-------------------------------
Semiannual Report June 30, 1999
-------------------------------
International
Equity Portfolio
A Series of Panorama Series Fund, Inc.
[logo]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
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Panorama Series Fund, Inc.--International Equity Portfolio
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================================================================================
Objective
Panorama Series Fund, Inc.--International Equity Portfolio seeks long-term
growth of capital by investing primarily in equity securities of worldwide
companies whose primary stock market is located outside of the United States.
================================================================================
Narrative by Portfolio Managers
The International Equity Portfolio provided a cumulative total return of 1.99%
for the six-month period that ended June 30, 1999.(1)
Perhaps the most notable development in international markets took
place in Asia, where it appears that the worst of the global financial crisis is
over. Many of the emerging markets of Southeast Asia appear to be serious about
implementing much-needed reforms to their financial systems, which has
encouraged foreign investors to once again commit capital to the region.
We have noted with interest that many corporate executives in Japan
have begun to change the way they run their businesses. For the first time since
World War II, some Japanese management teams are restructuring their companies
to become more efficient, productive and profitable. This restructuring process
is similar to the changes implemented by many U.S. companies in the 1980s and
many European companies earlier this decade. Japanese companies are reducing
staff, selling non-core or unprofitable businesses, allocating capital more
effectively and focusing more intently on shareholder value. While the effects
of these forces have not yet been reflected in Japan's economy, which remains in
recession, the Japanese stock market rallied strongly during the first half of
the year.
As a group, European stock markets recorded modest gains in local
currency terms over the past six months. Because of weakness in the euro
relative to the U.S. dollar, however, the European stock markets' returns
overall were modestly negative for U.S. investors. The euro's relative weakness
was primarily the result of Europe's slow rate of economic growth compared to
robust growth in the United States. In addition, political instability in key
nations such as Germany and the war in Kosovo helped make equity investors
cautious.
As a result of these economic influences, European investors began to
show renewed interest in smaller and value-oriented stocks. With long-term
interest rates no longer at historically low levels in Europe and growth stocks
near historically high valuations, investors began to turn their attention to
stocks selling at inexpensive prices. As a result, many European value stocks
began to outperform growth stocks during the second half of the reporting
period.
In this changing environment, we substantially altered our allocation
of portfolio assets among international markets. Over the last six months, we
found more companies in Japan and fewer in Europe that we believed represented
truly compelling investment opportunities. As a result, we added several
companies in Japan to the portfolio. We also sold an equivalent amount of
investments in European companies that had either met our target prices or
appeared less attractive when compared to the new opportunities. As a result of
these changes, the amount of assets allocated to European companies declined
from about 76% of our international portfolio at the start of the six-month
period to about 64% at the end of the period. Conversely, our allocation to
Japanese investments rose from about 13% of our international portfolio to
approximately 22%. We continue to have no direct exposure to the emerging
markets in Asia and Latin America because of poor economic conditions there.
Because the stock market can be volatile, the Fund's performance may be subject
to substantial short-term changes. For updates on the Fund's performance, please
contact your financial advisor, call us at 1-800-525-7048 or visit our website,
www.oppenheimerfunds.com.
1. Includes changes in net asset value per share and does not include the
charges associated with the separate account products which offer this Fund.
Such performance is not annualized and would have been lower if such charges
were taken into account.
2 International Equity Portfolio
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Panorama Series Fund, Inc.--International Equity Portfolio
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================================================================================
We took advantage of the shift in investor sentiment by expanding our focus in
Europe from large-cap companies to mid-cap companies. That's because mid-cap
companies had not participated in the market's 1998 advances. We believed that
some of the best-managed companies in the mid-cap range were poised to benefit
greatly from renewed investor interest. In addition, we reduced our exposure to
Germany, where the economy is slow, and increased our holdings of stocks in
higher growth markets where we have focused on companies that we believe are
likely to benefit from strong consumer spending.
As for the future, we remain cautiously optimistic. We are hopeful that
investors' single-minded focus on large growth companies is past, and that
solid, value-oriented companies will receive the attention that we believe they
deserve. Regardless of what happens in the global economy, however, we intend to
continue to adhere to our longstanding investment discipline. In our view, that
discipline is an important part of what makes OppenheimerFunds The Right Way
to Invest.
International Equity Portfolio 3
<PAGE>
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Statement of Investments June 30, 1999 (Unaudited)
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<TABLE>
<CAPTION>
Market Value
Shares Note 1
================================================================================
<S> <C> <C>
Common Stocks--96.9%
================================================================================
Basic Materials--0.7%
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Chemicals--0.7%
Fuji Photo Film Co. 19,000 $ 718,959
================================================================================
Capital Goods--14.4%
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Electrical Equipment--2.0%
ABB Ltd.(1) 11,347 1,069,309
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Toshiba Corp. 138,000 983,954
----------
2,053,263
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Industrial Services--5.3%
Capita Group plc 116,000 1,200,415
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Hays plc 128,000 1,348,808
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Ibiden Co. Ltd. 40,000 660,959
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Secom Co. Ltd. 13,000 1,353,315
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Securitas AB, B Shares 53,000 791,720
----------
5,355,217
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Manufacturing--7.1%
Atlas Copco AB, B Shares 25,000 670,451
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BBA Group plc 142,000 1,090,074
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Brambles Industries Ltd. 33,000 869,368
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Mannesmann AG 15,000 2,243,019
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Smiths Industries plc 73,000 964,286
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Taiyo Yuden Co. 80,000 1,312,665
----------
7,149,863
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Communication Services--12.5%
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Telecommunications: Long Distance--7.9%
Asia Satellite Telecommunications Holdings Ltd. 360,000 846,801
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Ericsson LM, B Shares 35,000 1,121,829
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KPN NV 20,000 938,459
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Matsushita Communication Industrial Co. 16,000 1,143,460
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Nippon Comsys Corp. 50,000 811,741
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Nokia Oyj 16,000 1,402,532
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NTT Mobile Communications Network, Inc. 92 1,246,570
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Telecom Italia SpA(1) 47,500 493,774
----------
8,005,166
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Telephone Utilities--4.6%
Cable & Wireless Communications plc(1) 112,000 1,076,928
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Hellenic Telecommunication Organization SA 26,000 557,302
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Tele Danmark A/S 32,000 1,575,132
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Telefonica de Espana(1) 31,212 1,503,506
----------
4,712,868
4 International Equity Portfolio
<PAGE>
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Statement of Investments (Unaudited) (Continued)
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Market Value
Shares Note 1
====================================================================================
Consumer Cyclicals--12.8%
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Autos & Housing--4.7%
Bridgestone Corp. 22,000 $ 665,256
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Lafarge SA 7,000 665,584
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Overseas Union Enterprise Ltd. 213,500 677,194
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Suzuki Motor Corp. 83,000 1,320,060
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Valeo SA 18,000 1,485,034
----------
4,813,128
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Leisure & Entertainment--1.2%
Nintendo Co. Ltd. 8,400 1,180,507
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Media--2.5%
VNU-Verenigde Nederlandse Uitgeverbedrijven Verenigd Bezit 35,000 1,398,664
- ------------------------------------------------------------------------------------
Wolters Kluwer NV 28,000 1,114,600
----------
2,513,264
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Retail: General--1.8%
Circle K Japan Co. Ltd. 20,200 841,137
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Ito-Yokado Co. Ltd. 15,000 1,003,832
----------
1,844,969
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Retail: Specialty--2.6%
Hennes & Mauritz AB (H&M), B Shares(1) 60,000 1,482,049
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Kingfisher plc(1) 98,000 1,127,685
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2,609,734
====================================================================================
Consumer Staples--8.8%
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Entertainment--1.0%
Shaw Brothers (Hong Kong) Ltd. 1,470,000 1,004,175
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Food--3.3%
Groupe Danone 6,000 1,546,910
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Jeronimo Martins & Filho SA 26,666 880,823
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Kerry Group plc, Cl. A 75,000 889,473
----------
3,317,206
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Food & Drug Retailers--3.7%
Colruyt SA(1) 1,500 986,929
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Koninklijke Ahold NV 45,000 1,550,004
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William Morrison Supermarkets plc 524,000 1,189,413
----------
3,726,346
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Household Goods--0.8%
L'Oreal 1,200 811,200
====================================================================================
Energy--2.9%
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Oil: International--2.9%
Shell Transport & Trading Co. plc 195,000 1,462,353
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Total SA, B Shares(1) 11,157 1,439,390
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2,901,743
International Equity Portfolio 5
<PAGE>
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Statement of Investments (Unaudited) (Continued)
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Market Value
Shares Note 1
==============================================================
Financial--16.3%
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Banks--5.8%
Argentaria SA 30,000 $ 683,425
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Banca Poplare di Brescia 10,000 428,494
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Banco Popular Espanol SA 9,000 647,382
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Bank Handlowy W Warszawie, GDR(1)(2) 28,000 443,800
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Bank of Scotland(1) 68,000 900,382
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Lloyds TSB Group plc 108,000 1,464,067
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Nordbanken Holding AB 220,000 1,286,089
----------
5,853,639
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Diversified Financial--6.7%
Cattles plc 220,000 1,189,476
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Credit Saison Co. Ltd. 46,000 961,531
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ING Groep NV 20,000 1,082,837
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Lend Lease Corp. Ltd. 45,000 617,861
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Northern Rock plc 133,000 1,002,117
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Perlis Plantations Berhad(3) 175,000 204,474
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Promise Co. Ltd. 18,000 1,063,319
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Swire Pacific Ltd., Cl. B 880,000 657,850
----------
6,779,465
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Insurance--3.8%
AEGON NV 13,000 943,151
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Assicurazioni Generali SpA 30,000 1,039,523
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AXA SA 10,000 1,219,996
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Irish Life & Permanent plc 60,850 643,218
----------
3,845,888
==============================================================
Healthcare--14.2%
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Healthcare/Drugs--8.4%
Fresenius AG, Preference 7,000 1,227,215
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Gedeon Richter Ltd., GDR(2) 15,000 656,250
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Glaxo Wellcome plc 43,000 1,194,977
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Novartis AG 850 1,241,164
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Pliva d.d., Sponsored GDR(2) 30,000 451,500
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Sanofi-Synthelabo SA(1) 40,000 1,697,476
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Schering AG 8,000 854,719
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Takeda Chemical Industries Ltd. 25,000 1,158,745
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8,482,046
6 International Equity Portfolio
<PAGE>
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Statement of Investments (Unaudited) (Continued)
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Market Value
Shares Note 1
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Healthcare/Supplies & Services--5.8%
Hoya Corp. 12,000 $ 677,153
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Luxottica Group SpA, Sponsored ADR 75,000 1,167,187
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Olympus Optical Co. Ltd. 99,000 1,463,290
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SmithKline Beecham plc 106,000 1,377,639
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Terumo Corp. 53,000 1,180,102
------------
5,865,371
==============================================================================================================
Technology--10.1%
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Computer Software--1.8%
Getronics NV 30,000 1,153,995
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Logica plc 61,000 641,349
------------
1,795,344
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Communications Equipment--1.9%
Vodafone Group plc, Sponsored ADR 10,000 1,970,000
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Electronics--6.4%
Bowthorpe plc 140,000 1,229,199
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Electrocomponents plc 161,000 1,188,979
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Hoshiden Corp. 65,000 1,401,647
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Sony Corp. 13,000 1,401,647
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VTech Holdings Ltd. 400,000 1,270,846
------------
6,492,318
==============================================================================================================
Transportation--0.9%
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Air Transportation--0.9%
BAA plc 97,000 932,697
==============================================================================================================
Utilities--3.3%
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Electric Utilities--2.6%
CLP Holdings Ltd. 135,000 655,981
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Endesa SA 35,000 746,436
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Vivendi (Ex-Generale des Eaux) 14,727 1,192,983
------------
2,595,400
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Gas Utilities--0.7%
Hong Kong & China Gas Co. Ltd. 495,000 717,751
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Total Common Stocks (Cost $74,955,947) 98,047,527
<CAPTION>
Principal
Amount
==============================================================================================================
Repurchase Agreements--3.1%
- --------------------------------------------------------------------------------------------------------------
Repurchase agreement with PaineWebber, Inc., 4.80%, dated 6/30/99,
to be repurchased at $3,200,427 on 7/1/99, collateralized by U.S. Treasury Nts.,
4.625%-9.25%, 11/30/00-2/15/16, with a value of $3,271,621 (Cost $3,200,000) $3,200,000 3,200,000
- --------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $78,155,947) 100.0% 101,247,527
- --------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.0) (38,310)
---------- ------------
Net Assets 100.0% $101,209,217
========== ============
</TABLE>
International Equity Portfolio 7
<PAGE>
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Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Distribution of investments representing geographic diversification, as a
percentage of total investments at value, is as follows:
<TABLE>
<CAPTION>
Geographic Diversification Market Value Percent
- ------------------------------------------------------------------------
<S> <C> <C>
Great Britain $ 22,550,846 22.3%
- ------------------------------------------------------------------------
Japan 22,549,848 22.3
- ------------------------------------------------------------------------
France 10,058,572 9.9
- ------------------------------------------------------------------------
The Netherlands 8,181,710 8.1
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Sweden 5,352,137 5.3
- ------------------------------------------------------------------------
Hong Kong 5,153,403 5.1
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Germany 4,324,954 4.3
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Spain 3,580,749 3.5
- ------------------------------------------------------------------------
United States 3,200,000 3.2
- ------------------------------------------------------------------------
Italy 3,128,979 3.1
- ------------------------------------------------------------------------
Switzerland 2,310,473 2.3
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Denmark 1,575,132 1.5
- ------------------------------------------------------------------------
Ireland 1,532,691 1.5
- ------------------------------------------------------------------------
Australia 1,487,229 1.4
- ------------------------------------------------------------------------
Finland 1,402,532 1.4
- ------------------------------------------------------------------------
Belgium 986,929 1.0
- ------------------------------------------------------------------------
Portugal 880,823 0.9
- ------------------------------------------------------------------------
Singapore 677,194 0.7
- ------------------------------------------------------------------------
Hungary 656,250 0.6
- ------------------------------------------------------------------------
Greece 557,302 0.6
- ------------------------------------------------------------------------
Croatia 451,500 0.4
- ------------------------------------------------------------------------
Poland 443,800 0.4
- ------------------------------------------------------------------------
Malaysia 204,474 0.2
------------ -----
Total $101,247,527 100.0%
============ =====
</TABLE>
1. Non-income producing security.
2. 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
Directors. These securities amount to $1,551,550 or 1.53% of the Fund's net
assets as of June 30, 1999.
3. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
See accompanying Notes to Financial Statements.
8 International Equity Portfolio
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
===========================================================================================
<S> <C>
Assets
Investments, at value (cost $78,155,947)--see accompanying statement $101,247,527
- -------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 659,974
Interest and dividends 191,578
Shares of capital stock sold 1,867
Other 1,545
------------
Total assets 102,102,491
===========================================================================================
Liabilities
Bank overdraft 564,438
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Payables and other liabilities:
Shares of capital stock redeemed 258,812
Investments purchased 48,079
Shareholder reports 12,589
Custodian fees 2,241
Trustees' compensation 70
Other 7,045
------------
Total liabilities 893,274
===========================================================================================
Net Assets $101,209,217
============
===========================================================================================
Composition of Net Assets
Par value of shares of capital stock $ 64,749
- -------------------------------------------------------------------------------------------
Additional paid-in capital 74,845,005
- -------------------------------------------------------------------------------------------
Undistributed net investment income 273,624
- -------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 2,939,720
- -------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 23,086,119
------------
Net assets--applicable to 64,748,701 shares of capital stock outstanding $101,209,217
============
===========================================================================================
Net Asset Value, Redemption Price Per Share and Offering Price Per Share $1.56
</TABLE>
See accompanying Notes to Financial Statements.
International Equity Portfolio 9
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
=====================================================================================
<S> <C>
Investment Income
Dividends (net of foreign withholding taxes of $70,635) $ 757,095
- -------------------------------------------------------------------------------------
Interest 58,341
----------
Total income 815,436
=====================================================================================
Expenses
Management fees--Note 4 501,530
- -------------------------------------------------------------------------------------
Custodian fees and expenses 14,229
- -------------------------------------------------------------------------------------
Accounting service fees--Note 4 7,605
- -------------------------------------------------------------------------------------
Shareholder reports 6,667
- -------------------------------------------------------------------------------------
Legal, auditing and other professional fees 6,094
- -------------------------------------------------------------------------------------
Trustees' compensation 1,441
- -------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 1,069
- -------------------------------------------------------------------------------------
Insurance expenses 1,040
- -------------------------------------------------------------------------------------
Other 181
----------
Total expenses 539,856
Less expenses paid indirectly--Note 1 (1,567)
----------
Net expenses 538,289
=====================================================================================
Net Investment Income 277,147
=====================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments 5,099,143
Foreign currency transactions (383,618)
----------
Net realized gain 4,715,525
- -------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 2,467,223
Translation of assets and liabilities denominated in foreign currencies (5,276,296)
----------
Net change (2,809,073)
----------
Net realized and unrealized gain 1,906,452
=====================================================================================
Net Increase in Net Assets Resulting from Operations $2,183,599
==========
</TABLE>
See accompanying Notes to Financial Statements.
10 International Equity Portfolio
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1999 December 31,
(Unaudited) 1998
==================================================================================================
<S> <C> <C>
Operations
Net investment income $ 277,147 $ 646,134
- --------------------------------------------------------------------------------------------------
Net realized gain 4,715,525 228,469
- --------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (2,809,073) 14,941,247
----------- ------------
Net increase in net assets resulting
from operations 2,183,599 15,815,850
==================================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income (580,211) (404,500)
- --------------------------------------------------------------------------------------------------
Distributions from net realized gain (1,992,059) (2,680,566)
==================================================================================================
Capital Stock Transactions
Net increase (decrease) in net assets resulting from
capital stock transactions--Note 2 (1,805,860) 8,415,516
==================================================================================================
Net Assets
Total increase (decrease) (2,194,531) 21,146,300
- --------------------------------------------------------------------------------------------------
Beginning of period 103,403,748 82,257,448
------------ ------------
End of period (including undistributed net investment income of
$273,624 and $576,688, respectively) $101,209,217 $103,403,748
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
International Equity Portfolio 11
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
June 30, 1999 Year Ended December 31,
(Unaudited) 1998 1997 1996(1) 1995 1994
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $1.57 $1.36 $1.29 $1.15 $1.09 $1.09
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) -- .01 .01 .02 .03 (.01)
Net realized and unrealized gain .03 .25 .09 .13 .08 .03
- -------------------------------------------------------------------------------------------------------------------------------
Total income from investment operations .03 .26 .10 .15 .11 .02
- -------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.01) (.01) (.01) (.01) (.04) --
Distributions from net realized gain (.03) (.04) (.02) -- (.01) (.02)
- -------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.04) (.05) (.03) (.01) (.05) (.02)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.56 $1.57 $1.36 $1.29 $1.15 $1.09
===== ===== ===== ===== ===== =====
===============================================================================================================================
Total Return, at Net Asset Value(2) 1.99% 19.40% 8.11% 13.26% 10.30% 1.44%
===============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $101,209 $103,404 $82,257 $62,585 $45,775 $31,603
- -------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $101,126 $ 94,651 $73,318 $56,893 $37,474(3) $29,133(3)
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) 0.55% 0.68% 0.72% 0.76% 1.61% (1.85)%
Expenses(5) 1.07% 1.09% 1.12% 1.21% 1.26% 1.28%
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 21% 48% 49% 54% 85% 77%
</TABLE>
1. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor to the
Fund.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or commencement of operations), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Total returns are not annualized for periods less than one
full year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of these
charges would reduce the total return figures for all periods shown.
3. This information is not covered by the auditors' opinion.
4. Annualized for periods less than one full year.
5. Beginning in fiscal 1995, the expense ratio reflects the effect of expenses
paid indirectly by the Fund. Prior year expense ratios have not been adjusted.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1999, were $20,664,160 and $24,993,551, respectively.
See accompanying Notes to Financial Statements.
12 International Equity Portfolio
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies
International Equity Portfolio (the Fund) is a series of Panorama Series Fund,
Inc. (the Company) which is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company. The Fund's
investment objective is to seek long-term growth of capital by investing under
normal circumstances, at least 90% of its assets in equity securities of
companies wherever located, the primary stock market of which is outside the
United States. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager). Shares of the Fund are sold only to separate accounts of life
insurance companies, a majority of such shares are held by separate accounts of
Massachusetts Mutual Life Insurance Co., an affiliate of the investment advisor.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Foreign currency exchange contracts are valued based on the
closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
- --------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments
is separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Distributions to shareholders, which are
determined in accordance with income tax regulations, are recorded on the
ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of paydown gains and losses and the recognition of certain
foreign currency gains (losses) as ordinary income (loss) for tax purposes. The
character of distributions made during the year from net investment income or
net realized gains may differ from its ultimate characterization for federal
income tax purposes. Also, due to timing of dividend distributions, the fiscal
year in which amounts are distributed may differ from the fiscal year in which
the income or realized gain was recorded by the Fund.
International Equity Portfolio 13
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Foreign dividend income is often
recorded on the payable date. Realized gains and losses on investments and
unrealized appreciation and depreciation are determined on an identified cost
basis, which is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
2. Shares of Capital Stock
The Fund has authorized 200 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Six Months Ended June 30, 1999 Year Ended December 31, 1998
------------------------------ -----------------------------
Shares Amount Shares Amount
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 5,921,540 $ 9,162,716 13,905,772 $ 20,648,894
Dividends and distributions reinvested 1,703,490 2,572,270 2,070,514 3,085,066
Redeemed (8,771,256) (13,540,846) (10,459,749) (15,318,444)
---------- ------------ ----------- ------------
Net increase (decrease) (1,146,226) $ (1,805,860) 5,516,537 $ 8,415,516
========== ============ =========== ============
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Securities
As of June 30, 1999, net unrealized appreciation on investments of $23,091,580
was composed of gross appreciation of $26,499,764, and gross depreciation of
$3,408,184.
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 1.00% of the first
$250 million of average daily net assets of the Fund and 0.90% of average daily
net assets in excess of $250 million. The Fund's management fee for the six
months ended June 30, 1999, was 1.00% of average annual net assets.
The Manager acts as the accounting agent for the Fund at an annual fee
of $15,000, plus out-of-pocket costs and expenses reasonably incurred.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer agent for the Fund and is responsible for maintaining the shareholder
registry and shareholder accounting records for the Fund. OFS provides these
services at cost.
The Manager has a sub-advisory agreement with Babson-Stewart Ivory
International (the Sub-Advisor) to assist in the selection of portfolio
investments for the components of the Fund. For these services, the Manager pays
Babson-Stewart Ivory International negotiated fees.
14 International Equity Portfolio
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
5. Foreign Currency Contracts
A foreign currency exchange contract is a commitment to purchase or sell a
foreign currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency exchange contracts for operational purposes and to seek to
protect against adverse exchange rate fluctuation. Risks to the Fund include the
potential inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency exchange
rates as provided by a reliable bank, dealer or pricing service. Unrealized
appreciation and depreciation on foreign currency contracts are reported in the
Statement of Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement of
the foreign currency transactions. Realized gains and losses are reported with
all other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of Investments
where applicable.
================================================================================
6. Illiquid or Restricted Securities
As of June 30, 1999, investments in securities included issues that are
illiquid. A security may 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 securities. Certain
restricted securities, eligible for resale to qualified institutional investors,
are not subject to that limit. The aggregate value of illiquid or restricted
securities subject to this limitation as of June 30, 1999 was $204,474, which
represents 0.20% of the Fund's net assets.
International Equity Portfolio 15
<PAGE>
- --------------------------------------------------------------------------------
International Equity Portfolio
- --------------------------------------------------------------------------------
A Series of Panorama Series Fund, Inc.
<TABLE>
=============================================================================================
<S> <C>
Officers and Directors James C. Swain, Chairman of the Board of Directors
Bridget A. Macaskill, President
Robert G. Avis, Director
William A. Baker, Director
Jon S. Fossel, Director
Sam Freedman, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
Peter M. Antos, Vice President
Stephen F. Libera, Vice President
Michael C. Strathearn, Vice President
Kenneth B. White, Vice President
Arthur J. Zimmer, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
=============================================================================================
Investment Advisor OppenheimerFunds, Inc.
=============================================================================================
Sub-Advisor Babson-Stewart Ivory International
=============================================================================================
Transfer Agent OppenheimerFunds Services
=============================================================================================
Custodian of Portfolio Securities Bank of New York
=============================================================================================
Independent Auditors Deloitte & Touche LLP
=============================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have been
taken from the records of the Fund without
examination of the independent auditors.
This is a copy of a report to shareholders of
International Equity Portfolio. This report must be
preceded or accompanied by a Prospectus of
International Equity Portfolio. For material
information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, are not insured by the FDIC or any other
agency, and involve investment risks, including the
possible loss of the principal amount invested.
</TABLE>
16 International Equity Portfolio
