-------------------------------
Semiannual Report June 30, 1999
-------------------------------
O P P E N H E I M E R
Small Cap
Growth Fund/VA
A Series of Oppenheimer Variable Account Funds
[graphic of telescope]
[OppenheimerFunds logo]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
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Oppenheimer Variable Account Funds - Oppenheimer Small Cap Growth Fund/VA
- --------------------------------------------------------------------------------
================================================================================
Objective
Oppenheimer Small Cap Growth Fund/VA, a series of Oppenheimer Variable Account
Funds, seeks capital appreciation. In seeking its objective, the Fund emphasizes
investments in securities of growth-type companies with market capitalizations
less than $1 billion.
================================================================================
Narrative by Jay Tracey, Co-Portfolio Manager(1)
The six-month period that ended June 30, 1999, may best be characterized as
difficult for small-cap stocks, which underperformed most major stock averages.
During the second quarter of 1999, small-cap stocks staged something of a
rebound, led by economically-sensitive stocks, known as cyclicals. While
small-cap growth stocks did not participate, signs of improvement have recently
begun to emerge. However, the small-cap market underperformed in the first
quarter of 1999, and therefore, the Fund's six-month performance was
disappointing. The Fund's cumulative total return for the six-month period was
- -3.02%.(2)
During the first half of the year, investors maintained their
preference for higher quality, more actively traded large-cap stocks, as they
have for several years. One of the reasons is that, on average, earnings growth
for small-cap stocks has lagged that of large caps. This was particularly true
over the past two quarters. Among small caps, cyclicals outperformed growth
stocks, especially in April, as economic growth appeared to accelerate and some
commodities, notably oil, strengthened considerably.
The strongest sectors in the small-cap market over the past six months
were cyclicals: energy, capital goods and transportation. Because the objective
of the Fund is to invest primarily in growth companies whose earnings are not
necessarily tied to the economy, the Fund's exposure to cyclical sectors was
low. Conversely, the most important market sectors for the Fund--technology,
consumer cyclicals and healthcare--were weak performers during the first half of
1999. Healthcare stocks, in particular, suffered from the possibility of adverse
Medicare reimbursement reform. Software stocks were hurt by Y2K matters. And, in
the consumer area, education stocks were negatively affected by concerns
regarding the ability of specialty schools to maintain the current level of
enrollment growth.
In our opinion, small-cap stocks in general, and small-cap growth
stocks in particular, are now more attractively valued relative to large-cap
stocks than they have been in over a decade. While there is no way to predict
when--or even if--small caps will begin to outperform large caps for a sustained
period of time, we believe compelling opportunities are available in
well-managed small companies.
The current situation fits well with our strategy of identifying
emerging growth companies with the leadership characteristics and potential to
become the established growth companies of the future. We will continue to
invest the Fund's portfolio on a disciplined stock-by-stock basis, focusing on
strong fundamentals and healthy growth prospects. This, we believe, is what
makes Oppenheimer Small Cap Growth Fund/VA part of The Right Way to Invest.
Because the stock market can be volatile, the Fund's performance may be subject
to substantial short-term changes. For updates on the Fund's performance, please
contact your financial advisor, call us at 1-800-525-7048 or visit our website,
www.oppenheimerfunds.com.
1. Effective 8/30/99, Jay Tracey will become the sole portfolio manager of the
Fund.
2. Includes changes in net asset value per share and does not include the
charges associated with the separate account products which offer this Fund.
Such performance is not annualized and would have been lower if such charges
were taken into account.
2 Oppenheimer Small Cap Growth Fund/VA
<PAGE>
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Statement of Investments June 30, 1999 (Unaudited)
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<TABLE>
<CAPTION>
Market Value
Shares Note 1
================================================================================
<S> <C> <C>
Common Stocks--77.2%
================================================================================
Capital Goods--7.4%
- --------------------------------------------------------------------------------
Industrial Services--6.2%
Casella Waste Systems, Inc., Cl. A(1) 800 $ 20,800
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Group Maintenance America Corp.(1) 1,000 12,937
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Kendle International, Inc.(1) 800 12,800
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Maximus, Inc.(1) 1,300 37,375
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Metzler Group, Inc.(1) 900 24,862
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Tetra Tech, Inc.(1) 1,875 30,937
--------
139,711
- --------------------------------------------------------------------------------
Manufacturing--1.2%
SLI, Inc. 1,000 27,000
================================================================================
Communication Services--0.8%
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Telecommunications: Long Distance--0.8%
Inet Technologies, Inc.(1) 500 12,000
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Latitude Communications, Inc.(1) 500 6,500
--------
18,500
================================================================================
Consumer Cyclicals--19.0%
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Autos & Housing--3.5%
Fairfield Communities, Inc.(1) 5,000 80,625
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Consumer Services--6.2%
Core Laboratories NV(1) 800 11,150
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Cornell Corrections, Inc.(1) 2,200 36,162
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Getty Images, Inc.(1) 1,900 35,862
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Rent-A-Center, Inc.(1) 1,100 26,400
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Rent-Way, Inc.(1) 1,300 32,012
--------
141,586
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Leisure & Entertainment--2.3%
Action Performance Cos., Inc.(1) 700 23,100
- --------------------------------------------------------------------------------
Handleman Co.(1) 2,500 29,531
--------
52,631
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Media--1.0%
Penton Media, Inc. 900 21,825
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Retail: Specialty--5.3%
Chico's Fas, Inc.(1) 300 7,050
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David's Bridal, Inc.(1) 1,900 29,569
- --------------------------------------------------------------------------------
O'Reilly Automotive, Inc.(1) 600 30,225
- --------------------------------------------------------------------------------
Pantry, Inc. (The)(1) 1,300 20,962
- --------------------------------------------------------------------------------
School Specialty, Inc.(1) 2,000 32,125
--------
119,931
- --------------------------------------------------------------------------------
Textile/Apparel & Home Furnishings--0.7%
Cutter & Buck, Inc.(1) 1,000 16,875
</TABLE>
Oppenheimer Small Cap Growth Fund/VA 3
<PAGE>
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Statement of Investments (Unaudited) (Continued)
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<TABLE>
<CAPTION>
Market Value
Shares Note 1
================================================================================
<S> <C> <C>
Consumer Staples--7.5%
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Education--5.8%
Career Education Corp.(1) 900 $ 30,431
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Education Management Corp.(1) 1,900 39,425
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ITT Educational Services, Inc.(1) 1,000 26,062
- --------------------------------------------------------------------------------
Strayer Education, Inc. 1,200 36,825
--------
132,743
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Entertainment--1.7%
Cinar Films, Inc., Cl. B(1) 1,400 34,300
- --------------------------------------------------------------------------------
Rubio's Restaurants, Inc.(1) 300 4,631
--------
38,931
================================================================================
Financial--9.8%
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Banks--2.8%
Investors Financial Services Corp. 1,600 64,000
- --------------------------------------------------------------------------------
Diversified Financial--1.6%
First Sierra Financial, Inc.(1) 900 22,500
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Resource America, Inc., Cl. A 900 13,050
--------
35,550
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Insurance--5.4%
Advance Paradigm, Inc.(1) 800 48,800
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Annuity & Life RE Holdings Ltd. 1,400 31,413
- --------------------------------------------------------------------------------
Medical Assurance, Inc. 1,500 42,375
--------
122,588
================================================================================
Healthcare--7.0%
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Healthcare/Drugs--1.5%
Serologicals Corp.(1) 1,900 15,438
- --------------------------------------------------------------------------------
Ventana Medical Systems, Inc.(1) 1,000 19,125
--------
34,563
- --------------------------------------------------------------------------------
Healthcare/Supplies & Services--5.5%
- --------------------------------------------------------------------------------
Hanger Orthopedic Group, Inc.(1) 1,600 22,700
- --------------------------------------------------------------------------------
Pharmaceutical Product Development, Inc.(1) 800 21,900
- --------------------------------------------------------------------------------
Renal Care Group, Inc.(1) 1,000 25,875
- --------------------------------------------------------------------------------
Sabratek Corp.(1) 2,500 54,688
--------
125,163
================================================================================
Technology--25.7%
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Computer Hardware--1.5%
Network Appliance, Inc.(1) 400 22,350
- --------------------------------------------------------------------------------
Redback Networks, Inc.(1) 100 12,556
--------
34,906
- --------------------------------------------------------------------------------
Computer Services--10.1%
@plan, Inc.(1) 700 10,500
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Ariba, Inc.(1) 100 9,725
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BackWeb Technologies Ltd.(1) 400 10,950
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CAIS Internet, Inc.(1) 500 9,188
</TABLE>
4 Oppenheimer Small Cap Growth Fund/VA
<PAGE>
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Statement of Investments (Unaudited) (Continued)
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<TABLE>
<CAPTION>
Market Value
Shares Note 1
- --------------------------------------------------------------------------------
<S> <C> <C>
Computer Services (continued)
E-LOAN, Inc.(1) 300 $ 11,569
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GoTo.com, Inc.(1) 200 5,600
- --------------------------------------------------------------------------------
internet.com LLC(1) 100 1,256
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Mail.com, Inc.(1) 700 13,169
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Mpath Interactive, Inc.(1) 1,000 22,000
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OneSource Information Services, Inc.(1) 600 5,250
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Online Resources & Communications Corp.(1) 600 8,138
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Ramp Networks, Inc.(1) 400 5,725
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ShowCase Corp.(1) 1,000 8,625
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Stamps.com, Inc.(1) 600 10,500
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StarMedia Network, Inc.(1) 100 6,413
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Student Advantage, Inc.(1) 1,100 10,450
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Viant Corp.(1) 300 10,500
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WebTrends Corp.(1) 1,500 69,188
----------
228,746
- --------------------------------------------------------------------------------
Computer Software--12.4%
Advent Software, Inc.(1) 500 33,500
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Aware, Inc.(1) 200 9,225
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Concord Communications, Inc.(1) 500 22,500
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CyberSource Corp.(1) 800 11,800
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Maker Communications, Inc.(1) 100 3,100
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New Era of Networks, Inc.(1) 600 26,363
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Phone.com, Inc.(1) 200 11,200
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Saga Systems, Inc.(1) 2,500 31,875
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Software.com, Inc. 200 4,638
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TenFold Corp.(1) 700 22,225
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Veritas Software Corp.(1) 500 47,469
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Visio Corp.(1) 1,500 57,094
----------
280,989
- --------------------------------------------------------------------------------
Communications Equipment--1.7%
Pittway Corp., Cl. A 1,100 37,606
----------
Total Common Stocks (Cost $1,615,741) 1,754,469
Principal
Amount
================================================================================
Repurchase Agreements--17.6%
- --------------------------------------------------------------------------------
Repurchase agreement with PaineWebber,
Inc., 4.80%, dated 6/30/99, to be
repurchased at $400,053 on 7/1/99,
collateralized by U.S. Treasury Nts.,
4.625%-9.25%, 11/30/00-2/15/16, with a
value of $408,953 (Cost $400,000) $400,000 400,000
- --------------------------------------------------------------------------------
Total Investments, at Value (Cost $2,015,741) 94.8% 2,154,469
- --------------------------------------------------------------------------------
Other Assets Net of Liabilities 5.2 117,300
-------- ----------
Net Assets 100.0% $2,271,769
======== ==========
</TABLE>
1. Non-income producing security.
See accompanying Notes to Financial Statements.
Oppenheimer Small Cap Growth Fund/VA 5
<PAGE>
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Statement of Assets and Liabilities June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
================================================================================================
Assets
Investments, at value (including repurchase agreement of $400,000)
(cost $2,015,741)--see accompanying statement $2,154,469
- ------------------------------------------------------------------------------------------------
Cash 78,394
- ------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 62,910
Shares of beneficial interest sold 22,636
Interest and dividends 113
Other 497
----------
Total assets 2,319,019
================================================================================================
Liabilities
Payables and other liabilities:
Investments purchased 40,900
Shareholder reports 2,807
Shares of beneficial interest redeemed 2,641
Other 902
----------
Total liabilities 47,250
================================================================================================
Net Assets $2,271,769
==========
================================================================================================
Composition of Net Assets
Paid-in capital $2,205,728
- ------------------------------------------------------------------------------------------------
Accumulated net investment loss (5,593)
- ------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (67,094)
- ------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 138,728
----------
Net assets--applicable to 244,031 shares of beneficial interest outstanding $2,271,769
==========
================================================================================================
Net Asset Value, Redemption Price Per Share and Offering Price Per Share $9.31
</TABLE>
See accompanying Notes to Financial Statements.
6 Oppenheimer Small Cap Growth Fund/VA
<PAGE>
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Statement of Operations For the Six Months Ended June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
================================================================================
Investment Income
Interest $ 4,841
- --------------------------------------------------------------------------------
Dividends 352
--------
Total income 5,193
================================================================================
Expenses
Legal, auditing and other professional fees 5,917
- --------------------------------------------------------------------------------
Management fees--Note 4 5,846
- --------------------------------------------------------------------------------
Shareholder reports 3,850
- --------------------------------------------------------------------------------
Trustees' compensation 647
- --------------------------------------------------------------------------------
Insurance expenses 419
- --------------------------------------------------------------------------------
Registration and filing fees 353
- --------------------------------------------------------------------------------
Custodian fees and expenses 11
- --------------------------------------------------------------------------------
Other 154
--------
Total expenses 17,197
Less reimbursement of expenses by OppenheimerFunds, Inc.--Note 4 (6,400)
Less expenses paid indirectly--Note 1 (11)
--------
Net expenses 10,786
================================================================================
Net Investment Loss (5,593)
================================================================================
Realized and Unrealized Gain (Loss)
Net realized loss on investments (21,793)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 33,757
--------
Net realized and unrealized gain 11,964
================================================================================
Net Increase in Net Assets Resulting from Operations $ 6,371
========
</TABLE>
See accompanying Notes to Financial Statements.
Oppenheimer Small Cap Growth Fund/VA 7
<PAGE>
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Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Period Ended
June 30, 1999 December 31,
(Unaudited) 1998(1)
=============================================================================================
<S> <C> <C>
Operations
Net investment loss $ (5,593) $ (2,339)
- ---------------------------------------------------------------------------------------------
Net realized loss (21,793) (45,301)
- ---------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 33,757 104,971
---------- --------
Net increase in net assets resulting from operations 6,371 57,331
=============================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions--Note 2 1,271,094 936,973
=============================================================================================
Net Assets
Total increase 1,277,465 994,304
- ---------------------------------------------------------------------------------------------
Beginning of period 994,304 --
---------- --------
End of period (including accumulated net
investment loss of $5,593 for the period
ended June 30, 1999) $2,271,769 $994,304
========== ========
</TABLE>
1. For the period from May 1, 1998 (commencement of operations) to December 31,
1998.
See accompanying Notes to Financial Statements.
8 Oppenheimer Small Cap Growth Fund/VA
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Period
Ended Ended
June 30, 1999 December 31,
(Unaudited) 1998(1)
====================================================================================================================
<S> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $9.60 $10.00
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.02) (.02)
Net realized and unrealized loss (.27) (.38)
- --------------------------------------------------------------------------------------------------------------------
Total loss from investment operations (.29) (.40)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.31 $ 9.60
===== ======
====================================================================================================================
Total Return, at Net Asset Value(2) (3.02)% (4.00)%
====================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $2,272 $994
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,579 $441
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss (0.71)% (0.79)%
Expenses, before reimbursement and voluntary assumption by the Manager(4) 2.20% 0.87%
Expenses, net of reimbursement and voluntary assumption by the Manager 1.38% N/A
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 87% 61%
</TABLE>
1. For the period from May 1, 1998 (commencement of operations) to December 31,
1998.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or commencement of operations), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Total returns are not annualized for periods of less than
one full year. Total return information does not reflect expenses that apply at
the separate account level or to related insurance products. Inclusion of these
charges would reduce the total return figures for all periods shown.
3. Annualized for periods less than one full year.
4. The expense ratio reflects the effect of expenses paid indirectly by the
Fund.
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 June 30, 1999, were $1,526,217 and $628,569, respectively.
See accompanying Notes to Financial Statements.
Oppenheimer Small Cap Growth Fund/VA 9
<PAGE>
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Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies
Oppenheimer Small Cap Growth Fund/VA (the Fund) is a separate series of
Oppenheimer Variable Account Funds (the Trust), a diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended. The Fund operated under the name Oppenheimer Small Cap Growth
Fund through April 30, 1999. The Fund's investment objective is to seek capital
appreciation. The Trust's investment advisor is OppenheimerFunds, Inc. (the
Manager). The following is a summary of significant accounting policies
consistently followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. 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 Trustees 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 Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. As of December 31,
1998, the Fund had available for federal income tax purposes an unused capital
loss carryover of approximately $33,000, which expires in 2006.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Distributions to shareholders, which are
determined in accordance with income tax regulations, are recorded on the
ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. 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.
- --------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Foreign dividend income is often
recorded on the payable date. Realized gains and losses on investments and
unrealized appreciation and depreciation are determined on an identified cost
basis, which is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
10 Oppenheimer Small Cap Growth Fund/VA
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)(Continued)
- --------------------------------------------------------------------------------
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Six Months Ended June 30, 1999 Period Ended December 31, 1998(1)
------------------------------ ---------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 191,685 $1,736,596 114,434 $1,030,883
Redeemed (51,185) (465,502) (10,903) (93,910)
------- ---------- ------- ----------
Net increase 140,500 $1,271,094 103,531 $ 936,973
======= ========== ======= ==========
</TABLE>
1. For the period from May 1, 1998 (commencement of operations) to December 31,
1998.
================================================================================
3. Unrealized Gains and Losses on Securities
As of June 30, 1999, net unrealized appreciation on investments of $138,728, was
composed of gross appreciation of $262,104, and gross depreciation of $123,376.
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.75% of the first
$200 million of average annual net assets, 0.72% of the next $200 million, 0.69%
of the next $200 million, 0.66% of the next $200 million and 0.60% of average
annual net assets over $800 million. The Manager has voluntarily undertaken to
assume Fund expenses to the level needed to maintain a consistent expense ratio.
The Fund's management fee for the six months ended June 30, 1999 was 0.75% of
average annual net assets.
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.
Oppenheimer Small Cap Growth Fund/VA 11
<PAGE>
- --------------------------------------------------------------------------------
Oppenheimer Small Cap Growth Fund/VA
- --------------------------------------------------------------------------------
A Series of Oppenheimer Variable Account Funds
<TABLE>
<S> <C>
===============================================================================================
Officers and Trustees James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, President
Robert G. Avis, Trustee
William A. Baker, Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Alan Gilston, Vice President
Jay W. Tracey, III, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Vice President and 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.
The financial statements included herein have been
taken from the records of the Fund without
examination of the independent auditors.
This is a copy of a report to shareholders of
Oppenheimer Small Cap Growth Fund/VA. This report
must be preceded or accompanied by a Prospectus of
Oppenheimer Small Cap Growth Fund/VA. For material
information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, are not insured by the FDIC or any other
agency, and involve investment risks, including the
possible loss of the principal amount invested.
</TABLE>
12 Oppenheimer Small Cap Growth Fund/VA
