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 811-21529
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The Gabelli Global Utility & Income Trust
---------------------------------------------------------------------
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
----------------------------------------------------
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
----------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: December 31, 2006
------------------
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
GLOBAL UTILITY
& INCOME TRUST
THE GABELLI GLOBAL UTILITY & INCOME TRUST
Annual Report
December 31, 2006
TO OUR SHAREHOLDERS,
The Sarbanes-Oxley Act requires a fund's principal executive and financial
officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio manager's commentary
and subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.
Because we do not want our portfolio managers to eliminate their opinions
and/or restrict their commentary to historical facts, we have separated their
commentary from the financial statements and investment portfolio and have sent
it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com.
Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2006.
COMPARATIVE RESULTS
--------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2006 (A)
----------------------------------------------------
Since
Inception
Quarter 1 Year 2 Year (05/28/04)
------- ------ ------ ----------
GABELLI GLOBAL UTILITY & INCOME TRUST
NAV TOTAL RETURN (B) ........................... 9.73% 26.66% 14.88% 16.93%
INVESTMENT TOTAL RETURN (C) .................... 12.21 32.83 13.89 11.07
S&P 500 Utilities Index .......................... 9.15 20.99 18.90 23.24
Lipper Utility Fund Average ...................... 10.37 25.50 19.19 23.37
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE.
WHEN SHARES ARE SOLD, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA
PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST
RECENT MONTH END. PERFORMANCE RETURNS FOR 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 NET ASSET VALUE
PER SHARE ("NAV") AND REINVESTMENT OF DISTRIBUTIONS AT NAV ON THE
EX-DIVIDEND DATE AND ARE NET OF EXPENSES. SINCE INCEPTION RETURN IS BASED ON
AN INITIAL NAV OF $19.06.
(c) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN CLOSING MARKET
VALUES ON THE AMERICAN STOCK EXCHANGE AND REINVESTMENT OF DISTRIBUTIONS.
SINCE INCEPTION RETURN IS BASED ON AN INITIAL OFFERING PRICE OF $20.00.
--------------------------------------------------------------------------------
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
January 24, 2007
THE GABELLI GLOBAL UTILITY & INCOME TRUST
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total
investments as of December 31, 2006:
Energy and Utilities: Integrated .................... 44.1%
Telecommunications .................................. 11.0%
U.S. Government Obligations ......................... 7.9%
Energy and Utilities: Electric Transmission
and Distribution .................................. 6.9%
Energy and Utilities: Natural Gas Utilities ......... 6.8%
Energy and Utilities: Water ......................... 5.6%
Energy and Utilities: Natural Gas Integrated ........ 3.4%
Cable and Satellite ................................. 2.8%
Energy and Utilities: Oil ........................... 2.6%
Diversified Industrial .............................. 1.7%
Environmental Services .............................. 1.6%
Aerospace ........................................... 0.8%
Electronics ......................................... 0.8%
Business Services ................................... 0.7%
Wireless Communications ............................. 0.5%
Financial Services .................................. 0.4%
Entertainment ....................................... 0.4%
Real Estate ......................................... 0.4%
Health Care ......................................... 0.4%
Automotive: Parts and Accessories ................... 0.2%
Metals and Mining ................................... 0.2%
Transportation ...................................... 0.2%
Publishing .......................................... 0.2%
Communications Equipment ............................ 0.1%
Energy and Utilities: Alternative Energy ............ 0.1%
Energy and Utilities: Services ...................... 0.1%
Closed End Funds .................................... 0.1%
------
100.0%
======
THE GABELLI GLOBAL UTILITY & INCOME TRUST (THE "FUND") FILES A COMPLETE SCHEDULE
OF PORTFOLIO HOLDINGS WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC")
FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q, THE LAST OF
WHICH WAS FILED FOR THE QUARTER ENDED SEPTEMBER 30, 2006. 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; and (iii) visiting the SEC's website at
www.sec.gov.
2
THE GABELLI GLOBAL UTILITY & INCOME TRUST
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2006
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS -- 90.5%
AEROSPACE -- 0.8%
NON U.S. COMPANIES
68,000 Rolls-Royce Group plc+ .... $ 508,332 $ 596,147
2,495,600 Rolls-Royce Group plc, Cl. B 4,749 4,959
----------- -----------
513,081 601,106
----------- -----------
BUSINESS SERVICES -- 0.7%
NON U.S. COMPANIES
3,700 Sistema JSFC, GDR ......... 103,097 118,400
U.S. COMPANIES
10,000 Digital Insight Corp.+ .... 383,550 384,900
----------- -----------
486,647 503,300
----------- -----------
CABLE AND SATELLITE -- 2.8%
NON U.S. COMPANIES
10,000 Cogeco Inc. ............... 195,068 250,911
2,000 Rogers Communications Inc.,
Cl. B ................... 36,544 119,200
U.S. COMPANIES
25,000 Cablevision Systems Corp.,
Cl. A+ .................. 446,338 712,000
16,000 EchoStar Communications
Corp., Cl. A+ ........... 499,545 608,480
4,580 Liberty Global Inc., Cl. A+ 86,290 133,507
4,000 Liberty Global Inc., Cl. C+ 72,761 112,000
6,000 The DIRECTV Group Inc.+ ... 102,494 149,640
----------- -----------
1,439,040 2,085,738
----------- -----------
UNITS
------
CLOSED-END FUNDS -- 0.1%
2,103 Bell Aliant Regional
Communications Income
Fund+ (a) ............... 51,681 48,610
----------- -----------
SHARES
------
DIVERSIFIED INDUSTRIAL -- 1.7%
NON U.S. COMPANIES
18,000 Bouygues SA ............... 601,948 1,155,488
U.S. COMPANIES
3,000 Woodward Governor Co. ..... 85,802 119,130
----------- -----------
687,750 1,274,618
----------- -----------
ELECTRONICS -- 0.8%
U.S. COMPANIES
40,000 Symbol Technologies Inc. .. 591,377 597,600
----------- -----------
ENERGY AND UTILITIES: ALTERNATIVE ENERGY -- 0.1%
U.S. COMPANIES
2,500 Ormat Technologies Inc. ... 37,500 92,050
----------- -----------
ENERGY AND UTILITIES:
ELECTRIC TRANSMISSION AND DISTRIBUTION -- 6.9%
NON U.S. COMPANIES
8,775 National Grid plc, ADR .... 401,681 637,241
U.S. COMPANIES
4,900 CH Energy Group Inc. ...... 219,678 258,720
1,000 Consolidated Edison Inc. .. 44,903 48,070
40,000 Duquesne Light Holdings Inc. 777,948 794,000
18,000 Energy East Corp. ......... 428,738 446,400
5,000 Northeast Utilities ....... 90,818 140,800
50,000 NSTAR ..................... 1,187,449 1,718,000
40,000 Pepco Holdings Inc. ....... 757,783 1,040,400
1,666 UIL Holdings Corp. ........ 53,363 70,289
----------- -----------
3,962,361 5,153,920
----------- -----------
MARKET
SHARES COST VALUE
------ ---- -----
ENERGY AND UTILITIES: INTEGRATED -- 44.1%
NON U.S. COMPANIES
150,000 AEM SpA ................... $ 276,010 $ 501,452
500 Areva ..................... 204,193 371,593
8,000 Chubu Electric Power Co. Inc. 167,490 239,318
76,000 Datang International Power
Generation Co. Ltd., Cl. H 59,610 79,143
9,000 E.ON AG, ADR .............. 209,576 406,710
8,400 Electric Power Development
Co. Ltd. ................ 194,633 369,867
5,000 Endesa SA ................. 127,870 236,486
20,000 Endesa SA, ADR ............ 609,155 930,400
45,000 Enel SpA .................. 354,639 464,227
9,760 Energias de Portugal SA, ADR 262,599 494,442
30,000 Enersis SA, ADR ........... 178,868 480,000
142,000 Hera SpA .................. 303,068 616,699
10,000 Hokkaido Electric
Power Co. Inc. .......... 171,210 255,451
10,000 Hokuriku Electric Power Co. 165,392 227,301
2,000 Huaneng Power
International Inc., ADR 58,398 71,860
20,000 Iberdrola SA .............. 407,115 874,398
5,000 Korea Electric Power Corp.,
ADR+ .................... 72,677 113,550
10,000 Kyushu Electric Power Co. Inc. 178,959 263,854
4,500 Oesterreichische
Elektrizitaetswirtschafts
AG, Cl. A ............... 209,779 240,103
27,777 Scottish Power plc, ADR ... 1,167,075 1,623,010
10,000 Shikoku Electric
Power Co. Inc. .......... 171,759 238,225
10,000 The Chugoku Electric
Power Co. Inc. .......... 170,328 221,839
16,000 The Kansai Electric
Power Co. Inc. .......... 284,747 431,579
10,000 The Tokyo Electric
Power Co. Inc. .......... 220,693 323,516
10,000 Tohoku Electric
Power Co. Inc. .......... 164,025 249,989
U.S. COMPANIES
1,000 Allegheny Energy Inc.+ .... 25,689 45,910
7,000 ALLETE Inc. ............... 233,585 325,780
19,000 Ameren Corp. .............. 837,474 1,020,870
30,000 American Electric
Power Co. Inc. .......... 947,988 1,277,400
50,000 Aquila Inc.+ .............. 185,793 235,000
1,000 Avista Corp. .............. 20,848 25,310
6,000 Black Hills Corp. ......... 181,668 221,640
500 Cleco Corp. ............... 9,790 12,615
500 CMS Energy Corp.+ ......... 5,055 8,350
300 Constellation Energy Group 13,206 20,661
60,000 DPL Inc. .................. 1,627,242 1,666,800
44,000 Duke Energy Corp. ......... 1,067,734 1,461,240
1,000 El Paso Electric Co.+ ..... 17,760 24,370
6,000 Florida Public Utilities Co. 70,646 79,500
9,000 FPL Group Inc. ............ 317,570 489,780
60,000 Great Plains Energy Inc. .. 1,797,801 1,908,000
1,000 Green Mountain Power Corp. 33,616 33,890
24,000 Hawaiian Electric
Industries Inc. ......... 596,570 651,600
6,000 Maine & Maritimes Corp.+ .. 174,705 91,110
6,000 MGE Energy Inc. ........... 190,502 219,480
45,000 NiSource Inc. ............. 917,604 1,084,500
See accompanying notes to financial statements.
3
THE GABELLI GLOBAL UTILITY & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2006
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES: INTEGRATED (CONTINUED)
U.S. COMPANIES (CONTINUED)
6,000 NorthWestern Corp. ........ $ 209,603 $ 212,280
19,500 OGE Energy Corp. .......... 481,891 780,000
4,000 Otter Tail Corp. .......... 111,884 124,640
1,000 PG&E Corp. ................ 33,930 47,330
15,000 Pinnacle West Capital Corp. 615,958 760,350
4,200 PPL Corp. ................. 117,280 150,528
33,000 Progress Energy Inc. ...... 1,410,351 1,619,640
20,000 Public Service Enterprise
Group Inc. .............. 1,332,400 1,327,600
19,000 SCANA Corp. ............... 681,560 771,780
1,000 TECO Energy Inc. .......... 15,970 17,230
500 The Empire District
Electric Co. ............ 11,561 12,345
45,000 The Southern Co. .......... 1,322,848 1,658,700
800 TXU Corp. ................. 25,794 43,368
18,000 Unisource Energy Corp. .... 443,426 657,540
17,000 Vectren Corp. ............. 408,701 480,760
41,000 Westar Energy Inc. ........ 860,569 1,064,360
5,000 Wisconsin Energy Corp. .... 171,276 237,300
13,000 WPS Resources Corp. ....... 599,229 702,390
45,000 Xcel Energy Inc. .......... 761,339 1,037,700
----------- -----------
25,278,284 32,934,659
----------- -----------
ENERGY AND UTILITIES: NATURAL GAS INTEGRATED -- 3.4%
NON U.S. COMPANIES
80,000 Snam Rete Gas SpA ......... 347,871 453,831
U.S. COMPANIES
25,000 El Paso Corp. ............. 220,000 382,000
1,000 Energen Corp. ............. 30,935 46,940
6,000 Kinder Morgan Inc. ........ 632,740 634,500
16,000 National Fuel Gas Co. ..... 410,803 616,640
2,000 ONEOK Inc. ................ 51,437 86,240
10,500 Southern Union Co. ........ 229,082 293,475
----------- -----------
1,922,868 2,513,626
----------- -----------
ENERGY AND UTILITIES: NATURAL GAS UTILITIES -- 6.8%
U.S. COMPANIES
25,000 Atmos Energy Corp. ........ 615,364 797,750
6,000 Cascade Natural Gas Corp. 146,914 155,520
2,000 Chesapeake Utilities Corp. 53,224 61,300
35,000 KeySpan Corp. ............. 1,309,877 1,441,300
20,000 Nicor Inc. ................ 667,385 936,000
20,000 Peoples Energy Corp. ...... 809,245 891,400
5,000 Piedmont Natural
Gas Co. Inc. ............ 116,790 133,750
10,000 Southwest Gas Corp. ....... 233,760 383,700
8,000 The Laclede Group Inc. .... 229,823 280,240
----------- -----------
4,182,382 5,080,960
----------- -----------
ENERGY AND UTILITIES: OIL -- 2.6%
NON U.S. COMPANIES
500 Niko Resources Ltd. ....... 28,728 35,737
1,500 PetroChina Co. Ltd., ADR .. 96,520 211,170
10,000 Royal Dutch Shell plc,
Cl. A, ADR .............. 511,651 707,900
U.S. COMPANIES
4,700 Chevron Corp. ............. 288,796 345,591
2,000 ConocoPhillips ............ 74,050 143,900
2,000 Devon Energy Corp. ........ 67,255 134,160
1,000 Exxon Mobil Corp. ......... 45,500 76,630
3,000 Giant Industries Inc.+ .... 244,720 224,850
1,000 Murphy Oil Corp. .......... 40,273 50,850
29 TEL Offshore Trust ........ 216 270
----------- -----------
1,397,709 1,931,058
----------- -----------
ENERGY AND UTILITIES: SERVICES -- 0.1%
NON U.S. COMPANIES
5,000 ABB Ltd., ADR ............. $ 54,615 $ 89,900
----------- -----------
ENERGY AND UTILITIES: WATER -- 5.6%
NON U.S. COMPANIES
1,000 Consolidated Water Co. Ltd. 20,230 24,930
50,000 Severn Trent plc .......... 884,651 1,439,117
2,000 Suez SA ................... 62,915 103,967
12,000 Suez SA, ADR .............. 362,710 623,520
7,200 Suez SA, Strips+ .......... 0 95
50,000 United Utilities plc ...... 502,861 763,613
U.S. COMPANIES
8,666 Aqua America Inc. ......... 129,735 197,412
3,000 California Water
Service Group ........... 84,840 121,200
4,000 Middlesex Water Co. ....... 75,033 74,920
22,000 SJW Corp. ................. 358,906 852,720
----------- -----------
2,481,881 4,201,494
----------- -----------
ENTERTAINMENT -- 0.4%
NON U.S. COMPANIES
8,000 Vivendi ................... 215,620 312,692
----------- -----------
ENVIRONMENTAL SERVICES -- 1.6%
NON U.S. COMPANIES
75,000 Biffa plc ................. 235,160 450,826
10,000 Veolia Environnement ...... 272,510 770,906
----------- -----------
507,670 1,221,732
----------- -----------
FINANCIAL SERVICES -- 0.4%
U.S. COMPANIES
10,000 TD Banknorth Inc. ......... 322,050 322,800
----------- -----------
METALS AND MINING -- 0.2%
NON U.S. COMPANIES
5,000 Compania de Minas
Buenaventura SA, ADR .... 104,752 140,300
----------- -----------
PUBLISHING -- 0.2%
U.S. COMPANIES
1,200 Idearc Inc.+ .............. 36,474 34,380
5,000 The Reader's Digest
Association Inc. ........ 84,200 83,500
----------- -----------
120,674 117,880
----------- -----------
TELECOMMUNICATIONS -- 10.6%
NON U.S. COMPANIES
26,535 BCE Inc. .................. 522,556 716,445
26,000 BT Group plc, ADR ......... 890,462 1,557,140
12,000 Deutsche Telekom AG, ADR .. 202,098 218,400
6,000 France Telecom SA, ADR .... 149,213 166,200
3,000 Manitoba Telecom
Services Inc. ........... 100,193 119,367
40,000 Portugal Telecom SGPS SA .. 474,374 519,570
15,000 Royal KPN N.V.
Sponsored, ADR .......... 114,993 213,900
1,500 Swisscom AG ............... 478,884 567,809
24,062 Telecom Italia SpA ........ 78,318 72,737
16,000 Telefonica SA, ADR ........ 658,948 1,020,000
15,000 Telefonos de Mexico SAB
de CV, Cl. L, ADR ....... 231,816 423,900
U.S. COMPANIES
15,000 AT&T Inc. ................. 370,109 536,250
9,000 BellSouth Corp. ........... 226,200 423,990
1,000 Embarq Corp. .............. 32,460 52,560
20,000 Sprint Nextel Corp. ....... 328,202 377,800
24,000 Verizon Communications Inc. 875,363 893,760
----------- -----------
5,734,189 7,879,828
----------- -----------
See accompanying notes to financial statements.
4
THE GABELLI GLOBAL UTILITY & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2006
MARKET
SHARES COST VALUE
------ ---- -----
COMMON STOCKS (CONTINUED)
TRANSPORTATION -- 0.1%
U.S. COMPANIES
2,000 GATX Corp. ................ $ 56,076 $ 86,660
----------- -----------
WIRELESS COMMUNICATIONS -- 0.5%
NON U.S. COMPANIES
1,600 Mobile TeleSystems
OJSC, ADR ............... 54,874 80,304
2,000 Vimpel-Communications,
ADR+ .................... 61,000 157,900
U.S. COMPANIES
2,100 United States Cellular Corp.+ 95,967 146,139
----------- -----------
211,841 384,343
----------- -----------
TOTAL
COMMON STOCKS ............ 50,360,048 67,574,874
----------- -----------
CONVERTIBLE PREFERRED STOCKS -- 0.1%
TELECOMMUNICATIONS -- 0.0%
U.S. COMPANIES
500 Cincinnati Bell Inc.,
6.750% Cv. Pfd., Ser. B 20,555 23,000
----------- -----------
TRANSPORTATION -- 0.1%
U.S. COMPANIES
200 GATX Corp.,
$2.50 Cv. Pfd. .......... 26,010 44,500
----------- -----------
TOTAL CONVERTIBLE
PREFERRED STOCKS ......... 46,565 67,500
----------- -----------
PRINCIPAL
AMOUNT
---------
CONVERTIBLE CORPORATE BONDS -- 1.5%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.2%
U.S. COMPANIES
$ 150,000 The Pep Boys -
Manny, Moe & Jack, Cv.,
4.250%, 06/01/07 ........ 149,664 149,250
----------- -----------
COMMUNICATIONS EQUIPMENT -- 0.1%
U.S. COMPANIES
100,000 Agere Systems Inc.,
Sub. Deb. Cv.,
6.500%, 12/15/09 ........ 100,500 102,250
----------- -----------
HEALTH CARE -- 0.4%
U.S. COMPANIES
300,000 ICOS Corp., Sub. Deb. Cv.,
2.000%, 07/01/23 ........ 294,979 295,875
----------- -----------
PRINCIPAL MARKET
AMOUNT COST VALUE
--------- ---- -----
REAL ESTATE -- 0.4%
U.S. COMPANIES
Palm Harbor Homes Inc., Cv.,
$ 150,000 3.250%, 05/15/24 ........ $ 126,876 $ 127,500
200,000 3.250%, 05/15/24 (a) .... 197,454 170,000
----------- -----------
324,330 297,500
----------- -----------
TELECOMMUNICATIONS -- 0.4%
NON U.S. COMPANIES
300,000 Nortel Networks Corp., Cv.,
4.250%, 09/01/08 ........ 292,167 291,750
----------- -----------
TOTAL CONVERTIBLE
CORPORATE BONDS .......... 1,161,640 1,136,625
----------- -----------
U.S. GOVERNMENT OBLIGATIONS -- 7.9%
5,972,000 U.S. Treasury Bills,
4.845% to 5.116%++,
01/04/07 to 03/29/07 .... 5,933,240 5,933,504
----------- -----------
TOTAL INVESTMENTS -- 100.0% ............ $57,501,493 74,712,503
===========
OTHER ASSETS AND LIABILITIES (NET) ................. 94,230
-----------
NET ASSETS -- COMMON SHARES
(3,050,236 common shares outstanding) ............ $74,806,733
===========
NET ASSET VALUE PER COMMON SHARE
($74,806,733 / 3,050,236 shares outstanding) .... $24.52
======
-------------
(a) Security exempt from registration under Rule 144A of the Securities Act
of 1933, as amended. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
December 31, 2006, the Rule 144A securities are considered liquid and the
market value amounted to $218,610 or 0.29% of total investments.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
GDR Global Depository Receipt
% OF
MARKET MARKET
VALUE VALUE
----- -----
GEOGRAPHIC DIVERSIFICATION
North America ................... 68.0% $50,784,629
Europe .......................... 26.2 19,562,080
Japan ........................... 3.8 2,820,940
Latin America ................... 1.4 1,069,130
Asia/Pacific .................... 0.6 475,724
----- -----------
Total Investments ............... 100.0% $74,712,503
===== ===========
See accompanying notes to financial statements.
5
THE GABELLI GLOBAL UTILITY & INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2006
ASSETS:
Investments, at value (cost $57,501,493) ........ $74,712,503
Foreign currency, at value (cost $1) ............ 1
Cash ............................................ 64,960
Dividends and interest receivable ............... 206,340
Prepaid expense ................................. 4,853
-----------
TOTAL ASSETS .................................... 74,988,657
-----------
LIABILITIES:
Payable for investment advisory fees ............ 63,207
Payable for legal and audit fees ................ 47,832
Payable for shareholder communications
expenses ...................................... 36,871
Payable for payroll expenses .................... 17,594
Payable for accounting fees ..................... 7,501
Other accrued expenses and liabilities .......... 8,919
-----------
TOTAL LIABILITIES ............................... 181,924
-----------
NET ASSETS applicable to 3,050,236
shares outstanding ............................ $74,806,733
===========
NET ASSETS CONSIST OF:
Paid-in capital, at $0.001 par value ............ $57,339,953
Accumulated net realized gain on investments
and foreign currency transactions ............. 255,242
Net unrealized appreciation on investments ...... 17,211,010
Net unrealized appreciation on foreign
currency translations ......................... 528
-----------
NET ASSETS ...................................... $74,806,733
===========
NET ASSET VALUE PER COMMON SHARE:
($74,806,733 / 3,050,236 shares outstanding;
unlimited number of shares authorized) ........ $24.52
======
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2006
INVESTMENT INCOME:
Dividends (net of foreign taxes of $80,908) ..... $ 2,837,813
Interest ........................................ 236,353
-----------
TOTAL INVESTMENT INCOME ......................... 3,074,166
-----------
EXPENSES:
Investment advisory fees ........................ 672,287
Payroll expenses ................................ 126,813
Shareholder communications expenses ............. 100,714
Trustees' fees .................................. 54,503
Legal and audit fees ............................ 53,131
Accounting fees ................................. 45,000
Custodian fees .................................. 20,613
Shareholder services fees ....................... 14,222
Miscellaneous expenses .......................... 26,561
-----------
TOTAL EXPENSES .................................. 1,113,844
Less: Custodian fee credits ..................... (2,456)
-----------
NET EXPENSES .................................... 1,111,388
-----------
NET INVESTMENT INCOME ........................... 1,962,778
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, SECURITIES SOLD SHORT,
AND FOREIGN CURRENCY: ...........................
Net realized gain on investments ................ 1,917,267
Net realized gain on securities sold short ...... 21,525
Net realized loss on foreign currency transactions (4,637)
-----------
Net realized gain on investments, securities sold
short, and foreign currency transactions ...... 1,934,155
-----------
Net change in unrealized appreciation/
depreciation on investments ................... 12,186,590
Net change in unrealized appreciation/
depreciation on foreign currency translations 2,517
-----------
Net change in unrealized appreciation/
depreciation on investments and foreign
currency translations ......................... 12,189,107
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS, SECURITIES SOLD SHORT,
AND FOREIGN CURRENCY .......................... 14,123,262
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................... $16,086,040
===========
See accompanying notes to financial statements.
6
THE GABELLI GLOBAL UTILITY & INCOME TRUST
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
DECEMBER 31, 2006 DECEMBER 31, 2005
------------------- -------------------
OPERATIONS:
Net investment income ........................................................... $ 1,962,778 $ 1,919,979
Net realized gain on investments, securities sold short, and
foreign currency transactions ................................................ 1,934,155 2,521,834
Net change in unrealized appreciation/depreciation on investments and
foreign currency translations ................................................ 12,189,107 (1,797,961)
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................ 16,086,040 2,643,852
----------- -----------
DISTRIBUTIONS TO COMMON SHARES:
Net investment income ........................................................... (1,977,497) (1,932,706)
Net realized short-term gain on investments and foreign currency transactions ... (22,545) (447,122)
Net realized long-term gain on investments and foreign currency transactions .... (1,660,252) (2,043,014)
----------- -----------
TOTAL DISTRIBUTIONS TO COMMON SHARES ............................................ (3,660,294) (4,422,842)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ........................................... 12,425,746 (1,778,990)
NET ASSETS:
Beginning of period ............................................................. 62,380,987 64,159,977
----------- -----------
End of period (including undistributed net investment income of $0 and
$19,356, respectively) ........................................................ $74,806,733 $62,380,987
=========== ===========
See accompanying notes to financial statements.
7
THE GABELLI GLOBAL UTILITY & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION. The Gabelli Global Utility & Income Trust (the "Fund") is a
non-diversified closed-end management investment company organized as a Delaware
statutory trust on March 8, 2004 and registered under the Investment Company Act
of 1940, as amended (the "1940 Act"). Investment operations commenced on May 28,
2004.
The Fund's investment objective is to seek a consistent level of after-tax
total return over the long term with an emphasis currently on qualified
dividends. The Fund will attempt to achieve its investment objective by
investing, under normal market conditions, at least 80% of its assets in equity
securities (including preferred securities) of domestic and foreign companies
involved to a substantial extent in providing products, services, or equipment
for the generation or distribution of electricity, gas, or water and
infrastructure operations, and in equity securities (including preferred
securities) of companies in other industries, in each case in such securities
that are expected to periodically pay dividends.
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 American Depository
Receipt ("ADR") securities at the close of the U.S. exchange; and evaluation of
any other information that could be indicative of the value of the security.
In September 2006, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. At this time,
management is in the process of reviewing the requirements of SFAS 157 against
its current valuation policies to determine future applicability.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
The Fund will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by the Fund in each agreement. The Fund will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited. At December
31, 2006, there were no open repurchase agreements.
8
THE GABELLI GLOBAL UTILITY & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose
of hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin". Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuations in the
value of the contract, which are included in unrealized
appreciation/(depreciation) on investments and futures contracts. The Fund
recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as
a hedging instrument. The change in value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in value of the hedged investments. In addition, there
is the risk that the Fund may not be able to enter into a closing transaction
because of an illiquid secondary market. At December 31, 2006, there were no
open futures contracts.
SECURITIES SOLD SHORT. The Fund may enter into short sale transactions.
Short selling involves selling securities that may or may not be owned and, at
times, borrowing the same securities for delivery to the purchaser, with an
obligation to replace such borrowed securities at a later date. The proceeds
received from short sales are recorded as liabilities and the Fund records an
unrealized gain or loss to the extent of the difference between the proceeds
received and the value of an open short position on the day of determination.
The Fund records a realized gain or loss when the short position is closed out.
By entering into a short sale, the Fund bears the market risk of an unfavorable
change in the price of the security sold short. Dividends on short sales are
recorded as an expense by the Fund on the ex-dividend date and interest expense
is recorded on the accrual basis. At December 31, 2006, there were no open
securities sold short.
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 December 31, 2006, 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.
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.
9
THE GABELLI GLOBAL UTILITY & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 of 2.00% above the Federal Funds
rate on outstanding balances. This amount, if any, would be shown as "interest
expense" in the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders are recorded
on the ex-dividend date. Distributions to shareholders are based on income and
capital gains as determined in accordance with Federal income tax regulations,
which may differ from income and capital gains as determined under U.S.
generally accepted accounting principles. These differences are primarily due to
differing treatments of income and gains on various investment securities and
foreign currency transactions held by the Fund, timing differences, and
differing characterizations of distributions made by the Fund. Distributions
from net investment income include net realized gains on foreign currency
transactions. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, adjustments are made to
the appropriate capital accounts in the period when the differences arise. These
reclassifications have no impact on the net asset value ("NAV") of the Fund. For
the fiscal year ended December 31, 2006, reclassifications were made to decrease
accumulated net investment income by $4,637 and increase accumulated net
realized gain on investments and foreign currency transactions by $4,637.
The tax character of distributions paid during the fiscal years ended
December 31, 2006 and December 31, 2005 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2006 DECEMBER 31, 2005
------------------- -------------------
COMMON COMMON
-------- --------
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) ..... $2,000,042 $2,379,828
Net long-term capital gains ................... 1,660,252 2,043,014
---------- ----------
Total distributions paid ...................... $3,660,294 $4,422,842
========== ==========
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for Federal income taxes is required.
At December 31, 2006, the difference between book basis and tax basis
unrealized appreciation was primarily due to deferral of losses from wash sales
for tax purposes.
As of December 31, 2006, the components of accumulated earnings/(losses) on
a tax basis were as follows:
Net unrealized appreciation on investments ............ $17,209,799
Net unrealized appreciation on foreign currency ....... 528
Undistributed ordinary income
(inclusive of short-term capital gains) ............. 256,453
-----------
Total accumulated earnings ............................ $17,466,780
===========
The following summarizes the tax cost of investments, and the related
unrealized appreciation/(depreciation) at December 31, 2006:
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
---- -------------- -------------- ----------------
Investments ............... $57,502,704 $17,355,197 $(145,398) $17,209,799
=========== ========= ===========
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 establishes 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
requires certain expanded tax disclosures. The Interpretation is required to be
implemented for the Fund no later than June 29, 2007, and is to be applied to
all open tax years as of the date of effectiveness. Management has begun to
evaluate the application of the Interpretation to the Fund, and is not in a
position at this time to estimate the significance of its impact, if any, on the
Fund's financial statements.
10
THE GABELLI GLOBAL UTILITY & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 the Fund's average
weekly net assets. 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.
During the fiscal year ended December 31, 2006, the Fund paid brokerage
commissions of $12,777 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. During the fiscal year ended December 31, 2006, the
Fund paid or accrued $45,000 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 $2,663 for the fiscal year
ended December 31, 2006 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 $3,000 plus $1,000 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.
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 fiscal year ended December 31, 2006, other than short-term and U.S.
Government securities, aggregated $14,920,633 and $13,779,952, respectively.
5. CAPITAL. The Fund is authorized to issue an unlimited number of common 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 fiscal years ended
December 31, 2006 and December 31, 2005, the Fund did not have any transactions
in shares of beneficial interest.
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. The staff's notice to the Adviser did not relate to the
Fund.
11
THE GABELLI GLOBAL UTILITY & INCOME TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
YEAR ENDED YEAR ENDED PERIOD ENDED
DECEMBER 31, 2006 DECEMBER 31, 2005 DECEMBER 31, 2004(A)
------------------- ------------------- ----------------------
OPERATING PERFORMANCE:
Net asset value, beginning of period .......................... $ 20.45 $ 21.03 $ 19.06(b)
------- ------- -------
Net investment income ......................................... 0.64 0.64 0.28
Net realized and unrealized gain on investments and foreign
currency transactions ....................................... 4.63 0.23 2.29
------- ------- -------
Total from investment operations .............................. 5.27 0.87 2.57
------- ------- -------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ......................................... (0.65) (0.63) (0.28)
Net realized gain on investments .............................. (0.55) (0.82) (0.06)
Return of capital ............................................. -- -- (0.26)
------- ------- -------
Total distributions to common shareholders .................... (1.20) (1.45) (0.60)
------- ------- -------
NET ASSET VALUE, END OF PERIOD ................................ $ 24.52 $ 20.45 $ 21.03
======= ======= =======
NAV total return* ............................................. 26.66% 4.2% 13.9%***
======= ======= =======
Market value, end of period ................................... $ 22.17 $ 17.76 $ 19.63
======= ======= =======
Investment total return** ..................................... 32.83% (2.3)% 1.3%****
======= ======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) .......................... $74,807 $62,381 $64,160
Ratio of net investment income to average net assets .......... 2.92% 2.99% 2.23%(c)
Ratio of operating expenses to average net assets ............. 1.66% 1.56% 1.49%(c)
Portfolio turnover rate ....................................... 21.8% 21.0% 16.9%
-------------------
(a) The Gabelli Global Utility & Income Trust commenced investment operations
on May 28, 2004.
(b) The beginning of period NAV reflects a $0.04 reduction for costs associated
with the initial public offering.
(c) Annualized.
* Based on net asset value per share, adjusted for reinvestment of
distributions at the net asset value per share on the ex-dividend dates.
Total return for a period of less than one year is not annualized.
** Based on market value per share, adjusted for reinvestment of distributions
at prices obtained under the Fund's dividend reinvestment plan. Total
return for a period of less than one year is not annualized.
*** Based on net asset value per share at commencement of operations of $19.06
per share.
**** Based on market value per share at initial public offering of $20.00 per
share.
See accompanying notes to financial statements.
12
THE GABELLI GLOBAL UTILITY & INCOME TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
The Gabelli Global Utility & Income Trust:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Gabelli Global Utility & Income
Trust (hereafter referred to as the "Fund") at December 31, 2006, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended and the financial highlights for each
of the periods presented, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 2006 by correspondence with the
custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 28, 2007
13
THE GABELLI GLOBAL UTILITY & INCOME TRUST
ADDITIONAL FUND INFORMATION (UNAUDITED)
The business and affairs of the Fund are managed under the direction of
the Fund's Board of Trustees. Information pertaining to the Trustees and
officers of the Fund is set forth below. The Fund's Statement of Additional
Information includes additional information about the Fund's Trustees and
officers and is available, without charge, upon request, by calling 800-GABELLI
(800-422-3554) or by writing to The Gabelli Global Utility & Income Trust at One
Corporate Center, Rye, NY 10580-1422.
TERM OF NUMBER OF
OFFICE AND FUNDS IN FUND
NAME, POSITION(S) LENGTH OF COMPLEX
ADDRESS 1 TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE SERVED 2 TRUSTEE DURING PAST FIVE YEARS HELD BY TRUSTEE 4
------- -------- ------- ---------------------- -----------------
INTERESTED TRUSTEE 3:
---------------------
SALVATORE M. SALIBELLO Since 2004** 3 Certified Public Accountant and Managing --
Trustee Partner of the public accounting firm
Age: 61 Salibello & Broder LLP since 1978
INDEPENDENT TRUSTEES 5:
-----------------------
ANTHONY J. COLAVITA Since 2004* 34 Partner in the law firm of --
Trustee Anthony J. Colavita, P.C.
Age: 71
JAMES P. CONN Since 2004** 15 Former Managing Director and Chief Director of First
Trustee Investment Officer of Financial Republic Bank (banking)
Age: 68 Security Assurance Holdings Ltd.
(insurance holding company) (1992-1998)
MARIO D'URSO Since 2004*** 4 Chairman of Mittel Capital Markets S.p.A., --
Trustee since 2001; Senator in the Italian
Age: 66 Parliament (1996-2001)
VINCENT D. ENRIGHT Since 2004*** 13 Former Senior Vice President and Chief --
Trustee Financial Officer of KeySpan Energy
Age: 63 Corporation (public utility)
(1994-1998)
MICHAEL J. MELARKEY Since 2004*** 4 Partner in the law firm of Avansino, Director of Southwest Gas
Trustee Melarkey, Knobel & Mulligan Corporation (natural gas
Age: 57 utility)
SALVATORE J. ZIZZA Since 2004* 25 Chairman of Hallmark Electrical Director of Hollis-Eden
Trustee Supplies Corp. (distribution of Pharmaceuticals
Age: 61 electrical supplies) (biotechnology)
and Earl Scheib, Inc.
(automotive services)
14
THE GABELLI GLOBAL UTILITY & INCOME TRUST
ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED)
TERM OF
OFFICE AND
NAME, POSITION(S) LENGTH OF
ADDRESS 1 TIME PRINCIPAL OCCUPATION(S)
AND AGE SERVED 2 DURING PAST FIVE YEARS
---------------- ---------- ----------------------
OFFICERS:
---------
BRUCE N. ALPERT Since 2004 Executive Vice President and Chief Operating Officer of Gabelli Funds,
President LLC since 1988 and an officer of all of the registered investment companies
Age: 55 in the Gabelli Funds complex. Director and President of Gabelli Advisers,
Inc. since 1998
DAVID I. SCHACHTER Since 2004 Vice President of The Gabelli Utility Trust since 1999 and Research Analyst
Vice President at Gabelli Company, Inc. since 1999
Age: 53
JAMES E. MCKEE Since 2004 Vice President, General Counsel and Secretary of GAMCO Investors, Inc.
Secretary (since 1999) and of GAMCO Asset Management Inc. (since 1993); Secretary
Age: 43 of all of the registered investment companies in the Gabelli Funds complex
AGNES MULLADY Since 2006 Treasurer of all of the registered investment companies in the Gabelli
Treasurer Funds complex; Senior Vice President of U.S. Trust Company, N.A. and
Age: 48 Treasurer and Chief Financial Officer of Excelsior Funds from 2004 through
2005; Chief Financial Officer of AMIC Distribution Partners from 2002
through 2004; Controller of Reserve Management Corporation and Reserve
Partners, Inc. and Treasurer of Reserve Funds from 2000 through 2002
PETER D. GOLDSTEIN Since 2004 Director of Regulatory Affairs at GAMCO Investors, Inc. since 2004; Chief
Chief Compliance Officer Compliance Officer of all of the registered investment companies in the
Age: 53 Gabelli Funds complex; Vice President of Goldman Sachs Asset Management
from 2000 through 2004
---------------------
1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
2 The Fund's Board of Trustees is divided into three classes, each class
having a term of three years. Each year the term of office of one class
expires and the successor or successors elected to such class serve for a
three year term. The three year term for each class expires as follows:
* - Term expires at the Fund's 2008 Annual Meeting of Shareholders or
until their successors are duly elected and qualified.
** - Term expires at the Fund's 2009 Annual Meeting of Shareholders or
until their successors are duly elected and qualified.
*** - Term expires at the Fund's 2007 Annual Meeting of Shareholders or
until their successors are duly elected and qualified.
Each officer will hold office for an indefinite term until the date he
or she resigns or retires or until his or her successor is elected and
qualified.
3 "Interested person" of the Fund as defined in the 1940 Act. Mr. Salibello
may be considered an "interested person" of the Fund as a result of being a
partner in an accounting firm that provides professional services to
affiliates of the investment adviser.
4 This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934, as amended (i.e. public
companies) or other investment companies registered under the 1940 Act.
5 Trustees who are not interested persons are considered "Independent"
Trustees.
15
THE GABELLI GLOBAL UTILITY & INCOME TRUST
INCOME TAX INFORMATION (UNAUDITED)
DECEMBER 31, 2006
CASH DIVIDENDS AND DISTRIBUTIONS
TOTAL AMOUNT ORDINARY LONG-TERM DIVIDEND
PAYABLE RECORD PAID INVESTMENT CAPITAL REINVESTMENT
DATE DATE PER SHARE (A) INCOME (A) GAINS (A) PRICE
-------- ------ ------------- ---------- --------- ------------
COMMON SHARES
01/25/06 01/17/06 $0.10000 $0.05760 $0.04240 $18.57000
02/22/06 02/13/06 0.10000 0.05440 0.04560 18.94860
03/27/06 03/17/06 0.10000 0.05440 0.04560 18.60330
04/24/06 04/13/06 0.10000 0.05440 0.04560 18.21810
05/24/06 05/16/06 0.10000 0.05440 0.04560 18.09150
06/26/06 06/16/06 0.10000 0.05440 0.04560 18.21100
07/25/06 07/17/06 0.10000 0.05440 0.04560 18.86390
08/25/06 08/17/06 0.10000 0.05440 0.04560 19.54520
09/25/06 09/15/06 0.10000 0.05440 0.04560 19.76540
10/25/06 10/17/06 0.10000 0.05440 0.04560 20.92260
11/24/06 11/15/06 0.10000 0.05440 0.04560 20.65160
12/18/06 12/13/06 0.10000 0.05440 0.04560 21.73000
-------- -------- --------
$1.20000 $0.65600 $0.54400
A Form 1099-DIV has been mailed to all shareholders of record for the
distributions mentioned above, setting forth specific amounts to be included in
your 2006 tax returns. Ordinary income distributions include net investment
income and realized net short-term capital gains. Ordinary income is reported in
box 1a of Form 1099-DIV. Capital gain distributions are reported in box 2a of
Form 1099-DIV. The long-term gain distributions for the fiscal year ended
December 31, 2006 were $1,660,252.
CORPORATE DIVIDENDS RECEIVED DEDUCTION, QUALIFIED DIVIDEND INCOME, AND U.S.
TREASURY SECURITIES INCOME
The Fund paid to common shareholders an ordinary income dividend of
$0.65600 per share in 2006. For the fiscal year ended December 31, 2006, 82.50%
of the ordinary dividend qualified for the dividend received deduction available
to corporations, and 100% of the ordinary income distribution was qualified
dividend income. The percentage of ordinary income dividends paid by the Fund
during 2006 derived from U.S. Treasury Securities was 6.19%. Such income is
exempt from state and local tax in all states. However, many states, including
New York and California, allow a tax exemption for a portion of the income
earned only if a mutual fund has invested at least 50% of its assets at the end
of each quarter of its fiscal year in U.S. Government Securities. The Fund did
not meet this strict requirement in 2006. The percentage of U.S. Government
Securities held as of December 31, 2006 was 7.93%.
HISTORICAL DISTRIBUTION SUMMARY
COMMON SHARES
SHORT-TERM LONG-TERM ADJUSTMENT
INVESTMENT CAPITAL CAPITAL RETURN OF TOTAL TO
INCOME (B) GAINS (B) GAINS CAPITAL (C) DISTRIBUTIONS (A) COST BASIS (D)
---------- --------- --------- ----------- ----------------- --------------
2006 .......................... $0.56420 $0.09180 $0.54400 -- $1.20000 --
2005 .......................... 0.63370 0.15660 0.65970 -- 1.45000 --
2004 .......................... 0.26099 0.07758 -- $0.26143 0.60000 $0.26143
--------------------------
(a) Total amounts may differ due to rounding.
(b) Taxable as ordinary income for Federal tax purposes.
(c) Non-taxable.
(d) Decrease in cost basis.
16
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLANS
ENROLLMENT IN THE PLAN
It is the Policy of The Gabelli Global Utility & Income 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 Global Utility & Income Trust
c/o Computershare
P.O. Box 43010
Providence, RI02940-3010
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 an American Stock Exchange ("Amex") 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 Amex 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.
17
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 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.
--------------------------------------------------------------------------------
The Annual Meeting of The Gabelli Global Utility & Income Trust's shareholders
will be held at 11:30 A.M. on Monday, May 14, 2007 at the Greenwich Library in
Greenwich, Connecticut.
--------------------------------------------------------------------------------
18
[GRAPHIC OMITTED] FLAG LOGO
TRUSTEES AND OFFICERS
THE GABELLI GLOBAL UTILITY & INCOME TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES OFFICERS
Anthony J. Colavita Bruce N. Alpert
ATTORNEY-AT-LAW, PRESIDENT
ANTHONY J. COLAVITA, P.C.
Peter D. Goldstein
James P. Conn CHIEF COMPLIANCE OFFICER
FORMER CHIEF INVESTMENT OFFICER,
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD. James E. McKee
SECRETARY
Mario d'Urso
CHAIRMAN, MITTEL CAPITAL MARKETS SPA Agnes Mullady
TREASURER
Vincent D. Enright
FORMER SENIOR VICE PRESIDENT & David I.Schachter
CHIEF FINANCIAL OFFICER, VICE PRESIDENT
KEYSPAN ENERGY CORP.
INVESTMENT ADVISER
Michael J. Melarkey Gabelli Funds, LLC
ATTORNEY-AT-LAW, One Corporate Center
AVANSINO, MELARKEY, KNOBEL & MULLIGAN Rye, New York 10580-1422
Salvatore M. Salibello CUSTODIAN
CERTIFIED PUBLIC ACCOUNTANT, State Street Bank and Trust Company
SALIBELLO & BRODER, LLP
COUNSEL
Salvatore J. Zizza Skadden, Arps, Slate, Meagher & Flom, LLP
CHAIRMAN, HALLMARK ELECTRICAL SUPPLIES CORP.
TRANSFER AGENT AND REGISTRAR
Computershare Trust Company, N.A.
STOCK EXCHANGE LISTING
Common
------
Amex - Symbol: GLU
Shares Outstanding: 3,050,236
The Net Asset Value per share appears 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.
--------------------------------------------------------------------------------
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 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 GABELLI GLOBAL UTILITY & INCOME TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422
PHONE: 800-GABELLI (800-422-3554)
FAX: 914-921-5118 INTERNET: WWW.GABELLI.COM
E-MAIL: CLOSEDEND@GABELLI.COM
GLU Q4/2006
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, that relates to one or
more of the items set forth in paragraph (b) of this item's
instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's Board of
Trustees has determined that Vincent D. Enright is qualified to serve as an
audit committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$41,987 for 2005 and $42,500 for 2006.
AUDIT-RELATED FEES
(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $0 for 2005 and $0 for 2006.
TAX FEES
(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $2,880 for 2005 and
$3,100 for 2006. Tax fees represent tax compliance services provided
in connection with the review of the Registrant's tax returns.
ALL OTHER FEES
(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are
$0 for 2005 and $0 for 2006.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
Pre-Approval Policies and Procedures. The Audit Committee
("Committee") of the registrant is responsible for pre-approving (i)
all audit and permissible non-audit services to be provided by the
independent registered public accounting firm to the registrant and
(ii) all permissible non-audit services to be provided by the
independent registered public accounting firm to the Adviser, Gabelli
Funds, LLC, and any affiliate of Gabelli Funds, LLC ("Gabelli") that
provides services to the registrant (a "Covered Services Provider") if
the independent registered public accounting firm's engagement related
directly to the operations and financial reporting of the registrant.
The Committee may delegate its responsibility to pre-approve any such
audit and permissible non-audit services to the Chairperson of the
Committee, and the Chairperson must report to the Committee, at its
next regularly scheduled meeting after the Chairperson's pre-approval
of such services, his or her decision(s). The Committee may also
establish detailed pre-approval policies and procedures for
pre-approval of such services in accordance with applicable laws,
including the delegation of some or all of the Committee's
pre-approval responsibilities to the other persons (other than Gabelli
or the registrant's officers). Pre-approval by the Committee of any
permissible non-audit services is not required so long as: (i) the
permissible non-audit services were not recognized by the registrant
at the time of the engagement to be non-audit services; and (ii) such
services are promptly brought to the attention of the Committee and
approved by the Committee or Chairperson prior to the completion of
the audit.
(e)(2) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) Not applicable
(c) 100%
(d) Not applicable
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was 0%.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled
by, or under common control with the adviser that provides ongoing
services to the registrant for each of the last two fiscal years of
the registrant was $0 for 2005 and $0 for 2006.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately designated audit committee consisting of the
following members: Anthony J. Colavita, Vincent D. Enright, and Salvatore J.
Zizza.
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.
The Proxy Voting Policies are attached herewith.
THE VOTING OF PROXIES ON BEHALF OF CLIENTS
Rules 204(4)-2 and 204-2 under the Investment Advisers Act of 1940 and
Rule 30b1-4 under the Investment Company Act of 1940 require investment advisers
to adopt written policies and procedures governing the voting of proxies on
behalf of their clients.
These procedures will be used by GAMCO Asset Management Inc., Gabelli
Funds, LLC, Gabelli Securities, Inc., and Gabelli Advisers, Inc. (collectively,
the "Advisers") to determine how to vote proxies relating to portfolio
securities held by their clients, including the procedures that the Advisers use
when a vote presents a conflict between the interests of the shareholders of an
investment company managed by one of the Advisers, on the one hand, and those of
the Advisers; the principal underwriter; or any affiliated person of the
investment company, the Advisers, or the principal underwriter. These procedures
will not apply where the Advisers do not have voting discretion or where the
Advisers have agreed to with a client to vote the client's proxies in accordance
with specific guidelines or procedures supplied by the client (to the extent
permitted by ERISA).
I. PROXY VOTING COMMITTEE
The Proxy Voting Committee was originally formed in April 1989 for the purpose
of formulating guidelines and reviewing proxy statements within the parameters
set by the substantive proxy voting guidelines originally published by GAMCO
Investors, Inc. in 1988 and updated periodically, a copy of which are appended
as Exhibit A. The Committee will include representatives of Research,
Administration, Legal, and the Advisers. Additional or replacement members of
the Committee will be nominated by the Chairman and voted upon by the entire
Committee.
Meetings are held as needed basis to form views on the manner in which
the Advisers should vote proxies on behalf of their clients.
In general, the Director of Proxy Voting Services, using the Proxy
Guidelines, recommendations of Institutional Shareholder Corporate Governance
Service ("ISS"), other third-party services and the analysts of Gabelli &
Company, Inc., will determine how to vote on each issue. For non-controversial
matters, the Director of Proxy Voting Services may vote the proxy if the vote is
(1) consistent with the recommendations of the issuer's Board of Directors and
not contrary to the Proxy Guidelines; (2) consistent with the recommendations of
the issuer's Board of Directors and is a non-controversial issue not covered by
the Proxy Guidelines; or (3) the vote is contrary to the recommendations of the
Board of Directors but is consistent with the Proxy Guidelines. In those
instances, the Director of Proxy Voting Services or the Chairman of the
Committee may sign and date the proxy statement indicating how each issue will
be voted.
All matters identified by the Chairman of the Committee, the Director
of Proxy Voting Services or the Legal Department as controversial, taking into
account the recommendations of ISS or other third party services and the
analysts of Gabelli & Company, Inc., will be presented to the Proxy Voting
Committee. If the Chairman of the Committee, the Director of Proxy Voting
Services or the Legal Department has identified the matter as one that (1) is
controversial; (2) would benefit from deliberation by the Proxy Voting
Committee; or (3) may give rise to a conflict of interest between the Advisers
and their clients, the Chairman of the Committee will initially determine what
vote to recommend that the Advisers should cast and the matter will go before
the Committee.
A. CONFLICTS OF INTEREST.
THE ADVISERS HAVE IMPLEMENTED THESE PROXY VOTING PROCEDURES IN
ORDER TO PREVENT CONFLICTS OF INTEREST FROM INFLUENCING THEIR
PROXY VOTING DECISIONS. BY FOLLOWING THE PROXY GUIDELINES, AS
WELL AS THE RECOMMENDATIONS OF ISS, OTHER THIRD-PARTY SERVICES
AND THE ANALYSTS OF GABELLI & COMPANY, THE ADVISERS ARE ABLE TO
AVOID, WHEREVER POSSIBLE, THE INFLUENCE OF POTENTIAL CONFLICTS OF
INTEREST. NEVERTHELESS, CIRCUMSTANCES MAY ARISE IN WHICH ONE OR
MORE OF THE ADVISERS ARE FACED WITH A CONFLICT OF INTEREST OR THE
APPEARANCE OF A CONFLICT OF INTEREST IN CONNECTION WITH ITS VOTE.
IN GENERAL, A CONFLICT OF INTEREST MAY ARISE WHEN AN ADVISER
KNOWINGLY DOES BUSINESS WITH AN ISSUER, AND MAY APPEAR TO HAVE A
MATERIAL CONFLICT BETWEEN ITS OWN INTERESTS AND THE INTERESTS OF
THE SHAREHOLDERS OF AN INVESTMENT COMPANY MANAGED BY ONE OF THE
ADVISERS REGARDING HOW THE PROXY IS TO BE VOTED. A CONFLICT ALSO
MAY EXIST WHEN AN ADVISER HAS ACTUAL KNOWLEDGE OF A MATERIAL
BUSINESS ARRANGEMENT BETWEEN AN ISSUER AND AN AFFILIATE OF THE
ADVISER.
IN PRACTICAL TERMS, A CONFLICT OF INTEREST MAY ARISE, FOR
EXAMPLE, WHEN A PROXY IS VOTED FOR A COMPANY THAT IS A CLIENT OF
ONE OF THE ADVISERS, SUCH AS GAMCO ASSET MANAGEMENT INC. A
CONFLICT ALSO MAY ARISE WHEN A CLIENT OF ONE OF THE ADVISERS HAS
MADE A SHAREHOLDER PROPOSAL IN A PROXY TO BE VOTED UPON BY ONE OR
MORE OF THE ADVISERS. THE DIRECTOR OF PROXY VOTING SERVICES,
TOGETHER WITH THE LEGAL DEPARTMENT, WILL SCRUTINIZE ALL PROXIES
FOR THESE OR OTHER SITUATIONS THAT MAY GIVE RISE TO A CONFLICT OF
INTEREST WITH RESPECT TO THE VOTING OF PROXIES.
A. OPERATION OF PROXY VOTING COMMITTEE.
For matters submitted to the Committee, each member of the
Committee will receive, prior to the meeting, a copy of the proxy
statement, any relevant third party research, a summary of any
views provided by the Chief Investment Officer and any
recommendations by Gabelli & Company, Inc. analysts. The Chief
Investment Officer or the Gabelli & Company, Inc. analysts may be
invited to present their viewpoints. IF THE DIRECTOR OF PROXY
VOTING SERVICES or the Legal Department believe that the matter
before the committee is one with respect to which a conflict of
interest may exist between the Advisers and their clients,
counsel will provide an opinion to the Committee concerning the
conflict. If the matter is one in which the interests of the
clients of one or more of Advisers may diverge, counsel will so
advise and the Committee may make different recommendations as to
different clients. For any matters where the recommendation may
trigger appraisal rights, counsel will provide an opinion
concerning the likely risks and merits of such an appraisal
action.
Each matter submitted to the Committee will be determined by the vote
of a majority of the members present at the meeting. Should the vote concerning
one or more recommendations be tied in a vote of the Committee, the Chairman of
the Committee will cast the deciding vote. The Committee will notify the proxy
department of its decisions and the proxies will be voted accordingly.
Although the Proxy Guidelines express the normal preferences for the
voting of any shares not covered by a contrary investment guideline provided by
the client, the Committee is not bound by the preferences set forth in the Proxy
Guidelines and will review each matter on its own merits. Written minutes of all
Proxy Voting Committee meetings will be maintained. The Advisers subscribe to
ISS, which supplies current information on companies, matters being voted on,
regulations, trends in proxy voting and information on corporate governance
issues.
If the vote cast either by the analyst or as a result of the
deliberations of the Proxy Voting Committee runs contrary to the recommendation
of the Board of Directors of the issuer, the matter will be referred to legal
counsel to determine whether an amendment to the most recently filed Schedule
13D is appropriate.
II. SOCIAL ISSUES AND OTHER CLIENT GUIDELINES
If a client has provided special instructions relating to the voting of
proxies, they should be noted in the client's account file and forwarded to the
proxy department. This is the responsibility of the investment professional or
sales assistant for the client. In accordance with Department of Labor
guidelines, the Advisers' policy is to vote on behalf of ERISA accounts in the
best interest of the plan participants with regard to social issues that carry
an economic impact. Where an account is not governed by ERISA, the Advisers will
vote shares held on behalf of the client in a manner consistent with any
individual investment/voting guidelines provided by the client. Otherwise the
Advisers will abstain with respect to those shares.
III. CLIENT RETENTION OF VOTING RIGHTS
If a client chooses to retain the right to vote proxies or if there is
any change in voting authority, the following should be notified by the
investment professional or sales assistant for the client.
- Operations
- Legal Department
- Proxy Department
- Investment professional assigned to the account
In the event that the Board of Directors (or a Committee thereof) of
one or more of the investment companies managed by one of the Advisers has
retained direct voting control over any security, the Proxy Voting Department
will provide each Board Member (or Committee member) with a copy of the proxy
statement together with any other relevant information including recommendations
of ISS or other third-party services.
IV. VOTING RECORDS
The Proxy Voting Department will retain a record of matters voted upon
by the Advisers for their clients. The Advisers' staff may request proxy-voting
records for use in presentations to current or prospective clients. Requests for
proxy voting records should be made at least ten days prior to client meetings.
If a client wishes to receive a proxy voting record on a quarterly,
semi-annual or annual basis, please notify the Proxy Voting Department. The
reports will be available for mailing approximately ten days after the quarter
end of the period. First quarter reports may be delayed since the end of the
quarter falls during the height of the proxy season.
A letter is sent to the custodians for all clients for which the
Advisers have voting responsibility instructing them to forward all proxy
materials to:
[Adviser name]
Attn: Proxy Voting Department
One Corporate Center
Rye, New York 10580-1433
The sales assistant sends the letters to the custodians along with the
trading/DTC instructions. Proxy voting records will be retained in compliance
with Rule 204-2 under the Investment Advisers Act.
V. VOTING PROCEDURES
1. Custodian banks, outside brokerage firms and Wexford Clearing Services
Corporation are responsible for forwarding proxies directly to GAMCO.
Proxies are received in one of two forms:
o Shareholder Vote Authorization Forms (VAFs) - Issued by ADP. VAFs must be
voted through the issuing institution causing a time lag. ADP is an outside
service contracted by the various institutions to issue proxy materials.
o Proxy cards which may be voted directly.
2. Upon receipt of the proxy, the number of shares each form represents is
logged into the proxy system according to security.
3. In the case of a discrepancy such as an incorrect number of shares, an
improperly signed or dated card, wrong class of security, etc., the issuing
custodian is notified by phone. A corrected proxy is requested. Any arrangements
are made to insure that a proper proxy is received in time to be voted
(overnight delivery, fax, etc.). When securities are out on loan on record date,
the custodian is requested to supply written verification.
4. Upon receipt of instructions from the proxy committee (see Administrative),
the votes are cast and recorded for each account on an individual basis.
Since January 1, 1992, records have been maintained on the Proxy Edge system.
The system is backed up regularly. From 1990 through 1991, records were
maintained on the PROXY VOTER system and in hardcopy format. Prior to 1990,
records were maintained on diskette and in hardcopy format.
PROXY EDGE records include:
Security Name and Cusip Number
Date and Type of Meeting (Annual, Special, Contest)
Client Name
Adviser or Fund Account Number
Directors' Recommendation
How GAMCO voted for the client on each issue
The rationale for the vote when it appropriate
Records prior to the institution of the PROXY EDGE system include:
Security name
Type of Meeting (Annual, Special, Contest)
Date of Meeting
Name of Custodian
Name of Client
Custodian Account Number
Adviser or Fund Account Number
Directors' recommendation
How the Adviser voted for the client on each issue
Date the proxy statement was received and by whom
Name of person posting the vote
Date and method by which the vote was cast
o From these records individual client proxy voting records are compiled. It
is our policy to provide institutional clients with a proxy voting record
during client reviews. In addition, we will supply a proxy voting record at
the request of the client on a quarterly, semi-annual or annual basis.
5. VAFs are kept alphabetically by security. Records for the current proxy
season are located in the Proxy Voting Department office. In preparation for the
upcoming season, files are transferred to an offsite storage facility during
January/February.
6. Shareholder Vote Authorization Forms issued by ADP are always sent directly
to a specific individual at ADP.
7. If a proxy card or VAF is received too late to be voted in the conventional
matter, every attempt is made to vote on one of the following manners:
o VAFs can be faxed to ADP up until the time of the meeting. This is followed
up by mailing the original form.
o When a solicitor has been retained, the solicitor is called. At the
solicitor's direction, the proxy is faxed.
8. In the case of a proxy contest, records are maintained for each opposing
entity.
9. Voting in Person
a) At times it may be necessary to vote the shares in person. In this case, a
"legal proxy" is obtained in the following manner:
o Banks and brokerage firms using the services at ADP:
The back of the VAF is stamped indicating that we wish to vote in person.
The forms are then sent overnight to ADP. ADP issues individual legal proxies
and sends them back via overnight (or the Adviser can pay messenger charges). A
lead-time of at least two weeks prior to the meeting is needed to do this.
Alternatively, the procedures detailed below for banks not using ADP may be
implemented.
o Banks and brokerage firms issuing proxies directly:
The bank is called and/or faxed and a legal proxy is requested.
All legal proxies should appoint:
"REPRESENTATIVE OF [ADVISER NAME] WITH FULL POWER OF SUBSTITUTION."
b) The legal proxies are given to the person attending the meeting along with
the following supplemental material:
o A limited Power of Attorney appointing the attendee an Adviser
representative.
o A list of all shares being voted by custodian only. Client names and
account numbers are not included. This list must be presented, along with
the proxies, to the Inspectors of Elections and/or tabulator at least
one-half hour prior to the scheduled start of the meeting. The tabulator
must "qualify" the votes (i.e. determine if the vote have previously been
cast, if the votes have been rescinded, etc. vote have previously been
cast, etc.).
o A sample ERISA and Individual contract.
o A sample of the annual authorization to vote proxies form.
o A copy of our most recent Schedule 13D filing (if applicable).
APPENDIX A
PROXY GUIDELINES
PROXY VOTING GUIDELINES
GENERAL POLICY STATEMENT
It is the policy of GAMCO INVESTORS, INC. to vote in the best economic interests
of our clients. As we state in our Magna Carta of Shareholders Rights,
established in May 1988, we are neither FOR nor AGAINST management. We are for
shareholders.
At our first proxy committee meeting in 1989, it was decided that each proxy
statement should be evaluated on its own merits within the framework first
established by our Magna Carta of Shareholders Rights. The attached guidelines
serve to enhance that broad framework.
We do not consider any issue routine. We take into consideration all of our
research on the company, its directors, and their short and long-term goals for
the company. In cases where issues that we generally do not approve of are
combined with other issues, the negative aspects of the issues will be factored
into the evaluation of the overall proposals but will not necessitate a vote in
opposition to the overall proposals.
BOARD OF DIRECTORS
The advisers do not consider the election of the Board of Directors a routine
issue. Each slate of directors is evaluated on a case-by-case basis.
Factors taken into consideration include:
o Historical responsiveness to shareholders
This may include such areas as:
-Paying greenmail
-Failure to adopt shareholder resolutions receiving a majority of
shareholder votes
o Qualifications
o Nominating committee in place
o Number of outside directors on the board
o Attendance at meetings
o Overall performance
SELECTION OF AUDITORS
In general, we support the Board of Directors' recommendation for audit.
BLANK CHECK PREFERRED STOCK
We oppose the issuance of blank check preferred stock.
Blank check preferred stock allows the company to issue stock and establish
dividends, voting rights, etc. without further shareholder approval.
CLASSIFIED BOARD
A classified board is one where the directors are divided into classes with
overlapping terms. A different class is elected at each annual meeting.
While a classified board promotes continuity of directors facilitating long
range planning, we feel directors should be accountable to shareholders on an
annual basis. We will look at this proposal on a case-by-case basis taking into
consideration the board's historical responsiveness to the rights of
shareholders.
Where a classified board is in place we will generally not support attempts to
change to an annually elected board.
When an annually elected board is in place, we generally will not support
attempts to classify the board.
INCREASE AUTHORIZED COMMON STOCK
The request to increase the amount of outstanding shares is considered on a
case-by-case basis.
Factors taken into consideration include:
o Future use of additional shares
-Stock split
-Stock option or other executive compensation plan
-Finance growth of company/strengthen balance sheet
-Aid in restructuring
-Improve credit rating
-Implement a poison pill or other takeover defense
o Amount of stock currently authorized but not yet issued or reserved for
stock option plans
o Amount of additional stock to be authorized and its dilutive effect
We will support this proposal if a detailed and verifiable plan for the use of
the additional shares is contained in the proxy statement.
CONFIDENTIAL BALLOT
We support the idea that a shareholder's identity and vote should be treated
with confidentiality.
However, we look at this issue on a case-by-case basis.
In order to promote confidentiality in the voting process, we endorse the use of
independent Inspectors of Election.
CUMULATIVE VOTING
In general, we support cumulative voting.
Cumulative voting is a process by which a shareholder may multiply the number of
directors being elected by the number of shares held on record date and cast the
total number for one candidate or allocate the voting among two or more
candidates.
Where cumulative voting is in place, we will vote against any proposal to
rescind this shareholder right.
Cumulative voting may result in a minority block of stock gaining representation
on the board. When a proposal is made to institute cumulative voting, the
proposal will be reviewed on a case-by-case basis. While we feel that each board
member should represent all shareholders, cumulative voting provides minority
shareholders an opportunity to have their views represented.
DIRECTOR LIABILITY AND INDEMNIFICATION
We support efforts to attract the best possible directors by limiting the
liability and increasing the indemnification of directors, except in the case of
insider dealing.
EQUAL ACCESS TO THE PROXY
The SEC's rules provide for shareholder resolutions. However, the resolutions
are limited in scope and there is a 500 word limit on proponents' written
arguments. Management has no such limitations. While we support equal access to
the proxy, we would look at such variables as length of time required to
respond, percentage of ownership, etc.
FAIR PRICE PROVISIONS
Charter provisions requiring a bidder to pay all shareholders a fair price are
intended to prevent two-tier tender offers that may be abusive. Typically, these
provisions do not apply to board-approved transactions.
We support fair price provisions because we feel all shareholders should be
entitled to receive the same benefits.
Reviewed on a case-by-case basis.
GOLDEN PARACHUTES
Golden parachutes are severance payments to top executives who are terminated or
demoted after a takeover.
We support any proposal that would assure management of its own welfare so that
they may continue to make decisions in the best interest of the company and
shareholders even if the decision results in them losing their job. We do not,
however, support excessive golden parachutes. Therefore, each proposal will be
decided on a case-by-case basis.
NOTE: CONGRESS HAS IMPOSED A TAX ON ANY PARACHUTE THAT IS MORE THAN THREE TIMES
THE EXECUTIVE'S AVERAGE ANNUAL COMPENSATION.
ANTI-GREENMAIL PROPOSALS
We do not support greenmail. An offer extended to one shareholder should be
extended to all shareholders equally across the board.
LIMIT SHAREHOLDERS' RIGHTS TO CALL SPECIAL MEETINGS
We support the right of shareholders to call a special meeting.
CONSIDERATION OF NONFINANCIAL EFFECTS OF A MERGER
This proposal releases the directors from only looking at the financial effects
of a merger and allows them the opportunity to consider the merger's effects on
employees, the community, and consumers.
As a fiduciary, we are obligated to vote in the best economic interests of our
clients. In general, this proposal does not allow us to do that. Therefore, we
generally cannot support this proposal.
Reviewed on a case-by-case basis.
MERGERS, BUYOUTS, SPIN-OFFS, RESTRUCTURINGS
Each of the above is considered on a case-by-case basis. According to the
Department of Labor, we are not required to vote for a proposal simply because
the offering price is at a premium to the current market price. We may take into
consideration the long term interests of the shareholders.
MILITARY ISSUES
Shareholder proposals regarding military production must be evaluated on a
purely economic set of criteria for our ERISA clients. As such, decisions will
be made on a case-by-case basis.
In voting on this proposal for our non-ERISA clients, we will vote according to
the client's direction when applicable. Where no direction has been given, we
will vote in the best economic interests of our clients. It is not our duty to
impose our social judgment on others.
NORTHERN IRELAND
Shareholder proposals requesting the signing of the MacBride principles for the
purpose of countering the discrimination of Catholics in hiring practices must
be evaluated on a purely economic set of criteria for our ERISA clients. As
such, decisions will be made on a case-by-case basis.
In voting on this proposal for our non-ERISA clients, we will vote according to
client direction when applicable. Where no direction has been given, we will
vote in the best economic interests of our clients. It is not our duty to impose
our social judgment on others.
OPT OUT OF STATE ANTI-TAKEOVER LAW
This shareholder proposal requests that a company opt out of the coverage of the
state's takeover statutes. Example: Delaware law requires that a buyer must
acquire at least 85% of the company's stock before the buyer can exercise
control unless the board approves.
We consider this on a case-by-case basis. Our decision will be based on the
following:
o State of Incorporation
o Management history of responsiveness to shareholders
o Other mitigating factors
POISON PILL
In general, we do not endorse poison pills.
In certain cases where management has a history of being responsive to the needs
of shareholders and the stock is very liquid, we will reconsider this position.
REINCORPORATION
Generally, we support reincorporation for well-defined business reasons. We
oppose reincorporation if proposed solely for the purpose of reincorporating in
a state with more stringent anti-takeover statutes that may negatively impact
the value of the stock.
STOCK OPTION PLANS
Stock option plans are an excellent way to attract, hold and motivate directors
and employees. However, each stock option plan must be evaluated on its own
merits, taking into consideration the following:
o Dilution of voting power or earnings per share by more than 10%
o Kind of stock to be awarded, to whom, when and how much
o Method of payment
o Amount of stock already authorized but not yet issued under existing stock
option plans
SUPERMAJORITY VOTE REQUIREMENTS
Supermajority vote requirements in a company's charter or bylaws require a level
of voting approval in excess of a simple majority of the outstanding shares. In
general, we oppose supermajority-voting requirements. Supermajority requirements
often exceed the average level of shareholder participation. We support
proposals' approvals by a simple majority of the shares voting.
LIMIT SHAREHOLDERS RIGHT TO ACT BY WRITTEN CONSENT
Written consent allows shareholders to initiate and carry on a shareholder
action without having to wait until the next annual meeting or to call a special
meeting. It permits action to be taken by the written consent of the same
percentage of the shares that would be required to effect proposed action at a
shareholder meeting.
Reviewed on a case-by-case basis.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
PORTFOLIO MANAGER
-----------------
Mr. Mario J. Gabelli, CFA, is primarily responsible for the day-to-day
management of The Gabelli Global Utility & Income Trust, (the Fund). Mr. Gabelli
has served as Chairman, Chief Executive Officer, and Chief Investment Officer
-Value Portfolios of GAMCO Investors, Inc. and its affiliates since their
organization.
MANAGEMENT OF OTHER ACCOUNTS
----------------------------
The table below shows the number of other accounts managed by Mario J. Gabelli
and the total assets in each of the following categories: registered investment
companies, other paid investment vehicles and other accounts. For each category,
the table also shows the number of accounts and the total assets in the accounts
with respect to which the advisory fee is based on account performance.
------------------------- ------------------- ------------------- -------------- ----------------- ----------------
Total Assets
No. of Accounts in Accounts
Name of Portfolio Total where Advisory where Advisory
Manager or Type of No. of Accounts Total Fee is Based on Fee is Based
Team Member Accounts Managed Assets Performance on Performance
----------- --------- ------- ------- ----------- --------------
------------------------- ------------------- ------------------- -------------- ----------------- ----------------
1. Mario J. Gabelli Registered 21 $13.9B 6 $5.4B
Investment
Companies:
------------------------- ------------------- ------------------- -------------- ----------------- ----------------
Other Pooled 17 $714.9M 16 $624.3M
Investment
Vehicles:
------------------------- ------------------- ------------------- -------------- ----------------- ----------------
Other Accounts: 1818 $11.0B 6 $1.5B
------------------------- ------------------- ------------------- -------------- ----------------- ----------------
POTENTIAL CONFLICTS OF INTEREST
-------------------------------
As reflected above, Mr. Gabelli manages accounts in addition to the Fund. Actual
or apparent conflicts of interest may arise when a Portfolio Manager also has
day-to-day management responsibilities with respect to one or more other
accounts. These potential conflicts include:
ALLOCATION OF LIMITED TIME AND ATTENTION. As indicated above, Mr. Gabelli
manages multiple accounts. As a result, he will not be able to devote all of his
time to management of the Fund. Mr. Gabelli, therefore, may not be able to
formulate as complete a strategy or identify equally attractive investment
opportunities for each of those accounts as might be the case if he were to
devote all of his attention to the management of only the Fund.
ALLOCATION OF LIMITED INVESTMENT OPPORTUNITIES. As indicated above, Mr. Gabelli
manages managed accounts with investment strategies and/or policies that are
similar to the Fund. In these cases, if the he identifies an investment
opportunity that may be suitable for multiple accounts, a Fund may not be able
to take full advantage of that opportunity because the opportunity may be
allocated among all or many of these accounts or other accounts managed
primarily by other Portfolio Managers of the Adviser, and their affiliates. In
addition, in the event Mr. Gabelli determines to purchase a security for more
than one account in an aggregate amount that may influence the market price of
the security, accounts that purchased or sold the security first may receive a
more favorable price than accounts that made subsequent transactions.
SELECTION OF BROKER/DEALERS. Because of Mr. Gabelli's position with the
Distributor and his indirect majority ownership interest in the Distributor, he
may have an incentive to use the Distributor to execute portfolio transactions
for a Fund.
PURSUIT OF DIFFERING STRATEGIES. At times, Mr. Gabelli may determine that an
investment opportunity may be appropriate for only some of the accounts for
which he exercises investment responsibility, or may decide that certain of the
funds or accounts should take differing positions with respect to a particular
security. In these cases, he may execute differing or opposite transactions for
one or more accounts which may affect the market price of the security or the
execution of the transaction, or both, to the detriment of one or more other
accounts.
VARIATION IN COMPENSATION. A conflict of interest may arise where the financial
or other benefits available to Mr. Gabelli differ among the accounts that he
manages. If the structure of the Adviser's management fee or the Portfolio
Manager's compensation differs among accounts (such as where certain accounts
pay higher management fees or performance-based management fees), the Portfolio
Manager may be motivated to favor certain accounts over others. The Portfolio
Manager also may be motivated to favor accounts in which he has an investment
interest, or in which the Adviser, or their affiliates have investment
interests. Similarly, the desire to maintain assets under management or to
enhance a Portfolio Manager's performance record or to derive other rewards,
financial or otherwise, could influence the Portfolio Manager in affording
preferential treatment to those accounts that could most significantly benefit
the Portfolio Manager. For example, as reflected above, if Mr. Gabelli manages
accounts which have performance fee arrangements, certain portions of his
compensation will depend on the achievement of performance milestones on those
accounts. Mr. Gabelli could be incented to afford preferential treatment to
those accounts and thereby by subject to a potential conflict of interest.
The Adviser, and the Funds have adopted compliance policies and procedures that
are designed to address the various conflicts of interest that may arise for the
Adviser and their staff members. However, there is no guarantee that such
policies and procedures will be able to detect and prevent every situation in
which an actual or potential conflict may arise.
COMPENSATION STRUCTURE FOR MARIO J. GABELLI
-------------------------------------------
Mr. Gabelli receives incentive-based variable compensation based on a percentage
of net revenues received by the Adviser for managing the Fund. Net revenues are
determined by deducting from gross investment management fees the firm's
expenses (other than Mr. Gabelli's compensation) allocable to this Fund. Five
closed-end registered investment companies managed by Mr. Gabelli have
arrangements whereby the Adviser will only receive its investment advisory fee
attributable to the liquidation value of outstanding preferred stock (and Mr.
Gabelli would only receive his percentage of such advisory fee) if certain
performance levels are met. Additionally, he receives similar incentive based
variable compensation for managing other accounts within the firm and its
affiliates. This method of compensation is based on the premise that superior
long-term performance in managing a portfolio should be rewarded with higher
compensation as a result of growth of assets through appreciation and net
investment activity. The level of compensation is not determined with specific
reference to the performance of any account against any specific benchmark. One
of the other registered investment companies managed by Mr. Gabelli has a
performance (fulcrum) fee arrangement for which his compensation is adjusted up
or down based on the performance of the investment company relative to an index.
Mr. Gabelli manages other accounts with performance fees. Compensation for
managing these accounts has two components. One component is based on a
percentage of net revenues to the investment adviser for managing the account.
The second component is based on absolute performance of the account, with
respect to which a percentage of such performance fee is paid to Mr. Gabelli. As
an executive officer of the Adviser's parent company, GBL, Mr. Gabelli also
receives ten percent of the net operating profits of the parent company. He
receives no base salary, no annual bonus, and no stock options.
OWNERSHIP OF SHARES IN THE FUND
-------------------------------
Mario Gabelli owned $100,001-$500,000 of shares of the Fund as of December 31,
2006.
(B) Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
=============================================================================================================================
(C) TOTAL NUMBER OF (D) MAXIMUM NUMBER (OR
SHARES (OR UNITS) APPROXIMATE DOLLAR VALUE) OF
(A) TOTAL NUMBER OF PURCHASED AS PART OF SHARES (OR UNITS) THAT MAY 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 - 3,050,236
07/01/06
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
07/31/06
=============================================================================================================================
Month #2 Common - N/A Common - N/A Common - N/A Common - 3,050,236
08/01/06
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
08/31/06
=============================================================================================================================
Month #3 Common - N/A Common - N/A Common - N/A Common - 3,050,236
09/01/06
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
09/30/06
=============================================================================================================================
Month #4 Common - N/A Common - N/A Common - N/A Common - 3,050,236
10/01/06
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
10/31/06
=============================================================================================================================
Month #5 Common - N/A Common - N/A Common - N/A Common - 3,050,236
11/01/06
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
11/30/06
=============================================================================================================================
Month #6 Common - N/A Common - N/A Common - N/A Common - 3,050,236
12/01/06
through Preferred - N/A Preferred - N/A Preferred - N/A Preferred - N/A
12/31/06
=============================================================================================================================
Total Common - N/A Common - N/A Common - N/A N/A
Preferred - N/A Preferred - N/A Preferred - 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) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Gabelli Global Utility & Income Trust
-------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 03/01/2007
----------------------------------------------------------------------------
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 03/01/2007
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady, Principal Financial Officer and
Treasurer
Date 03/01/2007
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* Print the name and title of each signing officer under his or her signature.