<PAGE> PAGE 1
000 B000000 12/31/97
000 C000000 0000914512
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 LINCOLN NATIONAL EQUITY INCOME FUND INC.
001 B000000 811-8126
001 C000000 2194556536
002 A000000 1300 SOUTH CLINTON STREET
002 B000000 FORT WAYNE
002 C000000 IN
002 D010000 46801
003 000000 N
004 000000 N
005 000000 N
006 000000 N
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007 C010100 1
007 C010200 2
007 C010300 3
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007 C010900 9
007 C011000 10
008 A000001 LINCOLN NATIONAL MANAGEMENT INC.
008 B000001 A
008 C000001 801-5098
008 D010001 FORT WAYNE
008 D020001 IN
008 D030001 46801
008 A000002 FIDELITY MANAGEMENT TRUST COMPANY
008 B000002 S
008 C000002 801-7884
008 D010002 BOSTON
008 D020002 MA
008 D030002 02212
011 A000001 THE LINCOLN NATIONAL LIFE INSURANCE CO. INC.
011 B000001 8-13034
011 C010001 FORT WAYNE
011 C020001 IN
011 C030001 46801
013 A000001 ERNST & YOUNG
013 B010001 FORT WAYNE
<PAGE> PAGE 2
013 B020001 IN
013 B030001 46802
014 A000001 LINCOLN FINANCIAL ADVISORS
014 B000001 8-14685
014 A000002 LYNCH & MAYER SECURITIES CORP.
014 B000002 8-114362
014 A000003 THE LINCOLN NATIONAL LIFE INSURANCE CO. INC.
014 B000003 8-13034
014 A000004 DELAWARE DISTRIBUTORS LP
014 B000004 8-29755
015 A000001 STATE STREET BANK & TRUST COMPANY
015 B000001 C
015 C010001 BOSTON
015 C020001 MA
015 C030001 02105
015 E010001 X
015 A000002 CITIBANK N.A.
015 B000002 S
015 C010002 --
015 D010002 ARGENTINA
015 E040002 X
015 A000003 WESTPAC BANKING CORPORATION
015 B000003 S
015 C010003 --
015 D010003 AUSTRALIA
015 E040003 X
015 A000004 GIROCREDIT BANK AKTIENGESELLSCHAFT
015 B000004 S
015 C010004 --
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015 E040004 X
015 A000005 GENERALE BANK
015 B000005 S
015 C010005 --
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015 E040005 X
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015 B000006 S
015 C010006 --
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015 E040006 X
015 A000007 CITIBANK N.A.
015 B000007 S
015 C010007 --
015 D010007 BRAZIL
015 E040007 X
015 A000008 CANADA TRUSTCO MORTGAGE COMPANY
015 B000008 S
015 C010008 --
015 D010008 CANADA
015 E040008 X
<PAGE> PAGE 3
015 A000009 CITIBANK N.A.
015 B000009 S
015 C010009 --
015 D010009 CHILE
015 E040009 X
015 A000010 HONG KONG & SHANGHAI BANKING CORP.
015 B000010 S
015 C010010 --
015 D010010 REPUBLIC OF CHINA
015 E040010 X
015 A000011 CITITRUST COLUMBIA S.A.
015 B000011 S
015 C010011 --
015 D010011 COLUMBIA
015 E040011 X
015 A000012 CESKOSLOVENSKA OBCHODNL BANKA A.S.
015 B000012 S
015 C010012 --
015 D010012 CZECH REPUBLIC
015 E040012 X
015 A000013 DEN DANSKE BANK
015 B000013 S
015 C010013 --
015 D010013 DENMARK
015 E040013 X
015 A000014 CITIBANK, N.A.
015 B000014 S
015 C010014 --
015 D010014 ECUADOR
015 E040014 X
015 A000015 NATIONAL BANK OF EGYPT
015 B000015 S
015 C010015 --
015 D010015 EGYPT
015 E040015 X
015 A000016 MERITA BANK LIMITED
015 B000016 S
015 C010016 --
015 D010016 FINLAND
015 E040016 X
015 A000017 BANQUE PARIBAS
015 B000017 S
015 C010017 --
015 D010017 FRANCE
015 E040017 X
015 A000018 DRESDNER BANK AG
015 B000018 S
015 C010018 --
015 D010018 GERMANY
015 E040018 X
015 A000019 NATIONAL BANK OF GREECE S.A.
<PAGE> PAGE 4
015 B000019 S
015 C010019 --
015 D010019 GREECE
015 E040019 X
015 A000020 STANDARD CHARTERED BANK
015 B000020 S
015 C010020 --
015 D010020 HONG KONG
015 E040020 X
015 A000021 CITIBANK BUDAPEST RT.
015 B000021 S
015 C010021 --
015 D010021 HUNGARY
015 E040021 X
015 A000022 DEUTSCHE BANK AG
015 B000022 S
015 C010022 --
015 D010022 INDIA
015 E040022 X
015 A000023 THE HONG KONG & SHANGHAI BANKING CORP. LTD.
015 B000023 S
015 C010023 --
015 D010023 INDIA
015 E040023 X
015 A000024 STANDARD CHARTERED BANK
015 B000024 S
015 C010024 --
015 D010024 INDONESIA
015 E040024 X
015 A000025 BANK OF IRELAND
015 B000025 S
015 C010025 --
015 D010025 IRELAND
015 E040025 X
015 A000026 BANK HAPOALIM B.M.
015 B000026 S
015 C010026 --
015 D010026 ISRAEL
015 E040026 X
015 A000027 BANQUE PARIBUS
015 B000027 S
015 C010027 --
015 D010027 ITALY
015 E040027 X
015 A000028 SOCIETE GENERALE DE BANQUES EN COTE D IVOIRE
015 B000028 S
015 C010028 --
015 D010028 IVORY COAST
015 E040028 X
015 A000029 DAIWA BANK, LIMITED
015 B000029 S
<PAGE> PAGE 5
015 C010029 --
015 D010029 JAPAN
015 E040029 X
015 A000030 THE FUJI BANK, LIMITED
015 B000030 S
015 C010030 --
015 D010030 JAPAN
015 E040030 X
015 A000031 THE SUMITOMO TRUST & BANKING CO., LTD.
015 B000031 S
015 C010031 --
015 D010031 JAPAN
015 E040031 X
015 A000032 SEOULBANK
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015 C010032 --
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015 E040033 X
015 A000034 CITIBANK MEXICO S.A.
015 B000034 S
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015 A000035 BANQUE COMMERCIALE DU MAROC
015 B000035 S
015 C010035 --
015 D010035 MOROCCO
015 E040035 X
015 A000036 MEESPIERSON N.V.
015 B000036 S
015 C010036 --
015 D010036 NETHERLANDS
015 E040036 X
015 A000037 ANZ BANKING GROUP (NEW ZEALAND) LIMITED
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015 C010037 --
015 D010037 NEW ZEALAND
015 E040037 X
015 A000038 CHRISTIANIA BANK OG
015 B000038 S
015 C010038 --
015 D010038 NORWAY
015 E040038 X
015 A000039 DEUTSCHE BANK AG
015 B000039 S
015 C010039 --
<PAGE> PAGE 6
015 D010039 PAKISTAN
015 E040039 X
015 A000040 CITIBANK N.A.
015 B000040 S
015 C010040 --
015 D010040 PERU
015 E040040 X
015 A000041 STANDARD CHARTERED BANK
015 B000041 S
015 C010041 --
015 D010041 PHILIPPINES
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015 A000042 CITIBANK POLAND S.A.
015 B000042 S
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015 E040042 X
015 A000043 BANCO COMERCIAL PORTUGUES
015 B000043 S
015 C010043 --
015 D010043 PORTUGAL
015 E040043 X
015 A000044 THE DEVELOPMENT BANK OF SINGAPORE LTD.
015 B000044 S
015 C010044 --
015 D010044 SINGAPORE
015 E040044 X
015 A000045 CESKOSLOVENSKA OBCHODNA BANKA A.S.
015 B000045 S
015 C010045 --
015 D010045 SLOVAK REPUBLIC
015 E040045 X
015 A000046 STANDARD BANK OF SOUTH AFRICA LIMITED
015 B000046 S
015 C010046 --
015 D010046 SOUTH AFRICA
015 E040046 X
015 A000047 BANCO SANTADER, S.A.
015 B000047 S
015 C010047 --
015 D010047 SPAIN
015 E040047 X
015 A000048 SKANDINAVISKA ENSKILDA BANKEN
015 B000048 S
015 C010048 --
015 D010048 SWEDEN
015 E040048 X
015 A000049 UNION BANK OF SWITZERLAND
015 B000049 S
015 C010049 --
015 D010049 SWITZERLAND
<PAGE> PAGE 7
015 E040049 X
015 A000050 CENTRAL TRUST OF CHINA
015 B000050 S
015 C010050 --
015 D010050 TAIWAN - R.O.C.
015 E040050 X
015 A000051 STANDARD CHARTERED BANK
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015 D010051 THAILAND
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015 A000052 CITIBANK N.A.
015 B000052 S
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015 E040052 X
015 A000053 STATE STREET BANK AND TRUST COMPANY
015 B000053 S
015 C010053 --
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015 A000054 CITIBANK N.A.
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020 A000007 FIRST BOSTON
020 B000007 13-5659485
020 C000007 13
<PAGE> PAGE 8
020 A000008 JP MORGAN
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020 A000009 MERRILL LYNCH
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022 C000003 4777
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022 C000004 1692
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022 C000005 904
022 D000005 1204
022 A000006 FIRST BOSTON CORP.
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022 C000006 499
022 D000006 1488
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022 B000007 13-2638166
022 C000007 1710
022 D000007 68
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022 B000008 13-2932996
022 C000008 860
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022 C000009 806
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022 A000010 ALEX BROWN & SONS
022 B000010 52-1319768
022 C000010 690
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<PAGE> PAGE 9
023 D000000 13703
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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SIGNATURE ERIC JONES
TITLE DIR. MUTUAL FUND
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000914512
<NAME> LINCOLN NATIONAL EQUITY INCOME FUND INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 603,038,297
<INVESTMENTS-AT-VALUE> 825,386,501
<RECEIVABLES> 4,225,429
<ASSETS-OTHER> 83,429
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 829,695,359
<PAYABLE-FOR-SECURITIES> 17,900,326
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 725,197
<TOTAL-LIABILITIES> 18,625,523
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 561,869,045
<SHARES-COMMON-STOCK> 40,315,773
<SHARES-COMMON-PRIOR> 28,971,111
<ACCUMULATED-NII-CURRENT> 9,232,321
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 17,621,623
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 222,346,847
<NET-ASSETS> 811,069,836
<DIVIDEND-INCOME> 14,332,829
<INTEREST-INCOME> 1,440,030
<OTHER-INCOME> (97,617)
<EXPENSES-NET> (6,442,921)
<NET-INVESTMENT-INCOME> 9,232,321
<REALIZED-GAINS-CURRENT> 17,621,623
<APPREC-INCREASE-CURRENT> 137,804,605
<NET-CHANGE-FROM-OPS> 164,658,549
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (12,117,083)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,211,887
<NUMBER-OF-SHARES-REDEEMED> (51,029)
<SHARES-REINVESTED> 1,183,804
<NET-CHANGE-IN-ASSETS> 353,916,499
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 12,117,083
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,053,404
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,442,921
<AVERAGE-NET-ASSETS> 634,375,645
<PER-SHARE-NAV-BEGIN> 15.780
<PER-SHARE-NII> 0.229
<PER-SHARE-GAIN-APPREC> 4.511
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.402)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 20.118
<EXPENSE-RATIO> 1.02
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
REPORT OF INDEPENDENT AUDITORS
TO THE SHAREHOLDER AND BOARD OF DIRECTORS OF LINCOLN NATIONAL AGGRESSIVE
GROWTH FUND, INC., LINCOLN NATIONAL BOND FUND, INC., LINCOLN NATIONAL CAPITAL
APPRECIATION FUND, INC., LINCOLN NATIONAL EQUITY-INCOME FUND, INC., LINCOLN
NATIONAL GLOBAL ASSET ALLOCATION FUND, INC., LINCOLN NATIONAL GROWTH AND
INCOME FUND, INC., LINCOLN NATIONAL INTERNATIONAL FUND, INC., LINCOLN NATIONAL
MANAGED FUND, INC., LINCOLN NATIONAL MONEY MARKET FUND, INC., LINCOLN NATIONAL
SOCIAL AWARENESS FUND, INC., AND LINCOLN NATIONAL SPECIAL OPPORTUNITIES FUND,
INC. (THE "FUNDS")
In planning and performing our audits of the financial statements of the Funds
for the year ended December 31, 1997, we considered their internal control,
including control activities for safeguarding securities, in order 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,
not to provide assurance on internal control.
The management of the Funds 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 controls. Generally, controls that are relevant to an audit pertain to the
entity's objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and not be detected. Also, projection of any evaluation of internal control
to future periods is subject to the risk that it may become inadequate because
of changes in conditions or that the effectiveness of the design and operation
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 specific internal control components does not reduce to a relatively low
level the risk that errors or fraud in amounts that would be material in
relation to the 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 and its operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above at
December 31, 1997.
This report is intended solely for the information and use of the board of
directors and management of the Funds and the Securities and Exchange
Commission.
Ernst & Young LLP
Philadelphia, Pennsylvania
February 4, 1998
