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 and Income Fund, Inc.
Address of principal executive offices:
2005 Market Street
Philadelphia, PA 19103
Name and address of agent for service:
David F. Connor, 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, 2006
Item 1. Reports to Stockholders
Semiannual Report Delaware
Investments
Dividend and
Income Fund, Inc.
May 31, 2006
[DELAWARE LOGO] Closed-End
Table of contents
> Sector allocation ...........................................................1
> Statement of net assets .....................................................2
> Statement of operations ....................................................10
> Statements of changes in net assets ........................................11
> Statement of cash flows ....................................................12
> Financial highlights .......................................................13
> Notes to financial statements ..............................................14
> Other Fund information .....................................................17
> About the organization .....................................................19
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) 2006 Delaware Distributors, L.P.
Sector allocation
Delaware Investments Dividend and Income Fund, Inc.
As of May 31, 2006
Percentage
Sector of Net Assets
________________________________________________________________________________
Common Stock 75.03%
Consumer Discretionary 5.97%
Consumer Staples 6.88%
Energy 3.27%
Financials 12.86%
Health Care 9.74%
Health Care REITs 0.74%
Industrial REITs 2.30%
Industrials 4.26%
Information Technology 6.19%
Lodging REITs 1.50%
Mall REITs 2.64%
Manufactured Housing REITs 0.53%
Materials 1.58%
Mortgage REITs 6.50%
Office REITs 3.71%
Shopping Center REITs 0.65%
Specialty REITs 0.77%
Telecommunications 3.30%
Utilities 1.64%
________________________________________________________________________________
Convertible Preferred Stock 4.08%
Banking, Finance & Insurance 1.50%
Basic Materials 0.35%
Cable, Media & Publishing 0.23%
Consumer Products 0.34%
Energy 0.46%
Food, Beverage & Tobacco 0.34%
Telecommunications 0.14%
Utilities 0.72%
________________________________________________________________________________
Preferred Stock 5.72%
Leisure, Lodging & Entertainment 1.04%
Real Estate 4.68%
________________________________________________________________________________
Commercial Mortgage-Backed Securities 0.20%
________________________________________________________________________________
Convertible Bonds 7.70%
Aerospace & Defense 0.53%
Cable, Media & Publishing 0.36%
Computers & Technology 1.14%
Energy 0.96%
Health Care & Pharmaceuticals 1.25%
Leisure, Lodging & Entertainment 0.48%
Real Estate 0.79%
Retail 0.92%
Technology 0.37%
Telecommunications 0.17%
Transportation 0.12%
Utilities 0.61%
________________________________________________________________________________
Corporate Bonds 30.63%
Banking 0.17%
Basic Industry 3.47%
Brokerage 0.78%
Capital Goods 1.88%
Consumer Cyclical 2.73%
Consumer Non-Cyclical 3.13%
Energy 2.13%
Financials 0.19%
Media 4.08%
Real Estate 0.67%
Services Cyclical 3.85%
Services Non-Cyclical 1.70%
Technology & Electronics 0.67%
Telecommunications 3.62%
Utilities 1.56%
________________________________________________________________________________
Warrant 0.00%
________________________________________________________________________________
Repurchase Agreements 8.53%
________________________________________________________________________________
Securities Lending Collateral 17.76%
Fixed Rate Notes 4.79%
Variable Rate Notes 12.97%
________________________________________________________________________________
Total Market Value of Securities 149.65%
________________________________________________________________________________
Obligation to Return Securities Lending
Collateral (17.76%)
________________________________________________________________________________
Commercial Paper Payable (32.24%)
________________________________________________________________________________
Receivables and Other Assets Net of
Liabilities 0.35%
________________________________________________________________________________
Total Net Assets 100.00%
________________________________________________________________________________
1
Statement of net assets
Delaware Investments Dividend and Income Fund, Inc.
May 31, 2006 (Unaudited)
Number of Market
Shares Value
________________________________________________________________________________
Common Stock - 75.03%
________________________________________________________________________________
Consumer Discretionary - 5.97%
=@+||Avado Brands 1,390 $ 1,307
Gap 132,200 2,406,040
*+Great Wolf Resorts 74,100 875,862
Limited Brands 104,000 2,824,640
Mattel 160,200 2,692,962
*+XM Satellite Radio Holdings
Class A 2,000 28,840
___________
8,829,651
___________
Consumer Staples - 6.88%
*B&G Foods 6,250 96,250
ConAgra Foods 117,600 2,657,760
Heinz (H.J.) 64,600 2,735,810
Kimberly-Clark 39,000 2,366,130
Safeway 98,300 2,317,914
___________
10,173,864
___________
Energy - 3.27%
Chevron 41,000 2,451,390
ConocoPhillips 34,900 2,208,821
*+Petroleum Geo-Services ADR 2,667 170,021
___________
4,830,232
___________
Financials - 12.86%
Allstate 43,000 2,365,430
Aon 64,700 2,306,555
Chubb 47,600 2,405,228
Hartford Financial Services Group 27,100 2,383,174
Huntington Bancshares 97,900 2,302,608
Morgan Stanley 41,000 2,444,420
Wachovia 44,000 2,354,000
Washington Mutual 53,400 2,451,593
___________
19,013,008
___________
Health Care - 9.74%
Abbott Laboratories 59,000 2,519,300
Baxter International 60,900 2,295,930
Bristol-Myers Squibb 101,200 2,484,460
Merck 73,100 2,433,499
Pfizer 99,700 2,358,902
Wyeth 50,500 2,309,870
___________
14,401,961
___________
Health Care REITs - 0.74%
#Medical Properties Trust 144A 35,000 423,850
Ventas 20,700 671,508
___________
1,095,358
___________
Industrial REITs - 2.30%
AMB Property 27,700 1,369,211
ProLogis 41,100 2,032,395
___________
3,401,606
___________
Industrials - 4.26%
Donnelley (R.R.) & Sons 74,700 2,403,857
*+Foster Wheeler 6,960 307,974
Macquarie Infrastructure 40,800 1,134,240
Waste Management 66,800 2,446,217
___________
6,292,288
___________
Information Technology - 6.19%
Hewlett-Packard 72,600 $ 2,350,788
Intel 129,100 2,326,382
International Business Machines 28,700 2,293,130
+Xerox 158,700 2,178,951
___________
9,149,251
___________
Lodging REITs - 1.50%
*Highland Hospitality 58,400 706,640
*Strategic Hotels & Resorts 73,400 1,506,168
___________
2,212,808
___________
Mall REITs - 2.64%
General Growth Properties 6 263
Macerich 12,800 882,048
Simon Property Group 37,900 3,017,977
___________
3,900,288
___________
Manufactured Housing REITs - 0.53%
Equity Lifestyle Properties 18,100 781,015
___________
781,015
___________
Materials - 1.58%
duPont (E.I.) deNemours 54,700 2,326,391
___________
2,326,391
___________
Mortgage REITs - 6.50%
*American Home Mortgage
Investment 67,000 2,235,790
*Gramercy Capital 84,000 2,197,440
JER Investors Trust 56,000 875,280
||KKR Financial 91,300 1,967,515
||Peoples Choice 176,700 971,850
*Saxon Capital 122,400 1,364,760
___________
9,612,635
___________
Office REITs - 3.71%
Brandywine Realty Trust 46,348 1,345,019
Duke Realty 76,600 2,599,804
*Reckson Associates Realty 40,120 1,542,213
___________
5,487,036
___________
Shopping Center REITs - 0.65%
Cedar Shopping Centers 31,000 450,740
*Ramco-Gershenson Properties 19,400 504,400
___________
955,140
___________
Specialty REITs - 0.77%
*Entertainment Properties Trust 27,800 1,141,190
___________
1,141,190
___________
Telecommunications - 3.30%
AT&T 94,900 2,473,094
Verizon Communications 77,200 2,409,412
___________
4,882,506
___________
Utilities - 1.64%
+Mirant 8,223 204,588
Progress Energy 52,900 2,223,916
___________
2,428,504
___________
Total Common Stock
(cost $102,270,856) 110,914,732
___________
2
Number of Market
Shares Value
________________________________________________________________________________
Convertible Preferred Stock - 4.08%
________________________________________________________________________________
Banking, Finance & Insurance - 1.50%
Aspen Insurance 5.625%
exercise price $29.28,
expiration date 12/31/49 8,800 $ 424,600
Chubb 7.00% exercise price
$35.70, expiration date
8/16/06 15,000 532,650
~Citigroup Funding 5.02%
exercise price $29.50,
expiration date 9/27/08 17,000 545,020
E Trade Group 6.125% exercise
price $21.82, expiration date
11/18/08 9,000 283,500
*Lehman Brothers Holdings
6.25% exercise price $54.24,
expiration date 10/15/07 16,000 434,000
___________
2,219,770
___________
Basic Materials - 0.35%
Huntsman 5.00% exercise price
$28.29, expiration date
2/16/08 12,400 519,250
___________
519,250
___________
Cable, Media & Publishing - 0.23%
*#Interpublic 5.25% 144A
exercise price $13.66,
expiration date 12/31/49 360 337,950
___________
337,950
___________
Consumer Products - 0.34%
Newell Financial Trust I 5.25%
exercise price $50.69,
expiration date 12/1/27 11,630 507,359
___________
507,359
___________
Energy - 0.46%
*Chesapeake 4.50% exercise
price $44.17, expiration date
12/31/49 3,650 340,363
El Paso Energy Capital Trust
4.75% exercise price $41.59,
expiration date 3/31/28 9,250 336,700
___________
677,063
___________
Food, Beverage & Tobacco - 0.34%
*Constellation Brands 5.75%
exercise price $17.08,
expiration date 9/1/06 13,800 500,250
___________
500,250
___________
Telecommunications - 0.14%
Lucent Technologies Capital Trust I
7.75% exercise price $4.84,
expiration date 3/15/17 205 207,229
___________
207,229
___________
Utilities - 0.72%
Entergy 7.625% exercise price
$87.64, expiration date
2/17/09 9,000 453,375
NRG Energy 5.75% exercise
price $60.45, expiration date
3/16/09 2,450 $ 617,706
___________
1,071,081
___________
Total Convertible Preferred Stock
(cost $6,031,141) 6,039,952
___________
________________________________________________________________________________
Preferred Stock - 5.72%
________________________________________________________________________________
Leisure, Lodging & Entertainment - 1.04%
Red Lion Hotels 9.50% 58,000 1,530,040
___________
1,530,040
___________
Real Estate - 4.68%
Equity Inns Series B 8.75% 35,700 926,415
LaSalle Hotel Properties 10.25% 113,200 2,932,446
Ramco-Gershenson Properties
9.50% 40,000 1,026,000
SL Green Realty 7.625% 80,000 2,037,504
___________
6,922,365
___________
Total Preferred Stock
(cost $8,172,500) 8,452,405
___________
Principal
Amount
________________________________________________________________________________
Commercial Mortgage-Backed Securities - 0.20%
________________________________________________________________________________
#First Union National Bank
Commercial Mortgage Series
2001-C2 L 144A 6.46%
1/12/43 $300,000 298,137
___________
Total Commercial Mortgage-Backed
Securities (cost $304,488) 298,137
___________
________________________________________________________________________________
Convertible Bonds - 7.70%
________________________________________________________________________________
Aerospace & Defense - 0.53%
#AAR 144A 1.75% 2/1/26
exercise price $29.43,
expiration date 2/1/26 260,000 262,275
EDO 4.00% 11/15/25 exercise
price $34.19, expiration date
11/15/25 235,000 238,231
#L-3 Communications 144A
3.00% 8/1/35 exercise price
$102.31, expiration date
8/1/35 290,000 282,750
___________
783,256
___________
Cable, Media & Publishing - 0.36%
#Playboy Enterprises 144A
3.00% 3/15/25 exercise
price $17.02, expiration date
3/15/25 600,000 522,750
___________
522,750
___________
(continues) 3
Statement of net assets
Delaware Investments Dividend and Income Fund, Inc.
May 31, 2006 (Unaudited)
Principal Market
Amount Value
________________________________________________________________________________
Convertible Bonds (continued)
________________________________________________________________________________
Computers & Technology - 1.14%
Hutchinson Technology 3.25%
1/15/26 exercise price
$36.43, expiration date
1/15/26 $340,000 $ 309,400
#Informatica 144A 3.00%
3/15/26 exercise price
$20.00, expiration date
3/15/26 510,000 517,012
#Intel 144A 2.95% 12/15/35
exercise price $31.53,
expiration date 12/15/35 255,000 211,013
SanDisk 1.00% 5/15/13 exercise
price $82.36, expiration date
5/15/13 165,000 156,956
#Sybase 144A 1.75% 2/22/25
exercise price $25.22,
expiration date 2/22/25 500,000 491,250
__________
1,685,631
__________
Energy - 0.96%
Halliburton 3.125% 7/15/23
exercise price $37.65,
expiration date 7/15/23 250,000 505,313
Pride International 3.25%
5/1/33 exercise price $25.70,
expiration date 5/1/33 230,000 316,538
Schlumberger 2.125% 6/1/23
exercise price $40.00,
expiration date 6/1/23 360,000 601,199
__________
1,423,050
__________
Health Care & Pharmaceuticals - 1.25%
#Allergan 144A 1.50% 4/1/26
exercise price $126.66,
expiration date 4/1/26 415,000 394,769
#Amgen 144A 0.375% 2/1/13
exercise price $79.48,
expiration date 2/1/13 165,000 158,400
CV Therapeutics 3.25% 8/16/13
exercise price $27.00,
expiration date 8/16/13 125,000 115,000
Encysive Pharmaceuticals
2.50% 3/15/12 exercise
price $13.95, expiration date
3/15/12 630,000 445,724
#Nektar Therapeutics 144A
3.25% 9/28/12 exercise
price $21.52, expiration date
9/28/12 350,000 395,938
Teva Pharmaceutical Finance
0.25% 2/1/26 exercise price
$47.16, expiration date
2/1/26 345,000 337,238
__________
1,847,069
__________
Leisure, Lodging & Entertainment - 0.48%
#Regal Entertainment Group
144A 3.75% 5/15/08 exercise
price $14.97, expiration date
5/15/08 550,000 712,250
__________
712,250
__________
Real Estate - 0.79%
MeriStar Hospitality 9.50%
4/1/10 exercise price $10.18,
expiration date 4/1/10 1,100,000 1,172,875
__________
1,172,875
__________
Retail - 0.92%
*%Dick's Sporting Goods 1.606%
2/18/24 exercise price
$58.13, expiration date
2/18/24 380,000 286,900
~Lowe's Companies 0.861%
10/19/21 exercise price
$50.03, expiration date
10/19/21 280,000 305,200
#Saks 144A 2.00% 3/15/24
exercise price $14.92,
expiration date 3/15/24 425,000 490,344
#United Auto Group 144A 3.50%
4/1/26 exercise price $23.69,
expiration date 4/1/26 260,000 279,500
__________
1,361,944
__________
Technology - 0.37%
#Mercury Interactive 144A
4.75% 7/1/07 exercise price
$111.25, expiration date
7/1/07 550,000 549,313
__________
549,313
__________
Telecommunications - 0.17%
Qwest Communications
International 3.50% 11/15/25
exercise price $5.90,
expiration date 11/15/25 180,000 245,025
__________
245,025
__________
Transportation - 0.12%
*#ExpressJet Holdings 144A 4.25%
8/1/23 exercise price $18.20,
expiration date 8/1/23 200,000 180,750
__________
180,750
__________
Utilities - 0.61%
#CenterPoint Energy 144A
3.75% 5/15/23 exercise
price $11.44, expiration date
5/15/23 800,000 896,000
__________
896,000
__________
Total Convertible Bonds
(cost $11,053,817) 11,379,913
__________
4
Principal Market
Amount Value
________________________________________________________________________________
Convertible Bonds (continued)
________________________________________________________________________________
Banking - 0.17%
Western Financial Bank 9.625%
5/15/12 $225,000 $ 249,750
__________
249,750
__________
Basic Industry - 3.47%
Abitibi-Consolidated
6.95% 12/15/06 20,000 20,200
*7.875% 8/1/09 200,000 197,500
*AK Steel 7.875% 2/15/09 340,000 339,150
Bowater 9.50% 10/15/12 575,000 589,374
Georgia-Pacific
8.875% 5/15/31 70,000 72,100
9.50% 12/1/11 300,000 322,500
Gold Kist 10.25% 3/15/14 205,000 217,300
*Lyondell Chemical 10.50%
6/1/13 45,000 50,625
*#Nell AF Sarl 144A 8.375%
8/15/15 325,000 322,563
NewPage 10.00% 5/1/12 205,000 217,813
Norske Skog 8.625% 6/15/11 400,000 400,000
#Port Townsend Paper 144A
12.00% 4/15/11 450,000 373,500
Potlatch 13.00% 12/1/09 475,000 560,691
*Rhodia 8.875% 6/1/11 98,000 99,470
Smurfit Capital Funding 7.50%
11/20/25 220,000 204,600
*++Solutia 6.72% 10/15/37 465,000 434,775
Tembec Industries 8.625%
6/30/09 845,000 477,425
Witco 6.875% 2/1/26 250,000 226,250
__________
5,125,836
__________
Brokerage - 0.78%
E Trade Financial 8.00% 6/15/11 465,000 483,600
LaBranche & Company
9.50% 5/15/09 300,000 320,250
11.00% 5/15/12 320,000 352,800
__________
1,156,650
__________
Capital Goods - 1.88%
Armor Holdings 8.25% 8/15/13 225,000 237,938
#Compression Polymer 144A
10.50% 7/1/13 125,000 130,625
*Graham Packaging 9.875%
10/15/14 250,000 256,250
Interface 10.375% 2/1/10 290,000 320,088
Interline Brands 11.50% 5/15/11 576,000 640,799
Intertape Polymer 8.50% 8/1/14 405,000 382,725
?Mueller Holdings 14.75%
4/15/14 285,000 240,825
#Panolam Industrial 144A
10.75% 10/1/13 220,000 217,800
Trimas 9.875% 6/15/12 370,000 355,200
__________
2,782,250
__________
Consumer Cyclical - 2.73%
*Accuride 8.50% 2/1/15 250,000 245,625
Ford Motor Credit 7.375%
10/28/09 300,000 276,527
*General Motors 8.375% 7/15/33 125,000 95,469
General Motors Acceptance
Corporation
6.875% 9/15/11 385,000 362,067
*8.00% 11/1/31 250,000 235,435
Landry's Restaurant 7.50%
12/15/14 305,000 287,463
Mandalay Resort Group 9.50%
8/1/08 360,000 385,199
*Metaldyne 10.00% 11/1/13 405,000 390,824
#Neiman Marcus 144A 9.00%
10/15/15 230,000 240,638
*#NPC International 144A 9.50%
5/1/14 350,000 351,750
*O'Charleys 9.00% 11/1/13 225,000 231,188
*#Uno Restaurant 144A 10.00%
2/15/11 175,000 141,750
*Visteon
7.00% 3/10/14 75,000 62,438
8.25% 8/1/10 230,000 215,050
*Warnaco 8.875% 6/15/13 500,000 517,499
__________
4,038,922
__________
Consumer Non-Cyclical - 3.13%
#Angiotech Pharmaceuticals 144A
7.75% 4/1/14 270,000 270,675
Biovail 7.875% 4/1/10 660,000 671,549
Constellation Brands 8.125%
1/15/12 130,000 134,225
Cott Beverages 8.00% 12/15/11 250,000 251,875
*Del Laboratories 8.00% 2/1/12 140,000 115,500
Doane Pet Care 10.625%
11/15/15 195,000 243,424
*Dole Food 8.875% 3/15/11 215,000 211,506
#iPayment 144A 9.75% 5/15/14 200,000 201,500
#Le-Natures 144A 10.00%
6/15/13 255,000 268,706
Marsh Supermarket 8.875%
8/1/07 45,000 44,663
National Beef Packing 10.50%
8/1/11 305,000 308,050
Pilgrim's Pride 9.625% 9/15/11 320,000 336,800
*Pinnacle Foods 8.25% 12/1/13 275,000 271,563
Playtex Products 9.375% 6/1/11 350,000 366,625
RJ Reynolds Tobacco Holdings
7.875% 5/15/09 100,000 103,500
True Temper Sports 8.375%
9/15/11 390,000 366,600
*Warner Chilcott 8.75% 2/1/15 455,000 456,138
__________
4,622,899
__________
(continues) 5
Statement of net assets
Delaware Investments Dividend and Income Fund, Inc.
May 31, 2006 (Unaudited)
Principal Market
Amount Value
________________________________________________________________________________
Convertible Bonds (continued)
________________________________________________________________________________
Energy - 2.13%
#Basic Energy Services 144A
7.125% 4/15/16 $100,000 $ 97,500
Bluewater Finance 10.25%
2/15/12 280,000 291,200
*#Brigham Exploration 144A
9.625% 5/1/14 95,000 94,644
Compton Petroleum Finance
7.625% 12/1/13 135,000 132,300
#Copano Energy 144A 8.125%
3/1/16 100,000 102,000
El Paso Natural Gas 7.625%
8/1/10 200,000 207,500
El Paso Production Holding
7.75% 6/1/13 350,000 358,750
#Hilcorp Energy I 144A
7.75% 11/1/15 110,000 108,900
10.50% 9/1/10 100,000 109,250
Inergy Finance
6.875% 12/15/14 250,000 236,875
*8.25% 3/1/16 75,000 77,250
Quicksilver Resources 7.125%
4/1/16 200,000 192,000
~Secunda International 13.068%
9/1/12 260,000 274,300
Tennessee Gas Pipeline 8.375%
6/15/32 350,000 384,807
#VeraSun Energy 144A 9.875%
12/15/12 230,000 248,400
*Whiting Petroleum 7.25%
5/1/13 235,000 230,300
__________
3,145,976
__________
Financials - 0.19%
*FINOVA Group 7.50% 11/15/09 863,900 282,927
__________
282,927
__________
Media - 4.08%
}Adelphia Communications
8.125% 7/15/06 325,000 151,125
#Affinion Group 144A 11.50%
10/15/15 125,000 127,813
*CCH I 11.00% 10/1/15 289,000 249,985
*}Century Communications 9.50%
9/1/06 415,000 383,875
*Cenveo 9.625% 3/15/12 190,000 203,419
#Charter Communications 144A
5.875% 11/16/09 165,000 120,244
Charter Communications
Holdings
11.125% 1/15/11 230,000 146,050
?13.50% 1/15/11 690,000 451,950
~#Cleveland Unlimited 144A
13.16% 12/15/10 150,000 159,750
*CSC Holdings 10.50% 5/15/16 495,000 522,225
Dex Media East 12.125%
11/15/12 205,000 232,163
*Insight Midwest 10.50% 11/1/10 725,000 763,968
Lodgenet Entertainment 9.50%
6/15/13 505,000 542,875
*Mediacom Capital 9.50%
1/15/13 545,000 550,450
#RH Donnelley 144A 8.875%
1/15/16 125,000 126,250
Sheridan Acquisition 10.25%
8/15/11 205,000 210,125
*Sirius Satellite 9.625% 8/1/13 75,000 71,250
*Vertis 10.875% 6/15/09 185,000 181,300
Warner Music Group 7.375%
4/15/14 230,000 228,850
#XM Satellite Radio 144A 9.75%
5/1/14 650,000 607,750
__________
6,031,417
__________
Real Estate - 0.67%
American Real Estate Partners
8.125% 6/1/12 365,000 374,125
BF Saul REIT 7.50% 3/1/14 400,000 410,000
#Rouse Company 144A 6.75%
5/1/13 125,000 124,375
Tanger Properties 9.125%
2/15/08 80,000 83,873
__________
992,373
__________
Services Cyclical - 3.85%
*Adesa 7.625% 6/15/12 295,000 297,950
American Airlines 7.379%
5/23/16 109,655 100,257
Brickman Group 11.75%
12/15/09 120,000 130,500
*#CCM Merger 144A 8.00%
8/1/13 350,000 337,750
Corrections Corporation of
America 7.50% 5/1/11 390,000 395,850
FTI Consulting 7.625% 6/15/13 210,000 216,825
*#Galaxy Entertainment Finance
144A 9.875% 12/15/12 400,000 420,000
Gaylord Entertainment 8.00%
11/15/13 180,000 184,500
?H-Lines Finance Holdings
11.00% 4/1/13 491,000 419,805
#Hertz 144A
8.875% 1/1/14 150,000 156,750
*10.50% 1/1/16 65,000 70,688
Horizon Lines 9.00% 11/1/12 176,000 184,800
Kansas City Southern Railway
9.50% 10/1/08 400,000 422,000
#Knowledge Learning 144A
7.75% 2/1/15 315,000 300,431
OMI 7.625% 12/1/13 500,000 500,000
Royal Caribbean Cruises 7.25%
3/15/18 95,000 95,348
Seabulk International 9.50%
8/15/13 250,000 278,750
6
Principal Market
Amount Value
________________________________________________________________________________
Convertible Bonds (continued)
________________________________________________________________________________
Services Cyclical (continued)
Stena 9.625% 12/1/12 $270,000 $ 290,925
?Town Sports International
11.00% 2/1/14 385,000 308,000
Wheeling Island Gaming
10.125% 12/15/09 555,000 579,975
__________
5,691,104
__________
Services Non-Cyclical - 1.70%
Aleris International 9.00%
11/15/14 320,000 333,600
Casella Waste Systems 9.75%
2/1/13 420,000 445,725
#CRC Health 144A 10.75%
2/1/16 415,000 429,525
Geo Subordinate 11.00%
5/15/12 470,000 477,050
US Oncology 10.75% 8/15/14 295,000 327,819
?Vanguard Health 11.25%
10/1/15 665,000 492,100
__________
2,505,819
__________
Technology & Electronics - 0.67%
*Magnachip Semiconductor
8.00% 12/15/14 515,000 450,625
#Sensata Technologies BV 144A
8.00% 5/1/14 45,000 44,550
#Sunguard Data Systems 144A
10.25% 8/15/15 470,000 493,500
__________
988,675
__________
Telecommunications - 3.62%
American Cellular 10.00%
8/1/11 245,000 264,294
*American Tower 7.125%
10/15/12 275,000 282,563
*Cincinnati Bell 8.375% 1/15/14 470,000 477,050
#Digicel Limited 144A 9.25%
9/1/12 275,000 290,125
#Hughes Network Systems 144A
9.50% 4/15/14 425,000 431,375
?Inmarsat Finance 10.375%
11/15/12 600,000 514,499
*iPCS 11.50% 5/1/12 200,000 229,000
~IWO Escrow Company 8.818%
1/15/12 75,000 78,188
*#Nordic Telephone Company
Holdings 144A 8.875%
5/1/16 150,000 155,625
PanAmSat 9.00% 8/15/14 250,000 260,625
*~Qwest 8.16% 6/15/13 325,000 352,219
*Rural Cellular 9.875% 2/1/10 275,000 290,813
*~#Rural Cellular 144A 10.899%
11/1/12 170,000 178,075
#Telcordia Technologies 144A
10.00% 3/15/13 565,000 535,337
Triton Communications 9.375%
2/1/11 260,000 192,400
~US LEC 13.62% 10/1/09 225,000 241,875
*#Wind Acquisition 144A 10.75%
12/1/15 535,000 579,137
__________
5,353,200
__________
Utilities - 1.56%
++#Calpine 144A 9.90% 7/15/07 337,238 329,650
Elwood Energy 8.159% 7/5/26 166,450 179,531
Midwest Generation
8.30% 7/2/09 500,000 512,500
8.75% 5/1/34 275,000 295,625
Mirant Americas 8.30% 5/1/11 475,000 477,375
NRG Energy 7.25% 2/1/14 225,000 225,563
Orion Power 12.00% 5/1/10 250,000 283,125
=++#USGen New England 144A
7.459% 1/2/15 250,000 1,800
__________
2,305,169
__________
Total Corporate Bonds
(cost $45,492,924) 45,272,967
__________
Number of
Shares
________________________________________________________________________________
Warrant - 0.00%
_______________________________________________________________________________
+#Solutia 144A, exercise price
$7.59, expiration date
7/15/09 650 -
__________
Total Warrant (cost $55,294) -
__________
Principal
Amount
________________________________________________________________________________
Repurchase Agreements - 8.53%
________________________________________________________________________________
With BNP Paribas 4.88%
6/1/06 (dated 5/31/06, to be
repurchased at $7,929,075,
collateralized by $2,962,000
U.S. Treasury Notes 2.375%
due 8/31/06, market value
$2,960,345, $2,295,000
U.S. Treasury Notes 2.75%
due 7/31/06, market value
$2,308,098, $1,757,000
U.S. Treasury Notes 2.875%
due 11/30/06, market value
$1,738,132 and $1,014,000
U.S. Treasury Notes 6.50%
due 2/15/10, market value
$1,084,964) $7,928,000 7,928,000
(continues) 7
Statement of net assets
Delaware Investments Dividend and Income Fund, Inc.
May 31, 2006 (Unaudited)
Principal Market
Amount Value
________________________________________________________________________________
Repurchase Agreements (continued)
________________________________________________________________________________
With Cantor Fitzgerald 4.88%
6/1/06 (dated 5/31/06, to be
repurchased at $4,679,634,
collateralized by $2,034,000
U.S. Treasury Notes 2.50%
due 9/30/06, market value
$2,027,084, $2,034,000
U.S. Treasury Notes 3.50%
due 11/15/06, market value
$2,024,618 and $689,000
U.S. Treasury Notes 6.00%
due 8/15/09, market value
$721,815) $4,679,000 $ 4,679,000
___________
Total Repurchase Agreements
(cost $12,607,000) 12,607,000
___________
Total Market Value of Securities Before
Securities Lending Collateral - 131.89%
(cost $185,988,020) 194,965,106
___________
________________________________________________________________________________
Securities Lending Collateral** - 17.76%
________________________________________________________________________________
Short-Term Investments
Fixed Rate Notes - 4.79%
Calyon 5.05% 6/19/06 878,465 878,465
Citigroup Global Markets 5.10%
6/1/06 4,113,507 4,113,507
Deutsche Bank London 5.00%
6/29/06 1,013,614 1,013,614
Washington Mutual Grand
5.00% 6/30/06 1,081,188 1,081,188
___________
7,086,774
___________
~Variable Rate Notes - 12.97%
American Honda Finance 5.07%
2/21/07 608,168 608,168
ANZ National 5.05% 7/2/07 135,148 135,148
Australia New Zealand 5.06%
7/2/07 675,742 675,742
Bank of America 5.07% 2/23/07 878,465 878,465
Bank of New York 5.07% 7/2/07 540,594 540,594
Barclays 5.06% 5/18/07 878,465 878,465
Bayerische Landesbank 5.10%
8/25/06 675,742 675,742
Bear Stearns 5.13% 11/30/06 810,891 810,891
BNP Paribas 5.14% 7/2/07 675,742 675,742
Canadian Imperial Bank
5.06% 7/2/07 337,871 337,871
5.07% 11/22/06 675,742 675,742
CDC Financial Products 5.16%
6/30/06 878,465 878,465
Citigroup Global Markets 5.13%
6/7/06 878,465 878,465
Commonwealth Bank 5.05%
7/2/07 675,742 675,742
Goldman Sachs 5.20% 5/31/07 $878,465 $ 878,465
Manufacturers & Traders 5.07%
9/26/06 675,740 675,692
Marshall & Ilsley Bank 5.06%
7/2/07 743,317 743,317
Merrill Lynch Mortgage Capital
5.16% 6/7/06 608,168 608,168
Morgan Stanley 5.24% 5/31/07 837,921 837,921
National Australia Bank 5.04%
3/7/07 837,921 837,921
National City Bank 5.07% 3/2/07 810,966 811,194
National Rural Utilities 5.07%
7/2/07 1,067,673 1,067,673
Nordea Bank New York 5.06%
5/16/07 337,870 337,854
Nordea Bank Norge 5.06%
7/2/07 675,742 675,742
Royal Bank of Scotland 5.07%
7/2/07 675,742 675,742
Societe Generale 4.99% 7/2/07 337,871 337,871
Toyota Motor Credit 5.05%
6/23/06 675,744 675,747
Wells Fargo 5.07% 7/2/07 675,742 675,742
____________
19,164,291
____________
Total Securities Lending Collateral
(cost $26,251,065) 26,251,065
____________
Total Market Value of Securities - 149.65%
(cost $212,239,085) 221,216,171!
____________
Obligation to Return Securities
Lending Collateral - (17.76%)** (26,251,065)
Commercial Paper Payable - (32.24%)
(par $48,000,000) (47,664,550)
Receivables and Other Assets Net
of Liabilities - 0.35% 522,157
____________
Net Assets Applicable to 11,588,670
Shares Outstanding; Equivalent
to $12.76 per Share - 100.00% $147,822,713
____________
8
________________________________________________________________________________
________________________________________________________________________________
Components of Net Assets at May 31, 2006:
Common stock, $0.01 par
value, 500,000,000 shares
authorized to the Fund $134,704,945
Accumulated net realized gain
on investments 4,140,682
Net unrealized appreciation of
investments 8,977,086
____________
Total net assets $147,822,713
____________
@ Illiquid security. At May 31, 2006, the aggregate amount of illiquid
securities equaled $1,307, which represented 0.001% of the Fund's net
assets. See Note 8 in "Notes to Financial Statements."
+ Non-income producing security for the period ended May 31, 2006.
} Security is currently in default. The issue has missed the maturity date.
Bankruptcy proceedings are in process to determine distribution of assets.
The date listed is the estimate of when proceedings will be finalized.
++ Non-income producing security. Security is currently in default.
? Step coupon bond. Indicates security that has a zero coupon that remains in
effect until a predetermined date at which time the stated interest rate
becomes effective.
% Step coupon bond. Coupon increases/decreases periodically based on a
predetermined schedule. Stated interest rate in effect at May 31, 2006.
~ Variable rate security. The interest rate shown is the rate as of May 31,
2006.
# Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. At May 31, 2006, the aggregate amount of Rule 144A
securities equaled $16,704,952, which represented 11.30% of the Fund's net
assets. See Note 8 in "Notes to Financial Statements."
= Security is being fair valued in accordance with the Fund's fair valuation
policy. At May 31, 2006, the aggregate amount of fair valued securities
equaled $3,107, which represented 0.002% of the Fund's net assets. See
Note 1 in "Notes to Financial Statements."
|| Restricted Security. Investment in a security not registered under the
Securities Act of 1933, as amended. This security has certain restrictions
on resale which may limit its liquidity. At May 31, 2006, the aggregate
amount of restricted securities equaled $2,940,672 or 1.99% of the Fund's
net assets. See Note 8 in "Notes to Financial Statements."
* Fully or partially on loan.
** See Note 7 in "Notes to Financial Statements."
! Includes $25,302,817 of securities loaned.
Summary of Abbreviations
ADR - American Depositary Receipts
REIT - Real Estate Investment Trust
See accompanying notes
9
Statement of operations
Delaware Investments Dividend and Income Fund, Inc.
Six Months Ended May 31, 2006 (Unaudited)
Investment Income:
Dividends $ 1,912,561
Interest 2,441,636
Securities lending income 38,037 $ 4,392,234
___________ ___________
Expenses:
Management fees 540,920
Reports to shareholders 66,088
Commercial paper fees 49,832
Accounting and administration expenses 39,231
Dividend disbursing and transfer agent fees and expenses 35,150
Legal and professional fees 18,964
NYSE fees 12,498
Taxes (other than taxes on income) 6,097
Directors' fees 4,037
Pricing fees 3,079
Custodian fees 2,888
Other 7,682
___________
Total operating expenses (before interest expense) 786,466
Interest expense 1,116,127
___________
Total operating expenses (after interest expense) 1,902,593
___________
Net Investment Income 2,489,641
___________
Net Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments 7,099,438
Net change in unrealized appreciation/depreciation of investments (1,567,184)
___________
Net Realized and Unrealized Gain on Investments 5,532,254
___________
Net Increase in Net Assets Resulting from Operations $ 8,021,895
___________
See accompanying notes
10
Statements of changes in net assets
Delaware Investments Dividend and Income Fund, Inc.
Six Months
Ended Year
5/31/06 Ended
(Unaudited) 11/30/05
Increase (Decrease) in Net Assets from Operations:
Net investment income $ 2,489,641 $ 7,696,248
Net realized gain on investments and foreign currencies 7,099,438 20,783,293
Net change in unrealized appreciation/depreciation of investments and foreign currencies (1,567,184) (20,069,254)
____________ ____________
Net increase in net assets resulting from operations 8,021,895 8,410,287
____________ ____________
Dividends and Distributions to Shareholders from (See Note 4):
Net investment income (5,249,667) (8,898,947)
Net realized gains (1,587,648) (2,947,249)
____________ ____________
(6,837,315) (11,846,196)
____________ ____________
Capital Share Transactions:
Cost of shares repurchased (See Note 5) - (16,855,077)
____________ ____________
Decrease in net assets derived from capital stock transactions - (16,855,077)
____________ ____________
Net Increase (Decrease) in Net Assets 1,184,580 (20,290,986)
Net Assets:
Beginning of period 146,638,133 166,929,119
____________ ____________
End of period [including undistributed (distributions in excess of) net investment income
of $0 and ($59,410), respectively] $147,822,713 $146,638,133
____________ ____________
See accompanying notes
11
Statement of cash flows
Delaware Investments Dividend and Income Fund, Inc.
Six Months Ended May 31, 2006 (Unaudited)
Net Cash Provided by Operating Activities:
Net increse in net assets resulting from operations $ 8,021,895
_____________
Adustments to reconcile net increase in net assets from operations to cash provided by operating activities:
Amortization of premium and discount on securities purchased (57,059)
Net proceeds from investment transactions 3,622,226
Net realized gain from investment transactions (7,099,438)
Change in net unrealized appreciation/depreciation of investments 1,567,184
Decrease in receivable for investments sold 4,131,540
Decrease in interest and dividends receivable and other assets 277,444
Decrease in payable for investments purchased (3,511,408)
Increase in interest payable 83,047
Decrease in accrued expenses and other liabilities (59,907)
_____________
Total adjustments (1,046,371)
_____________
Net cash provided by operating activities 6,975,524
_____________
Cash Flows Used for Financing Activities:
Cash provided by issuance of commerical paper 118,823,307
Repayment of commercial paper upon maturity (118,966,920)
Cash dividends and distributions paid (6,837,315)
_____________
Net cash used for financing activities (6,980,928)
_____________
Net decrease in cash (5,404)
Cash at beginning of period 71,468
_____________
Cash at end of period $ 66,064
_____________
Cash paid for interest expense for leverage $ 1,116,127
_____________
See accompanying notes
12
Financial highlights
Delaware Investments Dividend and Income Fund, Inc.
Selected data for each share of the Fund outstanding throughout each period were
as follows:
Six Months
Ended
5/31/06(1) Year Ended
______________________________________________________
(Unaudited) 11/30/05 11/30/04 11/30/03 11/30/02(2) 11/30/01
____________________________________________________________________________________________________________________________________
Net asset value, beginning of period $ 12.650 $ 12.960 $ 11.700 $ 10.140 $ 11.630 $ 11.590
Income (loss) from investment operations:
Net investment income(3) 0.215 0.623 0.625 0.711 0.635 0.617
Net realized and unrealized gain (loss) on investments and
foreign currencies 0.485 0.027 1.595 1.989 (0.650) 0.923
_________ ________ ________ ________ ________ ________
Total from investment operations 0.700 0.650 2.220 2.700 (0.015) 1.540
_________ ________ ________ ________ ________ ________
Less dividends and distributions from:
Net investment income (0.453) (0.722) (0.663) (0.714) (0.660) (0.617)
Net realized gain on investments (0.137) (0.238) (0.297) - - (0.080)
Return of capital - - - (0.426) (0.815) (0.803)
_________ ________ ________ ________ ________ ________
Total dividends and distributions (0.590) (0.960) (0.960) (1.140) (1.475) (1.500)
_________ ________ ________ ________ ________ ________
Net asset value, end of period $ 12.760 $ 12.650 $ 12.960 $ 11.700 $ 10.140 $ 11.630
_________ ________ ________ ________ ________ ________
Market value, end of period $ 12.160 $ 12.550 $ 11.760 $ 11.840 $ 10.020 $ 13.850
_________ ________ ________ ________ ________ ________
Total return based on:(4)
Market value 1.71% 15.38% 7.78% 30.20% (18.98%) 30.20%
Net asset value 5.89% 5.44% 20.29% 27.13% (2.36%) 12.02%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $147,823 $146,638 $166,929 $150,595 $130,560 $149,718
Ratio of expenses to average net assets 2.56% 2.20% 1.51% 1.63% 1.86% 2.77%
Ratio of expenses to adjusted average net assets (before interest
expense)(5) 0.80% 0.91% 0.76% 0.79% 0.80% 0.83%
Ratio of interest expense to adjusted average net assets(5) 1.14% 0.78% 0.36% 0.37% 0.54% 1.22%
Ratio of net investment income to average net assets 3.35% 4.81% 5.10% 6.70% 5.69% 5.07%
Ratio of net investment income to adjusted average net assets(5) 2.54% 3.70% 3.78% 4.78% 4.12% 3.75%
Portfolio turnover 60% 94% 89% 175% 107% 61%
Leverage Analysis:
Debt outstanding at end of period at par (000 omitted) $48,000 $48,000 $55,000 $55,000 $55,000 $55,000
Average daily balance of debt outstanding (000 omitted) $47,722 $51,697 $54,893 $54,882 $54,857 $54,724
Average daily balance of shares outstanding (000 omitted) 11,589 12,361 12,876 12,876 12,876 12,876
Average debt per share $ 4.120 $ 4.180 $ 4.260 $ 4.262 $ 4.260 $ 4.250
Asset coverage per $1,000 of debt outstanding at end of period $ 4,101 $ 4,073 $ 4,044 $ 3,743 $ 3,379 $ 3,730
____________________________________________________________________________________________________________________________________
(1) Ratios and portfolio turnover have been annualized and total return has not been annualized.
(2) 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 premiums 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.
(3) The average shares outstanding method has been applied for per share information.
(4) 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.
(5) Adjusted average net assets excludes debt outstanding.
See accompanying notes
13
Notes to financial statements
Delaware Investments Dividend and Income Fund, Inc.
May 31, 2006 (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. Securities lending collateral is 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.
Repurchase Agreements - The Fund may invest in a pooled cash account along with
other members of the Delaware Investments(R) Family of Funds pursuant to an
exemptive order issued by the Securities and Exchange Commission. The aggregate
daily balance of the pooled cash account is invested in repurchase agreements
secured by obligations of the U.S government. The respective collateral is held
by the Fund's custodian bank until the maturity of the respective repurchase
agreements. Each repurchase agreement is 102% collateralized. However, in the
event of default or bankruptcy by the counterparty to the agreement, realization
of the collateral may be subject to legal proceedings.
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 some other expenses are paid monthly. Security transactions
are recorded on the date the securities are purchased or sold (trade date) for
financial reporting purposes. 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 on non-convertible debt
securities are amortized to interest income over the lives of the respective
securities. Distributions received from investments in Real Estate Investment
Trusts (REITs) are recorded as dividend income on the ex-dividend date, subject
to reclassification upon notice of the character of such distributions by the
issuer.
Subject to seeking best execution, the Fund may direct certain security
trades to brokers who have agreed to rebate a portion of the related brokerage
commission to the Fund in cash. Such commission rebates are included in realized
gain on investments in the accompanying financial statements and totaled $1,218
for the six months ended May 31, 2006. In general, best execution refers to many
factors, including the price paid or received for a security, the commission
charged, the promptness and reliability of execution, the confidentiality and
placement accorded the order, and other factors affecting the overall benefit
obtained by the Fund on the transaction. DMC, as defined below, and its
affiliates have previously and may in the future act as an investment advisor to
mutual funds or separate accounts affiliated with the administrator of the
commission recapture program described above. In addition, affiliates of the
administrator act as consultants in helping institutional clients choose
investment advisors and may also participate in other types of businesses and
provide other services in the investment management industry.
The Fund may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. There were no
earnings credits for the six months ended May 31, 2006.
14
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.
Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting
and administration services. The Fund pays DSC a monthly fee computed at an
annual rate of 0.04% of the Fund's adjusted average weekly net assets for
accounting and administration services.
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, 2006, the Fund had liabilities payable to affiliates as follows:
Investment management fee payable to DMC $90,476
Accounting and administration fees and other expenses 14,222
payable to DSC
Other expenses payable to DMC and affiliates* 13,256
* 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, including internal legal services provided to the Fund
by DMC employees. For the six months ended May 31, 2006, the Fund was charged
$9,987 for internal legal services provided by DMC.
Certain officers of DMC and DSC are officers and/or directors the Fund. These
officers and directors are paid no compensation by the Fund.
During the six months ended May 31, 2006, Babak Zenouzi was appointed
co-portfolio manager of the Fund. Mr. Zenouzi assumed primary responsibility for
managing the REIT and convertible securities holdings for the Fund, and consults
regularly with Damon J. Andres in this capacity. Mr. Zenouzi works with Mr.
Andres, D. Tysen Nutt, Jr., Jordan L. Irving, Anthony A. Lombardi, Robert A.
Vogel, Jr., Philip R. Perkins and Timothy L. Rabe in making day-to-day decisions
for the Fund.
3. Investments
For the six months ended May 31, 2006, the Fund made purchases of $55,543,545
and sales of $65,477,354 of long-term investment securities other than long-term
U.S. government securities and short-term investments.
At May 31, 2006, 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, 2006, the cost of investments was $212,523,134. At
May 31, 2006, the net unrealized appreciation was $8,693,037, of which
$16,031,448 related to unrealized appreciation of investments and $7,338,411
related to unrealized depreciation of investments.
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. Additionally, gains (losses) on net foreign
currency transactions and net short-term gains on sales of investment securities
are treated as ordinary income for federal income tax purposes. The tax
character of dividends and distributions paid during the six months ended May
31, 2006 and the year ended November 30, 2005 was as follows:
Six Months Year
Ended Ended
5/31/06* 11/30/05
__________ ___________
Ordinary income $2,553,931 $ 8,898,947
Long- term capital gains 4,283,384 2,947,249
__________ ___________
Total $6,837,315 $11,846,196
__________ ___________
* Tax information for the six months ended May 31, 2006 is an estimate and the
tax character of dividends and distributions may be redesignated at fiscal
year end.
The components of net assets are estimated since final tax characteristics
cannot be determined until fiscal year end. As of May 31, 2006, the estimated
components of net assets on a tax basis were as follows:
Shares of beneficial interest $134,704,945
Undistributed ordinary income 1,040,644
Undistributed long-term capital gains 3,384,087
Unrealized appreciation of investments 8,693,037
____________
Net assets $147,822,713
____________
The differences between book basis and tax basis components of net assets are
primarily attributable to tax deferral of losses on wash sales, tax treatment of
market discount and premium on debt instruments and treatment of contingent
payment debt instruments.
For financial reporting purposes, capital accounts are adjusted to reflect the
tax character of permanent book/tax differences. Reclassifications are primarily
due to tax treatment of market discounts and premiums on certain debt
instruments and treatment of contingent payment debt instruments. Results of
operations and net assets were not affected by these reclassifications. For the
six months ended May 31, 2006, the Fund recorded an estimate of these
differences since the final tax characteristics cannot be determined until
fiscal year end.
Paid-in capital $ (59,410)
Undistributed net investment income 2,819,436
Accumulated net realized gain (loss) (2,760,026)
5. Capital Stock
Shares issuable under the Fund's dividend investment plan are purchased by the
Fund's transfer agent, Mellon Investor Services, LLC, in the open market. There
were no shares issued under the dividend reinvestment plan for the six months
ended May 31, 2006.
The Fund did not purchase any shares under the Share Repurchase Program or have
any transactions in common shares during the six months ended May 31, 2006.
(continues) 15
Notes to financial statements
Delaware Investments Dividend and Income Fund, Inc.
May 31, 2006 (Unaudited)
5. Capital Stock (continued)
On May 18, 2006, the Fund's Board of Directors approved a tender offer for
shares of the Fund's common stock. The tender offer authorized the Fund to
purchase up to 5% of its issued and outstanding shares at a price equal to the
Fund's net asset value at the close of business on the New York Stock Exchange
on July 3, 2006, the first business day following expiration of the offer. The
tender offer commenced on June 2, 2006 and expired on June 30, 2006. In
connection with the tender offer, the Fund purchased 579,434 shares of its
common stock at a total cost of $7,463,110. The tender offer was oversubscribed,
and all tenders of shares were subject to proration (at a ratio of approximately
0.775731221) in accordance with the terms of the tender offer.
6. Commercial Paper
As of May 31, 2006, $48,000,000 (par value) of commercial paper was outstanding
with an amortized cost of $47,664,550. The weighted average discount rate of
commercial paper outstanding at May 31, 2006 was 5.03%. The average daily
balance of commercial paper outstanding during the six months ended May 31, 2006
was $47,722,118 at a weighted discount rate of 4.61%. The maximum amount of
commercial paper outstanding at any time during the year was $48,000,000. On
June 22, 2006, the Fund reduced the commercial paper outstanding to $44 million
in conjunction with the tender offer. 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. Interest on borrowings is based on market rates in
effect at the time of borrowing. The commitment fee is computed at the rate of
0.12% per annum on the unused balance. For the six months ended May 31, 2006,
the Fund was charged fees of $19,243 which is included in "commercial paper
fees" on the Statement of Operations. During the six months ended May 31, 2006,
there were no borrowings under this arrangement.
7. Securities Lending
The Fund, along with other funds in the Delaware Investments(R) 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. Treasury 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 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 Fund records security
lending income net of such allocation.
At May 31, 2006, the market value of securities on loan was $25,302,817, for
which cash collateral was received and invested in accordance with the Lending
Agreement. Such investments are presented on the Statement of Net Assets under
the caption "Securities Lending Collateral."
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/or 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.
While maintaining oversight, the Board of Directors has delegated to DMC the
day-to-day functions of determining whether individual securities are liquid for
purposes of the Fund's limitation on investments in illiquid assets. Rule 144A
and illiquid securities have been identified on the Statement of Net Assets.
The Fund invests in 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, 2006. 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.
Other Fund information
Delaware Investments Dividend and Income Fund, Inc.
Board Consideration of Delaware Investments Dividend and Income Fund, Inc.
Investment Advisory Agreement
At a meeting held on May 17-18, 2006 (the "Annual Meeting"), the Board of
Trustees, including a majority of disinterested or independent Trustees,
approved the renewal of the Investment Advisory Agreement for the Delaware
Investments Dividend and Income Fund (the "Fund"). In making its decision, the
Board considered information furnished throughout the year at regular Board
meetings, as well as information prepared specifically in connection with the
Annual Meeting. Information furnished and discussed throughout the year included
reports detailing Fund performance, investment strategies, expenses, compliance
matters and other services provided by Delaware Management Company ("DMC"), the
investment advisor. Information furnished specifically in connection with the
Annual Meeting included materials provided by DMC and its affiliates ("Delaware
Investments") concerning, among other things, the level of services provided to
the Fund, the costs of such services to the Fund, economies of scale and the
financial condition and profitability of Delaware Investments. In addition, in
connection with the Annual Meeting, the Board considered independent historical
and comparative reports prepared by Lipper Inc. ("Lipper"), an independent
statistical compilation organization. The Board also considered industry
comparative information presented by representatives from Lipper. The Lipper
reports compared the Fund's investment performance and expenses with those of
other comparable mutual funds. The Board also received certain supplemental
information regarding management's policy with respect to advisory fee levels
and its philosophy with respect to breakpoints; the structure of portfolio
manager compensation; and any constraints or limitations on the availability of
securities in certain investment styles which might inhibit DMC's ability to
fully invest in accordance with Fund policies.
In considering such materials, the independent Trustees received assistance and
advice from and met separately with independent counsel and representatives from
Lipper. At the meeting with representatives from Lipper, Mr. Driscoll, Chairman
of the Delaware Investments(R) Family of Funds, and Chairman and Chief
Executive Officer of the investment advisor, was present to respond to questions
by Lipper and the independent Trustees. While the Board considered the
Investment Advisory Agreements for all of the funds in the Delaware Investments
Family of Funds at the same Board meeting, information was provided and
considered by the Board for each fund individually. In approving the continuance
of the Investment Advisory Agreement for the Fund, the Board, including a
majority of independent Trustees, determined that the existing advisory fee
structure was fair and reasonable and that the continuance of the Investment
Advisory Agreement was in the best interests of the Fund and its shareholders.
While attention was given to all information furnished, the following discusses
the primary factors relevant to the Board's deliberations and determination,
including those relating to the selection of the investment advisor and the
approval of the advisory fee.
Nature, Extent And Quality of Service. Consideration was given to the services
provided by Delaware Investments to the Fund and its shareholders. In reviewing
the nature, extent and quality of services, the Board emphasized reports
furnished to it throughout the year at regular Board meetings covering matters
such as the relative performance of the Fund, compliance of portfolio managers
with the investment policies, strategies and restrictions for the Fund, the
compliance of management personnel with the Code of Ethics adopted throughout
the Delaware Investments Family of Funds complex, the adherence to fair value
pricing procedures as established by the Board, and the accuracy of net asset
value calculations. The Board noted that it was pleased with the current
staffing of the Fund's investment advisor and management's efforts to strengthen
and deepen portfolio management teams during the past year, the emphasis on
research and the compensation system for advisory personnel. Favorable
consideration was given to DMC's efforts to maintain, and in some instances
increase, financial and human resources committed to fund matters. Other factors
taken into account by the Board were Delaware Investments' preparedness for, and
response to, legal and regulatory matters. The Board also considered the
transfer agent and shareholder services provided to Fund shareholders by
Delaware Investments' affiliate, Delaware Service Company, Inc., noting DSC's
commitment to maintain a high level of service in keeping with its past receipt
of the DALBAR Pyramid Award, and the continuing expenditures by Delaware
Investments to improve the delivery of shareholder services. Additionally, the
Board noted the extent of benefits provided to Fund shareholders for being part
of the Delaware Investments Family of Funds, including the privilege to exchange
investments between the same class of shares of funds without a sales charge,
the ability to reinvest Fund dividends into other funds and the privilege to
combine holdings in other funds to obtain a reduced sales charge. The Board was
satisfied with the nature, extent and quality of the overall services provided
by Delaware Investments.
Investment Performance. The Board considered the investment performance of DMC
and the Fund. The Board was pleased with DMC's investment performance. The Board
placed significant emphasis on the investment performance of the Fund in view of
its importance to shareholders. While consideration was given to performance
reports and discussions with portfolio managers at Board meetings throughout the
year, particular weight was given to the Lipper reports furnished for the Annual
Meeting. The Lipper reports prepared for the Fund showed the investment
performance of its Class A shares in comparison to a group of similar funds as
selected by Lipper (the "Performance Universe"). A fund with the best
performance is ranked first, and a fund with the poorest performance is ranked
last. The highest/best performing 25% of funds in the Performance Universe make
up the first quartile; the next 25% - the second quartile; the next 25% - the
third quartile; and the poorest/worst performing 25% of funds in the Performance
Universe make up the fourth quartile. Comparative annualized performance for the
Fund was shown for the past one, three and five year periods ended January 31,
2006. The Board noted its objective that the Fund's performance be at or above
the median of its Performance Universe. The following paragraph summarizes the
performance results for the Fund and the Board's view of such performance.
The Performance Universe for the Fund consisted of the Fund and all retail and
institutional income funds as selected by Lipper. The Lipper report comparison
showed that the Fund's total return for the one and five year periods was in the
first quartile of such Performance Universe. The report further showed that the
Fund's total return for the three year period was in the second quartile. The
Board was satisfied with such performance.
(continues) 17
Other Fund information
Delaware Investments Dividend and Income Fund, Inc.
Board Consideration of Delaware Investments Dividend and Income Fund, Inc.
Investment Advisory Agreement (continued)
Comparative Expenses. The Board considered expense data for the Delaware
Investments Family of Funds. Management provided the Board with information on
pricing levels and fee structures for the Funds. The Board focused particularly
on the comparative analysis of the management fees and total expense ratios of
the Fund and the management fees and expense ratios of a group of similar funds
as selected by Lipper (the "Expense Group"). In reviewing comparative costs, the
Fund's contractual management fee and the actual management fee incurred by the
Fund were compared with the contractual management fees (assuming all funds in
the Expense Group were similar in size to the Fund) and actual management fees
(as reported by each fund) of other funds within the Expense Group, taking into
effect any applicable breakpoints and fee waivers. The Fund's total expenses
were also compared with those of its Expense Group. The Lipper total expenses,
for comparative consistency, were shown by Lipper for Class A shares and
compared total expenses including 12b-1 and non-12b-1 service fees. The Board
also considered fees paid to Delaware Investments for non-management services.
The Board noted its objective to limit the Fund's total expense ratio to an
acceptable range as compared to the median of the Expense Group. The following
paragraph summarizes the expense results for the Fund and the Board's view of
such expenses.
The expense comparisons for the Fund showed that its actual management fee and
total expenses were in the quartile with the lowest expenses of its Expense
Group. The Board was satisfied with the management fees and total expenses of
the Fund in comparison to its Expense Group as shown in the Lipper report.
Management Profitability. The Board considered the level of profits, if any,
realized by Delaware Investments in connection with the operation of the Fund.
In this respect, the Board reviewed the Investment Management Profitability
Analysis that addressed the overall profitability of Delaware Investments'
business in providing management and other services to each of the individual
funds and the Delaware Investments(R) Family of Funds as a whole. Specific
attention was given to the methodology followed in allocating costs for the
purpose of determining profitability. Management stated that the level of
profits of Delaware Investments, to a certain extent, reflected operational cost
savings and efficiencies initiated by Delaware Investments. The Board considered
Delaware Investments' expenditures to improve services provided to fund
shareholders and to meet additional regulatory and compliance requirements
resulting from recent SEC initiatives. The Board also considered the extent to
which Delaware Investments might derive ancillary benefits from fund operations,
including the potential for procuring additional business as a result of the
prestige and visibility associated with its role as service provider to the
Delaware Investments Family of Funds, the benefits from allocation of fund
brokerage to improve trading efficiencies and the use of "soft" commission
dollars to pay for proprietary and non-proprietary research. The Board did not
find that the level of profits realized by Delaware Investments from the
relationships with the Fund and the Delaware Investments Family of Funds
required negotiation of reduction of fees.
Economies of Scale. The Trustees considered whether economies of scale are
realized by Delaware Investments as the Fund's assets increase and the extent to
which any economies of scale are reflected in the level of management fees
charged. The Trustees took into account the standardized advisory fee pricing
and structure approved by the Board and shareholders as part of a complex-wide
shareholder meeting conducted in 1998/1999. At that time, Delaware Investments
introduced breakpoints to account for management economies of scale. The Board
noted that the fee under the Fund's management contract fell within the standard
structure. The Board also noted that the Fund's assets exceeded the first
breakpoint level. The Board believed that, given the extent to which economies
of scale might be realized by the advisor and its affiliates, the schedule of
fees under the Investment Advisory Agreement provides a sharing of benefits with
the Fund and its shareholders.
18
About the organization
This semiannual report is for the information of Delaware Investments Dividend
and Income Fund, Inc. shareholders. The figures in this report represent past
results that 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 trustees
Jude T. Driscoll
Chairman
Delaware Investments(R) Family of Funds
Philadelphia, PA
Thomas L. Bennett +
Private Investor
Rosemont, PA
John A. Fry
President
Franklin & Marshall College
Lancaster, PA
Anthony D. Knerr
Founder and Managing Director
Anthony Knerr & Associates
New York, NY
Lucinda S. Landreth
Former Chief Investment Officer
Assurant, Inc.
Philadelphia, PA
Ann R. Leven
Owner - ARL Associates, Financial
Strategic Consultants
Washington, DC
Thomas F. Madison +
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
Janet L. Yeomans +
Vice President and Treasurer
3M Corporation
St. Paul, MN
J. Richard Zecher +
Founder
Investor Analytics
Scottsdale, AZ
+ Audit Committee Member
Affiliated officers
Michael P. Bishof
Senior Vice President and
Chief Financial Officer
Delaware Investments Family of Funds
Philadelphia, PA
David F. Connor
Vice President, Deputy General Counsel,
and Secretary
Delaware Investments Family of Funds
Philadelphia, PA
David P. O'Connor
Senior Vice President, General Counsel,
and Chief Legal Officer
Delaware Investments Family of Funds
Philadelphia, PA
John J. O'Connor
Senior Vice President and Treasurer
Delaware Investments Family of Funds
Philadelphia, PA
__________________________________________________________________
| |
| Delaware Investments is the marketing name of Delaware |
| Management Holdings, Inc. and its subsidiaries. |
| |
| The Fund files its complete schedule of portfolio holdings with |
| the Securities and Exchange Commission for the first and third |
| quarters of each fiscal year on Form N-Q. The Fund's Forms |
| N-Q, as well as a description of the policies and procedures |
| that the Fund uses to determine how to vote proxies (if any) |
| relating to portfolio securities are available without charge |
| (i) upon request, by calling 800 523-1918; (ii) on the Fund's |
| Web site at http://www.delawareinvestments.com; and |
| (iii) on the Commission's Web site at http://www.sec.gov. |
| The Fund's Forms N-Q may be reviewed and copied at the |
| Commission's Public Reference Room in Washington, D.C.; |
| information on the operation of the Public Reference Room |
| may be obtained by calling 800 SEC-0330. |
| |
| Information (if any) regarding how the Fund voted proxies |
| relating to portfolio securities during the most recently |
| disclosed 12-month period ended June 30 is available |
| without charge (i) through the Fund's Web site at |
| http://www.delawareinvestments.com; and (ii) on the |
| Commission's Web site at http://www.sec.gov. |
|__________________________________________________________________|
Contact information
Investment Manager
Delaware Management Company, a series
of Delaware Management Business Trust
Philadelphia, PA
Principal Office of the Fund
2005 Market Street
Philadelphia, PA 19103
Independent Registered Public
Accounting Firm
Ernst & Young LLP
2001 Market Street
Philadelphia, PA 19103
Registrant and Stock Transfer
Agent
Mellon Investor Services, LLC
480 Washington Boulevard
Jersey City, NJ 07310
800 851-9677
For securities dealers and
financial institutions
representatives only
800 362-7500
Web site
www.delawareinvestments.com
_______________________________________________________
| |
| 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. |
|_______________________________________________________|
19
[DELAWARE LOGO] [DDF LISTED NYSE LOGO]
(570) Printed in the USA
SA-DDF [5/06] CGI 7/06 MF-06-06-038 PO11116
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. Schedule of Investments
Included as part of report to shareholders filed under Item 1 of this
Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Applicable to Form N-CSRs filed after fiscal years ending on or after
December 31, 2005.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Companies and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. 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 second fiscal quarter of the period
covered by the report to stockholders included herein (i.e., the registrant's
second fiscal quarter) that have materially affected, or are reasonably likely
to materially affect, the registrant's internal control over financial
reporting.
Item 12. 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 and Income Fund, Inc.
PATRICK P. COYNE
____________________
By: Patrick P. Coyne
Title: President and Chief Executive Officer
Date: August 3, 2006
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.
PATRICK P. COYNE
____________________
By: Patrick P. Coyne
Title: President and Chief Executive Officer
Date: August 3, 2006
MICHAEL P. BISHOF
____________________
By: Michael P. Bishof
Title: Chief Financial Officer
Date: August 3, 2006