UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-09243
The Gabelli Utility Trust
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
Date of fiscal year end: December 31
Date of reporting period: June 30, 2008
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
(THE GABELLI UTILITY TRUST LOGO)
THE GABELLI UTILITY TRUST
Semi-Annual Report
June 30, 2008
TO OUR SHAREHOLDERS,
The Gabelli Utility Trust's (the "Fund") net asset value ("NAV") total
return declined 8.2% during the first half of 2008, compared with losses of 2.8%
and 4.6% for the Standard & Poor's ("S&P") 500 Utilities Index and for the
Lipper Utility Fund Average, respectively. The total return for the Fund's
publicly traded shares increased 2.0% during the first half of the year. On June
30, 2008, the Fund's NAV per share was $7.15, while the price of the publicly
traded shares closed at $9.30 on the New York Stock Exchange, a 30% premium at
that date.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2008.
COMPARATIVE RESULTS
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2008 (a)
Since
Year to Inception
Quarter Date 1 Year 3 Year 5 Year (07/09/99)
------- ------- ------- ------ ------ ----------
GABELLI UTILITY TRUST
NAV TOTAL RETURN (b) ......... 6.21% (8.21)% (4.39)% 8.47% 11.36% 9.37%
INVESTMENT TOTAL RETURN (c) .. 2.82 1.99 4.58 6.26 7.18 11.01
S&P 500 Index ................... (2.72) (11.90) (13.11) 4.40 7.58 0.71
S&P 500 Utilities Index ......... 7.97 (2.76) 6.63 12.50 16.98 6.52
Lipper Utility Fund Average ..... 6.35 (4.57) 2.32 13.81 16.87 6.89
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE.
WHEN SHARES ARE SOLD, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA
PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST
RECENT MONTH END. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE
NOT ANNUALIZED. INVESTORS SHOULD CAREFULLY CONSIDER THE INVESTMENT
OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND BEFORE INVESTING. THE
S&P 500 INDEX IS AN UNMANAGED INDICATOR OF STOCK MARKET PERFORMANCE. THE
S&P 500 UTILITIES INDEX IS AN UNMANAGED INDICATOR OF ELECTRIC AND GAS
UTILITY STOCK PERFORMANCE. THE LIPPER UTILITY FUND AVERAGE REFLECTS THE
AVERAGE PERFORMANCE OF OPEN-END MUTUAL FUNDS CLASSIFIED IN THIS PARTICULAR
CATEGORY. DIVIDENDS ARE CONSIDERED REINVESTED. YOU CANNOT INVEST DIRECTLY
IN AN INDEX.
(b) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN THE NAV PER
SHARE, REINVESTMENT OF DISTRIBUTIONS AT NAV ON THE EX-DIVIDEND DATE, AND
ADJUSTMENTS FOR RIGHTS OFFERINGS AND ARE NET OF EXPENSES. SINCE INCEPTION
RETURN IS BASED ON AN INITIAL NAV OF $7.50.
(c) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN CLOSING MARKET
VALUES ON THE NEW YORK STOCK EXCHANGE, REINVESTMENT OF DISTRIBUTIONS, AND
ADJUSTMENTS FOR RIGHTS OFFERINGS. SINCE INCEPTION RETURN IS BASED ON AN
INITIAL OFFERING PRICE OF $7.50.
We have separated the portfolio manager's commentary from the financial
statements and investment portfolio due to corporate governance regulations
stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that
the content of the portfolio manager's commentary is unrestricted. The financial
statements and investment portfolio are mailed separately from the commentary.
Both the commentary and the financial statements, including the portfolio of
investments, will be available on our website at www.gabelli.com/funds.
THE GABELLI UTILITY TRUST
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total
investments as of June 30, 2008:
Energy and Utilities: Electric Integrated ..... 45.4%
Energy and Utilities: Natural Gas Integrated .. 8.9%
U.S. Government Obligations ................... 7.9%
Energy and Utilities:
Electric Transmission and Distribution ..... 7.5%
Energy and Utilities: Natural Gas Utilities ... 6.0%
Telecommunications ............................ 4.3%
Energy and Utilities: Global Utilities ........ 4.2%
Cable and Satellite ........................... 3.0%
Energy and Utilities: Water ................... 2.7%
Wireless Communications ....................... 2.7%
Energy and Utilities: Merchant Energy ......... 2.0%
Entertainment ................................. 1.4%
Energy and Utilities: Natural Resources ....... 1.3%
Diversified Industrial ........................ 0.9%
Energy and Utilities: Services ................ 0.5%
Communications Equipment ...................... 0.4%
Energy and Utilities: Alternative Energy ...... 0.3%
Transportation ................................ 0.2%
Aerospace ..................................... 0.2%
Equipment and Supplies ........................ 0.1%
Real Estate ................................... 0.1%
Automotive: Parts and Accessories ............. 0.0%
Agriculture ................................... 0.0%
Publishing .................................... 0.0%
-----
100.0%
=====
THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC") FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL
YEAR ON FORM N-Q, THE LAST OF WHICH WAS FILED FOR THE QUARTER ENDED MARCH 31,
2008. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING
THE FUND AT 800-GABELLI (800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE ON THE
SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE SEC'S
PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE
PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. A description of
the Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.
SHAREHOLDER MEETING - MAY 19, 2008 - FINAL RESULTS
The Annual Meeting of Shareholders was held on May 19, 2008 at the
Greenwich Library in Greenwich, Connecticut. At that meeting, common and
preferred shareholders, voting together as a single class, elected Frank J.
Fahrenkopf, Jr., Robert J. Morrissey, and Salvatore J. Zizza as Trustees of the
Fund. A total of 27,546,304 votes, 27,560,966 votes, and 27,590,271 votes were
cast in favor of each Trustee and a total of 581,763 votes, 567,101 votes, and
537,797 votes were withheld for each Trustee, respectively. In addition,
preferred shareholders, voting as a separate class, elected Anthony J. Colavita
as a Trustee of the Fund. A total of 984,387 votes were cast in favor of this
Trustee and a total of 31,494 votes were withheld for this Trustee.
Mario J. Gabelli, Thomas E. Bratter, James P. Conn, Vincent D. Enright,
John D. Gabelli, and Anthony R. Pustorino continue to serve in their capacities
as Trustees of the Fund.
We thank you for your participation and appreciate your continued support.
2
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------------ ------------ ------------
COMMON STOCKS -- 90.1%
ENERGY AND UTILITIES -- 78.3%
ENERGY AND UTILITIES: ALTERNATIVE ENERGY -- 0.3%
20,000 Ormat Industries Ltd. .............. $ 270,792 $ 260,074
12,500 Ormat Technologies Inc. ............ 273,994 614,750
------------ ------------
544,786 874,824
------------ ------------
ENERGY AND UTILITIES: ELECTRIC INTEGRATED -- 45.4%
248,000 Allegheny Energy Inc. .............. 7,414,609 12,427,280
23,000 ALLETE Inc. ........................ 728,776 966,000
75,000 Alliant Energy Corp. ............... 1,824,383 2,569,500
10,000 Ameren Corp. ....................... 437,020 422,300
80,000 American Electric
Power Co. Inc. .................. 2,629,105 3,218,400
1,800,000 Aquila Inc.+ ....................... 6,816,425 6,786,000
10,000 Avista Corp. ....................... 199,636 214,600
35,000 Black Hills Corp. .................. 1,060,967 1,122,100
30,000 Cleco Corp. ........................ 570,612 699,900
145,000 CMS Energy Corp. ................... 1,603,116 2,160,500
70,000 Constellation Energy
Group Inc. ...................... 4,354,534 5,747,000
30,000 Dominion Resources Inc. ............ 1,371,417 1,424,700
160,000 DPL Inc. ........................... 3,365,523 4,220,800
24,000 DTE Energy Co. ..................... 978,366 1,018,560
190,000 Duke Energy Corp. .................. 3,660,932 3,302,200
90,000 Edison International ............... 3,861,403 4,624,200
189,300 El Paso Electric Co.+ .............. 3,420,893 3,748,140
3,000 Entergy Corp. ...................... 84,249 361,440
51,000 FirstEnergy Corp. .................. 2,118,209 4,198,830
137,000 Florida Public Utilities Co. ....... 1,196,633 1,630,300
90,000 FPL Group Inc. ..................... 3,906,908 5,902,200
100,000 Great Plains Energy Inc. ........... 3,108,740 2,528,000
55,000 Hawaiian Electric
Industries Inc. ................. 1,433,833 1,360,150
92,000 Integrys Energy Group Inc. ......... 4,632,153 4,676,360
61,000 Maine & Maritimes Corp.+ ........... 1,926,684 2,586,400
66,000 MGE Energy Inc. .................... 1,951,270 2,152,920
45,000 NiSource Inc. ...................... 970,021 806,400
110,900 NorthWestern Corp. ................. 3,423,749 2,819,078
100,000 OGE Energy Corp. ................... 2,406,346 3,171,000
24,000 Otter Tail Corp. ................... 637,145 931,920
48,000 PG&E Corp. ......................... 1,280,160 1,905,120
35,000 PNM Resources Inc. ................. 470,892 418,600
100,000 Progress Energy Inc. ............... 4,383,880 4,183,000
40,000 Progress Energy Inc.,
CVO+ (a) ........................ 20,800 13,200
38,000 Public Service Enterprise
Group Inc. ...................... 996,629 1,745,340
41,000 Puget Energy Inc. .................. 963,390 983,590
60,500 SCANA Corp. ........................ 1,918,305 2,238,500
MARKET
SHARES COST VALUE
------------ ------------ ------------
35,000 Sierra Pacific Resources ........... $ 312,248 $ 444,850
104,000 TECO Energy Inc. ................... 1,560,497 2,234,960
20,000 The Empire District Electric Co. ... 426,495 370,800
150,000 Unisource Energy Corp. ............. 4,583,635 4,651,500
35,000 Unitil Corp. ....................... 926,911 948,850
47,000 Vectren Corp. ...................... 1,162,166 1,466,870
260,000 Westar Energy Inc. ................. 5,973,605 5,592,600
90,000 Wisconsin Energy Corp. ............. 3,273,387 4,069,800
195,000 Xcel Energy Inc. ................... 3,384,476 3,913,650
------------ ------------
103,731,133 122,978,408
------------ ------------
ENERGY AND UTILITIES:
ELECTRIC TRANSMISSION AND DISTRIBUTION -- 7.5%
243 Brookfield Infrastructure
Partners LP ........................ 5,103 4,763
50,000 CH Energy Group Inc. ............... 2,261,677 1,778,500
60,000 Consolidated Edison Inc. ........... 2,710,619 2,345,400
150,000 Energy East Corp. .................. 3,458,388 3,708,000
135,000 Northeast Utilities ................ 2,670,943 3,446,550
215,000 NSTAR .............................. 5,293,459 7,271,300
22,500 Pepco Holdings Inc. ................ 449,918 577,125
36,666 UIL Holdings Corp. ................. 966,693 1,078,347
------------ ------------
17,816,800 20,209,985
------------ ------------
ENERGY AND UTILITIES: GLOBAL UTILITIES -- 4.2%
1,500 Areva SA ........................... 613,197 1,754,731
8,000 Chubu Electric Power Co. Inc. ...... 189,551 195,131
40,000 Electric Power
Development Co. Ltd. ............ 1,440,584 1,484,202
20,000 Endesa SA .......................... 881,733 974,273
28,800 Endesa SA, ADR (a) ................. 1,544,139 1,403,367
200,000 Enel SpA ........................... 1,531,070 1,901,943
300,000 Hera SpA ........................... 433,286 1,225,714
8,000 Hokkaido Electric
Power Co. Inc. .................. 156,870 162,735
8,000 Hokuriku Electric Power Co. ........ 146,449 190,234
3,500 Huaneng Power
International Inc., ADR ......... 135,552 96,775
35,000 Korea Electric
Power Corp., ADR ................ 565,727 508,550
8,000 Kyushu Electric
Power Co. Inc. .................. 167,818 167,255
2,000 Niko Resources Ltd. ................ 113,769 191,704
8,000 Shikoku Electric
Power Co. Inc. .................. 155,987 219,993
8,000 The Chugoku Electric
Power Co. Inc. .................. 150,761 170,646
8,000 The Kansai Electric
Power Co. Inc. .................. 158,473 187,221
8,000 The Tokyo Electric
Power Co. Inc. .................. 191,450 205,679
See accompanying notes to financial statements.
3
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------------ ------------ ------------
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES (CONTINUED)
ENERGY AND UTILITIES: GLOBAL UTILITIES (CONTINUED)
15,000 Tohoku Electric
Power Co. Inc. .................. $ 284,854 $ 326,317
------------ ------------
8,861,270 11,366,470
------------ ------------
ENERGY AND UTILITIES: MERCHANT ENERGY -- 1.8%
35,810 Dynegy Inc., Cl. A+ ................ 175,000 306,176
8,130 Mirant Corp.+ ...................... 37,373 318,289
300,000 Mirant Corp. Escrow+ (a) ........... 0 0
220,000 The AES Corp.+ ..................... 3,262,437 4,226,200
------------ ------------
3,474,810 4,850,665
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS INTEGRATED -- 7.6%
180,000 El Paso Corp. ...................... 1,683,467 3,913,200
1,000 Energen Corp. ...................... 66,090 78,030
40,000 EnergySouth Inc. ................... 1,364,782 1,962,400
110,000 National Fuel Gas Co. .............. 3,549,518 6,542,800
100,000 ONEOK Inc. ......................... 2,674,346 4,883,000
120,000 Southern Union Co. ................. 2,059,886 3,242,400
------------ ------------
11,398,089 20,621,830
------------ ------------
ENERGY AND UTILITIES: NATURAL GAS UTILITIES -- 6.0%
26,000 AGL Resources Inc. ................. 643,173 899,080
50,000 Atmos Energy Corp. ................. 1,241,257 1,378,500
10,000 Chesapeake Utilities Corp. ......... 224,112 257,200
10,000 Corning Natural Gas Corp.+ ......... 157,501 163,750
30,000 Delta Natural Gas Co. Inc. ......... 502,057 783,600
90,000 Nicor Inc. ......................... 3,094,432 3,833,100
35,000 Piedmont Natural Gas Co. Inc. ...... 553,257 915,600
6,000 RGC Resources Inc. ................. 128,344 170,070
150,000 Southwest Gas Corp. ................ 4,133,813 4,459,500
120,000 Spectra Energy Corp. ............... 3,280,847 3,448,800
------------ ------------
13,958,793 16,309,200
------------ ------------
ENERGY AND UTILITIES: NATURAL RESOURCES -- 1.3%
4,000 Anadarko Petroleum Corp. ........... 141,060 299,360
19,000 Compania de Minas
Buenaventura SA, ADR ............ 423,453 1,242,030
16,000 Exxon Mobil Corp. .................. 926,773 1,410,080
3,000 Peabody Energy Corp. ............... 112,745 264,150
4,000 Royal Dutch Shell plc,
Cl. A, ADR ...................... 237,320 326,840
------------ ------------
1,841,351 3,542,460
------------ ------------
ENERGY AND UTILITIES: SERVICES -- 0.5%
50,000 ABB Ltd., ADR+ ..................... 546,150 1,416,000
9,000 Renegy Holdings Inc.+ .............. 109,212 34,110
------------ ------------
655,362 1,450,110
------------ ------------
MARKET
SHARES COST VALUE
------------ ------------ ------------
ENERGY AND UTILITIES: WATER -- 2.7%
14,000 American States Water Co. .......... $ 312,701 $ 489,160
30,000 American Water
Works Co. Inc.+ ................. 645,000 665,400
21,833 Aqua America Inc. .................. 221,008 348,673
24,750 Artesian Resources Corp., Cl. A .... 257,250 455,152
20,000 California Water Service Group ..... 555,152 655,400
7,500 Connecticut Water Service Inc. ..... 146,455 168,000
51,333 Middlesex Water Co. ................ 801,882 851,614
27,100 Pennichuck Corp. ................... 544,307 627,365
80,000 SJW Corp. .......................... 1,482,532 2,112,000
8,101 Southwest Water Co. ................ 52,047 81,172
12,000 Suez SA ............................ 387,529 820,355
12,000 Suez SA, Strips+ ................... 0 189
9,000 York Water Co. ..................... 108,269 131,130
------------ ------------
5,514,132 7,405,610
------------ ------------
DIVERSIFIED INDUSTRIAL -- 0.9%
1,000 Alstom ............................. 218,220 230,926
4,000 Bouygues SA ........................ 318,201 265,516
8,000 Cooper Industries Ltd., Cl. A ...... 300,920 316,000
55,000 General Electric Co. ............... 2,050,870 1,467,950
------------ ------------
2,888,211 2,280,392
------------ ------------
EQUIPMENT AND SUPPLIES -- 0.1%
50,000 Capstone Turbine Corp.+ ............ 83,080 209,500
2,000 Mueller Industries Inc. ............ 88,019 64,400
------------ ------------
171,099 273,900
------------ ------------
TOTAL ENERGY AND UTILITIES 170,855,836 212,163,854
------------ ------------
COMMUNICATIONS -- 9.9%
CABLE AND SATELLITE -- 3.0%
80,000 Cablevision Systems Corp.,
Cl. A+ .......................... 2,137,532 1,808,000
5,000 Cogeco Cable Inc. .................. 105,008 181,426
20,000 Cogeco Inc. ........................ 389,461 608,022
50,000 DISH Network Corp., Cl. A+ ......... 1,279,475 1,464,000
10,000 EchoStar Corp., Cl. A+ ............. 280,861 312,200
35,000 Liberty Global Inc., Cl. A+ ........ 739,454 1,100,050
20,000 Liberty Global Inc., Cl. C+ ........ 421,966 607,200
8,000 Rogers Communications Inc.,
Cl. B ........................... 119,139 309,280
65,000 The DIRECTV Group Inc.+ ............ 1,080,493 1,684,150
2,112 Zon Multimedia Servicos de
Telecomunicacoes e
Multimedia SGPS SA .............. 20,761 17,557
------------ ------------
6,574,150 8,091,885
------------ ------------
See accompanying notes to financial statements.
4
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
SHARES/ MARKET
UNITS COST VALUE
------------ ------------ ------------
COMMON STOCKS (CONTINUED)
COMMUNICATIONS (CONTINUED)
COMMUNICATIONS EQUIPMENT -- 0.4%
260,000 The Furukawa
Electric Co. Ltd. ............... $ 1,199,164 $ 1,128,785
------------ ------------
TELECOMMUNICATIONS -- 3.8%
45,00 AT&T Inc. .......................... 1,183,996 1,516,050
4,350 Bell Aliant Regional
Communications
Income Fund+ (a)(b) ............. 117,218 126,498
30,000 BT Group plc, ADR .................. 1,026,589 1,191,900
2,000 CenturyTel Inc. .................... 77,820 71,180
230,000 Cincinnati Bell Inc.+ .............. 1,028,373 915,400
10,000 Citizens Communications Co. ........ 136,800 113,400
500 Comstar United Telesystems
OJSC, GDR+ ...................... 6,453 5,000
500 Comstar United Telesystems
OJSC, GDR ....................... 5,628 5,000
20,000 D&E Communications Inc. ............ 190,498 177,800
35,000 Deutsche Telekom AG, ADR ........... 629,965 572,950
2,168 FairPoint Communications Inc. ...... 21,563 15,631
2,000 France Telecom SA, ADR ............. 22,799 59,260
200 Hutchison Telecommunications
International Ltd.+ ............. 163 284
500 Mobistar SA ........................ 44,141 40,503
200 Nippon Telegraph &
Telephone Corp. ................. 929,640 979,423
15,000 Portugal Telecom SGPS SA ........... 210,164 170,277
200 PT Indosat Tbk ..................... 128 146
500 Rostelecom, ADR .................... 32,190 36,265
500 Sistema JSFC, GDR .................. 17,383 15,030
1,200 Tele2 AB, Cl. B .................... 14,604 23,512
5,000 Telecom Italia SpA, ADR ............ 147,227 99,800
40,000 Touch America
Holdings Inc.+ (a) .............. 38,488 0
115,000 Verizon Communications Inc. ........ 4,291,018 4,071,000
------------ ------------
10,172,848 10,206,309
------------ ------------
WIRELESS COMMUNICATIONS -- 2.7%
600 America Movil SAB de CV,
Cl. L, ADR ...................... 9,424 31,650
2,000 China Mobile Ltd., ADR ............. 33,988 133,900
2,000 China Unicom Ltd., ADR ............. 16,278 37,040
4,500 Mobile TeleSystems
OJSC, ADR ....................... 175,074 344,745
171 MobileOne Ltd. ..................... 210 236
1,200 NTT DoCoMo Inc. .................... 1,732,443 1,762,961
3,000 QUALCOMM Inc. ...................... 115,589 133,110
50,000 Rural Cellular Corp., Cl. A+ ....... 2,203,484 2,225,500
600 SK Telecom Co. Ltd., ADR ........... 12,374 12,462
MARKET
SHARES COST VALUE
------------ ------------ ------------
200 SmarTone Telecommunications
Holdings Ltd. ................... $ 207 $ 206
10,000 Turkcell Iletisim Hizmet
A/S, ADR ........................ 207,432 145,500
29,000 United States Cellular Corp.+ ...... 1,391,580 1,639,950
28,000 Vimpel-Communications, ADR ......... 182,186 831,040
------------ ------------
6,080,269 7,298,300
------------ ------------
TOTAL COMMUNICATIONS ............... 24,026,431 26,725,279
------------ ------------
OTHER -- 1.9%
AEROSPACE -- 0.2%
65,000 Rolls-Royce Group plc+ ............. 513,387 442,137
5,824,000 Rolls-Royce Group plc, Cl. B ....... 11,568 11,601
------------ ------------
524,955 453,738
------------ ------------
AGRICULTURE -- 0.0%
2,000 Cadiz Inc.+ ........................ 23,688 32,240
------------ ------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.0%
1,000 BERU AG. ........................... 106,092 117,769
------------ ------------
ENTERTAINMENT -- 1.4%
90,000 Time Warner Inc. ................... 1,663,362 1,332,000
65,000 Vivendi. ........................... 2,444,738 2,466,385
------------ ------------
4,108,100 3,798,385
------------ ------------
PUBLISHING -- 0.0%
8,000 Idearc Inc. ........................ 29,814 18,800
------------ ------------
REAL ESTATE -- 0.1%
6,075 Brookfield Asset Management
Inc., Cl. A ..................... 65,353 197,681
------------ ------------
TRANSPORTATION -- 0.2%
13,000 GATX Corp. ......................... 395,808 576,290
------------ ------------
TOTAL OTHER ........................ 5,253,810 5,194,903
------------ ------------
TOTAL COMMON STOCKS ................ 200,136,077 244,084,036
------------ ------------
CONVERTIBLE PREFERRED STOCKS -- 1.8%
ENERGY AND UTILITIES -- 1.3%
ENERGY AND UTILITIES: NATURAL GAS INTEGRATED -- 1.3%
2,000 El Paso Corp.,
4.990% Cv. Pfd. (b) ............. 1,945,987 3,453,166
------------ ------------
COMMUNICATIONS -- 0.5%
TELECOMMUNICATIONS -- 0.5%
30,000 Citizens Utilities Trust,
5.000% Cv. Pfd. ................. 1,490,995 1,440,000
------------ ------------
TOTAL CONVERTIBLE
PREFERRED STOCKS ................ 3,436,982 4,893,166
------------ ------------
See accompanying notes to financial statements.
5
THE GABELLI UTILITY TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
PRINCIPAL MARKET
AMOUNT COST VALUE
------------ ------------ ------------
CORPORATE BONDS -- 0.0%
COMMUNICATIONS -- 0.0%
TELECOMMUNICATIONS -- 0.0%
$ 100,000 Williams Communications
Group Inc., Escrow,
10.875%, 10/01/09+ (a) .......... $ 0 $ 0
------------ ------------
SHARES
-----------
WARRANTS -- 0.2%
ENERGY AND UTILITIES -- 0.2%
ENERGY AND UTILITIES: MERCHANT ENERGY -- 0.2%
2,024 Calpine Corp., Ser. A,
expire 08/25/08+ ............... 52,600 972
26,107 Mirant Corp., Ser. A,
expire 01/03/11+ ................ 51,616 468,098
------------ ------------
104,216 469,070
------------ ------------
ENERGY AND UTILITIES:
NATURAL GAS UTILITIES -- 0.0%
3,000 Corning Natural Gas Corp.,
expire 08/17/11+ ................ 0 6,180
------------ ------------
TOTAL ENERGY AND UTILITIES ......... 104,216 475,250
------------ ------------
COMMUNICATIONS -- 0.0%
WIRELESS COMMUNICATIONS -- 0.0%
6,000 Bharti Airtel Ltd.,
expire 12/15/16+ (b) ............ 132,281 100,853
------------ ------------
TOTAL WARRANTS ..................... 236,497 576,103
------------ ------------
PRINCIPAL MARKET
AMOUNT COST VALUE
------------ ------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- 7.9%
U.S. TREASURY BILLS -- 5.3%
$ 14,456,000 U.S. Treasury Bills,
1.203% to 1.869%++,
07/03/08 to 10/09/08 ............ $ 14,426,880 $ 14,425,966
------------ ------------
U.S. TREASURY NOTES -- 2.6%
6,864,000 U.S. Treasury Note,
5.000%, 07/31/08 ................ 6,880,180 6,880,180
------------ ------------
TOTAL U.S. GOVERNMENT OBLIGATIONS .. 21,307,060 21,306,146
------------ ------------
TOTAL INVESTMENTS -- 100.0% ....................... $225,116,616 270,859,451
============
OTHER ASSETS AND LIABILITIES (NET) ................ (234,116)
PREFERRED SHARES
(1,184,700 preferred shares outstanding) ....... (54,592,500)
------------
NET ASSETS -- COMMON SHARES
(30,200,327 common shares outstanding) ......... $216,032,835
============
NET ASSET VALUE PER COMMON SHARE
($216,032,835 /30,200,327 shares
outstanding) .................................. $ 7.15
============
----------
(a) Security fair valued under procedures established by the Board of Trustees.
The procedures may include reviewing available financial information about
the company and reviewing the valuation of comparable securities and other
factors on a regular basis. At June 30, 2008, the market value of fair
valued securities amounted to $1,543,065 or 0.57% of total investments.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At June 30,
2008, the market value of Rule 144A securities amounted to $3,680,517 or
1.36% of total investments.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depositary Receipt
CVO Contingent Value Obligation
GDR Global Depositary Receipt
See accompanying notes to financial statements.
6
THE GABELLI UTILITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2008 (UNAUDITED)
ASSETS:
Investments, at value (cost $225,116,616) .................... $270,859,451
Foreign currency, at value (cost $29,151) .................... 29,141
Cash ......................................................... 860
Receivable for investments sold .............................. 10,561
Dividends and interest receivable ............................ 621,309
Deferred offering expense .................................... 14,361
Prepaid expense .............................................. 4,036
------------
TOTAL ASSETS ................................................. 271,539,719
------------
LIABILITIES:
Distributions payable ........................................ 39,540
Unrealized depreciation on swap contracts .................... 311,715
Payable for investment advisory fees ......................... 183,346
Payable for payroll expenses ................................. 141,324
Payable for accounting fees .................................. 3,751
Payable for shareholder communications expenses .............. 124,314
Payable for legal and audit fees ............................. 49,418
Other accrued expenses ....................................... 60,976
------------
TOTAL LIABILITIES ............................................ 914,384
------------
PREFERRED SHARES:
Series A Cumulative Preferred Shares (5.625%, $25
liquidation value, $0.001 par value, 1,200,000 shares
authorized with 1,183,700 shares issued and outstanding) .. 29,592,500
Series B Cumulative Preferred Shares (Auction Market, $25,000
liquidation value, $0.001 par value, 1,000 shares
authorized with 1,000 shares issued and outstanding) ...... 25,000,000
------------
TOTAL PREFERRED SHARES ....................................... 54,592,500
------------
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS ............... $216,032,835
============
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS CONSIST OF:
Paid-in capital, at $ 0.001 par value ........................ $171,841,828
Accumulated distributions in excess of net investment
income .................................................... (230,825)
Accumulated distributions in excess of net realized gain on
investments, swap contracts, and foreign currency
transactions .............................................. (1,010,056)
Net unrealized appreciation on investments ................... 45,742,835
Net unrealized depreciation on swap contracts ................ (311,715)
Net unrealized appreciation on foreign currency
translations .............................................. 768
------------
NET ASSETS ................................................... $216,032,835
============
NET ASSET VALUE PER COMMON SHARE:
($216,032,835 / 30,200,327 shares outstanding; unlimited
number of shares authorized) .............................. $ 7.15
============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2008 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $71,267) .................. $ 3,827,367
Interest ..................................................... 350,047
------------
TOTAL INVESTMENT INCOME ...................................... 4,177,414
------------
EXPENSES:
Investment advisory fees ..................................... 1,368,698
Shareholder communications expenses .......................... 166,090
Payroll expenses ............................................. 108,577
Shareholder services fees .................................... 90,163
Legal and audit fees ......................................... 41,836
Trustees' fees ............................................... 36,027
Auction agent expenses ....................................... 31,720
Accounting fees .............................................. 22,500
Custodian fees ............................................... 21,394
Interest expense ............................................. 49
Miscellaneous expenses ....................................... 40,253
------------
TOTAL EXPENSES ............................................... 1,927,307
Less:
Advisory fee reduction .................................... (271,471)
Custodian fee credits ..................................... (275)
------------
NET EXPENSES ................................................. 1,655,561
------------
NET INVESTMENT INCOME ........................................ 2,521,853
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
SWAP CONTRACTS, AND FOREIGN CURRENCY:
Net realized loss on investments ............................. (62,986)
Net realized loss on swap contracts .......................... (175,337)
Net realized loss on foreign currency transactions ........... (7,428)
------------
Net realized loss on investments, swap contracts, and foreign
currency transactions ..................................... (245,751)
------------
Net change in unrealized appreciation/depreciation:
on investments ............................................ (20,918,240)
on swap contracts ......................................... (225,614)
on foreign currency translations .......................... 432
------------
Net change in unrealized appreciation/depreciation on
investments, swap contracts, and foreign currency
translations .............................................. (21,143,422)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, SWAP
CONTRACTS, AND FOREIGN CURRENCY ........................... (21,389,173)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ......... (18,867,320)
Total Distributions to Preferred Shareholders ................ (1,354,358)
------------
NET DECREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS ................................. $(20,221,678)
============
See accompanying notes to financial statements.
7
THE GABELLI UTILITY TRUST
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 2008 DECEMBER 31,
(UNAUDITED) 2007
------------- ------------
OPERATIONS:
Net investment income .................................................... $ 2,521,853 $ 4,996,307
Net realized gain (loss) on investments, swap contracts, and foreign
currency transactions ................................................. (245,751) 12,402,375
Net change in unrealized appreciation/depreciation on investments,
swap contracts, and foreign currency translations ..................... (21,143,422) 6,616,470
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .......... (18,867,320) 24,015,152
------------ ------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:
Net investment income .................................................... (1,354,358)* (950,642)
Net realized short-term gain on investments, swap contracts, and
foreign currency transactions ......................................... -- (247,668)
Net realized long-term gain on investments, swap contracts, and
foreign currency transactions ......................................... -- (1,787,823)
------------ ------------
TOTAL DISTRIBUTIONS TO PREFERRED SHAREHOLDERS ............................ (1,354,358) (2,986,133)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS ............................................. (20,221,678) 21,029,019
------------ ------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income .................................................... (1,167,495)* (4,733,339)
Net realized short-term gain on investments, swap contracts,
and foreign currency transactions ..................................... -- (1,188,222)
Net realized long-term gain on investments, swap contracts, and
foreign currency transactions ......................................... -- (8,589,683)
Return of capital ........................................................ (9,667,147)* (6,966,691)
------------ ------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS ............................... (10,834,642) (21,477,935)
------------ ------------
FUND SHARE TRANSACTIONS:
Net increase in net assets from common shares issued upon
reinvestment of distributions ......................................... 1,472,032 3,159,205
Net increase in net assets from repurchase of preferred shares ........... -- 790
------------ ------------
NET INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS .................. 1,472,032 3,159,995
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS .......................................................... (29,584,288) 2,711,079
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Beginning of period ...................................................... 245,617,123 242,906,044
------------ ------------
End of period (including undistributed net investment income of
$0 and $0, respectively) .............................................. $216,032,835 $245,617,123
============ ============
----------
* Based on fiscal year to date book income. Amounts are subject to change and
recharacterization at fiscal year end.
See accompanying notes to financial statements.
8
THE GABELLI UTILITY TRUST
FINANCIAL HIGHLIGHTS
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2008 ----------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
------------- ------ ------ ------ ------ ------
SELECTED DATA FOR A SHARE OF BENEFICIAL
INTEREST OUTSTANDING THROUGHOUT EACH PERIOD:
OPERATING PERFORMANCE:
Net asset value, beginning of period .......... $ 8.18 $ 8.19 $ 6.98 $ 7.14 $ 6.83 $ 6.27
------ ------ ------ ------ ------ ------
Net investment income ......................... 0.08 0.19 0.17 0.18 0.16 0.10
Net realized and unrealized gain (loss)
on investments ............................. (0.72) 0.61 1.84 0.45 0.99 1.17
------ ------ ------ ------ ------ ------
Total from investment operations .............. (0.64) 0.80 2.01 0.63 1.15 1.27
------ ------ ------ ------ ------ ------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS: (a)
Net investment income ......................... (0.04)* (0.03) (0.02) (0.02) (0.06) (0.01)
Net realized gain on investments .............. -- (0.07) (0.08) (0.07) (0.03) (0.04)
------ ------ ------ ------ ------ ------
Total distributions to preferred
shareholders ............................... (0.04) (0.10) (0.10) (0.09) (0.09) (0.05)
------ ------ ------ ------ ------ ------
NET INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE
TO COMMON SHAREHOLDERS RESULTING FROM
OPERATIONS .................................... (0.68) 0.70 1.91 0.54 1.06 1.22
------ ------ ------ ------ ------ ------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ......................... (0.04)* (0.16) (0.16) (0.14) (0.10) (0.09)
Net realized gain on investments .............. -- (0.33) (0.56) (0.58) (0.05) (0.22)
Paid-in capital ............................... (0.32)* (0.23) -- -- (0.57) (0.41)
------ ------ ------ ------ ------ ------
Total distributions to common shareholders .... (0.36) (0.72) (0.72) (0.72) (0.72) (0.72)
------ ------ ------ ------ ------ ------
FUND SHARE TRANSACTIONS:
Increase in net asset value from common share
transactions ............................... 0.01 0.01 0.02 0.02 0.03 0.03
Increase (decrease) in net asset value from
shares issued in rights offering ........... -- -- -- -- (0.06) 0.12
Increase in net asset value from repurchase of
preferred shares ........................... -- 0.00(g) -- -- 0.00(g) --
Offering costs for preferred shares charged to
paid-in capital ............................ -- -- -- 0.00(g) 0.00(g) (0.09)
Offering costs for issuance of rights charged
to paid-in capital ......................... -- -- 0.00(g) (0.00)(g) (0.00)(g) --
------ ------ ------ ------ ------ ------
Total fund share transactions ................. 0.01 0.01 0.02 0.02 (0.03) 0.06
------ ------ ------ ------ ------ ------
NET ASSET VALUE ATTRIBUTABLE TO COMMON
SHAREHOLDERS, END OF PERIOD ................ $ 7.15 $ 8.18 $ 8.19 $ 6.98 $ 7.14 $ 6.83
====== ====== ====== ====== ====== ======
Net asset value total return + ................ (8.93)% 8.08% 27.46% 5.71% 13.43% 18.60%
====== ====== ====== ====== ====== ======
Market value, end of period ................... $ 9.30 $ 9.50 $ 9.94 $ 9.27 $ 9.30 $ 9.60
====== ====== ====== ====== ====== ======
Investment total return ++ .................... 1.99% 3.42% 16.47% 7.79% 5.11% 19.86%
====== ====== ====== ====== ====== ======
See accompanying notes to financial statements.
9
THE GABELLI UTILITY TRUST
FINANCIAL HIGHLIGHTS (CONTINUED)
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2008 ----------------------------------------------------
(UNAUDITED) 2007 2006 2005 2004 2003
------------- -------- -------- -------- -------- --------
SELECTED DATA FOR A SHARE OF BENEFICIAL
INTEREST OUTSTANDING THROUGHOUT EACH PERIOD:
RATIOS AND SUPPLEMENTAL DATA:
Net assets including liquidation value of
preferred shares, end of period
(in 000's) ................................. $270,626 $300,210 $297,511 $259,303 $261,563 $211,507
Net assets attributable to common shares, end
of period (in 000's) ....................... $216,033 $245,617 $242,906 $204,698 $206,958 $156,507
Ratio of net investment income to average net
assets attributable to common shares before
preferred share distributions .............. 2.29%(f) 2.03% 2.24% 2.42% 2.32% 1.52%
Ratio of operating expenses to average net
assets attributable to common shares net of
advisory fee reduction, if any (b)(c) ...... 1.51%(f) 1.63% 1.75% 1.85% 2.04% 2.04%
Ratio of operating expenses to average net
assets including liquidation value of
preferred shares net of advisory fee
reduction, if any (b)(c) ................... 1.21%(f) 1.34% 1.40% 1.47% 1.52% 1.68%
Portfolio turnover rate +++ ................... 3% 13% 33% 19% 18% 28%
PREFERRED SHARES:
5.625% SERIES A CUMULATIVE PREFERRED SHARES
Liquidation value, end of period (in 000's) ... $ 29,593 $ 29,593 $ 29,605 $ 29,605 $ 29,605 $ 30,000
Total shares outstanding (in 000's) ........... 1,184 1,184 1,184 1,184 1,184 1,200
Liquidation preference per share ............. $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
Average market value (d) ...................... $ 23.71 $ 23.36 $ 23.80 $ 25.02 $ 24.68 $ 25.12
Asset coverage per share ...................... $ 123.93 $ 137.48 $ 136.21 $ 118.72 $ 119.75 $ 96.14
SERIES B AUCTION MARKET CUMULATIVE PREFERRED
SHARES
Liquidation value, end of period (in 000's) ... $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000
Total shares outstanding (in 000's) ........... 1 1 1 1 1 1
Liquidation preference per share ............. $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000
Average market value (d) ...................... $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000
Asset coverage per share ...................... $123,930 $137,478 $136,210 $118,718 $119,752 $ 96,140
ASSET COVERAGE (e) ............................ 496% 550% 545% 475% 479% 385%
----------
+ Based on net asset value per share, adjusted for reinvestment of
distributions at prices obtained under the Fund's dividend reinvestment
plan, including the effect of shares issued pursuant to 2004 and 2003
rights offerings, assuming full subscription by shareholder. Total return
for a period of less than one year is not annualized.
++ Based on market value per share, adjusted for reinvestment of distributions
at prices obtained under the Fund's dividend reinvestment plan, including
the effect of shares issued pursuant to 2004 and 2003 rights offerings,
assuming full subscription by shareholder. Total return for a period of
less than one year is not annualized.
+++ Effective in 2008, a change in accounting policy was adopted with regard to
the calculation of the portfolio turnover rate. Had this policy been
adopted retroactively, the portfolio turnover rate for the fiscal years
ended December 31, 2007, 2006, 2005, 2004, and 2003 would have been 29%,
34%, 29%, 30%, and 32%, respectively.
* Based on fiscal year to date book income. Amounts are subject to change and
recharacterization at fiscal year end.
(a) Calculated based upon average common shares outstanding on the record dates
throughout the period.
(b) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian
fee credits for the fiscal year ended December 31, 2007, the ratios of
operating expenses to average net assets attributable to common shares net
of advisory fee reduction would have been 1.63% and the ratios of operating
expenses to average net assets including liquidation value of preferred
shares net of fee reduction would have been 1.33%. For the six months ended
June 30, 2008 and the fiscal years ended December 31, 2006, 2005, 2004, and
2003, the effect of the custodian fee credits was minimal.
(c) The Fund incurred interest expense during the fiscal year ended December
31, 2007. If interest expense had not been incurred, the ratios of
operating expenses to average net assets attributable to common shares
would have been 1.62% and the ratios of operating expenses to average net
assets including liquidation value of preferred shares would have been
1.33%. For the six months ended June 30, 2008, the effect of interest
expense was minimal.
(d) Based on weekly prices.
(e) Asset coverage is calculated by combining all series of preferred shares.
(f) Annualized.
(g) Amount represents less than $0.005 per share.
See accompanying notes to financial statements.
10
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION. The Gabelli Utility Trust (the "Fund") is a non-diversified
closed-end management investment company organized as a Delaware statutory trust
on February 25, 1999 and registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). Investment operations commenced on July 9, 1999.
The Fund's primary objective is long-term growth of capital and income. The
Fund will invest 80% of its assets, under normal market conditions, in common
stocks and other securities of foreign and domestic companies involved in
providing products, services, or equipment for (i) the generation or
distribution of electricity, gas, and water and (ii) telecommunications services
or infrastructure operations (the "80% Policy"). The 80% Policy may be changed
without shareholder approval. However, the Fund has adopted a policy to provide
shareholders with notice at least 60 days prior to the implementation of any
change in the 80% Policy.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with United States ("U.S.") generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Trustees (the "Board") so determines, by such other method as the Board
shall determine in good faith to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on a foreign market are generally
valued at the preceding closing values of such securities on the relevant
market, but may be fair valued pursuant to procedures established by the Board
if market conditions change significantly after the close of the foreign market
but prior to the close of business on the day the securities are being valued.
Debt instruments with remaining maturities of 60 days or less that are not
credit impaired are valued at amortized cost, unless the Board determines such
amount does not reflect the securities' fair value, in which case these
securities will be fair valued as determined by the Board. Debt instruments
having a maturity greater than 60 days for which market quotations are readily
available are valued at the average of the latest bid and asked prices. If there
were no asked prices quoted on such day, the security is valued using the
closing bid price. Futures contracts are valued at the closing settlement price
of the exchange or board of trade on which the applicable contract is traded.
Securities and assets for which market quotations are not readily available
are fair valued as determined by the Board. Fair valuation methodologies and
procedures may include, but are not limited to: analysis and review of available
financial and non-financial information about the company; comparisons to the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities to the equivalent U.S. dollar value ADR securities at the
close of the U.S. exchange; and evaluation of any other information that could
be indicative of the value of the security.
On January 1, 2008, the Fund adopted Statement of Financial Accounting
Standard No. 157, "Fair Value Measurements" ("SFAS 157") that clarifies the
definition of fair value for financial reporting, establishes a framework for
measuring fair value, and requires additional disclosures about the use of fair
value measurements. The three levels of the fair value hierarchy under SFAS 157
are described below:
- Level 1 - quoted prices in active markets for identical securities;
11
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- Level 2 - other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit
risk, etc.); and
- Level 3 - significant unobservable inputs (including the Fund's
determinations as to the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities. The
summary of inputs used to value the Fund's net assets as of June 30, 2008 is as
follows:
INVESTMENTS IN OTHER FINANCIAL
SECURITIES INSTRUMENTS (UNREALIZED
VALUATION INPUTS (MARKET VALUE) DEPRECIATION)*
---------------- -------------- -----------------------
Level 1 - Quoted Prices ........................ $248,136,738 --
Level 2 - Other Significant Observable Inputs .. 22,709,513 $(311,715)
Level 3 - Significant Unobservable Inputs ...... 13,200 --
------------ ---------
TOTAL .......................................... $270,859,451 $(311,715)
============ =========
----------
* Other financial instruments are derivative instruments not reflected in the
Schedule of Investments, such as futures, forwards, and swaps which are
valued at the unrealized appreciation/depreciation on the investment.
The following is a reconciliation of Level 3 investments for which
significant unobservable inputs were used to determine fair value:
INVESTMENTS
IN SECURITIES
(MARKET VALUE)
-------------
BALANCE AS OF 12/31/07.............................. $13,200
Accrued discounts/premiums.......................... --
Realized gain (loss)................................ --
Change in unrealized appreciation/depreciation...... --
Net purchases (sales)............................... --
Transfers in and/or out of Level 3.................. --
-------
BALANCE AS OF 06/30/08.............................. $13,200
=======
In March 2008, The Financial Accounting Standards Board (The "FASB") issued
Statement of Financial Accounting Standard No. 161, "Disclosures about
Derivative Instruments and Hedging Activities" ("SFAS 161") that is effective
for fiscal years beginning after November 15, 2008. SFAS 161 is intended to
improve financial reporting for derivative instruments by requiring enhanced
disclosure that enables investors to understand how and why an entity uses
derivatives, how derivatives are accounted for, and how derivative instruments
affect an entity's results of operations and financial position. Management is
currently evaluating the implications of SFAS 161 on the Fund's financial
statement disclosures.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
The Fund will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by the Fund in each agreement. The Fund will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited. At June 30,
2008, there were no open repurchase agreements.
12
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
SWAP AGREEMENTS. The Fund may enter into equity, contract for differences,
and interest rate swap or cap transactions. The use of swaps and caps is a
highly specialized activity that involves investment techniques and risks
different from those associated with ordinary portfolio transactions. Swap
agreements may involve, to varying degrees, elements of market and counterparty
risk, and exposure to loss in excess of the related amounts reflected in the
Statement of Assets and Liabilities. In an interest rate swap, the Fund would
agree to pay to the other party to the interest rate swap (which is known as the
"counterparty") periodically a fixed rate payment in exchange for the
counterparty agreeing to pay to the Fund periodically a variable rate payment
that is intended to approximate the Fund's variable rate payment obligation on
the Series B Preferred Shares. In an interest rate cap, the Fund would pay a
premium to the counterparty and, to the extent that a specified variable rate
index exceeds a predetermined fixed rate, would receive from the counterparty
payments of the difference based on the notional amount of such cap. In an
equity swap, a set of future cash flows are exchanged between two
counterparties. One of these cash flow streams will typically be based on a
reference interest rate combined with the performance of a notional value of
shares of a stock. The other will be based on the performance of the shares of a
stock. Swap and cap transactions introduce additional risk because the Fund
would remain obligated to pay preferred stock dividends when due in accordance
with the Statement of Preferences even if the counterparty defaulted. If there
is a default by the counterparty to a swap contract, the Fund will be limited to
contractual remedies pursuant to the agreements related to the transaction.
There is no assurance that the swap contract counterparties will be able to meet
their obligations pursuant to the swap contracts or that, in the event of
default, the Fund will succeed in pursuing contractual remedies. The Fund thus
assumes the risk that it may be delayed in or prevented from obtaining payments
owed to it pursuant to the swap contracts. The creditworthiness of the swap
contract counterparties is closely monitored in order to minimize this risk.
Depending on the general state of short-term interest rates and the returns on
the Fund's portfolio securities at that point in time, such a default could
negatively affect the Fund's ability to make dividend payments. In addition, at
the time an interest rate swap or cap transaction reaches its scheduled
termination date, there is a risk that the Fund will not be able to obtain a
replacement transaction or that the terms of the replacement will not be as
favorable as on the expiring transaction. If this occurs, it could have a
negative impact on the Fund's ability to make dividend payments.
The use of derivative instruments involves, to varying degrees, elements of
market and counterparty risk in excess of the amount recognized below.
Unrealized gains related to swaps are reported as an asset and unrealized
losses are reported as a liability in the Statement of Assets and Liabilities.
The change in the value of swaps, including the accrual of periodic amounts of
interest to be paid or received on swaps, is reported as unrealized gains or
losses in the Statement of Operations. A realized gain or loss is recorded upon
payment or receipt of a periodic payment or termination of swap agreements.
The Fund has entered into an interest rate swap agreement with Citibank
N.A. Under the agreement, the Fund receives a floating rate of interest and pays
a respective fixed rate of interest on the nominal value of the swap. Details of
the swap at June 30, 2008 are as follows:
NOTIONAL FLOATING RATES* TERMINATION NET UNREALIZED
AMOUNT FIXED RATE (RATE RESET MONTHLY) DATE DEPRECIATION
----------- ---------- -------------------- ----------- --------------
$25,000,000 4.00% 2.45938% 06/02/10 $(291,439)
----------
* Based on Libor (London Interbank Offered Rate).
The Fund has entered into a contract for differences swap agreement with
Bear Stearns International Limited. Details of the swap at June 30, 2008 is as
follows:
NOTIONAL EQUITY SECURITY INTEREST RATE/ TERMINATION NET UNREALIZED
AMOUNT RECEIVED EQUITY SECURITY PAID DATE DEPRECIATION
------------------------ --------------------- -------------------------------- ----------- --------------
$257,465 (35,000 shares) Market Value Overnight LIBOR plus 40 bps plus
Appreciation on: Market Value Depreciation on:
Rolls-Royce Group plc Rolls-Royce Group plc 10/15/08 $(20,276)
13
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose
of hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin." Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuations in the
value of the contract, which are included in unrealized
appreciation/depreciation on investments and futures contracts. The Fund
recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as
a hedging instrument. The change in value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in value of the hedged investments. In addition, there
is the risk that the Fund may not be able to enter into a closing transaction
because of an illiquid secondary market. At June 30, 2008, there were no open
futures contracts.
FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign
exchange contracts for hedging a specific transaction with respect to either the
currency in which the transaction is denominated or another currency as deemed
appropriate by the Adviser. Forward foreign exchange contracts are valued at the
forward rate and are marked-to-market daily. The change in market value is
included in unrealized appreciation/depreciation on investments and foreign
currency translations. 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.
The use of forward foreign exchange contracts does not eliminate
fluctuations in the underlying prices of the Fund's portfolio securities, but it
does establish a rate of exchange that can be achieved in the future. Although
forward foreign exchange contracts limit the risk of loss due to a decline in
the value of the hedged currency, they also limit any potential gain that might
result should the value of the currency increase. In addition, the Fund could be
exposed to risks if the counterparties to the contracts are unable to meet the
terms of their contracts. At June 30, 2008, there were no open forward foreign
exchange contracts.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are
maintained in U.S. dollars. Foreign currencies, investments, and other assets
and liabilities are translated into U.S. dollars at the current exchange rates.
Purchases and sales of investment securities, income, and expenses are
translated at the exchange rate prevailing on the respective dates of such
transactions. Unrealized gains and losses that result from changes in foreign
exchange rates and/or changes in market prices of securities have been included
in unrealized appreciation/depreciation on investments and foreign currency
translations. Net realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Fund and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Fund will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
14
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Fund is informed of the dividend.
CUSTODIAN FEE CREDITS AND INTEREST EXPENSE. When cash balances are
maintained in the custody account, the Fund receives credits which are used to
offset custodian fees. The gross expenses paid under the custody arrangement are
included in custodian fees in the Statement of Operations with the corresponding
expense offset, if any, shown as "custodian fee credits." When cash balances are
overdrawn, the Fund is charged an overdraft fee equal to 110% of the 90 day
Treasury Bill rate. This amount, if any, would be shown as "interest expense" in
the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to common shareholders are
recorded on the ex-dividend date. Distributions to shareholders are based on
income and capital gains as determined in accordance with federal income tax
regulations, which may differ from income and capital gains as determined under
U.S. generally accepted accounting principles. These differences are primarily
due to differing treatments of income and gains on various investment securities
and foreign currency transactions held by the Fund, timing differences, and
differing characterizations of distributions made by the Fund. Distributions
from net investment income include net realized gains on foreign currency
transactions. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, adjustments are made to
the appropriate capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Fund.
Distributions to shareholders of the Fund's 5.625% Series A Cumulative
Preferred Shares and Series B Auction Market Cumulative Preferred Shares
("Cumulative Preferred Shares") are recorded on a daily basis and are determined
as described in Note 5.
The tax character of distributions paid during the fiscal year ended
December 31, 2007 was as follows:
COMMON PREFERRED
----------- ----------
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) ...... $ 5,894,993 $1,213,076
Net long-term capital gains ..................... 8,616,251 1,773,057
Return of capital ............................... 6,966,691 --
----------- ----------
Total distributions paid ........................ $21,477,935 $2,986,133
=========== ==========
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for federal income taxes is required.
At December 31, 2007, the components of accumulated earnings/(losses) on a
tax basis were as follows:
Net unrealized appreciation on investments ...... $65,827,316
Net unrealized depreciation on foreign currency
and swap contracts ........................... (85,765)
Other temporary differences* .................... (161,371)
-----------
Total ........................................... $65,580,180
===========
----------
* Other temporary differences are primarily due to accrued income on swap
gains.
The following summarizes the tax cost of investments, swap contracts, and the
related unrealized appreciation/(depreciation) at June 30, 2008:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
COST APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ ------------ --------------
Investments.......... $226,070,933 $51,684,521 $(6,896,003) $44,788,518
Swap contracts....... -- -- (311,715) (311,715)
------------ ----------- ----------- -----------
$226,070,933 $51,684,521 $(7,207,718) $44,476,803
============ =========== =========== ===========
15
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109" (the "Interpretation") established a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether the Fund is taxable in
a particular jurisdiction) and required certain expanded tax disclosures.
For the six months ended June 30, 2008, the Fund did not have any liability
for any unrecognized tax benefits. The Fund recognizes interest and penalties,
if any, related to unrecognized tax benefits as income tax expenses in the
Statement of Operations. The Fund is not subject to examination by U.S. federal
tax authorities for tax years before 2004 and by state tax authorities for tax
years before 2003.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Fund has entered into an
investment advisory agreement (the "Advisory Agreement") with the Adviser which
provides that the Fund will pay the Adviser a fee, computed weekly and paid
monthly, equal on an annual basis to 1.00% of the value of its average weekly
net assets including the liquidation value of the preferred stock. In accordance
with the Advisory Agreement, the Adviser provides a continuous investment
program for the Fund's portfolio and oversees the administration of all aspects
of the Fund's business and affairs. The Adviser has agreed to reduce the
management fee on the incremental assets attributable to the Cumulative
Preferred Shares if the total return of the NAV of the common shares of the
Fund, including distributions and advisory fee subject to reduction, does not
exceed the stated dividend rate or corresponding swap rate of the Cumulative
Preferred Shares for the fiscal year.
The Fund's total return on the NAV of the common shares is monitored on a
monthly basis to assess whether the total return on the NAV of the common shares
exceeds the stated dividend rate or corresponding swap rate of each particular
series of Cumulative Preferred Shares for the period. For the six months ended
June 30, 2008, the Fund's total return on the NAV of the common shares did not
exceed the stated dividend rate or corresponding swap rate on any of the
outstanding preferred shares. Thus, management fees with respect to the
liquidation value of the preferred share assets were reduced by $271,471.
During the six months ended June 30, 2008, the Fund paid brokerage
commissions on security trades of $11,403 to Gabelli & Company, Inc. ("Gabelli &
Company"), an affiliate of the Adviser.
The cost of calculating the Fund's NAV per share is a Fund expense pursuant
to the Advisory Agreement between the Fund and the Adviser. During the six
months ended June 30, 2008, the Fund paid or accrued $22,500 to the Adviser in
connection with the cost of computing the Fund's NAV.
As per the approval of the Board, the Fund compensates officers of the
Fund, who are employed by the Fund and are not employed by the Adviser (although
the officers may receive incentive based variable compensation from affiliates
of the Adviser) and pays its allocated portion of the cost of the Fund's Chief
Compliance Officer. For the six months ended June 30, 2008, the Fund paid or
accrued $108,577, which is included in payroll expenses in the Statement of
Operations.
The Fund pays each Trustee who is not considered to be an affiliated person
an annual retainer of $6,000 plus $500 for each Board meeting attended and they
are reimbursed for any out of pocket expenses incurred in attending meetings.
All Board committee members receive $500 per meeting attended. In addition, the
Audit Committee Chairman receives an annual fee of $3,000, the Nominating
Committee Chairman receives an annual fee of $2,000, and the Lead Trustee
receives an annual fee of $1,000. Trustees who are directors or employees of the
Adviser or an affiliated company receive no compensation or expense
reimbursement from the Fund.
4. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the six months ended June 30, 2008, other than short-term securities and U.S.
Government obligations, aggregated $9,813,482 and $6,425,489, respectively.
Purchases of U.S. Government obligations for the six months ended June 30,
2008, other than short-term obligations, aggregated $6,958,380.
16
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
5. CAPITAL. The Fund is authorized to issue an unlimited number of shares of
beneficial interest (par value $0.001). The Board has authorized the repurchase
of its common shares on the open market when the shares are trading at a
discount of 10% or more (or such other percentage as the Board may determine
from time to time) from the NAV of the shares. During the six months ended June
30, 2008, the Fund did not repurchase any common shares of beneficial interest
in the open market.
Transactions in common shares of beneficial interest were as follows:
SIX MONTHS ENDED
JUNE 30, 2008 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2007
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------- ----------
Net increase from shares issued upon
reinvestment of distributions ........... 179,139 $1,472,032 347,381 $3,159,205
At the Fund's November 14, 2007 Board meeting, the Board approved the
filing of a shelf registration with the SEC which will give the Fund the ability
to offer additional preferred shares. The shelf registration was declared
effective by the SEC on June 13, 2008.
The Fund is authorized to issue up to 2,005,000 shares of $0.001 par value
Cumulative Preferred Shares. The Cumulative Preferred Shares are senior to the
common shares and result in the financial leveraging of the common shares. Such
leveraging tends to magnify both the risks and opportunities to common
shareholders. Dividends on shares of the Cumulative Preferred Shares are
cumulative. The Fund is required by the 1940 Act and by the Statement of
Preferences to meet certain asset coverage tests with respect to the Cumulative
Preferred Shares. If the Fund fails to meet these requirements and does not
correct such failure, the Fund may be required to redeem, in part or in full,
the 5.625% Series A and Series B Auction Market Cumulative Preferred Shares at a
redemption price of $25.00 and $25,000, respectively, per share plus an amount
equal to the accumulated and unpaid dividends whether or not declared on such
shares in order to meet these requirements. Additionally, failure to meet the
foregoing asset coverage requirements could restrict the Fund's ability to pay
dividends to common shareholders and could lead to sales of portfolio securities
at inopportune times. The income received on the Fund's assets may vary in a
manner unrelated to the fixed and variable rates, which could have either a
beneficial or detrimental impact on net investment income and gains available to
common shareholders.
On July 31, 2003, the Fund received net proceeds of $28,895,026 (after
underwriting discounts of $945,000 and offering expenses of $159,974) from the
public offering of 1,200,000 shares of 5.625% Series A Cumulative Preferred
Shares. Commencing July 31, 2008 and thereafter, the Fund, at its option, may
redeem the 5.625% Series A Cumulative Preferred Shares in whole or in part at
the redemption price at any time. During the six months ended June 30, 2008, the
Fund did not repurchase any shares of 5.625% Series A Cumulative Preferred
Shares. At June 30, 2008, 1,183,700 shares of 5.625% Series A Cumulative
Preferred Shares were outstanding and accrued dividends amounted to $23,119.
On July 31, 2003, the Fund received net proceeds of $24,590,026 (after
underwriting discounts of $250,000 and offering expenses of $159,974) from the
public offering of 1,000 shares of Series B Auction Market Cumulative Preferred
Shares. The dividend rate, as set by the auction process, which is generally
held every seven days, is expected to vary with short-term interest rates. The
dividend rates of Series B Auction Market Cumulative Preferred Shares ranged
from 3.550% to 5.150% for the six months ended June 30, 2008. If the number of
Series B Auction Market Cumulative Preferred Shares subject to bid orders by
potential holders is less than the number of Series B Auction Market Cumulative
Preferred Shares subject to sell orders, then the auction is considered to be a
failed auction, and the dividend rate will be the maximum rate. In that event,
holders that have submitted sell orders may not be able to sell any or all of
the Series B Auction Market Cumulative Preferred Shares for which they have
submitted sell orders. The current maximum rate is 125% of the seven day
Telerate/British Bankers Association LIBOR on the day of such auction. Existing
shareholders may submit an order to hold, bid, or sell such shares on each
auction date. Series B Auction Market Cumulative Preferred Shares shareholders
may also trade shares in the secondary market. The Fund, at its option, may
redeem the Series B Auction Market Cumulative Preferred Shares in whole or in
part at the redemption price at any time. During the six months ended June 30,
17
THE GABELLI UTILITY TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
2008, the Fund did not redeem any shares of Series B Auction Market Cumulative
Preferred Shares. At June 30, 2008, 1,000 shares of Series B Auction Market
Cumulative Preferred Shares were outstanding with an annualized dividend rate of
3.941% per share and accrued dividends amounted to $16,421.
The holders of Cumulative Preferred Shares generally are entitled to one
vote per share held on each matter submitted to a vote of shareholders of the
Fund and will vote together with holders of common stock as a single class. The
holders of Cumulative Preferred Shares voting together as a single class also
have the right currently to elect two Trustees and under certain circumstances
are entitled to elect a majority of the Board of Trustees. In addition, the
affirmative vote of a majority of the votes entitled to be cast by holders of
all outstanding shares of the preferred shares, voting as a single class, will
be required to approve any plan of reorganization adversely affecting the
preferred shares, and the approval of two-thirds of each class, voting
separately, of the Fund's outstanding voting stock must approve the conversion
of the Fund from a closed-end to an open-end investment company. The approval of
a majority (as defined in the 1940 Act) of the outstanding preferred shares and
a majority (as defined in the 1940 Act) of the Fund's outstanding voting
securities are required to approve certain other actions, including changes in
the Fund's investment objectives or fundamental investment policies.
6. INDUSTRY CONCENTRATION. Because the Fund primarily invests in common stocks
and other securities of foreign and domestic companies in the utility industry,
its portfolio may be subject to greater risk and market fluctuations than a
portfolio of securities representing a broad range of investments.
7. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
8. OTHER MATTERS. On April 24, 2008, the Adviser entered into an administrative
settlement with the SEC to resolve the SEC's inquiry regarding prior frequent
trading activity in shares of the GAMCO Global Growth Fund (the "Global Growth
Fund") by one investor who was banned from the Global Growth Fund in August
2002. In the settlement, the SEC found that the Adviser had violated Section
206(2) of the Investment Advisers Act, Section 17(d) of the 1940 Act and Rule
17d-1 thereunder, and had aided and abetted and caused violations of Section
12(d)(1)(B)(i) of the 1940 Act. Under the terms of the settlement, the Adviser,
while neither admitting nor denying the SEC's findings and allegations, agreed,
among other things, to pay the previously reserved total of $16 million
(including a $5 million penalty), of which at least $11 million will be
distributed to shareholders of the Global Growth Fund in accordance with a plan
to be developed by an independent distribution consultant and approved by the
independent directors of the Global Growth Fund and the staff of the SEC, and to
cease and desist from future violations of the above referenced federal
securities laws. The settlement will not have a material adverse impact on the
Adviser or its ability to fulfill its obligations under the Advisory Agreement.
On the same day, the SEC filed a civil action against the Executive Vice
President and Chief Operating Officer of the Adviser, alleging violations of
certain federal securities laws arising from the same matter. The officer is
also an officer of the Global Growth Fund and other funds in the Gabelli/GAMCO
fund complex. The officer denies the allegations and is continuing in his
positions with the Adviser and the funds. The Adviser currently expects that any
resolution of the action against the officer will not have a material adverse
impact on the Adviser or its ability to fulfill its obligations under the
Advisory Agreement.
On a separate matter, in August 2008, the Adviser made an offer to the
staff of the SEC to settle a previously disclosed matter concerning compliance
with Section 19(a) and Rule 19a-1 of the 1940 Act by two closed-end funds
managed by the Adviser. These provisions require registered investment companies
to provide written statements to shareholders when a distribution is made in the
nature of a dividend from a source other than net investment income. While the
two funds sent annual statements and provided other materials containing this
information, the funds did not send the notices required by Rule 19a-1 to
shareholders with each distribution in 2002 and 2003. The Adviser believes that
the funds have been in compliance with Rule 19a-1 since that time. The Adviser
believes that the settlement would have no effect on the funds or any material
adverse effect on the Adviser or its ability to manage the funds. This offer of
settlement is subject to final agreement regarding the specific language of the
SEC's administrative order and other settlement documents and approval by the
SEC.
18
THE GABELLI UTILITY TRUST
BOARD CONSIDERATION AND RE-APPROVAL OF
INVESTMENT ADVISORY AGREEMENT (UNAUDITED)
At its meeting on February 28, 2008, the Board of Trustees ("Board") of the Fund
approved the continuation of the investment advisory agreement with the Adviser
for the Fund on the basis of the recommendation by the trustees who are not
"interested persons" of the Fund (the "Independent Board Members"). The
following paragraphs summarize the material information and factors considered
by the independent board members as well as their conclusions relative to such
factors.
1. NATURE, EXTENT, AND QUALITY OF SERVICES. The Independent Board Members
considered the nature, quality, and extent of administrative and shareholder
services performed by the Adviser, including portfolio management, supervision
of Fund operations and compliance and regulatory filings and disclosures to
shareholders, general oversight of other service providers, coordination of Fund
marketing initiatives, review of Fund legal issues, assisting the Independent
Board Members in their capacity as trustees and other services. The Independent
Board Members concluded that the services are extensive in nature and that the
Adviser consistently delivered a high level of service.
2. INVESTMENT PERFORMANCE OF THE FUND AND ADVISER. The Independent Board Members
considered investment performance for the Fund over various periods of time as
compared with the performance of such Fund's Lipper peer group, and concluded
that the Adviser was delivering satisfactory performance results over the long
term consistent with the long-term investment strategies being pursued by the
Fund.
3. COSTS OF SERVICES AND PROFITS REALIZED BY THE ADVISER.
(A) COSTS OF SERVICES TO FUND: FEES AND EXPENSES. The Independent Board Members
considered the Fund's management fee rate and expense ratio relative to industry
averages for the Fund's peer group category and the advisory fees charged by the
Adviser and its affiliates to other fund and non-fund clients. The Independent
Board Members noted that the mix of services under the Agreement are much more
extensive than those under the advisory agreements for non-fund clients.
(B) PROFITABILITY AND COSTS OF SERVICES TO ADVISER. The Independent Board
Members considered the Adviser's overall profitability and costs, and proforma
estimates of the Adviser's profitability and costs attributable to the Fund (i)
as part of the Gabelli/GAMCO fund complex and (ii) assuming the Fund constituted
the Adviser's only investment company under its management. The Independent
Board Members also considered whether the amount of profit is a fair
entrepreneurial profit for the management of the Fund and noted that the Adviser
has substantially increased its resources devoted to Fund matters in response to
regulatory requirements and enhanced Fund policies and procedures. The
Independent Board Members concluded that the Adviser's profitability was at an
acceptable level, particularly in light of the quality of services provided to
the Fund. The Independent Board Members also noted that a substantial portion of
the Fund's portfolio transactions were executed by an affiliated broker, and
that the affiliated broker received commissions from the Fund, and the Adviser
received a moderate amount of soft dollar benefits (but no third party research
services) from unaffiliated brokers through the Fund's portfolio brokerage.
4. EXTENT OF ECONOMIES OF SCALE AS FUND GROWS. The Independent Board Members
considered whether there have been economies of scale with respect to the
management of the Fund and whether the Fund has appropriately benefited from any
economies of scale. The Independent Board Members noted that economies of scale
may develop for certain funds as their assets increase and their fund level
expenses decline as a percentage of assets, but that fund level economies of
scale may not necessarily result in Adviser level economies of scale. They also
recognized that the Adviser has agreed to reduce the advisory fee on incremental
assets attributable to the preferred shares if the total return of the common
shares does not exceed a specified amount (i.e., the dividend rate paid on
preferred shares). The Independent Board Members concluded that there was an
appropriate sharing of economies of scale.
19
THE GABELLI UTILITY TRUST
BOARD CONSIDERATION AND RE-APPROVAL OF
INVESTMENT ADVISORY AGREEMENT (CONTINUED) (UNAUDITED)
5. WHETHER FEE LEVELS REFLECT ECONOMIES OF SCALE. The Independent Board Members
also considered whether the management fee rate is reasonable in relation to the
asset size of the Fund and any economies of scale that may exist and concluded
that it currently was reasonable.
6. OTHER RELEVANT CONSIDERATIONS.
(A) ADVISER PERSONNEL AND METHODS. The Independent Board Members considered the
size, education, and experience of the Adviser's staff, the Adviser's
fundamental research capabilities, and the Adviser's approach to recruiting,
training, and retaining portfolio managers and other research and management
personnel, and concluded that in each of these areas the Adviser was structured
in such a way to support the high level of services being provided to the Fund.
(B) OTHER BENEFITS TO THE ADVISER. The Independent Board Members also considered
the character and amount of other incidental benefits received by the Adviser
and its affiliates from its association with the Fund. The Independent Board
Members concluded that potential "fall-out" benefits that the Adviser and its
affiliates may receive, such as brokerage commissions paid to an affiliated
broker, greater name recognition, or increased ability to obtain research
services, appear to be reasonable, and may in some cases benefit the Fund.
CONCLUSIONS. In considering the Agreement, the Independent Board Members did not
identify any factor as all important or all controlling and instead considered
these factors collectively in light of the Fund's surrounding circumstances.
Based on this review, it was the judgment of the Independent Board Members that
shareholders had received satisfactory absolute and relative performance at
reasonable fees and, therefore, re-approval of the Agreement was in the best
interests of the Fund and its shareholders. As a part of its decision making
process, the Independent Board Members noted that the Adviser has managed the
Fund since its inception, and the Independent Board Members believe that a
long-term relationship with a capable, conscientious adviser is in the best
interests of the Fund. The Independent Board Members considered, generally, that
shareholders invested in the Fund knowing that the Adviser managed the Fund and
knowing its investment management fee schedule. As such, the Independent Board
Members considered, in particular, whether the Adviser managed the Fund in
accordance with its investment objectives and policies as disclosed to
shareholders. The Independent Board Members concluded that the Fund was managed
by the Adviser consistent with its investment objectives and policies.
20
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLANS
ENROLLMENT IN THE PLAN
It is the policy of The Gabelli Utility Trust (the "Fund") to automatically
reinvest dividends payable to common shareholders. As a "registered" shareholder
you automatically become a participant in the Fund's Automatic Dividend
Reinvestment Plan (the "Plan"). The Plan authorizes the Fund to credit common
shares to participants upon an income dividend or a capital gains distribution
regardless of whether the shares are trading at a discount or a premium to net
asset value. All distributions to shareholders whose shares are registered in
their own names will be automatically reinvested pursuant to the Plan in
additional shares of the Fund. Plan participants may send their share
certificates to Computershare Trust Company, N.A. ("Computershare") to be held
in their dividend reinvestment account. Registered shareholders wishing to
receive their distributions in cash must submit this request in writing to:
The Gabelli Utility Trust
c/o Computershare
P.O. Box 43010
Providence, RI 02940-3010
Shareholders requesting this cash election must include the shareholder's
name and address as they appear on the share certificate. Shareholders with
additional questions regarding the Plan or requesting a copy of the terms of the
Plan may contact Computershare at (800) 336-6983.
If your shares are held in the name of a broker, bank, or nominee, you
should contact such institution. If such institution is not participating in the
Plan, your account will be credited with a cash dividend. In order to
participate in the Plan through such institution, it may be necessary for you to
have your shares taken out of "street name" and re-registered in your own name.
Once registered in your own name your distributions will be automatically
reinvested. Certain brokers participate in the Plan. Shareholders holding shares
in "street name" at participating institutions will have dividends automatically
reinvested. Shareholders wishing a cash dividend at such institution must
contact their broker to make this change.
The number of common shares distributed to participants in the Plan in lieu
of cash dividends is determined in the following manner. Under the Plan,
whenever the market price of the Fund's common shares is equal to or exceeds net
asset value at the time shares are valued for purposes of determining the number
of shares equivalent to the cash dividends or capital gains distribution,
participants are issued common shares valued at the greater of (i) the net asset
value as most recently determined or (ii) 95% of the then current market price
of the Fund's common shares. The valuation date is the dividend or distribution
payment date or, if that date is not a New York Stock Exchange ("NYSE") trading
day, the next trading day. If the net asset value of the common shares at the
time of valuation exceeds the market price of the common shares, participants
will receive common shares from the Fund valued at market price. If the Fund
should declare a dividend or capital gains distribution payable only in cash,
Computershare will buy common shares in the open market, or on the NYSE or
elsewhere, for the participants' accounts, except that Computershare will
endeavor to terminate purchases in the open market and cause the Fund to issue
shares at net asset value if, following the commencement of such purchases, the
market value of the common shares exceeds the then current net asset value.
The automatic reinvestment of dividends and capital gains distributions
will not relieve participants of any income tax which may be payable on such
distributions. A participant in the Plan will be treated for federal income tax
purposes as having received, on a dividend payment date, a dividend or
distribution in an amount equal to the cash the participant could have received
instead of shares.
21
VOLUNTARY CASH PURCHASE PLAN
The Voluntary Cash Purchase Plan is yet another vehicle for our
shareholders to increase their investment in the Fund. In order to participate
in the Voluntary Cash Purchase Plan, shareholders must have their shares
registered in their own name.
Participants in the Voluntary Cash Purchase Plan have the option of making
additional cash payments to Computershare for investments in the Fund's common
shares at the then current market price. Shareholders may send an amount from
$250 to $10,000. Computershare will use these funds to purchase shares in the
open market on or about the 1st and 15th of each month. Computershare will
charge each shareholder who participates $0.75, plus a pro rata share of the
brokerage commissions. Brokerage charges for such purchases are expected to be
less than the usual brokerage charge for such transactions. It is suggested that
any voluntary cash payments be sent to Computershare, P.O. Box 43010,
Providence, RI 02940-3010 such that Computershare receives such payments
approximately 10 days before the 1st and 15th of the month. Funds not received
at least five days before the investment date shall be held for investment until
the next purchase date. A payment may be withdrawn without charge if notice is
received by Computershare at least 48 hours before such payment is to be
invested.
SHAREHOLDERS WISHING TO LIQUIDATE SHARES HELD AT COMPUTERSHARE must do so
in writing or by telephone. Please submit your request to the above mentioned
address or telephone number. Include in your request your name, address, and
account number. The cost to liquidate shares is $2.50 per transaction as well as
the brokerage commission incurred. Brokerage charges are expected to be less
than the usual brokerage charge for such transactions.
For more information regarding the Automatic Dividend Reinvestment Plan and
Voluntary Cash Purchase Plan, brochures are available by calling (914) 921-5070
or by writing directly to the Fund.
The Fund reserves the right to amend or terminate the Plan as applied to
any voluntary cash payments made and any dividend or distribution paid
subsequent to written notice of the change sent to the members of the Plan at
least 90 days before the record date for such dividend or distribution. The Plan
also may be amended or terminated by Computershare on at least 90 days written
notice to participants in the Plan.
22
TRUSTEES AND OFFICERS
THE GABELLI UTILITY TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES
Mario J. Gabelli, CFA
CHAIRMAN & CHIEF EXECUTIVE OFFICER,
GAMCO INVESTORS, INC.
Dr. Thomas E. Bratter
PRESIDENT & FOUNDER, JOHN DEWEY ACADEMY
Anthony J. Colavita
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C.
James P. Conn
FORMER MANAGING DIRECTOR &
CHIEF INVESTMENT OFFICER,
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Vincent D. Enright
FORMER SENIOR VICE PRESIDENT &
CHIEF FINANCIAL OFFICER,
KEYSPAN CORP.
Frank J. Fahrenkopf, Jr.
PRESIDENT & CHIEF EXECUTIVE OFFICER,
AMERICAN GAMING ASSOCIATION
John D. Gabelli
SENIOR VICE PRESIDENT,
GABELLI & COMPANY, INC.
Robert J. Morrissey
ATTORNEY-AT-LAW,
MORRISSEY, HAWKINS & LYNCH
Anthony R. Pustorino
CERTIFIED PUBLIC ACCOUNTANT,
PROFESSOR EMERITUS, PACE UNIVERSITY
Salvatore J. Zizza
CHAIRMAN, ZIZZA & CO., LTD.
OFFICERS
Bruce N. Alpert
PRESIDENT
Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
Agnes Mullady
TREASURER AND SECRETARY
David I. Schachter
VICE PRESIDENT & OMBUDSMAN
INVESTMENT ADVISER
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
CUSTODIAN
The Bank of New York Mellon
COUNSEL
Willkie Farr & Gallagher LLP
TRANSFER AGENT AND REGISTRAR
Computershare Trust Company, N.A.
STOCK EXCHANGE LISTING
5.625%
Common Preferred
---------- ---------
NYSE-Symbol: GUT GUT PrA
Shares Outstanding: 30,200,327 1,183,700
The Net Asset Value per share appears in the Publicly Traded Funds column, under
the heading "Specialized Equity Funds," in Monday's The Wall Street Journal. It
is also listed in Barron's Mutual Funds/Closed End Funds section under the
heading "Specialized Equity Funds."
The Net Asset Value per share may be obtained each day by calling (914) 921-5070
or visiting www.gabelli.com.
For general information about the Gabelli Funds, call 800-GABELLI
(800-422-3554), fax us at 914-921-5118, visit Gabelli Funds' Internet homepage
at: WWW.GABELLI.COM, or e-mail us at: closedend@gabelli.com
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may, from time to time, purchase
its common shares in the open market when the Fund's shares are trading at a
discount of 10% or more from the net asset value of the shares. The Fund may
also, from time to time, purchase its preferred shares in the open market when
the preferred shares are trading at a discount to the liquidation value.
THE GABELLI UTILITY TRUST
ONE CORPORATE CENTER
RYE, NY 10580-1422
(914) 921-5070
WWW.GABELLI.COM
SEMI ANNUAL REPORT
JUNE 30, 2008
GUT Q2/2008
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) Schedule of Investments in securities of unaffiliated issuers as of the
close of the reporting period is included as part of the report to
shareholders filed under Item 1 of this form.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
There has been no change, as of the date of this filing, in any of the portfolio
managers identified in response to paragraph (a)(1) of this Item in the
registrant's most recently filed annual report on Form N-CSR.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
================================================================================================================================
(C) TOTAL NUMBER OF (D) MAXIMUM NUMBER (OR
SHARES (OR UNITS) APPROXIMATE DOLLAR VALUE) OF
(A) TOTAL NUMBER OF PURCHASED AS PART OF SHARES (OR UNITS) THAT MAY YET
SHARES (OR UNITS) (B) AVERAGE PRICE PAID PUBLICLY ANNOUNCED PLANS BE PURCHASED UNDER THE PLANS
PERIOD PURCHASED PER SHARE (OR UNIT) OR PROGRAMS OR PROGRAMS
================================================================================================================================
================================================================================================================================
Month #1 Common - N/A Common - N/A Common - N/A Common - 30,051,448
01/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
01/31/08
================================================================================================================================
Month #2 Common - N/A Common - N/A Common - N/A Common - 30,081,312
02/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,184,200
02/28/08
================================================================================================================================
Month #3 Common - N/A Common - N/A Common - N/A Common - 30,111,729
03/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,183,700
03/31/08
================================================================================================================================
Month #4 Common - N/A Common - N/A Common - N/A Common - 30,140,991
04/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,183,700
04/30/08
================================================================================================================================
Month #5 Common - N/A Common - N/A Common - N/A Common - 30,170,705
05/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,183,700
05/31/08
================================================================================================================================
Month #6 Common - N/A Common - N/A Common - N/A Common - 30,200,331
06/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 1,183,700
06/30/08
================================================================================================================================
Total Common - N/A Common - N/A Common - N/A N/A
Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
================================================================================================================================
Footnote columns (c) and (d) of the table, by disclosing the following
information in the aggregate for all plans or programs publicly announced:
a. The date each plan or program was announced - The notice of the
potential repurchase of common and preferred shares occurs quarterly in
the Fund's quarterly report in accordance with Section 23(c) of the
Investment Company Act of 1940, as amended.
b. The dollar amount (or share or unit amount) approved - Any or all
common shares outstanding may be repurchased when the Fund's common
shares are trading at a discount of 10% or more from the net asset
value of the shares. Any or all preferred shares outstanding may be
repurchased when the Fund's preferred shares are trading at a discount
to the liquidation value of $25.00.
c. The expiration date (if any) of each plan or program - The Fund's
repurchase plans are ongoing.
d. Each plan or program that has expired during the period covered by the
table - The Fund's repurchase plans are ongoing.
e. Each plan or program the registrant has determined to terminate prior
to expiration, or under which the registrant does not intend to make
further purchases. - The Fund's repurchase plans are ongoing.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Gabelli Utility Trust
-------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 9/3/08
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 9/3/08
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady,
Principal Financial Officer and Treasurer
Date 9/3/08
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.