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 811-05848
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The Gabelli Value Fund Inc.
---------------------------------------------------------
(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
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Date of reporting period: December 31, 2007
-----------------
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, 100 F Street, NE,
Washington, DC 20549. 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 VALUE FUND INC.
ANNUAL REPORT
DECEMBER 31, 2007
TO OUR SHAREHOLDERS,
The Sarbanes-Oxley Act requires a fund's principal executive and financial
officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio manager's commentary
and subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.
Because we do not want our portfolio managers to eliminate their opinions
and/or restrict their commentary to historical facts, we have separated their
commentary from the financial statements and investment portfolio and have sent
it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com/funds.
Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2007 with a description of factors that affected the
performance during the past year.
PERFORMANCE DISCUSSION (UNAUDITED)
In 2007, the Gabelli Value Fund posted a return of 4.63% versus 5.49% for the
S&P 500. The most profitable areas of investment for the Fund were Industrials
(+26%) and Consumer Staples (+23%). Two S&P sectors were down for the year -
Financials (-19%) and Consumer Discretionary (-13%). The benefit of the Fund's
relative underweighting of Financials (6% for the Fund vs. 21% for the S&P) was
largely offset by its overweighting of Consumer Discretionary (41% for the Fund
vs. 10% for the S&P). The Fund was also hurt by its underweighting in Energy.
Superior stock selection across the board aided the Fund's relative performance,
however.
Many of the Fund's best performing stocks in 2007 related to oil and
agriculture. Flowserve (+91%) (1.6% of net assets as of December 31, 2007), a
valve supplier to the oil and gas industry, was the single largest positive
contributor to performance. Agricultural stocks Mosaic Co. (+342%) (0.3%), CNH
Global (141%) (0.7%), Monsanto (113%) (0.1%), and Deere & Co (96%) (0.8%) were
strong. A handful of media stocks performed well during the year, including
Discovery Holding (+56%) (1.1%), Rogers Communications (+52%) (2.1%), and
Liberty Global (+34%) (1.2%). Finally, two long-time holdings of the Fund were
the subjects of completed buyouts during the year. Blackstone Group purchased
Hilton Hotels for $47.50 per share while the Carlyle Group purchased Sequa Corp.
for $175 per share.
It was a difficult year for many of the Fund's largest holdings. Media
General (-43%) (2.2%) continued to suffer from a secular decline in newspaper
stocks while Sprint Corp. (-30%) (2.3%) has had difficulty integrating its
acquisition of Nextel Corp. A collapse in U.S. cable valuations led to poor
performances by Time Warner (-24%) (2.5%) and Cablevision (-14%) (5.1%).
Meanwhile, cyclical weakness has begun to impact our large positions, American
Express (-14%) (3.3%) and CBS Corp. (-14%) (3.6%).
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
February 22, 2008
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GABELLI VALUE FUND
CLASS A SHARES, THE S&P 500 INDEX, AND THE CONSUMER PRICE INDEX + 10%
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Gabelli Value Fund Class A Shares S&P 500 Index Consumer Price Index +10%
9/29/1989 $ 9,450 $10,000 $ 10,000
12/31/1989 $ 9,648 $10,205 $ 11,460
12/31/1990 $ 9,109 $ 9,888 $ 13,305
12/31/1991 $10,505 $12,893 $ 15,048
12/31/1992 $11,838 $13,875 $ 16,989
12/31/1993 $16,508 $15,270 $ 19,147
12/31/1994 $16,508 $15,470 $ 21,578
12/31/1995 $20,214 $21,277 $ 24,276
12/31/1996 $21,980 $26,160 $ 27,504
12/31/1997 $32,581 $34,884 $ 30,723
12/31/1998 $40,150 $44,860 $ 34,286
12/31/1999 $52,966 $54,295 $ 38,641
12/31/2000 $48,808 $49,354 $ 43,819
12/31/2001 $51,453 $43,491 $ 48,902
12/31/2002 $43,247 $33,884 $ 54,965
12/31/2003 $57,029 $43,598 $ 61,506
12/31/2004 $64,318 $48,337 $ 69,686
12/31/2005 $64,208 $50,710 $ 79,024
12/31/2006 $78,135 $58,712 $ 88,903
12/31/2007 $81,753 $61,936 $101,438
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and
graph do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2007 (a)
Since
Inception
Quarter 1 Year 3 Year 5 Year 10 Year 15 Year (9/29/89)
------- ------ ------ ------ ------- ------- ---------
GABELLI VALUE FUND CLASS a ........ (5.75)% 4.63% 8.33% 13.58% 9.64% 13.75% 12.55%
(11.17)(b) (1.38)(b) 6.21(b) 12.25(b) 8.99(b) 13.30(b) 12.18(b)
S&P 500 Index ..................... (3.33) 5.49 8.61 12.82 5.91 10.49 10.51
The Consumer Price Index +10% ..... 10.74 14.10 13.59 13.04 12.69 12.65 14.36
Class B ........................... (5.91) 3.86 7.51 12.75 8.99 13.30 12.19
(10.61)(c) (1.14)(c) 6.64(c) 12.50(c) 8.99 13.30 12.19
Class C ........................... (5.84) 3.99 7.53 12.75 9.02 13.33 12.20
(6.79)(d) 2.99(d) 7.53 12.75 9.02 13.33 12.20
IN THE CURRENT PROSPECTUS, THE EXPENSE RATIOS FOR CLASS A, B, AND C SHARES ARE
1.41%, 2.16%, AND 2.16%, RESPECTIVELY. THE MAXIMUM SALES CHARGE FOR CLASS A, B,
AND C SHARES IS 5.75%, 5.00%, AND 1.00%, RESPECTIVELY.
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE
AND REINVESTMENT OF DISTRIBUTIONS AND ARE NET OF EXPENSES. INVESTMENT
RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN
SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT
ANNUALIZED. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE
PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE
INFORMATION AS OF THE MOST RECENT MONTH END. INVESTORS SHOULD CAREFULLY
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE
FUND BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE INFORMATION ABOUT THIS
AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING.
THE CLASS A SHARES' NET ASSET VALUES ("NAV'S") PER SHARE ARE USED TO
CALCULATE PERFORMANCE FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS B
SHARES AND CLASS C SHARES ON MARCH 15, 2000. THE ACTUAL PERFORMANCE FOR
THE CLASS B SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER DUE TO THE
ADDITIONAL EXPENSES ASSOCIATED WITH THESE CLASSES OF SHARES. THE S&P 500
INDEX IS AN UNMANAGED INDICATOR OF STOCK MARKET PERFORMANCE. THE CONSUMER
PRICE INDEX IS A WIDELY USED COST OF LIVING BENCHMARK PUBLISHED BY THE
BUREAU OF LABOR STATISTICS IN THE DEPARTMENT OF LABOR. DIVIDENDS ARE
CONSIDERED REINVESTED EXCEPT FOR THE CONSUMER PRICE INDEX +10%. YOU CANNOT
INVEST DIRECTLY IN AN INDEX.
(b) THE MAXIMUM SALES CHARGE ON CLASS A SHARES IS 5.75%.
(c) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS B
SHARES UPON REDEMPTION AT THE END OF THE QUARTER, ONE YEAR, THREE YEAR,
AND FIVE YEAR PERIODS OF 5%, 5%, 3%, AND 2%, RESPECTIVELY, OF THE FUND'S
NAV PER SHARE AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS LOWER. CLASS B
SHARES ARE NOT AVAILABLE FOR NEW PURCHASES.
(d) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS C
SHARES UPON REDEMPTION AT THE END OF THE QUARTER, AND ONE YEAR PERIODS OF
1% OF THE FUND'S NAV PER SHARE AT THE TIME OF PURCHASE OR SALE, WHICHEVER
IS LOWER.
- --------------------------------------------------------------------------------
2
THE GABELLI VALUE FUND INC.
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from July 1, 2007 through December 31, 2007
EXPENSE TABLE
- --------------------------------------------------------------------------------
We believe it is important for you to understand the impact of fees and expenses
regarding your investment. All mutual funds have operating expenses. As a
shareholder of a fund, you incur ongoing costs, which include costs for
portfolio management, administrative services, and shareholder reports (like
this one), among others. Operating expenses, which are deducted from a fund's
gross income, directly reduce the investment return of a fund. When a fund's
expenses are expressed as a percentage of its average net assets, this figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The Expense Table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN: This section provides information about actual account
values and actual expenses. You may use this section to help you to estimate the
actual expenses that you paid over the period after any fee waivers and expense
reimbursements. The "Ending Account Value" shown is derived from the Fund's
ACTUAL return during the past six months, and the "Expenses Paid During Period"
shows the dollar amount that would have been paid by an investor who started
with $1,000 in the Fund. You may use this information, together with the amount
you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period" to estimate
the expenses you paid during this period.
HYPOTHETICAL 5% RETURN: This section provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio. It assumes a hypothetical annualized return of 5% before expenses during
the period shown. In this case - because the hypothetical return used is NOT the
Fund's actual return - the results do not apply to your investment and you
cannot use the hypothetical account value and expense to estimate the actual
ending account balance or expenses you paid for the period. This example is
useful in making comparisons of the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as sales
charges (loads), redemption fees, or exchange fees, if any, which are described
in the Prospectus. If these costs were applied to your account, your costs would
be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. The "Annualized Expense Ratio" represents the actual expenses
for the last six months and may be different from the expense ratio in the
Financial Highlights which is for the year ended December 31, 2007.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
07/01/07 12/31/07 Ratio Period*
- ------------------------------------------------------------------------------------
THE GABELLI VALUE FUND INC.
- ------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class A $ 1,000.00 $ 951.30 1.39% $ 6.87
Class B $ 1,000.00 $ 948.20 2.14% $ 10.57
Class C $ 1,000.00 $ 948.30 2.14% $ 10.57
HYPOTHETICAL 5% RETURN
Class A $ 1,000.00 $ 1,018.30 1.39% $ 7.11
Class B $ 1,000.00 $ 1,014.50 2.14% $ 10.93
Class C $ 1,000.00 $ 1,014.50 2.14% $ 10.93
* Expenses are equal to the Fund's annualized expense ratio for the last six
months multiplied by the average account value over the period, multiplied
by the number of days in the most recent fiscal half-year, then divided by
365.
3
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total net assets
as of December 31, 2007:
THE GABELLI VALUE FUND
Entertainment ....................................................... 13.1%
Cable and Satellite ................................................. 10.0%
Telecommunications .................................................. 7.0%
Broadcasting ........................................................ 6.4%
Publishing .......................................................... 6.4%
Food and Beverage ................................................... 6.1%
Financial Services .................................................. 5.6%
Metals and Mining ................................................... 5.5%
Diversified Industrial .............................................. 5.2%
Consumer Products ................................................... 4.6%
Equipment and Supplies .............................................. 3.7%
Environmental Services .............................................. 2.8%
Energy and Utilities ................................................ 2.7%
Electronics ......................................................... 2.7%
U.S. Government Obligations ......................................... 2.4%
Hotels and Gaming ................................................... 2.2%
Communications Equipment ............................................ 1.6%
Machinery ........................................................... 1.5%
Automotive: Parts and Accessories ................................... 1.5%
Aerospace ........................................................... 1.3%
Consumer Services ................................................... 1.3%
Agriculture ......................................................... 1.2%
Specialty Chemicals ................................................. 1.0%
Retail .............................................................. 0.9%
Aviation: Parts and Services ........................................ 0.8%
Health Care ......................................................... 0.8%
Real Estate ......................................................... 0.6%
Business Services ................................................... 0.5%
Computer Software and Services ...................................... 0.4%
Wireless Communications ............................................. 0.4%
Automotive .......................................................... 0.1%
Manufactured Housing ................................................ 0.1%
Transportation ...................................................... 0.0%
Other Assets and Liabilities (Net) .................................. (0.4)%
-----
100.0%
=====
THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC") FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL
YEAR ON FORM N-Q, THE LAST OF WHICH WAS FILED FOR THE QUARTER ENDED SEPTEMBER
30, 2007. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY
CALLING THE FUND AT 800-GABELLI (800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE
ON THE SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE
SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF
THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12 months
ended June 30th, no later than August 31st of each year. A description of the
Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.
4
THE GABELLI VALUE FUND INC.
SCHEDULE OF INVESTMENTS -- DECEMBER 31, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ----------- ------------- -------------
COMMON STOCKS -- 98.0%
AEROSPACE -- 1.3%
1,000 Lockheed Martin Corp. ............................ $ 25,800 $ 105,260
1,000,000 Rolls-Royce Group plc+ ........................... 7,007,796 10,868,698
40,400,000 Rolls-Royce Group plc, Cl. B ..................... 81,830 88,462
------------- -------------
7,115,426 11,062,420
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AGRICULTURE -- 1.2%
150,000 Archer-Daniels-Midland Co......................... 3,140,470 6,964,500
28,000 The Mosaic Co.+ .................................. 370,018 2,641,520
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3,510,488 9,606,020
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AUTOMOTIVE -- 0.1%
11,000 Navistar International Corp.+ .................... 338,106 596,200
------------- -------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 1.5%
2,000 BERU AG .......................................... 218,785 219,600
38,000 China Yuchai International Ltd.................... 300,576 376,580
140,000 Dana Corp.+ ...................................... 295,461 3,360
250,000 Genuine Parts Co.................................. 6,781,559 11,575,000
20,000 Proliance International Inc.+ .................... 90,875 36,000
------------- -------------
7,687,256 12,210,540
------------- -------------
AVIATION: PARTS AND SERVICES -- 0.8%
43,000 Curtiss-Wright Corp. ............................. 764,822 2,158,600
340,000 GenCorp Inc.+ .................................... 3,135,471 3,964,400
281,800 The Fairchild Corp., Cl. A+ ...................... 1,047,210 732,680
------------- -------------
4,947,503 6,855,680
------------- -------------
BROADCASTING -- 6.4%
1,124,000 CBS Corp., Cl. A ................................. 20,738,821 30,067,000
150,000 Gray Television Inc............................... 1,634,112 1,203,000
187,000 Liberty Media Corp. -
Capital, Cl. A+ ............................... 11,529,300 21,783,630
25,000 Young Broadcasting Inc., Cl. A+ .................. 156,306 26,250
------------- -------------
34,058,539 53,079,880
------------- -------------
BUSINESS SERVICES -- 0.5%
26,000 ChoicePoint Inc.+ ................................ 1,041,447 946,920
123,000 Intermec Inc.+ ................................... 2,775,530 2,498,130
35,700 Nashua Corp.+ .................................... 295,578 414,834
10,000 The Brink's Co. .................................. 583,378 597,400
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4,695,933 4,457,284
------------- -------------
CABLE AND SATELLITE -- 10.0%
130,000 Adelphia Communications
Corp., Cl. A+ (a) ............................. 91,925 0
130,000 Adelphia Communications
Corp., Cl. A, Escrow+ (a) ..................... 0 0
130,000 Adelphia Recovery Trust+ (a) ..................... 0 0
1,735,000 Cablevision Systems Corp.,
Cl. A+ ........................................ 7,066,676 42,507,500
MARKET
SHARES COST VALUE
- ----------- ------------- -------------
38,000 Comcast Corp., Cl. A,
Special+ ...................................... $ 855,690 $ 688,560
150,000 EchoStar Communications
Corp., Cl. A+ ................................. 4,860,611 5,658,000
250,000 Liberty Global Inc., Cl. A+ ...................... 4,300,954 9,797,500
385,000 Rogers Communications Inc.,
Cl. B ......................................... 1,249,265 17,421,250
285,000 The DIRECTV Group Inc.+ .......................... 5,106,399 6,589,200
------------- -------------
23,531,520 82,662,010
------------- -------------
COMMUNICATIONS EQUIPMENT -- 1.6%
70,000 Alcatel-Lucent, ADR .............................. 764,285 512,400
408,000 Corning Inc. ..................................... 3,755,066 9,787,920
30,000 Motorola Inc. .................................... 210,940 481,200
190,000 Nortel Networks Corp.+ ........................... 4,511,914 2,867,100
------------- -------------
9,242,205 13,648,620
------------- -------------
COMPUTER SOFTWARE AND SERVICES -- 0.4%
8,000 Alibaba.com Ltd.+ ................................ 14,075 28,369
60,000 Metavante Technologies Inc.+ ..................... 1,413,592 1,399,200
91,000 Yahoo! Inc.+ ..................................... 2,671,171 2,116,660
------------- -------------
4,098,838 3,544,229
------------- -------------
CONSUMER PRODUCTS -- 4.6%
75,000 Energizer Holdings Inc.+ ......................... 1,759,542 8,409,750
500 Givaudan SA ...................................... 135,440 481,827
125,000 Hartmarx Corp.+ .................................. 564,094 426,250
3,000 National Presto Industries Inc. .................. 89,483 157,980
157,000 Pactiv Corp.+ .................................... 1,509,648 4,180,910
1,000,000 Swedish Match AB ................................. 13,071,817 23,904,567
3,000 Wolverine World Wide Inc. ........................ 29,203 73,560
------------- -------------
17,159,227 37,634,844
------------- -------------
CONSUMER SERVICES -- 1.3%
45,000 IAC/InterActiveCorp+ ............................. 1,322,026 1,211,400
300,000 Liberty Media Corp. -
Interactive, Cl. A+ ........................... 5,516,811 5,724,000
180,000 Rollins Inc. ..................................... 858,555 3,456,000
------------- -------------
7,697,392 10,391,400
------------- -------------
DIVERSIFIED INDUSTRIAL -- 5.2%
47,000 Ampco-Pittsburgh Corp. ........................... 235,016 1,792,110
24,000 Cooper Industries Ltd., Cl. A .................... 803,600 1,269,120
182,000 Crane Co. ........................................ 4,792,658 7,807,800
45,000 Griffon Corp.+ ................................... 874,266 560,250
313,000 Honeywell International Inc. ..................... 9,171,187 19,271,410
121,000 ITT Corp. ........................................ 4,997,798 7,990,840
217,000 Katy Industries Inc.+ ............................ 1,621,018 434,000
1,000 Pentair Inc. ..................................... 31,908 34,810
95,000 Tyco International Ltd. .......................... 4,332,327 3,766,750
------------- -------------
26,859,778 42,927,090
------------- -------------
See accompanying notes to financial statements.
5
THE GABELLI VALUE FUND INC.
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ----------- ------------- -------------
COMMON STOCKS (CONTINUED)
ELECTRONICS -- 2.7%
200,000 LSI Corp.+ ....................................... $ 1,178,577 $ 1,062,000
218,000 Texas Instruments Inc. ........................... 5,498,427 7,281,200
5,000 Thermo Fisher Scientific Inc.+ ................... 115,249 288,400
215,000 Thomas & Betts Corp.+ ............................ 4,057,129 10,543,600
75,000 Tyco Electronics Ltd. ............................ 2,634,751 2,784,750
------------- -------------
13,484,133 21,959,950
------------- -------------
ENERGY AND UTILITIES -- 2.7%
6,000 Allegheny Energy Inc.............................. 74,092 381,660
14,000 Chevron Corp. .................................... 848,670 1,306,620
176,000 ConocoPhillips ................................... 4,857,622 15,540,800
5,420 Mirant Corp.+ .................................... 25,619 211,272
200,000 Mirant Corp., Escrow+ (a) ........................ 0 0
100,000 Northeast Utilities .............................. 1,922,987 3,131,000
10,000 Puget Energy Inc. ................................ 275,000 274,300
40,000 Southwest Gas Corp. .............................. 959,676 1,190,800
------------- -------------
8,963,666 22,036,452
------------- -------------
ENTERTAINMENT -- 13.1%
8,570 Chestnut Hill Ventures+ (a) ...................... 233,241 241,246
376,000 Discovery Holding Co., Cl. A+ .................... 4,606,452 9,452,640
60,000 Dover Motorsports Inc. ........................... 309,314 393,000
1,255,000 Gemstar-TV Guide
International Inc.+ ........................... 6,044,946 5,973,800
315,000 Grupo Televisa SA, ADR ........................... 2,901,682 7,487,550
1,230,000 Time Warner Inc. ................................. 17,440,521 20,307,300
40,000 Triple Crown Media Inc.+ ......................... 395,708 189,200
1,060,000 Viacom Inc., Cl. A+ .............................. 31,010,423 46,618,800
385,000 Vivendi .......................................... 5,120,012 17,663,494
------------- -------------
68,062,299 108,327,030
------------- -------------
ENVIRONMENTAL SERVICES -- 2.8%
358,000 Republic Services Inc. ........................... 4,404,114 11,223,300
378,000 Waste Management Inc. ............................ 8,900,994 12,349,260
------------- -------------
13,305,108 23,572,560
------------- -------------
EQUIPMENT AND SUPPLIES -- 3.7%
210,000 CIRCOR International Inc. ........................ 2,325,092 9,735,600
140,000 Flowserve Corp. .................................. 1,842,358 13,468,000
85,000 Gerber Scientific Inc.+ .......................... 578,987 918,000
100,000 GrafTech International Ltd.+ ..................... 1,250,825 1,775,000
150,000 Watts Water
Technologies Inc., Cl. A ...................... 2,155,289 4,470,000
------------- -------------
8,152,551 30,366,600
------------- -------------
FINANCIAL SERVICES -- 5.6%
519,000 American Express Co. ............................. 16,878,291 26,998,380
45,000 Ameriprise Financial Inc. ........................ 1,144,164 2,479,950
175,000 Citigroup Inc. ................................... 8,381,663 5,152,000
27,000 Deutsche Bank AG ................................. 1,569,799 3,494,070
14,000 H&R Block Inc. ................................... 279,248 259,980
MARKET
SHARES COST VALUE
- ----------- ------------- -------------
20,000 Interactive Brokers
Group Inc., Cl. A+ ............................ $ 528,142 $ 646,400
30,000 Legg Mason Inc.................................... 2,454,647 2,194,500
65,000 SLM Corp. ........................................ 1,694,712 1,309,100
22,000 The Bear Stearns
Companies Inc. ................................ 2,086,949 1,941,500
110,000 The Phoenix Companies Inc......................... 1,214,394 1,305,700
15,000 Wells Fargo & Co. ................................ 466,676 452,850
------------- -------------
36,698,685 46,234,430
------------- -------------
FOOD AND BEVERAGE -- 6.1%
9,000 Cadbury Schweppes plc, ADR ....................... 451,090 444,330
20,000 Constellation Brands Inc.,
Cl. A+ ........................................ 461,080 472,800
15,000 Corn Products
International Inc................................. 184,913 551,250
40,000 Davide Campari-Milano SpA ........................ 406,275 383,058
40,000 Del Monte Foods Co................................ 303,364 378,400
208,000 Diageo plc, ADR .................................. 7,993,283 17,852,640
100,000 Flowers Foods Inc................................. 533,974 2,341,000
231,000 Fomento Economico
Mexicano SAB de CV, ADR ....................... 2,825,162 8,817,270
70,000 General Mills Inc................................. 3,596,140 3,990,000
70,000 H.J. Heinz Co. ................................... 2,240,658 3,267,600
70,000 Kerry Group plc, Cl. A ........................... 797,221 2,245,417
2,000 Meiji Seika Kaisha Ltd. .......................... 10,116 8,504
105,000 PepsiAmericas Inc................................. 1,513,475 3,498,600
12,000 Pernod-Ricard SA ................................. 2,664,369 2,773,806
14,000 Remy Cointreau SA ................................ 897,443 998,260
44,000 The Hershey Co. .................................. 1,844,826 1,733,600
14,000 Wm. Wrigley Jr. Co. .............................. 680,116 819,700
3,750 Wm. Wrigley Jr. Co., Cl. B ....................... 193,262 221,250
------------- -------------
27,596,767 50,797,485
------------- -------------
HEALTH CARE -- 0.8%
105,000 Advanced Medical Optics Inc.+ .................... 3,216,785 2,575,650
4,000 Chemed Corp....................................... 125,792 223,520
12,000 Covidien Ltd.+ ................................... 499,815 531,480
100,000 Pfizer Inc........................................ 2,487,765 2,273,000
15,000 UnitedHealth Group Inc............................ 858,372 873,000
------------- -------------
7,188,529 6,476,650
------------- -------------
HOTELS AND GAMING -- 2.2%
52,900 Dover Downs Gaming &
Entertainment Inc.............................. 328,276 595,125
183,000 Gaylord Entertainment Co.+ ....................... 5,125,485 7,406,010
352,941 Ladbrokes plc .................................... 3,502,005 2,271,044
16,000 Las Vegas Sands Corp.+ ........................... 800,574 1,648,800
75,000 MGM Mirage+ ...................................... 2,350,912 6,301,500
------------- -------------
12,107,252 18,222,479
------------- -------------
See accompanying notes to financial statements.
6
THE GABELLI VALUE FUND INC.
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- ----------- ------------- -------------
COMMON STOCKS (CONTINUED)
MACHINERY -- 1.5%
86,800 CNH Global NV ................................... $ 1,632,870 $ 5,713,176
70,000 Deere & Co. ...................................... 1,458,349 6,518,400
------------- -------------
3,091,219 12,231,576
------------- -------------
MANUFACTURED HOUSING -- 0.1%
55,000 Champion Enterprises Inc.+ ....................... 516,458 518,100
------------- -------------
METALS AND MINING -- 5.5%
478,000 Barrick Gold Corp. ............................... 7,651,550 20,099,900
123,133 Kinross Gold Corp.+ .............................. 1,119,195 2,265,647
470,000 Newmont Mining Corp. ............................. 9,078,857 22,950,100
------------- -------------
17,849,602 45,315,647
------------- -------------
PUBLISHING -- 6.4%
150,000 Belo Corp., Cl. A ................................ 2,592,090 2,616,000
853,500 Media General Inc., Cl. A ........................ 16,779,810 18,136,875
65,000 Meredith Corp. ................................... 1,305,657 3,573,700
715,000 News Corp., Cl. A ................................ 10,118,497 14,650,350
43,000 PRIMEDIA Inc. .................................... 775,854 365,500
300,000 The E.W. Scripps Co., Cl. A ...................... 10,208,574 13,503,000
------------- -------------
41,780,482 52,845,425
------------- -------------
REAL ESTATE -- 0.6%
134,300 Griffin Land & Nurseries Inc. .................... 1,598,131 4,901,950
------------- -------------
RETAIL -- 0.9%
50,000 Ingles Markets Inc., Cl. A ....................... 572,181 1,269,500
130,000 Safeway Inc. ..................................... 2,649,854 4,447,300
30,000 SUPERVALU Inc. ................................... 850,469 1,125,600
10,000 Wal-Mart Stores Inc. ............................. 446,044 475,300
------------- -------------
4,518,548 7,317,700
------------- -------------
SPECIALTY CHEMICALS -- 1.0%
220,000 Ferro Corp. ...................................... 4,605,734 4,560,600
128,000 Hercules Inc. .................................... 1,083,436 2,476,800
8,000 International Flavors &
Fragrances Inc. ............................... 389,771 385,040
4,000 Monsanto Co. ..................................... 170,632 446,760
10,000 Sensient Technologies Corp. ...................... 197,746 282,800
8,065 Tronox Inc., Cl. B ............................... 78,763 69,762
------------- -------------
6,526,082 8,221,762
------------- -------------
TELECOMMUNICATIONS -- 7.0%
645,000 Cincinnati Bell Inc.+ ............................ 2,473,255 3,063,750
22,000 Embarq Corp. ..................................... 579,180 1,089,660
MARKET
SHARES COST VALUE
- ----------- ------------- -------------
150,000 Qwest Communications
International Inc.+ ........................... $ 367,000 $ 1,051,500
1,472,000 Sprint Nextel Corp. .............................. 19,701,341 19,327,360
404,000 Telephone & Data
Systems Inc. .................................. 8,792,582 25,290,400
143,000 Telephone & Data
Systems Inc., Special ......................... 3,191,333 8,236,800
------------- -------------
35,104,691 58,059,470
------------- -------------
TRANSPORTATION -- 0.0%
95,000 Grupo TMM SA, Cl. A, ADR+ ........................ 736,710 213,750
------------- -------------
WIRELESS COMMUNICATIONS -- 0.4%
40,000 United States Cellular Corp.+ .................... 1,880,524 3,364,000
------------- -------------
TOTAL COMMON STOCKS 460,103,648 809,659,233
------------- -------------
WARRANTS -- 0.0%
ENERGY AND UTILITIES-- 0.0%
17,405 Mirant Corp., Ser. A,
expire 01/03/11+ .............................. 35,380 320,600
------------- -------------
PRINCIPAL
AMOUNT
- -----------
U.S. GOVERNMENT OBLIGATIONS -- 2.4%
$19,852,000 U.S. Treasury Bills,
2.453% to 3.186%++,
01/10/08 to 06/05/08 .......................... 19,679,497 19,673,470
------------- -------------
TOTAL INVESTMENTS -- 100.4% ...................... $ 479,818,525 829,653,303
=============
OTHER ASSETS AND LIABILITIES (NET) -- (0.4)% ..... (3,613,903)
-------------
NET ASSETS -- 100.0% ............................. $ 826,039,400
=============
- ----------
(a) Security fair valued under procedures established by the Board of
Directors. The procedures may include reviewing available financial
information about the company and reviewing valuation of comparable
securities and other factors on a regular basis. At December 31, 2007, the
market value of fair valued securities amounted to $241,246 or 0.03% 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.
7
THE GABELLI VALUE FUND INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2007
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost $479,818,525) ............... $ 829,653,303
Foreign currency, at value (cost $1) .................... 1
Cash .................................................... 1,256
Receivable for investments sold ......................... 978,103
Receivable for Fund shares sold ......................... 509,452
Dividends and interest receivable ....................... 620,995
Prepaid expense ......................................... 54,128
--------------
TOTAL ASSETS ............................................ 831,817,238
--------------
LIABILITIES:
Payable for investments purchased ....................... 3,101,788
Payable for Fund shares redeemed ........................ 1,348,758
Payable for investment advisory fees .................... 713,222
Payable for distribution fees ........................... 194,889
Payable for accounting fees ............................. 11,252
Other accrued expenses .................................. 407,929
--------------
TOTAL LIABILITIES ....................................... 5,777,838
--------------
NET ASSETS applicable to 49,347,815
shares outstanding ................................... $ 826,039,400
==============
NET ASSETS CONSIST OF:
Paid-in capital, each class at $0.001 par value ......... $ 482,997,132
Accumulated distributions in excess of net
realized gain on investments and foreign
currency transactions ................................ (6,792,894)
Net unrealized appreciation on investments .............. 349,834,778
Net unrealized appreciation on foreign
currency translations ................................ 384
--------------
NET ASSETS .............................................. $ 826,039,400
==============
SHARES OF CAPITAL STOCK:
CLASS A:
Net Asset Value and redemption price per share
($800,586,328 / 47,702,435 shares outstanding;
100,000,000 shares authorized) ....................... $ 16.78
==============
Maximum offering price per share (NAV /9425,
based on maximum sales charge of 5.75%
of the offering price) ............................... $ 17.80
==============
CLASS B:
Net Asset Value and offering price per share
($10,773,907 / 696,924 shares outstanding;
100,000,000 shares authorized) ....................... $ 15.46(a)
==============
CLASS C:
Net Asset Value and offering price per share
($14,679,165 / 948,456 shares outstanding;
50,000,000 shares authorized) ........................ $ 15.48(a)
==============
- ----------
(a) Redemption price varies based on the length of time held.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2007
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends (net of foreign taxes of $216,490) ............ $ 10,107,154
Interest ................................................ 496,797
--------------
TOTAL INVESTMENT INCOME ................................. 10,603,951
--------------
EXPENSES:
Investment advisory fees ................................ 8,898,584
Distribution fees - Class A ............................. 2,154,025
Distribution fees - Class B ............................. 124,536
Distribution fees - Class C ............................. 157,948
Shareholder services fees ............................... 580,342
Shareholder communications expenses ..................... 216,572
Custodian fees .......................................... 126,413
Legal and audit fees .................................... 88,615
Directors' fees ......................................... 69,417
Accounting fees ......................................... 45,000
Interest expense ........................................ 17,058
Registration expenses ................................... 17,114
Miscellaneous expenses .................................. 76,657
--------------
TOTAL EXPENSES .......................................... 12,572,281
Less: Custodian fee credits ............................. (6,408)
--------------
NET EXPENSES ............................................ 12,565,873
--------------
NET INVESTMENT LOSS ..................................... (1,961,922)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on investments ........................ 75,550,452
Net realized gain on foreign
currency transactions ................................ 601
--------------
Net realized gain on investments and
foreign currency transactions ........................ 75,551,053
--------------
Net change in unrealized appreciation/
depreciation on investments .......................... (31,123,235)
Net change in unrealized appreciation/
depreciation on foreign currency translations ........ 162
--------------
Net change in unrealized appreciation/
depreciation on investments and
foreign currency translations ........................ (31,123,073)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY ..................... 44,427,980
--------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ...................................... $ 42,466,058
==============
See accompanying notes to financial statements.
8
THE GABELLI VALUE FUND INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- -----------------
OPERATIONS:
Net investment income (loss) ........................................................... $ (1,961,922) $ 1,165,445
Net realized gain on investments and foreign currency transactions ..................... 75,551,053 180,292,600
Net change in unrealized appreciation/depreciation on investments and foreign
currency translations ............................................................... (31,123,073) 4,923,797
------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................... 42,466,058 186,381,842
------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A ............................................................................. -- (1,177,420)
Class B ............................................................................. -- (6)
------------- --------------
-- (1,177,426)
------------- --------------
Net realized gains on investments and foreign currency transactions
Class A ............................................................................. (72,089,295) (175,292,657)
Class B ............................................................................. (1,048,345) (2,830,343)
Class C ............................................................................. (1,434,056) (3,171,930)
------------- --------------
(74,571,696) (181,294,930)
------------- --------------
Return of capital
Class A ............................................................................. (50,036) --
Class B ............................................................................. (728) --
Class C ............................................................................. (995) --
------------- --------------
(51,759) --
------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS .................................................... (74,623,455) (182,472,356)
------------- --------------
CAPITAL SHARE TRANSACTIONS:
Class A ............................................................................. (29,345,720) (206,787,976)
Class B ............................................................................. (1,778,459) (4,770,251)
Class C ............................................................................. 779,864 1,241,683
------------- --------------
NET DECREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ............................. (30,344,315) (210,316,544)
------------- --------------
REDEMPTION FEES ........................................................................ 2,293 1,667
------------- --------------
NET DECREASE IN NET ASSETS ............................................................. (62,499,419) (206,405,391)
NET ASSETS:
Beginning of period .................................................................... 888,538,819 1,094,944,210
------------- --------------
End of period (including undistributed net investment income of $0 and $461,
respectively) ....................................................................... $ 826,039,400 $ 888,538,819
============= ==============
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION. The Gabelli Value Fund Inc. (the "Fund") was organized on July
20, 1989 as a Maryland corporation. The Fund is a non-diversified open-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund's primary objective is long-term
capital appreciation. The Fund commenced investment operations on September 29,
1989.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with United States ("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
9
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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 Directors (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 Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on a foreign market are generally valued
at the preceding closing values of such securities on the relevant market, but
may be fair valued pursuant to procedures established by the Board if market
conditions change significantly after the close of the foreign market but prior
to the close of business on the day the securities are being valued. Debt
instruments with remaining maturities of 60 days or less that are not credit
impaired are valued at amortized cost, unless the Board determines such amount
does not reflect the securities' fair value, in which case these securities will
be fair valued 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 average of the latest 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 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
fair valued as determined by 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.
In September 2006, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. At this time,
management is in the process of reviewing the requirements of SFAS 157 against
its current valuation policies to determine future applicability.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
The Fund 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 the Fund in each agreement. The Fund will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the
10
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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 Fund
may be delayed or limited. At December 31, 2007, there were no open repurchase
agreements.
FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose of
hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin." Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuations in the
value of the contract, which are included in unrealized
appreciation/depreciation on investments and futures contracts. The Fund
recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as a
hedging instrument. The change in value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in value of the hedged investments. In addition, there
is the risk that the Fund may not be able to enter into a closing transaction
because of an illiquid secondary market. At December 31, 2007, there were no
open futures contracts.
SECURITIES SOLD SHORT. The Fund may enter into short sale transactions. Short
selling involves selling securities that may or may not be owned and, at times,
borrowing the same securities for delivery to the purchaser, with an obligation
to replace such borrowed securities at a later date. The proceeds received from
short sales are recorded as liabilities and the Fund records an unrealized gain
or loss to the extent of the difference between the proceeds received and the
value of an open short position on the day of determination. The Fund records a
realized gain or loss when the short position is closed out. By entering into a
short sale, the Fund bears the market risk of an unfavorable change in the price
of the security sold short. Dividends on short sales are recorded as an expense
by the Fund on the ex-dividend date and interest expense is recorded on the
accrual basis. The Fund did not hold any short positions as of December 31,
2007.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are maintained
in U.S. dollars. Foreign currencies, investments, and other assets and
liabilities are translated into U.S. dollars at the current exchange rates.
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 that 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
translations. 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 Fund and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial purchase trade date and subsequent sale trade
date is included in realized gain/(loss) on investments.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover,
11
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
securities of many foreign issuers and their markets may be less liquid and
their prices more volatile than those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Fund will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on 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 on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Fund is informed of the dividend.
DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Certain
administrative expenses are common to, and allocated among, various affiliated
funds. Such allocations are made on the basis of each Fund's average net assets
or other criteria directly affecting the expenses as determined by the Adviser
pursuant to procedures established by the Board.
In calculating the NAV per share of each class, investment income, realized and
unrealized gains and losses, redemption fees, and expenses other than class
specific expenses are allocated daily to each class of shares based upon the
proportion of net assets of each class at the beginning of each day.
Distribution expenses are borne solely by the class incurring the expense.
CUSTODIAN FEE CREDITS AND INTEREST EXPENSE. When cash balances are maintained in
the custody account, the Fund receives credits which are used to offset
custodian fees. The gross expenses paid under the custody arrangement are
included in custodian fees in the Statement of Operations with the corresponding
expense offset, if any, shown as "custodian fee credits." When cash balances are
overdrawn, the Fund is charged an overdraft fee equal to 2.00% above the federal
funds rate on outstanding balances. This amount, if any, would be shown as
"interest expense" in the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders are recorded on the
ex-dividend date. Distributions to shareholders are based on income and capital
gains as determined in accordance with federal income tax regulations, which may
differ from income and capital gains as determined under U.S. generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities and foreign
currency transactions held by the Fund, timing differences, and differing
characterizations of distributions made by the Fund. Distributions from net
investment income include net realized gains on foreign currency transactions.
These book/tax differences are either temporary or permanent in nature. To the
extent these differences are permanent, adjustments are made to the appropriate
capital accounts in the period when the differences arise. Permanent differences
for the fiscal year ended December 31, 2007, were primarily attributable to
reclassification of short-term capital gains to ordinary income and unutilized
net operating losses. These reclassifications have no impact on the net asset
value of the Fund. For the fiscal year ended December 31, 2007,
reclassifications were made to decrease accumulated net investment loss by
$1,961,461 and to increase accumulated distributions in excess of net realized
gain on investments and foreign currency transactions by $1,163,779, with an
offsetting adjustment to paid-in capital.
12
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
The tax character of distributions paid during the fiscal years ended December
31, 2007 and December 31, 2006 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- -----------------
DISTRIBUTIONS PAID FROM:
Ordinary income (inclusive of
short-term capital gains) ........... -- $ 1,874,083
Net long-term capital gains ............ $ 74,571,696 180,598,273
Return of capital ...................... 51,759 --
------------ -------------
Total distributions paid ............... $ 74,623,455 $ 182,472,356
============ =============
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund 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.
At December 31, 2007, the difference between book basis and tax basis unrealized
appreciation was primarily due to deferral of losses on wash sales for tax
purposes.
As of December 31, 2007, the components of accumulated earnings/(losses) on tax
basis were as follows:
Net unrealized appreciation on investments and
foreign currency ................................ $ 343,042,268
-------------
Total .............................................. $ 343,042,268
=============
The following summarizes the tax cost of investments and the related unrealized
appreciation/(depreciation) at December 31, 2007:
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
------------- ------------- -------------- --------------
Investments ...... $ 486,611,419 $ 364,519,879 $ (21,477,995) $ 343,041,884
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109" ("the Interpretation") established a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether the Fund is taxable in
a particular jurisdiction) and required certain expanded tax disclosures. The
Fund has adopted the Interpretation for all open tax years and it had no impact
on the amounts reported in the financial statements.
3. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS. The Fund has entered
into an investment advisory agreement (the "Advisory Agreement") with the
Adviser which provides that the Fund will pay the Adviser a fee, computed daily
and paid monthly, at the annual rate of 1.00% of the value of its average daily
net assets. In accordance with the Advisory Agreement, the Adviser provides a
continuous investment program for the Fund's portfolio, oversees the
administration of all aspects of the Fund's business and affairs, and pays the
compensation of all Officers and Directors of the Fund who are affiliated
persons of the Adviser.
The Fund pays each Director who is not considered to be an affiliated person an
annual retainer of $10,000 plus $1,000 for each Board meeting attended and they
are reimbursed for any out of pocket expenses incurred
13
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
in attending meetings. All Board committee members receive $1,000 per meeting
attended and the chairman of each committee also receives $2,500 per year.
Directors who are directors or employees of the Adviser or an affiliated company
receive no compensation or expense reimbursement from the Fund.
4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the
"Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act.
Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of the Adviser,
serves as distributor of the Fund. Under the Class A, Class B, and Class C Share
Plans, payments are authorized to Gabelli & Company at annual rates of 0.25%,
1.00%, and 1.00%, respectively, of the average daily net assets of those
classes, the annual limitations under each Plan. Such payments are accrued daily
and paid monthly.
5. PORTFOLIO SECURITIES. Purchases and proceeds from the sale of securities for
the fiscal year ended December 31, 2007, other than short-term securities and
U.S. Government obligations, aggregated $81,255,977 and $163,736,552,
respectively.
6. TRANSACTIONS WITH AFFILIATES. During the fiscal year ended December 31, 2007,
the Fund paid brokerage commissions on security trades of $202,273 to Gabelli &
Company. Additionally, Gabelli & Company informed the Fund that it received
$112,920 from investors representing commissions (sales charges and underwriting
fees) on sales and redemptions of Fund shares.
The cost of calculating the Fund's NAV per share is a Fund expense pursuant to
the Advisory Agreement between the Fund and the Adviser. During the fiscal year
ended December 31, 2007, the Fund paid or accrued $45,000 to the Adviser in
connection with the cost of computing the Fund's NAV.
7. CAPITAL STOCK TRANSACTIONS. The Fund offers four classes of shares - Class A
Shares, Class B Shares, Class C Shares, and Class I Shares. Class I Shares are
offered to foundations, endowments, institutions, and employee benefit plans.
Class A Shares are subject to a maximum front-end sales charge of 5.75%. For the
period from January 1, through April 30, 2007, the maximum front-end load on
Class A Shares was 5.50%. Class B Shares are subject to a contingent deferred
sales charge ("CDSC") upon redemption within six years of purchase and
automatically convert to Class A Shares approximately eight years after the
original purchase. The applicable CDSC is equal to a declining percentage of the
lesser of the NAV per share at the date of the original purchase or at the date
of redemption, based on the length of time held. Class C Shares are subject to a
1.00% CDSC for one year after purchase. Class B Shares are available only
through exchange of Class B Shares of other funds distributed by Gabelli &
Company. Class I Shares were first issued on January 11, 2008.
The Fund imposes a redemption fee of 2.00% on Class A Shares, Class B Shares,
Class C Shares, and Class I Shares that are redeemed or exchanged on or before
the seventh day after the date of a purchase. The redemption fee is deducted
from the proceeds otherwise payable to the redeeming shareholders and is
retained by the Fund. The redemption fees retained by the Fund during the fiscal
year ended December 31, 2007 and the fiscal year ended December 31, 2006
amounted to $2,293 and $1,667, respectively.
The redemption fee does not apply to redemptions of shares where (i) the shares
were purchased through automatic reinvestment of dividends or other
distributions, (ii) the redemption was initiated by the Fund, (iii) the shares
were purchased through programs that collect the redemption fee at the program
level and remit them to the Fund, or (iv) the shares were purchased through
programs that the Adviser determines to have appropriate anti-short-term trading
policies in place or as to which the Adviser has received assurances that
look-through redemption fee procedures or effective anti-short-term trading
policies and procedures are in place.
14
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Transactions in shares of capital stock were as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31,2007 DECEMBER 31, 2006
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
---------- -------------- ----------- --------------
CLASS A CLASS A
---------------------------- ----------------------------
Shares sold .......................................... 1,478,576 $ 27,445,819 2,603,599 $ 50,582,707
Shares issued upon reinvestment of distributions ..... 4,003,660 67,344,910 9,303,834 164,770,939
Shares redeemed ...................................... (6,674,075) (124,136,449) (21,715,392) (422,141,622)
---------- -------------- ----------- --------------
Net decrease ...................................... (1,191,839) $ (29,345,720) (9,807,959) $ (206,787,976)
========== ============== =========== ==============
CLASS B CLASS B
---------------------------- ----------------------------
Shares sold .......................................... 4,521 $ 74,391 7,500 $ 131,453
Shares issued upon reinvestment of distributions ..... 61,782 957,619 148,543 2,459,882
Shares redeemed ...................................... (161,790) (2,810,469) (394,141) (7,361,586)
---------- -------------- ----------- --------------
Net decrease ...................................... (95,487) $ (1,778,459) (238,098) $ (4,770,251)
========== ============== =========== ==============
CLASS C CLASS C
---------------------------- ----------------------------
Shares sold .......................................... 191,138 $ 3,300,404 140,139 $ 2,542,951
Shares issued upon reinvestment of distributions ..... 62,213 964,928 128,599 2,130,888
Shares redeemed ...................................... (197,724) (3,485,468) (185,965) (3,432,156)
---------- -------------- ----------- --------------
Net increase ...................................... 55,627 $ 779,864 82,773 $ 1,241,683
========== ============== =========== ==============
8. INDEMNIFICATIONS. The Fund enters into contracts 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 and expects the risk of loss to be remote.
9. OTHER MATTERS. The Adviser and/or affiliates received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund share trading practices involving certain funds managed by the
Adviser. GAMCO Investors, Inc. ("GAMCO"), the Adviser's parent company,
responded to these requests for documents and testimony. In June 2006, GAMCO
began discussions with the SEC regarding a possible resolution of their inquiry.
In February 2007, the Adviser made an offer of settlement to the staff of the
SEC for communication to the Commission for its consideration to resolve this
matter. This offer of settlement is subject to agreement regarding the specific
language of the SEC's administrative order and other settlement documents. On a
separate matter, in September 2005, the Adviser was informed by the staff of the
SEC that the staff may recommend to the Commission that an administrative remedy
and a monetary penalty be sought from the Adviser in connection with the actions
of two of nine closed-end funds managed by the Adviser relating to Section 19(a)
and Rule 19a-1 of the 1940 Act. These provisions require registered investment
companies to provide written statements to shareholders when a dividend is made
from a source other than net investment income. While the two closed-end funds
sent annual statements and provided other materials containing this information,
the funds did not send written statements to shareholders with each distribution
in 2002 and 2003. The Adviser believes that all of the funds are now in
compliance. The Adviser believes that these matters would have no effect on the
Fund or any material adverse effect on the Adviser or its ability to manage the
Fund.
15
THE GABELLI VALUE FUND INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period:
INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS
---------------------------------------- ----------------------------------------------------
Net
Net Asset Net Realized and Total Net
Period Value, Investment Unrealized from Net Realized Return
Ended Beginning Income/ Gain/(Loss) on Investment Investment Gain on of Total
December 31 of Period (Loss)(a) Investments Operations Income Investments Capital Distributions
- ----------- --------- ---------- -------------- ---------- ---------- ----------- --------- -------------
CLASS A
2007 $ 17.61 $ (0.04) $ 0.86 $ 0.82 -- $ (1.65) $ 0.00(c) $ (1.65)
2006 18.11 0.03 3.92 3.95 $ (0.03) (4.42) -- (4.45)
2005 19.49 0.02 (0.05) (0.03) (0.01) (1.34) -- (1.35)
2004 17.97 (0.02) 2.31 2.29 -- (0.77) -- (0.77)
2003 13.81 (0.05) 4.45 4.40 -- (0.24) -- (0.24)
CLASS B
2007 $ 16.46 $ (0.17) $ 0.82 $ 0.65 -- $ (1.65) $ 0.00(c) $ (1.65)
2006 17.28 (0.10) 3.70 3.60 -- (4.42) -- (4.42)
2005 18.79 (0.12) (0.05) (0.17) -- (1.34) -- (1.34)
2004 17.47 (0.15) 2.24 2.09 -- (0.77) -- (0.77)
2003 13.53 (0.17) 4.35 4.18 -- (0.24) -- (0.24)
CLASS C
2007 $ 16.47 $ (0.17) $ 0.83 $ 0.66 -- $ (1.65) $ 0.00(c) $ (1.65)
2006 17.29 (0.11) 3.71 3.60 -- (4.42) -- (4.42)
2005 18.80 (0.12) (0.05) (0.17) -- (1.34) -- (1.34)
2004 17.49 (0.15) 2.23 2.08 -- (0.77) -- (0.77)
2003 13.54 (0.17) 4.36 4.19 -- (0.24) -- (0.24)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
---------------------------------------------------
Net Asset Net Assets Net
Period Value, End of Investment Portfolio
Ended Redemption End of Total Period Income/ Operating Turnover
December 31 Fees(a) Period Return+ (in 000's) (Loss) Expenses (b) Rate
- ----------- ---------- --------- ------- ----------- ---------- ------------ ---------
CLASS A
2007 $ 0.00(c) $ 16.78 4.6% $ 800,586 (0.20)% 1.39% 9%
2006 0.00(c) 17.61 21.7 860,789 0.14 1.41(d) 17
2005 0.00(c) 18.11 (0.2) 1,063,137 0.08 1.40 3
2004 0.00(c) 19.49 12.8 1,261,293 (0.11) 1.39 12
2003 -- 17.97 31.9 1,255,668 (0.35) 1.44(e) 8
CLASS B
2007 $ 0.00(c) $ 15.46 3.9% $ 10,774 (0.95)% 2.14% 9%
2006 0.00(c) 16.46 20.8 13,046 (0.53) 2.16(d) 17
2005 0.00(c) 17.28 (0.9) 17,804 (0.67) 2.15 3
2004 0.00(c) 18.79 12.0 20,366 (0.86) 2.14 12
2003 -- 17.47 30.9 18,059 (1.10) 2.19(e) 8
CLASS C
2007 $ 0.00(c) $ 15.48 4.0% $ 14,679 (0.94)% 2.14% 9%
2006 0.00(c) 16.47 20.7 14,704 (0.58) 2.16(d) 17
2005 0.00(c) 17.29 (0.9) 14,003 (0.67) 2.15 3
2004 0.00(c) 18.80 11.9 16,400 (0.85) 2.14 12
2003 -- 17.49 30.9 14,973 (1.10) 2.19(e) 8
- ----------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the
period including reinvestment of distributions and does not reflect
applicable sales charges.
(a) Per share amounts have been calculated using the average shares
outstanding method.
(b) The ratios do not include a reduction of expenses for custodian fee
credits on cash balances maintained with the custodian. For the fiscal
years ended December 31, 2003, 2006, and 2007, the effect of the custodian
fee credits were minimal. For the fiscal years ended December 31, 2004 and
2005, there were no custodian fee credits.
(c) Amount represents less than $0.005 per share.
(d) The Fund incurred interest expense during the fiscal year ended December
31, 2006. If interest expense had not been incurred, the ratios of
operating expenses to average net assets would have been 1.40% (Class A),
2.15% (Class B), and 2.15% (Class C), respectively. For the fiscal year
ended December 31, 2007, the effect of the interest expense was minimal.
(e) The Fund incurred dividend expense on securities sold short for the year
ended December 31, 2003. If dividend expense had not been incurred, the
ratios of operating expenses to average net assets would have been 1.43%
(Class A), 2.18% (Class B), and 2.18% (Class C), respectively.
See accompanying notes to financial statements.
16
THE GABELLI VALUE FUND INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
The Gabelli Value Fund Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Gabelli Value Fund Inc.
(hereafter referred to as the "Fund") at December 31, 2007, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 2007 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 29, 2008
17
THE GABELLI VALUE FUND INC.
ADDITIONAL FUND INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Directors. Information pertaining to the Directors and officers
of the Fund is set forth below. The Fund's Statement of Additional Information
includes additional information about the Fund's Directors and is available,
without charge, upon request, by calling 800-GABELLI (800-422-3554) or by
writing to The Gabelli Value Fund Inc. at One Corporate Center, Rye, NY
10580-1422.
TERM OF NUMBER OF
NAME, POSITION(S) OFFICE AND FUNDS IN FUND
ADDRESS(1) LENGTH OF COMPLEX OVERSEEN PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE TIME SERVED(2) BY DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR(4)
- -------------------------- -------------- ---------------- --------------------------------------- -------------------------
INTERESTED DIRECTORS(3):
MARIO J. GABELLI Since 1989 26 Chairman and Chief Executive Officer of Director of Morgan Group
Director and GAMCO Investors, Inc. and Chief Holdings, Inc. (holding
Chief Investment Officer Investment Officer - Value Portfolios company); Chairman of the
Age: 65 of Gabelli Funds, LLC and GAMCO Asset Board of LICT Corp.
Management Inc.; Director/Trustee or (multimedia and
Chief Investment Officer of other communication services
registered investment companies in the company)
Gabelli/GAMCO Funds complex; Chairman
and Chief Executive Officer of GGCP,
Inc.
INDEPENDENT DIRECTORS(5):
ANTHONY J. COLAVITA Since 1989 35 Partner in the law firm of --
Director Anthony J. Colavita, P.C.
Age: 72
ROBERT J. MORRISSEY Since 1989 6 Partner in the law firm of Morrissey, --
Director Hawkins & Lynch
Age: 68
ANTHONY R. PUSTORINO Since 1989 14 Certified Public Accountant; Professor Director of The LGL
Director Emeritus, Pace University Group, Inc. (diversified
Age: 82 manufacturing)
WERNER J. ROEDER, MD Since 2001 23 Medical Director of Lawrence Hospital --
Director and practicing private physician
Age: 67
- --------------------------------------------------------------------------------
2007 TAX NOTICE TO SHAREHOLDERS (Unaudited)
For the fiscal year ended December 31, 2007, the Fund paid to shareholders, on
December 27, 2007, a long-term capital gain distribution totaling $74,571,696
which is designated as a capital gain dividend.
- --------------------------------------------------------------------------------
18
THE GABELLI VALUE FUND INC.
ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED)
- --------------------------------------------------------------------------------
TERM OF
NAME, POSITION(S) OFFICE AND
ADDRESS(1) LENGTH OF PRINCIPAL OCCUPATION(S)
AND AGE TIME SERVED(2) DURING PAST FIVE YEARS
- -------------------------- -------------- -----------------------
OFFICERS:
BRUCE N. ALPERT Since 2003 Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC
President since 1988 and an officer of most of the registered investment companies in
Age: 56 the Gabelli/GAMCO Funds complex. Director and President of Gabelli Advisers,
Inc. since 1998
JAMES E. MCKEE Since 1995 Vice President, General Counsel, and Secretary of GAMCO Investors, Inc. since
Secretary 1999 and GAMCO Asset Management Inc. since 1993; Secretary of all of the
Age: 44 registered investment companies in the Gabelli/GAMCO Funds complex
AGNES MULLADY Since 2006 Vice President of Gabelli Funds, LLC since 2007; Officer of all of the
Treasurer registered investment companies in the Gabelli/GAMCO Funds complex; Senior
Age: 49 Vice President of U.S. Trust Company, N.A. and Treasurer and Chief Financial
Officer of Excelsior Funds from 2004 through 2005; Chief Financial Officer of
AMIC Distribution Partners from 2002 through 2004; Controller of Reserve
Management Corporation and Reserve Partners, Inc. and Treasurer of Reserve
Funds from 2000 through 2002
PETER D. GOLDSTEIN Since 2004 Director of Regulatory Affairs at GAMCO Investors, Inc. since 2004; Chief
Chief Compliance Officer Compliance Officer of all of the registered investment companies in the
Age: 54 Gabelli/GAMCO Funds complex; Vice President of Goldman Sachs Asset Management
from 2000 through 2004
- ----------
(1) Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
(2) Each Director will hold office for an indefinite term until the earliest
of (i) the next meeting of shareholders, if any, called for the purpose of
considering the election or re-election of such Director and until the
election and qualification of his or her successor, if any, elected at
such meeting, or (ii) the date a Director resigns or retires, or a
Director is removed by the Board of Directors or shareholders, in
accordance with the Fund's By-Laws and Articles of Incorporation. Each
officer will hold office for an indefinite term until the date he or she
resigns or retires or until his or her successor is elected and qualified.
(3) "Interested person" of the Fund as defined in the 1940 Act. Mr. Gabelli is
considered an "interested person" because of his affiliation with Gabelli
Funds, LLC which acts as the Fund's investment adviser.
(4) This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934, as amended (i.e. public
companies) or other investment companies registered under the 1940 Act.
(5) Directors who are not interested persons are considered "Independent"
Directors.
19
THE GABELLI VALUE FUND INC.
One Corporate Center
Rye, New York 10580-1422
800-GABELLI
800-422-3554
FAX: 914-921-5118
WEBSITE: WWW.GABELLI.COM
E-MAIL: INFO@GABELLI.COM
Net Asset Value per share available daily by calling
800-GABELLI after 6:00 P.M.
BOARD OF DIRECTORS
Mario J. Gabelli, CFA Anthony R. Pustorino
CHAIRMAN AND CHIEF CERTIFIED PUBLIC ACCOUNTANT,
EXECUTIVE OFFICER PROFESSOR EMERITUS
GAMCO INVESTORS, INC. PACE UNIVERSITY
Anthony J. Colavita Werner J. Roeder, MD
ATTORNEY-AT-LAW MEDICAL DIRECTOR
ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL
Robert J. Morrissey
ATTORNEY-AT-LAW
MORRISSEY, HAWKINS & LYNCH
OFFICERS
Bruce N. Alpert James E. McKee
PRESIDENT SECRETARY
Agnes Mullady Peter D. Goldstein
TREASURER CHIEF COMPLIANCE OFFICER
CUSTODIAN
Mellon Trust of New England, N.A.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company
LEGAL COUNSEL
Willkie Farr & Gallagher LLP
DISTRIBUTOR
Gabelli & Company, Inc.
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Gabelli Value Fund Inc. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
GAB409Q407SR
[GRAPHIC OMITTED] E P
Gabelli Triangle P M
MANAGEMENT S V
CASH FLOW
RESEARCH
THE
GABELLI
VALUE
FUND
INC.
ANNUAL REPORT
DECEMBER 31, 2007
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, and that relates to any element of
the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, that relates to one or more of the
items set forth in paragraph (b) of this item's instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's Board of
Directors has determined that Anthony R. Pustorino is qualified to serve as an
audit committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$48,200 for 2006 and $50,600 for 2007.
AUDIT-RELATED FEES
(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $0 for 2006 and $0 for 2007.
TAX FEES
(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $3,100 for 2006 and $4,350
for 2007. Tax fees represent tax compliance services provided in
connection with the review of the Registrant's tax returns.
ALL OTHER FEES
(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are $0
for 2006 and $0 for 2007.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
Pre-Approval Policies and Procedures. The Audit Committee ("Committee")
of the registrant is responsible for pre-approving (i) all audit and
permissible non-audit services to be provided by the independent
registered public accounting firm to the registrant and (ii) all
permissible non-audit services to be provided by the independent
registered public accounting firm to the Adviser, Gabelli Funds, LLC,
and any affiliate of Gabelli Funds, LLC ("Gabelli") that provides
services to the registrant (a "Covered Services Provider") if the
independent registered public accounting firm's engagement related
directly to the operations and financial reporting of the registrant.
The Committee may delegate its responsibility to pre-approve any such
audit and permissible non-audit services to the Chairperson of the
Committee, and the Chairperson must report to the Committee, at its
next regularly scheduled meeting after the Chairperson's pre-approval
of such services, his or her decision(s). The Committee may also
establish detailed pre-approval policies and procedures for
pre-approval of such services in accordance with applicable laws,
including the delegation of some or all of the Committee's pre-approval
responsibilities to the other persons (other than Gabelli or the
registrant's officers). Pre-approval by the Committee of any
permissible non-audit services is not required so long as: (i) the
permissible non-audit services were not recognized by the registrant at
the time of the engagement to be non-audit services; and (ii) such
services are promptly brought to the attention of the Committee and
approved by the Committee or Chairperson prior to the completion of the
audit.
(e)(2) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) Not applicable
(c) 100%
(d) Not applicable
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was (0%) zero percent.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services
to the registrant for each of the last two fiscal years of the
registrant was $0 for 2006 and $0 for 2007.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
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.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. 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 Directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. 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 second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(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(b) 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 Value Fund Inc.
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By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date 03/05/08
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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
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Bruce N. Alpert, Principal Executive Officer
Date 03/05/08
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By (Signature and Title)* /s/ Agnes Mullady
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Agnes Mullady,
Principal Financial Officer and Treasurer
Date 03/05/08
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* Print the name and title of each signing officer under his or her signature.