UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09243
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The Gabelli Utility Trust
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(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
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(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: June 30, 2005
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
[LOGO OMITTED]
THE GABELLI UTILITY TRUST
THE GABELLI UTILITY TRUST
Semi-Annual Report
June 30, 2005
TO OUR SHAREHOLDERS,
During the second quarter of 2005, the Gabelli Utility Trust's (the
"Trust") total return rose 7.8% on a net asset value ("NAV") basis while the
Standard & Poor's ("S&P") 500 Utility Index rose 9.3% and the Lipper Utility
Fund Average rose 7.3%. For the six-month period ended June 30, 2005, the
Trust's NAV total return was 9.6% versus gains of 15.2% and 10.0% for the S&P
500 Utility Index and the Lipper Utility Fund Average, respectively. The Trust's
market price on June 30, 2005 was $9.87, which equates to a 32.7% premium to its
net asset value ("NAV") of $7.44. The Trust's market price rose 7.5% and 10.4%
for the second quarter and the six-month period ended June 30, 2005,
respectively.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2005.
COMPARATIVE RESULTS
--------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2005(A)
------------------------------------------------
Since
Year to Inception
Quarter Date 1 Year 3 Year 5 Year (7/9/99)
------- ------- ------ ------ ------ ---------
GABELLI UTILITY TRUST NAV RETURN(B) ............. 7.76% 9.58% 22.98% 12.92% 10.19% 9.83%
GABELLI UTILITY TRUST INVESTMENT RETURN(C) ...... 7.50 10.37 15.54 12.26 13.67 13.48
S&P 500 Utility Index ........................... 9.31 15.24 37.98 13.80 4.01 3.64
Lipper Utility Fund Average ..................... 7.30 10.00 30.25 14.50 1.83 3.01
(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. DIVIDENDS ARE CONSIDERED REINVESTED. PERFORMANCE FOR
PERIODS LESS THAN ONE YEAR IS NOT ANNUALIZED. CURRENT PERFORMANCE MAY BE
LOWER OR HIGHER THAN THE PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM
FOR PERFORMANCE INFORMATION AS OF THE MOST RECENT MONTH END. INVESTORS
SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS AND CHARGES AND EXPENSES
OF THE TRUST CAREFULLY BEFORE INVESTING. THE S&P 500 UTILITY INDEX IS AN
UNMANAGED INDICATOR OF ELECTRIC AND GAS UTILITY STOCK PERFORMANCE, WHILE
THE LIPPER AVERAGE REFLECTS THE AVERAGE PERFORMANCE OF OPEN END MUTUAL
FUNDS CLASSIFIED IN THIS PARTICULAR CATEGORY.
(b) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN NET ASSET
VALUE ("NAV"), REINVESTMENT OF DISTRIBUTIONS AT NAV ON THE EX-DIVIDEND
DATE AND ADJUSTMENTS FOR RIGHTS OFFERINGS, AND ARE NET OF EXPENSES. SINCE
INCEPTION RETURN BASED ON INITIAL NET ASSET VALUE 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 BASED ON INITIAL
NET ASSET VALUE OF $7.50.
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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. 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)
The following table presents portfolio holdings as a percent of total
investments:
Energy and Utilities: Integrated ...................................... 35.5%
Energy and Utilities: Electric ........................................ 20.2%
U.S. Government Obligations ........................................... 12.1%
Energy and Utilities: Natural Gas ..................................... 11.2%
Telecommunications .................................................... 5.4%
Cable and Satellite ................................................... 3.1%
Repurchase Agreements ................................................. 2.9%
Energy and Utilities: Water ........................................... 2.7%
Energy and Utilities: Oil ............................................. 1.4%
Diversified Industrial ................................................ 1.1%
Wireless Communications ............................................... 1.1%
Transportation ........................................................ 0.9%
Equipment and Supplies ................................................ 0.8%
Entertainment ......................................................... 0.7%
Communications Equipment .............................................. 0.4%
Computer Software and Services ........................................ 0.3%
Metals and Mining ..................................................... 0.2%
------
100.0%
======
THE UTILITY TRUST (THE "TRUST") FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS
WITH 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 ENDING MARCH 31, 2005. SHAREHOLDERS
MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE TRUST AT
800-GABELLI (800-422-3554). THE TRUST'S FORM N-Q IS AVAILABLE ON THE SEC'S
WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'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 Trust files Form N-PX with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. A description of
the Trust's proxy voting policies and procedures are available without charge,
upon request, (i) by calling 800-GABELLI (800-422-3554); (ii) by writing to The
Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; and (iii) by visiting
the Securities and Exchange Commission's website at www.sec.gov.
SHAREHOLDER MEETING -- MAY 9, 2005 -- FINAL RESULTS
The Annual Meeting of Shareholders was held on May 9, 2005 at the Hyatt
Regency in Old Greenwich, Connecticut. At that meeting, common and preferred
shareholders voting together as a single class elected Frank J. Fahrenkopf, Jr.,
Robert J. Morrissey and Salvatore J. Zizza as Trustees of the Trust. There were
27,358,235 votes, 27,383,011 votes and 27,414,327 votes cast in favor of each
Trustee and 388,549 votes, 363,773 votes and 332,457 votes withheld for each
Trustee, respectively. In addition, preferred shareholders voting as a separate
class elected Anthony J. Colavita as a Trustee of the Trust. There were
1,160,670 votes cast in favor of this Trustee and 12,336 votes withheld for this
Trustee.
Mario J. Gabelli, Thomas E. Bratter, James P. Conn, Vincent D. Enright,
John D. Gabelli, Karl Otto Pohl and Anthony R. Pustorino continue to serve in
their capacities as Trustees of the Trust.
We thank you for your participation and appreciate your continued support.
2
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS
JUNE 30, 2005 (UNAUDITED)
MARKET
SHARES COST VALUE
----------- ------------ ------------
COMMON STOCKS -- 83.6%
AGRICULTURE -- 0.0%
800 Cadiz Inc.+ ....................... $ 3,000 $ 15,200
------------ ------------
CABLE AND SATELLITE -- 3.1%
50,000 Cablevision Systems Corp., Cl.
A+ ............................. 1,316,172 1,610,000
5,000 Cogeco Cable Inc. ................. 105,008 110,594
20,000 Cogeco Inc. ...................... 389,461 438,459
15,000 Comcast Corp., Cl. A+ ............. 483,950 460,500
100,000 DIRECTV Group Inc.+ ............... 1,648,749 1,550,000
65,000 EchoStar Communications
Corp., Cl. A ................... 2,030,435 1,959,750
2,500 Insight Communications
Co. Inc., Cl. A+ ............... 24,795 27,625
32,900 Liberty Global Inc., Cl. A+ ....... 1,362,626 1,535,443
20,000 Rogers Communications Inc.,
Cl. B .......................... 553,618 657,600
------------ ------------
7,914,814 8,349,971
------------ ------------
COMMUNICATIONS EQUIPMENT -- 0.4%
280,000 Furukawa Electric Co. Ltd.+ ....... 1,441,034 1,085,565
2,000 Thomas & Betts Corp.+ ............. 63,595 56,480
------------ ------------
1,504,629 1,142,045
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 0.3%
22,000 Storage Technology Corp.+ ......... 801,392 798,380
------------ ------------
DIVERSIFIED INDUSTRIAL -- 1.1%
18,000 Catalytica Energy Systems Inc.+ ... 149,778 33,840
5,000 Cooper Industries Ltd., Cl. A ..... 342,961 319,500
60,000 General Electric Co. .............. 1,990,480 2,079,000
5,000 ITT Industries Inc. ............... 472,309 488,150
------------ ------------
2,955,528 2,920,490
------------ ------------
ENERGY AND UTILITIES: ELECTRIC -- 20.2%
230,000 AES Corp.+ ........................ 1,158,570 3,767,400
369,400 Allegheny Energy Inc.+ ............ 3,864,370 9,316,268
24,000 ALLETE Inc. ....................... 749,469 1,197,600
60,000 American Electric Power Co. Inc. .. 1,918,567 2,212,200
20,000 Calpine Corp.+ .................... 52,600 68,000
30,000 Cleco Corp. ....................... 570,612 647,100
160,000 DPL Inc. .......................... 3,365,523 4,392,000
24,000 DTE Energy Co. .................... 978,366 1,122,480
200,000 Duquesne Light Holdings Inc. ...... 3,488,741 3,736,000
90,000 Edison International .............. 1,794,977 3,649,500
200,000 El Paso Electric Co.+ ............. 2,637,085 4,090,000
8,000 Electric Power Development
Co. Ltd. ....................... 240,854 231,539
130,000 FPL Group Inc. .................... 4,212,252 5,467,800
MARKET
SHARES COST VALUE
----------- ------------ ------------
105,000 Great Plains Energy Inc. .......... $ 3,272,187 $ 3,348,450
41,000 Green Mountain Power Corp. ........ 893,905 1,223,440
22,500 Pepco Holdings Inc. ............... 449,918 538,650
105,000 TECO Energy Inc. .................. 1,580,547 1,985,550
16,000 TXU Corp. ......................... 236,040 1,329,440
22,000 UIL Holdings Corp. ................ 966,711 1,183,820
175,000 Unisource Energy Corp. ............ 4,306,113 5,381,250
------------ ------------
36,737,407 54,888,487
------------ ------------
ENERGY AND UTILITIES: INTEGRATED -- 34.7%
75,000 Alliant Energy Corp. .............. 1,824,382 2,111,250
20,000 Ameren Corp. ...................... 892,320 1,106,000
480,000 Aquila Inc.+ ...................... 1,440,276 1,732,800
1,500 Areva ............................. 613,197 640,959
5,000 Avista Corp. ...................... 85,710 92,950
35,000 Black Hills Corp. ................. 1,060,967 1,289,750
68,000 Central Vermont Public Service
Corp. .......................... 1,376,424 1,258,000
55,000 CH Energy Group Inc. .............. 2,495,940 2,674,650
8,000 Chubu Electric Power Co. Inc. ..... 189,551 191,867
8,000 Chugoku Electric Power Co. Inc. ... 150,761 156,163
70,000 Cinergy Corp. ..................... 2,363,603 3,137,400
190,000 CMS Energy Corp.+ ................. 1,473,074 2,861,400
57,000 Consolidated Edison Inc. .......... 2,257,001 2,669,880
76,000 Constellation Energy Group ........ 2,162,030 4,384,440
3,000 Dominion Resources Inc. ........... 152,527 220,170
150,000 Duke Energy Corp. ................. 2,845,440 4,459,500
180,000 El Paso Corp. ..................... 1,638,285 2,073,600
12,000 Empire District Electric Co. ...... 245,171 287,520
200,000 Enel SpA .......................... 1,531,070 1,742,624
80,000 Energy East Corp. ................. 1,767,343 2,318,400
3,000 Entergy Corp. ..................... 84,249 226,650
55,979 FirstEnergy Corp. ................. 1,964,896 2,693,150
87,900 Florida Public Utilities Co. ...... 1,133,947 1,670,979
50,000 Hawaiian Electric Industries
Inc. ........................... 1,321,256 1,340,500
300,000 Hera SpA .......................... 433,286 835,915
8,000 Hokkaido Electric Power Co. Inc. .. 156,870 163,736
8,000 Hokuriku Electric Power Co. ....... 146,449 152,556
8,000 Kansai Electric Power Co. Inc. .... 158,472 160,851
30,000 Korea Electric Power Corp., ADR ... 445,796 470,100
8,000 Kyushu Electric Power Co. Inc. .... 167,818 173,835
66,000 Maine & Maritimes Corp. ........... 2,096,172 1,617,000
65,700 MGE Energy Inc. ................... 1,940,590 2,390,166
See accompanying notes to financial statements.
3
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2005 (UNAUDITED)
MARKET
SHARES COST VALUE
----------- ------------ ------------
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES: INTEGRATED (CONTINUED)
300,000 Mirant Corp.+ ..................... $ 88,995 $ 153,600
45,000 NiSource Inc. ..................... 970,021 1,112,850
170,000 Northeast Utilities ............... 3,354,148 3,546,200
215,000 NSTAR ............................. 4,848,628 6,628,450
101,000 OGE Energy Corp. .................. 2,429,412 2,922,940
12,000 Ormat Technologies Inc. ........... 180,000 229,200
25,000 Otter Tail Corp. .................. 667,745 683,250
50,000 PG&E Corp. ........................ 1,309,559 1,877,000
20,000 PNM Resources Inc. ................ 290,976 576,200
100,000 Progress Energy Inc. .............. 4,383,880 4,524,000
40,000 Progress Energy Inc., CVO+ ........ 20,800 5,400
25,000 Public Service Enterprise
Group Inc. ..................... 1,299,329 1,520,500
35,000 Puget Energy Inc. ................. 795,990 818,300
55,000 SCANA Corp. ....................... 1,694,645 2,349,050
8,000 Shikoku Electric Power Co. Inc. ... 155,987 159,408
30,000 Sierra Pacific Resources+ ......... 227,798 373,500
8,000 Tohoku Electric Power Co. Inc. .... 147,399 170,589
8,000 Tokyo Electric Power Co. Inc. ..... 191,450 190,785
26,900 Unitil Corp. ...................... 712,856 726,300
47,000 Vectren Corp. ..................... 1,162,166 1,350,310
242,500 Westar Energy Inc. ................ 3,775,797 5,827,275
80,000 Wisconsin Energy Corp. ............ 2,534,731 3,120,000
50,000 WPS Resources Corp. ............... 2,542,471 2,812,500
270,000 Xcel Energy Inc. .................. 4,521,685 5,270,400
------------ ------------
74,921,341 94,252,768
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS -- 11.2%
28,000 AGL Resources Inc. ................ 692,019 1,082,200
55,000 Atmos Energy Corp. ................ 1,349,828 1,584,000
35,000 Cascade Natural Gas Corp. ......... 748,033 717,500
10,000 Chesapeake Utilities Corp. ........ 224,113 305,500
29,700 Delta Natural Gas Co. Inc. ........ 494,549 768,042
40,000 Dynegy Inc., Cl. A+ ............... 250,000 194,400
18,000 EnergySouth Inc. .................. 426,946 498,780
100,000 KeySpan Corp. ..................... 3,586,039 4,070,000
100,000 National Fuel Gas Co. ............. 2,436,172 2,891,000
90,000 Nicor Inc. ........................ 3,094,431 3,705,300
100,000 ONEOK Inc. ........................ 1,837,227 3,265,000
50,000 Peoples Energy Corp. .............. 1,981,623 2,173,000
36,000 Piedmont Natural
Gas Co. Inc. ................... 568,829 864,720
6,000 RGC Resources Inc. ................ 128,344 157,500
140,000 SEMCO Energy Inc.+ ................ 1,232,605 838,600
110,000 Southern Union Co.+ ............... 1,848,448 2,700,511
180,000 Southwest Gas Corp. ............... 4,469,506 4,591,800
------------ ------------
25,368,712 30,407,853
------------ ------------
MARKET
SHARES COST VALUE
----------- ------------ ------------
ENERGY AND UTILITIES: OIL -- 1.4%
2,000 Anadarko Petroleum Corp. .......... $ 141,060 $ 164,300
20,000 Exxon Mobil Corp. ................. 1,168,383 1,149,400
26,000 Kaneb Services LLC ................ 1,112,570 1,125,280
4,000 Royal Dutch Petroleum Co. ......... 237,320 259,600
17,000 Unocal Corp. ...................... 940,669 1,105,850
------------ ------------
3,600,002 3,804,430
------------ ------------
ENERGY AND UTILITIES: WATER -- 2.7%
14,000 American States Water Co. ......... 312,701 411,180
16,000 Aqua America Inc. ................. 209,103 475,840
16,500 Artesian Resources Corp., Cl. A ... 257,250 488,565
20,500 BIW Ltd. .......................... 385,069 383,760
20,520 California Water Service Group .... 566,928 770,321
7,500 Connecticut Water Service Inc. .... 146,455 187,425
51,333 Middlesex Water Co. ............... 801,882 996,887
24,088 Pennichuck Corp. .................. 471,751 460,563
61,000 SJW Corp. ......................... 1,970,320 2,867,610
7,716 Southwest Water Co. ............... 52,052 91,280
6,000 York Water Co. .................... 108,269 126,840
------------ ------------
5,281,780 7,260,271
------------ ------------
ENTERTAINMENT -- 0.7%
30,000 Time Warner Inc.+ ................. 525,860 501,300
45,000 Vivendi Universal SA, ADR ......... 1,412,075 1,409,850
------------ ------------
1,937,935 1,911,150
------------ ------------
EQUIPMENT AND SUPPLIES -- 0.8%
50,000 Capstone Turbine Corp.+ ........... 83,080 63,500
25,000 CUNO Inc.+ ........................ 1,777,746 1,786,000
10,000 Mueller Industries Inc. ........... 440,698 271,000
------------ ------------
2,301,524 2,120,500
------------ ------------
METALS AND MINING -- 0.2%
25,000 Compania de Minas
Buenaventura SA, ADR ........... 549,835 574,750
------------ ------------
REAL ESTATE -- 0.0%
3,250 Brascan Corp., Cl. A .............. 78,410 124,020
------------ ------------
TELECOMMUNICATIONS -- 4.8%
100,000 AT&T Corp. ........................ 1,902,440 1,904,000
60,000 BCE Inc. .......................... 1,302,420 1,420,800
35,000 BellSouth Corp. ................... 970,977 929,950
33,000 BT Group plc, ADR ................. 1,146,449 1,372,800
50,000 CenturyTel Inc. ................... 1,572,826 1,731,500
175,000 Cincinnati Bell Inc.+ ............. 814,934 752,500
10,200 Commonwealth Telephone
Enterprises Inc. ............... 394,296 427,482
20,000 D&E Communications Inc. ........... 190,498 194,000
20,000 Deutsche Telekom AG, ADR .......... 367,940 368,400
See accompanying notes to financial statements.
4
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2005 (UNAUDITED)
MARKET
SHARES COST VALUE
----------- ------------ ------------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
2,000 France Telecom SA, ADR ............. $ 22,799 $ 58,280
200 Hutchison Telecommunications
International Ltd.+ .............. 163 198
100,000 MCI Inc. ........................... 2,588,315 2,571,000
500 Mobistar SA ........................ 44,141 41,811
200 PT Indosat Tbk ..................... 128 113
1,200 Tele2 AB, Cl. B .................... 14,604 11,290
3,000 Telecom Italia SpA, ADR ............ 99,726 93,930
40,000 Touch America Holdings Inc.+ ....... 38,488 28
30,000 Verizon Communications Inc. ........ 1,071,989 1,036,500
------------ ------------
12,543,133 12,914,582
------------ ------------
TRANSPORTATION -- 0.9%
25,000 GATX Corp. ......................... 760,114 862,500
40,000 Overnite Corp. ..................... 1,703,560 1,719,200
------------ ------------
2,463,674 2,581,700
------------ ------------
WIRELESS COMMUNICATIONS -- 1.1%
200 America Movil SA de CV,
Cl. L, ADR ....................... 9,424 11,922
2,000 China Mobile (Hong Kong)
Ltd., ADR ........................ 33,988 37,180
2,000 China Unicom Ltd., ADR ............. 16,278 16,760
200 Cosmote Mobile Telecommunications SA 3,702 3,655
4,000 Mobile TeleSystems, ADR ............ 137,612 134,600
190 MobileOne Ltd. ..................... 218 246
380,000 O2 plc+ ............................ 387,488 927,651
600 SK Telecom Co. Ltd., ADR ........... 12,374 12,240
200 SmarTone Telecommunications
Holdings Ltd. .................... 207 220
1,000 Telefonica Moviles SA, ADR ......... 11,144 10,610
200 Tim Hellas Telecommunications SA,
ADR .............................. 3,316 3,794
200 Total Access Communication plc+ .... 714 640
30,000 United States Cellular Corp.+ ...... 1,391,960 1,498,200
6,000 Vimpel-Communications, ADR+ ........ 196,099 204,180
200 Virgin Mobile Holdings plc ......... 868 924
200 Vodafone Group plc, ADR ............ 5,666 4,864
------------ ------------
2,211,058 2,867,686
------------ ------------
TOTAL COMMON STOCKS ................ 181,174,174 226,934,283
------------ ------------
CONVERTIBLE PREFERRED STOCKS -- 1.4%
ENERGY AND UTILITIES: INTEGRATED -- 0.8%
2,000 El Paso Corp., 4.990%
Cv. Pfd.(b) ...................... 1,945,987 2,124,136
------------ ------------
MARKET
SHARES COST VALUE
----------- ------------ ------------
TELECOMMUNICATIONS -- 0.6%
31,033 Citizens Communications Co., 5.000%
Cv. Pfd. ......................... $ 1,542,645 $ 1,799,914
------------ ------------
TOTAL CONVERTIBLE PREFERRED
STOCKS ........................... 3,488,632 3,924,050
------------ ------------
PRINCIPAL
AMOUNT
-----------
SHORT-TERM OBLIGATIONS -- 15.0%
REPURCHASE AGREEMENTS -- 2.9%
$ 7,701,000 Barclays Capital Inc., 2.850%,
dated 06/30/05, due 07/01/05,
proceeds at maturity,
$7,701,610(a) .................... 7,701,000 7,701,000
------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- 12.1%
33,000,000 U.S. Treasury Bill, 2.718%++,
07/21/05 ......................... 32,950,317 32,950,317
------------ ------------
TOTAL SHORT-TERM OBLIGATIONS ....... 40,651,317 40,651,317
------------ ------------
TOTAL INVESTMENTS -- 100.0% ...................... $225,314,123 271,509,650
============
LIABILITIES IN EXCESS OF OTHER ASSETS .......................... (147,285)
PREFERRED STOCK
(1,185,200 preferred shares outstanding) ..................... (54,605,000)
-----------
NET ASSETS COMMON SHARES
(29,142,767 common shares outstanding) ....................... $216,757,365
============
NET ASSET VALUE PER COMMON SHARE
($216,757,365 / 29,142,767 shares outstanding) ............... $ 7.44
============
------------
(a) Collateralized by U.S. Treasury Bond, 6.125%, due 08/15/29, market value
$7,855,020.
(b) 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,
2005, the Rule 144A securities are considered liquid and the market value
amounted to $2,124,136 or 0.8% of total investments.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
CVO Contingent Value Obligation
See accompanying notes to financial statements.
5
THE GABELLI UTILITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2005 (UNAUDITED)
ASSETS:
Investments, at value (cost $225,314,123) ........... $271,509,650
Cash and foreign currency, at value
(cost $76,959) .................................... 76,668
Dividends and interest receivable ................... 515,569
Receivable for investments sold ..................... 518
Unrealized appreciation on swap contracts ........... 51,252
Other assets ........................................ 5,352
------------
TOTAL ASSETS ........................................ 272,159,009
------------
LIABILITIES:
Payable for investments purchased ................... 10,680
Payable for investment advisory fees ................ 446,141
Dividends payable ................................... 23,276
Payable for offering expenses ....................... 106,619
Payable for shareholder communications fees ......... 95,115
Other accrued expenses and liabilities .............. 114,813
------------
TOTAL LIABILITIES ................................... 796,644
------------
PREFERRED STOCK:
Series A Cumulative Preferred Stock (5.625%,
$25 liquidation value, $0.001 par value,
1,200,000 shares authorized with 1,184,200
shares issued and outstanding) .................... 29,605,000
Series B Cumulative Preferred Stock (Auction
Rate, $25,000 liquidation value, $0.001 par
value, 1,000 shares authorized with 1,000
shares issued and outstanding) .................... 25,000,000
------------
TOTAL PREFERRED STOCK ............................... 54,605,000
------------
NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS ...................................... $216,757,365
============
NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS CONSIST OF:
Shares of beneficial interest, at par value ......... $ 29,143
Additional paid-in capital .......................... 171,646,095
Accumulated net realized loss on investments
and foreign currency transactions ................. (1,164,053)
Net unrealized appreciation on investments
and swap contracts ................................ 46,246,779
Net unrealized depreciation on foreign
currency translations ............................. (599)
------------
NET ASSETS .......................................... $216,757,365
============
NET ASSET VALUE PER COMMON SHARE:
($216,757,365 / 29,142,767 shares outstanding;
unlimited number of shares authorized of
$0.001 par value) ................................... $ 7.44
============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $29,354) ......... $ 3,182,530
Interest ............................................ 813,321
------------
TOTAL INVESTMENT INCOME ............................. 3,995,851
------------
EXPENSES:
Investment advisory fees ............................ 1,298,332
Shareholder communications expenses ................. 172,074
Shareholder services fees ........................... 107,836
Payroll expenses .................................... 89,348
Auction agent expenses .............................. 31,720
Legal and audit fees ................................ 30,377
Trustees' fees ...................................... 27,075
Custodian fees ...................................... 14,043
Miscellaneous expenses .............................. 82,502
------------
TOTAL EXPENSES ...................................... 1,853,307
------------
NET INVESTMENT INCOME ............................... 2,142,544
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, SWAP CONTRACTS AND
FOREIGN CURRENCY:
Net realized gain on investments .................... 2,129,526
Net realized loss on foreign currency
transactions ...................................... (341)
------------
Net realized gain on investments and
foreign currency transactions ..................... 2,129,185
Net change in unrealized appreciation/depreciation
on investments, swap contracts and foreign
currency translations ............................. 15,624,527
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, SWAP CONTRACTS AND
FOREIGN CURRENCY .................................. 17,753,712
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................... 19,896,256
Total Distributions to Preferred
Stock Shareholders ................................ (1,186,567)
------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO
COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS ......................... $ 18,709,689
============
See accompanying notes to financial statements.
6
THE GABELLI UTILITY TRUST
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
SIX MONTHS ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
---------------- -----------------
OPERATIONS:
Net investment income ............................................. $ 2,142,544 $ 3,723,477
Net realized gain on investments and foreign currency
transactions .................................................... 2,129,185 1,155,173
Net change in unrealized appreciation/depreciation on
investments, swap contracts and foreign currency translations ... 15,624,527 22,003,591
------------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .............. 19,896,256 26,882,241
------------- ------------
DISTRIBUTIONS TO PREFERRED STOCK SHAREHOLDERS:
Net investment income ............................................. (595,139)* (1,374,189)
Net realized short-term gains on investments and
foreign currency transactions ................................... (100,293)* (434,680)
Net realized long-term gains on investments and foreign currency
transactions .................................................... (491,135)* (238,920)
------------- ------------
TOTAL DISTRIBUTIONS TO PREFERRED STOCK SHAREHOLDERS ............... (1,186,567) (2,047,789)
------------- ------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS ....................................... 18,709,689 24,834,452
------------- ------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ............................................. (1,547,405)* (2,352,322)
Net realized short-term gains on investments and foreign
currency transactions ........................................... (260,768)* (744,082)
Net realized long-term gains on investments and foreign currency
transactions .................................................... (1,276,989)* (408,981)
Return of capital ................................................. (7,371,684)* (13,426,831)
------------- ------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS ........................ (10,456,846) (16,932,216)
------------- ------------
TRUST SHARE TRANSACTIONS:
Net increase in net assets from common shares issued upon
reinvestment of dividends and distributions and rights
offering ........................................................ 1,521,228 42,537,829
Net increase in net assets from repurchase of preferred shares .... -- 30,323
Offering costs for preferred shares charged to paid-in capital .... 25,000 15,102
Offering costs for issuance of rights charged to paid-in capital .. -- (34,089)
------------- ------------
NET INCREASE IN NET ASSETS FROM TRUST SHARE TRANSACTIONS .......... 1,546,228 42,549,165
------------- ------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS .... 9,799,071 50,451,401
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Beginning of period ............................................... 206,958,294 156,506,893
------------- ------------
End of period ..................................................... $ 216,757,365 $206,958,294
============= ============
* Amounts are subject to change and recharacterization at fiscal year end.
See accompanying notes to financial statements.
7
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION. The Gabelli Utility Trust (the "Trust") 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"), whose primary objective is long-term growth of capital
and income. The Trust had no operations prior to July 9, 1999, other than the
sale of 10,000 shares of beneficial interest for $100,000 to The Gabelli Equity
Trust Inc. (the "Equity Trust") at $10.00 per share. On July 9, 1999, the Trust
had a 4 for 3 stock split making the balance of Trust shares held by the Equity
Trust as 13,333. On July 9, 1999, the Equity Trust contributed $79,487,260 in
cash and securities in exchange for shares of the Trust, and on the same date
distributed such shares to Equity Trust shareholders of record on July 1, 1999
at the rate of one share of the Trust for every ten shares of the Equity Trust.
Investment operations commenced on July 9, 1999.
The Trust 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 Trust has adopted a policy to provide
shareholders with notice at least 60 days prior to the implementation of any
change in the 80% Policy.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
followed by the Trust 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 foreign markets are generally
valued at the preceding closing values of such securities on their respective
exchanges or if after the close of the foreign markets, but prior to the close
of business on the day the securities are being valued, market conditions change
significantly, certain foreign securities may be fair valued pursuant to
procedures established by the Board. Debt instruments that are not credit
impaired with remaining maturities of 60 days or less are valued at amortized
cost, unless the Board determines such does not reflect the securities' fair
value, in which case these securities will be valued at their fair value as
determined by the Board. Debt instruments having a maturity greater than 60 days
for which market quotations are readily available are valued at the latest
average of the bid and asked prices. If there were no asked prices quoted on
such day, the security is valued using the closing bid price. Futures contracts
are valued at the closing settlement price of the exchange or board of trade on
which the applicable contract is traded.
Securities and assets for which market quotations are not readily
available are valued at their fair value as determined in good faith under
procedures established by and under the general supervision of the Board. Fair
valuation methodologies and procedures may include, but are not limited to:
analysis and review of available financial and non-
8
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
financial information about the company; comparisons to the valuation and
changes in valuation of similar securities, including a comparison of foreign
securities to the equivalent U.S. dollar value ADR securities at the close of
the U.S. exchange; and evaluation of any other information that could be
indicative of the value of the security.
REPURCHASE AGREEMENTS. The Trust may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System 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 Trust takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Trust to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Trust's holding period.
The Trust will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by the Trust in each agreement. The Trust will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Trust may be delayed or limited.
SWAP AGREEMENTS. The Trust may enter into interest rate swap or cap
transactions. The use of interest rate swaps and caps 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 Trust would agree to pay to the other party to the interest rate swap
(which is known as the "counterparty") periodically a fixed rate payment in
exchange for the counterparty agreeing to pay to the Trust periodically a
variable rate payment that is intended to approximate the Trust's variable rate
payment obligation on the Series B Preferred Stock. In an interest rate cap, the
Trust 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 the counterparty payments of the difference based on the notional amount of
such cap. Interest rate swap and cap transactions introduce additional risk
because the Trust would remain obligated to pay preferred stock dividends when
due in accordance with the Articles Supplementary even if the counterparty
defaulted. If there is a default by the counterparty to a swap contract, the
Trust will be limited to contractual remedies pursuant to the agreements related
to the transaction. There is no assurance that the swap contract counterparties
will be able to meet their obligations pursuant to the swap contracts or that,
in the event of default, the Trust will succeed in pursuing contractual
remedies. The Trust thus assumes the risk that it may be delayed in or prevented
from obtaining payments owed to it pursuant to the swap contracts. The
creditworthiness of the swap contract counterparties is closely monitored in
order to minimize this risk. Depending on the general state of short term
interest rates and the returns on the Trust's portfolio securities at that point
in time, such a default could negatively affect the Trust's ability to make
dividend payments for the Series B Preferred Stock. In addition, at the time an
interest rate swap or cap transaction reaches its scheduled termination date,
there is a risk that the Trust 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. If this occurs, it could have a negative impact on the
Trust's ability to make dividend payments on the Series B Preferred Stock.
The use of derivative instruments involves, to varying degrees, elements
of market risk in excess of the amount recognized in the Statement of Assets and
Liabilities.
9
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Unrealized gains related to swaps are reported as an asset and unrealized
losses are reported as a liability on the Statement of Assets and Liabilities.
The change in value of swaps, including the accrual of periodic amounts of
interest to be paid or received on swaps is reported as unrealized gains or
losses 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. Swap
agreements involve, to varying degrees, elements of market and counterparty
risk, and exposure to loss in excess of the related amounts reflected in the
Statement of Assets and Liabilities.
The Trust has entered into one interest rate swap agreement with Citibank
N.A. Under the agreement the Trust receives a variable rate of interest and pays
a respective fixed rate of interest on the nominal value of the swap. Details of
the swap at June 30, 2005 are as follows:
NOTIONAL VARIABLE RATE* TERMINATION UNREALIZED
AMOUNT FIXED RATE (RATE RESET MONTHLY) DATE DEPRECIATION
------------ ---------- -------------------- ------------ ------------
$ 25,000,000 4.00% 3.15% July 2, 2010 $ 51,252
----------
*Based on Libor (London Interbank Offered Rate).
FUTURES CONTRACTS. The Trust 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. Such investments will only be
made if they are economically appropriate to the reduction of risks involved in
the management of the Trust's investments. Upon entering into a futures
contract, the Trust 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 Trust each day, depending on the daily fluctuation of the
value of the contract. The daily changes in the contract are included in
unrealized appreciation/depreciation on investments and futures contracts. The
Trust recognizes a realized gain or loss when the contract is closed. At June
30, 2005, there were no open futures contracts.
There are several risks in connection with the use of futures contracts as
a hedging device. 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. These contracts may involve market
risk in excess of the unrealized gain or loss reflected in the Statement of
Assets and Liabilities. In addition, there is the risk that the Trust may not be
able to enter into a closing transaction because of an illiquid secondary
market.
FORWARD FOREIGN EXCHANGE CONTRACTS. The Trust may engage in forward
foreign exchange contracts for 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 investments and
foreign currency translations. When the contract is closed, the Trust 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 Trust'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. These contracts may
involve market risk in excess of the unrealized gain or loss reflected in the
Statement of Assets and Liabilities. In addition, the Trust could be exposed to
risks if the counterparties to the contracts are unable to meet the terms of
their contracts. At June 30, 2005, there were no open forward foreign exchange
contracts.
10
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Trust are
maintained in United States (U.S.) dollars. Foreign currencies, investments and
other assets and liabilities are translated into U.S. dollars at the exchange
rates prevailing at the end of the period, and purchases and sales of investment
securities, income and expenses are translated at the exchange rate prevailing
on the respective dates of such transactions. Unrealized gains and losses, which
result from changes in foreign exchange rates and/or changes in market prices of
securities, have been included in unrealized appreciation/depreciation on
investments and foreign currency 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 Trust
and the amounts actually received. The portion of foreign currency gains and
losses related to fluctuation in exchange rates between the initial trade date
and subsequent sale trade date is included in realized gain/(loss) on
investments.
FOREIGN SECURITIES. The Trust may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies and possible future adverse
political and economic developments. Moreover, 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.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for as of the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Distributions to common
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with Federal income tax
regulations, which may differ from that determined under U.S. generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities held by the
Trust, timing differences and differing characterizations of distributions made
by the Trust.
Distributions to Shareholders of the Trust's 5.625% Series A Cumulative
Preferred Stock and Series B Auction Rate Cumulative Preferred Stock
("Cumulative Preferred Stock") are recorded on a daily basis and are determined
as described in Note 5.
For the year ended December 31, 2004, reclassifications were made to
decrease accumulated distributions in excess of net investment income by $3,970
and to increase accumulated net realized loss on investments and foreign
currency transactions by $3,970.
The tax character of distributions paid during the fiscal year ended
December 31, 2004 was as follows:
YEAR ENDED
DECEMBER 31, 2004
--------------------------
Common Preferred
------------ -----------
Distributions paid from:
Ordinary income
(inclusive of short term capital gains).. $ 3,096,404 $ 1,808,869
Net long term capital gains ................ 408,981 238,920
Non-taxable return of capital .............. 13,426,831 --
------------ -----------
Total distributions paid ................... $ 16,932,216 $ 2,047,789
============ ===========
11
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
PROVISION FOR INCOME TAXES. The Trust 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 Trust to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for Federal income taxes is required.
Dividends and interest from non-U.S. sources received by the Trust are
generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such
withholding taxes may be reduced or eliminated under the terms of applicable
U.S. income tax treaties, and the Trust intends to undertake any procedural
steps required to claim the benefits of such treaties.
As of December 31, 2004, the components of accumulated earnings/(losses)
on a tax basis were as follows:
Net unrealized appreciation on investments and foreign currency .. $ 29,457,600
Dividends payable ................................................ (28,733)
------------
Total ............................................................ $ 29,428,867
============
The following summarizes the tax cost of investments, swap contracts,
foreign currency and related unrealized appreciation/depreciation at June 30,
2005:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
COST APPRECIATION DEPRECIATION (DEPRECIATION)
------------- ------------ ------------ --------------
Investments ........ $ 226,515,947 $ 48,454,846 $ (3,461,143) $ 44,993,703
Swap contracts ..... -- 51,252 -- 51,252
Foreign currency ... 76,364 -- (599) (599)
------------ ------------ --------------
$ 48,506,098 $ (3,461,742) $ 45,044,356
============ ============ ==============
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Trust has entered into an
investment advisory agreement (the "Advisory Agreement") with the Adviser which
provides that the Trust will pay the Adviser 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 preferred stock. In accordance
with the Advisory Agreement, the Adviser provides a continuous investment
program for the Trust's portfolio and oversees the administration of all aspects
of the Trust's business and affairs. The Adviser has agreed to reduce the
management fee on the incremental assets attributable to the Cumulative
Preferred Stock if the total return of the net asset value of the Common Shares
of the Trust, including distributions and advisory fee subject to reduction,
does not exceed the stated dividend rate of the Cumulative Preferred Stock for
the fiscal year.
The Trust's total return on the net asset value of the Common Shares is
monitored on a monthly basis to assess whether the total return on the net asset
value of the Common Shares exceeds the stated dividend rate of each particular
series of Cumulative Preferred Stock for the period. For the six months ended
June 30, 2005, the Trust's total return on the net asset value of the Common
Shares exceeded the stated dividend rate or net swap expense of all outstanding
Preferred Stock. Thus, management fees were accrued on these assets.
During the six months ended June 30, 2005, Gabelli & Company, Inc.
("Gabelli & Company"), an affiliate of the Adviser, received $57,404 in
brokerage commissions as a result of executing agency transactions in portfolio
securities on behalf of the Trust.
In connection with the 2004 Rights Offering ("Rights"), holders of
unexercised rights to purchase Common Shares of the Trust were able to instruct
the Subscription Agent (EquiServe Trust Company) to sell such Rights on their
behalf. The Subscription Agent was permitted to effect such sales through
Gabelli & Company, unless the Subscription Agent was able to negotiate a lower
commission rate with an independent broker. Total commissions from sales of
Rights effected by the Subscription Agent through Gabelli & Company amounted to
$21,882 for the year ended December 31, 2004.
12
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
The cost of calculating the Trust's net asset value per share is a Trust
expense pursuant to the Advisory Agreement. During the six months ended June 30,
2005, the Trust reimbursed the Adviser $22,500 in connection with the cost of
computing the Trust's net asset value, which is included in miscellaneous
expenses in the Statement of Operations.
The Trust is assuming its portion of the allocated cost of the Gabelli
Funds' Chief Compliance Officer in the amount of $2,936 for the six months ended
June 30, 2005 which is included in payroll expenses in the Statement of
Operations.
4. PORTFOLIO SECURITIES. Cost of purchases and proceeds from the sales of
securities, other than short-term securities, for the six months ended June 30,
2005 aggregated $50,760,811 and $8,553,942, respectively.
5. CAPITAL. The charter permits the Trust to issue an unlimited number of shares
of beneficial interest (par value $0.001). The Board of the Trust has authorized
the repurchase of its shares on the open market when the shares are trading at a
discount of 10% or more (or such other percentage as the Board may determine
from time to time) from the net asset value of the shares. During the six months
ended June 30, 2005, the Trust did not repurchase any shares of beneficial
interest in the open market.
Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED
JUNE 30, 2005 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2004
--------------------- ------------------------
Shares Amount Shares Amount
------- ----------- --------- ------------
Shares issued in rights offering ... -- -- 5,779,546 $ 39,981,829
Shares issued upon reinvestment
of dividends and distributions .. 166,064 $ 1,521,228 290,925 2,556,000
------- ----------- --------- ------------
Net increase ....................... 166,064 $ 1,521,228 6,070,471 $ 42,537,829
======= =========== ========= ============
The Trust's Articles of Incorporation authorize the issuance of up to
2,005,000 shares of $0.001 par value Cumulative Preferred Stock. The Cumulative
Preferred Stock is senior to the Common Shares and results 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 Stock are cumulative. The Trust is required by the 1940 Act and by the
Articles Supplementary to meet certain asset coverage tests with respect to the
Cumulative Preferred Stock. If the Trust fails to meet these requirements and
does not correct such failure, the Trust may be required to redeem, in part or
in full, the 5.625% Series A and Series B Auction Rate Cumulative Preferred
Stock 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 Trust's
ability to pay dividends to common shareholders and could lead to sales of
portfolio securities at inopportune times. The income received on the Trust'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 August 20, 2003, the Trust distributed one transferable right for each
of the 15,298,490 Common Shares outstanding to shareholders of record on that
date. Three rights were required to purchase one additional common share at the
subscription price of $7.00 per share. Shareholders who exercised their full
primary subscription rights were eligible for an over-subscription privilege
entitling them to subscribe, subject to certain limitations and a pro-rata
allotment, for any additional shares not purchased pursuant to the primary
subscription plus such additional amounts as authorized by the Board in
accordance with the registration statement. The subscription period expired on
September 25, 2003. The rights
13
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
offering was fully and over-subscribed resulting in the issuance of 7,500,000
Common Shares and proceeds of $52,500,000 to the Trust, prior to the deduction
of expenses of $534,089. The net asset value per share of the Trust common
shareholders was enhanced by approximately $0.12 per share as a result of the
issuance of shares above net asset value.
On October 20, 2004, the Trust distributed one transferable right for each
of the 23,118,091 Common Shares outstanding to shareholders of record on that
date. Four rights were required to purchase one additional common share at the
subscription price of $7.00 per share. Shareholders who exercised their full
primary subscription rights were eligible for an over-subscription privilege
entitling them to subscribe, subject to certain limitations and a pro-rata
allotment, for any additional shares not purchased pursuant to the primary
subscription plus such additional amounts as authorized by the Board in
accordance with the registration statement. The subscription period expired on
November 24, 2004. The rights offering was fully subscribed, having received
over-subscription requests in excess of the shares available for primary
subscription resulting in the issuance of 5,779,546 Common Shares and proceeds
of $40,456,822 to the Trust, prior to the deduction of estimated expenses of
$475,000. The net asset value per share of the Trust common shareholders was
reduced by approximately $0.06 per share as a result of the issuance of shares
below net asset value.
On July 31, 2003, the Trust received net proceeds of $28,877,500 (after
underwriting discounts of $945,000 and offering expenses of $169,949) from the
public offering of 1,200,000 shares of 5.625% Series A Cumulative Preferred
Stock. Commencing July 31, 2008 and thereafter, the Trust, at its option, may
redeem the 5.625% Series A Cumulative Preferred Stock in whole or in part at the
redemption price at any time. During the six months ended June 30, 2005, the
Trust did not repurchase any shares of 5.625% Series A Cumulative Preferred
Stock. All repurchased shares of 5.625% Series A Cumulative Preferred Stock have
been retired. At June 30, 2005, 1,184,200 shares of the 5.625% Series A
Cumulative Preferred Stock were outstanding and accrued dividends amounted to
$18,503.
On July 31, 2003, the Trust received net proceeds of $24,572,500 (after
underwriting discounts of $250,000 and offering expenses of $169,949) from the
public offering of 1,000 shares of Series B Auction Rate Cumulative Preferred
Stock. The dividend rate, as set by the auction process, which is generally held
every 7 days, is expected to vary with short-term interest rates. The dividend
rates of Series B Auction Rate Cumulative Preferred Stock ranged from 2.24% to
3.41% for the six months ended June 30, 2005. Existing shareholders may submit
an order to hold, bid or sell such shares on each auction date. Series B Auction
Rate Cumulative Preferred Stock shareholders may also trade shares in the
secondary market. The Trust, at its option, may redeem the Series B Auction Rate
Cumulative Preferred Stock in whole or in part at the redemption price at any
time. During the six months ended June 30, 2005, the Trust did not redeem any
shares of Series B Auction Rate Cumulative Preferred Stock. At June 30, 2005,
1,000 shares of the Series B Auction Rate Cumulative Preferred Stock were
outstanding with an annualized dividend rate of 3.41% per share and accrued
dividends amounted to $4,736.
The holders of Cumulative Preferred Stock have voting rights equivalent to
those of the holders of Common Shares (one vote per share) and will vote
together with holders of Common Shares as a single class. In addition, the 1940
Act requires that along with approval of a majority of the holders of common
stock, approval of a majority of the holders of any outstanding shares of
Cumulative Preferred Stock, voting separately as a class, would be required to
(a) adopt any plan of reorganization that would adversely affect the Cumulative
Preferred Stock, and (b) take any action requiring a vote of security holders,
including, among other things, changes in the Trust's subclassification as a
closed-end investment company or changes in its fundamental investment
restrictions.
14
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
6. INDUSTRY CONCENTRATION. Because the Trust primarily invests in common stocks
and other securities of foreign and domestic companies in the utility industry,
its portfolio may be subject to greater risk and market fluctuations than a
portfolio of securities representing a broad range of investments.
7. OTHER MATTERS. The Adviser and/or affiliates have received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund shares trading practices. Gabelli Asset Management Inc., the
Adviser's parent company, is responding to these requests for documents and
testimony. The Trust does not believe that these matters will have a material
adverse effect on the Trust's financial position or the results of its
operations.
8. INDEMNIFICATIONS. The Trust enters into contracts that contain a variety of
indemnifications. The Trust's maximum exposure under these arrangements is
unknown. However, the Trust has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
15
THE GABELLI UTILITY TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT
EACH PERIOD:
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ---------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
---------------- --------- --------- -------- -------- --------
OPERATING PERFORMANCE:
Net asset value, beginning of period .............. $ 7.14 $ 6.83 $ 6.27 $ 7.32 $ 8.21 $ 7.62
--------- --------- --------- -------- -------- --------
Net investment income ............................. 0.07 0.16 0.10 0.11 0.12 0.15
Net realized and unrealized gain (loss) on
investments ..................................... 0.62 0.99 1.17 (0.62) (0.32) 1.44
--------- --------- --------- -------- -------- --------
Total from investment operations .................. 0.69 1.15 1.27 (0.51) (0.20) 1.59
--------- --------- --------- -------- -------- --------
DISTRIBUTIONS TO PREFERRED STOCK SHAREHOLDERS:
Net investment income ............................. (0.02)(f) (0.06) (0.01) -- -- --
Net realized gain on investments .................. (0.02)(f) (0.03) (0.04) -- -- --
--------- --------- --------- -------- -------- --------
Total distributions to preferred stock
shareholders .................................... (0.04) (0.09) (0.05) -- -- --
--------- --------- --------- -------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO COMMON SHAREHOLDERS RESULTING
FROM OPERATIONS ................................... 0.65 1.06 1.22 (0.51) (0.20) 1.59
--------- --------- --------- -------- -------- --------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ............................. (0.05)(f) (0.10) (0.09) (0.11) (0.21) (0.06)
Net realized gain on investments .................. (0.05)(f) (0.05) (0.22) (0.36) (0.49) (0.94)
Paid-in capital ................................... (0.26)(f) (0.57) (0.41) (0.25) -- --
--------- --------- --------- -------- -------- --------
Total distributions to common shareholders ........ (0.36) (0.72) (0.72) (0.72) (0.70) (1.00)
--------- --------- --------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Increase in net asset value from common share
transactions .................................... 0.01 0.03 0.03 0.03 0.01 --
Increase/decrease in net asset value from shares
issued in rights offering ....................... -- (0.06) 0.12 0.15 -- --
Increase in net asset value from repurchase of
preferred shares ................................ -- 0.00(a) -- -- -- --
Offering costs for preferred shares charged to
paid-in capital ................................. 0.00(a) 0.00(a) (0.09) -- -- --
Offering costs for issuance of rights charged to
paid-in capital ................................. -- (0.00)(a) -- -- -- --
--------- --------- --------- -------- -------- --------
Total capital share transactions .................. 0.01 (0.03) 0.06 0.18 0.01 --
--------- --------- --------- -------- -------- --------
NET ASSET VALUE ATTRIBUTABLE TO COMMON
SHAREHOLDERS, END OF PERIOD ..................... $ 7.44 $ 7.14 $ 6.83 $ 6.27 $ 7.32 $ 8.21
========= ========= ========= ======== ======== ========
Net asset value total return+ ..................... 9.58% 13.43% 18.60% (6.79)% (3.15)% 22.01%
========= ========= ========= ======== ======== ========
Market value, end of period ....................... $ 9.87 $ 9.30 $ 9.60 $ 8.72 $ 9.33 $ 8.75
========= ========= ========= ======== ======== ========
Total investment return++ ......................... 10.37% 5.11% 19.86% 1.70% 15.82% 29.95%
========= ========= ========= ======== ======== ========
See accompanying notes to financial statements.
16
THE GABELLI UTILITY TRUST
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A COMMON SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT
EACH PERIOD:
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2005 ---------------------------------------------------------
(UNAUDITED) 2004 2003 2002 2001 2000
---------------- --------- --------- -------- -------- --------
RATIOS AND SUPPLEMENTAL DATA:
Net assets including liquidation value of
preferred shares, end of period (in 000's) ...... $ 271,362 $ 261,563 $ 211,507 $ 95,111 $ 82,197 $ 90,669
Net assets attributable to common shares,
end of period (in 000's) ........................ $ 216,757 $ 206,958 $ 156,507 $ 95,111 $ 82,197 $ 90,669
Ratio of net investment income to average net
assets attributable to common shares ............ 2.08%(c) 2.32% 1.52% 1.65% 1.57% 1.88%
Ratio of operating expenses to average net assets
attributable to common shares before fee
reduction ....................................... 1.80%(c) 2.04% 2.04% 1.93% 2.00% 1.95%
Ratio of operating expenses to average net assets
attributable to common shares net of fee
reduction(b) .................................... 1.80%(c) 2.04% 2.04% 1.93% 2.00% 1.95%
Ratio of operating expenses to average net assets
including liquidation value of preferred shares
before fee reduction ............................ 1.43%(c) 1.52% 1.68% -- -- --
Ratio of operating expenses to average net assets
including liquidation value of preferred shares
net of fee reduction(b) ......................... 1.43%(c) 1.52% 1.68% -- -- --
Portfolio turnover rate ........................... 4% 18% 28% 29% 41% 92%
PREFERRED STOCK:
5.625% CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) ....... $ 29,605 $ 29,605 $ 30,000 -- -- --
Total shares outstanding (in 000's) ............... 1,184 1,184 1,200 -- -- --
Liquidation preference per share .................. $ 25.00 $ 25.00 $ 25.00 -- -- --
Average market value(d) ........................... $ 25.15 $ 24.68 $ 25.12 -- -- --
Asset coverage per share .......................... $ 124.24 $ 119.75 $ 96.14 -- -- --
AUCTION RATE CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) ....... $ 25,000 $ 25,000 $ 25,000 -- -- --
Total shares outstanding (in 000's) ............... 1 1 1 -- -- --
Liquidation preference per share .................. $ 25,000 $ 25,000 $ 25,000 -- -- --
Average market value(d) ........................... $ 25,000 $ 25,000 $ 25,000 -- -- --
Asset coverage per share .......................... $ 124,239 $ 119,752 $ 96,140
ASSET COVERAGE(E) ................................. 497% 479% 385% -- -- --
----------
+ Based on net asset value per share, adjusted for reinvestment of
distributions at net asset value on the ex-dividend date, including the
effect of shares issued pursuant to rights offering, assuming full
subscription by shareholder. Total return for the period of less than one
year is not annualized.
++ Based on market value per share, adjusted for reinvestment of
distributions on the payment date, including the effect of shares issued
pursuant to rights offering, assuming full subscription by shareholder.
Total return for the period of less than one year is not annualized.
(a) Amount represents less than $0.005 per share.
(b) The ratios do not include a reduction of expenses for custodian fee
credits on cash balances maintained with the custodian. Including such
custodian fee credits for the year ended December 31, 2000, the ratio of
operating expenses to average net assets attributable to common stock net
of fee reduction would be 1.93%. For the fiscal years ended December 31,
2001 through 2004, the effect of the custodian fee credits was minimal.
(c) Annualized.
(d) Based on weekly prices.
(e) Asset coverage is calculated by combining all series of preferred stock.
(f) Amounts are subject to change and recharacterization at fiscal year end.
See accompanying notes to financial statements.
17
THE GABELLI UTILITY TRUST
BOARD CONSIDERATION AND RE-APPROVAL OF MANAGEMENT AGREEMENT
At its meeting on February 16, 2005, the Board of Trustees ("Board") of the
Trust approved the continuation of the investment advisory agreement with the
Adviser for the Trust on the basis of the recommendation by the trustees (the
"independent trustees") who are not "interested persons" of the Trust. The
following paragraphs summarize the material information and factors considered
by the independent trustees as well as their conclusions relative to such
factors.
NATURE, EXTENT AND QUALITY OF SERVICES. The independent trustees considered
information regarding the portfolio manager and supporting team, the depth of
the analyst pool available to the Adviser and the portfolio manager, 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 directors noted the experience, length of service and reputation
of the portfolio manager.
INVESTMENT PERFORMANCE. The independent directors reviewed the short, medium and
long-term performance of the Trust against a peer group of utility funds. The
trustees noted that the Trust's performance was in or near the top 40% of the
funds in its category for all relevant periods.
PROFITABILITY. The independent trustees reviewed summary data regarding the
profitability of the Trust to the Adviser both with an administrative overhead
charge and without such a charge. The trustees also noted that a substantial
portion of the Trust's portfolio transactions were executed by an affiliated
broker and that the Adviser received a moderate level of soft dollar research
benefits through the Trust's portfolio brokerage.
ECONOMIES OF SCALE. The independent trustees determined that economies of scale
were unlikely to be an issue for a closed-end fund such as the Trust.
SHARING OF ECONOMIES OF SCALE. The independent trustees noted that the
investment management fee schedule for the Trust does not take into account any
potential economies of scale.
SERVICE AND COST COMPARISONS. The independent trustees compared the expense
ratios of the investment management fee, other expenses and total expenses of
the Trust to similar expense ratios of the peer group of utility funds and noted
that the Adviser's management fee includes substantially all administrative
services of the Trust as well as investment advisory services. The trustees
noted that the Trust's expense ratios were higher than average within this
group. The trustees also noted that the basic management fee structure was the
same as that in effect for most of the Gabelli funds but that the Adviser did
not charge a fee on assets supported by leverage except to the extent that
performance of the Trust was positive after deducting the costs of leverage. The
trustees did not compare the management fee to the fee for other types of
accounts managed by the Adviser.
CONCLUSIONS. The independent trustees concluded that the Trust enjoyed highly
experienced portfolio management services, good ancillary services and an
excellent performance record. The independent trustees also concluded that the
Trust's expense ratios and the profitability to the Adviser of managing the
Trust were reasonable, particularly in light of the Trust's performance, and
that economies of scale were not a factor in their thinking. The trustees 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 trustees determined to recommend
continuation of the investment management agreement to the full Board of
Trustees.
18
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLANS
ENROLLMENT IN THE PLAN
It is the Policy of The Gabelli Utility Trust ("Trust") to automatically
reinvest dividends payable to common shareholders. As a "registered" shareholder
you automatically become a participant in the Trust's Automatic Dividend
Reinvestment Plan (the "Plan"). The Plan authorizes the Trust to issue shares to
participants upon an income dividend or a capital gains distribution regardless
of whether the shares are trading at a discount or a premium to net asset value.
All distributions to shareholders whose shares are registered in their own names
will be automatically reinvested pursuant to the Plan in additional shares of
the Trust. Plan participants may send their stock certificates to EquiServe
Trust Co. ("EquiServe") to be held in their dividend reinvestment account.
Registered shareholders wishing to receive their distribution in cash must
submit this request in writing to:
The Gabelli Utility Trust
c/o EquiServe
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 EquiServe at (800) 336-6983.
SHAREHOLDERS WISHING TO LIQUIDATE REINVESTED SHARES held at EquiServe must
do so in writing or by telephone. Please submit your request to the above
mentioned address or telephone number. Include in your request your name,
address and account number. The cost to liquidate shares is $2.50 per
transaction as well as the brokerage commission incurred. Brokerage charges are
expected to be less than the usual brokerage charge for such transactions.
If your shares are held in the name of a broker, bank or nominee, you
should contact such institution. If such institution is not participating in the
Plan, your account will be credited with a cash dividend. In order to
participate in the Plan through such institution, it may be necessary for you to
have your shares taken out of "street name" and re-registered in your own name.
Once registered in your own name your dividends will be automatically
reinvested. Certain brokers participate in the Plan. Shareholders holding shares
in "street name" at participating institutions will have dividends automatically
reinvested. Shareholders wishing a cash dividend at such institution must
contact their broker to make this change.
The number of 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 Trust'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 Trust's Common Shares. The valuation date is the dividend or distribution
payment date or, if that date is not a New York Stock Exchange 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 Trust valued at market price. If the Trust should
declare a dividend or capital gains distribution payable only in cash, EquiServe
will buy Common Shares in the open market, or on the New York Stock Exchange or
elsewhere, for the participants' accounts, except that EquiServe will endeavor
to terminate purchases in the open market and cause the Trust 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.
19
The automatic reinvestment of dividends and capital gains distributions
will not relieve participants of any income tax which may be payable on such
distributions. A participant in the Plan will be treated for Federal income tax
purposes as having received, on a dividend payment date, a dividend or
distribution in an amount equal to the cash the participant could have received
instead of shares.
The Trust reserves the right to amend or terminate the Plan as applied to
any voluntary cash payments made and any dividend or distribution paid
subsequent to written notice of the change sent to the members of the Plan at
least 90 days before the record date for such dividend or distribution. The Plan
also may be amended or terminated by EquiServe on at least 90 days' written
notice to participants in the Plan.
VOLUNTARY CASH PURCHASE PLAN
The Voluntary Cash Purchase Plan is yet another vehicle for our
shareholders to increase their investment in the Trust. In order to participate
in the Voluntary Cash Purchase Plan, shareholders must have their shares
registered in their own name.
Participants in the Voluntary Cash Purchase Plan have the option of making
additional cash payments to EquiServe for investments in the Trust's shares at
the then current market price. Shareholders may send an amount from $250 to
$10,000. EquiServe will use these funds to purchase shares in the open market on
or about the 1st and 15th of each month. EquiServe will charge each shareholder
who participates $0.75, plus a pro rata share of the brokerage commissions.
Brokerage charges for such purchases are expected to be less than the usual
brokerage charge for such transactions. It is suggested that any voluntary cash
payments be sent to EquiServe, P.O. Box 43010, Providence, RI 02940-3010 such
that EquiServe receives such payments approximately 10 days before the 1st and
15th of the month. Funds not received at least five days before the investment
date shall be held for investment until the next purchase date. A payment may be
withdrawn without charge if notice is received by EquiServe at least 48 hours
before such payment is to be invested.
For more information regarding the Dividend Reinvestment Plan and
Voluntary Cash Purchase Plan, brochures are available by calling (914) 921-5070
or by writing directly to the Trust.
20
TRUSTEES AND OFFICERS
THE GABELLI UTILITY TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES
Mario J. Gabelli, CFA
CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
GABELLI ASSET MANAGEMENT INC.
Dr. Thomas E. Bratter
PRESIDENT, JOHN DEWEY ACADEMY
Anthony J. Colavita
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C.
James P. Conn
FORMER MANAGING DIRECTOR AND
CHIEF INVESTMENT OFFICER,
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Vincent D. Enright
FORMER SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER,
KEYSPAN ENERGY CORP.
Frank J. Fahrenkopf, Jr.
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
AMERICAN GAMING ASSOCIATION
John D. Gabelli
SENIOR VICE PRESIDENT,
GABELLI & COMPANY, INC.
Robert J. Morrissey
ATTORNEY-AT-LAW
MORRISSEY, HAWKINS & LYNCH
Karl Otto Pohl
FORMER PRESIDENT, DEUTSCHE BUNDESBANK
Anthony R. Pustorino
CERTIFIED PUBLIC ACCOUNTANT,
PROFESSOR EMERITUS, PACE UNIVERSITY
Salvatore J. Zizza
CHAIRMAN, HALLMARK ELECTRICAL SUPPLIES CORP.
OFFICERS
Bruce N. Alpert
PRESIDENT & TREASURER
Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
James E. McKee
SECRETARY
David I. Schachter
VICE PRESIDENT & OMBUDSMAN
INVESTMENT ADVISER
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
CUSTODIAN
Mellon Trust of New England, N.A.
COUNSEL
Skadden, Arps, Slate, Meagher & Flom, LLP
TRANSFER AGENT AND REGISTRAR
EquiServe Trust Company
STOCK EXCHANGE LISTING
5.625%
Common Preferred
------ ---------
NYSE-Symbol: GUT GUT PrA
Shares Outstanding: 29,142,767 1,184,200
The Net Asset Value appears in the Publicly Traded Funds column, under the
heading "Specialized Equity Funds," in Sunday's The New York Times and in
Monday's The Wall Street Journal. It is also listed in Barron's Mutual
Funds/Closed End Funds section under the heading "Specialized Equity Funds."
The Net Asset Value may be obtained each day by calling (914) 921-5071.
--------------------------------------------------------------------------------
For general information about the Gabelli Funds, call 800-GABELLI
(800-422-3554), fax us at 914-921-5118, visit Gabelli Funds' Internet
homepage at: WWW.GABELLI.COM or e-mail us at: closedend@gabelli.com
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Utility Trust may, from time to
time, purchase its shares in the open market when the Utility Trust shares
are trading at a discount of 10% or more from the net asset value of the
shares. The Utility Trust may also, from time to time, purchase shares of its
5.625% Series A Cumulative Preferred Shares in the open market when the
shares are trading at a discount to the Liquidation Value of $25.00.
--------------------------------------------------------------------------------
THE GABELLI UTILITY TRUST
ONE CORPORATE CENTER
RYE, NY 10580-1422
(914)921-5070
WWW.GABELLI.COM
SEMI-ANNUAL REPORT
JUNE 30, 2005
GUT-SA-Q2/05
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not yet applicable.
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 PUBLICLY ANNOUNCED YET BE PURCHASED UNDER THE
PERIOD PURCHASED PER SHARE (OR UNIT) PLANS OR PROGRAMS PLANS OR PROGRAMS
=============================================================================================================================
Month #1 Common - N/A Common - N/A Common - N/A Common - 29,004,958
01/01/05
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
01/31/05
=============================================================================================================================
Month #2 Common - N/A Common - N/A Common - N/A Common - 29,032,565
02/01/05
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
02/28/05
=============================================================================================================================
Month #3 Common - N/A Common - N/A Common - N/A Common - 29,061,042
03/01/05
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
03/31/05
=============================================================================================================================
Month #4 Common - N/A Common - N/A Common - N/A Common - 29,089,246
04/01/05
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
04/30/05
=============================================================================================================================
Month #5 Common - N/A Common - N/A Common - N/A Common - 29,116,296
05/01/05
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
05/31/05
=============================================================================================================================
Month #6 Common - N/A Common - N/A Common - N/A Common - 29,142,767
06/01/05
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
06/30/05
=============================================================================================================================
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.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 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
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By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date September 7, 2005
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer &
Principal Financial Officer
Date September 7, 2005
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* Print the name and title of each signing officer under his or her signature.