-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HyDB/huLruQD3XzuoiZIRZjzfo0PIj+JIJdPEoAZeOyum0FMjh3MrI/vzfAoiwm0 g6VSMwJmjpxRFBtluzACZA== 0000935069-05-002953.txt : 20051027 0000935069-05-002953.hdr.sgml : 20051027 20051027142008 ACCESSION NUMBER: 0000935069-05-002953 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050831 FILED AS OF DATE: 20051027 DATE AS OF CHANGE: 20051027 EFFECTIVENESS DATE: 20051027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER INTERNATIONAL SMALL CO FUND CENTRAL INDEX KEY: 0001041102 IRS NUMBER: 133955887 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08299 FILM NUMBER: 051159672 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 N-CSR 1 ra815_18567ncsr.txt RA815_18567NCSR UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-08299 OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND (Exact name of registrant as specified in charter) 6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924 (Address of principal executive offices) (Zip code) Robert G. Zack, Esq. Oppenheimerfunds, Inc. TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008 (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 Date of fiscal year end: August 31 Date of reporting period: August 31, 2005 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOP TEN GEOGRAPHICAL HOLDINGS - -------------------------------------------------------------------------------- Korea, Republic of South 21.0% - -------------------------------------------------------------------------------- Canada 15.7 - -------------------------------------------------------------------------------- India 11.7 - -------------------------------------------------------------------------------- Australia 9.3 - -------------------------------------------------------------------------------- Japan 7.4 - -------------------------------------------------------------------------------- United Kingdom 7.0 - -------------------------------------------------------------------------------- Hong Kong 5.5 - -------------------------------------------------------------------------------- United States 4.8 - -------------------------------------------------------------------------------- Germany 3.4 - -------------------------------------------------------------------------------- Bermuda 3.3 Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2005, and are based on total market value of investments. TOP TEN COMMON STOCK HOLDINGS - -------------------------------------------------------------------------------- Opera Software ASA 2.6% - -------------------------------------------------------------------------------- NETellar plc 2.1 - -------------------------------------------------------------------------------- Great Eastern Shipping Co. Ltd. 2.1 - -------------------------------------------------------------------------------- Arvind Mills Ltd. 2.1 - -------------------------------------------------------------------------------- Paladin Resources Ltd. 2.0 - -------------------------------------------------------------------------------- Solarworld AG 1.9 - -------------------------------------------------------------------------------- EuroZinc Mining Corp. 1.8 - -------------------------------------------------------------------------------- Xinhua Finance Ltd. 1.8 - -------------------------------------------------------------------------------- First Quantum Minerals Ltd. 1.7 - -------------------------------------------------------------------------------- auFeminin.com SA 1.7 Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2005, and are based on net assets. For more current Fund holdings, please visit www.oppenheimerfunds.com. - -------------------------------------------------------------------------------- 9 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] REGIONAL ALLOCATION Asia 55.7% United States/Canada 20.5 Europe 16.7 Latin America 6.0 Middle East/Africa 1.1 Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2005 and are based on total market value of investments. - -------------------------------------------------------------------------------- 10 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED AUGUST 31, 2005, FOLLOWED BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED MARKET INDEX. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. For the fiscal year ended August 31, 2005, Oppenheimer International Small Company Fund delivered strong performance on both an absolute and relative basis, results we attribute to several factors. In general, individual stock selection again proved to be the most significant contributor to the Fund's performance this year, as we successfully identified strong performers in several countries and industries. For example, our top ten performers for the period included companies in mining, textiles, entertainment and software, and originated in countries all over the world, such as Germany, Korea, Australia, India, France, Japan, Sweden and the UK. The very fact that the portfolio's top performer was Solarworld AG, a solar panel manufacturer that posted robust returns despite overall dismal economic conditions in its country of origin, Germany, helps support and exemplify the success of our individual stock selection for the period. The Fund's exposure to small-cap companies in India also substantially added to performance for the period. Thanks to high GDP growth and low interest rates, much improved corporate profits and corporate governance, Indian small-cap stocks have continued to deliver very strong performance relative to other countries. Likewise, our Japanese small-cap stocks have performed well this year, although not as dramatically as India. That said, Japanese small-cap growth stocks, our preferred method of investment in the largest small cap market outside the US, are expensive. We may need to consider value stocks in Japan in the future. Another positive influence to performance emanated from our exposure to emerging-market small caps. Emerging market economies continue to benefit from years of macroeconomic and corporate restructuring. The tailwind of strong commodity prices has changed the fortunes of such economies and companies beyond recognition. On the downside, we fared badly in 3 companies: Xillix, Allen-Vanguard and Trafficmaster. Xillix, a Canadian medical devices company, got derated as the market became impatient with an extended FDA approval process and what it perceived as low sales. The key problem was that Xillix has negative cashflow, taking away any financial support to the stock. Allen-Vanguard is a Canadian firm dealing with anti-terrorism devices. Unfortunately, funds from the U.S. Department of Homeland Security establishment were released too slowly and the problems were compounded when the company lost a key contract. A capital injection was required diluting existing shareholders such as ourselves. Trafficmaster got hit from the bankruptcy of British car company, MG Rover. 11 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- The business continues to do well, but the market chose to punish the share price given the legacy of problems dating back to the late 1990s. In closing, we remind shareholders that investing in foreign securities, particularly the securities of emerging markets, poses considerable risks, including heightened volatility, political and economic uncertainty, currency fluctuations and higher expenses. Small-cap investments are more volatile than stocks of larger, more established companies. COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until August 31, 2005. In the case of Class A, Class B and Class C shares, performance is measured from the inception of the Classes on November 17, 1997. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001. The Fund's performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C, and Class N shares, and reinvestments of all dividends and capital gains distributions. Past performance cannot guarantee future results. The Fund's performance is compared to the performances of the HSBC James Capel World excluding U.S. Smaller Companies Index (WexUS) and the Morgan Stanley Capital International (MSCI) EAFE Index. The performance of small foreign companies is represented by WexUS, an index comprised of 1,200 small international securities in Europe, UK, Southeast Asia, Japan, Australia and New Zealand. The performance of large international companies is represented by MSCI EAFE Index, which is comprised of common stocks issued in Europe, Australia and the Far East. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund's performance reflects the effects of the Fund's business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in either index. 12 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer International Small Company Fund (Class A) HSBC James Capel World excluding U.S. Smaller Companies Index MSCI EAFE Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer International HSBC James Capel Small Company World excluding U.S. MSCI EAFE Fund (Class A) Smaller Companies Index Index 11/17/1997 9,425 10,000 10,000 11/30/1997 9,529 10,000 10,000 02/28/1998 10,509 10,806 11,233 05/31/1998 12,187 11,582 11,622 08/31/1998 10,858 9,432 10,370 11/30/1998 11,800 9,886 11,678 02/28/1999 12,646 10,135 11,822 05/31/1999 14,648 10,839 12,163 08/31/1999 17,708 12,418 13,069 11/30/1999 18,461 12,869 14,180 02/29/2000 22,241 14,425 14,868 05/31/2000 18,284 12,637 14,283 08/31/2000 18,714 13,051 14,352 11/30/2000 13,013 11,054 12,839 02/28/2001 11,953 11,503 12,296 05/31/2001 11,545 10,914 11,864 08/31/2001 10,387 10,023 10,896 11/30/2001 10,189 9,621 10,416 02/28/2002 11,134 9,347 9,992 05/31/2002 12,265 10,542 10,758 08/31/2002 10,615 9,211 9,296 11/30/2002 9,937 8,678 9,144 02/28/2003 9,219 8,402 8,276 05/31/2003 11,307 10,002 9,473 08/31/2003 13,981 11,263 10,186 11/30/2003 16,881 13,119 11,407 02/29/2004 18,742 15,203 12,764 05/31/2004 19,076 14,875 12,600 08/31/2004 18,902 14,933 12,538 11/30/2004 21,977 17,422 14,220 02/28/2005 24,593 19,461 15,206 05/31/2005 24,401 18,153 14,520 08/31/2005 26,719 19,925 15,559 AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 8/31/05 1-Year 33.22% 5-Year 6.12% Since Inception (11/17/97) 13.45% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 13 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer International Small Company Fund (Class B) HSBC James Capel World excluding U.S. Smaller Companies Index MSCI EAFE Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer International HSBC James Capel Small Company World excluding U.S. MSCI EAFE Fund (Class B) Smaller Companies Index Index 11/17/1997 10,000 10,000 10,000 11/30/1997 10,110 10,000 10,000 02/28/1998 11,130 10,806 11,233 05/31/1998 12,880 11,582 11,622 08/31/1998 11,450 9,432 10,370 11/30/1998 12,420 9,886 11,678 02/28/1999 13,273 10,135 11,822 05/31/1999 15,349 10,839 12,163 08/31/1999 18,523 12,418 13,069 11/30/1999 19,275 12,869 14,180 02/29/2000 23,180 14,425 14,868 05/31/2000 19,017 12,637 14,283 08/31/2000 19,445 13,051 14,352 11/30/2000 13,491 11,054 12,839 02/28/2001 12,377 11,503 12,296 05/31/2001 11,909 10,914 11,864 08/31/2001 10,697 10,023 10,896 11/30/2001 10,477 9,621 10,416 02/28/2002 11,424 9,347 9,992 05/31/2002 12,570 10,542 10,758 08/31/2002 10,859 9,211 9,296 11/30/2002 10,127 8,678 9,144 02/28/2003 9,396 8,402 8,276 05/31/2003 11,493 10,002 9,473 08/31/2003 14,184 11,263 10,186 11/30/2003 17,111 13,119 11,407 02/29/2004 18,998 15,203 12,764 05/31/2004 19,336 14,875 12,600 08/31/2004 19,160 14,933 12,538 11/30/2004 22,277 17,422 14,220 02/28/2005 24,928 19,461 15,206 05/31/2005 24,734 18,153 14,520 08/31/2005 27,083 19,925 15,559 AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 8/31/05 1-Year 35.07% 5-Year 6.16% Since Inception (11/17/97) 13.65% 14 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer International Small Company Fund (Class C) HSBC James Capel World excluding U.S. Smaller Companies Index MSCI EAFE Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer International HSBC James Capel Small Company World excluding U.S. MSCI EAFE Fund (Class C) Smaller Companies Index Index 11/17/1997 10,000 10,000 10,000 11/30/1997 10,110 10,000 10,000 02/28/1998 11,130 10,806 11,233 05/31/1998 12,870 11,582 11,622 08/31/1998 11,450 9,432 10,370 11/30/1998 12,420 9,886 11,678 02/28/1999 13,273 10,135 11,822 05/31/1999 15,349 10,839 12,163 08/31/1999 18,523 12,418 13,069 11/30/1999 19,265 12,869 14,180 02/29/2000 23,173 14,425 14,868 05/31/2000 19,016 12,637 14,283 08/31/2000 19,445 13,051 14,352 11/30/2000 13,496 11,054 12,839 02/28/2001 12,377 11,503 12,296 05/31/2001 11,908 10,914 11,864 08/31/2001 10,709 10,023 10,896 11/30/2001 10,488 9,621 10,416 02/28/2002 11,420 9,347 9,992 05/31/2002 12,566 10,542 10,758 08/31/2002 10,854 9,211 9,296 11/30/2002 10,135 8,678 9,144 02/28/2003 9,390 8,402 8,276 05/31/2003 11,489 10,002 9,473 08/31/2003 14,181 11,263 10,186 11/30/2003 17,095 13,119 11,407 02/29/2004 18,940 15,203 12,764 05/31/2004 19,231 14,875 12,600 08/31/2004 19,010 14,933 12,538 11/30/2004 22,063 17,422 14,220 02/28/2005 24,654 19,461 15,206 05/31/2005 24,386 18,153 14,520 08/31/2005 26,657 19,925 15,559 AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 8/31/05 1-Year 39.23% 5-Year 6.51% Since Inception (11/17/97) 13.41% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 15 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS N SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer International Small Company Fund (Class N) HSBC James Capel World excluding U.S. Smaller Companies Index MSCI EAFE Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer International HSBC James Capel Small Company World excluding U.S. MSCI EAFE Fund (Class N) Smaller Companies Index Index 03/01/2001 10,000 10,000 10,000 05/31/2001 9,637 9,488 9,648 08/31/2001 8,667 8,714 8,861 11/30/2001 8,502 8,364 8,471 02/28/2002 9,276 8,126 8,126 05/31/2002 10,218 9,165 8,749 08/31/2002 8,840 8,007 7,560 11/30/2002 8,268 7,545 7,437 02/28/2003 7,663 7,304 6,730 05/31/2003 9,377 8,695 7,704 08/31/2003 11,596 9,792 8,284 11/30/2003 13,993 11,405 9,277 02/29/2004 15,518 13,216 10,380 05/31/2004 15,766 12,932 10,247 08/31/2004 15,619 12,982 10,197 11/30/2004 18,137 15,145 11,564 02/28/2005 20,280 16,918 12,366 05/31/2005 20,096 15,781 11,809 08/31/2005 21,986 17,321 12,653 AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 8/31/05 1-Year 39.76% Since Inception (3/1/01) 19.13% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. BECAUSE CLASS B SHARES CONVERT TO CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURNS FOR CLASS B SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 17 FOR FURTHER INFORMATION. 16 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES - -------------------------------------------------------------------------------- TOTAL RETURNS AND THE ENDING ACCOUNT VALUES IN THE GRAPHS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS IN A HYPOTHETICAL INVESTMENT FOR THE PERIODS SHOWN. THE FUND'S TOTAL RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF INCOME TAXES ON AN INDIVIDUAL'S INVESTMENT. TAXES MAY REDUCE YOUR ACTUAL INVESTMENT RETURNS ON INCOME OR GAINS PAID BY THE FUND OR ANY GAINS YOU MAY REALIZE IF YOU SELL YOUR SHARES. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. THE FUND'S INVESTMENT STRATEGY AND FOCUS CAN CHANGE OVER TIME. THE MENTION OF SPECIFIC FUND HOLDINGS DOES NOT CONSTITUTE A RECOMMENDATION BY OPPENHEIMERFUNDS, INC. CLASS A shares of the Fund were first publicly offered on 11/17/97. Unless otherwise noted, Class A returns include the maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 11/17/97. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72 months after purchase, the "since-inception" return for Class B uses Class A performance for the period after conversion. Class B shares are subject to a 0.75% annual asset-based sales charge. CLASS C shares of the Fund were first publicly offered on 11/17/97. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to a 0.75% annual asset-based sales charge. CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 17 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended August 31, 2005. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), redemption fees, or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to 18 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND exceptions described in the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (3/1/05) (8/31/05) AUGUST 31, 2005 - -------------------------------------------------------------------------------- Class A Actual $1,000.00 $1,086.40 $ 6.86 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,018.65 6.64 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 1,081.20 11.81 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,013.91 11.43 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 1,081.20 11.34 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,014.37 10.97 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 1,084.10 8.76 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,016.84 8.47 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios based on the 6-month period ended August 31, 2005 are as follows: CLASS EXPENSE RATIOS - --------------------------- Class A 1.30% - --------------------------- Class B 2.24 - --------------------------- Class C 2.15 - --------------------------- Class N 1.66 The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund's Transfer Agent that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements. - -------------------------------------------------------------------------------- 19 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF INVESTMENTS August 31, 2005 - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMON STOCKS--95.5% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--13.6% - -------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE--1.9% IG Group Holdings plc 1 3,500,000 $ 9,558,532 - -------------------------------------------------------------------------------- Ukbetting plc 1 4,000,000 4,182,139 ---------------- 13,740,671 - -------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--0.9% Nissen Co. Ltd. 539,800 6,806,098 - -------------------------------------------------------------------------------- LEISURE EQUIPMENT & PRODUCTS--0.9% Fantom Co. Ltd. 1 200,000 6,631,609 - -------------------------------------------------------------------------------- MEDIA--6.4% Balaji Telefilms Ltd. 2,250,000 7,287,905 - -------------------------------------------------------------------------------- Hurriyet Gazetecilik ve Matbaacilik AS 3,000,000 7,892,977 - -------------------------------------------------------------------------------- S. M. Entertainment Co. 325,000 4,888,254 - -------------------------------------------------------------------------------- Television Eighteen India Ltd. 541,667 4,529,226 - -------------------------------------------------------------------------------- Village Roadshow Ltd. 1 5,000,000 10,941,002 - -------------------------------------------------------------------------------- Yedang Entertainment Co. Ltd. 1,2 1,000,000 11,657,445 ---------------- 47,196,809 - -------------------------------------------------------------------------------- SPECIALTY RETAIL--0.8% French Connection Group plc 1,250,000 5,797,394 - -------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS--2.7% Arvind Mills Ltd. 1 5,000,000 15,100,004 - -------------------------------------------------------------------------------- Himatsingka Seide Ltd. 350,000 4,506,474 ---------------- 19,606,478 - -------------------------------------------------------------------------------- CONSUMER STAPLES--4.5% - -------------------------------------------------------------------------------- BEVERAGES--1.4% Kook Soon Dang Brewery Co. Ltd. 700,000 10,160,562 - -------------------------------------------------------------------------------- FOOD PRODUCTS--3.1% B&B Group Holdings Ltd. 2,3 32,000,000 6,093,944 - -------------------------------------------------------------------------------- Crown Confectionery Co. Ltd. 2 90,000 10,830,347 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- FOOD PRODUCTS Continued Thorntons plc 2,000,000 $ 6,120,128 ---------------- 23,044,419 - -------------------------------------------------------------------------------- ENERGY--4.9% - -------------------------------------------------------------------------------- OIL & GAS--4.9% Great Eastern Shipping Co. Ltd. 3,500,000 15,387,280 - -------------------------------------------------------------------------------- Gulf Keystone Petroleum Ltd. 1 9,750,000 12,478,819 - -------------------------------------------------------------------------------- Southern Cross Resources, Inc. 1,2 8,500,000 8,377,912 ---------------- 36,244,011 - -------------------------------------------------------------------------------- FINANCIALS--6.4% - -------------------------------------------------------------------------------- COMMERCIAL BANKS--1.7% Karnataka Bank Ltd. 4,500,000 12,071,550 - -------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--0.8% SFCG Co. Ltd. 25,000 6,025,574 - -------------------------------------------------------------------------------- REAL ESTATE--3.9% Great Eagle Holdings Ltd. 3,500,000 10,358,161 - -------------------------------------------------------------------------------- Hoosiers Corp. 2,000 7,395,472 - -------------------------------------------------------------------------------- Kenedix, Inc. 3,500 10,859,964 ---------------- 28,613,597 - -------------------------------------------------------------------------------- HEALTH CARE--7.0% - -------------------------------------------------------------------------------- BIOTECHNOLOGY--0.4% Norwood Immunology Ltd. 1,3 5,000,000 3,244,763 - -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--3.4% Elekta AB, B Shares 1 100,000 4,513,358 - -------------------------------------------------------------------------------- Imaging Dynamics Co. Ltd. 1 2,000,000 4,683,880 - -------------------------------------------------------------------------------- Imaging Dynamics Co. Ltd. 1 4,000,000 9,367,760 - -------------------------------------------------------------------------------- Ortivus AB, Cl. B 1 450,000 1,727,253 - -------------------------------------------------------------------------------- Xillix Technologies Corp. 1,2 15,000,000 4,738,638 ---------------- 25,030,889 20 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--1.5% Apollo Hospitals Enterprise Ltd. 1,250,000 $ 10,664,395 - -------------------------------------------------------------------------------- PHARMACEUTICALS--1.7% Norwood Abbey Ltd. 1 8,225,000 2,307,250 - -------------------------------------------------------------------------------- Tsumura & Co. 500,000 9,846,711 ---------------- 12,153,961 - -------------------------------------------------------------------------------- INDUSTRIALS--9.6% - -------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--5.0% NETellar plc 1 1,000,000 15,529,798 - -------------------------------------------------------------------------------- SBI VeriTrans Co. Ltd. 1 604 1,511,923 - -------------------------------------------------------------------------------- Trafficmaster plc 1,2 10,000,000 6,871,688 - -------------------------------------------------------------------------------- Xinhua Finance Ltd. 1 5,000 13,188,778 ---------------- 37,102,187 - -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--2.4% Electrovaya, Inc. 1,2 4,000,000 1,246,788 - -------------------------------------------------------------------------------- RHJ International Ltd. 1 100,000 2,461,231 - -------------------------------------------------------------------------------- Solarworld AG 125,000 13,663,225 ---------------- 17,371,244 - -------------------------------------------------------------------------------- MACHINERY--2.2% Fong's Industries Co. Ltd. 15,000,000 11,713,513 - -------------------------------------------------------------------------------- Railpower Technologies Corp. 1 1,250,000 4,422,729 ---------------- 16,136,242 - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--25.2% - -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--1.7% LG Telecom Ltd. 1 2,250,000 12,209,783 - -------------------------------------------------------------------------------- COMPUTERS & PERIPHERALS--0.7% Lectra 1,000,000 5,267,898 - -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--13.7% Ahnlab, Inc. 2 750,000 12,267,757 - -------------------------------------------------------------------------------- auFeminin.com SA 2 600,000 12,783,597 - -------------------------------------------------------------------------------- Emotion Corp. 1,2 300,000 7,076,274 - -------------------------------------------------------------------------------- Mobilians Co. Ltd. 1,2 1,000,000 11,412,367 - -------------------------------------------------------------------------------- NCsoft Corp. 1 150,000 10,442,481 - -------------------------------------------------------------------------------- Neowiz Corp. 1,2 400,000 8,401,325 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES Continued NHN Corp. 1 85,000 $ 11,781,465 - -------------------------------------------------------------------------------- Ninetowns Digital World Trade Holdings Ltd., ADR 1 1,250,000 6,800,000 - -------------------------------------------------------------------------------- Opera Software ASA 1,2 8,000,000 19,423,407 ---------------- 100,388,673 - -------------------------------------------------------------------------------- IT SERVICES--3.1% Travelsky Technology Ltd., Cl. H 13,000,000 11,324,980 - -------------------------------------------------------------------------------- United Internet AG 350,000 11,688,688 ---------------- 23,013,668 - -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--0.7% Bluecord Technology Corp. 1,2 966,476 5,476,036 - -------------------------------------------------------------------------------- SOFTWARE--5.3% Certicom Corp. 1,2 2,500,000 8,887,578 - -------------------------------------------------------------------------------- Duzon Digital Ware Co. Ltd. 1,2 600,000 9,340,953 - -------------------------------------------------------------------------------- Intelligent Wave, Inc. 5,000 11,749,999 - -------------------------------------------------------------------------------- MacDonald, Dettwiler & Associates Ltd. 1 300,000 8,602,839 ---------------- 38,581,369 - -------------------------------------------------------------------------------- MATERIALS--19.1% - -------------------------------------------------------------------------------- CHEMICALS--2.8% Allen-Vanguard Corp. 1,2 2,400,000 4,043,638 - -------------------------------------------------------------------------------- Hikal Ltd. 650,000 9,279,814 - -------------------------------------------------------------------------------- Micro Inks Ltd. 500,000 7,155,026 ---------------- 20,478,478 - -------------------------------------------------------------------------------- CONTAINERS & PACKAGING--0.8% Goodpack Ltd. 6,250,000 6,058,579 - -------------------------------------------------------------------------------- METALS & MINING--15.5% Centennial Coal Co. 3,000,000 12,120,297 - -------------------------------------------------------------------------------- EuroZinc Mining Corp. 1 19,000,000 13,285,034 - -------------------------------------------------------------------------------- First Quantum Minerals Ltd. 600,000 12,828,440 - -------------------------------------------------------------------------------- Gallery Gold Ltd. 1,2 25,000,000 6,355,307 - -------------------------------------------------------------------------------- Ivernia, Inc. 1 6,906,900 8,669,627 21 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- METALS & MINING Continued Ivernia, Inc. 1,3 3,200,000 $ 4,016,680 - -------------------------------------------------------------------------------- Macarthur Coal Ltd. 2,000,000 9,843,856 - -------------------------------------------------------------------------------- Minara Resources Ltd. 6,500,000 8,856,355 - -------------------------------------------------------------------------------- Paladin Resources Ltd. 1 11,000,000 14,475,032 - -------------------------------------------------------------------------------- Rio Narcea Gold Mines Ltd. 1,2 6,000,000 9,603,639 - -------------------------------------------------------------------------------- Stornoway Diamond Corp. 1 3,600,000 3,548,292 - -------------------------------------------------------------------------------- Tiberon Minerals Ltd. 1 2,000,000 3,875,153 - -------------------------------------------------------------------------------- Tiberon Minerals Ltd. 1,4 3,000,000 5,812,729 ---------------- 113,290,441 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--3.0% - -------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--1.6% Dacom Corp. 1 1,000,000 $ 11,858,011 - -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--1.4% Danal Co. Ltd. 2 1,200,000 10,373,863 - -------------------------------------------------------------------------------- UTILITIES--2.2% - -------------------------------------------------------------------------------- ELECTRIC UTILITIES--0.5% Geodynamics Ltd. 1 2,700,000 3,422,647 - -------------------------------------------------------------------------------- GAS UTILITIES--1.7% Xinao Gas Holdings Ltd. 18,000,000 12,622,798 ---------------- Total Common Stocks (Cost $598,338,110) 700,684,697
DATE STRIKE CONTRACTS - ------------------------------------------------------------------------------------------------------------- OPTIONS PURCHASED--0.0% - ------------------------------------------------------------------------------------------------------------- Norwood Immunology Ltd. Call 1 (Cost $0) 12/31/06 0.57GBP 1,250,000 98,562 UNITS - ------------------------------------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.1% - ------------------------------------------------------------------------------------------------------------- Goodpack Ltd. Wts., Exp. 4/13/07 1 781,250 269,477 - ------------------------------------------------------------------------------------------------------------- Television Eighteen India Ltd. Wts.: Exp. 3/15/06 1 41,667 198,101 Exp. 8/15/07 1 41,667 210,624 -------------- Total Rights, Warrants and Certificates (Cost $826,824) 678,202 PRINCIPAL AMOUNT - ------------------------------------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--4.8% - ------------------------------------------------------------------------------------------------------------- Undivided interest of 8.07% in joint repurchase agreement (Principal Amount/ Value $438,604,000, with a maturity value of $438,647,129) with UBS Warburg LLC, 3.54%, dated 8/31/05, to be repurchased at $35,392,480 on 9/1/05, collateralized by Federal National Mortgage Assn., 6%, 4/1/35, with a value of $447,924,090 (Cost $35,389,000) $ 35,389,000 35,389,000 - ------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $634,553,934) 100.4% 736,850,461 - ------------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.4) (2,663,738) ---------------------------- NET ASSETS 100.0% $734,186,723 ============================
22 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FOOTNOTES TO STATEMENT OF INVESTMENTS STRIKE IS REPORTED IN THE FOLLOWING CURRENCY: GBP British Pound Sterling 1. Non-income producing security. 2. Affiliated company. Represents ownership of at least 5% of the voting securities of the issuer, and is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended August 31, 2005. The aggregate fair value of securities of affiliated companies held by the Fund as of August 31, 2005 amounts to $175,262,503. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES SHARES AUGUST 31, GROSS GROSS AUGUST 31, 2004 ADDITIONS REDUCTIONS 2005 - ---------------------------------------------------------------------------------------- Ahnlab, Inc. -- 750,000 -- 750,000 Allen-Vanguard Corp. -- 2,500,000 100,000 2,400,000 auFeminin.com SA 400,000 200,000 -- 600,000 B&B Group Holdings Ltd. (formerly B&B Natural Products Ltd.) 30,000,000 2,000,000 -- 32,000,000 Bluecord Technology Corp. -- 1,000,000 33,524 966,476 Certicom Corp. -- 2,500,000 -- 2,500,000 Crisil Ltd. (formerly Credit Rating Information Services of India Ltd.) 325,000 -- 325,000* -- Crown Confectionery Co. Ltd. -- 90,000 -- 90,000 Danal Co. Ltd. -- 1,200,000 -- 1,200,000 Duzon Digital Ware Co. Ltd. -- 700,000 100,000 600,000 Electrovaya, Inc. 3,700,000 300,000 -- 4,000,000 Emotion Corp. -- 300,000 -- 300,000 G. Accion SA de CV, Series B 6,657,000 -- 6,657,000* -- Gallery Gold Ltd. -- 25,000,000 -- 25,000,000 iTouch plc 21,000,000 -- 21,000,000* -- Mobilians Co. Ltd. -- 1,000,000 -- 1,000,000 Neowiz Corp. -- 400,000 -- 400,000 Opera Software ASA 5,000,000 3,000,000 -- 8,000,000 Rio Narcea Gold Mines Ltd. -- 6,000,000 -- 6,000,000 Southern Cross Resources, Inc. -- 8,500,000 -- 8,500,000 Trafficmaster plc 6,000,000 4,000,000 -- 10,000,000 Xillix Technologies Corp. 7,000,000 8,000,000 -- 15,000,000 Yedang Entertainment Co. Ltd. 2,400,000 300,000 1,700,000 1,000,000
VALUE DIVIDEND REALIZED SEE NOTE 1 INCOME GAIN (LOSS) - ----------------------------------------------------------------------------------------- Ahnlab, Inc. $12,267,757 $ -- $ -- Allen-Vanguard Corp. 4,043,638 -- (260,933) auFeminin.com SA 12,783,597 468,578 -- B&B Group Holdings Ltd. (formerly B&B Natural Products Ltd.) 6,093,944 71,010 -- Bluecord Technology Corp. 5,476,036 -- (110,545) Certicom Corp. 8,887,578 -- -- Crisil Ltd. (formerly Credit Rating Information Services of India Ltd.) -- -- 4,705,323 Crown Confectionery Co. Ltd. 10,830,347 -- --
23 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF INVESTMENTS Continued - --------------------------------------------------------------------------------
VALUE DIVIDEND REALIZED SEE NOTE 1 INCOME GAIN (LOSS) - ---------------------------------------------------------------------------------------- Danal Co. Ltd. $ 10,373,863 $ -- $ -- Duzon Digital Ware Co. Ltd. 9,340,953 -- 196,668 Electrovaya, Inc. 1,246,788 -- -- Emotion Corp. 7,076,274 -- -- G. Accion SA de CV, Series B -- -- 2,632,071 Gallery Gold Ltd. 6,355,307 -- -- iTouch plc -- -- 6,020,497 Mobilians Co. Ltd. 11,412,367 -- -- Neowiz Corp. 8,401,325 -- -- Opera Software ASA 19,423,407 -- -- Rio Narcea Gold Mines Ltd. 9,603,639 -- -- Southern Cross Resources, Inc. 8,377,912 -- -- Trafficmaster plc 6,871,688 -- -- Xillix Technologies Corp. 4,738,638 -- -- Yedang Entertainment Co. Ltd. 11,657,445 -- 8,394,335 --------------------------------------- $175,262,503 $ 539,588 $21,577,416 =======================================
*Result of a tender offer. 3. Illiquid security. The aggregate value of illiquid securities as of August 31, 2005 was $13,355,387, which represents 1.82% of the Fund's net assets. See Note 6 of Notes to Financial Statements. 4. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $5,812,729 or 0.79% of the Fund's net assets as of August 31, 2005. DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS: GEOGRAPHIC HOLDINGS VALUE PERCENT - -------------------------------------------------------------------------------- Korea, Republic of South $154,808,532 21.0% Canada 116,011,356 15.7 India 86,390,399 11.7 Australia 68,321,746 9.3 Japan 54,195,741 7.4 United Kingdom 51,403,004 7.0 Hong Kong 40,399,883 5.5 United States 35,389,000 4.8 Germany 25,351,913 3.4 Bermuda 24,192,332 3.3 Cayman Islands 19,988,778 2.7 Norway 19,423,407 2.6 France 18,051,495 2.5 Turkey 7,892,977 1.1 Singapore 6,328,056 0.9 Sweden 6,240,611 0.8 Belgium 2,461,231 0.3 ---------------------------- Total $736,850,461 100.0% ============================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 24 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF ASSETS AND LIABILITIES August 31, 2005 - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- ASSETS - ------------------------------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments: Unaffiliated companies (cost $460,163,144) $ 561,587,958 Affiliated companies (cost $174,390,790) 175,262,503 -------------- 736,850,461 - ------------------------------------------------------------------------------------------------------- Cash 283,930 - ------------------------------------------------------------------------------------------------------- Unrealized appreciation on foreign currency contracts 1,324 - ------------------------------------------------------------------------------------------------------- Receivables and other assets: Shares of beneficial interest sold 5,431,933 Investments sold 1,662,497 Interest and dividends 258,582 Other 9,524 -------------- Total assets 744,498,251 - ------------------------------------------------------------------------------------------------------- LIABILITIES - ------------------------------------------------------------------------------------------------------- Unrealized depreciation on foreign currency contracts 794 - ------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 8,074,154 Shares of beneficial interest redeemed 1,227,285 Foreign capital gains tax 382,591 Distribution and service plan fees 279,060 Transfer and shareholder servicing agent fees 116,672 Shareholder communications 70,477 Trustees' compensation 28,573 Other 131,922 -------------- Total liabilities 10,311,528 - ------------------------------------------------------------------------------------------------------- NET ASSETS $ 734,186,723 ============== - ------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ------------------------------------------------------------------------------------------------------- Paid-in capital $ 576,175,968 - ------------------------------------------------------------------------------------------------------- Accumulated net investment loss (2,901,241) - ------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 58,987,552 - ------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 101,924,444 -------------- NET ASSETS $ 734,186,723 ==============
25 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF ASSETS AND LIABILITIES Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - -------------------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $552,861,084 and 28,384,298 shares of beneficial interest outstanding) $19.48 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $20.67 - -------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $78,468,722 and 4,150,526 shares of beneficial interest outstanding) $18.91 - -------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $86,184,200 and 4,560,322 shares of beneficial interest outstanding) $18.90 - -------------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $16,672,717 and 873,669 shares of beneficial interest outstanding) $19.08
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 26 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF OPERATIONS For the Year Ended August 31, 2005 - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------- INVESTMENT INCOME - --------------------------------------------------------------------------------------- Dividends: Unaffiliated companies (net of foreign withholding taxes of $248,325) $ 4,565,576 Affiliated companies 539,588 - --------------------------------------------------------------------------------------- Interest 576,843 ------------ Total investment income 5,682,007 - --------------------------------------------------------------------------------------- EXPENSES - --------------------------------------------------------------------------------------- Management fees 3,746,252 - --------------------------------------------------------------------------------------- Distribution and service plan fees: Class A 846,886 Class B 601,144 Class C 554,999 Class N 47,923 - --------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 662,014 Class B 193,366 Class C 141,451 Class N 35,297 - --------------------------------------------------------------------------------------- Shareholder communications: Class A 71,501 Class B 34,345 Class C 19,924 Class N 2,629 - --------------------------------------------------------------------------------------- Custodian fees and expenses 250,542 - --------------------------------------------------------------------------------------- Trustees' compensation 19,806 - --------------------------------------------------------------------------------------- Other 106,558 ------------ Total expenses 7,334,637 Less reduction to custodian expenses (3,877) Less waivers and reimbursements of expenses (8,128) ------------ Net expenses 7,322,632 - --------------------------------------------------------------------------------------- NET INVESTMENT LOSS (1,640,625)
27 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF OPERATIONS For the Year Ended August 31, 2005 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN - -------------------------------------------------------------------------------------- Net realized gain on: Investments: Unaffiliated companies $ 48,397,104 Affiliated companies 21,577,416 Foreign currency transactions 8,662,869 ------------ Net realized gain 78,637,389 - -------------------------------------------------------------------------------------- Net change in unrealized appreciation on: Investments (net of foreign capital gains tax of $382,591) 69,045,064 Translation of assets and liabilities denominated in foreign currencies 2,244,739 ------------ Net change in unrealized appreciation 71,289,803 - -------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $148,286,567
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED AUGUST 31, 2005 2004 - ---------------------------------------------------------------------------------------------- OPERATIONS - ---------------------------------------------------------------------------------------------- Net investment loss $ (1,640,625) $ (1,247,030) - ---------------------------------------------------------------------------------------------- Net realized gain 78,637,389 56,311,208 - ---------------------------------------------------------------------------------------------- Net change in unrealized appreciation 71,289,803 1,508,051 ------------------------------ Net increase in net assets resulting from operations 148,286,567 56,572,229 - ---------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ---------------------------------------------------------------------------------------------- Dividends from net investment income: Class A (1,819,047) (947,584) Class B -- -- Class C (41,765) (10,140) Class N (36,939) (5,408) - ---------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (5,454,270) -- Class B (1,056,552) -- Class C (901,322) -- Class N (131,786) -- - ---------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - ---------------------------------------------------------------------------------------------- Net increase in net assets resulting from beneficial interest transactions: Class A 245,743,351 29,773,580 Class B 16,989,797 12,191,038 Class C 37,805,237 15,110,445 Class N 9,886,814 2,615,556 - ---------------------------------------------------------------------------------------------- NET ASSETS - ---------------------------------------------------------------------------------------------- Total increase 449,270,085 115,299,716 - ---------------------------------------------------------------------------------------------- Beginning of period 284,916,638 169,616,922 ------------------------------ End of period (including accumulated net investment loss of $2,901,241 and $622,352, respectively) $ 734,186,723 $ 284,916,638 ==============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
CLASS A YEAR ENDED AUGUST 31, 2005 2004 2003 2002 2001 - -------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 14.14 $ 10.51 $ 7.98 $ 7.89 $ 15.23 - -------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.02) 1 (.04) .01 .01 .04 Net realized and unrealized gain (loss) 5.78 3.73 2.52 .16 (6.65) ------------------------------------------------------ Total from investment operations 5.76 3.69 2.53 .17 (6.61) - -------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.11) (.06) -- (.08) (.11) Distributions from net realized gain (.31) -- -- -- (.62) ------------------------------------------------------ Total dividends and/or distributions to shareholders (.42) (.06) -- (.08) (.73) - -------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 19.48 $ 14.14 $ 10.51 $ 7.98 $ 7.89 ====================================================== - -------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 41.35% 35.20% 31.70% 2.20% (44.50)% - -------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $552,861 $204,938 $132,342 $40,089 $27,991 - -------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $353,479 $207,202 $ 48,879 $35,136 $39,311 - -------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income (loss) (0.12)% (0.26)% 0.29% (0.17)% 0.36% Total expenses 1.31% 1.34% 1.69% 2.16% 1.58% Expenses after payments and waivers and reduction to custodian expenses N/A 4 N/A 4 1.60% 1.88% N/A 4 - -------------------------------------------------------------------------------------------------------- Portfolio turnover rate 51% 124% 53% 62% 145%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an 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. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
CLASS B YEAR ENDED AUGUST 31, 2005 2004 2003 2002 2001 - ------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 13.77 $ 10.28 $ 7.87 $ 7.77 $ 14.99 - ------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment loss (.17) 1 (.13) (.02) (.07) (.03) Net realized and unrealized gain (loss) 5.62 3.62 2.43 .19 (6.57) ---------------------------------------------------- Total from investment operations 5.45 3.49 2.41 .12 (6.60) - ------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- (.02) -- 2 Distributions from net realized gain (.31) -- -- -- (.62) ---------------------------------------------------- Total dividends and/or distributions to shareholders (.31) -- -- (.02) (.62) - ------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 18.91 $ 13.77 $ 10.28 $ 7.87 $ 7.77 ==================================================== - ------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 3 40.07% 33.95% 30.62% 1.51% (44.99)% - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 78,469 $ 43,478 $ 23,355 $18,859 $14,989 - ------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 60,395 $ 37,393 $ 16,884 $16,868 $20,147 - ------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment loss (1.02)% (1.14)% (0.28)% (0.94)% (0.33)% Total expenses 2.23% 2.35% 2.85% 2.93% 2.34% Expenses after payments and waivers and reduction to custodian expenses N/A 5,6 2.31% 2.38% 2.65% N/A 5 - ------------------------------------------------------------------------------------------------------ Portfolio turnover rate 51% 124% 53% 62% 145%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Less than $0.005 per share. 3. Assumes an 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. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. 6. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 31 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS C YEAR ENDED AUGUST 31, 2005 2004 2003 2002 2001 - ----------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ----------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 13.76 $ 10.27 $ 7.86 $ 7.77 $ 14.97 - ----------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.16) 1 (.09) (.02) (.06) (.03) Net realized and unrealized gain (loss) 5.63 3.59 2.43 .16 (6.55) --------------------------------------------------- Total from investment operations 5.47 3.50 2.41 .10 (6.58) - ----------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.02) (.01) -- (.01) -- Distributions from net realized gain (.31) -- -- -- (.62) --------------------------------------------------- Total dividends and/or distributions to shareholders (.33) (.01) -- (.01) (.62) - ----------------------------------------------------------------------------------------------------- Net asset value, end of period $ 18.90 $ 13.76 $ 10.27 $ 7.86 $ 7.77 =================================================== - ----------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 40.23% 34.05% 30.66% 1.35% (44.93)% - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 86,184 $ 32,401 $12,793 $6,558 $ 5,142 - ----------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 55,819 $ 26,486 $ 7,489 $6,180 $ 7,095 - ----------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment loss (0.96)% (1.00)% (0.38)% (0.95)% (0.32)% Total expenses 2.14% 2.19% 2.69% 2.94% 2.34% Expenses after payments and waivers and reduction to custodian expenses N/A 4 N/A 4,5 2.39% 2.66% N/A 4 - ----------------------------------------------------------------------------------------------------- Portfolio turnover rate 51% 124% 53% 62% 145%
1. Per share amounts calculated based on the average shares outstanding during the period. 2. Assumes an 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. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 3. Annualized for periods of less than one full year. 4. Reduction to custodian expenses less than 0.01%. 5. Voluntary waiver of transfer agent fees less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 32 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
CLASS N YEAR ENDED AUGUST 31, 2005 2004 2003 2002 2001 1 - ----------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ----------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 13.90 $ 10.35 $ 7.89 $ 7.87 $ 9.08 - ----------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.09) 2 (.05) (.03) .08 .07 Net realized and unrealized gain (loss) 5.67 3.64 2.49 .07 (1.28) --------------------------------------------------- Total from investment operations 5.58 3.59 2.46 .15 (1.21) - ----------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.09) (.04) -- (.13) -- Distributions from net realized gain (.31) -- -- -- -- --------------------------------------------------- Total dividends and/or distributions to shareholders (.40) (.04) -- (.13) -- - ----------------------------------------------------------------------------------------------------- Net asset value, end of period $ 19.08 $ 13.90 $ 10.35 $ 7.89 $ 7.87 =================================================== - ----------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 40.76% 34.70% 31.18% 1.99% (13.33)% - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 16,673 $ 4,101 $ 1,128 $ 406 $ 6 - ----------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 9,698 $ 2,531 $ 625 $ 151 $ 2 - ----------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income (loss) (0.51)% (0.50)% 0.25% (0.33)% 5.85% Total expenses 1.75% 1.78% 1.96% 2.32% 1.94% Expenses after payments and waivers and reduction to custodian expenses 1.68% 1.75% 1.90% 2.04% N/A 5 - ----------------------------------------------------------------------------------------------------- Portfolio turnover rate 51% 124% 53% 62% 145%
1. For the period from March 1, 2001 (inception of offering) to August 31, 2001. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an 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. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 4. Annualized for periods of less than one full year. 5. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 33 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer International Small Company Fund (the Fund) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to seek long-term capital appreciation. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C and Class N shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. Class B shares will automatically convert to Class A shares six years after the date of purchase. The Fund assesses a 2% fee on the proceeds of fund shares that are redeemed (either by selling or exchanging to another Oppenheimer fund) within 30 days of their purchase. The fee, which is retained by the Fund, is accounted for as an addition to paid-in capital. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities listed or traded on National Stock Exchanges or other domestic exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. Securities traded on NASDAQ are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing "bid" and "asked" prices, and if not, at the closing bid price. Securities traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, in the country that is identified by the portfolio pricing service, prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund's assets are valued. Securities may be valued primarily 34 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Trustees. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars as of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Foreign exchange rates may be valued primarily using dealer supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. 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. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. These balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. 35 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued FEDERAL TAXES. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders, therefore, no federal income or excise tax provision is required. The tax components of capital shown in the table below represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes. NET UNREALIZED APPRECIATION BASED ON COST OF SECURITIES AND UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES ------------------------------------------------------------------------ $ 33,109,539 $ 27,464,713 $ 254,098 $ 97,717,772 1. The Fund had $254,098 of post-October foreign currency losses which were deferred. 2. During the fiscal year ended August 31, 2005, the Fund did not utilize any capital loss carryforward. 3. During the fiscal year ended August 31, 2004, the Fund utilized $49,704,115 of capital loss carryforward to offset capital gains realized in that fiscal year. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. Accordingly, the following amounts have been reclassified for August 31, 2005. Net assets of the Fund were unaffected by the reclassifications. REDUCTION TO REDUCTION TO ACCUMULATED ACCUMULATED NET INCREASE TO NET INVESTMENT REALIZED GAIN PAID-IN CAPITAL LOSS ON INVESTMENTS 4 ------------------------------------------------------------------------ $ 10,109,778 $ 1,259,487 $ 11,369,265 4. $10,109,778, including $4,583,831 of long-term capital gain, was distributed in connection with Fund share redemptions. 36 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND The tax character of distributions paid during the years ended August 31, 2005 and August 31, 2004 was as follows: YEAR ENDED YEAR ENDED AUGUST 31, 2005 AUGUST 31, 2004 ------------------------------------------------------------ Distributions paid from: Ordinary income $ 1,896,893 $ 963,132 Long-term capital gain 7,544,788 -- --------------------------------- Total $ 9,441,681 $ 963,132 ================================= The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of August 31, 2005 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $ 638,759,321 Federal tax cost of other investments 1,738,184 ------------- Total federal tax cost $ 640,497,505 ============= Gross unrealized appreciation $ 151,566,355 Gross unrealized depreciation (53,848,583) ------------- Net unrealized appreciation $ 97,717,772 ============= Certain foreign countries impose a tax on capital gains which is accrued by the Fund based on unrealized appreciation, if any, on affected securities. The tax is paid when the gain is realized. - -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during the years of service. During the year ended August 31, 2005, the Fund's projected benefit obligations were increased by $10,531 and payments of $288 were made to retired trustees, resulting in an accumulated liability of $21,356 as of August 31, 2005. The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the Plan. 37 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- CUSTODIAN FEES. Custodian Fees and Expenses in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts at a rate equal to the Federal Funds Rate plus 0.50%. The Reduction to Custodian Expenses line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. 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 BENEFICIAL INTEREST The Fund has authorized an unlimited number of no par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
YEAR ENDED AUGUST 31, 2005 YEAR ENDED AUGUST 31, 2004 SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------- CLASS A Sold 19,910,644 $ 350,648,595 19,018,040 $ 259,059,078 Dividends and/or distributions reinvested 400,661 6,462,659 54,884 714,050 Redeemed (6,423,668) (111,367,903) 1 (17,164,279) (229,999,548) ------------------------------------------------------------- Net increase 13,887,637 $ 245,743,351 1,908,645 $ 29,773,580 =============================================================
38 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
YEAR ENDED AUGUST 31, 2005 YEAR ENDED AUGUST 31, 2004 SHARES AMOUNT SHARES AMOUNT - ---------------------------------------------------------------------------------------- CLASS B Sold 2,035,409 $ 34,453,596 1,929,304 $ 26,176,829 Dividends and/or distributions reinvested 62,820 990,049 -- -- Redeemed (1,106,018) (18,453,848) 1 (1,042,024) (13,985,791) ------------------------------------------------------------ Net increase 992,211 $ 16,989,797 887,280 $ 12,191,038 ============================================================ - --------------------------------------------------------------------------------------- CLASS C Sold 3,030,714 $ 51,797,437 2,151,199 $ 29,064,769 Dividends and/or distributions reinvested 52,750 830,810 729 9,296 Redeemed (877,446) (14,823,010) 1 (1,042,730) (13,963,620) ------------------------------------------------------------ Net increase 2,206,018 $ 37,805,237 1,109,198 $ 15,110,445 ============================================================ - --------------------------------------------------------------------------------------- CLASS N Sold 706,297 $ 12,113,529 317,194 $ 4,290,090 Dividends and/or distributions reinvested 10,338 163,864 421 5,404 Redeemed (138,073) (2,390,579) 1 (131,418) (1,679,938) ------------------------------------------------------------ Net increase 578,562 $ 9,886,814 186,197 $ 2,615,556 ============================================================
1. Net of redemption fees of $16,984, $2,902, $2,682 and $466 for Class A, Class B, Class C and Class N, respectively. - -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the year ended August 31, 2005, were as follows: PURCHASES SALES ----------------------------------------------------- Investment securities $ 509,808,196 $ 234,901,246 - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee at an annual rate of 0.80% of the first $250 million of average annual net assets of the Fund, 0.77% of the next $250 million, 0.75% of the next $500 million, 0.69% of the next $1 billion and 0.67% of average annual net assets in excess of $2 billion. - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended August 31, 2005, the Fund paid $974,668 to OFS for services to the Fund. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. 39 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions quarterly for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% per year on Class B and Class C shares and 0.25% per year on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the plan at August 31, 2005 for Class B, Class C and Class N shares were $995,020, $675,418 and $101,295, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - -------------------------------------------------------------------------------------------------------- August 31, 2005 $ 465,514 $ -- $ 125,575 $ 24,467 $ 10,595 - --------------------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. During the year ended August 31, 2005, OFS waived $1,700 and $6,428 for 40 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND Class B and Class N shares, respectively. This undertaking may be amended or withdrawn at any time. - -------------------------------------------------------------------------------- 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 to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. The Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Contracts closed or settled with the same broker are recorded as net realized gains or losses. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of August 31, 2005, the Fund had outstanding foreign currency contracts as follows:
CONTRACT VALUATION AS OF EXPIRATION AMOUNT AUGUST 31, UNREALIZED UNREALIZED CONTRACT DESCRIPTION DATES (000S) 2005 APPRECIATION DEPRECIATION - ---------------------------------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE Australian Dollar [AUD] 9/1/05-9/2/05 134AUD $ 100,749 $ 675 $ -- Hong Kong Dollar [HKD] 9/1/05 1,166HKD 150,084 -- 22 Indian Rupee [INR] 9/1/05 57,888INR 1,314,890 -- 732 Japanese Yen [JPY] 9/1/05-9/2/05 19,006JPY 171,707 649 40 --------------------------- Total unrealized appreciation and depreciation $ 1,324 $ 794 ===========================
- -------------------------------------------------------------------------------- 6. ILLIQUID SECURITIES As of August 31, 2005, investments in securities included issues that are illiquid. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund will not invest more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid securities. Securities that are illiquid are marked with the applicable footnote on the Statement of Investments. - -------------------------------------------------------------------------------- 7. SUBSEQUENT EVENT Effective September 2, 2005, the Fund will offer Class Y shares. 41 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 8. LITIGATION A consolidated amended complaint has been filed as putative derivative and class actions against the Manager, OFS and the Distributor, as well as 51 of the Oppenheimer funds (as "Nominal Defendants") including the Fund, 30 present and former Directors or Trustees and 8 present and former officers of the funds. This complaint, initially filed in the U.S. District Court for the Southern District of New York on January 10, 2005 and amended on March 4, 2005, consolidates into a single action and amends six individual previously-filed putative derivative and class action complaints. Like those prior complaints, the complaint alleges that the Manager charged excessive fees for distribution and other costs, improperly used assets of the funds in the form of directed brokerage commissions and 12b-1 fees to pay brokers to promote sales of the funds, and failed to properly disclose the use of assets of the funds to make those payments in violation of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Also, like those prior complaints, the complaint further alleges that by permitting and/or participating in those actions, the Directors/Trustees and the Officers breached their fiduciary duties to shareholders of the funds under the Investment Company Act of 1940 and at common law. The complaint seeks unspecified compensatory and punitive damages, rescission of the funds' investment advisory agreements, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. The defendants believe that the allegations contained in the Complaints are without merit and that they have meritorious defenses against the claims asserted. The defendants intend to defend these lawsuits vigorously and to contest any claimed liability. The defendants believe that it is premature to render any opinion as to the likelihood of an outcome unfavorable to them and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. 42 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND: We have audited the accompanying statement of assets and liabilities of Oppenheimer International Small Company Fund, including the statement of investments, as of August 31, 2005, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 August 31, 2005, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer International Small Company Fund as of August 31, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles. KPMG LLP Denver, Colorado October 17, 2005 43 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2006, if applicable, shareholders of record will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 2005. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends and distributions of $0.4199, $0.3149, $0.3295 and $0.4031 per share were paid to Class A, Class B, Class C and Class N shareholders, respectively, on December 6, 2004, of which $0.3149 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 the capital assets held for more than one year (long-term capital gains). None of the dividends paid by the Fund during the year ended August 31, 2005 are eligible for the corporate dividend-received deduction. A portion, if any, of the dividends paid by the Fund during the fiscal year ended August 31, 2005 which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. $3,966,897 of the Fund's fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2006, shareholders of record will receive information regarding the percentage of distributions that are eligible for lower individual income tax rates. The Fund has elected the application of Section 853 of the Internal Revenue Code to permit shareholders to take a federal income tax credit or deduction, at their option, on a per share basis for an aggregate amount of $2,353,346 of foreign income taxes paid by the Fund during the fiscal year ended August 31, 2005. A separate notice will be mailed to each shareholder, which will reflect the proportionate share of such foreign taxes which must be treated by shareholders as gross income for federal income tax purposes. 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. 44 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND REPORT OF SHAREHOLDER MEETING Unaudited - -------------------------------------------------------------------------------- On August 17, 2005, a joint special meeting of shareholders was held at which the eleven Trustees identified below were elected (Proposal No. 1). The meeting was adjourned until September 16, 2005 to allow the Fund to solicit additional votes for the proposals to change, add or eliminate certain fundamental investment policies (Proposal No. 2) as described in the Fund's proxy statement for that meeting. On September 16, 2005, the meeting was reconvened and the proposals regarding changes in, or the addition or elimination of, certain fundamental investment policies were approved (Proposal No. 2). The following is a report of the votes cast: - --------------------------------------------------------------------------------
PROPOSAL NO.1 NOMINEE FOR WITHHELD TOTAL - -------------------------------------------------------------------------------- TRUSTEES Matthew P. Fink 17,989,942.848 326,188.190 18,316,131.038 Robert G. Galli 17,979,195.742 336,935.296 18,316,131.038 Phillip A. Griffiths 17,985,201.646 330,929.392 18,316,131.038 Mary F. Miller 17,977,559.713 338,571.325 18,316,131.038 Joel W. Motley 17,987,475.736 328,655.302 18,316,131.038 John V. Murphy 17,990,459.673 325,671.365 18,316,131.038 Kenneth A. Randall 17,971,316.575 344,814.463 18,316,131.038 Russell S. Reynolds, Jr. 17,964,742.515 351,388.523 18,316,131.038 Joseph M. Wikler 17,982,932.808 333,198.230 18,316,131.038 Peter I. Wold 17,986,979.675 329,151.363 18,316,131.038 Clayton K. Yeutter 17,947,748.964 368,382.074 18,316,131.038
- -------------------------------------------------------------------------------- PROPOSAL NO. 2: TO APPROVE A MODIFICATION TO THE FUND'S FUNDAMENTAL INVESTMENT OBJECTIVE
BROKER FOR AGAINST ABSTAIN NON-VOTES TOTAL - -------------------------------------------------------------------------------- 2A: Borrowing 11,357,048.968 575,601.622 573,456.552 3,693,240.000 16,199,347.142 2B: Concentration of Investments 11,477,333.388 469,231.246 559,542.508 3,693,240.000 16,199,347.142 2C: Diversification of Investments 11,535,773.396 427,842.315 542,491.431 3,693,240.000 16,199,347.142 2H: Lending 11,255,923.786 650,600.302 599,583.054 3,693,240.000 16,199,347.142 2K: Real Estate and Commodities 11,442,952.000 470,365.044 592,790.098 3,693,240.000 16,199,347.142 2L: Senior Securities 11,443,505.771 446,045.697 616,555.674 3,693,240.000 16,199,347.142
45 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public Reference Room in Washington D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. 46 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Each year, the Board of Trustees (the "Board"), including a majority of the independent Trustees, is required to determine whether to renew the Fund's advisory agreement. The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Manager provide, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. The Board employs an independent consultant to prepare a report that provides information, including comparative information, that the Board requests for this purpose. In addition, the Board receives information throughout the year regarding Fund services, fees, expenses and performance. NATURE AND EXTENT OF SERVICES. In considering the renewal of the Fund's advisory agreement for the current year, the Board evaluated the nature and extent of the services provided by the Manager and its affiliates. The Manager provides the Fund with office space, facilities and equipment; administrative, accounting, clerical, legal and compliance personnel; securities trading services; oversight of third party service providers and the services of the portfolio manager and the Manager's investment team, who provide research, analysis and other advisory services in regard to the Fund's investments. QUALITY OF SERVICES. The Board also considered the quality of the services provided and the quality of the Manager's resources that were available to the Fund. The Board noted that the Manager has had over forty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Manager's administrative, accounting, legal and compliance services and information the Board received regarding the experience and professional qualifications of the Manager's personnel and the size and functions of its staff. The Board members also considered their experiences as directors or trustees of the Fund and other funds advised by the Manager. The Board received and reviewed information regarding the quality of services provided by affiliates of the Manager, which it also reviews at other times during the year in connection with the renewal of the Fund's service agreements. The Board considered that the relatively low redemption rate for funds advised by the Manager provided an indication of shareholder satisfaction with the overall level of services provided by the Manager. The Board was aware that there are alternatives to retaining the Manager. PORTFOLIO MANAGEMENT SERVICES AND PERFORMANCE. In its evaluation of the quality of the portfolio management services to be provided, the Board considered the experience of Rohit Sah and the Manager's Global investment team and analysts. Mr. Sah has been primarily responsible for the day-to-day management of the Fund's portfolio since January 2004. He has been a Vice President of the Fund and of the Manager since 2004 47 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited / Continued - -------------------------------------------------------------------------------- and has had over nine years of experience managing fixed income and global/ international investments. The Board also reviewed information, prepared by the Manager and by the independent consultant, comparing the Fund's historical performance to relevant market indices and to the performance of other international small/mid cap growth funds advised by other investment advisers. The Board also receives and reviews comparative performance information regarding the Fund and other funds at each Board meeting. The Board considered that the Fund's one-year and three-year performance were better than its peer group average, although its five-year performance was below its peer group average. MANAGEMENT FEES AND EXPENSES. The Board also reviewed information, including comparative information, regarding the fees paid to the Manager and its affiliates and the other expenses borne by the Fund. The independent consultant provided comparative data in regard to the fees and expenses of the Fund, other international small/mid cap growth and core funds and other funds with comparable asset levels and distribution features. The Board considered that the Fund's management fees and total expenses were lower than its peer group average. In addition, the Board evaluated the comparability of the fees charged and the services provided to the Fund to the fees charged and services provided to other types of entities advised by the Manager. PROFITABILITY OF THE MANAGER AND AFFILIATES. The Board also reviewed information regarding the cost of services provided by the Manager and its affiliates and the Manager's profitability. The Board considered that the Manager must be able to pay and retain experienced professional personnel at competitive rates to provide services to the Fund and that maintaining the financial viability of the Manager is important in order for the Manager to continue to provide significant services to the Fund and its shareholders. In addition the Board considered information that was provided regarding the direct and indirect benefits the Manager receives as a result of its relationship with the Fund, including compensation paid to the Manager's affiliates and research provided to the Manager in connection with permissible brokerage arrangements (soft dollar arrangements). ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may realize economies of scale in managing and supporting the Fund and the current level of Fund assets in relation to the Fund's breakpoint schedule for its management fees. The Board considered that the Fund has recently experienced significant asset growth but that, based on current asset levels, the Fund is not yet approaching its last management fee breakpoint. 48 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND CONCLUSIONS. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and the independent Trustees. Fund counsel is independent of the Manager within the meaning and intent of the Securities and Exchange Commission Rules. Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, concluded that the nature, extent and quality of the services provided to the Fund by the Manager are a benefit to the Fund and in the best interest of the Fund's shareholders and that the amount and structure of the compensation received by the Manager and its affiliates are reasonable in relation to the services provided. Accordingly, the Board elected to continue the advisory agreement for another year. In arriving at this decision, the Board did not single out any factor or factors as being more important than others, but considered all of the factors together. The Board judged the terms and conditions of the advisory agreement, including the management fee, in light of all of the surrounding circumstances. 49 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND TRUSTEES AND OFFICERS Unaudited - --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------- NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER THE FUND, LENGTH OF TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF PORTFOLIOS IN THE FUND COMPLEX SERVICE, AGE CURRENTLY OVERSEEN INDEPENDENT TRUSTEES THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. CLAYTON K. YEUTTER, Director of American Commercial Lines (barge company) (since January 2005); Chairman of the Board of Attorney at Hogan & Hartson (law firm) (since June 1993); Director of Trustees (since 2003); Danielson Holding Corp. (waste-to-energy company) (since 2002); Director of Trustee (since 1997) Weyerhaeuser Corp. (1999-April 2004); Director of Caterpillar, Inc. Age: 74 (1993-December 2002); Director of ConAgra Foods (1993-2001); Director of Texas Instruments (1993-2001); Director of FMC Corporation (1993-2001). Oversees 38 portfolios in the OppenheimerFunds complex. MATTHEW P. FINK, Trustee of the Committee for Economic Development (policy research Trustee (since 2005) foundation) (since 2005); Director of ICI Education Foundation (education Age: 64 foundation) (since October 1991); President of the Investment Company Institute (trade association) (1991-2004); Director of ICI Mutual Insurance Company (insurance company) (1991-2004). Oversees 38 portfolios in the OppenheimerFunds complex. ROBERT G. GALLI, A trustee or director of other Oppenheimer funds. Oversees 48 portfolios in Trustee (since 1997) the OppenheimerFunds complex. Age: 72 PHILLIP A. GRIFFITHS, Director of GSI Lumonics Inc. (precision medical equipment supplier) (since Trustee (since 1999) 2001); Trustee of Woodward Academy (since 1983); Senior Advisor of The Age: 67 Andrew W. Mellon Foundation (since 2001); Member of the National Academy of Sciences (since 1979); Member of the American Philosophical Society (since 1996); Council on Foreign Relations (since 2002); Director of the Institute for Advanced Study (1991-2004); Director of Bankers Trust New York Corporation (1994-1999). Oversees 38 portfolios in the OppenheimerFunds complex. MARY F. MILLER, Trustee of the American Symphony Orchestra (not-for-profit) (since October Trustee (since 2004) 1998); and Senior Vice President and General Auditor of American Express Age: 62 Company (financial services company) (July 1998-February 2003). Oversees 38 portfolios in the OppenheimerFunds complex. JOEL W. MOTLEY, Director of Columbia Equity Financial Corp. (privately-held financial Trustee (since 2002) adviser) (since 2002); Managing Director of Carmona Motley, Inc. Age: 53 (privately-held financial adviser) (since January 2002); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial adviser) (January 1998-December 2001). Oversees 38 portfolios in the OppenheimerFunds complex. KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric utility holding company) Trustee (since 1997) (since February 1972); Former Director of Prime Retail, Inc. (real estate Age: 78 investment trust), Dominion Energy Inc. (electric power and oil & gas producer), Lumbermens Mutual Casualty Company, American Motorists Insurance Company and American Manufacturers Mutual Insurance Company; Former President and Chief Executive Officer of The Conference Board, Inc. (international economic and business research). Oversees 38 portfolios in the OppenheimerFunds complex.
50 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. (corporate governance Trustee (since 1997) consulting and executive recruiting) (since 1993); Life Trustee of Age: 73 International House (non-profit educational organization); Former Trustee of The Historical Society of the Town of Greenwich. Oversees 38 portfolios in the OppenheimerFunds complex. JOSEPH M. WIKLER, Director of the following medical device companies: Medintec (since 1992) Trustee (since 2005) and Cathco (since 1996); Director of Lakes Environmental Association (since Age: 64 1996); Member of the Investment Committee of the Associated Jewish Charities of Baltimore (since 1994); Director of Fortis/Hartford mutual funds (1994-December 2001). Oversees 39 portfolios in the OppenheimerFunds complex. PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and gas exploration and Trustee (since 2005) production company) (since 1994); Vice President, Secretary and Treasurer Age: 57 of Wold Trona Company, Inc. (soda ash processing and production) (since 1996); Vice President of Wold Talc Company, Inc. (talc mining) (since 1999); Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Director and Chairman of the Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and Director of PacifiCorp. (electric utility) (1995-1999). Oversees 39 portfolios in the OppenheimerFunds complex. - ---------------------------------------------------------------------------------------------------------- INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL CENTER, 225 LIBERTY AND OFFICER STREET, 11TH FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM AND AS AND OFFICER FOR AN ANNUAL TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED TRUSTEE DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES. JOHN V. MURPHY, Chairman, Chief Executive Officer and Director (since June 2001) and President and Principal President (since September 2000) of the Manager; President and Director or Executive Officer (since Trustee of other Oppenheimer funds; President and Director of OAC and of 2001) and Trustee (since Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the 2001) Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc. Age: 56 (subsidiary of the Manager) (since November 2001); Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July 2001); Director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and Director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC's parent company) (since February 1997); Director of DLB Acquisition Corporation (holding company parent of Babson Capital Management LLC) (since June 1995); Member of the Investment Company Institute's Board of Governors (since October 3, 2003); Chief Operating Officer of the Manager (September 2000-June 2001); President and Trustee of MML Series Investment Fund and MassMutual Select Funds (open-end investment companies) (November 1999-November 2001); Director of C.M. Life Insurance Company (September 1999-August 2000); President, Chief Executive Officer and Director of MML Bay State Life Insurance Company (September 1999-August 2000); Director of Emerald Isle Bancorp and Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998). Oversees 87 portfolios as a Director or Trustee and as an officer in the OppenheimerFunds complex.
51 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- OTHER OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MR. SAH OF THE FUND AND MR. ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY 10281-1008, AND FOR MR. WIXTED AND MR. VANDEHEY, 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. ROHIT SAH, Vice President of the Manager since January 2004; an officer of 1 portfolio Vice President in the OppenheimerFunds complex. Formerly Assistant Vice President and (since 2004) Assistant Portfolio Manager of the Manager (December 2000 - December 2003). Age: 40 An equity analyst of the Manager (June 1996-December 2000). MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer of the Manager (since Vice President and Chief March 2004); Vice President of OppenheimerFunds Distributor, Inc., Compliance Officer (since Centennial Asset Management Corporation and Shareholder Services, Inc. 2004) (since June 1983). Former Vice President and Director of Internal Audit of Age: 55 the Manager (1997-February 2004). An officer of 87 portfolios in the OppenheimerFunds complex. BRIAN W. WIXTED, Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer and Principal Treasurer of the following: HarbourView Asset Management Corporation, Financial and Accounting Shareholder Financial Services, Inc., Shareholder Services, Inc., Officer (since 1999) Oppenheimer Real Asset Management Corporation, and Oppenheimer Partnership Age: 46 Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. (since May 2000), OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March 1999), Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of Bankers Trust Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 87 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since Secretary (since 2001) March 2002) of the Manager; General Counsel and Director of the Distributor Age: 57 (since December 2001); General Counsel of Centennial Asset Management Corporation (since December 2001); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November 2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); Senior Vice President (May 1985-December 2003), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the following: Shareholder Services, Inc. (May 1985-November 2001),
52 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND ROBERT G. ZACK, Shareholder Financial Services, Inc. (November 1989-November 2001), and Continued OppenheimerFunds International Ltd. (September 1997-November 2001). An officer of 87 portfolios in the OppenheimerFunds complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST, BY CALLING 1.800.525.7048. 53 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Board of Trustees of the registrant has determined that the registrant does not have an audit committee financial expert serving on its Audit Committee. In this regard, no member of the Audit Committee was identified as having all of the technical attributes identified in Instruction 2(b) to Item 3 of Form N-CSR to qualify as an "audit committee financial expert," whether through the type of specialized education or experience described in that Instruction. The Board has concluded that while the members of the Audit Committee collectively have the necessary attributes and experience required to serve effectively as an Audit Committee, no single member possesses all of the required technical attributes through the particular methods of education or experience set forth in the Instructions to be designated as an audit committee financial expert. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) Audit Fees The principal accountant for the audit of the registrant's annual financial statements billed $18,000 in fiscal 2005 and $18,000 in fiscal 2004. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $132,059 in fiscal 2005 and $39,500 in fiscal 2004 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services: internal control reviews. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees in fiscal 2005 and $11,825 in fiscal 2004 to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $5,000 in fiscal 2005 and $6,000 in fiscal 2004 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services: Computations of capital gain tax liability, preparation of tax returns, preparation of Form 5500 and tax consultations on pass through of foreign withholding taxes and mortgage dollar roll transactions. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. (e) (1) During its regularly scheduled periodic meetings, the registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting. Under applicable laws, pre-approval of non-audit services maybe waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. (2) 100% (f) Not applicable as less than 50%. (g) The principal accountant for the audit of the registrant's annual financial statements billed $137,059 in fiscal 2005 and $57,325 in fiscal 2004 to the registrant and the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. The registrant's audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS 1. The Fund's Governance Committee (the "Committee") will evaluate potential Board candidates to assess their qualifications. The Committee shall have the authority, upon approval of the Board, to retain an executive search firm to assist in this effort. The Committee may consider recommendations by business and personal contacts of current Board members and by executive search firms which the Committee may engage from time to time and may also consider shareholder recommendations. The Committee may consider the advice and recommendation of the Funds' investment manager and its affiliates in making the selection. 2. The Committee shall screen candidates for Board membership. The Committee has not established specific qualifications that it believes must be met by a trustee nominee. In evaluating trustee nominees, the Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an "interested person" as defined in the Investment Company Act of 1940; and whether the individual would be deemed an "audit committee financial expert" within the meaning of applicable SEC rules. The Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the Board. There are no differences in the manner in which the Committee evaluates nominees for trustees based on whether the nominee is recommended by a shareholder. 3. The Committee may consider nominations from shareholders for the Board at such times as the Committee meets to consider new nominees for the Board. The Committee shall have the sole discretion to determine the candidates to present to the Board and, in such cases where required, to shareholders. Recommendations for trustee nominees should, at a minimum, be accompanied by the following: o the name, address, and business, educational, and/or other pertinent background of the person being recommended; o a statement concerning whether the person is an "interested person" as defined in the Investment Company Act of 1940; o any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and o the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that person held Fund shares. The recommendation also can include any additional information which the person submitting it believes would assist the Committee in evaluating the recommendation. 4. Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Funds' investment adviser) would be deemed an "interested person" under the Investment Company Act of 1940. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside legal counsel may cause a person to be deemed an "interested person." 5. Before the Committee decides to nominate an individual as a trustee, Committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a trustee of a registered investment company. ITEM 11. CONTROLS AND PROCEDURES. Based on their evaluation of the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of August 31, 2005, the registrant's principal executive officer and principal financial officer found the registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. There have been no changes in the registrant's internal controls over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Exhibit attached hereto. (2) Exhibits attached hereto. (3) Not applicable. (b) Exhibit attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Oppenheimer International Small Company Fund By: /s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: October 17, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John V. Murphy ------------------ John V. Murphy Principal Executive Officer Date: October 17, 2005 By: /s/ Brian W. Wixted ------------------- Brian W. Wixted Principal Financial Officer Date: October 17, 2005 EX-99.CODE ETH 2 ra815_18567ethics.txt RA815_18567ETHICS EX-99.CODE ETH CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF THE OPPENHEIMER FUNDS AND OF OPPENHEIMERFUNDS, INC. This Code of Ethics for Principal Executive and Senior Financial Officers (referred to in this document as the "Code") has been adopted by each of the investment companies for which OppenheimerFunds, Inc. or one of its subsidiaries or affiliates (referred to collectively in this document as "OFI") acts as investment adviser (individually, a "Fund" and collectively, the "Funds"), and by OFI to effectuate compliance with Section 406 under the Sarbanes-Oxley Act of 2002 and the rules adopted to implement Section 406. This Code applies to each Fund's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions ("Covered Officers"). A listing of positions currently within the ambit of Covered Officers is attached as EXHIBIT A.(1) 1. PURPOSE OF THE CODE This Code sets forth standards and procedures that are reasonably designed to deter wrongdoing and promote: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely, and understandable disclosure in reports and documents that a Fund files with, or submits to, the U.S. Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; o compliance with applicable governmental laws, rules and regulations; o the prompt internal reporting of violations of this Code to the Code Administrator identified below; and - ---------- (1) The obligations imposed by this Code on Covered Officers are separate from and in addition to any obligations that may be imposed on such persons as Covered Persons under the Code of Ethics adopted by the Oppenheimer Funds dated May 15, 2002, under Rule 17j-1 of the Investment Company Act of 1940, as amended and any other code of conduct applicable to Covered Officers in whatever capacity they serve. This Code does not incorporate by reference any provisions of the Rule 17j-1 Code of Ethics and accordingly, any violations or waivers granted under the Rule 17j-1 Code of Ethics will not be considered a violation or waiver under this Code. o accountability for adherence to this Code. In general, the principles that govern honest and ethical conduct, including the avoidance of conflicts of interest between personal and professional relationships, reflect, at the minimum, the following: (1) the duty at all times in performing any responsibilities as a Fund financial officer, controller, accountant or principal executive officer to place the interests of the Funds ahead of personal interests; (2) the fundamental standard that Covered Officers should not take inappropriate advantage of their positions; (3) the duty to assure that a Fund's financial statements and reports to its shareholders are prepared honestly and accurately in accordance with applicable rules, regulations and accounting standards; and (4) the duty to conduct the Funds' business and affairs in an honest and ethical manner. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. It is acknowledged that, as a result of the contractual relationship between each Fund and OFI, of which the Covered Officers are also officers or employees, and subject to OFI's fiduciary duties to each Fund, the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on OFI and the Funds. It is further acknowledged that the participation of the Covered Officers in such activities is inherent in the contractual relationship between each Fund and OFI and is consistent with the expectations of the Board of Trustees/Directors of the performance by the Covered Officers of their duties as officers of the Funds. 2. PROHIBITIONS The specific provisions and reporting requirements of this Code are concerned primarily with promoting honest and ethical conduct and avoiding conflicts of interest in personal and professional relationships. No Covered Officer may use information concerning the business and affairs of a Fund, including the investment intentions of a Fund, or use his or her ability to influence such investment intentions, for personal gain to himself or herself, his or her family or friends or any other person or in a manner detrimental to the interests of a Fund or its shareholders. No Covered Officer may use his or her personal influence or personal relationships to influence the preparation and issuance of financial reports of a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund and its shareholders. No Covered Officer shall intentionally for any reason take any action or fail to take any action in connection with his or her official acts on behalf of a Fund that causes the Fund to violate applicable laws, rules and regulations. No Covered Officer shall, in connection with carrying out his or her official duties and responsibilities on behalf of a Fund: (i) employ any device, scheme or artifice to defraud a Fund or its shareholders; (ii) intentionally cause a Fund to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading in its official documents, regulatory filings, financial statements or communications to the public; (iii) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund or its shareholders; (iv) engage in any manipulative practice with respect to any Fund; (v) use his or her personal influence or personal relationships to influence any business decision, investment decisions, or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund or its shareholders; (vi) intentionally cause a Fund to fail to comply with applicable laws, rules and regulations, including failure to comply with the requirement of full, fair, accurate, understandable and timely disclosure in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by the Fund; (vii) intentionally mislead or omit to provide material information to the Fund's independent auditors or to the Board of Trustees/Directors or the officers of the Fund or its investment adviser in connection with financial reporting matters; (viii) fail to notify the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser promptly if he or she becomes aware of any existing or potential violations of this Code or applicable laws; (ix) retaliate against others for, or otherwise discourage the reporting of, actual or apparent violations of this Code; or (x) fails to acknowledge or certify compliance with this Code if requested to do so. 3. REPORTS OF CONFLICTS OF INTERESTS If a Covered Officer becomes aware of a conflict of interest under this Code or, to the Covered Officer's reasonable belief, the appearance of one, he or she must immediately report the matter to the Code's Administrator. If the Code Administrator is involved or believed to be involved in the conflict of interest or appearance of conflict of interest, the Covered Officer shall report the matter directly to the OFI's Chief Executive Officer. Upon receipt of a report of a conflict, the Code Administrator will take prompt steps to determine whether a conflict of interest exists. If the Code Administrator determines that an actual conflict of interest exists, the Code Administrator will take steps to resolve the conflict. If the Code Administrator determines that the appearance of a conflict exists, the Code Administrator will take appropriate steps to remedy such appearance. If the Code Administrator determines that no conflict or appearance of a conflict exists, the Code Administrator shall meet with the Covered Officer to advise him or her of such finding and of his or her reason for taking no action. In lieu of determining whether a conflict or appearance of conflict exists, the Code Administrator may in his or her discretion refer the matter to the Fund's Board of Trustees/Directors. 4. WAIVERS Any Covered Officer requesting a waiver of any of the provisions of this Code must submit a written request for such waiver to the Code Administrator, setting forth the basis of such request and all necessary facts upon which such request can be evaluated. The Code Administrator shall review such request and make a written determination thereon, which shall be binding. The Code Administrator may in reviewing such request, consult at his discretion with legal counsel to OFI or to the Fund. In determining whether to waive any of the provisions of this Code, the Code Administrator shall consider whether the proposed waiver: (i) is prohibited by this Code; (ii) is consistent with honest and ethical conduct; and (iii) will result in a conflict of interest between the Covered Officer's personal and professional obligations to a Fund. In lieu of determining whether to grant a waiver, the Code Administrator in his or her discretion may refer the matter to the appropriate Fund's Board of Trustees/Directors. 5. REPORTING REQUIREMENTS (a) Each Covered Officer shall, upon becoming subject to this Code, be provided with a copy of this Code and shall affirm in writing that he or she has received, read, understands and shall adhere to this Code. (b) At least annually, all Covered Officers shall be provided with a copy of this Code and shall certify that they have read and understand this Code and recognize that they are subject thereto. (c) At least annually, all Covered Officers shall certify that they have complied with the requirements of this Code and that they have disclosed or reported any violations of this Code to the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser. (d) The Code Administrator shall submit a quarterly report to the Board of Trustees/Directors of each Fund containing (i) a description of any report of a conflict of interest or apparent conflict and the disposition thereof; (ii) a description of any request for a waiver from this Code and the disposition thereof; (iii) any violation of the Code that has been reported or found and the sanction imposed; (iv) interpretations issued under the Code by the Code Administrator; and (v) any other significant information arising under the Code including any proposed amendments. (e) Each Covered Officer shall notify the Code Administrator promptly if he or she knows of or has a reasonable belief that any violation of this Code has occurred or is likely to occur. Failure to do so is itself a violation of this Code. (f) Any changes to or waivers of this Code, including "implicit" waivers as defined in applicable SEC rules, will, to the extent required, be disclosed by the Code Administrator or his or her designee as provided by applicable SEC rules.(2) 6. ANNUAL RENEWAL At least annually, the Board of Trustees/Directors of each Fund shall review the Code and determine whether any amendments (including any amendments that may be recommended by OFI or the Fund's legal counsel) are necessary or desirable, and shall consider whether to renew and/or amend the Code. 7. SANCTIONS Any violation of this Code of Ethics shall be subject to the imposition of such sanctions by OFI as may be deemed appropriate under the circumstances to achieve the purposes of this Code and may include, without limitation, a letter of censure, suspension from employment or termination of employment, in the sole discretion of OFI. 8. ADMINISTRATION AND CONSTRUCTION (a) The administration of this Code of Ethics shall be the responsibility of OFI's General Counsel or his designee as the "Code Administrator" of this Code, acting under the terms of this Code and the oversight of the Trustees/Directors of the Funds. (b) The duties of such Code Administrator will include: (i) Continuous maintenance of a current list of the names of all Covered Officers; (ii) Furnishing all Covered Officers a copy of this Code and initially and periodically informing them of their duties and obligations thereunder; (iii) Maintaining or supervising the maintenance of all records required by this Code, including records of waivers granted hereunder; - ---------- (2) An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the General Counsel, the Code Administrator, an executive officer of the Fund or OFI. (iv) Issuing interpretations of this Code which appear to the Code Administrator to be consistent with the objectives of this Code and any applicable laws or regulations; (v) Conducting such inspections or investigations as shall reasonably be required to detect and report any violations of this Code, with his or her recommendations, to the Chief Executive Officer of OFI and to the Trustees/Directors of the affected Fund(s) or any committee appointed by them to deal with such information; and (vi) Periodically conducting educational training programs as needed to explain and reinforce the terms of this Code. (c) In carrying out the duties and responsibilities described under this Code, the Code Administrator may consult with legal counsel, who may include legal counsel to the applicable Funds, and such other persons as the Administrator shall deem necessary or desirable. The Code Administrator shall be protected from any liability hereunder or under any applicable law, rule or regulation, for decisions made in good faith based upon his or her reasonable judgment. 9. REQUIRED RECORDS The Administrator shall maintain and cause to be maintained in an easily accessible place, the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of OFI in which the applicable event or report occurred): (a) A copy of any Code which has been in effect during the period; (b) A record of any violation of any such Code and of any action taken as a result of such violation, during the period; (c) A copy of each annual report pursuant to the Code made by a Covered Officer during the period; (d) A copy of each report made by the Code Administrator pursuant to this Code during the period; (e) A list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (f) A record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; and (g) A record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision. 10. AMENDMENTS AND MODIFICATIONS This Code may not be amended or modified except by an amendment in writing which is approved or ratified by OFI and by a majority vote of the Independent Trustees/Directors of each of the applicable Funds. 11. CONFIDENTIALITY. This Code is identified for the internal use of the Funds and OFI. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees/Directors of the affected Fund(s) and their counsel, the independent auditors of the affected Funds and/or OFI, and to OFI, except as such disclosure may be required pursuant to applicable judicial or regulatory process. Dated as of: June 25, 2003 Adopted by Board I of the Oppenheimer Funds June 13, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board II of the Oppenheimer/Centennial Funds June 24, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board III of the Oppenheimer Funds June 9, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by Board IV of the Oppenheimer Funds May 21, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Secretary Adopted by the Boards of Directors of OppenheimerFunds, Inc. and its subsidiaries and affiliates that act as investment adviser to the Oppenheimer or Centennial funds June 1, 2003 /S/ ROBERT G. ZACK - ------------------ Robert G. Zack, Senior Vice President and General Counsel Exhibit A Positions Covered by this Code of Ethics for Senior Officers EACH OPPENHEIMER OR CENTENNIAL FUND Principal Executive Officer Principal Financial Officer Treasurer Assistant Treasurer PERSONNEL OF OFI WHO BY VIRTUE OF THEIR JOBS PERFORM CRITICAL FINANCIAL AND ACCOUNTING FUNCTIONS FOR OFI ON BEHALF OF A FUND, INCLUDING: Treasurer Senior Vice President/Fund Accounting Vice President/Fund Accounting EX-99.CERT 3 ra815_18567ex302.txt RA815_18567EX302 Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, John V. Murphy, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer International Small Company Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 17, 2005 /s/ John V. Murphy - ------------------ John V. Murphy Principal Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, Brian W. Wixted, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer International Small Company Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 17, 2005 /s/ Brian W. Wixted - ------------------- Brian W. Wixted Principal Financial Officer EX-99.906CERT 4 ra815_18567ex906.txt RA815_18567EX906 EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 John V. Murphy, Principal Executive Officer, and Brian W. Wixted, Principal Financial Officer, of Oppenheimer International Small Company Fund (the "Registrant"), each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended August 31, 2005 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Principal Executive Officer Principal Financial Officer Oppenheimer International Oppenheimer International Small Company Fund Small Company Fund /s/ John V. Murphy /s/ Brian W. Wixted - ------------------ ------------------- John V. Murphy Brian W. Wixted Date: October 17, 2005 Date: October 17, 2005 -----END PRIVACY-ENHANCED MESSAGE-----