N-30D 1 mult_strat.txt [GRAPHIC] Semiannual Report June 30, 2001 Oppenheimer Multiple Strategies Fund/VA A Series of Oppenheimer Variable Account Funds [LOGO] Oppenheimer Funds(R) The Right Way to Invest -------------------------------------------------------------------------------- Oppenheimer Variable Account Funds--Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- ================================================================================ Objective Oppenheimer Multiple Strategies Fund/VA, a series of Oppenheimer Variable Account Funds, seeks a high total investment return, which includes current income and capital appreciation in the value of its shares. ================================================================================ Narrative by Richard Rubinstein, Portfolio Manager For the six-month period ended June 30, 2001, Oppenheimer Multiple Strategies Fund/VA provided a cumulative total return of 5.34%,(1) a strong performance in a relatively challenging market environment. We attribute the Fund's good returns to its broadly diversified, multiple strategies approach. Our investment style enabled the Fund to participate in the strongest areas of the stock market when market leadership shifted from a narrow list of growth stocks to a more broadly based group of stocks. During 2001, the U.S. economy's expansion continued to slow in the face of reduced levels of corporate spending, rising energy prices and declining consumer confidence. These conditions caused revenues and earnings to fall short of expectations across a wide range of traditional growth-oriented industries. Early in 2001, investors turned to more defensive industries that appeared well positioned to continue growing despite the economic slowdown. Our portfolio allocations at the end of the six-month period were approximately 52% equities, 37% bonds and 9% cash based on net assets.(2) Within the stock segment, assets were devoted to value, growth, contrarian and international stocks, as well as dividend-yielding stocks and convertibles. In effect, the Fund currently represents a "portfolio for all seasons" because of its broad participation in many different market sectors and investment styles. The Fund benefited from participation in high quality fixed income securities during a time when most lower quality bonds did relatively poorly. This disparity was particularly apparent in our high quality corporate bond holdings, which held up relatively well when economic conditions continued to deteriorate. In contrast, lower quality, high yield corporate bonds were punished by investors who became concerned about higher default rates in a slowing economy. We also received good performance from our investments in Treasury, mortgage-based securities and, in the foreign bond sector, emerging market bonds. In the latter category, we focused on highly rated securities such as Brady Bonds, which are foreign government debt securities backed by U.S. Treasury bills on deposit with the Federal Reserve Bank. Bonds from such nations as Australia, New Zealand and Canada held back performance because of their currencies' weakness relative to the U.S. dollar. In terms of our equity investments, we received the best returns from the stocks of companies in traditional, "old economy" market sectors such as basic industries. That's primarily because these types of stocks had been out of favor in 1999 and early 2000, when technology stocks were all the rage. Chemical companies, metals producers and the like saw their stocks rally when disillusioned investors turned away from technology and "rediscovered" certain long-neglected areas of the market. 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 fluctuations, and current performance may be less than the results shown. (1) Total returns include 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 Fund's portfolio is subject to change. The Fund's investment strategies 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 Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Oppenheimer Variable Account Funds--Openheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- ================================================================================ The energy industry group was one of the brightest spots in the market during 2001. With oil prices remaining at relatively high levels, oil companies have increased their pace of exploration and production. This has directly benefited companies that provide support services to the major integrated oil companies. Real estate investment trusts also continued to produce attractive returns. Because we consider the Fund "a portfolio for all seasons," we are optimistic, regardless of which areas of the market perform best over the next several months. With that said, we believe that the investment environment remains uncertain. On one hand, declining corporate earnings, low consumer confidence and rising inventories bode poorly for the immediate future. On the other hand, low interest rates, low inflation and significant declines in stock prices bode well for the longer term. As a result, in our view, market valuations should begin to recover at some point in the future. In the meantime, we are searching the marketplace for opportunities to acquire stocks of good franchises at attractive prices. This multifaceted, selective approach to stocks and bonds is the essence of what makes Oppenheimer Multiple Strategies Fund/VA an important part of The Right Way to Invest. Oppenheimer Multiple Strategies Fund/VA 3 -------------------------------------------------------------------------------- Statement of Investments June 30, 2001 (Unaudited) --------------------------------------------------------------------------------
Market Value Shares See Note 1 ================================================================================ Common Stocks--51.7% -------------------------------------------------------------------------------- Basic Materials--4.3% -------------------------------------------------------------------------------- Chemicals--2.7% Bayer AG, Sponsored ADR 15,000 $ 584,131 -------------------------------------------------------------------------------- Cabot Corp. 21,900 788,838 -------------------------------------------------------------------------------- Dow Chemical Co.(1) 62,000 2,061,500 -------------------------------------------------------------------------------- Engelhard Corp.(1) 127,000 3,275,330 -------------------------------------------------------------------------------- Ferro Corp. 88,000 1,919,280 -------------------------------------------------------------------------------- Goodrich Corp.(1) 40,600 1,541,988 -------------------------------------------------------------------------------- Hercules, Inc. 120,000 1,356,000 -------------------------------------------------------------------------------- IMC Global, Inc. 70,000 714,000 -------------------------------------------------------------------------------- International Flavors & Fragrances, Inc. 64,000 1,608,320 -------------------------------------------------------------------------------- Lyondell Chemical Co. 74,600 1,147,348 -------------------------------------------------------------------------------- Praxair, Inc. 33,000 1,551,000 ------------ 16,547,735 -------------------------------------------------------------------------------- Metals--0.5% Alcoa, Inc.(1) 39,000 1,536,600 -------------------------------------------------------------------------------- Inco Ltd.(2) 57,000 983,820 -------------------------------------------------------------------------------- UCAR International, Inc.(2) 66,400 793,480 ------------ 3,313,900 -------------------------------------------------------------------------------- Paper--1.1% Georgia-Pacific Corp. 80,000 2,708,000 -------------------------------------------------------------------------------- Sappi Ltd., Sponsored ADR 82,000 733,900 -------------------------------------------------------------------------------- Sonoco Products Co. 95,000 2,363,600 -------------------------------------------------------------------------------- UPM-Kymmene Oyj 34,000 961,111 ------------ 6,766,611 -------------------------------------------------------------------------------- Capital Goods--3.6% -------------------------------------------------------------------------------- Aerospace/Defense--0.1% Boeing Co. 15,810 879,036 -------------------------------------------------------------------------------- Industrial Services--1.0% Canon, Inc. 48,000 1,939,705 -------------------------------------------------------------------------------- Pittston Brink's Group 85,800 1,912,482 -------------------------------------------------------------------------------- Reynolds & Reynolds Co., Cl. A 30,900 678,255 -------------------------------------------------------------------------------- Service Corp. International(2) 235,000 1,494,600 ------------ 6,025,042 -------------------------------------------------------------------------------- Manufacturing--2.5% Coherent, Inc.(2) 42,000 1,519,140 -------------------------------------------------------------------------------- Gaylord Container Corp., Cl. A(2) 9,232 9,694 -------------------------------------------------------------------------------- Komatsu Ltd. 163,000 747,563 -------------------------------------------------------------------------------- Millipore Corp.(1) 31,000 1,921,380 -------------------------------------------------------------------------------- Morgan Crucible Co. plc 292,800 1,321,858 -------------------------------------------------------------------------------- Pall Corp.(1) 114,000 2,682,420 -------------------------------------------------------------------------------- Trinity Industries, Inc. 36,000 738,000 -------------------------------------------------------------------------------- Tyco International Ltd.(1) 126,811 6,911,199 ------------ 15,851,254
4 Oppenheimer Multiple Strategies Fund/va -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) --------------------------------------------------------------------------------
Market Value Shares See Note 1 -------------------------------------------------------------------------------- Communication Services--2.7% -------------------------------------------------------------------------------- Telecommunications: Long Distance--0.8% Allegiance Telecom, Inc.(2) 104,000 $ 1,558,960 -------------------------------------------------------------------------------- Brocade Communications Systems, Inc.(1)(2) 5,100 224,349 -------------------------------------------------------------------------------- ECI Telecommunications Ltd. 197,500 987,500 -------------------------------------------------------------------------------- Intermedia Communications, Inc. 393 5,856 -------------------------------------------------------------------------------- Intermedia Communications, Inc.(2)(3) 201 2,845 -------------------------------------------------------------------------------- NTL, Inc.(2) 74,400 896,520 -------------------------------------------------------------------------------- WorldCom, Inc.-MCI Group(2) 3,560 57,316 -------------------------------------------------------------------------------- WorldCom, Inc.-WorldCom Group(2) 100,000 1,420,000 ------------ 5,153,346 -------------------------------------------------------------------------------- Telephone Utilities--0.5% SBC Communications, Inc. 69,000 2,764,140 -------------------------------------------------------------------------------- Tele Norte Leste Participacoes SA (Telemar) 26,283,402 341,417 -------------------------------------------------------------------------------- Tele Norte Leste Participacoes SA (Telemar), Preference 3,077,585 47,173 -------------------------------------------------------------------------------- Telefonica SA, BDR 15,632 193,581 ------------ 3,346,311 -------------------------------------------------------------------------------- Telecommunications: Wireless--1.4% AT&T Wireless Group(1)(2) 176,000 2,877,600 -------------------------------------------------------------------------------- Dobson Communications Corp., Cl. A(2) 55,000 937,750 -------------------------------------------------------------------------------- Gilat Satellite Networks Ltd.(2) 117,000 1,404,000 -------------------------------------------------------------------------------- Millicom International Cellular SA(2) 132,900 3,335,790 -------------------------------------------------------------------------------- Telesp Celular Participacoes SA 49,153,261 268,167 ------------ 8,823,307 -------------------------------------------------------------------------------- Consumer Cyclicals--4.9% -------------------------------------------------------------------------------- Autos & Housing--0.5% Borg-Warner Automotive, Inc. 22,800 1,131,336 -------------------------------------------------------------------------------- Dana Corp. 42,000 980,280 -------------------------------------------------------------------------------- IRSA Inversiones y Representaciones SA 323,901 518,293 -------------------------------------------------------------------------------- Lear Corp.(1)(2) 21,000 732,900 ------------ 3,362,809 -------------------------------------------------------------------------------- Leisure & Entertainment--1.9% Bally Total Fitness Holding Corp.(2) 38,200 1,131,102 -------------------------------------------------------------------------------- Callaway Golf Co.(1) 140,000 2,212,000 -------------------------------------------------------------------------------- Hasbro, Inc. 142,000 2,051,900 -------------------------------------------------------------------------------- Host Marriott Corp. 142,500 1,784,100 -------------------------------------------------------------------------------- Mattel, Inc. 153,000 2,894,765 -------------------------------------------------------------------------------- Shimano, Inc. 100,000 1,473,701 ------------ 11,547,568 -------------------------------------------------------------------------------- Media--0.8% Donnelley (R.R.) & Sons Co.(1) 82,600 2,453,220 -------------------------------------------------------------------------------- Reed International plc 180,000 1,594,858 -------------------------------------------------------------------------------- South China Morning Post Holdings Ltd. 1,608,000 1,061,706 ------------ 5,109,784
Oppenheimer Multiple Strategies Fund/VA 5 -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) --------------------------------------------------------------------------------
Market Value Shares See Note 1 ----------------------------------------------------------------------------------------------------------- Retail: Speciality--1.2% Borders Group, Inc.(2) 144,000 $ 3,225,600 ----------------------------------------------------------------------------------------------------------- Gap, Inc.(1) 45,800 1,328,200 ----------------------------------------------------------------------------------------------------------- Men's Wearhouse, Inc. (The)(2) 37,800 1,043,280 ----------------------------------------------------------------------------------------------------------- Nike, Inc., Cl. B 22,000 923,780 ----------------------------------------------------------------------------------------------------------- Talbots, Inc. (The) 21,000 918,750 ------------ 7,439,610 ----------------------------------------------------------------------------------------------------------- Textile/Apparel & Home Furnishings--0.5% Jones Apparel Group, Inc.(1)(2) 73,000 3,153,600 ----------------------------------------------------------------------------------------------------------- Consumer Staples--6.5% ----------------------------------------------------------------------------------------------------------- Broadcasting--2.0% AT&T Corp./Liberty Media Corp., Cl. A(2) 87,000 1,521,630 ----------------------------------------------------------------------------------------------------------- Clear Channel Communications, Inc.(1)(2) 43,000 2,696,100 ----------------------------------------------------------------------------------------------------------- Cox Radio, Inc., Cl. A(2) 52,600 1,464,910 ----------------------------------------------------------------------------------------------------------- EchoStar Communications Corp., Cl. A(2) 71,000 2,301,820 ----------------------------------------------------------------------------------------------------------- Emmis Communications Corp., Cl. A(1)(2) 75,800 2,330,850 ----------------------------------------------------------------------------------------------------------- General Motors Corp., Cl. H(1)(2) 57,000 1,154,250 ----------------------------------------------------------------------------------------------------------- Societe Europeenne des Satellites 6,000 787,338 ------------ 12,256,898 ----------------------------------------------------------------------------------------------------------- Entertainment--2.2% Brinker International, Inc.(2) 62,000 1,602,700 ----------------------------------------------------------------------------------------------------------- News Corp. Ltd. (The), Sponsored ADR, Preference(1) 56,000 1,814,400 ----------------------------------------------------------------------------------------------------------- Nintendo Co. Ltd. 10,000 1,820,077 ----------------------------------------------------------------------------------------------------------- Outback Steakhouse, Inc.(2) 11,000 316,800 ----------------------------------------------------------------------------------------------------------- Viacom, Inc., Cl. B(2) 163,000 8,435,250 ------------ 13,989,227 ----------------------------------------------------------------------------------------------------------- Food--0.8% ConAgra Foods, Inc. 78,000 1,545,180 ----------------------------------------------------------------------------------------------------------- IBP, Inc. 76,700 1,936,675 ----------------------------------------------------------------------------------------------------------- Unilever NV, NY Shares 20,000 1,191,400 ------------ 4,673,255 ----------------------------------------------------------------------------------------------------------- Food & Drug Retailers--0.1% ----------------------------------------------------------------------------------------------------------- Companhia Brasileira de Distribuicao Grupo Pao de Acucar, Sponsored ADR 14,000 324,940 ----------------------------------------------------------------------------------------------------------- Household Goods--0.6% Clorox Co. (The) 30,000 1,015,500 ----------------------------------------------------------------------------------------------------------- Wella AG 55,900 2,449,539 ----------------------------------------------------------------------------------------------------------- Wella AG, Preference, Non-Vtg 5,200 252,693 ------------ 3,717,732 ----------------------------------------------------------------------------------------------------------- Tobacco--0.8% Philip Morris Cos., Inc.(1) 102,800 5,217,100
6 Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) -------------------------------------------------------------------------------- Market Value Shares See Note 1 -------------------------------------------------------------------------------- Energy--5.1% -------------------------------------------------------------------------------- Energy Services--2.0% Coflexip SA, Sponsored ADR 12,400 $ 935,879 -------------------------------------------------------------------------------- Cooper Cameron Corp.(1)(2) 36,700 2,047,860 -------------------------------------------------------------------------------- Core Laboratories NV(2) 85,400 1,601,250 -------------------------------------------------------------------------------- Houston Exploration Co.(2) 17,400 543,750 -------------------------------------------------------------------------------- Noble Drilling Corp.(2) 39,000 1,277,250 -------------------------------------------------------------------------------- Petroleum Geo-Services ASA, Sponsored ADR(2) 225,000 2,274,750 -------------------------------------------------------------------------------- Santa Fe International Corp.(1) 70,000 2,030,000 -------------------------------------------------------------------------------- Transocean Sedco Forex, Inc.(1) 36,700 1,513,875 ------------ 12,224,614 -------------------------------------------------------------------------------- Oil: Domestic--2.0% Devon Energy Corp.(1) 44,000 2,310,000 -------------------------------------------------------------------------------- Exxon Mobil Corp. 33,000 2,882,550 -------------------------------------------------------------------------------- FMC Technologies, Inc.,(2) 15,700 324,205 -------------------------------------------------------------------------------- Murphy Oil Corp. 12,600 927,360 -------------------------------------------------------------------------------- Ocean Energy, Inc. 40,000 698,000 -------------------------------------------------------------------------------- Unocal Corp. 130,000 4,439,500 -------------------------------------------------------------------------------- Westport Resources Corp.(2) 50,000 1,050,000 ------------ 12,631,615 -------------------------------------------------------------------------------- Oil: International--1.1% Anderson Exploration Ltd.(2) 69,800 1,409,706 -------------------------------------------------------------------------------- Petroleo Brasileiro SA, Preference 33,300 777,168 -------------------------------------------------------------------------------- Talisman Energy, Inc. 77,610 2,953,333 -------------------------------------------------------------------------------- TotalFinaElf SA, B Shares 1,700 238,047 -------------------------------------------------------------------------------- TotalFinaElf SA, Sponsored ADR 17,100 1,200,420 ------------ 6,578,674 -------------------------------------------------------------------------------- Financial--7.2% -------------------------------------------------------------------------------- Banks--4.3% -------------------------------------------------------------------------------- ABN Amro Holding NV 62,700 1,177,886 -------------------------------------------------------------------------------- Bank of America Corp.(1) 134,000 8,044,020 -------------------------------------------------------------------------------- BBVA Banco Frances SA 95,000 783,828 -------------------------------------------------------------------------------- FleetBoston Financial Corp. 66,000 2,603,700 -------------------------------------------------------------------------------- J.P. Morgan Chase & Co. 230,000 10,258,000 -------------------------------------------------------------------------------- UBS AG 8,350 1,196,175 -------------------------------------------------------------------------------- UniCredito Italiano SpA 414,000 1,776,996 -------------------------------------------------------------------------------- Zions Bancorp 15,000 885,000 ------------ 26,725,605 -------------------------------------------------------------------------------- Diversified Financial--0.8% Franklin Resources, Inc.(1) 48,000 2,196,960 -------------------------------------------------------------------------------- ICICI Ltd., Sponsored ADR 35,500 326,600 -------------------------------------------------------------------------------- Merrill Lynch & Co., Inc.(1) 15,000 888,750 -------------------------------------------------------------------------------- Morgan Stanley Dean Witter & Co.(1) 22,800 1,464,444 ------------ 4,876,754 Oppenheimer Multiple Strategies Fund/VA 7 -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) -------------------------------------------------------------------------------- Market Value Shares See Note 1 -------------------------------------------------------------------------------- Insurance--0.7% ACE Ltd.(1) 16,000 $ 625,440 -------------------------------------------------------------------------------- Hartford Financial Services Group, Inc. 16,100 1,101,240 -------------------------------------------------------------------------------- XL Capital Ltd., Cl. A 24,200 1,986,820 -------------------------------------------------------------------------------- Zurich Financial Services AG 2,400 818,470 ------------ 4,531,970 -------------------------------------------------------------------------------- Real Estate Investment Trusts--1.1% Camden Property Trust 35,000 1,284,500 -------------------------------------------------------------------------------- CarrAmerica Realty Corp. 53,000 1,616,500 -------------------------------------------------------------------------------- Developers Diversified Realty Corp. 100,000 1,838,000 -------------------------------------------------------------------------------- Equity Office Properties Trust 27,000 854,010 -------------------------------------------------------------------------------- Shurgard Storage Centers, Inc. 44,000 1,375,000 ------------ 6,968,010 -------------------------------------------------------------------------------- Savings & Loans--0.3% Washington Mutual, Inc.(1) 54,600 2,050,230 -------------------------------------------------------------------------------- Healthcare--4.9% -------------------------------------------------------------------------------- Healthcare/Drugs--3.7% Abbott Laboratories 34,500 1,656,345 -------------------------------------------------------------------------------- Alkermes, Inc.(2) 23,000 807,300 -------------------------------------------------------------------------------- American Home Products Corp.(1) 41,000 2,396,040 -------------------------------------------------------------------------------- AstraZeneca plc 40,900 1,889,935 -------------------------------------------------------------------------------- GlaxoSmithKline plc, ADR 32,433 1,822,735 -------------------------------------------------------------------------------- Human Genome Sciences, Inc.(1)(2) 13,200 795,300 -------------------------------------------------------------------------------- Johnson & Johnson 75,000 3,750,000 -------------------------------------------------------------------------------- Merck & Co., Inc. 36,500 2,332,715 -------------------------------------------------------------------------------- Millennium Pharmaceuticals, Inc.(2) 30,000 1,067,400 -------------------------------------------------------------------------------- Mylan Laboratories, Inc.(1) 10,000 281,300 -------------------------------------------------------------------------------- Novartis AG(2) 68,000 2,460,862 -------------------------------------------------------------------------------- Pliva d.d., GDR(4) 20,000 222,000 -------------------------------------------------------------------------------- Schering-Plough Corp. 51,000 1,848,240 -------------------------------------------------------------------------------- Watson Pharmaceuticals, Inc.(1)(2) 33,800 2,083,432 ------------ 23,413,604 -------------------------------------------------------------------------------- Healthcare/Supplies & Services--1.2% Affymetrix, Inc.(1)(2) 25,200 555,660 -------------------------------------------------------------------------------- Boston Scientific Corp.(2) 85,000 1,445,000 -------------------------------------------------------------------------------- Covance, Inc.(1)(2) 150,000 3,397,500 -------------------------------------------------------------------------------- Quintiles Transnational Corp.(2) 73,000 1,843,250 ------------ 7,241,410 -------------------------------------------------------------------------------- Technology--10.5% -------------------------------------------------------------------------------- Computer Hardware--3.2% 3Com Corp.(2) 95,800 455,050 -------------------------------------------------------------------------------- Cabletron Systems, Inc.(2) 57,200 1,307,020 -------------------------------------------------------------------------------- International Business Machines Corp.(1) 124,000 14,012,000 -------------------------------------------------------------------------------- Juniper Networks, Inc.(2) 55,300 1,719,830 -------------------------------------------------------------------------------- Stratos Lightwave, Inc.(2) 213,093 2,770,209 ------------ 20,264,109 8 Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) -------------------------------------------------------------------------------- Market Value Shares See Note 1 -------------------------------------------------------------------------------- Computer Services--0.6% Applied Micro Circuits Corp.(2) 20,000 $ 344,000 -------------------------------------------------------------------------------- Art Technology Group, Inc. 15,700 91,060 -------------------------------------------------------------------------------- Palm, Inc.(1)(2) 57,100 346,597 -------------------------------------------------------------------------------- Titan Corp. (The)(1)(2) 128,000 2,931,200 ------------ 3,712,857 -------------------------------------------------------------------------------- Computer Software--1.5% AOL Time Warner, Inc.(1)(2) 30,000 1,590,000 -------------------------------------------------------------------------------- i2 Technologies, Inc.(2) 20,000 396,000 -------------------------------------------------------------------------------- Intuit, Inc.(1)(2) 30,000 1,199,700 -------------------------------------------------------------------------------- Peoplesoft, Inc.(1)(2) 73,000 3,593,790 -------------------------------------------------------------------------------- Red Hat, Inc.(2) 93,000 372,000 -------------------------------------------------------------------------------- Structural Dynamics Research Corp.(2) 167 4,092 -------------------------------------------------------------------------------- Synopsys, Inc.(1)(2) 35,000 1,693,650 -------------------------------------------------------------------------------- Yahoo!, Inc.(2) 29,000 579,710 ------------ 9,428,942 -------------------------------------------------------------------------------- Communications Equipment--0.5% ADC Telecommunications, Inc.(2) 43,000 283,800 -------------------------------------------------------------------------------- Cisco Systems, Inc.(2) 40,000 728,000 -------------------------------------------------------------------------------- Extreme Networks, Inc.(2) 16,000 472,000 -------------------------------------------------------------------------------- L.M. Ericsson Telephone Co., ADR, Cl. B 175,000 948,500 -------------------------------------------------------------------------------- Nortel Networks Corp.(1) 75,000 681,750 ------------ 3,114,050 -------------------------------------------------------------------------------- Electronics--4.5% Analog Devices, Inc.(1)(2) 75,000 3,243,750 -------------------------------------------------------------------------------- ASML Holding NV(2) 54,000 1,201,500 -------------------------------------------------------------------------------- Cognex Corp.(2) 66,200 2,240,870 -------------------------------------------------------------------------------- Intel Corp.(1) 191,000 5,586,750 -------------------------------------------------------------------------------- JDS Uniphase Corp.(1)(2) 27,500 343,750 -------------------------------------------------------------------------------- Keyence Corp. 8,360 1,658,996 -------------------------------------------------------------------------------- KLA-Tencor Corp.(1)(2) 56,700 3,315,249 -------------------------------------------------------------------------------- Lam Research Corp.(1)(2) 87,200 2,585,480 -------------------------------------------------------------------------------- National Semiconductor Corp.(1)(2) 85,000 2,475,200 -------------------------------------------------------------------------------- STMicroelectronics NV, NY Registered Shares 61,000 2,074,000 -------------------------------------------------------------------------------- Teradyne, Inc.(1)(2) 76,200 2,522,220 -------------------------------------------------------------------------------- Waters Corp.(2) 34,000 938,740 ------------ 28,186,505 -------------------------------------------------------------------------------- Photography--0.2% Xerox Corp.(1) 118,000 1,129,260 -------------------------------------------------------------------------------- Transportation--1.2% -------------------------------------------------------------------------------- Air Transportation--0.3% Delta Air Lines, Inc. 25,000 1,102,000 -------------------------------------------------------------------------------- Singapore Airlines Ltd. 107,000 739,956 ------------ 1,841,956 Oppenheimer Multiple Strategies Fund/VA 9 -------------------------------------------------------------------------------- Statement of Investments (Unaudited)(Continued) --------------------------------------------------------------------------------
Market Value Shares See Note 1 ----------------------------------------------------------------------------------------------------------- Railroads & Truckers--0.6% Burlington Northern Santa Fe Corp. 61,000 $ 1,840,370 ----------------------------------------------------------------------------------------------------------- Swift Transportation Co., Inc.(2) 90,000 1,733,400 ------------ 3,573,770 ----------------------------------------------------------------------------------------------------------- Shipping--0.3% United Parcel Service, Inc., Cl. B 32,000 1,849,600 ----------------------------------------------------------------------------------------------------------- Utilities--0.8% ----------------------------------------------------------------------------------------------------------- Electric Utilities--0.5% Edison International(1) 80,600 898,690 ----------------------------------------------------------------------------------------------------------- Energy East Corp. 45,300 947,223 ----------------------------------------------------------------------------------------------------------- Northeast Utilities Co. 75,000 1,556,250 ------------ 3,402,163 ----------------------------------------------------------------------------------------------------------- Gas Utilities--0.3% Dynegy, Inc.(1) 37,500 1,743,750 ------------ Total Common Stocks (Cost $240,085,494) 322,988,513 =========================================================================================================== Preferred Stocks--0.6% ----------------------------------------------------------------------------------------------------------- Qwest Trends Trust, 5.75% Cv.(4) 54,000 2,936,250 ----------------------------------------------------------------------------------------------------------- Sovereign Capital Trust II, 7.50% Cv. Preferred Income Equity Redeemable Stock, Units (each unit consists of one preferred plus one warrant to purchase 5.3355 shares of Sovereign Bancorp common stock)(5) 12,500 900,000 ------------ Total Preferred Stocks (Cost $3,356,358) 3,836,250 Units =========================================================================================================== Rights, Warrants and Certificates--0.0 ----------------------------------------------------------------------------------------------------------- Applera Corp./Applied Biosystems Group Wts., Cl. G, Exp. 9/11/03(3) 249 3,735 ----------------------------------------------------------------------------------------------------------- Covergent Communications, Inc. Wts., Exp. 4/1/08(3) 1,000 350 ----------------------------------------------------------------------------------------------------------- HF Holdings, Inc. Wts., Exp. 9/27/09(3) 2,592 259 ----------------------------------------------------------------------------------------------------------- Mexico Value Rts., Exp. 6/30/03 4,450,000 42,498 ----------------------------------------------------------------------------------------------------------- Terex Corp. Rts., Exp. 5/15/02 4,000 84,100 ------------ Total Rights, Warrants and Certificates (Cost $38,888) 130,942 Principal Amount =========================================================================================================== Mortgage-Backed Obligations--5.0% ----------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Multiclass Mtg. Participation Certificates, 7%, 5/1/29 $ 3,960,223 3,984,975 ----------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security, Series 204, Cl. IO, 12.88%, 5/15/29(6) 11,860,548 3,243,119 ----------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: 6%, 5/1/16 19,923,760 19,641,641 6.50%, 11/1/27--12/1/27 3,235,148 3,193,028 ----------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., 8%, 4/15/23 1,223,487 1,277,064 ------------ Total Mortgage-Backed Obligations (Cost $30,962,533) 31,339,827
10 Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) --------------------------------------------------------------------------------
Principal Market Value Amount See Note 1 =========================================================================================================== U.S. Government Obligations--10.8% ----------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds: 6%, 2/15/26 $ 575,000 $ 581,710 7.50%, 11/15/16 1,310,000 1,525,660 8.875%, 8/15/17 2,900,000 3,804,211 STRIPS, 6.30%, 8/15/25(7) 10,965,000 2,591,709 STRIPS, 6.54%, 8/15/15(7) 6,035,000 2,593,831 STRIPS, 7.10%, 11/15/18(7) 13,600,000 4,756,981 STRIPS, 7.26%, 11/15/18(7) 8,500,000 2,973,113 STRIPS, 7.31%, 8/15/19(7) 15,300,000 5,122,715 ----------------------------------------------------------------------------------------------------------- U.S. Treasury Nts.: 5.75%, 8/15/03 3,300,000 3,393,166 5.875%, 9/30/02 15,000,000 15,335,445 6.125%, 8/15/07 3,500,000 3,675,763 6.25%, 2/15/07 8,800,000 9,281,906 6.375%, 8/15/02 5,000,000 5,132,325 6.50%, 8/15/05--10/15/06 4,655,000 4,947,774 7.50%, 11/15/01 1,775,000 1,800,263 ------------ Total U.S. Government Obligations (Cost $63,636,407) 67,516,572 =========================================================================================================== Foreign Government Obligations--12.3% ----------------------------------------------------------------------------------------------------------- Argentina--2.1% Argentina (Republic of) Nts., 14.10%, 11/30/02(3)(8) 13,125,000 12,337,500 ----------------------------------------------------------------------------------------------------------- Argentina (Republic of) Par Bonds, 6%, 3/31/23(8) 1,665,000 1,059,356 ------------ 13,396,856 ----------------------------------------------------------------------------------------------------------- Australia--0.4% New South Wales Treasury Corp. Gtd. Bonds, 7%, 4/1/04AUD 3,160,000 1,654,314 ----------------------------------------------------------------------------------------------------------- Queensland Treasury Corp. Global Exchangeable Gtd. Nts., 10.50%, 5/15/03AUD 1,800,000 995,317 ------------ 2,649,631 ----------------------------------------------------------------------------------------------------------- Brazil--3.9% Brazil (Federal Republic of) Debt Capitalization Bonds, Series 20 yr., 8%, 4/15/14 17,116,599 12,730,471 ----------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Eligible Interest Bonds, 7.375%, 4/15/06(8) 13,160,000 11,745,300 ------------ 24,475,771 ----------------------------------------------------------------------------------------------------------- Canada--2.3% Canada (Government of) Bonds: 8.50%, 4/1/02CAD 1,500,000 1,019,053 8.75%, 12/1/05CAD 12,200,000 9,017,356 9.75%, 12/1/01CAD 3,000,000 2,022,727 Series WL43, 5.75%, 6/1/29CAD 3,670,000 2,337,279 ------------ 14,396,415 ----------------------------------------------------------------------------------------------------------- Denmark--0.7% Denmark (Kingdom of) Bonds, 8%, 3/15/06DKK 32,100,000 4,098,463 ----------------------------------------------------------------------------------------------------------- Great Britain--0.6% United Kingdom Treasury Bonds, 6.75%, 11/26/04GBP 2,680,000 3,914,264 ----------------------------------------------------------------------------------------------------------- Mexico--0.7% United Mexican States Collateralized Fixed Rate Par Bonds, Series W-A, 6.25%, 12/31/19 4,450,000 4,060,625
Oppenheimer Multiple Strategies Fund/va 11 -------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS (Unaudited) (Continued) --------------------------------------------------------------------------------
Principal Market Value Amount See Note 1 =========================================================================================================== Foreign Government Obligations (continued) ----------------------------------------------------------------------------------------------------------- New Zealand--1.1% New Zealand (Government of) Bonds, 10%, 3/15/02NZD 16,800,000 $ 6,946,395 ----------------------------------------------------------------------------------------------------------- Philippines--0.2% Philippines (Republic of) Bonds, 8.60%, 6/15/27(3) 1,500,000 1,098,750 ----------------------------------------------------------------------------------------------------------- South Africa--0.3% Eskom Depositary Receipts, Series E168, 11%, 6/1/08ZAR 12,570,000 1,544,189 ------------ Total Foreign Government Obligations (Cost $82,825,781) 76,581,359 =========================================================================================================== Non-Convertible Corporate Bonds and Notes--7.0% ----------------------------------------------------------------------------------------------------------- Basic Materials--1.1% ----------------------------------------------------------------------------------------------------------- Chemicals--0.4% Avecia Group plc, 11% Sr. Unsec. Nts., 7/1/09 500,000 500,000 ----------------------------------------------------------------------------------------------------------- Huntsman Corp./ICI Chemical Co. plc, Zero Coupon Sr. Unsec. Disc. Nts., 13.08%, 12/31/09(7) 1,000,000 307,500 ----------------------------------------------------------------------------------------------------------- Lyondell Chemical Co.: 9.625% Sr. Sec. Nts., Series A, 5/1/07 250,000 249,375 9.875% Sec. Nts., Series B, 5/1/07 250,000 248,750 10.875% Sr. Sub. Nts., 5/1/09 150,000 147,750 ----------------------------------------------------------------------------------------------------------- NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 57,000 56,715 ----------------------------------------------------------------------------------------------------------- Polymer Group, Inc., 9% Sr. Unsec. Sub. Nts., Series B, 7/1/07 500,000 187,500 ----------------------------------------------------------------------------------------------------------- Rohm & Haas Co., 7.85% Unsec. Debs., 7/15/29 400,000 416,959 ----------------------------------------------------------------------------------------------------------- Sterling Chemicals, Inc.: 11.75% Sr. Unsec. Sub. Nts., 8/15/06(9) 335,000 82,075 12.375% Sr. Sec. Nts., Series B, 7/15/06(9) 650,000 510,250 ------------ 2,706,874 ----------------------------------------------------------------------------------------------------------- Metals--0.4% AK Steel Corp., 9.125% Sr. Nts., 12/15/06 1,215,000 1,251,450 ----------------------------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 1,000,000 895,000 ----------------------------------------------------------------------------------------------------------- Metallurg, Inc., 11% Sr. Nts., 12/1/07(3) 450,000 411,750 ------------ 2,558,200 ----------------------------------------------------------------------------------------------------------- Paper--0.3% Aracruz Celulose SA, 10.375% Debs., 1/31/02(3) 430,000 438,062 ----------------------------------------------------------------------------------------------------------- Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04 700,000 434,000 ----------------------------------------------------------------------------------------------------------- Repap New Brunswick, Inc., 11.50% Sr. Sec. Nts., 6/1/04 200,000 228,000 ----------------------------------------------------------------------------------------------------------- Riverwood International Corp.: 10.625% Sr. Unsec. Nts., 8/1/07 500,000 512,500 10.875% Sr. Sub. Nts., 4/1/08 250,000 241,250 ------------ 1,853,812 ----------------------------------------------------------------------------------------------------------- Capital Goods--0.4% ----------------------------------------------------------------------------------------------------------- Industrial Services--0.2% Allied Waste North America, Inc., 10% Sr. Unsec. Sub. Nts., Series B, 8/1/09 1,000,000 1,032,500 ----------------------------------------------------------------------------------------------------------- United Rentals, Inc., 9% Sr. Unsec. Sub. Nts., Series B, 4/1/09 500,000 465,000 ------------ 1,497,500
12 Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) --------------------------------------------------------------------------------
Principal Market Value Amount See Note 1 ----------------------------------------------------------------------------------------------------------- Manufacturing--0.2% Blount, Inc., 13% Sr. Sub. Nts., 8/1/09 $ 700,000 $ 407,750 ----------------------------------------------------------------------------------------------------------- Caterpillar, Inc., 7.375% Unsec. Debs., 3/1/97 400,000 399,698 ----------------------------------------------------------------------------------------------------------- International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 500,000 506,875 ------------ 1,314,323 ----------------------------------------------------------------------------------------------------------- Communication Services--1.2% ----------------------------------------------------------------------------------------------------------- Telecommunications: Long Distance--0.4% Exodus Communications, Inc.: 11.25% Sr. Nts., 7/1/08 500,000 175,000 11.625% Sr. Nts., 7/15/10 300,000 105,000 ----------------------------------------------------------------------------------------------------------- Global Crossing Holdings Ltd., 9.625% Sr. Unsec. Nts., 5/15/08 750,000 596,250 ----------------------------------------------------------------------------------------------------------- Level 3 Communications, Inc., 11% Sr. Unsec. Nts., 3/15/08 200,000 89,000 ----------------------------------------------------------------------------------------------------------- Metromedia Fiber Network, Inc.: 10% Sr. Nts., 12/15/09 250,000 96,250 10% Sr. Unsec. Nts., Series B, 11/15/08 750,000 288,750 ----------------------------------------------------------------------------------------------------------- PSINet, Inc., 10% Sr. Unsec. Nts., Series B, 2/15/05(9) 750,000 48,750 ----------------------------------------------------------------------------------------------------------- Vodafone Group plc, 7.75% Unsec. Unsub. Nts., 2/15/10 400,000 420,920 ----------------------------------------------------------------------------------------------------------- WorldCom, Inc., 6.95% Sr. Unsec. Nts., 8/15/28 400,000 340,898 ----------------------------------------------------------------------------------------------------------- XO Communications, Inc., 10.75% Sr. Unsec. Nts., 6/1/09 500,000 162,500 ------------ 2,323,318 ----------------------------------------------------------------------------------------------------------- Telecommunications: Wireless--0.8% Crown Castle International Corp.: 9% Sr. Nts., 5/15/11 500,000 445,000 10.75% Sr. Nts., 8/1/11 350,000 340,375 ----------------------------------------------------------------------------------------------------------- Loral Space & Communications Ltd., 9.50% Sr. Nts., 1/15/06 200,000 151,000 ----------------------------------------------------------------------------------------------------------- Millicom International Cellular SA, 13.50% Sr. Disc. Nts., 6/1/06 750,000 648,750 ----------------------------------------------------------------------------------------------------------- Nextel Communications, Inc.: 0%/9.95% Sr. Disc. Nts., 2/15/08(10) 200,000 125,500 9.375% Sr. Unsec. Nts., 11/15/09 500,000 397,500 ----------------------------------------------------------------------------------------------------------- Omnipoint Corp., 11.50% Sr. Nts., 9/15/09(3) 250,000 288,750 ----------------------------------------------------------------------------------------------------------- ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04(2)(3)(9) 200,000 3,000 ----------------------------------------------------------------------------------------------------------- Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 750,000 731,250 ----------------------------------------------------------------------------------------------------------- VoiceStream Wireless Corp., 10.375% Sr. Unsec. Nts., 11/15/09 1,608,000 1,841,160 ------------ 4,972,285 ----------------------------------------------------------------------------------------------------------- Consumer Cyclicals--0.7% ----------------------------------------------------------------------------------------------------------- Autos & Housing--0.2% Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., Series B, 7/15/07(2)(3)(9) 300,000 40,500 ----------------------------------------------------------------------------------------------------------- D.R. Horton, Inc., 9.75% Sr. Sub. Nts., 9/15/10 400,000 410,000 ----------------------------------------------------------------------------------------------------------- Ford Motor Co., 7.70% Unsec. Debs., 5/15/97 400,000 378,792 ----------------------------------------------------------------------------------------------------------- KB Home, 7.75% Sr. Nts., 10/15/04 400,000 402,000 ------------ 1,231,292 ----------------------------------------------------------------------------------------------------------- Leisure & Entertainment--0.2% Meristar Hospitality Corp., 8.75% Sr. Unsec. Sub. Nts., 8/15/07 500,000 500,000 ----------------------------------------------------------------------------------------------------------- Premier Parks, Inc., 9.75% Sr. Nts., 6/15/07 500,000 505,000 ------------ 1,005,000
Oppenheimer Multiple Strategies Fund/VA 13 -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) --------------------------------------------------------------------------------
Principal Market Value Amount See Note 1 ----------------------------------------------------------------------------------------------------------- Media--0.2% Lamar Media Corp., 9.625% Sr. Unsec. Sub. Nts., 12/1/06 $ 150,000 $ 158,250 ----------------------------------------------------------------------------------------------------------- Time Warner Entertainment Co. LP, 10.15% Sr. Nts., 5/1/12 500,000 612,049 ----------------------------------------------------------------------------------------------------------- Time Warner, Inc., 9.125% Debs., 1/15/13 500,000 572,394 ------------ 1,342,693 ----------------------------------------------------------------------------------------------------------- Retail: General--0.1% Wal-Mart Stores, Inc., 7.55% Sr. Unsec. Nts., 2/15/30 400,000 436,845 ----------------------------------------------------------------------------------------------------------- Consumer Staples--1.8% ----------------------------------------------------------------------------------------------------------- Beverages--0.2% Canandaigua Brands, Inc., 8.625% Sr. Unsec. Nts., 8/1/06 700,000 712,250 ----------------------------------------------------------------------------------------------------------- Coca-Cola Co. (The), 7.375% Unsec. Debs., 7/29/93 360,000 349,784 ------------ 1,062,034 ----------------------------------------------------------------------------------------------------------- Broadcasting--1.5% Adelphia Communications Corp., 9.375% Sr. Nts., 11/15/09 750,000 720,000 ----------------------------------------------------------------------------------------------------------- Chancellor Media Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 6/15/07 1,000,000 1,055,000 ----------------------------------------------------------------------------------------------------------- Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp., 0%/9.92% Sr. Unsec. Disc. Nts., 4/1/11(10) 1,750,000 1,203,125 ----------------------------------------------------------------------------------------------------------- Cumulus Media, Inc., 10.375% Sr. Unsec. Sub. Nts., 7/1/08 300,000 300,000 ----------------------------------------------------------------------------------------------------------- EchoStar Broadband Corp., 10.375% Sr. Unsec. Nts., 10/1/07 900,000 904,500 ----------------------------------------------------------------------------------------------------------- EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09 700,000 689,500 ----------------------------------------------------------------------------------------------------------- NTL Communications Corp., 0%/12.375% Sr. Unsec. Nts., Series B, 10/1/08(10) 500,000 222,500 ----------------------------------------------------------------------------------------------------------- NTL, Inc., 0%/9.75% Sr. Deferred Coupon Nts., Series B, 4/1/08(10) 500,000 218,750 ----------------------------------------------------------------------------------------------------------- Rogers Cablesystems Ltd., 10% Second Priority Sr. Sec. Debs., 12/1/07 1,000,000 1,080,000 ----------------------------------------------------------------------------------------------------------- Sinclair Broadcast Group, Inc.: 8.75% Sr. Sub. Nts., 12/15/07 500,000 478,750 9% Sr. Unsec. Sub. Nts., 7/15/07 375,000 363,750 ----------------------------------------------------------------------------------------------------------- Telewest Communications plc: 9.625% Sr. Debs., 10/1/06 500,000 420,000 11% Sr. Disc. Debs., 10/1/07 1,000,000 847,500 ----------------------------------------------------------------------------------------------------------- United Pan-Europe Communications NV, 10.875% Sr. Unsec. Nts., Series B, 8/1/09 400,000 143,000 ----------------------------------------------------------------------------------------------------------- Young Broadcasting, Inc., 8.75% Sr. Sub. Debs., 6/15/07 700,000 656,250 ------------ 9,302,625 ----------------------------------------------------------------------------------------------------------- Entertainment--0.0% AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11 300,000 271,500 ----------------------------------------------------------------------------------------------------------- Food & Drug Retailers--0.1% Fleming Cos., Inc.: 10.50% Sr. Sub. Nts., Series B, 12/1/04 300,000 307,500 10.625% Sr. Sub. Nts., Series B, 7/31/07 500,000 515,000 ------------ 822,500 ----------------------------------------------------------------------------------------------------------- Household Goods--0.0% Revlon Consumer Products Corp., 9% Sr. Nts., 11/1/06 200,000 144,000 ----------------------------------------------------------------------------------------------------------- Energy--0.2% Energy Services--0.1% Frontier Oil Corp., 11.75% Sr. Nts., 11/15/09 250,000 268,750 ----------------------------------------------------------------------------------------------------------- R&B Falcon Corp., 9.50% Sr. Unsec. Nts., 12/15/08 500,000 580,812 ------------ 849,562
14 Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) --------------------------------------------------------------------------------
Principal Market Value Amount See Note 1 ----------------------------------------------------------------------------------------------------------- Oil: Domestic--0.1% Conoco, Inc., 6.95% Sr. Unsec. Nts., 4/15/29 $ 400,000 $ 385,576 ----------------------------------------------------------------------------------------------------------- Financial--0.8% ----------------------------------------------------------------------------------------------------------- Banks--0.1% ABN AMRO Bank NV (NY Branch), 7.125% Sub. Nts., Series B, 10/15/93 400,000 382,506 ----------------------------------------------------------------------------------------------------------- Bank of America Corp., 7.80% Jr. Unsec. Sub. Nts., 2/15/10 400,000 425,377 ------------ 807,883 ----------------------------------------------------------------------------------------------------------- Diversified Financial--0.6% Citigroup Inc., 6.875% Unsec. Nts., 2/15/98 450,000 414,137 ----------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn. Nts.: 5.125%, 2/13/04 1,750,000 1,758,085 7.125%, 1/15/30 400,000 428,937 ----------------------------------------------------------------------------------------------------------- General Electric Capital Corp., 7.25% Nts., Series A, 2/1/05 400,000 424,636 ----------------------------------------------------------------------------------------------------------- Goldman Sachs Group, Inc. (The), 7.80% Sr. Unsec. Unsub. Nts., Series B, 1/28/10 400,000 422,462 ----------------------------------------------------------------------------------------------------------- International Business Machines Corp., 7.125% Sr. Unsec. Unsub. Debs., 12/1/96 400,000 378,904 ----------------------------------------------------------------------------------------------------------- 3,827,161 ----------------------------------------------------------------------------------------------------------- Real Estate Investment Trusts--0.1% Meristar Hospitality Corp., 9.125% Sr. Nts., 1/15/11(4) 500,000 506,250 ----------------------------------------------------------------------------------------------------------- Healthcare--0.1% ----------------------------------------------------------------------------------------------------------- Healthcare/Drugs--0.0% Amgen, Inc., 8.125% Unsec. Debs., 4/1/97 91,000 91,039 ----------------------------------------------------------------------------------------------------------- Healthcare/Supplies & Services--0.1% Sun Healthcare Group, Inc., 9.375% Sr. Sub. Nts., 5/1/08(2)(3)(9) 1,000,000 150 ----------------------------------------------------------------------------------------------------------- Tenet Healthcare Corp.: 8.125% Sr. Unsec. Sub. Nts., Series B, 12/1/08 200,000 206,250 9.25% Sr. Nts., 9/1/10 200,000 226,500 ------------ 432,900 ----------------------------------------------------------------------------------------------------------- Technology--0.1% ----------------------------------------------------------------------------------------------------------- Electronics--0.1% Amkor Technology, Inc., 9.25% Sr. Unsec. Nts., 5/1/06 500,000 485,000 ----------------------------------------------------------------------------------------------------------- Motorola, Inc., 5.22% Unsec. Debs., 10/1/97 140,000 78,685 ------------ 563,685 ----------------------------------------------------------------------------------------------------------- Transportation--0.3% ----------------------------------------------------------------------------------------------------------- Air Transportation--0.2% Amtran, Inc., 10.50% Sr. Nts., 8/1/04 500,000 442,500 ----------------------------------------------------------------------------------------------------------- Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04(9) 1,000,000 1,005,000 ------------ 1,447,500 ----------------------------------------------------------------------------------------------------------- Railroads & Truckers--0.1% Norfolk Southern Corp., 7.90% Sr. Bonds, 5/15/97 400,000 396,505 ----------------------------------------------------------------------------------------------------------- Utilities--0.3% ----------------------------------------------------------------------------------------------------------- Electric Utilities--0.1% Calpine Corp., 8.75% Sr. Nts., 7/15/07 300,000 296,091 ----------------------------------------------------------------------------------------------------------- Gas Utilities--0.2% Funding Corp./Beaver Valley Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17 989,000 1,059,900 ------------ Total Non-Convertible Corporate Bonds and Notes (Cost $48,363,849) 43,508,853
Oppenheimer Multiple Strategies Fund/VA 15 -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) --------------------------------------------------------------------------------
Principal Market Value Amount See Note 1 ----------------------------------------------------------------------------------------------------------- Convertible Corporate Bonds and Notes--2.1% ----------------------------------------------------------------------------------------------------------- Alkermes, Inc., 3.75% Cv. Sub. Nts., 2/15/07 $ 2,000,000 $ 1,512,500 ----------------------------------------------------------------------------------------------------------- CNET Networks, Inc., 5% Cv. Unsec. Nts., 3/1/06 3,000,000 2,133,750 ----------------------------------------------------------------------------------------------------------- Gilat Satellite Networks Ltd., 4.25% Cv. Unsec. Sub. Nts., 3/15/05 1,500,000 900,000 ----------------------------------------------------------------------------------------------------------- Human Genome Sciences, Inc., 3.75% Cv. Unsec. Nts., 3/15/07 750,000 614,062 ----------------------------------------------------------------------------------------------------------- Incyte Genomics, Inc., 5.50% Cv. Unsec. Nts., 2/1/07 2,500,000 1,875,000 ----------------------------------------------------------------------------------------------------------- Quanex Corp., 6.88% Cv. Unsec. Sub. Nts., 6/30/07 1,200,000 1,165,500 ----------------------------------------------------------------------------------------------------------- RF Micro Devices, Inc., 3.75% Cv. Nts., 8/15/05 2,250,000 2,010,938 ----------------------------------------------------------------------------------------------------------- Sepracor, Inc., 5% Cv. Sub. Nts., 2/15/07 2,000,000 1,365,000 ----------------------------------------------------------------------------------------------------------- Sunrise Assisted Living, Inc., 5.50% Cv. Nts., 6/15/02 1,000,000 960,000 ----------------------------------------------------------------------------------------------------------- Vitesse Semiconductor Corp., 4% Cv. Sub. Nts., 3/15/05 1,000,000 805,000 ------------ Total Convertible Corporate Bonds and Notes (Cost $12,708,033) 13,341,750 =========================================================================================================== Structured Instruments--0.0% ----------------------------------------------------------------------------------------------------------- Credit Suisse First Boston Corp. (New York Branch), Carnival Corp. Equity Linked Nts., 7%, 7/17/02(3) (Cost $157,116) 159,120 208,447 =========================================================================================================== Repurchase Agreements--9.2% ----------------------------------------------------------------------------------------------------------- Repurchase agreement with Deutsche Bank Securities, Inc., 3.92%, dated 6/29/01, to be repurchased at $57,174,671 on 7/2/01, collateralized by U.S. Treasury Bonds, 8.875%--10.375%, 11/15/09--2/15/19, with a value of $58,518,158 (Cost $57,156,000) 57,156,000 57,156,000 ----------------------------------------------------------------------------------------------------------- Total Investments, at Value (Cost $ 539,290,459) 98.7% 616,608,513 ----------------------------------------------------------------------------------------------------------- Other Assets Net of Liabilities 1.3 8,119,282 ----------- ------------ Net Assets 100.0% $624,727,795 =========== ============
Principal amount is reported in U.S. Dollars, except for those denoted in the following currencies: AUD -- Australian Dollar GBP -- British Pound Sterling CAD -- Canadian Dollar NZD -- New Zealand Dollar DKK -- Danish Krone ZAR -- South African Rand (1) A sufficient amount of liquid assets has been designated to cover outstanding written call and put options, as follows:
Contracts Expiration Exercise Premium Market Value Subject to Call Date Price Received See Note 1 ----------------- ----------- -------- -------- ------------ ACE Ltd. 160 11/19/01 $ 40.00 $51,606 $39,200 AOL Time Warner, Inc. 65 10/22/01 70.00 6,955 2,600 AT&T Wireless Group 500 7/23/01 35.00 61,000 -- Affymetrix, Inc. 122 11/19/01 65.00 26,473 -- Alcoa, Inc. 70 10/22/01 45.00 12,040 11,200 American Home Products Corp. 65 10/22/01 70.00 10,205 2,275 Analog Devices, Inc. 100 9/24/01 65.00 17,699 3,000 Analog Devices, Inc. 70 12/24/01 80.00 24,289 4,200 Bank of America Corp. 150 8/20/01 60.00 43,611 36,000 Brocade Communications Systems, Inc. 50 7/23/01 125.00 84,222 -- Callaway Golf Co. 200 8/20/01 25.00 56,398 -- Callaway Golf Co. 150 11/19/01 30.00 28,049 -- Clear Channel Communications, Inc. 94 10/22/01 75.00 16,637 8,930 Cooper Cameron Corp. 70 11/19/01 80.00 39,689 4,550 Covance, Inc. 95 11/19/01 17.50 18,714 56,050 Devon Energy Corp. 40 7/23/01 65.00 21,079 200 Donnelley (R.R.) & Sons Co. 204 12/24/01 30.00 41,886 52,020
16 Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------- (1) Outstanding written call and put options continued. Contracts Expiration Exercise Premium Market Value Subject to Call Date Price Received See Note 1 -------------------------------------------------------------------------------------------------------------- Donnelley (R.R.) & Sons Co. 50 12/24/01 $ 35.00 $ 4,200 $ 4,250 Dow Chemical Co. 120 9/24/01 40.00 17,639 4,200 Dynegy, Inc. 155 9/24/01 50.00 120,431 48,050 Dynegy, Inc. 100 9/24/01 55.00 61,198 10,000 Edison International 300 7/23/01 17.50 65,098 -- Emmis Communications Corp., Cl. A 40 9/24/01 40.00 9,080 3,200 Engelhard Corp. 200 10/22/01 25.00 49,398 45,000 Engelhard Corp. 200 10/22/01 30.00 18,799 11,000 Franklin Resources, Inc. 100 10/22/01 50.00 20,199 13,000 Gap, Inc. 21 9/24/01 40.00 3,297 105 General Motors Corp., Cl. H 230 12/24/01 25.00 63,666 33,350 General Motors Corp., Cl. H 220 12/24/01 30.00 34,539 13,200 Goodrich Corp. 128 8/20/01 40.00 38,591 9,600 Goodrich Corp. 128 8/20/01 45.00 36,211 -- Goodrich Corp. 150 11/19/01 45.00 28,799 7,500 Human Genome Sciences, Inc. 42 10/22/01 90.00 38,933 9,450 Intel Corp. 30 10/22/01 45.00 3,660 600 International Business Machines Corp. 25 10/22/01 150.00 7,300 1,375 Intuit, Inc. 87 1/21/02 55.00 27,578 27,840 Intuit, Inc. 20 10/22/01 50.00 5,340 4,300 Jones Apparel Group, Inc. 140 8/20/01 45.00 32,479 18,200 Jones Apparel Group, Inc. 140 8/20/01 50.00 20,579 8,400 KLA-Tencor Corp. 116 9/24/01 60.00 71,250 85,840 KLA-Tencor Corp. 185 12/24/01 80.00 113,362 83,250 Lam Research Corp. 150 9/24/01 40.00 53,548 12,000 Lam Research Corp. 250 12/24/01 55.00 57,998 13,750 Lear Corp. 210 12/24/01 40.00 75,967 36,750 Merrill Lynch & Co., Inc. 50 10/22/01 85.00 12,350 500 Millipore Corp. 58 10/22/01 65.00 27,875 23,780 Morgan Stanley Dean Witter & Co. 68 10/22/01 85.00 19,515 6,120 Mylan Laboratories, Inc. 100 10/22/01 30.00 16,032 17,500 National Semiconductor Corp. 320 11/19/01 40.00 83,837 43,200 News Corp. Ltd. (The), Sponsored ADR, Preference 280 10/22/01 40.00 22,119 9,800 Pall Corp. 180 9/24/01 25.00 30,059 11,700 Palm, Inc. 170 8/20/01 80.00 18,615 -- Peoplesoft, Inc. 120 7/23/01 55.00 91,137 10,200 Peoplesoft, Inc. 150 10/22/01 55.00 25,049 76,500 Philip Morris Cos., Inc. 248 12/24/01 60.00 73,654 24,800 Santa Fe International Corp. 140 7/23/01 45.00 21,970 -- Synopsys, Inc. 150 9/24/01 60.00 97,050 26,250 Synopsys, Inc. 150 9/24/01 75.00 49,048 2,250 Teradyne, Inc. 150 10/22/01 45.00 58,048 -- Titan Corp. (The) 100 10/22/01 25.00 25,919 18,500 Titan Corp. (The) 100 10/22/01 30.00 13,240 7,000 Transocean Sedco Forex, Inc. 100 8/20/01 60.00 29,699 1,500 Tyco International Ltd. 200 10/22/01 40.00 47,398 42,000 Tyco International Ltd. 92 10/22/01 65.00 15,363 11,040 Washington Mutual, Inc. 36 10/22/01 40.00 6,012 7,560
Oppenheimer Multiple Strategies Fund/VA 17 ------------------------------------------------------------------------------- Statement of Investments (Unaudited) (Continued) -------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------- (1) Outstanding written call and put options continued. Contracts Expiration Exercise Premium Market Value Subject to Call Date Price Received See Note 1 --------------------------------------------------------------------------------------------------------------- Washington Mutual, Inc. 36 10/22/01 $43.38 $ 2,664 $ 2,970 Watson Pharmaceuticals, Inc. 110 1/21/02 75.00 25,169 25,300 Xerox Corp. 400 10/22/01 12.50 48,798 20,000 ---------- ---------- 2,500,311 1,112,905 ---------- ---------- Contracts Expiration Exercise Premium Market Value Subject to Put Date Price Received See Note 1 --------------------------------------------------------------------------------------------------------------- Analog Devices, Inc. 150 9/24/01 $25.00 $ 31,049 $ 2,250 Applied Micro Circuits Corp. 170 8/20/01 15.00 33,489 23,800 Applied Micro Circuits Corp. 170 8/20/01 22.50 71,738 95,200 Brocade Communications Systems, Inc. 150 7/23/01 40.00 100,797 29,250 Brocade Communications Systems, Inc. 150 10/22/01 35.00 137,363 64,500 Brocade Communications Systems, Inc. 100 10/22/01 17.50 26,699 5,000 Cisco Systems, Inc. 100 10/22/01 15.00 19,699 8,500 Cisco Systems, Inc. 150 10/22/01 20.00 45,486 44,250 International Rectifier Corp. 150 9/24/01 30.00 74,548 42,000 i2 Technologies, Inc. 150 8/20/01 30.00 112,050 159,000 i2 Technologies, Inc. 100 8/20/01 12.50 18,449 4,500 i2 Technologies, Inc. 120 8/20/01 22.50 76,137 50,400 JDS Uniphase Corp. 70 9/24/01 15.00 12,915 25,200 Nortel Networks Corp. 300 9/24/01 12.50 36,599 105,000 Oracle Corp. 400 9/24/01 12.50 53,798 8,000 Palm, Inc. 79 8/20/01 15.00 23,462 68,730 Palm, Inc. 130 11/19/01 7.50 13,552 29,900 Peoplesoft, Inc. 150 10/22/01 15.00 37,049 -- Sun Microsystems, Inc. 175 10/22/01 15.00 45,411 28,875 Sun Microsystems, Inc. 275 10/22/01 17.50 85,110 79,750 Veritas Software Corp. 100 8/20/01 50.00 84,697 13,000 Yahoo!, Inc. 150 10/22/01 10.00 23,924 2,250 Yahoo!, Inc. 200 10/22/01 12.50 46,899 10,000 ---------- ---------- 1,210,920 899,355 ---------- ---------- $3,711,231 $2,012,260 ========== ==========
(2) Non-income-producing security. (3) Identifies issues considered to be illiquid or restricted--See Note 7 of Notes to Financial Statements. (4) Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $3,664,500 or 0.59% of the Fund's net assets as of June 30, 2001. (5) Units may be comprised of several components, such as debt and equity and/or warrants to purchase equity at some point in the future. For units which represent debt securities, principal amount disclosed represents total underlying principal. (6) Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. (7) Zero coupon bond reflects the effective yield on the date of purchase. (8) Represents the current interest rate for a variable or increasing rate security. (9) Issuer is in default. (10) Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. See accompanying Notes to Financial Statements. 18 Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Statement of Assets and Liabilities For the Six Months Ended June 30, 2001 (Unaudited) -------------------------------------------------------------------------------- =============================================================================================================== Assets Investments, at value (cost $539,290,459)--see accompanying statement $616,608,513 --------------------------------------------------------------------------------------------------------------- Cash 17,426 --------------------------------------------------------------------------------------------------------------- Collateral for options 4,969,450 --------------------------------------------------------------------------------------------------------------- Receivables and other assets: Interest, dividends and principal paydowns 4,074,421 Investments sold 3,264,985 Shares of beneficial interest sold 632,513 Other 3,683 ------------ Total assets 629,570,991 =============================================================================================================== Liabilities Options written, at value (premiums received $3,711,231)--see accompanying statement 2,012,260 --------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 2,550,935 Shares of beneficial interest redeemed 217,392 Shareholder reports 39,386 Trustees' compensation 2 Other 23,221 ------------ Total liabilities 4,843,196 ============================================================================================================== Net Assets $624,727,795 ============ ============================================================================================================== Composition of Net Assets Par value of shares of beneficial interest $ 39,368 -------------------------------------------------------------------------------------------------------------- Additional paid-in capital 531,511,532 -------------------------------------------------------------------------------------------------------------- Undistributed (overdistributed) net investment income 9,738,350 -------------------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) on investments and foreign currency transactions 4,432,140 -------------------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies 79,006,405 ------------ Net assets--applicable to 39,367,866 shares of beneficial interest outstanding $624,727,795 ============ ============================================================================================================== Net Asset Value, Redemption Price Per Share and Offering Price Per Share $15.87
See accompanying Notes to Financial Statements. Oppenheimer Multiple Strategies Fund/VA 19 -------------------------------------------------------------------------------- Statement of Operations For the Six Months Ended June 30, 2001 (Unaudited) --------------------------------------------------------------------------------
============================================================================================================== Investment Income Interest (net of foreign withholding taxes of $345) $ 9,714,371 -------------------------------------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $62,801) 2,416,332 ----------- Total income 12,130,703 ============================================================================================================== Expenses Management fees 2,176,515 -------------------------------------------------------------------------------------------------------------- Shareholder reports 81,363 -------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 25,717 -------------------------------------------------------------------------------------------------------------- Trustees' compensation 3,645 -------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees 2,355 -------------------------------------------------------------------------------------------------------------- Other 23,063 ----------- Total expenses 2,312,658 Less reduction to custodian expenses (2,265) ----------- Net expenses 2,310,393 ============================================================================================================== Net Investment Income 9,820,310 ============================================================================================================== Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments (including premiums on options exercised) 7,929,697 Closing and expiration of option contracts written 1,862,302 Foreign currency transactions (4,060,544) ----------- Net realized gain (loss) 5,731,455 -------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments 14,594,026 Translation of assets and liabilities denominated in foreign currencies 347,383 ----------- Net change 14,941,409 ----------- Net realized and unrealized gain (loss) 20,672,864 ============================================================================================================== Net Increase in Net Assets Resulting from Operations $30,493,174 ===========
See accompanying Notes to Financial Statements. 20 Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Statements of Changes in Net Assets --------------------------------------------------------------------------------
Six Months Ended Year Ended June 30, 2001 December 31, (Unaudited) 2000 ================================================================================================================ Operations Net investment income (loss) $ 9,820,310 $ 24,683,005 ---------------------------------------------------------------------------------------------------------------- Net realized gain (loss) 5,731,455 32,319,691 ---------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) 14,941,409 (20,586,722) ------------ ------------ Net increase (decrease) in net assets resulting from operations 30,493,174 36,415,974 ================================================================================================================ Dividends and/or Distributions to Shareholders Dividends from net investment income (22,752,705) (26,143,340) ---------------------------------------------------------------------------------------------------------------- Distributions from net realized gain (30,390,350) (37,970,659) ================================================================================================================ Beneficial Interest Transactions Net increase (decrease) in net assets resulting from beneficial interest transactions 58,079,832 38,213,035 ================================================================================================================ Net Assets Total increase 35,429,951 10,515,010 ---------------------------------------------------------------------------------------------------------------- Beginning of period 589,297,844 578,782,834 ------------ ------------ End of period [including undistributed (overdistributed) net investment income of $9,738,350 and $22,670,745, respectively] $624,727,795 $589,297,844 ============ ============
See accompanying Notes to Financial Statements. Oppenheimer Multiple Strategies Fund/VA 21 -------------------------------------------------------------------------------- Financial Highlights --------------------------------------------------------------------------------
Six Months Ended June 30, 2001 Year Ended December 31, (Unaudited) 2000 1999 1998 1997 1996 ================================================================================================================================ Per Share Operating Data Net asset value, beginning of period $16.55 $ 17.46 $ 17.05 $ 17.01 $ 15.63 $ 14.55 -------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .25 .72 .82 .71 .62 .72 Net realized and unrealized gain (loss) .56 .38 1.04 .42 1.95 1.45 -------------------------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations .81 1.10 1.86 1.13 2.57 2.17 -------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.64) (.82) (.59) (.16) (.61) (.74) Distributions from net realized gain (.85) (1.19) (.86) (.93) (.58) (.35) -------------------------------------------------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (1.49) (2.01) (1.45) (1.09) (1.19) (1.09) -------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $15.87 $ 16.55 $17.46 $17.05 $17.01 $15.63 ====== ======== ====== ====== ====== ====== =============================================================================================================================== Total Return, at Net Asset Value(1) 5.34% 6.44% 11.80% 6.66% 17.22% 15.50% ================================================================================================================================ Ratios/Supplemental Data Net assets, end of period (in thousands) $624,728 $589,298 $578,783 $622,333 $637,545 $484,285 -------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $610,844 $566,724 $593,151 $640,131 $564,369 $428,277 -------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(2) Net investment income 3.24% 4.36% 4.46% 4.05% 3.86% 4.89% Expenses 0.76% 0.76% 0.73% 0.76%(3) 0.75%(3) 0.77%(3) -------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 20% 42% 17% 43% 42% 40%
(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 of less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. (2) Annualized for periods of less than one full year. (3) Expense ratio reflects the reduction to custodian expenses. See accompanying Notes to Financial Statements. 22 Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Notes to Financial Statements (Unaudited) -------------------------------------------------------------------------------- ================================================================================ 1. Significant Accounting Policies Oppenheimer Multiple Strategies 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 investment objective is to seek a high total investment return, which includes current income and capital appreciation in the value of its shares. The Trust's investment advisor is OppenheimerFunds, Inc. (the Manager). The following is a summary of significant accounting policies consistently followed by the Fund. -------------------------------------------------------------------------------- Securities Valuation. 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). -------------------------------------------------------------------------------- Structured Notes. The Fund invests in structured notes whose market values and redemption prices are linked to the market value of specific securities. The structured notes are leveraged, which increases the Fund's exposure to changes in prices of the underlying securities and increases the volatility of each note's market value relative to the change in the underlying security prices. Fluctuations in value of these securities are recorded as unrealized gains and losses in the accompanying financial statements. The Fund records a realized gain or loss when a structured note is sold or matures. As of June 30, 2001, the market value of these securities comprised 0.0% of the Fund's net assets, and resulted in unrealized gains in the current period of $51,331. -------------------------------------------------------------------------------- Security Credit Risk. The Fund invests in high yield securities, which may be subject to a greater degree of credit risk, greater market fluctuations and risk of loss of income and principal, and may be more sensitive to economic conditions than lower yielding, higher rated fixed income securities. The Fund may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. As of June 30, 2001, securities with an aggregate market value of $1,689,725, representing 0.27% of the Fund's net assets, were in default. -------------------------------------------------------------------------------- Foreign Currency Translation. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. -------------------------------------------------------------------------------- Repurchase Agreements. The Fund requires 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. -------------------------------------------------------------------------------- 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. Oppenheimer Multiple Strategies Fund/VA 23 -------------------------------------------------------------------------------- Notes to Financial Statements (Unaudited) (Continued) -------------------------------------------------------------------------------- ================================================================================ 1. Significant Accounting Policies (continued) 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 paydown gains and losses and the recog-nition 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 Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies, as revised, effective for fiscal years beginning after December 15, 2000. As required, the Fund began amortizing premiums on debt securities effective January 1, 2001. Prior to this date, the Fund did not amortize premiums on debt securities. The cumulative effect of this accounting change had no impact on the total net assets of the Fund, but resulted in a $2,003,025 decrease to cost of securities and a corresponding $2,003,025 increase in net unrealized appreciation, based on securities held as of December 31, 2000. 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 ------------------------------ ----------------------------- Shares Amount Shares Amount --------------------------------------------------------------------------------------------------------------- Sold 3,820,664 $ 62,479,542 5,866,277 $ 97,138,029 Dividends and/or distributions reinvested 3,507,792 53,143,055 3,923,745 64,113,999 Redeemed (3,563,387) (57,542,765) (7,335,615) (123,038,993) ---------- ------------ ---------- ------------- Net increase (decrease) 3,765,069 $ 58,079,832 2,454,407 $ 38,213,035 ========== ============ ========== ============= ===============================================================================================================
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 $121,436,554 and $108,729,992, respectively. 24 Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Notes to Financial Statements (Unaudited) (Continued) -------------------------------------------------------------------------------- ================================================================================ 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 0.72%. -------------------------------------------------------------------------------- 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. ================================================================================ 5. Foreign Currency Contracts A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts for operational purposes and to seek to protect against adverse exchange rate fluctuations. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates as provided by a reliable bank, dealer or pricing service. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign currency transactions. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. ================================================================================ 6. Option Activity The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a note to the Statement of Investments. Options written are reported as a liability in the Statement of Assets and Liabilities. Realized gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Oppenheimer Multiple Strategies Fund/VA 25 -------------------------------------------------------------------------------- Notes to Financial Statements (Unaudited) (Continued) -------------------------------------------------------------------------------- ================================================================================ 6. Option Activity (continued) Written option activity for the six months ended June 30, 2001, was as follows:
Call Options Put Options ----------------------------------------------------- Number of Amount of Number of Amount of Contracts Premiums Contracts Premiums ------------------------------------------------------------------------------------------------------ Options outstanding as of December 31, 2000 6,938 $ 2,050,546 90 $ 66,479 Options written 12,192 3,354,008 4,028 1,462,308 Options closed or expired (9,392) (2,754,010) (130) (70,147) Options exercised (488) (150,233) (299) (247,720) ------ ----------- ----- ---------- Options outstanding as of June 30, 2001 9,250 $ 2,500,311 3,689 $1,210,920 ====== =========== ===== ==========
================================================================================ 7. 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 $14,834,098, which represents 2.37% of the Fund's net assets, of which $2,845 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- $15.25 $14.15 $(219) 12/29/98
26 Oppenheimer Multiple Strategies Fund/VA -------------------------------------------------------------------------------- Oppenheimer Multiple Strategies 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 George Evans, Vice President Michael S. Levine, Vice President David P. Negri, Vice President Richard H. Rubinstein, Vice President Susan Switzer, 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 Multiple Strategies 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 Multiple Strategies Fund/VA 27