<PAGE>
DEAR FELLOW SHAREHOLDERS:
PERFORMANCE REVIEW: During the first quarter of 1998, the Utilities Income
Fund had a total return of 5.7%. Of that return, 3.8% was price appreciation
and 1.9% income. The Fund's primary goal is current income. Shareholder income
came in the form of three 6.5 cents monthly dividends. The 6.5 cents monthly
rate would be 78 cents annualized without compounding, or a 7.43% yield based
on the 3/31/98 closing stock price of $10.50. That yield compares favorably
with the 3.92% yield on the Dow Jones Utilities Index, and the 4.04% yield on
the S&P Utilities Index.
During the first quarter of 1998, both the Dow Jones Utilities Index and the
S&P Utilities Index had total returns of 5.6%, assuming that dividends were
reinvested into the Indexes. The Lehman Brothers Utility Bond Index returned
1.4% for the same period. A weighted average of the Dow Jones Utilities Index
and the Lehman Utility Bond Index reflecting the Fund's stock/bond ratio would
have had a total return of 4.6%.
THE INVESTMENT ENVIRONMENT AND OUTLOOK: The Fund's telecommunications
holdings followed up a strong fourth quarter in 1997 with an even better first
quarter in 1998. We can point to several reasons for this performance. First
of all, the sector was clearly viewed as a place to hide from the Asian crisis
that occurred in the second half of last year. While that impact was felt most
strongly in the fourth quarter of 1997, there was definitely some carry-over
effect in the first quarter as well.
Speculation of industry consolidation was also a major force in the sector's
performance with multiple rumors of mergers worldwide. Several of the Fund's
telecommunications holdings were mentioned in these rumors, including Bell
Atlantic, Sprint, British Telecommunications and Cable & Wireless.The only
significant announcement that was actually made during the quarter was the
much talked about alliance of Telefonica with WorldCom and MCI Communications.
Although expected, the alliance was more far-reaching and beneficial to
Telefonica than had been anticipated, resulting in a 28% gain in Telefonica
stock in March. We continue to believe that mergers, acquisitions and
alliances will dominate this industry as companies position themselves to
offer a full suite of products and services to customers globally. Our
investment philosophy is to own companies with strong fundamentals and
attractive assets. While the potential of a merger is an added positive, that
is not our primary reason to own a stock.
Another contributor to the telecommunications sector's strength is the
general lack of significant competition in the industry. It has been two years
since the Telecommunications Act of 1996 was passed, and full-scale
competition in the local market has yet to develop. While the Federal
Communications Commission (FCC) has attempted to set the rules that would
speed the introduction of competition, most of these rules are being
challenged. Ultimately, it will be up to the courts to decide the structure of
the industry which could take another 12 to 18 months. Thus, competitors'
progress in cracking the local market has been slow, and some big potential
competitors (i.e. AT&T and MCI Communications) have pulled out of reselling
local service all together. As a result, the incumbent local telephone
providers, namely the regional Bell operating companies (RBOCs) and GTE, have
continued to post good earnings on the back of strong demand for
telecommunications services.
However, investors' complacency regarding the risk of competition was shaken
somewhat at the beginning of the second quarter. In early April, Bell Atlantic
announced it had reached an agreement with the New York Public Service
Commission on preconditions for supporting the company's entry into long
distance. Some investors (and other RBOCs) believe Bell Atlantic made too many
concessions to open its local market to competition in exchange for the
Commission's endorsement of its long distance application which is to be filed
<PAGE>
with the FCC later this year. Frankly, Bell Atlantic had little choice. Its
lucrative New York City market already faces stiff local competition which
will only intensify. It does not have the luxury of waiting another 12 to 18
months for the courts to rule on these issues. Bell Atlantic needs to be able
to offer long distance as quickly as possible so it can compete with a full-
service offering. In addition, long distance entry increases the company's
attractiveness as a strategic partner to foreign carriers.
While Bell Atlantic's situation in New York is somewhat unique, investors
are concerned that other RBOCs will have to make similar concessions in their
states to receive long distance entry endorsements. We do not believe there
will be a domino-effect across the country. However, in those states where the
RBOC is already seeing significant competition in the business market (i.e.
Illinois, California, Texas), the Bell Atlantic agreement may be a reasonable
compromise to hasten their entry into long distance.
The Fund also got a boost in the first quarter from its international
holdings. The European markets were particularly strong for two main reasons:
a perceived safe haven from Asia and the move to European Monetary Union (
EMU). Although Asian markets began to stabilize somewhat in the first quarter,
the view is that the worst is not over yet. As a consequence, investors have
flocked to Europe which, due to EMU, has seen continued improvement in its
macro environment, including lower interest rates. This resulted in a
significant outperformance of the European markets compared to the rest of the
world. Since almost all of our International equity holdings are in Europe,
the Fund has been a beneficiary of this strength. Despite a pullback early in
the second quarter, we remain comfortable with our international strategy and
investments.
BOARD OF DIRECTORS MEETING: At the regular April Board of Directors meeting,
the Board declared the following monthly dividends:
<TABLE>
<CAPTION>
DIVIDENDS RECORD PAYABLE
PER SHARE DATE DATE
--------- ------ -------
<S> <C> <C>
6.5 cents 5/29/98 6/10/98
6.5 cents 6/30/98 7/10/98
6.5 cents 7/31/98 8/10/98
</TABLE>
The Board also considered revising an existing investment limitation of 10%
on the amount of securities issued by public utilities located outside the
United States. As the Fund's investments outside the United States have
increased in value, from time to time the policy restriction has limited the
Fund's ability to invest in the securities of foreign issuers when Fund
managers believed that it would have been beneficial to make such investments.
Believing it advantageous to the shareholders, the Board approved raising the
limitation from 10% to 15%.
AUTOMATIC DIVIDEND REINVESTMENT PLAN AND DIRECT DEPOSIT SERVICE--The Fund
has a dividend reinvestment plan available to all registered shareholders. As
long as the market price of the common stock of the Fund exceeds or is equal
to the net asset value per share, new shares for the dividend reinvestment
program are issued at the greater of either 95% of the market price or the net
asset value. If the market price per share of common stock is below the net
asset value per share, shares are purchased in the open market at prevailing
market prices, plus any brokerage commissions paid by The Bank of New York for
all shares purchased by it in the reinvestment of the distribution and
credited to the accounts of plan participants.
For those shareholders whose shares are held for them by a brokerage house
or nominee in "street-name" you may not participate in the Fund's automatic
dividend reinvestment plan inasmuch as the Fund cannot
2
<PAGE>
communicate directly with you since the Fund does not have your name and
address. Thus for those Fund shareholders in "street-name" desiring automatic
dividend reinvestment, we suggest you contact your broker or other nominee.
As an added service, the Fund now offers direct deposit service through
electronic funds transfer to all registered shareholders currently receiving a
monthly dividend check. Direct deposit provides automatic and immediate access
to your funds on the dividend payment date and eliminates the possibility of
mail delays and lost or stolen checks. This service is offered through The
Bank of New York.
For more information and/or an authorization form on automatic dividend
reinvestment or direct deposit, please contact The Bank of New York. You can
contact the Administrator or The Bank of New York by calling the Fund's toll
free number of 1-800-680-4DNP.
VISIT US ON THE WEB--You can obtain the most recent shareholder financial
report and dividend information at our web site http://www.duff.com.
We appreciate your interest in Duff & Phelps Utilities Income Inc., and we
will continue to do our best to be of service to you.
LOGO LOGO
Claire V. Hansen, CFA Calvin J. Pedersen, CFA
Chairman President and Chief Executive
Officer
3
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS
(UNAUDITED)
MARCH 31, 1998
The accompanying note is an integral part of this financial statement.
COMMON STOCKS--74.1%
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES COMPANY (NOTE 1)
------ ------- --------------
<C> <S> <C>
^ ELECTRIC--38.2%
81,400 Baltimore Gas & Electric Co........................ $ 2,660,762
1,618,600 Boston Edison Co................................... 67,880,038
1,017,900 Carolina Power & Light Co.......................... 46,059,975
1,235,000 CINergy Corp....................................... 45,695,000
1,352,700 CMS Energy Corp.................................... 63,492,356
1,265,000 DQE Incorporated................................... 47,121,250
1,000,000 Duke Energy Corp................................... 59,562,500
1,858,400 Edison International............................... 54,590,500
1,593,400 Endesa S.A......................................... 38,639,950
1,500,000 FirstEnergy Corp................................... 46,218,750
1,147,800 FPL Group Inc...................................... 73,746,150
316,300 Houston Industries Inc. ........................... 9,093,625
686,500 National Power PLC ADR............................. 28,575,563
1,000,000 New Century Energies, Inc.......................... 50,375,000
1,067,100 New England Electric System........................ 48,753,131
2,556,600 NIPSCO Industries Inc.............................. 71,584,800
920,000 Pinnacle West Capital Corp......................... 40,882,500
302,000 Powergen PLC ADR................................... 17,214,000
500,000 Scottish Power PLC ADR............................. 18,968,750
2,000,000 Southern Co........................................ 55,375,000
500,000 Southern Electric PLC ADR.......................... 4,550,700
1,319,700 TECO Energy Inc.................................... 37,281,525
700,000 Texas Utilities Co................................. 27,518,750
1,558,900 Unicom Corp........................................ 54,561,500
--------------
1,010,402,075
^ GAS--8.1%
235,000 AGL Resources...................................... 5,052,500
225,000 CMS Energy Corp. Class G........................... 5,695,312
245,000 EL Paso Natural Gas Co............................. 17,287,813
661,600 Keyspan Energy Corp................................ 24,024,350
300,000 KN Energy.......................................... 17,718,750
425,000 MCN Energy Group Inc............................... 15,884,375
400,000 National Fuel Gas Co............................... 18,800,000
444,700 NICOR Inc.......................................... 18,788,575
600,000 Pacific Enterprises................................ 24,487,500
300,000 RWE AG ADR......................................... 16,140,897
300,000 Washington Gas Light Co............................ 8,212,500
1,320,000 Williams Companies Inc............................. 42,240,000
--------------
214,332,572
</TABLE>
4
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(CONTINUED)
(UNAUDITED)
MARCH 31, 1998
The accompanying note is an integral part of this financial statement.
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES COMPANY (NOTE 1)
------ ------- --------------
<C> <S> <C>
^ TELECOMMUNICATION--17.0%
1,686,200 Ameritech Corp..................................... $ 83,361,512
699,500 Bell Atlantic Corp................................. 71,698,750
565,000 Bellsouth Corp..................................... 38,172,813
180,200 British Telecommunications PLC ADR................. 19,709,375
1,015,000 Cable and Wireless ADS............................. 38,316,250
2,037,230 SBC Communications Inc............................. 88,874,159
575,000 Sprint Corp........................................ 38,920,313
142,100 Telestra Corp. ADR................................. 7,344,794
464,400 Telefonica De Espana ADS........................... 61,416,900
--------------
447,814,866
^ NON-UTILITY--10.8%
200,000 Bay Apartment Communities.......................... 7,425,000
409,000 Boston Properties Inc.............................. 14,391,687
253,800 CBL & Associates Properties Inc.................... 6,218,100
350,000 Centerpoint Properties Corporation................. 12,140,625
120,000 Chelsea GCA Realty Inc............................. 4,440,000
100,000 Colonial Properties Trust.......................... 3,181,250
450,000 Cornerstone Properties Inc......................... 8,184,375
50,000 Crescent Operating Inc............................. 1,068,750
500,000 Crescent Real Estate Equities Inc.................. 18,000,000
200,000 Developers Diversified Realty Corp................. 8,175,000
400,000 Equity Residential Properties Trust................ 20,100,000
200,000 Essex Property Trust Inc........................... 6,862,500
478,100 First Industrial Realty Trust...................... 17,211,600
126,300 Gables Residential Trust........................... 3,433,781
131,000 Great Lakes REIT Inc............................... 2,529,937
455,000 Highwoods Properties Inc........................... 16,067,187
175,000 Macerich Co........................................ 5,206,250
590,000 Nationwide Health Properties....................... 14,750,000
500,008 Patriot American Hospitality....................... 13,500,216
714,200 Reckson Associates Realty Corp..................... 18,837,025
512,500 Starwood Lodging Trust............................. 27,386,719
466,700 Sunstone Hotel Investors Inc....................... 7,467,200
402,400 TriNet Corporate Realty Trust...................... 15,416,950
200,000 Urban Shopping Centers Inc......................... 6,600,000
445,000 Vornado Realty Trust............................... 19,385,313
200,000 Weeks Corp......................................... 6,537,500
--------------
284,516,965
--------------
Total Common Stocks (Cost--$1,427,445,080)......... 1,957,066,478
--------------
</TABLE>
5
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(CONTINUED)
(UNAUDITED)
MARCH 31, 1998
The accompanying note is an integral part of this financial statement.
<TABLE>
<CAPTION>
MARKET
VALUE
SHARES COMPANY (NOTE 1)
------ ------- ------------
<C> <S> <C>
CONVERTIBLE PREFERRED STOCKS--0.0%
^ NON-UTILITY--0.0%
47,000 Tanger Factory Outlet Centers Inc. Series A............... $ 1,245,500
------------
Total Convertible Preferred Stocks (Cost--$989,350)....... 1,245,500
------------
</TABLE>
BONDS--21.9%
<TABLE>
<CAPTION>
RATINGS
--------------------------
STANDARD MARKET
DUFF & AND VALUE
PAR VALUE COMPANY PHELPS MOODY'S POOR'S (NOTE 1)
--------- ------- --------- ------- -------- --------------
<C> <S> <C> <C> <C> <C>
^ ELECTRIC--12.0%
$24,920,000 Alabama Power Co.
9%, due 12/01/24....... AA- A1 A+ 27,525,585
14,500,000 Commonwealth Edison Co.
9 3/4%, due 2/15/20.... BBB Baa2 BBB 15,993,631
7,500,000 Commonwealth Edison Co.
9 7/8%, due 6/15/20.... BBB Baa2 BBB 8,787,255
6,850,000 Commonwealth Edison Co.
8 5/8%, due 2/01/22.... BBB Baa2 BBB 7,381,478
5,000,000 Commonwealth Edison Co.
8 3/8%, due 9/15/22.... BBB Baa2 BBB 5,313,990
10,000,000 Commonwealth Edison Co.
8 3/8%, due 2/15/23.... BBB Baa2 BBB 10,694,050
8,000,000 Duquesne Light Co.
7.55%, due 6/15/25..... A- Baa1 BBB+ 8,098,856
5,000,000 Gulf States Utilities
8.94%, due 1/01/22..... Not Rated Baa3 BBB- 5,304,410
20,000,000 Illinois Power Co.
8%, due 2/15/23........ BBB+ Baa1 BBB 20,700,000
5,000,000 Louisiana Power & Light
Co.
8 3/4%, due 3/01/26.... Not Rated Baa2 BBB 5,313,360
15,000,000 New York State Electric
& Gas Corp. 9 7/8, due
11/01/20............... Not Rated Baa1 BBB+ 16,699,785
</TABLE>
6
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(CONTINUED)
(UNAUDITED)
MARCH 31, 1998
The accompanying note is an integral part of this financial statement.
<TABLE>
<CAPTION>
RATINGS
--------------------------
STANDARD MARKET
DUFF & AND VALUE
PAR VALUE COMPANY PHELPS MOODY'S POOR'S (NOTE 1)
--------- ------- --------- ------- -------- ------------
<C> <S> <C> <C> <C> <C>
$ 4,000,000 New York State Electric
& Gas Corp. 8 7/8%, due
11/01/21............... Not Rated Baa1 BBB+ $ 4,352,324
14,105,000 Pennsylvania Power &
Light Co.
9 1/4%, due 10/01/19... Not Rated A3 A- 15,483,327
16,850,000 Pennsylvania Power &
Light Co.
9 3/8%, due 7/01/21.... Not Rated A3 A- 19,087,174
11,750,000 Philadelphia Electric
8 3/4%, due 4/01/22.... Not Rated Baa1 BBB+ 12,438,468
27,580,000 Potomac Electric Power
Co.
9%, due 6/01/21........ AA- A1 A 30,114,326
10,000,000 Public Service Co. of
Colorado
8 3/4%, due 3/01/22.... Not Rated A3 A 11,000,300
3,000,000 Rochester Gas & Electric
Corp.
9 3/8%, due 4/01/21.... A- Baa1 BBB+ 3,317,469
29,830,000 Texas Utilities Electric
Co.
9 3/4%, due 5/01/21.... A- Baa1 BBB+ 33,862,688
10,000,000 Texas Utilities Electric
Co.
8 3/4%, due 11/01/23... A- Baa1 BBB+ 10,934,880
12,000,000 UtiliCorp United Inc.
8%, due 3/01/23........ BBB Baa3 BBB 12,632,484
12,600,000 Union Electric Co.
8 3/4%, due 12/01/21... AA- A1 AA- 13,837,912
17,200,000 Virginia Electric &
Power Co.
8 1/4%, due 3/01/25.... A A2 A 18,685,891
------------
317,559,643
^ GAS--1.7%
2,125,000 ANR Pipeline Co.
9 5/8%, due 11/01/21... Not Rated Baa2 BBB 2,822,045
8,875,000 Enron Corp.
9.65%, due 5/15/01..... BBB+ Baa2 BBB+ 9,728,065
7,885,000 Pennzoil Co.
10 1/8%, due 11/15/09.. Not Rated Baa3 BBB 9,942,433
</TABLE>
7
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(CONTINUED)
(UNAUDITED)
MARCH 31, 1998
The accompanying note is an integral part of this financial statement.
<TABLE>
<CAPTION>
RATINGS
--------------------------
STANDARD JMARKET
DUFF & AND VALUE
PAR VALUE COMPANY PHELPS MOODY'S POOR'S (NOTE 1)
--------- ------- --------- ------- -------- ------------
<C> <S> <C> <C> <C> <C>
$10,000,000 Phillips Petroleum Co.
9.18%, due 9/15/21..... Not Rated A3 A- $ 11,276,820
4,500,000 Sonat Inc.
9 1/2%, due 8/15/99.... Not Rated A3 A- 4,693,365
5,000,000 Southern California Gas
Co.
8 3/4%, due 10/01/21... AA- A1 AA- 5,507,520
------------
43,970,248
^ TELECOMMUNICATION--
7.8%
18,000,000 AT&T Corp.
8.35%, due 1/15/25..... AA Aa3 AA- 19,763,928
35,428,000 GTE Corp
9 3/8%, due 12/01/00... A- Baa1 A 38,197,336
6,000,000 GTE Corp.
10 1/4%, due 11/01/20.. A- Baa1 A 6,792,756
10,000,000 GTE California Inc.
8.07%, due 4/15/24..... AA A1 AA- 11,128,690
6,625,000 GTE Corp.
7.90%, due 2/01/27..... A- Baa1 A 7,052,134
11,995,000 Mountain States
Telephone
9 1/2%, due 5/01/00.... Not Rated Aa3 A 12,800,452
13,750,000 New England Telephone &
Telegraph 9%, due
8/01/31................ AA Aa2 AA 15,331,401
10,000,000 New York Telephone Co.
7 5/8%, due 2/01/23.... A A2 A+ 10,473,220
10,000,000 New York Telephone Co.
7%, due 8/15/25........ A A2 A+ 9,917,270
20,740,000 New York Telephone Co.
9 3/8%, due 7/15/31.... A A2 A+ 23,305,849
5,000,000 Pacific Bell
8 1/2%, due 8/15/31.... AA- A1 AA- 5,389,030
24,900,000 Southwestern Bell
Telephone
7.20%, due 10/15/26.... AA Aa3 AA 25,727,128
13,000,000 US West Capital Funding
7.90%, due 2/01/27..... BBB+ Baa1 BBB+ 14,648,647
5,000,000 US West Communications
8 7/8%, due 6/01/31.... AA- Aa3 A 5,529,345
------------
206,057,186
</TABLE>
8
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(CONTINUED)
(UNAUDITED)
MARCH 31, 1998
The accompanying note is an integral part of this financial statement.
<TABLE>
<CAPTION>
RATINGS
-----------------------
STANDARD MARKET
DUFF & AND VALUE
PAR VALUE COMPANY PHELPS MOODY'S POOR'S (NOTE 1)
--------- ------- ------ ------- -------- --------------
<C> <S> <C> <C> <C> <C>
^ NON-UTILITY--0.4%
$ 8,000,000 Dayton Hudson Corp.
9 7/8%, due 7/01/20..... A- Baa1 BBB+ 10,687,104
--------------
10,687,104
--------------
Total Bonds (Cost--$560,715,418).................. 578,274,181
--------------
U.S. TREASURY OBLIGATIONS--2.9%
66,000,000 U.S. Treasury Bonds
11 3/4%, due 2/15/01............................. 76,642,500
--------------
Total U.S. Treasury Obligations (Cost--
$78,725,547)..................................... 76,642,500
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--2.9%
1,161,302 Federal National Mortgage Association 8%, due
5/01/05.......................................... 1,202,311
--------------
Total U.S. Government Agency Obligations (Cost--
$1,200,133)...................................... 1,202,311
--------------
CASH AND OTHER ASSETS LESS LIABILITIES--1.0%.................. 26,771,797
--------------
NET ASSETS
(equivalent to $10.51 per share of common stock based on
203,654,529 shares of common stock outstanding, authorized
250,000,000 shares, $.001 par value per share and 5,000
shares remarketed preferred stock outstanding, authorized
100,000,000 shares, liquidation preference $100,000 per
share, $.001 par value per share)............................ $2,641,202,767
==============
</TABLE>
The percentage shown for each investment category is the total value of that
category as a percentage of the total net assets of the Fund.
9
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(CONTINUED)
(UNAUDITED)
MARCH 31, 1998
(1) The market values for securities are determined as follows: Securities
traded on a national securities exchange or traded over-the-counter and
quoted on the NASDAQ System are valued at last sales prices. Securities so
traded for which there were no sales and other securities are valued at
the mean of the most recent bid-asked quotations. Bonds not traded on a
securities exchange nor quoted on the NASDAQ System are valued at fair
value using a procedure determined in good faith by the Board of Directors
which includes the use of a pricing service. Each money market instrument
having a maturity of 60 days or less is valued on an amortized cost basis.
Other assets and securities are valued at a fair value, as determined in
good faith by the Board of Directors.
10
<PAGE>
BOARD OF DIRECTORS
WALLACE B. BEHNKE
HARRY J. BRUCE
FRANKLIN A. COLE
GORDON B. DAVIDSON
ROBERT J. DAY
CLAIRE V. HANSEN, CFA
FRANCIS E. JEFFRIES, CFA
NANCY LAMPTON
BERYL W. SPRINKEL
OFFICERS
CLAIRE V. HANSEN, CFA
Chairman
CALVIN J. PEDERSEN, CFA
President and Chief Executive Officer
NATHAN I. PARTAIN, CFA
Executive Vice President and Chief Investment Officer
T. BROOKS BEITTEL, CFA
Senior Vice President, Secretary and Treasurer
MICHAEL SCHATT
Senior Vice President
JOSEPH C. CURRY, JR.
Vice President
DIANNA P. WENGLER
Assistant Secretary
DUFF & PHELPS
UTILITIES INCOME INC.
Common stock listed on the New York Stock Exchange under the symbol DNP
55 East Monroe Street
Chicago, Illinois 60603
(800) 680-4367
(312) 368-5510
Investment Adviser
Duff & Phelps
Investment Management Co.
55 East Monroe Street
Chicago, Illinois 60603
Administrator
J.J.B. Hilliard, W.L. Lyons, Inc.
Hilliard Lyons Center
Louisville, Kentucky 40202
(502) 588-8400
Transfer Agent
Dividend Disbursing
Agent and Custodian
The Bank of New York
Shareholder Relations
Church Street Station
P.O. Box 11258
New York, New York 10286-1258
1-800-432-8224
Legal Counsel
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Independent Public Accountants
Arthur Andersen LLP
33 West Monroe Street
Chicago, Illinois 60603
11
<PAGE>
Duff & Phelps
Utilities Income Inc.
1ST
FIRST QUARTER
REPORT
MARCH 31, 1998
LOGO
