(ICON)
Global
Utility
Fund, Inc.
SEMI
ANNUAL
REPORT
March 31, 1997
(LOGO)
<PAGE>
Global Utility Fund, Inc.
Performance At A Glance.
The Global Utility Fund's Class A shares gained 10.6% for the six months ended
March 31, 1997, outperforming the Financial Times World Utilities Index and
the average utility fund tracked by Lipper Analytical Services. Your Fund
continued to benefit from its holdings in Spanish utilities, natural gas and
selected foreign telecommunication companies as well as its limited exposure
to Japanese utility stocks.
<TABLE>
<CAPTION>
Cumulative
Total
Returns1
As of 3/31/97
Six One Five Since
Months Year Years Inception2
<S> <C> <C> <C> <C>
Class A 10.6% 14.1% 86.4% 133.7%
Class B 10.2 13.2 79.4 93.4
Class C 10.2 13.2 N/A 33.0
Class Z N/A N/A N/A 4.3
FT World Utilities* 8.1 7.5 69.9 66.0
Lipper Utility Avg** 7.1 9.0 69.9 ***
</TABLE>
<TABLE>
<CAPTION>
Average
Annual Total
Returns1
As of 3/31/97
One Five Since
Year Years Inception2
<S> <C> <C> <C>
Class A 8.4% 12.1% 11.6%
Class B 8.2 12.3 11.5
Class C 12.2 N/A 11.3
</TABLE>
Past performance is not indicative of future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
1Source: Prudential Investments Fund Management, Lipper Analytical Services
and Wellington Management. The cumulative total returns do not take into
account sales charges. The average annual total returns do take into account
applicable sales charges. The Fund charges a maximum front-end sales charge of
5% for Class A shares. Class B shares are subject to a declining contingent
deferred sales charge (CDSC) of 5%, 4%, 3%, 2%, 1% and 1% for six years. Class
C shares have a 1% CDSC for one year. Class B shares will automatically convert
to Class A shares on a quarterly basis after approximately seven years. Class Z
shares are not subject to a sales charge or distribution fee. Since Class Z
shares have been in existence less than one year, no average annual total
returns are presented.
2Inception dates: 1/2/90 Class A; 3/18/91 Class B; 8/1/94 Class C; 12/16/96
Class Z. The Fund operated as a closed-end fund from its inception until
February 1, 1991.
* The Financial Times World Utilities Index is comprised of 177 world utility
stocks representing 24 countries.
** These are the average returns of 95 funds in the utility category for six
months; 91 funds for one year; and 22 funds for five years, as measured by
Lipper Analytical Services.
*** Lipper Since Inception returns were: Class A, 103.2% for 15 funds; Class B,
86.5% for 20 funds; Class C, 33.5% for 69 funds; and Class Z, -1.1% for 336
funds.
How Investments Compared.
(As of 3/31/97)
(GRAPH)
U.S. General General U.S.
Growth Bond Muni Debt Taxable
Funds Funds Funds Money Funds
Source: Lipper Analytical Services.
Financial markets change, so a mutual fund's past performance should never be
used to predict future results. The risks to each of the investments listed
above are different -- we provide 12-month total returns for several Lipper
mutual fund categories to show you that reaching for higher yields means
tolerating more risk. The greater the risk, the larger the potential reward or
loss. In addition, we've included historical 20-year average annual returns.
These returns assume the reinvestment of dividends.
U.S. Growth Funds will fluctuate a great deal. Investors have received higher
historical total returns from stocks than from most other investments. Smaller
capitalization stocks offer greater potential for long-term growth but may be
more volatile than larger capitalization stocks.
General Bond Funds provide more income than stock funds, which can help smooth
out their total returns year by year. But their prices still fluctuate
(sometimes significantly) and their returns have been historically lower than
those of stock funds.
General Municipal Debt Funds invest in bonds issued by state governments,
state agencies and/or municipalities. This investment provides income that is
usually exempt from federal and state income taxes.
Money Market Funds attempt to preserve a constant share value; they don't
fluctuate much in price but, historically, their returns have been generally
among the lowest of the major investment categories.
<PAGE>
William C. S. Hicks, Fund Manager
Portfolio
Manager's Report
(PHOTO)
The Global Utility Fund invests primarily in the stocks and bonds of utility
companies from around the world. The Fund seeks to provide total return,
without incurring undue risk, by investing primarily in income-producing
securities. There is no assurance that the Fund will be able to achieve its
investment objective. Investors should also keep in mind that there are
special risks associated with foreign investing, (such as currency fluctuations
and social, political and economic developments) and with investing in utility
securities.
Good Performers.
Two of the Fund's international wireless communication holdings -- Telecom
Italia Mobile and Vodafone Group PLC ADR (United Kingdom) -- reported
significant growth in telephone placements during the reporting period, which
resulted in superior stock market performances by each.
Strategy Session.
Telecom Demand Grows.
During the six-month reporting period, our strategy continued to focus on
telecommunications with 50% of equity investments in this sector on March 31,
1997.
Demand for global telecommuni-cations continued to grow at rates well above
average as international economies expanded. We especially liked the
international sector (55% of equity investments) because of its prospects for
higher growth. We added to the Fund's telecommuni-cation holdings in some of
the faster growing developing countries, such as India, where we purchased
VSNL -- Videsh Sanchar Nigam Ltd. We project above-average earnings gains from
countries like India where a rapidly growing middle class is creating demand
for telephones.
U.S. telecommunication companies (22% of equity investments) also attracted us
during the reporting period. We were quite positive about the prospects of
several of the regional bell companies. These "Baby Bells" feature well-managed
corporations and growth rates of about 5% to 6% per year. We believe such
companies have the opportunity to expand into new areas such as cellular
telecom, cable television, long distance services, security monitoring and
international telecom. Our favored companies included SBC Communications, US
West Communications and NYNEX Corp.
Strengthening demand for telecommunication services should also result in
strong markets for manufacturers of telephone equipment. Our holdings here
included Alcatel Alsthom and Lucent Technologies.
Portfolio Breakdown.
Expressed as a percentage of
equity assets as of 3/31/97.
(PIE CHART)
<PAGE>
What Went Well.
Notable Performers.
We held several foreign and U.S. telecommunication stocks, which performed
quite well during the reporting period, including:
- - Well-managed domestic operators such as GTE, Sprint, and MCI Communications,
which benefited from improved earnings and talk of the proposed MCI/British
Telecom merger.
- - Portugal Telecom ADS, STET (Italy), Telefonica de Espana ADR, and Telefonica
de Argentina ADR all showed solid gains for the six months ended March 31,
1997 as earnings expectations were above targets.
Foreign Electrics Do Well.
The slower-growing electric utility sector, approximately 29% of equity assets,
was subject to increased regulation during the reporting period. The Fund
emphasized those companies with growing operating territories, good
managements, and low-cost structures. Several of the Fund's international
electric holdings benefited from rising demand, such as Espoon Sahko ADS
(Finland), Huaneng Power International ADR (China), RWE AG (Germany), and
Scottish Power PLC (United Kingdom).
Five Largest Holdings.
3.2% SBC Communications
Telecommunications
2.8% Westcoast Energy
Natural Gas
2.8% STET
Telecommunications
2.6% Scottish Power PLC
Electric
2.5% MCI Communications
Telecommunications
Expressed as a percentage of total net assets as of 3/31/97.
And Not So Well.
AT&T's restructuring and management changes are taking longer than expected,
resulting in slower than anticipated earnings, although the company is
optimistic about its growth and cash flow prospects over the longer term.
Korea Electric Power ADR was affected by political uncertainties in the
region, and AirTouch Communications was under pressure because of concerns
about new competition in California, despite solid growth abroad.
Looking Ahead.
We predict the trend towards privatization, mergers and acquisitions will
continue in both the electric and telecommunication sectors. The Deutsche
Telekom ADR (Germany) $13 billion initial public offering (IPO), combined with
IPOs of CANTV of Venezuela and Singapore Telecommunications fueled the 1996
trend toward privatization, which generated double the proceeds of 1995 IPOs.
Merger activity was led by Bell Atlantic's proposed $21 billion merger with
NYNEX, the proposed MCI Communications and British Telecom merger, SBC
Communications $17 billion merger with Pacific Telesis and the US West Media
Group acquisition of Continental Cablevision. These major combinations
contributed to more than $110 billion in mergers.
For 1997, there are several other privatizations planned, including the
recently completed sale of Telefonica de Espana, and the upcoming sales of
STET (Italy), Telstra (Australia) and France Telecom. International mergers
and consolidations are likely to continue in the future and provide a dynamic
market for manufacturers of telecommuni-cations equipment. With global growth
continuing as a major investment theme, the international markets are likely
to remain more dynamic than the domestic sector.
- -------------------------------------------------------------------------------
1
<PAGE>
Portfolio of Investments as of
March 31, 1997 (Unaudited) GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
US$ Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--98.5%
COMMON STOCKS--74.3%
- ------------------------------------------------------------
Electrical Utilities--22.6%
175,000 CMS Energy Corp. $ 5,753,125
200,000 DPL, Inc. 4,825,000
187,500 DQE, Inc. 5,203,125
100,000 DTE Energy Co. 2,687,500
65,000 Empresa Nacional de Electricidad,
S.A. (ADR) (Spain) 4,216,875
190,000 Espoon Sahko (ADR) (Finland) 4,988,387
150,000 Huaneng Power International, Inc.*
(ADR) (China) 3,356,250
75,000 Korea Electric Power Corp. (ADR)
(Korea) 1,312,500
100,000 Pinnacle West Capital Corp. 3,012,500
140,000 Public Service Co. of Colorado 5,425,000
80,000 RWE AG (Germany) 3,570,744
1,300,000 Scottish Power PLC (United Kingdom) 7,548,456
280,000 Shandong Huaneng Power Co. Ltd.
(ADR) (China) 2,940,000
150,000 Texas Utilities Co. 5,137,500
120,000 VEBA AG (Germany) 6,794,964
-------------
66,771,926
- ------------------------------------------------------------
Gas Utilities--9.2%
500,000 Australian Gas Light Co. (Australia) 2,833,516
100,000 Burlington Resources, Inc. 4,275,000
120,000 Equitable Resources, Inc. 3,675,000
330,000 TransCanada Pipelines Ltd. (Canada) 6,007,600
470,000 Westcoast Energy, Inc. (Canada) 8,284,112
80,000 YPF Sociedad Anonima (ADR)
(Argentina) 2,120,000
-------------
27,195,228
Telecommunications--35.9%
106,300 AirTouch Communications, Inc.* $ 2,444,900
150,000 AT&T Corp. 5,212,500
153,200 BC Telecom, Inc. (Canada) 3,354,542
130,000 BCE, Inc. (Canada) 5,980,000
75,000 Comsat Corp. 1,828,125
46,700 Deutsche Telekom AG (ADR) (Germany) 1,021,563
43,000 Empresas Telex-Chile S.A. (ADR)
(Chile) 220,375
50,000 GTE Corp. 2,331,250
100,000 Hellenic Telecom, Inc. (Greece) 2,170,548
210,000 MCI Communications Corp. 7,468,125
369 Nippon Telegraph & Telephone Corp.
(Japan) 2,595,800
125,000 NYNEX Corp. 5,703,125
106,300 Pacific Telesis Group 4,012,825
87,600 Portugal Telecom, S.A. (ADS)
(Portugal) 3,219,300
100,000 Royal PTT Nederland NV (Netherlands) 3,704,296
180,000 SBC Communications Inc. 9,472,500
70,000 Sprint Corp. 3,185,000
2,300,000 STET-Societa Finanziaria Telefonica
P.A. (Italy) 8,163,070
130,000 Tele Danmark (ADR-Class B Shares)
(Denmark) 3,396,250
20,000 Telecom Corp. of New Zealand Ltd.
(ADR) (New Zealand) 1,420,000
900,000 Telecom Italia Mobile S.p.A. (Italy) 2,588,309
900,000 Telecom Italia S.p.A. (Italy) 2,250,000
40,000 Telefonica de Argentina S.A.
(ADR-Class B Shares) (Argentina) 1,175,000
70,000 Telefonica de Espana, S.A. (ADR)
(Spain) 5,022,500
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 2
<PAGE>
Portfolio of Investments as of
March 31, 1997 (Unaudited) GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
US$ Value
Shares Description (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Telecommunications (cont'd.)
110,000 Telefonos de Mexico, S.A. (ADR-Class
L Shares) (Mexico) $ 4,235,000
200,000 Videsh Sanchar Nigam Ltd. (GDR)
(India) 3,510,000
75,000 Vodafone Group PLC (ADR) (United
Kingdom) 3,309,375
200,000 US West Communications, Inc. 6,800,000
-------------
105,794,278
- ------------------------------------------------------------
Water Utilities & Other--6.6%
30,968 Alcatel Alsthom (France) 3,735,000
167,800 American Water Works Co., Inc. 3,523,800
400,000 Anglian Water PLC (United Kingdom) 4,185,283
70,000 Lucent Technologies, Inc. 3,692,500
2,300,000 Seat S.p.A. (Italy)* 514,880
200,000 US West Media Group* 3,725,000
-------------
19,376,463
Total common stocks
(cost $161,243,715) 219,137,895
------------------------------------------------------------
PREFERRED STOCKS--1.7%
Philippine Long Distance Telephone
Co., (The Philippines)
43,700 $3.50 Conv. Ser. III (GDS) 2,403,500
80,000 5.75% Conv. Ser. II (GDS) 2,760,000
-------------
Total preferred stocks (cost
$4,185,000) 5,163,500
-------------
- ------------------------------------------------------------
<CAPTION>
Principal
Moody's Amount
Rating (000)
<C> <C> <S> <C>
DEBT OBLIGATIONS--22.5%
CORPORATE BONDS--21.1%
- ------------------------------------------------------------
Electrical Utilities--13.8%
A1 $ 1,500 Alabama Power Co.,
6.375%, 8/1/99 1,485,090
Ba2 1,500 CalEnergy Co., Inc.,
9.50%, 9/15/06 1,545,000
Aa2 $ 1,750 Central Illinois Light Co.,
8.20%, 1/15/22 $ 1,741,145
Baa1 1,000D Chilgener, S.A.,
6.50%, 1/15/06 (Chile) 925,380
Aaa 2,000D Chubu Electric Power Co.
Inc., (Japan)
6.25%, 8/5/03 (Eurobonds) 1,923,750
A3 1,500 Cincinnati Gas & Elec. Co.,
5.80%, 2/15/99 1,474,665
A1 1,000 Consolidated Edison Co. of
NY, Inc.,
7.625%, 3/1/04 1,010,500
Aa2 2,000 Duke Power Co.,
5.875%, 6/1/01 1,909,380
Baa1 1,000D Eastern Energy Limited
6.75%, 12/1/06 (Australia) 945,450
Ba3 1,000 El Paso Electric Co.,
8.25%, 2/1/03, Ser. C 1,014,190
Baa1 1,000D Empresa Electric Pehuenche
S.A.,
7.30%, 5/1/03 (Chile) 984,230
Baa1 1,000D Empresa Electrica del Norte
Grande S.A.,
7.75%, 3/15/06 (Chile) 978,490
Baa1 1,000D Enersis S.A.,
7.40%, 12/1/16 (Chile) 934,950
Aa3 500 Florida Power Corp.,
6.00%, 7/1/03 470,285
A2 1,000 GTE Florida, Inc.,
7.25%, 10/15/25 910,420
Baa3 1,000 Gulf States Utilities Co.,
8.25%, 4/1/04 1,027,900
A2 1,000 Iowa-Illinois Gas & Elec.
Co.,
6.95%, 10/15/25 872,310
Baa2 1,000 Louisiana Power & Light Co.,
6.00%, 3/1/00 965,410
A1 1,500 Monongahela Power Co.,
7.375%, 7/1/02 1,500,045
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 3
<PAGE>
Portfolio of Investments as of
March 31, 1997 (Unaudited) GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Moody's Amount US$ Value
Rating (000) Description (Note 1)
<C> <C> <S> <C>
- ------------------------------------------------------------
Electrical Utilities (cont'd.)
A1 $ 1,000 Northern States Power Co.,
5.75%, 12/1/00 $ 954,460
Baa1 2,000 Philadelphia Electric Co.,
7.50%, 1/15/99 2,024,920
A1 2,000 Potomac Edison Co.,
8.875%, 8/1/21 2,123,380
A2 1,000D Quebec Hydro,
7.50%, 4/1/16 (Canada) 966,240
Aa2 2,000 Southwestern Elec. Power
Co.,
5.25%, 4/1/00 1,907,160
Aa2 1,000 Southwestern Public Serv.
Co.,
7.25%, 7/15/04 990,630
Baa3 1,000 System Energy Resources,
Inc.,
7.71%, 8/1/01 1,005,870
Aa2 1,000 Tampa Electric Co.,
7.75%, 11/1/22 965,140
Baa1 2,000 Texas Utilities Electric
Co.,
9.27%, 1/14/00 2,115,180
Ba3 1,000 Texas-New Mexico Power. Co.,
10.75%, 9/15/03 1,077,500
Aaa 2,000D Tokyo Electric Power,
6.125%, 7/29/03
(Eurobonds) (Japan) 1,925,000
A2 2,000 Virginia Electric & Power
Co.,
6.625%, 4/1/03 1,943,160
-------------
40,617,230
- ------------------------------------------------------------
Financial--0.7%
Baa2 1,000D CSW Investments,
7.45%, 8/1/06
(United Kingdom) 983,980
Baa1 $ 1,000D Southern Investments UK,
6.80%, 12/1/06
(United Kingdom) $ 948,960
-------------
1,932,940
- ------------------------------------------------------------
Gas Distribution & Other Industries--2.5%
Baa2 790 El Paso Natural Gas,
7.50%, 11/15/26 753,636
Baa2 1,000 Enron Corp.,
7.00%, 8/15/23 881,320
B1 1,000D Metrogas, S.A.,
10.875%, 5/15/01, Ser. B
(Argentina) 1,068,750
A2 1,600 Michigan Con. Gas Co.,
8.25%, 5/1/14 1,694,496
Northern Illinois Gas Co.,
Aa1 500 5.875%, 5/1/00 484,090
Aa1 1,000 7.26%, 10/15/25 890,920
A1 2,000 Southern California Gas Co.,
6.875%, 11/1/25 1,718,540
-------------
7,491,752
- ------------------------------------------------------------
Industrials--0.3%
NR 1,000D Comtel Brasileira Ltd.,
10.75%, 9/26/04 (Brazil) 1,037,500
- ------------------------------------------------------------
Telecommunications, Media & Related Industries--3.8%
Aaa 2,000 BellSouth
Telecommunications,
6.125%, 9/23/08
(Eurobonds) 1,831,250
A3 1,000 GTE Corporation,
8.75%, 11/1/21 1,108,750
A1 1,550 Pacific Bell,
8.70%, 6/15/01 1,638,412
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments as of
March 31, 1997 (Unaudited) GLOBAL UTILITY FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Moody's Amount US$ Value
Rating (000) Description (Note 1)
<C> <C> <S> <C>
- ------------------------------------------------------------
Telecommunications, Media & Related Industries (cont'd.)
Ba2 $ 1,000D Philippine Long Distance
Telephone Co.,
9.25%, 6/30/06
(The Philippines) $ 1,045,500
Aa3 1,000 Southwestern Bell Telephone
Co.,
5.875%, 6/1/03 930,240
Ba1 1,000 Tele-Communications, Inc.,
9.25%, 1/15/23 957,980
B1 1,500D Telecom Argentina, S.A.,
8.375%, 10/18/00
(Eurobonds) (Argentina) 1,500,000
B1 1,000D Telefonica de Argentina,
S.A.,
11.875%, 11/1/04
(Argentina) 1,130,000
Ba1 1,000 Worldcom Incorporated,
7.75%, 4/1/07 987,500
-------------
11,129,632
-------------
Total corporate bonds
(cost $63,879,044) 62,209,054
-------------
- ------------------------------------------------------------
CONVERTIBLE BONDS--0.7%
Baa2 500D Compania de Telefonos de
Chile, S.A.,
4.50%, 1/15/03 (Chile) 750,000
Caa 1,500 International Cabletel, Inc.,
7.25%, 4/15/05 1,492,500
-------------
Total convertible bonds
(cost $2,000,000) 2,242,500
-------------
- ------------------------------------------------------------
U.S. GOVERNMENT SECURITIES--0.7%
United States Treasury Notes,
$ 1,000 6.125%, 7/31/00 $ 984,060
1,000 7.50%, 11/15/01 1,028,280
-------------
Total U.S. Government Securities
(cost $2,128,281) 2,012,340
-------------
Total debt obligations
(cost $68,007,325) 66,463,894
-------------
Total long-term investments
(cost $233,436,040) 290,765,289
-------------
- ------------------------------------------------------------
SHORT-TERM INVESTMENTS--1.0%
REPURCHASE AGREEMENT--1.0%
2,944 Lanston (Aubrey) & Co. Inc., 6.35%,
dated 3/31/97, due 4/1/97 in the
amount of $2,944,519 (cost
$2,944,000; value of collateral
including accrued
interest-$3,007,759) 2,944,000
- ------------------------------------------------------------
Total Investments--99.5%
(cost $236,380,040; Note 4) 293,709,289
Other assets in excess of
liabilities--0.5% 1,394,918
-------------
Net Assets--100% $ 295,104,207
-------------
-------------
</TABLE>
- ---------------
*--Non-income producing security.
D--US$ Denominated Bonds.
ADR--American Depository Receipts.
ADS--American Depository Shares.
GDR--Global Depository Receipts.
GDS--Global Depository Shares.
NR--Not rated by Moody's or Standard & Poor's.
The Fund's current Statement of Additional Information contains a description
of Moody's ratings.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 5
<PAGE>
Statement of Assets and Liabilities
(Unaudited) GLOBAL UTILITY FUND, INC.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets March 31, 1997
<S> <C>
Investments, at value (cost $236,380,040).................................................................. $ 293,709,289
Foreign currency, at value (cost $13,239).................................................................. 12,229
Cash....................................................................................................... 73,397
Dividend and interest receivable........................................................................... 2,472,072
Receivable for investments sold............................................................................ 1,060,758
Receivable for Fund shares sold............................................................................ 99,746
Deferred expenses and other assets......................................................................... 6,371
--------------
Total assets............................................................................................ 297,433,862
--------------
Liabilities
Payable for investments purchased.......................................................................... 998,489
Payable for Fund shares reacquired......................................................................... 645,013
Accrued expenses........................................................................................... 399,069
Distribution fee payable................................................................................... 182,958
Withholding taxes payable.................................................................................. 52,908
Management fee payable..................................................................................... 51,218
--------------
Total liabilities....................................................................................... 2,329,655
--------------
Net Assets................................................................................................. $ 295,104,207
--------------
--------------
Net assets were comprised of:
Common stock, at par.................................................................................... $ 190,294
Paid-in capital in excess of par........................................................................ 227,504,556
--------------
227,694,850
Distributions in excess of net investment income........................................................ (235,648)
Accumulated net realized gains on investments and foreign currency transactions......................... 10,320,494
Net unrealized appreciation on investments and foreign currencies....................................... 57,324,511
--------------
Net assets, March 31, 1997................................................................................. $ 295,104,207
--------------
--------------
Class A:
Net asset value and redemption price per share
($113,807,948 / 7,338,341 shares of common stock issued and outstanding)............................. $15.51
Maximum sales charge (5.00% of offering price).......................................................... .82
Maximum offering price to public........................................................................ $16.33
--------------
--------------
Class B:
Net asset value, offering price and redemption price per share
($180,597,231 / 11,646,008 shares of common stock issued and outstanding)............................ $15.51
--------------
--------------
Class C:
Net asset value, offering price and redemption price per share
($686,278 / 44,253 shares of common stock issued and outstanding).................................... $15.51
--------------
--------------
Class Z:
Net asset value, offering price and redemption price per share
($12,750 / 821 shares of common stock issued and outstanding)........................................ $15.53
--------------
--------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 6
<PAGE>
GLOBAL UTILITY FUND, INC.
Statement of Operations (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
Net Investment Income March 31, 1997
<S> <C>
Income
Dividends (net of foreign withholding
taxes of $191,320)................. $ 3,384,046
Interest and discount earned.......... 2,675,428
------------------
Total income....................... 6,059,474
------------------
Expenses
Management fee........................ 1,026,842
Distribution fee--Class A............. 144,030
Distribution fee--Class B............. 947,347
Distribution fee--Class C............. 3,533
Transfer agent's fees and expenses.... 233,000
Custodian's fees and expenses......... 116,000
Reports to shareholders............... 45,000
Registration fees..................... 36,000
Audit fee............................. 17,000
Directors' fees and expenses.......... 15,000
Legal fees and expenses............... 15,000
Insurance............................. 4,000
Miscellaneous......................... 5,136
------------------
Total expenses..................... 2,607,888
------------------
Net investment income.................... 3,451,586
------------------
Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency
Transactions
Net realized gain on:
Investment transactions............... 11,045,603
Foreign currency transactions......... 5,331
------------------
11,050,934
------------------
Net change in unrealized appreciation
(depreciation) on:
Investments........................... 15,876,489
Foreign currencies.................... (9,220)
------------------
15,867,269
------------------
Net gain on investments and foreign
currencies............................ 26,918,203
------------------
Net Increase in Net Assets
Resulting from Operations................ $ 30,369,789
------------------
------------------
</TABLE>
GLOBAL UTILITY FUND, INC.
Statement of Changes in Net Assets (Unaudited)
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Ended
Ended September
Increase (Decrease) March 31, 30,
in Net Assets 1997 1996
<S> <C> <C>
Operations
Net investment income.......... $ 3,451,586 $ 9,586,911
Net realized gain on investment
and foreign currency
transactions................ 11,050,934 18,126,265
Net change in unrealized
appreciation of investments
and foreign currencies...... 15,867,269 (1,176,880)
------------ ------------
Net increase in net assets
resulting from operations... 30,369,789 26,536,296
------------ ------------
Dividends and distributions (Note
1)
Dividends from net investment
income
Class A..................... (1,530,299) (4,066,553)
Class B..................... (1,914,005) (5,504,314)
Class C..................... (7,255) (16,044)
Class Z..................... (27) --
------------ ------------
(3,451,586) (9,586,911)
------------ ------------
Distributions in excess of net
investment income
Class A..................... (321,908) (8,056)
Class B..................... (402,624) (10,902)
Class C..................... (1,526) (32)
Class Z..................... (6) --
------------ ------------
(726,064) (18,990)
------------ ------------
Distributions from net realized
gains
Class A..................... (6,006,753) (3,456,002)
Class B..................... (9,768,904) (6,126,168)
Class C..................... (37,783) (16,333)
------------ ------------
(15,813,440) (9,598,503)
------------ ------------
Fund share transactions (net of
share conversions) (Note 5)
Net proceeds form shares
sold........................ 29,069,071 28,413,113
Net asset value of shares
issued in reinvestment of
dividends and
distributions............... 16,423,378 15,648,910
Cost of shares reacquired...... (61,785,084) (102,550,920)
------------ ------------
Net decrease in net assets from
Fund share transactions........ (16,292,635) (58,488,897)
------------ ------------
Total decrease.................... (5,913,936) (51,157,005)
Net Assets
Beginning of period............... 301,018,143 352,175,148
------------ ------------
End of period..................... $295,104,207 $301,018,143
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 7
<PAGE>
Notes to Financial Statements (Unaudited) GLOBAL UTILITY FUND, INC.
- --------------------------------------------------------------------------------
Global Utility Fund, Inc. (the 'Fund') is an open-end diversified management
investment company. The Fund was organized in Maryland on November 18, 1988 as a
closed-end, diversified management investment company and on December 15, 1989,
sold 9,000 shares of common stock for $100,440 to Wellington Management Company,
LLP ('Wellington'). Investment operations commenced on January 2, 1990. On
February 1, 1991, the Fund concluded operations as a closed-end investment
company and subsequently commenced operations as an open-end, diversified
management investment company.
The Fund seeks to achieve its investment objective of obtaining a high total
return, without incurring undue risk, by investing primarily in common stocks,
debt securities and preferred stocks of domestic and foreign companies in the
utility industries. Debt securities in which the Fund invests are generally
within the four highest ratings categories by a nationally recognized
statistical rating organization or, if not rated, are of comparable quality. The
ability of the issuers of the debt securities held by the Fund to meet their
obligations may be affected by economic developments in a specific country or
industry.
- ------------------------------------------------------------
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation: In valuing the Fund's assets, quotations of foreign
securities in a foreign currency are converted to U.S. dollar equivalents at the
then current exchange rate. Any security for which the primary market is on an
exchange is valued at the last sale price on such exchange on the day of
valuation or, if there was no sale on such day, the last bid price quoted on
such day. Portfolio securities that are actively traded in the over-the-counter
market, including listed securities for which the primary market is believed to
be over-the-counter, are valued at the mean between the most recently quoted bid
and asked prices provided by an independent pricing service or by principal
market makers. Securities for which market quotations are not readily available
are valued at fair value as determined in good faith by or under the direction
of the Board of Directors of the Fund.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian takes possession of the
underlying collateral securities, the value of which exceeds the principal
amount of the repurchase transaction including accrued interest. If the seller
defaults and the value of the collateral declines or if bankruptcy proceedings
are commenced with respect to the seller of the security, realization of the
collateral by the Fund may be delayed or limited.
Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and liabilities--at the
closing rates of exchange.
(ii) purchases and sales of investment securities, income and expenses--at the
rates of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates
and market values at the close of the fiscal period, the Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the fluctuations arising from changes in the market
prices of the securities held at fiscal period end. Similarly, the Fund does not
isolate the effect of changes in foreign exchange rates from the fluctuations
arising from changes in the market prices of long-term securities sold during
the fiscal period. Accordingly, realized foreign currency gains (losses) are
included in the reported net realized gain on investment transactions.
The Fund recognizes foreign currency gains and losses from the holding of
foreign currencies, the sales and maturities of short-term securities and
forward currency contracts, and the difference between the amounts of dividends,
interest and foreign taxes recorded on the Fund's books and the U.S. dollar
equivalent of amounts actually received or paid.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of domestic origin as a result of,
among other factors, the possibility of political and economic instability and
the level of governmental supervision and regulation of foreign securities
markets.
Forward Currency Contracts: A forward currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current
- --------------------------------------------------------------------------------
8
<PAGE>
Notes to Financial Statements (Unaudited) GLOBAL UTILITY FUND, INC.
- -------------------------------------------------------------------------------
exchange rates and any unrealized gain or loss is included in net unrealized
appreciation or depreciation on investments. Gain or loss is realized on the
settlement date of the contract equal to the difference between the settlement
value of the original and renegotiated forward contracts. This gain or loss, if
any, is included in net realized gain (loss) on foreign currency transactions.
Risks may arise upon entering into these contracts from the potential inability
of the counterparties to meet the terms of their contracts.
Securities Transactions and Net Investment Income: Security transactions are
recorded on the trade date. Realized gains and losses from security and currency
transactions are calculated on the identified cost basis. Interest income is
recorded on the accrual basis and dividend income is recorded on the ex-dividend
date. Expenses are recorded on the accrual basis which may require the use of
certain estimates by management.
Net investment income (other than distribution fees) and unrealized and realized
gains or losses are allocated daily to each class of shares based upon the
relative proportion of net assets of each class at the beginning of the day.
Federal Income Taxes: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to shareholders.
Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends and interest are provided in accordance
with the Fund's understanding of the applicable country's tax rules and rates.
Dividends and Distributions: Dividends from net investment income are declared
and paid quarterly. The Fund will distribute at least annually any net capital
gains in excess of loss carryforwards. Dividends and distributions 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 for wash
sales and foreign currency transactions.
Reclassification of Capital Accounts: The Fund accounts for and reports
distributions to shareholders in accordance with American Institute of Certified
Public Accountants (AICPA) Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain, and
Return of Capital Distributions by Investment Companies. The effect of applying
this statement was to increase undistributed net investment income and decrease
accumulated net realized gains on investments by $142,749 relating to net
realized foreign currency gains. Net investment income, net realized gains and
net assets were not affected by this change.
- ------------------------------------------------------------
Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PIFM has entered into a subadvisory agreement with Wellington;
Wellington furnishes investment advisory services in connection with the
management of the Fund. PIFM pays for the cost of the subadviser's services, the
compensation of officers of the Fund, occupancy and certain clerical and
bookkeeping costs of the Fund. The Fund bears all other costs and expenses.
The management fee paid PIFM is computed daily and payable monthly at an annual
rate of .70% of the Fund's average daily net assets up to and including $250
million, .55% of the Fund's average daily net assets of the next $250 million,
.50% of the Fund's average daily net assets of the next $500 million and .45% of
the Fund's average daily net assets in excess of $1 billion. Pursuant to the
subadvisory agreement, PIFM compensates Wellington for its services at an annual
rate of .50% of the Fund's average daily net assets up to and including $250
million, .35% of the Fund's average daily net assets of the next $250 million,
.30% of the Fund's average daily net assets of the next $500 million and .25% of
the Fund's average daily net assets in excess of $1 billion.
The Fund has a distribution agreement with Prudential Securities Incorporated
('PSI'), which acts as the distributor of the Class A, Class B, Class C and Z
shares of the Fund. The Fund compensates PSI for distributing and servicing the
Fund's Class A, Class B and Class C shares, pursuant to plans of distribution
(the 'Class A, Class B and Class C Plans), regardless of expenses actually
incurred by them. The distribution fees are accrued daily and payable monthly.
No distributions or service fees are paid to PSI as distributor of the Class Z
shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensates PSI with respect to
Class A shares, for distribution-related activities at an annual rate of up to
.30 of 1%, 1% and 1%, of the average daily net assets of the Class A, B and C
shares, respectively. Such expenses under the Plans were .25 of 1%, 1% and 1%,
of the average daily net assets of the Class A, B and C shares, respectively,
for six months ended March 31, 1997.
PSI has advised the Fund that it has received approximately $26,500 in front-end
sales charges resulting from sales of Class A shares during the
- --------------------------------------------------------------------------------
9
<PAGE>
Notes to Financial Statements (Unaudited) GLOBAL UTILITY FUND, INC.
- --------------------------------------------------------------------------------
six months ended March 31, 1997. From these fees, PSI paid such sales charges to
affiliated broker-dealers which in turn paid commissions to salespersons and
incurred other distribution costs.
PSI has advised the Fund that for the six months ended March 31, 1997, it
received approximately $229,400 and $100 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
PSI, PIFM and PIC are indirect, wholly-owned subsidiaries of The Prudential
Insurance Company of America.
- ------------------------------------------------------------
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services, Inc. LLC ('PMFS'), a wholly-owned subsidiary of
PIFM, serves as the Fund's transfer agent and during the six months ended March
31, 1997, the Fund incurred fees of approximately $241,300 for the services of
PMFS. As of March 31, 1997, approximately $33,800 of such fees were due to PMFS.
Transfer agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to non-affiliates.
- ------------------------------------------------------------
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the six months ended March 31, 1997 were $16,849,811 and $46,457,743,
respectively.
The United States federal income tax basis of the Fund's investments at March
31, 1997 was $236,406,747 and accordingly, net unrealized appreciation of
investments was $57,302,542 (gross unrealized appreciation--$64,725,384; gross
unrealized depreciation--$7,422,842).
- ------------------------------------------------------------
Note 5. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with an initial sales charge of up to 5.00%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending upon
the period of time the shares are held. Class C shares are sold with a
contingent deferred sales charge of 1% during the first year. Class B shares
will automatically convert to Class A shares on a quarterly basis approximately
seven years after purchase. A special exchange privilege is also available for
shareholders who qualify to purchase Class A shares at net asset value.
Effective December 16, 1996 the Fund commenced offering Class Z shares. Class Z
shares are not subject to any sales or redemption charge and are offered
exclusively for sale to a limited group of investors.
The Fund has authorized 2 billion shares of common stock at $.001 par value per
share equally divided into Class A, B, C and Z shares. Of the 19,029,423 shares
of common stock issued and outstanding at March 31, 1997, Wellington owned 9,000
Class A shares.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ----------------------------------- ---------- ------------
<S> <C> <C>
Six months ended March 31, 1997:
Shares sold........................ 1,585,936 $ 24,810,070
Shares issued in reinvestment of
dividends and distributions...... 357,741 5,409,981
Shares reacquired.................. (2,329,775) (36,509,016)
---------- ------------
Net decrease in shares outstanding
before conversion................ (386,098) (6,288,965)
Shares issued upon conversion from
Class B.......................... 219,486 3,477,057
---------- ------------
Net decrease in shares
outstanding...................... (166,612) $ (2,811,908)
---------- ------------
---------- ------------
Year ended September 30, 1996:
Shares sold........................ 1,266,739 $ 18,863,411
Shares issued in reinvestment of
dividends and distributions...... 339,649 5,017,345
Shares reacquired.................. (2,883,880) (43,010,724)
---------- ------------
Net decrease in shares outstanding
before conversion................ (1,277,492) (19,129,968)
Shares issued upon conversion from
Class B.......................... 327,144 4,874,396
---------- ------------
Net decrease in shares
outstanding...................... (950,348) $(14,255,572)
---------- ------------
---------- ------------
Class B
- -----------------------------------
Six months ended March 31, 1997:
Shares sold........................ 258,860 $ 4,104,703
Shares issued in reinvestment of
dividends and distributions...... 726,519 10,967,193
Shares reacquired.................. (1,598,600) (25,090,658)
---------- ------------
Net decrease in shares outstanding
before conversion................ (613,221) (10,018,762)
Shares reacquired upon conversion
into Class A..................... (219,614) (3,477,057)
---------- ------------
Net decrease in shares
outstanding...................... (832,835) $(13,495,819)
---------- ------------
---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE>
Notes to Financial Statements (Unaudited) GLOBAL UTILITY FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Shares Amount
- ----------------------------------- ---------- ------------
Year ended September 30, 1996:
<S> <C> <C>
Shares sold........................ 623,845 $ 9,314,099
Shares issued in reinvestment of
dividends and distributions...... 718,862 10,600,234
Shares reacquired.................. (3,977,624) (59,359,780)
---------- ------------
Net decrease in shares outstanding
before conversion................ (2,634,917) (39,445,447)
Shares reacquired upon conversion
into Class A..................... (327,061) (4,874,396)
---------- ------------
Net decrease in shares
outstanding...................... (2,961,978) $(44,319,843)
---------- ------------
---------- ------------
Class C
- -----------------------------------
Six months ended March 31, 1997:
Shares sold........................ 7,196 $ 112,578
Shares issued in reinvestment of
dividends and distributions...... 3,051 46,063
Shares reacquired.................. (9,976) (156,544)
---------- ------------
Net increase in shares
outstanding...................... 271 $ 2,097
---------- ------------
---------- ------------
<CAPTION>
Class C Shares Amount
- ----------------------------------- ---------- ------------
<S> <C> <C>
Year ended September 30, 1996:
Shares sold........................ 15,751 $ 235,603
Shares issued in reinvestment of
dividends and distributions...... 2,124 31,331
Shares reacquired.................. (12,124) (180,416)
---------- ------------
Net increase in shares
outstanding...................... 5,751 $ 86,518
---------- ------------
---------- ------------
Class Z
- -----------------------------------
December 16, 1996(a) through
March 31, 1997:
Shares sold........................ 2,635 $ 41,720
Shares issued in reinvestment of
dividends and distributions...... 9 141
Shares reacquired.................. (1,823) (28,866)
---------- ------------
Net increase in shares
outstanding...................... 821 $ 12,995
---------- ------------
---------- ------------
</TABLE>
- ---------------
(a) Commencement of offering of Class Z shares.
Supplemental Proxy Information GLOBAL UTILITY FUND, INC.
- -------------------------------------------------------------------------------
The annual meeting of shareholders of Global Utility Fund, Inc. was held on
October 30, 1996 at the offices of Prudential Securities Incorporated, One
Seaport Plaza, New York, New York. The meeting was held for the following
purposes:
(1) To elect the following directors to serve as follows: Eugene C.
Dorsey, Douglas H. McCorkindale, Thomas T. Mooney and Richard A.
Redeker.
(2) To ratify the selection of Deloitte & Touche LLP as independent
public accountants for the year ending September 30, 1997.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
Director/Auditor Votes for Votes against Votes withheld
--------------------------------- ---------- -------------- ---------------
<C> <S> <C> <C> <C>
(1) Eugene C. Dorsey 9,945,953 -- 376,806
Douglas H. McCorkindale 9,956,617 -- 364,142
Thomas T. Mooney 9,957,011 -- 365,748
Richard A. Redeker 9,957,048 -- 365,711
(2) Deloitte & Touche LLP 9,842,157 115,930 --
</TABLE>
- --------------------------------------------------------------------------------
11
<PAGE>
Financial Highlights (Unaudited) GLOBAL UTILITY FUND, INC.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------------------
Six Months
Ended Year Ended September 30,
March 31, ------------------------------------------------------------
1997 1996 1995 1994 1993 1992
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....... $ 15.03 $ 14.72 $ 13.66 $ 14.63 $ 12.96 $ 12.62
---------- -------- -------- -------- -------- --------
Income from investment operations
Net investment income...................... .21 .51 .49 .47 .44 .53
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................ 1.36 .73 1.35 (.82) 2.46 1.01
---------- -------- -------- -------- -------- --------
Total from investment operations........ 1.57 1.24 1.84 (.35) 2.90 1.54
---------- -------- -------- -------- -------- --------
Less distributions
Dividends from net investment income....... (.21) (.51) (.48) (.42) (.47) (.53)
Distributions in excess of net investment
income.................................. (.05) -- -- -- (.01) --
Distributions from net realized gains...... (.83) (.42) (.30) (.20) (.75) (.67)
---------- -------- -------- -------- -------- --------
Total distributions..................... (1.09) (.93) (.78) (.62) (1.23) (1.20)
---------- -------- -------- -------- -------- --------
Net asset value, end of period............. $ 15.51 $ 15.03 $ 14.72 $ 13.66 $ 14.63 $ 12.96
---------- -------- -------- -------- -------- --------
---------- -------- -------- -------- -------- --------
TOTAL RETURN(a)............................ 10.65% 8.65% 14.23% (2.49)% 23.87% 13.15%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............ $113,808 $112,800 $124,423 $126,254 $138,714 $114,654
Average net assets (000)................... $115,540 $120,122 $122,837 $139,166 $119,001 $120,708
Ratios to average net assets:
Expenses, including distribution fees... 1.24%(b) 1.30% 1.31% 1.25% 1.30% 1.39%
Expenses, excluding distribution fees... .99%(b) 1.05% 1.06% 1.02% 1.10% 1.19%
Net investment income................... 2.73%(b) 3.38% 3.58% 3.39% 3.37% 4.16%
For Class A, B, C and Z shares:
Portfolio turnover rate................. 11% 13% 15% 19% 14% 57%
Average commission rate paid per
share................................ $ 0.0426 $ 0.0542 -- -- -- --
</TABLE>
- ---------------
(a) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods of less then a full year are not
annualized.
(b) Annualized.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 12
<PAGE>
Financial Highlights (Unaudited) GLOBAL UTILITY FUND, INC.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
--------------------------------------------------------------------------
Six Months
Ended Year Ended September 30,
March 31, -----------------------------------------------------------
1997 1996 1995 1994 1993 1992
---------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....... $ 15.03 $ 14.71 $ 13.66 $ 14.63 $ 12.97 $ 12.63
---------- -------- -------- -------- -------- -------
Income from investment operations
Net investment income...................... .17 .40 .39 .37 .34 .43
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................ 1.34 .74 1.34 (.82) 2.45 1.01
---------- -------- -------- -------- -------- -------
Total from investment operations........ 1.51 1.14 1.73 (.45) 2.79 1.44
---------- -------- -------- -------- -------- -------
Less distributions
Dividends from net investment income....... (.17) (.40) (.38) (.32) (.37) (.43)
Distributions in excess of net investment
income.................................. (.03) -- -- -- (.01) --
Distributions from net realized gains...... (.83) (.42) (.30) (.20) (.75) (.67)
---------- -------- -------- -------- -------- -------
Total distributions..................... (1.03) (.82) (.68) (.52) (1.13) (1.10)
---------- -------- -------- -------- -------- -------
Net asset value, end of period............. $ 15.51 $ 15.03 $ 14.71 $ 13.66 $ 14.63 $ 12.97
---------- -------- -------- -------- -------- -------
---------- -------- -------- -------- -------- -------
TOTAL RETURN(a)............................ 10.24% 7.90% 13.32% (3.22)% 22.87% 12.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............ $180,597 $187,557 $227,189 $272,673 $185,259 $60,432
Average net assets (000)................... $189,990 $210,305 $237,983 $270,466 $ 90,254 $45,661
Ratios to average net assets:
Expenses, including distribution fees... 1.99%(b) 2.05% 2.06% 2.02% 2.10% 2.19%
Expenses, excluding distribution fees... .99%(b) 1.05% 1.06% 1.02% 1.10% 1.19%
Net investment income................... 1.98%(b) 2.62% 2.83% 2.68% 2.59% 3.34%
</TABLE>
- ---------------
(a) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total return for periods of less than a full year are not
annualized.
(b) Annualized.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 13
<PAGE>
Financial Highlights (Unaudited) GLOBAL UTILITY FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C Class Z
------------------------------------------------------ ------------
August 1, December 16,
Six Months Year Ended September 1994(c) 1996(d)
Ended 30, through through
March 31, --------------------- September 30, March 31,
1997 1996 1995 1994 1994
---------- -------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....... $ 15.03 $ 14.71 $ 13.66 $ 13.93 $15.02
---------- -------- -------- ------------- -----
Income from investment operations
Net investment income...................... .17 .40 .39 .06 .12
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions............................ 1.34 .74 1.34 (.24) .53
---------- -------- -------- ------------- -----
Total from investment operations........ 1.51 1.14 1.73 (.18) .65
---------- -------- -------- ------------- -----
Less distributions
Dividends from net investment income....... (.17) (.40) (.38) (.07) (.12)
Distributions in excess of net investment
income.................................. (.03) -- -- -- (.02)
Distributions from net realized gains...... (.83) (.42) (.30) (.02) --
---------- -------- -------- ------------- -----
Total distributions..................... (1.03) (.82) (.68) (.09) (.14)
---------- -------- -------- ------------- -----
Net asset value, end of period............. $ 15.51 $ 15.03 $ 14.71 $ 13.66 $15.53
---------- -------- -------- ------------- -----
---------- -------- -------- ------------- -----
TOTAL RETURN(a)............................ 10.24% 7.90% 13.32% (1.32)% 4.27%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............ $ 686 $ 661 $ 563 $ 226 $ 13
Average net assets (000)................... $ 709 $ 608 $ 410 $ 131 $ 4
Ratios to average net assets:
Expenses, including distribution fees... 1.99%(b) 2.05% 2.06% 2.06%(b) 1.02%(b)
Expenses, excluding distribution fees... .99%(b) 1.05% 1.06% 1.06%(b) 1.02%(b)
Net investment income................... 1.98%(b) 2.66% 2.83% 2.46%(b) 3.26%(b)
</TABLE>
- ---------------
(a) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total return for periods of less than a full year are not
annualized.
(b) Annualized.
(c) Commencement of offering of Class C shares.
(d) Commencement of offering of Class Z shares.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 14
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
http://www.prudential.com
Directors
Eugene C. Dorsey
Douglas H. McCorkindale
Thomas T. Mooney
Richard A. Redeker
Officers
Richard A. Redeker, President
Susan C. Cote, Vice President
Thomas A. Early, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Deborah Ann Garfield, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
Wellington Management Company, LLP
75 State Street
Boston, MA 02109
Distributor
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906
Independent Auditors
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Ave, N.W.
Washington, DC 20036
The views expressed in this report and information about the Fund's portfolio
holdings are for the period covered by this report and are subject to change
thereafter.
The accompanying financial statements as of March 31, 1997 were not audited
and, accordingly, no opinion is expressed on them.
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
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Prudential Mutual Funds
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