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, 2016

 

 

 

 

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

 

 

 

DNP SELECT INCOME FUND INC.

STATEMENT OF NET ASSETS

JULY 31, 2016

(Unaudited)

 

       Value
Shares   Description  (Note 1)
        
COMMON STOCKS & MLP INTERESTS--115.6%
         
   ELECTRIC, GAS AND WATER--78.5%     
3,000,000  Alliant Energy Corp.(a)  $120,750,000 
1,800,000  Ameren Corp.(a)(b)   94,392,000 
900,000  American Electric Power Company, Inc.   62,370,000 
1,000,000  American Water Works Co.   82,580,000 
500,000  Atmos Energy Corp.   39,895,000 
1,000,000  Black Hills Corp.   63,050,000 
3,071,300  CenterPoint Energy Inc.(a)   73,465,496 
2,500,000  CMS Energy Corp.(a)   112,950,000 
1,000,000  DTE Energy Co.(a)(b)   97,520,000 
1,000,000  Edison International   77,380,000 
1,800,000  Eversource Energy(a)   105,282,000 
2,500,000  Great Plains Energy Inc.(a)(b)   74,450,000 
1,000,000  NextEra Energy, Inc.(a)(b)   128,290,000 
1,900,000  NiSource Inc.   48,754,000 
800,000  Northwest Natural Gas Co.   51,952,000 
2,300,000  OGE Energy Corp.   73,991,000 
306,026  Piedmont Natural Gas Co.   18,300,355 
1,000,000  Pinnacle West Capital Corp.   78,870,000 
1,800,000  Public Service Enterprise Group Inc.(a)   82,818,000 
900,000  Sempra Energy(a)(b)   100,692,000 
1,500,000  South Jersey Industries, Inc.   47,820,000 
2,000,000  Southern Co.(a)   107,000,000 
700,000  Spire Inc.   48,580,000 
1,500,000  Vectren Corp.(a)(b)   77,595,000 
1,500,000  WEC Energy Group, Inc.(a)   97,365,000 
2,000,000  Westar Energy, Inc.(a)(b)   111,140,000 
1,000,000  WGL Holdings Inc.(a)   70,790,000 
2,000,000  Xcel Energy Inc.(a)   87,960,000 
      2,236,001,851 
         

 

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

 

 

DNP SELECT INCOME FUND INC.

STATEMENT OF NET ASSETS—(Continued)

JULY 31, 2016

(Unaudited)

 

       Value
Shares   Description  (Note 1)
        
   OIL & GAS STORAGE, TRANSPORTATION AND PRODUCTION--22.1%
560,000  Antero Midstream Partners LP  $14,235,200 
620,000  Columbia Pipeline Partners LP   9,281,400 
417,000  DCP Midstream Partners LP   13,956,990 
399,800  Dominion Midstream Partners LP   10,526,734 
434,000  Enbridge Energy Partners LP   10,138,240 
1,600,000  Enbridge Inc. (Canada)(a)   65,808,000 
630,532  Energy Transfer Equity LP   10,460,526 
463,911  Energy Transfer Partners LP   18,324,485 
680,000  EnLink Midstream Partners LP   11,621,200 
941,000  Enterprise Products Partners LP   26,790,270 
315,000  EQT GP Holdings, LP   7,953,750 
236,000  EQT Midstream Partners LP   18,835,160 
605,000  GasLog Partners LP (Marshall Islands)   13,310,000 
357,000  Genesis Energy LP   12,987,660 
1,900,526  Kinder Morgan Inc.(a)   38,637,694 
325,090  Magellan Midstream Partners LP   23,686,057 
497,185  MPLX LP   16,133,653 
180,000  NuStar Energy LP   9,027,000 
180,000  ONEOK Partners LP   7,241,400 
250,419  Phillips 66 Partners LP   13,397,417 
475,610  Plains All American Pipeline LP   13,250,495 
640,000  Plains GP Holdings, LP Class A   6,796,800 
375,000  Rice Midstream Partners LP   7,095,000 
480,625  Shell Midstream Partners LP   15,625,119 
1,915,000  Spectra Energy Corp.(a)   68,882,550 
569,000  Sunoco Logistics Partners LP   16,432,720 
380,000  Tallgrass Energy GP, LP   8,857,800 
500,000  Tallgrass Energy Partners LP   23,645,000 
435,120  Targa Resources Corp.   16,212,571 
352,229  Tesoro Logistics LP   17,178,208 
1,000,000  TransCanada Corp. (Canada)(a)   46,350,000 
307,440  Valero Energy Partners LP   13,100,018 
316,460  Westlake Chemical Partners LP   6,917,816 
327,000  Western Gas Partners LP   16,660,650 
      629,357,583 
         

 

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

 

 

DNP SELECT INCOME FUND INC.

STATEMENT OF NET ASSETS—(Continued)

JULY 31, 2016

(Unaudited)

 

       Value
Shares   Description  (Note 1)
         
   TELECOMMUNICATIONS--15.0%     
2,000,000  AT&T Inc.(a)  $86,580,000 
939,200  BCE Inc. (Canada)(a)   44,978,288 
800,000  CenturyLink Inc.   25,152,000 
800,000  Communications Sales & Leasing, Inc.   24,864,000 
630,000  Crown Castle International Corp.   61,128,900 
3,518,491  Frontier Communications Corp.(a)(b)   18,296,153 
1,000,000  Orange SA (France)   15,308,850 
1,094,800  Telus Corp. (Canada)   36,679,431 
1,510,089  Verizon Communications Inc.(a)(b)   83,674,031 
782,200  Vodafone Group Plc ADR (United Kingdom)   24,169,980 
666,666  Windstream Holdings, Inc.   6,206,660 
      427,038,293 
   Total Common Stocks & MLP Interests (Cost $2,416,714,732)  3,292,397,727 
         
PREFERRED STOCKS--1.6%
         
   UTILITY--0.1%     
50,000  Exelon Corp. 6 1/2%, due 6/01/17  2,502,500 
      2,502,500 
   NON-UTILITY--1.5%     
600,000  Realty Income Corp. 6 5/8% Series F Perpetual   15,804,000 
400,000  Regency Centers Corp. 6 5/8% Series 6 Perpetual   10,368,000 
234,900  Vornado Realty Trust 6 5/8% Series G Perpetual   6,072,165 
350,000  Vornado Realty Trust 6 5/8% Series I Perpetual  9,012,500 
      41,256,665 
   Total Preferred Stocks (Cost $41,036,811)  43,759,165 
         

 

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

 

 

DNP SELECT INCOME FUND INC.

STATEMENT OF NET ASSETS—(Continued)

JULY 31, 2016

(Unaudited)

 

       Value
Par Value   Description  (Note 1)
        
BONDS--16.1%
         
   ELECTRIC, GAS AND WATER--8.1%     
$22,000,000  Arizona Public Service Co.     
   6 7/8%, due 8/01/36(a)  $32,015,676 
10,450,000  Atmos Energy Corp.     
   8 1/2%, due 3/15/19(a)   12,247,933 
11,000,000  Cleveland Electric Illuminating Co.     
   8 7/8%, due 11/15/18(a)   12,772,650 
6,750,000  Commonwealth Edison Company     
   6.95%, due 7/15/18(a)   7,391,911 
15,305,000  Consolidated Edison Co. of New York     
   7 1/8%, due 12/01/18(a)   17,339,601 
9,354,000  Dominion Resources, Inc.     
   6.40%, due 6/15/18(a)   10,173,158 
10,000,000  DPL Capital Trust II     
   8 1/8%, due 9/01/31   9,875,000 
20,000,000  Entergy Texas Inc.     
   7 1/8%, due 2/01/19(a)   22,727,960 
14,376,000  Exelon Generation Co. LLC     
   6.20%, due 10/01/17(a)   15,135,369 
10,000,000  Georgia Power Co.     
   5.70%, due 6/01/17(a)   10,382,950 
10,618,000  Indiana Michigan Power Co.     
   7.00%, due 3/15/19(a)   12,033,677 
5,000,000  Metropolitan Edison Co.     
   7.70%, due 1/15/19(a)   5,612,010 
12,000,000  National Fuel Gas Co.     
   8 3/4%, due 5/01/19(a)   13,523,292 
3,350,000  Nevada Power Co.     
   7 1/8%, due 3/15/19   3,851,294 
10,345,000  Oncor Electric Delivery Co. LLC     
   7.00%, due 9/01/22(a)   13,176,551 
14,000,000  Progress Energy Inc.     
   7.05%, due 3/15/19(a)   15,910,818 
5,130,000  Public Service New Mexico     
   7 1/2%, due 8/01/18(a)   5,692,084 
5,000,000  Sempra Energy     
   6.15%, due 6/15/18   5,417,590 
5,000,000  Talen Energy Supply, LLC     
   6 1/2%, due 5/01/18  5,175,000 
      230,454,524 
         

 

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

 

 

DNP SELECT INCOME FUND INC.

STATEMENT OF NET ASSETS—(Continued)

JULY 31, 2016

(Unaudited)

 

       Value
Par Value   Description  (Note 1)
        
   OIL & GAS STORAGE, TRANSPORTATION AND PRODUCTION--4.4%
$6,488,000  Energy Transfer Partners     
   7.60%, due 2/01/24  $7,237,714 
8,850,000  Energy Transfer Partners     
   8 1/4%, due 11/15/29   10,086,779 
5,000,000  Enterprise Products Operating LLC     
   6 1/2%, due 1/31/19   5,589,940 
12,826,000  EQT Corp.     
   8 1/8%, due 6/01/19(a)   14,750,567 
8,030,000  Kinder Morgan, Inc.     
   6.85%, due 2/15/20   9,061,212 
14,445,000  Magellan Midstream Partners, LP     
   6.40%, due 7/15/18(a)   15,720,132 
11,000,000  ONEOK, Inc.     
   6.00%, due 6/15/35   10,175,000 
9,000,000  ONEOK Partners, LP     
   8 5/8%, due 3/01/19   10,239,309 
12,940,000  Spectra Energy Capital, LLC     
   6.20%, due 4/15/18(a)   13,805,544 
2,615,000  Spectra Energy Capital, LLC     
   6 3/4%, due 7/15/18   2,801,776 
9,140,000  TransCanada PipeLines Ltd. (Canada)     
   7 1/8%, due 1/15/19(a)   10,267,419 
14,380,000  Williams Partners, LP     
   7 1/4%, due 2/01/17(a)  14,733,173 
      124,468,565 
         
   TELECOMMUNICATIONS--3.3%     
10,000,000  BellSouth Capital Funding Corp.     
   7 7/8%, due 2/15/30(a)   12,958,110 
15,000,000  CenturyLink Inc.     
   6 7/8%, due 1/15/28   13,725,000 
5,900,000  Comcast Corp.     
   7.05%, due 3/15/33   8,592,447 
15,000,000  Koninklijke KPN NV (Netherlands)     
   8 3/8%, due 10/01/30(a)   21,178,155 
5,000,000  TCI Communications Inc.     
   7 1/8%, due 2/15/28   7,171,055 
15,500,000  Verizon Global Funding Corp.     
   7 3/4%, due 12/01/30   22,572,541 
5,000,000  Vodafone Group Plc (United Kingdom)     
   7 7/8%, due 2/15/30  6,778,740 
      92,976,048 
   NON-UTILITY--0.3%      
8,000,000  Dayton Hudson Corp.     
   9 7/8%, due 7/01/20(a)  10,185,960 
      10,185,960 
   Total Bonds (Cost $442,348,269)  458,085,097 
         
TOTAL INVESTMENTS--133.3% (Cost $2,900,099,812)   3,794,241,989 
Secured borrowings--(14.1)%    (400,000,000)
Secured notes--(10.5)%    (300,000,000)
Mandatory Redeemable Preferred Shares at liquidation value--(10.5)%    (300,000,000)
Other assets less other liabilities--1.8%   52,979,954 
NET ASSETS APPLICABLE TO COMMON STOCK--100.0%   $2,847,221,943 

 

(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.

 

 

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

 

 

DNP SELECT INCOME FUND INC.

STATEMENT OF NET ASSETS—(Continued)

JULY 31, 2016

(Unaudited)

 

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, 2016:

 

     Level 1  Level 2
Common stocks & MLP interests $3,292,397,727 -
Preferred stocks   43,759,165 -
Bonds   - $458,085,097
    Total   $3,336,156,892 $458,085,097

 

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, 2016.

 

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:

 

  Unrealized Unrealized Net Unrealized
Federal Tax Cost Appreciation Depreciation 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 September 21, 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 September 21, 2016  
     
By (Signature and Title) /s/ Alan M. Meder  
  Alan M. Meder  
  Treasurer and Assistant Secretary  
  (Principal Financial and Accounting Officer)  
     
Date September 21, 2016