<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
February 5, 1999
To Our Shareholders:
We are pleased to submit to you our annual report for Cohen & Steers Equity
Income Fund, Inc. for the quarter and year ended December 31, 1998. The net
asset values per share at that date were $10.31, $10.27, and $10.26 for Class A,
Class B, and Class C shares, respectively. Class I shares had a net asset value
of $10.28. In addition, a distribution was declared for shareholders of record
on December 22, 1998 and paid on December 23, 1998 to all four classes of
shares. The distribution is as follows: Class A shares $0.23 per share ($0.17
regular plus a $0.06 special income distribution), Class B shares $0.20 per
share ($0.17 regular plus a $0.03 special income distribution), Class C shares
$0.21 per share ($0.17 regular plus a $0.04 special income distribution), Class
I shares $0.27 per share ($0.17 regular plus a $0.10 special income
distribution). The Fund did not make capital gains distributions in 1998.
1998 REVIEW
The equity income strategy delivered very strong results relative to our
benchmark, as shown in the chart below:
<TABLE>
<CAPTION>
4TH QUARTER 1998
----------- ----------
<S> <C> <C>
NAREIT Equity REIT Index........................................... - 2.9% - 17.5%
Class A shares*.................................................... - 2.0% - 10.6%
Class B shares..................................................... - 2.2% - 11.4%
Class C shares..................................................... - 2.2% - 11.1%
Class I shares..................................................... - 2.0% na
- ------------
* Without giving effect to sales loads or contingent deferred sales charges, if any.
</TABLE>
Without a doubt, 1998 was the most challenging year ever for REIT
investors. The bear market that gripped the industry, in the face of seemingly
strong fundamentals, surprised most with the speed and severity of losses that
were sustained. In a year filled with ironies, the overall investment
environment in 1998 was nothing less than ideal: strong economic growth with low
inflation and declining interest rates precipitated a record-shattering
continuation of strong stock market performance. It was also a year in which
real estate fundamentals remained strong, and the public market discipline was
effective in reigning in any potential speculative excesses in the property
markets. We suspect that if one could have accurately predicted this set of
circumstances at the beginning of the year, one would have assumed that REITs
would produce outstanding investment returns. On the contrary, REITs recorded
their worst year of investment performance in over 20 years, with every property
sector showing a price decline.
At the company level, REIT financial performance in 1998 was exceptionally
good on both an absolute and relative basis. Earnings growth averaged 13%, more
than double the 5.2% rate of earnings growth of the S&P 500 Index, and
throughout the year most companies consistently reported better-than-expected
results. Further, we estimate that dividend growth in the REIT industry was a
healthy 8%, implying a decline in payout ratios, thereby ensuring the stability
and safety of those dividends. Ignoring these positive developments, investors
instead chose to
- --------------------------------------------------------------------------------
1
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COHEN & STEERS EQUITY INCOME FUND, INC.
focus on some actual and potentially negative real estate industry trends. These
included the state of equilibrium of most major property markets, potential
future slowing growth of REIT earnings, competition from private real estate
investors, and the increasing industry-wide use of leverage, among others.
Perhaps most importantly, investors in 1998 became concerned about
persistent deflationary pressures and their long-term impact on rents and
property values. It is no coincidence, in our opinion, that in addition to
REITs, 1998's worst performing investments included other potential victims of
deflation such as most commodities, precious and non-precious metals, and just
about anything that is energy-related. In a low inflation (or deflationary) and
low interest rate environment, investors often pay the highest price for
longer-term investments, such as high grade long-term bonds or high growth
stocks; technology, communications or internet companies, for example. If
deflation is expected to persist for a long period, investors typically demand a
higher current return in order to offset the risk of a potential long-term
decline in asset values. The net result was that equity REIT dividend yields
rose from 5.5% at the beginning of the year to a 5-year high of 7.5% by year
end.
The downward spiral of REIT share prices further disadvantaged many
companies. Sentiment became so negative that for the first time in many years
REITs became unable to access the equity capital markets. In response, many
companies began to increase their use of debt financing or off-balance sheet
leverage through joint ventures. This too is a strategy whose success is
threatened by future deflation. By late summer, however, the collapse of the
commercial mortgage backed securities market put a major crimp in the flow of
debt financing. As capital raising ground to a halt, most companies scaled back
their acquisition programs, causing most analysts to reduce estimates of
earnings growth in 1999 and beyond. More importantly, the withdrawal of capital
from the real estate market began to exert extreme pressure on property values,
with many estimating approximately a 10-15% drop in prices from earlier peaks.
In some sectors, such as hotels, the price decline was far worse. Once again,
the public market's influence dominated the functioning of real estate markets.
The reduction in interest rates by the Federal Reserve in the fall
cushioned the decline of REIT share prices, but had a much more beneficial
effect on the broader financial markets. The fourth quarter decline in REIT
share prices compared to a 21.3% total return of the S&P 500 Index. Nonetheless,
as liquidity returned to real estate markets and fears of a global economic
slowdown abated, property values began to stabilize as did REIT share prices,
albeit at depressed levels.
INVESTMENT OUTLOOK
We begin the New Year in an investment environment that is almost identical
to that which prevailed through most of last year; continued strong economic
growth, low inflation and interest rates and a strong stock market. If the
environment is no different from 1998, one must question what will alter the
outlook for REIT investing in 1999.
What is different for REITs is that their prices are 22% lower and their
earnings are 13% higher than a year ago. This compares to the S&P 500 Index
whose price is 27% higher and whose earnings are up only 5%. Further, whereas
one year ago REITs, on average, were trading at more than a 20% premium to their
net asset values (NAVs) they are now trading below their NAVs. As a result, on
both a relative and absolute basis, REITs are just about as cheap as they have
ever been. It therefore appears to us that the concerns that weighed on
investors through most of 1998 should be adequately factored in REIT share
prices.
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2
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COHEN & STEERS EQUITY INCOME FUND, INC.
We do not believe, however, that a new bull market in REIT shares is about
to begin. Rather, we expect most real estate markets to remain in equilibrium,
whereby the supply and demand for space is about equal. Based upon the
experience of last year, the near instantaneous reaction of the financial
markets to any actual or perceived imbalances will likely serve to maintain this
equilibrium condition. The swiftness with which the real estate markets have
moved is primarily the result of the domination of public securities markets for
debt and equity financing of real estate. This is enhanced by the rapid flow of
property-level and regional market information. These are perhaps the most
important by-products of securitization.
In light of our economic outlook and current valuation levels, we believe
the Fund is advantageously positioned with its emphasis on above-average
yielding real estate securities. The growth in the number of investments meeting
its investment criteria was a positive development from last year's turmoil. The
increased number of attractive investment opportunities bodes well for
performance in 1999. The Fund's current holdings have a higher average dividend
yield and higher projected earnings growth per share than at any time in its
history. The average current dividend yield was 8.7% at year end and average
projected earnings growth per share for 1999 is 10%. Consequently, we expect
this strong earnings growth to translate into solid dividend per share growth.
Additionally, the Fund's investments are compelling on an NAV basis. The
median share price discount-to-NAV was 10% for the common stocks held by the
Fund. Valuation relative to NAV is a useful investment tool in that it serves to
identify a core valuation level as well as being useful on a relative basis. The
sizable number of companies trading at discounts-to-NAV may lead to
consolidation similar to the level we witnessed in the first half of 1998 and of
which the Fund was a beneficiary.
The portfolio weightings in the Office and Hotel sectors have been
increased while the Health Care and Retail sectors have been reduced. The
increase in Office sector investments is attributable to very attractive
valuations and due to continued attractive supply/demand fundamentals for many
regions of the country. Our expectation is that the Office sector should have
the best earnings growth from internal sources in 1999 and should also deliver
above average dividend per share growth. The increased investments in the Hotel
sector reflect outstanding values resulting from steep share price declines as
well as our belief in a good economy in 1999. The companies we have chosen have
very strong balance sheets, experienced management teams and more than ample
dividend coverage levels.
The reduction in our Retail REIT exposure was driven by our decision to
take profits, as well as expectations for more difficult sales and earnings
comparisons for retailers in 1999. The Health Care sector reduction reflects a
winnowing out of the weaker companies as we move into a more difficult
reimbursement environment for many types of health care services.
The Fund's preferred stock holdings continue to offer sizable current
yield, healthy fixed charge coverage levels and the potential for capital
appreciation from credit spread tightening. The average current yield of the
Fund's preferred holdings was 9.4% (11.3% on a yield to call basis), average
fixed charge coverage was 2.3 times. The median credit rating is `BB'. REIT
preferred securities appear to be very attractive compared to comparably rated
fixed income securities: the median current yield on `BB' rated bonds was 8.2%.
We believe that due to these factors the Fund's preferred holdings will be an
important contributor to performance in 1999.
- --------------------------------------------------------------------------------
3
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COHEN & STEERS EQUITY INCOME FUND, INC.
Our investment strategy remains focused on owning a broadly diversified
portfolio of above average yielding real estate securities. Additionally, these
investments are characterized by having strong management teams, healthy balance
sheets and reasonable plans for growth. 1998's performance, while disappointing
on an absolute basis, was strong on a relative basis. We believe, based on
current valuation levels and on the portfolio composition, that we can deliver
greatly improved performance in 1999.
Sincerely,
<TABLE>
<S> <C>
MARTIN COHEN ROBERT H. STEERS
MARTIN COHEN ROBERT H. STEERS
President Chairman
</TABLE>
STEVEN R. BROWN
STEVEN R. BROWN
Senior Vice President
Cohen & Steers Capital Management, Inc.
Cohen & Steers is now online at WWW.COHENANDSTEERS.COM. Visit our website for
daily NAVs, portfolio information, performance information, recent news
articles, literature and insights on the REIT market.
- --------------------------------------------------------------------------------
4
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<PAGE>
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COHEN & STEERS EQUITY INCOME FUND, INC.
PERFORMANCE REVIEW
The investment objective of Cohen & Steers Equity Income Fund, Inc. is to
achieve high current income through investment in real estate securities.
Capital appreciation is a secondary objective. The Fund's investment adviser
anticipates that the Fund's equity investments in real estate companies will
primarily be in securities that pay high dividends relative to the stock market
as a whole.
The Fund's investment performance in 1998 exceeded its benchmark. Real
estate securities (and the Fund) performed poorly in general in 1998, in the
Adviser's view, due to concerns about the maturity of the real estate cycle and
the uncertain outlook for the economy. In light of the decline in share prices
in 1998, we believe these issues and concerns are now more than adequately
reflected in the valuations of real estate securities. The Fund's strong
performance relative to its benchmark was driven by its focus on above-average
yield and its emphasis on value over growth.
The performance of the Fund for the year ended December 31, 1998
comfortably exceeded that of its benchmark.
COHEN & STEERS INCOME FUND -- CLASS A
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDED DEC. 31, 1998
- -------------------------------------------------------------------
1 YEAR SINCE INCEPTION (9/2/97)
- -------------------------------------------------------------------
<S> <C> <C>
Fund -10.56% -1.58%
- -------------------------------------------------------------------
NAREIT All 'DD' -18.82% -8.68%
- -------------------------------------------------------------------
S&P 500 28.58% 28.37%
- -------------------------------------------------------------------
</TABLE>
[GRAPH]
Growth of a $10,000 Investment
Since Inception
<TABLE>
<CAPTION>
DATE COHEN EQUITY FUND NAREIT ALL REIT S&P 500
- ---- ----------------- --------------- -------
<S> <C> <C> <C>
9/2/97 9,550 10,000 10,000
9/30/97 9,908 10,799 10,548
12/31/97 10,453 10,912 10,851
3/31/98 10,557 10,853 12,364
6/30/98 10,240 10,351 12,772
9/30/98 9,540 9,222 11,502
12/31/98 9,350 8,858 13,952
</TABLE>
COHEN & STEERS EQUITY INCOME FUND -- CLASS B
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
TOTAL RETURNS
FOR PERIODS ENDED DEC. 31, 1998
- -------------------------------------------------------------------
SINCE INCEPTION (1/15/98)
- -------------------------------------------------------------------
<S> <C>
Fund -11.37%
- -------------------------------------------------------------------
NAREIT All 'DD' -18.82%
- -------------------------------------------------------------------
S&P 500 30.19%
- -------------------------------------------------------------------
</TABLE>
[GRAPH]
Growth of a $10,000 Investment
Since Inception
<TABLE>
<CAPTION>
DATE COHEN EQUITY INCOME NAREIT ALL REIT S&P 500
- ---- ------------------- --------------- -------
<S> <C> <C> <C>
1/15/98 10,000 10,000 10,000
3/31/98 10,066 9,946 11,538
6/30/98 9,739 9,486 11,919
9/30/98 9,063 8,451 10,733
12/31/98 8,863 8,118 13,019
</TABLE>
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5
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COHEN & STEERS EQUITY INCOME FUND, INC.
COHEN & STEERS EQUITY INCOME FUND -- CLASS C
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
TOTAL RETURNS
FOR PERIODS ENDED DEC. 31, 1998
- -------------------------------------------------------------------
SINCE INCEPTION (1/14/98)
- -------------------------------------------------------------------
<S> <C>
Fund -11.08%
- -------------------------------------------------------------------
NAREIT All 'DD' -18.82%
- -------------------------------------------------------------------
S&P 500 30.99%
- -------------------------------------------------------------------
</TABLE>
[GRAPH]
Growth of a $10,000 Investment
Since Inception
<TABLE>
<CAPTION>
DATE COHEN EQUITY INCOME NAREIT ALL REIT S&P 500
- ---- ------------------- --------------- -------
<S> <C> <C> <C>
1/14/98 10,000 10,000 10,000
3/31/98 10,099 9,946 11,609
6/30/98 9,771 9,486 11,992
9/30/98 9,093 8,451 10,799
12/31/98 8,892 8,118 13,099
</TABLE>
COHEN & STEERS EQUITY INCOME FUND -- CLASS I
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
TOTAL RETURNS
FOR PERIODS ENDED DEC. 31, 1998
- -------------------------------------------------------------------
SINCE INCEPTION (7/15/98)
- -------------------------------------------------------------------
<S> <C>
Fund -10.59%
- -------------------------------------------------------------------
NAREIT All 'DD' -14.41%
- -------------------------------------------------------------------
S&P 500 5.12%
- -------------------------------------------------------------------
</TABLE>
[GRAPH]
Growth of a $10,000 Investment
Since Inception
<TABLE>
<CAPTION>
DATE COHEN EQUITY INCOME NAREIT ALL REIT S&P 500
- ---- ------------------- --------------- -------
<S> <C> <C> <C>
7/15/98 10,000 10,000 10,000
9/30/98 9,124 8,909 8,666
12/31/98 8,941 8,558 10,512
</TABLE>
Past performance is not predictive of future performance. Your investment return
and principal value will fluctuate. When shares are redeemed, they may be worth
more or less than the original cost.
* Commencement of operations.
** Initial offering of shares.
'D' The Comparative indices are not adjusted to reflect expenses or other fees
that the SEC requires to be reflected in the Fund's performance. The Fund's
performance assumes the reinvestment of all dividends and distributions.
The NAREIT Index of All REITs is comprised of 210 real estate investment
trusts. The S&P 500 Index is an unmanaged list of common stocks that is
frequently used as a general measure of stock market performance. For more
information, including charges and expenses, please read the prospectus
carefully before you invest.
'DD' Prior to January 4, 1999, the NAREIT All REIT Index was published monthly.
Total returns and cumulative values of a $10,000 investment are calculated
from the date nearest each class' inception for which comparable
performance data exist.
- --------------------------------------------------------------------------------
6
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE DIVIDEND
SHARES (NOTE 1) YIELD*
--------- ----------- ---------------
<S> <C> <C> <C>
EQUITIES 97.63%
COMMON STOCK 79.72%
APARTMENT/RESIDENTIAL 8.46%
Apartment Investment & Management Co. -- Class A............. 47,700 $ 1,773,844 6.05%
Camden Property Trust........................................ 40,200 1,045,200 7.77
Charles E. Smith Residential Realty.......................... 17,400 558,975 6.66
Summit Properties............................................ 74,700 1,288,575 9.45
-----------
4,666,594
-----------
DIVERSIFIED 4.75%
Anthracite Capital........................................... 114,200 892,187 14.85
Pacific Gulf Properties...................................... 86,200 1,729,387 8.57
-----------
2,621,574
-----------
HEALTH CARE 11.99%
ElderTrust................................................... 69,600 800,400 12.70
Health Care Property Investors............................... 54,300 1,669,725 8.72
Healthcare Realty Trust...................................... 70,700 1,577,494 9.49
Nationwide Health Properties................................. 30,300 653,344 7.79
Omega Healthcare Investors................................... 63,300 1,910,869 8.88
-----------
6,611,832
-----------
HOTEL 4.83%
FelCor Lodging Trust......................................... 69,700 1,607,456 9.57
Innkeepers USA............................................... 89,500 1,057,219 9.48
-----------
2,664,675
-----------
INDUSTRIAL 3.35%
First Industrial Realty Trust................................ 68,800 1,844,700 8.95
-----------
OFFICE 19.50%
Arden Realty Group........................................... 82,000 1,901,375 7.25
Brandywine Realty Trust...................................... 63,300 1,131,487 8.73
CarrAmerica Realty Corp...................................... 39,100 938,400 7.71
Crescent Real Estate Equities Co............................. 79,300 1,823,900 9.57
Highwoods Properties......................................... 66,100 1,702,075 8.39
Mack-Cali Realty Corp........................................ 64,100 1,979,088 7.13
SL Green Realty Corp......................................... 30,400 657,400 6.47
Tower Realty Trust........................................... 30,600 615,825 5.57
-----------
10,749,550
-----------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
7
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE DIVIDEND
SHARES (NOTE 1) YIELD*
--------- ----------- ---------------
<S> <C> <C> <C>
OFFICE/INDUSTRIAL 4.89%
Liberty Property Trust....................................... 45,400 $ 1,117,975 7.31%
Prime Group Realty Trust..................................... 29,100 440,137 8.93
TriNet Corporate Realty Trust................................ 42,500 1,136,875 9.72
-----------
2,694,987
-----------
SHOPPING CENTER 19.89%
COMMUNITY CENTER 6.42%
Developers Diversified Realty Corp........................... 20,600 365,650 7.38
JDN Realty Corp.............................................. 51,400 1,108,312 6.68
Pan Pacific Retail Properties................................ 55,500 1,106,531 7.62
Pennsylvania REIT............................................ 49,400 960,212 9.67
-----------
3,540,705
-----------
FACTORY OUTLET CENTER 3.74%
Prime Retail................................................. 144,088 1,413,864 12.03
Tanger Factory Outlet Centers................................ 30,500 646,219 11.33
-----------
2,060,083
-----------
REGIONAL MALL 9.73%
CBL & Associates Properties.................................. 27,400 707,263 7.21
JP Realty.................................................... 74,700 1,465,988 9.48
Macerich Co.................................................. 26,300 673,937 7.57
Simon Property Group......................................... 57,100 1,627,350 7.09
The Mills Corp............................................... 44,900 892,388 9.81
-----------
5,366,926
-----------
TOTAL SHOPPING CENTER........................................ 10,967,714
-----------
SPECIALTY 2.06%
Entertainment Properties Trust............................... 66,800 1,135,600 9.41
-----------
TOTAL COMMON STOCK (Identified cost -- $49,054,838).... 43,957,226
-----------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
8
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF VALUE DIVIDEND
SHARES (NOTE 1) YIELD*
--------- ----------- --------
<S> <C> <C> <C>
PREFERRED STOCK 17.91%
Apartment Investment & Management Co., 9.00%, Series C............ 52,000 $ 1,147,250 10.47%
Apartment Investment & Management Co., 9.375%, Series G........... 62,400 1,376,700 10.61
Camden Property Trust, 2.25%, Series A (Convertible).............. 56,700 1,343,081 9.50
Colonial Properties Trust, 8.875%, Series A....................... 30,000 720,000 9.13
Crown American Realty Trust, 11.00%, Series A..................... 9,800 478,975 11.25
General Growth Properties, 7.25%, Series A (Redeemable)........... 41,700 1,073,775 7.03
Liberty Properties Trust, 8.80%, Series A......................... 29,600 704,850 9.21
Prime Retail, 8.50%, Series B (Convertible)....................... 14,100 234,413 12.75
Reckson Associates Realty Corp., 7.625%, Series A (Convertible)... 73,900 1,561,138 9.04
SL Green Realty Corp., 8.00%, Series A (Convertible).............. 53,100 1,234,575 8.60
-----------
TOTAL PREFERRED STOCK (Identified cost -- $10,784,263)......... 9,874,757
-----------
TOTAL EQUITIES (Identified cost -- $59,839,101)................ 53,831,983
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<S> <C> <C>
COMMERCIAL PAPER 0.30%
Preferred Finance Corp., 4.80%, 1/4/99
(Identified cost -- $163,934).................................. $164,000 163,934
-----------
TOTAL INVESTMENTS (Identified cost -- $60,003,035) ................. 97.93% 53,995,917
OTHER ASSETS IN EXCESS OF LIABILITIES ............................. 2.07% 1,142,175
------
NET ASSETS ......................................................... 100.00% $55,138,092
------ -----------
------ -----------
</TABLE>
- ------------
* Dividend yield is computed by dividing the security's current annual dividend
rate by the last sale price on the principal exchange, or market, on which
such security trades. The dividend yield has not been audited by
PricewaterhouseCoopers LLP.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
9
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (Identified cost -- $60,003,035) (Note 1)................. $53,995,917
Cash.......................................................................................... 110
Receivable for investment securities sold..................................................... 1,265,668
Dividends receivable.......................................................................... 537,051
Receivable for fund shares sold............................................................... 424,008
Unamortized organization costs and other assets (Note 1)...................................... 89,069
-----------
Total Assets............................................................................ 56,311,823
-----------
LIABILITIES:
Payable for fund shares redeemed.............................................................. 631,205
Payable for investments purchased............................................................. 420,227
Payable for distribution fees................................................................. 34,338
Payable for shareholder service fees.......................................................... 16,184
Payable to investment adviser................................................................. 10,204
Payable to administrator...................................................................... 9,692
Payable to directors.......................................................................... 500
Other liabilities............................................................................. 51,381
-----------
Total Liabilities....................................................................... 1,173,731
-----------
NET ASSETS.......................................................................................... $55,138,092
-----------
-----------
NET ASSETS consist of:
Paid-in capital (Notes 1 and 4)............................................................... $63,342,679
Accumulated net realized loss on investments sold............................................. (2,197,469)
Net unrealized depreciation on investments.................................................... (6,007,118)
-----------
$55,138,092
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
10
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED)
DECEMBER 31, 1998
<TABLE>
<S> <C>
CLASS A SHARES:
NET ASSETS.................................................................................... $31,581,190
Shares issued and outstanding ($0.001 par value common stock outstanding) (Note 4)............ 3,063,888
-----------
Net Asset Value and Redemption Value Per Share'D'............................................. $ 10.31
-----------
-----------
Maximum Offering Price Per Share ($10.31 [div] 0.955)'DD'..................................... $ 10.80
-----------
-----------
CLASS B SHARES*:
NET ASSETS.................................................................................... $10,114,434
Shares issued and outstanding ($0.001 par value common stock outstanding) (Note 4)............ 984,511
-----------
Net Asset Value and Offering Price Per Share'D'............................................... $ 10.27
-----------
-----------
CLASS C SHARES*:
NET ASSETS.................................................................................... $13,159,302
Shares issued and outstanding ($0.001 par value common stock outstanding) (Note 4)............ 1,282,019
-----------
Net Asset Value and Offering Price Per Share'D'............................................... $ 10.26
-----------
-----------
CLASS I SHARES*:
NET ASSETS.................................................................................... $ 283,166
Shares issued and outstanding ($0.001 par value common stock outstanding) (Note 4)............ 27,532
-----------
Net Asset Value and Offering Price Per Share.................................................. $ 10.28
-----------
-----------
</TABLE>
- ------------
'D' Redemption price per share is equal to the net asset value per share less
any applicable contingent sales charge which varies with length of time
shares are held.
'DD' On investments of $100,000 or more, the offering price is reduced.
* Initial offering of Class B, Class C and Class I shares began on January 15,
1998, January 14, 1998 and July 15, 1998, respectively.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
11
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<S> <C>
Investment Income (Note 1):
Dividend income.............................................................................. $ 4,267,096
Interest income.............................................................................. 114,225
-------------
Total Income........................................................................... 4,381,321
-------------
Expenses:
Investment advisory fees (Note 2)............................................................ 407,654
Distribution fees -- Class A (Note 2)........................................................ 93,238
Distribution fees -- Class B (Note 2)........................................................ 57,273
Distribution fees -- Class C (Note 2)........................................................ 54,877
Administration and transfer agent fees (Note 2).............................................. 116,960
Professional fees............................................................................ 99,972
Reports to shareholders...................................................................... 86,175
Shareholder servicing fees -- Class A (Note 2)............................................... 39,295
Shareholder servicing fees -- Class B (Note 2)............................................... 19,091
Shareholder servicing fees -- Class C (Note 2)............................................... 18,293
Registration and filing fees................................................................. 66,324
Directors' fees and expenses (Note 2)........................................................ 31,646
Amortization of organization expenses (Note 1)............................................... 24,309
Custodian fees and expenses.................................................................. 18,423
Miscellaneous................................................................................ 12,550
-------------
Total Expenses......................................................................... 1,146,080
Reduction of expenses (Note 2)............................................................... (233,943)
-------------
Net Expenses........................................................................... 912,137
-------------
Net Investment Income.............................................................................. 3,469,184
-------------
Net Realized and Unrealized Loss on Investments:
Net realized loss on investments............................................................. (3,215,018)
Net change in unrealized appreciation/(depreciation) on investments.......................... (7,042,185)
-------------
Net realized and unrealized loss on investments........................................ (10,257,203)
-------------
Net Decrease in Net Assets Resulting from Operations............................................... $ (6,788,019)
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
12
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE PERIOD
YEAR ENDED SEPTEMBER 2, 1997'D' THROUGH
DECEMBER 31, 1998* DECEMBER 31, 1997
------------------ ----------------------------------
<S> <C> <C>
Change in Net Assets:
From Operations:
Net investment income............................ $ 3,469,184 $ 688,957
Net realized loss on investments................. (3,215,018) (85,230)
Net change in unrealized appreciation/
(depreciation) on investments................. (7,042,185) 1,035,067
------------------ -------------
Net increase/(decrease) in net assets
resulting from operations............... (6,788,019) 1,638,794
------------------ -------------
Dividends and Distributions to Shareholders from
Note 1):
Net investment income:
Class A....................................... (1,727,901) (457,116)
Class B....................................... (384,680) --
Class C....................................... (407,655) --
Class I....................................... (7,540) --
Net realized gain on investments (Class A)....... -- (70,470)
Tax return of capital:
Class A....................................... (779,461) (63,976)
Class B....................................... (172,568) --
Class C....................................... (178,553) --
Class I....................................... (3,383) --
------------------ -------------
Total dividends and distributions to
shareholders............................ (3,661,741) (591,562)
------------------ -------------
Capital Stock Transactions (Note 4):
Increase in net assets from Fund share
transactions.................................. 30,966,307 33,474,313
------------------ -------------
Total increase in net assets............... 20,516,547 34,521,545
Net Assets:
Beginning of period.............................. 34,621,545 100,000
------------------ -------------
End of period.................................... $ 55,138,092 $ 34,621,545
------------------ -------------
------------------ -------------
</TABLE>
- ------------
'D' Commencement of Operations.
* Initial offering of Class B, Class C and Class I shares began on January 15,
1998, January 14, 1998 and July 15, 1998, respectively.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
13
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
FINANCIAL HIGHLIGHTS
The following table includes selected data for a share outstanding
throughout each period and other performance information derived from the
Financial Statements. It should be read in conjunction with the Financial
Statements and notes thereto.
<TABLE>
<CAPTION>
Class A Class B
----------------------------------------------------- -------------------
For the For the Period For the Period
Year Ended September 2, 1997'D' through January 15* through
PER SHARE OPERATING PERFORMANCE December 31, 1998 December 31, 1997 December 31, 1998
- ------------------------------------- ----------------- --------------------------------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of
period............................. $ 12.32 $ 11.46 $ 12.35
------ ------ ------
Income from investment operations
Net investment income............ 0.73 0.25 0.64
Net realized and unrealized
gain/(loss) on investments..... (2.00) 0.83 (2.01)
------ ------ ------
Total from investment
operations................. (1.27) 1.08 (1.37)
------ ------ ------
Less dividends and distributions to
shareholders from:
Net investment income............ (0.51) (0.17) (0.49)
Net realized gain on
investments.................... -- (0.03) --
Tax return of capital............ (0.23) (0.02) (0.22)
------ ------ ------
Total dividends and
distributions
to shareholders............ (0.74) (0.22) (0.71)
------ ------ ------
Net asset value, end of period....... $ 10.31 $ 12.32 $ 10.27
------ ------ ------
------ ------ ------
- -----------------------------------------------------------------------------------------------------------------
Total investment return(1)........... -10.56% 9.46%(2) -11.37%(2)
------ ------ ------
------ ------ ------
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
millions)...................... $31.581 $34.622 $10.114
------ ------ ------
------ ------ ------
Ratios of expenses to average
daily net assets (before
expense reduction)............. 1.92% 3.49%(3) 2.60%(3)
------ ------ ------
------ ------ ------
Ratios of expenses to average
daily net assets (net of
expense reduction)............. 1.49% 1.50%(3) 2.16%(3)
------ ------ ------
------ ------ ------
Ratio of net investment income to
average daily net assets
(before expense reduction)..... 5.89% 9.47%(3) 5.99%(3)
------ ------ ------
------ ------ ------
Ratio of net investment income to
average daily net assets (net
of expense reduction).......... 6.32% 11.46%(3) 6.43%(3)
------ ------ ------
------ ------ ------
Portfolio turnover rate.......... 96.47% 87.20%(2) 96.47%(2)
------ ------ ------
------ ------ ------
</TABLE>
<TABLE>
<CAPTION>
Class C Class I
------------------- -----------------
For the Period For the Period
January 14* through July 15* through
PER SHARE OPERATING PERFORMANCE December 31, 1998 December 31, 1998
- ------------------------------------- ------------------- -----------------
<S> <C> <C>
Net asset value, beginning of
period............................. $ 12.31 $ 11.99
------ ------
Income from investment operations
Net investment income............ 0.64 0.35
Net realized and unrealized
gain/(loss) on investments..... (1.97) (1.62)
------ ------
Total from investment
operations................. (1.33) (1.27)
------ ------
Less dividends and distributions to
shareholders from:
Net investment income............ (0.49) (0.20)
Net realized gain on
investments.................... -- --
Tax return of capital............ (0.23) (0.24)
------ ------
Total dividends and
distributions
to shareholders............ (0.72) (0.44)
------ ------
Net asset value, end of period....... $ 10.26 $ 10.28
------ ------
------ ------
- --------------------------------------------------------------------------------
Total investment return(1)........... -11.08%(2) -10.59%(2)
------ ------
------ ------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
millions)...................... $13.159 $ 0.283
------ ------
------ ------
Ratios of expenses to average
daily net assets (before
expense reduction)............. 2.59%(3) 1.54%(3)
------ ------
------ ------
Ratios of expenses to average
daily net assets (net of
expense reduction)............. 2.16%(3) 1.16%(3)
------ ------
------ ------
Ratio of net investment income to
average daily net assets
(before expense reduction)..... 6.13%(3) 7.48%(3)
------ ------
------ ------
Ratio of net investment income to
average daily net assets (net
of expense reduction).......... 6.56%(3) 7.86%(3)
------ ------
------ ------
Portfolio turnover rate.......... 96.47%(2) 96.47%(2)
------ ------
------ ------
</TABLE>
- ------------
'D' Commencement of operations.
* Initial offering of shares.
(1) Total investment return would have been lower had certain fees not been
reimbursed by the Adviser.
(2) Not annualized.
(3) Annualized.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
14
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Cohen & Steers Equity Income Fund, Inc. (the 'Fund') was incorporated under
the laws of the State of Maryland on July 3, 1997 and is registered under the
Investment Company Act of 1940, as amended (the '1940 Act'), as an open-end,
non-diversified management investment company. The authorized shares of the Fund
are divided into four classes designated Class A, Class B, Class C and Class I
shares. Each of the Fund's shares has equal dividend, liquidation and voting
rights (except for matters relating to distribution and shareholder servicing of
such shares). The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles. The preparation of the financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of 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.
Portfolio Valuation: Investments in securities that are listed on the New
York Stock Exchange are valued, except as indicated below, at the last sale
price reflected at the close of the New York Stock Exchange on the business day
as of which such value is being determined. If there has been no sale on such
day, the securities are valued at the mean of the closing bid and asked prices
for the day.
Securities not listed on the New York Stock Exchange but listed on other
domestic or foreign securities exchanges or admitted to trading on the National
Association of Securities Dealers Automated Quotations, Inc. ('NASDAQ') National
Market System are valued in a similar manner. Securities traded on more than one
securities exchange are valued at the last sale price on the business day as of
which such value is being determined as reflected on the tape at the close of
the exchange representing the principal market for such securities.
Readily marketable securities traded in the over-the-counter market,
including listed securities whose primary market is believed by the Adviser to
be over-the-counter, but excluding securities admitted to trading on the NASDAQ
National List, are valued at the mean of the current bid and asked prices as
reported by NASDAQ, the National Quotation Bureau or such other comparable
sources as the Board of Directors deems appropriate to reflect their fair market
value. Fixed income securities are stated on the basis of valuations provided by
a pricing service when such prices are believed by the Board of Directors to
reflect the fair market value of such securities. Where securities are traded on
more than one exchange and also over-the-counter, the securities will generally
be valued using the quotations the Board of Directors believes reflect most
closely the value of such securities.
Short-term debt securities, which have a maturity value of 60 days or less,
are valued at amortized cost which approximates value.
- --------------------------------------------------------------------------------
15
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Security Transactions and Investment Income: Security transactions are
recorded on trade date. Realized gains and losses on investments sold are
recorded on the basis of identified cost for accounting and tax purposes.
Dividend income is recorded on the ex-dividend date. Interest income is
recognized on the accrual basis. Discounts and premiums on securities purchased
are amortized using the effective yield basis over their respective lives.
Dividends and Distributions to Shareholders: Dividends from net investment
income are declared and paid quarterly. A portion of the Fund's dividends may
consist of amounts in excess of net investment income derived from non-taxable
components of the dividends from the Fund's portfolio investments. As a result,
the Fund had a return of capital of $1,133,965 for the period ended December 31,
1998, which has been charged from paid-in capital. Net realized capital gains,
unless offset by any available capital loss carryforward, are distributed to
shareholders annually. Distributions to shareholders are recorded on the
ex-dividend date.
Dividends will automatically be reinvested in full and fractional shares of
the Fund based on the net asset value per share at the close of business on the
ex-dividend date unless the shareholder has elected to have them paid in cash.
Dividends from net investment income and capital gain distributions are
determined in accordance with U.S. Federal income tax regulations which may
differ from generally accepted accounting principles. During the year ended
December 31, 1998, the Fund decreased undistributed net investment income and
decreased accumulated net realized loss on investments sold by $941,408. These
differences are primarily due to return of capital and capital gain
distributions received by the Fund on portfolio securities.
Federal Income Taxes: It is the policy of the Fund to qualify as a
regulated investment company, if such qualification is in the best interest of
the shareholders, by complying with the requirements of Subchapter M of the
Internal Revenue Code applicable to regulated investment companies, and by
distributing substantially all of its taxable earnings to its shareholders.
Accordingly, no provision for federal income or excise tax is necessary.
Organization Costs: All costs incurred in connection with organizing and
establishing the Fund are being amortized on the straight-line basis over a
period of five years from the date on which the Fund commenced operations. For
the year ended December 31, 1998, the Fund amortized $24,309 in organization
costs.
NOTE 2. INVESTMENT ADVISORY AND ADMINISTRATION FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
Investment Advisory Fees: Cohen & Steers Capital Management, Inc. (the
'Adviser') serves as the Fund's investment adviser pursuant to an investment
advisory agreement (the 'Advisory Agreement'). Under the terms of the Advisory
Agreement, the Adviser provides the Fund with the day-to-day investment
decisions and generally manages the Fund's investments in accordance with the
stated policies of the Fund, subject to the supervision of the Fund's Board of
Directors. For the services provided to the Fund, the Adviser receives a monthly
management
- --------------------------------------------------------------------------------
16
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
fee in an amount equal to 1/12th of 0.75% of the average daily net assets of the
Fund. For the year ended December 31, 1998, the Fund incurred $407,654 in
advisory fees.
The Adviser has voluntarily agreed to limit the total expenses of the Fund
(excluding interest, taxes, brokerage, and extraordinary expenses) to an annual
rate of 1.50% of the average daily net assets of the Fund attributable to Class
A shares, 2.15% of the average daily net assets of the Fund attributable to
Class B and Class C shares and 1.15% of the average daily net assets of the Fund
attributable to Class I shares until December 31, 1998. After December 31, 1998,
the expense limitation may be terminated or revised at any time, at which time
the Fund's expenses may increase and its total return may be reduced depending
on the total assets of the Fund. For the year ended December 31, 1998, the
Adviser waived advisory fees of $233,943.
Administration Fees: The Fund has entered into an administrative agreement
with the Adviser under which the Adviser performs certain administrative
functions for the Fund and receives a fee of 0.02% of the Fund's average daily
net assets. For the year ended December 31, 1998, the Fund has paid the Adviser
$10,871 in fees under this administrative agreement.
In addition, the Fund has entered into a fund accounting and
sub-administration agreement with Chase Manhattan Bank ('Chase') for performing
administration functions for the Fund. Chase receives a monthly sub-
administration fee at the annual rate of 0.08% on the first $500 million of the
Fund's average daily net assets and at lower rates on the Fund's average daily
net assets in excess of that amount.
Distribution Fees: Cohen & Steers Securities, Inc. (the 'Distributor'), a
wholly-owned subsidiary of Cohen & Steers Capital Management, Inc., distributes
the shares of the Fund.
The Fund has adopted a Distribution Plan (the 'Plan') on behalf of the Fund
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Plan,
the Fund may not incur distribution fees which exceed an annual rate of 0.25% of
the average daily net assets attributable to the Class A shares and 0.75% of the
average daily net assets attributable to the Class B and Class C shares. For the
year ended December 31, 1998, the Fund has paid $205,388 in fees under the Plan.
Shareholder Servicing Fees: The Fund has adopted a shareholder services
plan which provides that the Fund may obtain the services of qualified financial
institutions to act as shareholder servicing agents for their customers. For
these services, the Fund may pay the shareholder servicing agent a fee at an
annual rate of up to 0.10% of the average daily net asset value of the Fund's
Class A shares and up to 0.25% of the average daily net asset value of the
Fund's Class B and Class C shares. For the year ended December 31, 1998, the
Fund paid $76,679 under the shareholder servicing plan.
Directors' Fees: Certain directors and officers of the Fund are also
directors, officers and/or employees of the Adviser. None of the directors and
officers so affiliated received compensation for their services as directors of
the
- --------------------------------------------------------------------------------
17
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Fund. Fees and related expenses accrued for non-affiliated directors totaled
$31,646 for the year ended December 31, 1998.
NOTE 3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, excluding short-term investments, for
the year ended December 31, 1998 totaled $81,398,010 and $49,157,187,
respectively.
At December 31, 1998, the cost and unrealized appreciation or depreciation
in value of the investments owned by the Fund, as computed on a federal income
tax basis, are as follows:
<TABLE>
<S> <C>
Aggregate cost.............................................................. $59,475,816
-----------
Gross unrealized appreciation............................................... $ 632,287
Gross unrealized depreciation............................................... $(6,112,186)
-----------
Net unrealized depreciation................................................. $(5,479,899)
-----------
-----------
</TABLE>
NOTE 4. CAPITAL STOCK
The Fund is authorized to issue 200 million shares of capital stock, par
value $0.001 per share. The Board of Directors of the Fund may increase or
decrease the aggregate number of shares of common stock that the Fund has
authority to issue. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
For the Period
For the September 2, 1997'D'
Year Ended through
December 31, 1998 December 31, 1997
------------------------ -----------------------
Shares Amount Shares Amount
---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
CLASS A:
Sold......................................... 2,253,885 $26,810,260 2,794,623 $33,387,806
Issued as reinvestment of dividends.......... 84,674 960,259 13,834 167,116
Redeemed..................................... (2,085,114) (23,575,022) (6,740) (80,609)
---------- ----------- --------- -----------
Net increase................................. 253,445 $ 4,195,497 2,801,717 $33,474,313
---------- ----------- --------- -----------
---------- ----------- --------- -----------
</TABLE>
- --------------------------------------------------------------------------------
18
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
For the Period
January 15, 1998* through
December 31, 1998
-------------------------
Shares Amount
--------- -----------
<S> <C> <C>
CLASS B:
Sold...................................................... 1,078,288 $12,729,525
Issued as reinvestment of dividends....................... 9,109 102,701
Redeemed.................................................. (102,886) (1,076,867)
--------- -----------
Net increase.............................................. 984,511 $11,755,359
--------- -----------
--------- -----------
</TABLE>
<TABLE>
<CAPTION>
For the Period
January 14, 1998* through
December 31, 1998
-------------------------
Shares Amount
--------- -----------
<S> <C> <C>
CLASS C:
Sold...................................................... 1,425,149 $16,222,303
Issued as reinvestment of dividends....................... 9,712 109,331
Redeemed.................................................. (152,842) (1,632,255)
--------- -----------
Net increase.............................................. 1,282,019 $14,699,379
--------- -----------
--------- -----------
</TABLE>
<TABLE>
<CAPTION>
For the Period
July 15, 1998* through
December 31, 1998
-------------------------
Shares Amount
--------- -----------
<S> <C> <C>
CLASS I:
Sold...................................................... 26,796 $308,430
Issued as reinvestment of dividends....................... 959 9,946
Redeemed.................................................. (223) (2,304)
Net increase.............................................. 27,532 $316,072
</TABLE>
- ------------
'D' Commencement of operations.
* Initial offering of shares.
NOTE 5. FEDERAL INCOME TAX -- CAPITAL LOSS CARRYFORWARD
At December 31, 1998, the Fund had a capital loss carryforward of
$2,702,036 and $22,652 expiring in 2006 and 2005, respectively.
NOTE 6. BORROWINGS
The Fund, in conjunction with Cohen & Steers Realty Shares, Inc. and Cohen
& Steers Special Equity Fund, Inc., has entered into a Line of Credit Agreement
with Chase Manhattan Bank for $250,000,000. The loan, if used, will be
collateralized by the Fund's portfolio. During the year ended December 31, 1998,
the Fund did not have any loans outstanding.
- --------------------------------------------------------------------------------
19
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
Cohen & Steers Equity Income Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statement of operations,
statements of changes in net assets and the financial highlights present fairly,
in all material respects, the financial position of Cohen & Steers Equity Income
Fund, Inc. (the 'Fund') at December 31, 1998, the results of its operations for
the year then ended and the changes in its net assets and financial highlights
for the year then ended and for the period from September 2, 1997 (commencement
of operations) to December 31, 1997, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as 'financial statements') are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1998 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
New York, New York
February 5, 1999
- --------------------------------------------------------------------------------
20
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
COHEN & STEERS EQUITY INCOME FUND, INC.
<TABLE>
<S> <C>
OFFICERS AND DIRECTORS KEY INFORMATION
Robert H. Steers INVESTMENT ADVISER
Director and Chairman Cohen & Steers Capital Management, Inc.
757 Third Avenue
Martin Cohen New York, NY 10017
Director and President (212) 832-3232
Gregory C. Clark SUB-ADMINISTRATOR AND TRANSFER AGENT
Director Chase Global Funds Services Co.
73 Tremont Street
George Grossman Boston, MA 02108
Director (800) 437-9912
Jeffrey H. Lynford CUSTODIAN
Director The Chase Manhattan Bank
One Chase Manhattan Plaza
Willard H. Smith, Jr. New York, NY 10081
Director
LEGAL COUNSEL
Elizabeth O. Reagan Dechert Price & Rhoads
Vice President 1775 Eye Street, NW
Washington, DC 20006
Adam Derechin
Vice President and NASDAQ Symbol: Class A - CSEIX
Assistant Treasurer Website: www.cohenandsteers.com
Net asset value (NAV) can be found in the daily
mutual fund listings in the financial section of most
major newspapers under Cohen & Steers.
This report is authorized for delivery only to share-
holders of Cohen & Steers Equity Income Fund, Inc.
unless accompanied or preceded by the delivery of a
currently effective prospectus setting forth details of
the Fund.
</TABLE>
- -------------------------------------------------------------------------------
21
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<PAGE>
COHEN & STEERS
EQUITY INCOME FUND
------------------
ANNUAL REPORT
DECEMBER 31, 1998
COHEN & STEERS
EQUITY INCOME FUND
757 THIRD AVENUE
NEW YORK, NY 10017
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as.................................. 'D'
The double dagger symbol shall be expressed as........................... 'DD'
The division sign shall be expressed as ................................. [div]
