<PAGE>
ANNUAL REPORT SEPTEMBER 30, 2000
Global Utility Fund, Inc.
Fund Type Global stock
(GRAPHIC)
Objective Total return
This report is not authorized for distribution to
prospective investors unless preceded or
accompanied by a current prospectus.
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.
(LOGO)
<PAGE>
Build on the Rock
Investment Goals and Style
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 can be no assurance
that the Fund will 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.
Geographic Concentration
Expressed as a percentage of
net assets as of 9/30/00
69.8% United States
5.7 Canada
4.3 United Kingdom
2.3 Mexico
1.8 Spain
1.7 Korea
1.7 Australia
1.4 Japan
1.3 Finland
1.3 China
1.2 Brazil
1.1 France
1.0 Italy
1.0 Greece
0.9 Chile
0.9 Netherlands
0.8 Poland
0.8 India
0.7 Denmark
0.4 The Philippines
0.4 New Zealand
0.2 Argentina
-0.7 Liabilities in excess
Five Largest Holdings
Expressed as a percentage of
net assets as of 9/30/00
3.9% Unicom Corp.
Electrical Utilities
3.9 Calpine Corp.
Electrical Utilities
3.6 El Paso Energy Corp.
Gas Utilities
3.5 SBC Communications, Inc.
Telecommunications
3.1 FPL Group, Inc.
Electrical Utilities
Holdings are subject to change.
Portfolio Composition
Sectors expressed as a percentage of
net assets as of 9/30/00
39.9% Telecommunications
39.1 Electric Utilities
15.4 Gas Utilities
2.6 Water Utilities & Other
3.0 Cash & Equivalents
<PAGE>
www.prudential.com (800) 225-1852
Performance at a Glance
Cumulative Total Returns1 As of 9/30/00
<TABLE>
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A 0.27% 80.08% 258.51% 250.01%
Class B -0.42 73.63 N/A 182.31
Class C -0.42 73.63 N/A 94.15
Class Z 0.56 N/A N/A 57.54
FT/S&P Actuaries
World Utilities Index 3 1.70 111.60 308.62 **
Lipper Utility Fund Avg.4 22.65 124.99 312.03 ***
</TABLE>
Average Annual Total Returns1 As of 9/30/00
<TABLE>
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A -4.74% 11.34% 13.04% 11.83%
Class B -5.40 11.54 N/A 11.49
Class C -2.40 11.44 N/A 11.18
Class Z 0.56 N/A N/A 12.74
</TABLE>
Past performance is not indicative of future
results. Principal and investment return 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
LLC and Lipper Inc. 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, and a declining contingent deferred sales
charge (CDSC) of 5%, 4%, 3%, 2%, 1%, and 1% for six
years for Class B shares. Class B shares will
automatically convert to Class A shares, on a
quarterly basis, approximately seven years after
purchase. Class C shares are subject to a front-end
sales charge of 1% and a CDSC of 1% for 18 months.
Class Z shares are not subject to a sales charge or
distribution and service (12b-1) fees.
2Inception dates: Class A, 1/2/90; Class B,
3/18/91; Class C, 8/1/94; and Class Z, 12/16/96.
The Fund operated as a closed-end fund from its
inception until February 1, 1991.
3Source: Goldman, Sachs & Co. The Financial Times
(FT) World Utilities (all equity) Index currently
comprises approximately 191 world utility stocks
representing approximately 32 countries. Investors
cannot invest directly in an index.
4Lipper average returns are for all funds in each
share class for the one-, five-, and ten-year
periods in the Utility Fund category. Utility funds
invest 65% of their equity portfolios in utility
shares. The Lipper average is unmanaged.
**The FT World Utilities (all equity) Index Since
Inception returns are 243.16% for Class A, 243.13%
for Class B, 134.01% for Class C, and 88.13% for
Class Z.
***Lipper Since Inception returns are 275.07% for
Class A, 254.38% for Class B, 167.17% for Class C,
and 90.06% for Class Z, based on all funds in each
share class. The Lipper Since Inception returns
begin at the closest month end for each share
class.
1
<PAGE>
Global Utility Fund, Inc.
Annual Report September 30, 2000
INVESTMENT ADVISER'S REPORT
Global Utility Fund's Class A shares gained 0.27%
for the 12 months ended September 30, 2000,
compared with the 22.65% increase in the Lipper
Utility Average and a 1.70% decline in the all-
equity benchmark Financial Times World Utilities
Index. The Fund's global focus and high fixed-
income exposure relative to many of its competitors
and the index detracted from recent performance,
but we remain confident that these unique features
of the Fund may benefit investors in the long run.
STRATEGY SESSION
The most recent 12-month period was marked by a
volatile trend across the utility sectors we
monitor. Strong performance was realized by
companies with exposure to natural gas production
and throughout capacity, wholesale electric
generation, and energy marketing and trading.
Absent a recession, supply for new electric
capacity will not catch up to demand for at least
two to three years, and we are maintaining large
positions in Calpine, El Paso Energy, Enron, and
Dynegy to capture the potential growth
opportunities related to this theme.
The telecommunications sector remained under
pressure as the rapid commodization of the consumer
long-distance business led to further declines in
the shares of AT&T, Sprint, and WorldCom. Rising
concerns about defaulting high-yield debt for the
smaller communications companies also depressed the
sector, and several planned IPOs were pulled or
delayed in the hope of better market conditions.
The Regional Bell Companies (led by SBC
Communications and Verizon) held up relatively well
due to their successful entry into the long-
distance market and more defensive equity
fundamentals.
Domestic electric utilities was the best performing
Dow Jones sector in the past 12 months (Dow Jones
Electric Index was up 48%), benefiting from a more
defensive stock market and positive earnings
revisions due to the increased value of electric
generating capacity. We prefer large-cap utilities
with competitive generating assets, including a
history of well-run nuclear
2
<PAGE>
www.prudential.com (800) 225-1852
units that should realize cost-efficiencies from
pending mergers (Exelon and FPL Group). Among the
mid-cap names, we like Pinnacle West and DPL
because of their strong management teams and low-
cost rate structure.
In the fixed-income portion of the Fund, we
continue to pursue a three-part strategy. The first
theme is the close scrutiny of emerging markets for
investment opportunities. The emerging market theme
seeks utility issuers that are potential upgrade
candidates in countries with growing acceptance by
the international lending community. The securities
purchased in the past to implement this theme have
severely hurt performance since risk premiums on
issuers located within emerging countries have
widened during the last two years. Our second theme
is the pursuit of companies with respectable
operating histories in developed markets. We
consider developed countries to be ones with
investment-grade ratings. A third theme is the
pursuit of investments in companies that are
privatizing in both developed and emerging
countries. Improvements in costs and operations by
these companies should result in higher credit
quality. We did not find any opportunities last
quarter in this category.
WHAT WENT WELL
The best performing area within the Fund was the
domestic electric and gas utilities. Companies like
Calpine, Enron, Dynegy, and El Paso Energy are
clear beneficiaries of the tight supply conditions
in both natural gas production and electric
generating capacity in the United States.
WHAT WENT NOT SO WELL
Virtually every international telephone company and
the domestic telecoms with exposure to consumer
long-distance declined over the most recent
12-month period. International carriers that bid
aggressively for next generation wireless licenses,
like KPN, hurt relative performance. Results were
also hurt by international holdings in Korea
Telecom, Videsh Sanchar Nigam Limited, and Nippon
Telephone & Telegraph. Domestic holdings that hurt
performance included Sprint, WorldCom, and
McLeod*USA.
3
<PAGE>
Global Utility Fund, Inc.
Annual Report September 30, 2000
LOOKING AHEAD
Our overweight in telecommunications and large
exposure to international companies have been
damaging to performance relative to the Lipper
Utility Average, but the 21.2% the Financial
Times/S&P Actuaries World Utilities Index over the
past six months indicates that there were very few
places to hide overseas. The domestic telecom
market was equally depressed, and negative earnings
revisions by both AT&T and WorldCom in early
October indicate that we have not seen the bottom
yet.
The international electric and gas markets remain
dramatically different than the domestic utility
industry. Europe and Asia generally have excess
capacity, and the larger players seem more
concerned with market share gains and protecting
their monopoly franchise than creating shareholder
value. The domestic market, along with the United
Kingdom, is much farther along with deregulation,
and has more visible opportunities for earnings
growth and pricing volatility.
We continue to look for new investment
opportunities in the volatile global utilities
sector. The volatility across the group in the past
18 months has been unprecedented, and the sharp
decline in telecom valuations was unforeseen by
most investors. We will remain cautious in looking
for companies with competitive assets and
management strategies positioned for growth.
Global Utility Fund Management Team
4
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of September 30, 2000
<TABLE>
<CAPTION>
Shares Description US$ Value [ZW]
(Note 1)
<C> <S> [ZW]
<C> <C>
--------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 97.0%
Common Stocks 75.6%
-------------------------------------------------------------------------------------
Electrical Utilities 26.1%
80,600 Calpine Corp.(a) $ [ZW]
8,412,625
7,100 Capstone Turbine Corp.(a) [ZW]
491,675
100,000 CMS Energy Corp. [ZW]
2,693,750
60,000 Constellation Energy Group [ZW]
2,985,000
180,000 Companhia Paranaense de Energia-COPEL
(ADR-Preferred B Shares) (Brazil) [ZW]
1,597,500
104,347 DPL, Inc. [ZW]
3,104,323
200,000 Endesa SA (ADR) (Spain) [ZW]
3,750,000
187,800 Espoon Sahko Oyj (ADR) (Finland) [ZW]
2,817,225
100,000 FPL Group, Inc. [ZW]
6,575,000
160,000 Montana Power Co. [ZW]
5,340,000
105,000 Pinnacle West Capital Corp. [ZW]
5,341,875
250,000 Scottish Power PLC (ADR) (United Kingdom) [ZW]
1,932,330
277,300 Shandong Huaneng Power Ltd. (ADR) (China) [ZW]
2,113,026
6,500 Southern Energy, Inc.(a) [ZW]
203,938
150,000 Unicom Corp. [ZW]
8,428,125
[ZW]
--------------------
[ZW]
55,786,392
-------------------------------------------------------------------------------------
Gas Utilities 14.8%
359,459 Australian Gas Light Co. (Australia) [ZW]
1,992,893
50,000 Dynegy, Inc. (Class A shares) [ZW]
2,850,000
125,000 El Paso Energy Corp. [ZW]
7,703,125
75,000 Enron Corp. [ZW]
6,571,875
20,000 Equitable Resources, Inc. [ZW]
1,267,500
50,000 MCN Energy Group, Inc. [ZW]
1,281,250
200,000 TransCanada Pipelines Ltd. (Canada) [ZW]
1,880,149
250,000 Westcoast Energy, Inc. (Canada) [ZW]
4,758,504
75,000 Williams Companies, Inc. [ZW]
3,168,750
[ZW]
--------------------
[ZW]
31,474,046
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Shares Description US$ Value [ZW]
(Note 1)
--------------------------------------------------------------------------------------------
<C> <S> [ZW]
<C> <C>
Telecommunications 32.6%
50,000 ALLTEL Corp. $ [ZW]
2,609,375
60,000 AT&T Corp. [ZW]
1,762,500
32,200 China Unicom Ltd. (ADR) (China)(a) [ZW]
702,363
101,096 Compania de Telecomunicaciones de Chile, SA
(ADR) (Chile) [ZW]
1,756,543
2,700 Flag Telecom Hldgs. Ltd.(a) [ZW]
29,700
111,222 Hellenic Telecommunications Organization SA
(Greece)(a) [ZW]
2,121,094
87,282 Koninklijke KPN NV (Netherlands) [ZW]
1,893,904
110,000 Korea Telecom Corp. (ADR) (Korea) [ZW]
3,698,750
280,600 McLeodUSA, Inc.(a) [ZW]
4,016,088
75,000 Nextel Communications, Inc.(a) [ZW]
3,506,250
60,000 Nippon Telegraph & Telephone Corp. (ADR) (Japan) [ZW]
2,940,000
31,407 Nortel Networks Corp. (Canada) [ZW]
1,870,679
85,040 NTL, Inc.(a) [ZW]
3,938,415
86,466 Qwest Communications Intl., Inc.(a) [ZW]
4,155,772
150,000 SBC Communications, Inc. [ZW]
7,500,000
65,000 Sprint Corp. [ZW]
1,905,313
50,000 Tele Danmark (ADR) (Denmark) [ZW]
1,406,250
40,000 Telecom Corp. of New Zealand Ltd. (ADR) (New
Zealand) [ZW]
800,000
85,000 Telefonos de Mexico SA (ADR - Class L Shares)
(Mexico) [ZW]
4,520,937
331,100 Telekomunikacja Polska SA (GDR) (Poland) [ZW]
1,775,027
361,774 Telstra Corp. Ltd. (Australia) [ZW]
592,111
25,000 TELUS Corp. (Non-Voting) (Canada)(a) [ZW]
649,416
75,000 TELUS Corp. (Voting) (Canada)(a) [ZW]
2,018,004
220,000 Videsh Sanchar Nigam Ltd. (GDR) (India) [ZW]
1,760,000
100,000 Vodafone Group PLC (ADR) (United Kingdom) [ZW]
3,700,000
30,000 VoiceStream Wireless Corp.(a) [ZW]
3,481,875
150,000 WorldCom, Inc.(a) [ZW]
4,556,250
[ZW]
--------------------
[ZW]
69,666,616
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Shares Description US$ Value [ZW]
(Note 1)
--------------------------------------------------------------------------------------------
<C> <S> [ZW]
<C> <C>
Water Utilities & Other 2.1%
41,000 ENI SpA (ADR) (Italy) $ [ZW]
2,170,437
15,000 Suez Lyonnaise des Eaux SA (France) [ZW]
2,317,131
[ZW]
--------------------
[ZW]
4,487,568
[ZW]
--------------------
Total common stocks (cost $133,471,783) [ZW]
161,414,622
[ZW]
--------------------
</TABLE>
<TABLE>
<S> <C> <C> [ZW]
<C> <C>
DEBT OBLIGATIONS 21.4%
Corporate Bonds 20.9%
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description
------------------------------------------------------------------------------------------------
<S> <C> <C> [ZW]
<C> <C>
Electrical Utilities 13.8%
Alabama Power Co.,
A2 $ 1,000 5.35%, 11/15/03, Ser. [ZW]
I 952,860
Appalachian Power Co.,
Baa1 1,000 6.60%, 5/1/09, Ser. [ZW]
C 925,840
Arizona Public Service Co.,
Baa2 1,000 6.25%, [ZW]
1/15/05 958,770
Carolina Power & Light Co.,
A2 1,000 5.95%, [ZW]
3/1/09 904,470
Cleveland Elec. Illum. Co.,
Baa3 1,000 7.43%, [ZW]
11/1/09 977,000
CMS Energy Corp.,
BB(c) 1,000 8.125%, [ZW]
5/15/02 992,860
Compania De Transporte Energetica
(Brazil),
BBB-(c) 1,000(b) 9.25%, [ZW]
4/1/08 910,000
Consolidated Edison Co. of NY,
Inc.,
A1 1,000 7.625%, [ZW]
3/1/04 1,020,910
El Paso Electric Co.,
Baa3 1,000 8.25%, 2/1/03, Ser. [ZW]
C 1,010,770
Empresa Electrica del Norte
Grande SA (Chile),
B1 1,000(b) 7.75%, [ZW]
3/15/06 320,000
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description US$ Value [ZW]
(Note 1)
------------------------------------------------------------------------------------------------
<S> <C> <C> [ZW]
<C> <C>
Florida Power Corp.,
Aa3 $ 500 6.00%, 7/1/03 [ZW]
$ 490,475
Gulf States Utilities Co.,
Baa3 1,000 8.25%, [ZW]
4/1/04 1,028,430
Hyder PLC (United Kingdom),
Baa2 1,000(b) 6.875%, [ZW]
12/15/07 868,894
Inversora Electrica Buenos Aires
SA (Argentina),
B+(c) 1,000(b) 9.00%, [ZW]
9/16/04 350,000
Niagara Mohawk Power Corp.,
Baa3 1,000 7.75%, 10/1/08, Ser. [ZW]
G 1,002,870
Northern States Power Co.,
Aa3 1,000 6.50%, [ZW]
3/1/28 867,050
NRG Energy, Inc.,
Baa3 1,000 7.50%, [ZW]
6/15/07 955,720
Pennsylvania Electric Co.,
A2 1,000 6.125%, 4/1/09, Ser. [ZW]
B 906,790
Philadelphia Electric Co.,
A(c) 1,000 6.50%, [ZW]
5/1/03 984,230
PP&L Capital Funding, Inc.,
Baa2 1,000 6.79%, [ZW]
11/22/04 992,910
Public Service Co.,
Baa3 1,000 7.10%, [ZW]
8/1/05 976,510
Baa1 1,000 6.875%, [ZW]
7/15/09 953,080
Puget Sound Energy, Inc.,
Baa1 1,000 6.46%, [ZW]
3/9/09 929,940
Quebec Hydro.,
A2 1,000(b) 7.50%, 4/1/16 [ZW]
(Canada) 1,017,070
Southern Investments PLC
(United Kingdom),
Baa1 1,000(b) 6.80%, [ZW]
12/1/06 919,850
Tampa Electric Co.,
Aa2 1,000 7.75%, [ZW]
11/1/22 978,330
Texas Utilities Electric Co.,
A3 1,000 8.25%, [ZW]
4/1/04 1,040,080
TXU Australia Hldgs. Ltd.
(Australia),
BBB+(c) 1,000(b) 6.75%, [ZW]
12/1/06 969,420
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description US$ Value [ZW]
(Note 1)
------------------------------------------------------------------------------------------------
<S> <C> <C> [ZW]
<C> <C>
United Utilities PLC (United
Kingdom),
A3 $ 1,000(b) 6.45%, 4/1/08 [ZW]
$ 903,410
Virginia Electric Power Co.,
A2 1,000 6.625%, [ZW]
4/1/03 995,050
Wisconsin Electric Power Co.,
Aa3 1,000 6.625%, [ZW]
11/15/06 971,370
Wisconsin Power & Light Co.,
Aa3 500 5.70%, [ZW]
10/15/08 445,400
Yorkshire Power Finance Ltd.
(United Kingdom),
Baa2 1,000(b) 6.496%, [ZW]
2/25/08 906,910
[ZW]
--------------------
[ZW]
29,427,269
-------------------------------------------------------------------------------------
Gas Distribution & Other Industries 0.6%
El Paso Natural Gas Co.,
Baa1 1,000 7.50%, [ZW]
11/15/26 950,640
Wisconsin Gas Co.,
Aa2 535 5.50%, [ZW]
1/15/09 481,757
[ZW]
--------------------
[ZW]
1,432,397
-------------------------------------------------------------------------------------
Telecommunications, Media & Related Industries 6.5%
AES Corp.,
Ba3 1,000 8.375%, [ZW]
8/15/07 950,000
Alestra (Mexico),
BB-(c) 500(b) 12.125%, [ZW]
5/15/06 486,250
AT&T Corp.,
AA-(c) 1,000 7.75%, [ZW]
3/1/07 1,026,070
Century Telephone Enterprises,
Inc.,
BBB+(c) 1,000 6.30%, [ZW]
1/15/08 903,080
Flag Telecom Holdings Ltd.,
Ba3 500 8.25%, [ZW]
1/30/08 440,000
Global Crossing Hldgs. Ltd.,
Ba2 500 9.125%, [ZW]
11/15/06 495,000
GTE Corp.,
A2 1,000 7.51%, [ZW]
4/1/09 1,003,650
Indiana Bell Telephone Co., Inc.,
Aa2 1,000 7.30%, [ZW]
8/15/26 917,070
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description US$ Value [ZW]
(Note 1)
------------------------------------------------------------------------------------------------
<S> <C> <C> [ZW]
<C> <C>
Level 3 Communications, Inc.,
B(c) $ 500 11.00%, 3/15/08 [ZW]
$ 475,000
New Jersey Bell Telephone Co.,
Aa2 1,000 8.00%, [ZW]
6/1/22 993,020
New York Telephone Co.,
A1 1,000 6.00%, [ZW]
4/15/08 922,650
Nextel Communications,
B1 500 9.375%, [ZW]
11/15/09 490,000
Pacific Bell Corp.,
Aa3 1,000 6.625%, [ZW]
11/1/09 952,140
Philippine Long Distance
Telephone Co. (The Philippines),
BB+(c) 1,000(b) 9.25%, [ZW]
6/30/06 898,750
Sprint Capital Corp.,
Baa1 1,000 5.70%, [ZW]
11/15/03 956,350
Telecomunicaciones de Puerto
Rico,
BBB(c) 1,000 6.65%, [ZW]
5/15/06 955,240
Worldcom, Inc.,
A3 1,000 6.40%, [ZW]
8/15/05 973,750
[ZW]
--------------------
[ZW]
13,838,020
[ZW]
--------------------
Total corporate bonds
(cost $48,530,114) [ZW]
44,697,686
[ZW]
--------------------
-----------------------------------------------------------------------------------
U.S. Government Obligations 0.5%
United States Treasury Notes.,
5.75%, 8/15/03
Aaa 1,000 (cost [ZW]
$1,021,094) 994,370
[ZW]
--------------------
Total debt obligations
(cost $49,551,208) [ZW]
45,692,056
[ZW]
--------------------
Total long-term investments
(cost $183,022,991) [ZW]
207,106,678
[ZW]
--------------------
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of September 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description US$ Value [ZW]
(Note 1)
------------------------------------------------------------------------------------------------
<S> <C> <C> <C[ZW]
> <C>
Repurchase Agreement 3.7%
Lehman Brothers Hldgs., Inc.
6.53% due 10/02/00 in the amount
of $7,991,346 (cost $7,987,000;
collateralized by $14,695,000
U.S. Treasury Bonds, Zero
Coupon, due 5/15/10, value of
collateral including interest
$ 7,987 $8,239,927) [ZW]
$ 7,987,000
[ZW]
--------------------
Total Investments 100.7%
(cost $191,009,991; Note 4) [ZW]
215,093,678
Liabilities in excess of other
assets (0.7%) [ZW]
(1,554,129)
[ZW]
--------------------
Net Assets 100% $ [ZW]
213,539,549
[ZW]
--------------------
[ZW]
--------------------
</TABLE>
--------------------------------------------------------------------------------
(a) Non-income-producing security.
(b) US$ Denominated Bonds.
(c) Standard & Poor's rating.
ADR--American Depository Receipts.
GDR--Global Depository Receipts.
NV--Naamkee Vennootachap (Dutch Corporation).
PLC--Public Limited Company.
Oyj--Jalkinen Osakeyhtio (Finnish Corporation)
SA--Sociedad Anonima (Spanish Corporation) or Societe Anonyme (French
Corporation).
SpA--Societe par Atione (Italian Corporation).
See Notes to Financial Statements 11
<PAGE>
Global Utility Fund, Inc.
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
September 30, [ZW]
2000
<S> [ZW]
<C> <C>
----------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $191,009,991) $215,093,678
Foreign currency, at value (cost $124,509) 122,889
Dividends and interest receivable 1,448,017
Receivable for Fund shares sold 44,745
Deferred expenses and other assets 6,317
[ZW]
------------------
Total assets 216,715,646
[ZW]
------------------
LIABILITIES
Payable to custodian 23,035
Payable for Fund shares reacquired 2,398,226
Accrued expenses 366,498
Payable for investments purchased 143,000
Management fee payable 127,770
Distribution fee payable 88,558
Withholding taxes payable 29,010
[ZW]
------------------
Total liabilities 3,176,097
[ZW]
------------------
NET ASSETS $213,539,549
[ZW]
------------------
[ZW]
------------------
Net assets were comprised of:
Common stock, at par $ 13,675
Paid-in capital in excess of par 148,343,178
[ZW]
------------------
148,356,853
Accumulated undistributed net investment income 1,247,646
Accumulated net realized gains on investments and
foreign currency transactions 39,856,019
Net unrealized appreciation on investments and foreign
currencies 24,079,031
[ZW]
------------------
Net assets, September 30, 2000 $213,539,549
[ZW]
------------------
[ZW]
------------------
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Statement of Assets and Liabilities Cont'd.
<TABLE>
<CAPTION>
September 30, [ZW]
2000
<S> [ZW]
<C> <C>
----------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share
($140,736,073 / 9,015,012 shares of common stock issued
and outstanding) $15.61
Maximum sales charge (5.00% of offering price) .82
Maximum offering price to public $16.43
[ZW]
------------------
[ZW]
------------------
Class B:
Net asset value, offering price and redemption price per
share ($66,648,068 / 4,265,469 shares of common stock
issued and outstanding) $15.63
[ZW]
------------------
[ZW]
------------------
Class C:
Net asset value and redemption price per share ($947,635 /
60,634 shares of common stock issued and outstanding) $15.63
Sales charge (1.00% of offering price) .16
Offering price to public $15.79
[ZW]
------------------
[ZW]
------------------
Class Z:
Net asset value, offering price and redemption price per
share ($5,207,773 / 333,551 shares of common stock
issued and outstanding) $15.61
[ZW]
------------------
[ZW]
------------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Global Utility Fund, Inc.
Statement of Operations
<TABLE>
<CAPTION>
Year
Ended
September 30, [ZW]
2000
<S> [ZW]
<C> <C>
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Dividends (net of foreign withholding taxes of $233,074) $ 5,495,059
Interest (net of foreign withholding taxes of $1,122) 4,400,593
[ZW]
------------------
Total income 9,895,652
[ZW]
------------------
Expenses
Management fee 1,786,869
Distribution fee--Class A 345,603
Distribution fee--Class B 1,107,688
Distribution fee--Class C 11,304
Transfer agent's fees and expenses 320,000
Custodian's fees and expenses 180,000
Reports to shareholders 125,000
Legal fees and expenses 60,000
Registration fees 43,000
Audit fee 33,000
Directors' fees and expenses 25,000
Insurance 4,000
Miscellaneous 10,475
[ZW]
------------------
Total expenses 4,051,939
[ZW]
------------------
Net investment income 5,843,713
[ZW]
------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 58,074,774
Foreign currency transactions (13,673)
[ZW]
------------------
58,061,101
[ZW]
------------------
Net change in unrealized appreciation/depreciation on:
Investments (59,688,298)
Foreign currencies (12,139)
[ZW]
------------------
(59,700,437)
[ZW]
------------------
Net loss on investments and foreign currencies (1,639,336)
[ZW]
------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,204,377
[ZW]
------------------
[ZW]
------------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Year
Ended Ended
September 30, 2000 September 30, [ZW]
1999
<S> <C> [ZW]
<C> <C>
------------------------------------------------------------------------------------
INCREASE/(DECREASE) IN NET ASSETS
Operations
Net investment income $ 5,843,713 $ 5,513,314
Net realized gain on investment and
foreign currency transactions 58,061,101 29,188,396
Net change in unrealized
appreciation/depreciation of
investments and foreign currencies (59,700,437) 6,993,940
------------------ [ZW]
------------------
Net increase in net assets resulting
from operations 4,204,377 41,695,650
------------------ [ZW]
------------------
Dividends and distributions (Note 1)
Dividends from net investment income
Class A (3,281,780) [ZW]
(2,818,425)
Class B (1,436,038) [ZW]
(1,980,640)
Class C (15,776) [ZW]
(16,127)
Class Z (165,534) [ZW]
(155,936)
------------------ [ZW]
------------------
(4,899,128) [ZW]
(4,971,128)
------------------ [ZW]
------------------
Distributions from net realized gains
Class A (16,339,591) [ZW]
(13,406,633)
Class B (15,377,368) [ZW]
(15,777,009)
Class C (129,077) [ZW]
(109,977)
Class Z (800,929) [ZW]
(641,421)
------------------ [ZW]
------------------
(32,646,965) [ZW]
(29,935,040)
------------------ [ZW]
------------------
Fund share transactions (net of share
conversions) (Note 5)
Net proceeds from shares sold 28,296,701 37,013,685
Net asset value of shares issued in
reinvestment of dividends and
distributions 31,763,702 29,276,900
Cost of shares reacquired (93,202,959) [ZW]
(78,296,960)
------------------ [ZW]
------------------
Net decrease in net assets from Fund
share transactions (33,142,556) [ZW]
(12,006,375)
------------------ [ZW]
------------------
Total decrease (66,484,272) [ZW]
(5,216,893)
NET ASSETS
Beginning of period 280,023,821 285,240,714
------------------ [ZW]
------------------
End of period(a) $213,539,549 $280,023,821
------------------ [ZW]
------------------
------------------ [ZW]
------------------
---------------
(a) Includes undistributed net investment
income of $ 1,247,646 $ 594,864
------------------ [ZW]
------------------
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements
Global Utility Fund, Inc. (the 'Fund') is 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
of 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 take
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.
16
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements Cont'd.
(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.
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.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. The Fund amortizes premiums and original issue
discounts on purchases of debt securities as adjustments to interest income.
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.
17
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements Cont'd.
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 the 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 decrease undistributed net investment income by $291,803,
increase paid in capital in excess of par by $12,947,159 and decrease
accumulated net realized gains on investments by $12,655,356 due to the Fund
treating redemptions as distributions for federal income tax purposes and net
realized foreign currency losses during the fiscal year ended September 30,
2000. 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
Management Company, LLP ('Wellington'); Wellington furnishes investment advisory
services in connection with the management of the Fund. PIFM pays for 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
18
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements Cont'd.
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 Investment
Management Services LLC ('PIMS') which acts as the distributor of the Class A,
Class B, Class C and Class Z shares of the Fund. The Fund compensates PIMS 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 distribution or service fees are paid to
PIMS as distributor of the Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensates PIMS 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 the year ended
September 30, 2000.
PIMS has advised the Fund that it received approximately $26,100 and
$1,400 in front-end sales charges resulting from sales of Class A and Class C
shares during the year ended September 30, 2000. From these fees PIMS paid such
sales charges to affiliated broker-dealers which in turn paid commissions to
salespersons and incurred other distribution costs.
PIMS has advised the Fund that for the year ended September 30, 2000 it
received approximately $84,600 and $700 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
PIMS and PIFM are wholly owned subsidiaries of The Prudential Insurance
Company of America.
The Fund, along with other affiliated registered investment companies (the
'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $1 billion.
Interest on any such borrowings will be at market rates. The purpose of the
agreement is to serve as an alternative source of funding for capital share
redemptions. The Funds pay a commitment fee of .080 of 1% of the unused portion
of the credit facility. The commitment fee is accrued and paid quarterly on a
pro rata basis by the Funds. The expiration date of the SCA is March 9, 2001.
Prior to March 9, 2000, the commitment fee was .065 of 1% of the unused portion
of the credit facility. The Fund did not borrow any amounts pursuant to the SCA
during the year ended September 30, 2000.
19
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements Cont'd.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent and during the year ended September 30,
2000, the Fund incurred fees of approximately $273,500 for the services of PMFS.
As of September 30, 2000, approximately $18,400 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 nonaffiliates.
For the year ended September 30, 2000, Prudential Securities Incorporated,
an indirect wholly owned subsidiary of Prudential, earned $16,300 in brokerage
commissions from portfolio transactions on behalf of the Fund.
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the year ended September 30, 2000 were $121,625,859 and $180,276,671,
respectively.
The cost basis of investments for federal income tax purposes is
substantially the same for financial reporting purposes and, accordingly, as of
September 30, 2000, net unrealized appreciation for federal income tax purposes
was $24,083,687 (gross unrealized appreciation--$47,729,681; gross unrealized
depreciation--$23,645,994).
The Fund has elected to treat approximately $29,742 of net foreign
currency losses incurred in the eleven months ended September 30, 2000 as having
been incurred in the following fiscal year.
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%. 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 front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. 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. 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.
20
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements Cont'd.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares [ZW]
Amount
---------------------------------------------------------- ----------- [ZW]
-------------
<S> <C> <C>
Year ended September 30, 2000:
Shares sold 892,189 $ [ZW]
14,814,086
Shares issued in reinvestment of dividends and
distributions 894,963 [ZW]
15,174,944
Shares reacquired (2,796,776) [ZW]
(47,255,396)
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding before
conversion (1,009,624) [ZW]
(17,266,366)
Shares issued upon conversion from Class B 2,261,622 [ZW]
37,564,883
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding 1,251,998 $ [ZW]
20,298,517
----------- [ZW]
-------------
----------- [ZW]
-------------
Year ended September 30, 1999:
Shares sold 874,576 $ [ZW]
16,047,074
Shares issued in reinvestment of dividends and
distributions 708,621 [ZW]
12,158,388
Shares reacquired (1,520,250) [ZW]
(27,731,764)
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding before
conversion [ZW]
62,947 473,698
Shares issued upon conversion from Class B 715,401 [ZW]
13,239,554
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding 778,348 $ [ZW]
13,713,252
----------- [ZW]
-------------
----------- [ZW]
-------------
<CAPTION>
Class B
----------------------------------------------------------
<S> <C> <C>
Year ended September 30, 2000:
Shares sold 312,132 $ [ZW]
5,435,464
Shares issued in reinvestment of dividends and
distributions 908,974 [ZW]
15,486,409
Shares reacquired (2,076,403) [ZW]
(35,841,226)
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding before
conversion (855,297) [ZW]
(14,919,353)
Shares reacquired upon conversion into Class A (2,263,127) [ZW]
(37,564,883)
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding (3,118,424) $ [ZW]
(52,484,236)
----------- [ZW]
-------------
----------- [ZW]
-------------
Year ended September 30, 1999:
Shares sold 661,124 $ [ZW]
12,049,586
Shares issued in reinvestment of dividends and
distributions 946,862 [ZW]
16,199,281
Shares reacquired (2,278,722) [ZW]
(41,623,502)
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding before
conversion (670,736) [ZW]
(13,374,635)
Shares reacquired upon conversion into Class A (716,563) [ZW]
(13,239,554)
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding (1,387,299) $ [ZW]
(26,614,189)
----------- [ZW]
-------------
----------- [ZW]
-------------
</TABLE>
21
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements Cont'd.
<TABLE>
<CAPTION>
Class C Shares [ZW]
Amount
---------------------------------------------------------- ----------- [ZW]
-------------
Year ended September 30, 2000:
<S> <C> <C>
Shares sold 369,362 $ [ZW]
6,471,258
Shares issued in reinvestment of dividends and
distributions [ZW]
8,125 138,179
Shares reacquired (397,800) [ZW]
(7,004,050)
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding (20,313) $ [ZW]
(394,613)
----------- [ZW]
-------------
----------- [ZW]
-------------
Year ended September 30, 1999:
Shares sold 408,004 $ [ZW]
7,449,727
Shares issued in reinvestment of dividends and
distributions [ZW]
7,015 120,147
Shares reacquired (388,275) [ZW]
(7,080,380)
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding 26,744 [ZW]
$ 489,494
----------- [ZW]
-------------
----------- [ZW]
-------------
<CAPTION>
Class Z
----------------------------------------------------------
<S> <C> <C>
Year ended September 30, 2000:
Shares sold 91,728 $ [ZW]
1,575,893
Shares issued in reinvestment of dividends and
distributions [ZW]
56,760 964,170
Shares reacquired (182,943) [ZW]
(3,102,287)
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding (34,455) $ [ZW]
(562,224)
----------- [ZW]
-------------
----------- [ZW]
-------------
Year ended September 30, 1999:
Shares sold 80,233 $ [ZW]
1,467,298
Shares issued in reinvestment of dividends and
distributions [ZW]
46,480 799,084
Shares reacquired (101,821) [ZW]
(1,861,314)
----------- [ZW]
-------------
Net increase (decrease) in shares outstanding 24,892 [ZW]
$ 405,068
----------- [ZW]
-------------
----------- [ZW]
-------------
</TABLE>
22
<PAGE>
Global Utility Fund, Inc
Financial
Highlights
<PAGE>
Global Utility Fund, Inc.
Financial Highlights
<TABLE>
<CAPTION>
Class A
[ZW]
------------------
Year Ended
September 30, [ZW]
2000
----------------------------------------------------------------------------------------
<S> [ZW]
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 17.95
----------
Income from investment operations
Net investment income 0.44(b)
Net realized and unrealized gain (loss) on investment and
foreign currency transactions (0.21)
----------
Total from investment operations 0.23
----------
Less distributions
Dividends from net investment income (0.40)
Distributions in excess of net investment income --
Distributions from net realized gains (2.17)
----------
Total distributions (2.57)
----------
Net asset value, end of year $ 15.61
----------
----------
TOTAL RETURN(a) 0.27%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $140,736
Average net assets (000) $138,241
Ratios to average net assets:
Expenses, including distribution fees 1.26%
Expenses, excluding distribution fees 1.01%
Net investment income 2.59%
For Class A, B, C and Z shares:
Portfolio turnover rate 49%
</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.
(b) Calculated based upon weighted average shares outstanding during the year.
24 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------------------------------
Year Ended Sepember 30,
-------------------------------------------------------------------------------------
1999 1998 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> [ZW]
<C> <C>
$ 17.66 $ 17.52 $ 15.03 $ 14.72
---------------- ---------------- ---------------- ----------------
.41(b) .46(b) .49 .51
2.15 1.67 3.34 .73
---------------- ---------------- ---------------- ----------------
2.56 2.13 3.83 1.24
---------------- ---------------- ---------------- ----------------
(.38) (.46) (.49) (.51)
-- (.02) (.02) --
(1.89) (1.51) (.83) (.42)
---------------- ---------------- ---------------- ----------------
(2.27) (1.99) (1.34) (.93)
---------------- ---------------- ---------------- ----------------
$ 17.95 $ 17.66 $ 17.52 $ 15.03
---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ----------------
15.36% 12.90% 26.90% 8.65%
$139,374 $123,346 $120,825 $112,800
$136,690 $122,384 $116,303 $120,122
1.17% 1.18% 1.21% 1.30%
.92% .93% .96% 1.05%
2.23% 2.49% 3.00% 3.38%
8% 20% 13% 13%
</TABLE>
See Notes to Financial Statements 25
<PAGE>
Global Utility Fund, Inc.
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class B
<S> [ZW]
<C> <C>
[ZW]
------------------
<CAPTION>
Year Ended
September 30, [ZW]
2000
----------------------------------------------------------------------------------------
<S> [ZW]
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 17.96
----------
Income from investment operations
Net investment income 0.32(b)
Net realized and unrealized gain (loss) on investment and
foreign currency transactions (0.22)
----------
Total from investment operations 0.10
----------
Less distributions
Dividends from net investment income (0.26)
Distributions in excess of net investment income --
Distributions from net realized gains (2.17)
----------
Total distributions (2.43)
----------
Net asset value, end of year $ 15.63
----------
----------
TOTAL RETURN(a) (0.42)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 66,648
Average net assets (000) $110,769
Ratios to average net assets:
Expenses, including distribution fees 2.01%
Expenses, excluding distribution fees 1.01%
Net investment income 1.84%
</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.
(b) Calculated based upon weighted average shares outstanding during the year.
26 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class B
-------------------------------------------------------------------------------------
Year Ended September 30,
-------------------------------------------------------------------------------------
1999 1998 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> [ZW]
<C> <C>
$ 17.66 $ 17.52 $ 15.03 $ 14.71
---------------- ---------------- ---------------- ----------------
.27(b) .32(b) .37 .40
2.16 1.67 3.34 .74
---------------- ---------------- ---------------- ----------------
2.43 1.99 3.71 1.14
---------------- ---------------- ---------------- ----------------
(.24) (.32) (.37) (.40)
-- (.02) (.02) --
(1.89) (1.51) (.83) (.42)
---------------- ---------------- ---------------- ----------------
(2.13) (1.85) (1.22) (.82)
---------------- ---------------- ---------------- ----------------
$ 17.96 $ 17.66 $ 17.52 $ 15.03
---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ----------------
14.49% 12.06% 25.96% 7.90%
$132,583 $154,873 $179,270 $187,557
$154,643 $177,326 $185,693 $210,305
1.92% 1.93% 1.96% 2.05%
.92% .93% .96% 1.05%
1.48% 1.74% 2.25% 2.62%
</TABLE>
See Notes to Financial Statements 27
<PAGE>
Global Utility Fund, Inc.
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class C
[ZW]
------------------
Year Ended
September 30, [ZW]
2000
----------------------------------------------------------------------------------------
<S> [ZW]
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $17.96
-------
Income from investment operations
Net investment income 0.31(b)
Net realized and unrealized gain (loss) on investment and
foreign currency transactions (0.21)
-------
Total from investment operations 0.10
-------
Less distributions
Dividends from net investment income (0.26)
Distributions in excess of net investment income --
Distributions from net realized gains (2.17)
-------
Total distributions (2.43)
-------
Net asset value, end of year $15.63
-------
-------
TOTAL RETURN(a) (0.42)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 948
Average net assets (000) $1,130
Ratios to average net assets:
Expenses, including distribution fees 2.01%
Expenses, excluding distribution fees 1.01%
Net investment income 1.83%
</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.
(b) Calculated based upon weighted average shares outstanding during the year.
28 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class C
-------------------------------------------------------------------------------------
Year Ended September 30,
-------------------------------------------------------------------------------------
1999 1998 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> [ZW]
<C> <C>
$ 17.66 $ 17.52 $ 15.03 $ 14.71
---------------- ---------------- ---------------- ----------------
.27(b) .32(b) .37 .40
2.16 1.67 3.34 .74
---------------- ---------------- ---------------- ----------------
2.43 1.99 3.71 1.14
---------------- ---------------- ---------------- ----------------
(.24) (.32) (.37) (.40)
-- (.02) (.02) --
(1.89) (1.51) (.83) (.42)
---------------- ---------------- ---------------- ----------------
(2.13) (1.85) (1.22) (.82)
---------------- ---------------- ---------------- ----------------
$ 17.96 $ 17.66 $ 17.52 $ 15.03
---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ----------------
14.49% 12.06% 25.96% 7.90%
$ 1,454 $ 957 $ 760 $ 661
$ 1,212 $ 969 $ 727 $ 608
1.92% 1.93% 1.96% 2.05%
.92% .93% .96% 1.05%
1.50% 1.74% 2.25% 2.66%
</TABLE>
See Notes to Financial Statements 29
<PAGE>
Global Utility Fund, Inc.
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class Z
[ZW]
------------------
Year Ended
September 30, [ZW]
2000
----------------------------------------------------------------------------------------
<S> [ZW]
<C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $17.97
-------
Income from investment operations
Net investment income 0.50(b)
Net realized and unrealized gain (loss) on investment and
foreign currency transactions (0.23)
-------
Total from investment operations 0.27
-------
Less distributions
Dividends from net investment income (0.46)
Distributions in excess of net investment income --
Distributions from net realized gains (2.17)
-------
Total distributions (2.63)
-------
Net asset value, end of period $15.61
-------
-------
TOTAL RETURN(a) 0.56%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $5,208
Average net assets (000) $6,563
Ratios to average net assets:
Expenses, including distribution fees 1.01%
Expenses, excluding distribution fees 1.01%
Net investment income 2.89%
</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) Calculated based upon weighted average shares outstanding during the year.
(c) Annualized.
(d) Commencement of offering of Class Z shares.
30 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class Z
---------------------------------------------------------------------
Year Ended September 30, December 16, 1996(d)
------------------------------------- through September 30,
1999 1998 1997
---------------------------------------------------------------------
<S> <C> <C> <C>
$17.68 $17.54 $ 15.02
------- ------- -------
.45(b) .50(b) .34
2.16 1.68 2.59
------- ------- -------
2.61 2.18 2.93
------- ------- -------
(.43) (.50) (.34)
-- (.03) (.07)
(1.89) (1.51) --
------- ------- -------
(2.32) (2.04) (.41)
------- ------- -------
$17.97 $17.68 $ 17.54
------- ------- -------
------- ------- -------
15.62% 13.18% 19.70%
$6,613 $6,065 $ 53
$6,847 $4,041 $ 16
.92% .93% .96%(c)
.92% .93% .96%(c)
2.47% 2.74% 3.25%(c)
</TABLE>
See Notes to Financial Statements 31
<PAGE>
Global Utility Fund, Inc.
Report of Independent Accountants
To the Shareholders and Board of Directors of
Global Utility Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Global Utility Fund, Inc. (the
'Fund') at September 30, 2000, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the four years in the period
then ended, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as 'financial statements') are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted in
the United States of America, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at September 30, 2000 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion. The accompanying financial highlights for the year ended September
30, 1996 were audited by other independent accountants, whose opinion dated
November 14, 1996 was unqualified.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
November 22, 2000
32
<PAGE>
Global Utility Fund, Inc.
Federal Income Tax Information (Unaudited)
We are required by the Internal Revenue Code to advise you within 60 days
of the Fund's fiscal year end (September 30, 2000) as to the federal tax status
of dividends paid by the Fund during such fiscal year. Accordingly, we are
advising you that during the fiscal year, the Fund paid distributions for Class
A shares totaling $2.57 per share, comprised of $.42 per share ordinary income
and short-term capital gains which are taxable as ordinary income and $2.15 per
share long-term capital gains which are taxable as such. The Fund paid
distributions for Class B and Class C shares totaling $2.43 per share, comprised
of $.28 per share ordinary income and short-term capital gains which are taxable
as ordinary income and $2.15 per share long-term capital gains which are taxable
as such. The Fund paid distributions for Class Z shares totaling $2.63 per
share, comprised of $.48 of ordinary income and short-term capital gains which
are taxable as ordinary income and $2.15 per share long-term capital gains which
is taxable as such. Further, we wish to advise you that 76.15% of the ordinary
income dividends paid in the fiscal year ended 2000 qualified for the corporate
dividend received deduction available to corporate taxpayers. The Fund utilized
redemptions as distributions in the amount of $0.87 of long-term capital gains
for each class of shares.
In January 2001, you will be advised on IRS Form 1099 DIV or substitute
1099 DIV as to the federal tax status of the distributions received by you in
calendar year 1999.
IMPORTANT NOTICE FOR CERTAIN SHAREHOLDERS
We are required by Massachusetts, Missouri and Oregon to inform you that
dividends which have been derived from interest on federal obligations are not
taxable to shareholders providing the mutual fund meets certain requirements
mandated by the respective state's taxing authorities. We are pleased to report
that 1% of the dividends paid by the Global Utility Fund, Inc. qualify for such
deduction.
For more detailed information regarding your state and local taxes, you should
contact your tax advisor or the state/local taxing authorities.
33
<PAGE>
Global Utility Fund, Inc.
Class A Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 9/30/00
One Year Five Years Ten Years Since Inception
With Sales Charge -4.74% 11.34% 13.04% 11.83%
Without Sales Charge 0.27% 12.49% 13.62% 12.37%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from year
to year by measuring the best and worst calendar
years in terms of total annual return for the ten
year period. The graph compares a $10,000
investment in Global Utility Fund, Inc. (Class A
shares) with a similar investment in the Morgan
Stanley Capital World Index (the MSCI World Index)
by portraying the initial account value at the
beginning of the ten-year period of Class A shares,
and the account value at the end of the current
fiscal year (September 30, 2000), as measured on a
quarterly basis, beginning in September 1990 for
Class A shares. For purposes of the graph, and
unless otherwise indicated, it has been assumed
that (a) the maximum applicable front-end sales
charge was deducted from the initial $10,000 investment
in Class A shares; (b) all recurring fees (including
management fees) were deducted; and (c) all
dividends and distributions were reinvested.
The MSCI World Index is an unmanaged, weighted
index of performance of approximately 1,500
securities listed on stock exchanges of the U.S.,
Europe, Canada, Australia, and the Far East. The
securities that comprise the MSCI World Index may
differ substantially from the securities in the
Fund. The MSCI World Index is not the only one that
may be used to characterize performance of equity
funds. Other indexes may portray different
comparative performance. Investors cannot invest
directly in an index.
This graph is furnished to you in accordance with
SEC regulations.
<PAGE>
www.prudential.com (800) 225-1852
Class B Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 9/30/00
One Year Five Years Ten Years Since Inception
With Sales Charge -5.40% 11.54% N/A 11.49%
Without Sales Charge -0.42% 11.67% N/A 11.49%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from year
to year by measuring the best and worst calendar
years in terms of total annual return since
inception of the share class. The graph compares
a $10,000 investment in the Global Utility Fund,
Inc. (Class B shares) with a similar investment in
the Morgan Stanley Capital World Index (the MSCI
World Index) by portraying the initial account
value at the beginning of the ten-year period of
Class B shares, and the account value at the end of
the current fiscal year (September 30, 2000), as
measured on a quarterly basis, beginning in March
1991 for Class B shares. For purposes of the graph,
and unless otherwise indicated, it has been assumed
that (a) the maximum applicable contingent deferred
sales charge was deducted from the value of the
investment in Class B shares, assuming full
redemption on September 30, 2000; (b) all recurring
fees (including management fees) were deducted; and
(c) all dividends and distributions were
reinvested. Class B shares will automatically
convert to Class A shares, on a quarterly basis,
beginning approximately seven years after purchase.
This conversion feature is not reflected in the graph.
The MSCI World Index is an unmanaged, weighted
index of performance of approximately 1,500
securities listed on stock exchanges of the U.S.,
Europe, Canada, Australia, and the Far East. The
securities that comprise the MSCI World Index may
differ substantially from the securities in the
Fund. The MSCI World Index is not the only one that
may be used to characterize performance of equity
funds. Other indexes may portray different
comparative performance. Investors cannot invest
directly in an index.
This graph is furnished to you in accordance with
SEC regulations.
<PAGE>
Global Utility Fund, Inc.
Class C Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 9/30/00
One Year Five Years Ten Years Since Inception
With Sales Charge -2.40% 11.44% N/A 11.18%
Without Sales Charge -0.42% 11.67% N/A 11.36%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from year
to year by measuring the best and worst calendar
years in terms of total annual return since
inception of the share class.The graph compares a
$10,000 investment in the Global Utility Fund, Inc.
(Class C shares) with a similar investment in the
Morgan Stanley Capital World Index (the MSCI World
Index) by portraying the initial account value at
the commencement of operations of Class C shares,
and the account values at the end of the current
fiscal year (September 30, 2000), as measured on a
quarterly basis, beginning in August 1994 for Class
C shares. For purposes of the graph, and unless
otherwise indicated, it has been assumed that (a)
the maximum applicable front-end sales charge was
deducted from the initial $10,000 investment in
Class C shares; (b) the maximum applicable
contingent deferred sales charge was deducted from
the value of the investment in Class C shares,
assuming full redemption on September 30, 2000; (c)
all recurring fees (including management fees) were
deducted; and (d) all dividends and distributions
were reinvested.
The MSCI World Index is an unmanaged, weighted
index of performance of approximately 1,500
securities listed on stock exchanges of the U.S.,
Europe, Canada, Australia, and the Far East. The
securities that comprise the MSCI World Index may
differ substantially from the securities in the
Fund. The MSCI World Index is not the only one that
may be used to characterize performance of equity
funds. Other indexes may portray different
comparative performance. Investors cannot invest
directly in an index.
This graph is furnished to you in accordance with
SEC regulations.
<PAGE>
www.prudential.com (800) 225-1852
Class Z Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 9/30/00
One Year Five Years Ten Years Since Inception
With Sales Charge 0.56% N/A N/A 12.74%
Without Sales Charge 0.56% N/A N/A 12.74%
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from year
to year by measuring the best and worst calendar
years in terms of total annual return since
inception of the share class.The graph compares a
$10,000 investment in the Global Utility Fund, Inc.
(Class Z shares) with a similar investment in the
Morgan Stanley Capital World Index (the MSCI World
Index) by portraying the initial account value at
the commencement of operations of Class Z shares,
and the account value at the end of the current
fiscal year (September 20, 2000), as measured on a
quarterly basis, beginning in December 1996 for
Class Z shares. For purposes of the graph, and
unless otherwise indicated, it has been assumed
that (a) all recurring fees (including management
fees) were deducted; and (b) all dividends and
distributions were reinvested. Class Z shares are
not subject to a sales charge or distribution and
service (12b-1) fees.
The MSCI World Index is an unmanaged, weighted
index of performance of approximately 1,500
securities listed on stock exchanges of the U.S.,
Europe, Canada, Australia, and the Far East. The
securities that comprise the MSCI World Index may
differ substantially from the securities in the
Fund. The MSCI World Index is not the only one that
may be used to characterize performance of equity
funds. Other indexes may portray different
comparative performance. Investors cannot invest
directly in an index.
This graph is furnished to you in accordance with
SEC regulations.
<PAGE>
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Visit Prudential's website at:
http://www.prudential.com
Directors
Eugene C. Dorsey
Saul K. Fenster, Ph.D
Robert F. Gunia
Prof. Maurice F. Holmes
Robert E. LaBlanc
Douglas H. McCorkindale
W. Scott McDonald, Jr.
Thomas T. Mooney
David R. Odenath, Jr.
Judy A. Rice
Stephen Stoneburn
Joseph Weber
Clay T. Whitehead
Officers
David R. Odenath, Jr., President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
George P. Attisano, Secretary
William V. Healey, 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 Investment
Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Ave., N.W. Washington, D.C.
20036
Fund Symbols NASDAQ CUSIP
Class A GLUAX 37936G303
Class B GLUBX 37936G204
Class C PGUCX 37936G402
Class Z PGUZX 37936G501
MF150E
(LOGO) Printed on Recycled Paper
