MERRILL LYNCH
GLOBAL UTILITY
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Annual Report
November 30, 1999
<PAGE>
MERRILL LYNCH GLOBAL UTILITY FUND, INC.
Sector Diversification As a Percentage of Equities as of November 30, 1999
Pie graph depicting the following percentages:
Telecommunications 61.8%
Utilities--Electric 24.7%
Utilities--Gas 9.2%
Utilities--Water 4.3%
Geographical Diversification As a Percentage of Equities as of November 30, 1999
Pie graph depicting the following percentages:
Europe 53.1%
United States 36.1%
Asia/Pacific Basin 6.4%
Americas (Ex-US) 4.4%
<PAGE>
Merrill Lynch Global Utility Fund, Inc., November 30, 1999
DEAR SHAREHOLDER
During the quarter ended November 30, 1999, US economic growth continued
strengthening while inflationary pressures remained contained. The US financial
markets were volatile, as stock prices declined for the third consecutive month
in September, but then rebounded in October and advanced on a technology- driven
rally in November. Significant strength in small-capitalization stocks also
emerged in November, particularly in the small cap growth sector as reflected in
the +10.57% rise in the unmanaged Russell 2000 Growth Index.
Throughout the latter half of the period, investor psychology was mixed as to
whether the Federal Reserve Board would increase interest rates for the third
time this year. At its meeting on November 16, 1999, the central bank announced
its move to tighten 25 basis points (0.25%), essentially putting short-term
interest rates back to where they were before the three quarter-point cuts that
were made last fall. Although long-term bond yields also increased during the
period, investors appeared to accept that the move by the Federal Reserve Board
would contain inflationary pressure. However, this view may not hold if economic
growth continues unabated in the New Year.
Fiscal Year in Review
During the fiscal year ended November 30, 1999, we adhered to the Fund's stated
investment objective of seeking both capital appreciation and current income.
Moreover, we focused our attention on the Year 2000 issue given the critical
importance of the utility sector. As a result, we remained very underweighted in
emerging markets for the year. For the 12 months ended November 30, 1999,
Merrill Lynch Global Utility Fund, Inc.'s Class A, Class B, Class C and Class D
Shares had total returns of +8.17%, +7.41%, +7.34% and +7.96%, respectively.
(Investment results shown do not reflect sales charges and would be lower if
sales charges were included.)
At November 30, 1999, approximately 35.1% of the Fund's net assets was invested
in US-based utilities and 62.2% was invested in non-US based utility stocks. The
majority of the Fund's overseas utility investments were in Europe, more
specifically southern Europe. In terms of sector allocation, telecommunications
was dominant on an overall portfolio basis, particularly in Europe. This sector
is a clear beneficiary of changes in technology. New technology is not only
lowering the cost of doing business but is impacting overall demand for services
through increased Internet usage as well as wireless telephony. These trends are
clearly positive for the sector and are evident in terms of company results.
For the 12 months ended November 30, 1999, the Fund's performance was negatively
impacted by its holdings in the domestic electric utility sector and to a lesser
extent by its holdings in the domestic natural gas sector. The defensive char
acteristics of the domestic electric utility sector worked against performance
as investors sought higher risk growth sectors such as technology. In general,
high-yielding US stocks underperformed the broad market by a wide margin and the
only stocks to show relative outperformance were those with yields well below
the yield of the Standard & Poor's (S&P) 500 Index. Rising long-term interest
rates also contributed negatively because the sector is still considered to be
sensitive to movements in interest rates.
European utilities had relatively weak performance during most of the fiscal
year ended November 30, 1999, as measured by the Financial Times/S&P Actuaries
World Utility Index. This was partly in response to the weakness of the euro
relative to the US dollar, which started at e1.1585 on January 8, 1999, dropped
to e1.0566 on August 31, 1999 and finished the fiscal year at e1.0092 as of
November 30, 1999. However, in the fourth quarter of the Fund's fiscal year, the
sector started to rebound as investors once again focused on fundamentals and
attractive asset bases. Moreover, companies are beginning to unlock value by
disposing of non-core assets and by listing faster-growing businesses in the
market. The value of the euro as compared to the US dollar currently appears to
be of lesser concern.
During the Fund's fiscal year, there was a bounce back in Pacific Basin-based
utility stocks, particularly in Japan. The Japanese utility sector primarily
benefited from the strength in the local market. The Fund's exposure to the
Japanese market is in the major telephone company, NTT Corp.
In Conclusion
We thank you for your investment in Merrill Lynch Global Utility Fund, Inc., and
we look forward to discussing our investment strategy with you in our next
report to shareholders.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Walter D. Rogers
Walter D. Rogers
Senior Vice President
and Portfolio Manager
January 5, 2000
- --------------------------------------------------------------------------------
To reduce shareholders' expenses, Merrill Lynch Global Utility Fund, Inc. will
no longer be printing and mailing quarterly reports to shareholders. We will
continue to provide you with reports on a semi-annual and annual basis.
- --------------------------------------------------------------------------------
2 & 3
<PAGE>
Merrill Lynch Global Utility Fund, Inc., November 30, 1999
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the Merrill
Lynch Select PricingSM System, which offers four pricing alternatives:
o 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.
o 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
approximately 10 years. (There is no initial sales charge for automatic
share conversions.)
o 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.
o Class D Shares incur a maximum initial sales charge of 4% and an account
maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a representation of
future performance. Figures shown in the "Recent Performance Results" and
"Average Annual Total Return" tables assume reinvestment of all dividends
and capital gains distributions at net asset value on the ex-dividend
date. Investment return and principal value of shares will fluctuate so
that shares, when redeemed, may be worth more or less than their original
cost. Dividends paid to each class of shares will vary because of the
different levels of account maintenance, distribution and transfer agency
fees applicable to each class, which are deducted from the income
available to be paid to shareholders.
Recent Performance Results*
<TABLE>
<CAPTION>
3 Month 12 Month Since Inception
As of November 30, 1999 Total Return Total Return Total Return
============================================================================================
<S> <C> <C> <C>
ML Global Utility Fund, Inc. Class A Shares +6.74% +8.17% +217.34%
- --------------------------------------------------------------------------------------------
ML Global Utility Fund, Inc. Class B Shares +6.54 +7.41 +196.28
- --------------------------------------------------------------------------------------------
ML Global Utility Fund, Inc. Class C Shares +6.53 +7.34 +110.50
- --------------------------------------------------------------------------------------------
ML Global Utility Fund, Inc. Class D Shares +6.72 +7.96 +116.73
============================================================================================
</TABLE>
* Investment results shown do not reflect sales charges; results shown would
be lower if a sales charge was included. Total investment returns are
based on changes in net asset values for the periods shown, and assume
reinvestment of all dividends and capital gains distributions at net asset
value on the ex-dividend date. The Fund's since inception dates are from
12/28/90 for Class A & Class B Shares and from 10/21/94 for Class C &
Class D Shares.
Class A & Class B Shares
Total Return Based on a $10,000 Investment
A line graph depicting growth of an investment in the Fund's Class A Shares and
Class B Shares compared to growth of an investment in the Financial
Times/Standard & Poor's--Actuaries World Index. Beginning and ending values are:
12/28/90** 11/99
ML Global Utility Fund, Inc.+
--Class A Shares* $ 9,600 $30,464
ML Global Utility Fund, Inc.+
--Class B Shares* $10,000 $29,628
Financial Times/Standard &
Poor's--Actuaries World Index++ $10,000 $33,268
* 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), preferred stocks and debt securities issued by domestic
and foreign companies in the utilities industries.
++ This unmanaged market capitalization-weighted Index is comprised of nearly
2,307 equties from 29 countries in 17 regions, including the United
States.
Class A & Class B Shares
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
Year Ended 9/30/99 +10.23% + 5.82%
- --------------------------------------------------------------------------------
Five Years Ended 9/30/99 +15.25 +14.32
- --------------------------------------------------------------------------------
Inception (12/28/90)
through 9/30/99 +13.13 +12.60
- --------------------------------------------------------------------------------
* Maximum sales charge is 4%. (Prior to October 21, 1994, Class A Shares
were offered at a higher sales charge. Thus, actual returns would have
been lower than shown for the five-year and ten-year periods.)
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
Year Ended 9/30/99 + 9.41% + 5.41%
- --------------------------------------------------------------------------------
Five Years Ended 9/30/99 +14.36 +14.36
- --------------------------------------------------------------------------------
Inception (12/28/90)
through 9/30/99 +12.26 +12.26
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 4% and is reduced to 0% after
4 years.
** Assuming payment of applicable contingent deferred sales charge.
4 & 5
<PAGE>
Merrill Lynch Global Utility Fund, Inc., November 30, 1999
PERFORMANCE DATA (concluded)
Class C & Class D Shares
Total Return Based on a $10,000 Investment
A line graph depicting growth of an investment in the Fund's Class C Shares and
Class D Shares compared to growth of an investment in the Financial
Times/Standard & Poor's--Actuaries World Index. Beginning and ending values are:
10/21/94** 11/99
ML Global Utility Fund, Inc.+
--Class C Shares* $10,000 $21,050
ML Global Utility Fund, Inc.+
--Class D Shares* $ 9,600 $20,807
Financial Times/Standard &
Poor's--Actuaries World Index++ $10,000 $21,995
* 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), preferred stocks and debt securities issued by domestic
and foreign companies in the utilities industries.
++ This unmanaged market capitalization-weighted Index is comprised of nearly
2,307 equties from 29 countries in 17 regions, including the United
States. Past performance is not predictive of future performance.
Class C & Class D Shares
Average Annual Total Return
% Return % Return
Without CDSC With CDSC**
================================================================================
Class C Shares*
================================================================================
Year Ended 9/30/99 + 9.30% + 8.31%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 9/30/99 +14.54 +14.54
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 1% and is reduced to 0% after
1 year.
** Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class D Shares*
================================================================================
Year Ended 9/30/99 + 9.97% + 5.57%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 9/30/99 +15.19 +14.24
- --------------------------------------------------------------------------------
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Arthur Zeikel, Director
Robert C. Doll, Senior Vice President
Walter D. Rogers, Senior Vice President and
Portfolio Manager
Donald C. Burke, Vice President and Treasurer
Ira P. Shapiro, Secretary
Custodian
The Chase Manhattan Bank, N.A.
4 MetroTech Center, 18th Floor
Brooklyn, NY 11245
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
6 & 7
<PAGE>
Merrill Lynch Global Utility Fund, Inc., November 30, 1999
SCHEDULE OF INVESTMENTS (in US dollars)
<TABLE>
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Value Net Assets
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
Australia Telecommunications 721,400 + Cable & Wireless Optus Limited $ 1,880,531 0.5%
------------------------------------------------------------------------------------------------------------------
Utilities--Gas 1,273,124 Australian Gas Light Company Limited 7,089,183 2.0
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Australia 8,969,714 2.5
=================================================================================================================================
Bermuda Telecommunications 221,400 + Global Crossing Ltd. 9,630,900 2.7
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Bermuda 9,630,900 2.7
=================================================================================================================================
Brazil Telecommunications 28,000 Embratel Participacoes SA (ADR) (a) 521,500 0.2
2,800 Tele Celular Sul Participacoes SA (ADR) (a) 56,000 0.0
9,333 Tele Centro Oeste Celular Participacoes SA (ADR) (a) 37,332 0.0
5,600 Tele Centro Sul Participacoes SA (ADR) (a) 382,200 0.1
560 Tele Leste Celular Participacoes SA (ADR) (a) 16,800 0.0
1,400 Tele Nordeste Celular Participacoes SA (ADR) (a) 36,400 0.0
560 Tele Norte Celular Participacoes SA (ADR) (a) 16,730 0.0
28,000 Tele Norte Leste Participacoes SA (ADR) (a) 498,750 0.1
5,600 Tele Sudeste Celular Participacoes SA (ADR) (a) 115,150 0.0
28,000 + Telecomunicacoes Brasileiras SA--Telebras (ADR) (a) 438 0.0
1,400 Telemig Celular Participacoes SA (ADR) (a) 46,375 0.0
11,200 Telesp Celular Participacoes SA (ADR) (a) 321,300 0.1
28,000 Telesp Participacoes SA (ADR) (a) 504,000 0.2
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Brazil 2,552,975 0.7
=================================================================================================================================
China Telecommunications 20,900 + China Telecom (Hong Kong) Limited (ADR) (a) 2,197,113 0.6
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in China 2,197,113 0.6
=================================================================================================================================
Denmark Telecommunications 165,900 Tele Danmark A/S (ADR) (a) 5,298,431 1.5
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Denmark 5,298,431 1.5
=================================================================================================================================
Finland Telecommunications 168,218 Sonera Oyj 6,945,531 1.9
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Finland 6,945,531 1.9
=================================================================================================================================
France Utilities--Water 165,522 Vivendi 13,165,156 3.6
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in France 13,165,156 3.6
=================================================================================================================================
Germany Telecommunications 26,779 Deutsche Telekom AG 1,532,738 0.4
27,843 Mannesmann AG 5,785,873 1.6
----------- ----
7,318,611 2.0
------------------------------------------------------------------------------------------------------------------
Utilities--Electric 40,000 RWE AG 1,530,336 0.4
70,000 Veba AG 3,418,086 1.0
104,000 Viag AG 1,717,198 0.5
----------- ----
6,665,620 1.9
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Germany 13,984,231 3.9
=================================================================================================================================
Hong Kong Utilities--Gas 183,019 Hong Kong and China Gas Company Ltd. 238,027 0.1
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Hong Kong 238,027 0.1
=================================================================================================================================
Ireland Telecommunications 15,175 eircom PLC (ADR) (a) 241,852 0.1
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Ireland 241,852 0.1
=================================================================================================================================
Italy Telecommunications 2,775,000 Telecom Italia Mobile (TIM) SpA 21,792,186 6.0
1,505,555 Telecom Italia SpA 16,582,773 4.6
2,891,700 Telecom Italia SpA (Registered Non-Convertible) 15,575,795 4.3
----------- ----
53,950,754 14.9
------------------------------------------------------------------------------------------------------------------
Utilities--Electric 462,000 AEM SpA 1,255,882 0.4
------------------------------------------------------------------------------------------------------------------
Utilities--Gas 1,786,300 Italgas SpA 7,013,943 1.9
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Italy 62,220,579 17.2
=================================================================================================================================
Japan Telecommunications 290 Nippon Telegraph & Telephone Corporation (NTT) 5,193,267 1.4
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Japan 5,193,267 1.4
=================================================================================================================================
Mexico Telecommunications 35,000 Telefonos de Mexico SA (ADR) (a) 3,239,688 0.9
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Mexico 3,239,688 0.9
=================================================================================================================================
New Zealand Telecommunications 56,000 Telecom Corporation of New Zealand Limited (ADR) (a) 1,876,000 0.5
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in New Zealand 1,876,000 0.5
=================================================================================================================================
Philippines Telecommunications 188,000 Philippine Long Distance Telephone Company (ADR) (a) 3,854,000 1.1
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in the Philippines 3,854,000 1.1
=================================================================================================================================
Portugal Telecommunications 99,840 Portugal Telecom SA (ADR) (a) 4,792,320 1.3
------------------------------------------------------------------------------------------------------------------
Utilities--Electric 80,820 EDP--Eletricidade de Portugal, SA (ADR) (a) 2,485,215 0.7
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Portugal 7,277,535 2.0
=================================================================================================================================
Spain Telecommunications 1,219,146 + Telefonica, SA 25,383,380 7.1
24,382 + Telefonica, SA (New) 467,145 0.1
46 Telefonica, SA (Rights) 20 0.0
----------- ----
25,850,545 7.2
------------------------------------------------------------------------------------------------------------------
Utilities--Electric 259,200 Endesa, SA (ADR) (a) 5,135,400 1.4
138,000 Hidroelectrica del Cantabrico, SA 1,979,872 0.6
323,500 Iberdrola, SA 4,507,685 1.2
----------- ----
11,622,957 3.2
------------------------------------------------------------------------------------------------------------------
Total Common Stocks in Spain 37,473,502 10.4
=================================================================================================================================
</TABLE>
8 & 9
<PAGE>
Merrill Lynch Global Utility Fund, Inc., November 30, 1999
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<TABLE>
<CAPTION>
Shares Percent of
COUNTRY Industries Held Common Stocks Value Net Assets
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
United Kingdom Telecommunications 679,423 British Telecommunications PLC $ 13,610,747 3.7%
390,500 Vodafone AirTouch PLC (ADR) (a) 18,426,719 5.1
------------ -----
32,037,466 8.8
-----------------------------------------------------------------------------------------------------------------
Utilities--Electric 208,000 National Power PLC 1,330,172 0.4
370,000 PowerGen PLC 3,177,472 0.9
106,140 Scottish Power PLC (ADR) (a) 3,708,266 1.0
------------ -----
8,215,910 2.3
-----------------------------------------------------------------------------------------------------------------
Total Common Stocks in the United Kingdom 40,253,376 11.1
=================================================================================================================================
United States Telecommunications 69,000 AT&T Corp. 3,855,375 1.1
95,232 Bell Atlantic Corporation 6,029,376 1.7
183,600 BellSouth Corporation 8,480,025 2.3
85,000 GTE Corporation 6,205,000 1.7
108,000 + MCI WorldCom Inc. 8,930,250 2.5
324,040 SBC Communications Inc. 16,829,828 4.6
------------ -----
50,329,854 13.9
-----------------------------------------------------------------------------------------------------------------
Utilities--Electric 156,000 Allegheny Energy, Inc. 4,524,000 1.2
166,962 Cinergy Corp. 4,226,226 1.2
84,200 Consolidated Edison, Inc. 2,904,900 0.8
118,900 DTE Energy Company 3,931,131 1.1
85,000 Duke Energy Corporation 4,308,437 1.2
86,000 Edison International 2,279,000 0.6
212,000 Energy East Corporation 4,982,000 1.4
90,000 FPL Group, Inc. 3,937,500 1.1
127,300 GPU, Inc. 4,073,600 1.1
87,200 NSTAR 3,618,800 1.0
124,000 New Century Energies, Inc. 3,898,250 1.1
239,500 NiSource Inc. 4,505,594 1.2
144,200 Reliant Energy, Inc. 3,577,962 1.0
91,200 The Southern Company 2,131,800 0.6
100,000 Texas Utilities Company 3,581,250 1.0
------------ -----
56,480,450 15.6
-----------------------------------------------------------------------------------------------------------------
Utilities--Gas 95,000 The Coastal Corporation 3,348,750 0.9
27,000 Columbia Energy Group 1,694,250 0.5
46,300 El Paso Energy Corporation 1,782,550 0.5
80,000 Enron Corp. 3,045,000 0.8
130,000 KeySpan Corporation 3,339,375 0.9
168,000 Questar Corporation 2,887,500 0.8
60,000 The Williams Companies, Inc. 2,025,000 0.6
------------ -----
18,122,425 5.0
-----------------------------------------------------------------------------------------------------------------
Utilities--Water 86,200 Philadelphia Suburban Corporation 1,993,375 0.6
-----------------------------------------------------------------------------------------------------------------
Total Common Stocks in the United States 126,926,104 35.1
=================================================================================================================================
Total Investments in Common Stocks
(Cost--$181,430,791) 351,537,981 97.3
=================================================================================================================================
<CAPTION>
Face
Amount Short-Term Securities
=================================================================================================================================
<S> <C> <C> <C> <C> <C>
Commercial Paper* $10,489,000 General Motors Acceptance Corp., 5.75% due 12/01/1999 10,489,000 2.9
-----------------------------------------------------------------------------------------------------------------
Total Investments in Short-Term Securities
(Cost--$10,489,000) 10,489,000 2.9
=================================================================================================================================
Total Investments (Cost--$191,919,791) 362,026,981 100.2
Liabilities in Excess of Other Assets (677,808) (0.2)
------------ -----
Net Assets $361,349,173 100.0%
============ =====
=================================================================================================================================
</TABLE>
(a) American Depositary Receipts (ADR).
+ Non-income producing security.
* Commercial Paper is traded on a discount basis; the interest rate
shown reflects the discount rates paid at the time of purchase by
the Fund.
See Notes to Financial Statements.
10 & 11
<PAGE>
Merrill Lynch Global Utility Fund, Inc., November 30, 1999
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
As of November 30, 1999
===================================================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$191,919,791) ............................. $362,026,981
Cash .............................................................................. 329
Foreign cash ...................................................................... 124
Receivables:
Dividends ....................................................................... $ 543,702
Capital shares sold ............................................................. 108,784 652,486
-----------
Prepaid registration fees ......................................................... 60,793
------------
Total assets ...................................................................... 362,740,713
------------
===================================================================================================================================
Liabilities: Payables:
Capital shares redeemed ......................................................... 893,953
Distributor ..................................................................... 203,791
Investment adviser .............................................................. 23,922 1,121,666
-----------
Accrued expenses and other liabilities ............................................ 269,874
------------
Total liabilities ................................................................. 1,391,540
------------
===================================================================================================================================
Net Assets: Net assets ........................................................................ $361,349,173
============
===================================================================================================================================
Net Assets Class A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... $ 199,918
Consist of: Class B Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 1,570,293
Class C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 44,016
Class D Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 76,938
Paid-in capital in excess of par .................................................. 175,879,197
Undistributed investment income--net .............................................. 289,741
Undistributed realized capital gains on investments and foreign
currency transactions--net ........................................................ 13,186,362
Unrealized appreciation on investments and foreign currency transactions--net ..... 170,102,708
------------
Net assets ........................................................................ $361,349,173
============
===================================================================================================================================
Net Asset Class A--Based on net assets of $38,309,289 and 1,999,177 shares outstanding ...... $ 19.16
Value: ============
Class B--Based on net assets of $299,911,571 and 15,702,934 shares outstanding .... $ 19.10
============
Class C--Based on net assets of $8,381,041 and 440,159 shares outstanding ......... $ 19.04
============
Class D--Based on net assets of $14,747,272 and 769,382 shares outstanding ........ $ 19.17
============
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended November 30, 1999
===================================================================================================================================
<S> <C> <C> <C>
Investment Dividends (net of $536,179 foreign withholding tax) ............................... $ 8,652,427
Income: Interest and discount earned ...................................................... 1,605,630
------------
Total income ...................................................................... 10,258,057
------------
===================================================================================================================================
Expenses: Account maintenance and distribution fees--Class B ................................ $ 2,417,986
Investment advisory fees .......................................................... 2,320,290
Transfer agent fees--Class B ...................................................... 335,103
Custodian fees .................................................................... 155,623
Printing and shareholder reports .................................................. 95,262
Accounting services ............................................................... 91,301
Professional fees ................................................................. 80,482
Account maintenance and distribution fees--Class C ................................ 74,967
Registration fees ................................................................. 64,781
Account maintenance fees--Class D ................................................. 35,983
Transfer agent fees--Class A ...................................................... 35,037
Directors' fees and expenses ...................................................... 21,447
Transfer agent fees--Class D ...................................................... 12,492
Transfer agent fees--Class C ...................................................... 10,603
Pricing fees ...................................................................... 689
Other ............................................................................. 11,026
-----------
Total expenses .................................................................... 5,763,072
------------
Investment income--net ............................................................ 4,494,985
------------
===================================================================================================================================
Realized & Realized gain (loss) from:
Unrealized Gain Investments--net ................................................................ 13,186,364
(Loss) on Foreign currency transactions--net .............................................. (44,364) 13,142,000
Investments & -----------
Foreign Currency Change in unrealized appreciation/depreciation on:
Transactions-- Investments--net ................................................................ 8,567,015
Net: Foreign currency transactions--net .............................................. (13,813) 8,553,202
----------- ------------
Net realized and unrealized gain on investments and foreign currency transactions . 21,695,202
------------
Net Increase in Net Assets Resulting from Operations .............................. $ 26,190,187
============
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
12 & 13
<PAGE>
Merrill Lynch Global Utility Fund, Inc., November 30, 1999
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year
Ended November 30,
---------------------------
Increase (Decrease) in Net Assets: 1999 1998
===================================================================================================================================
<S> <C> <C> <C>
Operations: Investment income--net ............................................................ $ 4,494,985 $ 5,869,907
Realized gain on investments and foreign currency transactions--net ............... 13,142,000 29,339,193
Change in unrealized appreciation/depreciation on investments and
foreign currency transactions--net ................................................ 8,553,202 48,836,490
------------ ------------
Net increase in net assets resulting from operations .............................. 26,190,187 84,045,590
------------ ------------
===================================================================================================================================
Dividends & Investment income--net:
Distributions to Class A ......................................................................... (740,613) (942,410)
Shareholders: Class B ......................................................................... (3,451,994) (4,895,531)
Class C ......................................................................... (98,007) (94,022)
Class D ......................................................................... (235,257) (178,336)
Realized gain on investments--net:
Class A ......................................................................... (3,200,306) (2,800,654)
Class B ......................................................................... (24,711,996) (21,708,174)
Class C ......................................................................... (613,584) (400,316)
Class D ......................................................................... (915,061) (489,776)
------------ ------------
Net decrease in net assets resulting from dividends and distributions
to shareholders ................................................................... (33,966,818) (31,509,219)
------------ ------------
===================================================================================================================================
Capital Share Net decrease in net assets derived from capital share transactions ................ (19,934,887) (16,180,815)
Transactions: ------------ ------------
===================================================================================================================================
Net Assets: Total increase (decrease) in net assets ........................................... (27,711,518) 36,355,556
Beginning of year ................................................................. 389,060,691 352,705,135
------------ ------------
End of year* ...................................................................... $361,349,173 $389,060,691
============ ============
===================================================================================================================================
* Undistributed investment income--net .............................................. $ 289,741 $ 364,998
============ ============
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A
The following per share data and ratios have been derived ---------------------------------------------------
from information provided in the financial statements. For the Year Ended November 30,
---------------------------------------------------
Increase (Decrease) in Net Asset Value: 1999+ 1998+ 1997+ 1996+ 1995
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ........................ $ 19.49 $ 16.97 $ 15.09 $ 13.52 $ 12.08
Operating -------- ------- ------- ------- -------
Performance: Investment income--net .................................... .34 .41 .47 .50 .51
Realized and unrealized gain on investments and
foreign currency transactions--net ........................ 1.14 3.77 2.35 1.84 1.42
-------- ------- ------- ------- -------
Total from investment operations .......................... 1.48 4.18 2.82 2.34 1.93
-------- ------- ------- ------- -------
Less dividends and distributions:
Investment income--net .................................. (.34) (.42) (.49) (.53) (.49)
Realized gain on investments--net ....................... (1.47) (1.24) (.45) (.24) --
-------- ------- ------- ------- -------
Total dividends and distributions ......................... (1.81) (1.66) (.94) (.77) (.49)
-------- ------- ------- ------- -------
Net asset value, end of year .............................. $ 19.16 $ 19.49 $ 16.97 $ 15.09 $ 13.52
======== ======= ======= ======= =======
===================================================================================================================================
Total Investment Based on net asset value per share ........................ 8.17% 26.47% 19.65% 17.94% 16.34%
Return:* ======== ======= ======= ======= =======
===================================================================================================================================
Ratios to Expenses .................................................. .82% .82% .82% .84% .91%
Average Net ======== ======= ======= ======= =======
Assets: Investment income--net .................................... 1.82% 2.26% 2.98% 3.51% 3.73%
======== ======= ======= ======= =======
===================================================================================================================================
Supplemental Net assets, end of year (in thousands) .................... $ 38,309 $41,977 $38,825 $40,055 $44,775
Data: ======== ======= ======= ======= =======
Portfolio turnover ........................................ 7.43% 6.56% 6.23% 5.03% 2.92%
======== ======= ======= ======= =======
===================================================================================================================================
</TABLE>
* Total investment returns exclude the effects of sales charges.
+ Based on average shares outstanding.
See Notes to Financial Statements.
14 & 15
<PAGE>
Merrill Lynch Global Utility Fund, Inc., November 30, 1999
FINANCIAL HIGHLIGHTS (concluded)
<TABLE>
<CAPTION>
Class B
The following per share data and ratios have been derived ----------------------------------------------------
from information provided in the financial statements. For the Year Ended November 30,
----------------------------------------------------
Increase (Decrease) in Net Asset Value: 1999+ 1998+ 1997+ 1996+ 1995
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ..................... $ 19.42 $ 16.93 $ 15.05 $ 13.47 $ 12.04
Operating -------- -------- -------- -------- --------
Performance: Investment income--net ................................. .20 .27 .35 .39 .38
Realized and unrealized gain on investments and
foreign currency transactions--net ..................... 1.15 3.74 2.35 1.84 1.44
-------- -------- -------- -------- --------
Total from investment operations ....................... 1.35 4.01 2.70 2.23 1.82
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net ............................... (.20) (.28) (.37) (.41) (.39)
Realized gain on investments--net .................... (1.47) (1.24) (.45) (.24) --
-------- -------- -------- -------- --------
Total dividends and distributions ...................... (1.67) (1.52) (.82) (.65) (.39)
-------- -------- -------- -------- --------
Net asset value, end of year ........................... $ 19.10 $ 19.42 $ 16.93 $ 15.05 $ 13.47
======== ======== ======== ======== ========
===================================================================================================================================
Total Investment Based on net asset value per share ..................... 7.41% 25.40% 18.77% 17.07% 15.38%
Return:* ======== ======== ======== ======== ========
===================================================================================================================================
Ratios to Average Expenses ............................................... 1.59% 1.59% 1.59% 1.61% 1.68%
Net Assets: ======== ======== ======== ======== ========
Investment income--net ................................. 1.06% 1.48% 2.22% 2.74% 2.95%
======== ======== ======== ======== ========
===================================================================================================================================
Supplemental Net assets, end of year (in thousands) ................. $299,912 $327,589 $301,459 $335,487 $381,098
Data: ======== ======== ======== ======== ========
Portfolio turnover ..................................... 7.43% 6.56% 6.23% 5.03% 2.92%
======== ======== ======== ======== ========
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class C
The following per share data and ratios have been derived ----------------------------------------------------
from information provided in the financial statements. For the Year Ended November 30,
----------------------------------------------------
Increase (Decrease) in Net Asset Value: 1999+ 1998+ 1997+ 1996+ 1995
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ..................... $ 19.37 $ 16.89 $ 15.03 $ 13.46 $ 12.05
Operating -------- -------- -------- -------- --------
Performance: Investment income--net ................................. .19 .25 .33 .38 .39
Realized and unrealized gain on investments and
foreign currency transactions--net ..................... 1.14 3.73 2.35 1.84 1.43
-------- -------- -------- -------- --------
Total from investment operations ....................... 1.33 3.98 2.68 2.22 1.82
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net ............................... (.19) (.26) (.37) (.41) (.41)
Realized gain on investments--net .................... (1.47) (1.24) (.45) (.24) --
-------- -------- -------- -------- --------
Total dividends and distributions ...................... (1.66) (1.50) (.82) (.65) (.41)
-------- -------- -------- -------- --------
Net asset value, end of year ........................... $ 19.04 $ 19.37 $ 16.89 $ 15.03 $ 13.46
======== ======== ======== ======== ========
===================================================================================================================================
Total Investment Based on net asset value per share ..................... 7.34% 25.34% 18.66% 17.03% 15.38%
Return:* ======== ======== ======== ======== ========
===================================================================================================================================
Ratios to Average Expenses ............................................... 1.65% 1.64% 1.63% 1.66% 1.73%
Net Assets: ======== ======== ======== ======== ========
Investment income--net ................................. 1.02% 1.38% 2.07% 2.65% 2.85%
======== ======== ======== ======== ========
===================================================================================================================================
Supplemental Net assets, end of year (in thousands) ................. $ 8,381 $ 7,954 $ 5,486 $ 3,325 $ 2,072
Data: ======== ======== ======== ======== ========
Portfolio turnover ..................................... 7.43% 6.56% 6.23% 5.03% 2.92%
======== ======== ======== ======== ========
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Class D
The following per share data and ratios have been derived ----------------------------------------------------
from information provided in the financial statements. For the Year Ended November 30,
----------------------------------------------------
Increase (Decrease) in Net Asset Value: 1999+ 1998+ 1997+ 1996+ 1995
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ..................... $ 19.49 $ 16.98 $ 15.10 $ 13.55 $ 12.09
Operating -------- -------- -------- -------- --------
Performance: Investment income--net ................................. .30 .36 .43 .50 .52
Realized and unrealized gain on investments and
foreign currency transactions--net ..................... 1.15 3.77 2.35 1.79 1.40
-------- -------- -------- -------- --------
Total from investment operations ....................... 1.45 4.13 2.78 2.29 1.92
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net ............................... (.30) (.38) (.45) (.50) (.46)
Realized gain on investments--net .................... (1.47) (1.24) (.45) (.24) --
-------- -------- -------- -------- --------
Total dividends and distributions ...................... (1.77) (1.62) (.90) (.74) (.46)
-------- -------- -------- -------- --------
Net asset value, end of year ........................... $ 19.17 $ 19.49 $ 16.98 $ 15.10 $ 13.55
======== ======== ======== ======== ========
===================================================================================================================================
Total Investment Based on net asset value per share ..................... 7.96% 26.09% 19.35% 17.45% 16.21%
Return:* ======== ======== ======== ======== ========
===================================================================================================================================
Ratios to Average Expenses ............................................... 1.07% 1.07% 1.06% 1.07% 1.15%
Net Assets: ======== ======== ======== ======== ========
Investment income--net ................................. 1.60% 1.97% 2.70% 3.30% 3.36%
======== ======== ======== ======== ========
===================================================================================================================================
Supplemental Net assets, end of year (in thousands) ................. $ 14,747 $ 11,541 $ 6,935 $ 4,365 $ 1,516
Data: ======== ======== ======== ======== ========
Portfolio turnover ..................................... 7.43% 6.56% 6.23% 5.03% 2.92%
======== ======== ======== ======== ========
===================================================================================================================================
</TABLE>
* Total investment returns exclude the effects of sales charges.
+ Based on average shares outstanding.
See Notes to Financial Statements.
16 & 17
<PAGE>
Merrill Lynch Global Utility Fund, Inc., November 30, 1999
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's financial statements are prepared in accordance with
generally accepted accounting principles, which may require the use of
management accruals and estimates. The Fund offers four classes of shares under
the Merrill Lynch Select Pricingsm 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--Portfolio securities that are traded on stock
exchanges are valued at the last sale price on the exchange 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. Securities
traded in the over-the-counter market are valued at the last available bid price
prior to the time of valuation. In cases where securities are traded on more
than one exchange, the securities are valued on the exchange designated by or
under the authority of the Board of Directors as the primary market. Securities
that are traded both in the over-the-counter market and on a stock exchange are
valued according to the broadest and most representative market. Options written
or purchased are valued at the last sale price in the case of exchange-traded
options. In the case of options traded in the over-the-counter market, valuation
is the last asked price (options written) or the last bid price (options
purchased). Short-term securities are valued at amortized cost, which
approximates market value. Other investments, including futures contracts and
related options, are stated at market value. Securities and assets for which
market value quotations are not available are valued at their fair value as
determined in good faith by or under the direction of the Fund's Board of
Directors.
(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) assets or liabilities expressed in
foreign currencies into US dollars. Realized and unrealized gains or losses from
investments include the effects of foreign exchange rates on investments.
(c) Derivative financial instruments--The Fund may engage in various portfolio
strategies to seek to increase its return by hedging its portfolio against
adverse movements in the equity, debt and currency markets. Losses may arise due
to changes in the value of the contract or if the counterparty does not perform
under the contract.
o Options--The Fund is authorized to write and purchase call options and put
options. When the Fund writes 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 exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
o Financial futures contracts--The Fund may purchase or sell financial futures
contracts and options on such futures contracts. Upon entering into a contract,
the Fund deposits and maintains as collateral such initial margin as required by
the exchange on which the transaction is effected. Pursuant to the contract, the
Fund agrees to receive from or pay to the broker an amount of cash equal to the
daily fluctuation in value of the contract. Such receipts or payments are known
as variation margin and are recorded by the Fund as unrealized gains or losses.
When the contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed.
o Forward foreign exchange contracts--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.
o Foreign currency options and futures--The Fund may also purchase or sell
listed or over-the-counter foreign currency options, foreign currency futures
and related options on foreign currency futures as a short or long hedge against
possible variations in foreign exchange rates. Such transactions may be effected
with respect to hedges on non-US dollar denominated securities owned by the
Fund, sold by the Fund but not yet delivered, or committed or anticipated to be
purchased by the Fund.
(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 dates. Dividends
from foreign securities where the ex-dividend date may have passed are
subsequently recorded when the Fund has determined the ex-dividend dates.
Realized gains and losses on security transactions are determined on the
identified cost basis.
(f) Prepaid registration fees--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.
(h) Reclassification--Generally accepted accounting principles require that
certain components of net assets be adjusted to reflect permanent differences
between financial and tax reporting. Accordingly, current year's permanent
book/tax differences of $44,371 have been reclassified between undistributed net
investment income and undistributed net realized capital gains. These
reclassifications have no effect on net assets or net asset values per share.
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., Inc. ("ML & Co."), which is the limited partner. The Fund has also entered
into a Distribution Agreement and Distribution Plans with Merrill Lynch Funds
Distributor ("MLFD" or "the Distributor"), a division of Princeton Funds
Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary of Merrill Lynch
Group, Inc.
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
.60%, on an annual basis, of the average daily value of the Fund's net assets.
Pursuant to the Distribution Plans adopted by the Fund in accordance with Rule
12b-1 under the Investment Company
18 & 19
<PAGE>
Merrill Lynch Global Utility Fund, Inc., November 30, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
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:
- --------------------------------------------------------------------------------
Account Distribution
Maintenance Fee Fee
- --------------------------------------------------------------------------------
Class B .................................... .25% .50%
Class C .................................... .25% .55%
Class D .................................... .25% --
- --------------------------------------------------------------------------------
Pursuant to a sub-agreement with the Distributor, Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("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, 1999, MLFD earned underwriting discounts and
direct commissions 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 .................................... $ 174 $ 2,241
Class D .................................... $ 1,707 $18,387
- --------------------------------------------------------------------------------
For the year ended November 30, 1999, MLPF&S received contingent deferred sales
charges of $171,253 and $5,997, relating to transactions in Class B Shares and
Class C Shares, respectively.
In addition, MLPF&S received $25,030 in commissions on the execution of
portfolio security transactions for the Fund for the year ended November 30,
1999.
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, PSI, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended November 30, 1999 were $26,304,164 and $50,476,091, respectively.
Net realized gains (losses) for the year ended November 30, 1999 and net
unrealized gains (losses) as of November 30, 1999 were as follows:
- --------------------------------------------------------------------------------
Realized Unrealized
Gains (Losses) Gains (Losses)
- --------------------------------------------------------------------------------
Long-term investments ...................... $ 13,186,364 $ 170,107,190
Foreign currency transactions .............. (44,364) (4,482)
------------- -------------
Total ...................................... $ 13,142,000 $ 170,102,708
============= =============
- --------------------------------------------------------------------------------
As of November 30, 1999, net unrealized appreciation for Federal income tax
purposes aggregated $170,107,190, of which $174,465,088 related to appreciated
securities and $4,357,898 related to depreciated securities. The aggregate cost
of investments at November 30, 1999 for Federal income tax purposes was
$191,919,791.
4. Capital Share Transactions:
Net decrease in net assets derived from capital share transactions was
$19,934,887 and $16,180,815 for the years ended November 30, 1999 and November
30, 1998, respectively.
Transactions in capital shares for each class were as follows:
- --------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended November 30, 1999 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................................ 495,258 $ 9,307,178
Shares issued to shareholders
in reinvestment of dividends
and distributions .......................... 171,563 3,145,784
-------- ------------
Total issued ............................... 666,821 12,452,962
Shares redeemed ............................ (821,807) (15,270,384)
-------- ------------
Net decrease ............................... (154,986) $ (2,817,422)
======== ============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended November 30, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................................ 431,597 $ 7,895,940
Shares issued to shareholders
in reinvestment of dividends
and distributions .......................... 179,840 2,998,839
-------- ------------
Total issued ............................... 611,437 10,894,779
Shares redeemed ............................ (744,730) (13,435,233)
-------- ------------
Net decrease ............................... (133,293) $ (2,540,454)
======== ============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended November 30, 1999 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................................ 2,192,359 $ 40,896,557
Shares issued to shareholders
in reinvestment of dividends
and distributions .......................... 1,193,461 21,827,524
---------- ------------
Total issued ............................... 3,385,820 62,724,081
Automatic conversion of shares ............. (57,842) (1,073,457)
Shares redeemed ............................ (4,489,430) (82,728,308)
---------- ------------
Net decrease ............................... (1,161,452) $(21,077,684)
========== ============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended November 30, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................................ 1,798,516 $ 32,421,070
Shares issued to shareholders
in reinvestment of dividends
and distributions .......................... 1,251,468 20,655,107
---------- ------------
Total issued ............................... 3,049,984 53,076,177
Automatic conversion of shares ............. (55,904) (1,011,761)
Shares redeemed ............................ (3,938,213) (70,455,451)
---------- ------------
Net decrease ............................... (944,133) $(18,391,035)
========== ============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended November 30, 1999 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................................ 216,881 $ 4,042,518
Shares issued to shareholders
in reinvestment of dividends
and distributions .......................... 34,001 620,183
---------- ------------
Total issued ............................... 250,882 4,662,701
Shares redeemed ............................ (221,267) (4,058,280)
---------- ------------
Net increase ............................... 29,615 $ 604,421
========== ============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended November 30, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................................ 160,601 $ 2,882,085
Shares issued to shareholders
in reinvestment of dividends
and distributions .......................... 25,572 421,385
---------- ------------
Total issued ............................... 186,173 3,303,470
Shares redeemed ............................ (100,433) (1,783,048)
---------- ------------
Net increase ............................... 85,740 $ 1,520,422
========== ============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class D Shares for the Year Dollar
Ended November 30, 1999 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................................ 328,342 $ 6,144,143
Automatic conversion of shares ............. 57,639 1,073,457
Shares issued to shareholders
in reinvestment of dividends
and distributions .......................... 53,368 979,083
---------- ------------
Total issued ............................... 439,349 8,196,683
Shares redeemed ............................ (262,039) (4,840,885)
---------- ------------
Net increase ............................... 177,310 $ 3,355,798
========== ============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class D Shares for the Year Dollar
Ended November 30, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................................ 476,893 $ 8,231,578
Automatic conversion of shares ............. 55,711 1,011,761
Shares issued to shareholders
in reinvestment of dividends
and distributions .......................... 33,182 554,571
---------- ------------
Total issued ............................... 565,786 9,797,910
Shares redeemed ............................ (382,059) (6,567,658)
---------- ------------
Net increase ............................... 183,727 $ 3,230,252
========== ============
- --------------------------------------------------------------------------------
5. Subsequent Event:
On December 16, 1999, the Fund's Board of Directors declared an ordinary income
dividend and a long-term capital gains distribution payable on December 22, 1999
to shareholders of record as of December 16, 1999 as follows:
- --------------------------------------------------------------------------------
Ordinary Long-Term
Income Capital Gains
- --------------------------------------------------------------------------------
Class A .................................... $ .037015 $ .872045
Class B .................................... .012660 .872045
Class C .................................... .010693 .872045
Class D .................................... .029101 .872045
- --------------------------------------------------------------------------------
20 & 21
<PAGE>
Merrill Lynch Global Utility Fund, Inc., November 30, 1999
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, 1999, 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 each of the years in the five-year
period then ended. 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, 1999 by correspondence with the custodian. 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, 1999, 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 10, 2000
IMPORTANT TAX INFORMATION (unaudited)
The following information summarizes the distributions paid by Merrill Lynch
Global Utility Fund, Inc. to all classes of shares during the fiscal year ended
November 30, 1999:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Domestic Domestic Foreign
Record Payable Qualifying Non-Qualifying Foreign Source Total Withholding Taxes
Date Date Ordinary Income Income Income Ordinary Income (Per Share)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
12/17/98 12/28/98 88.79% 4.02% 7.19% 100.00% $.005031
- ----------------------------------------------------------------------------------------------------------------------------
4/13/99 4/21/99 100.00% -- -- 100.00% $.005266
- ----------------------------------------------------------------------------------------------------------------------------
7/07/99 7/15/99 100.00% -- -- 100.00% $.009603
- ----------------------------------------------------------------------------------------------------------------------------
10/04/99 10/13/99 100.00% -- -- 100.00% $.009278
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
In addition, the Fund paid a long-term capital gains distribution of $1.439029
per share to shareholders of record as of December 17, 1998.
Please retain this information for your records.
PORTFOLIO INFORMATION (unaudited)
Worldwide Investments as of November 30, 1999
Ten Largest Holdings Percent of
(Equity Investments) Net Assets
Telecom Italia SpA* .......................................... 8.9%
Telefonica SA* ............................................... 7.2
Telecom Italia Mobile (TIM) SpA .............................. 6.0
Vodafone AirTouch PLC (ADR) .................................. 5.1
SBC Communications Inc. ...................................... 4.6
British Telecommunications PLC ............................... 3.7
Vivendi ...................................................... 3.6
Global Crossing Ltd. ......................................... 2.7
MCI WorldCom Inc. ............................................ 2.5
BellSouth Corporation ........................................ 2.3
* Includes combined holdings.
22 & 23
<PAGE>
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. Statements and other information
herein are as dated and are subject to change.
Merrill Lynch
Global Utility Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 11693--11/99
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