UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08476
The Gabelli Global Multimedia Trust Inc.
-----------------------------------------------------------------
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
-------------------------------------------------------
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
-------------------------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
---------------
Date of fiscal year end: December 31
------------
Date of reporting period: December 31, 2005
------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
[LOGO]
THE GABELLI
GLOBAL
MULTIMEDIA TRUST INC.
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
Annual Report
December 31, 2005
TO OUR SHAREHOLDERS,
The Sarbanes-Oxley Act requires a fund's principal executive and financial
officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio manager's commentary
and subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.
Because we do not want our portfolio managers to eliminate their opinions
and/or restrict their commentary to historical facts, we have separated their
commentary from the financial statements and investment portfolio and have sent
it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com/funds.
Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2005.
COMPARATIVE RESULTS
--------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2005 (a)
SINCE
INCEPTION
QUARTER 1 YEAR 3 YEAR 5 YEAR 10 YEAR (11/15/94)
------- ------ ------ ------ ------- ---------
GABELLI GLOBAL MULTIMEDIA TRUST
NAV RETURN (b) .................................. (1.25)% 0.83% 17.28% 0.37% 11.14% 11.29%
INVESTMENT RETURN (c) ........................... (0.15) 0.70 18.89 0.96 11.66 10.42
MSCI World Free Index ............................. 3.06 9.49 18.69 2.18 7.02 8.23(d)
Nasdaq Composite Index ............................ 2.49 1.37 18.20 (2.25) 7.68 9.98
Lipper Global Multi-Cap Growth Fund Average ....... 3.81 11.60 20.42 2.90 9.93 10.10
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE. WHEN SHARES ARE SOLD, THEY MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE
PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE
INFORMATION AS OF THE MOST RECENT MONTH END. PERFORMANCE FIGURES FOR
PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. INVESTORS SHOULD CONSIDER
THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND
CAREFULLY BEFORE INVESTING. THE MORGAN STANLEY CAPITAL INTERNATIONAL
(MSCI) WORLD FREE AND NASDAQ COMPOSITE INDICES ARE UNMANAGED INDICATORS OF
STOCK MARKET PERFORMANCE. THE LIPPER AVERAGE REFLECTS THE AVERAGE
PERFORMANCE OF OPEN-END MUTUAL FUNDS CLASSIFIED IN THIS PARTICULAR
CATEGORY. DIVIDENDS ARE CONSIDERED REINVESTED EXCEPT FOR THE MSCI WORLD
FREE INDEX AND THE NASDAQ COMPOSITE INDEX.
(b) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN NET ASSET
VALUE ("NAV"), REINVESTMENT OF DISTRIBUTIONS AT NAV ON THE EX- DIVIDEND
DATE, ADJUSTMENTS FOR RIGHTS OFFERINGS, AND ARE NET OF EXPENSES. SINCE
INCEPTION RETURN IS BASED ON AN INITIAL NET ASSET VALUE OF $7.50.
(c) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN CLOSING MARKET
VALUES ON THE NEW YORK STOCK EXCHANGE, REINVESTMENT OF DISTRIBUTIONS AND
ADJUSTMENTS FOR RIGHTS OFFERINGS. SINCE INCEPTION RETURN BASED ON INITIAL
OFFERING PRICE OF $7.50.
(d) FROM NOVEMBER 30, 1994, THE DATE CLOSEST TO THE TRUST'S INCEPTION FOR
WHICH DATA IS AVAILABLE.
--------------------------------------------------------------------------------
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
February 13, 2006
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total
investments as of December 31, 2005:
Entertainment ....................................................... 19.5%
Publishing .......................................................... 13.8%
Hotels and Gaming ................................................... 11.3%
Broadcasting ........................................................ 11.2%
Cable ............................................................... 8.8%
Telecommunications: Regional ........................................ 8.2%
Telecommunications: National ........................................ 4.7%
Computer Software and Services ...................................... 4.2%
Wireless Communications ............................................. 4.1%
Equipment ........................................................... 2.4%
Telecommunications: Long Distance ................................... 2.3%
Electronics ......................................................... 1.9%
U.S. Government Obligations ......................................... 1.5%
Diversified Industrial .............................................. 1.5%
Consumer Services ................................................... 1.6%
Business Services ................................................... 1.0%
Satellite ........................................................... 0.9%
Business Services: Advertising ...................................... 0.6%
Energy and Utilities ................................................ 0.3%
Consumer Products ................................................... 0.1%
Food and Beverage ................................................... 0.1%
Communications Equipment ............................................ 0.0%
-----
100.0%
=====
THE GABELLI GLOBAL MULTIMEDIA TRUST INC. (THE "TRUST") FILES A COMPLETE SCHEDULE
OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE FIRST AND THIRD QUARTERS OF EACH
FISCAL YEAR ON FORM N-Q, THE LAST OF WHICH WAS FILED FOR THE QUARTER ENDED
SEPTEMBER 30, 2005. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM
OR BY CALLING THE TRUST AT 800-GABELLI (800-422-3554). THE TRUST'S FORM N-Q IS
AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND
COPIED AT THE COMMISSION'S PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION
ON THE OPERATION OF THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING
1-800-SEC-0330.
PROXY VOTING: The Trust files Form N-PX with its complete proxy voting record
for the 12 months ended June 30th, no later than August 31st of each year. A
description of the Trust's proxy voting policies, procedures, and how the Trust
voted proxies relating to portfolio securities are available without charge,
upon request, (i) by calling 800-GABELLI (800-422-3554); (ii) by writing to The
Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; and (iii) by visiting
the Securities and Exchange Commission's website at www.sec.gov.
2
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2005
MARKET
SHARES COST VALUE
--------- ------------ ------------
COMMON STOCKS -- 97.4%
COPYRIGHT/CREATIVITY COMPANIES -- 44.5%
BUSINESS SERVICES: ADVERTISING -- 0.6%
10,000 Clear Channel Outdoor
Holdings Inc., Cl. A+ ........................... $ 192,300 $ 200,500
4,000 Donnelley (R.H.) Corp.+ ........................... 47,531 246,480
20,000 Harte-Hanks Inc. .................................. 147,611 527,800
4,200 Havas SA .......................................... 20,733 18,149
5,200 JC Decaux SA+ ..................................... 119,970 121,278
2,000 Publicis Groupe ................................... 13,970 69,613
------------ ------------
542,115 1,183,820
------------ ------------
COMPUTER HARDWARE -- 0.0%
1,000 Apple Computer Inc.+ .............................. 70,783 71,890
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 4.2%
53,333 Activision Inc.+ .................................. 576,596 732,796
5,000 America Online Latin
America Inc., Cl. A+ ............................ 2,150 125
3,000 Atlus Co. Ltd. .................................... 17,662 21,953
9,473 CNET Networks Inc.+ ............................... 102,468 139,158
3,230 EarthLink Inc.+ ................................... 45,250 35,885
10,200 Electronic Arts Inc.+ ............................. 506,068 533,562
1,000 EMC Corp.+ ........................................ 6,600 13,620
100 Google Inc., Cl. A+ ............................... 8,860 41,486
10,000 Jupitermedia Corp.+ ............................... 12,067 147,800
60,000 Microsoft Corp. ................................... 1,352,544 1,569,000
13,800 Mobius Management
Systems Inc.+ ................................... 88,365 92,736
3,000 NAVTEQ Corp.+ ..................................... 115,135 131,610
1,500 Pixar+ ............................................ 30,794 79,080
140,000 Yahoo! Inc.+ ...................................... 3,817,112 5,485,200
------------ ------------
6,681,671 9,024,011
------------ ------------
CONSUMER PRODUCTS -- 0.1%
6,000 Lenox Group Inc.+ ................................. 65,655 79,440
12,000 Mattel Inc. ....................................... 133,458 189,840
------------ ------------
199,113 269,280
------------ ------------
ELECTRONICS -- 1.9%
5,000 Freescale Semiconductor
Inc., Cl. B+ .................................... 54,885 125,850
3,000 Imax Corp.+ ....................................... 26,740 21,180
6,000 Intel Corp. ....................................... 178,395 149,760
3,570 Royal Philips Electronics
NV, ADR ......................................... 29,368 111,027
10,000 Samsung Electronics Co.
Ltd., GDR (a) ................................... 1,805,500 3,259,633
6,000 Sony Corp., ADR ................................... 171,471 244,800
6,000 Zoran Corp.+ ...................................... 93,171 97,260
------------ ------------
2,359,530 4,009,510
------------ ------------
ENTERTAINMENT -- 12.6%
8,000 Aruze Corp. ....................................... 181,238 164,497
60,000 Canal Plus, ADR+ .................................. 10,818 111,000
625 CCE Spinco Inc.+ .................................. 8,666 8,188
1,161 Corporacion Interamericana de
Entretenimiento SA de CV,
Cl. B+ .......................................... 2,441 2,525
25,000 Crown Media Holdings Inc.,
Cl. A+ .......................................... 146,640 229,250
31,622 EMI Group plc ..................................... 108,730 131,933
30,000 EMI Group plc, ADR ................................ 394,397 249,786
MARKET
SHARES COST VALUE
--------- ------------ ------------
227,000 Gemstar-TV Guide
International Inc.+ ............................. $ 1,164,273 $ 592,470
70,000 GMM Grammy Public
Co. Ltd. ........................................ 55,457 22,693
481 Henley LP+ (b) .................................... 0 1,443
77,843 Liberty Global Inc., Cl. A+ ....................... 968,833 1,751,467
77,843 Liberty Global Inc., Cl. C+ ....................... 930,840 1,650,272
715,000 Liberty Media Corp., Cl. A+ ....................... 1,911,604 5,627,050
100,000 Shaw Brothers
(Hong Kong) Ltd. ................................ 145,929 119,299
70,000 Six Flags Inc.+ ................................... 302,979 539,700
70,000 SMG plc ........................................... 205,497 103,573
97,000 The Walt Disney Co. ............................... 2,274,950 2,325,090
200,000 Time Warner Inc. .................................. 3,192,596 3,488,000
140,000 Viacom Inc., Cl. A ................................ 2,104,965 4,586,400
166,000 Vivendi Universal SA, ADR ......................... 5,114,673 5,217,380
4,000 World Wrestling
Entertainment Inc. .............................. 47,930 58,720
------------ ------------
19,273,456 26,980,736
------------ ------------
HOTELS AND GAMING -- 11.3%
8,000 Aztar Corp.+ ...................................... 40,900 243,120
24,000 Boyd Gaming Corp. ................................. 1,124,508 1,143,840
13,000 Churchill Downs Inc. .............................. 409,690 477,490
155,000 Gaylord Entertainment Co.+ ........................ 3,903,185 6,756,450
5,000 Greek Organization of Football
Prognostics SA .................................. 54,100 172,256
32,000 GTECH Holdings Corp. .............................. 704,043 1,015,680
5,000 Harrah's Entertainment Inc. ....................... 195,157 356,450
800,000 Hilton Group plc .................................. 3,288,133 5,003,182
108,000 International Game Technology ..................... 3,168,708 3,324,240
6,000 Kerzner International Ltd.+ ....................... 297,097 412,500
22,000 Las Vegas Sands Corp.+ ............................ 833,207 868,340
55,000 Magna Entertainment Corp.,
Cl. A+ .......................................... 358,030 392,700
75,000 MGM Mirage+ ....................................... 2,697,387 2,750,250
36,900 Pinnacle Entertainment Inc.+ ...................... 653,967 911,799
6,000 Starwood Hotels & Resorts
Worldwide Inc. .................................. 185,708 383,160
------------ ------------
17,913,820 24,211,457
------------ ------------
PUBLISHING -- 13.8%
20,000 Arnoldo Mondadori
Editore SpA ..................................... 63,828 185,990
95,000 Belo Corp., Cl. A ................................. 1,494,739 2,033,950
20,000 Dow Jones & Co. Inc. .............................. 769,244 709,800
20,000 EMAP plc .......................................... 207,970 296,956
15,000 Gannett Co. Inc. .................................. 883,908 908,550
2,833 Golden Books Family
Entertainment Inc.+ ............................. 0 0
2,000 Hollinger International Inc.,
Cl. A ........................................... 26,475 17,920
144,400 Independent News & Media plc ...................... 193,226 434,224
12,000 Journal Register Co. .............................. 193,975 179,400
14,000 Knight-Ridder Inc. ................................ 630,949 886,200
46,000 Lee Enterprises Inc. .............................. 1,032,824 1,697,860
19,000 McClatchy Co., Cl. A .............................. 517,138 1,122,900
40,000 McGraw-Hill Companies Inc. ........................ 1,243,770 2,065,200
33,000 Media General Inc., Cl. A ......................... 1,632,302 1,673,100
27,000 Meredith Corp. .................................... 636,669 1,413,180
100,000 Nation Multimedia
Group plc (b) ................................... 84,677 24,193
See accompanying notes to financial statements.
3
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2005
MARKET
SHARES COST VALUE
--------- ------------ ------------
COMMON STOCKS (CONTINUED)
COPYRIGHT/CREATIVITY COMPANIES (CONTINUED)
PUBLISHING (CONTINUED)
90,000 New Straits Times
Press Berhad ................................... $ 265,274 $ 58,341
326,414 News Corp., Cl. A ................................. 4,069,172 5,075,738
40,000 News Corp., Cl. B ................................. 396,739 664,400
150,000 Oriental Press Group Ltd. ......................... 46,315 27,471
100,000 Penton Media Inc.+ ................................ 86,720 55,000
10,000 Playboy Enterprises Inc.,
Cl. A+ ......................................... 97,125 124,150
974,000 Post Publishing plc (b) ........................... 47,100 167,378
145,000 PRIMEDIA Inc.+ .................................... 427,568 233,450
90,000 Reader's Digest
Association Inc. ............................... 1,506,323 1,369,800
2,360 SanomaWSOY Oyj, Cl. A ............................. 63,150 59,149
1,000 Scholastic Corp.+ ................................. 16,500 28,510
251,520 SCMP Group Ltd. ................................... 181,457 93,262
64,000 Scripps (E.W.) Co., Cl. A ......................... 2,887,044 3,073,280
252,671 Singapore Press Holdings Ltd. ..................... 742,032 653,466
300 Spir Communication ................................ 23,329 44,005
15,000 Telegraaf Media Groep NV .......................... 285,271 324,091
45,000 Thomas Nelson Inc. ................................ 533,873 1,109,250
84,000 Tribune Co. ....................................... 3,528,623 2,541,840
12,352 United Business Media plc ......................... 123,270 135,372
800 Wiley (John) & Sons Inc.,
Cl. B .......................................... 5,693 31,180
4,000 Wolters Kluwer NV - CVA ........................... 90,625 80,884
------------ ------------
25,034,897 29,599,440
------------ ------------
TOTAL COPYRIGHT/
CREATIVITY
COMPANIES ...................................... 72,075,385 95,350,144
------------ ------------
DISTRIBUTION COMPANIES -- 52.9%
BROADCASTING -- 10.7%
1,560 Asahi Broadcasting Corp. .......................... 62,912 210,055
18,000 CanWest Global
Communications Corp.+ .......................... 156,991 148,500
18,000 CanWest Global
Communications Corp.,
Sub-Voting+ .................................... 92,011 149,271
6,400 Chubu-Nippon Broadcasting
Co., Ltd. ...................................... 46,375 78,687
5,000 Clear Channel
Communications Inc. ............................ 207,991 157,250
20,000 Cogeco Inc. ....................................... 388,830 412,921
8,333 Corus Entertainment Inc.,
Cl. B .......................................... 33,927 223,657
9,000 Cox Radio Inc., Cl. A+ ............................ 55,500 126,720
72,271 Discovery Holding Co., Cl. A+ ..................... 313,544 1,094,906
166 Emmis Communications
Corp., Cl. A+ .................................. 1,741 3,305
30,020 Fisher Communications Inc.+ ....................... 1,574,095 1,243,729
228 Fuji Television Network Inc. ...................... 526,693 574,181
50,000 Granite Broadcasting Corp.+ ....................... 120,658 10,500
95,000 Gray Television Inc. .............................. 1,229,101 932,900
10,000 Gray Television Inc., Cl. A ....................... 121,313 90,500
10,000 Grupo Radio Centro, SA de
CV, ADR+ ....................................... 46,871 71,800
30,000 Hearst-Argyle Television Inc. ..................... 302,404 715,500
4,550 Lagardere SCA ..................................... 100,163 350,137
145,000 Liberty Corp. ..................................... 6,780,084 6,787,450
48,000 Lin TV Corp., Cl. A+ .............................. 940,832 534,720
5,140 Media Prima Berhad+ ............................... 0 2,312
MARKET
SHARES COST VALUE
--------- ------------ ------------
4,000 Metropole Television SA ........................... $ 35,208 $ 110,812
7,000 Nippon Television
Network Corp. ................................... 1,078,903 1,076,101
4,650 NRJ Group ......................................... 22,694 113,846
1,000 NTN Communications Inc.+ .......................... 862 1,490
96,100 Paxson Communications Corp.+ ...................... 499,048 86,490
500 Radio One Inc., Cl. A+ ............................ 5,510 5,135
1,000 Radio One Inc., Cl. D+ ............................ 11,428 10,350
1,500 RTL Group (Brussels) .............................. 76,363 120,757
3,500 RTL Group (New York) .............................. 113,838 281,767
1,906 SAGA Communications Inc.,
Cl. A+ .......................................... 9,709 20,718
79,000 Salem Communications Corp.,
Cl. A+ .......................................... 1,276,370 1,381,710
80,000 Sinclair Broadcast Group Inc.,
Cl. A ........................................... 824,936 736,000
25,000 Societe Television Francaise 1 .................... 249,649 693,762
5,000 Spanish Broadcasting System
Inc., Cl. A+ .................................... 43,950 25,550
50,000 Television Broadcasts Ltd. ........................ 187,673 265,681
110,000 Tokyo Broadcasting
System Inc. ..................................... 1,662,133 2,984,695
258 TV Asahi Corp. .................................... 434,628 640,980
240,000 TV Azteca SA de CV CPO ............................ 67,797 156,877
26,000 Ulster Television plc ............................. 105,595 190,114
39,000 Young Broadcasting Inc.,
Cl. A+ .......................................... 770,179 101,400
------------ ------------
20,578,509 22,923,236
------------ ------------
BUSINESS SERVICES -- 0.4%
15,000 BB Holdings Ltd. .................................. 69,304 101,550
6,000 Carlisle Group Ltd.+ .............................. 9,451 11,665
20,000 Cendant Corp. ..................................... 239,302 345,000
500 CheckFree Corp.+ .................................. 5,520 22,950
1,000 Convergys Corp.+ .................................. 17,737 15,850
500 Dun and Bradstreet Corp.+ ......................... 6,320 33,480
8,000 Interactive Data Corp. ............................ 52,250 181,680
2,000 Moody's Corp. ..................................... 20,012 122,840
2,500 Traffix Inc. ...................................... 12,500 12,800
------------ ------------
432,396 847,815
------------ ------------
CABLE -- 8.8%
16,578 Austar United
Communications Ltd.+ ............................ 22,428 14,402
200,000 Cablevision Systems Corp.,
Cl. A+ .......................................... 4,048,601 4,694,000
30,000 Charter Communications Inc.,
Cl. A+ .......................................... 45,150 36,600
40,400 Cogeco Cable Inc. ................................. 828,167 851,477
35,000 Comcast Corp., Cl. A+ ............................. 1,005,485 908,600
7,000 Comcast Corp., Cl. A,
Special+ ........................................ 53,073 179,830
15,000 Mediacom Communications
Corp., Cl. A+ ................................... 126,904 82,350
248,345 Rogers Communications Inc.,
Cl. B, New York ................................. 2,042,603 10,495,060
9,655 Rogers Communications Inc.,
Cl. B, Toronto .................................. 148,206 408,642
11,000 Shaw Communications Inc.,
Cl. B, New York ................................. 103,451 238,480
39,000 Shaw Communications Inc.,
Cl. B, Toronto .................................. 105,571 846,462
28 Telewest Global Inc.+ ............................. 37,282 667
------------ ------------
8,566,921 18,756,570
------------ ------------
See accompanying notes to financial statements.
4
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2005
MARKET
SHARES COST VALUE
--------- ------------ ------------
COMMON STOCKS (CONTINUED)
DISTRIBUTION COMPANIES (CONTINUED)
CONSUMER SERVICES -- 1.6%
3,000 Best Buy Co. Inc. ................................. $ 131,100 $ 130,440
4,000 Bowlin Travel Centers Inc.+ ....................... 3,022 6,660
400 eBay Inc.+ ........................................ 6,163 17,300
4,000 Expedia Inc.+ ..................................... 86,661 95,840
20,000 H&R Block Inc. .................................... 258,838 491,000
94,204 IAC/InterActiveCorp+ .............................. 2,418,586 2,666,915
2,000 Martha Stewart Living
Omnimedia Inc., Cl. A+ .......................... 16,500 34,860
4,000 TiVo Inc.+ ........................................ 27,943 20,480
------------ ------------
2,948,813 3,463,495
------------ ------------
DIVERSIFIED INDUSTRIAL -- 1.5%
42,000 Bouygues SA ....................................... 1,074,060 2,053,583
18,432 Contax Participacoes SA, ADR ...................... 7,572 22,177
30,000 General Electric Co. .............................. 945,500 1,051,500
7,700 Hutchison Whampoa Ltd. ............................ 71,267 73,339
7,908 Malaysian Resources Corp.
Berhad+ ......................................... 41,566 1,130
------------ ------------
2,139,965 3,201,729
------------ ------------
ENERGY AND UTILITIES -- 0.3%
27,000 El Paso Electric Co.+ ............................. 217,183 568,080
------------ ------------
ENTERTAINMENT -- 6.9%
1,000 Blockbuster Inc., Cl. A ........................... 10,488 3,750
3,150 British Sky Broadcasting
Group plc, ADR .................................. 56,080 109,242
4,005 Chestnut Hill Ventures+ (b) ....................... 241,092 86,003
45,000 DreamWorks Animation
SKG Inc., Cl. A+ ................................ 1,083,222 1,105,200
144,000 Grupo Televisa SA, ADR ............................ 8,121,350 11,592,000
200,000 Rank Group plc .................................... 1,018,166 1,052,079
13,000 Regal Entertainment Group,
Cl. A ........................................... 179,603 247,260
20,000 Univision Communications
Inc., Cl. A+ .................................... 550,196 587,800
------------ ------------
11,260,197 14,783,334
------------ ------------
EQUIPMENT -- 2.4%
6,000 Agere Systems Inc.+ ............................... 62,410 77,400
11,000 American Tower Corp., Cl. A+ ...................... 131,710 298,100
1,000 Amphenol Corp., Cl. A ............................. 7,794 44,260
12,000 Andrew Corp.+ ..................................... 50,546 128,760
416 Avaya Inc.+ ....................................... 9,761 4,439
2,000 CommScope Inc.+ ................................... 29,407 40,260
90,000 Corning Inc.+ ..................................... 825,299 1,769,400
3,000 Furukawa Electric Co. Ltd.+ ....................... 22,588 23,453
1,500 L-3 Communications
Holdings Inc. ................................... 16,500 111,525
70,000 Lucent Technologies Inc.+ ......................... 378,802 186,200
55,000 Motorola Inc. ..................................... 595,695 1,242,450
30,000 Nortel Networks Corp.+ ............................ 140,250 91,800
12,000 QUALCOMM Inc. ..................................... 29,959 516,960
12,000 Scientific-Atlanta Inc. ........................... 517,301 516,840
40,000 Sycamore Networks Inc.+ ........................... 136,260 172,800
200 Trestle Holdings Inc.+ ............................ 2,500 50
------------ ------------
2,956,782 5,224,697
------------ ------------
MARKET
SHARES COST VALUE
--------- ------------ ------------
FOOD AND BEVERAGE -- 0.1%
5,282 Compass Group plc ................................. $ 37,648 $ 20,038
1,041 Pernod-Ricard SA .................................. 175,354 181,661
------------ ------------
213,002 201,699
------------ ------------
SATELLITE -- 0.9%
300 Asia Satellite
Telecommunications
Holdings Ltd., ADR .............................. 5,693 5,085
30,000 DIRECTV Group Inc.+ ............................... 319,551 423,600
40,000 EchoStar Communications
Corp., Cl. A+ ................................... 469,187 1,086,800
1,000 Lockheed Martin Corp. ............................. 27,862 63,630
25,000 Pegasus Communications
Corp., Cl. A+ ................................... 180,390 98,750
6,000 PT Indosat Tbk, ADR ............................... 58,079 174,540
30 SKY Perfect
Communications Inc. ............................. 15,472 23,479
------------ ------------
1,076,234 1,875,884
------------ ------------
TELECOMMUNICATIONS: LONG DISTANCE -- 2.3%
20,000 AT&T Inc. ......................................... 504,055 489,800
1,000 Embratel Participacoes
SA, ADR+ ........................................ 4,150 14,750
35,000 Philippine Long Distance
Telephone Co., ADR .............................. 597,989 1,173,900
65,000 Sprint Nextel Corp. ............................... 1,136,075 1,518,400
1,000 Startec Global
Communications Corp.+ (b) ....................... 4,646 2
1,666 Talk America Holdings Inc.+ ....................... 2,529 14,378
605,500 Telecom Italia SpA ................................ 1,680,518 1,763,446
------------ ------------
3,929,962 4,974,676
------------ ------------
TELECOMMUNICATIONS: NATIONAL -- 4.7%
9,000 BT Group plc, ADR ................................. 375,870 345,420
5,000 China Telecom Corp. Ltd.,
ADR ............................................. 126,250 182,900
5,000 China Unicom Ltd., ADR ............................ 38,450 40,900
40,000 Compania de
Telecomunicaciones de
Chile SA, ADR ................................... 665,851 352,000
162,000 Deutsche Telekom AG, ADR .......................... 2,279,995 2,694,060
50,000 Elisa Oyj, Cl. A .................................. 527,900 926,397
3,000 France Telecom SA, ADR ............................ 48,120 74,520
3,305 Hellenic Telecommunications
Organization SA+ ................................ 39,578 70,430
500 Magyar Telekom, ADR ............................... 9,650 11,015
20 Nippon Telegraph &
Telephone Corp. ................................. 123,433 90,898
4,320 PT Telekomunikasi
Indonesia, ADR .................................. 18,513 103,075
6,000 Rostelecom, ADR ................................... 41,408 81,900
45,000 Swisscom AG, ADR .................................. 1,217,835 1,417,950
2,000 Telecom Corp. of New
Zealand Ltd., ADR ............................... 31,000 65,360
55,000 Telefonica SA, ADR ................................ 1,325,438 2,476,100
38,000 Telefonos de Mexico SA de
CV, Cl. L, ADR .................................. 177,884 937,840
18,172 TeliaSonera AB .................................... 51,070 97,671
2,400 Telstra Corp. Ltd., ADR ........................... 30,324 34,392
------------ ------------
7,128,569 10,002,828
------------ ------------
See accompanying notes to financial statements.
5
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2005
MARKET
SHARES COST VALUE
--------- ------------ ------------
COMMON STOCKS (CONTINUED)
DISTRIBUTION COMPANIES (CONTINUED)
TELECOMMUNICATIONS: REGIONAL -- 8.2%
4,266 Aliant Inc. ....................................... $ 39,187 $ 113,398
15,025 ALLTEL Corp. ...................................... 433,618 948,077
38,000 BCE Inc. .......................................... 807,621 910,100
4,000 Brasil Telecom Participacoes
SA, ADR ......................................... 231,475 149,400
35,000 CenturyTel Inc. ................................... 1,076,950 1,160,600
100,000 Cincinnati Bell Inc.+ ............................. 740,165 351,000
130,000 Citizens Communications Co. ....................... 1,541,535 1,589,900
50,000 Commonwealth Telephone
Enterprises Inc. ................................ 1,136,673 1,688,500
40,000 MCI Inc. .......................................... 1,024,380 789,200
3,000 Metromedia International
Group Inc.+ ..................................... 345 4,530
320,000 Qwest Communications
International Inc.+ ............................. 1,481,769 1,808,000
18,432 Tele Norte Leste Participacoes
SA, ADR ......................................... 244,808 330,301
10,000 Telecom Argentina SA,
Cl. B, ADR+ ..................................... 26,440 128,900
68,000 Telephone & Data Systems Inc. ..................... 2,114,041 2,450,040
68,000 Telephone & Data Systems
Inc., Special ................................... 2,722,151 2,353,480
40,000 TELUS Corp. ....................................... 722,455 1,646,867
4,000 Time Warner Telecom Inc.,
Cl. A+ .......................................... 25,000 39,400
38,000 Verizon Communications Inc. ....................... 1,436,275 1,144,560
------------ ------------
15,804,888 17,606,253
------------ ------------
WIRELESS COMMUNICATIONS -- 4.1%
102,000 America Movil SA de CV,
Cl. L, ADR ...................................... 531,002 2,984,520
102 Hutchison Telecommunications
International Ltd.+ ............................. 79 147
240,000 Jasmine International Public
Co. Ltd.+ (b) ................................... 5,040 2,691
500 NTT DoCoMo Inc. ................................... 762,806 763,132
296,000 O2 plc ............................................ 1,034,306 1,007,071
30,000 Price Communications Corp.+ ....................... 292,195 446,100
10,800 Rural Cellular Corp., Cl. A+ ...................... 22,788 157,788
37,000 SK Telecom Co. Ltd., ADR .......................... 828,800 750,730
2,449 Tele Centro Oeste Celular
Participacoes SA, ADR ........................... 7,341 27,478
190 Tele Leste Celular
Participacoes SA, ADR+ .......................... 5,082 2,689
330 Tele Norte Celular
Participacoes SA, ADR+ .......................... 5,098 2,459
825 Telemig Celular
Participacoes SA, ADR ........................... 23,843 32,513
MARKET
SHARES COST VALUE
--------- ------------ ------------
8,913 Telesp Celular
Participacoes SA, ADR .......................... $ 221,768 $ 33,691
3,178 Tim Participacoes SA, ADR ......................... 38,554 80,340
30,000 United States Cellular Corp.+ ..................... 1,127,335 1,482,000
18,000 Vimpel-Communications,
ADR+ ........................................... 120,775 796,140
11,000 Vodafone Group plc, ADR ........................... 181,538 236,170
------------ ------------
5,208,350 8,805,659
------------ ------------
TOTAL DISTRIBUTION
COMPANIES ...................................... 82,461,771 113,235,955
------------ ------------
TOTAL COMMON STOCKS ............................... 154,537,156 208,586,099
------------ ------------
PREFERRED STOCKS -- 0.7%
BROADCASTING -- 0.5%
1,063 Granite Broadcasting Corp.,
12.750% Pfd.+ .................................. 439,683 208,614
100 Gray Television Inc.,
8.000% Cv. Pfd.,
Ser. C (a)(b)(c) ............................... 1,000,000 1,010,000
------------ ------------
1,439,683 1,218,614
------------ ------------
BUSINESS SERVICES -- 0.2%
11,241 Interep National Radio
Sales Inc., 4.000% Cv. Pfd.,
Ser. A+ (a)(b)(c) .............................. 1,081,573 393,450
------------ ------------
TOTAL PREFERRED
STOCKS ......................................... 2,521,256 1,612,064
------------ ------------
RIGHTS -- 0.0%
BROADCASTING -- 0.0%
5,140 Media Prima Berhad,
expire 07/18/08+ ............................... 1,353 1,510
------------ ------------
WARRANTS -- 0.0%
BROADCASTING -- 0.0%
5,140 Media Prima Berhad,
expire 07/31/08+ ............................... 135 789
------------ ------------
BUSINESS SERVICES -- 0.0%
62,500 Interep National Radio
Sales Inc., expire
05/06/07+ (a)(b)(c) ............................ 0 0
------------ ------------
COMMUNICATIONS EQUIPMENT -- 0.0%
541 Lucent Technologies Inc.,
expire 12/10/07+ ............................... 898 305
------------ ------------
PUBLISHING -- 0.0%
25,000 Nation Multimedia Group plc,
expire 08/22/07+ (b) ........................... 0 375
------------ ------------
TOTAL WARRANTS .................................... 1,033 1,469
------------ ------------
See accompanying notes to financial statements.
6
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2005
PRNCIPAL MARKET
AMOUNT COST VALUE
---------- ------------ -------------
CONVERTIBLE CORPORATE BONDS -- 0.4%
BUSINESS SERVICES -- 0.4%
$ 50,000 BBN Corp., Sub. Deb. Cv.,
6.000%, 04/01/12+ (b)(d) ............... $ 49,459 $ 0
Trans-Lux Corp., Sub. Deb. Cv.,
300,000 8.250%, 03/01/12 ....................... 293,461 291,000
500,000 7.500%, 12/01/06 ....................... 500,000 498,750
------------ -------------
TOTAL CONVERTIBLE
CORPORATE BONDS ........................ 842,920 789,750
------------ -------------
U.S. GOVERNMENT OBLIGATIONS -- 1.5%
3,258,000 U.S. Treasury Bills,
3.720% to 3.962%++,
01/12/06 to 03/23/06 ................... 3,243,804 3,243,903
------------ -------------
TOTAL INVESTMENTS -- 100.0% .......................... $161,147,522 214,234,795
============
OTHER ASSETS AND LIABILITIES (NET) ................... 672,169
PREFERRED STOCK
(994,100 preferred shares outstanding) ............. (49,827,500)
-------------
NET ASSETS -- COMMON STOCK
(14,030,753 common shares outstanding) ............. $ 165,079,464
=============
NET ASSET VALUE PER COMMON SHARE
($165,079,464 / 14,030,753 shares outstanding) ..... $11.77
======
----------
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At December
31, 2005, the market value of Rule 144A securities amounted to $4,663,083
or 2.18% of total investments. Except as noted in (c), these securities
are liquid.
(b) Security fair valued under procedures established by the Board of
Directors. The procedures may include reviewing available financial
information about the company and reviewing valuation of comparable
securities and other factors on a regular basis. At December 31, 2005, the
market value of fair valued securities amounted to $1,685,535 or 0.79% of
total investments.
(c) At December 31, 2005, the Fund held investments in restricted and illiquid
securities amounting to $1,403,450 or 0.65% of net assets, which were
valued under methods approved by the Board, as follows:
12/31/05
ACQUISITION ACQUISITION ACQUISITION CARRYING VALUE
SHARES ISSUER DATE COST PER UNIT
----------- ------ ----------- ----------- --------------
100 Gray Television Inc.,
8.000% Cv. Pfd., Ser. C ................ 04/22/02 $1,000,000 $10,100.0000
11,241 Interep National Radio Sales Inc.,
4.000% Cv. Pfd., Ser. A ................ 05/03/02 1,081,573 35.0013
62,500 Interep National Radio Sales Inc.
Warrants expire 05/06/07 ............... 05/03/02 -- --
(d) Security in default.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
GDR Global Depository Receipt
CPO Ordinary Participation Certificate
% OF
MARKET MARKET
VALUE VALUE
------ ------
GEOGRAPHIC DIVERSIFICATION
North America ................................. 71.19% $152,526,528
Europe ........................................ 14.08 30,157,602
Latin America ................................. 8.09 17,334,907
Asia/Pacific .................................. 3.42 7,318,846
Japan ......................................... 3.22 6,896,912
------ ------------
100.0% $214,234,795
====== ============
See accompanying notes to financial statements.
7
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2005
ASSETS:
Investments, at value (cost $161,147,522) ............................ $ 214,234,795
Foreign currency, at value (cost $984) ............................... 974
Cash ................................................................. 943
Unrealized appreciation on swap contracts ............................ 752,199
Dividends and interest receivable .................................... 351,511
Receivable for investments sold ...................................... 39,529
Other assets ......................................................... 8,229
-------------
TOTAL ASSETS ......................................................... 215,388,180
-------------
LIABILITIES:
Payable for investment advisory fees ................................. 138,438
Payable for shareholder communications expenses ...................... 114,863
Payable for audit and legal fees ..................................... 57,399
Payable for payroll expenses ......................................... 56,267
Dividends payable .................................................... 33,051
Other accrued expenses and liabilities ............................... 81,198
-------------
TOTAL LIABILITIES .................................................... 481,216
-------------
PREFERRED STOCK:
Series B Cumulative Preferred Stock (6.00%,
$25 liquidation value, $0.001 par value,
1,000,000 shares authorized with 993,100
shares issued and outstanding) ..................................... 24,827,500
Series C Cumulative Preferred Stock (Auction Rate,
$25,000 liquidation value, $0.001 par value, 1,000
shares authorized with 1,000 shares issued
and outstanding) ................................................... 25,000,000
-------------
TOTAL PREFERRED STOCK ................................................ 49,827,500
-------------
NET ASSETS ATTRIBUTABLE TO COMMON
STOCK SHAREHOLDERS ................................................. $ 165,079,464
=============
NET ASSETS ATTRIBUTABLE TO COMMON STOCK
SHAREHOLDERS CONSIST OF:
Capital stock, at $0.001 par value .................................. $ 14,031
Additional paid-in capital ........................................... 116,300,533
Undistributed net investment income .................................. 98,776
Accumulated distributions in excess of net realized
gain on investments, swap contracts, and foreign
currency transactions .............................................. (5,173,009)
Net unrealized appreciation on investments and
swap contracts ..................................................... 53,839,472
Net unrealized depreciation on foreign
currency translations .............................................. (339)
-------------
NET ASSETS ........................................................... $ 165,079,464
=============
NET ASSET VALUE PER COMMON SHARE:
($165,079,464 / 14,030,753 shares outstanding;
196,750,000 shares authorized) ..................................... $11.77
======
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2005
INVESTMENT INCOME:
Dividends (net of foreign taxes of $188,786) ......................... $ 4,707,509
Interest ............................................................. 301,252
-------------
TOTAL INVESTMENT INCOME .............................................. 5,008,761
-------------
EXPENSES:
Investment advisory fees ............................................. 2,117,085
Shareholder communications expenses .................................. 318,403
Payroll expenses ..................................................... 157,183
Shareholder services fees ............................................ 109,044
Legal and audit fees ................................................. 74,631
Directors' fees ...................................................... 67,471
Auction agent fees ................................................... 57,600
Custodian fees ....................................................... 51,123
Miscellaneous expenses ............................................... 143,075
-------------
TOTAL EXPENSES ....................................................... 3,095,615
-------------
LESS:
Advisory fee reduction ............................................. (498,275)
Custodian fee credits .............................................. (881)
-------------
TOTAL REDUCTIONS AND CREDITS ....................................... (499,156)
-------------
TOTAL NET EXPENSES ................................................... 2,596,459
-------------
NET INVESTMENT INCOME ................................................ 2,412,302
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
SWAP CONTRACTS, AND FOREIGN CURRENCY:
Net realized gain on investments ..................................... 8,402,291
Net realized loss on swap contracts .................................. (142,730)
Net realized loss on foreign currency transactions ................... (24,583)
-------------
Net realized gain on investments, swap contracts,
and foreign currency transactions .................................. 8,234,978
Net change in unrealized appreciation/depreciation
on investments, swap contracts, and foreign
currency translations .............................................. (7,290,669)
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
SWAP CONTRACTS, AND FOREIGN CURRENCY ............................... 944,309
-------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .................................................... 3,356,611
-------------
Total Distributions to Preferred Stock Shareholders .................. (2,306,268)
-------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON
STOCK SHAREHOLDERS RESULTING FROM OPERATIONS ....................... $ 1,050,343
=============
See accompanying notes to financial statements.
8
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------
OPERATIONS:
Net investment income ................................................................... $ 2,412,302 $ 1,090,976
Net realized gain on investments, swap contracts, and foreign currency transactions ..... 8,234,978 1,177,139
Net change in unrealized appreciation/depreciation on investments, swap contracts,
and foreign currency translations ..................................................... (7,290,669) 23,752,164
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................... 3,356,611 26,020,279
------------- -------------
DISTRIBUTIONS TO PREFERRED STOCK SHAREHOLDERS:
Net investment income ................................................................... (465,820) (515,381)
Net realized short-term gains on investments and foreign currency transactions .......... (31,123) (355,500)
Net realized long-term gains on investments and foreign currency transactions ........... (1,809,325) (996,178)
------------- -------------
TOTAL DISTRIBUTIONS TO PREFERRED STOCK SHAREHOLDERS ..................................... (2,306,268) (1,867,059)
------------- -------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON STOCK SHAREHOLDERS
RESULTING FROM OPERATIONS ............................................................. 1,050,343 24,153,220
------------- -------------
DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS:
Net investment income ................................................................... (1,704,816) --
Net realized short-term gains on investments and foreign currency transactions .......... (113,906) --
Net realized long-term gains on investments and foreign currency transactions ........... (6,621,797) --
------------- -------------
TOTAL DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS ........................................ (8,440,519) --
------------- -------------
TRUST SHARE TRANSACTIONS:
Net decrease from repurchase of common shares ........................................... (1,437,218) (444,435)
Net increase from repurchase of preferred shares ........................................ -- 8,254
Offering costs for preferred shares charged to paid-in capital .......................... (5,050) --
------------- -------------
NET DECREASE IN NET ASSETS FROM TRUST SHARE TRANSACTIONS ................................ (1,442,268) (436,181)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO COMMON STOCK SHAREHOLDERS ......... (8,832,444) 23,717,039
NET ASSETS ATTRIBUTABLE TO COMMON STOCK SHAREHOLDERS:
Beginning of period ..................................................................... 173,911,908 150,194,869
------------- -------------
End of period (including undistributed net investment income of $98,776 and
$25,450, respectively) ................................................................ $ 165,079,464 $ 173,911,908
============= =============
See accompanying notes to financial statements.
9
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION. The Gabelli Global Multimedia Trust Inc. (the "Trust") is a
non-diversified closed-end management investment company organized as a Maryland
corporation on March 31, 1994 and registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Trust commenced investment operations on
November 15, 1994. The Trust's primary objective is long-term growth of capital
with income as a secondary objective.
The Trust will invest at least 80% of its assets, under normal market
conditions, in common stock and other securities, including convertible
securities, preferred stock, options, and warrants of companies in the
telecommunications, media, publishing, and entertainment industries (the "80%
Policy"). The 80% Policy may be changed without shareholder approval. The Trust
will provide shareholders with notice at least 60 days prior to the
implementation of any change in the 80% Policy.
2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in
accordance with U.S. generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
followed by the Trust in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Directors (the "Board") so determines, by such other method as the
Board shall determine in good faith, to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on foreign markets are generally
valued at the preceding closing values of such securities on their respective
exchanges or if after the close of the foreign markets, but prior to the close
of business on the day the securities are being valued, market conditions change
significantly, certain foreign securities may be fair valued pursuant to
procedures established by the Board. Debt instruments with remaining maturities
of 60 days or less that are not credit impaired are valued at amortized cost,
unless the Board determines such amount does not reflect the securities' fair
value, in which case these securities will be valued at their fair value as
determined by the Board. Debt instruments having a maturity greater than 60 days
for which market quotations are readily available are valued at the average of
the latest bid and asked prices. If there were no asked prices quoted on such
day, the security is valued using the closing bid price. Futures contracts are
valued at the closing settlement price of the exchange or board of trade on
which the applicable contract is traded.
Securities and assets for which market quotations are not readily
available are valued at their fair value as determined in good faith under
procedures established by and under the general supervision of the Board. Fair
valuation methodologies and procedures may include, but are not limited to:
analysis and review of available financial and non-financial information about
the company; comparisons to the valuation and changes in valuation of similar
securities, including a comparison of foreign securities to the equivalent U.S.
dollar value ADR securities at the close of the U.S. exchange; and evaluation of
any other information that could be indicative of the value of the security.
REPURCHASE AGREEMENTS. The Trust may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Trust takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Trust to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Trust's holding period.
The Trust will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by the Trust in each agreement. The Trust will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Trust may be delayed or limited. At
December 31, 2005, there were no open repurchase agreements.
SWAP AGREEMENTS. The Trust may enter into interest rate swap or cap
transactions. The use of interest rate swaps and caps is a highly specialized
activity that involves investment techniques and risks different from those
associated with ordinary portfolio security transactions. In an interest rate
swap, the Trust would agree to pay to the other party to the interest rate swap
(which is known
10
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
as the "counterparty") periodically a fixed rate payment in exchange for the
counterparty agreeing to pay to the Trust periodically a variable rate payment
that is intended to approximate the Trust's variable rate payment obligation on
the Series C Preferred Stock. In an interest rate cap, the Trust would pay a
premium to the counterparty and, to the extent that a specified variable rate
index exceeds a predetermined fixed rate, would receive from the counterparty
payments of the difference based on the notional amount of such cap. Interest
rate swap and cap transactions introduce additional risk because the Trust would
remain obligated to pay preferred stock dividends when due in accordance with
the Articles Supplementary even if the counterparty defaulted. If there is a
default by the counterparty to a swap contract, the Trust will be limited to
contractual remedies pursuant to the agreements related to the transaction.There
is no assurance that the swap contract counterparties will be able to meet their
obligations pursuant to the swap contracts or that, in the event of default, the
Trust will succeed in pursuing contractual remedies. The Trust thus assumes the
risk that it may be delayed in or prevented from obtaining payments owed to it
pursuant to the swap contracts. The creditworthiness of the swap contract
counterparties is closely monitored in order to minimize this risk. Depending on
the general state of short-term interest rates and the returns on the Trust's
portfolio securities at that point in time, such a default could negatively
affect the Trust's ability to make dividend payments for the Series C Preferred
Stock. In addition, at the time an interest rate swap or cap transaction reaches
its scheduled termination date, there is a risk that the Trust will not be able
to obtain a replacement transaction or that the terms of the replacement will
not be as favorable as on the expiring transaction. If this occurs, it could
have a negative impact on the Trust's ability to make dividend payments on the
Series C Preferred Stock.
The use of derivative instruments involves, to varying degrees, elements
of market risk in excess of the amount recognized in the Statement of Assets and
Liabilities.
Unrealized gains related to swaps are reported as an asset and unrealized
losses are reported as a liability on the Statement of Assets and Liabilities.
The change in value of swaps, including the accrual of periodic amounts of
interest to be paid or received on swaps is reported as unrealized gains or
losses in the Statement of Operations. A realized gain or loss is recorded upon
payment or receipt of a periodic payment or termination of swap agreements. Swap
agreements involve, to varying degrees, elements of market and counterparty
risk, and exposure to loss in excess of the related amounts reflected in the
Statement of Assets and Liabilities.
The Trust has entered into two interest rate swap agreements with Citibank
N.A. Under the agreement the Trust receives a floating rate of interest and pays
a respective fixed rate of interest on the nominal value of the swap. Details of
the swaps at December 31, 2005 are as follows:
NOTIONAL FLOATING RATE* TERMINATION UNREALIZED
AMOUNT FIXED RATE (RATE RESET MONTHLY) DATE APPRECIATION (DEPRECIATION)
-------- ---------- -------------------- ----------- ---------------------------
$ 10,000,000 4.32% 4.31125% April 4, 2013 $272,920
15,000,000 3.27 4.31125 April 4, 2008 479,279
----------
* Based on Libor (London Interbank Offered Rate).
FUTURES CONTRACTS. The Trust may engage in futures contracts for the
purpose of hedging against changes in the value of its portfolio securities and
in the value of securities it intends to purchase. Such investments will only be
made if they are economically appropriate to the reduction of risks involved in
the management of the Trust's investments. Upon entering into a futures
contract, the Trust is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin." Subsequent payments ("variation margin") are made
or received by the Trust each day, depending on the daily fluctuation of the
value of the contract. The daily changes in the contract are included in
unrealized appreciation/depreciation on investments and futures contracts. The
Trust recognizes a realized gain or loss when the contract is closed.
There are several risks in connection with the use of futures contracts as
a hedging instrument. The change in value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in value of the hedged investments. These contracts
may involve market risk in excess of the unrealized gain or loss reflected in
the Statement of Assets and Liabilities. In addition, there is the risk that the
Trust may not be able to enter into a closing transaction because of an illiquid
secondary market. At December 31, 2005, there were no open futures contracts.
FORWARD FOREIGN EXCHANGE CONTRACTS. The Trust may engage in forward
foreign exchange contracts for hedging a specific transaction with respect to
either the currency in which the transaction is denominated or another currency
as deemed appropriate by the Adviser. Forward foreign exchange contracts are
valued at the forward rate and are marked-to-market daily. The change in market
value is included in unrealized appreciation/depreciation on investments and
foreign currency translations. When the contract is closed, the Trust 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.
11
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The use of forward foreign exchange contracts does not eliminate
fluctuations in the underlying prices of the Trust's portfolio securities, but
it does establish a rate of exchange that can be achieved in the future.
Although forward foreign exchange contracts limit the risk of loss due to a
decline in the value of the hedged currency, they also limit any potential gain
that might result should the value of the currency increase. These contracts may
involve market risk in excess of the unrealized gain or loss reflected in the
Statement of Assets and Liabilities. In addition, the Trust could be exposed to
risks if the counterparties to the contracts are unable to meet the terms of
their contracts. At December 31, 2005, there were no open forward foreign
exchange contracts.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Trust are
maintained in United States (U.S.) dollars. Foreign currencies, investments, and
other assets and liabilities are translated into U.S. dollars at the current
exchange rates. Purchases and sales of investment securities, income, and
expenses are translated at the exchange rate prevailing on the respective dates
of such transactions. Unrealized gains and losses that result from changes in
foreign exchange rates and/or changes in market prices of securities have been
included in unrealized appreciation/depreciation on investments and foreign
currency translations. Net realized foreign currency gains and losses resulting
from changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Trust and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
FOREIGN SECURITIES. The Trust may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Trust may be subject to foreign taxes on income, gains
on investments, or currency repatriation, a portion of which may be recoverable.
The Trust will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest up to 15% of its
net assets in securities for which the markets are illiquid. Illiquid securities
include securities the disposition of which is subject to substantial legal or
contractual restrictions. The sale of illiquid securities often requires more
time and results in higher brokerage charges or dealer discounts and other
selling expenses than does the sale of securities eligible for trading on
national securities exchanges or in the over-the-counter markets. Restricted
securities may sell at a price lower than similar securities that are not
subject to restrictions on resale. Securities freely salable among qualified
institutional investors under special rules adopted by the Securities and
Exchange Commission ("SEC") may be treated as liquid if they satisfy liquidity
standards established by the Board. The continued liquidity of such securities
is not as well assured as that of publicly traded securities, and accordingly
the Board will monitor their liquidity.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for as of the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Fund is informed of the dividend.
CUSTODIAN FEE CREDITS. When cash balances are maintained in the custody
account, the Fund receives credits which are used to offset custodian fees. The
gross expenses paid under the custody arrangement are included in custodian fees
in the Statement of Operations with the corresponding expense offset shown as
"custodian fee credits".
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Distributions to common
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with Federal income tax
regulations, which may differ from that determined under U.S. generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities held by the
Trust, foreign currency transactions, timing differences, and differing
characterizations of distributions made by the Trust. These book/tax differences
are either temporary or permanent in nature. To the extent these differences are
permanent, adjustments are made to the appropriate capital accounts in the
period when the differences arise. These reclassifications have no impact on the
NAV of the Trust and the calculation of net investment income per share in the
Financial Highlights includes these adjustments. For the year ended December 31,
2005, reclassifications were made to decrease accumulated net investment income
by $168,340 and to decrease accumulated distributions in excess of net realized
gain on investments, swap contracts, and foreign currency transactions by
$168,340.
12
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Distributions to shareholders of the Trust's 6.00% Series B Cumulative
Preferred Stock and Series C Auction Rate Cumulative Preferred Stock
("Cumulative Preferred Stock") are recorded on a daily basis and are determined
as described in Note 5.
The tax characteristic of distributions paid during the fiscal years ended
December 31, 2005 and December 31, 2004 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
------------------------- -------------------------
COMMON PREFERRED COMMON PREFERRED
---------- ---------- ---------- ----------
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) ...... $1,818,722 $ 496,943 -- $ 870,881
Net long-term capital gains .................... 6,621,797 1,809,325 -- 996,178
---------- ---------- ---------- ----------
Total distributions paid ....................... $8,440,519 $2,306,268 -- $1,867,059
========== ========== ========== ==========
PROVISION FOR INCOME TAXES. The Trust intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the Trust's policy to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for Federal income taxes is required.
As of December 31, 2005, the components of accumulated earnings/(losses)
on a tax basis were as follows:
Net unrealized appreciation on investments ............................... $ 47,949,175
Net unrealized appreciation on foreign currency and swap contracts ....... 740,643
Distributions payable .................................................... (33,051)
Undistributed ordinary income ............................................ 108,133
------------
Total .................................................................... $ 48,764,900
============
The following summarizes the tax cost of investments, swap contracts, and
related unrealized appreciation/depreciation at December 31, 2005:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
COST APPRECIATION DEPRECIATION (DEPRECIATION)
---- ------------ ------------ ---------------
Investments ........... $ 166,285,620 $59,350,785 $(11,401,610) $47,949,175
Swap contracts ........ -- 752,199 -- 752,199
----------- ------------ -----------
$60,102,984 $(11,401,610) $48,701,374
=========== ============ ===========
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Trust has entered into an
investment advisory agreement (the "Advisory Agreement") with the Adviser which
provides that the Trust will pay the Adviser a fee, computed weekly and paid
monthly, equal on an annual basis to 1.00% of the value of the Trust's average
weekly net assets including the liquidation value of preferred stock. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Trust's portfolio and oversees the administration of
all aspects of the Trust's business and affairs. The Adviser has agreed to
reduce the management fee on the incremental assets attributable to the
Cumulative Preferred Stock if the total return of the net asset value of the
common shares of the Trust, including distributions and advisory fee subject to
reduction, does not exceed the stated dividend rate or corresponding swap rate
of the Cumulative Preferred Stock for the fiscal year.
The Trust's total return on the net asset value of the common shares is
monitored on a monthly basis to assess whether the total return on the net asset
value of the common shares exceeds the stated dividend rate of each particular
series of Cumulative Preferred stock for the period. For the year ended December
31, 2005, the Trust's total return on the net asset value of the common shares
did not exceed the stated dividend rate or net swap expense of all outstanding
preferred stock. Thus, management fees with respect to the liquidation value of
the preferred stock assets were reduced by $498,275.
During the year ended December 31, 2005, Gabelli & Company, Inc. ("Gabelli
& Company"), an affiliate of the Adviser, received $56,544 in brokerage
commissions as a result of executing agency transactions in portfolio securities
on behalf of the Trust.
The cost of calculating the Trust's net asset value per share is a Trust
expense pursuant to the Advisory Agreement. During the year ended December 31,
2005, the Trust reimbursed the Adviser $45,000 in connection with the cost of
computing the Trust's net asset value, which is included in miscellaneous
expenses in the Statement of Operations.
The Trust is assuming its portion of the allocated cost of the Gabelli
Funds' Chief Compliance Officer in the amount of $5,047 for the year ended
December 31, 2005, which is included in payroll expenses in the Statement of
Operations.
13
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. PORTFOLIO SECURITIES. Cost of purchases and proceeds from the sales of
securities, other than short-term securities, for the year ended December 31,
2005 aggregated $36,453,849 and $25,789,502, respectively.
5. CAPITAL. The charter permits the Trust to issue 196,750,000 shares of common
stock (par value $0.001). The Board of the Trust has authorized the repurchase
of up to 1,700,000 shares on the open market when the shares are trading at a
discount of 10% or more (or such other percentage as the Board may determine
from time to time) from the net asset value of the shares. During the year ended
December 31, 2005, the Trust repurchased 139,500 shares of its common stock in
the open market at a cost of $1,437,218 and an average discount of approximately
11.01% from its net asset value. During the year ended December 31, 2004, the
Trust repurchased 48,700 shares of its common stock in the open market at a cost
of $444,435 and an average discount of approximately 13.60% from its net asset
value. All shares of common stock repurchased have been retired.
Transactions in capital stock were as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
------------------------ ---------------------
Shares Amount Shares Amount
------ ------ ------ ------
Net decrease from repurchase of common shares........ (139,500) $(1,437,218) (48,700) $(444,435)
-------- ----------- ------- ---------
Net decrease ........................................ (139,500) $(1,437,218) (48,700) $(444,435)
======== =========== ======= =========
The Trust's Articles of Incorporation authorize the issuance of up to
2,000,000 shares of $0.001 par value Cumulative Preferred Stock. The Cumulative
Preferred Stock is senior to the common stock and results in the financial
leveraging of the common stock. Such leveraging tends to magnify both the risks
and opportunities to common shareholders. Dividends on shares of the Cumulative
Preferred Stock are cumulative. The Trust is required by the 1940 Act and by the
Articles Supplementary to meet certain asset coverage tests with respect to the
Cumulative Preferred Stock. If the Trust fails to meet these requirements and
does not correct such failure, the Trust may be required to redeem, in part or
in full, the 6.00% Series B and Series C Auction Rate Cumulative Preferred Stock
at a redemption price of $25.00 and $25,000, respectively, per share plus an
amount equal to the accumulated and unpaid dividends whether or not declared on
such shares in order to meet these requirements. Additionally, failure to meet
the foregoing asset coverage requirements could restrict the Trust's ability to
pay dividends to common shareholders and could lead to sales of portfolio
securities at inopportune times. The income received on the Trust's assets may
vary in a manner unrelated to the fixed and variable rates, which could have
either a beneficial or detrimental impact on net investment income and gains
available to common shareholders.
On March 31, 2003, the Trust received net proceeds of $24,009,966 (after
underwriting discounts of $787,500 and offering expenses of $202,534) from the
public offering of 1,000,000 shares of 6.00% Series B Cumulative Preferred
Stock. Commencing April 2, 2008 and thereafter, the Trust, at its option, may
redeem the 6.00% Series B Cumulative Preferred Stock in whole or in part at the
redemption price at any time. The Board has authorized the repurchase of the
6.00% Series B Cumulative Preferred Stock in the open market at prices less than
the $25 liquidation value of the Cumulative Preferred Stock. During the year
ended December 31, 2005, the Trust did not repurchase any shares of 6.00% Series
B Cumulative Preferred Stock. At December 31, 2005, 993,100 shares of the 6.00%
Series B Cumulative Preferred Stock were outstanding and accrued dividends
amounted to $20,690.
On March 31, 2003, the Trust received net proceeds of $24,547,465 (after
underwriting discounts of $250,000 and offering expenses of $202,535) from the
public offering of 1,000 shares of Series C Auction Rate Cumulative Preferred
Stock. The dividend rate, as set by the auction process, which is generally held
every 7 days, is expected to vary with short-term interest rates. The dividend
rates of Series C Auction Rate Cumulative Preferred Stock ranged from 2.20% to
4.45% for the year ended December 31, 2005. Existing shareholders may submit an
order to hold, bid, or sell such shares on each auction date. Series C Auction
Rate Cumulative Preferred Stock shareholders may also trade shares in the
secondary market. The Trust, at its option, may redeem the Series C Auction Rate
Cumulative Preferred Stock in whole or in part at the redemption price at any
time. During the year ended December 31, 2005, the Trust did not redeem any
shares of Series C Auction Rate Cumulative Preferred Stock. At December 31,
2005, 1,000 shares of the Series C Auction Rate Cumulative Preferred Stock were
outstanding with an annualized dividend rate of 4.45% per share and accrued
dividends amounted to $12,361.
The holders of Cumulative Preferred Stock generally are entitled to one
vote per share held on each matter submitted to a vote of shareholders of the
Trust and will vote together with holders of common stock as a single class. The
holders of Cumulative Preferred Stock voting together as a single class also
have the right currently to elect two Directors and under certain circumstances
are entitled to elect a majority of the Board of Directors. In addition, the
affirmative vote of a majority of the votes entitled to be cast by holders of
all outstanding shares of the preferred stock, voting as a single class, will be
required to approve any plan of reorganization adversely affecting the preferred
stock, and the approval of two-thirds of each class, voting separately, of the
Trust's outstanding voting stock must approve the conversion of the Trust from a
closed-end to an open-end investment company. The approval of a majority (as
defined in the 1940 Act) of the outstanding preferred stock and a majority (as
defined in the 1940 Act) of the Trust's outstanding voting securities are
required to approve certain other actions, including changes in the Trust's
investment objectives or fundamental investment policies.
14
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. INDUSTRY CONCENTRATION. Because the Trust primarily invests in common stocks
and other securities of foreign and domestic companies in the
telecommunications, media, publishing, and entertainment industries, its
portfolio may be subject to greater risk and market fluctuations than a
portfolio of securities representing a broad range of investments.
7. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
8. OTHER MATTERS. The Adviser and/or affiliates have received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund trading practices involving certain funds managed by the Adviser.
GAMCO Investors, Inc., the Adviser's parent company, is responding to these
requests for documents and testimony. On a separate matter, in September 2005,
the Adviser was informed by the staff of the SEC that the staff may recommend to
the Commission that an administrative remedy and a monetary penalty be sought
from the Adviser in connection with the actions of two of seven closed-end funds
managed by the Adviser relating to Section 19(a) and Rule 19a-1 of the 1940 Act.
These provisions require registered investment companies to provide written
statements to shareholders when a dividend is made from a source other than net
investment income. While the two closed-end funds sent annual statements and
provided other materials containing this information, the funds did not send
written statements to shareholders with each distribution in 2002 and 2003. The
Adviser believes that all of the funds are now in compliance. The Adviser
believes that these matters would have no effect on the Trust or any material
adverse effect on the Adviser or its ability to manage the Trust. The staff's
notice to the Adviser did not relate to the Trust.
15
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE
OUTSTANDING THROUGHOUT EACH PERIOD: YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
OPERATING PERFORMANCE: 2005 2004 2003 2002 2001
-------- -------- -------- -------- --------
Net asset value, beginning of period .......................... $ 12.27 $ 10.56 $ 7.67 $ 10.52 $ 12.21
-------- -------- -------- -------- --------
Net investment income (loss) .................................. 0.16 0.04 (0.03) (0.00)(a) (0.02)
Net realized and unrealized gain (loss) on investments ........ 0.09 1.79 3.14 (2.68) (1.44)
-------- -------- -------- -------- --------
Total from investment operations .............................. 0.25 1.83 3.11 (2.68) (1.46)
-------- -------- -------- -------- --------
DISTRIBUTIONS TO PREFERRED STOCK SHAREHOLDERS:(e)
Net investment income ......................................... (0.03) (0.04) -- -- --
Net realized gain on investments .............................. (0.13) (0.09) (0.13) (0.17) (0.17)
-------- -------- -------- -------- --------
Total distributions to preferred stock shareholders ........... (0.16) (0.13) (0.13) (0.17) (0.17)
-------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO
COMMON STOCK SHAREHOLDERS RESULTING FROM OPERATIONS ......... 0.09 1.70 2.98 (2.85) (1.63)
-------- -------- -------- -------- --------
DISTRIBUTIONS TO COMMON STOCK SHAREHOLDERS:
Net investment income ......................................... (0.12) -- -- -- 0.00(a)
Net realized gain on investments .............................. (0.48) -- -- -- (0.06)
-------- -------- -------- -------- --------
Total distributions to common stock shareholders .............. (0.60) -- -- -- (0.06)
-------- -------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Increase in net asset value from repurchase of common shares .. 0.01 0.01 0.01 0.00(a) --
Increase in net asset value from repurchase of preferred
shares ...................................................... -- 0.00(a) -- -- --
Offering expenses charged to paid-in capital .................. (0.00)(a) -- (0.10) -- --
-------- -------- -------- -------- --------
Total capital share transactions .............................. 0.01 0.01 (0.09) 0.00(a) --
-------- -------- -------- -------- --------
NET ASSET VALUE ATTRIBUTABLE TO COMMON STOCK
SHAREHOLDERS, END OF PERIOD ................................. $ 11.77 $ 12.27 $ 10.56 $ 7.67 $ 10.52
======== ======== ======== ======== ========
Net asset value total return + ................................ 1.6% 16.2% 37.7% (27.1)% (13.3)%
======== ======== ======== ======== ========
Market value, end of period ................................... $ 10.15 $ 10.68 $ 9.07 $ 6.40 $ 9.01
======== ======== ======== ======== ========
Total investment return ++ .................................... 0.7% 17.8% 41.7% (29.0)% (12.1)%
======== ======== ======== ======== ========
RATIOS AND SUPPLEMENTAL DATA:
Net assets including liquidation value of preferred shares,
end of period (in 000's) .................................... $214,907 $223,739 $200,195 $132,683 $181,539
Net assets attributable to common shares,
end of period (in 000's) .................................... $165,079 $173,912 $150,195 $109,533 $150,672
Ratio of net investment income (loss) to average net assets
attributable to common shares ............................... 1.44% 0.71% (0.36)% (0.04)% (0.18)%
Ratio of operating expenses to average net assets attributable
to common stock net of fee reduction ........................ 1.55%(d) 1.87% 1.81% 1.46% 1.34%
Ratio of operating expenses to average net assets including
liquidation value of preferred shares net of fee reduction .. 1.20%(d) 1.41% 1.35% 1.18% 1.13%
Portfolio turnover rate ....................................... 12.4% 7.5% 10.9% 16.6% 25.4%
See accompanying notes to financial statements.
16
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE
OUTSTANDING THROUGHOUT EACH PERIOD: YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
2005 2004 2003 2002 2001
-------- -------- -------- ------- -------
PREFERRED STOCK:
7.92% CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) ........... -- -- -- $23,150 $30,867
Total shares outstanding (in 000's) ................... -- -- -- 926 1,235
Liquidation preference per share ...................... -- -- -- $ 25.00 $ 25.00
Average market value (b) .............................. -- -- -- $ 25.75 $ 25.50
Asset coverage per share .............................. -- -- -- $143.29 $147.00
6.00% CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) ........... $ 24,828 $ 24,828 $ 25,000 -- --
Total shares outstanding (in 000's) ................... 993 993 1,000 -- --
Liquidation preference per share ...................... $ 25.00 $ 25.00 $ 25.00 -- --
Average market value (b) .............................. $ 25.00 $ 24.84 $ 25.28 -- --
Asset coverage per share .............................. $ 107.83 $ 112.26 $ 100.10
AUCTION RATE CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) ........... $ 25,000 $ 25,000 $ 25,000 -- --
Total shares outstanding (in 000's) ................... 1 1 1 -- --
Liquidation preference per share ...................... $ 25,000 $ 25,000 $ 25,000 -- --
Average market value (b) .............................. $ 25,000 $ 25,000 $ 25,000 -- --
Asset coverage per share .............................. $107,825 $112,257 $100,097
ASSET COVERAGE (C) .................................... 431% 449% 400% 573% 588%
----------
+ Based on net asset value per share, adjusted for reinvestment of
distributions, at prices dependent upon the relationship of the net asset
value per share and the market value per share on the ex-dividend dates.
++ Based on market value per share, adjusted for reinvestment of
distributions.
(a) Amount represents less than $0.005 per share.
(b) Based on weekly prices.
(c) Asset coverage is calculated by combining all series of preferred stock.
(d) For the year ended December 31, 2005, the effect of the custodian fee
credits was minimal.
(e) Calculated based upon average common shares outstanding on the record
dates throughout the year.
See accompanying notes to financial statements.
17
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
The Gabelli Global Multimedia Trust Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Gabelli Global Multimedia Trust
Inc. (hereafter referred to as the "Trust") at December 31, 2005, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended and the financial highlights for each
of the periods presented, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 2005 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 28, 2006
18
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
ADDITIONAL FUND INFORMATION (UNAUDITED)
The business and affairs of the Trust are managed under the direction of
the Trust's Board of Directors. Information pertaining to the Directors and
officers of the Trust is set forth below. The Trust's Statement of Additional
Information includes additional information about The Gabelli Global Multimedia
Trust Inc. Directors and is available, without charge, upon request, by calling
800-GABELLI (800-422-3554) or by writing to The Gabelli Global Multimedia Trust
Inc. at One Corporate Center, Rye, NY 10580-1422.
TERM OF NUMBER OF
OFFICE AND FUNDS IN FUND
NAME, POSITION(S) LENGTH OF COMPLEX
ADDRESS 1 TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE SERVED 2 DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR 5
----------------- ---------- ------------- ---------------------- ------------------
INTERESTED DIRECTORS 3:
MARIO J. GABELLI Since 1994** 24 Chairman of the Board and Chief Executive Director of Morgan
Director and Officer of GAMCO Investors, Inc. and Group Holdings, Inc.
Chief Investment Officer Chief Investment Officer - Value Portfolios of (holding company)
Age: 63 Gabelli Funds, LLC and GAMCO Asset
Management Inc.; Chairman and Chief
Executive Officer of Lynch Interactive
Corporation (multimedia and services)
NON-INTERESTED DIRECTORS:
THOMAS E. BRATTER Since 1994** 3 Director, President and Founder of The John --
Director Dewey Academy (residential college
Age: 66 preparatory therapeutic high school)
ANTHONY J. COLAVITA 4 Since 2001** 34 Partner in the law firm of --
Director Anthony J. Colavita, P.C.
Age: 70
JAMES P. CONN 4 Since 1994* 14 Former Managing Director and Chief Investment Director of LaQuinta
Director Officer of Financial Security Assurance Holdings Corp. (hotels) and
Age: 67 Ltd. (insurance holding company) (1992-1998) First Republic Bank
(banking)
FRANK J. FAHRENKOPF JR. Since 1999*** 5 President and Chief Executive Officer of the Director of First
Director American Gaming Association; Partner in Republic Bank
Age: 66 the law firm of Hogan & Hartson LLP; (banking)
Co-Chairman of the Commission on
Presidential Debates; Former Chairman
of the Republican National Committee
ANTHONY R. PUSTORINO Since 1994* 14 Certified Public Accountant; Professor Director of Lynch
Director Emeritus, Pace University Corporation
Age: 80 (diversified
manufacturing)
WERNER J. ROEDER, MD Since 1999*** 23 Medical Director of Lawrence Hospital --
Director and practicing private physician
Age: 65
SALVATORE J. ZIZZA Since 1994*** 25 Chairman of Hallmark Electrical Supplies Corp. Director of
Director Hollis-Eden
Age: 60 Pharmaceuticals
(biotechnology) and
Earl Scheib, Inc.
(automotive services)
19
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
ADDITIONAL FUND INFORMATION (UNAUDITED) (CONTINUED)
TERM OF
OFFICE AND
NAME, POSITION(S) LENGTH OF
ADDRESS 1 TIME PRINCIPAL OCCUPATION(S)
AND AGE SERVED 2 DURING PAST FIVE YEARS
----------------- --------- ------------------------
OFFICERS:
BRUCE N. ALPERT Since 2003 Executive Vice President and Chief Operating
President and Treasurer Officer of Gabelli Funds, LLC since 1988 and
Age: 54 an officer of all of the registered investment
companies in the Gabelli Funds complex. Director
and President of the Gabelli Advisers, Inc. since 1998.
LAURISSA M. MARTIRE Since 2004 Vice President of The Gabelli Convertible and Income
Vice President Securities Fund Inc. since 2004; Assistant Vice President
Age: 29 of GAMCO Investors, Inc. since 2003; Prior to 2003,
Sales Assistant for GAMCO Investors, Inc.
LOAN P. NGUYEN Since 2004 Vice President of The Gabelli Global Multimedia
Vice President and Ombudsman Trust Inc. since 2004. Portfolio Administrator
Age: 23 for Gabelli Funds, LLC since 2004;
Student at Boston College prior to 2004.
JAMES E. MCKEE Since 1995 Vice President, General Counsel and Secretary of
Secretary GAMCO Investors, Inc. since 1999 and GAMCO
Age: 42 Asset Management Inc. since 1993; Secretary of
all of the registered investment companies in the
Gabelli Funds complex.
PETER D. GOLDSTEIN Since 2004 Director of Regulatory Affairs for GAMCO Investors, Inc.
Chief Compliance Officer since 2004; Chief Compliance Officer of all of the registered
Age: 52 investment companies in the Gabelli Funds complex;
Vice President of Goldman Sachs Asset Management from
2000 through 2004.
1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
2 The Trust's Board of Directors is divided into three classes, each class
having a term of three years. Each year the term of office of one class
expires and the successor or successors elected to such class serve for a
three year term. The three year term for each class expires as follows:
* - Term expires at the Trust's 2006 Annual Meeting of Shareholders and
until their successors are duly elected and qualified.
** - Term expires at the Trust's 2007 Annual Meeting of Shareholders and
until their successors are duly elected and qualified.
*** - Term expires at the Trust's 2008 Annual Meeting of Shareholders and
until their successors are duly elected and qualified.
Each officer will hold office for an indefinite term until the date he or
she resigns or retires or until his or her successor is elected and
qualified.
3 "Interested person" of the Trust as defined in the Investment Company Act
of 1940. Mr. Gabelli is considered an "interested person" because of his
affiliation with Gabelli Funds, LLC which acts as the Trust's investment
adviser. Effective November 16, 2005, Mr. Karl Otto Pohl resigned from the
Board of Directors and now serves as Director Emeritus.
4 Represents holders of the Trust's Preferred Stock.
5 This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934 (i.e. public companies)
or other investment companies registered under the 1940 Act.
CERTIFICATIONS
The Trust's Chief Executive Officer has certified to the New York Stock
Exchange that, as of June 6, 2005, he was not aware of any violation by the
Trust of applicable NYSE corporate governance listing standards. The Trust
reports to the SEC on Form N-CSR which contains certifications by the Trust's
principal executive officer and principal financial officer that relate to the
Trust's disclosure in such reports and that are required by Rule 30a-2(a) under
the Investment Company Act.
20
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
INCOME TAX INFORMATION (UNAUDITED)
DECEMBER 31, 2005
CASH DIVIDENDS AND DISTRIBUTIONS
TOTAL AMOUNT ORDINARY LONG-TERM DIVIDEND
PAYABLE RECORD PAID INVESTMENT CAPITAL REINVESTMENT
DATE DATE PER SHARE(e) INCOME GAINS PRICE
-------- ------ ------------ ------ --------- ------------
COMMON SHARES
03/24/05 03/16/05 $0.12000 $0.02650 $0.09350 $10.12950
06/24/05 06/16/05 0.12000 0.02650 0.09350 10.15760
09/26/05 09/16/05 0.12000 0.02650 0.09350 10.36650
12/23/05 12/15/05 0.24000 0.05300 0.18700 10.40200
-------- -------- --------
Total Common Stock $0.60000 $0.13250 $0.46750
-------- -------- --------
6.00% PREFERRED SHARES
03/28/05 03/18/05 $0.37500 $0.08280 $0.29220
06/27/05 06/20/05 0.37500 0.08280 0.29220
09/26/05 09/19/05 0.37500 0.08280 0.29220
12/27/05 12/19/05 0.37500 0.08280 0.29220
-------- -------- --------
Total Preferred Stock $1.50000 $0.33120 $1.16880
-------- -------- --------
AUCTION RATE PREFERRED SHARES
Auction Rate Preferred Shares pay dividends weekly based on a rate set at
auction, usually held every seven days. The percentage of 2005 distributions
derived from long-term capital gains for the Auction Rate Preferred Stock was
77.92%.
A Form 1099-DIV has been mailed to all shareholders of record for the
distributions mentioned above, setting forth specific amounts to be included in
the 2005 tax returns. Capital gain distributions are reported in box 2a of Form
1099-DIV.
CORPORATE DIVIDENDS RECEIVED DEDUCTION, QUALIFIED DIVIDEND INCOME AND U.S.
GOVERNMENT SECURITIES INCOME
The Trust paid to common and 6% preferred shareholders ordinary income
dividends of $0.13250 and $0.33120 per share, respectively, in 2005. The Trust
paid weekly distributions to Series C Auction Rate Preferred shareholders at
varying rates throughout the year, including an ordinary income dividend
totaling $183.48700 per share in 2005. For the year ended December 31, 2005,
100% of the ordinary dividend qualified for the dividend received deduction
available to corporations, and 100% of the ordinary income distribution was
qualified dividend income. The percentage of ordinary income dividends paid by
the Trust during 2005 derived from U.S. Treasury Securities was 5.10%. However,
the Trust did not hold more than 50% of its assets in U.S. Government Securities
at the end of each quarter during 2005. The percentage of U.S. Government
Securities held as of December 31, 2005 was 1.50%.
HISTORICAL DISTRIBUTION SUMMARY
SHORT- LONG-
TERM TERM NON-TAXABLE ADJUSTMENT
INVESTMENT CAPITAL CAPITAL RETURN OF TOTAL TO
INCOME GAINS(b) GAINS CAPITAL DISTRIBUTIONS(e) COST BASIS
---------- -------- ------- ----------- ---------------- ----------
COMMON STOCK
2005 ................. $0.12450 $ 0.00800 $ 0.46750 -- $ 0.60000 --
2004 ................. -- -- -- -- -- --
2003 ................. -- -- -- -- -- --
2002 ................. -- -- -- -- -- --
2001 ................. 0.00580 0.01060 0.04360 -- 0.06000 --
2000(a) .............. 0.16300 0.20880 1.20320 -- 1.57500 --
1999 ................. -- 1.28340 2.33660 -- 3.62000 --
1998 ................. -- 0.19950 0.60050 -- 0.80000 --
1997 ................. 0.00580 0.26820 0.57600 -- 0.85000 --
1996 ................. 0.01030 0.07900 0.28570 -- 0.37500 --
1995(c)............... 0.07880 0.15290 0.01830 -- 0.25000 --
1994 ................. 0.03050 0.00100 0.00140 $0.01710 0.05000 $0.01710(d)
7.92% PREFERRED STOCK
2003 ................. -- -- $ 0.52800 -- $ 0.52800 --
2002 ................. -- -- 1.98000 -- 1.98000 --
2001 ................. -- -- 1.98000 -- 1.98000 --
2000 ................. $0.21500 $ 0.23900 1.52600 -- 1.98000 --
1999 ................. -- 0.70200 1.27800 -- 1.98000 --
1998 ................. -- 0.49360 1.48640 -- 1.98000 --
1997 ................. 0.00770 0.35230 0.75650 -- 1.11650 --
6.00% PREFERRED STOCK
2005 ................. $0.31120 $ 0.02000 $ 1.16880 -- $ 1.50000 --
2004 ................. 0.41320 0.28440 0.80240 -- 1.50000 --
2003 ................. -- -- 1.10420 -- 1.10420 --
AUCTION RATE PREFERRED STOCK
2005 ................. $172.40170 $11.08530 $647.7330 -- $831.22000 --
2004 ................. 103.27300 71.04640 200.52090 -- 374.87000 --
2003 ................. -- -- 227.06000 -- 227.06000 --
----------
(a) On June 19, 2000, the Company also distributed Rights equivalent to $1.46
per share based upon full subscription of all issued shares.
(b) Taxable as ordinary income.
(c) On August 11, 1995, the Company also distributed Rights equivalent to
$0.46 per share based upon full subscription of all issued shares.
(d) Decrease in cost basis.
(e) Total amounts may differ due to rounding.
21
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLANS
ENROLLMENT IN THE PLAN
It is the policy of The Gabelli Global Multimedia Trust Inc. ("Multimedia
Trust") to automatically reinvest dividends payable to common shareholders. As a
"registered" shareholder you automatically become a participant in the
Multimedia Trust's Automatic Dividend Reinvestment Plan (the "Plan"). The Plan
authorizes the Multimedia Trust to issue common shares to participants upon an
income dividend or a capital gains distribution regardless of whether the shares
are trading at a discount or a premium to net asset value. All distributions to
shareholders whose shares are registered in their own names will be
automatically reinvested pursuant to the Plan in additional shares of the
Multimedia Trust. Plan participants may send their stock certificates to
Computershare Trust Company, N.A. ("Computershare") to be held in their dividend
reinvestment account. Registered shareholders wishing to receive their
distribution in cash must submit this request in writing to:
The Gabelli Global Multimedia Trust Inc.
c/o Computershare
P.O. Box 43010
Providence, RI 02940-3010
Shareholders requesting this cash election must include the shareholder's
name and address as they appear on the share certificate. Shareholders with
additional questions regarding the Plan or requesting a copy of the terms of the
Plan may contact Computershare at (800) 336-6983.
If your shares are held in the name of a broker, bank, or nominee, you
should contact such institution. If such institution is not participating in the
Plan, your account will be credited with a cash dividend. In order to
participate in the Plan through such institution, it may be necessary for you to
have your shares taken out of "street name" and re-registered in your own name.
Once registered in your own name your distributions will be automatically
reinvested. Certain brokers participate in the Plan. Shareholders holding shares
in "street name" at participating institutions will have dividends automatically
reinvested. Shareholders wishing a cash dividend at such institution must
contact their broker to make this change.
The number of shares of Common Stock distributed to participants in the
Plan in lieu of cash dividends is determined in the following manner. Under the
Plan, whenever the market price of the Multimedia Trust's common stock is equal
to or exceeds net asset value at the time shares are valued for purposes of
determining the number of shares equivalent to the cash dividends or capital
gains distribution, participants are issued shares of common stock valued at the
greater of (i) the net asset value as most recently determined or (ii) 95% of
the then current market price of the Multimedia Trust's common stock. The
valuation date is the dividend or distribution payment date or, if that date is
not a New York Stock Exchange ("NYSE") trading day, the next trading day. If the
net asset value of the common stock at the time of valuation exceeds the market
price of the common stock, participants will receive shares from the Multimedia
Trust valued at market price. If the Multimedia Trust should declare a dividend
or capital gains distribution payable only in cash, Computershare will buy
common stock in the open market, or on the NYSE or elsewhere, for the
participants' accounts, except that Computershare will endeavor to terminate
purchases in the open market and cause the Multimedia Trust to issue shares at
net asset value if, following the commencement of such purchases, the market
value of the common stock exceeds the then current net asset value.
The automatic reinvestment of dividends and capital gains distributions
will not relieve participants of any income tax which may be payable on such
distributions. A participant in the Plan will be treated for Federal income tax
purposes as having received, on a dividend payment date, a dividend or
distribution in an amount equal to the cash the participant could have received
instead of shares.
VOLUNTARY CASH PURCHASE PLAN
The Voluntary Cash Purchase Plan is yet another vehicle for our
shareholders to increase their investment in the Multimedia Trust. In order to
participate in the Voluntary Cash Purchase Plan, shareholders must have their
shares registered in their own name.
Participants in the Voluntary Cash Purchase Plan have the option of making
additional cash payments to Computershare for investments in the Multimedia
Trust's common shares at the then current market price. Shareholders may send an
amount from $250 to $10,000. Computershare will use these funds to purchase
shares in the open market on or about the 1st and 15th of each month.
Computershare will charge each shareholder who participates $0.75, plus a pro
rata share of the brokerage commissions. Brokerage charges for such purchases
are expected to be less than the usual brokerage charge for such transactions.
It is suggested that any voluntary cash payments be sent to Computershare, P.O.
Box 43010, Providence, RI 02940-3010 such that Computershare receives such
payments approximately 10 days before the 1st and 15th of the month. Funds not
received at least five days before the investment date shall be held for
investment until the next purchase date. A payment may be withdrawn without
charge if notice is received by Computershare at least 48 hours before such
payment is to be invested.
SHAREHOLDERS WISHING TO LIQUIDATE SHARES HELD AT COMPUTERSHARE must do so
in writing or by telephone. Please submit your request to the above mentioned
address or telephone number. Include in your request your name, address, and
account number. The cost to liquidate shares is $2.50 per transaction as well as
the brokerage commission incurred. Brokerage charges are expected to be less
than the usual brokerage charge for such transactions.
For more information regarding the Dividend Reinvestment Plan and
Voluntary Cash Purchase Plan, brochures are available by calling (914) 921-5070
or by writing directly to the Multimedia Trust.
The Multimedia Trust reserves the right to amend or terminate the Plan as
applied to any voluntary cash payments made and any dividend or distribution
paid subsequent to written notice of the change sent to the members of the Plan
at least 90 days before the record date for such dividend or distribution. The
Plan also may be amended or terminated by Computershare on at least 90 days'
written notice to participants in the Plan.
----------------------------------------------------------
The Annual Meeting of The Gabelli Global Multimedia
Trust's stockholders will be held at 10:00 A.M. on Monday,
May 15, 2006 at the Greenwich Library in Greenwich,
Connecticut.
----------------------------------------------------------
22
[GRAPHIC]
DIRECTORS AND OFFICERS
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
ONE CORPORATE CENTER, RYE, NY 10580-1422
DIRECTORS
Mario J. Gabelli, CFA
CHAIRMAN & CHIEF EXECUTIVE OFFICER,
GAMCO INVESTORS, INC.
Dr. Thomas E. Bratter
PRESIDENT, JOHN DEWEY ACADEMY
Anthony J. Colavita
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C.
James P. Conn
FORMER CHIEF INVESTMENT OFFICER,
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Frank J. Fahrenkopf, Jr.
PRESIDENT & CHIEF EXECUTIVE OFFICER,
AMERICAN GAMING ASSOCIATION
Anthony R. Pustorino
CERTIFIED PUBLIC ACCOUNTANT
PROFESSOR EMERITUS, PACE UNIVERSITY
Werner J. Roeder, MD
MEDICAL DIRECTOR,
LAWRENCE HOSPITAL
Salvatore J. Zizza
CHAIRMAN, HALLMARK ELECTRICAL SUPPLIES CORP.
OFFICERS
Bruce N. Alpert
PRESIDENT & TREASURER
Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
Laurissa M. Martire
VICE PRESIDENT
James E. McKee
SECRETARY
LoAn P. Nguyen
VICE PRESIDENT & OMBUDSMAN
INVESTMENT ADVISER
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
CUSTODIAN
State Street Bank and Trust Company
COUNSEL
Willkie Farr & Gallagher LLP
TRANSFER AGENT AND REGISTRAR
Computershare Trust Company, N.A.
STOCK EXCHANGE LISTING
6.00%
COMMON PREFERRED
------ ---------
NYSE-Symbol: GGT GGT PrB
Shares Outstanding: 14,030,753 993,100
The Net Asset Value appears in the Publicly Traded Funds column, under the
heading "Specialized Equity Funds," in Sunday's The New York Times and in
Monday's The Wall Street Journal. It is also listed in Barron's Mutual
Funds/Closed End Funds section under the heading "Specialized Equity Funds".
The Net Asset Value may be obtained each day by calling (914) 921-5070.
--------------------------------------------------------------------------------
For general information about the Gabelli Funds, call 800-GABELLI
(800-422-3554), fax us at 914-921-5118, visit Gabelli Funds' Internet homepage
at: WWW.GABELLI.COM or e-mail us at: closedend@gabelli.com
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Multimedia Trust may from time to time
purchase shares of its common stock in the open market when the Multimedia Trust
shares are trading at a discount of 10% or more from the net asset value of the
shares. The Multimedia Trust may also, from time to time, purchase shares of its
Cumulative Preferred Stock in the open market when the shares are trading at a
discount to the Liquidation Value of $25.00.
--------------------------------------------------------------------------------
[GRAPHIC]
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
ONE CORPORATE CENTER, RYE, NY 10580-1422
PHONE: 800-GABELLI (800-422-3554)
FAX: 914-921-5118 INTERNET: WWW.GABELLI.COM
E-MAIL: CLOSEDEND@GABELLI.COM GGT AR 2005
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, that relates to one or
more of the items set forth in paragraph (b) of this item's
instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's Board of
Directors has determined that Anthony R. Pustorino is qualified to serve as an
audit committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$46,001 in 2005 and $43,220 in 2004.
AUDIT-RELATED FEES
(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $8,600 in 2005 and $8,600 in 2004.
Audit-related fees represent services provided in the preparation of
Preferred Shares Reports.
TAX FEES
(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $2,880 in 2005 and $2,550
in 2004.
Tax fees represent tax compliance services provided in connection with
the review of the Registrant's tax returns.
ALL OTHER FEES
(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are
$0 in 2005 and $0 in 2004.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
Pre-Approval Policies and Procedures. The Audit Committee
("Committee") of the registrant is responsible for pre-approving (i)
all audit and permissible non-audit services to be provided by the
independent auditors to the registrant and (ii) all permissible
non-audit services to be provided by the independent auditors to the
Adviser, Gabelli Funds, LLC, and any affiliate of Gabelli Funds, LLC
("Gabelli") that provides services to the registrant (a "Covered
Services Provider") if the independent auditors' engagement related
directly to the operations and financial reporting of the registrant.
The Committee may delegate its responsibility to pre-approve any such
audit and permissible non-audit services to the Chairperson of the
Committee, and the Chairperson must report to the Committee, at its
next regularly scheduled meeting after the Chairperson's pre-approval
of such services, his or her decision(s). The Committee may also
establish detailed pre-approval policies and procedures for
pre-approval of such services in accordance with applicable laws,
including the delegation of some or all of the Committee's
pre-approval responsibilities to the other persons (other than Gabelli
or the registrant's officers). Pre-approval by the Committee of any
permissible non-audit services is not required so long as: (i) the
aggregate amount of all such permissible non-audit services provided
to the registrant, Gabelli and any Covered Services Provider
constitutes not more than 5% of the total amount of revenues paid by
the registrant to its independent auditors during the fiscal year in
which the permissible non-audit services are provided; (ii) the
permissible non-audit services were not recognized by the registrant
at the time of the engagement to be non-audit services; and (iii) such
services are promptly brought to the attention of the Committee and
approved by the Committee or Chairperson prior to the completion of
the audit.
(e)(2) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) 100%
(c) 100%
(d) N/A
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was zero percent (0%).
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled
by, or under common control with the adviser that provides ongoing
services to the registrant for each of the last two fiscal years of
the registrant was $0 in 2005 and $0 in 2004.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately designated audit committee consisting of the
following members: Anthony R. Pustorino, Werner J. Roeder and Salvatore J.
Zizza.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The Proxy Voting Policies are attached herewith.
THE VOTING OF PROXIES ON BEHALF OF CLIENTS
Rules 204(4)-2 and 204-2 under the Investment Advisers Act of 1940 and Rule
30b1-4 under the Investment Company Act of 1940 require investment advisers to
adopt written policies and procedures governing the voting of proxies on behalf
of their clients.
These procedures will be used by GAMCO Asset Management Inc., Gabelli
Funds, LLC, Gabelli Securities, Inc., and Gabelli Advisers, Inc. (collectively,
the "Advisers") to determine how to vote proxies relating to portfolio
securities held by their clients, including the procedures that the Advisers use
when a vote presents a conflict between the interests of the shareholders of an
investment company managed by one of the Advisers, on the one hand, and those of
the Advisers; the principal underwriter; or any affiliated person of the
investment company, the Advisers, or the principal underwriter. These procedures
will not apply where the Advisers do not have voting discretion or where the
Advisers have agreed to with a client to vote the client's proxies in accordance
with specific guidelines or procedures supplied by the client (to the extent
permitted by ERISA).
I. PROXY VOTING COMMITTEE
The Proxy Voting Committee was originally formed in April 1989 for the purpose
of formulating guidelines and reviewing proxy statements within the parameters
set by the substantive proxy voting guidelines originally published by GAMCO
Investors, Inc. in 1988 and updated periodically, a copy of which are appended
as Exhibit A. The Committee will include representatives of Research,
Administration, Legal, and the Advisers. Additional or replacement members of
the Committee will be nominated by the Chairman and voted upon by the entire
Committee.
Meetings are held as needed basis to form views on the manner in which the
Advisers should vote proxies on behalf of their clients.
In general, the Director of Proxy Voting Services, using the Proxy
Guidelines, recommendations of Institutional Shareholder Corporate Governance
Service ("ISS"), other third-party services and the analysts of Gabelli &
Company, Inc., will determine how to vote on each issue. For non-controversial
matters, the Director of Proxy Voting Services may vote the proxy if the vote is
(1) consistent with the recommendations of the issuer's Board of Directors and
not contrary to the Proxy Guidelines; (2) consistent with the recommendations of
the issuer's Board of Directors and is a non-controversial issue not covered by
the Proxy Guidelines; or (3) the vote is contrary to the recommendations of the
Board of Directors but is consistent with the Proxy Guidelines. In those
instances, the Director of Proxy Voting Services or the Chairman of the
Committee may sign and date the proxy statement indicating how each issue will
be voted.
All matters identified by the Chairman of the Committee, the Director of
Proxy Voting Services or the Legal Department as controversial, taking into
account the recommendations of ISS or other third party services and the
analysts of Gabelli & Company, Inc., will be presented to the Proxy Voting
Committee. If the Chairman of the Committee, the Director of Proxy Voting
Services or the Legal Department has identified the matter as one that (1) is
controversial; (2) would benefit from deliberation by the Proxy Voting
Committee; or (3) may give rise to a conflict of interest between the Advisers
and their clients, the Chairman of the Committee will initially determine what
vote to recommend that the Advisers should cast and the matter will go before
the Committee.
A. CONFLICTS OF INTEREST.
The Advisers have implemented these proxy voting procedures
in order to prevent conflicts of interest from influencing their proxy
voting decisions. By following the Proxy Guidelines, as well as the
recommendations of ISS, other third-party services and the analysts of
Gabelli & Company, the Advisers are able to avoid, wherever possible,
the influence of potential conflicts of interest. Nevertheless,
circumstances may arise in which one or more of the Advisers are faced
with a conflict of interest or the appearance of a conflict of
interest in connection with its vote. In general, a conflict of
interest may arise when an Adviser knowingly does business with an
issuer, and may appear to have a material conflict between its own
interests and the interests of the shareholders of an investment
company managed by one of the Advisers regarding how the proxy is to
be voted. A conflict also may exist when an Adviser has actual
knowledge of a material business arrangement between an issuer and an
affiliate of the Adviser.
In practical terms, a conflict of interest may arise, for example,
when a proxy is voted for a company that is a client of one of the
Advisers, such as GAMCO Asset Management Inc. A conflict also may
arise when a client of one of the Advisers has made a shareholder
proposal in a proxy to be voted upon by one or more of the Advisers.
The Director of Proxy Voting Services, together with the Legal
Department, will scrutinize all proxies for these or other situations
that may give rise to a conflict of interest with respect to the
voting of proxies.
A. OPERATION OF PROXY VOTING COMMITTEE.
For matters submitted to the Committee, each member of the Committee
will receive, prior to the meeting, a copy of the proxy statement, any
relevant third party research, a summary of any views provided by the
Chief Investment Officer and any recommendations by Gabelli & Company,
Inc. analysts. The Chief Investment Officer or the Gabelli & Company,
Inc. analysts may be invited to present their viewpoints. If the
Director of Proxy Voting Services or the Legal Department believe that
the matter before the committee is one with respect to which a
conflict of interest may exist between the Advisers and their clients,
counsel will provide an opinion to the Committee concerning the
conflict. If the matter is one in which the interests of the clients
of one or more of Advisers may diverge, counsel will so advise and the
Committee may make different recommendations as to different clients.
For any matters where the recommendation may trigger appraisal rights,
counsel will provide an opinion concerning the likely risks and merits
of such an appraisal action.
Each matter submitted to the Committee will be determined by the vote of a
majority of the members present at the meeting. Should the vote concerning one
or more recommendations be tied in a vote of the Committee, the Chairman of the
Committee will cast the deciding vote. The Committee will notify the proxy
department of its decisions and the proxies will be voted accordingly.
Although the Proxy Guidelines express the normal preferences for the voting
of any shares not covered by a contrary investment guideline provided by the
client, the Committee is not bound by the preferences set forth in the Proxy
Guidelines and will review each matter on its own merits. Written minutes of all
Proxy Voting Committee meetings will be maintained. The Advisers subscribe to
ISS, which supplies current information on companies, matters being voted on,
regulations, trends in proxy voting and information on corporate governance
issues.
If the vote cast either by the analyst or as a result of the deliberations
of the Proxy Voting Committee runs contrary to the recommendation of the Board
of Directors of the issuer, the matter will be referred to legal counsel to
determine whether an amendment to the most recently filed Schedule 13D is
appropriate.
II. SOCIAL ISSUES AND OTHER CLIENT GUIDELINES
If a client has provided special instructions relating to the voting of
proxies, they should be noted in the client's account file and forwarded to the
proxy department. This is the responsibility of the investment professional or
sales assistant for the client. In accordance with Department of Labor
guidelines, the Advisers' policy is to vote on behalf of ERISA accounts in the
best interest of the plan participants with regard to social issues that carry
an economic impact. Where an account is not governed by ERISA, the Advisers will
vote shares held on behalf of the client in a manner consistent with any
individual investment/voting guidelines provided by the client. Otherwise the
Advisers will abstain with respect to those shares.
III. CLIENT RETENTION OF VOTING RIGHTS
If a client chooses to retain the right to vote proxies or if there is any
change in voting authority, the following should be notified by the investment
professional or sales assistant for the client.
- Operations
- Legal Department
- Proxy Department
- Investment professional assigned to the account
In the event that the Board of Directors (or a Committee thereof) of one or
more of the investment companies managed by one of the Advisers has retained
direct voting control over any security, the Proxy Voting Department will
provide each Board Member (or Committee member) with a copy of the proxy
statement together with any other relevant information including recommendations
of ISS or other third-party services.
IV. VOTING RECORDS
The Proxy Voting Department will retain a record of matters voted upon by
the Advisers for their clients. The Advisers' staff may request proxy-voting
records for use in presentations to current or prospective clients. Requests for
proxy voting records should be made at least ten days prior to client meetings.
If a client wishes to receive a proxy voting record on a quarterly,
semi-annual or annual basis, please notify the Proxy Voting Department. The
reports will be available for mailing approximately ten days after the quarter
end of the period. First quarter reports may be delayed since the end of the
quarter falls during the height of the proxy season.
A letter is sent to the custodians for all clients for which the Advisers
have voting responsibility instructing them to forward all proxy materials to:
[Adviser name]
Attn: Proxy Voting Department
One Corporate Center
Rye, New York 10580-1433
The sales assistant sends the letters to the custodians along with the
trading/DTC instructions. Proxy voting records will be retained in compliance
with Rule 204-2 under the Investment Advisers Act.
V. VOTING PROCEDURES
1. Custodian banks, outside brokerage firms and Wexford Clearing Services
Corporation are responsible for forwarding proxies directly to GAMCO.
Proxies are received in one of two forms:
o Shareholder Vote Authorization Forms (VAFs) - Issued by ADP. VAFs must be
voted through the issuing institution causing a time lag. ADP is an outside
service contracted by the various institutions to issue proxy materials.
o Proxy cards which may be voted directly.
2. Upon receipt of the proxy, the number of shares each form represents is
logged into the proxy system according to security.
3. In the case of a discrepancy such as an incorrect number of shares, an
improperly signed or dated card, wrong class of security, etc., the issuing
custodian is notified by phone. A corrected proxy is requested. Any arrangements
are made to insure that a proper proxy is received in time to be voted
(overnight delivery, fax, etc.). When securities are out on loan on record date,
the custodian is requested to supply written verification.
4. Upon receipt of instructions from the proxy committee (see Administrative),
the votes are cast and recorded for each account on an individual basis.
Since January 1, 1992, records have been maintained on the Proxy Edge system.
The system is backed up regularly. From 1990 through 1991, records were
maintained on the PROXY VOTER system and in hardcopy format. Prior to 1990,
records were maintained on diskette and in hardcopy format.
PROXY EDGE records include:
Security Name and Cusip Number
Date and Type of Meeting (Annual, Special, Contest)
Client Name
Adviser or Fund Account Number
Directors' Recommendation
How GAMCO voted for the client on each issue
The rationale for the vote when it appropriate
Records prior to the institution of the PROXY EDGE system include:
Security name
Type of Meeting (Annual, Special, Contest)
Date of Meeting
Name of Custodian
Name of Client
Custodian Account Number
Adviser or Fund Account Number
Directors' recommendation
How the Adviser voted for the client on each issue
Date the proxy statement was received and by whom
Name of person posting the vote
Date and method by which the vote was cast
o From these records individual client proxy voting records are compiled. It
is our policy to provide institutional clients with a proxy voting record
during client reviews. In addition, we will supply a proxy voting record at
the request of the client on a quarterly, semi-annual or annual basis.
5. VAFs are kept alphabetically by security. Records for the current proxy
season are located in the Proxy Voting Department office. In preparation for the
upcoming season, files are transferred to an offsite storage facility during
January/February.
6. Shareholder Vote Authorization Forms issued by ADP are always sent directly
to a specific individual at ADP.
7. If a proxy card or VAF is received too late to be voted in the conventional
matter, every attempt is made to vote on one of the following manners:
o VAFs can be faxed to ADP up until the time of the meeting. This is followed
up by mailing the original form.
o When a solicitor has been retained, the solicitor is called. At the
solicitor's direction, the proxy is faxed.
8. In the case of a proxy contest, records are maintained for each opposing
entity.
9. Voting in Person
a) At times it may be necessary to vote the shares in person. In this case, a
"legal proxy" is obtained in the following manner:
o Banks and brokerage firms using the services at ADP:
The back of the VAF is stamped indicating that we wish to vote in person.
The forms are then sent overnight to ADP. ADP issues individual legal proxies
and sends them back via overnight (or the Adviser can pay messenger charges). A
lead-time of at least two weeks prior to the meeting is needed to do this.
Alternatively, the procedures detailed below for banks not using ADP may be
implemented.
o Banks and brokerage firms issuing proxies directly:
The bank is called and/or faxed and a legal proxy is requested.
All legal proxies should appoint:
"REPRESENTATIVE OF [ADVISER NAME] WITH FULL POWER OF SUBSTITUTION."
b) The legal proxies are given to the person attending the meeting along with
the following supplemental material:
o A limited Power of Attorney appointing the attendee an Adviser
representative.
o A list of all shares being voted by custodian only. Client names and
account numbers are not included. This list must be presented, along with
the proxies, to the Inspectors of Elections and/or tabulator at least
one-half hour prior to the scheduled start of the meeting. The tabulator
must "qualify" the votes (i.e. determine if the vote have previously been
cast, if the votes have been rescinded, etc. vote have previously been
cast, etc.).
o A sample ERISA and Individual contract.
o A sample of the annual authorization to vote proxies form.
o A copy of our most recent Schedule 13D filing (if applicable).
APPENDIX A
PROXY GUIDELINES
==============================
PROXY VOTING GUIDELINES
==============================
GENERAL POLICY STATEMENT
It is the policy of GAMCO INVESTORS, INC. to vote in the best economic interests
of our clients. As we state in our Magna Carta of Shareholders Rights,
established in May 1988, we are neither for nor against management. We are for
shareholders.
At our first proxy committee meeting in 1989, it was decided that each proxy
statement should be evaluated on its own merits within the framework first
established by our Magna Carta of Shareholders Rights. The attached guidelines
serve to enhance that broad framework.
We do not consider any issue routine. We take into consideration all of our
research on the company, its directors, and their short and long-term goals for
the company. In cases where issues that we generally do not approve of are
combined with other issues, the negative aspects of the issues will be factored
into the evaluation of the overall proposals but will not necessitate a vote in
opposition to the overall proposals.
BOARD OF DIRECTORS
The advisers do not consider the election of the Board of Directors a routine
issue. Each slate of directors is evaluated on a case-by-case basis.
Factors taken into consideration include:
o Historical responsiveness to shareholders
This may include such areas as:
-Paying greenmail
-Failure to adopt shareholder resolutions receiving a majority of
shareholder votes
o Qualifications
o Nominating committee in place
o Number of outside directors on the board
o Attendance at meetings
o Overall performance
SELECTION OF AUDITORS
In general, we support the Board of Directors' recommendation for audit
BLANK CHECK PREFERRED STOCK
We oppose the issuance of blank check preferred stock.
Blank check preferred stock allows the company to issue stock and establish
dividends, voting rights, etc. without further shareholder approval.
CLASSIFIED BOARD
A classified board is one where the directors are divided into classes with
overlapping terms. A different class is elected at each annual meeting.
While a classified board promotes continuity of directors facilitating long
range planning, we feel directors should be accountable to shareholders on an
annual basis. We will look at this proposal on a case-by-case basis taking into
consideration the board's historical responsiveness to the rights of
shareholders.
Where a classified board is in place we will generally not support attempts to
change to an annually elected board.
When an annually elected board is in place, we generally will not support
attempts to classify the board.
INCREASE AUTHORIZED COMMON STOCK
The request to increase the amount of outstanding shares is considered on a
case-by-case basis.
Factors taken into consideration include:
o Future use of additional shares
-Stock split
-Stock option or other executive compensation plan
-Finance growth of company/strengthen balance sheet
-Aid in restructuring
-Improve credit rating
-Implement a poison pill or other takeover defense
o Amount of stock currently authorized but not yet issued or reserved for
stock option plans
o Amount of additional stock to be authorized and its dilutive effect
We will support this proposal if a detailed and verifiable plan for the use of
the additional shares is contained in the proxy statement.
CONFIDENTIAL BALLOT
We support the idea that a shareholder's identity and vote should be treated
with confidentiality.
However, we look at this issue on a case-by-case basis.
In order to promote confidentiality in the voting process, we endorse the use of
independent Inspectors of Election.
CUMULATIVE VOTING
In general, we support cumulative voting.
Cumulative voting is a process by which a shareholder may multiply the number of
directors being elected by the number of shares held on record date and cast the
total number for one candidate or allocate the voting among two or more
candidates.
Where cumulative voting is in place, we will vote against any proposal to
rescind this shareholder right.
Cumulative voting may result in a minority block of stock gaining representation
on the board. When a proposal is made to institute cumulative voting, the
proposal will be reviewed on a case-by-case basis. While we feel that each board
member should represent all shareholders, cumulative voting provides minority
shareholders an opportunity to have their views represented.
DIRECTOR LIABILITY AND INDEMNIFICATION
We support efforts to attract the best possible directors by limiting the
liability and increasing the indemnification of directors, except in the case of
insider dealing.
EQUAL ACCESS TO THE PROXY
The SEC's rules provide for shareholder resolutions. However, the resolutions
are limited in scope and there is a 500 word limit on proponents' written
arguments. Management has no such limitations. While we support equal access to
the proxy, we would look at such variables as length of time required to
respond, percentage of ownership, etc.
FAIR PRICE PROVISIONS
Charter provisions requiring a bidder to pay all shareholders a fair price are
intended to prevent two-tier tender offers that may be abusive. Typically, these
provisions do not apply to board-approved transactions.
We support fair price provisions because we feel all shareholders should be
entitled to receive the same benefits.
Reviewed on a case-by-case basis.
GOLDEN PARACHUTES
Golden parachutes are severance payments to top executives who are terminated or
demoted after a takeover.
We support any proposal that would assure management of its own welfare so that
they may continue to make decisions in the best interest of the company and
shareholders even if the decision results in them losing their job. We do not,
however, support excessive golden parachutes. Therefore, each proposal will be
decided on a case-by- case basis.
Note: Congress has imposed a tax on any parachute that is more than three times
the executive's average annual compensation.
ANTI-GREENMAIL PROPOSALS
We do not support greenmail. An offer extended to one shareholder should be
extended to all shareholders equally across the board.
LIMIT SHAREHOLDERS' RIGHTS TO CALL SPECIAL MEETINGS
We support the right of shareholders to call a special meeting.
CONSIDERATION OF NONFINANCIAL EFFECTS OF A MERGER
This proposal releases the directors from only looking at the financial effects
of a merger and allows them the opportunity to consider the merger's effects on
employees, the community, and consumers.
As a fiduciary, we are obligated to vote in the best economic interests of our
clients. In general, this proposal does not allow us to do that. Therefore, we
generally cannot support this proposal.
Reviewed on a case-by-case basis.
MERGERS, BUYOUTS, SPIN-OFFS, RESTRUCTURINGS
Each of the above is considered on a case-by-case basis. According to the
Department of Labor, we are not required to vote for a proposal simply because
the offering price is at a premium to the current market price. We may take into
consideration the long term interests of the shareholders.
MILITARY ISSUES
Shareholder proposals regarding military production must be evaluated on a
purely economic set of criteria for our ERISA clients. As such, decisions will
be made on a case-by-case basis.
In voting on this proposal for our non-ERISA clients, we will vote according to
the client's direction when applicable. Where no direction has been given, we
will vote in the best economic interests of our clients. It is not our duty to
impose our social judgment on others.
NORTHERN IRELAND
Shareholder proposals requesting the signing of the MacBride principles for the
purpose of countering the discrimination of Catholics in hiring practices must
be evaluated on a purely economic set of criteria for our ERISA clients. As
such, decisions will be made on a case-by-case basis.
In voting on this proposal for our non-ERISA clients, we will vote according to
client direction when applicable. Where no direction has been given, we will
vote in the best economic interests of our clients. It is not our duty to impose
our social judgment on others.
OPT OUT OF STATE ANTI-TAKEOVER LAW
This shareholder proposal requests that a company opt out of the coverage of the
state's takeover statutes. Example: Delaware law requires that a buyer must
acquire at least 85% of the company's stock before the buyer can exercise
control unless the board approves.
We consider this on a case-by-case basis. Our decision will be based on the
following:
o State of Incorporation
o Management history of responsiveness to shareholders
o Other mitigating factors
POISON PILL
In general, we do not endorse poison pills.
In certain cases where management has a history of being responsive to the needs
of shareholders and the stock is very liquid, we will reconsider this position.
REINCORPORATION
Generally, we support reincorporation for well-defined business reasons. We
oppose reincorporation if proposed solely for the purpose of reincorporating in
a state with more stringent anti-takeover statutes that may negatively impact
the value of the stock.
STOCK OPTION PLANS
Stock option plans are an excellent way to attract, hold and motivate directors
and employees. However, each stock option plan must be evaluated on its own
merits, taking into consideration the following:
o Dilution of voting power or earnings per share by more than 10%
o Kind of stock to be awarded, to whom, when and how much
o Method of payment
o Amount of stock already authorized but not yet issued under existing stock
option plans
SUPERMAJORITY VOTE REQUIREMENTS
Supermajority vote requirements in a company's charter or bylaws require a level
of voting approval in excess of a simple majority of the outstanding shares. In
general, we oppose supermajority-voting requirements. Supermajority requirements
often exceed the average level of shareholder participation. We support
proposals' approvals by a simple majority of the shares voting.
LIMIT SHAREHOLDERS RIGHT TO ACT BY WRITTEN CONSENT
Written consent allows shareholders to initiate and carry on a shareholder
action without having to wait until the next annual meeting or to call a special
meeting. It permits action to be taken by the written consent of the same
percentage of the shares that would be required to effect proposed action at a
shareholder meeting.
Reviewed on a case-by-case basis.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
PORTFOLIO MANAGER
-----------------
Mr. Mario J. Gabelli, CFA, is primarily responsible for the day-to-day
management of The Gabelli Global Multimedia Trust Inc., (the Trust). Mr. Gabelli
has served as Chairman, Chief Executive Officer, and Chief Investment Officer
-Value Portfolios of GAMCO Investors, Inc. and its affiliates since their
organization.
MANAGEMENT OF OTHER ACCOUNTS
----------------------------
The table below shows the number of other accounts managed by Mario J. Gabelli
and the total assets in each of the following categories: registered investment
companies, other paid investment vehicles and other accounts. For each category,
the table also shows the number of accounts and the total assets in the accounts
with respect to which the advisory fee is based on account performance.
# of Accounts
Managed with Total Assets with
Total Advisory Fee Advisory Fee
Name of Portfolio # of Accounts Based on Based on
Manager Type of Accounts Managed Total Assets Performance Performance
-------- ---------------- ------- ------------ ----------- -----------
Mario J. Gabelli Registered Investment 24 $12.8B* 5 $4.6B
Companies:
Other Pooled Investment 20 $946.4M* 19 $704.6M
Vehicles:
Other Accounts: 1,882 $10.0B 5 $1.3B
* Represents the portion of assets for which the portfolio manager has primary
responsibility in the accounts indicated. The accounts indicated may contain
additional assets under the primary responsibility of other portfolio managers.
POTENTIAL CONFLICTS OF INTEREST
-------------------------------
As reflected above, Mr. Gabelli manages accounts in addition to the Trust.
Actual or apparent conflicts of interest may arise when a Portfolio Manager also
has day-to-day management responsibilities with respect to one or more other
accounts. These potential conflicts include:
ALLOCATION OF LIMITED TIME AND ATTENTION. As indicated above, Mr. Gabelli
manages multiple accounts. As a result, he will not be able to devote all of his
time to management of the Trust. Mr. Gabelli, therefore, may not be able to
formulate as complete a strategy or identify equally attractive investment
opportunities for each of those accounts as might be the case if he were to
devote all of his attention to the management of only the Trust.
ALLOCATION OF LIMITED INVESTMENT OPPORTUNITIES. As indicated above, Mr. Gabelli
manages managed accounts with investment strategies and/or policies that are
similar to the Trust. In these cases, if the he identifies an investment
opportunity that may be suitable for multiple accounts, a Fund may not be able
to take full advantage of that opportunity because the opportunity may be
allocated among all or many of these accounts or other accounts managed
primarily by other Portfolio Managers of the Adviser, and their affiliates. In
addition, in the event Mr. Gabelli determines to purchase a security for more
than one account in an aggregate amount that may influence the market price of
the security, accounts that purchased or sold the security first may receive a
more favorable price than accounts that made subsequent transactions.
SELECTION OF BROKER/DEALERS. Because of Mr. Gabelli's position with the
Distributor and his indirect majority ownership interest in the Distributor, he
may have an incentive to use the Distributor to execute portfolio transactions
for a Fund.
PURSUIT OF DIFFERING STRATEGIES. At times, Mr. Gabelli may determine that an
investment opportunity may be appropriate for only some of the accounts for
which he exercises investment responsibility, or may decide that certain of the
funds or accounts should take differing positions with respect to a particular
security. In these cases, he may execute differing or opposite transactions for
one or more accounts which may affect the market price of the security or the
execution of the transaction, or both, to the detriment of one or more other
accounts.
VARIATION IN COMPENSATION. A conflict of interest may arise where the financial
or other benefits available to Mr. Gabelli differ among the accounts that he
manages. If the structure of the Adviser's management fee or the Portfolio
Manager's compensation differs among accounts (such as where certain accounts
pay higher management fees or performance-based management fees), the Portfolio
Manager may be motivated to favor certain accounts over others. The Portfolio
Manager also may be motivated to favor accounts in which he has an investment
interest, or in which the Adviser, or their affiliates have investment
interests. Similarly, the desire to maintain assets under management or to
enhance a Portfolio Manager's performance record or to derive other rewards,
financial or otherwise, could influence the Portfolio Manager in affording
preferential treatment to those accounts that could most significantly benefit
the Portfolio Manager. For example, as reflected above, if Mr. Gabelli manages
accounts which have performance fee arrangements, certain portions of his
compensation will depend on the achievement of performance milestones on those
accounts. Mr. Gabelli could be incented to afford preferential treatment to
those accounts and thereby by subject to a potential conflict of interest.
The Adviser, and the Funds have adopted compliance policies and procedures that
are designed to address the various conflicts of interest that may arise for the
Adviser and their staff members. However, there is no guarantee that such
policies and procedures will be able to detect and prevent every situation in
which an actual or potential conflict may arise.
COMPENSATION STRUCTURE FOR MARIO J. GABELLI
-------------------------------------------
Mr. Gabelli receives incentive-based variable compensation based on a percentage
of net revenues received by the Adviser for managing the Trust. Net revenues are
determined by deducting from gross investment management fees the firm's
expenses (other than Mr. Gabelli's compensation) allocable to this Trust. Five
closed-end registered investment companies (including this Trust) managed by Mr.
Gabelli have arrangements whereby the Adviser will only receive its investment
advisory fee attributable to the liquidation value of outstanding preferred
stock (and Mr. Gabelli would only receive his percentage of such advisory fee)
if certain performance levels are met. Additionally, he receives similar
incentive based variable compensation for managing other accounts within the
firm and its affiliates. This method of compensation is based on the premise
that superior long-term performance in managing a portfolio should be rewarded
with higher compensation as a result of growth of assets through appreciation
and net investment activity. The level of compensation is not determined with
specific reference to the performance of any account against any specific
benchmark. One of the other registered investment companies managed by Mr.
Gabelli has a performance (fulcrum) fee arrangement for which his compensation
is adjusted up or down based on the performance of the investment company
relative to an index. Mr. Gabelli manages other accounts with performance fees.
Compensation for managing these accounts has two components. One component is
based on a percentage of net revenues to the investment adviser for managing the
account. The second component is based on absolute performance of the account,
with respect to which a percentage of such performance fee is paid to Mr.
Gabelli. As an executive officer of the Adviser's parent company, GBL, Mr.
Gabelli also receives ten percent of the net operating profits of the parent
company. He receives no base salary, no annual bonus, and no stock options.
OWNERSHIP OF SHARES IN THE FUND
-------------------------------
Mario Gabelli owned 539,206.55 shares of the Trust as of December 31, 2005.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
=============================================================================================================================
(C) TOTAL NUMBER OF (D) MAXIMUM NUMBER (OR
SHARES (OR UNITS) APPROXIMATE DOLLAR VALUE) OF
(A) TOTAL NUMBER OF PURCHASED AS PART OF SHARES (OR UNITS) THAT MAY YET
SHARES (OR UNITS) (B) AVERAGE PRICE PAID PUBLICLY ANNOUNCED PLANS BE PURCHASED UNDER THE PLANS
PERIOD PURCHASED PER SHARE (OR UNIT) OR PROGRAMS OR PROGRAMS
=============================================================================================================================
=============================================================================================================================
Month #1 Common - N/A Common - N/A Common - N/A Common - 14,066,253
07/01/05
through Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - 993,100
07/31/05
=============================================================================================================================
=============================================================================================================================
Month #2 Common - 10,000 Common - $10.4569 Common - 10,000 Common - 14,066,253 - 10,000
08/01/05 = 14,056,253
through Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - N/A
08/31/05 Preferred Series B - 993,100
=============================================================================================================================
=============================================================================================================================
Month #3 Common - N/A Common - N/A Common - N/A Common - 14,056,253
09/01/05
through Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - 993,100
09/30/05
=============================================================================================================================
=============================================================================================================================
Month #4 Common - N/A Common - N/A Common - N/A Common - 14,056,253
10/01/05
through Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - 993,100
10/31/05
=============================================================================================================================
=============================================================================================================================
Month #5 Common - 6,900 Common - $10.2583 Common - 6,900 Common - 14,056,253 - 6,900
11/01/05 = 14,049,353
through Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - N/A
11/30/05 Preferred Series B - 993,100
=============================================================================================================================
=============================================================================================================================
Month #6 Common - 18,600 Common - $10.2205 Common - 18,600 Common - 14,049,353 - 18,600
12/01/05 = 14,030,753
through Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - N/A
12/31/05 Preferred Series B - 993,100
=============================================================================================================================
=============================================================================================================================
Total Common - 35,500 Common - $10.2945 Common - 35,500 N/A
Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - N/A
=============================================================================================================================
Footnote columns (c) and (d) of the table, by disclosing the following
information in the aggregate for all plans or programs publicly announced:
a. The date each plan or program was announced - The notice of the potential
repurchase of common and preferred shares occurs quarterly in the Fund's
quarterly report in accordance with Section 23(c) of the Investment Company
Act of 1940, as amended.
b. The dollar amount (or share or unit amount) approved - Any or all common
shares outstanding may be repurchased when the Fund's common shares are
trading at a discount of 10% or more from the net asset value of the
shares.
Any or all preferred shares outstanding may be repurchased when the Fund's
preferred shares are trading at a discount to the liquidation value of
$25.00.
c. The expiration date (if any) of each plan or program - The Fund's
repurchase plans are ongoing.
d. Each plan or program that has expired during the period covered by the
table - The Fund's repurchase plans are ongoing.
e. Each plan or program the registrant has determined to terminate prior to
expiration, or under which the registrant does not intend to make further
purchases. - The Fund's repurchase plans are ongoing.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Gabelli Global Multimedia Trust Inc.
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By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer
Date March 10, 2006
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
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Bruce N. Alpert, Principal Executive Officer &
Principal Financial Officer
Date March 10, 2006
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* Print the name and title of each signing officer under his or her signature.