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TOP HOLDINGS AND ALLOCATIONS


Top Ten Common Stock Industries

Insurance	8.9	%

Oil, Gas & Consumable Fuels	8.8

Pharmaceuticals	7.0

Diversified Financial Services	6.3

Diversified Telecommunication Services	4.9

Electric Utilities	4.0

Capital Markets	3.1

Food & Staples Retailing	3.1

Software	2.9

Tobacco	2.8

Portfolio holdings and allocations are subject to change. Percentages are as of October 29, 2010, and are based on net assets.


Top Ten Common Stock Holdings

JPMorgan Chase & Co.	3.9	%

Pfizer, Inc.	3.0

Microsoft Corp.	2.9

MetLife, Inc.	2.8

Everest Re Group Ltd.	2.6

Merck & Co., Inc.	2.3

Chevron Corp.	2.1

Exxon Mobil Corp.	2.0

Morgan Stanley	1.9

Royal Dutch Shell plc, ADR	1.8

Portfolio holdings and allocations are subject to change. Percentages are as of October 29, 2010, and are based on net assets. For more current Top 10 Fund holdings, please visit www.oppenheimerfunds.com.

6 | OPPENHEIMER EQUITY INCOME FUND, INC.

FUND PERFORMANCE DISCUSSION

How has the Fund performed? Below is a discussion by OppenheimerFunds, Inc. of the Fund’s performance during its 2010 fiscal year, followed by a graphical comparison of the Fund’s performance to appropriate broad-based market indices.¹

Management’s Discussion of Fund Performance. During the reporting period, Oppenheimer Equity Income Fund, Inc.’s Class A shares (without sales charge) returned 21.25%. The Fund outperformed both the Russell 3000 Value Index and S&P 500 Index, which returned 16.40% and 16.54%, respectively, during the reporting period.

The Fund’s outperformance can be attributed primarily to strong stock selection and to favorable sector weightings. In addition, based on our economic and market research, we positioned the Fund for a slowly improving economy and not for a double-dip recession. We expected economic growth to continue to gradually expand, and given that interest rates were low, we believed that equities offered a very attractive risk/reward benefit for investors.

The Fund’s best performing sectors relative to the Russell 3000 Value Index (the “Index”) were telecommunication services, financials, health care, consumer discretionary and energy. The top contributors to performance within the telecommunication services sector were Rural Local Exchange Carriers (RLECs). RLECs remain attractive to the Fund due to the high dividends that they pay out. These companies also benefited from historically low interest rates. Among the Fund’s RLEC holdings, the top individual contributor was Consolidated Communications Holdings, Inc. Within the financials sector, top individual contributors included KKR Financial Holdings LLC, XL Group plc and Assurant, Inc. KKR, a specialty finance company that primarily owns senior debt in a diversified basket of major corporations, performed well as a result of improvements in credit markets. Insurance company XL Group produced favorable results due to sound business fundamentals and depressed valuations. Assurant, a specialty insurance company, also contributed to the Fund’s outperformance.

In the health care sector, Biovail Corp. and Merck & Co., Inc. added to performance. Merck & Co., the world’s second largest drugmaker and a top ten holding of the Fund, performed well as the market looked to the company’s growing sales in emerging markets and a generally positive outlook for the stock. Additionally, the company completed a merger with Schering-Plough in November of 2009, which also boosted Merck’s stock performance. Biovail, a specialty pharmaceutical company, was the largest individual contributor to performance for the Fund over the period. Biovail outperformed as a result of its merger with Valeant Pharmaceuticals International, Inc. We did not hold a


1.		The Fund’s return has been calculated through October 29, 2010, the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes to Financial Statements. Index returns are calculated through October 31, 2010.

8 | OPPENHEIMER EQUITY INCOME FUND, INC.

position in Valeant Pharmaceuticals at period end. In the consumer discretionary sector, Brinker International, Inc. and Cinemark Holdings, Inc. contributed positively to the Fund’s results. Brinker International, a casual dining restaurant company that owns brands such as Chili’s Grill and Bar, outperformed due to a favorable free cash flow position. Cinemark, a movie chain theatre operator, benefited from strong box office sales due to consumers’ interest in 3-D movie technology.

Within the energy sector, Kinder Morgan Management LLC, an energy company that operates a large network of natural gas and refined petroleum pipelines, and Halliburton Co., an oilfield services corporation, outperformed. Kinder Morgan’s stock price rose as investors were drawn to the company’s strong presence in the energy area and its attractive dividend. While Halliburton witnessed some volatility during the period, we benefited as it rallied.

Although the Fund outperformed the Index in the financials sector, some of its top detractors were within the sector, which lagged the overall market. These included JPMorgan Chase & Co., Citigroup, Inc., Bank of America Corp. and Morgan Stanley. Over the period, financial stocks were hurt by the uncertain regulatory environment and very low interest rates, which compressed their net interest margins and renewed concerns about foreclosures and the mortgage market.

On a sector basis, the greatest areas of relative underperformance for the Fund were in the industrials, utilities and consumer staples sectors. Despite underperforming in these sectors, the Fund produced positive absolute results in them all. Within industrials, the primary reason for the Fund’s underperformance versus the Index was its overweight position in defense-related securities. Over the year, defense companies as a group under-performed due to concerns over pressures on the national defense budget. Top detractors from the Fund’s performance included General Dynamics Corp. and Lockheed Martin Corp. Despite disappointing performance within the defense group, we continue to own these stocks as we believe they are solid companies with good cash flows.

In the consumer staples sector, two stocks that hurt performance were The Kroger Co., a retail supermarket chain, and Walgreen Co., a drugstore chain. Stiffer competition from competitors and disappointing earnings contributed to these stocks underperforming. Within the utilities sector, the largest detractor from the Fund’s performance was First Energy Corp. First Energy’s stock price declined as concerns surfaced over its pending merger with Allegheny Energy, Inc. The Fund’s performance was also hurt by its holdings in CONSOL Energy, Inc. and Transocean Ltd. CONSOL Energy suffered as concerns arose over the company’s acquisition of natural gas assets. Offshore drilling company Transocean declined due to the company’s involvement in the Gulf of Mexico oil spill.

9 | OPPENHEIMER EQUITY INCOME FUND, INC.

FUND PERFORMANCE DISCUSSION

During the period, allocation changes were made to the Fund’s financials and information technology sectors. We increased the Fund’s exposure to the financials sector as opportunities arose. Despite having underperformed the market over the year due to regulatory changes, a low interest rate environment and foreclosure concerns, we believe that financial stocks offer an attractive risk/reward benefit. We believe that all of the mentioned concerns are reflected in the valuation of financial stocks and improvements to the group will continue as access to credit continues to improve over the coming months. We also anticipate that financial companies will increase their dividend payments as fundamentals improve. We have also added to the Fund’s information technology holdings by initiating positions in Microsoft Corp. and Intel Corp. We believe that both companies offer attractive valuations and dividend yields.

Comparing the Fund’s Performance to the Market. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until October 29, 2010. In the case of Class A, B and C shares, performance is measured over a ten fiscal year period. In the case of Class N shares, performance is measured from inception of the Class on March 1, 2001. The Fund’s performance reflects the deduction of the maximum initial sales charge on Class A shares, the applicable contingent deferred sales charge on Class B, Class C and Class N shares, and reinvestment of all dividends and capital gains distributions. Past performance cannot guarantee future results.

The Fund’s performance is compared to the performance of the Standard & Poor’s (S&P) 500 Index, an unmanaged index of equity securities. The Fund’s performance is also measured against the Russell 3000 Value Index, an unmanaged index of the 3,000 largest U.S. companies with lower price-to-book ratios and lower forecasted growth values. Index performance reflects the reinvestment of income but does not consider the effect of transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund’s performance reflects the effects of the Fund’s business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund’s performance, it must be noted that the Fund’s investments are not limited to the securities comprising the index.

10 | OPPENHEIMER EQUITY INCOME FUND, INC.

Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:¹

Oppenheimer Equity Income Fund, Inc. (Class A) S&P 500 Index Russell 3000 Value Index Average Annual Total Returns of Class A Shares with Sales Charge of the Fund at 10/29/10 1-Year 14.28% 5-Year 3.85% 10-Year 4.68%

The performance data quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. For performance data current to the most recent month end, visit us at www.oppenheimerfunds.com, or call us at 1.800.525.7048. Fund returns include changes in share price, reinvested distributions, and the applicable sales charge: for Class A shares, the current maximum initial sales charge of 5.75%; for Class B shares, the contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class C and N shares, the contingent deferred sales charge of 1% for the 1-year period. Because Class B shares convert to Class A shares 72 months after purchase, the 10-year return for Class B shares uses Class A performance for the period after conversion. See page 15 for further information.


1.		The Fund’s returns have been calculated through October 29, 2010, the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes to Financial Statements. Index returns are calculated through October 31, 2010.

11 | OPPENHEIMER EQUITY INCOME FUND, INC.

Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:¹

Oppenheimer Equity Income Fund, Inc. (Class C) S&P 500 Index Russell 3000 Value Index Average Annual Total Returns of Class C Shares with Sales Charge of the Fund at 10/29/10 1-Year 19.30% 5-Year 4.21% 10-Year 4.45%


1.		The Fund’s returns have been calculated through October 29, 2010, the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes to Financial Statements. Index returns are calculated through October 31, 2010.

13 | OPPENHEIMER EQUITY INCOME FUND, INC.

FUND PERFORMANCE DISCUSSION

Class N Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:¹

Oppenheimer Equity Income Fund, Inc. (Class N) S&P 500 Index Russell 3000 Value Index Average Annual Total Returns of Class N Shares with Sales Charge of the Fund at 10/29/10 1-Year 19.77% 5-Year 4.70% Since Inception (3/1/01) 5.10%


1.		The Fund’s returns have been calculated through October 29, 2010, the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes to Financial Statements. Index returns are calculated through October 31, 2010.

14 | OPPENHEIMER EQUITY INCOME FUND, INC.

NOTES

Total returns and the ending account values in the graphs include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns shown do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

Investors should consider the Fund’s investment objectives, risks, expenses and other charges carefully before investing. The Fund’s prospectus and, if available, the Fund’s summary prospectus contain this and other information about the Fund, and may be obtained by asking your financial advisor, calling us at 1.800.525.7048 or visiting our website at www.oppenheimerfunds.com. Read the prospectus and, if available, the summary prospectus carefully before investing.

The Fund’s investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc.

Class A (formerly Capital) shares of the Fund were first publicly offered on 2/13/87. Unless otherwise noted, average annual total returns for Class A shares includes the current 5.75% maximum initial sales charge.

Class B shares of the Fund were first publicly offered on 3/3/97. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 2% (5-year). Because Class B shares convert to Class A shares 72 months after purchase, the 10-year return for Class B shares uses Class A performance for the period after conversion. Class B shares are subject to an annual 0.75% asset-based sales charge.

Class C shares of the Fund were first publicly offered on 3/3/97. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge.

Class N shares of the Fund were first publicly offered on 3/1/01. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge.

An explanation of the calculation of performance is in the Fund’s Statement of Additional Information.

15 | OPPENHEIMER EQUITY INCOME FUND, INC.

FUND EXPENSES

Fund Expenses. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended October 29, 2010.

Actual Expenses. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes. The second section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio for each class of shares, and an assumed rate of return of 5% per year for each class before expenses, which is not the actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in the Statement of Additional Information).

16 | OPPENHEIMER EQUITY INCOME FUND, INC.

Therefore, the “hypothetical” section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


	Beginning		Ending		Expenses
	Account		Account		Paid During
	Value		Value		6 Months Ended
	May 1, 2010		October 29, 2010		October 29, 2010

Actual
Class A	$	1,000.00	$	1,033.40	$	6.05

Class B		1,000.00		1,029.20		10.88

Class C		1,000.00		1,029.30		10.32

Class N		1,000.00		1,031.60		8.03

Hypothetical (5% return before expenses)

Class A		1,000.00		1,019.00		6.01

Class B		1,000.00		1,014.26		10.80

Class C		1,000.00		1,014.81		10.25

Class N		1,000.00		1,017.05		7.98

Expenses are equal to the Fund’s annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated fund, based on the 6-month period ended October 29, 2010 are as follows:


Class	Expense Ratios

Class A		1.19	%

Class B		2.14

Class C		2.03

Class N		1.58

The expense ratios reflect voluntary waivers or reimbursements of expenses by the Fund’s Manager and Transfer Agent. Some of these undertakings may be modified or terminated at any time; some may not be modified or terminated until after one year from the date of the current prospectus, as indicated therein. The “Financial Highlights” tables in the Fund’s financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements and reduction to custodian expenses, if applicable.

17 | OPPENHEIMER EQUITY INCOME FUND, INC.

STATEMENT OF INVESTMENTS October 29, 2010*


	Shares		Value

Common Stocks—77.9%
Consumer Discretionary—7.4%
Auto Components—0.7%
Lear Corp.¹		90,500	$	8,000,200
Hotels, Restaurants & Leisure—1.2%
Brinker International, Inc.²		363,000		6,730,020
Wyndham Worldwide Corp.²		245,000		7,043,750

				13,773,770

Household Durables—0.5%
MDC Holdings, Inc.²		220,000		5,665,000
Leisure Equipment & Products—0.2%
Mattel, Inc.		100,000		2,333,000
Media—2.8%
Cinemark Holdings, Inc.²		500,000		8,775,000
Comcast Corp., Cl. A Special, Non-Vtg.		560,000		10,824,800
Time Warner Cable, Inc.²		222,500		12,876,075

				32,475,875

Specialty Retail—2.0%
Foot Locker, Inc.		890,000		14,177,700
Lowe’s Cos., Inc.		440,000		9,385,200

				23,562,900

Consumer Staples—8.5%
Food & Staples Retailing—3.1%
Kroger Co. (The)		700,000		15,400,000
Wal-Mart Stores, Inc.		25,000		1,354,250
Walgreen Co.²		550,000		18,634,000

				35,388,250

Food Products—2.4%
Archer-Daniels-Midland Co.²		425,000		14,161,000
Kellogg Co.		54,000		2,714,040
Kraft Foods, Inc., Cl. A²		330,000		10,649,100

				27,524,140

Household Products—0.2%
Procter & Gamble Co. (The)²		30,250		1,922,993
Tobacco—2.8%
Lorillard, Inc.²		187,500		16,001,250
Philip Morris International, Inc.²		290,000		16,965,000

				32,966,250

Energy—11.2%
Energy Equipment & Services—2.4%
Ensco plc, Sponsored ADR²		225,000		10,426,500
Halliburton Co.²		322,500		10,274,850
Transocean Ltd.^1,2		107,500		6,811,200

				27,512,550

Oil, Gas & Consumable Fuels—8.8%
Chevron Corp.		300,000		24,782,997
CONSOL Energy, Inc.²		450,000		16,542,000
Exxon Mobil Corp.		350,000		23,264,500
Kinder Morgan Management LLC¹		1		33
Marathon Oil Corp.		412,500		14,672,625
Royal Dutch Shell plc, ADR		320,000		20,777,600
Williams Cos., Inc. (The)		100,000		2,152,000

				102,191,755

Financials—22.6%
Capital Markets—3.1%
Goldman Sachs Group, Inc. (The)		85,000		13,680,750
Morgan Stanley		875,000		21,761,250

				35,442,000

Commercial Banks—2.6%
U.S. Bancorp²		575,000		13,903,500
Wells Fargo & Co.		642,500		16,756,400

				30,659,900

18 | OPPENHEIMER EQUITY INCOME FUND, INC.


	Shares		Value

Diversified Financial Services—6.3%
Bank of America Corp.		825,000	$	9,438,000
JPMorgan Chase & Co.²		1,200,000		45,156,000
KKR Financial Holdings LLC		2,050,000		18,019,500

				72,613,500

Insurance—8.9%
Assurant, Inc.²		250,000		9,885,000
Everest Re Group Ltd.²		350,000		29,498,000
Fidelity National Financial, Inc., Cl. A²		510,800		6,839,612
Gallagher (Arthur J.) & Co.		50,000		1,408,000
MetLife, Inc.²		800,000		32,264,000
Old Republic International Corp.		290,000		3,828,000
XL Group plc²		875,000		18,506,250

				102,228,862

Real Estate Investment Trusts—1.7%
Apollo Commercial Real Estate Finance, Inc.²		700,000		11,403,000
Starwood Property Trust, Inc.		400,000		8,084,000

				19,487,000

Health Care—7.5%
Health Care Equipment & Supplies—0.3%
Covidien plc		82,500		3,289,275
Health Care Providers & Services—0.2%
UnitedHealth Group, Inc.²		68,000		2,451,400
Pharmaceuticals—7.0%
Abbott Laboratories²		237,500		12,188,500
GlaxoSmithKline plc, ADR		60,000		2,342,400
Johnson & Johnson²		75,000		4,775,250
Merck & Co., Inc.²		725,000		26,303,000
Pfizer, Inc.		2,000,000		34,800,000

				80,409,150

Industrials—4.4%
Aerospace & Defense—2.5%
General Dynamics Corp.		230,000		15,667,600
Lockheed Martin Corp.²		180,000		12,832,200

				28,499,800

Commercial Services & Supplies—0.5%
Pitney Bowes, Inc.		53,250		1,168,305
Waste Management, Inc.²		115,500		4,125,660

				5,293,965

Industrial Conglomerates—1.2%
General Electric Co.		100,000		1,602,000
Tyco International Ltd.²		330,000		12,632,400

				14,234,400

Road & Rail—0.1%
Norfolk Southern Corp.		28,000		1,721,720
Trading Companies & Distributors—0.1%
Aircastle Ltd.²		75,000		690,750
Information Technology—6.7%
Communications Equipment—1.2%
QUALCOMM, Inc.		300,000		13,539,000
Electronic Equipment & Instruments—0.8%
Corning, Inc.²		500,000		9,140,000
Semiconductors & Semiconductor Equipment—1.8%
Applied Materials, Inc.		450,000		5,562,000
Intel Corp.²		450,000		9,031,500
Intersil Corp., Cl. A²		475,000		6,217,750

				20,811,250

Software—2.9%
Microsoft Corp.²		1,275,000		33,966,000

19 | OPPENHEIMER EQUITY INCOME FUND, INC.

STATEMENT OF INVESTMENTS Continued


	Shares		Value

Materials—0.6%
Chemicals—0.1%
E.I. du Pont de Nemours & Co.		25,000	$	1,182,000
Metals & Mining—0.5%
Xstrata plc, Unsponsored ADR		1,500,000		5,730,000
Telecommunication Services—5.0%
Diversified Telecommunication Services—4.9%
AT&T, Inc.²		672,500		19,166,250
Consolidated Communications Holdings, Inc.²		657,500		12,176,900
Frontier Communications Corp.		475,000		4,170,500
Qwest Communications International, Inc.²		2,375,000		15,675,000
Windstream Corp.²		455,000		5,760,300

				56,948,950

Wireless Telecommunication Services—0.1%
Vodafone Group plc, Sponsored ADR		43,500		1,196,685
Utilities—4.0%
Electric Utilities—4.0%
Allegheny Energy, Inc.		655,000		15,196,000
Edison International, Inc.		450,000		16,605,000
Entergy Corp.²		153,750		11,458,988
FirstEnergy Corp.		77,500		2,814,800


				46,074,788



Total Common Stocks (Cost $835,446,470)				898,927,078

Preferred Stocks—3.0%
Apache Corp., 6% Cv., Series D, Non-Vtg.¹		52,500		3,055,500
Citigroup, Inc., 7.50% Cv.		130,000		16,060,200
Hartford Financial Services, 7.25% Cv., Series F, Non-Vtg.¹		105,000		2,577,750
Lucent Technologies Capital Trust I, 7.75% Cum. Cv., Non-Vtg.		8,000		7,000,000
Synovus Financial Corp., 8.25% Cv.		285,000		6,198,750


Total Preferred Stocks (Cost $30,490,316)				34,892,200

	Principal
	Amount

Convertible Corporate Bonds and Notes—12.2%
Consumer Discretionary—0.3%
Media—0.3%
Liberty Media Corp., 3.50% Exchangeable Sr. Unsec. Debs., 1/15/31	$	6,622,900		3,626,038
Consumer Staples—1.4%
Food & Staples Retailing—1.4%
Rite Aid Corp., 8.50% Cv. Sr. Unsec. Unsub. Nts., 5/15/15		17,089,000		16,149,105
Financials—4.0%
Insurance—1.4%
CNO Financial Group, Inc., 7% Cv. Sr. Unsec. Unsub. Nts., 12/30/16³		1,853,000		2,341,729
Conseco, Inc.:
7% Cv. Sr. Unsec. Unsub. Nts., 12/30/16³		10,352,000		13,069,400
7% Cv. Sr. Unsec. Unsub. Nts., Series 2, 12/30/16³		542,000		684,953

				16,096,082

Real Estate Management & Development—0.6%
Forest City Enterprises, Inc., 5% Cv. Sr. Unsec. Nts., 10/15/16		5,250,000		6,792,188

20 | OPPENHEIMER EQUITY INCOME FUND, INC.


	Principal
	Amount			Value

Thrifts & Mortgage Finance—2.0%
MGIC Investment Corp., 9% Cv. Jr. Unsec. Sub. Bonds, 4/1/63³	$	12,000,000		$	12,600,000
PMI Group, Inc. (The), 4.50% Cv. Sr. Nts., 4/15/20		12,000,000			10,335,000

					22,935,000

Industrials—5.9%
Airlines—2.4%
AMR Corp., 6.25% Cv. Sr. Unsec. Nts., 10/15/14		18,250,000			20,873,438
Continental Airlines, Inc., 4.50% Cv. Sr. Unsec. Unsub. Nts., 1/15/15		4,250,000			7,363,125

					28,236,563

Electrical Equipment—1.6%
General Cable Corp., 4.50% Cv. Unsec. Sub. Nts., 11/15/29⁴		17,500,000			18,156,250
Industrial Conglomerates—0.9%
Textron, Inc., 4.50% Cv. Sr. Unsec. Nts., 5/1/13		5,750,000			9,969,063
Machinery—1.0%
Navistar International Corp., 3% Cv. Sr. Sub. Nts., 10/15/14		9,500,000			11,459,375
Information Technology—0.6%
Communications Equipment—0.6%
Ciena Corp., 3.75% Cv. Sr. Unsec. Nts., 10/15/18³		6,750,000			6,513,750


Total Convertible Corporate Bonds and Notes (Cost $130,077,950)					139,933,414

	Shares

Structured Securities—2.9%
Barclays Bank plc:
Celanese Corp. Yield Enhanced Equity Linked Debt Securities		240,920			7,967,224
Lear Corp. Yield Enhanced Equity Linked Debt Securities		112,867			10,000,016
Citigroup Funding, Inc., The Mosaic Co. Equity Linked Nts.		5,000,000			5,538,538
Deutsche Bank AG London, Lear Corp. Equity Linked Nts.³		117,700			10,231,661


Total Structured Securities (Cost $31,504,538)					33,737,439

Investment Company—4.6%
Oppenheimer Institutional Money Market Fund, Cl. E, 0.25%^5,6 (Cost $53,169,685)		53,169,685			53,169,685

Total Investments, at Value (Cost $1,080,688,959)		100.6	%		1,160,659,816
Liabilities in Excess of Other Assets		(0.6	)		(6,879,751	)

Net Assets		100.0	%	$	1,153,780,065

21 | OPPENHEIMER EQUITY INCOME FUND, INC.

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments


*		October 29, 2010 represents the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes.

1.		Non-income producing security.

2.		All or a portion of the security position is held in collateralized accounts to cover potential obligations with respect to outstanding written options. See Note 5 of the accompanying Notes.

3.		Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Directors. These securities amount to $45,441,493 or 3.94% of the Fund’s net assets as of October 29, 2010.

4.		Represents the current interest rate for a variable or increasing rate security.

5.		Is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended October 29, 2010, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the period in which the issuer was an affiliate are as follows:

Shares

Gross

Shares

October 31, 2009

Additions

Reductions

October 29, 2010

Oppenheimer Institutional Money Market Fund, Cl. E

12,134,311

402,255,146

361,219,772

53,169,685


	Value		Income

Oppenheimer Institutional Money Market Fund, Cl. E	$	53,169,685	$	76,905


6.		Rate shown is the 7-day yield as of October 29, 2010.

Valuation Inputs

Various data inputs are used in determining the value of each of the Fund’s investments as of the reporting period end. These data inputs are categorized in the following hierarchy under applicable financial accounting standards:

	1)		Level 1—unadjusted quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange)

	2)		Level 2—inputs other than unadjusted quoted prices that are observable for the asset (such as unadjusted quoted prices for similar assets and market corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.)

	3)		Level 3—significant unobservable inputs (including the Manager’s own judgments about assumptions that market participants would use in pricing the asset).

The table below categorizes amounts that are included in the Fund’s Statement of Assets and Liabilities as of October 29, 2010 based on valuation input level:


					Level 3—
	Level 1—		Level 2—		Significant
	Unadjusted		Other Significant		Unobservable
	Quoted Prices		Observable Inputs		Inputs		Value

Assets Table
Investments, at Value:
Common Stocks
Consumer Discretionary	$	85,810,745	$	—	$	—	$	85,810,745
Consumer Staples		97,801,633		—		—		97,801,633
Energy		129,704,305		—		—		129,704,305
Financials		260,431,262		—		—		260,431,262
Health Care		86,149,825		—		—		86,149,825
Industrials		50,440,635		—		—		50,440,635
Information Technology		77,456,250		—		—		77,456,250
Materials		6,912,000		—		—		6,912,000
Telecommunication Services		58,145,635		—		—		58,145,635

22 | OPPENHEIMER EQUITY INCOME FUND, INC.


						Level 3—
	Level 1—			Level 2—		Significant
	Unadjusted			Other Significant		Unobservable
	Quoted Prices			Observable Inputs		Inputs		Value

Assets Table Continued
Utilities	$	46,074,788		$	—	$	—	$	46,074,788
Preferred Stocks		25,314,450			9,577,750		—		34,892,200
Convertible Corporate Bonds and Notes		—			139,933,414		—		139,933,414
Structured Securities		—			33,737,439		—		33,737,439
Investment Company		53,169,685			—		—		53,169,685

Total Assets	$	977,411,213		$	183,248,603	$	—	$	1,160,659,816

Liabilities Table
Other Financial Instruments:
Appreciated options written, at value	$	(1,999,110	)	$	—	$	—	$	(1,999,110	)
Depreciated options written, at value		(4,504,250	)		—		—		(4,504,250	)

Total Liabilities	$	(6,503,360	)	$	—	$	—	$	(6,503,360	)

Currency contracts and forwards, if any, are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract’s value from trade date. Futures, if any, are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. All additional assets and liabilities included in the above table are reported at their market value at measurement date.

The following is a reconciliation of assets in which significant unobservable inputs (level 3) were used in determining fair value:


					Change in			Accretion/
					Unrealized			(Amortization)
	Value as of		Realized		Appreciation/			of Premium/			Net Purchases			Value as of
	October 31, 2009		Gain (Loss)		Depreciation			Discount¹			(Sales)			October 29, 2010

Assets Table
Investments, at Value:
Asset-Backed Securities	$	4,343,990	$	1,184,090	$	(1,031,307	)	$	(38,952	)	$	(4,457,821	)	$	—

Total Assets	$	4,343,990	$	1,184,090	$	(1,031,307	)	$	(38,952	)	$	(4,457,821	)	$	—


1.		Included in net investment income.

See the accompanying Notes for further discussion of the methods used in determining value of the Fund’s investments, and a summary of changes to the valuation methodologies, if any, during the reporting period.

Written Options as of October 29, 2010 are as follows:


													Unrealized
		Number of		Exercise		Expiration		Premiums					Appreciation/
Description	Type	Contracts		Price		Date		Received		Value			(Depreciation)

Abbott Laboratories	Call		50	$	52.50		11/22/10	$	1,699	$	(1,800	)	$	(101	)
Archer-Daniels-Midland Co.	Call		2,250		35.00		11/22/10		109,848		(74,250	)		35,598
Assurant, Inc.	Call		2,500		42.50		11/22/10		197,892		(12,500	)		185,392
AT&T, Inc.	Call		395		29.00		11/22/10		25,274		(9,085	)		16,189
Bank of America Corp.	Put		500		12.00		11/22/10		26,993		(37,500	)		(10,507	)
Bank of America Corp.	Put		500		11.00		12/20/10		32,993		(24,000	)		8,993
Bank of America Corp.	Put		500		12.00		12/20/10		49,992		(48,000	)		1,992
Brinker International, Inc.	Call		3,630		17.50		11/22/10		610,487		(453,750	)		156,737
Ciena Corp.	Put		2,500		15.00		1/24/11		357,290		(435,000	)		(77,710	)
Cinemark Holdings, Inc.	Call		2,000		17.50		11/22/10		115,711		(90,000	)		25,711
CONSOL Energy, Inc.	Call		750		39.00		11/22/10		105,488		(30,000	)		75,488
Corning, Inc.	Call		3,075		20.00		11/22/10		69,214		(49,200	)		20,014
Ensco plc, Sponsored ADR	Call		250		50.00		11/22/10		24,121		(6,250	)		17,871
Entergy Corp.	Call		200		80.00		11/22/10		20,897		(1,200	)		19,697
Entergy Corp.	Call		100		75.00		11/22/10		7,899		(7,000	)		899
Fidelity National Financial, Inc., Cl.A	Call		1,375		15.00		11/22/10		53,633		—			53,633

23 | OPPENHEIMER EQUITY INCOME FUND, INC.

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Written Options: Continued


													Unrealized
		Number of		Exercise		Expiration		Premiums					Appreciation/
Description	Type	Contracts		Price		Date		Received		Value			(Depreciation)

Genworth Financial, Inc., Cl.A	Put		1,000	$	14.00		1/24/11	$	186,983	$	(282,000	)	$	(95,017	)
Genworth Financial, Inc., Cl.A	Put		3,250		17.00		12/20/10		997,687		(1,355,250	)		(357,563	)
Genworth Financial, Inc., Cl.A	Put		2,175		16.00		12/20/10		563,285		(1,185,375	)		(622,090	)
Genworth Financial, Inc., Cl.A	Put		2,000		12.00		11/22/10		113,076		(192,000	)		(78,924	)
Genworth Financial, Inc., Cl.A	Put		1,500		13.00		11/22/10		121,193		(267,000	)		(145,807	)
Genworth Financial, Inc., Cl.A	Put		1,500		11.00		12/20/10		115,918		(85,500	)		30,418
Halliburton Co.	Call		1,500		36.00		12/20/10		155,932		(63,000	)		92,932
Halliburton Co.	Call		150		34.00		11/22/10		11,801		(7,500	)		4,301
Halliburton Co.	Put		500		30.00		11/22/10		65,767		(35,000	)		30,767
Intel Corp.	Call		250		20.00		11/22/10		3,247		(12,000	)		(8,753	)
Johnson & Johnson	Call		250		65.00		11/22/10		9,996		(7,750	)		2,246
JPMorgan Chase & Co.	Call		250		43.00		11/22/10		7,496		(500	)		6,996
JPMorgan Chase & Co.	Put		500		36.00		12/20/10		59,492		(45,500	)		13,992
Kellogg Co.	Put		1,750		50.00		11/22/10		195,113		(157,500	)		37,613
Kraft Foods, Inc., Cl.A	Call		550		32.00		11/22/10		27,892		(38,500	)		(10,608	)
Linear Technology Corp.	Put		1,000		29.00		11/22/10		73,985		(5,000	)		68,985
Lockheed Martin Corp.	Call		1,000		75.00		11/22/10		26,266		(15,000	)		11,266
Lorillard, Inc.	Call		1,000		85.00		11/22/10		80,103		(166,000	)		(85,897	)
Lorillard, Inc.	Call		375		85.00		12/20/10		51,313		(72,750	)		(21,437	)
Merck & Co., Inc.	Call		250		38.00		11/22/10		25,134		(4,250	)		20,884
Merck & Co., Inc.	Put		1,000		35.00		11/22/10		54,986		(27,000	)		27,986
MetLife, Inc.	Call		250		42.00		11/22/10		12,496		(9,500	)		2,996
MetLife, Inc.	Put		500		39.00		12/20/10		70,287		(75,000	)		(4,713	)
MetLife, Inc.	Put		500		40.00		12/20/10		114,241		(99,000	)		15,241
Microsoft Corp.	Call		1,000		26.00		11/22/10		44,011		(97,000	)		(52,989	)
Microsoft Corp.	Put		2,000		25.00		11/22/10		154,470		(28,000	)		126,470
Morgan Stanley	Put		1,250		25.00		11/22/10		113,566		(90,000	)		23,566
Morgan Stanley	Put		500		26.00		11/22/10		51,752		(69,000	)		(17,248	)
Philip Morris International, Inc.	Call		250		60.00		11/22/10		6,497		(9,250	)		(2,753	)
PMI Group, Inc. (The)	Put		1,000		4.00		11/22/10		39,986		(80,000	)		(40,014	)
Procter & Gamble Co. (The)	Call		50		62.50		11/22/10		4,165		(7,650	)		(3,485	)
Time Warner Cable, Inc.	Call		50		55.00		11/22/10		14,599		(17,500	)		(2,901	)
Transocean Ltd.	Call		1,075		65.00		11/22/10		208,621		(197,800	)		10,821
Tyco International Ltd.	Call		100		40.00		11/22/10		5,449		(3,300	)		2,149
Walgreen Co.	Call		1,950		36.00		11/22/10		87,472		(19,500	)		67,972
Waste Management, Inc.	Call		950		35.00		11/22/10		168,134		(76,000	)		92,134
Waste Management, Inc.	Call		205		36.00		11/22/10		20,692		(7,175	)		13,517
Windstream Corp.	Call		3,575		12.50		11/22/10		93,616		(103,675	)		(10,059	)
Wyndham Worldwide Corp.	Call		2,450		30.00		11/22/10		134,276		(110,250	)		24,026
XL Group plc	Call		4,300		24.00		11/22/10		164,999		(38,700	)		126,299
XL Group plc	Call		950		22.00		11/22/10		96,906		(44,650	)		52,256
XL Group plc	Call		750		23.00		11/22/10		44,736		(16,500	)		28,236

								$	6,407,067	$	(6,503,360	)	$	(96,293	)

See accompanying Notes to Financial Statements.

24 | OPPENHEIMER EQUITY INCOME FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES October 29, 2010¹


Assets
Investments, at value—see accompanying statement of investments:
Unaffiliated companies (cost $1,027,519,274)	$	1,107,490,131
Affiliated companies (cost $53,169,685)		53,169,685

		1,160,659,816
Cash		817,696
Receivables and other assets:
Shares of capital stock sold		10,780,497
Investments sold		9,164,610
Interest and dividends		2,996,802
Other		94,985

Total assets		1,184,514,406

Liabilities
Appreciated options written, at value (premiums received $3,551,393)		1,999,110
Depreciated options written, at value (premiums received $2,855,674)		4,504,250
Payables and other liabilities:
Investments purchased		22,101,261
Shares of capital stock redeemed		1,446,086
Distribution and service plan fees		236,567
Transfer and shareholder servicing agent fees		170,369
Shareholder communications		102,962
Directors’ compensation		96,595
Other		77,141

Total liabilities		30,734,341

Net Assets	$	1,153,780,065


Composition of Net Assets
Par value of shares of capital stock	$	5,186
Additional paid-in capital		1,113,920,393
Accumulated net investment income		3,019,862
Accumulated net realized loss on investments		(43,039,940	)
Net unrealized appreciation on investments		79,874,564

Net Assets	$	1,153,780,065


1.		October 29, 2010 represents the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes.

25 | OPPENHEIMER EQUITY INCOME FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES Continued


Net Asset Value Per Share

Class A Shares:
Net asset value and redemption price per share (based on net assets of $918,455,982 and 40,152,497 shares of capital stock outstanding)	$	22.87
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price)	$	24.27

Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $65,791,253 and 3,343,882 shares of capital stock outstanding)	$	19.68

Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $128,951,048 and 6,540,019 shares of capital stock outstanding)	$	19.72

Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $40,581,782 and 1,827,385 shares of capital stock outstanding)	$	22.21

See accompanying Notes to Financial Statements.

26 | OPPENHEIMER EQUITY INCOME FUND, INC.

STATEMENT OF OPERATIONS For the Year Ended October 29, 2010¹


Investment Income
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $139,284)	$	18,489,285
Affiliated companies		76,905
Interest		4,342,979
Other income		11,479

Total investment income		22,920,648

Expenses
Management fees		5,135,176
Distribution and service plan fees:
Class A		1,467,803
Class B		482,339
Class C		806,602
Class N		127,799
Transfer and shareholder servicing agent fees:
Class A		1,218,920
Class B		221,975
Class C		234,742
Class N		149,583
Shareholder communications:
Class A		180,936
Class B		34,318
Class C		32,472
Class N		7,359
Directors’ compensation		11,343
Custodian fees and expenses		4,546
Other		247,631

Total expenses		10,363,544
Less waivers and reimbursements of expenses		(156,931	)

Net expenses		10,206,613

Net Investment Income		12,714,035


1.		October 29, 2010 represents the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes.

27 | OPPENHEIMER EQUITY INCOME FUND, INC.

STATEMENTS OF CHANGES IN NET ASSETS


Year Ended October 31,	2010¹			2009

Operations
Net investment income	$	12,714,035		$	12,094,951
Net realized gain (loss)		51,372,235			(49,167,130	)
Net change in unrealized appreciation/depreciation		64,349,144			113,056,942


Net increase in net assets resulting from operations		128,435,414			75,984,763

Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A		(10,709,289	)		(9,925,079	)
Class B		(654,555	)		(1,088,141	)
Class C		(1,141,112	)		(1,415,568	)
Class N		(386,028	)		(413,968	)


		(12,890,984	)		(12,842,756	)

Capital Stock Transactions
Net increase in net assets resulting from capital stock transactions:
Class A		504,250,084			73,583,958
Class B		26,530,986			2,104,858
Class C		71,440,051			8,506,149
Class N		23,518,699			1,024,848


		625,739,820			85,219,813

Net Assets
Total increase		741,284,250			148,361,820
Beginning of period		412,495,815			264,133,995


End of period (including accumulated net investment income of $3,019,862 and $2,742,840, respectively)	$	1,153,780,065		$	412,495,815


1.		October 29, 2010 represents the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes.

See accompanying Notes to Financial Statements.

29 | OPPENHEIMER EQUITY INCOME FUND, INC.

FINANCIAL HIGHLIGHTS


Class A Year Ended October 31,	2010¹			2009			2008			2007			2006

Per Share Operating Data
Net asset value, beginning of period	$	19.23		$	15.65		$	29.86		$	29.15		$	27.34

Income (loss) from investment operations:
Net investment income²		.40			.70			.63			.20			.09
Net realized and unrealized gain (loss)		3.65			3.62			(10.24	)		2.67			4.61

Total from investment operations		4.05			4.32			(9.61	)		2.87			4.70

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.41	)		(.74	)		(.62	)		(.03	)		—
Distributions from net realized gain		—			—			(3.98	)		(2.13	)		(2.89	)

Total dividends and/or distributions to shareholders		(.41	)		(.74	)		(4.60	)		(2.16	)		(2.89	)


Net asset value, end of period	$	22.87		$	19.23		$	15.65		$	29.86		$	29.15


Total Return, at Net Asset Value³		21.25	%		28.82	%		(37.27	)%		10.43	%		18.43	%

Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	918,456		$	323,033		$	199,650		$	362,740		$	382,512

Average net assets (in thousands)	$	593,104		$	225,561		$	292,638		$	370,916		$	369,074

Ratios to average net assets:⁴
Net investment income		1.86	%		4.29	%		2.85	%		0.68	%		0.32	%
Total expenses		1.21	%⁵		1.36	%⁵		1.25	%⁵		1.28	%⁵		1.29	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.21	%		1.36	%		1.25	%		1.28	%		1.28	%

Portfolio turnover rate		60	%		105	%		78	%		124	%		56	%


1.		October 29, 2010 represents the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes to Financial Statements.

2.		Per share amounts calculated based on the average shares outstanding during the period.

3.		Assumes an initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

4.		Annualized for periods less than one full year.

5.		Total expenses including indirect expenses from affiliated fund were as follows:


Year Ended October 29, 2010	1.21	%
Year Ended October 31, 2009	1.36	%
Year Ended October 31, 2008	1.25	%
Year Ended October 31, 2007	1.28	%

See accompanying Notes to Financial Statements.

30 | OPPENHEIMER EQUITY INCOME FUND, INC.


Class B Year Ended October 31,	2010¹			2009			2008			2007			2006

Per Share Operating Data
Net asset value, beginning of period	$	16.61		$	13.63		$	26.48		$	26.27		$	25.11

Income (loss) from investment operations:
Net investment income (loss)²		.18			.50			.38			(.05	)		(.14	)
Net realized and unrealized gain (loss)		3.15			3.11			(8.95	)		2.39			4.19

Total from investment operations		3.33			3.61			(8.57	)		2.34			4.05

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.26	)		(.63	)		(.30	)		—			—
Distributions from net realized gain		—			—			(3.98	)		(2.13	)		(2.89	)

Total dividends and/or distributions to shareholders		(.26	)		(.63	)		(4.28	)		(2.13	)		(2.89	)


Net asset value, end of period	$	19.68		$	16.61		$	13.63		$	26.48		$	26.27


Total Return, at Net Asset Value³		20.22	%		27.69	%		(37.81	)%		9.46	%		17.37	%

Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	65,791		$	31,723		$	24,862		$	60,106		$	76,583

Average net assets (in thousands)	$	48,363		$	24,503		$	42,007		$	72,568		$	76,606

Ratios to average net assets:⁴
Net investment income (loss)		0.96	%		3.57	%		1.94	%		(0.21	)%		(0.58	)%
Total expenses		2.25	%⁵		2.48	%⁵		2.14	%⁵		2.16	%⁵		2.19	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		2.13	%		2.22	%		2.14	%		2.16	%		2.19	%

Portfolio turnover rate		60	%		105	%		78	%		124	%		56	%


1.		October 29, 2010 represents the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes to Financial Statements.

2.		Per share amounts calculated based on the average shares outstanding during the period.

3.		Assumes an initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

4.		Annualized for periods less than one full year.

5.		Total expenses including indirect expenses from affiliated fund were as follows:


Year Ended October 29, 2010	2.25	%
Year Ended October 31, 2009	2.48	%
Year Ended October 31, 2008	2.14	%
Year Ended October 31, 2007	2.16	%

See accompanying Notes to Financial Statements.

31 | OPPENHEIMER EQUITY INCOME FUND, INC.

FINANCIAL HIGHLIGHTS Continued


Class C Year Ended October 31,	2010¹			2009			2008			2007			2006

Per Share Operating Data
Net asset value, beginning of period	$	16.65		$	13.66		$	26.54		$	26.31		$	25.14

Income (loss) from investment operations:
Net investment income (loss)²		.19			.50			.39			(.04	)		(.14	)
Net realized and unrealized gain (loss)		3.16			3.13			(8.99	)		2.40			4.20

Total from investment operations		3.35			3.63			(8.60	)		2.36			4.06

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.28	)		(.64	)		(.30	)		—			—
Distributions from net realized gain		—			—			(3.98	)		(2.13	)		(2.89	)

Total dividends and/or distributions to shareholders		(.28	)		(.64	)		(4.28	)		(2.13	)		(2.89	)


Net asset value, end of period	$	19.72		$	16.65		$	13.66		$	26.54		$	26.31


Total Return, at Net Asset Value³		20.30	%		27.77	%		(37.83	)%		9.53	%		17.39	%

Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	128,951		$	44,774		$	29,599		$	56,130		$	54,971

Average net assets (in thousands)	$	80,931		$	32,357		$	43,817		$	56,496		$	51,822

Ratios to average net assets:⁴
Net investment income (loss)		1.02	%		3.53	%		1.98	%		(0.17	)%		(0.57	)%
Total expenses		2.05	%⁵		2.28	%⁵		2.12	%⁵		2.13	%⁵		2.17	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		2.05	%		2.17	%		2.11	%		2.13	%		2.17	%

Portfolio turnover rate		60	%		105	%		78	%		124	%		56	%


1.		October 29, 2010 represents the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes to Financial Statements.

2.		Per share amounts calculated based on the average shares outstanding during the period.

3.		Assumes an initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

4.		Annualized for periods less than one full year.

5.		Total expenses including indirect expenses from affiliated fund were as follows:


Year Ended October 29, 2010	2.05	%
Year Ended October 31, 2009	2.28	%
Year Ended October 31, 2008	2.12	%
Year Ended October 31, 2007	2.13	%

See accompanying Notes to Financial Statements.

32 | OPPENHEIMER EQUITY INCOME FUND, INC.


Class N Year Ended October 31,	2010¹			2009			2008			2007			2006

Per Share Operating Data
Net asset value, beginning of period	$	18.70		$	15.24		$	29.09		$	28.52		$	26.91

Income (loss) from investment operations:
Net investment income (loss)²		.30			.64			.54			.08			(.03	)
Net realized and unrealized gain (loss)		3.55			3.51			(9.97	)		2.62			4.53

Total from investment operations		3.85			4.15			(9.43	)		2.70			4.50

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.34	)		(.69	)		(.44	)		—			—
Distributions from net realized gain		—			—			(3.98	)		(2.13	)		(2.89	)

Total dividends and/or distributions to shareholders		(.34	)		(.69	)		(4.42	)		(2.13	)		(2.89	)


Net asset value, end of period	$	22.21		$	18.70		$	15.24		$	29.09		$	28.52


Total Return, at Net Asset Value³		20.77	%		28.40	%		(37.48	)%		10.02	%		17.93	%

Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	40,582		$	12,966		$	10,023		$	19,340		$	19,013

Average net assets (in thousands)	$	25,675		$	9,706		$	15,221		$	19,387		$	17,985

Ratios to average net assets:⁴
Net investment income (loss)		1.48	%		4.08	%		2.47	%		0.29	%		(0.12	)%
Total expenses		1.83	%⁵		2.36	%⁵		1.87	%⁵		1.91	%⁵		1.90	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.58	%		1.67	%		1.63	%		1.67	%		1.72	%

Portfolio turnover rate		60	%		105	%		78	%		124	%		56	%


1.		October 29, 2010 represents the last business day of the Fund’s fiscal year. See Note 1 of the accompanying Notes to Financial Statements.

2.		Per share amounts calculated based on the average shares outstanding during the period.

3.		Assumes an initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

4.		Annualized for periods less than one full year.

5.		Total expenses including indirect expenses from affiliated fund were as follows:


Year Ended October 29, 2010	1.83	%
Year Ended October 31, 2009	2.36	%
Year Ended October 31, 2008	1.87	%
Year Ended October 31, 2007	1.91	%

See accompanying Notes to Financial Statements.

33 | OPPENHEIMER EQUITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS

1. Significant Accounting Policies

Oppenheimer Equity Income Fund, Inc. (the “Fund”), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund’s investment objective is to seek total return. The Fund’s investment adviser is OppenheimerFunds, Inc. (the “Manager”).

The Fund offers Class A, Class B, Class C and Class N shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (“CDSC”). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. Class B shares will automatically convert to Class A shares 72 months after the date of purchase.

The following is a summary of significant accounting policies consistently followed by the Fund.

Fiscal Year End. Since October 29, 2010 represents the last day during the Fund’s fiscal year on which the New York Stock Exchange was open for trading, the Fund’s financial statements have been presented through that date to maintain consistency with the Fund’s net asset value calculations used for shareholder transactions.

Securities Valuation. The Fund calculates the net asset value of its shares as of the close of the New York Stock Exchange (the “Exchange”), normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading.

Each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Unadjusted quoted prices in active markets for identical securities are classified as “Level 1,” inputs other than unadjusted quoted prices for an asset that are observable are classified as “Level 2” and significant unobservable inputs, including the Manager’s judgment about the assumptions that a market participant would use in pricing an asset or liability, are classified as “Level 3.” The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. A table summarizing the Fund’s investments under these levels of classification is included following the Statement of Investments.

Securities are valued using unadjusted quoted market prices, when available, as supplied primarily by portfolio pricing services approved by the Board of Directors or dealers.

Securities traded on a registered U.S. securities exchange are valued based on the last sale price of the security reported on the principal exchange on which it is traded, prior to the time when the Fund’s assets are valued. Securities whose principal exchange is NASDAQ^® are valued based on the official closing prices reported by NASDAQ prior to

34 | OPPENHEIMER EQUITY INCOME FUND, INC.

the time when the Fund’s assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the current day’s closing “bid” and “asked” prices, and if not, at the current day’s closing bid price. A foreign security traded on a foreign exchange is valued based on the last sale price on the principal exchange on which the security is traded, as identified by the portfolio pricing service used by the Manager, prior to the time when the Fund’s assets are valued. In the absence of a sale, the security is valued at the most recent official closing price on the principal exchange on which it is traded.

Shares of a registered investment company that are not traded on an exchange are valued at that investment company’s net asset value per share.

U.S. domestic and international debt instruments (including corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and “money market-type” debt instruments with a remaining maturity in excess of sixty days are valued at the mean between the “bid” and “asked” prices utilizing price quotations obtained from independent pricing services or broker-dealers. Such prices are typically determined based upon information obtained from market participants including reported trade data, broker-dealer price quotations and inputs such as benchmark yields and issuer spreads from identical or similar securities.

“Money market-type” debt instruments with remaining maturities of sixty days or less are valued at cost adjusted by the amortization of discount or premium to maturity (amortized cost), which approximates market value.

In the absence of a readily available unadjusted quoted market price, including for securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund’s assets are valued but after the close of the securities’ respective exchanges, the Manager, acting through its internal valuation committee, in good faith determines the fair valuation of that asset using consistently applied procedures under the supervision of the Board of Directors (which reviews those fair valuations by the Manager). Those procedures include certain standardized methodologies to fair value securities. Such methodologies include, but are not limited to, pricing securities initially at cost and subsequently adjusting the value based on: changes in company specific fundamentals, changes in an appropriate securities index, or changes in the value of similar securities which may be adjusted for any discounts related to resale restrictions. When possible, such methodologies use observable market inputs such as unadjusted quoted prices of similar securities, observable interest rates, currency rates and yield curves. The methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those securities.

There have been no significant changes to the fair valuation methodologies of the Fund during the period.

Structured Securities. The Fund invests in structured securities whose market values, interest rates and/or redemption prices are linked to the performance of underlying foreign currencies, interest rate spreads, stock market indices, prices of individual securities, commodities or other financial instruments or the occurrence of other specific events.

35 | OPPENHEIMER EQUITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS Continued

1. Significant Accounting Policies Continued

The structured securities are often leveraged, increasing the volatility of each note’s market value relative to the change in the underlying linked financial element or event. Fluctuations in value of these securities are recorded as unrealized gains and losses in the accompanying Statement of Operations. The Fund records a realized gain or loss when a structured security is sold or matures.

Investment in Oppenheimer Institutional Money Market Fund. The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund (“IMMF”) to seek current income while preserving liquidity. IMMF is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act of 1940, as amended. The Manager is also the investment adviser of IMMF. When applicable, the Fund’s investment in IMMF is included in the Statement of Investments. Shares of IMMF are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of IMMF’s Class E expenses, including its management fee. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund’s investment in IMMF.

Foreign Currency Translation. The Fund’s accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars as of the close of the Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading. Foreign exchange rates may be valued primarily using a reliable bank, dealer or service authorized by the Board of Directors.

Reported net realized gains and losses from foreign currency transactions arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, exchange rate fluctuations between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized appreciation and depreciation on the translation of assets and liabilities denominated in foreign currencies arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates.

The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund’s Statement of Operations.

Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class.

36 | OPPENHEIMER EQUITY INCOME FUND, INC.

Operating expenses directly attributable to a specific class are charged against the operations of that class.

Federal Taxes. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders. Therefore, no federal income or excise tax provision is required. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund’s tax return filings generally remain open for the three preceding fiscal reporting period ends.

The tax components of capital shown in the following table represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes.

Net Unrealized

Appreciation

Based on Cost of

Securities and

Undistributed

Accumulated

Other Investments

Net Investment

Long-Term

Loss

for Federal Income

Income

Gain

Carryforward^1,2,3,4

Tax Purposes

6,559,523

—

39,674,374

70,827,367


1.		As of October 29, 2010, the Fund had $37,436,900 of net capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. As of October 29, 2010, details of the capital loss carryforward were as follows:


Expiring

2017	$	37,436,900


2.		The Fund had $2,237,474 of straddle losses which were deferred.

3.		During the fiscal year ended October 29, 2010, the Fund utilized $53,606,129 of capital loss carryforward to offset capital gains realized in that fiscal year.

4.		During the fiscal year ended October 31, 2009, the Fund did not utilize any capital loss carryforward.

Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund.

Accordingly, the following amounts have been reclassified for October 29, 2010. Net assets of the Fund were unaffected by the reclassifications.

Increase

to Accumulated

Reduction to

Net Investment

Net Realized Loss

Paid-in Capital

Income

on Investments

309,665

453,971

144,306

37 | OPPENHEIMER EQUITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS Continued

1. Significant Accounting Policies Continued

The tax character of distributions paid during the years ended October 29, 2010 and October 31, 2009 was as follows:


	Year Ended		Year Ended
	October 29, 2010		October 31, 2009

Distributions paid from:
Ordinary income	$	12,890,984	$	12,842,756

The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of October 29, 2010 are noted in the following table. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss.


Federal tax cost of securities	$	1,087,498,682
Federal tax cost of other investments		(4,169,593	)

Total federal tax cost	$	1,083,329,089

Gross unrealized appreciation	$	89,414,939
Gross unrealized depreciation		(18,587,572	)

Net unrealized appreciation	$	70,827,367

Directors’ Compensation. The Fund has adopted an unfunded retirement plan (the “Plan”) for the Fund’s independent directors. Benefits are based on years of service and fees paid to each director during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the “Freeze Date”) and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active independent directors as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan. During the year ended October 29, 2010, the Fund’s projected benefit obligations, payments to retired directors and accumulated liability were as follows:


Projected Benefit Obligations Increased	$	2,065
Payments Made to Retired Directors		7,771
Accumulated Liability as of October 29, 2010		75,676

The Board of Directors has adopted a compensation deferral plan for independent directors that enables directors to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Director under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Director. The Fund purchases shares of the funds selected for deferral by the Director in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of “Other” within the asset section of the Statement of Assets and Liabilities. Deferral of directors’ fees under

38 | OPPENHEIMER EQUITY INCOME FUND, INC.

the plan will not affect the net assets of the Fund, and will not materially affect the Fund’s assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance with the compensation deferral plan.

Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as deemed necessary by the Manager.

Investment Income. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income is recognized on an accrual basis. Discount and premium, which are included in interest income on the Statement of Operations, are amortized or accreted daily.

Custodian Fees. “Custodian fees and expenses” in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts, to the extent they are not offset by positive cash balances maintained by the Fund, at a rate equal to the Federal Funds Rate plus 0.50%. The “Reduction to custodian expenses” line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings.

Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost.

Indemnifications. The Fund’s organizational documents provide current and former directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

39 | OPPENHEIMER EQUITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS Continued

2. Shares of Capital Stock

The Fund has authorized one billion shares of $0.0001 par value capital stock in aggregate to be apportioned among each class of shares. Transactions in shares of capital stock were as follows:


	Year Ended October 29, 2010						Year Ended October 31, 2009
	Shares			Amount			Shares			Amount

Class A
Sold		29,741,863		$	639,295,438			6,502,733		$	112,122,260
Dividends and/or distributions reinvested		446,674			9,411,874			579,157			9,063,692
Redeemed		(6,836,264	)		(144,457,228	)		(3,040,428	)		(47,601,994	)

Net increase		23,352,273		$	504,250,084			4,041,462		$	73,583,958


Class B
Sold		2,220,371		$	40,890,157			760,244		$	11,305,862
Dividends and/or distributions reinvested		34,359			622,248			77,818			1,043,726
Redeemed		(820,555	)		(14,981,419	)		(752,977	)		(10,244,730	)

Net increase		1,434,175		$	26,530,986			85,085		$	2,104,858


Class C
Sold		4,740,041		$	87,718,337			1,213,208		$	17,952,152
Dividends and/or distributions reinvested		55,448			1,008,558			96,442			1,302,715
Redeemed		(944,388	)		(17,286,844	)		(787,683	)		(10,748,718	)

Net increase		3,851,101		$	71,440,051			521,967		$	8,506,149


Class N
Sold		1,540,368		$	31,929,751			274,520		$	4,569,780
Dividends and/or distributions reinvested		16,809			344,628			25,623			386,413
Redeemed		(423,372	)		(8,755,680	)		(264,382	)		(3,931,345	)

Net increase		1,133,805		$	23,518,699			35,761		$	1,024,848

3. Purchases and Sales of Securities

The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IMMF, for the year ended October 29, 2010, were as follows:


	Purchases		Sales

Investment securities	$	999,799,433	$	427,621,286

40 | OPPENHEIMER EQUITY INCOME FUND, INC.

4. Fees and Other Transactions with Affiliates

Management Fees. Under the investment advisory agreement, the Fund pays the Manager a management fee based on the daily net assets of the Fund at an annual rate as shown in the following table:


Fee Schedule

Up to $400 million	0.70	%
Next $400 million	0.68
Next $400 million	0.65
Next $400 million	0.60
Next $400 million	0.55
Over $2.0 billion	0.50

Transfer Agent Fees. OppenheimerFunds Services (“OFS”), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended October 29, 2010, the Fund paid $1,614,151 to OFS for services to the Fund.

Distribution and Service Plan (12b-1) Fees. Under its General Distributor’s Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the “Distributor”) acts as the Fund’s principal underwriter in the continuous public offering of the Fund’s classes of shares.

Distribution and Service Plan for Class A Shares. The Fund has adopted a Distribution and Service Plan (the “Plan”) for Class A shares. Under the Plan, the Fund pays a service fee to the Distributor at annual rate of 0.25% of the daily net assets of Class A shares. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions periodically for providing personal services and maintenance of accounts of their customers that hold Class A shares. Under the Plan, the Fund may also pay an asset-based sales charge to the Distributor. However, the Fund’s Board has currently set that rate at zero. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations.

Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund has adopted Distribution and Service Plans (the “Plans”) for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the Plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares daily net assets and 0.25% on Class N shares daily net assets. The Distributor also receives a service fee of 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Directors and its independent directors must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations. The Distributor determines its uncompensated expenses under the Plans at

41 | OPPENHEIMER EQUITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS Continued

Fees and Other Transactions with Affiliates Continued

calendar quarter ends. The Distributor’s aggregate uncompensated expenses under the Plans at September 30, 2010 were as follows:


Class B	$	367,737
Class C		1,527,289
Class N		485,100

Sales Charges. Front-end sales charges and contingent deferred sales charges (“CDSC”) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.

Class A

Class B

Class C

Class N

Class A

Contingent

Front-End

Deferred

Sales Charges

Retained by

Year Ended

Distributor

October 29, 2010

859,256

5,702

80,693

19,413

1,643

Waivers and Reimbursements of Expenses. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund’s investment in IMMF. During the year ended October 29, 2010, the Manager waived fees and/or reimbursed the Fund $34,334 for IMMF management fees.

OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class.

During the year ended October 29, 2010, OFS waived transfer and shareholder servicing agent fees as follows:


Class B	$	57,389
Class C		1,419
Class N		63,789

Some of these undertakings may be modified or terminated at any time; some may not be modified or terminated until after one year from the date of the current prospectus, as indicated therein.

5. Risk Exposures and the Use of Derivative Instruments

The Fund’s investment objectives not only permit the Fund to purchase investment securities, they also allow the Fund to enter into various types of derivatives contracts, including, but not limited to, futures contracts, forward foreign currency exchange contracts, credit default swaps, interest rate swaps, total return swaps, and purchased and written options. In doing so, the Fund will employ strategies in differing combinations to permit it to increase, decrease, or change the level or types of exposure to market risk factors. Central to those strategies are features inherent to derivatives that make them more attractive for this purpose

42 | OPPENHEIMER EQUITY INCOME FUND, INC.

than equity and debt securities: they require little or no initial cash investment, they can focus exposure on only certain selected risk factors, and they may not require the ultimate receipt or delivery of the underlying security (or securities) to the contract. This may allow the Fund to pursue its objectives more quickly and efficiently than if it were to make direct purchases or sales of securities capable of effecting a similar response to market factors.

Market Risk Factors. In accordance with its investment objectives, the Fund may use derivatives to increase or decrease its exposure to one or more of the following market risk factors:

		Commodity Risk. Commodity risk relates to the change in value of commodities or commodity indexes as they relate to increases or decreases in the commodities market. Commodities are physical assets that have tangible properties. Examples of these types of assets are crude oil, heating oil, metals, livestock, and agricultural products.

		Credit Risk. Credit risk relates to the ability of the issuer to meet interest and principal payments, or both, as they come due. In general, lower-grade, higher-yield bonds are subject to credit risk to a greater extent than lower-yield, higher-quality bonds. Equity Risk. Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market.

Foreign Exchange Rate Risk. Foreign exchange rate risk relates to the change in the U.S. dollar value of a security held that is denominated in a foreign currency. The U.S. dollar value of a foreign currency denominated security will decrease as the dollar appreciates against the currency, while the U.S. dollar value will increase as the dollar depreciates against the currency.

Interest Rate Risk. Interest rate risk refers to the fluctuations in value of fixed-income securities resulting from the inverse relationship between price and yield. For example, an increase in general interest rates will tend to reduce the market value of already issued fixed-income investments, and a decline in general interest rates will tend to increase their value. In addition, debt securities with longer maturities, which tend to have higher yields, are subject to potentially greater fluctuations in value from changes in interest rates than obligations with shorter maturities.

Volatility Risk. Volatility risk refers to the magnitude of the movement, but not the direction of the movement, in a financial instrument’s price over a defined time period. Large increases or decreases in a financial instrument’s price over a relative time period typically indicate greater volatility risk, while small increases or decreases in its price typically indicate lower volatility risk.

The Fund’s actual exposures to these market risk factors during the period are discussed in further detail, by derivative type, below.

Risks of Investing in Derivatives. The Fund’s use of derivatives can result in losses due to unanticipated changes in the market risk factors and the overall market. In instances where the Fund is using derivatives to decrease, or hedge, exposures to market risk factors for securities held by the Fund, there are also risks that those derivatives may not perform as expected resulting in losses for the combined or hedged positions.

43 | OPPENHEIMER EQUITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS Continued

5. Risk Exposures and the Use of Derivative Instruments Continued

Derivatives may have little or no initial cash investment relative to their market value exposure and therefore can produce significant gains or losses in excess of their cost. This use of embedded leverage allows the Fund to increase its market value exposure relative to its net assets and can substantially increase the volatility of the Fund’s performance.

Additional associated risks from investing in derivatives also exist and potentially could have significant effects on the valuation of the derivative and the Fund. Typically, the associated risks are not the risks that the Fund is attempting to increase or decrease exposure to, per its investment objectives, but are the additional risks from investing in derivatives. Examples of these associated risks are liquidity risk, which is the risk that the Fund will not be able to sell the derivative in the open market in a timely manner, and counterparty credit risk, which is the risk that the counterparty will not fulfill its obligation to the Fund. Associated risks can be different for each type of derivative and are discussed by each derivative type in the notes that follow.

Counterparty Credit Risk. Certain derivative positions are subject to counterparty credit risk, which is the risk that the counterparty will not fulfill its obligation to the Fund. The Fund’s derivative counterparties are financial institutions who are subject to market conditions that may weaken their financial position. The Fund intends to enter into financial transactions with counterparties that the Manager believes to be creditworthy at the time of the transaction.

Credit Related Contingent Features. The Fund’s agreements with derivative counterparties have several credit related contingent features that if triggered would allow its derivatives counterparties to close out and demand payment or additional collateral to cover their exposure from the Fund. Credit related contingent features are established between the Fund and its derivatives counterparties to reduce the risk that the Fund will not fulfill its payment obligations to its counterparties. These triggering features include, but are not limited to, a percentage decrease in the Fund’s net assets and or a percentage decrease in the Fund’s Net Asset Value or NAV. The contingent features are established within the Fund’s International Swap and Derivatives Association, Inc. master agreements which govern certain positions in swaps, over-the-counter options and swaptions, and forward currency exchange contracts for each individual counterparty.

Valuations of derivative instruments as of October 29, 2010 are as follows:


	Liability Derivatives
	Statement of
Derivatives	Assets and
Not Accounted for as	Liabilities
Hedging Instruments	Location	Value

Equity contracts	Appreciated options
	written, at value	$	1,999,110

Equity contracts	Depreciated options
	written, at value		4,504,250

Total		$	6,503,360

44 | OPPENHEIMER EQUITY INCOME FUND, INC.

The effect of derivative instruments on the Statement of Operations is as follows:

Amount of Realized Gain or (Loss) Recognized on Derivatives

Investments from

Closing and

unaffiliated companies

expiration of

Derivatives Not Accounted

(including premiums on

option contracts

for as Hedging Instruments

options exercised)*

written

Total

Equity contracts

3,779,634

9,682,705

13,462,339


*		Includes purchased option contracts, purchased swaption contracts and written option contracts exercised, if any.


Amount of Change in Unrealized Gain or (Loss) Recognized on Derivatives
Derivatives Not Accounted	Option contracts
for as Hedging Instruments	written

Equity contracts	$	(521,668	)

Option Activity

The Fund may buy and sell put and call options, or write put and covered call options. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option.

Options are valued daily based upon the last sale price on the principal exchange on which the option is traded. The difference between the premium received or paid, and market value of the option, is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported in the Statement of Operations. When an option is exercised, the cost of the security purchased or the proceeds of the security sale are adjusted by the amount of premium received or paid. Upon the expiration or closing of the option transaction, a gain or loss is reported in the Statement of Operations.

Options written, if any, are reported in a schedule following the Statement of Investments and as a liability in the Statement of Assets and Liabilities. Securities held in collateralized accounts to cover potential obligations with respect to outstanding written options are noted in the Statement of Investments.

The Fund has written put options on individual equity securities and, or, equity indexes to increase exposure to equity risk. A written put option becomes more valuable as the price of the underlying financial instrument appreciates relative to the strike price.

The Fund has written covered call options on individual equity securities and, or, equity indexes to decrease exposure to equity risk. A written covered call option becomes more valuable as the price of the underlying financial instrument depreciates relative to the strike price.

During the year ended October 29, 2010, the Fund had an average market value of $1,253,057 and $3,993,851 on written call options and written put options, respectively.

The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the security decreases and the option is exercised. The risk in buying an option is that the Fund pays a premium

45 | OPPENHEIMER EQUITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS Continued

5. Risk Exposures and the Use of Derivative Instruments Continued

whether or not the option is exercised. The Fund also has the additional risk that there may be an illiquid market where the Fund is unable to close the contract.

Additional associated risks to the Fund include counterparty credit risk for over-the-counter options and liquidity risk.

Written option activity for the year ended October 29, 2010 was as follows:


	Call Options						Put Options
	Number of			Amount of			Number of			Amount of
	Contracts			Premiums			Contracts			Premiums

Options outstanding as of October 31, 2009		36,080		$	3,964,186			16,650		$	1,617,399
Options written		273,082			17,799,894			194,202			27,851,452
Options closed or expired		(232,144	)		(16,074,033	)		(178,352	)		(24,972,197	)
Options exercised		(36,963	)		(2,842,035	)		(6,575	)		(937,599	)

Options outstanding as of October 29, 2010		40,055		$	2,848,012			25,925		$	3,559,055

6. Pending Litigation

Since 2009, a number of lawsuits have been filed in federal courts against the Manager, the Distributor, and certain mutual funds (“Defendant Funds”) advised by the Manager and distributed by the Distributor (but not including the Fund). The lawsuits naming the Defendant Funds also name as defendants certain officers, trustees and former trustees of the respective Defendant Funds. The plaintiffs seek class action status on behalf of purchasers of shares of the respective Defendant Fund during a particular time period. The lawsuits raise claims under federal securities laws alleging that, among other things, the disclosure documents of the respective Defendant Fund contained misrepresentations and omissions, that such Defendant Fund’s investment policies were not followed, and that such Defendant Fund and the other defendants violated federal securities laws and regulations. The plaintiffs seek unspecified damages, equitable relief and an award of attorneys’ fees and litigation expenses.

In 2009, what are claimed to be derivative lawsuits were filed in state court against the Manager and a subsidiary (but not against the Fund), on behalf of the New Mexico Education Plan Trust. These lawsuits allege breach of contract, breach of fiduciary duty, negligence and violation of state securities laws, and seek compensatory damages, equitable relief and an award of attorneys’ fees and litigation expenses.

Other lawsuits have been filed since 2008 in various state and federal courts, against the Manager and certain of its affiliates. Those lawsuits were filed by investors who made investments through an affiliate of the Manager, and relate to the alleged investment fraud perpetrated by Bernard Madoff and his firm (“Madoff”). Those suits allege a variety of claims, including breach of fiduciary duty, fraud, negligent misrepresentation, unjust enrichment, and violation of federal and state securities laws and regulations, among others. They seek unspecified damages, equitable relief and an award of attorneys’ fees and litigation expenses.

46 | OPPENHEIMER EQUITY INCOME FUND, INC.

None of the suits have named the Distributor, any of the Oppenheimer mutual funds or any of their independent Trustees or Directors as defendants. None of the Oppenheimer funds invested in any funds or accounts managed by Madoff.

The Manager believes that the lawsuits described above are without legal merit and is defending against them vigorously. The Defendant Funds’ Boards of Trustees have also engaged counsel to defend the suits brought against those Funds and the present and former Independent Trustees named in those suits. While it is premature to render any opinion as to the outcome in these lawsuits, or whether any costs that the Defendant Funds may bear in defending the suits might not be reimbursed by insurance, the Manager believes that these suits should not impair the ability of the Manager or the Distributor to perform their respective duties to the Fund, and that the outcome of all of the suits together should not have any material effect on the operations of any of the Oppenheimer funds.

47 | OPPENHEIMER EQUITY INCOME FUND, INC.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Oppenheimer Equity Income Fund, Inc.:

We have audited the accompanying statement of assets and liabilities of Oppenheimer Equity Income Fund, Inc., including the statement of investments, as of October 29, 2010, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 29, 2010, by correspondence with the custodian, transfer agent and brokers, or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Equity Income Fund, Inc. as of October 29, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

KPMG llp

Denver, Colorado
December 16, 2010

48 | OPPENHEIMER EQUITY INCOME FUND, INC.

FEDERAL INCOME TAX INFORMATION Unaudited

In early 2010, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2009. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service.

Dividends, if any, paid by the Fund during the fiscal year ended October 29, 2010 which are not designated as capital gain distributions should be multiplied by the maximum amount allowable but not less than 88.58% to arrive at the amount eligible for the corporate dividend-received deduction.

A portion, if any, of the dividends paid by the Fund during the fiscal year ended October 29, 2010 which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. The maximum amount allowable but not less than $16,681,648 of the Fund’s fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2010, shareholders of record received information regarding the percentage of distributions that are eligible for lower individual income tax rates.

Recent tax legislation allows a regulated investment company to designate distributions not designated as capital gain distributions, as either interest related dividends or short-term capital gain dividends, both of which are exempt from the U.S. withholding tax applicable to non U.S. taxpayers. For the fiscal year ended October 29, 2010, the maximum amount allowable but not less than $6,345,232 or 49.22% of the ordinary distributions paid by the Fund qualifies as an interest related dividend.

The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance.

49 | OPPENHEIMER EQUITY INCOME FUND, INC.

BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY AGREEMENT Unaudited

Each year, the Board of Directors (the “Board”), including a majority of the independent Directors, is required to determine whether to renew the Fund’s investment advisory agreement (the “Agreement”). The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Manager provide, such information as may be reasonably necessary to evaluate the terms of the Agreement. The Board employs an independent consultant to prepare a report that provides information, including comparative information that the Board requests for that purpose. In addition, the Board receives information throughout the year regarding Fund services, fees, expenses and performance.

The Manager and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Manager’s services, (ii) the investment performance of the Fund and the Manager, (iii) the fees and expenses of the Fund, including comparative expense information, (iv) the profitability of the Manager and its affiliates, including an analysis of the cost of providing services, (v) whether economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Manager from its relationship with the Fund. The Board was aware that there are alternatives to retaining the Manager.

Outlined below is a summary of the principal information considered by the Board as well as the Board’s conclusions.

Nature, Quality and Extent of Services. The Board considered information about the nature, quality and extent of the services provided to the Fund and information regarding the Manager’s key personnel who provide such services. The Manager’s duties include providing the Fund with the services of the portfolio manager and the Manager’s investment team, who provide research, analysis and other advisory services in regard to the Fund’s investments; securities trading services; oversight of third-party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund’s investment restrictions. The Manager is responsible for providing certain administrative services to the Fund as well. Those services include providing and supervising all administrative and clerical personnel who are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund’s operations; preparing and filing reports required by the Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by Federal and state securities laws for the sale of the Fund’s shares. The Manager also provides the Fund with office space, facilities and equipment.

50 | OPPENHEIMER EQUITY INCOME FUND, INC.

The Board also considered the quality of the services provided and the quality of the Manager’s resources that are available to the Fund. The Board took account of the fact that the Manager has had over fifty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States. The Board evaluated the Manager’s advisory, administrative, accounting, legal and compliance services, and information the Board has received regarding the experience and professional qualifications of the Manager’s key personnel and the size and functions of its staff. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of Michael Levine, the portfolio manager for the Fund, and the Manager’s investment team and analysts. The Board members also considered the totality of their experiences with the Manager as directors or trustees of the Fund and other funds advised by the Manager. The Board considered information regarding the quality of services provided by affiliates of the Manager, which its members have become knowledgeable about in connection with the renewal of the Fund’s service agreements. The Board concluded, in light of the Manager’s experience, reputation, personnel, operations and resources, that the Fund benefits from the services provided under the Agreement.

Investment Performance of the Manager and the Fund. Throughout the year, the Manager provided information on the investment performance of the Fund and the Manager, including comparative performance information. The Board also reviewed information, prepared by the Manager and by the independent consultant, comparing the Fund’s historical performance to relevant market indices and to the performance of other retail front-end load and no-load equity income funds. The Board noted that the Fund’s one-year, three-year, five-year and ten-year performance was better than its peer group median.

Costs of Services by the Manager. The Board reviewed the fees paid to the Manager and the other expenses borne by the Fund. The Board also considered the comparability of the fees charged and the services provided to the Fund to the fees and services for other clients or accounts advised by the Manager. The independent consultant provided comparative data in regard to the fees and expenses of the Fund and other retail front-end load equity income funds with comparable asset levels and distribution features. The Board noted that the Fund’s actual management fees were competitive with its peer group median and average. The Fund’s contractual management fees were competitive with its peer group median and lower than its peer group average. The Fund’s total expenses were higher than its peer group median and average.

51 | OPPENHEIMER EQUITY INCOME FUND, INC.

BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY AGREEMENT Unaudited / Continued

Economies of Scale and Profits Realized by the Manager. The Board considered information regarding the Manager’s costs in serving as the Fund’s investment adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Manager’s profitability from its relationship with the Fund. The Board reviewed whether the Manager may realize economies of scale in managing and supporting the Fund. The Board noted that the Fund currently has management fee breakpoints, which are intended to share with Fund shareholders economies of scale that may exist as the Fund’s assets grow.

Other Benefits to the Manager. In addition to considering the profits realized by the Manager, the Board considered information that was provided regarding the direct and indirect benefits the Manager receives as a result of its relationship with the Fund, including compensation paid to the Manager’s affiliates and research provided to the Manager in connection with permissible brokerage arrangements (soft dollar arrangements). The Board also considered that the Manager must be able to pay and retain experienced professional personnel at competitive rates to provide quality services to the Fund.

Conclusions. These factors were also considered by the independent Directors meeting separately from the full Board, assisted by experienced counsel to the Fund and to the independent Directors. Fund counsel and the independent Directors’ counsel are independent of the Manager within the meaning and intent of the Securities and Exchange Commission Rules.

Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Directors, decided to continue the Agreement through September 30, 2011. In arriving at this decision, the Board did not single out any factor or factors as being more important than others, but considered all of the above information, and considered the terms and conditions of the Agreement, including the management fee, in light of all of the surrounding circumstances.

52 | OPPENHEIMER EQUITY INCOME FUND, INC.

PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited

The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities (“portfolio proxies”) held by the Fund. A description of the Fund’s Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund’s website at www.oppenheimerfunds.com, and (iii) on the SEC’s website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund’s voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC’s website at www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund’s Form N-Q filings are available on the SEC’s website at www.sec.gov. Those forms may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Householding—Delivery of Shareholder Documents

This is to inform you about OppenheimerFunds’ “householding” policy. If more than one member of your household maintains an account in a particular fund, OppenheimerFunds will mail only one copy of the fund’s prospectus (or, if available, the fund’s summary prospectus), annual and semiannual report and privacy policy. The consolidation of these mailings, called householding, benefits your fund through reduced mailing expense, and benefits you by reducing the volume of mail you receive from OppenheimerFunds. Householding does not affect the delivery of your account statements.

Please note that we will continue to household these mailings for as long as you remain an OppenheimerFunds shareholder, unless you request otherwise. If you prefer to receive multiple copies of these materials, please call us at 1.800.CALL-OPP (225-5677). You may also notify us in writing or via email. We will begin sending you individual copies of the prospectus (or, if available, the summary prospectus), reports and privacy policy within 30 days of receiving your request to stop householding.

53 | OPPENHEIMER EQUITY INCOME FUND, INC.

DIRECTORS AND OFFICERS Unaudited


Name, Position(s) Held with the		Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships
Fund, Length of Service, Age		Held; Number of Portfolios in the Fund Complex Currently Overseen

INDEPENDENT DIRECTORS		The address of each Director in the chart below is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Director serves for an indefinite term, or until his or her resignation, retirement, death or removal.

Brian F. Wruble, Chairman of the Board of Directors (since 2007), Director (since 2001) Age: 67		Chairman (since August 2007) and Trustee (since August 1991) of the Board of Trustees of The Jackson Laboratory (non-profit); Director of Special Value Opportunities Fund, LLC (registered investment company) (affiliate of the Manager’s parent company) (since September 2004); Member of Zurich Financial Investment Management Advisory Council (insurance) (since 2004); Treasurer (since 2007) and Trustee of the Institute for Advanced Study (non-profit educational institute) (since May 1992); General Partner of Odyssey Partners, L.P. (hedge fund) (September 1995-December 2007); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Wruble has served on the Boards of certain Oppenheimer funds since April 2001, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

David K. Downes, Director (since 2005) Age: 70		Director of THL Credit Inc. (since June 2009); Independent Chairman GSK Employee Benefit Trust (since April 2006); Trustee of Employee Trusts (since January 2006); Chief Executive Officer and Board Member of Community Capital Management (investment management company) (since January 2004); President of The Community Reinvestment Act Qualified Investment Fund (investment management company) (since 2004); Director of Internet Capital Group (information technology company) (since October 2003); Director of Correctnet (January 2006-2007); Independent Chairman of the Board of Trustees of Quaker Investment Trust (registered investment company) (2004-2007); Chief Operating Officer and Chief Financial Officer of Lincoln National Investment Companies, Inc. (subsidiary of Lincoln National Corporation, a publicly traded company) and Delaware Investments U.S., Inc. (investment management subsidiary of Lincoln National Corporation) (1993-2003); President, Chief Executive Officer and Trustee of Delaware Investment Family of Funds (1993-2003); President and Board Member of Lincoln National Convertible Securities Funds, Inc. and the Lincoln National Income Funds, TDC (1993-2003); Chairman and Chief Executive Officer of Retirement Financial Services, Inc. (registered transfer agent and investment adviser and subsidiary of Delaware Investments U.S., Inc.) (1993- 2003); President and Chief Executive Officer of Delaware Service Company, Inc. (1995-2003); Chief Administrative Officer, Chief Financial Officer, Vice Chairman and Director of Equitable Capital Management Corporation (investment subsidiary of Equitable Life Assurance Society) (1985-1992); Corporate Controller of Merrill Lynch Company (financial services holding company) (1977-1985); held the following positions at the Colonial Penn Group, Inc. (insurance company): Corporate Budget Director (1974-1977), Assistant Treasurer (1972-1974) and Director of Corporate Taxes (1969-1972); held the following positions at Price Waterhouse Company (financial services firm): Tax Manager (1967-1969), Tax Senior (1965-1967) and Staff Accountant (1963-1965); United States Marine Corps (1957-1959). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Downes has served on the Boards of certain Oppenheimer funds since December 2005, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

54 | OPPENHEIMER EQUITY INCOME FUND, INC.


Name, Position(s) Held with the		Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships
Fund, Length of Service, Age		Held; Number of Portfolios in the Fund Complex Currently Overseen

Matthew P. Fink, Director (since 2009) Age: 69		Trustee of the Committee for Economic Development (policy research foundation) (since 2005); Director of ICI Education Foundation (education foundation) (October 1991-August 2006); President of the Investment Company Institute (trade association) (October 1991-June 2004); Director of ICI Mutual Insurance Company (insurance company) (October 1991-June 2004). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Fink has served on the Boards of certain Oppenheimer funds since January 2005, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Phillip A. Griffiths, Director (since 2009) Age: 72		Fellow of the Carnegie Corporation (since 2007); Distinguished Presidential Fellow for International Affairs (since 2002) and Member (since 1979) of the National Academy of Sciences; Council on Foreign Relations (since 2002); Director of GSI Lumonics Inc. (precision technology products company) (since 2001); Senior Advisor of The Andrew W. Mellon Foundation (since 2001); Chair of Science Initiative Group (since 1999); Member of the American Philosophical Society (since 1996); Trustee of Woodward Academy (since 1983); Foreign Associate of Third World Academy of Sciences (since 2002); Director of the Institute for Advanced Study (1991-2004); Director of Bankers Trust New York Corporation (1994-1999); Provost at Duke University (1983-1991). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Griffiths has served on the Boards of certain Oppenheimer funds since June 1999, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Mary F. Miller, Director (since 2009) Age: 67		Trustee of International House (not-for-profit) (since June 2007); Trustee of the American Symphony Orchestra (not-for-profit) (since October 1998); and Senior Vice President and General Auditor of American Express Company (financial services company) (July 1998-February 2003). Oversees 58 portfolios in the OppenheimerFunds complex. Ms. Miller has served on the Boards of certain Oppenheimer funds since August 2004, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Joel W. Motley, Director (since 2009) Age: 58		Managing Director of Public Capital Advisors, LLC (privately-held financial advisor) (since January 2006); Managing Director of Carmona Motley, Inc. (privately-held financial advisor) (since January 2002); Director of Columbia Equity Financial Corp. (privately-held financial advisor) (2002-2007); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial advisor) (January 1998- December 2001); Member of the Finance and Budget Committee of the Council on Foreign Relations, Chairman of the Investment Committee of the Episcopal Church of America, Member of the Investment Committee and Board of Human Rights Watch and Member of the Investment Committee and Board of Historic Hudson Valley. Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Motley has served on the Boards of certain Oppenheimer funds since October 2002, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Mary Ann Tynan, Director (since 2009) Age: 65		Vice Chair of Board of Trustees of Brigham and Women’s/Faulkner Hospitals (non- profit hospital) (since 2000); Chair of Board of Directors of Faulkner Hospital (non- profit hospital) (since 1990); Member of Audit and Compliance Committee of Partners Health Care System (non-profit) (since 2004); Board of Trustees of Middlesex School (educational institution) (since 1994); Board of Directors of Idealswork, Inc. (financial services provider) (since 2003); Partner, Senior Vice President and Director of Regulatory Affairs of Wellington Management Company,

55 | OPPENHEIMER EQUITY INCOME FUND, INC.

DIRECTORS AND OFFICERS Unaudited / Continued


Name, Position(s) Held with the		Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships
Fund, Length of Service, Age		Held; Number of Portfolios in the Fund Complex Currently Overseen

Mary Ann Tynan, Continued		LLP (global investment manager) (1976-2002); Vice President and Corporate Secretary, John Hancock Advisers, Inc. (mutual fund investment adviser) (1970- 1976). Oversees 58 portfolios in the OppenheimerFunds complex. Ms. Tynan has served on the Boards of certain Oppenheimer funds since October 2008, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Joseph M. Wikler, Director (since 2009) Age: 69		Director of C-TASC (bio-statistics services) (since 2007); Director of the following medical device companies: Medintec (since 1992) and Cathco (since 1996); Member of the Investment Committee of the Associated Jewish Charities of Baltimore (since 1994); Director of Lakes Environmental Association (environmental protection organization) (1996-2008); Director of Fortis/Hartford mutual funds (1994-December 2001). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Wikler has served on the Boards of certain Oppenheimer funds since August 2005, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Peter I. Wold, Director (since 2009) Age: 62		Director of Arch Coal, Inc. (since 2010); Director and Chairman of Wyoming Enhanced Oil Recovery Institute Commission (enhanced oil recovery study) (since 2004); President of Wold Oil Properties, Inc. (oil and gas exploration and production company) (since 1994); Vice President of American Talc Company, Inc. (talc mining and milling) (since 1999); Managing Member of Hole-in-the-Wall Ranch (cattle ranching) (since 1979); Director and Chairman of the Denver Branch of the Federal Reserve Bank of Kansas City (1993-1999); and Director of PacifiCorp. (electric utility) (1995-1999). Oversees 58 portfolios in the OppenheimerFunds complex. Mr. Wold has served on the Boards of certain Oppenheimer funds since August 2005, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

INTERESTED DIRECTOR AND OFFICER		The address of Mr. Glavin is Two World Financial Center, 225 Liberty Street, 11th Floor, New York, New York 10281-1008. Mr. Glavin serves as a Director for an indefinite term, or until his resignation, retirement, death or removal and as an Officer for an indefinite term, or until his resignation, retirement, death or removal. Mr. Glavin is an Interested Director due to his positions with OppenheimerFunds, Inc. and its affiliates.

William F. Glavin, Jr., Director, President and Principal Executive Officer (since 2009) Age: 52		Chairman of the Manager (since December 2009); Chief Executive Officer and Director of the Manager (since January 2009); President of the Manager (since May 2009); Director of Oppenheimer Acquisition Corp. (“OAC”) (the Manager’s parent holding company) (since June 2009); Executive Vice President (March 2006-February 2009) and Chief Operating Officer (July 2007-February 2009) of Massachusetts Mutual Life Insurance Company (OAC’s parent company); Director (May 2004-March 2006) and Chief Operating Officer and Chief Compliance Officer (May 2004-January 2005), President (January 2005-March 2006) and Chief Executive Officer (June 2005-March 2006) of Babson Capital Management LLC; Director (March 2005-March 2006), President (May 2003- March 2006) and Chief Compliance Officer (July 2005-March 2006) of Babson Capital Securities, Inc. (a broker-dealer); President (May 2003-March 2006) of Babson Investment Company, Inc.; Director (May 2004-August 2006) of Babson Capital Europe Limited; Director (May 2004-October 2006) of Babson Capital Guernsey Limited; Director (May 2004-March 2006) of Babson Capital Management LLC; Non-Executive Director (March 2005-March 2007) of Baring

56 | OPPENHEIMER EQUITY INCOME FUND, INC.


Name, Position(s) Held with the		Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships
Fund, Length of Service, Age		Held; Number of Portfolios in the Fund Complex Currently Overseen

William F. Glavin, Jr., Continued		Asset Management Limited; Director (February 2005-June 2006) Baring Pension Trustees Limited; Director and Treasurer (December 2003-November 2006) of Charter Oak Capital Management, Inc.; Director (May 2006-September 2006) of C.M. Benefit Insurance Company; Director (May 2008-June 2009) and Executive Vice President (June 2007-July 2009) of C.M. Life Insurance Company; President (March 2006-May 2007) of MassMutual Assignment Company; Director (January 2005-December 2006), Deputy Chairman (March 2005-December 2006) and President (February 2005-March 2005) of MassMutual Holdings (Bermuda) Limited; Director (May 2008-June 2009) and Executive Vice President (June 2007- July 2009) of MML Bay State Life Insurance Company; Chief Executive Officer and President (April 2007-January 2009) of MML Distributors, LLC; and Chairman (March 2006-December 2008) and Chief Executive Officer (May 2007-December 2008) of MML Investors Services, Inc. Oversees 66 portfolios as a Trustee/Director and 94 portfolios as an officer in the OppenheimerFunds complex. Mr. Glavin has served on the Boards of certain Oppenheimer funds since 2009, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

OFFICERS OF THE FUND		The addresses of the Officers in the chart below are as follows: for Messrs. Levine, Keffer and Zack, Two World Financial Center, 225 Liberty Street, New York, New York 10281-1008, for Messrs. Vandehey and Wixted, 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Officer serves for an indefinite term or until his or her resignation, retirement, death or removal.

Michael S. Levine, Vice President and Portfolio Manager (since 2007) Age: 44		Vice President of the Manager (since June 1998). A portfolio manager and officer of 1 portfolio in the OppenheimerFunds complex.

Thomas W. Keffer, Vice President and Chief Business Officer (since 2009) Age: 55		Senior Vice President of the Manager (since March 1997); Director of Investment Brand Management of the Manager (since November 1997); Senior Vice President of OppenheimerFunds Distributor, Inc. (since December 1997). An officer of 94 portfolios in the OppenheimerFunds complex.

Mark S. Vandehey, Vice President and Chief Compliance Officer (since 2004) Age: 60		Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Chief Compliance Officer of OppenheimerFunds Distributor, Inc., Centennial Asset Management and Shareholder Services, Inc. (since March 2004); Vice President of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and Shareholder Services, Inc. (since June 1983). An officer of 94 portfolios in the OppenheimerFunds complex.

Brian W. Wixted, Treasurer and Principal Financial & Accounting Officer (since 1999) Age: 51		Senior Vice President of the Manager (since March 1999); Treasurer of the Manager and the following: HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management, Inc. and Oppenheimer Partnership Holdings, Inc. (March 1999-June 2008), OFI Private Investments, Inc. (March 2000-June 2008), OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of OAC (March 1999-June 2008). An officer of 94 portfolios in the OppenheimerFunds complex.

57 | OPPENHEIMER EQUITY INCOME FUND, INC.

DIRECTORS AND OFFICERS Unaudited / Continued


Name, Position(s) Held with the		Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships
Fund, Length of Service, Age		Held; Number of Portfolios in the Fund Complex Currently Overseen

Robert G. Zack, Secretary (since 2001) Age: 62		Executive Vice President (since January 2004) and General Counsel-Corporate (since March 2002) of the Manager; General Counsel of the Distributor (since December 2001); General Counsel of Centennial Asset Management Corporation (since December 2001); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November 2001). An officer of 94 portfolios in the OppenheimerFunds complex.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Directors and Officers and is available without charge upon request, by calling 1.800.525.7048.

58 | OPPENHEIMER EQUITY INCOME FUND, INC.

PRIVACY POLICY NOTICE

As an Oppenheimer fund shareholder, you are entitled to know how we protect your personal information and how we limit its disclosure.

Information Sources

We obtain nonpublic personal information about our shareholders from the following sources:

•		Applications or other forms

•		When you create a user ID and password for online account access

•		When you enroll in eDocs Direct, our electronic document delivery service

•		Your transactions with us, our affiliates or others

•		A software program on our website, often referred to as a “cookie,” which indicates which parts of our site you’ve visited

•		When you set up challenge questions to reset your password online

If you visit www.oppenheimerfunds.com and do not log on to the secure account information areas, we do not obtain any personal information about you. When you do log on to a secure area, we do obtain your user ID and password to identify you. We also use this information to provide you with products and services you have requested, to inform you about products and services that you may be interested in and assist you in other ways.

We do not collect personal information through our website unless you willingly provide it to us, either directly by email or in those areas of the website that request information. In order to update your personal information (including your mailing address, email address and phone number) you must first log on and visit your user profile.

If you have set your browser to warn you before accepting cookies, you will receive the warning message with each cookie. You can refuse cookies by turning them off in your browser. However, doing so may limit your access to certain sections of our website.

We use cookies to help us improve and manage our website. For example, cookies help us recognize new versus repeat visitors to the site, track the pages visited, and enable some special features on the website. This data helps us provide a better service for our website visitors.

Protection of Information

We do not disclose any non-public personal information (such as names on a customer list) about current or former customers to anyone, except as permitted by law.

Disclosure of Information

We send your financial advisor (as designated by you) copies of confirmations, account statements and other documents reporting activity in your fund accounts. We may also use details about you and your investments to help us, our financial service affiliates, or firms that jointly market their financial products and services with ours, to better serve your investment needs or suggest financial services or educational material that may be of interest to you. If this requires us to provide you with an opportunity to “opt in” or “opt out” of such information sharing with a firm not affiliated with us, you will receive notification on how to do so, before any such sharing takes place.

Right of Refusal

We will not disclose your personal information to unaffiliated third parties (except as permitted by law), unless we first offer you a reasonable opportunity to refuse or “opt out” of such disclosure.

60 | OPPENHEIMER EQUITY INCOME FUND, INC.

Internet Security and Encryption

In general, the email services provided by our website are encrypted and provide a secure and private means of communication with us. To protect your own privacy, confidential and/or personal information should only be communicated via email when you are advised that you are using a secure website.

As a security measure, we do not include personal or account information in non-secure emails, and we advise you not to send such information to us in non-secure emails. Instead, you may take advantage of the secure features of our website to encrypt your email correspondence. To do this, you will need to use a browser that supports Secure Sockets Layer (SSL) protocol.

We do not guarantee or warrant that any part of our website, including files available for download, are free of viruses or other harmful code. It is your responsibility to take appropriate precautions, such as use of an anti-virus software package, to protect your computer hardware and software.

•		All transactions, including redemptions, exchanges and purchases, are secured by SSL and 128-bit encryption. SSL is used to establish a secure connection between your PC and OppenheimerFunds’ server. It transmits information in an encrypted and scrambled format.

•		Encryption is achieved through an electronic scrambling technology that uses a “key” to code and then decode the data. Encryption acts like the cable converter box you may have on your television set. It scrambles data with a secret code so that no one can make sense of it while it is being transmitted. When the data reaches its destination, the same software unscrambles the data.

•		You can exit the secure area by either closing your browser, or for added security, you can use the Log Out button before you close your browser.

Other Security Measures

We maintain physical, electronic and procedural safeguards to protect your personal account information. Our employees and agents have access to that information only so that they may offer you products or provide services, for example, when responding to your account questions.

How You Can Help

You can also do your part to keep your account information private and to prevent unauthorized transactions. If you obtain a user ID and password for your account, do not allow it to be used by anyone else. Also, take special precautions when accessing your account on a computer used by others.

Who We Are

This joint notice describes the privacy policies of the Oppenheimer funds, OppenheimerFunds Distributor, Inc., the trustee of OppenheimerFunds Individual Retirement Accounts (IRAs) and the custodian of the OppenheimerFunds 403(b)(7) tax sheltered custodial accounts. It applies to all Oppenheimer fund accounts you presently have, or may open in the future, using your Social Security number — whether or not you remain a shareholder of our funds. This notice was last updated January 16, 2004. In the event it is updated or changed, we will post an updated notice on our website at www.oppenheimerfunds.com. If you have any questions about these privacy policies, write to us at P.O. Box 5270, Denver, CO 80217-5270, email us by clicking on the Contact Us section of our website at www.oppenheimerfunds.com or call us at 1.800.525.7048.

61 | OPPENHEIMER EQUITY INCOME FUND, INC.

Item 2. Code of Ethics.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.

Item 3. Audit Committee Financial Expert.

The Board of Trustees of the registrant has determined that David Downes, the Board’s Audit Committee Chairman, is an audit committee financial expert and that Mr. Downes is “independent” for purposes of this Item 3.

Item 4. Principal Accountant Fees and Services.

Not applicable to semiannual reports.

(a)

Audit Fees

The principal accountant for the audit of the registrant’s annual financial statements billed $21,700 in fiscal 2010 and $18,500 in fiscal 2009.

(b) Audit-Related Fees

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees in fiscal during the last two fiscal years.

The principal accountant for the audit of the registrant’s annual financial statements billed $321,900 in fiscal 2010 and $269,540 in fiscal 2009 to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.

Such services include: internal control reviews, capital accumulation plan and professional services relating to FIN 45 and FAS 157.

The principal accountant for the audit of the registrant’s annual financial statements billed $17,776 in fiscal 2010 and $7,900 in fiscal 2009.

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees to the registrant during the last two fiscal years to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.

Such services include: tax compliance, tax planning and tax advice. Tax compliance generally involves preparation of original and amended tax returns, claims for a refund and tax payment-planning services. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions and requests for rulings or technical advice from taxing authorities.

(d) All Other Fees

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees during the last two fiscal years.

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees during the last two fiscal years to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.

(e)		(1) During its regularly scheduled periodic meetings, the registrant’s audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant.

		The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting.

		Under applicable laws, pre-approval of non-audit services maybe waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to it principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit.

		(2) 100%

(f)		Not applicable as less than 50%.

(g)		The principal accountant for the audit of the registrant’s annual financial statements billed $339,676 in fiscal 2010 and $277,440 in fiscal 2009 to the registrant and the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934.

(h)

The registrant’s audit committee of the board of trustees has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. No such services were rendered.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Schedule of Investments.

a) Not applicable.

b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

The Fund’s Governance Committee Provisions with Respect to Nominations of Directors/Trustees to the Respective Boards

The Fund’s Governance Committee (the “Committee”) will evaluate potential Board candidates to assess their qualifications. The Committee shall have the authority, upon approval of the Board, to retain an executive search firm to assist in this effort. The Committee may consider recommendations by business and personal contacts of current Board members and by executive search firms which the Committee may engage from time to time and may also consider shareholder recommendations. The Committee may consider

		the advice and recommendation of the Funds’ investment manager and its affiliates in making the selection.

2.		The Committee shall screen candidates for Board membership. The Committee has not established specific qualifications that it believes must be met by a trustee nominee. In evaluating trustee nominees, the Committee considers, among other things, an individual’s background, skills, and experience; whether the individual is an “interested person” as defined in the Investment Company Act of 1940; and whether the individual would be deemed an “audit committee financial expert” within the meaning of applicable SEC rules. The Committee also considers whether the individual’s background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the Board. There are no differences in the manner in which the Committee evaluates nominees for trustees based on whether the nominee is recommended by a shareholder.

3.		The Committee may consider nominations from shareholders for the Board at such times as the Committee meets to consider new nominees for the Board. The Committee shall have the sole discretion to determine the candidates to present to the Board and, in such cases where required, to shareholders. Recommendations for trustee nominees should, at a minimum, be accompanied by the following:

	•		the name, address, and business, educational, and/or other pertinent background of the person being recommended;

	•		a statement concerning whether the person is an “interested person” as defined in the Investment Company Act of 1940;

	•		any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and

	•		the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that person held Fund shares.

		The recommendation also can include any additional information which the person submitting it believes would assist the Committee in evaluating the recommendation.

4.		Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Funds’ investment adviser) would be deemed an “interested person” under the Investment Company Act of 1940. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds’ outside legal counsel may cause a person to be deemed an “interested person.”

5.		Before the Committee decides to nominate an individual as a trustee, Committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit

information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a trustee of a registered investment company.

Item 11. Controls and Procedures.

Based on their evaluation of the registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of 10/29/2010, the registrant’s principal executive officer and principal financial officer found the registrant’s disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant’s management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission.

There have been no changes in the registrant’s internal controls over financial reporting that occurred during the registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)

(1) Exhibit attached hereto.

		(2) Exhibits attached hereto.

		(3) Not applicable.

(b)

Exhibit attached hereto.


Realized and Unrealized Gain (Loss)
Net realized gain on:
Investments from unaffiliated companies (including premiums on options exercised)	$	41,689,530
Closing and expiration of option contracts written		9,682,705

Net realized gain		51,372,235
Net change in unrealized appreciation/depreciation on:
Investments		64,870,812
Option contracts written		(521,668	)

Net change in unrealized appreciation/depreciation		64,349,144

Net Increase in Net Assets Resulting from Operations	$	128,435,414


Manager		OppenheimerFunds, Inc.

Distributor		OppenheimerFunds Distributor, Inc.

Transfer and Shareholder Servicing Agent		OppenheimerFunds Services

Independent Registered Public Accounting Firm		KPMG llp

Legal Counsel		Kramer Levin Naftalis & Frankel LLP


By:		/s/ William F. Glavin, Jr. William F. Glavin, Jr.
		Principal Executive Officer


By:		/s/ William F. Glavin, Jr. William F. Glavin, Jr.
		Principal Executive Officer

Date: 12/07/2010

By:		/s/ Brian W. Wixted Brian W. Wixted
		Principal Financial Officer

Date: 12/07/2010