Annual Report December 31, 1999
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Oppenheimer
International Growth
Fund/VA
A Series of Panorama Series Fund, Inc.
[logo]
Oppenheinmer Funds(R)
The Right Way to Invest
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Panorama Series Fund, Inc.--Oppenheimer International Growth Fund/VA
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Objective
Panorama Series Fund, Inc.--Oppenheimer International Growth Fund/VA seeks
long-term growth of capital by investing primarily in equity securities of
companies worldwide whose primary stock market is located outside the United
States.
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Narrative by George Evans, Portfolio Manager
Over the past year, Oppenheimer International Growth Fund/VA delivered a
substantially stronger total return than in the prior fiscal year, reflecting
the general recovery of the world's equity markets and the Fund's emphasis on
companies providing various types of new technology. In particular, we attribute
the Fund's strong results to a change occurring around the globe that, in our
opinion, could have quite a positive long-term impact.
The most obvious evolution has occurred in Europe, which officially
launched its new currency, the Euro, on January 1, 1999. This new currency got
off to a rough start, and that slowed Europe's recovery from the problems that
began in mid-1998. But, the expectation remains that a single currency will
likely take some of the volatility out of the core European markets.
What's more, Europe appears to have a new attitude toward shareholder
value. Many companies are looking to the stock markets to raise cash, so they're
taking the idea of shareholder value more seriously. The major European
governments have become more diligent about curbing inflationary pressures. In
early November, the European Central Bank--with the approval of France, Germany
and the nine other member states--raised interest rates. The European equity
market is now only second in size to that of the United States.
The economic changes in Asia and Latin America have been less dramatic.
To date Asia's attempts at change have been more talk than action, but Japan is
struggling to make fundamental changes that would set a good example for the
rest of the region. There are still major problems, but Japan at least is
finally focused on the issues that really matter. In our opinion, Latin America
offers the best valuations in the world right now. It's relatively stable
compared to Asia, and if the political election cycle that's just beginning goes
well, we could see even more progress throughout the region.
We continued to look for companies with "the goods": good business,
good company fundamentals and long-term earnings growth, and good price. In the
first half of the fiscal year, we found more of these opportunities in Latin
America; in the second half, in Europe and Japan. Despite our skepticism about
Asia, we recognized that Japan was rallying and found a few investments that
satisfied our bottom-up criteria.
One of the Fund's largest holdings was Altran Technologies SA (France),
an engineering and consulting services enterprise we have owned for some time.
We believe this company is well-positioned to benefit as restructuring continues
in Europe.(1)
1. The Fund's portfolio is subject to change.
2 Oppenheimer International Growth Fund/VA
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Panorama Series Fund, Inc.--Oppenheimer International Growth Fund/VA
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Another example of a good performer for the Fund is Psion plc (UK), which has
enveloped an operating system for mobile communications. Psion plc is working
with leading European companies to marry cellular technology and e-commerce.
It's what we term an "e-nabler," a company focused on making new technologies
work more effectively.
The portfolio also has some "g-nablers," companies that are driving the
genomics and biotechnology revolution to the next level. We have been building a
position in Europe's leading provider of consumables for the biotech industry.
The Fund's biggest disappointment came from positions we didn't hold.
While the Japanese markets rallied during 1999, we approached this region more
cautiously than most of our competitors, which constrained the Fund's
performance. However, in our opinion, we still haven't seen enough fundamental
change to sustain an economic turnaround there.
Of the positions that we did hold, one of the largest was a German
kidney dialysis company. They've recently experienced problems with their
product, but they're a well-run company overall and have strong brand
recognition, which we believe will help them bounce back. Another holding, an
Australian reinsurance company, suffered a setback after Hurricane George caused
a higher-than-average number of claims.
We see strong signs that foreign markets have entered a new phase.
After five years of underperformance, much of the world outside our borders
seems poised to move forward again. Historically, these upswings have lasted for
several years. If history repeats itself, we think that foreign investing--and
Oppenheimer International Growth/VA--will be an important part of The Right Way
to Invest for anyone with a long-term financial goal.
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Management's Discussion of Performance. During the fiscal year that ended
December 31, 1999, the performance of Oppenheimer International Growth Fund/VA
reflected the general recovery of the world's equity markets and an emphasis on
companies providing various types of new technology. The Japanese market was the
best performing world market, as investors responded positively to changes in
that nation's banking and business practices. Early in the twelve-month period,
the Fund had less of a weighting in Japan (relative to its benchmark, the MSCI
EAFE Index) and did not participate as fully as it might have in this rally. As
the year progressed, the allocation to Japanese stocks increased (though it
remains below the benchmark) and benefited the Fund's performance. A growing
emphasis on European stocks as the year progressed also helped contribute to the
substantial year-to-year increase in total return. Markets in the industrialized
nations of Europe gained strength, especially during the final six months. A new
European currency, the Euro, and united action against potential inflationary
pressures helped to bring stability on the continent. This, in turn, boosted the
current results and the prospects for companies there, including those focused
on three of the Fund's major investment themes: new technology, restructuring
(e.g. consumer products, luxury goods) and aging (e.g., banks and other asset
gatherers). The Fund's portfolio holdings, allocations and strategies are
subject to change.
Oppenheimer International Growth Fund/VA 3
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Panorama Series Fund, Inc.--Oppenheimer International Growth Fund/VA
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Comparing the Portfolio's Performance to the Market. The graph that follows
shows the performance of a hypothetical $10,000 investment in the Fund held
until December 31, 1999. Performance information does not reflect charges that
apply to separate accounts investing in the Fund. If these charges were taken
into account, performance would be lower.
The Fund is compared to the Morgan Stanley Capital International EAFE
Index which is an index including approximately 1000 companies representing the
stock markets of 18 countries. The average company has a market capitalization
of over $3 billion. Index performance reflects the reinvestment of income but
does not consider the effect of transaction costs, and none of the data that
follows shows the effect of taxes. The Fund's performance reflects the effects
of the Portfolio's business and operating expenses. While index comparisons may
be useful to provide a benchmark for the Fund's performance, it must be noted
that the Fund's investments are not limited to the investments in the index.
[Chart]
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Panorama Series Fund, Inc.--Oppenheimer International Growth Fund/VA and
Morgan Stanley Capital International Europe, Australia & Far East (EAFE) Index
Oppenheimer International Morgan Stanley Capital
Growth Fund/VA International EAFE Index
5.13.92 10000 10000
12.31.92 9567 9944
12.31.93 11653 13219
12.31.94 11822 14285
12.31.95 13039 15935
12.31.96 14768 16949
12.31.97 15965 17298
12.31.98 19062 20815
12.31.99 28663 26497
Average Annual Total Return of the Fund at 12/31/99
1-Year 50.37% 5-Year 19.38% Life 14.79%
[End Chart]
Prior to October 1, 1999, the Fund's portfolio was managed by a sub-advisor,
Babson Stewart Ivory International. Effective October 1, 1999, OppenheimerFunds,
Inc. manages the Fund's portfolio. Because the stock market can be volatile, the
Fund's performance may be subject to substantial short-term changes. For updates
on the Fund's performance, please call us at 1-800-981-2871. This performance
was achieved in part during periods of rapidly rising markets, and there is no
assurance that the Fund will continue to achieve those gains in the future.
The performance information in the graph for Morgan Stanley Capital
International EAFE Index begins on 4/30/92. The inception date of the Portfolio
is 5/13/92.
Total returns and the ending account value in the graph show change in share
value and include reinvestment of all dividends and capital gains distributions.
Past performance is not predictive of future performance.
4 Oppenheimer International Growth Fund/VA
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Statement of Investments December 31, 1999
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<TABLE>
<CAPTION>
Market Value
Shares Note 1
<S> <C> <C>
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Common Stocks--99.3%
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Capital Goods--7.6%
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Aerospace/Defense--1.0%
Embraer-Empresa Brasileira de Aeronautica SA, Preference 310,000 $ 1,398,561
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Electrical Equipment--2.6%
Halma plc 580,000 1,096,279
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Toshiba Corp. 364,000 2,777,267
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3,873,546
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Industrial Services--2.1%
Aegis Group plc 862,300 3,134,355
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Manufacturing--1.9%
Sidel SA 27,500 2,836,789
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Communication Services--19.9%
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Telecommunications: Long Distance--12.5%
Altran Technologies SA 9,276 5,601,218
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Ericsson LM, B Shares 35,000 2,249,574
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Nippon Telegraph & Telephone Corp. 140 2,396,557
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Nokia Oyj 16,000 2,898,431
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Sonera Corp. 50,000 3,424,275
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Tandberg Television ASA(1) 130,000 1,796,295
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18,366,350
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Telephone Utilities--3.7%
DDI Corp.(1) 100 1,369,461
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Telefonica SA(1) 95,508 2,383,757
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Videsh Sanchar Nigam Ltd., GDR(2) 70,000 1,736,000
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5,489,218
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Telecommunications: Wireless--3.7%
NTT Mobile Communications Network, Inc. 92 3,536,731
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Telecom Italia Mobile SpA 170,000 1,897,365
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5,434,096
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Consumer Cyclicals--7.7%
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Autos & Housing--2.1%
Aucnet, Inc. 16,500 989,387
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Ducati Motor Holding SpA(1) 400,000 1,036,592
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Porsche AG, Preference 380 1,001,972
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3,027,951
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Leisure & Entertainment--0.9%
Granada Group plc 130,000 1,317,845
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Media--3.5%
Lusomundo SGPS SA(1) 80,000 1,127,168
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Reed International plc 360,000 2,695,625
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Singapore Press Holdings Ltd. 60,000 1,300,510
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5,123,303
Oppenheimer International Growth Fund/VA 5
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Statement of Investments (Continued)
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<CAPTION>
Market Value
Shares Note 1
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Textile/Apparel & Home Furnishings--1.2%
Gucci Group NV, NY Registered Shares 15,000 $ 1,717,500
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Consumer Staples--14.2%
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Broadcasting--7.3%
Canal Plus 30,000 4,362,743
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Grupo Televisa SA, Sponsored GDR(1) 50,000 3,412,500
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ProSieben Media AG, Preference 50,000 2,843,079
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PT MULTIMEDIA--Servicos de Telecomunicacoes e Multimedia SGP(1) 3,100 176,177
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10,794,499
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Entertainment--4.8%
Imagineer Co. Ltd. 30,000 498,875
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Nintendo Co. Ltd. 27,400 4,551,032
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Village Roadshow Ltd., Cl. A, Preference 1,230,000 2,093,005
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7,142,912
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Household Goods--1.2%
Wella AG, Preference 80,000 1,755,161
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Tobacco--0.9%
Cie Financiere Richemont AG, A Units 550 1,314,218
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Financial--4.1%
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Banks--3.2%
Espirito Santo Financial Group, ADR 100,000 1,575,000
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Julius Baer Holding AG, Cl. B 350 1,058,605
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Unibanco-Uniao de Bancos Brasileiros SA, Sponsored GDR 70,000 2,108,750
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4,742,355
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Insurance--0.9%
AXA SA 10,000 1,392,857
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Healthcare--15.8%
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Healthcare/Drugs--8.2%
Biocompatibles International plc(1) 500,000 2,540,375
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Eisai Co. Ltd. 68,500 1,316,663
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Elan Corp. plc, ADR(1) 60,000 1,770,000
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Fresenius AG, Preference 7,000 1,282,153
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Genset, Sponsored ADR(1) 60,000 1,143,750
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Nicox SA(1) 26,000 1,229,820
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Pliva d.d., Sponsored GDR(2) 100,000 1,305,000
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QIAGEN NV(1) 20,000 1,539,792
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12,127,553
6 Oppenheimer International Growth Fund/VA
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Statement of Investments (Continued)
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<CAPTION>
Market Value
Shares Note 1
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Healthcare/Supplies & Services--7.6%
Nichii Gakkan Co. 18,750 $ 3,666,365
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Novogen Ltd.(1) 610,000 1,226,356
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Ortivus AB, Cl. B(1) 251,300 1,237,233
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PowderJect Pharmaceuticals plc(1) 160,000 2,122,122
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Seton School Healthcare Group plc 70,000 886,870
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SkyePharma plc(1) 2,600,000 2,037,147
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11,176,093
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Technology--30.0%
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Computer Services--11.0%
Cap Gemini SA 10,000 2,536,127
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Computer Services Solutions Holding NV 50,000 1,298,256
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Equant NV, NY Registered Shares(1) 10,000 1,120,000
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Getronics NV 100,000 7,970,686
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Icon Medialab International AB(1) 50,000 1,739,028
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Unit 4(1) 60,000 1,536,772
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16,200,869
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Computer Software--7.9%
Misys plc 350,000 5,456,355
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Psion plc 80,000 3,489,482
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Solution 6 Holdings Ltd.(1) 240,000 2,617,488
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11,563,325
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Communications Equipment--1.7%
Vodafone Group plc 500,000 2,477,775
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Electronics--9.4%
Hoya Corp. 15,000 1,181,160
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Racal Electronic plc 150,300 1,347,594
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Sharp Corp. 62,000 1,585,934
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Sony Corp. 23,000 6,816,981
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STMicroelectronics NV, NY Registered Shares 10,000 1,514,375
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Thomson Multimedia(1) 26,200 1,410,671
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13,856,715
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Total Investments, at Value (Cost $101,857,730) 99.3% 146,263,846
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Other Assets Net of Liabilities 0.7 1,081,145
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Net Assets 100.0% $147,344,991
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</TABLE>
Oppenheimer International Growth Fund/VA 7
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Statement of Investments (Continued)
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Distribution of investments representing geographic diversification, as a
percentage of total investments at value, is as follows:
<TABLE>
<CAPTION>
Geographical Diversification Market Value Percent
<S> <C> <C>
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Japan $ 30,686,414 20.9%
Great Britain 28,601,824 19.6
France 22,028,350 15.1
The Netherlands 13,465,505 9.2
Germany 6,882,365 4.7
Finland 6,322,706 4.3
Australia 5,936,849 4.1
Sweden 5,225,835 3.6
Italy 4,651,457 3.2
Brazil 3,507,311 2.4
Mexico 3,412,500 2.3
Portugal 2,878,345 2.0
Spain 2,383,757 1.6
Switzerland 2,372,823 1.6
Norway 1,796,295 1.2
Ireland 1,770,000 1.2
India 1,736,000 1.2
Croatia 1,305,000 0.9
Singapore 1,300,510 0.9
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Total $146,263,846 100.0%
============ =====
</TABLE>
1. Non-income producing security.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Directors. These securities amount to $3,041,000 or 2.06% of the Fund's net
assets as of December 31, 1999.
See accompanying Notes to Financial Statements.
8 Oppenheimer International Growth Fund/VA
<PAGE>
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Statement of Assets and Liabilities December 31, 1999
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<TABLE>
<S> <C>
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Assets
Investments, at value (cost $101,857,730)--see accompanying statement $146,263,846
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Receivables and other assets:
Investments sold 3,612,376
Shares of capital stock sold 123,379
Interest and dividends 120,364
Other 3,017
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Total assets 150,122,982
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Liabilities
Bank overdraft 1,780,977
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Payables and other liabilities:
Investments purchased 564,840
Shares of capital stock redeemed 402,030
Directors' fees 3,100
Transfer and shareholder servicing agent fees 180
Other 26,864
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Total liabilities 2,777,991
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Net Assets $147,344,991
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Composition of Net Assets
Par value of shares of capital stock $ 63,953
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Additional paid-in capital 73,104,886
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Undistributed net investment income 1,769,047
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Accumulated net realized gain on investments and
foreign currency transactions 27,990,292
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Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 44,416,813
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Net assets--applicable to 63,952,533 shares of capital stock outstanding $147,344,991
============
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Net Asset Value, Redemption Price Per Share and Offering Price Per Share $2.30
</TABLE>
See accompanying Notes to Financial Statements.
Oppenheimer International Growth Fund/VA 9
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Statement of Operations For the Year Ended December 31, 1999
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<TABLE>
<S> <C>
===================================================================================================
Investment Income
Dividends (net of foreign withholding taxes of $136,054) $ 1,150,247
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Interest 183,035
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Total income 1,333,282
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Expenses
Management fees 1,072,824
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Custodian fees and expenses 32,615
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Accounting service fees 15,000
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Directors' compensation 5,665
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Transfer and shareholder servicing agent fees 2,114
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Other 27,064
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Total expenses 1,155,282
Less expenses paid indirectly (3,380)
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Net expenses 1,151,902
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Net Investment Income 181,380
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Realized and Unrealized Gain (Loss)
Net realized gain on:
Investments 31,159,683
Foreign currency transactions 197,604
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Net realized gain 31,357,287
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Net change in unrealized appreciation or depreciation on:
Investments 21,423,634
Translation of assets and liabilities denominated in foreign currencies (2,902,013)
-----------
Net change 18,521,621
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Net realized and unrealized gain 49,878,908
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Net Increase in Net Assets Resulting from Operations $50,060,288
===========
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer International Growth Fund/VA
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Statements of Changes in Net Assets
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<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998
<S> <C> <C>
===================================================================================================
Operations
Net investment income $ 181,380 $ 646,134
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Net realized gain 31,357,287 228,469
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Net change in unrealized appreciation or depreciation 18,521,621 14,941,247
------------ ------------
Net increase in net assets resulting from operations 50,060,288 15,815,850
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Dividends and/or Distributions to Shareholders
Dividends from net investment income (580,211) (404,500)
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Distributions from net realized gain (1,992,059) (2,680,566)
===================================================================================================
Capital Stock Transactions
Net increase (decrease) in net assets resulting from
capital stock transactions (3,546,775) 8,415,516
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Net Assets
Total increase 43,941,243 21,146,300
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Beginning of period 103,403,748 82,257,448
------------ ------------
End of period (including undistributed net investment
income of $1,769,047 and $576,688, respectively) $147,344,991 $103,403,748
============ ============
See accompanying Notes to Financial Statements.
</TABLE>
Oppenheimer International Growth Fund/VA 11
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Financial Highlights
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<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998 1997 1996(1) 1995
<S> <C> <C> <C> <C> <C>
================================================================================================================================
Per Share Operating Data
Net asset value, beginning of period $1.57 $1.36 $1.29 $1.15 $1.09
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income --(2) .01 .01 .02 .03
Net realized and unrealized gain .77 .25 .09 .13 .08
- --------------------------------------------------------------------------------------------------------------------------------
Total income from investment operations .77 .26 .10 .15 .11
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.01) (.01) (.01) (.01) (.04)
Distributions from net realized gain (.03) (.04) (.02) - (.01)
- --------------------------------------------------------------------------------------------------------------------------------
Total dividends and/or distributions to shareholders (.04) (.05) (.03) (.01) (.05)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $2.30 $1.57 $1.36 $1.29 $1.15
===== ===== ===== ===== =====
================================================================================================================================
Total Return, at Net Asset Value(3) 50.37% 19.40% 8.11% 13.26% 10.30%
================================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $147,345 $103,404 $82,257 $62,585 $45,775
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $107,403 $ 94,651 $73,318 $56,893 $37,474(4)
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: (5)
Net investment income 0.17% 0.68% 0.72% 0.76% 1.61%
Expenses 1.08% 1.09%(6) 1.12%(6) 1.21%(6) 1.26%(6)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 127% 48% 49% 54% 85%
</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 $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or commencement of operations), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Total returns are not annualized for periods less than one
full year. Total return information does not reflect expenses that apply at the
separate account level or to related insurance products. Inclusion of these
charges would reduce the total return figures for all periods shown.
4. This information is not covered by the auditors' opinion.
5. Annualized for periods less than one full year.
6. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
7. 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, 1999, were $133,197,869 and $137,478,833, respectively.
See accompanying Notes to Financial Statements.
12 Oppenheimer International Growth Fund/VA
<PAGE>
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Notes to Financial Statements
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1. Significant Accounting Policies
Oppenheimer International Growth Fund/VA (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 operated under the name of International Equity Portfolio
through September 30, 1999. The Fund's investment objective is to seek long-term
growth of capital by investing, under normal circumstances, at least 90% of its
assets in equity securities of companies wherever located, the primary stock
market of which is outside the United States. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). Shares of the Fund are sold only to
separate accounts of life insurance companies, a majority of such shares are
held by separate accounts of Massachusetts Mutual Life Insurance Co., an
affiliate of the investment advisor. The following is a summary of significant
accounting policies consistently followed by the Fund.
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Securities Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Foreign currency exchange contracts are valued based on the
closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid is used.
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Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments
is separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers to shareholders.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
Oppenheimer International Growth Fund/VA 13
<PAGE>
- --------------------------------------------------------------------------------
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 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, 1999, amounts have been reclassified to reflect an
increase in undistributed net investment income of $1,591,190. Accumulated net
realized gain on investments was decreased by the same amount.
- --------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the dividend if
such information is obtained subsequent to 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 200 million shares of $0.001 par value capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1999 Year Ended December 31, 1998
----------------------------------- --------------------------------
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Sold 23,276,935 $ 41,294,941 13,905,772 $ 20,648,894
Dividends and/or distributions reinvested 1,703,490 2,572,270 2,070,514 3,085,066
Redeemed (26,922,819) (47,413,986) (10,459,749) (15,318,444)
----------- ------------ ----------- ------------
Net increase (decrease) (1,942,394) $ (3,546,775) 5,516,537 $ 8,415,516
=========== ============ =========== ============
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Securities
As of December 31, 1999, net unrealized appreciation on securities of
$44,406,116 was composed of gross appreciation of $46,637,060, and gross
depreciation of $2,230,944.
14 Oppenheimer International Growth Fund/VA
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management Fees. 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
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
year ended December 31, 1999, was 1.00% of the average annual net assets of the
Fund.
- --------------------------------------------------------------------------------
Accounting 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.
- --------------------------------------------------------------------------------
Transfer Agent Fees. 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 for cost.
================================================================================
5. Foreign Currency Contracts
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts for operational purposes and to seek to protect against
adverse exchange rate fluctuations. Risks to the Fund include the potential
inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency exchange
rates as provided by a reliable bank, dealer or pricing service. Unrealized
appreciation and depreciation on foreign currency contracts are reported in the
Statement of Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement of
the forward transaction. Realized gains and losses are reported with all other
foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of Investments
where applicable.
Oppenheimer International Growth Fund/VA 15
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
================================================================================
To the Board of Directors and Shareholders of Oppenheimer International
Growth Fund/VA:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer International Growth Fund/VA (which
is a series of Panorama Series Fund, Inc.) as of December 31, 1999, the related
statement of operations for the year then ended, the statements of changes in
net assets for the years ended December 31, 1999 and 1998, and the financial
highlights for the period January 1, 1996 to December 31, 1999. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights for the period January 1, 1995 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, 1999, by correspondence with the custodian and brokers; where
confirmations 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 Oppenheimer
International Growth Fund/VA as of December 31, 1999, the results of its
operations, the changes in its net assets, and the financial highlights for the
respective stated periods, in conformity with generally accepted accounting
principles.
Deloitte & Touche LLP
Denver, Colorado
January 24, 2000
16 Oppenheimer International Growth Fund/VA
<PAGE>
- --------------------------------------------------------------------------------
Federal Income Tax Information (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
In early 2000 shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 1999.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue
Service.
Distributions of $0.0399 per share were paid to shareholders on March
22, 1999, of which $0.0267 was designated as a "capital gain distribution" for
federal income tax purposes. Whether received in stock or in cash, the capital
gain distribution should be treated by shareholders as a gain from the sale of
capital assets held for more than one year (long-term capital gains).
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax advisor for specific
guidance.
Oppenheimer International Growth Fund/VA 17
<PAGE>
- --------------------------------------------------------------------------------
Oppenheimer International Growth Fund/VA
- --------------------------------------------------------------------------------
A Series of Panorama Series Fund, Inc.
<TABLE>
================================================================================================
<S> <C>
Officers and Directors James C. Swain, Director and Chairman of the Board
Bridget A. Macaskill, President
William H. Armstrong, Director
Robert G. Avis, Director
William A. Baker, Director
Jon S. Fossel, Director
Sam Freedman, Director
Raymond J. Kalinowski, Director
C. Howard Kast, Director
Robert M. Kirchner, Director
Ned M. Steel, Director
Peter M. Antos, Vice President
George Evans, Vice President
Alan Gilston, Vice President
John S. Kowalik, Vice President
Stephen F. Libera, Vice President
David P. Negri, Vice President
Thomas P. Reedy, Vice President
Michael C. Strathearn, Vice President
Kenneth B. White, Vice President
Arthur J. Zimmer, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
================================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================================
Transfer Agent OppenheimerFunds Services
================================================================================================
Custodian of Portfolio Securities The Bank of New York
================================================================================================
Independent Auditors Deloitte & Touche LLP
================================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of
Oppenheimer International Growth Fund/VA. This report
must be preceded or accompanied by a Prospectus of
Oppenheimer International Growth Fund/VA. For
material information concerning the Funds, see the
Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, are not insured by the FDIC or any other
agency, and involve investment risks, including
the possible loss of the principal amount invested.
</TABLE>
18 Oppenheimer International Growth Fund/VA
