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 811-06180
Name of Fund: BlackRock Utilities and Telecommunications Fund, Inc.
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive Officer,
BlackRock Utilities and Telecommunications Fund, Inc., 800 Scudders Mill
Road, Plainsboro, NJ 08536. Mailing address: P.O. Box 9011, Princeton,
NJ 08543-9011
Registrant's telephone number, including area code: (800) 441-7762
Date of fiscal year end: 11/30/2007
Date of reporting period: 12/01/2006 - 11/30/2007
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE
LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS
BlackRock Utilities and BLACKROCK
Telecommunications Fund, Inc.
ANNUAL REPORT | NOVEMBER 30, 2007
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
Table of Contents
================================================================================
Page
- --------------------------------------------------------------------------------
A Letter to Shareholders ................................................. 3
Annual Report:
Fund Summary ............................................................. 4
About Fund Performance ................................................... 6
Disclosure of Expenses ................................................... 6
Portfolio Information .................................................... 7
Financial Statements:
Schedule of Investments .............................................. 8
Statement of Assets and Liabilities .................................. 11
Statement of Operations .............................................. 12
Statements of Changes in Net Assets .................................. 13
Financial Highlights ..................................................... 14
Notes to Financial Statements ............................................ 17
Report of Independent Registered Public Accounting Firm .................. 22
Proxy Results ............................................................ 23
Important Tax Information ................................................ 23
Officers and Directors ................................................... 24
BlackRock Fund Information ............................................... 28
Mutual Fund Family ....................................................... 30
2 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
A Letter to Shareholders
Dear Shareholder
The November reporting period was fairly tumultuous for financial markets,
culminating in mixed results for some of the major benchmark indexes:
Total Returns as of November 30, 2007 6-month 12-month
================================================================================================================
U.S. equities (S&P 500 Index) ........................................................ -2.33% + 7.72%
- ----------------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) ......................................... -8.82 - 1.17
- ----------------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) .................... +2.82 +17.30
- ----------------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) ............................. +5.32 + 6.05
- ----------------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) ....................... +2.40 + 2.71
- ----------------------------------------------------------------------------------------------------------------
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) ..... -2.84 + 3.01
- ----------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future results. Index performance shown for
illustrative purposes only. You cannot invest directly in an index.
Subprime mortgage woes dominated headlines for much of 2007, but intensified in
the summer and fall, spawning a widespread liquidity and credit crisis with
ramifications across global markets. The Federal Reserve Board (the "Fed")
stepped in to inject liquidity into the markets and bolster investor confidence,
cutting the federal funds rate by 0.50% in September, 0.25% in October and 0.25%
in December, which brought the target short-term interest rate to 4.25%. In
taking action, the central bankers, who had long deemed themselves inflation
fighters, were seeking to stem the fallout from the credit crunch and forestall
a wider economic unraveling.
Amid the volatility throughout 2007, equity markets displayed surprising
resilience. To some extent, the credit turmoil dampened corporate
merger-and-acquisition (M&A) activity, a key source of strength for equity
markets. Still, market fundamentals generally held firm, dividend payouts and
share buybacks continued, and valuations remained attractive. As the returns
indicate, the most recent six months were more trying, reflecting the slowing
U.S. economy, a troubled housing market and a more difficult corporate earnings
backdrop. Overall, large cap stocks outperformed small caps as investors grew
increasingly risk averse. International markets fared better than their U.S.
counterparts, benefiting from generally stronger economies.
In fixed income markets, mixed economic signals and the credit woes resulted in
a flight to quality. Investors shunned bonds associated with the housing and
credit markets in favor of higher-quality Treasury issues. The yield on 10-year
Treasury issues, which touched 5.30% in June (its highest level in five years),
fell to 3.97% by period-end, while prices correspondingly rose. Meanwhile, the
tax-exempt bond market has been challenged by a combination of record-setting
supply, economic uncertainty and concerns around the credit worthiness of bond
insurers. This brought municipal bond prices to relatively attractive levels
and, as such, demand generally held firm.
As you navigate market volatility, we encourage you to review your investment
goals with your financial professional and to make portfolio changes, as needed.
For more market insight and commentary from BlackRock investment professionals,
we invite you to visit www.blackrock.com/funds. As always, we thank you for
entrusting BlackRock with your investment assets, and we look forward to
continuing to serve you in the months and years ahead.
Sincerely,
/s/ Rob Kapito
Rob Kapito
President, BlackRock Advisors, LLC
3
THIS PAGE NOT PART OF YOUR FUND REPORT
Fund Summary
Portfolio Management Commentary
How did the Fund perform?
o The Fund outperformed the broad-based S&P 500 Index and the S&P Utilities
Index for both the six-month and 12-month periods ended November 30, 2007.
What factors influenced performance?
o Individual stock selection was the key to the Fund's relative
outperformance. The four main factors were electric utilities, integrated
telecommunication services, independent power producers and wireless
telecommunication services.
o Relative to the Fund's composite index (which is comprised 70% of the S&P
Utilities Index and 30% of the S&P Telecommunications Index), the Fund was
underweight in electric utilities, but benefited from superior stock
selection. The Fund was overweight both in the independent power subsector
and wireless telecommunication services, and posted significantly better
performance in these areas. This was particularly true in the wireless
subsector, as the Fund's holdings had a return in excess of 35% versus -7%
for the composite index. Lastly, in the integrated telecommunication
services sector, the Fund had a smaller weighting than the index, but
registered better returns, again due to successful stock picking.
o There were few detractors to Fund performance. The one area that had a
very modest negative impact was consumer discretionary, where we had held
a position in cable television provider Comcast Corp.
Describe recent portfolio activity.
o No major changes were made to the portfolio during the year.
o In the utility sector, we emphasized companies with unregulated electric
generation as well as firms with nuclear assets, which we believed would
do well amid the current focus on environmental concerns. In the
telecommunications sector, we focused on both the large-cap integrated
companies as well as on those companies that have wireless exposure in
more emerging markets. During the latter part of the fiscal year, we added
to our utility holdings in the more regulated, higher-dividend-paying
companies.
Describe Fund positioning at period-end.
o At November 30, 2007, Fund holdings consisted primarily of U.S. companies.
The electric utility industry represented the largest subsector weighting.
o Our investment focus remains with companies that we believe are better
positioned to deal with new and existing environmental issues within the
utility sector. In terms of telecommunication services, we continue to
like the large integrated carriers (such as AT&T Corp. and Verizon
Communications, Inc.) as they enter into the video markets, a move that we
believe should enhance their underlying core business.
Expense Example
Actual Hypothetical**
-------------------------------------------------- --------------------------------------------------
Beginning Ending Beginning Ending
Account Value Account Value Expenses Paid Account Value Account Value Expenses Paid
June 1, 2007 Nov. 30, 2007 During the Period* June 1, 2007 Nov. 30, 2007 During the Period*
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional .......... $1,000 $1,053.70 $ 5.05 $1,000 $1,020.19 $ 4.96
Investor A ............. $1,000 $1,052.60 $ 6.23 $1,000 $1,019.03 $ 6.12
Investor B ............. $1,000 $1,047.50 $10.93 $1,000 $1,014.42 $10.76
Investor B1 ............ $1,000 $1,049.40 $ 9.14 $1,000 $1,016.18 $ 9.00
Investor C ............. $1,000 $1,048.10 $10.47 $1,000 $1,014.87 $10.30
Investor C1 ............ $1,000 $1,049.10 $ 9.30 $1,000 $1,016.03 $ 9.15
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (.98% for Institutional, 1.21% for Investor A, 2.13%
for Investor B, 1.78% for Investor B1, 2.04% for Investor C and 1.81% for
Investor C1, multiplied by the average account value over the period,
multiplied by 183/365 (to reflect the one-half year period shown).
** Hypothetical 5% annual return before expenses is calculated by pro-rating
the number of days in the most recent fiscal half year divided by 365.
See "Disclosure of Expenses" on page 6 for further information on how
expenses were calculated.
4 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Total Return Based on a $10,000 Investment
Below is a line graph depicting the growth of an investment in the Fund's
Institutional and Investor A Shares compared to growth of an investment in the
S&P 500(R) Index and the S&P Utilities Index. Values are from November 1997 to
November 2007:
Institutional Investor A S&P 500(R) S&P Utilities
Shares*+ Shares*+ Index ++ Index+++
11/97 $10,000 $9,475 $10,000 $10,000
11/98 $12,647 $11,947 $12,366 $11,987
11/99 $13,680 $12,899 $14,950 $11,110
11/00 $14,373 $13,507 $14,319 $16,118
11/01 $12,858 $12,066 $12,569 $11,955
11/02 $10,333 $9,674 $10,493 $8,252
11/03 $11,836 $11,053 $12,077 $10,161
11/04 $15,288 $14,238 $13,629 $13,129
11/05 $17,924 $16,651 $14,780 $15,571
11/06 $22,307 $20,653 $16,884 $18,835
11/07 $28,131 $26,003 $18,187 $22,682
* Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
+ The Fund invests at least 80% of its total assets in equity and debt
securities issued by domestic and foreign companies that are, in the
opinion of the Manager, primarily engaged in the ownership or operation of
facilities used to generate, transmit or distribute electricity,
telecommunications, gas or water.
++ The S&P 500 Index covers 500 industrial, utility, transportation and
financial companies of the U.S. markets (mostly NYSE issues). The
unmanaged Index represents about 75% of NYSE market capitalization and 30%
of NYSE issues. S&P 500 is a registered trademark of the McGraw-Hill
Companies.
+++ This unmanaged capitalization Index is comprised of all stocks designed to
measure the performance of electric and natural gas utilities within the
S&P 500 Index.
Performance Summary for the Period Ended November 30, 2007
Average Annual Total Returns*
------------------------------------------------------------------------
1 Year 5 Years 10 Years
-------------------- -------------------- --------------------
Standardized 6-Month w/o sales w/sales w/o sales w/sales w/o sales w/sales
30-Day Yields Total Returns charge charge charge charge charge charge
- --------------------------------------------------------------------------------------------------------------------------------
Institutional ........... 1.63% +5.37% +26.10% -- +22.18% -- +10.90% --
Investor A .............. 1.27 +5.26 +25.90 +19.29% +21.87 +20.56% +10.62 +10.03%
Investor B .............. 0.32 +4.75 +24.79 +20.29 +20.93 +20.75 + 9.78 + 9.78
Investor B1 ............. 0.85 +4.94 +25.13 +21.13 +21.19 +21.00 +10.15 +10.15
Investor C .............. 0.45 +4.81 +24.86 +23.86 +20.96 +20.96 + 9.79 + 9.79
Investor C1 ............. 0.75 +4.91 +25.11 +24.11 +21.16 +21.16 +10.02 +10.02
S&P 500 Index ........... -- -2.33 + 7.72 -- +11.63 -- + 6.16 --
S&P Utilities Index ..... -- +3.83 +20.42 -- +22.41 -- + 8.53 --
* Assuming maximum sales charges. See "About Fund Performance" on page 6 for
a detailed description of share classes, including any related sales
charges and fees.
Past performance is not indicative of future results.
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 5
About Fund Performance
o Institutional Shares are not subject to any sales charge. Institutional
Shares bear no ongoing distribution or service fees and are available only
to eligible investors.
o Investor A Shares incur a maximum initial sales charge (front-end load) of
5.25% and a service fee of 0.25% per year (but no distribution fee).
o Investor B Shares are subject to a maximum contingent deferred sales
charge of 4.50% declining to 0% after six years. In addition, Investor B
Shares are subject to a distribution fee of 0.75% per year and a service
fee of 0.25% per year. These shares automatically convert to Investor A
Shares after approximately eight years. (There is no initial sales charge
for automatic share conversions.) All returns for periods greater than
eight years reflect this conversion. Prior to October 2, 2006, Investor B
Share performance results are those of Institutional Shares (which have no
distribution or service fees) restated to reflect the Investor B Share
fees.
o Investor B1 Shares are subject to a maximum contingent deferred sales
charge of 4% declining to 0% after six years. In addition, Investor B1
Shares are subject to a distribution fee of 0.50% per year and a service
fee of 0.25% per year. These shares automatically convert to Investor A
Shares after approximately eight years. (There is no initial sales charge
for automatic share conversions.) All returns for periods greater than
eight years reflect this conversion.
o Investor C Shares are subject to a distribution fee of 0.75% per year and
a service fee of 0.25% per year. In addition, Investor C Shares are
subject to a 1% contingent deferred sales charge if redeemed within one
year of purchase. Prior to October 2, 2006, Investor C Share performance
results are those of Institutional Shares (which have no distribution or
service fees) restated to reflect the Investor C Share fees.
o Investor C1 Shares are subject to a distribution fee of 0.55% per year and
a service fee of 0.25% per year. In addition, Investor C1 Shares are
subject to a 1% contingent deferred sales charge if redeemed within one
year of purchase.
Performance information reflects past performance and does not guarantee
future results. Current performance may be lower or higher than the
performance data quoted. Refer to www.blackrock.com/funds to obtain
performance data current to the most recent month-end. Performance results
do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Figures shown in the
performance tables on page 5 assume reinvestment of all dividends and
capital gain distributions, if any, at net asset value on the ex-dividend
date. Investment return and principal value of shares will fluctuate so
that shares, when redeemed, may be worth more or less than their original
cost. Dividends paid to each class of shares will vary because of the
different levels of service, distribution and transfer agency fees
applicable to each class, which are deducted from the income available to
be paid to shareholders.
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses related
to transactions, including sales charges, redemption fees and exchange fees; and
(b) operating expenses including advisory fees, distribution fees including
12b-1 fees and other Fund expenses. The expense example on page 4 (which is
based on a hypothetical investment of $1,000 invested on June 1, 2007 and held
through November 30, 2007) is intended to assist shareholders both in
calculating expenses based on an investment in the Fund and in comparing these
expenses with similar costs of investing in other mutual funds.
The table provides information about actual account values and actual expenses.
In order to estimate the expenses a shareholder paid during the period covered
by this report, shareholders can divide their account value by $1,000 and then
multiply the result by the number corresponding to their share class under the
heading entitled "Expenses Paid During the Period."
The table also provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses. In order to assist shareholders
in comparing the ongoing expenses of investing in this Fund and other funds,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in other funds' shareholder reports.
The expenses shown in the table are intended to highlight shareholders' ongoing
costs only and do not reflect any transactional expenses, such as sales charges,
redemption fees or exchange fees. Therefore, the hypothetical table is useful in
comparing ongoing expenses only, and will not help shareholders determine the
relative total expenses of owning different funds. If these transactional
expenses were included, shareholder expenses would have been higher.
6 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Portfolio Information
As of November 30, 2007
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
- --------------------------------------------------------------------------------
AT&T Inc. .......................................................... 4.6%
Exelon Corp. ....................................................... 3.8
Entergy Corp. ...................................................... 3.4
Public Service Enterprise Group, Inc. .............................. 3.4
Constellation Energy Group, Inc. ................................... 3.0
NRG Energy, Inc. ................................................... 3.0
PPL Corp. .......................................................... 2.9
Verizon Communications, Inc. ....................................... 2.9
FPL Group, Inc. .................................................... 2.6
Edison International ............................................... 2.1
- --------------------------------------------------------------------------------
Percent of
Geographic Allocation Equities
- --------------------------------------------------------------------------------
United States ..................................................... 70.8%
United Kingdom .................................................... 5.5
France ............................................................ 4.9
Brazil ............................................................ 3.5
Spain ............................................................. 2.9
Germany ........................................................... 2.5
Canada ............................................................ 1.9
Mexico ............................................................ 1.7
Finland ........................................................... 1.3
Czech Republic .................................................... 0.8
Norway ............................................................ 0.7
Sweden ............................................................ 0.6
Luxembourg ........................................................ 0.6
Greece ............................................................ 0.6
Italy ............................................................. 0.6
Netherlands ....................................................... 0.5
Switzerland ....................................................... 0.4
Cayman Islands .................................................... 0.2
- --------------------------------------------------------------------------------
Industry Classification as a Percentage of Total Investments as of November 30,
2007
Below is a pie chart showing the Industry Classification as a Percentage of
Total Investments as of November 30, 2007
Electric Utilities ................................................ 39.0%
Multi-Utilities ................................................... 16.6%
Diversified Telecommunication Services ............................ 15.6%
Independent Power Producers & Energy Traders ...................... 10.2%
Wireless Telecommunication Services ............................... 7.2%
Oil, Gas & Consumable Fuels ....................................... 3.7%
Gas Utilities ..................................................... 2.9%
Water Utilities ................................................... 1.0%
Energy Equipment & Services ....................................... 0.6%
Construction & Engineering ........................................ 0.5%
Electrical Equipment .............................................. 0.4%
Other* ............................................................ 2.3%
* Includes portfolio holdings in short-term investments.
For Fund compliance purposes, the Fund's industry classifications refer to
any one or more of the industry sub-classifications used by one or more
widely recognized market indexes or ratings group indexes, and/or as
defined by Fund management. This definition may not apply for purposes of
this report, which may combine industry sub-classifications for reporting
ease.
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 7
Schedule of Investments as of November 30, 2007 (in U.S. dollars)
Shares
Common Stocks Held Value
================================================================================
Brazil -- 3.4%
Diversified Telecommunication Services -- 0.3%
GVT Holding SA (a) 25,900 $ 544,670
- -------------------------------------------------------------------------------
Electric Utilities -- 1.6%
CPFL Energia SA (b) 23,700 1,412,757
Cia Energetica de Minas Gerais (b) 47,000 984,650
EDP -- Energias do Brasil SA 33,200 497,250
------------
2,894,657
- -------------------------------------------------------------------------------
Independent Power Producers & Energy
Traders -- 0.6%
Cia Energetica de Sao Paulo (Preference Shares) (a) 60,000 1,061,974
- -------------------------------------------------------------------------------
Water Utilities -- 0.6%
CIA Saneamento (Preference Shares) (e) 314 21,859
Cia de Saneamento Basico do Estado de Sao Paulo 20,800 508,426
Companhia de Saneamento de Minas Gerais 32,000 563,708
------------
1,093,993
- -------------------------------------------------------------------------------
Wireless Telecommunication Services -- 0.3%
Tim Participacoes SA (b) 13,000 504,270
- -------------------------------------------------------------------------------
Total Common Stocks in Brazil 6,099,564
===============================================================================
Canada -- 1.8%
Diversified Telecommunication Services -- 1.2%
Manitoba Telecom Services, Inc. 30,000 1,338,367
TELUS Corp. (Non-Voting Shares) 16,500 764,153
------------
2,102,520
- -------------------------------------------------------------------------------
Wireless Telecommunication Services -- 0.6%
Rogers Communications, Inc. Class B 27,000 1,130,220
- -------------------------------------------------------------------------------
Total Common Stocks in Canada 3,232,740
===============================================================================
Cayman Islands -- 0.3%
Energy Equipment & Services -- 0.3%
Transocean, Inc. 3,218 441,821
- -------------------------------------------------------------------------------
Total Common Stocks in the Cayman Islands 441,821
===============================================================================
Czech Republic -- 0.7%
Electric Utilities -- 0.7%
CEZ 17,700 1,309,390
- -------------------------------------------------------------------------------
Total Common Stocks in the Czech Republic 1,309,390
===============================================================================
Finland -- 1.3%
Electric Utilities -- 1.3%
Fortum Oyj 53,000 2,278,019
- -------------------------------------------------------------------------------
Total Common Stocks in Finland 2,278,019
===============================================================================
France -- 4.8%
Diversified Telecommunication Services -- 1.5%
France Telecom SA 38,500 1,461,598
Neuf Cegetel 22,500 1,173,469
------------
2,635,067
- -------------------------------------------------------------------------------
Electric Utilities -- 1.0%
Electricite de France SA 14,500 1,762,783
- -------------------------------------------------------------------------------
Multi-Utilities -- 2.3%
Suez SA 33,200 2,208,962
Veolia Environnement SA 21,150 1,954,569
------------
4,163,531
- -------------------------------------------------------------------------------
Total Common Stocks in France 8,561,381
===============================================================================
Germany -- 2.5%
Electric Utilities -- 2.1%
E.ON AG 18,300 3,729,875
- -------------------------------------------------------------------------------
Multi-Utilities -- 0.4%
RWE AG 4,900 669,391
- -------------------------------------------------------------------------------
Total Common Stocks in Germany 4,399,266
===============================================================================
Greece -- 0.5%
Diversified Telecommunication Services -- 0.5%
Hellenic Telecommunications Organization SA 26,500 958,350
- -------------------------------------------------------------------------------
Total Common Stocks in Greece 958,350
===============================================================================
Italy -- 0.5%
Electric Utilities -- 0.5%
Enel SpA 79,000 946,544
- -------------------------------------------------------------------------------
Total Common Stocks in Italy 946,544
===============================================================================
Luxembourg -- 0.6%
Wireless Telecommunication Services -- 0.6%
Millicom International Cellular SA (a) 9,200 1,097,376
- -------------------------------------------------------------------------------
Total Common Stocks in Luxembourg 1,097,376
===============================================================================
Mexico -- 1.7%
Wireless Telecommunication Services -- 1.7%
America Movil, SA de CV (b) 49,000 3,021,340
- -------------------------------------------------------------------------------
Total Common Stocks in Mexico 3,021,340
===============================================================================
Netherlands -- 0.4%
Diversified Telecommunication Services -- 0.4%
Koninklijke KPN NV 42,000 771,736
- -------------------------------------------------------------------------------
Total Common Stocks in the Netherlands 771,736
===============================================================================
Norway -- 0.6%
Diversified Telecommunication Services -- 0.6%
Telenor ASA 49,600 1,151,253
- -------------------------------------------------------------------------------
Total Common Stocks in Norway 1,151,253
===============================================================================
Spain -- 2.8%
Diversified Telecommunication Services -- 1.5%
Telefonica SA 79,448 2,662,795
- -------------------------------------------------------------------------------
Electric Utilities -- 1.0%
Iberdrola SA 106,000 1,747,670
- -------------------------------------------------------------------------------
Electrical Equipment -- 0.3%
Gamesa Corp. Tecnologica SA 14,600 662,559
- -------------------------------------------------------------------------------
Total Common Stocks in Spain 5,073,024
===============================================================================
Sweden -- 0.6%
Diversified Telecommunication Services -- 0.6%
Tele2 AB 48,100 1,099,007
- -------------------------------------------------------------------------------
Total Common Stocks in Sweden 1,099,007
===============================================================================
Switzerland -- 0.4%
Diversified Telecommunication Services -- 0.4%
Swisscom AG 1,900 721,381
- -------------------------------------------------------------------------------
Total Common Stocks in Switzerland 721,381
===============================================================================
8 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Schedule of Investments (continued) (in U.S. dollars)
Shares
Common Stocks Held Value
================================================================================
United Kingdom -- 5.3%
Diversified Telecommunication Services -- 0.4%
BT Group Plc 109,900 $ 647,899
- -------------------------------------------------------------------------------
Electric Utilities -- 0.5%
Scottish & Southern Energy Plc 28,100 918,565
- -------------------------------------------------------------------------------
Independent Power Producers & Energy
Traders -- 1.0%
International Power Plc 196,900 1,890,467
- -------------------------------------------------------------------------------
Multi-Utilities -- 1.2%
Centrica Plc 133,600 999,803
National Grid Plc 69,918 1,180,872
------------
2,180,675
- -------------------------------------------------------------------------------
Water Utilities -- 0.4%
Northumbrian Water Group Plc 100,000 721,114
- -------------------------------------------------------------------------------
Wireless Telecommunication Services -- 1.8%
Vodafone Group Plc (b) 84,512 3,148,072
- -------------------------------------------------------------------------------
Total Common Stocks in the United Kingdom 9,506,792
===============================================================================
United States -- 68.7%
Construction & Engineering -- 0.5%
Quanta Services, Inc. (a) 30,575 837,144
- -------------------------------------------------------------------------------
Diversified Telecommunication Services -- 8.2%
AT&T Inc. 215,462 8,232,803
Citizens Communications Co. 62,400 809,952
Verizon Communications, Inc. 119,400 5,159,274
Windstream Corp. 39,141 506,876
------------
14,708,905
- -------------------------------------------------------------------------------
Electric Utilities -- 30.1%
Allegheny Energy, Inc. 50,800 3,086,100
American Electric Power Co., Inc. 44,700 2,130,849
DPL, Inc. 75,000 2,271,000
Duke Energy Corp. 177,532 3,513,358
Edison International 66,700 3,733,866
Entergy Corp. 51,300 6,132,402
Exelon Corp. 84,500 6,850,415
FPL Group, Inc. 66,000 4,604,160
FirstEnergy Corp. 51,900 3,558,264
ITC Holdings Corp. 49,500 2,526,480
Mirant Corp. (a) 60,900 2,350,131
Northeast Utilities Inc. 30,700 969,506
PPL Corp. 101,800 5,187,728
Pepco Holdings, Inc. 30,500 857,050
Pinnacle West Capital Corp. 18,000 771,480
Reliant Energy, Inc. (a) 37,300 971,292
Sierra Pacific Resources 56,000 963,200
The Southern Co. 93,600 3,521,232
------------
53,998,513
- -------------------------------------------------------------------------------
Energy Equipment & Services -- 0.4%
Grant Prideco, Inc. (a) 13,100 630,110
- -------------------------------------------------------------------------------
Gas Utilities -- 2.9%
Energen Corp. 12,000 764,880
Equitable Resources, Inc. 25,200 1,332,072
New Jersey Resources Corp. 13,600 686,120
Questar Corp. 30,500 1,630,225
Spectra Energy Corp. 13,316 328,106
UGI Corp. 19,000 502,360
------------
5,243,763
- -------------------------------------------------------------------------------
Independent Power Producers & Energy
Traders -- 8.0%
The AES Corp. (a) 68,300 1,492,355
Constellation Energy Group, Inc. 54,500 5,461,445
Dynegy, Inc. Class A (a) 98,264 747,789
NRG Energy, Inc. (a) 124,800 5,290,272
Ormat Technologies, Inc. 25,300 1,277,650
------------
14,269,511
- -------------------------------------------------------------------------------
Multi-Utilities -- 12.5%
Ameren Corp. 10,000 538,500
CMS Energy Corp. 132,500 2,309,475
Consolidated Edison, Inc. 26,000 1,259,700
DTE Energy Co. 17,600 863,280
Dominion Resources, Inc. 68,474 3,234,027
NSTAR 41,700 1,459,500
PG&E Corp. 63,100 2,919,637
Public Service Enterprise Group, Inc. 64,000 6,127,360
Sempra Energy 19,900 1,246,138
TECO Energy, Inc. 55,000 952,600
Wisconsin Energy Corp. 19,100 913,744
Xcel Energy, Inc. 29,000 670,190
------------
22,494,151
- -------------------------------------------------------------------------------
Oil, Gas & Consumable Fuels -- 3.8%
Devon Energy Corp. 13,500 1,117,935
EOG Resources, Inc. 15,500 1,283,090
Holly Corp. 11,100 537,795
Range Resources Corp. 18,900 768,852
Southwestern Energy Co. (a) 21,700 1,080,009
Williams Cos., Inc. 58,800 2,040,948
------------
6,828,629
- -------------------------------------------------------------------------------
Wireless Telecommunication Services -- 2.3%
American Tower Corp. Class A (a) 32,100 1,461,834
Crown Castle International Corp. (a) 23,402 981,714
SBA Communications Corp. Class A (a) 42,900 1,606,176
------------
4,049,724
- -------------------------------------------------------------------------------
Total Common Stocks in the United States 123,060,450
- -------------------------------------------------------------------------------
Total Common Stocks
(Cost -- $101,423,866) -- 96.9% 173,729,434
===============================================================================
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 9
Schedule of Investments (concluded) (in U.S. dollars)
Face
Trust Preferreds Amount Value
================================================================================
United States -- 0.6%
Independent Power Producers & Energy
Traders -- 0.6%
AES Trust III, 6.75% due 10/15/2029 (e) $1,092,450 $ 1,035,601
- -------------------------------------------------------------------------------
Total Trust Preferreds
(Cost -- $669,958) -- 0.6% 1,035,601
===============================================================================
Beneficial
Short-Term Securities Interest Value
===============================================================================
United States -- 2.3%
BlackRock Liquidity Series, LLC
Cash Sweep Series, 4.75% (c)(d) 4,041,279 4,041,279
- -------------------------------------------------------------------------------
Total Short-Term Securities
(Cost -- $4,041,279) -- 2.3% 4,041,279
- -------------------------------------------------------------------------------
Total Investments
(Cost -- $106,135,103*) -- 99.8% 178,806,314
Other Assets Less Liabilities -- 0.2% 382,610
------------
Net Assets -- 100.0% $179,188,924
============
* The cost and unrealized appreciation (depreciation) of investments as of
November 30, 2007, as computed for federal income tax purposes, were as
follows:
Aggregate cost .................................... $ 106,135,103
=============
Gross unrealized appreciation ..................... $ 72,903,898
Gross unrealized depreciation ..................... (232,687)
-------------
Net unrealized appreciation ....................... $ 72,671,211
=============
(a) Non-income producing security.
(b) Depositary receipts.
(c) Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
-------------------------------------------------------------------------
Net Interest
Affiliate Activity Income
-------------------------------------------------------------------------
BlackRock Liquidity Series, LLC
Cash Sweep Series $(2,684,474) $ 236,153
BlackRock Liquidity Series, LLC
Money Market Series $ (840,000) $ 603
-------------------------------------------------------------------------
(d) Represents the current yield as of November 30, 2007.
(e) Convertible security.
o For Fund compliance purposes, the Fund's industry classifications refer to
any one or more of the industry sub-classifications used by one or more
widely recognized market indexes or ratings group indexes, and/or as
defined by Fund management. This definition may not apply for purposes of
this report, which may combine industry sub-classifications for reporting
ease. Industries are shown as a percent of net assets. These industry
classifications are unaudited.
See Notes to Financial Statements.
10 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Statement of Assets and Liabilities
As of November 30, 2007
========================================================================================================================
Assets
- ------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (identified cost -- $102,093,824) ... $174,765,035
Investments in affiliated securities, at value (identified cost -- $4,041,279) ....... 4,041,279
Foreign cash (cost -- $31,472) ....................................................... 32,731
Cash ................................................................................. 10,506
Receivables:
Dividends .......................................................................... $ 443,743
Capital shares sold ................................................................ 243,410
Interest ........................................................................... 10,420 697,573
--------------
Prepaid expenses and other assets .................................................... 323,486
------------
Total assets ......................................................................... 179,870,610
------------
========================================================================================================================
Liabilities
- ------------------------------------------------------------------------------------------------------------------------
Payables:
Capital shares redeemed ............................................................ 449,136
Investment adviser ................................................................. 88,449
Distributor ........................................................................ 46,949
Other affiliates ................................................................... 33,166 617,700
--------------
Accrued expenses and other liabilities ............................................... 63,986
------------
Total liabilities .................................................................... 681,686
------------
========================================================================================================================
Net Assets
- ------------------------------------------------------------------------------------------------------------------------
Net Assets ........................................................................... $179,188,924
============
========================================================================================================================
Net Assets Consist of
- ------------------------------------------------------------------------------------------------------------------------
Institutional Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .. $ 167,593
Investor A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 636,482
Investor B Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 7,542
Investor B1 Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .... 78,164
Investor C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 20,670
Investor C1 Shares of Common Stock, $.10 par value, 100,000,000 shares authorized .... 95,121
Paid-in capital in excess of par ..................................................... 90,244,721
Undistributed investment income -- net ............................................... 389,829
Undistributed realized capital gains -- net .......................................... 14,873,693
Unrealized appreciation -- net ....................................................... 72,675,109
------------
Net assets ........................................................................... $179,188,924
============
========================================================================================================================
Net Asset Value
- ------------------------------------------------------------------------------------------------------------------------
Institutional -- Based on net assets of $29,914,721 and 1,675,928 shares outstanding . $ 17.85
============
Investor A -- Based on net assets of $113,647,158 and 6,364,815 shares outstanding ... $ 17.86
============
Investor B -- Based on net assets of $1,334,498 and 75,422 shares outstanding ........ $ 17.69
============
Investor B1 -- Based on net assets of $13,921,352 and 781,641 shares outstanding ..... $ 17.81
============
Investor C -- Based on net assets of $3,617,054 and 206,703 shares outstanding ....... $ 17.50
============
Investor C1 -- Based on net assets of $16,754,141 and 951,209 shares outstanding ..... $ 17.61
============
See Notes to Financial Statements.
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 11
Statement of Operations
For the Year Ended November 30, 2007
========================================================================================================================
Investment Income
- ------------------------------------------------------------------------------------------------------------------------
Dividends (net of $116,420 foreign withholding tax) .................................. $ 3,956,400
Interest (including $236,153 from affiliates) ........................................ 303,882
Securities lending -- net ............................................................ 603
------------
Total income ......................................................................... 4,260,885
------------
========================================================================================================================
Expenses
- ------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ............................................................. $ 1,009,997
Service fees -- Investor A ........................................................... 260,872
Service and distribution fees -- Investor C1 ......................................... 131,188
Service and distribution fees -- Investor B1 ......................................... 117,188
Accounting services .................................................................. 113,450
Transfer agent fees -- Investor A .................................................... 103,662
Registration fees .................................................................... 76,901
Printing and shareholder reports ..................................................... 69,047
Professional fees .................................................................... 60,618
Directors' fees and expenses ......................................................... 38,438
Transfer agent fees -- Institutional ................................................. 33,589
Custodian fees ....................................................................... 26,375
Transfer agent fees -- Investor B1 ................................................... 22,432
Transfer agent fees -- Investor C1 ................................................... 21,534
Service and distribution fees -- Investor C .......................................... 18,269
Service and distribution fees -- Investor B .......................................... 9,360
Pricing fees ......................................................................... 3,997
Transfer agent fees -- Investor C .................................................... 3,312
Transfer agent fees -- Investor B .................................................... 2,201
Other ................................................................................ 32,073
--------------
Total expenses ....................................................................... 2,154,503
------------
Investment income -- net ............................................................. 2,106,382
------------
========================================================================================================================
Realized & Unrealized Gain (Loss) -- Net
- ------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments -- net ................................................................. 16,162,945
Foreign currency transactions -- net ............................................... (4,142) 16,158,803
--------------
Change in unrealized appreciation on:
Investments -- net ................................................................. 20,046,108
Foreign currency transactions -- net ............................................... 2,970 20,049,078
------------------------------
Total realized and unrealized gain -- net ............................................ 36,207,881
------------
Net Increase in Net Assets Resulting from Operations ................................. $ 38,314,263
============
See Notes to Financial Statements.
12 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Statements of Changes in Net Assets
For the Year Ended
November 30,
-------------------------------
Increase (Decrease) in Net Assets: 2007 2006
=========================================================================================================================
Operations
- -------------------------------------------------------------------------------------------------------------------------
Investment income -- net ............................................................. $ 2,106,382 $ 3,565,766
Realized gain -- net ................................................................. 16,158,803 21,869,811
Change in unrealized appreciation -- net ............................................. 20,049,078 6,411,317
-------------------------------
Net increase in net assets resulting from operations ................................. 38,314,263 31,846,894
-------------------------------
=========================================================================================================================
Dividends to Shareholders
- -------------------------------------------------------------------------------------------------------------------------
Investment income -- net:
Institutional .................................................................... (454,751) (688,635)
Investor A ....................................................................... (1,377,723) (2,013,568)
Investor B ....................................................................... (7,234) (868)
Investor B1 ...................................................................... (107,450) (484,766)
Investor C ....................................................................... (16,756) (446)
Investor C1 ...................................................................... (123,612) (294,095)
-------------------------------
Net decrease in net assets resulting from dividends to shareholders .................. (2,087,526) (3,482,378)
-------------------------------
=========================================================================================================================
Capital Share Transactions
- -------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets derived from capital share transactions ................... (13,368,045) (19,253,290)
-------------------------------
=========================================================================================================================
Net Assets
- -------------------------------------------------------------------------------------------------------------------------
Total increase in net assets ......................................................... 22,858,692 9,111,226
Beginning of year .................................................................... 156,330,232 147,219,006
-------------------------------
End of year* ......................................................................... $ 179,188,924 $ 156,330,232
===============================
* Undistributed investment income -- net ......................................... $ 389,829 $ 375,115
===============================
See Notes to Financial Statements.
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 13
Financial Highlights
Institutional
---------------------------------------------------------------------
The following per share data For the Year Ended
and ratios have been derived November 30,
from information provided in ---------------------------------------------------------------------
the financial statements. 2007 2006 2005 2004 2003
===============================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ... $ 14.37 $ 11.87 $ 10.37 $ 8.22 $ 7.39
---------------------------------------------------------------------
Investment income -- net** ........... .25 .35 .26 .22 .21
Realized and unrealized gain -- net .. 3.48 2.50 1.51 2.14 .84
---------------------------------------------------------------------
Total from investment operations ..... 3.73 2.85 1.77 2.36 1.05
---------------------------------------------------------------------
Less dividends from investment
income -- net ...................... (.25) (.35) (.27) (.21) (.22)
---------------------------------------------------------------------
Net asset value, end of year ......... $ 17.85 $ 14.37 $ 11.87 $ 10.37 $ 8.22
---------------------------------------------------------------------
===============================================================================================================
Total Investment Return*
- ---------------------------------------------------------------------------------------------------------------
Based on net asset value per share ... 26.10% 24.45% 17.25% 29.16% 14.54%
=====================================================================
===============================================================================================================
Ratios to Average Net Assets
- ---------------------------------------------------------------------------------------------------------------
Expenses ............................. .96% .97% .98% 1.03% 1.07%
=====================================================================
Investment income -- net ............. 1.57% 2.77% 2.32% 2.36% 2.77%
=====================================================================
===============================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) $ 29,915 $ 27,255 $ 25,125 $ 23,677 $ 22,514
=====================================================================
Portfolio turnover ................... 31% 44% 25% 11% 21%
=====================================================================
Investor A
---------------------------------------------------------------------
The following per share data For the Year Ended
and ratios have been derived November 30,
from information provided in ---------------------------------------------------------------------
the financial statements. 2007 2006 2005 2004 2003
===============================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ... $ 14.37 $ 11.88 $ 10.38 $ 8.23 $ 7.40
---------------------------------------------------------------------
Investment income -- net** ........... .22 .32 .24 .20 .19
Realized and unrealized gain -- net .. 3.48 2.47 1.51 2.14 .85
---------------------------------------------------------------------
Total from investment operations ..... 3.70 2.79 1.75 2.34 1.04
---------------------------------------------------------------------
Less dividends from investment
income -- net ...................... (.21) (.30) (.25) (.19) (.21)
---------------------------------------------------------------------
Net asset value, end of year ......... $ 17.86 $ 14.37 $ 11.88 $ 10.38 $ 8.23
---------------------------------------------------------------------
===============================================================================================================
Total Investment Return*
- ---------------------------------------------------------------------------------------------------------------
Based on net asset value per share ... 25.90% 24.04% 16.95% 28.82% 14.26%
=====================================================================
===============================================================================================================
Ratios to Average Net Assets
- ---------------------------------------------------------------------------------------------------------------
Expenses ............................. 1.20% 1.22% 1.23% 1.28% 1.33%
=====================================================================
Investment income -- net ............. 1.33% 2.52% 2.07% 2.11% 2.42%
=====================================================================
===============================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) $ 113,647 $ 93,670 $ 79,008 $ 73,286 $ 60,142
=====================================================================
Portfolio turnover ................... 31% 44% 25% 11% 21%
=====================================================================
* Total investment returns exclude the effects of any sales charges.
** Based on average shares outstanding.
See Notes to Financial Statements.
14 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Financial Highlights (continued)
Investor B
------------------------
For the
For the Period
Year October 2,
The following per share data and ratios Ended 2006@ to
have been derived from information Nov. 30, Nov. 30,
provided in the financial statements. 2007 2006
========================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------
Net asset value, beginning of period ....... $ 14.29 $ 13.58
------------------------
Investment income -- net** ................. .08 .02
Realized and unrealized gain -- net ........ 3.45 .80
------------------------
Total from investment operations ........... 3.53 .82
------------------------
Less dividends from investment income -- net (.13) (.11)
------------------------
Net asset value, end of period ............. $ 17.69 $ 14.29
========================
========================================================================
Total Investment Return*
- ------------------------------------------------------------------------
Based on net asset value per share ......... 24.79% 6.05%++
========================
========================================================================
Ratios to Average Net Assets
- ------------------------------------------------------------------------
Expenses ................................... 2.07% 1.96%+
========================
Investment income -- net ................... .51% 1.00%+
========================
========================================================================
Supplemental Data
- ------------------------------------------------------------------------
Net assets, end of period (in thousands) ... $ 1,334 $ 238
========================
Portfolio turnover ......................... 31% 44%
========================
Investor B1
---------------------------------------------------------------------
For the Year Ended
The following per share data and ratios November 30,
have been derived from information ---------------------------------------------------------------------
provided in the financial statements. 2007 2006 2005 2004 2003
=====================================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ....... $ 14.33 $ 11.84 $ 10.35 $ 8.19 $ 7.37
---------------------------------------------------------------------
Investment income -- net** ................. .12 .26 .18 .14 .16
Realized and unrealized gain -- net ........ 3.47 2.48 1.49 2.16 .82
---------------------------------------------------------------------
Total from investment operations ........... 3.59 2.74 1.67 2.30 .98
---------------------------------------------------------------------
Less dividends from investment income -- net (.11) (.25) (.18) (.14) (.16)
---------------------------------------------------------------------
Net asset value, end of period ............. $ 17.81 $ 14.33 $ 11.84 $ 10.35 $ 8.19
=====================================================================
=====================================================================================================================
Total Investment Return*
- ---------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ......... 25.13% 23.43% 16.26% 28.30% 13.47%
=====================================================================
=====================================================================================================================
Ratios to Average Net Assets
- ---------------------------------------------------------------------------------------------------------------------
Expenses ................................... 1.75% 1.75% 1.75% 1.81% 1.86%
=====================================================================
Investment income -- net ................... .77% 2.02% 1.56% 1.58% 2.08%
=====================================================================
=====================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ... $ 13,921 $ 18,347 $ 28,298 $ 31,935 $ 41,317
=====================================================================
Portfolio turnover ......................... 31% 44% 25% 11% 21%
=====================================================================
* Total investment returns exclude the effects of sales charges.
** Based on average shares outstanding.
+ Annualized.
++ Aggregate total investment return.
@ Commencement of operations.
See Notes to Financial Statements.
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 15
Financial Highlights (concluded)
Investor C
------------------------
For the
For the Period
Year October 2,
The following per share data and ratios Ended 2006@ to
have been derived from information Nov. 30, Nov. 30,
provided in the financial statements. 2007 2006
========================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------
Net asset value, beginning of period ....... $ 14.15 $ 13.44
------------------------
Investment income -- net** ................. .09 .02
Realized and unrealized gain -- net ........ 3.41 .80
------------------------
Total from investment operations ........... 3.50 .82
------------------------
Less dividends from investment income -- net (.15) (.11)
------------------------
Net asset value, end of period ............. $ 17.50 $ 14.15
========================
========================================================================
Total Investment Return*
- ------------------------------------------------------------------------
Based on net asset value per share ......... 24.86% 6.11%++
========================
========================================================================
Ratios to Average Net Assets
- ------------------------------------------------------------------------
Expenses ................................... 2.01% 1.97%+
========================
Investment income -- net ................... .56% .98%+
========================
========================================================================
Supplemental Data
- ------------------------------------------------------------------------
Net assets, end of period (in thousands) ... $ 3,617 $ 292
========================
Portfolio turnover ......................... 31% 44%
========================
Investor C1
---------------------------------------------------------------------
For the Year Ended
The following per share data and ratios November 30,
have been derived from information ---------------------------------------------------------------------
provided in the financial statements. 2007 2006 2005 2004 2003
=====================================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ....... $ 14.18 $ 11.73 $ 10.25 $ 8.13 $ 7.31
---------------------------------------------------------------------
Investment income -- net** ................. .12 .25 .17 .14 .15
Realized and unrealized gain -- net ........ 3.43 2.45 1.50 2.12 .83
---------------------------------------------------------------------
Total from investment operations ........... 3.55 2.70 1.67 2.26 .98
---------------------------------------------------------------------
Less dividends from investment income -- net (.12) (.25) (.19) (.14) (.16)
---------------------------------------------------------------------
Net asset value, end of period ............. $ 17.61 $ 14.18 $ 11.73 $ 10.25 $ 8.13
=====================================================================
=====================================================================================================================
Total Investment Return*
- ---------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ......... 25.11% 23.30% 16.34% 28.03% 13.62%
=====================================================================
=====================================================================================================================
Ratios to Average Net Assets
- ---------------------------------------------------------------------------------------------------------------------
Expenses ................................... 1.79% 1.79% 1.80% 1.85% 1.91%
=====================================================================
Investment income -- net ................... .74% 1.94% 1.49% 1.53% 1.93%
=====================================================================
=====================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ... $ 16,754 $ 16,527 $ 14,789 $ 11,898 $ 10,994
=====================================================================
Portfolio turnover ......................... 31% 44% 25% 11% 21%
=====================================================================
* Total investment returns exclude the effects of sales charges.
** Based on average shares outstanding.
+ Annualized.
++ Aggregate total investment return.
@ Commencement of operations.
See Notes to Financial Statements.
16 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Notes to Financial Statements
1. Significant Accounting Policies:
BlackRock Utilities and Telecommunications Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's financial statements are prepared in
conformity with U.S. generally accepted accounting principles, which may require
the use of management accruals and estimates. Actual results may differ from
these estimates. The Fund offers multiple classes of shares. Institutional
Shares are generally sold only to certain eligible investors. Investor A Shares
are generally sold with a front-end sales charge. Shares of Investor B, Investor
B1, Investor C and Investor C1 may be subject to a contingent deferred sales
charge. All classes of shares have identical voting, dividend, liquidation and
other rights and the same terms and conditions, except that Investor A, Investor
B, Investor B1, Investor C and Investor C1 Shares bear certain expenses related
to the shareholder servicing of such shares, and Investor B, Investor B1,
Investor C and Investor C1 Shares also bear certain expenses related to the
distribution of such shares. Each class has exclusive voting rights with respect
to matters relating to its shareholder servicing and distribution expenditures
(except that Investor B and Investor B1 shareholders may vote on certain changes
to the Investor A distribution plan). Income, expenses (other than expenses
attributable to a specific class) and realized and unrealized gains and losses
are allocated daily to each class based on its relative net assets. The
following is a summary of significant accounting policies followed by the Fund.
(a) Valuation of securities -- Equity securities held by the Fund that are
traded on stock exchanges or the NASDAQ Global Market are valued at the last
sale price or official close price on the exchange, as of the close of business
on the day the securities are being valued or, lacking any sales, at the last
available bid price for long positions, and at the last available asked price
for short positions. In cases where equity securities are traded on more than
one exchange, the securities are valued on the exchange designated as the
primary market by or under the authority of the Board of Directors of the Fund.
Long positions traded in the over-the-counter ("OTC") markets, NASDAQ Capital
Market or Bulletin Board are valued at the last available bid price or yield
equivalent obtained from one or more dealers or pricing services approved by the
Board of Directors of the Fund. Short positions traded in the OTC markets are
valued at the last available asked price. Portfolio securities that are traded
both in the OTC markets and on a stock exchange are valued according to the
broadest and most representative market.
Effective September 4, 2007, exchange-traded options are valued at the mean
between the last bid and ask prices at the close of the options market in which
the options trade and previously were valued at the last sales price as of the
close of options trading on applicable exchanges. Options traded in the OTC
market are valued at the last asked price (options written) or the last bid
price (options purchased). Swap agreements are valued based upon quoted fair
valuations received daily by the Fund from a pricing service or counterparty.
Financial futures contracts and options thereon, which are traded on exchanges,
are valued at their last sale price as of the close of such exchanges. Valuation
of short-term investment vehicles is generally based on the net asset value of
the underlying investment vehicle or amortized cost.
Repurchase agreements are valued at cost plus accrued interest. The Fund employs
pricing services to provide certain securities prices for the Fund. Securities
and assets for which market quotations are not readily available are valued at
fair value as determined in good faith by or under the direction of the Board of
Directors of the Fund, including valuations furnished by the pricing services
retained by the Fund, which may use a matrix system for valuations. The
procedures of a pricing service and its valuations are reviewed by the officers
of the Fund under the general supervision of the Fund's Board of Directors. Such
valuations and procedures will be reviewed periodically by the Board of
Directors of the Fund.
Generally, trading in foreign securities, as well as U.S. government securities,
money market instruments and certain fixed income securities, is substantially
completed each day at various times prior to the close of business on the New
York Stock Exchange ("NYSE"). The values of such securities used in computing
the net asset value of the Fund's shares are determined as of such times.
Foreign currency exchange rates will generally be determined as of the close of
business on the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which they are
determined and the close of business on the NYSE that may not be reflected in
the computation of the Fund's net asset value. If events (for example, a company
announcement, market volatility or a natural disaster) occur during such periods
that are expected to materially affect the value of such securities, those
securities will be valued at their fair value as determined in good faith by the
Fund's Board of Directors or by BlackRock Advisors, LLC (the "Manager"), an
indirect, wholly owned subsidiary of BlackRock, Inc., using a pricing service
and/or procedures approved by the Fund's Board of Directors.
(b) Foreign currency transactions -- Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized. Assets
and liabilities denominated in foreign currencies are valued at the exchange
rate at the end of the period. Foreign currency transactions are the result of
settling (realized) or valuing (unrealized) assets or liabilities expressed in
foreign currencies into U.S. dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on investments.
The Fund invests in foreign securities, which may involve a number of risk
factors and special considerations not present with investments in securities of
U.S. corporations.
(c) Derivative financial instruments -- The Fund may engage in various portfolio
investment strategies both to increase the return of the Fund and to hedge, or
protect, its exposure to interest rate movements and movements in the securities
markets. Losses may arise due to changes in the value of the contract due to an
unfavorable change in the price of the underlying security, or index, or if the
counterparty does not perform under
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 17
Notes to Financial Statements (continued)
the contract. The counterparty for certain instruments may pledge cash or
securities as collateral.
o Options -- The Fund may purchase and write call options and put options.
When the Fund writes an option, an amount equal to the premium received by
the Fund is reflected as an asset and an equivalent liability. The amount
of the liability is subsequently marked-to-market to reflect the current
market value of the option written. When a security is purchased or sold
through an exercise of an option, the related premium paid (or received)
is added to (or deducted from) the basis of the security acquired or
deducted from (or added to) the proceeds of the security sold. When an
option expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the closing
transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
o Financial futures contracts -- The Fund may purchase or sell financial
futures contracts and options on such financial futures contracts.
Financial futures contracts are contracts for delayed delivery of
securities at a specific future date and at a specific price or yield.
Upon entering into a contract, the Fund deposits, and maintains as
collateral, such initial margin as required by the exchange on which the
transaction is effected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known
as variation margin and are recorded by the Fund as unrealized gains or
losses. When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the value of the contract at the time
it was opened and the value at the time it was closed.
o Forward foreign exchange contracts -- The Fund may enter into forward
foreign exchange contracts as a hedge against either specific transactions
or portfolio positions. The contract is marked-to-market daily and the
change in market value is recorded by the Fund as an unrealized gain or
loss. When the contract is closed, the Fund records a realized gain or
loss equal to the difference between the value at the time it was opened
and the value at the time it was closed.
o Foreign currency options and futures -- The Fund may also purchase or sell
listed or OTC foreign currency options, foreign currency futures and
related options on foreign currency futures as a short or long hedge
against possible variations in foreign exchange rates. Such transactions
may be effected with respect to hedges on non-U.S. dollar denominated
securities owned by the Fund, sold by the Fund but not yet delivered, or
committed or anticipated to be purchased by the Fund.
(d) Income taxes -- It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required. Under the applicable
foreign tax law, a withholding tax may be imposed on interest, dividends and
capital gains at various rates.
(e) Security transactions and investment income -- Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Dividends from foreign securities where the ex-dividend date may have passed are
subsequently recorded when the Fund has determined the ex-dividend dates.
Interest income is recognized on the accrual basis.
(f) Prepaid registration fees -- Prepaid registration fees are charged to
expense as the related shares are issued.
(g) Dividends and distributions -- Dividends and distributions paid by the Fund
are recorded on the ex-dividend dates.
(h) Securities lending -- The Fund may lend securities to financial institutions
that provide cash or securities issued or guaranteed by the U.S. government as
collateral, which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. The market value of
the loaned securities is determined at the close of business of the Fund and any
additional required collateral is delivered to the Fund on the next business
day. Where the Fund receives securities as collateral for the loaned securities,
it collects a fee from the borrower. The Fund typically receives the income on
the loaned securities but does not receive the income on the collateral. Where
the Fund receives cash collateral, it may invest such collateral and retain the
amount earned on such investment, net of any amount rebated to the borrower.
Loans of securities are terminable at any time and the borrower, after notice,
is required to return borrowed securities within five business days. The Fund
may pay reasonable finder's, lending agent, administrative and custodial fees in
connection with its loans. In the event that the borrower defaults on its
obligation to return borrowed securities because of insolvency or for any other
reason, the Fund could experience delays and costs in gaining access to the
collateral. The Fund also could suffer a loss where the value of the collateral
falls below the market value of the borrowed securities, in the event of
borrower default or in the event of losses on investments made with cash
collateral.
(i) Recent accounting pronouncements -- In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes -- an interpretation of FASB Statement No. 109."
FIN 48 prescribes the minimum recognition threshold a tax position must meet in
connection with accounting for uncertainties in income tax positions taken or
expected to be taken by an entity, including mutual funds, before being measured
and recognized in the financial statements. Adoption of FIN 48 is required for
the last net asset value calculation in the first required financial statement
reporting
18 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Notes to Financial Statements (continued)
period for fiscal years beginning after December 15, 2006. The impact on the
Fund's financial statements, if any, is currently being assessed.
In September 2006, Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. The impact on the Fund's financial statement disclosures, if any,
is currently being assessed.
In addition, in February 2007, Statement of Financial Accounting Standard No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of FAS 157. FAS 159 permits entities to choose to
measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value. FAS 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. The impact on the Fund's financial
statement disclosures, if any, is currently being assessed.
(j) Reclassification -- U.S. generally accepted accounting principles require
that certain components of net assets be adjusted to reflect permanent
differences between financial and tax reporting. Accordingly, during the current
year, $4,142 has been reclassified between undistributed net investment income
and undistributed net realized capital gains as a result of a permanent
difference attributable to foreign currency transactions. This reclassification
has no effect on net assets or net asset values per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with the Manager. The
Fund has also entered into separate Distribution Agreements and Distribution
Plans with FAM Distributors, Inc. ("FAMD") and BlackRock Distributors, Inc. and
its affiliates ("BDI") (collectively, the "Distributor"). FAMD is a wholly owned
subsidiary of Merrill Lynch Group, Inc., and BDI is an affiliate of BlackRock,
Inc. Merrill Lynch & Co., Inc. ("Merrill Lynch") and The PNC Financial Services
Group, Inc. ("PNC") are the principal owners of BlackRock, Inc.
The Manager is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operation of the Fund. For such services, the Fund
pays a monthly fee of .60%, on an annual basis, of the average daily value of
the Fund's net assets.
In addition, the Manager has entered into a sub-advisory agreement with
BlackRock Investment Management, LLC ("BIM"), an affiliate of the Manager, under
which the Manager pays the sub-adviser for services it provides a monthly fee at
an annual rate equal to a percentage of the management fee paid by the Fund to
the Manager.
Pursuant to the Distribution Plans adopted by the Fund in accordance with Rule
12b-1 under the Investment Company Act of 1940, the Fund pays the Distributor
ongoing service and distribution fees. The fees are accrued daily and paid
monthly at annual rates based upon the average daily net assets of the shares as
follows:
- --------------------------------------------------------------------------------
Service Distribution
Fee Fee
- --------------------------------------------------------------------------------
Investor A ...................................... .25% --
Investor B ...................................... .25% .75%
Investor B1 ..................................... .25% .50%
Investor C ...................................... .25% .75%
Investor C1 ..................................... .25% .55%
- --------------------------------------------------------------------------------
Pursuant to sub-agreements with each Distributor, broker-dealers, including
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a wholly owned
subsidiary of Merrill Lynch, and the Distributor provide shareholder servicing
and distribution services to the Fund. The ongoing service fee compensates the
Distributor and each broker-dealer (including MLPF&S) for providing shareholder
servicing to Investor A, Investor B, Investor B1, Investor C and Investor C1
shareholders. The ongoing distribution fee compensates the Distributor and the
broker-dealers for providing distribution-related services to Investor B,
Investor B1, Investor C and Investor C1 shareholders.
For the year ended November 30, 2007, FAMD and BDI earned underwriting discounts
and direct commissions and MLPF&S earned dealer concessions on sales of the
Fund's Investor A Shares, which totaled $2,819 and $34,459, respectively.
For the year ended November 30, 2007, affiliates received contingent deferred
sales charges of $3,559, $23,375, $1,906 and $1,220 relating to transactions in
Investor B Shares, Investor B1 Shares, Investor C Shares and Investor C1 Shares,
respectively.
In addition, affiliates received contingent deferred sales charges relating to
transactions subject to front-end sales charge waivers in the amount of $61 for
Investor A Shares.
The Manager maintains a call center, which is responsible for providing certain
shareholder services to the Fund, such as responding to shareholder inquiries
and processing transactions based upon instructions from shareholders with
respect to the subscription and redemption of Fund shares. During the year ended
November 30, 2007, the following amounts have been accrued by the Fund to
reimburse the Manager for
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 19
Notes to Financial Statements (continued)
costs incurred running the call center, which are a component of the transfer
agent fees in the accompanying Statement of Operations.
- --------------------------------------------------------------------------------
Call Center Fees
- --------------------------------------------------------------------------------
Institutional ......................................... $ 414
Investor A ............................................ $2,885
Investor B ............................................ $ 183
Investor B1 ........................................... $ 363
Investor C ............................................ $ 118
Investor C1 ........................................... $ 291
- --------------------------------------------------------------------------------
The Fund has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to MLPF&S or its
affiliates. Pursuant to that order, the Fund has retained BIM, an affiliate of
the Manager, as the securities lending agent for a fee based on a share of the
returns on investment of cash collateral. BIM may, on behalf of the Fund, invest
cash collateral received by the Fund for such loans, among other things, in a
private investment company managed by the Manager or in registered money market
funds advised by the Manager or its affiliates. For the year ended November 30,
2007, BIM received $215 in securities lending agent fees.
In addition, MLPF&S received $28,331 in commissions on the execution of
portfolio security transactions for the Fund for the year ended November 30,
2007.
For the year ended November 30, 2007, the Fund reimbursed the Manager $3,095 for
certain accounting services.
PFPC Inc., an indirect, wholly owned subsidiary of PNC and an affiliate of the
Manager, is the Fund's transfer agent.
Certain officers and/or directors of the Fund are officers and/or directors of
BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended November 30, 2007 were $50,493,215 and $61,239,008, respectively.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions was
$13,368,045 and $19,253,290 for the years ended November 30, 2007 and November
30, 2006, respectively.
Transactions in capital shares for each class were as follows:
- -------------------------------------------------------------------------------
Institutional Shares for the Year Dollar
Ended November 30, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................. 217,408 $ 3,497,190
Shares issued to shareholders in reinvestment
of dividends ............................... 24,104 396,264
---------------------------
Total issued ................................. 241,512 3,893,454
Shares redeemed .............................. (462,683) (7,520,256)
---------------------------
Net decrease ................................. (221,171) $ (3,626,802)
===========================
- -------------------------------------------------------------------------------
Institutional Shares for the Year Dollar
Ended November 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................. 191,231 $ 2,481,454
Shares issued to shareholders in reinvestment
of dividends ............................... 34,464 425,158
---------------------------
Total issued ................................. 225,695 2,906,612
Shares redeemed .............................. (444,397) (5,674,752)
---------------------------
Net decrease ................................. (218,702) $ (2,768,140)
===========================
- -------------------------------------------------------------------------------
Investor A Shares for the Year Dollar
Ended November 30, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold and automatic conversion of shares 862,897 $ 13,948,915
Shares issued to shareholders in reinvestment
of dividends ............................... 65,005 1,070,888
---------------------------
Total issued ................................. 927,902 15,019,803
Shares redeemed .............................. (1,079,874) (17,445,028)
---------------------------
Net decrease ................................. (151,972) $ (2,425,225)
===========================
- -------------------------------------------------------------------------------
Investor A Shares for the Year Dollar
Ended November 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................. 752,525 $ 10,267,785
Automatic conversion of shares ............... 214,681 2,677,349
Shares issued to shareholders in reinvestment
of dividends ............................... 92,142 1,140,520
---------------------------
Total issued ................................. 1,059,348 14,085,654
Shares redeemed .............................. (1,192,638) (15,249,824)
---------------------------
Net decrease ................................. (133,290) $ (1,164,170)
===========================
- -------------------------------------------------------------------------------
Investor B Shares for the Year Dollar
Ended November 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................. 83,999 $ 1,317,040
Shares issued to shareholders in reinvestment
of dividends ............................... 363 5,996
---------------------------
Total issued ................................. 84,362 1,323,036
Shares redeemed .............................. (25,594) (415,323)
---------------------------
Net increase ................................. 58,768 $ 907,713
===========================
- -------------------------------------------------------------------------------
Investor B Shares for the Period Dollar
October 2, 2006* to November 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................. 16,659 $ 230,574
Shares redeemed .............................. (5) (70)
---------------------------
Net increase ................................. 16,654 $ 230,504
===========================
* Commencement of operations.
20 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Notes to Financial Statements (concluded)
- -------------------------------------------------------------------------------
Investor B1 Shares for the Year Dollar
Ended November 30, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................. 53,667 $ 841,895
Shares issued to shareholders in reinvestment
of dividends ............................... 4,743 77,065
---------------------------
Total issued ................................. 58,410 918,960
Shares redeemed and automatic conversion
of shares .................................. (556,886) (8,780,653)
---------------------------
Net decrease ................................. (498,476) $ (7,861,693)
===========================
- -------------------------------------------------------------------------------
Investor B1 Shares for the Year Dollar
Ended November 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................. 181,883 $ 2,354,000
Shares issued to shareholders in reinvestment
of dividends ............................... 20,090 247,890
---------------------------
Total issued ................................. 201,973 2,601,890
---------------------------
Automatic conversion of shares ............... (215,375) (2,677,349)
Shares redeemed .............................. (1,095,896) (14,568,848)
---------------------------
Total redeemed ............................... (1,311,271) (17,246,197)
---------------------------
Net decrease ................................. (1,109,298) $(14,644,307)
===========================
- -------------------------------------------------------------------------------
Investor C Shares for the Year Dollar
Ended November 30, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................. 231,988 $ 3,690,344
Shares issued to shareholders in reinvestment
of dividends ............................... 942 15,652
---------------------------
Total issued ................................. 232,930 3,705,996
Shares redeemed .............................. (46,897) (771,783)
---------------------------
Net increase ................................. 186,033 $ 2,934,213
===========================
- -------------------------------------------------------------------------------
Investor C Shares for the Period Dollar
October 2, 2006* to November 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................. 20,675 $ 283,796
Shares redeemed .............................. (5) (70)
---------------------------
Net increase ................................. 20,670 $ 283,726
===========================
* Commencement of operations.
- -------------------------------------------------------------------------------
Investor C1 Shares for the Year Dollar
Ended November 30, 2007 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................. 53,963 $ 856,314
Shares issued to shareholders in reinvestment
of dividends ............................... 6,160 99,484
---------------------------
Total issued ................................. 60,123 955,798
Shares redeemed .............................. (274,092) (4,252,049)
---------------------------
Net decrease ................................. (213,969) $ (3,296,251)
===========================
- -------------------------------------------------------------------------------
Investor C1 Shares for the Year Dollar
Ended November 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................................. 168,923 $ 2,139,280
Shares issued to shareholders in reinvestment
of dividends ............................... 13,384 163,401
---------------------------
Total issued ................................. 182,307 2,302,681
Shares redeemed .............................. (278,090) (3,493,584)
---------------------------
Net decrease ................................. (95,783) $ (1,190,903)
===========================
5. Short-Term Borrowings:
The Fund, along with certain other funds managed by the Manager and its
affiliates, is party to a $500,000,000 credit agreement with a group of lenders.
The Fund may borrow under the credit agreement to fund shareholder redemptions
and for other lawful purposes other than for leverage. The Fund may borrow up to
the maximum amount allowable under the Fund's current prospectus and statement
of additional information, subject to various other legal, regulatory or
contractual limits. The Fund pays a commitment fee of .06% per annum based on
the Fund's pro rata share of the unused portion of the credit agreement. Amounts
borrowed under the credit agreement bear interest at a rate equal to, at each
Fund's election, the federal funds rate plus .35% or a base rate as defined in
the credit agreement. The Fund did not borrow under the credit agreement during
the year ended November 30, 2007. On November 21, 2007, the credit agreement was
renewed for one year under substantially the same terms.
6. Distributions to Shareholders:
The tax character of distributions paid during the fiscal years ended November
30, 2007 and November 30, 2006 was as follows:
- -------------------------------------------------------------------------------
11/30/2007 11/30/2006
- -------------------------------------------------------------------------------
Distributions paid from:
Ordinary income ............................ $ 2,087,526 $ 3,482,378
-----------------------------
Total taxable distributions .................. $ 2,087,526 $ 3,482,378
=============================
As of November 30, 2007, the components of accumulated earnings on a tax basis
were as follows:
- -------------------------------------------------------------------------------
Undistributed ordinary income -- net ...................... $ 1,301,225
Undistributed long-term capital gains -- net .............. 13,962,297
-----------
Total undistributed earnings -- net ....................... 15,263,522
Capital loss carryforward ................................. --
Unrealized gains -- net ................................... 72,675,109
-----------
Total accumulated earnings -- net ......................... $87,938,631
===========
7. Subsequent Event:
The Fund paid an ordinary income dividend in the amount of $.151973 per
Institutional Share, $.140420 per Investor A Share, $.100187 per Investor B
Share, $.114491 per Investor B1 Share, $.106830 per Investor C Share and
$.112939 per Investor C1 Share on December 21, 2007 to shareholders of record on
December 19, 2007. In addition, the Fund paid a long-term capital gain
distribution in the amount of $1.370779 per Institutional Share, $1.370779 per
Investor A Share, $1.370779 per Investor B Share, $1.370779 per Investor B1
Share, $1.370779 per Investor C Share and $1.370779 per Investor C1 Share on
December 21, 2007 to shareholders of record on December 19, 2007.
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 21
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
BlackRock Utilities and Telecommunications Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of BlackRock Utilities and Telecommunications Fund,
Inc. (the "Fund") as of November 30, 2007, and the related statement of
operations for the year then ended, the statements of changes in 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. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits 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 and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
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, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of November 30, 2007, by correspondence with the
custodian. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
BlackRock Utilities and Telecommunications Fund, Inc. as of November 30, 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 its 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.
Deloitte & Touche LLP
Princeton, New Jersey
January 23, 2008
22 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Proxy Results
During the six-month period ended November 30, 2007, the shareholders of
BlackRock Utilities and Telecommunications Fund, Inc. voted on the following
proposal, which was approved at a special shareholders' meeting on September 7,
2007. This proposal was a part of the reorganization of the Fund's Board of
Directors that took effect on November 1, 2007. A description of the proposal
and number of shares voted are as follows:
- -----------------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- -----------------------------------------------------------------------------------------------------------
To elect the Fund's Board of Directors: James H. Bodurtha 9,240,222 126,642
Bruce R. Bond 9,240,133 126,731
Donald W. Burton 9,240,133 126,731
Richard S. Davis 9,239,941 126,923
Stuart E. Eizenstat 9,235,792 131,072
Laurence D. Fink 9,239,852 127,012
Kenneth A. Froot 9,240,133 126,731
Henry Gabbay 9,239,061 127,803
Robert M. Hernandez 9,239,005 127,859
John F. O'Brien 9,239,005 127,859
Roberta Cooper Ramo 9,236,920 129,944
Jean Margo Reid 9,240,222 126,642
David H. Walsh 9,236,831 130,033
Fred G. Weiss 9,239,941 126,923
Richard R. West 9,239,094 127,770
- -----------------------------------------------------------------------------------------------------------
Important Tax Information
The following information is provided with respect to the quarterly
distributions paid by BlackRock Utilities and Telecommunications Fund, Inc.
during the fiscal year ended November 30, 2007:
- --------------------------------------------------------------------------------
Qualified Dividends
Dividend Received
Income for Deduction for
Record Date Individuals Corporations
- --------------------------------------------------------------------------------
December 18, 2006 ............................. 100% 90.35%
April 18, 2007 to October 22, 2007 ............ 100% 89.18%
- --------------------------------------------------------------------------------
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 23
Officers and Directors
Number of
BlackRock-
Advised Funds
Position(s) Length of and Portfolios
Name, Address Held with Time Currently Public
and Year of Birth Fund Served Principal Occupation(s) During Past Five Years Overseen Directorships
====================================================================================================================================
Non-Interested Directors*
- ------------------------------------------------------------------------------------------------------------------------------------
James H. Bodurtha Director 2007 to Director, The China Business Group, Inc. since 37 Funds None
40 East 52nd Street present 1996 and Executive Vice President thereof from 99 Portfolios
New York, NY 10022 1996 to 2003; Chairman of the Board, Berkshire
1944 Holding Corporation since 1980; Partner,
Squire, Sanders & Dempsey (a law firm) from
1980 to 1993.
- ------------------------------------------------------------------------------------------------------------------------------------
Bruce R. Bond Director 2007 to Trustee and member of the Governance 37 Funds Avaya, Inc. from
40 East 52nd Street present Committee, State Street Research mutual funds 99 Portfolios 1983 to present
New York, NY 10022 ("SSR Funds") from 1997 to 2005.
1946
- ------------------------------------------------------------------------------------------------------------------------------------
Donald W. Burton Director 2007 to Managing General Partner of The Burton 37 Funds Knology, Inc.
40 East 52nd Street present Partnership, Limited Partnership (an 99 Portfolios (telecommunica-
New York, NY 10022 investment partnership) since 1979; Managing tions); Capital
1944 General Partner of The South Atlantic Venture Southwest
Funds since 1983; Member of the Investment (financial)
Advisory Council of the Florida State Board of
Administration since 2001.
- ------------------------------------------------------------------------------------------------------------------------------------
Honorable Director 2007 to Partner and Head of International Practice, 37 Funds UPS Corporation,
Stuart E. Eizenstat present Covington and Burling (law firm) from 2001 to 99 Portfolios 2005 to present
40 East 52nd Street the present; Deputy Secretary of the Treasury
New York, NY 10022 from 1999 to 2001; Under Secretary of State
1943 for Economic, Business and Agricultural
Affairs from 1997 to 1999; Under Secretary of
Commerce for International Trade from 1996 to
1997; U.S. Ambassador to the European Union
from 1993 to 1996.
- ------------------------------------------------------------------------------------------------------------------------------------
Kenneth A. Froot Director 2007 to Professor, Harvard University since 1992; 37 Funds None
40 East 52nd Street present Professor, Massachusetts Institute of 99 Portfolios
New York, NY 10022 Technology from 1986 to 1992.
1957
- ------------------------------------------------------------------------------------------------------------------------------------
Robert M. Hernandez Director 2007 to USX Corporation, (a diversified company 37 Funds ACE Limited
40 East 52nd Street Chairman present principally engaged in energy and steel 99 Portfolios (insurance
New York, NY 10022 of the Board businesses); Director from 1991 to 2001; Vice company) from 1995
1944 of Directors Chairman and Chief Financial Officer from 1994 to present;
and Member to 2001; Executive Vice President -- Eastman Chemical
of the Audit Accounting and Finance and Chief Financial Company from 2002
Committee Officer from 1991 to 1994. to present; RTI
International
Metals, Inc. from
1990 to present
- ------------------------------------------------------------------------------------------------------------------------------------
John F. O'Brien Director 2007 to President and Chief Executive Officer of 37 Funds Cabot Corporation
40 East 52nd Street present Allmerica Financial Corporation (financial 99 Portfolios (chemicals); LKQ
New York, NY 10022 services holding company) from 1995 to 2002 Corporation (auto
1943 and Director from 1995 to 2003; President of parts
Allmerica Investment Management Co., Inc. manufacturing);
(investment adviser) from 1989 to 2002, TJX Companies,
Director from 1989 to 2002 and Chairman of the Inc. (retailer)
Board from 1989 to 1990; President, Chief
Executive Officer and Director of First
Allmerica Financial Life Insurance Company
from 1989 to 2002 and Director of various
other Allmerica Financial companies until
2002; Director from 1989 to 2006, Member of
the Governance Nominating Committee from 2004
to 2006, Member of the Compensation Committee
from 1989 to 2006 and Member of the Audit
Committee from 1990 to 2004 of ABIOMED;
Director, Member of the Governance and
Nomination Committee and Member of the Audit
Committee of Cabot Corporation since 1990;
Director and Member of the Audit Committee and
Compensation Committee of LKQ Corporation
since 2003; Lead Director of TJX Companies,
Inc. since 1996; Trustee of the Woods Hole
Oceanographic Institute since 2003; Director,
Ameresco, Inc. since 2006; Director, Boston
Lyric Opera since 2002.
------------------------------------------------------------------------------------------------------------
* Directors serve until their resignation, removal or death, or until December 31 of the year in which they
turn 72.
24 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Number of
BlackRock-
Advised Funds
Position(s) Length of and Portfolios
Name, Address Held with Time Currently Public
and Year of Birth Fund Served Principal Occupation(s) During Past Five Years Overseen Directorships
====================================================================================================================================
Non-Interested Directors* (concluded)
- ------------------------------------------------------------------------------------------------------------------------------------
Roberta Cooper Ramo Director 2007 to Shareholder, Modrall, Sperling, Roehl, Harris 37 Funds None
40 East 52nd Street present & Sisk, P.A. since 1993; President, American 99 Portfolios
New York, NY 10022 Bar Association from 1995 to 1996 and Member
1942 of the Board of Governors thereof from 1994 to
1997; Shareholder, Poole, Kelly and Ramo,
Attorneys at Law P.C. from 1977 to 1993;
Director of ECMC Group (service provider to
students, schools and lenders) since 2001;
Director, United New Mexico Bank (now Wells
Fargo) from 1983 to 1988; Director, First
National Bank of New Mexico (now Wells Fargo)
from 1975 to 1976; Vice President, American
Law Institute from 2004 to 2007 and President
elect thereof since 2007.
- ------------------------------------------------------------------------------------------------------------------------------------
Jean Margo Reid Director 2004 to Self-employed consultant since 2001; Counsel 37 Funds None
40 East 52nd Street present of Alliance Capital Management (investment 99 Portfolios
New York, NY 10022 adviser) in 2000; General Counsel, Director
1945 and Secretary of Sanford C. Bernstein & Co.,
Inc. (investment adviser/broker-dealer) from
1997 to 2000; Secretary, Sanford C. Bernstein
Fund, Inc. from 1994 to 2000; Director and
Secretary of SCB, Inc. since 1998; Director
and Secretary of SCB Partners, Inc. since
2000; Director of Covenant House from 2001 to
2004.
- ------------------------------------------------------------------------------------------------------------------------------------
David H. Walsh Director 2007 to Director, Ruckleshaus Institute and Haub 37 Funds None
40 East 52nd Street present School of Natural Resources at the University 99 Portfolios
New York, NY 10022 of Wyoming since 2006; Consultant with Putnam
1941 Investments from 1993 to 2003, and employed in
various capacities therewith from 1973 to
1992; Director, Massachusetts Audubon Society
from 1990 to 1997; Director, The National
Audubon Society from 1998 to 2005; Director,
The American Museum of Fly Fishing since 1997.
- ------------------------------------------------------------------------------------------------------------------------------------
Fred G. Weiss Director and 2007 to Managing Director of FGW Associates since 37 Funds Watson
40 East 52nd Street Chairman present 1997; Board member of certain 99 Portfolios Pharmaceutical
New York, NY 10022 of the Audit BlackRock-advised funds since 1998; Vice Inc.
1941 Committee President, Planning, Investment and (pharmaceutical
Development of Warner Lambert Co. from 1979 to company)
1997; Director of Michael J. Fox Foundation
for Parkinson's Research since 2000; Director,
Watson Pharmaceutical, Inc. (pharmaceutical
company) since 1999; Director of Osmotica
Holdings Corp. (a drug delivery technology
company) since 2003; Director of KIMC
Investments, Inc. dba MedVance Institute (a
chain of for-profit allied health training
schools) since 2003.
- ------------------------------------------------------------------------------------------------------------------------------------
Richard R. West Director and 1990 to Professor of Finance from 1984 to 1995, Dean 37 Funds Bowne & Co., Inc.
40 East 52nd Street Member present from 1984 to 1993 and since 1995 Dean Emeritus 99 Portfolios (financial
New York, NY 10022 of the Audit of New York University's Leonard N. Stern printers); Vornado
1938 Committee School of Business Administration. Realty Trust (real
estate company);
Alexander's, Inc.
(real estate
company)
------------------------------------------------------------------------------------------------------------
* Directors serve until their resignation, removal or death, or until December 31 of the year in which they
turn 72.
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 25
Number of
BlackRock-
Advised Funds
Position(s) Length of and Portfolios
Name, Address Held with Time Currently Public
and Year of Birth Fund Served Principal Occupation(s) During Past Five Years Overseen Directorships
====================================================================================================================================
Interested Directors*
- ------------------------------------------------------------------------------------------------------------------------------------
Richard S. Davis Director 2007 to Managing Director, BlackRock, Inc. since 2005; 184 Funds None
40 East 52nd Street present Chief Executive Officer, State Street Research 289 Portfolios
New York, NY 10022 & Management Company from 2000 to 2005;
1945 Chairman of the Board of Trustees, State
Street Research mutual funds ("SSR Funds")
from 2000 to 2005; Senior Vice President,
Metropolitan Life Insurance Company from 1999
to 2000; Chairman, SSR Realty from 2000 to
2004.
- ------------------------------------------------------------------------------------------------------------------------------------
Laurence D. Fink Director 2007 to Chairman and Chief Executive Officer of 37 Funds None
40 East 52nd Street present BlackRock, Inc. since its formation in 1998 99 Portfolios
New York, NY 10022 and of BlackRock, Inc.'s predecessor entities
1952 since 1988; Chairman of the Executive and
Management Committees; formerly, Managing
Director of the First Boston Corporation,
Member of its Management Committee, Co-head of
its Taxable Fixed Income Division and Head of
its Mortgage and Real Estate Products Group;
Chairman of the Board of several of
BlackRock's alternative investment vehicles;
Director of several of BlackRock's offshore
funds; Member of the Board of Trustees of New
York University, Chair of the Financial
Affairs Committee and a member of the
Executive Committee, the Ad Hoc Committee on
Board Governance, and the Committee on
Trustees; Co-Chairman of the NYU Hospitals
Center Board of Trustees, Chairman of the
Development/Trustee Stewardship Committee and
Chairman of the Finance Committee; Trustee of
The Boys' Club of New York.
- ------------------------------------------------------------------------------------------------------------------------------------
Henry Gabbay Director 2007 to Consultant, BlackRock since 2007; Managing 183 Funds None
40 East 52nd Street present Director, BlackRock, Inc. from 1989 to June, 288 Portfolios
New York, NY 10022 2007; Chief Administrative Officer, BlackRock
1947 Advisors, LLC from 1998 to 2007; President of
BlackRock Funds and BlackRock Bond Allocation
Target Shares from 2005 to 2007; Treasurer of
certain closed-end funds in the Fund complex
from 1989 to 2006.
------------------------------------------------------------------------------------------------------------
* Messrs. Davis, Fink and Gabbay are all "interested persons," as defined in the Investment Company Act, of
the Fund based on their positions with BlackRock, Inc. and its affiliates. Directors serve until their
resignation, removal or death, or until December 31 of the year in which they turn 72.
====================================================================================================================================
Advisory Board Member
- ------------------------------------------------------------------------------------------------------------------------------------
Joe Grills* Member 2007 to Member of the Committee of Investment of 37 Funds Kimco Realty
40 East 52nd Street of the present Employee Benefit Assets of the Association of 99 Portfolios Corporation
New York, NY 10022 Advisory Financial Professionals ("CIEBA") since 1986;
1935 Board Member of CIEBA's Executive Committee since
1988 and its Chairman from 1991 to 1992;
Assistant Treasurer of International Business
Machines Corporation ("IBM") and Chief
Investment Officer of IBM Retirement Funds
from 1986 to 1993; Member of the Investment
Advisory Committee of the State of New York
Common Retirement Fund from 1989 to 2006;
Member of the Investment Advisory Committee of
the Howard Hughes Medical Institute from 1997
to 2000; Director, Duke University Management
Company from 1992 to 2004, Vice Chairman
thereof from 1998 to 2004, and Director
Emeritus thereof since 2004; Director, LaSalle
Street Fund from 1995 to 2001; Director, Kimco
Realty Corporation since 1997; Member of the
Investment Advisory Committee of the Virginia
Retirement System since 1998, Vice Chairman
thereof from 2002 to 2005, and Chairman
thereof since 2005; Director, Montpelier
Foundation since 1998, its Vice Chairman from
2000 to 2006, and Chairman, thereof, since
2006; Member of the Investment Committee of
the Woodberry Forest School since 2000; Member
of the Investment Committee of the National
Trust for Historic Preservation since 2000.
------------------------------------------------------------------------------------------------------------
* Joe Grills resigned from the Advisory Board of the Fund, effective December 31, 2007.
26 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Position(s) Length of
Name, Address Held with Time
and Year of Birth Fund Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers*
- ------------------------------------------------------------------------------------------------------------------------------------
Donald C. Burke Fund 2007 to Managing Director of BlackRock, Inc. since 2006; Formerly Managing Director of
40 East 52nd Street President and present Merrill Lynch Investment Managers, L.P. ("MLIM") and Fund Asset Management,
New York, NY 10022 Chief Executive L.P. ("FAM") in 2006; First Vice President thereof from 1997 to 2005;
1960 Officer Treasurer thereof from 1999 to 2006 and Vice President thereof from 1990 to
1997.
- ------------------------------------------------------------------------------------------------------------------------------------
Anne F. Ackerley Vice 2007 to Managing Director of BlackRock, Inc. since 2000 and First Vice President and
40 East 52nd Street President present Chief Operating Officer of Mergers and Acquisitions Group from 1997 to 2000;
New York, NY 10022 First Vice President and Chief Operating Officer of Public Finance Group
1962 thereof from 1995 to 1997; Formerly First Vice President of Emerging Markets
Fixed Income Research of Merrill Lynch & Co., Inc. from 1994 to 1995.
- ------------------------------------------------------------------------------------------------------------------------------------
Howard Surloff Secretary 2007 to Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at
40 East 52nd Street present BlackRock, Inc. since 2006; Formerly General Counsel (U.S.) of Goldman Sachs
New York, NY 10022 Asset Management, L.P. from 1993 to 2006.
1965
- ------------------------------------------------------------------------------------------------------------------------------------
Brian P. Kindelan Chief 2007 to Chief Compliance Officer of the Funds since 2007 and Anti-Money Laundering
40 East 52nd Street Compliance present Officer of BlackRock, Inc. since 2007; Managing Director and Senior Counsel
New York, NY 10022 Officer thereof since January 2005; Director and Senior Counsel of BlackRock Advisors,
1959 Inc. from 2001 to 2004 and Vice President and Senior Counsel thereof from 1998
to 2000; Senior Counsel of PNC Bank Corp. from 1995 to 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
Neal J. Andrews Chief 2007 to Managing Director of Administration and Operations Group of BlackRock, Inc.,
40 East 52nd Street Financial present since 2006; Formerly Senior Vice President and Line of Business Head of Fund
New York, NY 10022 Officer Accounting and Administration at PFPC Inc. from 1992 to 2006.
1966
- ------------------------------------------------------------------------------------------------------------------------------------
Jay M. Fife Treasurer 2007 to Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Formerly
40 East 52nd Street present Assistant Treasurer of the MLIM/FAM advised funds from 2005 to 2006; Director
New York, NY 10022 of MLIM Fund Services Group from 2001 to 2006.
1970
------------------------------------------------------------------------------------------------------------
* Officers of the Fund serve at the pleasure of the Board of Directors.
- ------------------------------------------------------------------------------------------------------------------------------------
Further information about the Fund's Officers and Directors is available in the Fund's Statement of
Additional Information, which can be obtained without charge by calling 1-800-441-7762.
- ------------------------------------------------------------------------------------------------------------------------------------
Custodian
JPMorgan Chase & Co.
Brooklyn, NY 11245
Transfer Agent
PFPC Inc.
Wilmington, DE 19809
Accounting Agent
State Street Bank and
Trust Company
Princeton, NJ 08540
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Princeton, NJ 08540
Legal Counsel
Willkie, Farr & Gallagher LLP
New York, NY 10019
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 27
BlackRock Fund Information
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their non-public personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal non-public information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to non-affiliated third parties any
non-public personal information about its Clients, except as permitted by law or
as is necessary to respond to regulatory requests or to service Client accounts.
These non-affiliated third parties are required to protect the confidentiality
and security of this information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to non-public
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the non-public
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
Availability of Additional Information
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site or shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment
advisers, banks or brokerages may offer this service.
Shareholders Who Hold Accounts Directly with BlackRock:
1) Access the BlackRock Web site at http://www.blackrock.com/edelivery
2) Select "eDelivery" under the "More Information" section
3) Log into your account
The Fund will mail only one copy of shareholder documents, including
prospectuses, annual and semi-annual reports and proxy statements, to
shareholders with multiple accounts at the same address. This practice is
commonly called "householding" and it is intended to reduce expenses and
eliminate duplicate mailings of shareholder documents. Mailings of your
shareholder documents may be householded indefinitely unless you instruct us
otherwise. If you do not want the mailing of these documents to be combined with
those for other members of your household, please contact the Fund at (800)
441-7762.
28 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
Availability of Additional Information (concluded)
Availability of Proxy Voting Policies and Procedures
The Fund has delegated proxy voting responsibilities to BlackRock and its
affiliates, subject to the general oversight of the Fund's Board of Directors. A
description of the policies and procedures that BlackRock and its affiliates use
to determine how to vote proxies relating to portfolio securities is available
without charge, upon request, on our Web site at www.blackrock.com, by calling
(800) 441-7762, or on the Web site of the Securities and Exchange Commission
(the "Commission") at http://www.sec.gov.
Availability of Proxy Voting Record
Information on how proxies relating to the Fund's voting securities were voted
(if any) by BlackRock during the most recent 12-month period ended June 30 is
available, upon request and without charge, on our Web site at
www.blackrock.com, by calling (800) 441-7762 or on the Web site of the
Commission at http://www.sec.gov.
Availability of Quarterly Portfolio Schedule
The Fund files its complete schedule of portfolio holdings for the first and
third quarters of its fiscal year with the Commission on Form N-Q. The Fund's
Forms N-Q are available on the Commission's Web site at http://www.sec.gov and
may be reviewed and copied at the Commission's Public Reference Room in
Washington, D.C. Information regarding the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. The Fund's Forms N-Q may also be
obtained upon request, without charge, by calling (800) 441-7762.
Shareholder Privileges
Account Information
Call us at (800) 441-7762 8:00 AM - 6:00 PM EST to get information about your
account balances, recent transactions and share prices. You can also reach us on
the Web at www.blackrock.com/funds.
Automatic Investment Plans
Investor Class shareholders who want to invest regularly can arrange to have $50
or more automatically deducted from their checking or savings account and
invested in any of the BlackRock funds.
Systematic Withdrawal Plans
Investor Class shareholders can establish a systematic withdrawal plan and
receive periodic payments of $50 or more from their BlackRock funds, as long as
their account is at least $10,000.
Retirement Plans
Shareholders may make investments in conjunction with Traditional, Rollover,
Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.
BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007 29
A World-Class Mutual Fund Family
BlackRock offers a diverse lineup of open-end mutual funds crossing all
investment styles and managed by experts in equity, fixed income and tax-exempt
investing.
Equity Funds
BlackRock All-Cap Global Resources Portfolio
BlackRock Aurora Portfolio
BlackRock Asset Allocation Portfolio+
BlackRock Balanced Capital Fund+
BlackRock Basic Value Fund
BlackRock Capital Appreciation Portfolio
BlackRock Developing Capital Markets Fund
BlackRock Equity Dividend Fund
BlackRock EuroFund
BlackRock Focus Growth Fund
BlackRock Focus Value Fund
BlackRock Fundamental Growth Fund
BlackRock Global Allocation Fund+
BlackRock Global Dynamic Equity Fund
BlackRock Global Financial Services Fund
BlackRock Global Growth Fund
BlackRock Global Opportunities Portfolio
BlackRock Global Resources Portfolio
BlackRock Global Science & Technology Opportunities Portfolio
BlackRock Global SmallCap Fund
BlackRock Healthcare Fund
BlackRock Health Sciences Opportunities Portfolio*
BlackRock Index Equity Portfolio*
BlackRock International Fund
BlackRock International Index Fund
BlackRock International Opportunities Portfolio*
BlackRock International Value Fund
BlackRock Large Cap Core Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
BlackRock Latin America Fund
BlackRock Mid-Cap Growth Equity Portfolio
BlackRock Mid-Cap Value Equity Portfolio
BlackRock Mid Cap Value Opportunities Fund
BlackRock Natural Resources Trust
BlackRock Pacific Fund
BlackRock Small Cap Core Equity Portfolio
BlackRock Small Cap Growth Equity Portfolio
BlackRock Small Cap Growth Fund II
BlackRock Small Cap Index Fund
BlackRock Small Cap Value Equity Portfolio*
BlackRock Small/Mid-Cap Growth Portfolio
BlackRock S&P 500 Index Fund
BlackRock Technology Fund
BlackRock U.S. Opportunities Portfolio
BlackRock Utilities and Telecommunications Fund
BlackRock Value Opportunities Fund
Fixed Income Funds
BlackRock Commodity Strategies Fund
BlackRock Enhanced Income Portfolio
BlackRock GNMA Portfolio
BlackRock Government Income Portfolio
BlackRock High Income Fund
BlackRock High Yield Bond Portfolio
BlackRock Inflation Protected Bond Portfolio
BlackRock Intermediate Bond Portfolio II
BlackRock Intermediate Government Bond Portfolio
BlackRock International Bond Portfolio
BlackRock Low Duration Bond Portfolio
BlackRock Managed Income Portfolio
BlackRock Short-Term Bond Fund
BlackRock Total Return Fund
BlackRock Total Return Portfolio II
BlackRock World Income Fund
Municipal Bond Funds
BlackRock AMT-Free Municipal Bond Portfolio
BlackRock California Insured Municipal Bond Fund
BlackRock Delaware Municipal Bond Portfolio
BlackRock Florida Municipal Bond Fund
BlackRock High Yield Municipal Fund
BlackRock Intermediate Municipal Fund
BlackRock Kentucky Municipal Bond Portfolio
BlackRock Municipal Insured Fund
BlackRock National Municipal Fund
BlackRock New Jersey Municipal Bond Fund
BlackRock New York Municipal Bond Fund
BlackRock Ohio Municipal Bond Portfolio
BlackRock Pennsylvania Municipal Bond Fund
BlackRock Short-Term Municipal Fund
Target Risk & Target Date Funds
BlackRock Prepared Portfolios
Conservative Prepared Portfolio
Moderate Prepared Portfolio
Growth Prepared Portfolio
Aggressive Growth Prepared Portfolio
BlackRock Lifecycle Prepared Portfolios
Prepared Portfolio 2010
Prepared Portfolio 2015
Prepared Portfolio 2020
Prepared Portfolio 2025
Prepared Portfolio 2030
Prepared Portfolio 2035
Prepared Portfolio 2040
Prepared Portfolio 2045
Prepared Portfolio 2050
* See the prospectus for information on specific limitations on investments
in the fund.
+ Mixed asset fund.
BlackRock mutual funds are distributed by BlackRock Distributors, Inc. and
certain funds are also distributed by FAM Distributors, Inc. You should consider
the investment objectives, risks, charges and expenses of the funds under
consideration carefully before investing. Each fund's prospectus contains this
and other information and is available at www.blackrock.com or by calling
800-882-0052 or from your financial advisor. The prospectus should be read
carefully before investing.
30 BLACKROCK UTILITIES AND TELECOMMUNICATIONS FUND, INC. NOVEMBER 30, 2007
This report is transmitted to shareholders only. It is not authorized for use as
an offer of sale or a solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past performance
results shown in this report should not be considered a representation of future
performance. Investment returns and principal value of shares will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject to change.
BlackRock Utilities and
Telecommunications Fund, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
BLACKROCK
#11693-11/07
Item 2 - Code of Ethics - The registrant (or the "Fund") has adopted a code
of ethics, as of the end of the period covered by this report,
applicable to the registrant's principal executive officer,
principal financial officer and principal accounting officer, or
persons performing similar functions. During the period covered by
this report, there have been no amendments to or waivers granted
under the code of ethics. A copy of the code of ethics is available
without charge at www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors or trustees, as applicable (the "board of directors") has
determined that (i) the registrant has the following audit committee
financial experts serving on its audit committee and (ii) each audit
committee financial expert is independent:
Ronald W. Forbes (term ended, effective November 1, 2007)
Robert M. Hernandez (term began, effective November 1, 2007)
Fred G. Weiss (term began, effective November 1, 2007)
Richard R. West
Edward D. Zinbarg (retired as of December 31, 2006)
Under applicable securities laws, a person determined to be an audit
committee financial expert will not be deemed an "expert" for any
purpose, including without limitation for the purposes of Section 11
of the Securities Act of 1933, as a result of being designated or
identified as an audit committee financial expert. The designation
or identification as an audit committee financial expert does not
impose on such person any duties, obligations, or liabilities
greater than the duties, obligations, and liabilities imposed on
such person as a member of the audit committee and board of
directors in the absence of such designation or identification.
Item 4 - Principal Accountant Fees and Services
- ----------------------------------------------------------------------------------------------------------------------------------
(a) Audit Fees (b) Audit-Related Fees(1) (c) Tax Fees(2) (d) All Other Fees(3)
- ----------------------------------------------------------------------------------------------------------------------------------
Current Previous Current Previous Current Previous Current Previous
Fiscal Year Fiscal Fiscal Year Fiscal Fiscal Year Fiscal Fiscal Year Fiscal
Entity Name End Year End End Year End End Year End End Year End
- ----------------------------------------------------------------------------------------------------------------------------------
BlackRock Utilities
and
Telecommunications
Fund, Inc. $31,500 $31,500 $0 $0 $6,100 $6,000 $1,042 $0
- ----------------------------------------------------------------------------------------------------------------------------------
1 The nature of the services include assurance and related services
reasonably related to the performance of the audit of financial statements
not included in Audit Fees.
2 The nature of the services include tax compliance, tax advice and tax
planning.
3 The nature of the services include a review of compliance procedures and
attestation thereto.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to
the registrant's affiliated service providers that relate directly
to the operations and the financial reporting of the registrant.
Certain of these non-audit services that the Committee believes are
a) consistent with the SEC's auditor independence rules and b)
routine and recurring services that will not impair the independence
of the independent accountants may be approved by the Committee
without consideration on a specific case-by-case basis ("general
pre-approval"). However, such services will only be deemed
pre-approved provided that any individual project does not exceed
$5,000 attributable to the registrant or $50,000 for all of the
registrants the Committee oversees. Any proposed services exceeding
the pre-approved cost levels will require specific pre-approval by
the Committee, as will any other services not subject to general
pre-approval (e.g., unanticipated but permissible services). The
Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board
meeting.
(e)(2) None of the services described in each of Items 4(b) through
(d) were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) Affiliates' Aggregate Non-Audit Fees:
--------------------------------------------------------------------
Current Fiscal Previous Fiscal
Entity Name Year End Year End
--------------------------------------------------------------------
BlackRock Utilities and
Telecommunications Fund, Inc. $291,642 $3,144,117
--------------------------------------------------------------------
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any non-affiliated
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by the registrant's 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.
Regulation S-X Rule 2-01(c)(7)(ii) - $284,500, 0%
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Schedule of Investments - The registrant's Schedule of Investments
is included as part of the Report to Stockholders 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 - The
registrant's Nominating and Governance Committee will consider
nominees to the Board recommended by shareholders when a vacancy
becomes available. Shareholders who wish to recommend a nominee
should send nominations which include biographical information and
set forth the qualifications of the proposed nominee to the
registrant's Secretary. There have been no material changes to these
procedures.
Item 11 - Controls and Procedures
11(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")) are effective as of a date within 90 days of the
filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule
15d-15(b) under the Securities and Exchange Act of 1934, as amended.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act)
that occurred during the second fiscal quarter of the period covered
by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
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.
BlackRock Utilities and Telecommunications Fund, Inc.
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer (principal executive officer) of
BlackRock Utilities and Telecommunications Fund, Inc.
Date: January 16, 2008
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: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Executive Officer (principal executive officer) of
BlackRock Utilities and Telecommunications Fund, Inc.
Date: January 16, 2008
By: /s/ Neal J. Andrews
-------------------
Neal J. Andrews,
Chief Financial Officer (principal financial officer) of
BlackRock Utilities and Telecommunications Fund, Inc.
Date: January 16, 2008