<PAGE>
Dear Fellow Shareholders:
Performance Review--We are pleased to report that the total return of the Fund
based on market value was 3.4% for the third quarter of 2000, increasing year-
to-date total return to 25.0%. By comparison, Lipper Analytical Services
reports that the universe of utility funds it monitors returned an average of
10.6% year-to-date. Your Fund, and utilities in general, have outperformed the
broad stock market averages year-to-date. For example, the Dow Jones
Industrial Index and S&P 500 Index had negative total returns year-to-date of
6.3% and 1.4%, respectively. Barring adverse surprises during the fourth
quarter, calendar 2000 could record one of the best performances ever for
utilities.
A composite of the S&P Utilities Index and Lehman Utility Bond Index,
reflecting the stock and bond ratio of the Fund, showed a total return of
41.4% year-to-date. The Fund was structurally unable to replicate the
favorable return shown by that index composite, largely due to the make up of
the S&P Utilities Index. In the first place, seven companies comprise 50% of
the index, a level of diversification not acceptable for your Fund. In the
second place, those companies performed very well during the period despite
relatively low income yields, whereas current income is the primary goal of
your Fund. In the third place, the index also has a concentration in gas
companies who benefited from the recent more than doubling in natural gas
prices. A final factor benefiting the index is that companies with higher
levels of business risk, as measured by an expanding portion of non-regulated
activities, enjoyed higher returns.
During the third quarter of 2000, your Fund paid three monthly 6.5 cent per
share dividends. The 6.5 cent per share monthly rate, without compounding,
would be 78 cents annualized, or an 8.00% common stock dividend yield based on
the September 29, 2000 closing price of $9.75 per share. That yield compares
favorably with the quarter-end yield of 3.25% on the Dow Jones Utility Index
and 2.96% on the S&P Utilities Index.
The long hot summer in California. The power markets in California gained
national attention this summer when hot weather brought sharply higher prices
to consumers, and led politicians and regulators to point fingers in every
direction. In one memorable scene, one of the primary authors of the state's
deregulation legislation, Senator Steve Peace, called on consumers to revolt
and not pay their utility bills. Unfortunately, the notion that competition
among electricity providers would result in lower prices to consumers has been
sullied by the California experience. The doubling and more of electricity
bills in southern California, along with the threat of blackouts and loss of
high quality energy to reliability sensitive high tech industries, has given
an ironic twist to the intended goal of utility competition. However, we
believe that a closer look at the situation in California reveals that it is a
unique experience. Many states are as far along in the deregulation process as
California but have also created effective consumer protections and strong
wholesale electric markets. The events in California have certainly slowed the
pace of deregulation in some states, but we do not believe they have stopped
it.
What went wrong in the state that likes to set trends? The law of supply and
demand is the first step in understanding the situation. While population and
economic growth have consistently increased the demand for electricity, there
has not been a matching increase in generating facilities. California only
produces 75% of the electricity demanded by its population, with the remainder
imported from neighboring states. Utilities have been reluctant to build new
generating facilities if they were unsure whether they would ever be able to
earn their investment back. Furthermore, rigorous siting and environmental
restrictions have made it difficult to build generating facilities in the
state. Finally, the infrastructure (transmission lines) designed to carry
electricity between states and regions has not enjoyed sufficient investment
and expansion for years.
<PAGE>
Mild summer temperatures for the past several years, along with abundant
hydroelectric conditions, helped mask this growing imbalance in supply and
demand. By contrast, this summer was marked by normal average temperatures,
along with several prolonged spikes in temperature. At the same time, the
price of natural gas (the fuel used for new generation in surrounding states)
more than doubled to reach all-time highs.
As described so far, the California problem is attributable to nature and
under-allocated state and corporate resources. However, the California
deregulatory legislation and Public Utility Commission regulations misjudged
electricity markets and exacerbated the problem. Under California's
deregulation plan, utilities were required to sell their non-nuclear
generating capacity and become, essentially, transmission and distribution
companies. They could acquire power only through a state clearing facility
called the Power Exchange. Utilities had no choice but take the price demanded
from suppliers. They were also heavily incentivized not to procure supply
ahead of time through "forward contracts," but to rely instead on "spot"
market transactions. Prices charged to consumers were frozen until utilities
had recovered their "stranded costs." A classic market squeeze had been
inadvertently set up.
San Diego Gas & Electric, which had quickly recovered its stranded costs, was
freed from its customer rate freeze and initially allowed to pass through the
high costs caused by supply and demand and nature. The other two major,
investor-owned California utilities, Pacific Gas & Electric and Southern
California Edison, had not recovered their stranded costs and got caught
between frozen consumer rates and skyrocketing power costs. Recent
legislation, through a price cap mechanism, has put San Diego Gas & Electric
into the same predicament. The result has been that the California utilities
have built up large deferred power costs which need to be recovered. Investors
have shunned these companies, since it is unclear how the costs will be
recovered and how the market and regulatory rules will be structured in the
future. Several proposals are circulating, and provisions have been made which
likely will allow companies to recover losses incurred during this misstep in
the competitive market. Responding to state pressure, the Federal Energy
Regulatory Commission has initiated a study of the power markets with a
special emphasis on California.
The California experience has shown the need for careful analysis of the
regulatory environment in which utilities operate and their strategies for
dealing with deregulation. But it has also highlighted the robust growth in
demand for electricity and emphasized electricity's growing role in the new
economy. It has also shown how some companies, such as the merchant
generators, have been able to thrive as the markets slowly become deregulated.
We do not expect that the California experience or energy price increases in
natural gas or oil will kill the deregulation movement. What we do expect is
that the process will be slowed in some states as other state legislatures and
congress move more gradually down the road to deregulation.
Board of Directors Meeting: At the regular October Board of Directors meeting,
the Board declared the following monthly dividend:
<TABLE>
<CAPTION>
Cents Per Share Record Date Payable Date
--------------- ----------- ------------
<S> <C> <C>
6.5 cents November 30 December 11
</TABLE>
The Board next meets in December, when it will establish the year-end
dividend, as well as the January and February dividends.
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
2
<PAGE>
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.
Those shareholders whose shares are held for them by a brokerage house or
nominee in "street-name" may not participate in the Fund's automatic dividend
reinvestment plan inasmuch as the Fund cannot communicate directly with those
shareholders since the Fund does not have their 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 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.
Visit us on the Web--You can obtain the most recent shareholder financial
report and dividend information at our web site http://www.duffutility.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.
/s/ Claire V. Hansen
Claire V. Hansen, CFA
Chairman, Chief Executive Officer and President
3
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS
(UNAUDITED)
September 30, 2000
COMMON STOCKS--75.9%
<TABLE>
<CAPTION>
Market
Value
Shares Company (Note 1)
------ ------- --------------
<C> <S> <C>
[_] ELECTRIC--42.0%
1,000,000 Allegheny Energy Inc.............................. $ 38,187,500
1,096,000 Dominion Resources................................ 63,636,500
1,265,000 DQE Incorporated.................................. 50,758,125
1,300,000 DTE Energy Co..................................... 49,725,000
1,300,000 Duke Energy Corp.................................. 111,475,000
2,658,400 Edison International.............................. 51,340,350
1,593,400 Endesa S.A........................................ 29,876,250
1,005,000 Entergy Corp...................................... 37,436,250
1,600,100 FPL Group Inc..................................... 105,206,575
1,000,000 Keyspan Corp...................................... 40,125,000
215,000 National Grid Group PLC ADR....................... 9,271,875
770,000 National Grid Group PLC (United Kingdom).......... 6,676,597
2,256,600 NiSource Inc...................................... 55,004,625
1,318,600 NSTAR............................................. 53,073,650
1,120,000 Pinnacle West Capital Corp........................ 56,980,000
1,500,000 Reliant Energy Inc................................ 69,750,000
850,000 Scottish & Southern Energy (United Kingdom)....... 6,936,724
200,000 Scottish & Southern Energy ADR.................... 16,322,660
1,600,000 Scottish Power PLC ADR............................ 48,100,000
1,182,600 Sierra Pacific Resources.......................... 21,286,800
1,500,000 Southern Co....................................... 48,656,250
1,800,000 Unicom Corp....................................... 101,137,500
1,000,000 Xcel Energy Inc................................... 27,500,000
--------------
1,098,463,231
[_] GAS--10.4%
926,000 AGL Resources..................................... 18,577,875
1,494,800 El Paso Energy Corp............................... 92,117,050
400,000 National Fuel Gas Co.............................. 22,425,000
594,700 NICOR Inc......................................... 21,520,706
2,050,000 Utilicorp United Inc.............................. 53,043,750
1,500,000 Williams Companies Inc............................ 63,375,000
--------------
271,059,381
</TABLE>
The accompanying note is an integral part of this financial statement.
4
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(Continued)
(UNAUDITED)
September 30, 2000
The accompanying note is an integral part of this financial statement.
<TABLE>
<CAPTION>
Market
Value
Shares Company (Note 1)
------ ------- --------------
<C> <S> <C>
[_] TELECOMMUNICATION--14.6%
1,000,000 Alltell Corp...................................... $ 52,187,500
1,530,000 BellSouth Corp.................................... 61,582,500
2,137,230 SBC Communications Inc............................ 106,861,500
700,000 Swisscom AG ADR................................... 17,237,500
900,000 Tele-Danmark A/S ADR.............................. 25,312,500
856,250 Telecom Corp. of New Zealand Interim ADR.......... 17,125,000
568,400 Telstra Corp. ADR................................. 9,236,500
500,000 Telstra Corp. ADR PP.............................. 3,937,500
1,819,000 Verizon Communications............................ 88,107,813
--------------
381,588,313
[_] NON-UTILITY--8.9%
80,000 Alexandria Real Estate Equities Inc............... 2,745,000
258,600 Apartment Investment & Management Co.............. 11,911,763
200,000 Avalon Bay Communities Inc........................ 9,537,500
409,000 Boston Properties Inc............................. 17,561,437
79,900 Camden Property Trust............................. 2,476,900
347,400 CBL & Associates Properties Inc................... 8,706,712
378,600 Centerpoint Properties Corporation................ 17,439,263
290,000 Chelsea GCA Realty Inc............................ 10,186,250
200,000 Developers Diversified Realty Corp................ 2,575,000
372,000 Duke-Weeks Realty Corp............................ 8,974,500
315,825 Equity Office Properties Trust.................... 9,810,314
200,000 Equity Residential Properties Trust............... 9,600,000
269,000 Essex Property Trust Inc.......................... 14,895,875
278,100 First Industrial Realty Trust..................... 8,551,575
250,000 General Growth Properties, Inc.................... 8,046,875
200,000 Kimco Realty Corp................................. 8,450,000
215,000 Macerich Co....................................... 4,568,750
95,000 Mack-Cali Realty Corp............................. 2,677,812
370,600 ProLogis Trust.................................... 8,801,750
525,100 Reckson Associates Realty Corp.................... 13,390,050
171,545 Reckson Associates Realty Corp. Class B........... 4,438,727
262,200 Smith Charles E. Residential Realty Inc........... 11,897,325
271,100 Spieker Properties Inc............................ 15,605,194
</TABLE>
5
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(Continued)
(UNAUDITED)
September 30, 2000
The accompanying note is an integral part of this financial statement.
<TABLE>
<CAPTION>
Market
Value
Shares Company (Note 1)
------ ------- --------------
<C> <S> <C>
100,000 Urban Shopping Centers Inc. ....................... $ 4,750,000
30,850 Vornado Operating Inc.* ........................... 175,459
465,800 Vornado Realty Trust .............................. 17,292,825
--------------
235,066,856
--------------
Total Common Stocks (Cost--$1,635,450,088) ........ 1,986,177,781
--------------
PREFERRED STOCKS--5.9%
[_] NON-UTILITY--1.0%
500,000 Cox Communications Inc. 7% 8/16/02................. 26,750,000
--------------
26,750,000
[_] UTILITY--4.9%
175,000 Coastal Corp. 6 5/8% 8/16/02....................... 7,284,375
700,000 Duke Capital Financing Trust III 8 3/8% 8/31/29 ... 17,587,500
223,500 EIX Trust II Series B 6.60% 10/29/29............... 5,154,469
550,000 MediaOne Group 7.00% 11/15/02...................... 20,487,500
500,000 NiSource Industries Inc. 7.75% 2/19/03 . .......... 24,000,000
209,000 P P & L Capital Trust II 8.10% 7/01/27............. 5,068,250
789,100 Texas Utilities Co. ............................... 36,841,106
450,900 Utilicorp United Inc. 9 3/4% 11/16/02 ............. 12,681,562
--------------
129,104,762
--------------
Total Preferred Stocks (Cost--$156,789,563) ....... 155,854,762
--------------
</TABLE>
BONDS--19.9%
<TABLE>
<CAPTION>
Ratings
--------------------------
Fitch
IBCA, Standard Market
Duff & and Value
Par Value Company Phelps Moody's Poor's (Note 1)
--------- ------- --------- ------- -------- ----------
<C> <S> <C> <C> <C> <C>
[_] ELECTRIC--10.8%
$ 5,000,000 AES Ironwood Corp.
8.857%, due 11/30/25....... Not Rated Baa3 BBB-- 4,865,725
23,101,000 Alabama Power Co.
9%, due 12/01/24........... AA-- A1 A+ 24,062,903
</TABLE>
6
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(Continued)
(UNAUDITED)
September 30, 2000
The accompanying note is an integral part of this financial statement.
<TABLE>
<CAPTION>
Ratings
--------------------------
Fitch
IBCA, Standard Market
Duff & and Value
Par Value Company Phelps Moody's Poor's (Note 1)
--------- ------- --------- ------- -------- ----------
<C> <S> <C> <C> <C> <C>
18,050,000 Comed Financing II
8 1/2%, due 1/15/27......... Not Rated Baa3 BBB-- 16,989,238
7,500,000 Commonwealth Edison Co.
9 7/8%, due 6/15/20......... A-- Baa1 BBB+ 8,192,752
8,850,000 Commonwealth Edison Co.
8 5/8%, due 2/01/22......... A-- Baa1 BBB+ 8,958,324
5,000,000 Commonwealth Edison Co.
8 3/8%, due 9/15/22......... A-- Baa1 BBB+ 5,032,955
10,000,000 Commonwealth Edison Co.
8 3/8%, due 2/15/23......... A-- Baa1 BBB+ 10,193,550
24,000,000 Dominion Resources Capital
Trust
7.83%, due 12/01/27......... Not Rated Baa1 BBB-- 21,405,744
5,000,000 Gulf States Utilities
8.94%, due 1/01/22.......... BBB Baa3 BBB-- 5,119,535
8,800,000 Hydro--Quebec
9 3/4%, due 1/15/18......... AA-- A2 A+ 9,220,534
5,000,000 Illinois Power Co.
7 1/2%, due 7/15/25......... A-- Baa1 BBB+ 4,665,210
5,000,000 Louisiana Power & Light Co.
8 3/4%, due 3/01/26......... BBB+ Baa2 BBB 5,052,775
15,000,000 New York State Electric & Gas
Corp.
9 7/8%, due 11/01/20........ A A3 A 15,666,450
4,000,000 New York State Electric & Gas
Corp.
8 7/8%, due 11/01/21........ A A3 A 4,043,984
27,580,000 Potomac Electric Power Co.
9%, due 6/01/21............. A+ A1 A 28,665,190
10,000,000 Public Service Co. of
Colorado
8 3/4%, due 3/01/22......... A A3 A 10,160,650
22,750,000 Puget Capital Trust
8.231%, due 6/01/27......... Not Rated Baa2 BBB-- 21,162,073
3,000,000 Rochester Gas & Electric
Corp.
9 3/8%, due 4/01/21......... A-- A3 A-- 3,116,682
13,000,000 Southern Co. Capital Trust
8.14%, due 2/15/27.......... Not Rated A3 BBB+ 11,854,505
27,830,000 Texas Utilities Electric Co.
9 3/4%, due 5/01/21......... A-- A3 BBB+ 29,700,371
12,000,000 UtiliCorp United Inc.
8%, due 3/01/23............. BBB Baa3 BBB 11,422,416
</TABLE>
7
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(Continued)
(UNAUDITED)
September 30, 2000
The accompanying note is an integral part of this financial statement.
<TABLE>
<CAPTION>
Ratings
--------------------------
Fitch
IBCA, Standard Market
Duff & and Value
Par Value Company Phelps Moody's Poor's (Note 1)
--------- ------- --------- ------- -------- -----------
<C> <S> <C> <C> <C> <C>
5,000,000 Virginia Electric & Power
Co.
8 5/8%, due 10/01/24..... A+ A2 A 5,052,650
17,700,000 Virginia Electric & Power
Co.
8 1/4%, due 3/01/25...... A+ A2 A 17,374,869
-----------
281,979,085
[_] GAS--2.3%
5,125,000 ANR Pipeline Co.
9 5/8%, due 11/01/21..... Not Rated Baa1 BBB+ 5,887,687
5,000,000 KN Energy Inc.
7 1/4%, due 3/01/28...... BBB-- Baa2 BBB-- 4,566,095
10,000,000 Phillips Petroleum Co.
9.18%, due 9/15/21....... BBB Baa2 BBB 10,507,580
5,000,000 Southern California Gas
Co.
8 3/4%, due 10/01/21..... AA A1 AA-- 5,176,225
6,488,000 Southern Union Co.
7.60%, due 2/01/24....... BBB+ Baa2 BBB+ 5,999,142
8,850,000 Southern Union Co.
8 1/4%, due 11/15/29..... BBB+ Baa2 BBB+ 8,742,021
10,000,000 TE Products Pipeline Co.
7.51%, due 1/15/28....... Not Rated Baa2 BBB+ 8,786,630
9,000,000 Trans-Canada Pipeline
9 1/8%, due 4/20/06...... Not Rated A3 BBB 9,676,530
-----------
59,341,910
[_] TELECOMMUNICATION--
5.0%
44,000,000 AT & T Corp.
8.35%, due 1/15/25....... AA-- A1 AA-- 43,963,656
12,000,000 GTE California Inc.
8.07%, due 4/15/24....... AA AA3 A+ 11,886,528
16,625,000 GTE Corp.
7.90%, due 2/01/27....... A+ A2 A+ 15,850,624
13,750,000 New England Telephone &
Telegraph
9%, due 8/01/31.......... AA Aa2 A+ 14,419,034
10,000,000 New York Telephone Co.
7 5/8%, due 2/01/23...... AA A1 A+ 9,431,700
</TABLE>
8
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(Continued)
(UNAUDITED)
September 30, 2000
The accompanying note is an integral part of this financial statement.
<TABLE>
<CAPTION>
Ratings
--------------------------
Fitch
IBCA, Standard Market
Duff & and Value
Par Value Company Phelps Moody's Poor's (Note 1)
--------- ------- --------- ------- -------- ------------
<C> <S> <C> <C> <C> <C>
20,740,000 New York Telephone Co.
9 3/8%, due 7/15/31.... AA A1 AA+ 21,810,765
9,000,000 Tele-Commun Inc.
9.80%, due 2/01/12..... AA-- A2 AA-- 10,310,103
5,000,000 US West Communications
8 7/8%, due 6/01/31.... A A2 BBB+ 5,036,940
------------
132,709,350
[_] NON-UTILITY--1.8%
17,500,000 Contl Cablevision
9 1/2%, due 8/01/13.... Not Rated A2 AA-- 19,564,142
8,000,000 Dayton Hudson Corp.
9 7/8%, due 7/01/20.... A A2 A-- 9,473,144
19,940,000 EOP Operating LP
7 1/2%, due 4/19/29.... BBB+ Baa1 BBB+ 17,553,003
------------
46,590,289
------------
Total Bonds (Cost--$549,224,830).................... 520,620,634
------------
U.S. TREASURY OBLIGATIONS--3.0%
66,000,000 U.S. Treasury Bonds
11 3/4%, due 2/15/01............................... 67,340,658
7,250,000 U.S. Treasury Notes
13 3/8%, due 8/15/01............................... 7,685,000
2,000,000 U.S. Treasury Bonds
10 3/4%, due 8/15/05............................... 2,401,876
------------
Total U.S. Treasury Obligations (Cost--
$89,017,734)....................................... 77,427,534
------------
COMMERCIAL PAPER--0.1%
20,000,000 Citigroup Inc.
6.55%, due 10/02/00................................ 14,997,271
------------
Total Commercial Paper (Amortized Cost
$14,997,271)....................................... 14,997,271
------------
CASH AND OTHER ASSETS LESS LIABILITIES--(5.3%)................. (138,670,116)
------------
</TABLE>
9
<PAGE>
DUFF & PHELPS UTILITIES INCOME INC.
STATEMENT OF NET ASSETS--(Continued)
(UNAUDITED)
September 30, 2000
<TABLE>
<CAPTION>
Market
Value
(Note 1)
--- --- --- --------------
<C> <S> <C> <C> <C> <C>
NET ASSETS
(equivalent to
$10.04 per share
of common stock
based on
210,719,260 shares
of common stock
outstanding,
authorized
250,000,000
shares, $0.001 par
value per share
and 5,000 shares
remarketed
preferred stock
outstanding,
authorized
100,000,000
shares,
liquidation
preference
$100,000 per
share, $0.001 par
value per share).. $2,616,407,866
==============
</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.
* Non income producing security.
--------
(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
CLAIRE V. HANSEN, CFA
FRANCIS E. JEFFRIES, CFA
NANCY LAMPTON
BERYL W. SPRINKEL
DAVID J. VITALE
Officers
CLAIRE V. HANSEN, CFA
Chairman, 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
(312) 368-5510
Shareholder inquiries please contact
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
(877) 381-2537
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
(888) 878-7845
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.
[LOGO] 3rd
Third Quarter
Report
September 30,
2000
