UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-09097
OPPENHEIMER EUROPE FUND
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
498 Seventh Avenue, New York, New York 10018
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: August 31
Date of reporting period: September 1, 2002 - August 31, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
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, 2003, followed by
a graphical comparison of the Fund's performance to an appropriate broad-based
market index.
Management's Discussion of Fund Performance. Over the 12-month period ended
August 31, 2003, the Fund delivered slightly stronger gains, 11.23% return for
Class A shares without sales charge, than its benchmark, the MSCI All Country
Europe Index, 9.60%, during a period in which European equities rose in dollar
terms. Relative performance benefited from the Fund's restructuring under the
guidance of new management beginning in April 2003. At that time, we refocused
the Fund to emphasize companies generating above-average profitability, while
trading at attractive valuations. We found relatively few such opportunities in
the areas of technology and biotechnology. Instead, we allocated a greater
percentage of the Fund's assets to consumer discretionary stocks, as well as
financials and industrials. From a thematic perspective, we continued to invest
in companies we believed were well positioned to benefit from trends toward
effective financial restructuring and rising levels of mass affluence. However,
our value-oriented investment approach generally led us away from stocks
reflecting the themes of new technology and aging that had previously helped
guide the Fund's investment approach.
Before the Fund's restructuring, European stocks generally trended lower
under pressure from economic and geopolitical uncertainties. The Fund delivered
weaker-than-average performance during these months, largely due to its
overweighted position in biotechnology stocks at a time when biotechnology
markets declined especially steeply.
European markets began to rise in mid-March 2003, and were driven still
higher in the wake of successful U.S. and UK military operations in Iraq. When
current management took the Fund's helm at the start of April, we identified and
invested in a large number of opportunities in various European markets that we
believed offered strong growth potential while trading at remarkably low prices.
Gains in these stocks during the final months of the period enabled the Fund to
more than make up for its relatively weak performance earlier.
Most of the Fund's top performing holdings were purchased during its
restructuring. These included Muenchener Rueckversicherungs-Gesellschaft AG, a
major German-based reinsurer; New Dixons Group plc, a British consumer
electronics retailing chain; Fresenius AG, an international provider of kidney
dialysis products and services; Anglo Irish Bank Corp., a successful European
bank; Koninklijke Ahold NV, a global food retailer; Invensys plc (which has been
sold), a British engineering company; Nexans SA, a leading copper wire producer;
Mothercare plc, a British producer of baby products; and Parmalat Finanziaria
SpA, the world's leading milk company. We purchased many of these stocks
1 | OPPENHEIMER EUROPE FUND
FUND PERFORMANCE DISCUSSION
- --------------------------------------------------------------------------------
at multi-year lows or discounts to average market valuations; all gained ground
sharply in the months that followed.
Some of the Fund's weakest performers included biotechnology firm NicOx SA
and Shire Pharmaceuticals Group plc, both of which were sold. Others, including
German insurer MLP AG, Van der Moolen Holding NV and Tandberg ASA, remained part
of the portfolio, recovering some of their losses in the final months of the
period. The Fund's portfolio holdings, allocations and strategies are subject to
change.
Comparing the Fund's Performance to the Market. The graphs that follow
show the performance of a hypothetical $10,000 investment in Class A, Class B,
Class C and Class Y shares of the Fund from the inception date of March 1, 1999
until August 31, 2003. In the case of Class N shares, performance is measured
from inception of the Class on March 1, 2001. The Fund's performance reflects
the deduction of the maximum initial sales charge on Class A shares and the
applicable contingent deferred sales charge for Class B, Class C and Class N
shares, and reinvestment of all dividends and capital gains distributions.
The Fund's performance is compared to the performance of the Morgan Stanley
Capital International All Country Europe (MSCI AC Europe) Index. The MSCI AC
Europe Index is an unmanaged index of European stocks representing 21 developed
and emerging European countries. Index performance reflects the reinvestment of
dividends but does not consider the effect of capital gains or transaction
costs, and none of the data in the graph shows the effect of taxes. The Fund's
performance reflects the effects of Fund 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
securities in any one index.
2 | OPPENHEIMER EUROPE FUND
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Europe Fund (Class A)
MSCI All Country Europe Index
[LINE CHART]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:
Value of Investment MSCI All Country
Date In Fund Europe Index
- ---- ------- ------------
03/01/1999 9,425 10,000
05/31/1999 9,368 9,951
08/31/1999 10,160 10,339
11/30/1999 10,716 10,934
02/29/2000 12,642 11,820
05/31/2000 10,581 11,475
08/31/2000 11,175 11,367
11/30/2000 8,332 10,291
02/28/2001 8,094 10,047
05/31/2001 7,490 9,509
08/31/2001 6,806 8,930
11/30/2001 6,430 8,640
02/28/2002 6,172 8,408
05/31/2002 6,410 8,801
08/31/2002 5,380 7,554
11/30/2002 5,390 7,560
02/28/2003 4,349 6,725
05/31/2003 5,310 8,034
08/31/2003 5,984 8,279
Average Annual Total Returns of Class A Shares of the Fund at 8/31/03*
1-Year 4.84% Since Inception -10.78%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Europe Fund (Class B)
MSCI All Country Europe Index
[LINE CHART]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:
Value of Investment MSCI All Country
Date In Fund Europe Index
- ---- ------- ------------
03/01/1999 10,000 10,000
05/31/1999 9,910 9,951
08/31/1999 10,730 10,339
11/30/1999 11,290 10,934
02/29/2000 13,291 11,820
05/31/2000 11,107 11,475
08/31/2000 11,706 11,367
11/30/2000 8,714 10,291
02/28/2001 8,451 10,047
05/31/2001 7,800 9,509
08/31/2001 7,076 8,930
11/30/2001 6,677 8,640
02/28/2002 6,393 8,408
05/31/2002 6,624 8,801
08/31/2002 5,543 7,554
11/30/2002 5,554 7,560
02/28/2003 4,472 6,725
05/31/2003 5,449 8,034
08/31/2003 6,004 8,279
Average Annual Total Returns of Class B Shares of the Fund at 8/31/03*
1-Year 5.42% Since Inception -10.72%
*See Notes on page 6 for further details.
The performance information for the MSCI All Country Europe Index in the graphs
begins on 2/28/99 for Class A, B, C and Y and 2/28/01 for Class N.
Past performance cannot guarantee future results. Graphs are not drawn to same
scale.
3 | OPPENHEIMER EUROPE FUND
FUND PERFORMANCE DISCUSSION
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Europe Fund (Class C)
MSCI All Country Europe Index
[LINE CHART]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:
Value of Investment MSCI All Country
Date In Fund Europe Index
- ---- ------- ------------
03/01/1999 10,000 10,000
05/31/1999 9,940 9,951
08/31/1999 10,760 10,339
11/30/1999 11,320 10,934
02/29/2000 13,342 11,820
05/31/2000 11,148 11,475
08/31/2000 11,757 11,367
11/30/2000 8,744 10,291
02/28/2001 8,471 10,047
05/31/2001 7,831 9,509
08/31/2001 7,096 8,930
11/30/2001 6,687 8,640
02/28/2002 6,414 8,408
05/31/2002 6,645 8,801
08/31/2002 5,563 7,554
11/30/2002 5,574 7,560
02/28/2003 4,493 6,725
05/31/2003 5,469 8,034
08/31/2003 6,151 8,279
Average Annual Total Returns of Class C Shares of the Fund at 8/31/03*
1-Year 9.57% Since Inception -10.24%
Class N Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Europe Fund (Class N)
MSCI All Country Europe Index
[LINE CHART]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:
Value of Investment MSCI All Country
Date In Fund Europe Index
- ---- ------- ------------
03/01/2001 10,000 10,000
05/31/2001 9,196 9,465
08/31/2001 8,343 8,889
11/30/2001 7,868 8,600
02/28/2002 7,552 8,369
05/31/2002 7,832 8,761
08/31/2002 6,565 7,519
11/30/2002 6,577 7,525
02/28/2003 5,298 6,693
05/31/2003 6,468 7,997
08/31/2003 7,284 8,241
Average Annual Total Returns of Class N Shares of the Fund at 8/31/03*
1-Year 9.95% Since Inception -11.91%
*See Notes on page 6 for further details.
4 | OPPENHEIMER EUROPE FUND
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Europe Fund (Class Y)
MSCI All Country Europe Index
[LINE CHART]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC AS FOLLOWS:
Value of Investment MSCI All Country
Date In Fund Europe Index
- ---- ------- ------------
03/01/1999 10,000 10,000
05/31/1999 9,940 9,951
08/31/1999 10,780 10,339
11/30/1999 11,380 10,934
02/29/2000 13,427 11,820
05/31/2000 11,251 11,475
08/31/2000 11,903 11,367
11/30/2000 8,885 10,291
02/28/2001 8,643 10,047
05/31/2001 8,012 9,509
08/31/2001 7,297 8,930
11/30/2001 6,898 8,640
02/28/2002 6,635 8,408
05/31/2002 6,898 8,801
08/31/2002 5,804 7,554
11/30/2002 5,836 7,560
02/28/2003 4,711 6,725
05/31/2003 5,752 8,034
08/31/2003 6,498 8,279
Average Annual Total Returns of Class Y Shares of the Fund at 8/31/03*
1-Year 11.96% Since Inception -9.14%
The performance information for the MSCI All Country Europe Index in the graphs
begins on 2/28/99 for Class A, B, C and Y and 2/28/01 for Class N.
Past performance cannot guarantee future results. Graphs are not drawn to same
scale.
5 | OPPENHEIMER EUROPE FUND
NOTES
- --------------------------------------------------------------------------------
In reviewing performance and rankings, please remember that past performance
cannot guarantee future results. 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 the original cost. Because of ongoing
market volatility, the Fund's performance may be subject to substantial
fluctuations, and current performance may be more or less than the results
shown. For updates on the Fund's performance, visit our website at
www.oppenheimerfunds.com.
Total returns and the ending account values in the graph includes 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. For more complete information
about the Fund, including charges, expenses and risks, please refer to the
prospectus. To obtain a copy, call your financial advisor, call OppenheimerFunds
Distributor, Inc. at 1.800.CALL OPP (1.800.225.5677). Read the pro-spectus
carefully before you invest or send money.
Class A shares of the Fund were first publicly offered on 3/1/99. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
Class B shares of the Fund were first publicly offered on 3/1/99. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 2% (since inception). 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 3/1/99. Class C
returns include the contingent deferred sales charge of 1% for the one-year
period. Class C shares are subject to a 0.75% annual asset-based sales charge.
Class N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
Class Y shares of the Fund were first publicly offered on 3/1/99. Class Y shares
are offered only to certain institutional investors under special agreements
with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
6 | OPPENHEIMER EUROPE FUND
STATEMENT OF INVESTMENTS August 31, 2003
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Common Stocks--86.9%
- --------------------------------------------------------------------------------
Consumer Discretionary--25.5%
- --------------------------------------------------------------------------------
Automobiles--2.7%
Porsche AG, Preferred 134 $ 57,082
- --------------------------------------------------------------------------------
PSA Peugeot Citroen 2,850 130,073
- --------------------------------------------------------------------------------
Toyota Motor Corp. 6,400 176,620
----------
363,775
- --------------------------------------------------------------------------------
Hotels, Restaurants & Leisure--2.9%
Greek Organization of
Football Prognostics SA 15,400 183,279
- --------------------------------------------------------------------------------
Intralot SA 12,000 210,006
----------
393,285
- --------------------------------------------------------------------------------
Household Durables--7.6%
Barratt
Developments plc 25,721 211,151
- --------------------------------------------------------------------------------
CFM Corp. 1 20,000 144,036
- --------------------------------------------------------------------------------
Hunter Douglas NV 4,809 160,189
- --------------------------------------------------------------------------------
Koninklijke (Royal)
Philips Electronics NV 10,000 243,734
- --------------------------------------------------------------------------------
Matsushita Electric
Industrial Co. 12,000 153,034
- --------------------------------------------------------------------------------
Waterford
Wedgwood plc 389,167 132,453
----------
1,044,597
- --------------------------------------------------------------------------------
Leisure Equipment & Products--1.1%
Agfa Gevaert NV 6,500 145,582
- --------------------------------------------------------------------------------
Media--5.2%
JC Decaux SA 1 10,230 136,126
- --------------------------------------------------------------------------------
Lagardere S.C.A 2,480 112,669
- --------------------------------------------------------------------------------
Reed Elsevier plc 19,308 148,121
- --------------------------------------------------------------------------------
Vivendi Universal SA 1 12,590 211,623
- --------------------------------------------------------------------------------
Wolters Kluwer NV 7,000 108,901
----------
717,440
- --------------------------------------------------------------------------------
Multiline Retail--1.8%
Mothercare plc 1 20,970 63,808
- --------------------------------------------------------------------------------
Stockmann AB, Cl. B 10,400 181,206
----------
245,014
- --------------------------------------------------------------------------------
Specialty Retail--2.1%
New Dixons Group plc 134,650 293,384
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Textiles, Apparel & Luxury Goods--2.1%
Hugo Boss AG 8,087 $ 144,368
- --------------------------------------------------------------------------------
Tod's SpA 3,700 139,334
----------
283,702
- --------------------------------------------------------------------------------
Consumer Staples--8.0%
- --------------------------------------------------------------------------------
Beverages--2.0%
Diageo plc 8,720 93,516
- --------------------------------------------------------------------------------
Scottish & Newcastle plc 30,000 178,421
----------
271,937
- --------------------------------------------------------------------------------
Food & Staples Retailing--1.1%
Koninklijke Ahold NV 1 15,300 144,462
- --------------------------------------------------------------------------------
Food Products--4.4%
Cadbury Schweppes plc 30,000 181,269
- --------------------------------------------------------------------------------
Nestle SA 1,014 220,820
- --------------------------------------------------------------------------------
Parmalat Finanziaria SpA 63,658 205,826
----------
607,915
- --------------------------------------------------------------------------------
Household Products--0.5%
Reckitt Benckiser plc 3,400 63,998
- --------------------------------------------------------------------------------
Energy--3.1%
- --------------------------------------------------------------------------------
Oil & Gas--3.1%
ENI SpA 27,600 416,956
- --------------------------------------------------------------------------------
Financials--20.2%
- --------------------------------------------------------------------------------
Commercial Banks--6.9%
Anglo Irish Bank Corp. 45,243 447,543
- --------------------------------------------------------------------------------
Credit Agricole SA 12,312 233,850
- --------------------------------------------------------------------------------
Lloyds TSB Group plc 30,514 200,302
- --------------------------------------------------------------------------------
Societe Generale, Cl. A 1,040 68,966
----------
950,661
- --------------------------------------------------------------------------------
Diversified Financial Services--4.9%
Ifil SpA (Finanziaria di
Partecipazioni) 1 66,000 167,024
- --------------------------------------------------------------------------------
Investor AB, B Shares 25,702 210,566
- --------------------------------------------------------------------------------
MLP AG 1 8,394 117,132
- --------------------------------------------------------------------------------
Van der Moolen
Holding NV 13,100 174,172
----------
668,894
- --------------------------------------------------------------------------------
Insurance--6.9%
Aegon NV 11,000 136,227
- --------------------------------------------------------------------------------
Aviva plc 22,036 174,796
- --------------------------------------------------------------------------------
Converium Holding AG 5,184 233,374
7 | OPPENHEIMER EUROPE FUND
STATEMENT OF INVESTMENTS Continued
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------
Insurance Continued
Muenchener
Rueckversicherungs-
Gesellschaft AG 1,400 $ 143,254
- -------------------------------------------------------------------------------
Royal & Sun Alliance
Insurance Group plc 48,230 105,659
Scor SA 1 28,200 148,612
------------
941,922
- -------------------------------------------------------------------------------
Real Estate--1.5%
JM AB 17,000 201,287
- -------------------------------------------------------------------------------
Health Care--6.6%
- -------------------------------------------------------------------------------
Health Care Providers & Services--1.4%
Fresenius AG, Preference 3,862 192,712
- -------------------------------------------------------------------------------
Pharmaceuticals--5.2%
Aventis SA 2,200 106,856
- -------------------------------------------------------------------------------
GlaxoSmithKline plc 10,878 207,680
- -------------------------------------------------------------------------------
Novartis AG 5,581 205,221
- -------------------------------------------------------------------------------
Sanofi-Synthelabo SA 2,731 153,516
- -------------------------------------------------------------------------------
UCB SA 1,400 37,212
------------
710,485
- -------------------------------------------------------------------------------
Industrials--7.7%
- -------------------------------------------------------------------------------
Building Products--0.7%
Royal Group
Technologies Ltd. 1 11,200 94,871
- -------------------------------------------------------------------------------
Construction & Engineering--3.7%
Hochtief AG 3,300 62,317
- -------------------------------------------------------------------------------
Koninklijke Boskalis
Westminster NV 5,202 119,366
- -------------------------------------------------------------------------------
Vinci 4,990 323,780
------------
505,463
- -------------------------------------------------------------------------------
Electrical Equipment--2.3%
Nexans SA 3,460 72,708
- -------------------------------------------------------------------------------
SGL Carbon AG 1 12,000 234,511
------------
307,219
- -------------------------------------------------------------------------------
Industrial Conglomerates--1.0%
Aalberts Industries NV 6,653 142,434
- -------------------------------------------------------------------------------
Information Technology--6.8%
- -------------------------------------------------------------------------------
Communications Equipment--2.3%
Nokia Oyj 12,000 196,568
- -------------------------------------------------------------------------------
Wavecom SA 1 9,652 117,308
------------
313,876
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------
Computers & Peripherals--0.6%
Logitech
International SA 1 2,472 $ 79,426
- -------------------------------------------------------------------------------
Electronic Equipment & Instruments--1.9%
Tandberg ASA 1 40,350 264,832
- -------------------------------------------------------------------------------
Office Electronics--0.9%
Neopost SA 3,030 128,375
- -------------------------------------------------------------------------------
Semiconductors & Semiconductor Equipment--1.1%
Jenoptik AG 12,480 146,609
- -------------------------------------------------------------------------------
Materials--2.6%
- -------------------------------------------------------------------------------
Chemicals--2.6%
Akzo Nobel NV 6,300 206,535
- -------------------------------------------------------------------------------
Givaudan SA 69 28,574
- -------------------------------------------------------------------------------
Metallgesellschaft AG 12,056 121,112
------------
356,221
- -------------------------------------------------------------------------------
Telecommunication Services--4.5%
- -------------------------------------------------------------------------------
Diversified Telecommunication Services--3.1%
Cable & Wireless plc 67,240 126,565
- -------------------------------------------------------------------------------
Koninklijke (Royal)
KPN NV 1 20,000 138,555
- -------------------------------------------------------------------------------
Telecom Italia SpA 1 100,016 157,903
------------
423,023
- -------------------------------------------------------------------------------
Wireless Telecommunication Services--1.4%
Orange SA 1 21,000 194,822
- -------------------------------------------------------------------------------
Utilities--1.9%
- -------------------------------------------------------------------------------
Electric Utilities--1.9%
Electrabel SA 1,000 250,760
------------
Total Common Stocks
(Cost $10,593,297) 11,865,939
- -------------------------------------------------------------------------------
Preferred Stocks--1.3%
- -------------------------------------------------------------------------------
Altran Technologies SA,
3.50% Cv. Sr. Unsub. Nts. 1
(Cost $104,541) 700 180,220
Units
- -------------------------------------------------------------------------------
Rights, Warrants and Certificates--0.0%
- -------------------------------------------------------------------------------
Banca Bipielle Network
SpA Wts., Exp
12/31/03 1,2 (Cost $0) 1,200 --
8 | OPPENHEIMER EUROPE FUND
Principal Market Value
Amount See Note 1
- --------------------------------------------------------------------------------
Joint Repurchase Agreements--10.8% 3
- --------------------------------------------------------------------------------
Undivided interest of 0.20% in joint
repurchase agreement (Principal Amount/
Market Value $754,227,000, with a maturity
value of $754,311,641) with PaineWebber,
Inc., 1.01%, dated 8/29/03, to be
repurchased at $1,478,166 on 9/2/03,
collateralized by Federal National
Mortgage Assn., 5.50%, 6/1/33, with
a value of $770,199,757
(Cost $1,478,000) $1,478,000 $1,478,000
Market Value
See Note 1
- --------------------------------------------------------------------------------
Total Investments,
at Value
(Cost $12,175,838) 99.0% $13,524,159
- --------------------------------------------------------------------------------
Other Assets
Net of Liabilities 1.0 141,194
----------------------------
Net Assets 100.0% $13,665,353
============================
Footnotes to Statement of Investments
1. Non-income producing security.
2. Identifies issues considered to be illiquid. See Note 6 of Notes to Financial
Statements.
3. The Fund may have elements of risk due to concentrated investments. Such
concentrations may subject the Fund to additional risks.
Distribution of investments representing geographic holdings, as a percentage of
total investments at value, is as follows:
Geographic Holdings Market Value Percent
- ----------------------------------------------------------------------
France $ 2,319,504 17.2%
Great Britain 2,048,670 15.2
The Netherlands 1,574,575 11.6
United States 1,478,000 10.9
Germany 1,219,097 9.0
Italy 1,087,043 8.0
Switzerland 767,415 5.7
Ireland 579,996 4.3
Belgium 433,554 3.2
Sweden 411,853 3.0
Greece 393,285 2.9
Finland 377,774 2.8
Japan 329,654 2.4
Norway 264,832 2.0
Canada 238,907 1.8
------------------------------
Total $13,524,159 100.0%
==============================
See accompanying Notes to Financial Statements.
9 | OPPENHEIMER EUROPE FUND
STATEMENT OF ASSETS AND LIABILITIES August 31, 2003
- ------------------------------------------------------------------------------------------------------------------
Assets
Investments, at value (including cost and market value of $1,478,000 in repurchase agreements)
(cost $12,175,838)--see accompanying statement $ 13,524,159
- ------------------------------------------------------------------------------------------------------------------
Cash 7,162
- ------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 144,883
- ------------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 210,333
Interest and dividends 58,449
Other 220
--------------
Total assets 13,945,206
- ------------------------------------------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed 231,707
Shareholder reports 23,037
Legal, auditing and other professional fees 10,247
Distribution and service plan fees 4,952
Transfer and shareholder servicing agent fees 3,092
Trustees' compensation 2,466
Other 4,352
--------------
Total liabilities 279,853
- ------------------------------------------------------------------------------------------------------------------
Net Assets $13,665,353
==============
- ------------------------------------------------------------------------------------------------------------------
Composition of Net Assets
Paid-in capital $ 23,472,166
- ------------------------------------------------------------------------------------------------------------------
Accumulated net investment loss (140,743)
- ------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (11,160,833)
- ------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 1,494,763
--------------
Net Assets $13,665,353
==============
10 | OPPENHEIMER EUROPE FUND
- ------------------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$8,205,468 and 1,359,233 shares of beneficial interest outstanding) $6.04
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $6.41
- ------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $3,731,518
and 639,661 shares of beneficial interest outstanding) $5.83
- ------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $1,584,594
and 270,395 shares of beneficial interest outstanding) $5.86
- ------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $70,857 and
11,856 shares of beneficial interest outstanding) $5.98
- ------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $72,916 and 11,800 shares of beneficial interest outstanding) $6.18
See accompanying Notes to Financial Statements.
11 | OPPENHEIMER EUROPE FUND
STATEMENT OF OPERATIONS For the Year Ended August 31, 2003
- --------------------------------------------------------------------------------------------
Investment Income
Dividends (net of foreign withholding taxes of $34,382) $ 257,915
- --------------------------------------------------------------------------------------------
Interest 12,192
-----------
Total investment income 270,107
- --------------------------------------------------------------------------------------------
Expenses
Management fees 80,309
- --------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 13,324
Class B 31,396
Class C 12,581
Class N 240
- --------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 34,488
Class B 28,779
Class C 11,062
Class N 638
Class Y 8
- --------------------------------------------------------------------------------------------
Shareholder reports 43,716
- --------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 2,746
- --------------------------------------------------------------------------------------------
Custodian fees and expenses 2,685
- --------------------------------------------------------------------------------------------
Trustees' compensation 764
- --------------------------------------------------------------------------------------------
Other 11,498
-----------
Total expenses 274,234
Less reduction to custodian expenses (69)
Less reimbursement of management fees (5,019)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class A (18,493)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class B (19,838)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class C (7,289)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class N (491)
-----------
Net expenses 223,035
- --------------------------------------------------------------------------------------------
Net Investment Income 47,072
- --------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (3,026,920)
Foreign currency transactions 1,262,125
-----------
Net realized loss (1,764,795)
- --------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 3,222,681
Translation of assets and liabilities denominated in foreign currencies (332,559)
-----------
Net change in unrealized appreciation 2,890,122
- --------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $1,172,399
===========
See accompanying Notes to Financial Statements.
12 | OPPENHEIMER EUROPE FUND
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended August 31, 2003 2002
- --------------------------------------------------------------------------------------------------------------
Operations
Net investment income (loss) $ 47,072 $ (107,309)
- --------------------------------------------------------------------------------------------------------------
Net realized loss (1,764,795) (2,533,553)
- --------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 2,890,122 (537,713)
--------------------------------
Net increase (decrease) in net assets resulting from operations 1,172,399 (3,178,575)
- --------------------------------------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Class A 1,656,009 820,312
Class B (368,462) (75,408)
Class C 149,814 180,239
Class N 8,181 68,859
Class Y (12,257) 62,051
- --------------------------------------------------------------------------------------------------------------
Net Assets
Total increase (decrease) 2,605,684 (2,122,522)
- --------------------------------------------------------------------------------------------------------------
Beginning of period 11,059,669 13,182,191
--------------------------------
End of period [including accumulated net investment
loss of $140,743 and $5,794, respectively] $ 13,665,353 $ 11,059,669
================================
See accompanying Notes to Financial Statements.
13 | OPPENHEIMER EUROPE FUND
FINANCIAL HIGHLIGHTS
Class A Year Ended August 31, 2003 2002 2001 2000 1999 1
- ---------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 5.43 $ 6.87 $11.28 $ 10.78 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .03 (.03) -- (.06) .02
Net realized and unrealized gain (loss) .58 (1.41) (4.41) 1.12 .76
-------------------------------------------------------------------------
Total from investment operations .61 (1.44) (4.41) 1.06 .78
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- (.02) --
Distributions from net realized gain -- -- -- (.43) --
Distributions in excess of net realized gain -- -- -- (.11) --
------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders -- -- -- (.56) --
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.04 $5.43 $ 6.87 $11.28 $10.78
========================================================================
- ---------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 11.23% (20.96)% (39.10)% 9.99% 7.80%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $8,205 $5,842 $6,630 $11,809 $4,347
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $5,536 $6,847 $9,051 $ 8,366 $3,473
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 1.04% (0.42)% (0.06)% (0.73)% 0.54%
Total expenses 2.27% 2.38% 1.87% 1.94% 1.61%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 1.89% 2.10% N/A 4 1.92% N/A 4
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 114% 287% 285% 210% 83%
1. For the period from March 1, 1999 (commencement of operations) to August 31,
1999.
2. Assumes an investment on the business day before the first day of the fiscal
period (or commencement of operations), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER EUROPE FUND
Class B Year Ended August 31, 2003 2002 2001 2000 1999 1
- -------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 5.28 $ 6.74 $11.15 $ 10.73 $ 10.00
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.03) (.09) (.06) (.08) (.03)
Net realized and unrealized gain (loss) .58 (1.37) (4.35) 1.04 .76
---------------------------------------------------------------------------
Total from investment operations .55 (1.46) (4.41) .96 .73
- -------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- --
Distributions from net realized gain -- -- -- (.43) --
Distributions in excess of net realized gain -- -- -- (.11) --
---------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders -- -- -- (.54) --
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.83 $5.28 $ 6.74 $11.15 $10.73
===========================================================================
- -------------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 10.42% (21.66)% (39.55)% 9.09% 7.30%
- -------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $3,732 $3,836 $5,129 $6,685 $851
- -------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $3,139 $5,012 $5,829 $3,954 $401
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.27)% (1.21)% (0.85)% (1.56)% (0.87)%
Total expenses 3.33% 3.15% 2.68% 2.77% 2.60%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 2.65% 2.87% N/A 4 2.75% N/A 4
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 114% 287% 285% 210% 83%
1. For the period from March 1, 1999 (commencement of operations) to August 31,
1999.
2. Assumes an investment on the business day before the first day of the fiscal
period (or commencement of operations), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER EUROPE FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
Class C Year Ended August 31, 2003 2002 2001 2000 1999 1
- ---------------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 5.30 $ 6.76 $11.20 $ 10.76 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss -- (.07) (.04) (.08) (.02)
Net realized and unrealized gain (loss) .56 (1.39) (4.40) 1.06 .78
--------------------------------------------------------------------------
Total from investment operations .56 (1.46) (4.44) .98 .76
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- --
Distributions from net realized gain -- -- -- (.43) --
Distributions in excess of net realized gain -- -- -- (.11) --
--------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- -- -- (.54) --
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.86 $5.30 $ 6.76 $11.20 $10.76
==========================================================================
- ---------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 10.57% (21.60)% (39.64)% 9.26% 7.60%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $1,585 $1,258 $1,422 $1,413 $133
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,259 $1,389 $1,823 $ 811 $ 52
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (0.21)% (1.30)% (0.61)% (1.56)% (0.82)%
Total expenses 3.29% 3.13% 2.69% 2.77% 2.57%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 2.66% 2.85% N/A 4 2.75% N/A 4
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 114% 287% 285% 210% 83%
1. For the period from March 1, 1999 (commencement of operations) to August 31,
1999.
2. Assumes an investment on the business day before the first day of the fiscal
period (or commencement of operations), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER EUROPE FUND
Class N Year Ended August 31, 2003 2002 2001 1
- --------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 5.39 $ 6.85 $ 8.21
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .01 (.03) .01
Net realized and unrealized gain (loss) .58 (1.43) (1.37)
-----------------------------
Total from investment operations .59 (1.46) (1.36)
- --------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- --
Distributions from net realized gain -- -- --
Distributions in excess of net realized gain -- -- --
-----------------------------
Total dividends and/or distributions to shareholders -- -- --
- --------------------------------------------------------------------------------------
Net asset value, end of period $5.98 $5.39 $6.85
=============================
- --------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 10.95% (21.31)% (16.57)%
- --------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $71 $56 $1
- --------------------------------------------------------------------------------------
Average net assets (in thousands) $48 $76 $1
- --------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.45% 0.15% 0.20%
Total expenses 3.24% 2.65% 1.74%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 2.17% 2.37% N/A 4
- --------------------------------------------------------------------------------------
Portfolio turnover rate 114% 287% 285%
1. For the period from March 1, 2001 (inception of offering) to August 31, 2001.
2. Assumes an investment on the business day before the first day of the fiscal
period (inception of offering), with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized for
periods of less than one full year. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER EUROPE FUND
FINANCIAL HIGHLIGHTS Continued
Class Y Year Ended August 31, 2003 2002 2001 2000 1999 1
- -----------------------------------------------------------------------------------------------------------------------
Per Share Operating Data
Net asset value, beginning of period $ 5.52 $ 6.94 $11.32 $ 10.78 $ 10.00
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .05 (.10) .03 (.05) .04
Net realized and unrealized gain (loss) .61 (1.32) (4.41) 1.15 .74
------------------------------------------------------------------------
Total from investment operations .66 (1.42) (4.38) 1.10 .78
- -----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- (.02) --
Distributions from net realized gain -- -- -- (.43) --
Distributions in excess of net realized gain -- -- -- (.11) --
------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- -- -- (.56) --
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.18 $5.52 $ 6.94 $11.32 $10.78
========================================================================
- -----------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2 11.96% (20.46)% (38.69)% 10.41% 7.80%
- -----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $73 $68 $1 $1 $1
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $63 $12 $1 $1 $1
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) 0.86% 0.46% 0.37% (0.30)% 0.65%
Total expenses 1.42% 19.08% 211.24% 4 1.51% 1.52%
Expenses after expense reimbursement
or fee waiver and reduction to
custodian expenses 1.37% 1.53% 1.44% 1.49% N/A 5
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 114% 287% 285% 210% 83%
1. For the period from March 1, 1999 (commencement of operations) to August 31,
1999.
2. Assumes an investment on the business day before the first day of the fiscal
period (or commencement of operations), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year. Returns do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the redemption of
Fund shares.
3. Annualized for periods of less than one full year.
4. Added since August 31, 2001 to reflect expenses before reduction to custodian
expenses and voluntary waiver of transfer agent fees.
5. Reduction to custodian expenses less than 0.01%.
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER EUROPE FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Europe 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 capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. Class B, Class C and Class N shares are sold
without a front-end sales charge but may be subject to a contingent deferred
sales charge (CDSC). Class N shares are sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights and voting privileges. Earnings, net assets and net asset value per
share may differ by minor amounts due to each class having its own expenses
directly attributable to that class. Classes A, B, C and N have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase. The Fund assesses a 2% fee on the proceeds of fund
shares that are redeemed (either by selling or exchanging to another
Oppenheimer fund) within 30 days of their purchase. The fee, which is retained
by the Fund, is accounted for as an addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges
or other domestic or foreign exchanges are valued based on the last sale price
of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ are valued based on the closing
price provided by NASDAQ prior to the time when the Fund's assets are valued.
In the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing bid and asked
prices, and if not, at the closing bid price. Securities (including restricted
securities) for which quotations are not readily available are valued primarily
using dealer-supplied valuations, a portfolio pricing service authorized by the
Board of Trustees, or at their fair value. Fair value is determined in good
faith using consistently applied procedures under the supervision of the Board
of Trustees. Short-term "money market type" debt securities with remaining
maturities of sixty days or less are valued at amortized cost (which
approximates market value).
- --------------------------------------------------------------------------------
Foreign Currency Translation. The Fund's accounting records are maintained in
U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
19 | OPPENHEIMER EUROPE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains
and losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint
trading accounts on a daily basis. Secured by U.S. government securities, these
balances are invested in one or more repurchase agreements. Securities pledged
as collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal. In the
event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years
and unrealized appreciation or depreciation of investment for federal income
tax purposes.
20 | OPPENHEIMER EUROPE FUND
Net Unrealized
Appreciation Based
Undistributed Undistributed Accumulatedon Cost of Securities
Net Investment Long-Term Loss for Federal Income
Income Gain Carryforward 1,2,3 Tax Purposes
-----------------------------------------------------------------------------------------
$95,002 $-- $11,102,387 $1,347,848
1. As of August 31, 2003, the Fund had $9,922,315 of net capital loss
carryforwards available to offset future realized capital gains, if any, and
thereby reduce future taxable gain distributions. As of August 31, 2003,
details of the capital loss carryforwards were as follows:
Expiring
----------------------
2009 $ 385,788
2010 6,875,740
2011 2,660,787
----------
Total $9,922,315
==========
2. During the fiscal years ended August 31, 2003 and August 31, 2002, the Fund
did not utilize any capital loss carryforwards.
3. As of August 31, 2003, the Fund had $1,129,124 of post-October losses
available to offset future realized capital gains, if any. Such losses, if
unutilized, will expire in 2012. Additionally, the Fund had $50,948 of
post-October foreign currency losses which were deferred.
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly,
the following amounts have been reclassified for August 31, 2003. Net assets of
the Fund were unaffected by the reclassifications.
From From Net
Ordinary Capital Tax Return Investment
Income Loss of Capital Loss
------------------------------------------------------
$182,021 $174,461 $-- $--
No distributions were paid during the years ended August 31, 2003 and August
31, 2002.
The aggregate cost of investments and the composition of unrealized
appreciation and depreciation of investments for federal income tax purposes as
of August 31, 2003 are noted below. The primary difference between book and tax
appreciation or depreciation of investments, if applicable, is attributable to
the tax deferral of losses or tax realization of financial statement unrealized
gain or loss.
Federal tax cost $12,322,753
===========
Gross unrealized appreciation$ 1,923,809
Gross unrealized depreciation (575,961)
-----------
Net unrealized appreciation $ 1,347,848
===========
21 | OPPENHEIMER EUROPE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for
the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the year ended
August 31, 2003, the Fund's projected benefit obligations were increased by
$338 and payments of $75 were made to retired trustees, resulting in an
accumulated liability of $2,390 as of August 31, 2003.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or
a portion of the annual compensation they are entitled to receive from the
Fund. Under the plan, deferred amounts are treated as though equal dollar
amounts had been invested in shares of the Fund or are invested in other
selected Oppenheimer funds. Deferral of trustees' fees under the plan will not
affect the net assets of the Fund, and will not materially affect the Fund's
assets, liabilities or net investment income per share. Amounts will be
deferred until distributed in accordance to the Plan.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
Investment Income. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and
amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
Expense Offset Arrangement. The reduction of custodian fees represents earnings
on cash balances maintained by the 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.
- --------------------------------------------------------------------------------
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 income and
expenses during the reporting period. Actual results could differ from those
estimates.
22 | OPPENHEIMER EUROPE FUND
- --------------------------------------------------------------------------------
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, 2003 Year Ended August 31, 2002
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------
Class A
Sold 1,652,316 $ 8,384,349 1,493,094 $ 8,972,262
Redeemed (1,369,288) (6,728,340) (1,381,282) (8,151,950)
--------------------------------------------------------
Net increase 283,028 $ 1,656,009 111,812 $ 820,312
========================================================
- ------------------------------------------------------------------------------------
Class B
Sold 302,446 $ 1,609,875 529,093 $ 3,268,092
Redeemed (388,596) (1,978,337) (563,731) (3,343,500)
--------------------------------------------------------
Net decrease (86,150) $ (368,462) (34,638) $ (75,408)
========================================================
- ------------------------------------------------------------------------------------
Class C
Sold 176,504 $ 862,279 265,966 $ 1,604,511
Redeemed (143,395) (712,465) (238,954) (1,424,272)
--------------------------------------------------------
Net increase 33,109 $ 149,814 27,012 $ 180,239
========================================================
- ------------------------------------------------------------------------------------
Class N
Sold 10,848 $ 53,714 22,625 $ 144,655
Redeemed (9,435) (45,533) (12,304) (75,796)
--------------------------------------------------------
Net increase 1,413 $ 8,181 10,321 $ 68,859
========================================================
- ------------------------------------------------------------------------------------
Class Y
Sold 119,559 $ 623,229 72,547 $ 421,533
Redeemed (119,985) (635,486) (60,431) (359,482)
--------------------------------------------------------
Net increase (decrease) (426) $ (12,257) 12,116 $ 62,051
========================================================
- --------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended August 31, 2003, were
$11,110,217 and $11,220,757, respectively.
23 | OPPENHEIMER EUROPE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.80% of the first $250 million of average annual net assets of
the Fund, 0.77% of the next $250 million, 0.75% of the next $500 million, 0.69%
of the next $1 billion and 0.67% of average annual net assets over $2 billion.
Effective January 1, 2002, the Manager has voluntarily agreed to waive advisory
fees at an annual rate equal to 0.10% or 0.05%, as the case may be, of the
Fund's average daily net assets until the Fund's trailing one year performance
percentile at the end of the preceding quarter is in at least the fourth
quintile or the third quintile, as the case may be, of the Fund's Lipper peer
group. The foregoing waiver is voluntary and may be terminated by the Manager
at any time.
- --------------------------------------------------------------------------------
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, 2003, the Fund
paid $35,037 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 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.
OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.35% of average annual net assets for all
classes. This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
Distributor) acts as the Fund's principal underwriter in the continuous public
offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
Aggregate Class A Concessions Concessions Concessions Concessions
Front-End Front-End on Class A on Class B on Class C on Class N
Sales Charges Sales Charges Shares Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor 1 Distributor 1 Distributor 1 Distributor 1
------------------------------------------------------------------------------------------------------------------
August 31, 2003 $24,673 $9,223 $538 $17,883 $4,246 $468
1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its
own resources at the time of sale.
Class A Class B Class C Class N
Contingent Contingent Contingent Contingent
Deferred Deferred Deferred Deferred
Sales Charges Sales Charges Sales Charges Sales Charges
Retained by Retained by Retained by Retained by
Year Ended Distributor Distributor Distributor Distributor
- ----------------------------------------------------------------------------------
August 31, 2003 $-- $13,393 $432 $140
24 | OPPENHEIMER EUROPE FUND
- --------------------------------------------------------------------------------
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class
A Shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. For the year ended August 31, 2003, expense under
the Class A Plan totaled $13,324, all of which were paid by the Distributor to
recipients, which included $31 retained by the Distributor and $2,039 which was
paid to an affiliate of the Manager. Any unreimbursed expenses the Distributor
incurs with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The
Fund has adopted Distribution and Service Plans for Class B, Class C and Class
N shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per
year under each plan.
Distribution fees paid to the Distributor for the year ended August 31, 2003,
were as follows:
Distributor's
Distributor's Aggregate
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- ----------------------------------------------------------------------------------------------------
Class B Plan $31,396 $24,837 $141,060 3.78%
Class C Plan 12,581 4,629 60,214 3.80
Class N Plan 240 223 635 0.90
- --------------------------------------------------------------------------------
5. Foreign Currency Contracts
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation
or depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gain or loss. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
25 | OPPENHEIMER EUROPE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
As of August 31, 2003, the Fund had outstanding foreign currency contracts as
follows:
Contract Valuation as of
Expiration Amount August 31, Unrealized
Contract Description Date (000s) 2003 Appreciation
- ------------------------------------------------------------------------------------------------------
Contracts to Sell
Euro [EUR] 9/15/03 2,865EUR $3,144,137 $144,883
- --------------------------------------------------------------------------------
6. Illiquid Securities
As of August 31, 2003, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund intends to invest no more than 10% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. The
aggregate value of illiquid securities subject to this limitation as of August
31, 2003 was zero.
- --------------------------------------------------------------------------------
7. Borrowing and Lending Arrangements
The Fund entered into an "interfund borrowing and lending arrangement" with
other funds in the Oppenheimer funds complex, to allow funds to borrow for
liquidity purposes. The arrangement was initiated pursuant to exemptive relief
granted by the Securities and Exchange Commission to allow these affiliated
funds to lend money to, and borrow money from, each other, in an attempt to
reduce borrowing costs below those of bank loan facilities. Under the
arrangement the Fund may lend money to other Oppenheimer funds and may borrow
from other Oppenheimer funds at a rate set by the Fund's Board of Trustees,
based upon a recommendation by the Manager. The Fund's borrowings, if any, are
subject to asset coverage requirements under the Investment Company Act and the
provisions of the SEC order and other applicable regulations. If the Fund
borrows money, there is a risk that the loan could be called on one day's
notice, in which case the Fund might have to borrow from a bank at higher rates
if a loan were not available from another Oppenheimer fund. If the Fund lends
money to another fund, it will be subject to the risk that the other fund might
not repay the loan in a timely manner, or at all.
The Fund had no interfund borrowings or loans outstanding during the year
ended or at August 31, 2003.
- --------------------------------------------------------------------------------
8. Fund Reorganization
On October 10, 2003, Shareholders of Oppenheimer Europe Fund approved a fund
reorganization, whereby Shareholders received shares of Oppenheimer Global
Fund. The reorganization occurred on October 16, 2003.
26 | OPPENHEIMER EUROPE FUND
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of Oppenheimer Europe Fund:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Europe Fund, including the statement of investments, as of August
31, 2003, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the four years in the
period then ended, and the period from March 1, 1999 (commencement of
operations) to August 31, 1999. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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, 2003, by
correspondence with the custodian. 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 Europe Fund as of August 31, 2003, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of the
four years in the period then ended, and the period from March 1, 1999
(commencement of operations) to August 31, 1999, in conformity with accounting
principles generally accepted in the United States of America.
KPMG LLP
Denver, Colorado
September 22, 2003
27 | OPPENHEIMER EUROPE FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
In early 2004, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2003. Regulations of the U.S. Treasury Department require the
Fund to report this information to the Internal Revenue Service.
A portion of the dividends paid by the Fund during the fiscal year ended
August 31, 2003 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.
$292,297 of the Fund's fiscal year taxable income is eligible for the lower
individual income tax rates. In early 2004, shareholders of record will receive
information regarding the percentage of distributions that are eligible for
lower individual income tax rates.
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.
PORTFOLIO PROXY VOTING
POLICIES AND PROCEDURES 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 1.800.225.5677, (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 will be required to file new 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 first such filing is due no later than August 31, 2004,
for the twelve months ended June 30, 2004. Once filed, the Fund's Form N-PX
filing will be available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.225.5677, and (ii) on the SEC's website at www.sec.gov.
28 | OPPENHEIMER EUROPE FUND
TRUSTEES AND OFFICERS Unaudited
- ------------------------------------------------------------------------------------------------------------------
Name, Position(s) Held with Principal Occupation(s) During Past 5 Years; Other Trusteeships/Directorships Held
Fund, Length of Service, Age by Trustee; Number of Portfolios in Fund Complex Currently Overseen by Trustee
INDEPENDENT The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial,
TRUSTEES CO 80112-3924. Each Trustee serves for an indefinite term, until his or
her resignation, retirement, death or removal.
Clayton K. Yeutter, Of Counsel (since 1993), Hogan & Hartson (a law firm). Other directorships:
Chairman of the Board Weyerhaeuser Corp. (since 1999) and Danielson Holding Corp. (since 2002);
of Trustees (since 2003), formerly a director of Caterpillar, Inc. (1993-December 2002). Oversees 29
Trustee (since 1999) portfolios in the OppenheimerFunds complex.
Age: 72
Robert G. Galli, A trustee or director of other Oppenheimer funds. Formerly Trustee (May 2000-
Trustee (since 1999) 2002) of Research Foundation of AIMR (investment research, non-profit) and
Age: 70 Vice Chairman (October 1995-December 1997) of OppenheimerFunds, Inc.
(the Manager). Oversees 39 portfolios in the OppenheimerFunds complex.
Phillip A. Griffiths, A director (since 1991) of the Institute for Advanced Study, Princeton, N.J.,
Trustee (since 1999) a director (since 2001) of GSI Lumonics, a trustee (since 1983) of Woodward
Age: 64 Academy, a Senior Advisor (since 2001) of The Andrew W. Mellon Foundation. A
member of: the National Academy of Sciences (since 1979), American Academy
of Arts and Sciences (since 1995), American Philosophical Society (since 1996)
and Council on Foreign Relations (since 2002). Formerly a director of Bankers
Trust New York Corporation (1994-1999). Oversees 29 portfolios in the
OppenheimerFunds complex.
Joel W. Motley, Director (since 2002) Columbia Equity Financial Corp. (privately-held financial
Trustee (since 2002) adviser); Managing Director (since 2002) Carmona Motley, Inc. (privately-held
Age: 51 financial adviser); Formerly he held the following positions: Managing Director
(January 1998-December 2001), Carmona Motley Hoffman Inc. (privately-held
financial adviser); Managing Director (January 1992-December 1997), Carmona
Motley & Co. (privately-held financial adviser). Oversees 29 portfolios
in the OppenheimerFunds complex.
Kenneth A. Randall, A director of Dominion Resources, Inc. (electric utility holding company) and
Trustee (since 1999) Prime Retail, Inc. (real estate investment trust); formerly a director of Dominion
Age: 76 Energy, Inc. (electric power and oil & gas producer), President and Chief
Executive Officer of The Conference Board, Inc. (international economic and
business research) and a director of Lumbermens Mutual Casualty Company,
American Motorists Insurance Company and American Manufacturers Mutual
Insurance Company. Oversees 29 portfolios in the OppenheimerFunds complex.
Edward V. Regan, President, Baruch College, CUNY; a director of RBAsset (real estate manager); a
Trustee (since 1999) director of OffitBank; formerly Trustee, Financial Accounting Foundation (FASB
Age: 73 and GASB), Senior Fellow of Jerome Levy Economics Institute, Bard College,
Chairman of Municipal Assistance Corporation for the City of New York, New
York State Comptroller and Trustee of New York State and Local Retirement
Fund. Oversees 29 investment companies in the OppenheimerFunds complex.
Russell S. Reynolds, Jr., Chairman (since 1993) of The Directorship Search Group, Inc. (corporate gover-
Trustee (since 1999) nance consulting and executive recruiting); a life trustee of International House
Age: 71 (non-profit educational organization), and a trustee (since 1996) of the
Greenwich Historical Society. Oversees 29 portfolios in the
OppenheimerFunds
complex.
29 | OPPENHEIMER EUROPE FUND
TRUSTEES AND OFFICERS Unaudited / Continued
Donald W. Spiro, Chairman Emeritus (since January 1991) of the Manager. Formerly a director
Vice Chairman of the (January 1969-August 1999) of the Manager. Oversees 29 portfolios in the
Board of Trustees, OppenheimerFunds complex.
Trustee (since 1999)
Age: 77
- -----------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE The address of Mr. Murphy in the chart below is 498 Seventh Avenue, New York,
AND OFFICER NY 10018. Mr. Murphy serves for an indefinite term, until his resignation, death or removal.
John V. Murphy, Chairman, Chief Executive Officer and director (since June 2001) and President
President and Trustee, (since September 2000) of the Manager; President and a director or trustee
Trustee (since 2001) of other Oppenheimer funds; President and a director (since July 2001) of
Age: 54 Oppenheimer Acquisition Corp. (the Manager's parent holding company) and of Oppenheimer
Partnership Holdings, Inc. (a holding company subsidiary of the Manager); a director (since
November 2001) of OppenheimerFunds Distributor, Inc. (a subsidiary of the Manager); Chairman
and a director (since July 2001) of Shareholder Services, Inc. and of Shareholder Financial
Services, Inc. (transfer agent subsidiaries of the Manager); President and a director (since
July 2001) of OppenheimerFunds Legacy Program (a charitable trust program established by the
Manager); a director of the investment advisory subsidiaries of the Manager: OFI
Institutional Asset Management, Inc. and Centennial Asset Management Corporation (since
November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc.
(since July 2001); President (since November 1, 2001) and a director (since July 2001) of
Oppenheimer Real Asset Management, Inc.; a director (since November 2001) of Trinity
Investment Management Corp. and Tremont Advisers, Inc. (investment advisory affiliates of the
Manager); Executive Vice President (since February 1997) of Massachusetts Mutual Life
Insurance Company (the Manager's parent company); a director (since June 1995) of DLB
Acquisition Corporation (a holding company that owns the shares of David L. Babson & Company,
Inc.); formerly, Chief Operating Officer (September 2000-June 2001) of the Manager; President
and trustee (November 1999-November 2001) of MML Series Investment Fund and MassMutual
Institutional Funds (open-end investment companies); a director (September 1999-August 2000)
of C.M. Life Insurance Company; President, Chief Executive Officer and director (September
1999-August 2000) of MML Bay State Life Insurance Company; a director (June 1989-June 1998)
of Emerald Isle Bancorp and Hibernia Savings Bank (a wholly-owned subsidiary of Emerald Isle
Bancorp). Oversees 75 portfolios in the OppenheimerFunds complex.
- -----------------------------------------------------------------------------------------------------------------------
OFFICERS The address of the Officers in the chart below is as follows: for Messrs. Freud and Zack, 498
Seventh Avenue, New York, NY 10018, for Mr. Wixted, 6803 S. Tucson Way, Centennial, CO
80112-3924. Each Officer serves for an annual term or until his or her earlier resignation,
death or removal.
Dominic Freud, Vice President of the Manager (since April 2003). An officer of 2 portfolio in the
Vice President OppenheimerFunds complex. Formerly, a Partner and European Equity Portfolio manager at SLS
(since 2003) Management (January 2002 - February 2003) prior to which he was head of the European
Age: 44 equities desk and managing director at SG Cowen (May 1994 - January 2002).
30 | OPPENHEIMER EUROPE FUND
Brian W. Wixted, Senior Vice President and Treasurer (since March 1999) of the Manager;
Treasurer (since 1999) Treasurer (since March 1999) of HarbourView Asset Management Corporation,
Age: 43 Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation,
Shareholder Financial Services, Inc., Oppenheimer Partnership Holdings, Inc., OFI
Private Investments, Inc. (since March 2000), OppenheimerFunds International
Ltd. and OppenheimerFunds plc (since May 2000) and OFI Institutional Asset
Management, Inc. (since November 2000) (offshore fund management sub-
sidiaries of the Manager); Treasurer and Chief Financial Officer (since May 2000)
of Oppenheimer Trust Company (a trust company subsidiary of the Manager);
Assistant Treasurer (since March 1999) of Oppenheimer Acquisition Corp. and
OppenheimerFunds Legacy Program (since April 2000); formerly Principal and
Chief Operating Officer (March 1995-March 1999), Bankers Trust Company-
Mutual Fund Services Division. An officer of 91 portfolios in the
OppenheimerFunds complex.
Robert G. Zack, Senior Vice President (since May 1985) and General Counsel (since February
Secretary (since 2001) 2002) of the Manager; General Counsel and a director (since November 2001) of
Age: 55 OppenheimerFunds Distributor, Inc.; Senior Vice President and General Counsel
(since November 2001) of HarbourView Asset Management Corporation; Vice
President and a director (since November 2000) of Oppenheimer Partnership
Holdings, Inc.; Senior Vice President, General Counsel and a director (since
November 2001) of Shareholder Services, Inc., Shareholder Financial
Services, Inc., OFI Private Investments, Inc., Oppenheimer Trust Company and OFI
Institutional Asset Management, Inc.; General Counsel (since November 2001) of
Centennial Asset Management Corporation; a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.; Assistant Secretary and a director
(since November 2001) of OppenheimerFunds International Ltd.; Vice President
(since November 2001) of OppenheimerFunds Legacy Program; Secretary (since
November 2001) of Oppenheimer Acquisition Corp.; formerly Acting General
Counsel (November 2001-February 2002) and Associate General Counsel
(May 1981-October 2001) of the Manager; Assistant Secretary of Shareholder
Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc.
(November 1989-November 2001); OppenheimerFunds International Ltd. and
OppenheimerFunds plc (October 1997-November 2001). An officer of 91 port-
folios in the OppenheimerFunds complex.
The Fund's Statement of Additional Information contains additional information
about the Fund's Trustees and is available without charge upon request.
31 | OPPENHEIMER EUROPE FUND
ITEM 2. CODE OF ETHICS
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the Fund has determined that Edward
V. Regan, the Chairman of the Board's Audit Committee, possesses the technical
attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as
an "audit committee financial expert," and has designated Mr. Regan as the Audit
Committee's financial expert. Mr. Regan is an "independent" Trustee pursuant to
paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES - NOT REQUIRED
ITEM 5. NOT APPLICABLE
ITEM 6. RESERVED
ITEM 7. NOT APPLICABLE
ITEM 8. RESERVED
ITEM 9. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(c)) as of August 31, 2003, registrant's
principal executive officer and principal financial officer found
registrant's disclosure controls and procedures to be appropriately
designed to ensure that information required to be disclosed by
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.
(b) There have been no significant changes in registrant's internal
controls or in other factors that could significantly affect
registrant's internal controls subsequent to the date of the most
recent evaluation as indicated, including no significant deficiencies
or material weaknesses that required corrective action.
ITEM 10. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)