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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 8
SIGNATURE STEPHEN A. KEEN
TITLE GENERAL COUSEL
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000799704
<NAME> Federated Equity Income Fund, Inc.
<SERIES>
<NUMBER> 011
<NAME> Federated Equity Income Fund, Inc. - Class A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Mar-31-2000
<PERIOD-END> Mar-31-2000
<INVESTMENTS-AT-COST> 2,129,433,289
<INVESTMENTS-AT-VALUE> 3,084,924,196
<RECEIVABLES> 46,513,683
<ASSETS-OTHER> 630,705
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,132,068,584
<PAYABLE-FOR-SECURITIES> 3,349,500
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,710,945
<TOTAL-LIABILITIES> 10,060,445
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,111,846,837
<SHARES-COMMON-STOCK> 50,137,643
<SHARES-COMMON-PRIOR> 47,850,508
<ACCUMULATED-NII-CURRENT> 292,006
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 54,378,389
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 955,490,907
<NET-ASSETS> 1,187,734,238
<DIVIDEND-INCOME> 56,221,606
<INTEREST-INCOME> 8,823,954
<OTHER-INCOME> 0
<EXPENSES-NET> (42,194,101)
<NET-INVESTMENT-INCOME> 22,851,459
<REALIZED-GAINS-CURRENT> 58,751,250
<APPREC-INCREASE-CURRENT> 487,869,372
<NET-CHANGE-FROM-OPS> 569,472,081
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (13,251,531)
<DISTRIBUTIONS-OF-GAINS> (53,417)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 15,021,233
<NUMBER-OF-SHARES-REDEEMED> (13,231,903)
<SHARES-REINVESTED> 497,805
<NET-CHANGE-IN-ASSETS> 602,947,216
<ACCUMULATED-NII-PRIOR> 724,530
<ACCUMULATED-GAINS-PRIOR> (4,225,363)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 16,451,977
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 42,294,642
<AVERAGE-NET-ASSETS> 1,022,898,658
<PER-SHARE-NAV-BEGIN> 19.490
<PER-SHARE-NII> 0.270
<PER-SHARE-GAIN-APPREC> 4.200
<PER-SHARE-DIVIDEND> (0.270)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 23.690
<EXPENSE-RATIO> 1.10
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.000
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000799704
<NAME> Federated Equity Income Fund, Inc.
<SERIES>
<NUMBER> 012
<NAME> Federated Equity Income Fund, Inc. - Class B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Mar-31-2000
<PERIOD-END> Mar-31-2000
<INVESTMENTS-AT-COST> 2,129,433,289
<INVESTMENTS-AT-VALUE> 3,084,924,196
<RECEIVABLES> 46,513,683
<ASSETS-OTHER> 630,705
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,132,068,584
<PAYABLE-FOR-SECURITIES> 3,349,500
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,710,945
<TOTAL-LIABILITIES> 10,060,445
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,111,846,837
<SHARES-COMMON-STOCK> 64,935,949
<SHARES-COMMON-PRIOR> 64,751,598
<ACCUMULATED-NII-CURRENT> 292,006
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 54,378,389
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 955,490,907
<NET-ASSETS> 1,537,956,755
<DIVIDEND-INCOME> 56,221,606
<INTEREST-INCOME> 8,823,954
<OTHER-INCOME> 0
<EXPENSES-NET> (42,194,101)
<NET-INVESTMENT-INCOME> 22,851,459
<REALIZED-GAINS-CURRENT> 58,751,250
<APPREC-INCREASE-CURRENT> 487,869,372
<NET-CHANGE-FROM-OPS> 569,472,081
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (7,475,294)
<DISTRIBUTIONS-OF-GAINS> (72,048)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,948,065
<NUMBER-OF-SHARES-REDEEMED> (12,091,056)
<SHARES-REINVESTED> 327,342
<NET-CHANGE-IN-ASSETS> 602,947,216
<ACCUMULATED-NII-PRIOR> 724,530
<ACCUMULATED-GAINS-PRIOR> (4,225,363)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 16,451,977
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 42,294,642
<AVERAGE-NET-ASSETS> 1,371,671,664
<PER-SHARE-NAV-BEGIN> 19.490
<PER-SHARE-NII> 0.120
<PER-SHARE-GAIN-APPREC> 4.190
<PER-SHARE-DIVIDEND> (0.120)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 23.680
<EXPENSE-RATIO> 1.85
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.000
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000799704
<NAME> Federated Equity Income Fund, Inc.
<SERIES>
<NUMBER> 013
<NAME> Federated Equity Income Fund, Inc. - Class C
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Mar-31-2000
<PERIOD-END> Mar-31-2000
<INVESTMENTS-AT-COST> 2,129,433,289
<INVESTMENTS-AT-VALUE> 3,084,924,196
<RECEIVABLES> 46,513,683
<ASSETS-OTHER> 630,705
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,132,068,584
<PAYABLE-FOR-SECURITIES> 3,349,500
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,710,945
<TOTAL-LIABILITIES> 10,060,445
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,111,846,837
<SHARES-COMMON-STOCK> 10,509,042
<SHARES-COMMON-PRIOR> 10,082,248
<ACCUMULATED-NII-CURRENT> 292,006
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 54,378,389
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 955,490,907
<NET-ASSETS> 249,003,887
<DIVIDEND-INCOME> 56,221,606
<INTEREST-INCOME> 8,823,954
<OTHER-INCOME> 0
<EXPENSES-NET> (42,194,101)
<NET-INVESTMENT-INCOME> 22,851,459
<REALIZED-GAINS-CURRENT> 58,751,250
<APPREC-INCREASE-CURRENT> 487,869,372
<NET-CHANGE-FROM-OPS> 569,472,081
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,160,417)
<DISTRIBUTIONS-OF-GAINS> (11,135)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,437,090
<NUMBER-OF-SHARES-REDEEMED> (2,059,476)
<SHARES-REINVESTED> 49,180
<NET-CHANGE-IN-ASSETS> 602,947,216
<ACCUMULATED-NII-PRIOR> 724,530
<ACCUMULATED-GAINS-PRIOR> (4,225,363)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 16,451,977
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 42,294,642
<AVERAGE-NET-ASSETS> 212,819,114
<PER-SHARE-NAV-BEGIN> 19.500
<PER-SHARE-NII> 0.120
<PER-SHARE-GAIN-APPREC> 4.190
<PER-SHARE-DIVIDEND> (0.120)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 23.690
<EXPENSE-RATIO> 1.85
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.000
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000799704
<NAME> Federated Equity Income Fund, Inc.
<SERIES>
<NUMBER> 014
<NAME> Federated Equity Income Fund, Inc. - Class F
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Mar-31-2000
<PERIOD-END> Mar-31-2000
<INVESTMENTS-AT-COST> 2,129,433,289
<INVESTMENTS-AT-VALUE> 3,084,924,196
<RECEIVABLES> 46,513,683
<ASSETS-OTHER> 630,705
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,132,068,584
<PAYABLE-FOR-SECURITIES> 3,349,500
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6,710,945
<TOTAL-LIABILITIES> 10,060,445
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,111,846,837
<SHARES-COMMON-STOCK> 6,216,603
<SHARES-COMMON-PRIOR> 6,547,566
<ACCUMULATED-NII-CURRENT> 292,006
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 54,378,389
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 955,490,907
<NET-ASSETS> 147,313,259
<DIVIDEND-INCOME> 56,221,606
<INTEREST-INCOME> 8,823,954
<OTHER-INCOME> 0
<EXPENSES-NET> (42,194,101)
<NET-INVESTMENT-INCOME> 22,851,459
<REALIZED-GAINS-CURRENT> 58,751,250
<APPREC-INCREASE-CURRENT> 487,869,372
<NET-CHANGE-FROM-OPS> 569,472,081
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,400,523)
<DISTRIBUTIONS-OF-GAINS> (7,118)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 556,478
<NUMBER-OF-SHARES-REDEEMED> (944,291)
<SHARES-REINVESTED> 56,850
<NET-CHANGE-IN-ASSETS> 602,947,216
<ACCUMULATED-NII-PRIOR> 724,530
<ACCUMULATED-GAINS-PRIOR> (4,225,363)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 16,451,977
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 42,294,642
<AVERAGE-NET-ASSETS> 134,606,703
<PER-SHARE-NAV-BEGIN> 19.500
<PER-SHARE-NII> 0.220
<PER-SHARE-GAIN-APPREC> 4.200
<PER-SHARE-DIVIDEND> (0.220)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 23.700
<EXPENSE-RATIO> 1.35
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.000
</TABLE>
Item 77C - Submission of Matters to a Vote of Security Holders
A Special Meeting of Shareholders of Federated Equity Income Fund, Inc. (the
"Fund") was held on November 30, 1999. On September 21, 1999, the record
date for shareholders voting at the meeting, there were 130,672,728 total
outstanding shares of Fund. The following items, which are required to be
reported under this Item 77C, were approved by shareholders of the Fund and
the results of their voting were as follows:
AGENDA ITEM 1: To elect four Directors.1
SHARES VOTED SHARES VOTED
FOR WITHHELD
Nicholas P. Constantakis 70,272,586 1,735,788
John F. Cunningham 70,322092 1,686,282
Charles F. Mansfield 70,311,961 1,696,413
John S. Walsh 70,293,324 1,715,050
1 The following Directors continued their terms: John F. Donahue, Thomas G.
Bigley, John T. Conroy, Jr., Lawrence D. Ellis, M.D., Peter E. Madden,
John E. Murray, Jr., Marjorie P. Smuts and J. Christopher Donahue.
AGENDA ITEM 2: To amend the Fund's fundamental investment policy regarding
diversification.
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
49,911,988 1,638,625 2,557,419 17,900,342
AGENDA ITEM 3: To amend the Fund's fundamental investment policy regarding
borrowing money and issuing senior securities.
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
48,935,949 2,433,329 2,739,094 17,900,002
AGENDA ITEM 4: To amend the Fund's fundamental investment policy regarding
investments in real estate.
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
49,273,969 2,109,922 2,724,142 17,900342
AGENDA ITEM 5: To amend the Fund's fundamental investment policy regarding
investments in commodities.
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
48,724,067 2,634,227 2,749,737 17,900,342
AGENDA ITEM 6: To amend the Fund's fundamental investment policy regarding
underwriting securities.
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
49,332,684 1,996,876 2,778,473 17,900,342
AGENDA ITEM 7: To amend the Fund's fundamental investment policy regarding
lending by the Fund.
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
48,846 2,459,544 2,801,987 17,900342
AGENDA ITEM 8: To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of companies in the
same industry.
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
49,401,599 1,881,668 2,824,766 17,900,342
AGENDA ITEM 9: To amend, and to make non-fundamental, the Fund's fundamental
investment policy regarding buying securities on margin.
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
48,338,600 2,797,051 2,972,382 17,900,342
AGENDA ITEM 10: To amend, and to make non-fundamental, the Fund's fundamental
investment policy regarding pledging assets.
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
48,631,048 2,613,398 2,863,287 17,900,342
AGENDA ITEM 11: To eliminate the Fund's fundamental investment policy on
selling securities short.
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
48,647,652 2,665,786 2,794,595 17,900,342
AGENDA ITEM 12: To require the approval of a "1940 Act" majority of
shareholders in the event of the sale or conveyance of the assets of the
Fund to another corporation or trust, to the extent permitted under Maryland
law; and
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
49,469,222 1,939,474 2,699,677 17,900,002
AGENDA ITEM 13: To permit the Board of Directors to liquidate the assets of
the Fund, or of a series or class, and distribute the proceeds of such assets
to the holders of such shares representing such interests, without seeking
shareholder approval, to the extent permitted under Maryland law.
SHARES VOTED SHARES VOTED SHARES BROKER
FOR AGAINST ABSTAINING NON-VOTE
47,715,746 3,589,551 2,802,736 17,900,342
The Definitive Proxy Statement for the Special Meeting held on November 30,
1999, was filed with the Securities and Exchange Commission on October 12,
1999, and is incorporated by reference (File No. 811-4743).
ITEM 77Q(a): Amendment #13 to the Registrant's Charter
FEDERATED EQUITY INCOME FUND, INC.
ARTICLES OF AMENDMENT
FEDERATED EQUITY INCOME FUND, INC., a Maryland corporation (hereinafter
called the "Corporation"), hereby certifies to the State Department of
Assessments and Taxation that:
FIRST: The charter of the Corporation is amended by inserting, at the
end of Article EIGHTH, new subparagraphs (l) and (m), to read:
"(l) Notwithstanding any provision of the laws of the State of Maryland or in
these Articles of Incorporation requiring a shareholder vote of a greater
proportion, the Directors, with the concurrence of a majority of the
aggregate number of votes entitled to be cast thereon with respect to any or
all series or classes (or, to the extent permitted under Maryland law,
approval of a vote of the holders of a majority of the outstanding voting
securities of any or all series or classes, as defined in Section 2(a)(42) of
the Investment Company Act of 1940), may sell and convey the assets of the
Corporation, or a class or series of the Corporation, to another trust or
corporation organized under the laws of any state of the United States,
which is a diversified open-end management investment company as defined
in the Investment Company Act of 1940, for an adequate consideration which
may include the assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Corporation, or each class or
series of the Corporation, and which may include shares of beneficial
interest or stock of such trust or corporation. Upon making provision
for the payment of all the Corporation's liabilities, by such assumption
or otherwise, the Directors shall distribute the remaining proceeds ratably
among the holders of the shares of the Corporation then outstanding.
"(m) To the extent permitted under Maryland law, without the vote of the
shares of any class of stock of the Corporation then outstanding, the
Corporation may, upon approval of a majority of the Board of Directors, sell
and convert into money all the assets of any class or series of the
Corporation. Upon making provision for the payment of all outstanding
obligations, taxes and other liabilities, accrued or contingent, belonging
to the Corporation, or any class or series thereof, the Directors shall
distribute the remaining assets of the Corporation ratably among the
holders of the outstanding shares of the Corporation or any affected
class or series thereof."
SECOND: The foregoing amendments to the charter of the Corporation
were approved by the Board of Directors of the Corporation; and have been
duly approved by the shareholders of the Corporation at a special meeting of
the shareholders held on November 30, 1999.
IN WITNESS WHEREOF, Federated Equity Income Fund, Inc. has caused these
Articles of Amendment to be signed in its name and on its behalf as of
January 13, 2000, by its duly authorized officers, who acknowledge that
these Articles of Amendment are the act of the Corporation, that to the best
of their knowledge, information and belief, all matters and facts set forth
therein relating to the authorization and approval of these Articles are true
in all material respects, and that this statement is made under the penalties
of perjury.
WITNESS: FEDERATED EQUITY INCOME FUND, INC.
/s/ C. Grant Anderson By: /s/ J. Christopher Donahue
C. Grant Anderson J. Christopher Donahue
Assistant Secretary Executive Vice President
Report of Ernst & Young LLP, Independent Auditors
To the Board of Directors of
Federated Equity Income Fund, Inc.
In planning and performing our audit of the financial statements of Federated
Equity Income Fund, Inc. (the "Fund") for the year ended March 31, 2000, we
considered its internal control, including control activities for
safeguarding securities, to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and to comply
with the requirements of Form N-SAR, and not to provide assurance on internal
control.
The management of the Fund is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates and judgments
by management are required to assess the expected benefits and related costs
of internal control. Generally, internal controls that are relevant to an
audit pertain to the Fund's objective of preparing financial statements for
external purposes that are fairly presented in conformity with generally
accepted accounting principles. Those internal controls include the
safeguarding of assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in any internal control, misstatements due
to error or fraud may occur and not be detected. Also, projections of any
evaluation of internal control to future periods are subject to the risk
that internal control may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate.
Our consideration of internal control would not necessarily disclose all
matters in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of one or
more of the specific internal control components does not reduce to a
relatively low level the risk that error or fraud in amounts that would be
material in relation to the consolidated financial statements being audited
may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we noted no
matters involving internal control, including control activities for
safeguarding securities, and its operation that we consider to be material
weaknesses as defined above as of March 31, 2000.
This report is intended solely for the information and use of the board of
directors and management of Federated Equity Income Fund, Inc. and the
Securities and Exchange Commission and is not intended to be and should not
be used by anyone other than these specified parties.
ERNST & YOUNG LLP
May 15, 2000
