UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-08299
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Oppenheimer International Small Company Fund
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(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
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(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
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Date of fiscal year end: August 31
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Date of reporting period: 02/29/2008
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ITEM 1. REPORTS TO STOCKHOLDERS.
FEBRUARY 29, 2008
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Oppenheimer Management
International Small Commentaries
Company Fund and
Semiannual Report
- --------------------------------------------------------------------------------
MANAGEMENT COMMENTARIES
An Interview with Your Fund's Manager
Listing of Top Holdings
SEMIANNUAL REPORT
Listing of Investments
Financial Statements
[OPPENHEIMERFUNDS LOGO]
TOP HOLDINGS AND ALLOCATIONS
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TOP TEN COMMON STOCK HOLDINGS
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Xinao Gas Holdings Ltd. 3.2%
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Central African Mining & Exploration Co. plc 2.7
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Addax Petroleum Corp. 2.6
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HudBay Minerals, Inc. 2.6
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Anvil Mining Ltd. 2.4
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Lundin Mining Corp. 2.3
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Petrolifera Petroleum Ltd. 2.2
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First Quantum Minerals Ltd. 2.1
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Pacific Rubiales Energy Corp. 2.1
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Kenedix, Inc. 2.0
Portfolio holdings and allocations are subject to change. Percentages are as of
February 29, 2008, and are based on net assets.
For up-to-date Top 10 Fund holdings, please visit www.oppenheimerfunds.com.
TOP TEN GEOGRAPHICAL HOLDINGS
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Canada 38.0%
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India 9.7
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Australia 9.2
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Japan 9.0
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United Kingdom 5.0
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Cayman Islands 4.3
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Germany 4.2
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Brazil 3.3
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Norway 3.3
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Bermuda 2.9
Portfolio holdings and allocations are subject to change. Percentages are as of
February 29, 2008, and are based on the total market value of investments.
12 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
REGIONAL ALLOCATION
[PIE CHART]
United States/Canada 38.0%
Asia 37.0
Europe 13.2
Latin America 10.5
Emerging Europe 1.3
Portfolio holdings and allocations are subject to change. Percentages are as of
February 29, 2008, and are based on the total market value of investments.
13 | OPPENHEIMER INTERNATIONAL SMALL COMPANY 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.
The Fund's investment strategy and focus can change over time. The mention
of specific fund holdings does not constitute a recommendation by
OppenheimerFunds, Inc.
CLASS A shares of the Fund were first publicly offered on 11/17/97. Unless
otherwise noted, Class A returns include the maximum initial sales charge
of 5.75%.
CLASS B shares of the Fund were first publicly offered on 11/17/97. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert
to Class A shares 72 months after purchase, the 10-year return for Class B
uses Class A performance for the period after conversion. Class B shares
are subject to a 0.75% annual asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 11/17/97. Unless
otherwise noted, Class C returns include the contingent deferred sales
charge of 1% for the 1-year period. Class C shares are subject to a 0.75%
annual asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N
shares are offered only through retirement plans. Unless otherwise noted,
Class N returns include the contingent deferred sales charge of 1% for the
1-year period. Class N shares are subject to an annual 0.25% asset-based
sales charge.
CLASS Y shares of the Fund were first publicly offered on 9/7/05. Class Y
shares are offered only to certain institutional investors under special
agreements with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement
of Additional Information.
14 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
FUND EXPENSES
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FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, which may include sales charges (loads) on purchase
payments, contingent deferred sales charges on redemptions; and redemption
fees (if applicable); and (2) ongoing costs, including management fees;
distribution and service fees; and other Fund expenses. These examples are
intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the
beginning of the period and held for the entire 6-month period ended
February 29, 2008.
ACTUAL EXPENSES. The first section of the table provides information about
actual account values and actual expenses. You may use the information in
this section for the class of shares you hold, together with the amount you
invested, to estimate the expense that you paid over the period. Simply
divide your account value by $1,000.00 (for example, an $8,600.00 account
value divided by $1,000.00 = 8.60), then multiply the result by the number
in the first section under the heading entitled "Expenses Paid During
Period" to estimate the expenses you paid on your account during this
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The second section of the
table provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio for each
class of shares, and an assumed rate of return of 5% per year for each
class before expenses, which is not the actual return. The hypothetical
account values and expenses may not be used to estimate the actual ending
account balance or expenses you paid for the period. You may use this
information to compare the ongoing costs of investing in the Fund and other
funds. To do so, compare this 5% hypothetical example for the class of
shares you hold with the 5% hypothetical examples that appear in the
shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs, such as
front-end or contingent deferred sales charges (loads), redemption fees, or
a $12.00 fee imposed annually on accounts valued at less than $500.00
(subject to exceptions
15 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
FUND EXPENSES Continued
- --------------------------------------------------------------------------------
described in the Statement of Additional Information). Therefore, the
"hypothetical" section of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included,
your costs would have been higher.
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
ACTUAL SEPTEMBER 1, 2007 FEBRUARY 29, 2008 FEBRUARY 29, 2008
- --------------------------------------------------------------------------------------------
Class A $1,000.00 $ 986.10 $5.60
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Class B 1,000.00 982.20 9.71
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Class C 1,000.00 982.20 9.41
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Class N 1,000.00 984.40 7.43
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Class Y 1,000.00 987.50 4.01
HYPOTHETICAL
(5% return before expenses)
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Class A 1,000.00 1,019.24 5.69
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Class B 1,000.00 1,015.12 9.87
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Class C 1,000.00 1,015.42 9.57
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Class N 1,000.00 1,017.40 7.55
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Class Y 1,000.00 1,020.84 4.08
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 182/366
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended February 29, 2008 are as follows:
CLASS EXPENSE RATIOS
- ----------------------------
Class A 1.13%
- ----------------------------
Class B 1.96
- ----------------------------
Class C 1.90
- ----------------------------
Class N 1.50
- ----------------------------
Class Y 0.81
The expense ratios reflect reduction to custodian expenses and voluntary waivers
or reimbursements of expenses by the Fund's Manager that can be terminated at
any time, without advance notice. The "Financial Highlights" tables in the
Fund's financial statements, included in this report, also show the gross
expense ratios, without such waivers or reimbursements and reduction to
custodian expenses, if applicable.
16 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
STATEMENT OF INVESTMENTS February 29, 2008/Unaudited
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SHARES VALUE
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COMMON STOCKS--99.1%
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CONSUMER DISCRETIONARY--6.1%
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AUTO COMPONENTS--1.4%
Azure
Dynamics Corp. 1,2,3 21,000,000 $ 8,107,696
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Westport
Innovations, Inc. 1,3 2,225,000 7,233,934
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Westport
Innovations, Inc. 1,3 6,775,000 22,026,924
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37,368,554
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DIVERSIFIED CONSUMER SERVICES--0.2%
Shinwa Art
Auction Co. Ltd. 3 5,000 5,730,059
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HOUSEHOLD DURABLES--1.5%
Gafisa SA 2,000,000 39,181,598
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MEDIA--2.3%
Deccan Chronicle
Holdings Ltd. 1,780,500 7,443,816
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Immersive
Media Corp. 1,3 1,900,000 2,470,917
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PVR Ltd. 3 1,983,100 13,678,019
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Village
Roadshow Ltd. 5,000,000 12,939,216
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Village Roadshow Ltd.,
Cl. A, Preference 5,000,000 12,575,921
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Xinhua
Finance Ltd. 1,3 35,000 4,482,550
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Xinhua Finance Ltd.,
Sponsored ADR 1,3 4,000,000 5,200,000
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58,790,439
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MULTILINE RETAIL--0.7%
Robinson Department
Store Public Co. Ltd. 50,000,000 17,791,898
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CONSUMER STAPLES--4.8%
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BEVERAGES--1.5%
United Breweries
Ltd. 6,000,000 38,029,495
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FOOD & STAPLES RETAILING--0.9%
Wumart Stores, Inc. 3 30,000,000 23,704,607
SHARES VALUE
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FOOD PRODUCTS--2.4%
Black Earth
Farming Ltd., SDR 1 1,500,000 $17,636,756
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China Green
(Holdings) Ltd. 15,000,000 17,200,774
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China Vanguard
Group Ltd. 1,3 65,000,000 15,936,952
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Crown
Confectionery
Co. Ltd. 3 104,408 11,215,955
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61,990,437
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ENERGY--21.5%
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ENERGY EQUIPMENT & SERVICES--1.8%
Sikanni
Services Ltd. 1,3,4 10,000,000 2,032,004
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Trican Well
Service Ltd. 2,500,000 43,713,487
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45,745,491
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OIL, GAS & CONSUMABLE FUELS--19.7%
Addax
Petroleum Corp. 4 1,500,000 68,580,138
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Calvalley
Petroleum, Inc.,
Cl. A 1,3 8,000,000 40,558,801
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Canoro
Resources Ltd. 1,3 1,800,000 3,072,390
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Canoro
Resources Ltd. 1,3 7,200,000 12,289,561
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CGX Energy, Inc. 1 100,000 321,057
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CGX Energy, Inc. 1 4,400,000 13,220,787
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Corridor
Resources, Inc. 1 2,500,000 16,002,032
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Culane
Energy Corp. 1,3 1,660,000 12,058,928
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DNO
International ASA 1 30,000,000 38,771,202
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Gulf Keystone
Petroleum Ltd. 1,3 21,500,000 12,969,251
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Heritage Oil Corp. 1 350,000 16,891,034
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Max Petroleum plc 1 9,000,000 12,160,712
17 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
STATEMENT OF INVESTMENTS Unaudited/Continued
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SHARES VALUE
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OIL, GAS & CONSUMABLE FUELS Continued
Nido
Petroleum Ltd. 1,3 71,000,000 $ 20,503,409
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Pacific Rubiales
Energy Corp. 1 15,000,559 20,574,808
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Pacific Rubiales
Energy Corp. 1,2 38,999,441 53,491,740
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Pan Orient
Energy Corp. 1 725,000 9,789,434
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Pan Orient
Energy Corp. 1 775,000 9,514,580
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Petrolifera
Petroleum Ltd. 1,3 4,500,000 57,150,114
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Sibir Energy plc 1,000,000 10,769,781
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Straits Asia
Resources Ltd. 15,000,000 40,993,616
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Western Prospector
Group Ltd. 1,3 4,000,000 3,860,808
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WesternZagros
Resources Ltd. 1,3 13,000,000 38,963,678
--------------
512,507,861
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FINANCIALS--16.2%
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CAPITAL MARKETS--2.8%
RISA Partners, Inc. 3 19,000 37,152,147
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Uranium
Participation Corp. 1 3,000,000 35,204,470
--------------
72,356,617
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COMMERCIAL BANKS--4.9%
Banco Sofisa SA 4,000,000 26,728,165
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Development Credit
Bank Ltd. 1 7,000,000 19,085,176
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Federal Bank Ltd. 1,500,000 10,985,439
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Karnataka Bank Ltd. 6,000,000 38,873,808
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Vozrozhdenie Bank 2 500,000 33,000,000
--------------
128,672,588
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DIVERSIFIED FINANCIAL SERVICES--2.3%
Arques
Industries AG 3 2,000,000 41,943,310
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Fidec Corp. 3 14,000 12,487,158
SHARES VALUE
- -------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL Continued
World Energy
Solutions, Inc. 1,3 6,000,000 $ 4,572,009
--------------
59,002,477
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REAL ESTATE MANAGEMENT & DEVELOPMENT--6.2%
Funai Zaisan
Consultants Co.
Ltd. 3 10,000 17,898,241
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Ishaan Real
Estate plc 1 10,000,000 22,155,745
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Kenedix, Inc. 3 40,000 52,626,482
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Klabin Segall SA 3,000,000 19,336,527
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Shenzhen
Investment Ltd. 70,000,000 37,338,131
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SURUGA Corp. 1,000,000 11,206,687
--------------
160,561,813
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HEALTH CARE--0.8%
- -------------------------------------------------------------------------------------------------
BIOTECHNOLOGY--0.1%
Norwood
Immunology Ltd. 1,2,3 14,500,000 1,296,547
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HEALTH CARE PROVIDERS & SERVICES--0.7%
Apollo Hospitals
Enterprise Ltd. 1,500,000 18,374,891
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INDUSTRIALS--4.6%
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AEROSPACE & DEFENSE--0.0%
Atlantis
Systems Corp. 1 1,200,000 195,072
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COMMERCIAL SERVICES & SUPPLIES--2.0%
Wirecard AG 1 3,000,000 51,040,093
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CONSTRUCTION & ENGINEERING--1.5%
Nagarjuna
Construction Co.
Ltd. 5,517,401 36,868,743
- -------------------------------------------------------------------------------------------------
PYI Corp. Ltd. 8,046,000 2,530,679
--------------
39,399,422
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INDUSTRIAL CONGLOMERATES--1.0%
Beijing Enterprises
Holdings Ltd. 6,306,000 26,168,736
- -------------------------------------------------------------------------------------------------
MACHINERY--0.1%
Fong's
Industries Co. Ltd. 6,186,000 3,656,921
18 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
SHARES VALUE
- -----------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--12.7%
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INTERNET SOFTWARE & SERVICES--5.7%
Danal Co. Ltd. 1,3 2,028,826 $ 8,703,224
- -----------------------------------------------------------------------------------------------
Kaboose, Inc. 1,3 8,000,000 18,206,756
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Kaboose, Inc. 1,3 1,000,000 2,275,845
- -----------------------------------------------------------------------------------------------
Macromill, Inc. 3 10,000 15,129,769
- -----------------------------------------------------------------------------------------------
mixi, Inc. 1 3,000 34,845,862
- -----------------------------------------------------------------------------------------------
Opera
Software ASA 1,3 18,000,000 46,167,110
- -----------------------------------------------------------------------------------------------
SK Communications
Co. Ltd. 1 262,500 5,311,389
- -----------------------------------------------------------------------------------------------
Stockgroup
Information
Systems, Inc. 1,2,3 3,000,000 1,188,722
- -----------------------------------------------------------------------------------------------
XING AG 1 250,375 15,407,052
--------------
147,235,729
- -----------------------------------------------------------------------------------------------
IT SERVICES--1.9%
Travelsky
Technology Ltd.,
Cl. H 3 60,000,000 50,182,224
- -----------------------------------------------------------------------------------------------
SOFTWARE--5.1%
Absolute
Software Corp. 1,3 3,665,200 46,734,326
- -----------------------------------------------------------------------------------------------
Duzon Digital
Ware Co. Ltd. 3 964,156 11,474,148
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Enablence
Technologies, Inc. 1,3 12,000,000 37,063,754
- -----------------------------------------------------------------------------------------------
Tanla Solutions Ltd. 2,000,000 32,751,083
- -----------------------------------------------------------------------------------------------
Zaio Corp. 1,3 2,000,000 3,454,407
- -----------------------------------------------------------------------------------------------
Zaio Corp. 1,3,4 1,000,000 1,727,203
--------------
133,204,921
- -----------------------------------------------------------------------------------------------
MATERIALS--28.3%
- -----------------------------------------------------------------------------------------------
CHEMICALS--1.0%
Hanfeng
Evergreen, Inc. 1 2,159,500 26,482,261
- -----------------------------------------------------------------------------------------------
CONSTRUCTION MATERIALS--1.4%
India Cements Ltd. 7,000,000 35,910,138
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METALS & MINING--25.9%
Anvil Mining Ltd. 1,3 4,500,000 61,630,683
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Avoca
Resources Ltd. 1 8,000,000 17,031,978
SHARES VALUE
- -----------------------------------------------------------------------------------------------
METALS & MINING Continued
Central African
Mining &
Exploration Co. plc 1,3 65,000,000 $ 69,422,366
- -----------------------------------------------------------------------------------------------
First Quantum
Minerals Ltd. 600,000 55,668,783
- -----------------------------------------------------------------------------------------------
Forsys Metals Corp. 1 3,000,000 10,149,860
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HudBay
Minerals, Inc. 1 3,500,000 66,852,934
- -----------------------------------------------------------------------------------------------
Ivernia, Inc. 1,3 10,800,000 18,653,797
- -----------------------------------------------------------------------------------------------
Ivernia, Inc. 1,2,3 3,200,000 5,527,051
- -----------------------------------------------------------------------------------------------
Kagara Zinc Ltd. 2,000,000 9,512,630
- -----------------------------------------------------------------------------------------------
Katanga
Mining Ltd. 1 2,500,000 43,180,086
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Lundin
Mining Corp. 1 7,000,000 59,812,040
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Minara
Resources Ltd. 8,000,000 47,334,173
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Mincor
Resources NL 6,500,000 19,895,584
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Mirabela
Nickel Ltd. 1 2,000,000 11,277,623
- -----------------------------------------------------------------------------------------------
Mitsui
Mining Co. Ltd. 1 10,000,000 34,969,090
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Moly Mines Ltd. 1,3 5,000,000 13,919,228
- -----------------------------------------------------------------------------------------------
Olympus Pacific
Minerals, Inc. 1,3 13,000,000 5,547,371
- -----------------------------------------------------------------------------------------------
Sally Malay
Mining Ltd. 5,000,000 22,654,987
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Sino Gold
Mining Ltd. 1 7,000,000 49,079,841
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Thompson Creek
Metals Co. 1 2,500,000 51,054,102
--------------
673,174,207
- -----------------------------------------------------------------------------------------------
UTILITIES--4.1%
- -----------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.4%
EOS Russia AB 1 800,000 12,104,787
- -----------------------------------------------------------------------------------------------
GAS UTILITIES--3.2%
Xinao Gas
Holdings Ltd. 45,000,000 82,917,021
19 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
STATEMENT OF INVESTMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------------------------------------------
WATER UTILITIES--0.5%
China Water
Affairs Group Ltd. 1 33,648,000 $ 12,799,574
----------------
Total Common Stocks
(Cost $2,283,283,907) 2,575,576,478
UNITS
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- ------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.3%
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China Vanguard
Group Ltd. Wts.,
Exp 11/2/08 1,3 22,000,000 316,657
- ------------------------------------------------------------------------------------------------------
Pacific Rubiales
Energy Corp. Wts.,
Exp 7/12/12 1,2 11,999,720 7,071,209
UNITS VALUE
- ------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES Continued
Sikanni Services Ltd.
Wts., Exp 9/30/08 1,3 5,000,000 $ --
----------------
Total Rights, Warrants and Certificates
(Cost $1,808,930) 7,387,866
- ------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $2,285,092,837) 99.4% 2,582,964,344
- ------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.6 14,400,748
------------------------------------
NET ASSETS 100.0% $2,597,365,092
====================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. Illiquid security. The aggregate value of illiquid securities as of February
29, 2008 was $109,682,965, which represents 4.22% of the Fund's net assets. See
Note 6 of accompanying Notes.
3. Is or was an affiliate, as defined in the Investment Company Act of 1940, at
or during the period ended February 29, 2008, by virtue of the Fund owning at
least 5% of the voting securities of the issuer or as a result of the Fund and
the issuer having the same investment adviser. Transactions during the period in
which the issuer was an affiliate are as follows:
SHARES/UNITS GROSS GROSS SHARES/UNITS
AUGUST 31, 2007 ADDITIONS REDUCTIONS FEB. 29, 2008
- ----------------------------------------------------------------------------------------------------------
Absolute Software Corp. 2,000,000 2,000,000 b 334,800 3,665,200
Anvil Mining Ltd. 4,000,000 500,000 -- 4,500,000
Arques Industries AG 1,750,000 250,000 -- 2,000,000
Azure Dynamics Corp. 21,000,000 -- -- 21,000,000
Calvalley Petroleum, Inc., Cl. A 8,000,000 -- -- 8,000,000
Canoro Resources Ltd. -- 1,800,000 -- 1,800,000
Canoro Resources Ltd. -- 7,200,000 -- 7,200,000
Central African Mining & Exploration Co. plc 60,000,000 5,000,000 -- 65,000,000
China Vanguard Group Ltd. 165,000,000 -- -- 165,000,000
China Vanguard Group Ltd. Wts. 22,000,000 -- -- 22,000,000
Crown Confectionary Co. Ltd. 110,000 -- 5,592 104,408
Culane Energy Corp. 2,000,000 -- 340,000 1,660,000
Danal Co. Ltd. 2,300,000 -- 271,174 2,028,826
Duzon Digital Ware Co. Ltd. 1,200,000 -- 235,844 964,156
Enablence Technologies, Inc. -- 12,000,000 -- 12,000,000
Fidec Corp. 11,000 3,000 -- 14,000
Funai Zaisan Consultants Co. Ltd. 5,000 5,000 b -- 10,000
Gulf Keystone Petroleum Ltd. 21,500,000 -- -- 21,500,000
Imaging Dynamics Co. Ltd. 2,000,000 -- 2,000,000 --
Imaging Dynamics Co. Ltd. 4,000,000 -- 4,000,000 --
Immersive Media Corp. 2,000,000 -- 100,000 1,900,000
Ivernia, Inc. 9,050,000 1,750,000 -- 10,800,000
20 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
SHARES/UNITS GROSS GROSS SHARES/UNITS
AUGUST 31, 2007 ADDITIONS REDUCTIONS FEB. 29, 2008
- -----------------------------------------------------------------------------------------------------------------
Ivernia, Inc. 3,200,000 -- -- 3,200,000
Kaboose, Inc. 8,000,000 -- -- 8,000,000
Kaboose, Inc. 1,000,000 -- -- 1,000,000
Kenedix, Inc. 38,000 2,000 -- 40,000
Klabin Segall SA a 3,000,000 -- -- 3,000,000
Macromill, Inc. 8,000 2,000 -- 10,000
Mobilians Co. Ltd. 1,554,094 -- 1,554,094 --
Moly Mines Ltd. 5,000,000 -- -- 5,000,000
Nido Petroleum Ltd. -- 71,000,000 -- 71,000,000
Norwood Immunology Ltd. 14,500,000 -- -- 14,500,000
Olympus Pacific Minerals, Inc. 13,000,000 -- -- 13,000,000
Opera Software ASA 18,000,000 -- -- 18,000,000
Oppenheimer Institutional
Money Market Fund, Cl. E 27,040,128 563,019,041 590,059,169 --
Pacific Rubiales Energy Corp.
(formerly Petro Rubiales Energy Corp.) a 5,000,559 10,000,000 -- 15,000,559
Pacific Rubiales Energy Corp.
(formerly Petro Rubiales Energy Corp.) a 38,999,441 -- -- 38,999,441
Pacific Rubiales Energy Corp. Wts., Exp. 7/12/12
(formerly Petro Rubiales Energy Corp.) a 11,999,720 -- -- 11,999,720
Petrolifera Petroleum Ltd. 3,000,000 1,500,000 -- 4,500,000
PVR Ltd. 2,000,000 -- 16,900 1,983,100
RISA Partners, Inc. 18,000 1,000 -- 19,000
Shinwa Art Auction Co. Ltd 5,000 -- -- 5,000
Sikanni Services Ltd. 10,000,000 -- -- 10,000,000
Sikanni Services Ltd. Wts., Exp. 9/30/08 5,000,000 -- -- 5,000,000
SK Communications Co. Ltd.
(formerly Empas Corp.) a 1,250,000 250,000 1,237,500 262,500
Stockgroup Information Systems, Inc. 3,000,000 -- -- 3,000,000
Travelsky Technology Ltd., Cl. H 60,000,000 -- -- 60,000,000
Uranium Participation Corp. a -- 5,000,000 2,000,000 3,000,000
Western Prospector Group Ltd. 2,500,000 1,500,000 -- 4,000,000
WesternZagros Resources Ltd. -- 13,000,000 -- 13,000,000
Westport Innovations, Inc. 1,784,800 440,200 -- 2,225,000
Westport Innovations, Inc. 6,775,000 -- -- 6,775,000
World Energy Solutions, Inc. 6,000,000 -- -- 6,000,000
Wumart Stores, Inc. 24,000,000 6,000,000 -- 30,000,000
Xinhua Finance Ltd. 35,000 -- -- 35,000
Xinhua Finance Ltd., Sponsored ADR 4,000,000 -- -- 4,000,000
Zaio Corp. 1,526,400 473,600 -- 2,000,000
Zaio Corp. 1,000,000 -- -- 1,000,000
DIVIDEND REALIZED
VALUE INCOME GAIN (LOSS)
- -----------------------------------------------------------------------------------------------------------------
Absolute Software Corp. $ 46,734,326 $ -- $ 2,364,413
Anvil Mining Ltd. 61,630,683 -- --
Arques Industries AG 41,943,310 -- --
Azure Dynamics Corp. 8,107,696 -- --
Calvalley Petroleum, Inc., Cl. A 40,558,801 -- --
21 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
STATEMENT OF INVESTMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
DIVIDEND REALIZED
VALUE INCOME GAIN (LOSS)
- -----------------------------------------------------------------------------------------------------------------------------------
Canoro Resources Ltd. $ 3,072,390 $ -- $ --
Canoro Resources Ltd. 12,289,561 -- --
Central African Mining & Exploration Co. plc 69,422,366 -- --
China Vanguard Group Ltd. 15,936,952 -- --
China Vanguard Group Ltd. Wts 316,657 -- --
Crown Confectionary Co. Ltd. 11,215,955 -- (211,779)
Culane Energy Corp. 12,058,928 -- (720,647)
Danal Co. Ltd. 8,703,224 -- (2,793,728)
Duzon Digital Ware Co. Ltd. 11,474,148 340,167 1,571,295
Enablence Technologies, Inc. 37,063,754 -- --
Fidec Corp. 12,487,158 -- --
Funai Zaisan Consultants Co. Ltd. 17,898,241 61,008 --
Gulf Keystone Petroleum Ltd. 12,969,251 -- --
Imaging Dynamics Co. Ltd. -- -- (2,150,939)
Imaging Dynamics Co. Ltd. -- -- (5,728,588)
Immersive Media Corp. 2,470,917 -- (323,111)
Ivernia, Inc. 18,653,797 -- --
Ivernia, Inc. 5,527,051 -- --
Kaboose, Inc. 18,206,756 -- --
Kaboose, Inc. 2,275,845 -- --
Kenedix, Inc. 52,626,482 777,313 --
Klabin Segall SA a -- c -- --
Macromill, Inc. 15,129,769 97,612 --
Mobilians Co. Ltd. -- -- (4,141,437)
Moly Mines Ltd. 13,919,228 -- --
Nido Petroleum Ltd. 20,503,409 -- --
Norwood Immunology Ltd. 1,296,547 -- --
Olympus Pacific Minerals, Inc. 5,547,371 -- --
Opera Software ASA 46,167,110 -- --
Oppenheimer Institutional Money Market Fund, Cl. E -- 1,384,121 --
Pacific Rubiales Energy Corp. (formerly Petro Rubiales Energy Corp.) a -- c -- --
Pacific Rubiales Energy Corp. (formerly Petro Rubiales Energy Corp.) a -- c -- --
Pacific Rubiales Energy Corp. Wts., Exp. 7/12/12
(formerly Petro Rubiales Energy Corp.) a -- c -- --
Petrolifera Petroleum Ltd. 57,150,114 -- --
PVR Ltd. 13,678,019 -- 24,651
RISA Partners, Inc. 37,152,147 286,014 --
Shinwa Art Auction Co. Ltd 5,730,059 -- --
Sikanni Services Ltd. 2,032,004 -- --
Sikanni Services Ltd. Wts., Exp. 9/30/08 -- -- --
SK Communications Co. Ltd. (formerly Empas Corp.) a -- c -- (3,924,812)
Stockgroup Information Systems, Inc. 1,188,722 -- --
Travelsky Technology Ltd., Cl. H 50,182,224 -- --
Uranium Participation Corp. a -- c -- (8,143,855)
Western Prospector Group Ltd. 3,860,808 -- --
WesternZagros Resources Ltd. 38,963,678 -- --
Westport Innovations, Inc. 7,233,934 -- --
Westport Innovations, Inc. 22,026,924 -- --
22 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
DIVIDEND REALIZED
VALUE INCOME GAIN (LOSS)
- ---------------------------------------------------------------------------------------------------------------------------------
World Energy Solutions, Inc. $ 4,572,009 $ -- $ --
Wumart Stores, Inc. 23,704,607 -- --
Xinhua Finance Ltd. 4,482,550 -- --
Xinhua Finance Ltd., Sponsored ADR 5,200,000 -- --
Zaio Corp. 3,454,407 -- --
Zaio Corp. 1,727,203 -- --
---------------------------------------------
$908,547,092 $2,946,235 $(24,178,537)
=============================================
a. No longer an affiliate as of February 29, 2008.
b. All or a portion is the result of a corporate action.
c. The security is no longer an affiliate, therefore, the value has been
excluded from this table.
4. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $72,339,345 or 2.79% of the Fund's net
assets as of February 29, 2008.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY EXCHANGE CONTRACTS AS OF FEBRUARY 29, 2008 ARE AS FOLLOWS:
- --------------------------------------------------------------------------------
CONTRACT AMOUNT TERMINATION UNREALIZED UNREALIZED
CONTRACT DESCRIPTION BUY/SELL (000s) DATE VALUE APPRECIATION DEPRECIATION
- ----------------------------------------------------------------------------------------------------------------------------------
Canadian Dollar (CAD) Buy 681 CAD 3/3/08 $ 691,407 $ -- $ 4,702
Hong Kong Dollar (HKD) Buy 14,125 HKD 3/3/08 1,815,377 390 --
Hong Kong Dollar (HKD) Sell 35,587 HKD 3/3/08 4,573,578 -- 983
---------------------
Total unrealized appreciation and depreciation $ 390 $ 5,685
=====================
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC HOLDINGS, AS A PERCENTAGE OF
TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC HOLDINGS VALUE PERCENT
- ----------------------------------------------------------------------------------
Canada $ 980,997,507 38.0%
India 252,000,608 9.7
Australia 236,724,590 9.2
Japan 231,728,045 9.0
United Kingdom 128,774,402 5.0
Cayman Islands 111,275,417 4.3
Germany 108,390,455 4.2
Brazil 85,246,290 3.3
Norway 84,938,312 3.3
Bermuda 75,711,113 2.9
China 73,886,831 2.8
Hong Kong 67,163,788 2.6
Singapore 40,993,616 1.6
Korea, Republic of South 36,704,716 1.4
Russia 33,000,000 1.3
Thailand 17,791,898 0.7
Sweden 17,636,756 0.7
-----------------------------
Total $2,582,964,344 100.0%
=============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
February 29, 2008
- ----------------------------------------------------------------------------------------------------------
ASSETS
- ----------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $1,290,884,246) $ 1,674,417,252
Affiliated companies (cost $994,208,591) 908,547,092
-----------------
2,582,964,344
- ----------------------------------------------------------------------------------------------------------
Cash 159,610
- ----------------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $1,868,261) 1,868,261
- ----------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency exchange contracts 390
- ----------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 18,177,049
Dividends 2,764,030
Shares of beneficial interest sold 2,082,212
Other 229,664
-----------------
Total assets 2,608,245,560
- ----------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency exchange contracts 5,685
- ----------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 5,701,317
Investments purchased 2,506,759
Foreign capital gains tax 884,226
Distribution and service plan fees 876,520
Transfer and shareholder servicing agent fees 247,658
Trustees' compensation 182,790
Shareholder communications 87,835
Other 387,678
-----------------
Total liabilities 10,880,468
- ----------------------------------------------------------------------------------------------------------
NET ASSETS $ 2,597,365,092
=================
- ----------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ----------------------------------------------------------------------------------------------------------
Paid-in capital $ 2,327,174,835
- ----------------------------------------------------------------------------------------------------------
Accumulated net investment loss (81,757,479)
- ----------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 54,830,367
- ----------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 297,117,369
-----------------
NET ASSETS $ 2,597,365,092
=================
24 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ----------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $1,637,466,289 and 65,904,946 shares of beneficial interest outstanding) $ 24.85
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $ 26.37
- ----------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $119,076,750
and 4,986,355 shares of beneficial interest outstanding) $ 23.88
- ----------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $302,468,966
and 12,692,330 shares of beneficial interest outstanding) $ 23.83
- ----------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $79,892,446
and 3,312,578 shares of beneficial interest outstanding) $ 24.12
- ----------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $ 458,460,641 and 18,484,679 shares of beneficial interest outstanding) $ 24.80
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended February 29, 2008
- -------------------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $86,118) $ 5,673,678
Affiliated companies (net of foreign withholding taxes of $159,193) 2,946,235
- -------------------------------------------------------------------------------------------
Interest 13,209
- -------------------------------------------------------------------------------------------
Other income 11,663
---------------
Total investment income 8,644,785
- -------------------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------------------
Management fees 10,489,526
- -------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 2,339,429
Class B 689,917
Class C 1,755,228
Class N 214,750
- -------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,077,418
Class B 121,146
Class C 214,681
Class N 99,932
Class Y 93,538
- -------------------------------------------------------------------------------------------
Shareholder communications:
Class A 59,398
Class B 13,134
Class C 12,211
Class N 1,456
Class Y 7,492
- -------------------------------------------------------------------------------------------
Custodian fees and expenses 570,060
- -------------------------------------------------------------------------------------------
Trustees' compensation 31,693
- -------------------------------------------------------------------------------------------
Other 191,059
---------------
Total expenses 17,982,068
Less reduction to custodian expenses (8,139)
Less waivers and reimbursements of expenses (26,994)
---------------
Net expenses 17,946,935
- -------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (9,302,150)
26 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
- -------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments:
Unaffiliated companies 170,006,143
Affiliated companies (24,178,537)
Foreign currency transactions 56,953,290
---------------
Net realized gain 202,780,896
- -------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (340,323,794)
Translation of assets and liabilities denominated in foreign currencies 101,480,540
---------------
Net change in unrealized appreciation (238,843,254)
- -------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (45,364,508)
===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
FEBRUARY 29, 2008 AUGUST 31,
(UNAUDITED) 2007
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment loss $ (9,302,150) $ (2,370,704)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain 202,780,896 410,180,930
- ---------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (238,843,254) 188,155,854
-------------------------------------
Net increase (decrease) in net assets resulting from operations (45,364,508) 595,966,080
- ---------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (71,308,514) (9,069,418)
Class B (2,799,825) --
Class C (8,197,783) --
Class N (2,814,556) (181,028)
Class Y (21,047,428) (1,395,280)
-------------------------------------
(106,168,106) (10,645,726)
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (282,671,815) (26,758,605)
Class B (20,893,251) (2,532,828)
Class C (53,910,922) (5,166,398)
Class N (12,987,399) (1,049,876)
Class Y (68,733,268) (2,618,553)
-------------------------------------
(439,196,655) (38,126,260)
- ---------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Class A 83,490,901 212,151,777
Class B 2,055,747 (17,884,834)
Class C 17,223,546 38,773,724
Class N 15,881,854 15,778,066
Class Y 165,756,196 261,996,860
-------------------------------------
284,408,244 510,815,593
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) (306,321,025) 1,058,009,687
- ---------------------------------------------------------------------------------------------------------------------------------
Beginning of period 2,903,686,117 1,845,676,430
-------------------------------------
End of period (including accumulated net investment income (loss) of
$(81,757,479) and $33,712,777, respectively) $ 2,597,365,092 $ 2,903,686,117
=====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
FEBRUARY 29, 2008 YEAR ENDED AUGUST 31,
CLASS A (UNAUDITED) 2007 2006 2005 2004 2003
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 30.52 $ 23.40 $ 19.48 $ 14.14 $ 10.51 $ 7.98
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) (.08) 1 .01 1 (.05) 1 (.02) 1 (.04) .01
Net realized and unrealized gain .08 7.75 6.15 5.78 3.73 2.52
----------------------------------------------------------------------------------------
Total from investment operations .00 7.76 6.10 5.76 3.69 2.53
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (1.06) (.16) -- (.11) (.06) --
Distributions from net realized gain (4.61) (.48) (2.18) (.31) -- --
----------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (5.67) (.64) (2.18) (.42) (.06) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.85 $ 30.52 $ 23.40 $ 19.48 $ 14.14 $ 10.51
========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (1.39)% 33.56% 33.49% 41.35% 35.20% 31.70%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in
thousands) $ 1,637,466 $ 1,931,669 $ 1,330,251 $ 552,861 $ 204,938 $ 132,342
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,924,622 $ 1,702,152 $ 1,098,056 $ 353,479 $ 207,202 $ 48,879
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.54)% 0.03% (0.24)% (0.12)% (0.26) % 0.29%
Total expenses 1.13% 4 1.13% 4 1.20% 1.31% 1.34% 1.69%
Expenses after payments, waivers
and/or reimbursements and reduction
to custodian expenses 1.13% 1.13% 1.20% 1.31% 1.34% 1.60%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 57% 35% 51% 124% 53%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended February 29, 2008 1.13%
Year Ended August 31, 2007 1.13%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
FEBRUARY 29, 2008 YEAR ENDED AUGUST 31,
CLASS B (UNAUDITED) 2007 2006 2005 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.16 $ 22.43 $ 18.91 $ 13.77 $ 10.28 $ 7.87
- ---------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.19) 1 (.22) 1 (.24) 1 (.17) 1 (.13) (.02)
Net realized and unrealized gain .07 7.43 5.94 5.62 3.62 2.43
-------------------------------------------------------------------------
Total from investment operations (.12) 7.21 5.70 5.45 3.49 2.41
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.55) -- -- -- -- --
Distributions from net realized gain (4.61) (.48) (2.18) (.31) -- --
-------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (5.16) (.48) (2.18) (.31) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 23.88 $ 29.16 $ 22.43 $ 18.91 $ 13.77 $ 10.28
=========================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (1.78)% 32.43% 32.29% 40.07% 33.95% 30.62%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 119,077 $ 142,120 $ 124,505 $ 78,469 $ 43,478 $ 23,355
- ---------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 138,777 $ 142,384 $ 114,900 $ 60,395 $ 37,393 $ 16,884
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.36)% (0.81)% (1.11)% (1.02)% (1.14)% (0.28)%
Total expenses 1.96% 4 1.97% 4 2.09% 2.23% 2.35% 2.85%
Expenses after payments, waivers
and/or reimbursements and reduction
to custodian expenses 1.96% 1.97% 2.09% 2.23% 2.31% 2.38%
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 57% 35% 51% 124% 53%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day
before the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods less than one full year. Returns do not reflect the deduction of
taxes that a shareholder would pay on fund distributions or the redemption of
fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended February 29, 2008 1.96%
Year Ended August 31, 2007 1.97%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
SIX MONTHS
ENDED
FEBRUARY 29, 2008 YEAR ENDED AUGUST 31,
CLASS C (UNAUDITED) 2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.19 $ 22.44 $ 18.90 $ 13.76 $ 10.27 $ 7.86
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.18) 1 (.20) 1 (.23) 1 (.16) 1 (.09) (.02)
Net realized and unrealized gain .06 7.43 5.95 5.63 3.59 2.43
------------------------------------------------------------------------------
Total from investment operations (.12) 7.23 5.72 5.47 3.50 2.41
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions
to shareholders:
Dividends from net investment income (.63) -- -- (.02) (.01) --
Distributions from net realized gain (4.61) (.48) (2.18) (.31) -- --
------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (5.24) (.48) (2.18) (.33) (.01) --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 23.83 $ 29.19 $ 22.44 $ 18.90 $ 13.76 $ 10.27
==============================================================================
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (1.78)% 32.50% 32.42% 40.23% 34.05% 30.66%
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 302,469 $ 352,532 $ 242,408 $ 86,184 $ 32,401 $ 12,793
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 352,073 $ 312,797 $ 184,832 $ 55,819 $ 26,486 $ 7,489
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment loss (1.31)% (0.75)% (1.06)% (0.96)% (1.00)% (0.38)%
Total expenses 1.90% 4 1.91% 4 2.01% 2.14% 2.19% 2.69%
Expenses after payments,
waivers and/or reimbursements
and reduction to custodian expenses 1.90% 1.91% 2.01% 2.14% 2.19% 2.39%
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 57% 35% 51% 124% 53%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended February 29, 2008 1.90%
Year Ended August 31, 2007 1.91%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED
FEBRUARY 29, 2008 YEAR ENDED AUGUST 31,
CLASS N (UNAUDITED) 2007 2006 2005 2004 2003
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.67 $ 22.79 $ 19.08 $ 13.90 $ 10.35 $ 7.89
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.13) 1 (.10) 1 (.14) 1 (.09) 1 (.05) (.03)
Net realized and unrealized gain .08 7.54 6.03 5.67 3.64 2.49
------------------------------------------------------------------------
Total from investment operations (.05) 7.44 5.89 5.58 3.59 2.46
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.89) (.08) -- (.09) (.04) --
Distributions from net realized gain (4.61) (.48) (2.18) (.31) -- --
------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (5.50) (.56) 2.18) (.40) (.04) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.12 $ 29.67 $ 22.79 $ 19.08 $ 13.90 $ 10.35
========================================================================
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 (1.56)% 32.99% 33.06% 40.76% 34.70% 31.18%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 79,892 $ 81,367 $ 51,761 $ 16,673 $ 4,101 $ 1,128
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 86,192 $ 66,982 $ 38,262 $ 9,698 $ 2,531 $ 625
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.92)% (0.36)% (0.63)% (0.51)% (0.50)% 0.25%
Total expenses 1.50% 4 1.52% 4 1.57% 1.75% 1.78% 1.96%
Expenses after payments, waivers and/or
reimbursements and reduction to custodian
expenses 1.50% 1.52% 1.57% 1.68% 1.75% 1.90%
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 57% 35% 51% 124% 53%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3. Annualized for periods less than one full year.
4. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended February 29, 2008 1.50%
Year Ended August 31, 2007 1.52%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
SIX MONTHS
ENDED
FEBRUARY 29, 2008 YEAR ENDED AUGUST 31,
CLASS Y (UNAUDITED) 2007 2006 1
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 30.61 $ 23.47 $ 19.97
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 2 (.03) .11 .01
Net realized and unrealized gain .08 7.76 5.67
----------------------------------------------------------
Total from investment operations .05 7.87 5.68
- -------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (1.25) (.25) --
Distributions from net realized gain (4.61) (.48) (2.18)
----------------------------------------------------------
Total dividends and/or distributions to shareholders (5.86) (.73) (2.18)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.80 $ 30.61 $ 23.47
==========================================================
- -------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 (1.25)% 34.00% 30.60%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 458,461 $ 395,998 $ 96,751
- -------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 463,575 $ 235,856 $ 43,043
- -------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss) (0.23)% 0.36% 0.03%
Total expenses 0.81% 5,6,7 0.79% 5,6,7 0.82% 7
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 35% 57% 35%
1. For the period from September 7, 2005 (inception of offering) to August 31,
2006.
2. Per share amounts calculated based on the average shares outstanding during
the period.
3. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods less than one full
year. Returns do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended February 29, 2008 0.81%
Year Ended August 31, 2007 0.79%
6. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
7. Reduction to custodian expenses less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer International Small Company Fund (the "Fund") is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company. The Fund's investment objective is to seek long-term capital
appreciation. The Fund's investment adviser is OppenheimerFunds, Inc. (the
"Manager").
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge ("CDSC"). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares 72
months after the date of purchase. The Fund assesses a 2% fee on the proceeds of
fund shares that are redeemed (either by selling or exchanging to another
Oppenheimer fund) within 30 days of their purchase. The fee, which is retained
by the Fund, is accounted for as an addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for trading. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Trustees. Securities traded on a registered U.S.
securities exchange are valued based on the last sale price of the security
traded on that exchange prior to the time when the Fund's assets are valued.
Securities whose principal exchange is NASDAQ(R) are valued based on the closing
price reported by NASDAQ prior to the time when the Fund's assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing "bid" and "asked"
prices, and if not, at the closing bid price. Securities traded on foreign
exchanges are valued based on the last sale price on the principal exchange on
which the security is traded, as identified by the portfolio pricing service,
prior to the time when the Fund's assets are valued. In the absence of a sale,
the security is valued at the official closing price on the principal exchange.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of sixty days and all mortgage-backed securities, collateralized
34 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
mortgage obligations and other asset-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities for which market
quotations are not readily available are valued at their fair value. Securities
whose values have been materially affected by what the Manager identifies as a
significant event occurring before the Fund's assets are valued but after the
close of their respective exchanges will be fair valued. Fair value is
determined in good faith using consistently applied procedures under the
supervision of the Board of Trustees. Shares of a registered investment company
that are not traded on an exchange are valued at the acquired investment
company's net asset value per share. "Money market-type" debt instruments with
remaining maturities of sixty days or less are valued at cost adjusted by the
amortization of discount or premium to maturity (amortized cost), which
approximates market value.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in
U.S. dollars. The values of securities denominated in foreign currencies and
amounts related to the purchase and sale of foreign securities and foreign
investment income are translated into U.S. dollars as of the close of the
Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for
trading. Foreign exchange rates may be valued primarily using a reliable bank,
dealer or service authorized by the Board of Trustees.
Reported net realized gains and losses from foreign currency transactions
arise from sales of portfolio securities, sales and maturities of short-term
securities, sales of foreign currencies, exchange rate fluctuations between the
trade and settlement dates on securities transactions, and the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized appreciation and depreciation on the
translation of assets and liabilities denominated in foreign currencies arise
from changes in the values of assets and liabilities, including investments in
securities at fiscal period end, resulting from changes in exchange rates.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted
to invest daily available cash balances in an affiliated money market fund. The
Fund may invest the available cash in Class E shares of Oppenheimer
Institutional Money Market Fund ("IMMF") to seek current income while preserving
liquidity. IMMF is a registered open-end management investment company,
regulated as a money market fund under the Investment Company Act of 1940, as
amended. The Manager is also the investment adviser of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. As a
shareholder, the Fund is subject to its proportional share of IMMF's Class E
expenses, including its management fee. The Manager will waive fees and/or
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
35 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders. Therefore, no federal income or excise tax provision is
required. The Fund files income tax returns in U.S. federal and applicable state
jurisdictions. The statute of limitations on the Fund's tax return filings
generally remain open for the three preceding fiscal reporting period ends.
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.
The approximate 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 February 29, 2008 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.
Federal tax cost of securities $ 2,286,885,503
Federal tax cost of other investments 144,003
---------------
Total federal tax cost $ 2,287,029,506
===============
Gross unrealized appreciation $ 630,563,096
Gross unrealized depreciation (335,356,477)
---------------
Net unrealized appreciation $ 295,206,619
===============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the
"Plan") for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during their period of service. The Plan
was frozen with respect to adding new participants effective December 31, 2006
(the "Freeze Date") and existing Plan Participants as of the Freeze Date will
continue to receive accrued benefits under the Plan. Active independent trustees
as of the Freeze Date have each elected a distribution method with respect to
their benefits under the Plan. During the six months ended
36 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
February 29, 2008, the Fund's projected benefit obligations, payments to retired
trustees and accumulated liability were as follows:
Projected Benefit Obligations Increased $ 639
Payments Made to Retired Trustees 13,867
Accumulated Liability as of February 29, 2008 116,268
The Board of Trustees has adopted a compensation deferral plan for independent
trustees that enables trustees to elect to defer receipt of all or a portion of
the annual compensation they are entitled to receive from the Fund. For purposes
of determining the amount owed to the Trustee under the plan, deferred amounts
are treated as though equal dollar amounts had been invested in shares of the
Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases
shares of the funds selected for deferral by the Trustee in amounts equal to his
or her deemed investment, resulting in a Fund asset equal to the deferred
compensation liability. Such assets are included as a component of "Other"
within the asset section of the Statement of Assets and Liabilities. Deferral of
trustees' fees under the plan will not affect the net assets of the Fund, and
will not materially affect the Fund's assets, liabilities or net investment
income per share. Amounts will be deferred until distributed in accordance to
the compensation deferral plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations and
may differ from U.S. generally accepted accounting principles, are recorded on
the ex-dividend date. Income and capital gain distributions, if any, are
declared and paid annually or at other times as deemed necessary by the Manager.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income is recognized on an accrual basis. Discount and
premium, which are included in interest income on the Statement of Operations,
are amortized or accreted daily.
- --------------------------------------------------------------------------------
CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may
include interest expense incurred by the Fund on any cash overdrafts of its
custodian account during the period. Such cash overdrafts may result from the
effects of failed trades in portfolio securities and from cash outflows
resulting from unanticipated shareholder redemption activity. The Fund pays
interest to its custodian on such cash overdrafts, to the extent they are not
offset by positive cash balances maintained by the Fund, at a rate equal to the
Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item,
if applicable, represents earnings on cash balances maintained by the Fund
during the period. Such interest expense and other custodian fees may be paid
with these earnings.
37 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
INDEMNIFICATIONS. The Fund's organizational documents provide current and former
trustees and officers with a limited indemnification against liabilities arising
in connection with the performance of their duties to the Fund. In the normal
course of business, the Fund may also enter into contracts that provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would be dependent on future claims that may be made against the
Fund. The risk of material loss from such claims is considered remote.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
SIX MONTHS ENDED FEBRUARY 29, 2008 YEAR ENDED AUGUST 31, 2007
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
CLASS A
Sold 5,028,557 $ 148,125,668 24,448,070 $ 712,881,011
Dividends and/or
distributions reinvested 11,540,226 316,487,115 1,202,875 31,924,255
Redeemed (13,964,165) (381,121,882) 1 (19,189,583) (532,653,489) 2
---------------------------------------------------------------------------
Net increase 2,604,618 $ 83,490,901 6,461,362 $ 212,151,777
===========================================================================
- ----------------------------------------------------------------------------------------------------------
CLASS B
Sold 210,413 $ 5,984,357 938,207 $ 25,977,009
Dividends and/or
distributions reinvested 832,188 21,844,962 91,164 2,326,397
Redeemed (929,995) (25,773,572) 1 (1,705,475) (46,188,240) 2
---------------------------------------------------------------------------
Net increase (decrease) 112,606 $ 2,055,747 (676,104) $ (17,884,834)
===========================================================================
- ----------------------------------------------------------------------------------------------------------
CLASS C
Sold 863,543 $ 23,608,787 3,658,885 $ 104,218,413
Dividends and/or
distributions reinvested 1,859,940 48,770,086 160,549 4,098,791
Redeemed (2,108,965) (55,155,327) 1 (2,543,208) (69,543,480) 2
---------------------------------------------------------------------------
Net increase 614,518 $ 17,223,546 1,276,226 $ 38,773,724
===========================================================================
38 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
SIX MONTHS ENDED FEBRUARY 29, 2008 YEAR ENDED AUGUST 31, 2007
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------
CLASS N
Sold 563,299 $ 15,838,813 1,388,782 $ 41,006,702
Dividends and/or
distributions reinvested 560,798 14,917,623 44,605 1,154,389
Redeemed (553,815) (14,874,582) 1 (962,295) (26,383,025) 2
--------------------------------------------------------------------------
Net increase 570,282 $ 15,881,854 471,092 $ 15,778,066
==========================================================================
- ----------------------------------------------------------------------------------------------------------
CLASS Y
Sold 4,176,057 $ 127,189,367 9,458,020 $ 281,159,481
Dividends and/or
distributions reinvested 3,179,109 87,163,029 150,835 4,006,165
Redeemed (1,807,986) (48,596,200) 1 (793,289) (23,168,786) 2
--------------------------------------------------------------------------
Net increase 5,547,180 $ 165,756,196 8,815,566 $ 261,996,860
==========================================================================
1. Net of redemption fees of $40,829, $2,944, $7,469, $1,829 and $9,835 for
Class A, Class B, Class C, Class N and Class Y, respectively.
2. Net of redemption fees of $32,715, $3,632, $7,339, $883 and $13,866 for Class
A, Class B, Class C, Class N and Class Y, respectively.
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations and investments in IMMF, for the six months ended
February 29, 2008, were as follows:
PURCHASES SALES
---------------------------------------------------------------
Investment securities $ 1,030,004,789 $ 1,292,180,443
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Under the investment advisory agreement, the Fund pays the
Manager a management fee based on the daily net assets of the Fund at an annual
rate as shown in the following table:
FEE SCHEDULE
----------------------------------
Up to $250 million 0.80%
Next $250 million 0.77
Next $500 million 0.75
Next $1 billion 0.69
Next $4 billion 0.67
Over $6 billion 0.65
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services ("OFS"), a division of the
Manager, acts as the transfer and shareholder servicing agent for the Fund. The
Fund pays OFS a per account fee. For the six months ended February 29, 2008, the
Fund paid $1,632,826 to OFS for services to the Fund.
39 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
Additionally, Class Y shares are subject to minimum fees of $10,000
annually for assets of $10 million or more. The Class Y shares are subject to
the minimum fees in the event that the per account fee does not equal or exceed
the applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor")
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan (the
"Plan") for Class A shares under Rule 12b-1 of the Investment Company Act of
1940. Under the Plan, the Fund reimburses the Distributor for a portion of its
costs incurred for services provided to accounts that hold Class A shares.
Reimbursement is made periodically at an annual rate of up to 0.25% of the
average annual net assets of Class A shares of the Fund. The Distributor
currently uses all of those fees to pay dealers, brokers, banks and other
financial institutions periodically for providing personal service and
maintenance of accounts of their customers that hold Class A shares. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent periods. Fees incurred by the
Fund under the Plan are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans (the "Plans") for Class B, Class C
and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 to
compensate the Distributor for its services in connection with the distribution
of those shares and servicing accounts. Under the Plans, the Fund pays the
Distributor an annual asset-based sales charge of 0.75% on Class B and Class C
shares and 0.25% on Class N shares. The Distributor also receives a service fee
of 0.25% per year under each plan. If either the Class B, Class C or Class N
plan is terminated by the Fund or by the shareholders of a class, the Board of
Trustees and its independent trustees must determine whether the Distributor
shall be entitled to payment from the Fund of all or a portion of the service
fee and/or asset-based sales charge in respect to shares sold prior to the
effective date of such termination. The Distributor's aggregate uncompensated
expenses under the Plans at December 31, 2007 for Class B, Class C and Class N
shares were $433,495, $2,423,351 and $636,510, respectively. Fees incurred by
the Fund under the Plans are detailed in the Statement of Operations.
- --------------------------------------------------------------------------------
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
("CDSC") do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the
40 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
CDSC retained by the Distributor on the redemption of shares is shown in the
following table for the period indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ----------------------------------------------------------------------------------------------------
February 29, 2008 $ 109,141 $ 55,938 $ 97,607 $ 73,022 $ 919
- ----------------------------------------------------------------------------------------------------
WAIVERS AND REIMBURSEMENTS OF EXPENSES. OFS has voluntarily agreed to limit
transfer and shareholder servicing agent fees for all classes to 0.35% of
average annual net assets per class. This undertaking may be amended or
withdrawn at any time.
The Manager will waive fees and/or reimburse Fund expenses in an amount
equal to the indirect management fees incurred through the Fund's investment in
IMMF. During the six months ended February 29, 2008, the Manager waived $26,994
for IMMF management fees.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY EXCHANGE CONTRACTS
The Fund may enter into foreign currency exchange contracts ("forward
contracts") for the purchase or sale of a foreign currency at a negotiated rate
at a future date.
Foreign currency exchange contracts are reported on a schedule following
the Statement of Investments. Forward contracts will be valued daily based upon
the closing prices of the forward currency rates determined at the close of the
Exchange as provided by a bank, dealer or pricing service. The resulting
unrealized appreciation (depreciation) is reported in the Statement of Assets
and Liabilities as a receivable or payable and in the Statement of Operations
within the change in unrealized appreciation (depreciation). At contract close,
the difference between the original cost of the contract and the value at the
close date is recorded as a realized gain (loss) in the Statement of Operations.
Risks to the Fund include both market and credit risk. Market risk is the
risk that the value of the forward contract will depreciate due to unfavorable
changes in the exchange rates. Credit risk arises from the possibility that the
counterparty will default. If the counterparty defaults, the Fund's loss will
consist of the net amount of contractual payments that the Fund has not yet
received.
- --------------------------------------------------------------------------------
6. ILLIQUID SECURITIES
As of February 29, 2008, investments in securities included issues that are
illiquid. Investments may be illiquid because they do not have an active trading
market, making it difficult to value them or dispose of them promptly at an
acceptable price. The Fund will not invest more than 10% of its net assets
(determined at the time of purchase and reviewed periodically) in illiquid
securities. Securities that are illiquid are marked with an applicable footnote
on the Statement of Investments.
41 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
NOTES TO FINANCIAL STATEMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE
MEASUREMENTS. This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and expands
disclosures about fair value measurements. SFAS No. 157 applies to fair value
measurements already required or permitted by existing standards. SFAS No. 157
is effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. As of February
29, 2008, the Manager does not believe the adoption of SFAS No. 157 will
materially impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements on changes in net assets for the
period.
42 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF
INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file Form N-PX, with its complete proxy voting record for the 12 months ended
June 30th, no later than August 31st of each year. The Fund's voting record is
available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at
www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington, D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
43 | OPPENHEIMER INTERNATIONAL SMALL COMPANY FUND
ITEM 2. CODE OF ETHICS.
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semiannual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF
DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS
1. The Fund's Governance Committee (the "Committee") will evaluate potential
Board candidates to assess their qualifications. The Committee shall have
the authority, upon approval of the Board, to retain an executive search
firm to assist in this effort. The Committee may consider recommendations
by business and personal contacts of current Board members and by executive
search firms which the Committee may engage from time to time and may also
consider shareholder recommendations. The Committee may consider the advice
and recommendation of the Funds' investment manager and its affiliates in
making the selection.
2. The Committee shall screen candidates for Board membership. The Committee
has not established specific qualifications that it believes must be met by
a trustee nominee. In evaluating trustee nominees, the Committee considers,
among other things, an individual's background, skills, and experience;
whether the individual is an "interested person" as defined in the
Investment Company Act of 1940; and whether the individual would be deemed
an "audit committee financial expert" within the meaning of applicable SEC
rules. The Committee also considers whether the individual's background,
skills, and experience will complement the background, skills, and
experience of other nominees and will contribute to the Board. There are
no differences in the manner in which the Committee evaluates nominees for
trustees based on whether the nominee is recommended by a shareholder.
3. The Committee may consider nominations from shareholders for the Board at
such times as the Committee meets to consider new nominees for the Board.
The Committee shall have the sole discretion to determine the candidates to
present to the Board and, in such cases where required, to shareholders.
Recommendations for trustee nominees should, at a minimum, be accompanied
by the following:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person" as
defined in the Investment Company Act of 1940;
o any other information that the Funds would be required to include in a
proxy statement concerning the person if he or she was nominated; and
o the name and address of the person submitting the recommendation and,
if that person is a shareholder, the period for which that person held
Fund shares.
The recommendation also can include any additional information which the
person submitting it believes would assist the Committee in evaluating the
recommendation.
4. Shareholders should note that a person who owns securities issued by
Massachusetts Mutual Life Insurance Company (the parent company of the
Funds' investment adviser) would be deemed an "interested person" under the
Investment Company Act of 1940. In addition, certain other relationships
with Massachusetts Mutual Life Insurance Company or its subsidiaries, with
registered broker-dealers, or with the Funds' outside legal counsel may
cause a person to be deemed an "interested person."
5. Before the Committee decides to nominate an individual as a trustee,
Committee members and other directors customarily interview the individual
in person. In addition, the individual customarily is asked to complete a
detailed questionnaire which is designed to elicit information which must
be disclosed under SEC and stock exchange rules and to determine whether
the individual is subject to any statutory disqualification from serving as
a trustee of a registered investment company.
ITEM 11. CONTROLS AND PROCEDURES.
Based on their evaluation of the registrant's disclosure controls and procedures
(as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR
270.30a-3(c)) as of 02/29/2008, the registrant's principal executive officer and
principal financial officer found the registrant's disclosure controls and
procedures to provide reasonable assurances that information required to be
disclosed by the registrant in the reports that it
files under the Securities Exchange Act of 1934 (a) is accumulated and
communicated to registrant's management, including its principal executive
officer and principal financial officer, to allow timely decisions regarding
required disclosure, and (b) is recorded, processed, summarized and reported,
within the time periods specified in the rules and forms adopted by the U.S.
Securities and Exchange Commission.
There have been no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's second fiscal quarter of the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over financial
reporting.
ITEM 12. EXHIBITS.
(a) (1) Not applicable to semiannual reports.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer International Small Company Fund
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 04/16/2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 04/16/2008
By: /s/ Brian W. WIxted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 04/16/2008