<PAGE>
SEMIANNUAL REPORT MARCH 31, 2000
Global Utility Fund, Inc.
Fund Type Global stock
Objective Total return
(GRAPHIC)
(LOGO)
This report is not authorized for distribution to
prospective investors unless preceded or accompanied by a
current prospectus.
<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 3/31/00
53.6% United States
8.9 United Kingdom
6.2 Canada
4.8 France
4.2 Spain
2.2 India
2.0 Mexico
1.8 Netherlands
1.5 Finland
1.4 Australia
1.4 The Philippines
1.2 Greece
1.1 Bermuda
1.1 Poland
1.0 Chile
0.9 Japan
0.9 Portugal
0.8 Italy
0.8 South Korea
0.6 Brazil
0.6 New Zealand
0.5 Argentina
0.3 Cayman Islands
0.3 China
1.9 Assets in excess of liabilities
Five Largest Holdings
Expressed as a percentage of
net assets as of 3/31/00
3.1% SBC Communications, Inc.
Telecommunications
2.9 NTL, Inc.
Telecommunications
2.8 Enron Corp.
Gas Utilities
2.7 Sprint Corp.
Telecommunications
2.6 BCE, Inc.
Telecommunications
Portfolio Composition
Expressed as a percentage of
net assets as of 3/31/00
50.0% Telecommunications
32.4 Electric
10.2 Gas Transmission Distribution
5.5 Water Supply and Other
1.9 Cash & Equivalents
<PAGE>
www.prudential.com (800) 225-1852
Performance at a Glance
Cumulative Total Returns1 As of 3/31/00
Six One Five Ten Since
Months Year Years Years Inception2
Class A 12.86% 15.65% 131.11% 302.11% 293.94%
Class B 12.49 14.90 122.72 N/A 218.92
Class C 12.49 14.90 122.72 N/A 119.33
Class Z 13.10 16.08 N/A N/A 77.19
FT/S&P Actuaries
World Utilities
Index 3 28.91 37.80 204.00 369.92 301.73
Lipper Utility
Fund Avg.4 18.64 26.59 141.82 279.30 ***
Average Annual Total Returns1 As of 3/31/00
One Five Ten Since
Year Years Years Inception2
Class A 9.87% 17.03% 14.34% 13.75%
Class B 9.90 17.26 N/A 13.69
Class C 12.75 17.13 N/A 14.67
Class Z 16.08 N/A N/A 19.00
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.
1 Source: 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.
2 Inception 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.
3 Source: 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.
4 Lipper average returns are for all funds in each share
class for the six-month, 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/S&P Actuaries World Utilities Index Since
Inception returns are 301.62% for Class A, 325.76% for
Class B, 202.99% for Class C, and 148.73% for Class Z.
***Lipper Since Inception returns are 261.06% for Class
A, 242.31% for Class B, 150.51% for
Class C, and 82.50% 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.
Investment Adviser's Report
The Global Utility Fund's Class A shares gained 12.86%
for the six months ended March 31, 2000, as compared with
the 18.64% increase in the Lipper Utility Fund Average
and a 28.9% advance in the all equity benchmark Financial
Times World Utilities Index. After incurring the one-time
initial maximum sales charge, the Fund's Class A shares
returned 7.22%. The Fund's global focus and high fixed-
income exposure relative to many of its competitors and
the index have detracted from recent performance, but we
remain confident that these unique features of the Fund
will benefit investors in the long run.
Strategy Session
The past six-month period was one of increased volatility
across the utility sectors we monitor, with the best
performance coming from the domestic natural gas
companies and deregulated energy service providers.
Companies like Enron, El Paso Energy, and Calpine have
benefited from tight supply/demand conditions for
electricity, taking advantage of their early lead in
siting new gas-fired generating capacity in regions of
the country with strong growth and limited transmission
capacity. We anticipate that this trend will continue for
at least the next two to three years.
Performance within the telecommunications sector was
volatile as the pace of increased competition and
consolidation accelerated. The majority of the large
carriers (MCI WorldCom and SBC Communications included)
did not perform well, as merger-related regulatory issues
negatively affected the shares. In the race to provide
the bundled product offering of Internet, wireless, cable
TV, and long-distance telephone service, investors are
also concerned about the dilutive impact of large
acquisitions on financial results. The slowdown in the
IPO market in recent weeks has also led to more emphasis
on balance sheet strength and management strategy,
indicating that it is time to be more selective in
telecom investments. We currently prefer well-funded
companies like Mcleodusa, Inc. and Vodafone in Europe.
2
<PAGE>
www.prudential.com (800) 225-1852
The recent market correction has finally brought some
attention to the domestic electric utility sector after
years of underperformance, particularly versus the
telecommunications companies. We modestly increased our
weighting in electric utilities (cheap valuation relative
to the market), but still believe that better growth
potential exists in the deregulated energy
services business and competitive local exchange carriers
in telecommunications. Within the electric/energy sector,
we continue to favor the natural gas companies mentioned
earlier, along with Unicom and Montana Power in the
United States, and Suez Lyonnaise Eaux in Europe.
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 in
operations by these companies should result in higher
credit quality. More recently, we have not found any
opportunities in this category.
What Went Well
A strong area of performance during the past six months
was the Fund's natural gas position holdings included Enron and Williams
Companies. Fast-growing independent power producer Calpine and
competitive local exchange carrier Mcleodusa, Inc., among
others, also did well. BCE, due to strong earnings
results and the announced spin-off related to Nortel
Networks, registered strong performance in international
telecoms.
3
<PAGE>
Global Utility Fund, Inc.
Investment Adviser's Report
What Went Not So Well
The poor relative performance of the large carriers (MCI
WorldCom and SBC Communications) hurt results over the
past six months. As mentioned previously, merger-related
regulatory issues negatively affected these shares.
Selected water utilities (American Water Works and
Anglian Water) performed poorly, as well as electric
utilities that suffered negative earnings revisions, like
CMS Energy. AT&T has also recently underperformed as the
company awaits final clearance for the merger with Media
One, and investors closely watch the results in the cable
TV/telephone buildout.
Looking Ahead
The telecom sector continues to be the best area of
growth within the utilities industry, and recent
volatility has given us the opportunity to review all of
our holdings and look for new opportunities. While we
share the market's concern that competitive pricing and
the tremendous amount of capital that is "chasing"
telecommunications raise questions about future
profitability, we view the recent volatility as an
opportunity to invest in well-funded companies with
strong managements.
We remain bullish on natural gas pipelines and energy
trading companies and continue to look for new ideas both
overseas and domestically. Competitive trading in both
electricity and gas is opening up dramatically across
Continental Europe and potentially Latin America,
providing new growth opportunities for companies like
Enron, Dynegy, and Independent Energy.
In summary, the Fund continues to look for growth in both
telecommunications and deregulated energy markets while
maintaining positions also in more safe defensive
utilities. However, our pursuit of growth and exposure to
diverse international markets will also lead to more
volatility than a more defensive utility fund and that
has hurt relative performance recently. We welcome the
challenges of the tremendous changes occurring across the
utility sectors, and we appreciate your support in these
volatile times.
Prudential Global Utility Fund Management Team
4
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
Shares Description US$ Value (Note 1)
<C> <S> <C> <C>
--------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 98.8%
Common Stocks 78.1%
-------------------------------------------------------------------------------------
Electrical Utilities 18.9%
40,300 Calpine Corp.(a) $ 3,788,200
100,000 CMS Energy Corp. 1,812,500
180,000 COPEL (ADR-Preferred B Shares) (Brazil) 1,530,000
229,347 DPL, Inc. 5,088,637
105,000 DQE, Inc. 4,777,500
200,000 Endesa S.A. (ADR) (Spain) 4,687,500
187,800 Espoon Sahko (ADR) (Finland) 4,133,121
100,000 Independent Energy Holdings PLC (ADR) (United
Kingdom)(a) 4,487,500
140,000 Korea Electric Power Corp. (ADR) (South Korea) 2,213,750
60,000 Montana Power Co. 3,840,000
70,000 Pinnacle West Capital Corp. 1,973,125
750,000 Scottish Power PLC (United Kingdom) 6,064,990
277,300 Shandong Huaneng Power Ltd. (ADR) (China) 901,225
150,000 Unicom Corp. 5,475,000
--------------------
50,773,048
-------------------------------------------------------------------------------------
Gas Utilities 9.4%
359,459 Australian Gas Light Co. (Australia) 1,732,337
125,000 El Paso Energy Corp. 5,046,875
100,000 Enron Corp. 7,487,500
20,000 Equitable Resources, Inc. 896,250
50,000 MCN Energy Group, Inc. 1,250,000
200,000 TransCanada Pipelines Ltd. (Canada) 1,467,144
250,000 Westcoast Energy, Inc. (Canada) 4,175,851
75,000 Williams Companies, Inc. 3,295,312
--------------------
25,351,269
-------------------------------------------------------------------------------------
Telecommunications, Media & Related Industries 44.3%
50,000 ALLTEL Corp. 3,153,125
120,000 AT&T Corp. 6,750,000
55,000 BCE, Inc. (Canada) 6,899,063
</TABLE>
See Notes to Financial Statements 5
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description US$ Value (Note 1)
--------------------------------------------------------------------------------------------
<C> <S> <C> <C>
25,000 BCT Telus Communications, Inc. (Canada)
(Non-voting) $ 740,460
75,000 BCT Telus Communications, Inc. (Canada) (Voting) 2,221,380
105,000 Bell Atlantic Corp. 6,418,125
18,000 British Telecommunications PLC (United Kingdom) 3,386,250
101,096 Cia Telecom de Chile, S.A. (ADR) (Chile) 2,299,934
2,700 Flag Telecom Holdings Ltd.(a) 61,088
71,400 Global Crossing Ltd.(a) 2,922,937
111,222 Hellenic Telecom Organization SA (Greece)(a) 3,162,010
43,000 Koninklijke KPN NV (Netherlands) 4,923,204
122,500 MCI WorldCom, Inc.(a) 5,550,781
60,200 Mcleodusa, Inc. 5,105,713
30,000 Nippon Telegraph & Telephone Corp. (ADR) (Japan) 2,364,375
85,040 NTL, Inc. 7,892,775
200,000 Portugal Telecom, S.A. (ADS) (Portugal) 2,487,500
200,000 SBC Communications, Inc. 8,400,000
115,000 Sprint Corp. 7,245,000
40,000 Telecom Corp. New Zealand Ltd. (ADR) (New
Zealand) 1,467,500
88,917 Telefonica, S.A. (ADR) (Spain) 6,635,431
80,000 Telefonos de Mexico, S.A. (ADR - Class L Shares)
(Mexico) 5,360,000
331,100 Telekomunikacja Polska, S.A. (GDR) (a) (Poland) 3,030,757
361,774 Telstra Corp. Ltd. (Australia) 1,026,358
600,000 Thus Telecom PLC (United Kingdom)(a) 4,593,602
50,000 US West, Inc. 3,631,250
220,000 Videsh Sanchar Nigam Ltd. (GDR) (India) 5,797,000
100,000 Vodafone Group PLC (ADR) (United Kingdom) 5,556,250
--------------------
119,081,868
-------------------------------------------------------------------------------------
Water Utilities & Other 5.5%
28,000 Alcatel Alsthom (France) 6,143,683
41,000 ENI S.p.A. (ADR) (Italy) 2,080,750
15,000 Suez Lyonnaise des Eaux. (France) 2,577,889
35,000 Vivendi S.A. (France) 4,035,727
--------------------
14,838,049
--------------------
Total common stocks (cost $125,423,801) 210,044,234
--------------------
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Shares Description US$ Value (Note 1)
--------------------------------------------------------------------------------------------
<C> <S> <C> <C>
PREFERRED STOCKS 1.4%
Philippine Long Distance Telephone Co. (The
Philippines)
43,700 $3.50 Conv. Ser. III (GDS) $ 1,819,012
92,216 5.75% Conv. Ser. II (GDS) 2,017,856
--------------------
Total preferred stocks (cost $4,189,000) 3,836,868
--------------------
</TABLE>
<TABLE>
DEBT OBLIGATIONS 19.3%
Corporate Bonds 18.6%
<CAPTION>
Principal
Moody's Amount
Rating (000) Description
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Electrical Utilities 13.5%
AES Corp.,
Ba3 $ 1,000 8.375%, 8/15/07 877,500
Alabama Power Co.,
A2 1,000 5.35%, 11/15/03 936,970
Appalachian Power Co.,
Baa1 1,000 6.60%, 5/1/09, Ser. C 918,180
Arizona Public Service Co.,
Baa2 1,000 6.25%, 1/15/05 941,200
Carolina Power & Light Co.,
A2 1,000 5.95%, 3/1/09 898,850
Cleveland Elec. Illum. Co.,
Ba1 1,000 7.43%, 11/1/09 976,770
CMS Energy Corp.,
Ba3 1,000 8.125%, 5/15/02 985,510
Compania De Transporte
Energetica,
BBB-(c) 1,000(b) 9.25%, 4/1/08 (Brazil) 910,000
Consolidated Edison Co. of NY,
Inc.,
A1 1,000 7.625%, 3/1/04 1,010,240
Duke Energy Corp.,
Aa3 1,000 5.875%, 6/1/01 986,020
Eastern Energy Ltd.,
Baa2 1,000(b) 6.75%, 12/1/06 (Australia) 944,960
El Paso Electric Co.,
Baa3 1,000 8.25%, 2/1/03, Ser. C 1,012,990
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Amount
Rating (000) Description US$ Value (Note 1)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Empresa Electrica del Norte
Grande S.A.,
B1 $ 1,000(b) 7.75%, 3/15/06 (Chile) $ 310,000
Florida Power Corp.,
Aa3 500 6.00%, 7/1/03 482,640
Gulf States Utilities Co.,
Baa3 1,000 8.25%, 4/1/04 1,009,480
Hyder PLC,
6.875%, 12/15/07 (United
Baa1 1,000(b) Kingdom) 906,869
Inversora Electrica Buenos
Aires S.A.,
BB+(c) 1,000(b) 9.00%, 9/16/04 (Argentina) 540,000
Monongahela Power Co.,
A1 1,500 7.375%, 7/1/02 1,504,350
Niagara Mohawk Power Corp.,
Baa3 1,000 7.75%, 10/1/08, Ser. G 980,110
Northern States Power Co.,
Aa3 1,000 6.50%, 3/1/28 866,030
NRG Energy, Inc.,
Baa3 1,000 7.50%, 6/15/07 933,760
Oklahoma Gas & Electric Co.,
A1 640 6.50%, 4/15/28 568,659
Pennsylvania Electric Co.,
A2 1,000 6.125%, 4/1/09, Ser. B 913,260
Aaa 1,000 6.50%, 5/1/03 968,730
PP&L Capital Funding Inc.,
Baa2 1,000 6.79%, 11/22/04 973,530
Public Service Co.,
Baa3 1,000 7.10%, 8/1/05 958,280
Baa1 1,000 6.875%, 7/15/09 924,670
Puget Sound Energy, Inc.,
Baa1 1,000 6.46%, 3/9/09 916,310
Quebec Hydro.,
A2 1,000(b) 7.50%, 4/1/16 (Canada) 1,007,790
Southern Investments PLC,
6.80%, 12/1/06 (United
Baa1 1,000(b) Kingdom) 932,710
Southwestern Public Service
Co.,
Aa2 1,000 7.25%, 7/15/04 996,100
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Amount
Rating (000) Description US$ Value (Note 1)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
System Energy Resources, Inc.,
Baa3 $ 1,000 7.71%, 8/1/01 $ 1,000,000
Tampa Electric Co.,
Aa2 1,000 7.75%, 11/1/22 989,080
Texas Utilities Electric Co.,
A3 1,000 8.25%, 4/1/04 1,032,050
Texas-New Mexico Power Co.,
Ba1 1,000 10.75%, 9/15/03 1,010,130
United Utilities PLC.,
A3 1,000(b) 6.45%, 4/1/08 (United Kingdom) 908,240
Virginia Electric & Power Co.,
A2 1,000 6.625%, 4/1/03 982,040
Wisconsin Electric Power Co.,
Aa3 1,000 6.625%, 11/15/06 961,250
Wisconsin Power & Light Co.,
Aa3 500 5.70%, 10/15/08 449,300
Yorkshire Power Finance Ltd.,
6.496%, 2/25/08 (United
Baa1 1,000(b) Kingdom) 903,650
--------------------
36,328,208
-------------------------------------------------------------------------------------
Gas Distribution & Other Industries 0.8%
El Paso Natural Gas Co.,
Baa1 1,000 7.50%, 11/15/26 933,190
Enron Corp.,
Baa1 1,000 7.00%, 8/15/23 861,510
Wisconsin Gas Co.,
Aa2 535 5.50%, 1/15/09 484,956
--------------------
2,279,656
-----------------------------------------------------------------------------------
Telecommunications, Media & Related Industries 4.3%
AT&T Corp.,
A1 1,000 7.75%, 3/1/07 1,018,210
Century Telephone Enterprises,
Inc.,
Baa1 1,000 6.30%, 1/15/08 911,520
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Amount
Rating (000) Description US$ Value (Note 1)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GTE Corp.,
Baa1 $ 1,000 7.51%, 4/1/09 $ 995,610
GTE Florida, Inc.,
A2 1,000 7.25%, 10/15/25 929,430
Indiana Bell Telephone Co.,
Inc.,
Aa2 1,000 7.30%, 8/15/26 957,280
New Jersey Bell Telephone Co.,
Aa2 1,000 8.00%, 6/1/22 1,023,010
New York Telephone Co.,
A2 1,000 6.00%, 4/15/08 910,730
Pacific Bell.,
Aa3 1,000 6.625%, 11/1/09 938,530
Philippine Long Distance
Telephone Co.,
9.25%, 6/30/06 (The
Ba2 1,000(b) Philippines) 952,500
Sprint Capital Corp.,
Baa1 1,000 5.70%, 11/15/03 946,380
Telecomunicaciones de Puerto
Rico,
Baa2 1,000 6.65%, 5/15/06 936,690
MCI Worldcom, Inc.,
A3 1,000 6.40%, 8/15/05 959,950
--------------------
11,479,840
--------------------
Total corporate bonds (cost
$54,194,676) 50,087,704
--------------------
-----------------------------------------------------------------------------------
U.S. Government Obligations 0.7%
United States Treasury Notes,
Aaa 2,000 5.75%, 8/15/03
(cost $2,042,188) 1,959,060
--------------------
Total debt obligations (cost
$56,236,863) 52,046,764
--------------------
Total long-term investments
(cost $185,849,665) 265,927,866
--------------------
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Portfolio of Investments as of March 31, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description US$ Value (Note 1)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS 0.9%
$ 2,315 Lehman Brothers Hldgs., Inc.,
6.10%, due 4/03/00 in the amount
of $2,316,177 (cost $2,315,000;
collateralized by $10,205,000
U.S. Treasury Bond, Zero Coupon
due 11/15/24, value of
collateral $2,368,887) $ 2,315,000
--------------------
Total Investments 99.7%
(cost $188,164,665; Note 4) 268,242,866
Other assets in excess of
liabilities 0.3% 676,427
--------------------
Net Assets 100% $ 268,919,293
--------------------
--------------------
</TABLE>
--------------------------------------------------------------------------------
(a) Non-income-producing security.
(b) US$ Denominated Bonds.
(c) Standard & Poor's rating.
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.
See Notes to Financial Statements 11
<PAGE>
Global Utility Fund, Inc.
Statement of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
March 31, 2000
<S> <C> <C>
---------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $188,164,665) $268,242,866
Foreign currency, at value (cost $46,838) 46,838
Cash 4,544
Dividends and interest receivable 1,713,387
Receivable for Fund shares sold 33,632
Deferred expenses and other assets 6,124
--------------
Total assets 270,047,391
--------------
LIABILITIES
Payable for Fund shares reacquired 641,558
Management fee payable 160,362
Accrued expenses 146,750
Distribution fee payable 132,353
Withholding taxes payable 30,100
Deferred director's fee 16,975
--------------
Total liabilities 1,128,098
--------------
NET ASSETS $268,919,293
--------------
--------------
Net assets were comprised of:
Common stock, at par $ 15,096
Paid-in capital in excess of par 158,466,297
--------------
158,481,393
Undistributed net investment income 323,196
Accumulated net realized gains on investments and foreign
currency transactions 30,038,296
Net unrealized appreciation on investments and foreign
currencies 80,076,408
--------------
Net assets, March 31, 2000 $268,919,293
--------------
--------------
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Statement of Assets and Liabilities (Unaudited) Cont'd.
<TABLE>
<CAPTION>
March 31, 2000
<S> <C> <C>
---------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share ($144,516,441
/ 8,113,711 shares of common stock issued and outstanding) $17.81
Maximum sales charge (5.00% of offering price) .94
Maximum offering price to public $18.75
--------------
--------------
Class B:
Net asset value, offering price and redemption price per
share ($116,267,770 / 6,526,059 shares of common stock
issued and outstanding) $17.82
--------------
--------------
Class C:
Net asset value and redemption price per share ($1,092,717 /
61,333 shares of common stock issued and outstanding) $17.82
Sales charge (1.00% of offering price) .18
Offering price to public $18.00
--------------
--------------
Class Z:
Net asset value, offering price and redemption price per
share ($7,042,365 / 395,073 shares of common stock issued
and outstanding) $17.83
--------------
--------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Global Utility Fund, Inc.
Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
March 31, 2000
<S> <C> <C>
---------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Dividends (net of foreign withholding taxes of $120,094) $ 1,821,465
Interest 2,303,678
--------------
Total income 4,125,143
--------------
Expenses
Management fee 957,588
Distribution fee--Class A 178,673
Distribution fee--Class B 643,698
Distribution fee--Class C 6,149
Transfer agent's fees and expenses 188,000
Custodian's fees and expenses 90,000
Reports to shareholders 31,000
Registration fees 17,000
Audit fee and expenses 16,000
Legal fees and expenses 12,000
Directors' fees and expenses 8,000
Insurance 3,000
Miscellaneous 4,369
--------------
Total expenses 2,155,477
--------------
Net investment income 1,969,666
--------------
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 35,593,558
Foreign currency transactions (5,520)
--------------
35,588,038
--------------
Net change in unrealized appreciation (depreciation) on:
Investments (3,693,784)
Foreign currencies (9,276)
--------------
(3,703,060)
--------------
Net gain on investments and foreign currencies 31,884,978
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 33,854,644
--------------
--------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
March 31, 2000 September 30, 1999
<S> <C> <C> <C>
----------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income $ 1,969,666 $ 5,513,314
Net realized gain on investment and
foreign currency transactions 35,588,038 29,188,396
Net change in unrealized appreciation
(depreciation) of investments and
foreign currencies (3,703,060) 6,993,940
-------------- ------------------
Net increase in net assets resulting
from operations 33,854,644 41,695,650
-------------- ------------------
Dividends and distributions (Note 1)
Dividends from net investment income
Class A (1,405,948) (2,818,425)
Class B (748,853) (1,980,640)
Class C (6,627) (16,127)
Class Z (79,906) (155,936)
-------------- ------------------
(2,241,334) (4,971,128)
-------------- ------------------
Distributions from net realized gains
Class A (16,339,608) (13,406,633)
Class B (15,377,367) (15,777,009)
Class C (129,076) (109,977)
Class Z (800,930) (641,421)
-------------- ------------------
(32,646,981) (29,935,040)
-------------- ------------------
Fund share transactions (net of share
conversions) (Note 5)
Net proceeds from shares sold 20,931,782 37,013,685
Net asset value of shares issued in
reinvestment of dividends and
distributions 29,519,683 29,276,900
Cost of shares reacquired (60,522,322) (78,296,960)
-------------- ------------------
Net decrease in net assets from Fund share
transactions (10,070,857) (12,006,375)
-------------- ------------------
Total decrease (11,104,528) (5,216,893)
NET ASSETS
Beginning of period 280,023,821 285,240,714
-------------- ------------------
End of period(a) $ 268,919,293 $ 280,023,821
-------------- ------------------
-------------- ------------------
---------------
(a) Includes undistributed net investment
income of.............................. $ 323,196 $ 594,864
-------------- ------------------
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements (Unaudited)
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
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 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.
16
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
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.
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
discount paid 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
17
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
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.
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 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
18
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
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 six months
ended March 31, 2000.
PIMS has advised the Fund that it received approximately $12,500 and $400
in front-end sales charges resulting from sales of Class A and Class C shares
during the six months ended March 31, 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 six months ended March 31, 2000 it
received approximately $56,400 and $500 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 six months ended March 31, 2000.
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 six months ended March 31,
2000, the Fund incurred fees of approximately $144,300 for the services of PMFS.
As of March 31, 2000, approximately $23,400 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.
19
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the six months ended March 31, 2000 were $51,989,036 and $85,312,268,
respectively.
The cost basis of investments for federal income tax purposes is
substantially the same for financial reporting purposes and, accordingly, as of
March 31, 2000, net unrealized appreciation for federal income tax purposes was
$80,078,201 (gross unrealized appreciation--$95,279,891; gross unrealized
depreciation--$15,201,690).
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 (Unaudited) Cont'd.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
---------------------------------------------------------- ----------- -------------
<S> <C> <C>
Six months ended March 31, 2000:
Shares sold 575,275 $ 10,272,112
Shares issued in reinvestment of dividends and
distributions 799,059 13,664,402
Shares reacquired (1,381,519) (24,530,131)
----------- -------------
Net decrease in shares outstanding before conversion (7,185) (593,617)
Shares issued upon conversion from Class B 357,882 6,359,293
----------- -------------
Net increase in shares outstanding 350,697 $ 5,765,676
----------- -------------
----------- -------------
Year ended September 30, 1999:
Shares sold 874,576 $ 16,047,074
Shares issued in reinvestment of dividends and
distributions 708,621 12,158,388
Shares reacquired (1,520,250) (27,731,764)
----------- -------------
Net increase in shares outstanding before conversion 62,947 473,698
Shares issued upon conversion from Class B 715,401 13,239,554
----------- -------------
Net increase in shares outstanding 778,348 $ 13,713,252
----------- -------------
----------- -------------
<CAPTION>
Class B
----------------------------------------------------------
<S> <C> <C>
Six months ended March 31, 2000:
Shares sold 212,441 $ 3,804,526
Shares issued in reinvestment of dividends and
distributions 868,447 14,846,838
Shares reacquired (1,580,811) (28,173,203)
----------- -------------
Net decrease in shares outstanding before conversion (499,923) (9,521,839)
Shares reacquired upon conversion into Class A (357,911) (6,359,293)
----------- -------------
Net decrease in shares outstanding (857,834) $ (15,881,132)
----------- -------------
----------- -------------
Year ended September 30, 1999:
Shares sold 661,124 $ 12,049,586
Shares issued in reinvestment of dividends and
distributions 946,862 16,199,281
Shares reacquired (2,278,722) (41,623,502)
----------- -------------
Net decrease in shares outstanding before conversion (670,736) (13,374,635)
Shares reacquired upon conversion into Class A (716,563) (13,239,554)
----------- -------------
Net decrease in shares outstanding (1,387,299) $ (26,614,189)
----------- -------------
----------- -------------
</TABLE>
21
<PAGE>
Global Utility Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C Shares Amount
---------------------------------------------------------- ----------- -------------
Six months ended March 31, 2000:
<S> <C> <C>
Shares sold 329,218 $ 5,808,914
Shares issued in reinvestment of dividends and
distributions 7,575 129,515
Shares reacquired (356,407) (6,325,210)
----------- -------------
Net decrease in shares outstanding (19,614) $ (386,781)
----------- -------------
----------- -------------
Year ended September 30, 1999:
Shares sold 408,004 $ 7,449,727
Shares issued in reinvestment of dividends and
distributions 7,015 120,147
Shares reacquired (388,275) (7,080,380)
----------- -------------
Net increase in shares outstanding 26,744 $ 489,494
----------- -------------
----------- -------------
<CAPTION>
Class Z
----------------------------------------------------------
<S> <C> <C>
Six months ended March 31, 2000:
Shares sold 58,959 $ 1,046,230
Shares issued in reinvestment of dividends and
distributions 51,358 878,928
Shares reacquired (83,250) (1,493,778)
----------- -------------
Net increase in shares outstanding 27,067 $ 431,380
----------- -------------
----------- -------------
Year ended September 30, 1999:
Shares sold 80,233 $ 1,467,298
Shares issued in reinvestment of dividends and
distributions 46,480 799,084
Shares reacquired (101,821) (1,861,314)
----------- -------------
Net increase in shares outstanding 24,892 $ 405,068
----------- -------------
----------- -------------
</TABLE>
22
<PAGE>
Global Utility Fund, Inc
Financial
Highlights
<PAGE>
Global Utility Fund, Inc.
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class A
----------------
Six Months Ended
March 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 17.95
----------------
Income from investment operations
Net investment income .16
Net realized and unrealized gain (loss) on investment and
foreign currency transactions 2.06
----------------
Total from investment operations 2.22
----------------
Less distributions
Dividends from net investment income (.18)
Distributions in excess of net investment income --
Distributions from net realized gains (2.18)
----------------
Total distributions (2.36)
----------------
Net asset value, end of period $ 17.81
----------------
----------------
TOTAL RETURN(a) 12.86%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $144,516
Average net assets (000) $142,939
Ratios to average net assets:
Expenses, including distribution fees 1.20%(c)
Expenses, excluding distribution fees .95%(c)
Net investment income 1.75%(c)
For Class A, B, C and Z shares:
Portfolio turnover rate 19%
</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 than a full year are not
annualized.
(b) Calculated based upon weighted average shares outstanding during the period.
(c) Annualized.
24 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------------------------------------------------------
Year Ended Sepember 30,
----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 17.66 $ 17.52 $ 15.03 $ 14.72 $ 13.66
---------------- ---------------- ---------------- ---------------- ----------------
.41(b) .46(b) .49 .51 .49
2.15 1.67 3.34 .73 1.35
---------------- ---------------- ---------------- ---------------- ----------------
2.56 2.13 3.83 1.24 1.84
---------------- ---------------- ---------------- ---------------- ----------------
(.38) (.46) (.49) (.51) (.48)
-- (.02) (.02) -- --
(1.89) (1.51) (.83) (.42) (.30)
---------------- ---------------- ---------------- ---------------- ----------------
(2.27) (1.99) (1.34) (.93) (.78)
---------------- ---------------- ---------------- ---------------- ----------------
$ 17.95 $ 17.66 $ 17.52 $ 15.03 $ 14.72
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
15.36% 12.90% 26.90% 8.65% 14.23%
$139,374 $123,346 $120,825 $112,800 $124,423
$136,690 $122,384 $116,303 $120,122 $122,837
1.17% 1.18% 1.21% 1.30% 1.31%
.92% .93% .96% 1.05% 1.06%
2.23% 2.49% 3.00% 3.38% 3.58%
8% 20% 13% 13% 15%
</TABLE>
See Notes to Financial Statements 25
<PAGE>
Global Utility Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
----------------
Six Months Ended
March 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 17.96
----------------
Income from investment operations
Net investment income .10
Net realized and unrealized gain (loss) on investment and
foreign currency transactions 2.05
----------------
Total from investment operations 2.15
----------------
Less distributions
Dividends from net investment income (.11)
Distributions in excess of net investment income --
Distributions from net realized gains (2.18)
----------------
Total distributions (2.29)
----------------
Net asset value, end of period $ 17.82
----------------
----------------
TOTAL RETURN(a) 12.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $116,268
Average net assets (000) $128,167
Ratios to average net assets:
Expenses, including distribution fees 1.95%(c)
Expenses, excluding distribution fees .95%(c)
Net investment income .99%(c)
</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 than a full year are not
annualized.
(b) Calculated based upon weighted average shares outstanding during the period.
(c) Annualized.
26 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
----------------------------------------------------------------------------------------------------------
Year Ended September 30,
----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 17.66 $ 17.52 $ 15.03 $ 14.71 $ 13.66
---------------- ---------------- ---------------- ---------------- ----------------
.27(b) .32(b) .37 .40 .39
2.16 1.67 3.34 .74 1.34
---------------- ---------------- ---------------- ---------------- ----------------
2.43 1.99 3.71 1.14 1.73
---------------- ---------------- ---------------- ---------------- ----------------
(.24) (.32) (.37) (.40) (.38)
-- (.02) (.02) -- --
(1.89) (1.51) (.83) (.42) (.30)
---------------- ---------------- ---------------- ---------------- ----------------
(2.13) (1.85) (1.22) (.82) (.68)
---------------- ---------------- ---------------- ---------------- ----------------
$ 17.96 $ 17.66 $ 17.52 $ 15.03 $ 14.71
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
14.49% 12.06% 25.96% 7.90% 13.32%
$132,583 $154,873 $179,270 $187,557 $227,189
$154,643 $177,326 $185,693 $210,305 $237,983
1.92% 1.93% 1.96% 2.05% 2.06%
.92% .93% .96% 1.05% 1.06%
1.48% 1.74% 2.25% 2.62% 2.83%
</TABLE>
See Notes to Financial Statements 27
<PAGE>
Global Utility Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
----------------
Six Months Ended
March 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $17.96
-------
Income from investment operations
Net investment income .11
Net realized and unrealized gain (loss) on investment and
foreign currency transactions 2.04
-------
Total from investment operations 2.15
-------
Less distributions
Dividends from net investment income (.11)
Distributions in excess of net investment income --
Distributions from net realized gains (2.18)
-------
Total distributions (2.29)
-------
Net asset value, end of period $17.82
-------
-------
TOTAL RETURN(a) 12.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $1,093
Average net assets (000) $1,230
Ratios to average net assets:
Expenses, including distribution fees 1.95%(c)
Expenses, excluding distribution fees .95%(c)
Net investment income .99%(c)
</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 than a full year are not
annualized.
(b) Calculated based upon weighted average shares outstanding during the period.
(c) Annualized.
28 See Notes to Financial Statements
<PAGE>
Global Utility Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
----------------------------------------------------------------------------------------------------------
Year Ended September 30,
----------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 17.66 $ 17.52 $ 15.03 $ 14.71 $ 13.66
---------------- ---------------- ---------------- ---------------- ----------------
.27(b) .32(b) .37 .40 .39
2.16 1.67 3.34 .74 1.34
---------------- ---------------- ---------------- ---------------- ----------------
2.43 1.99 3.71 1.14 1.73
---------------- ---------------- ---------------- ---------------- ----------------
(.24) (.32) (.37) (.40) (.38)
-- (.02) (.02) -- --
(1.89) (1.51) (.83) (.42) (.30)
---------------- ---------------- ---------------- ---------------- ----------------
(2.13) (1.85) (1.22) (.82) (.68)
---------------- ---------------- ---------------- ---------------- ----------------
$ 17.96 $ 17.66 $ 17.52 $ 15.03 $ 14.71
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
14.49% 12.06% 25.96% 7.90% 13.32%
$ 1,454 $ 957 $ 760 $ 661 $ 563
$ 1,212 $ 969 $ 727 $ 608 $ 410
1.92% 1.93% 1.96% 2.05% 2.06%
.92% .93% .96% 1.05% 1.06%
1.50% 1.74% 2.25% 2.66% 2.83%
</TABLE>
See Notes to Financial Statements 29
<PAGE>
Global Utility Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class Z
----------------
Six Months Ended
March 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $17.97
-------
Income from investment operations
Net investment income .18
Net realized and unrealized gain (loss) on investment and
foreign currency transactions 2.07
-------
Total from investment operations 2.25
-------
Less distributions
Dividends from net investment income (.21)
Distributions in excess of net investment income --
Distributions from net realized gains (2.18)
-------
Total distributions (2.39)
-------
Net asset value, end of period $17.83
-------
-------
TOTAL RETURN(a) 13.10%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $7,042
Average net assets (000) $7,124
Ratios to average net assets:
Expenses, including distribution fees .95%(c)
Expenses, excluding distribution fees .95%(c)
Net investment income 1.99%(c)
</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 (Unaudited) 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.
Supplemental Proxy Information (Unaudited)
A Special Meeting of Shareholders of the Global Utility Fund, Inc. was held
on November 8, 1999 at Prudential Plaza, 751 Broad Street, 24th Floor, Newark,
New Jersey 07102. The meeting was held for the following purposes:
(1) To elect Trustees as follows: Eugene C. Dorsey, Robert F. Gunia, Robert E.
LaBlanc, Douglas H. McCorkindale, Thomas T. Mooney, David R. Odenath, Jr.,
Stephen Stoneburn, John R. Strangfeld, Jr., Clay T. Whitehead.
(2) To ratify the selection of Board of Trustees of PricewaterhouseCoopers LLP
as independent accountants for the fiscal year ending September 30, 2000.
(3) To approve certain changes to the Fund's fundamental investment
restrictions.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
Votes for Votes against Abstentions
---------- ------------- -----------
<S> <C> <C> <C> <C>
(1) Trustee/Matter
a) Eugene C. Dorsey 7,583,440 -- 275,974
b) Robert F. Gunia 7,605,092 -- 254,322
c) Robert E. LaBlanc 7,599,159 -- 260,255
d) Douglas H. McCorkindale 7,581,701 -- 277,713
e) Thomas T. Mooney 7,588,287 -- 271,127
f) David R. Odenath, Jr. 7,592,245 -- 267,169
g) Stephen Stoneburn 7,589,168 -- 270,246
h) John R. Strangfeld, Jr. 7,604,284 -- 255,130
i) Clay T. Whitehead 7,602,819 -- 256,595
(2) PricewaterhouseCoopers LLP 7,581,627 69,494 208,293
(3) Approval of certain changes to fundamental investment restrictions regarding:
a) Diversification 5,943,226 291,152 342,629
b) Margin transactions 5,734,631 459,570 382,806
c) Investments in securities of
companies with less than three
years of continuous operations 5,750,000 489,256 337,751
d) Senior securities and borrowing
money 5,766,398 438,831 371,778
e) Commodities 5,689,979 525,173 361,855
g) Investment in shares of other
investment companies 5,865,066 371,528 340,413
h) Concentration 5,830,996 339,560 406,451
i) Making loans 5,688,465 496,442 392,100
j) Underwriting securities 5,795,631 391,571 389,805
k) Selling securities short 5,673,938 545,511 357,558
l) Investing for the purpose of taking
control 5,762,775 441,368 372,864
</TABLE>
32
<PAGE>
Global Utility Fund, Inc.
Performance Comparison
These charts are included in the annual report and are
required by the Securities Exchange Commission.
Performance is presented here as a hypothetical $10,000
investment in the Fund since its inception or for 10
years (whichever is shorter). To help you put that return
in context, we are required to include the performance of an unmanaged,
broad-based securities index as well. The index does not
reflect the cost of buying the securities it contains or
the cost of managing a mutual fund. Of course, the index
holdings do not mirror those of the Fund--the index is a
broad-based reference point commonly used by investors to
measure how well they are doing. A definition of the
selected index is also provided. Investors cannot invest
directly in an index.
<PAGE>
Global Utility Fund, Inc.
Getting the Most From Your Prudential Mutual Fund
Performance review
The portfolio manager, who invests your money for you,
reports on successful--and not-so-successful--strategies in this
section of your report. Look for recent purchases and
sales here, as well as information about the sectors the
portfolio manager favors, and any changes that are on the
drawing board.
Portfolio of Investments
This is where the report begins to appear technical, but
it's really just a listing of each security held at the end of the reporting
period, along with valuations and other information.
Please note that sometimes we discuss a security in the
Performance Review that doesn't appear in this listing
because it was sold before the close of the reporting
period.
Statement of Assets and Liabilities
The balance sheet shows the assets (the value of the
Fund's holdings), liabilities (how much the Fund owes), and net assets (the
Fund's equity, or holdings after the Fund pays its debts) as of
the end of the reporting period. It also shows how we
calculate the net asset value per share for each class of
shares. The net asset value is reduced by payment of your
dividend, capital gain, or other distribution, but
remember that the money or new shares are being paid or
issued to you. The net asset value fluctuates daily,
along with the value of every security in the portfolio.
Statement of Operations
This is the income statement, which details income
(mostly interest and
dividends earned) and expenses (including what you pay us
to manage your money). You'll also see capital gains
here--both realized and unrealized.
<PAGE>
www.prudential.com (800) 225-1852
Statement of Changes in Net Assets
This schedule shows how income and expenses translate
into changes in net assets. The Fund is required to pay out the bulk
of its income to shareholders every year, and this
statement shows you how we do it (through
dividends and distributions) and how that affects the net
assets. This statement also shows how money from
investors flowed into and out of the Fund.
Notes to Financial Statements
This is the kind of technical material that can
intimidate readers, but it does contain useful
information. The Notes provide a brief history and
explanation of your Fund's objectives. In addition, they
outline how Prudential Mutual Funds prices securities.
The Notes also explain who manages and distributes the
Fund's shares and, more importantly, how much they are
paid for doing so. Finally, the Notes explain how many
shares are outstanding and the number issued and redeemed
over the period.
Financial Highlights
This information contains many elements from prior pages,
but on a per-share basis. It is designed to help you understand
how the Fund performed, and to compare this year's performance and
expenses to those of prior years.
Independent Auditor's Report
Once a year, an outside auditor looks over our books and
certifies that the information is fairly presented and
complies with generally accepted accounting principles.
Tax Information
This is information that we report annually about how
much of your total return is taxable. Should you have any
questions, you may want to consult a tax adviser.
<PAGE>
Global Utility Fund, Inc.
Getting the Most From Your Prudential Mutual Fund
Performance Comparison
These charts are included in the annual report and are
required by the Securities Exchange Commission.
Performance is presented here as a hypothetical $10,000
investment in the Fund since its inception or for 10
years (whichever is shorter). To help you put that return
in context, we are required to include the performance of an unmanaged,
broad-based securities index as well. The index does not
reflect the cost of buying the securities it contains or
the cost of managing a mutual fund. Of course, the index
holdings do not mirror those of the Fund--the index is a
broad-based reference point commonly used by investors to
measure how well they are doing. A definition of the
selected index is also provided. Investors cannot invest
directly in an index.
<PAGE>
www.prudential.com (800) 225-1852
For More Information
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Directors
Eugene C. Dorsey
Robert F. Gunia
Robert E. LaBlanc
Douglas H. McCorkindale
Thomas T. Mooney
David R. Odenath, Jr.
Stephen Stoneburn
John R. Strangfeld
Clay T. Whitehead
Officers
John R. Strangfeld, President
Robert F. Gunia, Vice President
David R. Odenath, Jr., Vice President
Grace C. Torres, Treasurer
David F. Connor, Secretary
Stephen M. Ungerman, Assistant Treasurer
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
194 Wood Avenue South
Iselin, NJ 08830
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 -- 37936G402
Class Z -- 37936G501
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, 2000, were not audited and, accordingly, no
opinion is expressed on them.
<PAGE>
<PAGE>
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Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
MF150E2 37936G303 37936G204 37936G402 37936G501
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