N-Q 1 e68274nq.htm QUARTERLY REPORT

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 811-4915

  DNP Select Income Fund Inc.  

(Exact name of registrant as specified in charter)

 200 South Wacker Drive, Suite 500, Chicago, Illinois   60606 

(Address of principal executive offices)              (Zip code)

Alan M. Meder Lawrence R. Hamilton, Esq.
DNP Select Income Fund Inc. Mayer Brown LLP
200 South Wacker Drive, Suite 500 71 South Wacker Drive
Chicago, Illinois 60606 Chicago, Illinois 60606

(Name and address of agents for service)

Registrant’s telephone number, including area code:  (312) 368-5510

Date of fiscal year end:  October 31

Date of reporting period:  January 31, 2016

 

 

Item 1. Schedule of Investments.
   
  See the Statement of Net Assets below.

 

 

 

DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS
JANUARY 31, 2016
(Unaudited)

 

      Value
Shares  Description  (Note 1)
       
 COMMON STOCKS & MLP INTERESTS--119.5%
         
   ELECTRIC, GAS AND WATER--81.8%     
 1,500,000  Alliant Energy Corp.(a)   $98,010,000 
 1,800,000  Ameren Corp.   80,856,000 
 900,000  American Electric Power Company, Inc.   54,873,000 
 1,000,000  American Water Works Co.   64,910,000 
 500,000  Atmos Energy Corp.   34,610,000 
 1,000,000  Black Hills Corp.   49,280,000 
 3,071,300  CenterPoint Energy Inc.(a)   54,884,131 
 2,500,000  CMS Energy Corp.(a)   97,200,000 
 1,100,000  Dominion Resources, Inc.(a)   79,387,000 
 1,000,000  DTE Energy Co.(a)(b)   85,010,000 
 1,800,000  Eversource Energy(a)(b)   96,840,000 
 2,500,000  Great Plains Energy Inc.(a)   69,700,000 
 500,000  The Laclede Group, Inc.   31,970,000 
 1,000,000  NextEra Energy, Inc.(a)(b)   111,710,000 
 1,900,000  NiSource Inc.   39,919,000 
 800,000  Northwest Natural Gas Co.   41,560,000 
 2,300,000  OGE Energy Corp.   60,329,000 
 1,000,000  Piedmont Natural Gas Co.   59,240,000 
 2,000,000  Portland General Electric Co.   77,740,000 
 1,800,000  Public Service Enterprise Group Inc.(a)(b)   74,340,000 
 1,900,000  Questar Corp.(a)(b)   38,741,000 
 900,000  Sempra Energy(a)(b)   85,275,000 
 1,500,000  Southern Co.(a)   73,380,000 
 1,500,000  Vectren Corp.(a)(b)   62,760,000 
 1,200,000  WEC Energy Group, Inc.(a)   66,276,000 
 2,000,000  Westar Energy, Inc.(a)(b)   87,120,000 
 1,000,000  WGL Holdings Inc.(a)   66,790,000 
 2,000,000  Xcel Energy Inc.(a)(b)   76,440,000 
       1,919,150,131 

 

 The accompanying notes are an integral part of this financial statement.

 

 

DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS—(Continued)
JANUARY 31, 2016
(Unaudited)

 

      Value
Shares  Description  (Note 1)
       
   OIL & GAS STORAGE, TRANSPORTATION AND PRODUCTION--22.3%
 350,000  Antero Midstream Partners LP   $6,951,000 
 2,500,000  Columbia Pipeline Group, Inc.   46,375,000 
 620,000  Columbia Pipeline Partners LP   9,486,000 
 357,000  DCP Midstream Partners LP   6,700,890 
 359,800  Dominion Midstream Partners, LP   10,038,420 
 684,000  Enbridge Energy Partners LP   12,489,840 
 1,600,000  Enbridge Inc. (Canada)(a)   55,360,000 
 1,040,532  Energy Transfer Equity LP   9,031,818 
 463,911  Energy Transfer Partners LP   13,796,713 
 880,000  EnLink Midstream Partners LP   10,551,200 
 766,000  Enterprise Products Partners LP   18,315,060 
 265,000  EQT GP Holdings, LP   5,724,000 
 251,000  EQT Midstream Partners LP   17,085,570 
 665,000  GasLog Partners LP (Marshall Islands)   9,509,500 
 407,000  Genesis Energy LP   11,566,940 
 1,900,526  Kinder Morgan Inc.(a)   31,263,653 
 400,090  Magellan Midstream Partners LP   25,697,781 
 432,185  MPLX LP   13,298,332 
 180,000  NuStar Energy LP   5,837,400 
 85,000  Phillips 66 Partners LP   4,817,800 
 475,610  Plains All American Pipeline LP   10,040,127 
 440,000  Plains GP Holdings, LP Class A   3,520,000 
 230,625  Shell Midstream Partners LP   8,201,025 
 1,915,000  Spectra Energy Corp.(a)   52,566,750 
 479,000  Sunoco Logistics Partners LP   10,667,330 
 380,000  Tallgrass Energy GP, LP   5,890,000 
 500,000  Tallgrass Energy Partners LP   17,255,000 
 90,000  Targa Resources Corp.   2,022,300 
 476,000  Targa Resources Partners LP   6,540,240 
 402,229  Tesoro Logistics LP   17,830,812 
 1,000,000  TransCanada Corp. (Canada)(a)   34,560,000 
 307,440  Valero Energy Partners LP   13,644,187 
 366,460  Westlake Chemical Partners LP   6,999,386 
 327,000  Western Gas Partners LP   10,689,630 
       524,323,704 

 

 The accompanying notes are an integral part of this financial statement.

 

 

DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS—(Continued)
JANUARY 31, 2016
(Unaudited)

 

      Value
Shares  Description  (Note 1)
       
   TELECOMMUNICATIONS--15.4%     
 1,708,260  AT&T Inc.(a)   $61,599,856 
 939,200  BCE Inc. (Canada)(a)   37,849,760 
 800,000  CenturyLink Inc.   20,336,000 
 800,000  Communications Sales & Leasing, Inc.   15,368,000 
 630,000  Crown Castle International Corp.   54,306,000 
 3,518,491  Frontier Communications Corp.(a)(b)   16,009,134 
 1,000,000  Orange SA (France)   17,669,871 
 1,094,800  Telus Corp. (Canada)   30,317,538 
 1,560,089  Verizon Communications Inc.(a)(b)   77,957,647 
 782,200  Vodafone Group Plc ADR (United Kingdom)   25,186,840 
 666,666  Windstream Holdings, Inc.   3,846,663 
       360,447,309 
   Total Common Stocks & MLP Interests (Cost $2,330,828,498)   2,803,921,144 
         
PREFERRED STOCKS--1.9%
         
   UTILITY--0.1%     
 50,000  Exelon Corp. 6 1/2%, due 6/01/17   2,151,000 
       2,151,000 
   NON-UTILITY--1.8%     
 600,000  Realty Income Corp. 6 5/8% Series F Perpetual   15,792,000 
 400,000  Regency Centers Corp. 6 5/8% Series 6 Perpetual   10,436,000 
 234,900  Vornado Realty Trust 6 5/8% Series G Perpetual   6,034,581 
 350,000  Vornado Realty Trust 6 5/8% Series I Perpetual   9,023,000 
       41,285,581 
   Total Preferred Stocks (Cost $41,036,811)   43,436,581 
         
         
         
Par Value        
         
BONDS--19.3%
         
   ELECTRIC, GAS AND WATER--10.4%     
$ 22,000,000  Arizona Public Service Co.     
   6 7/8%, due 8/01/36(a)(b)   29,126,306 
 10,450,000  Atmos Energy Corp.     
   8 1/2%, due 3/15/19(a)(b)   12,285,866 
 11,000,000  Cleveland Electric Illuminating Co.     
   8 7/8%, due 11/15/18(a)(b)   12,942,831 
 6,750,000  Commonwealth Edison Company     
   6.95%, due 7/15/18(a)   7,530,557 
 15,305,000  Consolidated Edison Co. of New York     
   7 1/8%, due 12/01/18(a)(b)   17,523,246 
 9,354,000  Dominion Resources, Inc.     
   6.40%, due 6/15/18(a)(b)    10,285,845 
 10,000,000  DPL Capital Trust II     
   8 1/8%, due 9/01/31   10,387,750 
 20,000,000  Entergy Texas Inc.     
   7 1/8%, due 2/01/19(a)(b)   22,758,200 
 14,376,000  Exelon Generation Co. LLC     
   6.20%, due 10/01/17(a)(b)   15,286,705 

 

The accompanying notes are an integral part of this financial statement.

 

 

 

DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS—(Continued)
JANUARY 31, 2016
(Unaudited)

 

      Value
Par Value  Description  (Note 1)
       
$ 10,000,000  Georgia Power Co.        
   5.70%, due 6/01/17(a)    $10,596,180  
 10,618,000  Indiana Michigan Power Co.        
   7.00%, due 3/15/19(a)(b)    12,140,568  
 5,000,000  Metropolitan Edison Co.        
   7.70%, due 1/15/19(a)    5,627,685  
 12,000,000  National Fuel Gas Co.        
   8 3/4%, due 5/01/19(a)    13,669,140  
 3,350,000  Nevada Power Co.        
   7 1/8%, due 3/15/19    3,834,299  
 10,345,000  Oncor Electric Delivery Co. LLC        
   7.00%, due 9/01/22(a)    12,572,579  
 14,000,000  Progress Energy Inc.        
   7.05%, due 3/15/19(a)(b)    15,992,312  
 5,130,000  Public Service New Mexico        
   7 1/2%, due 8/01/18(a)    5,754,890  
 15,169,000  Sempra Energy        
   6 1/2%, due 6/01/16(a)(b)    15,437,537  
 5,000,000  Sempra Energy        
   6.15%, due 6/15/18    5,415,425  
 5,000,000  Talen Energy Supply, LLC        
   6 1/2%, due 5/01/18    4,656,250  
        243,824,171  
            
   OIL & GAS STORAGE, TRANSPORTATION AND PRODUCTION--5.0%        
 6,488,000  Energy Transfer Partners        
   7.60%, due 2/01/24    6,274,181  
 8,850,000  Energy Transfer Partners        
   8 1/4%, due 11/15/29    9,718,689  
 5,000,000  Enterprise Products Operating LLC        
   6 1/2%, due 1/31/19    5,396,900  
 12,826,000  EQT Corp.        
   8 1/8%, due 6/01/19(a)(b)    13,865,214  
 8,030,000  Kinder Morgan, Inc.        
   6.85%, due 2/15/20    8,229,152  
 14,445,000  Magellan Midstream Partners, LP        
   6.40%, due 7/15/18(a)(b)     15,611,867  
 11,000,000  ONEOK, Inc.        
   6.00%, due 6/15/35    6,847,500  
 9,000,000  ONEOK Partners, LP        
   8 5/8%, due 3/01/19    9,650,034  
 12,940,000  Spectra Energy Capital, LLC        
   6.20%, due 4/15/18(a)    13,675,393  
 2,615,000  Spectra Energy Capital, LLC        
   6 3/4%, due 7/15/18    2,806,389  
 9,140,000  TransCanada PipeLines Ltd. (Canada)        
   7 1/8%, due 1/15/19(a)    10,130,493  
 14,380,000  Williams Partners, LP        
   7 1/4%, due 2/01/17(a)(b)    14,370,006  
        116,575,818  

 

The accompanying notes are an integral part of this financial statement.

 

 

DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS—(Continued)
JANUARY 31, 2016
(Unaudited)

 

      Value
Par Value  Description  (Note 1)
       
   TELECOMMUNICATIONS--3.5%        
$ 10,000,000  BellSouth Capital Funding Corp.        
   7 7/8%, due 2/15/30(a)(b)    $12,073,820  
 15,000,000  CenturyLink Inc.        
   6 7/8%, due 1/15/28    10,875,000  
5,900,000  Comcast Corp.        
   7.05%, due 3/15/33    7,525,480  
 15,000,000  Koninklijke KPN NV (Netherlands)        
   8 3/8%, due 10/01/30(a)(b)    19,557,780  
 5,000,000  TCI Communications Inc.        
   7 1/8%, due 2/15/28    6,661,920  
 15,500,000  Verizon Global Funding Corp.        
   7 3/4%, due 12/01/30    20,269,304  
 5,000,000  Vodafone Group Plc (United Kingdom)        
   7 7/8%, due 2/15/30    6,065,050  
        83,028,354  
   NON-UTILITY--0.4%        
 8,000,000  Dayton Hudson Corp.        
   9 7/8%, due 7/01/20(a)    10,367,808  
        10,367,808  
   Total Bonds (Cost $460,445,967)    453,796,151  
            
TOTAL INVESTMENTS--140.7% (Cost $2,832,311,276)    3,301,153,876  
Borrowings--(29.8)%     (700,000,000)  
Other assets less liabilities--(10.9)%     (255,039,864)  
NET ASSETS APPLICABLE TO COMMON STOCK--100.0%   $ 2,346,114,012  

 

The accompanying notes are an integral part of this financial statement.

 

 

DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS—(Continued)
JANUARY 31, 2016
(Unaudited)

 

(a) All or a portion of this security has been pledged as collateral for borrowings and made available for loan.

(b) All or a portion of this security has been loaned.

The percentage shown for each investment category is the total value of that category as a percentage of the net assets applicable to common stock of the Fund.

Note 1. Investment Valuation

The Fund's investments are carried at fair value which is defined as the price that the Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. The three-tier hierarchy of inputs established to classify fair value measurements for disclosure purposes is summarized in the three broad levels listed below.

Level 1 - quoted prices in active markets for identical securities

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.)

Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. For more information about the Fund's policy regarding valuation of investments and other significant accounting policies, please refer to the Fund's most recent financial statements contained in its annual report. The following is a summary of the inputs used to value each of the Fund's investments at January 31, 2016:    

   Level 1  Level 2
Common stocks & MLP interests  $2,803,921,144    - 
Preferred stocks   43,436,581    - 
Bonds   -   $453,796,151 
 Total  $2,847,357,725   $453,796,151 

 

There were no Level 3 priced securities held and there were no transfers between Level 1 and Level 2  related to securities held at January 31, 2016.

 

 

DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS—(Continued)
JANUARY 31, 2016
(Unaudited)

 

Note 2. Federal Tax Cost

At October 31, 2015, the Fund's most recent fiscal tax year end, the federal tax cost of investments and aggregate gross unrealized appreciation (depreciation) were as follows:

Federal Tax Cost Unrealized
Appreciation
Unrealized
Depreciation
Net Unrealized
Appreciation
$2,871,071,571 $720,435,867 $(191,845,288) $528,590,579

 

The difference between the book basis and tax basis of unrealized appreciation (depreciation) and cost of investments is primarily attributable to MLP earnings and basis adjustments, the tax deferral of wash sale losses, the accretion of market discount and amortization of premiums and alternative tax treatment of certain securities.

Other information regarding the Fund is available on the Fund's website at www.dnpselectincome.com or the Securities and Exchange Commission's website at www.sec.gov.    

 

 

 

 

Item 2. Controls and Procedures.

 

(a)The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective, based on an evaluation of those controls and procedures made as of a date within 90 days of the filing date of this report as required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934.

 

(b)There has been no change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) 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.

 

Exhibit 99.CERT Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002

 

 

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.

(Registrant) DNP SELECT INCOME FUND INC.  
By (Signature and Title) /s/ Nathan I. Partain  
  Nathan I. Partain  
  President and Chief Executive Officer  
  (Principal Executive Officer)  
Date March 18, 2016  

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 (Signature and Title) /s/ Nathan I. Partain  
  Nathan I. Partain  
  President and Chief Executive Officer  
  (Principal Executive Officer)  
Date March 18, 2016  
By (Signature and Title)  /s/ Alan M. Meder  
  Alan M. Meder  
  Treasurer and Assistant Secretary  
  (Principal Financial and Accounting Officer)  
Date March 18, 2016