-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AqRy73bqUwceejd405Rj96W03JAGDIh8zdIJE92MtOztzii3yXBCC7tvHnCJp1UU yHOMIK7Zoo3geXy/C5hrcA== 0000935069-06-000801.txt : 20060310 0000935069-06-000801.hdr.sgml : 20060310 20060310165653 ACCESSION NUMBER: 0000935069-06-000801 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060310 DATE AS OF CHANGE: 20060310 EFFECTIVENESS DATE: 20060310 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GABELLI VALUE FUND INC CENTRAL INDEX KEY: 0000853438 IRS NUMBER: 061283268 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-05848 FILM NUMBER: 06679990 BUSINESS ADDRESS: STREET 1: ONE CORPORATE CENTER CITY: RYE STATE: NY ZIP: 10580 BUSINESS PHONE: 9149215070 MAIL ADDRESS: STREET 1: ONE CORPORATE CENTER CITY: RYE STATE: NY ZIP: 10580 0000853438 S000001076 THE GABELLI VALUE FUND INC. C000002902 CLASS AAA GABVX C000002903 CLASS B GVCBX C000002904 CLASS C GVCCX N-CSR 1 value_ncsr1205.txt THE GABELLI VALUE FUND INC. N-CSR 12/31/2005 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 811-05848 ----------- The Gabelli Value Fund Inc. --------------------------------------- (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: December 31, 2005 -------------------- 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 VALUE FUND INC. ANNUAL REPORT DECEMBER 31, 2005 TO OUR SHAREHOLDERS, The Sarbanes-Oxley Act requires a Fund's principal executive and financial officers to certify the entire contents of the semi-annual and annual shareholder reports in a filing with the Securities and Exchange Commission on Form N-CSR. This certification would cover the portfolio manager's commentary and subjective opinions if they are attached to or a part of the financial statements. Many of these comments and opinions would be difficult or impossible to certify. Because we do not want our portfolio managers to eliminate their opinions and/or restrict their commentary to historical facts, we have separated their commentary from the financial statements and investment portfolio and have sent it to you separately. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. Enclosed are the audited financial statements and the investment portfolio as of December 31, 2005 with a description of factors that affected the performance during the past year. PERFORMANCE DISCUSSION For 2005 Gabelli Value Fund was virtually unchanged declining -0.17% which compares to gains of 1.83% for the Dow Jones Industrial Average and 4.91% for the Standard & Poor 500 Index for the same period, respectively. In the past year, double digit returns were tough to achieve without a healthy dosage of dividend paying stocks such as energy and utility stocks. These were the only Standard and Poor's industry groups to show double digit gains, with energy issues (up about 30%) doing twice as well as utilities (up about 15%). The Standard and Poor's telecom and consumer discretionary industry groups were off a bit for the year. The Fund benefited from a number of holdings being takeover targets in 2005. Clearly, the Fund's energy and utility holdings contributed to returns with Allegheny Energy Inc., Kerr-McGee Corp. and ConocoPhillips rising by over 30% in the past twelve months. Communication equipment makers were also strong performers: Corning Inc., Motorola Inc., and Texas Instruments Inc. rose more than 30% each. Thomas & Betts Corp., a significant holding in the Fund, appreciated by approximately 35% in 2005. While many of our holdings had spectacular returns in 2005 they were not enough to offset the declines of our stocks in the media & entertainment, telecommunications, publishing, and broadcasting sectors, sectors that the Fund is overweight in and that did not get investor attention in 2005. Significant Fund holdings of over 1% that declined more than 10% in 2005 included Telephone & Data Systems Inc. (-52.9%), Liberty Media Corp. (-28.9%), Media General Inc. (-20.9%), News Corp. (-17.0%), Aztar Corp. (-12.8%), Viacom Inc. (-12.2%) and Time Warner Inc.(-10.2%). Sincerely yours, /s/ Bruce N. Alpert Bruce N. Alpert President February 17, 2006 [GRAPHIC OMITTED] PLOT POINTS FOLLOW: COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GABELLI VALUE FUND, THE CONSUMER PRICE INDEX + 10% AND THE S&P 500 INDEX Gabelli Value Fund (Class A shares) S&P 500 Index Consumer Price Index +10% 9/29/89 $ 9,450 $10,000 $10,000 12/31/89 9,648 10,205 11,460 12/31/90 9,109 9,888 13,305 12/31/91 10,505 12,893 15,048 12/31/92 11,838 13,875 16,989 12/31/93 16,508 15,270 19,147 12/31/94 16,508 15,470 21,578 12/31/95 20,214 21,277 24,276 12/31/96 21,980 26,160 27,504 12/31/97 32,581 34,884 30,723 12/31/98 40,150 44,860 34,286 12/31/99 52,966 54,295 38,641 12/31/00 48,808 49,354 43,819 12/31/01 51,453 43,491 48,902 12/31/02 43,247 33,884 54,965 12/31/03 57,029 43,598 61,506 12/31/04 64,318 48,337 69,686 12/31/05 64,208 50,710 79,024 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. COMPARATIVE RESULTS - -------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2005 (A) ----------------------------------------------------
Since Inception Quarter 1 Year 3 Year 5 Year 10 Year 15 Year (9/29/89) - -------------------------------------------------------------------------------------------------------------------- GABELLI VALUE FUND CLASS A ....... (2.07)% (0.17)% 14.08% 5.64% 12.25% 13.90% 12.50% (7.48)(B) (5.64)(B) 11.96(B) 4.45(B) 11.61(B) 13.47(B) 12.11(B) S&P 500 Index .................... 2.08 4.91 14.38 0.54 9.07 11.51 10.51 Dow Jones Industrial Average ..... 2.01 1.83 11.24 2.04 9.83 12.34 11.52 Nasdaq Composite Index ........... 2.49 1.37 18.20 (2.25) 7.68 12.56 9.94 Class B .......................... (2.28) (0.92) 13.25 4.83 11.76 13.57 12.20 (7.16)(c) (5.88)(c) 12.47(c) 4.50(c) 11.76(c) 13.57(c) 12.20(c) Class C .......................... (2.28) (0.92) 13.24 4.83 11.79 13.59 12.21 (3.25)(c) (1.91)(c) 13.24(c) 4.83(c) 11.79(c) 13.59(c) 12.21(c)
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICES AND REINVESTMENT OF DIVIDENDS AND ARE NET OF EXPENSES. INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. 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. INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. THE CLASS A SHARES' NET ASSET VALUES ARE USED TO CALCULATE PERFORMANCE FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS B SHARES AND CLASS C SHARES ON MARCH 15, 2000. THE ACTUAL PERFORMANCE FOR THE CLASS B SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE CLASSES OF SHARES. THE DOW JONES INDUSTRIAL AVERAGE IS AN UNMANAGED INDEX OF 30 LARGE CAPITALIZATION STOCKS. THE S&P 500 INDEX AND THE NASDAQ COMPOSITE INDEX ARE UNMANAGED INDICATORS OF STOCK MARKET PERFORMANCE. DIVIDENDS ARE REINVESTED EXCEPT FOR THE NASDAQ COMPOSITE INDEX. (b) INCLUDES THE EFFECT OF THE MAXIMUM 5.5% SALES CHARGE AT THE BEGINNING OF THE PERIOD. (c) INCLUDES THE EFFECT OF THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE AT THE END OF THE PERIOD SHOWN FOR CLASS B AND CLASS C SHARES, RESPECTIVELY. CLASS B SHARES ARE NOT AVAILABLE FOR NEW PURCHASES. - -------------------------------------------------------------------------------- 2 SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED) The following table presents portfolio holdings as a percent of total net assets as of December 31, 2005: THE GABELLI VALUE FUND Entertainment ................................. 17.8% Publishing .................................... 11.1% Cable and Satellite ........................... 9.1% Telecommunications ............................ 7.1% Hotels and Gaming ............................. 6.0% Diversified Industrial ........................ 5.8% Food and Beverage ............................. 5.7% Metals and Mining ............................. 3.7% Electronics ................................... 3.5% Financial Services ............................ 3.3% Communications Equipment ...................... 3.1% Equipment and Supplies ........................ 2.8% Broadcasting .................................. 2.5% Environmental Services ........................ 2.5% Automotive: Parts and Accessories ............. 2.4% Consumer Products ............................. 2.4% Energy and Utilities .......................... 2.1% Retail ........................................ 1.7% Aviation: Parts and Services .................. 1.7% Agriculture ................................... 1.6% Specialty Chemicals ........................... 1.2% Manufactured Housing .......................... 0.7% Consumer Services ............................. 0.6% Business Services ............................. 0.5% Machinery ..................................... 0.5% Real Estate ................................... 0.3% Health Care ................................... 0.3% Aerospace ..................................... 0.3% Computer Software and Services ................ 0.2% Wireless Communications ....................... 0.2% Transportation ................................ 0.0% Other Assets and Liabilities - (Net) .......... (0.7)% ------ 100.0% ====== THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH 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 SEPTEMBER 30, 2005. 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 COMMISSION'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 are available without charge, upon request, (i) by calling 800-GABELLI (800-422-3554); (ii) by writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; and (iii) by visiting the Securities and Exchange Commission's website at www.sec.gov. 3 THE GABELLI VALUE FUND INC. DISCLOSURE OF FUND EXPENSES (UNAUDITED) For the Six Month Period from July 1, 2005 through December 31, 2005 EXPENSE TABLE ================================================================================ We believe it is important for you to understand the impact of fees and expenses regarding your investment. All mutual funds have operating expenses. As a shareholder of a fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund's gross income, directly reduce the investment return of a fund. When a fund's expenses are expressed as a percentage of its average net assets, this figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. The Expense Table below illustrates your Fund's costs in two ways: ACTUAL FUND RETURN: This section provides information about actual account values and actual expenses. You may use this section to help you to estimate the actual expenses that you paid over the period after any fee waivers and expense reimbursements. The "Ending Account Value" shown is derived from the Fund's ACTUAL return during the past six months, and the "Expenses Paid During Period" shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your Fund under the heading "Expenses Paid During Period" to estimate the expenses you paid during this period. HYPOTHETICAL 5% RETURN: This section provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio. It assumes a hypothetical annualized return of 5% before expenses during the period shown. In this case - because the hypothetical return used is NOT the Fund's actual return - the results do not apply to your investment and you cannot use the hypothetical account value and expense to estimate the actual ending account balance or expenses you paid for the period. This example is useful in making comparisons of the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads), redemption fees, or exchange fees, if any, which are described in the Prospectus. If these costs were applied to your account, your costs would be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The "Annualized Expense Ratio" represents the actual expenses for the last six months and may be different from the expense ratio in the Financial Highlights which is for the year ended December 31, 2005. Beginning Ending Annualized Expenses Account Value Account Value Expense Paid During 07/01/05 12/31/05 Ratio Period* - -------------------------------------------------------------------------------- THE GABELLI VALUE FUND - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Class A $1,000.00 $ 999.90 1.39% $ 7.01 Class B $1,000.00 $ 996.60 2.14% $10.77 Class C $1,000.00 $ 996.60 2.14% $10.77 HYPOTHETICAL 5% RETURN Class A $1,000.00 $1,018.20 1.39% $ 7.07 Class B $1,000.00 $1,014.42 2.14% $10.87 Class C $1,000.00 $1,014.42 2.14% $10.87 * Expenses are equal to the Fund's annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. 4 THE GABELLI VALUE FUND INC. SCHEDULE OF INVESTMENTS -- DECEMBER 31, 2005 ================================================================================ MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS -- 100.7% AEROSPACE -- 0.3% 1,000 Lockheed Martin Corp. ..........$ 25,800 $ 63,630 400,000 Rolls-Royce Group plc+ ......... 2,515,352 2,942,036 13,360,000 Rolls-Royce Group plc, Cl. B ... 13,561 23,561 ------------ ------------- 2,554,713 3,029,227 ------------ ------------- AGRICULTURE -- 1.6% 685,000 Archer-Daniels-Midland Co. ..... 7,402,648 16,892,100 30,000 Mosaic Co.+ .................... 373,124 438,900 ------------ ------------- 7,775,772 17,331,000 ------------ ------------- AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.4% 38,000 China Yuchai International Ltd. 300,576 297,540 860,000 Dana Corp. ..................... 14,038,487 6,174,800 250,000 Genuine Parts Co. .............. 6,600,695 10,980,000 300,000 Navistar International Corp.+ .. 8,055,166 8,586,000 29,460 Proliance International Inc.+ .. 139,101 155,843 ------------ ------------- 29,134,025 26,194,183 ------------ ------------- AVIATION: PARTS AND SERVICES -- 1.7% 19,000 Curtiss-Wright Corp. ........... 487,166 1,037,400 328,400 Fairchild Corp., Cl. A+ ........ 2,485,541 837,420 450,000 GenCorp Inc.+ .................. 4,371,907 7,987,500 89,000 Sequa Corp., Cl. A+ ............ 3,752,093 6,145,450 33,000 Sequa Corp., Cl. B+ ............ 1,673,268 2,293,500 ------------ ------------- 12,769,975 18,301,270 ------------ ------------- BROADCASTING -- 2.5% 186,250 Gray Television Inc. ........... 2,591,066 1,828,975 540,000 Liberty Corp. .................. 25,137,000 25,277,400 74,500 Young Broadcasting Inc., Cl. A+ 893,671 193,700 ------------ ------------- 28,621,737 27,300,075 ------------ ------------- BUSINESS SERVICES -- 0.5% 250,000 Cendant Corp. .................. 2,235,089 4,312,500 15,000 ChoicePoint Inc.+ .............. 540,551 667,650 30,000 Nashua Corp.+ .................. 258,767 210,600 15,000 UNOVA Inc.+ .................... 351,409 507,000 ------------ ------------- 3,385,816 5,697,750 ------------ ------------- CABLE AND SATELLITE -- 9.1% 130,000 Adelphia Communications Corp., Cl. A+ ....................... 91,925 5,200 2,545,430 Cablevision Systems Corp., Cl. A+ ....................... 27,773,617 59,741,242 348,611 DIRECTV Group Inc.+ ............ 6,308,775 4,922,388 130,000 EchoStar Communications Corp., Cl. A+ ....................... 3,973,740 3,532,100 270,000 Liberty Global Inc., Cl. A+ .... 4,355,175 6,075,000 270,000 Liberty Global Inc., Cl. C+ .... 4,184,384 5,724,000 MARKET SHARES COST VALUE ------ ---- ------ 476,300 Rogers Communications Inc., Cl. B ........................$ 4,738,783 $ 20,128,438 ------------ -------------- 51,426,399 100,128,368 ------------ -------------- COMMUNICATIONS EQUIPMENT -- 3.1% 108,000 Agere Systems Inc.+ ............ 1,820,857 1,393,200 650,000 Corning Inc.+ .................. 5,608,594 12,779,000 900,000 Lucent Technologies Inc.+ ...... 4,012,416 2,394,000 480,000 Motorola Inc. .................. 5,177,961 10,843,200 910,000 Nortel Networks Corp.+ ......... 4,417,326 2,784,600 80,000 Scientific-Atlanta Inc. ........ 2,059,362 3,445,600 ------------ -------------- 23,096,516 33,639,600 ------------ -------------- COMPUTER SOFTWARE AND SERVICES -- 0.2% 60,000 Yahoo! Inc.+ ................... 2,113,362 2,350,800 ------------ -------------- CONSUMER PRODUCTS -- 2.4% 85,000 Energizer Holdings Inc.+ ....... 1,992,017 4,232,150 93,000 Gallaher Group plc, ADR ........ 2,374,002 5,594,880 500 Givaudan SA .................... 135,440 338,838 135,000 Hartmarx Corp.+ ................ 647,646 1,054,350 20,000 National Presto Industries Inc. 609,961 887,000 190,000 Pactiv Corp.+ .................. 1,841,986 4,180,000 800,000 Swedish Match AB ............... 8,319,382 9,415,319 10,000 Wolverine World Wide Inc. ...... 97,342 224,600 ------------ -------------- 16,017,776 25,927,137 ------------ -------------- CONSUMER SERVICES -- 0.6% 100,000 IAC/InterActiveCorp+ ........... 1,754,940 2,831,000 218,100 Rollins Inc. ................... 1,601,272 4,298,751 ------------ -------------- 3,356,212 7,129,751 ------------ -------------- DIVERSIFIED INDUSTRIAL -- 5.8% 50,000 Ampco-Pittsburgh Corp. ......... 250,018 725,500 330,000 Cooper Industries Ltd., Cl. A 17,872,379 24,090,000 290,000 Crane Co. ...................... 7,676,957 10,228,300 30,000 Griffon Corp.+ ................. 668,566 714,300 50,000 Harbor Global Co. Ltd.+ ........ 133,471 450,000 440,000 Honeywell International Inc. ... 13,970,669 16,390,000 80,000 ITT Industries Inc. ............ 5,661,875 8,225,600 233,400 Katy Industries Inc.+ .......... 1,923,525 723,540 75,000 Lamson & Sessions Co.+ ......... 560,465 1,876,500 ------------ -------------- 48,717,925 63,423,740 ------------ -------------- ELECTRONICS -- 3.5% 230,000 Texas Instruments Inc. ......... 5,889,627 7,376,100 65,000 Thermo Electron Corp.+ ......... 1,249,065 1,958,450 640,000 Thomas & Betts Corp.+ .......... 12,736,898 26,854,400 90,000 Tyco International Ltd. ........ 2,546,117 2,597,400 ------------ -------------- 22,421,707 38,786,350 ------------ -------------- See accompanying notes to financial statements. 5 THE GABELLI VALUE FUND INC. SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2005 ================================================================================ MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) ENERGY AND UTILITIES -- 2.1% 8,000 Allegheny Energy Inc.+ .........$ 98,789 $ 253,200 29,604 Chevron Corp. .................. 1,823,608 1,680,619 195,000 ConocoPhillips ................. 5,417,216 11,345,100 40,000 Kerr-McGee Corp. ............... 1,969,210 3,634,400 200,000 Mirant Corp.+ .................. 61,000 264,000 210,000 Northeast Utilities ............ 3,967,387 4,134,900 75,000 Southwest Gas Corp. ............ 1,491,943 1,980,000 ------------ -------------- 14,829,153 23,292,219 ------------ -------------- ENTERTAINMENT -- 17.8% 8,571 Chestnut Hill Ventures+ (a) .... 233,260 184,046 414,000 Discovery Holding Co., Cl. A+ .. 4,558,514 6,272,100 60,000 Dover Motorsports Inc. ......... 309,314 366,600 1,440,000 Gemstar-TV Guide International Inc.+ .......... 7,528,130 3,758,400 132,000 Grupo Televisa SA, ADR ......... 4,549,647 10,626,000 4,100,000 Liberty Media Corp., Cl. A+ .... 27,997,367 32,267,000 400,000 The Walt Disney Co. ............ 9,427,101 9,588,000 1,290,000 Time Warner Inc. ............... 18,657,271 22,497,600 2,585,000 Viacom Inc., Cl. A ............. 58,594,232 84,684,600 776,000 Vivendi Universal SA, ADR ...... 13,458,335 24,389,680 ------------ -------------- 145,313,171 194,634,026 ------------ -------------- ENVIRONMENTAL SERVICES -- 2.5% 260,000 Republic Services Inc. ......... 4,733,105 9,763,000 575,000 Waste Management Inc. .......... 13,314,341 17,451,250 ------------ -------------- 18,047,446 27,214,250 ------------ -------------- EQUIPMENT AND SUPPLIES -- 2.8% 210,000 CIRCOR International Inc. ...... 2,325,092 5,388,600 310,000 Flowserve Corp.+ ............... 4,940,899 12,263,600 125,000 Gerber Scientific Inc.+ ........ 873,551 1,196,250 161,000 GrafTech International Ltd.+ ... 1,981,050 1,001,420 360,000 Watts Water Technologies Inc., Cl. A .................. 4,629,146 10,904,400 ------------ -------------- 14,749,738 30,754,270 ------------ -------------- FINANCIAL SERVICES -- 3.3% 535,000 American Express Co. ........... 17,411,572 27,531,100 105,000 Ameriprise Financial Inc. ...... 2,465,618 4,305,000 28,000 Deutsche Bank AG ............... 1,639,082 2,712,360 115,000 Phoenix Companies Inc. ......... 1,283,908 1,568,600 ------------ -------------- 22,800,180 36,117,060 ------------ -------------- FOOD AND BEVERAGE -- 5.7% 20,000 Corn Products International Inc. 246,550 477,800 80,000 Del Monte Foods Co.+ ........... 606,728 834,400 217,000 Diageo plc, ADR ................ 8,314,676 12,651,100 474,500 Flowers Foods Inc. ............. 3,095,299 13,077,220 MARKET SHARES COST VALUE ------ ---- ------ 94,000 Fomento Economico Mexicano SA de CV, ADR .................$ 3,442,848 $ 6,815,940 50,000 General Mills Inc. ............. 2,490,310 2,466,000 240,000 Heinz (H.J.) Co. ............... 8,470,388 8,092,800 3,000 Hershey Co. .................... 145,382 165,750 115,000 Kerry Group plc, Cl. A ......... 1,306,152 2,535,369 616,000 PepsiAmericas Inc. ............. 8,384,341 14,328,160 15,000 Wrigley (Wm.) Jr. Co. .......... 920,295 997,350 ------------ -------------- 37,422,969 62,441,889 ------------ -------------- HEALTH CARE -- 0.3% 80,000 Sybron Dental Specialties Inc.+ ........................ 1,479,621 3,184,800 ------------ -------------- HOTELS AND GAMING -- 6.0% 475,000 Aztar Corp.+ ................... 4,056,053 14,435,250 66,494 Dover Downs Gaming & Entertainment Inc. ........... 708,218 940,890 221,000 Gaylord Entertainment Co.+ ..... 6,298,073 9,633,390 4,000,000 Hilton Group plc ............... 14,922,862 25,015,910 410,000 Hilton Hotels Corp. ............ 3,035,645 9,885,100 33,000 Kerzner International Ltd.+ .... 1,802,733 2,268,750 20,000 Las Vegas Sands Corp.+ ......... 711,122 789,400 65,000 MGM Mirage+ .................... 1,478,602 2,383,550 ------------ -------------- 33,013,308 65,352,240 ------------ -------------- MACHINERY -- 0.5% 154,000 CNH Global NV .................. 2,956,501 2,855,160 40,000 Deere & Co. .................... 1,630,374 2,724,400 ------------ -------------- 4,586,875 5,579,560 ------------ -------------- MANUFACTURED HOUSING -- 0.7% 570,000 Champion Enterprises Inc.+ ..... 5,746,131 7,763,400 ------------ -------------- METALS AND MINING -- 3.7% 320,000 Barrick Gold Corp. ............. 2,998,415 8,918,400 123,133 Kinross Gold Corp.+ ............ 1,119,195 1,135,286 470,000 Newmont Mining Corp. ........... 9,046,385 25,098,000 215,000 Placer Dome Inc. ............... 2,020,400 4,929,950 ------------ -------------- 15,184,395 40,081,636 ------------ -------------- PUBLISHING -- 11.1% 190,000 Belo Corp., Cl. A .............. 3,284,122 4,067,900 1,265,000 Media General Inc., Cl. A ...... 24,869,900 64,135,500 89,000 Meredith Corp. ................. 1,780,257 4,658,260 1,140,000 News Corp., Cl. A .............. 16,897,247 17,727,000 465,000 PRIMEDIA Inc.+ ................. 1,409,365 748,650 354,000 Reader's Digest Association Inc. ......................... 5,807,509 5,387,880 311,000 Scripps (E.W.) Co., Cl. A ...... 10,560,834 14,934,220 338,000 Tribune Co. .................... 14,055,994 10,227,880 ------------ -------------- 78,665,228 121,887,290 ------------ -------------- See accompanying notes to financial statements. 6 THE GABELLI VALUE FUND INC. SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2005 ================================================================================ MARKET SHARES COST VALUE ------ ---- ------ COMMON STOCKS (CONTINUED) REAL ESTATE -- 0.3% 135,000 Griffin Land & Nurseries Inc.+ ........................$ 1,588,939 $ 3,524,175 ------------ -------------- RETAIL -- 1.7% 120,000 Albertson's Inc. ............... 2,859,642 2,562,000 320,000 AutoNation Inc.+ ............... 2,603,815 6,953,600 18,000 Burlington Coat Factory Warehouse Corp. .............. 269,755 723,780 120,000 Ingles Markets Inc., Cl. A ..... 1,435,410 1,878,000 280,000 Safeway Inc. ................... 5,993,100 6,624,800 ----------- ----------- 13,161,722 18,742,180 ----------- ----------- SPECIALTY CHEMICALS -- 1.2% 220,800 Ferro Corp. .................... 4,629,134 4,142,208 683,100 Hercules Inc.+ ................. 10,286,944 7,719,030 50,000 Sensient Technologies Corp. .... 1,024,399 895,000 ------------ -------------- 15,940,477 12,756,238 ------------ -------------- TELECOMMUNICATIONS -- 7.1% 920,000 Cincinnati Bell Inc.+ .......... 4,858,994 3,229,200 25,000 Commonwealth Telephone Enterprises Inc. ............. 989,702 844,250 1,680,000 Qwest Communications International Inc.+ .......... 4,404,046 9,492,000 1,510,000 Sprint Nextel Corp. ............ 22,668,733 35,273,600 432,000 Telephone & Data Systems Inc. .. 9,428,220 15,564,960 388,000 Telephone & Data Systems Inc., Special ...................... 7,780,949 13,428,680 ------------ -------------- 50,130,644 77,832,690 ------------ -------------- MARKET SHARES COST VALUE ------ ---- ------ TRANSPORTATION -- 0.0% 100,000 Grupo TMM SA, Cl. A, ADR+ ......$ 791,180 $ 385,000 ------------ -------------- WIRELESS COMMUNICATIONS -- 0.2% 40,000 United States Cellular Corp.+ .. 1,880,524 1,976,000 ------------ -------------- TOTAL COMMON STOCKS ............ 726,723,636 1,102,758,174 ------------ -------------- TOTAL INVESTMENTS -- 100.7% ....$726,723,636 1,102,758,174 ============ OTHER ASSETS AND LIABILITIES (NET) -- (0.7)% .... (7,813,964) -------------- NET ASSETS -- 100.0% ............................ $1,094,944,210 ============== - ---------------- (a) Security fair valued under procedures established by the Board of Directors. The procedures may include reviewing available financial information about the company and reviewing valuation of comparable securities and other factors on a regular basis. At December 31, 2005, the market value of fair valued securities amounted to $184,046 or 0.02% of total net assets. + Non-income producing security. ADR American Depository Receipt See accompanying notes to financial statements. 7 THE GABELLI VALUE FUND INC. STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2005 ================================================================================ ASSETS: Investments, at value (cost $726,723,636) ......$1,102,758,174 Receivable for investments sold ................ 6,992,907 Dividends and interest receivable .............. 921,175 Receivable for Fund shares sold ................ 452,187 Other assets ................................... 37,215 -------------- TOTAL ASSETS ................................... 1,111,161,658 -------------- LIABILITIES: Payable to custodian ........................... 11,404,144 Payable for Fund shares redeemed ............... 3,093,685 Payable for investment advisory fees ........... 949,487 Payable for shareholder service fees ........... 301,677 Payable for distribution fees .................. 258,141 Payable for shareholder communications expenses ...................... 136,945 Other accrued expenses ......................... 73,369 -------------- TOTAL LIABILITIES .............................. 16,217,448 -------------- NET ASSETS applicable to 60,542,798 shares outstanding ...........................$1,094,944,210 ============== NET ASSETS CONSIST OF: Capital stock, each class at $0.001 par value ..$ 60,543 Additional paid-in capital ..................... 724,391,170 Accumulated distributions in excess of net investment income ............................ (889) Accumulated distributions in excess of net realized gain on investments and foreign currency transactions ........................ (5,541,052) Net unrealized appreciation on investments ..... 376,034,538 Net unrealized depreciation on foreign currency translations ........................ (100) -------------- NET ASSETS .....................................$1,094,944,210 ============== SHARES OF CAPITAL STOCK: CLASS A: Net Asset Value and redemption price per share ($1,063,136,861 / 58,702,233 shares outstanding; 100,000,000 shares authorized) ............... $18.11 ====== Maximum offering price per share (NAV / 0.945, based on maximum sales charge of 5.50% of the offering price) ....... $19.16 ====== CLASS B: Net Asset Value and offering price per share ($17,803,758 / 1,030,509 shares outstanding; 100,000,000 shares authorized) ............... $17.28(a) ====== CLASS C: Net Asset Value and offering price per share ($14,003,591 / 810,056 shares outstanding; 50,000,000 shares authorized) ................ $17.29(a) ====== - -------------------- (a) Redemption price varies based on length of time held. STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2005 ================================================================================ INVESTMENT INCOME: Dividends (net of foreign taxes of $203,108) ......$17,559,233 Interest .......................................... 129,266 ----------- TOTAL INVESTMENT INCOME ........................... 17,688,499 ----------- EXPENSES: Investment advisory fees .......................... 11,955,962 Distribution fees - Class A ....................... 2,902,740 Distribution fees - Class B ....................... 190,644 Distribution fees - Class C ....................... 154,359 Shareholder services fees ......................... 949,267 Shareholder communications expenses ............... 269,215 Custodian fees .................................... 159,943 Directors' fees ................................... 69,146 Legal and audit fees .............................. 66,729 Registration fees ................................. 37,545 Miscellaneous expenses ............................ 188,332 ----------- TOTAL EXPENSES .................................... 16,943,882 ----------- NET INVESTMENT INCOME ............................. 744,617 ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: Net realized gain on investments .................. 77,836,480 Net realized loss on foreign currency transactions (70,311) Net change in unrealized appreciation / depreciation on investments and foreign currency translations ....................(82,512,239) ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY ................. (4,746,070) ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................................$(4,001,453) =========== See accompanying notes to financial statements. 8 THE GABELLI VALUE FUND INC. STATEMENT OF CHANGES IN NET ASSETS ================================================================================
YEAR ENDED YEAR ENDED DECEMBER 31, 2005 DECEMBER 31, 2004 ----------------- ----------------- OPERATIONS: Net investment income (loss) $ 744,617 $ (1,651,707) Net realized gain on investments, foreign currency, and short sale transactions .. 77,766,169 51,980,502 Net change in unrealized appreciation/depreciation on investments, short sales, and foreign currency translations ................................. (82,512,239) 99,431,427 -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................. (4,001,453) 149,760,222 -------------- -------------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A ........................................................................ (666,736) -- -------------- -------------- (666,736) -- -------------- -------------- Net realized gains on investments Class A ........................................................................ (73,800,544) (48,418,476) Class B ........................................................................ (1,289,884) (811,174) Class C ........................................................................ (1,025,214) (652,108) -------------- -------------- (76,115,642) (49,881,758) -------------- -------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS .............................................. (76,782,378) (49,881,758) -------------- -------------- CAPITAL SHARE TRANSACTIONS Class A ........................................................................ (120,095,977) (91,936,401) Class B ........................................................................ (1,087,763) 1,041,509 Class C ........................................................................ (1,199,523) 368,973 -------------- -------------- NET DECREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ....................... (122,383,263) (90,525,919) -------------- -------------- REDEMPTION FEES .................................................................. 52,322 5,857 -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS ............................................ (203,114,772) 9,358,402 NET ASSETS: Beginning of period .............................................................. 1,298,058,982 1,288,700,580 -------------- -------------- End of period (including undistributed net investment income of $0 and $0, respectively) ..................................................................$1,094,944,210 $1,298,058,982 ============== ==============
NOTES TO FINANCIAL STATEMENTS ================================================================================ 1. ORGANIZATION. The Gabelli Value Fund Inc. (the "Fund") was organized on July 20, 1989 as a Maryland corporation. The Fund is a non-diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund's primary objective is long term capital appreciation. The Fund commenced investment operations on September 29, 1989. 2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in accordance with 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 Directors (the "Board") so determines, by such other method as the Board 9 THE GABELLI VALUE FUND INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ 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 foreign markets are generally valued at the preceding closing values of such securities on their respective exchanges or if after the close of the foreign markets, but prior to the close of business on the day the securities are being valued, market conditions change significantly, certain foreign securities may be fair valued pursuant to procedures established by the Board. 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 valued at their fair value 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 valued at their fair value as determined in good faith under procedures established by and under the general supervision of 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. 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 December 31, 2005, there were no open repurchase agreements. 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 fluctuation of the value of the contract. The daily changes in the contract are included in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed. 10 THE GABELLI VALUE FUND INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ There are several risks in connection with the use of futures contracts as a hedging device. 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 December 31, 2005, there were no open futures contracts. SECURITIES SOLD SHORT. The Fund may make short sales. A short sale involves selling a security which the Fund does not own. The proceeds received for short sales are recorded as liabilities and the Fund records an unrealized gain or loss to the extent of the difference between the proceeds received and the value of the open short position on the day of determination. The Fund records a realized gain or loss when the short position is closed out. By entering into a short sale, the Fund bears the market risk of an unfavorable change in the price of the security sold short. Dividends on short sales are recorded as an expense by the Fund on the ex-dividend date and interest expense is recorded on the accrual basis. The Fund did not hold any short positions as of December 31, 2005. FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are maintained in United States (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. 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. DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Certain administrative expenses are common to, and allocated among, various affiliated funds. Such allocations are made on the basis of each Fund's average net assets or other criteria directly affecting the expenses as determined by the Adviser pursuant to procedures established by the Board. 11 THE GABELLI VALUE FUND INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ In calculating net asset value ("NAV") per share of each class, investment income, realized and unrealized gains and losses, redemption fees, and expenses other than class specific expenses, are allocated daily to each class of shares based upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are borne solely by the class incurring the expense. CUSTODIAN FEE CREDITS. 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 shown as "custodian fee credits". DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to 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 equity accounts in the fiscal year when the differences arise. These reclassifications have no impact on the NAV of the Fund and the calculation of net investment income per share in the Financial Highlights excludes these adjustments. For the year ended December 31, 2005, reclassifications were made to increase accumulated distributions in excess of net investment income by $78,770 and decrease accumulated distributions in excess of net realized gain on investments by $78,770. The tax character of distributions paid during the years ended December 31, 2005 and December 31, 2004 was as follows:
YEAR ENDED YEAR ENDED DECEMBER 31, 2005 DECEMBER 31, 2004 ----------------- ----------------- DISTRIBUTIONS PAID FROM: Ordinary income (inclusive of short-term capital gains) ........................... $ 1,290,094 $ 1,627,581 Net long-term capital gains ................ 75,492,284 48,254,177 ----------- ----------- Total distributions paid ................... $76,782,378 $49,881,758 =========== ===========
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. As of December 31, 2005, the components of accumulated earnings/(losses) on a tax basis were as follows: Undistributed ordinary income ........................... $ 820 Undistributed long-term capital gains ................... 1,032,106 Net unrealized appreciation on investments and foreign currency ...................................... 369,459,571 ------------ Total accumulated gain .................................. $370,492,497 ============ 12 THE GABELLI VALUE FUND INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ The following summarizes the tax cost of investments and related unrealized appreciation/depreciation at December 31, 2005:
GROSS GROSS NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION/ COST APPRECIATION DEPRECIATION (DEPRECIATION) ---- ------------ ------------ -------------- Investments ............. $733,298,504 $409,869,716 $(40,410,046) $369,459,670
3. INVESTMENT ADVISORY AGREEMENT. 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 daily and paid monthly, at the annual rate of 1.00% of the value of its average daily net assets. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund's portfolio, oversees the administration of all aspects of the Fund's business and affairs, and pays the compensation of all Officers and Directors of the Fund who are affiliated persons of the Adviser. 4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the "Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act. Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of the Adviser, serves as distributor of the Fund. Under the Class A, Class B, and Class C Share Plans, payments are authorized to Gabelli & Company at annual rates of 0.25%, 1.00%, and 1.00%, respectively, of the average daily net assets of those classes, the annual limitations under each Plan. Such payments are accrued daily and paid monthly. 5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for the year ended December 31, 2005, other than short-term securities, aggregated $31,541,065 and $229,338,029, respectively. 6. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 2005, the Fund paid brokerage commissions of $342,350 to Gabelli & Company. Additionally, Gabelli & Company informed the Fund that it received $143,075 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares. 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 year ended December 31, 2005, the Fund reimbursed the Adviser $45,000 in connection with the cost of computing the Fund's NAV, which is included in miscellaneous expenses in the Statement of Operations. 7. CAPITAL STOCK TRANSACTIONS. The Fund currently offers three classes of shares - -- Class A Shares, Class B Shares, and Class C Shares. Class A Shares are subject to a maximum front-end sales charge of 5.50%. Class B Shares are subject to a contingent deferred sales charge ("CDSC") upon redemption within six years of purchase and automatically convert to Class A Shares approximately eight years after the original purchase. The applicable CDSC is equal to a declining percentage of the lesser of the NAV per share at the date of the original purchase or at the date of redemption, based on the length of time held. Class C Shares are subject to a 1% CDSC for one year after purchase. Class B Shares are available only through exchange of Class B Shares of other funds distributed by Gabelli & Company. The Board has approved Class I Shares which have not been offered publicly. Effective June 15, 2005, the Fund imposed a redemption fee of 2.00% on Class A Shares, Class B Shares, and Class C Shares that are redeemed or exchanged on or before the seventh day after the date of a purchase. (From November 1, 2004 through June 14, 2005, the Fund imposed a redemption fee on shares that were redeemed or exchanged within the sixtieth day after the date of a purchase.) The redemption fee is deducted 13 THE GABELLI VALUE FUND INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ from the proceeds otherwise payable to the redeeming shareholders and is retained by the Fund. The redemption fees retained by the Fund during the years ended December 31, 2005 and December 31, 2004 amounted to $52,322 and $5,857, respectively. The redemption fee does not apply to shares purchased through programs that the Adviser determined to have appropriate short-term trading policies in place. Additionally, certain recordkeepers for qualified and non-qualified retirement plans that could not collect the redemption fee at the participant level due to systems limitations have received an extension to implement such systems. Transactions in shares of capital stock were as follows:
YEAR ENDED YEAR ENDED DECEMBER 31, 2005 DECEMBER 31, 2004 ------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------ ----------- ------------- CLASS A CLASS A ------------------------- ---------------------------- Shares sold ......................................... 3,107,146 $ 59,989,477 6,030,365 $ 110,732,311 Shares issued upon reinvestment of dividends ........ 3,721,831 67,513,966 2,261,031 43,954,437 Shares redeemed ..................................... (12,826,666) (247,599,420) (13,467,997) (246,623,149) ---------- ------------- ----------- ------------- Net decrease .................................... (5,997,689) $(120,095,977) (5,176,601) $ (91,936,401) ========== ============= =========== ============= CLASS B CLASS B ------------------------- ---------------------------- Shares sold ......................................... 20,985 $ 381,787 271,816 $ 4,877,768 Shares issued upon reinvestment of dividends ........ 60,316 1,043,462 35,424 663,482 Shares redeemed ..................................... (134,928) (2,513,012) (256,767) (4,499,741) ---------- ------------- ----------- ------------- Net increase/(decrease) ......................... (53,627) $ (1,087,763) 50,473 $ 1,041,509 ========== ============= =========== ============= CLASS C CLASS C ------------------------- ---------------------------- Shares sold ......................................... 119,549 $ 2,220,629 350,382 $ 6,259,650 Shares issued upon reinvestment of dividends ........ 41,465 717,762 25,225 472,969 Shares redeemed ..................................... (223,193) (4,137,914) (359,665) (6,363,646) ---------- ------------- ----------- ------------- Net increase/(decrease) ......................... (62,179) $ (1,199,523) 15,942 $ 368,973 ========== ============= =========== =============
8. 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. 9. OTHER MATTERS. The Adviser and/or affiliates have received subpoenas from the Attorney General of the State of New York and the Securities and Exchange Commission (the "SEC") requesting information on mutual fund trading practices involving certain funds managed by the Adviser. GAMCO Investors, Inc., the Adviser's parent company, is responding to these requests for documents and testimony. On a separate matter, in September 2005, the Adviser was informed by the staff of the SEC that the staff may recommend to the Commission that an administrative remedy and a monetary penalty be sought from the Adviser in connection with the actions of two of seven closed-end funds managed by the Adviser relating to Section 19(a) and Rule 19a-1 of the 1940 Act. These provisions require registered investment companies to provide written statements to shareholders when a dividend is made from a source other than net investment income. While the two closed-end funds sent annual statements and provided other materials containing this information, the funds did not send written statements to shareholders with each distribution in 2002 and 2003. The Adviser believes that all of the funds are now in compliance. The Adviser believes that these matters would have no effect on the Fund or any material adverse effect on the Adviser or its ability to manage the Fund. 14 THE GABELLI VALUE FUND INC. FINANCIAL HIGHLIGHTS ================================================================================ Selected data for a share of capital stock outstanding throughout each period:
INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS -------------------------------------------------------- --------------------------------------- Net Net Asset Realized and Total Net Period Value, Net Unrealized from Net Realized Ended Beginning Investment Gain/(Loss) on Investment Investment Gain on Total December 31 of Period Income/(Loss)(a) Investments Operations Income Investments Distributions - ----------- --------- ---------------- ------------ ---------- ---------- ----------- ------------- CLASS A 2005 $19.49 $ 0.02 $(0.05) $(0.03) $(0.01) $(1.34) $(1.35) 2004 17.97 (0.02) 2.31 2.29 -- (0.77) (0.77) 2003 13.81 (0.05) 4.45 4.40 -- (0.24) (0.24) 2002 16.43 (0.04) (2.58) (2.62) -- -- -- 2001 16.13 (0.05) 0.93 0.88 -- (0.58) (0.58) CLASS B 2005 $18.79 $(0.12) $(0.05) $(0.17) -- $(1.34) $(1.34) 2004 17.47 (0.15) 2.24 2.09 -- (0.77) (0.77) 2003 13.53 (0.17) 4.35 4.18 -- (0.24) (0.24) 2002 16.23 (0.14) (2.56) (2.70) -- -- -- 2001 16.07 (0.18) 0.92 0.74 -- (0.58) (0.58) CLASS C 2005 $18.80 $(0.12) $(0.05) $(0.17) -- $(1.34) $(1.34) 2004 17.49 (0.15) 2.23 2.08 -- (0.77) (0.77) 2003 13.54 (0.17) 4.36 4.19 -- (0.24) (0.24) 2002 16.24 (0.14) (2.56) (2.70) -- -- -- 2001 16.07 (0.18) 0.93 0.75 -- (0.58) (0.58)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA --------------------------------------------------------- Net Asset Net Assets Net Period Value, End of Investment Portfolio Ended Redemption End of Total Period Income/ Operating Turnover December 31 Fees(a) Period Return+ (in 000's) (Loss) Expenses (b) Rate - ----------- ---------- --------- ------- ---------- ---------- ------------ ---------- CLASS A 2005 $0.00(d) $18.11 (0.2)% $1,063,137 0.08% 1.40% 3% 2004 0.00(d) 19.49 12.8 1,261,293 (0.11) 1.39 12 2003 -- 17.97 31.9 1,255,668 (0.35) 1.44(c) 8 2002 -- 13.81 (16.0) 1,024,452 (0.28) 1.40 16 2001 -- 16.43 5.4 1,267,975 (0.30) 1.40 29 CLASS B 2005 $0.00(d) $17.28 (0.9)% $ 17,804 (0.67)% 2.15% 3% 2004 0.00(d) 18.79 12.0 20,366 (0.86) 2.14 12 2003 -- 17.47 30.9 18,059 (1.10) 2.19(c) 8 2002 -- 13.53 (16.6) 10,493 (1.01) 2.16 16 2001 -- 16.23 4.6 5,505 (1.10) 2.19 29 CLASS C 2005 $0.00(d) $17.29 (0.9)% $ 14,003 (0.67)% 2.15% 3% 2004 0.00(d) 18.80 11.9 16,400 (0.85) 2.14 12 2003 -- 17.49 30.9 14,973 (1.10) 2.19(c) 8 2002 -- 13.54 (16.6) 8,078 (1.01) 2.16 16 2001 -- 16.24 4.6 4,170 (1.08) 2.19 29
- ------------------- + Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the period and sold at the end of the period including reinvestment of dividends and does not reflect applicable sales charges. (a) Per share amounts have been calculated using the average shares outstanding method. (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, the expense ratios would be 1.39% (Class A), 2.18% (Class B), and 2.18% (Class C) for 2001. For the fiscal years ended December 31, 2002 and 2003, the effect of the custodian fee credits were minimal. For the fiscal years ended December 31, 2004 and 2005, there were no custodian fee credits. (c) The Fund incurred dividend expense on securities sold short for the year ended December 31, 2003. If the dividend expense had not been incurred, the ratios of operating expenses to average net assets would have been 1.43% (Class A), 2.18% (Class B), and 2.18% (Class C), respectively. (d) Amount represents less than $0.005 per share. See accompanying notes to financial statements. 15 THE GABELLI VALUE FUND INC. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ================================================================================ To the Board of Directors and Shareholders of The Gabelli Value Fund Inc.: In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of The Gabelli Value Fund Inc. (hereafter referred to as the "Fund") at December 31, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2005 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP New York, New York February 24, 2006 16 THE GABELLI VALUE FUND INC. ADDITIONAL FUND INFORMATION (UNAUDITED) ================================================================================ The business and affairs of the Fund are managed under the direction of the Fund's Board of Directors. Information pertaining to the Directors and officers of the Fund is set forth below. The Fund's Statement of Additional Information includes additional information about The Gabelli Value Fund Inc. Directors and is available, without charge, upon request, by calling 800-GABELLI (800-422-3554) or by writing to The Gabelli Value Fund Inc. at One Corporate Center, Rye, NY 10580-1422.
TERM OF NUMBER OF NAME, POSITION(S) OFFICE AND FUNDS IN FUND ADDRESS 1 LENGTH OF COMPLEX OVERSEEN PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS AND AGE TIME SERVED 2 BY DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR 4 - ---------------- ------------- ---------------- ---------------------- ------------------- INTERESTED DIRECTORS 3: - ---------------------- MARIO J. GABELLI Since 1989 24 Chairman of the Board and Chief Executive Director of Morgan Director and Officer of GAMCO Investors, Inc. and Chief Group Holdings, Inc. Chief Investment Officer Investment Officer - Value Portfolios of Gabelli (holding company) Age: 63 Funds, LLC and GAMCO Asset Management Inc.; Chairman and Chief Executive Officer of Lynch Interactive Corporation (multimedia and services) NON-INTERESTED DIRECTORS: - ------------------------ ANTHONY J. COLAVITA Since 1989 34 Partner in the law firm of -- Director Anthony J. Colavita, P.C. Age: 70 ROBERT J. MORRISSEY Since 1989 7 Partner in the law firm of Morrissey, -- Director Hawkins & Lynch Age: 66 ANTHONY R. PUSTORINO Since 1989 14 Certified Public Accountant; Professor Director of Lynch Director Emeritus, Pace University Corporation Age: 80 (diversified manufacturing) WERNER J. ROEDER, MD Since 2001 23 Medical Director of Lawrence Hospital and -- Director practicing private physician Age: 65
- -------------------------------------------------------------------------------- 2005 TAX NOTICE TO SHAREHOLDERS (Unaudited) For the fiscal year ended December 31, 2005, the Fund paid to shareholders, on December 28, 2005, ordinary income dividends (inclusive of short-term capital gains) totaling $0.0236, $0.0115, and $0.0115 and a long-term capital gain distribution, designated as a capital gain dividend totaling $1.3264, $1.3264, and $1.3264 per share for Class A, Class B, and Class C, respectively. For the fiscal year ended December 31, 2005, 100% of the ordinary income dividend qualifies for the dividend received deduction available to corporations and 100% of the ordinary income distributions was qualified dividend income. - -------------------------------------------------------------------------------- 17 THE GABELLI VALUE FUND INC. ADDITIONAL FUND INFORMATION (UNAUDITED) (CONTINUED) ================================================================================
TERM OF NAME, POSITION(S) OFFICE AND ADDRESS 1 LENGTH OF PRINCIPAL OCCUPATION(S) AND AGE TIME SERVED 2 DURING PAST FIVE YEARS - ---------------- ------------- ----------------------- OFFICERS: - -------- BRUCE N. ALPERT Since 2003 Executive Vice President and Chief Operating Officer of President and Treasurer Gabelli Funds, LLC since 1988 and an officer of all Age: 54 of the registered investment companies in the Gabelli Funds complex. Director and President of Gabelli Advisers,Inc. since 1998. JAMES E. MCKEE Since 1995 Vice President, General Counsel and Secretary of Secretary GAMCO Investors, Inc. since 1999 and GAMCO Asset Age: 42 Management Inc. since 1993; Secretary of all of the registered investment companies in the Gabelli Funds complex. PETER D. GOLDSTEIN Since 2004 Director of Regulatory Affairs for GAMCO Investors, Chief Compliance Officer Inc. Compliance Officer since 2004; Chief Age: 52 Compliance Officer of all of the registered investment companies in the Gabelli Funds complex; Vice President of Goldman Sachs Asset Management from 2000 through 2004.
- ------------------ 1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted. 2 Each Director will hold office for an indefinite term until the earliest of (i) the next meeting of shareholders, if any, called for the purpose of considering the election or re-election of such Director and until the election and qualification of his or her successor, if any, elected at such meeting, or (ii) the date a Director resigns or retires, or a Director is removed by the Board of Directors or shareholders, in accordance with the Fund's By-Laws and Articles of Incorporation. Each officer will hold office for an indefinite term until the date he or she resigns or retires or until his or her successor is elected and qualified. Effective November 16, 2005, Mr. Karl Otto Pohl resigned from the Board of Directors and now serves as Director Emeritus. 3 "Interested person" of the Fund as defined in the Investment Company Act of 1940. Mr. Gabelli is considered an "interested person" because of his affiliation with Gabelli Funds, LLC which acts as the Fund's investment adviser. 4 This column includes only directorships of companies required to report to the SEC under the Securities Exchange Act of 1934(i.e. public companies) or other investment companies registered under the 1940 Act. 18 - -------------------------------------------------------------------------------- GABELLI FUNDS AND YOUR PERSONAL PRIVACY ================================================================================ WHO ARE WE? The Gabelli/GAMCO Funds are investment companies registered with the Securities and Exchange Commission under the Investment Company Act of 1940. We are managed by Gabelli Funds, LLC and Gabelli Advisers, Inc., which are affiliated with GAMCO Investors, Inc. GAMCO Investors, Inc. is a publicly held company that has subsidiaries that provide investment advisory or brokerage services for a variety of clients. WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A GABELLI CUSTOMER? If you apply to open an account directly with us, you will be giving us some non-public information about yourself. The non-public information we collect about you is: o INFORMATION YOU GIVE US ON YOUR APPLICATION FORM. This could include your name, address, telephone number, social security number, bank account number, and other information. o INFORMATION ABOUT YOUR TRANSACTIONS WITH US, ANY TRANSACTIONS WITH OUR AFFILIATES, AND TRANSACTIONS WITH THE ENTITIES WE HIRE TO PROVIDE SERVICES TO YOU. This would include information about the shares that you buy or redeem, and the deposits and withdrawals that you make. If we hire someone else to provide services--like a transfer agent--we will also have information about the transactions that you conduct through them. WHAT INFORMATION DO WE DISCLOSE AND TO WHOM DO WE DISCLOSE IT? We do not disclose any non-public personal information about our customers or former customers to anyone, other than our affiliates, our service providers who need to know such information, and as otherwise permitted by law. If you want to find out what the law permits, you can read the privacy rules adopted by the Securities and Exchange Commission. They are in volume 17 of the Code of Federal Regulations, Part 248. The Commission often posts information about its regulations on its web site, www.sec.gov. WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION? We restrict access to non-public personal information about you to the people who need to know that information in order to provide services to you or the Fund and to ensure that we are complying with the laws governing the securities business. We maintain physical, electronic, and procedural safeguards to keep your personal information confidential. - -------------------------------------------------------------------------------- THE GABELLI VALUE FUND INC. One Corporate Center Rye, New York 10580-1422 800-GABELLI 800-422-3554 FAX: 914-921-5118 WEBSITE: WWW.GABELLI.COM E-MAIL: INFO@GABELLI.COM Net Asset Value available daily by calling 800-GABELLI after 6:00 P.M. BOARD OF DIRECTORS Mario J. Gabelli, CFA Anthony R. Pustorino CHAIRMAN AND CHIEF CERTIFIED PUBLIC ACCOUNTANT EXECUTIVE OFFICER PROFESSOR EMERITUS GAMCO INVESTORS, INC. PACE UNIVERSITY Anthony J. Colavita Werner J. Roeder, MD ATTORNEY-AT-LAW MEDICAL DIRECTOR ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL Robert J. Morrissey ATTORNEY-AT-LAW MORRISSEY, HAWKINS & LYNCH OFFICERS Bruce N. Alpert James E. McKee PRESIDENT AND TREASURER SECRETARY Peter D. Goldstein CHIEF COMPLIANCE OFFICER CUSTODIAN Mellon Trust of New England, N.A. TRANSFER AGENT AND DIVIDEND DISBURSING AGENT State Street Bank and Trust Company LEGAL COUNSEL Willkie Farr & Gallagher LLP DISTRIBUTOR Gabelli & Company, Inc. - -------------------------------------------------------------------------------- This report is submitted for the general information of the shareholders of The Gabelli Value Fund Inc. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. - -------------------------------------------------------------------------------- GAB409Q405SR [GRAPHIC OMITTED] TRIANGLE ART THE GABELLI VALUE FUND INC. ANNUAL REPORT DECEMBER 31, 2005 ITEM 2. CODE OF ETHICS. (a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. (c) There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. (d) The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item's instructions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. As of the end of the period covered by the report, the registrant's Board of Directors has determined that Anthony R. Pustorino is qualified to serve as an audit committee financial expert serving on its audit committee and that he is "independent," as defined by Item 3 of Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. AUDIT FEES (a) The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $47,858 in 2005 and $50,874 in 2004. AUDIT-RELATED FEES (b) The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item are $0 in 2005 and $0 in 2004. TAX FEES (c) The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $2,880 in 2005 and $2,550 in 2004. Tax fees represent tax compliance services provided in connection with the review of the Registrant's tax returns. ALL OTHER FEES (d) The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 in 2005 and $0 in 2004. (e)(1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. Pre-Approval Policies and Procedures. The Audit Committee ("Committee") of the registrant is responsible for pre-approving (i) all audit and permissible non-audit services to be provided by the independent auditors to the registrant and (ii) all permissible non-audit services to be provided by the independent auditors to the Adviser, Gabelli Funds, LLC, and any affiliate of Gabelli Funds, LLC ("Gabelli") that provides services to the registrant (a "Covered Services Provider") if the independent auditors' engagement related directly to the operations and financial reporting of the registrant. The Committee may delegate its responsibility to pre-approve any such audit and permissible non-audit services to the Chairperson of the Committee, and the Chairperson must report to the Committee, at its next regularly scheduled meeting after the Chairperson's pre-approval of such services, his or her decision(s). The Committee may also establish detailed pre-approval policies and procedures for pre-approval of such services in accordance with applicable laws, including the delegation of some or all of the Committee's pre-approval responsibilities to the other persons (other than Gabelli or the registrant's officers). Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the registrant, Gabelli and any Covered Services Provider constitutes not more than 5% of the total amount of revenues paid by the registrant to its independent auditors during the fiscal year in which the permissible non-audit services are provided; (ii) the permissible non-audit services were not recognized by the registrant at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee or Chairperson prior to the completion of the audit. (e)(2) The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: (b) N/A (c) 100% (d) N/A (f) The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was zero percent (0%). (g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 in 2005 and $0 in 2004. (h) The registrant's audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. 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. 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. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. 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 Directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) 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) Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. (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 Value Fund Inc. -------------------------------------------------------------------- By (Signature and Title)* /s/ Bruce N. Alpert ------------------------------------------------------- Bruce N. Alpert, Principal Executive Officer Date March 10, 2006 ---------------------------------------------------------------------------- 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 & Principal Financial Officer Date March 10, 2006 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CODE ETH 2 codeethics.txt CODE OF ETHICS EX-99.CODE ETH GABELLI ASSET MANAGEMENT INC. AND AFFILIATES - -------------------------------------------------------------------------------- JOINT CODE OF ETHICS FOR CHIEF EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF THE GABELLI FUNDS - -------------------------------------------------------------------------------- Each investment company listed on Exhibit 1 hereto (each a "COMPANY") is committed to conducting business in accordance with applicable laws, rules and regulations and the highest standards of business ethics, and to full and accurate disclosure -- financial and otherwise -- in compliance with applicable law. This Code of Ethics, applicable to each Company's Chief Executive Officer, President, Chief Financial Officer and Treasurer (or persons performing similar functions) (together, "SENIOR OFFICERS"), sets forth policies to guide you in the performance of your duties. As a Senior Officer, you must comply with applicable law. You also have a responsibility to conduct yourself in an honest and ethical manner. You have leadership responsibilities that include creating a culture of high ethical standards and a commitment to compliance, maintaining a work environment that encourages the internal reporting of compliance concerns and promptly addressing compliance concerns. This Code of Ethics recognizes that the Senior Officers are subject to certain conflicts of interest inherent in the operation of investment companies, because the Senior Officers currently or may in the future serve as Senior Officers of each of the Companies, as officers or employees of the investment advisor to the Companies or service providers thereof (the "Advisor") and/or affiliates of the Advisor (the "Advisory Group") and as officers or trustees/directors of other registered investment companies and unregistered investment funds advised by the Advisory Group. This Code of Ethics also recognizes that certain laws and regulations applicable to, and certain policies and procedures adopted by, the Companies or the Advisory Group govern your conduct in connection with many of the conflict of interest situations that arise in connection with the operations of the Companies, including: o the Investment Company Act of 1940, and the rules and regulation promulgated thereunder by the Securities and Exchange Commission (the "1940 ACT"); o the Investment Advisers Act of 1940, and the rules and regulations promulgated thereunder by the Securities and Exchange Commission (the "ADVISERS ACT"); o the Code of Ethics adopted by each Company pursuant to Rule 17j-1(c) under the 1940 Act (collectively, the "TRUST'S 1940 ACT CODE OF ETHICS"); o one or more codes of ethics adopted by the Advisory Group that have been reviewed and approved by those trustees/directors (the "DIRECTORS") of each Company that are not "interested persons" of such Company (the "INDEPENDENT DIRECTORS") within the meaning of the 1940 Act (the "ADVISORY GROUP'S 1940 ACT CODE OF ETHICS" and, together with such Company's 1940 Act Code of Ethics, the "1940 ACT CODES OF ETHICS"); o the policies and procedures adopted by each Company to address conflict of interest situations, such as procedures under Rule 10f-3, Rule 17a-7 and Rule 17e-1 under the 1940 Act (collectively, the "CONFLICT POLICIES"); and o the Advisory Group's policies and procedures to address, among other things, conflict of interest situations and related matters (collectively, the "ADVISORY POLICIES"). The provisions of the 1940 Act, the Advisers Act, the 1940 Act Codes of Ethics, the Conflict Policies and the Advisory Policies are referred to herein collectively as the "ADDITIONAL CONFLICT RULES". This Code of Ethics is different from, and is intended to supplement, the Additional Conflict Rules. Accordingly, a violation of the Additional Conflict Rules by a Senior Officer is hereby deemed not to be a violation of this Code of Ethics, unless and until the Directors shall determine that any such violation of the Additional Conflict Rules is also a violation of this Code of Ethics. SENIOR OFFICERS SHOULD ACT HONESTLY AND CANDIDLY Each Senior Officer has a responsibility to each Company to act with integrity. Integrity requires, among other things, being honest and candid. Deceit and subordination of principle are inconsistent with integrity. Each Senior Officer must: o act with integrity, including being honest and candid while still maintaining the confidentiality of information where required by law or the Additional Conflict Rules; o comply with the laws, rules and regulations that govern the conduct of each Company's operations and report any suspected violations thereof in accordance with the section below entitled "Compliance With Code Of Ethics"; and o adhere to a high standard of business ethics. CONFLICTS OF INTEREST A conflict of interest for the purpose of this Code of Ethics occurs when your private interests interfere in any way, or even appear to interfere, with the interests of a Company. Senior Officers are expected to use objective and unbiased standards when making decisions that affect each Company, keeping in mind that Senior Officers are subject to certain inherent conflicts of interest because Senior Officers of a Company also are or may be officers of other Companies and/or the Advisory Group (as a result of which it is incumbent upon you to be familiar with and to seek to comply with the Additional Conflict Rules). You are required to conduct the business of each Company in an honest and ethical manner, including the ethical handling of actual or apparent conflicts of interest between personal and business relationships. When making any investment, accepting any position or benefits, participating in any transaction or business arrangement or otherwise acting in a manner that creates or appears to create a conflict of interest with respect to each Company where you are receiving a personal benefit, you should act in accordance with the letter and spirit of this Code of Ethics. If you are in doubt as to the application or interpretation of this Code of Ethics to you as a Senior Officer of a Company, you should make full disclosure of all relevant facts and circumstances to the Chief Compliance Officer of the Advisory Group (the "CCO") and obtain the approval of the CCO prior to taking action. Some conflict of interest situations that should always be approved by the CCO, if material, include the following: o the receipt of any entertainment or non-nominal gift by the Senior Officer, or a member of his or her family, from any company with which a Company has current or prospective business dealings (other than the Advisory Group), unless such entertainment or gift is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; o any ownership interest in, or any consulting or employment relationship with, of any of the Companies' service providers, other than the Advisory Group; or o a direct or indirect financial interest in commissions, transaction charges or spreads paid by a Company for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Senior Officer's employment by the Advisory Group, such as compensation or equity ownership. DISCLOSURES It is the policy of each Company to make full, fair, accurate, timely and understandable disclosure in compliance with all applicable laws and regulations in all reports and documents that such Company files with, or submits to, the Securities and Exchange Commission or a national securities exchange and in all other public communications made by such Company. As a Senior Officer, you are required to promote compliance with this policy and to abide by such Company 's standards, policies and procedures designed to promote compliance with this policy. Each Senior Officer must: o familiarize himself or herself with the disclosure requirements applicable to each Company as well as the business and financial operations of each Company; and o not knowingly misrepresent, or cause others to misrepresent, facts about any Company to others, including to the Directors, such Company's independent auditors, such Company's counsel, any counsel to the Independent Directors, governmental regulators or self-regulatory organizations. COMPLIANCE WITH CODE OF ETHICS If you know of or suspect a violation of this Code of Ethics or other laws, regulations, policies or procedures applicable to the Trust, you must report that information on a timely basis to the CCO or report it anonymously by following the "whistle blower" policies adopted by the Advisory Group from time to time. NO ONE WILL BE SUBJECT TO RETALIATION BECAUSE OF A GOOD FAITH REPORT OF A SUSPECTED VIOLATION. Each Company will follow these procedures in investigating and enforcing this Code of Ethics, and in reporting on this Code of Ethics: o the CCO will take all appropriate action to investigate any actual or potential violations reported to him or her; o violations and potential violations will be reported to the Board of Directors of each affected Company after such investigation; o if the Board of Directors determines that a violation has occurred, it will take all appropriate disciplinary or preventive action; and o appropriate disciplinary or preventive action may include a letter of censure, suspension, dismissal or, in the event of criminal or other serious violations of law, notification of the Securities and Exchange Commission or other appropriate law enforcement authorities. WAIVERS OF CODE OF ETHICS Except as otherwise provided in this Code of Ethics, the CCO is responsible for applying this Code of Ethics to specific situations in which questions are presented to the CCO and has the authority to interpret this Code of Ethics in any particular situation. The CCO shall take all action he or she considers appropriate to investigate any actual or potential violations reported under this Code of Ethics. The CCO is authorized to consult, as appropriate, with the chair of the Governance Committee and with counsel to the affected Company, the Advisory Group or the Independent Directors, and is encouraged to do so. The Board of Directors of the affected Company is responsible for granting waivers of this Code of Ethics, as appropriate. Any changes to or waivers of this Code of Ethics will, to the extent required, be disclosed on Form N-CSR, or otherwise, as provided by Securities and Exchange Commission rules. RECORDKEEPING Each Company will maintain and preserve for a period of not less than six (6) years from the date an action is taken, the first two (2) years in an easily accessible place, a copy of the information or materials supplied to the Boards of Directors pursuant to this Code of Ethics: o that provided the basis for any amendment or waiver to this Code of Ethics; and o relating to any violation of this Code of Ethics and sanctions imposed for such violation, together with a written record of the approval or action taken by the relevant Board of Directors. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code of Ethics shall be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code of Ethics, such matters shall not be disclosed to anyone other than the Independent Trustees and their counsel, the Companies and their counsel, the Advisory Group and its counsel and any other advisors, consultants or counsel retained by the Directors, the Independent Directors or any committee of Directors. AMENDMENTS This Code of Ethics may not be amended as to any Company except in written form, which is specifically approved by a majority vote of the affected Company's Directors, including a majority of its Independent Directors. NO RIGHTS CREATED This Code of Ethics is a statement of certain fundamental principles, policies and procedures that govern each of the Senior Officers in the conduct of the Companies' business. It is not intended to and does not create any rights in any employee, investor, supplier, competitor, shareholder or any other person or entity. ACKNOWLEDGMENT FORM I have received and read the Joint Code of Ethics for Chief Executive and Senior Financial Officers of the Gabelli Funds, and I understand its contents. I agree to comply fully with the standards contained in the Code of Ethics and the Company's related policies and procedures. I understand that I have an obligation to report any suspected violations of the Code of Ethics on a timely basis to the CCO or report it anonymously by following the "whistle blower" policies adopted by the Advisory Group from time to time. ------------------------------------- Printed Name /s/ ------------------------------------- Signature ------------------------------------- Date EXHIBIT 1 List of Registered Investment Companies The Gabelli Asset Fund Gabelli Blue Chip Value Fund The Gabelli Convertible and Income Securities Fund Inc. The Gabelli Dividend & Income Trust The Gabelli Equity Trust Inc. The Gabelli Global Gold, Natural Resources & Income Trust The Gabelli Global Multimedia Trust Inc. The Global Utility & Income Trust GAMCO Gold Fund, Inc. The GAMCO Growth Fund GAMCO International Growth Fund, Inc. The GAMCO Mathers Fund The Gabelli Utilities Fund The Gabelli Utility Trust The Gabelli Value Fund Inc. GABELLI CAPITAL SERIES FUNDS, INC.: The Gabelli Capital Asset Fund COMSTOCK FUNDS, INC. Comstock Capital Value Fund Comstock Strategy Fund GABELLI EQUITY SERIES FUNDS, INC.: The Gabelli Equity Income Fund The Gabelli Small Cap Growth Fund The Gabelli Woodland Small Cap Value Fund GAMCO GLOBAL SERIES FUNDS, INC.: The GAMCO Global Telecommunications Fund The GAMCO Global Convertible Securities Fund The GAMCO Global Growth Fund The GAMCO Global Opportunity Fund GABELLI INVESTOR FUNDS, INC.: The Gabelli ABC Fund THE GABELLI MONEY MARKET FUNDS: The Gabelli U.S. Treasury Money Market Fund NED DAVIS RESEARCH FUNDS Ned Davis Research Asset Allocation Fund THE WESTWOOD FUNDS: Westwood Equity Fund Westwood Intermediate Bond Fund Westwood Balanced Fund Westwood Cash Management Fund Westwood SmallCap Fund Westwood Income Fund Westwood Mighty Mites Fund January 19, 2006 EX-99.CERT 3 exh302.txt EXHIBIT 302 FOR SOA CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Bruce N. Alpert, certify that: 1. I have reviewed this report on Form N-CSR of The Gabelli Value Fund Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the 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; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 10, 2006 /s/ Bruce N. Alpert ---------------------- -------------------------------------------- Bruce N. Alpert, Principal Executive Officer & Principal Financial Officer EX-99.906CERT 4 exh906.txt EXHIBIT 906 FOR SOA CERTIFICATION PURSUANT TO RULE 30A-2(B) UNDER THE 1940 ACT AND SECTION 906 OF THE SARBANES-OXLEY ACT I, Bruce N. Alpert, Principal Executive Officer & Principal Financial Officer of The Gabelli Value Fund Inc. (the "Registrant"), certify that: 1. The Form N-CSR of the Registrant (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: March 10, 2006 /s/ Bruce N. Alpert ---------------------- -------------------------------------------- Bruce N. Alpert, Principal Executive Officer & Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----