UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-490
OPPENHEIMER EQUITY FUND, INC.
(Exact name of registrant as specified in charter)
6803 SOUTH TUCSON WAY, CENTENNIAL, COLORADO 80112-3924
(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
TWO WORLD FINANCIAL CENTER, NEW YORK, NEW YORK 10281-1008
(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
Date of fiscal year end: DECEMBER 31
Date of reporting period: 06/30/2007
ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOP TEN COMMON STOCK INDUSTRIES
- --------------------------------------------------------------------------------
Aerospace & Defense 8.2%
- --------------------------------------------------------------------------------
Capital Markets 7.0
- --------------------------------------------------------------------------------
Oil & Gas 6.2
- --------------------------------------------------------------------------------
Communications Equipment 5.3
- --------------------------------------------------------------------------------
Media 5.0
- --------------------------------------------------------------------------------
Software 4.7
- --------------------------------------------------------------------------------
Insurance 4.5
- --------------------------------------------------------------------------------
Food & Staples Retailing 4.2
- --------------------------------------------------------------------------------
Diversified Financial Services 4.0
- --------------------------------------------------------------------------------
Commercial Banks 3.9
Portfolio holdings and allocations are subject to change. Percentages are as of
June 30, 2007, and are based on net assets.
TOP TEN COMMON STOCK HOLDINGS
- --------------------------------------------------------------------------------
Boeing Co. 3.4%
- --------------------------------------------------------------------------------
Costco Wholesale Corp. 3.3
- --------------------------------------------------------------------------------
United Technologies Corp. 3.1
- --------------------------------------------------------------------------------
Liberty Global, Inc., Series C 2.8
- --------------------------------------------------------------------------------
UBS AG 2.5
- --------------------------------------------------------------------------------
Exxon Mobil Corp. 2.4
- --------------------------------------------------------------------------------
Wachovia Corp. 2.4
- --------------------------------------------------------------------------------
Citigroup, Inc. 2.4
- --------------------------------------------------------------------------------
Cisco Systems, Inc. 2.2
- --------------------------------------------------------------------------------
Exelon Corp. 2.1
Portfolio holdings and allocations are subject to change. Percentages are as of
June 30, 2007, and are based on net assets.
For up-to-date Top 10 Fund Holdings, please visit www.oppenheimerfunds.com.
- --------------------------------------------------------------------------------
9 | OPPENHEIMER EQUITY FUND, INC.
TOP HOLDINGS AND ALLOCATIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECTOR ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Financials 21.8%
Information Technology 19.4
Industrials 13.2
Consumer Discretionary 10.0
Health Care 9.1
Energy 9.0
Consumer Staples 8.6
Utilities 3.9
Materials 2.8
Telecommunication Services 2.2
Portfolio holdings and allocations are subject to change. Percentages are as of
June 30, 2007, and are based on the total market value of common stocks.
- --------------------------------------------------------------------------------
10 | OPPENHEIMER EQUITY FUND, INC.
NOTES
- --------------------------------------------------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. 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, AND OTHER CHARGES AND EXPENSES CAREFULLY
BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS 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 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 shares of the Fund were first publicly offered on 10/2/47. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 5/3/93. 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 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 8/29/95. 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.
11 | OPPENHEIMER EQUITY FUND, INC.
NOTES
- --------------------------------------------------------------------------------
CLASS Y shares of the Fund were first publicly offered on 6/1/94. Class Y shares
are offered only to certain institutional investors under special agreements
with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
12 | OPPENHEIMER EQUITY 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 any;
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 June 30, 2007.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line 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 "actual" line 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 "hypothetical" lines of the
table provide 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 before expenses, which is not the
Fund's 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). Therefore, the "hypothetical" lines of the
table are 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.
13 | OPPENHEIMER EQUITY FUND, INC.
FUND EXPENSES Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT PAID DURING
VALUE VALUE 6 MONTHS ENDED
(1/1/07) (6/30/07) JUNE 30, 2007
- --------------------------------------------------------------------------------
Class A Actual $ 1,000.00 $ 1,118.40 $ 4.58
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,020.48 4.37
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,113.80 9.10
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,016.22 8.69
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,113.80 9.21
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,016.12 8.79
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,116.50 6.74
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,018.45 6.43
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,119.30 3.90
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,021.12 3.72
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 181/365
(to reflect the one-half year period). Those annualized expense ratios,
excluding indirect expenses from affiliated fund, based on the 6-month period
ended June 30, 2007 are as follows:
CLASS EXPENSE RATIOS
- -----------------------------
Class A 0.87%
- -----------------------------
Class B 1.73
- -----------------------------
Class C 1.75
- -----------------------------
Class N 1.28
- -----------------------------
Class Y 0.74
The expense ratio reflects reduction to custodian fees and voluntary waiver or
reimbursement by the Fund's Manager that can be terminated at any time, without
advance notice. 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.
- --------------------------------------------------------------------------------
14 | OPPENHEIMER EQUITY FUND, INC.
STATEMENT OF INVESTMENTS June 30, 2007 / Unaudited
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMON STOCKS--97.9%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--9.8%
- --------------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE--1.0%
Las Vegas Sands Corp. 1 250,800 $ 19,158,612
- --------------------------------------------------------------------------------
Starbucks Corp. 1 369,300 9,690,432
----------------
28,849,044
- --------------------------------------------------------------------------------
MEDIA--5.0%
Cinemark
Holdings, Inc. 1 95,600 1,710,284
- --------------------------------------------------------------------------------
Comcast Corp., Cl. A
Special, Non-Vtg. 1 836,728 23,394,915
- --------------------------------------------------------------------------------
Liberty Global, Inc.,
Series C 1 2,175,983 85,516,132
- --------------------------------------------------------------------------------
News Corp., Inc., Cl. A 1,438,690 30,514,615
- --------------------------------------------------------------------------------
XM Satellite Radio
Holdings, Inc., Cl. A 1 817,300 9,619,621
----------------
150,755,567
- --------------------------------------------------------------------------------
MULTILINE RETAIL--1.3%
J.C. Penney Co., Inc.
(Holding Co.) 279,500 20,230,210
- --------------------------------------------------------------------------------
Target Corp. 302,700 19,251,720
----------------
39,481,930
- --------------------------------------------------------------------------------
SPECIALTY RETAIL--1.9%
Office Depot, Inc. 1 627,731 19,020,249
- --------------------------------------------------------------------------------
Staples, Inc. 850,377 20,179,446
- --------------------------------------------------------------------------------
Tiffany & Co. 166,900 8,855,714
- --------------------------------------------------------------------------------
TJX Cos., Inc. (The) 381,000 10,477,500
----------------
58,532,909
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS--0.6%
Polo Ralph Lauren
Corp., Cl. A 186,900 18,336,759
- --------------------------------------------------------------------------------
CONSUMER STAPLES--8.5%
- --------------------------------------------------------------------------------
BEVERAGES--0.7%
Fomento Economico
Mexicano SA de CV,
UBD 1,723,400 6,755,773
- --------------------------------------------------------------------------------
PepsiCo, Inc. 224,597 14,565,115
----------------
21,320,888
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--4.2%
Costco Wholesale Corp. 1,725,991 $ 101,004,993
- --------------------------------------------------------------------------------
SUPERVALU, Inc. 333,856 15,464,210
- --------------------------------------------------------------------------------
Sysco Corp. 315,400 10,405,046
----------------
126,874,249
- --------------------------------------------------------------------------------
FOOD PRODUCTS--1.6%
Cadbury Schweppes plc 923,000 12,558,611
- --------------------------------------------------------------------------------
ConAgra Foods, Inc. 599,252 16,095,909
- --------------------------------------------------------------------------------
Nestle SA 49,516 18,806,333
----------------
47,460,853
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.6%
Reckitt Benckiser plc 338,820 18,552,435
- --------------------------------------------------------------------------------
TOBACCO--1.4%
Altria Group, Inc. 582,978 40,890,077
- --------------------------------------------------------------------------------
ENERGY--8.8%
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES--2.6%
Halliburton Co. 656,658 22,654,701
- --------------------------------------------------------------------------------
Schlumberger Ltd. 379,650 32,247,471
- --------------------------------------------------------------------------------
Smith International, Inc. 370,360 21,717,910
----------------
76,620,082
- --------------------------------------------------------------------------------
OIL & GAS--6.2%
Exxon Mobil Corp. 867,270 72,746,608
- --------------------------------------------------------------------------------
Kinder Morgan
Management LLC 1 127,480 6,616,212
- --------------------------------------------------------------------------------
Murphy Oil Corp. 257,927 15,331,181
- --------------------------------------------------------------------------------
Occidental
Petroleum Corp. 338,200 19,575,016
- --------------------------------------------------------------------------------
Petroleo Brasileiro SA,
ADR 207,775 25,196,874
- --------------------------------------------------------------------------------
Range Resources Corp. 306,700 11,473,647
- --------------------------------------------------------------------------------
Total SA, Sponsored
ADR 285,730 23,138,415
- --------------------------------------------------------------------------------
XTO Energy, Inc. 228,000 13,702,800
----------------
187,780,753
- --------------------------------------------------------------------------------
FINANCIALS--21.3%
- --------------------------------------------------------------------------------
CAPITAL MARKETS--7.0%
Bear Stearns Cos., Inc.
(The) 280,600 39,284,000
15 | OPPENHEIMER EQUITY FUND, INC.
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
CAPITAL MARKETS Continued
Blackstone
Group LP (The) 1 66,600 $ 1,949,382
- --------------------------------------------------------------------------------
E*TRADE
Financial Corp. 1 610,813 13,492,859
- --------------------------------------------------------------------------------
Fortress Investment
Group LLC, Cl. A 148,800 3,544,416
- --------------------------------------------------------------------------------
Franklin Resources, Inc. 79,100 10,478,377
- --------------------------------------------------------------------------------
Goldman Sachs
Group, Inc. (The) 96,100 20,829,675
- --------------------------------------------------------------------------------
Legg Mason, Inc. 146,470 14,409,719
- --------------------------------------------------------------------------------
Northern Trust Corp. 178,700 11,479,688
- --------------------------------------------------------------------------------
UBS AG 2 1,247,610 74,869,076
- --------------------------------------------------------------------------------
UBS AG 2 343,543 20,536,673
----------------
210,873,865
- --------------------------------------------------------------------------------
COMMERCIAL BANKS--3.9%
Wachovia Corp. 1,405,913 72,053,041
- --------------------------------------------------------------------------------
Wells Fargo & Co. 1,264,376 44,468,104
----------------
116,521,145
- --------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--4.0%
Bank of America Corp. 547,886 26,786,147
- --------------------------------------------------------------------------------
Chicago Mercantile
Exchange (The) 41,900 22,389,684
- --------------------------------------------------------------------------------
Citigroup, Inc. 1,390,180 71,302,332
----------------
120,478,163
- --------------------------------------------------------------------------------
INSURANCE--4.5%
American International
Group, Inc. 345,610 24,203,068
- --------------------------------------------------------------------------------
Everest Re Group Ltd. 446,070 48,461,045
- --------------------------------------------------------------------------------
Genworth Financial, Inc.,
Cl. A 361,775 12,445,060
- --------------------------------------------------------------------------------
Hartford Financial Services
Group, Inc. (The) 107,900 10,629,229
- --------------------------------------------------------------------------------
National Financial
Partners Corp. 177,999 8,243,134
- --------------------------------------------------------------------------------
Platinum Underwriters
Holdings Ltd. 268,027 9,313,938
- --------------------------------------------------------------------------------
Prudential Financial, Inc. 212,600 20,671,098
----------------
133,966,572
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT--0.4%
CB Richard Ellis
Group, Inc., Cl. A 1 361,600 $ 13,198,400
- --------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--1.5%
Freddie Mac 760,800 46,180,560
- --------------------------------------------------------------------------------
HEALTH CARE--8.9%
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--1.4%
Celgene Corp. 1 214,989 12,325,319
- --------------------------------------------------------------------------------
Genentech, Inc. 1 196,800 14,889,888
- --------------------------------------------------------------------------------
Gilead Sciences, Inc. 1 312,910 12,131,521
- --------------------------------------------------------------------------------
Vanda
Pharmaceuticals, Inc. 1 190,732 3,864,230
----------------
43,210,958
- --------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.7%
Bard (C.R.), Inc. 58,800 4,858,644
- --------------------------------------------------------------------------------
St. Jude Medical, Inc. 1 274,200 11,376,558
- --------------------------------------------------------------------------------
Varian Medical
Systems, Inc. 1 138,700 5,896,137
----------------
22,131,339
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--2.7%
Medco Health
Solutions, Inc. 1 397,909 31,032,923
- --------------------------------------------------------------------------------
Schein (Henry), Inc. 1 154,100 8,233,563
- --------------------------------------------------------------------------------
WellPoint, Inc. 1 534,144 42,640,716
----------------
81,907,202
- --------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES--1.0%
Covance, Inc. 1 152,500 10,455,400
- --------------------------------------------------------------------------------
Thermo Fisher
Scientific, Inc. 1 376,000 19,446,720
----------------
29,902,120
- --------------------------------------------------------------------------------
PHARMACEUTICALS--3.1%
Allergan, Inc. 151,800 8,749,752
- --------------------------------------------------------------------------------
Novartis AG, ADR 552,180 30,960,733
- --------------------------------------------------------------------------------
Roche Holding AG 122,905 21,802,538
- --------------------------------------------------------------------------------
Sanofi-Aventis SA, ADR 188,017 7,571,445
- --------------------------------------------------------------------------------
Schering-Plough Corp. 236,500 7,199,060
- --------------------------------------------------------------------------------
Shionogi & Co. Ltd. 338,000 5,517,807
16 | OPPENHEIMER EQUITY FUND, INC.
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
PHARMACEUTICALS Continued
Shire Pharmaceuticals Group plc 413,018 $ 10,237,212
----------------
92,038,547
- --------------------------------------------------------------------------------
INDUSTRIALS--13.0%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--8.2%
Alliant Techsystems, Inc. 1 159,224 15,787,060
- --------------------------------------------------------------------------------
Boeing Co. 1,081,724 104,018,580
- --------------------------------------------------------------------------------
Empresa Brasileira de Aeronautica SA, ADR 209,400 10,095,174
- --------------------------------------------------------------------------------
General Dynamics Corp. 190,700 14,916,554
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 23,300 2,193,229
- --------------------------------------------------------------------------------
Rockwell Collins, Inc. 94,000 6,640,160
- --------------------------------------------------------------------------------
United Technologies Corp. 1,325,950 94,049,634
----------------
247,700,391
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.5%
Corporate Executive Board Co. (The) 193,700 12,573,067
- --------------------------------------------------------------------------------
Robert Half International, Inc. 93,500 3,412,750
----------------
15,985,817
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.5%
ABB Ltd. 582,517 13,108,169
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--1.0%
Siemens AG, Sponsored ADR 215,050 30,765,053
- --------------------------------------------------------------------------------
MACHINERY--2.3%
Deere & Co. 196,208 23,690,154
- --------------------------------------------------------------------------------
Joy Global, Inc. 149,600 8,726,168
- --------------------------------------------------------------------------------
Navistar International Corp. 1 565,770 37,340,820
----------------
69,757,142
- --------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS--0.5%
Fastenal Co. 327,500 13,709,150
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--18.9%
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--5.3%
Cisco Systems, Inc. 1 2,330,956 64,917,125
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT Continued
Corning, Inc. 1 1,056,300 $ 26,988,465
- --------------------------------------------------------------------------------
F5 Networks, Inc. 1 117,500 9,470,500
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 421,300 18,280,207
- --------------------------------------------------------------------------------
Research in Motion Ltd. 1 116,300 23,258,837
- --------------------------------------------------------------------------------
Telefonaktiebolaget LM Ericsson, Sponsored ADR 397,700 15,864,253
----------------
158,779,387
- --------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--2.2%
Apple, Inc. 1 248,000 30,265,920
- --------------------------------------------------------------------------------
EMC Corp. 1 1,246,600 22,563,460
- --------------------------------------------------------------------------------
Network Appliance, Inc. 1 440,160 12,852,672
----------------
65,682,052
- --------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES--2.8%
eBay, Inc. 1 745,600 23,993,408
- --------------------------------------------------------------------------------
Google, Inc., Cl. A 1 98,100 51,343,578
- --------------------------------------------------------------------------------
Yahoo!, Inc. 1 361,285 9,801,662
----------------
85,138,648
- --------------------------------------------------------------------------------
IT SERVICES--1.5%
Affiliated Computer Services, Inc., Cl. A 1 328,000 18,604,160
- --------------------------------------------------------------------------------
Automatic Data Processing, Inc. 347,600 16,848,172
- --------------------------------------------------------------------------------
Cognizant Technology Solutions Corp. 1 139,800 10,497,582
----------------
45,949,914
- --------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT--2.4%
Applied Materials, Inc. 1,242,363 24,685,753
- --------------------------------------------------------------------------------
ASML Holding NV 1 371,100 10,186,695
- --------------------------------------------------------------------------------
Broadcom Corp., Cl. A 1 546,584 15,987,582
- --------------------------------------------------------------------------------
Microchip Technology, Inc. 322,500 11,945,400
- --------------------------------------------------------------------------------
SiRF Technology Holdings, Inc. 1 123,020 2,551,435
- --------------------------------------------------------------------------------
Texas Instruments, Inc. 214,300 8,064,109
----------------
73,420,974
17 | OPPENHEIMER EQUITY FUND, INC.
STATEMENT OF INVESTMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
SOFTWARE--4.7%
Activision, Inc. 1 235,500 $ 4,396,785
- --------------------------------------------------------------------------------
Adobe Systems, Inc. 1 423,354 16,997,663
- --------------------------------------------------------------------------------
Amdocs Ltd. 1 437,465 17,419,856
- --------------------------------------------------------------------------------
Autodesk, Inc. 1 410,289 19,316,406
- --------------------------------------------------------------------------------
Microsoft Corp. 973,361 28,684,949
- --------------------------------------------------------------------------------
Novell, Inc. 1 1,135,125 8,842,624
- --------------------------------------------------------------------------------
Red Hat, Inc. 1 424,059 9,448,035
- --------------------------------------------------------------------------------
Salesforce.com, Inc. 1 142,600 6,111,836
- --------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1 1,556,654 31,086,380
----------------
142,304,534
- --------------------------------------------------------------------------------
MATERIALS--2.7%
- --------------------------------------------------------------------------------
CHEMICALS--2.5%
Lubrizol Corp. (The) 365,600 23,599,480
- --------------------------------------------------------------------------------
Monsanto Co. 464,895 31,399,008
- --------------------------------------------------------------------------------
Praxair, Inc. 295,200 21,251,448
----------------
76,249,936
- --------------------------------------------------------------------------------
METALS & MINING--0.2%
Allegheny Technologies, Inc. 63,900 6,701,832
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.2%
- --------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--0.5%
Verizon Communications, Inc. 348,927 14,365,325
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--1.7%
America Movil SAB de CV, ADR, Series L 219,950 13,621,504
- --------------------------------------------------------------------------------
American Tower Corp. 1 394,000 16,548,000
VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES Continued
Crown Castle International Corp. 1 315,400 $ 11,439,558
- --------------------------------------------------------------------------------
NII Holdings, Inc. 1 128,000 10,334,720
----------------
51,943,782
- --------------------------------------------------------------------------------
UTILITIES--3.8%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--3.1%
Exelon Corp. 861,005 62,508,963
- --------------------------------------------------------------------------------
FirstEnergy Corp. 480,260 31,087,230
----------------
93,596,193
- --------------------------------------------------------------------------------
ENERGY TRADERS--0.3%
Dynegy, Inc., Cl. A 1 828,000 7,816,320
- --------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.4%
CMS Energy Corp. 803,876 13,826,663
----------------
Total Common Stocks (Cost $2,478,715,169) 2,952,665,699
- --------------------------------------------------------------------------------
INVESTMENTS IN AFFILIATED COMPANIES--1.6%
- --------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund,
Cl. E, 5.28% 3,4
(Cost $49,394,702) 49,394,702 49,394,702
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE
(COST $2,528,109,871) 99.5% 3,002,060,401
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.5 14,819,078
-----------------------------
NET ASSETS 100.0% $ 3,016,879,479
=============================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income producing security.
2. The Fund holds securities which have been issued by the same entity and that
trade on separate exchanges.
3. Rate shown is the 7-day yield as of June 30, 2007.
4. Is or was an affiliate, defined in the Investment Company Act of 1940, at or
during the period ended June 30, 2007, 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 advisor. Transactions during the period in which the
issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES
DECEMBER 31, 2006 ADDITIONS REDUCTIONS JUNE 30, 2007
- -----------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E 51,831,921 558,695,690 561,132,909 49,394,702
VALUE DIVIDEND
SEE NOTE 1 INCOME
- -----------------------------------------------------------------------------------------------------------------
Oppenheimer Institutional Money Market Fund, Cl. E $ 49,394,702 $ 1,697,508
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 | OPPENHEIMER EQUITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
June 30, 2007
- --------------------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------------------
Investments, at value--see accompanying statement of investments:
Unaffiliated companies (cost $2,478,715,169) $ 2,952,665,699
Affiliated companies (cost $49,394,702) 49,394,702
-----------------
3,002,060,401
- --------------------------------------------------------------------------------------------------------------
Cash 991,862
- --------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 40,303,243
Shares of capital stock sold 7,051,862
Interest and dividends 3,256,703
Other 92,276
-----------------
Total assets 3,053,756,347
- --------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 32,249,338
Shares of capital stock redeemed 2,532,235
Distribution and service plan fees 1,547,694
Transfer and shareholder servicing agent fees 272,045
Shareholder communications 209,329
Directors' compensation 30,856
Other 35,371
-----------------
Total liabilities 36,876,868
- --------------------------------------------------------------------------------------------------------------
NET ASSETS $ 3,016,879,479
=================
- --------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- --------------------------------------------------------------------------------------------------------------
Par value of shares of capital stock $ 25,071,340
- --------------------------------------------------------------------------------------------------------------
Additional paid-in capital 2,162,517,142
- --------------------------------------------------------------------------------------------------------------
Accumulated net investment income 6,812,897
- --------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency transactions 348,527,570
- --------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies 473,950,530
-----------------
NET ASSETS $ 3,016,879,479
=================
19 | OPPENHEIMER EQUITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ------------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $2,656,489,459
and 219,671,817 shares of capital stock outstanding) $ 12.09
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 12.83
- ------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $154,743,589 and 13,516,549 shares
of capital stock outstanding) $ 11.45
- ------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $100,883,072 and 8,808,069 shares
of capital stock outstanding) $ 11.45
- ------------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $39,711,963 and 3,342,280 shares
of capital stock outstanding) $ 11.88
- ------------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $65,051,396 and 5,374,681 shares of capital stock outstanding) $ 12.10
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 | OPPENHEIMER EQUITY FUND, INC.
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
For the Six Months Ended June 30, 2007
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $847,285) $ 17,583,953
Affiliated companies 1,697,508
- ----------------------------------------------------------------------------------------
Interest 97,384
-------------
Total investment income 19,378,845
- ----------------------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------------------
Management fees 7,498,961
- ----------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 2,642,631
Class B 767,472
Class C 453,607
Class N 87,149
- ----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,327,744
Class B 109,388
Class C 87,054
Class N 40,871
Class Y 61,488
- ----------------------------------------------------------------------------------------
Shareholder communications:
Class A 186,581
Class B 41,284
Class C 9,962
Class N 1,561
Class Y 371
- ----------------------------------------------------------------------------------------
Directors' compensation 27,613
- ----------------------------------------------------------------------------------------
Custodian fees and expenses 6,799
- ----------------------------------------------------------------------------------------
Administration service fees 750
- ----------------------------------------------------------------------------------------
Other 111,972
-------------
Total expenses 13,463,258
Less reduction to custodian expenses (450)
Less waivers and reimbursements of expenses (32,260)
-------------
Net expenses 13,430,548
- ----------------------------------------------------------------------------------------
NET INVESTMENT INCOME 5,948,297
21 | OPPENHEIMER EQUITY FUND, INC.
STATEMENT OF OPERATIONS Unaudited / Continued
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- -------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments 307,160,001
Closing and expiration of option contracts written (1,230,805)
Foreign currency transactions 230,246
Net increase from payment by affiliate 41,597
----------------
Net realized gain 306,201,039
- -------------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 5,816,590
Translation of assets and liabilities denominated in foreign currencies 1,854,477
----------------
Net change in unrealized appreciation 7,671,067
- -------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 319,820,403
================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 | OPPENHEIMER EQUITY FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DECEMBER 31,
(UNAUDITED) 2006
- -------------------------------------------------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------------------------------------------------
Net investment income $ 5,948,297 $ 6,715,740
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain 306,201,039 205,031,048
- -------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 7,671,067 49,019,677
------------------------------------
Net increase in net assets resulting from operations 319,820,403 260,766,465
- -------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A -- (6,650,247)
Class B -- --
Class C -- --
Class N -- (9,794)
Class Y -- (253,386)
------------------------------------
-- (6,913,427)
- -------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (158,473,659)
Class B -- (11,001,512)
Class C -- (5,632,007)
Class N -- (2,125,377)
Class Y -- (3,988,610)
------------------------------------
-- (181,221,165)
- -------------------------------------------------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from capital stock transactions:
Class A (34,331,894) 46,436,271
Class B (22,199,714) (51,058,873)
Class C 8,399,085 4,496,181
Class N 4,502,600 12,066,838
Class Y (1,628,110) (787,931)
------------------------------------
(45,258,033) 11,152,486
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
Total increase 274,562,370 83,784,359
- -------------------------------------------------------------------------------------------------------------------------
Beginning of period 2,742,317,109 2,658,532,750
------------------------------------
End of period (including accumulated net investment income
of $6,812,897 and $864,600, respectively) $ 3,016,879,479 $ 2,742,317,109
====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 | OPPENHEIMER EQUITY FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DEC. 31,
CLASS A (UNAUDITED) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 10.81 $ 10.51 $ 10.84 $ 10.77 $ 8.53 $ 10.40
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income .03 1 .04 1 .04 1 .07 1 .02 .03
Net realized and unrealized gain
(loss) 1.25 1.05 .86 1.07 2.22 (1.88)
----------------------------------------------------------------------------------------------
Total from investment operations 1.28 1.09 .90 1.14 2.24 (1.85)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment
income -- (.03) (.04) (.07) -- (.02)
Distributions from net realized
gain -- (.76) (1.19) (1.00) -- --
----------------------------------------------------------------------------------------------
Total dividends and/or
distributions to shareholders -- (.79) (1.23) (1.07) -- (.02)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.09 $ 10.81 $ 10.51 $ 10.84 $ 10.77 $ 8.53
==============================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 11.84% 10.34% 8.16% 10.73% 3 26.26% (17.80)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 2,656,489 $2,408,295 $2,297,161 $2,270,477 $2,283,036 $1,933,397
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 2,532,700 $2,328,304 $2,238,135 $2,248,969 $2,035,816 $2,255,746
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.49% 0.34% 0.38% 0.61% 0.19% 0.29%
Total expenses 0.87% 5,6,7 0.88% 5,6 0.89% 7 0.89% 7 0.90% 7,8 0.96% 7
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 74% 85% 75% 91% 108% 95%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an 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.
3. Less than 0.01% of the Fund's return consists of a voluntary payment to the
Fund by the Manager.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.87%
Year Ended December 31, 2006 0.88
6. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
7. Reduction to custodian expenses less than 0.005%.
8. Voluntary waiver of transfer agent fees less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 | OPPENHEIMER EQUITY FUND, INC.
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DEC. 31,
CLASS B (UNAUDITED) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.28 $ 10.09 $ 10.51 $ 10.51 $ 8.39 $ 10.30
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment loss (.02) 1 (.05) 1 (.05) 1 (.04) 1 (.08) (.05)
Net realized and unrealized gain (loss) 1.19 1.00 .82 1.04 2.20 (1.86)
------------------------------------------------------------------------------------------
Total from investment operations 1.17 .95 .77 1.00 2.12 (1.91)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income -- -- -- -- -- --
Distributions from net realized gain -- (.76) (1.19) (1.00) -- --
------------------------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.76) (1.19) (1.00) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.45 $ 10.28 $ 10.09 $ 10.51 $ 10.51 $ 8.39
==========================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 11.38% 9.37% 7.16% 9.70% 3 25.27% (18.54)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $ 154,744 $ 160,314 $206,957 $ 263,376 $327,809 $334,345
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 155,211 $ 180,523 $224,966 $ 283,662 $315,065 $430,844
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (0.37)% (0.53)% (0.52)% (0.35)% (0.73)% (0.55)%
Total expenses 1.73% 5,6,7 1.77% 5,6 1.79% 7 1.81% 7,8 1.83% 7,8 1.80% 7
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 74% 85% 75% 91% 108% 95%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an 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.
3. 0.11% of the Fund's return consists of a voluntary payment to the Fund by the
Manager. Excluding this payment, total return would have been 9.59%.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 1.73%
Year Ended December 31, 2006 1.77
6. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
7. Reduction to custodian expenses less than 0.005%.
8. Voluntary waiver of transfer agent fees less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 | OPPENHEIMER EQUITY FUND, INC.
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DEC. 31,
CLASS C (UNAUDITED) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.28 $ 10.09 $ 10.51 $ 10.51 $ 8.40 $ 10.30
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.02) 1 (.06) 1 (.05) 1 (.03) 1 (.07) (.06)
Net realized and unrealized gain (loss) 1.19 1.01 .82 1.03 2.18 (1.84)
---------------------------------------------------------------------------
Total from investment operations 1.17 .95 .77 1.00 2.11 (1.90)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- -- --
Distributions from net realized gain -- (.76) (1.19) (1.00) -- --
---------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.76) (1.19) (1.00) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.45 $ 10.28 $ 10.09 $ 10.51 $ 10.51 $ 8.40
===========================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 11.38% 9.36% 7.16% 9.70% 3 25.12% (18.45)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $100,883 $82,674 $76,679 $77,438 $75,620 $62,561
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 91,656 $78,978 $75,144 $74,618 $66,739 $74,785
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment loss (0.38)% (0.56)% (0.52)% (0.31)% (0.74)% (0.56)%
Total expenses 1.75% 5,6,7 1.78% 5,6 1.79% 7 1.80% 7 1.84% 7,8 1.81% 7
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 74% 85% 75% 91% 108% 95%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an 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.
3. Less than 0.01% of the Fund's return consists of a voluntary payment to the
Fund by the Manager.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 1.75%
Year Ended December 31, 2006 1.78
6. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
7. Reduction to custodian expenses less than 0.005%.
8. Voluntary waiver of transfer agent fees less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 | OPPENHEIMER EQUITY FUND, INC.
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DEC. 31,
CLASS N (UNAUDITED) 2006 2005 2004 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.64 $ 10.38 $ 10.73 $ 10.68 $ 8.48 $ 10.36
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) -- 1,2 (.01) 1 -- 1,2 .02 1 -- 2 .07
Net realized and unrealized gain (loss) 1.24 1.03 .85 1.05 2.20 (1.95)
---------------------------------------------------------------------------
Total from investment operations 1.24 1.02 .85 1.07 2.20 (1.88)
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.01) (.02) -- --
Distributions from net realized gain -- (.76) (1.19) (1.00) -- --
---------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.76) (1.20) (1.02) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 11.88 $ 10.64 $ 10.38 $ 10.73 $ 10.68 $ 8.48
===========================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 3 11.65% 9.81% 7.72% 10.19% 4 25.94% (18.15)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 39,712 $31,348 $18,814 $15,347 $13,145 $ 4,278
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 35,204 $24,317 $16,262 $14,488 $ 9,062 $ 3,519
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 5
Net investment income (loss) 0.08% (0.12)% (0.02)% 0.16% (0.20)% (0.10)%
Total expenses 1.28% 6,7,8 1.30% 6,7 1.29% 8 1.35% 8 1.33% 8,9 1.30% 8
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 74% 85% 75% 91% 108% 95%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Less than $0.005 per share.
3. Assumes an 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. 0.10% of the Fund's return consists of a voluntary payment to the Fund by the
Manager. Excluding this payment, total return would have been 10.09%.
5. Annualized for periods less than one full year.
6. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 1.28%
Year Ended December 31, 2006 1.30
7. Voluntary waiver or reimbursement of indirect management fees less than
0.005%.
8. Reduction to custodian expenses less than 0.005%.
9. Voluntary waiver of transfer agent fees less than 0.005%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 | OPPENHEIMER EQUITY FUND, INC.
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2007 DEC. 31,
CLASS Y (UNAUDITED) 2006 2005 2004 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.81 $ 10.51 $ 10.85 $ 10.78 $ 8.52 $ 10.40
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .03 1 .05 1 .06 1 .08 1 .03 .03
Net realized and unrealized gain (loss) 1.26 1.06 .85 1.07 2.23 (1.88)
------------------------------------------------------------------
Total from investment operations 1.29 1.11 .91 1.15 2.26 (1.85)
- ---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.05) (.06) (.08) -- (.03)
Distributions from net realized gain -- (.76) (1.19) (1.00) -- --
------------------------------------------------------------------
Total dividends and/or distributions
to shareholders -- (.81) (1.25) (1.08) -- (.03)
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.10 $ 10.81 $ 10.51 $ 10.85 $ 10.78 $ 8.52
==================================================================
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 11.93% 10.50% 8.20% 10.87% 3 26.53% (17.79)%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $65,051 $59,686 $58,922 $57,103 $56,098 $43,016
- ---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $61,169 $57,855 $54,643 $54,905 $48,017 $45,669
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income 0.61% 0.48% 0.51% 0.74% 0.27% 0.36%
Total expenses 0.74% 5 0.73% 5 0.75% 0.76% 0.84% 0.97%
Expenses after payments, waivers
and/or reimbursements and reduction
to custodian expenses 0.74% 0.73% 0.75% 0.76% 0.84% 0.88%
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 74% 85% 75% 91% 108% 95%
1. Per share amounts calculated based on the average shares outstanding during
the period.
2. Assumes an 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.
3. 0.10% of the Fund's return consists of a voluntary payment to the Fund by the
Manager. Excluding this payment, total return would have been 10.77%.
4. Annualized for periods less than one full year.
5. Total expenses including indirect expenses from affiliated fund were as
follows:
Six Months Ended June 30, 2007 0.74%
Year Ended December 31, 2006 0.73
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 | OPPENHEIMER EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Equity 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 a high total return. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C, Class N and Class Y 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. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
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. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
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 business. Securities may be
valued primarily using dealer-supplied valuations or a portfolio pricing service
authorized by the Board of Directors. Securities listed or traded on National
Stock Exchanges or other domestic exchanges are valued based on the last sale
price of the security traded on that exchange prior to the time when the Fund's
assets are valued. Securities traded on NASDAQ(R) are valued based on the
closing price provided by NASDAQ prior to 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 closing "bid" and
"asked" prices, and if not, at the closing bid price. Securities traded on
foreign exchanges are valued based on the last sale price on the principal
exchange on which the security is traded, as identified by the portfolio pricing
service, prior to the time when the Fund's assets are valued. In the absence of
a sale, the security is valued at the official closing price on the principal
exchange. Corporate, government and municipal debt instruments having a
remaining maturity in excess of sixty days and all mortgage-backed securities
will be valued at the mean between the "bid" and "asked" prices. Futures
contracts traded on a commodities or futures exchange will be valued at the
final settlement price or official closing price on the principal exchange as
reported by such principal exchange at its
29 | OPPENHEIMER EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
trading session ending at, or most recently prior to, the time when the Fund's
assets are valued. Options are valued daily based upon the last sale price on
the principal exchange on which the option is traded. Securities (including
restricted securities) for which market quotations are not readily available are
valued at their fair value. Foreign and domestic 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 their
respective exchanges will be fair valued. Fair value is determined in good faith
using consistently applied procedures under the supervision of the Board of
Directors. Investments in open-end registered investment companies (including
affiliated funds) are valued at that fund's net asset value. Short-term "money
market type" debt securities with remaining maturities of sixty days or less are
valued at amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
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 New
York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each
day the Exchange is open for business. Foreign exchange rates may be valued
primarily using dealer supplied valuations or a portfolio pricing service
authorized by the Board of Directors.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized 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 foreign exchange gains and losses 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.
- --------------------------------------------------------------------------------
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") which seeks current income and
stability of principal. 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 advisor of IMMF. The Fund's
investment in IMMF is included in the Statement of Investments. 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
30 | OPPENHEIMER EQUITY FUND, INC.
reimburse Fund expenses in an amount equal to the indirect management fees
incurred through the Fund's investment in IMMF.
- --------------------------------------------------------------------------------
INVESTMENTS WITH OFF-BALANCE SHEET RISK. The Fund enters into financial
instrument transactions (such as swaps, futures, options and other derivatives)
that may have off-balance sheet market risk. Off-balance sheet market risk
exists when the maximum potential loss on a particular financial instrument is
greater than the value of such financial instrument, as reflected in the Fund's
Statement of Assets and Liabilities.
- --------------------------------------------------------------------------------
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. 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.
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.
As of June 30, 2007, the Fund had available for federal income tax
purposes an estimated capital loss carryforward of zero. This estimated capital
loss carryforward represents carryforward as of the end of the last fiscal year,
increased for losses deferred under tax accounting rules to the current fiscal
year and is increased or decreased by capital losses or gains realized in the
first six months of the current fiscal year. As of June 30, 2007, it is
estimated that the Fund will utilize $3,246,070 of capital loss carryforward to
offset realized capital gains. During the fiscal year ended December 31, 2006,
the Fund did not utilize any capital loss carryforward to offset capital gains
realized in that fiscal year.
As of December 31, 2006, the Fund had available for federal income tax
purposes straddle losses of $3,246,070.
- --------------------------------------------------------------------------------
DIRECTORS' COMPENSATION. 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
31 | OPPENHEIMER EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
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 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 to the
compensation deferral plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income and capital gain distributions, if
any, are declared and paid annually.
- --------------------------------------------------------------------------------
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, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
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 U.S. generally
accepted accounting principles 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 income and expenses during the reporting
period. Actual results could differ from those estimates.
32 | OPPENHEIMER EQUITY FUND, INC.
- --------------------------------------------------------------------------------
2. SHARES OF CAPITAL STOCK
The Fund has authorized 860 million shares of $0.10 par value capital stock of
each class. Transactions in shares of capital stock were as follows:
SIX MONTHS ENDED JUNE 30, 2007 YEAR ENDED DECEMBER 31, 2006
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------
CLASS A
Sold 16,215,502 $ 186,743,867 25,187,833 $ 273,008,782
Dividends and/or
distributions reinvested -- -- 14,205,308 153,985,276
Redeemed (19,307,207) (221,075,761) (35,191,223) (380,557,787)
-------------------------------------------------------------
Net increase (decrease) (3,091,705) $ (34,331,894) 4,201,918 $ 46,436,271
=============================================================
- ---------------------------------------------------------------------------------------------
CLASS B
Sold 1,384,750 $ 15,036,998 2,451,271 $ 25,395,098
Dividends and/or
distributions reinvested -- -- 1,034,838 10,669,178
Redeemed (3,464,836) (37,236,712) (8,404,863) (87,123,149)
-------------------------------------------------------------
Net decrease (2,080,086) $ (22,199,714) (4,918,754) $ (51,058,873)
=============================================================
- ---------------------------------------------------------------------------------------------
CLASS C
Sold 1,715,812 $ 18,743,382 1,931,573 $ 20,003,961
Dividends and/or
distributions reinvested -- -- 515,903 5,324,120
Redeemed (946,753) (10,344,297) (2,005,315) (20,831,900)
-------------------------------------------------------------
Net increase 769,059 $ 8,399,085 442,161 $ 4,496,181
=============================================================
- ---------------------------------------------------------------------------------------------
CLASS N
Sold 1,182,083 $ 13,229,868 1,576,117 $ 16,834,528
Dividends and/or
distributions reinvested -- -- 179,941 1,921,769
Redeemed (785,029) (8,727,268) (623,943) (6,689,459)
-------------------------------------------------------------
Net increase 397,054 $ 4,502,600 1,132,115 $ 12,066,838
=============================================================
- ---------------------------------------------------------------------------------------------
CLASS Y
Sold 1,489,561 $ 17,003,884 1,350,342 $ 14,731,456
Dividends and/or
distributions reinvested -- -- 391,328 4,241,996
Redeemed (1,634,247) (18,631,994) (1,826,982) (19,761,383)
-------------------------------------------------------------
Net decrease (144,686) $ (1,628,110) (85,312) $ (787,931)
=============================================================
- --------------------------------------------------------------------------------
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 six months ended
June 30, 2007, were as follows:
PURCHASES SALES
- ----------------------------------------------------------------
Investment securities $ 2,080,482,843 $ 2,131,420,553
33 | OPPENHEIMER EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of average net assets as shown in the following table:
FEE SCHEDULE
--------------------------------
Up to $100 million 0.75%
Next $100 million 0.70
Next $100 million 0.65
Next $100 million 0.60
Next $100 million 0.55
Over $500 million 0.50
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICE FEES. The Fund pays the Manager a fee of $1,500 per year
for preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
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 six months ended June 30, 2007, the Fund paid
$1,666,919 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 per
annum for assets of $10 million or more. The Class Y shares are subject to the
minimum fees in the event that the per account fee does not equal or exceed the
applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
periodically at an annual rate of up to 0.25% of the average annual net assets
of Class A shares of the Fund. 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. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
periods. 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 for Class B, Class C and Class N
shares 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 and 0.25% on Class N shares. The Distributor also receives a
service fee of 0.25% per year under each plan. If either the
34 | OPPENHEIMER EQUITY FUND, INC.
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. The
Distributor determines its uncompensated expenses under the plan at calendar
quarter ends. The Distributor's aggregate uncompensated expenses under the plan
at June 30, 2007 for Class C and Class N shares were $2,600,271 and $502,328,
respectively. Fees incurred by the Fund under the plans are detailed in the
Statement of Operations.
- --------------------------------------------------------------------------------
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 CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- -----------------------------------------------------------------------------------------------
June 30, 2007 $ 305,546 $ 2,610 $ 116,273 $ 3,445 $ 566
- --------------------------------------------------------------------------------
PAYMENTS, WAIVERS AND REIMBURSEMENTS OF EXPENSES. 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. This undertaking may be amended or
withdrawn at any time.
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 six months ended June 30, 2007, the Manager waived $32,260 for
IMMF management fees.
The Distributor paid the Fund $41,597 in restitution as part of a
settlement with respect to an investigation of certain agreements between the
Distributor and various financial intermediaries that had selling agreements
with the Distributor. The payment increased the Fund's total returns by less
than 0.01%.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to settle specific purchases or sales of securities
denominated in a foreign currency and for protection from adverse exchange rate
fluctuation. Risks to the Fund include the potential inability of the
counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and
35 | OPPENHEIMER EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS Continued
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities as a receivable or payable and in the Statement of
Operations with the change in unrealized appreciation or depreciation.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign transaction. Contracts closed or settled with the same broker are
recorded as net realized gains or losses. Such realized gains and losses are
reported with all other foreign currency gains and losses in the Statement of
Operations.
As of June 30, 2007, the Fund had no outstanding foreign currency
contracts.
- --------------------------------------------------------------------------------
6. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. 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 and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call or put options are noted
in the Statement of Investments where applicable. Contracts subject to call or
put, expiration date, exercise price, premium received and market value are
detailed in a note to the Statement of Investments. Options written are reported
as a liability in the Statement of Assets and Liabilities. Realized gains and
losses are reported in the Statement of Operations.
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 whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist.
36 | OPPENHEIMER EQUITY FUND, INC.
Written option activity for the six months ended June 30, 2007 was as follows:
CALL OPTIONS
------------------------
NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS
- -----------------------------------------------------------------
Options outstanding as of
December 31, 2006 -- $ --
Options written 2,243 722,821
Options closed or expired (2,243) (722,821)
------------------------
Options outstanding as of
June 30, 2007 -- $ --
========================
- --------------------------------------------------------------------------------
7. RECENT ACCOUNTING PRONOUNCEMENT
In September 2006, Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This
standard establishes a single authoritative definition of fair value, sets out a
framework for measuring fair value and expands disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. As of June 30, 2007, the Manager does
not believe the adoption of SFAS No. 157 will materially impact the financial
statement amounts; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.
37 | OPPENHEIMER EQUITY 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
http://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.
38 | OPPENHEIMER EQUITY FUND, INC.
ITEM 2. CODE OF ETHICS.
Not applicable to semiannual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semiannual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semiannual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
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
1. 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:
o the name, address, and business, educational, and/or other pertinent
background of the person being recommended;
o a statement concerning whether the person is an "interested person" as
defined in the Investment Company Act of 1940;
o 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
o 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 06/30/2007, 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.
(1) Not applicable to semiannual reports.
(2) Exhibits attached hereto.
(3) Not applicable.
(b) Exhibit attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Oppenheimer Equity Fund, Inc.
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 08/08/2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ John V. Murphy
---------------------------
John V. Murphy
Principal Executive Officer
Date: 08/08/2007
By: /s/ Brian W. Wixted
---------------------------
Brian W. Wixted
Principal Financial Officer
Date: 08/08/2007