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
---------------------------------------------------------------
(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, 2007
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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, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
[LOGO OMITTED]
THE GABELLI UTILITY TRUST
THE GABELLI UTILITY TRUST
Semi-Annual Report
June 30, 2007
TO OUR SHAREHOLDERS,
The Gabelli Utility Trust's (the "Fund") net asset value ("NAV") total
return was 4.67% during the first half of 2007, compared with gains of 8.87% and
11.50% for the Standard & Poor's ("S&P") 500 Utilities Index and for the Lipper
Utility Fund Average, respectively. The total return for the Fund's publicly
traded shares was 0.87% during the first half of the year. On June 30, 2007, the
Fund's NAV per share was $8.21, while the price of the publicly traded shares
closed at $9.65 on the New York Stock Exchange.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2007.
COMPARATIVE RESULTS
------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2007 (A)
------------------------------------------------
Since
Year to Inception
Date 1 Year 3 Year 5 Year (07/09/99)
-------------------------------------------------------
GABELLI UTILITY TRUST
NAV TOTAL RETURN (B) .................................... 4.67% 24.59% 17.94% 13.94% 11.23%
INVESTMENT TOTAL RETURN (C) ............................. 0.87 19.17 9.85 10.17 11.84
S&P 500 Utilities Index ................................... 8.87 26.09 22.60 14.50 6.78
Lipper Utility Fund Average ............................... 11.50 30.86 23.53 17.29 7.64
(a) 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 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 UTILITIES INDEX IS AN UNMANAGED INDICATOR OF ELECTRIC AND GAS
UTILITY STOCK PERFORMANCE. THE LIPPER 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 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)
The following table presents portfolio holdings as a percent of total
investments as of June 30, 2007:
Energy and Utilities: Electric Integrated .......... 44.0%
Repurchase Agreements .............................. 11.3%
Energy and Utilities: Natural Gas Utilities ........ 8.4%
Energy and Utilities: Natural Gas Integrated ....... 7.0%
Energy and Utilities:
Electric Transmission and Distribution ........... 6.6%
Telecommunications ................................. 5.2%
Energy and Utilities: Global Utilities ............. 3.1%
Cable and Satellite ................................ 2.7%
Energy and Utilities: Water ........................ 2.7%
Energy and Utilities: Merchant Energy .............. 2.1%
Diversified Industrial ............................. 1.5%
Wireless Communications ............................ 1.3%
Entertainment ...................................... 0.9%
Energy and Utilities: Oil .......................... 0.7%
Energy and Utilities: Services ..................... 0.5%
Communications Equipment ........................... 0.5%
Transportation ..................................... 0.4%
Metals and Mining .................................. 0.3%
Aerospace .......................................... 0.2%
Computer Software and Services ..................... 0.2%
Energy and Utilities: Alternative Energy ........... 0.2%
Real Estate ........................................ 0.1%
Equipment and Supplies ............................. 0.1%
Publishing ......................................... 0.0%
Aviation: Parts and Services ....................... 0.0%
Agriculture ........................................ 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,
2007. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING
THE FUND AT 800-GABELLI (800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE ON THE
SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE SEC'S
PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE
PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. A description of
the Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.
SHAREHOLDER MEETING - MAY 14, 2007 - FINAL RESULTS
The Annual Meeting of Shareholders was held on May 14, 2007 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 26,491,318 votes, 26,448,986 votes, and 26,470,611 votes were cast in
favor of each Trustee and a total of 367,285 votes, 409,617 votes, and 387,993
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, 2007 (UNAUDITED)
MARKET
SHARES COST VALUE
------ ---- --------
COMMON STOCKS -- 86.8%
AEROSPACE -- 0.2%
65,000 Rolls-Royce Group plc+ .............. $ 513,387 $ 702,890
3,848,000 Rolls-Royce Group plc, Cl. B ........ 7,540 7,882
------------ ------------
520,927 710,772
------------ ------------
AGRICULTURE -- 0.0%
800 Cadiz Inc.+ ......................... 3,000 17,976
------------ ------------
AVIATION: PARTS AND SERVICES -- 0.0%
500 Sequa Corp., Cl. A+ ................. 52,440 56,000
------------ ------------
CABLE AND SATELLITE -- 2.7%
20,000 Cablevision Systems Corp.,
Cl. A+ ............................ 658,216 723,800
5,000 Cogeco Cable Inc. ................... 105,008 215,912
20,000 Cogeco Inc. ......................... 389,461 747,430
7,500 Comcast Corp., Cl. A+ ............... 158,100 210,900
50,000 EchoStar Communications
Corp., Cl. A+ ..................... 1,560,336 2,168,500
35,000 Liberty Global Inc., Cl. A+ ......... 739,454 1,436,400
20,000 Liberty Global Inc., Cl. C+ ......... 421,966 786,000
12,000 Rogers Communications Inc.,
Cl. B ............................. 178,708 509,880
60,000 The DIRECTV Group Inc.+ ............. 959,293 1,386,600
------------ ------------
5,170,542 8,185,422
------------ ------------
COMMUNICATIONS EQUIPMENT -- 0.5%
280,000 The Furukawa
Electric Co. Ltd. ................. 1,441,034 1,548,670
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 0.2%
20,000 Covansys Corp.+ ..................... 667,300 678,600
------------ ------------
DIVERSIFIED INDUSTRIAL -- 1.5%
18,000 Catalytica Energy Systems Inc.+ ..... 149,778 21,600
12,000 Cooper Industries Ltd., Cl. A ....... 451,381 685,080
60,000 General Electric Co. ................ 2,255,100 2,296,800
20,000 Rinker Group Ltd., ADR .............. 1,583,040 1,592,000
------------ ------------
4,439,299 4,595,480
------------ ------------
ENERGY AND UTILITIES: ALTERNATIVE ENERGY -- 0.2%
12,000 Ormat Technologies Inc. ............. 180,000 452,160
------------ ------------
ENERGY AND UTILITIES: ELECTRIC INTEGRATED -- 44.0%
315,000 Allegheny Energy Inc.+ .............. 7,749,105 16,298,100
23,000 ALLETE Inc. ......................... 728,776 1,082,150
75,000 Alliant Energy Corp. ................ 1,824,383 2,913,750
10,000 Ameren Corp. ........................ 437,020 490,100
80,000 American Electric
Power Co. Inc. .................... 2,629,105 3,603,200
700,000 Aquila Inc.+ ........................ 2,367,502 2,863,000
10,000 Avista Corp. ........................ 199,636 215,500
35,000 Black Hills Corp. ................... 1,060,967 1,391,250
30,000 Cleco Corp. ......................... 570,612 735,000
175,000 CMS Energy Corp. .................... 1,794,777 3,010,000
70,000 Constellation
Energy Group Inc. ................. 4,354,534 6,101,900
5,000 Dominion Resources Inc. ............. 327,587 431,550
MARKET
SHARES COST VALUE
------ ---- --------
160,000 DPL Inc. ............................ $ 3,365,523 $ 4,534,400
24,000 DTE Energy Co. ...................... 978,366 1,157,280
200,000 Duke Energy Corp. ................... 3,853,613 3,660,000
90,000 Edison International ................ 3,861,403 5,050,800
189,300 El Paso Electric Co.+ ............... 3,420,893 4,649,208
3,000 Entergy Corp. ....................... 84,249 322,050
53,000 FirstEnergy Corp. ................... 2,187,349 3,430,690
134,900 Florida Public Utilities Co. ........ 1,171,685 1,659,270
90,000 FPL Group Inc. ...................... 3,810,855 5,106,600
105,000 Great Plains Energy Inc. ............ 3,272,187 3,057,600
50,000 Hawaiian Electric
Industries Inc. ................... 1,321,257 1,184,500
94,900 Integrys Energy Group Inc. .......... 4,719,661 4,814,277
62,000 Maine & Maritimes Corp.+ ............ 1,962,372 1,664,700
66,000 MGE Energy Inc. ..................... 1,951,270 2,156,220
45,000 NiSource Inc. ....................... 970,021 931,950
65,000 NorthWestern Corp. .................. 2,198,614 2,067,650
100,000 OGE Energy Corp. .................... 2,406,346 3,665,000
24,000 Otter Tail Corp. .................... 637,145 769,680
48,000 PG&E Corp. .......................... 1,280,160 2,174,400
20,000 PNM Resources Inc. .................. 290,976 555,800
100,000 Progress Energy Inc. ................ 4,383,880 4,559,000
40,000 Progress Energy Inc., CVO+ .......... 20,800 14,400
20,000 Public Service Enterprise
Group Inc. ........................ 1,047,079 1,755,600
35,000 Puget Energy Inc. ................... 795,990 846,300
60,000 SCANA Corp. ......................... 1,897,335 2,297,400
30,000 Sierra Pacific Resources+ ........... 227,798 526,800
105,000 TECO Energy Inc. .................... 1,580,547 1,803,900
20,000 The Empire District
Electric Co. ...................... 426,495 447,400
100,000 TXU Corp. ........................... 6,401,057 6,730,000
145,000 Unisource Energy Corp. .............. 4,693,063 4,769,050
35,000 Unitil Corp. ........................ 926,911 952,000
47,000 Vectren Corp. ....................... 1,162,166 1,265,710
252,500 Westar Energy Inc. .................. 5,780,304 6,130,700
80,000 Wisconsin Energy Corp. .............. 2,806,837 3,538,400
200,000 Xcel Energy Inc. .................... 3,434,826 4,094,000
------------ ------------
103,373,037 131,478,235
------------ ------------
ENERGY AND UTILITIES:
ELECTRIC TRANSMISSION AND DISTRIBUTION -- 6.6%
50,000 CH Energy Group Inc. ................ 2,261,677 2,248,500
57,000 Consolidated Edison Inc. ............ 2,577,809 2,571,840
80,000 Energy East Corp. ................... 1,767,343 2,087,200
135,000 Northeast Utilities ................. 2,607,310 3,828,600
215,000 NSTAR ............................... 5,293,459 6,976,750
22,500 Pepco Holdings Inc. ................. 449,918 634,500
36,666 UIL Holdings Corp. .................. 966,693 1,213,645
------------ ------------
15,924,209 19,561,035
------------ ------------
ENERGY AND UTILITIES: GLOBAL UTILITIES -- 3.1%
1,500 Areva SA ............................ 613,197 1,611,335
8,000 Chubu Electric Power Co. Inc. ....... 189,551 212,467
9,600 Electric Power
Development Co. Ltd. .............. 240,854 382,051
See accompanying notes to financial statements.
3
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES COST VALUE
------ ---- --------
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES: GLOBAL UTILITIES (CONTINUED)
20,000 Endesa SA ........................... $ 987,282 $ 1,088,448
200,000 Enel SpA ............................ 1,531,070 2,158,760
300,000 Hera SpA ............................ 433,286 1,257,698
8,000 Hokkaido Electric
Power Co. Inc. .................... 156,870 173,807
8,000 Hokuriku Electric Power Co. ......... 146,449 154,964
1,000 Huaneng Power
International Inc., ADR ........... 45,723 46,450
30,000 Korea Electric
Power Corp., ADR .................. 486,564 657,000
8,000 Kyushu Electric Power Co. Inc. ...... 167,818 209,868
2,000 Niko Resources Ltd. ................. 113,769 182,117
8,000 Shikoku Electric Power Co. Inc. ..... 155,987 188,751
8,000 The Chugoku Electric
Power Co. Inc. .................... 150,761 158,538
8,000 The Kansai Electric
Power Co. Inc. .................... 158,472 189,401
8,000 The Tokyo Electric
Power Co. Inc. .................... 191,450 257,300
15,000 Tohoku Electric Power Co. Inc. ...... 284,854 336,853
------------ ------------
6,053,957 9,265,808
------------ ------------
ENERGY AND UTILITIES: MERCHANT ENERGY -- 1.9%
20,000 Calpine Corp.+ ...................... 52,600 73,800
35,810 Dynegy Inc+ ......................... 175,000 338,046
8,130 Mirant Corp.+ ....................... 37,373 346,745
300,000 Mirant Corp. Escrow+ (a) ............ 0 0
230,000 The AES Corp.+ ...................... 3,353,504 5,032,400
------------ ------------
3,618,477 5,790,991
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS INTEGRATED -- 6.0%
170,000 El Paso Corp. ....................... 1,520,951 2,929,100
34,200 EnergySouth Inc. .................... 1,024,860 1,744,200
105,000 National Fuel Gas Co. ............... 3,315,407 4,547,550
100,000 ONEOK Inc. .......................... 2,674,346 5,041,000
110,000 Southern Union Co. .................. 1,799,367 3,584,900
------------ ------------
10,334,931 17,846,750
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS UTILITIES -- 8.4%
28,000 AGL Resources Inc. .................. 692,019 1,133,440
50,000 Atmos Energy Corp. .................. 1,241,257 1,503,000
60,000 Cascade Natural Gas Corp. ........... 1,396,113 1,584,600
10,000 Chesapeake Utilities Corp. .......... 224,112 342,600
3,000 Corning Natural Gas Corp.+ .......... 43,760 54,000
29,700 Delta Natural Gas Co. Inc. .......... 494,549 767,745
127,000 KeySpan Corp. ....................... 4,668,329 5,331,460
90,000 Nicor Inc. .......................... 3,094,432 3,862,800
35,000 Piedmont Natural Gas Co. Inc. ....... 553,257 862,750
1,000 Questar Corp. ....................... 49,625 52,850
6,000 RGC Resources Inc. .................. 128,344 166,500
300,000 SEMCO Energy Inc.+ .................. 2,443,611 2,331,000
130,000 Southwest Gas Corp. ................. 3,556,981 4,395,300
100,000 Spectra Energy Corp. ................ 2,790,547 2,596,000
------------ ------------
21,376,936 24,984,045
------------ ------------
SHARES/ MARKET
UNITS COST VALUE
------ ---- --------
ENERGY AND UTILITIES: OIL -- 0.7%
4,000 Anadarko Petroleum Corp. ............ $ 141,060 $ 207,960
20,000 Exxon Mobil Corp. ................... 1,168,383 1,677,600
4,000 Royal Dutch Shell plc,
Cl. A, ADR ........................ 237,320 324,800
------------ ------------
1,546,763 2,210,360
------------ ------------
ENERGY AND UTILITIES: SERVICES -- 0.5%
70,000 ABB Ltd., ADR ....................... 764,610 1,582,000
------------ ------------
ENERGY AND UTILITIES: WATER -- 2.7%
14,000 American States Water Co. ........... 312,701 497,980
21,333 Aqua America Inc. ................... 209,100 479,779
24,750 Artesian Resources Corp.,
Cl. A ............................. 257,250 475,200
20,500 BIW Ltd. ............................ 385,069 465,350
20,520 California Water
Service Group ..................... 566,928 769,295
7,500 Connecticut Water
Service Inc. ...................... 146,455 182,775
51,333 Middlesex Water Co. ................. 801,882 986,107
24,088 Pennichuck Corp. .................... 471,751 608,222
80,000 SJW Corp. ........................... 1,482,532 2,664,000
8,101 Southwest Water Co. ................. 52,047 103,450
12,000 Suez SA ............................. 387,529 689,775
12,000 Suez SA, Strips+ .................... 0 162
9,000 York Water Co. ...................... 108,269 159,750
------------ ------------
5,181,513 8,081,845
------------ ------------
ENTERTAINMENT -- 0.9%
60,000 Time Warner Inc. .................... 1,043,037 1,262,400
30,000 Vivendi ............................. 934,392 1,295,662
------------ ------------
1,977,429 2,558,062
------------ ------------
EQUIPMENT AND SUPPLIES -- 0.1%
50,000 Capstone Turbine Corp.+ ............. 83,080 54,000
3,000 Mueller Industries Inc. ............. 132,029 103,320
------------ ------------
215,109 157,320
------------ ------------
METALS AND MINING -- 0.3%
20,000 Compania de Minas
Buenaventura SA, ADR .............. 444,517 749,200
3,000 Peabody Energy Corp. ................ 119,941 145,140
------------ ------------
564,458 894,340
------------ ------------
PUBLISHING -- 0.0%
3,000 Idearc Inc. ......................... 96,328 105,990
------------ ------------
REAL ESTATE -- 0.1%
6,075 Brookfield Asset
Management Inc., Cl. A ............ 65,353 242,392
------------ ------------
TELECOMMUNICATIONS -- 4.5%
46,500 AT&T Inc. ........................... 1,218,468 1,929,750
54,900 BCE Inc. ............................ 1,185,202 2,074,671
4,350 Bell Aliant Regional
Communications
Income Fund+ (a)(b) ............... 117,218 128,021
30,000 BT Group plc, ADR ................... 1,026,589 1,997,400
See accompanying notes to financial statements.
4
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2007 (UNAUDITED)
MARKET
SHARES COST VALUE
------ ---- --------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
197,000 Cincinnati Bell Inc.+ ............... $ 879,576 $ 1,138,660
7,000 Citizens Communications Co. ......... 102,760 106,890
20,000 D&E Communications Inc. ............. 190,498 366,800
30,000 Deutsche Telekom AG, ADR ............ 543,620 552,300
2,000 France Telecom SA, ADR .............. 22,799 54,960
200 Hutchison Telecommunications
International Ltd. ................ 163 258
500 Mobistar SA ......................... 44,141 42,769
200 PT Indosat Tbk ...................... 128 144
1,200 Tele2 AB, Cl. B ..................... 14,604 19,695
6,000 Telecom Italia SpA, ADR ............. 182,248 164,760
40,000 Touch America Holdings Inc.+ ........ 38,488 0
115,000 Verizon Communications Inc. ......... 4,312,581 4,734,550
------------ ------------
9,879,083 13,311,628
------------ ------------
TRANSPORTATION -- 0.4%
22,000 GATX Corp. .......................... 670,058 1,083,500
------------ ------------
WIRELESS COMMUNICATIONS -- 1.3%
600 America Movil SAB de CV,
Cl. L, ADR ........................ 9,424 37,158
2,000 China Mobile Ltd., ADR .............. 33,988 107,800
2,000 China Unicom Ltd., ADR .............. 16,278 34,460
200 Cosmote Mobile
Telecommunications SA ............. 3,701 6,193
4,000 Mobile TeleSystems
OJSC, ADR ......................... 137,612 242,280
171 MobileOne Ltd. ...................... 218 246
3,000 QUALCOMM Inc. ....................... 115,589 130,170
600 SK Telecom Co. Ltd., ADR ............ 12,374 16,410
200 SmarTone Telecommunications
Holdings Ltd. ..................... 207 231
30,000 United States Cellular Corp.+ ....... 1,440,490 2,718,000
6,000 Vimpel-Communications, ADR .......... 196,099 632,160
------------ ------------
1,965,980 3,925,108
------------ ------------
TOTAL
COMMON STOCKS ...................... 196,082,773 259,324,489
------------ ------------
CONVERTIBLE PREFERRED STOCKS -- 1.7%
ENERGY AND UTILITIES: NATURAL GAS INTEGRATED -- 1.0%
2,000 El Paso Corp.,
4.990% Cv. Pfd. (b) ............... 1,945,987 2,922,520
------------ ------------
TELECOMMUNICATIONS -- 0.7%
30,000 Citizens Utilities Trust,
5.000% Cv. Pfd. ................... 1,490,995 2,046,300
------------ ------------
TOTAL CONVERTIBLE
PREFERRED STOCKS ................... 3,436,982 4,968,820
------------ ------------
PRINCIPAL
AMOUNT
-------
CORPORATE BONDS -- 0.0%
TELECOMMUNICATIONS -- 0.0%
$ 100,000 Williams Communications
Group Inc., Escrow,
10.875%, 10/01/09+ (a)(c) ......... 0 0
------------ ------------
MARKET
SHARES COST VALUE
------ ---- --------
WARRANTS -- 0.2%
ENERGY AND UTILITIES: MERCHANT ENERGY -- 0.2%
26,107 Mirant Corp., Ser. A,
expire 01/03/11+ .................. $ 51,616 $ 600,983
------------ ------------
PRINCIPAL
AMOUNT
-------
REPURCHASE AGREEMENTS -- 11.3%
$10,000,000 Barclays Capital Inc., 4.250%,
dated 06/29/07, due 07/02/07,
proceeds at maturity,
$10,003,542 (d) ................... 10,000,000 10,000,000
23,865,000 Daiwa Securities America Inc.,
4.000%, dated 06/29/07,
due 07/02/07, proceeds at
maturity, $23,872,955 (e) ......... 23,865,000 23,865,000
------------ ------------
TOTAL REPURCHASE
AGREEMENTS ......................... 33,865,000 33,865,000
------------ ------------
TOTAL INVESTMENTS -- 100.0% ...................... $233,436,371 298,759,292
============
OTHER ASSETS AND LIABILITIES (NET) ............................ 955,402
PREFERRED STOCK
(1,185,200 preferred shares outstanding) .................... (54,605,000)
------------
NET ASSETS -- COMMON SHARES
(29,843,108 common shares outstanding) ...................... $245,109,694
============
NET ASSET VALUE PER COMMON SHARE
($245,109,694 / 29,843,108 shares outstanding) ............. $8.21
=====
------------------
(a) Securities fair valued under procedures established by the Board of
Trustees. The procedures may include reviewing available financial
information about the company and reviewing valuation of comparable
securities and other factors on a regular basis. At June 30, 2007, the
market value of fair valued securities amounted to $128,021 or 0.04% of
total investments.
(b) Securities exempt from registration under Rule 144A of the Securities Act
of 1933, as amended. The securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At June 30,
2007, the Rule 144A securities are considered liquid and the market value
amounted to $3,050,541 or 1.02% of total investments.
(c) Security is in default.
(d) Collateralized by $7,975,000 U.S. Treasury Bond, 7.875%, due 02/15/21,
market value $10,200,000.
(e) Collateralized by $23,924,000 U.S. Treasury Note, 4.375%, due 12/31/07,
market value $24,342,670.
+ Non-income producing security.
ADR American Depository Receipt
CVO Contingent Value Obligation
OJSC Open Joint Stock Company
See accompanying notes to financial statements.
5
THE GABELLI UTILITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2007 (UNAUDITED)
ASSETS:
Investments, at value (cost $199,571,371) ..... $264,894,292
Repurchase agreements, at value
(cost $33,865,000) .......................... 33,865,000
Foreign currency, at value (cost $7,502) ...... 7,318
Cash .......................................... 863
Receivable for investments sold ............... 28
Unrealized appreciation on swap contracts ..... 924,481
Dividends and interest receivable ............. 667,548
Prepaid expense ............................... 5,761
------------
TOTAL ASSETS .................................. 300,365,291
------------
LIABILITIES:
Distributions payable ......................... 29,336
Payable for investment advisory fees .......... 197,029
Payable for shareholder communications expenses 143,249
Payable for legal and audit fees .............. 45,826
Payable for shareholder service expenses ...... 36,285
Payable for accounting fees ................... 3,626
Other accrued expenses and liabilities ........ 195,246
------------
TOTAL LIABILITIES ............................. 650,597
------------
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 Market, $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 ......................... $245,109,694
============
NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS CONSIST OF:
Paid-in capital, at $0.001 par value .......... $179,875,208
Accumulated distributions in excess of net
realized gain on investments, swap contracts,
and foreign currency transactions ........... (1,012,994)
Net unrealized appreciation on investments .... 65,322,921
Net unrealized appreciation on swap contracts . 924,481
Net unrealized appreciation on foreign
currency translations ....................... 78
------------
NET ASSETS .................................... $245,109,694
============
NET ASSET VALUE PER COMMON SHARE:
($245,109,694 / 29,843,108 shares outstanding;
unlimited number of shares authorized) ...... $8.21
=====
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2007 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $50,669) ......... $ 4,010,535
Interest ............................................ 682,284
------------
TOTAL INVESTMENT INCOME ............................. 4,692,819
------------
EXPENSES:
Investment advisory fees ............................ 1,228,121
Shareholder communications expenses ................. 183,699
Payroll expenses .................................... 79,146
Shareholder services fees ........................... 76,841
Trustees' fees ...................................... 36,862
Legal and audit fees ................................ 32,710
Auction agent expenses .............................. 29,270
Custodian fees ...................................... 24,747
Accounting fees ..................................... 22,375
Miscellaneous expenses .............................. 66,065
------------
TOTAL EXPENSES ...................................... 1,779,836
Less: Custodian fee credits ......................... (4,379)
------------
NET EXPENSES ........................................ 1,775,457
------------
NET INVESTMENT INCOME ............................... 2,917,362
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS,
SWAP CONTRACTS, AND FOREIGN CURRENCY:
Net realized gain on investments .................... 3,407,481
Net realized gain on swap contracts ................. 165,118
Net realized gain on foreign currency transactions .. 1,088
------------
Net realized gain on investments, swap contracts, and
foreign currency transactions ..................... 3,573,687
------------
Net change in unrealized appreciation/depreciation:
on investments .................................... 6,161,114
on swap contracts ................................. 127,512
on foreign currency translations .................. 14
------------
Net change in unrealized appreciation/depreciation
on investments, swap contracts, and foreign
currency translations ............................. 6,288,640
------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS, SWAP CONTRACTS, AND
FOREIGN CURRENCY .................................. 9,862,327
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................... 12,779,689
------------
Total Distributions to Preferred Stock Shareholders . (1,456,419)
------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS RESULTING FROM OPERATIONS ............ $ 11,323,270
============
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, 2007 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2006
---------------- -------------------
OPERATIONS:
Net investment income .......................................... $ 2,917,362 $ 4,905,845
Net realized gain on investments, swap contracts,
and foreign currency transactions ............................ 3,573,687 19,161,236
Net change in unrealized appreciation/depreciation
on investments, swap contracts,
and foreign currency translations ............................ 6,288,640 34,951,608
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........... 12,779,689 59,018,689
------------- -------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:
Net investment income .......................................... (668,723)* (630,852)
Net realized short-term gain on
investments, swap contracts, and
foreign currency transactions ................................ (128,292)* (155,897)
Net realized long-term gain on investments,
swap contracts, and foreign currency transactions ............ (659,404)* (2,102,354)
------------- -------------
TOTAL DISTRIBUTIONS TO PREFERRED SHAREHOLDERS .................. (1,456,419) (2,889,103)
------------- -------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS .................................... 11,323,270 56,129,586
------------- -------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income .......................................... (2,365,198)* (4,633,883)
Net realized short-term gain on investments,
swap contracts, and foreign currency transactions ............ (453,755)* (1,145,139)
Net realized long-term gain on investments,
swap contracts, and foreign currency transactions ............ (2,332,236)* (15,442,712)
Return of capital .............................................. (5,556,933)* --
------------- -------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS ..................... (10,708,122) (21,221,734)
------------- -------------
FUND SHARE TRANSACTIONS:
Net increase in net assets from common shares
issued upon reinvestment of
distributions and rights offering ............................ 1,588,502 3,175,985
Offering costs for issuance of rights charged to paid-in capital -- 124,180
------------- -------------
NET INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS ........ 1,588,502 3,300,165
------------- -------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS . 2,203,650 38,208,017
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Beginning of period ............................................ 242,906,044 204,698,027
------------- -------------
End of period (including undistributed net investment income of
$0 and $116,559, respectively) ............................... $ 245,109,694 $ 242,906,044
============= =============
---------------
* Based on fiscal year to date book income. 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 "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 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 United States ("U.S.") generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities 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 60 days or less that are not
credit impaired are valued at amortized cost, unless the Board determines such
amount does not reflect the securities' fair value, in which case these
securities will be fair valued as determined by the Board. Debt instruments
having a maturity greater than 60 days for which market quotations are readily
available are valued at the average of the latest bid and asked prices. If there
were no asked prices quoted on such day, the security is valued using the
closing bid price. Futures contracts are valued at the closing settlement price
of the exchange or board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available
are fair valued as determined by the Board. Fair valuation methodologies and
procedures may include, but are not limited to: analysis and review of available
financial and non-financial information about the company; comparisons to the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities to the equivalent U.S. dollar value ADR securities at the
close of the U.S. exchange; and evaluation of any other information that could
be indicative of the value of the security.
In September 2006, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
8
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
SFAS 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. At this time, management is in the process of reviewing the requirements
of SFAS 157 against its current valuation policies to determine future
applicability.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
The Fund will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by the Fund in each agreement. The Fund will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the 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,
2007, the Fund had investments of $33,865,000 in repurchase agreements.
SWAP AGREEMENTS. The Fund may enter into interest rate swap or cap
transactions. The use of swaps and caps is a highly specialized activity that
involves investment techniques and risks different from those associated with
ordinary portfolio transactions. Swap agreements may 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. In an interest rate swap, the Fund 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 Fund periodically a variable rate payment that is intended to
approximate the Fund's variable rate payment obligation on the Series B
Preferred 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 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 Fund 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 Fund 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
Fund will succeed in pursuing contractual remedies. The Fund 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 Fund's
portfolio securities at that point in time, such a default could negatively
affect the Fund's ability to make dividend payments. In addition, at the time an
interest rate swap or cap 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. If this occurs, it could have a negative impact on the
Fund's ability to make dividend payments.
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 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.
9
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
The Fund has entered into an interest rate swap agreement with Citibank
N.A. Under the agreement, the Fund receives a floating 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, 2007 are as follows:
NOTIONAL FLOATING RATE* TERMINATION NET UNREALIZED
AMOUNT FIXED RATE (RATE RESET MONTHLY) DATE APPRECIATION
----------- ------------ ------------------- ------------ --------------
$25,000,000 4.00% 5.32% June 2, 2010 $924,481
--------------
* Based on Libor (London Interbank Offered Rate).
FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose
of hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin." Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuations in the
value of the contract, which are included in unrealized
appreciation/depreciation on investments and futures contracts. The Fund
recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as
a hedging instrument. The change in value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in value of the hedged investments. In addition, there
is the risk that the Fund may not be able to enter into a closing transaction
because of an illiquid secondary market. At June 30, 2007, there were no open
futures contracts.
FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund 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 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. At June 30, 2007, there were no open forward foreign
exchange contracts.
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 trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
10
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, 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. This amount, if any, would be shown as "interest expense" in
the Statement of Operations.
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
U.S. generally accepted accounting principles. These differences are primarily
due to differing treatments of income and gains on various investment securities
and foreign currency transactions held by the Fund, timing differences, and
differing characterizations of distributions made by the Fund. Distributions
from net investment income include net realized gains on foreign currency
transactions. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, adjustments are made to
the appropriate capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Fund.
Distributions to shareholders of the Fund's 5.625% Series A Cumulative
Preferred Stock and Series B Auction Market Cumulative Preferred Stock
("Cumulative Preferred Stock") are recorded on a daily basis and are determined
as described in Note 5.
The tax character of distributions paid during the fiscal year ended
December 31, 2006 was as follows:
COMMON PREFERRED
---------- ---------
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) . $ 5,779,022 $ 786,749
Net long-term capital gains ............... 15,442,712 2,102,354
----------- ----------
Total distributions paid .................. $21,221,734 $2,889,103
=========== ==========
11
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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.
The following summarizes the tax cost of investments, swap contracts, and
the related unrealized appreciation/(depreciation) at June 30, 2007:
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
---- ------------ ------------ --------------
Investments .............. $234,449,365 $66,835,979 $(2,526,052) $64,309,927
Swap contracts ........... -- 924,481 -- 924,481
------------ ----------- ----------- -----------
$234,449,365 $67,760,460 $(2,526,052) $65,234,408
============ =========== =========== ===========
In July 2006, the FASB issued Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109" ("the
Interpretation"). The Interpretation established for all entities, including
pass-through entities such as the Fund, a minimum threshold for financial
statement recognition of the benefit of positions taken in filing tax returns
(including whether an entity is taxable in a particular jurisdiction), and
required certain expanded tax disclosures. The Interpretation was implemented by
the Fund on June 29, 2007 and applied to all open tax years as of the effective
date. Management has evaluated the application of the Interpretation to the
Fund, and the adoption of the Interpretation had no impact on the amounts
reported in the financial statements.
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 Stock 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
Stock for the fiscal 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 Stock for the period. For the six months ended
June 30, 2007, the Fund's total return on the NAV of the common shares did not
exceed the stated dividend rate or corresponding swap rate of all outstanding
Preferred Stock. Thus, management fees were not accrued on these assets.
During the six months ended June 30, 2007, the Fund paid brokerage
commissions of $26,635 to Gabelli & Company, Inc. ("Gabelli & Company"), 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, 2007, the Fund paid or accrued $22,375 to the Adviser in
connection with the cost of computing the Fund's NAV.
The Fund is assuming its portion of the allocated cost of the Gabelli
Funds' Chief Compliance Officer in the amount of $3,104 for the six months ended
June 30, 2007, which is included in payroll expenses in the Statement of
Operations.
12
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
As per the approval of the Board, the Fund compensates an officer of the
Fund that is employed by the Fund and is not employed by the Adviser (although
the officer may receive incentive-based variable compensation from affiliates of
the Adviser). For the six months ended June 30, 2007, the Fund paid or accrued
$76,042, which is included in payroll expenses in the Statement of Operations.
The Fund pays each Trustee that is not considered to be an affiliated
person an annual retainer of $6,000 plus $500 for each Board meeting attended
and they are reimbursed for any out of pocket expenses incurred in attending
meetings. All Board committee members receive $500 per meeting attended. In
addition, the Audit Committee Chairman receives an annual fee of $3,000 and the
Nominating Committee Chairman receives an annual fee of $2,000. Trustees who are
directors or employees of the Adviser or an affiliated company receive no
compensation or expense reimbursement from the Fund.
4. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the six months ended June 30, 2007, other than short-term and U.S. Government
securities, aggregated $34,537,153 and $9,958,653, respectively.
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 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. During the six months ended June 30, 2007, the
Fund 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, 2007 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2006
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
------ -------- ------ ---------
Net increase from shares issued upon
reinvestment of dividends and
distributions ............................... 169,301 $1,588,502 366,005 $3,175,985
The Fund is authorized to issue 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 Fund 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 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 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 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
Stock. Commencing July 31, 2008 and thereafter, the Fund, 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, 2007, the
Fund 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, 2007, 1,184,200 shares of 5,625% Series A Cumulative
Preferred Stock were outstanding and accrued dividends amounted to $18,503.
13
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 Auction Market Cumulative Preferred
Stock. 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 Auction Market Cumulative Preferred Stock ranged from
4.80% to 5.26% for the six months ended June 30, 2007. Existing shareholders may
submit an order to hold, bid, or sell such shares on each auction date. Series B
Auction Market Cumulative Preferred Stock shareholders may also trade shares in
the secondary market. The Fund, at its option, may redeem the Series B Auction
Market Cumulative Preferred Stock in whole or in part at the redemption price at
any time. During the six months ended June 30, 2007, the Fund did not redeem any
shares of Series B Auction Market Cumulative Preferred Stock. At June 30, 2007,
1,000 shares of Series B Auction Market Cumulative Preferred Stock were
outstanding with an annualized dividend rate of 5.20% per share and accrued
dividends amounted to $10,833.
The holders of Cumulative Preferred Stock 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 Stock voting together as a single class also
have the right currently to elect two Trustees and under 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 stock, voting as a single class, will be
required to approve any plan of reorganization adversely affecting the preferred
stock, 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 stock 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 and expects the risk of loss to be remote.
8. OTHER MATTERS. The Adviser and/or affiliates received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund share trading practices involving certain funds managed by the
Adviser. GAMCO Investors, Inc. ("GAMCO"), the Adviser's parent company,
responded to these requests for documents and testimony. In June 2006, GAMCO
began discussions with the SEC regarding a possible resolution of their inquiry.
In February 2007, the Adviser made an offer of settlement to the staff of the
SEC for communication to the Commission for its consideration to resolve this
matter. This offer of settlement is subject to agreement regarding the specific
language of the SEC's administrative order and other settlement documents. On a
separate matter, in September 2005, the Adviser was informed by the staff of the
SEC that the staff may recommend to the Commission that an administrative remedy
and a monetary penalty be sought from the Adviser in connection with the actions
of two of seven closed-end funds managed by the Adviser relating to Section
19(a) and Rule 19a-1 of the 1940 Act. These provisions require registered
investment companies to provide written statements to shareholders when a
dividend is made from a source other than net investment income. While the two
closed-end funds sent annual statements and provided other materials containing
this information, the funds did not send written statements to shareholders with
each distribution in 2002 and 2003. The Adviser believes that all of the funds
are now in compliance. The Adviser believes that these matters would have no
effect on the Fund or any material adverse effect on the Adviser or its ability
to manage the Fund.
14
THE GABELLI UTILITY TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF BENEFICIAL SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
INTEREST OUTSTANDING THROUGHOUT EACH PERIOD: JUNE 30, 2007 ---------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
------------ ------ ------ ------ ------ ------
OPERATING PERFORMANCE:
Net asset value, beginning of period ........ $ 8.19 $ 6.98 $ 7.14 $ 6.83 $ 6.27 $ 7.32
-------- -------- -------- -------- -------- -------
Net investment income ....................... 0.10 0.17 0.18 0.16 0.10 0.11
Net realized and unrealized
gain (loss) on investments ................ 0.33 1.84 0.45 0.99 1.17 (0.62)
-------- -------- -------- -------- -------- -------
Total from investment operations ............ 0.43 2.01 0.63 1.15 1.27 (0.51)
-------- -------- -------- -------- -------- -------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS: (A)
Net investment income ....................... (0.02)* (0.02) (0.02) (0.06) (0.01) --
Net realized gain on investments ............ (0.03)* (0.08) (0.07) (0.03) (0.04) --
-------- -------- -------- -------- -------- -------
Total distributions to
preferred shareholders .................... (0.05) (0.10) (0.09) (0.09) (0.05) --
-------- -------- -------- -------- -------- -------
NET INCREASE (DECREASE) IN
NET ASSETS ATTRIBUTABLE
TO COMMON SHAREHOLDERS RESULTING
FROM OPERATIONS ........................... 0.38 1.91 0.54 1.06 1.22 (0.51)
-------- -------- -------- -------- -------- -------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ....................... (0.08)* (0.16) (0.14) (0.10) (0.09) (0.11)
Net realized gain on investments ............ (0.09)* (0.56) (0.58) (0.05) (0.22) (0.36)
Paid-in capital ............................. (0.19)* -- -- (0.57) (0.41) (0.25)
-------- -------- -------- -------- -------- -------
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 ........................ 0.00(e) 0.02 0.02 0.03 0.03 0.03
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(e) -- --
Offering costs for preferred
shares charged to
paid-in capital ........................... -- -- 0.00(e) 0.00(e) (0.09) --
Offering costs for issuance of
rights charged to
paid-in capital ........................... -- 0.00(e) (0.00)(e) (0.00)(e) -- --
-------- -------- -------- -------- -------- -------
Total fund share transactions ............... 0.00(e) 0.02 0.02 (0.03) 0.06 0.18
-------- -------- -------- -------- -------- -------
NET ASSET VALUE ATTRIBUTABLE TO COMMON
SHAREHOLDERS, END OF PERIOD ............... $ 8.21 $ 8.19 $ 6.98 $ 7.14 $ 6.83 $ 6.27
======== ======== ======== ======== ======== =======
Net asset value total return + .............. 4.15% 27.46% 5.71% 13.43% 18.60% (6.79)%
======== ======== ======== ======== ======== =======
Market value, end of period ................. $ 9.65 $ 9.94 $ 9.27 $ 9.30 $ 9.60 $ 8.72
======== ======== ======== ======== ======== =======
Investment total return ++ .................. 0.87% 16.47% 7.79% 5.11% 19.86% 1.70%
======== ======== ======== ======== ======== =======
15
See accompanying notes to financial statements.
THE GABELLI UTILITY TRUST
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF BENEFICIAL SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
INTEREST OUTSTANDING THROUGHOUT EACH PERIOD: JUNE 30, 2007 ---------------------------------------------------------
(UNAUDITED) 2006 2005 2004 2003 2002
------------ ------ ------ ------ ------ ------
RATIOS AND SUPPLEMENTAL DATA:
Net assets including liquidation
value of preferred
shares, end of period (in 000's) .......... $299,715 $297,511 $259,303 $261,563 $211,507 $95,111
Net assets attributable to
common shares,
end of period (in 000's) .................. $245,110 $242,906 $204,698 $206,958 $156,507 $95,111
Ratio of net investment income
to average net assets
attributable to common shares
before preferred
share distributions ....................... 2.37%(f) 2.24% 2.42% 2.32% 1.52% 1.65%
Ratio of operating expenses to
average net assets
attributable to common shares
net of advisory
fee reduction, if any (b) ................. 1.45%(f) 1.75% 1.85% 2.04% 2.04% 1.93%
Ratio of operating expenses to
average net assets
including liquidation value of
preferred shares net of
advisory fee reduction, if any (b) ........ 1.19%(f) 1.40% 1.47% 1.52% 1.68% --
Portfolio turnover rate ..................... 3.4% 33% 19% 18% 28% 29%
PREFERRED STOCK:
5.625% CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) . $ 29,605 $ 29,605 $ 29,605 $ 29,605 $ 30,000 --
Total shares outstanding (in 000's) ......... 1,184 1,184 1,184 1,184 1,200 --
Liquidation preference per share ............ $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 --
Average market value (c) .................... $ 24.33 $ 23.80 $ 25.02 $ 24.68 $ 25.12 --
Asset coverage per share .................... $ 137.22 $ 136.21 $ 118.72 $ 119.75 $ 96.14 --
AUCTION MARKET CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) . $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 --
Total shares outstanding (in 000's) ......... 1 1 1 1 1 --
Liquidation preference per share ............ $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 --
Average market value (c) .................... $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 --
Asset coverage per share .................... $137,219 $136,210 $118,718 $119,752 $ 96,140 --
ASSET COVERAGE (D) .......................... 549% 545% 475% 479% 385% --
+ Based on net asset value per share, adjusted for reinvestment of
distributions at prices obtained under the Fund's dividend reinvestment
plan, including the effect of shares issued pursuant to 2004, 2003, and
2002 rights offerings, assuming full subscription by shareholder. Total
return for a period less than one year is not annualized.
++ Based on market value per share, adjusted for reinvestment of distributions
at prices obtained under the Fund's dividend reinvestment plan, including
the effect of shares issued pursuant to 2004, 2003, and 2002 rights
offerings, assuming full subscription by shareholder. Total return for a
period less than one year is not annualized.
* Based on fiscal year to date book income. Amounts are subject to change and
recharacterization at fiscal year end.
(a) Calculated based upon average common shares outstanding on the record dates
throughout the period.
(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 six months ended June 30, 2007, the ratios of
operating expenses to average net assets attributable to common stock net
of advisory fee reduction would have been 1.44% and the ratios of operating
expenses to average net assets including liquidation value of preferred
shares net of fee reduction would have been 1.18%. Custodian fee credits
for the fiscal years ended December 31, 2002 through 2006 were minimal.
(c) Based on weekly prices.
(d) Asset coverage is calculated by combining all series of preferred stock.
(e) Amount represents less than $0.005 per share.
(f) Annualized.
See accompanying notes to financial statements.
16
THE GABELLI UTILITY TRUST
BOARD CONSIDERATION AND RE-APPROVAL OF INVESTMENT ADVISORY AGREEMENT (UNAUDITED)
At its meeting on February 22, 2007, 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 manager, 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
board members noted the experience, length of service, and reputation of the
portfolio manager.
INVESTMENT PERFORMANCE. The independent board members reviewed the short,
medium, and long-term performance of the Fund against a peer group of sector
funds. The independent board members noted that the Fund's performance was in
the second quartile of the funds in its category for the prior one and five year
periods but was in the third quartile of the funds in its category for the three
year period.
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 advisory fee schedule for the Fund does not take into account any
potential economies of scale.
SERVICE AND COST COMPARISONS. The independent board members compared the expense
ratios of the investment advisory fee, other expenses, and total expenses of the
Fund to similar expense ratios of the peer group of equity closed-end funds and
noted that the Adviser's advisory fee includes substantially all administrative
services of the Fund as well as investment advisory services. The independent
board members noted that the Fund's expense ratios were above and the Fund's
size was below average within this group. The independent board members also
noted that the advisory 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 was satisfactory. 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 investment advisory
agreement to the full Board.
17
AUTOMATIC DIVIDEND REINVESTMENT
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 issue 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
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.
18
TRUSTEES AND OFFICERS
THE GABELLI UTILITY TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES OFFICERS
Mario J. Gabelli, CFA Bruce N. Alpert
CHAIRMAN & CHIEF EXECUTIVE OFFICER, PRESIDENT
GAMCO INVESTORS, INC.
Peter D. Goldstein
Dr. Thomas E. Bratter CHIEF COMPLIANCE OFFICER
PRESIDENT & FOUNDER, JOHN DEWEY ACADEMY
James E. McKee
Anthony J. Colavita SECRETARY
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C. Agnes Mullady
TREASURER
James P. Conn
FORMER MANAGING DIRECTOR & David I. Schachter
CHIEF INVESTMENT OFFICER, VICE PRESIDENT & OMBUDSMAN
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
INVESTMENT ADVISER
Vincent D. Enright Gabelli Funds, LLC
FORMER SENIOR VICE PRESIDENT & One Corporate Center
CHIEF FINANCIAL OFFICER, Rye, New York 10580-1422
KEYSPAN CORP.
CUSTODIAN
Frank J. Fahrenkopf, Jr. Bank of New York Mellon
PRESIDENT & CHIEF EXECUTIVE OFFICER,
AMERICAN GAMING ASSOCIATION COUNSEL
Skadden, Arps, Slate, Meagher & Flom, LLP
John D. Gabelli
SENIOR VICE PRESIDENT, TRANSFER AGENT AND REGISTRAR
GABELLI & COMPANY, INC. Computershare Trust Company, N.A.
Robert J. Morrissey STOCK EXCHANGE LISTING
ATTORNEY-AT-LAW, 5.625%
MORRISSEY, HAWKINS & LYNCH Common Preferred
------ ---------
Anthony R. Pustorino NYSE-Symbol: GUT GUT PrA
CERTIFIED PUBLIC ACCOUNTANT, Shares Outstanding: 29,843,108 1,184,200
PROFESSOR EMERITUS, PACE UNIVERSITY
The Net Asset Value per share
Salvatore J. Zizza appears in the Publicly Traded
CHAIRMAN, ZIZZA & CO., LTD. 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 shares of its 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, 2007
GUT Q2/2007
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.
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 YET
SHARES (OR UNITS) (B) AVERAGE PRICE PAID PUBLICLY ANNOUNCED PLANS BE PURCHASED UNDER THE PLANS
PERIOD PURCHASED PER SHARE (OR UNIT) OR PROGRAMS OR PROGRAMS
=============================================================================================================================
Month #1 Common - N/A Common - N/A Common - N/A Common - 29,702,958
01/01/07
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
01/31/07
=============================================================================================================================
Month #2 Common - N/A Common - N/A Common - N/A Common - 29,731,495
02/01/07
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
02/28/07
=============================================================================================================================
Month #3 Common - N/A Common - N/A Common - N/A Common - 29,759,033
03/01/07
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
03/31/07
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Month #4 Common - N/A Common - N/A Common - N/A Common - 29,786,873
04/01/07
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
04/30/07
=============================================================================================================================
Month #5 Common - N/A Common - N/A Common - N/A Common - 29,814,546
05/01/07
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
05/31/07
=============================================================================================================================
Month #6 Common - N/A Common - N/A Common - N/A Common - 29,843,108
06/01/07
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
06/30/07
=============================================================================================================================
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 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) 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
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date August 31, 2007
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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
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date August 31, 2007
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By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady, Principal Financial Officer
and Treasurer
Date August 31, 2007
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* Print the name and title of each signing officer under his or her signature.