THE GABELLI
UTILITY TRUST
SEMI-ANNUAL Report
JUNE 30, 2000
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Our cover icon represents the underpinnings of Gabelli. The Teton
mountains in Wyoming represent what we believe in in America -- that
creativity, ingenuity, hard work and a global uniqueness provide
enduring values. They also stand out in an increasingly complex,
interconnected and interdependent economic world.
INVESTMENT OBJECTIVE:
The Gabelli Utility Trust is a closed-end, non-diversified management investment
company whose primary objectives are long-term growth of capital and income. The
Fund will invest in companies that provide products, services or equipment for
the generation or distribution of electricity, gas and water. Additionally, the
Fund will invest in companies in telecommunications services or infrastructure
operations.
THIS REPORT IS PRINTED ON RECYCLED PAPER.
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[Photo of Mario J. Gabelli omitted]
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TO OUR SHAREHOLDERS,
The second quarter of 2000 was mixed, but generally favorable, for
electric and gas utility investors. Interest rates at the short end of the yield
curve continued to rise, as the Federal Reserve raised rates by another fifty
basis points, bringing the total increase in the current round of tightening to
175 basis points. Interest rates at the long end of the yield curve climbed back
above 6% in the second quarter after falling noticeably in the first quarter.
U.S. electric and gas utility stocks rose in nominal terms and easily
outperformed the broader equity market. Water stocks were generally flat to down
in price, while telecom stocks came under severe pressure.
The outlook for utility stock performance this year continues to look
fairly positive, although the best gains, particularly in the electric and gas
stocks, may be behind us. The now-inverted Treasury yield curve indicates that
interest rates are probably near the peak for this cycle, and falling long rates
should result in utility price appreciation. The unsettled equity market
conditions seen in the second quarter may lead investors to appreciate the high
yields and relatively stable prices of utility stocks. Looking beyond the
immediate future, electric, gas and water stocks are likely to benefit from
continuing domestic consolidation and increasing foreign interest in the U.S.
market. In June, NS Power, the privatized electric company serving Nova Scotia,
agreed to acquire Bangor Hydroelectric Co. at a substantial premium. Also, in
July AES Corp. agreed to acquire IPALCO, another portfolio holding, for a price
exceeding three times book value and eight times EBITDA (Earnings Before
Interest, Taxation, Depreciation and Amortization). In addition, National Grid
plc and PowerGen plc, both of the U.K., have publicly stated that they each
intend to acquire another U.S. electric utility company, with National Grid
likely to make its move this year.
Foreign telecommunications giants with premium multiples are eyeing the
U.S. market hungrily. With foreign telecommunications buyers having the size,
the valuations and the interest to buy in North America, deal activity is likely
to increase, with American companies more likely sellers than buyers at current
depressed valuations.
INVESTMENT PERFORMANCE
For the second quarter ended June 30, 2000, The Gabelli Utility Trust's
(the "Trust") net asset value ("NAV") total return was 1.54%. The Standard &
Poor's ("S&P") Utility Index had a total return of 6.70% while the Lipper
Utility Fund Average declined 5.20% over the same period. The S&P Utility Index
is an unmanaged indicator of electric and gas utility stock performance, while
the Lipper Average reflects the average performance of mutual funds classified
in this particular category. Since inception on July 9, 1999 through June 30,
2000, the Trust had a cumulative total return of 7.90%, including adjustments of
$0.45 per share in distributions. The S&P Utility Index declined 3.87%, while
the Lipper Utility Fund Average rose 12.62% over the same period.
The Utility Trust's common shares ended the second quarter at $7.9375 per
share on the New York Stock Exchange, a total return of 6.99% for the second
quarter. The Utility Trust's common shares rose 5.29% since inception on July 9,
1999 through June 30, 2000 after adjusting for all distributions.
OUR APPROACH
There are over 80 publicly traded investor-owned electric utilities in the
U.S., and this is at least 50 more than are needed. We think that over the next
few years the industry will consolidate into a much smaller number of larger,
more efficient operators. The balkanized structure of the industry today is
inherently inefficient, and competitive forces are punishing inefficiency. The
industry has consolidated substantially already, and would have done so even
faster except for regulatory sclerosis impeding the pace of mergers and
acquisitions. We are skeptical about the claims of the mega-utilities to be able
to deliver superior returns, but we believe that the small-cap and mid-cap
utilities are generally doing well on their own and over time are likely
acquisition targets as the largest utilities seek increasing advantages of
scale. Our investments in the electric and natural gas stocks have generally
focused on fundamentally sound, reasonably priced small-cap and mid-cap
utilities that are logical acquisition targets for large utilities seeking to
bulk up.
WHAT WE DO
The success of momentum investing in recent years and investor's desire
for instant gratification have combined to make value investing appear dull. At
the risk of being dull, we will describe the boring value approach that has seen
us through both good and bad for over 23 years at Gabelli Asset Management. The
accompanying graphic illustrates the interplay among the four components of our
valuation approach.
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Pyramid text as follows:
EPS
PMV
MANAGEMENT
CASH FLOW
RESEARCH
Our focus is on free cash flow: earnings before interest, taxes,
depreciation and amortization ("EBITDA"), minus the capital expenditures
necessary to grow the business. We believe free cash flow is the best barometer
of a business' value. Rising free cash flow often foreshadows net earnings
improvement. We also look at earnings per share trends. Unlike Wall Street's
ubiquitous earnings momentum players, we do not try to forecast earnings with
accounting precision and then trade stocks based on quarterly expectations and
realities. We simply try to position ourselves in front of long term earnings
uptrends. In addition, we analyze on and off balance sheet assets and
liabilities such as plant and equipment, inventories, receivables, and legal,
environmental and health care issues. We want to know everything and anything
that will add to, or detract from, our private market value ("PMV") estimates.
Finally, we look for a catalyst: something happening in the company's industry
or indigenous to the company itself that will surface value. In the case of the
independent telephone stocks, the catalyst is a regulatory change. In the
utility industry, deregulation is transforming the sector, as consumers begin to
be offered a choice in service providers. In other instances, it may be a change
in management, sale or spin-off of a division or the development of a profitable
new business.
Once we identify stocks that qualify as fundamental and conceptual
bargains, we then become patient investors. This has been a proven long-term
method for preserving and enhancing wealth in the U.S. equity markets. At the
margin, our new investments are focused on businesses that are well-managed and
will benefit from sustainable long term economic dynamics. The competition
created from deregulation should continue to drive consolidation, as utilities
seek to lower their rates and cut costs. The benefits and savings from these
cost reductions and increased sales should enhance the potential investment
return of utility stocks.
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COMMENTARY
ECONOMIC OVERVIEW
The labor market remains tight and the threat of wage-driven inflation is
quite real. Despite six Federal Reserve interest rate hikes over the last
eighteen months, the economy is still growing at a pace that troubles the
monetary authorities. This is also an election year. While the campaign has been
a relatively quiet one, the rhetoric is sure to heat up as we approach November.
Political posturing on economic issues, principally how to re-allocate the
growing budget surplus, may rattle the financial markets. Finally, while there
are large pockets of attractive fundamental values in the equity markets, the
overall market, as measured by the S&P 500 Index, is still rather richly priced
relative to historic norms.
Of concern to us is the soaring trade deficit. Thus far, the world has
been happy to finance this deficit by buying U.S. stocks and bonds. This has
worked out well for all concerned. However, if we see inflation continue to
trend higher and if the U.S. financial markets sputter, international investors
may seek opportunities elsewhere. Reduced global demand for U.S. financial
assets may have a greater impact on stocks and bonds than the aforementioned
economic, political, and market issues. If international demand dries up, the
favorable supply/demand dynamics the U.S. financial markets have enjoyed over
the last decade may be disrupted. In addition, the Federal Reserve may have to
pump up interest rates even further, and at the wrong time, to defend the
dollar.
That is the dark side. The bright side is that we are finally seeing
evidence of economic deceleration. Housing starts and home sales are down
substantially, and with the exception of oil, commodity prices have stabilized.
The most recently released employment numbers were relatively benign and there
are indications that consumer confidence has been dented. For the time being,
the Federal Reserve has spared us an additional rate hike. We just may be
returning to a "Goldilocks" economy--not too hot, not too cool, but just
right--that will help propel stocks higher. We have labeled this rosy economic
scenario "Soft Landing Part II". Ideally, we will see a much broader market
advance in which companies in a wider range of industries participate.
LEGISLATION LOOMS AS SUPPLIES TIGHTEN
There have been sporadic shortages, brownouts and wholesale price spikes
for the past several years, and some utilities and customers caught short have
been stung. Conversely the companies that have invested in merchant generation
have generally reaped handsome rewards. The price volatility and economic impact
of supply disruptions has led to calls for federal legislation. Action is
unlikely this year, and control of the House and Senate are up for grabs, so it
is unclear what the prospects are for next year. It is clear, however, that the
current status quo is unstable. Some combination of new generation and
transmission capacity, distributed generation and conservation is clearly
necessary, and pressure is growing for a federal, rather than state-by-state
solution. The industry has generally favored regulation by the states over
federal regulation, and the prospect of a federal power grab is likely to spur
additional utility consolidation.
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Following substantial restructuring efforts by electric utility companies,
accompanied by regulatory actions and related legislation, the risk profile of
the electric power industry has been greatly reduced. Those utilities with low
generating costs did not need to be restructured, although some were, while the
high cost generators have largely done so. The biggest challenge facing most
electric companies continues to be how to redeploy capital and rising free cash
flow at attractive rates of return. This is harder than it sounds. Electric
utilities are using their excess capital to invest in telecommunications,
Internet auctions sites, electric and HVAC ("heating, ventilation and air
conditioning") contractors, and other ventures further afield. Many of these
ventures are doomed to fail in our opinion, and we tend to view the more
grandiose visions of certain utilities skeptically. Utilization of excess
capital to retire debt and buy back stock generates lower returns than
diversification, but with much lower risk. We tend to favor companies that
return excess capital to investors. Among the Trust's holdings in the electric
utility sector are a substantial number of companies that are consistent,
substantial buyers of their own stock, including DPL, IPALCO and NSTAR.
The gas distribution sector does not have compelling growth
characteristics. Gas distribution companies typically grow earnings in the very
low single digits. Pipeline companies are running into earnings pressure as
long-term contracts expire and are replaced with shorter-term deals. In
addition, near-term excess pipeline capacity is putting pressure on
transportation rates. This pressure should be manageable, but we are watching
developments carefully. Offsetting the pressure on earnings is the increasing
contribution to earnings from energy services and trading, and the benefit to
earnings from rising energy prices, since most pipelines have significant
investments in energy exploration and production. Gas stocks, particularly the
pipelines, were some of the better-performing stocks in the Trust's portfolio in
the first quarter and did even better in the second quarter. We added to our
natural gas holdings in the second quarter.
Water companies with few exceptions are doing well in a low risk, highly
capital-intensive business. Following the merger and acquisition frenzy of 1999,
the few remaining independent water stocks moved to price levels that
incorporated substantial acquisition premiums, and we have elected to wait for
prices to return to more normal levels before buying.
Telecommunications companies continue to generate very impressive earnings
growth in the face of mounting competitive pressures. The Trust has small
positions in U.S. incumbent local exchange carriers, also known as the local
telephone companies. These companies are generating EPS growth in the low teens,
trade at half the market multiple and have solid balance sheets and substantial
cash flows. So far these holdings have been a drag on the Trust's performance.
Investors are concerned that rising capital expenditures combined with
increasing competitive pressures will affect earnings growth. This is a
legitimate concern, but we believe that investors are underestimating the local
telecommunications companies' advantages of incumbency, ubiquity, liquidity and
scale. Public capital is not available to competitive local exchange companies
on any terms, and it remains to be seen how much longer private capital will be
willing to fund the capital expenditures and operating losses of the new
entrants.
The European telecommunications companies generally trade at substantial
premiums to the local market and to the U.S. peer group. This valuation
disparity is probably unsustainable, and the U.S. telecommunications companies
are likely to appreciate in absolute and relative terms to their European peers.
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LET'S TALK STOCKS
The following are stock specifics on selected holdings of our Trust.
Favorable earnings prospects do not necessarily translate into higher stock
prices, but they do express a positive trend which we believe will develop over
time.
CENTURYTEL INC. (CTL - $28.75 - NYSE), based in Monroe, Louisiana, is the eighth
largest local telephone company in the U.S., with over 1.2 million access lines
in the South and Midwest. CenturyTel also has over 700,000 cellular customers.
Through acquisitions, CTL has created clusters of rural telephone and cellular
companies within commuting distance of metropolitan areas in states including
Wisconsin, Michigan, Ohio, Louisiana and Arkansas. With the $2.2 billion
acquisition of Portland-based Pacific Telecom, CTL has added seven states, ten
cellular markets and 640,000 access lines to its customer base. The acquired
operations have nearly doubled Century's revenues.The company recently announced
that it is acquiring about 460,000 access lines in three states for $1.5
billion. CTL continues to build value through other ventures, primarily its long
distance and competitive local exchange carrier operations.
CITIZENS COMMUNICATIONS CO. (CZN - $17.25 - NYSE) will soon become the country's
largest independent local exchange carrier once it completes several
acquisitions of over two million access lines for $6.5 million. Upon completion
of these transactions, accompanied by divestitures of its utilities operations,
CZN will reposition itself as a pure telecommunications company. CZN also owns
81% of a competitive carrier Electric Lightwave (ELIX - $18.6875 - Nasdaq) with
fiber optic networks covering the Western part of the U.S.
DPL INC. (DPL - $21.9375 - NYSE) provides electric service to metropolitan
Dayton, Ohio. In the past six months DPL sold its gas distribution operations to
Vectren Corp., sold a significant equity stake to KKR, and repurchased 25
million shares of stock in a self-tender. We sold most of the Trust's shares to
the company in the tender in the first quarter at $23, and when the stock sold
off below $20 after the tender offer closed, we bought back in. The stock is
cheap based on current and prospective earnings, and has substantial unrealized
gains in its sizeable investment portfolio. We think that KKR's involvement in
the company may ultimately lead to a merger or leveraged buyout of DPL.
EASTERN ENTERPRISES (EFU - $63.00 - NYSE) owns and operates Boston Gas Company,
Colonial Gas Company, Essex Gas Company, Midland Enterprises, and ServicEdge
Partners. Shareholders of EnergyNorth (EI - $59.25 - NYSE) have approved a
proposed merger agreement with Eastern. Eastern will then serve over 800,000
residential, commercial and industrial natural gas customers in Massachusetts
and New Hampshire. Midland Enterprises, headquartered in Cincinnati, Ohio, is
the leading carrier of coal and a major carrier of other dry bulk cargoes on the
nation's inland waterways, with a fleet of 2,300 barges and 87 towboats.
ServicEdge is the largest unregulated provider of residential heating,
ventilation and air conditioning ("HVAC") equipment installation and service to
customers in Massachusetts. In November, Eastern announced it had entered into
an agreement to be acquired by KeySpan Corp. (KSE - $30.75 - NYSE) for $64.00
per share in cash.
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EL PASO ELECTRIC CO. (EE - $11.1875 - AMEX) is a public utility engaged in the
generation, transmission and distribution of electricity in an area of
approximately 10,000 square miles in west Texas and southern New Mexico. The
company also serves wholesale customers in Texas, New Mexico, California and
Mexico. EE owns, or has significant ownership interests in, four major 345 kV
transmission lines and three 500 kV lines to provide power from Palo Verde, and
owns the distribution network within its retail service territory. The company's
energy sources consist of nuclear fuel, natural gas, coal and purchased power.
LG&E ENERGY CORP. (LGE - $23.875 - NYSE) serves most of the state of Kentucky.
The company's core business is efficient and well managed, and LG&E enjoys some
of the lowest generating costs in the U.S. The stock had fallen out of investor
favor because of continuing losses in LG&E's wholesale power business, which the
company had failed to resolve. During the first quarter, LG&E agreed to be
acquired by PowerGen plc of the U.K. for approximately $24 per share in cash.
The acquisition of LG&E marks the third purchase of a U.S. utility by a British
utility in the past year. We think that there will be more activity by European
strategic buyers in the U.S.
MCN ENERGY GROUP INC. (MCN - $21.375 - NYSE) is a major natural gas distributor
serving southeastern Michigan. MCN agreed to sell out to DTE Energy (DTE -
$30.5625 - NYSE), the parent of Detroit Edison, late in 1999. We like DTE
because it is statistically cheap and has substantial hidden assets, primarily
its 32% stake in Plug Power (PLUG - $62.50 - Nasdaq), a major fuel cell
manufacturer. MCN was trading at a discount to the merger value of 20% when we
bought the stock. Because the closing has been delayed by regulatory concerns,
the discount is still very substantial. We believe that the regulatory concerns
are manageable and that the deal is likely to close on the original terms.
NSTAR (NST - $40.6875 - NYSE) is the parent company of Boston Edison and
Commonwealth Energy, which Edison acquired last year. The acquisition increased
the company's size by about 50%, and was accorded unusually generous regulatory
treatment by Massachusetts. As a result of the excellent geographic fit of the
two companies, there is unusually good scope to cut costs and enhance
efficiencies, and a substantial portion of these savings will be retained by
shareholders. The company also has substantial telecommunications assets that
are not reflected in the share price. The stock has lagged so far this year due
to concerns about NSTAR's exposure to wholesale power price spikes during the
summer peak season. These concerns are conceptually correct but exaggerated in
our opinion. At less than eleven times earnings, which are growing at nearly 10%
per year, the stock is cheap. Down the road NSTAR is a logical acquisition
candidate, but is unlikely to sell out anytime soon.
UNITED WATER RESOURCES INC. (UWR - $34.875 - NYSE) will sell the two-thirds of
the company that Suez Lyonnaise des Eaux SA (LY.P - $183.50 - Paris Stock
Exchange) does not already own to LY for $1.8 billion in cash and assumed debt.
LY offered $35 per share in cash and will assume $800 million in debt and
preferred stock of UWR, the number two U.S. water company. LY also bought Nalco
Chemical Co., the largest U.S. manufacturer of water-treatment chemicals. LY's
acquisitions in the U.S. water market are part of its effort to keep pace with
its French rival, Vivendi, which has also been making advances in the U.S. water
market. UWR provides water and sewer treatment services to 7.5 million people in
19 states. Upon completion of the UWR acquisition, LY will have worldwide water
and wastewater revenues of more than $7.4 billion.
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VASTAR RESOURCES INC. (VRI - $82.125 - NYSE) is an independent oil and gas
(non-integrated) exploration and production company. VRI's exploration and
production operations are concentrated in four premier producing regions of the
United States: the Gulf of Mexico, Gulf Coast, San Juan Basin and Mid-Continent.
The company markets most of its natural gas nationwide through Southern Company
Energy Marketing LP, a limited partnership in which it currently owns a 40%
interest. Vastar directly markets its crude oil and natural gas liquids
nationwide. Proven reserves were approximately 4,074 Bcfe (billion cubic feet
equivalent) as of December 31, 1999. Of this amount, approximately 65% are gas
reserves and 35% are liquids reserves.
SHAREHOLDER MEETING - MAY 15, 2000 - FINAL RESULTS
The Annual Meeting of Shareholders was held on May 15, 2000 at the
Greenwich Library in Greenwich, Connecticut. At that meeting, shareholders
elected James P. Conn, John D. Gabelli, Karl Otto Pohl and Anthony R. Pustorino
as Directors of the Utility Trust. A total of 9,844,624 votes, 9,820,173 votes,
9,803,419 votes and 9,820,630 votes were cast in favor of each Director and
56,256 votes, 80,707 votes, 97,460 votes and 80,249 votes were withheld for each
Director, respectively.
Mario J. Gabelli, Thomas E. Bratter, Felix J. Christiana, Anthony J.
Colavita, Vincent D. Enright, Frank J. Fahrenkopf, Jr., and Robert J. Morrissey
and Salvatore J. Zizza continue to serve in their capacities as Directors of the
Utility Trust.
Additionally, shareholders ratified the selection of PricewaterhouseCoopers LLP
as the independent accountants of the Utility Trust for the fiscal year ending
December 31, 2000. 9,848,120 votes were cast in favor of this proposal, 19,795
votes were cast against this proposal and 32,965 votes abstained.
We thank you for you participation and appreciate your continued support.
MONTHLY DISTRIBUTIONS
The Gabelli Utility Trust has set a $.05 per share monthly distribution
policy for the year 2000.
WWW.GABELLI.COM
Please visit us on the Internet. Our homepage at http://www.gabelli.com
contains information about Gabelli Asset Management Inc., the Gabelli Mutual
Funds, IRAs, 401(k)s, quarterly reports, closing prices and other current news.
You can send us e-mail at [email protected].
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IN CONCLUSION
The major factors depressing utility stock prices in 1999 were rising
long-term interest rates and investors' infatuation with technology stocks. With
long rates perhaps having peaked for this cycle and with technology stocks now
coming under some pressure, utility price performance is likely to continue to
improve in both absolute and relative terms.
Sincerely,
/S/ SIGNATURE
MARIO J. GABELLI, CFA
President and Chief Investment Officer
August 14, 2000
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TOP TEN HOLDINGS
JUNE 30, 2000
-------------
Eastern Enterprises LG&E Energy Corp.
United Water Resources Inc. El Paso Electric Co.
EnergyNorth Inc. CenturyTel Inc.
Columbia Energy Group Northeast Utilities
E'Town Corp. NSTAR
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NOTE: The views expressed in this report reflect those of the portfolio manager
only through the end of the period stated in this report. The manager's views
are subject to change at any time based on market and other conditions.
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THE GABELLI UTILITY TRUST
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 82.1%
AGRICULTURE -- 0.1%
6,000 Cadiz Inc.+ ............... $ 53,214 $ 48,000
----------- -----------
BUSINESS SERVICES -- 1.5%
22,000 Verio Inc.+ ............... 1,285,497 1,220,656
----------- -----------
COMMUNICATIONS EQUIPMENT -- 0.8%
30,000 Furukawa Electric
Co. Ltd. ................ 456,622 626,325
----------- -----------
ENERGY AND UTILITIES: ELECTRIC -- 18.5%
48,000 Bangor Hydro-Electric Co. . 777,719 1,125,000
5,000 Cleco Corp. ............... 153,250 167,500
35,000 CMP Group Inc. ............ 942,388 1,025,937
122,000 Conectiv Inc. ............. 2,187,319 1,898,625
39,521 DPL Inc. .................. 767,321 866,992
210,800 El Paso Electric Co.+ ..... 1,904,072 2,358,325
40,000 Florida Progress Corp. .... 1,861,054 1,875,000
22,000 FPL Group Inc. ............ 1,052,538 1,089,000
34,000 IPALCO Enterprises Inc. ... 697,838 684,250
51,000 Maine Public Service Co. .. 918,644 1,026,375
16,000 Niagara Mohawk
Holdings Inc. ........... 241,925 223,000
58,706 SCANA Corp. ............... 1,496,943 1,416,282
18,000 TECO Energy Inc. .......... 376,025 361,125
20,000 Unisource Energy Corp.+ ... 236,625 300,000
25,000 United Illuminating Co. ... 1,096,481 1,093,750
----------- -----------
14,710,142 15,511,161
----------- -----------
ENERGY AND UTILITIES: INTEGRATED -- 18.1%
28,000 CH Energy Group Inc. ...... 955,919 950,250
32,000 Cinergy Corp. ............. 883,099 814,000
50,000 Florida Public
Utilities Co. ........... 792,675 781,250
100,000 LG&E Energy Corp. ......... 2,297,908 2,387,500
10,000 Madison Gas &
Electric Co. ............ 206,875 197,500
85,000 MCN Energy Group Inc. ..... 2,043,562 1,816,875
13,000 Minnesota Power Inc. ...... 222,463 225,062
10,000 Montana Power Co. ......... 313,312 353,125
95,000 Northeast Utilities ....... 2,031,386 2,066,260
48,000 NSTAR ..................... 2,068,819 1,953,000
80,000 RGS Energy Group Inc. ..... 2,012,462 1,780,000
5,332 Vectren Corp. ............. 105,450 91,977
100,000 Western Resources Inc. .... 1,636,501 1,550,000
7,000 WPS Resources Corp. ....... 204,319 210,437
----------- -----------
15,774,750 15,177,236
----------- -----------
ENERGY AND UTILITIES: NATURAL GAS -- 25.3%
42,000 AGL Resources Inc. ........ 772,225 669,375
26,500 Berkshire Energy Resources 698,604 990,438
MARKET
SHARES COST VALUE
------ ---- ------
45,000 Columbia Energy Group ..... $ 2,842,844 $ 2,953,125
7,500 CTG Resources Inc. ........ 274,362 275,156
31,000 Delta Natural Gas Co. Inc. 519,099 472,750
20,000 Dynegy Inc., Cl. A ........ 623,938 1,366,250
60,985 Eastern Enterprises ....... 2,834,841 3,842,055
54,000 EnergyNorth Inc. .......... 2,488,983 3,199,500
17,000 Fall River Gas Co. ........ 351,644 374,000
2,000 National Fuel Gas Co. ..... 91,731 97,500
12,000 Nicor Inc. ................ 434,475 391,500
20,000 Peoples Energy Corp. ...... 704,031 647,500
28,000 Piedmont Natural
Gas Co. Inc. ............ 843,617 743,750
30,000 Providence Energy Corp. ... 921,406 1,215,000
25,000 SEMCO Energy Inc. ......... 393,000 325,000
104,000 Southwest Gas Corp. ....... 2,914,594 1,820,000
5,000 Southern Union Co.+ ....... 78,225 79,062
22,000 Valley Resources Inc. ..... 494,025 530,750
15,000 Vastar Resources Inc. ..... 1,225,312 1,231,875
----------- -----------
19,506,956 21,224,586
----------- -----------
ENERGY AND UTILITIES: WATER -- 11.8%
8,000 American States Water Co. . 266,713 238,000
11,000 Artesian Resources Corp.,
Cl. A ................... 257,250 253,000
23,000 Azurix Corp.+ ............. 296,900 161,000
21,000 Birmingham Utilities Inc. . 441,406 262,500
20,520 California Water
Service Group ........... 566,928 497,610
12,000 Connecticut Water
Service Inc. ............ 355,489 321,000
36,000 E'Town Corp. .............. 1,923,767 2,391,750
15,000 Middlesex Water Co. ....... 429,682 429,375
4,000 Pennichuck Corp. .......... 96,331 105,000
12,500 SJW Corp. ................. 1,320,360 1,485,938
4,000 Southwest Water Co. ....... 52,062 52,000
105,500 United Water
Resources Inc. .......... 3,498,316 3,679,313
----------- -----------
9,505,204 9,876,486
----------- -----------
SATELLITE -- 0.3%
2,500 General Motors Corp.,
Cl. H+ .................. 232,537 219,375
----------- -----------
TELECOMMUNICATIONS -- 4.9%
2,000 ALLTEL Corp. .............. 128,475 123,875
4,000 AT&T Canada Inc., Cl. B+ .. 121,540 132,750
75,000 CenturyTel Inc. ........... 2,810,448 2,156,250
80,000 Citizens
Communications Co. ...... 930,800 1,380,000
3,000 Global Crossing Ltd.+ ..... 87,625 78,938
1,000 Qwest Communications
International Inc.+ ..... 44,050 49,688
See accompanying notes to financial statements.
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THE GABELLI UTILITY TRUST
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
1,000 SBC Communications Inc. ... $ 42,675 $ 43,250
2,000 US West Inc. .............. 145,975 171,500
----------- -----------
4,311,588 4,136,251
----------- -----------
WIRELESS COMMUNICATIONS -- 0.8%
7,000 Telephone & Data
Systems Inc. ............ 695,163 701,750
----------- -----------
TOTAL COMMON
STOCKS .................. 66,531,673 68,741,826
----------- -----------
PREFERRED STOCKS -- 1.2%
TELECOMMUNICATIONS -- 1.2%
15,000 Citizens Communications Co.,
5.00% Cv. Pfd. .......... 746,741 1,010,625
----------- -----------
PRINCIPAL
AMOUNT
----------
U.S. GOVERNMENT OBLIGATIONS -- 16.6%
$13,983,000 U.S. Treasury Bill,
5.52%++, due 08/17/00 ... 13,884,785 13,884,785
----------- -----------
MARKET
COST VALUE
---- ------
TOTAL INVESTMENTS -- 99.9% ............. $81,163,199 $83,637,236
===========
OTHER ASSETS AND
LIABILITIES (NET) -- 0.1% ........................... 121,556
----------
NET ASSETS -- 100.0%
(10,973,832 shares outstanding) ..................... 83,758,792
----------
NET ASSET VALUE
($83,758,792 / 10,973,832 shares outstanding) ....... $7.63
=====
---------------------
For Federal tax purposes:
Aggregate cost ................................ $81,163,199
===========
Gross unrealized appreciation ................. $6,377,859
Gross unrealized depreciation ................. (3,903,822)
-----------
Net unrealized appreciation ................... $ 2,474,037
===========
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
See accompanying notes to financial statements.
10
<PAGE>
THE GABELLI UTILITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
ASSETS:
Investments, at value (Cost $81,163,199) ... $83,637,236
Cash ....................................... 885
Dividends and interest receivable .......... 219,874
-----------
TOTAL ASSETS ............................... 83,857,995
-----------
LIABILITIES:
Dividends payable .......................... 6,650
Payable for investment advisory fees ....... 69,443
Payable for custodian fees ................. 19,225
Other accrued expenses ..................... 3,885
-----------
TOTAL LIABILITIES .......................... 99,203
-----------
NET ASSETS applicable to 10,973,832
shares outstanding ...................... $83,758,792
===========
NET ASSETS CONSIST OF:
Trust shares, at par value ................. 10,974
Additional paid-in capital ................. 74,812,901
Accumulated net realized gain on investments 6,460,880
Net unrealized appreciation on investments . 2,474,037
-----------
TOTAL NET ASSETS ........................... $83,758,792
===========
NET ASSET VALUE
($83,758,792 / 10,973,832 shares
outstanding; unlimited number of shares
authorized of $0.001 par value) ......... $7.63
=====
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
INVESTMENT INCOME:
Dividends .................................. $1,139,755
Interest ................................... 432,218
----------
TOTAL INVESTMENT INCOME .................... 1,571,973
----------
EXPENSES:
Investment advisory fees ................... 413,407
Shareholder services fees .................. 97,213
Shareholder communications expenses ........ 66,314
Legal and audit fees ....................... 47,020
Trustees' fees ............................. 14,336
Custodian fees ............................. 13,065
Miscellaneous expenses ..................... 10,169
----------
TOTAL EXPENSES ............................. 661,524
----------
NET INVESTMENT INCOME ...................... 910,449
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments ........... 1,797,769
Net change in unrealized appreciation
on investments .......................... 714,567
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS .......................... 2,512,336
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ......................... $3,422,785
==========
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000 PERIOD ENDED
(UNAUDITED) DECEMBER 31, 1999 (A)
---------- ---------------------
<S> <C> <C>
OPERATIONS:
Net investment income ................................................ $ 910,449 $ 877,430
Net realized gain on investments ..................................... 1,797,769 309,282
Net change in unrealized appreciation on investments ................. 714,567 1,759,470
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................. 3,422,785 2,946,182
----------- -----------
DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS:
Net investment income ................................................ (910,449) (877,430)
Net realized gains on investments .................................... (2,375,118) (309,282)
In excess of net realized gains on investments ....................... -- (448,378)
----------- -----------
TOTAL DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS ..................... (3,285,567) (1,635,090)
----------- -----------
TRUST SHARE TRANSACTIONS:
Net increase in net assets from Utility Trust share transactions ..... 292,004 81,918,478
----------- -----------
NET INCREASE IN NET ASSETS ........................................... 429,222 83,229,570
NET ASSETS:
Beginning of period .................................................. 83,329,570 100,000
----------- -----------
End of period ........................................................ $83,758,792 $83,329,570
=========== ===========
</TABLE>
(a) From commencement of investment operations on July 9, 1999 through December
31, 1999.
See accompanying notes to financial statements.
11
<PAGE>
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION. The Gabelli Utility Trust ("Utility Trust") is a closed-end,
non-diversified management investment company organized on February 25, 1999 as
a Delaware corporation and registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), whose primary objective is long-term growth of
capital and income. Investment operations commenced on July 9, 1999. The Utility
Trust had no operations prior to July 9, 1999, other than the sale of 10,000
shares of common stock for $100,000 to The Gabelli Equity Trust Inc. (the
"Equity Trust") at $10.00 per share. On July 9, 1999, the Utility Trust had a 4
for 3 stock split making the balance of Utility Trust shares held by Equity
Trust 13,333. On July 9, 1999, the Equity Trust contributed $79,487,260 in cash
and securities in exchange for shares of the Utility Trust, and on the same date
distributed such shares to holders of record on July 1, 1999 at the rate of one
share of the UtilityTrust for every ten shares of the Equity Trust.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with 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
Utility Trust in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange, quoted by the National Association of Securities
Dealers Automated Quotations, Inc. ("Nasdaq") or traded on foreign exchanges are
valued at the last sale price on that exchange 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, except for open short positions, which are
valued at the last asked price). All other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest average of the bid and asked prices. 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"). Securities and assets for which market quotations are not
readily available are valued at their fair value as determined in good faith
under procedures established by and under the general supervision of the Board
of Trustees. Short term debt securities with remaining maturities of 60 days or
less are valued at amortized cost, unless the Trustees determine such does not
reflect the securities' fair value, in which case these securities will be
valued at their fair value as determined by the Trustees. Debt instruments
having a maturity greater than 60 days are valued at the highest bid price
obtained from a dealer maintaining an active market in those securities.
REPURCHASE AGREEMENTS. The Utility Trust may enter into repurchase
agreements with government securities dealers recognized by the Federal Reserve
Bank of New York, 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 of Trustees. Under the terms of a typical repurchase
agreement, the Utility Trust takes possession of an underlying debt obligation
subject to an obligation of the seller to repurchase, and the Utility Trust to
resell, the obligation at an agreed-upon price and time, thereby determining the
yield during the Utility Trust's holding period. The Utility Trust will always
receive and maintain securities as collateral whose market value, including
accrued interest, will be at least equal to 100% of the dollar amount invested
by the Utility Trust in each agreement. The Utility Trust will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis
12
<PAGE>
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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
Utility Trust may be delayed or limited.
FOREIGN CURRENCY TRANSLATION. The books and records of the Utility Trust
are maintained in United States (U.S.) dollars. Foreign currencies, investments
and other assets and liabilities are translated into U.S. dollars at the
exchange rates prevailing at the end of the period, and purchases and sales of
investment securities, income and expenses are translated at the exchange rate
prevailing on the respective dates of such transactions. Unrealized gains and
losses, which result from changes in foreign exchange rates and/or changes in
market prices of securities, have been included in unrealized
appreciation/depreciation on investments and foreign currency transactions. 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 Utility Trust and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for as of the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded as earned.
Dividend income is recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders
are recorded on the ex-dividend date. Income distributions and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments of income and gains on various investment
securities held by the Utility Trust, timing differences and differing
characterization of distributions made by the Utility Trust.
PROVISION FOR INCOME TAXES. The Utility Trust intends to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a result, a Federal income tax provision is
not required.
Dividends and interest from non-U.S. sources received by the Utility Trust
are generally subject to non-U.S. withholding taxes at rates ranging up to 30%.
Such withholding taxes may be reduced or eliminated under the terms of
applicable U.S. income tax treaties, and the Utility Trust intends to undertake
any procedural steps required to claim the benefits of such treaties.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Utility Trust has entered
into an investment advisory agreement (the "Advisory Agreement") with the
Adviser which provides that the Utility Trust will pay the Adviser on the first
business day of each month a fee for the previous month equal on an annual basis
to 1.00% of the value of the Utility Trust's average daily net assets. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Utility Trust's portfolio and oversees the
administration of all aspects of the Utility Trust's business and affairs.
13
<PAGE>
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
During the six months ended June 30, 2000, Gabelli & Company, Inc. and its
affiliates received $48,210 in brokerage commissions as a result of executing
agency transactions in portfolio securities on behalf of the Utility Trust.
4. PORTFOLIO SECURITIES. Cost of purchases and proceeds from sales of
securities, other than short-term securities, for the six months ended June 30,
2000 aggregated $33,512,719 and $36,262,910, respectively.
5. CAPITAL. The Board of Trustees of the Utility Trust has authorized the
repurchase of its shares on the open market when the shares are trading at a
discount of 10% or more (or such other percentage as the Board of Trustees may
determine from time to time) from the net asset value of the shares. During the
six months ended June 30, 2000, the Utility Trust did not repurchase any shares
of its common stock in the open market.
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000 PERIOD ENDED
(UNAUDITED) DECEMBER 31, 1999
--------------------- -------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares issued immediately prior to
the spin-off from the Equity Trust ....................... -- -- 10,598,302 79,487,260
Shares issued by the Utility Trust ......................... -- -- 301,809 2,262,562
Shares issued upon reinvestment
of dividends and distributions ........................... 37,986 $292,004 22,402 168,656
------ -------- ---------- ----------
Net increase ............................................... 37,986 $292,004 10,922,513 81,918,478
====== ======== ========== ==========
</TABLE>
6. INDUSTRY CONCENTRATION. Because the Utility Trust primarily invests in common
stocks and other securities of foreign and domestic companies in the utility
industry, its portfolio may be subject to greater risk and market fluctuations
than a portfolio of securities representing a broad range of investments.
14
<PAGE>
THE GABELLI UTILITY TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SELECTED DATA FOR A UTILITY TRUST COMMON SHARE SIX MONTHS ENDED PERIOD ENDED
OUTSTANDING THROUGHOUT EACH PERIOD: JUNE 30, 2000 DECEMBER 31,
OPERATING PERFORMANCE: (UNAUDITED) 1999 (A)
---------- ------
<S> <C> <C>
Net asset value, beginning of period ........................... $ 7.62 $ 7.50
------- ------
Net investment income .......................................... 0.08 0.08
Net realized and unrealized gain on investments ................ 0.23 0.19
------- ------
Total from investment operations ............................... 0.31 0.27
------- ------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income .......................................... (0.08) (0.08)
Net realized gain on investments ............................... (0.22) (0.03)
In excess of net realized gain on investments .................. -- (0.04)
------- ------
Total distributions ............................................ (0.30) (0.15)
------- ------
NET ASSET VALUE, END OF PERIOD ................................. $ 7.63 $ 7.62
======= =======
Market value, end of period .................................... $ 7.94 $ 7.63
======= =======
Net asset value total return+ .................................. 4.13% 3.62%
======= =======
Total investment return+ ....................................... 8.25% 3.70%
======= =======
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........................... $83,759 $83,330
Ratio of net investment income to average net assets (c) ....... 2.20%(b) 2.27%(b)
Ratio of operating expenses to average net assets (c) .......... 1.60%(b) 1.75%(b)
Portfolio turnover rate ........................................ 49% 37%
</TABLE>
--------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends. Total return for the period of less
than one year is not annualized.
(a) From commencement of investment operations on July 9, 1999 through December
31, 1999.
(b) Annualized.
(c) During the period ended December 31, 1999, the Utility Trust's administrator
voluntarily reimbursed certain expenses. If such reimbursement had not
occurred, the annualized ratios of net investment income and operating
expenses to average net assets would have been 1.85% and 2.17%,
respectively.
See accompanying notes to financial statements.
15
<PAGE>
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLAN
ENROLLMENT IN THE PLAN
It is the policy of The Gabelli Utility Trust ("Utility Trust") to
automatically reinvest dividends. As a "registered" shareholder you
automatically become a participant in the Utility Trust's Automatic Dividend
Reinvestment Plan (the "Plan"). The Plan authorizes the Utility Trust to issue
shares to participants upon an income dividend or a capital gains distribution
regardless of whether the shares are trading at a discount or a premium to net
asset value. All distributions to shareholders whose shares are registered in
their own names will be automatically reinvested pursuant to the Plan in
additional shares of the Utility Trust. Plan participants may send their stock
certificates to State Street Bank and Trust Company ("State Street") to be held
in their dividend reinvestment account. Registered shareholders wishing to
receive their distribution in cash must submit this request in writing to:
The Gabelli Utility Trust
c/o State Street Bank and Trust Company
P.O. Box 8200
Boston, MA 02266-8200
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 may contact State Street at 1 (800)
336-6983.
SHAREHOLDERS WISHING TO LIQUIDATE REINVESTED SHARES held at State Street Bank
must do so in writing or by telephone. Please submit your request to the above
mentioned address or telephone number. Include in your request your name,
address and account number. The cost to liquidate shares is $2.50 per
transaction as well as the brokerage commission incurred. Brokerage charges are
expected to be less than the usual brokerage charge for such transactions.
If your shares are held in the name of a broker, bank or nominee, you should
contact such institution. If such institution is not participating in the Plan,
your account will be credited with a cash dividend. In order to participate in
the Plan through such institution, it may be necessary for you to have your
shares taken out of "street name" and re-registered in your own name. Once
registered in your own name your dividends will be automatically reinvested.
Certain brokers participate in the Plan. Shareholders holding shares in "street
name" at participating institutions will have dividends automatically
reinvested. Shareholders wishing a cash dividend at such institution must
contact their broker to make this change.
The number of shares of Common Stock 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 Utility Trust's Common Stock 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 shares of Common Stock 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 Utility Trust's Common Stock. The valuation
date is the dividend or distribution payment date or, if that date is not a New
York Stock Exchange trading day, the next trading day. If the net asset value of
the Common Stock at the time of valuation exceeds the market price of the Common
Stock, participants will receive shares from the Utility Trust valued at market
price. If the Utility Trust should declare a dividend or capital gains
distribution payable only in cash, State Street will buy Common Stock in the
open market, or on the New York Stock Exchange or elsewhere, for the
participants' accounts, except that State Street will endeavor to terminate
purchases in the open market and cause the Utility Trust to issue shares at net
asset value if, following the commencement of such purchases, the market value
of the Common Stock 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.
The Utility Trust reserves the right to amend or terminate the Plan as
applied to any voluntary cash payments made and any dividend or distribution
paid subsequent to written notice of the change sent to the members of the Plan
at least 90 days before the record date for such dividend or distribution. The
Plan also may be amended or terminated by State Street on at least 90 days'
written notice to participants in the Plan. VOLUNTARY CASH PURCHASE PLAN
The Voluntary Cash Purchase Plan is yet another vehicle for our shareholders
to increase their investment in the Utility Trust. In order to participate in
the Voluntary Cash Purchase Plan, shareholders must have their shares registered
in their own name.
Participants in the Voluntary Cash Purchase Plan have the option of making
additional cash payments to State Street for investments in the Utility Trust's
shares at the then current market price. Shareholders may send an amount from
$250 to $10,000. State Street will use these funds to purchase shares in the
open market on or about the 15th of each month. State Street 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 State Street Bank and Trust Company, P.O. Box
8200, Boston, MA 02266-8200 such that State Street receives such payments
approximately 10 days before the 15th of the month. Funds not received at least
five days before the investment date shall be held for investment in the
following month. A payment may be withdrawn without charge if notice is received
by State Street at least 48 hours before such payment is to be invested.
For more information regarding the Dividend Reinvestment Plan and Voluntary
Cash Purchase Plan, brochures are available by calling (914) 921-5070 or by
writing directly to the Utility Trust.
16
<PAGE>
DIRECTORS AND OFFICERS
THE GABELLI UTILITY TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1434
DIRECTORS
Mario J. Gabelli, CFA
CHAIRMAN AND CHIEF INVESTMENT OFFICER
GABELLI ASSET MANAGEMENT INC.
Dr. Thomas E. Bratter
PRESIDENT, JOHN DEWEY ACADEMY
Felix J. Christiana
FORMER SENIOR VICE PRESIDENT
DOLLAR DRY DOCK SAVINGS BANK
Anthony J. Colavita
ATTORNEY-AT-LAW
ANTHONY J. COLAVITA, P.C.
James P. Conn
FORMER MANAGING DIRECTOR AND CHIEF INVESTMENT OFFICER
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Vincent D. Enright
FORMER SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
KEYSPAN ENERGY CORP.
Frank J. Fahrenkopf, Jr.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AMERICAN GAMING ASSOCIATION
John D. Gabelli
SENIOR VICE PRESIDENT
GABELLI & COMPANY, INC.
Karl Otto Pohl
FORMER PRESIDENT
DEUTSCHE BUNDESBANK
Anthony R. Pustorino
CERTIFIED PUBLIC ACCOUNTANT
PROFESSOR, PACE UNIVERSITY
Salvatore J. Zizza
CHAIRMAN
THE BETHLEHEM CORP.
OFFICERS
Mario J. Gabelli, CFA
PRESIDENT & CHIEF INVESTMENT OFFICER
Bruce N. Alpert
VICE PRESIDENT AND TREASURER
James E. McKee
SECRETARY
David I. Schachter
VICE PRESIDENT AND OMBUDSMAN
INVESTMENT ADVISOR
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1434
CUSTODIAN
Boston Safe Deposit and Trust Company
COUNSEL
Skadden, Arps, Slate, Meagher & Flom, LLP
TRANSFER AGENT AND REGISTRAR
State Street Bank and Trust Company
STOCK EXCHANGE LISTING
Common
------
NYSE-Symbol: GUT
Shares Outstanding: 10,973,832
The Net Asset Value appears in the Publicly Traded Funds column, under the
heading "Specialized Equity Funds," in Sunday's The New York Times and in
Monday's The Wall Street Journal. It is also listed in Barron's Mutual
Funds/Closed End Funds section under the heading "Specialized Equity Funds."
The Net Asset Value may be obtained each day by calling (914) 921-5071.
--------------------------------------------------------------------------------
For general information about the Gabelli Funds, call 1-800-GABELLI
(1-800-422-3554), fax us at 914-921-5118, visit Gabelli Funds' Internet homepage
at: HTTP://WWW.GABELLI.COM or e-mail us at: [email protected]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Utility Trust may, from time to time,
purchase its shares in the open market when the Utility Trust shares are trading
at a discount of 10% or more from the net asset value of the shares.
--------------------------------------------------------------------------------
<PAGE>
THE GABELLI UTILITY TRUST
ONE CORPORATE CENTER
RYE, NY 10580-1434
(914) 921-5070
HTTP://WWW.GABELLI.COM
SEMI-ANNUAL REPORT
JUNE 30, 2000
GBFUF 06/00
