-----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, JnS4Qo8/49B4GxexLRsIrpXWaB5uETm9HFio4tzcMADb/aZULTcPCBS3jjOHSoDx 5KwxEoZJhr8rPDlF3Ynmgw== 0001005477-99-001672.txt : 19990409 0001005477-99-001672.hdr.sgml : 19990409 ACCESSION NUMBER: 0001005477-99-001672 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990228 FILED AS OF DATE: 19990408 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: 99589372 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 QUARTERLY REPORT MERRILL LYNCH GLOBAL UTILITY FUND, INC. STRATEGIC Performance [GRAPHIC OMITTED] Quarterly Report February 28, 1999 MERRILL LYNCH GLOBAL UTILITY FUND, INC. Sector Diversification As a Percentage of Equities as of February 28, 1999 Pie graph depicting the following percentages: Telecommunications 54.7% Utilities--Electric 28.9% Utilities--Gas 11.1% Utilities--Water 5.3% Geographical Diversification As a Percentage of Equities as of February 28, 1999 Pie graph depicting the following percentages: Europe 52.4% United States 39.6% Asia/Pacific Basin 5.1% Americas (Ex-US) 2.9% Merrill Lynch Global Utility Fund, Inc., February 28, 1999 DEAR SHAREHOLDER Investor attitudes shifted markedly during the quarter ended February 28, 1999. The US economy demonstrated surprising strength as 1998 drew to a close. As 1999 began, forecasts of a possible slowdown gave way to increasing expectations that the US economy could overheat. As a result, US long-term bond yields backed up to mid-summer 1998 levels as investors increasingly anticipated monetary policy tightening by the Federal Reserve Board. However, shortly after the February quarter's close, investor confidence returned as weaker-than-expected US employment statistics suggested that inflationary pressures would continue to be contained and that the central bank would not make major adjustments to its monetary policy. As 1999 unfolds, investor focus is likely to remain on the prospects for the US economy. For the health of the global economy overall, the ongoing recession in Japan is of great concern. At the same time, the difficulties in emerging economies such as Russia and Brazil remain. Progress in easing strains within the global financial system--combined with continued evidence of noninflationary economic growth--would likely provide an important element of stability to the financial markets. Portfolio Matters For the three-month period ended February 28, 1999, Merrill Lynch Global Utility Fund, Inc.'s Class A, Class B, Class C and Class D Shares had total returns of +2.67%, +2.49%, +2.50% and +2.63%, respectively. (Fund results shown do not reflect sales charges and would be lower if sales charges were included. Complete performance information can be found on pages 4 and 5 of this report to shareholders.) As measured by the unmanaged Financial Times/Standard & Poor's (FT/S&P)--Actuaries World Utility Index, US-based utility stocks outperformed global utility stocks for the quarter ended February 28, 1999. However, the outperformance was not broad-based across individual industries. For instance, the domestic electric and natural gas stocks in the Standard & Poor's 500 (S&P 500) Index underperformed while the domestic telecommunications sector had both absolute and relative outperformance. This was in part the result of higher interest rate sensitivity of the domestic electric sector and the fact that the yield on the 30-year US Treasury bond rose from 5.08% on November 30, 1998 to 5.57% by February 28, 1999. The domestic natural gas sector, which is not as sensitive to interest rates, was negatively impacted by the continuing above-normal winter temperatures that have resulted in less natural gas usage and higher storage levels. On the other hand, the domestic telecommunications sector benefited from the continuation of earnings growth as fourth quarter and year-end results were reported in January. Moreover, the two largest telecommunications companies in the S&P Utility Index, both of which are Fund holdings, had spectacular performance, as measured by market capitalization. AT&T Corp.'s shares rose 32% and MCI WorldCom Inc.'s increased by nearly 40%. On a regional basis, Europe remained the best-performing market for utility investments during the three-month period ended February 28, 1999. Performance was primarily driven by countries such as Germany, France, Switzerland, Norway and Italy. Other important countries in the region that had positive total returns included the United Kingdom, Denmark, Spain and Portugal. During the February quarter, there were several notable events that drove share prices higher in Europe. First, the UK-based cellular company Vodafone Group PLC, a Fund holding, announced that it would merge with US-based cellular company, Airtouch. Both companies have significant operations outside of their home base and are viewed as being outstanding providers of cellular services. Thus, the outlook for Vodafone, which was already robust, is viewed as being even better following the completion of the proposed merger. Second, British Telecommunications PLC, also a Fund holding, reported outstanding third fiscal quarter results in early February. The company reported profit growth of 13%. Soaring demand for cellular, Internet and data services drove the bottom-line results. Investors reacted to the news by pushing the stock price higher by 11%. The investment viewpoint was that the earnings of the company would be negatively impacted by a slowing UK economy as well as increased competition taking away market share. When this proved not to be the case, incumbent telephone providers around the globe adopted a more positive outlook. Third, the Italy-based company Olivetti SpA made an unsolicited bid for the ordinary shares of Telecom Italia SpA, a Fund holding. Olivetti, which is not a Fund holding, offers both mobile and fixed telecommunications services as well as information technology equipment and services. The proposed acquisition is currently considered hostile since the management of Telecom Italia is not in favor of the transaction. The buy-out price suggested by Olivetti is viewed as too low given the quality of the assets of the company and the prospects for the company's future. This proposed transaction is complicated by the fact that the Italian government owns 3.4% of Telecom Italia and the takeover laws that govern Italian companies prevent the potential acquiree from taking actions to thwart the competitor. There have been many statements and meetings from both sides, and it is not yet clear what the resolution will be. However, in our opinion, Telecom Italia and its associated companies are still attractively valued and the prospects for the future remain favorable. Depending on the outcome, this merger and acquisition activity may have an impact on other telecommunication operators in Europe. Emerging market utility performance remained mostly negative in the February quarter. According to the FT/S&P--Actuaries World Utility Index, Brazil, Hong Kong, China, Singapore, Indonesia and the Philippines all had negative total returns for the February quarter. Continued concern over the financial climate of several countries, coupled with slowing demand and little upward movement on tariffs, contributed to the negative returns. During the February quarter, we made no reductions or eliminations to the Fund's portfolio. However, we added two new holdings to the Fund's portfolio. Fortum Corporation, the IVO-Neste Group is a Finnish-based international energy company with operations in several Nordic countries. Natural gas and electricity are the company's two core businesses. We expect growth to be derived from a restructuring of assets, cost cutting and acquisitions in electricity distribution and generation in the company's region. We also added the shares of the US-based electric utility company FPL Group, Inc. to the portfolio. The company's principal subsidiary, Florida Power & Light, serves customers along most of the Atlantic coast. The stock weakened on regulatory rate concerns. Investor reaction appeared excessive, and we used it as an opportunity to buy shares in this high-quality electric utility company with an attractive dividend yield. 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/ Terry K. Glenn Terry K. Glenn President and Director /s/ Walter D. Rogers Walter D. Rogers Senior Vice President and Portfolio Manager March 30, 1999 2 & 3 Merrill Lynch Global Utility Fund, Inc., February 28, 1999 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 "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*
12 Month 3 Month Since Inception Total Return Total Return Total Return ============================================================================================== ML Global Utility Fund, Inc. Class A Shares +17.58% +2.67% +201.21% - ---------------------------------------------------------------------------------------------- ML Global Utility Fund, Inc. Class B Shares +16.63 +2.49 +182.71 - ---------------------------------------------------------------------------------------------- ML Global Utility Fund, Inc. Class C Shares +16.57 +2.50 +101.00 - ---------------------------------------------------------------------------------------------- ML Global Utility Fund, Inc. Class D Shares +17.24 +2.63 +106.02 ==============================================================================================
* 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 periods are Class A & Class B Shares, from 12/28/90 to 2/28/99 and Class C & Class D Shares, from 10/21/94 to 2/28/99. Average Annual Total Return % Return Without % Return With Sales Charge Sales Charge** ================================================================================ Class A Shares* ================================================================================ Year Ended 12/31/98 +25.60% +20.58% - -------------------------------------------------------------------------------- Five Years Ended 12/31/98 +14.67 +13.74 - -------------------------------------------------------------------------------- Inception (12/28/90) through 12/31/98 +15.08 +14.50 - -------------------------------------------------------------------------------- * Maximum sales charge is 4%. ** Assuming maximum sales charge. % Return % Return Without CDSC With CDSC** ================================================================================ Class B Shares* ================================================================================ Year Ended 12/31/98 +24.67% +20.67% - -------------------------------------------------------------------------------- Five Years Ended 12/31/98 +13.80 +13.80 - -------------------------------------------------------------------------------- Inception (12/28/90) through 12/31/98 +14.20 +14.20 - -------------------------------------------------------------------------------- * 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 12/31/98 +24.56% +23.56% - -------------------------------------------------------------------------------- Inception (10/21/94) through 12/31/98 +18.78 +18.78 - -------------------------------------------------------------------------------- * 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 12/31/98 +25.30% +20.29% - -------------------------------------------------------------------------------- Inception (10/21/94) through 12/31/98 +19.46 +18.30 - -------------------------------------------------------------------------------- * Maximum sales charge is 4%. ** Assuming maximum sales charge. 4 & 5 Merrill Lynch Global Utility Fund, Inc., February 28, 1999 SCHEDULE OF INVESTMENTS (in US dollars)
Percent Shares of Net COUNTRY Industries Held Common Stocks & Warrants Cost Value Assets =================================================================================================================================== Australia Telecommunications 721,400 Cable & Wireless Optus Limited $ 982,720 $ 1,584,861 0.4% ------------------------------------------------------------------------------------------------------------------ Utilities--Gas 1,215,673 Australian Gas Light Company Limited 3,368,022 7,966,202 2.0 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Australia 4,350,742 9,551,063 2.4 =================================================================================================================================== Austria Utilities--Gas 24,320 EVN AG 1,896,384 3,203,528 0.8 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Austria 1,896,384 3,203,528 0.8 =================================================================================================================================== Brazil Telecommunications 28,000 Embratel Participacoes SA (ADR) (b) 593,704 381,500 0.1 2,800 Tele Celular Sul Participacoes SA (ADR) (b) 45,069 45,150 0.0 9,333 Tele Centro Oeste Celular Participacoes SA (ADR) (b) 28,168 24,499 0.0 5,600 Tele Centro Sul Participacoes SA (ADR) (b) 327,620 224,000 0.1 560 Tele Leste Celular Participacoes SA (ADR) (b) 15,081 11,725 0.0 1,400 Tele Nordeste Celular Participacoes SA (ADR) (b) 20,801 21,350 0.0 560 Tele Norte Celular Participacoes SA (ADR) (b) 8,711 13,615 0.0 28,000 Tele Norte Leste Participacoes SA (ADR) (b) 431,194 280,000 0.1 5,600 Tele Sudeste Celular Participacoes SA (ADR) (b) 178,544 74,550 0.0 28,000 Telecomunicacoes Brasileiras SA--Telebras (ADR) (b) 2,167 4,813 0.0 1,400 Telemig Celular Participacoes SA (ADR) (b) 40,736 25,900 0.0 11,200 Telesp Celular Participacoes SA (ADR) (b) 360,556 235,200 0.1 28,000 Telesp Participacoes SA (ADR) (b) 1,057,399 462,000 0.1 ------------ ------------ ----- 3,109,750 1,804,302 0.5 ------------------------------------------------------------------------------------------------------------------ Utilities--Electric 300,000 Companhia Paranaense de Energia-Copel (ADR) (b) 5,400,000 1,350,000 0.3 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Brazil 8,509,750 3,154,302 0.8 =================================================================================================================================== Canada Telecommunications 81,900 BCT.Telus Communications Inc. 1,508,854 2,276,358 0.5 27,300 BCT.Telus Communications Inc. (A Shares) 502,951 713,512 0.2 ------------ ------------ ----- 2,011,805 2,989,870 0.7 ------------------------------------------------------------------------------------------------------------------ Utilities--Gas 200,000 TransCanada PipeLines Limited 3,147,485 2,762,500 0.7 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Canada 5,159,290 5,752,370 1.4 =================================================================================================================================== Denmark Telecommunications 160,000 Tele Danmark A/S (ADR) (b) 3,764,160 9,640,000 2.4 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Denmark 3,764,160 9,640,000 2.4 =================================================================================================================================== Finland Telecommunications 18,218 Sonera Group Oyj 160,197 312,967 0.1 ------------------------------------------------------------------------------------------------------------------ Utilities--Gas 495,000 Fortum Corporation, the IVO-Neste Group 3,139,431 2,651,604 0.6 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Finland 3,299,628 2,964,571 0.7 =================================================================================================================================== France Utilities--Water 68,074 Vivendi 7,476,968 17,747,147 4.4 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in France 7,476,968 17,747,147 4.4 =================================================================================================================================== Germany Telecommunications 24,300 Deutsche Telekom AG 462,162 1,114,978 0.3 6,843 Mannesmann AG 610,301 918,664 0.2 ------------ ------------ ----- 1,072,463 2,033,642 0.5 ------------------------------------------------------------------------------------------------------------------ Utilities--Electric 40,000 RWE AG 1,799,334 1,743,148 0.5 70,000 VEBA AG 2,284,445 3,734,375 0.9 4,000 Viag AG 1,764,306 2,135,246 0.5 ------------ ------------ ----- 5,848,085 7,612,769 1.9 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Germany 6,920,548 9,646,411 2.4 =================================================================================================================================== Hong Kong Utilities--Gas 158,455 Hong Kong and China Gas Company Ltd. 178,364 185,094 0.0 7,202 Hong Kong and China Gas Company Ltd. (Warrants) (a) 0 260 0.0 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks & Warrants in Hong Kong 178,364 185,354 0.0 =================================================================================================================================== Italy Telecommunications 2,775,000 Telecom Italia Mobile (TIM) SpA 2,012,515 18,642,239 4.6 1,505,555 Telecom Italia SpA 2,746,349 15,848,892 3.9 2,891,700 Telecom Italia SpA (Registered Non-Convertible) 5,447,174 19,521,447 4.8 ------------ ------------ ----- 10,206,038 54,012,578 13.3 ------------------------------------------------------------------------------------------------------------------ Utilities--Electric 462,000 AEM SpA 437,927 1,070,060 0.3 ------------------------------------------------------------------------------------------------------------------ Utilities--Gas 1,786,300 Italgas SpA 5,169,953 9,117,820 2.3 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Italy 15,813,918 64,200,458 15.9 =================================================================================================================================== Japan Telecommunications 290 Nippon Telegraph & Telephone Corporation (NTT) 2,475,448 2,390,996 0.6 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Japan 2,475,448 2,390,996 0.6 =================================================================================================================================== Mexico Telecommunications 35,000 Telefonos de Mexico, SA de CV (ADR) (b) 1,924,311 2,001,562 0.5 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Mexico 1,924,311 2,001,562 0.5 =================================================================================================================================== New Zealand Telecommunications 56,000 Telecom Corporation of New Zealand Limited (ADR) (b) 1,230,138 2,240,000 0.6 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in New Zealand 1,230,138 2,240,000 0.6 =================================================================================================================================== Philippines Telecommunications 188,000 Philippine Long Distance Telephone Company (ADR) (b) 4,077,062 4,465,000 1.1 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in the Philippines 4,077,062 4,465,000 1.1 =================================================================================================================================== Portugal Telecommunications 205,740 Portugal Telecom, SA (ADR) (b) 4,576,844 10,081,260 2.5 ------------------------------------------------------------------------------------------------------------------ Utilities--Electric 80,820 EDP--Electricidade de Portugal, SA (ADR) (b) 3,540,889 3,434,850 0.8 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Portugal 8,117,733 13,516,110 3.3 =================================================================================================================================== Spain Telecommunications 486,846 Telefonica, SA 5,492,570 22,231,492 5.5 ------------------------------------------------------------------------------------------------------------------ Utilities--Electric 259,200 Endesa, SA (ADR) (b) 2,556,672 6,836,400 1.7 46,000 HidroElectrica del Cantabrico, SA 1,553,961 2,360,604 0.6 323,500 Iberdrola, SA 2,035,162 5,060,260 1.2 ------------ ------------ ----- 6,145,795 14,257,264 3.5 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in Spain 11,638,365 36,488,756 9.0 ===================================================================================================================================
6 & 7 Merrill Lynch Global Utility Fund, Inc., February 28, 1999 SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
Percent Shares of Net COUNTRY Industries Held Common Stocks & Warrants Cost Value Assets =================================================================================================================================== United Kingdom Telecommunications 671,000 British Telecommunications PLC $ 4,688,465 $ 11,618,672 2.9% 225,000 Cable & Wireless PLC 2,867,544 3,076,057 0.7 88,000 Vodafone Group PLC (ADR) (b) 2,605,300 16,032,500 4.0 ------------ ------------ ----- 10,161,309 30,727,229 7.6 ------------------------------------------------------------------------------------------------------------------ Utilities--Electric 208,000 National Power PLC 1,723,671 1,652,545 0.4 370,000 PowerGen PLC 2,705,142 4,530,932 1.1 ------------ ------------ ----- 4,428,813 6,183,477 1.5 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in the United Kingdom 14,590,122 36,910,706 9.1 =================================================================================================================================== United States Telecommunications 46,000 AT&T Corp. 1,848,510 3,777,750 0.9 140,000 Ameritech Corporation 2,996,450 9,152,500 2.3 95,232 Bell Atlantic Corporation 2,819,655 5,469,888 1.3 183,600 BellSouth Corporation 2,702,773 8,491,500 2.1 108,000 Frontier Corporation 2,193,480 3,881,250 1.0 85,000 GTE Corporation 3,145,450 5,514,375 1.4 108,000 MCI WorldCom Inc. 3,572,937 8,910,000 2.2 139,800 SBC Communications Inc. 2,939,711 7,391,925 1.8 68,000 U S WEST, Inc. 1,895,186 3,625,250 0.9 ------------ ------------ ----- 24,114,152 56,214,438 13.9 ------------------------------------------------------------------------------------------------------------------ Utilities--Electric 156,000 Allegheny Energy, Inc. 4,213,210 4,631,250 1.1 87,200 BEC Energy 2,722,264 3,177,350 0.8 166,962 Cinergy Corp. 4,045,124 4,873,203 1.2 84,200 Consolidated Edison, Inc. 2,991,744 3,936,350 1.0 118,900 DTE Energy Company 4,092,463 4,696,550 1.2 85,000 Duke Energy Corporation 3,180,276 4,834,375 1.2 86,000 Edison International 1,925,397 2,193,000 0.5 106,000 Energy East Corporation 3,787,565 5,684,250 1.4 90,000 FPL Group, Inc. 5,071,746 4,629,375 1.1 127,300 GPU, Inc. 4,047,821 5,076,088 1.3 239,500 NIPSCO Industries, Inc. 3,715,746 6,212,031 1.5 124,000 New Century Energies, Inc. 3,798,642 5,029,750 1.2 140,500 PECO Energy Company 4,344,731 4,978,969 1.2 183,000 PacifiCorp. 3,657,980 3,282,563 0.8 75,200 Reliant Energy, Inc. 1,840,708 2,016,300 0.5 91,200 The Southern Company 2,022,770 2,285,700 0.6 68,000 TECO Energy, Inc. 1,789,080 1,470,500 0.4 100,000 Texas Utilities Company 3,506,000 4,243,750 1.1 ------------ ------------ ----- 60,753,267 73,251,354 18.1 ------------------------------------------------------------------------------------------------------------------ Utilities--Gas 95,000 The Coastal Corporation 1,262,602 3,040,000 0.7 40,000 Enron Corporation 1,842,108 2,600,000 0.6 130,000 KeySpan Energy 3,371,550 3,445,000 0.9 168,000 Questar Corporation 2,475,460 3,003,000 0.7 46,300 Sonat Inc. 1,537,769 1,171,969 0.3 60,000 The Williams Companies, Inc. 1,978,230 2,220,000 0.6 ------------ ------------ ----- 12,467,719 15,479,969 3.8 ------------------------------------------------------------------------------------------------------------------ Utilities--Water 86,200 Philadelphia Suburban Corporation 1,869,463 1,858,688 0.5 ------------------------------------------------------------------------------------------------------------------ Total Common Stocks in the United States 99,204,601 146,804,449 36.3 =================================================================================================================================== Total Investments in Common Stocks & Warrants 200,627,532 370,862,783 91.7 =================================================================================================================================== Face Amount Short-Term Securities =================================================================================================================================== Commercial $18,125,000 General Electric Capital Corp., 4.875% Paper* due 3/01/1999 18,120,091 18,120,091 4.5 ------------------------------------------------------------------------------------------------------------------ US Government 15,000,000 Federal Home Loan Mortgage Corporation, 4.75% Agency due 3/15/1999 14,968,333 14,968,333 3.7 Obligations* =================================================================================================================================== Total Investments in Short-Term Securities 33,088,424 33,088,424 8.2 =================================================================================================================================== Total Investments $233,715,956 403,951,207 99.9 ============ Other Assets Less Liabilities 314,582 0.1 ------------ ----- Net Assets $404,265,789 100.0% ============ ===== =================================================================================================================================== Net Asset Class A--Based on net assets of $43,043,373 and 2,328,386 Value: shares outstanding $ 18.49 ============ Class B--Based on net assets of $336,720,190 and 18,287,449 shares outstanding $ 18.41 ============ Class C--Based on net assets of $10,273,143 and 559,569 shares outstanding $ 18.36 ============ Class D--Based on net assets of $14,229,083 and 769,610 shares outstanding $ 18.49 ============ ===================================================================================================================================
(a) Warrants entitle the Fund to purchase a predetermined number of shares of Common Stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date. (b) American Depositary Receipts (ADR). * Commercial Paper and certain US Government Agency Obligations are traded on a discount basis; the interest rates shown reflect the discount rates paid at the time of purchase by the Fund. 8 & 9 Merrill Lynch Global Utility Fund, Inc., February 28, 1999 PORTFOLIO INFORMATION Worldwide Investments as of February 28, 1999 Ten Largest Holdings Percent of (Equity Investments) Net Assets Telefonica, SA ..................................... 5.5% Telecom Italia SpA (Registered Non-Convertible) .... 4.8 Telecom Italia Mobile (TIM) SpA .................... 4.6 Vivendi ............................................ 4.4 Vodafone Group PLC (ADR) ........................... 4.0 Telecom Italia SpA ................................. 3.9 British Telecommunications PLC ..................... 2.9 Portugal Telecom, SA (ADR) ......................... 2.5 Tele Danmark A/S (ADR) ............................. 2.4 Ameritech Corporation .............................. 2.3 Additions FPL Group, Inc. Fortum Corporation, the IVO-Neste Group 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 Walter D. Rogers, Senior Vice President and Portfolio Manager Donald C. Burke, Vice President and Treasurer Thomas D. Jones, III, Secretary - -------------------------------------------------------------------------------- Gerald M. Richard, Treasurer and Norman R. Harvey, Senior Vice President of Merrill Lynch Global Utility Fund, Inc. have recently retired. Their colleagues at Merrill Lynch Asset Management, L.P. join the Fund's Board of Directors in wishing Mr. Richard and Mr. Harvey well in their retirements. - -------------------------------------------------------------------------------- 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 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--2/99 [RECYCLE LOGO] Printed on post-consumer recycled paper -----END PRIVACY-ENHANCED MESSAGE-----