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 811-21529
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The Gabelli Global Utility & Income Trust
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(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
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(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31, 2004
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Date of reporting period: June 30, 2004
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE GABELLI GLOBAL UTILITY & INCOME TRUST
ONE CORPORATE CENTER
RYE, NY 10580-1422
(914) 921-5070
WWW.GABELLI.COM
SEMI-ANNUAL REPORT
JUNE 30, 2004
GLU PQ2/04
[LOGO]
THE GABELLI
GLOBAL UTILITY
& INCOME TRUST
THE GABELLI GLOBAL UTILITY & INCOME TRUST
Semi-Annual Report
June 30, 2004
TO OUR SHAREHOLDERS,
The Gabelli Global Utility & Income Trust (the "Trust") commenced
investment operations on May 28, 2004. From inception through June 30, 2004, the
Trust's net asset value ("NAV") rose 0.8%. The Trust's market price declined
7.6% during that period. The Trust's market price on June 30, 2004 was $18.50,
which equates to a 3.7% discount to its NAV of $19.21.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2004.
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
August 10, 2004
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We have separated the portfolio manager's commentary from the financial
statements and investment portfolio due to new corporate governance regulations
stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that
the content of the portfolio manager's commentary is unrestricted. The financial
statements and investment portfolio are mailed separately. Both the commentary
and the financial statements, including the portfolio of investments, will be
available on our website at www.gabelli.com/funds.
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A description of the Trust's proxy voting policies and procedures and how the
Trust voted proxies relating to portfolio securities during the most recent
12-month period ended June 30, 2004 are available (i) without charge, upon
request, by calling 800-GABELLI (800-422-3554); (ii) by writing to The Gabelli
Funds at One Corporate Center, Rye, NY 10580-1422; and (iii) on the Securities
and Exchange Commission's website at www.sec.gov.
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THE GABELLI GLOBAL UTILITY & INCOME TRUST
PORTFOLIO OF INVESTMENTS
JUNE 30, 2004 (UNAUDITED)
MARKET
SHARES COST VALUE
- ----------- ----------- -----------
COMMON STOCKS -- 67.6%
DIVERSIFIED INDUSTRIAL -- 0.3%
5,000 Bouygues SA ................................ $ 170,168 $ 167,411
----------- -----------
ENERGY AND UTILITIES: INTEGRATED -- 39.8%
120,000 AEM SpA .................................... 224,455 217,537
22,000 Ameren Corp. ............................... 969,633 945,120
33,000 American Electric
Power Co. Inc. ........................... 1,045,068 1,056,000
1,500 CH Energy Group Inc. ....................... 68,461 69,660
8,000 Chubu Electric Power Co. Inc. .............. 167,490 168,996
10,000 Chugoku Electric
Power Co. Inc. ........................... 170,328 174,770
26,000 Cinergy Corp. .............................. 981,330 988,000
60,000 DPL Inc. ................................... 1,160,708 1,165,200
10,000 Duke Energy Corp. .......................... 197,904 202,900
46,000 Duquesne Light
Holdings Inc. ............................ 894,732 888,260
3,000 E.ON AG, ADR ............................... 209,576 217,470
8,000 Electricidade de Portugal
SA, ADR .................................. 219,855 225,280
25,000 Endesa SA, ADR ............................. 472,720 473,250
10,000 Enel SpA ................................... 82,935 80,177
16,000 Energy East Corp. .......................... 377,398 388,000
30,000 Enersis SA, ADR ............................ 178,867 178,800
2,000 FPL Group Inc. ............................. 127,820 127,900
58,000 Great Plains Energy Inc. ................... 1,739,303 1,722,600
20,000 Hawaiian Electric
Industries Inc. .......................... 487,530 522,000
142,000 Hera SpA ................................... 303,068 300,610
10,000 Hokkaido Electric
Power Co. Inc. ........................... 171,210 177,702
10,000 Hokuriku Electric
Power Co. ................................ 165,392 167,621
20,000 Iberdrola SA ............................... 406,329 422,177
16,000 Kansai Electric
Power Co. Inc. ........................... 284,746 291,656
10,000 Kyushu Electric
Power Co. Inc. ........................... 178,959 186,500
1,500 Maine & Maritimes Corp. .................... 47,348 48,000
2,000 MGE Energy Inc. ............................ 61,882 65,260
5,000 National Grid Transco
plc, ADR ................................. 200,546 195,850
46,000 NiSource Inc. .............................. 937,995 948,520
22,000 NSTAR ...................................... 1,048,427 1,053,360
17,500 OGE Energy Corp. ........................... 429,863 445,725
20,000 Pepco Holdings Inc. ........................ 369,002 365,600
8,000 Pinnacle West Capital Corp. ................ 319,698 323,120
33,000 Progress Energy Inc. ....................... 1,410,351 1,453,650
42,000 Public Service Enterprise
Group Inc. ............................... 1,724,811 1,681,260
MARKET
SHARES COST VALUE
- ----------- ----------- -----------
18,000 SCANA Corp. ................................ $ 643,460 $ 654,660
25,000 Scottish Power plc, ADR .................... 723,435 737,750
10,000 Shikoku Electric
Power Co. Inc. ........................... 171,759 176,236
28,000 Southern Co. ............................... 811,938 816,200
10,000 Tohoku Electric
Power Co. Inc. ........................... 164,025 168,446
10,000 Tokyo Electric
Power Co. Inc. ........................... 220,693 226,825
35,000 Unisource Energy Corp. ..................... 864,451 869,750
15,000 Westar Energy Inc. ......................... 289,880 298,650
12,000 WPS Resources Corp. ........................ 546,779 556,200
40,000 Xcel Energy Inc. ........................... 673,230 668,400
----------- -----------
22,945,390 23,111,648
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ENERGY AND UTILITIES: NATURAL GAS -- 5.3%
12,500 Atmos Energy Corp. ......................... 307,408 320,000
28,000 KeySpan Corp. .............................. 995,180 1,027,600
10,000 National Fuel Gas Co. ...................... 251,217 250,000
15,000 Nicor Inc. ................................. 500,215 509,550
7,000 Peoples Energy Corp. ....................... 289,707 295,050
64,000 Snam Rete Gas SpA .......................... 279,206 274,865
17,000 Vectren Corp. .............................. 408,701 426,530
----------- -----------
3,031,634 3,103,595
----------- -----------
ENERGY AND UTILITIES: WATER -- 4.4%
6,000 Aqua America Inc. .......................... 119,620 120,300
3,000 California Water
Service Group ............................ 84,840 82,650
3,000 Middlesex Water Co. ........................ 57,861 58,140
78,000 Severn Trent plc ........................... 1,165,148 1,125,965
8,000 SJW Corp. .................................. 258,618 272,000
10,000 Suez SA, ADR ............................... 193,865 210,700
48,000 United Utilities plc ....................... 484,267 451,344
8,000 Veolia Environment ......................... 219,760 225,713
----------- -----------
2,583,979 2,546,812
----------- -----------
ENTERTAINMENT -- 0.0%
1,000 Vivendi Universal SA, ADR+ ................. 28,050 27,900
----------- -----------
FINANCIAL SERVICES -- 1.5%
20,000 Charter One Financial Inc. ................. 879,700 883,800
----------- -----------
FOOD AND BEVERAGE -- 2.0%
15,000 Dreyer's Grand Ice Cream
Holdings Inc., Cl. A ..................... 1,186,651 1,186,350
----------- -----------
HOTELS AND GAMING -- 0.4%
3,000 Mandalay Resort Group ...................... 203,321 205,920
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See accompanying notes to financial statements.
2
THE GABELLI GLOBAL UTILITY & INCOME TRUST
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2004 (UNAUDITED)
MARKET
SHARES COST VALUE
- ----------- ----------- -----------
COMMON STOCKS (CONTINUED)
METALS AND MINING -- 0.4%
10,000 Compania de Minas
Buenaventura SA, ADR ..................... $ 218,930 $ 221,000
----------- -----------
REAL ESTATE -- 0.2%
1,500 Chelsea Property Group Inc. ................ 97,775 97,830
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TELECOMMUNICATIONS -- 8.7%
4,600 ALLTEL Corp. ............................... 233,084 232,852
30,000 BCE Inc. ................................... 592,079 601,200
9,000 BellSouth Corp. ............................ 226,200 235,980
30,000 BT Group plc, ADR .......................... 1,027,064 1,098,000
2,000 Deutsche Telekom
AG, ADR+ ................................. 35,010 35,420
2,000 France Telecom SA, ADR ..................... 50,800 52,560
2,000 KPN NV, ADR ................................ 15,340 15,400
10,000 Manitoba Telecom
Services Inc. ............................ 340,920 338,244
19,000 SBC Communications Inc. .................... 452,510 460,750
15,000 Sprint Corp. ............................... 265,450 264,000
1,000 Swisscom AG ................................ 313,732 330,565
20,000 Telefonica SA, ADR ......................... 873,836 892,600
1,000 Telefonos de Mexico SA
de CV, Cl. L, ADR ........................ 33,330 33,270
13,000 Verizon Communications Inc. ................ 453,486 470,470
----------- -----------
4,912,841 5,061,311
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WIRELESS COMMUNICATIONS -- 4.6%
100,000 AT&T Wireless
Services Inc.+ ........................... 1,425,966 1,432,000
1,000 mm02 plc, ADR+ ............................. 16,950 16,800
2,000 Rogers Wireless
Communications Inc.,
Cl. B+ ................................... 51,390 54,100
201,000 Telecom Italia Mobile SpA .................. 1,124,988 1,139,586
----------- -----------
2,619,294 2,642,486
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TOTAL COMMON
STOCKS ................................... 38,877,733 39,256,063
----------- -----------
PREFERRED STOCKS -- 0.1%
AEROSPACE -- 0.1%
500 Sequa Corp.,
$5.00 Cv. Pfd. ........................... 45,775 48,625
----------- -----------
BROADCASTING -- 0.0%
500 Sinclair Broadcast Group Inc.,
6.000% Cv. Pfd., Ser. D .................. 21,504 21,625
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TOTAL PREFERRED
STOCKS ................................... 67,279 70,250
----------- -----------
PRINCIPAL MARKET
AMOUNT COST VALUE
- ----------- ----------- -----------
CONVERTIBLE CORPORATE BONDS -- 0.7%
AEROSPACE -- 0.2%
$ 100,000 GenCorp Inc., Sub. Deb. Cv.,
5.750%, 04/15/07 ......................... $ 102,340 $ 106,000
----------- -----------
EQUIPMENT AND SUPPLIES -- 0.0%
20,000 Robbins & Myers Inc.,
Sub. Deb. Cv.,
8.000%, 01/31/08 ......................... 21,220 21,175
----------- -----------
REAL ESTATE -- 0.3%
200,000 Palm Harbor Homes Inc., Cv.,
3.250%, 05/15/24 (a) ..................... 197,250 192,000
----------- -----------
TELECOMMUNICATIONS -- 0.2%
100,000 Nortel Networks Corp., Cv.,
4.250%, 09/01/08 ......................... 95,750 96,250
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TOTAL CONVERTIBLE
CORPORATE BONDS .......................... 416,560 415,425
----------- -----------
U.S. GOVERNMENT OBLIGATIONS -- 31.6%
18,317,000 U.S. Treasury Bills,
1.015%++, 07/08/04 ....................... 18,313,438 18,313,438
----------- -----------
TOTAL INVESTMENTS -- 100.0%............................... $57,675,010 58,055,176
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OTHER ASSETS IN EXCESS OF LIABILITIES................................... 537,727
-----------
NET ASSETS -- COMMON STOCK
(3,050,236 common shares outstanding)................................ $58,592,903
===========
NET ASSET VALUE PER COMMON SHARE
($58,592,903 / 3,050,236 shares outstanding)......................... $19.21
======
- ---------------------
For Federal tax purposes:
Aggregate cost........................................... $57,675,010
===========
Gross unrealized appreciation............................ $ 589,459
Gross unrealized depreciation............................ (209,293)
-----------
Net unrealized appreciation.............................. $ 380,166
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(a) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At June 30,
2004, the Rule 144A securities are considered liquid and the market value
amounted to $192,000 or 0.3% of total net assets.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR - American Depository Receipt.
See accompanying notes to financial statements.
3
THE GABELLI GLOBAL UTILITY & INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2004 (UNAUDITED)
ASSETS:
Investments, at value (cost $57,675,010) .................... $58,055,176
Foreign currency, at value (cost $8,475) .................... 8,526
Receivable for investments sold ............................. 1,077,100
Dividends and interest receivable ........................... 112,298
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TOTAL ASSETS ................................................ 59,253,100
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LIABILITIES:
Payable for investments purchased ........................... 467,648
Payable for investment advisory fees ........................ 47,718
Payable for trustees fees ................................... 13,161
Payable for offering expenses ............................... 79,079
Payable for audit and legal fees ............................ 6,635
Payable for shareholder communication fees .................. 5,484
Payable for transfer agent fees ............................. 5,484
Payable to custodian ........................................ 4,701
Other accrued expenses and liabilities ...................... 30,287
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TOTAL LIABILITIES ........................................... 660,197
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NET ASSETS applicable to 3,050,236 shares outstanding ....... $58,592,903
===========
NET ASSETS CONSIST OF:
Shares of beneficial interest, at par value ................. $ 3,050
Additional paid-in capital .................................. 58,134,448
Accumulated net investment income ........................... 72,336
Accumulated net realized gain on investments
and foreign currency transactions ......................... 3,044
Net unrealized appreciation on investments
and foreign currency transactions ......................... 380,025
-----------
TOTAL NET ASSETS ............................................ $58,592,903
===========
NET ASSET VALUE
($58,592,903 / 3,050,236 shares outstanding;
unlimited number of shares authorized of
$0.001 par value) ......................................... $19.21
======
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 2004 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $10,345) ................. $ 138,734
Interest .................................................... 30,498
-----------
TOTAL INVESTMENT INCOME ..................................... 169,232
-----------
EXPENSES:
Investment advisory fees .................................... 54,072
Trustees fees ............................................... 13,161
Legal and audit fees ........................................ 6,635
Shareholder services fees ................................... 5,484
Shareholder communications expenses ......................... 5,484
Custodian fees .............................................. 4,701
Miscellaneous expenses ...................................... 7,359
-----------
TOTAL EXPENSES .............................................. 96,896
-----------
NET INVESTMENT INCOME ....................................... 72,336
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments ............................ 2,993
Net realized gain on foreign currency transactions .......... 51
-----------
Net realized gain on investments and foreign
currency transactions ..................................... 3,044
-----------
Net change in unrealized appreciation on
investments and foreign currency transactions ............. 380,025
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS ......................... 383,069
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................................... $ 455,405
===========
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
PERIOD ENDED
JUNE 30, 2004 (A)
(UNAUDITED)
-----------------
OPERATIONS:
Net investment income ................................................................ $ 72,336
Net realized gain on investments and foreign currency transactions ................... 3,044
Net change in unrealized appreciation on investments and foreign currency transactions 380,025
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................. 455,405
------------
TRUST SHARE TRANSACTIONS:
Net increase in net assets from common shares issued in offering ..................... 58,159,499
Offering costs for common shares charged to paid-in-capital .......................... (122,009)
------------
NET INCREASE IN NET ASSETS FROM TRUST SHARE TRANSACTIONS ............................. 58,037,490
------------
NET INCREASE IN NET ASSETS ........................................................... 58,492,895
NET ASSETS:
Beginning of period .................................................................. 100,008
------------
End of period (including undistributed net investment income of $72,336) ............. $ 58,592,903
============
- -----------
(a) The Gabelli Global Utility & Income Trust commenced investment operations
on May 28, 2004.
See accompanying notes to financial statements.
4
THE GABELLI GLOBAL UTILITY & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION. The Gabelli Global Utility & Income Trust (the "Trust") is a
closed-end, non-diversified management investment company organized under the
laws of the State of Delaware and registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Trust sold 5,236 shares to Gabelli Funds,
LLC (the "Adviser") for $100,008 on May 17, 2004. Investment operations
commenced on May 28, 2004 upon the settlement of the sale of 3,045,000 shares of
beneficial interest in the amount of $58,037,490 (net of underwriting fees and
expenses of $2,862,600).
The Trust's investment objective is to seek a consistent level of after-tax
total return over the long-term with an emphasis currently on qualifying
dividends. The Trust will attempt to achieve its investment objective by
investing, under normal market conditions, at least 80% of its assets in equity
securities (including preferred securities) of domestic and foreign companies
involved to a substantial extent in providing products, services or equipment
for the generation or distribution of electricity, gas or water and
infrastructure operations, and in equity securities (including preferred
securities) of companies in other industries, in each case in such securities
that are expected to periodically pay dividends.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith, to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by the Adviser.
Portfolio securities primarily traded on foreign markets are generally
valued at the preceding closing values of such securities on their respective
exchanges or if after the close, market conditions change significantly, certain
foreign securities may be fair valued pursuant to procedures established by the
Board. Debt instruments that are not credit impaired with remaining maturities
of 60 days or less are valued at amortized cost, unless the Board determines
such does not reflect the securities' fair value, in which case these securities
will be valued at their fair value as determined by the Board. Debt instruments
having a maturity greater than 60 days for which market quotations are readily
available are valued at the latest average of the bid and asked prices. If there
were no asked prices quoted on such day, the security is valued using the
closing bid price. Futures contracts are valued at the official closing
settlement price of the exchange or board of trade on which the applicable
contract is traded.
Securities and assets for which market quotations are not readily
available are valued at their fair value as determined in good faith under
procedures established by and under the general supervision of the Board. Fair
valuation methodologies and procedures may include, but are not limited to:
analysis and review of available financial and non-financial information about
the company; comparisons to the valuation and changes in valuation of similar
securities, including a comparison of foreign securities to the equivalent U.S.
dollar value ADR securities at the close of the U.S. exchange; and evaluation of
any other information that could be indicative of the value of the security.
5
THE GABELLI GLOBAL UTILITY & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
REPURCHASE AGREEMENTS. The Trust may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System of with other brokers or dealers
that meet credit guidelines established by the Adviser and reviewed by the Board
of Trustees. Under the terms of a typical repurchase agreement, a Trust takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and a Trust to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during a Trust's holding period. A
Trust will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by a Trust in each agreement. The Trust will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Trust may be delayed or limited.
FOREIGN CURRENCY TRANSACTIONS. The books and records of the Trust are
maintained in United States (U.S.) dollars. Foreign currencies, investments and
other assets and liabilities are translated into U.S. dollars at the exchange
rates prevailing at the end of the period, and purchases and sales of investment
securities, income and expenses are translated at the exchange rate prevailing
on the respective dates of such transactions. Unrealized gains and losses, which
result from changes in foreign exchange rates and/or changes in market prices of
securities, have been included in unrealized appreciation/depreciation on
investments and foreign currency transactions. Net realized foreign currency
gains and losses resulting from changes in exchange rates include foreign
currency gains and losses between trade date and settlement date on investment
securities transactions, foreign currency transactions and the difference
between the amounts of interest and dividends recorded on the books of the Trust
and the amounts actually received. The portion of foreign currency gains and
losses related to fluctuation in exchange rates between the initial trade date
and subsequent sale trade date is included in realized gain/(loss) on
investments.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for as of the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders
are recorded on the ex-dividend date. Income distributions and capital gain
distributions are determined in accordance with Federal income tax regulations,
which may differ from accounting principles generally accepted in the United
States.
PROVISION FOR INCOME TAXES. The Trust intends to qualify and elect to be
treated as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). It is the Trust's policy to
comply with the requirements of the Code applicable to regulated investment
companies and to distribute substantially all of its net investment company
taxable income and net capital gains. Therefore, no provision for Federal income
taxes is required.
Dividends and interest from non-U.S. sources received by the Trust are
generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such
withholding taxes may be reduced or eliminated under the terms of applicable
U.S. income tax treaties, and the Trust intends to undertake any procedural
steps required to claim the benefits of such treaties.
6
THE GABELLI GLOBAL UTILITY & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Trust has entered into an
investment advisory agreement (the "Advisory Agreement") with the Adviser which
provides that the Trust will pay the Adviser on the first business day of each
month a fee for the previous month equal on an annual basis to 1.00% of the
value of the Trust's average weekly net assets. In accordance with the Advisory
Agreement, the Adviser provides a continuous investment program for the Trust's
portfolio and oversees the administration of all aspects of the Trust's business
and affairs.
During the period ended June 30, 2004, Gabelli & Company, Inc. received
$57,135 in brokerage commissions as a result of executing agency transactions in
portfolio securities on behalf of the Trust.
The cost of calculating the Trust's net asset value per share is a Trust
expense pursuant to the Investment Advisory Agreement between the Trust and the
Adviser. During the period ended June 30, 2004, the Trust reimbursed the Adviser
$3,181 in connection with the cost of computing the Trust's net asset value.
4. PORTFOLIO SECURITIES. Cost of purchases and proceeds from sales of
securities, other than short-term securities, for the period ended June 30, 2004
aggregated $40,461,764 and $1,103,385, respectively.
5. CAPITAL. The Trust is authorized to issue an unlimited number of common
shares of beneficial interest, par value $.001 per share. The Board of Trustees
of the Trust has authorized the repurchase of its shares on the open market when
the shares are trading at a discount of 10% or more (or such other percentage as
the Board of Trustees may determine from time to time) from the net asset value
of the shares. During the period ended June 30, 2004, the Trust did not
repurchase any shares of beneficial interest in the open market.
Transactions in shares of beneficial interest were as follows:
PERIOD ENDED
JUNE 30, 2004 (A)
(UNAUDITED)
-----------------------
SHARES AMOUNT
--------- -----------
Initial seed capital, May 17, 2004 .. 5,236 $ 100,008
Shares issued in offering ........... 3,045,000 58,037,490
--------- -----------
Net increase ........................ 3,050,236 $58,137,498
========= ===========
- ------------
(a) The Gabelli Global Utility & Income Trust commenced investment operations
on May 28, 2004.
6. INDUSTRY CONCENTRATION. Because the Trust primarily invests in common stocks
and other securities of foreign and domestic companies in the utility industry,
its portfolio may be subject to greater risk and market fluctuations than a
portfolio of securities representing a broad range of investments.
7. OTHER MATTERS. On October 7, 2003, the Fund's Adviser received a subpoena
from the Attorney General of the State of New York requesting information on
mutual fund shares trading practices. The Adviser has also received requests for
information from the SEC regarding mutual fund trading practices and valuation
of portfolio securities. The Adviser has responded to the requests. The Fund
does not believe that these matters will have a material adverse effect on the
Fund's financial position or the results of its operations.
8. INDEMNIFICATIONS. The Trust enters into contracts that contain a variety of
indemnifications. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
7
THE GABELLI GLOBAL UTILITY & INCOME TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A GLOBAL UTILITY & INCOME TRUST SHARE OF BENEFICIAL INTEREST
OUTSTANDING THROUGHOUT EACH PERIOD:
PERIOD ENDED
JUNE 30, 2004 (a)
(UNAUDITED)
-----------------
OPERATING PERFORMANCE:
Net asset value, beginning of period ......................... $ 19.06(b)
-------
Net investment income ........................................ 0.02
Net realized and unrealized gain on investments .............. 0.13
-------
Total from investment operations ............................. 0.15
-------
NET ASSET VALUE, END OF PERIOD ............................... $ 19.21
=======
Net asset value total return* ................................ 0.79%
=======
Market value, end of period .................................. $ 18.50
=======
Total investment return** .................................... (7.6)%
=======
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets end of period (in 000's) .......................... $58,593
Ratio of net investment income to average net assets ......... 1.27%(c)
Ratio of operating expenses to average net assets ............ 1.70%(c)
Portfolio turnover rate ...................................... 3%
- ----------------
(a) The Gabelli Global Utility & Income Trust commenced investment operations
on May 28, 2004.
(b) The beginning of period NAV reflects a $0.04 reduction for costs
associated with the initial public offering.
(c) Annualized.
* Based on net asset value per share at commencement of operations of $19.06
per share. Total return for the period of less than one year is not
annualized.
** Based on market value per share at initial public offering of $20.00 per
share. Total return for the period of less than one year is not
annualized.
See accompanying notes to financial statements.
8
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLAN
ENROLLMENT IN THE PLAN
It is the Policy of The Gabelli Global Utility & Income Trust ("Global
Utility & Income Trust") to automatically reinvest dividends. As a "registered"
shareholder you automatically become a participant in the Global Utility &
Income Trust's Automatic Dividend Reinvestment Plan (the "Plan"). The Plan
authorizes the Global Utility & Income Trust to issue shares to participants
upon an income dividend or a capital gains distribution regardless of whether
the shares are trading at a discount or a premium to net asset value. All
distributions to shareholders whose shares are registered in their own names
will be automatically reinvested pursuant to the Plan in additional shares of
the Global Utility & Income Trust. Plan participants may send their stock
certificates to EquiServe Trust Company ("EquiServe") to be held in their
dividend reinvestment account. Registered shareholders wishing to receive their
distribution in cash must submit this request in writing to:
The Gabelli Global Utility & Income Trust
c/o EquiServe
P.O. Box 43011
Providence, RI 02940-3011
Shareholders requesting this cash election must include the shareholder's
name and address as they appear on the share certificate. Shareholders with
additional questions regarding the Plan or requesting a copy of the terms of the
Plan may contact EquiServe at (800) 336-6983.
SHAREHOLDERS WISHING TO LIQUIDATE REINVESTED SHARES held at EquiServe must
do so in writing or by telephone. Please submit your request to the above
mentioned address or telephone number. Include in your request your name,
address and account number. The cost to liquidate shares is $2.50 per
transaction as well as the brokerage commission incurred. Brokerage charges are
expected to be less than the usual brokerage charge for such transactions.
If your shares are held in the name of a broker, bank or nominee, you
should contact such institution. If such institution is not participating in the
Plan, your account will be credited with a cash dividend. In order to
participate in the Plan through such institution, it may be necessary for you to
have your shares taken out of "street name" and re-registered in your own name.
Once registered in your own name your dividends will be automatically
reinvested. Certain brokers participate in the Plan. Shareholders holding shares
in "street name" at participating institutions will have dividends automatically
reinvested. Shareholders wishing a cash dividend at such institution must
contact their broker to make this change.
The number of shares of Common Stock distributed to participants in the
Plan in lieu of cash dividends is determined in the following manner. Under the
Plan, whenever the market price of the Global Utility & Income Trust's Common
Stock is equal to or exceeds net asset value at the time shares are valued for
purposes of determining the number of shares equivalent to the cash dividends or
capital gains distribution, participants are issued shares of Common Stock
valued at the greater of (i) the net asset value as most recently determined or
(ii) 95% of the then current market price of the Global Utility & Income Trust's
Common Stock. The valuation date is the dividend or distribution payment date
or, if that date is not an American Stock Exchange trading day, the next trading
day. If the net asset value of the Common Stock at the time of valuation exceeds
the market price of the Common Stock, participants will receive shares from the
Global Utility & Income Trust valued at market price. If the Global Utility &
Income Trust should declare a dividend or capital gains distribution payable
only in cash, EquiServe will buy Common Stock in the open market, or on the
American Stock Exchange or elsewhere, for the participants' accounts, except
that EquiServe will endeavor to terminate purchases in the open market and cause
the Global Utility & Income Trust to issue shares at net asset value if,
following the commencement of such purchases, the market value of the Common
Stock exceeds the then current net asset value.
9
The automatic reinvestment of dividends and capital gains distributions
will not relieve participants of any income tax which may be payable on such
distributions. A participant in the Plan will be treated for Federal income tax
purposes as having received, on a dividend payment date, a dividend or
distribution in an amount equal to the cash the participant could have received
instead of shares.
The Global Utility & Income Trust reserves the right to amend or terminate
the Plan as applied to any voluntary cash payments made and any dividend or
distribution paid subsequent to written notice of the change sent to the members
of the Plan at least 90 days before the record date for such dividend or
distribution. The Plan also may be amended or terminated by EquiServe on at
least 90 days' written notice to participants in the Plan.
VOLUNTARY CASH PURCHASE PLAN
The Voluntary Cash Purchase Plan is yet another vehicle for our
shareholders to increase their investment in the Global Utility & Income Trust.
In order to participate in the Voluntary Cash Purchase Plan, shareholders must
have their shares registered in their own name.
Participants in the Voluntary Cash Purchase Plan have the option of making
additional cash payments to EquiServe for investments in the Global Utility &
Income Trust's shares at the then current market price. Shareholders may send an
amount from $250 to $10,000. EquiServe will use these funds to purchase shares
in the open market on or about the 1st and 15th of each month. EquiServe will
charge each shareholder who participates $0.75, plus a pro rata share of the
brokerage commissions. Brokerage charges for such purchases are expected to be
less than the usual brokerage charge for such transactions. It is suggested that
any voluntary cash payments be sent to EquiServe, P.O. Box 43011, Providence, RI
02940-3011 such that EquiServe receives such payments approximately 10 days
before the 1st and 15th of the month. Funds not received at least five days
before the investment date shall be held for investment until the next purchase
date. A payment may be withdrawn without charge if notice is received by
EquiServe at least 48 hours before such payment is to be invested.
For more information regarding the Dividend Reinvestment Plan and
Voluntary Cash Purchase Plan, brochures are available by calling (914) 921-5070
or by writing directly to the Global Utility & Income Trust.
10
TRUSTEES AND OFFICERS
THE GABELLI GLOBAL UTILITY & INCOME TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES
Anthony J. Colavita
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C.
James P. Conn
FORMER MANAGING DIRECTOR AND CHIEF INVESTMENT OFFICER,
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Mario d'Urso
CHAIRMAN, MITTEL CAPITAL MARKETS SPA
Vincent D. Enright
FORMER SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER,
KEYSPAN ENERGY CORP.
Michael J. Melarkey
ATTORNEY-AT-LAW,
AVANSINO, MELARKEY, KNOBEL & MULLIGAN
Karl Otto Pohl
FORMER PRESIDENT, DEUTSCHE BUNDESBANK
Salvatore M. Salibello
CERTIFIED PUBLIC ACCOUNTANT,
SALIBELLO & BRODER
Salvatore J. Zizza
CHAIRMAN, HALLMARK ELECTRICAL SUPPLIES CORP.
OFFICERS
Bruce N. Alpert
PRESIDENT
David I. Schachter
VICE PRESIDENT & OMBUDSMAN
James E. McKee
SECRETARY
Richard C. Sell, Jr.
TREASURER
INVESTMENT ADVISER
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
CUSTODIAN
State Street Bank and Trust Company
COUNSEL
Skadden, Arps, Slate, Meagher & Flom, LLP
TRANSFER AGENT AND REGISTRAR
EquiServe Trust Company
STOCK EXCHANGE LISTING
Common
--------
ASE-Symbol: GLU
Shares Outstanding: 3,050,236
The Net Asset Value appears in the Publicly Traded Funds column, under the
heading "Specialized Equity Funds," in Sunday's The New York Times and in
Monday's The Wall Street Journal. It is also listed in Barron's Mutual
Funds/Closed End Funds section under the heading "Specialized Equity Funds."
The Net Asset Value may be obtained each day by calling (914) 921-5071.
- --------------------------------------------------------------------------------
For general information about the Gabelli Funds, call 800-GABELLI
(800-422-3554), fax us at 914-921-5118, visit Gabelli Funds' Internet homepage
at: WWW.GABELLI.COM or e-mail us at: closedend@gabelli.com
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Global Utility & Income Trust may,
from time to time, purchase its shares in the open market when the Global
Utility & Income Trust shares are trading at a discount of 10% or more from the
net asset value of the shares.
- --------------------------------------------------------------------------------
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
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
=============================================================================================================================
(D) MAXIMUM NUMBER (0R
(C) TOTAL NUMBER OF SHARES APPROXIMATE DOLLAR VALUE) OF SHARES
(A) TOTAL NUMBER (B) AVERAGE (OR UNITS) PURCHASED AS PART (0R UNITS) THAT MAY YET BE
OF SHARES (OR PRICE PAID PER OF PUBLICLY ANNOUNCED PLANS PURCHASED UNDER THE PLANS OR
PERIOD UNITS) PURCHASED SHARE (OR UNIT) OR PROGRAMS PROGRAMS
=============================================================================================================================
Month #1 Common - N/A Common - N/A Common - N/A N/A
01/01/04
through 01/31/04 Preferred - N/A Preferred - N/A Preferred - N/A
=============================================================================================================================
Month #2 Common - N/A Common - N/A Common - N/A N/A
02/01/04
through 02/29/04 Preferred - N/A Preferred - N/A Preferred - N/A
=============================================================================================================================
Month #3 Common - N/A Common - N/A Common - N/A N/A
03/01/04
through 03/31/04 Preferred - N/A Preferred - N/A Preferred - N/A
=============================================================================================================================
Month #4 Common - N/A Common - N/A Common - N/A N/A
04/01/04
through 04/30/04 Preferred - N/A Preferred - N/A Preferred - N/A
=============================================================================================================================
Month #5 Common purchased Common - $19.10 Common - N/A Common - 3,050,236
05/01/04 by an affiliate -
through 05/31/04 145,000 Preferred - N/A Preferred - N/A
Preferred - N/A
=============================================================================================================================
Month #6 Common purchased Common - Common - N/A Common - 3,050,236
06/01/04 by an affiliate - $18.5304
through 06/30/04 11,200 Preferred - N/A
Preferred - N/A
Preferred - N/A
=============================================================================================================================
Total Common - 156,200 Common - Common - N/A N/A
$19.0592
Preferred - N/A Preferred - N/A
Preferred - N/A
=============================================================================================================================
a. The date each plan or program was announced - The notice of the potential
repurchase of common shares occurs quarterly in the Fund's quarterly report in
accordance with Section 23 (c) of the Investment Company Act of 1940, as
amended.
b. The dollar amount (or share or unit amount) approved - Any or all common
shares outstanding may be repurchased when the Fund's common shares are trading
at a discount of 10% or more from the net asset value of the shares.
c. The expiration date (if any) of each plan or program - The Fund's repurchase
plans are ongoing.
d. Each plan or program that has expired during the period covered by the table
- - The Fund's repurchase plans are ongoing.
e. Each plan or program the registrant has determined to terminate prior to
expiration, or under which the registrant does not intend to make further
purchases. - The Fund's repurchase plans are ongoing.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, 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") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the 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 (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(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 (17
CFR 270.30a-3(d)) that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
ITEM 11. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
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) The Gabelli Global Utility & Income Trust
-----------------------------------------------------
By (Signature and Title)* /s/ BRUCE N. ALPERT
------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date September 7, 2004
----------------------------------------------------------------------------
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/ BRUCE N. ALPERT
-------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date September 7, 2004
----------------------------------------------------------------------------
By (Signature and Title)* /s/ RICHARD C. SELL, JR.
-------------------------------------------------
Richard C. Sell, Jr., Principal Financial Officer
Date September 7, 2004
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.