-----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, MNLxU5mTKnMGeuq00f+5zi6j4VT7dEZMRcOkFULlxgjz9wv8aqRQ/gjQiw4dOC/r GU/6w7dMD/mxm/+/bzNQ6w== 0001005477-98-001191.txt : 19980410 0001005477-98-001191.hdr.sgml : 19980410 ACCESSION NUMBER: 0001005477-98-001191 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980409 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERRILL LYNCH GLOBAL UTILITY FUND INC CENTRAL INDEX KEY: 0000868452 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: SEC FILE NUMBER: 811-06180 FILM NUMBER: 98590858 BUSINESS ADDRESS: STREET 1: P O BOX 9011 CITY: PRINCETON STATE: NJ ZIP: 08543-9011 BUSINESS PHONE: 6092823319 MAIL ADDRESS: STREET 1: P O BOX 9066 CITY: PRINCETON STATE: NJ ZIP: 08543-9011 N-30B-2 1 QUARTERLY REPORT MERRILL LYNCH GLOBAL UTILITY FUND, INC. [GRAPHIC OMITTED] STRATEGIC Performance Quarterly Report February 28, 1998 MERRILL LYNCH GLOBAL UTILITY FUND, INC. Sector Diversification As a Percentage of Equities as of February 28, 1998 [The following table was depicted as a pie chart in the printed material.] Telecommunications 49.5% Utilities -- Electric 34.6% Utilities -- Gas 15.0% Utilities -- Water 4.5% Geographical Diversification As a Percentage of Equities as of February 28, 1998 [The following table was depicted as a pie chart in the printed material.] Europe 41.1% United States 37.3% Americas (Ex-US) 13.1% Asia/Pacific Basin 8.2% Merrill Lynch Global Utility Fund, Inc., February 28, 1998 DEAR SHAREHOLDER During the quarter ended February 28, 1998, investors focused on the implications that the financial crisis in Asia would have on economic growth worldwide. In the United States, sentiment fluctuated between a variety of outlooks. At times, US stock and bond prices reflected expectations that the slowdown in Asian economic growth would lead to a sharp decline in US business activity and, ultimately, a deflationary environment. During other periods, US investors appeared to expect that the positive trends of a moderately expanding economy, declining unemployment, enhanced productivity and corporate profits growth would continue, unimpeded by the developments in Asia. To date, there have been only a few signs that Asia's troubles are influencing US economic activity. Industrial activity is beginning to slow, but the slowdown has not spread to other sectors of the economy. The Federal Open Market Committee did not ease monetary policy at its meeting in early February. Subsequently, in his Humphrey-Hawkins testimony before Congress, Federal Reserve Board Chairman Alan Greenspan indicated that monetary policy might remain steady for some time. This raised concerns among US bond investors who had expected imminent monetary policy easing. As 1998 progresses, it is likely that investor focus will remain on developments in Asia, their potential impact on the US economy, and the Federal Reserve Board's response to them. Portfolio Matters For the three-month period ended February 28, 1998, the overall performance of global international equities was positive relative to that of domestic utility equities. Moreover, foreign utility stocks kept pace with the broad market in the United States, but underperformed the broader world averages. For the quarter ended February 28, 1998, the unmanaged benchmark Financial Times/Standard & Poor's (FT/S&P)--Actuaries World Utility Index rose 10.34%, slightly outperforming the unmanaged S&P 500 Index, which had a total return of +10.25%. Merrill Lynch Global Utility Fund, Inc.'s Class A, Class B, Class C and Class D Shares had total returns of +10.43%, +10.20%, +10.20% and +10.38%, respectively, for the quarter ended February 28, 1998. The Fund's Class A and Class D Shares' total returns outperformed the unmanaged benchmark Index, while all of the Fund's classes of shares outperformed the Lipper Utility Fund's Average total return of +8.08% for the 105 funds tracked during the February quarter. (Fund results shown do not reflect sales charges and would be lower if sales charges were included. For complete performance results, including average annual total returns, see pages 4 and 5 of this report to shareholders.) The principal factor affecting the Fund's returns during the February quarter was the strong performance of the European-based utility stocks. As of February 28, 1998, approximately 41.4% of the Fund's net assets was invested in Europe. Of the Fund's European exposure, 23.7% was invested in the telecommunications sector, 3.9% in water, 3.5% in natural gas and 9.9% in electric utilities. The strongest performance came from the telecommunications sector followed by water, electrics and natural gas. As of January 1, 1998, Europe's voice telecommunications sector was liberalized. This means that, in time, customers will be given a choice of the provider they use to supply them with basic voice telephone service. It is expected that the transition from a monopolistic environment to a competitive one will be more evolutionary than revolutionary. The penetration of wireline service in Europe is below that of the United States, and opportuni ties exist for basic market growth. Moreover, the prospects for higher penetration of service in terms of line growth and minutes is greater in southern Europe than it is in northern Europe. Penetration in most northern European countries is already close to that of the United States. Furthermore, the rates charged to customers for basic local telephone service and long distance service still need to be rebalanced in many countries in Europe. Extensions for the implementation of market liberalization have been granted to some countries in the region so that the rebalancing of rates can take place over a politically acceptable time period. The Fund is positioned with the bulk of its European net assets invested in southern European telephone companies. However, it is important to note that the potential for cost-cutting exists throughout Europe, which may additionally benefit earnings growth. Overall, as of February 28, 1998, the Fund's net assets were spread across 78 companies in 22 countries. The majority of the Fund's net assets was in foreign-based utility stocks. The European region - Italy, Spain, the United Kingdom and France accounted for the highest concentration of the Fund's net assets. These markets have benefited from declining interest rates and better growth prospects. The Asia/Pacific region had the smallest concentration of the Fund's net assets, at 8.2% as of February 28, 1998. At February quarter-end, Australia and New Zealand accounted for 65% of the Fund's weighting in the region, or 5.4% of net assets. The remaining positions in the region were spread across five different countries, with the Philippines being the largest at 1.4% of net assets. Several transactions were made during the February quarter. We added six new positions to the Fund's portfolio, reduced our holdings in 12 companies, and eliminated two small holdings. The six new positions included the purchase of two domestic natural gas companies, one US-based electric utility company, a domestic water company and two foreign telecommunications companies. We initiated a position in Philadelphia Suburban Corporation, a regulated public utility engaged in the water sector, servicing approximately 302,000 residential, industrial, commercial, public and other customers. The population of the company's service territory is approximately 900,000. The service territory is primarily residential suburban, nearly all contiguous, and is nearly completely metered. The company is able to grow through its existing properties as well as through continued acquisitions of neighboring properties. We also added TECO Energy, Inc., a Florida-based diversified energy-related utility holding company, to the Fund. The company's principal business is Tampa Electric Company. Tampa Electric provides electric service to around a half a million retail customers in west-central Florida, a fast-growing service territory. The company derives approximately 20% of its revenues, about one-third of its income and most of its earnings growth from non-utility sources. Growth from the non-utility businesses is expected to accelerate. We purchased shares of Enron Corporation, an integrated natural gas and electricity company based in Houston, Texas. The company operates both domestically and internationally. In addition, we also initiated a position in The Williams Companies, Inc. The company not only transports natural gas, it is also moving toward being a significant participant in the telecommunications market through fiber optics. We added shares of Nippon Telegraph and Telephone Corporation (NTT) to the portfolio, which is the largest provider of telecommunications services in Japan. Opportunities for this company to cut costs are significant. We also added Telstra Corporation Ltd., a telephone company, to the Fund. Other than Australian Gas Light Company, Ltd., which is a significant Fund holding, Telstra is the only other "pure" utility in the Australian market. The company is undergoing a restructuring which is resulting in lower operating costs and higher profits. Moreover, the company has performed well in a market that is becoming more competitive. In Conclusion We thank you for your investment in Merrill Lynch Global Utility Fund, Inc., and we look forward to discussing our investment strategy and outlook with you in our next report to shareholders. Sincerely, /s/ Arthur Zeikel Arthur Zeikel President /s/ Walter D. Rogers Walter D. Rogers Senior Vice President and Portfolio Manager March 27, 1998 2 & 3 Merrill Lynch Global Utility Fund, Inc., February 28, 1998 PERFORMANCE DATA About Fund Performance Investors are able to purchase shares of the Fund through the Merrill Lynch Select Pricing(SM) System, which offers four pricing alternatives: o Class A Shares incur a maximum initial sales charge (front-end load) of 4% and bear no ongoing distribution or account maintenance fees. Class A Shares are available only to eligible investors. o Class B Shares are subject to a maximum contingent deferred sales charge of 4% if redeemed during the first year, decreasing 1% each year thereafter to 0% after the fourth year. In addition, Class B Shares are subject to a distribution fee of 0.50% and an account maintenance fee of 0.25%. These shares automatically convert to Class D Shares after approximately 10 years. (There is no initial sales charge for automatic share conversions.) o Class C Shares are subject to a distribution fee of 0.55% and an account maintenance fee of 0.25%. In addition, Class C Shares are subject to a 1% contingent deferred sales charge if redeemed within one year of purchase. o Class D Shares incur a maximum initial sales charge of 4% and an account maintenance fee of 0.25% (but no distribution fee). None of the past results shown should be considered a representation of future performance. Figures shown in the "Average Annual Total Return" tables assume reinvestment of all dividends and capital gains distributions at net asset value on the ex-dividend date. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Dividends paid to each class of shares will vary because of the different levels of account maintenance, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders. Recent Performance Results*
12 Month 3 Month Since Inception Total Return Total Return Total Return ============================================================================================== ML Global Utility Fund, Inc. Class A Shares +27.22% +10.43% +156.18% - ---------------------------------------------------------------------------------------------- ML Global Utility Fund, Inc. Class B Shares +26.26 +10.20 +142.40 - ---------------------------------------------------------------------------------------------- ML Global Utility Fund, Inc. Class C Shares +26.16 +10.20 + 72.43 - ---------------------------------------------------------------------------------------------- ML Global Utility Fund, Inc. Class D Shares +26.93 +10.38 + 75.73 - ----------------------------------------------------------------------------------------------
*Investment results shown do not reflect sales charges; results shown would be lower if a sales charge was included. Total investment returns are based on changes in net asset values for the periods shown, and assume reinvestment of all dividends and capital gains distributions at net asset value on the ex-dividend date. The Fund's inception dates are: Class A and Class B Shares, 12/28/90; and Class C and Class D Shares, 10/21/94. Average Annual Total Return % Return Without % Return With Sales Charge Sales Charge** ====================================================================== Class A Shares* ====================================================================== Year Ended 12/31/97 +24.11% +19.14% ---------------------------------------------------------------------- Five Years Ended 12/31/97 +14.40 +13.47 ---------------------------------------------------------------------- Inception (12/28/90) through 12/31/97 +13.66 +13.00 ---------------------------------------------------------------------- *Maximum sales charge is 4%. **Assuming maximum sales charge. % Return % Return Without CDSC With CDSC** ====================================================================== Class B Shares* Year Ended 12/31/97 +23.13% +19.13% ====================================================================== Five Years Ended 12/31/97 +13.53 +13.53 ---------------------------------------------------------------------- Inception (12/28/90) through 12/31/97 +12.78 +12.78 ---------------------------------------------------------------------- *Maximum contingent deferred sales charge is 4% and is reduced to 0% after 4 years. **Assuming payment of applicable contingent deferred sales charge. % Return % Return Without CDSC With CDSC** ====================================================================== Class C Shares* ====================================================================== Year Ended 12/31/97 +23.11% +22.11% ---------------------------------------------------------------------- Inception (10/21/94) through 12/31/97 +17.02 +17.02 ---------------------------------------------------------------------- *Maximum contingent deferred sales charge is 1% and is reduced to 0% after 1 year. **Assuming payment of applicable contingent deferred sales charge. % Return Without % Return With Sales Charge Sales Charge** ====================================================================== Class D Shares* ====================================================================== Year Ended 12/31/97 +23.82% +18.86% ---------------------------------------------------------------------- Inception (10/21/94) through 12/31/97 +17.69 +16.19 ---------------------------------------------------------------------- *Maximum sales charge is 4%. **Assuming maximum sales charge. 4 & 5 Merrill Lynch Global Utility Fund, Inc., February 28, 1998 - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (in US dollars) - --------------------------------------------------------------------------------
Shares Percent of COUNTRY Industries Held Common Stocks & Warrants Cost Value Net Assets ==================================================================================================================================== Argentina Telecommunications 150,000 Telecom Argentina STET S.A. (ADR)(b) $ 2,975,145 $ 5,503,125 1.5% 115,000 Telefonica de Argentina S.A. (ADR)(b) 2,729,106 4,140,000 1.1 ----------- ----------- ---- 5,704,251 9,643,125 2.6 ------------------------------------------------------------------------------------------------------------------- Utilities--Electric 6,600 Central Costanera S.A. (ADR)(b) 158,400 206,020 0.1 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Argentina 5,862,651 9,849,145 2.7 ================================================================================================================================ Australia Telecommunications 548,000 Telstra Corporation Ltd. 1,068,597 1,459,594 0.4 ------------------------------------------------------------------------------------------------------------------- Utilities--Gas 2,000,000 The Australian Gas & Light Co., Ltd. 5,280,752 15,940,080 4.4 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Australia 6,349,349 17,399,674 4.8 ================================================================================================================================ Austria Utilities--Gas 41,820 Energie-Versorgung Niederoesterreich AG (EVN) 3,050,014 5,904,232 1.6 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Austria 3,050,014 5,904,232 1.6 ================================================================================================================================ Brazil Telecommunications 45,000 Telecomunicacoes Brasileiras S.A.--Telebras (ADR)(b) 2,176,897 5,509,688 1.5 ------------------------------------------------------------------------------------------------------------------- Utilities--Electric 300,000 Companhia Paranaense de Energia (Copel) (ADR)(b) 5,400,000 3,825,000 1.1 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Brazil 7,576,897 9,334,688 2.6 ================================================================================================================================ Canada Telecommunications 109,200 BC Telecom, Inc. 2,011,806 3,703,191 1.0 ------------------------------------------------------------------------------------------------------------------- Utilities--Electric 369,100 Nova Scotia Power Co. 3,476,309 4,928,943 1.4 ------------------------------------------------------------------------------------------------------------------- Utilities--Gas 200,000 Transcanada Pipeline Co. Ltd. (ADR)(b) 3,147,485 4,512,500 1.2 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Canada 8,635,600 13,144,634 3.6 ================================================================================================================================ Chile Telecommunications 113,750 Compania de Telefonos de Chile S.A. (ADR)(b) 2,101,127 3,113,906 0.8 ------------------------------------------------------------------------------------------------------------------- Utilities--Electric 86,444 Chilgener S.A. (ADR)(b) 2,023,851 2,074,656 0.6 105,600 Distribuidora Chilectra Metropolitana S.A. (ADR)(b) 1,309,780 2,658,491 0.7 ----------- ----------- ---- 3,333,631 4,733,147 1.3 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Chile 5,434,758 7,847,053 2.1 ================================================================================================================================ Denmark Telecommunications 160,000 Tele Danmark A/S (ADR)(b) 3,764,160 5,220,000 1.4 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Denmark 3,764,160 5,220,000 1.4 ================================================================================================================================ France Utilities--Water 91,074 Generale des Eaux S.A. 9,841,922 14,338,355 3.9 89,715 Generale des Eaux S.A. (Warrants)(a) 0 89,936 0.0 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks & Warrants in France 9,841,922 14,428,291 3.9 ================================================================================================================================ Germany Telecommunications 24,300 Deutsche Telekom AG 462,162 490,848 0.1 ------------------------------------------------------------------------------------------------------------------- Utilities--Electric 40,000 RWE Aktiengesellschaft 1,799,334 2,212,302 0.6 4,000 VIAG Aktiengesellschaft 1,764,306 2,164,903 0.6 70,000 Veba Aktiengesellschaft 2,284,445 4,697,145 1.3 ----------- ----------- ---- 5,848,085 9,074,350 2.5 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Germany 6,310,247 9,565,198 2.6 ================================================================================================================================ Hong Kong Utilities--Gas 144,050 The Hong Kong and China Gas Co. Ltd. 178,364 258,628 0.1 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Hong Kong 178,364 258,628 0.1 ================================================================================================================================ Indonesia Telecommunications 5,500 P.T. Indonesian Satellite Corp. (Indosat) (ADR)(b) 176,275 82,500 0.0 29,600 P.T. Telekomunikasi Indonesia (Persero) (ADR)(b) 532,800 251,600 0.1 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Indonesia 709,075 334,100 0.1 ================================================================================================================================ Italy Telecommunications 3,000,000 Telecom Italia Mobile S.p.A. 2,137,108 13,731,685 3.8 1,505,555 Telecom Italia S.p.A 2,746,349 10,246,395 2.8 2,891,700 Telecom Italia S.p.A. (Registered Non-Convertible) 5,447,174 14,044,522 3.8 ----------- ----------- ---- 10,330,631 38,022,602 10.4 ------------------------------------------------------------------------------------------------------------------- Utilities--Gas 1,786,300 Italgas Torino S.p.A. 5,169,953 6,802,764 1.9 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Italy 15,500,584 44,825,366 12.3 ================================================================================================================================ Japan Telecommunications 290 Nippon Telegraph and Telephone Corporation (NTT) 2,475,448 2,666,667 0.7 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Japan 2,475,448 2,666,667 0.7 ================================================================================================================================ Mexico Telecommunications 70,000 Telefonos de Mexico, S.A. de C.V. (ADR)(b) 3,786,552 3,548,125 1.0 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Mexico 3,786,552 3,548,125 1.0 ================================================================================================================================ New Zealand Telecommunications 56,000 Telecom Corporation of New Zealand Ltd. (ADR)(b) 1,230,138 2,149,000 0.6 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in New Zealand 1,230,138 2,149,000 0.6 ================================================================================================================================ Peru Telecommunications 195,000 Telefonica del Peru S.A. (ADR)(b) 3,997,500 3,692,813 1.0 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Peru 3,997,500 3,692,813 1.0 ================================================================================================================================ Philippines Telecommunications 188,000 Philippine Long Distance Telephone Co. (ADR)(b) 4,077,062 4,958,500 1.3 ------------------------------------------------------------------------------------------------------------------- Utilities--Electric 96,330 Manila Electric Co. (MERALCO) 'B' 497,246 288,747 0.1 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in the Philippines 4,574,308 5,247,247 1.4 ================================================================================================================================ Portugal Telecommunications 205,740 Portugal Telecom, S.A. (ADR)(b) 4,576,844 10,827,068 3.0 ------------------------------------------------------------------------------------------------------------------- Utilities--Electric 10,820 EDP--Electricidade de Portugal, S.A. (ADR)(b) 279,589 467,965 0.1 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Portugal 4,856,433 11,295,033 3.1 ================================================================================================================================ South Korea Utilities--Electric 178,300 Korea Electric Power Corp. (KEPCO) (ADR)(b) 3,500,925 1,905,581 0.5 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in South Korea 3,500,925 1,905,581 0.5 ================================================================================================================================ Spain Telecommunications 477,300 Telefonica de Espana, S.A. 5,492,570 16,416,886 4.5 ------------------------------------------------------------------------------------------------------------------- Utilities--Electric 259,200 Empresa Nacional de Electricidad, S.A. (Endesa) (ADR)(b) 2,556,672 5,767,200 1.6 46,000 HidroElectrica Del Cantabrico, S.A. 1,553,961 1,965,020 0.5 808,500 Iberdrola I, S.A. 4,998,321 11,696,440 3.2 ----------- ----------- ---- 9,108,954 19,428,660 5.3 ------------------------------------------------------------------------------------------------------------------- Total Common Stocks in Spain 14,601,524 35,845,546 9.8 ================================================================================================================================
6 & 7 Merrill Lynch Global Utility Fund, Inc., February 28, 1998 - -------------------------------------------------------------------------------- SCHEDULE OF INVESTMENTS (concluded) (in US dollars) - --------------------------------------------------------------------------------
Shares Percent of COUNTRY Industries Held Common Stocks & Warrants Cost Value Net Assets ==================================================================================================================================== United Kingdom Telecommunications 671,000 British Telecommunications PLC $ 4,688,465 $ 6,772,606 1.9% 100,000 Vodafone Group PLC (ADR)(b) 2,962,040 8,850,000 2.4 ------------ ------------ ----- 7,650,505 15,622,606 4.3 ---------------------------------------------------------------------------------------------------------------- Utilities--Electric 208,000 National Power PLC 1,723,671 2,154,159 0.6 370,000 PowerGen PLC 2,705,142 5,165,023 1.4 ------------ ------------ ----- 4,428,813 7,319,182 2.0 Total Common Stocks in the United Kingdom 12,079,318 22,941,788 6.3 ================================================================================================================================ United States Telecommunications 46,000 AT&T Corporation 1,848,510 2,800,250 0.8 140,000 Ameritech Corp. 2,996,450 5,836,250 1.6 47,616 Bell Atlantic Corporation 2,819,654 4,273,536 1.2 91,800 BellSouth Corp. 2,702,773 5,599,800 1.5 108,000 Frontier Corp. 2,193,480 2,990,250 0.8 85,000 GTE Corp. 3,145,450 4,600,625 1.3 69,900 SBC Communications, Inc. 2,939,711 5,286,188 1.4 68,000 U S West Communications Group 1,895,186 3,540,250 1.0 108,000 WorldCom Inc. 3,572,937 4,124,250 1.1 ------------ ------------ ----- 24,114,151 39,051,399 10.7 ---------------------------------------------------------------------------------------------------------------- Utilities--Electric 156,000 Allegheny Energy Corp. 4,213,210 4,767,750 1.3 87,200 Boston Edison Co. 2,722,264 3,384,450 0.9 166,962 CINergy Corp. 4,045,124 5,812,365 1.6 84,200 Consolidated Edison Co. of New York 2,991,744 3,578,500 1.0 118,900 DTE Energy Co. 4,092,463 4,369,575 1.2 95,250 Dominion Resources, Inc. 3,965,452 3,798,094 1.0 85,000 Duke Energy Co. 3,180,276 4,722,812 1.3 86,000 Edison International 1,925,397 2,375,750 0.6 168,300 GPU, Inc. 5,268,193 6,763,556 1.9 75,200 Houston Industries, Inc. 1,840,708 1,945,800 0.5 257,600 NIPSCO Industries, Inc. 3,953,788 6,617,100 1.8 124,000 New Century Energies Corp. 3,798,642 5,781,500 1.6 106,000 New York State Electric & Gas Corp. 3,787,564 3,981,625 1.1 140,500 PECO Energy Co. 4,344,731 2,774,875 0.8 183,000 PacifiCorp 3,657,980 4,426,312 1.2 91,200 Southern Co. 2,022,770 2,251,500 0.6 68,000 TECO Energy, Inc. 1,789,080 1,789,250 0.5 100,000 Texas Utilities Holding Co. 3,506,000 4,043,750 1.1 ------------ ------------ ----- 61,105,386 73,184,564 20.0 ---------------------------------------------------------------------------------------------------------------- Utilities--Gas 65,500 The Coastal Corp. 1,741,062 4,167,437 1.2 40,000 Enron Corporation 1,842,108 1,880,000 0.5 30,000 K N Energy, Inc. 1,214,183 1,558,125 0.4 130,000 Keyspan Energy Corporation 3,371,550 4,623,125 1.3 84,000 Questar Corp. 2,475,460 3,570,000 1.0 74,300 Sonat, Inc. 2,229,714 3,204,187 0.9 60,000 Williams Companies, Inc. (The) 1,978,230 1,961,250 0.5 ------------ ------------ ----- 14,852,307 20,964,124 5.8 ---------------------------------------------------------------------------------------------------------------- Utilities--Water 86,200 Philadelphia Suburban Corporation 1,869,462 1,891,012 0.5 ---------------------------------------------------------------------------------------------------------------- Total Common Stocks in the United States 101,941,306 135,091,099 37.0 ================================================================================================================================ Total Investments in Common Stocks & Warrants 226,257,073 362,493,908 99.2 ================================================================================================================================ Face Amount Short-Term Securities ================================================================================================================================ Commercial Paper* $2,824,000 General Motors Acceptance Corp., 5.69% due 3/02/1998 2,823,107 2,823,107 0.8 ---------------------------------------------------------------------------------------------------------------- Total Investments in Short-Term Securities 2,823,107 2,823,107 0.8 ================================================================================================================================ Total Investments $229,080,180 365,317,015 100.0 ============ Other Assets Less Liabilities 158,614 0.0 ------------ ----- Net Assets $365,475,629 100.0% ============ ===== ================================================================================================================================ Net Asset Class A -- Based on net assets of $40,716,050 and 2,345,374 shares outstanding $ 17.36 Value: ============ Class B -- Based on net assets of $311,469,539 and 18,005,938 shares outstanding $ 17.30 ============ Class C -- Based on net assets of $5,778,256 and 334,832 shares outstanding $ 17.26 ============ Class D -- Based on net assets of $7,511,784 and 432,578 shares outstanding $ 17.37 ============ ================================================================================================================================
* Commercial Paper is traded on a discount basis; the interest rate shown is the discount rate paid at the time of purchase by the Fund. (a) Warrants entitle the Fund to purchase a predetermined number of shares of common stock. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date. (b) American Depositary Receipts (ADR). 8 & 9 Merrill Lynch Global Utility Fund, Inc., February 28, 1998 PORTFOLIO INFORMATION Worldwide Investments as of February 28, 1998 Ten Largest Holdings Percent of (Equity Investments) Net Assets Telefonica de Espana, S.A. ................... 4.5% The Australian Gas & Light Co., Ltd. ......... 4.4 Generale des Eaux S.A. ....................... 3.9 Telecom Italia S.p.A. (Registered Non-Convertible) ................ 3.8 Telecom Italia Mobile S.p.A. ................. 3.8 Iberdrola I, S.A. ............................ 3.2 Portugal Telecom, S.A. (ADR) ................. 3.0 Telecom Italia S.p.A. ........................ 2.8 Vodafone Group PLC (ADR) ..................... 2.4 Italgas Torino S.p.A. ........................ 1.9 Additions (Equity Investments) Enron Corporation Nippon Telegraph and Telephone Corporation (NTT) Philadelphia Suburban Corporation TECO Energy, Inc. Telstra Corporation Ltd. Williams Companies, Inc. (The) Deletions (Equity Investments) Electricity Generating Company of Thailand (EGCOMP) Lucent Technologies, Inc. OFFICERS AND DIRECTORS Arthur Zeikel, President and Director Ronald W. Forbes, Director Cynthia A. Montgomery, Director Charles C. Reilly, Director Kevin A. Ryan, Director Richard R. West, Director Terry K. Glenn, Executive Vice President Norman R. Harvey, Senior Vice President Walter D. Rogers, Senior Vice President and Portfolio Manager Donald C. Burke, Vice President Gerald M. Richard, Treasurer Thomas D. Jones, III, Secretary Custodian The Chase Manhattan Bank, N.A. 4 MetroTech Center, 18th Floor Brooklyn, NY 11245 Transfer Agent Merrill Lynch Financial Data Services, Inc. 4800 Deer Lake Drive East Jacksonville, FL 32246-6484 (800) 637-3863 10 & 11 This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Fund unless accompanied or preceded by the Fund's current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change. Merrill Lynch Global Utility Fund, Inc. Box 9011 Princeton, NJ 08543-9011 #11693--2/98 [RECYCLE LOGO] Printed on post-consumer recycled paper -----END PRIVACY-ENHANCED MESSAGE-----