MERRILL LYNCH
GLOBAL UTILITY
FUND, INC.
FUND LOGO
Annual Report
November 30, 1994
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Merrill Lynch
Global Utility Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MERRILL LYNCH GLOBAL UTILITY FUND, INC.
Officers and
Directors
Arthur Zeikel, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
Donald C. Burke, Vice President
Walter D. Rogers, Vice President and Portfolio Manager
Gerald M. Richard, Treasurer
Patrick D. Sweeney, Secretary
Custodian
The Chase Manhattan Bank, N. A.
4 MetroTech Center, 18th Floor
Brooklyn, New York 11245
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
Important Tax
Information
Of the ordinary income distributions paid quarterly by Merrill Lynch
Global Utility Fund, Inc. during the tax year ended November 30,
1994, 90.35% qualifies for the dividends-received deduction for
corporations. Additionally, the Fund distributed long-term capital
gains of $0.026921 per share to shareholders of record on December
15, 1993.
Please retain this information for your records.
<PAGE>
Worldwide
Investments as of
11/30/94
Top Ten Holdings Percent of
(Equity Investments) Net Assets
Hong Kong Telecommunications, Ltd. PLC 3.0%
Telecom Italia S.p.A. 2.5
China Light & Power Co., Ltd. 2.3
Compagnie Generale des Eaux 2.0
Telekom Malaysia BHD 2.0
Distribuidora Chilectra Metropolitana S.A. (ADR) 1.9
Telecom Corporation of New Zealand Ltd. (ADR) 1.7
Duke Power Co. 1.7
Tele Danmark A/S (ADR) 1.7
General Public Utilities Corp. 1.6
Additions
Companhia Energetica de Minas Gerais
(CEMIG) (ADR)
Electricity Generating Public Co., Ltd.
Korea Electric Power Corp. (ADR)
Manila Electric Co. (MERALCO) 'B'
P.T. Indonesian Satellite Corp. (Indosat) (ADR)
Deletions
AES China Generating Co., Ltd.
British Telecommunications PLC (Part Pay)
Entergy Corp.
Jasmine International Public Co., Ltd.
Williams Co., Inc.
DEAR SHAREHOLDER
Volatility in the US financial markets continued during the November
quarter, largely prompted by concerns of increasing inflationary
pressures. The possibility of continued monetary policy tightening
by the Federal Reserve Board was predominant in the minds of
investors throughout most of the period. Therefore, there was little
surprise in mid-November when the central bank announced the sixth
increase in short-term interest rates thus far this year. Early in
the period, the weakness of the US dollar in foreign exchange
markets also prompted declines in US stock and bond prices, but some
strengthening of the US currency has occurred recently.
<PAGE>
Despite widespread inflationary expectations, recently released data
show that the rate of inflation remains near a 30-year low, as
consumer prices barely rose in October. Other economic results show
little evidence of an overheating economy. Housing starts fell
during October, and higher interest rates will likely continue to
weaken housing demand. Although retail sales are rising, the real
strength in the economy is still in the manufacturing sector.
In the weeks ahead, investors will continue to assess economic data
and inflationary trends in order to gauge whether further increases
in short-term interest rates are likely. In addition, investor
interest will also be focused on the progress that the new Congress
makes on both reducing the Federal budget deficit and providing tax
cuts that promote savings and investment. Legislative progress,
combined with continued indications of moderate and sustainable
levels of economic growth, would be positive for the US capital
markets.
Portfolio Matters
For the quarter ended November 30, 1994, we purchased five new
holdings consisting of four electric companies and one telephone
company. These investments expanded the Fund's geographic reach and
resulted in further diversification. We made new investments in
Brazil and Indonesia and added to our holdings in Thailand, the
Philippines and Korea.
We added Companhia Energetica de Minas Gerais (CEMIG), a Brazilian-
based electric company, to the Fund's portfolio. CEMIG, founded in
1952, started as a power generation company. Today it is a fully
integrated energy company with operations in generation,
transmission and distribution, and is the second-largest Brazilian
electric company as measured by energy sold in 1993. CEMIG serves
the state of Minas Gerais, and supplies electricity to approximately
3.7 million customers. The company generates 70% of the power it
needs with almost all of its generation capacity being
hydroelectric, and purchases the other 30%.
<PAGE>
Another electric utility company added to the portfolio during the
quarter was Manila Electric Co. (MERALCO). This Philippine-based
company primarily buys power from the National Power Corporation and
distributes it to customers in its franchised service territory that
consists of Metro Manila, the provinces of Bulacan, Rizal and Cavite
and parts of the Laguna, Quezon and Barangas provinces. Power
shortages in the Philippines are decreasing. Future electricity
requirements are likely to be the result of pent-up demand plus the
normal growth relative to gross domestic product. The government's
granting of Meralco's distribution rate increase, along with the
company's plan to increase capital expenditures, should result in
substantial rate base growth. We expect high earnings growth for the
company in the years ahead.
We added to our position in Korea Electric Power Corp. (KEPCO) by
buying its shares listed on the New York Stock Exchange. KEPCO, an
integrated electric utility company, owns 95.2% of the total
electricity generating capacity in the Republic of Korea.
Finally, in terms of electric utility stocks, we added Electricity
Generating Public Co., Ltd. (EGAT), a Thailand-based company that
was the first step in the government's privatization of the electric
utility industry. Demand for electricity in Thailand has more than
doubled since 1986. EGAT's strategy is to capitalize on the growing
demand for electricity in Thailand by becoming a major private
sector player as the sector is privatized.
P.T. Indonesian Satellite Corp. (Indosat) is the final new purchase
made during the quarter. The company is the principal provider of
international telecommunications services in Indonesia. Basically,
Indosat directly links Indonesia to approximately 209 countries and
destinations worldwide. Going forward, the company's strategy is to
expand its core business and to participate in domestic
telecommunications infrastructure development.
During the November quarter, we eliminated our holdings in five
companies: British Telecommunications PLC part pay shares, AES China
Generating Co. Ltd., Williams Companies, Inc., Entergy Corp. and
Jasmine International Public Co. Ltd., PLC. British Telecom part pay
shares were sold since the final payment was due and we had
alternative uses for the funds. We sold AES China Generating because
the company had difficulty finding large projects in China after
raising capital for that sole purpose. We eliminated our position in
Williams Co. after the company successfully negotiated the sale of
its telephone subsidiary, Wiltel, which was a source of growth for
the company. Entergy was sold given a deterioration in fundamentals,
in particular, the expected lack of earnings growth for the next few
years. We eliminated Jasmine because it reached our price target.
<PAGE>
We reduced our position in Telecom Corporation of New Zealand Ltd.,
as a result of strong price appreciation. Our positions in several
other companies, primarily domestic, were also modestly reduced as
valuations and size of positions warranted.
Fiscal Year in Review
During the fiscal year ended November 30, 1994, our primary
investment strategy was to expand the Fund's investments in
utilities outside of the United States. The factors motivating this
international diversification were greater investment opportunities
available through privatizations, and more attractive appreciation
potential, given the better earnings growth prospects of
international utilities. Moreover, many utilities outside of the
United States operate in more favorable regulatory environments. As
we implemented this strategy, the Fund's international investments
expanded from 30.7% of net assets one year ago to 45.0% as of fiscal
year-end.
Utility stocks outside of the United States currently offer
substantially lower dividend yields than their US counterparts. In
order to prevent the net yield on portfolio investments from
dropping to an unacceptable level, we ended the year with a 43.5%
position in domestic utility stocks. This tradeoff between capital
appreciation and maintaining dividend income is reflected in the
Fund's performance for the fiscal year. The Fund's total returns for
the 12 months ended November 30, were -4.89% for Class A Shares and
- -5.60% for the Class B Shares. (Complete performance information,
including average annual total returns, can be found on pages 4, 5
and 6 of this report to shareholders.) By comparison, the unmanaged
Financial Times-Actuaries World Utility Index declined 3.01% in the
12 months ended November 30. The domestic component had a -8.30%
total return for the fiscal year while the international component
had a +3.09% return. As for bonds, the period began and ended with
utility fixed-income securities accounting for about 6% of net
assets. Salomon Brothers' global index of utility bonds showed a
- -5.45% total return over the 12 months.
Looking ahead, there is another factor besides lower yields that may
further limit the Fund's ability to expand international
investments. In recent weeks, the US dollar has appreciated in
foreign exchange markets. If this trend continues, share price
appreciation for international holdings may be eroded as foreign
currency-denominated investments are translated back into US
dollars. We will continue to carefully consider the tradeoff between
the capital appreciation potential available outside of the United
States and the more attractive dividend yields of domestic utility
stocks, as well as the implications of currency valuations, as we
evaluate the extent to which we will increase the Fund's
international utility investments.
<PAGE>
In Conclusion
We thank you for your investment in Merrill Lynch Global Utility
Fund, Inc., and we look forward to discussing our investment
strategy and outlook with you in future shareholder reports.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Walter D. Rogers)
Walter D. Rogers
Vice President and Portfolio Manager
January 6, 1995
PERFORMANCE DATA
About Fund
Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System,
which offers four pricing alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 4% and bear no ongoing distribution or account maintenance
fees. Class A Shares are available only to eligible investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.50% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after 10 years.
<PAGE>
* Class C Shares are subject to a distribution fee of 0.55% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 4% and an
account maintenance fee of 0.25% (but no distribution fee).
Performance data for the Fund's Class A and Class B Shares are
presented in the "Performance Summary" and "Average Annual Total
Return" tables on page 5. Data for all of the Fund's shares,
including Class C and Class D Shares, are presented in the "Recent
Performance Results" table.
The "Recent Performance Results" table on page 6 shows investment
results before the deduction of any sales charges for Class A and
Class B Shares for the 12-month and 3-month periods ended November
30, 1994 and for Class C and Class D Shares for the period since
inception through November 30, 1994. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
Total Return
Based on a
$10,000
Investment
GRAPHIC MATERIAL APPEARS HERE. SEE APPENDIX,
GRAPHIC AND IMAGE MATERIAL, ITEM 1.
<TABLE>
Performance
Summary--
Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
12/28/90--12/31/90 $10.00 $10.01 -- -- + 0.10%
1991 10.01 10.93 -- $0.508 +14.74
1992 10.93 11.40 $0.012 0.469 + 8.97
1993 11.40 13.67 0.027 0.424 +24.13
1/1/94--11/30/94 13.67 12.08 -- 0.355 - 9.06
------ ------
Total $0.039 Total $1.756
<PAGE>
Cumulative total return as of 11/30/94: +41.29%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<TABLE>
Performance
Summary--
Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
12/28/90--12/31/90 $10.00 $10.01 -- -- + 0.10%
1991 10.01 10.92 -- $0.435 +13.84
1992 10.92 11.38 $0.012 0.391 + 8.12
1993 11.38 13.63 0.027 0.337 +23.17
1/1/94--11/30/94 13.63 12.04 -- 0.279 - 9.64
------ ------
Total $0.039 Total $1.442
Cumulative total return as of 11/30/94: +37.11%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the ex-dividend date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
Average Annual
Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 9/30/94 - 5.07% -8.87%
Inception (12/28/90) through
9/30/94 +10.35 +9.16
<PAGE>
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/94 -5.80% -9.45%
Inception (12/28/90) through
9/30/94 +9.52 +9.31
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
PERFORMANCE DATA (concluded)
<TABLE>
Recent
Performance
Results
<CAPTION>
12 Month 3 Month
11/30/94 8/31/94++ 11/30/93 % Change % Change++
<S> <C> <C> <C> <C> <C>
Class A Shares* $12.08 $12.92 $13.22 -8.44%(1) -6.50%
Class B Shares* 12.04 12.87 13.17 -8.39(1) -6.45
Class C Shares* 12.05 12.34 -- -- -2.35
Class D Shares* 12.09 12.37 -- -- -2.26
Class A Shares--Total Return* -4.89(2) -5.53(3)
Class B Shares--Total Return* -5.60(4) -5.67(5)
Class C Shares--Total Return* -- -2.35
Class D Shares--Total Return* -- -2.26
<PAGE>
<FN>
*Investment results shown do not reflect any sales charges; results
would be lower if a sales charge was included.
(1)Percent change includes reinvestment of $0.027 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.479 per share ordinary
income dividends and $0.027 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.127 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.378 per share ordinary
income dividends and $0.027 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.101 per share ordinary
income dividends.
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Common Stocks & Warrants Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Telecommunications 138,479 Telecom Argentina Stet S.A.
(ADR)++ (c) $ 5,075,039 $ 7,650,965 1.5%
128,513 Telefonica de Argentina S.A.
(ADR)++ 4,824,906 7,148,535 1.4
------------ ------------ ------
9,899,945 14,799,500 2.9
Utilities--Electric 6,600 Central Costanera S.A. (ADR)++
(c) 158,400 202,950 0.0
Total Common Stocks in Argentina 10,058,345 15,002,450 2.9
Australia Utilities--Gas 2,556,885 Australian Gas & Light Co., Ltd. 6,603,543 8,233,208 1.6
Total Common Stocks in Australia 6,603,543 8,233,208 1.6
Austria Utilities--Gas 34,850 Energie Versorgung Niederoesterreich
AG (EVN) 3,050,015 4,362,949 0.8
Total Common Stocks in Austria 3,050,015 4,362,949 0.8
Brazil Utilities--Electric 160,000 Companhia Energetica de Minas
Gerais (CEMIG)
(ADR)++ (c) 3,840,000 4,200,000 0.8
Total Common Stocks in Brazil 3,840,000 4,200,000 0.8
<PAGE>
Canada Telecommunications 321,700 BC Telecom, Inc. 6,009,937 5,585,882 1.1
Utilities--Electric 458,600 Nova Scotia Power Co. 4,322,473 3,793,873 0.7
Utilities--Gas 573,700 Transcanada Pipeline Co. Ltd.
(ADR)++ 8,602,384 7,242,962 1.4
400,000 Westcoast Energy Inc. 6,901,727 6,800,000 1.3
------------ ------------ ------
15,504,111 14,042,962 2.7
Total Common Stocks in Canada 25,836,521 23,422,717 4.5
Chile Telecommunications 84,300 Compania de Telefonos de Chile
S.A. (ADR)++ 5,871,894 7,249,800 1.4
Utilities--Electric 65,000 Chilgener S.A. (ADR)++ 1,495,000 1,885,000 0.4
186,000 Distribuidora Chilectra Metro-
politana S.A. (ADR)++ (c) 5,031,451 9,636,660 1.9
28,000 Enersis S.A. (ADR)++ 544,224 836,500 0.1
------------ ------------ ------
7,070,675 12,358,160 2.4
Total Common Stocks in Chile 12,942,569 19,607,960 3.8
Denmark Telecommunications 331,000 Tele Danmark A/S (ADR)++ 7,787,106 8,564,625 1.7
Total Common Stocks in Denmark 7,787,106 8,564,625 1.7
France Utilities--Water 107,688 Compagnie Generale des Eaux 11,509,640 10,303,062 2.0
40,000 Lyonnaise des Eaux-Dumez 3,989,365 3,600,357 0.7
------------ ------------ ------
15,499,005 13,903,419 2.7
Total Common Stocks in France 15,499,005 13,903,419 2.7
Germany Utilities--Electric 20,000 VEBA AG 6,526,985 6,563,854 1.3
Total Common Stocks in Germany 6,526,985 6,563,854 1.3
Hong Kong Telecommunications 7,644,000 Hong Kong Telecommunications,
Ltd. PLC 12,600,067 15,122,737 3.0
Utilities--Electric 2,704,700 China Light & Power Co., Ltd. 16,998,370 11,646,130 2.3
1,552,000 Hong Kong Electric Holdings, Ltd. 3,897,526 3,853,109 0.7
------------ ------------ ------
20,895,896 15,499,239 3.0
<PAGE>
Utilities--Gas 2,626,800 The Hong Kong & China Gas Co.,
Ltd. 4,674,416 4,279,725 0.8
218,900 The Hong Kong & China Gas Co.,
Ltd. (Warrants)(a)(b) 0 34,815 0.0
------------ ------------ ------
4,674,416 4,314,540 0.8
Total Common Stocks & Warrants
in Hong Kong 38,170,379 34,936,516 6.8
India Utilities--Electric 49,500 CESC Ltd. (Units) 2,640,330 2,450,250 0.5
Total Common Stocks in India 2,640,330 2,450,250 0.5
Indonesia Telecommunications 5,500 P.T. Indonesian Satellite Corp.
(Indosat)(ADR)++ 176,275 209,000 0.0
Total Common Stocks in Indonesia 176,275 209,000 0.0
Italy Telecommunications 3,091,700 Societa Finanziaria Telefonica
S.p.A. (STET) 5,780,442 7,415,569 1.5
5,000,000 Telecom Italia S.p.A. 7,383,795 12,950,886 2.5
------------ ------------ ------
13,164,237 20,366,455 4.0
Utilities--Gas 1,786,300 Italgas Torino 5,169,953 5,278,345 1.0
Total Common Stocks in Italy 18,334,190 25,644,800 5.0
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Shares Value Percent of
COUNTRY Industries Held Common Stocks & Warrants Cost (Note 1a) Net Assets
<S> <S> <C> <S> <C> <C> <C>
Korea Utilities--Electric 199,200 Korea Electric Power Corp.
(KEPCO)(ADR)++(b) $ 4,008,900 $ 4,183,200 0.8%
Total Common Stocks in Korea 4,008,900 4,183,200 0.8
<PAGE>
Malaysia Telecommunications 1,385,000 Telekom Malaysia BHD 9,502,659 10,189,802 2.0
Total Common Stocks in Malaysia 9,502,659 10,189,802 2.0
Mexico Telecommunications 140,000 Telefonos de Mexico, S.A. de C.V.
(ADR)++ 7,377,170 7,420,000 1.4
Total Common Stocks in Mexico 7,377,170 7,420,000 1.4
New Zealand Telecommunications 166,500 Telecom Corporation of New
Zealand Ltd. (ADR)++ 6,009,095 9,011,813 1.7
Total Common Stocks in New
Zealand 6,009,095 9,011,813 1.7
Philippines Telecommunications 100,000 Philippine Long Distance
Telephone Co. (ADR)++ 4,311,241 5,125,000 1.0
Utilities--Electric 38,000 Manila Electric Co. (MERALCO) 'B' 497,246 519,280 0.1
Total Common Stocks in the
Philippines 4,808,487 5,644,280 1.1
Spain Telecommunications 537,300 Telefonica de Espana S.A. 6,164,064 6,890,565 1.3
Utilities--Electric 154,800 Empresa Nacional de Electricidad
S.A. (ADR)++ 5,123,952 7,004,700 1.4
92,000 Hidrocantabrico S.A. 3,107,921 2,696,794 0.5
808,500 Iberdrola I S.A. 4,998,321 5,424,973 1.1
------------ ------------ ------
13,230,194 15,126,467 3.0
Total Common Stocks in Spain 19,394,258 22,017,032 4.3
Thailand Telecommunications 15,000 TelecomAsia Corporation Public
Co., Ltd. (ADR)++(c) 328,050 450,000 0.1
Utilities--Electric 332,000 Electricity Generating Public
Co., Ltd. (EGAT) 296,433 536,724 0.1
Total Common Stocks in Thailand 624,483 986,724 0.2
<PAGE>
United Telecommunications 845,000 British Telecommunications PLC
Kingdom (Ord.) 5,900,759 5,027,463 1.0
180,000 Vodafone Group PLC (ADR)++ 5,355,931 5,850,000 1.1
------------ ------------ ------
11,256,690 10,877,463 2.1
Utilities--Electric 445,000 Powergen PLC (Ord.) 3,253,482 3,797,214 0.7
Total Common Stocks in the
United Kingdom 14,510,172 14,674,677 2.8
United Telecommunications 160,100 Airtouch Communications, Inc. 3,031,722 4,342,712 0.8
States 201,800 Ameritech Corp. 7,640,760 7,971,100 1.5
138,700 Bell Atlantic Corp. 7,358,558 6,952,337 1.3
149,400 BellSouth Corp. 8,454,788 7,750,125 1.5
235,700 GTE Corp. 8,322,438 7,218,312 1.4
147,700 NYNEX Corp. 6,204,823 5,557,212 1.1
160,100 Pacific Telesis Group 4,187,524 4,642,900 0.9
197,900 Southwestern Bell Corp. 6,889,718 8,188,112 1.6
217,900 U S West Inc. 10,138,272 7,680,975 1.5
------------ ------------ ------
62,228,603 60,303,785 11.6
Utilities--Electric 289,500 Allegheny Power System, Inc. 7,707,195 6,296,625 1.2
207,200 Boston Edison Co. 5,530,724 4,739,700 0.9
184,000 Central & SouthWest Corp. 5,218,349 3,910,000 0.8
371,962 CINergy Corp. (d) 8,749,712 8,276,155 1.6
218,200 Consolidated Edison Co.
of New York 6,893,524 5,645,925 1.1
138,900 Detroit Edison Co. 4,670,083 3,715,575 0.7
110,250 Dominion Resources, Inc. 4,427,302 4,093,031 0.8
215,000 Duke Power Co. 8,718,203 8,761,250 1.7
324,300 General Public Utilities Corp. 9,600,670 8,350,725 1.6
234,100 Houston Industries, Inc. 11,139,344 7,959,400 1.5
244,800 NIPSCO Industries, Inc. 6,616,371 7,160,400 1.4
221,000 New York State Electric &
Gas Corp. 7,952,312 4,116,125 0.8
185,700 Northeast Utilities Co. 4,974,996 3,969,338 0.8
295,500 PECO Energy Co. 8,689,805 7,128,937 1.4
323,000 PacifiCorp 6,465,176 5,975,500 1.1
192,000 Public Service Co. of Colorado 5,832,890 5,472,000 1.1
283,000 SCEcorp 6,379,546 3,962,000 0.8
381,200 Southern Co. 6,665,086 7,909,900 1.5
178,300 Texas Utilities Co. 7,234,091 5,817,037 1.1
177,300 Western Resources Co. 5,664,717 4,986,562 1.0
------------ ------------ ------
139,130,096 118,246,185 22.9
<PAGE>
Utilities--Gas 130,000 The Brooklyn Union Gas Co. 3,371,550 2,892,500 0.6
226,000 The Coastal Corp. 6,038,593 5,819,500 1.1
108,300 El Paso Natural Gas Co. 4,196,831 3,641,588 0.7
284,000 Enron Corp. 6,456,111 7,668,000 1.5
244,300 NICOR Inc. 5,363,453 5,496,750 1.1
79,000 National Fuel Gas Company 2,374,740 2,054,000 0.4
108,000 New Jersey Resources Corp. 3,063,867 2,470,500 0.5
236,000 Questar Corp. 6,554,436 6,372,000 1.2
247,300 Sonat, Inc. 5,395,134 6,955,312 1.3
90,000 Washington Gas Light Co. 3,241,317 3,003,750 0.6
------------ ------------ ------
46,056,032 46,373,900 9.0
Total Common Stocks in the
United States 247,414,731 224,923,870 43.5
Total Investments in Common
Stocks & Warrants 465,115,218 466,153,146 90.2
Face
Amount Fixed-Income Securities
<S> <S> <S> <C> <S> <C> <C> <C>
Australia Telecommuni- US$ 7,960,000 Telstra Corp., Ltd., 6.50% due
cations 7/31/2003 (c) 8,115,578 6,930,175 1.3
Total Fixed-Income Securities
in Australia 8,115,578 6,930,175 1.3
Canada Utilities--Electric 2,000,000 Hydro-Quebec, 9.23% due 12/04/2000 2,038,540 2,061,540 0.4
Total Fixed-Income Securities
in Canada 2,038,540 2,061,540 0.4
Japan Telecommunications 4,000,000 Nippon Telegraph & Telephone
Corp., 9.50% due 7/27/1998 4,244,380 4,174,040 0.8
Total Fixed-Income Securities
in Japan 4,244,380 4,174,040 0.8
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Face Value Percent of
COUNTRY Industries Amount Fixed-Income Securities Cost (Note 1a) Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
Korea Telecommuni- US$ 2,500,000 Korea Telecom, 7.40% due
cations 12/01/1999 $ 2,499,500 $ 2,368,450 0.4%
Utilities--Electric 6,000,000 Korea Electric Power Corp.,
6.375% due 12/01/2003 5,913,060 5,067,900 1.0
Total Fixed-Income Securities
in Korea 8,412,560 7,436,350 1.4
<PAGE>
United Telecommunications 3,500,000 Bell Cablemedia PLC, 11.75%*
Kingdom due 7/15/2004 2,046,245 1,855,000 0.4
Total Fixed-Income Securities
in the United Kingdom 2,046,245 1,855,000 0.4
United Telecommuni- 4,000,000 Rochester Telephone Corp., 9.25%
States cations due 6/01/2000 4,111,200 4,155,160 0.8
Utilities-- 4,000,000 Consumer Power Co., 8.875%
Electric due 11/15/1999 4,190,000 3,988,800 0.8
4,000,000 Niagara Mohawk Power Corp.,
9.50% due 6/01/2000 4,197,640 4,033,400 0.8
------------ ------------ ------
8,387,640 8,022,200 1.6
Total Fixed-Income Securities
in the United States 12,498,840 12,177,360 2.4
Total Investments in Fixed-
Income Securities 37,356,143 34,634,465 6.7
Short-Term Securities
<S> <C> <S> <C> <C> <C>
Repurchase 14,706,000 Swiss Bank Corp., purchased on
Agreement** 11/30/1994 to yield 5.68% to
12/01/1994 14,706,000 14,706,000 2.9
Total Investments in Short-Term
Securities 14,706,000 14,706,000 2.9
Total Investments $517,177,361 515,493,611 99.8
============
Other Assets Less Liabilities 1,033,555 0.2
------------ ------
Net Assets $516,527,166 100.0%
============ ======
<PAGE>
<FN>
*Represents the yield to maturity.
**Repurchase Agreements are fully collateralized
by US Government and Agency Obligations.
++American Depositary Receipts (ADR).
(a)Warrants entitle the Fund to purchase a prede-
termined number of shares of Common Stock.
The purchase price and number of shares are
subject to adjustment under certain conditions
until the expiration date.
(b)Non-income producing security.
(c)Restricted securities as to resale. The value of the Fund's
investment in restricted securities was approximately
$29,071,000, representing 5.6% of net assets.
<CAPTION>
Aquisition Value
Issue Date(s) Cost (Note 1a)
<S> <C> <C> <C>
Central Costanera S.A. (ADR) 12/17/1993 $ 158,400 $ 202,950
Companhia Energetica de Minas Gerais
(CEMIG) (ADR) 9/22/1994 3,840,000 4,200,000
Distribuidora Chilectra Metropolitana
S.A. (ADR) 2/12/1992--12/21/1993 5,031,451 9,636,660
Telecom Argentina Stet S.A. (ADR) 3/23/1992--12/22/1993 5,075,039 7,650,965
TelecomAsia Corporation Public Co.,
Ltd. (ADR) 11/15/1993 328,050 450,000
Telstra Corp., Ltd., 6.50%
due 7/31/2003 7/26/1993--9/29/1993 8,115,578 6,930,175
Total $22,548,518 $29,070,750
=========== ===========
(d)Formerly PSI Resources, Inc.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
<CAPTION>
As of November 30, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$517,177,361)(Note 1a) $515,493,611
Cash 247,529
Receivables:
Dividends $ 2,125,977
Interest 868,552
Capital shares sold 727,238 3,721,767
------------
Deferred organization expenses (Note 1f) 22,634
Prepaid registration fees and other assets (Note 1f) 29,118
------------
Total assets 519,514,659
------------
<PAGE>
Liabilities: Payables:
Capital shares redeemed 1,998,820
Distributor (Note 2) 290,437
Investment adviser (Note 2) 261,043 2,550,300
------------
Accrued expenses and other liabilities 437,193
------------
Total liabilities 2,987,493
------------
Net Assets: Net assets $516,527,166
============
Net Assets Class A Shares of Common Stock, $0.10 par value, 100,000,000 shares
Consist of: authorized $ 468,947
Class B Shares of Common Stock, $0.10 par value, 100,000,000 shares
authorized 3,814,020
Class C Shares of Common Stock, $0.10 par value, 100,000,000 shares
authorized 3,693
Class D Shares of Common Stock, $0.10 par value, 100,000,000 shares
authorized 1,974
Paid-in capital in excess of par 512,402,330
Undistributed investment income--net 2,733,344
Accumulated realized capital losses on investments and foreign currency
transactions--net (Note 6) (1,216,717)
Unrealized depreciation on investments and foreign currency trans-
actions--net (1,680,425)
------------
Net assets . $516,527,166
============
Net Asset Class A--Based on net assets of $56,658,641 and 4,689,468 shares
Value: outstanding $ 12.08
============
Class B--Based on net assets of $459,184,758 and 38,140,203 shares
outstanding $ 12.04
============
Class C--Based on net assets of $445,104 and 36,926 shares
outstanding $ 12.05
============
Class D--Based on net assets of $238,663 and 19,741 shares
outstanding $ 12.09
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Year Ended November 30, 1994
<S> <S> <C> <C>
Investment Dividends (net of $860,480 foreign withholding tax) $ 23,802,839
Income Interest and discount earned 4,586,840
(Notes 1d ------------
& 1e): Total income 28,389,679
------------
Expenses: Distribution fees--Class B (Note 2) $ 4,239,815
Investment advisory fees (Note 2) 3,831,948
Transfer agent fees--Class B (Note 2) 704,461
Custodian fees 342,032
Printing and shareholder reports 232,478
Accounting services (Note 2) 133,772
Registration fees (Note 1f) 125,316
Professional fees 97,683
Transfer agent fees--Class A (Note 2) 76,804
Amortization of organization expenses (Note 1f) 20,893
Directors' fees and expenses 18,508
Pricing fees 829
Other 17,383
------------
Total expenses 9,841,922
------------
Investment income--net 18,547,757
------------
Realized & Realized gain (loss) from:
Unrealized Investments--net (1,319,689)
Gain (Loss) Foreign currency transactions--net 49,645 (1,270,044)
on Invest- ------------
ments & Change in unrealized appreciation/depreciation on:
Foreign Investments--net (52,886,482)
Currency Foreign currency transactions--net 2,881 (52,883,601)
Transactions-- ------------ ------------
Net(Notes Net realized and unrealized loss on investments and
1b, 1e & 3): foreign currency transactions (54,153,645)
------------
Net Decrease in Net Assets Resulting from Operations $(35,605,888)
------------
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year Ended
November 30,
Increase (Decrease) in Net Assets: 1994 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 18,547,757 $ 11,336,371
Realized gain (loss) on investments and foreign currency
transactions--net (1,270,044) 4,716,322
Change in unrealized appreciation/depreciation on investments
and foreign currency transactions--net (52,883,601) 37,518,154
------------ ------------
Net increase (decrease) in net assets resulting from operations (35,605,888) 53,570,847
------------ ------------
Dividends & Investment income--net:
Distribu- Class A (2,661,239) (1,417,410)
tions to Class B (16,205,857) (8,066,873)
Shareholders Realized gain on investments--net:
(Note 1g): Class A (219,759) (33,059)
Class B (1,627,301) (223,915)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (20,714,156) (9,741,257)
------------ ------------
Capital Share Net increase (decrease) in net assets derived from
Transactions capital share transactions (105,325,044) 404,174,719
(Note 4): ------------ ------------
Net Assets: Total increase (decrease) in net assets (161,645,088) 448,004,309
Beginning of year 678,172,254 230,167,945
------------ ------------
End of year* $516,527,166 $678,172,254
============ ============
<FN>
*Undistributed investment income--net $ 2,733,344 $ 3,052,683
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
Class A
For the
Period
The following per share data and ratios have been derived Dec. 28,
from information provided in the financial statements. For the Year 1990++ to
Ended November 30, Nov. 30,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.22 $ 11.23 $ 10.67 $ 10.00
Operating -------- -------- -------- --------
Performance: Investment income--net .94 .40 .47 .49
Realized and unrealized gain (loss) on investments and
foreign currency transactions--net (1.57) 2.01 .57 .56
-------- -------- -------- --------
Total from investment operations (.63) 2.41 1.04 1.05
-------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.47) (.41) (.48) (.38)
Realized gain on investments--net (.04) (.01) -- --
-------- -------- -------- --------
Total dividends and distributions (.51) (.42) (.48) (.38)
-------- -------- -------- --------
Net asset value, end of period $ 12.08 $ 13.22 $ 11.23 $ 10.67
======== ======== ======== ========
Total Based on net asset value per share (4.89%) 21.80% 10.05% 10.83%+++
Investment ======== ======== ======== ========
Return:**
Ratios to Expenses .86% .82% 1.01% 1.28%*
Average ======== ======== ======== ========
Net Assets: Investment income--net 3.58% 3.57% 4.47% 5.57%*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 56,659 $ 81,718 $ 29,772 $ 20,579
Data: ======== ======== ======== ========
Portfolio turnover 17.02% 8.92% 30.91% 20.51%
======== ======== ======== ========
<PAGE>
<CAPTION>
Class B
For the
Period
The following per share data and ratios have been derived Dec. 28,
from information provided in the financial statements. For the Year 1990++ to
Ended November 30, Nov. 30,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.17 $ 11.20 $ 10.65 $ 10.00
Operating -------- -------- -------- --------
Performance: Investment income--net .74 .33 .39 .40
Realized and unrealized gain (loss) on investments and foreign
currency transactions--net (1.46) 1.98 .57 .58
-------- -------- -------- --------
Total from investment operations (.72) 2.31 .96 .98
-------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.37) (.33) (.41) (.33)
Realized gain on investments--net (.04) (.01) -- --
-------- -------- -------- --------
Total dividends and distributions (.41) (.34) (.41) (.33)
-------- -------- -------- --------
Net asset value, end of period $ 12.04 $ 13.17 $ 11.20 $ 10.65
======== ======== ======== ========
Total Based on net asset value per share (5.60%) 20.86% 9.20% 10.05%+++
Investment ======== ======== ======== ========
Return:**
Ratios to Expenses, excluding account maintenance and/or
Average distribution fees .88% .84% 1.02% 1.29%*
Net Assets: ======== ======== ======== ========
Expenses 1.63% 1.59% 1.77% 2.04%*
======== ======== ======== ========
Investment income--net 2.82% 2.81% 3.65% 4.78%*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $459,185 $596,455 $200,396 $90,966
Data: ======== ======== ======== ========
Portfolio turnover 17.02% 8.92% 30.91% 20.51%
======== ======== ======== ========
<PAGE>
<CAPTION>
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. October 21, 1994++
to November 30, 1994
Increase (Decrease) in Net Asset Value: Class C Class D
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 12.34 $ 12.37
Operating ------------ ------------
Performance: Investment income--net .01 .02
Realized and unrealized gain on investments and foreign currency
transactions--net (.30) (.30)
------------ ------------
Total from investment operations (.29) (.28)
------------ ------------
Net asset value, end of period $ 12.05 $ 12.09
============ ============
Total Based on net asset value per share (2.35%)+++ (2.26%)+++
Investment ============ ============
Return:**
Ratios to Expenses, excluding account maintenance and/or
Average distribution fees .80%* .83%*
Net Assets: ============ ============
Expenses 1.60%* 1.08%*
============ ============
Investment income--net 3.01%* 3.25%*
============ ============
Supplemental Net assets, end of period (in thousands) $ 445 $ 239
Data: ============ ============
Portfolio turnover 17.02% 17.02%
============ ============
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Global Utility Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The Fund offers four classes of
shares under the Merrill Lynch Select Pricing SM System. Shares of
Class A and Class D are sold with a front-end sales charge. Shares
of Class B and Class C may be subject to a contingent deferred sales
charge. All classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions,
except that Class B, Class C and Class D Shares bear certain
expenses related to the account maintenance of such shares, and
Class B and Class C Shares also bear certain expenses related to the
distribution of such shares. Each class has exclusive voting rights
with respect to matters relating to its account maintenance and
distribution expenditures. The following is a summary of significant
accounting policies followed by the Fund.
(a) Valuation of Securities--Securities traded in the over-the-
counter market are valued at the last available bid price or yield
equivalents obtained from one or more dealers in the over-the-
counter market prior to the time of valuation. Portfolio securities
which are traded on stock exchanges are valued at the last sale
price on the principal market on which such securities are traded,
as of the close of business on the day the securities are being
valued or, lacking any sales, at the last available bid price. Short-
term securities are valued at amortized cost, which approximates
market value.
Options written are valued based upon the last asked price in the
case of exchange-traded options or, in the case of options traded in
the over-the-counter market, at the average of the last asked price
as obtained from one or more dealers. Options purchased by the Fund
are valued at their last bid price in the case of exchange-traded
options or, in the case of options traded in the over-the-counter
market, at the average of the last bid price as obtained from two or
more dealers. Other investments, including futures contracts and
related options, are stated at market value.
Securities and assets 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, including
valuations furnished by a pricing service retained by the Fund.
<PAGE>
(b) Foreign Currency Transactions--Transactions denominated in
foreign currencies are recorded at the exchange rate prevailing when
recognized. Assets and liabilities denominated in foreign currencies
are valued at the exchange rate at the end of the period. Foreign
currency transactions are the result of settling (realized) or
valuing (unrealized) receivables or payables expressed in foreign
currencies into US dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on
investments.
The Fund is authorized to enter into forward foreign exchange
contracts as a hedge against either specific transactions or
portfolio positions. Such contracts are not entered on the Fund's
records. However, the effect on operations is recorded from the date
the Fund enters into such contracts. Premium or discount is
amortized over the life of the contracts.
(c) Options--The Fund is authorized to purchase and write call and
put options. When the Fund sells an option, an amount equal to the
premium received by the Fund is reflected as an asset and an
equivalent liability. The amount of the liability is subsequently
marked to market to reflect the current market value of the option
written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction is less than or exceeds the premiums paid or
received).
Written and purchased options are non-income producing investments.
(d) Income Taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to
its shareholders. Therefore, no Federal income tax provision is
required. Under the applicable foreign tax law, a withholding tax
may be imposed on interest, dividends and capital gains at various
rates.
(e) Security Transactions and Investment Income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
discount) is recognized on the accrual basis. Dividend income is
recorded on the ex-dividend date, except that if the ex-dividend
date has passed, certain dividends from foreign securities are
recorded as soon as the Fund is informed of the ex-dividend date.
Realized gains and losses on security transactions are determined on
the identified cost basis.
<PAGE>
(f) Deferred Organization Expenses and Prepaid Registration Fees--
Deferred organization expenses are charged to expense over a five-
year period. Prepaid registration fees are charged to expense as the
related shares are issued.
(g) Dividends and Distributions--Dividends and distributions paid by
the Fund are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner
of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-
owned subsidiary of Merrill Lynch & Co. ("ML & Co."). The limited
partners are ML & Co. and Merrill Lynch Investment Management, Inc.
("MLIM"), which is also an indirect wholly-owned subsidiary of ML &
Co. The Fund has also entered into a Distribution Agreement and a
Distribution Plan with Merrill Lynch Funds Distributor, Inc. ("MLFD"
or "Distributor"), a wholly-owned subsidiary of MLIM.
MLAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operation of the Fund. For such
services, the Fund pays a monthly fee of 0.60%, on an annual basis,
of the average daily value of the Fund's net assets. The most
restrictive annual expense limitation requires that the Investment
Adviser reimburse the Fund to the extent the Fund's expenses
(excluding interest, taxes, distribution fees, brokerage fees and
commissions, and extraordinary items) exceed 2.5% of the Fund's
first $30 million of average daily net assets, 2.0% of the next $70
million of average daily net assets and 1.5% of the average daily
net assets in excess thereof. MLAM's obligation to reimburse the
Fund is limited to the amount of the advisory fee. No fee payment
will be made to the Investment Adviser during any fiscal year which
will cause such expenses to exceed the most restrictive expense
limitation applicable at the time of such payment.
Pursuant to the distribution plans (the "Distribution Plans")
adopted by the Fund in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays the Distributor
ongoing account maintenance and distribution fees. The fees are
accrued daily and paid monthly at annual rates based upon the
average daily net assets of the shares as follows:
<PAGE>
Account
Maintenance Distribution
Fee Fee
Class B 0.25% 0.50%
Class C 0.25% 0.55%
Class D 0.25% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the year ended November 30, 1994, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Fund's Class A and Class D shares as follows:
MLFD MLPF&S
Class A $19,018 $317,838
Class D $ 565 $ 5,594
MLPF&S received contingent deferred sales charges of $1,469,812
relating to transactions in Class B Shares of Common Stock, and
$27,114 in commissions on the execution of portfolio security
transactions for the Fund for the year ended November 30, 1994.
For the year ended November 30, 1994, the Fund paid Merrill Lynch
Security Pricing Service, an affiliate of MLPF&S, $829 for security
price quotations.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by MLAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of MLAM, MLIM, MLPF&S, FDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended November 30, 1994 were $99,947,597 and
$116,423,543, respectively.
<PAGE>
Net realized and unrealized gains (losses) as of November 30, 1994
were as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $(1,319,689) $ (1,683,750)
Foreign currency transactions 49,645 3,325
----------- --------------
Total $(1,270,044) $ (1,680,425)
=========== ==============
As of November 30, 1994, net unrealized depreciation for Federal
income tax purposes aggregated $1,683,750, of which $43,003,345
related to appreciated securities and $44,687,095 related to
depreciated securities. The aggregate cost of investments at
November 30, 1994 for Federal income tax purposes was $517,177,361.
NOTES TO FINANCIAL STATEMENTS (concluded)
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share
transactions was $(105,325,044) and $404,174,719 for the years ended
November 30, 1994 and November 30, 1993, respectively.
Transactions in capital shares for each class were as follows:
Class A Shares for the Year Dollar
Ended November 30, 1994 Shares Amount
Shares sold 1,418,075 $ 18,617,407
Shares issued to shareholders
in reinvestment of dividends &
distributions 175,820 2,216,368
----------- --------------
Total issued 1,593,895 20,833,775
Shares redeemed (3,085,387) (39,503,880)
----------- --------------
Net decrease (1,491,492) $(18,670,105)
=========== ==============
<PAGE>
Class A Shares for the Year Dollar
Ended November 30, 1993 Shares Amount
Shares sold 4,349,217 $ 56,997,490
Shares issued to shareholders
in reinvestment of dividends &
distributions 85,983 1,081,152
----------- --------------
Total issued 4,435,200 58,078,642
Shares redeemed (905,090) (11,584,655)
----------- --------------
Net increase 3,530,110 $ 46,493,987
=========== ==============
Class B Shares for the Year Dollar
Ended November 30, 1994 Shares Amount
Shares sold 8,594,406 $112,616,998
Shares issued to shareholders
in reinvestment of dividends &
distributions 1,125,104 14,149,052
----------- --------------
Total issued 9,719,510 126,766,050
Shares redeemed (16,864,631) (214,110,349)
----------- --------------
Net decrease (7,145,121) $ (87,344,299)
=========== ==============
Class B Shares for the Year Dollar
Ended November 30, 1993 Shares Amount
Shares sold 30,702,352 $ 399,813,619
Shares issued to shareholders in
reinvestment of dividends &
distributions 501,195 6,292,835
----------- --------------
Total issued 31,203,547 406,106,454
Shares redeemed (3,809,433) (48,425,722)
----------- --------------
Net increase 27,394,114 $ 357,680,732
=========== ==============
<PAGE>
Class C Shares for the Period Dollar
Oct. 21, 1994++ to Nov. 30, 1994 Shares Amount
Shares sold 36,927 $ 446,777
Shares redeemed (1) (13)
----------- --------------
Net increase 36,926 $ 446,764
=========== ==============
[FN]
++Commencement of Operations.
Class D Shares for the Period Dollar
Oct. 21, 1994++ to Nov. 30, 1994 Shares Amount
Shares sold 35,477 $ 437,644
Shares redeemed (15,736) (195,048)
----------- --------------
Net increase 19,741 $ 242,596
=========== ==============
[FN]
++Commencement of Operations.
5. Commitments:
At November 30, 1994, the Fund had entered into forward exchange
contracts under which it agreed to sell various currencies with
approximate values of $1,311,563.
6. Capital Loss Carryforward:
At November 30, 1994, the Fund had a capital loss carryforward
of approximately $567,000, all of which expires in 2002. This
amount will be available to offset like amounts of any future
taxable gains.
7. Subsequent Event:
On December 15, 1994, the Fund's Board of Directors declared an
ordinary income dividend in the amount of $0.12550 per Class A
Share, $0.100809 per Class B Share, $0.117250 per Class C Share, and
$0.123948 per Class D Share, payable on December 22, 1994 to
shareholders on record as of December 14, 1994.
<PAGE>
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
Merrill Lynch Global Utility Fund, Inc.:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
Global Utility Fund, Inc. as of November 30, 1994, the related
statements of operations for the year then ended and changes in net
assets for each of the years in the two-year period then ended, and
the financial highlights for the three-year period then ended and
the period December 28, 1990 (commencement of operations) to
November 30, 1991. These financial statements and the financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at November
30, 1994, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Global Utility Fund, Inc. as of November 30, 1994, the
results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
January 6, 1995
</AUDIT-REPORT>
APPENDIX, GRAPHIC AND IMAGE MATERIAL.
ITEM 1:
Total Return Based on a $10,000 Investment
<PAGE>
A line graph depicting the growth of an investment in the Fund's Class A
and Class B Shares compared to the growth of an investment in the
Financial Times--Actuaries World Index and the Financial Times--
Actuaries World Utility Index. Beginning and ending values are:
12/28/90** 11/94
ML Global Utility Fund+--
Class A Shares* $ 9,600 13,564
ML Global Utility Fund+--
Class B Shares* $10,000 13,611
Financial Times--
Actuaries World Index++ $10,000 14,620
Financial Times--
Actuaries World Utility Index+++ $10,000 14,475
<PAGE>
*Assuming maximum sales charge, transaction costs and other operating
expenses, including advisory fees.
**Commencement of Operations
+ML Global Utility Fund, Inc. invests at least 65% of its total assets
in common stocks (including preferred or debt securities convertible
into common stocks), prferred stocks and debt securities issued by
domestic and foreign companies in the utilities industries.
++This unmanaged market capitalization-weighted Index is comprised of
nearly 2,200 equities from 24 countries in 12 regions, including the
United States.
+++This unmanaged market capitalization-weighted Index is comprised of
utility stocks from any of the 24 countries that make up the
Financial Times--Actuaries World Index.
