-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MbpPE0qN+nzHNYH5GrGZR/Iec8FJ8x/RbaY/NOvE0EmTHdM5DUObyBWHJD28umqb 8EjhgtWZo4U1tRowjWhG5w== 0001110538-02-000054.txt : 20020415 0001110538-02-000054.hdr.sgml : 20020415 ACCESSION NUMBER: 0001110538-02-000054 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020308 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER VARIABLE ACCOUNT FUNDS CENTRAL INDEX KEY: 0000752737 IRS NUMBER: 840974272 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04108 FILM NUMBER: 02569803 BUSINESS ADDRESS: STREET 1: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 2: 3410 S GALENA ST CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER VARIABLE LIFE FUNDS DATE OF NAME CHANGE: 19860609 N-30D 1 opp220053.txt Annual Report December 31, 2001 - ------------------------------------------------------------------------------- Oppenheimer Global Securities Fund/VA A Series of Oppenheimer Variable Account Funds [logo] OppenheimerFunds The Right Way to Invest Oppenheimer Variable Account Funds--Oppenheimer Global Securities Fund/VA =============================================================================== Objective Oppenheimer Global Securities Fund/VA, a series of Oppenheimer Variable Account Funds, seeks long-term capital appreciation by investing a substantial portion of assets in common stocks of U.S. and foreign companies. =============================================================================== Narrative by William Wilby, Portfolio Manager Over the fiscal year that ended December 31, 2001, the performance of Oppenheimer Global Securities Fund/VA reflected the volatile conditions of the overall global market. We attribute our long-term results to our investment approach, which focuses on individual companies that, we feel, stand to benefit from one or more key worldwide growth trends. The four themes we've identified are new technology, mass affluence, restructuring and aging populations. Using these themes as a starting point, we then employ rigorous fundamental research to uncover companies with the potential to deliver earnings growth and stock price appreciation in nearly any type of market. Over the course of the fiscal year, the United States experienced severe economic contraction, characterized by cutbacks in business investment, declining corporate profits and rising unemployment. However, during the first three months of 2001, many analysts believed that projected growth overseas would compensate for the slowdown. When this failed to happen, in part because of weaker foreign currencies, investment flows--particularly to the core European economies--fell dramatically. For the most part, investors continued to favor U.S. markets, which benefited from a strong dollar. Towards the fourth quarter of 2001, however, this relationship began to change. With U.S. economic growth retreating, European currencies rallied against the dollar. Moreover, because inflationary pressures remained in check, European central banks followed the lead of the U.S. Federal Reserve by lowering short-term interest rates. In the aftermath of the September 11 terrorist attacks, central banks in the United States, Europe and Japan responded with additional rate cuts in an attempt to stimulate economic growth and bolster global equity markets. While the closing and subsequent reopening of U.S. stock markets resulted in a torrent of pent-up selling, European markets fared better relative to the U.S. On the other hand, Japan remained mired in economic malaise, despite hopes that a newly elected government would implement much-needed financial reforms. The rest of Asia, most notably Taiwan, Korea and Singapore, came under pressure as their technology-centered economies struggled with declining U.S. demand. Meanwhile, the slowdown in the U.S. led to concerns of looming economic crisis in Latin America, particularly in Brazil and Argentina. As always, we remained focused on finding good companies in good businesses at good prices. Because we view the world as one stock market, we have flexibility in uncovering prospective holdings that meet these criteria. Of course, given current economic and market conditions, we have become increasingly selective. Nonetheless, with current valuations lower than they have been in three years, we believe there are always opportunities to buy good companies. By good companies, we mean those that, in our view, stand to profit from one or more key worldwide growth trends--including mass affluence, new technology, corporate restructuring and aging populations. Using these broad themes as a starting point, we then employ rigorous fundamental analysis to identify attractively valued companies with accelerating earnings and cash flow. This approach has afforded us, over the past 12 months, numerous opportunities to purchase what we consider to be fundamentally sound companies at very reasonable prices. 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. 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 Global Securities Fund/VA Oppenheimer Variable Account Funds--Oppenheimer Global Securities Fund/VA =============================================================================== Also, while close attention must be paid to the risks posed by individual companies, investing in foreign securities also entails additional risks, such as foreign currency fluctuations and higher expenses. Some positive contributors during the past 12 months included, Reckitt Benckiser plc, a leading pan-European household products concern, which continued to realize enhanced operating efficiencies, market share gains and higher profits from its 1999 merger. Likewise, French drug company Sanofi-Synthelabo SA benefited from a restructuring that allowed the company to focus on its core pharmaceutical business, which includes two drugs that could have a very positive impact in preventing heart attacks. However, shares of U.S.-based Cadence Design Systems, Inc., a leading provider of automated semiconductor design software, fell throughout the period despite reporting positive earnings. Although a lower interest environment may stimulate global economic growth, technology spending and corporate earnings in the months ahead, the prospect of diminished consumer activity may lead to continued volatility. Therefore, we remain committed to our stock-by-stock approach, relying on the individual strengths of our highly experienced, highly collaborative management team. Exploring the world over for these opportunities is an important reason why Oppenheimer Global Securities Fund/VA is part of The Right Way to Invest. - ------------------------------------------------------------------------------- Management's discussion of performance. During the fiscal year that ended December 31, 2001, Oppenheimer Global Securities Fund/VA operated in a challenging environment. Cutbacks in business investment, declining corporate profits and rising unemployment led to severe economic contraction and lower stock prices in the United States. Despite lower interest rates in much of the world, the effects of economic slowdown spread to overseas markets. As a result, rates of foreign investment and therefore, equity prices fell dramatically. In light of these developments, the Fund manager continued to focus on leading businesses believed to offer solid earnings growth prospects and attractive valuations, while poised to benefit from key worldwide growth trends. The Fund's portfolio holdings, allocations and strategies are subject to change. =============================================================================== Comparing the Fund's performance to the market. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares, as of December 31, 2001. In the case of Non-Service shares, performance is measured over a 10-year period. In the case of Service shares, performance is measured from inception of the class on July 13, 2000. Performance information does not reflect charges that apply to separate accounts investing in the Fund. If these charges were taken into account, performance would be lower. The graphs assume that all dividends and capital gains distributions were reinvested in additional shares. The Fund's performance is compared to the performance of the Morgan Stanley Capital International (MSCI) World Index, an unmanaged index of issuers listed on the stock exchanges of 20 foreign countries and the United States. It is widely recognized as a measure of global stock market performance. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the index. Oppenheimer Global Securities Fund/VA 3 Oppenheimer Variable Account Funds--Oppenheimer Global Securities Fund/VA Non-Service shares Comparison of Change in Value of $10,000 Hypothetical Investments in: [line chart]
OVAF/Oppenheimer Global Morgan Stanley Capital Securities Fund/VA International (MSCI) Non-Service Shares World Index 12/31/91 10000 10000 03/31/92 10289 9196 06/30/92 10415 9375 09/30/92 9425 9545 12/31/92 9289 9534 03/31/93 10454 10366 06/30/93 11211 11009 09/30/93 12881 11539 12/31/93 15822 11739 03/31/94 15243 11825 06/30/94 15074 12194 09/30/94 16182 12470 12/31/94 14916 12394 03/31/95 14447 12991 06/30/95 15128 13562 09/30/95 15840 14337 12/31/95 15250 15036 03/31/96 15830 15666 06/30/96 16511 16138 09/30/96 17040 16373 12/31/96 17965 17141 03/31/97 18875 17209 06/30/97 20861 19819 09/30/97 22529 20405 12/31/97 21993 19922 03/31/98 24209 22796 06/30/98 24675 23280 09/30/98 20820 20509 12/31/98 25095 24862 03/31/99 25975 25771 06/30/99 28558 27023 09/30/99 29046 26645 12/31/99 39772 31162 03/31/00 45516 31504 06/30/00 44028 30410 09/30/00 43312 28904 12/31/00 41796 27137 03/31/01 35542 23670 06/30/01 38294 24327 09/30/01 31453 20847 12/31/01 36765 22653
Average Annual Total Return of Non-Service shares of the Fund at 12/31/01 1-Year -12.04% 5-Year 15.40% 10-Year 13.91% [end line chart] Service shares Comparison of Change in Value of $10,000 Hypothetical Investments in: [line chart]
OVAF/Oppenheimer Global Morgan Stanley Capital Securities Fund/VA International (MSCI) Service Shares World Index 07/13/00 10000 10000 09/30/00 9620 9505 12/31/00 9280 8924 03/31/01 7889 7784 06/30/01 8498 8000 09/30/01 6977 6855 12/31/01 8151 7449
Average Annual Total Return of Service Class Shares of the Fund at 12/31/01 1-Year -12.17% Since Inception -13.02% [end line chart] Because of ongoing market volatility, the Fund's performance has been subject to fluctuations and current performance may be less than the results shown. For updates on the Fund's performance, please call us at 1.800.981.2871. Past performance is not predictive of future performance. The inception dates of the Fund were 11/20/90 for the Non-Service shares and 7/13/00 for its Service shares. The performance information in the graphs for the Morgan Stanley World Index begins on 12/31/91 in the first graph and on 6/30/00 for the second graph. Total returns include changes in net asset value per share and does not include the charges associated with the separate account products which offer this Fund. Such performance would have been lower if such charges were taken into account. Total returns and the ending account value in the graphs show changes in share value and include reinvestment of all dividends and capital gains distributions. Graphs are not drawn to same scale. An explanation of the calculation of the performance is in the Statement of Additional Information. 4 Oppenheimer Global Securities Fund/VA Statement of Investments December 31, 2001
Market Value Shares See Note 1 - ---------------------------------------------------------------------------------------------------- Common Stocks--95.3% - ---------------------------------------------------------------------------------------------------- Basic Materials--0.8% - ---------------------------------------------------------------------------------------------------- Chemicals--0.8% International Flavors & Fragrances, Inc. 512,900 $ 15,238,259 - ---------------------------------------------------------------------------------------------------- Capital Goods--5.0% - ---------------------------------------------------------------------------------------------------- Aerospace/Defense--1.4% Empresa Brasileira de Aeronautica SA (Embraer), ADR 768,000 16,995,840 - ---------------------------------------------------------------------------------------------------- Raytheon Co. 300,500 9,757,235 ------------ 26,753,075 - ---------------------------------------------------------------------------------------------------- Electrical Equipment--0.8% Kudelski SA(1) 159,800 9,336,024 - ---------------------------------------------------------------------------------------------------- Toshiba Corp. 1,642,000 5,637,876 ------------ 14,973,900 - ---------------------------------------------------------------------------------------------------- Industrial Services--1.5% Rentokil Initial plc 7,087,900 28,471,414 - ---------------------------------------------------------------------------------------------------- Manufacturing--1.3% Sanmina-SCI Corp.(1) 301,300 5,995,870 - ---------------------------------------------------------------------------------------------------- Societe BIC SA 558,537 19,077,247 ------------ 25,073,117 - ---------------------------------------------------------------------------------------------------- Communication Services--2.3% - ---------------------------------------------------------------------------------------------------- Telecommunications: Long Distance--0.1% Global Crossing Ltd.(1) 2,433,200 2,043,888 - ---------------------------------------------------------------------------------------------------- Telephone Utilities--2.0% Cable & Wireless plc(1) 1,261,969 6,070,193 - ---------------------------------------------------------------------------------------------------- KDDI Corp. 3,913 7,314,856 - ---------------------------------------------------------------------------------------------------- SK Telecom Co. Ltd. 25,380 5,178,409 - ---------------------------------------------------------------------------------------------------- Tele Norte Leste Participacoes SA (Telemar), Preference 1,275,819,230 20,154,686 ------------ 38,718,144 - ---------------------------------------------------------------------------------------------------- Telecommunications: Wireless--0.2% Telesp Celular Participacoes SA, ADR 504,300 4,669,818 - ---------------------------------------------------------------------------------------------------- Consumer Cyclicals--14.8% - ---------------------------------------------------------------------------------------------------- Autos & Housing--4.3% Hanson plc 2,853,600 19,685,834 - ---------------------------------------------------------------------------------------------------- Porsche AG, Preferred 142,499 54,165,546 - ---------------------------------------------------------------------------------------------------- Valeo SA 233,900 9,330,252 ------------ 83,181,632 - ---------------------------------------------------------------------------------------------------- Leisure & Entertainment--3.2% Hasbro, Inc. 438,800 7,121,724 - ---------------------------------------------------------------------------------------------------- Hilton Group plc 3,250,000 9,980,405 - ---------------------------------------------------------------------------------------------------- International Game Technology(1) 151,600 10,354,280 - ---------------------------------------------------------------------------------------------------- P&O Princess Cruises plc 2,686,518 15,639,833 - ---------------------------------------------------------------------------------------------------- Six Continents plc 1,955,600 19,354,026 ------------ 62,450,268
Oppenheimer Global Securities Fund/VA 5 Statement of Investments (Continued)
Market Value Shares See Note 1 - --------------------------------------------------------------------------------------------------- Media--5.0% AOL Time Warner, Inc.(1) 618,000 $ 19,837,800 - --------------------------------------------------------------------------------------------------- Pearson plc 633,000 7,287,231 - --------------------------------------------------------------------------------------------------- Reed International plc 2,312,000 19,179,843 - --------------------------------------------------------------------------------------------------- Singapore Press Holdings Ltd. 1,748,000 20,637,097 - --------------------------------------------------------------------------------------------------- Telewest Communications plc(1) 5,559,800 5,016,874 - --------------------------------------------------------------------------------------------------- United Pan-Europe Communications NV, Cl. A(1) 2,498,900 1,157,011 - --------------------------------------------------------------------------------------------------- Wolters Kluwer NV 1,042,639 23,766,164 ------------ 96,882,020 - --------------------------------------------------------------------------------------------------- Retail: Specialty--2.3% Best Buy Co., Inc.(1) 142,700 10,628,296 - --------------------------------------------------------------------------------------------------- Boots Co. plc 2,026,500 17,239,057 - --------------------------------------------------------------------------------------------------- Circuit City Stores, Inc./Circuit City Group 633,600 16,441,920 ------------ 44,309,273 - --------------------------------------------------------------------------------------------------- Consumer Staples--14.7% - ---------------------------------------------------------------------------------------------------- Beverages--3.3% Cadbury Schweppes plc 5,553,751 35,403,230 - --------------------------------------------------------------------------------------------------- Companhia de Bebidas das Americas, ADR 539,000 10,936,310 - --------------------------------------------------------------------------------------------------- Fomento Economico Mexicano, SA de CV, UBD 2,757,700 9,444,487 - --------------------------------------------------------------------------------------------------- Grupo Modelo, SA de CV, Series C 3,708,000 8,311,000 ------------ 64,095,027 - --------------------------------------------------------------------------------------------------- Broadcasting--2.9% Grupo Televisa SA, Sponsored GDR(1) 402,200 17,366,996 - --------------------------------------------------------------------------------------------------- Sirius Satellite Radio, Inc.(1) 470,300 5,469,589 - --------------------------------------------------------------------------------------------------- Television Broadcasts Ltd. 4,617,832 20,015,994 - --------------------------------------------------------------------------------------------------- XM Satellite Radio Holdings, Inc.(1) 687,100 12,615,156 ------------ 55,467,735 - --------------------------------------------------------------------------------------------------- Entertainment--2.6% Liberty Media Corp., Cl. A(1) 308,600 4,320,400 - --------------------------------------------------------------------------------------------------- Nintendo Co. Ltd. 202,772 35,507,534 - --------------------------------------------------------------------------------------------------- Zee Telefilms Ltd. 4,605,600 10,663,941 ------------ 50,491,875 - --------------------------------------------------------------------------------------------------- Food--0.5% Diageo plc(1) 779,600 8,906,844 - --------------------------------------------------------------------------------------------------- Household Goods--5.4% Hindustan Lever Ltd. 3,977,700 18,449,038 - --------------------------------------------------------------------------------------------------- Reckitt Benckiser plc 4,174,118 60,750,113 - --------------------------------------------------------------------------------------------------- Wella AG, Preference, Non-Vtg. 461,800 23,807,711 ------------ 103,006,862 - --------------------------------------------------------------------------------------------------- Energy--4.5% - --------------------------------------------------------------------------------------------------- Oil: Domestic--1.0% ChevronTexaco Corp. 222,800 19,965,108
6 Oppenheimer Global Securities Fund/VA Statement of Investments (Continued)
Market Value Shares See Note 1 - --------------------------------------------------------------------------------------------------- Oil: International--3.5% Alberta Energy Co. Ltd. 233,300 $ 8,793,874 - --------------------------------------------------------------------------------------------------- BP plc, ADR 471,688 21,938,209 - --------------------------------------------------------------------------------------------------- Husky Energy, Inc. 1,621,915 16,734,286 - --------------------------------------------------------------------------------------------------- Royal Dutch Petroleum Co., NY Shares 387,300 18,985,446 ------------ 66,451,815 - --------------------------------------------------------------------------------------------------- Financial--13.3% - --------------------------------------------------------------------------------------------------- Banks--5.5% Australia & New Zealand Banking Group Ltd. 3,347,200 30,514,505 - --------------------------------------------------------------------------------------------------- Bank One Corp. 910,200 35,543,310 - --------------------------------------------------------------------------------------------------- Royal Bank of Scotland Group plc (The) 895,842 21,799,677 - --------------------------------------------------------------------------------------------------- Wachovia Corp. 580,500 18,204,480 ------------ 106,061,972 - --------------------------------------------------------------------------------------------------- Diversified Financial--5.3% American Express Co. 497,200 17,745,068 - --------------------------------------------------------------------------------------------------- Citigroup, Inc. 187,766 9,478,428 - --------------------------------------------------------------------------------------------------- Credit Saison Co. Ltd. 663,000 12,899,817 - --------------------------------------------------------------------------------------------------- Fannie Mae 510,000 40,545,000 - --------------------------------------------------------------------------------------------------- ICICI Ltd., Sponsored ADR 1,371,000 8,198,580 - --------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc. 137,000 9,151,600 - --------------------------------------------------------------------------------------------------- MBNA Corp. 123,800 4,357,760 ------------ 102,376,253 - --------------------------------------------------------------------------------------------------- Insurance--2.5% ACE Ltd. 466,600 18,733,990 - --------------------------------------------------------------------------------------------------- Axa SA(1) 361,400 7,552,424 - --------------------------------------------------------------------------------------------------- Berkshire Hathaway, Inc., Cl. B(1) 4,520 11,413,000 - --------------------------------------------------------------------------------------------------- Manulife Financial Corp. 367,400 9,574,541 ------------ 47,273,955 - --------------------------------------------------------------------------------------------------- Healthcare--18.1% - --------------------------------------------------------------------------------------------------- Healthcare/Drugs--12.9% American Home Products Corp. 438,600 26,912,496 - --------------------------------------------------------------------------------------------------- Amgen, Inc.(1) 508,900 28,722,316 - --------------------------------------------------------------------------------------------------- AstraZeneca plc 212,500 9,581,262 - --------------------------------------------------------------------------------------------------- Eisai Co. Ltd. 426,000 10,596,368 - --------------------------------------------------------------------------------------------------- Elan Corp. plc, ADR(1) 455,100 20,506,806 - --------------------------------------------------------------------------------------------------- Gilead Sciences, Inc.(1) 289,240 19,008,853 - --------------------------------------------------------------------------------------------------- Human Genome Sciences, Inc.(1) 222,400 7,499,328 - --------------------------------------------------------------------------------------------------- Johnson & Johnson 593,586 35,080,933 - --------------------------------------------------------------------------------------------------- Novartis AG 298,600 10,790,821 - --------------------------------------------------------------------------------------------------- Oxford GlycoSciences plc(1) 426,612 4,035,792 - --------------------------------------------------------------------------------------------------- Pfizer, Inc. 484,800 19,319,280 - --------------------------------------------------------------------------------------------------- Protein Design Labs, Inc.(1) 50,100 1,643,280 - --------------------------------------------------------------------------------------------------- QIAGEN NV(1) 188,993 3,533,867 - --------------------------------------------------------------------------------------------------- Sanofi-Synthelabo SA 691,700 51,611,555 ------------ 248,842,957
Oppenheimer Global Securities Fund/VA 7 Statement of Investments (Continued)
Market Value Shares See Note 1 - --------------------------------------------------------------------------------------------------- Healthcare/Supplies & Services--5.2% Affymetrix, Inc.(1) 227,800 $ 8,599,450 - --------------------------------------------------------------------------------------------------- Amersham plc 533,000 5,154,714 - --------------------------------------------------------------------------------------------------- Applera Corp./Applied Biosystems Group 176,800 6,942,936 - --------------------------------------------------------------------------------------------------- Essilor International SA 175,000 5,290,089 - --------------------------------------------------------------------------------------------------- Fresenius AG, Preference(1) 402,026 32,682,109 - --------------------------------------------------------------------------------------------------- Laboratory Corp. of America Holdings, Inc.(1) 45,100 3,646,335 - --------------------------------------------------------------------------------------------------- Oxford Health Plans, Inc.(1) 173,000 5,214,220 - --------------------------------------------------------------------------------------------------- Quest Diagnostics, Inc.(1) 134,300 9,630,653 - --------------------------------------------------------------------------------------------------- Quintiles Transnational Corp.(1) 1,088,300 17,467,215 - --------------------------------------------------------------------------------------------------- Smith & Nephew plc 776,000 4,686,970 ------------ 99,314,691 - --------------------------------------------------------------------------------------------------- Technology--20.5% - --------------------------------------------------------------------------------------------------- Computer Hardware--1.9% International Business Machines Corp. 204,000 24,675,840 - --------------------------------------------------------------------------------------------------- Mentor Graphics Corp.(1) 503,500 11,867,495 ------------ 36,543,335 - --------------------------------------------------------------------------------------------------- Computer Services--0.1% Trend Micro, Inc.(1) 72,000 1,703,037 - --------------------------------------------------------------------------------------------------- Computer Software--11.3% Amadeus Global Travel Distribution SA 822,297 4,744,483 - --------------------------------------------------------------------------------------------------- Business Objects SA, Sponsored ADR(1) 109,100 3,687,580 - --------------------------------------------------------------------------------------------------- Cadence Design Systems, Inc.(1) 4,075,400 89,332,768 - --------------------------------------------------------------------------------------------------- Check Point Software Technologies Ltd.(1) 108,300 4,320,087 - --------------------------------------------------------------------------------------------------- Electronic Arts, Inc.(1) 775,500 46,491,225 - --------------------------------------------------------------------------------------------------- Infosys Technologies Ltd. 123,300 10,416,318 - --------------------------------------------------------------------------------------------------- Konami Co. Ltd. 124,000 3,680,452 - --------------------------------------------------------------------------------------------------- Oracle Corp.(1) 380,500 5,254,705 - --------------------------------------------------------------------------------------------------- SAP AG 69,157 9,008,773 - --------------------------------------------------------------------------------------------------- Siebel Systems, Inc.(1) 142,400 3,984,352 - --------------------------------------------------------------------------------------------------- Sybase, Inc.(1) 1,160,500 18,289,480 - --------------------------------------------------------------------------------------------------- Symantec Corp.(1) 60,000 3,979,800 - --------------------------------------------------------------------------------------------------- Synopsys, Inc.(1) 245,000 14,472,150 ------------ 217,662,173 - --------------------------------------------------------------------------------------------------- Communications Equipment--2.0% Nokia Corp., Sponsored ADR, A Shares 487,700 11,963,281 - --------------------------------------------------------------------------------------------------- QUALCOMM, Inc.(1) 104,200 5,262,100 - --------------------------------------------------------------------------------------------------- Riverstone Networks, Inc.(1) 657,521 10,914,849 - --------------------------------------------------------------------------------------------------- Scientific-Atlanta, Inc. 392,800 9,403,632 ------------ 37,543,862
8 Oppenheimer Global Securities Fund/VA Statement of Investments (Continued)
Market Value Shares See Note 1 - ------------------------------------------------------------------------------------------------------------------------ Electronics--5.2% Altera Corp.(1) 196,900 $ 4,178,218 - ------------------------------------------------------------------------------------------------------------------------ Applied Materials, Inc.(1) 94,600 3,793,460 - ------------------------------------------------------------------------------------------------------------------------ Hirose Electric Co. 96,420 6,569,744 - ------------------------------------------------------------------------------------------------------------------------ Intel Corp. 181,200 5,698,740 - ------------------------------------------------------------------------------------------------------------------------ Keyence Corp. 28,700 4,771,654 - ------------------------------------------------------------------------------------------------------------------------ Kyocera Corp. 114,800 7,489,242 - ------------------------------------------------------------------------------------------------------------------------ National Semiconductor Corp.(1) 1,015,000 31,251,850 - ------------------------------------------------------------------------------------------------------------------------ Novellus Systems, Inc.(1) 93,200 3,676,740 - ------------------------------------------------------------------------------------------------------------------------ Sharp Corp. 150,000 1,754,540 - ------------------------------------------------------------------------------------------------------------------------ Sony Corp. 285,000 13,025,713 - ------------------------------------------------------------------------------------------------------------------------ STMicroelectronics NV, NY Registered Shares 149,000 4,718,830 - ------------------------------------------------------------------------------------------------------------------------ Thomson Multimedia SA(1) 283,729 8,715,814 - ------------------------------------------------------------------------------------------------------------------------ Xilinx, Inc.(1) 138,500 5,408,425 -------------- 101,052,970 - ------------------------------------------------------------------------------------------------------------------------ Transportation--1.1% - ------------------------------------------------------------------------------------------------------------------------ Air Transportation--1.1% Bombardier, Inc., Cl. B 2,102,200 21,729,186 - ------------------------------------------------------------------------------------------------------------------------ Utilities--0.2% - ------------------------------------------------------------------------------------------------------------------------ Gas Utilities--0.2% Hong Kong & China Gas Co. Ltd. 3,224,000 3,948,396 -------------- Total Common Stocks (Cost $1,735,605,587) 1,835,202,861 Principal Amount - ------------------------------------------------------------------------------------------------------------------------ Non-Convertible Corporate Bonds and Notes--0.1% - ------------------------------------------------------------------------------------------------------------------------ Telewest Communications plc, 11% Sr. Disc. Debs., 10/1/07 (Cost $1,890,672) $ 2,392,000 1,734,200 - ------------------------------------------------------------------------------------------------------------------------ Repurchase Agreements--5.9% - ------------------------------------------------------------------------------------------------------------------------ Repurchase agreement with Banc One Capital Markets, Inc., 1.45%, dated 12/31/01, to be repurchased at $113,642,154 on 1/2/02, collateralized by U.S. Treasury Nts., 4.75%-7.875%, 2/28/02-11/15/08, with a value of $55,119,917 and U.S. Treasury Bonds, 7.25%-11.125%, 8/15/03-5/15/16, with a value of $60,930,962 (Cost $113,633,000) 113,633,000 113,633,000 - ------------------------------------------------------------------------------------------------------------------------ Total Investments, at Value (Cost $1,851,129,259) 101.3% 1,950,570,061 - ------------------------------------------------------------------------------------------------------------------------ Liabilities in Excess of Other Assets (1.3) (24,212,898) ------------ -------------- Net Assets 100.0% $1,926,357,163 ============ ==============
1. Non-income-producing security. Oppenheimer Global Securities Fund/VA 9 Statement of Investments (Continued) - ------------------------------------------------------------------------------- Distribution of investments representing geographic diversification, as a percentage of total investments at value, is as follows:
Geographic Diversification Market Value Percent - --------------------------------------------------------------------------------------------------- United States $ 885,440,404 45.5% - --------------------------------------------------------------------------------------------------- Great Britain 321,915,723 16.5 - --------------------------------------------------------------------------------------------------- Germany 119,664,139 6.1 - --------------------------------------------------------------------------------------------------- Japan 110,950,832 5.7 - --------------------------------------------------------------------------------------------------- France 109,983,793 5.6 - --------------------------------------------------------------------------------------------------- Canada 56,831,887 2.9 - --------------------------------------------------------------------------------------------------- Brazil 52,756,654 2.7 - --------------------------------------------------------------------------------------------------- India 47,727,877 2.4 - --------------------------------------------------------------------------------------------------- The Netherlands 47,442,487 2.4 - --------------------------------------------------------------------------------------------------- Mexico 35,122,483 1.8 - --------------------------------------------------------------------------------------------------- Australia 30,514,505 1.6 - --------------------------------------------------------------------------------------------------- Hong Kong 23,964,391 1.2 - --------------------------------------------------------------------------------------------------- Bermuda 20,777,878 1.1 - --------------------------------------------------------------------------------------------------- Singapore 20,637,097 1.1 - --------------------------------------------------------------------------------------------------- Ireland 20,506,806 1.1 - --------------------------------------------------------------------------------------------------- Switzerland 20,126,845 1.0 - --------------------------------------------------------------------------------------------------- Finland 11,963,281 0.6 - --------------------------------------------------------------------------------------------------- Korea, Republic of (South) 5,178,409 0.3 - --------------------------------------------------------------------------------------------------- Spain 4,744,483 0.2 - --------------------------------------------------------------------------------------------------- Israel 4,320,087 0.2 -------------- ----- Total $1,950,570,061 100.0% ============== =====
See accompanying Notes to Financial Statements. 10 Oppenheimer Global Securities Fund/VA Statement of Assets and Liabilities December 31, 2001
============================================================================================================== Assets Investments, at value (cost $1,851,129,259)--see accompanying statement $1,950,570,061 - -------------------------------------------------------------------------------------------------------------- Unrealized appreciation on foreign currency contracts 2,934 - -------------------------------------------------------------------------------------------------------------- Receivables and other assets: Interest and dividends 2,613,704 Investments sold 2,414,680 Shares of beneficial interest sold 1,272,671 Other 10,774 -------------- Total assets 1,956,884,824 ============================================================================================================== Liabilities Bank overdraft 4,085 - -------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Shares of beneficial interest redeemed 26,947,367 Investments purchased 3,098,411 Shareholder reports 195,550 Distribution and service plan fees 6,056 Trustees' compensation 2,058 Transfer and shareholder servicing agent fees 109 Other 274,025 -------------- Total liabilities 30,527,661 ============================================================================================================== Net Assets $1,926,357,163 ============== ============================================================================================================== Composition of Net Assets Par value of shares of beneficial interest $ 84,358 - -------------------------------------------------------------------------------------------------------------- Additional paid-in capital 1,887,764,686 - -------------------------------------------------------------------------------------------------------------- Undistributed (overdistributed) net investment income 8,817,380 - -------------------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) on investments and foreign currency transactions (69,740,120) - -------------------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies 99,430,859 -------------- Net Assets $1,926,357,163 ============== ============================================================================================================== Net Asset Value Per Share Non-Service shares: Net asset value, redemption price per share and offering price per share (based on net assets of $1,905,889,703 and 83,459,771 shares of beneficial interest outstanding) $22.84 - -------------------------------------------------------------------------------------------------------------- Service shares: Net asset value, redemption price per share and offering price per share (based on net assets of $20,467,460 and 898,517 shares of beneficial interest outstanding) $22.78
See accompanying Notes to Financial Statements. Oppenheimer Global Securities Fund/VA 11 Statement of Operations For the Year Ended December 31, 2001
=========================================================================================================== Investment Income Dividends (net of foreign withholding taxes of $1,870,591) $ 23,341,393 - ----------------------------------------------------------------------------------------------------------- Interest 3,541,151 ------------- Total income 26,882,544 =========================================================================================================== Expenses Management fees 12,404,364 - ----------------------------------------------------------------------------------------------------------- Distribution and service plan fees: Service shares 12,673 - ----------------------------------------------------------------------------------------------------------- Shareholder reports 427,268 - ----------------------------------------------------------------------------------------------------------- Custodian fees and expenses 375,464 - ----------------------------------------------------------------------------------------------------------- Foreign capital gains taxes 100,090 - ----------------------------------------------------------------------------------------------------------- Trustees' compensation 28,261 - ----------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees 12,920 - ----------------------------------------------------------------------------------------------------------- Other 141,381 ------------- Total expenses 13,502,421 Less reduction to custodian expenses (64,857) ------------- Net expenses 13,437,564 =========================================================================================================== Net Investment Income 13,444,980 =========================================================================================================== Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments (19,092,380) Foreign currency transactions (38,623,136) ------------- Net realized gain (loss) (57,715,516) - ----------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments (197,410,342) Translation of assets and liabilities denominated in foreign currencies (16,538,149) ------------- Net change (213,948,491) ------------- Net realized and unrealized gain (loss) (271,664,007) =========================================================================================================== Net Decrease in Net Assets Resulting from Operations $(258,219,027) =============
See accompanying Notes to Financial Statements. 12 Oppenheimer Global Securities Fund/VA Statements of Changes in Net Assets
Year Ended December 31, 2001 2000 =========================================================================================================================== Operations Net investment income (loss) $ 13,444,980 $ 17,605,847 - --------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) (57,715,516) 293,550,064 - --------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) (213,948,491) (230,065,734) -------------- -------------- Net increase (decrease) in net assets resulting from operations (258,219,027) 81,090,177 =========================================================================================================================== Dividends and/or Distributions to Shareholders Dividends from net investment income: Non-Service shares (13,806,412) (5,277,960) Service shares (14,765) -- - --------------------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Non-Service shares (255,967,620) (295,007,742) Service shares (277,910) -- =========================================================================================================================== Beneficial Interest Transactions Net increase (decrease) in net assets resulting from beneficial interest transactions: Non-Service shares 297,559,831 593,246,617 Service shares 19,680,174 985,348 =========================================================================================================================== Net Assets Total increase (decrease) (211,045,729) 375,036,440 - --------------------------------------------------------------------------------------------------------------------------- Beginning of period 2,137,402,892 1,762,366,452 -------------- -------------- End of period [including undistributed (overdistributed) net investment income of $8,817,380 and $10,634,620, respectively] $1,926,357,163 $2,137,402,892 ============== ==============
See accompanying Notes to Financial Statements. Oppenheimer Global Securities Fund/VA 13 Financial Highlights
Year Ended December 31, Non-Service shares 2001 2000 1999 1998 1997 ============================================================================================================= Per Share Operating Data Net asset value, beginning of period $30.33 $33.41 $22.07 $21.37 $17.67 - ------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .17 .27 .14 .24 .25 Net realized and unrealized gain (loss) (3.85) 1.82 12.21 2.64 3.68 - ------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations (3.68) 2.09 12.35 2.88 3.93 - ------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.19) (.09) (.14) (.46) (.23) Dividends in excess of net investment income -- -- (.13) -- -- Distributions from net realized gain (3.62) (5.08) (.74) (1.72) -- - ------------------------------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (3.81) (5.17) (1.01) (2.18) (.23) - ------------------------------------------------------------------------------------------------------------- Net asset value, end of period $22.84 $30.33 $33.41 $22.07 $21.37 ====== ====== ====== ====== ====== ============================================================================================================= Total Return, at Net Asset Value(1) (12.04)% 5.09% 58.48% 14.11% 22.42% ============================================================================================================= Ratios/Supplemental Data Net assets, end of period (in thousands) $1,905,890 $2,136,420 $1,762,366 $1,135,029 $959,110 - ------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $1,918,335 $2,116,100 $1,251,190 $1,055,123 $802,389 - ------------------------------------------------------------------------------------------------------------- Ratios to average net assets:(2) Net investment income 0.70% 0.83% 0.57% 1.22% 1.51% Expenses 0.70% 0.68% 0.69% 0.74%(3) 0.76%(3) - ------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 39% 50% 64% 81% 67%
1. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 2. Annualized for periods of less than one full year. 3. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. 14 Oppenheimer Global Securities Fund/VA Financial Highlights (Continued)
Year Ended December 31, Service shares 2001 2000(1) ======================================================================================================== Per Share Operating Data Net asset value, beginning of period $30.30 $32.65 - -------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .21 .03 Net realized and unrealized gain (loss) (3.92) (2.38) - -------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations (3.71) (2.35) - -------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.19) -- Distributions from net realized gain (3.62) -- - -------------------------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (3.81) -- - -------------------------------------------------------------------------------------------------------- Net asset value, end of period $22.78 $30.30 ====== ====== ======================================================================================================== Total Return, at Net Asset Value(2) (12.17)% (7.20)% ======================================================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $20,467 $983 - -------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 8,502 $325 - -------------------------------------------------------------------------------------------------------- Ratios to average net assets:(3) Net investment income 0.44% 0.60% Expenses 0.85% 0.83% - -------------------------------------------------------------------------------------------------------- Portfolio turnover rate 39% 50%
1. For the period from July 13, 2000 (inception of offering) to December 31, 2000. 2. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized for periods of less than one full year. See accompanying Notes to Financial Statements. Oppenheimer Global Securities Fund/VA 15 Notes to Financial Statements =============================================================================== 1. Significant Accounting Policies Oppenheimer Global Securities 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 long-term capital appreciation by investing a substantial portion of assets in securities of foreign issuers, "growth-type" companies, cyclical industries and special situations that are considered to have appreciation possibilities. The Trust's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers two classes of shares. Both classes are sold at their offering price, which is the net asset value per share, to separate investment accounts of participating insurance companies as an underlying investment for variable life insurance policies, variable annuity contracts or other investment products. The class of shares designated as Service shares is subject to a distribution and service plan. 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). - ------------------------------------------------------------------------------- Foreign Currency Translation. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - ------------------------------------------------------------------------------- Repurchase Agreements. The Fund requires its custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Fund may be delayed or limited. - ------------------------------------------------------------------------------- Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. 16 Oppenheimer Global Securities Fund/VA Notes to Financial Statements (Continued) =============================================================================== 1. Significant Accounting Policies (continued) Federal Taxes. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers to shareholders. As of December 31, 2001, the Fund had available for federal income tax purposes an unused capital loss carryover as follows:
Expiring ------------------------- 2009 $47,254,011
As of December 31, 2001, the Fund had approximately $17,171,000 of post-October losses available to offset future capital gains, if any. Such losses, if unutilized, will expire in 2010. Additionally, the Fund had approximately $100,000 of post-October foreign currency losses which were deferred. If unutilized by the Fund in the following fiscal year, such losses will expire. - ------------------------------------------------------------------------------- Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. - ------------------------------------------------------------------------------- Classification of Dividends and Distributions to Shareholders. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of the recognition of certain foreign currency gains (losses) as ordinary income (loss) for tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Fund. The Fund adjusts the classification of distributions to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations. Accordingly, during the year ended December 31, 2001, amounts have been reclassified to reflect a decrease in undistributed net investment income of $1,441,043. Accumulated net realized loss on investments was decreased by the same amount. Net assets of the Fund were unaffected by the reclassifications. - ------------------------------------------------------------------------------- Investment Income. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - ------------------------------------------------------------------------------- Security Transactions. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. - ------------------------------------------------------------------------------- Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Oppenheimer Global Securities Fund/VA 17 Notes to Financial Statements (Continued) =============================================================================== 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:
Year Ended December 31, 2001 Year Ended December 31, 2000(1) ----------------------------- ------------------------------- Shares Amount Shares Amount - --------------------------------------------------------------------------------------------------------------------- Non-Service shares Sold 71,467,613 $ 1,685,381,975 31,916,672 $1,031,681,412 Dividends and/or distributions reinvested 11,900,045 269,774,032 9,160,638 300,285,702 Redeemed (70,355,513) (1,657,596,176) (23,375,044) (738,720,497) ----------- --------------- ----------- -------------- Net increase (decrease) 13,012,145 $ 297,559,831 17,702,266 $ 593,246,617 =========== =============== =========== ============== Service shares Sold 1,048,232 $ 23,626,500 32,826 $ 997,223 Dividends and/or distributions reinvested 12,927 292,675 -- -- Redeemed (195,068) (4,239,001) (400) (11,875) ----------- --------------- ----------- -------------- Net increase (decrease) 866,091 $ 19,680,174 32,426 $ 985,348 =========== =============== =========== ==============
1. For the year ended December 31, 2000, for Non-Service shares and for the period from July 13, 2000 (inception of offering) to December 31, 2000, for Service shares. =============================================================================== 3. Purchases and Sales of Securities The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended December 31, 2001, were $847,378,666 and $718,833,619, respectively. As of December 31, 2001, unrealized appreciation (depreciation) based on cost of securities for federal income tax purposes of $1,857,100,659 was:
Gross unrealized appreciation $ 284,145,976 Gross unrealized depreciation (190,676,574) ------------- Net unrealized appreciation (depreciation) $ 93,469,402 =============
18 Oppenheimer Global Securities Fund/VA Notes to Financial Statements (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 year ended December 31, 2001, was an annualized rate of 0.64%. - ------------------------------------------------------------------------------- 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. Additionally, funds offered in variable annuity separate accounts are subject to minimum fees of $5,000 for assets of less than $10 million and $10,000 for assets of $10 million or more. The Fund is subject to the minimum fee in the event that the per-account fee does not equal or exceed the applicable minimum fee. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees to 0.25% per annum of funds offered in variable annuity separate accounts, effective January 1, 2001. This undertaking may be amended or withdrawn at any time. - ------------------------------------------------------------------------------- Distribution and Service Plan for Service Shares. The Fund has adopted a Distribution and Service Plan for Service shares to pay OppenheimerFunds Distributor, Inc., the Distributor, for distribution-related services for the Fund's Service shares. Although the plan allows for payment to be made quarterly at an annual rate of up to 0.25% of the average annual net assets of Service shares of the Fund, that rate is currently reduced to 0.15%. The Board of Trustees may increase that rate to no more than 0.25% per annum, without notification in advance. The Distributor currently uses all of those fees to compensate sponsor(s) of the insurance product that offers Fund shares, for providing personal service and maintenance of accounts of their variable contract owners that hold Service shares. The impact of the service plan is to increase operating expenses of the Service shares, which results in lower performance compared to the Fund's shares that are not subject to a service fee. =============================================================================== 5. 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. As of December 31, 2001, the Fund had outstanding foreign currency contracts as follows:
Expiration Contract Valuation as of Unrealized Contract Description Date Amount (000s) December 31, 2001 Appreciation - ----------------------------------------------------------------------------------------------------- Contracts to Purchase - --------------------- British Pound Sterling (GBP) 1/2/02 367 GBP $533,727 $2,934
Oppenheimer Global Securities Fund/VA 19 Independent Auditors' Report =============================================================================== The Board of Trustees and Shareholders of Oppenheimer Global Securities Fund/VA: We have audited the accompanying statement of assets and liabilities of Oppenheimer Global Securities Fund/VA (which is a series of Oppenheimer Variable Account Funds), including the statement of investments, as of December 31, 2001, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2001, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Global Securities Fund/VA results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Denver, Colorado January 23, 2002 20 Oppenheimer Global Securities Fund/VA Federal Income Tax Information (Unaudited) =============================================================================== In early 2002 shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2001. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends and distributions of $3.8108 and $3.8079 per share were paid to Non-Service and Service shareholders, respectively, on March 16, 2001, of which $2.6559 was designated as a "capital gain distribution" for federal income tax purposes. Whether received in stock or in cash, the capital gain distribution should be treated by shareholders as a gain from the sale of capital assets held for more than one year (long-term capital gains). Dividends paid by the Fund during the fiscal year ended December 31, 2001, which are not designated as capital gain distributions should be multiplied by 41.80% to arrive at the amount eligible for the corporate dividend-received deduction. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. Oppenheimer Global Securities Fund/VA 21 Officers and Trustees ==================================================================================================================================== Officers and Trustees James C. Swain, Trustee, CEO and Chairman of the Board John V. Murphy, President and Trustee 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 William L. Wilby, Vice President Robert G. Zack, Vice President and Secretary Brian W. Wixted, Treasurer Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer Katherine P. Feld, Assistant Secretary Kathleen T. Ives, Assistant Secretary Denis R. Molleur, Assistant Secretary ==================================================================================================================================== Name, Address,(1) Age, Position(s) Held with Fund and Length of Time Served(2) Principal Occupation(s) During Past Five Years and Other Directorships Held by Trustee - ------------------------------------------------------------------------------------------------------------------------------------ James C. Swain, Chairman, Formerly Vice Chairman of OppenheimerFunds, Inc. (the "Manager")(September 1988-January Chief Executive Officer and Trustee 2, 2002); President and a director of Centennial Asset Management Corporation, a wholly (since 1985). Age:68 owned subsidiary of the Manager and Chairman of the Board of Shareholder Services, Inc., a transfer agent subsidiary of the Manager. - ------------------------------------------------------------------------------------------------------------------------------------ John V. Murphy,(3) President and Trustee Chairman, Chief Executive Officer and Director (since June 30, 2001) and President (since 2001). Age:52 (since September 2000) of the Manager; President and a trustee of other Oppenheimer funds; President and a director (since July 2001) of Oppenheimer Acquisition Corp., the Manager's parent holding company, and of Oppenheimer Partnership Holdings, Inc., a holding company subsidiary of the Manager; Chairman and a director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial Services, Inc., transfer agent subsidiaries of the Manager; President and a director (since July 2001) of OppenheimerFunds Legacy Program, a charitable trust program established by the Manager; a director of the following investment advisory subsidiaries of the Manager: OAM Institutional, Inc. and Centennial Asset Management Corporation (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments Inc. (since July 2002); President (since November 2001) and a director (since July 2001) of Oppenheimer Real Asset Management, Inc., an investment advisor subsidiary of the Manager; a director (since November 2001) of Trinity Investment Management Corp. and Tremont Advisers, Inc., investment advisory affiliates of the Manager. Executive Vice President (since February 1997) of Massachusetts Mutual Life Insurance Company, the Manager's parent company; a director (since June 1995) of DBL Acquisition Corporation; formerly Chief Operating Officer (September 2000-June 2001) of the Manager; President and Trustee (November 1999-November 2001) of MML Series Investment Fund and MassMutual Institutional Funds, open-end investment companies; a director (September 1999-August 2000) of C. M. Life Insurance Company; President, Chief Executive Officer and Director (September 1999-August 2000) of MML Bay State Life Insurance Company; a director (June 1989-June 1998) of Emerald Isle Bancorp and Hibernia Savings Bank, wholly owned subsidiary of Emerald Isle Bancorp; Executive Vice President, Director and Chief Operating Officer (June 1995-January 1997) of David L. Babson & Co., Inc., an investment advisor; Chief Operating Officer (March 1993-December 1996) of Concert Capital Management, Inc., an investment advisor.
22 Oppenheimer Global Securities Fund/VA Officers and Trustees (Continued)
==================================================================================================================================== Name, Address,(1) Age, Position(s) Held with Fund and Length of Time Served(2) Principal Occupation(s) During Past Five Years and Other Directorships Held by Trustee - ------------------------------------------------------------------------------------------------------------------------------------ William L. Armstrong, Trustee Chairman of the following private mortgage banking companies: Cherry Creek Mortgage (since 1999). Age: 64 Company (since 1991), Centennial State Mortgage Company (since 1994), The El Paso Mortgage Company (since 1993), Transland Financial Services, Inc. (since 1997); Chairman of the following private companies: Great Frontier Insurance (insurance agency) (since 1995) and Ambassador Media Corporation (since 1984); Director of the following public companies: Storage Technology Corporation (computer equipment company) (since 1991), Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992), UNUMProvident (insurance company) (since 1991). Formerly Director of International Family Entertainment (television channel) (1992-1997) and Natec Resources, Inc. (air pollution control equipment and services company) (1991-1995), Frontier Real Estate, Inc. (residential real estate brokerage) (1994-1999), and Frontier Title (title insurance agency) (1995-June 1999); formerly U.S. Senator (January 1979-January 1991). - ------------------------------------------------------------------------------------------------------------------------------------ Robert G. Avis, Trustee Formerly (until February 2001) Director and President of A.G. Edwards Capital, Inc. (since 1993). Age: 70 (General Partner of private equity funds), formerly (until March 2000) Chairman, President and Chief Executive Officer of A.G. Edwards Capital, Inc.; formerly (until March 1999) Vice Chairman and Director of A.G. Edwards, Inc. and Vice Chairman of A.G. Edwards & Sons, Inc. (its brokerage company subsidiary); (until March 1999) Chairman of A.G. Edwards Trust Company and A.G.E. Asset Management (investment advisor); (until March 2000), a director of A.G. Edwards & Sons and A.G. Edwards Trust Company. - ------------------------------------------------------------------------------------------------------------------------------------ George C. Bowen, Formerly (until April 1999) Mr. Bowen held the following positions: Senior Vice Trustee (since 1998) President (from September 1987) and Treasurer (from March 1985) of the Manager; Vice Age: 65 President (from June 1983) and Treasurer (since March 1985) of OppenheimerFunds, Distributor, Inc., a subsidiary of the Manager and the Fund's Distributor; Senior Vice President (since February 1992), Treasurer (since July 1991) Assistant Secretary and a director (since December 1991) of Centennial Asset Management Corporation; Vice President (since October 1989) and Treasurer (since April 1986) of HarbourView Asset Management Corporation; President, Treasurer and a director of Centennial Capital Corporation (since June 1989); Vice President and Treasurer (since August 1978) and Secretary (since April 1981) of Shareholder Services, Inc.; Vice President, Treasurer and Secretary of Shareholder Financial Services, Inc. (since November 1989); Assistant Treasurer of Oppenheimer Acquisition Corp. (since March 1998); Treasurer of Oppenheimer Partnership Holdings, Inc. (since November 1989); Vice President and Treasurer of Oppenheimer Real Asset Management, Inc. (since July 1996); Treasurer of OppenheimerFunds International Ltd. and Oppenheimer Millennium Funds plc (since October 1997). - ------------------------------------------------------------------------------------------------------------------------------------ Edward L. Cameron, Formerly (1974-1999) a partner with PricewaterhouseCoopers LLP (an accounting firm) and Trustee (since 1999) Chairman, Price Waterhouse LLP Global Investment Management Industry Services Group Age: 63 (1994-1998). - ------------------------------------------------------------------------------------------------------------------------------------ Jon S. Fossel, Trustee (since 1990) Formerly (until October 1996) Chairman and a director of the Manager; President and a Age: 59 director of Oppenheimer Acquisition Corp., Shareholder Services, Inc. and Shareholder Financial Services, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Sam Freedman, Trustee (since 1996) Formerly (until October 1994) Chairman and Chief Executive Officer of OppenheimerFunds Age: 61 Services; Chairman, Chief Executive Officer and a director of Shareholder Services, Inc.; Chairman, Chief Executive Officer and director of Shareholder Financial Services, Inc.; Vice President and director of Oppenheimer Acquisition Corp. and a director of OppenheimerFunds, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ C. Howard Kast, Trustee (since 1988) Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm). Age: 80 - ------------------------------------------------------------------------------------------------------------------------------------ Robert M. Kirchner, Trustee President of The Kirchner Company (management consultants). (since 1985). Age: 80
Oppenheimer Global Securities Fund/VA 23 Officers and Trustees (Continued)
==================================================================================================================================== Name, Address,(1) Age, Position(s) Held with Fund and Length of Time Served(2) Principal Occupation(s) During Past Five Years and Other Directorships Held by Trustee - ------------------------------------------------------------------------------------------------------------------------------------ F. William Marshall, Jr., Trustee Formerly (until 1999) Chairman of SIS & Family Bank, F.S.B. (formerly SIS Bank); (since 2000). Age: 59 President, Chief Executive Officer and Director of SIS Bankcorp., Inc. and SIS Bank (formerly Springfield Institution for Savings) (1993-1999); Executive Vice President (until 1999) of Peoples Heritage Financial Group, Inc.; Chairman and Chief Executive Office of Bank of Ireland First Holdings, Inc. and First New Hampshire Banks (1990-1993); Trustee (since 1996) of MassMutual Institutional Funds and of MML Series Investment Fund (open-end investment companies). - ------------------------------------------------------------------------------------------------------------------------------------ Charles Albers, Vice President and Senior Vice President (since April 1998) of the Manager; a Certified Financial Analyst; Portfolio Manager of Oppenheimer an officer and portfolio manager of other Oppenheimer funds; formerly a vice president Main Street(R) Small Cap Fund/VA and portfolio manager for Guardian Investor Services, the investment management and Main Street(R) Growth & subsidiary of The Guardian Life Insurance Company (1972-April 1998). Income Fund/VA (since 1999). Age: 61 - ------------------------------------------------------------------------------------------------------------------------------------ Bruce L. Bartlett, Vice President and Senior Vice President (since January 1999) of the Manager; an officer and portfolio Portfolio Manager of Oppenheimer manager of other Oppenheimer funds;, prior to joining the Manager in April 1995, he was Aggressive Growth Fund/VA a vice president and senior portfolio manager at First of America Investment Corp. (since 1998). Age: 51 (September 1986-April 1995). - ------------------------------------------------------------------------------------------------------------------------------------ George Evans, Vice President and Vice President of the Manager (since October 1993) and of HarbourView Asset Management Portfolio Manager of Oppenheimer Corporation (since July 1994); an officer and portfolio manager of other Oppenheimer Multiple Strategies Fund/VA funds. (since 2001). Age: 42 - ------------------------------------------------------------------------------------------------------------------------------------ John S. Kowalik, Vice President and Senior Vice President of the Manager (since July 1998) and of HarbourView Asset Portfolio Manager of Oppenheimer Management Corporation (since April 2000); an officer and portfolio manager of other Bond Fund/VA Oppenheimer funds; formerly Managing Director and Senior Portfolio Manager at (since 1998). Age: 44 Prudential Global Advisors (June 1989-June 1998). - ------------------------------------------------------------------------------------------------------------------------------------ Michael Levine, Vice President and Vice President (since June 1998) of the Manager; an officer and portfolio manager of Portfolio Manager of Oppenheimer other Oppenheimer funds; formerly Assistant Vice President and Portfolio Manager of Multiple Strategies Fund/VA the Manager (April 1996-June 1998); prior to joining the Manager in June 1994, he (since 1998). Age: 36 was a portfolio manager and research associate for Amas Securities, Inc. (February 1990-February 1994). - ------------------------------------------------------------------------------------------------------------------------------------ Nikolaos Monoyios, Vice President and Vice President of the Manager (since April 1998); an officer and portfolio manager of Portfolio Manager of Oppenheimer other Oppenheimer funds; a Certified Financial Analyst; formerly a Vice President and Main Street(R) Growth & Income Fund/VA portfolio manager for Guardian Investor Services, the investment management subsidiary of (since 1999). Age: 52 The Guardian Life Insurance Company (1979-March 1998). - ------------------------------------------------------------------------------------------------------------------------------------ David P. Negri, Vice President Senior Vice President of the Manager (since May 1998) and of HarbourView Asset Management and Portfolio Manager of Corporation (since April 1999); an officer and portfolio manager of other Oppenheimer Oppenheimer Bond Fund/VA, funds; formerly Vice President of the Manager (July 1988-May 1998). High Income Fund/VA, Multiple Strategies Fund/VA and Strategic Bond Fund/VA (since 1990). Age: 47 - ------------------------------------------------------------------------------------------------------------------------------------ Jane Putnam, Vice President and Vice President of the Manager (since October 1995); an officer and portfolio manager Portfolio Manager of Oppenheimer of another Oppenheimer fund; before joining the Manager in May 1994, she was a Capital Appreciation Fund/VA portfolio manager and equity research analyst for Chemical Bank (June 1989-May 1994). (since 1994). Age: 40 - ------------------------------------------------------------------------------------------------------------------------------------ Thomas P. Reedy, Vice President and Vice President of the Manager (since June 1993) and of HarbourView Asset Management Portfolio Manager of Oppenheimer Corporation (since April 1999); an officer and portfolio manager of other Oppenheimer High Income Fund/VA funds. (since 1998). Age: 39 - ------------------------------------------------------------------------------------------------------------------------------------ Richard H. Rubinstein, Vice President Senior Vice President (since October 1995) of the Manager; an officer and portfolio and Portfolio Manager of Oppenheimer manager of another Oppenheimer fund; formerly a vice president of the Manager (June Multiple Strategies Fund/VA (since 1990-October 1995). 1991). Age: 53
24 Oppenheimer Global Securities Fund/VA Officers and Trustees (Continued)
==================================================================================================================================== Name, Address,(1) Age, Position(s) Held with Fund and Length of Time Served(2) Principal Occupation(s) During Past Five Years and Other Directorships Held by Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Arthur P. Steinmetz, Vice President Senior Vice President of the Manager (since March 1993) and of HarbourView Asset and Portfolio Manager of Oppenheimer Management Corporation (since March 2000); an officer and portfolio manager of Strategic Bond Fund/VA (since other Oppenheimer funds. 1993). Age: 43 - ------------------------------------------------------------------------------------------------------------------------------------ Susan Switzer, Vice President Vice President of the Manager (since December 2000); Assistant Vice President of the and Portfolio Manager of Manager (December 1997-December 2000). Prior to joining the Manager, she was a Oppenheimer Multiple Strategies portfolio manager at Neuberger Berman (November 1994-November 1997). Fund/VA (since 2001). Age: 35 - ------------------------------------------------------------------------------------------------------------------------------------ James F. Turner, II, Vice President Vice President and Portfolio Manager of the Manager since March 26, 2001; Portfolio and Portfolio Manager of Oppenheimer Manager for Technology Crossover Ventures (May 2000-March 2001); Assistant Vice President Aggressive Growth Fund/VA and Associate Portfolio Manager of the Manager (August 1999-May 2000); Securities Analyst (since 2001). Age: 34 for the Manager (October 1996-August 1999); and a securities analyst with First of America Investment Company (May 1994-October 1996). - ------------------------------------------------------------------------------------------------------------------------------------ Barry Weiss, Vice President Vice President of the Manager (since July 2001); an officer and portfolio manager of and Portfolio Manager of other Oppenheimer funds; formerly Assistant Vice President and Senior Credit Analyst of Oppenheimer Money Fund/VA the Manager (February 2000-June 2001). Prior to joining the Manager in February 2000, he (since 2001). Age: 37 was Associate Director, Structured Finance, Fitch IBCA Inc. (April 1998-February 2000); News Director, Fitch Investors Service (September 1996-April 1998); and Senior Budget Analyst, City of New York, Office of Management & Budget (February 1990-September 1996). - ------------------------------------------------------------------------------------------------------------------------------------ William L. Wilby, Vice President Senior Vice President of the Manager (since July 1994) and of HarbourView Asset and Portfolio Manager of Management Corporation (since May 1999); Senior Investment Officer, Director of Oppenheimer Global Securities International Equities (since May 2000) of the Manager; an officer and portfolio Fund/VA (since 1995). Age: 57 manager of another Oppenheimer fund; formerly Vice President of the Manager (October 1991-July 1994) and of HarbourView Asset Management Corporation (June 1992-May 1999). - ------------------------------------------------------------------------------------------------------------------------------------ Carol E. Wolf, Vice President and Senior Vice President of the Manager; an officer and portfolio manager of other Portfolio Manager of Oppenheimer Oppenheimer funds; formerly Vice President of the Manager (June 1990-June 2000). Money Fund/VA (since 1998). Age: 50 - ------------------------------------------------------------------------------------------------------------------------------------ Mark Zavanelli, Vice President and Assistant Vice President (since May 1998) of the Manager; a Chartered Financial Analyst; Portfolio Manager of Oppenheimer an officer and portfolio manager of other Oppenheimer funds. Prior to joining the Main Street Small Cap Fund/VA Manager in May 1998 he was President of Waterside Capital Management, a registered (since 2001). Age: 31 investment advisor (August 1995-April 1998) and a financial research analyst for Elder Research (June 1997-April 1998). - ------------------------------------------------------------------------------------------------------------------------------------ Robert G. Zack, Vice President and Senior Vice President (since May 1985) and Acting General Counsel (since November 2001) Secretary (since 2001). Age: 53 of the Manager; Assistant Secretary of Shareholder Services, Inc. (since May 1985), Shareholder Financial Services, Inc. (since November 1989); OppenheimerFunds International Ltd. and Oppenheimer Millennium Fund plc (since October 1997); an officer of other Oppenheimer funds. Formerly Associate General Counsel (May 1981-November 2001). - ------------------------------------------------------------------------------------------------------------------------------------ Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of the Manager; Treasurer (since Treasurer (since 1999). Age: 42 March 1999) of HarbourView Asset Management Corporation, Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation, Shareholder Financial Services, Inc. and Oppenheimer Partnership Holdings, Inc., of OFI Private Investments, Inc. (since March 2000) and of OppenheimerFunds International Ltd. and Oppenheimer Millennium Funds plc (since May 2000); Treasurer and Chief Financial Officer (since May 2000) of Oppenheimer Trust Company; Assistant Treasurer (since March 1999) of Oppenheimer Acquisition Corp.; an officer of other Oppenheimer funds; formerly Principal and Chief Operating Officer, Bankers Trust Company-Mutual Fund Services Division (March 1995-March 1999); Vice President and Chief Financial Officer of CS First Boston Investment Management Corp. (September 1991-March 1995). - ------------------------------------------------------------------------------------------------------------------------------------ Robert J. Bishop, Assistant Treasurer Vice President of the Manager/Mutual Fund Accounting (since May 1996); an officer of (since 1996). Age: 43 other Oppenheimer funds; formerly an assistant vice president of the Manager/Mutual Fund Accounting (April 1994-May 1996) and a fund controller of the Manager.
Oppenheimer Global Securities Fund/VA 25 Officers and Trustees (Continued)
==================================================================================================================================== Name, Address,(1) Age, Position(s) Held with Fund and Length of Time Served(2) Principal Occupation(s) During Past Five Years and Other Directorships Held by Trustee - ------------------------------------------------------------------------------------------------------------------------------------ Scott T. Farrar, Assistant Treasurer Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant (since 1996). Age: 36 Treasurer of Oppenheimer Millennium Funds plc (since October 1997); an officer of other Oppenheimer funds; formerly an assistant vice president of the Manager/Mutual Fund Accounting (April 1994-May 1996), and a fund controller of the Manager. - ------------------------------------------------------------------------------------------------------------------------------------ Katherine P. Feld, Assistant Vice President and Senior Counsel of the Manager (since July 1999); Vice President of Secretary (since 2001). Age: 43 OppenheimerFunds Distributor, Inc. (since June 1990); an officer of other Oppenheimer funds; formerly a vice president and associate counsel of the Manager (June 1990- July 1999). - ------------------------------------------------------------------------------------------------------------------------------------ Kathleen T. Ives, Assistant Vice President and Assistant Counsel of the Manager (since June 1998); an officer of Secretary (since 2001). Age: 36 other Oppenheimer funds; formerly an assistant vice president and assistant counsel of the Manager (August 1994-August 1997). - ------------------------------------------------------------------------------------------------------------------------------------ Denis R. Molleur, Assistant Vice President and Senior Counsel of the Manager (since July 1999); an officer of Secretary (since 2001). Age: 44 other Oppenheimer funds; formerly a vice president and associate counsel of the Manager (September 1991-July 1999).
The Fund's Statement of Additional Information contains additional information about the Fund's Trustees and is available without charge upon request. Each Trustee is a Trustee, Director or Managing General Partner of 41 other portfolios in the Oppenheimer Fund complex, except as follows: Messrs. Armstrong and Fossel (40 portfolios), Messrs. Bowen, Cameron and Marshall (36 portfolios), and Mr. Murphy (62 portfolios). 1. The address of each Trustee and Officer is 6803 S. Tucson Way, Englewood, CO 80112-3924, except as follows: the address for the following officers is 498 Seventh Avenue, New York, NY 10018: Messrs. Albers, Bartlett, Evans, Kowalik, Levine, Monoyios, Negri, Reedy, Rubinstein, Steinmetz, Turner, Wilby, Zavanelli, Molleur and Zack, and Mses. Switzer and Feld. 2. Each Trustee and Officer serves for an indefinite term, until his or her resignation, death or removal. 3. John V. Murphy is an "interested person" of the Fund (as defined in the Investment Company Act of 1940), by virtue of his positions as an officer and director of the Fund's Manager, and as a shareholder of its parent company. 26 Oppenheimer Global Securities Fund/VA (This Page Intentionally Left Blank) Oppenheimer Global Securities Fund/VA
A Series of Oppenheimer Variable Account Funds =================================================================================================================================== Investment Advisor OppenheimerFunds, Inc. =================================================================================================================================== Distributor OppenheimerFunds Distributor, 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. For more complete information about Oppenheimer Global Securities Fund/VA, please refer to the Prospectus. To obtain a copy, call your financial advisor, or call OppenheimerFunds, Inc. at 1.800.981.2871.
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