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: July 31, 2015
| Item 1. | Schedule of Investments. |
| See the Statement of Net Assets below. |
DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS
JULY 31, 2015
(Unaudited)
| Value | |||
| Shares | Description | (Note 1) | |
| COMMON STOCKS & MLP INTERESTS--117.0% | |||
| ELECTRIC, GAS AND WATER--71.7% | |||
| 1,500,000 | Alliant Energy Corp.(a) | $92,265,000 | |
| 1,800,000 | Ameren Corp. | 73,944,000 | |
| 900,000 | American Electric Power Company, Inc. | 50,913,000 | |
| 1,000,000 | American Water Works Co. | 51,910,000 | |
| 500,000 | Atmos Energy Corp. | 27,650,000 | |
| 3,071,300 | CenterPoint Energy Inc.(a) | 59,398,942 | |
| 2,500,000 | CMS Energy Corp.(a) | 85,650,000 | |
| 1,100,000 | Dominion Resources, Inc.(a)(b) | 78,870,000 | |
| 1,000,000 | DTE Energy Co.(a)(b) | 80,460,000 | |
| 1,000,000 | Duke Energy Corp. | 74,220,000 | |
| 2,000,000 | Eversource Energy(a)(b) | 99,440,000 | |
| 2,500,000 | Great Plains Energy Inc.(a)(b) | 65,275,000 | |
| 500,000 | The Laclede Group, Inc. | 27,055,000 | |
| 1,000,000 | NextEra Energy, Inc.(a)(b) | 105,200,000 | |
| 1,900,000 | NiSource Inc. | 33,174,000 | |
| 800,000 | Northwest Natural Gas Co. | 34,632,000 | |
| 2,300,000 | OGE Energy Corp. | 68,448,000 | |
| 1,000,000 | Piedmont Natural Gas Co. | 38,010,000 | |
| 2,000,000 | Portland General Electric Co. | 72,020,000 | |
| 1,800,000 | Public Service Enterprise Group Inc.(a)(b) | 75,006,000 | |
| 1,900,000 | Questar Corp.(a)(b) | 42,066,000 | |
| 900,000 | Sempra Energy(a) | 91,602,000 | |
| 1,500,000 | Southern Co.(a)(b) | 67,095,000 | |
| 1,500,000 | Vectren Corp.(a)(b) | 63,150,000 | |
| 800,000 | WEC Energy Group, Inc. | 39,200,000 | |
| 2,000,000 | Westar Energy, Inc.(a)(b) | 75,300,000 | |
| 1,000,000 | WGL Holdings Inc. | 55,900,000 | |
| 2,400,000 | Xcel Energy Inc.(a)(b) | 83,208,000 | |
| 1,811,061,942 | |||
The accompanying notes are an integral part of this financial statement.
DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS – (Continued)
JULY 31, 2015
(Unaudited)
| Value | |||
| Shares | Description | (Note 1) | |
| OIL & GAS STORAGE, TRANSPORTATION AND PRODUCTION--30.8% | |||
| 305,000 | Antero Midstream Partners LP | $ 8,137,400 | |
| 1,900,000 | Columbia Pipeline Group, Inc. | 55,442,000 | |
| 620,000 | Columbia Pipeline Partners LP | 14,532,800 | |
| 357,000 | DCP Midstream Partners LP | 11,138,400 | |
| 355,000 | Dominion Midstream Partners, LP | 12,467,600 | |
| 684,000 | Enbridge Energy Partners LP | 21,498,120 | |
| 1,600,000 | Enbridge Inc. (Canada)(a) | 69,696,000 | |
| 1,040,532 | Energy Transfer Equity LP | 31,299,203 | |
| 441,911 | Energy Transfer Partners LP | 22,625,843 | |
| 880,000 | EnLink Midstream Partners LP | 17,309,600 | |
| 766,000 | Enterprise Products Partners LP | 21,700,780 | |
| 265,000 | EQT GP Holdings, LP | 8,641,650 | |
| 251,000 | EQT Midstream Partners LP | 19,773,780 | |
| 665,000 | GasLog Partners LP (Marshall Islands) | 14,151,200 | |
| 407,000 | Genesis Energy LP | 18,066,730 | |
| 1,600,526 | Kinder Morgan Inc.(a) | 55,442,221 | |
| 400,090 | Magellan Midstream Partners LP | 28,166,336 | |
| 396,500 | MarkWest Energy Partners LP | 25,946,960 | |
| 160,000 | NuStar Energy LP | 9,051,200 | |
| 475,610 | Plains All American Pipeline LP | 19,856,717 | |
| 440,000 | Plains GP Holdings LP-CL A | 11,281,600 | |
| 230,625 | Shell Midstream Partners LP | 9,792,337 | |
| 1,915,000 | Spectra Energy Corp.(a) | 57,947,900 | |
| 479,000 | Sunoco Logistics Partners LP | 17,924,180 | |
| 380,000 | Tallgrass Energy GP, LP | 11,430,400 | |
| 500,000 | Tallgrass Energy Partners LP | 23,125,000 | |
| 90,000 | Targa Resources Corp. | 7,960,500 | |
| 476,000 | Targa Resources Partners LP | 17,821,440 | |
| 402,229 | Tesoro Logistics LP | 21,092,889 | |
| 1,000,000 | TransCanada Corp. (Canada)(a)(b) | 38,910,000 | |
| 182,440 | Valero Energy Partners LP | 8,569,207 | |
| 366,460 | Westlake Chemical Partners LP | 7,842,244 | |
| 309,000 | Western Gas Partners LP | 18,224,820 | |
| 800,000 | The Williams Companies, Inc. | 41,984,000 | |
| 778,851,057 | |||
The accompanying notes are an integral part of this financial statement.
DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS – (Continued)
JULY 31, 2015
(Unaudited)
| Value | |||
| Shares | Description | (Note 1) | |
| TELECOMMUNICATIONS--14.5% | |||
| 1,708,260 | AT&T Inc.(a)(b) | $59,344,952 | |
| 939,200 | BCE Inc. (Canada)(a)(b) | 38,638,688 | |
| 800,000 | CenturyLink Inc. | 22,880,000 | |
| 800,000 | Communications Sales & Leasing, Inc. | 16,680,000 | |
| 630,000 | Crown Castle International Corp. | 51,603,300 | |
| 3,518,491 | Frontier Communications Corp.(a)(b) | 16,607,278 | |
| 1,000,000 | Orange SA (France) | 16,500,939 | |
| 1,094,800 | Telus Corp. (Canada) | 37,574,711 | |
| 1,560,089 | Verizon Communications Inc.(a)(b) | 72,996,564 | |
| 782,200 | Vodafone Group Plc ADR (United Kingdom) | 29,551,516 | |
| 666,666 | Windstream Holdings, Inc. | 3,233,330 | |
| 365,611,278 | |||
| Total Common Stocks & MLP Interests (Cost $2,357,223,271) | 2,955,524,277 | ||
| PREFERRED STOCKS--1.7% | |||
| UTILITY--0.1% | |||
| 50,000 | Exelon Corp. 6 1/2%, due 6/01/17 | 2,337,000 | |
| 2,337,000 | |||
| NON-UTILITY--1.6% | |||
| 600,000 | Realty Income Corp. 6 5/8% Series F Perpetual | 15,906,000 | |
| 400,000 | Regency Centers Corp. 6 5/8% Series 6 Perpetual | 10,380,000 | |
| 234,900 | Vornado Realty Trust 6 5/8% Series G Perpetual | 6,018,138 | |
| 350,000 | Vornado Realty Trust 6 5/8% Series I Perpetual | 8,907,500 | |
| 41,211,638 | |||
| Total Preferred Stocks (Cost $41,036,811) | 43,548,638 | ||
| Par Value | |||
| BONDS--19.7% | |||
| ELECTRIC, GAS AND WATER--10.3% | |||
| $22,000,000 | Arizona Public Service Co. | ||
| 6 7/8%, due 8/01/36(a)(b) | 29,048,734 | ||
| 10,450,000 | Atmos Energy Corp. | ||
| 8 1/2%, due 3/15/19(a)(b) | 12,689,268 | ||
| 11,000,000 | Cleveland Electric Illuminating Co. | ||
| 8 7/8%, due 11/15/18(a)(b) | 13,269,344 | ||
| 6,750,000 | Commonwealth Edison Company | ||
| 6.95%, due 7/15/18 | 7,695,047 | ||
| 15,305,000 | Consolidated Edison Co. of New York | ||
| 7 1/8%, due 12/01/18(a)(b) | 17,927,650 | ||
| 9,354,000 | Dominion Resources, Inc. | ||
| 6.40%, due 6/15/18(a)(b) | 10,536,374 | ||
| 10,000,000 | DPL Capital Trust II | ||
| 8 1/8%, due 9/01/31 | 10,253,720 | ||
| 20,000,000 | Entergy Texas Inc. | ||
| 7 1/8%, due 2/01/19(a)(b) | 23,296,380 | ||
| 14,376,000 | Exelon Generation Co. LLC | ||
| 6.20%, due 10/01/17(a)(b) | 15,683,167 | ||
The accompanying notes are an integral part of this financial statement.
DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS – (Continued)
JULY 31, 2015
(Unaudited)
| Value | |||
| Par Value | Description | (Note 1) | |
| $10,000,000 | Georgia Power Co. | ||
| 5.70%, due 6/01/17(a)(b) | $10,800,240 | ||
| 10,618,000 | Indiana Michigan Power Co. | ||
| 7.00%, due 3/15/19(a)(b) | 12,360,743 | ||
| 5,000,000 | Metropolitan Edison Co. | ||
| 7.70%, due 1/15/19 | 5,859,440 | ||
| 12,000,000 | National Fuel Gas Co. | ||
| 8 3/4%, due 5/01/19(a)(b) | 13,817,928 | ||
| 3,350,000 | Nevada Power Co. | ||
| 7 1/8%, due 3/15/19 | 3,923,349 | ||
| 11,315,000 | NextEra Energy Capital Holdings, Inc. | ||
| 7 7/8%, due 12/15/15(a)(b) | 11,593,688 | ||
| 10,345,000 | Oncor Electric Delivery Co. LLC | ||
| 7.00%, due 9/01/22 | 12,720,657 | ||
| 14,000,000 | Progress Energy Inc. | ||
| 7.05%, due 3/15/19(a)(b) | 16,258,536 | ||
| 5,130,000 | Public Service New Mexico | ||
| 7 1/2%, due 8/01/18 | 5,865,950 | ||
| 15,169,000 | Sempra Energy | ||
| 6 1/2%, due 6/01/16(a)(b) | 15,842,534 | ||
| 5,000,000 | Sempra Energy | ||
| 6.15%, due 6/15/18 | 5,605,595 | ||
| 5,000,000 | Talen Energy Supply, LLC | ||
| 6 1/2%, due 5/01/18 | 5,356,250 | ||
| 260,404,594 | |||
| OIL & GAS STORAGE, TRANSPORTATION AND PRODUCTION--5.1% | |||
| 6,488,000 | Energy Transfer Partners | ||
| 7.60%, due 2/01/24 | 7,550,332 | ||
| 8,850,000 | Energy Transfer Partners | ||
| 8 1/4%, due 11/15/29 | 11,432,766 | ||
| 5,000,000 | Enterprise Products Operating LLC | ||
| 6 1/2%, due 1/31/19 | 5,669,775 | ||
| 12,826,000 | EQT Corp. | ||
| 8 1/8%, due 6/01/19(a)(b) | 15,196,527 | ||
| 8,030,000 | Kinder Morgan, Inc. | ||
| 6.85%, due 2/15/20 | 9,187,203 | ||
| 14,445,000 | Magellan Midstream Partners, LP | ||
| 6.40%, due 7/15/18(a)(b) | 16,077,747 | ||
| 11,000,000 | ONEOK, Inc. | ||
| 6.00%, due 6/15/35 | 10,245,752 | ||
| 9,000,000 | ONEOK Partners, LP | ||
| 8 5/8%, due 3/01/19 | 10,664,883 | ||
| 12,940,000 | Spectra Energy Capital, LLC | ||
| 6.20%, due 4/15/18 | 14,214,862 | ||
| 2,615,000 | Spectra Energy Capital, LLC | ||
| 6 3/4%, due 7/15/18 | 2,920,529 | ||
| 9,140,000 | TransCanada PipeLines Ltd. (Canada) | ||
| 7 1/8%, due 1/15/19 | 10,611,330 | ||
| 14,380,000 | Williams Partners, LP | ||
| 7 1/4%, due 2/01/17(a)(b) | 15,476,532 | ||
| 129,248,238 | |||
The accompanying notes are an integral part of this financial statement.
DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS – (Continued)
JULY 31, 2015
(Unaudited)
| Value | |||
| Par Value | Description | (Note 1) | |
| TELECOMMUNICATIONS--3.9% | |||
| $10,000,000 | BellSouth Capital Funding Corp. | ||
| 7 7/8%, due 2/15/30(a)(b) | $12,187,490 | ||
| 15,000,000 | CenturyLink Inc. | ||
| 6 7/8%, due 1/15/28 | 14,603,197 | ||
| 5,900,000 | Comcast Corp. | ||
| 7.05%, due 3/15/33 | 7,711,890 | ||
| 15,000,000 | Koninklijke KPN NV (Netherlands) | ||
| 8 3/8%, due 10/01/30(a)(b) | 19,804,245 | ||
| 10,000,000 | TCI Communications Inc. | ||
| 8 3/4%, due 8/01/15(a)(b) | 10,000,000 | ||
| 5,000,000 | TCI Communications Inc. | ||
| 7 1/8%, due 2/15/28 | 6,551,960 | ||
| 15,500,000 | Verizon Global Funding Corp. | ||
| 7 3/4%, due 12/01/30 | 20,664,693 | ||
| 5,000,000 | Vodafone Group Plc (United Kingdom) | ||
| 7 7/8%, due 2/15/30 | 6,109,815 | ||
| 97,633,290 | |||
| NON-UTILITY--0.4% | |||
| 8,000,000 | Dayton Hudson Corp. | ||
| 9 7/8%, due 7/01/20 | 10,554,672 | ||
| 10,554,672 | |||
| Total Bonds (Cost $486,942,306) | 497,840,794 | ||
| TOTAL INVESTMENTS--138.4% (Cost $2,885,202,388) | 3,496,913,709 | ||
| Borrowings--(27.7)% | (700,000,000) | ||
| Other assets less liabilities--(10.7)% | (270,940,412) | ||
| NET ASSETS APPLICABLE TO COMMON STOCK--100.0% | $2,525,973,297 | ||
The accompanying notes are an integral part of this financial statement.
DNP SELECT INCOME FUND INC.
STATEMENT OF NET ASSETS – (Continued)
JULY 31, 2015
(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 semi-annual report. The following is a summary of the inputs used to value each of the Fund's investments at July 31, 2015:
| Level 1 | Level 2 | |||||||
| Common stocks & MLP interests | $ | 2,955,524,277 | - | |||||
| Preferred stocks | 43,548,638 | - | ||||||
| Bonds | - | $ | 497,840,794 | |||||
| Total | $ | 2,999,072,915 | $ | 497,840,794 | ||||
There were no Level 3 priced securities held and there were no transfers between Level 1 and Level 2 related to securities held at July 31, 2015.
Note 2. Federal Tax Cost
At October 31, 2014, the Fund's most recent fiscal tax year end, the federal tax cost of investments and aggregate gross unrealized appreciation (depreciation) were as follows:
| Unrealized | Unrealized | Net Unrealized | |
| Federal Tax Cost | Appreciation | Depreciation | Appreciation |
| $2,866,087,593 | $981,028,616 | $(61,246,204) | $919,782,412 |
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 | September 22, 2015 |
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.