N-CSRS 1 rs815_37628ncsrs.txt RS815_37628NCSRS.TXT 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: FEBRUARY 28, 2007 ----------------- ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- TOP TEN GEOGRAPHICAL HOLDINGS -------------------------------------------------------------------------------- Canada 38.1% -------------------------------------------------------------------------------- Japan 8.0 -------------------------------------------------------------------------------- Australia 7.0 -------------------------------------------------------------------------------- Hong Kong 6.3 -------------------------------------------------------------------------------- United States 5.9 -------------------------------------------------------------------------------- India 5.5 -------------------------------------------------------------------------------- Korea, Republic of South 4.9 -------------------------------------------------------------------------------- China 3.8 -------------------------------------------------------------------------------- Cayman Islands 3.5 -------------------------------------------------------------------------------- Brazil 3.3 Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2007, and are based on the total market value of investments. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- TOP TEN COMMON STOCK HOLDINGS -------------------------------------------------------------------------------- HudBay Minerals, Inc. 2.8% -------------------------------------------------------------------------------- Lundin Mining Corp. 2.8 -------------------------------------------------------------------------------- UrAsia Energy Ltd. 2.7 -------------------------------------------------------------------------------- Kenedix, Inc. 2.7 -------------------------------------------------------------------------------- First Quantum Minerals Ltd. 2.5 -------------------------------------------------------------------------------- Travelsky Technology Ltd. 2.3 -------------------------------------------------------------------------------- RISA Partners, Inc. 2.1 -------------------------------------------------------------------------------- Fortescue Metals Group Ltd. 2.0 -------------------------------------------------------------------------------- Minara Resources Ltd. 2.0 -------------------------------------------------------------------------------- Arques Industries AG 1.9 Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2007, and are based on net assets. For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com. -------------------------------------------------------------------------------- 10 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND -------------------------------------------------------------------------------- REGIONAL ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] United States/Canada 44.0% Asia 36.3 Europe 8.4 Latin America 6.8 Emerging Europe 2.3 Middle East/Africa 2.2 Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2007, and are based on the total market value of investments. -------------------------------------------------------------------------------- 11 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES -------------------------------------------------------------------------------- Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. Cumulative total returns are not annualized. 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. CLASS Y shares of the Fund were first publicly offered on 9/7/05. Class Y shares are offered only to certain institutional investors under special agreements with the Distributor. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 12 | 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 February 28, 2007. 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 13 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FUND EXPENSES -------------------------------------------------------------------------------- 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 (9/1/06) (2/28/07) FEBRUARY 28, 2007 -------------------------------------------------------------------------------- Class A Actual $ 1,000.00 $ 1,210.80 $ 6.49 -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,018.94 5.92 -------------------------------------------------------------------------------- Class B Actual 1,000.00 1,205.70 11.15 -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,014.73 10.19 -------------------------------------------------------------------------------- Class C Actual 1,000.00 1,206.10 10.77 -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,015.08 9.84 -------------------------------------------------------------------------------- Class N Actual 1,000.00 1,208.00 8.85 -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,016.81 8.08 -------------------------------------------------------------------------------- Class Y Actual 1,000.00 1,213.10 4.40 -------------------------------------------------------------------------------- Class Y Hypothetical 1,000.00 1,020.83 4.02 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 181/365 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated fund, based on the 6-month period ended February 28, 2007 are as follows: CLASS EXPENSE RATIOS --------------------------------------------- Class A 1.18% --------------------------------------------- Class B 2.03 --------------------------------------------- Class C 1.96 --------------------------------------------- Class N 1.61 --------------------------------------------- Class Y 0.80 The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund's Manager 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. -------------------------------------------------------------------------------- 14 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF INVESTMENTS February 28, 2007 / Unaudited -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- COMMON STOCKS--94.2% -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--6.5% -------------------------------------------------------------------------------- AUTO COMPONENTS--0.3% Azure Dynamics Corp. 1,2,3 21,000,000 $ 8,169,460 -------------------------------------------------------------------------------- HOUSEHOLD DURABLES--0.9% Gafisa SA 1,500,000 21,843,905 -------------------------------------------------------------------------------- INTERNET & CATALOG RETAIL--1.4% Submarino SA 1,000,000 32,963,924 -------------------------------------------------------------------------------- MEDIA--2.2% Network 18 Fincap Ltd. 1 720,000 5,494,116 -------------------------------------------------------------------------------- PVR Ltd. 3 2,000,000 8,205,534 -------------------------------------------------------------------------------- Television Eighteen India Ltd. 840,000 10,942,292 -------------------------------------------------------------------------------- Village Roadshow Ltd. 5,000,000 13,630,633 -------------------------------------------------------------------------------- Village Roadshow Ltd., Cl. A, Preference 5,000,000 13,315,474 ----------------- 51,588,049 -------------------------------------------------------------------------------- MULTILINE RETAIL--1.4% Parkson Retail Group Ltd. 3,000,000 18,123,640 -------------------------------------------------------------------------------- Robinson Department Store Public Co. Ltd. 1 50,000,000 14,474,651 ----------------- 32,598,291 -------------------------------------------------------------------------------- SPECIALTY RETAIL--0.1% Shinwa Art Auction Co. Ltd. 1 1,500 2,593,912 -------------------------------------------------------------------------------- TEXTILES, APPAREL & LUXURY GOODS--0.2% Himatsingka Seide Ltd. 1,500,000 4,133,258 -------------------------------------------------------------------------------- CONSUMER STAPLES--2.0% -------------------------------------------------------------------------------- BEVERAGES--0.2% Serm Suk Public Co. Ltd. 7,010,000 3,893,872 -------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--0.9% Wumart Stores, Inc. 24,000,000 21,984,651 VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- FOOD PRODUCTS--0.9% China Vanguard Group Ltd. 3 165,000,000 $ 8,553,053 -------------------------------------------------------------------------------- Crown Confectionery Co. Ltd. 3 110,000 12,965,913 ----------------- 21,518,966 -------------------------------------------------------------------------------- ENERGY--18.2% -------------------------------------------------------------------------------- OIL & GAS--18.2% Addax Petroleum Corp. 4 1,000,000 28,941,518 -------------------------------------------------------------------------------- Addax Petroleum Corp. 500,000 14,470,759 -------------------------------------------------------------------------------- Calvalley Petroleum, Inc., Cl. A 1,3 6,000,000 34,422,025 -------------------------------------------------------------------------------- Crew Energy, Inc. 1 1,500,000 13,530,267 -------------------------------------------------------------------------------- Cyries Energy, Inc. 1 2,000,000 18,142,955 -------------------------------------------------------------------------------- First Calgary Petroleums Ltd. 1 7,000,000 37,106,703 -------------------------------------------------------------------------------- Great Eastern Shipping Co. Ltd.(The) 1,600,000 7,532,919 -------------------------------------------------------------------------------- Gulf Keystone Petroleum Ltd. 1,3 17,000,000 23,926,783 -------------------------------------------------------------------------------- Paladin Resources Ltd. 1 6,000,000 44,069,669 -------------------------------------------------------------------------------- Petrolifera Petroleum Ltd. 1 2,000,000 29,668,263 -------------------------------------------------------------------------------- Sterling Energy plc 1 60,000,000 19,957,457 -------------------------------------------------------------------------------- SXR Uranium One, Inc. 1 3,000,000 43,450,752 -------------------------------------------------------------------------------- UraMin, Inc. 1 5,750,000 26,879,186 -------------------------------------------------------------------------------- UraMin, Inc. 1 5,250,000 24,541,866 -------------------------------------------------------------------------------- UrAsia Energy Ltd. 1 10,000,000 63,525,992 ----------------- 430,167,114 -------------------------------------------------------------------------------- FINANCIALS--12.6% -------------------------------------------------------------------------------- CAPITAL MARKETS--2.1% RISA Partners, Inc. 3 9,000 49,134,644 -------------------------------------------------------------------------------- COMMERCIAL BANKS--1.0% Karnataka Bank Ltd. 6,000,000 23,783,173 15 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF INVESTMENTS Unaudited / Continued -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--1.1% KIWOOM.COM Securities Co. Ltd. 500,000 $ 16,124,663 -------------------------------------------------------------------------------- Simplex Investment Advisors, Inc. 4,000 4,338,142 -------------------------------------------------------------------------------- World Energy Solutions, Inc. 1,3 6,000,000 5,386,457 ----------------- 25,849,262 -------------------------------------------------------------------------------- REAL ESTATE--1.1% Ishaan Real Estate plc 1,3 14,000,000 26,122,994 -------------------------------------------------------------------------------- REAL ESTATE MANAGEMENT & DEVELOPMENT--7.3% Funai Zaisan Consultants Co. Ltd. 2,500 13,153,450 -------------------------------------------------------------------------------- Greentown China Holdings Ltd. 1 14,000,000 20,714,194 -------------------------------------------------------------------------------- Hoosiers Corp. 16,000 15,675,057 -------------------------------------------------------------------------------- Kenedix, Inc. 12,000 62,953,458 -------------------------------------------------------------------------------- Klabin Segall SA 1,3 3,000,000 23,272,813 -------------------------------------------------------------------------------- Shenzhen Investment Ltd. 60,000,000 26,791,947 -------------------------------------------------------------------------------- Sistema Hals, GDR 1,2 900,000 11,205,000 ----------------- 173,765,919 -------------------------------------------------------------------------------- HEALTH CARE--3.3% -------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES--0.5% Imaging Dynamics Co. Ltd. 1,3 2,000,000 3,625,171 -------------------------------------------------------------------------------- Imaging Dynamics Co. Ltd. 1,3 4,000,000 7,250,342 ----------------- 10,875,513 -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--2.6% Apollo Hospitals Enterprise Ltd. 1,500,000 16,846,414 -------------------------------------------------------------------------------- Arques Industries AG 3 2,000,000 45,619,988 ----------------- 62,466,402 -------------------------------------------------------------------------------- PHARMACEUTICALS--0.2% Norwood Immunology Ltd. 1,2,3 15,000,000 4,713,924 VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- INDUSTRIALS--8.0% -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--0.0% Atlantis Systems Corp. 1 1,200,000 $ 636,115 -------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES--3.0% SBI VeriTrans Co. Ltd. 1,3 9,750 7,201,432 -------------------------------------------------------------------------------- Wirecard AG 1 3,000,000 32,316,121 -------------------------------------------------------------------------------- Xinhua Finance Ltd. 1,3 10,000 6,112,645 -------------------------------------------------------------------------------- Xinhua Finance Ltd., Sponsored ADR 1,3 4,000,000 24,560,000 ----------------- 70,190,198 -------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING--2.1% IVRCL Infrastructures & Projects Ltd. 3,500,000 23,232,055 -------------------------------------------------------------------------------- Nagarjuna Construction Co. Ltd. 7,500,000 26,408,809 ----------------- 49,640,864 -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--0.5% Siloviye Mashiny 1 65,000,000 12,025,000 -------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--1.5% Beijing Enterprises Holdings Ltd. 14,000,000 34,196,201 -------------------------------------------------------------------------------- MACHINERY--0.8% Fong's Industries Co. Ltd. 16,000,000 12,942,532 -------------------------------------------------------------------------------- Railpower Technologies Corp. 1,3 5,250,000 4,937,586 -------------------------------------------------------------------------------- Railpower Technologies Corp. 1,3 1,750,000 1,645,862 ----------------- 19,525,980 -------------------------------------------------------------------------------- MARINE--0.1% Great Offshore Ltd. 1 225,000 2,905,308 16 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--13.2% -------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES--7.1% auFeminin.com SA 1,3 600,000 $ 21,009,247 -------------------------------------------------------------------------------- CDNetworks Co. Ltd. 1,3 550,000 15,899,035 -------------------------------------------------------------------------------- Danal Co. Ltd. 1,3 2,300,000 16,872,783 -------------------------------------------------------------------------------- Empas Corp. 1,3 1,000,000 18,223,469 -------------------------------------------------------------------------------- Kaboose, Inc. 1 7,500,000 21,802,326 -------------------------------------------------------------------------------- Kaboose, Inc. 1 1,000,000 2,906,977 -------------------------------------------------------------------------------- Macromill, Inc. 6,000 15,652,175 -------------------------------------------------------------------------------- Mobilians Co. Ltd. 3 1,554,094 10,832,948 -------------------------------------------------------------------------------- Opera Software ASA 1,3 11,000,000 22,599,976 -------------------------------------------------------------------------------- Tencent Holdings Ltd. 6,000,000 20,619,480 ----------------- 166,418,416 -------------------------------------------------------------------------------- IT SERVICES--2.3% Travelsky Technology Ltd. 3 30,000,000 54,908,486 -------------------------------------------------------------------------------- SOFTWARE--3.8% Absolute Software Corp. 1 906,300 10,150,932 -------------------------------------------------------------------------------- Certicom Corp. 1,3 3,000,000 14,620,383 -------------------------------------------------------------------------------- Duzon Digital Ware Co. Ltd. 3 1,200,000 24,949,663 -------------------------------------------------------------------------------- Intelligent Wave, Inc. 3 16,000 12,931,340 -------------------------------------------------------------------------------- MacDonald, Dettwiler & Associates Ltd. 1 250,000 10,078,232 -------------------------------------------------------------------------------- Ninetowns Internet Technology Group Co. Ltd. 1,3 3,000,000 14,130,000 -------------------------------------------------------------------------------- Trolltech ASA 1 1,219,000 2,703,257 ----------------- 89,563,807 -------------------------------------------------------------------------------- MATERIALS--26.3% -------------------------------------------------------------------------------- CHEMICALS--0.8% Allen-Vanguard Corp. 1,3 4,250,000 18,931,686 VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- METALS & MINING--25.5% Alamos Gold, Inc. 1 3,750,000 $ 29,657,575 -------------------------------------------------------------------------------- Anvil Mining Ltd. 1,3 3,500,000 40,996,922 -------------------------------------------------------------------------------- Baffinland Iron Mines Corp. 1 1,800,000 3,647,401 -------------------------------------------------------------------------------- Blue Pearl Mining Ltd. 1 3,000,000 22,546,170 -------------------------------------------------------------------------------- Eldorado Gold Corp. 1 4,000,000 23,871,409 -------------------------------------------------------------------------------- Energy Metals Corp. 1 3,000,000 33,472,982 -------------------------------------------------------------------------------- Equinox Minerals Ltd. 1,3,4 23,000,000 41,296,170 -------------------------------------------------------------------------------- First Quantum Minerals Ltd. 1,000,000 58,096,785 -------------------------------------------------------------------------------- Fortescue Metals Group Ltd. 1 3,500,000 46,935,077 -------------------------------------------------------------------------------- HudBay Minerals, Inc. 1 3,500,000 67,330,711 -------------------------------------------------------------------------------- IAMGOLD Corp. 1,000,000 8,360,000 -------------------------------------------------------------------------------- Ivernia, Inc. 1 9,050,000 13,231,447 -------------------------------------------------------------------------------- Ivernia, Inc. 1,2 3,200,000 4,678,523 -------------------------------------------------------------------------------- Lundin Mining Corp. 1,3 6,000,000 65,355,677 -------------------------------------------------------------------------------- Minara Resources Ltd. 9,000,000 46,740,399 -------------------------------------------------------------------------------- Miramar Mining Corp. 1,3 3,400,000 15,523,256 -------------------------------------------------------------------------------- Olympus Pacific Minerals, Inc. 1,3 13,000,000 7,113,543 -------------------------------------------------------------------------------- Rio Narcea Gold Mines Ltd. 1,3 14,000,000 44,288,646 -------------------------------------------------------------------------------- Stornoway Diamond Corp. 1 3,600,000 3,478,112 -------------------------------------------------------------------------------- Tenke Mining Corp. 1 2,000,000 25,906,293 ----------------- 602,527,098 -------------------------------------------------------------------------------- UTILITIES--4.1% -------------------------------------------------------------------------------- ELECTRIC UTILITIES--1.3% Sayano-Shushenskaya Hydro Power Station 9,850,000 15,464,500 17 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF INVESTMENTS Unaudited / Continued -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 -------------------------------------------------------------------------------- ELECTRIC UTILITIES Continued Volzhskaya Hydroelectric Power Station OJSC 4,500,000 $ 2,250,000 -------------------------------------------------------------------------------- Zhigulyovskaya Hydraulic Power Station 2 36,000,000 12,960,000 ----------------- 30,674,500 -------------------------------------------------------------------------------- GAS UTILITIES--1.5% Xinao Gas Holdings Ltd. 35,000,000 34,135,415 -------------------------------------------------------------------------------- WATER UTILITIES--1.3% Guangdong Investment Ltd. 60,000,000 31,485,984 ----------------- Total Common Stocks (Cost $1,569,482,895) 2,225,932,291 VALUE UNITS SEE NOTE 1 -------------------------------------------------------------------------------- RIGHTS, WARRANTS AND CERTIFICATES--0.0% -------------------------------------------------------------------------------- China Vanguard Group Ltd. Wts., Exp. 11/2/08 1 22,000,000 $ 168,949 -------------------------------------------------------------------------------- Railpower Technologies Corp. Wts., Exp. 3/15/07 1 875,000 151,197 ----------------- Total Rights, Warrants and Certificates (Cost $0) 320,146 SHARES -------------------------------------------------------------------------------- INVESTMENTS IN AFFILIATED COMPANIES--5.9% -------------------------------------------------------------------------------- Oppenheimer Institutional Money Market Fund, Cl. E, 5.25% 3,5 (Cost $139,874,548) 139,874,548 139,874,548 -------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $1,709,357,443) 100.1% 2,366,126,985 -------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.1) (2,718,544) ------------------------------- NET ASSETS 100.0% $ 2,363,408,441 =============================== FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income producing security. 2. Illiquid security. The aggregate value of illiquid securities as of February 28, 2007 was $41,726,907, which represents 1.77% of the Fund's net assets. See Note 6 of accompanying Notes. 3. Is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended February 28, 2007 by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment advisor. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES AUGUST 31, 2006 ADDITIONS REDUCTIONS FEB. 28, 2007 ----------------------------------------------------------------------------------------------------------- Ahnlab, Inc. 1,000,000 -- 1,000,000 -- Allen-Vanguard Corp. 2,400,000 1,850,000 -- 4,250,000 Anvil Mining Ltd. 3,000,000 500,000 -- 3,500,000 Arques Industries AG 1,700,000 300,000 -- 2,000,000 auFeminin.com SA 600,000 -- -- 600,000 Azure Dynamics Corp. -- 21,000,000 -- 21,000,000 Calvalley Petroleum, Inc., Cl. A 4,500,000 1,500,000 -- 6,000,000 CDNetworks Co. Ltd. 600,000 -- 50,000 550,000 Certicom Corp. 3,000,000 -- -- 3,000,000 China Vanguard Group Ltd. 110,000,000 55,000,000 a -- 165,000,000 Crown Confectionery Co. Ltd. 110,000 -- -- 110,000
18 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
SHARES GROSS GROSS SHARES AUGUST 31, 2006 ADDITIONS REDUCTIONS FEB. 28, 2007 ------------------------------------------------------------------------------------------------------------- Danal Co. Ltd. 2,300,000 -- -- 2,300,000 Duzon Digital Ware Co. Ltd. 1,200,000 -- -- 1,200,000 Empas Corp. 900,000 100,000 -- 1,000,000 Equinox Minerals Ltd. 24,000,000 -- 1,000,000 23,000,000 Gulf Keystone Petroleum Ltd. 16,000,000 1,000,000 -- 17,000,000 Imaging Dynamics Co. Ltd. 2,000,000 -- -- 2,000,000 Imaging Dynamics Co. Ltd. 4,000,000 -- -- 4,000,000 Intelligent Wave, Inc. 16,000 -- -- 16,000 Ishaan Real Estate plc -- 14,000,000 -- 14,000,000 IVRCL Infrastructure & Projects Ltd. b 6,000,000 -- 2,500,000 3,500,000 Karnataka Bank Ltd. b 7,000,000 -- 1,000,000 6,000,000 Klabin Segall SA -- 3,000,000 -- 3,000,000 Lundin Mining Corp. -- 6,475,200 a 475,200 6,000,000 Manine Media Co. Ltd. 2,256,470 -- 2,256,470 -- Miramar Mining Corp. 4,000,000 3,400,000 4,000,000 3,400,000 Mobilians Co. Ltd. 1,554,094 -- -- 1,554,094 Ninetowns Internet Technology Group Co. Ltd. (formerly Ninetowns Digital World Trade Holdings Ltd., ADR) 3,000,000 -- -- 3,000,000 Norwood Abbey Ltd. 14,000,000 -- 14,000,000 -- Norwood Immunology Ltd. 15,000,000 -- -- 15,000,000 Olympus Pacific Minerals, Inc. 13,000,000 -- -- 13,000,000 Opera Software ASA 8,000,000 3,000,000 -- 11,000,000 Oppenheimer Institutional Money Market Fund, Cl. E, 5.25% -- 439,259,145 299,384,597 139,874,548 PVR Ltd. -- 2,000,000 -- 2,000,000 Railpower Technologies Corp. 5,000,000 250,000 -- 5,250,000 Railpower Technologies Corp. -- 1,750,000 -- 1,750,000 Rio Narcea Gold Mines Ltd. 14,000,000 -- -- 14,000,000 RISA Partners, Inc. 9,000 -- -- 9,000 SBI VeriTrans Co. Ltd. 9,750 -- -- 9,750 Shinwa Art Auction Co. Ltd. b 1,500 -- -- 1,500 Solana Resources Ltd. 8,000,000 241,325 8,241,325 -- Travelsky Technology Ltd. 25,000,000 5,000,000 -- 30,000,000 Wirecard AG b 5,000,000 -- 2,000,000 3,000,000 World Energy Solutions, Inc. -- 6,000,000 -- 6,000,000 Xinhua Finance Ltd. 5,000 5,000 -- 10,000 Xinhua Finance Ltd., Sponsored ADR 4,000,000 -- -- 4,000,000 VALUE DIVIDEND REALIZED SEE NOTE 1 INCOME GAIN (LOSS) ------------------------------------------------------------------------------------------------------------- Ahnlab, Inc. $ -- $ -- $ 682,675 Allen-Vanguard Corp. 18,931,686 -- -- Anvil Mining Ltd. 40,996,922 -- -- Arques Industries AG 45,619,988 -- -- auFeminin.com SA 21,009,247 -- -- Azure Dynamics Corp. 8,169,460 -- -- Calvalley Petroleum, Inc., Cl. A 34,422,025 -- -- CDNetworks Co. Ltd. 15,899,035 -- (272,260)
19 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF INVESTMENTS Unaudited / Continued -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS, Continued
VALUE DIVIDEND REALIZED SEE NOTE 1 INCOME GAIN (LOSS) ----------------------------------------------------------------------------------------------------------- Certicom Corp. $ 14,620,383 $ -- $ -- China Vanguard Group Ltd. 8,553,053 -- -- Crown Confectionery Co. Ltd. 12,965,913 73,566 -- Danal Co. Ltd. 16,872,783 -- -- Duzon Digital Ware Co. Ltd. 24,949,663 374,519 -- Empas Corp. 18,223,469 -- -- Equinox Minerals Ltd. 41,296,170 -- 996,813 Gulf Keystone Petroleum Ltd. 23,926,783 -- -- Imaging Dynamics Co. Ltd. 3,625,171 -- -- Imaging Dynamics Co. Ltd. 7,250,342 -- -- Intelligent Wave, Inc. 12,931,340 -- -- Ishaan Real Estate plc 26,122,994 -- -- IVRCL Infrastructure & Projects Ltd. b -- -- 545,489 Karnataka Bank Ltd. b -- -- (298,676) Klabin Segall SA 23,272,813 -- -- Lundin Mining Corp. 65,355,677 -- 11,787,412 Manine Media Co. Ltd. -- -- (4,505,998) Miramar Mining Corp. 15,523,256 -- 5,742,486 Mobilians Co. Ltd. 10,832,948 104,594 -- Ninetowns Internet Technology Group Co. Ltd. (formerly Ninetowns Digital World Trade Holdings Ltd., ADR) 14,130,000 -- -- Norwood Abbey Ltd. -- -- (6,183,645) Norwood Immunology Ltd. 4,713,924 -- -- Olympus Pacific Minerals, Inc. 7,113,543 -- -- Opera Software ASA 22,599,976 -- -- Oppenheimer Institutional Money Market Fund, Cl. E, 5.25% 139,874,548 1,865,530 -- PVR Ltd. 8,205,534 -- -- Railpower Technologies Corp. 4,937,586 -- -- Railpower Technologies Corp. 1,645,862 -- -- Rio Narcea Gold Mines Ltd. 44,288,646 -- -- RISA Partners, Inc. 49,134,644 139,221 -- SBI VeriTrans Co. Ltd. 7,201,432 -- -- Shinwa Art Auction Co. Ltd. b -- -- -- Solana Resources Ltd. -- -- (8,474,618) Travelsky Technology Ltd. 54,908,486 -- -- Wirecard AG b -- -- 340,165 World Energy Solutions, Inc. 5,386,457 -- -- Xinhua Finance Ltd. 6,112,645 -- -- Xinhua Finance Ltd., Sponsored ADR 24,560,000 -- -- ------------------------------------------- $ 906,184,404 $ 2,557,430 $ 359,843 ===========================================
a. All or a portion is the result of a corporate action. b. No longer an affiliate as of February 28, 2007. The value of the security has therefore been excluded from this table. 20 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND 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 $70,237,688 or 2.97% of the Fund's net assets as of February 28, 2007. 5. Rate shown is the 7-day yield as of February 28, 2007. DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS: GEOGRAPHIC HOLDINGS VALUE PERCENT -------------------------------------------------------------------------------- Canada $ 902,403,582 38.1% Japan 189,746,255 8.0 Australia 164,691,252 7.0 Hong Kong 148,100,304 6.3 United States 139,874,548 5.9 India 129,483,878 5.5 Korea, Republic of South 115,868,474 4.9 China 91,023,137 3.8 Cayman Islands 84,191,091 3.5 Brazil 78,080,642 3.3 Germany 77,936,109 3.3 United Kingdom 74,721,158 3.1 Russia 53,904,500 2.3 South Africa 51,421,052 2.2 Norway 25,303,233 1.1 France 21,009,247 0.9 Thailand 18,368,523 0.8 ---------------------------- Total $ 2,366,126,985 100.0% ============================ SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 21 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited --------------------------------------------------------------------------------
February 28, 2007 -------------------------------------------------------------------------------------------------------- ASSETS -------------------------------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments: Unaffiliated companies (cost $938,400,056) $ 1,459,942,581 Affiliated companies (cost $770,957,387) 906,184,404 ---------------- 2,366,126,985 -------------------------------------------------------------------------------------------------------- Cash 289,274 -------------------------------------------------------------------------------------------------------- Unrealized appreciation on foreign currency contracts 22,678 -------------------------------------------------------------------------------------------------------- Receivables and other assets: Shares of beneficial interest sold 9,204,920 Investments sold 6,636,766 Interest and dividends 1,696,635 Other 52,203 ---------------- Total assets 2,384,029,461 -------------------------------------------------------------------------------------------------------- LIABILITIES -------------------------------------------------------------------------------------------------------- Bank overdraft-foreign currencies (cost $15,240) 15,123 -------------------------------------------------------------------------------------------------------- Unrealized depreciation on foreign currency contracts 8,585 -------------------------------------------------------------------------------------------------------- Payables and other liabilities: Shares of beneficial interest redeemed 9,162,062 Investments purchased 9,119,454 Distribution and service plan fees 836,624 Foreign capital gains tax 744,536 Transfer and shareholder servicing agent fees 246,055 Trustees' compensation 183,905 Shareholder communications 172,673 Other 132,003 ---------------- Total liabilities 20,621,020 -------------------------------------------------------------------------------------------------------- NET ASSETS $ 2,363,408,441 ================ -------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS -------------------------------------------------------------------------------------------------------- Paid-in capital $ 1,666,064,039 -------------------------------------------------------------------------------------------------------- Accumulated net investment loss (20,244,948) -------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 61,568,046 -------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 656,021,304 ---------------- NET ASSETS $ 2,363,408,441 ================
22 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND -------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE -------------------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $1,641,940,275 and 59,346,598 shares of beneficial interest outstanding) $27.67 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $29.36 -------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $140,745,795 and 5,301,516 shares of beneficial interest outstanding) $26.55 -------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $302,382,543 and 11,382,052 shares of beneficial interest outstanding) $26.57 -------------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $63,441,828 and 2,354,024 shares of beneficial interest outstanding) $26.95 -------------------------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $214,898,000 and 7,756,211 shares of beneficial interest outstanding) $27.71
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 23 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENT OF OPERATIONS Unaudited --------------------------------------------------------------------------------
For the Six Months Ended February 28, 2007 ------------------------------------------------------------------------------------ INVESTMENT INCOME ------------------------------------------------------------------------------------ Dividends: Unaffiliated companies (net of foreign withholding taxes of $247,401) $ 7,496,875 Affiliated companies (net of foreign withholding taxes of $119,691) 2,557,430 ------------------------------------------------------------------------------------ Interest 135,214 ------------------------------------------------------------------------------------ Portfolio lending fees 23 ------------------------------------------------------------------------------------ Other income 13,067 ------------- Total investment income 10,202,609 ------------------------------------------------------------------------------------ EXPENSES ------------------------------------------------------------------------------------ Management fees 7,415,647 ------------------------------------------------------------------------------------ Distribution and service plan fees: Class A 1,753,661 Class B 650,307 Class C 1,331,821 Class N 139,006 ------------------------------------------------------------------------------------ Transfer and shareholder servicing agent fees: Class A 1,026,333 Class B 143,696 Class C 218,120 Class N 88,006 Class Y 13,201 ------------------------------------------------------------------------------------ Shareholder communications: Class A 90,619 Class B 20,917 Class C 20,526 Class N 2,176 Class Y 1,550 ------------------------------------------------------------------------------------ Custodian fees and expenses 369,876 ------------------------------------------------------------------------------------ Trustees' compensation 104,030 ------------------------------------------------------------------------------------ Other 124,743 ------------- Total expenses 13,514,235 Less reduction to custodian expenses (1,105) Less waivers and reimbursements of expenses (35,507) ------------- Net expenses 13,477,623 ------------------------------------------------------------------------------------ NET INVESTMENT LOSS (3,275,014)
24 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND ---------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) ---------------------------------------------------------------------------------------- Net realized gain on: Investments: Unaffiliated companies $ 76,827,028 Affiliated companies 359,843 Foreign currency transactions 6,521,165 -------------- Net realized gain 83,708,036 ---------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments (net of foreign capital gains tax of $62,056) 326,305,355 Translation of assets and liabilities denominated in foreign currencies (18,088,820) -------------- Net change in unrealized appreciation 308,216,535 ---------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 388,649,557 ==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 25 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2007 AUGUST 31, (UNAUDITED) 2006 ------------------------------------------------------------------------------------------------------------------ OPERATIONS ------------------------------------------------------------------------------------------------------------------ Net investment loss $ (3,275,014) $ (6,037,681) ------------------------------------------------------------------------------------------------------------------ Net realized gain 83,708,036 69,688,555 ------------------------------------------------------------------------------------------------------------------ Net change in unrealized appreciation 308,216,535 245,880,325 ------------------------------------- Net increase in net assets resulting from operations 388,649,557 309,531,199 ------------------------------------------------------------------------------------------------------------------ DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS ------------------------------------------------------------------------------------------------------------------ Dividends from net investment income: Class A (9,069,835) -- Class B -- -- Class C -- -- Class N (181,029) -- Class Y (1,395,280) -- ------------------------------------- (10,646,144) -- ------------------------------------------------------------------------------------------------------------------ Distributions from net realized gain: Class A (26,759,457) (78,465,497) Class B (2,532,822) (9,877,066) Class C (5,166,400) (12,481,158) Class N (1,049,882) (2,719,549) Class Y (2,618,553) (2,218,004) ------------------------------------- (38,127,114) (105,761,274) ------------------------------------------------------------------------------------------------------------------ BENEFICIAL INTEREST TRANSACTIONS ------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from beneficial interest transactions: Class A 72,256,142 622,905,053 Class B (5,771,172) 27,567,174 Class C 14,792,166 132,578,217 Class N 2,363,680 30,341,396 Class Y 94,214,896 94,327,942 ------------------------------------- 177,855,712 907,719,782 ------------------------------------------------------------------------------------------------------------------ NET ASSETS ------------------------------------------------------------------------------------------------------------------ Total increase 517,732,011 1,111,489,707 ------------------------------------------------------------------------------------------------------------------ Beginning of period 1,845,676,430 734,186,723 ------------------------------------- End of period (including accumulated net investment loss of $20,244,948 and $6,323,790, respectively) $ 2,363,408,441 $ 1,845,676,430 =====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 26 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FINANCIAL HIGHLIGHTS --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2007 AUGUST 31, CLASS A (UNAUDITED) 2006 2005 2004 2003 2002 ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 23.40 $ 19.48 $ 14.14 $ 10.51 $ 7.98 $ 7.89 ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.02) 1 (.05) 1 (.02) 1 (.04) .01 .01 Net realized and unrealized gain 4.93 6.15 5.78 3.73 2.52 .16 --------------------------------------------------------------------------------------- Total from investment operations 4.91 6.10 5.76 3.69 2.53 .17 ----------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.16) -- (.11) (.06) -- (.08) Distributions from net realized gain (.48) (2.18) (.31) -- -- -- --------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.64) (2.18) (.42) (.06) -- (.08) ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 27.67 $ 23.40 $ 19.48 $ 14.14 $ 10.51 $ 7.98 ======================================================================================= ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 21.08% 33.49% 41.35% 35.20% 31.70% 2.20% ----------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA ----------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 1,641,940 $ 1,330,251 $ 552,861 $ 204,938 $ 132,342 $ 40,089 ----------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 1,457,891 $ 1,098,056 $ 353,479 $ 207,202 $ 48,879 $ 35,136 ----------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income (loss) (0.18)% (0.24)% (0.12)% (0.26)% 0.29% (0.17)% Total expenses 1.18% 4 1.20% 1.31% 1.34% 1.69% 2.16% Expenses after payments and waivers and reduction to custodian expenses 1.18% 1.20% 1.31% 1.34% 1.60% 1.88% ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 25% 35% 51% 124% 53% 62%
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. Expenses including indirect expenses from affiliated fund were as follows: Six Months Ended February 28, 2007 1.18% SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FINANCIAL HIGHLIGHTS Continued --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2007 AUGUST 31, CLASS B (UNAUDITED) 2006 2005 2004 2003 2002 ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 22.43 $ 18.91 $ 13.77 $ 10.28 $ 7.87 $ 7.77 ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.12) 1 (.24) 1 (.17) 1 (.13) (.02) (.07) Net realized and unrealized gain 4.72 5.94 5.62 3.62 2.43 .19 --------------------------------------------------------------------------------------- Total from investment operations 4.60 5.70 5.45 3.49 2.41 .12 ----------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- -- (.02) Distributions from net realized gain (.48) (2.18) (.31) -- -- -- --------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.48) (2.18) (.31) -- -- (.02) ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 26.55 $ 22.43 $ 18.91 $ 13.77 $ 10.28 $ 7.87 ======================================================================================= ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 20.57% 32.29% 40.07% 33.95% 30.62% 1.51% ----------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA ----------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 140,746 $ 124,505 $ 78,469 $ 43,478 $ 23,355 $ 18,859 ----------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 131,550 $ 114,900 $ 60,395 $ 37,393 $ 16,884 $ 16,868 ----------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment loss (1.02)% (1.11)% (1.02)% (1.14)% (0.28)% (0.94)% Total expenses 2.03% 4 2.09% 2.23% 2.35% 2.85% 2.93% Expenses after payments and waivers and reduction to custodian expenses 2.03% 2.09% 2.23% 2.31% 2.38% 2.65% ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 25% 35% 51% 124% 53% 62%
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. Expenses including indirect expenses from affiliated fund were as follows: Six Months Ended February 28, 2007 2.03% SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 28 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2007 AUGUST 31, CLASS C (UNAUDITED) 2006 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 22.44 $ 18.90 $ 13.76 $ 10.27 $ 7.86 $ 7.77 ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment loss (.12) 1 (.23) 1 (.16) 1 (.09) (.02) (.06) Net realized and unrealized gain 4.73 5.95 5.63 3.59 2.43 .16 ---------------------------------------------------------------------------------------- Total from investment operations 4.61 5.72 5.47 3.50 2.41 .10 ------------------------------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- -- (.02) (.01) -- (.01) Distributions from net realized gain (.48) (2.18) (.31) -- -- -- ---------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.48) (2.18) (.33) (.01) -- (.01) ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 26.57 $ 22.44 $ 18.90 $ 13.76 $ 10.27 $ 7.86 ======================================================================================== ------------------------------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 2 20.61% 32.42% 40.23% 34.05% 30.66% 1.35% ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA ------------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $ 302,382 $ 242,408 $ 86,184 $ 32,401 $ 12,793 $ 6,558 ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $ 269,360 $ 184,832 $ 55,819 $ 26,486 $ 7,489 $ 6,180 ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 3 Net investment loss (0.96)% (1.06)% (0.96)% (1.00)% (0.38)% (0.95)% Total expenses 1.96% 4 2.01% 2.14% 2.19% 2.69% 2.94% Expenses after payments and waivers and reduction to custodian expenses 1.96% 2.01% 2.14% 2.19% 2.39% 2.66% ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 25% 35% 51% 124% 53% 62%
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. Expenses including indirect expenses from affiliated fund were as follows: Six Months Ended February 28, 2007 1.96% SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND FINANCIAL HIGHLIGHTS Continued --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED FEBRUARY 28, 2007 AUGUST 31, CLASS N (UNAUDITED) 2006 2005 2004 2003 2002 ----------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 22.79 $ 19.08 $ 13.90 $ 10.35 $ 7.89 $ 7.87 ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) (.07) 1 (.14) 1 (.09) 1 (.05) (.03) .08 Net realized and unrealized gain 4.79 6.03 5.67 3.64 2.49 .07 --------------------------------------------------------------------------------------- Total from investment operations 4.72 5.89 5.58 3.59 2.46 .15 ----------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.08) -- (.09) (.04) -- (.13) Distributions from net realized gain (.48) (2.18) (.31) -- -- -- --------------------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.56) (2.18) (.40) (.04) -- (.13) ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 26.95 $ 22.79 $ 19.08 $ 13.90 $ 10.35 $ 7.89 ======================================================================================= ----------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 2 20.80% 33.06% 40.76% 34.70% 31.18% 1.99% ----------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA ----------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 63,442 $ 51,761 $ 16,673 $ 4,101 $ 1,128 $ 406 ----------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 56,227 $ 38,262 $ 9,698 $ 2,531 $ 625 $ 151 ----------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 3 Net investment income (loss) (0.60)% (0.63)% (0.51)% (0.50)% 0.25% (0.33)% Total expenses 1.61% 4 1.57% 1.75% 1.78% 1.96% 2.32% Expenses after payments and waivers and reduction to custodian expenses 1.61% 1.57% 1.68% 1.75% 1.90% 2.04% ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 25% 35% 51% 124% 53% 62%
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. Expenses including indirect expenses from affiliated fund were as follows: Six Months Ended February 28, 2007 1.61% SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND SIX MONTHS PERIOD ENDED ENDED FEBRUARY 28, 2007 AUGUST 31, CLASS Y (UNAUDITED) 2006 1 -------------------------------------------------------------------------------- PER SHARE OPERATING DATA -------------------------------------------------------------------------------- Net asset value, beginning of period $ 23.47 $ 19.97 -------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .02 .01 Net realized and unrealized gain 4.95 5.67 ---------------------------- Total from investment operations 4.97 5.68 -------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.25) -- Distributions from net realized gain (.48) (2.18) ---------------------------- Total dividends and/or distributions to shareholders (.73) (2.18) -------------------------------------------------------------------------------- Net asset value, end of period $ 27.71 $ 23.47 ============================ -------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 21.31% 30.60% -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA -------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 214,898 $ 96,751 -------------------------------------------------------------------------------- Average net assets (in thousands) $ 146,229 $ 43,043 -------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 0.14% 0.03% Total expenses 0.80% 5,6 0.82% 6 -------------------------------------------------------------------------------- Portfolio turnover rate 25% 35% 1. For the period from September 7, 2005 (inception of offering) to August 31, 2006. 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. Expenses including indirect expenses from affiliated fund were as follows: Six Months Ended February 28, 2007 0.80% 6. Reduction to custodian expenses less than 0.01%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 31 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES TO FINANCIAL STATEMENTS Unaudited -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 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, Class N and Class Y 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. Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC, however, the institutional investor 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. No such plan has been adopted for Class Y shares. 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 may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. 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(R) 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, as 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 32 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND 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. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded. 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. Investments in open-end registered investment companies (including affiliated funds) are valued at that fund's net asset value. 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. -------------------------------------------------------------------------------- INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund ("IMMF") which seeks current income and stability of principal. IMMF is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act of 1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's investment in IMMF is included in the Statement of Investments. As a shareholder, the Fund is subject to its proportional share of IMMF's 33 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued Class E expenses, including its management fee. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund's investment in IMMF. -------------------------------------------------------------------------------- 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. -------------------------------------------------------------------------------- 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. 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. As of February 28, 2007, the Fund had available for federal income tax purposes an estimated capital loss carryforward of zero expiring by 2015. This estimated capital loss carryforward represents carryforward as of the end of the last fiscal year, increased for losses deferred under tax accounting rules to the current fiscal year and is increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. As of February 28, 2007, it is estimated that the Fund will utilize $582,987 of capital loss carryforward to offset realized capital gains. During the fiscal year ended August 31, 2006, the Fund did not utilize any capital loss carryforward to offset capital gains realized in that fiscal year. As of August 31, 2006, the Fund had available for federal income tax purposes post-October losses of $582,987. 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 (the "Plan") for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the "Freeze Date") and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active independent trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan. During the six months ended 34 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND February 28, 2007, the Fund's projected benefit obligations were increased by $83,082 and payments of $28,425 were made to retired trustees, resulting in an accumulated liability of $135,081 as of February 28, 2007. The Board of Trustees has adopted a compensation deferral 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 compensation deferral plan. -------------------------------------------------------------------------------- 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, to the extent they are not offset by positive cash balances maintained by the Fund, 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. -------------------------------------------------------------------------------- INDEMNIFICATIONS. The Fund's organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent 35 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote. -------------------------------------------------------------------------------- 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:
SIX MONTHS ENDED FEBRUARY 28, 2007 YEAR ENDED AUGUST 31, 2006 1 SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------------------------------------------------- CLASS A Sold 10,699,183 $ 273,901,788 45,786,785 $ 1,019,057,904 Dividends and/or distributions reinvested 1,202,874 31,924,236 3,562,149 69,639,992 Redeemed (9,394,425) (233,569,882) 2 (20,894,266) (465,792,843) 3 -------------------------------------------------------------------------- Net increase 2,507,632 $ 72,256,142 28,454,668 $ 622,905,053 ========================================================================== ----------------------------------------------------------------------------------------------------- CLASS B Sold 433,426 $ 10,644,474 2,914,524 $ 61,689,329 Dividends and/or distributions reinvested 91,165 2,326,517 481,417 9,079,521 Redeemed (772,928) (18,742,163) 2 (1,996,614) (43,201,676) 3 -------------------------------------------------------------------------- Net increase (decrease) (248,337) $ (5,771,172) 1,399,327 $ 27,567,174 ========================================================================== ----------------------------------------------------------------------------------------------------- CLASS C Sold 1,485,687 $ 36,732,647 7,743,971 $ 166,349,265 Dividends and/or distributions reinvested 160,548 4,098,794 548,252 10,340,014 Redeemed (1,065,769) (26,039,275) 2 (2,050,959) (44,111,062) 3 -------------------------------------------------------------------------- Net increase 580,466 $ 14,792,166 6,241,264 $ 132,578,217 ========================================================================== ----------------------------------------------------------------------------------------------------- CLASS N Sold 503,379 $ 12,634,118 1,895,944 $ 41,657,866 Dividends and/or distributions reinvested 44,606 1,154,396 133,242 2,543,611 Redeemed (465,165) (11,424,834) 2 (631,651) (13,860,081) 3 -------------------------------------------------------------------------- Net increase 82,820 $ 2,363,680 1,397,535 $ 30,341,396 ==========================================================================
36 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
SIX MONTHS ENDED FEBRUARY 28, 2007 YEAR ENDED AUGUST 31, 2006 1 SHARES AMOUNT SHARES AMOUNT ----------------------------------------------------------------------------------------------------- CLASS Y Sold 3,613,871 $ 93,578,730 7,062,894 $ 158,790,428 Dividends and/or distributions reinvested 150,835 4,006,165 113,389 2,217,895 Redeemed (130,428) (3,369,999) 2 (3,054,350) (66,680,381) 3 -------------------------------------------------------------------------- Net increase 3,634,278 $ 94,214,896 4,121,933 $ 94,327,942 ==========================================================================
1. For the year ended August 31, 2006, for Class A, Class B, Class C and Class N shares and for the period from September 7, 2005 (inception of offering) to August 31, 2006, for Class Y shares. 2. Net of redemption fees of $8,690, $784, $1,606, $335 and $872 for Class A, Class B, Class C, Class N and Class Y, respectively. 3. Net of redemption fees of $70,860, $7,415, $11,928, $2,469 and $2,778 for Class A, Class B, Class C, Class N and Class Y, respectively. -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and money market funds, for the six months ended February 28, 2007, were as follows: PURCHASES SALES ------------------------------------------------------------------------------- Investment securities $ 516,510,105 $ 505,986,725 ------------------------------------------------------------------------------- 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 average net assets as shown in the following table: FEE SCHEDULE --------------------------------------------------- Up to $250 million 0.80% Next $250 million 0.77 Next $500 million 0.75 Next $1 billion 0.69 Over $2 billion 0.67 -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS or the Transfer Agent), 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 six months ended February 28, 2007, the Fund paid $1,504,556 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 per annum for assets of $10 million or more. The Class Y shares are subject to the minimum fees in the event that the per account fee does not equal or exceed the applicable minimum fees. OFS may voluntarily waive the minimum fees. 37 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued 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. -------------------------------------------------------------------------------- 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 periodically 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 periodically 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 periods. 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% on Class B and Class C shares and 0.25% 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 determines its uncompensated expenses under the plan at calendar quarter ends. The Distributor's aggregate uncompensated expenses under the plan at December 31, 2006 for Class B, Class C and Class N shares were $1,238,307, $1,969,876 and $397,240, 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 following table 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 SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR ------------------------------------------------------------------------------------------------- February 28, 2007 $336,377 $85,272 $76,312 $52,138 $2,344
38 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND -------------------------------------------------------------------------------- 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. This undertaking may be amended or withdrawn at any time. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund's investment in IMMF. During the six months ended February 28, 2007, the Manager waived $35,507 for IMMF management fees. -------------------------------------------------------------------------------- 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 February 28, 2007, the Fund had outstanding foreign currency contracts as follows:
CONTRACT EXPIRATION AMOUNT VALUATION AS OF UNREALIZED UNREALIZED CONTRACT DESCRIPTION DATES (000S) FEBRUARY 28, 2007 APPRECIATION DEPRECIATION ----------------------------------------------------------------------------------------------------------------------- CONTRACTS TO PURCHASE Canadian Dollar [CAD] 3/1/07-3/14/07 1,473CAD $1,259,709 $ -- $ 8,585 ---------------------- CONTRACTS TO SELL Norwegian Krone [NOK] 3/1/07 40,702NOK 6,636,766 22,678 -- ---------------------- Total unrealized appreciation and depreciation $22,678 $ 8,585 ======================
-------------------------------------------------------------------------------- 6. ILLIQUID SECURITIES As of February 28, 2007, 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. 39 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 7. SECURITIES LENDING The Fund lends portfolio securities from time to time in order to earn additional income. In return, the Fund receives collateral in the form of securities, letters of credit or cash, against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business each day. If the Fund is undercollateralized at the close of business due to an increase in market value of securities on loan, additional collateral is requested from the borrowing counterparty and is delivered to the Fund on the next business day. Cash collateral may be invested in approved investments and the Fund bears the risk of any loss in value of these investments. The Fund retains a portion of the interest earned from the collateral. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund could experience delays and cost in recovering the securities loaned or in gaining access to the collateral. The Fund continues to receive the economic benefit of interest or dividends paid on the securities loaned in the form of a substitute payment received from the borrower. As of February 28, 2007, the Fund had no securities on loan. -------------------------------------------------------------------------------- 8. RECENT ACCOUNTING PRONOUNCEMENTS In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement No. 109, ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions taken in the course of preparing the Fund's tax returns to determine whether it is "more-likely-than-not" that tax positions taken in the Fund's tax return will be ultimately sustained. A tax liability and expense must be recorded in respect of any tax position that, in Management's judgment, will not be fully realized. FIN 48 is effective for fiscal years beginning after December 15, 2006. As of February 28, 2007, the Manager has evaluated the implications of FIN 48 and does not currently anticipate a material impact to the Fund's financial statements. The Manager will continue to monitor the Fund's tax positions prospectively for potential future impacts. In September 2006, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. As of February 28, 2007, the Manager does not believe the adoption of SFAS No. 157 will materially impact the financial statement amounts; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for the period. 40 | 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. 41 | 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 investment advisory agreement (the "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 Agreement. The Board employs an independent consultant to prepare a report that provides information, including comparative information, that the Board requests for that purpose. In addition, the Board receives information throughout the year regarding Fund services, fees, expenses and performance. The Manager and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Manager's services, (ii) the investment performance of the Fund and the Manager, (iii) the fees and expenses of the Fund, including comparative expense information, (iv) the profitability of the Manager and its affiliates, including an analysis of the cost of providing services by the Manager and its affiliates, (v) the extent to which economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Manager from its relationship with the Fund. The Board was aware that there are alternatives to retaining the Manager. NATURE AND EXTENT OF SERVICES. The Board considered information about the nature and extent of the services provided to the Fund and information regarding the Manager's key personnel who provide such services. The Manager's duties include providing the Fund with 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; securities trading services; oversight of third party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund's investment restrictions. The Manager is responsible for providing certain administrative services to the Fund as well. Those services include providing and supervising all administrative and clerical personnel who are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund's operations; preparing and filing reports required by the Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by Federal and state securities laws for the sale of the Fund's shares. The Manager also provides the Fund with office space, facilities and equipment. 42 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND QUALITY OF SERVICES. The Board also considered the quality of the services provided and the quality of the Manager's resources that are available to the Fund. The Board took account of the fact 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 has received regarding the experience and professional qualifications of the Manager's personnel and the size and functions of its staff. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of Rohit Sah and the Manager's Global Equity investment team and analysts. The Board members also considered their experiences with the Manager and its officers and other personnel through their service as on the boards of the Fund and other funds advised by the Manager. The Board considered information regarding the quality of services provided by affiliates of the Manager, which its members have become knowledgeable about in connection with the renewal of the Fund's service agreements. In light of the foregoing, the Board concluded that the Fund benefits from the services provided under the Agreement and from the Manager's experience, reputation, personnel, operations, and resources. INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the Manager provided information on the investment performance of the Fund and the Manager at each Board meeting, including comparative performance information. 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 all other retail front-end load and no-load international small/ mid-cap growth funds advised by the Manager and by other investment advisers. The Board noted that the Fund's one-year, three-year, and five-year performance were better than its peer group median. MANAGEMENT FEES AND EXPENSES. The Board reviewed the fees paid to the Manager and its affiliates and the other expenses borne by the Fund. The Board also evaluated the comparability of the fees charged and the services provided to the Fund to the fees and services for other clients or accounts advised by the Manager. The independent consultant provided comparative data in regard to the fees and expenses of the Fund, other international small/mid-cap growth funds, other international small/mid-cap core funds and other funds with comparable asset levels and distribution features. The Board noted that the Fund's contractual and actual management fees and total expenses are lower than its peer group median. 43 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited / Continued -------------------------------------------------------------------------------- ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may realize economies of scale in managing and supporting the Fund, the extent to which those economies of scale benefit the Fund's shareholders and the current level of Fund assets in relation to the Fund's breakpoint schedule for its management fees. The Board also noted the Fund's breakpoints, which are intended to share economies of scale that may exist as the Fund grows with its shareholders. BENEFITS TO THE MANAGER. The Board considered information regarding the Manager's costs in serving as the Fund's investment adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Manager's profitability from its relationship with the Fund. 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 to considering the profits realized by the Manager, the Board considered information 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 for services provided and research provided to the Manager in connection with permissible brokerage arrangements (soft dollar arrangements). 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 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 Agreement, including the management fee, in light of all of the surrounding circumstances. 44 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND ITEM 2. CODE OF ETHICS. Not applicable to semiannual reports. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable to semiannual reports. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable to semiannual reports. 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 February 28, 2007, 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) Not applicable to semiannual reports. (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: April 10, 2007 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: April 10, 2007 By: /s/ Brian W. Wixted --------------------------- Brian W. Wixted Principal Financial Officer Date: April 10, 2007