-----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, Sd/qsJ7z5LK8zuqhtOGBq3LAaO4HbCtdEk23sLtAKlGQ3CrKvE/PrA5IMoMvMqqj JtBcIgZurPPM+PuDypiRKA== 0001110538-02-000058.txt : 20020415 0001110538-02-000058.hdr.sgml : 20020415 ACCESSION NUMBER: 0001110538-02-000058 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: 02570151 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 opp220055.txt Annual Report December 31, 2001 - -------------------------------------------------------------------------------- Oppenheimer Strategic Bond Fund/VA A Series of Oppenheimer Variable Account Funds [logo]OppenheimerFunds(R) The Right Way to Invest Oppenheimer Variable Account Funds--Oppenheimer Strategic Bond Fund/VA =============================================================================== Objective Oppenheimer Strategic Bond Fund/VA, a series of Oppenheimer Variable Account Funds, primarily seeks a high level of current income principally derived from interest on debt securities. The Fund primarily invests in three sectors: foreign fixed income securities, U.S. Government securities and lower rated high yield domestic corporate bonds (commonly known as "junk bonds"). Investing in foreign securities entails additional expenses and risks including foreign currency fluctuations while investing in junk bonds carries a greater risk of default. =============================================================================== Narrative by Art Steinmetz, Co-portfolio Manager The Fund's performance during the fiscal year that ended December 31, 2001, reflected the volatile conditions in the world's fixed income markets. We attribute this, in part, to persistent economic weakness in U.S. and international markets, resulting in an investment environment that has been difficult for many of the high yielding, fixed income securities in which the Fund invests. However, we measure the Fund's success over full market cycles. That's because our investment approach is designed to capture compelling values in out-of-favor, income-oriented bonds and hold these securities with the expectation that they will come back into favor. While no one can accurately predict the timing of a turnaround, we are optimistic that one will occur, and that the Fund's performance should improve accordingly. In the meantime, the Fund generated an income stream that was generally greater than that of its peer group during the period. While U.S. Treasury and government agency securities performed well during the first half of the period in response to lower interest rates, the government agency market weakened during the second half of 2001. That's primarily because mortgage-backed securities issued by U.S. Government agencies were adversely affected by a steep increase in the amount of mortgage loan refinancings. In a lower interest rate environment, homeowners attempted to reduce their borrowing costs by prepaying their mortgages. As a result, prices of many existing mortgage-backed securities held by the Fund fell. High yield corporate bond prices were also adversely affected throughout the reporting period by the weakening economy and by the tragic terrorist attacks of September 11. These effects were especially severe among telecommunications companies, which represent one of the largest groups of issuers in the high yield market. On the other hand, investment-grade corporate bonds fared relatively well, benefiting from a "flight-to-quality" among investors unwilling to assume the risks of lower rated bonds in an uncertain economic environment. Finally, foreign bonds were hurt by slowing economies in Europe and other developed markets, and by isolated financial crises in certain emerging markets. For example, severe fiscal problems in Argentina during the second half of the period in 2001 caused the country's bond prices to fall sharply. While the Fund did not own material amounts of Argentine bonds, other countries in which the Fund also invests were affected by the difficulties in Argentina. As mentioned earlier, we attempted during the second half of the period to improve the Fund's overall credit quality in order to protect its share price from the full brunt of the bond market's short-term, cyclical problems. As part of that effort, we reduced the Fund's exposure to the emerging markets, including virtually eliminating our holdings of Argentine bonds. Instead, we focused on carefully selected markets in Asia, Eastern Europe, the Middle East and Africa. Our shift to a more defensive position also included reducing our holdings of high yield corporate bonds, especially within the telecommunications group. Although our holdings of bonds issued by wireless telecom companies performed better than the telecommunications sector overall, we sold many of those bonds to take advantage of more attractive opportunities in other areas, such as the basic materials group, financial services firms and gaming companies. 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 more or 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 Strategic Bond Fund/VA Oppenheimer Variable Account Funds--Oppenheimer Strategic Bond Fund/VA =============================================================================== In addition, we recently increased the Fund's holdings of mortgage-backed securities. In our view, investors' concerns about prepayment risk have been overstated, producing attractive values in high quality bonds. As prepayment concerns ease, we believe that these securities will command higher prices. The current economic downturn, while unsettling to many investors, has given us the opportunity to purchase high yielding bonds at what we think are bargain prices. Indeed, a look at past periods of economic weakness suggests that the bond market tends to "overshoot" when the news is bad and that it subsequently rebounds to more normal price levels as the economy recovers. While there is no guarantee that the market will repeat this pattern of behavior, we believe that it will. In our view, lower interest rates and the recent tax cuts should fuel a resurgence of economic growth and a recovery of the credit-sensitive bond market sectors in which the Fund invests. The tragic events of September 11 caused disruptions in the global bond markets that we believe are temporary. The Fed has injected considerable amounts of liquidity into the U.S. financial system in an effort to ensure the continued good health of the world's financial markets and to stimulate economic growth. The addition of liquidity caused short-term bond yields to fall and long-term yields to rise. This phenomenon, known as a steepening yield curve, has historically been a harbinger of greater economic growth. While the terrorist attacks may prolong the current period of economic weakness by a quarter or two, we do not believe that these events have eradicated chances for a recovery. Accordingly, we urge our shareholders to maintain a long-term perspective, just as we do, and to judge the Fund's performance over full market cycles. A long-term perspective is not just a basic principle of successful investing. It is central to what makes Oppenheimer Strategic Bond Fund/VA part of The Right Way to Invest. - ------------------------------------------------------------------------------- Management's discussion of performance. During the fiscal year that ended December 31, 2001, Oppenheimer Strategic Bond Fund/VA's performance was strongly influenced by worsening economic conditions in the U.S. and countries around the world, including the effects of the September 11 terrorist attacks on the World Trade Center and the Pentagon. The economic slowdown and lower corporate earnings especially affected the U.S. high yield corporate bond market, where prices remained volatile. Weakening economies in developed markets and isolated financial crises in the emerging markets hurt international bonds. Prices of U.S. Government mortgage securities declined during the second half of the period in 2001 primarily because of rising prepayment risks in a lower interest rate environment. In this challenging investment climate, the portfolio managers attempted to establish a more defensive position for the Fund. - ------------------------------------------------------------------------------- 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 of the Fund held until December 31, 2001. In the case of Non-Service shares, performance is measured since inception of the class on 5/3/93. In the case of Service shares, performance is measured from inception of the class on 3/19/01. 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 both Lehman Brothers Aggregate Bond Index and Salomon Brothers World Government Bond Index. The Lehman Brothers Aggregate Bond Index is a broad-based, unmanaged index of U.S. corporate bond issues, U.S. Government securities and mortgage-backed securities, widely recognized as a measure of the performance of the domestic debt securities market. The Salomon Brothers World Government Bond Index is an unmanaged index of fixed rate bonds having a maturity of one year or more, and is widely recognized as a benchmark of fixed income performance on a worldwide basis. 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 indices and may include below-investment-grade obligations, which carry a greater risk of default. Oppenheimer Strategic Bond Fund/VA 3 Oppenheimer Variable Account Funds--Oppenheimer Strategic Bond Fund/VA Non-Service Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: [line chart]
OVAF/Oppenheimer Lehman Salomon Strategic Brothers Brothers Bond Fund/VA Aggregate World Government Non-Service Shares Bond Index Bond Index 05/03/93 10000 10000 10000 06/30/93 10020 10194 10079 09/30/93 10120 10460 10535 12/31/93 10425 10466 10530 03/31/94 10040 10166 10531 06/30/94 10070 10062 10601 09/30/94 10215 10123 10726 12/31/94 10032 10161 10777 03/31/95 10207 10674 11955 06/30/95 10809 11324 12593 09/30/95 11105 11546 12461 12/31/95 11569 12038 12829 03/31/96 11758 11825 12588 06/30/96 12048 11892 12640 09/30/96 12516 12112 12984 12/31/96 12966 12475 13293 03/31/97 12960 12406 12744 06/30/97 13480 12861 13130 09/30/97 13932 13289 13297 12/31/97 14095 13680 13324 03/31/98 14446 13893 13429 06/30/98 14560 14217 13696 09/30/98 14248 14818 14837 12/31/98 14503 14868 15364 03/31/99 14523 14794 14771 06/30/99 14523 14664 14262 09/30/99 14553 14764 14908 12/31/99 14913 14746 14708 03/31/00 15077 15071 14734 06/30/00 15175 15334 14712 09/30/00 15338 15796 14326 12/31/00 15306 16460 14942 03/31/01 15616 16960 14487 06/30/01 15492 17056 14260 09/30/01 15387 17842 15281 12/31/01 16047 17850 14794
[end line chart] Average Annual Total Return of Non-Service shares of the Fund at 12/31/01 1-Year 4.85% 5-Year 4.36% Since Inception 5.61% Service Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: [line chart]
OVAF/Oppenheimer Lehman Salomon Strategic Brothers Brothers Bond Fund/VA Aggregate World Government Service Shares Bond Index Bond Index 03/19/01 10000 10000 10000 03/31/01 9914 10000 10000 06/30/01 9871 10056 9843 09/30/01 9784 10520 10548 12/31/01 10194 10525 10212
[end line chart] Cumulative Total Return of Service shares of the Fund at 12/31/01 Since Inception 1.94% 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 5/3/93 for the Non-Service shares and 3/19/01 for its Service class. The performance information in the graphs for both indices begins on 4/30/93 in the first graph and on 3/31/01 for the second graph. Total returns include changes in net asset value per share and do 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. Graphs are not drawn to same scale. Total returns and the ending account value in the graph show change in share value and include reinvestment of all dividends and capital gains distributions. An explanation of the calculation of the performance is in the Statement of Additional Information. 4 Oppenheimer Strategic Bond Fund/VA Statement of Investments December 31, 2001
Principal Market Value Amount See Note 1 ============================================================================================================= Asset-Backed Securities--3.1% - ------------------------------------------------------------------------------------------------------------- American Money Management Corp., Commercial Debt Obligations Sub. Bonds, Series I, Cl. D1, 13.602%, 1/15/12(1) $ 200,000 $ 200,000 - ------------------------------------------------------------------------------------------------------------- Conseco Finance, Home Equity Loan Pass-Through Certificates, Series 2001-D, Cl. M2, 3.83%, 11/15/32(2) 3,000,000 2,962,500 - ------------------------------------------------------------------------------------------------------------- Embarcadero Aircraft Securitization Trust, Airplane Collateral Obligations, Series 2000-A, Cl. B, 3%, 8/15/25(1)(2) 1,829,916 1,426,763 - ------------------------------------------------------------------------------------------------------------- Impac Secured Assets CMN Owner Trust, Home Equity Collateralized Mtg. Obligations, Series 2001-5, Cl. M1, 7.25%, 8/25/31 2,197,000 2,184,235 - ------------------------------------------------------------------------------------------------------------- LBFTC I, Home Equity Collateralized Mtg. Obligations, Series 2000-1A, Cl. D, 10%, 2/25/30(3) 19,597 19,273 - ------------------------------------------------------------------------------------------------------------- Lehman ABS Manufactured Housing Contract, Commercial Mtg. Pass-Through Certificates, Series 2001-B, Cl. A4, 5.27%, 9/15/18 3,000,000 2,950,312 - ------------------------------------------------------------------------------------------------------------- NC Finance Trust, Collateralized Mtg. Obligations, Series 1999-I, Cl. ECFD, 8.75%, 12/25/28 108,203 99,649 - ------------------------------------------------------------------------------------------------------------- Option One Mortgage Securities Corp., Home Equity Collateralized Mtg. Obligations, Series 1999-1, Cl. CTFS, 10.06%, 3/26/29(1) 140,582 133,444 - ------------------------------------------------------------------------------------------------------------- Principal Residential Mortgage Capital Resources Trust, Real Estate Mtg. Investment Conduit Participation Certificates, Series 2000-1, Cl. B, 3.752%, 6/20/05(1)(2) 1,000,000 993,438 ------------ Total Asset-Backed Securities (Cost $11,481,576) 10,969,614 ============================================================================================================= Mortgage-Backed Obligations--51.9% - ------------------------------------------------------------------------------------------------------------- Government Agency--41.8% - ------------------------------------------------------------------------------------------------------------- FHLMC/FNMA/Sponsored--35.7% Federal Home Loan Mortgage Corp., 11%, 11/1/14 295,364 329,480 - ------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Gtd. Multiclass Mtg. Participation Certificates, Series 151, Cl. F, 9%, 5/15/21 454,261 479,245 - ------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Series 192, Cl. IO, 11.369%, 2/1/28(4) 11,981,116 2,817,434 Series 194, Cl. IO, 3.585%, 4/1/28(4) 35,575,073 8,771,479 Series 208, Cl. IO, 13.349%, 6/1/30(4) 12,485,143 2,692,109 - ------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: 6%, 2/25/30(5) 19,500,000 19,067,295 6.50%, 1/25/28(5) 83,900,000 83,900,000 6.50%, 5/1/29 1,210,338 1,214,139 7.50%, 8/1/25 233,022 242,066 - ------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust 1993-202, Cl. PH, 6.50%, 2/25/22(6) 4,500,000 4,678,560 - ------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Interest-Only Stripped Mtg.-Backed Security, Trust 294, Cl.2,(1.026)%, 2/1/28(4) 1,513,361 343,107 - ------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust 1999-29, Cl. D, 6.50%, 12/25/26 855,761 875,282 ------------ 125,410,196
Oppenheimer Strategic Bond Fund/VA 5 Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - -------------------------------------------------------------------------------------------------------------- GNMA/Guaranteed--6.1% Government National Mortgage Assn.: 7%, 3/15/28-7/15/28 $9,396,261 $ 9,619,425 7.50%, 2/15/27 1,376,856 1,429,631 7.625%, 11/20/25 76,203 78,371 8%, 11/15/25-5/15/26 1,361,978 1,435,580 - -------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn., Gtd. Multiclass Mtg Participation Certificates, Series 1999-27, Cl. PQ, 7.50%, 8/16/28 8,220,125 8,756,981 ----------- 21,319,988 - -------------------------------------------------------------------------------------------------------------- Private--10.1% - -------------------------------------------------------------------------------------------------------------- Commercial--6.1% AMRESCO Commercial Mortgage Funding I Corp., Multiclass Mtg. Pass-Through Certificates, Series 1997-C1, Cl. G, 7%, 6/17/29(1) 100,000 88,899 - -------------------------------------------------------------------------------------------------------------- Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates: Series 1996-MD6, Cl. A7, 7.69%, 11/13/26(2) 2,000,000 1,820,625 Series 1997-D4, Cl. B1, 7.525%, 4/14/29(2) 375,000 303,691 Series 1997-D5, Cl. B1, 6.93%, 2/14/41 300,000 163,500 Series 1997-D5, Cl. B2, 6.93%, 2/14/41 1,250,000 550,488 - -------------------------------------------------------------------------------------------------------------- FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1994-C1, Cl.2G, 8.70%, 9/25/25(1) 153,594 153,114 - -------------------------------------------------------------------------------------------------------------- First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates: Series 1997-CHL1, Cl. D,8.111%, 5/25/08(1)(2) 350,000 320,141 Series 1997-CHL1, Cl. E,8.111%, 2/25/11(1)(2) 600,000 466,500 - -------------------------------------------------------------------------------------------------------------- First Union-Lehman Brothers Commercial Mortgage Trust, Commercial Mtg. Pass-Through Certificates, Series 1997-C2, Cl. F, 7.50%, 9/18/15 225,000 180,668 - -------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., Collateralized Mtg. Obligations, Series 1998-C1, Cl. E, 7.096%, 3/15/11(2) 800,000 794,000 - -------------------------------------------------------------------------------------------------------------- GMAC Commercial Mortgage Securities, Inc., Interest-Only Stripped Mtg.-Backed Security Pass-Through Certificates, Series 1997-C1, Cl. X, 8.292%, 7/15/27(4) 3,613,318 243,052 - -------------------------------------------------------------------------------------------------------------- GMAC Commercial Mortgage Securities, Inc., Mtg. Pass-Through Certificates: Series 1997-C1, Cl. G, 7.414%, 11/15/11 440,000 347,119 Series 1997-C2, Cl. F, 6.75%, 4/16/29 250,000 143,662 - -------------------------------------------------------------------------------------------------------------- Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates, Series 1995-C2, Cl. D, 7.603%, 6/15/21(2) 245,873 256,969 - -------------------------------------------------------------------------------------------------------------- Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates: Series 1996-C1, Cl. E, 7.377%, 3/15/06(1)(2) 553,342 526,722 Series 1996-C1, Cl. F, 7.377%, 2/15/28(2)(3) 162,744 129,831 Series 1997-HF1, Cl. F, 6.86%, 2/15/10(3) 150,000 132,281 Series 1997-RR, Cl. D, 7.751%, 4/30/39(2)(3) 450,024 389,302 Series 1997-RR, Cl. E, 7.751%, 4/30/39(2)(3) 300,016 219,620 Series 1997-RR, Cl. F, 7.751%, 4/30/39(2)(3) 600,032 367,841 Series 1997-XL1, Cl. G, 7.695%, 10/3/30(3) 390,000 349,030 Series 1998-HF1, Cl. F, 7.18%, 12/15/09(3) 1,500,000 1,335,858 - -------------------------------------------------------------------------------------------------------------- Mortgage Capital Funding, Inc., Commercial Mtg. Pass-Through Certificates: Series 1996-MC2, Cl. F, 5.75%, 12/21/26 4,350,000 3,673,031 Series 1997-MC1, Cl. F, 7.452%, 5/20/07(3) 63,720 56,153 - -------------------------------------------------------------------------------------------------------------- Mortgage Capital Funding, Inc., Multifamily Mtg. Pass-Through Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06(3) 1,800,000 1,633,043
6 Oppenheimer Strategic Bond Fund/VA Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - -------------------------------------------------------------------------------------------------------------- Commercial (continued) Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through Certificates, Series PRU-HTG 2000-C1, Cl. A2,7.306%, 10/6/15 $4,000,000 $ 4,311,250 - -------------------------------------------------------------------------------------------------------------- Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates: Series 1994-C2, Cl. E, 8%, 4/25/25(1) 306,776 306,729 Series 1995-C1, Cl. F, 6.90%, 2/25/27 50,463 49,997 - -------------------------------------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Inc., Commercial Mtg. Pass-Through Certificates, Series 1996-C1, Cl. F, 8.877%, 1/20/28(2) 1,000,000 814,688 - -------------------------------------------------------------------------------------------------------------- Strategic Hotel Capital, Inc., Commercial Mtg. Obligations, Series 2001-SCH1, Cl. E, 4.096%, 4/17/06(1)(2) 1,496,869 1,409,864 - -------------------------------------------------------------------------------------------------------------- Structured Asset Securities Corp., Multiclass Pass-Through Certificates, Series 1995-C4, Cl. E, 8.994%, 6/25/26(1)(2) 100,078 100,704 ------------ 21,638,372 - -------------------------------------------------------------------------------------------------------------- Residential--4.0% Lehman Structured Securities Corp., Collateralized Mtg. Obligations, Series 2001-GE4, Cl. A, 6%, 10/25/30 1,911,932 1,845,015 - -------------------------------------------------------------------------------------------------------------- Norwest Asset Securities Corp., Collateralized Mtg. Obligations, Mtg. Pass-Through Certificates, Series 1999-20, Cl. A13, 6.75%, 8/25/29 6,000,000 6,129,360 - -------------------------------------------------------------------------------------------------------------- Salomon Brothers Mortgage Securities VII, Inc., Commercial Mtg. Pass-Through Certificates, Series 1996-B, Cl.1, 7.11%, 4/25/26(1)(2) 337,747 241,490 - -------------------------------------------------------------------------------------------------------------- Structured Asset Securities Corp., Collateralized Mtg. Obligations, Series 2001-1, Cl. A, 7.50%, 7/25/30(1) 803,743 799,725 - -------------------------------------------------------------------------------------------------------------- Washington Mutual Mortgage Loan Trust, Commercial Mtg. Obligations, Series 2001-S9, Cl. A12, 6.75%, 9/25/31 4,952,698 5,022,346 ------------ 14,037,936 ------------ Total Mortgage-Backed Obligations (Cost $183,372,120) 182,406,492 ============================================================================================================== U.S. Government Obligations--1.0% - -------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds: 5.375%, 2/15/31 790,000 779,138 8.875%, 2/15/19 735,000 986,278 11.875%, 11/15/03(7) 500,000 580,469 - -------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts.: 6.50%, 2/15/10 650,000 714,290 6.75%, 5/15/05 300,000 326,274 ------------ Total U.S. Government Obligations (Cost $3,259,131) 3,386,449 ============================================================================================================== Foreign Government Obligations--23.4% - -------------------------------------------------------------------------------------------------------------- Argentina--0.6% Argentina (Republic of) Bonds: 11.375%, 3/15/10 1,065,000 271,575 11.75%, 6/15/15 2,095,000 549,937 Series 2008, 7%, 12/19/08 310,000 84,475 Series 2018, 12.25%, 6/19/18 1,698,000 411,765 - -------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Par Bonds, 6%, 3/31/23(2) 940,000 405,375 - -------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Unsec. Bonds, 12.375%, 2/21/12 360,000 90,900 - -------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Unsec. Unsub. Nts., 11.75%, 4/7/09 845,000 221,812 - -------------------------------------------------------------------------------------------------------------- Argentina (Republic of) Unsub. Bonds, Series 2031, 2.64%, 6/19/31 434,600 96,698 - -------------------------------------------------------------------------------------------------------------- Buenos Aires (Province of) Bonds, Bonos de Consolidacion de Deudas, Series PBA1, 2.629%, 4/1/07(1)(2)(ARP) 141,569 30,882 ------------ 2,163,419
Oppenheimer Strategic Bond Fund/VA 7 Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - ----------------------------------------------------------------------------------------------------------------- Austria--0.7% Austria (Republic of) Bonds, Series 99 4, 5.50%, 1/15/10(EUR) 2,780,000 $ 2,539,286 - ----------------------------------------------------------------------------------------------------------------- Belgium--0.8% Belgium (Kingdom of) Bonds, Series 35, 5.75%, 9/28/10(EUR) 2,910,000 2,711,289 - ----------------------------------------------------------------------------------------------------------------- Brazil--6.6% Brazil (Federal Republic of) Bonds: 8.875%, 4/15/24 4,536,000 3,027,780 12.25%, 3/6/30 2,725,000 2,354,400 Series 15 yr., 3.25%, 4/15/09(2) 494,117 395,294 Series RG, 3.25%, 4/15/09(2) 445,588 356,471 - ----------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Debt Capitalization Bonds, Series 20 yr., 8%, 4/15/14(10) 14,407,497 11,129,791 - ----------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Debt Conversion Bonds: Series 18 yr., 3.25%, 4/15/12(2) 730,000 516,475 Series D, 3.25%, 4/15/12(2) 555,000 392,663 - ----------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Eligible Interest Bonds, 3.188%, 4/15/06(2) 806,400 707,616 - ----------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Gtd. Disc. Bonds, 3.188%, 4/15/24(2) 1,405,000 1,022,138 - ----------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Unsec. Unsub. Bonds: 11%, 8/17/40 1,820,000 1,405,950 11.25%, 7/26/07 1,295,000 1,230,250 - ----------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Unsub. Bonds, 14.50%, 10/15/09 690,000 739,335 ----------- 23,278,163 - ----------------------------------------------------------------------------------------------------------------- Canada--0.4% Canada (Government of) Bonds, 5.50%, 6/1/09(CAD) 1,540,000 984,122 - ----------------------------------------------------------------------------------------------------------------- Canada (Government of) Nts., 0.70%, 3/20/06(JPY) 7,000,000 54,217 - ----------------------------------------------------------------------------------------------------------------- Ontario (Province of) Unsec. Unsub. Nts., 1.875%, 1/25/10(JPY) 36,000,000 288,711 ----------- 1,327,050 - ----------------------------------------------------------------------------------------------------------------- Colombia--0.3% Colombia (Republic of) Unsec. Unsub. Bonds: 8.375%, 2/15/27 240,000 173,400 11.75%, 2/25/20 210,000 209,475 - ----------------------------------------------------------------------------------------------------------------- Colombia (Republic of) Unsec. Unsub. Nts., 11.375%, 1/31/08(EUR) 570,000 519,582 ----------- 902,457 - ----------------------------------------------------------------------------------------------------------------- Dominican Republic--0.3% Dominican Republic Unsec. Unsub. Bonds: 9.50%, 9/27/06(3) 645,000 659,512 9.50%, 9/27/06 350,000 357,875 ----------- 1,017,387 - ----------------------------------------------------------------------------------------------------------------- Ecuador--0.3% Ecuador (Republic of) Unsec. Bonds, 5%, 8/15/30(2) 2,040,000 981,240 - ----------------------------------------------------------------------------------------------------------------- Finland--0.7% Finland (Republic of) Bonds, 7.25%, 4/18/06(EUR) 2,600,000 2,558,374 - ----------------------------------------------------------------------------------------------------------------- France--1.9% France (Government of) Bonds, Obligations Assimilables du Tresor, 5.50%, 10/25/10(EUR) 7,370,000 6,778,802 - ----------------------------------------------------------------------------------------------------------------- Germany--0.2% Germany (Republic of) Bonds: 5.25%, 7/4/10(EUR) 20,000 18,202 Series 98, 5.25%, 1/4/08(EUR) 920,000 847,347 ----------- 865,549
8 Oppenheimer Strategic Bond Fund/VA Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - ------------------------------------------------------------------------------------------------------------------ Great Britain--0.4% United Kingdom Treasury Bonds, 7.75%, 9/8/06(GBP) 275,000 $ 444,421 - ------------------------------------------------------------------------------------------------------------------ United Kingdom Treasury Nts., 8%, 12/7/15(GBP) 415,000 781,927 ----------- 1,226,348 - ------------------------------------------------------------------------------------------------------------------ Guatemala--0.2% Guatemala (Republic of) Nts., 10.25%, 11/8/11(3) 775,000 819,562 - ------------------------------------------------------------------------------------------------------------------ Hungary--0.7% Hungary (Government of) Bonds: Series 04/J, 8.50%, 10/12/04(HUF) 305,340,000 1,122,842 Series 05/E, 9.25%, 5/12/05(HUF) 57,130,000 216,501 Series 06/E, 8.50%, 5/12/06(HUF) 318,870,000 1,200,025 ----------- 2,539,368 - ------------------------------------------------------------------------------------------------------------------ Italy--0.1% Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali, 4.25%, 11/1/09(EUR) 305,000 259,025 - ------------------------------------------------------------------------------------------------------------------ Ivory Coast-0.0% Ivory Coast (Government of) Past Due Interest Bonds, Series F, 3/29/18(8)(9)(FRF) 2,892,750 62,090 - ------------------------------------------------------------------------------------------------------------------ Mexico--1.2% United Mexican States Bonds: 5.01%, 12/31/19(DEM) 1,200,000 469,822 11.50%, 5/15/26 475,000 606,338 Series MTN, 8.30%, 8/15/31 3,315,000 3,265,275 - ------------------------------------------------------------------------------------------------------------------ United Mexican States Collateralized Fixed Rate Par Bonds, Series B, 6.25%, 12/31/19 20,000 18,525 ----------- 4,359,960 - ------------------------------------------------------------------------------------------------------------------ Peru--0.4% Peru (Republic of) Sr. Nts., Zero Coupon, 4.53%, 2/28/16(11) 2,756,000 1,482,453 - ------------------------------------------------------------------------------------------------------------------ Philippines--1.0% Philippines (Republic of) Nts.: 9.875%, 3/16/10 930,000 964,875 10.625%, 3/16/25 1,210,000 1,188,825 - ------------------------------------------------------------------------------------------------------------------ Philippines (Republic of) Unsec. Bonds, 9.875%, 1/15/19 815,000 777,306 - ------------------------------------------------------------------------------------------------------------------ Philippines (Republic of) Unsec. Unsub. Bonds, 9.375%, 12/7/06(1)(EUR) 470,000 428,950 ----------- 3,359,956 - ------------------------------------------------------------------------------------------------------------------ Poland--0.8% Poland (Republic of) Bonds, Series 0506, 8.50%, 5/12/06(PLZ) 10,830,000 2,636,117 - ------------------------------------------------------------------------------------------------------------------ Portugal--0.1% Portugal (Republic of) Obrig Do Tes Medio Prazo Unsec. Unsub. Bonds, 5.85%, 5/20/10(EUR) 350,000 326,942 - ------------------------------------------------------------------------------------------------------------------ Russia--4.0% Russian Federation Unsec. Unsub. Nts.: 8.25%, 3/31/10(10) 417,366 364,152 10%, 6/26/07(10) 2,395,000 2,371,050 - ------------------------------------------------------------------------------------------------------------------ Russian Federation Unsub. Bonds, 8.25%, 3/31/10(10) 1,835,000 1,601,038 - ------------------------------------------------------------------------------------------------------------------ Russian Federation Unsub. Nts., 5%, 3/31/30(2)(10) 15,321,875 8,905,840 - ------------------------------------------------------------------------------------------------------------------ Russian Ministry of Finance Unsec. Debs., Series IV, 3%, 5/14/03 765,000 693,521 ----------- 13,935,601
Oppenheimer Strategic Bond Fund/VA 9 Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - -------------------------------------------------------------------------------------------------------------- Spain--0.2% Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado, 5.40%, 7/30/11(EUR) 910,000 $ 823,544 - -------------------------------------------------------------------------------------------------------------- Sweden--0.1% Sweden (Kingdom of) Bonds, Series 1037, 8%, 8/15/07(SEK) 2,630,000 286,199 - -------------------------------------------------------------------------------------------------------------- The Netherlands--0.4% Netherlands (Government of The) Bonds, 5.50%, 7/15/10(EUR) 1,610,000 1,481,568 - -------------------------------------------------------------------------------------------------------------- Turkey--0.2% Turkey (Republic of) Bonds, 11.75%, 6/15/10(10) 260,000 255,450 - -------------------------------------------------------------------------------------------------------------- Turkey (Republic of) Sr. Unsec. Unsub. Nts., 11.875%, 1/15/30(10) 295,000 285,413 - -------------------------------------------------------------------------------------------------------------- Turkey (Republic of) Sr. Unsub. Bonds, 12.375%, 6/15/09 230,000 232,875 ----------- 773,738 - -------------------------------------------------------------------------------------------------------------- Ukraine--0.4% Ukraine (Republic of) Sr. Unsec. Nts., 11%, 3/15/07 1,485,200 1,419,109 - -------------------------------------------------------------------------------------------------------------- Venezuela--0.4% Venezuela (Republic of) Bonds, 9.25%, 9/15/27 1,305,000 825,413 - -------------------------------------------------------------------------------------------------------------- Venezuela (Republic of) Debs., Series DL, 2.875%, 12/18/07(2) 869,751 632,744 ----------- 1,458,157 ----------- Total Foreign Government Obligations (Cost $77,982,060) 82,372,753 ============================================================================================================== Loan Participations--0.3% - -------------------------------------------------------------------------------------------------------------- Algeria (Republic of) Trust III Nts., Tranche 3, 0.938%, 3/4/10(1)(2)(JPY) 26,651,526 159,760 - -------------------------------------------------------------------------------------------------------------- Morocco (Kingdom of) Loan Participation Agreement, Tranche A, 2.781%, 1/1/09(1)(2) 285,535 254,127 - -------------------------------------------------------------------------------------------------------------- PT Bank Ekspor Impor Indonesia Nts., Series 4 yr., 7.031%, 8/28/02(1)(2) 300,000 291,750 - -------------------------------------------------------------------------------------------------------------- Shoshone Partners Loan Trust Sr. Nts., 4.03%, 4/28/02 (representing a basket of reference loans and a total return swap between Chase Manhattan Bank and the Trust)(1)(2) 750,000 331,302 ----------- Total Loan Participations (Cost $1,468,961) 1,036,939 ============================================================================================================== Corporate Bonds and Notes--36.5% - -------------------------------------------------------------------------------------------------------------- Aerospace/Defense--0.3% Alliant Techsystems, Inc., 8.50% Sr. Unsec. Sub. Nts., 5/15/11 300,000 313,500 - -------------------------------------------------------------------------------------------------------------- BE Aerospace, Inc., 8.875% Sr. Unsec. Sub. Nts., 5/1/11 400,000 342,000 - -------------------------------------------------------------------------------------------------------------- Fairchild Corp., 10.75% Sr. Unsec. Sub. Nts., 4/15/09 550,000 189,750 - -------------------------------------------------------------------------------------------------------------- SC International Services, Inc., 9.25% Sr. Sub. Nts., Series B, 9/1/07 200,000 140,000 ----------- 985,250 - -------------------------------------------------------------------------------------------------------------- Chemicals--0.9% Compass Minerals Group, Inc., 10% Sr. Sub. Nts., 8/15/11(3) 250,000 260,625 - -------------------------------------------------------------------------------------------------------------- Huntsman Corp./ICI Chemical Co. plc: 10.125% Sr. Unsec. Sub. Nts., 7/1/09 400,000 386,000 10.125% Sr. Unsec. Sub. Nts., 7/1/09(EUR) 300,000 235,733 Zero Coupon Sr. Unsec. Disc. Nts., 13.09%, 12/31/09(11) 750,000 191,250 - -------------------------------------------------------------------------------------------------------------- ISP Holdings, Inc., 10.625% Bonds, 12/15/09(3) 200,000 201,000 - -------------------------------------------------------------------------------------------------------------- Lyondell Chemical Co.: 9.50% Sec. Nts., 12/15/08(3) 300,000 298,500 9.625% Sr. Sec. Nts., Series A, 5/1/07 400,000 405,000 10.875% Sr. Sub. Nts., 5/1/09(6) 300,000 278,250
10 Oppenheimer Strategic Bond Fund/VA Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - -------------------------------------------------------------------------------------------------------------- Chemicals (continued) NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 $111,000 $ 110,445 - -------------------------------------------------------------------------------------------------------------- OM Group, Inc., 9.25% Sr. Sub. Nts., 12/15/11(3) 200,000 205,000 - -------------------------------------------------------------------------------------------------------------- PCI Chemicals Canada, Inc., 9.25% Sec. Nts., 10/15/07(8)(9) 175,000 74,375 - -------------------------------------------------------------------------------------------------------------- Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07(8)(9) 250,000 71,562 - -------------------------------------------------------------------------------------------------------------- Polymer Group, Inc., 9% Sr. Unsec. Sub. Nts., Series B, 7/1/07(8) 500,000 147,500 - -------------------------------------------------------------------------------------------------------------- Sterling Chemicals, Inc.: 11.75% Sr. Unsec. Sub. Nts., 8/15/06(8) 540,000 40,500 12.375% Sr. Sec. Nts., Series B, 7/15/06(8) 500,000 417,500 ---------- 3,323,240 - -------------------------------------------------------------------------------------------------------------- Consumer Non-Durables--0.6% AKI Holdings Corp., 0%/13.50% Sr. Disc. Debs., 7/1/09(1)(12) 150,000 75,750 - -------------------------------------------------------------------------------------------------------------- AKI, Inc., 10.50% Sr. Unsec. Nts., 7/1/08 100,000 95,500 - -------------------------------------------------------------------------------------------------------------- Galey & Lord, Inc., 9.125% Sr. Unsec. Sub. Nts., 3/1/08 400,000 81,000 - -------------------------------------------------------------------------------------------------------------- Globe Manufacturing Corp., 10% Sr. Unsec. Sub. Nts., Series B, 8/1/08(1)(8)(9) 315,000 -- - -------------------------------------------------------------------------------------------------------------- Holmes Products Corp., 9.875% Sr. Unsec. Sub. Nts., Series B, 11/15/07(1) 200,000 69,500 - -------------------------------------------------------------------------------------------------------------- Phillips-Van Heusen Corp., 9.50% Sr. Unsec. Sub. Nts., 5/1/08(1) 200,000 205,000 - -------------------------------------------------------------------------------------------------------------- Playtex Products, Inc., 9.375% Sr. Unsec. Sub. Nts., 6/1/11 500,000 530,000 - -------------------------------------------------------------------------------------------------------------- Revlon Consumer Products Corp., 9% Sr. Nts., 11/1/06 800,000 552,000 - -------------------------------------------------------------------------------------------------------------- Salton, Inc., 10.75% Sr. Unsec. Sub. Nts., 12/15/05 425,000 418,625 - -------------------------------------------------------------------------------------------------------------- Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08(1)(8)(9) 70,000 -- ---------- 2,027,375 - -------------------------------------------------------------------------------------------------------------- Energy--2.5% AEI Resources, Inc., 11.50% Sr. Sub. Nts., 12/15/06(1)(8)(9) 250,000 28,750 - -------------------------------------------------------------------------------------------------------------- Chesapeake Energy Corp., 8.125% Sr. Unsec. Nts., 4/1/11 700,000 682,500 - -------------------------------------------------------------------------------------------------------------- Clark Refining & Marketing, Inc., 8.875% Sr. Sub. Nts., 11/15/07 200,000 163,000 - -------------------------------------------------------------------------------------------------------------- Denbury Management, Inc., 9% Sr. Sub. Nts., 3/1/08 400,000 377,000 - -------------------------------------------------------------------------------------------------------------- Dresser, Inc., 9.375% Sr. Sub. Nts., 4/15/11 400,000 410,000 - -------------------------------------------------------------------------------------------------------------- Frontier Oil Corp., 11.75% Sr. Nts., 11/15/09(1) 400,000 426,000 - -------------------------------------------------------------------------------------------------------------- Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/15/08(1) 560,000 394,800 - -------------------------------------------------------------------------------------------------------------- Hanover Equipment Trust, 8.50% Sr. Sec. Nts., Trust 2001, Cl. A, 9/1/08(3) 500,000 522,500 - -------------------------------------------------------------------------------------------------------------- Hornbeck-Leevac Marine Services, Inc., 10.625% Sr. Nts., 8/1/08(3) 750,000 765,000 - -------------------------------------------------------------------------------------------------------------- Leviathan Gas Pipeline Partners LP/Leviathan Finance Corp., 10.375% Sr. Unsec. Sub. Nts., Series B, 6/1/09 400,000 426,000 - -------------------------------------------------------------------------------------------------------------- Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08 700,000 612,500 - -------------------------------------------------------------------------------------------------------------- P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 403,000 434,232 - -------------------------------------------------------------------------------------------------------------- Petroleos Mexicanos, 9.50% Sr. Sub. Nts., 9/15/27 625,000 662,500 - -------------------------------------------------------------------------------------------------------------- Pogo Producing Co., 8.75% Sr. Sub. Nts., Series B, 5/15/07 370,000 380,175 - -------------------------------------------------------------------------------------------------------------- RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08 900,000 670,500 - -------------------------------------------------------------------------------------------------------------- SESI LLC, 8.875% Sr. Unsec. Nts., 5/15/11 500,000 472,500 - -------------------------------------------------------------------------------------------------------------- Statia Terminals International NV/Statia Terminals (Canada), Inc., 11.75% First Mtg. Nts., Series B, 11/15/03(1) 175,000 181,125 - -------------------------------------------------------------------------------------------------------------- Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 270,000 276,750 - -------------------------------------------------------------------------------------------------------------- Universal Compression Holdings, Inc., 0%/9.875% Sr. Disc. Nts., 2/15/08(12) 800,000 764,000 ---------- 8,649,832
Oppenheimer Strategic Bond Fund/VA 11 Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - ---------------------------------------------------------------------------------------------------------------- Financial--3.2% AmeriCredit Corp., 9.875% Gtd. Sr. Nts., 4/15/06 $ 600,000 $ 567,000 - ---------------------------------------------------------------------------------------------------------------- AMRESCO, Inc.: 9.875% Sr. Sub. Nts., Series 98-A, 3/15/05(8) 300,000 76,500 10% Sr. Sub. Nts., Series 97-A, 3/15/04(8) 100,000 25,500 - ---------------------------------------------------------------------------------------------------------------- Bank Plus Corp., 12% Sr. Nts., 7/18/07(1) 7,000 7,455 - ---------------------------------------------------------------------------------------------------------------- Conseco, Inc., 10.75% Sr. Unsec. Nts., 6/15/08 300,000 134,700 - ---------------------------------------------------------------------------------------------------------------- Development Bank of Japan (The), 1.75% Unsec. Nts., 6/21/10(JPY) 20,000,000 159,309 - ---------------------------------------------------------------------------------------------------------------- Finova Group, Inc. (The), 7.50% Nts., 11/15/09 500,000 212,500 - ---------------------------------------------------------------------------------------------------------------- Fuji JGB Investment LLC: 9.87% Non-Cum. Bonds, Series A, 12/31/49(2) 165,000 127,520 9.87% Non-Cum. Bonds, Series A, 12/31/49(2)(3) 1,325,000 1,024,028 - ---------------------------------------------------------------------------------------------------------------- Gold Eagle Capital Ltd., 7.981% Sec. Nts., 4/8/02(1)(2) 500,000 503,750 - ---------------------------------------------------------------------------------------------------------------- Hanvit Bank: 12.75% Unsec. Sub. Nts., 3/1/10(2)(3) 115,000 128,194 12.75% Unsec. Sub. Nts., 3/1/10(2) 710,000 791,458 - ---------------------------------------------------------------------------------------------------------------- IBJ Preferred Capital Co. (The) LLC: 8.79% Bonds, 12/29/49(2)(3) 1,725,000 1,262,643 8.79% Non-Cum. Bonds, Series A, 12/29/49(2) 105,000 76,857 - ---------------------------------------------------------------------------------------------------------------- IPC Acquisition Corp., 11.50% Sr. Sub. Nts., 12/15/09(3) 400,000 402,000 - ---------------------------------------------------------------------------------------------------------------- IStar Financial, Inc., 8.75% Sr. Unsec. Nts., 8/15/08 200,000 200,387 - ---------------------------------------------------------------------------------------------------------------- KFW International Finance, Inc., 1.75% Bonds, 3/23/10(JPY) 11,000,000 89,361 - ---------------------------------------------------------------------------------------------------------------- Korea Exchange Bank: 13.75% Unsec. Sub. Bonds, 6/30/10(2) 540,000 604,800 13.75% Unsec. Unsub. Bonds, 6/30/10(2)(3) 30,000 33,703 - ---------------------------------------------------------------------------------------------------------------- LaBranche & Co., Inc., 12% Sr. Unsec. Sub. Nts., 3/2/07 200,000 229,000 - ---------------------------------------------------------------------------------------------------------------- Local Financial Corp., 11% Sr. Nts., 9/8/04(1) 150,000 159,750 - ---------------------------------------------------------------------------------------------------------------- Ocwen Capital Trust I, 10.875% Capital Nts., 8/1/27(1) 150,000 120,750 - ---------------------------------------------------------------------------------------------------------------- Ocwen Financial Corp., 11.875% Nts., 10/1/03 150,000 148,500 - ---------------------------------------------------------------------------------------------------------------- Oesterreichische Kontrollbank AG, 1.80% Unsec. Nts., 3/22/10(JPY) 163,000,000 1,328,775 - ---------------------------------------------------------------------------------------------------------------- Ongko International Finance Co. BV, 10.50% Sec. Nts., 3/29/04(1)(8)(9) 90,000 2,250 - ---------------------------------------------------------------------------------------------------------------- Pemex Project Funding Master Trust, 9.125% Unsec. Unsub. Nts., 10/13/10 1,750,000 1,859,375 - ---------------------------------------------------------------------------------------------------------------- Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts., Series B, 4/1/08(1) 245,000 238,875 - ---------------------------------------------------------------------------------------------------------------- SBS Agro Finance BV, 10.25% Bonds, 7/21/00(1)(8)(9) 339,000 15,255 - ---------------------------------------------------------------------------------------------------------------- Tokai Preferred Capital Co. LLC, 9.98% Non-Cum. Bonds, Series A, 12/29/49(2)(3) 680,000 593,052 ----------- 11,123,247 - ---------------------------------------------------------------------------------------------------------------- Food & Drug--0.4% Family Restaurants, Inc., 9.75% Sr. Nts., 2/1/02(1)(8)(9) 500,000 22,500 - ---------------------------------------------------------------------------------------------------------------- Fleming Cos., Inc.: 10.125% Sr. Unsec. Nts., 4/1/08 400,000 406,000 10.625% Sr. Sub. Nts., 7/31/07 300,000 288,000 10.625% Sr. Sub. Nts., Series B, 7/31/07 500,000 480,000 - ---------------------------------------------------------------------------------------------------------------- Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 200,000 197,500 - ---------------------------------------------------------------------------------------------------------------- Shoppers Food Warehouse Corp., 9.75% Sr. Nts., 6/15/04 155,000 162,064 ----------- 1,556,064
12 Oppenheimer Strategic Bond Fund/VA Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - ------------------------------------------------------------------------------------------------------------------- Food/Tobacco--0.9% Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08 $ 300,000 $ 274,500 - ------------------------------------------------------------------------------------------------------------------- Del Monte Corp., 9.25% Sr. Unsec. Sub. Nts., 5/15/11 300,000 315,000 - ------------------------------------------------------------------------------------------------------------------- Doane Pet Care Co., 9.75% Sr. Unsec. Sub. Nts., 5/15/07(1) 400,000 330,000 - ------------------------------------------------------------------------------------------------------------------- Great Atlantic & Pacific Tea Co., Inc. (The), 9.125% Sr. Nts., 12/15/11 400,000 403,000 - ------------------------------------------------------------------------------------------------------------------- Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/1/05 200,000 145,000 - ------------------------------------------------------------------------------------------------------------------- Smithfield Foods, Inc., 7.625% Sr. Unsec. Sub. Nts., 2/15/08(1) 400,000 394,000 - ------------------------------------------------------------------------------------------------------------------- Sparkling Spring Water Group Ltd., 11.50% Sr. Sec. Sub. Nts., 11/15/07(1) 200,000 155,000 - ------------------------------------------------------------------------------------------------------------------- United Biscuits Finance plc, 10.75% Sr. Sub. Nts., 4/15/11(GBP) 400,000 652,019 - ------------------------------------------------------------------------------------------------------------------- Winn-Dixie Stores, Inc., 8.875% Sr. Nts., 4/1/08 400,000 384,000 ---------- 3,052,519 - ------------------------------------------------------------------------------------------------------------------- Forest Products/Containers--1.2% Ainsworth Lumber Co. Ltd., 12.50% Sr. Nts., 7/15/07(13) 400,000 398,000 - ------------------------------------------------------------------------------------------------------------------- Ball Corp.: 7.75% Sr. Unsec. Nts., 8/1/06(1) 125,000 133,750 8.25% Sr. Unsec. Sub. Nts., 8/1/08(1) 125,000 132,500 - ------------------------------------------------------------------------------------------------------------------- Consumers International, Inc., 10.25% Sr. Sec. Nts., 4/1/05(1)(8)(9) 250,000 96,250 - ------------------------------------------------------------------------------------------------------------------- Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04 900,000 166,500 - ------------------------------------------------------------------------------------------------------------------- Gaylord Container Corp., 9.75% Sr. Unsec. Nts., Series B, 6/15/07 600,000 510,000 - ------------------------------------------------------------------------------------------------------------------- Packaging Corp. of America, 9.625% Sr. Unsec. Sub. Nts., 4/1/09 750,000 825,000 - ------------------------------------------------------------------------------------------------------------------- Riverwood International Corp.: 10.625% Sr. Unsec. Nts., 8/1/07 750,000 791,250 10.875% Sr. Sub. Nts., 4/1/08 250,000 255,000 - ------------------------------------------------------------------------------------------------------------------- Stone Container Corp.: 9.25% Sr. Unsec. Nts., 2/1/08 200,000 212,000 9.75% Sr. Unsec. Nts., 2/1/11 400,000 427,000 - ------------------------------------------------------------------------------------------------------------------- U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07 300,000 202,500 ---------- 4,149,750 - ------------------------------------------------------------------------------------------------------------------- Gaming/Leisure--3.1% Aztar Corp., 9% Sr. Sub. Nts., 8/15/11(3) 850,000 879,750 - ------------------------------------------------------------------------------------------------------------------- Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 275,000 231,687 - ------------------------------------------------------------------------------------------------------------------- Felcor Lodging LP, 8.50% Sr. Nts., 6/1/11 406,000 391,790 - ------------------------------------------------------------------------------------------------------------------- Florida Panthers Holdings, Inc., 9.875% Sr. Sub. Nts., 4/15/09(1) 450,000 465,750 - ------------------------------------------------------------------------------------------------------------------- Hollywood Casino Corp., 11.25% Sr. Sec. Nts., 5/1/07 250,000 271,562 - ------------------------------------------------------------------------------------------------------------------- Hollywood Park, Inc., 9.25% Sr. Unsec. Sub. Nts., Series B, 2/15/07 325,000 282,750 - ------------------------------------------------------------------------------------------------------------------- Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 425,000 453,156 - ------------------------------------------------------------------------------------------------------------------- Host Marriott LP, 9.50% Sr. Nts., 1/15/07(3) 400,000 402,500 - ------------------------------------------------------------------------------------------------------------------- Intrawest Corp., 9.75% Sr. Nts., 8/15/08 350,000 343,000 - ------------------------------------------------------------------------------------------------------------------- Jupiters Ltd., 8.50% Sr. Unsec. Nts., 3/1/06 400,000 402,000 - ------------------------------------------------------------------------------------------------------------------- Mandalay Resort Group, 10.25% Sr. Unsec. Sub. Nts., Series B, 8/1/07 650,000 677,625 - ------------------------------------------------------------------------------------------------------------------- Meristar Hospitality Corp. 8.75% Sr. Unsec. Sub. Nts., 8/15/07 325,000 273,812 9.125% Sr. Nts., 1/15/11 600,000 567,000 - ------------------------------------------------------------------------------------------------------------------- Meristar Hospitality Operating Partnership/Finance Corp. II, 10.50% Sr. Nts., 6/15/09(3) 400,000 402,500 - ------------------------------------------------------------------------------------------------------------------- MGM Mirage, Inc., 8.375% Sr. Unsec. Sub. Nts., 2/1/11(6) 1,200,000 1,191,000
Oppenheimer Strategic Bond Fund/VA 13 Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - ------------------------------------------------------------------------------------------------------------------ Gaming/Leisure (continued) Mohegan Tribal Gaming Authority: 8.125% Sr. Nts., 1/1/06(1) $300,000 $ 309,750 8.375% Sr. Sub. Nts., 7/1/11 600,000 621,000 8.75% Sr. Unsec. Sub. Nts., 1/1/09 700,000 728,000 - ------------------------------------------------------------------------------------------------------------------ Premier Cruise Ltd., 11% Sr. Nts., 3/15/08(1)(8)(9) 250,000 -- - ------------------------------------------------------------------------------------------------------------------ Premier Parks, Inc.: 0%/10% Sr. Disc. Nts., 4/1/08(12) 450,000 385,875 9.25% Sr. Nts., 4/1/06 100,000 101,000 9.75% Sr. Nts., 6/15/07 100,000 104,875 - ------------------------------------------------------------------------------------------------------------------ Six Flags Entertainment Corp., 8.875% Sr. Nts., 4/1/06(1) 200,000 202,000 - ------------------------------------------------------------------------------------------------------------------ Station Casinos, Inc., 9.875% Sr. Unsec. Sub. Nts., 7/1/10 800,000 817,000 - ------------------------------------------------------------------------------------------------------------------ Trump Atlantic City Associates/Trump Atlantic City Funding, Inc., 11.25% First Mtg. Nts., 5/1/06 25,000 16,000 - ------------------------------------------------------------------------------------------------------------------ Vail Resorts, Inc., 8.75% Sr. Sub. Nts., 5/15/09(3) 200,000 195,000 - ------------------------------------------------------------------------------------------------------------------ Venetian Casino Resort LLC/Las Vegas Sands, Inc., 12.25% Mtg. Nts., 11/15/04 250,000 251,250 ----------- 10,967,632 - ------------------------------------------------------------------------------------------------------------------ Healthcare--1.6% Beverly Enterprises, Inc., 9.625% Sr. Unsec. Nts., 4/15/09 800,000 844,000 - ------------------------------------------------------------------------------------------------------------------ Charles River Laboratories International, Inc., 13.50% Sr. Sub. Nts., Series B, 10/1/09 227,500 274,137 - ------------------------------------------------------------------------------------------------------------------ Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08 900,000 904,500 - ------------------------------------------------------------------------------------------------------------------ Fresenius Medical Care Capital Trust III, 7.375% Nts., 2/1/08(DEM) 25,000 11,211 - ------------------------------------------------------------------------------------------------------------------ Fresenius Medical Care Capital Trust IV, 7.875% Trust Preferred Nts., 6/15/11 600,000 600,000 - ------------------------------------------------------------------------------------------------------------------ ICN Pharmaceuticals, Inc.: 8.75% Sr. Nts., 11/15/08(1) 200,000 225,000 9.75% Sr. Nts., 11/15/08(3) 350,000 393,750 - ------------------------------------------------------------------------------------------------------------------ Kinetic Concepts, Inc., 9.625% Sr. Unsec. Sub. Nts., Series B, 11/1/07(1) 250,000 248,750 - ------------------------------------------------------------------------------------------------------------------ Magellan Health Services, Inc.: 9% Sr. Sub. Nts., 2/15/08 600,000 537,000 9.375% Sr. Nts., 11/15/07(3) 700,000 714,000 - ------------------------------------------------------------------------------------------------------------------ Triad Hospitals, Inc., 8.75% Sr. Unsec. Nts., Series B, 5/1/09 400,000 419,000 - ------------------------------------------------------------------------------------------------------------------ VanGuard Health Systems, Inc., 9.75% Sr. Sub. Nts., 8/1/11(3) 300,000 316,500 ----------- 5,487,848 - ------------------------------------------------------------------------------------------------------------------ Housing--1.4% Ainsworth Lumber Co. Ltd., 13.875% Sr. Sec. Nts., 7/15/07(3) 400,000 416,000 - ------------------------------------------------------------------------------------------------------------------ CB Richard Ellis Services, Inc., 11.25% Sr. Unsec. Sub. Nts., 6/15/11 500,000 430,000 - ------------------------------------------------------------------------------------------------------------------ D.R. Horton, Inc.: 7.875% Sr. Nts., 8/15/11 300,000 294,000 9.375% Sr. Unsec. Sub. Nts., 3/15/11 400,000 412,000 9.75% Sr. Sub. Nts., 9/15/10 400,000 414,000 - ------------------------------------------------------------------------------------------------------------------ Del Webb Corp., 10.25% Sr. Unsec. Sub. Nts., 2/15/10 300,000 323,250 - ------------------------------------------------------------------------------------------------------------------ Formica Corp., 10.875% Sr. Unsec. Sub. Nts., Series B, 3/1/09 200,000 61,000 - ------------------------------------------------------------------------------------------------------------------ KB Home: 7.75% Sr. Nts., 10/15/04(1) 300,000 306,000 8.65% Sr. Sub. Nts., 12/15/08 250,000 252,500 9.50% Sr. Unsec. Sub. Nts., 2/15/11 400,000 410,000
14 Oppenheimer Strategic Bond Fund/VA Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - --------------------------------------------------------------------------------------------------------- Housing (continued) Lennar Corp., 9.95% Sr. Unsec. Nts., Series B, 5/1/10 $ 500,000 $ 553,750 - --------------------------------------------------------------------------------------------------------- Nortek, Inc.: 9.125% Sr. Unsec. Nts., Series B, 9/1/07 650,000 663,000 9.25% Sr. Nts., Series B, 3/15/07 150,000 153,750 9.875% Sr. Unsec. Sub. Nts., 6/15/11 250,000 248,750 ---------- 4,938,000 - --------------------------------------------------------------------------------------------------------- Information Technology--1.3% Amkor Technology, Inc.: 9.25% Sr. Unsec. Nts., 5/1/06 700,000 672,000 9.25% Sr. Unsec. Sub. Nts., 2/15/08 250,000 237,500 - --------------------------------------------------------------------------------------------------------- ASAT Finance LLC, 12.50% Sr. Unsec. Nts., 11/1/06 162,500 111,312 - --------------------------------------------------------------------------------------------------------- Cherokee International LLC, 10.50% Sr. Unsec. Sub. Nts., Series B, 5/1/09(1) 500,000 252,500 - --------------------------------------------------------------------------------------------------------- ChipPAC International Co. Ltd., 12.75% Sr. Unsec. Sub. Nts., Series B, 8/1/09 600,000 555,000 - --------------------------------------------------------------------------------------------------------- Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05(1) 250,000 118,750 - --------------------------------------------------------------------------------------------------------- Fairchild Semiconductor Corp.: 10.375% Sr. Unsec. Nts., 10/1/07 500,000 523,750 10.50% Sr. Unsec. Sub. Nts., 2/1/09 300,000 320,250 - --------------------------------------------------------------------------------------------------------- Fisher Scientific International, Inc., 9% Sr. Unsec. Sub. Nts., 2/1/08 505,000 520,150 - --------------------------------------------------------------------------------------------------------- Flextronics International Ltd., 9.875% Sr. Unsec. Sub. Nts., 7/1/10 500,000 527,500 - --------------------------------------------------------------------------------------------------------- Micron Technology, Inc., 6.50% Sub. Nts., 9/30/05 1,000,000 900,000 ---------- 4,738,712 - --------------------------------------------------------------------------------------------------------- Manufacturing--1.1% Actuant Corp., 13% Sr. Sub. Nts., 5/1/09 300,000 322,500 - --------------------------------------------------------------------------------------------------------- Agco Corp., 9.50% Sr. Unsec. Nts., 5/1/08 800,000 840,000 - --------------------------------------------------------------------------------------------------------- Blount, Inc., 13% Sr. Sub. Nts., 8/1/09 300,000 139,500 - --------------------------------------------------------------------------------------------------------- Buhrmann US, Inc., 12.25% Sr. Unsec. Sub. Nts., 11/1/09 500,000 502,500 - --------------------------------------------------------------------------------------------------------- Burke Industries, Inc., 10% Sr. Sub. Nts., 8/15/07(1)(8) 150,000 12,750 - --------------------------------------------------------------------------------------------------------- Eagle-Picher Industries, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/1/08 300,000 166,500 - --------------------------------------------------------------------------------------------------------- Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08(1)(8)(9) 500,000 12,500 - --------------------------------------------------------------------------------------------------------- Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07(1) 150,000 108,750 - --------------------------------------------------------------------------------------------------------- Insilco Corp., 12% Sr. Sub. Nts., 8/15/07(1) 400,000 62,000 - --------------------------------------------------------------------------------------------------------- International Utility Structures, Inc., 13% Unsec. Sub. Nts., 2/1/08(1) 71,000 13,490 - --------------------------------------------------------------------------------------------------------- International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 125,000 103,125 - --------------------------------------------------------------------------------------------------------- Jordan Industries, Inc., 10.375% Sr. Unsec. Nts., Series D, 8/1/07 300,000 151,500 - --------------------------------------------------------------------------------------------------------- Moll Industries, Inc., 10.50% Sr. Unsec. Sub. Nts., 7/1/08(1) 200,000 37,000 - --------------------------------------------------------------------------------------------------------- Roller Bearing Co. of America, Inc., 9.625% Sr. Sub. Nts., Series B, 6/15/07(1) 540,000 475,200 - --------------------------------------------------------------------------------------------------------- Terex Corp.: 8.875% Sr. Unsec. Sub. Nts., 4/1/08 250,000 247,500 8.875% Sr. Unsec. Sub. Nts., Series C, 4/1/08 100,000 99,000 9.25% Sr. Sub. Nts., 7/15/11(3) 400,000 402,000 - --------------------------------------------------------------------------------------------------------- Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03(1) 50,000 50,250 ---------- 3,746,065
Oppenheimer Strategic Bond Fund/VA 15 Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - ------------------------------------------------------------------------------------------------------------ Media/Entertainment: Broadcasting--1.1% Chancellor Media Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 6/15/07 $ 400,000 $ 418,000 - ------------------------------------------------------------------------------------------------------------ Cumulus Media, Inc., 10.375% Sr. Unsec. Sub. Nts., 7/1/08 450,000 473,625 - ------------------------------------------------------------------------------------------------------------ Emmis Communications Corp.: 0%/12.50% Sr. Unsec. Disc. Nts. , 3/15/11(12) 700,000 427,000 8.125% Sr. Unsec. Sub. Nts., Series B, 3/15/09 600,000 577,500 - ------------------------------------------------------------------------------------------------------------ Radio One, Inc., 8.875% Sr. Unsec. Sub. Nts., Series B, 7/1/11 400,000 415,000 - ------------------------------------------------------------------------------------------------------------ Sinclair Broadcast Group, Inc.: 8.75% Sr. Sub. Nts., 12/15/07 100,000 100,250 8.75% Sr. Sub. Nts., 12/15/11(3) 300,000 301,500 9% Sr. Unsec. Sub. Nts., 7/15/07 500,000 505,000 - ------------------------------------------------------------------------------------------------------------ Spanish Broadcasting System, Inc., 9.625% Sr. Unsec. Sub. Nts., 11/1/09 800,000 796,000 ---------- 4,013,875 - ------------------------------------------------------------------------------------------------------------ Media/Entertainment: Cable/Wireless Video--3.5% Adelphia Communications Corp.: 7.875% Sr. Unsec. Nts., 5/1/09 350,000 322,438 8.375% Sr. Nts., Series B, 2/1/08 100,000 93,125 9.25% Sr. Nts., 10/1/02 385,000 389,331 9.375% Sr. Nts., 11/15/09 500,000 483,125 10.25% Sr. Unsec. Sub. Nts., 6/15/11 600,000 601,500 10.50% Sr. Unsec. Nts., Series B, 7/15/04 70,000 70,612 10.875% Sr. Unsec. Nts., 10/1/10 500,000 513,125 - ------------------------------------------------------------------------------------------------------------ Callahan Nordrhein-Westfalen GmbH, 14.125% Sr. Nts., 7/15/11(EUR) 500,000 282,702 - ------------------------------------------------------------------------------------------------------------ Charter Communications Holdings LLC/Charter Communications Holdings CapitalCorp.: 0%/9.92% Sr. Unsec. Disc. Nts., 4/1/11(12) 1,750,000 1,275,313 8.25% Sr. Unsec. Nts., 4/1/07 400,000 386,500 10% Sr. Nts., 4/1/09 100,000 103,125 10% Sr. Unsec. Sub. Nts., 5/15/11 600,000 613,500 10.75% Sr. Unsec. Nts., 10/1/09 1,500,000 1,590,000 11.125% Sr. Unsec. Nts., 1/15/11 500,000 532,500 - ------------------------------------------------------------------------------------------------------------ Classic Cable, Inc., 10.50% Sr. Sub. Nts., 3/1/10(8) 200,000 51,000 - ------------------------------------------------------------------------------------------------------------ Comcast UK Cable Partner Ltd., 11.20% Sr. Unsec. Disc. Debs., 11/15/07 250,000 186,250 - ------------------------------------------------------------------------------------------------------------ Diamond Cable Communications plc, 11.75% Sr. Disc. Nts., 12/15/05 750,000 198,750 - ------------------------------------------------------------------------------------------------------------ Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08 50,000 35,750 - ------------------------------------------------------------------------------------------------------------ EchoStar Broadband Corp., 10.375% Sr. Unsec. Nts., 10/1/07 800,000 842,000 - ------------------------------------------------------------------------------------------------------------ EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09 945,000 978,075 - ------------------------------------------------------------------------------------------------------------ Insight Midwest LP/Insight Capital, Inc., 9.75% Sr. Nts., 10/1/09 400,000 424,000 - ------------------------------------------------------------------------------------------------------------ Mediacom LLC/Mediacom Capital Corp., 9.50% Sr. Unsec. Nts., 1/15/13 600,000 625,500 - ------------------------------------------------------------------------------------------------------------ NTL Communications Corp.,0%/9.75% Sr. Unsec. Nts., Series B, 4/15/09(12)(GBP ) 775,000 273,524 - ------------------------------------------------------------------------------------------------------------ NTL, Inc.,0%/10.75% Sr. Unsec. Unsub. Nts., Series B, 4/1/08(12)(GBP) 200,000 78,592 - ------------------------------------------------------------------------------------------------------------ Rogers Cablesystems Ltd.,10% Second Priority Sr. Sec. Debs., 12/1/07 200,000 217,000 - ------------------------------------------------------------------------------------------------------------ Rogers Communications, Inc., 8.75% Sr. Nts., 7/15/07CAD 400,000 249,327 - ------------------------------------------------------------------------------------------------------------ Telewest Communications plc: 0%/9.25% Sr. Disc. Nts., 4/15/09(12) 600,000 266,250 0%/9.875% Sr. Disc. Nts., 4/15/09(12)(GBP) 425,000 265,974 0%/11.375% Sr. Disc. Nts., 2/1/10(12) 300,000 117,000 - ------------------------------------------------------------------------------------------------------------ United International Holdings, Inc.,0%/10.75% Sr. Disc. Nts., Series B, 2/15/08(12) 770,000 227,150
16 Oppenheimer Strategic Bond Fund/VA Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - --------------------------------------------------------------------------------------------------------- Media/Entertainment: Cable/Wireless Video (continued) United Pan-Europe Communications NV: 0%/13.375% Sr. Unsec. Disc. Nts., Series B, 11/1/09(12) $ 500,000 $ 42,500 0%/13.75% Sr. Unsec. Disc. Nts., Series B, 2/1/10(12) 200,000 17,000 10.875% Sr. Nts., 8/1/09(EUR) 500,000 70,119 11.25% Sr. Nts., Series B, 11/1/09(EUR) 250,000 35,060 ----------- 12,457,717 - --------------------------------------------------------------------------------------------------------- Media/Entertainment: Diversified Media--0.9% Adelphia Communications Corp., 10.25% Sr. Unsec. Nts., 11/1/06 900,000 922,500 - --------------------------------------------------------------------------------------------------------- AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11 500,000 488,125 - --------------------------------------------------------------------------------------------------------- Key3Media Group, Inc., 11.25% Sr. Sub. Nts., 6/15/11 500,000 422,500 - --------------------------------------------------------------------------------------------------------- Lamar Advertising Co.: 8.625% Sr. Sub. Nts., 9/15/07 150,000 157,125 9.625% Sr. Unsec. Sub. Nts., 12/1/06 50,000 52,438 - --------------------------------------------------------------------------------------------------------- Mail-Well I Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 12/15/08 600,000 471,000 - --------------------------------------------------------------------------------------------------------- Penton Media, Inc., 10.375% Sr. Unsec. Sub. Nts., 6/15/11 600,000 345,000 - --------------------------------------------------------------------------------------------------------- WRC Media, Inc./Weekly Reader Corp./Compass Learning Corp., 12.75% Sr. Sub. Nts., 11/15/09 500,000 503,750 ----------- 3,362,438 - --------------------------------------------------------------------------------------------------------- Media/Entertainment: Telecommunications--1.9% 360networks, Inc., 13% Sr. Unsec. Nts., 5/1/08(1)(8)(EUR) 250,000 22 - --------------------------------------------------------------------------------------------------------- Adelphia Business Solutions, Inc., 12% Sr. Sub. Nts., 11/1/07 200,000 3,000 - --------------------------------------------------------------------------------------------------------- Allegiance Telecom, Inc., 0%/11.75% Sr. Unsec. Disc. Nts., Series B, 2/15/08(12) 800,000 356,000 - --------------------------------------------------------------------------------------------------------- COLO. com, Inc., 13.875% Sr. Nts., 3/15/10(1)(8)(9) 400,000 10,000 - --------------------------------------------------------------------------------------------------------- COLT Telecom Group plc: 7.625% Bonds, 7/31/08(DEM) 500,000 167,306 12% Sr. Unsec. Disc. Nts., 12/15/06(1) 400,000 354,000 - --------------------------------------------------------------------------------------------------------- Concentric Network Corp., 12.75% Sr. Unsec. Nts., 12/15/07(8) 80,000 9,200 - --------------------------------------------------------------------------------------------------------- Covad Communications Group, Inc., 0%/13.50% Sr. Disc. Nts., 3/15/08(1)(8)(9)(12) 800,000 124,000 - --------------------------------------------------------------------------------------------------------- Dobson Communications Corp., 10.875% Sr. Unsec. Nts., 7/1/10 400,000 415,000 - --------------------------------------------------------------------------------------------------------- Equinix, Inc., 13% Sr. Unsec. Nts., 12/1/07(1) 200,000 68,000 - --------------------------------------------------------------------------------------------------------- Exodus Communications, Inc., 10.75% Sr. Nts., 12/15/09(8)(9)(EUR) 400,000 62,328 - --------------------------------------------------------------------------------------------------------- FirstWorld Communications, Inc., 0%/13% Sr. Disc. Nts., 4/15/08(1)(12) 250,000 25 - --------------------------------------------------------------------------------------------------------- FLAG Telecom Holdings Ltd., 11.625% Sr. Nts., 3/30/10(EUR) 150,000 56,095 - --------------------------------------------------------------------------------------------------------- Focal Communications Corp.: 0%/12.125% Sr. Unsec. Disc. Nts., 2/15/08(12) 80,000 22,800 11.875% Sr. Unsec. Nts., Series B, 1/15/10 75,000 31,125 - --------------------------------------------------------------------------------------------------------- Global Crossing Holdings Ltd., 8.70% Sr. Unsec. Nts., 8/1/07(8) 200,000 19,000 - --------------------------------------------------------------------------------------------------------- Global TeleSystems, Inc., 10.50% Sr. Unsec. Bonds, 12/1/06(1)(8)(9)(EUR) 250,000 20,034 - --------------------------------------------------------------------------------------------------------- Globix Corp., 12.50% Sr. Unsec. Nts., 2/1/10(8) 300,000 61,500 - --------------------------------------------------------------------------------------------------------- Intermedia Communications, Inc.,0%/12.25% Sr. Disc. Nts., Series B, 3/1/09(12) 500,000 448,125 - --------------------------------------------------------------------------------------------------------- International CableTel, Inc., 11.50% Sr. Deferred Coupon Nts., Series B, 2/1/06 500,000 177,500 - --------------------------------------------------------------------------------------------------------- Jazztel plc, 13.25% Sr. Unsec. Nts., 12/15/09(EUR) 300,000 105,512 - --------------------------------------------------------------------------------------------------------- KMC Telecom Holdings, Inc.,0%/12.50% Sr. Unsec. Disc. Nts., 2/15/08(12) 900,000 40,500 - --------------------------------------------------------------------------------------------------------- KPNQwest BV, 8.875% Sr. Nts., 2/1/08(1)(EUR) 400,000 181,642 - --------------------------------------------------------------------------------------------------------- Leap Wireless International, Inc., 0%/14.50% Sr. Unsec. Disc. Nts., 4/15/10(12) 1,000,000 360,000 - --------------------------------------------------------------------------------------------------------- Level 3 Communications, Inc., 0%/10.50% Sr. Disc. Nts., 12/1/08(12) 2,000,000 570,000
Oppenheimer Strategic Bond Fund/VA 17 Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - ------------------------------------------------------------------------------------------------------------ Media/Entertainment: Telecommunications (continued) Metromedia Fiber Network, Inc.: 10% Sr. Nts., 12/15/09 $ 400,000 $ 118,000 10% Sr. Unsec. Nts., Series B, 11/15/08 400,000 118,000 - ------------------------------------------------------------------------------------------------------------ Metromedia International Group, Inc., 3.728% Sr. Unsec. Disc. Nts., 9/30/07(1)(2) 503,059 223,861 - ------------------------------------------------------------------------------------------------------------ NorthPoint Communications Group, Inc., 12.875% Nts., 2/15/10(8)(9) 350,000 73,500 - ------------------------------------------------------------------------------------------------------------ Ntelos, Inc., 13% Sr. Nts., 8/15/10(1) 450,000 326,250 - ------------------------------------------------------------------------------------------------------------ OpTel, Inc., 13% Sr. Nts., Series B, 2/15/05(1)(8)(9) 100,000 45,500 - ------------------------------------------------------------------------------------------------------------ PSINet, Inc.: 10.50% Sr. Unsec. Nts., 12/1/06(1)(8)(9)(EUR) 100,000 6,233 11% Sr. Nts., 8/1/09(8) 300,000 24,000 - ------------------------------------------------------------------------------------------------------------ RCN Corp., 10.125% Sr. Unsec. Nts., 1/15/10 357,000 149,940 - ------------------------------------------------------------------------------------------------------------ Rhythms NetConnections, Inc., 14% Sr. Unsec. Nts., Series B, 2/15/10(8) 500,000 42,500 - ------------------------------------------------------------------------------------------------------------ Shaw Communications, Inc., 8.54% Debs., 9/30/27(CAD) 340,000 202,790 - ------------------------------------------------------------------------------------------------------------ Tele1 Europe BV, 11.875% Sr. Nts., 12/1/09(EUR) 500,000 149,142 - ------------------------------------------------------------------------------------------------------------ Teligent, Inc., 11.50% Sr. Nts., 12/1/07(1)(8)(9) 500,000 2,500 - ------------------------------------------------------------------------------------------------------------ Time Warner Telecom LLC/Time Warner Telecom, Inc., 9.75% Sr. Nts., 7/15/08 100,000 80,750 - ------------------------------------------------------------------------------------------------------------ Time Warner Telecom, Inc., 10.125% Sr. Unsec. Sub. Nts., 2/1/11 600,000 484,500 - ------------------------------------------------------------------------------------------------------------ Triton PCS, Inc., 8.75% Sr. Sub. Nts., 11/15/11(3) 500,000 502,500 - ------------------------------------------------------------------------------------------------------------ Viatel, Inc., 11.25% Sr. Sec. Nts., 4/15/08(1)(8) 500,000 1,875 - ------------------------------------------------------------------------------------------------------------ Williams Communications Group, Inc.: 10.875% Sr. Unsec. Nts., 10/1/09 300,000 124,500 11.875% Sr. Unsec. Nts., 8/1/10 300,000 124,500 - ------------------------------------------------------------------------------------------------------------ Winstar Communications, Inc., 12.75% Sr. Nts., 4/15/10(1)(8)(9) 250,000 938 - ------------------------------------------------------------------------------------------------------------ XO Communications, Inc.: 0%/12.25% Sr. Unsec. Disc. Nts., 6/1/09(8)(12) 400,000 34,000 9% Sr. Unsec. Nts., 3/15/08(8) 250,000 31,250 9.625% Sr. Nts., 10/1/07(8) 200,000 25,000 10.75% Sr. Unsec. Nts., 11/15/08(8) 300,000 37,500 ----------- 6,592,243 - ------------------------------------------------------------------------------------------------------------ Media/Entertainment: Wireless Communications--4.1% Alamosa Delaware, Inc., 12.50% Sr. Unsec. Nts., 2/1/11 400,000 410,000 - ------------------------------------------------------------------------------------------------------------ American Cellular Corp., 9.50% Sr. Sub. Nts., 10/15/09 850,000 828,750 - ------------------------------------------------------------------------------------------------------------ American Tower Corp., 9.375% Sr. Nts., 2/1/09 1,000,000 810,000 - ------------------------------------------------------------------------------------------------------------ CellNet Data Systems, Inc., 0%/14% Sr. Unsec. Disc. Nts., 10/1/07(1)(8)(12) 400,000 500 - ------------------------------------------------------------------------------------------------------------ Crown Castle International Corp.: 0%/10.375% Sr. Disc. Nts., 5/15/11(12) 500,000 312,500 0%/10.625% Sr. Unsec. Disc. Nts., 11/15/07(12) 500,000 422,500 9.375% Sr. Nts., 8/1/11 400,000 369,000 - ------------------------------------------------------------------------------------------------------------ Horizon PCS, Inc., 0%/14% Sr. Unsec. Sub. Nts., 10/1/10(12) 1,000,000 520,000 - ------------------------------------------------------------------------------------------------------------ IPCS, Inc., 0%/14% Sr. Unsec. Disc. Nts., 7/15/10(12) 300,000 199,500 - ------------------------------------------------------------------------------------------------------------ Leap Wireless International, Inc., 12.50% Sr. Nts., 4/15/10 275,000 210,375 - ------------------------------------------------------------------------------------------------------------ Loral Space & Communications Ltd., 9.50% Sr. Nts., 1/15/06 300,000 166,500 - ------------------------------------------------------------------------------------------------------------ Microcell Telecommunications, Inc.: 0%/11.125% Sr. Disc. Nts., Series B, 10/15/07(1)(12)(CAD) 300,000 115,110 14% Sr. Disc. Nts., Series B, 6/1/06 300,000 257,250 - ------------------------------------------------------------------------------------------------------------ Millicom International Cellular SA, 13.50% Sr. Disc. Nts., 6/1/06 410,000 272,650
18 Oppenheimer Strategic Bond Fund/VA Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - --------------------------------------------------------------------------------------------------------- Media/Entertainment: Wireless Communications (continued) Nextel Communications, Inc.: 0%/9.95% Sr. Disc. Nts., 2/15/08(12) $ 245,000 $ 169,050 0%/10.65% Sr. Disc. Nts., 9/15/07(12) 750,000 575,625 9.375% Sr. Unsec. Nts., 11/15/09 800,000 634,000 - --------------------------------------------------------------------------------------------------------- Nextel Partners, Inc., 11% Sr. Unsec. Nts., 3/15/10 250,000 203,125 - --------------------------------------------------------------------------------------------------------- Omnipoint Corp., 11.50% Sr. Nts., 9/15/09(3) 735,000 852,600 - --------------------------------------------------------------------------------------------------------- ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04(1)(8)(9) 200,000 7,000 - --------------------------------------------------------------------------------------------------------- Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(12) 675,000 330,750 - --------------------------------------------------------------------------------------------------------- Pinnacle Holdings, Inc., 0%/10% Sr. Unsec. Disc. Nts., 3/15/08(12) 600,000 150,000 - --------------------------------------------------------------------------------------------------------- Price Communications Wireless, Inc.: 9.125% Sr. Sec. Nts., Series B, 12/15/06(1) 250,000 266,250 11.75% Sr. Sub. Nts., 7/15/07 275,000 301,125 - --------------------------------------------------------------------------------------------------------- Real Time Data Co., 13% Disc. Nts., 5/31/09(1)(13) 142,981 147,489 - --------------------------------------------------------------------------------------------------------- Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 300,000 310,500 - --------------------------------------------------------------------------------------------------------- SBA Communications Corp.: 0%/12% Sr. Unsec. Disc. Nts., 3/1/08(12) 1,200,000 906,000 10.25% Sr. Unsec. Nts., 2/1/09 400,000 344,000 - --------------------------------------------------------------------------------------------------------- Spectrasite Holdings, Inc.: 0%/12% Sr. Disc. Nts., 7/15/08(12) 500,000 157,500 0%/12.875% Sr. Unsec. Disc. Nts., Series B, 3/15/10(12) 300,000 70,500 - --------------------------------------------------------------------------------------------------------- TeleCorp PCS, Inc.: 0%/11.625% Sr. Unsec. Sub. Disc. Nts., 4/15/09(12) 500,000 437,500 10.625% Sr. Unsec. Sub. Nts., 7/15/10 400,000 466,000 - --------------------------------------------------------------------------------------------------------- Tritel PCS, Inc.: 0%/12.75% Sr. Unsec. Sub. Disc. Nts., 5/15/09(12) 350,000 299,250 10.375% Sr. Sub. Nts., 1/15/11 400,000 460,000 - --------------------------------------------------------------------------------------------------------- Triton PCS, Inc.: 0%/11% Sr. Unsec. Sub. Disc. Nts., 5/1/08(12) 400,000 364,000 9.375% Sr. Unsec. Sub. Nts., 2/1/11 300,000 312,000 - --------------------------------------------------------------------------------------------------------- US Unwired, Inc., 0%/13.375% Sr. Unsec. Sub. Disc. Nts., Series B, 11/1/09(12) 900,000 639,000 - --------------------------------------------------------------------------------------------------------- VoiceStream Wireless Corp., 10.375% Sr. Unsec. Nts., 11/15/09 964,000 1,098,960 ----------- 14,396,859 - --------------------------------------------------------------------------------------------------------- Metals/Minerals--1.1% AK Steel Corp., 7.875% Sr. Unsec. Nts., 2/15/09 500,000 492,500 - --------------------------------------------------------------------------------------------------------- Better Minerals & Aggregates Co., 13% Sr. Unsec. Sub. Nts., 9/15/09 100,000 84,000 - --------------------------------------------------------------------------------------------------------- California Steel Industries Corp., 8.50% Sr. Unsec. Nts., Series B, 4/1/09 200,000 197,000 - --------------------------------------------------------------------------------------------------------- Centaur Mining & Exploration Ltd., 11% Sr. Nts., 12/1/07(1)(8)(9) 100,000 5,500 - --------------------------------------------------------------------------------------------------------- Century Aluminum Co., 11.75% Sr. Sec. Nts., 4/15/08 500,000 520,000 - --------------------------------------------------------------------------------------------------------- Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., Series B, 5/15/08 529,375 320,272 - --------------------------------------------------------------------------------------------------------- Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03(8) 1,000,000 735,000 - --------------------------------------------------------------------------------------------------------- Metallurg Holdings, Inc., 0%/12.75% Sr. Disc. Nts., 7/15/08(1)(12) 300,000 115,500 - --------------------------------------------------------------------------------------------------------- Metallurg, Inc., 11% Sr. Nts., 12/1/07 500,000 432,500 - --------------------------------------------------------------------------------------------------------- National Steel Corp., 9.875% First Mtg. Bonds, Series D, 3/1/09 800,000 284,000 - --------------------------------------------------------------------------------------------------------- United States Steel LLC, 10.75% Sr. Nts., 8/1/08 700,000 672,000 ----------- 3,858,272
Oppenheimer Strategic Bond Fund/VA 19 Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - ----------------------------------------------------------------------------------------------------------- Retail--1.0% Amazon. com, Inc., 0%/10% Sr. Unsec. Disc. Nts., 5/1/08(12) $ 900,000 $ 670,500 - ----------------------------------------------------------------------------------------------------------- AutoNation, Inc., 9% Bonds, 8/1/08(3) 500,000 511,250 - ----------------------------------------------------------------------------------------------------------- Collins & Aikman Corp., 10.75% Sr. Nts., 12/31/11(3) 400,000 403,000 - ----------------------------------------------------------------------------------------------------------- CSK Auto, Inc., 12% Sr. Nts., 6/15/06(3) 400,000 405,000 - ----------------------------------------------------------------------------------------------------------- Eye Care Centers of America, Inc., 9.125% Sr. Unsec. Sub. Nts., 5/1/08(1) 200,000 95,250 - ----------------------------------------------------------------------------------------------------------- Finlay Enterprises, Inc., 9% Debs., 5/1/08 100,000 89,500 - ----------------------------------------------------------------------------------------------------------- Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08(1) 100,000 90,000 - ----------------------------------------------------------------------------------------------------------- Ingram Micro, Inc., 9.875% Sr. Unsec. Sub. Nts., 8/15/08(1) 700,000 712,250 - ----------------------------------------------------------------------------------------------------------- Petco Animal Supplies, Inc., 10.75% Sr. Sub. Nts., 11/1/11(3) 200,000 205,000 - ----------------------------------------------------------------------------------------------------------- Saks, Inc., 9.875% Nts., 10/1/11(3) 400,000 376,000 ---------- 3,557,750 - ----------------------------------------------------------------------------------------------------------- Service--2.5% Allied Waste North America, Inc.: 8.50% Sr. Nts., 12/1/08(3) 900,000 913,500 8.875% Sr. Nts., Series B, 4/1/08 800,000 828,000 10% Sr. Unsec. Sub. Nts., Series B, 8/1/09 1,700,000 1,759,500 - ----------------------------------------------------------------------------------------------------------- American Plumbing & Mechanical, Inc., 11.625% Sr. Sub. Nts., Series B, 10/15/08 425,000 401,625 - ----------------------------------------------------------------------------------------------------------- AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts., 3/15/08(1)(12) 50,000 3,750 - ----------------------------------------------------------------------------------------------------------- Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08(1) 100,000 38,500 - ----------------------------------------------------------------------------------------------------------- Brand Scaffold Service, Inc., 10.25% Sr. Unsec. Nts., 2/15/08 300,000 283,500 - ----------------------------------------------------------------------------------------------------------- Budget Group, Inc., 9.125% Sr. Unsec. Nts., 4/1/06(1) 700,000 171,500 - ----------------------------------------------------------------------------------------------------------- Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 350,000 358,750 - ----------------------------------------------------------------------------------------------------------- Great Lakes Dredge & Dock Corp., 11.25% Sr. Unsec. Sub. Nts., 8/15/08 500,000 513,125 - ----------------------------------------------------------------------------------------------------------- Integrated Electrical Services, Inc., 9.375% Sr. Sub. Nts., Series C, 2/1/09 700,000 623,000 - ----------------------------------------------------------------------------------------------------------- IT Group, Inc., 11.25% Sr. Unsec. Sub. Nts., Series B, 4/1/09(1)(8) 400,000 74,000 - ----------------------------------------------------------------------------------------------------------- Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 500,000 480,000 - ----------------------------------------------------------------------------------------------------------- Petroleos Mexicanos, 9.375% Sr. Unsec. Bonds, 12/2/08 585,000 633,263 - ----------------------------------------------------------------------------------------------------------- Protection One, Inc./Protection One Alarm Monitoring, Inc., 7.375% Sr. Unsec. Nts., 8/15/05 400,000 330,000 - ----------------------------------------------------------------------------------------------------------- Safety-Kleen Corp., 9.25% Sr. Unsec. Nts., 5/15/09(1)(8)(9) 400,000 40 - ----------------------------------------------------------------------------------------------------------- United Rentals (North America), Inc., 10.75% Sr. Unsec. Nts., 4/15/08 600,000 648,000 - ----------------------------------------------------------------------------------------------------------- United Rentals, Inc., 9.25% Sr. Unsec. Sub. Nts., Series B, 1/15/09 250,000 248,750 - ----------------------------------------------------------------------------------------------------------- URS Corp., 12.25% Sr. Sub. Nts., Series B, 5/1/09 500,000 514,375 ---------- 8,823,178 - ----------------------------------------------------------------------------------------------------------- Transportation--0.8% America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 450,000 200,250 - ----------------------------------------------------------------------------------------------------------- Amtran, Inc.: 9.625% Nts., 12/15/05 100,000 70,250 10.50% Sr. Nts., 8/1/04 700,000 561,750
20 Oppenheimer Strategic Bond Fund/VA Statement of Investments (Continued)
Principal Market Value Amount See Note 1 - --------------------------------------------------------------------------------------------------------------- Transportation (continued) Atlas Air, Inc.: 9.25% Sr. Nts., 4/15/08 $100,000 $ 82,500 9.375% Sr. Unsec. Nts., 11/15/06 300,000 250,500 - --------------------------------------------------------------------------------------------------------------- Delco Remy International, Inc., 11% Sr. Unsec. Sub. Nts., 5/1/09 300,000 307,500 - --------------------------------------------------------------------------------------------------------------- Dura Operating Corp.: 9% Sr. Sub. Nts., Series B, 5/1/09(EUR) 400,000 324,106 9% Sr. Unsec. Sub. Nts., Series D, 5/1/09 500,000 472,500 - --------------------------------------------------------------------------------------------------------------- Hayes Lemmerz International, Inc., 11.875% Sr. Nts., 6/15/06(3)(8)(9) 600,000 288,000 - --------------------------------------------------------------------------------------------------------------- Hayes Wheels International, Inc., 9.125% Sr. Unsec. Sub. Nts., Series B, 7/15/07(8) 250,000 12,500 - --------------------------------------------------------------------------------------------------------------- Millenium Seacarriers, Inc., Units (each unit consists of $1,000 principal amount of 11.725% first priority ship mtg. sr. sec. nts., 7/15/05 and one warrant to purchase five shares of common stock)(1)(2)(8)(14) 250,000 147,500 - --------------------------------------------------------------------------------------------------------------- Navigator Gas Transport plc, 10.50% First Priority Ship Mtg. Nts., 6/30/07(3) 175,000 86,844 ------------ 2,804,200 - --------------------------------------------------------------------------------------------------------------- Utility--1.1% AES Corp. (The): 8.75% Sr. Unsec. Unsub. Nts., 6/15/08 500,000 442,500 8.875% Sr. Unsec. Nts., 2/15/11 500,000 442,500 - --------------------------------------------------------------------------------------------------------------- AES Drax Holdings Ltd., 10.41% Sr. Sec. Sub. Nts., Series B, 12/31/20 600,000 538,500 - --------------------------------------------------------------------------------------------------------------- Azurix Corp.: 10.75% Sr. Unsec. Nts., Series B, 2/15/10 200,000 141,000 10.375% Sr. Unsec. Nts., Series B, 2/15/07 200,000 141,000 - --------------------------------------------------------------------------------------------------------------- Caithness Coso Funding Corp., 9.05% Sr. Sec. Nts., Series B, 12/15/09(1) 400,000 410,000 - --------------------------------------------------------------------------------------------------------------- Calpine Corp., 8.50% Sr. Unsec. Nts., 2/15/11 600,000 546,811 - --------------------------------------------------------------------------------------------------------------- Central Termica Guemes SA, Unsec. Unsub. Bonds, 2.50%, 9/26/10(1)(2) 90,000 6,300 - --------------------------------------------------------------------------------------------------------------- CMS Energy Corp.: 8.50% Sr. Nts., 4/15/11 500,000 500,462 9.875% Sr. Unsec. Nts., 10/15/07 500,000 531,094 - --------------------------------------------------------------------------------------------------------------- Funding Corp./Beaver Valley Funding Corp., 9% Second Lease Obligation Bonds, 6/1/17 199,000 218,043 ------------ 3,918,210 ------------ Total Corporate Bonds and Notes (Cost $152,827,153) 128,530,276 Shares =============================================================================================================== Preferred Stocks--1.1% - --------------------------------------------------------------------------------------------------------------- AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg.(1)(13) 3,865 39 - --------------------------------------------------------------------------------------------------------------- BankUnited Capital Trust, 10.25% Capital Securities, 12/31/26(1) 100,000 94,250 - --------------------------------------------------------------------------------------------------------------- CRIIMI MAE, Inc., 10.875% Cum. Cv., Series B, Non-Vtg. 46,000 625,600 - --------------------------------------------------------------------------------------------------------------- Crown American Realty Trust,11% Cum., Series A, Non-Vtg. 2,000 103,400 - --------------------------------------------------------------------------------------------------------------- Doane Pet Care Co., 14.25% Jr. Sub. Debs., Non-Vtg.(1)(9) 5,000 151,250 - --------------------------------------------------------------------------------------------------------------- Dobson Communications Corp.: 12.25% Sr. Exchangeable, Non-Vtg.(13) 614 563,345 13% Sr. Exchangeable, Non-Vtg.(13) 413 414,032
Oppenheimer Strategic Bond Fund/VA 21 Statement of Investments (Continued)
Market Value Shares See Note 1 =========================================================================================================== Preferred Stocks (continued) - ----------------------------------------------------------------------------------------------------------- e.spire Communications, Inc., 12.75% Jr. Redeemable, Non-Vtg.(1)(13) 216 $ 22 - ----------------------------------------------------------------------------------------------------------- Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable, Series B, Non-Vtg.(1)(9) 5,000 51,250 - ----------------------------------------------------------------------------------------------------------- Earthwatch, Inc., 12% Cv. Sr., Series C, Non-Vtg.(1) 5,427 1,357 - ----------------------------------------------------------------------------------------------------------- Fidelity Federal Bank, l2% Non-Cum. Exchangeable, Series A, Non-Vtg.(1) 20 505 - ----------------------------------------------------------------------------------------------------------- ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg.(1)(9)(13) 151 2 - ----------------------------------------------------------------------------------------------------------- Nebco Evans Holdings, Inc., 11.25% Sr. Redeemable Exchangeable, Non-Vtg.(1)(9)(13) 6,061 758 - ----------------------------------------------------------------------------------------------------------- Nextel Communications, Inc., 11.125% Exchangeable, Series E, Non-Vtg.(13) 146 73,365 - ----------------------------------------------------------------------------------------------------------- Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable, Non-Vtg.(1)(13) 29 247,225 - ----------------------------------------------------------------------------------------------------------- Premcor USA, Inc., 11.50% Cum. Sr., Non-Vtg.(1)(13) 74 37,185 - ----------------------------------------------------------------------------------------------------------- PRIMEDIA, Inc.: 8.625% Exchangeable, Series H, Non-Vtg. 10,000 462,500 9.20% Exchangeable, Series F, Non-Vtg.(1) 1,000 46,250 - ----------------------------------------------------------------------------------------------------------- Rural Cellular Corp., 11.375% Cum. Sr., Series B, Non-Vtg.(13) 597 508,942 - ----------------------------------------------------------------------------------------------------------- Sovereign Real Estate Investment Trust,12% Non-Cum., Series A(1) 4,600 456,550 - ----------------------------------------------------------------------------------------------------------- WorldCom, Inc., 7% Cum. Cv., Series E 2,100 45,937 ---------- Total Preferred Stocks (Cost $7,026,158) 3,883,764 =========================================================================================================== Common Stocks--0.1% - ----------------------------------------------------------------------------------------------------------- Adelphia Business Solutions, Inc.(9) 363 210 - ----------------------------------------------------------------------------------------------------------- Aurora Foods, Inc.(1)(9) 5,313 13,415 - ----------------------------------------------------------------------------------------------------------- Celcaribe SA(1)(9) 24,390 39,634 - ----------------------------------------------------------------------------------------------------------- Chesapeake Energy Corp.(1)(9) 20,099 126,212 - ----------------------------------------------------------------------------------------------------------- Contour Energy Co.(9) 5,400 4,995 - ----------------------------------------------------------------------------------------------------------- CRIIMI MAE, Inc.(9) 53,898 217,209 - ----------------------------------------------------------------------------------------------------------- Focal Communications Corp.(9) 153,706 93,761 - ----------------------------------------------------------------------------------------------------------- Geotek Communications, Inc.(1)(9) 90 -- - ----------------------------------------------------------------------------------------------------------- Geotek Communications, Inc., Series B (Escrowed)(1)(9) 210 -- - ----------------------------------------------------------------------------------------------------------- ICO Global Communication Holdings Ltd.(9) 6,016 12,032 - ----------------------------------------------------------------------------------------------------------- OpTel, Inc., Non-Vtg.(1)(9) 210 2 - ----------------------------------------------------------------------------------------------------------- Premier Holdings Ltd.(1)(9) 18,514 -- - ----------------------------------------------------------------------------------------------------------- Southern Pacific Funding Corp., Liquidating Trust(1)(9) 83,868 -- - ----------------------------------------------------------------------------------------------------------- Star Gas Partners LP 187 3,817 - ----------------------------------------------------------------------------------------------------------- Wilshire Financial Services Group, Inc.(9) 6,273 12,860 - ----------------------------------------------------------------------------------------------------------- WorldCom, Inc./MCI Group 8 101 - ----------------------------------------------------------------------------------------------------------- WorldCom, Inc./WorldCom Group(9) 206 2,900 - ----------------------------------------------------------------------------------------------------------- WRC Media Corp.(1)(9) 1,082 11 ---------- Total Common Stocks (Cost $750,903) 527,159
22 Oppenheimer Strategic Bond Fund/VA Statement of Investments (Continued)
Market Value Units See Note 1 ====================================================================================================== Rights, Warrants and Certificates--0.5% - ------------------------------------------------------------------------------------------------------ ASAT Finance LLC Wts., Exp.11/1/06(1)(9) 250 $ 500 - ------------------------------------------------------------------------------------------------------ Charles River Laboratories International, Inc. Wts., Exp.10/1/09(1)(9) 350 7,000 - ------------------------------------------------------------------------------------------------------ Chesapeake Energy Corp. Wts.: Exp.1/23/03(1)(9) 1,668 -- Exp.1/23/03(1)(9) 953 -- Exp.5/1/05(1)(9) 2,181 -- Exp.9/1/04(1)(9) 2,800 -- - ------------------------------------------------------------------------------------------------------ COLO. com, Inc. Wts., Exp.3/15/10(1)(9) 400 4 - ------------------------------------------------------------------------------------------------------ Comunicacion Celular SA Wts., Exp.11/15/03(1)(9) 200 4 - ------------------------------------------------------------------------------------------------------ Concentric Network Corp. Wts., Exp.12/15/07(1)(9) 100 1 - ------------------------------------------------------------------------------------------------------ Covergent Communications, Inc. Wts., Exp.4/1/08(1)(9) 400 150 - ------------------------------------------------------------------------------------------------------ Equinix, Inc. Wts., Exp.12/1/07(1)(9) 200 4,025 - ------------------------------------------------------------------------------------------------------ Focal Communications Corp. Wts., Exp.12/14/07(9) 24,198 -- - ------------------------------------------------------------------------------------------------------ Geotek Communications, Inc. Wts., Exp.7/15/05(1)(9) 7,500 -- - ------------------------------------------------------------------------------------------------------ Golden State Bancorp, Inc. Litigation Wts.(9) 2,404 2,837 - ------------------------------------------------------------------------------------------------------ HF Holdings, Inc. Wts., Exp.9/27/09(1)(9) 530 53 - ------------------------------------------------------------------------------------------------------ Horizon PCS, Inc. Wts., Exp.10/1/10(1)(9) 1,000 40,125 - ------------------------------------------------------------------------------------------------------ ICG Communications, Inc. Wts., Exp.9/15/05(1)(9) 825 8 - ------------------------------------------------------------------------------------------------------ ICO Global Communication Holdings Ltd. Wts.: Exp.5/16/06(1)(9) 1,509 45 Exp.5/16/06(9) 2 -- - ------------------------------------------------------------------------------------------------------ Imperial Credit Industries, Inc. Wts., Exp.1/31/08(1)(9) 2,135 -- - ------------------------------------------------------------------------------------------------------ In-Flight Phone Corp. Wts., Exp.8/31/02(1)(9) 200 -- - ------------------------------------------------------------------------------------------------------ Insilco Corp. Wts., Exp.8/15/07(1)(9) 270 3 - ------------------------------------------------------------------------------------------------------ International Utility Structures, Inc. Wts., Exp.2/1/03(1)(9) 50 -- - ------------------------------------------------------------------------------------------------------ IPCS, Inc. Wts., Exp.6/15/10(1)(9) 300 7,538 - ------------------------------------------------------------------------------------------------------ KMC Telecom Holdings, Inc. Wts., Exp.4/15/08(1)(9) 725 36 - ------------------------------------------------------------------------------------------------------ Leap Wireless International, Inc. Wts., Exp.4/15/10(1)(9) 275 11,034 - ------------------------------------------------------------------------------------------------------ Long Distance International, Inc. Wts., Exp.4/13/08(1)(9) 200 -- - ------------------------------------------------------------------------------------------------------ Loral Space & Communications Ltd. Wts., Exp.1/15/07(1)(9) 150 2 - ------------------------------------------------------------------------------------------------------ Mexico Value Rts., Exp.6/30/03(9) 20,071 5 - ------------------------------------------------------------------------------------------------------ Microcell Telecommunications, Inc. Wts., Exp.6/1/06(3)(9) 600 3,115 - ------------------------------------------------------------------------------------------------------ Millenium Seacarriers, Inc. Wts., Exp.7/15/05(1)(9) 250 3 - ------------------------------------------------------------------------------------------------------ Morgan Stanley Dean Witter & Co. Wts., Exp.6/5/03(9) 163,560 1,618,819 - ------------------------------------------------------------------------------------------------------ Ntelos, Inc. Wts., Exp.8/15/10(1)(9) 450 2,306 - ------------------------------------------------------------------------------------------------------ Occidente y Caribe Celular SA Wts., Exp.3/15/04(1)(9) 800 8,000 - ------------------------------------------------------------------------------------------------------ Pathmark Stores, Inc. Wts., Exp.9/19/10(9) 5,710 51,961 - ------------------------------------------------------------------------------------------------------ PLD Telekom, Inc. Wts., Exp.6/1/06 (cv. into Metromedia International Group, Inc.)(1)(9) 300 3 - ------------------------------------------------------------------------------------------------------ PLD Telekom, Inc.,14% Sr. Disc. Nts. Wts., Exp.3/31/03 (cv. into Metromedia International Group, Inc.)(1)(9) 300 3 - ------------------------------------------------------------------------------------------------------ Real Time Data Co. Wts., Exp.5/31/04(1)(9) 36,431 364 - ------------------------------------------------------------------------------------------------------ Republic Technologies International LLC Wts., Exp.7/15/09(1)(9) 200 2 - ------------------------------------------------------------------------------------------------------ Telus Corp. Wts., Exp.9/15/05(1)(9) 269 2,642 - ------------------------------------------------------------------------------------------------------ Verado Holdings, Inc., Cl. B Wts., Exp.4/15/08(1)(9) 175 88 ---------- Total Rights, Warrants and Certificates (Cost $1,661,802) 1,760,676
Oppenheimer Strategic Bond Fund/VA 23 Statement of Investments (Continued)
Principal Market Value Amount See Note 1 ========================================================================================================= Structured Notes--1.6% - --------------------------------------------------------------------------------------------------------- Credit Suisse First Boston Corp. (New York Branch), Russian Obligatzii Federal'nogo Zaima Linked Nts.: Series 27005, 14.841%, 10/9/02(1)(2)(RUR) 9,307,830 $ 291,886 Series 27005, 14.841%, 10/9/02(1)(2)(RUR) 277,180 8,692 Series 27006, 14.841%, 1/22/03(1)(2)(RUR) 5,003,930 154,852 Series 27006, 14.841%, 1/22/03(1)(2)(RUR) 277,180 8,578 Series 27007, 14.841%, 2/5/03(1)(2)(RUR) 7,647,050 235,317 Series 27007, 14.841%, 2/5/03(1)(2)(RUR) 277,180 8,529 Series 27008, 14.841%, 5/21/03(1)(2)(RUR) 3,315,240 101,343 Series 27008, 14.841%, 5/21/03(1)(2)(RUR) 277,180 8,473 Series 27009, 14.841%, 6/4/03(1)(2)(RUR) 3,783,430 115,718 Series 27009, 14.841%, 6/4/03(1)(2)(RUR) 277,180 8,478 Series 27009, 14.841%, 6/4/03(1)(2)(RUR) 2,561,555 78,346 Series 27010, 14.841%, 9/17/03(1)(2)(RUR) 2,047,150 62,190 Series 27010, 14.841%, 9/17/03(1)(2)(RUR) 277,180 8,420 Series 27011, 14.841%, 10/8/03(1)(2)(RUR) 3,646,190 109,236 Series 27011, 14.841%, 10/8/03(1)(2)(RUR) 277,180 8,304 Series 28001, 14.841%, 1/21/04(1)(2)(RUR) 277,180 8,130 - --------------------------------------------------------------------------------------------------------- Deutsche Bank AG, Brazilian Real Linked Nts., 1.75%, 10/1/02 885,000 890,237 - --------------------------------------------------------------------------------------------------------- Deutsche Bank AG, Korean Won, Thai Baht, Philippines Peso & Japanese Yen Linked Nts., 8.014%, 6/20/02 1,545,000 1,572,656 - --------------------------------------------------------------------------------------------------------- ING Barings LLC, Zero Coupon Russian Equity Linked Nts., 4/19/02(9) 3,600 283,392 - --------------------------------------------------------------------------------------------------------- Lehman Brothers Holdings, Inc., Redwood Capital I, Ltd., Catastrophe Linked Nts., 6.903%, 1/1/03(1)(2) 400,000 400,000 - --------------------------------------------------------------------------------------------------------- Russia (Government of) Federal Loan Obligatzii Federal'nogo Zaima Bonds, Series 27010, 14.841%, 9/17/03(1)(2)(RUR) 3,590,420 109,073 - --------------------------------------------------------------------------------------------------------- UBS AG Australian Dollar Property Index Linked Nts., 7%, 7/30/02(AUD) 1,940,000 1,065,599 ------------ Total Structured Notes (Cost $5,355,965) 5,537,449 Date Strike Contracts ========================================================================================================= Options Purchased--0.0% - --------------------------------------------------------------------------------------------------------- Japanese Yen Call(1)(9) (Cost $78,831) 3/8/02 125.62(JPY) 3,485,000 16,380 Principal Amount ========================================================================================================= Repurchase Agreements--7.7% - --------------------------------------------------------------------------------------------------------- Repurchase agreement with Banc One Capital Markets, Inc., 1.45%, dated 12/31/01, to be repurchased at $27, 037, 178 on 1/2/02, collateralized by U.S. Treasury Nts., 4.75%-7.875%, 2/28/02-11/15/08, with a value of $13,113,857 and U.S. Treasury Bonds, 7.25%-11.125%, 8/15/03-5/15/16, with a value of $14,496,392 (Cost $27,035,000) $27,035,000 27,035,000 - --------------------------------------------------------------------------------------------------------- Total Investments, at Value (Cost $472,299,660) 127.2% 447,462,951 - --------------------------------------------------------------------------------------------------------- Liabilities in Excess of Other Assets (27.2) (95,772,783) ----------- ------------ Net Assets 100.0% $351,690,168 =========== ============
24 Oppenheimer Strategic Bond Fund/VA Statement of Investments (Continued) - ------------------------------------------------------------------------------- Principal amount is reported in U.S Dollars, except for those denoted in the following currencies: ARP -- Argentine Peso AUD -- Australian Dollar CAD -- Canadian Dollar DEM -- German Mark EUR -- Euro FRF -- French Franc GBP -- British Pound Sterling HUF -- Hungarian Forint JPY -- Japanese Yen PLZ -- Polish Zloty RUR -- Russian Ruble SEK -- Swedish Krona 1. Identifies issues considered to be illiquid or restricted-See Note 8 of Notes to Financial Statements. 2. Represents the current interest rate for a variable or increasing rate security. 3. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $20,777,860 or 5.91% of the Fund's net assets as of December 31, 2001. 4. Interest-only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount onwhich current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. 5. When-issued security to be delivered and settled after December 31, 2001. 6. Securities with an aggregate market value of $1,613,963 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to Financial Statements. 7. A sufficient amount of securities has been designated to cover outstanding foreign currency contracts. See Note 5 of Notes to Financial Statements. 8. Issuer is in default. 9. Non-income-producing security. 10. A sufficient amount of liquid assets has been designated to cover outstanding written options, as follows:
Principal (000s) Expiration Exercise Premium Market Value Subject to Call Dates Price Received See Note 1 - -------------------------------------------------------------------------------------------------------------------- Brazil (Federal Republic of) Debt Capitalization Bonds, Series 20 yr., 8%, 4/15/14 $5,474 2/13/02 7.344% $120,420 $229,892 Russian Federation Unsec. Unsub. Nts., 10%, 6/26/07 2,395 2/13/02 9.650 39,517 69,455 Russian Federation Unsub. Bonds, 8.25%, 3/31/10 1,680 2/13/02 8.363 29,400 65,520 Russian Federation Unsub. Nts., 5%, 3/31/30 4,175 5/14/02 5.000 132,765 327,738 Turkey (Republic of) Bonds, 11.75%, 6/15/10 260 1/24/02 9.175 4,680 17,550 Turkey (Republic of) Sr. Unsec. Unsub. Nts., 11.875%, 1/15/30 125 1/24/02 8.675 3,125 12,812 -------- -------- $329,907 $722,967 ======== ========
11. Zero coupon bond reflects the effective yield on the date of purchase. 12. Denotes a step bond: a zero coupon bond that converts to a fixed or variable interest rate at a designated future date. 13. Interest or dividend is paid in kind. 14. Units may be comprised of several components, such as debt and equity and/or warrants to purchase equity at some point in the future. For units which represent debt securities, principal amount disclosed represents total underlying principal. See accompanying Notes to Financial Statements. Oppenheimer Strategic Bond Fund/VA 25 Statement of Assets and Liabilities December 31, 2001
======================================================================================================= Assets Investments, at value (cost $472,299,660)--see accompanying statement $447,462,951 - ------------------------------------------------------------------------------------------------------- Cash 242,343 - ------------------------------------------------------------------------------------------------------- Cash-foreign currencies (cost $94,452) 91,757 - ------------------------------------------------------------------------------------------------------- Unrealized appreciation on foreign currency contracts 21,689 - ------------------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold on a when-issued basis 14,704,018 Interest, dividends and principal paydowns 6,320,149 Shares of beneficial interest sold 1,693,329 Daily variation on futures contracts 161,098 Other 4,174 ------------ Total assets 470,701,508 ======================================================================================================= Liabilities Unrealized depreciation on foreign currency contracts 158,469 - ------------------------------------------------------------------------------------------------------- Options written, at value (premiums received $329,907)--see accompanying statement 722,967 - ------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased (including $117,472,536 purchased on a when-issued basis) 117,695,835 Shares of beneficial interest redeemed 367,624 Shareholder reports 21,538 Closed foreign currency contracts 11,490 Foreign currency swap 985 Trustees'compensation 535 Other 31,897 ------------ Total liabilities 119,011,340 ======================================================================================================= Net Assets $351,690,168 ============ ======================================================================================================= Composition of Net Assets Par value of shares of beneficial interest $ 76,124 - ------------------------------------------------------------------------------------------------------- Additional paid-in capital 375,013,178 - ------------------------------------------------------------------------------------------------------- Undistributed (overdistributed) net investment income 27,951,457 - ------------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) on investments and foreign currency transactions (25,759,935) - ------------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies (25,590,656) ------------ Net Assets $351,690,168 ============ ======================================================================================================= 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 $351,686,185 and 76,123,339 shares of beneficial interest outstanding) $4.62 - ------------------------------------------------------------------------------------------------------- Service shares: Net asset value, redemption price per share and offering price per share (based on net assets of $3,983 and 842 shares of beneficial interest outstanding) $4.73 See accompanying Notes to Financial Statements.
26 Oppenheimer Strategic Bond Fund/VA Statement of Operations For the Year Ended December 31, 2001 ============================================================================================== Investment Income Interest $ 30,795,454 - ---------------------------------------------------------------------------------------------- Dividends 856,175 ------------ Total income 31,651,629 ============================================================================================== Expenses Management fees 2,440,218 - ---------------------------------------------------------------------------------------------- Distribution and service plan fees: Service shares 2 - ---------------------------------------------------------------------------------------------- Shareholder reports 87,289 - ---------------------------------------------------------------------------------------------- Custodian fees and expenses 51,858 - ---------------------------------------------------------------------------------------------- Trustees'compensation 8,702 - ---------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees 8,129 - ---------------------------------------------------------------------------------------------- Other 38,831 ------------ Total expenses 2,635,029 Less reduction to custodian expenses (14,453) ------------ Net expenses 2,620,576 ============================================================================================== Net Investment Income 29,031,053 ============================================================================================== Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments (including premiums on options exercised) (13,882,415) Closing of futures contracts (700,413) Closing and expiration of option contracts written 189,035 Foreign currency transactions (2,094,905) ------------ Net realized gain (loss) (16,488,698) - ---------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments 4,014,213 Translation of assets and liabilities denominated in foreign currencies (1,338,290) ------------ Net change 2,675,923 ------------ Net realized and unrealized gain (loss) (13,812,775) ============================================================================================== Net Increase in Net Assets Resulting from Operations $ 15,218,278 ============
See accompanying Notes to Financial Statements. Oppenheimer Strategic Bond Fund/VA 27 Statements of Changes in Net Assets
Year Ended December 31, 2001 2000 ============================================================================================================ Operations Net investment income (loss) $ 29,031,053 $ 26,767,119 - ------------------------------------------------------------------------------------------------------------ Net realized gain (loss) (16,488,698) (8,600,790) - ------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) 2,675,923 (10,560,691) ------------ ------------ Net increase (decrease) in net assets resulting from operations 15,218,278 7,605,638 ============================================================================================================ Dividends and/or Distributions to Shareholders Dividends from net investment income: Non-Service shares (20,045,483) (23,001,014) Service shares -- -- ============================================================================================================ Beneficial Interest Transactions Net increase (decrease) in net assets resulting from beneficial interest transactions: Non-Service shares 51,951,764 37,871,384 Service shares 3,983 -- ============================================================================================================ Net Assets Total increase 47,128,542 22,476,008 - ------------------------------------------------------------------------------------------------------------ Beginning of period 304,561,626 282,085,618 ------------ ------------ End of period [including undistributed (overdistributed) net investment income of $27,951,457 and $(692,961), respectively] $351,690,168 $304,561,626 ============ ============
See accompanying Notes to Financial Statments. 28 Oppenheimer Strategic Bond Fund/VA Financial Highlights
Year Ended December 31, Non-Service shares 2001 2000 1999 1998 1997 - ----------------------------------------------------------------------------------------------------- Per Share Operating Data Net asset value, beginning of period $4.69 $4.97 $5.12 $5.12 $5.09 - ----------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .41(1) .41 .45 .39 .39 Net realized and unrealized gain (loss) (.19)(1) (.28) (.31) (.24) .04 - ----------------------------------------------------------------------------------------------------- Total income (loss) from investment operations .22 .13 .14 .15 .43 - ----------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.29) (.41) (.29) (.09) (.39) Distributions from net realized gain -- -- -- (.06) (.01) - ----------------------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.29) (.41) (.29) (.15) (.40) - ----------------------------------------------------------------------------------------------------- Net asset value, end of period $4.62 $4.69 $4.97 $5.12 $5.12 ===== ===== ===== ===== ===== ===================================================================================================== Total Return, at Net Asset Value(2) 4.85% 2.63% 2.83% 2.90% 8.71% ===================================================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $351,686 $304,562 $282,086 $279,200 $207,839 - ----------------------------------------------------------------------------------------------------- Average net assets (in thousands) $330,711 $289,923 $278,668 $250,227 $159,934 - ----------------------------------------------------------------------------------------------------- Ratios to average net assets:(3) Net investment income 8.78%(1) 9.23% 9.08% 8.17% 8.23% Expenses 0.79% 0.79% 0.78% 0.80%(4) 0.83%(4) - ----------------------------------------------------------------------------------------------------- Portfolio turnover rate 104% 104% 81% 134% 150%
1. Without the adoption of the change in amortization method as discussed in Note 1 in the Notes to Financial Statements, these amounts would have been: Net investment income $ .42 Net realized and unrealized gain (loss) $(.20) Net investment income ratio 9.01% 2. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Total returns are not annualized for periods of less than one full year. Total return information does not reflect expenses that apply at the separate account level or to related insurance products. Inclusion of these charges would reduce the total return figures for all periods shown. 3. Annualized for periods of less than one full year. 4. Expense ratio has been calculated without adjustment for the reduction to custodian expenses. See accompanying Notes to Financial Statements. Oppenheimer Strategic Bond Fund/VA 29 Financial Highlights (Continued)
Period Ended Service shares December 31, 2001(1) ================================================================== Per Share Operating Data Net asset value, beginning of period $4.64 - ------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .15(2) Net realized and unrealized gain (loss) (.06)(2) - ------------------------------------------------------------------ Total income (loss) from investment operations .09 - ------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- Distributions from net realized gain -- - ------------------------------------------------------------------ Total dividends and/or distributions to shareholders -- - ------------------------------------------------------------------ Net asset value, end of period $4.73 ===== ================================================================== Total Return, at Net Asset Value(3) 1.94% ================================================================== Ratios/Supplemental Data Net assets, end of period (in thousands) $4 - ------------------------------------------------------------------ Average net assets (in thousands) $2 - ------------------------------------------------------------------ Ratios to average net assets:(4) Net investment income 8.17%(2) Expenses 0.92% - ------------------------------------------------------------------ Portfolio turnover rate 104%
1. For the period from March 19, 2001 (inception of offering) to December 31, 2001. 2. Without the adoption of the change in amortization method as discussed in Note 1 in the Notes to Financial Statements, these amounts would have been: Net investment income Change less than $0.005 per share Net realized and unrealized gain Change less than $0.005 per share Net investment income ratio 8.40% 3. 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. 4. Annualized for periods of less than one full year. See accompanying Notes to Financial Statements. 30 Oppenheimer Strategic Bond Fund/VA Notes to Financial Statements =============================================================================== 1. Significant Accounting Policies Oppenheimer Strategic Bond Fund/VA (the Fund) is a separate series of Oppenheimer Variable Account Funds (the Trust), an open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund's investment objective is to seek a high level of current income principally derived from interest on debt securities. 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). - ------------------------------------------------------------------------------- Structured Notes. The Fund invests in foreign currency-linked structured notes whose market values and redemption prices are linked to foreign currency exchange rates. The structured notes are leveraged, which increases the volatility of each note's market value relative to the change in the underlying foreign currency exchange rate. Fluctuations in value of these securities are recorded as unrealized gains and losses in the accompanying financial statements. The Fund records a realized gain or loss when a structured note is sold or matures. As of December 31, 2001, the market value of these securities comprised 1.6% of the Fund's net assets and resulted in unrealized gains in the current period of $181,484. The Fund also hedges a portion of the foreign currency exposure generated by these securities, as discussed in Note 5. - ------------------------------------------------------------------------------- Securities Purchased on a When-Issued Basis. Delivery and payment for securities that have been purchased by the Fund on a when-issued basis can take place a month or more after the trade date. Normally the settlement date occurs within six months after the trade date; however, the Fund may, from time to time, purchase securities whose settlement date extends beyond six months or more beyond trade date. During this period, such securities do not earn interest, are subject to market fluctuation and may increase or decrease in value prior to their delivery. The Fund maintains segregated assets with a market value equal to or greater than the amount of its purchase commitments. The purchase of securities on a when-issued basis may increase the volatility of the Fund's net asset value to the extent the Fund makes such purchases while remaining substantially fully invested. As of December 31, 2001, the Fund had entered into net outstanding when-issued commitments of $102,768,518. In connection with its ability to purchase securities on a when-issued basis, the Fund may enter into forward roll transactions with respect to mortgage-related securities. Forward roll transactions require the sale of securities for delivery in the current month, and a simultaneous agreement with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. The forward roll may not extend for a period of greater than one year. The Fund generally records the incremental difference between the forward purchase and sell of each forward roll as interest income. Risks to the Fund of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Fund to receive inferior securities to what was sold to the counterparty at redelivery; counterparty credit risk; and the potential pay down speed variance between the mortgage-related pools. Oppenheimer Strategic Bond Fund/VA 31 Notes to Financial Statements (Continued) =============================================================================== 1. Significant Accounting Policies (continued) Security Credit Risk. The Fund invests in high yield securities, which may be subject to a greater degree of credit risk, greater market fluctuations and risk of loss of income and principal, and may be more sensitive to economic conditions than lower yielding, higher rated fixed income securities. The Fund may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. As of December 31, 2001, securities with an aggregate market value of $3,057,702, representing 0.87% of the Fund's net assets, were in default. - ------------------------------------------------------------------------------- Foreign Currency Translation. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of foreign securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - ------------------------------------------------------------------------------- Repurchase Agreements. The Fund requires its custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Fund may be delayed or limited. - ------------------------------------------------------------------------------- Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - ------------------------------------------------------------------------------- Federal Taxes. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers to shareholders. As of December 31, 2001, the Fund had available for federal income tax purposes unused capital loss carryovers as follows:
Expiring ------------------------------- 2006 $ 1,014,382 2007 5,399,072 2008 253,735 2009 9,904,928 ----------- Total $16,572,117 ===========
As of December 31, 2001, the Fund had approximately $6,325,000 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 $385,000 of post-October foreign currency losses which were deferred. If unutilized by the Fund in the following fiscal year, such losses will expire. 32 Oppenheimer Strategic Bond Fund/VA Notes to Financial Statements (Continued) =============================================================================== 1. Significant Accounting Policies (continued) Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. - ------------------------------------------------------------------------------- Classification of Dividends and Distributions to Shareholders. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes primarily because of paydown gains and losses and the 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 paid-in capital of $1,424,384, an increase in undistributed net investment income of $19,658,848, and an increase in accumulated net realized loss on investments of $18,234,464. 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 Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies, as revised, effective for fiscal years beginning after December 15, 2000. The Fund elected to begin amortizing premiums on debt securities effective January 1, 2001. Prior to this date, the Fund did not amortize premiums on debt securities. The cumulative effect of this accounting change had no impact on the total net assets of the Fund, but resulted in a $626,077 decrease to cost of securities and a corresponding $626,077 decrease in net unrealized depreciation, based on securities held as of December 31, 2000. For the year ended December 31, 2001, interest income decreased by $765,376, net realized loss on investments increased by $658,179, and the change in net unrealized appreciation on investments increased by $1,423,555. 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 Strategic Bond Fund/VA 33 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(1) Year Ended December 31, 2000 --------------------------------- ----------------------------- Shares Amount Shares Amount - -------------------------------------------------------------------------------------------------------------------- Non-Service shares Sold 21,317,660 $ 98,459,684 20,188,925 $ 95,290,874 Dividends and/or distributions reinvested 4,374,282 20,045,483 4,957,115 23,001,014 Redeemed (14,476,879) (66,553,403) (16,965,820) (80,420,504) ----------- ------------ ----------- ------------ Net increase (decrease) 11,215,063 $ 51,951,764 8,180,220 $ 37,871,384 =========== ============ =========== ============ Service shares Sold 1,191 $ 5,626 -- $ -- Dividends and/or distributions reinvested -- -- -- -- Redeemed (349) (1,643) -- -- ----------- ------------ ----------- ------------ Net increase (decrease) 842 $ 3,983 -- $ -- =========== ============ =========== ============
1. For the year ended December 31, 2001, for Non-Service shares and for the period from March 19, 2001 (inception of offering) to December 31, 2001, 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 $480,439,030 and $403,901,762, respectively. As of December 31, 2001, unrealized appreciation (depreciation) based on cost of securities for federal income tax purposes of $475,031,331 was: Gross unrealized appreciation $ 12,214,128 Gross unrealized depreciation (39,782,508) ------------ Net unrealized appreciation (depreciation) $(27,568,380) ============ =============================================================================== 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, 0.60% on the next $200 million and 0.50% of average annual net assets over $1 billion. The Fund's management fee for the year ended December 31, 2001, was an annualized rate of 0.74%. - ------------------------------------------------------------------------------- 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. 34 Oppenheimer Strategic Bond Fund/VA Notes to Financial Statements (Continued) - ------------------------------------------------------------------------------- 4. Fees and Other Transactions with Affiliates (continued) 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 Unrealized Contract Description Dates Amount (000s) December 31, 2001 Appreciation Depreciation - ----------------------------------------------------------------------------------------------------------------------------- Contracts to Purchase - --------------------- British Pound Sterling (GBP) 1/22/02 365 GBP $ 530,490 $14,380 $ -- ------- -------- Contracts to Sell - ----------------- British Pound Sterling (GBP) 1/7/02 1,735 GBP 2,524,013 -- 74,714 Canadian Dollar (CAD) 2/21/02 935 CAD 585,533 7,309 -- Deutsche Bank AG, Philippines Peso Linked Nts., Swap (EUR) 12/7/06 417 USD (985) -- 985 Euro (EUR) 1/14/02-1/15/02 8,075 EUR 7,185,656 -- 83,755 ------- -------- 7,309 159,454 ------- -------- Total Unrealized Appreciation and Depreciation $21,689 $159,454 ======= ========
Oppenheimer Strategic Bond Fund/VA 35 Notes to Financial Statements (Continued) =============================================================================== 6. Futures Contracts A futures contract is a commitment to buy or sell a specific amount of a commodity or financial instrument at a particular price on a stipulated future date at a negotiated price. Futures contracts are traded on a commodity exchange. The Fund may buy and sell futures contracts that relate to broadly based securities indices "financial futures" or debt securities "interest rate futures" in order to gain exposure to or to seek to protect against changes in market value of stock and bonds or interest rates. The Fund may also buy or write put or call options on these futures contracts. The Fund generally sells futures contracts to hedge against increases in interest rates and decreases in market value of portfolio securities. The Fund may also purchase futures contracts to gain exposure to market changes as it may be more efficient or cost effective than actually buying fixed income securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. The Statement of Assets and Liabilities reflects a receivable and/or payable for the daily mark to market for variation margin. Realized gains and losses are reported on the Statement of Operations as closing and expiration of futures contracts. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. As of December 31, 2001, the Fund had outstanding futures contracts as follows:
Unrealized Expiration Number of Valuation as of Appreciation Contract Description Dates Contracts December 31, 2001 (Depreciation) - ---------------------------------------------------------------------------------------- Contracts to Purchase - --------------------- Euro-Bundesobligation 3/7/02 14 $1,331,201 $ (14,327) U.S. Long Bond 3/19/02 69 7,005,656 (126,680) U.S. Treasury Nts., 5 yr. 3/19/02 28 2,963,188 (19,313) U.S. Treasury Nts., 10 yr. 3/19/02 55 5,782,734 (80,859) --------- (241,179) --------- Contracts to Sell - ----------------- United Kingdom Long Gilt 3/26/02 8 1,313,586 18,339 --------- $(222,840) ========= ==========================================================================================
7. Option Activity The Fund may buy and sell put and call options, or write put and covered call options on portfolio securities in order to produce incremental earnings or protect against changes in the value of portfolio securities. The Fund generally purchases put options or writes covered call options to hedge against adverse movements in the value of portfolio holdings. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon the expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of the security for a purchased put or call option is adjusted by the amount of premium received or paid. 36 Oppenheimer Strategic Bond Fund/VA Notes to Financial Statements (Continued) =============================================================================== 7. Option Activity (continued) Securities designated to cover outstanding call options are noted in the Statement of Investments where applicable. Shares subject to call, expiration date, exercise price, premium received and market value are detailed in a note to the Statement of Investments. Options written are reported as a liability in the Statement of Assets and Liabilities. Realized gains and losses are reported in the Statement of Operations. The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Written option activity for the year ended December 31, 2001, was as follows:
Call Options Put Options ------------------------------- --------------------------------- Principal (000s)/ Amount of Principal (000s)/ Amount of Number of Contracts Premiums Number of Contracts Premiums - -------------------------------------------------------------------------------------------------------- Options outstanding as of December 31, 2000 275 $ 8,524 872 $ 41,018 Options written 1,946,894 687,691 308,061,930 123,167 Options closed or expired (54,265) (312,665) (308,062,802) (164,185) Options exercised (1,878,795) (53,643) -- -- ---------- --------- ------------ --------- Options outstanding as of December 31, 2001 14,109 $ 329,907 -- $ -- ========== ========= ============ =========
================================================================================ 8. Illiquid or Restricted Securities As of December 31, 2001, investments in securities included issues that are illiquid or restricted. Restricted securities are often purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Trustees as reflecting fair value. A security may also be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 15% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limitation. The aggregate value of illiquid or restricted securities subject to this limitation as of December 31, 2001, was $22,212,631, which represents 6.32% of the Fund's net assets, of which $231,748 is considered restricted. Information concerning restricted securities is as follows:
Unrealized Acquisition Valuation as of Appreciation Security Dates Cost December 31, 2001 (Depreciation) - ------------------------------------------------------------------------------------------------ Stocks and/or Warrants - ---------------------- Aurora Foods, Inc. 9/18/00 $ -- $ 13,415 $ 13,415 Chesapeake Energy Corp. 6/27/00 149,723 126,212 (23,511) Geotek Communications, Inc. 4/6/00 -- -- -- Geotek Communications, Inc., Series B (Escrowed) 1/4/01 840 -- (840) Real Time Data Co. Wts., Exp. 5/31/04 6/30/99 364 364 -- Currency - -------- Russian Ruble 8/8/01- 12/19/01 94,452 91,757 (2,695)
Oppenheimer Strategic Bond Fund/VA 37 Independent Auditors' Report =============================================================================== The Board of Trustees and Shareholders of Oppenheimer Strategic Bond Fund/VA: We have audited the accompanying statement of assets and liabilities of Oppenheimer Strategic Bond 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 Strategic Bond Fund/VA as of December 31, 2001, the 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 38 Oppenheimer Strategic Bond 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. Distributions of $0.2907 per share were paid to Non-Service shareholders, on March 16, 2001, all of which was designated as ordinary income for federal income tax purposes. 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 1.49% 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 Strategic Bond Fund/VA 39 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 David P. Negri, Vice President Arthur P. Steinmetz, 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 Chief Executive Officer and Trustee 1988-January 2, 2002); President and a director of Centennial Asset Management (since 1985). Age:68 Corporation, a wholly 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) Chairman, Chief Executive Officer and Director (since June 30, 2001) and President (since President and Trustee September 2000) of the Manager; President and a trustee of other Oppenheimer funds; (since 2001). Age:52 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 sub- sidiaries 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.
40 Oppenheimer Strategic Bond 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 President Trustee (since 1998) (from September 1987) and Treasurer (from March 1985) of the Manager; Vice President Age:65 (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 Trustee (since 1999) firm) and Chairman, Price Waterhouse LLP Global Investment Management Industry Age:63 Services Group (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 Strategic Bond Fund/VA 41 Officers and Trustees (Continued)
Name, Address, (1) Age, Position(s) Held Principal Occupation(s) During Past Five Years and Other Directorships Held with Fund and Length of Time Served(2) by Trustee - ---------------------------------------------------------------------------------------------------------------------------------- F. William Marshall, Jr., Trustee Formerly (until 1999) Chairman of SIS & Family Bank, F.S.B. (since 2000). Age:59 (formerly SIS Bank); 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) Peoples Heritage Financial Group, Inc.; Chairman and Chief Executive Office of Bank 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 Portfolio Senior Vice President (since April 1998) of the Manager; a Certified Financial Manager of Oppenheimer Main Street(R) Analyst; an officer and portfolio manager of other Oppenheimer funds; formerly Small Cap Fund/VA and Main Street(R) a vice presidentand portfolio manager for Guardian Investor Services, the Growth & Income Fund/VA investment management subsidiary of The Guardian Life Insurance Company (since 1999). Age:61 (1972-April 1998). - ---------------------------------------------------------------------------------------------------------------------------------- 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, Aggressive Growth Fund/VA he was a vice president and senior portfolio manager at First of America (since 1998). Age:51 Investment Corp. (September 1986-April 1995). - ---------------------------------------------------------------------------------------------------------------------------------- George Evans, Vice President and Vice President of the Manager (since October 1993) and of HarbourView Asset Portfolio Manager of Oppenheimer Management Corporation (since July 1994); an officer and portfolio manager of other Multiple Strategies Fund/VA Oppenheimer 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 Portfolio Manager of Oppenheimer of other Oppenheimer funds; a Certified Financial Analyst; formerly a Vice President Main Street(R) Growth & Income Fund/VA and portfolio manager for Guardian Investor Services, the investment management (since 1999). Age:52 subsidiary of The Guardian Life Insurance Company (1979-March 1998). - ---------------------------------------------------------------------------------------------------------------------------------- David P. Negri, Vice President and Portfolio Senior Vice President of the Manager (since May 1998) and of HarbourView Asset Manager of Oppenheimer Bond Fund/VA, Management Corporation (since April 1999); an officer and portfolio manager of other High Income Fund/VA, Multiple Strategies Oppenheimer funds; formerly Vice President of the Manager (July 1988-May 1998). 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 Portfolio Manager of Oppenheimer manager of another Oppenheimer fund; before joining the Manager in May 1994, Capital Appreciation Fund/VA she was a portfolio manager and equity research analyst for Chemical Bank (since 1994). Age:40 (June 1989-May 1994). - ---------------------------------------------------------------------------------------------------------------------------------- Thomas P. Reedy, Vice President and Vice President of the Manager (since June 1993) and of HarbourView Asset Portfolio Manager of Oppenheimer Management Corporation (since April 1999); an officer and portfolio manager of other High Income Fund/VA Oppenheimer funds. (since 1998). Age:39 - ---------------------------------------------------------------------------------------------------------------------------------- Richard H. Rubinstein, Vice President and Senior Vice President (since October 1995) of the Manager; an officer and portfolio Portfolio Manager of Oppenheimer Multiple manager of another Oppenheimer fund; formerly a vice president of the Manager Strategies Fund/VA (since 1991). Age:53 (June 1990-October 1995).
42 Oppenheimer Strategic Bond Fund/VA Officers and Trustees (Continued)
Name, Address, (1) Age, Position(s) Held Principal Occupation(s) During Past Five Years and Other Directorships Held with Fund and Length of Time Served(2) by Trustee - -------------------------------------------------------------------------------------------------------------------------------- Arthur P. Steinmetz, Vice President and Senior Vice President of the Manager (since March 1993) and of HarbourView Asset Portfolio Manager of Oppenheimer Strategic Management Corporation (since March 2000); an officer and portfolio manager of other Bond Fund/VA (since 1993). Age:43 Oppenheimer funds. - -------------------------------------------------------------------------------------------------------------------------------- Susan Switzer, Vice President and Portfolio Vice President of the Manager (since December 2000); Assistant Vice President of the Manager of Oppenheimer Multiple Manager (December 1997-December 2000). Prior to joining the Manager, she was a Strategies Fund/VA (since 2001). Age:35 portfolio manager at Neuberger Berman (November 1994-November 1997). - -------------------------------------------------------------------------------------------------------------------------------- James F. Turner, II, Vice President and Vice President and Portfolio Manager of the Manager since March 26, 2001; Portfolio Portfolio Manager of Oppenheimer Manager for Technology Crossover Ventures (May 2000-March 2001); Assistant Vice Aggressive Growth Fund/VA President and Associate Portfolio Manager of the Manager (August 1999-May 2000); (since 2001). Age:34 Securities Analyst 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 and Portfolio Vice President of the Manager (since July 2001); an officer and portfolio manager Manager of Oppenheimer Money Fund/VA of other Oppenheimer funds; formerly Assistant Vice President and Senior Credit (since 2001). Age:37 Analyst of the Manager (February 2000-June 2001). Prior to joining the Manager in February 2000, he 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 and Senior Vice President of the Manager (since July 1994) and of HarbourView Asset Portfolio Manager of Oppenheimer Management Corporation (since May 1999); Senior Investment Officer, Director of Global Securities Fund/VA (since 1995). International Equities (since May 2000) of the Manager; an officer and portfolio 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 Portfolio Senior Vice President of the Manager; an officer and portfolio manager of other Manager of Oppenheimer Money Fund/VA Oppenheimer funds; formerly Vice President of the Manager (June 1990-June 2000). (since 1998). Age:50 - -------------------------------------------------------------------------------------------------------------------------------- Mark Zavanelli, Vice President and Assistant Vice President (since May 1998) of the Manager; a Chartered Financial Portfolio Manager of Oppenheimer Analyst; an officer and portfolio manager of other Oppenheimer funds. Prior to Main Street Small Cap Fund/VA joining the Manager in May 1998 he was President of Waterside Capital Management, (since 2001). Age:31 a registered 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 Secretary (since 2001). Age:53 (since November 2001) 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 Treasurer (since 1999). Age:42 (since 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 Strategic Bond Fund/VA 43 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 Secretary Vice President and Senior Counsel of the Manager (since July 1999); Vice President of (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 Secretary Vice President and Assistant Counsel of the Manager (since June 1998); an officer of other (since 2001). Age:36 Oppenheimer funds; formerly an assistant vice president and assistant counsel of the Manager (August 1994-August 1997). - ------------------------------------------------------------------------------------------------------------------------------- Denis R. Molleur, Assistant Secretary Vice President and Senior Counsel of the Manager (since July 1999); an officer of other (since 2001). Age:44 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 otheret 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. 44 Oppenheimer Strategic Bond Fund/VA (This Page Intentionally Left Blank) (This Page Intentionally Left Blank) (This Page Intentionally Left Blank) Oppenheimer Strategic Bond 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 Strategic Bond Fund/VA, please refer to the Prospectus. To obtain a copy, call your financial advisor, or call OppenheimerFunds, Inc. at 1.800.981.2871.
[logo] OppenheimerFunds(R) Distributor Inc. (C)Copyright 2002 OppenheimerFunds, Inc. All rights reserved -----END PRIVACY-ENHANCED MESSAGE-----