INTERNATIONAL EQUITY PORTFOLIO
A SERIES OF PANORAMA SERIES FUND, INC.
Supplement dated October 1, 1999 to the
Prospectus dated April 30, 1999
The Prospectus is changed as follows:
1. The name of the Fund is changed to "ppenheimer International Growth
Fund/VA" and all references in the Prospectus to the "Portfolio" are
changed to the "Fund". All references in the Prospectus to "Sub-Advisor"
are changed to "Manager" and all references to "Portfolio Managers" are
changed to "portfolio manager."
2. The following sentence is added after the second sentence of the cover
page: "Prior to October 1, 1999, the Fund was named International Equity
Portfolio."
3. The first sentence of the first paragraph in the section captioned "What
Does the Portfolio Invest In? - How Do the Portfolio Managers Decide What
Securities to Buy or Sell?" on page 2 is deleted and the second sentence
in that paragraph is revised by deleting the words "who are employed by
the Sub-Adviser."
4. The first sentence of the fourth paragraph in the section captioned "Main
Risks of Investing in the Portfolio" on page 3 is revised to read as
follows:
The Fund's investment Manager, OppenheimerFunds, Inc., tries to
reduce risks by carefully researching securities before they are
purchased.
5. The following sentences are added at the end of the third paragraph under
the Annual Total Return chart in the section captioned "The Portfolio's
Past Performance" on page 4:
Prior to October 1, 1999, the Fund's portfolio securities were
selected by a Sub-Advisor retained by the Manager. The Manager became
the Fund's investment advisor March 1, 1996.
6. The section captioned "The Sub-Advisor" on page 7 is deleted in its
entirety.
7. The section captioned "Portfolio Managers" on page 7 is deleted and
replaced with the following:
|X| Portfolio Manager. The portfolio manager of the Fund is George Evans.
Mr. Evans is a Vice President of the Manager and an officer and
portfolio manager of other Oppenheimer funds. Mr. Evans became
the person principally responsible for the day-to-day management
of the Fund's securities holdings, effective October 1, 1999.
Prior to October 1, 1999, the Manager had engaged a sub-advisor
to manage the Fund's portfolio.
October 1, 1999 PANPS.008
<PAGE>
(OppenheimerFunds logo)
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Oppenheimer International Growth Fund/VA
A Series of Panorama Series Fund, Inc.
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Prospectus dated April 30, 1999, Revised October 1, 1999
Oppenheimer International Growth Fund/VA is a mutual fund that seeks
long-term growth of capital. The Fund invests mainly in common stocks of foreign
companies. Prior to October 1, 1999 the Fund was named International Equity
Portfolio.
Shares of the Fund are sold only as an underlying investment for variable
life insurance policies, variable annuity contracts and other insurance company
separate accounts. A prospectus for the insurance product you have selected
accompanies this Prospectus and explains how to select shares of the Fund as an
investment under that insurance product.
This Prospectus contains important information about the Fund's objective,
its investment policies, strategies and risks. Please read this Prospectus (and
your insurance product prospectus) carefully before you invest and keep them for
future reference about your investment.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved the Fund's securities nor has it determined that this
Prospectus is accurate or complete. It is a criminal offense to represent
otherwise.
<PAGE>
Contents
About the Fund
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The Fund's Objective and Investment Strategies
Main Risks of Investing in the Fund
The Fund's Past Performance
About the Fund's Investments
How the Fund is Managed
Investing in the Fund
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How to Buy and Sell Shares
Dividends, Capital Gains and Taxes
Financial Highlights
<PAGE>
About the Fund
The Fund's Objective and Investment Strategies
What Is the Fund's Investment Objective? The Fund seeks 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.
What Does the Fund Invest In? The Fund invests mainly in common stocks of
foreign growth companies listed on foreign stock exchanges. They can include
both smaller, less-well-known companies and larger, more established companies
that the Fund managers believe have favorable prospects for capital growth
relative to the market.
The Fund does not limit its investments to issuers within a specific
market capitalization range. Although the Fund currently has an emphasis on
mid-size companies, the Fund's emphasis may change over time. It can invest up
to 25% of its total assets in emerging markets and can invest without limit in
developed markets throughout the world. The Fund may increase the relative
emphasis of its investments in one or more industries, countries, or regions
from time to time, such as Europe or Asia, for example.
The Fund can also buy preferred stocks, securities convertible into common
stocks and other securities having equity features. The Fund can invest up to
20% of its total assets in debt securities when the Fund managers believe that
it is appropriate to do so in order to seek the Fund's objective. The Fund
typically does not invest in debt securities to a significant degree. The Fund
can also use hedging instruments and certain derivative investments to try to
manage investment risks. These investments are more fully explained in "About
the Fund's Investments," below.
|X| How Does the Portfolio Manager Decide What Securities to Buy or Sell?
In selecting securities for the Fund, the portfolio manager evaluates investment
opportunities on a company-by-company basis. The portfolio manager looks
primarily for foreign companies with high growth potential using a "bottom up"
investment approach - that is, looking at the investment performance of
individual stocks before considering the impact of broad economic trends
affecting the markets. This approach includes fundamental analysis of a
company's financial statements and management structure, and analysis of the
company's operations and product development, as well as the industry of which
the issuer is part.
In seeking broad diversification of the Fund's investment holdings, the
portfolio manager currently searches for: |_| Companies that enjoy a strong
competitive position and high demand for
their products,
|_| Companies that participate in markets with substantial barriers against
entry by potential competitors,
|_| Well-financed companies that are entering a growth cycle, and |_| Companies
with consistent earnings growth and cash flow and stocks
selling at attractive prices.
In applying these and other selection criteria, the Fund managers consider
the potential effect of worldwide trends on the growth of particular business
sectors. This process and the interrelationship of the factors used by the Fund
managers may change over time and its implementation may vary in particular
cases.
Who Is the Fund Designed For? The Fund's shares are available only as an
investment option under certain variable annuity contracts, variable life
insurance policies and investment plans offered through insurance company
separate accounts of participating insurance companies, for investors seeking
capital growth in their investment over the long term from foreign stocks. Those
investors should be willing to assume the greater risks of short-term share
price fluctuations that are typical for an aggressive growth Fund focusing on
stock investments, and the special risks of investing in both emerging and
developed foreign countries. The Fund does not seek current income and the
income from its investments will likely be small, so it is not designed for
investors needing income. The Fund is not a complete investment program.
Main Risks of Investing in the Fund
All investments carry risks to some degree. The Fund's investments are
subject to changes in their value from a number of factors. Investments in
stocks can be volatile and are subject to changes in general stock market
movements (this is referred to as "market risk"). There may be events or changes
affecting particular industries (this is referred to as "industry risk") or
affecting a particular region or country that the Fund has increased its
relative emphasis on, or the change in value of a particular stock because of an
event affecting the issuer.
Stocks of growth companies may provide greater opportunities for capital
appreciation but may be more volatile than other stocks. That volatility is
likely to be even greater for companies with lower capitalizations because their
securities may not be widely traded. The Fund can buy securities of issuers in
emerging or developed foreign markets that have special risks not associated
with investments in domestic securities, such as the effects of currency
fluctuations on relative prices.
These risks collectively form the risk profile of the Fund, and can affect
the value of the Fund's investments, its investment performance and its price
per share. These risks mean that you can lose money by investing in the Fund.
When you redeem your shares, they may be worth more or less than what you paid
for them.
The Fund's investment Manager, OppenheimerFunds, Inc. tries to reduce
risks by carefully researching securities before they are purchased. The Fund
attempts to reduce its exposure to market risks by diversifying its investments,
that is, by not holding a substantial percentage of the stock of any one company
and by not investing too great a percentage of the Fund's assets in any one
issuer or any one foreign country. Also, the Fund does not concentrate 25% or
more of its assets in investments in any one industry. However, changes in the
market prices of securities can occur at any time.
The share price of the Fund will change daily based on changes in market
prices of securities and market conditions and in response to other economic
events. There is no assurance that the Fund will achieve its investment
objective.
|X| Risks of Investing in Stocks. Stocks fluctuate in price, and their
short-term volatility at times may be great. Because the Fund invests primarily
in common stocks of foreign companies, the value of the Fund's investment
holdings will be affected by changes in the foreign stock markets and the
special economic and other factors that might affect the prices of securities in
particular foreign markets. Market risk will affect the Fund's net asset value
per share, which will fluctuate as the values of the Fund's investments change.
A variety of factors can affect the price of a particular stock and the prices
of individual stocks do not all move in the same direction uniformly or at the
same time. Different stock markets may behave differently from each other.
Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer, loss of major customers, major litigation against the
issuer, or changes in government regulations affecting the issuer or its
industry.
Additionally, stocks of issuers in a particular industry may be affected
by changes in economic conditions, government regulations, availability of basic
resources or supplies, or other events that affect that industry more than
others. To the extent that the Fund increases the relative emphasis of its
investments in a particular industry, its share values can be expected to
fluctuate in response to events affecting that industry.
|X| Risks of Foreign Investing. The Fund can buy securities of companies
(or governments) in any country, including developed countries and emerging
markets. Under normal market conditions (when the Manager believes that the
stock markets are not in an unstable or volatile period) the Fund will invest at
least 90% of its total assets in equity securities of issuers located outside
the U.S. While foreign securities offer special investment opportunities, there
are also special risks.
The change in value of a foreign currency against the U.S. dollar will
result in a change in the U.S. dollar value of securities denominated in that
foreign currency. Foreign issuers are not subject to the same accounting and
disclosure requirements that U.S. companies are subject to. The value of foreign
investments may be affected by exchange control regulations, expropriation or
nationalization of a company's assets, foreign taxes, delays in settlement of
transactions, changes in governmental economic or monetary policy in the U.S. or
abroad, or other political and economic factors. To the extent that the Fund
increases the relative emphasis of its investment holdings in companies in a
particular country or region, it will be subject to the risks of political or
economic events that affect that country or region.
|_| Special Risks of Emerging Markets. Securities of issuers in emerging
markets present risks not found in more mature markets. They may be more
difficult to sell at an acceptable price and their prices may be more volatile
than securities of companies in more developed markets. Settlements of trades
may be subject to greater delays so that the Fund may not receive the proceeds
of a sale of a security on a timely basis.
These countries may have less developed trading markets and exchanges.
They may have less developed legal and accounting systems, and investments in
those markets may be subject to greater risks of government restrictions on
withdrawing the sales proceeds of securities from the country. Economies of
developing countries may be more dependent on relatively few industries that may
be highly vulnerable to local and global changes. Governments may be more
unstable and present greater risks of nationalization or restrictions on foreign
ownership of stocks of local companies. As a result of these risk factors, these
investments may be very speculative.
How Risky is the Fund Overall? In the short term, foreign stocks can be volatile
and the price of the Fund's shares can go up and down substantially. The Fund
generally does not use income-oriented investments to help cushion the Fund's
total return from changes in stock prices, except for defensive or liquidity
purposes. The Fund is generally an aggressive investment vehicle, designed for
investors willing to assume greater risks in the hope of achieving long-term
capital appreciation. It is likely to be subject to greater fluctuations in its
share prices than funds that do not invest in foreign securities (especially
emerging market securities) or funds that focus on both stocks and bonds.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
The Fund's Past Performance
The bar chart and table below show one measure of the risks of investing in the
Fund, by showing changes in the Fund's performance from year to year for the
full calendar years since the Fund's inception and by showing how the average
annual total returns of the Fund's shares compare to those of a broad-based
market index. The Fund's past investment performance is not necessarily an
indication of how the Fund will perform in the future.
Annual Total Returns (as of 12/31 each year)
[See appendix to prospectus for data in bar chart showing annual total
returns]
For the period from 1/1/99 through 3/31/99, the Fund's cumulative return (not
annualized) was -1.28%.
Charges imposed by separate accounts that invest in the Fund are not included in
the calculations of return in this bar chart, and if those charges were
included, the returns would be less than those shown. During the period shown in
the bar chart, the highest return (not annualized) for a calendar quarter was
16.36% (1st Q'98) and the lowest return for a calendar quarter was 12.90% (3rd
Q'98). Prior to October 1, 1999, the Fund's portfolio securities were selected
by a Sub-Advisor retained by the Manager. The Manager became the Fund's
investment adviser March 1, 1996.
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Average Annual
Total Returns for
the periods ended 1 Year 5 Years Life of Fund
December 31, 1998
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International
Equity Fund 19.40% 10.34% 10.21%
(inception:
5/13/92)
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MSCI EAFE Index 20.33% 9.50% 11.62%*
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* The "life-of-Fund" index performance is shown from 4/30/92.
The Fund's returns in the table measure the performance of a hypothetical
account without deducting charges imposed by the separate accounts that invest
in the Fund and assume that all dividends and capital gains distributions have
been reinvested in additional shares. Because the Fund invests primarily in
foreign stocks, the Fund's performance is compared to the Morgan Stanley Capital
International EAFE Index, an unmanaged index of equity securities listed on 20
principal stock markets of Europe, Asia and Australia. However, it must be
remembered that the index performance reflects the reinvestment of income but
does not consider the effects of transaction costs. Also, the Fund may invest in
markets other than those in the index.
The Fund's total returns should not be expected to be the same as the
returns of other Oppenheimer funds even if the Fund has the same manager and/or
similar investment policies as other funds.
About the Fund's Investments
The Fund's Principal Investment Policies. The allocation of the Fund's
investment holdings among the different types of permitted securities will vary
over time based upon the evaluation of economic and market trends by the
Manager. The Fund might not always hold all of the different types of
investments described below. The Statement of Additional Information contains
more detailed information about the Fund's investment policies and risks.
|X| Stock Investments. The Fund emphasizes investments in common stocks of
foreign companies that the Manager believes have growth potential. Growth
companies can be new or established companies that may be developing new
products or services, that have relatively favorable prospects, or that are
expanding into new and growing markets. Current examples include companies in
the fields of telecommunications, pharmaceuticals, computer software, and new
consumer products.
Growth companies may be applying new technology, new or improved
distribution techniques or developing new services that might enable them to
capture a dominant or important market position. They may have a special area of
expertise or the capability to take advantage of changes in demographic factors
in a more profitable way than competitors.
Growth companies tend to retain a large part of their earnings for
research, development or investment in capital assets. Therefore, they might not
emphasize paying dividends, and might not pay any dividends for some time. They
are selected for the Fund's portfolio because the Manager believes the price of
the stock will increase over the long term, relative to the overall stock
market. However, growth stocks may be more volatile than other stock
investments. They may lose favor with investors if the issuer's business plans
do not produce the expected results or they may be subject to more volatility
because of investor speculation about the issuer's prospects.
|X| Foreign Stocks. The Fund can buy stocks and other equity securities of
companies organized under the laws of a foreign country or companies that have a
substantial portion of their operations or assets abroad, or derive a
substantial portion of their revenue or profits from businesses, investments or
sales outside the U.S. Foreign securities include securities traded primarily on
foreign securities exchanges or in foreign over-the-counter markets.
The Fund can invest up to 25% of its total assets in securities of
companies based in "emerging" markets. An issuer is considered by the Fund to be
located in an emerging market if: o the issuer is organized under the law of an
emerging country; o the issuer's principal securities trading market is in an
emerging
market; or
o at least 50% of the issuer's non-current assets, capitalization, gross
revenue or profit is derived (directly or indirectly) from assets or
activities located in emerging markets.
|X| Special Fund Diversification Requirements. To enable a variable
annuity or variable life insurance contract based on an insurance company
separate account to qualify for favorable tax treatment under the Internal
Revenue Code, the underlying investments must follow special diversification
requirements that limit the percentage of assets that can be invested in
securities of particular issuers. The Fund's investment program is managed to
meet those requirements, in addition to other diversification requirements under
the Internal Revenue Code and the Investment Company Act that apply to
publicly-sold mutual funds.
Failure by the Fund to meet those special requirements could cause
earnings on a contract owner's interest in an insurance company separate account
to be taxable income. Those diversification requirements might also limit, to
some degree, the Fund's investment decisions in a way that could reduce its
performance.
|X| Can the Fund's Investment Objective and Policies Change? The Fund's
Board of Directors may change non-fundamental investment policies without
shareholder approval, although significant changes will be described in
amendments to this Prospectus. Fundamental policies are those that cannot be
changed without the approval of a majority of the Fund's outstanding voting
shares. The Fund's objective is not a fundamental policy, but will not be
changed by the Board of Directors without advance notice to shareholders.
Investment restrictions that are fundamental policies are listed in the
Statement of Additional Information. An investment policy is not fundamental
unless this Prospectus or the Statement of Additional Information says that it
is.
|X| Fund Turnover. The Fund does not extensively engage in short-term
trading to try to achieve its objective and does not expect to have a Fund
turnover rate in excess of 100% annually. Fund turnover affects brokerage costs
the Fund pays. The Financial Highlights table at the end of this Prospectus
shows the Fund's Fund turnover rates during its prior fiscal years.
Other Investment Strategies. To seek its objective, the Fund can also use the
investment techniques and strategies described below. The Fund might not always
use all of the different types of techniques and investments described below.
These techniques involve certain risks, although some are designed to help
reduce investment or market risks.
|X| Investing in Special Situations. At times the Fund might use
aggressive investment techniques. These might include seeking to benefit from
special situations, such as mergers, reorganizations or other unusual events
expected to affect a particular issuer. However, there is a risk in investing in
these types of situations that the change or event might not occur, which could
have a negative impact on the price of the security. The investment might not
produce the expected gains or could incur a loss for the Fund.
|X| Cyclical Opportunities. The Fund might also seek to take advantage of
changes in the business cycle by investing in companies that are sensitive to
those changes if the Fund managers believe they have growth potential. For
example, when the economy is expanding, companies in the consumer durables and
technology sectors might benefit and present long-term growth opportunities. The
Fund focuses on seeking growth over the long term but on occasion might seek to
take tactical advantage of short-term market movements or events affecting
particular issuers or industries. There is the risk that those securities might
lose value when the issuer or industry is out of phase in the business cycle.
|X| Debt Securities. The Fund can also invest up to 20% of its total
assets in debt securities when the Manager believes that it is appropriate in
seeking the Fund's objective. The Fund typically does not invest significantly
in debt securities for that purpose. The Fund can buy debt securities issued by
foreign governments, by supranational organizations such as the World Bank, or
by companies. Those debt securities may be rated or unrated. The Fund can invest
up to 15% of its total assets in debt securities that are below investment
grade. Those lower-rated debt securities are commonly called "junk bonds," and
have greater risks of default than investment-grade securities. The Fund
currently does not intend to invest more than 5% of its total assets in
securities rated below investment grade.
|_| Convertible Securities. While the Fund emphasizes investments in
common stocks, it can also buy debt securities convertible into common stock.
The Manager considers some convertible securities to be "equity equivalents"
because of the conversion feature and in that case their rating has less impact
on the investment decision than in the case of other debt securities.
Nevertheless, convertible debt securities, like other debt securities, are
subject to both "credit risk" (the risk that the issuer will not pay interest or
repay principal in a timely manner) and "interest rate risk" (the risk that the
prices of the securities will be affected inversely by changes in prevailing
interest rates).
|X| Investing in Domestic Securities. The Fund does not expect to
invest more than 10% of its assets in securities of U.S. issuers as part of
its normal investment program. However, it can hold common and preferred
stocks as well as debt securities of U.S. companies, and can also invest in
U.S. debt securities for defensive and liquidity purposes.
|X| Illiquid and Restricted Securities. Investments may be illiquid
because there is no active trading market for them. That might make it difficult
to value them or dispose of them promptly at an acceptable price. A restricted
security is one that has a contractual restriction on its resale or which cannot
be sold publicly until it is registered under the Securities Act of 1933. The
Fund will not invest more than 15% of its net assets in illiquid or restricted
securities. Certain restricted securities that are eligible for resale to
qualified institutional purchasers may not be subject to that limit. The Manager
monitors holdings of illiquid securities on an ongoing basis to determine
whether to sell any holdings to maintain adequate liquidity.
|X| Derivative Investments. The Fund can use a number of different kinds
of "derivative" investments, although it does not do so currently to a
significant degree and is not required to use them to seek its goal. In general
terms, a derivative investment is an investment contract whose value depends on
(or is derived from) the value of an underlying asset, interest rate or index.
In the broadest sense, exchange-traded options, futures contracts, forward
contracts and other hedging instruments the Fund might use can be considered
"derivative" investments. In addition to using derivatives for hedging, the Fund
might use other derivative investments because they offer the potential for
increased value.
|_| There are Special Risks in Using Derivative Investments. Markets
underlying securities and indices may move in a direction not anticipated by the
Manager. Interest rate and stock market changes in the U.S. and abroad may also
influence the performance of derivatives. If the issuer of the derivative does
not pay the amount due, the Fund can lose money on the investment. Also, the
underlying security or investment on which the derivative is based, and the
derivative itself, may not perform the way the Manager expected it to perform.
If that happens, the Fund's share price could decline.
The Fund has limits on the amount of particular types of derivatives it
can hold. However, using derivatives can cause the Fund to lose money on its
investments and/or increase the volatility of its share prices. As a result of
these risks the Fund could realize less return from the investment than
expected. Certain derivative investments held by the Fund may be illiquid.
|X| Hedging. The Fund can buy and sell certain kinds of futures contracts,
forward contracts, and exchange-traded call options, including call options on
futures contracts, foreign currencies and broadly-based securities indices.
These are all referred to as "hedging instruments." Although the Fund can use
forward contracts, options or futures to hedge foreign currency risks when
buying and selling securities, it does not currently use them or other types of
hedging extensively and does not use hedging instruments for speculative
purposes. It has limits on its use of hedging. The Fund is not required to use
hedging instruments in seeking its goal.
Some of these strategies would hedge the Fund's Fund against price
fluctuations. Other hedging strategies, such as buying futures and call options,
would tend to increase the Fund's exposure to the securities market. Forward
contracts could be used to try to manage foreign currency risks on the Fund's
foreign investments. Foreign currency options could be used to try to protect
against declines in the dollar value of foreign securities the Fund owns, or to
protect against an increase in the dollar cost of buying foreign securities.
Options trading involves the payment of premiums and has special tax
effects on the Fund. There are also special risks in particular hedging
strategies. If the Manager uses a hedging instrument at the wrong time or judges
market conditions incorrectly, the strategy could reduce the Fund's return. The
Fund could also experience losses if the price of its futures and options
positions were not correlated with its other investments or if it could not
close out a position because of an illiquid market.
Temporary Defensive Investments. In times of unstable or adverse market or
economic conditions, the Fund can invest up to 100% of its assets in temporary
defensive investments. Generally they would be cash equivalents (such as
commercial paper in the top two rating categories of national rating
organizations), money market instruments, short-term debt securities, U.S. or
foreign government securities, or repurchase agreements. They can also include
other investment grade debt securities. The Fund might also hold these types of
securities pending the investment of proceeds from the sale of Fund shares or
investment securities or to meet anticipated redemptions of Fund shares. To the
extent the Fund invests defensively in these securities, it might not achieve
its investment objective of capital growth.
Year 2000 Risks. Because many computer software systems in use today cannot
distinguish the year 2000 from the year 1900, the markets for securities in
which the Fund invests could be detrimentally affected by computer failures
beginning January 1, 2000. Failure of computer systems used for securities
trading could result in settlement and liquidity problems for the Fund and other
investors. That failure could have a negative impact on handling securities
trades, pricing and accounting services. Data processing errors by government
issuers of securities could result in economic uncertainties, and those issuers
might incur substantial costs in attempting to prevent or fix such errors, all
of which could have a negative effect on the Fund's investments and returns.
The Manager and the Transfer Agent have been working on necessary changes
to their computer systems to deal with the year 2000 and expect that their
systems will be adapted in time for that event, although there cannot be
assurance of success. Additionally, the services they provide depend on the
interaction of their computer systems with those of brokers, information
services, the Fund's Custodian and other parties. Therefore, any failure of the
computer systems of those parties to deal with the year 2000 might also have a
negative effect on the services they provide to the Fund. The extent of that
risk cannot be ascertained at this time.
How the Fund Is Managed
The Manager. The Fund's investment Manager, OppenheimerFunds, Inc., supervises
the Fund's investment program and handles its day-to-day business. The Manager
carries out its duties, subject to the policies established by the Fund's Board
of Directors, under an Investment Advisory Agreement that states the Manager's
responsibilities. The Agreement sets the fees paid by the Fund to the Manager
and describes the expenses that the Fund is responsible to pay to conduct its
business.
The Manager has operated as an investment adviser since 1959. The Manager
(including subsidiaries) currently manages investment companies, with assets of
more than $100 billion as of March 31, 1999, and with more than 4 million
shareholder accounts. The Manager is located at Two World Trade Center, 34th
Floor, New York, New York 10048-0203.
|X| Advisory Fees. Under the Investment Advisory Agreement, the Fund pays
the Manager an advisory fee at an annual rate that declines on additional assets
as the Fund grows: 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 fiscal year ended December 31, 1998, was 1.00% of
average annual net assets.
|X| Portfolio Manager. The portfolio manager of the Fund is George
Evans. Mr. Evans is a Vice President of the Fund and the Manager and is an
officer and portfolio manager of other Oppenheimer funds. Mr. Evans became
the person principally responsible for the day-to-day management of the
Fund's securities holdings, effective October 1, 1999. Prior to October 1,
1999, the Manager had engaged a sub-advisor to manage the Fund's portfolio.
Possible Conflicts of Interest. The Fund offers its shares to separate accounts
of different insurance companies as an investment for their variable annuity,
variable life and other investment product contracts. While the Fund does not
foresee any disadvantages to contract owners from these arrangements, it is
possible that the interests of owners of different contracts participating in
the Fund through different separate accounts might conflict. For example, a
conflict could arise because of differences in tax treatment.
The Fund's Board has procedures to monitor the Fund for possible conflicts
to determine what action should be taken. If an irreconcilable conflict occurs,
the Board might require one or more participating insurance company separate
accounts to withdraw their investments in the Fund. That could force the Fund to
sell securities at disadvantageous prices, and orderly Fund management could be
disrupted. Also, the Board might refuse to sell shares of the Fund to a
particular separate account, or could terminate the offering of the Fund's
shares if required to do so by law or if it would be in the best interests of
the shareholders of the Fund to do so.
INVESTING IN THE FUND
How to Buy and Sell Shares
How Are Shares Purchased? Shares of the Fund may be purchased only by separate
investment accounts of participating insurance companies as an underlying
investment for variable life insurance policies, variable annuity contracts or
other investment products. Individual investors cannot buy shares of the Fund
directly. Please refer to the accompanying prospectus of the participating
insurance company for information on how to select the Fund as an investment
option for that variable life insurance policy, variable annuity or other
investment product. The Fund reserves the right to refuse any purchase order
when the Manager believes it would be in the Fund's best interests to do so.
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Information about your investment in the Fund through your variable annuity
contract, variable life insurance policy or other plan can be obtained only
from your participating insurance company or its servicing agent. The Fund's
Transfer Agent does not hold or have access to those records. Instructions
for buying or selling shares of the Fund should be given to your insurance
company or its servicing agent, not directly to the Fund or its Transfer
Agent.
- -------------------------------------------------------------------------------
|X| At What Price Are Shares Sold? Shares are sold at their offering
price, which is the net asset value per share. The Fund does not impose any
sales charge on purchases of its shares. If there are any charges imposed under
the variable annuity, variable life or other contract through which Fund shares
are purchased, they are described in the accompanying prospectus of the
participating insurance company.
The net asset value per share is determined as of the close of The New
York Stock Exchange on each day that the exchange is open for trading (referred
to in this Prospectus as a "regular business day"). The Exchange normally closes
at 4:00 P.M., New York time, but may close earlier on some days. All references
to time in this Prospectus mean "New York time."
The net asset value per share is determined by dividing the value of the
Fund's net assets attributable to a class of shares by the number of shares of
that class that are outstanding. The Fund's Board of Directors has established
procedures to value the Fund's securities to determine the Fund's net asset
value, in general based on market values. The Board has adopted special
procedures for valuing illiquid and restricted securities and securities for
which market values cannot be readily obtained. Because some foreign securities
trade in markets and on exchanges that operate on weekends and U.S. holidays,
the values of some of the Fund's foreign investments might change significantly
on days when shares of the Fund cannot be purchased or redeemed.
The offering price that applies to an order from a participating insurance
company is based on the next calculation of the net asset value per share that
is made after the insurance company (as the Fund's designated agent to receive
purchase orders) receives a purchase order from its contract owners to purchase
Fund shares on a regular business day, provided that the Fund receives the order
from the insurance company by 9:30 A.M. on the next regular business day at the
offices of its Transfer Agent in Denver, Colorado.
How Are Shares Redeemed? As with purchases, only the participating insurance
companies that hold Fund shares in their separate accounts for the benefit of
variable annuity contracts, variable life insurance policies or other investment
products can place orders to redeem shares. Contract holders and policy holders
should not directly contact the Fund or its Transfer Agent to request a
redemption of Fund shares. Contract owners should refer to the withdrawal or
surrender instructions in the accompanying prospectus of the participating
insurance company.
The share price that applies to a redemption order is the next net asset
value per share that is determined after the participating insurance company (as
the Fund's designated agent) receives a redemption request on a regular business
day from its contract or policy holder, provided that the Fund receives the
order from the insurance company by 9:30 A.M. the next regular business day at
the office of its Transfer Agent in Denver, Colorado. The Fund normally sends
payment by Federal Funds wire to the insurance company's account the day after
the Fund receives the order (and no later than 7 days after the Fund's receipt
of the order). Under unusual circumstances determined by the Securities and
Exchange Commission, payment may be delayed or suspended.
Dividends, Capital Gains and Taxes
|X| Dividends. The Fund intends to declare dividends separately for each
class of shares from net investment income, if any, on an annual basis, and to
pay those dividends in March on a date selected by the Board of Directors. The
Fund has no fixed dividend rate and cannot guarantee that it will pay any
dividends.
All dividends (and any capital gains distributions) will be reinvested
automatically in additional Fund shares at net asset value for the account of
the participating insurance company (unless the insurance company elects to have
dividends or distributions paid in cash).
Capital Gains. The Fund may realize capital gains on the sale of Fund
securities. If it does, it may make distributions out of any net short-term or
long-term capital gains in March of each year. The Fund may make supplemental
distributions of dividends and capital gains following the end of its fiscal
year. There can be no assurance that the Fund will pay any capital gains
distributions in a particular year.
Taxes. For a discussion of the tax status of a variable annuity contract, a
variable life insurance policy or other investment product of a participating
insurance company, please refer to the accompanying prospectus of your
participating insurance company. Because shares of the Fund may be purchased
only through insurance company separate accounts for variable annuity contracts,
variable life insurance policies or other investment products, dividends paid by
the Fund from net investment income and distributions (if any) of net realized
short-term and long-term capital gains will be taxable, if at all, to the
participating insurance company.
This information is only a summary of certain federal income tax
information about an investment in Fund shares. You should consult with your tax
adviser or your participating insurance company representative about the effect
of an investment in the Fund under your contract or policy.
<PAGE>
Financial Highlights
The Financial Highlights Table is presented to help you understand the Fund's
financial performance since its inception. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by Deloitte & Touche LLP, the Fund's independent
auditors, whose report, along with the Fund's financial statements, is included
in the Statement of Additional Information, which is available on request.
<PAGE>
For More Information about Oppenheimer International Growth Fund/VA: The
following additional information about the Fund is available without charge upon
request:
Statement of Additional Information
This document includes additional information about the Fund's investment
policies, risks, and operations. It is incorporated by reference into this
Prospectus (which means it is legally part of this Prospectus).
Annual and Semi-Annual Reports
Additional information about the Fund's investments and performance is available
in the Fund's Annual and Semi-Annual Reports to shareholders. The Annual Report
includes a discussion of market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.
- ----------------------------------------------------------------------------
How to Get More Information:
- ----------------------------------------------------------------------------
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, and other information about the Fund:
By Telephone:
Call OppenheimerFunds Services toll-free:
1-888-470-0861
By Mail:
Write to:
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217-5270
You can also obtain copies of the Statement of Additional Information and other
Fund documents and reports by visiting the SEC's Public Reference Room in
Washington, D.C. (Phone 1-800-SEC-0330) or the SEC's Internet web site at
http://www.sec.gov. Copies may be obtained upon payment of a duplicating fee by
writing to the SEC's Public Reference Section, Washington, D.C. 20549-6009.
No one has been authorized to provide any information about the Fund or to make
any representations about the Fund other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.
SEC File No. 811-3255
PR616.0999 Printed on recycled paper.
<PAGE>
Appendix to Prospectus of
Oppenheimer International Growth Fund/VA
Graphic material included in the Prospectus of Oppenheimer International
Growth Fund/VA: "Annual Total Returns (as of 12/31 each year)":
A bar chart will be included in the Prospectus of Oppenheimer
International Growth Fund/VA depicting the annual total returns of a
hypothetical investment in shares of the Fund for each of the calendar years
since the Fund's inception. Set forth below are the relevant data points that
will appear in the bar chart:
- ----------------------------------------
Calendar Year Ended Annual Total
12/31 Return
- ----------------------------------------
- ----------------------------------------
1993 21.80%
- ----------------------------------------
- ----------------------------------------
1994 -1.44%
- ----------------------------------------
- ----------------------------------------
1995 10.30%
- ----------------------------------------
- ----------------------------------------
1996 13.26%
- ----------------------------------------
- ----------------------------------------
1997 8.11%
- ----------------------------------------
- ----------------------------------------
1998 19.40%
- ----------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
Panorama Series Fund, Inc.
- -------------------------------------------------------------------------------
6803 S. Tucson Way, Englewood, Colorado 80112
1-888-470-0861
Statement of Additional Information dated April 30, 1999,
Revised October 1, 1999
Panorama Series Fund, Inc. is an investment company with seven series,
referred to as "Portfolios" in this document. Each portfolio is a separate
mutual fund having its own objective, investments, strategies and risks. The
Portfolios are:
|_| Total Return Portfolio
|_| Growth Portfolio
|_| Oppenheimer International Growth Fund/VA
|_| Government Securities Portfolio
and three LifeSpan Portfolios:
|_| LifeSpan Capital Appreciation Portfolio
|_| LifeSpan Balanced Portfolio and
|_| LifeSpan Diversified Income Portfolio
- -------------------------------------------------------------------------------
Shares of the Portfolios are sold only as the underlying investments for
variable life insurance policies, variable annuity contracts and other
products for insurance company separate accounts. Shares are not available
for sale directly to investors.
- -------------------------------------------------------------------------------
This Statement of Additional Information is not a Prospectus. This document
contains additional information about the Portfolios, and supplements
information in the Prospectuses dated April 30, 1999, as revised October 1,
1999, of the Portfolios. This document should be read together with the
Prospectuses. You can obtain a Prospectus by writing to the Portfolios' Transfer
Agent, OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado 80217, or
by calling the Transfer Agent at the toll-free number shown above.
<PAGE>
Contents
Page
About the Portfolios
Additional Information About Investment Policies and Risks... 3
Investment Policies....................................... 3
Other Investment Techniques and Strategies................ 13
Investment Restrictions................................... 32
How the Portfolios are Managed .............................. 36
Organization and History.................................. 36
Directors and Officers of the Company..................... 37
The Manager............................................... 43
Brokerage Policies of the Portfolios......................... 46
Performance of the Portfolios................................ 48
Investing In the Portfolios
How To Buy and Sell Shares................................... 53
Dividends, Capital Gains and Taxes........................... 56
Additional Information About the Portfolios.................. 58
Financial Information About the Portfolios
Independent Auditors' Report................................. 59
Financial Statements......................................... 60
Appendix A: Ratings Definitions.............................. A-1
Appendix B: Industry Classifications......................... B-1
<PAGE>
- -------------------------------------------------------------------------------
A B O U T T H E P O R T F O L I O S
- -------------------------------------------------------------------------------
Additional Information About Investment Policies and Risks
The investment objectives, the principal investment policies and the main
risks of each Portfolio are described in the Prospectus for that Portfolio. This
Statement of Additional Information contains supplemental information about
those policies and risks and the types of securities that the Portfolios'
investment Manager, OppenheimerFunds, Inc., or the Sub-Advisors retained by the
Manager, can select for the Portfolios. Additional information is also provided
about the strategies that each Portfolio may use to try to achieve its
objective.
Investment Policies. The composition of the investment portfolio of each
Portfolio and the techniques and strategies that the Manager or relevant
Sub-Advisor uses in selecting investment securities will vary over time. The
Portfolios are not required to use all of the investment techniques and
strategies described below at all times in seeking their goal. They may use some
of the special investment techniques and strategies at some times or not at all.
In the discussion of the investment strategies of the Portfolios below,
the Portfolios are categorized according to the types of investments they
primarily make. Total Return Portfolio, Growth Portfolio, Oppenheimer
International Growth Fund/VA, LifeSpan Capital Appreciation Portfolio and
LifeSpan Balanced Portfolio are referred to as "Equity Portfolios," because they
invest mainly or substantially in common stocks and other equity securities.
LifeSpan Diversified Income Portfolio and Government Securities Portfolio are
referred to as "Fixed Income Portfolios," because the main emphasis of their
investment program is debt securities. However a Portfolio is referred to in
general, the discussion below of particular investments and strategies indicates
which Portfolios can use that investment or technique as part of their
investment program. For example, some investments can be held by only some of
the Portfolios and some can be held by all. Please refer to the Prospectus of a
particular Portfolio for an explanation of its principal investment policies and
risks.
|X| Equity Securities. The Equity Portfolios and the stock components of
the LifeSpan Portfolios invest in equity securities, which include common
stocks, preferred stocks, rights and warrants, and securities convertible into
common stock. Certain equity securities may be selected for some of the
Portfolios not only for their appreciation possibilities but because they may
provide dividend income.
The capitalization ranges of the issuers of equity securities that
particular Portfolios invest in are discussed in the Prospectuses. Some of the
Portfolios may emphasize securities of issuers in one or more capitalization
ranges, such as mid-cap and large-cap issuers. "Capitalization" refers to the
market capitalization of a company, which, in general terms, is the value of a
company determined by the total market value of its issued and outstanding
common stock. There are no fixed dollar amounts for particular capitalization
ranges, and the ranges currently used by the Portfolios may change over time as
investors change their views as to what a "small-cap" company is in relation to
"mid-cap" and "large-cap" as the stock market changes. Different Portfolios may
also have different definitions of what constitutes a small-, mid- or large-cap
issuer.
Small-cap growth companies may offer greater opportunities for capital
appreciation than securities of large, more established companies. However,
these securities also involve greater risks than securities of larger companies.
Securities of small capitalization issuers may be subject to greater price
volatility in general than securities of large-cap and mid-cap companies.
Therefore, to the degree that a Portfolio has investments in smaller
capitalization companies at times of market volatility, that Portfolio's share
price may fluctuate more. Those investments may be limited to the extent the
Manager or relevant Sub-Advisor believes that such investments would be
inconsistent with the Portfolio's investment objective.
|_| Growth Companies (All Equity Portfolios). The Equity Portfolios can
invest in securities of "growth" companies. Growth companies are those companies
that the Manager or relevant Sub-Advisor believes are entering into a growth
cycle in their business, with the expectation that their stock will increase in
value. They may be established companies as well as newer companies in the
development stage. Growth companies may have a variety of characteristics that
in the view of the portfolio manager of a Portfolio defines them as "growth"
issuers.
Growth companies may include companies that are generating or applying new
technologies, new or improved distribution techniques or new services. They may
own or develop natural resources. They may be companies that can benefit from
changing consumer demands or lifestyles, or companies that have projected
earnings in excess of the average for their sector or industry. In each case,
they have prospects that the portfolio manager believes are favorable for the
long term.
|_| Preferred Stocks (All Portfolios except Government Securities
Portfolio). Preferred stock, unlike common stock, has a stated dividend rate
payable from the corporation's earnings. Preferred stock dividends may be
cumulative or non-cumulative, participating, or auction rate. "Cumulative"
dividend provisions require all or a portion of prior unpaid dividends to be
paid before dividends can be paid on the issuer's common stock. Preferred stock
may be "participating" stock, which means that it may be entitled to a dividend
exceeding the stated dividend in certain cases.
If interest rates rise, the fixed dividend on preferred stocks may be less
attractive, causing the price of preferred stocks to decline. Preferred stock
may have mandatory sinking fund provisions, as well as provisions allowing calls
or redemptions prior to maturity, which also have a negative impact on prices
when interest rates decline. The rights of preferred stock on distribution of a
corporation's assets in the event of a liquidation are generally subordinate to
the rights associated with a corporation's debt securities. Preferred stock
generally has a preference over common stock on the distribution of a
corporation's assets in the event of liquidation of the corporation.
|_| Convertible Securities (All Portfolios except Government Securities
Portfolio). While some convertible securities are a form of debt security, in
some cases their conversion feature (allowing conversion into the issuer's
common stock) may cause a portfolio manager to regard them as "equity
equivalents." In those cases, the rating assigned to the security has less
impact on the portfolio manager's investment decision with respect to
convertible securities than in the case of non-convertible fixed income
securities. Convertible debt securities are subject to the credit risks and
interest rate risks described below in "Debt Securities."
The value of a convertible security is a function of its "investment
value" and its "conversion value." If the investment value exceeds the
conversion value, the security will behave more like a debt security and the
security's price will likely increase when interest rates fall and decrease when
interest rates rise. If the conversion value exceeds the investment value, the
security will behave more like an equity security. In that case, it will likely
sell at a premium over its conversion value and its price will tend to fluctuate
directly with the price of the underlying security.
To determine whether convertible securities should be regarded as "equity
equivalents," the portfolio managers typically examine the following factors:
(1) whether, at the option of the investor, the convertible security can be
exchanged for a fixed number of shares of common stock of the issuer,
(2) whether the issuer of the convertible securities has restated its
earnings per share of common stock on a fully diluted basis
(considering the effect of conversion of the convertible securities),
and
(3) the extent to which the convertible security may be a defensive "equity
substitute," providing the ability to participate in any appreciation in
the price of the issuer's common stock.
|_| Rights and Warrants (All Portfolios except Government Securities
Portfolio). Warrants basically are options to purchase equity securities at
specific prices valid for a specific period of time. Their prices do not
necessarily move parallel to the prices of the underlying securities. Rights are
similar to warrants, but normally have a short duration and are distributed
directly by the issuer to its shareholders. Rights and warrants have no voting
rights, receive no dividends and have no rights with respect to the assets of
the issuer. A Portfolio may invest up to 5% of its total assets in warrants or
rights. That 5% limitation does not apply to warrants a Portfolio has acquired
as part of units with other securities or that are attached to other securities.
No more than 2% of a Portfolio's total assets may be invested in warrants that
are not listed on either The New York Stock Exchange or The American Stock
Exchange.
|X| Foreign Securities (All Portfolios except Government Securities
Portfolio). Each Portfolio can invest in foreign securities, consistent with any
limitations a Portfolio may have on foreign investing set forth in its
Prospectus or this Statement of Additional Information. These may include debt
and equity securities issued by companies or governmental issuers in developed
countries or emerging market countries. Growth Portfolio and Total Return
Portfolio have fundamental policies, described in "Investment Restrictions,"
below, that limit the percentage of their assets that can be invested in foreign
securities. LifeSpan Diversified Income Portfolio normally does not buy foreign
equity securities.
The Portfolios can invest in obligations of foreign branches of U.S.
banks and U.S. branches of foreign banks. These investments are subject to
some of the risks of foreign securities and do not offer the protection of
Federal Deposit Insurance Corporation insurance.
Investing in foreign securities offers potential benefits not available
from investing solely in securities of domestic issuers. They include the
opportunity to invest in foreign issuers that appear to offer growth or income
potential, or in foreign countries with economic policies or business cycles
different from those of the U.S., or to reduce fluctuations in portfolio value
by taking advantage of foreign stock or bond markets that do not move in a
manner parallel to U.S. markets. In buying foreign securities, a Portfolio may
convert U.S. dollars into foreign currency, but only to effect securities
transactions on foreign securities exchanges and not to use currency for
speculative purposes or to hold it as an investment.
Securities of foreign issuers that are represented by American Depository
Receipts (ADRs), or that are listed on a U.S. securities exchange or traded in
the U.S. over-the-counter markets are not considered "foreign securities" for
the purposes of a Portfolio's investment allocations. That is because they are
not subject to many of the special considerations and risks, discussed below,
that apply to foreign securities traded and held abroad.
Because the Portfolios can purchase securities denominated in foreign
currencies, a change in the value of a foreign currency against the U.S. dollar
could result in a change in the amount of income a Portfolio has available for
distribution. Because a portion of the Portfolio's investment income may be
received in foreign currencies, the Portfolio will be required to compute its
income in U.S. dollars for distribution to shareholders, and therefore will
absorb the cost of currency fluctuations. After the Portfolio has distributed
income, subsequent foreign currency losses may result in the Portfolio's having
distributed more income in a particular fiscal period than was available from
investment income, which could result in a return of capital to shareholders.
|_| Risks of Foreign Investing. Investments in foreign securities may
offer special opportunities for investing but also present special additional
risks and considerations not typically associated with investments in domestic
securities. Some of these additional risks are:
o reduction of income by foreign taxes;
o fluctuation in value of foreign investments due to changes in currency
rates or currency control regulations (for example, currency blockage);
o transaction charges for currency exchange;
o lack of public information about foreign issuers;
o lack of uniform accounting, auditing and financial reporting standards in
foreign countries comparable to those applicable to domestic issuers;
o less volume on foreign exchanges than on U.S. exchanges;
o greater volatility and less liquidity on foreign markets than in the
U.S.;
o less governmental regulation of foreign issuers, securities exchanges
and brokers than in the U.S.;
o greater difficulties in commencing lawsuits;
o higher brokerage commission rates than in the U.S.;
o increased risks of delays in settlement of portfolio transactions or
loss of certificates for portfolio securities;
o possibilities in some countries of expropriation, confiscatory taxation,
political, financial or social instability or adverse diplomatic
developments; and
o unfavorable differences between the U.S. economy and foreign economies.
In the past, U.S. government policies have discouraged certain
investments abroad by U.S. investors, through taxation or other restrictions,
and it is possible that such restrictions could be re-imposed.
|_| Special Risks of Emerging Markets. Emerging and developing markets
abroad may also offer special opportunities for investing but have greater risks
than more developed foreign markets, such as those in Europe, Canada, Australia,
New Zealand and Japan. There may be even less liquidity in their securities
markets, and settlements of purchases and sales of securities may be subject to
additional delays. They are subject to greater risks of limitations on the
repatriation of income and profits because of currency restrictions imposed by
local governments. Those countries may also be subject to the risk of greater
political and economic instability, which can greatly affect the volatility of
prices of securities in those countries. The portfolio managers will consider
these factors when evaluating securities in these markets, and the Portfolios
currently do not expect to invest a substantial portion of their assets in
emerging markets.
|_| Risks of Conversion to Euro. On January 1, 1999, eleven countries in
the European Union adopted the euro as their official currency. However, their
current currencies (for example, the franc, the mark, and the lira) will also
continue in use until January 1, 2002. After that date, it is expected that only
the euro will be used in those countries. A common currency is expected to
confer some benefits in those markets, by consolidating the government debt
market for those countries and reducing some currency risks and costs. But the
conversion to the new currency will affect the Portfolios operationally and also
has potential risks, some of which are listed below. Among other things, the
conversion will affect:
o issuers in which the Portfolios invest, because of changes in the
competitive environment from a consolidated currency market and greater
operational costs from converting to the new currency. This might depress
securities values. o vendors the Portfolios depend on to carry out its
business, such as its custodian bank (which holds the foreign securities
each Portfolio buys), the Manager (which must price the Portfolios'
investments to deal with the conversion to the euro) and brokers, foreign
markets and securities depositories. If they are not prepared, there could
be delays in settlements and additional costs to the Portfolios. o
exchange contracts and derivatives that are outstanding during the
transition to the euro. The lack of currency rate calculations between the
affected currencies and the need to update a Portfolio's contracts could
pose extra costs to the Portfolio.
The Manager and Sub-Advisors are upgrading (at their own expense) their
computer and bookkeeping systems to deal with the conversion. The Portfolios'
custodian bank has advised the Manager of its plans to deal with the conversion,
including how it will update its record-keeping systems and handle the
re-denomination of outstanding foreign debt. The portfolio managers will also
monitor the effects of the conversion on the issuers in which each Portfolio
invests. The possible effect of these factors on a Portfolio's investments
cannot be determined with certainty at this time, but they may reduce the value
of some of the Portfolio's holdings and increase its operational costs.
|X| Debt Securities. The Portfolios can invest in debt securities to
seek their objectives. Foreign debt securities are subject to the risks of
foreign securities described above. In general, debt securities are also
subject to two additional types of risk: credit risk and interest rate risk.
|_| Credit Risk. Credit risk relates to the ability of the issuer to
meet interest or principal payments or both as they become due. In general,
lower-grade, higher-yield bonds are subject to credit risk to a greater extent
than lower-yield, higher-quality bonds.
The portfolios can buy rated and unrated debt securities. In making
investments in debt securities, the portfolio managers may rely to some extent
on the ratings of ratings organizations or it may use their own research to
evaluate a security's credit-worthiness. If a Portfolio buys unrated debt
securities, to consider them part of the Portfolio's holdings of
investment-grade securities, they must be judged by the Manager or relevant
Sub-Advisor to be of a quality comparable to securities rated as investment
grade by a rating organization.
U.S. government securities, although unrated, are generally considered to
be equivalent to securities in the highest rating categories. Investment-grade
securities are securities that are rated at least "Baa" by Moody's Investors
Service, Inc., or at least "BBB" by Standard & Poor's Ratings Service or Duff &
Phelps, Inc., or that have comparable ratings by another nationally-recognized
rating organization. The Portfolios other than Government Securities Portfolio
can also buy non-investment-grade debt securities (commonly referred to as "junk
bonds").
|_| Interest Rate Risk. Interest rate risk refers to the fluctuations in
value of debt securities resulting from the inverse relationship between price
and yield. For example, an increase in general interest rates will tend to
reduce the market value of already-issued debt securities, and a decline in
general interest rates will tend to increase their value. In addition, debt
securities having longer maturities tend to offer higher yields, but are subject
to potentially greater fluctuations in value from changes in interest rates than
obligations having shorter maturities.
Fluctuations in the market value of debt securities after a Portfolio buys
them will not affect the interest income payable on those securities (unless the
security pays interest at a variable rate pegged to interest rate changes).
However, those price fluctuations will be reflected in the valuations of the
securities, and therefore the Portfolio's net asset values will be affected by
those fluctuations.
|_| Lower-Grade Securities (All Portfolios except Government Securities
Portfolio). Because lower-grade securities tend to offer higher yields than
investment-grade securities, a Portfolio might invest in lower-grade securities
to seek higher income.
"Lower-grade" debt securities are those rated below "investment grade,"
which means they have a rating lower than "Baa" by Moody's or lower than "BBB"
by Standard & Poor's or Duff & Phelps, or similar ratings by other rating
organizations. If they are unrated, and are determined by the Manager or
relevant Sub-Advisor to be of comparable quality to debt securities rated below
investment grade, they are considered part of the Portfolio's holdings of
lower-grade securities.
Some of the special credit risks of lower-grade securities are discussed
below. There is a greater risk that the issuer may default on its obligation to
pay interest or to repay principal than in the case of investment-grade
securities. The issuer's low creditworthiness may increase the potential for its
insolvency. An overall decline in values in the high yield bond market is also
more likely during a period of a general economic downturn. An economic downturn
or an increase in interest rates could severely disrupt the market for high
yield bonds, adversely affecting the values of outstanding bonds as well as the
ability of issuers to pay interest or repay principal. In the case of foreign
high yield bonds, these risks are in addition to the special risks of foreign
investing discussed above.
To the extent they can be converted into stock, convertible securities may
be less subject to some of the risks of volatility than non-convertible high
yield bonds, since stock may be more liquid and less affected by some of these
risk factors.
While securities rated "Baa" by Moody's or "BBB" by Standard & Poor's or
Duff & Phelps are investment grade and are not regarded as junk bonds, those
securities may be subject to special risks and have some speculative
characteristics. Definitions of the debt security ratings categories of Moody's,
Standard & Poor's, Fitch/IBCA and Duff & Phelps are included in Appendix A to
this Statement of Additional Information.
|_| Mortgage-Related Securities (All Portfolios except Growth Portfolio
and Oppenheimer Growth Fund/VA). Mortgage-related securities are a form of
derivative investment collateralized by pools of commercial or residential
mortgages. Pools of mortgage loans are assembled as securities for sale to
investors by government agencies or entities or by private issuers. These
securities include collateralized mortgage obligations ("CMOs"), mortgage
pass-through securities, stripped mortgage pass-through securities, interests in
real estate mortgage investment conduits ("REMICs") and other real
estate-related securities.
Mortgage-related securities that are issued or guaranteed by agencies or
instrumentalities of the U.S. government, discussed below under "U.S. Government
Securities," have relatively little credit risk (depending on the nature of the
issuer) but are subject to interest rate risks and prepayment risks.
As with other debt securities, the prices of mortgage-related securities
tend to move inversely to changes in interest rates. Some mortgage-related
securities pay interest at rates that move inversely to changes in general
interest rates, based on a multiple of a specific index. Although the value of a
mortgage-related security may decline when interest rates rise, the converse is
not always the case.
In periods of declining interest rates, mortgages are more likely to be
prepaid. Therefore, a mortgage-related security's maturity can be shortened by
unscheduled prepayments on the underlying mortgages. Therefore, it is not
possible to predict accurately the security's yield. The principal that is
returned earlier than expected may have to be reinvested in other investments
having a lower yield than the prepaid security. Therefore, these securities may
be less effective as a means of "locking in" attractive long-term interest
rates, and they may have less potential for appreciation during periods of
declining interest rates, than conventional bonds with comparable stated
maturities.
Prepayment risks can lead to substantial fluctuations in the value of a
mortgage-related security. In turn, this can affect the value of a Portfolio's
shares. If a mortgage-related security has been purchased at a premium, all or
part of the premium the Portfolio paid may be lost if there is a decline in the
market value of the security, whether that results from interest rate changes or
prepayments on the underlying mortgages. In the case of stripped
mortgage-related securities, if they experience greater rates of prepayment than
were anticipated, the Portfolio may fail to recoup its initial investment on the
security.
During periods of rapidly rising interest rates, prepayments of
mortgage-related securities may occur at slower than expected rates. Slower
prepayments effectively may lengthen a mortgage-related security's expected
maturity. Generally, that would cause the value of the security to fluctuate
more widely in responses to changes in interest rates. If the prepayments on a
Portfolio's mortgage-related securities were to decrease broadly, the
sensitivity of the Portfolio's share price to interest rate changes would
increase.
As with other debt securities, the values of mortgage-related securities
may be affected by changes in the market's perception of the creditworthiness of
the entity issuing the securities or guaranteeing them. Their values may also be
affected by changes in government regulations and tax policies.
o Collateralized Mortgage Obligations. Collateralized mortgage
obligations or "CMOs," are multi-class bonds that are backed by pools of
mortgage loans or mortgage pass-through certificates. They may be
collateralized by:
(1) pass-through certificates issued or guaranteed by Government National
Mortgage Association (Ginnie Mae), Federal National Mortgage
Association (Fannie Mae), or Federal Home Loan Mortgage Corporation
(Freddie Mac),
(2) unsecuritized mortgage loans insured by the Federal Housing
Administration or guaranteed by the Department of Veterans' Affairs,
(3) unsecuritized conventional mortgages, (4) other mortgage-related securities,
or
(5) any combination of the securities mentioned above.
Each class of CMO, referred to as a "tranche," is issued at a specific
coupon rate and has a stated maturity or final distribution date. Principal
prepayments on the underlying mortgages may cause the CMO to be retired much
earlier than the stated maturity or final distribution date. The principal and
interest on the underlying mortgages may be allocated among the several classes
of a series of a CMO in different ways. One or more tranches may have coupon
rates that reset periodically at a specified increase over an index. These are
floating rate CMOs, and typically have a cap on the coupon rate. Inverse
floating rate CMOs have a coupon rate that moves in the reverse direction to an
applicable index. The coupon rate on these CMOs will increase as general
interest rates decrease. These are usually much more volatile than fixed rate
CMOs or floating rate CMOs.
The prices and yields of CMOs are determined, in part, by assumptions
about the cash flows from the rate of payments of the underlying mortgages.
Changes in interest rates may cause the rate of expected prepayments of those
mortgages to change. In general, prepayments increase when general interest
rates fall and decrease when interest rates rise.
If prepayments of mortgages underlying a CMO occur faster than expected
when interest rates fall, the market value and yield of the CMO will be reduced.
Additionally, a Portfolio might have to reinvest the prepayment proceeds in
other securities paying interest at lower rates, which could reduce the
Portfolio's income.
When interest rates rise rapidly, if prepayments occur more slowly than
expected, a short- or medium-term CMO can in effect become a long-term security,
subject to greater fluctuations in value. These are the prepayment risks
described above and can make the prices of CMOs very volatile when interest
rates change. The prices of longer-term debt securities tend to fluctuate more
than those of shorter-term debt securities. That volatility will affect the
Portfolio's share prices.
o Mortgage-Related U.S. Government Securities. These include
interests in pools of residential or commercial mortgages, in the form of
collateralized mortgage obligations and other "pass-through" mortgage
securities. CMOs that are U.S. government securities have collateral to
secure payment of interest and principal. They may be issued in different
series with different interest rates and maturities. The collateral is
either in the form of mortgage pass-through certificates issued or guaranteed
by a U.S. agency or instrumentality or mortgage loans insured by a U.S.
government agency.
o Commercial (Privately-Issued) Mortgage Related Securities. Some
mortgage-related securities are issued by private entities. Generally these are
multi-class debt or pass-through certificates secured by mortgage loans on
commercial properties. They are subject to the credit risk of the issuer. These
securities typically are structured to provide protection to investors in senior
classes from possible losses on the underlying loans. They do so by having
holders of subordinated classes take the first loss if there are defaults on the
underlying loans. They may also be protected to some extent by guarantees,
reserve funds or additional collateralization mechanisms.
o "Stripped" Mortgage-Related Securities. These are mortgage-related
securities that are created by segregating the cash flows from underlying
mortgage loans or mortgage securities to create two or more new securities. Each
has a specified percentage of the underlying security's principal or interest
payments. They are a form of derivative investment.
Mortgage securities may be partially stripped so that each class receives
some interest and some principal. However, they may be completely stripped. In
that case all of the interest is distributed to holders of one type of security,
known as an "interest-only" security, or "I/O," and all of the principal is
distributed to holders of another type of security, known as a "principal-only"
security or "P/O." Strips can be created for pass through certificates or CMOs.
The yields to maturity of I/Os and P/Os are very sensitive to principal
repayments (including prepayments) on the underlying mortgages. If the
underlying mortgages experience greater than anticipated prepayments of
principal, a Portfolio might not fully recoup its investment in an I/O based on
those assets. If underlying mortgages experience less than anticipated
prepayments of principal, the yield on the P/Os based on them could decline
substantially.
|_| U.S. Government Securities (All Portfolios). These are securities
issued or guaranteed by the U.S. Treasury or other U.S. government agencies or
federally-chartered corporate entities referred to as "instrumentalities." The
obligations of U.S. government agencies or instrumentalities in which the Fund
can invest may or may not be guaranteed or supported by the "full faith and
credit" of the United States. "Full faith and credit" means generally that the
taxing power of the U.S. government is pledged to the payment of interest and
repayment of principal on a security. If a security is not backed by the full
faith and credit of the United States, the owner of the security must look
principally to the agency issuing the obligation for repayment. The owner might
not be able to assert a claim against the United States if the issuing agency or
instrumentality does not meet its commitment.
o U.S. Treasury Obligations. These include Treasury bills (which have
maturities of one year or less when issued), Treasury notes (which have
maturities of from one to ten years when issued), and Treasury bonds (which have
maturities of more than ten years when issued). Treasury securities are backed
by the full faith and credit of the United States as to timely payments of
interest and repayments of principal. Other U.S. Treasury obligations the
Portfolios can buy include U. S. Treasury securities that have been "stripped"
by a Federal Reserve Bank, zero-coupon U.S. Treasury securities described below,
and Treasury Inflation-Protection Securities ("TIPS").
o Obligations of U.S. Government Agencies or Instrumentalities. These
include direct obligations and mortgage-related securities that have different
levels of credit support from the government. Some are supported by the full
faith and credit of the U.S. government, such as Government National Mortgage
Association pass-through mortgage certificates (called "Ginnie Maes"). Some are
supported by the right of the issuer to borrow from the U.S. Treasury under
certain circumstances, such as Federal National Mortgage Association bonds.
Others are supported only by the credit of the entity that issued them, such as
Federal Home Loan Mortgage Corporation obligations.
|X| Money Market Instruments (All Portfolios). The following is a
brief description of the types of the money market securities the Portfolios
can invest in. Money market securities are high-quality, short-term debt
instruments that may be issued by the U.S. government, corporations, banks or
other entities. They may have fixed, variable or floating interest rates.
|_| U.S. Government Securities. These include obligations issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities, described above.
|_| Bank Obligations. "Banks" include commercial banks, savings banks
and savings and loan associations, which may or may not be members of the
Federal Deposit Insurance Corporation. The Portfolios can buy time deposits,
certificates of deposit and bankers' acceptances. They must be:
o obligations issued or guaranteed by a domestic bank (including a
foreign branch of a domestic bank) having total assets of at
least U.S. $1 billion, or
o obligations of a foreign bank with total assets of at least U.S. $1
billion.
|_| Commercial Paper. The Portfolios can invest in commercial paper if
it is rated within the top three rating categories of Standard & Poor's and
Moody's or other rating organizations. If the paper is not rated, it may be
purchased if the Manager or relevant Sub-Advisor determines that it is
comparable to rated commercial paper in the top three rating categories of
national rating organizations.
The Portfolios can buy commercial paper, including U.S. dollar-denominated
securities of foreign branches of U.S. banks, issued by other entities if the
commercial paper is guaranteed as to principal and interest by a bank,
government or corporation whose certificates of deposit or commercial paper may
otherwise be purchased by the Portfolios.
|_| Variable Amount Master Demand Notes. Master demand notes are
corporate obligations that permit the investment of fluctuating amounts at
varying rates of interest under direct arrangements between a Portfolio, as
lender, and the borrower. They permit daily changes in the amounts borrowed. The
Portfolio has the right to increase the amount under the note at any time up to
the full amount provided by the note agreement, or to decrease the amount. The
borrower may prepay up to the full amount of the note without penalty. These
notes may or may not be backed by bank letters of credit.
Because these notes are direct lending arrangements between the lender and
borrower, it is not expected that there will be a trading market for them. There
is no secondary market for these notes, although they are redeemable (and thus
are immediately repayable by the borrower) at principal amount, plus accrued
interest, at any time. Accordingly, a Portfolio's right to redeem such notes is
dependent upon the ability of the borrower to pay principal and interest on
demand.
The Portfolios have no limitations on the type of issuer from whom these
notes will be purchased. However, in connection with such purchases and on an
ongoing basis, the portfolio manager will consider the earning power, cash flow
and other liquidity ratios of the issuer, and its ability to pay principal and
interest on demand, including a situation in which all holders of such notes
made demand simultaneously. Investments in master demand notes are subject to
the limitation on investments by the Portfolios in illiquid securities.
Currently, the Portfolios do not intend that their investments in variable
amount master demand notes will exceed 5% of a Portfolio's total assets.
Other Investment Techniques and Strategies. In seeking their respective
objectives, each Portfolio may from time to time use the types of investment
strategies and investments described below. A Portfolio is not required to use
all of these strategies at all times, and at times may not use them.
|X| Forward Rolls (Total Return Portfolio and Government Securities
Portfolio). In a "forward roll" transaction with respect to mortgage-related
securities, a Portfolio sells a mortgage-related security to a buyer and
simultaneously agrees to repurchase a similar security (the same type of
security, and having the same coupon and maturity) at a later date at a set
price. The securities that are repurchased will have the same interest rate as
the securities that are sold, but typically will be collateralized by different
pools of mortgages (with different prepayment histories) than the securities
that have been sold. Proceeds from the sale are invested in short-term
instruments, such as repurchase agreements. The income from those investments,
plus the fees from the forward roll transaction, are expected to generate income
to the Portfolio in excess of the yield on the securities that have been sold.
A Portfolio will only enter into "covered" rolls. To assure its future
payment of the purchase price, the Portfolio will identify on its books liquid
assets in an amount equal to the payment obligation under the roll.
These transactions have risks. During the period between the sale and the
repurchase, the Portfolio will not be entitled to receive interest and principal
payments on the securities that have been sold. It is possible that the market
value of the securities the Portfolio sells might decline below the price at
which the Portfolio is obligated to repurchase securities.
|X| Asset-Backed Securities (All Portfolios except Growth Portfolio and
Oppenheimer International Growth Fund/VA). Asset-backed securities are
fractional interests in pools of assets, typically accounts receivable or
consumer loans. They are issued by trusts or special-purpose corporations. They
are similar to mortgage-backed securities, described above, and are backed by a
pool of assets that consist of obligations of individual borrowers. The income
from the pool is passed through to the holders of participation interest in the
pools. The pools may offer a credit enhancement, such as a bank letter of
credit, to try to reduce the risks that the underlying debtors will not pay
their obligations when due.
The value of an asset-backed security is affected by changes in the
market's perception of the asset backing the security, the creditworthiness of
the servicing agent for the loan pool, the originator of the loans, or the
financial institution providing any credit enhancement, and is also affected if
any credit enhancement has been exhausted. The risks of investing in
asset-backed securities are ultimately related to payment of consumer loans by
the individual borrowers. As a purchaser of an asset-backed security, a
Portfolio would generally have no recourse to the entity that originated the
loans in the event of default by a borrower. The underlying loans are subject to
prepayments, which may shorten the weighted average life of asset-backed
securities and may lower their return, in the same manner as in the case of
mortgage-backed securities and CMOs, described above.
|X| Zero-Coupon Securities (All Portfolios). The Portfolios can buy
zero-coupon and delayed-interest securities, and "stripped" securities. Stripped
securities are debt securities whose interest coupons are separated from the
security and sold separately. They can include, among others, foreign debt
securities and U.S. Treasury notes or bonds that have been stripped of their
interest coupons, U.S. Treasury bills issued without interest coupons, and
certificates representing interests in stripped securities.
Zero-coupon securities do not make periodic interest payments and are sold
at a deep discount from their face value. The buyer recognizes a rate of return
determined by the gradual appreciation of the security, which is redeemed at
face value on a specified maturity date. This discount depends on the time
remaining until maturity, as well as prevailing interest rates, the liquidity of
the security and the credit quality of the issuer. In the absence of threats to
the issuer's credit quality, the discount typically decreases as the maturity
date approaches. Some zero-coupon securities are convertible, in that they are
zero-coupon securities until a predetermined date, at which time they convert to
a security with a specified coupon rate.
Because zero-coupon securities pay no interest and compound semi-annually
at the rate fixed at the time of their issuance, their value is generally more
volatile than the value of other debt securities. Their value may fall more
dramatically than the value of interest-bearing securities when interest rates
rise. When prevailing interest rates fall, zero-coupon securities tend to rise
more rapidly in value because they have a fixed rate of return.
A Portfolio's investment in zero-coupon securities may cause the Portfolio
to recognize income and make distributions to shareholders before it receives
any cash payments on the zero-coupon investment. To generate cash to satisfy
those distribution requirements, the Portfolio might have to sell portfolio
securities that it otherwise might have continued to hold or to use cash flows
from other sources such as the sale of Portfolio shares.
|X| "When-Issued" and "Delayed-Delivery" Transactions (All Portfolios).
The Portfolios can invest in securities on a "when-issued" basis and can
purchase or sell securities on a "delayed-delivery" basis. When-issued and
delayed-delivery are terms that refer to securities whose terms and indenture
are available and for which a market exists, but which are not available for
immediate delivery.
When these transactions are negotiated, the price (which is generally
expressed in yield terms) is fixed at the time the commitment is made. Delivery
and payment for the securities take place at a later date. The securities are
subject to change in value from market fluctuations during the period until
settlement. The value at delivery may be less than the purchase price. For
example, changes in interest rates in a direction other than that expected by
the portfolio manager of a Portfolio before settlement will affect the value of
such securities and may cause a loss to the Portfolio. During the period between
purchase and settlement, no payment is made by the Portfolio to the issuer and
no interest accrues to the Portfolio from the investment until it receives the
security at settlement.
A Portfolio might engage in when-issued transactions to secure what the
portfolio manager considers to be an advantageous price and yield at the time
the obligation is entered into. When a Portfolio enters into a when-issued or
delayed-delivery transaction, it relies on the other party to complete the
transaction. Its failure to do so may cause the Portfolio to lose the
opportunity to obtain the security at a price and yield the portfolio manager
considers to be advantageous.
When a Portfolio engages in when-issued and delayed-delivery transactions,
it does so for the purpose of acquiring or selling securities consistent with
its investment objective and policies or for delivery pursuant to options
contracts it has entered into, and not for the purpose of investment leverage.
Although a Portfolio enters into delayed-delivery or when-issued purchase
transactions to acquire securities, it may dispose of a commitment prior to
settlement. If a Portfolio chooses to dispose of the right to acquire a
when-issued security prior to its acquisition or to dispose of its right to
delivery or receive against a forward commitment, it may incur a gain or loss.
At the time a Portfolio makes the commitment to purchase or sell a
security on a when-issued or delayed-delivery basis, it records the transaction
on its books and reflects the value of the security purchased in determining the
Portfolio's net asset value. In a sale transaction, it records the proceeds to
be received. The Portfolio will identify on its books liquid assets at least
equal in value to the value of the Portfolio's purchase commitments until it
pays for the investment. The Portfolios anticipate that a Portfolio's
commitments to purchase when-issued securities and forward commitments will not
exceed 33% of that Portfolio's total assets under normal market conditions.
When-issued and delayed-delivery transactions can be used by a Portfolio
as a defensive technique to hedge against anticipated changes in interest rates
and prices. For instance, in periods of rising interest rates and falling
prices, a Portfolio might sell securities in its portfolio on a forward
commitment basis to attempt to limit its exposure to anticipated falling prices.
In periods of falling interest rates and rising prices, a Portfolio might sell
portfolio securities and purchase the same or similar securities on a
when-issued or delayed-delivery basis to obtain the benefit of currently higher
cash yields.
|X| Repurchase Agreements (all Portfolios). A Portfolio can acquire
securities subject to repurchase agreements. It might do so for liquidity
purposes to meet anticipated redemptions of shares, or pending the investment of
the proceeds from sales of shares, or pending the settlement of portfolio
securities transactions, or for temporary defensive purposes.
In a repurchase transaction, a Portfolio buys a security from, and
simultaneously resells it to, an approved vendor for delivery on an agreed-upon
future date. The resale price exceeds the purchase price by an amount that
reflects an agreed-upon interest rate effective for the period during which the
repurchase agreement is in effect. Approved vendors include U.S. commercial
banks, U.S. branches of foreign banks, or broker-dealers that have been
designated as primary dealers in government securities. They must meet credit
requirements set by the Portfolios' Board of Directors from time to time.
The majority of these transactions run from day to day, and delivery
pursuant to the resale typically occurs within one to five days of the purchase.
Repurchase agreements having a maturity beyond seven days are subject to a
Portfolio's limits on holding illiquid investments. A Portfolio will not enter
into a repurchase agreement that causes more than 15% of its net assets to be
subject to repurchase agreements having a maturity beyond seven days. There is
no limit on the amount of a Portfolio's net assets that may be subject to
repurchase agreements having maturities of seven days or less.
Repurchase agreements, considered "loans" under the Investment Company
Act, are collateralized by the underlying security. The Portfolios' repurchase
agreements require that at all times while the repurchase agreement is in
effect, the value of the collateral must equal or exceed the repurchase price to
fully collateralize the repayment obligation. However, if the vendor fails to
pay the resale price on the delivery date, a Portfolio may incur costs in
disposing of the collateral and may experience losses if there is any delay in
its ability to do so. The Manager or relevant Sub-Advisor will monitor the
vendor's creditworthiness to confirm that the vendor is financially sound and
will continuously monitor the collateral's value.
|X| Illiquid and Restricted Securities (All Portfolios). Under the
policies and procedures established by the Board of Directors, the Manager or
relevant Sub-Advisor determines the liquidity of certain of a Portfolio's
investments. To enable a Portfolio to sell its holdings of a restricted security
not registered under the Securities Act of 1933, the Portfolio may have to cause
those securities to be registered. The expenses of registering restricted
securities may be negotiated by the Portfolio with the issuer at the time the
Portfolio buys the securities. When the Portfolio must arrange registration
because it wishes to sell the security, a considerable period may elapse between
the time the decision is made to sell the security and the time the security is
registered so that the Portfolio could sell it. The Portfolio would bear the
risks of any downward price fluctuation during that period.
The Portfolios may also acquire restricted securities through private
placements. Those securities have contractual restrictions on their public
resale. Those restrictions might limit a Portfolio's ability to dispose of the
securities and might lower the amount the Portfolio could realize upon the sale.
Each Portfolio has limitations that apply to purchases of restricted
securities, as stated in its Prospectus. Except in the case of the LifeSpan
Portfolios, those percentage restrictions do not limit purchases of restricted
securities that are eligible for sale to qualified institutional purchasers
under Rule 144A of the Securities Act of 1933, if those securities have been
determined to be liquid by the Manager under Board-approved guidelines. Those
guidelines take into account the trading activity for such securities and the
availability of reliable pricing information, among other factors. If there is a
lack of trading interest in a particular Rule 144A security, a Portfolio's
holdings of that security may be considered to be illiquid. Illiquid securities
include repurchase agreements maturing in more than seven days and participation
interests that do not have puts exercisable within seven days.
|X| Municipal Securities (Total Return Portfolio). These are debt
obligations issued by the governments of states and their agencies,
instrumentalities and authorities, as well as their political subdivisions
(cities towns and counties, for example), that are used to finance a variety of
public and private purposes. Those purposes include financing state or local
governments and financing specific public projects and facilities. The Portfolio
can invest in them because the portfolio managers believe they offer attractive
yields relative to the yields and risks of other debt securities, rather than to
seek tax-exempt interest income for distribution to shareholders.
|X| Floating Rate and Variable Rate Obligations (All Portfolios). The
interest rate on a floating rate note is adjusted automatically according to a
stated prevailing market rate, such as a bank's prime rate, the 91-day U.S.
Treasury Bill rate, or some other standard. The instrument's rate is adjusted
automatically each time the base rate is adjusted. The interest rate on a
variable rate note is also based on a stated prevailing market rate but is
adjusted automatically at specified intervals. Generally, the changes in the
interest rate on such securities reduce the fluctuation in their market value.
As interest rates decrease or increase, the potential for capital appreciation
or depreciation is less than that for fixed-rate obligations of the same
maturity. The portfolio manager of a Portfolio may determine that an unrated
floating rate or variable rate obligation meets the Portfolio's quality
standards by reason of being backed by a letter of credit or guarantee issued by
a bank that meets those quality standards.
Floating rate and variable rate demand notes that have a stated maturity
in excess of one year may have features that permit the holder to recover the
principal amount of the underlying security at specified intervals not exceeding
one year and upon no more than 30 days' notice. The tender may be at par value
plus accrued interest, according to the terms of the obligations. The issuer of
that type of note normally has a corresponding right in its discretion, after a
given period, to prepay the outstanding principal amount of the note plus
accrued interest. Generally the issuer must provide a specified number of days'
notice to the holder.
Step-coupon bonds have a coupon interest rate that changes periodically
during the life of the security on predetermined dates that are set when the
security is issued.
|X| "Structured" Notes (All Portfolios except Growth Portfolio and
Oppenheimer International Growth Fund/VA). "Structured" notes are
specially-designed derivative debt investments with principal payments or
interest payments that are linked to the value of an index (such as a currency
or securities index) or commodity. The terms of the instrument may be
"structured" by the purchaser (the Portfolio) and the borrower issuing the note.
The principal and/or interest payments depend on the performance of one or
more other securities or indices, and the values of these notes will therefore
fall or rise in response to the changes in the values of the underlying security
or index. They are subject to both credit and interest rate risks and therefore
a Portfolio could receive more or less than it originally invested when the
notes mature, or it might receive less interest than the stated coupon payment
if the underlying investment or index does not perform as anticipated. Their
values may be very volatile and they may have a limited trading market, making
it difficult for a Portfolio to sell its investment at an acceptable price.
|X| Inverse Floaters (All Portfolios except Growth Portfolio and
Oppenheimer International Growth Fund/VA). "Inverse floaters" are debt
obligations on which the interest rates typically fall as market rates increase
and increase as market rates fall. Changes in market interest rates or the
floating rate of the security inversely affect the residual interest rate of an
inverse floater. As a result, the price of an inverse floater will be
considerably more volatile than that of a fixed-rate obligation when interest
rates change.
To provide investment leverage, an issuer might decide to issue two
variable rate obligations instead of a single long-term, fixed-rate bond. The
interest rate on one obligation reflects short-term interest rates. The interest
rate on the other instrument, the inverse floater, reflects the approximate rate
the issuer would have paid on a fixed-rate bond, multiplied by a factor of two,
minus the rate paid on the short-term instrument. The two portions may be
recombined to create a fixed-rate bond. A Portfolio might acquire both portions
of that type of offering, to reduce the effect of the volatility of the
individual securities. This provides a flexible portfolio management tool to
vary the degree of investment leverage efficiently under different market
conditions.
Inverse floaters may offer relatively high current income, reflecting the
spread between short-term and long-term tax-exempt interest rates. As long as
the yield curve remains relatively steep and short term rates remain relatively
low, owners of inverse floaters will have the opportunity to earn interest at
above-market rates because they receive interest at the higher long-term rates
but have paid for bonds with lower short-term rates. If the yield curve flattens
and shifts upward, an inverse floater will lose value more quickly than a
conventional long-term bond. A Portfolio might invest in inverse floaters to
seek higher yields than are available from fixed-rate bonds that have comparable
maturities and credit ratings. In some cases, the holder of an inverse floater
may have an option to convert the floater to a fixed-rate bond, pursuant to a
"rate-lock" option.
Some inverse floaters have a feature known as an interest rate "cap" as
part of the terms of the investment. Investing in inverse floaters that have
interest rate caps might be part of a portfolio strategy to try to maintain a
high current yield for a Portfolio when the Portfolio has invested in inverse
floaters that expose the Portfolio to the risk of short-term interest rate
fluctuations. "Embedded" caps might be used to hedge a portion of a Portfolio's
exposure to rising interest rates. When interest rates exceed a pre-determined
rate, the cap generates additional cash flows that offset the decline in
interest rates on the inverse floater, and the hedge is successful. However, the
Portfolio bears the risk that if interest rates do not rise above the
pre-determined rate, the cap (which is purchased for additional cost) will not
provide additional cash flows and will expire worthless.
Inverse floaters are a form of derivative investment. Certain derivatives,
can be used to increase or decrease a Portfolio's exposure to changing security
prices, interest rates or other factors that affect the value of securities.
However, these techniques could result in losses to a Portfolio if the portfolio
manager judges market conditions incorrectly or employs a strategy that does not
correlate well with the Portfolio's other investments. These techniques can
cause losses if the counterparty does not perform its promises. An additional
risk of investing in securities that are derivative investments is that their
market value could be expected to vary to a much greater extent than the market
value of securities that are not derivative investments but have similar credit
quality, redemption provisions and maturities.
|X| Investing in Small, Unseasoned Companies (LifeSpan Portfolios Only).
Each LifeSpan Portfolio may invest up to 5% of its total assets in securities of
small, unseasoned companies. These are companies that have been in operation for
less than three years, including the operations of any predecessors. These
securities may be more volatile in their prices than securities of more
established companies. They may have a limited trading market, which may make it
difficult for a Portfolio to dispose of them at an acceptable price when it
wants to do so. If other investors that own a security for which there is
limited liquidity trade the security when a Portfolio is attempting to dispose
of its holdings of that security, the Portfolio might receive a lower price for
its holdings than it expected.
|X| Reverse Repurchase Agreements (LifeSpan Portfolios Only). The LifeSpan
Portfolios can use reverse repurchase agreements as a cash management tool, but
not as a source of leverage for investing. They do not currently use reverse
repurchase agreements, but may do so in the future. When a Portfolio enters into
a reverse repurchase agreement, it segregates on its books an amount of cash or
U.S. government securities equal in value to the purchase price of the
securities it has committed to buy, plus accrued interest, until the payment is
made to the seller. Before a Portfolio enters into a reverse repurchase
agreement, the Manager or relevant Sub-Advisor must evaluate the
creditworthiness of the seller, typically a bank or broker-dealer and will
monitor it during the transaction.
|X| Loans of Portfolio Securities (All Portfolios). Besides using
repurchase transactions, each Portfolio can lend its portfolio securities in
amounts up to 10% of the Portfolio's total assets. Loans can be made to brokers,
dealers and other types of financial institutions approved by the Board of
Directors. The Portfolios currently do not use this strategy, but if they do so
they expect to limit such loans to not more than 5% of their total assets.
There are some risks in connection with securities lending. A Portfolio
might experience a delay in receiving additional collateral to secure a loan, or
a delay in recovery of the loaned securities if the borrower defaults. A
Portfolio must receive collateral for a loan. Under current applicable
regulatory requirements (which are subject to change), on each business day the
loan collateral must be at least equal to the value of the loaned securities. It
must consist of cash, bank letters of credit or securities of the U.S.
government or its agencies or instrumentalities, or other cash equivalents in
which the Portfolio is permitted to invest. To be acceptable as collateral,
letters of credit must obligate a bank to pay amounts demanded by the Portfolio
if the demand meets the terms of the letter. The terms of the letter of credit
and the issuing bank both must be satisfactory to the Portfolio.
When it lends securities, a Portfolio receives amounts equal to the
dividends or interest on loaned securities. It also receives one or more of (a)
negotiated loan fees, (b) interest on securities used as collateral, and (c)
interest on any short-term debt securities purchased with such loan collateral.
Either type of interest may be shared with the borrower. A Portfolio may also
pay reasonable finder's, custodian and administrative fees in connection with
these loans. The terms of these loans must meet applicable tests under the
Internal Revenue Code and must permit a Portfolio to reacquire loaned securities
on five days' notice or in time to vote on any important matter.
|X| Hedging (All Portfolios). Although the Portfolios can use certain
hedging instruments and techniques, they are not obligated to use them in
seeking their objectives. A Portfolio's strategy of hedging with futures and
options on futures will be incidental to the Portfolio's activities in the
underlying cash market. The particular hedging instruments each Portfolios can
use are described below.
|_| Call and Put Options. The Portfolios have different policies and
restrictions regarding the purchase and sale of call and put options.
o All Portfolios can write (sell) exchange-traded covered call options on
securities, currencies and securities indices.
o The LifeSpan Portfolios can buy call options that are either
exchange-traded or over-the-counter (OTC) options on securities,
currencies or securities indices.
o Oppenheimer International Growth Fund/VA and Government Securities
Portfolio can buy exchange-traded call options on securities,
currencies and securities indices.
o Oppenheimer International Growth Fund/VA and the LifeSpan Portfolios can
purchase options on currency in the over-the-counter markets.
o A LifeSpan Portfolio may not write covered call or put options with
respect to more than 25% of the value of its total assets.
o A LifeSpan Portfolio may not invest more than 25% of its total assets in
protective put options.
o A LifeSpan Portfolio may not invest more than 5% of its total
assets in puts, calls, spreads or straddles, or any combination of
them, other than protective put options.
o The aggregate value of premiums paid on all options, other than
protective put options, held by a LifeSpan Portfolio at any time
may not exceed 20% of that Portfolio's total assets.
Call options can be used as a hedge against possible decreases in the
prices of investment securities held by a Portfolio or against an increase in
price of a security the Portfolio contemplates buying. Covered call options can
be used to generate income.
|_| Writing Covered Call Options (All Portfolios). The Portfolios can
write (that is, sell) covered calls. If a Portfolio sells a call option, it must
be covered. That means the Portfolio must own the security subject to the call
while the call is outstanding, or, for certain calls on indices and currencies,
the call may be covered by segregating liquid assets to enable that Portfolio to
satisfy its obligations if the call is exercised. Up to 20% of each Portfolio's
total assets may be subject to calls the Portfolio writes.
When a Portfolio writes a call on a security, it receives cash (a
premium). That Portfolio agrees to sell the underlying security to a purchaser
of a corresponding call on the same security during the call period at a fixed
exercise price regardless of market price changes during the call period. The
call period is usually not more than nine months. The exercise price may differ
from the market price of the underlying security. The Portfolio shares the risk
of loss that the price of the underlying security may decline during the call
period. That risk may be offset to some extent by the premium the Portfolio
receives. If the value of the investment does not rise above the call price, it
is likely that the call will lapse without being exercised. In that case the
Portfolio would keep the cash premium and the investment.
When a Portfolio writes a call on an index, it receives cash (a premium).
If the buyer of the call exercises it, the Portfolio will pay an amount of cash
equal to the difference between the closing price of the call and the exercise
price, multiplied by a specified multiple that determines the total value of the
call for each point of difference. If the value of the underlying investment
does not rise above the call price, it is likely that the call will lapse
without being exercised. In that case the Portfolio would keep the cash premium.
The Portfolios' custodian bank, or a securities depository acting for the
Custodian, will act as the Portfolios' escrow agent, through the facilities of
the Options Clearing Corporation ("OCC"), as to the investments on which a
Portfolio has written calls traded on exchanges or as to other acceptable escrow
securities. In that way, no margin will be required for such transactions. OCC
will release the securities on the expiration of the option or when the
Portfolios enter into a closing transaction.
When a LifeSpan Portfolio writes an over-the-counter ("OTC") option, it
will enter into an arrangement with a primary U.S. government securities dealer
that will establish a formula price at which the Portfolio will have the
absolute right to repurchase that OTC option. The formula price will generally
be based on a multiple of the premium received for the option, plus the amount
by which the option is exercisable below the market price of the underlying
security (that is, the option is "in the money"). When a LifeSpan Portfolio
writes an OTC option, it will treat as illiquid (for purposes of its restriction
on holding illiquid securities) the mark-to-market value of any OTC option it
holds, unless the option is subject to a buy-back agreement by the executing
broker.
To terminate its obligation on a call it has written, a Portfolio may
purchase a corresponding call in a "closing purchase transaction." The Portfolio
will then realize a profit or loss, depending upon whether the net of the amount
of the option transaction costs and the premium received on the call the
Portfolio wrote is more or less than the price of the call the Portfolio
purchases to close out the transaction. The Portfolio may realize a profit if
the call expires unexercised, because the Portfolio will retain the underlying
security and the premium it received when it wrote the call. Any such profits
are considered short-term capital gains for federal income tax purposes, as are
the premiums on lapsed calls. If a Portfolio cannot effect a closing purchase
transaction due to the lack of a market, it will have to hold the callable
securities until the call expires or is exercised.
The Portfolios may also write calls on a futures contract without owning
the futures contract or securities deliverable under the contract. The
Portfolios may use call options on futures contracts solely for bona fide
hedging purposes. To do so, at the time the call is written, the Portfolios must
cover the call by segregating on its books an equivalent dollar amount of liquid
assets. A Portfolio will segregate additional liquid assets if the value of the
segregated assets drops below 100% of the current value of the future. Because
of this segregation requirement, in no circumstances would a Portfolio's receipt
of an exercise notice as to that future require the Portfolios to deliver a
futures contract. It would simply put the Portfolio in a short futures position,
which is permitted by the Portfolios' hedging policies.
|_| Writing Put Options. The LifeSpan Portfolios can sell put options
on securities, securities indices, foreign currencies and futures. Oppenheimer
International Growth Fund/VA can also sell put options on futures. A put option
on securities gives the purchaser the right to sell, and the writer the
obligation to buy, the underlying investment at the exercise price during the
option period.
If a LifeSpan Portfolio writes a put, the put must be covered by liquid
assets identified on the Portfolio's books. The premium the Portfolio receives
from writing a put represents a profit, as long as the price of the underlying
investment remains equal to or above the exercise price of the put. However, the
Portfolio also assumes the obligation during the option period to buy the
underlying investment from the buyer of the put at the exercise price, even if
the value of the investment falls below the exercise price.
If a put a Portfolio has written expires unexercised, the Portfolio
realizes a gain in the amount of the premium less the transaction costs
incurred. If the put is exercised, the Portfolio must fulfill its obligation to
purchase the underlying investment at the exercise price. That price will
usually exceed the market value of the investment at that time. In that case,
the Portfolio may incur a loss if it sells the underlying investment. That loss
will be equal to the sum of the sale price of the underlying investment and the
premium received minus the sum of the exercise price and any transaction costs
the Portfolio incurred.
When writing a put option on a security, to secure its obligation to pay
for the underlying security a Portfolio will identify on its books liquid assets
with a value equal to or greater than the exercise price of the underlying
securities. The Portfolio therefore forgoes the opportunity of investing the
segregated assets or writing calls against those assets.
As long as a Portfolio's obligation as the put writer continues, it may be
assigned an exercise notice by the broker-dealer through which the put was sold.
That notice will require the Portfolio to take delivery of the underlying
security and pay the exercise price. The Portfolio has no control over when it
may be required to purchase the underlying security, since it may be assigned an
exercise notice at any time prior to the termination of its obligation as the
writer of the put. That obligation terminates upon expiration of the put. It may
also terminate if, before it receives an exercise notice, the Portfolio effects
a closing purchase transaction by purchasing a put of the same series as it
sold. Once the Portfolio has been assigned an exercise notice, it cannot effect
a closing purchase transaction.
A Portfolio may decide to effect a closing purchase transaction to realize
a profit on an outstanding put option it has written or to prevent the
underlying security from being put. Effecting a closing purchase transaction
will also permit the Portfolio to write another put option on the security, or
to sell the security and use the proceeds from the sale for other investments.
The Portfolio will realize a profit or loss from a closing purchase transaction
depending on whether the cost of the transaction is less or more than the
premium received from writing the put option. Any profits from writing puts are
considered short-term capital gains for federal tax purposes.
|_| Purchasing Calls and Puts. The Oppenheimer International Growth
Fund/VA, Government Securities Portfolio and LifeSpan Portfolios can purchase
calls on securities, securities indices, and foreign currencies. Oppenheimer
International Growth Fund/VA and the LifeSpan Portfolios can also buy put and
call options on futures. A Portfolio might do so to protect against the
possibility that its investment portfolio will not participate in an anticipated
rise in the securities market. When a Portfolio buys a call (other than in a
closing purchase transaction), it pays a premium. The Portfolio then has the
right to buy the underlying investment from a seller of a corresponding call on
the same investment during the call period at a fixed exercise price.
The Portfolio benefits only if it sells the call at a profit or if, during
the call period, the market price of the underlying investment is above the sum
of the call price plus the transaction costs and the premium paid for the call
and the Portfolio exercises the call. If the Portfolio does not exercise the
call or sell it (whether or not at a profit), the call will become worthless at
its expiration date. In that case the Portfolio will have paid the premium but
lost the right to purchase the underlying investment.
The LifeSpan Portfolios can buy puts on securities, broadly-based
securities indices, foreign currencies and futures, whether or not they own the
underlying investment. When a Portfolio purchases a put, it pays a premium and,
except as to puts on indices, has the right to sell the underlying investment to
a seller of a put on a corresponding investment during the put period at a fixed
exercise price.
Buying a put on securities or futures a Portfolio owns enables the
Portfolio to attempt to protect itself during the put period against a decline
in the value of the underlying investment below the exercise price by selling
the underlying investment at the exercise price to a seller of a corresponding
put. If the market price of the underlying investment is equal to or above the
exercise price and, as a result, the put is not exercised or resold, the put
will become worthless at its expiration date. In that case the Portfolio will
have paid the premium but lost the right to sell the underlying investment.
However, the Portfolio may sell the put prior to its expiration. That sale may
or may not be at a profit.
Buying a put on an investment a Portfolio does not own (such as an index
or future) permits the Portfolio either to resell the put or to buy the
underlying investment and sell it at the exercise price. The resale price will
vary inversely to the price of the underlying investment. If the market price of
the underlying investment is above the exercise price and, as a result, the put
is not exercised, the put will become worthless on its expiration date.
When a Portfolio purchases a call or put on an index or future, it pays a
premium, but settlement is in cash rather than by delivery of the underlying
investment to the Portfolio. Gain or loss depends on changes in the index in
question (and thus on price movements in the securities market generally) rather
than on price movements in individual securities or futures contracts.
|_| Buying and Selling Options on Foreign Currencies. All Portfolios
can sell exchange-traded call options on foreign currencies. Government
Securities Portfolio, the LifeSpan Portfolios and Oppenheimer International
Growth Fund/VA can also buy exchange-traded calls on foreign currencies.
Oppenheimer International Growth Fund/VA and the LifeSpan Portfolios can buy
call options on currencies in the OTC markets. The LifeSpan Portfolios can also
buy and sell put options on foreign currencies. A Portfolio could use these
calls to try to protect against declines in the dollar value of foreign
securities and increases in the dollar cost of foreign securities the Portfolio
wants to acquire.
If a portfolio manager anticipates a rise in the dollar value of a foreign
currency in which securities to be acquired are denominated, the increased cost
of those securities may be partially offset by purchasing calls on that foreign
currency. If the portfolio manager anticipates a decline in the dollar value of
a foreign currency, the decline in the dollar value of portfolio securities
denominated in that currency might be partially offset by writing calls on that
foreign currency. However, the currency rates could fluctuate in a direction
adverse to the Portfolios' position. The Portfolio will then have incurred
option premium payments and transaction costs without a corresponding benefit.
A call written on a foreign currency is "covered" if the Portfolio owns
the underlying foreign currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or it can do so for additional cash consideration held in a
segregated account by its custodian bank) upon conversion or exchange of other
foreign currency held in its portfolio.
A Portfolio could write a call on a foreign currency to provide a hedge
against a decline in the U.S. dollar value of a security which the Portfolio
owns or has the right to acquire and which is denominated in the currency
underlying the option. That decline might be one that occurs due to an expected
adverse change in the exchange rate. This is known as a "cross-hedging"
strategy. In those circumstances, the Portfolio covers the option by identifying
liquid assets on its books in an amount equal to the exercise price of the
option.
|_| Futures. The Portfolios have different policies and limitations
on the purchase and sale of futures contracts:
o Each Portfolio can buy and sell future contracts on stock indices.
o Total Return Portfolio, Oppenheimer International Growth Fund/VA,
Government Securities Portfolio, and each LifeSpan Portfolio may
buy and sell interest rate futures contracts.
o Each portfolio that can invest in securities denominated in foreign
currency can purchase and sell futures on foreign currencies.
o Total Return Portfolio, Oppenheimer International Growth Fund/VA and
Government Securities Portfolio can buy and sell futures
contracts related to financial indices.
A broadly-based stock index is used as the basis for trading stock index
futures. In some cases, these futures may be based on stocks of issuers in a
particular industry or group of industries. A stock index assigns relative
values to the common stocks included in the index and its value fluctuates in
response to the changes in value of the underlying stocks. A stock index cannot
be purchased or sold directly. Bond index futures are similar contracts based on
the future value of the basket of securities that comprise the index. These
contracts obligate the seller to deliver, and the purchaser to take, cash to
settle the futures transaction. There is no delivery made of the underlying
securities to settle the futures obligation. Either party may also settle the
transaction by entering into an offsetting contract.
An interest rate future obligates the seller to deliver (and the purchaser
to take) cash or a specified type of debt security to settle the futures
transaction. Either party could also enter into an offsetting contract to close
out the position.
No money is paid or received by a Portfolio on the purchase or sale of a
future. Upon entering into a futures transaction, the Portfolio will be required
to deposit an initial margin payment with the futures commission merchant (the
"futures broker"). Initial margin payments will be deposited with the
Portfolio's custodian bank in an account registered in the futures broker's
name. However, the futures broker can gain access to that account only under
specified conditions. As the future is marked to market (that is, its value on
that Portfolio's books is changed) to reflect changes in its market value,
subsequent margin payments, called variation margin, will be paid to or by the
futures broker daily.
At any time prior to expiration of the future, a Portfolio may elect to
close out its position by taking an opposite position, at which time a final
determination of variation margin is made and any additional cash must be paid
by or released to that Portfolio. Any loss or gain on the future is then
realized by that Portfolio for tax purposes. All futures transactions are
effected through a clearinghouse associated with the exchange on which the
contracts are traded.
|_| Forward Contracts (All Portfolios except Government Securities
Portfolio). Forward contracts are foreign currency exchange contracts. They are
used to buy or sell foreign currency for future delivery at a fixed price. A
Portfolio can use them to "lock in" the U.S. dollar price of a security
denominated in a foreign currency that the Portfolio has bought or sold, or to
protect against possible losses from changes in the relative values of the U.S.
dollar and a foreign currency. A Portfolio may also use "cross-hedging" where
the Portfolio hedges against changes in currencies other than the currency in
which a security it holds is denominated.
Under a forward contract, one party agrees to purchase, and another party
agrees to sell, a specific currency at a future date. That date may be any fixed
number of days from the date of the contract agreed upon by the parties. The
transaction price is set at the time the contract is entered into. These
contracts are traded in the inter-bank market conducted directly among currency
traders (usually large commercial banks) and their customers.
A Portfolio may use forward contracts to protect against uncertainty in
the level of future exchange rates. The use of forward contracts does not
eliminate the risk of fluctuations in the prices of the underlying securities
the Portfolio owns or intends to acquire, but it does fix a rate of exchange in
advance. Although forward contracts may reduce the risk of loss from a decline
in the value of the hedged currency, at the same time they limit any potential
gain if the value of the hedged currency increases.
When a Portfolio enters into a contract for the purchase or sale of a
security denominated in a foreign currency, or when it anticipates receiving
dividend payments in a foreign currency, the Portfolio might desire to "lock-in"
the U.S. dollar price of the security or the U.S. dollar equivalent of the
dividend payments. To do so, the Portfolio could enter into a forward contract
for the purchase or sale of the amount of foreign currency involved in the
underlying transaction, in a fixed amount of U.S. dollars per unit of the
foreign currency. This is called a "transaction hedge." The transaction hedge
will protect the Portfolio against a loss from an adverse change in the currency
exchange rates during the period between the date on which the security is
purchased or sold or on which the payment is declared, and the date on which the
payments are made or received.
A Portfolio could also use forward contracts to lock in the U.S. dollar
value of portfolio positions. This is called a "position hedge." When a
portfolio manager believes that foreign currency might suffer a substantial
decline against the U.S. dollar, the Portfolio could enter into a forward
contract to sell an amount of that foreign currency approximating the value of
some or all of the Portfolio's investment securities denominated in that foreign
currency. When a portfolio manager believes that the U.S. dollar might suffer a
substantial decline against a foreign currency, the Portfolio could enter into a
forward contract to buy that foreign currency for a fixed dollar amount.
Alternatively, a Portfolio could enter into a forward contract to sell a
different foreign currency for a fixed U.S. dollar amount if the portfolio
manager believes that the U.S. dollar value of the foreign currency to be sold
pursuant to its forward contract will fall whenever there is a decline in the
U.S. dollar value of the currency in which securities of the Portfolio are
denominated. That is referred to as a "cross hedge."
A Portfolio will cover its short positions in these cases by identifying
on its books liquid assets having a value equal to the aggregate amount of the
Portfolio's commitment under forward contracts. A Portfolio will not enter into
forward contracts or maintain a net exposure to such contracts if the
consummation of the contracts would obligate the Portfolio to deliver an amount
of foreign currency in excess of the value of its portfolio securities or other
assets denominated in that currency or another currency that is the subject of
the hedge.
However, to avoid excess transactions and transaction costs, a Portfolio
may maintain a net exposure to forward contracts in excess of the value of its
portfolio securities or other assets denominated in foreign currencies if the
excess amount is "covered" by liquid securities denominated in any currency. The
cover must be at least equal at all times to the amount of that excess. As one
alternative, the Portfolio may purchase a call option permitting it to purchase
the amount of foreign currency being hedged by a forward sale contract at a
price no higher than the forward contract price. As another alternative, the
Portfolio may purchase a put option permitting it to sell the amount of foreign
currency subject to a forward purchase contract at a price as high or higher
than the forward contract price.
The precise matching of the amounts under forward contracts and the value
of the securities involved generally will not be possible because the future
value of securities denominated in foreign currencies will change as a
consequence of market movements between the date the forward contract is entered
into and the date it is sold. In some cases the portfolio manager might decide
to sell the security and deliver foreign currency to settle the original
purchase obligation. If the market value of the security is less than the amount
of foreign currency the Portfolio is obligated to deliver, the Portfolio might
have to purchase additional foreign currency on the "spot" (that is, cash)
market to settle the security trade. If the market value of the security instead
exceeds the amount of foreign currency the Portfolio is obligated to deliver to
settle the trade, the Portfolio might have to sell on the spot market some of
the foreign currency received upon the sale of the security. There will be
additional transaction costs on the spot market in those cases.
The projection of short-term currency market movements is extremely
difficult, and the successful execution of a short-term hedging strategy is
highly uncertain. Forward contracts involve the risk that anticipated currency
movements will not be accurately predicted, causing a Portfolio to sustain
losses on these contracts and to pay additional transactions costs. The use of
forward contracts in this manner might reduce a Portfolio's performance if there
are unanticipated changes in currency prices to a greater degree than if the
Portfolio had not entered into such contracts.
At or before the maturity of a forward contract requiring a Portfolio to
sell a currency, the Portfolio might sell a portfolio security and use the sale
proceeds to make delivery of the currency. In the alternative it might retain
the security and offset its contractual obligation to deliver the currency by
purchasing a second contract. Under that contract the Portfolio will obtain, on
the same maturity date, the same amount of the currency that it is obligated to
deliver. Similarly, the Portfolio might close out a forward contract requiring
it to purchase a specified currency by entering into a second contract entitling
it to sell the same amount of the same currency on the maturity date of the
first contract. The Portfolio would realize a gain or loss as a result of
entering into such an offsetting forward contract under either circumstance. The
gain or loss will depend on the extent to which the exchange rate or rates
between the currencies involved moved between the execution dates of the first
contract and offsetting contract.
The costs to a Portfolio of engaging in forward contracts varies with
factors such as the currencies involved, the length of the contract period and
the market conditions then prevailing. Because forward contracts are usually
entered into on a principal basis, no brokerage fees or commissions are
involved. Because these contracts are not traded on an exchange, the Fund must
evaluate the credit and performance risk of the counterparty under each forward
contract.
Although each Portfolio values its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. A Portfolio may convert foreign currency from time to
time, and will incur costs in doing so. Foreign exchange dealers do not charge a
fee for conversion, but they do seek to realize a profit based on the difference
between the prices at which they buy and sell various currencies. Thus, a dealer
might offer to sell a foreign currency to a Portfolio at one rate, while
offering a lesser rate of exchange if the Portfolio desires to resell that
currency to the dealer.
|_| Interest Rate Swap Transactions (Government Securities Portfolio and
the LifeSpan Portfolios). In an interest rate swap, a Portfolio and another
party exchange their right to receive or their obligation to pay interest on a
security. For example, they might swap the right to receive floating rate
payments for fixed rate payments. A Portfolio can enter into swaps only on
securities that it owns and will not enter into swaps with respect to more than
25% of its total assets. Also, a Portfolio will identify on its books liquid
assets (such as cash or U.S. government securities) to cover any amounts it
could owe under swaps that exceed the amounts it is entitled to receive, and it
will adjust that amount daily, as needed.
Swap agreements entail both interest rate risk and credit risk. There is a
risk that, based on movements of interest rates in the future, the payments made
by a Portfolio under a swap agreement will be greater than the payments it
received. Credit risk arises from the possibility that the counterparty will
default. If the counterparty defaults, the Portfolio's loss will consist of the
net amount of contractual interest payments that the Portfolio has not yet
received. The Manager or relevant Sub-Advisor will monitor the creditworthiness
of counterparties to a Portfolio's interest rate swap transactions on an ongoing
basis.
A Portfolio can enter into swap transactions with certain counterparties
pursuant to master netting agreements. A master netting agreement provides that
all swaps done between the Portfolio and that counterparty shall be regarded as
parts of an integral agreement. If amounts are payable on a particular date in
the same currency in respect of one or more swap transactions, the amount
payable on that date in that currency shall be the net amount. In addition, the
master netting agreement may provide that if one party defaults generally or on
one swap, the counterparty may terminate all of the swaps with that party. Under
these agreements, if a default results in a loss to one party, the measure of
that party's damages is calculated by reference to the average cost of a
replacement swap for each swap. It is measured by the mark-to-market value at
the time of the termination of each swap. The gains and losses on all swaps are
then netted, and the result is the counterparty's gain or loss on termination.
The termination of all swaps and the netting of gains and losses on termination
is generally referred to as "aggregation."
|_| Risks of Hedging with Options and Futures. The use of hedging
instruments requires special skills and knowledge of investment techniques that
are different than what is required for normal portfolio management. If the
Manager or relevant Sub-Advisor uses a hedging instrument at the wrong time or
judges market conditions incorrectly, hedging strategies may reduce a
Portfolio's return. A Portfolio could also experience losses if the prices of
its futures and options positions were not correlated with its other
investments.
A Portfolio's option activities could affect its portfolio turnover rate,
brokerage commissions and transaction costs. The exercise of calls written by a
Portfolio might cause the Portfolio to sell related portfolio securities, thus
increasing its turnover rate. The exercise by a Portfolio of puts on securities
will cause the sale of underlying investments, increasing portfolio turnover.
Although the decision whether to exercise a put it holds is within the
Portfolio's control, holding a put might cause that Portfolio to sell the
related investments for reasons that would not exist in the absence of the put.
A Portfolio could pay a brokerage commission each time they buy a call or
put, sell a call or put, or buy or sell an underlying investment in connection
with the exercise of a call or put. Those commissions could be higher on a
relative basis than the commissions for direct purchases or sales of the
underlying investments. Premiums paid for options are small in relation to the
market value of the underlying investments. Consequently, put and call options
offer large amounts of leverage. The leverage offered by trading in options
could result in a Portfolio's net asset value being more sensitive to changes in
the value of the underlying investment.
If a covered call written by a Portfolio is exercised on an investment
that has increased in value, that Portfolio will be required to sell the
investment at the call price. It will not be able to realize any profit if the
investment has increased in value above the call price.
An option position may be closed out only on a market that provides
secondary trading for options of the same series, and there is no assurance that
a liquid secondary market will exist for any particular option. A Portfolio
might experience losses if it could not close out a position because of an
illiquid market for the future or option.
There is a risk in using short hedging by selling futures or purchasing
puts on broadly-based indices or futures to attempt to protect against declines
in the value of a Portfolio's investment securities. The risk is that the prices
of the futures or the applicable index will correlate imperfectly with the
behavior of the cash prices of the Portfolio's securities. For example, it is
possible that while the Portfolio has used hedging instruments in a short hedge,
the market might advance and the value of the securities held by the Portfolio
might decline. If that occurred, the Portfolio would lose money on the hedging
instruments and also experience a decline in the value of its investment
securities. However, while this could occur for a very brief period or to a very
small degree, over time the value of a diversified portfolio of securities will
tend to move in the same direction as the indices upon which the hedging
instruments are based.
The risk of imperfect correlation increases as the composition of a
Portfolio's investments diverges from the securities included in the applicable
index. To compensate for the imperfect correlation of movements in the price of
the investments being hedged and movements in the price of the hedging
instruments, a Portfolio might use hedging instruments in a greater dollar
amount than the dollar amount of portfolio securities being hedged. It might do
so if the historical volatility of the prices of the portfolio securities being
hedged is more than the historical volatility of the applicable index.
The ordinary spreads between prices in the cash and futures markets are
subject to distortions, due to differences in the nature of those markets.
First, all participants in the futures market are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close futures contracts through offsetting
transactions which could distort the normal relationship between the cash and
futures markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced, thus producing distortion. Third, from
the point of view of speculators, the deposit requirements in the futures market
are less onerous than margin requirements in the securities markets. Therefore,
increased participation by speculators in the futures market may cause temporary
price distortions.
A Portfolio can use hedging instruments to establish a position in the
securities markets as a temporary substitute for the purchase of individual
securities (long hedging) by buying futures and/or calls on such futures,
broadly-based indices or on securities. It is possible that when the Portfolio
does so the market might decline. If the Portfolio then concludes not to invest
in securities because of concerns that the market might decline further or for
other reasons, the Portfolio will realize a loss on the hedging instruments that
is not offset by a reduction in the price of the securities purchased.
|_| Regulatory Aspects of Hedging Instruments. When using futures and
options on futures, the Portfolios are required to operate within certain
guidelines and restrictions with respect to the use of futures as established by
the Commodities Futures Trading Commission (the "CFTC"). In particular, each
Portfolio is exempted from registration with the CFTC as a "commodity pool
operator" if the Portfolio complies with the requirements of Rule 4.5 adopted by
the CFTC. The Rule does not limit the percentage of the Portfolio's assets that
may be used for futures margin and related options premiums for a bona fide
hedging position. However, under the Rule, a Portfolio must limit their
aggregate initial futures margin and related options premiums to not more than
5% of the Portfolio's net assets for hedging strategies that are not considered
bona fide hedging strategies under the Rule. Under the Rule, the Portfolio must
also use short futures and options on futures solely for bona fide hedging
purposes within the meaning and intent of the applicable provisions of the
Commodity Exchange Act.
Transactions in options by the Portfolios are subject to limitations
established by the option exchanges. The exchanges limit the maximum number of
options that may be written or held by a single investor or group of investors
acting in concert. Those limits apply regardless of whether the options were
written or purchased on the same or different exchanges or are held in one or
more accounts or through one or more different exchanges or through one or more
brokers. Thus, the number of options that a Portfolio may write or hold may be
affected by options written or held by other entities, including other
investment companies having the same adviser as the Portfolio (or an adviser
that is an affiliate of the Portfolio's investment advisor). The exchanges also
impose position limits on futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits and may impose
certain other sanctions.
Under the Investment Company Act, when a Portfolio purchases a future, it
must maintain cash or readily marketable short-term debt instruments in an
amount equal to the market value of the securities underlying the future, less
the margin deposit applicable to it.
|_| Tax Aspects of Certain Hedging Instruments. Certain foreign currency
exchange contracts in which the Portfolios may invest are treated as "Section
1256 contracts" under the Internal Revenue Code. In general, gains or losses
relating to Section 1256 contracts are characterized as 60% long-term and 40%
short-term capital gains or losses under the Code. However, foreign currency
gains or losses arising from Section 1256 contracts that are forward contracts
generally are treated as ordinary income or loss. In addition, Section 1256
contracts held by the Portfolios at the end of each taxable year are
"marked-to-market," and unrealized gains or losses are treated as though they
were realized. An election can be made by the Portfolios to exempt those
transactions from this marked-to-market treatment.
Certain forward contracts the Portfolios enter into may result in
"straddles" for Federal income tax purposes. The straddle rules may affect the
character and timing of gains (or losses) recognized by a Portfolio on straddle
positions. Generally, a loss sustained on the disposition of a position making
up a straddle is allowed only to the extent that the loss exceeds any
unrecognized gain in the offsetting positions making up the straddle. Disallowed
loss is generally allowed at the point where there is no unrecognized gain in
the offsetting positions making up the straddle, or the offsetting position is
disposed of.
Under the Internal Revenue Code, the following gains or losses are treated
as ordinary income or loss: (1) gains or losses attributable to fluctuations in
exchange rates that
occur between the time a Portfolio accrues interest or other receivables
or accrues expenses or other liabilities denominated in a foreign
currency and the time the Portfolio actually collects such receivables
or pay such liabilities, and
(2) gains or losses attributable to fluctuations in the value of a foreign
currency between the date of acquisition of a debt security denominated
in a foreign currency or foreign currency forward contracts and the date
of disposition.
Currency gains and losses are offset against market gains and losses on
each trade before determining a net "Section 988" gain or loss under the
Internal Revenue Code for that trade, which may increase or decrease the amount
of a Portfolio's investment income available for distribution to its
shareholders.
|X| Temporary Defensive Investments. When market conditions are
unstable, or the Manager believes it is otherwise appropriate to reduce
holdings in stocks, the Portfolios can invest in a variety of debt securities
for defensive purposes. The Portfolios can also purchase these securities
for liquidity purposes to meet cash needs due to the redemption of Portfolio
shares, or to hold while waiting to reinvest cash received from the sale of
other portfolio securities. The Portfolios can buy:
|_| obligations issued or guaranteed by the U. S. government or its
instrumentalities or agencies,
|_| commercial paper (short-term, unsecured, promissory notes of domestic
or foreign companies) rated in the three top rating categories of a
nationally recognized rating organization,
|_| short-term debt obligations of corporate issuers, rated investment
grade (rated at least Baa by Moody's Investors Service, Inc. or at
least BBB by Standard & Poor's Corporation, or a comparable rating by
another rating organization), or unrated securities judged by the
Manager to have a comparable quality to rated securities in those
categories,
|_| certificates of deposit and bankers' acceptances of domestic and foreign
banks having total assets in excess of U.S. $1 billion, and
|_| repurchase agreements.
Short-term debt securities would normally be selected for defensive or
cash management purposes because they can normally be disposed of quickly, are
not generally subject to significant fluctuations in principal value and their
value will be less subject to interest rate risk than longer-term debt
securities.
Investment Restrictions
|X| What Are "Fundamental Policies?" Fundamental policies are those
policies that each Portfolio has adopted to govern its investments that can be
changed only by the vote of a "majority" of the Portfolio's outstanding voting
securities. Under the Investment Company Act, a "majority" vote is defined as
the vote of the holders of the lesser of:
|_| 67% or more of the shares present or represented by proxy at a
shareholder meeting, if the holders of more than 50% of the outstanding
shares are present or represented by proxy, or |_| more than 50% of the
outstanding shares.
The Portfolios' investment objectives are not fundamental policies, but
will not be changed by the Board of Directors without advance notice to
shareholders. Other policies described in the Prospectus or this Statement of
Additional Information are "fundamental" only if they are identified as such.
The Board of Directors can change non-fundamental policies without shareholder
approval. However, significant changes to investment policies will be described
in supplements or updates to the Prospectus or this Statement of Additional
Information, as appropriate. The Portfolios' most significant investment
policies are described in the Prospectus.
|X| Do the Portfolios Have Additional Fundamental Policies? The
following investment restrictions are fundamental policies of Total Return
Portfolio, Growth Portfolio, Government Securities Portfolio and Oppenheimer
International Growth Fund/VA.
|_| A Portfolio cannot issue "senior securities."
|_| A Portfolio cannot invest more than 5% of its total assets (taken at
market value at the time of each investment) in the securities of any
one issuer other than the U.S. government. That limit applies to
repurchase agreements with any one bank. A Portfolio cannot purchase
more than either (1) 10% of the principal amount of the outstanding
debt securities of an issuer or (2) 10% of the outstanding voting
securities of an issuer. This restriction does not apply to
securities issued or guaranteed by the U.S. government or its
agencies, bank money instruments or bank repurchase agreements. (This
restriction also does not apply to Government Securities Portfolio).
|_| A Portfolio cannot invest more than 25% of its total assets (taken at
market value at the time of each investment) in the securities of
issuers primarily engaged in the same industry. For the purpose of
interpreting this restriction, utilities are divided according to
their services. For example, gas, gas transmissions, electric and
telephone each are considered to be a separate industry. However,
this limitation does not apply to the purchase of obligations issued
or guaranteed by the U.S. government, its agencies or
instrumentalities, certificates of deposit issued by domestic banks
and bankers' acceptances. (This restriction does not apply to
Oppenheimer International Growth Fund/VA or Government Securities
Portfolio).
|_| A Portfolio cannot, by itself or together with any other Portfolio or
Portfolios, make investments for the purpose of exercising control
over, or management of, any issuer.
|_| A Portfolio cannot purchase securities of other investment companies,
except in connection with a merger, consolidation, acquisition or
reorganization. Another exception is purchase in the open market of
securities of closed-end investment companies if no underwriter or
dealer's commission or profit, other than customary broker's
commission, is involved, but only if immediately after the purchase
not more than 10% of the Portfolio's total assets, taken at market
value, would be invested in such securities.
|_| A Portfolio cannot purchase or sell interests in oil, gas or other
mineral exploration or development programs, commodities, commodity
contracts or real estate. However, Total Return Portfolio,
Oppenheimer International Growth Fund/VAo, Growth Portfolio, and
Government Securities Portfolio each may purchase securities of
issuers that invest or deal in any of the above and may invest for
hedging purposes in futures contracts on securities, financial
instruments and indices, and foreign currency, as are approved for
trading on a registered exchange. The Oppenheimer International
Growth Fund/VA may also invest in options on foreign futures
contracts on securities, financial instruments and indices and
foreign currency.
|_| A Portfolio cannot purchase any securities on margin, however Panorama
Series Fund may obtain such short term credits as may be necessary
for the clearance of purchases and sales of portfolio securities. A
Portfolio cannot make short sales of securities or maintain a short
position. The deposit or payment by a Portfolio of initial or
maintenance margin in connection with futures contracts or related
options transactions is not considered the purchase of a security on
margin.
|_| A Portfolio cannot make loans, except that a Portfolio (1) may lend
portfolio securities in accordance with the Portfolio's investment
policies in amounts up to 33 1/3% of the Portfolio's total assets
taken at market value, (2) can enter into repurchase agreements, and
(3) can purchase all or a portion of an issue of publicly distributed
debt securities, bank loan participation interests, bank certificates
of deposit, bankers' acceptances, debentures or other securities,
whether or not the purchase is made upon the original issuance of the
securities.
|_| A Portfolio cannot borrow amounts in excess of 10% of its total assets,
taken at market value at the time of the borrowing. It can borrow only
from banks as a temporary measure for extraordinary or emergency
purposes. A Portfolio cannot make investments in portfolio securities
while its outstanding borrowings exceed 5% of its total assets.
|_| A Portfolio cannot mortgage, pledge, hypothecate or in any manner
transfer, as security for indebtedness, any securities owned or held
by such Portfolio. An exception is made as may be necessary in
connection with borrowings mentioned in the preceding restriction.
In that case such mortgaging, pledging or hypothecating may not
exceed 10% of the Portfolio's total assets, taken at market value at
the time of the transaction. The deposit of cash equivalents and
liquid debt securities in a segregated account with the Portfolio's
custodian bank and/or with a broker in connection with futures
contracts or related options transactions and the purchase of
securities on a "when-issued" basis are not deemed to be pledges.
|_| A Portfolio cannot underwrite securities of other issuers. A permitted
exception is if the Portfolio is deemed to be an underwriter under the
1933 Act in selling its investment securities.
|_| A Portfolio cannot write, purchase or sell puts, calls or combinations
thereof. However, Total Return Portfolio and Growth Portfolio may write
covered call options and engage in closing purchase transactions. (This
restriction does not apply to Oppenheimer International Growth Fund/VA
and Government Securities Portfolio.)
|_| A Portfolio cannot invest in securities of foreign issuers if at the
time of acquisition more than 10% of its total assets, taken at
market value, would be invested in those securities. However, a
Portfolio can invest up to 25% of its total assets in securities (i)
issued, assumed or guaranteed by foreign governments, or political
subdivisions or instrumentalities thereof, (ii) assumed or guaranteed
by domestic issuers, including Eurodollar securities, or (iii)
issued, assumed or guaranteed by foreign issuers having a class of
securities listed for trading on The New York Stock Exchange. (This
restriction does not apply to Oppenheimer International Growth
Fund/VA.)
|X| Do the LifeSpan Portfolios Have Restrictions That Are Fundamental
Policies? The LifeSpan Portfolios also have restrictions that are fundamental
policies.
|_| Each LifeSpan Portfolio cannot issue senior securities, except as
permitted by its policies as to margin, borrowing money, commodities
and lending below. For purposes of this restriction, the issuance of
shares of common stock in multiple classes or series, the purchase or
sale of options, futures contracts and options on futures contracts,
forward commitments and repurchase agreements entered into in
accordance with a Portfolio's investment policies, are not deemed to
be senior securities.
|_| A LifeSpan Portfolio cannot purchase any securities on margin. However,
Panorama Series Fund may obtain such short-term credits as may be
necessary for the clearance of purchases and sales of portfolio
securities. A LifeSpan Portfolio cannot make short sales of
securities or maintain a short position. The deposit or payment by a
Portfolio of initial or maintenance margin in connection with futures
contracts or related options transactions is not considered the
purchase of a security on margin.
|_| A LifeSpan Portfolio cannot borrow money, except for emergency or
extraordinary purposes. Those purposes include (1) borrowing from
banks for temporary or short-term purposes or for the clearance of
transactions in amounts not to exceed 33 1/3% of the value of the
Portfolio's total assets (including the amount borrowed) taken at
market value, (2) borrowing in connection with the redemption of
Portfolio shares or to finance failed settlements of portfolio trades
without immediately liquidating portfolio securities or other assets;
and (3) borrowing in order to fulfill commitments or plans to
purchase additional securities pending the anticipated sale of other
portfolio securities or assets. After each such borrowing there must
be asset coverage of at least 300% as defined in the Investment
Company Act. For purposes of this investment restriction, reverse
repurchase agreements, mortgage dollar rolls, short sales, futures
contracts, options on futures contracts, securities or indices and
forward commitment transactions do not constitute borrowing.
|_| A LifeSpan Portfolio cannot act as an underwriter. A permitted
exception is to the extent that a Portfolio may be deemed to be an
underwriter for purposes of the Securities Act of 1933 in connection
with the disposition of its investment securities.
|_| A LifeSpan Portfolio cannot purchase or sell real estate. However, a
Portfolio may (1) acquire or lease office space for its own use, (2)
invest in securities of issuers that invest in real estate or interests
in real estate, (3) invest in securities that are secured by real
estate or interests in real estate, (4) purchase and sell
mortgage-related securities and (5) hold and sell real estate acquired
by the Portfolio as a result of the ownership of securities.
|_| A LifeSpan Portfolio cannot invest in commodities. However a Portfolio
may purchase and sell options on securities, securities indices and
currency, futures contracts on securities, securities indices and
currency and options on such futures, forward foreign currency exchange
contracts, forward commitments, securities index put or call options
and repurchase agreements entered into in accordance with the
Portfolio's investment policies.
|_| A LifeSpan Portfolio cannot make loans. However, a Portfolio may (1)
lend its portfolio securities in accordance with the Portfolio's
investment policies in amounts up to 33 1/3% of the Portfolio's total
assets taken at market value, (2) enter into repurchase agreements, and
(3) purchase all or a portion of an issue of publicly distributed
bonds, debentures or other similar obligations.
|_| A LifeSpan Portfolio cannot purchase the securities of issuers
conducting their principal activity in the same industry if,
immediately after such purchase, the value of its investments in that
industry would exceed 25% of its total assets taken at market value at
the time of the investment. This limitation does not apply to
investments in obligations of the U.S. government or any of its
agencies, instrumentalities or authorities.
|_| With respect to 75% of total assets, a LifeSpan Portfolio cannot
purchase securities of an issuer (other than the U.S. government, its
agencies, instrumentalities or authorities), if:
(a) that purchase would cause more than 5% of the Portfolio's total
assets taken at market value to be invested in the securities of such
issuer; or
(b) that purchase would result in the Portfolio holding more than 10% of
the outstanding voting securities of that issuer.
|X| Do the LifeSpan Portfolios Have any Other Investment Restrictions That
Are Non-Fundamental? The following restrictions of the Life Span Portfolios are
not fundamental policies and can be changed by the Board of Directors without
the approval of shareholders.
|_| A LifeSpan Portfolio cannot pledge, mortgage or hypothecate its assets,
except to secure permitted borrowings. In that case the pledge,
mortgage or hypothecation must not exceed 33 1/3% of the Portfolio's
total assets taken at market value. Collateral arrangements with
respect to margin, option and other risk management and when-issued and
forward commitment transactions are not deemed to be pledges or other
encumbrances for purposes of this restriction.
|_| A LifeSpan Portfolio cannot participate on a joint or joint-and-several
basis in any securities trading account. The "bunching" of orders for
the sale or purchase of marketable portfolio securities with other
accounts under the management of the Manager or the relevant
Sub-Advisors to save commissions or to average prices among them is not
deemed to result in a joint securities trading account.
|_| A LifeSpan Portfolio cannot purchase or retain securities of an issuer
if one or more of the Directors or officers of the Company or directors
or officers of the Manager or any Sub-Advisor or any investment
management subsidiary of the Manager or any Sub-Advisor individually
owns beneficially more than 0.5% and together own beneficially more
than 5% of the securities of such issuer.
|_| A LifeSpan Portfolio cannot purchase a security if, as a result, (1)
more than 10% of the Portfolio's assets would be invested in securities
of other investment companies, (2) the purchase would result in the
Portfolio holding more than 3% of the total outstanding voting
securities of any one investment company, or (3) more than 5% of the
Portfolio's assets would be invested in any one such investment
company.
|_| A LifeSpan Portfolio will not purchase the securities of any open-end
investment company except when the purchase is part of a plan of
merger, consolidation, reorganization or purchase of substantially all
of the assets of any other investment company.
|_| A LifeSpan Portfolio will not purchase the securities of any closed-end
investment company except in the open market where no commission or
profit to a sponsor or dealer results from the purchase, other than
customary brokerage fees. The Portfolios have no current intention of
investing in other investment companies.
|_| A LifeSpan Portfolio will not purchase securities while outstanding
borrowings exceed 5% of the Portfolio's total assets.
|_| A LifeSpan Portfolio will not invest in real estate limited partnership
interests.
|_| A LifeSpan Portfolio will not purchase interests in oil, gas, or other
mineral exploration programs or mineral leases. However, this policy
does not prohibit the acquisition of securities of companies engaged in
the production or transmission of oil, gas, or other minerals.
|_| A LifeSpan Portfolio will not invest for the purpose of exercising
control over or management of any company.
For purposes of each Portfolio's policy not to concentrate its assets, the
Portfolios apply the policy to 25% or more of their total assets and have
adopted the industry classifications set forth in Appendix B to this Statement
of Additional Information. This is not a fundamental policy.
As a matter of non-fundamental policy, each Portfolio has undertaken to
limit its investments in illiquid securities to a stated percentage of net
assets.
The percentage restrictions described above and in the Prospectus apply
only at the time of investment and require no action by a Portfolio as a result
of subsequent changes in value of the investments or the size of a Portfolio.
How the Portfolios Are Managed
Organization and History. Panorama Series Fund, Inc., the investment company of
which each Portfolio is a series, was incorporated in Maryland on August 17,
1981. It is referred to as the "Company" in this Statement of Additional
Information. Prior to May 1, 1996, the Company was named Connecticut Mutual
Financial Services Series Fund I, Inc.
The Company is governed by a Board of Directors, which is responsible for
protecting the interests of shareholders under Maryland law. The Directors meet
periodically throughout the year to oversee the activities of the Company and
the Portfolios, review their performance, and review the actions of the Manager
and Sub-Advisors.
|X| Meetings of Shareholders. As series of a Maryland corporation, the
Portfolios are not required to hold, and do not plan to hold, regular annual
meetings of shareholders. The Portfolios will hold meetings from time to time on
important matters and when required to do so by the Investment Company Act or
other applicable law. They will also do so when a shareholder meeting is called
by the Directors or upon proper request of the shareholders.
Directors and Officers of the Company. The Directors and officers of the
Company, and their principal occupations and business affiliations during the
past five years are listed below. Directors denoted with an asterisk (*) below
are deemed to be "interested persons" of the Company under the Investment
Company Act. All of the Directors are also trustees, directors or managing
general partners of the following Denver-based Oppenheimer funds1:
Oppenheimer Cash Reserves Oppenheimer Total Return Fund,
Inc.
Oppenheimer Champion Income Fund Oppenheimer Variable Account Funds
Oppenheimer Capital Income Fund Panorama Series Fund, Inc.
Oppenheimer High Yield Fund Centennial America Fund, L. P.
Oppenheimer International Bond Centennial California Tax Exempt
Fund Trust
Oppenheimer Integrity Funds Centennial Government Trust
Oppenheimer Limited-Term Centennial Money Market Trust
Government Fund
Oppenheimer Main Street Funds, Centennial New York Tax Exempt
Inc. Trust
Oppenheimer Municipal Fund Centennial Tax Exempt Trust
Oppenheimer Real Asset Fund
Oppenheimer Strategic Income
Fund
Ms. Macaskill and Messrs. Swain, Wixted, Bishop, Donohue, Farrar and Zack,
who are officers of the Company, respectively hold the same offices with the
other Denver-based Oppenheimer funds. As of April 2, 1999, the Directors and
officers of the Company as a group did not beneficially own any shares of the
Portfolios.
William L. Armstrong, Trustee, Age: 62
11 Carriage Lane, Littleton, Colorado 80121
Chairman of the following private mortgage banking companies: Cherry Creek
Mortgage Company (since 1991), Centennial State Mortgage Company (since 1994),
The El Paso Mortgage Company (since 1993), Transland Financial Services, Inc.
(since 1997), and Ambassador Media Corporation (since 1984); Chairman of the
following private companies: Frontier Real Estate, Inc. (residential real estate
brokerage) (since 1994), Frontier Title (title insurance agency) (since 1995)
and Great Frontier Insurance (insurance agency) (since 1995); 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 the following public companies: International Family Entertainment
(television channel) (1991 - 1997) and Natec Resources, Inc. (air pollution
control equipment and services company) (1991 - 1995); formerly U.S. Senator
(January 1979 - January 1991).
Robert G. Avis,* Director; Age: 67
One North Jefferson Ave., St. Louis, Missouri 63103
Vice Chairman of A.G. Edwards & Sons, Inc. (a broker-dealer) and A.G.
Edwards, Inc. (its parent holding company); Chairman of A.G.E. Asset
Management and A.G. Edwards Trust Company (its affiliated investment adviser
and trust company, respectively).
William A. Baker, Director; Age: 84
197 Desert Lakes Drive, Palm Springs, California 92264
Management Consultant.
Charles Conrad, Jr., Director; Age: 68
1501 Quail Street, Newport Beach, CA 92660
Chairman and CEO of Universal Space Lines, Inc. (a space services management
company); formerly Vice President of McDonnell Douglas Space Systems Co.
prior to which he was associated with the National Aeronautics and Space
Administration.
Jon S. Fossel, Director; Age: 56
P.O. Box 44, Mead Street, Waccabuc, New York 10597
Formerly Chairman and a director of the Manager, President and a director of
Oppenheimer Acquisition Corp., Shareholder Services, Inc. and Shareholder
Financial Services, Inc.
Sam Freedman, Director; Age: 58
4975 Lakeshore Drive, Littleton, Colorado 80123
Formerly Chairman and Chief Executive Officer of OppenheimerFunds Services,
Chairman, Chief Executive Officer and a director of Shareholder Services,
Inc. and Shareholder Financial Services, Inc., Vice President and a director
of Oppenheimer Acquisition Corp. and a director of the Manager.
- -------------------
* Director who is an "interested person" of the Fund.
Raymond J. Kalinowski, Director; Age: 69
44 Portland Drive, St. Louis, Missouri 63131
Director of Wave Technologies International, Inc. (a computer products
training company).
C. Howard Kast, Director; Age: 76
2552 East Alameda, Denver, Colorado 80209
Formerly Managing Partner of Deloitte, Haskins & Sells (an accounting firm).
Robert M. Kirchner, Director; Age: 77
7500 E. Arapahoe Road, Englewood, Colorado 80112
President of The Kirchner Company (management consultants).
Ned M. Steel, Director; Age: 84
3416 South Race Street, Englewood, Colorado 80110
Chartered Property and Casualty Underwriter; a director of Visiting Nurse
Corporation of Colorado.
James C. Swain, Chairman, Chief Executive Officer and Director*; Age 65 6803
South Tucson Way, Englewood, Colorado 80112 Vice Chairman of the Manager (since
September 1988); formerly President and a director of Centennial Asset
Management Corporation, and Chairman of the Board of Shareholder Services, Inc.
Bridget A. Macaskill, President; Age: 50
Two World Trade Center, 34th Floor, New York, New York 10048
President (since June 1991), Chief Executive Officer (since September 1995) and
a director (since December 1994) of the Manager; President and a director (since
June 1991) of HarbourView Asset Management Corp.; Chairman and a director (since
August 1994) of Shareholder Services, Inc. and (since September 1995)
Shareholder Financial Services, Inc.; President (since September 1995) and a
director (since October 1990) of Oppenheimer Acquisition Corp.; President (since
September 1995) and a director (since November 1989) of Oppenheimer Partnership
Holdings, Inc., a holding company subsidiary of the Manager; a director of
Oppenheimer Real Asset Management, Inc. (since July 1996); President and a
director (since October 1997) of OppenheimerFunds International Ltd., an
offshore fund management subsidiary of the Manager, and Oppenheimer Millennium
Funds plc; President and a director of other Oppenheimer funds; a director of
Hillsdown Holdings plc (a U.K. food company).
Peter M. Antos, Vice President and Portfolio Manager of Growth Portfolio, Total
Return Portfolio, and the Value/Growth and Growth/Income stock components of the
LifeSpan Portfolios; Age 52 One Financial Plaza, 755 Main Street, Hartford, CT
06103-2603 Chartered Financial Analyst, Vice President of the Company and Senior
Vice President of the Manager and HarbourView; portfolio manager of other
Oppenheimer funds; previously Vice President and Senior Portfolio Manager,
EquitiesnConnecticut Mutual Life Insurance Company - G.R. Phelps & Co. ("G.R.
Phelps") (1989-1996).
- -------------------
* Director who is an "interested person" of the Fund.
George Evans, Vice President and Portfolio Manager, Age: 40
Vice President of the Manager (since joining the Manager in September 1990) and
HarbourView Asset Management Corporation (since July 1994); an officer of other
Oppenheimer funds.
John S. Kowalik, Vice President and Portfolio Manager of Government
Securities
Portfolio; Age: 42
Two World Trade Center, 34th Floor, New York, New York 10048 Senior Vice
President of the Manager (since July 1998); an officer of other Oppenheimer
funds; formerly Managing Director and Senior Portfolio Manager
at Prudential Global Advisors (1989-1998).
Stephen F. Libera, Vice President and Portfolio Manager of Growth Portfolio,
Total Return Portfolio, and the Short-Term Bonds and Government/Corporate
Bonds components of the LifeSpan Portfolios; Age 47 One Financial Plaza, 755
Main Street, Hartford, CT 06103-2603 Chartered Financial Analyst, Vice President
of the Company and the Manager since March, 1996; Vice President of HarbourView;
portfolio manager of other Oppenheimer funds; previously a Vice President and
Senior Portfolio Manager, Fixed Income--G.R. Phelps (1985-1996).
David P. Negri, Vice President and Portfolio Manager of Government Securities
Portfolio; Age: 45 Two World Trade Center, 34th Floor, New York, New York 10048
Senior Vice President of the Manager (since June 1989); an officer of other
Oppenheimer funds.
Michael C. Strathearn, Vice President and Portfolio Manager of Growth Portfolio,
Total Return Portfolio, and the Value/Growth and Growth/Income stock components
of the
LifeSpan Portfolios; Age 45
One Financial Plaza, 755 Main Street, Hartford, CT 06103-2603 Chartered
Financial Analyst, Vice President of the Company and the Manager since March,
1996; Vice President of HarbourView; portfolio manager of other Oppenheimer
funds; previously a Portfolio Manager, EquitiesnConnecticut
Mutual Life Insurance Company ("CML") (1988-1996).
Kenneth B. White, Vice President and Portfolio Manager of Growth Portfolio,
Total Return Portfolio, and the Value/Growth and Growth/Income stock components
of the LifeSpan Portfolios; Age 46 One Financial Plaza, 755 Main Street,
Hartford, CT 06103-2603 Chartered Financial Analyst, Vice President of the
Company and the Manager since March, 1996; Vice President of HarbourView;
portfolio manager of other Oppenheimer funds; previously a Portfolio Manager,
EquitiesnCML (1982-1996); Senior Investment Officer, EquitiesnCML (1987-1992).
Arthur J. Zimmer, Vice President and Portfolio Manager of Total Return
Portfolio; Age: 53
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President of the Manager (since June 1997); Vice President of
Centennial (since September 1991); an officer of other Oppenheimer funds;
formerly Vice President of the Manager (October 1990-June 1997). Andrew J.
Donohue, Vice President and Secretary; Age: 48 Two World Trade Center, 34th
Floor, New York, New York 10048 Executive Vice President (since January 1993),
General Counsel (since October 1991) and a Director (since September 1995) of
the Manager; Executive Vice President (since September 1993) and a director
(since January 1992) of the Distributor; Executive Vice President, General
Counsel and a director of HarbourView Asset Management Corp., Shareholder
Services, Inc., Shareholder Financial Services, Inc. and Oppenheimer Partnership
Holdings, Inc. (since September 1995); President and a director of Centennial
Asset Management Corp. (since September 1995); President and a director of
Oppenheimer Real Asset Management, Inc. (since July 1996); General Counsel
(since May 1996) and Secretary (since April 1997) of Oppenheimer Acquisition
Corp.; Vice President and a Director of OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since October 1997); an officer of other
Oppenheimer funds.
Brian Wixted, Treasurer; Age: 39
6803 South Tucson Way, Englewood, Colorado 80112
Senior Vice President of the Manager (since March 1999); Formerly a Principal
and Chief Operating Officer of the Mutual Fund Services Division of Bankers
Trust Company (3/95 - 3/99), and Vice President and Chief Financial Officer of
C.S. First Boston Investment Management Corporation (91-95).
Robert J. Bishop, Assistant Treasurer; Age: 40
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); 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 for the Manager.
Scott T. Farrar, Assistant Treasurer; Age: 33
6803 South Tucson Way, Englewood, Colorado 80112
Vice President of the Manager/Mutual Fund Accounting (since May 1996); Assistant
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 for
the Manager.
Robert G. Zack, Assistant Secretary; Age: 50
Two World Trade Center, 34th Floor, New York, New York 10048-0203 Senior Vice
President (since May 1985) and Associate General Counsel (since May 1981) of the
Manager, Assistant Secretary of Shareholder Services, Inc. (since May 1985), and
Shareholder Financial Services, Inc. (since November 1989); Assistant Secretary
(since October 1997) of Oppenheimer Millennium Funds plc and OppenheimerFunds
International Ltd.; an officer of other Oppenheimer funds.
|X| Remuneration of Directors. The officers of the Company and one
Director of the Company (Mr. Swain) are affiliated with the Manager and receive
no salary or fee from the Company. The remaining Directors of the Company
received the compensation shown below. The compensation from the Portfolios was
paid during their fiscal year ended December 31, 1998. The compensation from all
of the Denver-based Oppenheimer funds includes the compensation from the
Portfolios and represents compensation received as a director, trustee, managing
general partner or member of a committee of the Board during the calendar year
1998.
- --------------------------------------------------------------------
Total Compensation
Director's Name and Aggregate From all
Other Positions Compensation Denver-Based
from the Company Oppenheimer Funds1
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Robert G. Avis $5,822 $67,998
- --------------------------------------------------------------------
- --------------------------------------------------------------------
William A. Baker $5,993 $69,998
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Charles Conrad, Jr. $5,822 $67,998
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Jon. S. Fossel $5,779 $67,496
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Sam Freedman
Audit and Review $6,337 $73,998
Committee Member
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Raymond J. Kalinowski
Audit and Review
Committee Member $6,338 $73,998
- --------------------------------------------------------------------
- --------------------------------------------------------------------
C. Howard Kast
Audit and Review
Committee Chairman $6,595 $76,998
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Robert M. Kirchner $5,822 $67,998
- --------------------------------------------------------------------
- --------------------------------------------------------------------
Ned M. Steel $5,822 $67,998
- --------------------------------------------------------------------
1. For the 1998 calendar year.
|X| Deferred Compensation Plan. The Board of Directors has adopted a
Deferred Compensation Plan for disinterested Directors that enables them to
elect to defer receipt of all or a portion of the annual fees they are entitled
to receive from the Portfolios. Under the plan, the compensation deferred by a
Director is periodically adjusted as though an equivalent amount had been
invested in shares of one or more Oppenheimer funds selected by the Director.
The amount paid to the Director under the plan will be determined based upon the
performance of the selected funds.
Deferral of Director's fees under the plan will not materially affect the
Portfolios' assets, liabilities and net income per share. The plan will not
obligate the Portfolios to retain the services of any Director or to pay any
particular level of compensation to any Director. Pursuant to an Order issued by
the Securities and Exchange Commission, the Portfolios may invest in the funds
selected by the Director under the plan without shareholder approval for the
limited purpose of determining the value of the Director's deferred fee account.
|X| Major Shareholders. As of April 1, 1999, all of the outstanding shares
of each Portfolio were held by separate investment accounts of Massachusetts
Mutual Life Insurance Company, 1295 State Street, Springfield, MA 01111, for
variable annuity contracts, variable life insurance policies and other
investment products owned by its customers.
The Manager. OppenheimerFunds, Inc., the Manager, is wholly-owned by Oppenheimer
Acquisition Corporation, a holding company controlled by Massachusetts Mutual
Life Insurance Company. The Manager and the Company have a Code of Ethics, as
does each Sub-Advisor. The Codes of Ethics are designed to detect and prevent
improper personal trading by certain employees, including portfolio managers,
that would compete with or take advantage of a Portfolio's investment
transactions. Compliance with the respective Code of Ethics is carefully
monitored and strictly enforced by the Manager or the relevant Sub-Advisor.
|X| The Investment Advisory Agreement. The Manager provides investment
management services to each Portfolio under an investment advisory agreement
between the Manager and the respective Portfolio. The investment advisory
agreements require the Manager, at its expense, to provide each Portfolio with
adequate office space, facilities and equipment. The agreements also require the
Manager to provide and supervise the activities of all administrative and
clerical personnel necessary to provide effective corporate administration for
each Portfolio. Those responsibilities include the compilation and maintenance
of records with respect to its operations, the preparation and filing of
specified reports, and composition of proxy materials and registration
statements for the continuous public sale of shares of the Portfolio.
Expenses not expressly assumed by the Manager under an advisory agreement
are paid by the relevant Portfolio. The advisory agreements list examples of
expenses to be paid by a Portfolio. The major categories relate to interest,
taxes, brokerage commissions, fees to certain Directors, legal, and audit
expenses, custodian and transfer agent expenses, share issuance costs, certain
printing and registration costs and non-recurring expenses, including
litigation. The management fees paid by a Portfolio to the Manager are
calculated at the rates listed in the Portfolio's Prospectus, which are applied
to the assets of the Portfolio as a whole.
- ----------------------------------------------------------------------
Management Fees Paid to OppenheimerFunds,
Portfolio Inc.* in the Fiscal Years Ended:
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
12/31/96 12/31/97 12/31/98
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Total Return Portfolio $ 5,817,245 $6,482,637 $6,893,133
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Growth Portfolio $2,801,667 $3,818,977 $4,523,009
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Oppenheimer $569,471 $732,642 $945,935
International Growth
Fund/VA
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
LifeSpan Capital
Appreciation Portfolio $281,564 $437,070 $567,142
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
LifeSpan Balanced $355,893 $504,390 $648,865
Portfolio
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
LifeSpan Diversified
Income Portfolio $171,569 $213,594 $287,965
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Government Securities
Portfolio $125,427 $120,922 $126,912
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Total (All Portfolios) $10,122,836 $12,310,232 $13,992,961
- ----------------------------------------------------------------------
* The fees for 1996 include amounts paid to G.R. Phelps, the prior investment
advisor (until March 1, 1996) of the Portfolios.
The advisory agreements state that in the absence of willful misfeasance,
bad faith, gross negligence in the performance of its duties, or reckless
disregard of its obligations and duties under the advisory agreement, the
Manager is not liable for any loss resulting from any good faith errors or
omissions in connection with any matters to which the agreement relates. Each
advisory agreement permits the Manager to act as investment adviser for any
other person, firm or corporation.
The Sub-Advisors. The advisory agreements permit the Manager to hire one or
more Sub-Advisors to assist with the management of the Portfolios. The
Manager has retained sub-advisors for Oppenheimer International Growth
Fund/VA and the LifeSpan Portfolios.
Under the respective investment subadvisory agreements, each Sub-Advisor,
subject to the review of the Board of Directors and the overall supervision of
the Manager, is responsible for managing the investment operations of a
particular component of the LifeSpan Portfolios and selecting securities for the
component's portfolio and furnishing the respective LifeSpan Portfolio with
advice and recommendations on investments and the purchase and sale of
securities for the component it manages. The Manager, not the Portfolios, pays
the Sub-Advisors. The Sub-Advisors are paid at the rates set forth in "How the
Portfolios Are Managed" in the Prospectus.
|X| Babson-Stewart Ivory International. The Manager has retained
Babson-Stewart Ivory International as Sub-Adviser for Oppenheimer International
Growth Fund/VA and the international component of LifeSpan Capital Appreciation
Portfolio and LifeSpan Balanced Portfolio. The firm is located at One Memorial
Drive, Cambridge, Massachusetts 02142. It is a Massachusetts general partnership
and a registered investment adviser and was originally established in 1987. The
general partners are David L. Babson & Co., which is an indirect subsidiary of
Massachusetts Life Insurance Company (the Manager's parent company), and Stewart
Ivory & Co. (International), Ltd. As of December 31, 1998, Babson-Stewart Ivory
International had approximately $4.6 billion in assets under management.
The investment subadvisory agreements with Babson-Stewart state that in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard with respect to its obligations and duties under the agreements,
Babson-Stewart will not be subject to liability for any loss sustained by reason
of its good faith errors or omissions in connection with any matters to which
the agreements relate.
|X| Pilgrim Baxter & Associates, Ltd.. The Manager has retained Pilgrim
Baxter & Associates, Ltd. ("Pilgrim Baxter") as Sub-Advisor for the small cap
component of LifeSpan Capital Appreciation Portfolio and LifeSpan Balanced
Portfolio. The firm, located at 825 Duportail Road, Wayne, Pennsylvania 19087,
was established in 1982 to provide specialized equity management for
institutional investors. It is a Delaware corporation and a wholly owned
subsidiary of United Asset Management Corporation. As of December 31, 1998,
Pilgrim Baxter & Associates had over $13.1 billion in assets under management.
The investment subadvisory agreements with Pilgrim Baxter provide that in
the absence of willful misfeasance, bad faith, negligence, or reckless disregard
of the performance of its duties under the agreements, the firm is not liable
for any error of judgment or mistake of law or for any other action or omission
in the course of, or connected with, rendering services or for any losses that
may be sustained in the purchase, holding or sale of any security, or otherwise.
|X| Credit Suisse Asset Management. The Manager has retained Credit Suisse
Asset Management as Sub-Advisor for the high yield/high risk bond component for
each LifeSpan Portfolio. The firm, located at One Citicorp Center, 153 E. 53rd
Street, 57th Floor, New York, NY 10022, is a partnership between Credit Suisse
Capital Corporation and CS Advisors Corp. Credit Suisse Asset Management
(formerly BEA Associates) has been providing domestic and global fixed income
and equity investment management services for institutional clients and mutual
funds since 1984 and had $35.3 billion in assets under management as of December
31, 1998.
The investment subadvisory agreements with Credit Suisse Asset Management
state that in the absence of willful misfeasance, bad faith, negligence, or
reckless disregard of the performance of its duties under the agreement, Credit
Suisse Asset Management is not liable for losses as a result of its activities
in connection with the adoption of any investment policy or the purchase, sale
or retention of securities on behalf of the LifeSpan Portfolios subadvised by
the firm if such activities were made with due care and in good faith.
- ----------------------------------------------------------------------
Sub-Advisory Fees Paid by OppenheimerFunds, Inc. to the
Sub-Advisors
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Sub-Advisor Year Ended Year Ended Year Ended
12/31/96* 12/31/97 12/31/98
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Babson-Stewart
Ivory $251,773 $520,403 $644,927
International,
Ltd.
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Pilgrim Baxter &
Associates, Inc. $55,857 $116,744 $135,302
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Credit Suisse
Asset Management $35,061 $78,165 $103,619
- ----------------------------------------------------------------------
*For the period from 3/1/96 through 12/31/96.
Brokerage Policies of the Portfolios
Brokerage Provisions of the Investment Advisory Agreements. One of the duties of
the Manager under each advisory agreement is to arrange the investment
securities transactions for each Portfolio. Each advisory agreement contains
provisions relating to the employment of broker-dealers ("brokers") to effect a
Portfolio's portfolio transactions. The Manager is authorized by the advisory
agreements to employ broker-dealers, including "affiliated" brokers, as that
term is defined in the Investment Company Act. The Manager may employ
broker-dealers that it thinks, in its best judgment based on all relevant
factors, will implement the policy of each Portfolio to obtain, at reasonable
expense, the "best execution" of a Portfolio's transactions. "Best execution"
means prompt and reliable execution at the most favorable price obtainable. The
Manager need not seek competitive commission bidding. However, it is expected to
be aware of the current rates of eligible brokers and to minimize the
commissions paid to the extent consistent with the interest and policies of a
Portfolio as established by the Board of Directors.
Under each advisory agreement, the Manager may select brokers (other than
affiliates) that provide brokerage and/or research services for a Portfolio
and/or the other accounts over which the Manager or its affiliates have
investment discretion. The commissions paid to such brokers may be higher than
another qualified broker would charge, if the Manager makes a good faith
determination that the commission is fair and reasonable in relation to the
services provided. Subject to the those considerations, as a factor in the
selection of brokers for a Portfolio's portfolio transactions, the Manager may
also consider sales of shares of a Portfolio and other investment companies for
which the Manager or an affiliate serves as investment advisor.
Subject to any policy established by the Board of Directors, the Manager
and the relevant Sub-Advisors are primarily responsible for the investment
decisions of each Portfolio or Portfolio component for which they respectively
have advisory responsibility and for placing its portfolio transactions. While
the Manager and the Sub-Advisors generally seek reasonably competitive spreads
or commissions, the Portfolios will not necessarily pay the lowest spread or
commission available.
Description of Brokerage Practices Followed by the Manager and Sub-Advisors.
Subject to the provisions of the advisory agreements and the subadvisory
agreements and the procedures and rules described above, generally the Manager's
or the Sub-Advisor's portfolio traders allocate brokerage based upon
recommendations from the portfolio managers. In certain instances, portfolio
managers may directly place trades and allocate brokerage. In either case, the
Manager's or the relevant Sub-Advisor's executive officers supervise the
allocation of brokerage.
Transactions in securities other than those for which an exchange is the
primary market are generally done with principals or market makers. In
transactions on foreign exchanges, a Portfolio may be required to pay fixed
brokerage commissions and would not have the benefit of negotiated commissions
available in U.S. markets. Brokerage commissions are paid primarily for
effecting transactions in listed securities or for certain fixed income agency
transactions in the secondary market. Otherwise brokerage commissions are paid
only if it appears likely that a better price or execution can be obtained by
doing so. In an option transaction, ordinarily a Portfolio uses the same broker
for the purchase or sale of the option and any transaction in the securities to
which the option relates.
Most purchases of debt securities, commercial paper, and money market
instruments made by the Portfolios are principal transactions at net prices, and
the Portfolios incur little or no brokerage costs for these transactions.
Purchases of securities from underwriters include a commission or concession
paid by the issuer to the underwriter, and purchases from dealers include a
spread between the bid and asked price.
Other funds advised by the Manager have investment policies similar to
those of the Portfolios. Those other funds may purchase or sell the same
securities as the Portfolios at the same time as the Portfolios, which could
affect the supply and price of the securities. If two or more funds advised by
the Manager purchase the same security on the same day from the same dealer, the
transactions under those combined orders are averaged as to price and allocated
in accordance with the purchase or sale orders actually placed for each account.
The investment advisory agreements permit the Manager to allocate
brokerage for research services. The research services provided by a particular
broker may be useful only to one or more of the advisory accounts of the Manager
and its affiliates, or to a Sub-Advisor. Investment research received for the
commissions of those other accounts may be useful both to the Portfolios and one
or more of the other accounts. Investment research may be supplied by a third
party at the instance of a broker through which trades are placed.
Investment research services include information and analyses on
particular companies and industries as well as market or economic trends and
portfolio strategy, market quotations for portfolio evaluations, information
systems, computer hardware and similar products and services. If a research
service also assists the Manager (or Sub-Advisor) in a non-research capacity
(such as bookkeeping or other administrative functions), then only the
percentage or component that provides assistance to the Manager (or Sub-Advisor)
in the investment decision-making process may be paid in commission dollars.
The Board of Directors permits the Manager to use stated commissions on
secondary fixed-income trades to obtain research if the broker represents to the
Manager that: (i) the trade is not from the broker's own inventory, (ii) the
trade was executed by the broker on an agency basis at the stated commission,
and (iii) the trade is not a riskless principal transaction. The Board of
Directors permits the Manager to use concessions on fixed price offerings to
obtain research, in the same manner as is permitted for agency transactions.
The research services provided by brokers broadens the scope and
supplements the research activities of the Manager and Sub-Advisors. That
research provides additional views and comparisons, and helps the Manager or the
Sub-Advisors obtain market information for the valuation of securities held in a
Portfolio's investment portfolio or are being considered for purchase. The
Manager provides information to the Board about the commissions paid to brokers
for furnishing these services, together with the Manager's representation that
the amount of those commissions was reasonably related to the value or benefit
of those services.
No principal transactions and, except under unusual circumstances, no
agency transactions for Government Securities Portfolio will be handled by any
affiliated securities dealer. In the unusual circumstance when that Portfolio
pays brokerage commissions, the above-described brokerage practices and policies
are followed.
- ----------------------------------------------------------------------
Total Brokerage Commissions Paid by the Portfolios1
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Fiscal Year Fiscal Year Fiscal
Portfolio Ended Ended Year Ended
12/31/96 12/31/97 12/31/982
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Growth Portfolio $558,861 $1,587,706 $2,264,377
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Total Return Portfolio $802,877 $2,051,990 $1,992,347
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Oppenheimer International $190,606 $224,663 $234,709
Growth Fund/VA
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
LifeSpan Capital Appreciation $29,204 $84,779 $99,019
Portfolio
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
LifeSpan Diversified Income $2,766 $7,358 $8,738
Portfolio
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
LifeSpan Balanced Portfolio $24,827 $72,620 $87,735
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Government Securities None None None
Portfolio
- ----------------------------------------------------------------------
1. Amounts do not include spreads or concessions on principal transactions on a
net trade basis.
2. In the fiscal year ended 12/31/98, the amount of transactions directed to
brokers for research services and the amount of the commissions paid to
broker-dealers for those serves were as follows:
Portfolio Amount of Transactions Amount of Commissions
Growth $1,002,693,998 $1,516,296
Total Return 891,239,096 1,298,459
Oppenheimer
International
Growth Fund/VA 0 0
LifeSpan Balanced 18,514,067 27,036
LifeSpan Capital
Appreciation 20,832,146 30,343
Diversified Income 3,229,050 4,217
Government Securities 0 0
Performance of the Portfolios
Explanation of Performance Terminology. The Portfolios use a variety of terms to
illustrate their performance. These terms include "standardized yield" and
"dividend yield" for the Government Securities Portfolio and "average annual
total return" and "cumulative total return" for all Portfolios. An explanation
of how yields and total returns are calculated is set forth below. The charts
below show the performance of the Portfolios as of the most recent fiscal year
end. You can obtain current performance information by calling the Transfer
Agent at 1-800-470-0861.
The illustrations of performance data in advertisements must comply with
rules of the Securities and Exchange Commission. Those rules describe the types
of performance data that may be used and how it is to be calculated. In general,
any advertisement by a Portfolio of its performance data must include the
average annual total returns for the Portfolio. Those returns must be shown for
the 1- 5 and 10-year periods (or the life of the class, if less) ending as of
the most recently ended calendar quarter prior to the publication of the
advertisement (or its submission for publication). Certain types of yields may
also be shown, provided that they are accompanied by standardized average annual
total returns.
The Portfolios are not sold directly to members of the public but are
available only as the underlying investments for variable annuities, variable
life insurance policies and other investment products through separate
investment accounts of different insurance companies that may impose charges and
fees. A Portfolio's investment results, when shown alone, do not deduct those
charges and fees. If those fees and charges were included, the Portfolio's
performance results would be less.
Use of standardized performance calculations enables an investor to
compare a Portfolio's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using a
Portfolio's performance information as a basis for comparison with other
investments:
|_| Yields and total returns measure the performance of a hypothetical
account in the Portfolio over various periods and do not show the performance of
each investor's account under their respective annuity contract, variable life
insurance policy or other product. Your account's performance will vary from the
model performance data also if you bought or sold shares during the period, or
you bought your shares at a different time and price than the shares used in the
model.
|_| An investment in a Portfolio is not insured by the FDIC or any other
government agency.
|_| The principal value of a Portfolio's shares, and its yields and/or
total returns are not guaranteed and normally will fluctuate on a daily basis.
|_| When an investor's shares are redeemed, they may be worth more or less
than their original cost.
|_| Yields and total returns for any given past period represent
historical performance information and are not, and should not be considered, a
prediction of future yields or returns.
|X| Yields. The Government Securities Portfolio uses a variety of
different yields to illustrate its current returns.
|_| Standardized Yield. The "standardized yield" (sometimes referred to
just as "yield") is shown for a stated 30-day period. It is not based on actual
distributions paid by the Portfolio in the 30-day period, but is a hypothetical
yield based upon the net investment income from the Portfolio's investments for
that period. It may therefore differ from the "dividend yield" for the same
class of shares, described below.
Standardized yield is calculated using the following formula set forth in
rules adopted by the Securities and Exchange Commission, designed to assure
uniformity in the way that all funds calculate their yields:
- -------------------------------------------------------------------------------
[OBJECT OMITTED]
- -------------------------------------------------------------------------------
The symbols above represent the following factors:
a =dividends and interest earned during the 30-day period.
b =expenses accrued for the period (net of any expense assumptions).
c =the average daily number of shares outstanding during the 30-day
period that were entitled to receive dividends.
d =the maximum offering price per share on the last day of the period,
adjusted for undistributed net investment income.
The standardized yield for a particular 30-day period may differ from the
yield for other periods. The SEC formula assumes that the standardized yield for
a 30-day period occurs at a constant rate for a six-month period and is
annualized at the end of the six-month period.
|_| Dividend Yield. The Government Securities Portfolio may quote a
"dividend yield" for its shares. Dividend yield is based on the dividends paid
during the actual dividend period. To calculate dividend yield, the dividends
declared during a stated period are added together, and the sum is multiplied by
12 (to annualize the yield) and divided by the maximum offering price on the
last day of the dividend period. The formula is shown below:
Dividend Yield = dividends paid x 12/maximum offering price (payment date)
------------------------------------------------------------------
Yields for the 30-Day Period Ended 12/31/98
------------------------------------------------------------------
------------------------------------------------------------------
Portfolio Standardized Yield Dividend Yield
------------------------------------------------------------------
------------------------------------------------------------------
Government Securities 4.62% 6.23%
Portfolio
------------------------------------------------------------------
|X| Total Return Information. There are different types of "total returns"
to measure a Portfolio's performance. Total return is the change in value of a
hypothetical investment in the Portfolio over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares
and that the investment is redeemed at the end of the period. The cumulative
total return measures the change in value over the entire period (for example,
ten years). An average annual total return shows the average rate of return for
each year in a period that would produce the cumulative total return over the
entire period. However, average annual total returns do not show actual
year-by-year performance. A Portfolio uses standardized calculations for its
total returns as prescribed by the SEC.
The methodology is discussed below.
- -------------------------------------------------------------------------------
[OBJECT OMITTED]
- -------------------------------------------------------------------------------
|_| Average Annual Total Return. The "average annual total return" is an
average annual compounded rate of return for each year in a specified number of
years. It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an Ending Redeemable Value ("ERV" in the
formula) of that investment, according to the following formula:
|_| Cumulative Total Return. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as average
annual total return, but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:
- -------------------------------------------------------------------------------
[OBJECT OMITTED]
- -------------------------------------------------------------------------------
- ---------------------------------------------------------------------
Total Returns for the Periods Ended 12/31/98
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Cumulative
Total
Returns
(10 years
or Life
Portfolio of Class) Average Annual Total Returns
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
5-Year 10-Year
(or (or
1-Year life-of-clalife-of-class)
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Growth Portfolio1 424.18% 8.43% 17.47% 18.02%
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Total Return 261.77% 10.90% 12.14% 13.72%
Portfolio2
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Oppenheimer
International Growth 90.62%3 19.40% 10.34% 10.21%3
Fund/VA5
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Government Securities 60.52%3 8.14% 6.29% 7.39%3
Portfolio
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
LifeSpan Capital
Appreciation 50.77%4 6.49% 13.11%4 N/A
Portfolio4
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
LifeSpan Balanced 43.28%4 6.17% 11.39%4 N/A
Portfolio4
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
LifeSpan Diversified 33.35%4 4.88% 9.02%4 N/A
Income Portfolio4
- ---------------------------------------------------------------------
1. Inception: 1/21/82.
2. Inception: 9/30/82.
3. Inception: 5/13/92.
4. Inception: 9/1/95.
5. Babson-Stewart Ivory International was sub-advisor for the Fund and
principally responsible for the day-to-day investment of the Fund's assets
until October 1, 1999.
Other Performance Comparisons. Each Portfolio compares its performance annually
to that of an appropriate broadly-based market index in its Annual Report to
shareholders. You can obtain that information by contacting the Transfer Agent
at the addresses or telephone numbers shown on the cover of this Statement of
Additional Information. A Portfolio may also compare its performance to that of
other investments, including other mutual funds, or use rankings of its
performance by independent ranking entities. Examples of these performance
comparisons are set forth below.
|X| Lipper Rankings. From time to time a Portfolio may publish the ranking
of the performance of its shares by Lipper Analytical Services, Inc. Lipper is a
widely-recognized independent mutual fund monitoring service. Lipper monitors
the performance of regulated investment companies, including the Portfolios, and
ranks their performance for various periods based on categories relating to
investment objectives. The Lipper performance rankings are based on total
returns that include the reinvestment of capital gain distributions and income
dividends but do not take sales charges or taxes into consideration. Lipper also
publishes "peer-group" indices of the performance of all mutual funds in a
category that it monitors and averages of the performance of the funds in
particular categories.
|X| Morningstar Ratings and Rankings. From time to time a Portfolio may
publish the star ranking and/or star rating of the performance of its shares by
Morningstar, Inc., an independent mutual fund monitoring service. Morningstar
rates and ranks mutual funds in broad investment categories: domestic stock
funds, international stock funds, taxable bond funds and municipal bond funds.
Morningstar proprietary star ratings reflect historical risk-adjusted
total investment return. Investment return measures a fund's (or class's) one-,
three-, five- and ten-year average annual total returns (depending on the
inception of the fund or class) in excess of 90-day U.S. Treasury bill returns
after considering the fund's sales charges and expenses. Risk is measured by a
fund's (or class's) performance below 90-day U.S. Treasury bill returns. Risk
and investment return are combined to produce star ratings reflecting
performance relative to the other funds in the fund's category. Five stars is
the "highest" ranking (top 10% of funds in a category), four stars is "above
average" (next 22.5%), three stars is "average" (next 35%), two stars is "below
average" (next 22.5%) and one star is "lowest" (bottom 10%). The current star
rating is the fund's (or class's) overall rating, which is the 3-year rating or
its combined 3- and 5-year rating (weighted 60%/40% respectively), or its
combined 3-, 5-, and 10-year rating (weighted 40%, 30% and 30%, respectively),
depending on the inception date of the fund (or class). Rankings are subject to
change monthly.
A Portfolio may also compare its total return ranking to that of other
funds in its Morningstar category, in addition to its star ratings. Those total
return rankings are percentages from one percent to one hundred percent and are
not risk-adjusted. For example, if a fund is in the 94th percentile, that means
that 94% of the funds in the same category performed better than it did.
|X| Performance Rankings and Comparisons by Other Entities and
Publications. From time to time a Portfolio may include in its advertisements
and sales literature performance information about the Portfolio cited in
newspapers and other periodicals such as The New York Times, The Wall Street
Journal, Barron's, or similar publications. That information may include
performance quotations from other sources, including Lipper and Morningstar. The
performance of the Portfolio's shares may be compared in publications to the
performance of various market indices or other investments, and averages,
performance rankings or other benchmarks prepared by recognized mutual fund
statistical services.
Investors may also wish to compare the returns on a Portfolio's shares to
the return on fixed-income investments available from banks and thrift
institutions. Those include certificates of deposit, ordinary interest-paying
checking and savings accounts, and other forms of fixed or variable time
deposits, and various other instruments such as Treasury bills. However, a
Portfolio's returns and share price are not guaranteed or insured by the FDIC or
any other agency and will fluctuate daily, while bank depository obligations may
be insured by the FDIC and may provide fixed rates of return. Repayment of
principal and payment of interest on Treasury securities is backed by the full
faith and credit of the U.S. government.
From time to time, a portfolio may publish rankings or ratings of the
Manager or Transfer Agent, and of the investor services provided by them to
shareholders of the Oppenheimer funds, other than performance rankings of the
Oppenheimer funds themselves. Those ratings or rankings of shareholder and
investor services by third parties may include comparisons of their services to
those provided by other mutual fund families selected by the rating or ranking
services. They may be based upon the opinions of the rating or ranking service
itself, using its research or judgment, or based upon surveys of investors,
brokers, shareholders or others.
I N V E S T I N G I N T H E P O R T F O L I O S
How To Buy and Sell Shares
Insurance companies that hold shares of the Portfolios in their separate
accounts for the benefit of their customers' variable annuities, variable life
insurance policies and other investment products are the record holders and the
owners of shares of beneficial interest in the Portfolios. The right of those
customers of the insurance companies to give directions to the insurance company
for the purchase or redemption of shares is determined under the contract
between the customer and the insurance company. Those customers are not
"shareholders" of the Portfolios. The rights of those insurance companies as
record holders and owners of shares of a Portfolio are different from the rights
of their customers. The term "shareholder" in this Statement of Additional
Information refers only to the insurance companies whose separate accounts hold
shares of the Portfolios, and not to contract holders.
The sale of shares of the Portfolios is currently limited to Accounts as
explained on the cover page of this Statement of Additional Information and the
Prospectus. Such shares are sold at their respective offering prices (net asset
values without sales charges) and redeemed at their respective net asset values
as described in the Prospectus. The Company reserves the right to limit the
types of separate accounts that may invest in any Portfolio.
Determination of Net Asset Values Per Share. The net asset value per share of
each Portfolio is determined as of the close of business of The New York Stock
Exchange on each day the Exchange is open. The calculation is done by dividing
the value of a Portfolio's net assets by the number of shares outstanding. The
Exchange normally closes at 4:00 P.M., New York time, but may close earlier on
some days (for example, in case of weather emergencies or on days falling before
or after a holiday). The Exchange's most recent annual holiday schedule (which
is subject to change) states that it will close New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. It may close on other days.
Dealers other than Exchange members may conduct trading in certain
securities on days on which the Exchange is closed (including weekends and U.S.
holidays) or after 4:00 P.M., on a regular business day. The Portfolios' net
asset values will not be calculated on those days and the values of some of a
Portfolio's investment securities may change significantly on those days, when
shareholders cannot purchase or redeem shares. Additionally, trading on European
and Asian stock exchanges and over-the-counter markets normally is completed
before the close of The New York Stock Exchange.
|X| Securities Valuation. The Board of Directors has established
procedures for the valuation of each Portfolio's securities. In general those
procedures are as follows:
|_| Equity securities traded on a U.S. securities exchange or on
Nasdaq are valued as follows:
(1) if last sale information is regularly reported, they are valued at the
last reported sale price on the principal exchange on which they
are traded or on Nasdaq, as applicable, on that day, or
(2) if last sale information is not available on a valuation date, they
are valued at the last reported sale price preceding the valuation
date if it is within the spread of the closing "bid" and "asked"
prices on the valuation date or, if not, at the closing "bid" price
on the valuation date.
|_| Equity securities traded on a foreign securities exchange
generally are valued in one of the following ways:
(1) at the last sale price available to the pricing service approved by the
Board of Directors, or
(2) at the last sale price obtained by the Manager from the report of
the principal exchange on which the security is traded at its last
trading session on or immediately before the valuation date, or
(3) at the mean between the "bid" and "asked" prices obtained from the
principal exchange on which the security is traded or, on the basis
of reasonable inquiry, from two market makers in the security.
|_| Long-term debt securities having a remaining maturity in excess of
60 days are valued based on the mean between the "bid" and "asked" prices
determined by a portfolio pricing service approved by the Board of Directors or
obtained by the Manager from two active market makers in the security on the
basis of reasonable inquiry.
|_| The following securities are valued at the mean between the "bid"
and "asked" prices determined by a pricing service approved by the Board of
Directors or obtained by the Manager from two active market makers in the
security on the basis of reasonable inquiry: (1) debt instruments that have a
maturity of more than 397 days when issued, (2) debt instruments that had a
maturity of 397 days or less when issued and
have a remaining maturity of more than 60 days, and (3) non-money market
debt instruments that had a maturity of 397 days or
less when issued and which have a remaining maturity of 60 days or
less.
|_| The following securities are valued at cost, adjusted for
amortization of premiums and accretion of discounts:
(1) money market debt securities held by a non-money market fund that had a
maturity of less than 397 days when issued that have a remaining
maturity of 60 days or less, and
(2) debt instruments held by a money market fund that have a remaining
maturity of 397 days or less. |_| Securities (including restricted
securities) not having
readily-available market quotations are valued at fair value determined under
the Board's procedures. If the Manager is unable to locate two market makers
willing to give quotes, a security may be priced at the mean between the "bid"
and "asked" prices provided by a single active market maker (which in certain
cases may be the "bid" price if no "asked" price is available).
In the case of U.S. government securities, mortgage-backed securities,
corporate bonds and foreign government securities, when last sale information is
not generally available, the Manager may use pricing services approved by the
Board of Directors. The pricing service may use "matrix" comparisons to the
prices for comparable instruments on the basis of quality, yield, maturity.
Other special factors may be involved (such as the tax-exempt status of the
interest paid by municipal securities). The Manager will monitor the accuracy of
the pricing services. That monitoring may include comparing prices used for
portfolio valuation to actual sales prices of selected securities.
The closing prices in the London foreign exchange market on a particular
business day that are provided to the Manager by a bank, dealer or pricing
service that the Manager has determined to be reliable are used to value foreign
currency, including forward contracts, and to convert to U.S. dollars securities
that are denominated in foreign currency.
Puts, calls, and futures are valued at the last sale price on the
principal exchange on which they are traded or on Nasdaq, as applicable, as
determined by a pricing service approved by the Board of Directors or by the
Manager. If there were no sales that day, they shall be valued at the last sale
price on the preceding trading day if it is within the spread of the closing
"bid" and "asked" prices on the principal exchange or on Nasdaq on the valuation
date. If not, the value shall be the closing bid price on the principal exchange
or on Nasdaq on the valuation date. If the put, call or future is not traded on
an exchange or on Nasdaq, it shall be valued by the mean between "bid" and
"asked" prices obtained by the Manager from two active market makers. In certain
cases that may be at the "bid" price if no "asked" price is available.
When a Portfolio writes an option, an amount equal to the premium received
is included in the Portfolio's Statement of Assets and Liabilities as an asset.
An equivalent credit is included in the liability section. The credit is
adjusted ("marked-to-market") to reflect the current market value of the option.
In determining the Portfolio's gain on investments, if a call or put written by
the Portfolio is exercised, the proceeds are increased by the premium received.
If a call or put written by the Portfolio expires, the Portfolio has a gain in
the amount of the premium. If the Portfolio enters into a closing purchase
transaction, it will have a gain or loss, depending on whether the premium
received was more or less than the cost of the closing transaction. If the
Portfolio exercises a put it holds, the amount the Portfolio receives on its
sale of the underlying investment is reduced by the amount of premium paid by
the Portfolio.
Dividends, Capital Gains and Taxes
Dividends and Distributions. The Portfolios have no fixed dividend and there can
be no assurance as to the payment of any dividends or the realization of any
capital gains. The dividends and distributions paid by a Portfolio will vary
from time to time depending on market conditions, the composition of the
Portfolio's investment portfolio, and expenses borne by the Portfolio.
Tax Status of the Portfolios' Dividends and Distributions. The Company intend
that each Portfolio shall qualify and be treated as a "regulated investment
company" under Subchapter M of the Internal Revenue Code for each taxable year.
By so qualifying, the Portfolios will not be subject to federal income taxes on
amounts paid by them as dividends and distributions, as described in the
respective Prospectuses. Each Portfolio is treated as a separate entity for
purposes of determining federal tax treatment. The Company will endeavor to
ensure that each Portfolio's assets are invested so that all requirements of
Subchapter M are satisfied, but there can be no assurance that it will be
successful in doing so.
To qualify as a regulated investment company under Subchapter M of the
Code, a Portfolio must, among other things, derive at least 90% of its gross
income for the taxable year from dividends, interest, gains from the sale or
other disposition of stock, securities or foreign currencies, fees from certain
securities loans or other income (including gains from options, futures and
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies (this is referred to as the "90% income test").
The Portfolio must also satisfy certain annual distribution and quarterly
diversification requirements. For purposes of the 90% income test, income that a
Portfolio earns from equity interests in certain entities that are not treated
as corporations (e.g., they are treated as partnerships or trusts) for U.S. tax
purposes will generally have the same character for the Portfolio as in the
hands of such entities. Consequently, the Portfolio may be required to limit its
equity investments in such entities that earn fee income, rental income, or
other nonqualifying income.
As noted in the Prospectuses, each Portfolio must, and intends to, comply
with the diversification requirements imposed by Section 817(h) of the Code and
the regulations under that section. Those requirements, which are in addition to
the diversification requirements imposed on a Portfolio by the Investment
Company Act and Subchapter M of the Code, place certain limitations on the
assets of each separate account. Additionally, because Section 817(h) and those
regulations treat the assets of a Portfolio as assets of the related separate
account, there are restrictions on the amount of its assets a Portfolio may
invest in securities of a single issuer. Specifically, the regulations provide
that, except as permitted by the "safe harbor" described below, as of the end of
each calendar quarter or within 30 days after a calendar quarter, no more than
55% of the total assets of a Portfolio may be represented by any one investment,
no more than 70% by any two investments, no more than 80% by any three
investments and no more than 90% by any four investments. For this purpose, all
securities of the same issuer are considered a single investment, and each U.S.
Government agency and instrumentality is considered a separate issuer.
Section 817(h) provides, as a safe harbor, that a separate account will be
treated as being adequately diversified if the diversification requirements
under Subchapter M are satisfied and no more than 55% of the value of the
account's total assets are cash and cash items (including receivables), U.S.
Government securities and securities of other regulated investment companies.
Failure by a Portfolio to both qualify as a regulated investment company and
satisfy the Section 817(h) requirements would generally result in treatment of
the variable contract holders other than as described in the applicable variable
contract prospectus, including inclusion in ordinary income of income accrued
under the contracts for the current and all prior taxable years. Any such
failure may also result in adverse tax consequences for the Portfolio and the
insurance company issuing the contracts.
Foreign exchange gains and losses realized by a Portfolio in connection
with certain transactions involving foreign currency denominated debt
securities, certain options and futures contracts relating to foreign currency,
forward foreign currency contracts, foreign currencies, or payables or
receivables denominated in a foreign currency are subject to Section 988 of the
Code, which generally causes such gains and losses to be treated as ordinary
income and losses and may affect the amount, timing and character of
distributions to shareholders. If the net foreign exchange loss for a year were
to exceed the Portfolio's investment company taxable income (computed without
regard to such loss) the resulting overall ordinary loss for such year would not
be deductible by the Portfolio or its shareholders in future years.
Limitations imposed by the Code on regulated investment companies like the
Portfolios may restrict the Portfolios' ability to enter into futures, options
and currency forward transactions.
The Portfolios may be subject to withholding and other taxes imposed by
foreign countries with respect to their investments in foreign securities. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes.
The federal income tax rules applicable to mortgage dollar rolls and
interest rate swaps, caps, floors and collars are unclear in certain respects,
and the Portfolios may be required to account for these instruments under tax
rules in a manner that, under certain circumstances, may limit their
transactions in these instruments.
If a Portfolio acquires stock in certain non-U.S. corporations that
receive at least 75% of their annual gross income from passive sources (such as
interest, dividends, rents, royalties or capital gain) or hold at least 50% of
their assets in investments producing such passive income ("passive foreign
investment companies"), the Portfolio could be subject to Federal income tax and
additional interest charges on "excess distributions" received from such
companies or gain from the sale of stock in such companies, even if all income
or gain actually received by the Portfolio is timely distributed to its
shareholders. The Portfolio would not be able to pass through to its
shareholders any credit or deduction for such a tax. Certain elections may, if
available, ameliorate these adverse tax consequences, but any such election
would require the Portfolio to recognize taxable income or gain without the
concurrent receipt of cash. Each Portfolio may limit and/or manage its stock
holdings in passive foreign investment companies to minimize its tax liability
or maximize its return from these investments.
Additional Information About the Portfolios
The Transfer Agent. OppenheimerFunds Services, a division of the Manager, is
each Portfolio's transfer agent. It is responsible for maintaining each
Portfolio's shareholder registry and shareholder accounting records, and for
paying dividends and distributions to shareholders. It also handles shareholder
servicing and administrative functions. It provides these services "at cost." It
also acts as transfer agent for other funds managed by the Manager.
- -------------------------------------------------------------------------------
Investors under variable annuity contacts, variable life insurance policies
and other investment products offered by the insurance companies that offer
shares of the Portfolios as investments for those products should direct
questions about their accounts to the servicing agent for their insurance
company, because OppenheimerFunds Services does not maintain the records for
those annuities, policies or other products.
- -------------------------------------------------------------------------------
The Custodian Bank. The Bank of New York is the custodian bank for the
Portfolios' assets. The custodian bank's responsibilities include safeguarding
and controlling the Portfolios' portfolio securities, collecting income on the
portfolio securities and handling the delivery of such securities to and from
the Portfolios.
It will be the practice of the Portfolios to deal with the custodian bank
in a manner uninfluenced by any banking relationship the custodian bank may have
with the Manager and its affiliates. The Portfolios' cash balances with the
custodian bank in excess of $100,000 are not protected by Federal deposit
insurance. Those uninsured balances at times may be substantial.
Independent Auditors. The independent auditors of the Portfolios are Deloitte &
Touche LLP. They audit the Portfolios' financial statements and perform other
related audit services. They also act as auditors for the Manager of certain
other funds advised by the Manager and its affiliates.
<PAGE>
PANORAMA SERIES FUND, INC.
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders of Panorama Series Fund, Inc.:
We have audited the accompanying statements of assets and liabilities, including
the statements of investments, of Total Return Portfolio, Growth Portfolio,
Government Securities Portfolio, International Equity Portfolio, LifeSpan
Diversified Income Portfolio, LifeSpan Balanced Portfolio and LifeSpan Capital
Appreciation Portfolio (all of which are series of Panorama Series Fund, Inc.)
as of December 31, 1998, the related statements of operations for the year then
ended, the statements of changes in net assets for the years ended December 31,
1998 and 1997, and the financial highlights for the period January 1, 1996 to
December 31, 1998. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the period January 1, 1994 to December 31,
1995 were audited by other auditors whose report dated February 15, 1996,
expressed an unqualified opinion on this information.
We conducted our audits in accordance with generally accepted auditing
standards. 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, 1998 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Total Return
Portfolio, Growth Portfolio, Government Securities Portfolio, International
Equity Portfolio, LifeSpan Diversified Income Portfolio, LifeSpan Balanced
Portfolio and LifeSpan Capital Appreciation Portfolio as of December 31, 1998,
the results of their operations, the changes in their net assets, and the
financial highlights for the respective stated periods, in conformity with
generally accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
DELOITTE & TOUCHE LLP
Denver, Colorado
January 25, 1999
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 57.2%
- ---------------------------------------------------------------
CAPITAL GOODS - 6.3%
- ---------------------------------------------------------------
AEROSPACE/DEFENSE - 1.5%
General Dynamics Corp. 235,200 $ 13,788,600
- ---------------------------------------------------------------
Lockheed Martin Corp. 70,251 5,953,772
--------------
19,742,372
- ---------------------------------------------------------------
INDUSTRIAL SERVICES - 0.8%
Knoll, Inc.(1) 55,300 1,638,262
- ---------------------------------------------------------------
Viad Corp. 313,100 9,510,412
--------------
11,148,674
- ---------------------------------------------------------------
MANUFACTURING - 4.0%
Herman Miller, Inc. 136,400 3,665,750
- ---------------------------------------------------------------
Ingersoll-Rand Co. 181,700 8,528,544
- ---------------------------------------------------------------
PACCAR, Inc. 116,800 4,803,400
- ---------------------------------------------------------------
Textron, Inc. 244,000 18,528,750
- ---------------------------------------------------------------
United Technologies Corp. 169,300 18,411,375
--------------
53,937,819
- ---------------------------------------------------------------
CONSUMER CYCLICALS - 6.7%
- ---------------------------------------------------------------
AUTOS & HOUSING - 4.2%
Federal-Mogul Corp. 236,100 14,047,950
- ---------------------------------------------------------------
Fleetwood Enterprises, Inc. 82,300 2,859,925
- ---------------------------------------------------------------
Kaufman & Broad Home Corp. 80,300 2,308,625
- ---------------------------------------------------------------
Maytag Corp. 309,900 19,291,275
- ---------------------------------------------------------------
Owens Corning 148,900 5,276,644
- ---------------------------------------------------------------
USG Corp. 166,300 8,470,906
- ---------------------------------------------------------------
Whirlpool Corp. 72,200 3,998,075
--------------
56,253,400
- ---------------------------------------------------------------
LEISURE & ENTERTAINMENT - 0.2%
Hasbro, Inc. 77,000 2,781,625
- ---------------------------------------------------------------
RETAIL: GENERAL - 2.2%
Dayton Hudson Corp. 184,500 10,009,125
- ---------------------------------------------------------------
Federated Department Stores,
Inc.(1) 128,500 5,597,781
- ---------------------------------------------------------------
Fruit of the Loom, Inc., Cl. A(1) 83,800 1,157,487
- ---------------------------------------------------------------
Gucci Group NV 81,800 3,977,525
- ---------------------------------------------------------------
K Mart Corp.(1) 154,700 2,368,844
- ---------------------------------------------------------------
Nordstrom, Inc. 85,300 2,958,844
- ---------------------------------------------------------------
Shaw Industries, Inc. 133,800 3,244,650
--------------
29,314,256
- ---------------------------------------------------------------
RETAIL: SPECIALTY - 0.1%
Payless ShoeSource, Inc.(1) 39,800 1,885,525
</TABLE>
13
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
CONSUMER STAPLES - 7.7%
- ---------------------------------------------------------------
BEVERAGES - 0.8%
Anheuser-Busch Cos., Inc. 166,100 $ 10,900,312
- ---------------------------------------------------------------
CONSUMER SERVICES - 0.3%
Hertz Corp., Cl. A 95,000 4,334,375
- ---------------------------------------------------------------
FOOD - 1.4%
General Mills, Inc. 116,400 9,050,100
- ---------------------------------------------------------------
IBP, Inc. 353,600 10,298,600
--------------
19,348,700
- ---------------------------------------------------------------
FOOD & DRUG RETAILERS - 2.8%
Albertson's, Inc. 174,600 11,119,837
- ---------------------------------------------------------------
Kroger Co.(1) 252,200 15,258,100
- ---------------------------------------------------------------
Safeway, Inc.(1) 184,400 11,236,875
--------------
37,614,812
- ---------------------------------------------------------------
HOUSEHOLD GOODS - 2.4%
Dial Corp. (The) 372,000 10,741,500
- ---------------------------------------------------------------
Fort James Corp. 182,875 7,315,000
- ---------------------------------------------------------------
Premark International, Inc. 411,700 14,255,112
--------------
32,311,612
- ---------------------------------------------------------------
ENERGY - 0.5%
- ---------------------------------------------------------------
OIL-DOMESTIC - 0.5%
Exxon Corp. 99,600 7,283,250
- ---------------------------------------------------------------
FINANCIAL - 11.0%
- ---------------------------------------------------------------
BANKS - 2.5%
Bank One Corp. 184,300 9,410,819
- ---------------------------------------------------------------
BankBoston Corp. 249,900 9,730,481
- ---------------------------------------------------------------
First Union Corp. 237,400 14,436,887
--------------
33,578,187
- ---------------------------------------------------------------
DIVERSIFIED FINANCIAL - 2.0%
Citigroup, Inc. 296,700 14,686,650
- ---------------------------------------------------------------
Fannie Mae 168,200 12,446,800
--------------
27,133,450
- ---------------------------------------------------------------
INSURANCE - 5.8%
Allstate Corp. 142,600 5,507,925
- ---------------------------------------------------------------
American General Corp. 122,200 9,531,600
- ---------------------------------------------------------------
American International Group, Inc. 126,100 12,184,412
- ---------------------------------------------------------------
Cigna Corp. 175,900 13,599,269
- ---------------------------------------------------------------
Conseco, Inc. 265,800 8,123,513
- ---------------------------------------------------------------
Equitable Cos., Inc. 46,800 2,708,550
- ---------------------------------------------------------------
Hartford Financial Services Group,
Inc. 108,500 5,953,938
- ---------------------------------------------------------------
Jefferson-Pilot Corp. 113,600 8,520,000
- ---------------------------------------------------------------
Transamerica Corp. 66,400 7,669,200
</TABLE>
14
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
INSURANCE (CONTINUED)
Travelers Property Casualty Corp.,
Cl. A 115,200 $ 3,571,200
--------------
77,369,607
- ---------------------------------------------------------------
SAVINGS & LOANS - 0.7%
Golden West Financial Corp. 98,800 9,058,725
- ---------------------------------------------------------------
HEALTHCARE - 4.4%
- ---------------------------------------------------------------
HEALTHCARE/DRUGS - 2.2%
Amgen, Inc.(1) 160,400 16,771,825
- ---------------------------------------------------------------
Genzyme Corp. (General Division)(1) 267,960 13,331,010
--------------
30,102,835
- ---------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
2.2%
Bard (C.R.), Inc. 248,100 12,280,950
- ---------------------------------------------------------------
Tenet Healthcare Corp.(1) 251,920 6,612,900
- ---------------------------------------------------------------
Total Renal Care Holdings, Inc.(1) 113,900 3,367,169
- ---------------------------------------------------------------
WellPoint Health Networks, Inc.(1) 89,900 7,821,300
--------------
30,082,319
- ---------------------------------------------------------------
TECHNOLOGY - 11.1%
- ---------------------------------------------------------------
COMPUTER HARDWARE - 8.0%
3Com Corp.(1) 251,000 11,247,938
- ---------------------------------------------------------------
Apple Computer, Inc.(1) 272,000 11,135,000
- ---------------------------------------------------------------
Compaq Computer Corp. 610,300 25,594,456
- ---------------------------------------------------------------
International Business Machines
Corp. 168,300 31,093,425
- ---------------------------------------------------------------
Lexmark International Group, Inc.,
Cl. A(1) 109,000 10,954,500
- ---------------------------------------------------------------
Seagate Technology, Inc.(1) 230,200 6,963,550
- ---------------------------------------------------------------
Storage Technology Corp. (New)(1) 289,700 10,302,456
--------------
107,291,325
- ---------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 1.4%
First Data Corp. 156,200 4,949,588
- ---------------------------------------------------------------
Network Associates, Inc.(1) 199,900 13,243,375
--------------
18,192,963
- ---------------------------------------------------------------
PHOTOGRAPHY - 1.7%
Eastman Kodak Co. 64,300 4,629,600
- ---------------------------------------------------------------
Xerox Corp. 151,100 17,829,800
--------------
22,459,400
- ---------------------------------------------------------------
TELECOMMUNICATIONS - 5.9%
- ---------------------------------------------------------------
TELEPHONE UTILITIES - 3.1%
Bell Atlantic Corp. 278,100 15,799,556
- ---------------------------------------------------------------
Century Telephone Enterprises, Inc. 79,900 5,393,250
- ---------------------------------------------------------------
U S West, Inc. 317,100 20,492,588
--------------
41,685,394
- ---------------------------------------------------------------
TELECOMMUNICATIONS/TECHNOLOGY -
2.8%
ALLTELL Corp. 200,700 12,004,369
</TABLE>
15
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS/TECHNOLOGY
(CONTINUED)
AT&T Corp. 343,400 $ 25,840,850
--------------
37,845,219
- ---------------------------------------------------------------
TRANSPORTATION - 0.4%
- ---------------------------------------------------------------
AIR TRANSPORTATION - 0.4%
AMR Corp.(1) 51,600 3,063,750
- ---------------------------------------------------------------
Delta Air Lines, Inc. 40,400 2,100,800
--------------
5,164,550
- ---------------------------------------------------------------
UTILITIES - 3.2%
- ---------------------------------------------------------------
ELECTRIC UTILITIES - 2.3%
CalEnergy, Inc.(1) 136,400 4,731,375
- ---------------------------------------------------------------
FPL Group, Inc. 112,100 6,908,163
- ---------------------------------------------------------------
Houston Industries, Inc. 264,600 8,500,275
- ---------------------------------------------------------------
Montana Power Co. 184,600 10,441,438
--------------
30,581,251
- ---------------------------------------------------------------
GAS UTILITIES - 0.9%
Columbia Energy Group 204,650 11,818,538
--------------
Total Common Stocks (Cost
$639,078,833) 769,220,495
- ---------------------------------------------------------------
OTHER SECURITIES - 0.3%
- ---------------------------------------------------------------
Ingersoll-Rand International
Finance Corp. I, 6.22% Preferred
Redeemable Increased Dividend
Equity Securities, 5/16/01(2) (Cost
$4,250,000) 170,000 4,420,000
PRINCIPAL
AMOUNT
- ---------------------------------------------------------------
ASSET-BACKED SECURITIES - 0.6%
- ---------------------------------------------------------------
IROQUOIS Trust, Asset-Backed
Amortizing Nts., Series 1997-2, Cl.
A, 6.752%, 6/25/07(2) $4,500,000 4,521,094
- ---------------------------------------------------------------
Olympic Automobile Receivables
Trust, Automobile
Receivables-Backed Nts., Series
1997-A, Cl. A-5, 6.80%, 2/15/05 4,050,000 4,110,750
--------------
Total Asset-Backed Securities (Cost
$8,544,073) 8,631,844
- ---------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS - 4.6%
- ---------------------------------------------------------------
Chase Commercial Mortgage
Securities Corp., Commercial Mtg.
Obligations, Series 1996-1, Cl. A2,
7.60%, 3/18/06 6,000,000 6,496,875
- ---------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 1711, Cl. EA,
7%, 3/15/24 3,750,000 3,835,538
- ---------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Gtd. Multiclass Mtg. Participation
Certificates:
6%, 3/1/09 2,866,534 2,884,937
Series 1843, Cl. VB, 7%, 4/15/03 3,578,600 3,654,645
Series 1849, Cl. VA, 6%, 12/15/10 3,729,761 3,762,397
- ---------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Interest-Only Stripped Mtg.-Backed
Securities Series 1583, Cl. IC,
7.03%, 1/15/20(3) 7,240,399 710,464
</TABLE>
16
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
<S> <C> <C>
- ---------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS
(CONTINUED)
- ---------------------------------------------------------------
Federal National Mortgage Assn.:
6%, 12/1/03 $2,077,115 $ 2,083,679
6.50%, 4/1/24-4/1/26 2,866,615 2,887,293
7%, 4/1/00 518,099 517,608
7.50%, 5/1/07-12/1/08 1,039,517 1,069,655
8.00%, 3/1/17-6/1/17 173,239 180,712
- ---------------------------------------------------------------
Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Trust 1992-15, Cl.
KZ, 7%, 2/25/22 2,416,713 2,421,233
- ---------------------------------------------------------------
Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1993-190, Cl. Z, 5.85%,
7/25/08 1,194,471 1,192,226
- ---------------------------------------------------------------
Federal National Mortgage Assn.,
Interest-Only Stripped Mtg.-Backed
Security, Trust 1993-223, Cl. PM,
7.56%, 10/25/23(3) 6,249,544 824,128
- ---------------------------------------------------------------
GE Capital Mortgage Services, Inc.,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Series 1994-7, Cl. A18, 6%, 2/25/09 4,707,789 4,497,398
- ---------------------------------------------------------------
General National Mortgage Assn.:
6.50%, 4/15/26 4,280,346 4,326,276
7%, 11/15/08-1/15/24 2,064,297 2,115,816
7.50%, 1/15/09-6/15/24 4,683,690 4,831,281
8%, 5/15/17 811,523 850,681
- ---------------------------------------------------------------
IMC Home Equity Trust, Asset-Backed
Home Equity Securities, Series
1998-3, Cl. A5, 6.36%, 8/20/22(4) 3,400,000 3,402,125
- ---------------------------------------------------------------
Norwest Asset Securities Corp.,
Mtg. Pass-Through Certificates,
Series 1997-14, Cl. A-3, 6.75%,
10/25/27 5,000,000 4,993,750
- ---------------------------------------------------------------
Prudential Home Mortgage Securities
Co., Sub. Fixed Rate Mtg.
Securities, Real Estate Mtg.
Investment Conduit Pass-Through
Certificates, Series 1993-L, Cl.
1B2, 6.641%, 12/25/23(2)(4) 1,900,000 1,898,219
- ---------------------------------------------------------------
Residential Funding Mortgage
Securities I, Inc., Mtg.
Pass-Through Certificates, Series
1998-S4, Cl. M1, 6.50%, 2/25/13 2,038,732 2,003,373
--------------
Total Mortgage-Backed Obligations
(Cost $59,821,727) 61,440,309
- ---------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 4.9%
- ---------------------------------------------------------------
U.S. Treasury Bonds, 6%, 2/15/26(5) 38,250,000 41,752,285
- ---------------------------------------------------------------
U.S. Treasury Bonds, STRIPS,
5.593%, 11/15/18(6) 50,000,000 16,661,650
- ---------------------------------------------------------------
U.S. Treasury Bonds, STRIPS,
7.835%, 5/15/15(6) 2,250,000 918,718
- ---------------------------------------------------------------
U.S. Treasury Nts., 6.125%,
8/15/07(5) 5,350,000 5,848,219
--------------
Total U.S. Government Obligations
(Cost $64,647,784) 65,180,872
- ---------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS -
0.1%
- ---------------------------------------------------------------
United Mexican States Bonds, 6.97%,
8/12/00 (Cost $1,731,367) 1,750,000 1,705,156
- ---------------------------------------------------------------
NON-COVERTIBLE CORPORATE BONDS AND
NOTES - 17.5%
- ---------------------------------------------------------------
BASIC MATERIALS - 0.9%
- ---------------------------------------------------------------
CHEMICALS - 0.4%
Morton International, Inc., 9.25%
Credit Sensitive Nts., 6/1/20 2,512,000 3,419,229
</TABLE>
17
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
<S> <C> <C>
- ---------------------------------------------------------------
CHEMICALS (CONTINUED)
PPG Industries, Inc., 9% Debs.,
5/1/21 $1,190,000 $ 1,522,227
--------------
4,941,456
- ---------------------------------------------------------------
METALS - 0.3%
Alcan Aluminum Ltd., 9.625% Debs.,
7/15/19 4,000,000 4,275,280
- ---------------------------------------------------------------
PAPER - 0.2%
Donohue Forest Products, Inc.,
7.625% Gtd. Sr. Nts., 5/15/07 2,500,000 2,743,845
- ---------------------------------------------------------------
CAPITAL GOODS - 3.3%
- ---------------------------------------------------------------
AEROSPACE/DEFENSE - 0.5%
Northwest Airlines Corp., 8.375%
Unsec. Nts., 3/15/04 4,250,000 4,329,802
- ---------------------------------------------------------------
Raytheon Co., 6.45% Nts., 8/15/02 2,500,000 2,574,637
--------------
6,904,439
- ---------------------------------------------------------------
INDUSTRIAL SERVICES - 2.1%
Fred Meyer, Inc., 7.375% Sr. Nts.,
3/1/05 6,750,000 7,156,404
- ---------------------------------------------------------------
Interface, Inc., 7.30% Sr. Nts.,
4/1/08 2,000,000 1,977,098
- ---------------------------------------------------------------
Norse CBO Ltd., 6.515%
Collateralized Bond Obligations,
Series 1A, Cl. A3, 8/13/10(2) 4,000,000 3,955,000
- ---------------------------------------------------------------
Owens-Illinois, Inc., 7.15% Sr.
Nts., 5/15/05 5,000,000 5,075,165
- ---------------------------------------------------------------
Sun Co., Inc., 7.95% Debs.,
12/15/01 4,000,000 4,221,468
- ---------------------------------------------------------------
Tyco International Group SA, 6.125%
Nts., 11/1/08(7) 2,500,000 2,520,830
- ---------------------------------------------------------------
USI American Holdings, Inc., 7.25%
Sr. Nts., Series B, 12/1/06 2,860,000 2,834,000
--------------
27,739,965
- ---------------------------------------------------------------
MANUFACTURING - 0.7%
Federal-Mogul Corp., 7.50% Nts.,
7/1/04 2,150,000 2,177,941
- ---------------------------------------------------------------
Norsk Hydro AS, 8.75% Bonds,
10/23/01 1,500,000 1,610,625
- ---------------------------------------------------------------
U.S. Filter Corp., 6.375% Bonds,
5/15/01 5,500,000 5,463,496
--------------
9,252,062
- ---------------------------------------------------------------
CONSUMER CYCLICALS - 0.6%
- ---------------------------------------------------------------
AUTOS & HOUSING - 0.2%
Black & Decker Corp., 6.625% Nts.,
11/15/00 2,700,000 2,746,170
- ---------------------------------------------------------------
LEISURE & ENTERTAINMENT - 0.1%
Felcor Suites LP, 7.375% Sr. Nts.,
10/1/04 2,000,000 1,898,252
- ---------------------------------------------------------------
MEDIA - 0.1%
Reed Elsevier, Inc., 6.625% Nts.,
10/15/23(7) 1,600,000 1,577,376
- ---------------------------------------------------------------
RETAIL: GENERAL - 0.2%
Price/Costco Cos., Inc., 7.125% Sr.
Nts., 6/15/05 2,000,000 2,153,018
- ---------------------------------------------------------------
CONSUMER STAPLES - 2.9%
- ---------------------------------------------------------------
ENTERTAINMENT - 0.8%
Paramount Communications, Inc.,
7.50% Sr. Nts., 1/15/02 4,250,000 4,475,263
- ---------------------------------------------------------------
Tricon Global Restaurants, Inc.,
7.45% Sr. Unsec. Nts., 5/15/05 4,650,000 4,798,819
- ---------------------------------------------------------------
Viacom, Inc., 6.75% Sr. Unsec.
Nts., 1/15/03 1,500,000 1,545,595
--------------
10,819,677
</TABLE>
18
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
FOOD - 1.3%
CPC International, Inc., 6.15%
Unsec. Nts., Series C, 1/15/06 $2,000,000 $ 2,084,292
- ---------------------------------------------------------------
Dole Food Distributing, Inc., 6.75%
Nts., 7/15/00 3,500,000 3,534,048
- ---------------------------------------------------------------
Grand Metro Inventory Corp., 7.125%
Nts., 9/15/04 6,115,000 6,571,956
- ---------------------------------------------------------------
RACERS-Kellogg-98-1, 5.75% Nts.,
2/2/01(7) 5,000,000 5,050,210
--------------
17,240,506
- ---------------------------------------------------------------
HOUSEHOLD GOODS - 0.8%
Dial Corp. (The), 5.89% Medium-Term
Nts., Series A, 10/22/01 3,250,000 3,209,710
- ---------------------------------------------------------------
Fort James Corp.:
6.234% Nts., 3/15/01 1,750,000 1,774,208
6.875% Sr. Nts., 9/15/07 5,000,000 5,205,050
- ---------------------------------------------------------------
Procter & Gamble Co., 9.36% Debs.,
Series A, 1/1/21 750,000 997,114
--------------
11,186,082
- ---------------------------------------------------------------
ENERGY - 2.3%
- ---------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 1.9% Chesapeake Energy Corp., 7.875% Sr.
Nts., Series B, 3/15/04 3,250,000 2,583,750
- ---------------------------------------------------------------
Coastal Corp., 8.125% Sr. Nts.,
9/15/02 3,190,000 3,419,173
- ---------------------------------------------------------------
Colorado Interstate Gas Corp., 10%
Sr. Debs., 6/15/05 455,000 560,235
- ---------------------------------------------------------------
Columbia Gas System, Inc., 6.80%
Nts., Series C, 11/28/05 2,000,000 2,114,530
- ---------------------------------------------------------------
Gulf Canada Resources Ltd.:
8.25% Sr. Nts., 3/15/17 2,000,000 1,808,750
9% Debs., 8/15/99 1,750,000 1,758,750
- ---------------------------------------------------------------
HNG Internorth/Enron Corp., 9.625%
Debs., 3/15/06 700,000 858,101
- ---------------------------------------------------------------
Louisiana Land & Exploration Co.,
7.65% Debs., 12/1/23 4,000,000 4,325,384
- ---------------------------------------------------------------
Petroleum Geo-Services ASA, 7.50%
Nts., 3/31/07 3,600,000 3,835,660
- ---------------------------------------------------------------
Petroliam Nasional Berhad, 6.875%
Nts., 7/1/03(2) 2,500,000 2,138,390
- ---------------------------------------------------------------
TransCanada PipeLines Ltd., 9.875%
Debs., 1/1/21 2,250,000 2,885,782
--------------
26,288,505
- ---------------------------------------------------------------
OIL - DOMESTIC - 0.4%
Norcen Energy Resources Ltd., 6.80%
Debs., 7/2/02 4,500,000 4,551,250
- ---------------------------------------------------------------
Texaco Capital, Inc., 8.875% Gtd.
Debs., 9/1/21 500,000 648,127
--------------
5,199,377
- ---------------------------------------------------------------
FINANCIAL - 4.3%
- ---------------------------------------------------------------
BANKS - 1.1%
BankAmerica Corp. (New), 7.75% Sub.
Nts., 7/15/02 1,250,000 1,341,900
- ---------------------------------------------------------------
Capital One Bank, Inc., 6.375% Sr.
Nts., 2/15/03 2,350,000 2,262,141
- ---------------------------------------------------------------
Chase Manhattan Corp. (New),
10.125% Sub. Nts., 11/1/00 1,000,000 1,079,609
- ---------------------------------------------------------------
Fleet Mtg./Norstar Group, Inc.,
9.90% Sub. Nts., 6/15/01 750,000 822,502
- ---------------------------------------------------------------
Greenpoint Bank (Brooklyn New
York), 6.70% Sr. Medium-Term Bank
Nts., 7/15/02 5,000,000 5,134,050
- ---------------------------------------------------------------
People's Bank of Bridgeport
(Connecticut), 7.20% Sub. Nts.,
12/1/06 4,000,000 4,244,048
--------------
14,884,250
</TABLE>
19
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED FINANCIAL - 1.1%
American General Finance Corp.,
5.875% Sr. Nts., 7/1/00 $1,500,000 $ 1,508,329
- ---------------------------------------------------------------
American General Institutional
Capital B, 8.125% Bonds, Series B,
3/15/46(7) 2,750,000 3,174,319
- ---------------------------------------------------------------
Capital One Financial Corp., 7.25%
Nts., 12/1/03 2,300,000 2,263,757
- ---------------------------------------------------------------
Countrywide Home Loans, Inc., 6.05%
Medium-Term Nts., Series D, 3/1/01 3,070,000 3,082,765
- ---------------------------------------------------------------
Fleet Mtg. Group, Inc., 6.50% Nts.,
9/15/99 750,000 754,206
- ---------------------------------------------------------------
General Motors Acceptance Corp.,
5.625% Nts., 2/15/01 1,200,000 1,204,284
- ---------------------------------------------------------------
Household Finance Corp., 8.95%
Debs., 9/15/99 1,200,000 1,227,384
- ---------------------------------------------------------------
PHH Corp., 6.50% Nts., 2/1/00 1,250,000 1,249,856
--------------
14,464,900
- ---------------------------------------------------------------
INSURANCE - 1.3%
Conseco Financing Trust III, 8.796%
Bonds, 4/1/27 2,750,000 2,638,089
- ---------------------------------------------------------------
Conseco, Inc., 6.40% Nts., 6/15/01 3,000,000 2,877,171
- ---------------------------------------------------------------
Equitable Life Assurance Society
(U.S.A.), 6.95% Surplus Nts.,
12/1/05(7) 2,000,000 2,118,334
- ---------------------------------------------------------------
GenAmerica Capital I, 8.525% Nts.,
6/30/27(7) 3,250,000 3,311,396
- ---------------------------------------------------------------
Life Re Capital Trust I, 8.72%
Nts., 6/15/27(7) 2,500,000 2,909,330
- ---------------------------------------------------------------
Travelers Property Casualty Corp.,
6.75% Nts., 4/15/01 3,500,000 3,584,227
--------------
17,438,547
- ---------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS -
0.8%
Chelsea GCA Realty Partner, Inc.,
7.75% Unsec. Nts., 1/26/01 5,520,000 5,484,683
- ---------------------------------------------------------------
First Industrial LP, 7.15% Bonds,
5/15/27 3,000,000 3,025,341
- ---------------------------------------------------------------
Simon DeBartolo Group, Inc., 6.625%
Nts., 6/15/03 3,000,000 2,969,067
--------------
11,479,091
- ---------------------------------------------------------------
HEALTHCARE - 0.3%
- ---------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES - 0.3% Tenet Healthcare Corp.:
8% Sr. Nts., 1/15/05 1,500,000 1,554,231
8.625% Sr. Unsec. Nts., 12/1/03 2,000,000 2,112,402
--------------
3,666,633
- ---------------------------------------------------------------
TECHNOLOGY - 0.2%
- ---------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 0.2%
Electric Data Systems Corp., 7.125%
Nts., 5/15/05(7) 2,000,000 2,177,722
- ---------------------------------------------------------------
TELECOMMUNICATIONS - 0.3%
- ---------------------------------------------------------------
TELECOMMUNICATIONS/TECHNOLOGY -
0.3%
AT&T Capital Corp., 6.25%
Medium-Term Nts., Series F, 5/15/01 3,800,000 3,751,649
- ---------------------------------------------------------------
TRANSPORTATION - 0.3%
- ---------------------------------------------------------------
RAILROADS & TRUCKERS - 0.3% Union Pacific Corp.:
7% Nts., 6/15/00 2,030,000 2,069,023
7.60% Nts., 5/1/05 2,000,000 2,152,886
--------------
4,221,909
</TABLE>
20
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
UTILITIES - 2.0%
- ---------------------------------------------------------------
ELECTRIC UTILITIES - 1.0%
El Paso Electric Co., 8.25% First
Mtg. Bonds, Series C, 2/1/03 $3,278,000 $ 3,474,680
- ---------------------------------------------------------------
Hawaiian Electric Industries, Inc.,
6.31% Medium-Term Nts., Series B,
2/19/02 5,000,000 5,052,465
- ---------------------------------------------------------------
Niagara Mohawk Power Corp., 7.125%
Sr. Unsec. Nts., Series C, 7/1/01 5,000,000 5,102,685
--------------
13,629,830
- ---------------------------------------------------------------
GAS UTILITIES - 1.0%
Northern Illinois Gas Co., 6.45%
First Mtg. Bonds, 8/1/01 2,000,000 2,031,266
- ---------------------------------------------------------------
Southern California Gas Co., 6.38%
Medium-Term Nts., 10/29/01 2,500,000 2,559,663
- ---------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50%
Bonds, 4/1/17 3,800,000 4,056,249
- ---------------------------------------------------------------
Williams Cos., Inc., 6.20% Nts.,
8/1/02 4,675,000 4,690,385
--------------
13,337,563
--------------
Total Non-Convertible Corporate
Bonds and Notes (Cost $229,982,709) 234,018,104
- ---------------------------------------------------------------
SHORT-TERM NOTES - 10.7%(8)
- ---------------------------------------------------------------
Federal Home Loan Bank:
4.93%, 1/4/99 10,000,000 9,995,892
5.05%, 1/21/99 10,000,000 9,971,944
- ---------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
4.50%, 1/4/99 3,000,000 2,998,875
5.02%, 1/15/99 10,000,000 9,980,167
5.03%, 1/11/99 11,344,000 11,327,916
5.03%, 1/14/99 10,000,000 9,981,728
5.06%, 1/13/99 10,000,000 9,983,133
5.06%, 1/27/99 7,487,000 7,459,639
5.07%, 1/7/99 10,000,000 9,991,550
5.07%, 1/19/99 10,000,000 9,974,650
5.08%, 1/20/99 10,000,000 9,973,189
5.10%, 1/8/99 10,000,000 9,990,083
- ---------------------------------------------------------------
Federal National Mortgage Assn.:
4.91%, 1/4/99 10,000,000 9,995,908
4.93%, 1/5/99 20,000,000 19,988,844
5.20%, 1/14/99 1,988,000 1,984,411
--------------
Total Short-Term Notes (Cost
$143,597,929) 143,597,929
- ---------------------------------------------------------------
REPURCHASE AGREEMENTS - 4.3%
- ---------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.75%, dated 12/31/98,
to be repurchased at $57,730,453 on 1/4/99, collaterallized by U.S. Treasury
Nts., 4%-8.875%, 2/15/99-7/15/06, with a value of $58,877,313 (Cost
$57,700,000) 57,700,000 57,700,000
- ---------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$1,209,354,422) 100.2% 1,345,914,709
- ---------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER
ASSETS (0.2) (2,032,330)
---------- --------------
NET ASSETS 100.0% $1,343,882,379
---------- --------------
---------- --------------
</TABLE>
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted - See Note 6 of
Notes to Financial Statements.
21
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
4. Represents the current interest rate for a variable rate security.
5. Securities with an aggregate market value of $14,195,005 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
6. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
7. 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 $22,839,517, or 1.70% of the Fund's net
assets as of December 31, 1998.
8. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
22
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 95.1%
- ----------------------------------------------------------------
CAPITAL GOODS - 9.8%
- ----------------------------------------------------------------
AEROSPACE/DEFENSE - 2.1%
General Dynamics Corp. 229,600 $ 13,460,300
- ----------------------------------------------------------------
Lockheed Martin Corp. 71,652 6,072,507
-------------
19,532,807
- ----------------------------------------------------------------
INDUSTRIAL SERVICES - 1.4%
Knoll, Inc.(1) 52,800 1,564,200
- ----------------------------------------------------------------
Viad Corp. 370,800 11,263,050
-------------
12,827,250
- ----------------------------------------------------------------
MANUFACTURING - 6.3%
Herman Miller, Inc. 130,900 3,517,937
- ----------------------------------------------------------------
Ingersoll-Rand Co. 241,800 11,349,487
- ----------------------------------------------------------------
PACCAR, Inc. 136,000 5,593,000
- ----------------------------------------------------------------
Textron, Inc. 236,700 17,974,406
- ----------------------------------------------------------------
United Technologies Corp. 176,200 19,161,750
-------------
57,596,580
- ----------------------------------------------------------------
CONSUMER CYCLICALS - 11.7%
- ----------------------------------------------------------------
AUTOS & HOUSING - 7.1%
Federal-Mogul Corp. 322,100 19,164,950
- ----------------------------------------------------------------
Fleetwood Enterprises, Inc. 81,000 2,814,750
- ----------------------------------------------------------------
Kaufman & Broad Home Corp. 79,300 2,279,875
- ----------------------------------------------------------------
Maytag Corp. 315,500 19,639,875
- ----------------------------------------------------------------
Owens Corning 224,300 7,948,631
- ----------------------------------------------------------------
USG Corp. 182,800 9,311,375
- ----------------------------------------------------------------
Whirlpool Corp. 72,300 4,003,612
-------------
65,163,068
- ----------------------------------------------------------------
LEISURE - 0.5%
Hasbro, Inc. 116,900 4,223,012
- ----------------------------------------------------------------
RETAIL: GENERAL - 3.7%
Dayton Hudson Corp. 199,100 10,801,175
- ----------------------------------------------------------------
Federated Department Stores,
Inc.(1) 123,700 5,388,681
- ----------------------------------------------------------------
Fruit of the Loom, Inc., Cl. A(1) 179,500 2,479,344
- ----------------------------------------------------------------
Gucci Group NV 78,600 3,821,925
- ----------------------------------------------------------------
K Mart Corp.(1) 266,100 4,074,656
- ----------------------------------------------------------------
Nordstrom, Inc. 111,400 3,864,187
- ----------------------------------------------------------------
Shaw Industries, Inc. 132,200 3,205,850
-------------
33,635,818
- ----------------------------------------------------------------
RETAIL: SPECIALTY - 0.4%
Payless ShoeSource, Inc.(1) 70,400 3,335,200
</TABLE>
23
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
CONSUMER STAPLES - 13.2%
- ----------------------------------------------------------------
BEVERAGES - 1.5%
Anheuser-Busch Cos., Inc. 204,900 $ 13,446,562
- ----------------------------------------------------------------
CONSUMER SERVICES - 0.6%
Hertz Corp., Cl. A 127,200 5,803,500
- ----------------------------------------------------------------
FOOD - 2.4%
General Mills, Inc. 131,700 10,239,675
- ----------------------------------------------------------------
IBP, Inc. 400,000 11,650,000
-------------
21,889,675
- ----------------------------------------------------------------
FOOD & DRUG RETAILERS - 4.6%
Albertson's, Inc. 193,600 12,329,900
- ----------------------------------------------------------------
Kroger Co.(1) 251,800 15,233,900
- ----------------------------------------------------------------
Safeway, Inc.(1) 246,900 15,045,469
-------------
42,609,269
- ----------------------------------------------------------------
HOUSEHOLD GOODS - 4.1%
Dial Corp. (The) 379,800 10,966,725
- ----------------------------------------------------------------
Fort James Corp. 288,262 11,530,480
- ----------------------------------------------------------------
Premark International, Inc. 424,400 14,694,850
-------------
37,192,055
- ----------------------------------------------------------------
ENERGY - 1.1%
- ----------------------------------------------------------------
OIL - DOMESTIC - 1.1%
Exxon Corp. 132,300 9,674,437
- ----------------------------------------------------------------
FINANCIAL - 16.8%
- ----------------------------------------------------------------
BANKS - 4.5%
Bank One Corp. 252,500 12,893,281
- ----------------------------------------------------------------
BankBoston Corp. 280,700 10,929,756
- ----------------------------------------------------------------
First Union Corp. 281,900 17,143,044
-------------
40,966,081
- ----------------------------------------------------------------
DIVERSIFIED FINANCIAL - 2.8%
Citigroup, Inc. 284,800 14,097,600
- ----------------------------------------------------------------
Fannie Mae 162,100 11,995,400
-------------
26,093,000
- ----------------------------------------------------------------
INSURANCE - 8.4%
Allstate Corp. 133,900 5,171,888
- ----------------------------------------------------------------
American General Corp. 117,600 9,172,800
- ----------------------------------------------------------------
American International Group, Inc. 143,000 13,817,375
- ----------------------------------------------------------------
Cigna Corp. 169,800 13,127,663
- ----------------------------------------------------------------
Conseco, Inc. 262,000 8,007,375
- ----------------------------------------------------------------
Equitable Cos., Inc. 40,500 2,343,938
- ----------------------------------------------------------------
Hartford Financial Services Group,
Inc. 104,600 5,739,925
- ----------------------------------------------------------------
Jefferson-Pilot Corp. 112,700 8,452,500
- ----------------------------------------------------------------
Transamerica Corp. 65,700 7,588,350
</TABLE>
24
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
INSURANCE (CONTINUED)
Travelers Property Casualty Corp.,
Cl. A 134,500 $ 4,169,500
-------------
77,591,314
- ----------------------------------------------------------------
SAVINGS & LOANS - 1.1%
Golden West Financial Corp. 107,000 9,810,563
- ----------------------------------------------------------------
HEALTHCARE - 7.9%
- ----------------------------------------------------------------
HEALTHCARE/DRUGS - 4.0%
Amgen, Inc.(1) 177,700 18,580,756
- ----------------------------------------------------------------
Genzyme Corp. (General Division)(1) 365,600 18,188,600
-------------
36,769,356
- ----------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
3.9%
Bard (C.R.), Inc. 321,100 15,894,450
- ----------------------------------------------------------------
Tenet Healthcare Corp.(1) 347,230 9,114,788
- ----------------------------------------------------------------
Total Renal Care Holdings, Inc.(1) 112,600 3,328,738
- ----------------------------------------------------------------
WellPoint Health Networks, Inc.(1) 88,200 7,673,400
-------------
36,011,376
- ----------------------------------------------------------------
TECHNOLOGY - 19.2%
- ----------------------------------------------------------------
COMPUTER HARDWARE - 13.6%
3Com Corp.(1) 302,600 13,560,263
- ----------------------------------------------------------------
Apple Computer, Inc.(1) 288,600 11,814,563
- ----------------------------------------------------------------
Compaq Computer Corp. 599,900 25,158,306
- ----------------------------------------------------------------
International Business Machines
Corp. 216,200 39,942,950
- ----------------------------------------------------------------
Lexmark International Group, Inc.,
Cl. A(1) 150,800 15,155,400
- ----------------------------------------------------------------
Seagate Technology, Inc.(1) 287,900 8,708,975
- ----------------------------------------------------------------
Storage Technology Corp. (New)(1) 303,600 10,796,775
-------------
125,137,232
- ----------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 2.3%
First Data Corp. 164,800 5,222,100
- ----------------------------------------------------------------
Network Associates, Inc.(1) 240,900 15,959,625
-------------
21,181,725
- ----------------------------------------------------------------
PHOTOGRAPHY - 3.3%
Eastman Kodak Co. 102,500 7,380,000
- ----------------------------------------------------------------
Xerox Corp. 197,900 23,352,200
-------------
30,732,200
- ----------------------------------------------------------------
TELECOMMUNICATIONS - 9.2%
- ----------------------------------------------------------------
TELEPHONE UTILITIES - 5.1%
Bell Atlantic Corp. 305,800 17,373,263
- ----------------------------------------------------------------
Century Telephone Enterprises, Inc. 104,250 7,036,875
- ----------------------------------------------------------------
U S West, Inc. 350,900 22,676,913
-------------
47,087,051
- ----------------------------------------------------------------
TELECOMMUNICATIONS/TECHNOLOGY -
4.1%
ALLTELL Corp. 196,500 11,753,156
</TABLE>
25
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS/TECHNOLOGY
(CONTINUED)
AT&T Corp. 349,300 $ 26,284,825
-------------
38,037,981
- ----------------------------------------------------------------
TRANSPORTATION - 0.9%
- ----------------------------------------------------------------
AIR TRANSPORTATION - 0.9%
AMR Corp.(1) 79,000 4,690,625
- ----------------------------------------------------------------
Delta Air Lines, Inc. 71,400 3,712,800
-------------
8,403,425
- ----------------------------------------------------------------
UTILITIES - 5.3%
- ----------------------------------------------------------------
ELECTRIC UTILITIES - 4.0%
CalEnergy, Inc.(1) 131,100 4,547,531
- ----------------------------------------------------------------
FPL Group, Inc. 151,200 9,317,700
- ----------------------------------------------------------------
Houston Industries, Inc. 261,500 8,400,688
- ----------------------------------------------------------------
Montana Power Co. 263,300 14,892,906
-------------
37,158,825
- ----------------------------------------------------------------
GAS UTILITIES - 1.3%
Columbia Energy Group 208,600 12,046,650
-------------
Total Common Stocks (Cost
$689,695,739) 873,956,012
PRINCIPAL
AMOUNT
- ----------------------------------------------------------------
SHORT-TERM NOTES - 3.0%(2)
- ----------------------------------------------------------------
Federal Home Loan Bank, 4.93%,
1/4/99 $ 5,000,000 4,997,946
- ----------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
4.97%, 1/12/99 9,000,000 8,986,333
5.02%, 1/15/99 11,000,000 10,978,183
5.07%, 1/7/99 3,000,000 2,997,465
-------------
Total Short-Term Notes (Cost
$27,959,927) 27,959,927
- ----------------------------------------------------------------
REPURCHASE AGREEMENTS - 2.6%
- ----------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.75%, dated 12/31/98,
to be repurchased at $23,812,561 on 1/4/99, collateralized by U.S. Treasury
Nts., 4%-8.875%, 2/15/99-7/15/06, with a value of $24,285,616 (Cost
$23,800,000) 23,800,000 23,800,000
- ----------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$741,455,666) 100.7% 925,715,939
- ----------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER
ASSETS (0.7) (6,844,480)
----------- -------------
NET ASSETS 100.0% $918,871,459
----------- -------------
----------- -------------
</TABLE>
1. Non-income producing security.
2. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
26
<PAGE>
PANORAMA SERIES FUND, INC. - GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS - 24.2%
- ---------------------------------------------------------------
GOVERNMENT AGENCY - 24.2%
- ---------------------------------------------------------------
FHLMC/FNMA/SPONSORED - 10.0%
Federal Home Loan Mortgage Corp.,
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, 10.50%, 10/1/20 $ 121,568 $ 134,687
- ---------------------------------------------------------------
Federal National Mortgage Assn.:
6.50%, 2/1/09-8/1/28 2,010,687 2,026,461
7.50%, 9/1/22 306,962 315,401
------------
2,476,549
- ---------------------------------------------------------------
GNMA/GUARANTEED - 14.2%
Government National Mortgage Assn.:
6.50%, 7/15/28 1,178,465 1,190,733
7%, 10/15/23-3/15/26 2,302,266 2,357,254
------------
3,547,987
------------
Total Mortgage-Backed Obligations
(Cost $5,930,746) 6,024,536
- ---------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 54.2%
- ---------------------------------------------------------------
AGENCY - 4.1%
- ---------------------------------------------------------------
GOVERNMENT AGENCY-SPONSORED - 4.1%
Federal Farm Credit Bank,
Medium-Term Nts., 6.37%, 9/1/00 1,000,000 1,021,560
- ---------------------------------------------------------------
TREASURY - 50.1%
- ---------------------------------------------------------------
U.S. Treasury Bonds:
7.50%, 11/15/16(1) 2,175,000 2,705,156
8.125%, 8/15/19 500,000 668,750
9.25%, 2/15/16 1,200,000 1,724,250
- ---------------------------------------------------------------
U.S. Treasury Nts.:
5.75%, 8/15/03 500,000 522,032
7.25%, 8/15/04 2,700,000 3,037,500
7.50%, 11/15/01-2/15/05 905,000 1,007,875
7.875%, 11/15/04 2,255,000 2,612,981
8.50%, 2/15/00 200,000 208,250
------------
12,486,794
------------
Total U.S. Government Obligations
(Cost $12,300,485) 13,508,354
- ---------------------------------------------------------------
SHORT-TERM NOTES - 15.2%(2)
- ---------------------------------------------------------------
Federal Farm Credit Bank, 4.95%,
1/15/99 1,395,000 1,392,314
- ---------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Mtg.-Backed Certificates, 7.125%,
7/21/99 1,000,000 1,011,496
- ---------------------------------------------------------------
Student Loan Marketing Assn.,
4.40%, 1/4/99 1,400,000 1,399,487
------------
Total Short-Term Notes (Cost
$3,839,071) 3,803,297
- ---------------------------------------------------------------
REPURCHASE AGREEMENTS - 4.4%
- ---------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.75%, dated 12/31/98,
to be repurchased at $1,100,581 on 1/4/99, collateralized by U.S. Treasury Nts.,
4%-8.875%, 2/15/99-7/15/06, with a value of
$1,122,444 (Cost $1,100,000) 1,100,000 1,100,000
- ---------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$23,170,302) 98.0% 24,436,187
- ---------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 2.0 486,692
----------- ------------
NET ASSETS 100.0% $24,922,879
----------- ------------
----------- ------------
</TABLE>
1. Securities with an aggregate market value of $49,750 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
2. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
27
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 97.0%
- -------------------------------------------------------------
BASIC MATERIALS - 0.7%
- -------------------------------------------------------------
CHEMICALS - 0.7%
Fuji Photo Film Co. 19,000 $ 704,636
- -------------------------------------------------------------
CAPITAL GOODS - 8.1%
- -------------------------------------------------------------
ELECTRICAL EQUIPMENT - 0.8%
Toshiba Corp. 138,000 820,080
- -------------------------------------------------------------
INDUSTRIAL SERVICES - 1.3%
Hays plc 156,000 1,332,038
- -------------------------------------------------------------
MANUFACTURING - 6.0%
BBA Group plc 170,000 1,055,566
- -------------------------------------------------------------
Brambles Industries Ltd. 33,000 804,113
- -------------------------------------------------------------
Mannesmann AG 20,000 2,314,586
- -------------------------------------------------------------
Smiths Industries plc 91,000 1,270,393
- -------------------------------------------------------------
Taiyo Yuden Co. 60,000 708,874
------------
6,153,532
- -------------------------------------------------------------
CONSUMER CYCLICALS - 14.3%
- -------------------------------------------------------------
AUTOS & HOUSING - 3.5%
Bridgestone Corp. 22,000 498,278
- -------------------------------------------------------------
Cie de Saint Gobain 7,000 988,721
- -------------------------------------------------------------
Suzuki Motor Corp. 58,000 686,269
- -------------------------------------------------------------
Valeo SA 18,000 1,419,117
------------
3,592,385
- -------------------------------------------------------------
LEISURE & ENTERTAINMENT - 1.3%
CDL Hotels International Ltd. 2,250,000 577,964
- -------------------------------------------------------------
Nintendo Co. Ltd. 8,400 812,185
------------
1,390,149
- -------------------------------------------------------------
MEDIA - 2.9%
Benpres Holdings Corp.(1) 960,000 155,480
- -------------------------------------------------------------
VNU-Verenigde Nederlandse
Uitgeverbedrijven Verenigd Bezit 35,000 1,320,426
- -------------------------------------------------------------
Wolters Kluwer NV 7,000 1,498,721
------------
2,974,627
- -------------------------------------------------------------
RETAIL: GENERAL - 1.4%
Circle K Japan Co. Ltd. 10,200 447,629
- -------------------------------------------------------------
Ito-Yokado Co. Ltd. 15,000 1,046,358
------------
1,493,987
- -------------------------------------------------------------
RETAIL: SPECIALTY - 5.2%
Boots Co. plc 59,000 999,252
- -------------------------------------------------------------
Hennes & Mauritz AB, B Shares 23,000 1,878,468
- -------------------------------------------------------------
Kingfisher plc 88,000 882,720
- -------------------------------------------------------------
Koninklijke Ahold NV 45,000 1,664,121
------------
5,424,561
</TABLE>
28
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -------------------------------------------------------------
<S> <C> <C>
CONSUMER STAPLES - 13.0%
- -------------------------------------------------------------
BEVERAGES - 1.0%
Scottish & Newcastle plc 88,000 $ 994,336
- -------------------------------------------------------------
ENTERTAINMENT - 0.9%
Shaw Brothers (Hong Kong) Ltd. 2,200,000 951,333
- -------------------------------------------------------------
FOOD - 6.1%
Groupe Danone 6,000 1,718,580
- -------------------------------------------------------------
Jeronimo Martins & Filho SA 20,000 1,094,145
- -------------------------------------------------------------
Kerry Group plc, Cl. A 75,000 1,023,195
- -------------------------------------------------------------
Koninklijke Numico NV 23,000 1,096,891
- -------------------------------------------------------------
Nestle SA 650 1,414,483
------------
6,347,294
- -------------------------------------------------------------
FOOD & DRUG RETAILERS - 2.6%
Colruyt SA 1,500 1,257,541
- -------------------------------------------------------------
William Morrison Supermarkets plc 306,000 1,405,355
------------
2,662,896
- -------------------------------------------------------------
HOUSEHOLD GOODS - 2.4%
L'OREAL 2,400 1,735,766
- -------------------------------------------------------------
Reckitt & Colman plc 58,000 765,466
------------
2,501,232
- -------------------------------------------------------------
ENERGY - 2.4%
- -------------------------------------------------------------
OIL - DOMESTIC - 1.1%
Total SA, B Shares 11,157 1,130,479
- -------------------------------------------------------------
OIL - INTERNATIONAL - 1.3%
Shell Transport & Trading Co. plc 227,000 1,385,028
- -------------------------------------------------------------
FINANCIAL - 17.1%
- -------------------------------------------------------------
BANKS - 7.4%
Banco Popular Espanol SA 17,000 1,283,777
- -------------------------------------------------------------
Banco Santander SA 900 17,912
- -------------------------------------------------------------
Bank Handlowy W Warszawie, GDR(2) 28,000 364,000
- -------------------------------------------------------------
Bayerische Hypo-Und Vereinsbank 14,600 1,155,359
- -------------------------------------------------------------
Credito Italiano SpA 250,000 1,485,088
- -------------------------------------------------------------
Lloyds TSB Group plc 133,000 1,885,396
- -------------------------------------------------------------
Nordbanken Holding AB 220,000 1,411,380
------------
7,602,912
- -------------------------------------------------------------
DIVERSIFIED FINANCIAL - 4.6%
Cattles plc 110,000 1,153,554
- -------------------------------------------------------------
ING Groep NV 20,000 1,220,248
- -------------------------------------------------------------
Lend Lease Corp. Ltd. 45,000 606,878
- -------------------------------------------------------------
Northern Rock plc 133,000 1,265,751
- -------------------------------------------------------------
Perlis Plantations Berhad(3) 175,000 143,684
- -------------------------------------------------------------
Promise Co. Ltd. 8,000 415,364
------------
4,805,479
</TABLE>
29
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -------------------------------------------------------------
<S> <C> <C>
INSURANCE - 5.1%
AEGON NV 13,000 $ 1,597,406
- -------------------------------------------------------------
Assicurazioni Generali SpA 30,000 1,255,388
- -------------------------------------------------------------
AXA SA 10,000 1,450,052
- -------------------------------------------------------------
Irish Life plc 100,000 942,309
------------
5,245,155
- -------------------------------------------------------------
HEALTHCARE - 14.2%
- -------------------------------------------------------------
HEALTHCARE/DRUGS - 9.9%
Fresenius AG, Preference 7,000 1,471,008
- -------------------------------------------------------------
Gedeon Richter Ltd., GDR(2) 17,000 726,750
- -------------------------------------------------------------
Novartis AG 550 1,080,786
- -------------------------------------------------------------
Novartis AG, Bearer Shares 300 589,520
- -------------------------------------------------------------
Novo-Nordisk AS, B Shares 10,000 1,319,853
- -------------------------------------------------------------
Sanofi SA 10,000 1,646,973
- -------------------------------------------------------------
Schering AG 8,000 1,006,289
- -------------------------------------------------------------
Takeda Chemical Industries Ltd. 25,000 960,265
- -------------------------------------------------------------
Zeneca Group plc 33,000 1,431,866
------------
10,233,310
- -------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
4.3%
Luxottica Group SpA, Sponsored ADR 75,000 900,000
- -------------------------------------------------------------
Olympus Optical Co. Ltd. 79,000 906,146
- -------------------------------------------------------------
Pliva d.d., Sponsored GDR(2) 30,000 498,000
- -------------------------------------------------------------
SmithKline Beecham plc 106,000 1,476,284
- -------------------------------------------------------------
Terumo Corp. 28,000 657,660
------------
4,438,090
- -------------------------------------------------------------
TECHNOLOGY - 8.8%
- -------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 0.9%
SAP AG, Preference 2,000 960,058
- -------------------------------------------------------------
ELECTRONICS - 7.9%
Bowthorpe plc 165,000 949,288
- -------------------------------------------------------------
Electrocomponents plc 161,000 1,075,761
- -------------------------------------------------------------
Getronics NV 30,000 1,486,678
- -------------------------------------------------------------
Hoshiden Corp. 65,000 1,131,832
- -------------------------------------------------------------
Sony Corp. 13,000 944,724
- -------------------------------------------------------------
TDK Corp. 9,000 820,927
- -------------------------------------------------------------
VTech Holdings Ltd. 400,000 1,745,186
------------
8,154,396
- -------------------------------------------------------------
TELECOMMUNICATIONS - 13.0%
- -------------------------------------------------------------
TELEPHONE UTILITIES - 5.8%
Cable & Wireless Communications
plc(1) 130,000 1,184,393
- -------------------------------------------------------------
Tele Danmark AS, B Shares 16,000 2,159,531
- -------------------------------------------------------------
Telecom Italia Mobile SpA 180,000 1,331,803
- -------------------------------------------------------------
Telefonica de Espana 30,000 1,336,003
------------
6,011,730
</TABLE>
30
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- -------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS/TECHNOLOGY -
7.2%
Ericsson LM, B Shares 35,000 $ 833,381
- -------------------------------------------------------------
Matsushita Communication Industrial
Co. 16,000 753,024
- -------------------------------------------------------------
Nippon Telegraph & Telephone Corp. 88 677,581
- -------------------------------------------------------------
Nokia Oyj, A Shares 8,000 979,601
- -------------------------------------------------------------
NTT Mobile Communications Network,
Inc. 23 944,371
- -------------------------------------------------------------
Telecom Italia SpA 150,000 1,282,679
- -------------------------------------------------------------
Vodafone Group plc 122,000 1,970,169
------------
7,440,806
- -------------------------------------------------------------
TRANSPORTATION - 1.3%
- -------------------------------------------------------------
AIR TRANSPORTATION - 1.3%
BAA plc 115,000 1,330,877
- -------------------------------------------------------------
UTILITIES - 4.1%
- -------------------------------------------------------------
ELECTRIC UTILITIES - 3.2%
Endesa SA 35,000 928,780
- -------------------------------------------------------------
United Utilities plc 86,000 1,191,323
- -------------------------------------------------------------
Vivendi (Ex-Generale des Eaux) 4,500 1,168,097
------------
3,288,200
- -------------------------------------------------------------
GAS UTILITIES - 0.9%
RWE AG, Preference 25,000 908,122
------------
Total Common Stocks (Cost
$74,409,375) 100,277,728
UNITS
- -------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.0%
- -------------------------------------------------------------
Telefonica de Espana Rts., Exp.
1/99 (Cost $0) 30,000 26,678
PRINCIPAL
AMOUNT
- -------------------------------------------------------------
REPURCHASE AGREEMENTS - 2.7%
- -------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.75%, dated 12/31/98,
to be repurchased at $2,801,478 on 1/4/99, collateralized by U.S. Treasury Nts.,
4%-8.875%, 2/15/99-7/15/06, with a value of $2,857,131 (Cost
$2,800,000) $2,800,000 2,800,000
- -------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$77,209,375) 99.7% 103,104,406
- -------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.3 299,342
---------- ------------
NET ASSETS 100.0% $103,403,748
---------- ------------
---------- ------------
</TABLE>
1. Non-income producing security.
2. Represents a security 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 $1,588,750 or 1.54% of the Fund's net
assets as of December 31, 1998.
3. Identifies issues considered to be illiquid or restricted - See Note 6 of
Notes to Financial Statements.
31
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
Distribution of investments by a country of issue, as a percentage of total
investments at value, is as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
COUNTRY MARKET VALUE PERCENT
- ---------------------------------------------------------
Great Britain $ 25,004,817 24.2%
- ---------------------------------------------------------
Japan 13,936,203 13.4
- ---------------------------------------------------------
France 11,257,784 10.9
- ---------------------------------------------------------
The Netherlands 9,884,492 9.6
- ---------------------------------------------------------
Germany 7,815,422 7.6
- ---------------------------------------------------------
Italy 6,254,958 6.1
- ---------------------------------------------------------
Sweden 4,123,229 4.0
- ---------------------------------------------------------
Spain 3,593,149 3.5
- ---------------------------------------------------------
Denmark 3,479,383 3.4
- ---------------------------------------------------------
Hong Kong 3,274,483 3.2
- ---------------------------------------------------------
Switzerland 3,084,790 3.0
- ---------------------------------------------------------
United States 2,800,000 2.7
- ---------------------------------------------------------
Ireland 1,965,504 1.9
- ---------------------------------------------------------
Australia 1,410,991 1.4
- ---------------------------------------------------------
Belgium 1,257,541 1.2
- ---------------------------------------------------------
Portugal 1,094,145 1.1
- ---------------------------------------------------------
Finland 979,601 0.9
- ---------------------------------------------------------
Hungary 726,750 0.7
- ---------------------------------------------------------
Croatia 498,000 0.5
- ---------------------------------------------------------
Poland 364,000 0.4
- ---------------------------------------------------------
Philippines 155,480 0.2
- ---------------------------------------------------------
Malaysia 143,684 0.1
------------ ------
Total $103,104,406 100.0%
------------ ------
------------ ------
</TABLE>
See accompanying Notes to Financial Statements.
32
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
ASSET-BACKED SECURITIES - 1.7%
- ---------------------------------------------------------------
Arcadia Automobile Receivables
Trust, Automobile
Receivables-Backed Nts., Series
1998-B, Cl. A3, 5.95%, 11/15/02 $ 250,000 $ 251,172
- ---------------------------------------------------------------
Dayton Hudson Credit Card Master
Trust, Asset-Backed Certificates,
Series 1997-1, Cl. A, 6.25%,
8/25/05 125,000 127,695
- ---------------------------------------------------------------
IROQUOIS Trust, Asset-Backed
Amortizing Nts., Series 1997-2, Cl.
A, 6.752%, 6/25/07(1) 175,000 175,820
- ---------------------------------------------------------------
Olympic Automobile Receivables
Trust, Automobile
Receivables-Backed Nts., Series
1997-A, Cl. A-5, 6.80%, 2/15/05 200,000 203,000
------------
Total Asset-Backed Securities (Cost
$750,722) 757,687
- ---------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS - 5.3%
- ---------------------------------------------------------------
Countrywide Funding Corp., Mtg.
Pass-Through Certificates, Series
1994-10, Cl. A3, 6%, 5/25/09 250,000 248,357
- ---------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 1711, Cl. EA,
7%, 3/15/24 300,000 306,843
- ---------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Gtd. Multiclass Mtg. Participation
Certificates:
6%, 3/1/09 175,841 176,970
Series 1843, Cl. VB, 7%, 4/15/03 95,000 97,019
Series 1849, Cl. VA, 6%, 12/15/10 182,480 184,077
- ---------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Interest-Only Stripped Mtg.-Backed
Security:
Series 1542, Cl. QC, 7.50-25.82%,
10/15/20(2) 900,000 118,125
Series 1583, Cl. IC, 7.03%,
1/15/20(2) 433,807 42,567
Series 1661, Cl. PK, 6.61-7.47%,
11/15/06(2) 745,601 47,998
- ---------------------------------------------------------------
Federal National Mortgage Assn.:
6%, 12/1/03 132,420 132,839
6.50%, 4/1/26 162,143 163,305
7%, 4/1/00 58,390 58,335
- ---------------------------------------------------------------
Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1993-190, Cl. Z, 5.85%,
7/25/08 142,928 142,660
- ---------------------------------------------------------------
GE Capital Mortgage Services, Inc.,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Series 1994-7, Cl. A18, 6%, 2/25/09 174,024 166,248
- ---------------------------------------------------------------
IMC Home Equity Trust, Asset-Backed
Home Equity Securities, Series
1998-3, Cl. A5, 6.36%, 8/20/22(3) 425,000 425,266
------------
Total Mortgage-Backed Obligations
(Cost $2,288,437) 2,310,609
- ---------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 27.4%
- ---------------------------------------------------------------
AGENCY - 2.0%
- ---------------------------------------------------------------
GOVERNMENT AGENCY-SPONSORED - 2.0%
Federal Farm Credit Bank,
Medium-Term Nts., 5.24%, 10/1/08 225,000 223,957
- ---------------------------------------------------------------
Federal Home Loan Bank, 5.57%,
8/17/00 650,000 655,791
------------
879,748
- ---------------------------------------------------------------
TREASURY - 25.4%
- ---------------------------------------------------------------
U.S. Treasury Bonds:
6%, 2/15/26 1,025,000 1,118,852
</TABLE>
33
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
TREASURY (CONTINUED)
U.S. Treasury Bonds: (Continued)
7.50%, 11/15/16 $ 1,465,000 $ 1,822,094
STRIPS, 5.62%, 11/15/18(4) 900,000 299,910
- ---------------------------------------------------------------
U.S. Treasury Nts.:
5.625%, 2/15/06 550,000 580,250
5.75%, 8/15/03 1,500,000 1,566,094
6.125%, 8/15/07 450,000 491,906
6.50%, 8/15/05 1,375,000 1,511,212
6.75%, 6/30/99 565,000 571,180
7.50%, 11/15/01 2,925,000 3,144,375
------------
Total U.S. Government Obligations
(Cost $11,531,867) 11,985,621
- ---------------------------------------------------------------
CORPORATE BONDS AND NOTES - 33.5%
- ---------------------------------------------------------------
CHEMICALS - 0.8% Laroche Industries, Inc., 9.50% Sr.
Sub. Nts., Series B, 9/15/07 50,000 40,250
- ---------------------------------------------------------------
Morton International, Inc., 9.25%
Credit Sensitive Nts., 6/1/20 75,000 102,087
- ---------------------------------------------------------------
PPG Industries, Inc., 9% Debs.,
5/1/21 75,000 95,939
- ---------------------------------------------------------------
Rexene Corp. (New), 11.75% Sr.
Nts., 12/1/04(1) 75,000 80,625
- ---------------------------------------------------------------
Texas Petrochemicals Corp., 11.125%
Sr. Sub. Nts., Series B, 7/1/06 50,000 49,500
------------
368,401
- ---------------------------------------------------------------
CONSUMER DURABLES - 0.4%
Black & Decker Corp., 6.625% Nts.,
11/15/00 155,000 157,650
- ---------------------------------------------------------------
CONSUMER NON-DURABLES - 0.4%
Kimberly-Clark Corp., 7.875% Debs.,
2/1/23 75,000 83,368
- ---------------------------------------------------------------
Revlon Consumer Products Corp.,
8.625% Sr. Unsec. Sub. Nts., 2/1/08 50,000 45,750
- ---------------------------------------------------------------
William Carter Co., 10.375% Sr.
Sub. Nts., Series A, 12/1/06 50,000 53,000
------------
182,118
- ---------------------------------------------------------------
ENERGY - 2.2%
Abraxas Petroleum Corp./CDN Abraxas
Petroleum Ltd., 11.50% Sr. Unsec.
Nts., Series D, 11/1/04 50,000 38,000
- ---------------------------------------------------------------
Coastal Corp.:
8.125% Sr. Nts., 9/15/02 95,000 101,825
8.75% Sr. Nts., 5/15/99 50,000 50,524
- ---------------------------------------------------------------
Crown Central Petroleum Corp.,
10.875% Sr. Nts., 2/1/05 50,000 48,250
- ---------------------------------------------------------------
Forcenergy, Inc., 8.50% Sr. Sub.
Nts., Series B, 2/15/07 50,000 37,250
- ---------------------------------------------------------------
Gulf Canada Resources Ltd.:
8.25% Sr. Nts., 3/15/17 125,000 113,047
9% Debs., 8/15/99 75,000 75,375
- ---------------------------------------------------------------
Louisiana Land & Exploration Co.,
7.65% Debs., 12/1/23 75,000 81,101
- ---------------------------------------------------------------
Norcen Energy Resources Ltd., 6.80%
Debs., 7/2/02 100,000 101,139
- ---------------------------------------------------------------
Petroleum Geo-Services ASA, 7.50%
Nts., 3/31/07 75,000 79,910
- ---------------------------------------------------------------
RAM Energy, Inc., 11.50% Sr. Unsec.
Nts., 2/15/08 50,000 35,250
- ---------------------------------------------------------------
Southwest Royalties, Inc., 10.50%
Sr. Nts., Series B, 10/15/04 50,000 20,250
- ---------------------------------------------------------------
Standard Oil, 9% Gtd. Debs., 6/1/19 75,000 75,815
</TABLE>
34
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
ENERGY (CONTINUED)
Transamerican Energy Corp., 11.50%
Sr. Nts., Series B, 6/15/02(1) $ 25,000 $ 8,125
- ---------------------------------------------------------------
Williams Holdings of Delaware,
Inc., 6.25% Sr. Unsec. Debs.,
2/1/06 75,000 77,174
------------
943,035
- ---------------------------------------------------------------
FINANCIAL - 6.4% Aetna Industries, Inc., 11.875% Sr.
Nts., 10/1/06(1) 50,000 52,750
- ---------------------------------------------------------------
American General Institutional
Capital B, 8.125% Bonds, Series B,
3/15/46(5) 75,000 86,572
- ---------------------------------------------------------------
BankAmerica Corp. (New), 8.50%
Exchangeable Sub. Capital Nts.,
3/1/99 (exchangeable for common,
perpetual preferred stock or other
capital securities) 55,000 55,210
- ---------------------------------------------------------------
Capital One Bank, Inc., 6.375% Sr.
Nts., 2/15/03 200,000 192,523
- ---------------------------------------------------------------
Capital One Financial Corp., 7.25%
Nts., 12/1/03 90,000 88,582
- ---------------------------------------------------------------
Chelsea GCA Realty Partner, Inc.,
7.75% Unsec. Nts., 1/26/01 310,000 308,017
- ---------------------------------------------------------------
Conseco Financing Trust III, 8.796%
Bonds, 4/1/27 150,000 143,896
- ---------------------------------------------------------------
Conseco, Inc., 6.40% Nts., 6/15/01 250,000 239,764
- ---------------------------------------------------------------
Countrywide Home Loans, Inc., 6.05%
Medium-Term Nts., Series D, 3/1/01 250,000 251,039
- ---------------------------------------------------------------
Fleet Mtg./Norstar Group, Inc.,
9.90% Sub. Nts., 6/15/01 145,000 159,017
- ---------------------------------------------------------------
General Electric Capital Corp.,
5.77% Nts., Series A, 8/27/01 225,000 227,508
- ---------------------------------------------------------------
General Motors Acceptance Corp.,
5.625% Nts., 2/15/01 250,000 250,892
- ---------------------------------------------------------------
GS Escrow Corp., 6.75% Sr. Nts.,
8/1/01(5) 225,000 221,895
- ---------------------------------------------------------------
Integra Financial Corp., 6.50% Sub.
Nts., 4/15/00 125,000 126,659
- ---------------------------------------------------------------
Olympic Financial Ltd., Units (each
unit consists of $1,000 principal
amount of 11.50% sr. nts., 3/15/07
and one warrant to purchase 6.84
shares of common stock)(1)(6) 50,000 37,750
- ---------------------------------------------------------------
Simon DeBartolo Group, Inc., 6.625%
Nts., 6/15/03 250,000 247,422
- ---------------------------------------------------------------
Travelers Property Casualty Corp.,
6.75% Nts., 4/15/01 125,000 128,008
------------
2,817,504
- ---------------------------------------------------------------
FOOD & DRUG - 0.5%
Jitney-Jungle Stores of America,
Inc., 10.375% Sr. Sub. Nts.,
9/15/07 50,000 51,500
- ---------------------------------------------------------------
Tricon Global Restaurants, Inc.,
7.45% Sr. Unsec. Nts., 5/15/05 150,000 154,801
------------
206,301
- ---------------------------------------------------------------
FOOD/TOBACCO - 1.1%
AmeriServe Food Distribution, Inc.,
8.875% Sr. Nts., 10/15/06 50,000 46,500
- ---------------------------------------------------------------
Dole Food Distributing, Inc., 6.75%
Nts., 7/15/00 150,000 151,459
- ---------------------------------------------------------------
Eagle Family Foods, Inc., 8.75% Sr.
Sub. Nts., 1/15/08 50,000 47,500
- ---------------------------------------------------------------
Grand Metro Inventory Corp., 7.125%
Nts., 9/15/04 225,000 241,814
------------
487,273
- ---------------------------------------------------------------
FOREST PRODUCTS/CONTAINERS - 0.5%
Malette, Inc., 12.25% Sr. Sec.
Nts., 7/15/04(1) 50,000 54,250
- ---------------------------------------------------------------
Portola Packaging, Inc., 10.75% Sr.
Nts., 10/1/05(1) 75,000 76,875
- ---------------------------------------------------------------
Stone Container Corp., 9.875% Sr.
Nts., 2/1/01 75,000 76,312
------------
207,437
</TABLE>
35
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
GAMING/LEISURE - 2.8%
American Skiing Corp., 12% Sr. Sub.
Nts., Series B, 7/15/06(1) $ 50,000 $ 52,250
- ---------------------------------------------------------------
Ameristar Casinos, Inc., 10.50% Sr.
Sub. Nts., Series B, 8/1/04 50,000 45,750
- ---------------------------------------------------------------
Bally Total Fitness Holding Corp.,
9.875% Sr. Sub. Nts., Series B,
10/15/07 50,000 49,250
- ---------------------------------------------------------------
Casino America, Inc., 12.50% Sr.
Nts., 8/1/03 75,000 83,437
- ---------------------------------------------------------------
Casino Magic of Louisiana Corp.,
13% First Mtg. Nts., Series B,
8/15/03 75,000 85,125
- ---------------------------------------------------------------
Colorado Gaming & Entertainment
Co., 12% Sr. Sec. Nts., 6/1/03(1) 50,000 53,750
- ---------------------------------------------------------------
Hilton Hotels Corp., 7.375% Nts.,
6/1/02 150,000 151,244
- ---------------------------------------------------------------
HMH Properties, Inc., 7.875% Sr.
Nts., Series A, 8/1/05 50,000 49,000
- ---------------------------------------------------------------
Hollywood Casino Corp., 12.75% Gtd.
Sr. Sec. Nts., 11/1/03 50,000 53,250
- ---------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr.
Sub. Nts., 6/15/07 50,000 51,875
- ---------------------------------------------------------------
Intrawest Corp., 9.75% Sr. Unsec.
Nts., 8/15/08(5) 50,000 51,500
- ---------------------------------------------------------------
Lady Luck Gaming Corp., 11.875%
First Mtg. Nts., 3/1/01(1) 50,000 50,750
- ---------------------------------------------------------------
Mohegan Tribal Gaming Authority
(Connecticut), 13.50% Sr. Sec.
Nts., Series B, 11/15/02 75,000 90,375
- ---------------------------------------------------------------
Park Place Entertainment Corp.,
7.875% Sr. Sub. Nts., 12/15/05(5) 50,000 50,312
- ---------------------------------------------------------------
Players International, Inc.,
10.875% Sr. Nts., 4/15/05 50,000 53,875
- ---------------------------------------------------------------
Prime Hospitality Corp., 9.75% Sr.
Sub. Nts., 4/1/07 75,000 76,875
- ---------------------------------------------------------------
Rio Hotel & Casino, Inc., 10.625%
Sr. Sub. Nts., 7/15/05 75,000 82,125
- ---------------------------------------------------------------
Santa Fe Hotel, Inc., 11% Gtd.
First Mtg. Nts., 12/15/00 50,000 46,000
- ---------------------------------------------------------------
Station Casinos, Inc., 9.75% Sr.
Sub. Nts., 4/15/07 50,000 52,500
------------
1,229,243
- ---------------------------------------------------------------
HEALTHCARE - 1.1%
Columbia/HCA Healthcare Corp.,
6.875% Nts., 7/15/01 145,000 143,963
- ---------------------------------------------------------------
Dade International, Inc., 11.125%
Sr. Sub. Nts., 5/1/06 50,000 55,750
- ---------------------------------------------------------------
ICN Pharmaceutical, Inc., 8.75% Sr.
Nts., 11/15/08(5) 50,000 50,750
- ---------------------------------------------------------------
Integrated Health Services, Inc.,
9.25% Sr. Sub. Nts., Series A,
1/15/08 50,000 47,000
- ---------------------------------------------------------------
Kinetic Concepts, Inc., 9.625% Sr.
Unsec. Sub. Nts., Series B, 11/1/07 75,000 72,188
- ---------------------------------------------------------------
Paracelsus Healthcare Corp., 10%
Sr. Unsec. Sub. Nts., 8/15/06(1) 50,000 45,250
- ---------------------------------------------------------------
Playtex Products, Inc., 8.875% Sr.
Nts., 7/15/04 50,000 52,625
------------
467,526
- ---------------------------------------------------------------
HOUSING - 0.7% Ainsworth Lumber, Inc., 12.50% Sr.
Nts., 7/15/07(7) 50,000 50,000
- ---------------------------------------------------------------
American Standard Cos., Inc.,
10.875% Sr. Nts., 5/15/99 140,000 140,700
- ---------------------------------------------------------------
First Industrial LP, 7.15% Bonds,
5/15/27 125,000 126,056
------------
316,756
- ---------------------------------------------------------------
MANUFACTURING - 1.4%
Jordan Industries, Inc., 10.375%
Sr. Nts., Series B, 8/1/07(1) 50,000 51,250
- ---------------------------------------------------------------
Titan Wheel International, Inc.,
8.75% Sr. Sub. Nts., 4/1/07 50,000 49,250
- ---------------------------------------------------------------
U.S. Filter Corp., 6.375% Bonds,
5/15/01 250,000 248,341
</TABLE>
36
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
MANUFACTURING (CONTINUED)
U.S. Industries, Inc., 7.125% Sr.
Nts., 10/15/03(5) $ 275,000 $ 275,336
------------
624,177
- ---------------------------------------------------------------
MEDIA/ENTERTAINMENT-BROADCASTING -
0.7%
Allbritton Communications Co.,
8.875% Sr. Sub. Nts., Series B,
2/1/08 50,000 50,750
- ---------------------------------------------------------------
Fox/Liberty Networks LLC, 8.875%
Sr. Nts., 8/15/07 25,000 25,625
- ---------------------------------------------------------------
Interepublic National Radio Sales
Corp., 10% Sr. Unsec. Sub. Nts.,
7/1/08(1) 75,000 77,625
- ---------------------------------------------------------------
Sinclair Broadcast Group, Inc., 10%
Sr. Sub. Nts., 9/30/05 75,000 79,875
- ---------------------------------------------------------------
Spanish Broadcasting Systems, Inc.,
11% Sr. Nts., 3/15/04 50,000 53,250
------------
287,125
- ---------------------------------------------------------------
MEDIA/ENTERTAINMENT-CABLE/WIRELESS
VIDEO - 1.2%
Adelphia Communications Corp.,
10.50% Sr. Unsec. Nts., Series B,
7/15/04 50,000 56,250
- ---------------------------------------------------------------
Century Communications Corp., Zero
Coupon Sr. Disc. Nts., Series B,
8.51%, 1/15/08(4) 50,000 25,250
- ---------------------------------------------------------------
Comcast Corp., 9.125% Sr. Sub.
Debs., 10/15/06 75,000 80,250
- ---------------------------------------------------------------
Diva Systems Corp., Units (each
unit consists of $1,000 principal
amount of 0%/12.625% sr. disc.
nts., 3/1/08 and three warrants to
purchase three shares of common
stock)(5)(6)(8) 100,000 41,500
- ---------------------------------------------------------------
EchoStar Communications Corp.,
0%/12.875% Sr. Disc. Nts.,
6/1/04(8) 25,000 25,750
- ---------------------------------------------------------------
Falcon Holding Group LP, 0%/9.285%
Sr. Disc. Debs., Series B,
4/15/10(8) 150,000 103,500
- ---------------------------------------------------------------
James Cable Partners LP, 10.75% Sr.
Nts., Series B, 8/15/04 50,000 52,250
- ---------------------------------------------------------------
Marcus Cable Operating Co.
LP/Marcus Cable Capital Corp.,
0%/13.50% Gtd. Sr. Sub. Disc. Nts.,
Series II, 8/1/04(8) 50,000 50,625
- ---------------------------------------------------------------
TCI Satellite Entertainment, Inc.,
10.875% Sr. Sub. Nts., 2/15/07 50,000 16,750
- ---------------------------------------------------------------
United International Holdings,
Inc., 0%/10.75% Sr. Disc. Nts.,
Series B, 2/15/08(8) 100,000 54,500
------------
506,625
- ---------------------------------------------------------------
MEDIA/ENTERTAINMENT-DIVERSIFIED
MEDIA - 0.4%
Big Flower Press Holdings, Inc.,
8.625% Sr. Sub. Nts., 12/1/08(5) 50,000 50,750
- ---------------------------------------------------------------
Hollinger International Publishing,
Inc., 9.25% Gtd. Sr. Sub. Nts.,
3/15/07 50,000 53,000
- ---------------------------------------------------------------
MDC Communications Corp., 10.50%
Sr. Sub. Nts., 12/1/06 50,000 51,250
------------
155,000
- ---------------------------------------------------------------
MEDIA/ENTERTAINMENT-TELECOMMUNICATIONS
- -3.3%
Advanstar Communications, Inc.,
9.25% Sr. Sub. Nts., 5/1/08 100,000 101,000
- ---------------------------------------------------------------
AT&T Capital Corp., 6.25%
Medium-Term Nts., Series F, 5/15/01 225,000 222,137
- ---------------------------------------------------------------
Coaxial Communications, Inc., 10%
Sr. Unsec. Nts., 8/15/06(1) 50,000 51,875
- ---------------------------------------------------------------
Comcast UK Cable Partner Ltd.,
0%/11.20% Sr. Disc. Debs.,
11/15/07(8) 75,000 63,750
- ---------------------------------------------------------------
Diamond Cable Communications plc,
0%/10.75% Sr. Disc. Nts.,
2/15/07(8) 50,000 35,500
- ---------------------------------------------------------------
e.spire Communications, Inc.,
0%/13% Sr. Disc. Nts., 11/1/05(8) 50,000 37,750
- ---------------------------------------------------------------
Exodus Communications, Inc., 11.25%
Sr. Nts., 7/1/08 50,000 50,250
- ---------------------------------------------------------------
Globix Corp., 13% Sr. Unsec. Nts.,
5/1/05 50,000 41,250
- ---------------------------------------------------------------
GST USA, Inc., 0%/13.875% Gtd. Sr.
Disc. Nts., 12/15/05(8) 50,000 36,125
- ---------------------------------------------------------------
Hermes Europe Railtel BV, 10.375%
Sr. Nts., 1/15/09(5)(9) 50,000 50,750
</TABLE>
37
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
MEDIA/ENTERTAINMENT-TELECOMMUNICATIONS
(CONTINUED)
ICG Holdings, Inc., 0%/11.625% Sr.
Disc. Nts., 3/15/07(8) $ 75,000 $ 48,750
- ---------------------------------------------------------------
International CableTel, Inc.,
0%/11.50% Sr. Deferred Coupon Nts.,
Series B, 2/1/06(8) 100,000 82,500
- ---------------------------------------------------------------
IXC Communications, Inc., 9% Sr.
Sub. Nts., 4/15/08 50,000 50,375
- ---------------------------------------------------------------
Level 3 Communications, Inc.,
9.125% Sr. Unsec. Nts., 5/1/08 50,000 49,625
- ---------------------------------------------------------------
PSINet, Inc., 11.50% Sr. Nts.,
11/1/08(5) 50,000 52,625
- ---------------------------------------------------------------
Qwest Communications International,
Inc., 0%/9.47% Sr. Disc. Nts.,
10/15/07(8) 50,000 38,875
- ---------------------------------------------------------------
RSL Communications plc, 9.125% Sr.
Unsec. Nts., 3/1/08 50,000 46,250
- ---------------------------------------------------------------
Talton Holdings, Inc., 11% Gtd. Sr.
Unsec. Bonds, Series B, 6/30/07 50,000 47,750
- ---------------------------------------------------------------
TeleWest Communications plc:
0%/11% Sr. Disc. Debs., 10/1/07(8) 50,000 42,000
9.625% Sr. Debs., 10/1/06 50,000 51,750
- ---------------------------------------------------------------
US West Capital Funding, Inc.,
6.125% Nts., 7/15/02 225,000 230,277
------------
1,431,164
- ---------------------------------------------------------------
MEDIA/ENTERTAINMENT-WIRELESS
COMMUNICATIONS - 1.1%
Comcast Cellular Communications,
Inc., 9.50% Sr. Nts., 5/1/07 50,000 53,250
- ---------------------------------------------------------------
Iridium LLC/Iridium Capital Corp.,
11.25% Sr. Nts., Series C/EN,
7/15/05 50,000 43,250
- ---------------------------------------------------------------
Microcell Telecommunications, Inc.,
0%/14% Sr. Disc. Nts., Series B,
6/1/06(8) 50,000 37,375
- ---------------------------------------------------------------
Nextel Communications, Inc.,
0%/9.75% Sr. Disc. Nts., 8/15/04(8) 50,000 48,750
- ---------------------------------------------------------------
Optel, Inc., 11.50% Sr. Unsec.
Nts., 7/1/08 75,000 73,500
- ---------------------------------------------------------------
Price Communications Cellular
Holdings, Inc., 11.25% Sr. Nts.,
8/15/08(7) 50,000 47,500
- ---------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr.
Sub. Nts., Series B, 5/15/08 50,000 50,375
- ---------------------------------------------------------------
Sprint Spectrum LP/Sprint Spectrum
Finance Corp., 11% Sr. Nts.,
8/15/06 50,000 58,000
- ---------------------------------------------------------------
Western Wireless Corp., 10.50% Sr.
Sub. Nts., 2/1/07 50,000 53,250
- ---------------------------------------------------------------
Winstar Communications, Inc.,
0%/14% Sr. Disc. Nts., 10/15/05(8) 50,000 35,750
------------
501,000
- ---------------------------------------------------------------
METALS/MINERALS - 0.6%
Alcan Aluminum Ltd., 9.625% Debs.,
7/15/19 175,000 187,044
- ---------------------------------------------------------------
Algoma Steel, Inc., 12.375% First
Mtg. Nts., 7/15/05 50,000 38,250
- ---------------------------------------------------------------
Gulf States Steel, Inc. (Alabama),
13.50% First Mtg. Nts., Series B,
4/15/03 50,000 16,000
- ---------------------------------------------------------------
WCI Steel, Inc., 10% Sr. Nts.,
Series B, 12/1/04 25,000 24,938
------------
266,232
- ---------------------------------------------------------------
RETAIL - 1.0%
Federated Department Stores, Inc.,
6.125% Cv. Sub. Nts., 9/1/01(3) 225,000 227,634
- ---------------------------------------------------------------
K Mart Corp., 7.75% Debs., 10/1/12 50,000 51,517
- ---------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub.
Nts., 10/15/07 50,000 52,625
- ---------------------------------------------------------------
Price/Costco Cos., Inc., 7.125% Sr.
Nts., 6/15/05 100,000 107,651
------------
439,427
- ---------------------------------------------------------------
SERVICE - 3.2%
Advance Holding Corp., 0%/12.875%
Sr. Disc. Nts., 4/15/09(8) 100,000 58,500
- ---------------------------------------------------------------
Advance Stores Co., Inc., 10.25%
Sr. Unsec. Sub. Nts., Series B,
4/15/08 50,000 50,750
</TABLE>
38
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
SERVICE (CONTINUED)
Applied Extrusion Technologies,
Inc., 11.50% Sr. Nts., Series B,
4/1/02(1) $ 50,000 $ 52,375
- ---------------------------------------------------------------
Employee Solutions, Inc., 10% Sr.
Unsec. Nts., Series B, 10/15/04(1) 50,000 37,750
- ---------------------------------------------------------------
Fisher Scientific International,
Inc., 9% Sr. Sub. Nts., 2/1/08(5) 50,000 50,250
- ---------------------------------------------------------------
Grove Holdings LLC/Grove Holdings
Capital, Inc., 0%/11.625% Sr.
Unsec. Disc. Debs., 5/1/09(8) 100,000 42,500
- ---------------------------------------------------------------
Jordan Telecommunication Products,
Inc., 9.875% Sr. Nts., Series B,
8/1/07 50,000 49,750
- ---------------------------------------------------------------
KSL Recreation Group, Inc., 10.25%
Sr. Sub. Nts., 5/1/07(1) 50,000 50,000
- ---------------------------------------------------------------
Lamar Advertising Co., 8.625% Sr.
Sub. Nts., 9/15/07 50,000 52,750
- ---------------------------------------------------------------
Maxim Group, Inc. (The), 9.25% Sr.
Sub. Nts., Series B, 10/15/07(1) 50,000 49,750
- ---------------------------------------------------------------
Mrs. Fields Holding Co., Units
(each unit consists of $1,000
principal amount of 0%/14% sr. sec.
disc. nts., 12/1/05 and warrants to
purchase shares of common
stock)(1)(6)(8) 100,000 57,500
- ---------------------------------------------------------------
Ocean Energy, Inc., 8.375% Sr.
Unsec. Sub. Nts., Series B, 7/1/08 75,000 70,125
- ---------------------------------------------------------------
Production Resource Group, LLC/PRG
Finance Corp., 11.50% Sr. Unsec.
Sub. Nts., 1/15/08(1) 50,000 49,250
- ---------------------------------------------------------------
Scotia Pacific Co. LLC, 6.55% Nts.,
1/20/07(5) 225,000 217,617
- ---------------------------------------------------------------
Simonds Industries, Inc., 10.25%
Sr. Sub. Nts., 7/1/08(1) 75,000 76,875
- ---------------------------------------------------------------
Sun Co., Inc., 7.95% Debs.,
12/15/01 75,000 79,153
- ---------------------------------------------------------------
Thermadyne Holdings Corp.,
0%/12.50% Sr. Disc. Debs.,
6/1/08(1)(8) 100,000 48,000
- ---------------------------------------------------------------
Tyco International Group SA, 6.125%
Unsec. Nts., 6/15/01 250,000 252,662
- ---------------------------------------------------------------
USI American Holdings, Inc., 7.25%
Sr. Nts., Series B, 12/1/06 70,000 69,364
------------
1,414,921
- ---------------------------------------------------------------
TRANSPORTATION - 1.5%
Cambridge Industries, Inc., 10.25%
Sr. Sub. Nts., Series B, 7/15/07 50,000 43,250
- ---------------------------------------------------------------
Canadian Airlines Corp., 12.25% Sr.
Nts., 8/1/06 50,000 34,250
- ---------------------------------------------------------------
CSX Corp., 7.05% Debs., 5/1/02 85,000 88,813
- ---------------------------------------------------------------
Federal-Mogul Corp., 7.50% Nts.,
7/1/04 150,000 151,949
- ---------------------------------------------------------------
Golden Ocean Group Ltd., 10% Sr.
Unsec. Nts., 8/31/01 50,000 15,000
- ---------------------------------------------------------------
Norfolk Southern Corp., 7.35% Nts.,
5/15/07 75,000 82,769
- ---------------------------------------------------------------
Oxford Automotive, Inc., 10.125%
Sr. Unsec. Sub. Nts., 6/15/07 50,000 52,000
- ---------------------------------------------------------------
Trans World Airlines, Inc., 11.375%
Unsec. Nts., 3/1/06 50,000 31,750
- ---------------------------------------------------------------
Union Pacific Corp., 7% Nts.,
6/15/00 145,000 147,787
------------
647,568
- ---------------------------------------------------------------
UTILITY - 2.2%
AES Corp., 8.50% Sr. Sub. Nts.,
11/1/07 50,000 50,875
- ---------------------------------------------------------------
Niagara Mohawk Power Corp., 7.125%
Sr. Unsec. Nts., Series C, 7/1/01 225,000 229,621
- ---------------------------------------------------------------
Northern Illinois Gas Co., 6.45%
First Mtg. Bonds, 8/1/01 240,000 243,752
- ---------------------------------------------------------------
Teligent, Inc., 11.50% Sr. Nts.,
12/1/07 50,000 47,000
- ---------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50%
Bonds, 4/1/17 100,000 106,743
</TABLE>
39
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
UTILITY (CONTINUED)
Williams Cos., Inc., 6.20% Nts.,
8/1/02 $ 275,000 $ 275,905
------------
953,896
------------
Total Corporate Bonds and Notes
(Cost $14,804,606) 14,610,379
SHARES
- ---------------------------------------------------------------
PREFERRED STOCKS - 0.3%
- ---------------------------------------------------------------
Case Corp., $4.50 Cum. Cv., Series
A, Non-Vtg. 1,100 63,250
- ---------------------------------------------------------------
PRIMEDIA, Inc., 10% Preferred
Stock, Series D(1) 500 52,250
- ---------------------------------------------------------------
TCR Holding Corp.:
Series B(10) 44 3
Series C(10) 24 1
Series D(10) 64 4
Series E(10) 132 8
------------
Total Preferred Stocks (Cost
$155,341) 115,516
- ---------------------------------------------------------------
COMMON STOCKS - 19.9%
- ---------------------------------------------------------------
AEROSPACE/DEFENSE - 1.1%
General Dynamics Corp. 6,500 381,062
- ---------------------------------------------------------------
Lockheed Martin Corp. 1,000 84,750
------------
465,812
- ---------------------------------------------------------------
CHEMICALS - 0.6%
Dexter Corp. 3,900 122,606
- ---------------------------------------------------------------
Ethyl Corp. 12,200 70,912
- ---------------------------------------------------------------
IMC Global, Inc. 2,834 60,577
------------
254,095
- ---------------------------------------------------------------
CONSUMER NON-DURABLES - 0.6%
Eastman Kodak Co. 3,700 266,400
- ---------------------------------------------------------------
ENERGY - 2.1%
Amoco Corp. 2,600 156,975
- ---------------------------------------------------------------
Atlantic Richfield Co. 2,500 163,125
- ---------------------------------------------------------------
Chevron Corp. 2,500 207,344
- ---------------------------------------------------------------
Exxon Corp. 4,200 307,125
- ---------------------------------------------------------------
Occidental Petroleum Corp. 4,700 79,312
------------
913,881
- ---------------------------------------------------------------
FINANCIAL - 4.5%
American General Corp. 3,000 234,000
- ---------------------------------------------------------------
Bank One Corp. 3,700 188,931
- ---------------------------------------------------------------
BankBoston Corp. 3,600 140,175
- ---------------------------------------------------------------
Camden Property Trust 4,800 124,800
- ---------------------------------------------------------------
Citigroup, Inc. 3,700 183,150
- ---------------------------------------------------------------
Cornerstone Properties, Inc. 8,400 131,250
</TABLE>
40
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
<S> <C> <C>
- ---------------------------------------------------------------
FINANCIAL (CONTINUED)
First Union Corp. 2,900 $ 176,356
- ---------------------------------------------------------------
Healthcare Realty Trust, Inc. 4,684 104,512
- ---------------------------------------------------------------
HRPT Properties Trust 6,400 90,000
- ---------------------------------------------------------------
HSB Group, Inc. 3,750 153,984
- ---------------------------------------------------------------
Jefferson-Pilot Corp. 1,500 112,500
- ---------------------------------------------------------------
Meditrust Corp., Paired Stock 3,724 56,325
- ---------------------------------------------------------------
Tower Realty Trust, Inc. 5,000 100,625
- ---------------------------------------------------------------
Transamerica Corp. 1,600 184,800
------------
1,981,408
- ---------------------------------------------------------------
FOOD & DRUG - 0.2%
Piccadilly Cafeterias, Inc. 7,000 73,500
- ---------------------------------------------------------------
FOOD/TOBACCO - 0.6%
Anheuser-Busch Cos., Inc. 1,400 91,875
- ---------------------------------------------------------------
General Mills, Inc. 2,300 178,825
------------
270,700
- ---------------------------------------------------------------
FOREST PRODUCTS/CONTAINERS - 0.1%
Unisource Worldwide, Inc. 6,800 49,300
- ---------------------------------------------------------------
HEALTHCARE - 0.8%
Bard (C.R.), Inc. 7,300 361,350
- ---------------------------------------------------------------
HOUSING - 0.1%
Fleetwood Enterprises, Inc. 1,000 34,750
- ---------------------------------------------------------------
MANUFACTURING - 0.9%
New England Business Service, Inc. 4,700 183,888
- ---------------------------------------------------------------
PACCAR, Inc. 3,800 156,275
- ---------------------------------------------------------------
ROHN Industries, Inc.(10) 12,000 41,250
------------
381,413
- ---------------------------------------------------------------
MEDIA/ENTERTAINMENT-TELECOMMUNICATIONS
- -1.3%
ALLTELL Corp. 4,000 239,250
- ---------------------------------------------------------------
AT&T Corp. 4,200 316,050
------------
555,300
- ---------------------------------------------------------------
METALS/MINERALS - 0.2%
Carpenter Technology Corp. 3,100 105,206
- ---------------------------------------------------------------
RETAIL - 0.3%
Brown Group, Inc. 6,400 112,400
- ---------------------------------------------------------------
TRANSPORTATION - 0.7%
GATX Corp. 8,200 310,575
- ---------------------------------------------------------------
UTILITY - 5.8%
Bell Atlantic Corp. 5,832 331,331
- ---------------------------------------------------------------
Duke Energy Corp. 5,186 332,228
- ---------------------------------------------------------------
El Paso Energy Corp. 10,000 348,125
- ---------------------------------------------------------------
FPL Group, Inc. 3,500 215,688
</TABLE>
41
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ---------------------------------------------------------------
<S> <C> <C>
UTILITY (CONTINUED)
Houston Industries, Inc. 3,400 $ 109,225
- ---------------------------------------------------------------
Kansas City Power & Light Co. 5,000 148,125
- ---------------------------------------------------------------
MCN Energy Group, Inc. 3,800 72,438
- ---------------------------------------------------------------
Montana Power Co. 3,400 192,313
- ---------------------------------------------------------------
National Fuel Gas Co. 3,700 167,194
- ---------------------------------------------------------------
Questar Corp. 7,000 135,625
- ---------------------------------------------------------------
U S West, Inc. 5,600 361,900
- ---------------------------------------------------------------
Western Resources, Inc. 3,900 129,675
------------
2,543,867
------------
Total Common Stocks (Cost
$7,537,675) 8,679,957
UNITS
- ---------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.0%
- ---------------------------------------------------------------
Microcell Telecommunications, Inc.
Wts., Exp. 6/06(1) 200 3,625
- ---------------------------------------------------------------
Price Communications Corp. Wts.,
Exp. 8/07(1) 258 12,319
------------
Total Rights, Warrants and
Certificates (Cost $2,825) 15,944
PRINCIPAL
AMOUNT
- ---------------------------------------------------------------
REPURCHASE AGREEMENTS - 10.8%
- ---------------------------------------------------------------
Repurchase agreement with
PaineWebber, Inc., 4.85%, dated
12/31/98, to be repurchased at
$4,708,536 on 1/4/99,
collateralized by U.S. Treasury
Nts., 7.75%, 11/30/99, with a value
of $4,808,558 (Cost $4,706,000) $ 4,706,000 4,706,000
- ---------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$41,777,473) 98.9% 43,181,713
- ---------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.1 497,368
----------- ------------
NET ASSETS 100.0% $43,679,081
----------- ------------
----------- ------------
</TABLE>
1. Identifies issues considered to be illiquid or restricted - See Note 5 of
Notes to Financial Statements.
2. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
3. Represents the current interest rate for a variable rate security.
4. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
5. 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 $1,199,857 or 2.75% of the Fund's net
assets as of December 31, 1998.
6. 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.
7. Interest or dividend is paid in kind.
42
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
8. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
9. When-issued security to be delivered and settled after December 31, 1998.
10. Non-income producing security.
See accompanying Notes to Financial Statements.
43
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 54.2%
- ----------------------------------------------------------------
BASIC MATERIALS - 0.6%
- ----------------------------------------------------------------
CHEMICALS - 0.4%
Dexter Corp. 4,700 $ 147,756
- ----------------------------------------------------------------
Ethyl Corp. 14,400 83,700
- ----------------------------------------------------------------
Fuji Photo Film Co. 2,000 74,172
- ----------------------------------------------------------------
IMC Global, Inc. 2,834 60,577
------------
366,205
- ----------------------------------------------------------------
METALS - 0.1%
Carpenter Technology Corp. 3,600 122,175
- ----------------------------------------------------------------
PAPER - 0.1%
Unisource Worldwide, Inc. 7,900 57,275
- ----------------------------------------------------------------
CAPITAL GOODS - 6.0%
- ----------------------------------------------------------------
AEROSPACE/DEFENSE - 1.0%
General Dynamics Corp. 10,000 586,250
- ----------------------------------------------------------------
Kellstrom Industries, Inc.(1) 2,700 77,625
- ----------------------------------------------------------------
Lockheed Martin Corp. 2,100 177,975
------------
841,850
- ----------------------------------------------------------------
ELECTRICAL EQUIPMENT - 0.1%
Toshiba Corp. 15,000 89,139
- ----------------------------------------------------------------
INDUSTRIAL SERVICES - 2.6%
Casella Waste Systems, Inc., Cl.
A(1) 2,700 100,237
- ----------------------------------------------------------------
Hays plc 20,000 170,774
- ----------------------------------------------------------------
International Network Services(1) 3,600 239,400
- ----------------------------------------------------------------
Kendle International, Inc.(1) 3,300 77,137
- ----------------------------------------------------------------
Knoll, Inc.(1) 900 26,662
- ----------------------------------------------------------------
Manhattan Associates, Inc.(1) 2,600 70,850
- ----------------------------------------------------------------
Metamor Worldwide, Inc.(1) 4,250 106,250
- ----------------------------------------------------------------
Metzler Group, Inc.(1) 3,100 150,931
- ----------------------------------------------------------------
NCO Group, Inc.(1) 2,300 103,500
- ----------------------------------------------------------------
New England Business Service, Inc. 5,300 207,362
- ----------------------------------------------------------------
Rental Service Corp.(1) 3,700 58,044
- ----------------------------------------------------------------
SM&A Corp.(1) 1,200 22,800
- ----------------------------------------------------------------
Tetra Tech, Inc.(1) 9,947 269,191
- ----------------------------------------------------------------
Transaction Systems Architects,
Inc., Cl. A(1) 5,800 290,000
- ----------------------------------------------------------------
United Rentals, Inc.(1) 2,500 82,812
- ----------------------------------------------------------------
Viad Corp. 4,700 142,762
- ----------------------------------------------------------------
Whittman-Hart, Inc.(1) 4,400 121,550
------------
2,240,262
</TABLE>
44
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
MANUFACTURING - 2.3%
BBA Group plc 21,000 $ 130,393
- ----------------------------------------------------------------
Brambles Industries Ltd. 5,000 121,835
- ----------------------------------------------------------------
Herman Miller, Inc. 2,100 56,437
- ----------------------------------------------------------------
Ingersoll-Rand Co. 3,600 168,975
- ----------------------------------------------------------------
Mannesmann AG 1,950 225,672
- ----------------------------------------------------------------
Mettler-Toledo International,
Inc.(1) 3,500 98,219
- ----------------------------------------------------------------
PACCAR, Inc. 6,600 271,425
- ----------------------------------------------------------------
ROHN Industries, Inc.(1) 12,000 41,250
- ----------------------------------------------------------------
Smiths Industries plc 11,000 153,564
- ----------------------------------------------------------------
Taiyo Yuden Co. 8,000 94,517
- ----------------------------------------------------------------
Textron, Inc. 4,300 326,531
- ----------------------------------------------------------------
United Technologies Corp. 2,600 282,750
------------
1,971,568
- ----------------------------------------------------------------
CONSUMER CYCLICALS - 5.9%
- ----------------------------------------------------------------
AUTOS & HOUSING - 2.1%
Bridgestone Corp. 5,000 113,245
- ----------------------------------------------------------------
Cie de Saint Gobain 1,000 141,246
- ----------------------------------------------------------------
Federal-Mogul Corp. 4,800 285,600
- ----------------------------------------------------------------
Fleetwood Enterprises, Inc. 2,500 86,875
- ----------------------------------------------------------------
Kaufman & Broad Home Corp. 1,300 37,375
- ----------------------------------------------------------------
Kroll-O'Gara Co. (The)(1) 4,200 165,637
- ----------------------------------------------------------------
Maytag Corp. 4,400 273,900
- ----------------------------------------------------------------
Overseas Union Enterprise Ltd. 35,000 69,578
- ----------------------------------------------------------------
Owens Corning 3,100 109,856
- ----------------------------------------------------------------
Sonic Automotive, Inc.(1) 2,400 82,650
- ----------------------------------------------------------------
Suzuki Motor Corp. 4,000 47,329
- ----------------------------------------------------------------
USG Corp. 2,600 132,437
- ----------------------------------------------------------------
Valeo SA 2,500 197,100
- ----------------------------------------------------------------
Whirlpool Corp. 900 49,837
------------
1,792,665
- ----------------------------------------------------------------
LEISURE & ENTERTAINMENT - 0.5%
CDL Hotels International Ltd. 270,000 69,356
- ----------------------------------------------------------------
Coach USA, Inc.(1) 3,500 121,406
- ----------------------------------------------------------------
Hasbro, Inc. 1,300 46,962
- ----------------------------------------------------------------
Nintendo Co. Ltd. 1,000 96,689
- ----------------------------------------------------------------
Pegasus Systems, Inc.(1) 2,800 100,800
------------
435,213
- ----------------------------------------------------------------
MEDIA - 0.5%
Benpres Holdings Corp.(1) 120,000 19,435
- ----------------------------------------------------------------
Citadel Communications Corp.(1) 2,800 72,450
</TABLE>
45
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
MEDIA (CONTINUED)
VNU-Verenigde Nederlandse
Uitgeverbedrijven Verenigd Bezit 5,000 $ 188,632
- ----------------------------------------------------------------
Wolters Kluwer NV 750 160,577
------------
441,094
- ----------------------------------------------------------------
RETAIL: GENERAL - 0.7%
Circle K Japan Co. Ltd. 1,300 57,051
- ----------------------------------------------------------------
Dayton Hudson Corp. 2,500 135,625
- ----------------------------------------------------------------
Federated Department Stores,
Inc.(1) 1,000 43,562
- ----------------------------------------------------------------
Fruit of the Loom, Inc., Cl. A(1) 1,100 15,194
- ----------------------------------------------------------------
Gucci Group NV 1,200 58,350
- ----------------------------------------------------------------
Ito-Yokado Co. Ltd. 2,000 139,514
- ----------------------------------------------------------------
K Mart Corp.(1) 3,000 45,937
- ----------------------------------------------------------------
Nordstrom, Inc. 1,600 55,500
- ----------------------------------------------------------------
Shaw Industries, Inc. 2,200 53,350
------------
604,083
- ----------------------------------------------------------------
RETAIL: SPECIALTY - 2.1%
Ann Taylor Stores Corp.(1) 3,400 134,087
- ----------------------------------------------------------------
Boots Co. plc 9,000 152,428
- ----------------------------------------------------------------
Brown Group, Inc. 7,900 138,744
- ----------------------------------------------------------------
Children's Place Retail Stores,
Inc.(1) 2,500 62,812
- ----------------------------------------------------------------
Guitar Center, Inc.(1) 4,200 103,425
- ----------------------------------------------------------------
Hennes & Mauritz AB, B Shares 3,000 245,018
- ----------------------------------------------------------------
Insight Enterprises, Inc.(1) 5,875 298,891
- ----------------------------------------------------------------
Kingfisher plc 14,000 140,433
- ----------------------------------------------------------------
Koninklijke Ahold NV 6,000 221,883
- ----------------------------------------------------------------
Payless ShoeSource, Inc.(1) 1,100 52,112
- ----------------------------------------------------------------
Restoration Hardware, Inc.(1) 5,200 139,750
- ----------------------------------------------------------------
School Specialty, Inc.(1) 4,100 87,637
------------
1,777,220
- ----------------------------------------------------------------
CONSUMER STAPLES - 5.7%
- ----------------------------------------------------------------
BEVERAGES - 0.5%
Anheuser-Busch Cos., Inc. 4,900 321,562
- ----------------------------------------------------------------
Scottish & Newcastle plc 12,000 135,591
------------
457,153
- ----------------------------------------------------------------
CONSUMER SERVICES - 0.6%
Alternative Living Services,
Inc.(1) 6,100 208,925
- ----------------------------------------------------------------
Hanover Compressor Co.(1) 3,000 77,062
- ----------------------------------------------------------------
Hertz Corp., Cl. A 1,500 68,437
- ----------------------------------------------------------------
Lamar Advertising Co., Cl. A(1) 4,600 171,350
------------
525,774
</TABLE>
46
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
ENTERTAINMENT - 0.4%
CKE Restaurants, Inc. 5,060 $ 148,954
- ----------------------------------------------------------------
Piccadilly Cafeterias, Inc. 8,000 84,000
- ----------------------------------------------------------------
Shaw Brothers (Hong Kong) Ltd. 280,000 121,079
------------
354,033
- ----------------------------------------------------------------
FOOD - 1.8%
General Mills, Inc. 4,900 380,975
- ----------------------------------------------------------------
Groupe Danone 800 229,144
- ----------------------------------------------------------------
IBP, Inc. 7,200 209,700
- ----------------------------------------------------------------
Jeronimo Martins & Filho SA 2,375 129,930
- ----------------------------------------------------------------
Kerry Group plc, Cl. A 9,000 122,783
- ----------------------------------------------------------------
Koninklijke Numico NV 3,100 147,842
- ----------------------------------------------------------------
Nestle SA 85 184,971
- ----------------------------------------------------------------
Suiza Foods Corp.(1) 2,000 101,875
------------
1,507,220
- ----------------------------------------------------------------
FOOD & DRUG RETAILERS - 1.3%
Albertson's, Inc. 3,100 197,431
- ----------------------------------------------------------------
Colruyt SA 200 167,672
- ----------------------------------------------------------------
Kroger Co.(1) 3,100 187,550
- ----------------------------------------------------------------
Safeway, Inc.(1) 3,300 201,094
- ----------------------------------------------------------------
United Natural Foods, Inc.(1) 4,700 113,387
- ----------------------------------------------------------------
Whole Foods Market, Inc.(1) 2,200 106,425
- ----------------------------------------------------------------
William Morrison Supermarkets plc 33,000 151,558
------------
1,125,117
- ----------------------------------------------------------------
HOUSEHOLD GOODS - 1.1%
Blyth Industries, Inc.(1) 3,600 112,500
- ----------------------------------------------------------------
Dial Corp. (The) 5,500 158,812
- ----------------------------------------------------------------
Fort James Corp. 4,350 174,000
- ----------------------------------------------------------------
L'OREAL 300 216,971
- ----------------------------------------------------------------
Premark International, Inc. 5,500 190,437
- ----------------------------------------------------------------
Reckitt & Colman plc 8,000 105,581
------------
958,301
- ----------------------------------------------------------------
ENERGY - 1.7%
- ----------------------------------------------------------------
OIL-DOMESTIC - 1.5%
Amoco Corp. 3,000 181,125
- ----------------------------------------------------------------
Atlantic Richfield Co. 2,800 182,700
- ----------------------------------------------------------------
Chevron Corp. 2,800 232,225
- ----------------------------------------------------------------
Exxon Corp. 6,200 453,375
- ----------------------------------------------------------------
Occidental Petroleum Corp. 5,400 91,125
- ----------------------------------------------------------------
Total SA, B Shares 1,200 121,590
------------
1,262,140
</TABLE>
47
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
OIL-INTERNATIONAL - 0.2%
Shell Transport & Trading Co. plc 26,000 $ 158,638
- ----------------------------------------------------------------
FINANCIAL - 8.2%
- ----------------------------------------------------------------
BANKS - 2.4%
Banco Popular Espanol SA 1,900 143,481
- ----------------------------------------------------------------
Banco Santander SA 96 1,911
- ----------------------------------------------------------------
Bank One Corp. 8,300 423,819
- ----------------------------------------------------------------
BankBoston Corp. 7,900 307,606
- ----------------------------------------------------------------
Bayerische Hypo-Und Vereinsbank 1,750 138,485
- ----------------------------------------------------------------
Credito Italiano SpA 30,000 178,211
- ----------------------------------------------------------------
First Union Corp. 7,700 468,256
- ----------------------------------------------------------------
Lloyds TSB Group plc 14,000 198,463
- ----------------------------------------------------------------
Nordbanken Holding AB 25,000 160,384
------------
2,020,616
- ----------------------------------------------------------------
DIVERSIFIED FINANCIAL - 1.6%
Cattles plc 15,000 157,303
- ----------------------------------------------------------------
Citigroup, Inc. 8,800 435,600
- ----------------------------------------------------------------
Fannie Mae 2,600 192,400
- ----------------------------------------------------------------
HealthCare Financial Partners,
Inc.(1) 3,900 142,350
- ----------------------------------------------------------------
ING Groep NV 2,500 152,531
- ----------------------------------------------------------------
Lend Lease Corp. Ltd. 7,000 94,403
- ----------------------------------------------------------------
Northern Rock plc 16,000 152,271
- ----------------------------------------------------------------
Perlis Plantations Berhad(2) 17,500 14,368
- ----------------------------------------------------------------
Promise Co. Ltd. 1,400 72,689
------------
1,413,915
- ----------------------------------------------------------------
INSURANCE - 3.2%
AEGON NV 1,600 196,604
- ----------------------------------------------------------------
Allstate Corp. 1,900 73,387
- ----------------------------------------------------------------
American General Corp. 5,100 397,800
- ----------------------------------------------------------------
American International Group, Inc. 2,200 212,575
- ----------------------------------------------------------------
Assicurazioni Generali SpA 4,000 167,385
- ----------------------------------------------------------------
AXA SA 1,300 188,507
- ----------------------------------------------------------------
Cigna Corp. 2,700 208,744
- ----------------------------------------------------------------
Conseco, Inc. 3,800 116,138
- ----------------------------------------------------------------
Equitable Cos., Inc. 300 17,363
- ----------------------------------------------------------------
Hartford Financial Services Group,
Inc. 1,600 87,800
- ----------------------------------------------------------------
HSB Group, Inc. 3,750 153,984
- ----------------------------------------------------------------
Irish Life plc 15,000 141,346
- ----------------------------------------------------------------
Jefferson-Pilot Corp. 3,400 255,000
- ----------------------------------------------------------------
Pre-Paid Legal Services, Inc.(1) 5,800 191,400
- ----------------------------------------------------------------
Transamerica Corp. 2,700 311,850
</TABLE>
48
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
INSURANCE (CONTINUED)
Travelers Property Casualty Corp.,
Cl. A 2,100 $ 65,100
------------
2,784,983
- ----------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS -
0.8%
Camden Property Trust 5,400 140,400
- ----------------------------------------------------------------
Cornerstone Properties, Inc. 9,500 148,438
- ----------------------------------------------------------------
Healthcare Realty Trust, Inc. 5,366 119,729
- ----------------------------------------------------------------
HRPT Properties Trust 7,300 102,656
- ----------------------------------------------------------------
Meditrust Corp., Paired Stock 4,325 65,416
- ----------------------------------------------------------------
Tower Realty Trust, Inc. 5,700 114,713
------------
691,352
- ----------------------------------------------------------------
SAVINGS & LOANS - 0.2%
Golden West Financial Corp. 1,900 174,206
- ----------------------------------------------------------------
HEALTHCARE - 4.9%
- ----------------------------------------------------------------
HEALTHCARE/DRUGS - 2.6%
Amgen, Inc.(1) 2,700 282,319
- ----------------------------------------------------------------
Fresenius AG, Preference 800 168,115
- ----------------------------------------------------------------
Gedeon Richter Ltd., GDR(3) 2,200 94,050
- ----------------------------------------------------------------
Genzyme Corp. (General Division)(1) 6,900 343,275
- ----------------------------------------------------------------
Idexx Laboratories, Inc.(1) 2,600 69,956
- ----------------------------------------------------------------
Jones Pharma, Inc. 3,100 113,150
- ----------------------------------------------------------------
Medicis Pharmaceutical Corp., Cl.
A(1) 3,500 208,688
- ----------------------------------------------------------------
Novartis AG 100 196,507
- ----------------------------------------------------------------
Novo-Nordisk AS, B Shares 1,300 171,581
- ----------------------------------------------------------------
Sanofi SA 1,200 197,637
- ----------------------------------------------------------------
Schering AG 1,000 125,786
- ----------------------------------------------------------------
Takeda Chemical Industries Ltd. 3,000 115,232
- ----------------------------------------------------------------
Zeneca Group plc 4,000 173,560
------------
2,259,856
- ----------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
2.3%
Bard (C.R.), Inc. 11,800 584,100
- ----------------------------------------------------------------
Luxottica Group SpA, Sponsored ADR 10,000 120,000
- ----------------------------------------------------------------
Olympus Optical Co. Ltd. 9,000 103,232
- ----------------------------------------------------------------
Orthodontic Centers of America,
Inc.(1) 5,500 106,906
- ----------------------------------------------------------------
Pediatrix Medical Group, Inc.(1) 3,500 209,781
- ----------------------------------------------------------------
Pliva d.d., Sponsored GDR(3) 5,100 84,660
- ----------------------------------------------------------------
Province Healthcare Co.(1) 3,900 139,913
- ----------------------------------------------------------------
Renal Care Group, Inc.(1) 5,500 158,469
- ----------------------------------------------------------------
SmithKline Beecham plc 15,000 208,908
- ----------------------------------------------------------------
Tenet Healthcare Corp.(1) 2,890 75,863
- ----------------------------------------------------------------
Terumo Corp. 2,000 46,976
</TABLE>
49
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
HEALTHCARE/SUPPLIES & SERVICES
(CONTINUED)
Total Renal Care Holdings, Inc.(1) 1,700 $ 50,256
- ----------------------------------------------------------------
WellPoint Health Networks, Inc.(1) 700 60,900
------------
1,949,964
- ----------------------------------------------------------------
TECHNOLOGY - 11.2%
- ----------------------------------------------------------------
COMPUTER HARDWARE - 2.8%
3Com Corp.(1) 4,900 219,581
- ----------------------------------------------------------------
Apex PC Solutions, Inc.(1) 3,500 101,063
- ----------------------------------------------------------------
Apple Computer, Inc.(1) 4,200 171,938
- ----------------------------------------------------------------
Compaq Computer Corp. 8,800 369,050
- ----------------------------------------------------------------
Electronics for Imaging, Inc.(1) 2,700 108,506
- ----------------------------------------------------------------
International Business Machines
Corp. 3,300 609,675
- ----------------------------------------------------------------
Lexmark International Group, Inc.,
Cl. A(1) 2,200 221,100
- ----------------------------------------------------------------
Network Appliance, Inc.(1) 7,400 333,000
- ----------------------------------------------------------------
Seagate Technology, Inc.(1) 4,200 127,050
- ----------------------------------------------------------------
Storage Technology Corp. (New)(1) 2,600 92,463
- ----------------------------------------------------------------
VideoServer, Inc.(1) 4,600 84,525
------------
2,437,951
- ----------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 5.2%
Abacus Direct Corp.(1) 2,600 118,300
- ----------------------------------------------------------------
Applied Micro Circuits Corp.(1) 4,000 135,875
- ----------------------------------------------------------------
Aware, Inc.(1) 5,100 138,656
- ----------------------------------------------------------------
Best Software, Inc.(1) 4,400 104,500
- ----------------------------------------------------------------
BindView Development Corp.(1) 4,800 132,000
- ----------------------------------------------------------------
BroadVision, Inc.(1) 3,500 112,000
- ----------------------------------------------------------------
Concord Communications, Inc.(1) 2,100 119,175
- ----------------------------------------------------------------
Dendrite International, Inc.(1) 6,600 164,794
- ----------------------------------------------------------------
Diamond Technology Partners,
Inc.(1) 6,900 131,963
- ----------------------------------------------------------------
Documentum, Inc.(1) 3,000 160,313
- ----------------------------------------------------------------
DSET Corp.(1) 9,000 93,375
- ----------------------------------------------------------------
First Data Corp. 2,600 82,388
- ----------------------------------------------------------------
Great Plains Software, Inc.(1) 2,700 130,275
- ----------------------------------------------------------------
IDX Systems Corp.(1) 2,500 110,000
- ----------------------------------------------------------------
Legato Systems, Inc.(1) 3,500 230,781
- ----------------------------------------------------------------
Macromedia, Inc.(1) 4,700 158,331
- ----------------------------------------------------------------
Medical Manager Corp.(1) 2,900 90,988
- ----------------------------------------------------------------
MedQuist, Inc.(1) 1,900 75,050
- ----------------------------------------------------------------
Mercury Interactive Corp.(1) 3,300 208,725
- ----------------------------------------------------------------
Micromuse, Inc.(1) 5,600 109,200
- ----------------------------------------------------------------
MicroStrategy, Inc.(1) 4,000 126,000
</TABLE>
50
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE/SERVICES
(CONTINUED)
Network Associates, Inc.(1) 4,400 $ 291,500
- ----------------------------------------------------------------
New Era of Networks, Inc.(1) 4,500 198,000
- ----------------------------------------------------------------
QuadraMed Corp.(1) 5,200 106,600
- ----------------------------------------------------------------
Rational Software Corp.(1) 3,900 103,350
- ----------------------------------------------------------------
SAP AG, Preference 200 96,006
- ----------------------------------------------------------------
Sapient Corp.(1) 2,900 162,400
- ----------------------------------------------------------------
Software AG Systems, Inc.(1) 4,300 77,938
- ----------------------------------------------------------------
SPR, Inc.(1) 2,800 48,300
- ----------------------------------------------------------------
SS&C Technologies, Inc.(1) 5,200 64,350
- ----------------------------------------------------------------
Tier Technologies, Inc., Cl. B(1) 5,100 87,975
- ----------------------------------------------------------------
TSI International Software Ltd.(1) 2,900 138,838
- ----------------------------------------------------------------
Veritas Software Corp.(1) 2,937 176,036
- ----------------------------------------------------------------
Visio Corp.(1) 2,400 87,750
- ----------------------------------------------------------------
Wind River Systems, Inc.(1) 2,750 129,250
------------
4,500,982
- ----------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 0.3%
Excel Switching Corp.(1) 4,300 163,400
- ----------------------------------------------------------------
Tekelec(1) 6,000 99,375
------------
262,775
- ----------------------------------------------------------------
ELECTRONICS - 2.0%
Bowthorpe plc 18,000 103,559
- ----------------------------------------------------------------
Electrocomponents plc 20,000 133,635
- ----------------------------------------------------------------
Getronics NV 4,000 198,224
- ----------------------------------------------------------------
Hoshiden Corp. 9,000 156,715
- ----------------------------------------------------------------
RF Micro Devices, Inc.(1) 3,600 166,950
- ----------------------------------------------------------------
Sony Corp. 1,400 101,740
- ----------------------------------------------------------------
TDK Corp. 1,000 91,214
- ----------------------------------------------------------------
Uniphase Corp.(1) 3,000 208,125
- ----------------------------------------------------------------
Vitesse Semiconductor Corp.(1) 5,200 237,250
- ----------------------------------------------------------------
VTech Holdings Ltd. 53,000 231,237
- ----------------------------------------------------------------
Waters Corp.(1) 1,100 95,975
------------
1,724,624
- ----------------------------------------------------------------
PHOTOGRAPHY - 0.9%
Eastman Kodak Co. 5,700 410,400
- ----------------------------------------------------------------
Xerox Corp. 2,800 330,400
------------
740,800
- ----------------------------------------------------------------
TELECOMMUNICATIONS - 5.2%
- ----------------------------------------------------------------
TELEPHONE UTILITIES - 2.6%
Bell Atlantic Corp. 10,646 604,826
- ----------------------------------------------------------------
Cable & Wireless Communications
plc(1) 16,000 145,771
</TABLE>
51
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
TELEPHONE UTILITIES (CONTINUED)
Century Telephone Enterprises, Inc. 1,200 $ 81,000
- ----------------------------------------------------------------
Tele Danmark AS, B Shares 2,000 269,941
- ----------------------------------------------------------------
Telecom Italia Mobile SpA 27,500 203,470
- ----------------------------------------------------------------
Telefonica de Espana 4,500 200,400
- ----------------------------------------------------------------
U S West, Inc. 10,600 685,025
------------
2,190,433
- ----------------------------------------------------------------
TELECOMMUNICATIONS/TECHNOLOGY -
2.6%
ALLTELL Corp. 7,100 424,669
- ----------------------------------------------------------------
AT&T Corp. 10,000 752,500
- ----------------------------------------------------------------
Ericsson LM, B Shares 6,000 142,865
- ----------------------------------------------------------------
Matsushita Communication Industrial
Co. 2,000 94,128
- ----------------------------------------------------------------
Nippon Telegraph & Telephone Corp. 12 92,397
- ----------------------------------------------------------------
Nokia Oyj, A Shares 1,200 146,940
- ----------------------------------------------------------------
NTT Mobile Communications Network,
Inc. 3 123,179
- ----------------------------------------------------------------
Telecom Italia SpA 23,000 196,677
- ----------------------------------------------------------------
Vodafone Group plc 14,000 226,085
------------
2,199,440
- ----------------------------------------------------------------
TRANSPORTATION - 1.0%
- ----------------------------------------------------------------
AIR TRANSPORTATION - 0.5%
AHL Services, Inc.(1) 4,000 125,000
- ----------------------------------------------------------------
AMR Corp.(1) 1,100 65,313
- ----------------------------------------------------------------
BAA plc 14,000 162,020
- ----------------------------------------------------------------
Delta Air Lines, Inc. 1,000 52,000
------------
404,333
- ----------------------------------------------------------------
RAILROADS & TRUCKERS - 0.5%
GATX Corp. 8,600 325,725
- ----------------------------------------------------------------
MotivePower Industries, Inc.(1) 3,000 96,563
------------
422,288
- ----------------------------------------------------------------
UTILITIES - 3.8%
- ----------------------------------------------------------------
ELECTRIC UTILITIES - 2.6%
CalEnergy, Inc.(1) 2,100 72,844
- ----------------------------------------------------------------
Duke Energy Corp. 5,117 327,808
- ----------------------------------------------------------------
Endesa SA 6,000 159,219
- ----------------------------------------------------------------
FPL Group, Inc. 6,000 369,750
- ----------------------------------------------------------------
Houston Industries, Inc. 8,000 257,000
- ----------------------------------------------------------------
Kansas City Power & Light Co. 5,600 165,900
- ----------------------------------------------------------------
Montana Power Co. 7,500 424,219
- ----------------------------------------------------------------
United Utilities plc 11,000 152,379
- ----------------------------------------------------------------
Vivendi (Ex-Generale des Eaux) 600 155,746
</TABLE>
52
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
ELECTRIC UTILITIES (CONTINUED)
Western Resources, Inc. 4,400 $ 146,300
------------
2,231,165
- ----------------------------------------------------------------
GAS UTILITIES - 1.2%
Columbia Energy Group 2,950 170,363
- ----------------------------------------------------------------
El Paso Energy Corp. 10,100 351,606
- ----------------------------------------------------------------
MCN Energy Group, Inc. 4,300 81,969
- ----------------------------------------------------------------
National Fuel Gas Co. 4,400 198,825
- ----------------------------------------------------------------
Questar Corp. 8,200 158,875
- ----------------------------------------------------------------
RWE AG, Preference 2,500 90,812
------------
1,052,450
------------
Total Common Stocks (Cost
$36,277,133) 46,549,258
- ----------------------------------------------------------------
PREFERRED STOCKS - 0.2%
- ----------------------------------------------------------------
Case Corp., $4.50 Cum. Cv., Series
A, Non-Vtg. 1,100 63,250
- ----------------------------------------------------------------
PRIMEDIA, Inc., 10% Preferred
Stock, Series D(2) 1,000 104,500
- ----------------------------------------------------------------
TCR Holding Corp.:
Series B(1) 88 5
Series C(1) 48 3
Series D(1) 127 7
Series E(1) 263 16
------------
Total Preferred Stocks (Cost
$205,356) 167,781
UNITS
- ----------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES -
0.0%
- ----------------------------------------------------------------
Microcell Telecommunications, Inc.
Wts., Exp. 6/06(2) 500 9,062
- ----------------------------------------------------------------
Price Communications Corp. Wts.,
Exp. 8/07(2) 516 24,639
- ----------------------------------------------------------------
Telefonica de Espana Rts., Exp.
1/99 4,500 4,002
------------
Total Rights, Warrants and
Certificates (Cost $7,062) 37,703
PRINCIPAL
AMOUNT
- ----------------------------------------------------------------
ASSET-BACKED SECURITIES - 0.7%
- ----------------------------------------------------------------
Arcadia Automobile Receivables
Trust, Automobile
Receivables-Backed Nts., Series
1998-B, Cl. A3, 5.95%, 11/15/02 $ 175,000 175,821
- ----------------------------------------------------------------
Dayton Hudson Credit Card Master
Trust, Asset-Backed Certificates,
Series 1997-1,
Cl. A, 6.25%, 8/25/05 125,000 127,695
- ----------------------------------------------------------------
IROQUOIS Trust, Asset-Backed
Amortizing Nts., Series 1997-2, Cl.
A, 6.752%, 6/25/07(2) 175,000 175,820
- ----------------------------------------------------------------
Olympic Automobile Receivables
Trust, Automobile
Receivables-Backed Nts.,
Series 1997-A, Cl. A-5, 6.80%,
2/15/05 150,000 152,250
------------
Total Asset-Backed Securities (Cost
$624,514) 631,586
</TABLE>
53
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
<S> <C> <C>
- ----------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS - 2.6%
- ----------------------------------------------------------------
Countrywide Funding Corp., Mtg.
Pass-Through Certificates, Series
1994-10, Cl. A3, 6%, 5/25/09 $ 350,000 $ 347,700
- ----------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation
Certificates, Series 1711, Cl. EA,
7%, 3/15/24 200,000 204,562
- ----------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Gtd. Multiclass Mtg. Participation
Certificates:
6%, 3/1/09 157,298 158,308
Series 1843, Cl. VB, 7%, 4/15/03 50,000 51,062
Series 1849, Cl. VA, 6%, 12/15/10 110,791 111,761
- ----------------------------------------------------------------
Federal Home Loan Mortgage Corp.:
Interest-Only Stripped Mtg.-Backed
Security, Series 1542, Cl. QC,
7.50%, 10/15/20(4) 900,000 118,125
Series 1583, Cl. IC, 7.03%-30.30%,
1/15/20(4) 867,613 85,135
Series 1661, Cl. PK, 6.61%-7.47%,
11/15/06(4) 745,601 47,998
- ----------------------------------------------------------------
Federal National Mortgage Assn.:
6%, 12/1/03 126,745 127,146
6.50%, 4/1/26 162,143 163,305
7%, 4/1/00 77,854 77,780
- ----------------------------------------------------------------
Federal National Mortgage Assn.,
Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates,
Trust 1993-190, Cl. Z, 5.85%,
7/25/08 142,928 142,660
- ----------------------------------------------------------------
GE Capital Mortgage Services, Inc.,
Gtd. Real Estate Mtg. Investment
Conduit
Pass-Through Certificates, Series
1994-7, Cl. A18, 6%, 2/25/09 248,607 237,497
- ----------------------------------------------------------------
IMC Home Equity Trust, Asset-Backed
Home Equity Securities, Series
1998-3, Cl. A5, 6.36%, 8/20/22(5) 350,000 350,219
------------
Total Mortgage-Backed Obligations
(Cost $2,219,223) 2,223,258
- ----------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 9.9%
- ----------------------------------------------------------------
Federal Farm Credit Bank,
Medium-Term Nts., 5.24%, 10/1/08 175,000 174,189
- ----------------------------------------------------------------
Federal Home Loan Bank, 5.57%,
8/17/00 350,000 353,118
- ----------------------------------------------------------------
U.S. Treasury Bonds:
6%, 2/15/26 575,000 627,649
7.50%, 11/15/16 1,310,000 1,629,312
- ----------------------------------------------------------------
STRIPS, 5.618%, 11/15/18(6) 750,000 249,925
- ----------------------------------------------------------------
U.S. Treasury Nts.:
5.625%, 2/15/06 500,000 527,500
5.75%, 8/15/03 1,100,000 1,148,469
6.125%, 8/15/07 350,000 382,594
6.50%, 8/15/05 945,000 1,038,615
6.75%, 6/30/99 445,000 449,867
7.50%, 11/15/01 1,775,000 1,908,125
------------
Total U.S. Government Obligations
(Cost $8,123,278) 8,489,363
</TABLE>
54
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
<S> <C> <C>
- ----------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND
NOTES - 21.8%
- ----------------------------------------------------------------
BASIC MATERIALS - 1.2%
- ----------------------------------------------------------------
CHEMICALS - 0.6% Laroche Industries, Inc., 9.50% Sr.
Sub. Nts., Series B, 9/15/07 $ 125,000 $ 100,625
- ----------------------------------------------------------------
Morton International, Inc., 9.25%
Credit Sensitive Nts., 6/1/20 50,000 68,058
- ----------------------------------------------------------------
PPG Industries, Inc., 9% Debs.,
5/1/21 50,000 63,959
- ----------------------------------------------------------------
Rexene Corp. (New), 11.75% Sr.
Nts., 12/1/04(2) 125,000 134,375
- ----------------------------------------------------------------
Sterling Chemicals Holdings, Inc.,
0%/13.50% Sr. Disc. Nts.,
8/15/08(7) 125,000 52,500
- ----------------------------------------------------------------
Texas Petrochemicals Corp., 11.125%
Sr. Sub. Nts., Series B, 7/1/06 125,000 123,750
------------
543,267
- ----------------------------------------------------------------
METALS - 0.3%
Alcan Aluminum Ltd., 9.625% Debs.,
7/15/19 100,000 106,882
- ----------------------------------------------------------------
Algoma Steel, Inc., 12.375% First
Mtg. Nts., 7/15/05 100,000 76,500
- ----------------------------------------------------------------
Gulf States Steel, Inc. (Alabama),
13.50% First Mtg. Nts., Series B,
4/15/03 125,000 40,000
- ----------------------------------------------------------------
WCI Steel, Inc., 10% Sr. Nts.,
Series B, 12/1/04 75,000 74,812
------------
298,194
- ----------------------------------------------------------------
PAPER - 0.3%
Malette, Inc., 12.25% Sr. Sec.
Nts., 7/15/04(2) 125,000 135,625
- ----------------------------------------------------------------
Stone Container Corp., 9.875% Sr.
Nts., 2/1/01 125,000 127,187
------------
262,812
- ----------------------------------------------------------------
CAPITAL GOODS - 3.0%
- ----------------------------------------------------------------
INDUSTRIAL SERVICES - 2.0%
Advance Holding Corp., 0%/12.875%
Sr. Disc. Nts., 4/15/09(7) 100,000 58,500
- ----------------------------------------------------------------
Advance Stores Co., Inc., 10.25%
Sr. Unsec. Sub. Nts., Series B,
4/15/08 125,000 126,875
- ----------------------------------------------------------------
Applied Extrusion Technologies,
Inc., 11.50% Sr. Nts., Series B,
4/1/02(2) 75,000 78,562
- ----------------------------------------------------------------
Armco, Inc., 9% Sr. Unsec. Nts.,
9/15/07 50,000 50,500
- ----------------------------------------------------------------
Employee Solutions, Inc., 10% Sr.
Unsec. Nts., Series B, 10/15/04(2) 125,000 94,375
- ----------------------------------------------------------------
Fisher Scientific International,
Inc., 9% Sr. Sub. Nts., 2/1/08(3) 100,000 100,500
- ----------------------------------------------------------------
Jordan Telecommunication Products,
Inc., 9.875% Sr. Nts., Series B,
8/1/07 50,000 49,750
- ----------------------------------------------------------------
KSL Recreation Group, Inc., 10.25%
Sr. Sub. Nts., 5/1/07(2) 100,000 100,000
- ----------------------------------------------------------------
Maxim Group, Inc. (The), 9.25% Sr.
Sub. Nts., Series B, 10/15/07(2) 50,000 49,750
- ----------------------------------------------------------------
Mrs. Fields Holding Co., Units
(each unit consists of $1,000
principal amount of 0%/14% sr. sec.
disc. nts., 12/1/05 and warrants to
purchase shares of common
stock)(2)(7)(8) 150,000 86,250
- ----------------------------------------------------------------
Ocean Energy, Inc., 8.375% Sr.
Unsec. Sub. Nts., Series B, 7/1/08 125,000 116,875
- ----------------------------------------------------------------
Production Resource Group, LLC/PRG
Finance Corp., 11.50% Sr. Unsec.
Sub. Nts., 1/15/08(2) 75,000 73,875
- ----------------------------------------------------------------
Scotia Pacific Co. LLC, 6.55% Nts.,
1/20/07(3) 200,000 193,437
- ----------------------------------------------------------------
Simonds Industries, Inc., 10.25%
Sr. Sub. Nts., 7/1/08(2) 125,000 128,125
- ----------------------------------------------------------------
Sun Co., Inc., 7.95% Debs.,
12/15/01 125,000 131,921
- ----------------------------------------------------------------
Thermadyne Holdings Corp.,
0%/12.50% Sr. Disc. Debs.,
6/1/08(2)(7) 50,000 24,000
</TABLE>
55
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL SERVICES (CONTINUED)
Tyco International Group SA, 6.125%
Unsec. Nts., 6/15/01 $ 175,000 $ 176,864
- ----------------------------------------------------------------
USI American Holdings, Inc., 7.25%
Sr. Nts., Series B, 12/1/06 120,000 118,909
------------
1,759,068
- ----------------------------------------------------------------
MANUFACTURING - 1.0%
Federal-Mogul Corp., 7.50% Nts.,
7/1/04 125,000 126,624
- ----------------------------------------------------------------
Jordan Industries, Inc., 10.375%
Sr. Nts., Series B, 8/1/07(2) 125,000 128,125
- ----------------------------------------------------------------
Portola Packaging, Inc., 10.75% Sr.
Nts., 10/1/05(2) 125,000 128,125
- ----------------------------------------------------------------
Titan Wheel International, Inc.,
8.75% Sr. Sub. Nts., 4/1/07 100,000 98,500
- ----------------------------------------------------------------
U.S. Filter Corp., 6.375% Bonds,
5/15/01 175,000 173,839
- ----------------------------------------------------------------
U.S. Industries, Inc., 7.125% Sr.
Nts., 10/15/03(3) 225,000 225,275
------------
880,488
- ----------------------------------------------------------------
CONSUMER CYCLICALS - 6.5%
- ----------------------------------------------------------------
AUTOS & HOUSING - 0.7% Ainsworth Lumber, Inc., 12.50% Sr.
Nts., 7/15/07(9) 125,000 125,000
- ----------------------------------------------------------------
American Standard Cos., Inc.,
10.875% Sr. Nts., 5/15/99 100,000 100,500
- ----------------------------------------------------------------
Black & Decker Corp., 6.625% Nts.,
11/15/00 85,000 86,453
- ----------------------------------------------------------------
Cambridge Industries, Inc., 10.25%
Sr. Sub. Nts., Series B, 7/15/07 125,000 108,125
- ----------------------------------------------------------------
Oxford Automotive, Inc., 10.125%
Sr. Unsec. Sub. Nts., 6/15/07 125,000 130,000
------------
550,078
- ----------------------------------------------------------------
LEISURE & ENTERTAINMENT - 2.6%
American Skiing Corp., 12% Sr. Sub.
Nts., Series B, 7/15/06(2) 100,000 104,500
- ----------------------------------------------------------------
Ameristar Casinos, Inc., 10.50% Sr.
Sub. Nts., Series B, 8/1/04 50,000 45,750
- ----------------------------------------------------------------
Bally Total Fitness Holding Corp.,
9.875% Sr. Sub. Nts., Series B,
10/15/07 125,000 123,125
- ----------------------------------------------------------------
Casino America, Inc., 12.50% Sr.
Nts., 8/1/03 125,000 139,062
- ----------------------------------------------------------------
Casino Magic of Louisiana Corp.,
13% First Mtg. Nts., Series B,
8/15/03 200,000 227,000
- ----------------------------------------------------------------
Colorado Gaming & Entertainment
Co., 12% Sr. Sec. Nts., 6/1/03(2) 125,000 134,375
- ----------------------------------------------------------------
Harveys Casino Resorts, 10.625% Sr.
Unsec. Sub. Nts., 6/1/06 100,000 108,500
- ----------------------------------------------------------------
Hilton Hotels Corp., 7.375% Nts.,
6/1/02 175,000 176,451
- ----------------------------------------------------------------
HMH Properties, Inc., 7.875% Sr.
Nts., Series A, 8/1/05 125,000 122,500
- ----------------------------------------------------------------
Hollywood Casino Corp., 12.75% Gtd.
Sr. Sec. Nts., 11/1/03 125,000 133,125
- ----------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr.
Sub. Nts., 6/15/07 50,000 51,875
- ----------------------------------------------------------------
Intrawest Corp., 9.75% Sr. Unsec.
Nts., 8/15/08(3) 100,000 103,000
- ----------------------------------------------------------------
Mohegan Tribal Gaming Authority
(Connecticut), 13.50% Sr. Sec.
Nts., Series B, 11/15/02 125,000 150,625
- ----------------------------------------------------------------
Players International, Inc.,
10.875% Sr. Nts., 4/15/05 125,000 134,687
- ----------------------------------------------------------------
Prime Hospitality Corp., 9.75% Sr.
Sub. Nts., 4/1/07 125,000 128,125
- ----------------------------------------------------------------
Rio Hotel & Casino, Inc., 10.625%
Sr. Sub. Nts., 7/15/05 125,000 136,875
- ----------------------------------------------------------------
Santa Fe Hotel, Inc., 11% Gtd.
First Mtg. Nts., 12/15/00 100,000 92,000
- ----------------------------------------------------------------
Station Casinos, Inc., 9.75% Sr.
Sub. Nts., 4/15/07 125,000 131,250
------------
2,242,825
</TABLE>
56
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
MEDIA - 2.4%
Adelphia Communications Corp.,
10.50% Sr. Unsec. Nts., Series B,
7/15/04 $ 125,000 $ 140,625
- ----------------------------------------------------------------
Allbritton Communications Co.,
8.875% Sr. Sub. Nts., Series B,
2/1/08 125,000 126,875
- ----------------------------------------------------------------
Big Flower Press Holdings, Inc.,
8.625% Sr. Sub. Nts., 12/1/08(3) 125,000 126,875
- ----------------------------------------------------------------
Century Communications Corp., 9.75%
Sr. Nts., 2/15/02 100,000 108,500
- ----------------------------------------------------------------
Century Communications Corp., Zero
Coupon Sr. Disc. Nts., Series B,
8.497%, 1/15/08(6) 50,000 25,250
- ----------------------------------------------------------------
Comcast Corp., 9.125% Sr. Sub.
Debs., 10/15/06 125,000 133,750
- ----------------------------------------------------------------
CSC Holdings, Inc., 9.875% Sr. Sub.
Nts., 5/15/06 50,000 54,750
- ----------------------------------------------------------------
Diva Systems Corp., Units (each
unit consists of $1,000 principal
amount of 0%/12.625% sr. disc.
nts., 3/1/08 and three warrants to
purchase three shares of common
stock)(3)(7)(8) 200,000 83,000
- ----------------------------------------------------------------
EchoStar Satellite Broadcasting
Corp., 0%/13.125% Sr. Sec. Disc.
Nts., 3/15/04(7) 100,000 100,250
- ----------------------------------------------------------------
Falcon Holding Group LP, 0%/9.285%
Sr. Disc. Debs., Series B,
4/15/10(7) 175,000 120,750
- ----------------------------------------------------------------
Fox/Liberty Networks LLC, 8.875%
Sr. Nts., 8/15/07 50,000 51,250
- ----------------------------------------------------------------
Hollinger International Publishing,
Inc., 9.25% Gtd. Sr. Sub. Nts.,
3/15/07 125,000 132,500
- ----------------------------------------------------------------
Interepublic National Radio Sales
Corp., 10% Sr. Unsec. Sub. Nts.,
7/1/08(2) 125,000 129,375
- ----------------------------------------------------------------
James Cable Partners LP, 10.75% Sr.
Nts., Series B, 8/15/04 100,000 104,500
- ----------------------------------------------------------------
Marcus Cable Operating Co.
LP/Marcus Cable Capital Corp.,
0%/13.50% Gtd. Sr. Sub. Disc. Nts.,
Series II, 8/1/04(7) 125,000 126,562
- ----------------------------------------------------------------
MDC Communications Corp., 10.50%
Sr. Sub. Nts., 12/1/06 125,000 128,125
- ----------------------------------------------------------------
Sinclair Broadcast Group, Inc., 10%
Sr. Sub. Nts., 9/30/05 125,000 133,125
- ----------------------------------------------------------------
Spanish Broadcasting Systems, Inc.,
11% Sr. Nts., 3/15/04 100,000 106,500
- ----------------------------------------------------------------
TCI Satellite Entertainment, Inc.,
10.875% Sr. Sub. Nts., 2/15/07 125,000 41,875
- ----------------------------------------------------------------
United International Holdings,
Inc., 0%/10.75% Sr. Disc. Nts.,
Series B, 2/15/08(7) 100,000 54,500
------------
2,028,937
- ----------------------------------------------------------------
RETAIL: GENERAL - 0.5%
Federated Department Stores, Inc.,
6.125% Cv. Sub. Nts., 9/1/01(5) 200,000 202,341
- ----------------------------------------------------------------
Price/Costco Cos., Inc., 7.125% Sr.
Nts., 6/15/05 90,000 96,886
- ----------------------------------------------------------------
William Carter Co., 10.375% Sr.
Sub. Nts., Series A, 12/1/06 125,000 132,500
------------
431,727
- ----------------------------------------------------------------
RETAIL: SPECIALTY - 0.3%
K Mart Corp., 7.75% Debs., 10/1/12 125,000 128,793
- ----------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub.
Nts., 10/15/07 150,000 157,875
------------
286,668
- ----------------------------------------------------------------
CONSUMER STAPLES - 1.1%
- ----------------------------------------------------------------
CONSUMER SERVICES - 0.1% Lamar Advertising Co., 8.625% Sr.
Sub. Nts., 9/15/07 100,000 105,500
- ----------------------------------------------------------------
ENTERTAINMENT - 0.2%
Tricon Global Restaurants, Inc.,
7.45% Sr. Unsec. Nts., 5/15/05 125,000 129,000
- ----------------------------------------------------------------
FOOD - 0.5%
AmeriServe Food Distribution, Inc.,
8.875% Sr. Nts., 10/15/06 125,000 116,250
</TABLE>
57
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
FOOD (CONTINUED)
Dole Food Distributing, Inc., 6.75%
Nts., 7/15/00 $ 115,000 $ 116,119
- ----------------------------------------------------------------
Grand Metro Inventory Corp., 7.125%
Nts., 9/15/04 175,000 188,077
------------
420,446
- ----------------------------------------------------------------
FOOD & DRUG RETAILERS - 0.1%
Jitney-Jungle Stores of America,
Inc., 10.375% Sr. Sub. Nts.,
9/15/07 50,000 51,500
- ----------------------------------------------------------------
HOUSEHOLD GOODS - 0.2%
Kimberly-Clark Corp., 7.875% Debs.,
2/1/23 50,000 55,578
- ----------------------------------------------------------------
Revlon Consumer Products Corp.,
8.625% Sr. Unsec. Sub. Nts., 2/1/08 125,000 114,375
------------
169,953
- ----------------------------------------------------------------
ENERGY - 1.0%
- ----------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 0.8% Coastal Corp.:
8.125% Sr. Nts., 9/15/02 50,000 53,592
8.75% Sr. Nts., 5/15/99 35,000 35,367
- ----------------------------------------------------------------
Crown Central Petroleum Corp.,
10.875% Sr. Nts., 2/1/05 50,000 48,250
- ----------------------------------------------------------------
Forcenergy, Inc., 8.50% Sr. Sub.
Nts., Series B, 2/15/07 50,000 37,250
- ----------------------------------------------------------------
Gulf Canada Resources Ltd.:
8.25% Sr. Nts., 3/15/17 75,000 67,828
9% Debs., 8/15/99 75,000 75,375
- ----------------------------------------------------------------
Louisiana Land & Exploration Co.,
7.65% Debs., 12/1/23 50,000 54,067
- ----------------------------------------------------------------
Petroleum Geo-Services ASA, 7.50%
Nts., 3/31/07 125,000 133,183
- ----------------------------------------------------------------
RAM Energy, Inc., 11.50% Sr. Unsec.
Nts., 2/15/08 75,000 52,875
- ----------------------------------------------------------------
Southwest Royalties, Inc., 10.50%
Sr. Nts., Series B, 10/15/04 125,000 50,625
- ----------------------------------------------------------------
Transamerican Energy Corp., 11.50%
Sr. Nts., Series B, 6/15/02(2) 50,000 16,250
- ----------------------------------------------------------------
Williams Holdings of Delaware,
Inc., 6.25% Sr. Unsec. Debs.,
2/1/06 50,000 51,450
------------
676,112
- ----------------------------------------------------------------
OIL-DOMESTIC - 0.1%
Norcen Energy Resources Ltd., 6.80%
Debs., 7/2/02 50,000 50,569
- ----------------------------------------------------------------
Standard Oil, 9% Gtd. Debs., 6/1/19 70,000 70,761
------------
121,330
- ----------------------------------------------------------------
OIL-INTERNATIONAL - 0.1%
Abraxas Petroleum Corp./CDN Abraxas
Petroleum Ltd., 11.50% Sr. Unsec.
Nts.,
Series D, 11/1/04 100,000 76,000
- ----------------------------------------------------------------
FINANCIAL - 2.8%
- ----------------------------------------------------------------
BANKS - 0.4%
Capital One Bank, Inc., 6.375% Sr.
Nts., 2/15/03 150,000 144,392
- ----------------------------------------------------------------
Fleet Mtg./Norstar Group, Inc.,
9.90% Sub. Nts., 6/15/01 85,000 93,217
- ----------------------------------------------------------------
Integra Financial Corp., 6.50% Sub.
Nts., 4/15/00 105,000 106,394
------------
344,003
- ----------------------------------------------------------------
DIVERSIFIED FINANCIAL - 1.3% American General Institutional Capital B, 8.125%
Bonds, Series B,
3/15/46(3) 125,000 144,287
</TABLE>
58
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED FINANCIAL (CONTINUED)
Capital One Financial Corp., 7.25%
Nts., 12/1/03 $ 40,000 $ 39,370
- ----------------------------------------------------------------
Countrywide Home Loans, Inc., 6.05%
Medium-Term Nts., Series D, 3/1/01 220,000 220,915
- ----------------------------------------------------------------
General Electric Capital Corp.,
5.77% Nts., Series A, 8/27/01 200,000 202,229
- ----------------------------------------------------------------
General Motors Acceptance Corp.,
5.625% Nts., 2/15/01 175,000 175,625
- ----------------------------------------------------------------
GS Escrow Corp., 6.75% Sr. Nts.,
8/1/01(3) 200,000 197,240
- ----------------------------------------------------------------
Olympic Financial Ltd., Units (each
unit consists of $1,000 principal
amount of 11.50% sr. nts., 3/15/07
and one warrant to purchase 6.84
shares of common stock)(2)(8) 125,000 94,375
------------
1,074,041
- ----------------------------------------------------------------
INSURANCE - 0.5% Aetna Industries, Inc., 11.875% Sr.
Nts., 10/1/06(2) 100,000 105,500
- ----------------------------------------------------------------
Conseco Financing Trust III, 8.796%
Bonds, 4/1/27 100,000 95,931
- ----------------------------------------------------------------
Conseco, Inc., 6.40% Nts., 6/15/01 175,000 167,835
- ----------------------------------------------------------------
Travelers Property Casualty Corp.,
6.75% Nts., 4/15/01 85,000 87,046
------------
456,312
- ----------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS -
0.6%
Chelsea GCA Realty Partner, Inc.,
7.75% Unsec. Nts., 1/26/01 280,000 278,209
- ----------------------------------------------------------------
First Industrial LP, 7.15% Bonds,
5/15/27 60,000 60,507
- ----------------------------------------------------------------
Simon DeBartolo Group, Inc., 6.625%
Nts., 6/15/03 175,000 173,196
------------
511,912
- ----------------------------------------------------------------
HEALTHCARE - 0.9%
- ----------------------------------------------------------------
HEALTHCARE/DRUGS - 0.1%
Integrated Health Services, Inc.,
9.25% Sr. Sub. Nts., Series A,
1/15/08 50,000 47,000
- ----------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES -
0.8%
Columbia/HCA Healthcare Corp.,
6.875% Nts., 7/15/01 145,000 143,963
- ----------------------------------------------------------------
Dade International, Inc., 11.125%
Sr. Sub. Nts., 5/1/06 100,000 111,500
- ----------------------------------------------------------------
ICN Pharmaceutical, Inc., 8.75% Sr.
Nts., 11/15/08(3) 125,000 126,875
- ----------------------------------------------------------------
Kinetic Concepts, Inc., 9.625% Sr.
Unsec. Sub. Nts., Series B, 11/1/07 50,000 48,125
- ----------------------------------------------------------------
Paracelsus Healthcare Corp., 10%
Sr. Unsec. Sub. Nts., 8/15/06(2) 100,000 90,500
- ----------------------------------------------------------------
Playtex Products, Inc., 8.875% Sr.
Nts., 7/15/04 75,000 78,938
- ----------------------------------------------------------------
Tenet Healthcare Corp., 8% Sr.
Nts., 1/15/05 75,000 77,712
------------
677,613
- ----------------------------------------------------------------
TELECOMMUNICATIONS - 3.7%
- ----------------------------------------------------------------
TELEPHONE UTILITIES - 0.1%
Teligent, Inc., 11.50% Sr. Nts.,
12/1/07 125,000 117,500
- ----------------------------------------------------------------
TELECOMMUNICATIONS/TECHNOLOGY -
3.6%
AT&T Capital Corp., 6.25%
Medium-Term Nts., Series F, 5/15/01 175,000 172,773
- ----------------------------------------------------------------
Coaxial Communications, Inc., 10%
Sr. Unsec. Nts., 8/15/06(2) 125,000 129,688
- ----------------------------------------------------------------
Comcast Cellular Communications,
Inc., 9.50% Sr. Nts., 5/1/07 125,000 133,125
- ----------------------------------------------------------------
Comcast UK Cable Partner Ltd.,
0%/11.20% Sr. Disc. Debs.,
11/15/07(7) 125,000 106,250
- ----------------------------------------------------------------
Diamond Cable Communications plc,
0%/10.75% Sr. Disc. Nts.,
2/15/07(7) 125,000 88,750
</TABLE>
59
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS/TECHNOLOGY
(CONTINUED)
e.spire Communications, Inc.,
0%/13% Sr. Disc. Nts., 11/1/05(7) $ 100,000 $ 75,500
- ----------------------------------------------------------------
Exodus Communications, Inc., 11.25%
Sr. Nts., 7/1/08 125,000 125,625
- ----------------------------------------------------------------
Globix Corp., 13% Sr. Unsec. Nts.,
5/1/05 100,000 82,500
- ----------------------------------------------------------------
GST USA, Inc., 0%/13.875% Gtd. Sr.
Disc. Nts., 12/15/05(7) 125,000 90,313
- ----------------------------------------------------------------
Hermes Europe Railtel BV, 10.375%
Sr. Nts., 1/15/09(3)(10) 125,000 126,875
- ----------------------------------------------------------------
ICG Holdings, Inc., 0%/11.625% Sr.
Disc. Nts., 3/15/07(7) 125,000 81,250
- ----------------------------------------------------------------
International CableTel, Inc.,
0%/11.50% Sr. Deferred Coupon Nts.,
Series B, 2/1/06(7) 200,000 165,000
- ----------------------------------------------------------------
Iridium LLC/Iridium Capital Corp.,
11.25% Sr. Nts., Series C/EN,
7/15/05 125,000 108,125
- ----------------------------------------------------------------
Level 3 Communications, Inc.,
9.125% Sr. Unsec. Nts., 5/1/08 125,000 124,063
- ----------------------------------------------------------------
Microcell Telecommunications, Inc.,
0%/14% Sr. Disc. Nts., Series B,
6/1/06(7) 125,000 93,438
- ----------------------------------------------------------------
Nextel Communications, Inc.,
0%/9.75% Sr. Disc. Nts., 8/15/04(7) 150,000 146,250
- ----------------------------------------------------------------
Optel, Inc., 11.50% Sr. Unsec.
Nts., 7/1/08 125,000 122,500
- ----------------------------------------------------------------
Price Communications Cellular
Holdings, Inc., 11.25% Sr. Nts.,
8/15/08(9) 100,000 95,000
- ----------------------------------------------------------------
PSINet, Inc., 11.50% Sr. Nts.,
11/1/08(3) 100,000 105,250
- ----------------------------------------------------------------
Qwest Communications International,
Inc., 0%/9.47% Sr. Disc. Nts.,
10/15/07(7) 125,000 97,188
- ----------------------------------------------------------------
RSL Communications plc, 9.125% Sr.
Unsec. Nts., 3/1/08 100,000 92,500
- ----------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr.
Sub. Nts., Series B, 5/15/08 100,000 100,750
- ----------------------------------------------------------------
Sprint Spectrum LP/Sprint Spectrum
Finance Corp., 11% Sr. Nts.,
8/15/06 100,000 116,000
- ----------------------------------------------------------------
Talton Holdings, Inc., 11% Gtd. Sr.
Unsec. Bonds, Series B, 6/30/07 125,000 119,375
- ----------------------------------------------------------------
TeleWest Communications plc:
0%/11% Sr. Disc. Debs., 10/1/07(7) 75,000 63,000
9.625% Sr. Debs., 10/1/06 75,000 77,625
- ----------------------------------------------------------------
US West Capital Funding, Inc.,
6.125% Nts., 7/15/02 200,000 204,691
- ----------------------------------------------------------------
Western Wireless Corp., 10.50% Sr.
Sub. Nts., 2/1/07 50,000 53,250
- ----------------------------------------------------------------
Winstar Communications, Inc.,
0%/14% Sr. Disc. Nts., 10/15/05(7) 50,000 35,750
------------
3,132,404
- ----------------------------------------------------------------
TRANSPORTATION - 0.5%
- ----------------------------------------------------------------
AIR TRANSPORTATION - 0.2% Canadian Airlines Corp., 12.25% Sr.
Nts., 8/1/06 75,000 51,375
- ----------------------------------------------------------------
Trans World Airlines, Inc., 11.375%
Unsec. Nts., 3/1/06 125,000 79,375
------------
130,750
- ----------------------------------------------------------------
RAILROADS & TRUCKERS - 0.3%
CSX Corp., 7.05% Debs., 5/1/02 70,000 73,140
- ----------------------------------------------------------------
Norfolk Southern Corp., 7.35% Nts.,
5/15/07 75,000 82,769
- ----------------------------------------------------------------
Union Pacific Corp., 7% Nts.,
6/15/00 105,000 107,018
------------
262,927
- ----------------------------------------------------------------
SHIPPING - 0.0%
Golden Ocean Group Ltd., 10% Sr.
Unsec. Nts., 8/31/01 100,000 30,000
</TABLE>
60
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT NOTE 1
- ----------------------------------------------------------------
<S> <C> <C>
UTILITIES - 1.1%
- ----------------------------------------------------------------
ELECTRIC UTILITIES - 0.4%
AES Corp., 8% Sr. Nts., 12/31/08 $ 100,000 $ 99,057
- ----------------------------------------------------------------
Niagara Mohawk Power Corp., 7.125%
Sr. Unsec. Nts., Series C, 7/1/01 200,000 204,107
------------
303,164
- ----------------------------------------------------------------
GAS UTILITIES - 0.7%
Northern Illinois Gas Co., 6.45%
First Mtg. Bonds, 8/1/01 200,000 203,127
- ----------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50%
Bonds, 4/1/17 125,000 133,429
- ----------------------------------------------------------------
Williams Cos., Inc., 6.20% Nts.,
8/1/02 225,000 225,740
------------
562,296
------------
Total Non-Convertible Corporate
Bonds and Notes (Cost $19,090,301) 18,683,827
- ----------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS AND
NOTES - 0.0%
- ----------------------------------------------------------------
BankAmerica Corp. (New), 8.50%
Exchangeable Sub. Capital Nts.,
3/1/99 (exchangeable for common,
perpetual preferred stock or other
capital securities) (Cost $37,251) 35,000 35,134
- ----------------------------------------------------------------
REPURCHASE AGREEMENTS - 10.3%
- ----------------------------------------------------------------
Repurchase agreement with
PaineWebber, Inc., 4.85%, dated
12/31/98, to be repurchased at
$8,835,759 on 1/4/99,
collateralized by U.S. Treasury
Nts., 7.75%, 11/30/99, with a value
of $9,023,454 (Cost $8,831,000) 8,831,000 8,831,000
- ----------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST
$75,415,118) 99.7% 85,648,910
- ----------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.3 224,500
------------ ------------
NET ASSETS 100.0% $85,873,410
------------ ------------
------------ ------------
</TABLE>
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted - See Note 6 of
Notes to Financial Statements.
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
Directors. These securities amount to $1,711,324 or 1.99% of the Fund's net
assets as of December 31, 1998.
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 on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
5. Represents the current interest rate for a variable rate security.
6. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
7. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
8. 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.
9. Interest or dividend is paid in kind.
10. When-issued security to be delivered and settled after December 31, 1998.
See accompanying Notes to Financial Statements.
61
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 72.0%
- -------------------------------------------------------------------------------------
BASIC MATERIALS - 0.9%
- -------------------------------------------------------------------------------------
CHEMICALS - 0.6%
Dexter Corp. 6,000 $ 188,625
- -------------------------------------------------------------------------------------
Ethyl Corp. 16,200 94,162
- -------------------------------------------------------------------------------------
Fuji Photo Film Co. 2,000 74,172
- -------------------------------------------------------------------------------------
IMC Global, Inc. 2,834 60,577
-----------
417,536
- -------------------------------------------------------------------------------------
METALS - 0.2%
Carpenter Technology Corp. 4,300 145,931
- -------------------------------------------------------------------------------------
PAPER - 0.1%
Unisource Worldwide, Inc. 9,000 65,250
- -------------------------------------------------------------------------------------
CAPITAL GOODS - 7.9%
- -------------------------------------------------------------------------------------
AEROSPACE/DEFENSE - 1.3%
General Dynamics Corp. 11,500 674,187
- -------------------------------------------------------------------------------------
Kellstrom Industries, Inc.(1) 3,200 92,000
- -------------------------------------------------------------------------------------
Lockheed Martin Corp. 2,400 203,400
-----------
969,587
- -------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 0.1%
Toshiba Corp. 19,000 112,909
- -------------------------------------------------------------------------------------
INDUSTRIAL SERVICES - 3.5%
Casella Waste Systems, Inc., Cl. A(1) 3,000 111,375
- -------------------------------------------------------------------------------------
Hays plc 26,000 222,006
- -------------------------------------------------------------------------------------
International Network Services(1) 4,000 266,000
- -------------------------------------------------------------------------------------
Kendle International, Inc.(1) 3,800 88,825
- -------------------------------------------------------------------------------------
Knoll, Inc.(1) 900 26,662
- -------------------------------------------------------------------------------------
Manhattan Associates, Inc.(1) 3,000 81,750
- -------------------------------------------------------------------------------------
Metamor Worldwide, Inc.(1) 4,800 120,000
- -------------------------------------------------------------------------------------
Metzler Group, Inc.(1) 3,500 170,406
- -------------------------------------------------------------------------------------
NCO Group, Inc.(1) 2,500 112,500
- -------------------------------------------------------------------------------------
New England Business Service, Inc. 6,300 246,487
- -------------------------------------------------------------------------------------
Rental Service Corp.(1) 4,100 64,319
- -------------------------------------------------------------------------------------
SM&A Corp.(1) 1,400 26,600
- -------------------------------------------------------------------------------------
Tetra Tech, Inc.(1) 11,175 302,423
- -------------------------------------------------------------------------------------
Transaction Systems Architects, Inc., Cl. A(1) 6,800 340,000
- -------------------------------------------------------------------------------------
United Rentals, Inc.(1) 2,800 92,750
- -------------------------------------------------------------------------------------
Viad Corp. 5,300 160,987
- -------------------------------------------------------------------------------------
Whittman-Hart, Inc.(1) 5,000 138,125
-----------
2,571,215
</TABLE>
62
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
MANUFACTURING - 3.0%
BBA Group plc 21,000 $ 130,393
- -------------------------------------------------------------------------------------
Brambles Industries Ltd. 6,000 146,202
- -------------------------------------------------------------------------------------
Herman Miller, Inc. 2,300 61,812
- -------------------------------------------------------------------------------------
Ingersoll-Rand Co. 3,500 164,281
- -------------------------------------------------------------------------------------
Mannesmann AG 2,500 289,323
- -------------------------------------------------------------------------------------
Mettler-Toledo International, Inc.(1) 3,900 109,444
- -------------------------------------------------------------------------------------
PACCAR, Inc. 7,200 296,100
- -------------------------------------------------------------------------------------
ROHN Industries, Inc.(1) 12,000 41,250
- -------------------------------------------------------------------------------------
Smiths Industries plc 12,000 167,524
- -------------------------------------------------------------------------------------
Taiyo Yuden Co. 8,000 94,517
- -------------------------------------------------------------------------------------
Textron, Inc. 4,600 349,312
- -------------------------------------------------------------------------------------
United Technologies Corp. 2,800 304,500
-----------
2,154,658
- -------------------------------------------------------------------------------------
CONSUMER CYCLICALS - 7.7%
- -------------------------------------------------------------------------------------
AUTOS & HOUSING - 2.7%
Bridgestone Corp. 5,000 113,245
- -------------------------------------------------------------------------------------
Cie de Saint Gobain 1,000 141,246
- -------------------------------------------------------------------------------------
Federal-Mogul Corp. 5,400 321,300
- -------------------------------------------------------------------------------------
Fleetwood Enterprises, Inc. 2,600 90,350
- -------------------------------------------------------------------------------------
Kaufman & Broad Home Corp. 1,400 40,250
- -------------------------------------------------------------------------------------
Kroll-O'Gara Co. (The)(1) 4,700 185,356
- -------------------------------------------------------------------------------------
Maytag Corp. 4,900 305,025
- -------------------------------------------------------------------------------------
Overseas Union Enterprise Ltd. 40,000 79,517
- -------------------------------------------------------------------------------------
Owens Corning 3,500 124,031
- -------------------------------------------------------------------------------------
Sonic Automotive, Inc.(1) 2,700 92,981
- -------------------------------------------------------------------------------------
Suzuki Motor Corp. 4,000 47,329
- -------------------------------------------------------------------------------------
USG Corp. 3,000 152,812
- -------------------------------------------------------------------------------------
Valeo SA 2,600 204,984
- -------------------------------------------------------------------------------------
Whirlpool Corp. 900 49,837
-----------
1,948,263
- -------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 0.7%
CDL Hotels International Ltd. 300,000 77,062
- -------------------------------------------------------------------------------------
Coach USA, Inc.(1) 4,000 138,750
- -------------------------------------------------------------------------------------
Hasbro, Inc. 1,500 54,187
- -------------------------------------------------------------------------------------
Nintendo Co. Ltd. 1,200 116,026
- -------------------------------------------------------------------------------------
Pegasus Systems, Inc.(1) 3,100 111,600
-----------
497,625
- -------------------------------------------------------------------------------------
MEDIA - 0.7%
Benpres Holdings Corp.(1) 120,000 19,435
- -------------------------------------------------------------------------------------
Citadel Communications Corp.(1) 3,300 85,387
- -------------------------------------------------------------------------------------
VNU-Verenigde Nederlandse Uitgeverbedrijven Verenigd Bezit 5,000 188,632
</TABLE>
63
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
MEDIA (CONTINUED)
Wolters Kluwer NV 900 $ 192,693
-----------
486,147
- -------------------------------------------------------------------------------------
RETAIL: GENERAL - 0.9%
Circle K Japan Co. Ltd. 1,300 57,051
- -------------------------------------------------------------------------------------
Dayton Hudson Corp. 3,000 162,750
- -------------------------------------------------------------------------------------
Federated Department Stores, Inc.(1) 1,200 52,275
- -------------------------------------------------------------------------------------
Fruit of the Loom, Inc., Cl. A(1) 1,300 17,956
- -------------------------------------------------------------------------------------
Gucci Group NV 1,300 63,212
- -------------------------------------------------------------------------------------
Ito-Yokado Co. Ltd. 2,000 139,514
- -------------------------------------------------------------------------------------
K Mart Corp.(1) 3,400 52,062
- -------------------------------------------------------------------------------------
Nordstrom, Inc. 1,800 62,437
- -------------------------------------------------------------------------------------
Shaw Industries, Inc. 2,300 55,775
-----------
663,032
- -------------------------------------------------------------------------------------
RETAIL: SPECIALTY - 2.7%
Ann Taylor Stores Corp.(1) 3,800 149,862
- -------------------------------------------------------------------------------------
Boots Co. plc 10,000 169,365
- -------------------------------------------------------------------------------------
Brown Group, Inc. 9,700 170,356
- -------------------------------------------------------------------------------------
Children's Place Retail Stores, Inc.(1) 2,800 70,350
- -------------------------------------------------------------------------------------
Guitar Center, Inc.(1) 4,900 120,662
- -------------------------------------------------------------------------------------
Hennes & Mauritz AB, B Shares 3,200 261,352
- -------------------------------------------------------------------------------------
Insight Enterprises, Inc.(1) 6,500 330,687
- -------------------------------------------------------------------------------------
Kingfisher plc 15,000 150,464
- -------------------------------------------------------------------------------------
Koninklijke Ahold NV 6,000 221,883
- -------------------------------------------------------------------------------------
Payless ShoeSource, Inc.(1) 1,200 56,850
- -------------------------------------------------------------------------------------
Restoration Hardware, Inc.(1) 5,800 155,875
- -------------------------------------------------------------------------------------
School Specialty, Inc.(1) 4,700 100,462
-----------
1,958,168
- -------------------------------------------------------------------------------------
CONSUMER STAPLES - 7.4%
- -------------------------------------------------------------------------------------
BEVERAGES - 0.7%
Anheuser-Busch Cos., Inc. 5,500 360,937
- -------------------------------------------------------------------------------------
Scottish & Newcastle plc 15,000 169,489
-----------
530,426
- -------------------------------------------------------------------------------------
CONSUMER SERVICES - 0.8%
Alternative Living Services, Inc.(1) 6,900 236,325
- -------------------------------------------------------------------------------------
Hanover Compressor Co.(1) 3,400 87,337
- -------------------------------------------------------------------------------------
Hertz Corp., Cl. A 1,700 77,562
- -------------------------------------------------------------------------------------
Lamar Advertising Co., Cl. A(1) 5,150 191,837
-----------
593,061
- -------------------------------------------------------------------------------------
ENTERTAINMENT - 0.5%
CKE Restaurants, Inc. 5,610 165,144
</TABLE>
64
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
ENTERTAINMENT (CONTINUED)
Piccadilly Cafeterias, Inc. 9,300 $ 97,650
- -------------------------------------------------------------------------------------
Shaw Brothers (Hong Kong) Ltd. 330,000 142,700
-----------
405,494
- -------------------------------------------------------------------------------------
FOOD - 2.3%
General Mills, Inc. 5,500 427,625
- -------------------------------------------------------------------------------------
Groupe Danone 800 229,144
- -------------------------------------------------------------------------------------
IBP, Inc. 8,000 233,000
- -------------------------------------------------------------------------------------
Jeronimo Martins & Filho SA 3,000 164,122
- -------------------------------------------------------------------------------------
Kerry Group plc, Cl. A 10,000 136,426
- -------------------------------------------------------------------------------------
Koninklijke Numico NV 3,200 152,611
- -------------------------------------------------------------------------------------
Nestle SA 100 217,613
- -------------------------------------------------------------------------------------
Suiza Foods Corp.(1) 2,300 117,156
-----------
1,677,697
- -------------------------------------------------------------------------------------
FOOD & DRUG RETAILERS - 1.7%
Albertson's, Inc. 3,300 210,169
- -------------------------------------------------------------------------------------
Colruyt SA 250 209,590
- -------------------------------------------------------------------------------------
Kroger Co.(1) 3,400 205,700
- -------------------------------------------------------------------------------------
Safeway, Inc.(1) 3,600 219,375
- -------------------------------------------------------------------------------------
United Natural Foods, Inc.(1) 5,300 127,862
- -------------------------------------------------------------------------------------
Whole Foods Market, Inc.(1) 2,500 120,937
- -------------------------------------------------------------------------------------
William Morrison Supermarkets plc 34,000 156,151
-----------
1,249,784
- -------------------------------------------------------------------------------------
HOUSEHOLD GOODS - 1.4%
Blyth Industries, Inc.(1) 4,100 128,125
- -------------------------------------------------------------------------------------
Dial Corp. (The) 6,000 173,250
- -------------------------------------------------------------------------------------
Fort James Corp. 4,587 183,480
- -------------------------------------------------------------------------------------
L'OREAL 350 253,133
- -------------------------------------------------------------------------------------
Premark International, Inc. 5,600 193,900
- -------------------------------------------------------------------------------------
Reckitt & Colman plc 8,000 105,581
-----------
1,037,469
- -------------------------------------------------------------------------------------
ENERGY - 2.3%
- -------------------------------------------------------------------------------------
OIL - DOMESTIC - 2.1%
Amoco Corp. 3,800 229,425
- -------------------------------------------------------------------------------------
Atlantic Richfield Co. 3,700 241,425
- -------------------------------------------------------------------------------------
Chevron Corp. 3,300 273,694
- -------------------------------------------------------------------------------------
Exxon Corp. 7,200 526,500
- -------------------------------------------------------------------------------------
Occidental Petroleum Corp. 6,200 104,625
- -------------------------------------------------------------------------------------
Total SA, B Shares 1,400 141,854
-----------
1,517,523
</TABLE>
65
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
OIL - INTERNATIONAL - 0.2%
Shell Transport & Trading Co. plc 30,000 $ 183,043
- -------------------------------------------------------------------------------------
FINANCIAL - 11.1%
- -------------------------------------------------------------------------------------
BANKS - 3.2%
Banco Popular Espanol SA 2,200 166,136
- -------------------------------------------------------------------------------------
Banco Santander SA 120 2,388
- -------------------------------------------------------------------------------------
Bank Handlowy W Warszawie, GDR(2) 2,800 36,400
- -------------------------------------------------------------------------------------
Bank One Corp. 9,500 485,094
- -------------------------------------------------------------------------------------
BankBoston Corp. 8,300 323,181
- -------------------------------------------------------------------------------------
Bayerische Hypo-Und Vereinsbank 1,950 154,312
- -------------------------------------------------------------------------------------
Credito Italiano SpA 30,000 178,211
- -------------------------------------------------------------------------------------
First Union Corp. 8,600 522,988
- -------------------------------------------------------------------------------------
Lloyds TSB Group plc 18,000 255,166
- -------------------------------------------------------------------------------------
Nordbanken Holding AB 28,000 179,630
-----------
2,303,506
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 2.2%
Cattles plc 15,000 157,303
- -------------------------------------------------------------------------------------
Citigroup, Inc. 9,600 475,200
- -------------------------------------------------------------------------------------
Fannie Mae 2,800 207,200
- -------------------------------------------------------------------------------------
HealthCare Financial Partners, Inc.(1) 4,400 160,600
- -------------------------------------------------------------------------------------
ING Groep NV 3,000 183,037
- -------------------------------------------------------------------------------------
Lend Lease Corp. Ltd. 8,000 107,890
- -------------------------------------------------------------------------------------
Northern Rock plc 20,000 190,339
- -------------------------------------------------------------------------------------
Perlis Plantations Berhad(3) 25,500 20,937
- -------------------------------------------------------------------------------------
Promise Co. Ltd. 1,400 72,689
-----------
1,575,195
- -------------------------------------------------------------------------------------
INSURANCE - 4.2%
AEGON NV 1,800 221,179
- -------------------------------------------------------------------------------------
Allstate Corp. 2,500 96,563
- -------------------------------------------------------------------------------------
American General Corp. 5,700 444,600
- -------------------------------------------------------------------------------------
American International Group, Inc. 2,500 241,563
- -------------------------------------------------------------------------------------
Assicurazioni Generali SpA 4,000 167,385
- -------------------------------------------------------------------------------------
AXA SA 1,400 203,007
- -------------------------------------------------------------------------------------
Cigna Corp. 2,900 224,206
- -------------------------------------------------------------------------------------
Conseco, Inc. 3,900 119,194
- -------------------------------------------------------------------------------------
Equitable Cos., Inc. 100 5,788
- -------------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. 1,900 104,263
- -------------------------------------------------------------------------------------
HSB Group, Inc. 3,750 153,984
- -------------------------------------------------------------------------------------
Irish Life plc 15,000 141,346
- -------------------------------------------------------------------------------------
Jefferson-Pilot Corp. 3,900 292,500
</TABLE>
66
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
INSURANCE (CONTINUED)
Pre-Paid Legal Services, Inc.(1) 6,700 $ 221,100
- -------------------------------------------------------------------------------------
Transamerica Corp. 3,000 346,500
- -------------------------------------------------------------------------------------
Travelers Property Casualty Corp., Cl. A 2,300 71,300
-----------
3,054,478
- -------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS - 1.2%
Camden Property Trust 7,200 187,200
- -------------------------------------------------------------------------------------
Cornerstone Properties, Inc. 11,400 178,125
- -------------------------------------------------------------------------------------
Healthcare Realty Trust, Inc. 6,814 152,037
- -------------------------------------------------------------------------------------
HRPT Properties Trust 9,200 129,375
- -------------------------------------------------------------------------------------
Meditrust Corp., Paired Stock 5,407 81,781
- -------------------------------------------------------------------------------------
Tower Realty Trust, Inc. 6,500 130,813
-----------
859,331
- -------------------------------------------------------------------------------------
SAVINGS & LOANS - 0.3%
Golden West Financial Corp. 2,100 192,544
- -------------------------------------------------------------------------------------
HEALTHCARE - 6.5%
- -------------------------------------------------------------------------------------
HEALTHCARE/DRUGS - 3.5%
Amgen, Inc.(1) 2,800 292,775
- -------------------------------------------------------------------------------------
Fresenius AG, Preference 900 189,130
- -------------------------------------------------------------------------------------
Gedeon Richter Ltd., GDR(2) 2,500 106,875
- -------------------------------------------------------------------------------------
Genzyme Corp. (General Division)(1) 7,800 388,050
- -------------------------------------------------------------------------------------
Idexx Laboratories, Inc.(1) 2,900 78,028
- -------------------------------------------------------------------------------------
Jones Pharma, Inc. 3,500 127,750
- -------------------------------------------------------------------------------------
Medicis Pharmaceutical Corp., Cl. A(1) 3,900 232,538
- -------------------------------------------------------------------------------------
Novartis AG 100 196,507
- -------------------------------------------------------------------------------------
Novo-Nordisk AS, B Shares 1,500 197,978
- -------------------------------------------------------------------------------------
Sanofi SA 1,500 247,046
- -------------------------------------------------------------------------------------
Schering AG 1,200 150,943
- -------------------------------------------------------------------------------------
Takeda Chemical Industries Ltd. 4,000 153,642
- -------------------------------------------------------------------------------------
Zeneca Group plc 5,000 216,949
-----------
2,578,211
- -------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES - 3.0%
Bard (C.R.), Inc. 13,600 673,200
- -------------------------------------------------------------------------------------
Luxottica Group SpA, Sponsored ADR 12,000 144,000
- -------------------------------------------------------------------------------------
Olympus Optical Co. Ltd. 9,000 103,232
- -------------------------------------------------------------------------------------
Orthodontic Centers of America, Inc.(1) 6,200 120,513
- -------------------------------------------------------------------------------------
Pediatrix Medical Group, Inc.(1) 3,900 233,756
- -------------------------------------------------------------------------------------
Pliva d.d., Sponsored GDR(2) 5,900 97,940
- -------------------------------------------------------------------------------------
Province Healthcare Co.(1) 4,400 157,850
- -------------------------------------------------------------------------------------
Renal Care Group, Inc.(1) 6,200 178,638
- -------------------------------------------------------------------------------------
SmithKline Beecham plc 17,000 236,763
</TABLE>
67
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE/SUPPLIES & SERVICES (CONTINUED)
Tenet Healthcare Corp.(1) 2,590 $ 67,988
- -------------------------------------------------------------------------------------
Terumo Corp. 2,000 46,976
- -------------------------------------------------------------------------------------
Total Renal Care Holdings, Inc.(1) 2,000 59,125
- -------------------------------------------------------------------------------------
WellPoint Health Networks, Inc.(1) 500 43,500
-----------
2,163,481
- -------------------------------------------------------------------------------------
TECHNOLOGY - 14.9%
- -------------------------------------------------------------------------------------
COMPUTER HARDWARE - 3.7%
3Com Corp.(1) 5,400 241,988
- -------------------------------------------------------------------------------------
Apex PC Solutions, Inc.(1) 3,900 112,613
- -------------------------------------------------------------------------------------
Apple Computer, Inc.(1) 4,800 196,500
- -------------------------------------------------------------------------------------
Compaq Computer Corp. 10,000 419,375
- -------------------------------------------------------------------------------------
Electronics for Imaging, Inc.(1) 3,000 120,563
- -------------------------------------------------------------------------------------
International Business Machines Corp. 3,700 683,575
- -------------------------------------------------------------------------------------
Lexmark International Group, Inc., Cl. A(1) 2,400 241,200
- -------------------------------------------------------------------------------------
Network Appliance, Inc.(1) 8,200 369,000
- -------------------------------------------------------------------------------------
Seagate Technology, Inc.(1) 4,800 145,200
- -------------------------------------------------------------------------------------
Storage Technology Corp. (New)(1) 2,300 81,794
- -------------------------------------------------------------------------------------
VideoServer, Inc.(1) 5,300 97,388
-----------
2,709,196
- -------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 6.9%
Abacus Direct Corp.(1) 2,900 131,950
- -------------------------------------------------------------------------------------
Applied Micro Circuits Corp.(1) 4,400 149,463
- -------------------------------------------------------------------------------------
Aware, Inc.(1) 5,700 154,969
- -------------------------------------------------------------------------------------
Best Software, Inc.(1) 4,800 114,000
- -------------------------------------------------------------------------------------
BindView Development Corp.(1) 5,400 148,500
- -------------------------------------------------------------------------------------
BroadVision, Inc.(1) 3,900 124,800
- -------------------------------------------------------------------------------------
Concord Communications, Inc.(1) 2,300 130,525
- -------------------------------------------------------------------------------------
Dendrite International, Inc.(1) 7,300 182,272
- -------------------------------------------------------------------------------------
Diamond Technology Partners, Inc.(1) 7,700 147,263
- -------------------------------------------------------------------------------------
Documentum, Inc.(1) 3,400 181,688
- -------------------------------------------------------------------------------------
DSET Corp.(1) 10,000 103,750
- -------------------------------------------------------------------------------------
First Data Corp. 2,800 88,725
- -------------------------------------------------------------------------------------
Great Plains Software, Inc.(1) 3,000 144,750
- -------------------------------------------------------------------------------------
IDX Systems Corp.(1) 2,900 127,600
- -------------------------------------------------------------------------------------
Legato Systems, Inc.(1) 3,900 257,156
- -------------------------------------------------------------------------------------
Macromedia, Inc.(1) 5,200 175,175
- -------------------------------------------------------------------------------------
Medical Manager Corp.(1) 3,300 103,538
- -------------------------------------------------------------------------------------
MedQuist, Inc.(1) 2,100 82,950
- -------------------------------------------------------------------------------------
Mercury Interactive Corp.(1) 3,800 240,350
</TABLE>
68
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE/SERVICES (CONTINUED)
Micromuse, Inc.(1) 6,300 $ 122,850
- -------------------------------------------------------------------------------------
MicroStrategy, Inc.(1) 4,500 141,750
- -------------------------------------------------------------------------------------
Network Associates, Inc.(1) 5,000 331,250
- -------------------------------------------------------------------------------------
New Era of Networks, Inc.(1) 5,000 220,000
- -------------------------------------------------------------------------------------
QuadraMed Corp.(1) 6,100 125,050
- -------------------------------------------------------------------------------------
Rational Software Corp.(1) 4,300 113,950
- -------------------------------------------------------------------------------------
SAP AG, Preference 200 96,006
- -------------------------------------------------------------------------------------
Sapient Corp.(1) 3,200 179,200
- -------------------------------------------------------------------------------------
Software AG Systems, Inc.(1) 4,800 87,000
- -------------------------------------------------------------------------------------
SPR, Inc.(1) 3,100 53,475
- -------------------------------------------------------------------------------------
SS&C Technologies, Inc.(1) 5,900 73,013
- -------------------------------------------------------------------------------------
Tier Technologies, Inc., Cl. B(1) 5,700 98,325
- -------------------------------------------------------------------------------------
TSI International Software Ltd.(1) 3,200 153,200
- -------------------------------------------------------------------------------------
Veritas Software Corp.(1) 3,312 198,513
- -------------------------------------------------------------------------------------
Visio Corp.(1) 2,800 102,375
- -------------------------------------------------------------------------------------
Wind River Systems, Inc.(1) 3,150 148,050
-----------
5,033,431
- -------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 0.4%
Excel Switching Corp.(1) 4,900 186,200
- -------------------------------------------------------------------------------------
Tekelec(1) 6,700 110,969
-----------
297,169
- -------------------------------------------------------------------------------------
ELECTRONICS - 2.7%
Bowthorpe plc 19,000 109,312
- -------------------------------------------------------------------------------------
Electrocomponents plc 23,000 153,680
- -------------------------------------------------------------------------------------
Getronics NV 4,000 198,224
- -------------------------------------------------------------------------------------
Hoshiden Corp. 10,000 174,128
- -------------------------------------------------------------------------------------
RF Micro Devices, Inc.(1) 3,900 180,863
- -------------------------------------------------------------------------------------
Sony Corp. 1,600 116,274
- -------------------------------------------------------------------------------------
TDK Corp. 2,000 182,428
- -------------------------------------------------------------------------------------
Uniphase Corp.(1) 3,300 228,938
- -------------------------------------------------------------------------------------
Vitesse Semiconductor Corp.(1) 5,700 260,063
- -------------------------------------------------------------------------------------
VTech Holdings Ltd. 61,000 266,141
- -------------------------------------------------------------------------------------
Waters Corp.(1) 1,200 104,700
-----------
1,974,751
- -------------------------------------------------------------------------------------
PHOTOGRAPHY - 1.2%
Eastman Kodak Co. 6,500 468,000
- -------------------------------------------------------------------------------------
Xerox Corp. 3,300 389,400
-----------
857,400
</TABLE>
69
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS - 6.7%
- -------------------------------------------------------------------------------------
TELEPHONE UTILITIES - 3.3%
Bell Atlantic Corp. 12,060 $ 685,159
- -------------------------------------------------------------------------------------
Cable & Wireless Communications plc(1) 18,000 163,993
- -------------------------------------------------------------------------------------
Century Telephone Enterprises, Inc. 1,500 101,250
- -------------------------------------------------------------------------------------
Tele Danmark AS, B Shares 2,000 269,941
- -------------------------------------------------------------------------------------
Telecom Italia Mobile SpA 27,500 203,470
- -------------------------------------------------------------------------------------
Telefonica de Espana 4,909 218,615
- -------------------------------------------------------------------------------------
U S West, Inc. 12,000 775,500
-----------
2,417,928
- -------------------------------------------------------------------------------------
TELECOMMUNICATIONS/TECHNOLOGY - 3.4%
ALLTELL Corp. 8,400 502,425
- -------------------------------------------------------------------------------------
AT&T Corp. 11,400 857,850
- -------------------------------------------------------------------------------------
Ericsson LM, B Shares 7,000 166,676
- -------------------------------------------------------------------------------------
Matsushita Communication Industrial Co. 2,000 94,128
- -------------------------------------------------------------------------------------
Nippon Telegraph & Telephone Corp. 17 130,896
- -------------------------------------------------------------------------------------
Nokia Oyj, A Shares 1,200 146,940
- -------------------------------------------------------------------------------------
NTT Mobile Communications Network, Inc. 3 123,179
- -------------------------------------------------------------------------------------
Telecom Italia SpA 23,000 196,677
- -------------------------------------------------------------------------------------
Vodafone Group plc 16,000 258,383
-----------
2,477,154
- -------------------------------------------------------------------------------------
TRANSPORTATION - 1.3%
- -------------------------------------------------------------------------------------
AIR TRANSPORTATION - 0.6%
AHL Services, Inc.(1) 4,500 140,625
- -------------------------------------------------------------------------------------
AMR Corp.(1) 1,300 77,188
- -------------------------------------------------------------------------------------
BAA plc 16,000 185,166
- -------------------------------------------------------------------------------------
Delta Air Lines, Inc. 1,000 52,000
-----------
454,979
- -------------------------------------------------------------------------------------
RAILROADS & TRUCKERS - 0.7%
GATX Corp. 10,400 393,900
- -------------------------------------------------------------------------------------
MotivePower Industries, Inc.(1) 3,300 106,219
-----------
500,119
- -------------------------------------------------------------------------------------
UTILITIES - 5.3%
- -------------------------------------------------------------------------------------
ELECTRIC UTILITIES - 3.5%
CalEnergy, Inc.(1) 2,100 72,844
- -------------------------------------------------------------------------------------
Duke Energy Corp. 5,948 381,044
- -------------------------------------------------------------------------------------
Endesa SA 6,000 159,219
- -------------------------------------------------------------------------------------
FPL Group, Inc. 7,000 431,375
- -------------------------------------------------------------------------------------
Houston Industries, Inc. 8,900 285,913
- -------------------------------------------------------------------------------------
Kansas City Power & Light Co. 6,600 195,525
- -------------------------------------------------------------------------------------
Montana Power Co. 8,600 486,438
</TABLE>
70
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
ELECTRIC UTILITIES (CONTINUED)
United Utilities plc 13,000 $ 180,084
- -------------------------------------------------------------------------------------
Vivendi (Ex-Generale des Eaux) 650 168,725
- -------------------------------------------------------------------------------------
Western Resources, Inc. 5,200 172,900
-----------
2,534,067
- -------------------------------------------------------------------------------------
GAS UTILITIES - 1.8%
Columbia Energy Group 3,700 213,675
- -------------------------------------------------------------------------------------
El Paso Energy Corp. 12,400 431,675
- -------------------------------------------------------------------------------------
MCN Energy Group, Inc. 5,000 95,313
- -------------------------------------------------------------------------------------
National Fuel Gas Co. 5,600 253,050
- -------------------------------------------------------------------------------------
Questar Corp. 10,800 209,250
- -------------------------------------------------------------------------------------
RWE AG, Preference 2,500 90,812
-----------
1,293,775
-----------
Total Common Stocks (Cost $41,116,877) 52,461,533
- -------------------------------------------------------------------------------------
PREFERRED STOCKS - 0.2%
- -------------------------------------------------------------------------------------
Case Corp., $4.50 Cum. Cv., Series A, Non-Vtg. 1,100 63,250
- -------------------------------------------------------------------------------------
PRIMEDIA, Inc., 10% Preferred Stock, Series D(3) 500 52,250
- -------------------------------------------------------------------------------------
TCR Holding Corp.:
Series B(1) 88 5
Series C(1) 48 3
Series D(1) 127 7
Series E(1) 263 16
-----------
Total Preferred Stocks (Cost $155,356) 115,531
UNITS
- -------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES - 0.0%
- -------------------------------------------------------------------------------------
Australis Holdings PTY Ltd./Australia Media Ltd. Wts., Exp.
10/01(3) 100 1
- -------------------------------------------------------------------------------------
e.spire Communications, Inc. Wts., Exp. 11/05 100 2,414
- -------------------------------------------------------------------------------------
Microcell Telecommunications, Inc. Wts., Exp. 6/06(3) 200 3,625
- -------------------------------------------------------------------------------------
Price Communications Corp. Wts., Exp. 8/07(3) 344 16,426
- -------------------------------------------------------------------------------------
Telefonica de Espana Rts., Exp. 1/99 4,909 4,365
-----------
Total Rights, Warrants and Certificates (Cost $2,825) 26,831
PRINCIPAL
AMOUNT
- -------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 0.2%
- -------------------------------------------------------------------------------------
Arcadia Automobile Receivables Trust, Automobile
Receivables-Backed Nts.,
Series 1998-B, Cl. A3, 5.95%, 11/15/02 $ 75,000 75,352
- -------------------------------------------------------------------------------------
IROQUOIS Trust, Asset-Backed Amortizing Nts., Series 1997-2,
Cl. A, 6.752%, 6/25/07(3) 50,000 50,234
- -------------------------------------------------------------------------------------
Olympic Automobile Receivables Trust, Automobile
Receivables-Backed Nts.,
Series 1997-A, Cl. A-5, 6.80%, 2/15/05 50,000 50,750
-----------
Total Asset-Backed Securities (Cost $174,900) 176,336
</TABLE>
71
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
<S> <C> <C>
- -------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS - 0.9%
- -------------------------------------------------------------------------------------
Countrywide Funding Corp., Mtg. Pass-Through Certificates,
Series 1994-10, Cl. A3, 6%, 5/25/09 $ 100,000 $ 99,343
- -------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Collateralized Mtg.
Obligations, Gtd. Multiclass Mtg. Participation
Certificates, Series 1711, Cl. EA, 7%, 3/15/24 100,000 102,281
- -------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Multiclass Mtg.
Participation Certificates:
6%, 3/1/09 13,427 13,514
Series 1843, Cl. VB, 7%, 4/15/03 15,000 15,319
Series 1849, Cl. VA, 6%, 12/15/10 19,551 19,723
- -------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 1542, Cl. QC, 7.504%, 10/15/20(4) 300,000 39,375
Series 1583, Cl. IC, 7.03%, 1/15/20(4) 216,903 21,284
- -------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
6%, 12/1/03 32,159 32,261
6.50%, 4/1/26 40,535 40,826
7%, 4/1/00 29,658 29,630
- -------------------------------------------------------------------------------------
Federal National Mortgage Assn., Collateralized Mtg.
Obligations, Gtd. Real Estate Mtg. Investment Conduit
Pass-Through Certificates, Trust 1993-190, Cl. Z, 5.85%,
7/25/08 30,627 30,570
- -------------------------------------------------------------------------------------
GE Capital Mortgage Services, Inc., Gtd. Real Estate Mtg.
Investment Conduit
Pass-Through Certificates, Series 1994-7, Cl. A18, 6%,
2/25/09 99,442 94,999
- -------------------------------------------------------------------------------------
IMC Home Equity Trust, Asset-Backed Home Equity Securities,
Series 1998-3, Cl. A5, 6.36%, 8/20/22(5) 125,000 125,078
-----------
Total Mortgage-Backed Obligations (Cost $663,696) 664,203
- -------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 4.0%
- -------------------------------------------------------------------------------------
Federal Farm Credit Bank, Medium-Term Nts., 5.24%, 10/1/08 100,000 99,536
- -------------------------------------------------------------------------------------
U.S. Treasury Bonds:
6%, 2/15/26 400,000 436,625
7.50%, 11/15/16 660,000 820,875
STRIPS, 5.618%, 11/15/18(6) 350,000 116,632
- -------------------------------------------------------------------------------------
U.S. Treasury Nts.:
5.625%, 2/15/06 225,000 237,375
5.75%, 8/15/03 150,000 156,609
6.125%, 8/15/07 200,000 218,625
6.50%, 8/15/05 725,000 796,821
-----------
Total U.S. Government Obligations (Cost $2,682,185) 2,883,098
- -------------------------------------------------------------------------------------
NON-CONVERTIBLE CORPORATE BONDS AND NOTES - 12.3%
- -------------------------------------------------------------------------------------
BASIC MATERIALS - 0.7%
- -------------------------------------------------------------------------------------
CHEMICALS - 0.4%
Laroche Industries, Inc., 9.50% Sr. Sub. Nts., Series B,
9/15/07 75,000 60,375
- -------------------------------------------------------------------------------------
Morton International, Inc., 9.25% Credit Sensitive Nts.,
6/1/20 35,000 47,641
- -------------------------------------------------------------------------------------
PPG Industries, Inc., 9% Debs., 5/1/21 35,000 44,771
- -------------------------------------------------------------------------------------
Rexene Corp. (New), 11.75% Sr. Nts., 12/1/04(3) 50,000 53,750
- -------------------------------------------------------------------------------------
Sterling Chemicals Holdings, Inc., 0%/13.50% Sr. Disc. Nts.,
8/15/08(7) 75,000 31,500
- -------------------------------------------------------------------------------------
Texas Petrochemicals Corp., 11.125% Sr. Sub. Nts., Series B,
7/1/06 75,000 74,250
-----------
312,287
</TABLE>
72
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
<S> <C> <C>
- -------------------------------------------------------------------------------------
METALS - 0.2%
Alcan Aluminum Ltd., 9.625% Debs., 7/15/19 $ 35,000 $ 37,409
- -------------------------------------------------------------------------------------
Gulf States Steel, Inc. (Alabama), 13.50% First Mtg. Nts.,
Series B, 4/15/03 75,000 24,000
- -------------------------------------------------------------------------------------
WCI Steel, Inc., 10% Sr. Nts., Series B, 12/1/04 75,000 74,812
-----------
136,221
- -------------------------------------------------------------------------------------
PAPER - 0.1%
Malette, Inc., 12.25% Sr. Sec. Nts., 7/15/04(3) 50,000 54,250
- -------------------------------------------------------------------------------------
Stone Container Corp., 9.875% Sr. Nts., 2/1/01 50,000 50,875
-----------
105,125
- -------------------------------------------------------------------------------------
CAPITAL GOODS - 1.6%
- -------------------------------------------------------------------------------------
INDUSTRIAL SERVICES - 1.2%
Advance Holding Corp., 0%/12.875% Sr. Disc. Nts., 4/15/09(7) 50,000 29,250
- -------------------------------------------------------------------------------------
Advance Stores Co., Inc., 10.25% Sr. Unsec. Sub. Nts.,
Series B, 4/15/08 25,000 25,375
- -------------------------------------------------------------------------------------
Applied Extrusion Technologies, Inc., 11.50% Sr. Nts.,
Series B, 4/1/02(3) 125,000 130,937
- -------------------------------------------------------------------------------------
Employee Solutions, Inc., 10% Sr. Unsec. Nts., Series B,
10/15/04(3) 75,000 56,625
- -------------------------------------------------------------------------------------
Jordan Telecommunication Products, Inc., 9.875% Sr. Nts.,
Series B, 8/1/07 50,000 49,750
- -------------------------------------------------------------------------------------
KSL Recreation Group, Inc., 10.25% Sr. Sub. Nts., 5/1/07(3) 50,000 50,000
- -------------------------------------------------------------------------------------
Maxim Group, Inc. (The), 9.25% Sr. Sub. Nts., Series B,
10/15/07(3) 50,000 49,750
- -------------------------------------------------------------------------------------
Mrs. Fields Holding Co., Units (each unit consists of $1,000
principal amount of 0%/14% sr. sec. disc. nts., 12/1/05 and
warrants to purchase shares of common stock)(3)(7)(8) 100,000 57,500
- -------------------------------------------------------------------------------------
Ocean Energy, Inc., 8.375% Sr. Unsec. Sub. Nts., Series B,
7/1/08 50,000 46,750
- -------------------------------------------------------------------------------------
Production Resource Group, LLC/PRG Finance Corp., 11.50% Sr.
Unsec. Sub. Nts., 1/15/08(3) 75,000 73,875
- -------------------------------------------------------------------------------------
Scotia Pacific Co. LLC, 6.55% Nts., 1/20/07(2) 75,000 72,539
- -------------------------------------------------------------------------------------
Simonds Industries, Inc., 10.25% Sr. Sub. Nts., 7/1/08(3) 50,000 51,250
- -------------------------------------------------------------------------------------
Sun Co., Inc., 7.95% Debs., 12/15/01 50,000 52,768
- -------------------------------------------------------------------------------------
Thermadyne Holdings Corp., 0%/12.50% Sr. Disc. Debs.,
6/1/08(3)(7) 75,000 36,000
- -------------------------------------------------------------------------------------
Tyco International Group SA, 6.125% Unsec. Nts., 6/15/01 75,000 75,799
- -------------------------------------------------------------------------------------
USI American Holdings, Inc., 7.25% Sr. Nts., Series B,
12/1/06 40,000 39,636
-----------
897,804
- -------------------------------------------------------------------------------------
MANUFACTURING - 0.4%
Federal-Mogul Corp., 7.50% Nts., 7/1/04 75,000 75,975
- -------------------------------------------------------------------------------------
Jordan Industries, Inc., 10.375% Sr. Nts., Series B,
8/1/07(3) 75,000 76,875
- -------------------------------------------------------------------------------------
Portola Packaging, Inc., 10.75% Sr. Nts., 10/1/05(3) 50,000 51,250
- -------------------------------------------------------------------------------------
Titan Wheel International, Inc., 8.75% Sr. Sub. Nts., 4/1/07 50,000 49,250
- -------------------------------------------------------------------------------------
U.S. Filter Corp., 6.375% Bonds, 5/15/01 75,000 74,502
-----------
327,852
- -------------------------------------------------------------------------------------
CONSUMER CYCLICALS - 3.7%
- -------------------------------------------------------------------------------------
AUTOS & HOUSING - 0.4%
Ainsworth Lumber, Inc., 12.50% Sr. Nts., 7/15/07(9) 75,000 75,000
- -------------------------------------------------------------------------------------
American Standard Cos., Inc., 10.875% Sr. Nts., 5/15/99 43,000 43,215
</TABLE>
73
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
AUTOS & HOUSING (CONTINUED)
Black & Decker Corp., 6.625% Nts., 11/15/00 $ 15,000 $ 15,256
- -------------------------------------------------------------------------------------
Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., Series B,
7/15/07 75,000 64,875
- -------------------------------------------------------------------------------------
Oxford Automotive, Inc., 10.125% Sr. Unsec. Sub. Nts.,
6/15/07 75,000 78,000
-----------
276,346
- -------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 1.3%
American Skiing Corp., 12% Sr. Sub. Nts., Series B,
7/15/06(3) 50,000 52,250
- -------------------------------------------------------------------------------------
Ameristar Casinos, Inc., 10.50% Sr. Sub. Nts., Series B,
8/1/04 50,000 45,750
- -------------------------------------------------------------------------------------
Bally Total Fitness Holding Corp., 9.875% Sr. Sub. Nts.,
Series B, 10/15/07 75,000 73,875
- -------------------------------------------------------------------------------------
Casino America, Inc., 12.50% Sr. Nts., 8/1/03 50,000 55,625
- -------------------------------------------------------------------------------------
Casino Magic of Louisiana Corp., 13% First Mtg. Nts., Series
B, 8/15/03 50,000 56,750
- -------------------------------------------------------------------------------------
Colorado Gaming & Entertainment Co., 12% Sr. Sec. Nts.,
6/1/03(3) 75,000 80,625
- -------------------------------------------------------------------------------------
Hilton Hotels Corp., 7.375% Nts., 6/1/02 50,000 50,415
- -------------------------------------------------------------------------------------
HMH Properties, Inc., 7.875% Sr. Nts., Series A, 8/1/05 75,000 73,500
- -------------------------------------------------------------------------------------
Hollywood Casino Corp., 12.75% Gtd. Sr. Sec. Nts., 11/1/03 75,000 79,875
- -------------------------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 50,000 51,875
- -------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority (Connecticut), 13.50% Sr.
Sec. Nts., Series B, 11/15/02 50,000 60,250
- -------------------------------------------------------------------------------------
Players International, Inc., 10.875% Sr. Nts., 4/15/05 75,000 80,812
- -------------------------------------------------------------------------------------
Rio Hotel & Casino, Inc., 10.625% Sr. Sub. Nts., 7/15/05 50,000 54,750
- -------------------------------------------------------------------------------------
Santa Fe Hotel, Inc., 11% Gtd. First Mtg. Nts., 12/15/00 50,000 46,000
- -------------------------------------------------------------------------------------
Station Casinos, Inc., 9.75% Sr. Sub. Nts., 4/15/07 75,000 78,750
-----------
941,102
- -------------------------------------------------------------------------------------
MEDIA - 1.5%
Adelphia Communications Corp., 10.50% Sr. Unsec. Nts.,
Series B, 7/15/04 75,000 84,375
- -------------------------------------------------------------------------------------
Allbritton Communications Co., 8.875% Sr. Sub. Nts., Series
B, 2/1/08 75,000 76,125
- -------------------------------------------------------------------------------------
Australis Holdings PTY Ltd., 0%/15% Sr. Sec. Disc. Nts.,
11/1/02(3)(7) 100,000 5,250
- -------------------------------------------------------------------------------------
Big Flower Press Holdings, Inc., 8.625% Sr. Sub. Nts.,
12/1/08(2) 75,000 76,125
- -------------------------------------------------------------------------------------
Century Communications Corp., 9.75% Sr. Nts., 2/15/02 50,000 54,250
- -------------------------------------------------------------------------------------
Century Communications Corp., Zero Coupon Sr. Disc. Nts.,
Series B, 8.511%, 1/15/08(6) 50,000 25,250
- -------------------------------------------------------------------------------------
Comcast Corp., 9.125% Sr. Sub. Debs., 10/15/06 50,000 53,500
- -------------------------------------------------------------------------------------
CSC Holdings, Inc., 9.875% Sr. Sub. Nts., 5/15/06 50,000 54,750
- -------------------------------------------------------------------------------------
Diva Systems Corp., Units (each unit consists of $1,000
principal amount of 0%/12.625% sr. disc. nts., 3/1/08 and
three warrants to purchase three shares of common
stock)(2)(7)(8) 100,000 41,500
- -------------------------------------------------------------------------------------
EchoStar Satellite Broadcasting Corp., 0%/13.125% Sr. Sec.
Disc. Nts., 3/15/04(7) 50,000 50,125
- -------------------------------------------------------------------------------------
Falcon Holding Group LP, 0%/9.285% Sr. Disc. Debs., Series
B, 4/15/10(7) 100,000 69,000
- -------------------------------------------------------------------------------------
Fox/Liberty Networks LLC, 8.875% Sr. Nts., 8/15/07 25,000 25,625
- -------------------------------------------------------------------------------------
Hollinger International Publishing, Inc., 9.25% Gtd. Sr.
Sub. Nts., 3/15/07 75,000 79,500
- -------------------------------------------------------------------------------------
Interepublic National Radio Sales Corp., 10% Sr. Unsec. Sub.
Nts., 7/1/08(3) 50,000 51,750
</TABLE>
74
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
MEDIA (CONTINUED)
James Cable Partners LP, 10.75% Sr. Nts., Series B, 8/15/04 $ 50,000 $ 52,250
- -------------------------------------------------------------------------------------
Marcus Cable Operating Co. LP/Marcus Cable Capital Corp.,
0%/13.50% Gtd. Sr. Sub. Disc. Nts., Series II, 8/1/04(7) 75,000 75,937
- -------------------------------------------------------------------------------------
MDC Communications Corp., 10.50% Sr. Sub. Nts., 12/1/06 75,000 76,875
- -------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 10% Sr. Sub. Nts., 9/30/05 50,000 53,250
- -------------------------------------------------------------------------------------
Spanish Broadcasting Systems, Inc., 11% Sr. Nts., 3/15/04 50,000 53,250
- -------------------------------------------------------------------------------------
TCI Satellite Entertainment, Inc., 10.875% Sr. Sub. Nts.,
2/15/07 50,000 16,750
- -------------------------------------------------------------------------------------
United International Holdings, Inc., 0%/10.75% Sr. Disc.
Nts., Series B, 2/15/08(7) 100,000 54,500
-----------
1,129,937
- -------------------------------------------------------------------------------------
RETAIL: GENERAL - 0.3%
Federated Department Stores, Inc., 6.125% Cv. Sub. Nts.,
9/1/01(5) 75,000 75,878
- -------------------------------------------------------------------------------------
Price/Costco Cos., Inc., 7.125% Sr. Nts., 6/15/05 40,000 43,060
- -------------------------------------------------------------------------------------
William Carter Co., 10.375% Sr. Sub. Nts., Series A, 12/1/06 75,000 79,500
-----------
198,438
- -------------------------------------------------------------------------------------
RETAIL: SPECIALTY - 0.2%
K Mart Corp., 7.75% Debs., 10/1/12 50,000 51,517
- -------------------------------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 75,000 78,937
-----------
130,454
- -------------------------------------------------------------------------------------
CONSUMER STAPLES - 0.7%
- -------------------------------------------------------------------------------------
CONSUMER SERVICES - 0.1%
Lamar Advertising Co., 8.625% Sr. Sub. Nts., 9/15/07 75,000 79,125
- -------------------------------------------------------------------------------------
ENTERTAINMENT - 0.1%
Tricon Global Restaurants, Inc., 7.45% Sr. Unsec. Nts.,
5/15/05 75,000 77,400
- -------------------------------------------------------------------------------------
FOOD - 0.3%
AmeriServe Food Distribution, Inc., 8.875% Sr. Nts.,
10/15/06 75,000 69,750
- -------------------------------------------------------------------------------------
Dole Food Distributing, Inc., 6.75% Nts., 7/15/00 40,000 40,389
- -------------------------------------------------------------------------------------
Grand Metro Inventory Corp., 7.125% Nts., 9/15/04 100,000 107,473
-----------
217,612
- -------------------------------------------------------------------------------------
FOOD & DRUG RETAILERS - 0.1%
Jitney-Jungle Stores of America, Inc., 10.375% Sr. Sub.
Nts., 9/15/07 50,000 51,500
- -------------------------------------------------------------------------------------
HOUSEHOLD GOODS - 0.1%
Kimberly-Clark Corp., 7.875% Debs., 2/1/23 35,000 38,905
- -------------------------------------------------------------------------------------
Revlon Consumer Products Corp., 8.625% Sr. Unsec. Sub. Nts.,
2/1/08 75,000 68,625
-----------
107,530
- -------------------------------------------------------------------------------------
ENERGY - 0.7%
- -------------------------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS - 0.5%
Coastal Corp., 8.125% Sr. Nts., 9/15/02 15,000 16,078
- -------------------------------------------------------------------------------------
Forcenergy, Inc., 8.50% Sr. Sub. Nts., Series B, 2/15/07 75,000 55,875
- -------------------------------------------------------------------------------------
Gulf Canada Resources Ltd., 8.25% Sr. Nts., 3/15/17 50,000 45,219
- -------------------------------------------------------------------------------------
Louisiana Land & Exploration Co., 7.65% Debs., 12/1/23 35,000 37,847
- -------------------------------------------------------------------------------------
Petroleum Geo-Services ASA, 7.50% Nts., 3/31/07 50,000 53,273
</TABLE>
75
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
ENERGY SERVICES & PRODUCERS (CONTINUED)
RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08 $ 75,000 $ 52,875
- -------------------------------------------------------------------------------------
Southwest Royalties, Inc., 10.50% Sr. Nts., Series B,
10/15/04 75,000 30,375
- -------------------------------------------------------------------------------------
Transamerican Energy Corp., 11.50% Sr. Nts., Series B,
6/15/02(3) 50,000 16,250
- -------------------------------------------------------------------------------------
Williams Holdings of Delaware, Inc., 6.25% Sr. Unsec. Debs.,
2/1/06 25,000 25,725
-----------
333,517
- -------------------------------------------------------------------------------------
OIL - DOMESTIC - 0.1%
Norcen Energy Resources Ltd., 6.80% Debs., 7/2/02 50,000 50,569
- -------------------------------------------------------------------------------------
Standard Oil, 9% Gtd. Debs., 6/1/19 15,000 15,163
-----------
65,732
- -------------------------------------------------------------------------------------
OIL - INTERNATIONAL - 0.1%
Abraxas Petroleum Corp./CDN Abraxas Petroleum Ltd., 11.50%
Sr. Unsec. Nts.,
Series D, 11/1/04 50,000 38,000
- -------------------------------------------------------------------------------------
FINANCIAL - 1.2%
- -------------------------------------------------------------------------------------
BANKS - 0.1%
Capital One Bank, Inc., 6.375% Sr. Nts., 2/15/03 50,000 48,131
- -------------------------------------------------------------------------------------
Fleet Mtg./Norstar Group, Inc., 9.90% Sub. Nts., 6/15/01 15,000 16,450
- -------------------------------------------------------------------------------------
Integra Financial Corp., 6.50% Sub. Nts., 4/15/00 15,000 15,199
-----------
79,780
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 0.6%
American General Institutional Capital B, 8.125% Bonds,
Series B, 3/15/46(2) 50,000 57,715
- -------------------------------------------------------------------------------------
Capital One Financial Corp., 7.25% Nts., 12/1/03 40,000 39,370
- -------------------------------------------------------------------------------------
Countrywide Home Loans, Inc., 6.05% Medium-Term Nts., Series
D, 3/1/01 90,000 90,374
- -------------------------------------------------------------------------------------
General Electric Capital Corp., 5.77% Nts., Series A,
8/27/01 75,000 75,836
- -------------------------------------------------------------------------------------
General Motors Acceptance Corp., 5.625% Nts., 2/15/01 25,000 25,089
- -------------------------------------------------------------------------------------
GS Escrow Corp., 6.75% Sr. Nts., 8/1/01(2) 75,000 73,965
- -------------------------------------------------------------------------------------
Olympic Financial Ltd., Units (each unit consists of $1,000
principal amount of 11.50% sr. nts., 3/15/07 and one warrant
to purchase 6.84 shares of common stock)(3)(8) 75,000 56,625
-----------
418,974
- -------------------------------------------------------------------------------------
INSURANCE - 0.2%
Conseco Financing Trust III, 8.796% Bonds, 4/1/27 50,000 47,965
- -------------------------------------------------------------------------------------
Conseco, Inc., 6.40% Nts., 6/15/01 75,000 71,929
- -------------------------------------------------------------------------------------
Travelers Property Casualty Corp., 6.75% Nts., 4/15/01 15,000 15,361
-----------
135,255
- -------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS - 0.3%
Chelsea GCA Realty Partner, Inc., 7.75% Unsec. Nts., 1/26/01 80,000 79,488
- -------------------------------------------------------------------------------------
First Industrial LP, 7.15% Bonds, 5/15/27 50,000 50,422
- -------------------------------------------------------------------------------------
Simon DeBartolo Group, Inc., 6.625% Nts., 6/15/03 75,000 74,227
-----------
204,137
</TABLE>
76
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE - 0.6%
- -------------------------------------------------------------------------------------
HEALTHCARE/DRUGS - 0.1%
Integrated Health Services, Inc., 9.25% Sr. Sub. Nts.,
Series A, 1/15/08 $ 50,000 $ 47,000
- -------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES - 0.5%
Columbia/HCA Healthcare Corp., 6.875% Nts., 7/15/01 30,000 29,785
- -------------------------------------------------------------------------------------
Dade International, Inc., 11.125% Sr. Sub. Nts., 5/1/06 25,000 27,875
- -------------------------------------------------------------------------------------
ICN Pharmaceutical, Inc., 8.75% Sr. Nts., 11/15/08(2) 75,000 76,125
- -------------------------------------------------------------------------------------
Kinetic Concepts, Inc., 9.625% Sr. Unsec. Sub. Nts., Series
B, 11/1/07 75,000 72,188
- -------------------------------------------------------------------------------------
Paracelsus Healthcare Corp., 10% Sr. Unsec. Sub. Nts.,
8/15/06(3) 50,000 45,250
- -------------------------------------------------------------------------------------
Playtex Products, Inc., 8.875% Sr. Nts., 7/15/04 50,000 52,625
- -------------------------------------------------------------------------------------
Tenet Healthcare Corp., 8% Sr. Nts., 1/15/05 50,000 51,808
-----------
355,656
- -------------------------------------------------------------------------------------
TELECOMMUNICATIONS - 2.4%
- -------------------------------------------------------------------------------------
TELEPHONE UTILITIES - 0.1%
Teligent, Inc., 11.50% Sr. Nts., 12/1/07 75,000 70,500
- -------------------------------------------------------------------------------------
TELECOMMUNICATIONS/TECHNOLOGY - 2.3%
AT&T Capital Corp., 6.25% Medium-Term Nts., Series F,
5/15/01 75,000 74,046
- -------------------------------------------------------------------------------------
Coaxial Communications, Inc., 10% Sr. Unsec. Nts.,
8/15/06(3) 75,000 77,813
- -------------------------------------------------------------------------------------
Comcast Cellular Communications, Inc., 9.50% Sr. Nts.,
5/1/07 75,000 79,875
- -------------------------------------------------------------------------------------
Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc. Debs.,
11/15/07(7) 50,000 42,500
- -------------------------------------------------------------------------------------
Diamond Cable Communications plc, 0%/10.75% Sr. Disc. Nts.,
2/15/07(7) 75,000 53,250
- -------------------------------------------------------------------------------------
e.spire Communications, Inc., 0%/13% Sr. Disc. Nts.,
11/1/05(7) 100,000 75,500
- -------------------------------------------------------------------------------------
Exodus Communications, Inc., 11.25% Sr. Nts., 7/1/08 75,000 75,375
- -------------------------------------------------------------------------------------
GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(7) 75,000 54,188
- -------------------------------------------------------------------------------------
Hermes Europe Railtel BV, 10.375% Sr. Nts., 1/15/09(2)(10) 75,000 76,125
- -------------------------------------------------------------------------------------
ICG Holdings, Inc., 0%/11.625% Sr. Disc. Nts., 3/15/07(7) 100,000 65,000
- -------------------------------------------------------------------------------------
International CableTel, Inc., 0%/11.50% Sr. Deferred Coupon
Nts., Series B, 2/1/06(7) 150,000 123,750
- -------------------------------------------------------------------------------------
Iridium LLC/Iridium Capital Corp., 11.25% Sr. Nts., Series
C/EN, 7/15/05 75,000 64,875
- -------------------------------------------------------------------------------------
Level 3 Communications, Inc., 9.125% Sr. Unsec. Nts., 5/1/08 75,000 74,438
- -------------------------------------------------------------------------------------
Microcell Telecommunications, Inc., 0%/14% Sr. Disc. Nts.,
Series B, 6/1/06(7) 50,000 37,375
- -------------------------------------------------------------------------------------
Nextel Communications, Inc., 0%/9.75% Sr. Disc. Nts.,
8/15/04(7) 50,000 48,750
- -------------------------------------------------------------------------------------
Optel, Inc., 11.50% Sr. Unsec. Nts., 7/1/08 50,000 49,000
- -------------------------------------------------------------------------------------
Price Communications Cellular Holdings, Inc., 11.25% Sr.
Nts., 8/15/08(9) 50,000 47,500
- -------------------------------------------------------------------------------------
PSINet, Inc., 11.50% Sr. Nts., 11/1/08(2) 50,000 52,625
- -------------------------------------------------------------------------------------
Qwest Communications International, Inc., 0%/9.47% Sr. Disc.
Nts., 10/15/07(7) 75,000 58,313
- -------------------------------------------------------------------------------------
RSL Communications plc, 9.125% Sr. Unsec. Nts., 3/1/08 50,000 46,250
- -------------------------------------------------------------------------------------
Sprint Spectrum LP/Sprint Spectrum Finance Corp., 11% Sr.
Nts., 8/15/06 75,000 87,000
- -------------------------------------------------------------------------------------
Talton Holdings, Inc., 11% Gtd. Sr. Unsec. Bonds, Series B,
6/30/07 75,000 71,625
- -------------------------------------------------------------------------------------
TeleWest Communications plc:
0%/11% Sr. Disc. Debs., 10/1/07(7) 25,000 21,000
9.625% Sr. Debs., 10/1/06 25,000 25,875
</TABLE>
77
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
AMOUNT NOTE 1
- -------------------------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS/TECHNOLOGY (CONTINUED)
US West Capital Funding, Inc., 6.125% Nts., 7/15/02 $ 75,000 $ 76,759
- -------------------------------------------------------------------------------------
Western Wireless Corp., 10.50% Sr. Sub. Nts., 2/1/07 50,000 53,250
- -------------------------------------------------------------------------------------
Winstar Communications, Inc., 0%/14% Sr. Disc. Nts.,
10/15/05(7) 50,000 35,750
-----------
1,647,807
- -------------------------------------------------------------------------------------
TRANSPORTATION - 0.3%
- -------------------------------------------------------------------------------------
AIR TRANSPORTATION - 0.1%
Canadian Airlines Corp., 12.25% Sr. Nts., 8/1/06 75,000 51,375
- -------------------------------------------------------------------------------------
Trans World Airlines, Inc., 11.375% Unsec. Nts., 3/1/06 75,000 47,625
-----------
99,000
- -------------------------------------------------------------------------------------
RAILROADS & TRUCKERS - 0.2%
CSX Corp., 7.05% Debs., 5/1/02 75,000 78,365
- -------------------------------------------------------------------------------------
Norfolk Southern Corp., 7.35% Nts., 5/15/07 50,000 55,179
- -------------------------------------------------------------------------------------
Union Pacific Corp., 7% Nts., 6/15/00 15,000 15,288
-----------
148,832
- -------------------------------------------------------------------------------------
SHIPPING - 0.0%
Golden Ocean Group Ltd., 10% Sr. Unsec. Nts., 8/31/01 50,000 15,000
- -------------------------------------------------------------------------------------
UTILITIES - 0.4%
- -------------------------------------------------------------------------------------
ELECTRIC UTILITIES - 0.2%
AES Corp., 8% Sr. Nts., 12/31/08 50,000 49,529
- -------------------------------------------------------------------------------------
Niagara Mohawk Power Corp., 7.125% Sr. Unsec. Nts., Series
C, 7/1/01 75,000 76,540
-----------
126,069
- -------------------------------------------------------------------------------------
GAS UTILITIES - 0.2%
Northern Illinois Gas Co., 6.45% First Mtg. Bonds, 8/1/01 50,000 50,782
- -------------------------------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50% Bonds, 4/1/17 50,000 53,372
- -------------------------------------------------------------------------------------
Williams Cos., Inc., 6.20% Nts., 8/1/02 75,000 75,247
-----------
179,401
-----------
Total Non-Convertible Corporate Bonds and Notes (Cost
$9,341,234) 8,953,393
- -------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 10.4%
- -------------------------------------------------------------------------------------
Repurchase agreement with PaineWebber, Inc., 4.85%, dated 12/31/98, to be
repurchased at $7,599,093 on 1/4/99, collateralized by U.S. Treasury Nts.,
7.75%, 11/30/99, with
a value of $7,760,518 (Cost $7,595,000) 7,595,000 7,595,000
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $61,732,073) 100.0% 72,875,925
- -------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.0) (26,772 )
---------- -----------
NET ASSETS 100.0% $72,849,153
---------- -----------
---------- -----------
</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 $767,934 or 1.05% of the Fund's net assets
as of December 31, 1998.
3. Identifies issues considered to be illiquid or restricted - See Note 6 of
Notes to Financial Statements.
78
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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 on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
5. Represents the current interest rate for a variable rate security.
6. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
7. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
8. 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.
9. Interest or dividend is paid in kind.
10. When-issued security to be delivered and settled after December 31, 1998.
See accompanying Notes to Financial Statements.
79
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<CAPTION>
TOTAL GOVERNMENT
RETURN GROWTH SECURITIES
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- -------------------------------------------------------------------------
ASSETS
Investments, at value
(cost *) (including
repurchase
agreements **) - see
accompanying statements $ 1,345,914,709 $ 925,715,939 $ 24,436,187
- -------------------------------------------------------------------------
Cash 184,635 132,602 201,864
- -------------------------------------------------------------------------
Receivables:
Dividends, interest and
principal paydowns 6,925,648 1,034,074 303,903
Shares of capital stock
sold 207,463 131,967 316
Investments sold 6,383,315 8,110,058 --
Daily variation on
futures contracts - see
applicable note 458,150 -- --
Other 18,041 11,551 1,728
--------------- ------------- ------------
Total assets 1,360,091,961 935,136,191 24,943,998
- -------------------------------------------------------------------------
LIABILITIES
Payables and other
liabilities:
Investments purchased 15,394,819 14,928,624 --
Shares of capital stock
redeemed 734,711 1,251,364 5,999
Custodian fees 9,745 15,214 319
Legal and auditing fees 24,427 19,888 7,336
Shareholder reports 8,804 9,310 4,631
Registration and filing
fees 33,218 38,666 --
Transfer and shareholder
servicing agent fees 2,035 483 616
Other 1,823 1,183 2,218
--------------- ------------- ------------
Total liabilities 16,209,582 16,264,732 21,119
- -------------------------------------------------------------------------
NET ASSETS $ 1,343,882,379 $ 918,871,459 $ 24,922,879
--------------- ------------- ------------
--------------- ------------- ------------
- -------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Par value of shares of
capital stock $ 704,410 $ 280,759 $ 22,014
- -------------------------------------------------------------------------
Additional paid-in
capital 1,116,469,294 690,886,056 22,932,372
- -------------------------------------------------------------------------
Undistributed net
investment income 42,986,942 10,166,774 1,337,809
- -------------------------------------------------------------------------
Accumulated net realized
gain (loss) from
investments
and foreign currency
transactions 36,977,889 33,277,597 (609,390)
- -------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation) on
investments and
translation of assets and
liabilities
denominated in foreign
currencies 146,743,844 184,260,273 1,240,074
--------------- ------------- ------------
Net assets $ 1,343,882,379 $ 918,871,459 $ 24,922,879
--------------- ------------- ------------
--------------- ------------- ------------
- -------------------------------------------------------------------------
SHARES OF CAPITAL STOCK
OUTSTANDING 704,410,395 280,759,431 22,014,005
- -------------------------------------------------------------------------
NET ASSET VALUE,
REDEMPTION PRICE AND
OFFERING PRICE PER SHARE $ 1.91 $ 3.27 $ 1.13
*Cost $ 1,209,354,422 $ 741,455,666 $ 23,170,302
**Repurchase agreements $ 57,700,000 $ 23,800,000 $ 1,100,000
</TABLE>
See accompanying Notes to Financial Statements.
80
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
LIFESPAN LIFESPAN
INTERNATIONAL DIVERSIFIED LIFESPAN CAPITAL
EQUITY INCOME BALANCED APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
ASSETS
Investments, at value
(cost *) (including
repurchase
agreements **) - see
accompanying statements $ 103,104,406 $ 43,181,713 $ 85,648,910 $ 72,875,925
- ---------------------------------------------------------------------------------------
Cash 80,720 24,394 24,087 8,711
- ---------------------------------------------------------------------------------------
Receivables:
Dividends, interest and
principal paydowns 235,016 540,697 661,782 355,429
Shares of capital stock
sold 136,018 18,567 -- 6,017
Investments sold -- 122,959 386,207 431,294
Daily variation on
futures contracts - see
applicable note -- -- -- --
Other 3,447 2,479 3,347 2,847
-------------- ------------ ------------ -------------
Total assets 103,559,607 43,890,809 86,724,333 73,680,223
- ---------------------------------------------------------------------------------------
LIABILITIES
Payables and other
liabilities:
Investments purchased -- 185,290 771,738 802,587
Shares of capital stock
redeemed 122,977 -- 46,561 --
Custodian fees 11,579 7,600 7,039 2,364
Legal and auditing fees 9,507 7,052 9,010 8,981
Shareholder reports 7,818 7,166 9,760 12,396
Registration and filing
fees 2,337 2,742 4,918 3,209
Transfer and shareholder
servicing agent fees 1,058 1,238 1,029 1,077
Other 583 640 868 456
-------------- ------------ ------------ -------------
Total liabilities 155,859 211,728 850,923 831,070
- ---------------------------------------------------------------------------------------
NET ASSETS $ 103,403,748 $ 43,679,081 $ 85,873,410 $ 72,849,153
-------------- ------------ ------------ -------------
-------------- ------------ ------------ -------------
- ---------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Par value of shares of
capital stock $ 65,895 $ 37,415 $ 67,155 $ 53,763
- ---------------------------------------------------------------------------------------
Additional paid-in
capital 76,649,719 39,532,136 73,932,226 61,270,795
- ---------------------------------------------------------------------------------------
Undistributed net
investment income 576,688 2,150,194 2,595,467 1,570,493
- ---------------------------------------------------------------------------------------
Accumulated net realized
gain (loss) from
investments
and foreign currency
transactions 216,254 555,096 (955,181) (1,189,648)
- ---------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation) on
investments and
translation of assets and
liabilities
denominated in foreign
currencies 25,895,192 1,404,240 10,233,743 11,143,750
-------------- ------------ ------------ -------------
Net assets $ 103,403,748 $ 43,679,081 $ 85,873,410 $ 72,849,153
-------------- ------------ ------------ -------------
-------------- ------------ ------------ -------------
- ---------------------------------------------------------------------------------------
SHARES OF CAPITAL STOCK
OUTSTANDING 65,894,927 37,415,435 67,154,567 53,762,813
- ---------------------------------------------------------------------------------------
NET ASSET VALUE,
REDEMPTION PRICE AND
OFFERING PRICE PER SHARE $ 1.57 $ 1.17 $ 1.28 $ 1.36
*Cost $ 77,209,375 $ 41,777,473 $ 75,415,118 $ 61,732,073
**Repurchase agreements $ 2,800,000 $ 4,706,000 $ 8,831,000 $ 7,595,000
</TABLE>
See accompanying Notes to Financial Statements.
81
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
TOTAL GOVERNMENT
RETURN GROWTH SECURITIES
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
- ---------------------------------------------------------------------
INVESTMENT INCOME
Interest (net of
withholding taxes of *) $ 41,622,822 $ 4,937,302 $ 1,519,588
- ---------------------------------------------------------------------
Dividends (net of
withholding taxes of **) 8,395,507 9,934,645 --
------------- ------------ -----------
Total income 50,018,329 14,871,947 1,519,588
- ---------------------------------------------------------------------
EXPENSES
Custodian fees and
expenses 46,333 31,729 264
- ---------------------------------------------------------------------
Shareholder reports 11,957 12,315 6,434
- ---------------------------------------------------------------------
Accounting service fees -
see applicable note 15,000 15,000 15,000
- ---------------------------------------------------------------------
Legal and auditing fees 46,592 23,931 6,599
- ---------------------------------------------------------------------
Insurance expenses 14,271 6,923 1,390
- ---------------------------------------------------------------------
Directors' fees and
expenses 36,750 4,477 1,305
- ---------------------------------------------------------------------
Registration and filing
fees 32,541 38,345 --
- ---------------------------------------------------------------------
Management fees - see
applicable note 6,893,133 4,523,009 126,217
- ---------------------------------------------------------------------
Transfer and shareholder
servicing agent fees -
see applicable note 4,274 2,358 2,873
- ---------------------------------------------------------------------
Other 2,196 2,304 2,630
------------- ------------ -----------
Total expenses 7,103,047 4,660,391 162,712
- ---------------------------------------------------------------------
NET INVESTMENT INCOME 42,915,282 10,211,556 1,356,876
- ---------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS)
Net realized gain (loss)
on:
Investments 17,806,759 33,310,716 (66,552)
Closing of futures
contracts 20,330,587 -- (73,575)
Foreign currency
transactions -- -- --
Net change in unrealized
appreciation or
depreciation on:
Investments 54,372,054 24,320,298 627,658
Translation of assets and
liabilities denominated
in
foreign currencies -- -- --
------------- ------------ -----------
Net realized and
unrealized gain (loss) 92,509,400 57,631,014 487,531
- ---------------------------------------------------------------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS $ 135,424,682 $ 67,842,570 $ 1,844,407
------------- ------------ -----------
------------- ------------ -----------
*Withholding taxes -
interest $ -- $ -- $ --
**Withholding taxes -
dividends $ -- $ -- $ --
</TABLE>
See accompanying Notes to Financial Statements.
82
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998 (CONTINUED)
<TABLE>
<CAPTION>
LIFESPAN LIFESPAN
INTERNATIONAL DIVERSIFIED LIFESPAN CAPITAL
EQUITY INCOME BALANCED APPRECIATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest (net of
withholding taxes of *) $ 247,798 $ 2,211,127 $ 2,696,623 $ 1,492,845
- --------------------------------------------------------------------------------------
Dividends (net of
withholding taxes of **) 1,427,931 271,334 641,115 737,026
-------------- ------------ ----------- -------------
Total income 1,675,729 2,482,461 3,337,738 2,229,871
- --------------------------------------------------------------------------------------
EXPENSES
Custodian fees and
expenses 31,773 264 7,274 6,447
- --------------------------------------------------------------------------------------
Shareholder reports 9,979 3,245 12,530 13,901
- --------------------------------------------------------------------------------------
Accounting service fees -
see applicable note 15,000 15,000 15,000 15,000
- --------------------------------------------------------------------------------------
Legal and auditing fees 11,802 4,631 10,815 6,717
- --------------------------------------------------------------------------------------
Insurance expenses 3,262 2,586 3,044 2,741
- --------------------------------------------------------------------------------------
Directors' fees and
expenses 3,018 2,624 3,035 3,121
- --------------------------------------------------------------------------------------
Registration and filing
fees 2,339 2,696 4,814 3,167
- --------------------------------------------------------------------------------------
Management fees - see
applicable note 945,935 287,965 648,865 567,142
- --------------------------------------------------------------------------------------
Transfer and shareholder
servicing agent fees -
see applicable note 2,959 3,157 2,859 2,865
- --------------------------------------------------------------------------------------
Other 3,528 257 1,936 2,416
-------------- ------------ ----------- -------------
Total expenses 1,029,595 322,425 710,172 623,517
- --------------------------------------------------------------------------------------
NET INVESTMENT INCOME 646,134 2,160,036 2,627,566 1,606,354
- --------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS)
Net realized gain (loss)
on:
Investments 1,628,113 570,917 (785,225) (1,012,512)
Closing of futures
contracts -- -- -- --
Foreign currency
transactions (1,399,644) -- (163,659) (165,269)
Net change in unrealized
appreciation or
depreciation on:
Investments 9,699,026 (928,198) 2,130,211 2,684,474
Translation of assets and
liabilities denominated
in
foreign currencies 5,242,221 -- 632,075 687,122
-------------- ------------ ----------- -------------
Net realized and
unrealized gain (loss) 15,169,716 (357,281) 1,813,402 2,193,815
- --------------------------------------------------------------------------------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS $ 15,815,850 $ 1,802,755 $ 4,440,968 $ 3,800,169
-------------- ------------ ----------- -------------
-------------- ------------ ----------- -------------
*Withholding taxes -
interest $ -- $ 289 $ 722 $ 433
**Withholding taxes -
dividends $ 146,782 $ -- $ 18,142 $ 21,582
</TABLE>
See accompanying Notes to Financial Statements.
83
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
TOTAL
RETURN GROWTH
PORTFOLIO PORTFOLIO
1998 1997 1998 1997
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 42,915,282 $ 43,104,000 $ 10,211,556 $ 9,988,627
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) 38,137,346 144,786,846 33,310,716 108,263,083
- ---------------------------------------------------------------------------------------------
Net change in unrealized
appreciation or
depreciation 54,372,054 14,497,050 24,320,298 45,697,012
--------------- --------------- -------------- -------------
Net increase in net
assets resulting from
operations 135,424,682 202,387,896 67,842,570 163,948,722
- ---------------------------------------------------------------------------------------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income (42,620,811) (38,831,970) (9,799,624) (6,502,490)
- ---------------------------------------------------------------------------------------------
Distributions from net
realized gain (144,299,156) (95,341,180) (107,624,371) (46,127,035)
- ---------------------------------------------------------------------------------------------
CAPITAL STOCK
TRANSACTIONS
Net increase (decrease)
in net assets resulting
from
capital stock
transactions - Note 2 116,654,347 88,432,903 137,081,544 133,829,865
- ---------------------------------------------------------------------------------------------
NET ASSETS
Total increase 65,159,062 156,647,649 87,500,119 245,149,062
- ---------------------------------------------------------------------------------------------
Beginning of period 1,278,723,317 1,122,075,668 831,371,340 586,222,278
--------------- --------------- -------------- -------------
End of period $ 1,343,882,379 $ 1,278,723,317 $ 918,871,459 $ 831,371,340
--------------- --------------- -------------- -------------
--------------- --------------- -------------- -------------
Undistributed net
investment income $ 42,986,942 $ 42,609,690 $ 10,166,774 $ 9,770,088
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT INTERNATIONAL
SECURITIES EQUITY
PORTFOLIO PORTFOLIO
1998 1997 1998 1997
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 1,356,876 $ 1,373,656 $ 646,134 $ 527,431
- -------------------------------------------------------------------------------------
Net realized gain (loss) (140,127) (69,942) 228,469 2,662,634
- -------------------------------------------------------------------------------------
Net change in unrealized
appreciation or
depreciation 627,658 644,731 14,941,247 2,591,115
------------ ------------ ------------- ------------
Net increase in net
assets resulting from
operations 1,844,407 1,948,445 15,815,850 5,781,180
- -------------------------------------------------------------------------------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income (1,367,579) (1,463,333) (404,500) (407,257)
- -------------------------------------------------------------------------------------
Distributions from net
realized gain -- -- (2,680,566) (1,170,863)
- -------------------------------------------------------------------------------------
CAPITAL STOCK
TRANSACTIONS
Net increase (decrease)
in net assets resulting
from
capital stock
transactions - Note 2 727,031 (1,670) 8,415,516 15,468,927
- -------------------------------------------------------------------------------------
NET ASSETS
Total increase 1,203,859 483,442 21,146,300 19,671,987
- -------------------------------------------------------------------------------------
Beginning of period 23,719,020 23,235,578 82,257,448 62,585,461
------------ ------------ ------------- ------------
End of period $ 24,922,879 $ 23,719,020 $ 103,403,748 $ 82,257,448
------------ ------------ ------------- ------------
------------ ------------ ------------- ------------
Undistributed net
investment income $ 1,337,809 $ 1,356,173 $ 576,688 $ 390,416
</TABLE>
See accompanying Notes to Financial Statements.
84
<PAGE>
PANORAMA SERIES FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997 (CONTINUED)
<TABLE>
<CAPTION>
LIFESPAN
DIVERSIFIED LIFESPAN
INCOME BALANCED
PORTFOLIO PORTFOLIO
1998 1997 1998 1997
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 2,160,036 $ 1,675,773 $ 2,627,566 $ 2,045,313
- ------------------------------------------------------------------------------------
Net realized gain (loss) 570,917 298,037 (948,884) 2,515,126
- ------------------------------------------------------------------------------------
Net change in unrealized
appreciation or
depreciation (928,198) 1,310,516 2,762,286 2,434,472
------------ ------------ ------------ ------------
Net increase in net
assets resulting from
operations 1,802,755 3,284,326 4,440,968 6,994,911
- ------------------------------------------------------------------------------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income (1,661,998) (1,155,828) (1,965,841) (1,134,469)
- ------------------------------------------------------------------------------------
Distributions from net
realized gain (294,680) (41,610) (2,467,048) (612,613)
- ------------------------------------------------------------------------------------
CAPITAL STOCK
TRANSACTIONS
Net increase (decrease)
in net assets resulting
from
capital stock
transactions - Note 2 9,717,189 6,754,828 17,172,548 12,108,631
- ------------------------------------------------------------------------------------
NET ASSETS
Total increase 9,563,266 8,841,716 17,180,627 17,356,460
- ------------------------------------------------------------------------------------
Beginning of period 34,115,815 25,274,099 68,692,783 51,336,323
------------ ------------ ------------ ------------
End of period $ 43,679,081 $ 34,115,815 $ 85,873,410 $ 68,692,783
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net
investment income $ 2,150,194 $ 1,650,130 $ 2,595,467 $ 1,955,234
</TABLE>
<TABLE>
<CAPTION>
LIFESPAN
CAPITAL
APPRECIATION
PORTFOLIO
1998 1997
<S> <C> <C>
- ------------------------------------------------------
OPERATIONS
Net investment income $ 1,606,354 $ 1,214,368
- ------------------------------------------------------
Net realized gain (loss) (1,177,781) 2,533,295
- ------------------------------------------------------
Net change in unrealized
appreciation or
depreciation 3,371,596 2,665,698
------------ ------------
Net increase in net
assets resulting from
operations 3,800,169 6,413,361
- ------------------------------------------------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net
investment income (1,183,734) (402,394)
- ------------------------------------------------------
Distributions from net
realized gain (2,498,475) (1,024,277)
- ------------------------------------------------------
CAPITAL STOCK
TRANSACTIONS
Net increase (decrease)
in net assets resulting
from
capital stock
transactions - Note 2 11,351,711 14,398,598
- ------------------------------------------------------
NET ASSETS
Total increase 11,469,671 19,385,288
- ------------------------------------------------------
Beginning of period 61,379,482 41,994,194
------------ ------------
End of period $ 72,849,153 $ 61,379,482
------------ ------------
------------ ------------
Undistributed net
investment income $ 1,570,493 $ 1,170,826
</TABLE>
See accompanying Notes to Financial Statements.
85
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1998 1997 1996(1) 1995 1994
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of
period $2.00 $1.91 $1.75 $1.51 $1.65
- ----------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .06 .07 .07 .07 .06
Net realized and unrealized
gain (loss) .14 .25 .11 .30 (.09)
- ----------------------------------------------------------------------------------------------
Total income (loss) from
investment operations .20 .32 .18 .37 (.03)
- ----------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.07) (.07) (.01) (.07) (.06)
Distributions from net
realized gain (.22) (.16) (.01) (.06) (.05)
- ----------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (.29) (.23) (.02) (.13) (.11)
- ----------------------------------------------------------------------------------------------
Net asset value, end of period $1.91 $2.00 $1.91 $1.75 $1.51
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
- ----------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE(2) 10.90% 18.81% 10.14% 24.66% (1.97)%
- ----------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
millions) $1,344 $1,279 $1,122 $994 $742
- ----------------------------------------------------------------------------------------------
Average net assets (in
millions) $1,299 $1,208 $1,058 $864(3) $687(3)
- ----------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 3.30% 3.57% 4.12% 4.48% 4.21%
Expenses 0.55% 0.55% 0.55% 0.59% 0.56%
- ----------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 92.5% 103.5% 104.3% 62.3% 88.3%
</TABLE>
1. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor to the
Fund.
2. Assumes a 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. This information is not covered by the auditors' opinion.
4. 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 December 31, 1998 were $1,069,202,081 and $1,113,803,553, respectively.
See accompanying Notes to Financial Statements.
86
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1998 1997 1996(1) 1995 1994
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of
period $3.45 $2.98 $2.53 $1.97 $2.08
- -------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .04 .04 .04 .04 .03
Net realized and unrealized
gain (loss) .26 .69 .43 .71 (.04)
- -------------------------------------------------------------------------------------------------
Total income (loss) from
investment operations .30 .73 .47 .75 (.01)
- -------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.04) (.03) (.01) (.04) (.03)
Distributions from net
realized gain (.44) (.23) (.01) (.15) (.07)
- -------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (.48) (.26) (.02) (.19) (.10)
- -------------------------------------------------------------------------------------------------
Net asset value, end of period $3.27 $3.45 $2.98 $2.53 $1.97
----- -------- -------- -------- --------
----- -------- -------- -------- --------
- -------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE(2) 8.43% 26.37% 18.87% 38.06% (0.51)%
- -------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $ 918,871 $831,371 $586,222 $405,935 $230,195
- -------------------------------------------------------------------------------------------------
Average net assets (in
thousands) $ 877,874 $721,555 $494,281 $303,193(3) $198,879(3)
- -------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.16% 1.38% 1.63% 2.01% 1.87%
Expenses 0.53% 0.54% 0.58% 0.66% 0.67%
- -------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 97.8% 91.8% 82.5% 69.3% 97.3%
</TABLE>
1. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor to the
Fund.
2. Assumes a 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 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. 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 December 31, 1998 were $853,990,249 and $769,342,848, respectively.
See accompanying Notes to Financial Statements.
87
<PAGE>
PANORAMA SERIES FUND, INC. - GOVERNMENT SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1998 1997 1996(1) 1995 1994
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of
period $1.11 $1.09 $1.07 $0.95 $1.06
- ----------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .06 .07 .07 .06 .06
Net realized and unrealized
gain (loss) .03 .02 (.05) .12 (.11)
- ----------------------------------------------------------------------------------------------
Total income (loss) from
investment operations .09 .09 .02 .18 (.05)
- ----------------------------------------------------------------------------------------------
Dividends to shareholders:
Dividends from net investment
income (.07) (.07) --(2) (.06) (.06)
- ----------------------------------------------------------------------------------------------
Total dividends to
shareholders (.07) (.07) -- (.06) (.06)
- ----------------------------------------------------------------------------------------------
Net asset value, end of period $1.13 $1.11 $1.09 $1.07 $0.95
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
- ----------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE(3) 8.14% 8.82% 1.93% 18.91% (4.89)%
- ----------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $ 24,923 $ 23,719 $ 23,236 $ 24,309 $ 18,784
- ----------------------------------------------------------------------------------------------
Average net assets (in
thousands) $ 24,044 $ 23,034 $ 23,880 $ 23,157(4) $ 17,589(4)
- ----------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.64% 5.96% 6.11% 6.08% 6.04%
Expenses 0.68% 0.67% 0.62% 0.71% 0.85%
- ----------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 43.1% 0.0% 6.0% 54.7% 102.3%
</TABLE>
1. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor to the
Fund.
2. Less than $0.005 per share.
3. Assumes a 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 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. This information is not covered by the auditors' opinion.
5. 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 December 31, 1998 were $9,974,241 and $8,600,233, respectively.
See accompanying Notes to Financial Statements.
88
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1998 1997 1996(1) 1995 1994
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of
period $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 .25 .09 .13 .08 .03
- -------------------------------------------------------------------------------------------------
Total income from investment
operations .26 .10 .15 .11 .02
- -------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.01) (.01) (.01) (.04) --
Distributions from net
realized gain (.04) (.02) -- (.01) (.02)
- -------------------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (.05) (.03) (.01) (.05) (.02)
- -------------------------------------------------------------------------------------------------
Net asset value, end of period $1.57 $1.36 $1.29 $1.15 $1.09
----- --- --- --- ---
----- --- --- --- ---
- -------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE(2) 19.40% 8.11% 13.26% 10.30% 1.44%
- -------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $ 103,404 $ 82,257 $ 62,585 $ 45,775 $ 31,603
- -------------------------------------------------------------------------------------------------
Average net assets (in
thousands) $ 94,651 $ 73,318 $ 56,893 $ 37,474(3) $ 29,133(3)
- -------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.68% 0.72% 0.76% 1.61% (1.85)%
Expenses 1.09% 1.12% 1.21% 1.26% 1.28%
- -------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 47.5% 48.6% 53.7% 85.1% 76.5%
</TABLE>
1. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor to the
Fund.
2. Assumes a 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 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. 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 December 31, 1998 were $48,204,329 and $42,767,249, respectively.
See accompanying Notes to Financial Statements.
89
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1998 1997 1996(2) 1995(1)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of
period $1.18 $1.10 $1.04 $1.00
- ------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .06 .06 .06 .02
Net realized and unrealized gain -- .07 .01 .04
- ------------------------------------------------------------------------------------
Total income from investment
operations .06 .13 .07 .06
- ------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.06) (.05) (.01) (.02)
Distributions from net realized
gain (.01) --(3) -- --
- ------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.07) (.05) (.01) (.02)
- ------------------------------------------------------------------------------------
Net asset value, end of period $1.17 $1.18 $1.10 $1.04
-------- ------- -------- -----
-------- ------- -------- -----
- ------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(4) 4.88% 12.51% 6.93% 5.69%
- ------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $ 43,679 $34,116 $ 25,274 $ 21,176
- ------------------------------------------------------------------------------------
Average net assets (in thousands) $ 38,422 $28,503 $ 22,854 $ 20,364(5)
- ------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.62% 5.88% 5.84% 5.11%(6)
Expenses 0.84% 0.86%(7) 1.07% 1.50%(6)
- ------------------------------------------------------------------------------------
Portfolio turnover rate(8) 36.2% 34.0% 80.4% 41.2%(6)
</TABLE>
1. For the period from September 1, 1995 (commencement of operations) to
December 31, 1995.
2. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor to the
Fund.
3. Less than $0.005 per share.
4. Assumes a 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.
5. This information is not covered by the auditors' opinion.
6. Annualized.
7. The expense ratio reflects the effect of expenses paid indirectly by the
Fund.
8. 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
December 31, 1998 were $22,010,484 and $11,980,312, respectively.
See accompanying Notes to Financial Statements.
90
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------
1998 1997 1996(2) 1995(1)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of
period $1.28 $1.18 $1.05 $1.00
- ---------------------------------------------------------------------------
Income from investment operations:
Net investment income .04 .04 .03 .01
Net realized and unrealized gain .04 .10 .11 .05
- ---------------------------------------------------------------------------
Total income from investment
operations .08 .14 .14 .06
- ---------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.04) (.03) (.01) (.01)
Distributions from net realized
gain (.04) (.01) -- --
- ---------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.08) (.04) (.01) (.01)
- ---------------------------------------------------------------------------
Net asset value, end of period $1.28 $1.28 $1.18 $1.05
------- ------- ------- -------
------- ------- ------- -------
- ---------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) 6.17% 12.20% 13.38% 6.08%
- ---------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $85,873 $68,693 $51,336 $35,467
- ---------------------------------------------------------------------------
Average net assets (in thousands) $76,384 $59,388 $41,847 $33,925(4)
- ---------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 3.44% 3.44% 3.34% 3.08%(5)
Expenses 0.93% 0.97% 1.17% 1.50%(5)
- ---------------------------------------------------------------------------
Portfolio turnover rate(6) 57.8% 57.3% 69.7% 39.7%(5)
</TABLE>
1. For the period from September 1, 1995 (commencement of operations) to
December 31, 1995.
2. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor to the
Fund.
3. Assumes a 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.
4. This information is not covered by the auditors' opinion.
5. Annualized.
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 December 31, 1998 were $52,860,309 and $39,128,571, respectively.
See accompanying Notes to Financial Statements.
91
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1998 1997 1996(2) 1995(1)
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
Net asset value, beginning of
period $1.35 $1.24 $1.06 $1.00
- ------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .03 .03 .02 .01
Net realized and unrealized
gain .06 .12 .17 .06
- ------------------------------------------------------------------------------------
Total income from investment
operations .09 .15 .19 .07
- ------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income (.03) (.01) (.01) (.01)
Distributions from net
realized gain (.05) (.03) -- --
- ------------------------------------------------------------------------------------
Total dividends and
distributions to shareholders (.08) (.04) (.01) (.01)
- ------------------------------------------------------------------------------------
Net asset value, end of period $1.36 $1.35 $1.24 $1.06
------------- -------- -------- --------
------------- -------- -------- --------
- ------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE(3) 6.49% 12.53% 17.97% 6.65%
- ------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands) $ 72,849 $ 61,379 $ 41,994 $ 26,768
- ------------------------------------------------------------------------------------
Average net assets (in
thousands) $ 66,754 $ 51,473 $ 33,109 $ 25,460(4)
- ------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.41% 2.36% 1.92% 1.73%(5)
Expenses 0.93% 0.99% 1.30% 1.50%(5)
- ------------------------------------------------------------------------------------
Portfolio turnover rate(6) 64.7% 65.8% 70.7% 38.7%(5)
</TABLE>
1. For the period from September 1, 1995 (commencement of operations) to
December 31, 1995.
2. On March 1, 1996, OppenheimerFunds, Inc. became the investment advisor to the
Fund.
3. Assumes a 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.
4. This information is not covered by the auditors' opinion.
5. Annualized.
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 December 31, 1998 were $46,737,573 and $37,811,067, respectively.
See accompanying Notes to Financial Statements.
92
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Total Return 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 maximum total investment return (including both
capital appreciation and income) principally by allocating its assets among
stocks, corporate bonds, U.S. Government securities and money market instruments
according to changing market conditions. 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.
- --------------------------------------------------------------------------------
INVESTMENT 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.
- --------------------------------------------------------------------------------
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 Company intends for the Fund 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. Dividends and distributions to shareholders 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 the 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.
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, 1998, amounts have been reclassified to reflect an increase in
undistributed net investment income of $82,781. Accumulated net realized gain on
investments was decreased by the same amount.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
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.
93
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 1,950 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Sold 69,325,992 $ 127,905,490 71,391,082 $ 135,657,386
Dividends and distributions reinvested 102,703,278 186,919,967 78,007,645 134,173,150
Redeemed (108,494,837) (198,171,110) (95,125,453) (181,397,633)
------------- ------------- ------------- -------------
Net increase 63,534,433 $ 116,654,347 54,273,274 $ 88,432,903
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
As of December 31, 1998, net unrealized appreciation on investments of
$136,560,287 was composed of gross appreciation of $155,294,356, and gross
depreciation of $18,734,069.
- --------------------------------------------------------------------------------
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. The annual fees are 0.625% of the average
daily net assets up to $600 million and 0.45% of the average daily net assets
over $600 million. The Fund's management fee for the year ended December 31,
1998 was 0.53% of the average annual net assets for the Fund.
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.
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also buy
and sell financial futures. The Fund may 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 the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates 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.
94
<PAGE>
PANORAMA SERIES FUND, INC. - TOTAL RETURN PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS (CONTINUED)
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 or payable for the
daily mark to market for variation margin.
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, 1998, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATE CONTRACTS DECEMBER 31, 1998 APPRECIATION
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
Standard & Poors 500 Index 3/99 539 $167,831,125 $10,183,557
</TABLE>
- --------------------------------------------------------------------------------
6. ILLIQUID AND RESTRICTED SECURITIES
As of December 31, 1998, 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 Directors as reflecting fair value. 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
10% 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 limit. The aggregate value of illiquid or restricted securities
subject to this limitation as of December 31, 1998 was $16,932,703, which
represents 1.26% of the Fund's net assets.
95
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Growth 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
primarily in common stocks with low price-earnings ratios and
better-than-anticipated earnings. Realization of current income is a secondary
consideration. 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.
- --------------------------------------------------------------------------------
INVESTMENT 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.
- --------------------------------------------------------------------------------
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 Company intends for the Fund 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. Dividends and distributions to shareholders 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. The character of the 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.
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, 1998, amounts have been reclassified to reflect a decrease in
undistributed net investment income of $15,246. Accumulated net realized gain on
investments was increased by the same amount.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend 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.
96
<PAGE>
PANORAMA SERIES FUND, INC. - GROWTH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK
The Fund has authorized 950 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Sold 47,037,578 $ 152,546,029 52,419,265 $ 167,124,059
Dividends and distributions reinvested 35,262,461 117,423,995 18,597,005 52,629,524
Redeemed (42,207,549) (132,888,480) (26,936,806) (85,923,718)
------------- ------------- ------------- -------------
Net increase 40,092,490 $ 137,081,544 44,079,464 $ 133,829,865
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
As of December 31, 1998, net unrealized appreciation on investments of
$184,260,273 was composed of gross appreciation of $201,310,949, and gross
depreciation of $17,050,676.
- --------------------------------------------------------------------------------
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. The annual fees are 0.625% of the average
daily net assets up to the first $300 million, 0.50% of the next $100 million
and 0.45% of average daily net assets over $400 million. The Fund's management
fee for the year ended December 31, 1998 was 0.52% of the average annual net
assets for the Fund.
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.
97
<PAGE>
PANORAMA SERIES FUND, INC. - GOVERNMENT SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Government Securities 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 a high level of current income with a high
degree of safety of principal by investing primarily in U.S. Government
securities and U.S. Government related securities. 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.
- --------------------------------------------------------------------------------
INVESTMENT 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.
- --------------------------------------------------------------------------------
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 Company intends for the Fund 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, 1998, the Fund had available for federal income tax purposes an
unused capital loss carryover of approximately $526,000, which expires between
2002 and 2006.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders 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. The character of the
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.
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, 1998, amounts have been reclassified to reflect a decrease in
undistributed net investment income of $7,661. Accumulated net realized loss on
investments was decreased by the same amount.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date). Discount on securities purchased is amortized
over the life of the respective securities, in accordance with federal income
tax requirements. 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.
98
<PAGE>
PANORAMA SERIES FUND, INC. - GOVERNMENT SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Sold 4,843,177 $ 5,379,324 2,834,687 $ 3,050,414
Dividends reinvested 1,290,169 1,367,579 1,434,641 1,463,333
Redeemed (5,441,013) (6,019,872) (4,214,703) (4,515,417)
------------- ------------- ------------- -------------
Net increase (decrease) 692,333 $ 727,031 54,625 $ (1,670)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
As of December 31, 1998, net unrealized appreciation on investments of
$1,265,885 was composed of gross appreciation of $1,303,307, and gross
depreciation of $37,422.
- --------------------------------------------------------------------------------
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. The annual fees are 0.525% of the average
daily net assets up to $300 million, 0.50% of the next $100 million and 0.45% of
average daily net assets over $400 million. The Fund's management fee for the
year ended December 31, 1998 was 0.52% of the average annual net assets for the
Fund.
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.
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in 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 the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates 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.
99
<PAGE>
PANORAMA SERIES FUND, INC. - GOVERNMENT SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS (CONTINUED)
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 or payable for the
daily mark to market for variation margin.
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, 1998, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATE CONTRACTS DECEMBER 31, 1998 DEPRECIATION
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
U.S. Treasury Bonds, 20 yr. 3/99 14 $1,788,938 $25,811
</TABLE>
100
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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
primarily in equity securities of companies wherever located, the primary stock
market of which is outside the United States. The Funds 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.
- --------------------------------------------------------------------------------
INVESTMENT 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. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward 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 Company intends for the Fund 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. Dividends and distributions to shareholders 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 the 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.
101
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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, 1998, amounts have been reclassified to reflect a decrease in
undistributed net investment income of $55,362. Accumulated net realized gain on
investments was increased by the same amount.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
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>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Sold 13,905,772 $ 20,648,894 17,133,067 $ 22,813,653
Dividends and distributions reinvested 2,070,514 3,085,066 1,293,541 1,578,120
Redeemed (10,459,749) (15,318,444) (6,693,102) (8,922,846)
------------- ------------- ------------- -------------
Net increase 5,516,537 $ 8,415,516 11,733,506 $ 15,468,927
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
As of December 31, 1998, net unrealized appreciation on investments of
$25,895,031 was composed of gross appreciation of $29,346,083, and gross
depreciation of $3,451,052.
- --------------------------------------------------------------------------------
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. The annual fees are 1.00% of the average daily
net assets up to $250 million and 0.90% of average daily net assets over $250
million. The Fund's management fee for the year ended December 31, 1998 was
1.00% of the average annual net assets for the Fund.
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.
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.
102
<PAGE>
PANORAMA SERIES FUND, INC. - INTERNATIONAL EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency risks. They
may also be used to tactically shift portfolio currency risk. The Fund generally
enters into forward contracts as a hedge upon the purchase or sale of a security
denominated in a foreign currency. In addition, the Fund may enter into such
contracts as a hedge against changes in foreign currency exchange rates on
portfolio positions.
Forward contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. The Fund will realize a gain or loss upon
the closing or settlement of the forward transaction.
Securities held in designated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward contracts is reported in the
Statement of Assets and Liabilities. Realized gains and losses are reported with
all other foreign currency gains and losses in the Fund's Statement of
Operations.
Risks include the potential inability of the counterparty to meet the terms of
the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
- --------------------------------------------------------------------------------
6. ILLIQUID AND RESTRICTED SECURITIES
As of December 31, 1998, 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 Directors as reflecting fair value. 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
10% 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 limit. The aggregate value of illiquid or restricted securities
subject to this limitation as of December 31, 1998 was $143,684, which
represents 0.14% of the Fund's net assets.
103
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
LifeSpan Diversified Income 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 high current income, with opportunities
for capital appreciation by investing in a strategically allocated portfolio
consisting primarily of bonds. 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.
- --------------------------------------------------------------------------------
INVESTMENT 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.
- --------------------------------------------------------------------------------
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 Company intends for the Fund 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. Dividends and distributions to shareholders 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 the 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.
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, 1998, amounts have been reclassified to reflect an increase in
undistributed net investment income of $2,026. Accumulated net realized gain on
investments was decreased by the same amount.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
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. Dividends-in-kind are recognized as income
on the ex-dividend date, at the current market value of the underlying security.
Interest on payment-in-kind debt instruments is accrued as income at the coupon
rate, and a market adjustment is made periodically.
104
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN DIVERSIFIED INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 250 million shares of $0.001 par value of capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Sold 8,117,360 $ 9,373,119 5,816,319 $ 6,566,303
Dividends and distributions reinvested 1,701,459 1,956,678 1,129,658 1,197,438
Redeemed (1,391,118) (1,612,608) (905,515) (1,008,913)
------------- ------------- ------------- -------------
Net increase 8,427,701 $ 9,717,189 6,040,462 $ 6,754,828
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
As of December 31, 1998, net unrealized appreciation on investments of
$1,404,240 was composed of gross appreciation of $2,485,492, and gross
depreciation of $1,081,252.
- --------------------------------------------------------------------------------
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. The annual fees are 0.75% of the average
annual net assets up to $250 million and 0.65% on such assets over of $250
million. The Fund's management fee for the year ended December 31, 1998 was
0.75% of the average annual net assets for the Fund.
The Manager has a sub-advisory agreement with BEA Associates (the Sub-Advisor)
to assist in the selection of portfolio investments for the components of the
Fund. For these services, the Manager pays BEA Associates negotiated fees.
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.
- --------------------------------------------------------------------------------
5. ILLIQUID AND RESTRICTED SECURITIES
As of December 31, 1998, 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 Directors as reflecting fair value. 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
10% 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 limit. The aggregate value of illiquid or restricted securities
subject to this limitation as of December 31, 1998 was $1,358,640, which
represents 3.11% of the Fund's net assets.
105
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
LifeSpan Balanced 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 a blend of capital appreciation and income by
investing in a strategically allocated portfolio of stocks and bonds with a
slightly stronger emphasis on stocks. 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.
- --------------------------------------------------------------------------------
INVESTMENT 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. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward 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 Company intends for the Fund 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, 1998, the Fund had available for federal income tax purposes an
unused capital loss carryover of approximately $938,000, expiring in 2006.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
106
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 the 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. 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,
1998, amounts have been reclassified to reflect a decrease in paid-in capital of
$11,717, a decrease in undistributed net investment income of $21,492, and a
decrease in accumulated net realized loss on investments of $33,209.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
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 250 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Sold 14,229,457 $ 17,733,908 11,659,128 $ 14,199,763
Dividends and distributions reinvested 3,436,348 4,432,889 1,559,895 1,747,083
Redeemed (4,001,987) (4,994,249) (3,199,617) (3,838,215)
------------- ------------- ------------- -------------
Net increase 13,663,818 $ 17,172,548 10,019,406 $ 12,108,631
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
As of December 31, 1998, net unrealized appreciation on investments of
$10,233,792 was composed of gross appreciation of $12,635,289, and gross
depreciation of $2,401,497.
- --------------------------------------------------------------------------------
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. The annual fees are 0.85% of the average
annual net assets up to $250 million and 0.75% of such assets over $250 million.
The Fund's management fee for the year ended December 31, 1998 was 0.85% of the
average annual net assets for the Fund.
The Manager has entered into sub-advisory agreements with three Sub-Advisors to
assist in the selection of portfolio investments for the components of the Fund.
For those services, the Manager pays Babson-Stewart Ivory International, BEA
Associates and Pilgrim Baxter & Associates (the Sub-Advisors) negotiated fees.
107
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN BALANCED PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED) 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.
- --------------------------------------------------------------------------------
5. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency risks. They
may also be used to tactically shift portfolio currency risk. The Fund generally
enters into forward contracts as a hedge upon the purchase or sale of a security
denominated in a foreign currency. In addition, the Fund may enter into such
contracts as a hedge against changes in foreign currency exchange rates on
portfolio positions.
Forward contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. The Fund will realize a gain or loss upon
the closing or settlement of the forward transaction.
Securities held in designated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward contracts is reported in the
Statement of Assets and Liabilities. Realized gains and losses are reported with
all other foreign currency gains and losses in the Fund's Statement of
Operations.
Risks include the potential inability of the counterparty to meet the terms of
the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
- --------------------------------------------------------------------------------
6. ILLIQUID AND RESTRICTED SECURITIES
As of December 31, 1998, 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 Directors as reflecting fair value. 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
10% 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 limit. The aggregate value of illiquid or restricted securities
subject to this limitation as of December 31, 1998 was $2,294,139, which
represents 2.67% of the Fund's net assets.
- --------------------------------------------------------------------------------
7. OTHER MATTERS
Effective January 4, 1999, BEA Associates (Sub-Advisor for the Fund) changed its
name to Credit Suisse Asset Management.
108
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
LifeSpan Capital Appreciation 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 capital
appreciation by investing in a strategically allocated portfolio consisting
primarily of stocks. Current income is not a primary consideration. 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.
- --------------------------------------------------------------------------------
INVESTMENT 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. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward 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 Company intends for the Fund 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, 1998, the Fund had available for federal income tax purposes an
unused capital loss carryover of approximately $1,169,000, expiring in 2006.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders 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 the 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.
109
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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, 1998, amounts have been reclassified to reflect a decrease in
paid-in capital of $11,251, a decrease in undistributed net investment income of
$22,953, and a decrease in accumulated net realized loss on investments of
$34,204.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend 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 250 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Sold 8,700,602 $ 11,570,097 11,969,510 $ 15,271,181
Dividends and distributions reinvested 2,668,268 3,682,209 1,229,889 1,426,671
Redeemed (2,957,241) (3,900,595) (1,803,689) (2,299,254)
------------- ------------- ------------- -------------
Net increase 8,411,629 $ 11,351,711 11,395,710 $ 14,398,598
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
As of December 31, 1998, net unrealized appreciation on investments of
$11,143,852 was composed of gross appreciation of $13,474,030, and gross
depreciation of $2,330,178.
- --------------------------------------------------------------------------------
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. The annual fees are 0.85% of the average
annual net assets up to $250 million and 0.75% on such assets over $250 million.
The Fund's management fee for the year ended December 31, 1998 was 0.85% of the
average annual net assets for the Fund.
The Manager has sub-advisory agreements with three Sub-Advisors to assist in the
selection of portfolio investments for the components of the Fund. For these
services, the Manager pays Babson-Stewart Ivory International, BEA Associates
and Pilgrim Baxter & Associates (the Sub-Advisors) negotiated fees.
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.
110
<PAGE>
PANORAMA SERIES FUND, INC. - LIFESPAN CAPITAL APPRECIATION PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency risks. They
may also be used to tactically shift portfolio currency risk. The Fund generally
enters into forward contracts as a hedge upon the purchase or sale of a security
denominated in a foreign currency. In addition, the Fund may enter into such
contracts as a hedge against changes in foreign currency exchange rates on
portfolio positions.
Forward contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. The Fund will realize a gain or loss upon
the closing or settlement of the forward transaction.
Securities held in designated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward contracts is reported in the
Statement of Assets and Liabilities. Realized gains and losses are reported with
all other foreign currency gains and losses in the Fund's Statement of
Operations.
Risks include the potential inability of the counterparty to meet the terms of
the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
- --------------------------------------------------------------------------------
6. ILLIQUID AND RESTRICTED SECURITIES
As of December 31, 1998, 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 Directors as reflecting fair value. 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
10% 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 limit. The aggregate value of illiquid or restricted securities
subject to this limitation as of December 31, 1998 was $1,271,348, which
represents 1.75% of the Fund's net assets.
- --------------------------------------------------------------------------------
7. OTHER MATTERS
Effective January 4, 1999 BEA Associates (Sub-Advisor for the Fund) changed its
name to Credit Suisse Asset Management.
<PAGE>
Appendix A
- -------------------------------------------------------------------------------
RATINGS DEFINITIONS
- -------------------------------------------------------------------------------
Below are summaries of the rating definitions used by the nationally-recognized
rating agencies listed below. Those ratings represent the opinion of the agency
as to the credit quality of issues that they rate. The summaries below are based
upon publicly-available information provided by the rating organizations.
Moody's Investors Service, Inc.
- -------------------------------------------------------------------------------
Long-Term (Taxable) Bond Ratings
Aaa: Bonds rated Aaa are judged to be the best quality. They carry the smallest
degree of investment risk. Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, the changes that can be expected are
most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group, they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as with Aaa securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than those of Aaa securities.
A: Bonds rated A possess many favorable investment attributes and are to be
considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa: Bonds rated Baa are considered medium grade obligations; that is, they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and have speculative
characteristics as well.
Ba: Bonds rated Ba are judged to have speculative elements. Their future cannot
be considered well-assured. Often the protection of interest and principal
payments may be very moderate and not well safeguarded during both good and bad
times over the future. Uncertainty of position characterizes bonds in this
class.
B: Bonds rated B generally lack characteristics of desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
Caa: Bonds rated Caa are of poor standing and may be in default or there may
be present elements of danger with respect to principal or interest.
Ca: Bonds rated Ca represent obligations which are speculative in a high
degree and are often in default or have other marked shortcomings.
C: Bonds rated C are the lowest class of rated bonds and can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through Caa. The modifier "1" indicates that the
obligation ranks in the higher end of its category; the modifier "2" indicates a
mid-range ranking and the modifier "3" indicates a ranking in the lower end of
the category.
Short-Term Ratings - Taxable Debt
These ratings apply to the ability of issuers to repay punctually senior debt
obligations having an original maturity not exceeding one year:
Prime-1: Issuer has a superior ability for repayment of senior short-term debt
obligations.
Prime-2: Issuer has a strong ability for repayment of senior short-term debt
obligations. Earnings trends and coverage, while sound, may be subject to
variation. Capitalization characteristics, while appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Prime-3: Issuer has an acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market compositions may
be more pronounced. Variability in earnings and profitability may result in
changes in the level of debt protection measurements and may require relatively
high financial leverage. Adequate alternate liquidity is maintained.
Not Prime: Issuer does not fall within any Prime rating category.
Standard & Poor's Ratings Services
- -------------------------------------------------------------------------------
Long-Term Credit Ratings
AAA: Bonds rated "AAA" have the highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.
AA: Bonds rated "AA" differ from the highest rated obligations only in small
degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A: Bonds rated "A" are somewhat more susceptible to adverse effects of changes
in circumstances and economic conditions than obligations in higher-rated
categories. However, the obligor's capacity to meet its financial commitment on
the obligation is still strong.
BBB: Bonds rated BBB exhibit adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation.
Bonds rated BB, B, CCC, CC and C are regarded as having significant speculative
characteristics. BB indicates the least degree of speculation and C the highest.
While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB: Bonds rated BB are less vulnerable to nonpayment than other speculative
issues. However, these face major uncertainties or exposure to adverse business,
financial, or economic conditions which could lead to the obligor's inadequate
capacity to meet its financial commitment on the obligation.
B: A bond rated B is more vulnerable to nonpayment than an obligation rated BB,
but the obligor currently has the capacity to meet its financial commitment on
the obligation.
CCC: A bond rated CCC is currently vulnerable to nonpayment, and is dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. In the event of adverse
business, financial or economic conditions, the obligor is not likely to have
the capacity to meet its financial commitment on the obligation.
CC: An obligation rated CC is currently highly vulnerable to nonpayment.
C: The C rating may used where a bankruptcy petition has been filed or similar
action has been taken, but payments on this obligation are being continued.
D: Bonds rated D are in default. Payments on the obligation are not being
made on the date due.
The ratings from AA to CCC may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the major rating categories. The
"r" symbol is attached to the ratings of instruments with significant noncredit
risks.
Short-Term Issue Credit Ratings
A-1: Rated in the highest category. The obligor's capacity to meet its financial
commitment on the obligation is strong. Within this category, a plus (+) sign
designation indicates the issuer's capacity to meet its financial obligation is
very strong.
A-2: Obligation is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than obligations in higher rating
categories. However, the obligor's capacity to meet its financial commitment on
the obligation is satisfactory.
A-3: Exhibits adequate protection parameters. However, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity of the obligor to meet its financial commitment on the obligation.
B: Regarded as having significant speculative characteristics. The obligor
currently has the capacity to meet its financial commitment on the obligation.
However, it faces major ongoing uncertainties which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.
C: Currently vulnerable to nonpayment and is dependent upon favorable
business, financial, and economic conditions for the obligor to meet its
financial commitment on the obligation.
D: In payment default. Payments on the obligation have not been made on the
due date. The rating may also be used if a bankruptcy petition has been filed
or similar actions jeopardize payments on the obligation.
- -------------------------------------------------------------------------------
Fitch IBCA, Inc.
International Long-Term Credit Ratings
Investment Grade:
AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.
A: High Credit Quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.
BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and
in economic conditions are more likely to impair this capacity. This is the
lowest investment-grade category.
Speculative Grade:
BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met.
B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.
CCC, CC C: High Default Risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of
some kind appears probable. "C" ratings signal imminent default.
DDD, DD, and D: Default. Securities are not meeting current obligations and
are extremely speculative. "DDD" designates the highest potential for
recovery of amounts outstanding on any securities involved.
Plus (+) and minus (-) signs may be appended to a rating symbol to denote
relative status within the rating category. Plus and minus signs are not added
to the "AAA" category or to categories below "CCC."
International Short-Term Credit Ratings
F1: Highest credit quality. Strongest capacity for timely payment. May have an
added "+" to denote exceptionally strong credit feature.
F2: Good credit quality. A satisfactory capacity for timely payment, but the
margin of safety is not as great as in higher ratings.
F3: Fair credit quality. Capacity for timely payment is adequate. However,
near-term adverse changes could result in a reduction to non-investment grade.
B: Speculative. Minimal capacity for timely payment, plus vulnerability to
near-term adverse changes in financial and economic conditions.
C: High default risk. Default is a real possibility, Capacity for
meeting financial commitments is solely reliant upon a sustained, favorable
business and economic environment.
D: Default. Denotes actual or imminent payment default.
Duff & Phelps Credit Rating Co. Ratings
Long-Term Debt and Preferred Stock
AAA: Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA+, AA, AA-: High credit quality. Protection factors are strong. Risk is modest
but may vary slightly from time to time because of economic conditions.
A+, A & A-: Protection factors are average but adequate. However, risk factors
are more variable in periods of greater economic stress.
BBB+, BBB & BBB-: Below average protection factors but still considered
sufficient for prudent investment. Considerable variability in risk during
economic cycles.
BB+, BB & BB-: Below investment grade but deemed likely to meet obligations when
due. Present or prospective financial protection factors fluctuate according to
industry conditions. Overall quality may move up or down frequently within the
category.
B+, B & B-: Below investment grade and possessing risk that obligations will not
be met when due. Financial protection factors will fluctuate widely according to
economic cycles, industry conditions and/or company fortunes. Potential exists
for frequent changes in the rating within this category or into a higher of
lower rating grade.
CCC: Well below investment-grade securities. Considerable uncertainty exists as
to timely payment of principal, interest or preferred dividends. Protection
factors are narrow and risk can be substantial with unfavorable
economic/industry conditions, and/or with unfavorable company developments.
DD: Defaulted debt obligations. Issuer failed to meet scheduled principal
and/or interest payments.
DP: Preferred stock with dividend arrearages.
Short-Term Debt:
High Grade:
D-1+: Highest certainty of timely payment. Safety is just below risk-free
U.S. Treasury short-term debt.
D-1: Very high certainty of timely payment. Risk factors are minor.
D-1-: High certainty of timely payment. Risk factors are very small.
Good Grade:
D-2: Good certainty of timely payment. Risk factors are small.
Satisfactory Grade:
D-3: Satisfactory liquidity and other protection factors qualify issues as to
investment grade. Risk factors are larger and subject to more variation.
Nevertheless, timely payment is expected.
Non-Investment Grade:
D-4: Speculative investment characteristics. Liquidity is not sufficient to
insure against disruption in debt service.
Default:
D-5: Issuer failed to meet scheduled principal and/or interest payments.
<PAGE>
Appendix B
- -------------------------------------------------------------------------------
Industry Classifications
- -------------------------------------------------------------------------------
Aerospace/Defense Food and Drug Retailers
Air Transportation Gas Utilities
Asset-Backed Health Care/Drugs
Auto Parts and Equipment Health Care/Supplies & Services
Automotive Homebuilders/Real Estate
Bank Holding Companies Hotel/Gaming
Banks Industrial Services
Beverages Information Technology
Broadcasting Insurance
Broker-Dealers Leasing & Factoring
Building Materials Leisure
Cable Television Manufacturing
Chemicals Metals/Mining
Commercial Finance Nondurable Household Goods
Communication Equipment Office Equipment
Computer Hardware Oil - Domestic
Computer Software Oil - International
Conglomerates Paper
Consumer Finance Photography
Consumer Services Publishing
Containers Railroads
Convenience Stores Restaurants
Department Stores Savings & Loans
Diversified Financial Shipping
Diversified Media Special Purpose Financial
Drug Wholesalers Specialty Printing
Durable Household Goods Specialty Retailing
Education Steel
Electric Utilities Telecommunications - Technology
Electrical Equipment Telephone - Utility
Electronics Textile/Apparel
Energy Services & Producers Tobacco
Entertainment/Film Trucks and Parts
Environmental Wireless Services
Food
- ---------------------
*For purposes of a Portfolio's investment policy not to concentrate in
securities of issuers in the same industry, utilities are divided into
"industries" according to their services (e.g., gas utilities, gas
transmission utilities, electric utilities and telephone utilities are each
considered a separate industry).
- -------------------------------------------------------------------------------
<PAGE>
Panorama Series Fund, Inc.
- -------------------------------------------------------------------------------
Investment Advisor
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-888-470-0861
Custodian Bank
The Bank of New York
90 Washington Street
New York, NY
Independent Auditors
Deloitte & Touche LLP
555 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Myer, Swanson, Adams & Wolf, P.C.
1600 Broadway
Denver, Colorado 80202
PX.1099
- --------
1. Mr. Fossel is not a Trustee of Centennial New York Tax Exempt Trust or
Managing General Partner of Centennial America Fund, L.P. Mr. Armstrong is not a
Trustee, Director or Managing General Partner of Centennial New York Tax Exempt
Trust, Centennial California Tax Exempt Trust, Centennial America Fund, L.P.,
Centennial Money Market Trust, Centennial Government Trust, Centennial Tax
Exempt Trust, Oppenheimer Main Street Funds, Inc., Oppenheimer Cash Reserves and
Oppenheimer Champion Income Fund.
