-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Uj9r9U4nmytR14M1u6WFhLEq2AF7WNFeq4BcUpcWi4CaeCELraCWahKDeQQ2LiN7 L+uRb0HFVd+l2XtEvqwFaA== 0000935069-07-001455.txt : 20070628 0000935069-07-001455.hdr.sgml : 20070628 20070627183501 ACCESSION NUMBER: 0000935069-07-001455 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070430 FILED AS OF DATE: 20070628 DATE AS OF CHANGE: 20070627 EFFECTIVENESS DATE: 20070628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER SELECT VALUE FUND CENTRAL INDEX KEY: 0001191290 IRS NUMBER: 223869416 STATE OF INCORPORATION: MA FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-21208 FILM NUMBER: 07944764 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUSCON WAY STREET 2: N/A CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUSCON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER MULTI CAP VALUE FUND DATE OF NAME CHANGE: 20020920 0001191290 S000008493 OPPENHEIMER SELECT VALUE FUND C000023309 A C000023310 B C000023311 C C000023312 N C000023313 Y N-CSR 1 ra600_40267ncsr.txt RA600_40267NCSR.TXT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-21208 --------- OPPENHEIMER SELECT VALUE FUND ----------------------------- (Exact name of registrant as specified in charter) 6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924 ------------------------------------------------------ (Address of principal executive offices) (Zip code) Robert G. Zack, Esq. OppenheimerFunds, Inc. TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008 --------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 -------------- Date of fiscal year end: APRIL 30 -------- Date of reporting period: 04/30/2007 ---------- ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- TOP TEN COMMON STOCK INDUSTRIES - -------------------------------------------------------------------------------- Commercial Banks 7.3% - -------------------------------------------------------------------------------- Oil & Gas 7.0 - -------------------------------------------------------------------------------- Capital Markets 6.4 - -------------------------------------------------------------------------------- Aerospace & Defense 6.2 - -------------------------------------------------------------------------------- Media 5.5 - -------------------------------------------------------------------------------- Food & Staples Retailing 5.1 - -------------------------------------------------------------------------------- Insurance 4.2 - -------------------------------------------------------------------------------- Diversified Financial Services 4.1 - -------------------------------------------------------------------------------- Biotechnology 3.9 - -------------------------------------------------------------------------------- Software 3.9 Portfolio holdings and allocations are subject to change. Percentages are as of April 30, 2007, and are based on net assets. TOP TEN COMMON STOCK HOLDINGS - -------------------------------------------------------------------------------- Liberty Global, Inc., Series C 4.5% - -------------------------------------------------------------------------------- UBS AG 4.4 - -------------------------------------------------------------------------------- Wachovia Corp. 4.1 - -------------------------------------------------------------------------------- Costco Wholesale Corp. 3.9 - -------------------------------------------------------------------------------- Exxon Mobil Corp. 3.9 - -------------------------------------------------------------------------------- Wells Fargo & Co. 3.1 - -------------------------------------------------------------------------------- Take-Two Interactive Software, Inc. 3.1 - -------------------------------------------------------------------------------- Exelon Corp. 3.0 - -------------------------------------------------------------------------------- United Technologies Corp. 2.8 - -------------------------------------------------------------------------------- Everest Re Group Ltd. 2.8 Portfolio holdings and allocations are subject to change. Percentages are as of April 30, 2007, and are based on net assets. For more current Fund holdings, please visit www.oppenheimerfunds.com. - -------------------------------------------------------------------------------- 9 | OPPENHEIMER SELECT VALUE FUND TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECTOR ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Financials 29.1% Commercial Banks 8.1 Capital Markets 7.1 Insurance 4.7 Diversified Financial Services 4.6 Thrifts & Mortgage Finance 2.5 Consumer Finance 2.1 Industrials 13.2 Consumer Staples 10.3 Health Care 10.0 Energy 9.4 Consumer Discretionary 9.2 Information Technology 6.5 Utilities 6.3 Materials 3.1 Telecommunication Services 2.9 Portfolio holdings and allocations are subject to change. Percentages are as of April 30, 2007, and are based on the total market value of common stocks. - -------------------------------------------------------------------------------- 10 | OPPENHEIMER SELECT VALUE FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED APRIL 30, 2007, FOLLOWED BY A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED MARKET INDEX. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. We are very pleased with the Fund's performance and its ability to produce a higher return than its benchmark, the Russell 3000 Value Index. The performance of the Fund's Class A shares (without sales charge) ranked in the first quartile and fourth percentile overall (#14 out of 464 funds ranked in Lipper Inc.'s multi-cap value category) for the reporting period. The Fund's best relative gains were achieved in consumer discretionary, materials, industrials and healthcare areas, which handily offset underperformance among the Fund's telecom services, financials and information technology areas. Within consumer discretionary, the Fund's primary gains stemmed from our holdings in Liberty Global, Inc., a cable company that primarily services Europe and Japan. The company has continued to grow its cash flow through strength in its triple-play penetration of cable, telephone and high-speed data. In addition, Liberty Global has gained value through a number of shrewd capital management decisions where it has divested itself of select individual properties at very attractive valuations and then used the proceeds to buy back stock at more attractive valuations. Liberty Global has also benefited from a relatively less intense competitive landscape in the majority of its markets outside of the U.S. In materials, the Fund's holdings in The Mosaic Co., one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients, benefited from a tightening fertilizer market amid a growing global agriculture industry. Other top contributors within this sector included two construction materials firms, Vulcan Materials, Inc. and Martin Marietta Materials Co. These companies both produce construction aggregates - crushed stone, gravel and sand - a highly local business due to high delivery costs. When we initiated our investment in these stocks, most notably Vulcan Materials, our view was that it was in a position to grow its net pricing due to local competition and that it was underappreciated by the market. Both Vulcan Materials and Martin Marietta Materials have continued to increase earnings during the reporting period and we have sold our positions, locking in gains for the Fund. Industrials stocks also posted solid gains for the Fund, most notably our holdings in Siemens AG, one of the world's largest electrical, engineering and electronics companies. We view Siemens as a turnaround story; a stock that was one of the Fund's laggards only 11 | OPPENHEIMER SELECT VALUE FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- a year ago and one in which we had faith in its ability to successfully implement new restructuring actions. The Fund's holdings in Navistar International Corp., the trucking firm, also flourished during the reporting period. The trucking business is often considered a "lumpy" business because it is closely linked to the ups and downs associated with regulatory changes mandated by the Environmental Protection Agency due to ongoing modifications to emissions technology standards. When we initiated our stock purchase in Navistar, we believed it was selling at an attractive price, especially considering the long-term earnings of the business. The stock has performed well for the Fund and has been a large contributor to its overall return. Orbital Sciences Corp., an industry leader in small space and rocket systems, also appreciated further this year. The stock has been a positive contributor for the Fund for the past few years and, as of the end of the reporting period, we have exited our position. The health care sector also proved beneficial for the Fund, with the lion's share of its gains stemming from our holdings in Vanda Pharmaceuticals, Inc. Early on, we received encouraging data regarding two of Vanda's early-stage drugs, Iloperidone, which treats schizophrenia, bipolar disorders and other psychiatric conditions and VEC-162, a melatonin agonist in the treatment of sleep disorders such as insomnia and circadian rhythm sleep patterns. Other significant gains for the Fund came from the consumer staples area, where tobacco giant Altria Group, Inc. was a key contributor. The stock gained value from its continued legal victories, which enabled it to spin-off its Kraft Foods division. Within the energy sector, the Fund benefited from its positive stock selection, where one of the key drivers of that stock selection was an overweight position in Exxon Mobil Corp. during a period in which the stock performed exceptionally well. The bulk of the Fund's negative performance stemmed from three areas: telecom services, financials and information technology. Within the telecom services area, the Fund was most hurt by its lack of participation in AT&T, Inc. during a time in which it completed its acquisition of BellSouth Corp. Neither of these stocks were held by the Fund. The Fund was also hurt by its holdings in Sprint Nextel Corp., which came under pressure during the first half of the reporting period due to its inability to attract enough subscribers as well as a lack of progress addressing "churn," which is defined as a percentage of customers that leave. Generally speaking, when churn levels increase, profitability decreases. We sold our position in Sprint Nextel, choosing instead to focus the Fund's telecom positioning in Verizon Communications, Inc. 12 | OPPENHEIMER SELECT VALUE FUND Declines in the Fund's financials holdings were largely limited to our investments in Capital One Financial Corp., SLM Corp. and E*TRADE Financial Corp. Within consumer finance, Capital One was hurt due to investor concern over its acquisition of Northfork Bank coupled with credit pressures stemming from the sub-prime lending market. SLM Corp., formerly known as Sallie Mae, underperformed due to growing political risk. We thought those growing political risks posed a significant threat to the stock and we sold it. E*TRADE also underperformed during the reporting period due to some credit problems in its loan portfolio. However, we believe those issues remain manageable and we still like the company and have kept the stock in the Fund. Within information technology, Palm, Inc. suffered due to intensifying competition in the PDA market, which turned out to be more competitive than we had anticipated. We have sold the stock. The Fund was also hurt by its holdings in Novell, Inc., the networking system firm. Novell declined due to a growing impatience by investors on its quarterly execution. However, we still believe in the company's long-term prospects, due in part to its Linux offerings and new partnership with Microsoft. We have increased the Fund's exposure to the consumer discretionary and consumer staples areas. On balance, we have decreased the Fund's exposure to the information technology sector. As of the end of the reporting period, we have positioned the Fund's asset allocation to reflect a relative underweight in the financials, energy, and telecom services areas. Conversely, the Fund's most significant relative overweight positions are within the information technology, industrials, consumer staples and health care areas. COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until April 30, 2007. In the case of Class A shares, performance is measured from the inception of the class on November 26, 2002. In the case of Class B, Class C, Class N and Class Y shares, performance is measured from their inception of each class on February 27, 2004. The Fund's performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C and Class N shares, and reinvestments of all dividends and capital gains distributions. Past performance cannot guarantee future results. The Fund's performance is compared to the Russell 3000 Value Index. The Russell 3000 Value Index is comprised of 3,000 large U.S. companies and includes the reinvestment of dividends. The index is unmanaged and cannot be purchased directly by 13 | OPPENHEIMER SELECT VALUE FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- investors. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs shows the effect of taxes. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the investments in the index. 14 | OPPENHEIMER SELECT VALUE FUND CLASS A SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Select Value Fund (Class A) Russell 3000 Value Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Select Value Fund (Class A) Russell 3000 Value Index 11/26/2002 $ 9,425 $10,000 01/31/2003 $ 9,199 $ 9,332 04/30/2003 $ 9,585 $ 9,905 07/31/2003 $10,961 $10,892 10/31/2003 $11,828 $11,658 01/31/2004 $13,542 $12,782 04/30/2004 $13,134 $12,617 07/31/2004 $13,114 $12,856 10/31/2004 $13,804 $13,481 01/31/2005 $15,069 $14,383 04/30/2005 $14,958 $14,328 07/31/2005 $16,215 $15,387 10/31/2005 $16,124 $15,094 01/31/2006 $17,226 $16,344 04/30/2006 $17,789 $17,098 07/31/2006 $17,153 $17,104 10/31/2006 $18,905 $18,351 01/31/2007 $20,708 $19,427 04/30/2007 $21,931 $20,090 AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT 4/30/07 1-Year 16.20% Since Inception (11/26/02) 19.41% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 3% (SINCE INCEPTION); AND FOR CLASS C AND CLASS N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 20 FOR FURTHER INFORMATION. 15 | OPPENHEIMER SELECT VALUE FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS B SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Select Value Fund (Class B) Russell 3000 Value Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Select Value Fund (Class B) Russell 3000 Value Index 02/27/2004 $10,000 $10,000 04/30/2004 $ 9,521 $ 9,666 07/31/2004 $ 9,493 $ 9,849 10/31/2004 $ 9,958 $10,328 01/31/2005 $10,847 $11,019 04/30/2005 $10,745 $10,976 07/31/2005 $11,620 $11,787 10/31/2005 $11,525 $11,563 01/31/2006 $12,285 $12,521 04/30/2006 $12,656 $13,098 07/31/2006 $12,172 $13,103 10/31/2006 $13,389 $14,058 01/31/2007 $14,638 $14,882 04/30/2007 $15,174 $15,391 AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT 4/30/07 1-Year 17.27% Since Inception (2/27/04) 14.03% 16 | OPPENHEIMER SELECT VALUE FUND CLASS C SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Select Value Fund (Class C) Russell 3000 Value Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Select Value Fund (Class C) Russell 3000 Value Index 02/27/2004 $10,000 $10,000 04/30/2004 $ 9,528 $ 9,666 07/31/2004 $ 9,493 $ 9,849 10/31/2004 $ 9,958 $10,328 01/31/2005 $10,847 $11,019 04/30/2005 $10,745 $10,976 07/31/2005 $11,620 $11,787 10/31/2005 $11,532 $11,563 01/31/2006 $12,300 $12,521 04/30/2006 $12,670 $13,098 07/31/2006 $12,194 $13,103 10/31/2006 $13,411 $14,058 01/31/2007 $14,670 $14,882 04/30/2007 $15,506 $15,391 AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT 4/30/07 1-Year 21.38% Since Inception (2/27/04) 14.81% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 3% (SINCE INCEPTION); AND FOR CLASS C AND CLASS N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 20 FOR FURTHER INFORMATION. 17 | OPPENHEIMER SELECT VALUE FUND FUND PERFORMANCE DISCUSSION - -------------------------------------------------------------------------------- CLASS N SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Select Value Fund (Class N) Russell 3000 Value Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Select Value Fund (Class N) Russell 3000 Value Index 02/27/2004 $10,000 $10,000 04/30/2004 $ 9,528 $ 9,666 07/31/2004 $ 9,507 $ 9,849 10/31/2004 $ 9,993 $10,328 01/31/2005 $10,896 $11,019 04/30/2005 $10,801 $10,976 07/31/2005 $11,706 $11,787 10/31/2005 $11,633 $11,563 01/31/2006 $12,415 $12,521 04/30/2006 $12,808 $13,098 07/31/2006 $12,340 $13,103 10/31/2006 $13,593 $14,058 01/31/2007 $14,882 $14,882 04/30/2007 $15,751 $15,391 AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT 4/30/07 1-Year 21.98% Since Inception (2/27/04) 15.38% 18 | OPPENHEIMER SELECT VALUE FUND CLASS Y SHARES COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN: Oppenheimer Select Value Fund (Class Y) Russell 3000 Value Index [THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.] Oppenheimer Select Value Fund (Class Y) Russell 3000 Value Index 02/27/2004 $10,000 $10,000 04/30/2004 $ 9,535 $ 9,666 07/31/2004 $ 9,528 $ 9,849 10/31/2004 $10,028 $10,328 01/31/2005 $10,953 $11,019 04/30/2005 $10,873 $10,976 07/31/2005 $11,799 $11,787 10/31/2005 $11,748 $11,563 01/31/2006 $12,561 $12,521 04/30/2006 $12,978 $13,098 07/31/2006 $12,531 $13,103 10/31/2006 $13,826 $14,058 01/31/2007 $15,162 $14,882 04/30/2007 $16,076 $15,391 AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES OF THE FUND AT 4/30/07 1-Year 23.88% Since Inception (2/27/04) 16.13% THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM, OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE, REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES, THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 3% (SINCE INCEPTION); AND FOR CLASS C AND CLASS N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD. THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 20 FOR FURTHER INFORMATION. 19 | OPPENHEIMER SELECT VALUE FUND NOTES - -------------------------------------------------------------------------------- Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS AND OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. The Fund's investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first offered on 11/26/02. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 2/27/04. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 3% (since inception). Class B shares are subject to an annual 0.75% asset-based sales charge. CLASS C shares of the Fund were first publicly offered on 2/27/04. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge. CLASS N shares of the Fund were first publicly offered on 2/27/04. 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 2/27/04. Class Y shares are offered only to certain institutional investors under special agreement with the Distributor. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 20 | OPPENHEIMER SELECT VALUE FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended April 30, 2007. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the "actual" line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the table provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in 21 | OPPENHEIMER SELECT VALUE FUND FUND EXPENSES Continued - -------------------------------------------------------------------------------- the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. - -------------------------------------------------------------------------------- BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED (11/1/06) (4/30/07) APRIL 30, 2007 - -------------------------------------------------------------------------------- Class A Actual $1,000.00 $1,160.10 $6.34 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,018.94 5.92 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 1,155.70 11.01 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,014.63 10.29 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 1,156.20 10.58 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,015.03 9.89 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 1,158.80 7.73 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,017.65 7.23 - -------------------------------------------------------------------------------- Class Y Actual 1,000.00 1,162.70 4.08 - -------------------------------------------------------------------------------- Class Y Hypothetical 1,000.00 1,021.03 3.82 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated fund, based on the 6-month period ended April 30, 2007 are as follows: CLASS EXPENSE RATIOS - --------------------------- Class A 1.18% - --------------------------- Class B 2.05 - --------------------------- Class C 1.97 - --------------------------- Class N 1.44 - --------------------------- Class Y 0.76 The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund's Manager that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements. - -------------------------------------------------------------------------------- 22 | OPPENHEIMER SELECT VALUE FUND STATEMENT OF INVESTMENTS April 30, 2007 - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- COMMON STOCKS--90.0% - -------------------------------------------------------------------------------- CONSUMER DISCRETIONARY--8.3% - -------------------------------------------------------------------------------- MEDIA--5.5% Cinemark Holdings, Inc. 1 156,690 $ 2,961,441 - -------------------------------------------------------------------------------- Liberty Global, Inc., Series C 1 419,437 14,013,390 ------------- 16,974,831 - -------------------------------------------------------------------------------- SPECIALTY RETAIL--2.8% Advance Auto Parts, Inc. 61,500 2,533,800 - -------------------------------------------------------------------------------- Office Depot, Inc. 1 179,600 6,038,152 ------------- 8,571,952 - -------------------------------------------------------------------------------- CONSUMER STAPLES--9.3% - -------------------------------------------------------------------------------- FOOD & STAPLES RETAILING--5.1% Costco Wholesale Corp. 225,500 12,080,035 - -------------------------------------------------------------------------------- Longs Drug Stores, Inc. 10,200 558,348 - -------------------------------------------------------------------------------- SUPERVALU, Inc. 66,700 3,061,530 ------------- 15,699,913 - -------------------------------------------------------------------------------- FOOD PRODUCTS--1.7% Chiquita Brands International, Inc. 194,000 2,877,020 - -------------------------------------------------------------------------------- ConAgra Foods, Inc. 97,600 2,399,008 ------------- 5,276,028 - -------------------------------------------------------------------------------- TOBACCO--2.5% Altria Group, Inc. 110,740 7,632,201 - -------------------------------------------------------------------------------- ENERGY--8.5% - -------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES--1.5% Halliburton Co. 141,500 4,495,455 - -------------------------------------------------------------------------------- Superior Offshore International, Inc. 1 7,800 142,506 ------------- 4,637,961 - -------------------------------------------------------------------------------- OIL & GAS--7.0% Exxon Mobil Corp. 151,910 12,058,616 - -------------------------------------------------------------------------------- Murphy Oil Corp. 48,800 2,705,472 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- OIL & GAS Continued Petroleo Brasileiro SA, ADR 26,500 $ 2,682,595 - -------------------------------------------------------------------------------- Total SA, Sponsored ADR 54,600 4,023,474 ------------- 21,470,157 - -------------------------------------------------------------------------------- FINANCIALS--26.2% - -------------------------------------------------------------------------------- CAPITAL MARKETS--6.4% E*TRADE Financial Corp. 1 268,200 5,921,856 - -------------------------------------------------------------------------------- UBS AG 211,420 13,721,158 ------------- 19,643,014 - -------------------------------------------------------------------------------- COMMERCIAL BANKS--7.3% Wachovia Corp. 230,360 12,794,194 - -------------------------------------------------------------------------------- Wells Fargo & Co. 270,300 9,701,067 ------------- 22,495,261 - -------------------------------------------------------------------------------- CONSUMER FINANCE--1.9% American Express Co. 37,000 2,244,790 - -------------------------------------------------------------------------------- Capital One Financial Corp. 50,670 3,762,754 ------------- 6,007,544 - -------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES--4.1% Bank of America Corp. 98,200 4,998,380 - -------------------------------------------------------------------------------- Citigroup, Inc. 143,700 7,705,194 ------------- 12,703,574 - -------------------------------------------------------------------------------- INSURANCE--4.2% Everest Re Group Ltd. 84,500 8,504,080 - -------------------------------------------------------------------------------- National Financial Partners Corp. 45,500 2,096,185 - -------------------------------------------------------------------------------- Platinum Underwriters Holdings Ltd. 73,600 2,518,592 ------------- 13,118,857 - -------------------------------------------------------------------------------- THRIFTS & MORTGAGE FINANCE--2.3% Freddie Mac 68,510 4,438,078 - -------------------------------------------------------------------------------- NewAlliance Bancshares, Inc. 162,300 2,533,503 ------------- 6,971,581 23 | OPPENHEIMER SELECT VALUE FUND STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- HEALTH CARE--8.9% - -------------------------------------------------------------------------------- BIOTECHNOLOGY--3.9% Human Genome Sciences, Inc. 1 190,500 $ 2,051,685 - -------------------------------------------------------------------------------- Orexigen Therapeutics, Inc. 1 225,467 3,167,811 - -------------------------------------------------------------------------------- Vanda Pharmaceuticals, Inc. 1 323,100 6,949,881 ------------- 12,169,377 - -------------------------------------------------------------------------------- HEALTH CARE PROVIDERS & SERVICES--1.8% Medco Health Solutions, Inc. 1 36,900 2,878,938 - -------------------------------------------------------------------------------- WellPoint, Inc. 1 33,200 2,621,804 ------------- 5,500,742 - -------------------------------------------------------------------------------- PHARMACEUTICALS--3.2% Novartis AG, ADR 74,600 4,333,514 - -------------------------------------------------------------------------------- Sanofi-Aventis SA, ADR 122,920 5,637,111 ------------- 9,970,625 - -------------------------------------------------------------------------------- INDUSTRIALS--11.9% - -------------------------------------------------------------------------------- AEROSPACE & DEFENSE--6.2% Alliant Techsystems, Inc. 1 29,900 2,784,587 - -------------------------------------------------------------------------------- Boeing Co. 77,200 7,179,600 - -------------------------------------------------------------------------------- Spirit Aerosystems Holdings, Inc., Cl. A 1 21,250 672,138 - -------------------------------------------------------------------------------- United Technologies Corp. 126,830 8,514,098 ------------- 19,150,423 - -------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING--0.0% KBR, Inc. 1 2,620 54,129 - -------------------------------------------------------------------------------- INDUSTRIAL CONGLOMERATES--1.0% Siemens AG, Sponsored ADR 25,100 3,036,347 - -------------------------------------------------------------------------------- MACHINERY--3.2% Greenbrier Cos., Inc. 119,780 2,747,753 - -------------------------------------------------------------------------------- Navistar International Corp. 1 127,600 7,085,628 ------------- 9,833,381 VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- TRANSPORTATION INFRASTRUCTURE--1.5% Aegean Marine Petroleum Network, Inc. 295,600 $ 4,596,580 - -------------------------------------------------------------------------------- INFORMATION TECHNOLOGY--5.9% - -------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT--1.0% Cisco Systems, Inc. 1 112,000 2,994,880 - -------------------------------------------------------------------------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--1.0% Texas Instruments, Inc. 87,300 3,000,501 - -------------------------------------------------------------------------------- SOFTWARE--3.9% Novell, Inc. 1 364,340 2,659,682 - -------------------------------------------------------------------------------- Take-Two Interactive Software, Inc. 1 492,300 9,437,391 ------------- 12,097,073 - -------------------------------------------------------------------------------- MATERIALS--2.8% - -------------------------------------------------------------------------------- CHEMICALS--2.8% Lubrizol Corp. (The) 75,000 4,495,500 - -------------------------------------------------------------------------------- Mosaic Co. (The) 1 139,200 4,106,400 ------------- 8,601,900 - -------------------------------------------------------------------------------- TELECOMMUNICATION SERVICES--2.6% - -------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES--2.5% Verizon Communications, Inc. 202,500 7,731,450 - -------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES--0.1% Metropcs Communications, Inc. 1 9,200 258,060 - -------------------------------------------------------------------------------- UTILITIES--5.6% - -------------------------------------------------------------------------------- ELECTRIC UTILITIES--3.4% Exelon Corp. 123,300 9,298,053 - -------------------------------------------------------------------------------- Reliant Energy, Inc. 1 48,300 1,075,641 ------------- 10,373,694 - -------------------------------------------------------------------------------- ENERGY TRADERS--0.4% Dynegy, Inc., Cl. A 1 143,500 1,350,335 - -------------------------------------------------------------------------------- MULTI-UTILITIES & UNREGULATED POWER--1.8% CMS Energy Corp. 207,670 3,846,048 - -------------------------------------------------------------------------------- Sempra Energy 29,330 1,861,870 ------------- 5,707,918 ------------- Total Common Stocks (Cost $242,692,674) 277,630,289 24 | OPPENHEIMER SELECT VALUE FUND VALUE SHARES SEE NOTE 1 - -------------------------------------------------------------------------------- INVESTMENTS IN AFFILIATED COMPANIES--8.2% - -------------------------------------------------------------------------------- Oppenheimer Institutional Money Market Fund, Cl. E, 5.21% 2,3 (Cost $25,172,380) 25,172,380 $ 25,172,380 - -------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $267,865,054) 98.2% 302,802,669 - -------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 1.8 5,631,091 -------------------------- NET ASSETS 100.0% $308,433,760 ========================== FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Non-income producing security. 2. Rate shown is the 7-day yield as of April 30, 2007. 3. Is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended April 30, 2007, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment advisor. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES SHARES APRIL 30, GROSS GROSS APRIL 30, 2006 ADDITIONS REDUCTIONS 2007 - ------------------------------------------------------------------------------------------- Oppenheimer Institutional Money Market Fund, Cl. E, 5.21% -- 93,544,289 68,371,909 25,172,380
VALUE DIVIDEND SEE NOTE 1 INCOME - ------------------------------------------------------------------------------------------- Oppenheimer Institutional Money Market Fund, Cl. E, 5.21% $25,172,380 $221,018
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 25 | OPPENHEIMER SELECT VALUE FUND STATEMENT OF ASSETS AND LIABILITIES April 30, 2007 - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- ASSETS - ------------------------------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments: Unaffiliated companies (cost $242,692,674) $ 277,630,289 Affiliated companies (cost $25,172,380) 25,172,380 --------------- 302,802,669 - ------------------------------------------------------------------------------------------------------- Cash 35,919 - ------------------------------------------------------------------------------------------------------- Receivables and other assets: Investments sold 9,661,977 Shares of beneficial interest sold 5,558,594 Interest and dividends 298,632 Other 6,075 --------------- Total assets 318,363,866 - ------------------------------------------------------------------------------------------------------- LIABILITIES - ------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 9,581,144 Shares of beneficial interest redeemed 189,555 Distribution and service plan fees 55,590 Transfer and shareholder servicing agent fees 34,719 Shareholder communications 28,408 Trustees' compensation 12,175 Other 28,515 --------------- Total liabilities 9,930,106 - ------------------------------------------------------------------------------------------------------- NET ASSETS $ 308,433,760 =============== - ------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ------------------------------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 15,179 - ------------------------------------------------------------------------------------------------------- Additional paid-in capital 262,778,137 - ------------------------------------------------------------------------------------------------------- Accumulated net investment income 267,578 - ------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 10,435,251 - ------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 34,937,615 --------------- NET ASSETS $ 308,433,760 ===============
26 | OPPENHEIMER SELECT VALUE FUND - ------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - ------------------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $208,402,417 and 10,194,893 shares of beneficial interest outstanding) $ 20.44 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 21.69 - ------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $30,499,625 and 1,526,069 shares of beneficial interest outstanding) $ 19.99 - ------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $54,057,513 and 2,699,262 shares of beneficial interest outstanding) $ 20.03 - ------------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $9,542,483 and 470,280 shares of beneficial interest outstanding) $ 20.29 - ------------------------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $5,931,722 and 288,431 shares of beneficial interest outstanding) $ 20.57
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 27 | OPPENHEIMER SELECT VALUE FUND STATEMENT OF OPERATIONS For the Year Ended April 30, 2007 - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- INVESTMENT INCOME - ------------------------------------------------------------------------------------------------------- Dividends: Unaffiliated companies (net of foreign withholding taxes of $104,329) $ 3,030,672 Affiliated companies 221,018 - ------------------------------------------------------------------------------------------------------- Interest 182,655 - ------------------------------------------------------------------------------------------------------- Other income 1,153 --------------- Total investment income 3,435,498 - ------------------------------------------------------------------------------------------------------- EXPENSES - ------------------------------------------------------------------------------------------------------- Management fees 1,347,316 - ------------------------------------------------------------------------------------------------------- Distribution and service plan fees: Class A 298,235 Class B 196,902 Class C 315,055 Class N 25,648 - ------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 176,305 Class B 46,432 Class C 55,823 Class N 8,452 Class Y 21 - ------------------------------------------------------------------------------------------------------- Shareholder communications: Class A 42,080 Class B 13,263 Class C 12,833 Class N 1,527 - ------------------------------------------------------------------------------------------------------- Trustees' compensation 12,855 - ------------------------------------------------------------------------------------------------------- Custodian fees and expenses 3,056 - ------------------------------------------------------------------------------------------------------- Other 37,159 --------------- Total expenses 2,592,962 Less reduction to custodian expenses (1,330) Less waivers and reimbursements of expenses (4,265) --------------- Net expenses 2,587,367 - ------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 848,131
28 | OPPENHEIMER SELECT VALUE FUND - ------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - ------------------------------------------------------------------------------------------------------- Net realized gain on: Investments $ 15,717,249 Foreign currency transactions 146,064 --------------- Net realized gain 15,863,313 - ------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on: Investments 26,982,799 Translation of assets and liabilities denominated in foreign currencies (113,904) --------------- Net change in unrealized appreciation 26,868,895 - ------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 43,580,339 ===============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 29 | OPPENHEIMER SELECT VALUE FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED APRIL 30, 2007 2006 - ------------------------------------------------------------------------------------------------------------- OPERATIONS - ------------------------------------------------------------------------------------------------------------- Net investment income $ 848,131 $ 155,280 - ------------------------------------------------------------------------------------------------------------- Net realized gain 15,863,313 1,813,566 - ------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation 26,868,895 6,569,705 ------------------------------- Net increase in net assets resulting from operations 43,580,339 8,538,551 - ------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ------------------------------------------------------------------------------------------------------------- Dividends from net investment income: Class A (633,818) (70,405) Class B -- -- Class C (4,089) -- Class N (21,788) -- Class Y (17,617) (3,812) ------------------------------- (677,312) (74,217) - ------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (3,070,700) (1,246,748) Class B (526,219) (215,494) Class C (858,028) (369,477) Class N (139,348) (47,718) Class Y (55,090) (35,807) ------------------------------- (4,649,385) (1,915,244) - ------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - ------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from beneficial interest transactions: Class A 108,803,314 56,516,183 Class B 13,451,029 10,205,020 Class C 28,288,447 13,459,795 Class N 5,716,795 1,769,932 Class Y 3,514,927 1,349,107 ------------------------------- 159,774,512 83,300,037 - ------------------------------------------------------------------------------------------------------------- NET ASSETS - ------------------------------------------------------------------------------------------------------------- Total increase 198,028,154 89,849,127 - ------------------------------------------------------------------------------------------------------------- Beginning of period 110,405,606 20,556,479 ------------------------------- End of period (including accumulated net investment income of $267,578 and $97,039, respectively) $ 308,433,760 $ 110,405,606 ===============================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 30 | OPPENHEIMER SELECT VALUE FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
CLASS A YEAR ENDED APRIL 30, 2007 2006 2005 2004 2003 1 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 17.06 $ 14.88 $ 13.52 $ 10.17 $ 10.00 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) .13 2,3 .09 2 .04 2 -- 4 (.03) Net realized and unrealized gain 3.80 2.69 1.84 3.75 .20 ----------------------------------------------------------------------------- Total from investment operations 3.93 2.78 1.88 3.75 .17 - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.09) (.03) -- -- -- Distributions from net realized gain (.46) (.57) (.52) (.40) -- ----------------------------------------------------------------------------- Total dividends and/or distributions to shareholders (.55) (.60) (.52) (.40) -- - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 20.44 $ 17.06 $ 14.88 $ 13.52 $ 10.17 ============================================================================= - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 5 23.29% 18.92% 13.89% 37.02% 1.70% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 208,402 $ 73,716 $ 12,842 $ 6,706 $ 3,411 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 121,668 $ 34,760 $ 11,568 $ 4,706 $ 3,151 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 6 Net investment income (loss) 0.70% 3 0.56% 0.27% (0.04)% (0.85)% Total expenses 1.20% 7 1.30% 1.35% 1.96% 2.60% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.20% 1.30% 1.33% 1.50% 2.35% - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 107% 79% 85% 102% 66%
1. For the period from November 26, 2002 (commencement of operations) to April 30, 2003. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Net investment income per share and the net investment income ratio include $.05 and 0.28%, respectively, resulting from a special dividend from Ashland, Inc. in October 2006. 4. Less than $0.005 per share. 5. Assumes an investment at net asset value on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total return. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 6. Annualized for periods of less than one full year. 7. Expenses including indirect expenses from affiliated fund were as follows: Year Ended April 30, 2007 1.20% SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 31 | OPPENHEIMER SELECT VALUE FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS B YEAR ENDED APRIL 30, 2007 2006 2005 2004 1 - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 16.75 $ 14.73 $ 13.51 $ 14.19 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.03) 2,3 (.06) 2 (.09) 2 (.01) Net realized and unrealized gain (loss) 3.73 2.65 1.83 (.67) -------------------------------------------------------------- Total from investment operations 3.70 2.59 1.74 (.68) - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- -- -- -- Distributions from net realized gain (.46) (.57) (.52) -- -------------------------------------------------------------- Total dividends and/or distributions to shareholders (.46) (.57) (.52) -- - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 19.99 $ 16.75 $ 14.73 $ 13.51 ============================================================== - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 4 22.27% 17.79% 12.85% (4.79)% - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 30,500 $ 13,040 $ 2,121 $ 116 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 19,762 $ 5,924 $ 948 $ 44 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 5 Net investment loss (0.16)% 3 (0.39)% (0.65)% (1.19)% Total expenses 2.07% 6 2.27% 2.73% 5.71% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 2.07% 2.24% 2.25% 2.25% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 107% 79% 85% 102%
1. For the period from February 27, 2004 (inception of offering) to April 30, 2004. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Net investment income per share and the net investment income ratio include $.05 and 0.28%, respectively, resulting from a special dividend from Ashland, Inc. in October 2006. 4. Assumes an investment at net asset value on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total return. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 5. Annualized for periods of less than one full year. 6. Expenses including indirect expenses from affiliated fund were as follows: Year Ended April 30, 2007 2.07% SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 32 | OPPENHEIMER SELECT VALUE FUND
CLASS C YEAR ENDED APRIL 30, 2007 2006 2005 2004 1 - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 16.77 $ 14.73 $ 13.52 $ 14.19 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment loss (.01) 2,3 (.04) 2 (.10) 2 (.01) Net realized and unrealized gain (loss) 3.73 2.65 1.83 (.66) -------------------------------------------------------------- Total from investment operations 3.72 2.61 1.73 (.67) - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- 4 -- -- -- Distributions from net realized gain (.46) (.57) (.52) -- -------------------------------------------------------------- Total dividends and/or distributions to shareholders (.46) (.57) (.52) -- - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 20.03 $ 16.77 $ 14.73 $ 13.52 ============================================================== - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 5 22.38% 17.93% 12.77% (4.72)% - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 54,058 $ 19,090 $ 4,439 $ 174 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 31,599 $ 9,872 $ 2,155 $ 51 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 6 Net investment loss (0.08)% 3 (0.27)% (0.66)% (1.01)% Total expenses 1.99% 7 2.13% 2.47% 5.48% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.99% 2.13% 2.25% 2.25% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 107% 79% 85% 102%
1. For the period from February 27, 2004 (inception of offering) to April 30, 2004. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Net investment income per share and the net investment income ratio include $.05 and 0.28%, respectively, resulting from a special dividend from Ashland, Inc. in October 2006. 4. Less than $0.005 per share. 5. Assumes an investment at net asset value on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total return. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 6. Annualized for periods of less than one full year. 7. Expenses including indirect expenses from affiliated fund were as follows: Year Ended April 30, 2007 1.99% SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 33 | OPPENHEIMER SELECT VALUE FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
CLASS N YEAR ENDED APRIL 30, 2007 2006 2005 2004 1 - -------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 16.96 $ 14.81 $ 13.52 $ 14.19 - -------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) .08 2,3 .04 2 (.02) 2 (.01) Net realized and unrealized gain (loss) 3.78 2.68 1.83 (.66) ------------------------------------------------------------- Total from investment operations 3.86 2.72 1.81 (.67) - -------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.07) -- -- -- Distributions from net realized gain (.46) (.57) (.52) -- ------------------------------------------------------------- Total dividends and/or distributions to shareholders (.53) (.57) (.52) -- - -------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 20.29 $ 16.96 $ 14.81 $ 13.52 ============================================================= - -------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 4 22.98% 18.58% 13.37% (4.72)% - -------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 9,542 $ 2,701 $ 763 $ 7 - -------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 5,150 $ 1,289 $ 438 $ 3 - -------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 5 Net investment income (loss) 0.45% 3 0.24% (0.13)% (0.73)% Total expenses 1.47% 6 1.63% 1.79% 4.96% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.46% 1.63% 1.74% 1.75% - -------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 107% 79% 85% 102%
1. For the period from February 27, 2004 (inception of offering) to April 30, 2004. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Net investment income per share and the net investment income ratio include $.05 and 0.28%, respectively, resulting from a special dividend from Ashland, Inc. in October 2006. 4. Assumes an investment at net asset value on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total return. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 5. Annualized for periods of less than one full year. 6. Expenses including indirect expenses from affiliated fund were as follows: Year Ended April 30, 2007 1.47% SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 34 | OPPENHEIMER SELECT VALUE FUND
CLASS Y YEAR ENDED APRIL 30, 2007 2006 2005 2004 1 - -------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 17.13 $ 14.91 $ 13.53 $ 14.19 - -------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .21 2,3 .14 2 .06 2 .01 Net realized and unrealized gain (loss) 3.84 2.71 1.84 (.67) ------------------------------------------------------------- Total from investment operations 4.05 2.85 1.90 (.66) - -------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income (.15) (.06) -- -- Distributions from net realized gain (.46) (.57) (.52) -- ------------------------------------------------------------- Total dividends and/or distributions to shareholders (.61) (.63) (.52) -- - -------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 20.57 $ 17.13 $ 14.91 $ 13.53 ============================================================= - -------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 4 23.88% 19.36% 14.03% (4.65)% - -------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 5,932 $ 1,859 $ 392 $ 1 - -------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 2,577 $ 968 $ 175 $ 1 - -------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 5 Net investment income 1.15% 3 0.89% 0.42% 0.26% Total expenses 0.77% 6 0.97% 1.18% 4.47% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.77% 0.97% 1.18% 1.25% - -------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 107% 79% 85% 102%
1. For the period from February 27, 2004 (inception of offering) to April 30, 2004. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Net investment income per share and the net investment income ratio include $.05 and 0.28%, respectively, resulting from a special dividend from Ashland, Inc. in October 2006. 4. Assumes an investment at net asset value on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total return. Total returns are not annualized for periods of less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 5. Annualized for periods of less than one full year. 6. Expenses including indirect expenses from affiliated fund were as follows: Year Ended April 30, 2007 0.77% SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 35 | OPPENHEIMER SELECT VALUE FUND NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Select Value Fund (the Fund), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to seek capital appreciation over the long-term. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC, however, the institutional investor may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. No such plan has been adopted for Class Y shares. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares as of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities listed or traded on National Stock Exchanges or other domestic exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. Securities traded on NASDAQ(R) are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing "bid" and "asked" prices, and if not, at the closing bid price. Securities traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, as identified by the portfolio pricing service, prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities will be valued at the mean between the "bid" and "asked" prices. Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund's assets are 36 | OPPENHEIMER SELECT VALUE FUND valued. Options are valued daily based upon the last sale price on the principal exchange on which the option is traded. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Trustees. Investments in open-end registered investment companies (including affiliated funds) are valued at that fund's net asset value. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars as of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Foreign exchange rates may be valued primarily using dealer supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund ("IMMF") which seeks current income and stability of principal. IMMF is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act of 1940, as amended. The Manager is also the investment advisor of IMMF. The Fund's investment in IMMF is included in the Statement of Investments. As a shareholder, the Fund is subject to its proportional share of IMMF's 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. 37 | OPPENHEIMER SELECT VALUE FUND NOTES TO FINANCIAL STATEMENTS 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 tax components of capital shown in the table below represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes. NET UNREALIZED APPRECIATION BASED ON COST OF SECURITIES AND UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES ------------------------------------------------------------------------- $7,180,248 $3,718,226 $8,654 $34,762,297 1. The Fund had $8,654 of straddle losses which were deferred. 2. During the fiscal year ended April 30, 2007, the Fund did not utilize any capital loss carryforward. 3. During the fiscal year ended April 30, 2006, the Fund did not utilize any capital loss carryforward. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund. Accordingly, the following amounts have been reclassified for April 30, 2007. Net assets of the Fund were unaffected by the reclassifications. REDUCTION TO REDUCTION TO ACCUMULATED ACCUMULATED NET INCREASE TO NET INVESTMENT REALIZED GAIN PAID-IN CAPITAL INCOME ON INVESTMENTS 4 ------------------------------------------------------------------------- $1,311,199 $280 $1,310,919 4. $1,311,199, including $459,105 of long-term capital gain, was distributed in connection with Fund share redemptions. 38 | OPPENHEIMER SELECT VALUE FUND The tax character of distributions paid during the years ended April 30, 2007 and April 30, 2006 was as follows: YEAR ENDED YEAR ENDED APRIL 30, 2007 APRIL 30, 2006 ------------------------------------------------------------------------ Distributions paid from: Ordinary income $ 3,738,478 $ 1,323,273 Long-term capital gain 1,588,219 666,188 ------------------------------- Total $ 5,326,697 $ 1,989,461 =============================== The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of April 30, 2007 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $ 268,040,372 ============= Gross unrealized appreciation $ 36,158,071 Gross unrealized depreciation (1,395,774) ------------- Net unrealized appreciation $ 34,762,297 ============= - -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the "Plan") for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the "Freeze Date") and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active independent trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan. During the year ended April 30, 2007, the Fund's projected benefit obligations were increased by $9,617 and payments of $1,714 were made to retired trustees, resulting in an accumulated liability of $9,137 as of April 30, 2007. The Board of Trustees has adopted a compensation deferral plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. Deferral of trustees' fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund's assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the compensation deferral plan. 39 | OPPENHEIMER SELECT VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. - -------------------------------------------------------------------------------- CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts, to the extent they are not offset by positive cash balances maintained by the Fund, at a rate equal to the Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- SECURITY TRANSACTIONS. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost. - -------------------------------------------------------------------------------- INDEMNIFICATIONS. The Fund's organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 40 | OPPENHEIMER SELECT VALUE FUND - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
YEAR ENDED APRIL 30, 2007 YEAR ENDED APRIL 30, 2006 SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------- CLASS A Sold 7,372,389 $ 136,331,880 3,754,544 $ 61,344,879 Dividends and/or distributions reinvested 183,194 3,469,694 77,769 1,264,535 Redeemed (1,682,588) (30,998,260) (373,600) (6,093,231) ------------------------------------------------------- Net increase 5,872,995 $ 108,803,314 3,458,713 $ 56,516,183 ======================================================= - ----------------------------------------------------------------------------------------- CLASS B Sold 1,052,039 $ 18,766,112 706,240 $ 11,358,814 Dividends and/or distributions reinvested 26,172 486,275 12,478 199,901 Redeemed (330,734) (5,801,358) (84,131) (1,353,695) ------------------------------------------------------- Net increase 747,477 $ 13,451,029 634,587 $ 10,205,020 ======================================================= - ----------------------------------------------------------------------------------------- CLASS C Sold 1,837,434 $ 33,281,239 890,529 $ 14,326,508 Dividends and/or distributions reinvested 42,789 796,310 21,413 343,251 Redeemed (319,298) (5,789,102) (74,981) (1,209,964) ------------------------------------------------------- Net increase 1,560,925 $ 28,288,447 836,961 $ 13,459,795 ======================================================= - ----------------------------------------------------------------------------------------- CLASS N Sold 359,982 $ 6,599,603 120,978 $ 1,989,571 Dividends and/or distributions reinvested 8,478 159,566 2,927 47,387 Redeemed (57,441) (1,042,374) (16,142) (267,026) ------------------------------------------------------- Net increase 311,019 $ 5,716,795 107,763 $ 1,769,932 ======================================================= - ----------------------------------------------------------------------------------------- CLASS Y Sold 201,177 $ 3,871,396 98,332 $ 1,609,551 Dividends and/or distributions reinvested 3,818 72,665 2,426 39,574 Redeemed (25,105) (429,134) (18,524) (300,018) ------------------------------------------------------- Net increase 179,890 $ 3,514,927 82,234 $ 1,349,107 =======================================================
- -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IMMF, for the year ended April 30, 2007, were as follows: PURCHASES SALES -------------------------------------------------------------- Investment securities $316,590,250 $186,342,890 41 | OPPENHEIMER SELECT VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee at an annual rate of average net assets as shown in the following table: FEE SCHEDULE --------------------------------- Up to $200 million 0.75% Next $200 million 0.72 Next $200 million 0.69 Next $200 million 0.66 Over $800 million 0.60 - -------------------------------------------------------------------------------- TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended April 30, 2007, the Fund paid $267,832 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 per annum for assets of $10 million or more. The Class Y shares are subject to the minimum fees in the event that the per account fee does not equal or exceed the applicable minimum fees. OFS may voluntarily waive the minimum fees. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor) acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions periodically for providing personal services and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Fees incurred by the Fund under the plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class N shares to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares and 0.25% on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor determines its uncompensated expenses under the 42 | OPPENHEIMER SELECT VALUE FUND plan at calendar quarter ends. The Distributor's aggregate uncompensated expenses under the plan at March 31, 2007 for Class B, Class C and Class N shares were $111,880, $300,149 and $57,946, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - ----------------------------------------------------------------------------------------------- April 30, 2007 $321,271 $482 $16,795 $4,492 $315
- -------------------------------------------------------------------------------- WAIVERS AND REIMBURSEMENTS OF EXPENSES. Effective February 27, 2004, the Manager has voluntarily undertaken to reimburse the Fund for total expenses exceeding the following limits: 1.50% for Class A shares, 2.25% for Class B shares, 2.25% for Class C shares, 1.75% for Class N shares and 1.25% for Class Y shares. That voluntary undertaking may be revised or terminated by the Manager at any time without notice to shareholders. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. This undertaking may be amended or withdrawn at any time. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund's investment in IMMF. During the year ended April 30, 2007, the Manager waived $4,265 for IMMF management fees. - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS A foreign currency contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. The Fund may enter into foreign currency contracts to settle specific purchases or sales of securities denominated in a foreign currency and for protection from adverse exchange rate fluctuation. Risks to the Fund include the potential inability of the counterparty to meet the terms of the contract. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Fund and the resulting unrealized appreciation or depreciation are determined using prevailing foreign currency exchange rates. Unrealized appreciation and depreciation on foreign currency contracts are reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations with the change in unrealized appreciation or depreciation. 43 | OPPENHEIMER SELECT VALUE FUND NOTES TO FINANCIAL STATEMENTS Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY CONTRACTS Continued The Fund may realize a gain or loss upon the closing or settlement of the foreign transaction. Contracts closed or settled with the same broker are recorded as net realized gains or losses. Such realized gains and losses are reported with all other foreign currency gains and losses in the Statement of Operations. As of April 30, 2007, the Fund had no outstanding foreign currency contracts. - -------------------------------------------------------------------------------- 6. RECENT ACCOUNTING PRONOUNCEMENTS In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement No. 109, ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions taken in the course of preparing the Fund's tax returns to determine whether it is "more-likely-than-not" that tax positions taken in the Fund's tax return will be ultimately sustained. A tax liability and expense must be recorded in respect of any tax position that, in Management's judgment, will not be fully realized. FIN 48 is effective for fiscal years beginning after December 15, 2006. As of April 30, 2007, the Manager has evaluated the implications of FIN 48 and does not currently anticipate a material impact to the Fund's financial statements. The Manager will continue to monitor the Fund's tax positions prospectively for potential future impacts. In September 2006, the FASB issued Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. As of April 30, 2007, the Manager does not believe the adoption of SFAS No. 157 will materially impact the financial statement amounts; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for the period. 44 | OPPENHEIMER SELECT VALUE FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER SELECT VALUE FUND: We have audited the accompanying statement of assets and liabilities of Oppenheimer Select Value Fund, including the statement of investments, as of April 30, 2007, the related statement of operations for the year then ended, and the statements of changes in net assets and the financial highlights for each of the years in the two-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for the period November 26, 2002 (commencement of operations) to April 30, 2005, were audited by another independent registered public accounting firm, whose report dated May 26, 2005, expressed an unqualified opinion thereon. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of April 30, 2007, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Select Value Fund as of April 30, 2007, the results of its operations for the year then ended, and the changes in its net assets and financial highlights for each of the years in two-year period then ended, in conformity with U.S. generally accepted accounting principles. KPMG LLP Denver, Colorado June 14, 2007 45 | OPPENHEIMER SELECT VALUE FUND FEDERAL INCOME TAX INFORMATION Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- In early 2007, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2006. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Capital gain distributions of $0.1556 per share were paid to Class A, Class B, Class C, Class N and Class Y shareholders, respectively, on December 15, 2006. Whether received in stock or in cash, the capital gain distribution should be treated by shareholders as a gain from the sale of the capital assets held for more than one year (long-term capital gains). Dividends, if any, paid by the Fund during the fiscal year ended April 30, 2007 which are not designated as capital gain distributions should be multiplied by 19.79% to arrive at the amount eligible for the corporate dividend-received deduction. A portion, if any, of the dividends paid by the Fund during the fiscal year ended April 30, 2007 which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. $2,891,444 of the Fund's fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2007, shareholders of record received information regarding the percentage of distributions that are eligible for lower individual income tax rates. Recent tax legislation allows a regulated investment company to designate distributions not designated as capital gain distributions, as either interest related dividends or short-term capital gain dividends, both of which are exempt from the U.S. withholding tax applicable to non U.S. taxpayers. For the fiscal year ended April 30, 2007, $45,645 or 6.74% of the ordinary distributions paid by the Fund qualifies as an interest related dividend and $10,570,920 or 100% of the short-term capital gain distribution paid by the Fund qualifies as a short-term capital gain dividend. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 46 | OPPENHEIMER SELECT VALUE 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. 47 | OPPENHEIMER SELECT VALUE FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Each year, the Board of Trustees (the "Board"), including a majority of the independent Trustees, is required to determine whether to renew the Fund's investment advisory agreement (the "Agreement"). The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Manager provide, such information as may be reasonably necessary to evaluate the terms of the Agreement. The Board employs an independent consultant to prepare a report that provides information, including comparative information that the Board requests for that purpose. In addition, the Board receives information throughout the year regarding Fund services, fees, expenses and performance. The Manager and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Manager's services, (ii) the investment performance of the Fund and the Manager, (iii) the fees and expenses of the Fund, including comparative expense information, (iv) the profitability of the Manager and its affiliates, including an analysis of the cost of providing services by the Manager and its affiliates, (v) the extent to which economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Manager from its relationship with the Fund. The Board was aware that there are alternatives to retaining the Manager. NATURE AND EXTENT OF SERVICES. The Board considered information about the nature and extent of the services provided to the Fund and information regarding the Manager's key personnel who provide such services. The Manager's duties include providing the Fund with the services of the portfolio manager and the Manager's investment team, who provide research, analysis and other advisory services in regard to the Fund's investments; securities trading services; oversight of third party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund's investment restrictions. The Manager is responsible for providing certain administrative services to the Fund as well. Those services include providing and supervising all administrative and clerical personnel who are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund's operations; preparing and filing reports required by the Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by Federal and state securities laws for the sale of the Fund's shares. The Manager also provides the Fund with office space, facilities and equipment. 48 | OPPENHEIMER SELECT VALUE FUND QUALITY OF SERVICES. The Board also considered the quality of the services provided and the quality of the Manager's resources that are available to the Fund. The Board took account of the fact that the Manager has had over forty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Manager's administrative, accounting, legal and compliance services, and information the Board has received regarding the experience and professional qualifications of the Manager's personnel and the size and functions of its staff. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of Chris Leavy and the Manager's Value investment team and analysts. The Board members also considered their experiences with the Manager and its officers and other personnel through their service on the boards of the Fund and other funds advised by the Manager. The Board considered information regarding the quality of services provided by affiliates of the Manager, which its members have become knowledgeable about in connection with the renewal of the Fund's service agreements. In light of the foregoing, the Board concluded that the Fund benefits from the services provided under the Agreement and from the Manager's experience, reputation, personnel, operations, and resources. INVESTMENT PERFORMANCE OF THE MANAGER AND THE FUND. During the year, the Manager provided information on the investment performance of the Fund and the Manager at each Board meeting, including comparative performance information. The Board also reviewed information, prepared by the Manager and by the independent consultant, comparing the Fund's historical performance to relevant market indices and to the performance of all other retail front-end load and no-load multi-cap value funds advised by the Manager and by other investment advisers. The Board noted that the Fund's three-year and since inception performance were better than its peer group median. However its one-year performance was below its peer group median. MANAGEMENT FEES AND EXPENSES. The Board reviewed the fees paid to the Manager and its affiliates and the other expenses borne by the Fund. The Board also evaluated the comparability of the fees charged and the services provided to the Fund to the fees and services for other clients or accounts advised by the Manager. The independent consultant provided comparative data in regard to the fees and expenses of the Fund, other multi-cap value funds and other funds with comparable asset levels and distribution features. The Board noted that the Manager has agreed to voluntarily undertake to reimburse the Fund for total annual operating expenses exceeding the following limits: 1.50% for Class A shares, 2.25% for Class B shares, 2.25% for Class C shares, 1.75% for Class N shares and 1.25% for Class Y shares. The voluntary undertaking may be revised or terminated by the 49 | OPPENHEIMER SELECT VALUE FUND BOARD APPROVAL OF THE FUND'S INVESTMENT ADVISORY AGREEMENT Unaudited / Continued - -------------------------------------------------------------------------------- Manager at any time without notice to shareholders. The Board noted that the Fund's actual management fees are higher than its peer group median although its contractual management fees and total expenses are lower than its peer group median. ECONOMIES OF SCALE. The Board reviewed the extent to which the Manager may realize economies of scale in managing and supporting the Fund, the extent to which those economies of scale benefit the Fund's shareholders and the current level of Fund assets in relation to the Fund's breakpoint schedule for its management fees. The Board also noted the Fund's breakpoints, which are intended to share economies of scale that may exist as the Fund grows with its shareholders. BENEFITS TO THE MANAGER. The Board considered information regarding the Manager's costs in serving as the Fund's investment adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Manager's profitability from its relationship with the Fund. The Board considered that the Manager must be able to pay and retain experienced professional personnel at competitive rates to provide services to the Fund and that maintaining the financial viability of the Manager is important in order for the Manager to continue to provide significant services to the Fund and its shareholders. In addition to considering the profits realized by the Manager, the Board considered information regarding the direct and indirect benefits the Manager receives as a result of its relationship with the Fund, including compensation paid to the Manager's affiliates for services provided and research provided to the Manager in connection with permissible brokerage arrangements (soft dollar arrangements). CONCLUSIONS. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and the independent Trustees. Fund counsel is independent of the Manager within the meaning and intent of the Securities and Exchange Commission Rules. Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, concluded that the nature, extent and quality of the services provided to the Fund by the Manager are a benefit to the Fund and in the best interest of the Fund's shareholders and that the amount and structure of the compensation received by the Manager and its affiliates are reasonable in relation to the services provided. Accordingly, the Board elected to continue the Agreement for another year. In arriving at this decision, the Board did not single out any factor or factors as being more important than others, but considered all of the factors together. The Board judged the terms and conditions of the Agreement, including the management fee, in light of all of the surrounding circumstances. 50 | OPPENHEIMER SELECT VALUE FUND TRUSTEES AND OFFICERS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING THE PAST 5 YEARS; THE FUND, LENGTH OF OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD; NUMBER OF SERVICE, AGE PORTFOLIOS IN THE FUND COMPLEX CURRENTLY OVERSEEN INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS TRUSTEES 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. BRIAN F. WRUBLE, General Partner of Odyssey Partners, L.P. (hedge Chairman of the Board of fund) (since September 1995); Director of Special Trustees (since 2007), Value Opportunities Fund, LLC (registered Trustee (since 2005) investment company) (since September 2004); Age: 64 Investment Advisory Board Member of Zurich Financial Services (insurance) (since October 2004); Board of Governing Trustees of The Jackson Laboratory (non-profit) (since August 1990); Trustee of the Institute for Advanced Study (non-profit educational institute) (since May 1992); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004) and Managing Principal (1997-December 1998); Trustee of Research Foundation of AIMR (2000-2002) (investment research, non-profit); Governor, Jerome Levy Economics Institute of Bard College (August 1990-September 2001) (economics research); Director of Ray & Berendtson, Inc. (May 2000-April 2002) (executive search firm). Oversees 62 portfolios in the OppenheimerFunds complex. MATTHEW P. FINK, Trustee of the Committee for Economic Development Trustee (since 2005) (policy research foundation) (since 2005); Age: 66 Director of ICI Education Foundation (education foundation) (since October 1991); President of the Investment Company Institute (trade association) (October 1991-June 2004); Director of ICI Mutual Insurance Company (insurance company) (October 1991-June 2004). Oversees 52 portfolios in the OppenheimerFunds complex. ROBERT G. GALLI, A director or trustee of other Oppenheimer funds. Trustee (since 2005) Oversees 62 portfolios in the OppenheimerFunds Age: 73 complex. PHILLIP A. GRIFFITHS, Distinguished Presidential Fellow for Trustee (since 2005) International Affairs (since 2002) and Member Age: 68 (since 1979) of the National Academy of Sciences; Council on Foreign Relations (since 2002); Director of GSI Lumonics Inc. (precision medical equipment supplier) (since 2001); Senior Advisor of The Andrew W. Mellon Foundation (since 2001); Chair of Science Initiative Group (since 1999); Member of the American Philosophical Society (since 1996); Trustee of Woodward Academy (since 1983); Foreign Associate of Third World Academy of Sciences; Director of the Institute for Advanced Study (1991-2004); Director of Bankers Trust New York Corporation (1994-1999); Provost at Duke University (1983-1991). Oversees 52 portfolios in the OppenheimerFunds complex. MARY F. MILLER, Trustee of the American Symphony Orchestra Trustee (since 2005) (not-for-profit) (since October 1998); and Senior Age: 64 Vice President and General Auditor of American Express Company (financial services company) (July 1998-February 2003). Oversees 52 portfolios in the OppenheimerFunds complex. JOEL W. MOTLEY, Managing Director of Public Capital Advisors, LLC Trustee (since 2005) (privately-held financial adviser) (since 2006); Age: 55 Director of Columbia Equity Financial Corp. (privately-held financial adviser) (since 2002); Managing Director of Carmona Motley, Inc. (privately-held financial adviser) (since January 2002); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial adviser) (January 1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign Relations, Member of the Investment Committee of the Episcopal Church of America, Member of the Investment Committee and Board of Human Rights 51 | OPPENHEIMER SELECT VALUE FUND TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- JOEL W. MOTLEY Watch and the Investment Committee of Historic continued Hudson Valley. Oversees 52 portfolios in the OppenheimerFunds complex. KENNETH A. RANDALL, Director of Dominion Resources, Inc. (electric Trustee (since 2005) utility holding company) (February 1972-October Age: 80 2005); Former Director of Prime Retail, Inc. (real estate investment trust), Dominion Energy Inc. (electric power and oil & gas producer), Lumberman's Mutual Casualty Company, American Motorists Insurance Company and American Manufacturers Mutual Insurance Company; Former President and Chief Executive Officer of The Conference Board, Inc. (international economic and business research). Oversees 52 portfolios in the OppenheimerFunds complex. RUSSELL S. REYNOLDS, JR., Chairman of The Directorship Search Group, Inc. Trustee (since 2005) (corporate governance consulting and executive Age: 75 recruiting) (since 1993); Life Trustee of International House (non-profit educational organization); Former Trustee of the Historical Society of the Town of Greenwich; Former Director of Greenwich Hospital Association; Founder, Chairman and Chief Executive Officer of Russell Reynolds Associates, Inc. (1969-1993); Banker at J.P. Morgan & Co. (1958-1966); 1st Lt. Strategic Air Command, U.S. Air Force (1954-1958). Oversees 52 portfolios in the OppenheimerFunds complex. JOSEPH M. WIKLER, Director of the following medical device Trustee (since 2002) companies: Medintec (since 1992) and Cathco Age: 66 (since 1996); Director of Lakes Environmental Association (since 1996); Member of the Investment Committee of the Associated Jewish Charities of Baltimore (since 1994); Director of Fortis/Hartford mutual funds (1994-December 2001). Oversees 52 portfolios in the OppenheimerFunds complex. PETER I. WOLD, President of Wold Oil Properties, Inc. (oil and Trustee (since 2002) gas exploration and production company) (since Age: 59 1994); Vice President, Secretary and Treasurer of Wold Trona Company, Inc. (soda ash processing and production) (1996-2006); Vice President of American Talc Company, Inc. (talc mining and milling) (since 1999); Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Director and Chairman of the Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and Director of PacifiCorp. (electric utility) (1995-1999). Oversees 52 portfolios in the OppenheimerFunds complex. - -------------------------------------------------------------------------------- INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IS TWO WORLD FINANCIAL AND OFFICER CENTER, 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NEW YORK 10281-1008. MR. MURPHY SERVES AS A TRUSTEE FOR AN INDEFINITE TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL AND AS AN OFFICER FOR AN INDEFINITE TERM, OR UNTIL HIS RESIGNATION, RETIREMENT, DEATH OR REMOVAL. MR. MURPHY IS AN INTERESTED TRUSTEE DUE TO HIS POSITIONS WITH OPPENHEIMERFUNDS, INC. AND ITS AFFILIATES. JOHN V. MURPHY, Chairman, Chief Executive Officer and Director of Trustee, President and the Manager (since June 2001); President of the Principal Executive Officer Manager (September 2000-March 2007); President (since 2002) and a director or trustee of other Oppenheimer Age: 57 funds; President and Director of Oppenheimer Acquisition Corp. ("OAC") (the Manager's parent holding company) and of Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager) (since November 2001); Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July 2001); Director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, 52 | OPPENHEIMER SELECT VALUE FUND JOHN V. MURPHY, Trinity Investment Management Corporation and continued Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 1, 2001) and Director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC's parent company) (since February 1997); Director of DLB Acquisition Corporation (holding company parent of Babson Capital Management LLC) (since June 1995); Member of the Investment Company Institute's Board of Governors (since October 3, 2003); Chief Operating Officer of the Manager (September 2000-June 2001); President and Trustee of MML Series Investment Fund and MassMutual Select Funds (open-end investment companies) (November 1999-November 2001); Director of C.M. Life Insurance Company (September 1999-August 2000); President, Chief Executive Officer and Director of MML Bay State Life Insurance Company (September 1999-August 2000); Director of Emerald Isle Bancorp and Hibernia Savings Bank (wholly-owned subsidiary of Emerald Isle Bancorp) (June 1989-June 1998). Oversees 99 portfolios in the OppenheimerFunds complex. - -------------------------------------------------------------------------------- OTHER OFFICERS OF THE ADDRESSES OF THE OFFICERS IN THE CHART BELOW THE FUND ARE AS FOLLOWS: FOR MESSRS LEAVY, DAMIAN, ZACK, GILLESPIE AND MS. BLOOMBERG, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, NEW YORK, NEW YORK 10281-1008, FOR MESSRS. VANDEHEY, WIXTED, PETERSEN, SZILAGYI AND MS. IVES, 6803 S. TUCSON WAY, CENTENNIAL, COLORADO 80112-3924. EACH OFFICER SERVES FOR AN INDEFINITE TERM OR UNTIL HIS OR HER RESIGNATION, RETIREMENT, DEATH OR REMOVAL. CHRISTOPHER LEAVY, Director of Equities (since January 2007); Senior Vice President and Portfolio Vice President of the Manager (since September Manager (since 2002) 2000); portfolio manager of Morgan Stanley Dean Age: 36 Witter Investment Management (1997-September 2000). An officer of 7 portfolios in the OppenheimerFunds complex. JOHN DAMIAN, Vice President of the Manager (since September Vice President and Portfolio 2001); Senior Analyst/Director for Citigroup Manager (since 2004) Asset Management (November 1999-September 2001); Age: 38 Senior Research Analyst for Pzena Investment Management (October 1997-November 1999). An officer of 2 portfolios in the OppenheimerFunds complex. MARK S. VANDEHEY, Senior Vice President and Chief Compliance Vice President and Chief Officer of the Manager (since March 2004); Vice Compliance Officer President of OppenheimerFunds Distributor, Inc., (since 2004) Centennial Asset Management Corporation and Age: 56 Shareholder Services, Inc. (since June 1983). Former Vice President and Director of Internal Audit of the Manager (1997-February 2004). An officer of 99 portfolios in the OppenheimerFunds complex. BRIAN W. WIXTED, Senior Vice President and Treasurer of the Treasurer and Principal Manager (since March 1999); Treasurer of the Financial & Accounting following: HarbourView Asset Management Officer (since 2002) Corporation, Shareholder Financial Services, Age: 47 Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management, Inc. and Oppenheimer Partnership Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. (since May 2000), OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March 1999), Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief Operating Officer of Bankers Trust Company-Mutual Fund Services Division (March 1995-March 1999). An officer of 99 portfolios in the OppenheimerFunds complex. 53 | OPPENHEIMER SELECT VALUE FUND TRUSTEES AND OFFICERS Unaudited / Continued - -------------------------------------------------------------------------------- BRIAN S. PETERSEN, Vice President of the Manager (since February Assistant Treasurer 2007); Assistant Vice President of the Manager (since 2004) (August 2002-February 2007); Manager/Financial Age: 36 Product Accounting of the Manager (November 1998-July 2002). An officer of 99 portfolios in the OppenheimerFunds complex. BRIAN C. SZILAGYI, Assistant Vice President of the Manager (since Assistant Treasurer July 2004); Director of Financial Reporting and (since 2005) Compliance of First Data Corporation (April Age: 37 2003-July 2004); Manager of Compliance of Berger Financial Group LLC (May 2001-March 2003); Director of Mutual Fund Operations at American Data Services, Inc. (September 2000-May 2001). An officer of 99 portfolios in the OppenheimerFunds complex. ROBERT G. ZACK, Executive Vice President (since January 2004) and Secretary (since 2002) General Counsel (since March 2002) of the Age: 58 Manager; General Counsel and Director of the Distributor (since December 2001); General Counsel of Centennial Asset Management Corporation (since December 2001); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November 2001); Director of OppenheimerFunds (Asia) Limited (since December 2003); Senior Vice President (May 1985-December 2003), Acting General Counsel (November 2001-February 2002) and Associate General Counsel (May 1981-October 2001) of the Manager; Assistant Secretary of the following: Shareholder Services, Inc. (May 1985-November 2001), Shareholder Financial Services, Inc. (November 1989-November 2001), and OppenheimerFunds International Ltd. (September 1997-November 2001). An officer of 99 portfolios in the OppenheimerFunds complex. LISA I. BLOOMBERG, Vice President and Associate Counsel of the Assistant Secretary Manager (since May 2004); First Vice President (since 2004) (April 2001-April 2004), Associate General Age: 39 Counsel (December 2000-April 2004), Corporate Vice President (May 1999-April 2001) and Assistant General Counsel (May 1999-December 2000) of UBS Financial Services Inc. (formerly, PaineWebber Incorporated). An officer of 99 portfolios in the OppenheimerFunds complex. PHILLIP S. GILLESPIE, Senior Vice President and Deputy General Counsel Assistant Secretary of the Manager (since September 2004); First Vice (since 2004) President (2001-September 2004); Director Age: 43 (2000-September 2004) and Vice President (1998-2000) of Merrill Lynch Investment Management. An officer of 99 portfolios in the OppenheimerFunds complex. KATHLEEN T. IVES, Vice President (since June 1998) and Senior Assistant Secretary Counsel and Assistant Secretary (since October (since 2002) 2003) of the Manager; Vice President (since 1999) Age: 41 and Assistant Secretary (since October 2003) of the Distributor; Assistant Secretary of Centennial Asset Management Corporation (since October 2003); Vice President and Assistant Secretary of Shareholder Services, Inc. (since 1999); Assistant Secretary of OppenheimerFunds Legacy Program and Shareholder Financial Services, Inc. (since December 2001); Assistant Counsel of the Manager (August 1994-October 2003). An officer of 99 portfolios in the OppenheimerFunds complex. THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION ABOUT THE FUND'S TRUSTEES AND OFFICERS AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST. 54 | OPPENHEIMER SELECT VALUE FUND ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Board of Trustees of the registrant has determined that the registrant does not have an audit committee financial expert serving on its Audit Committee. In this regard, no member of the Audit Committee was identified as having all of the technical attributes identified in Instruction 2(b) to Item 3 of Form N-CSR to qualify as an "audit committee financial expert," whether through the type of specialized education or experience described in that Instruction. The Board has concluded that while the members of the Audit Committee collectively have the necessary attributes and experience required to serve effectively as an Audit Committee, no single member possesses all of the required technical attributes through the particular methods of education or experience set forth in the Instructions to be designated as an audit committee financial expert. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) Audit Fees The principal accountant for the audit of the registrant's annual financial statements billed $18,000 in fiscal 2007 and $14,000 in fiscal 2006. (b) Audit-Related Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed $225,954 for fiscal 2007 and $156,805 for fiscal 2006 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services include: internal control reviews and professional services relating to FAS 123R. (c) Tax Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees to the registrant during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed no such fees in fiscal 2007 and $6,536 in fiscal 2006 to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. Such services include: Preparation of form 5500. (d) All Other Fees The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years. The principal accountant for the audit of the registrant's annual financial statements billed no such fees during the last two fiscal years to the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. (e) (1) During its regularly scheduled periodic meetings, the registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting. Under applicable laws, pre-approval of non-audit services maybe waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit. (2) 100% (f) Not applicable as less than 50%. (g) The principal accountant for the audit of the registrant's annual financial statements billed $225,954 in fiscal 2007 and $163,341 in fiscal 2006 to the registrant and the registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934. (h) No such services were rendered. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS 1. The Fund's Governance Committee (the "Committee") will evaluate potential Board candidates to assess their qualifications. The Committee shall have the authority, upon approval of the Board, to retain an executive search firm to assist in this effort. The Committee may consider recommendations by business and personal contacts of current Board members and by executive search firms which the Committee may engage from time to time and may also consider shareholder recommendations. The Committee may consider the advice and recommendation of the Funds' investment manager and its affiliates in making the selection. 2. The Committee shall screen candidates for Board membership. The Committee has not established specific qualifications that it believes must be met by a trustee nominee. In evaluating trustee nominees, the Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an "interested person" as defined in the Investment Company Act of 1940; and whether the individual would be deemed an "audit committee financial expert" within the meaning of applicable SEC rules. The Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the Board. There are no differences in the manner in which the Committee evaluates nominees for trustees based on whether the nominee is recommended by a shareholder. 3. The Committee may consider nominations from shareholders for the Board at such times as the Committee meets to consider new nominees for the Board. The Committee shall have the sole discretion to determine the candidates to present to the Board and, in such cases where required, to shareholders. Recommendations for trustee nominees should, at a minimum, be accompanied by the following: o the name, address, and business, educational, and/or other pertinent background of the person being recommended; o a statement concerning whether the person is an "interested person" as defined in the Investment Company Act of 1940; o any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and o the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that person held Fund shares. The recommendation also can include any additional information which the person submitting it believes would assist the Committee in evaluating the recommendation. 4. Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Funds' investment adviser) would be deemed an "interested person" under the Investment Company Act of 1940. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside legal counsel may cause a person to be deemed an "interested person." 5. Before the Committee decides to nominate an individual as a trustee, Committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a trustee of a registered investment company. ITEM 11. CONTROLS AND PROCEDURES. Based on their evaluation of the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of 04/30/2007, the registrant's principal executive officer and principal financial officer found the registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. There have been no changes in the registrant's internal controls over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Exhibit attached hereto. (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 Select Value Fund By: /s/ John V. Murphy --------------------------- John V. Murphy Principal Executive Officer Date: 06/12/2007 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John V. Murphy --------------------------- John V. Murphy Principal Executive Officer Date: 06/12/2007 By: /s/ Brian W. Wixted --------------------------- Brian W. Wixted Principal Financial Officer Date: 06/12/2007 EX-99.CODE ETH 2 ra600_40267codeeth.txt RA600_40267CODEETH.TXT EX-99.CODE ETH CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF THE OPPENHEIMER FUNDS AND OF OPPENHEIMERFUNDS, INC. This Code of Ethics for Principal Executive and Senior Financial Officers (referred to in this document as the "Code") has been adopted by each of the investment companies for which OppenheimerFunds, Inc. or one of its subsidiaries or affiliates (referred to collectively in this document as "OFI") acts as investment adviser (individually, a "Fund" and collectively, the "Funds"), and by OFI to effectuate compliance with Section 406 under the Sarbanes-Oxley Act of 2002 and the rules adopted to implement Section 406. This Code applies to OFI's and each Fund's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions ("Covered Officers"). A listing of positions currently within the ambit of Covered Officers is attached as EXHIBIT A.(1) 1. PURPOSE OF THE CODE ------------------- This Code sets forth standards and procedures that are reasonably designed to deter wrongdoing and promote: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely, and understandable disclosure in reports and documents that a Fund files with, or submits to, the U.S. Securities and Exchange Commission ("SEC") and in other public communications made by the Fund; o compliance with applicable governmental laws, rules and regulations; o the prompt internal reporting of violations of this Code to the Code Administrator identified below; and o accountability for adherence to this Code. In general, the principles that govern honest and ethical conduct, including the avoidance of conflicts of interest between personal and professional relationships, - ------------------------------------- (1) The obligations imposed by this Code on Covered Officers are separate from and in addition to any obligations that may be imposed on such persons as Covered Persons under the Code of Ethics adopted by OFI and the Funds under Rule 17j-1 of the Investment Company Act of 1940, as amended and any other code of conduct applicable to Covered Officers in whatever capacity they serve. This Code does not incorporate by reference any provisions of the Rule 17j-1 Code of Ethics and accordingly, any violations or waivers granted under the Rule 17j-1 Code of Ethics will not be considered a violation or waiver under this Code. reflect, at the minimum, the following: (1) the duty at all times in performing any responsibilities as a Fund financial officer, controller, accountant or principal executive officer to place the interests of the Funds ahead of personal interests; (2) the fundamental standard that Covered Officers should not take inappropriate advantage of their positions; (3) the duty to assure that a Fund's financial statements and reports to its shareholders are prepared honestly and accurately in accordance with applicable rules, regulations and accounting standards; and (4) the duty to conduct the Funds' business and affairs in an honest and ethical manner. Each Covered Officer should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. It is acknowledged that, as a result of the contractual relationship between each Fund and OFI, of which the Covered Officers are also officers or employees, and subject to OFI's fiduciary duties to each Fund, the Covered Officers will, in the normal course of their duties, be involved in establishing policies and implementing decisions that will have different effects on OFI and the Funds. It is further acknowledged that the participation of the Covered Officers in such activities is inherent in the contractual relationship between each Fund and OFI and is consistent with the expectations of the Board of Trustees/Directors of the performance by the Covered Officers of their duties as officers of the Funds. 2. PROHIBITIONS ------------ The specific provisions and reporting requirements of this Code are concerned primarily with promoting honest and ethical conduct and avoiding conflicts of interest in personal and professional relationships. No Covered Officer may use information concerning the business and affairs of a Fund, including the investment intentions of a Fund, or use his or her ability to influence such investment intentions, for personal gain to himself or herself, his or her family or friends or any other person or in a manner detrimental to the interests of a Fund or its shareholders. No Covered Officer may use his or her personal influence or personal relationships to influence the preparation and issuance of financial reports of a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund and its shareholders. No Covered Officer shall intentionally for any reason take any action or fail to take any action in connection with his or her official acts on behalf of a Fund that causes the Fund to violate applicable laws, rules and regulations. No Covered Officer shall, in connection with carrying out his or her official duties and responsibilities on behalf of a Fund: (i) employ any device, scheme or artifice to defraud a Fund or its shareholders; (ii) intentionally cause a Fund to make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading in its official documents, regulatory filings, financial statements or communications to the public; (iii) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any Fund or its shareholders; (iv) engage in any manipulative practice with respect to any Fund; (v) use his or her personal influence or personal relationships to influence any business decision, investment decisions, or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of the Fund or its shareholders; (vi) intentionally cause a Fund to fail to comply with applicable laws, rules and regulations, including failure to comply with the requirement of full, fair, accurate, understandable and timely disclosure in reports and documents that a Fund files with, or submits to, the SEC and in other public communications made by the Fund; (vii) intentionally mislead or omit to provide material information to the Fund's independent auditors or to the Board of Trustees/Directors or the officers of the Fund or its investment adviser in connection with financial reporting matters; (viii) fail to notify the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser promptly if he or she becomes aware of any existing or potential violations of this Code or applicable laws; (ix) retaliate against others for, or otherwise discourage the reporting of, actual or apparent violations of this Code; or (x) fails to acknowledge or certify compliance with this Code if requested to do so. 3. REPORTS OF CONFLICTS OF INTERESTS --------------------------------- If a Covered Officer becomes aware of a conflict of interest under this Code or, to the Covered Officer's reasonable belief, the appearance of one, he or she must immediately report the matter to the Code's Administrator. If the Code Administrator is involved or believed to be involved in the conflict of interest or appearance of conflict of interest, the Covered Officer shall report the matter directly to the OFI's Chief Executive Officer. Upon receipt of a report of a conflict, the Code Administrator will take prompt steps to determine whether a conflict of interest exists. If the Code Administrator determines that an actual conflict of interest exists, the Code Administrator will take steps to resolve the conflict. If the Code Administrator determines that the appearance of a conflict exists, the Code Administrator will take appropriate steps to remedy such appearance. If the Code Administrator determines that no conflict or appearance of a conflict exists, the Code Administrator shall meet with the Covered Officer to advise him or her of such finding and of his or her reason for taking no action. In lieu of determining whether a conflict or appearance of conflict exists, the Code Administrator may in his or her discretion refer the matter to the Fund's Board of Trustees/Directors. 4. WAIVERS ------- Any Covered Officer requesting a waiver of any of the provisions of this Code must submit a written request for such waiver to the Code Administrator, setting forth the basis of such request and all necessary facts upon which such request can be evaluated. The Code Administrator shall review such request and make a written determination thereon, which shall be binding. The Code Administrator may in reviewing such request, consult at his discretion with legal counsel to OFI or to the Fund. In determining whether to waive any of the provisions of this Code, the Code Administrator shall consider whether the proposed waiver: (i) is prohibited by this Code; (ii) is consistent with honest and ethical conduct; and (iii) will result in a conflict of interest between the Covered Officer's personal and professional obligations to a Fund. In lieu of determining whether to grant a waiver, the Code Administrator in his or her discretion may refer the matter to the appropriate Fund's Board of Trustees/Directors. 5. REPORTING REQUIREMENTS ---------------------- (a) Each Covered Officer shall, upon becoming subject to this Code, be provided with a copy of this Code and shall affirm in writing that he or she has received, read, understands and shall adhere to this Code. (b) At least annually, all Covered Officers shall be provided with a copy of this Code and shall certify that they have read and understand this Code and recognize that they are subject thereto. (c) At least annually, all Covered Officers shall certify that they have complied with the requirements of this Code and that they have disclosed or reported any violations of this Code to the Code Administrator or the Chief Executive Officer of the Fund or its investment adviser. (d) The Code Administrator shall submit a quarterly report to the Board of Trustees/Directors of each Fund containing (i) a description of any report of a conflict of interest or apparent conflict and the disposition thereof; (ii) a description of any request for a waiver from this Code and the disposition thereof; (iii) any violation of the Code that has been reported or found and the sanction imposed; (iv) interpretations issued under the Code by the Code Administrator; and (v) any other significant information arising under the Code including any proposed amendments. (e) Each Covered Officer shall notify the Code Administrator promptly if he or she knows of or has a reasonable belief that any violation of this Code has occurred or is likely to occur. Failure to do so is itself a violation of this Code. (f) Any changes to or waivers of this Code, including "implicit" waivers as defined in applicable SEC rules, will, to the extent required, be disclosed by the Code Administrator or his or her designee as provided by applicable SEC rules.(2) 6. ANNUAL RENEWAL -------------- At least annually, the Board of Trustees/Directors of each Fund shall review the Code and determine whether any amendments (including any amendments that may be recommended by OFI or the Fund's legal counsel) are necessary or desirable, and shall consider whether to renew and/or amend the Code. 7. SANCTIONS --------- Any violation of this Code of Ethics shall be subject to the imposition of such sanctions by OFI as may be deemed appropriate under the circumstances to achieve the purposes of this Code and may include, without limitation, a letter of censure, suspension from employment or termination of employment, in the sole discretion of OFI. 8. ADMINISTRATION AND CONSTRUCTION ------------------------------- (a) The administration of this Code of Ethics shall be the responsibility of OFI's General Counsel or his designee as the "Code Administrator" of this Code, acting under the terms of this Code and the oversight of the Trustees/Directors of the Funds. (b) The duties of such Code Administrator will include: (i) Continuous maintenance of a current list of the names of all Covered Officers; (ii) Furnishing all Covered Officers a copy of this Code and initially and periodically informing them of their duties and obligations thereunder; (iii) Maintaining or supervising the maintenance of all records required by this Code, including records of waivers granted hereunder; (iv) Issuing interpretations of this Code which appear to the Code Administrator to be consistent with the objectives of this Code and any applicable laws or regulations; (v) Conducting such inspections or investigations as shall reasonably be required to detect and report any violations of this Code, with his or her recommendations, to the Chief Executive Officer of OFI and to the Trustees/Directors of the affected Fund(s) or any committee appointed by them to deal with such information; and - ----------------------------------------- (2) An "implicit waiver" is the failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the General Counsel, the Code Administrator, and an executive officer of the Fund or OFI. (vi) Periodically conducting educational training programs as needed to explain and reinforce the terms of this Code. (c) In carrying out the duties and responsibilities described under this Code, the Code Administrator may consult with legal counsel, who may include legal counsel to the applicable Funds, and such other persons as the Administrator shall deem necessary or desirable. The Code Administrator shall be protected from any liability hereunder or under any applicable law, rule or regulation, for decisions made in good faith based upon his or her reasonable judgment. 9. REQUIRED RECORDS ---------------- The Administrator shall maintain and cause to be maintained in an easily accessible place, the following records for the period required by applicable SEC rules (currently six years following the end of the fiscal year of OFI in which the applicable event or report occurred): (a) A copy of any Code which has been in effect during the period; (b) A record of any violation of any such Code and of any action taken as a result of such violation, during the period; (c) A copy of each annual report pursuant to the Code made by a Covered Officer during the period; (d) A copy of each report made by the Code Administrator pursuant to this Code during the period; (e) A list of all Covered Officers who are or have been required to make reports pursuant to this Code during the period, plus those person(s) who are or were responsible for reviewing these reports; (f) A record of any request to waive any requirement of this Code, the decision thereon and the reasons supporting the decision; and (g) A record of any report of any conflict of interest or appearance of a conflict of interest received by the Code Administrator or discovered by the Code Administrator during the period, the decision thereon and the reasons supporting the decision. 10. AMENDMENTS AND MODIFICATIONS ---------------------------- Other than non-substantive or administrative changes, this Code may not be amended or modified unless approved or ratified by the Board of Trustees/Directors of each Fund. 11. CONFIDENTIALITY. ---------------- This Code is identified for the internal use of the Funds and OFI. Reports and records prepared or maintained under this Code are considered confidential and shall be maintained and protected accordingly to the extent permitted by applicable laws, rules and regulations. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Trustees/Directors of the affected Fund(s) and their counsel, the independent auditors of the affected Funds and/or OFI, and to OFI, except as such disclosure may be required pursuant to applicable judicial or regulatory process. Dated as of: June 25, 2003, as revised August 30, 2006. Exhibit A POSITIONS COVERED BY THIS CODE OF ETHICS FOR SENIOR OFFICERS EACH OPPENHEIMER OR CENTENNIAL FUND - ----------------------------------- Principal Executive Officer Principal Financial Officer Treasurer Assistant Treasurer PERSONNEL OF OFI, WHO BY VIRTUE OF THEIR JOBS PERFORM CRITICAL FINANCIAL AND - ------------------------------------------------------------------------------ ACCOUNTING FUNCTIONS FOR OFI ON BEHALF OF A FUND, INCLUDING: - ------------------------------------------------------------- Chief Financial Officer Treasurer Senior Vice President/Fund Accounting Vice President/Fund Accounting EX-99.CERT 3 ra600_40267cert302.txt RA600_40267CERT302.TXT Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, John V. Murphy, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Select Value Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 06/12/2007 /s/ John V. Murphy - --------------------------- John V. Murphy Principal Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, Brian W. Wixted, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Select Value Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 06/12/2007 /s/ Brian W. Wixted - --------------------------- Brian W. Wixted Principal Financial Officer EX-99.906CERT 4 ra600_40267cert906.txt RA600_40267CERT906.TXT EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 John V. Murphy, Principal Executive Officer, and Brian W. Wixted, Principal Financial Officer, of Oppenheimer Select Value Fund (the "Registrant"), each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended 04/30/2007 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Principal Executive Officer Principal Financial Officer Oppenheimer Select Value Fund Oppenheimer Select Value Fund /s/ John V. Murphy /s/ Brian W. Wixted - ----------------------------- ----------------------------- John V. Murphy Brian W. Wixted Date: 06/12/2007 Date: 06/12/2007 -----END PRIVACY-ENHANCED MESSAGE-----