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 811-21369
Oppenheimer International Value Fund
(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
(Address of principal executive offices)
(Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
--------------
Date of fiscal year end: April 30
Date of reporting period: August 1, 2003 - April 30, 2004
Item 1. Reports to Stockholders.
FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL PERIOD ENDED APRIL 30, 2004, FOLLOWED
BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE
BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. The Fund's relatively strong
performance between its inception and the end of its fiscal year was driven
primarily by the success of its security selection strategy. The portfolio
manager's "bottom-up" search for international companies with strong business
fundamentals selling at attractive valuations led to a portfolio of stocks from
a variety of regional markets and representing a number of economic sectors.
The Fund's strongest individual performers during the reporting period
came from a variety of markets and sectors. Anglo Irish Bank Corporation, the
Fund's largest position during much of the reporting period and its top
performer, benefited from rapid growth in Europe, leading to greater recognition
from securities analysts and a higher valuation from investors. Australian
insurer AMP Ltd. recovered from what we regarded as depressed prices as its
business fundamentals improved and speculation arose regarding a potential
merger. Dutch food company Nutreco Holding N.V. saw its valuation expand and
stock price rise when prices of farmed salmon improved. In Japan, gaming
equipment manufacturer Sammy Corp. enjoyed higher profits in a recovering
market, driving its stock price higher. Canadian PVC-products manufacturer Royal
Group Technologies Limited gained market share, solidified its leadership
position and saw its stock gain value.
On the other hand, some of the Fund's holdings detracted from its relative
performance. Italy-based dairy company Parmalat Group was hurt when questions
arose regarding its accounting and management practices, including allegations
of fraud. Questionable underwriting decisions by French reinsurance company The
SCOR Group forced it to raise capital by issuing more stock, diluting the value
of existing shares. The Fund's relative performance also was hindered slightly
by its sector allocation strategy, including a relatively light exposure to some
of the benchmark's stronger-performing non-energy minerals companies and a
relatively heavy cash position.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graph that follows shows the
performance of a hypothetical $10,000 investment in the Class A shares of the
Fund held until April 30, 2004. In the case of Class A shares, performance is
measured from the inception date of the Class A shares on August 1, 2003. The
Fund's performance reflects the deduction of the maximum initial sales charge on
Class A shares. Past performance cannot guarantee future results.
The Fund's performance is compared to the performance of the Morgan
Stanley Capital International (MSCI) World Index, an unmanaged index of issuers
listed on the stock exchange of 20 countries and the U.S. Index performance
reflects the reinvestment of income but does not consider the effect of
transaction costs, and none of the data in the graphs shows the effect of taxes.
The Fund's performance reflects the effects of the Fund's business and operating
expenses. While index comparisons may be useful to provide a benchmark for the
Fund's performance, it must be noted that the Fund's investments are not limited
to the investments in the index.
7 | OPPENHEIMER INTERNATIONAL VALUE FUND
FUND PERFORMANCE DISCUSSION
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CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
oppneheimer International Value Fund (Class A)
MSCI World Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Value of Investment
Date In Fund MSCI World Index
08/01/2003 9,425 10,000
10/31/2003 10,669 10,896
01/31/2004 11,689 11,952
04/30/2004 12,286 11,840
Cumulative Total Return of Class A Shares with Sales Charge of the Fund at
4/30/04
1-Year N/A Since Inception 22.86 Inception Date 8/1/03
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%. WITHOUT A VOLUNTARY EXPENSE
LIMIT THAT CAN BE TERMINATED AT ANY TIME, FUND PERFORMANCE WOULD HAVE BEEN
LOWER.
8 | OPPENHEIMER INTERNATIONAL VALUE FUND
NOTES
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TOTAL RETURNS INCLUDE CHANGES IN SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS DISTRIBUTIONS IN A HYPOTHETICAL INVESTMENT FOR THE PERIODS SHOWN.
CUMULATIVE TOTAL RETURNS ARE NOT ANNUALIZED. THE FUND'S TOTAL RETURNS SHOWN DO
NOT REFLECT THE DEDUCTION OF INCOME TAXES ON AN INDIVIDUAL'S INVESTMENT. TAXES
MAY REDUCE YOUR ACTUAL INVESTMENT RETURNS ON INCOME OR GAINS PAID BY THE FUND OR
ANY GAINS YOU MAY REALIZE IF YOU SELL YOUR SHARES.
INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER
CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS
THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR
FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT
WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
Please remember this Fund has a limited operating history.
CLASS A shares of the Fund were first offered on 8/1/03. 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 5/7/04 and performance
data is not yet available. Unless otherwise noted, Class B returns include the
applicable contingent deferred sales charge of 5% (1-year). Class B shares are
subject to an annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 5/7/04 and performance
data is not yet available. Unless otherwise noted, Class C returns include the
contingent deferred sales charge of 1% for the 1-year period. Class C shares are
subject to an annual 0.75% asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
9 | OPPENHEIMER INTERNATIONAL VALUE FUND
STATEMENT OF INVESTMENTS April 30, 2004
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MARKET VALUE
SHARES SEE NOTE 1
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COMMON STOCKS--99.4%
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CONSUMER DISCRETIONARY--20.5%
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AUTOMOBILES--3.8%
PSA Peugeot Citroen 2,070 $ 110,803
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Toyota Motor Corp. 4,000 145,902
------------
256,705
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DISTRIBUTORS--2.0%
Fujitsu Devices, Inc. 1 10,000 133,121
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HOTELS, RESTAURANTS & LEISURE--1.0%
Taito Corp. 50 72,040
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HOUSEHOLD DURABLES--5.7%
Barratt Developments plc 17,050 186,403
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CFM Corp. 2 6,890 53,557
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Matsushita Electric Industrial Co. 6,000 88,541
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Waterford Wedgwood plc 207,161 56,678
------------
385,179
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INTERNET & CATALOG RETAIL--1.0%
LG Home Shopping, Inc. 1,709 71,053
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LEISURE EQUIPMENT & PRODUCTS--2.0%
Agfa Gevaert NV 2,910 66,139
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Sammy Corp. 1,600 67,166
------------
133,305
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MEDIA--1.3%
Vivendi Universal SA 2 3,510 87,225
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SPECIALTY RETAIL--3.7%
Aoyama Trading Co. 4,000 91,938
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New Dixons Group plc 36,290 99,523
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Rosebys plc 34,238 57,984
------------
249,445
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CONSUMER STAPLES--11.3%
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BEVERAGES--3.7%
Heineken NV 1,700 71,733
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Scottish & Newcastle plc 17,587 128,104
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Southcorp Holdings Ltd. 19,508 50,064
------------
249,901
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FOOD & STAPLES RETAILING--1.1%
J. Sainsbury plc 14,590 71,821
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FOOD PRODUCTS--4.0%
Nestle SA 370 93,599
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Nutreco Holding NV 2,151 76,402
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Unilever NV 1,525 100,029
------------
270,030
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HOUSEHOLD PRODUCTS--1.1%
Reckitt Benckiser plc 3,000 77,992
MARKET VALUE
SHARES SEE NOTE 1
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PERSONAL PRODUCTS--1.4%
Amore Pacific Corp. 590 $ 94,281
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ENERGY--5.4%
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ENERGY EQUIPMENT & SERVICES--1.0%
TGS Nopec Geophysical Co. ASA 2 4,300 67,093
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OIL & GAS--4.4%
ENI SpA 8,400 170,779
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Total SA, B Shares 670 123,928
------------
294,707
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FINANCIALS--23.3%
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COMMERCIAL BANKS--11.5%
Abbey National plc 8,560 68,689
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Anglo Irish Bank Corp. 11,507 188,288
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Bank of Ireland 7,072 85,708
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Credit Agricole SA 5,661 139,119
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Danske Bank AS 3,000 67,415
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Grupo Financiero Inbursa SA de CV 86,080 108,546
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Industrial and Commercial
Bank of China (Asia) Ltd. 40,000 47,507
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Lloyds TSB Group plc 9,590 71,425
------------
776,697
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DIVERSIFIED FINANCIAL SERVICES--3.4%
Alarko Holding AS 1,156,000 28,727
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Ichiyoshi Securities Co. Ltd. 2 9,000 66,692
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Investor AB, B Shares 9,760 98,618
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Van der Moolen Holding NV 2 4,890 39,154
------------
233,191
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INSURANCE--7.3%
Aegon NV 5,801 75,258
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Aksigorta AS 12,750,000 34,605
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AMP Ltd. 20,533 85,014
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Converium Holding AG 1,300 67,928
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Fondiaria-Sai SpA 8,200 108,883
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HHG plc 2 31,653 26,517
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Muenchener Rueckversicherungs-
Gesellschaft AG 857 92,051
------------
490,256
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REAL ESTATE--1.1%
JM AB 4,200 73,860
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HEALTH CARE--9.2%
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HEALTH CARE EQUIPMENT & SUPPLIES--1.5%
Sysmex Corp. 3,900 103,400
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HEALTH CARE PROVIDERS & SERVICES--1.0%
Kuraya Sanseido, Inc. 5,100 65,535
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PHARMACEUTICALS--6.7%
Aventis SA 1,230 93,419
10 | OPPENHEIMER INTERNATIONAL VALUE FUND
MARKET VALUE
SHARES SEE NOTE 1
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PHARMACEUTICALS Continued
GlaxoSmithKline plc 9,250 $ 191,429
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Takeda Chemical Industries Ltd. 2,100 84,136
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UCB SA 2,020 80,829
------------
449,813
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INDUSTRIALS--11.7%
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BUILDING PRODUCTS--0.9%
Royal Group Technologies Ltd. 2 5,280 58,818
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COMMERCIAL SERVICES & SUPPLIES--5.0%
Bacou-Dalloz SA 1,100 82,750
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Jarvis plc 32,130 59,210
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Quebecor World, Inc. 6,500 111,543
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Rentokil Initial plc 25,510 84,758
------------
338,261
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CONSTRUCTION & ENGINEERING--5.0%
Fadesa Inmobiliaria SA 2 6,815 105,795
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Koninklijke Boskalis Westminster NV 2,610 65,704
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Okumura Corp. 12,000 57,088
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Vinci 1,130 109,614
------------
338,201
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ELECTRICAL EQUIPMENT--0.8%
Alstom 2 30,000 56,093
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INFORMATION TECHNOLOGY--6.3%
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COMMUNICATIONS EQUIPMENT--4.1%
Ericsson SpA 3,700 143,190
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SunCorp Technologies Ltd. 508,000 63,204
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Wavecom SA 2 7,360 69,706
------------
276,100
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ELECTRONIC EQUIPMENT & INSTRUMENTS--1.2%
Nichicon Corp. 7,000 81,069
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IT SERVICES--1.0%
Amadeus Global Travel
Distribution SA 12,300 71,996
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MATERIALS--1.8%
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CHEMICALS--0.7%
Metallgesellschaft AG 3,035 44,495
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METALS & MINING--1.1%
Maruichi Steel Tube Ltd. 5,000 74,487
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TELECOMMUNICATION SERVICES--8.6%
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DIVERSIFIED TELECOMMUNICATION SERVICES--6.8%
Cable & Wireless plc 2 39,950 86,838
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France Telecom SA 2 4,081 97,802
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PCCW Ltd. 2 141,000 95,501
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Telecom Italia SpA 2 53,969 125,326
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Telefonos de Mexico SA de CV 32,140 55,353
------------
460,820
MARKET VALUE
SHARES SEE NOTE 1
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WIRELESS TELECOMMUNICATION SERVICES--1.8%
KDDI Corp. 20 $ 118,962
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UTILITIES--1.3%
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MULTI-UTILITIES & UNREGULATED POWER--1.3%
Veolia Environnement 3,250 86,037
------------
Total Common Stocks (Cost $5,548,726) 6,711,989
PRINCIPAL
AMOUNT
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JOINT REPURCHASE AGREEMENTS--1.0%
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Undivided interest of 0.01% in joint
repurchase agreement (Principal Amount/Market
Value $554,815,000, with a maturity value of
$554,860,310) with PaineWebber, Inc., 0.98%,
dated 4/30/04, to be repurchased at $65,005
on 5/3/04, collateralized by Federal National
Mortgage Assn., 5.50%-6.50%, 7/1/32-11/1/33,
with a value of $566,733,053 (Cost $65,000) $ 65,000 65,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $5,613,726) 100.4% 6,776,989
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LIABILITIES IN EXCESS OF OTHER ASSETS (0.4) (24,161)
-----------------------
NET ASSETS 100.0% $ 6,752,828
=======================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.
2. Non-income producing security.
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS MARKET VALUE PERCENT
- -------------------------------------------------------------------------------
Japan $1,250,077 18.5%
Great Britain 1,210,693 17.9
France 1,056,496 15.6
Italy 548,178 8.1
The Netherlands 428,280 6.3
Ireland 330,674 4.9
Canada 223,918 3.3
Spain 177,791 2.6
Sweden 172,478 2.5
Korea, Republic of South 165,334 2.4
Mexico 163,899 2.4
Switzerland 161,527 2.4
Belgium 146,968 2.2
Germany 136,546 2.0
Australia 135,078 2.0
Hong Kong 110,711 1.6
China 95,501 1.4
Denmark 67,415 1.0
Norway 67,093 1.0
United States 65,000 1.0
Turkey 63,332 0.9
---------------------
Total $6,776,989 100.0%
=====================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11 | OPPENHEIMER INTERNATIONAL VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES April 30, 2004
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
ASSETS
- -------------------------------------------------------------------------------------------------------------------
Investments, at value (cost $5,613,726)--see accompanying statement of investments $ 6,776,989
- -------------------------------------------------------------------------------------------------------------------
Cash 16,601
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Unrealized appreciation on foreign currency contracts 46,541
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Receivables and other assets:
Investments sold 72,510
Interest and dividends 31,125
Other 7,374
------------
Total assets 6,951,140
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LIABILITIES
- -------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 168,596
Legal, auditing and other professional fees 18,890
Shareholder communications 9,608
Trustees' compensation 699
Transfer and shareholder servicing agent fees 6
Other 513
------------
Total liabilities 198,312
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NET ASSETS $ 6,752,828
============
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COMPOSITION OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 520
- -------------------------------------------------------------------------------------------------------------------
Additional paid-in capital 5,204,979
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Accumulated net investment loss (70,436)
- -------------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 409,269
- -------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 1,208,496
------------
NET ASSETS $ 6,752,828
============
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NET ASSET VALUE PER SHARE
- -------------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $6,752,828 and
520,347 shares of beneficial interest outstanding) $ 12.98
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 13.77
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12 | OPPENHEIMER INTERNATIONAL VALUE FUND
STATEMENT OF OPERATIONS For the Period Ended April 30, 2004 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $8,788) $ 80,902
- --------------------------------------------------------------------------------------
Interest 3,623
------------
Total investment income 84,525
- --------------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------------
Management fees 38,523
- --------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Class A 55
- --------------------------------------------------------------------------------------
Shareholder communications--Class A 12,641
- --------------------------------------------------------------------------------------
Legal, auditing and other professional fees 34,565
- --------------------------------------------------------------------------------------
Trustees' compensation 7,593
- --------------------------------------------------------------------------------------
Custodian fees and expenses 1,504
- --------------------------------------------------------------------------------------
Other 2,625
------------
Total expenses 97,506
Less reduction to custodian expenses (163)
Less voluntary reimbursement of expenses--Class A (19,382)
------------
Net expenses 77,961
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NET INVESTMENT INCOME 6,564
- --------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments 396,522
Foreign currency transactions (39,076)
------------
Net realized gain 357,446
- --------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 939,324
Translation of assets and liabilities denominated in foreign currencies 269,172
------------
Net change in unrealized appreciation 1,208,496
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,572,506
============
1. For the period from August 1, 2003 (commencement of operations) to April 30,
2004.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13 | OPPENHEIMER INTERNATIONAL VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
PERIOD ENDED APRIL 30, 2004 1
- ---------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income $ 6,564
- ---------------------------------------------------------------------------------------------------------------------------
Net realized gain 357,446
- ---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 1,208,496
-------------
Net increase in net assets resulting from operations 1,572,506
- ---------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain--Class A (25,177)
- ---------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions--Class A 5,105,499
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
Total increase 6,652,828
- ---------------------------------------------------------------------------------------------------------------------------
Beginning of period 100,000 2
-------------
End of period (including accumulated net investment loss of $70,436 for the period ended April 30, 2004) $ 6,752,828
=============
1. For the period from August 1, 2003 (commencement of operations) to April 30,
2004.
2. Reflects the value of the Manager's initial seed money investment on July 16,
2003.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14 | OPPENHEIMER INTERNATIONAL VALUE FUND
FINANCIAL HIGHLIGHTS
CLASS A PERIOD ENDED APRIL 30, 2004 1
- -------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.00
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .01
Net realized and unrealized gain 3.02
-----------
Total from investment operations 3.03
- -------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (.05)
- -------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.98
===========
- -------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 30.35%
- -------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 6,753
- -------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 6,126
- -------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.14%
Total expenses 2.13%
Expenses after expense reimbursement or fee waiver and reduction to custodian expenses 1.70%
- -------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30%
1. For the period from August 1, 2003 (commencement of operations) to April 30,
2004.
2. Assumes an investment at net asset value on the business day before the first
day of the fiscal period, with all dividends and distributions reinvested in
additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized for
periods of less than one full year. Returns do not reflect the deduction of
taxes a shareholder would pay on Fund distributions or the redemption of Fund
shares.
3. Annualized for periods of less than one full year.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15 | OPPENHEIMER INTERNATIONAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS
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- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer International Value Fund (the Fund), a series of Oppenheimer
International Value Trust, is an open-end management investment company
registered under the Investment Company Act of 1940, as amended. The Fund's
investment objective is to seek long-term capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund currently offers Class A shares only. Class A shares are sold at
their offering price, which is normally net asset value plus a front-end sales
charge. As of April 30, 2004, 500,000 shares of Class A were owned by the
Manager and its affiliates, which represents 96% of the Fund's total shares
outstanding. 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. Effective May 6, 2004, the Fund offers Class
B and Class C shares.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic 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 may be valued primarily using dealer-supplied valuations or a
portfolio pricing service authorized by the Board of Trustees. Securities
(including restricted securities) for which market quotations are not readily
available are valued at their fair value. Foreign securities whose values have
been materially affected by what the Manager identifies as a significant event
occurring before the Fund's assets are valued but after the close of their
respective foreign exchanges will be fair valued. Fair value is determined in
good faith using consistently applied procedures under the supervision of the
Board of Trustees. Short-term "money market type" debt securities with remaining
maturities of sixty days or less are valued at amortized cost (which
approximates market value).
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. 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.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
values of assets and liabilities, including investments in securities at fiscal
period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
16 | OPPENHEIMER INTERNATIONAL VALUE FUND
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1 TAX PURPOSES
-------------------------------------------------------------------------
$443,302 $-- $34,033 $1,184,602
1. As of April 30, 2004, the Fund had $34,033 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 April 30, 2004.
Net assets of the Fund were unaffected by the reclassifications.
INCREASE TO
REDUCTION TO ACCUMULATED NET
ACCUMULATED NET REALIZED GAIN
INVESTMENT INCOME ON INVESTMENTS
-------------------------------------------
$77,000 $77,000
The tax character of distributions paid during the period ended April 30, 2004
was as follows:
PERIOD ENDED
APRIL 30, 2004 1
-------------------------------------------
Distributions paid from:
Ordinary income $25,177
1. For the period from August 1, 2003 (commencement of operations) to April 30,
2004.
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of April 30, 2004 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.
Federal tax cost of securities $ 5,637,620
Federal tax cost of other investments 1,308,733
-----------
Total federal tax cost $ 6,946,353
===========
Gross unrealized appreciation $ 1,352,844
Gross unrealized depreciation (168,242)
-----------
Net unrealized appreciation $ 1,184,602
===========
17 | OPPENHEIMER INTERNATIONAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable,
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 U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
In the ordinary course of business, the Fund enters into contracts that
contain a variety of indemnifications. The Fund's maximum exposure under these
arrangements is unknown. However, the Fund has not had prior claims or losses
pursuant to these contracts and expects the risk of loss to be remote.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
PERIOD ENDED APRIL 30, 2004 1,2
SHARES AMOUNT
- --------------------------------------------------------------------------------
CLASS A
Sold 510,303 $5,105,000
Dividends and/or distributions reinvested 44 499
--------------------------
Net increase 510,347 $5,105,499
==========================
1. For the period from August 1, 2003 (commencement of operations) to April 30,
2004.
2. The Fund sold 10,000 to the Manager upon seeding of the Fund on July 16,
2003.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the period ended April 30, 2004, were
$6,887,512 and $1,814,913, respectively.
18 | OPPENHEIMER INTERNATIONAL VALUE FUND
- --------------------------------------------------------------------------------
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 0.85% of the first $500 million of average annual net assets of
the Fund, 0.75% of the next $500 million, and 0.70% of average annual net assets
in excess of $1 billion. The Manager has voluntarily agreed to waive management
fees and/or reimburse the Fund for certain expenses so that "Total Annual
Operating Expenses" will not exceed 1.70% for Class A shares. The voluntary
waiver and/or expense reimbursements may be amended or withdrawn at any time
without prior notice to shareholders. For the period ended April 30, 2004,
management fees in the amount of $19,382 were voluntarily waived by the Manager.
- --------------------------------------------------------------------------------
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 period ended April 30, 2004, the Fund paid $49 to
OFS for services to the Fund.
OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees to 0.35% of average net assets of Class A shares. This undertaking
may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
OFFERING AND ORGANIZATIONAL COSTS. The Manager paid all offering and
organizational costs associated with the registration and seeding of the Fund.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Class A shares of the 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. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of April 30, 2004, the Fund had outstanding foreign currency contracts as
follows:
EXPIRATION CONTRACT AMOUNT VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATES (000s) APRIL 30, 2004 APPRECIATION
- -----------------------------------------------------------------------------------------------
CONTRACTS TO SELL
Euro [EUR] 10/4/04 735EUR $878,038 $22,557
Japanese Yen [JPY] 10/4/04 44,400JPY 404,753 23,984
-------
Total unrealized appreciation $46,541
=======
19 | OPPENHEIMER INTERNATIONAL VALUE FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. 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 (the SEC) 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. The SEC's
order requires the Fund's Board of Trustees to adopt operating policies and
procedures to administer interfund borrowing and lending. 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
period ended or at April 30, 2004.
20 | OPPENHEIMER INTERNATIONAL VALUE FUND
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF OPPENHEIMER INTERNATIONAL VALUE
FUND
We have audited the accompanying statement of assets and liabilities of
Oppenheimer International Value Fund (the sole fund constituting the Oppenheimer
International Value Trust) (the "Fund"), including the statement of investments,
as of April 30, 2004, and the related statements of operations and changes in
net assets and the financial highlights for the period from August 1, 2003
(commencement of operations) to April 30, 2004. 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 audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of April 30, 2004, by correspondence with
the custodian and others. 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
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer International Value Fund of the Oppenheimer International Value
Trust at April 30, 2004, the results of its operations, the changes in its net
assets and the financial highlights for the period from August 1, 2003 to April
30, 2004 in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
June 4, 2004
21 | OPPENHEIMER INTERNATIONAL VALUE FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
In early 2005, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2004. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends of $0.0484 per share were paid to Class A shareholders on
December 11, 2003, all of which was designated as ordinary income for federal
income tax purposes.
None of the dividends paid by the Fund during the period ended April 30,
2004 are eligible for the corporate dividend-received deduction.
A portion, if any, of the dividends paid by the Fund during the fiscal
year ended April 30, 2004 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.
$86,801 of the Fund's fiscal year taxable income may be eligible for the lower
individual income tax rates. In early 2005, 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.
22 | OPPENHEIMER INTERNATIONAL VALUE FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/
FUND, LENGTH OF SERVICE, AGE DIRECTORSHIPS HELD BY TRUSTEE; NUMBER OF PORTFOLIOS IN FUND
COMPLEX CURRENTLY OVERSEEN BY TRUSTEE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE AND INTERESTED TRUSTEE IN THE CHARTS
TRUSTEES BELOW IS 6803 S. TUCSON WAY, CENTENNIAL, CO 80112-3924. EACH
TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
RONALD J. ABDOW, Chairman (since 1959) of Abdow Corporation (operator of
Trustee (since 2003) restaurants); Trustee of the following real estate businesses
Age: 72 (owners and operators of restaurants): G&R Realty Co. (since 1978),
G&R Trust Co. (since 1973), Abdow Partnership (since 1975), Auburn
Associates (since 1983); Hazard Associates (since 1985); Trustee of
MML Series Investment Fund (since 1993) and of MassMutual
Institutional Funds (MMIF) (since 1994) (open-end investment
companies); Trustee (since 1987) of Bay State Health System (health
services); Chairman (since 1996) of Western Mass Development Corp.
(non-profit land development); Chairman (since 1991) of American
International College (non-profit college). Oversees 10 portfolios
in the OppenheimerFunds complex.
JOSEPH M. WIKLER, Self-employed as an investment consultant; a director (since 1996)
Trustee (since 2003) of Lakes Environmental Association, and Medintec (since 1992) and
Age: 63 Cathco (since 1995) (medical device companies); a member of the
investment committee of the Associated Jewish Charities of Baltimore
(since 1994); formerly a director of Fortis/Hartford mutual funds
(1994 - December 2001). Oversees 10 portfolios in the
OppenheimerFunds complex.
PETER I. WOLD, President of Wold Properties, Inc. (an oil and gas exploration and
Trustee (since 2003) production company); Vice President, Secretary and Treasurer of Wold
Age: 56 Trona Company, Inc. (soda ash processing and production); Vice
President of Wold Talc Company, Inc. (talc mining); Managing Member,
Hole-in-the-Wall Ranch (cattle ranching); formerly Director and
Chairman of the Board, Denver Branch of the Federal Reserve Bank of
Kansas City (1993 - 1999) and Director of PacifiCorp. (1995 - 1999),
an electric utility. Oversees 10 portfolios in the OppenheimerFunds
complex.
- -----------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
EUSTIS WALCOTT, Principal with Ardsley Associates (since 2000) (consulting firm);
Trustee (since 2003) Director (since October 2000) of Cornerstone Real Estate Advisors
Age: 66 (real estate equity investment management services) and MML
Investors Services (individual retirement, insurance, investment,
and life event planning products and services company) (both
affiliates of the Manager); Trustee of OFI Trust Company (since
2001) (also an affiliate of the Manager); formerly Trustee of the
American International College (1995 - December 2003); Senior Vice
President, MassMutual Financial Group (May 1990 - July 2000).
Oversees 10 portfolios in the OppenheimerFunds complex.
- -----------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL
AND OFFICER CENTER, 225 LIBERTY STREET, NEW YORK, NY 10281-1008. 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, Trustee and President (since September 2000) of the Manager; President and a
Chairman of the Board, director or trustee of other Oppenheimer funds; President and a
Trustee (since 2003) director (since July 2001) of Oppenheimer Acquisition Corp. (the
Age: 54 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 following investment advisory
subsidiaries of the Manager: OFI Institutional Asset Management,
Inc., Centennial Asset Management Corporation, Trinity Investment
Management Corporation and Tremont Capital Management, Inc. (since
November 2001), HarbourView Asset Management Corporation and OFI
Private Investments, Inc. (since July 2001); President (since
November 1, 2001) and a director (since July 2001) of Oppenheimer
Real Asset Management, Inc.; 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.); a member of the Investment Company
Institute's Board of Governors (elected to serve from October 3,
2003 through September 30, 2006). 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-
23 | OPPENHEIMER INTERNATIONAL VALUE FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
JOHN V. MURPHY, August 2000) of C.M. Life Insurance Company; President, Chief
Continued 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 73 portfolios as
Trustee/Director and 10 portfolios as Officer in the
OppenheimerFunds complex.
- -----------------------------------------------------------------------------------------------------
OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR
MR. FREUD, MR. WILBY AND MR. ZACK, TWO WORLD FINANCIAL CENTER, 225
LIBERTY STREET, NEW YORK, NY 10281-1008, 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 1
Vice President and Portfolio portfolio in the OppenheimerFunds complex. Formerly, a Partner and
Manager (since 2004) European Equity Portfolio manager at SLS Management (January 2002 -
Age: 45 February 2003) prior to which he was head of the European equities
desk and managing director at SG Cowen (May 1994 - January 2002).
WILLIAM L. WILBY, Senior Vice President of the Manager (since July 1994) and of
Vice President and Portfolio HarbourView Asset Management Corporation (since May 1999); Senior
Manager (since 2004) Investment Officer, Director of International Equities for the
Age: 50 Manager (since May 2000); an officer of 2 portfolios in the
OppenheimerFunds complex.
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the
Treasurer, Principal Financial Manager; Treasurer of HarbourView Asset Management Corporation,
and Accounting Officer Shareholder Financial Services, Inc., Shareholder Services, Inc.,
(since 2003) Oppenheimer Real Asset Management Corporation, and Oppenheimer
Age: 44 Partnership Holdings, Inc. (since March 1999), of OFI Private
Investments, Inc. (since March 2000), of OppenheimerFunds
International Ltd. and OppenheimerFunds plc (since May 2000), of OFI
Institutional Asset Management, Inc. (since November 2000), and of
OppenheimerFunds Legacy Program (a Colorado non-profit corporation)
(since June 2003); Treasurer and Chief Financial Officer (since May
2000) of OFI Trust Company (a trust company subsidiary of the
Manager); Assistant Treasurer (since March 1999) of Oppenheimer
Acquisition Corp. Formerly Assistant Treasurer of Centennial Asset
Management Corporation (March 1999-October 2003) and
OppenheimerFunds Legacy Program (April 2000-June 2003); Principal
and Chief Operating Officer (March 1995-March 1999) at Bankers Trust
Company-Mutual Fund Services Division. An officer of 83 portfolios
in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel
Secretary (since 2003) (since February 2002) of the Manager; General Counsel and a director
Age: 55 (since November 2001) of the Distributor; General Counsel (since
November 2001) of Centennial Asset Management Corporation; Senior
Vice President and General Counsel (since November 2001) of
HarbourView Asset Management Corporation; Secretary and General
Counsel (since November 2001) of Oppenheimer Acquisition Corp.;
Assistant Secretary and a director (since October 1997) of
OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice
President and a director (since November 2001) of Oppenheimer
Partnership Holdings, Inc.; a director (since November 2001) of
Oppenheimer Real Asset Management, Inc.; Senior Vice President,
General Counsel and a director (since November 2001) of Shareholder
Financial Services, Inc., Shareholder Services, Inc., OFI Private
Investments, Inc. and OFI Trust Company; Vice President (since
November 2001) of OppenheimerFunds Legacy Program; Senior Vice
President and General Counsel (since November 2001) of OFI
Institutional Asset Management, Inc.; a director (since June 2003)
of OppenheimerFunds (Asia) Limited. Formerly Senior Vice President
(May 1985-December 2003), Acting General Counsel (November
2001-February 2002) and Associate General Counsel (May 1981-October
2001) of the Manager; Assistant Secretary of Shareholder Services,
Inc. (May 1985-November 2001), Shareholder Financial Services, Inc.
(November 1989-November 2001); and OppenheimerFunds International
Ltd. (October 1997-November 2001). An officer of 83 portfolios 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.
24 | OPPENHEIMER INTERNATIONAL VALUE FUND
Item 2. Code of Ethics
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions.
Item 3. Audit Committee Financial Expert
The Board of Trustees of the registrant has determined that Joseph M.
Wikler, 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. Wikler as the
Audit Committee's financial expert. Mr. Wikler is an "independent" Trustee
pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
Item 4. Principal Accountant Fees and Services
(a) Audit Fees
The principal accountant for the audit of the registrant's annual
financial statements was engaged to provide $16,250 in fiscal
2004. This section is not applicable to fiscal 2003 as the
registrant commenced operations in August 2003.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last fiscal year. This section is not applicable to fiscal
2003 as the registrant commenced operations in August 2003.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last fiscal year to the registrant's investment adviser or any
entity controlling, controlled by, or under common control with
the adviser that provides ongoing services to the registrant. This
section is not applicable to fiscal 2003 as the registrant
commenced operations in August 2003.
Such fees would include, among others: due diligence related to
mergers and acquisitions, accounting consultations and audits in
connection with acquisitions, internal control reviews and
consultation concerning financial accounting and reporting
standards.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual
financial statements billed $300 in fiscal 2004. This section is
not applicable to fiscal 2003 as the registrant commenced
operations in August 2003.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees during the last year to
the registrant's investment adviser or any entity controlling,
controlled by, or under common control with the adviser that
provides ongoing services to the registrant. This section is not
applicable to fiscal 2003 as the registrant commenced operations
in August 2003.
Such fees would include, among others: tax compliance, tax
planning and tax advice. Tax compliance generally involves
preparation of original and amended tax returns, claims for a
refund and tax payment-planning services. Tax planning and tax
advice includes assistance with tax audits and appeals, tax advice
related to mergers and acquisitions and requests for rulings or
technical advice from taxing authorities.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last fiscal year. This section is not applicable to fiscal
2003 as the registrant commenced operations in August 2003.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last fiscal year to the registrant's investment adviser or any
entity controlling, controlled by, or under common control with
the adviser that provides ongoing services to the registrant. This
section is not applicable to fiscal 2003 as the registrant
commenced operations in August 2003.
Such fees would include services provided to the registrant's
Board of Trustees with respect to analysis of the registrant's
expenses and consultations with management with respect to its due
diligence review process surrounding investments.
(e) (1) During its regularly scheduled periodic meetings, the
registrant's audit committee will pre-approve all audit,
audit-related, tax and other services to be provided by the
principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its
Chairman for any subsequent new engagements that arise between
regularly scheduled meeting dates provided that any fees such
pre-approved are presented to the audit committee at its next
regularly scheduled meeting.
Pre-approval of non-audit services is waived provided that: 1) the
aggregate amount of all such services provided constitutes no more
than five percent of the total amount of fees paid by the
registrant to it principal accountant during the fiscal year in
which services are provided 2) such services were not recognized
by the registrant at the time of engagement as non-audit services
and 3) such services are promptly brought to the attention of the
audit committee of the registrant and approved prior to the
completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed $300 in fiscal 2004 to the registrant
and the registrant's investment adviser or any entity controlling,
controlled by, or under common control with the adviser that
provides ongoing services to the registrant related to non-audit
fees. Those billings did not include any prohibited non-audit
services as defined by the Securities Exchange Act of 1934. This
section is not applicable to fiscal 2003 as the registrant
commenced operations in August 2003.
(h) The registrant's audit committee of the board of trustees has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser, and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal account's independence. No such services
were rendered.
Item 5. Not applicable
Item 6. Schedule of Investments
Not applicable
Item 7. Not applicable
Item 8. Not applicable
Item 9. Submission of Matters to a Vote of Security Holders
The Board is responsible for approving nominees for election as
trustees. To assist in this task, the Board has designated the Audit Committee
as the nominating committee for the Board. It reviews and recommends nominees to
the Board. The Committee is comprised entirely of disinterested trustees as
defined in Section 2(a)(19) of the Investment Company Act of 1940.
The Audit Committee charter describes the responsibilities of the
Committee in nominating candidates for election as independent Trustees of the
Registrant. The Registrant's Board has adopted a written charter for the
Committee. A current copy of the Audit Committee charter is available to
shareholders on the OppenheimerFunds website at www.oppenheimerfunds.com.
Under the current policy, if the Board determines that a vacancy exists
or is likely to exist on the Board, the Audit Committee of the Board will
consider candidates for Board membership including recommended by Registrant
shareholders. The Audit Committee will consider nominees recommended by
independent Board members or recommended by any other Board members including
Board members affiliated with the Registrant's investment advisors. The
Committee may, upon Board approval, retain an executive search firm to assist in
screening potential candidates. Upon Board approval, the Audit Committee may
also use the services of legal, financial, or other external counsel that it
deems necessary or desirable in the screening process. Shareholders wishing to
submit a nominee for election to the Board may do so by mailing their submission
to the offices of OppenheimerFunds, Inc., 6803 South Tucson Way, Centennial, CO
80112, to the attention of the Board of Trustees of the named Registrant, c/o
the Secretary of the Registrant.
The Committee's process for identifying and evaluating nominees for
trustees includes a number of factors. In screening candidates for board
membership, whether the candidate is suggested by Board members, shareholders or
others, the Committee considers the candidate's professional experience,
soundness of judgment, integrity, ability to make independent, analytical
inquiries, collegiality, willingness and ability to devote the time required to
perform Board activities adequately, ability to represent the interests of all
shareholders of the Registrant, and diversity relative to the board's
composition. Candidates are expected to provide a mix of attributes, experience,
perspective and skills necessary to effectively advance the interests of
shareholders.
Item 10. 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 April 30, 2004,
registrant's principal executive officer and principal financial
officer found registrant's disclosure controls and procedures to
provide reasonable assurances 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 over financial reporting that occurred during the
registrant's last fiscal half-year that has materially affected,
or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
Item 11. Exhibits.
(a) Exhibit attached hereto. (Attach code of ethics as exhibit)
(b) Exhibits attached hereto. (Attach certifications as exhibits)