UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-Q
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QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
INVESTMENT COMPANY ACT FILE NUMBER 811-8747
CHARTWELL DIVIDEND AND INCOME FUND, INC.
(Exact name of registrant as specified in charter)
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1235 Westlakes Drive, Suite 400
Berwyn, PA 19312
(Address of principal executive offices) (Zip code)
PNC Bank, National Association
400 Bellevue Parkway
Wilmington, DE 19809
Attn: Closed-End Department
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-610-296-1400
DATE OF FISCAL YEAR END: NOVEMBER 30
DATE OF REPORTING PERIOD: FEBRUARY 28, 2006
ITEM 1. SCHEDULE OF INVESTMENTS
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CHARTWELL DIVIDEND AND INCOME FUND, INC. FEBRUARY 28, 2006
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SCHEDULE OF INVESTMENTS (Unaudited)
NUMBER OF MARKET
SHARES VALUE
-------------- -------------
COMMON STOCK--74.5%
BANKS--13.5%
AmSouth Bancorporation........................................................ 46,760 $ 1,297,590
Bank of America Corporation................................................... 242,000 11,095,700
National City Corporation..................................................... 100,000 3,480,000
New York Community Bancorp, Inc............................................... 119,000 2,007,530
U.S. Bancorp.................................................................. 66,000 2,040,060
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19,920,880
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BASIC INDUSTRY--3.4%
Dow Chemical Company.......................................................... 30,000 1,290,900
Packaging Corporation of America.............................................. 40,000 912,400
Reddy Ice Holdings, Inc....................................................... 100,000 2,020,000
Weyerhaeuser Company.......................................................... 11,500 785,335
------------
5,008,635
------------
CONSUMER CYCLICAL--3.4%
Coinmach Corporation.......................................................... 245,000 4,067,000
Coinmach Corporation, Class A................................................. 110,000 1,031,800
------------
5,098,800
------------
CONSUMER STAPLES--10.4%
Altria Group, Inc............................................................. 132,950 9,559,105
B&G Foods, Inc................................................................ 34,300 514,157
Loews Corporation - Carolina Group............................................ 70,000 3,324,300
Regal Entertainment Group, Class A............................................ 100,000 1,902,000
------------
15,299,562
------------
ENERGY--6.5%
Calumet Specialty Products Partners LP........................................ 5,000 118,500
Chevron Corporation........................................................... 30,000 1,694,400
ConocoPhillips................................................................ 75,000 4,572,000
Halliburton Company........................................................... 20,000 1,360,000
Linn Energy LLC(c)............................................................ 7,000 145,390
Sunoco Logistics Partners LP(c)............................................... 40,000 1,714,400
------------
9,604,690
------------
FINANCIAL--11.2%
AllianceBernstein Holding LP(c)............................................... 100,000 6,427,000
American Capital Strategies Limited........................................... 15,000 535,500
CapitalSource, Inc............................................................ 131,995 3,248,397
Hartford Financial Services Group, Inc........................................ 39,200 3,229,296
People's Choice Europe Limited+............................................... 35,000 192,500
Technology Investment Capital Corporation..................................... 55,595 847,824
Washington Mutual, Inc........................................................ 50,000 2,135,000
------------
16,615,517
------------
HEALTHCARE--0.4%
Bristol-Myers Squibb Company.................................................. 25,000 577,500
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INDUSTRIALS--1.4%
Arlington Tankers Limited..................................................... 42,100 961,985
Teekay LNG Partners LP(c)..................................................... 35,000 1,064,000
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2,025,985
------------
REAL ESTATE INVESTMENT TRUSTS--13.2%
Boston Properties, Inc........................................................ 30,000 2,540,100
BRE Properties, Class A....................................................... 19,500 1,060,215
CarrAmerica Realty Corporation................................................ 32,600 1,351,596
Deerfield Triarc Capital Corporation.......................................... 50,000 653,000
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CHARTWELL
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CHARTWELL DIVIDEND AND INCOME FUND, INC. FEBRUARY 28, 2006
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SCHEDULE OF INVESTMENTS (Unaudited)
NUMBER OF
SHARES/PRINCIPAL MARKET
AMOUNT VALUE
---------------- -------------
COMMON STOCK (CONTINUED)
REAL ESTATE INVESTMENT TRUSTS (CONTINUED)
Duke Realty Corporation....................................................... 80,320 $ 2,819,232
HomeBanc Corporation.......................................................... 300,000 2,610,000
iStar Financial, Inc.......................................................... 50,000 1,905,000
Mack-Cali Realty Corporation.................................................. 27,682 1,242,922
New Century Financial Corporation............................................. 51,200 1,984,000
Reckson Associates Realty Corporation......................................... 80,000 3,272,000
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19,438,065
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TELECOMMUNICATIONS--6.2%
Alaska Communications Systems Group, Inc...................................... 175,000 1,940,750
BellSouth Corporation......................................................... 17,100 540,018
Citizens Communications Company............................................... 150,000 2,002,500
Consolidated Communications Holdings, Inc..................................... 40,000 569,600
Fairpoint Communications, Inc................................................. 75,000 1,055,250
Valor Communications Group, Inc............................................... 250,000 3,087,500
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9,195,618
------------
TRANSPORTATION--1.4%
Aries Maritime Transport Limited.............................................. 50,000 705,500
K-Sea Transportation Partners LP(c)........................................... 10,000 346,700
Seaspan Corporation........................................................... 33,400 666,664
Transmontaigne Partners LP(c)................................................. 15,000 383,250
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2,102,114
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UTILITIES--3.5%
AmeriGas Partners LP(c)....................................................... 15,200 465,880
Kinder Morgan Energy Partners LP(c)........................................... 45,000 2,127,150
Northern Border Partners LP(c)................................................ 26,600 1,279,460
TEPPCO Partners LP(c)......................................................... 34,800 1,267,764
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5,140,254
------------
TOTAL COMMON STOCK (COST $91,408,977)..................................... 110,027,620
------------
CORPORATE NOTES/BONDS--45.9%
BASIC INDUSTRY--7.2%
Buhrmann US, Inc.
8.250%, 07/01/14............................................................ $ 620,000 640,150
Commercial Vehicle Group
8.000%, 07/01/13............................................................ 755,000 755,000
Goodman Global Holdings
7.875%, 12/15/12............................................................ 600,000 589,500
K. Hovnanian Enterprises
6.500%, 01/15/14............................................................ 500,000 478,908
Koppers Industries
9.875%, 10/15/13............................................................ 1,560,000 1,692,600
Lamar Media Corporation
6.625%, 08/15/15............................................................ 400,000 406,500
Nortek, Inc.
8.500%, 09/01/14............................................................ 585,000 586,462
Ply Gem Industries, Inc.
9.000%, 02/15/12............................................................ 1,120,000 1,013,600
Quebecor Media+
7.750%, 03/15/16............................................................ 1,060,000 1,091,800
TRW Automotive, Inc.
9.375%, 02/15/13............................................................ 1,005,000 1,095,450
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CHARTWELL
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CHARTWELL DIVIDEND AND INCOME FUND, INC. FEBRUARY 28, 2006
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SCHEDULE OF INVESTMENTS (Unaudited)
PRINCIPAL MARKET
AMOUNT VALUE
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CORPORATE NOTES/BONDS (CONTINUED)
BASIC INDUSTRY (CONTINUED)
United Agri Products
8.250%, 12/15/11............................................................ $ 651,000 $ 690,060
Vertis, Inc., Series B
10.875%, 06/15/09........................................................... 500,000 493,750
Williams Scotsman, Inc.
8.500%, 10/01/15............................................................ 1,070,000 1,107,450
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10,641,230
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CAPITAL GOODS--3.0%
Allied Waste North America, Series B
8.500%, 12/01/08............................................................ 1,165,000 1,233,444
Clarke American Corporation+
11.750%, 12/15/13........................................................... 450,000 453,375
H&E Equipment Finance
11.125%, 06/15/12........................................................... 970,000 1,085,187
Norcross Safety Products LLC, Series B
9.875%, 08/15/11............................................................ 850,000 888,250
Trinity Industries, Inc.
6.500%, 03/15/14............................................................ 800,000 806,000
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4,466,256
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CONSUMER CYCLICAL--1.4%
Allied Security Escrow
11.375%, 07/15/11........................................................... 515,000 486,675
Cenveo, Inc.
9.625%, 03/15/12............................................................ 500,000 540,000
Sonic Automotive, Inc., Series B
8.625%, 08/15/13............................................................ 990,000 997,425
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2,024,100
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CONSUMER STAPLES--5.6%
American Seafood Group LLC
10.125%, 04/15/10........................................................... 1,330,000 1,401,487
Brown Shoe Company, Inc.
8.750%, 05/01/12............................................................ 800,000 848,000
Chiquita Brands International, Inc.
7.500%, 11/01/14............................................................ 950,000 841,938
Crown Americas LLC+
7.750%, 11/15/15............................................................ 1,020,000 1,068,450
MGM Mirage, Inc.
8.500%, 09/15/10............................................................ 1,125,000 1,224,844
MTR Gaming Group, Inc., Series B
9.750%, 04/01/10............................................................ 520,000 559,650
Quicksilver, Inc.
6.875%, 04/15/15............................................................ 725,000 703,250
Stater Brothers Holdings
8.125%, 06/15/12............................................................ 715,000 725,725
Steinway Musical Instruments+
7.000%, 03/01/14............................................................ 830,000 840,375
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8,213,719
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ENERGY--3.7%
Bluewater Finance Limited
10.250%, 02/15/12........................................................... 1,000,000 1,082,500
Chesapeake Energy Corporation
7.500%, 06/15/14............................................................ 1,000,000 1,070,000
Copano Energy LLC+
8.125%, 03/01/16............................................................ 935,000 977,075
Encore Acquisition Company
7.250%, 12/01/17............................................................ 825,000 843,563
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CHARTWELL
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CHARTWELL DIVIDEND AND INCOME FUND, INC. FEBRUARY 28, 2006
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SCHEDULE OF INVESTMENTS (Unaudited)
PRINCIPAL MARKET
AMOUNT VALUE
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CORPORATE NOTES/BONDS (CONTINUED)
ENERGY (CONTINUED)
Transcontinental Gas Pipe Line Corporation, Class B
7.000%, 08/15/11............................................................ $ 915,000 $ 965,325
Whiting Petroleum Corporation
7.250%, 05/01/13............................................................ 600,000 610,500
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5,548,963
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FINANCIAL--5.0%
Arch Western Finance LLC
6.750%, 07/01/13............................................................ 965,000 972,237
E*Trade Financial Corporation
8.000%, 06/15/11............................................................ 870,000 920,025
Ford Motor Credit Company
7.000%, 10/01/13............................................................ 1,950,000 1,716,129
General Motors Acceptance Corporation
8.000%, 11/01/31............................................................ 1,590,000 1,455,772
6.750%, 12/01/14.......................................................... 1,220,000 1,079,500
Labranche & Company, Inc.
11.000%, 05/15/12........................................................... 1,160,000 1,296,300
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7,439,963
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HEALTHCARE--1.9%
HCA, Inc.
7.875%, 02/01/11............................................................ 910,000 976,937
Town Sports International
9.625%, 04/15/11............................................................ 1,020,000 1,073,550
Universal Hospital Services
10.125%, 11/01/11........................................................... 745,000 782,250
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2,832,737
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INDUSTRIALS--5.6%
Ainsworth Lumber
7.250%, 10/01/12............................................................ 665,000 625,100
Douglas Dynamics LLC+
7.750%, 01/15/12............................................................ 535,000 518,950
DRS Technologies, Inc.
7.625%, 02/01/18............................................................ 780,000 805,350
Freeport-McMoRan Copper & Gold, Inc.
10.125%, 02/01/10........................................................... 1,010,000 1,093,325
General Cable Corporation
9.500%, 11/15/10............................................................ 420,000 453,600
Gibraltar Industries, Inc.+
8.000%, 12/01/15............................................................ 1,110,000 1,123,875
Ineos Group Holdings+
8.500%, 02/15/16............................................................ 930,000 916,050
INVISTA+
9.250%, 05/01/12............................................................ 1,315,000 1,403,763
Rathgibson, Inc.+
11.250%, 02/15/14........................................................... 380,000 386,650
Superior Essex Communications LLC
9.000%, 04/15/12............................................................ 900,000 913,500
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8,240,163
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REAL ESTATE--4.2%
Aztar Corporation
7.875%, 06/15/14............................................................ 1,450,000 1,515,250
Boyd Gaming Corporation
7.750%, 12/15/12............................................................ 1,090,000 1,145,863
Geo Group, Inc.
8.250%, 07/15/13............................................................ 1,120,000 1,135,400
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CHARTWELL
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CHARTWELL DIVIDEND AND INCOME FUND, INC. FEBRUARY 28, 2006
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SCHEDULE OF INVESTMENTS (Unaudited)
PRINCIPAL
AMOUNT/NUMBER MARKET
OF SHARES VALUE
-------------- -------------
CORPORATE NOTES/BONDS (CONTINUED)
REAL ESTATE (CONTINUED)
Intrawest Corporation
7.500%, 10/15/13............................................................ $ 890,000 $ 910,025
Starwood Hotels & Resorts Worldwide, Inc.
7.875%, 05/01/12............................................................ 1,315,000 1,449,787
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6,156,325
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TELECOMMUNICATIONS--5.5%
Albritton Communications Company
7.750%, 12/15/12............................................................ 990,000 1,001,137
Charter Communications Operating LLC+
8.000%, 04/30/12............................................................ 900,000 911,250
Cincinnati Bell, Inc.
8.375%, 01/15/14............................................................ 1,390,000 1,410,850
CSC Holdings, Inc.
7.875%, 02/15/18............................................................ 785,000 775,188
DirecTV Holdings LLC
6.375%, 06/15/15............................................................ 345,000 345,431
Echostar DBS Corporation
6.625%, 10/01/14............................................................ 520,000 508,300
L-3 Communications Corporation
7.625%, 06/15/12............................................................ 500,000 526,250
Qwest Corporation
8.875%, 03/15/12............................................................ 1,390,000 1,563,750
Rogers Wireless, Inc.
7.250%, 12/15/12............................................................ 1,060,000 1,130,225
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8,172,381
------------
TRANSPORTATION--0.9%
Ship Finance International Limited
8.500%, 12/15/13............................................................ 1,365,000 1,289,925
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UTILITIES--1.9%
Amerigas Partners/Eagles Finance
7.125%, 05/20/16............................................................ 935,000 944,350
CE Generation LLC
7.416%, 12/15/18............................................................ 618,000 658,202
NRG Energy, Inc.
7.375%, 02/01/16............................................................ 625,000 645,312
Tenaska Alabama Part+
7.000%, 06/30/21............................................................ 595,971 618,150
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2,866,014
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TOTAL CORPORATE NOTES/BONDS (COST $67,907,143)............................ 67,891,776
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CONVERTIBLE PREFERRED STOCK--2.8%
FINANCIAL--2.8%
ACE Limited................................................................... 26,025 678,992
Chubb Corporation............................................................. 10,000 339,800
Felcor Lodging Trust, Inc..................................................... 40,000 1,000,000
Hartford Financial Services Group, Inc........................................ 5,000 368,250
LTC Properties, Inc........................................................... 25,000 1,106,250
XL Capital Limited............................................................ 23,859 581,606
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TOTAL CONVERTIBLE PREFERRED STOCK (COST $3,384,771)....................... 4,074,898
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CHARTWELL
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CHARTWELL DIVIDEND AND INCOME FUND, INC. FEBRUARY 28, 2006
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SCHEDULE OF INVESTMENTS (Unaudited)
NUMBER OF
SHARES/WRITTEN MARKET
CONTRACTS VALUE
-------------- -------------
PREFERRED STOCK--1.8%
FINANCIAL--1.8%
Merrill Lynch & Company, Inc.................................................. 16,653 $ 1,050,471
Metlife, Inc.................................................................. 25,000 687,750
Quanta Capital Holdings Limited............................................... 20,000 520,200
TransCanada Corporation....................................................... 14,905 386,040
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TOTAL PREFERRED STOCK (COST $2,506,814)................................... 2,644,461
------------
PREFERRED TERM SECURITIES(A)--10.5%
Alesco Preferred Funding IV................................................... 150,000 1,500,000
Alesco Preferred Funding IX................................................... 1,000 1,000,000
I-Preferred Term Securities IV................................................ 1,000,000 1,040,000
Preferred Term Securities IV.................................................. 2,000,000 1,082,500
Preferred Term Securities XIII................................................ 1,000,000 899,000
Preferred Term Securities XIV................................................. 2,000,000 1,800,000
Preferred Term Securities XV.................................................. 2,000,000 2,012,500
Preferred Term Securities XVI................................................. 1,000,000 984,800
Preferred Term Securities XVII................................................ 600,000 568,200
Preferred Term Securities XVIII............................................... 1,000,000 934,500
Preferred Term Securities XX.................................................. 1,000,000 1,000,000
Preferred Term Securities XXI................................................. 1,000,000 1,000,000
Preferred Term Services XIX................................................... 1,000,000 966,700
Taberna Preferred Funding I+.................................................. 250,000 250,000
Taberna Preferred Funding II.................................................. 500 500,000
------------
TOTAL PREFERRED TERM SECURITIES (COST $15,078,530)........................ 15,538,200
------------
CASH EQUIVALENT(B)--0.7%
SEI Daily Income Trust, Treasury Fund, Class A Shares, 4.410%................. 1,049,557 1,049,557
------------
TOTAL CASH EQUIVALENT (COST $1,049,557)................................... 1,049,557
------------
TOTAL INVESTMENTS--136.2%
(COST $181,335,792)*.................................................... 201,226,512
------------
COVERED CALL OPTIONS WRITTEN--(0.1)%
Altria Group, Inc. Mar. 80.................................................... (129) (1,290)
BellSouth Corporation Mar. 30................................................. (171) (29,925)
BRE Properties, Inc. Apr. 55.................................................. (195) (22,913)
Chevron Corporation Mar. 60................................................... (300) (5,700)
ConocoPhillips Corporation Mar. 65............................................ (750) (18,750)
Halliburton Company Mar. 72.5................................................. (200) (15,000)
Hartford Financial Services Group Mar. 90..................................... (392) --
National City Corporation Jul. 37.5........................................... (1,000) (55,000)
New Century Financial Mar. 40................................................. (262) (19,650)
New Century Financial Mar. 45................................................. (250) (1,250)
Packaging Corporation of America Apr. 25...................................... (30) (600)
Seaspan Corporation Mar. 20................................................... (334) (9,185)
Washington Mutual, Inc. Apr. 45............................................... (500) (25,000)
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TOTAL COVERED CALL OPTIONS WRITTEN (PREMIUM RECEIVED $330,261)............ (204,263)
------------
OTHER LIABILITIES IN EXCESS OF OTHER ASSETS -- (36.1)%..................... (53,275,078) ++
------------
NET ASSETS -- 100.0%....................................................... $147,747,171
============
* At February 28, 2006, the tax basis cost of the Fund's
investments was $181,335,792, and the unrealized
appreciation and depreciation were $22,911,574 and
$(3,020,854), respectively.
+ Securities are exempt from registration under Rule 144A
of the Securities Act of 1933. These securities may be
resold in transactions exempt from registration
normally to qualified institutions. At February 28,
2006, these securities amounted to $10,752,263 or 7.3%
of net assets.
6
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CHARTWELL
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CHARTWELL DIVIDEND AND INCOME FUND, INC. FEBRUARY 28, 2006
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SCHEDULE OF INVESTMENTS (Unaudited)
++ As of February 28, 2006, $55,000,000 of commercial paper was outstanding with
an amortized cost of $54,676,156. The average discount rate of commercial
paper outstanding at February 28, 2006, was 4.52%. The average daily balance
of commercial paper outstanding for the quarter ended February 28, 2006, was
$54,700,397 at a weighted average discount rate of 2.24%. The maximum face
amount of commercial paper outstanding at any time during the quarter ended
February 28, 2006, was $55,000,000. In conjunction with the issuance of the
commercial paper, the Fund has entered into a line of credit arrangement with
a bank for $30,000,000. Interest on borrowing is based on market rates in
effect at the time of borrowing. The commitment fee is computed at the rate
of 0.30% per annum on the unused balance. There were no borrowings under this
arrangement during the quarter ended February 28, 2006.
(a) Securities are illiquid. At February 28, 2006, these securities amounted to
$15,538,200, or 10.5% of net assets.
(b) Rate shown is the 7-day effective yield as of February 28, 2006.
(c) Securities are considered Master Limited Partnerships. At February 28, 2006,
these securities amounted to $15,220,994 or 10.3% of net assets.
LLC Limited Liability Company
LP Limited Partnership
For information regarding the Fund's policy regarding valuation of investments
and other significant accounting policies, please refer to the Fund's most
recent semi-annual or annual financial statements.
7
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CHARTWELL
ITEM 2. CONTROLS AND PROCEDURES
(a) The Registrant's principal executive officer and principal financial officer
have concluded that the Registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended,
(the "1940 Act")) are effective as of a date within 90 days of the filing of
this report that includes the disclosure required by this paragraph, based on
their evaluation of these controls and procedures, required by Rule 30a-3(b)
under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended.
(b) There were no changes in the Registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during
the last fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial reporting.
ITEM 3. EXHIBITS.
(a) A separate certification for the principal executive officer and the
principal financial officer of the Registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are
attached hereto as EX-99Cert.
--------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Chartwell Dividend and Income Fund, Inc.
By (Signature and Title)* /s/ Winthrop S. Jessup
-----------------------------
Winthrop S. Jessup, President
(Principal Executive Officer)
Date April 12, 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.
By (Signature and Title)* /s/ Winthrop S. Jessup
-----------------------------
Winthrop S. Jessup, President
(Principal Executive Officer)
Date April 12, 2006
By (Signature and Title)* /s/ G. Gregory Hagar
-------------------------------------
G. Gregory Hagar, Vice President,
Treasurer and CFO (Principal Financial
Officer)
Date April 12, 2006
* Print the name and title of each signing officer under his or her signature.