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TOP HOLDINGS AND ALLOCATIONS


Top Ten Geographical Holdings
Canada	44.3	%
Australia	14.6
United States	9.8
Norway	8.3
Cayman Islands	5.4
Japan	4.0
United Kingdom	3.4
China	2.4
Germany	2.0
Singapore	1.7

Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2008, and are based on the total market value of investments.


Top Ten Common Stock Holdings
Opera Software ASA	5.2	%
Xinao Gas Holdings Ltd.	4.6
Addax Petroleum Corp.	3.7
Riversdale Mining Ltd.	3.5
Pacific Rubiales Energy Corp., Legend Shares	3.2
DNO International ASA	3.1
Felix Resources Ltd.	2.8
Thompson Creek Metals Co.	2.5
Central African Mining & Exploration Co. plc	2.5
Equinox Minerals Ltd.	2.4

Portfolio holdings and allocations are subject to change. Percentages are as of August 31, 2008, 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

FUND PERFORMANCE DISCUSSION

How has the Fund performed? Below is a discussion by OppenheimerFunds, Inc., of the Fund’s performance during its fiscal year ended August 31, 2008, followed by a graphical comparison of the Fund’s performance to an appropriate broad-based market index.

Management’s Discussion of Fund Performance. For the 12-month reporting period ending August 31, 2008, Oppenheimer International Small Company Fund’s Class A shares, without sales charge, returned -28.97% and underperformed the HSBC World excluding U.S. Smaller Companies Index, which returned -24.53% and the MSCI EAFE Index, which returned -14.41% over the same period. After several years of doing well, we are very disappointed that our absolute returns were negative. The four stocks which were the most significant detractors were Petrolifera Petroleum Ltd., Anvil Mining Ltd., Arques Industries AG and Calvalley Petroleum, Inc. The worst performing sectors were materials and financials. Stocks that made the most positive contributions to performance were Opera Software ASA, Felix Resources Ltd., Educomp Solutions Ltd., MacArthur Coal Ltd., First Quantum Minerals Ltd. and Pacific Rubiales Energy Corp. We attribute the underperformance to several reasons: first, equity markets worldwide de-rated. Second, although our largest sector holding at period end, energy, fared better than most other sectors for us, overall the sector still had negative returns. Third, we did poorly with financial stocks during this period, in particular, with Japanese property and emerging markets banks. Finally, the mining stocks did not achieve their growth potential, for a variety of reasons from regulatory issues to operational issues.

Most of the gains were recorded in the energy sector. Pacific Rubiales is a Canadian listed company operating in Colombia, with its top management originally from Venezuela’s national oil company, PDVSA. Trading at only 3 times estimated free cash flow for 2010, we remain very confident about its future prospects after we spent time visiting its operations in Colombia. Another positive contribution came from the S&P 500 Index put options, as the volatility in international stock markets picked up considerably. The other large contributions came from coal stocks which benefited from sky rocketing coal prices, in particular Felix Resources and MacArthur Coal (we exited MacArthur Coal by the reporting period end). Besides energy, it is worth mentioning Opera Software as a large position in the information technology sector, which delivered very good earnings results. Educomp, the largest education company in India, had strong earnings during the reporting period. However, the stock reached its price target and we took profits. Within metals and mining, First Quantum Minerals performed well. On a country level, no particular country fared well during the reporting period.

We continue to look at companies from both a top-down and bottom-up perspective, which leads us to be heavily invested in materials, energy, and agriculture oriented companies,

12 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

as well as other companies with a strong growth outlook. As always, we look for companies that we believe will be the companies of the future. These are characterized by large market potential for the company’s products and services, strong management teams, solid profitability and low stock prices relative to potential.

As mentioned earlier, most sectors delivered negative returns. A corollary is that most share prices fell as well during the reporting period. Some of the worst performers were Petrolifera, Anvil Mining, Arques Industries and Calvalley. Petrolifera had operational issues during the reporting period as they were unable to bring water flooding technology to their oilfields to offset primary decline rates. Anvil Mining remains one of the best quality copper producers in the world with a grade of 5% copper reserves, compared to less than 2% for its peers. However, its main mine in the Democratic Republic of Congo has been hit by higher construction costs and renegotiation problems arose with the government over its license. We have done a thorough review of our research on Arques Industries and firmly believe that the market is wrong about Arques. Based in Germany, Arques focuses on the acquisition and active restructuring of companies which appear to be in temporary transitional situations. Unfortunately, some of the company’s senior management left and these departures adversely affected the stock price. We believe there is nothing intrinsically wrong with the business and we continue to hold the stock and added to our holding on this weakness. Calvalley Petroleum is a Calgary-based junior international oil and gas company focused on the exploration and development of a block in Yemen. The company has run into difficulties with the government over constructing a pipeline. Because of repeated delays, the market seems to have lost confidence with the company’s management during this time, however, we have maintained our position as we believe the oil block Calvalley owns is highly productive and prospective.

We would like to reassert that with the current holdings of the Fund, we feel poised to face the market conditions ahead. However, we also want to warn our shareholders to expect potentially higher volatile returns for the Fund for the foreseeable future. So our outlook is not as bright as in times past. In all market environments, we focus on companies that can do well under all conditions. But we are facing a headwind of lower risk appetite, slower global growth, and tightening credit conditions, so overall stock performance could be low.

We would like to close this report by thanking our investors for their continued support during this difficult period. We know fully well how hard the last few months have been for our shareholders. Unfortunately it has been necessary to orient the Fund into its current form to face the future with all the attendant volatility that has come our way. We believe in the Fund’s positioning moving forward.

13 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

FUND PERFORMANCE DISCUSSION

Comparing the Fund’s Performance to the Market. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until August 31, 2008.

In the case of Class A, Class B and Class C shares, performance is measured over a ten-fiscal-year period. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001. In the case of Class Y shares, performance is measured from inception of the Class on September 7, 2005. The Fund’s performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C and Class N shares, and reinvestments of all dividends and capital gains distributions. Past performance cannot guarantee future results.

The Fund’s performance is compared to the performances of the HSBC World excluding U.S. Smaller Companies Index and the Morgan Stanley Capital International (MSCI) EAFE Index. The performance of small foreign companies is represented by the HSBC excluding U.S. Smaller Companies Index, comprised of small international securities in Europe, UK, Southeast Asia, Japan, Australia and New Zealand. The performance of large international companies is represented by MSCI EAFE Index, which is comprised of common stocks issued in Europe, Australia and the Far East. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund’s performance reflects the effects of the Fund’s business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund’s performance, it must be noted that the Fund’s investments are not limited to the investments in either index.

14 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:

The performance data quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. For performance data current to the most recent month end, visit us at www.oppenheimerfunds.com, or call us at 1.800.525.7048. Fund returns include changes in share price, reinvested distributions, and the applicable sales charge: for Class A shares, the current maximum initial sales charge of 5.75%; for Class B shares, the contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class C and N shares, the contingent 1% deferred sales charge for the 1-year period. There is no sales charge for Class Y shares. Because Class B shares convert to Class A shares 72 months after purchase, the 10-year return for Class B shares uses Class A performance for the period after conversion. See page 20 for further information.

15 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:

17 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:

19 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

NOTES

Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns shown do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

Investors should consider the Fund’s investment objectives, risks, and other charges and expenses carefully before investing. The Fund’s prospectus contains this and other information about the Fund, and may be obtained by asking your financial advisor, calling us at 1.800.525.7048 or visiting our website at www.oppenheimerfunds.com. Read the prospectus carefully before investing.

The Fund’s investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc.

Class A shares of the Fund were first publicly offered on 11/17/97. Unless otherwise noted, Class A returns include the maximum initial sales charge of 5.75%.

Class B shares of the Fund were first publicly offered on 11/17/97. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72 months after purchase, the 10-year 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.

20 | 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 applicable); and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended August 31, 2008.

Actual Expenses. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section 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 first section 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 second section of the table provides 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 for each class before expenses, which is not the 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 exceptions

22 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

described in the Statement of Additional Information). Therefore, the “hypothetical” section of the table is 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
Actual	March 1, 2008	August 31, 2008	August 31, 2008

Class A	$1,000.00	$ 720.30	$ 5.08
Class B	1,000.00	717.30	8.81
Class C	1,000.00	717.60	8.42
Class N	1,000.00	718.90	6.90
Class Y	1,000.00	721.80	3.56

Hypothetical (5% return before expenses)

Class A	1,000.00	1,019.25	5.96
Class B	1,000.00	1,014.93	10.33
Class C	1,000.00	1,015.38	9.88
Class N	1,000.00	1,017.14	8.09
Class Y	1,000.00	1,021.01	4.17

Expenses are equal to the Fund’s annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated fund, based on the 6-month period ended August 31, 2008 are as follows:


Class	Expense Ratios

Class A		1.17	%
Class B		2.03
Class C		1.94
Class N		1.59
Class Y		0.82

The expense ratios reflect reduction to custodian expenses and 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 and reduction to custodian expenses, if applicable.

23 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

STATEMENT OF INVESTMENTS August 31, 2008


	Shares		Value

Common Stocks—89.0%

Consumer Discretionary—3.3%

Auto Components—2.3%
Azure Dynamics Corp., Legend Shares^1,2,3		20,549,500	$	4,354,528
Westport Innovations, Inc.^1,3		564,286		7,116,020
Westport Innovations, Inc., Legend Shares^1,3		1,935,714		24,410,633

				35,881,181

Diversified Consumer Services—0.1%
Shinwa Art Auction Co. Ltd.³		3,229		1,179,668

Media—0.1%
Village Roadshow Ltd.		910,217		1,318,858

Multiline Retail—0.8%
Don Quijote Co. Ltd.		750,000		13,140,165

Consumer Staples—2.8%

Food Products—2.8%
China Green (Holdings) Ltd.		20,000,000		17,810,009
China Vanguard Group Ltd.³		165,000,000		12,428,255
Crown Confectionery Co. Ltd.		32,296		1,554,147
Viterra, Inc.¹		1,000,000		11,537,013

				43,329,424

Energy—33.3%

Energy Equipment & Services—1.7%
EnQuest Energy Services Corp., Legend Shares¹		333,330		621,580
Trican Well Service Ltd.		1,250,000		25,240,158

				25,861,738

Oil, Gas & Consumable Fuels—31.6%
Addax Petroleum Corp.⁴		1,500,000		57,313,054
Calvalley Petroleum, Inc., Cl. A^1,3		9,000,000		21,529,478
Canoro Resources Ltd.^1,3		1,800,000		1,271,426
Canoro Resources Ltd., Legend Shares^1,3		7,200,000		5,085,704
CGX Energy, Inc.¹		100,000		143,153
CGX Energy, Inc., Legend Shares¹		4,400,000		6,298,738
Corridor Resources, Inc.¹		2,500,000		13,656,056
Culane Energy Corp.^1,3		1,750,000		9,789,979
DNO International ASA¹		30,000,000		48,219,193
Felix Resources Ltd.		2,500,000		43,299,987
Gulf Keystone Petroleum Ltd.^1,3		21,500,000		10,483,695
Heritage Oil Ltd.¹		3,500,000		12,775,935
Nido Petroleum Ltd.^1,3		86,000,000		22,046,293
Pacific Rubiales Energy Corp.¹		3,855,926		37,549,703
Pacific Rubiales Energy Corp., Legend Shares^1,2		5,144,072		50,093,901
Pan Orient Energy Corp.¹		975,000		7,759,230
Pan Orient Energy Corp., Legend Shares¹		775,000		6,167,593
Petrolifera Petroleum Ltd.^1,3		4,500,000		21,826,144
Riversdale Mining Ltd.¹		6,000,000		53,416,791
Sibir Energy plc¹		225,708		2,386,311
Straits Asia Resources Ltd.		15,000,000		26,772,520
WesternZagros Resources Ltd.^1,3		12,884,800		30,215,815

				488,100,699

Financials—6.8%

Capital Markets—2.1%
Uranium Participation Corp.^1,3		3,976,300		32,355,653

F1 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

STATEMENT OF INVESTMENTS Continued


	Shares		Value

Commercial Banks—1.8%
Karnataka Bank Ltd.		2,800,000	$	8,860,488
Vozrozhdenie Bank		500,000		19,000,000

				27,860,488

Diversified Financial Services—2.3%
Arques Industries AG³		2,250,000		30,433,953
World Energy Solutions, Inc.^1,3		6,000,000		4,520,625

				34,954,578

Real Estate Management & Development—0.6%
Funai Zaisan Consultants Co. Ltd.³		10,000		9,443,390

Health Care—0.0%

Biotechnology—0.0%
Norwood Immunology Ltd.^1,2,3		14,500,000		660,785

Industrials—0.1%

Machinery—0.1%
Fong’s Industries Co. Ltd.		2,102,000		689,481

Information Technology—8.5%

Internet Software & Services—5.2%
Opera Software ASA^1,3		18,000,000		80,328,247

IT Services—2.4%
Travelsky Technology Ltd., Cl. H³		60,000,000		36,516,926

Software—0.9%
Enablence Technologies, Inc.^1,3		2,900,000		2,785,835
Enablence Technologies, Inc., Legend Shares^1,3		12,000,000		11,527,595
Zaio Corp., Legend Shares^1,4		500,000		138,915

				14,452,345

Materials—28.8%

Chemicals—1.8%
Hanfeng Evergreen, Inc.¹		3,000,000		27,462,799

Metals & Mining—26.1%
Anvil Mining Ltd.^1,3		5,000,000		34,140,139
Avoca Resources Ltd.¹		8,000,000		12,708,772
Central African Mining & Exploration Co. plc¹		65,000,000		39,100,239
Equinox Minerals Ltd.¹		10,000,000		37,671,878
First Quantum Minerals Ltd.		400,000		25,805,236
Forsys Metals Corp.¹		2,500,000		11,654,737
HudBay Minerals, Inc.¹		3,500,000		35,402,147
Ivernia, Inc.^1,3		11,945,000		6,187,371
Ivernia, Inc., Legend Shares^1,2,3		3,200,000		1,657,563
Lundin Mining Corp.¹		790,000		3,779,620
MagIndustries Corp.¹		4,580,000		8,583,726
Mirabela Nickel Ltd.¹		2,500,000		10,383,311
Mitsui Mining Co. Ltd.		11,000,000		37,603,587
Moly Mines Ltd.¹		4,000,000		6,969,297
Panoramic Resources Ltd.		5,000,000		9,333,524
Red Back Mining, Inc.¹		3,500,000		22,579,582
Sino Gold Mining Ltd.¹		8,000,000		29,120,199
Thompson Creek Metals Co.¹		2,500,000		39,202,298
Western Areas NL¹		4,000,000		31,759,674

				403,642,900

Paper & Forest Products—0.9%
Sino-Forest Corp.¹		750,000		14,126,954

Utilities—5.4%

Electric Utilities—0.8%
EOS Russia AB¹		1,700,000		12,676,144

F2 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND


					Shares		Value

Gas Utilities—4.6%
Xinao Gas Holdings Ltd.						44,334,000	$	70,551,761

Total Common Stocks (Cost $1,559,586,338)								1,374,534,184

Preferred Stocks—0.4%

Banco Sofisa SA, Preference						661,700		2,634,621
Village Roadshow Ltd., Cl. A, Preference						3,220,000		3,953,974

Total Preferred Stocks (Cost $8,646,345)								6,588,595

	Expiration		Strike
	Date		Price		Contracts		Value

Options Purchased—2.7%

Standard and Poor’s 500 Index (The) Put¹		6/20/09	$	1,100		5,400	$	20,196,000
Standard and Poor’s 500 Index (The) Put¹		12/19/08		950		7,200		21,672,000

Total Options Purchased (Cost $43,417,800)								41,868,000


	Units

Rights, Warrants and Certificates—0.6%

China Vanguard Group Ltd. Wts., Strike Price 1.33HKD, Exp. 11/2/08^1,2,3		22,000,000			112,754
Pacific Rubiales Energy Corp. Wts., Strike Price 7.80CAD, Exp. 7/12/12^1,2		1,999,953			8,852,683
Sikanni Services Ltd. Wts., Strike Price 24CAD, Exp. 9/30/08^1,2		5,000,000			—

Total Rights, Warrants and Certificates (Cost $1,808,930)					8,965,437

	Shares

Investment Companies—7.1%

PowerShares DB Agriculture Fund¹		1,500,000			53,055,000
PowerShares DB Commodity Index Tracking Fund¹		1,500,000			56,640,000

Total Investment Companies (Cost $114,502,167)					109,695,000

Total Investments, at Value (Cost $1,727,961,580)		99.8	%		1,541,651,216
Other Assets Net of Liabilities		0.2			3,603,855

Net Assets		100.0	%	$	1,545,255,071

Industry classifications are unaudited.

Footnotes to Statement of Investments

Strike price is reported in U.S. Dollars, except for those denoted in the following currencies:

CAD Canadian Dollar
HKD Hong Kong Dollar

F3 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

1. Non-income producing security.

2. Illiquid security. The aggregate value of illiquid securities as of August 31, 2008 was $65,732,214, which represents 4.25% 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 August 31, 2008, 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 adviser. Transactions during the period in which the issuer was an affiliate are as follows:


	Shares		Gross			Gross			Shares
	August 31, 2007		Additions			Reductions			August 31, 2008

Absolute Software Corp.		2,000,000		2,000,000	^b		4,000,000			—
Anvil Mining Ltd.		4,000,000		1,000,000			—			5,000,000
Arques Industries AG		1,750,000		500,000			—			2,250,000
Azure Dynamics Corp., Legend Shares		21,000,000		—			450,500			20,549,500
Calvalley Petroleum, Inc., Cl. A		8,000,000		1,000,000			—			9,000,000
Canoro Resources Ltd.		—		1,800,000			—			1,800,000
Canoro Resources Ltd., Legend Shares		—		7,200,000			—			7,200,000
Central African Mining & Exploration Co. plc^a		60,000,000		5,000,000			—			65,000,000
China Vanguard Group Ltd.		165,000,000		—			—			165,000,000
China Vanguard Group Ltd. Wts., Exp. 11/2/08		22,000,000		—			—			22,000,000
Crown Confectionary Co. Ltd.^a		110,000		—			77,704			32,296
Culane Energy Corp.		2,000,000		90,000			340,000			1,750,000
Danal Co. Ltd.		2,300,000		—			2,300,000			—
Duzon Digital Ware Co. Ltd.		1,200,000		—			1,200,000			—
Enablence Technologies, Inc.		—		3,500,000			600,000			2,900,000
Enablence Technologies, Inc., Legend Shares		—		24,000,000			12,000,000			12,000,000
Fidec Corp.		11,000		3,759			14,759			—
Funai Zaisan Consultants Co. Ltd.		5,000		5,000	^b		—			10,000
Gulf Keystone Petroleum Ltd.		21,500,000		—			—			21,500,000
Imaging Dynamics Co. Ltd.		2,000,000		—			2,000,000			—
Imaging Dynamics Co. Ltd., Legend Shares		4,000,000		—			4,000,000			—
Immersive Media Corp.		2,000,000		—			2,000,000			—
Ivernia, Inc.		9,050,000		2,895,000			—			11,945,000
Ivernia, Inc., Legend Shares		3,200,000		—			—			3,200,000
Kaboose, Inc.		8,000,000		—			8,000,000			—
Kaboose, Inc., Legend Shares		1,000,000		—			1,000,000			—
Kenedix, Inc.		38,000		2,000			40,000			—
Klabin Segall SA		3,000,000		—			3,000,000			—
Macromill, Inc.		8,000		2,000			10,000			—
Mobilians Co. Ltd.		1,554,094		—			1,554,094			—
Moly Mines Ltd.^a		5,000,000		—			1,000,000			4,000,000
Nido Petroleum Ltd.		—		86,000,000			—			86,000,000
Norwood Immunology Ltd.		14,500,000		—			—			14,500,000
Olympus Pacific Minerals, Inc.		13,000,000		—			13,000,000			—
Opera Software ASA		18,000,000		—			—			18,000,000
Oppenheimer Institutional Money Market Fund, Cl. E		27,040,128		1,071,554,377			1,098,594,505			—
Pacific Rubiales Energy Corp. (formerly Petro Rubiales Energy Corp.)^a		5,000,559		11,355,833	^b		12,500,466	^b		3,855,926
Pacific Rubiales Energy Corp. (formerly Petro Rubiales Energy Corp.), Legend Shares^a		38,999,441		—			33,855,369	^b		5,144,072
Pacific Rubiales Energy Corp. Wts., Exp. 7/12/12 (formerly Petro Rubiales Energy Corp.)^a		11,999,720		—			9,999,767	^b		1,999,953
Petrolifera Petroleum Ltd.		3,000,000		1,500,000			—			4,500,000
PVR Ltd.		2,000,000		—			2,000,000			—
RISA Partners, Inc.		18,000		1,000			19,000			—

F4 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND


	Shares		Gross			Gross			Shares
	August 31, 2007		Additions			Reductions			August 31, 2008

Shinwa Art Auction Co. Ltd.		5,000		—			1,771			3,229
Sikanni Services Ltd.		10,000,000		—			10,000,000	^b		—
Sikanni Services Ltd. Wts., Exp. 9/30/08^a		5,000,000		—			—			5,000,000
SK Communications Co. Ltd. (formerly Empas Corp.)		1,250,000		250,000			1,500,000			—
Stockgroup Information Systems, Inc.		3,000,000		—			3,000,000	^b		—
Travelsky Technology Ltd., Cl. H		60,000,000		—			—			60,000,000
Uranium Participation Corp.		—		9,525,000			5,548,700			3,976,300
Western Prospector Group Ltd.		2,500,000		1,500,000			4,000,000			—
WesternZagros Resources Ltd.		—		13,000,000			115,200			12,884,800
Westport Innovations, Inc.		1,784,800		440,200			1,660,714	^b		564,286
Westport Innovations, Inc., Legend Shares		6,775,000		—			4,839,286	^b		1,935,714
World Energy Solutions, Inc.		6,000,000		—			—			6,000,000
Wumart Stores, Inc.		24,000,000		6,000,000			30,000,000			—
Xinhua Finance Ltd.		35,000		40,000	^b		75,000			—
Xinhua Finance Ltd., Sponsored ADR		4,000,000		—			4,000,000	^b		—
Zaio Corp.		1,526,400		473,600			2,000,000			—
Zaio Corp., Legend Shares^a		1,000,000		—			500,000			500,000

						Dividend			Realized
			Value			Income			Gain (Loss)

Absolute Software Corp.			$	—		$	—		$	21,711,940
Anvil Mining Ltd.				34,140,139			—			—
Arques Industries AG				30,433,953			—			—
Azure Dynamics Corp., Legend Shares				4,354,528			—			(254,294	)
Calvalley Petroleum, Inc., Cl. A				21,529,478			—			—
Canoro Resources Ltd.				1,271,426			—			—
Canoro Resources Ltd., Legend Shares				5,085,704			—			—
Central African Mining & Exploration Co. plc^a				—	^c		—			—
China Vanguard Group Ltd.				12,428,255			—			—
China Vanguard Group Ltd. Wts., Exp. 11/2/08				112,754			—			—
Crown Confectionary Co. Ltd.^a				—	^c		92,493			(5,356,029	)
Culane Energy Corp.				9,789,979			—			(720,647	)
Danal Co. Ltd.				—			—			(15,247,487	)
Duzon Digital Ware Co. Ltd.				—			340,167			7,778,692
Enablence Technologies, Inc.				2,785,835			—			(457,919	)
Enablence Technologies, Inc., Legend Shares				11,527,595			—			—
Fidec Corp.				—			58,360			(15,506,264	)
Funai Zaisan Consultants Co. Ltd.				9,443,390			125,732			—
Gulf Keystone Petroleum Ltd.				10,483,695			—			—
Imaging Dynamics Co. Ltd.				—			—			(2,150,939	)
Imaging Dynamics Co. Ltd., Legend Shares				—			—			(5,728,588	)
Immersive Media Corp.				—			—			(7,063,001	)
Ivernia, Inc.				6,187,371			—			—
Ivernia, Inc., Legend Shares				1,657,563			—			—
Kaboose, Inc.				—			—			(10,455,415	)
Kaboose, Inc., Legend Shares				—			—			(892,412	)
Kenedix, Inc.				—			777,313			(35,373,610	)
Klabin Segall SA				—			199,371			(4,441,104	)
Macromill, Inc.				—			235,690			(15,751,927	)
Mobilians Co. Ltd.				—			—			(4,141,437	)
Moly Mines Ltd.^a				—	^c		—			(4,871,760	)
Nido Petroleum Ltd.				22,046,293			—			—
Norwood Immunology Ltd.				660,785			—			—
Olympus Pacific Minerals, Inc.				—			—			(2,395,384	)

F5 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued


				Dividend		Realized
	Value			Income		Gain (Loss)

Opera Software ASA	$	80,328,247		$	—	$	—
Oppenheimer Institutional Money Market Fund, Cl. E		—			1,830,484		—
Pacific Rubiales Energy Corp. (formerly Petro Rubiales Energy Corp.)^a		—	^c		6		—
Pacific Rubiales Energy Corp. (formerly Petro Rubiales Energy Corp.), Legend Shares^a		—	^c		—		—
Pacific Rubiales Energy Corp. Wts., Exp. 7/12/12 (formerly Petro Rubiales Energy Corp.)^a		—	^c		—		—
Petrolifera Petroleum Ltd.		21,826,144			—		—
PVR Ltd.		—			43,090		(2,548,626	)
RISA Partners, Inc.		—			286,014		(12,928,018	)
Shinwa Art Auction Co. Ltd.		1,179,668			111,511		(5,346,746	)
Sikanni Services Ltd.		—			—		—
Sikanni Services Ltd. Wts., Exp. 9/30/08^a		—	^c		—		—
SK Communications Co. Ltd. (formerly Empas Corp.)		—			—		(2,617,971	)
Stockgroup Information Systems, Inc.		—			—		(263,248	)
Travelsky Technology Ltd., Cl. H		36,516,926			1,115,657		—
Uranium Participation Corp.		32,355,653			—		(20,444,793	)
Western Prospector Group Ltd.		—			—		(14,725,670	)
WesternZagros Resources Ltd.		30,215,815			—		(208,725	)
Westport Innovations, Inc.		7,116,020			14		187,500
Westport Innovations, Inc., Legend Shares		24,410,633			—		—
World Energy Solutions, Inc.		4,520,625			—		—
Wumart Stores, Inc.		—			—		4,893,897
Xinhua Finance Ltd.		—			—		(43,895,164	)
Xinhua Finance Ltd., Sponsored ADR		—			—		(23,200	)
Zaio Corp.		—			—		(6,866,554	)
Zaio Corp., Legend Shares^a		—	^c		—		(1,199,549	)

	$	422,408,474		$	5,215,902	$	(207,304,452	)



a.		No longer an affiliate as of August 31, 2008.

b.		All or a portion is the result of a corporate action.

c.		The security is no longer an affiliate, therefore, the value has been excluded from this table.

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 $57,451,969 or 3.72% of the Fund’s net assets as of August 31, 2008.

Foreign Currency Exchange Contracts as of August 31, 2008 are as follows:


		Contract
		Amount		Expiration				Unrealized		Unrealized
Contract Description	Buy/Sell	(000s)		Date		Value		Appreciation		Depreciation

Australian Dollar (AUD)	Sell	806	AUD		9/2/08	$	691,991	$	1,522	$	1,208
British Pound Sterling (GBP)	Sell	1,430	GBP		9/2/08		2,606,395		13,791		—
Canadian Dollar (CAD)	Sell	2,012	CAD		9/2/08		1,894,566		26,434		—
Hong Kong Dollar (HKD)	Sell	1,536	HKD		9/2/08		196,859		—		63
Japanese Yen (JPY)	Sell	187,823	JPY		9/2/08		1,725,922		—		12,110

Total unrealized appreciation and depreciation								$	41,747	$	13,381

F6 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

STATEMENT OF ASSETS AND LIABILITIES August 31, 2008


Assets

Investments, at value—see accompanying statement of investments:
Unaffiliated companies (cost $1,145,126,788)	$	1,119,242,742
Affiliated companies (cost $582,834,792)		422,408,474

		1,541,651,216

Cash—foreign currencies (cost $79,042)		79,190
Unrealized appreciation on foreign currency exchange contracts		41,747
Receivables and other assets:
Investments sold		13,666,076
Dividends		1,067,331
Shares of beneficial interest sold		832,224
Other		84,642

Total assets		1,557,422,426

Liabilities

Bank overdraft		5,483,630
Unrealized depreciation on foreign currency exchange contracts		13,381
Payables and other liabilities:
Shares of beneficial interest redeemed		4,990,958
Distribution and service plan fees		558,272
Transfer and shareholder servicing agent fees		250,828
Trustees’ compensation		234,756
Investments purchased		200,096
Shareholder communications		176,170
Foreign capital gains tax		97,842
Other		161,422

Total liabilities		12,167,355

Net Assets	$	1,545,255,071


Composition of Net Assets

Paid-in capital	$	1,925,392,691
Accumulated net investment loss		(14,391,821	)
Accumulated net realized loss on investments and foreign currency transactions		(179,331,951	)
Net unrealized depreciation on investments and translation of assets and liabilities denominated in foreign currencies		(186,413,848	)

Net Assets	$	1,545,255,071

F8 | 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 $938,262,784 and 52,412,351 shares of beneficial interest outstanding)	$	17.90
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price)	$	18.99
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $70,077,567 and 4,090,463 shares of beneficial interest outstanding)	$	17.13
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $172,159,376 and 10,065,617 shares of beneficial interest outstanding)	$	17.10
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $43,687,248 and 2,519,280 shares of beneficial interest outstanding)	$	17.34
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of $321,068,096 and 17,933,762 shares of beneficial interest outstanding)	$	17.90

See accompanying Notes to Financial Statements.

F9 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

STATEMENT OF OPERATIONS For the Year Ended August 31, 2008


Investment Income

Dividends:
Unaffiliated companies (net of foreign withholding taxes of $255,344)	$	12,018,514
Affiliated companies (net of foreign withholding taxes of $205,521)		5,215,902
Interest		24,944
Other income		11,663

Total investment income		17,271,023

Expenses

Management fees		18,242,695
Distribution and service plan fees:
Class A		3,902,009
Class B		1,167,789
Class C		2,972,527
Class N		365,208
Transfer and shareholder servicing agent fees:
Class A		2,054,718
Class B		224,339
Class C		405,067
Class N		194,910
Class Y		183,931
Shareholder communications:
Class A		265,388
Class B		40,436
Class C		51,325
Class N		4,502
Class Y		36,900
Custodian fees and expenses		682,602
Trustees’ compensation		105,834
Other		274,718

Total expenses		31,174,898
Less reduction to custodian expenses		(8,139	)
Less waivers and reimbursements of expenses		(42,276	)

Net expenses		31,124,483

Net Investment Loss		(13,853,460	)

F10 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

STATEMENTS OF CHANGES IN NET ASSETS


Year Ended August 31,	2008			2007

Operations

Net investment loss	$	(13,853,460	)	$	(2,370,704	)
Net realized gain		21,643,452			410,180,930
Net change in unrealized appreciation (depreciation)		(722,374,471	)		188,155,854

Net increase (decrease) in net assets resulting from operations		(714,584,479	)		595,966,080

Dividends and/or Distributions to Shareholders

Dividends from net investment income:
Class A		(71,309,387	)		(9,069,418	)
Class B		(2,799,812	)		—
Class C		(8,197,783	)		—
Class N		(2,814,556	)		(181,028	)
Class Y		(21,047,428	)		(1,395,280	)

		(106,168,966	)		(10,645,726	)

Distributions from net realized gain:
Class A		(276,918,559	)		(26,758,605	)
Class B		(20,467,627	)		(2,532,828	)
Class C		(52,812,894	)		(5,166,398	)
Class N		(12,722,879	)		(1,049,876	)
Class Y		(67,333,347	)		(2,618,553	)

		(430,255,306	)		(38,126,260	)

Tax return of capital distribution from net realized gain:
Class A		(5,757,387	)		—
Class B		(425,540	)		—
Class C		(1,098,028	)		—
Class N		(264,520	)		—
Class Y		(1,399,921	)		—

		(8,945,396	)		—

Beneficial Interest Transactions

Net increase (decrease) in net assets resulting from beneficial interest transactions:
Class A		(204,917,779	)		212,151,777
Class B		(16,849,242	)		(17,884,834	)
Class C		(36,607,555	)		38,773,724
Class N		(849,218	)		15,778,066
Class Y		160,746,895			261,996,860

		(98,476,899	)		510,815,593

Net Assets

Total increase (decrease)		(1,358,431,046	)		1,058,009,687
Beginning of period		2,903,686,117			1,845,676,430

End of period (including accumulated net investment income (loss) of $(14,391,821) and $33,712,777, respectively)	$	1,545,255,071		$	2,903,686,117

See accompanying Notes to Financial Statements.

F12 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

FINANCIAL HIGHLIGHTS



Class A Year Ended August 31,	2008			2007			2006			2005			2004

Per Share Operating Data

Net asset value, beginning of period	$	30.52		$	23.40		$	19.48		$	14.14		$	10.51
Income (loss) from investment operations:
Net investment income (loss)		(.12	)¹		.01	¹		(.05	)¹		(.02	)¹		(.04	)
Net realized and unrealized gain (loss)		(6.83	)		7.75			6.15			5.78			3.73

Total from investment operations		(6.95	)		7.76			6.10			5.76			3.69
Dividends and/or distributions to shareholders:
Dividends from net investment income		(1.06	)		(.16	)		—			(.11	)		(.06	)
Distributions from net realized gain		(4.51	)		(.48	)		(2.18	)		(.31	)		—
Tax return of capital distribution from net realized gain		(.10	)		—			—			—			—

Total dividends and/or distributions to shareholders		(5.67	)		(.64	)		(2.18	)		(.42	)		(.06	)

Net asset value, end of period	$	17.90		$	30.52		$	23.40		$	19.48		$	14.14


Total Return, at Net Asset Value²		(28.97	)%		33.56	%		33.49	%		41.35	%		35.20	%

Ratios/Supplemental Data

Net assets, end of period (in thousands)	$	938,263		$	1,931,669		$	1,330,251		$	552,861		$	204,938
Average net assets (in thousands)	$	1,617,877		$	1,702,152		$	1,098,056		$	353,479		$	207,202
Ratios to average net assets:³
Net investment income (loss)		(0.46	)%		0.03	%		(0.24	)%		(0.12	)%		(0.26	)%
Total expenses		1.14	%^4,5,6		1.13	%^4,5,6		1.20	%⁶		1.31	%⁶		1.34	%⁶
Portfolio turnover rate		67	%		57	%		35	%		51	%		124	%


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 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 less than one full year.

4.		Total expenses including indirect expenses from affiliated fund were as follows:

Year Ended August 31, 2008		1.14%
Year Ended August 31, 2007		1.13%

5.		Waiver or reimbursement of indirect management fees less than 0.005%.

6.		Reduction to custodian expenses less than 0.005%.

See accompanying Notes to Financial Statements.

F13 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

FINANCIAL HIGHLIGHTS Continued


Class B Year Ended August 31,	2008			2007			2006			2005			2004

Per Share Operating Data

Net asset value, beginning of period	$	29.16		$	22.43		$	18.91		$	13.77		$	10.28
Income (loss) from investment operations:
Net investment loss		(.32	)¹		(.22	)¹		(.24	)¹		(.17	)¹		(.13	)
Net realized and unrealized gain (loss)		(6.55	)		7.43			5.94			5.62			3.62

Total from investment operations		(6.87	)		7.21			5.70			5.45			3.49
Dividends and/or distributions to shareholders:
Dividends from net investment income		(.55	)		—			—			—			—
Distributions from net realized gain		(4.51	)		(.48	)		(2.18	)		(.31	)		—
Tax return of capital distribution from net realized gain		(.10	)		—			—			—			—

Total dividends and/or distributions to shareholders		(5.16	)		(.48	)		(2.18	)		(.31	)		—

Net asset value, end of period	$	17.13		$	29.16		$	22.43		$	18.91		$	13.77


Total Return, at Net Asset Value²		(29.54	)%		32.43	%		32.29	%		40.07	%		33.95	%

Ratios/Supplemental Data

Net assets, end of period (in thousands)	$	70,078		$	142,120		$	124,505		$	78,469		$	43,478
Average net assets (in thousands)	$	116,865		$	142,384		$	114,900		$	60,395		$	37,393
Ratios to average net assets:³
Net investment loss		(1.30	)%		(0.81	)%		(1.11	)%		(1.02	)%		(1.14	)%
Total expenses		1.99	%⁴		1.97	%⁴		2.09	%		2.23	%		2.35	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.99	%		1.97	%		2.09	%		2.23	%		2.31	%
Portfolio turnover rate		67	%		57	%		35	%		51	%		124	%


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 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 less than one full year.

4.		Total expenses including indirect expenses from affiliated fund were as follows:

Year Ended August 31, 2008		1.99%
Year Ended August 31, 2007		1.97%

See accompanying Notes to Financial Statements.

F14 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND


Class C Year Ended August 31,	2008			2007			2006			2005			2004

Per Share Operating Data

Net asset value, beginning of period	$	29.19		$	22.44		$	18.90		$	13.76		$	10.27
Income (loss) from investment operations:
Net investment loss		(.30	)¹		(.20	)¹		(.23	)¹		(.16	)¹		(.09	)
Net realized and unrealized gain (loss)		(6.55	)		7.43			5.95			5.63			3.59

Total from investment operations		(6.85	)		7.23			5.72			5.47			3.50
Dividends and/or distributions to shareholders:
Dividends from net investment income		(.63	)		—			—			(.02	)		(.01	)
Distributions from net realized gain		(4.51	)		(.48	)		(2.18	)		(.31	)		—
Tax return of capital distribution from net realized gain		(.10	)		—			—			—			—

Total dividends and/or distributions to shareholders		(5.24	)		(.48	)		(2.18	)		(.33	)		(.01	)

Net asset value, end of period	$	17.10		$	29.19		$	22.44		$	18.90		$	13.76


Total Return, at Net Asset Value²		(29.52	)%		32.50	%		32.42	%		40.23	%		34.05	%

Ratios/Supplemental Data

Net assets, end of period (in thousands)	$	172,159		$	352,532		$	242,408		$	86,184		$	32,401
Average net assets (in thousands)	$	296,798		$	312,797		$	184,832		$	55,819		$	26,486
Ratios to average net assets:³
Net investment loss		(1.23	)%		(0.75	)%		(1.06	)%		(0.96	)%		(1.00	)%
Total expenses		1.91	%^4,5,6		1.91	%^4,5,6		2.01	%⁶		2.14	%⁶		2.19	%^6,7
Portfolio turnover rate		67	%		57	%		35	%		51	%		124	%


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 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 less than one full year.

4.		Total expenses including indirect expenses from affiliated fund were as follows:

Year Ended August 31, 2008		1.91%
Year Ended August 31, 2007		1.91%

5.		Waiver or reimbursement of indirect management fees less than 0.005%.

6.		Reduction to custodian expenses less than 0.005%.

7.		Voluntary waiver of transfer agent fees less than 0.005%.

See accompanying Notes to Financial Statements.

F15 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

FINANCIAL HIGHLIGHTS Continued


Class N Year Ended August 31,	2008			2007			2006			2005			2004

Per Share Operating Data

Net asset value, beginning of period	$	29.67		$	22.79		$	19.08		$	13.90		$	10.35
Income (loss) from investment operations:
Net investment loss		(.21	)¹		(.10	)¹		(.14	)¹		(.09	)¹		(.05	)
Net realized and unrealized gain (loss)		(6.62	)		7.54			6.03			5.67			3.64

Total from investment operations		(6.83	)		7.44			5.89			5.58			3.59
Dividends and/or distributions to shareholders:
Dividends from net investment income		(.89	)		(.08	)		—			(.09	)		(.04	)
Distributions from net realized gain		(4.51	)		(.48	)		(2.18	)		(.31	)		—
Tax return of capital distribution from net realized gain		(.10	)		—			—			—			—

Total dividends and/or distributions to shareholders		(5.50	)		(.56	)		(2.18	)		(.40	)		(.04	)

Net asset value, end of period	$	17.34		$	29.67		$	22.79		$	19.08		$	13.90


Total Return, at Net Asset Value²		(29.23	)%		32.99	%		33.06	%		40.76	%		34.70	%

Ratios/Supplemental Data

Net assets, end of period (in thousands)	$	43,687		$	81,367		$	51,761		$	16,673		$	4,101
Average net assets (in thousands)	$	72,854		$	66,982		$	38,262		$	9,698		$	2,531
Ratios to average net assets:³
Net investment loss		(0.85	)%		(0.36	)%		(0.63	)%		(0.51	)%		(0.50	)%
Total expenses		1.53	%⁴		1.52	%⁴		1.57	%		1.75	%		1.78	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.53	%		1.52	%		1.57	%		1.68	%		1.75	%
Portfolio turnover rate		67	%		57	%		35	%		51	%		124	%


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 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 less than one full year.

4.		Total expenses including indirect expenses from affiliated fund were as follows:

Year Ended August 31, 2008		1.53%
Year Ended August 31, 2007		1.52%

See accompanying Notes to Financial Statements.

F16 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND


Class Y Year Ended August 31,	2008			2007			2006¹

Per Share Operating Data

Net asset value, beginning of period	$	30.61		$	23.47		$	19.97
Income (loss) from investment operations:
Net investment income (loss)²		(.03	)		.11			.01
Net realized and unrealized gain (loss)		(6.82	)		7.76			5.67

Total from investment operations		(6.85	)		7.87			5.68
Dividends and/or distributions to shareholders:
Dividends from net investment income		(1.25	)		(.25	)		—
Distributions from net realized gain		(4.51	)		(.48	)		(2.18	)
Tax return of capital distribution from net realized gain		(.10	)		—			—

Total dividends and/or distributions to shareholders		(5.86	)		(.73	)		(2.18	)

Net asset value, end of period	$	17.90		$	30.61		$	23.47


Total Return, at Net Asset Value³		(28.72	)%		34.00	%		30.60	%

Ratios/Supplemental Data

Net assets, end of period (in thousands)	$	321,068		$	395,998		$	96,751
Average net assets (in thousands)	$	437,593		$	235,856		$	43,043
Ratios to average net assets:⁴
Net investment income (loss)		(0.13	)%		0.36	%		0.03	%
Total expenses		0.81	%^5,6,7		0.79	%^5,6,7		0.82	%⁷
Portfolio turnover rate		67	%		57	%		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 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 less than one full year.

5.		Total expenses including indirect expenses from affiliated fund were as follows:

Year Ended August 31, 2008		0.81%
Year Ended August 31, 2007		0.79%

6.		Waiver or reimbursement of indirect management fees less than 0.005%.

7.		Reduction to custodian expenses less than 0.005%.

See accompanying Notes to Financial Statements.

F17 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

NOTES TO FINANCIAL STATEMENTS

1. Significant Accounting Policies

Oppenheimer International Small Company Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund’s investment objective is to seek long-term capital appreciation. The Fund’s investment adviser 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 72 months 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 trading. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities traded on a registered U.S. securities exchange 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 whose principal exchange is NASDAQ^® are valued based on the closing price reported 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

F18 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

maturity in excess of sixty days and all mortgage-backed securities, collateralized mortgage obligations and other asset-backed securities will be valued at the mean between the “bid” and “asked” prices. Securities for which market quotations are not readily available are valued at their fair value. 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. Shares of a registered investment company that are not traded on an exchange are valued at the acquired investment company’s net asset value per share. “Money market-type” debt instruments with remaining maturities of sixty days or less are valued at cost adjusted by the amortization of discount or premium to maturity (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 Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading. Foreign exchange rates may be valued primarily using a reliable bank, dealer or service authorized by the Board of Trustees.

Reported net realized gains and losses from foreign currency transactions arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, exchange rate fluctuations 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 appreciation and depreciation on the translation of assets and liabilities denominated in foreign currencies 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”) to seek current income while preserving liquidity. 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 adviser 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 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.

F19 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

NOTES TO FINANCIAL STATEMENTS Continued

1. Significant Accounting Policies Continued

Investments With Off-Balance Sheet Market Risk. The Fund enters into financial instrument transactions (such as swaps, futures, options and other derivatives) that may have off-balance sheet market risk. Off-balance sheet market risk exists when the maximum potential loss on a particular financial instrument is greater than the value of such financial instrument, as reflected in the Fund’s Statement of Assets and Liabilities.

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. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund’s tax return filings generally remain open for the three preceding fiscal reporting period ends.

The tax components of capital shown in the following table represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes.

Net Unrealized

Depreciation

Based on Cost of

Securities and

Undistributed

Accumulated

Other Investments

Net Investment

Long-Term

Loss

for Federal Income

Income

Gain

Carryforward^1,2,3,4,5

Tax Purposes

$—

—

194,237,603

185,674,785


1.		As of August 31, 2008, the Fund had $179,160,878 of post-October losses available to offset future realized capital gains, if any. Such losses, if unutilized, will expire in 2017.

2.		The Fund had $1,042,769 of post-October foreign currency losses which were deferred.

3.		The Fund had $14,033,956 of post-October passive foreign investment company losses which were deferred.

4.		During the fiscal year ended August 31, 2008, the Fund did not utilize any capital loss carryforward.

5.		During the fiscal year ended August 31, 2007, the Fund did not utilize any capital loss carryforward.

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.

F20 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

Accordingly, the following amounts have been reclassified for August 31, 2008. Net assets of the Fund were unaffected by the reclassifications.


			Increase to
	Reduction to		Accumulated Net
Reduction to	Accumulated Net		Realized Loss
Paid-in Capital	Investment Loss		on Investments

$18,897,001	$	71,917,828	$	53,020,827

The tax character of distributions paid during the years ended August 31, 2008 and August 31, 2007 was as follows:


	Year Ended		Year Ended
	August 31, 2008		August 31, 2007

Distributions paid from:
Ordinary income	$	199,236,870	$	34,742,582
Long-term capital gain		337,187,402		14,029,404
Return of capital		8,945,396		—

Total	$	545,369,668	$	48,771,986

The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of August 31, 2008 are noted in the following table. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss.


Federal tax cost of securities	$	1,728,743,889
Federal tax cost of other investments		(8,558,615	)

Total federal tax cost	$	1,720,185,274


Gross unrealized appreciation	$	224,522,889
Gross unrealized depreciation		(410,197,674	)

Net unrealized depreciation	$	(185,674,785	)

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 year ended August 31, 2008, the Fund’s projected benefit obligations, payments to retired trustees and accumulated liability were as follows:

F21 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

NOTES TO FINANCIAL STATEMENTS Continued

1. Significant Accounting Policies Continued


Projected Benefit Obligations Increased	$	45,229
Payments Made to Retired Trustees		13,914
Accumulated Liability as of August 31, 2008		160,811

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 and may differ from U.S. generally accepted accounting principles, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as deemed necessary by the Manager.

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 is recognized on an accrual basis. Discount and premium, which are included in interest income on the Statement of Operations, are amortized or accreted daily.

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.

F22 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

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 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 accounting principles generally accepted in the United States of America 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

2. Shares of Beneficial Interest

The Fund has authorized an unlimited number of no par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:


		Year Ended August 31, 2008						Year Ended August 31, 2007
	Shares			Amount			Shares			Amount

Class A
Sold		8,064,251		$	213,833,167			24,448,070		$	712,881,011
Dividends and/or distributions reinvested		11,540,397			316,491,791			1,202,875			31,924,255
Redeemed		(30,492,625	)		(735,242,737	)¹		(19,189,583	)		(532,653,489	)²

Net increase (decrease)		(10,887,977	)	$	(204,917,779	)		6,461,362		$	212,151,777


Class B
Sold		323,167		$	8,403,941			938,207		$	25,977,009
Dividends and/or distributions reinvested		832,184			21,844,866			91,164			2,326,397
Redeemed		(1,938,637	)		(47,098,049	)¹		(1,705,475	)		(46,188,240	)²

Net decrease		(783,286	)	$	(16,849,242	)		(676,104	)	$	(17,884,834	)


Class C
Sold		1,085,351		$	28,329,591			3,658,885		$	104,218,413
Dividends and/or distributions reinvested		1,859,940			48,770,086			160,549			4,098,791
Redeemed		(4,957,486	)		(113,707,232	)¹		(2,543,208	)		(69,543,480	)²

Net increase (decrease)		(2,012,195	)	$	(36,607,555	)		1,276,226		$	38,773,724

F23 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

NOTES TO FINANCIAL STATEMENTS Continued

2. Shares of Beneficial Interest Continued


		Year Ended August 31, 2008						Year Ended August 31, 2007
	Shares			Amount			Shares			Amount

Class N
Sold		855,667		$	22,022,347			1,388,782		$	41,006,702
Dividends and/or distributions reinvested		560,798			14,917,623			44,605			1,154,389
Redeemed		(1,639,481	)		(37,789,188	)¹		(962,295	)		(26,383,025	)²

Net increase (decrease)		(223,016	)	$	(849,218	)		471,092		$	15,778,066


Class Y
Sold		6,986,567		$	189,958,416			9,458,020		$	281,159,481
Dividends and/or distributions reinvested		3,179,109			87,163,029			150,835			4,006,165
Redeemed		(5,169,413	)		(116,374,550	)¹		(793,289	)		(23,168,786	)²

Net increase		4,996,263		$	160,746,895			8,815,566		$	261,996,860


1.		Net of redemption fees of $43,114, $3,114, $7,909, $1,941 and $11,661 for Class A, Class B, Class C, Class N and Class Y, respectively.

2.		Net of redemption fees of $32,715, $3,632, $7,339, $883 and $13,866 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 investments in IMMF, for the year ended August 31, 2008, were as follows:


	Purchases		Sales

Investment securities	$	1,705,617,639	$	2,388,818,753

4. Fees and Other Transactions with Affiliates

Management Fees. Under the investment advisory agreement, the Fund pays the Manager a management fee based on the daily net assets of the Fund at an annual rate 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
Next $4 billion	0.67
Over $6 billion	0.65

Transfer Agent Fees. OppenheimerFunds Services (“OFS”), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended August 31, 2008, the Fund paid $3,085,906 to OFS for services to the Fund.

Additionally, Class Y shares are subject to minimum fees of $10,000 annually 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.

F24 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

Distribution and Service Plan (12b-1) Fees. Under its General Distributor’s Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the “Distributor”) acts as the Fund’s principal underwriter in the continuous public offering of the Fund’s classes of shares.

Service Plan for Class A Shares. The Fund has adopted a Service Plan (the “Plan”) for Class A shares under Rule 12b-1 of the Investment Company Act of 1940. Under the Plan, the Fund 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 service 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 (the “Plans”) for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 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’s aggregate uncompensated expenses under the Plans at June 30, 2008 for Class B, Class C and Class N shares were $9,089, $2,212,153 and $668,227, 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

Front-End

Deferred

Sales Charges

Retained by

Year Ended

Distributor

August 31, 2008

151,163

133,308

206,862

96,173

2,762

F25 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

NOTES TO FINANCIAL STATEMENTS Continued

4. Fees and Other Transactions with Affiliates Continued

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 year ended August 31, 2008, the Manager waived $42,276 for IMMF management fees.

5. Foreign Currency Exchange Contracts

The Fund may enter into foreign currency exchange contracts (“forward contracts”) for the purchase or sale of a foreign currency at a negotiated rate at a future date.

Forward contracts are reported on a schedule following the Statement of Investments. Forward contracts will be valued daily based upon the closing prices of the forward currency rates determined at the close of the Exchange as provided by a bank, dealer or pricing service. The resulting unrealized appreciation (depreciation) is reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations within the change in unrealized appreciation (depreciation). At contract close, the difference between the original cost of the contract and the value at the close date is recorded as a realized gain (loss) in the Statement of Operations.

Risks to the Fund include both market and credit risk. Market risk is the risk that the value of the forward contract will depreciate due to unfavorable changes in the exchange rates. Credit risk arises from the possibility that the counterparty will default. If the counterparty defaults, the Fund’s loss will consist of the net amount of contractual payments that the Fund has not yet received.

6. Illiquid Securities

As of August 31, 2008, investments in securities included issues that are illiquid. Investments may be illiquid because they do not have an active trading market, making it difficult to value them or dispose of them promptly at an acceptable price. 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 an applicable footnote on the Statement of Investments.

7. Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“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 August 31, 2008, the Manager does not believe the adoption of SFAS No. 157 will materially impact the financial

F26 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

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.

In March 2008, FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities. This standard requires enhanced disclosures about derivative and hedging activities, including qualitative disclosures about how and why the Fund uses derivative instruments, how these activities are accounted for, and their effect on the Fund’s financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. At this time, management is evaluating the implications of SFAS No. 161 and its impact on the Fund’s financial statements and related disclosures.

F27 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Trustees and Shareholders of Oppenheimer International Small Company Fund:

We have audited the accompanying statement of assets and liabilities of Oppenheimer International Small Company Fund, including the statement of investments, as of August 31, 2008, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 2008, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer International Small Company Fund as of August 31, 2008, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

KPMG llp

Denver, Colorado

October 15, 2008

F28 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

FEDERAL INCOME TAX INFORMATION Unaudited

In early 2008, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2007. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service.

Capital gain distributions of $3.7126 per share were paid to Class A, Class B, Class C, Class N and Class Y shareholders, respectively, on December 5, 2007. Whether received in stock or in cash, the capital gain distribution should be treated by shareholders as a gain from the sale of the capital assets held for more than one year (long-term capital gains).

None of the dividends paid by the Fund during the fiscal year ended August 31, 2008 are eligible for the corporate dividend-received deduction.

A portion, if any, of the dividends paid by the Fund during the fiscal year ended August 31, 2008 which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. $11,825,502 of the Fund’s fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2008, shareholders of record received information regarding the percentage of distributions that are eligible for lower individual income tax rates.

Recent tax legislation allows a regulated investment company to designate distributions not designated as capital gain distributions, as either interest related dividends or short-term capital gain dividends, both of which are exempt from the U.S. withholding tax applicable to non U.S. taxpayers. For the fiscal year ended August 31, 2008, $15,571 or 0.01% of the ordinary distributions paid by the Fund qualifies as an interest related dividend.

The Fund has elected the application of Section 853 of the Internal Revenue Code to permit shareholders to take a federal income tax credit or deduction, at their option, on a per share basis for an aggregate amount of $7,581,452 of foreign income taxes paid by the Fund during the fiscal year ended August 31, 2008. A separate notice will be mailed to each shareholder, which will reflect the proportionate share of such foreign taxes which must be treated by shareholders as gross income for federal income tax purposes.

Gross income of $17,482,614 was derived from sources within foreign countries or possessions of the United States.

The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance.

25 | 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, 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, (v) whether 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.

Outlined below is a summary of the principal information considered by the Board as well as the Board’s conclusions.

Nature, Quality 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.

26 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

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 advisory, administrative, accounting, legal and compliance services, and information the Board has received regarding the experience and professional qualifications of the Manager’s key 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 the portfolio manager for the Fund, and the Manager’s Global investment team and analysts. The Board members also considered the totality of their experiences with the Manager as directors or trustees 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. The Board concluded, in light of the Manager’s experience, reputation, personnel, operations and resources, that the Fund benefits from the services provided under the Agreement.

Investment Performance of the Manager and the Fund. Throughout the year, the Manager provided information on the investment performance of the Fund and the Manager, 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 other retail front-end load and no-load international small/mid-cap growth funds (including both funds advised by the Manager and funds advised by other investment advisers). The Board noted that the Fund’s one-year, three-year, five-year and ten-year performance were better than its peer group median.

Costs of Services by the Manager. The Board reviewed the fees paid to the Manager and the other expenses borne by the Fund. The Board also considered 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, 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.

27 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY AGREEMENT Unaudited / Continued

Economies of Scale and Profits Realized by 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 reviewed whether the Manager may realize economies of scale in managing and supporting the Fund. The Board noted that the Fund currently has management fee breakpoints, which are intended to share with Fund shareholders economies of scale that may exist as the Fund’s assets grow.

Other Benefits to the Manager. In addition to considering the profits realized by the Manager, the Board considered information that was provided regarding the direct and indirect benefits the Manager receives as a result of its relationship with the Fund, including compensation paid to the Manager’s affiliates and research provided to the Manager in connection with permissible brokerage arrangements (soft dollar arrangements). The Board also considered that the Manager must be able to pay and retain experienced professional personnel at competitive rates to provide quality 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.

Conclusions. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and to the independent Trustees. Fund counsel and the independent Trustees’ counsel are 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, decided 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 above information, and considered the terms and conditions of the Agreement, including the management fee, in light of all of the surrounding circumstances.

28 | 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.

29 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

TRUSTEES AND OFFICERS Unaudited


Name, Position(s) Held with the Fund, Length of Service, Age		Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held; Number of Portfolios in the Fund Complex Currently Overseen

INDEPENDENT TRUSTEES		The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Trustee serves for an indefinite term, or until his or her resignation, retirement, death or removal.

Brian F. Wruble, Chairman of the Board of Trustees (since 2007), Trustee (since 2005) Age: 65		General Partner of Odyssey Partners, L.P. (hedge fund) (September 1995-December 2007); Director of Special Value Opportunities Fund, LLC (registered investment company) (affiliate of the Manager’s parent company) (since September 2004); Chairman (since August 2007) and Trustee (since August 1991) of the Board of Trustees of The Jackson Laboratory (non-profit); Treasurer and Trustee of the Institute for Advanced Study (non-profit educational institute) (since May 1992); Member of Zurich Financial Investment Management Advisory Council (insurance) (2004-2007); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004). Oversees 64 portfolios in the OppenheimerFunds complex.

David K. Downes, Trustee (since 2007) Age: 68		Independent Chairman GSK Employee Benefit Trust (since April 2006); Director of Correctnet (since January 2006); Trustee of Employee Trusts (since January 2006); President, Chief Executive Officer and Board Member of CRAFund Advisors, Inc. (investment management company) (since January 2004); Director of Internet Capital Group (information technology company) (since October 2003); Independent Chairman of the Board of Trustees of Quaker Investment Trust (registered investment company) (2004-2007); President of The Community Reinvestment Act Qualified Investment Fund (investment management company) (2004-2007); Chief Operating Officer and Chief Financial Officer of Lincoln National Investment Companies, Inc. (subsidiary of Lincoln National Corporation, a publicly traded company) and Delaware Investments U.S., Inc. (investment management subsidiary of Lincoln National Corporation) (1993- 2003); President, Chief Executive Officer and Trustee of Delaware Investment Family of Funds (1993-2003); President and Board Member of Lincoln National Convertible Securities Funds, Inc. and the Lincoln National Income Funds, TDC (1993-2003); Chairman and Chief Executive Officer of Retirement Financial Services, Inc. (registered transfer agent and investment adviser and subsidiary of Delaware Investments U.S., Inc.) (1993-2003); President and Chief Executive Officer of Delaware Service Company, Inc. (1995-2003); Chief Administrative Officer, Chief Financial Officer, Vice Chairman and Director of Equitable Capital Management Corporation (investment subsidiary of Equitable Life Assurance Society) (1985-1992); Corporate Controller of Merrill Lynch & Company (financial services holding company) (1977-1985); held the following positions at the Colonial Penn Group, Inc. (insurance company): Corporate Budget Director (1974-1977), Assistant Treasurer (1972-1974) and Director of Corporate Taxes (1969-1972); held the following positions at Price Waterhouse & Company (financial services firm): Tax Manager (1967-1969), Tax Senior (1965-1967) and Staff Accountant (1963-1965); United States Marine Corps (1957-1959). Oversees 64 portfolios in the OppenheimerFunds complex.

Matthew P. Fink, Trustee (since 2005) Age: 67		Trustee of the Committee for Economic Development (policy research foundation) (since 2005); Director of ICI Education Foundation (education foundation) (October 1991-August 2006); President of the Investment Company Institute (trade association) (October 1991-June 2004); Director of ICI Mutual Insurance Company (insurance company) (October 1991-June 2004). Oversees 54 portfolios in the OppenheimerFunds complex.

30 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND


Name, Position(s) Held with the Fund, Length of Service, Age		Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held; Number of Portfolios in the Fund Complex Currently Overseen

Robert G. Galli, Trustee (since 1997) Age: 75		A director or trustee of other Oppenheimer funds. Oversees 64 portfolios in the OppenheimerFunds complex.

Phillip A. Griffiths, Trustee (since 1999) Age: 70		Fellow of the Carnegie Corporation (since 2007); Distinguished Presidential Fellow for International Affairs (since 2002) and Member (since 1979) of the National Academy of Sciences; Council on Foreign Relations (since 2002); Director of GSI Lumonics Inc. (precision technology products company) (since 2001); Senior Advisor of The Andrew W. Mellon Foundation (since 2001); Chair of Science Initiative Group (since 1999); Member of the American Philosophical Society (since 1996); Trustee of Woodward Academy (since 1983); Foreign Associate of Third World Academy of Sciences; Director of the Institute for Advanced Study (1991-2004); Director of Bankers Trust New York Corporation (1994-1999); Provost at Duke University (1983-1991). Oversees 54 portfolios in the OppenheimerFunds complex.

Mary F. Miller, Trustee (since 2004) Age: 65		Trustee of International House (not-for-profit) (since June 2007); Trustee of the American Symphony Orchestra (not-for-profit) (since October 1998); and Senior Vice President and General Auditor of American Express Company (financial services company) (July 1998-February 2003). Oversees 54 portfolios in the OppenheimerFunds complex.

Joel W. Motley, Trustee (since 2002) Age: 56		Managing Director of Public Capital Advisors, LLC (privately held financial advisor) (since January 2006); Managing Director of Carmona Motley, Inc. (privately-held financial advisor) (since January 2002); Director of Columbia Equity Financial Corp. (privately-held financial advisor) (2002-2007); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial advisor) (January 1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign Relations, Member of the Investment Committee of the Episcopal Church of America, Member of the Investment Committee and Board of Human Rights Watch and Member of the Investment Committee of Historic Hudson Valley. Oversees 54 portfolios in the OppenheimerFunds complex.

Russell S. Reynolds, Jr., Trustee (since 1997) Age: 76		Chairman of RSR Partners (formerly “The Directorship Search Group, Inc.”) (corporate governance consulting and executive recruiting) (since 1993); Retired CEO of Russell Reynolds Associates (executive recruiting) (October 1969-March 1993); Life Trustee of International House (non-profit educational organization); Former Trustee of The Historical Society of the Town of Greenwich; Former Director of Greenwich Hospital Association. Oversees 54 portfolios in the OppenheimerFunds complex.

Joseph M. Wikler, Trustee (since 2005) Age: 67		Director of C-TASC (bio-statistics services) (since 2007); Director of the following medical device companies: Medintec (since 1992) and Cathco (since 1996); Director of Lakes Environmental Association (environmental protection organization) (since 1996); Member of the Investment Committee of the Associated Jewish Charities of Baltimore (since 1994); Director of Fortis/Hartford mutual funds (1994-December 2001). Oversees 54 portfolios in the OppenheimerFunds complex.

Peter I. Wold, Trustee (since 2005) Age: 60		President of Wold Oil Properties, Inc. (oil and gas exploration and production company) (since 1994); Vice President of American Talc Company, Inc. (talc mining and milling) (since 1999); Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Vice President, Secretary and Treasurer of Wold Trona Company, Inc. (soda ash processing and production) (1996-2006); Director and Chairman of the Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and Director of PacifiCorp. (electric utility) (1995-1999). Oversees 54 portfolios in the OppenheimerFunds complex.

31 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

TRUSTEES AND OFFICERS Unaudited / Continued


Name, Position(s) Held with the Fund, Length of Service, Age		Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held; Number of Portfolios in the Fund Complex Currently Overseen

INTERESTED TRUSTEE AND OFFICER		The address of Mr. Murphy is Two World Financial Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008. Mr. Murphy serves as a Trustee for an indefinite term, or until his resignation, retirement, death or removal and as an Officer for an indefinite term, or until his resignation, retirement, death or removal. Mr. Murphy is an interested Trustee due to his positions with OppenheimerFunds, Inc. and its affiliates.

John V. Murphy, Trustee, President and Principal Executive Officer (since 2001) Age: 59		Chairman, Chief Executive Officer and Director of the Manager (since June 2001); President of the Manager (September 2000-February 2007); President and director or trustee of other Oppenheimer funds; President and Director of Oppenheimer Acquisition Corp. (“OAC”) (the Manager’s parent holding company) and of Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager) (November 2001-December 2006); Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July 2001); Director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 2001) and Director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC’s parent company) (since February 1997); Director of DLB Acquisition Corporation (holding company parent of Babson Capital Management LLC) (since June 1995); Chairman (since October 2007) and Member of the Investment Company Institute’s Board of Governors (since October 2003). Oversees 103 portfolios in the OppenheimerFunds complex.

OTHER OFFICERS OF THE FUND		The addresses of the Officers in the chart below are as follows: for Messrs. Sah, Zack and Ms. Bloomberg, Two World Financial Center, 225 Liberty Street, New York, New York 10281-1008, for Messrs. Vandehey, Wixted, Petersen, Szilagyi and Ms. Ives, 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Officer serves for an indefinite term or until his or her resignation, retirement, death or removal.

Rohit Sah, Vice President (since 2004) Age: 43		Vice President of the Manager (since January 2004); formerly Assistant Vice President and Assistant Portfolio Manager of the Manager (December 2000-December 2003). An international equities and fixed-income analyst of the Manager (June 1996-December 2000). An officer of 1 portfolio in the OppenheimerFunds complex.

Mark S. Vandehey, Vice President and Chief Compliance Officer (since 2004) Age: 58		Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Chief Compliance Officer of OppenheimerFunds Distributor, Inc., Centennial Asset Management and Shareholder Services, Inc. (since March 2004); Vice President of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and Shareholder Services, Inc. (since June 1983); Former Vice President and Director of Internal Audit of the Manager (1997-February 2004). An officer of 103 portfolios in the OppenheimerFunds complex.

Brian W. Wixted, Treasurer and Principal Financial & Accounting Officer (since 1999) Age: 49		Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the following: HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management, Inc. and Oppenheimer Partnership Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000),

32 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND


Name, Position(s) Held with the Fund, Length of Service, Age		Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held; Number of Portfolios in the Fund Complex Currently Overseen

Brian W. Wixted, Continued		OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March 1999), Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003). An officer of 103 portfolios in the OppenheimerFunds complex.

Brian S. Petersen, Assistant Treasurer (since 2004) Age: 38		Vice President of the Manager (since February 2007); Assistant Vice President of the Manager (August 2002-February 2007); Manager/Financial Product Accounting of the Manager (November 1998-July 2002). An officer of 103 portfolios in the OppenheimerFunds complex.

Brian C. Szilagyi, Assistant Treasurer (since 2005) Age: 38		Assistant Vice President of the Manager (since July 2004); Director of Financial Reporting and Compliance of First Data Corporation (April 2003-July 2004); Manager of Compliance of Berger Financial Group LLC (May 2001-March 2003). An officer of 103 portfolios in the OppenheimerFunds complex.

Robert G. Zack, Vice President and Secretary (since 2001) Age: 60		Executive Vice President (since January 2004) and General Counsel (since March 2002) of the Manager; General Counsel and Director of the Distributor (since December 2001); General Counsel of Centennial Asset Management Corporation (since December 2001); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November 2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); Senior Vice President (May 1985-December 2003). An officer of 103 portfolios in the OppenheimerFunds complex.

Lisa I. Bloomberg, Assistant Secretary (since 2004) Age: 40		Vice President (since May 2004) and Deputy General Counsel (since May 2008); of the Manager; Associate Counsel of the Manager (May 2004-May 2008); First Vice President (April 2001-April 2004), Associate General Counsel (December 2000-April 2004) of UBS Financial Services Inc. (formerly, PaineWebber Incorporated). An officer of 103 portfolios in the OppenheimerFunds complex.

Kathleen T. Ives, Assistant Secretary (since 2001) Age: 43		Vice President (since June 1998), Deputy General Counsel (since May 2008) and Assistant Secretary (since October 2003) of the Manager; Vice President (since 1999) and Assistant Secretary (since October 2003) of the Distributor; Assistant Secretary of Centennial Asset Management Corporation (since October 2003); Vice President and Assistant Secretary of Shareholder Services, Inc. (since 1999); Assistant Secretary of OppenheimerFunds Legacy Program and Shareholder Financial Services, Inc. (since December 2001); Senior Counsel of the Manager (October 2003-May 2008). An officer of 103 portfolios in the OppenheimerFunds complex.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and Officers and is available without charge upon request by calling 1.800.525.7048.

33 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND

Item 4. Principal Accountant Fees and Services.

(a)

Audit Fees

The principal accountant for the audit of the registrant’s annual financial statements billed $30,500 in fiscal 2008 and $24,000 in fiscal 2007.

(b)

Audit-Related Fees

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees during the last two fiscal years.

The principal accountant for the audit of the registrant’s annual financial statements billed $250,000 in fiscal 2008 and $243,390 in fiscal 2007 to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.

Such services include: internal control reviews, professional services relating to FAS 123R and audit of capital accumulation plan.

(c)

Tax Fees

The principal accountant for the audit of the registrant’s annual financial statements billed $39,838 in fiscal 2008 and no such fees in fiscal 2007 to the registrant.

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees in fiscal 2008 and $1,536 in fiscal 2007 to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.

Such services include: Venezuelan and Indian tax filings and preparation of form 5500.

(d)

All Other Fees

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees during the last two fiscal years.

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees during the last two fiscal years to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.

(e)

(1) During its regularly scheduled periodic meetings, the registrant’s audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant.

		The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting.

		Under applicable laws, pre-approval of non-audit services maybe waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit.

(2) 100%

(f)		Not applicable as less than 50%.

(g)		The principal accountant for the audit of the registrant’s annual financial statements billed $289,838 in fiscal 2008 and $244,926 in fiscal 2007 to the registrant and the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934.

		The registrant’s audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. No such services were rendered

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Schedule of Investments.

	a)		Not applicable.

	b)		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:

	•		the name, address, and business, educational, and/or other pertinent background of the person being recommended;

	•		a statement concerning whether the person is an “interested person” as defined in the Investment Company Act of 1940;

	•		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

	•		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 08/31/2008, 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.


Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:
Investments (net of foreign capital gains tax of $7,112,126):
Unaffiliated companies	$	103,969,001
Affiliated companies		(207,304,452	)
Foreign currency transactions		124,978,903

Net realized gain		21,643,452
Net change in unrealized depreciation on:
Investments		(638,475,951	)
Translation of assets and liabilities denominated in foreign currencies		(83,898,520	)

Net change in unrealized depreciation		(722,374,471	)

Net Decrease in Net Assets Resulting from Operations	$	(714,584,479	)


Geographic Holdings	Value		Percent

Canada	$	683,191,197		44.3	%
Australia		224,310,680		14.6
United States		151,563,000		9.8
Norway		128,547,440		8.3
Cayman Islands		83,092,770		5.4
Japan		61,366,810		4.0
United Kingdom		52,631,030		3.4
China		36,516,926		2.4
Germany		30,433,953		2.0
Singapore		26,772,520		1.7
Russia		19,000,000		1.2
Bermuda		17,810,009		1.2
Sweden		12,676,144		0.8
India		8,860,488		0.6
Brazil		2,634,621		0.2
Korea, Republic of South		1,554,147		0.1
Hong Kong		689,481		0.0

Total	$	1,541,651,216		100.0	%


(a)		(1) Exhibit attached hereto.

		(2) Exhibits attached hereto.

		(3) Not applicable.

(b)		Exhibit attached hereto.


Oppenheimer International Small Company Fund

By:		/s/ John V. Murphy

		John V. Murphy
		Principal Executive Officer

Date:		10/13/2008