-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, W1N4LqKnSXd7ORkanZsUAZ2tA6sQbNx11v4uVS+/ovJ9tdqNOn6cD9DgGOqPaQmc aUSaFVORHw3tE9YxaQIWGw== 0001206774-06-000960.txt : 20060428 0001206774-06-000960.hdr.sgml : 20060428 20060428150641 ACCESSION NUMBER: 0001206774-06-000960 CONFORMED SUBMISSION TYPE: N-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060228 FILED AS OF DATE: 20060428 DATE AS OF CHANGE: 20060428 EFFECTIVENESS DATE: 20060428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELAWARE INVESTMENTS DIVIDEND & INCOME FUND INC CENTRAL INDEX KEY: 0000896923 IRS NUMBER: 232713064 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-Q SEC ACT: 1940 Act SEC FILE NUMBER: 811-07460 FILM NUMBER: 06789442 BUSINESS ADDRESS: STREET 1: 2005 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2152552127 MAIL ADDRESS: STREET 1: 2005 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 FORMER COMPANY: FORMER CONFORMED NAME: DELAWARE GROUP DIVIDEND & INCOME FUND INC DATE OF NAME CHANGE: 19930714 0000896923 S000011332 DELAWARE INVESTMENTS DIVIDEND & INCOME FUND, INC. C000031375 DELAWARE INVESTMENTS DIVIDEND & INCOME FUND, INC. DDF N-Q 1 d19178.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-7460 Exact name of registrant as specified in charter: Delaware Investments Dividend and Income Fund, Inc. Address of principal executive offices: 2005 Market Street Philadelphia, PA 19103 Name and address of agent for service: David F. Connor, Esq. 2005 Market Street Philadelphia, PA 19103 Registrant's telephone number, including area code: (800) 523-1918 Date of fiscal year end: November 30 Date of reporting period: February 28, 2006
Item 1. Schedule of Investments. Schedule of Investments (Unaudited) Delaware Investments Dividend and Income Fund, Inc. February 28, 2006
Number of Market Shares Value Common Stock- 73.95% Consumer Discretionary - 5.65% =+@Avado Brands 1,390 $ 19,502 Gap 132,200 2,450,988 *+Great Wolf Resorts 74,100 765,453 Limited Brands 104,000 2,461,680 Mattel 160,200 2,699,370 +XM Satellite Radio Holdings Class A 2,000 44,180 ------ 8,441,173 Consumer Staples - 5.56% B&G Foods 4,800 71,952 ConAgra Foods 113,800 2,393,214 Heinz (H.J.) 30,400 1,151,248 Kimberly-Clark 39,000 2,308,020 Safeway 98,300 2,389,673 --------- 8,314,107 Energy - 3.31% Chevron 41,000 2,315,680 ConocoPhillips 40,000 2,438,400 *+Petroleum Geo-Services ADR 4,867 192,247 ------- 4,946,327 Financials - 12.70% Allstate 43,000 2,355,540 Aon 64,700 2,562,766 Chubb 23,800 2,278,850 Hartford Financial Services Group 27,100 2,232,498 Huntington Bancshares 97,900 2,354,495 Morgan Stanley 41,000 2,446,060 Wachovia 44,000 2,467,080 Washington Mutual 53,400 2,280,180 --------- 18,977,469 Health Care - 9.98% Abbott Laboratories 59,000 2,606,620 Baxter International 60,900 2,305,065 Bristol-Myers Squibb 101,200 2,337,720 Merck 73,100 2,548,266 Pfizer 99,700 2,611,142 Wyeth 50,500 2,514,900 --------- 14,923,713 Health Care REITs - 0.23% #Medical Properties Trust 144A 35,000 350,000 ------- 350,000 Hotel REITs - 0.76% Strategic Hotel Capital 52,700 1,138,320 --------- 1,138,320 Industrial REITs - 2.07% AMB Property 57,800 3,100,970 --------- 3,100,970 Industrials - 3.64% *+Foster Wheeler 6,960 334,074 Union Pacific 28,900 2,559,095 Waste Management 76,600 2,547,716 --------- 5,440,885 Information Technology - 4.91% Hewlett-Packard 81,200 2,664,172 International Business Machines 28,700 2,302,888 +Xerox 158,700 2,364,630 --------- 7,331,690 Mall REITs - 2.63% General Growth Properties 6 302 Simon Property Group 47,300 3,924,481 --------- 3,924,783 Manufactured Housing REITs - 0.40% Equity Lifestyle Properties 12,600 600,894 ------- 600,894 Materials - 1.47% duPont (E.I.) deNemours 54,700 2,201,128 ---------
2,201,128 Mortgage REITs - 9.30% American Home Mortgage Investment 89,900 2,562,150 *Gramercy Capital 79,100 2,077,166 *Friedman Billings Ramsey Group Class A 87,195 868,462 JER Investors Trust 110,600 1,933,288 +#KKR Financial 144A 91,300 2,088,031 *MortgageIT Holdings 187,000 2,178,550 +#Peoples Choice 144A 176,700 971,850 *Saxon Capital 122,400 1,217,880 --------- 13,897,377 Office REITs - 5.76% American Financial Realty Trust 109,700 1,296,654 *Duke Realty 76,600 2,688,660 Brandywine Realty Trust 46,348 1,361,241 *Reckson Associates Realty 79,820 3,264,638 --------- 8,611,193 Shopping Center REITs - 0.38% *Ramco-Gershenson Properties 19,400 563,764 ------- 563,764 Telecommunications - 3.49% AT&T 94,900 2,618,291 Verizon Communications 77,200 2,601,640 --------- 5,219,931 Utilities - 1.71% +Mirant 8,223 202,286 Progress Energy 52,900 2,347,702 --------- 2,549,988 Total Common Stock (cost $98,157,248) 110,533,712 =========== Convertible Preferred Stock- 4.65% Banking, Finance & Insurance - 1.49% Aspen Insurance 5.625% exercise price $29.28, expiration date 12/31/49 8,800 442,200 Chubb 7.00% exercise price $71.40, expiration date 8/16/06 15,000 509,700 oCitigroup Funding 5.18% exercise price $29.50, expiration date 9/27/08 17,000 543,830 *E Trade Financial 6.125% exercise price $21.82, expiration date 11/18/08 9,000 300,375 *Lehman Brothers Holdings 6.25% exercise price $54.24, expiration date 10/15/07 16,000 426,000 ------- 2,222,105 Basic Materials - 0.37% Huntsman 5.00% exercise price $28.29, expiration date 2/16/08 12,400 556,450 ------- 556,450 Cable, Media & Publishing - 0.24% #Interpublic 5.25% 144A exercise price $13.66, expiration date 12/31/49 360 354,150 ------- 354,150 Consumer Products - 0.33% Newell Financial Trust I 5.25% exercise price $50.69, expiration date 12/1/27 11,630 494,275 ------- 494,275 Energy - 0.59% Chesapeake 4.50% exercise price $44.17, expiration date 12/31/49 5,800 528,525 El Paso Energy Capital Trust 4.75% exercise price $41.59, expiration date 3/31/28 9,250 346,875 ------- 875,400 Environmental Services - 0.58% Allied Waste Industries 6.25% exercise price $10.13, expiration date 4/1/06 16,200 868,806 ------- 868,806 Food, Beverage & Tobacco - 0.36% Constellation Brands 5.75% exercise price $17.08, expiration date 9/1/06 13,800 539,580 ------- 539,580 Utilities - 0.69% Entergy 7.625% exercise price $87.64, expiration date 2/17/09 9,000 468,000 *NRG Energy 5.75% exercise price $60.45, expiration date 3/16/09 2,450 571,463 ------- 1,039,463 Total Convertible Preferred Stock (cost $6,848,493) 6,950,229 ========= Preferred Stock- 5.71% Leisure, Lodging & Entertainment - 1.01% Red Lion Hotels 9.50% 58,000 1,510,320 --------- 1,510,320 Real Estate - 4.70% Equity Inns Series B 8.75% 35,700 944,265 LaSalle Hotel Properties 10.25% 113,200 2,965,840 Ramco-Gershenson Properties 9.50% 40,000 1,054,200 SL Green Realty 7.625% 80,000 2,052,504 --------- 7,016,809 Total Preferred Stock (cost $8,172,500) 8,527,129 =========
Principal Amount Commercial Mortgage-Backed Securities- 0.20% #First Union National Bank Commercial Mortgage Series 2001-C2 L 144A 6.46% 1/12/43 $300,000 296,331 ------- Total Commercial Mortgage-Backed Securities (cost $304,488) 296,331 ======= Convertible Bonds- 7.33% Aerospace & Defense - 0.55% #AAR 144A 1.75% 2/1/26 exercise price $29.43, expiration date 2/1/26 260,000 274,625 EDO 4.00% 11/15/25 exercise price $34.19, expiration date 11/15/25 235,000 252,919 #L-3 Communications 144A 3.00% 8/1/35 exercise price $102.31, expiration date 8/1/35 290,000 299,062 826,606 Cable, Media & Publishing - 0.49% #Charter Communications 144A 5.875% 11/16/09 exercise price $2.42, expiration date 11/16/09 165,000 119,006 #Playboy Enterprises 144A 3.00% 3/15/25 exercise price $17.02, expiration date 3/15/25 600,000 607,500 726,506 Capital Goods - Manufacturing - 0.19% #Tyco International Group 144A 2.75% 1/15/18 exercise price $22.78, expiration date 1/15/18 250,000 284,375 284,375 Computers & Technology - 0.71% Hutchinson Technology 3.25% 1/15/26 exercise price $36.43, expiration date 1/15/26 340,000 334,475 #Intel 144A 2.95% 12/15/35 exercise price $31.53, expiration date 12/15/35 255,000 226,631 #Sybase 144A 1.75% 2/22/25 exercise price $25.22, expiration date 2/22/25 500,000 507,500 ------- 1,068,606 Energy - 0.99% Halliburton 3.125% 7/15/23 exercise price $37.65, expiration date 7/15/23 250,000 465,938 Pride International 3.25% 5/1/33 exercise price $25.70, expiration date 5/1/33 350,000 463,750 Schlumberger 2.125% 6/1/23 exercise price $80.00, expiration date 6/1/23 360,000 549,000 ------- 1,478,688 Health Care & Pharmaceuticals - 1.00% CV Therapeutics 3.25% 8/16/13 exercise price $27.00, expiration date 8/16/13 125,000 152,031 Encysive Pharmaceuticals 2.50% 3/15/12 exercise price $13.95, expiration date 3/15/12 630,000 574,087 #Nektar Therapeutics 144A 3.25% 9/28/12 exercise price $21.52, expiration date 9/28/12 350,000 414,750 Teva Pharmaceutical Finance 0.25% 2/1/26 exercise price $47.16, expiration date 2/1/26 345,000 352,763 1,493,631 Leisure, Lodging & Entertainment - 0.45% #Regal Entertainment Group 144A 3.75% 5/15/08 exercise price $15.19, expiration date 5/15/08 550,000 679,250 ------- 679,250 Real Estate - 0.77% MeriStar Hospitality 9.50% 4/1/10 exercise price $10.18, expiration date 4/1/10 1,100,000 1,149,500 --------- 1,149,500 Retail - 0.92% *Dick's Sporting Goods 1.606% 2/18/24 exercise price $58.13, expiration date 2/18/24 380,000 286,900 Lowe's Companies 0.861% 10/19/21 exercise price $50.03, expiration date 10/19/21 280,000 332,150 #Saks 144A 2.00% 3/15/24 exercise price $18.69, expiration date 3/15/24 425,000 465,906 #United Auto Group 144A 3.50% 4/1/26 exercise price $47.39, expiration date 4/1/26 260,000 284,050 ------- 1,369,006 Technology - 0.36% #Mercury Interactive 144A 4.75% 7/1/07 exercise price $111.25, expiration date 7/1/07 550,000 538,313 538,313 Telecommunications - 0.15% Qwest Communications International 3.50% 11/15/25 exercise price $5.90, expiration date 11/15/25 180,000 227,025 ------- 227,025 Transportation - 0.12% *#ExpressJet Holdings 144A 4.25% 8/1/23 exercise price $18.20, expiration date 8/1/23 200,000 174,750 174,750 Utilities - 0.63% #CenterPoint Energy 144A 3.75% 5/15/23 exercise price $11.44, expiration date 5/15/23 800,000 942,000 942,000 Total Convertible Bonds (cost $10,356,999) 10,958,256 ========== Corporate Bonds- 31.08% Banking - 0.17% Western Financial 9.625% 5/15/12 225,000 253,688 ------- 253,688 Basic Industry - 4.13% Abitibi-Consolidated 6.95% 12/15/06 20,000 20,275 *7.875% 8/1/09 95,000 93,338 *AK Steel 7.875% 2/15/09 340,000 332,350 Bowater 9.50% 10/15/12 575,000 600,874 Georgia-Pacific 8.875% 5/15/31 75,000 79,125 9.50% 12/1/11 300,000 329,250
Gold Kist 10.25% 3/15/14 205,000 227,550 *Huntsman International 10.125% 7/1/09 100,000 103,000 #Ineos Group Holdings 144A 8.50% 2/15/16 475,000 467,875 Lyondell Chemical 10.50% 6/1/13 45,000 50,513 *#Nell AF Sarl 144A 8.375% 8/15/15 250,000 252,500 NewPage 10.00% 5/1/12 350,000 367,500 Norske Skog 8.625% 6/15/11 330,000 328,350 #Port Townsend Paper 144A 12.00% 4/15/11 450,000 362,250 Potlatch 13.00% 12/1/09 475,000 561,480 *Rhodia 8.875% 6/1/11 98,000 102,165 10.25% 6/1/10 110,000 124,300 Smurfit Capital Funding 7.50% 11/20/25 595,000 550,375 *++Solutia 6.72% 10/15/37 705,000 525,225 Tembec Industries 8.625% 6/30/09 790,000 442,400 Witco 6.875% 2/1/26 250,000 242,500 ------- 6,163,195 Brokerage - 0.81% *E Trade Financial 8.00% 6/15/11 505,000 534,038 LaBranche & Company 9.50% 5/15/09 300,000 322,500 11.00% 5/15/12 320,000 357,600 ------- 1,214,138 Capital Goods - 1.83% *Armor Holdings 8.25% 8/15/13 225,000 241,313 #Case New Holland 144A 7.125% 3/1/14 75,000 75,563 *Graham Packaging 9.875% 10/15/14 390,000 397,800 Interface 10.375% 2/1/10 290,000 318,275 Interline Brands 11.50% 5/15/11 576,000 642,239 Intertape Polymer 8.50% 8/1/14 405,000 400,950 (TM)Mueller Holdings 14.75% 4/15/14 285,000 232,275 *#Panolam Industrial 144A 10.75% 10/1/13 170,000 164,050 Trimas 9.875% 6/15/12 305,000 269,925 ------- 2,742,390 Consumer Cyclical - 2.12% *Accuride 8.50% 2/1/15 250,000 250,000 Carrols 9.00% 1/15/13 125,000 127,188 General Motors Acceptance Corporation 6.875% 9/15/11 385,000 345,101 *8.00% 11/1/31 250,000 228,895 *Landry's Restaurant 7.50% 12/15/14 315,000 306,338 *Metaldyne 10.00% 11/1/13 405,000 372,599 *#Neiman Marcus 144A 9.00% 10/15/15 285,000 302,456 O'Charleys 9.00% 11/1/13 225,000 232,313 *#Uno Restaurant 144A 10.00% 2/15/11 275,000 232,375 ++Venture Holdings 12.00% 6/1/09 425,000 799 *Visteon 7.00% 3/10/14 75,000 56,063 8.25% 8/1/10 230,000 184,000 Warnaco 8.875% 6/15/13 500,000 537,499 ------- 3,175,626 Consumer Non-Cyclical - 2.43% Biovail 7.875% 4/1/10 565,000 584,774 *Constellation Brands 8.125% 1/15/12 124,000 130,510 Cott Beverages 8.00% 12/15/11 250,000 258,125 #Doane Pet Care 144A 10.625% 11/15/15 195,000 207,188 #Le-Natures 144A 10.00% 6/15/13 375,000 395,625 National Beef Packing 10.50% 8/1/11 385,000 393,663 Pilgrim's Pride 9.625% 9/15/11 320,000 340,400 Playtex Products 9.375% 6/1/11 350,000 368,375 Swift & Co. 12.50% 1/1/10 125,000 124,375 True Temper Sports 8.375% 9/15/11 420,000 380,100 #Warner Chilcott 144A 9.25% 2/1/15 455,000 449,313 ------- 3,632,448 Energy - 1.91% Bluewater Finance 10.25% 2/15/12 280,000 303,100 Compton Petroleum Finance 7.625% 12/1/13 135,000 138,713 #Copano Energy 144A 8.125% 3/1/16 100,000 104,500 El Paso Natural Gas 7.625% 8/1/10 200,000 211,459 El Paso Production Holding 7.75% 6/1/13 350,000 370,999 #Hilcorp Energy 144A *7.75% 11/1/15 110,000 111,925 10.50% 9/1/10 100,000 111,500 Inergy Finance 6.875% 12/15/14 250,000 239,375 #144A 8.25% 3/1/16 75,000 76,875
oSecunda International 12.60% 9/1/12 260,000 279,500 Tennessee Gas Pipeline 8.375% 6/15/32 350,000 423,362 #VeraSun Energy 144A 9.875% 12/15/12 230,000 246,100 Whiting Petroleum 7.25% 5/1/13 235,000 239,113 ------- 2,856,521 Financials - 0.15% FINOVA Group 7.50% 11/15/09 673,750 222,338 ------- 222,338 Media - 4.01% oAdelphia Communications 8.125% 7/15/06 525,000 341,250 #CCH I 144A 11.00% 10/1/15 554,000 468,823 Cenveo 9.625% 3/15/12 190,000 205,200 Charter Communications Holdings *11.125% 1/15/11 400,000 216,000 (TM)13.50% 1/15/11 450,000 272,250 o#Cleveland Unlimited 144A 12.73% 12/15/10 150,000 154,500 CSC Holdings 8.125% 8/15/09 95,000 98,444 *10.50% 5/15/16 495,000 527,175 Dex Media East 12.125% 11/15/12 205,000 237,544 Insight Midwest 10.50% 11/1/10 725,000 767,593 Lodgenet Entertainment 9.50% 6/15/13 505,000 547,924 *Mediacom Capital 9.50% 1/15/13 515,000 517,575 #RH Donnelley 144A 8.875% 1/15/16 225,000 235,969 Sheridan Acquisition 10.25% 8/15/11 225,000 234,281 *Sirius Satellite 9.625% 8/1/13 380,000 374,300 Vertis 10.875% 6/15/09 185,000 182,688 Warner Music Group 7.375% 4/15/14 230,000 231,725 XM Satellite Radio 12.00% 6/15/10 338,000 379,405 ------- 5,992,646 Real Estate - 0.84% American Real Estate Partners 8.125% 6/1/12 365,000 381,060 BF Saul REIT 7.50% 3/1/14 400,000 412,000 Tanger Properties 9.125% 2/15/08 430,000 456,236 ------- 1,249,296 Services Cyclical - 4.02% *Adesa 7.625% 6/15/12 295,000 300,900 *#CCM Merger 144A 8.00% 8/1/13 335,000 335,000 Corrections Corporation of America 7.50% 5/1/11 390,000 405,113 *Foster Wheeler 10.359% 9/15/11 67,000 74,370 FTI Consulting 7.625% 6/15/13 105,000 110,513 #Galaxy Entertainment Finance 144A 9.875% 12/15/12 400,000 416,000 Gaylord Entertainment 8.00% 11/15/13 180,000 189,225 (TM)H-Lines Finance Holdings 11.00% 4/1/13 491,000 409,985 #Hertz 144A 8.875% 1/1/14 150,000 157,500 10.50% 1/1/16 65,000 70,363 Horizon Lines 9.00% 11/1/12 176,000 187,000 Kansas City Southern Railway 9.50% 10/1/08 400,000 434,000 #Knowledge Learning 144A 7.75% 2/1/15 315,000 302,400 Mandalay Resort Group 10.25% 8/1/07 100,000 106,625 OMI 7.625% 12/1/13 500,000 514,999 Penn National Gaming 8.875% 3/15/10 400,000 417,752 Royal Caribbean Cruises 7.25% 3/15/18 95,000 102,864 Seabulk International 9.50% 8/15/13 250,000 277,813 *Stena 9.625% 12/1/12 335,000 366,825 (TM)Town Sports International 11.00% 2/1/14 330,000 239,250 Wheeling Island Gaming 10.125% 12/15/09 555,000 583,443 ------- 6,001,940 Services Non-cyclical - 2.54% #Accellent 144A 10.50% 12/1/13 235,000 247,925 Aleris International 9.00% 11/15/14 365,000 386,900 Allied Waste North America 9.25% 9/1/12 370,000 403,300 Casella Waste Systems 9.75% 2/1/13 485,000 520,163 #CRC Health 144A 10.75% 2/1/16 275,000 285,313 Geo Subordinate 11.00% 5/15/12 470,000 460,600 *HealthSouth 8.375% 10/1/11 75,000 84,750 10.75% 10/1/08 520,000 539,499 US Oncology 10.75% 8/15/14 435,000 482,850 *(TM)Vanguard Health 11.25% 10/1/15 515,000 383,675 ------- 3,794,975 Technology & Electronics - 0.56% *Magnachip Semiconductor 8.00% 12/15/14 450,000 436,500
*#Sunguard Data Systems 144A 10.25% 8/15/15 385,000 405,694 ------- 842,194 Telecommunications - 3.24% American Cellular 10.00% 8/1/11 245,000 267,663 *American Tower 7.125% 10/15/12 275,000 289,438 *#Centennial Communications 144A 10.00% 1/1/13 170,000 177,650 *Cincinnati Bell 8.375% 1/15/14 470,000 477,050 #Digicel Limited 144A 9.25% 9/1/12 275,000 290,125 (TM)Inmarsat Finance 10.375% 11/15/12 645,000 546,637 iPCS 11.50% 5/1/12 200,000 230,500 oIwo Escrow Company 8.35% 1/15/12 75,000 78,469 Qwest o7.741% 6/15/13 325,000 356,688 7.875% 9/1/11 125,000 134,375 Rural Cellular 9.875% 2/1/10 275,000 295,625 o#Rural Cellular 144A 10.43% 11/1/12 170,000 175,950 #Telcordia Technologies 144A 10.00% 3/15/13 565,000 522,625 *Triton Communications 9.375% 2/1/11 260,000 182,650 oUS LEC 12.716% 10/1/09 225,000 245,531 #Wind Acquisition 144A 10.75% 12/1/15 535,000 575,124 ------- 4,846,100 Utilities - 2.32% Avista 9.75% 6/1/08 200,000 216,889 ++#Calpine 144A 9.90% 7/15/07 337,238 315,739 #Dynegy Holdings 144A 10.125% 7/15/13 700,000 790,999 Elwood Energy 8.159% 7/5/26 166,450 179,697 Midwest Generation 8.30% 7/2/09 500,000 517,641 8.75% 5/1/34 275,000 301,813 Mirant Americas 8.30% 5/1/11 350,000 367,938 NRG Energy 7.25% 2/1/14 475,000 488,063 Orion Power 12.00% 5/1/10 250,000 287,500 =++#USGen New England 144A 7.459% 1/2/15 250,000 1,800 ----- 3,468,079 Total Corporate Bonds (cost $46,879,245) 46,455,574 ==========
Number of Shares Warrant- 0.00% +#Solutia 144A, exercise price $7.59, expiration date 7/15/09 650 - - Total Warrant (cost $55,294) - - Principal Amount Repurchase Agreements - 10.12% With BNP Paribas 4.50% 3/1/06 (dated 2/28/06, to be repurchased at $9,054,132, collateralized by $9,446,000 U.S.Treasury Bills due 8/24/06, market value $9,236,988) $9,053,000 9,053,000 With Cantor Fitzgerald 4.50% 3/1/06 (dated 2/28/06, to be repurchased at $2,023,253 collateralized by $2,072,000 U.S. Treasury Notes 4.50% due 2/15/09, market value $2,064,243) 2,023,000 2,023,000 With UBS Warburg 4.50% 3/1/06 (dated 2/28/06, to be repurchased at $4,047,506, collateralized by $4,077,000 U.S. Treasury Notes 4.625% due 5/15/06, market value $4,131,169) 4,047,000 4,047,000 ========= Total Repurchase Agreements (cost $15,123,000) 15,123,000 ========== Total Market Value of Securities Before Securities Lending Collateral - 133.04% (cost 185,897,267) 198,844,231 =========== Securities Lending Collateral**- 18.45% Short-Term Investments Fixed Rate Demand Notes - 2.29% Citigroup Global Markets 4.60% 3/1/06 3,072,422 3,072,422 Washington Mutual 4.54% 3/28/06 354,052 354,046 ----------- 3,426,468
oVariable Rate Demand Notes -16.16% American Honda Finance 4.57% 2/21/07 796,694 796,604 ANZ National 4.55% 4/2/07 177,043 177,023 Australia New Zealand 4.55% 4/2/07 885,152 885,115 Bank of America 4.57% 2/23/07 1,150,814 1,150,649 Bank of New York 4.54% 4/2/07 708,064 708,092 Bank of the West 4.55% 3/2/06 885,115 885,115 Bayerische Landesbank 4.59% 8/25/06 884,957 885,115 Bear Stearns 4.63% 8/31/06 1,062,138 1,062,138 Beta Finance 4.58% 4/18/06 885,106 885,093 Canadian Imperial Bank 4.55% 4/2/07 442,468 442,558 CDC Financial Products 4.66% 3/31/06 1,150,650 1,150,649 Citigroup Global Markets 4.63% 3/7/06 1,150,650 1,150,649 Commonwealth Bank Australia 4.54% 4/2/07 885,189 885,115 Credit Suisse First Boston 4.55% 4/18/06 955,939 955,924 Goldman Sachs 4.70% 2/28/07 1,150,650 1,150,649 Manufacturers & Traders 4.57% 9/26/06 885,167 884,990 Marshall & Ilsley Bank 4.55% 4/2/07 973,691 973,627 Merrill Lynch Mortgage Capital 4.66% 3/7/06 796,604 796,604 Morgan Stanley 4.74% 2/28/07 1,097,543 1,097,543 National Australia Bank 4.54% 3/7/07 1,027,155 1,026,733 National City Bank 4.53% 3/2/07 1,071,349 1,071,554 Nordea Bank Norge 4.55% 4/2/07 885,088 885,115 Procter & Gamble 4.46% 4/2/07 885,121 885,115 Royal Bank of Scotland 4.54% 4/2/07 885,096 885,115 Sigma Finance 4.58% 3/16/06 265,544 265,543 Societe Generale 4.54% 4/2/07 442,524 442,558 Toyota Motor Credit 4.55% 6/23/06 885,104 885,140 Wells Fargo 4.56% 4/2/07 884,958 885,115 ------- 24,155,240 Total Securities Lending Collateral (cost $27,581,708) 27,581,708 Total Market Value of Securities - 151.49% (cost $213,478,975) 226,425,939o Obligation to Return Securities Lending Collateral** - (18.45%) (27,581,708) Commercial Paper Payable (par $48,000,000) - (31.84%) (47,590,824) Liabilities Net of Receivables and Other Assets (See Notes) - (1.20%) (1,791,074) =========== Net Assets Applicable to 11,588,670 Shares Outstanding - 100.00% $149,462,333 ============
+Non-income producing security for the period ended February 28, 2006. oVariable rate security. The interest rate shown is the rate as of February 28, 2006. o(TM)Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective. =Security is being fair valued in accordance with the Fund's fair valuation policy. At February 28, 2006, the aggregate amount of fair valued securities equals $21,302, which represented 0.01% of the Fund's net assets. See Note 1 in "Notes." @Illiquid security. At February 28, 2006, the aggregate amount of illiquid securities equals $19,502, which represented 0.01% of the Fund's net assets. See Note 5 in "Notes." #Security exempt from registration under Rule 144A of the Securities Act of 1933. At February 28, 2006, the aggregate amount of Rule 144A securities equals $19,367,674, which represented 12.96% of the Fund's net assets. See Note 5 in "Notes." oSecurity is currently in default. The issue has missed the maturity date. Bankruptcy proceedings are in process to determine distribution of assets. The date listed is the estimate of when proceedings will be finalized. ++Non-income producing security. Security is currently in default. *Fully or partially on loan. **See Note 4 in "Notes." oIncludes $26,966,833 of securities loaned. Summary of Abbreviations: REIT - Real Estate Investment Trust ADR - American Depositary Receipts - -------------------------------------------------------------------------------- Notes 1. Significant Accounting Policies The following accounting policies are in accordance with U.S. generally accepted accounting principals and are consistently followed by Delaware Investments Dividend and Income Fund, Inc. (the "Fund"). Security Valuation - Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and the asked prices will be used. Long-term debt securities are valued by an independent pricing service and such prices are believed to reflect the fair value of such securities. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Securities lending collateral is valued at amortized cost, which approximates market value. Other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Fund's Board of Directors. In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures, or with respect to foreign securities, aftermarket trading or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events). Federal Income Taxes - The Fund intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements. Distributions - The Fund has a managed distribution policy. Under the policy, the Fund declares and pays monthly distributions and is managed with a goal of generating as much of the distribution as possible from ordinary income (net investment income and short-term capital gains). The balance of the distribution then comes from long-term capital gains and if necessary, a return of capital. The current annualized rate is $0.96 per share. The Fund continues to evaluate its monthly distribution in light of ongoing economic and market conditions and may change the amount of the monthly distributions in the future. Borrowings - The Fund issues short-term commercial paper at a discount from par. The discount is amortized as interest expense over the life of the commercial paper using the straight-line method (See Note 3). Repurchase Agreements - The Fund may invest in a pooled cash account along with other members of the Delaware Investments(R) Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Fund's custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings. Use of Estimates - 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 at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Other - Expenses common to all funds within the Delaware Investments(R) Family of Funds are allocated amongst the funds on the basis of average net assets. Management fees and some other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Discounts and premiums on non-convertible debt securities are amortized to interest income over the lives of the respective securities. Distributions received from investments in Real Estate Investment Trusts (REITs) are recorded as dividend income on ex-dividend date, subject to reclassification upon notice of the character of such distributions by the issuer. The Fund may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Fund in cash. There were no commission rebates during the period ended February 28, 2006. 2. Investments At February 28, 2006, the cost of investments for federal income tax purposes has been estimated since the final tax characteristics cannot be determined until fiscal year end. At February 28, 2006, the cost of investments and unrealized appreciation (depreciation) for the Fund was as follows: Cost of investments $213,476,178 ------------ Aggregate unrealized appreciation $ 19,965,392 Aggregate unrealized depreciation (7,015,631) Net unrealized appreciation $ 12,949,761 3. Commercial Paper As of February 28, 2006, $48,000,000 (par value) of commercial paper was outstanding with an amortized cost of $47,590,824. The weighted average discount rate of commercial paper outstanding at February 28, 2006, was 4.68%. The average daily balance of commercial paper outstanding during the period ended February 28, 2006, was $47,753,078 at a weighted discount rate of 4.31%. The maximum amount of commercial paper outstanding at any time during the period was $48,000,000. In conjunction with the issuance of the commercial paper, the Fund entered into a line of credit arrangement with J.P. Morgan Chase for $30,000,000. Interest on borrowings is based on market rates in effect at the time of borrowing. The commitment fee is computed at the rate of 0.12% per annum on the unused balance. During the period ended February 28, 2006, there were no borrowings under this arrangement. 4. Securities Lending The Fund, along with other funds in the Delaware Investments(R) Family of Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with J.P. Morgan Chase. Initial security loans made pursuant to the Lending Agreement are required to be secured by U.S. Treasury obligations and/or cash collateral not less than 102% of the market value of the securities issued in the United States. With respect to each loan, if the aggregate market value of the collateral held on any business day is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral not less than the applicable collateral requirements. Cash collateral received is invested in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top two tiers by Standard & Poor's Ratings Group or Moody's Investors Service, Inc. or repurchase agreements collateralized by such securities. However, in the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Fund, or at the discretion of the lending agent, replace the loaned securities. The Fund continues to record dividends on the securities loaned and is subject to change in value of the securities loaned that may occur during the term of the loan. The Fund has the right under the Lending Agreement to recover the securities from the borrower on demand. The security lending agent and the borrower retain a portion of the earnings from the collateral investments. The Fund records security lending income net of such allocation. At February 28, 2006, the market value of the securities on loan was $26,966,833, for which cash collateral was received and invested in accordance with the Lending Agreement. Such investments are presented on the Schedule of Investments under the caption "Securities Lending Collateral." 5. Credit and Market Risks The Fund may invest up to 10% of its total assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair the Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Fund's Board of Directors has delegated to Delaware Management Company the day-to-day functions of determining whether individual securities are liquid for purposes of the Fund's limitation on investments in illiquid assets. Rule 144A and illiquid securities have been denoted on the Schedule of Investments. The Fund invests in high-yield fixed income securities, which carry ratings of BB or lower by Standard & Poor's Ratings Group and/or Ba or lower by Moody's Investors Service, Inc. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities. The Fund invests in REITs and is subject to some of the risks associated with that industry. If the Fund holds real estate directly as a result of defaults or receives rental income directly from real estate holdings, its tax status as a regulated investment company may be jeopardized. There were no direct holdings during the period ended February 28, 2006. The Fund's REIT holdings are also affected by interest rate changes, particularly if the REITs it holds use floating rate debt to finance their ongoing operations. Item 2. Controls and Procedures. The registrant's principal executive officer and principal financial officer have evaluated the registrant's disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. There were no significant changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal quarter (the registrant's second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 3. Exhibits. File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)), exactly as set forth below: 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. DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC. JUDE T. DRISCOLL - ------------------------------------ By: Jude T. Driscoll Title: Chief Executive Officer Date: April 27, 2006 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. JUDE T. DRISCOLL - ------------------------------------ By: Jude T. Driscoll Title: Chief Executive Officer Date: April 27, 2006 MICHAEL P. BISHOF - ------------------------------------ By: Michael P. Bishof Title: Chief Financial Officer Date: April 27, 2006 EX-99.906CERT 2 ex99_1.txt CERTIFICATION I, Jude T. Driscoll, certify that: 1. I have reviewed this report on Form N-Q of Delaware Investments Dividend and Income Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. JUDE T. DRISCOLL - ------------------------------------ By: Jude T. Driscoll Title: Chief Executive Officer Date: April 27, 2006 CERTIFICATION I, Michael P. Bishof, certify that: 1. I have reviewed this report on Form N-Q of Delaware Investments Dividend and Income Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. MICHAEL P. BISHOF - ------------------------------------ By: Michael P. Bishof Title: Chief Financial Officer Date: April 27, 2006 -----END PRIVACY-ENHANCED MESSAGE-----