[LOGO OF FIDELITY INVESTMENTS]
Lincoln National
Equity-Income Fund, Inc.
Semi-Annual Report
June 30, 2000
<PAGE>
Lincoln National Equity-Income Fund, Inc.
Index
Commentary
Statement of Net Assets
Statement of Operations
Statements of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
<PAGE>
Lincoln National Equity-Income Fund, Inc.
Managed by: [LOGO OF FIDELITY INVESTMENTS]
The Fund returned -3.1% (net of fees) for the six months ended June 30, 2000
while its benchmark, the Russell 1000(R) Value Index, returned -4.2% for the
same period.
The broad equity market environment experienced a tumultuous period owing to
investor concern about extreme valuations for technology and communication
stocks with robust fundamentals as well as the sustainability of the US strong
economic expansion. By midyear, the Federal Reserves' program of tighter
monetary policy appeared to be taking some hold, leading to some fear that
slowing the rate of economic growth from 5% to 2% would be problematic for the
earnings of companies across industry sectors. In this income- and
value-oriented fund, energy stocks benefited from favorable industry
supply/demand and strong pricing, and several health positions with defensive
traits did well following a period of lagging performance. Certain turnarounds
and cyclical recovery stocks, however, had disappointing returns. We continued
to look for stocks that represent good value in today's marketplace, and our top
industry sector commitments at midyear were finance, energy, and utilities.
Stephen DuFour
Equity-Income Fund 1
<PAGE>
Lincoln National
Equity-Income Fund, Inc.
Statement of Net Assets - Unaudited
June 30, 2000
Investments:
Number Market
Common Stock: of Shares Value
-----------------------------------------------------------------------------
Aerospace & Defense : 2.4%
-----------------------------------------------------------------------------
Boeing 300,000 $ 12,543,750
Honeywell International 189,900 6,397,256
-----------------------------------------------------------------------------
18,941,006
Automobiles & Auto Parts: 2.5%
-----------------------------------------------------------------------------
General Motors * 18,419 1,069,453
Goodrich (B.F.) 5,900 200,969
Navistar International * 604,900 18,789,706
-----------------------------------------------------------------------------
20,060,128
Banking, Finance & Insurance: 28.1%
-----------------------------------------------------------------------------
American Express 80,800 4,211,700
American General 86,200 5,258,200
American International Group 115,437 13,563,847
Associates First Capital Class A 84,000 1,874,250
Axa Financial 171,400 5,827,600
Bank One 119,000 3,160,938
Bank of America 156,800 6,742,400
Bank of New York 300,400 13,968,600
Commerce Bancorp 16,400 754,400
Chase Manhattan 250,500 11,538,655
Chubb 40,900 2,515,350
Cigna 13,800 1,290,300
Citigroup 541,450 32,622,362
Federal Home Loan 448,500 18,164,250
Federal National Mortgage 619,500 32,330,156
Firstar 66,300 1,396,444
Fleet Boston Financial 167,000 5,678,000
Lehman Brothers Holdings 61,100 5,777,769
Mellon Financial 533,400 19,435,762
Merrill Lynch & Company 28,800 3,312,000
Metropolitan Life Insurance 102,100 2,150,481
Morgan Stanley Dean Witter 101,700 8,466,525
Northern Trust 32,700 2,127,544
PNC Financial Group 258,200 12,103,124
St. Paul 16,700 569,888
State Street Bank 13,200 1,400,025
Suntrust Banks 29,200 1,334,075
Washington Mutual 65,700 1,897,088
Wells Fargo 92,700 3,592,125
Wilmington Trust 21,800 931,950
-----------------------------------------------------------------------------
223,995,808
Cable, Media & Publishing: 3.1%
-----------------------------------------------------------------------------
AT&T - Liberty Media Class A * 300,200 7,279,850
Clear Channel Communications * 24,200 1,815,000
Gannett 31,200 1,866,150
InterPublic Group 17,200 739,600
McGraw-Hill 160,100 8,645,400
New York Times 99,800 3,942,100
Tribune 23,900 836,500
-----------------------------------------------------------------------------
25,124,600
Chemical: 3.2%
-----------------------------------------------------------------------------
Avery Dennison 83,000 5,571,375
Dow Chemical 146,700 4,428,506
NRG Energy * 22,400 408,800
Pharmacia 124,818 6,451,530
PPG Industries 124,300 5,508,044
Rohm & Haas 26,600 917,700
Union Carbide 50,100 2,479,950
-----------------------------------------------------------------------------
25,765,905
Computers & Technology: 2.2%
-----------------------------------------------------------------------------
Ceridian 51,600 1,241,624
International Business Machines 58,600 6,420,363
Michron Technology 13,500 1,188,844
Number Market
Computers & Technology (Cont.) of Shares Value
-----------------------------------------------------------------------------
Microsoft * 47,500 $ 3,800,000
Unisys * 328,218 4,779,675
U.S. Networks 500 12,250
-----------------------------------------------------------------------------
17,442,756
Consumer Products: 2.3%
-----------------------------------------------------------------------------
Clorox 42,900 1,922,456
Minnesota Mining & Manufacturing 166,700 13,752,750
Procter & Gamble 48,700 2,788,075
-----------------------------------------------------------------------------
18,463,281
Electronics & Electrical: 1.9%
-----------------------------------------------------------------------------
Eaton 6,800 455,600
Emerson Electric 65,900 3,978,713
General Electric 207,400 10,992,200
-----------------------------------------------------------------------------
15,426,513
Energy: 18.5%
-----------------------------------------------------------------------------
Burlington Resources 149,000 5,699,250
Chevron 80,900 6,861,331
Coastal 80,400 4,894,350
Conoco Class B 136,900 3,362,606
Cooper Cameron * 7,100 468,600
Diamond Offshore Drilling 206,500 7,253,312
Dynegy 171,990 11,749,067
El Paso Energy 126,100 6,423,219
Enron 104,100 6,714,450
Exxon Mobil 659,400 51,762,900
Grant Prideco 454,400 11,360,000
Noble Drilling * 313,500 12,912,281
Petro-Canada 15,100 287,844
Weatherford Interntional * 445,700 17,744,431
-----------------------------------------------------------------------------
147,493,641
Food, Beverage & Tobacco: 3.8%
-----------------------------------------------------------------------------
Anheuser Busch 106,500 7,954,219
Coca Cola 64,900 3,727,694
Coca-Cola Enterprises 97,900 1,596,994
Heinz (H.J.) 69,600 3,045,000
Philip Morris 245,300 6,515,781
Quaker Oats 103,700 7,790,463
-----------------------------------------------------------------------------
30,630,151
Healthcare & Pharmaceuticals: 8.6%
-----------------------------------------------------------------------------
Abbott Laboratories 47,600 2,121,175
American Home Products 52,900 3,107,875
Baxter International 59,400 4,176,563
Bristol-Myers Squibb 137,700 8,021,025
Johnson & Johnson 99,200 10,106,000
Lilly (Eli) 245,700 24,539,288
Merck & Company 52,900 4,053,463
Pfizer 176,275 8,461,200
Schering-Plough 86,100 4,348,050
-----------------------------------------------------------------------------
68,934,639
Industrial Machinery: 0.1%
-----------------------------------------------------------------------------
Ingersoll-Rand 9,700 390,425
Parker Hannifin 10,700 366,475
-----------------------------------------------------------------------------
756,900
Leisure, Lodging & Entertainment: 1.5%
-----------------------------------------------------------------------------
MGM Grand 27,000 867,375
Walt Disney 290,500 11,275,031
-----------------------------------------------------------------------------
12,142,406
Metals & Mining: 0.3%
-----------------------------------------------------------------------------
Alcoa 67,564 1,959,356
-----------------------------------------------------------------------------
Office/Industrial Reits: 1.2%
-----------------------------------------------------------------------------
Crescent Real Estate Equities 16,100 330,050
Duke-Weeks Realty 4,600 102,925
Equity Office Properties Trust 292,800 8,070,300
Equity Residential Properties 29,600 1,361,600
-----------------------------------------------------------------------------
9,864,875
Equity-Income Fund 2
<PAGE>
Number Market
of Shares Value
-----------------------------------------------------------------------------
Retail: 1.5%
-----------------------------------------------------------------------------
Colgate-Palmolive 61,800 $ 3,700,275
Limited 66,400 1,435,900
Safeway * 51,500 2,323,938
Wal-Mart Stores 75,800 4,367,975
-----------------------------------------------------------------------------
11,828,088
Telecommunications: 10.2%
-----------------------------------------------------------------------------
AT&T 271,250 8,578,281
Alltel 15,400 953,838
BellSouth 344,000 14,663,000
Comcast - Special Class A * 55,600 2,251,800
Qwest Communications International * 191,700 9,525,094
SBC Communications 471,200 20,379,400
Time Warner Telecommunications Class A * 63,200 4,068,500
True North Communications 96,200 4,232,800
U.S.West 89,900 7,708,925
Worldcom 194,232 8,910,393
-----------------------------------------------------------------------------
81,272,031
Textiles, Apparel, & Furniture: 0.4%
-----------------------------------------------------------------------------
Nike 82,500 3,284,531
-----------------------------------------------------------------------------
Transportation & Shipping: 0.9%
-----------------------------------------------------------------------------
Burlington Northern Santa Fe 72,300 1,658,381
Norfolk Southern 215,400 3,204,075
Southwest Airlines 48,800 924,150
Tidewater 26,000 936,000
United Parcel Service Class B 10,800 637,200
-----------------------------------------------------------------------------
7,359,806
Utilities: 1.5%
-----------------------------------------------------------------------------
Ipalco Enterprises 125,400 2,523,675
Keyspan 96,700 2,973,525
Montana Power Company 20,100 709,781
PECO Energy 43,300 1,745,531
Southern 23,200 540,850
Sprint 69,900 3,564,900
-----------------------------------------------------------------------------
12,058,262
Total Common Stock: 94.2%
(Cost $693,020,401) 752,804,683
-----------------------------------------------------------------------------
Preferred Stocks:
-----------------------------------------------------------------------------
Alliant Energy * 7,400 510,600
Monsanto 88,600 4,009,150
Qwest Trends 25,300 2,027,163
Union Pacific Capital Trust * 128,200 5,031,850
-----------------------------------------------------------------------------
Total Preferred Stocks: 1.5%
(Cost $11,347,775) 11,578,763
-----------------------------------------------------------------------------
Convertible Bonds:
Clear Channel Communications
2.6250% 2/01/09 540,000 698,625
Kerr McGee
5.2500% 2/15/10 3,570,000 4,127,813
Level 3 Communications
6.0000% 3/15/10 420,000 380,100
Liberty Media Convertible Bond 144A
3.7500% 2/15/30 4,804,000 5,242,365
-----------------------------------------------------------------------------
Total Convertible Bonds: 1.3%
(Cost $9,533,250) 10,448,903
-----------------------------------------------------------------------------
Par Market
Repurchase Agreement: Amount Value
-----------------------------------------------------------------------------
State Street Bank & Trust Co.
Repurchase Agreement,
dated 6/30/00, 5.55%, maturing 7/03/00,
collaterized by $11,875,000 U.S. Treasury
Bonds 11.25%, 2/15/15,
market value $18,020,313 $17,660,000 $ 17,660,000
-----------------------------------------------------------------------------
Total Repurchase Agreement: 2.2%
(Cost $17,660,000) 17,660,000
-----------------------------------------------------------------------------
Total Investments: 99.2%
(Cost $731,561,426) 792,492,349
-----------------------------------------------------------------------------
Other Assets Over Liabilities: 0.8% 6,397,140
-----------------------------------------------------------------------------
Net Assets: 100.0%
(Equivalent to $15.401 per share based
on 51,872,080 shares issued and outstanding $ 798,889,489
-----------------------------------------------------------------------------
Components of Net Assets at June 30, 2000:
-----------------------------------------------------------------------------
Common Stock, par value $.01 per share,100,000,000
authorized shares 518,721
Paid in capital in excess of par value of
shares issued 737,036,635
Undistributed net investment income ** 4,175,397
Accumulated net realized loss on investments (3,766,131)
Net unrealized appreciation of investments
and foreign currencies 60,924,867
-----------------------------------------------------------------------------
Total Net Assets $798,889,489
-----------------------------------------------------------------------------
* Non income producing security.
** Undistributed net investment income includes net realized gain on foreign
currencies. Net realized gains on foreign currencies are treated as net
investment income in accordance with provisions of the Internal Revenue
Code.
See accompanying notes to financial statements.
Equity-Income Fund 3
<PAGE>
Lincoln National Equity-Income Fund, Inc.
Statement of Operations - Unaudited
Six months ended June 30, 2000
<TABLE>
<CAPTION>
<S> <C>
Investment income:
Dividends $5,788,592
----------------------------------------------------------------------------------------------------------
Interest 903,922
----------------------------------------------------------------------------------------------------------
Less: Foreign withholding tax (1,100)
----------------------------------------------------------------------------------------------------------
Total investment income 6,691,414
----------------------------------------------------------------------------------------------------------
Expenses:
Management fees 3,137,004
----------------------------------------------------------------------------------------------------------
Accounting fees 179,650
----------------------------------------------------------------------------------------------------------
Printing and postage 49,361
----------------------------------------------------------------------------------------------------------
Custodial fees 24,794
----------------------------------------------------------------------------------------------------------
Directors fees 2,100
----------------------------------------------------------------------------------------------------------
Other 70,769
----------------------------------------------------------------------------------------------------------
Total expenses 3,463,678
----------------------------------------------------------------------------------------------------------
Net investment income 3,227,736
----------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments
and foreign currency:
Net realized gain on:
Investment transactions 13,200,527
----------------------------------------------------------------------------------------------------------
Foreign currency transactions 17,877
----------------------------------------------------------------------------------------------------------
Net realized gain on investments and
foreign currency transactions 13,218,404
----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation/depreciation of:
Investments (45,953,970)
----------------------------------------------------------------------------------------------------------
Foreign currency (2,332)
----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation/depreciation of investments and foreign currency (45,956,302)
----------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments and foreign currency (32,737,898)
----------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $(29,510,162)
----------------------------------------------------------------------------------------------------------
</TABLE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six months
ended
6/30/00 Year ended
(Unaudited) 12/31/99
--------------------------------
<S> <C> <C>
Changes from operations:
Net investment income $ 3,227,736 $ 8,778,015
--------------------------------------------------------------------------------------------------
Net realized gain on investmentand foreign currency transactions 13,218,404 217,473,962
--------------------------------------------------------------------------------------------------
Net change in unrealized appreciation/depreciation
of investments and foreign currency (45,956,302) (167,842,006)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations (29,510,162) 58,409,971
--------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income - (7,883,950)
--------------------------------------------------------------------------------------------------
Net realized gain on investment transactions (233,972,872) (40,297,143)
--------------------------------------------------------------------------------------------------
Total distributions to shareholders (233,972,872) (37,391,876)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from capital share transactions 71,614,168 (11,447,219)
--------------------------------------------------------------------------------------------------
Total decrease in net assets (191,868,866) (1,218,341)
--------------------------------------------------------------------------------------------------
Net Assets, beginning of period 990,758,355 991,976,696
--------------------------------------------------------------------------------------------------
Net Assets, end of period $798,889,489 $990,758,355
--------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
Equity-Income Fund 4
<PAGE>
Lincoln National Equity-Income Fund, Inc.
Financial Highlights
(Selected data for each capital share outstanding throughout each period)
<TABLE>
<CAPTION>
Six months
ended
6/30/00 Year ended December 31,
(Unaudited) 1999 1998 1997 1996 1995
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.047 $ 21.715 $ 20.118 $ 15.780 $ 13.507 $ 10.335
Income from investment operations:
Net investment income(2) 0.078 0.189 0.282 0.229 0.288 0.275
Net realized and unrealized gain (loss)
on investments and foreign currency (0.498) 1.204 2.204 4.511 2.451 3.218
----------------------------------------------------------------------------
Total from investment operations (0.420) 1.393 2.486 4.740 2.739 3.493
----------------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income - (0.171) (0.460) - (0.288) (0.275)
Distributions from net realized gain on
investment transactions (6.226) (0.890) (0.429) (0.402) (0.178) (0.046)
----------------------------------------------------------------------------
Total dividends and distributions (6.226) (1.061) (0.889) (0.402) (0.466) (0.321)
----------------------------------------------------------------------------
Net asset value, end of period $ 15.401 $ 22.047 $ 21.715 $ 20.118 $ 15.780 $ 13.507
----------------------------------------------------------------------------
Total Return(1) (3.07%) 6.27% 12.73% 30.67% 19.81% 34.74%
Ratios and supplemental data:
Ratio of expenses to average net assets 0.81%(3) 0.79% 0.79% 1.02% 1.08% 1.15%
Ratio of net investment income
to average net assets 0.75%(3) 0.86% 1.40% 1.46% 1.99% 2.27%
Portfolio Turnover 137.10% 191.21% 29.04% 17.81% 22.17% 27.81%
Net assets, end of period (000 omitted) $798,889 $990,758 $991,977 $811,070 $457,153 $238,771
</TABLE>
(1) Total return percentages in this table are calculated on the basis
prescribed by the Securities and Exchange Commission. These percentages are
based on the underlying mutual fund shares. The total return percentages in
the table are NOT calculated on the same basis as the performance
percentages in the letter at the front of this booklet (those percentages
are based upon the change in unit value).
(2) Per share information for the periods ended June 30, 2000, December 31, 1999
and 1998 were based on the average shares outstanding method.
(3) Annualized
See accompanying notes to financial statements.
Equity-Income Fund 5
<PAGE>
Lincoln National Equity-Income Fund, Inc.
Notes to Financial Statements - Unaudited
June 30, 2000
The Fund: Lincoln National Equity-Income Fund, Inc. (the "Fund") is registered
as an open-end, diversified management investment company under the Investment
Company Act of 1940, as amended. The Fund's shares are sold only to The Lincoln
National Life Insurance Company and the Lincoln National Life Insurance Company
of New York (the "Companies") for allocation to their variable products and
variable universal life products.
The Fund's investment objective is to achieve reasonable income by investing
primarily in income-producing equity securities. The Fund invests mostly in
high-income stocks and some high-yielding bonds.
1. Significant Accounting Policies
Security Valuation: Securities listed on an exchange are valued at the last
quoted sales price as of the close of the New York Stock Exchange (NYSE) on the
valuation date. Securities not traded or securities not listed on an exchange
are valued at the mean of the last quoted bid and asked prices. Securities
listed on a foreign exchange are valued at the last quoted sales price before
each Fund is valued. Long-term debt securities are4 valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities Money market instruments having less than 60 days to maturity are
valued at amortized cost, which approximates market value. Other securities and
assets for which market quotations are not readily available at fair value as
determined in good faith by or under the direction of the Fund's Board of
Trustees.
Investment Transactions and Investment Income: Investment transactions are
accounted for on the trade date. Dividend income is recorded on the ex-dividend
date and interest income is recorded on the accrual basis and includes
amortization of any premium and discount. Foreign dividends are also recorded on
the ex-dividend date or as soon after the ex-dividend date that the Fund is
aware of such dividends, net of all non-rebatable tax withholdings. Withholding
taxes on foreign interest and dividends have been provided for in accordance
with the applicable country's tax rules and rates. Realized gains or losses from
investment transactions are reported on an identified cost basis.
Foreign Currency Transactions: The books and records of the Fund are maintained
in U.S. dollars. All assets and liabilities denominated in a foreign currency
are translated into U.S. dollars based upon foreign exchange rates prevailing at
the end of the period. Income and expenses and purchases and sales of
investments are translated into U.S. dollars at the rate of exchange prevailing
on the respective dates of such transactions. It is not practical to isolate
that portion of both realized and unrealized gains and losses on investments in
equity securities that result from fluctuations in foreign currency exchange
rates in the statement of operations.
Reported net realized gains and losses on foreign currency transactions arise
from sales and maturities of forward foreign currency contracts, currency gains
and losses between the trade and settlement dates on securities transactions,
and the differences between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of
the amounts actually received or paid. Net change in unrealized appreciation or
depreciation on translation of assets and liabilities in foreign currencies
arise from changes in the value of other assets and liabilities at the end of
the period resulting from changes in the exchange rates.
Use of Estimates: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.
Taxes: The Fund has complied with the special provisions of the Internal Revenue
Code for regulated investment companies. As such, the Fund is not subject to
U.S. federal income taxes to the extent that it distributes all of its taxable
income for its fiscal year.
2. Management Fees and Other Transactions With Affiliates
Lincoln Investment Management Company (the "Advisor") and its affiliates manage
the Fund's investment portfolio and maintain its accounts and records. For these
services, the Advisor receives a management fee at an annual rate of .75% of the
first $500 million on the average daily net assets of the Fund and .70% of the
excess over $500 million. The sub-advisor, Fidelity Investments, is paid
directly by the Advisor.
Equity-Income Fund 6
<PAGE>
Notes to Financial Statements - Unaudited - (Continued)
Delaware Service Company ("Delaware"), an affiliate of the Advisor, provides
accounting services and other administration support to the Fund. In return for
these services, the Fund pays Delaware a monthly fee based on average net
assets, subject to certain minimums.
If the aggregate annual expenses of the Fund, including the management fee, but
excluding taxes, interest, brokerage commissions relating to the purchase or
sale of portfolio securities and extraordinary non-recurring expenses, exceed
1.50% of the average daily net assets of the Fund, the Advisor will reimburse
the Fund in the amount of such excess. No reimbursement was due for the six
months ended June 30, 2000.
Certain officers and directors of the Fund are also officers or directors of the
Companies and receive no compensation from the Fund. The compensation of
unaffiliated directors of the Fund is borne by the Fund.
3. Investments
The cost of investments for federal income tax purposes approximates cost for
book purposes. The aggregate cost of investments purchased and the aggregate
proceeds from investments sold for the six months ended June 30, 2000 and the
aggregate gross unrealized appreciation, the aggregate gross unrealized
depreciation and the net unrealized appreciation at June 30, 2000 are as
follows:
<TABLE>
<CAPTION>
Aggregate Aggregate Gross Gross Net
Cost of Proceeds Unrealized Unrealized Unrealized
purchases From Sales Appreciation Depreciation Appreciation
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$574,786,602 $721,265,137 $102,432,049 $(41,501,126) $60,930,923
</TABLE>
4. Supplemental Financial Instrument Information
Repurchase Agreements: The Fund, through its custodian, receives delivery of the
underlying securities, whose market value is required to be at least 102% of the
repurchase price. The Advisor is responsible for determining that the value of
the collateral is at least equal to the repurchase price. However, in the event
of default or bankruptcy by the counterparty to the agreement, realization of
the collateral may be subject to legal proceedings.
5. Credit and Market Risks
The Fund invests in foreign securities. As a result, there may be additional
risks, such as the investments being subject to restrictions as to repatriation
of cash back to the United States and to political or economic uncertainties. At
June 30, 2000, the Fund did not have investments in excess of 5% of net assets
in any individual foreign country.
The Fund may invest in illiquid securities which may include securities with
contractual restrictions on resale, securities exempt from registration under
rule 144A of the Securities Act of 1933, as amended, and other securities which
may be readily marketable. The relative illiquidity of some of these securities
may adversely affect the Fund's ability to dispose of such securities in a
timely manner and at a fair price when it is necessary to liquidate such
securities.
6. Summary of Changes From Capital Share Transactions
<TABLE>
<CAPTION>
Shares Issued Upon Net Increase(Decrease)
Capital Reinvestment of Capital Shares Resulting From Capital
Shares Sold Dividends Redeemed Share Transactions
------------------------------------------------------------------------------------------------------------
Shares Amount Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Six months ended
June 30, 2000
(Unaudited): 266,460 $ 5,552,683 14,571,394 $233,972,872 (7,905,169) $(167,911,387) 6,932,685 $(71,614,168)
Year ended
December 31, 1999: 1,809,799 40,435,319 2,108,094 48,181,093 (4,659,377) (100,063,631) (741,484) (11,447,219)
</TABLE>
7. Distributions to Shareholders
The Fund declares and distributes dividends on net investment income, if any,
semi-annually. Distributions of net realized gains, if any, are declared and
distributed annually.
Equity-Income Fund 7
