89,900 4,009,540 - -------------------------------------------------------------------------------- Legg Mason, Inc. 4,600 228,896 - -------------------------------------------------------------------------------- M&T Bank Corp. 2,300 173,650 - -------------------------------------------------------------------------------- Mellon Financial Corp. 84,200 3,873,200 - -------------------------------------------------------------------------------- National City Corp. 51,100 1,572,858 - -------------------------------------------------------------------------------- North Fork Bancorp, Inc. 15,300 474,300 - -------------------------------------------------------------------------------- Northern Trust Corp. 24,200 1,512,500 - -------------------------------------------------------------------------------- PNC Financial Services Group 80,300 5,282,937 - -------------------------------------------------------------------------------- Prosperity Bancshares, Inc. 67,500 1,615,275 - -------------------------------------------------------------------------------- SouthTrust Corp. 9,400 244,400 - -------------------------------------------------------------------------------- State Street Corp. 26,700 1,321,383 - -------------------------------------------------------------------------------- TCF Financial Corp. 4,600 213,026 - -------------------------------------------------------------------------------- U.S. Bancorp 51,470 1,173,001 - -------------------------------------------------------------------------------- Wachovia Corp. 3,000 213,450 - -------------------------------------------------------------------------------- Wells Fargo & Co. 55,900 2,595,437 - -------------------------------------------------------------------------------- Zions Bancorp 2,500 147,500 --------------- 40,712,088 12 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - ------------------------------------------------------------------------------ Diversified Financial--7.6% Affiliated Managers Group, Inc.(1) 2,300 $ 141,450 - ------------------------------------------------------------------------------ AMBAC Financial Group, Inc. 14,400 838,080 - ------------------------------------------------------------------------------ American Express Co. 80,700 3,131,160 - ------------------------------------------------------------------------------ AmeriCredit Corp.(1) 16,000 831,200 - ------------------------------------------------------------------------------ Bear Stearns Cos., Inc. 17,700 1,043,769 - ------------------------------------------------------------------------------ Capital One Financial Corp. 57,600 3,456,000 - ------------------------------------------------------------------------------ Citigroup, Inc. 354,066 18,708,847 - ------------------------------------------------------------------------------ Concord EFS, Inc.(1) 5,000 260,050 - ------------------------------------------------------------------------------ Countrywide Credit Industries, Inc. 41,400 1,899,432 - ------------------------------------------------------------------------------ eFunds Corp.(1) 6,213 115,562 - ------------------------------------------------------------------------------ Equifax, Inc. 3,500 128,380 - ------------------------------------------------------------------------------ Fannie Mae 124,500 10,601,175 - ------------------------------------------------------------------------------ Franklin Resources, Inc. 11,600 530,932 - ------------------------------------------------------------------------------ Freddie Mac 112,800 7,896,000 - ------------------------------------------------------------------------------ Goldman Sachs Group, Inc. (The) 32,600 2,797,080 - ------------------------------------------------------------------------------ Heller Financial, Inc. 3,800 152,000 - ------------------------------------------------------------------------------ Household International, Inc. 26,000 1,734,200 - ------------------------------------------------------------------------------ Instinet Group, Inc.(1) 17,200 320,608 - ------------------------------------------------------------------------------ John Hancock Financial Services, Inc. 81,700 3,289,242 - ------------------------------------------------------------------------------ Lehman Brothers Holdings, Inc. 64,300 4,999,325 - ------------------------------------------------------------------------------ MBNA Corp. 12,700 418,465 - ------------------------------------------------------------------------------ Merrill Lynch & Co., Inc. 35,900 2,127,075 - ------------------------------------------------------------------------------ MGIC Investment Corp. 32,600 2,368,064 - ------------------------------------------------------------------------------ Morgan Stanley Dean Witter & Co. 66,400 4,264,872 - ------------------------------------------------------------------------------ Neuberger Berman, Inc. 1,200 81,600 - ------------------------------------------------------------------------------ PMI Group, Inc. (The) 49,700 3,611,202 - ------------------------------------------------------------------------------ Providian Financial Corp. 60,500 3,581,600 - ------------------------------------------------------------------------------ SEI Investments Co. 15,000 711,000 - ------------------------------------------------------------------------------ Stilwell Financial, Inc. 31,600 1,060,496 - ------------------------------------------------------------------------------ USA Education, Inc. 12,500 912,500 --------------- 82,011,366 13 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - -------------------------------------------------------------------------------- Insurance--6.2% Aetna, Inc.(1) 14,000 $ 362,180 - -------------------------------------------------------------------------------- AFLAC, Inc. 142,300 4,481,027 - -------------------------------------------------------------------------------- Allmerica Financial Corp. 8,800 506,000 - -------------------------------------------------------------------------------- Allstate Corp. 167,400 7,363,926 - -------------------------------------------------------------------------------- American General Corp. 109,800 5,100,210 - -------------------------------------------------------------------------------- American International Group, Inc. 136,066 11,701,676 - -------------------------------------------------------------------------------- Aon Corp. 7,200 252,000 - -------------------------------------------------------------------------------- Chubb Corp. 23,100 1,788,633 - -------------------------------------------------------------------------------- Cigna Corp. 57,600 5,519,232 - -------------------------------------------------------------------------------- Cincinnati Financial Corp. 8,500 335,750 - -------------------------------------------------------------------------------- Everest Re Group Ltd. 5,100 381,480 - -------------------------------------------------------------------------------- Fidelity National Financial, Inc. 38,800 953,316 - -------------------------------------------------------------------------------- Gallagher (Arthur J.) & Co. 6,200 161,200 - -------------------------------------------------------------------------------- Hartford Financial Services Group, Inc. 66,300 4,534,920 - -------------------------------------------------------------------------------- Jefferson-Pilot Corp. 20,850 1,007,472 - -------------------------------------------------------------------------------- Lincoln National Corp. 46,200 2,390,850 - -------------------------------------------------------------------------------- Loews Corp. 63,300 4,078,419 - -------------------------------------------------------------------------------- Marsh & McLennan Cos., Inc. 24,700 2,494,700 - -------------------------------------------------------------------------------- MBIA, Inc. 22,350 1,244,448 - -------------------------------------------------------------------------------- MetLife, Inc. 183,000 5,669,340 - -------------------------------------------------------------------------------- Old Republic International Corp. 100 2,900 - -------------------------------------------------------------------------------- Phoenix Cos., Inc. (The)(1) 24,500 455,700 - -------------------------------------------------------------------------------- Progressive Corp. 9,600 1,297,824 - -------------------------------------------------------------------------------- St. Paul Cos., Inc. 76,350 3,870,182 - -------------------------------------------------------------------------------- UnumProvident Corp. 8,200 263,384 --------------- 66,216,769 - -------------------------------------------------------------------------------- Real Estate Investment Trusts--0.0% Indymac Mortgage Holdings, Inc. 2,800 75,040 - -------------------------------------------------------------------------------- Savings & Loans--1.3% Dime Bancorp, Inc. 37,000 1,378,250 - -------------------------------------------------------------------------------- Golden State Bancorp, Inc. 72,800 2,242,240 - -------------------------------------------------------------------------------- Golden West Financial Corp. 45,600 2,929,344 - -------------------------------------------------------------------------------- Greenpoint Financial Corp. 7,100 272,640 - -------------------------------------------------------------------------------- Washington Mutual, Inc. 193,350 7,260,293 --------------- 14,082,767 14 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - -------------------------------------------------------------------------------- Healthcare--13.6% - -------------------------------------------------------------------------------- Healthcare/Drugs--11.0% Abbott Laboratories 43,300 $ 2,078,833 - -------------------------------------------------------------------------------- American Home Products Corp. 43,400 2,536,296 - -------------------------------------------------------------------------------- Amgen, Inc.(1) 111,000 6,735,480 - -------------------------------------------------------------------------------- Biogen, Inc.(1) 29,200 1,587,312 - -------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 210,100 10,988,230 - -------------------------------------------------------------------------------- Chiron Corp.(1) 35,200 1,795,200 - -------------------------------------------------------------------------------- CIMA Labs, Inc.(1) 900 70,650 - -------------------------------------------------------------------------------- Forest Laboratories, Inc.(1) 60,000 4,260,000 - -------------------------------------------------------------------------------- Genentech, Inc.(1) 87,700 4,832,270 - -------------------------------------------------------------------------------- Genzyme Corp. (General Division)(1) 33,900 2,067,900 - -------------------------------------------------------------------------------- HCA, Inc. 161,500 7,298,185 - -------------------------------------------------------------------------------- Invitrogen Corp.(1) 5,750 412,850 - -------------------------------------------------------------------------------- IVAX Corp.(1) 58,550 2,283,450 - -------------------------------------------------------------------------------- Johnson & Johnson 319,806 15,990,300 - -------------------------------------------------------------------------------- King Pharmaceuticals, Inc.(1) 3,100 166,625 - -------------------------------------------------------------------------------- LifePoint Hospitals, Inc.(1) 5,400 239,112 - -------------------------------------------------------------------------------- Lilly (Eli) & Co. 115,600 8,554,400 - -------------------------------------------------------------------------------- Merck & Co., Inc. 249,000 15,913,590 - -------------------------------------------------------------------------------- Monsanto Co. 4,400 162,800 - -------------------------------------------------------------------------------- Pfizer, Inc. 412,200 16,508,610 - -------------------------------------------------------------------------------- Pharmacia Corp. 47,800 2,196,410 - -------------------------------------------------------------------------------- Schering-Plough Corp. 156,500 5,671,560 - -------------------------------------------------------------------------------- Scios-Nova, Inc.(1) 10,500 262,605 - -------------------------------------------------------------------------------- Taro Pharmaceutical Industries Ltd.(1) 6,600 577,896 - -------------------------------------------------------------------------------- UnitedHealth Group, Inc. 77,300 4,773,275 - -------------------------------------------------------------------------------- XOMA Ltd.(1) 300 5,118 - -------------------------------------------------------------------------------- 117,968,957 --------------- Healthcare/Supplies & Services--2.6% AdvancePCS(1) 3,200 204,960 - -------------------------------------------------------------------------------- Alberto-Culver Co., Cl. B 2,000 84,080 - -------------------------------------------------------------------------------- Allergan, Inc. 44,200 3,779,100 - -------------------------------------------------------------------------------- Baxter International, Inc. 94,800 4,645,200 - -------------------------------------------------------------------------------- Beckman Coulter, Inc. 7,200 293,760 - -------------------------------------------------------------------------------- Biosite Diagnostics, Inc.(1) 500 -- - -------------------------------------------------------------------------------- Cardinal Health, Inc. 26,100 1,800,900 - -------------------------------------------------------------------------------- Caremark RX, Inc.(1) 28,300 465,535 - -------------------------------------------------------------------------------- Cytyc Corp.(1) 10,900 251,245 - -------------------------------------------------------------------------------- First Health Group Corp.(1) 2,600 62,712 - -------------------------------------------------------------------------------- Health Management Assn., Inc., Cl. A(1) 11,700 246,168 - -------------------------------------------------------------------------------- Health Net, Inc.(1) 3,400 59,160 - -------------------------------------------------------------------------------- Laboratory Corp. of America Holdings, Inc.(1) 11,800 907,420 Oppenheimer Main Street Growth & Income Fund/VA 15 - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - ------------------------------------------------------------------------------- Healthcare/Supplies & Services (continued) Lincare Holdings, Inc. 6,600 $ 198,066 - ------------------------------------------------------------------------------- Manor Care, Inc.(1) 15,600 495,300 - ------------------------------------------------------------------------------- Medtronic, Inc. 12,100 556,721 - ------------------------------------------------------------------------------- Oxford Health Plans, Inc.(1) 48,800 1,395,680 - ------------------------------------------------------------------------------- PerkinElmer, Inc. 16,400 451,492 - ------------------------------------------------------------------------------- Pharmaceutical Product Development, Inc.(1) 10,400 317,304 - ------------------------------------------------------------------------------- Quest Diagnostics, Inc.(1) 18,000 1,347,300 - ------------------------------------------------------------------------------- ResMed, Inc.(1) 6,600 333,630 - ------------------------------------------------------------------------------- Schein (Henry), Inc.(1) 2,400 96,144 - ------------------------------------------------------------------------------- St. Jude Medical, Inc.(1) 3,700 222,000 - ------------------------------------------------------------------------------- Stryker Corp. 7,800 427,830 - ------------------------------------------------------------------------------- SurModics, Inc.(1) 1,100 64,680 - ------------------------------------------------------------------------------- Techne Corp.(1) 5,500 178,750 - ------------------------------------------------------------------------------- Tenet Healthcare Corp.(1) 102,600 5,293,134 - ------------------------------------------------------------------------------- Triad Hospitals, Inc.(1) 5,900 173,873 - ------------------------------------------------------------------------------- Trigon Healthcare, Inc.(1) 19,900 1,290,515 - ------------------------------------------------------------------------------- Universal Health Services, Inc., Cl. B(1) 28,900 1,314,950 - ------------------------------------------------------------------------------- Varian Medical Systems, Inc.(1) 900 64,350 - ------------------------------------------------------------------------------- WellPoint Health Networks, Inc.(1) 13,000 1,225,120 --------------- 28,247,079 - ------------------------------------------------------------------------------- Technology--12.7% - ------------------------------------------------------------------------------- Computer Hardware--2.8% Agilent Technologies, Inc.(1) 17,928 582,660 - ------------------------------------------------------------------------------- Compaq Computer Corp. 180,100 2,789,749 - ------------------------------------------------------------------------------- Dell Computer Corp.(1) 147,500 3,857,125 - ------------------------------------------------------------------------------- Digital Lightwave, Inc.(1) 5,400 199,584 - ------------------------------------------------------------------------------- EMC Corp.(1) 68,900 2,001,545 - ------------------------------------------------------------------------------- Hewlett-Packard Co. 111,900 3,200,340 - ------------------------------------------------------------------------------- International Business Machines Corp. 145,200 16,407,600 - ------------------------------------------------------------------------------- Microsemi Corp.(1) 3,800 269,800 - ------------------------------------------------------------------------------- Pitney Bowes, Inc. 11,900 501,228 - ------------------------------------------------------------------------------- Pixelworks, Inc.(1) 6,300 225,162 - ------------------------------------------------------------------------------- Read-Rite Corp.(1) 3,200 16,800 - ------------------------------------------------------------------------------- Seagate Technology International, Inc. (escrow shares)(1)(2) 31,000 -- --------------- 30,051,593 - ------------------------------------------------------------------------------- Computer Services--1.0% Affiliated Computer Services, Inc., Cl. A(1) 2,600 186,966 - ------------------------------------------------------------------------------- Automatic Data Processing, Inc. 40,300 2,002,910 - ------------------------------------------------------------------------------- DST Systems, Inc.(1) 11,300 595,510 - ------------------------------------------------------------------------------- First Data Corp. 68,700 4,413,975 - ------------------------------------------------------------------------------- Paychex, Inc. 83,850 3,354,000 --------------- 10,553,361 16 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - -------------------------------------------------------------------------------- Computer Software--6.0% Adobe Systems, Inc. 52,200 $ 2,453,400 - -------------------------------------------------------------------------------- AOL Time Warner, Inc.(1) 268,680 14,240,040 - -------------------------------------------------------------------------------- Axcelis Technologies, Inc.(1) 7,500 111,000 - -------------------------------------------------------------------------------- BEA Systems, Inc.(1) 15,600 479,076 - -------------------------------------------------------------------------------- Cadence Design Systems, Inc.(1) 8,900 165,807 - -------------------------------------------------------------------------------- Electronic Data Systems Corp. 57,500 3,593,750 - -------------------------------------------------------------------------------- Manugistics Group, Inc.(1) 5,300 133,030 - -------------------------------------------------------------------------------- McData Corp., Cl. A(1) 4,887 85,767 - -------------------------------------------------------------------------------- Microsoft Corp.(1) 452,600 33,039,800 - -------------------------------------------------------------------------------- Oracle Corp.(1) 428,200 8,135,800 - -------------------------------------------------------------------------------- Peoplesoft, Inc.(1) 12,000 590,760 - -------------------------------------------------------------------------------- Sabre Holdings Corp.(1) 18,200 910,000 - -------------------------------------------------------------------------------- SERENA Software, Inc.(1) 2,400 87,216 - -------------------------------------------------------------------------------- Veritas Software Corp.(1) 9,442 628,176 --------------- 64,653,622 - -------------------------------------------------------------------------------- Communications Equipment--0.7% BISYS Group, Inc. (The)(1) 2,900 171,100 - -------------------------------------------------------------------------------- Cisco Systems, Inc.(1) 311,700 5,672,940 - -------------------------------------------------------------------------------- Nortel Networks Corp. 75,200 683,568 - -------------------------------------------------------------------------------- Scientific-Atlanta, Inc. 22,000 893,200 --------------- 7,420,808 - -------------------------------------------------------------------------------- Electronics--1.8% Advanced Micro Devices, Inc.(1) 45,000 1,299,600 - -------------------------------------------------------------------------------- Analog Devices, Inc.(1) 31,900 1,379,675 - -------------------------------------------------------------------------------- Grainger (W.W.), Inc. 6,000 246,960 - -------------------------------------------------------------------------------- Intel Corp. 359,200 10,506,600 - -------------------------------------------------------------------------------- Linear Technology Corp. 37,700 1,667,094 - -------------------------------------------------------------------------------- Maxim Integrated Products, Inc.(1) 16,500 729,465 - -------------------------------------------------------------------------------- Micron Technology, Inc.(1) 35,800 1,471,380 - -------------------------------------------------------------------------------- NVIDIA Corp.(1) 5,100 473,025 - -------------------------------------------------------------------------------- Xilinx, Inc.(1) 30,300 1,249,572 --------------- 19,023,371 - -------------------------------------------------------------------------------- Photography--0.4% Eastman Kodak Co. 86,100 4,019,148 - -------------------------------------------------------------------------------- Transportation--2.0% Air Transportation--0.7% Continental Airlines, Inc., Cl. B(1) 63,258 3,115,457 - -------------------------------------------------------------------------------- Southwest Airlines Co. 230,200 4,256,398 --------------- 7,371,855 Oppenheimer Main Street Growth & Income Fund/VA 17 - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - ------------------------------------------------------------------------------ Railroads & Truckers--0.5% Burlington Northern Santa Fe Corp. 51,300 $ 1,547,721 - ------------------------------------------------------------------------------ CSX Corp. 6,000 217,440 - ------------------------------------------------------------------------------ Union Pacific Corp. 55,000 3,020,050 - ------------------------------------------------------------------------------ XTRA Corp.(1) 18,200 902,720 --------------- 5,687,931 - ------------------------------------------------------------------------------ Shipping--0.8% Expeditors International of Washington, Inc. 1,800 107,998 - ------------------------------------------------------------------------------ FedEx Corp.(1) 47,700 1,917,540 - ------------------------------------------------------------------------------ United Parcel Service, Inc., Cl. B 119,000 6,878,200 --------------- 8,903,738 - ------------------------------------------------------------------------------ Utilities--6.8% - ------------------------------------------------------------------------------ Electric Utilities--5.2% Allegheny Energy, Inc. 24,000 1,158,000 - ------------------------------------------------------------------------------ ALLETE, Inc. 5,000 112,500 - ------------------------------------------------------------------------------ Ameren Corp. 17,700 755,790 - ------------------------------------------------------------------------------ American Electric Power Co., Inc. 79,200 3,656,664 - ------------------------------------------------------------------------------ Calpine Corp.(1) 43,484 1,643,695 - ------------------------------------------------------------------------------ Cinergy Corp. 12,600 440,370 - ------------------------------------------------------------------------------ CMS Energy Corp. 9,000 250,650 - ------------------------------------------------------------------------------ Conectiv, Inc. 11,900 257,040 - ------------------------------------------------------------------------------ Consolidated Edison Co. of New York, Inc. 26,400 1,050,720 - ------------------------------------------------------------------------------ Constellation Energy Group, Inc. 6,600 281,160 - ------------------------------------------------------------------------------ Dominion Resources, Inc. 72,000 4,329,360 - ------------------------------------------------------------------------------ DPL, Inc. 25,000 724,000 - ------------------------------------------------------------------------------ DTE Energy Co. 38,100 1,769,364 - ------------------------------------------------------------------------------ Duke Energy Corp. 142,096 5,543,165 - ------------------------------------------------------------------------------ Energy East Corp. 4,900 102,459 - ------------------------------------------------------------------------------ Entergy Corp. 57,700 2,215,103 - ------------------------------------------------------------------------------ Exelon Corp. 91,224 5,849,283 - ------------------------------------------------------------------------------ FirstEnergy Corp. 39,400 1,267,104 - ------------------------------------------------------------------------------ FPL Group, Inc. 56,900 3,425,949 - ------------------------------------------------------------------------------ KeySpan Corp. 3,900 142,272 - ------------------------------------------------------------------------------ Mirant Corp.(1) 49,455 1,701,252 - ------------------------------------------------------------------------------ Montana Power Co. 5,000 58,000 - ------------------------------------------------------------------------------ NRG Energy, Inc.(1) 13,000 287,040 - ------------------------------------------------------------------------------ Peoples Energy Corp. 100 4,020 - ------------------------------------------------------------------------------ Pinnacle West Capital Corp. 4,800 227,520 - ------------------------------------------------------------------------------ PPL Corp. 52,000 2,860,000 - ------------------------------------------------------------------------------ Progress Energy, Inc. 13,800 619,896 - ------------------------------------------------------------------------------ Public Service Enterprise Group, Inc. 67,200 3,286,080 18 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) - -------------------------------------------------------------------------------- Market Value Shares See Note 1 - -------------------------------------------------------------------------------- Electric Utilities (continued) Reliant Energy, Inc. 95,000 $ 3,059,950 - -------------------------------------------------------------------------------- Southern Co. 119,300 2,773,725 - -------------------------------------------------------------------------------- Teco Energy, Inc. 3,000 91,500 - -------------------------------------------------------------------------------- TXU Corp. 81,800 3,941,942 - -------------------------------------------------------------------------------- Xcel Energy, Inc. 64,600 1,837,870 --------------- 55,723,443 - -------------------------------------------------------------------------------- Gas Utilities--1.6% Dynegy, Inc. 69,700 3,241,050 - -------------------------------------------------------------------------------- El Paso Corp. 56,051 2,944,920 - -------------------------------------------------------------------------------- Enron Corp. 74,500 3,650,500 - -------------------------------------------------------------------------------- Equitable Resources, Inc. 7,200 239,832 - -------------------------------------------------------------------------------- Kinder Morgan, Inc. 24,000 1,206,000 - -------------------------------------------------------------------------------- NICOR, Inc. 5,900 229,982 - -------------------------------------------------------------------------------- NiSource, Inc. 32,300 882,759 - -------------------------------------------------------------------------------- Questar Corp. 10,800 267,408 - -------------------------------------------------------------------------------- Western Gas Resources, Inc. 3,000 97,800 - -------------------------------------------------------------------------------- Williams Cos., Inc. (The) 130,800 4,309,860 --------------- 17,070,111 --------------- Total Common Stocks (Cost $990,164,707) 1,040,964,522 Units ================================================================================ Rights, Warrants and Certificates--0.0% - -------------------------------------------------------------------------------- Dime Bancorp, Inc. Wts., Exp. 1/2/10 (Cost $0) 31,900 8,932 Principal Amount ================================================================================ Repurchase Agreements--5.0% - -------------------------------------------------------------------------------- Repurchase agreement with Banque Nationale De Paris, 3.96%, dated 6/29/01, to be repurchased at $53,912,785 on 7/2/01, collateralized by U.S. Treasury Bonds, 5.50%-8.75%, 5/15/20-8/15/28, with a value of $27,043,697, U.S. Treasury Nts., 4%-6.375%, 12/31/01-11/15/04, with a value of $14,718,113 and U.S. Treasury Bills, 9/27/01, with a value of $13,350,143 (Cost $53,895,000) $ 53,895,000 53,895,000 - -------------------------------------------------------------------------------- Total Investments, at Value (Cost $1,044,059,707) 101.9% 1,094,868,454 - -------------------------------------------------------------------------------- Liabilities in Excess of Other Assets (1.9) (20,216,171) ------------- --------------- Net Assets 100.0% $ 1,074,652,283 ============= =============== (1) Non-income-producing security. (2) Identifies issues considered to be illiquid or restricted--See Note 5 of Notes to Financial Statements. See accompanying Notes to Financial Statements. Oppenheimer Main Street Growth & Income Fund/VA 19 - -------------------------------------------------------------------------------- Statement of Assets and Liabilities June 30, 2001 (Unaudited) - --------------------------------------------------------------------------------
===================================================================================================================== Assets Investments, at value (cost $1,044,059,707)--see accompanying statement $ 1,094,868,454 - --------------------------------------------------------------------------------------------------------------------- Cash 19,516 - --------------------------------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold 2,034,663 Interest and dividends 888,973 Shares of beneficial interest sold 662,674 Other 4,160 --------------- Total assets 1,098,478,440 ===================================================================================================================== Liabilities Payables and other liabilities: Investments purchased 22,767,996 Shares of beneficial interest redeemed 958,905 Shareholder reports 49,083 Distribution and service plan fees 2,573 Other 47,600 --------------- Total liabilities 23,826,157 ===================================================================================================================== Net Assets $ 1,074,652,283 =============== ===================================================================================================================== Composition of Net Assets Par value of shares of beneficial interest $ 54,063 - --------------------------------------------------------------------------------------------------------------------- Additional paid-in capital 1,170,154,009 - --------------------------------------------------------------------------------------------------------------------- Undistributed (overdistributed) net investment income 3,156,956 - --------------------------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) on investments and foreign currency transactions (149,521,533) - --------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) on investments and translation of - --------------------------------------------------------------------------------------------------------------------- assets and liabilities denominated in foreign currencies 50,808,788 - -------------------------------------------------------------------------------------------------------------------- Net Assets $ 1,074,652,283 =============== ===================================================================================================================== Net Asset Value Per Share Non-Service shares: Net asset value, redemption price per share and offering price per share (based on net assets of $1,063,647,411 and 53,508,162 shares of beneficial interest outstanding) $ 19.88 - --------------------------------------------------------------------------------------------------------------------- Service shares: Net asset value, redemption price per share and offering price per share (based on net assets of $11,004,872 and 554,506 shares of beneficial interest outstanding) $ 19.85
See accompanying Notes to Financial Statements. 20 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Statement of Operations For the Six Months Ended June 30, 2001(Unaudited) - -------------------------------------------------------------------------------- =============================================================================== Investment Income Dividends (net of foreign withholding taxes of $38,328) $ 5,545,078 - ------------------------------------------------------------------------------- Interest 1,383,393 --------------- Total income 6,928,471 =============================================================================== Expenses Management fees 3,492,343 - ------------------------------------------------------------------------------- Distribution and service plan fees: Service shares 3,620 - ------------------------------------------------------------------------------- Shareholder reports 141,512 - ------------------------------------------------------------------------------- Custodian fees and expenses 15,602 - ------------------------------------------------------------------------------- Trustees' compensation 6,127 - ------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees 3,191 - ------------------------------------------------------------------------------- Other 87,073 --------------- Total expenses 3,749,468 Less reduction to custodian expenses (2,517) --------------- Net expenses 3,746,951 =============================================================================== Net Investment Income 3,181,520 =============================================================================== Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments (114,279,124) Foreign currency transactions (147,579) --------------- Net realized gain (loss) (114,426,703) - ------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments 47,990,778 Translation of assets and liabilities denominated in foreign currencies (144,893) --------------- Net change 47,845,885 --------------- Net realized and unrealized gain (loss) (66,580,818) =============================================================================== Net Decrease in Net Assets Resulting from Operations $ (63,399,298) =============== See accompanying Notes to Financial Statements. Oppenheimer Main Street Growth & Income Fund/VA 21 - -------------------------------------------------------------------------------- Statements of Changes in Net Assets - --------------------------------------------------------------------------------
Six Months Ended Year Ended June 30, 2001 December 31, (Unaudited) 2000 ===================================================================================================================== Operations Net investment income (loss) $ 3,181,520 $ 5,587,981 - -------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) (114,426,703) (33,564,078) - --------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) 47,845,885 (63,504,788) -------------- --------------- Net increase (decrease) in net assets resulting from operations (63,399,298) (91,480,885) ===================================================================================================================== Dividends and/or Distributions to Shareholders Dividends from net investment income: Non-Service shares (5,518,418) 2,497,726) Service shares (19,362) -- - --------------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Non-Service shares -- (32,976,915) Service shares -- -- ===================================================================================================================== Beneficial Interest Transactions Net increase (decrease) in net assets resulting from beneficial interest transactions: Non-Service shares 122,469,777 581,387,859 Service shares 9,598,280 1,777,939 ===================================================================================================================== Net Assets Total increase 63,130,979 456,210,272 - -------------------------------------------------------------------------------------------------------------------- Beginning of period 1,011,521,304 555,311,032 -------------- --------------- End of period [including undistributed (overdistributed) net investment income of $3,156,956 and $5,513,216, respectively] $1,074,652,283 $ 1,011,521,304 ============== ================
See accompanying Notes to Financial Statements. 22 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Financial Highlights - --------------------------------------------------------------------------------
Six Months Ended June 30, 2001 Year Ended December 31, Non-Service shares (Unaudited) 2000 1999 1998 1997 1996 ================================================================================================================================ Per Share Operating Data Net asset value, beginning of period $21.26 $24.63 $20.48 $20.58 $16.37 $12.51 - -------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .05 .10 .11 .13 .19 .14 Net realized and unrealized gain (loss) (1.32) (2.14) 4.29 .92 4.91 3.91 - -------------------------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations (1.27) (2.04) 4.40 1.05 5.10 4.05 - -------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.11) (.09) (.09) (.05) (.17) (.14) Distributions from net realized gain -- (1.24) (.16) (1.10) (.72) (.05) - -------------------------------------------------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.11) (1.33) (.25) (1.15) (.89) (.19) - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $19.88 $21.26 $24.63 $20.48 $20.58 $16.37 ====== ====== ====== ====== ====== ====== ================================================================================================================================ Total Return, at Net Asset Value(1) (5.95)% (8.78)% 21.71% 4.70% 32.48% 32.51% ================================================================================================================================ Ratios/Supplemental Data Net assets, end of period (in thousands) $1,063,647 $1,009,823 $555,311 $308,353 $155,368 $47,009 - -------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $1,029,203 $ 809,662 $391,063 $234,306 $ 94,906 $21,562 - ---------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(2) Net investment income 0.62% 0.69% 0.63% 0.74% 1.15% 1.41% Expenses 0.73% 0.73% 0.78% 0.79%(3) 0.83%(3) 1.00%(3) - -------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 36% 63% 118% 86% 79% 113%
(1) Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. (2) Annualized for periods of less than one full year. (3) Expense ratio reflects the reduction to custodian expenses. See accompanying Notes to Financial Statements. Oppenheimer Main Street Growth & Income Fund/VA 23 - -------------------------------------------------------------------------------- Financial Highlights (Continued) - -------------------------------------------------------------------------------- Six Months Period Ended Ended June 30, 2001 Dec. 31, Service shares (Unaudited) 2001(1) =============================================================================== Per Share Operating Data Net asset value, beginning of period $21.24 $24.04 - ------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .08 .02 Net realized and unrealized gain (loss) (1.36) (2.82) - ------------------------------------------------------------------------------ Total gain (loss) from investment operations (1.28) (2.80) - ------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income (.11) -- Distributions from net realized gain -- -- - ------------------------------------------------------------------------------ Total dividends and/or distributions to shareholders (.11) -- Net asset value, end of period $19.85 $21.24 ====== ====== ============================================================================== Total Return, at Net Asset Value(2) (6.01)% (11.61)% ============================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $11,005 $1,698 - ------------------------------------------------------------------------------- Average net assets (in thousands) $ 4,918 $ 543 Ratios to average net assets:(3) Net investment income 0.52% 0.50% Expenses 0.88% 0.88% - ------------------------------------------------------------------------------ Portfolio turnover rate 36% 63% (1) For the period from July 13, 2000 (inception of offering) to December 31, 2000. (2) Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), 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 of less than one full year. See accompanying Notes to Financial Statements. 24 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), an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund's 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. The Fund offers two classes of shares. Both classes are sold at their offering price, which is the net asset value per share, to separate investment accounts of participating insurance companies as an underlying investment for variable life insurance policies, variable annuity contracts or other investment products. The class of shares designated as Service shares is subject to a distribution and service plan. - -------------------------------------------------------------------------------- Securities Valuation. Securities listed or traded on National Stock Exchanges or other domestic or foreign exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing bid and asked prices, and if not, at the closing bid price. Securities (including restricted securities) for which quotations are not readily available are valued primarily using dealer-supplied valuations, a portfolio pricing service authorized by the Board of Trustees, or at their fair value. Fair value is determined in good faith under consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- 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 its custodian bank 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. - -------------------------------------------------------------------------------- Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- 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. As of June 30, 2001, the Fund had available for federal income tax purposes an estimated unused capital loss carryover of $146,909,364. This estimated capital loss carryover represents carryover as of the end of the last fiscal year, increased for losses deferred under tax accounting rules to the current fiscal year and increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. Oppenheimer Main Street Growth & Income Fund/VA 25 - -------------------------------------------------------------------------------- Notes to Financial Statements (Unaudited) (Continued) - -------------------------------------------------------------------------------- ================================================================================ 1. Significant Accounting Policies (continued) As of June 30, 2001, the Fund had available for federal income tax purposes an unused capital loss carryover as follows:
Expiring ----------------------------------- 2008 $28,801,633
- -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- Classification of Dividends and 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 dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and 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. - -------------------------------------------------------------------------------- Investment Income. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- Security Transactions. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 $0.001 par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
Six Months Ended June 30, 2001 Year Ended December 31, 2000(1) ------------------------------ ------------------------------ Shares Amount Shares Amount - ----------------------------------------------------------------------------------------------------------------------- Non-Service shares - ------------------ Sold 8,422,885 $ 171,663,000 27,605,948 $ 641,709,139 Dividends and/or distributions reinvested 289,225 5,518,418 1,515,363 35,474,641 Redeemed (2,703,964) (54,711,641) (4,166,298) (95,795,921) ------------- ------------- ------------- ------------- Net increase (decrease) 6,008,146 $ 122,469,777 24,955,013 $ 581,387,859 ============= ============= ============= ============= Service shares - -------------- Sold 474,078 $ 9,588,911 79,978 $ 1,778,724 Dividends and/or distributions reinvested 1,016 19,361 -- -- Redeemed (532) (9,992) (34) (785) ------------- ------------- ------------- ------------- Net increase (decrease) 474,562 $ 9,598,280 79,944 $ 1,777,939 ============= ============= ============= =============
(1) Service shares are for the period from July 13, 2000 (inception of offering) to December 31, 2000. 26 Oppenheimer Main Street Growth & Income Fund/VA - -------------------------------------------------------------------------------- Notes to Financial Statements (Unaudited) (Continued) - -------------------------------------------------------------------------------- ================================================================================ 3. Purchases and Sales of Securities The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended June 30, 2001, were $501,874,982 and $349,315,247, respectively. ================================================================================ 4. 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 six months ended June 30, 2001, was an annualized rate of 0.68%. - -------------------------------------------------------------------------------- Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS an agreed upon per account fee. - -------------------------------------------------------------------------------- Distribution and Service Plan for Service Shares. The Fund has adopted a distribution and service plan for Service shares to pay OppenheimerFunds Distributor, Inc., the Distributor, for distribution-related services for the Fund's Service shares. Although the plan allows for payment to be made quarterly at an annual rate of up to 0.25% of the average annual net assets of Service shares of the Fund, that rate is currently reduced to 0.15%. The Board of Trustees may increase that rate to no more than 0.25% per annum, without notification in advance. The Distributor currently uses all of those fees to compensate sponsor(s) of the insurance product that offers Fund shares, for providing personal service and maintenance of accounts of their variable contract owners that hold Service shares. The impact of the service plan is to increase operating expenses of the Service shares, which results in lower performance compared to the Fund's shares that are not subject to a service fee. ================================================================================ 5. Illiquid or Restricted Securities As of June 30, 2001, 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 June 30, 2001, was $17,411, which represents less than 0.01% of the Fund's net assets, all of which is considered restricted. Information concerning restricted securities is as follows:
Valuation Per Unrealized Acquisition Cost Per Unit as of Appreciation Security Date Unit June 30, 2001 (Depreciation) - ----------------------------------------------------------------------------------------------------------- Stocks and Warrants - ------------------- Intermedia Communications, Inc. 9/29/98-12/29/98 $12.51-$21.54 $14.16 $623
Oppenheimer Main Street Growth & Income Fund/VA 27 - -------------------------------------------------------------------------------- Oppenheimer Main Street(R) Growth & Income Fund/VA - -------------------------------------------------------------------------------- A Series of Oppenheimer Variable Account Funds ================================================================================ Officers and Trustees James C. Swain, Trustee, CEO and Chairman of the Board Bridget A. Macaskill, Trustee and President William L. Armstrong, Trustee Robert G. Avis, Trustee George C. Bowen, Trustee Edward L. Cameron, Trustee Jon S. Fossel, Trustee Sam Freedman, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee F. William Marshall, Jr., Trustee Charles Albers, Vice President Nikolaos Monoyios, Vice President Andrew J. Donohue, Vice President and Secretary Brian W. Wixted, Treasurer Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer Robert G. Zack, Assistant Secretary ================================================================================ Investment Advisor OppenheimerFunds, Inc. ================================================================================ Transfer Agent OppenheimerFunds Services ================================================================================ Custodian of Portfolio 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 those records by the independent auditors. For more complete information about Oppenheimer Main Street Growth & Income Fund/VA, please refer to the Prospectus. To obtain a copy, call your financial advisor, or call OppenheimerFunds, Inc. at 1.800.981.2871. (C)Copyright 2001 OppenheimerFunds, Inc. All rights reserved. Oppenheimer Main Street Growth & Income Fund/VA -----END PRIVACY-ENHANCED MESSAGE-----