UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANIES
Investment Company Act file number 811-09243
The Gabelli Utility Trust
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
Rye, New York 10580-1422
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
(Name and address of agent for service)
registrant’s telephone number, including area code: 1-800-422-3554
Date of
fiscal year end: December 31
Date of
reporting period: June 30, 2010
Form N-CSR is to be used by management investment companies to file reports with the Commission not
later than 10 days after the transmission to stockholders of any report that is required to be
transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR
270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission
will make this information public. A registrant is not required to respond to the collection of
information contained in Form N-CSR unless the Form displays a currently valid Office of Management
and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the burden to Secretary,
Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed
this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
The Gabelli Utility Trust
Semi-Annual Report
June 30, 2010
June 30, 2010
Mario J. Gabelli, CFA
To Our Shareholders,
The Gabelli Utility Trust’s (the “Fund”) net asset value (“NAV”) total return was (5.6)%
during the semi-annual period ended June 30, 2010, compared with returns of (7.1)% and (7.8)% for
the Standard & Poor’s (“S&P”) 500 Utilities Index and the Lipper Utility Fund Average,
respectively. The total return for the Fund’s publicly traded shares was (7.8)% during first half
of the year. For the one year period ended June 30, 2010, the Fund’s NAV total return was 17.4% and
the total return for the Fund’s publicly traded shares was 24.9%, compared with returns of 5.7% and
6.5% for the S&P 500 Utilities Index and the Lipper Utility Fund Average, respectively. On June 30,
2010, the Fund’s NAV per share was $4.57, while the price of the publicly traded shares closed at
$7.94 on the NYSE.
| Enclosed are the financial statements and the investment portfolio as of June 30, 2010. |
Comparative Results
Average Annual Returns through June 30, 2010 (a) (Unaudited)
| Since | ||||||||||||||||||||||||||||
| Year to | Inception | |||||||||||||||||||||||||||
| Quarter | Date | 1 Year | 3 Year | 5 Year | 10 Year | (07/09/99) | ||||||||||||||||||||||
Gabelli Utility Trust |
||||||||||||||||||||||||||||
NAV Total Return (b) |
(7.31 | )% | (5.58 | )% | 17.41 | % | (6.46 | )% | 1.78 | % | 5.89 | % | 6.08 | % | ||||||||||||||
Investment Total Return (c) |
5.17 | (7.78 | ) | 24.86 | 3.29 | 4.80 | 9.14 | 9.44 | ||||||||||||||||||||
S&P 500 Index |
(11.41 | ) | (6.64 | ) | 14.43 | (9.80 | ) | (0.79 | ) | (1.59 | ) | (0.96 | ) | |||||||||||||||
S&P 500 Utilities Index |
(3.74 | ) | (7.14 | ) | 5.73 | (6.81 | ) | 1.56 | 2.78 | 2.69 | ||||||||||||||||||
Lipper Utility Fund Average |
(6.03 | ) | (7.79 | ) | 6.47 | (8.70 | ) | 2.09 | 2.10 | 2.86 | ||||||||||||||||||
| (a) | Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. When shares are sold, they may be worth more or less than their original cost. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com for performance information as of the most recent month end. Performance returns for periods of less than one year are not annualized. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The S&P 500 Index is an unmanaged indicator of stock market performance. The S&P 500 Utilities Index is an unmanaged indicator of electric and gas utility stock performance. The Lipper Utility Fund Average reflects the average performance of open-end mutual funds classified in this particular category. Dividends are considered reinvested. You cannot invest directly in an index. | |
| (b) | Total returns and average annual returns reflect changes in the NAV per share, reinvestment of distributions at NAV on the ex-dividend date, and adjustments for rights offerings and are net of expenses. Since inception return is based on an initial NAV of $7.50. | |
| (c) | Total returns and average annual returns reflect changes in closing market values on the New York Stock Exchange, reinvestment of distributions, and adjustments for rights offerings. Since inception return is based on an initial offering price of $7.50. |
We have separated the portfolio manager’s commentary from the financial statements and investment
portfolio due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We
have done this to ensure that the content of the portfolio manager’s commentary is unrestricted.
The financial statements and investment portfolio are mailed separately from the commentary. Both
the commentary and the financial statements, including the portfolio of investments, will be
available on our website at www.gabelli.com/funds.
THE GABELLI UTILITY TRUST
Summary of Portfolio Holdings (Unaudited)
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of total investments as of June 30,
2010:
Energy and Utilities: Electric Integrated |
49.2 | % | ||
Energy and Utilities: Natural Gas Integrated |
8.8 | % | ||
Energy and Utilities: |
||||
Electric Transmission and Distribution |
8.2 | % | ||
Energy and Utilities: Natural Gas Utilities |
8.1 | % | ||
Telecommunications |
4.4 | % | ||
Cable and Satellite |
4.0 | % | ||
Energy and Utilities: Global Utilities |
3.7 | % | ||
Energy and Utilities: Water |
3.3 | % | ||
Wireless Communications |
2.3 | % | ||
Energy and Utilities: Merchant Energy |
1.6 | % | ||
Energy and Utilities: Natural Resources |
1.3 | % | ||
Diversified Industrial |
1.3 | % | ||
Entertainment |
0.9 | % | ||
Communications Equipment |
0.6 | % | ||
Independent Power Producers
and Energy Traders |
0.4 | % | ||
U.S. Government Obligations |
0.4 | % | ||
Energy and Utilities: Services |
0.4 | % | ||
Aerospace |
0.3 | % | ||
Transportation |
0.3 | % | ||
Energy and Utilities: Alternative Energy |
0.2 | % | ||
Environmental Services |
0.1 | % | ||
Real Estate |
0.1 | % | ||
Equipment and Supplies |
0.1 | % | ||
Investment Companies |
0.0 | % | ||
Agriculture |
0.0 | % | ||
Publishing |
0.0 | % | ||
| 100.0 | % | |||
The Fund files a complete schedule of portfolio holdings with the Securities and Exchange
Commission (the “SEC”) for the first and third quarters of each fiscal year on Form N-Q, the last
of which was filed for the quarter ended March 31, 2010. Shareholders may obtain this information
at www.gabelli.com or by calling the Fund at 800-GABELLI (800-422-3554). The Fund’s Form N-Q is
available on the SEC’s website at www.sec.gov and may also be reviewed and copied at the SEC’s
Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room
may be obtained by calling 1-800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the twelve months ended
June 30th, no later than August 31st of each year. A description of the Fund’s proxy voting
policies, procedures, and how the Fund voted proxies relating to portfolio securities is available
without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to The
Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC’s website at
www.sec.gov.
Shareholder Meeting – May 17, 2010 – Final Results
The Fund’s Annual Meeting of Shareholders was held on May 17, 2010 at the Greenwich Library in
Greenwich, Connecticut. At that meeting, common and preferred shareholders, voting together as a
single class, elected Mario J. Gabelli, Thomas E. Bratter, and Vincent D. Enright as Trustees of
the Fund. A total of 24,610,291 votes, 24,505,604 votes, and 24,556,979 votes were cast in favor of
each Trustee and a total of 717,774 votes, 822,461 votes, and 771,086 votes were withheld for each
Trustee, respectively.
Anthony J. Colavita, James P. Conn, Frank J. Fahrenkopf, Jr., John D. Gabelli, Robert J.
Morrissey, Anthony R. Pustorino, and Salvatore J. Zizza continue to serve in their capacities as
Trustees of the Fund.
We thank you for your participation and appreciate your continued support.
2
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS
June 30, 2010 (Unaudited)
SCHEDULE OF INVESTMENTS
June 30, 2010 (Unaudited)
| Market | ||||||||||||
| Shares | Cost | Value | ||||||||||
COMMON STOCKS — 98.5% |
||||||||||||
ENERGY AND UTILITIES — 85.6% |
||||||||||||
Energy and Utilities: Alternative Energy — 0.2% |
||||||||||||
| 13,000 | Ormat Industries Ltd. |
$ | 177,043 | $ | 96,641 | |||||||
| 11,000 | Ormat Technologies Inc. |
234,175 | 311,190 | |||||||||
| 8,100 | Renegy Holdings Inc.† |
57,108 | 4,172 | |||||||||
| 468,326 | 412,003 | |||||||||||
Energy and Utilities: Electric Integrated — 49.2% |
||||||||||||
| 210,000 | Allegheny Energy Inc. |
6,095,647 | 4,342,800 | |||||||||
| 23,000 | ALLETE Inc. |
728,776 | 787,520 | |||||||||
| 75,000 | Alliant Energy Corp. |
1,824,382 | 2,380,500 | |||||||||
| 20,000 | Ameren Corp. |
691,088 | 475,400 | |||||||||
| 78,000 | American Electric Power Co. Inc. |
2,568,822 | 2,519,400 | |||||||||
| 10,000 | Avista Corp. |
199,636 | 195,300 | |||||||||
| 50,000 | Black Hills Corp. |
1,431,322 | 1,423,500 | |||||||||
| 26,000 | Central Vermont Public Service Corp. |
482,572 | 513,240 | |||||||||
| 27,000 | Cleco Corp. |
524,506 | 713,070 | |||||||||
| 125,000 | CMS Energy Corp. |
1,418,407 | 1,831,250 | |||||||||
| 160,000 | Constellation Energy Group Inc. |
6,078,680 | 5,160,000 | |||||||||
| 32,000 | Dominion Resources Inc. |
1,402,789 | 1,239,680 | |||||||||
| 136,000 | DPL Inc. |
2,860,019 | 3,250,400 | |||||||||
| 24,000 | DTE Energy Co. |
978,366 | 1,094,640 | |||||||||
| 140,000 | Duke Energy Corp. |
2,697,529 | 2,240,000 | |||||||||
| 86,000 | Edison International |
3,727,375 | 2,727,920 | |||||||||
| 185,000 | El Paso Electric Co.† |
3,347,782 | 3,579,750 | |||||||||
| 1,000 | Emera Inc. |
21,639 | 23,127 | |||||||||
| 3,000 | Entergy Corp. |
75,249 | 214,860 | |||||||||
| 45,000 | FirstEnergy Corp. |
1,847,638 | 1,585,350 | |||||||||
| 215,000 | Great Plains Energy Inc. |
5,675,890 | 3,659,300 | |||||||||
| 55,000 | Hawaiian Electric Industries Inc. |
1,335,289 | 1,252,900 | |||||||||
| 92,000 | Integrys Energy Group Inc. |
4,632,153 | 4,024,080 | |||||||||
| 60,000 | Maine & Maritimes Corp. |
1,894,682 | 2,658,600 | |||||||||
| 64,000 | MGE Energy Inc. |
1,887,100 | 2,306,560 | |||||||||
| 95,000 | NextEra Energy Inc. |
4,094,308 | 4,632,200 | |||||||||
| 48,000 | NiSource Inc. |
1,020,000 | 696,000 | |||||||||
| 110,000 | NorthWestern Corp. |
3,338,803 | 2,882,000 | |||||||||
| 35,000 | NV Energy Inc. |
312,248 | 413,350 | |||||||||
| 100,000 | OGE Energy Corp. |
2,406,346 | 3,656,000 | |||||||||
| 24,000 | Otter Tail Corp. |
637,145 | 463,920 | |||||||||
| 48,000 | PG&E Corp. |
1,280,160 | 1,972,800 | |||||||||
| 100,000 | PNM Resources Inc. |
1,119,082 | 1,118,000 | |||||||||
| 95,000 | Progress Energy Inc. |
4,127,681 | 3,725,900 | |||||||||
| 40,000 | Progress Energy Inc., CVO† |
20,800 | 6,000 | |||||||||
| 38,000 | Public Service Enterprise Group Inc. |
996,629 | 1,190,540 | |||||||||
| 60,500 | SCANA Corp. |
1,918,305 | 2,163,480 | |||||||||
| 104,000 | TECO Energy Inc. |
1,548,928 | 1,567,280 | |||||||||
| 25,000 | The Empire District Electric Co. |
515,057 | 469,250 | |||||||||
| 150,000 | UniSource Energy Corp. |
4,583,635 | 4,527,000 | |||||||||
| 18,000 | Unitil Corp. |
466,141 | 376,380 | |||||||||
| 47,000 | Vectren Corp. |
1,162,166 | 1,112,020 | |||||||||
| 260,000 | Westar Energy Inc. |
5,973,605 | 5,618,600 | |||||||||
| 90,000 | Wisconsin Energy Corp. |
3,273,387 | 4,566,600 | |||||||||
| 190,000 | Xcel Energy Inc. |
3,268,325 | 3,915,900 | |||||||||
| 96,490,089 | 95,272,367 | |||||||||||
Energy and Utilities: |
||||||||||||
Electric Transmission and Distribution — 8.2% |
||||||||||||
| 243 | Brookfield Infrastructure Partners LP |
5,103 | 3,856 | |||||||||
| 50,000 | CH Energy Group Inc. |
2,261,677 | 1,962,000 | |||||||||
| 60,000 | Consolidated Edison Inc. |
2,684,666 | 2,586,000 | |||||||||
| 135,000 | Northeast Utilities |
2,670,943 | 3,439,800 | |||||||||
| 190,000 | NSTAR |
4,627,451 | 6,650,000 | |||||||||
| 22,500 | Pepco Holdings Inc. |
449,918 | 352,800 | |||||||||
| 36,666 | UIL Holdings Corp. |
966,693 | 917,750 | |||||||||
| 13,666,451 | 15,912,206 | |||||||||||
Energy and Utilities: Global Utilities — 3.7% |
||||||||||||
| 1,500 | Areva SA |
613,197 | 627,323 | |||||||||
| 8,000 | Chubu Electric Power Co. Inc. |
189,551 | 199,242 | |||||||||
| 40,000 | Electric Power Development Co. Ltd. |
1,440,584 | 1,273,087 | |||||||||
| 45,000 | Endesa SA |
1,676,497 | 962,721 | |||||||||
| 300,000 | Enel SpA |
1,862,753 | 1,280,327 | |||||||||
| 300,000 | Hera SpA |
433,286 | 495,622 | |||||||||
| 8,000 | Hokkaido Electric Power Co. Inc. |
156,870 | 172,821 | |||||||||
| 8,000 | Hokuriku Electric Power Co. |
146,449 | 176,079 | |||||||||
| 3,500 | Huaneng Power International Inc., ADR |
135,552 | 82,355 | |||||||||
| 35,000 | Korea Electric Power Corp., ADR† |
565,727 | 450,800 | |||||||||
| 8,000 | Kyushu Electric Power Co. Inc. |
167,818 | 180,060 | |||||||||
| 2,000 | Niko Resources Ltd. |
113,769 | 186,013 | |||||||||
| 8,000 | Shikoku Electric Power Co. Inc. |
155,987 | 229,463 | |||||||||
| 8,000 | The Chugoku Electric Power Co. Inc. |
150,761 | 165,492 | |||||||||
| 8,000 | The Kansai Electric Power Co. Inc. |
158,472 | 195,532 | |||||||||
See accompanying notes to financial statements.
3
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS (Continued)
June 30, 2010 (Unaudited)
SCHEDULE OF INVESTMENTS (Continued)
June 30, 2010 (Unaudited)
| Market | ||||||||||||
| Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) |
||||||||||||
ENERGY AND UTILITIES (Continued) |
||||||||||||
Energy and Utilities: Global Utilities (Continued) |
||||||||||||
| 8,000 | The Tokyo Electric Power Co. Inc. |
$ | 191,450 | $ | 218,153 | |||||||
| 15,000 | Tohoku Electric Power Co. Inc. |
284,854 | 323,192 | |||||||||
| 8,443,577 | 7,218,282 | |||||||||||
Energy and Utilities: Merchant Energy — 1.6% |
||||||||||||
| 7,162 | Dynegy Inc.† |
175,000 | 27,574 | |||||||||
| 8,130 | Mirant Corp.† |
37,373 | 85,853 | |||||||||
| 300,000 | Mirant Corp., Escrow† (a) |
0 | 0 | |||||||||
| 320,000 | The AES Corp.† |
3,899,717 | 2,956,800 | |||||||||
| 4,112,090 | 3,070,227 | |||||||||||
Energy and Utilities: Natural Gas Integrated — 7.8% |
||||||||||||
| 185,000 | El Paso Corp. |
1,612,843 | 2,055,350 | |||||||||
| 1,000 | Energen Corp. |
66,090 | 44,330 | |||||||||
| 130,000 | National Fuel Gas Co. |
4,434,268 | 5,964,400 | |||||||||
| 100,000 | ONEOK Inc. |
2,674,346 | 4,325,000 | |||||||||
| 120,000 | Southern Union Co. |
2,059,886 | 2,623,200 | |||||||||
| 10,847,433 | 15,012,280 | |||||||||||
Energy and Utilities: Natural Gas Utilities — 8.1% |
||||||||||||
| 26,000 | AGL Resources Inc. |
643,173 | 931,320 | |||||||||
| 40,000 | Atmos Energy Corp. |
993,963 | 1,081,600 | |||||||||
| 26,000 | Chesapeake Utilities Corp. |
619,308 | 816,400 | |||||||||
| 12,500 | Corning Natural Gas Corp. |
196,189 | 274,063 | |||||||||
| 30,000 | Delta Natural Gas Co. Inc. |
502,057 | 877,500 | |||||||||
| 11,445 | GDF Suez |
387,206 | 328,895 | |||||||||
| 11,445 | GDF Suez, Strips |
0 | 14 | |||||||||
| 90,000 | Nicor Inc. |
3,094,353 | 3,645,000 | |||||||||
| 35,000 | Piedmont Natural Gas Co. Inc. |
553,257 | 885,500 | |||||||||
| 6,000 | RGC Resources Inc. |
128,344 | 186,000 | |||||||||
| 145,000 | Southwest Gas Corp. |
4,030,376 | 4,277,500 | |||||||||
| 120,000 | Spectra Energy Corp. |
3,280,847 | 2,408,400 | |||||||||
| 14,429,073 | 15,712,192 | |||||||||||
Energy and Utilities: Natural Resources — 1.3% |
||||||||||||
| 6,000 | Anadarko Petroleum Corp. |
265,940 | 216,540 | |||||||||
| 34,000 | Compania de
Minas Buenaventura SA, ADR |
381,326 | 1,306,960 | |||||||||
| 12,000 | Exxon Mobil Corp. |
673,693 | 684,840 | |||||||||
| 3,000 | Peabody Energy Corp. |
112,025 | 117,390 | |||||||||
| 4,000 | Royal Dutch Shell plc, Cl. A, ADR |
237,320 | 200,880 | |||||||||
| 1,670,304 | 2,526,610 | |||||||||||
Energy and Utilities: Services — 0.4% |
||||||||||||
| 40,000 | ABB Ltd., ADR |
436,920 | 691,200 | |||||||||
| 3,000 | Tenaris SA, ADR |
136,820 | 103,830 | |||||||||
| 573,740 | 795,030 | |||||||||||
Energy and Utilities: Water — 3.3% |
||||||||||||
| 14,000 | American States Water Co. |
312,701 | 463,960 | |||||||||
| 28,000 | American Water Works Co. Inc. |
602,000 | 576,800 | |||||||||
| 21,833 | Aqua America Inc. |
221,008 | 386,008 | |||||||||
| 24,750 | Artesian Resources Corp., Cl. A |
257,250 | 456,885 | |||||||||
| 20,000 | California Water Service Group |
555,152 | 714,000 | |||||||||
| 7,500 | Connecticut Water Service Inc. |
146,455 | 157,650 | |||||||||
| 51,333 | Middlesex Water Co. |
801,882 | 813,628 | |||||||||
| 33,000 | Pennichuck Corp. |
680,437 | 726,990 | |||||||||
| 80,000 | SJW Corp. |
1,482,532 | 1,875,200 | |||||||||
| 8,101 | Southwest Water Co. |
51,035 | 84,898 | |||||||||
| 9,000 | The York Water Co. |
108,269 | 127,800 | |||||||||
| 5,218,721 | 6,383,819 | |||||||||||
Diversified Industrial — 1.3% |
||||||||||||
| 2,200 | Alstom SA |
201,640 | 100,832 | |||||||||
| 1,000 | Bouygues SA |
43,572 | 39,040 | |||||||||
| 6,000 | Cooper Industries plc |
129,352 | 264,000 | |||||||||
| 140,000 | General Electric Co. |
2,798,299 | 2,018,800 | |||||||||
| 3,172,863 | 2,422,672 | |||||||||||
Equipment and Supplies — 0.1% |
||||||||||||
| 50,000 | Capstone Turbine Corp.† |
83,080 | 49,000 | |||||||||
| 2,000 | Mueller Industries Inc. |
88,019 | 49,200 | |||||||||
| 171,099 | 98,200 | |||||||||||
Environmental Services — 0.0% |
||||||||||||
| 3,000 | Suez Environnement Co. SA |
0 | 49,837 | |||||||||
Independent Power Producers and Energy Traders — 0.4% |
||||||||||||
| 40,000 | NRG Energy Inc.† |
966,620 | 848,400 | |||||||||
TOTAL ENERGY AND UTILITIES |
160,230,386 | 165,734,125 | ||||||||||
COMMUNICATIONS — 11.3% |
||||||||||||
Cable and Satellite — 4.0% |
||||||||||||
| 82,000 | Cablevision Systems Corp., Cl. A |
1,669,288 | 1,968,820 | |||||||||
| 5,000 | Cogeco Cable Inc. |
105,008 | 161,195 | |||||||||
| 20,000 | Cogeco Inc. |
389,461 | 563,618 | |||||||||
| 43,000 | DIRECTV, Cl. A† |
685,202 | 1,458,560 | |||||||||
See accompanying notes to financial statements.
4
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS (Continued)
June 30, 2010 (Unaudited)
SCHEDULE OF INVESTMENTS (Continued)
June 30, 2010 (Unaudited)
| Shares/ | Market | |||||||||||
| Units | Cost | Value | ||||||||||
COMMON STOCKS (Continued) |
||||||||||||
COMMUNICATIONS (Continued) |
||||||||||||
Cable and Satellite (Continued) |
||||||||||||
| 55,000 | DISH Network Corp., Cl. A |
$ | 1,115,262 | $ | 998,250 | |||||||
| 10,000 | EchoStar Corp., Cl. A† |
280,860 | 190,800 | |||||||||
| 35,000 | Liberty Global Inc., Cl. A† |
739,454 | 909,650 | |||||||||
| 20,000 | Liberty Global Inc., Cl. C† |
421,966 | 519,800 | |||||||||
| 8,000 | Rogers Communications Inc., Cl. B |
119,139 | 262,080 | |||||||||
| 12,000 | Time Warner Cable Inc. |
515,102 | 624,960 | |||||||||
| 6,040,742 | 7,657,733 | |||||||||||
Communications Equipment — 0.6% |
||||||||||||
| 260,000 | Furukawa Electric Co. Ltd. |
1,199,164 | 1,152,746 | |||||||||
| 2,000 | QUALCOMM Inc. |
76,300 | 65,680 | |||||||||
| 1,275,464 | 1,218,426 | |||||||||||
Telecommunications — 4.4% |
||||||||||||
| 45,000 | AT&T Inc. |
1,132,914 | 1,088,550 | |||||||||
| 2,000 | Belgacom SA |
69,509 | 63,258 | |||||||||
| 4,350 | Bell Aliant Regional Communications Income Fund (a) |
117,218 | 103,913 | |||||||||
| 16,000 | BT Group plc, ADR |
487,541 | 307,360 | |||||||||
| 210,000 | Cincinnati Bell Inc.† |
863,487 | 632,100 | |||||||||
| 2,000 | Comstar United Telesystems OJSC, GDR |
13,882 | 12,200 | |||||||||
| 56,000 | Deutsche Telekom AG, ADR |
939,497 | 653,520 | |||||||||
| 2,000 | France Telecom SA, ADR |
22,799 | 34,620 | |||||||||
| 200 | Hutchison Telecommunications Hong Kong Holdings Ltd. |
19 | 42 | |||||||||
| 500 | Mobistar SA |
41,057 | 26,680 | |||||||||
| 19,000 | Nippon Telegraph & Telephone Corp. |
883,158 | 782,220 | |||||||||
| 11,800 | Orascom Telecom Holding SAE, GDR |
74,146 | 51,920 | |||||||||
| 15,000 | Portugal Telecom SGPS SA |
210,165 | 150,044 | |||||||||
| 2,000 | PT Indosat Tbk |
1,061 | 1,092 | |||||||||
| 1,000 | Rostelecom, ADR |
52,268 | 21,600 | |||||||||
| 500 | Sistema JSFC, GDR (b) |
17,384 | 11,860 | |||||||||
| 1,200 | Tele2 AB, Cl. B |
14,604 | 18,037 | |||||||||
| 27,000 | Telekom Austria AG |
403,751 | 301,610 | |||||||||
| 40,000 | Touch America Holdings Inc.† (a) |
38,488 | 0 | |||||||||
| 110,000 | Verizon Communications Inc. |
4,091,829 | 3,082,200 | |||||||||
| 75,000 | VimpelCom Ltd., ADR† |
720,805 | 1,213,500 | |||||||||
| 2,000 | Windstream Corp. |
20,120 | 21,120 | |||||||||
| 10,215,702 | 8,577,446 | |||||||||||
Wireless Communications — 2.3% |
||||||||||||
| 600 | America Movil SAB de CV, Cl. L, ADR |
9,424 | 28,500 | |||||||||
| 2,000 | China Mobile Ltd., ADR |
33,988 | 98,820 | |||||||||
| 2,000 | China Unicom Hong Kong Ltd., ADR |
16,278 | 26,600 | |||||||||
| 171 | M1 Ltd. |
210 | 262 | |||||||||
| 13,500 | Millicom International Cellular SA |
976,373 | 1,094,445 | |||||||||
| 11,250 | Mobile TeleSystems OJSC, ADR |
175,074 | 215,550 | |||||||||
| 1,000 | NTT DoCoMo Inc. |
1,438,659 | 1,521,235 | |||||||||
| 600 | SK Telecom Co. Ltd., ADR |
12,374 | 8,838 | |||||||||
| 200 | SmarTone Telecommunications Holdings Ltd. |
207 | 208 | |||||||||
| 22,000 | Turkcell Iletisim Hizmetleri A/S, ADR |
378,706 | 285,560 | |||||||||
| 29,000 | United States Cellular Corp.† |
1,356,795 | 1,193,350 | |||||||||
| 4,398,088 | 4,473,368 | |||||||||||
TOTAL COMMUNICATIONS |
21,929,996 | 21,926,973 | ||||||||||
OTHER — 1.6% |
||||||||||||
Aerospace — 0.3% |
||||||||||||
| 75,000 | Rolls-Royce Group plc† |
555,067 | 630,323 | |||||||||
| 6,750,000 | Rolls-Royce Group plc, Cl. C† |
10,363 | 10,085 | |||||||||
| 565,430 | 640,408 | |||||||||||
Agriculture — 0.0% |
||||||||||||
| 3,000 | Cadiz Inc.† |
30,211 | 36,210 | |||||||||
Entertainment — 0.9% |
||||||||||||
| 8,000 | Time Warner Inc. |
210,076 | 231,280 | |||||||||
| 70,000 | Vivendi |
2,489,254 | 1,439,359 | |||||||||
| 2,699,330 | 1,670,639 | |||||||||||
Investment Companies — 0.0% |
||||||||||||
| 3,000 | Kinnevik
Investment AB, Cl. B |
41,537 | 48,440 | |||||||||
Publishing — 0.0% |
||||||||||||
| 8,000 | Idearc Inc.† (a) |
404 | 26 | |||||||||
Real Estate — 0.1% |
||||||||||||
| 6,075 | Brookfield Asset Management Inc., Cl. A |
65,353 | 137,417 | |||||||||
Transportation — 0.3% |
||||||||||||
| 20,000 | GATX Corp. |
569,753 | 533,600 | |||||||||
TOTAL OTHER |
3,972,018 | 3,066,740 | ||||||||||
TOTAL COMMON
STOCKS |
186,132,400 | 190,727,838 | ||||||||||
See accompanying notes to financial statements.
5
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS (Continued)
June 30, 2010 (Unaudited)
SCHEDULE OF INVESTMENTS (Continued)
June 30, 2010 (Unaudited)
| Market | ||||||||||||
| Shares | Cost | Value | ||||||||||
CONVERTIBLE PREFERRED STOCKS — 1.0% |
||||||||||||
ENERGY AND UTILITIES — 1.0% |
||||||||||||
Energy and Utilities: Natural Gas Integrated — 1.0% |
||||||||||||
| 2,000 | El Paso Corp.,
4.990% Cv. Pfd. (c) |
$ | 1,945,987 | $ | 1,982,400 | |||||||
WARRANTS — 0.0% |
||||||||||||
ENERGY AND UTILITIES — 0.0% |
||||||||||||
Energy and Utilities: Merchant Energy — 0.0% |
||||||||||||
| 26,107 | Mirant Corp., Ser. A,
expire 01/03/11† |
51,616 | 1,621 | |||||||||
COMMUNICATIONS — 0.0% |
||||||||||||
Wireless Communications — 0.0% |
||||||||||||
| 16,000 | Bharti Airtel Ltd.,
expire 09/19/13† (c) |
108,378 | 90,523 | |||||||||
TOTAL WARRANTS |
159,994 | 92,144 | ||||||||||
| Principal | ||||||||||||
| Amount | ||||||||||||
CONVERTIBLE CORPORATE BONDS — 0.1% |
||||||||||||
ENERGY AND UTILITIES — 0.1% |
||||||||||||
Environmental Services — 0.1% |
||||||||||||
| $ | 100,000 | Covanta Holding Corp., Cv.,
3.250%, 06/01/14 |
100,000 | 107,000 | ||||||||
U.S. GOVERNMENT OBLIGATIONS — 0.4% |
||||||||||||
U.S. TREASURY BILLS — 0.4% |
||||||||||||
| 801,000 | U.S. Treasury Bills,
0.127% to 0.162%††,
07/08/10 to 11/26/10 |
800,741 | 800,707 | |||||||||
TOTAL U.S. GOVERNMENT
OBLIGATIONS |
800,741 | 800,707 | ||||||||||
| TOTAL INVESTMENTS — 100.0% | $ | 189,139,122 | 193,710,089 | |||||||||
| Other Assets and Liabilities (Net) | 12,733 | |||||||||||
PREFERRED STOCK (1,154,188 preferred shares outstanding) |
(51,332,200 | ) | ||||||||||
NET ASSETS — COMMON SHARES (31,161,829 common shares outstanding) |
$ | 142,390,622 | ||||||||||
NET ASSET VALUE PER COMMON SHARE ($142,390,622 ÷ 31,161,829 shares outstanding) |
$ | 4.57 | ||||||||||
| (a) | Security fair valued under procedures established by the Board of Trustees. The procedures may include reviewing available financial information about the company and reviewing the valuation of comparable securities and other factors on a regular basis. At June 30, 2010, the market value of fair valued securities amounted to $103,939 or 0.05% of total investments. | |
| (b) | Security purchased pursuant to Regulation S under the Securities Act of 1933, which exempts from registration securities offered and sold outside of the United States. Such a security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. At June 30, 2010, the market value of the Regulation S security amounted to $11,860 or 0.01% of total investments, which was valued under methods approved by Board of Trustees as follows: |
| 06/30/10 | ||||||||||||||||
| Acquisition | Acquisition | Acquisition | Carrying Value | |||||||||||||
| Shares | Issuer | Date | Cost | Per Unit | ||||||||||||
| 500 | Sistema JSFC, GDR |
10/10/07 | $ | 17,384 | $ | 23.7200 | ||||||||||
| (c) | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2010, the market value of Rule 144A securities amounted to $2,072,923 or 1.07% of total investments. | |
| † | Non-income producing security. | |
| †† | Represents annualized yield at date of purchase. | |
| ADR | American Depositary Receipt | |
| CVO | Contingent Value Obligation | |
| GDR | Global Depositary Receipt |
See accompanying notes to financial statements.
6
THE GABELLI UTILITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2010 (Unaudited)
June 30, 2010 (Unaudited)
Assets: |
||||
Investments, at value (cost $189,139,122) |
$ | 193,710,089 | ||
Foreign currency, at value (cost $11,065) |
11,008 | |||
Dividends and interest receivable |
494,903 | |||
Deferred offering expense |
122,544 | |||
Prepaid expense |
3,754 | |||
Total Assets |
194,342,298 | |||
Liabilities: |
||||
Payable to custodian |
22,587 | |||
Distributions payable |
14,501 | |||
Payable for investment advisory fees |
118,906 | |||
Payable for payroll expenses |
26,915 | |||
Payable for accounting fees |
7,500 | |||
Payable for shareholder communications expenses |
180,008 | |||
Payable for auction agent fees |
142,993 | |||
Payable for legal and audit fees |
31,900 | |||
Unrealized depreciation on swap contracts |
12,484 | |||
Other accrued expenses |
61,682 | |||
Total Liabilities |
619,476 | |||
Preferred Shares: |
||||
Series A Cumulative Preferred Shares (5.625%, $25
liquidation value, $0.001 par value 1,200,000 shares
authorized with 1,153,288 shares issued
and outstanding) |
28,832,200 | |||
Series B Cumulative Preferred Shares (Auction Market,
$25,000 liquidation value, $0.001 par value, 1,000
shares authorized with 900 shares issued
and outstanding) |
22,500,000 | |||
Total Preferred Shares |
51,332,200 | |||
Net Assets Attributable to Common Shareholders |
$ | 142,390,622 | ||
Net Assets Attributable to Common
Shareholders Consist of: |
||||
Paid-in capital |
$ | 140,993,894 | ||
Accumulated net investment income |
695,373 | |||
Accumulated net realized loss on investments,
swap contracts, and foreign currency transactions |
(3,857,408 | ) | ||
Net unrealized appreciation on investments |
4,570,967 | |||
Net unrealized depreciation on swap contracts |
(12,484 | ) | ||
Net unrealized appreciation on foreign
currency translations |
280 | |||
Net Assets |
$ | 142,390,622 | ||
Net Asset Value per Common Share: |
||||
($142,390,622 ÷ 31,161,829 shares outstanding, at $0.001
par value; unlimited number of shares authorized) |
$ | 4.57 | ||
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2010 (Unaudited)
For the Six Months Ended June 30, 2010 (Unaudited)
Investment Income: |
||||
Dividends (net of foreign taxes of $66,597) |
$ | 4,045,674 | ||
Interest |
2,391 | |||
Total Investment Income |
4,048,065 | |||
Expenses: |
||||
Investment advisory fees |
1,020,571 | |||
Shareholder communications expenses |
135,550 | |||
Shareholder services fees |
84,102 | |||
Payroll expenses |
72,977 | |||
Legal and audit fees |
39,474 | |||
Trustees’ fees |
37,205 | |||
Auction agent fees |
31,860 | |||
Accounting fees |
22,500 | |||
Custodian fees |
15,097 | |||
Interest expense |
53 | |||
Miscellaneous expenses |
55,268 | |||
Total Expenses |
1,514,657 | |||
Less: |
||||
Advisory fee reduction |
(254,551 | ) | ||
Advisory fee reduction on unsupervised assets (See Note 3) |
(10,565 | ) | ||
Total Reductions |
(265,116 | ) | ||
Net Expenses |
1,249,541 | |||
Net Investment Income |
2,798,524 | |||
Net Realized and Unrealized Gain/(Loss) on
Investments, Swap Contracts, and Foreign Currency: |
||||
Net realized loss on investments |
(1,120,064 | ) | ||
Net realized loss on swap contracts |
(450,048 | ) | ||
Net realized loss on foreign currency transactions |
(893 | ) | ||
Net realized loss on investments, swap contracts,
and foreign currency transactions |
(1,571,005 | ) | ||
Net change in unrealized appreciation/depreciation: |
||||
on investments |
(9,647,950 | ) | ||
on swap contracts |
449,119 | |||
on foreign currency translations |
(651 | ) | ||
Net change in unrealized appreciation/depreciation on
investments, swap contracts, and foreign
currency translations |
(9,199,482 | ) | ||
Net Realized and Unrealized Gain/(Loss) on
Investments, Swap Contracts, and
Foreign Currency |
(10,770,487 | ) | ||
Net Decrease in Net Assets Resulting
from Operations |
(7,971,963 | ) | ||
Total Distributions to Preferred Shareholders |
(976,355 | ) | ||
Net Decrease in Net Assets Attributable to Common
Shareholders Resulting from Operations |
$ | (8,948,318 | ) | |
See accompanying notes to financial statements.
7
THE GABELLI UTILITY TRUST
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
| Six Months Ended | ||||||||
| June 30, 2010 | Year Ended | |||||||
| (Unaudited) | December 31, 2009 | |||||||
Operations: |
||||||||
Net investment income |
$ | 2,798,524 | $ | 5,230,299 | ||||
Net realized loss on investments, swap contracts, and foreign
currency transactions |
(1,571,005 | ) | (2,250,710 | ) | ||||
Net change in unrealized appreciation/depreciation on investments,
swap contracts,
and foreign currency
translations |
(9,199,482 | ) | 23,660,404 | |||||
Net Increase/(Decrease) in Net Assets Resulting from Operations |
(7,971,963 | ) | 26,639,993 | |||||
Distributions to Preferred
Shareholders: |
||||||||
Net investment income |
(976,355 | )* | (1,965,939 | ) | ||||
Total Distributions to
Preferred Shareholders |
(976,355 | ) | (1,965,939 | ) | ||||
Net Increase/(Decrease) in Net Assets Attributable to Common
Shareholders
Resulting from Operations |
(8,948,318 | ) | 24,674,054 | |||||
Distributions to Common
Shareholders: |
||||||||
Net investment income |
(1,117,280 | )* | (2,413,479 | ) | ||||
Return of capital |
(10,055,516 | )* | (19,676,599 | ) | ||||
Total Distributions to Common Shareholders |
(11,172,796 | ) | (22,090,078 | ) | ||||
Fund Share Transactions: |
||||||||
Net increase in net assets from common shares issued upon reinvestment of distributions |
1,664,858 | 3,328,163 | ||||||
Net increase in net assets from repurchase of preferred shares |
— | 36,704 | ||||||
Net Increase in Net Assets from Fund Share Transactions |
1,664,858 | 3,364,867 | ||||||
Net Increase/(Decrease) in Net Assets Attributable to Common
Shareholders |
(18,456,256 | ) | 5,948,843 | |||||
Net Assets Attributable to Common Shareholders: |
||||||||
Beginning of period |
160,846,878 | 154,898,035 | ||||||
End of period (including undistributed net investment income of
$695,373 and $0, respectively) |
$ | 142,390,622 | $ | 160,846,878 | ||||
| * | Based on year to date book income. Amounts are subject to change and recharacterization at year end. |
See accompanying notes to financial statements.
8
THE GABELLI UTILITY TRUST
FINANCIAL HIGHLIGHTS
| Six Months Ended | ||||||||||||||||||||||||
| Selected data for a share of beneficial | June 30, 2010 | Year Ended December 31, | ||||||||||||||||||||||
| interest outstanding throughout each period: | (Unaudited) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||
Operating Performance: |
||||||||||||||||||||||||
Net asset value, beginning of period |
$ | 5.20 | $ | 5.09 | $ | 8.18 | $ | 8.19 | $ | 6.98 | $ | 7.14 | ||||||||||||
Net investment income |
0.09 | 0.17 | 0.18 | 0.19 | 0.17 | 0.18 | ||||||||||||||||||
Net realized and unrealized gain/(loss) on investments,
swap contracts, and foreign currency transactions |
(0.35 | ) | 0.69 | (2.48 | ) | 0.61 | 1.84 | 0.45 | ||||||||||||||||
Total from investment operations |
(0.26 | ) | 0.86 | (2.30 | ) | 0.80 | 2.01 | 0.63 | ||||||||||||||||
Distributions to Preferred Shareholders: (a) |
||||||||||||||||||||||||
Net investment income |
(0.03 | )(g) | (0.06 | ) | (0.06 | ) | (0.03 | ) | (0.02 | ) | (0.02 | ) | ||||||||||||
Net realized gain |
— | — | (0.03 | ) | (0.07 | ) | (0.08 | ) | (0.07 | ) | ||||||||||||||
Total distributions to preferred shareholders |
(0.03 | ) | (0.06 | ) | (0.09 | ) | (0.10 | ) | (0.10 | ) | (0.09 | ) | ||||||||||||
Net Increase/(Decrease) in Net Assets
Attributable to Common Shareholders
Resulting from Operations |
(0.29 | ) | 0.80 | (2.39 | ) | 0.70 | 1.91 | 0.54 | ||||||||||||||||
Distributions to Common Shareholders: |
||||||||||||||||||||||||
Net investment income |
(0.04 | )(g) | (0.08 | ) | (0.10 | ) | (0.16 | ) | (0.16 | ) | (0.14 | ) | ||||||||||||
Net realized gain |
— | — | (0.04 | ) | (0.33 | ) | (0.56 | ) | (0.58 | ) | ||||||||||||||
Paid-in capital |
(0.32 | )(g) | (0.64 | ) | (0.58 | ) | (0.23 | ) | — | — | ||||||||||||||
Total distributions to common shareholders |
(0.36 | ) | (0.72 | ) | (0.72 | ) | (0.72 | ) | (0.72 | ) | (0.72 | ) | ||||||||||||
Fund Share Transactions: |
||||||||||||||||||||||||
Increase in net asset value from common
share transactions |
0.02 | 0.03 | 0.02 | 0.01 | 0.02 | 0.02 | ||||||||||||||||||
Increase in net asset value from repurchase of
preferred shares |
— | 0.00 | (i) | 0.00 | (i) | 0.00 | (i) | — | — | |||||||||||||||
Offering costs for preferred shares charged to
paid-in capital |
— | — | — | — | — | 0.00 | (i) | |||||||||||||||||
Offering costs for issuance of rights charged to
paid-in capital |
— | — | (0.00 | )(i) | — | 0.00 | (i) | (0.00 | )(i) | |||||||||||||||
Total fund share transactions |
0.02 | 0.03 | 0.02 | 0.01 | 0.02 | 0.02 | ||||||||||||||||||
Net Asset Value Attributable to Common
Shareholders, End of Period |
$ | 4.57 | $ | 5.20 | $ | 5.09 | $ | 8.18 | $ | 8.19 | $ | 6.98 | ||||||||||||
Net asset value total return † |
(7.93 | )% | 14.19 | % | (31.68 | )% | 8.08 | % | 27.46 | % | 5.71 | % | ||||||||||||
Market value, end of period |
$ | 7.94 | $ | 9.02 | $ | 5.90 | $ | 9.50 | $ | 9.94 | $ | 9.27 | ||||||||||||
Investment total return †† |
(7.78 | )% | 70.88 | % | (31.81 | )% | 3.42 | % | 16.47 | % | 7.79 | % | ||||||||||||
See accompanying notes to financial statements.
9
THE GABELLI UTILITY TRUST
FINANCIAL HIGHLIGHTS (Continued)
FINANCIAL HIGHLIGHTS (Continued)
| Six Months Ended | ||||||||||||||||||||||||
| Selected data for a share of beneficial | June 30, 2010 | Year Ended December 31, | ||||||||||||||||||||||
| interest outstanding throughout each period: | (Unaudited) | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||
Ratios and Supplemental Data: |
||||||||||||||||||||||||
Net assets including liquidation value of preferred
shares, end of period (in 000’s) |
$ | 193,723 | $ | 212,179 | $ | 206,724 | $ | 300,210 | $ | 297,511 | $ | 259,303 | ||||||||||||
Net assets attributable to common shares,
end of period (in 000’s) |
$ | 142,391 | $ | 160,847 | $ | 154,898 | $ | 245,617 | $ | 242,906 | $ | 204,698 | ||||||||||||
Ratio of net investment income to average net
assets attributable to common shares before
preferred share distributions |
3.64 | %(h) | 3.68 | % | 2.68 | % | 2.03 | % | 2.24 | % | 2.42 | % | ||||||||||||
Ratio of operating expenses to average net assets
attributable to common shares before fee waived |
1.96 | %(h) | 2.04 | % | 1.77 | % | — | — | — | |||||||||||||||
Ratio of operating expenses to average net assets
attributable to common shares net of advisory
fee reduction, if any (b)(c) |
1.62 | %(h) | 2.04 | % | 1.50 | % | 1.63 | % | 1.75 | % | 1.85 | % | ||||||||||||
Ratio of operating expenses to average net assets
including liquidation value of preferred shares
before fee waived |
1.48 | %(h) | 1.50 | % | 1.39 | % | — | — | — | |||||||||||||||
Ratio of operating expenses to average net assets
including liquidation value of preferred shares
net of advisory fee reduction, if any (b)(c) |
1.22 | %(h) | 1.50 | % | 1.18 | % | 1.33 | % | 1.40 | % | 1.47 | % | ||||||||||||
Portfolio turnover rate ††† |
0 | % | 4 | % | 14 | % | 13 | % | 33 | % | 19 | % | ||||||||||||
Preferred Shares: |
||||||||||||||||||||||||
5.625% Series A Cumulative Preferred Shares |
||||||||||||||||||||||||
Liquidation value, end of period (in 000’s) |
$ | 28,832 | $ | 28,832 | $ | 29,326 | $ | 29,593 | $ | 29,605 | $ | 29,605 | ||||||||||||
Total shares outstanding (in 000’s) |
1,153 | 1,153 | 1,173 | 1,184 | 1,184 | 1,184 | ||||||||||||||||||
Liquidation preference per share |
$ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | 25.00 | ||||||||||||
Average market value (d) |
$ | 24.90 | $ | 23.86 | $ | 22.76 | $ | 23.36 | $ | 23.80 | $ | 25.02 | ||||||||||||
Asset coverage per share |
$ | 94.35 | $ | 103.34 | $ | 99.72 | $ | 137.48 | $ | 136.21 | $ | 118.72 | ||||||||||||
Series B Auction Market Cumulative Preferred Shares |
||||||||||||||||||||||||
Liquidation value, end of period (in 000’s) |
$ | 22,500 | $ | 22,500 | $ | 22,500 | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||||||||
Total shares outstanding (in 000’s) |
1 | 1 | 1 | 1 | 1 | 1 | ||||||||||||||||||
Liquidation preference per share |
$ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||||||||
Average market value (e) |
$ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | $ | 25,000 | ||||||||||||
Asset coverage per share |
$ | 94,348 | $ | 103,336 | $ | 99,721 | $ | 137,478 | $ | 136,210 | $ | 118,718 | ||||||||||||
Asset Coverage (f) |
377 | % | 413 | % | 399 | % | 550 | % | 545 | % | 475 | % | ||||||||||||
| † | Based on net asset value per share, adjusted for reinvestment of distributions at prices determined under the Fund’s dividend reinvestment plan. Total return for a period of less than one year is not annualized. | |
| †† | Based on market value per share, adjusted for reinvestment of distributions at prices determined under the Fund’s dividend reinvestment plan. Total return for a period of less than one year is not annualized. | |
| ††† | Effective in 2008, a change in accounting policy was adopted with regard to the calculation of the portfolio turnover rate to include cash proceeds due to mergers. Had this policy been adopted retroactively, the portfolio turnover rate for the years ended December 31, 2007, 2006, and 2005, would have been 29%, 34%, and 29%, respectively. | |
| (a) | Calculated based upon average common shares outstanding on the record dates throughout the period. | |
| (b) | The ratios include a reduction for custodian fee credits on cash balances maintained with the custodian (“Custodian Fee Credits”). Historically, the ratios reflected operating expenses before the reduction for Custodian Fee Credits. If the ratios did not reflect a reduction for Custodian Fee Credits for the year ended December 31, 2007, the ratios of operating expenses to average net assets attributable to common shares net of advisory fee reduction would have been 1.63% and the ratios of operating expenses to average net assets including liquidation value of preferred shares net of fee reduction would have been 1.34%. For the years ended December 31, 2009, 2008, 2006, and 2005, the effect of Custodian Fee Credits was minimal. | |
| (c) | The Fund incurred interest expense during the year ended December 31, 2007. If interest expense had not been incurred, the ratio of operating expenses to average net assets attributable to common stock would have been 1.62% and the ratio of operating expenses to average net assets including liquidation value of preferred shares would have been 1.33%. For the six months ended June 30, 2010 and the years ended December 31, 2009 and 2008, the effect of interest expense was minimal. | |
| (d) | Based on weekly prices. | |
| (e) | Based on weekly auction prices. Since February 2008, the weekly auctions have failed. Holders that have submitted orders have not been able to sell any or all of their shares in the auctions. | |
| (f) | Asset coverage is calculated by combining all series of preferred shares. | |
| (g) | Based on year to date book income. Amounts are subject to change and recharacterization at year end. | |
| (h) | Annualized. | |
| (i) | Amount represents less than $0.005 per share. |
See accompanying notes to financial statements.
10
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. Organization. The Gabelli Utility Trust (the “Fund”) is a non-diversified closed-end management
investment company organized as a Delaware statutory trust on February 25, 1999 and registered
under the Investment Company Act of 1940, as amended (the “1940 Act”). Investment operations
commenced on July 9, 1999.
The Fund’s primary objective is long-term growth of capital and income. The Fund will invest
80% of its assets, under normal market conditions, in common stocks and other securities of foreign
and domestic companies involved in providing products, services, or equipment for (i) the
generation or distribution of electricity, gas, and water and (ii) telecommunications services or
infrastructure operations (the “80% Policy”). The 80% Policy may be changed without shareholder
approval. However, the Fund has adopted a policy to provide shareholders with notice at least sixty
days prior to the implementation of any change in the 80% Policy.
2. Significant Accounting Policies. The Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) has become the exclusive reference of authoritative United States of
America (“U.S.”) generally accepted accounting principles (“GAAP”) recognized by the FASB to be
applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of
federal laws are also sources of authoritative GAAP for SEC registrants. The ASC has superseded all
existing non-SEC accounting and reporting standards. The Fund’s financial statements are prepared
in accordance with GAAP, which may require the use of management estimates and assumptions. Actual
results could differ from those estimates. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
Security Valuation. Portfolio securities listed or traded on a nationally recognized
securities exchange or traded in the U.S. over-the-counter market for which market quotations are
readily available are valued at the last quoted sale price or a market’s official closing price as
of the close of business on the day the securities are being valued. If there were no sales that
day, the security is valued at the average of the closing bid and asked prices or, if there were no
asked prices quoted on that day, then the security is valued at the closing bid price on that day.
If no bid or asked prices are quoted on such day, the security is valued at the most recently
available price or, if the Board of Trustees (the “Board”) so determines, by such other method as
the Board shall determine in good faith to reflect its fair market value. Portfolio securities
traded on more than one national securities exchange or market are valued according to the broadest
and most representative market, as determined by Gabelli Funds, LLC (the “Adviser”).
Portfolio securities primarily traded on a foreign market are generally valued at the
preceding closing values of such securities on the relevant market, but may be fair valued pursuant
to procedures established by the Board if market conditions change significantly after the close of
the foreign market but prior to the close of business on the day the securities are being valued.
Debt instruments with remaining maturities of sixty days or less that are not credit impaired are
valued at amortized cost, unless the Board determines such amount does not reflect the securities’
fair value, in which case these securities will be fair valued as determined by the Board. Debt
instruments having a maturity greater than sixty days for which market quotations are readily
available are valued at the average of the latest bid and asked prices. If there were no asked
prices quoted on such day, the security is valued using the closing bid price. U.S. government
obligations with maturities greater than sixty days are normally valued using a model that
incorporates market observable data such as reported sales of similar securities, broker quotes,
yields, bids, offers, and reference data. Certain securities are valued principally using dealer
quotations. Futures contracts are valued at the closing settlement price of the exchange or board
of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available are fair valued as
determined by the Board. Fair valuation methodologies and procedures may include, but are not
limited to: analysis and review of available financial and non-financial information about the
company; comparisons with the valuation and changes in valuation of similar
11
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
securities, including a comparison of foreign securities with the equivalent U.S. dollar value ADR
securities at the close of the U.S. exchange; and evaluation of any other information that could be
indicative of the value of the security.
The inputs and valuation techniques used to measure fair value of the Fund’s investments are
summarized into three levels as described in the hierarchy below:
| • | Level 1 – quoted prices in active markets for identical securities; | ||
| • | Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and | ||
| • | Level 3 – significant unobservable inputs (including the Fund’s determinations as to the fair value of investments). |
The inputs or methodology used for valuing securities are not necessarily an indication of the
risk associated with investing in those securities. The summary of the Fund’s investments in
securities and other financial instruments by inputs used to value the Fund’s investments as of
June 30, 2010 is as follows:
| Valuation Inputs | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Quoted | Other Significant | Significant | Market Value | |||||||||||||
| Prices | Observable Inputs | Unobservable Inputs | at 6/30/10 | |||||||||||||
INVESTMENTS IN SECURITIES: |
||||||||||||||||
ASSETS (Market Value): |
||||||||||||||||
Common Stocks: |
||||||||||||||||
ENERGY AND UTILITIES |
||||||||||||||||
Energy and Utilities: Merchant Energy |
$ | 3,070,227 | $ | — | $ | 0 | $ | 3,070,227 | ||||||||
COMMUNICATIONS |
||||||||||||||||
Telecommunications |
8,473,533 | 103,913 | 0 | 8,577,446 | ||||||||||||
OTHER |
||||||||||||||||
Aerospace |
630,323 | 10,085 | — | 640,408 | ||||||||||||
Publishing |
— | — | 26 | 26 | ||||||||||||
Other Industries (a) |
178,439,731 | — | — | 178,439,731 | ||||||||||||
Total Common Stocks |
190,613,814 | 113,998 | 26 | 190,727,838 | ||||||||||||
Convertible Preferred Stocks (a) |
1,982,400 | — | — | 1,982,400 | ||||||||||||
Warrants: |
||||||||||||||||
ENERGY AND UTILITIES |
||||||||||||||||
Energy and Utilities: Merchant Energy |
1,621 | — | — | 1,621 | ||||||||||||
COMMUNICATIONS |
||||||||||||||||
Wireless Communications |
— | 90,523 | — | 90,523 | ||||||||||||
Total Warrants |
1,621 | 90,523 | — | 92,144 | ||||||||||||
Convertible Corporate Bonds |
— | 107,000 | — | 107,000 | ||||||||||||
U.S. Government Obligations |
— | 800,707 | — | 800,707 | ||||||||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS |
$ | 192,597,835 | $ | 1,112,228 | $ | 26 | $ | 193,710,089 | ||||||||
OTHER FINANCIAL INSTRUMENTS: |
||||||||||||||||
LIABILITIES (Unrealized Depreciation): * |
||||||||||||||||
EQUITY CONTRACT: |
||||||||||||||||
Contract for Difference Swap Agreement |
$ | — | $ | (12,484 | ) | $ | — | $ | (12,484 | ) | ||||||
| (a) | Please refer to the Schedule of Investments (“SOI”) for the industry classifications of these portfolio holdings. | |
| * | Other financial instruments are derivatives not reflected in the SOI, such as futures, forwards, and swaps, which are valued at the unrealized appreciation/depreciation of the instrument. |
The Fund did not have significant transfers between Level 1 and Level 2 during the reporting
period.
12
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
The following is a reconciliation of Level 3 investments for which significant unobservable
inputs were used to determine fair value:
| Net change | ||||||||||||||||||||||||||||||||||||
| in unrealized | ||||||||||||||||||||||||||||||||||||
| appreciation/ | ||||||||||||||||||||||||||||||||||||
| depreciation | ||||||||||||||||||||||||||||||||||||
| Change in | during the | |||||||||||||||||||||||||||||||||||
| Balance | Accrued | Realized | unrealized | Net | Transfers | Transfers | Balance | period on Level 3 | ||||||||||||||||||||||||||||
| as of | discounts/ | gain/ | appreciation/ | purchases/ | into | out of | as of | investments held | ||||||||||||||||||||||||||||
| 12/31/09 | (premiums) | (loss) | depreciation† | (sales) | Level 3†† | Level 3†† | 6/30/10 | at 6/30/10† | ||||||||||||||||||||||||||||
INVESTMENTS IN SECURITIES: |
||||||||||||||||||||||||||||||||||||
ASSETS (Market Value): |
||||||||||||||||||||||||||||||||||||
Common Stocks: |
||||||||||||||||||||||||||||||||||||
ENERGY AND UTILITIES |
||||||||||||||||||||||||||||||||||||
Energy and Utilities: Merchant Energy |
$ | 0 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 0 | $ | — | ||||||||||||||||||
COMMUNICATIONS |
||||||||||||||||||||||||||||||||||||
Telecommunications |
0 | — | — | — | — | — | — | 0 | — | |||||||||||||||||||||||||||
OTHER |
||||||||||||||||||||||||||||||||||||
Publishing |
— | — | — | — | — | 26 | — | 26 | — | |||||||||||||||||||||||||||
Total Common Stocks |
0 | — | — | — | — | 26 | — | 26 | — | |||||||||||||||||||||||||||
TOTAL INVESTMENTS IN SECURITIES |
$ | 0 | $ | — | $ | — | $ | — | $ | — | $ | 26 | $ | — | $ | 26 | $ | — | ||||||||||||||||||
| † | Net change in unrealized appreciation/depreciation on investments is included in the related amounts in the Statement of Operations. | |
| †† | The Fund’s policy is to recognize transfers into and transfers out of Level 3 as of the beginning of the reporting period. |
In January 2010, the FASB issued amended guidance to improve disclosure about fair value
measurements which requires additional disclosures about transfers between Levels 1 and 2 and
separate disclosures about purchases, sales, issuances, and settlements in the reconciliation of
fair value measurements using significant unobservable inputs (Level 3). It also clarifies existing
disclosure requirements relating to the levels of disaggregation of fair value measurement and
inputs and valuation techniques used to measure fair value. Disclosures about purchases, sales,
issuances, and settlements in the rollforward of activity in Level 3 fair value measurements are
effective for fiscal years beginning after December 15, 2010 and for interim periods within those
fiscal years. Management is currently evaluating the implications of this guidance on the Fund’s
financial statements. The remainder of the amended guidance is effective for financial statements
for fiscal years beginning after December 15, 2009 and interim periods within those fiscal years.
Management has evaluated the impact of this guidance on the Fund’s financial statements and
determined that there is no impact as of June 30, 2010.
Derivative Financial Instruments.
The Fund may engage in various portfolio investment strategies by investing in a number of
derivative financial instruments for the purpose of hedging or protecting its exposure to interest
rate movements and movements in the securities markets, hedging against changes in the value of its
portfolio securities and in the value of securities it intends to purchase, or hedging against a
specific transaction with respect to either the currency in which the transaction is denominated or
another currency. Investing in certain derivative financial instruments, including participation in
the options, futures, or swap markets, entails certain execution, liquidity, hedging, tax, and
securities, interest, credit, or currency market risks. Losses may arise if the Adviser’s
prediction of movements in the direction of the securities, foreign currency, and interest rate
markets is inaccurate. Losses may also arise if the counterparty does not perform its duties under
a contract, or that, in the event of default, the Fund may be delayed in or prevented from
obtaining payments or other contractual remedies owed to it under derivative contracts. The
creditworthiness of the counterparties is closely monitored in order to minimize these risks.
Participation in derivative transactions involves investment risks, transaction costs, and
potential losses to which the Fund would not be subject absent the use of these strategies. The
consequences of these risks, transaction costs, and losses may have a negative impact on the Fund’s
ability to pay distributions.
13
THE
GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
The Fund’s derivative contracts held at June 30, 2010, if any, are not accounted for as hedging
instruments under GAAP.
Swap Agreements. The Fund may enter into equity, contract for difference, and interest rate swap or
cap transactions for the purpose of hedging or protecting its exposure to interest rate movements
and movements in the securities markets. The use of swaps is a highly specialized activity that
involves investment techniques and risks different from those associated with ordinary portfolio
security transactions. In an interest rate swap, the Fund would agree to pay periodically to the
other party (which is known as the “counterparty”) a fixed rate payment in exchange for the
counterparty agreeing to pay to the Fund periodically a variable rate payment that is intended to
approximate the Fund’s variable rate payment obligation on the Series B Auction Rate Cumulative
Preferred Stock (“Series B Stock”). In an interest rate cap, the Fund would pay a premium to the
counterparty and, to the extent that a specified variable rate index exceeds a predetermined fixed
rate, would receive from that counterparty payments of the difference based on the notional amount
of such cap. Swaps and cap transactions introduce additional risk because the Fund would remain
obligated to pay preferred stock dividends when due in accordance with the Statement of Preferences
even if the counterparty defaulted. In a swap, a set of future cash flows is exchanged between two
counterparties. One of these cash flow streams will typically be based on a reference interest rate
combined with the performance of a notional value of shares of a stock. The other will be based on
the performance of the shares of a stock. Depending on the general state of short-term interest
rates and the returns on the Fund’s portfolio securities at the time a swap transaction reaches its
scheduled termination date, there is a risk that the Fund will not be able to obtain a replacement
transaction or that the terms of the replacement will not be as favorable as on the expiring
transaction.
Unrealized gains related to swaps are reported as an asset and unrealized losses are reported as a
liability in the Statement of Assets and Liabilities. The change in the value of swaps, including
the accrual of periodic amounts of interest to be paid or received on swaps, is reported as
unrealized gain or loss in the Statement of Operations. A realized gain or loss is recorded upon
payment or receipt of a periodic payment or termination of swap agreements.
The Fund held an interest rate swap agreement through June 2, 2010, with an average monthly
notional amount of approximately $25,000,000. At June 30, 2010, there were no open interest rate
swap agreements.
The Fund has entered into an equity contract for difference swap agreement with The Goldman Sachs
Group, Inc. Details of the swap at June 30, 2010 are as follows:
| Notional | Equity Security | Interest Rate/ | Termination | Net Unrealized | ||||
| Amount | Received | Equity Security Paid | Date | Depreciation | ||||
| Market Value | One month LIBOR plus 90 bps plus | |||||||
| Appreciation on: | Market Value Depreciation on: | |||||||
| $222,545 (25,000 Shares) | Rolls-Royce Group plc | Rolls-Royce Group plc | 6/27/11 | $(12,484) |
The Fund’s volume of activity in equity contract for difference swap agreements during the six
months ended June 30, 2010 had an average monthly notional amount of approximately $213,046.
Futures Contracts. The Fund may engage in futures contracts for the purpose of hedging against
changes in the value of its portfolio securities and in the value of securities it intends to
purchase. Upon entering into a futures contract, the Fund is required to deposit with the broker an
amount of cash or cash equivalents equal to a certain percentage of the contract amount. This is
known as the “initial margin.” Subsequent payments (“variation margin”) are made or received by the
Fund each day, depending on the daily fluctuations in the value of the contract, and are included
in unrealized appreciation/depreciation on futures. The Fund recognizes a realized gain or loss
when the contract is closed.
14
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
There are several risks in connection with the use of futures contracts as a hedging instrument.
The change in value of futures contracts primarily corresponds with the value of their underlying
instruments, which may not correlate with the change in value of the hedged investments. In
addition, there is the risk that the Fund may not be able to enter into a closing transaction
because of an illiquid secondary market. During the the six months ended June 30, 2010, the Fund
had no investments in futures contracts.
Forward Foreign Exchange Contracts. The Fund may engage in forward foreign exchange contracts for
the purpose of hedging a specific transaction with respect to either the currency in which the
transaction is denominated or another currency as deemed appropriate by the Adviser. Forward
foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The
change in market value is included in unrealized appreciation/depreciation on foreign currency
translations. 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.
The use of forward foreign exchange contracts does not eliminate fluctuations in the underlying
prices of the Fund’s portfolio securities, but it does establish a rate of exchange that can be
achieved in the future. Although forward foreign exchange contracts limit the risk of loss due to a
decline in the value of the hedged currency, they also limit any potential gain that might result
should the value of the currency increase. In addition, the Fund could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their contracts. During the six
months ended June 30, 2010, the Fund had no investments in forward foreign exchange contracts.
Fair Values of Derivative Instruments as of June 30, 2010:
The following table presents the value of derivatives held as of June 30, 2010, by their primary
underlying risk exposure and respective location on the Statement of Assets and Liabilities:
| Statement of Assets and Liabilities | ||||||
| Derivative Contract | Location | Fair Value | ||||
Liabilities: |
||||||
Equity Contracts |
Liabilities, Unrealized depreciation on swap contracts | $ | (12,484 | ) | ||
Effect of Derivative Instruments on the Statement of Operations during the Six Months Ended June
30, 2010:
The following table presents the effect of derivatives on the Statement of Operations during the
six months ended June 30, 2010, by primary risk exposure:
| Change in Unrealized | ||||||||
| Appreciation or | ||||||||
| Depreciation on | ||||||||
| Realized Gain or (Loss) on | Derivatives Recognized | |||||||
| Derivative Contracts | Derivatives Recognized in Income | in Income | ||||||
Equity Contracts |
$ | 25,024 | $ | (8,318 | ) | |||
Interest Rate Contracts |
(475,072 | ) | 457,437 | |||||
Total |
$ | (450,048 | ) | $ | 449,119 | |||
Repurchase Agreements. The Fund may enter into repurchase agreements with primary government
securities dealers recognized by the Federal Reserve Board, with member banks of the Federal
Reserve System, or with other brokers or dealers that meet credit guidelines established by the
Adviser and reviewed by the Board. Under the terms of a typical repurchase agreement, the Fund
takes possession of an underlying debt obligation subject to an obligation of the seller to
15
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
repurchase, and the Fund to resell, the obligation at an agreed-upon price and time, thereby
determining the yield during the Fund’s holding period. It is the policy of the Fund to receive and
maintain securities as collateral whose market value is not less than repurchase price. The Fund
will make payment for such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is marked-to-market on a daily
basis to maintain the adequacy of the collateral. If the seller defaults and the value of the
collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or limited. At June 30, 2010,
there were no open repurchase agreements.
Foreign Currency Translations. The books and records of the Fund are maintained in U.S.
dollars. Foreign currencies, investments, and other assets and liabilities are translated into U.S.
dollars at the current exchange rates. Purchases and sales of investment securities, income, and
expenses are translated at the exchange rate prevailing on the respective dates of such
transactions. Unrealized gains and losses that result from changes in foreign exchange rates and/or
changes in market prices of securities have been included in unrealized appreciation/depreciation
on investments and foreign currency translations. Net realized foreign currency gains and losses
resulting from changes in exchange rates include foreign currency gains and losses between trade
date and settlement date on investment securities transactions, foreign currency transactions, and
the difference between the amounts of interest and dividends recorded on the books of the Fund and
the amounts actually received. The portion of foreign currency gains and losses related to
fluctuation in exchange rates between the initial purchase trade date and subsequent sale trade
date is included in realized gain/loss on investments.
Foreign Securities. The Fund may directly purchase securities of foreign issuers. Investing in
securities of foreign issuers involves special risks not typically associated with investing in
securities of U.S. issuers. The risks include possible revaluation of currencies, the inability to
repatriate funds, less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign issuers and their markets
may be less liquid and their prices more volatile than those of securities of comparable U.S.
issuers.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or
currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and
recoveries as applicable, based upon its current interpretation of tax rules and regulations that
exist in the markets in which it invests.
Securities Transactions and Investment Income. Securities transactions are accounted for on
the trade date with realized gain or loss on investments determined by using the identified cost
method. Interest income (including amortization of premium and accretion of discount) is recorded
on the accrual basis. Premiums and discounts on debt securities are amortized using the effective
yield to maturity method. Dividend income is recorded on the ex-dividend date except for certain
dividends which are recorded as soon as the Fund is informed of the dividend.
Custodian Fee Credits and Interest Expense. When cash balances are maintained in the custody
account, the Fund receives credits which are used to offset custodian fees. The gross expenses paid
under the custody arrangement are included in custodian fees in the Statement of Operations with
the corresponding expense offset, if any, shown as “custodian fee credits.” When cash balances are
overdrawn, the Fund is charged an overdraft fee equal to 110% of the 90 day Treasury Bill rate on
outstanding balances. This amount, if any, would be included in “interest expense” in the Statement
of Operations. There were no custodian fee credits earned during the six months ended June 30,
2010.
Distributions to Shareholders. Distributions to common shareholders are recorded on the
ex-dividend date. Distributions to shareholders are based on income and capital gains as determined
in accordance with federal income tax regulations, which may differ from income and capital gains
as determined under GAAP. These differences are primarily
16
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
due to differing treatments of income and gains on various investment securities and foreign
currency transactions held by the Fund, timing differences, and differing characterizations of
distributions made by the Fund. Distributions from net investment income for federal income tax
purposes include net realized gains on foreign currency transactions. These book/tax differences
are either temporary or permanent in nature. To the extent these differences are permanent,
adjustments are made to the appropriate capital accounts in the period when the differences arise.
These reclassifications have no impact on the net asset value (“NAV”) of the Fund.
Distributions to shareholders of the Fund’s 5.625% Series A Cumulative Preferred Shares and
Series B Auction Market Cumulative Preferred Shares (“Cumulative Preferred Shares”) are recorded on
a daily basis and are determined as described in Note 5.
The tax character of distributions paid during the year ended December 31, 2009 was as follows:
| Common | Preferred | |||||||
Distributions paid from: |
||||||||
Ordinary income (inclusive of net short-term capital gains) |
$ | 2,413,479 | $ | 1,965,939 | ||||
Return of capital |
19,676,599 | — | ||||||
Total distributions paid |
$ | 22,090,078 | $ | 1,965,939 | ||||
Provision for Income Taxes. The Fund intends to continue to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). It is the
policy of the Fund to comply with the requirements of the Code applicable to regulated investment
companies and to distribute substantially all of its net investment company taxable income and net
capital gains. Therefore, no provision for federal income taxes is required.
At December 31, 2009, the components of accumulated earnings/losses on a tax basis were as
follows:
Accumulated capital loss carryforwards |
$ | (890,826 | ) | |
Net unrealized appreciation on investments, swap contracts,
and foreign currency translations |
12,295,676 | |||
Other temporary differences* |
57,476 | |||
Total |
$ | 11,462,326 | ||
| * | Other temporary differences are primarily due to adjustments on preferred share class distributions payables, income from investments in hybrid securities, and mark-to-market and accrual adjustments on investments in swap contracts. |
At December 31, 2009, the Fund had net capital loss carryforwards for federal income tax
purposes of $890,826 which are available to reduce future required distributions of net capital
gains to shareholders through 2017.
The following summarizes the tax cost of investments and the related net unrealized
appreciation/depreciation at June 30, 2010:
| Gross | Gross | |||||||||||||||
| Unrealized | Unrealized | Net Unrealized | ||||||||||||||
| Cost | Appreciation | Depreciation | Appreciation | |||||||||||||
Investments |
$ | 190,519,107 | $ | 23,477,987 | $ | (20,287,005 | ) | $ | 3,190,982 | |||||||
The Fund is required to evaluate tax positions taken or expected to be taken in the course of
preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not”
of being sustained by the applicable tax authority. Income tax and related interest and penalties
would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions
were deemed not to meet the more-likely-than-not threshold. For the six months ended June 30, 2010,
the Fund did not incur any interest or penalties. As of June 30, 2010, the Adviser has reviewed all
open tax years and concluded that there was no impact to the Fund’s net assets or results of
operations. Tax years ended December 31, 2007 through
17
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
December 31, 2009 remain subject to examination by the Internal Revenue Service and state taxing
authorities. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if
adjustments to this conclusion are necessary.
3. Agreements and Transactions with Affiliates. The Fund has entered into an investment advisory
agreement (the “Advisory Agreement”) with the Adviser which provides that the Fund will pay the
Adviser a fee, computed weekly and paid monthly, equal on an annual basis to 1.00% of the value of
its average weekly net assets including the liquidation value of the preferred stock. In accordance
with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund’s
portfolio and oversees the administration of all aspects of the Fund’s business and affairs. The
Adviser has agreed to reduce the management fee on the incremental assets attributable to the
Cumulative Preferred Shares if the total return of the NAV of the common shares of the Fund,
including distributions and advisory fee subject to reduction, does not exceed the stated dividend
rate or corresponding swap rate of the Cumulative Preferred Shares for the year.
The Fund’s total return on the NAV of the common shares is monitored on a monthly basis to
assess whether the total return on the NAV of the common shares exceeds the stated dividend rate or
corresponding swap rate of each particular series of Cumulative Preferred Shares for the period.
For the six months ended June 30, 2010, the Fund’s total return on the NAV of the common shares did
not exceed the stated dividend rate or corresponding swap of the outstanding Preferred Shares.
Thus, advisory fees with respect to the liquidation value of the Preferred Share assets were
reduced by $254,551.
During the six months ended June 30, 2010, the Fund paid brokerage commissions on security
trades of $10,605 to Gabelli & Company, Inc. (“Gabelli & Co.”), an affiliate of the Adviser.
The cost of calculating the Fund’s NAV per share is a Fund expense pursuant to the Advisory
Agreement between the Fund and the Adviser. During the six months ended June 30, 2010, the Fund
paid or accrued $22,500 to the Adviser in connection with the cost of computing the Fund’s NAV.
As per the approval of the Board, the Fund compensates officers of the Fund, who are employed
by the Fund and are not employed by the Adviser (although the officers may receive incentive based
variable compensation from affiliates of the Adviser) and pays its allocated portion of the cost of
the Fund’s Chief Compliance Officer. For the six months ended June 30, 2010, the Fund paid or
accrued $72,977 in payroll expenses in the Statement of Operations.
The Fund pays each Trustee who is not considered an affiliated person an annual retainer of
$6,000 plus $500 for each Board meeting attended. Each Trustee is reimbursed by the Fund for any
out of pocket expenses incurred in attending meetings. All Board committee members receive $500 per
meeting attended, the Audit Committee Chairman receives an annual fee of $3,000, the Nominating
Committee Chairman receives an annual fee of $2,000, and the Lead Trustee receives an annual fee of
$1,000. A Trustee may receive a single meeting fee, allocated among the participating funds, for
participation in certain meetings held on behalf of multiple funds. Trustees who are directors or
employees of the Adviser or an affiliated company receive no compensation or expense reimbursement
from the Fund.
There was a reduction in the advisory fee paid to the Adviser relating to certain portfolio
holdings, i.e., unsupervised assets, of the Fund with respect to which the Adviser has transferred
dispositive and voting control to the Fund’s Proxy Voting Committee. During the six months ended
June 30, 2010, the Fund’s Proxy Voting Committee exercised control and discretion over all rights
to vote or consent with respect to such securities and the Adviser reduced its fee with respect to
such securities by $10,565.
4. Portfolio Securities. Purchases and sales of securities for the six months ended June 30, 2010,
other than short-term securities and U.S. Government obligations, aggregated $184,917 and
$7,374,857, respectively.
Sales of U.S. Government obligations for the six months ended June 30, 2010, other than
short-term obligations, aggregated $117,206.
5. Capital. The Fund is authorized to issue an unlimited number of shares of beneficial interest
(par value $0.001). The Board has authorized the repurchase of its common shares on the open market
when the shares are trading at a discount of 10% or more (or such other percentage as the Board may
determine from time to time) from the NAV of the shares.
18
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
During the six months ended June 30, 2010 and the year ended December 31, 2009, the Fund did not
repurchase any common shares of beneficial interest in the open market.
| Transactions in shares of beneficial interest were as follows: |
| Six Months Ended | ||||||||||||||||
| June 30, 2010 | Year Ended | |||||||||||||||
| (Unaudited) | December 31, 2009 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Net increase from shares issued
upon reinvestment of distributions |
215,921 | $ | 1,664,858 | 515,887 | $ | 3,328,163 | ||||||||||
A shelf registration authorizing the offering of preferred shares was declared effective by
the SEC on June 13, 2008.
The Fund is authorized to issue up to 2,005,000 shares of $0.001 par
value Cumulative Preferred Shares. The Cumulative Preferred Shares are senior to the common shares
and result in the financial leveraging of the common shares. Such leveraging tends to magnify both
the risks and opportunities to common shareholders. Dividends on shares of the Cumulative Preferred
Shares are cumulative. The Fund is required by the 1940 Act and by the Statement of Preferences to
meet certain asset coverage tests with respect to the Cumulative Preferred Shares. If the Fund
fails to meet these requirements and does not correct such failure, the Fund may be required to
redeem, in part or in full, the 5.625% Series A and Series B Auction Market Cumulative Preferred
Shares at a redemption price of $25.00 and $25,000, respectively, per share plus an amount equal to
the accumulated and unpaid dividends whether or not declared on such shares in order to meet these
requirements. Additionally, failure to meet the foregoing asset coverage requirements could
restrict the Fund’s ability to pay dividends to common shareholders and could lead to sales of
portfolio securities at inopportune times. The income received on the Fund’s assets may vary in a
manner unrelated to the fixed and variable rates, which could have either a beneficial or
detrimental impact on net investment income and gains available to common shareholders.
On July 31, 2003, the Fund received net proceeds of $28,895,026 (after underwriting discounts
of $945,000 and offering expenses of $159,974) from the public offering of 1,200,000 shares of
5.625% Series A Cumulative Preferred Shares. Commencing July 31, 2008 and thereafter, the Fund, at
its option, may redeem the 5.625% Series A Cumulative Preferred Shares in whole or in part at the
redemption price at any time. During the six months ended June 30, 2010, the Fund did not
repurchase any shares of 5.625% Series A Cumulative Preferred Shares. At June 30, 2010, 1,153,288
shares of 5.625% Series A Cumulative Preferred Shares were outstanding and accrued dividends
amounted to $13,515.
On July 31, 2003, the Fund received net proceeds of $24,590,026 (after underwriting discounts
of $250,000 and offering expenses of $159,974) from the public offering of 1,000 shares of Series B
Shares. The dividend rate, as set by the auction process, which is generally held every seven days,
is expected to vary with short-term interest rates. The dividend rates of Series B Shares ranged
from 1.458% to 1.581% for the six months ended June 30, 2010. Since February 2008, the number of
Series B Shares subject to bid orders by potential holders has been less than the number of Series
B Shares subject to sell orders. Therefore, the weekly auctions have failed, and the dividend rate
since then has been the maximum rate. Holders that have submitted sell orders have not been able to
sell any or all of the Series B Shares for which they have submitted sell orders. The current
maximum rate is 125% of the seven day Telerate/British Bankers Association LIBOR rate on the day of
such auction. Existing shareholders may submit an order to hold, bid, or sell such shares on each
auction date. Shareholders of the Series B Shares may also trade their shares in the secondary
market. The Fund, at its option, may redeem the Series B Auction Market Cumulative Preferred Shares
in whole or in part at the redemption price at any time. There were no redemptions of Series B
Shares during the six months ended June 30, 2010. At June 30, 2010, 900 shares of Series B Shares
were outstanding with an annualized dividend rate of 1.578% per share and accrued dividends
amounted to $986.
The holders of Cumulative Preferred Shares generally are entitled to one vote per share held
on each matter submitted to a vote of shareholders of the Fund and will vote together with holders
of common stock as a single class. The holders of Cumulative Preferred Shares voting together as a
single class also have the right currently to elect two Trustees and under
19
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
NOTES TO FINANCIAL STATEMENTS (Continued) (Unaudited)
certain circumstances are entitled to elect a majority of the Board of Trustees. In addition, the
affirmative vote of a majority of the votes entitled to be cast by holders of all outstanding
shares of the preferred shares, voting as a single class, will be required to approve any plan of
reorganization adversely affecting the preferred shares, and the approval of two-thirds of each
class, voting separately, of the Fund’s outstanding voting stock must approve the conversion of the
Fund from a closed-end to an open-end investment company. The approval of a majority (as defined in
the 1940 Act) of the outstanding preferred shares and a majority (as defined in the 1940 Act) of
the Fund’s outstanding voting securities are required to approve certain other actions, including
changes in the Fund’s investment objectives or fundamental investment policies.
6. Industry
Concentration. Because the Fund primarily invests in common stocks and other securities of foreign
and domestic companies in the utility industry, its portfolio may be subject to greater risk and
market fluctuations than a portfolio of securities representing a broad range of investments.
7. Indemnifications. The Fund enters into contracts that contain a variety of indemnifications. The
Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior
claims or losses pursuant to these contracts. Management has reviewed the Fund’s existing contracts
and expects the risk of loss to be remote.
8. Other Matters. On April 24, 2008, the Investment Adviser entered into a settlement with the SEC
to resolve an inquiry regarding prior frequent trading activity in shares of the GAMCO Global
Growth Fund (the “Global Growth Fund”) by one investor who was banned from the Global Growth Fund
in August 2002. In an administrative order that was entered in connection with the settlement, the
SEC found that the Investment Adviser had willfully violated Section 206(2) of the Investment
Advisers Act of 1940, Section 17(d) of the 1940 Act and Rule 17d-1 thereunder, and had willfully
aided and abetted and caused violations of Section 12(d)(1)(B)(i) of the 1940 Act. Under the terms
of the settlement, the Investment Adviser, while neither admitting nor denying the SEC’s findings
and allegations, paid $16 million (which included a $5 million civil monetary penalty),
approximately $12.8 million of which is in the process of being paid to shareholders of the Global
Growth Fund in accordance with a plan developed by an independent distribution consultant and
approved by the independent directors of the Global Growth Fund and acceptable to the staff of the
SEC, and agreed to cease and desist from future violations of the above referenced federal
securities laws. The SEC’s order also noted the cooperation that the Investment Adviser gave the
staff of the SEC. The settlement will not have a material adverse impact on the Investment Adviser
or its ability to fulfill its obligations under the Investment Advisory Agreement. On the same day,
the SEC filed a civil action against the Executive Vice President and Chief Operating Officer of
the Investment Adviser, alleging violations of certain federal securities laws arising from the
same matter. The officer is also an officer of the Fund, the Global Growth Fund, and other funds in
the Gabelli/GAMCO fund complex. The officer denied the allegations and is continuing in his
positions with the Investment Adviser and the funds. The court dismissed certain claims, finding
that the SEC was not entitled to pursue various remedies against the officer while leaving one
remedy in the event the SEC were able to prove violations of law. The court, in response to a
motion by the SEC, subsequently dismissed the remaining remedy without prejudice against the
officer, which would allow the SEC to appeal the court’s rulings. The Investment Adviser currently
expects that any resolution of the action against the officer will not have a material adverse
impact on the Investment Adviser or its ability to fulfill its obligations under the Investment
Advisory Agreement.
9. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events
occurring through the date the financial statements were issued and has determined that there were
no subsequent events requiring recognition or disclosure in the financial statements.
Certifications
The Fund’s Chief Executive Officer has certified to the New York Stock Exchange (“NYSE”) that,
as of June 30, 2010, he was not aware of any violation by the Fund of applicable NYSE corporate
governance listing standards. The Fund reports to the SEC on Form N-CSR which contains
certifications by the Fund’s principal executive officer and principal financial officer that
relate to the Fund’s disclosure in such reports and that are required by Rule 30a-2(a) under the
1940 Act.
20
THE GABELLI UTILITY TRUST
Board Consideration and Re-Approval of Investment Advisory Agreement (Unaudited)
At its meeting on February 24, 2010, the Board of Trustees (“Board”) of the Fund approved the
continuation of the investment advisory agreement with the Adviser for the Fund on the basis of the
recommendation by the trustees who are not “interested persons” of the Fund (the “Independent Board
Members”). The following paragraphs summarize the material information and factors considered by
the Independent Board Members as well as their conclusions relative to such factors.
Nature, Extent, and Quality of Services. The Independent Board Members considered information
regarding the portfolio managers, the depth of the analyst pool available to the Adviser and the
portfolio managers, the scope of administrative, shareholder and other services supervised or
provided by the Adviser, and the absence of significant service problems reported to the Board. The
Independent Board Members noted the experience, length of service, and reputation of the portfolio
managers.
Investment Performance. The Independent Board Members reviewed the performance of the Fund since
inception against a peer group of sector equity closed-end funds prepared by Lipper. The
Independent Board Members noted that the Fund’s performance had been excellent prior to a very poor
last quarter of 2008 and was at the time in the bottom quintile of funds in its peer group for the
prior one and three year period since inception.
Profitability. The Independent Board Members reviewed summary data regarding the profitability of
the Fund to the Adviser both with an administrative overhead charge and without such a charge.
Economies of Scale. The Independent Board Members discussed the major elements of the Adviser’s
cost structure and the relationship of those elements to potential economies of scale. The
Independent Board Members noted that the Fund was a closed-end fund and unlikely to realize any
economies of scale potentially available through growth.
Sharing of Economies of Scale. The Independent Board Members noted that the investment management
fee schedule for the Fund does not take into account any potential sharing of economies of scale.
Service and Cost Comparisons. The Independent Board Members compared the expense ratios of the
investment management fee, other expenses, and total expenses of the Fund with similar expense
ratios of the peer group of sector equity closed-end funds and noted that the Adviser’s management
fee includes substantially all administrative services of the Fund as well as investment advisory
services. The Independent Board Members noted that within this group, the Fund’s expense ratios
were lower than average and the Fund’s size was average. The Independent Board Members also noted
that the management fee structure was the same as that in effect for most of the Gabelli funds,
except for the presence of leverage and fees chargeable as assets attributable to leverage in
certain circumstances.
Conclusions. The Independent Board Members concluded that the Fund enjoyed highly experienced
portfolio management services and good ancillary services, and that the performance record, which
at this point was relatively short-term only, had been both excellent and poor during various
reporting periods and that the Independent Board Members would review performance carefully as the
Fund’s performance record lengthened. The Independent Board Members concluded that the
profitability to the Adviser of managing the Fund was reasonable and that, in part due to the
Fund’s structure as a closed-end fund, economies of scale were not a significant factor in their
thinking. The Independent Board Members did not view the potential profitability of ancillary
services as material to their decision. On the basis of the foregoing and without assigning
particular weight to any single conclusion, the Independent Board Members determined to recommend
continuation of the Advisory Agreement to the full Board.
21
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLANS
AND VOLUNTARY CASH PURCHASE PLANS
Enrollment in the Plan
It is the policy of The Gabelli Utility Trust (the “Fund”) to automatically reinvest dividends
payable to common shareholders. As a “registered” shareholder you automatically become a
participant in the Fund’s Automatic Dividend Reinvestment Plan (the “Plan”). The Plan authorizes
the Fund to credit common shares to participants upon an income dividend or a capital gains
distribution regardless of whether the shares are trading at a discount or a premium to net asset
value. All distributions to shareholders whose shares are registered in their own names will be
automatically reinvested pursuant to the Plan in additional shares of the Fund. Plan participants
may send their share certificates to Computershare Trust Company, N.A. (“Computershare”) to be held
in their dividend reinvestment account. Registered shareholders wishing to receive their
distributions in cash must submit this request in writing to:
The Gabelli Utility Trust
c/o Computershare
P.O. Box 43010
Providence, RI 02940-3010
c/o Computershare
P.O. Box 43010
Providence, RI 02940-3010
Shareholders requesting this cash election
must include the shareholder’s name and address as they appear on the share certificate.
Shareholders with additional questions regarding the Plan or requesting a copy of the terms of the
Plan, may contact Computershare at (800) 336-6983.
If your shares are held in the name of a broker, bank, or nominee, you should contact such
institution. If such institution is not participating in the Plan, your account will be credited
with a cash dividend. In order to participate in the Plan through such institution, it may be
necessary for you to have your shares taken out of “street name” and re-registered in your own
name. Once registered in your own name your distributions will be automatically reinvested. Certain
brokers participate in the Plan. Shareholders holding shares in “street name” at participating
institutions will have dividends automatically reinvested. Shareholders wishing a cash dividend at
such institution must contact their broker to make this change.
The number of common shares distributed to participants in the Plan in lieu of cash dividends
is determined in the following manner. Under the Plan, whenever the market price of the Fund’s
common shares is equal to or exceeds net asset value at the time shares are valued for purposes of
determining the number of shares equivalent to the cash dividends or capital gains distribution,
participants are issued common shares valued at the greater of (i) the net asset value as most
recently determined or (ii) 95% of the then current market price of the Fund’s common shares. The
valuation date is the dividend or distribution payment date or, if that date is not a New York
Stock Exchange (“NYSE”) trading day, the next trading day. If the net asset value of the common
shares at the time of valuation exceeds the market price of the common shares, participants will
receive common shares from the Fund valued at market price. If the Fund should declare a dividend
or capital gains distribution payable only in cash, Computershare will buy common shares in the
open market, or on the NYSE or elsewhere, for the participants’ accounts, except that Computershare
will endeavor to terminate purchases in the open market and cause the Fund to issue shares at net
asset value if, following the commencement of such purchases, the market value of the common shares
exceeds the then current net asset value.
The automatic reinvestment of dividends and capital gains distributions will not relieve
participants of any income tax which may be payable on such distributions. A participant in the
Plan will be treated for federal income tax purposes as having received, on a dividend payment
date, a dividend or distribution in an amount equal to the cash the participant could have received
instead of shares.
Voluntary Cash Purchase Plan
The Voluntary Cash Purchase Plan is yet another vehicle for our shareholders to increase their
investment in the Fund. In order to participate in the Voluntary Cash Purchase Plan, shareholders
must have their shares registered in their own name.
Participants in the Voluntary Cash Purchase Plan have the option of making additional cash
payments to Computershare for investments in the Fund’s common shares at the then current market
price. Shareholders may send an amount from $250 to $10,000. Computershare will use these funds to
purchase shares in the open market on or about the 1st and 15th of each month. Computershare will
charge each shareholder who participates $0.75, plus a pro rata share of the brokerage commissions.
Brokerage charges for such purchases are expected to be less than the usual brokerage charge for
such transactions. It is suggested that any voluntary cash payments be sent to Computershare, P.O.
Box 43010, Providence, RI 02940–3010 such that Computershare receives such payments approximately
10 days before the 1st and 15th of the month. Funds not received at least five days before the
investment date shall be held for investment until the next purchase date. A payment may be
withdrawn without charge if notice is received by Computershare at least 48 hours before such
payment is to be invested.
Shareholders wishing to liquidate shares held at Computershare must do so in writing or by
telephone. Please submit your request to the above mentioned address or telephone number. Include
in your request your name, address, and account number. The cost to liquidate shares is $2.50 per
transaction as well as the brokerage commission incurred. Brokerage charges are expected to be less
than the usual brokerage charge for such transactions.
For more information regarding the Automatic Dividend Reinvestment Plan and Voluntary Cash
Purchase Plan, brochures are available by calling (914) 921-5070 or by writing directly to the
Fund.
The Fund reserves the right to amend or terminate the Plan as applied to any voluntary cash
payments made and any dividend or distribution paid subsequent to written notice of the change sent
to the members of the Plan at least 90 days before the record date for such dividend or
distribution. The Plan also may be amended or terminated by Computershare on at least 90 days
written notice to participants in the Plan.
22
TRUSTEES AND OFFICERS
THE GABELLI UTILITY TRUST
One Corporate Center, Rye, NY 10580-1422
THE GABELLI UTILITY TRUST
One Corporate Center, Rye, NY 10580-1422
Trustees |
||||
Mario J. Gabelli, CFA |
||||
Chairman & Chief Executive
Officer, |
||||
GAMCO Investors, Inc. |
||||
Dr. Thomas E. Bratter |
||||
President & Founder, John Dewey Academy |
||||
Anthony J. Colavita |
||||
President, |
||||
Anthony J. Colavita, P.C. |
||||
James P. Conn |
||||
Former Managing Director & |
||||
Chief Investment Officer, |
||||
Financial Security Assurance Holdings Ltd. |
||||
Vincent D. Enright |
||||
Former
Senior Vice President & |
||||
Chief Financial Officer, |
||||
KeySpan Corp. |
||||
Frank J. Fahrenkopf, Jr. |
||||
President & Chief Executive Officer, |
||||
American Gaming Association |
||||
John D. Gabelli |
||||
Senior Vice President, |
||||
Gabelli & Company,
Inc. |
||||
Robert J. Morrissey |
||||
Attorney-at-Law, |
||||
Morrissey, Hawkins & Lynch |
||||
Anthony R. Pustorino |
||||
Certified Public Accountant, |
||||
Professor Emeritus, Pace
University |
||||
Salvatore J. Zizza |
||||
Chairman, Zizza & Co., Ltd. |
||||
Officers* |
||||
Bruce N. Alpert |
||||
President & Acting Treasurer |
||||
Peter D. Goldstein |
||||
Chief Compliance Officer & Acting Secretary |
||||
David I. Schachter |
||||
Vice President & Ombudsman |
||||
Investment Adviser |
||||
Gabelli Funds, LLC |
||||
One Corporate Center |
||||
Rye, New York 10580-1422 |
||||
Custodian |
||||
The Bank of New York Mellon |
||||
Counsel |
||||
Willkie Farr & Gallagher LLP |
||||
Transfer Agent and Registrar |
||||
Computershare Trust Company, N.A. |
||||
Stock Exchange Listing |
| 5.625% | ||||
| Common | Preferred | |||
NYSE–Symbol: |
GUT | GUT PrA | ||
Shares Outstanding: |
31,161,829 | 1,153,288 |
| * | Agnes Mullady, Treasurer and Secretary, is on a leave of absence. |
The Net Asset Value per share appears in the Publicly Traded Funds column, under the heading
“Specialized Equity Funds,” in Monday’s The Wall Street Journal. It is also listed in Barron’s
Mutual Funds/Closed End Funds section under the heading “Specialized Equity Funds.”
The Net Asset
Value per share may be obtained each day by calling (914) 921-5070 or visiting www.gabelli.com.
For general information about the Gabelli Funds, call 800-GABELLI (800-422-3554), fax us at
914-921-5118, visit Gabelli Funds’ Internet homepage at: www.gabelli.com, or e-mail us at:
closedend@gabelli.com
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as
amended, that the Fund may, from time to time, purchase its common shares in the open market when
the Fund’s shares are trading at a discount of 10% or more from the net asset value of the shares.
The Fund may also, from time to time, purchase its preferred shares in the open market when the
preferred shares are trading at a discount to the liquidation value.
23
| THE GABELLI UTILITY TRUST One Corporate Center Rye, NY 10580-1422 (914) 921-5070 www.gabelli.com Semi Annual Report June 30, 2010 GUT Q2/2010 |
| Item 2. | Code of Ethics. |
Not applicable.
| Item 3. | Audit Committee Financial Expert. |
Not applicable.
| Item 4. | Principal Accountant Fees and Services. |
Not applicable.
| Item 5. | Audit Committee of Listed registrants. |
Not applicable.
| Item 6. | Investments. |
| (a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. | |
| (b) | Not applicable. |
| 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. |
There has been no change, as of the date of this filing, in any of the portfolio managers
identified in response to paragraph (a)(1) of this Item in the registrant’s most recently filed
annual report on Form N-CSR.
| Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
REGISTRANT PURCHASES OF EQUITY SECURITIES
| (c) Total Number of | (d) Maximum Number (or | |||||||
| Shares (or Units) | Approximate Dollar Value) of | |||||||
| (a) Total Number of | Purchased as Part of | Shares (or Units) that May | ||||||
| Shares (or Units) | (b) Average Price Paid per | Publicly Announced | Yet Be Purchased Under the | |||||
| Period | Purchased | Share (or Unit) | Plans or Programs | Plans or Programs | ||||
Month #1
|
Common – N/A | Common – N/A | Common – N/A | Common – 30,980,272 | ||||
01/01/10 through 01/31/10
|
Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – 1,153,288 | ||||
Month #2
|
Common – N/A | Common – N/A | Common – N/A | Common – 31,016,283 | ||||
02/01/10 through 02/28/10
|
Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – 1,153,288 | ||||
Month #3
|
Common – N/A | Common – N/A | Common – N/A | Common – 31,053,583 | ||||
03/01/10 through 03/31/10
|
Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – 1,153,288 | ||||
Month #4
|
Common – N/A | Common – N/A | Common – N/A | Common – 31,088,683 | ||||
04/01/10 through 04/30/10
|
Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – 1,153,288 | ||||
Month #5
|
Common – N/A | Common – N/A | Common – N/A | Common – 31,125,663 | ||||
05/01/10 through 05/31/10
|
Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – 1,153,288 | ||||
Month #6
|
Common – N/A | Common – N/A | Common – N/A | Common – 31,161,829 | ||||
06/01/10 through 06/30/10
|
Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – 1,153,288 | ||||
Total
|
Common – N/A | Common – N/A | Common – N/A | N/A | ||||
| Preferred Series A – N/A | Preferred Series A – N/A | Preferred Series A – N/A |
| Footnote columns (c) and (d) of the table, by disclosing the following information in the aggregate for all plans or programs publicly announced: | ||
| a. | The date each plan or program was announced – The notice of the potential repurchase of common and preferred shares occurs quarterly in the Fund’s quarterly report in accordance with Section 23(c) of the Investment Company Act of 1940, as amended. | |
| b. | The dollar amount (or share or unit amount) approved – Any or all common shares outstanding may be repurchased when the Fund’s common shares are trading at a discount of 10% or more from the net asset value of the shares. | |
| Any or all preferred shares outstanding may be repurchased when the Fund’s preferred shares are trading at a discount to the liquidation value of $25.00. | ||
| c. | The expiration date (if any) of each plan or program – The Fund’s repurchase plans are ongoing. | |
| d. | Each plan or program that has expired during the period covered by the table – The Fund’s repurchase plans are ongoing. | |
| e. | Each plan or program the registrant has determined to terminate prior to expiration, or under which the registrant does not intend to make further purchases. – The Fund’s repurchase plans are ongoing. | |
Item 10. Submission of Matters to a Vote of Security Holders.
On January 15, 2010, the Board of Trustees of The Gabelli Utility Trust (the “Fund”) approved and
adopted an amendment (the “Amendment”) to the Amended and Restated By-Laws of the Fund. The
Amendment was effective as of January 15, 2010. The Amendment sets forth the processes and
procedures that shareholders of the Fund must follow, and specifies additional information that
shareholders of the Fund must provide, when proposing trustee nominations at any annual or special
meeting of shareholders or other business to be considered at an annual meeting of shareholders.
Item 11. Controls and Procedures.
| (a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). | ||
| (b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits.
| (a)(1) | Not applicable. |
| (a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. | ||
| (a)(3) | Not applicable. | ||
| (b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes- Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
| (registrant) The Gabelli Utility Trust | ||||
By (Signature and Title)*
|
/s/ Bruce N. Alpert
|
|||
Date 9/1/10 |
||||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, this report has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By (Signature and Title)*
|
/s/ Bruce N. Alpert
|
|||
Date 9/1/10 |
| * | Print the name and title of each signing officer under his or her signature. |