-----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, K+p0l4qVYxefzLZpYvpG1KI5J4JuWvQllgYEm8nJ0rjQtTuZpY05UyDibCvEuEPU o6mcZUpcGAd224huR7qwfg== 0001005477-00-000104.txt : 20000202 0001005477-00-000104.hdr.sgml : 20000202 ACCESSION NUMBER: 0001005477-00-000104 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991130 FILED AS OF DATE: 20000112 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-30D SEC ACT: SEC FILE NUMBER: 811-06180 FILM NUMBER: 506071 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-30D 1 ANNUAL REPORT MERRILL LYNCH GLOBAL UTILITY FUND, INC. [GRAPHIC OMITTED] STRATEGIC Performance Annual Report November 30, 1999 MERRILL LYNCH GLOBAL UTILITY FUND, INC. Sector Diversification As a Percentage of Equities as of November 30, 1999 Pie graph depicting the following percentages: Telecommunications 61.8% Utilities--Electric 24.7% Utilities--Gas 9.2% Utilities--Water 4.3% Geographical Diversification As a Percentage of Equities as of November 30, 1999 Pie graph depicting the following percentages: Europe 53.1% United States 36.1% Asia/Pacific Basin 6.4% Americas (Ex-US) 4.4% Merrill Lynch Global Utility Fund, Inc., November 30, 1999 DEAR SHAREHOLDER During the quarter ended November 30, 1999, US economic growth continued strengthening while inflationary pressures remained contained. The US financial markets were volatile, as stock prices declined for the third consecutive month in September, but then rebounded in October and advanced on a technology- driven rally in November. Significant strength in small-capitalization stocks also emerged in November, particularly in the small cap growth sector as reflected in the +10.57% rise in the unmanaged Russell 2000 Growth Index. Throughout the latter half of the period, investor psychology was mixed as to whether the Federal Reserve Board would increase interest rates for the third time this year. At its meeting on November 16, 1999, the central bank announced its move to tighten 25 basis points (0.25%), essentially putting short-term interest rates back to where they were before the three quarter-point cuts that were made last fall. Although long-term bond yields also increased during the period, investors appeared to accept that the move by the Federal Reserve Board would contain inflationary pressure. However, this view may not hold if economic growth continues unabated in the New Year. Fiscal Year in Review During the fiscal year ended November 30, 1999, we adhered to the Fund's stated investment objective of seeking both capital appreciation and current income. Moreover, we focused our attention on the Year 2000 issue given the critical importance of the utility sector. As a result, we remained very underweighted in emerging markets for the year. For the 12 months ended November 30, 1999, Merrill Lynch Global Utility Fund, Inc.'s Class A, Class B, Class C and Class D Shares had total returns of +8.17%, +7.41%, +7.34% and +7.96%, respectively. (Investment results shown do not reflect sales charges and would be lower if sales charges were included.) At November 30, 1999, approximately 35.1% of the Fund's net assets was invested in US-based utilities and 62.2% was invested in non-US based utility stocks. The majority of the Fund's overseas utility investments were in Europe, more specifically southern Europe. In terms of sector allocation, telecommunications was dominant on an overall portfolio basis, particularly in Europe. This sector is a clear beneficiary of changes in technology. New technology is not only lowering the cost of doing business but is impacting overall demand for services through increased Internet usage as well as wireless telephony. These trends are clearly positive for the sector and are evident in terms of company results. For the 12 months ended November 30, 1999, the Fund's performance was negatively impacted by its holdings in the domestic electric utility sector and to a lesser extent by its holdings in the domestic natural gas sector. The defensive char acteristics of the domestic electric utility sector worked against performance as investors sought higher risk growth sectors such as technology. In general, high-yielding US stocks underperformed the broad market by a wide margin and the only stocks to show relative outperformance were those with yields well below the yield of the Standard & Poor's (S&P) 500 Index. Rising long-term interest rates also contributed negatively because the sector is still considered to be sensitive to movements in interest rates. European utilities had relatively weak performance during most of the fiscal year ended November 30, 1999, as measured by the Financial Times/S&P Actuaries World Utility Index. This was partly in response to the weakness of the euro relative to the US dollar, which started at e1.1585 on January 8, 1999, dropped to e1.0566 on August 31, 1999 and finished the fiscal year at e1.0092 as of November 30, 1999. However, in the fourth quarter of the Fund's fiscal year, the sector started to rebound as investors once again focused on fundamentals and attractive asset bases. Moreover, companies are beginning to unlock value by disposing of non-core assets and by listing faster-growing businesses in the market. The value of the euro as compared to the US dollar currently appears to be of lesser concern. During the Fund's fiscal year, there was a bounce back in Pacific Basin-based utility stocks, particularly in Japan. The Japanese utility sector primarily benefited from the strength in the local market. The Fund's exposure to the Japanese market is in the major telephone company, NTT Corp. In Conclusion We thank you for your investment in Merrill Lynch Global Utility Fund, Inc., and we look forward to discussing our investment strategy with you in our next report to shareholders. Sincerely, /s/ Terry K. Glenn Terry K. Glenn President and Director /s/ Walter D. Rogers Walter D. Rogers Senior Vice President and Portfolio Manager January 5, 2000 - -------------------------------------------------------------------------------- To reduce shareholders' expenses, Merrill Lynch Global Utility Fund, Inc. will no longer be printing and mailing quarterly reports to shareholders. We will continue to provide you with reports on a semi-annual and annual basis. - -------------------------------------------------------------------------------- 2 & 3 Merrill Lynch Global Utility Fund, Inc., November 30, 1999 PERFORMANCE DATA About Fund Performance Investors are able to purchase shares of the Fund through the Merrill Lynch Select PricingSM System, which offers four pricing alternatives: o Class A Shares incur a maximum initial sales charge (front-end load) of 4% and bear no ongoing distribution or account maintenance fees. Class A Shares are available only to eligible investors. o Class B Shares are subject to a maximum contingent deferred sales charge of 4% if redeemed during the first year, decreasing 1% each year thereafter to 0% after the fourth year. In addition, Class B Shares are subject to a distribution fee of 0.50% and an account maintenance fee of 0.25%. These shares automatically convert to Class D Shares after approximately 10 years. (There is no initial sales charge for automatic share conversions.) o Class C Shares are subject to a distribution fee of 0.55% and an account maintenance fee of 0.25%. In addition, Class C Shares are subject to a 1% contingent deferred sales charge if redeemed within one year of purchase. o Class D Shares incur a maximum initial sales charge of 4% and an account maintenance fee of 0.25% (but no distribution fee). None of the past results shown should be considered a representation of future performance. Figures shown in the "Recent Performance Results" and "Average Annual Total Return" tables assume reinvestment of all dividends and capital gains distributions at net asset value on the ex-dividend date. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Dividends paid to each class of shares will vary because of the different levels of account maintenance, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders. Recent Performance Results*
3 Month 12 Month Since Inception As of November 30, 1999 Total Return Total Return Total Return ============================================================================================ ML Global Utility Fund, Inc. Class A Shares +6.74% +8.17% +217.34% - -------------------------------------------------------------------------------------------- ML Global Utility Fund, Inc. Class B Shares +6.54 +7.41 +196.28 - -------------------------------------------------------------------------------------------- ML Global Utility Fund, Inc. Class C Shares +6.53 +7.34 +110.50 - -------------------------------------------------------------------------------------------- ML Global Utility Fund, Inc. Class D Shares +6.72 +7.96 +116.73 ============================================================================================
* Investment results shown do not reflect sales charges; results shown would be lower if a sales charge was included. Total investment returns are based on changes in net asset values for the periods shown, and assume reinvestment of all dividends and capital gains distributions at net asset value on the ex-dividend date. The Fund's since inception dates are from 12/28/90 for Class A & Class B Shares and from 10/21/94 for Class C & Class D Shares. Class A & Class B Shares Total Return Based on a $10,000 Investment A line graph depicting growth of an investment in the Fund's Class A Shares and Class B Shares compared to growth of an investment in the Financial Times/Standard & Poor's--Actuaries World Index. Beginning and ending values are: 12/28/90** 11/99 ML Global Utility Fund, Inc.+ --Class A Shares* $ 9,600 $30,464 ML Global Utility Fund, Inc.+ --Class B Shares* $10,000 $29,628 Financial Times/Standard & Poor's--Actuaries World Index++ $10,000 $33,268 * Assuming maximum sales charge, transaction costs and other operating expenses, including advisory fees. ** Commencement of operations. + ML Global Utility Fund, Inc. invests at least 65% of its total assets in common stocks (including preferred or debt securities convertible into common stocks), preferred stocks and debt securities issued by domestic and foreign companies in the utilities industries. ++ This unmanaged market capitalization-weighted Index is comprised of nearly 2,307 equties from 29 countries in 17 regions, including the United States. Class A & Class B Shares Average Annual Total Return % Return Without % Return With Sales Charge Sales Charge** ================================================================================ Class A Shares* ================================================================================ Year Ended 9/30/99 +10.23% + 5.82% - -------------------------------------------------------------------------------- Five Years Ended 9/30/99 +15.25 +14.32 - -------------------------------------------------------------------------------- Inception (12/28/90) through 9/30/99 +13.13 +12.60 - -------------------------------------------------------------------------------- * Maximum sales charge is 4%. (Prior to October 21, 1994, Class A Shares were offered at a higher sales charge. Thus, actual returns would have been lower than shown for the five-year and ten-year periods.) ** Assuming maximum sales charge. % Return % Return Without CDSC With CDSC** ================================================================================ Class B Shares* ================================================================================ Year Ended 9/30/99 + 9.41% + 5.41% - -------------------------------------------------------------------------------- Five Years Ended 9/30/99 +14.36 +14.36 - -------------------------------------------------------------------------------- Inception (12/28/90) through 9/30/99 +12.26 +12.26 - -------------------------------------------------------------------------------- * Maximum contingent deferred sales charge is 4% and is reduced to 0% after 4 years. ** Assuming payment of applicable contingent deferred sales charge. 4 & 5 Merrill Lynch Global Utility Fund, Inc., November 30, 1999 PERFORMANCE DATA (concluded) Class C & Class D Shares Total Return Based on a $10,000 Investment A line graph depicting growth of an investment in the Fund's Class C Shares and Class D Shares compared to growth of an investment in the Financial Times/Standard & Poor's--Actuaries World Index. Beginning and ending values are: 10/21/94** 11/99 ML Global Utility Fund, Inc.+ --Class C Shares* $10,000 $21,050 ML Global Utility Fund, Inc.+ --Class D Shares* $ 9,600 $20,807 Financial Times/Standard & Poor's--Actuaries World Index++ $10,000 $21,995 * Assuming maximum sales charge, transaction costs and other operating expenses, including advisory fees. ** Commencement of operations. + ML Global Utility Fund, Inc. invests at least 65% of its total assets in common stocks (including preferred or debt securities convertible into common stocks), preferred stocks and debt securities issued by domestic and foreign companies in the utilities industries. ++ This unmanaged market capitalization-weighted Index is comprised of nearly 2,307 equties from 29 countries in 17 regions, including the United States. Past performance is not predictive of future performance. Class C & Class D Shares Average Annual Total Return % Return % Return Without CDSC With CDSC** ================================================================================ Class C Shares* ================================================================================ Year Ended 9/30/99 + 9.30% + 8.31% - -------------------------------------------------------------------------------- Inception (10/21/94) through 9/30/99 +14.54 +14.54 - -------------------------------------------------------------------------------- * Maximum contingent deferred sales charge is 1% and is reduced to 0% after 1 year. ** Assuming payment of applicable contingent deferred sales charge. % Return Without % Return With Sales Charge Sales Charge** ================================================================================ Class D Shares* ================================================================================ Year Ended 9/30/99 + 9.97% + 5.57% - -------------------------------------------------------------------------------- Inception (10/21/94) through 9/30/99 +15.19 +14.24 - -------------------------------------------------------------------------------- * Maximum sales charge is 4%. ** Assuming maximum sales charge. OFFICERS AND DIRECTORS Terry K. Glenn, President and Director Ronald W. Forbes, Director Cynthia A. Montgomery, Director Charles C. Reilly, Director Kevin A. Ryan, Director Richard R. West, Director Arthur Zeikel, Director Robert C. Doll, Senior Vice President Walter D. Rogers, Senior Vice President and Portfolio Manager Donald C. Burke, Vice President and Treasurer Ira P. Shapiro, Secretary Custodian The Chase Manhattan Bank, N.A. 4 MetroTech Center, 18th Floor Brooklyn, NY 11245 Transfer Agent Financial Data Services, Inc. 4800 Deer Lake Drive East Jacksonville, FL 32246-6484 (800) 637-3863 6 & 7 Merrill Lynch Global Utility Fund, Inc., November 30, 1999 SCHEDULE OF INVESTMENTS (in US dollars)
Shares Percent of COUNTRY Industries Held Common Stocks Value Net Assets ================================================================================================================================= Australia Telecommunications 721,400 + Cable & Wireless Optus Limited $ 1,880,531 0.5% ------------------------------------------------------------------------------------------------------------------ Utilities--Gas 1,273,124 Australian Gas Light Company Limited 7,089,183 2.0 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Australia 8,969,714 2.5 ================================================================================================================================= Bermuda Telecommunications 221,400 + Global Crossing Ltd. 9,630,900 2.7 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Bermuda 9,630,900 2.7 ================================================================================================================================= Brazil Telecommunications 28,000 Embratel Participacoes SA (ADR) (a) 521,500 0.2 2,800 Tele Celular Sul Participacoes SA (ADR) (a) 56,000 0.0 9,333 Tele Centro Oeste Celular Participacoes SA (ADR) (a) 37,332 0.0 5,600 Tele Centro Sul Participacoes SA (ADR) (a) 382,200 0.1 560 Tele Leste Celular Participacoes SA (ADR) (a) 16,800 0.0 1,400 Tele Nordeste Celular Participacoes SA (ADR) (a) 36,400 0.0 560 Tele Norte Celular Participacoes SA (ADR) (a) 16,730 0.0 28,000 Tele Norte Leste Participacoes SA (ADR) (a) 498,750 0.1 5,600 Tele Sudeste Celular Participacoes SA (ADR) (a) 115,150 0.0 28,000 + Telecomunicacoes Brasileiras SA--Telebras (ADR) (a) 438 0.0 1,400 Telemig Celular Participacoes SA (ADR) (a) 46,375 0.0 11,200 Telesp Celular Participacoes SA (ADR) (a) 321,300 0.1 28,000 Telesp Participacoes SA (ADR) (a) 504,000 0.2 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Brazil 2,552,975 0.7 ================================================================================================================================= China Telecommunications 20,900 + China Telecom (Hong Kong) Limited (ADR) (a) 2,197,113 0.6 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in China 2,197,113 0.6 ================================================================================================================================= Denmark Telecommunications 165,900 Tele Danmark A/S (ADR) (a) 5,298,431 1.5 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Denmark 5,298,431 1.5 ================================================================================================================================= Finland Telecommunications 168,218 Sonera Oyj 6,945,531 1.9 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Finland 6,945,531 1.9 ================================================================================================================================= France Utilities--Water 165,522 Vivendi 13,165,156 3.6 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in France 13,165,156 3.6 ================================================================================================================================= Germany Telecommunications 26,779 Deutsche Telekom AG 1,532,738 0.4 27,843 Mannesmann AG 5,785,873 1.6 ----------- ---- 7,318,611 2.0 ------------------------------------------------------------------------------------------------------------------ Utilities--Electric 40,000 RWE AG 1,530,336 0.4 70,000 Veba AG 3,418,086 1.0 104,000 Viag AG 1,717,198 0.5 ----------- ---- 6,665,620 1.9 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Germany 13,984,231 3.9 ================================================================================================================================= Hong Kong Utilities--Gas 183,019 Hong Kong and China Gas Company Ltd. 238,027 0.1 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Hong Kong 238,027 0.1 ================================================================================================================================= Ireland Telecommunications 15,175 eircom PLC (ADR) (a) 241,852 0.1 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Ireland 241,852 0.1 ================================================================================================================================= Italy Telecommunications 2,775,000 Telecom Italia Mobile (TIM) SpA 21,792,186 6.0 1,505,555 Telecom Italia SpA 16,582,773 4.6 2,891,700 Telecom Italia SpA (Registered Non-Convertible) 15,575,795 4.3 ----------- ---- 53,950,754 14.9 ------------------------------------------------------------------------------------------------------------------ Utilities--Electric 462,000 AEM SpA 1,255,882 0.4 ------------------------------------------------------------------------------------------------------------------ Utilities--Gas 1,786,300 Italgas SpA 7,013,943 1.9 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Italy 62,220,579 17.2 ================================================================================================================================= Japan Telecommunications 290 Nippon Telegraph & Telephone Corporation (NTT) 5,193,267 1.4 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Japan 5,193,267 1.4 ================================================================================================================================= Mexico Telecommunications 35,000 Telefonos de Mexico SA (ADR) (a) 3,239,688 0.9 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Mexico 3,239,688 0.9 ================================================================================================================================= New Zealand Telecommunications 56,000 Telecom Corporation of New Zealand Limited (ADR) (a) 1,876,000 0.5 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in New Zealand 1,876,000 0.5 ================================================================================================================================= Philippines Telecommunications 188,000 Philippine Long Distance Telephone Company (ADR) (a) 3,854,000 1.1 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in the Philippines 3,854,000 1.1 ================================================================================================================================= Portugal Telecommunications 99,840 Portugal Telecom SA (ADR) (a) 4,792,320 1.3 ------------------------------------------------------------------------------------------------------------------ Utilities--Electric 80,820 EDP--Eletricidade de Portugal, SA (ADR) (a) 2,485,215 0.7 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Portugal 7,277,535 2.0 ================================================================================================================================= Spain Telecommunications 1,219,146 + Telefonica, SA 25,383,380 7.1 24,382 + Telefonica, SA (New) 467,145 0.1 46 Telefonica, SA (Rights) 20 0.0 ----------- ---- 25,850,545 7.2 ------------------------------------------------------------------------------------------------------------------ Utilities--Electric 259,200 Endesa, SA (ADR) (a) 5,135,400 1.4 138,000 Hidroelectrica del Cantabrico, SA 1,979,872 0.6 323,500 Iberdrola, SA 4,507,685 1.2 ----------- ---- 11,622,957 3.2 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Spain 37,473,502 10.4 =================================================================================================================================
8 & 9 Merrill Lynch Global Utility Fund, Inc., November 30, 1999 SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
Shares Percent of COUNTRY Industries Held Common Stocks Value Net Assets ================================================================================================================================= United Kingdom Telecommunications 679,423 British Telecommunications PLC $ 13,610,747 3.7% 390,500 Vodafone AirTouch PLC (ADR) (a) 18,426,719 5.1 ------------ ----- 32,037,466 8.8 ----------------------------------------------------------------------------------------------------------------- Utilities--Electric 208,000 National Power PLC 1,330,172 0.4 370,000 PowerGen PLC 3,177,472 0.9 106,140 Scottish Power PLC (ADR) (a) 3,708,266 1.0 ------------ ----- 8,215,910 2.3 ----------------------------------------------------------------------------------------------------------------- Total Common Stocks in the United Kingdom 40,253,376 11.1 ================================================================================================================================= United States Telecommunications 69,000 AT&T Corp. 3,855,375 1.1 95,232 Bell Atlantic Corporation 6,029,376 1.7 183,600 BellSouth Corporation 8,480,025 2.3 85,000 GTE Corporation 6,205,000 1.7 108,000 + MCI WorldCom Inc. 8,930,250 2.5 324,040 SBC Communications Inc. 16,829,828 4.6 ------------ ----- 50,329,854 13.9 ----------------------------------------------------------------------------------------------------------------- Utilities--Electric 156,000 Allegheny Energy, Inc. 4,524,000 1.2 166,962 Cinergy Corp. 4,226,226 1.2 84,200 Consolidated Edison, Inc. 2,904,900 0.8 118,900 DTE Energy Company 3,931,131 1.1 85,000 Duke Energy Corporation 4,308,437 1.2 86,000 Edison International 2,279,000 0.6 212,000 Energy East Corporation 4,982,000 1.4 90,000 FPL Group, Inc. 3,937,500 1.1 127,300 GPU, Inc. 4,073,600 1.1 87,200 NSTAR 3,618,800 1.0 124,000 New Century Energies, Inc. 3,898,250 1.1 239,500 NiSource Inc. 4,505,594 1.2 144,200 Reliant Energy, Inc. 3,577,962 1.0 91,200 The Southern Company 2,131,800 0.6 100,000 Texas Utilities Company 3,581,250 1.0 ------------ ----- 56,480,450 15.6 ----------------------------------------------------------------------------------------------------------------- Utilities--Gas 95,000 The Coastal Corporation 3,348,750 0.9 27,000 Columbia Energy Group 1,694,250 0.5 46,300 El Paso Energy Corporation 1,782,550 0.5 80,000 Enron Corp. 3,045,000 0.8 130,000 KeySpan Corporation 3,339,375 0.9 168,000 Questar Corporation 2,887,500 0.8 60,000 The Williams Companies, Inc. 2,025,000 0.6 ------------ ----- 18,122,425 5.0 ----------------------------------------------------------------------------------------------------------------- Utilities--Water 86,200 Philadelphia Suburban Corporation 1,993,375 0.6 ----------------------------------------------------------------------------------------------------------------- Total Common Stocks in the United States 126,926,104 35.1 ================================================================================================================================= Total Investments in Common Stocks (Cost--$181,430,791) 351,537,981 97.3 ================================================================================================================================= Face Amount Short-Term Securities ================================================================================================================================= Commercial Paper* $10,489,000 General Motors Acceptance Corp., 5.75% due 12/01/1999 10,489,000 2.9 ----------------------------------------------------------------------------------------------------------------- Total Investments in Short-Term Securities (Cost--$10,489,000) 10,489,000 2.9 ================================================================================================================================= Total Investments (Cost--$191,919,791) 362,026,981 100.2 Liabilities in Excess of Other Assets (677,808) (0.2) ------------ ----- Net Assets $361,349,173 100.0% ============ ===== =================================================================================================================================
(a) American Depositary Receipts (ADR). + Non-income producing security. * Commercial Paper is traded on a discount basis; the interest rate shown reflects the discount rates paid at the time of purchase by the Fund. See Notes to Financial Statements. 10 & 11 Merrill Lynch Global Utility Fund, Inc., November 30, 1999 STATEMENT OF ASSETS AND LIABILITIES
As of November 30, 1999 =================================================================================================================================== Assets: Investments, at value (identified cost--$191,919,791) ............................. $362,026,981 Cash .............................................................................. 329 Foreign cash ...................................................................... 124 Receivables: Dividends ....................................................................... $ 543,702 Capital shares sold ............................................................. 108,784 652,486 ----------- Prepaid registration fees ......................................................... 60,793 ------------ Total assets ...................................................................... 362,740,713 ------------ =================================================================================================================================== Liabilities: Payables: Capital shares redeemed ......................................................... 893,953 Distributor ..................................................................... 203,791 Investment adviser .............................................................. 23,922 1,121,666 ----------- Accrued expenses and other liabilities ............................................ 269,874 ------------ Total liabilities ................................................................. 1,391,540 ------------ =================================================================================================================================== Net Assets: Net assets ........................................................................ $361,349,173 ============ =================================================================================================================================== Net Assets Class A Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... $ 199,918 Consist of: Class B Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 1,570,293 Class C Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 44,016 Class D Shares of Common Stock, $.10 par value, 100,000,000 shares authorized ..... 76,938 Paid-in capital in excess of par .................................................. 175,879,197 Undistributed investment income--net .............................................. 289,741 Undistributed realized capital gains on investments and foreign currency transactions--net ........................................................ 13,186,362 Unrealized appreciation on investments and foreign currency transactions--net ..... 170,102,708 ------------ Net assets ........................................................................ $361,349,173 ============ =================================================================================================================================== Net Asset Class A--Based on net assets of $38,309,289 and 1,999,177 shares outstanding ...... $ 19.16 Value: ============ Class B--Based on net assets of $299,911,571 and 15,702,934 shares outstanding .... $ 19.10 ============ Class C--Based on net assets of $8,381,041 and 440,159 shares outstanding ......... $ 19.04 ============ Class D--Based on net assets of $14,747,272 and 769,382 shares outstanding ........ $ 19.17 ============ ===================================================================================================================================
See Notes to Financial Statements. STATEMENT OF OPERATIONS
For the Year Ended November 30, 1999 =================================================================================================================================== Investment Dividends (net of $536,179 foreign withholding tax) ............................... $ 8,652,427 Income: Interest and discount earned ...................................................... 1,605,630 ------------ Total income ...................................................................... 10,258,057 ------------ =================================================================================================================================== Expenses: Account maintenance and distribution fees--Class B ................................ $ 2,417,986 Investment advisory fees .......................................................... 2,320,290 Transfer agent fees--Class B ...................................................... 335,103 Custodian fees .................................................................... 155,623 Printing and shareholder reports .................................................. 95,262 Accounting services ............................................................... 91,301 Professional fees ................................................................. 80,482 Account maintenance and distribution fees--Class C ................................ 74,967 Registration fees ................................................................. 64,781 Account maintenance fees--Class D ................................................. 35,983 Transfer agent fees--Class A ...................................................... 35,037 Directors' fees and expenses ...................................................... 21,447 Transfer agent fees--Class D ...................................................... 12,492 Transfer agent fees--Class C ...................................................... 10,603 Pricing fees ...................................................................... 689 Other ............................................................................. 11,026 ----------- Total expenses .................................................................... 5,763,072 ------------ Investment income--net ............................................................ 4,494,985 ------------ =================================================================================================================================== Realized & Realized gain (loss) from: Unrealized Gain Investments--net ................................................................ 13,186,364 (Loss) on Foreign currency transactions--net .............................................. (44,364) 13,142,000 Investments & ----------- Foreign Currency Change in unrealized appreciation/depreciation on: Transactions-- Investments--net ................................................................ 8,567,015 Net: Foreign currency transactions--net .............................................. (13,813) 8,553,202 ----------- ------------ Net realized and unrealized gain on investments and foreign currency transactions . 21,695,202 ------------ Net Increase in Net Assets Resulting from Operations .............................. $ 26,190,187 ============ ===================================================================================================================================
See Notes to Financial Statements. 12 & 13 Merrill Lynch Global Utility Fund, Inc., November 30, 1999 STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ended November 30, --------------------------- Increase (Decrease) in Net Assets: 1999 1998 =================================================================================================================================== Operations: Investment income--net ............................................................ $ 4,494,985 $ 5,869,907 Realized gain on investments and foreign currency transactions--net ............... 13,142,000 29,339,193 Change in unrealized appreciation/depreciation on investments and foreign currency transactions--net ................................................ 8,553,202 48,836,490 ------------ ------------ Net increase in net assets resulting from operations .............................. 26,190,187 84,045,590 ------------ ------------ =================================================================================================================================== Dividends & Investment income--net: Distributions to Class A ......................................................................... (740,613) (942,410) Shareholders: Class B ......................................................................... (3,451,994) (4,895,531) Class C ......................................................................... (98,007) (94,022) Class D ......................................................................... (235,257) (178,336) Realized gain on investments--net: Class A ......................................................................... (3,200,306) (2,800,654) Class B ......................................................................... (24,711,996) (21,708,174) Class C ......................................................................... (613,584) (400,316) Class D ......................................................................... (915,061) (489,776) ------------ ------------ Net decrease in net assets resulting from dividends and distributions to shareholders ................................................................... (33,966,818) (31,509,219) ------------ ------------ =================================================================================================================================== Capital Share Net decrease in net assets derived from capital share transactions ................ (19,934,887) (16,180,815) Transactions: ------------ ------------ =================================================================================================================================== Net Assets: Total increase (decrease) in net assets ........................................... (27,711,518) 36,355,556 Beginning of year ................................................................. 389,060,691 352,705,135 ------------ ------------ End of year* ...................................................................... $361,349,173 $389,060,691 ============ ============ =================================================================================================================================== * Undistributed investment income--net .............................................. $ 289,741 $ 364,998 ============ ============ ===================================================================================================================================
See Notes to Financial Statements. FINANCIAL HIGHLIGHTS
Class A The following per share data and ratios have been derived --------------------------------------------------- from information provided in the financial statements. For the Year Ended November 30, --------------------------------------------------- Increase (Decrease) in Net Asset Value: 1999+ 1998+ 1997+ 1996+ 1995 =================================================================================================================================== Per Share Net asset value, beginning of year ........................ $ 19.49 $ 16.97 $ 15.09 $ 13.52 $ 12.08 Operating -------- ------- ------- ------- ------- Performance: Investment income--net .................................... .34 .41 .47 .50 .51 Realized and unrealized gain on investments and foreign currency transactions--net ........................ 1.14 3.77 2.35 1.84 1.42 -------- ------- ------- ------- ------- Total from investment operations .......................... 1.48 4.18 2.82 2.34 1.93 -------- ------- ------- ------- ------- Less dividends and distributions: Investment income--net .................................. (.34) (.42) (.49) (.53) (.49) Realized gain on investments--net ....................... (1.47) (1.24) (.45) (.24) -- -------- ------- ------- ------- ------- Total dividends and distributions ......................... (1.81) (1.66) (.94) (.77) (.49) -------- ------- ------- ------- ------- Net asset value, end of year .............................. $ 19.16 $ 19.49 $ 16.97 $ 15.09 $ 13.52 ======== ======= ======= ======= ======= =================================================================================================================================== Total Investment Based on net asset value per share ........................ 8.17% 26.47% 19.65% 17.94% 16.34% Return:* ======== ======= ======= ======= ======= =================================================================================================================================== Ratios to Expenses .................................................. .82% .82% .82% .84% .91% Average Net ======== ======= ======= ======= ======= Assets: Investment income--net .................................... 1.82% 2.26% 2.98% 3.51% 3.73% ======== ======= ======= ======= ======= =================================================================================================================================== Supplemental Net assets, end of year (in thousands) .................... $ 38,309 $41,977 $38,825 $40,055 $44,775 Data: ======== ======= ======= ======= ======= Portfolio turnover ........................................ 7.43% 6.56% 6.23% 5.03% 2.92% ======== ======= ======= ======= ======= ===================================================================================================================================
* Total investment returns exclude the effects of sales charges. + Based on average shares outstanding. See Notes to Financial Statements. 14 & 15 Merrill Lynch Global Utility Fund, Inc., November 30, 1999 FINANCIAL HIGHLIGHTS (concluded)
Class B The following per share data and ratios have been derived ---------------------------------------------------- from information provided in the financial statements. For the Year Ended November 30, ---------------------------------------------------- Increase (Decrease) in Net Asset Value: 1999+ 1998+ 1997+ 1996+ 1995 =================================================================================================================================== Per Share Net asset value, beginning of year ..................... $ 19.42 $ 16.93 $ 15.05 $ 13.47 $ 12.04 Operating -------- -------- -------- -------- -------- Performance: Investment income--net ................................. .20 .27 .35 .39 .38 Realized and unrealized gain on investments and foreign currency transactions--net ..................... 1.15 3.74 2.35 1.84 1.44 -------- -------- -------- -------- -------- Total from investment operations ....................... 1.35 4.01 2.70 2.23 1.82 -------- -------- -------- -------- -------- Less dividends and distributions: Investment income--net ............................... (.20) (.28) (.37) (.41) (.39) Realized gain on investments--net .................... (1.47) (1.24) (.45) (.24) -- -------- -------- -------- -------- -------- Total dividends and distributions ...................... (1.67) (1.52) (.82) (.65) (.39) -------- -------- -------- -------- -------- Net asset value, end of year ........................... $ 19.10 $ 19.42 $ 16.93 $ 15.05 $ 13.47 ======== ======== ======== ======== ======== =================================================================================================================================== Total Investment Based on net asset value per share ..................... 7.41% 25.40% 18.77% 17.07% 15.38% Return:* ======== ======== ======== ======== ======== =================================================================================================================================== Ratios to Average Expenses ............................................... 1.59% 1.59% 1.59% 1.61% 1.68% Net Assets: ======== ======== ======== ======== ======== Investment income--net ................................. 1.06% 1.48% 2.22% 2.74% 2.95% ======== ======== ======== ======== ======== =================================================================================================================================== Supplemental Net assets, end of year (in thousands) ................. $299,912 $327,589 $301,459 $335,487 $381,098 Data: ======== ======== ======== ======== ======== Portfolio turnover ..................................... 7.43% 6.56% 6.23% 5.03% 2.92% ======== ======== ======== ======== ======== ===================================================================================================================================
Class C The following per share data and ratios have been derived ---------------------------------------------------- from information provided in the financial statements. For the Year Ended November 30, ---------------------------------------------------- Increase (Decrease) in Net Asset Value: 1999+ 1998+ 1997+ 1996+ 1995 =================================================================================================================================== Per Share Net asset value, beginning of year ..................... $ 19.37 $ 16.89 $ 15.03 $ 13.46 $ 12.05 Operating -------- -------- -------- -------- -------- Performance: Investment income--net ................................. .19 .25 .33 .38 .39 Realized and unrealized gain on investments and foreign currency transactions--net ..................... 1.14 3.73 2.35 1.84 1.43 -------- -------- -------- -------- -------- Total from investment operations ....................... 1.33 3.98 2.68 2.22 1.82 -------- -------- -------- -------- -------- Less dividends and distributions: Investment income--net ............................... (.19) (.26) (.37) (.41) (.41) Realized gain on investments--net .................... (1.47) (1.24) (.45) (.24) -- -------- -------- -------- -------- -------- Total dividends and distributions ...................... (1.66) (1.50) (.82) (.65) (.41) -------- -------- -------- -------- -------- Net asset value, end of year ........................... $ 19.04 $ 19.37 $ 16.89 $ 15.03 $ 13.46 ======== ======== ======== ======== ======== =================================================================================================================================== Total Investment Based on net asset value per share ..................... 7.34% 25.34% 18.66% 17.03% 15.38% Return:* ======== ======== ======== ======== ======== =================================================================================================================================== Ratios to Average Expenses ............................................... 1.65% 1.64% 1.63% 1.66% 1.73% Net Assets: ======== ======== ======== ======== ======== Investment income--net ................................. 1.02% 1.38% 2.07% 2.65% 2.85% ======== ======== ======== ======== ======== =================================================================================================================================== Supplemental Net assets, end of year (in thousands) ................. $ 8,381 $ 7,954 $ 5,486 $ 3,325 $ 2,072 Data: ======== ======== ======== ======== ======== Portfolio turnover ..................................... 7.43% 6.56% 6.23% 5.03% 2.92% ======== ======== ======== ======== ======== ===================================================================================================================================
Class D The following per share data and ratios have been derived ---------------------------------------------------- from information provided in the financial statements. For the Year Ended November 30, ---------------------------------------------------- Increase (Decrease) in Net Asset Value: 1999+ 1998+ 1997+ 1996+ 1995 =================================================================================================================================== Per Share Net asset value, beginning of year ..................... $ 19.49 $ 16.98 $ 15.10 $ 13.55 $ 12.09 Operating -------- -------- -------- -------- -------- Performance: Investment income--net ................................. .30 .36 .43 .50 .52 Realized and unrealized gain on investments and foreign currency transactions--net ..................... 1.15 3.77 2.35 1.79 1.40 -------- -------- -------- -------- -------- Total from investment operations ....................... 1.45 4.13 2.78 2.29 1.92 -------- -------- -------- -------- -------- Less dividends and distributions: Investment income--net ............................... (.30) (.38) (.45) (.50) (.46) Realized gain on investments--net .................... (1.47) (1.24) (.45) (.24) -- -------- -------- -------- -------- -------- Total dividends and distributions ...................... (1.77) (1.62) (.90) (.74) (.46) -------- -------- -------- -------- -------- Net asset value, end of year ........................... $ 19.17 $ 19.49 $ 16.98 $ 15.10 $ 13.55 ======== ======== ======== ======== ======== =================================================================================================================================== Total Investment Based on net asset value per share ..................... 7.96% 26.09% 19.35% 17.45% 16.21% Return:* ======== ======== ======== ======== ======== =================================================================================================================================== Ratios to Average Expenses ............................................... 1.07% 1.07% 1.06% 1.07% 1.15% Net Assets: ======== ======== ======== ======== ======== Investment income--net ................................. 1.60% 1.97% 2.70% 3.30% 3.36% ======== ======== ======== ======== ======== =================================================================================================================================== Supplemental Net assets, end of year (in thousands) ................. $ 14,747 $ 11,541 $ 6,935 $ 4,365 $ 1,516 Data: ======== ======== ======== ======== ======== Portfolio turnover ..................................... 7.43% 6.56% 6.23% 5.03% 2.92% ======== ======== ======== ======== ======== ===================================================================================================================================
* Total investment returns exclude the effects of sales charges. + Based on average shares outstanding. See Notes to Financial Statements. 16 & 17 Merrill Lynch Global Utility Fund, Inc., November 30, 1999 NOTES TO FINANCIAL STATEMENTS 1. Significant Accounting Policies: Merrill Lynch Global Utility Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Fund's financial statements are prepared in accordance with generally accepted accounting principles, which may require the use of management accruals and estimates. The Fund offers four classes of shares under the Merrill Lynch Select Pricingsm System. Shares of Class A and Class D are sold with a front-end sales charge. Shares of Class B and Class C may be subject to a contingent deferred sales charge. All classes of shares have identical voting, dividend, liquidation and other rights and the same terms and conditions, except that Class B, Class C and Class D Shares bear certain expenses related to the account maintenance of such shares, and Class B and Class C Shares also bear certain expenses related to the distribution of such shares. Each class has exclusive voting rights with respect to matters relating to its account maintenance and distribution expenditures. The following is a summary of significant accounting policies followed by the Fund. (a) Valuation of securities--Portfolio securities that are traded on stock exchanges are valued at the last sale price on the exchange on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Securities traded in the over-the-counter market are valued at the last available bid price prior to the time of valuation. In cases where securities are traded on more than one exchange, the securities are valued on the exchange designated by or under the authority of the Board of Directors as the primary market. Securities that are traded both in the over-the-counter market and on a stock exchange are valued according to the broadest and most representative market. Options written or purchased are valued at the last sale price in the case of exchange-traded options. In the case of options traded in the over-the-counter market, valuation is the last asked price (options written) or the last bid price (options purchased). Short-term securities are valued at amortized cost, which approximates market value. Other investments, including futures contracts and related options, are stated at market value. Securities and assets for which market value quotations are not available are valued at their fair value as determined in good faith by or under the direction of the Fund's Board of Directors. (b) Foreign currency transactions--Transactions denominated in foreign currencies are recorded at the exchange rate prevailing when recognized. Assets and liabilities denominated in foreign currencies are valued at the exchange rate at the end of the period. Foreign currency transactions are the result of settling (realized) or valuing (unrealized) assets or liabilities expressed in foreign currencies into US dollars. Realized and unrealized gains or losses from investments include the effects of foreign exchange rates on investments. (c) Derivative financial instruments--The Fund may engage in various portfolio strategies to seek to increase its return by hedging its portfolio against adverse movements in the equity, debt and currency markets. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. o Options--The Fund is authorized to write and purchase call options and put options. When the Fund writes an option, an amount equal to the premium received by the Fund is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked to market to reflect the current market value of the option written. When a security is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the security acquired or deducted from (or added to) the proceeds of the security sold. When an option expires (or the Fund enters into a closing transaction), the Fund realizes a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premium paid or received). Written and purchased options are non-income producing investments. o Financial futures contracts--The Fund may purchase or sell financial futures contracts and options on such futures contracts. Upon entering into a contract, the Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. o Forward foreign exchange contracts--The Fund is authorized to enter into forward foreign exchange contracts as a hedge against either specific transactions or portfolio positions. Such contracts are not entered on the Fund's records. However, the effect on operations is recorded from the date the Fund enters into such contracts. Premium or discount is amortized over the life of the contracts. o Foreign currency options and futures--The Fund may also purchase or sell listed or over-the-counter foreign currency options, foreign currency futures and related options on foreign currency futures as a short or long hedge against possible variations in foreign exchange rates. Such transactions may be effected with respect to hedges on non-US dollar denominated securities owned by the Fund, sold by the Fund but not yet delivered, or committed or anticipated to be purchased by the Fund. (d) Income taxes--It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no Federal income tax provision is required. Under the applicable foreign tax law, a withholding tax may be imposed on interest, dividends and capital gains at various rates. (e) Security transactions and investment income--Security transactions are recorded on the dates the transactions are entered into (the trade dates). Interest income (including amortization of discount) is recognized on the accrual basis. Dividend income is recorded on the ex-dividend dates. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Fund has determined the ex-dividend dates. Realized gains and losses on security transactions are determined on the identified cost basis. (f) Prepaid registration fees--Prepaid registration fees are charged to expense as the related shares are issued. (g) Dividends and distributions--Dividends and distributions paid by the Fund are recorded on the ex-dividend dates. (h) Reclassification--Generally accepted accounting principles require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. Accordingly, current year's permanent book/tax differences of $44,371 have been reclassified between undistributed net investment income and undistributed net realized capital gains. These reclassifications have no effect on net assets or net asset values per share. 2. Investment Advisory Agreement and Transactions with Affiliates: The Fund has entered into an Investment Advisory Agreement with Merrill Lynch Asset Management, L.P. ("MLAM"). The general partner of MLAM is Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the limited partner. The Fund has also entered into a Distribution Agreement and Distribution Plans with Merrill Lynch Funds Distributor ("MLFD" or "the Distributor"), a division of Princeton Funds Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary of Merrill Lynch Group, Inc. MLAM is responsible for the management of the Fund's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operation of the Fund. For such services, the Fund pays a monthly fee of .60%, on an annual basis, of the average daily value of the Fund's net assets. Pursuant to the Distribution Plans adopted by the Fund in accordance with Rule 12b-1 under the Investment Company 18 & 19 Merrill Lynch Global Utility Fund, Inc., November 30, 1999 NOTES TO FINANCIAL STATEMENTS (concluded) Act of 1940, the Fund pays the Distributor ongoing account maintenance and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the shares as follows: - -------------------------------------------------------------------------------- Account Distribution Maintenance Fee Fee - -------------------------------------------------------------------------------- Class B .................................... .25% .50% Class C .................................... .25% .55% Class D .................................... .25% -- - -------------------------------------------------------------------------------- Pursuant to a sub-agreement with the Distributor, Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a subsidiary of ML & Co., also provides account maintenance and distribution services to the Fund. The ongoing account maintenance fee compensates the Distributor and MLPF&S for providing account maintenance services to Class B, Class C and Class D shareholders. The ongoing distribution fee compensates the Distributor and MLPF&S for providing shareholder and distribution-related services to Class B and Class C shareholders. For the year ended November 30, 1999, MLFD earned underwriting discounts and direct commissions and MLPF&S earned dealer concessions on sales of the Fund's Class A and Class D Shares as follows: - -------------------------------------------------------------------------------- MLFD MLPF&S - -------------------------------------------------------------------------------- Class A .................................... $ 174 $ 2,241 Class D .................................... $ 1,707 $18,387 - -------------------------------------------------------------------------------- For the year ended November 30, 1999, MLPF&S received contingent deferred sales charges of $171,253 and $5,997, relating to transactions in Class B Shares and Class C Shares, respectively. In addition, MLPF&S received $25,030 in commissions on the execution of portfolio security transactions for the Fund for the year ended November 30, 1999. Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is the Fund's transfer agent. Accounting services are provided to the Fund by MLAM at cost. Certain officers and/or directors of the Fund are officers and/or directors of MLAM, PSI, FDS, PFD, and/or ML & Co. 3. Investments: Purchases and sales of investments, excluding short-term securities, for the year ended November 30, 1999 were $26,304,164 and $50,476,091, respectively. Net realized gains (losses) for the year ended November 30, 1999 and net unrealized gains (losses) as of November 30, 1999 were as follows: - -------------------------------------------------------------------------------- Realized Unrealized Gains (Losses) Gains (Losses) - -------------------------------------------------------------------------------- Long-term investments ...................... $ 13,186,364 $ 170,107,190 Foreign currency transactions .............. (44,364) (4,482) ------------- ------------- Total ...................................... $ 13,142,000 $ 170,102,708 ============= ============= - -------------------------------------------------------------------------------- As of November 30, 1999, net unrealized appreciation for Federal income tax purposes aggregated $170,107,190, of which $174,465,088 related to appreciated securities and $4,357,898 related to depreciated securities. The aggregate cost of investments at November 30, 1999 for Federal income tax purposes was $191,919,791. 4. Capital Share Transactions: Net decrease in net assets derived from capital share transactions was $19,934,887 and $16,180,815 for the years ended November 30, 1999 and November 30, 1998, respectively. Transactions in capital shares for each class were as follows: - -------------------------------------------------------------------------------- Class A Shares for the Year Dollar Ended November 30, 1999 Shares Amount - -------------------------------------------------------------------------------- Shares sold ................................ 495,258 $ 9,307,178 Shares issued to shareholders in reinvestment of dividends and distributions .......................... 171,563 3,145,784 -------- ------------ Total issued ............................... 666,821 12,452,962 Shares redeemed ............................ (821,807) (15,270,384) -------- ------------ Net decrease ............................... (154,986) $ (2,817,422) ======== ============ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Class A Shares for the Year Dollar Ended November 30, 1998 Shares Amount - -------------------------------------------------------------------------------- Shares sold ................................ 431,597 $ 7,895,940 Shares issued to shareholders in reinvestment of dividends and distributions .......................... 179,840 2,998,839 -------- ------------ Total issued ............................... 611,437 10,894,779 Shares redeemed ............................ (744,730) (13,435,233) -------- ------------ Net decrease ............................... (133,293) $ (2,540,454) ======== ============ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Class B Shares for the Year Dollar Ended November 30, 1999 Shares Amount - -------------------------------------------------------------------------------- Shares sold ................................ 2,192,359 $ 40,896,557 Shares issued to shareholders in reinvestment of dividends and distributions .......................... 1,193,461 21,827,524 ---------- ------------ Total issued ............................... 3,385,820 62,724,081 Automatic conversion of shares ............. (57,842) (1,073,457) Shares redeemed ............................ (4,489,430) (82,728,308) ---------- ------------ Net decrease ............................... (1,161,452) $(21,077,684) ========== ============ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Class B Shares for the Year Dollar Ended November 30, 1998 Shares Amount - -------------------------------------------------------------------------------- Shares sold ................................ 1,798,516 $ 32,421,070 Shares issued to shareholders in reinvestment of dividends and distributions .......................... 1,251,468 20,655,107 ---------- ------------ Total issued ............................... 3,049,984 53,076,177 Automatic conversion of shares ............. (55,904) (1,011,761) Shares redeemed ............................ (3,938,213) (70,455,451) ---------- ------------ Net decrease ............................... (944,133) $(18,391,035) ========== ============ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Class C Shares for the Year Dollar Ended November 30, 1999 Shares Amount - -------------------------------------------------------------------------------- Shares sold ................................ 216,881 $ 4,042,518 Shares issued to shareholders in reinvestment of dividends and distributions .......................... 34,001 620,183 ---------- ------------ Total issued ............................... 250,882 4,662,701 Shares redeemed ............................ (221,267) (4,058,280) ---------- ------------ Net increase ............................... 29,615 $ 604,421 ========== ============ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Class C Shares for the Year Dollar Ended November 30, 1998 Shares Amount - -------------------------------------------------------------------------------- Shares sold ................................ 160,601 $ 2,882,085 Shares issued to shareholders in reinvestment of dividends and distributions .......................... 25,572 421,385 ---------- ------------ Total issued ............................... 186,173 3,303,470 Shares redeemed ............................ (100,433) (1,783,048) ---------- ------------ Net increase ............................... 85,740 $ 1,520,422 ========== ============ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Class D Shares for the Year Dollar Ended November 30, 1999 Shares Amount - -------------------------------------------------------------------------------- Shares sold ................................ 328,342 $ 6,144,143 Automatic conversion of shares ............. 57,639 1,073,457 Shares issued to shareholders in reinvestment of dividends and distributions .......................... 53,368 979,083 ---------- ------------ Total issued ............................... 439,349 8,196,683 Shares redeemed ............................ (262,039) (4,840,885) ---------- ------------ Net increase ............................... 177,310 $ 3,355,798 ========== ============ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Class D Shares for the Year Dollar Ended November 30, 1998 Shares Amount - -------------------------------------------------------------------------------- Shares sold ................................ 476,893 $ 8,231,578 Automatic conversion of shares ............. 55,711 1,011,761 Shares issued to shareholders in reinvestment of dividends and distributions .......................... 33,182 554,571 ---------- ------------ Total issued ............................... 565,786 9,797,910 Shares redeemed ............................ (382,059) (6,567,658) ---------- ------------ Net increase ............................... 183,727 $ 3,230,252 ========== ============ - -------------------------------------------------------------------------------- 5. Subsequent Event: On December 16, 1999, the Fund's Board of Directors declared an ordinary income dividend and a long-term capital gains distribution payable on December 22, 1999 to shareholders of record as of December 16, 1999 as follows: - -------------------------------------------------------------------------------- Ordinary Long-Term Income Capital Gains - -------------------------------------------------------------------------------- Class A .................................... $ .037015 $ .872045 Class B .................................... .012660 .872045 Class C .................................... .010693 .872045 Class D .................................... .029101 .872045 - -------------------------------------------------------------------------------- 20 & 21 Merrill Lynch Global Utility Fund, Inc., November 30, 1999 INDEPENDENT AUDITORS' REPORT The Board of Directors and Shareholders, Merrill Lynch Global Utility Fund, Inc.: We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Merrill Lynch Global Utility Fund, Inc. as of November 30, 1999, the related statements of operations for the year then ended and changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and the financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at November 30, 1999 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of Merrill Lynch Global Utility Fund, Inc. as of November 30, 1999, the results of its operations, the changes in its net assets, and the financial highlights for the respective stated periods in conformity with generally accepted accounting principles. Deloitte & Touche llp Princeton, New Jersey January 10, 2000 IMPORTANT TAX INFORMATION (unaudited) The following information summarizes the distributions paid by Merrill Lynch Global Utility Fund, Inc. to all classes of shares during the fiscal year ended November 30, 1999:
- ---------------------------------------------------------------------------------------------------------------------------- Domestic Domestic Foreign Record Payable Qualifying Non-Qualifying Foreign Source Total Withholding Taxes Date Date Ordinary Income Income Income Ordinary Income (Per Share) - ---------------------------------------------------------------------------------------------------------------------------- 12/17/98 12/28/98 88.79% 4.02% 7.19% 100.00% $.005031 - ---------------------------------------------------------------------------------------------------------------------------- 4/13/99 4/21/99 100.00% -- -- 100.00% $.005266 - ---------------------------------------------------------------------------------------------------------------------------- 7/07/99 7/15/99 100.00% -- -- 100.00% $.009603 - ---------------------------------------------------------------------------------------------------------------------------- 10/04/99 10/13/99 100.00% -- -- 100.00% $.009278 - ----------------------------------------------------------------------------------------------------------------------------
In addition, the Fund paid a long-term capital gains distribution of $1.439029 per share to shareholders of record as of December 17, 1998. Please retain this information for your records. PORTFOLIO INFORMATION (unaudited) Worldwide Investments as of November 30, 1999 Ten Largest Holdings Percent of (Equity Investments) Net Assets Telecom Italia SpA* .......................................... 8.9% Telefonica SA* ............................................... 7.2 Telecom Italia Mobile (TIM) SpA .............................. 6.0 Vodafone AirTouch PLC (ADR) .................................. 5.1 SBC Communications Inc. ...................................... 4.6 British Telecommunications PLC ............................... 3.7 Vivendi ...................................................... 3.6 Global Crossing Ltd. ......................................... 2.7 MCI WorldCom Inc. ............................................ 2.5 BellSouth Corporation ........................................ 2.3 * Includes combined holdings. 22 & 23 This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Fund unless accompanied or preceded by the Fund's current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change. Merrill Lynch Global Utility Fund, Inc. Box 9011 Princeton, NJ 08543-9011 11693--11/99 [RECYCLE LOGO] Printed on post-consumer recycled paper -----END PRIVACY-ENHANCED MESSAGE-----