<PAGE>
PAINEWEBBER UTILITY INCOME FUND
RECENT PERFORMANCE RESULTS (UNAUDITED)
<TABLE>
<CAPTION>
NET ASSET VALUE TOTAL RETURN/1/
-------------------------------------- -----------------------------
12 MONTHS 6 MONTHS
11/30/95 05/31/95 11/30/94 ENDED 11/30/95 ENDED 11/30/95
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A
Shares $9.77 $9.14 $8.31 23.64% 9.46%
- ------------------------------------------------------------------------------------
Class B
Shares 9.77 9.13 8.31 22.73% 9.17%
- ------------------------------------------------------------------------------------
Class C
Shares* 9.77 9.13 8.31 22.71% 9.17%
- ------------------------------------------------------------------------------------
PERFORMANCE SUMMARY CLASS A SHARES
<CAPTION>
NET ASSET VALUE
------------------ CAPITAL GAINS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED DIVIDENDS PAID RETURN/1/
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
07/02/93 -
12/31/93 $10.00 $9.70 -- $0.2340 -0.70%
- ------------------------------------------------------------------------------------
1994 9.70 8.28 -- 0.4829 -9.71
- ------------------------------------------------------------------------------------
01/01/95 -
11/30/95 8.28 9.77 -- 0.4057 23.37
- ------------------------------------------------------------------------------------
Total: $0.0000 $1.1226
- ------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 11/30/95: 10.61%
- ------------------------------------------------------------------------------------
PERFORMANCE SUMMARY CLASS B SHARES
<CAPTION>
NET ASSET VALUE
------------------ CAPITAL GAINS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED DIVIDENDS PAID RETURN/1/
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
07/02/93 -
12/31/93 $10.00 $9.70 -- $0.2010 -1.02%
- ------------------------------------------------------------------------------------
1994 9.70 8.28 -- 0.4169 -10.40
- ------------------------------------------------------------------------------------
01/01/95 -
11/30/95 8.28 9.77 -- 0.3465 22.58
- ------------------------------------------------------------------------------------
Total: $0.0000 $0.9644
- ------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 11/30/95: 8.71%
- ------------------------------------------------------------------------------------
PERFORMANCE SUMMARY CLASS C SHARES*
<CAPTION>
NET ASSET VALUE
------------------ CAPITAL GAINS TOTAL
PERIOD COVERED BEGINNING ENDING DISTRIBUTED DIVIDENDS PAID RETURN/1/
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
07/02/93 -
12/31/93 $10.00 $9.70 -- $0.2020 -1.01%
- ------------------------------------------------------------------------------------
1994 9.70 8.28 -- 0.4158 -10.41
- ------------------------------------------------------------------------------------
01/01/95 -
11/30/95 8.28 9.77 -- 0.3455 22.56
- ------------------------------------------------------------------------------------
Total: $0.0000 $0.9633
- ------------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURN AS OF 11/30/95: 8.69%
- ------------------------------------------------------------------------------------
</TABLE>
* Formerly Class D shares.
/1/ Figures assume reinvestment of all dividends and capital gains distributions
at net asset value on the payable dates, and do not include sales charges;
results would be lower if sales charges were included.
1
<PAGE>
PAINEWEBBER UTILITY INCOME FUND
PORTFOLIO OF INVESTMENTS NOVEMBER 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) MATURITY DATES INTEREST RATES VALUE
--------- -------------------- -------------- -----------
<C> <S> <C> <C> <C>
CORPORATE BONDS - 30.92%
Century Telephone
$ 1,200 Enterprises Inc. ...... 05/01/24 8.250% $ 1,293,684
Commonwealth Edison
1,500 Company ............... 04/15/23 8.000 1,556,131
3,000 Duquesne Light Company . 06/15/04 6.625 2,973,867
1,500 Georgia Power Company .. 02/01/23 7.950 1,559,408
1,000 Illinois Power Company . 08/01/03 6.500 1,000,856
MCI Communications
1,500 Corp. ................. 03/15/24 7.750 1,587,471
News America Holdings
800 Corp. ................. 02/01/13 9.250 929,234
Public Service Electric
1,500 and Gas Company ....... 05/01/04 to 03/01/23 6.500 to 7.500 1,491,077
Tele-Communications,
2,000 Inc. .................. 01/15/03 to 02/15/23 8.250 to 8.750 2,106,116
Texas Utilities Electric
2,000 Company................ 06/01/02 8.000 2,180,888
2,000 Viacom Inc. ............ 06/01/05 to 07/07/06 7.750 to 8.000 2,033,480
-----------
Total
Corporate
Bonds
(cost -
$18,464,724). 18,712,212
-----------
<CAPTION>
NUMBER OF
SHARES
---------
<C> <S> <C> <C> <C>
COMMON STOCKS - 57.04%
30,000 Allegheny Power Systems Inc.................................. 832,500
17,000 Ameritech Corp. ............................................. 935,000
65,000 Baltimore Gas & Electric Co. ................................ 1,730,625
12,500 Bell Atlantic Corp. ......................................... 787,500
32,000 BellSouth Corp. ............................................. 1,244,000
15,000 CILCORP, Inc. ............................................... 616,875
55,000 CMS Energy Corp. ............................................ 1,498,750
25,000 Detroit Edison Company....................................... 815,625
70,000 DPL Inc. .................................................... 1,680,000
50,000 DQE Inc. .................................................... 1,443,750
35,000 Duke Power Co. .............................................. 1,570,625
45,000 FPL Group Inc. .............................................. 1,951,875
50,000 GTE Corp. ................................................... 2,131,250
38,000 Houston Industries Inc. ..................................... 1,738,500
50,000 NIPSCO Industries Inc. ...................................... 1,850,000
25,000 NYNEX Corp. ................................................. 1,240,625
65,000 Ohio Edison Co. ............................................. 1,478,750
62,500 PECO Energy Co. ............................................. 1,812,500
40,000 Public Service Company of Colorado........................... 1,380,000
50,000 Public Service Enterprise Group.............................. 1,481,250
22,000 SBC Communications Inc. ..................................... 1,188,000
20,000 Sierra Pacific Resources..................................... 462,500
63,000 Southern Co. ................................................ 1,441,125
60,000 TNP Enterprises Inc. ........................................ 1,102,500
</TABLE>
2
<PAGE>
PAINEWEBBER UTILITY INCOME FUND
NOVEMBER 30, 1995
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- -----------
<C> <S> <C> <C> <C>
COMMON STOCKS (concluded)
25,000 U.S. West Inc. ....................................... $ 781,250
45,000 Wisconsin Energy Corp. ............................... 1,327,500
-----------
Total Common Stocks (cost - $30,518,486)........................ 34,522,875
-----------
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
--------- ----------------- -----------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT - 0.68%
$ 415 Repurchase Agreement
dated 11/30/95 with
State Street Bank &
Trust Co.,
collateralized by
$413,596 U.S. Treasury
Notes, 6.000%, due
08/31/97; proceeds
$415,061 (cost -
$415,000)............ 12/01/95 5.250% 415,000
-----------
Total Investments (cost -
$49,398,210) - 88.64%............ 53,650,087
Other assets in excess of
liabilities - 11.36%*............. 6,875,565
-----------
Net Assets - 100.00%.............. $60,525,652
===========
</TABLE>
- -------
* Includes a receivable of $7,865,680 for corporate bonds sold on November 27-
29, 1995 which continue to earn interest income until the settlement dates,
December 1-4, 1995.
See accompanying notes to financial statements
3
<PAGE>
PAINEWEBBER UTILITY INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1995
<TABLE>
<S> <C>
Assets
Investments in securities, at value (cost $49,398,210)............ $53,650,087
Cash.............................................................. 273,686
Receivable for investments sold................................... 7,865,680
Dividend and interest receivable.................................. 636,253
Deferred organizational expenses.................................. 72,972
Receivable for shares of beneficial interest sold................. 45,684
Other assets...................................................... 37,259
-----------
Total assets...................................................... 62,581,621
-----------
Liabilities
Payable for investments purchased................................. 1,680,626
Payable for shares of beneficial interest repurchased............. 201,204
Payable to affiliates............................................. 79,811
Accrued expenses and other liabilities............................ 94,328
-----------
Total liabilities................................................. 2,055,969
-----------
Net Assets
Beneficial interest shares of $0.001 par value outstanding
(unlimited amount authorized).................................... 65,440,854
Undistributed net investment income............................... 99,691
Accumulated net realized losses from investment transactions...... (9,266,770)
Net unrealized appreciation of investments........................ 4,251,877
-----------
Net assets........................................................ $60,525,652
===========
Class A:
Net assets........................................................ $10,749,877
-----------
Shares outstanding................................................ 1,100,109
-----------
Net asset value and redemption value per share.................... $9.77
=====
Maximum offering price per share (net asset value plus sales
charge of 4.50% of offering price)............................... $10.23
======
Class B:
Net assets........................................................ $37,554,206
-----------
Shares outstanding................................................ 3,844,547
-----------
Net asset value and offering price per share...................... $9.77
=====
Class C:
Net assets........................................................ $12,221,569
-----------
Shares outstanding................................................ 1,251,360
-----------
Net asset value and offering price per share...................... $9.77
=====
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
PAINEWEBBER UTILITY INCOME FUND
STATEMENT OF OPERATIONS FOR THE YEAR ENDED NOVEMBER 30, 1995
<TABLE>
<S> <C>
Investment Income:
Interest......................................................... $ 2,167,531
Dividends........................................................ 1,951,645
-----------
4,119,176
-----------
Expenses:
Investment advisory and administration........................... 436,613
Service fees--Class A............................................ 28,100
Service and distribution fees--Class B........................... 380,824
Service and distribution fees--Class C........................... 130,503
Reports and notices to shareholders.............................. 63,464
Transfer agency and service fees................................. 61,695
Custody and accounting........................................... 61,663
State registration fees.......................................... 58,105
Legal and audit.................................................. 48,520
Amortization of organizational expenses.......................... 28,185
Trustees' fees................................................... 6,250
Other expenses................................................... 3,008
-----------
1,306,930
-----------
Net investment income............................................ 2,812,246
-----------
Realized and unrealized gains (losses) from investment
transactions:
Net realized losses from investment transactions................. (248,279)
Net change in unrealized appreciation/depreciation of
investments..................................................... 10,159,054
-----------
Net realized and unrealized gains from investment transactions .. 9,910,775
-----------
Net increase in net assets resulting from operations............. $12,723,021
===========
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
PAINEWEBBER UTILITY INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
NOVEMBER 30,
-------------------------
1995 1994
------------ -----------
From operations:
<S> <C> <C>
Net investment income.............................. $ 2,812,246 $ 3,585,702
Net realized losses from investment transactions... (248,279) (8,233,382)
Net change in unrealized appreciation/depreciation
of investments.................................... 10,159,054 (2,985,242)
------------ -----------
Net increase (decrease) in net assets resulting
from operations................................... 12,723,021 (7,632,922)
------------ -----------
Dividends to shareholders from:
Net investment income - Class A.................... (569,343) (878,315)
Net investment income - Class B.................... (1,637,731) (2,146,859)
Net investment income - Class C.................... (559,933) (838,829)
------------ -----------
(2,767,007) (3,864,003)
------------ -----------
From beneficial interest transactions:
Net proceeds from the sale of beneficial interest.. 13,428,355 31,602,333
Cost of beneficial interest repurchased............ (28,464,756) (38,779,290)
Proceeds from dividends reinvested................. 1,996,330 2,811,517
------------ -----------
Net decrease in net assets from beneficial interest
transactions...................................... (13,040,071) (4,365,440)
------------ -----------
Net decrease in net assets......................... (3,084,057) (15,862,365)
Net assets:
Beginning of period................................ 63,609,709 79,472,074
------------ -----------
End of period (including undistributed net
investment income of $99,691 and $54,452,
respectively)..................................... $ 60,525,652 $63,609,709
============ ===========
</TABLE>
See accompanying notes to financial statements
6
<PAGE>
PAINEWEBBER NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber Managed Investments Trust (the "Trust") was organized under
Massachusetts law by a Declaration of Trust dated November 21, 1986 and is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended, as an open-end, diversified investment
company. The Trust is a series mutual fund with five funds: PaineWebber Utility
Income Fund (the "Fund"), PaineWebber U.S. Government Income Fund, PaineWebber
Investment Grade Income Fund, PaineWebber High Income Fund and PaineWebber Low
Duration U.S. Government Income Fund (formerly "PaineWebber Short-Term U.S.
Government Income Fund"). The financial statements for PaineWebber U.S.
Government Income Fund. PaineWebber Investment Grade Income Fund, PaineWebber
High Income Fund and PaineWebber Low Duration U.S. Government Income Fund, are
not included herein.
The Fund offers Class A, B and C (formerly Class D) Shares. Effective November
10, 1995, the Fund began using industry standardized nomenclature and Class D
shares were renamed Class C shares. Each class of shares represents interests
in the same assets of the Fund and the Classes are identical except for
differences in their sales charge structures, ongoing service/distribution
charges and certain transfer agency expenses. In addition, Class B shares and
all corresponding dividend reinvested shares automatically convert to Class A
shares approximately six years after initial issuance. All classes of shares
have equal voting privileges, except that each class has exclusive voting
rights with respect to its service/distribution plan.
Valuation of Investments - Where market quotations are readily available,
portfolio securities are valued thereon, provided such quotations adequately
reflect, in the judgment of Mitchell Hutchins Asset Management Inc. ("Mitchell
Hutchins"), a wholly owned subsidiary of PaineWebber and investment adviser and
administrator of the Funds, the fair value of the securities. When market
quotations are not readily available, securities are valued based upon
appraisals derived from information concerning those securities or similar
securities received from recognized dealers in those securities. All other
securities are valued at fair value as determined in good faith by or under the
direction of the Trust's board of trustees. The amortized cost method of
valuation, which approximates market value, is used to value debt obligations
with 60 days or less remaining to maturity, unless the Trust's board of
trustees determines that this does not represent fair value.
Repurchase Agreements - The Fund's custodian takes possession of the collateral
pledged for investments in repurchase agreements. The underlying collateral is
valued daily on a mark-to-market basis to ensure that the value, including
accrued interest, is at least equal to the repurchase price. In the event of
default of the obligation to repurchase, the Fund has the right to liquidate
the collateral and
7
<PAGE>
PAINEWEBBER
apply the proceeds in satisfaction of the obligation. Under certain
circumstances, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings. The Fund occasionally participates in joint repurchase
agreement transactions with other funds managed by Mitchell Hutchins.
Investment Transactions and Investment Income - Investment transactions are
recorded on trade date. Realized gains and losses on sale of investments are
calculated using the identified cost method. Interest income is recorded on an
accrual basis and dividend income is recorded on the ex-dividend date. Premiums
are amortized and discounts are accreted as adjustments to interest income and
the identified costs of investments.
Income, expenses (excluding class-specific expenses), and realized/unrealized
gains and losses are allocated proportionately to each class of shares based
upon the relative net asset value of outstanding shares (or the value of
dividend-eligible shares, as appropriate) of each class at the beginning of the
day (after adjusting for current capital share activity of the respective
classes). Class-specific expenses are charged directly to the applicable class
of shares.
Federal Taxes - The Fund intends to distribute all of its taxable income and to
comply with the other requirements of the Internal Revenue Code applicable to
regulated investment companies. Accordingly, no provision for federal income
taxes is required. In addition, by distributing during each calendar year
substantially all of its net investment income, capital gains and certain other
amounts, if any, the Fund intends not to be subject to a federal excise tax.
Dividends and Distributions - Dividends and distributions to shareholders are
recorded on the ex-dividend date. Dividends from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassifications. Dividends
and distributions which exceed net investment income and net realized capital
gains for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
CONCENTRATION OF RISK
The ability of the issuers of the debt securities held by the Fund to meet
their obligations may be affected by economic developments, including those
particular to a specific industry or region.
8
<PAGE>
PAINEWEBBER
INVESTMENT ADVISER AND ADMINISTRATOR
The Fund has an Investment Advisory and Administration Contract ("Advisory
Contract") with Mitchell Hutchins. In accordance with the Advisory Contract,
the Fund pays Mitchell Hutchins an investment advisory and administration fee,
which is accrued daily and paid monthly, at the annual rate of 0.70% of the
Fund's average daily net assets. At November 30, 1995, the Fund owed Mitchell
Hutchins $34,852 in investment advisory and administration fees.
In compliance with applicable state securities laws, Mitchell Hutchins will
reimburse the Fund if and to the extent that the aggregate operating expenses
in any fiscal year, exclusive of taxes, distribution fees, interest, brokerage
fees and extraordinary expenses, exceed limitations imposed by various state
regulations. Currently, the most restrictive limitation applicable to the Fund
is 2.5% of the first $30 million of average daily net assets, 2.0% of the next
$70 million and 1.5% of any excess over $100 million. For the year ended
November 30, 1995, no reimbursements were required pursuant to the above
limitations for the Fund.
DISTRIBUTION PLANS
Mitchell Hutchins is the distributor of the Fund's shares and has appointed
PaineWebber as the exclusive dealer for the sale of those shares. Under
separate plans of service/distribution pertaining to the Class A, Class B, and
Class C shares ("Class A Plan", "Class B Plan" and "Class C Plan," collectively
"Plans"), the Fund pays Mitchell Hutchins monthly service fees at the annual
rate of 0.25% of the average daily net assets of Class A, Class B and Class C
shares and monthly distribution fees at the annual rate of 0.75% of the average
daily net assets of Class B shares and Class C shares. At November 30, 1995,
the Fund owed Mitchell Hutchins $43,113 in service and distribution fees.
Mitchell Hutchins also receives the proceeds of the initial sales charges paid
upon the purchase of Class A shares and the contingent deferred sales charges
paid upon certain redemptions of Class A, Class B and Class C shares. Mitchell
Hutchins has informed the Fund that for the year ended November 30, 1995, it
earned $288,074 in sales charges.
TRANSFER AGENCY SERVICE FEES
The Fund pays PaineWebber an annual fee of $4.00 per active PaineWebber
shareholder account for certain services not provided by the Fund's transfer
agent. For these services for the year ended November 30, 1995, PaineWebber
earned $24,449. At November 30, 1995, PaineWebber was owed $1,846 by the Fund
for shareholder service fees.
9
<PAGE>
PAINEWEBBER
INVESTMENTS IN SECURITIES
For federal income tax purposes, the cost of securities owned at November 30,
1995 was substantially the same as the cost of securities for financial
statement purposes.
At November 30, 1995, the components of the net unrealized appreciation of
investments were as follows:
<TABLE>
<S> <C>
Gross appreciation (investments having an excess of value over
cost). $4,608,461
Gross depreciation (investments having an excess of cost over val-
ue). (356,584)
----------
Net unrealized appreciation of investments....................... $4,251,877
==========
</TABLE>
For the year ended November 30, 1995, total aggregate purchases and sales of
portfolio securities, excluding short-term securities, were as follows:
<TABLE>
<S> <C>
Purchases........................................................... $18,280,094
Sales............................................................... $36,466,540
</TABLE>
FEDERAL INCOME TAX STATUS
At November 30, 1995, the Fund had a net capital loss carryforward of
$9,266,770 which will expire between November 30, 2001 and November 30, 2003.
To the extent such losses are used, as provided in the regulations, to offset
future net realized capital gains, it is probable these gains will not be
distributed.
10
<PAGE>
PAINEWEBBER
SHARES OF BENEFICIAL INTEREST
There is an unlimited amount of $0.001 par value shares of beneficial interest
authorized. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
----------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ----------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
YEAR ENDED
NOVEMBER 30, 1995:
Shares sold............. 202,622 $ 1,796,027 1,035,911 $ 9,257,241 267,682 $ 2,375,087
Shares repurchased...... (677,777) (5,988,235) (1,767,458) (15,877,641) (740,795) (6,598,880)
Dividends reinvested.... 44,624 400,419 128,806 1,156,031 49,070 439,880
Shares converted from
Class B to Class A..... 23,499 218,286 (23,473) (218,286) -- --
---------- ----------- ---------- ------------ ---------- ------------
Net decrease............ (407,032) $(3,573,503) (626,214) $ (5,682,655) (424,043) $ (3,783,913)
========== =========== ========== ============ ========== ============
YEAR ENDED
NOVEMBER 30, 1994:
Shares sold............. 844,216 $ 7,523,292 1,553,212 $ 13,963,371 1,130,190 $ 10,115,670
Shares repurchased...... (1,087,232) (9,501,218) (1,959,760) (17,168,265) (1,378,485) (12,109,807)
Dividends reinvested.... 70,501 620,904 176,677 1,553,050 72,624 637,562
---------- ----------- ---------- ------------ ---------- ------------
Net decrease............ (172,515) $(1,357,022) (229,871) $ (1,651,844) (175,671) $ (1,356,575)
========== =========== ========== ============ ========== ============
</TABLE>
11
<PAGE>
PAINEWEBBER UTILITY INCOME FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD IS PRESENTED BELOW:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C**
------------------------------- ------------------------------- -------------------------------
FOR THE FOR THE FOR THE
PERIOD PERIOD PERIOD
FOR THE YEARS ENDED JULY 2, FOR THE YEARS ENDED JULY 2, FOR THE YEARS ENDED JULY 2,
NOVEMBER 30, 1993+ TO NOVEMBER 30, 1993+ TO NOVEMBER 30, 1993+ TO
-------------------- NOVEMBER -------------------- NOVEMBER -------------------- NOVEMBER
1995 1994 30, 1993 1995 1994 30, 1993 1995 1994 30, 1993
--------- --------- -------- --------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 8.31 $ 9.66 $ 10.00 $ 8.31 $ 9.65 $ 10.00 $ 8.31 $ 9.65 $ 10.00
--------- --------- ------- --------- --------- ------- --------- --------- -------
Net investment income... 0.47 0.48 0.20 0.40 0.42 0.17 0.40 0.42 0.16
Net realized and
unrealized gains
(losses)
from investment
transactions........... 1.44 (1.31) (0.39) 1.45 (1.31) (0.39) 1.45 (1.31) (0.38)
--------- --------- ------- --------- --------- ------- --------- --------- -------
Total increase
(decrease) from
investment operations.. 1.91 (0.83) (0.19) 1.85 (0.89) (0.22) 1.85 (0.89) (0.22)
--------- --------- ------- --------- --------- ------- --------- --------- -------
Dividends from net
investment income...... (0.45) (0.52) (0.15) (0.39) (0.45) (0.13) (0.39) (0.45) (0.13)
--------- --------- ------- --------- --------- ------- --------- --------- -------
Net asset value,
end of period.......... $ 9.77 $ 8.31 $ 9.66 $ 9.77 $ 8.31 $ 9.65 $ 9.77 $ 8.31 $ 9.65
========= ========= ======= ========= ========= ======= ========= ========= =======
Total investment
return(1).............. 23.64% (8.76)% (1.95)% 22.73% (9.35)% (2.29)% 22.71% (9.36)% (2.28)%
========= ========= ======= ========= ========= ======= ========= ========= =======
Ratios/Supplemental Data:
Net assets,
end of period
(000's)................ $10,750 $12,532 $16,224 $37,554 $37,156 $45,382 $12,222 $13,922 $17,866
Expenses to average net
assets................. 1.49% 1.58% 1.55%* 2.23% 2.33% 2.29%* 2.24% 2.32% 2.29%*
Net investment income to
average net assets..... 5.13% 5.49% 5.38%* 4.37% 4.72% 4.67%* 4.37% 4.69% 4.67%*
Portfolio turnover...... 30% 92% 13% 30% 92% 13% 30% 92% 13%
</TABLE>
- -------
* Annualized.
** Formerly Class D shares.
+ Commencement of operations.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends at net
asset value on the payable dates, and a sale at net asset value on the last
day of each period reported. The figures do not include sales charges;
results would be lower if sales charges were included. Total investment
return information for periods less than one year is not annualized.
12
<PAGE>
PAINEWEBBER
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Trustees and Shareholders
PaineWebber Managed Investments Trust
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of PaineWebber Utility Income Fund (one of the
Portfolios of PaineWebber Managed Investments Trust) (the "Fund") as of
November 30, 1995, and the related statement of operations for the year then
ended and the statement of changes in net assets for the two years ended
November 30, 1995 and the financial highlights for each of the indicated
periods. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned at November 30, 1995 by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
PaineWebber Utility Income Fund at November 30, 1995, and the results of its
operations, for the year then ended and the changes in its net assets, for the
two years ended November 30, 1995 and the financial highlights for each of the
periods indicated, in conformity with generally accepted accounting principles.
Ernst & Young LLP
New York, New York
January 15, 1996
13
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PAINEWEBBER
TAX INFORMATION
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of the Fund's fiscal year end (November
30, 1995) as to the federal tax status of distributions received by
shareholders during such fiscal year from the Fund. Accordingly, we are
advising you that all of the distributions paid by the Utility Income Fund
during the period were derived from net investment income and are taxable as
ordinary income. Of these distributions, 69.16% qualifies for the dividends
received deduction available to corporate shareholders.
Dividends received by tax-exempt recipients (e.g., IRAs and Keoghs) need not be
reported as taxable income. Some retirement trusts (e.g., corporate, Keogh and
403(b)(7) plans) may need this information for their annual reporting.
Because the Fund's fiscal year is not the calendar year, another notification
will be sent in respect of calendar year 1995. The second notification, which
will reflect the amounts to be used by calendar year taxpayers on their federal
income tax returns, will be made in conjunction with Form 1099 DIV and is
mailed in January 1996. Shareholders are advised to consult their own tax
advisers with respect to the tax consequences of their investment in the Fund.
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