N-Q 1 tm_mainpart-nq.htm MAIN PART
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
 

FORM N-Q
 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY
 

Investment Company Act file number 811-9789
 

Waddell & Reed Advisors Tax-Managed Equity Fund, Inc.

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(Exact name of registrant as specified in charter)
 
 

6300 Lamar Avenue, Overland Park, Kansas           66202

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(Address of principal executive offices)           (Zip code)
 
 

Kristen A. Richards

6300 Lamar Avenue

Overland Park, Kansas 66202

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(Name and address of agent for service)
 

Registrant's telephone number, including area code: 913-236-2000
 

Date of fiscal year end: June 30
 

Date of reporting period: September 30, 2005
 

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (ss. 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under that Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.
 

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507.
 



ITEM 1. SCHEDULE OF INVESTMENTS.

The Investments of Waddell & Reed Advisors Tax-Managed Equity Fund        
September 30, 2005
       
         
COMMON STOCKS  
Shares
 
Value
         
Air Transportation - 1.00%        
Southwest Airlines Co.
 
46,550
  $
691,268
         
Aircraft - 2.96%        
Boeing Company (The)
 
18,000
 
1,223,100
United Technologies Corporation
 
16,000
 
829,440
       

2,052,540
         
Aluminum - 0.35%        
Alcoa Incorporated
 
10,000
 
244,200
         
Banks - 1.32%        
Bank of America Corporation
 
6,000
 
252,600
Citigroup Inc.
 
14,550
 
662,316
       

914,916
         
Broadcasting - 1.27%        
Viacom Inc., Class B
 
17,000
 
561,170
XM Satellite Radio Holdings Inc., Class A*
 
9,000
 
323,145
       

884,315
         
Business Equipment and Services - 1.39%        
Infosys Technologies Limited (A)
 
13,000
 
966,160
         
Capital Equipment - 0.13%        
Dresser-Rand Group Inc.*
 
3,550
 
87,436
         
Chemicals - Petroleum and Inorganic - 0.72%        
Monsanto Company
 
8,000
 
502,000
         
Communications Equipment - 1.65%        
Cisco Systems, Inc.*
 
55,000
 
985,875
QUALCOMM Incorporated
 
3,500
 
156,397
       

1,142,272
         
Computers - Micro - 3.28%        
Apple Computer, Inc.*
 
14,000
 
750,610
Dell Inc.*
 
44,650
 
1,526,807
       

2,277,417
         
Computers - Peripherals - 3.93%        
EMC Corporation*
 
15,000
 
194,100
Microsoft Corporation
 
75,000
 
1,929,375
SAP Aktiengesellschaft, ADR
 
14,000
 
606,620
       

2,730,095
         
Defense - 1.72%        
General Dynamics Corporation
 
10,000
 
1,195,500
         
Electronic Components - 2.22%        
Analog Devices, Inc.
 
13,900
 
516,246
Intel Corporation
 
32,000
 
788,640
Texas Instruments Incorporated
 
7,000
 
237,300
       

1,542,186
         
Electronic Instruments - 0.96%        
KLA-Tencor Corporation
 
8,000
 
390,040
Novellus Systems, Inc.
 
11,000
 
275,935
       

665,975
         
Finance Companies - 2.06%        
Fannie Mae
 
8,000
 
358,560
SLM Corporation
 
20,000
 
1,072,800
       

1,431,360
         
Health Care - Drugs - 10.04%        
Amgen Inc.*
 
19,000
 
1,513,350
Genentech, Inc.*
 
13,000
 
1,094,730
Gilead Sciences, Inc. (A)*
 
30,000
 
1,461,300
MedImmune, Inc.*
 
16,000
 
538,080
Pfizer Inc.
 
30,000
 
749,100
Schering-Plough Corporation
 
37,000
 
778,850
Teva Pharmaceutical Industries Limited, ADR
 
25,000
 
835,250
       

6,970,660
         
Health Care - General - 5.47%        
Da Vita Inc.*
 
5,000
 
230,350
Johnson & Johnson
 
15,000
 
949,200
Schein (Henry), Inc.*
  
19,000
  
809,305
St. Jude Medical, Inc.*
 
21,000
 
982,800
Zimmer Holdings, Inc.*
 
12,000
 
826,680
       

3,798,335
         
Hospital Supply and Management - 10.72%        
Aetna Inc.
 
20,000
 
1,722,800
Caremark Rx, Inc.*
 
18,000
 
898,740
HCA Inc.
 
4,065
 
194,795
Health Net, Inc.*
 
13,000
 
615,160
PSS World Medical, Inc.*
 
25,000
 
332,500
PacifiCare Health Systems, Inc.*
 
19,000
 
1,515,820
Triad Hospitals, Inc.*
 
16,000
 
724,320
WellPoint, Inc.*
 
19,000
 
1,440,580
       

7,444,715
         
Hotels and Gaming - 0.84%        
Hilton Hotels Corporation
 
26,000
 
580,320
         
Household - General Products - 1.76%        
Colgate-Palmolive Company
 
13,000
 
686,270
Procter & Gamble Company (The)
 
9,000
 
535,140
       

1,221,410
         
Insurance - Property and Casualty - 0.98%        
Berkshire Hathaway Inc., Class B*
 
250
 
682,750
         
Leisure Time Industry - 1.06%        
Royal Caribbean Cruises Ltd.
 
17,000
 
734,400
         
Multiple Industry - 7.57%        
China Netcom Group Corporation (Hong Kong) Limited, ADR
 
13,000
 
446,420
General Electric Company
 
55,000
 
1,851,850
Google Inc., Class A*
 
7,000
 
2,212,840
Huntsman Corporation*
 
13,000
 
254,150
Las Vegas Sands, Inc.*
 
15,000
 
493,650
       

5,258,910
         
Petroleum - International - 9.57%        
Anadarko Petroleum Corporation
 
13,600
 
1,302,200
Apache Corporation
 
27,200
 
2,045,984
Burlington Resources Inc.
 
23,300
 
1,894,756
Exxon Mobil Corporation
 
22,000
 
1,397,880
       

6,640,820
         
Petroleum - Services - 6.62%        
Nabors Industries Ltd.*
 
14,550
 
1,045,127
Patterson-UTI Energy, Inc.
 
50,000
 
1,802,250
Schlumberger Limited
 
12,000
 
1,012,560
Transocean Inc.*
 
12,000
 
735,720
       

4,595,657
         
Railroad - 1.12%        
Burlington Northern Santa Fe Corporation
 
13,000
 
777,400
         
Restaurants - 0.96%        
Applebee's International, Inc.
 
7,000
 
144,795
Cheesecake Factory Incorporated (The)*
 
11,000
 
343,475
P.F. Chang's China Bistro, Inc.*
 
4,000
 
179,260
       

667,530
         
Retail - Food Stores - 3.44%        
CVS Corporation
 
42,000
 
1,218,420
Walgreen Co.
 
27,000
 
1,173,150
       

2,391,570
         
Retail - General Merchandise - 1.93%        
Target Corporation
 
3,000
 
155,790
Wal-Mart Stores, Inc.
 
27,000
 
1,183,140
       

1,338,930
         
Security and Commodity Brokers - 3.08%        
Goldman Sachs Group, Inc. (The)
 
9,000
 
1,094,220
Merrill Lynch & Co., Inc.
 
6,000
 
368,100
Morgan Stanley
 
12,600
 
679,644
       

2,141,964
         
Timesharing and Software - 4.99%        
eBay Inc.*
 
66,000
 
2,718,870
Yahoo! Inc.*
 
22,000
 
745,030
       

3,463,900
         
Tobacco - 1.91%        
Altria Group, Inc.
 
18,000
 
1,326,780
         
Utilities - Telephone - 1.21%        
SBC Communications Inc.
 
35,000
 
838,950
         
TOTAL COMMON STOCKS - 98.23%       $
68,202,641
(Cost: $52,374,478)
       
         
   
Number of
   
PUT OPTIONS - 0.03%  
Contracts
   
         
CVS Corporation, October 27.5, Expires 10-22-05
 
420
 
8,400
Walgreen Co., October 42.5, Expires 10-22-05
 
270
 
9,450
(Cost: $51,505)
     
$
17,850
   
Principal
   
   
Amount in
   
SHORT-TERM SECURITY - 1.74%  
Thousands
   
         
Publishing        
Tribune Co.,
        
      3.91%, 10-3-05  
$1,208
  $
1,207,738
(Cost: $1,207,738)
       
         
TOTAL INVESTMENT SECURITIES - 100.00%       $
69,428,229
(Cost: $53,633,721)
       
         

Notes to Schedule of Investments            
*No dividends were paid during the preceding 12 months.  
(A)Securities serve as cover for the following written call options outstanding at September 30, 2005:
 
             
Underlying
Security
Contracts
Subject
to Call
Expiration Month/
Exercise Price
 
Premium Received
Market
Value
 
 
Gilead Sciences, Inc.
150
November/50
 
$14,054
$21,000
 
Infosys Technologies Limited
125
October/75
 
15,238
25,000
 
 
 
 
 
$29,292

$46,000
 
 
 
 
 
 
 
 

ITEM 2. CONTROLS AND PROCEDURES.
(a) The Registrant's Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, have concluded that such controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective and adequately designed to ensure that information required to be disclosed by the Registrant in its reports that it files or submits is accumulated and communicated to the Registrant's management, including the Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
   
(b) There were no significant changes in the registrant's internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

 

ITEM 3. EXHIBITS.
  A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)).

 

Attached hereto as Exhibit 99.CERT.


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.

Waddell & Reed Advisors Tax-Managed Equity Fund, Inc.
(Registrant)

By

 /s/Kristen A. Richards
 

Kristen A. Richards, Vice President and Secretary

 

Date: November 29, 2005

 

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/Henry J. Herrmann
 

Henry J. Herrmann, President and Principal Executive Officer

 

Date: November 29, 2005

 

By

 /s/Theodore W. Howard
 

Theodore W. Howard, Treasurer and Principal Financial Officer

 

Date: November 29, 2005