UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-7460
Exact name of registrant as specified in charter:
Delaware Investments Dividend & Income Fund, Inc.
Address of principal executive offices:
2005 Market Street
Philadelphia, PA 19103
Name and address of agent for service:
Richelle S. Maestro, 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: May 31, 2004
Item 1. Reports to Stockholders
CLOSED END Delaware
Investments(SM)
--------------------------------------
A member of Lincoln Financial Group(R)
Semiannual Report MAY 31, 2004
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DELAWARE INVESTMENTS
DIVIDEND AND INCOME FUND, INC.
[LOGO] POWERED BY RESEARCH.(SM)
TABLE
OF CONTENTS
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FINANCIAL STATEMENTS:
Statement of Net Assets 1
Statement of Operations 6
Statements of Changes in Net Assets 7
Statement of Cash Flows 8
Financial Highlights 9
Notes to Financial Statements 10
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Funds are not FDIC insured and are not guaranteed. It is possible to lose the
principal amount invested.
Mutual fund advisory services provided by Delaware Management Company, a series
of Delaware Management Business Trust, which is a registered investment advisor.
(C) 2004 Delaware Distributors, L.P.
STATEMENT DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS May 31, 2004 (Unaudited)
Number of Market
Shares Value
COMMON STOCK - 77.30%
Automobiles & Automotive Parts - 2.57%
General Motors 39,900 $ 1,811,061
Goodrich (B.F.) 76,400 2,141,492
-----------
3,952,553
-----------
Banking, Finance & Insurance - 15.27%
*American Home Mortgage Investment 102,000 2,601,000
Bank of America 34,100 2,834,733
+++Fieldstone Investments 144A 100,000 1,725,000
*Friedman Billings Ramsey Group Class A 98,995 1,930,403
J.P. Morgan Chase 44,700 1,646,748
MBNA 108,100 2,745,740
Mellon Financial 85,100 2,505,344
Morgan Stanley 57,300 3,066,122
++Sunset Financial Resources 97,900 1,021,097
Wells Fargo 41,900 2,463,720
XL Capital Limited Class A 13,000 970,450
-----------
23,510,357
-----------
Cable, Media & Publishing - 0.12%
++XM Satellite Radio Class A 7,503 188,926
-----------
188,926
-----------
Chemicals - 2.59%
Dow Chemical 100,000 3,990,000
-----------
3,990,000
-----------
Computers & Technology - 2.44%
++Intuit 50,700 1,986,426
Pitney Bowes 40,000 1,773,200
-----------
3,759,626
-----------
Consumer Products - 1.19%
Procter & Gamble 17,000 1,832,940
-----------
1,832,940
-----------
Electronics & Electrical Equipment - 2.29%
Emerson Electric 25,000 1,492,500
General Electric 65,100 2,025,912
-----------
3,518,412
-----------
Energy - 4.27%
ChevronTexaco 28,000 2,531,200
Exxon Mobil 40,000 1,730,000
Kerr-McGee 45,300 2,231,025
++Petroleum Geo-Services ADR 1,989 73,202
-----------
6,565,427
-----------
Food, Beverage & Tobacco - 6.87%
Anheuser-Busch 49,900 2,658,173
General Mills 58,900 2,712,345
Kellogg 61,500 2,607,600
PepsiCo 48,600 2,593,782
-----------
10,571,900
-----------
Healthcare & Pharmaceuticals - 5.73%
Abbott Laboratories 35,000 1,442,350
++Hospira 3,500 89,740
Merck & Co. 30,800 1,456,840
Pfizer 59,400 2,099,196
++Tenet Healthcare 177,400 2,114,608
Wyeth 45,100 1,623,600
-----------
8,826,334
-----------
Number of Market
Shares Value
COMMON STOCK (continued)
Investment Companies - 1.57%
*Gladstone Capital 120,300 $ 2,418,030
-----------
2,418,030
-----------
Paper & Forest Products - 1.88%
International Paper 40,000 1,677,200
Weyerhaeuser 20,000 1,209,600
-----------
2,886,800
-----------
Real Estate - 23.76%
AMB Property 65,600 2,168,080
Apartment Investment & Management 55,200 1,594,176
BRE Properties Class A 40,900 1,415,140
Camden Property Trust 16,300 761,373
Duke Realty 87,000 2,815,320
Equity Office Properties Trust 95,800 2,581,810
General Growth Properties 113,538 3,335,746
Liberty Property Trust 62,470 2,491,928
+++Medical Properties Trust 144A 35,000 350,000
Pan Pacific Retail Properties 61,400 2,824,400
Prentiss Properties Trust 76,272 2,516,976
Ramco-Gershenson Properties 118,500 2,867,700
Reckson Associates Realty 86,520 2,251,250
Simon Property Group 92,500 4,770,225
Starwood Hotels & Resorts Worldwide 76,200 3,214,116
Sun Communities 16,600 613,868
-----------
36,572,108
-----------
Retail - 0.21%
*++Kmart Holdings 6,068 318,267
-----------
318,267
-----------
Technology/Semiconductors - 1.38%
Intel 74,200 2,118,410
-----------
2,118,410
-----------
Telecommunications - 2.09%
Alltel 63,500 3,215,005
-----------
3,215,005
-----------
Utilities - 3.07%
Dominion Resources 36,600 2,304,702
FPL Group 38,000 2,422,500
-----------
4,727,202
-----------
TOTAL COMMON STOCK (cost $101,151,024) 118,972,297
-----------
CONVERTIBLE PREFERRED STOCK - 6.84%
Aerospace & Defense - 0.71%
Northrop Grumman 7.25% 10,500 1,093,050
-----------
1,093,050
-----------
Banking, Finance & Insurance - 2.06%
Chubb 7.00% 15,000 416,850
*National Australia Bank Units 7.875% 40,000 1,440,000
Travelers Property Casualty 4.50% 32,200 768,292
XL Capital 6.50% 22,000 550,880
-----------
3,176,022
-----------
Consumer Products - 1.50%
Newell Financial Trust I 5.25% 52,600 2,307,825
-----------
2,307,825
-----------
1
STATEMENT DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS (CONTINUED)
Number of Market
Shares Value
CONVERTIBLE PREFERRED STOCK (continued)
Environmental Services - 0.76%
Allied Waste Industries 6.25% 16,200 $ 1,169,478
-----------
1,169,478
-----------
Real Estate - 0.84%
Crescent Real Estate 6.75% 62,600 1,292,690
-----------
1,292,690
-----------
Telecommunications - 0.97%
Lucent Technologies Capital Trust I 7.75% 1,300 1,490,697
-----------
1,490,697
-----------
TOTAL CONVERTIBLE PREFERRED STOCK
(cost $10,900,050) 10,529,762
-----------
PREFERRED STOCK - 6.73%
Leisure, Lodging & Entertainment - 0.95%
WestCoast Hospitality Capital Trust 9.50% 58,000 1,466,240
-----------
1,466,240
-----------
Real Estate - 4.55%
Equity Inns Series B 8.75% 37,000 925,000
LaSalle Hotel Properties 10.25% 113,200 3,032,628
Ramco-Gershenson Properties 9.50% 40,000 1,061,000
SL Green Realty 7.625% 80,000 1,970,000
-----------
6,988,628
-----------
Utilities - 1.23%
Public Service Enterprise Group 10.25% 27,200 1,570,800
TNP Enterprises PIK 14.50% 2,841 328,802
-----------
1,899,602
-----------
TOTAL PREFERRED STOCK (cost $9,927,972) 10,354,470
-----------
Principal
Amount
CONVERTIBLE BONDS - 6.36%
Automobiles & Automotive Parts - 0.26%
+Tower Automotive 144A 5.00% 8/1/04 $ 400,000 402,000
-----------
402,000
-----------
Computers & Technology - 0.35%
+Mercury Interactive 144A 4.75% 7/1/07 550,000 544,500
-----------
544,500
-----------
Leisure, Lodging & Entertainment - 0.41%
*+Regal Entertainment Group 144A
3.75% 5/15/08 550,000 633,875
-----------
633,875
-----------
Miscellaneous - 0.23%
+Tyco International Group 144A
2.75% 1/15/18 250,000 356,250
-----------
356,250
-----------
Real Estate - 1.10%
Malan Realty Investors 9.50% 7/15/04 379,000 379,000
Meristar Hospitality 9.50% 4/1/10 1,100,000 1,318,625
-----------
1,697,625
-----------
Retail - 2.13%
+Gap 144A 5.75% 3/15/09 1,825,000 2,842,438
+Saks 144A 2.00% 3/15/24 425,000 429,781
-----------
3,272,219
-----------
Principal Market
Amount Value
CONVERTIBLE BONDS (continued)
Telecommunications - 1.18%
+Nextel Partners 144A 1.50% 11/15/08 $ 800,000 $1,809,000
----------
1,809,000
----------
Transportation & Shipping - 0.13%
+ExpressJet Holdings 144A 4.25% 8/1/23 200,000 193,000
----------
193,000
----------
Utilities - 0.57%
+Centerpoint Energy 144A 3.75% 5/15/23 800,000 884,000
----------
884,000
----------
TOTAL CONVERTIBLE BONDS (cost $7,239,590) 9,792,469
----------
BONDS - 32.84%
Aerospace & Defense - 0.24%
Armor Holdings 8.25% 8/15/13 350,000 375,375
----------
375,375
----------
Automobiles & Automotive Parts - 0.50%
*#+Advanced Accessory Holdings 144A
13.25% 12/15/11 600,000 321,000
Advanced Accessory Systems
10.75% 6/15/11 200,000 202,000
*Collins & Aikman Products
11.50% 4/15/06 250,000 243,750
----------
766,750
----------
Banking, Finance & Insurance - 1.17%
BF Saul 7.50% 3/1/14 125,000 123,438
Bluewater Finance 10.25% 2/15/12 325,000 334,750
+Farmers Exchange Capital 144A
7.20% 7/15/48 350,000 326,200
+LaBranche 144A 11.00% 5/15/12 375,000 384,375
Stena 9.625% 12/1/12 425,000 478,125
*+UGS 144A 10.00% 6/1/12 150,000 158,250
----------
1,805,138
----------
Buildings & Materials - 0.99%
+Aearo 144A 8.25% 4/15/12 200,000 203,000
Interface 10.375% 2/1/10 350,000 390,250
Interline Brands 11.50% 5/15/11 350,000 374,500
+Lone Star Industries 144A 8.85% 6/15/05 300,000 313,530
Standard Pacific 7.75% 3/15/13 250,000 250,000
----------
1,531,280
----------
Business Services - 0.20%
Brickman Group 11.75% 12/15/09 275,000 314,875
----------
314,875
----------
Cable, Media & Publishing - 4.09%
+Atlantic Broadband Finance 144A
9.375% 1/15/14 600,000 564,000
*Charter Communications Holdings
10.75% 10/1/09 1,175,000 1,028,125
*CSC Holdings 10.50% 5/15/16 650,000 736,125
*Dex Media East 12.125% 11/15/12 325,000 378,625
+Echostar DBS 144A 5.75% 10/1/08 550,000 540,375
+Hollinger 144A 11.875% 3/1/11 200,000 228,250
*Lodgenet Entertainment 9.50% 6/15/13 425,000 465,375
PanAmSat 8.50% 2/1/12 375,000 421,875
PEI Holdings 11.00% 3/15/10 400,000 462,000
Rogers Cablesystems 10.00% 3/15/05 500,000 527,500
2
STATEMENT DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS (CONTINUED)
Principal Market
Amount Value
BONDS (continued)
Cable, Media & Publishing (continued)
+Sheridan Acquisition 144A 10.25% 8/15/11 $325,000 $ 342,875
XM Satellite Radio 12.00% 6/15/10 525,000 590,625
----------
6,285,750
----------
Chemicals - 1.39%
*Huntsman International
9.875% 3/1/09 250,000 271,250
10.125% 7/1/09 425,000 437,750
*+Nalco 144A 8.875% 11/15/13 275,000 288,750
*Resolution Performance Products
8.00% 12/15/09 300,000 309,750
*+Rhodia 144A 8.875% 6/1/11 525,000 404,250
*[Check Mark]Solutia 6.72% 10/15/37 875,000 424,375
----------
2,136,125
----------
Computers & Technology - 1.04%
Activant Solutions 10.50% 6/15/11 225,000 237,375
*Amkor Technology 9.25% 2/15/08 400,000 423,000
*ChipPac International 12.75% 8/1/09 275,000 301,125
*Northern Telecom Capital
7.875% 6/15/26 400,000 348,000
*+Stratus Technologies 144A
10.375% 12/1/08 300,000 295,500
----------
1,605,000
----------
Consumer Products - 0.79%
*Hines Nurseries 10.25% 10/1/11 200,000 214,000
*Remington Arms 10.50% 2/1/11 350,000 339,500
+Samsonite 144A 8.875% 6/1/11 300,000 304,500
#+Town Sports International 144A
11.00% 2/1/14 725,000 358,875
----------
1,216,875
----------
Consumer Services - 0.38%
Alderwoods Group 12.25% 1/2/09 475,000 527,250
Corrections Corporation of America
9.875% 5/1/09 50,000 55,500
----------
582,750
----------
Energy - 1.01%
El Paso Production Holding 7.75% 6/1/13 550,000 522,500
*+Hilcorp Energy/Finance 144A
10.50% 9/1/10 400,000 439,000
Petroleum Geo-Services
8.00% 11/5/06 200,159 204,162
10.00% 11/5/10 374,909 386,156
----------
1,551,818
----------
Environmental Services - 0.67%
+Geo 144A 11.00% 5/15/12 400,000 407,000
IESI 10.25% 6/15/12 575,000 623,875
----------
1,030,875
----------
Food, Beverage & Tobacco - 2.15%
B&G Foods 9.625% 8/1/07 925,000 945,812
Chiquita Brands International
10.56% 3/15/09 450,000 491,063
+Commonwealth Brands 144A
10.625% 9/1/08 425,000 439,875
+Gold Kist 144A 10.25% 3/15/14 175,000 183,750
+Le-Natures 144A 9.50% 6/15/13 400,000 410,000
National Beef Packing 10.50% 8/1/11 175,000 188,125
Principal Market
Amount Value
BONDS (continued)
Food, Beverage & Tobacco (continued)
PPC Escrow 9.25% 11/15/13 $ 275,000 $ 287,375
+Standard Commercial 144A
8.00% 4/15/12 350,000 358,750
[Check Mark]Venture Holdings Trust 12.00% 6/1/09 425,000 2,656
----------
3,307,406
----------
Healthcare & Pharmaceuticals - 0.50%
*+Ameripath 144A 10.50% 4/1/13 400,000 404,000
+Curative Health Services 144A
10.75% 5/1/11 250,000 245,000
*+VWR International 144A 8.00% 4/15/14 125,000 125,938
----------
774,938
----------
Industrial Machinery - 0.36%
*Foster Wheeler 6.75% 11/15/05 275,000 250,250
+MAAX 144A 9.75% 6/15/12 300,000 309,000
----------
559,250
----------
Leisure, Lodging & Entertainment - 3.23%
Ameristar Casinos 10.75% 2/15/09 375,000 429,375
+Aztar 144A 7.875% 6/15/14 700,000 705,249
Felcor Lodging 10.00% 9/15/08 286,000 306,735
Hard Rock Hotel 8.875% 6/1/13 275,000 279,125
Herbst Gaming 10.75% 9/1/08 325,000 375,375
+Herbst Gaming 144A 8.125% 6/1/12 625,000 629,688
Mandalay Resort Group 10.25% 8/1/07 75,000 84,375
Penn National Gaming 8.875% 3/15/10 400,000 430,000
*Royal Caribbean Cruises 7.25% 3/15/18 450,000 432,000
Station Casinos 6.50% 2/1/14 175,000 164,063
+Warner Music Group 144A 7.375% 4/15/14 675,000 661,500
Wheeling Island Gaming
10.125% 12/15/09 450,000 475,875
----------
4,973,360
----------
Metals & Mining - 0.68%
AK Steel 7.75% 6/15/12 350,000 308,000
+Autocam 144A 10.875% 6/15/14 250,000 246,875
+Ispat Inland 144A 9.75% 4/1/14 475,000 488,063
----------
1,042,938
----------
Packaging & Containers - 1.32%
*AEP Industries 9.875% 11/15/07 275,000 281,875
*Consolidated Container 10.125% 7/15/09 375,000 331,875
#+Consolidated Container 144A
10.75% 6/15/09 375,000 281,250
*Pliant 11.125% 9/1/09 275,000 292,875
*+Portola Packaging 144A 8.25% 2/1/12 375,000 315,000
*Radnor Holdings 11.00% 3/15/10 300,000 259,500
^+Radnor Holdings 144A 7.92% 4/15/09 275,000 276,375
----------
2,038,750
----------
Paper & Forest Products - 2.65%
Abitibi-Consolidated 6.95% 12/15/06 275,000 282,962
+Ainsworth Lumber 144A 6.75% 3/15/14 300,000 278,250
Bowater 9.00% 8/1/09 500,000 543,971
*Buckeye Technologies 8.00% 10/15/10 450,000 420,750
Fort James 7.75% 11/15/23 1,125,000 1,158,750
*+Newark Group 144A 9.75% 3/15/14 450,000 427,500
+Port Townsend Paper 144A
11.00% 4/15/11 400,000 396,000
Potlatch 12.50% 12/1/09 475,000 571,037
----------
4,079,220
----------
3
STATEMENT DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS (CONTINUED)
Principal Market
Amount Value
BONDS (continued)
Real Estate - 0.45%
Tanger Properties
7.875% 10/24/04 $300,000 $ 304,500
9.125% 2/15/08 350,000 385,875
----------
690,375
----------
Restaurants - 0.69%
[Check Mark]Avado Brands 9.75% 6/1/06 230,000 92,000
Denny's 12.75% 9/30/07 300,000 316,500
+O'Charleys 144A 9.00% 11/1/13 375,000 386,250
+VICORP Restaurants 144A 10.50% 4/15/11 275,000 273,625
----------
1,068,375
----------
Retail - 0.82%
*J Crew Operating 10.375% 10/15/07 485,000 487,425
*Office Depot 10.00% 7/15/08 480,000 556,800
Petco Animal Supplies 10.75% 11/1/11 195,000 221,325
----------
1,265,550
----------
Telecommunications - 1.69%
Alaska Communications Systems
9.875% 8/15/11 400,000 410,000
*Centennial Cellular Operating
10.125% 6/15/13 475,000 486,875
*Cincinnati Bell 8.375% 1/15/14 275,000 247,500
Citizens Communications 8.50% 5/15/06 75,000 80,097
+Inmarsat Finance 144A 7.625% 6/30/12 175,000 173,688
+iPCS Escrow 144A 11.50% 5/1/12 200,000 203,000
MetroPCS 10.75% 10/1/11 400,000 428,000
*+Qwest Services 144A 13.50% 12/15/10 500,000 578,749
----------
2,607,909
----------
Textiles, Apparel & Furniture - 0.35%
Warnaco 8.875% 6/15/13 500,000 531,250
----------
531,250
----------
Transportation & Shipping - 1.28%
Hornbeck Offshore Services
10.625% 8/1/08 250,000 273,750
*Kansas City Southern Railway
9.50% 10/1/08 250,000 273,750
Ocean Rig Norway 10.25% 6/1/08 325,000 323,375
OMI 7.625% 12/1/13 400,000 390,000
Overseas Shipholding Group
8.25% 3/15/13 175,000 188,344
Seabulk International 9.50% 8/15/13 500,000 515,625
----------
1,964,844
----------
Utilities - 4.20%
Avista 9.75% 6/1/08 500,000 595,299
Calpine
8.25% 8/15/05 125,000 108,750
*10.50% 5/15/06 550,000 426,250
*+Calpine 144A 8.75% 7/15/13 530,000 443,875
Cogentrix Energy 8.75% 10/15/08 425,000 443,063
*+Dynegy Holdings 144A 10.125% 7/15/13 900,000 958,499
*Edison Mission Energy 9.875% 4/15/11 200,000 202,000
El Paso Natural Gas 7.625% 8/1/10 200,000 203,000
Elwood Energy 8.159% 7/5/26 160,202 161,804
Midland Funding II 11.75% 7/23/05 160,377 165,991
Midwest Generation 8.30% 7/2/09 500,000 500,000
*+Midwest Generation 144A 8.75% 5/1/34 425,000 420,750
Principal Market
Amount Value
BONDS (continued)
Utilities (continued)
[Check Mark]Mirant Americas Generation
7.625% 5/1/06 $400,000 $ 286,000
+NRG Energy 144A 8.00% 12/15/13 75,000 75,188
Orion Power Holdings 12.00% 5/1/10 250,000 308,750
PSEG Energy Holdings 7.75% 4/16/07 250,000 261,250
Reliant Energy 9.50% 7/15/13 250,000 266,250
*Sonat 6.875% 6/1/05 175,000 175,000
Tennessee Gas Pipeline 8.375% 6/15/32 350,000 339,500
[Check Mark]+USGen New England 144A 7.459% 1/2/15 250,000 106,250
-----------
6,447,469
-----------
TOTAL BONDS (cost $50,876,190) 50,554,245
-----------
MUNICIPAL BONDS - 0.14%
New Jersey Economic Development
Authority Special Facility Revenue
Continental Airlines Project
6.25% 9/15/29 300,000 220,026
-----------
TOTAL MUNICIPAL BONDS (cost $254,498) 220,026
-----------
Number of
Shares
WARRANTS - 0.00%
+++Solutia 144A 650 7
-----------
TOTAL WARRANTS (cost $55,294) 7
-----------
Principal
Amount
U.S. TREASURY OBLIGATIONS - 6.27%
*[Solid Box]U.S. Treasury Bills 0.90% 7/22/04 $9,665,000 9,652,616
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(cost $9,652,616) 9,652,616
-----------
TOTAL MARKET VALUE OF SECURITIES BEFORE
SECURITIES LENDING COLLATERAL - 136.48%
(cost $190,057,234) 210,075,892
-----------
SECURITIES LENDING COLLATERAL - 12.93%
Abbey National
1.10% 6/07/04 368,277 368,269
1.190% 10/15/04 340,467 349,048
ABN AMRO Bank Chicago 1.07% 6/07/04 514,765 514,765
ABN AMRO Bank Tokyo 1.10% 7/20/04 367,702 367,699
Barclays 1.10% 8/19/04 559,003 558,930
Bayerische Landesbank 1.154% 8/30/04 294,092 294,112
CDC IXIS 1.485% 11/12/04 588,244 588,318
Citibank 1.06% 7/06/04 588,317 588,318
Citigroup Global Markets 1.04% 6/01/04 6,029,849 6,029,849
Credit Suisse First Boston 1.60% 12/13/04 588,165 588,318
Deutsche Bank Financial 1.33% 2/22/05 147,054 147,191
Fortis Bank 1.10% 7/26/04 740,438 740,623
General Electric Capital
1.103% 10/25/04 250,143 250,424
1.118% 2/3/05 220,624 220,928
1.132% 10/04/04 220,649 220,831
Goldman Sachs Group
1.14% 7/20/04 588,290 588,318
1.245% 12/08/04 345,637 345,637
ING Bank Geneva 1.10% 9/30/04 588,716 588,318
ING Bank Singapore 1.06% 6/03/04 294,158 294,159
4
STATEMENT DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS (CONTINUED)
Principal Market
Amount Value
SECURITIES LENDING COLLATERAL (continued)
Marsh & McLennan 1.291% 6/15/04 $376,631 $ 377,422
Merrill Lynch Mortgage Capital
1.163% 7/12/04 588,318 588,318
Morgan Stanley Dean Witter
1.22% 6/28/05 147,079 147,079
Rabobank 1.065% 3/02/05 735,388 735,212
Royal Bank of Scotland
1.06% 7/02/04 735,632 735,627
Societe Generale New York
1.148% 12/08/04 588,207 588,207
Societe Generale Singapore
1.06% 6/03/04 294,158 294,159
Svenska Stockholm 1.10% 8/09/04 735,476 735,397
Union Bank of Switzerland 1.13% 12/20/04 737,094 735,398
Wachovia Bank NA 1.127% 11/15/04 588,332 588,571
Wells Fargo Bank 1.04% 6/30/04 735,396 735,398
------------
TOTAL SECURITIES LENDING COLLATERAL
(cost $19,904,843) 19,904,843
------------
TOTAL MARKET VALUE OF SECURITIES - 149.41%
(cost $209,962,077) 229,980,735**
OBLIGATION TO RETURN SECURITIES
LENDING COLLATERAL - (12.93%) (19,904,843)
COMMERCIAL PAPER PAYABLE
(PAR $55,000,000) - (35.65%) (54,883,034)
LIABILITIES NET OF RECEIVABLES AND
OTHER ASSETS - (0.83%) (1,272,974)
------------
NET ASSETS APPLICABLE TO 12,876,300 SHARES
OUTSTANDING; EQUIVALENT TO $11.95
PER SHARE - 100.00% $153,919,884
============
COMPONENTS OF NET ASSETS AT MAY 31, 2004(a):
Common stock, $0.01 par value, 500,000,000
shares authorized to the Fund $170,660,039
Treasury stock, 1,430,700 shares at cost (17,411,619)
Accumulated net realized loss on investments (19,347,194)
Net unrealized appreciation of investments 20,018,658
------------
Total net assets $153,919,884
============
*Fully or partially on loan.
**Includes $28,232,652 of securities loaned.
+Security exempt from registration under Rule 144A of the Securities Act of
1933. See Note 8 in "Notes to Financial Statements."
++Non-income producing security for the period ended May 31, 2004.
+++See Note 7 in "Notes to Financial Statements."
[Check Mark]Non-income producing security. Security is currently in default.
#Step coupon bond.
[Solid Box]U.S. Treasury bills are traded on a discount basis; the interest
rate shown is the effective yield at the time of purchase by the Fund.
^Variable Rate Notes - the interest rate shown is the rate as of May 31, 2004.
(a) See Note 4 in "Notes to Financial Statements."
SUMMARY OF ABBREVIATIONS:
ADR - American Depositary Receipts
PIK - Pay-in-kind
5
STATEMENT DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.
OF OPERATIONS Six Months Ended May 31, 2004 (Unaudited)
INVESTMENT INCOME:
Dividends $2,100,303
Interest 2,740,350
Securities lending income 15,892 $4,856,545
---------- ----------
EXPENSES:
Management fees 584,553
Commercial paper fees 68,719
Accounting and administration expenses 53,141
Legal and professional fees 28,042
Reports to shareholders 25,700
Transfer agent fees 24,234
Taxes (other than taxes on income) 7,640
NYSE fees 7,443
Directors' fees 6,520
Custodian fees 3,960
Other 7,821
----------
Total operating expenses (before interest expense) 817,773
Interest expense 320,521
----------
Total operating expenses (after interest expense) 1,138,294
Less expenses paid indirectly (1,266)
Total expenses 1,137,028
----------
NET INVESTMENT INCOME 3,719,517
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments 4,806,615
Foreign currencies (2,299)
----------
Net realized gain 4,804,316
Net change in unrealized appreciation/depreciation of investments 982,141
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES 5,786,457
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $9,505,974
==========
See accompanying notes
6
STATEMENTS DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.
OF CHANGES IN NET ASSETS
Six Months Year
Ended Ended
5/31/04 11/30/03
(Unaudited)
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 3,719,517 $ 9,156,076
Net realized gain (loss) on investments and foreign currencies 4,804,316 (1,708,967)
Net change in unrealized appreciation/depreciation of investments 982,141 27,267,999
------------ ------------
Net increase in net assets resulting from operations 9,505,974 34,715,108
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM(1):
Net investment income (3,979,884) (9,189,360)
Return of capital (2,201,123) (5,490,473)
------------ ------------
(6,181,007) (14,679,833)
------------ ------------
NET INCREASE IN NET ASSETS 3,324,967 20,035,275
NET ASSETS:
Beginning of period 150,594,917 130,559,642
------------ ------------
End of period (there is no undistributed net investment income at each period end) $153,919,884 $150,594,917
============ ============
(1) See Note 4 in "Notes to Financial Statements."
See accompanying notes
7
STATEMENT DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.
OF CASH FLOWS Six Months Ended May 31, 2004 (Unaudited)
NET CASH PROVIDED BY OPERATING ACTIVITIES:
Net increase in net assets resulting from operations $ 9,505,974
------------
Adjustments to reconcile net increase in net assets from operations to cash
provided by operating activities:
Amortization of premium and discount on investments (150,711)
Net proceeds from investment transactions 1,870,397
Net realized gain from investment transactions (4,806,615)
Net realized loss on foreign currencies 2,299
Change in net unrealized appreciation/depreciation of investments (982,141)
Decrease in receivable for investments sold 66,738
Decrease in interest and dividends receivable 314,439
Decrease in distribution payable (1,030,173)
Increase in payable for investments purchased 374,386
Increase in interest payable 6,882
Increase in accrued expenses and other liabilities 76,834
------------
Total adjustments (4,257,665)
------------
Net cash provided by operating activities 5,248,309
------------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Cash provided by issuance of commercial paper 137,664,372
Cash used to liquidate commercial paper (137,686,361)
Cash dividends and distributions paid (6,181,007)
------------
Net cash used for financing activities (6,202,996)
------------
Effect of exchange rates on cash (2,299)
------------
Net decrease in cash (956,986)
Cash (overdraft) at beginning of period (63,582)
Cash (overdraft) at end of period $ (1,020,568)
============
Cash paid for interest $ 314,639
============
See accompanying notes
8
FINANCIAL
HIGHLIGHTS
Selected data for each share of the Fund outstanding
throughout each period were as follows:
--------------------------------------------------------------------
Delaware Investments Dividend and Income Fund, Inc.
--------------------------------------------------------------------
Six Months
Ended Year Ended
5/31/04(1) 11/30/03 11/30/02(4) 11/30/01 11/30/00 11/30/99
(Unaudited)
NET ASSET VALUE, BEGINNING OF PERIOD $11.700 $10.140 $11.630 $11.590 $13.000 $16.230
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(5) 0.289 0.711 0.635 0.617 0.803 0.939
Net realized and unrealized gain (loss) on
investments and foreign currencies 0.441 1.989 (0.650) 0.923 (0.713) (1.914)
------- ------- ------- ------- ------- -------
Total from investment operations 0.730 2.700 (0.015) 1.540 0.090 (0.975)
------- ------- ------- ------- ------- -------
LESS DIVIDENDS AND DISTRIBUTIONS FROM(6):
Net investment income (0.309) (0.714) (0.660) (0.617) (0.803) (0.939)
Net realized gain on investments -- -- -- (0.080) (0.560) (1.316)
Return of capital (0.171) (0.426) (0.815) (0.803) (0.137) --
------- ------- ------- ------- ------- -------
Total dividends and distributions (0.480) (1.140) (1.475) (1.500) (1.500) (2.255)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $11.950 $11.700 $10.140 $11.630 $11.590 $13.000
======= ======= ======= ======= ======= =======
MARKET VALUE, END OF PERIOD $11.080 $11.840 $10.020 $13.850 $11.875 $11.250
======= ======= ======= ======= ======= =======
TOTAL RETURN BASED ON:(2)
Market value (2.58%) 30.20% (18.98%) 30.20% 19.78% (26.53%)
Net asset value 6.33% 27.13% (2.36%) 12.02% 1.17% (7.80%)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $153,920 $150,595 $130,560 $149,718 $149,292 $185,985
Ratio of expenses to average net assets 1.44% 1.63% 1.86% 2.77% 3.02% 2.34%
Ratio of expenses to adjusted
average net assets (before interest expense)(3) 0.77% 0.79% 0.80% 0.83% 0.71% 0.77%
Ratio of interest expense to adjusted average net assets(3) 0.30% 0.37% 0.54% 1.22% 1.58% 1.08%
Ratio of net investment income to average net assets 4.72% 6.70% 5.69% 5.07% 6.45% 6.34%
Ratio of net investment income to adjusted average net assets(3) 3.50% 4.78% 4.12% 3.75% 4.88% 5.03%
Portfolio turnover 101% 175% 107% 61% 47% 55%
LEVERAGE ANALYSIS:
Debt outstanding (at par) at end of period (000 omitted) $55,000 $55,000 $55,000 $55,000 $55,000 $55,000
Average daily balance of debt outstanding (000 omitted) $54,901 $54,882 $54,857 $54,724 $54,463 $54,567
Average daily balance of shares outstanding (000 omitted) 12,876 12,876 12,876 12,876 13,744 14,307
Average debt per share $4.264 $4.262 $4.260 $4.250 $3.963 $3.814
Asset coverage per $1,000 of debt outstanding at end of period $3,805 $3,743 $3,379 $3,730 $3,738 $4,401
(1) Ratios and portfolio turnover have been annualized and total return has not
been annualized.
(2) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
each period reported. Dividends and distributions, if any, are assumed for
the purpose of this calculation, to be reinvested at prices obtained under
the Fund's dividend reinvestment plan. Generally, total investment return
based on net asset value will be higher than total investment return based
on market value in periods where there is an increase in the discount or
decrease in the premium of the market value to the net asset value from the
beginning to the end of such periods. Conversely, total investment return
based on net asset value will be lower than total investment return based on
market value in periods where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such periods.
(3) Adjusted average net assets excludes debt outstanding.
(4) As required, effective December 1, 2001, the Fund adopted the provisions of
the AICPA Audit and Accounting Guide for Investment Companies that requires
amortization of all premium and discounts on debt securities. The effect of
this change for the year ended November 30, 2002 was a decrease in net
investment income per share of $0.025, an increase in net realized and
unrealized gain (loss) per share of $0.025, a decrease in the ratio of net
investment income to average net assets of 0.22%, and a decrease in the
ratio of net investment income to adjusted net assets of 0.16%. Per share
data and ratios for the periods prior to December 1, 2001 have not been
restated to reflect this change in accounting.
(5) The average shares outstanding method has been applied for per share
information.
(6) See Note 4 in "Notes to Financial Statements."
See accompanying notes
9
NOTES DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.
TO FINANCIAL STATEMENTS May 31, 2004 (Unaudited)
Delaware Investments Dividend and Income Fund, Inc. (the "Fund") is organized as
a Maryland corporation and is a diversified closed-end management investment
company under the Investment Company Act of 1940, as amended. The Fund's shares
trade on the New York Stock Exchange under the symbol DDF.
The investment objective of the Fund is to seek high current income. Capital
appreciation is a secondary objective.
1. SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies are in accordance with U.S. generally accepted
accounting principles and are consistently followed by 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. U.S. government and agency securities are
valued at the mean between the bid and asked prices. 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. 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 6).
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 Family of
Funds are allocated amongst the funds on the basis of average net assets.
Management fees and other expenses are paid monthly. Security transactions are
recorded on the date the securities are purchased or sold (trade date). 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 are amortized to interest income over the lives of
the respective securities. Distributions received from investments in Real
Estate Investment Trusts are recorded as dividend income on ex-dividend date,
subject to reclassification upon notice of the character of such distribution by
the issuer.
Through March 31, 2004 certain expenses of the Fund were paid through commission
arrangements with brokers. The amount of these expenses was approximately $1,266
for the six months ended May 31, 2004. The expense paid under the above
arrangement is included in "other" on the Statement of Operations with the
corresponding expense offset shown as "expenses paid indirectly."
2. INVESTMENT MANAGEMENT, ADMINISTRATION AGREEMENTS AND
OTHER TRANSACTIONS WITH AFFILIATES
In accordance with the terms of its investment management agreement, the Fund
pays Delaware Management Company (DMC), a series of Delaware Management Business
Trust and the investment manager, an annual fee of 0.55%, which is calculated
daily based on the adjusted average weekly net assets.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide accounting and administration services. The Fund pays DSC a monthly
fee computed at the annual rate of 0.05% of the Fund's adjusted average weekly
net assets, subject to an annual minimum of $85,000.
For purposes of the calculation of investment management fees and administration
fees, adjusted average weekly net assets does not include the commercial paper
liability.
At May 31, 2004, the Fund had liabilities payable to affiliates as
follows:
Investment management fee payable to DMC $93,938
Accounting and administration fees
and other expenses payable to DSC 47,795
Other expense payable to DMC and affiliates* 6,461
*DMC, as part of its administration services, pays operating expenses on behalf
of the Fund and is reimbursed on a periodic basis. Such expenses include items
such as printing of shareholder reports, fees for audit, legal and tax
services, stock exchange fees, custodian fees and directors fees.
As provided in the investment management agreement, the Fund bears
the cost of certain legal services expenses, including in house legal services
provided to the Fund by DMC employees. For the six months ended May 31, 2004,
the Fund had costs of $5,104.
Certain officers of DMC and DSC are officers and/or directors the Fund. These
officers and directors are paid no compensation by the Fund.
3. INVESTMENTS
For the six months ended May 31, 2004, the Fund made purchases of $103,477,139
and sales of $109,420,798 of investment securities other than U.S. government
securities and short-term investments.
At May 31, 2004, 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 May 31, 2004, the cost of investments was $190,038,925. At
May 31, 2004, the net unrealized appreciation was $20,036,967, of which
$27,634,358 related to unrealized appreciation of investments and $7,597,391
related to unrealized depreciation of investments.
10
NOTES DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.
TO FINANCIAL STATEMENTS (CONTINUED)
4. DIVIDEND AND DISTRIBUTION INFORMATION
Income and long-term capital gain distributions are determined in accordance
with federal income tax regulations, which may differ from U.S. generally
accepted accounting principles. The tax character of dividends and distributions
paid during the six months ended May 31, 2004 and year ended November 30, 2003
were as follows:
Six Months Year
Ended Ended
5/31/04* 11/30/03
------------- -----------
Ordinary income $3,979,884 $9,189,360
Return of capital 2,201,123 5,490,473
---------- -----------
Total $6,181,007 $14,679,833
========== ===========
*Tax information for the six months ended May 31, 2004 is an estimate and the
tax character of dividends and distributions may be redesignated at fiscal year
end.
The components of net assets for federal income tax purposes are estimated
since final tax characteristics cannot be determined until fiscal year end. As
of May 31, 2004, the estimated components of net assets on a tax basis were as
follows:
Shares of beneficial interest $153,248,420
Capital loss carryforwards (19,365,503)
Unrealized appreciation of investments 20,036,967
------------
Net assets $153,919,884
============
The differences between book basis and tax basis components of net assets are
primarily attributable to tax deferral of losses on wash sales and tax treatment
of market discount and premium on debt instruments.
For financial reporting purposes, capital accounts and distributions to
shareholders are adjusted to reflect the tax character of book/tax differences.
For the six months ended May 31, 2004, the Fund recorded an estimate of these
differences since the final tax characteristics cannot be determined until
fiscal year end. Reclassifications are primarily due to tax treatment of gain
(loss) on foreign currency transactions and market discount and premium on
certain debt instruments. Results of operations and net assets were not affected
by these reclassifications.
Undistributed net investment income $2,463,789
Accumulated realized gain (loss) (262,667)
Paid in capital (2,201,122)
At November 30, 2003, for federal income tax purposes, the Fund had capital loss
carryforwards of $24,106,870 which may be carried forward and applied against
future capital gains. Such capital loss carryforwards expire as follows:
$6,557,294 expires in 2009, $15,759,675 expires in 2010 and $1,789,901 expires
in 2011.
For the six months ended May 31, 2004, the Fund had capital gains of $4,741,367,
which may be offset by the capital loss carryforwards.
5. CAPITAL STOCK
The Fund did not have any transactions in common shares during the six months
ended May 31, 2004.
Shares issuable under the Fund's dividend reinvestment plan are purchased by the
Fund's transfer agent, Mellon Investor Services, LLC, in the open market.
6. COMMERCIAL PAPER
As of May 31, 2004, $55,000,000 (par value) of commercial paper was outstanding
with an amortized cost of $54,883,034. The weighted average discount rate of
commercial paper outstanding at May 31, 2004, was 1.16%. The average daily
balance of commercial paper outstanding during the six months ended May 31,
2004, was $54,901,101 at a weighted discount rate of 1.16%. The maximum amount
of commercial paper outstanding at any time during the six months was
$55,000,000. 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
with a scheduled termination date of January 6, 2005. Interest on borrowings is
based on market rates in effect at the time of borrowing. The commitment fee is
computed at the rate of 0.15% per annum on the unused balance. For the six
months ended May 31, 2004, the Fund was charged a commitment fee of $22,875,
which is included in "commercial paper fees" on the Statement of Operations.
During the six months ended May 31, 2004, there were no borrowings under this
arrangement.
7. SECURITIES LENDING
The Fund, along with other funds in the Delaware Investments 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. government 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 fair 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 Funds records security
lending income net of such allocation.
At May 31, 2004, the market value of securities on loan was $28,232,652 for
which the Fund received securities collateral, comprised of U.S. government
obligations valued at $8,834,651 and cash collateral of $19,904,843. Investments
purchased with the cash collateral are presented on the Statement of Net Assets
under the caption "Securities Lending Collateral."
11
NOTES
TO FINANCIAL STATEMENTS (CONTINUED)
DELAWARE INVESTMENTS DIVIDEND AND INCOME FUND, INC.
8. CREDIT AND MARKET RISKS
The Fund invests in high-yield fixed income securities, which carry ratings of
BB or lower by Standard & Poor's Ratings Group and 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 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.
The Fund invests in real estate investment trusts (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 six months ended May 31,
2004. 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.
9. CONTRACTUAL OBLIGATIONS
The Fund enters into contracts in the normal course of business that contain a
variety of indemnifications. The Fund's maximum exposure under these
arrangements is unknown. However, the Fund has not had prior claims or losses
pursuant to these contracts. Management has reviewed the Fund's existing
contracts and expects the risk of loss to be remote.
12
Delaware [Graphic Omitted]
Investments(SM)
--------------------------------------
A member of Lincoln Financial Group(R)
This semiannual report is for the information of Delaware Investments Dividend
and Income Fund, Inc. shareholders. The figures in this report represent past
results which are not a guarantee of future results. The return and principal
value of an investment in the Fund will fluctuate so that shares, when sold, may
be worth more or less than their original cost.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may, from time to time, purchase shares of its
Common Stock on the open market at market prices.
BOARD OF DIRECTORS AFFILIATED OFFICERS CONTACT INFORMATION
JUDE T. DRISCOLL JOSEPH H. HASTINGS INVESTMENT MANAGER
Chairman Executive Vice President and Delaware Management Company
Delaware Investments Family of Funds Chief Financial Officer Philadelphia, PA
Philadelphia, PA Delaware Investments Family of Funds
Philadelphia, PA INTERNATIONAL AFFILIATE
WALTER P. BABICH Delaware International Advisers Ltd.
Board Chairman RICHELLE S. MAESTRO London, England
Citadel Construction Corporation Executive Vice President,
King of Prussia, PA Chief Legal Officer and Secretary PRINCIPAL OFFICE OF THE FUND
Delaware Investments Family of Funds 2005 Market Street
JOHN H. DURHAM Philadelphia, PA Philadelphia, PA 19103
Private Investor
Gwynedd Valley, PA MICHAEL P. BISHOF INDEPENDENT AUDITORS
Senior Vice President and Treasurer Ernst & Young LLP
JOHN A. FRY Delaware Investments Family of Funds 2001 Market Street
President Philadelphia, PA Philadelphia, PA 19103
Franklin & Marshall College
Lancaster, PA REGISTRANT AND STOCK TRANSFER AGENT
Mellon Investor Services, LLC
ANTHONY D. KNERR Overpeck Centre
Managing Director 85 Challenger Road
Anthony Knerr & Associates Ridgefield, NJ 07660
New York, NY 800 851-9677
ANN R. LEVEN+ FOR SECURITIES DEALERS AND FINANCIAL
Former Treasurer/Chief Fiscal Officer INSTITUTIONS REPRESENTATIVES ONLY
National Gallery of Art 800 362-7500
Washington, DC
WEB SITE
THOMAS F. MADISON+ www.delawareinvestments.com
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
JANET L. YEOMANS+
Vice President/Mergers & Acquisitions
3M Corporation
St. Paul, MN
--------------------------------------------------------------------------------
YOUR REINVESTMENT OPTIONS
Delaware Investments Dividend and Income Fund, Inc. offers an automatic dividend
reinvestment program. If you would like to reinvest dividends, and shares are
registered in your name, contact Mellon Investor Services, LLC at 800 851-9677.
You will be asked to put your request in writing. If you have shares registered
in "street" name, contact the broker/dealer holding the shares or your financial
advisor.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A description of the policies and procedures that the Fund uses to determine how
to vote proxies (if any) relating to portfolio securities is available without
charge (i) upon request, by calling 800 523-1918; (ii) on the Fund's website at
http://www.delawareinvestments.com; and (iii) on the Commission's website at
http://www.sec.gov; and beginning no later than August 31, 2004, information (if
any) regarding how the Fund voted proxies relating to portfolio securities
during the most recent 12-month period ended June 30 is available without charge
(i) through the Fund's website at http://www.delawareinvestments.com; and (ii)
on the Commission's website at http://www.sec.gov.
--------------------------------------------------------------------------------
+Audit Committee Member
(8781) Printed in the USA
SA-DDF [5/04] IVES 7/04 J9722
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Companies and Affiliated Purchasers
Required only for periods ending on or after June 15, 2004.
Item 9. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 10. 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
half-year that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
Item 11. Exhibits
(a) (1) Code of Ethics
Not applicable.
(2) Certifications of Principal Executive Officer and Principal Financial
Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are
attached hereto as Exhibit 99.CERT.
(3) Written solicitations to purchase securities pursuant to Rule 23c-1
under the Securities Exchange Act of 1934.
Not applicable.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are
furnished herewith as Exhibit 99.906CERT.
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.
NAME OF REGISTRANT: Delaware Investments Dividend & Income Fund, Inc.
JUDE T. DRISCOLL
------------------------------
By: Jude T. Driscoll
Title: Chairman
Date: 8/5/04
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: Chairman
Date: 8/5/04
JOSEPH H. HASTINGS
------------------------------
By: Joseph H. Hastings
Title: Chief Financial Officer
Date: 8/5/04