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, 2008
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. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
(THE GABELLI GLOBAL MULTIMEDIA TRUST INC. LOGO)
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
Annual Report
December 31, 2008
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 managers' 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.
Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2008.
COMPARATIVE RESULTS
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2008 (a)
Since
Inception
Quarter 1 Year 3 Year 5 Year 10 Year (11/15/94)
------- ------- ------- ------ ------- ----------
GABELLI GLOBAL MULTIMEDIA TRUST
NAV TOTAL RETURN (b) ..................... (36.48)% (60.00)% (18.54)% (8.73)% (2.08)% 4.16%
INVESTMENT TOTAL RETURN (c) .............. (37.06) (62.65) (19.03) (8.84) (2.33) 3.38
Nasdaq Composite Index ...................... (24.61) (40.54) (10.58) (4.67) (3.24) 5.25
MSCI World Free Index ....................... (21.77) (40.71) (8.10) (0.51) (0.65) 4.52(d)
Lipper Global Multi-Cap Growth Fund Average.. (23.04) (45.18) (8.76) (0.90) 0.11 5.10
(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 RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED. INVESTORS SHOULD CAREFULLY CONSIDER THE INVESTMENT
OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND BEFORE INVESTING. THE
NASDAQ COMPOSITE AND MSCI WORLD FREE INDICES ARE UNMANAGED INDICATORS OF
STOCK MARKET PERFORMANCE. THE LIPPER GLOBAL MULTI-CAP GROWTH FUND AVERAGE
REFLECTS THE AVERAGE PERFORMANCE OF OPEN-END MUTUAL FUNDS CLASSIFIED IN
THIS PARTICULAR CATEGORY. DIVIDENDS ARE CONSIDERED REINVESTED EXCEPT FOR
THE NASDAQ COMPOSITE AND MSCI WORLD FREE INDICES. YOU CANNOT INVEST
DIRECTLY IN AN INDEX.
(b) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN THE NET ASSET
VALUE ("NAV") PER SHARE, REINVESTMENT OF DISTRIBUTIONS AT NAV ON THE
EX-DIVIDEND DATE, AND ADJUSTMENTS FOR RIGHTS OFFERINGS AND ARE NET OF
EXPENSES. SINCE INCEPTION RETURN IS BASED ON AN INITIAL NAV 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 IS BASED ON AN
INITIAL OFFERING PRICE OF $7.50.
(d) FROM NOVEMBER 30, 1994, THE DATE CLOSEST TO THE FUND'S INCEPTION FOR WHICH
DATA IS AVAILABLE.
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
February 20, 2009
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, 2008:
Entertainment ....................... 18.2%
U.S. Government Obligations ......... 15.3%
Cable ............................... 11.0%
Broadcasting ........................ 7.1%
Telecommunications: National ........ 7.0%
Hotels and Gaming ................... 6.8%
Telecommunications: Regional ........ 6.5%
Wireless Communications ............. 5.3%
Publishing .......................... 4.4%
Computer Software and Services ...... 3.9%
Satellite ........................... 2.5%
Telecommunications: Long Distance ... 2.2%
Retail .............................. 1.6%
Equipment ........................... 1.5%
Diversified Industrial .............. 1.3%
Computer Hardware ................... 1.0%
Consumer Services ................... 1.0%
Consumer Products ................... 0.9%
Business Services ................... 0.9%
Business Services: Advertising ...... 0.7%
Electronics ......................... 0.5%
Food and Beverage ................... 0.2%
Energy and Utilities ................ 0.1%
Financial Services .................. 0.1%
-----
100.0%
=====
THE GABELLI GLOBAL MULTIMEDIA TRUST INC. (THE "FUND") FILES A COMPLETE
SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SECURITIES AND EXCHANGE COMMISSION (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, 2008. SHAREHOLDERS
MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE FUND AT
800-GABELLI (800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE ON THE SEC'S
WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE SEC'S PUBLIC
REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE PUBLIC
REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. A description of
the Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.
The Annual Meeting of The Gabelli Global Multimedia Trust's shareholders will be
held on Monday, May 18, 2009 at the Greenwich Library in Greenwich, Connecticut.
2
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2008
SHARES COST MARKET VALUE
------------ ------------ ------------
COMMON STOCKS -- 84.7%
DISTRIBUTION COMPANIES -- 52.7%
BROADCASTING -- 7.1%
1,300 Asahi Broadcasting Corp. ......................... $ 53,834 $ 145,847
6,000 CanWest Global Communications Corp.+ (a) ......... 52,331 3,536
12,000 CanWest Global Communications Corp., Cl. A+ ...... 82,710 5,832
18,000 CanWest Global Communications Corp.,
Sub-Voting+ ................................... 82,556 11,373
58,000 CBS Corp., Cl. A ................................. 671,985 477,920
6,400 Chubu-Nippon Broadcasting Co. Ltd. ............... 46,376 49,421
5,000 Citadel Broadcasting Corp.+ ...................... 14,028 800
20,000 Cogeco Inc. ...................................... 388,830 403,402
2,000 Corus Entertainment Inc., Cl. B, New York ........ 5,257 22,940
13,000 Corus Entertainment Inc., Cl. B, Toronto ......... 26,464 147,112
9,000 Cox Radio Inc., Cl. A+ ........................... 55,500 54,090
90,000 Discovery Communications Inc., Cl. A+ ............ 1,260,382 1,274,400
60,000 Discovery Communications Inc., Cl. C+ ............ 544,983 803,400
24,000 Fisher Communications Inc. ....................... 1,080,334 495,360
28 Fuji Television Network Inc. ..................... 61,010 39,568
55,000 Gray Television Inc. ............................. 468,754 22,000
9,000 Gray Television Inc., Cl. A ...................... 94,493 5,220
10,000 Grupo Radio Centro SAB de CV, ADR ................ 46,871 85,750
40,000 Hearst-Argyle Television Inc. .................... 364,701 242,400
4,550 Lagardere SCA .................................... 100,163 183,417
34,000 LIN TV Corp., Cl. A+ ............................. 166,417 37,060
4,000 M6 Metropole Television .......................... 35,208 76,981
8,566 Media Prima Berhad ............................... 1,353 2,748
4,500 Nippon Television Network Corp. .................. 644,544 469,112
4,650 NRJ Group ........................................ 22,694 34,064
1,000 NTN Buzztime Inc.+ ............................... 862 130
500 Radio One Inc., Cl. A+ ........................... 5,510 225
3,500 RTL Group SA ..................................... 134,552 206,770
1,906 Saga Communications Inc., Cl. A+ ................. 9,709 3,145
83,000 Salem Communications Corp., Cl. A+ ............... 714,201 62,250
78,000 Sinclair Broadcast Group Inc., Cl. A ............. 800,416 241,800
25,000 Societe Television Francaise 1 ................... 249,649 362,802
2,000 Spanish Broadcasting System Inc., Cl. A+ ......... 930 194
50,000 Television Broadcasts Ltd. ....................... 187,673 162,899
138,000 Tokyo Broadcasting System Inc. ................... 2,607,608 2,076,470
258 TV Asahi Corp. ................................... 434,628 342,956
240,000 TV Azteca SA de CV, CPO .......................... 58,305 95,317
26,000 UTV Media plc .................................... 105,595 41,120
40,000 Young Broadcasting Inc., Cl. A+ .................. 147,179 1,284
------------ ------------
11,828,595 8,691,115
------------ ------------
SHARES COST MARKET VALUE
------------ ------------ ------------
BUSINESS SERVICES -- 0.9%
15,000 BB Holdings Ltd.+ ................................ $ 60,294 $ 38,625
11,244 Cockleshell Ltd.+ ................................ 0 8,649
1,000 Convergys Corp.+ ................................. 17,738 6,410
100,000 Ideation Acquisition Corp.+ ...................... 800,000 728,000
6,000 Impellam Group plc+ .............................. 8,600 2,070
8,000 Interactive Data Corp. ........................... 52,250 197,280
3,000 Moody's Corp. .................................... 72,575 60,270
2,040 Shellproof Ltd.+ ................................. 2,016 1,422
1,500 Shellshock Ltd.+ ................................. 851 1,197
------------ ------------
1,014,324 1,043,923
------------ ------------
CABLE -- 11.0%
16,578 Austar United Communications Ltd.+ ............... 16,894 8,553
241,000 Cablevision Systems Corp., Cl. A ................. 2,678,314 4,058,440
500,000 Charter Communications Inc., Cl. A+ .............. 1,597,670 40,900
38,500 Cogeco Cable Inc. ................................ 789,219 1,076,253
34,000 Comcast Corp., Cl. A ............................. 540,308 573,920
10,000 Comcast Corp., Cl. A, Special .................... 50,471 161,500
15,000 Mediacom Communications Corp., Cl. A+ ............ 126,904 64,500
146,690 Rogers Communications Inc., Cl. B, New York ...... 941,439 4,412,435
19,310 Rogers Communications Inc., Cl. B, Toronto ....... 148,207 572,339
38,000 Scripps Networks Interactive Inc., Cl. A ......... 1,645,091 836,000
20,000 Shaw Communications Inc., Cl. B, New York ........ 94,046 353,600
78,000 Shaw Communications Inc., Cl. B, Toronto ......... 105,571 1,365,395
------------ ------------
8,734,134 13,523,835
------------ ------------
CONSUMER SERVICES -- 1.0%
1,000 1-800-FLOWERS.COM Inc., Cl. A+ ................... 9,790 3,820
4,000 Bowlin Travel Centers Inc.+ ...................... 3,022 4,700
20,000 H&R Block Inc. ................................... 258,838 454,400
25,000 IAC/InterActiveCorp.+ ............................ 598,480 393,250
110,000 Liberty Media Corp. - Interactive, Cl. A+ ........ 706,496 343,200
4,000 TiVo Inc.+ ....................................... 27,943 28,640
------------ ------------
1,604,569 1,228,010
------------ ------------
DIVERSIFIED INDUSTRIAL -- 1.3%
27,500 Bouygues SA ...................................... 721,862 1,154,434
18,432 Contax Participacoes SA, ADR ..................... 7,571 13,824
25,000 General Electric Co. ............................. 913,850 405,000
7,700 Hutchison Whampoa Ltd. ........................... 71,267 38,598
7,908 Malaysian Resources Corp. Berhad ................. 35,568 1,611
------------ ------------
1,750,118 1,613,467
------------ ------------
ENERGY AND UTILITIES -- 0.1%
10,000 El Paso Electric Co.+ ............................ 80,438 180,900
------------ ------------
See accompanying notes to financial statements.
3
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2008
SHARES COST MARKET VALUE
------------ ------------ ------------
COMMON STOCKS (CONTINUED)
DISTRIBUTION COMPANIES (CONTINUED)
ENTERTAINMENT -- 4.4%
1,000 Blockbuster Inc., Cl. A+ ......................... $ 3,480 $ 1,260
2,800 British Sky Broadcasting Group plc, ADR .......... 50,468 79,520
12,000 Canal+ Groupe .................................... 10,818 68,724
4,005 Chestnut Hill Ventures+ (a) ...................... 241,092 134,888
328,000 Grupo Televisa SA, ADR ........................... 5,823,747 4,900,320
6,000 Regal Entertainment Group, Cl. A ................. 80,555 61,260
20,000 Take-Two Interactive Software Inc. ............... 179,238 151,200
------------ ------------
6,389,398 5,397,172
------------ ------------
EQUIPMENT -- 1.5%
11,000 American Tower Corp., Cl. A+ ..................... 131,710 322,520
2,000 Amphenol Corp., Cl. A ............................ 7,794 47,960
78,000 Corning Inc. ..................................... 654,599 743,340
500 L-3 Communications Holdings Inc. ................. 5,500 36,890
50,000 Motorola Inc. .................................... 538,801 221,500
15,000 Nextwave Wireless Inc.+ .......................... 27,320 1,350
3,000 Nortel Networks Corp., New York+ ................. 1,590 780
2,093 Nortel Networks Corp., Toronto+ .................. 56,394 543
10,000 QUALCOMM Inc. .................................... 24,966 358,300
40,000 Sycamore Networks Inc.+ .......................... 136,260 107,600
2,000 The Furukawa Electric Co. Ltd. ................... 7,419 9,465
------------ ------------
1,592,353 1,850,248
------------ ------------
FINANCIAL SERVICES -- 0.1%
3,000 Interactive Brokers Group Inc., Cl. A+ ........... 68,739 53,670
3,000 Tree.com Inc.+ ................................... 23,302 7,800
------------ ------------
92,041 61,470
------------ ------------
FOOD AND BEVERAGE -- 0.2%
5,282 Compass Group plc ................................ 37,648 26,124
2,498 Pernod-Ricard SA ................................. 175,325 183,930
------------ ------------
212,973 210,054
------------ ------------
RETAIL -- 1.6%
65,000 Best Buy Co. Inc. ................................ 2,768,494 1,827,150
18,000 HSN Inc.+ ........................................ 302,931 130,860
6,000 Ticketmaster Entertainment Inc.+ ................. 180,599 38,520
------------ ------------
3,252,024 1,996,530
------------ ------------
SATELLITE -- 2.5%
3,000 Asia Satellite Telecommunications Holdings Ltd. .. 5,693 2,942
28,000 DISH Network Corp., Cl. A+ ....................... 354,924 310,520
7,000 EchoStar Corp., Cl. A+ ........................... 81,727 104,090
6,000 PT Indosat Tbk, ADR .............................. 58,079 154,920
30 SKY Perfect JSAT Holdings Inc. ................... 15,472 14,346
109,000 The DIRECTV Group Inc.+ .......................... 2,623,313 2,497,190
------------ ------------
3,139,208 3,084,008
------------ ------------
SHARES/
UNITS COST MARKET VALUE
------------ ------------ ------------
TELECOMMUNICATIONS: LONG DISTANCE -- 2.2%
8,000 AT&T Inc. ........................................ $ 193,324 $ 228,000
45,000 Frontier Communications Corp. .................... 645,109 393,300
24,000 Philippine Long Distance Telephone Co., ADR ...... 329,883 1,126,800
83,000 Sprint Nextel Corp.+ ............................. 697,135 151,890
1,000 Startec Global Communications Corp.+ (a) ......... 4,645 2
450,000 Telecom Italia SpA ............................... 1,188,204 719,349
8,000 Windstream Corp. ................................. 28,821 73,600
------------ ------------
3,087,121 2,692,941
------------ ------------
TELECOMMUNICATIONS: NATIONAL -- 7.0%
9,000 BT Group plc, ADR ................................ 375,870 179,820
5,000 China Telecom Corp. Ltd., ADR .................... 126,250 190,250
5,000 China Unicom Hong Kong Ltd., ADR ................. 38,450 61,000
89,000 Deutsche Telekom AG, ADR ......................... 1,151,660 1,361,700
40,000 Elisa Oyj ........................................ 378,848 683,903
1,000 FairPoint Communications Inc. .................... 10,135 3,280
3,000 France Telecom SA, ADR ........................... 48,120 84,210
3,305 Hellenic Telecommunications Organization SA ...... 39,578 54,670
500 Magyar Telekom
Telecommunications plc, ADR ................... 9,650 7,020
50 Nippon Telegraph & Telephone Corp. ............... 230,089 258,136
3,000 PT Telekomunikasi Indonesia, ADR ................. 12,340 75,210
6,000 Rostelecom, ADR .................................. 41,408 332,880
34,000 Swisscom AG, ADR ................................. 881,899 1,099,220
2,844 Telecom Corp. of New Zealand Ltd., ADR ........... 24,405 19,055
40,000 Telefonica SA, ADR ............................... 1,163,875 2,695,600
37,000 Telefonos de Mexico SAB de CV, Cl. L, ADR ........ 102,138 774,780
18,172 TeliaSonera AB ................................... 51,070 89,390
38,000 Telmex Internacional SAB de CV, ADR .............. 72,932 431,680
2,400 Telstra Corp. Ltd., ADR .......................... 30,324 32,760
20,000 tw telecom inc.+ ................................. 341,155 169,400
100 Virgin Media Inc. ................................ 2,344 499
------------ ------------
5,132,540 8,604,463
------------ ------------
TELECOMMUNICATIONS: REGIONAL -- 6.5%
1,000 BCE Inc. ......................................... 39,422 20,490
4,266 Bell Aliant Regional Communications
Income Fund ................................... 67,481 81,380
2,537 Bell Aliant Regional Communications
Income Fund (a)(b) ............................ 40,134 48,397
4,000 Brasil Telecom Participacoes SA, ADR ............. 231,475 154,520
10,000 CenturyTel Inc. .................................. 307,700 273,300
80,000 Cincinnati Bell Inc.+ ............................ 514,609 154,400
100,000 Qwest Communications International Inc. .......... 396,720 364,000
18,432 Tele Norte Leste Participacoes SA, ADR ........... 244,808 256,573
10,000 Telecom Argentina SA, ADR+ ....................... 26,440 76,000
See accompanying notes to financial statements.
4
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2008
SHARES COST MARKET VALUE
------------ ------------ ------------
COMMON STOCKS (CONTINUED)
DISTRIBUTION COMPANIES (CONTINUED)
TELECOMMUNICATIONS: REGIONAL (CONTINUED)
65,000 Telephone & Data Systems Inc. .................... $ 2,452,491 $ 2,063,750
50,000 Telephone & Data Systems Inc., Special ........... 1,950,017 1,405,000
24,000 TELUS Corp. ...................................... 439,742 722,625
10,000 TELUS Corp., Non-Voting .......................... 251,757 284,200
62,000 Verizon Communications Inc. ...................... 2,163,220 2,101,800
------------ ------------
9,126,016 8,006,435
------------ ------------
WIRELESS COMMUNICATIONS -- 5.3%
59,000 America Movil SAB de CV, Cl. L, ADR .............. 434,078 1,828,410
8,000 Clearwire Corp., Cl. A+ .......................... 117,075 39,440
2,513 Grupo Iusacell SA de CV+ ......................... 9,492 3,882
102 Hutchison Telecommunications International Ltd. .. 79 27
240,000 Jasmine International Public Co. Ltd.+ ........... 5,040 2,553
900 NTT DoCoMo Inc. .................................. 1,400,085 1,751,351
30,000 Price Communications Corp., Escrow+ (a) .......... 0 0
34,000 SK Telecom Co. Ltd., ADR ......................... 761,600 618,120
503 Telemig Celular Participacoes SA, ADR ............ 14,537 15,085
3,178 Tim Participacoes SA, ADR ........................ 38,554 39,693
30,000 United States Cellular Corp.+ .................... 1,127,335 1,297,200
89,000 Vimpel-Communications, ADR ....................... 118,168 637,240
2,000 Vivo Participacoes SA, ADR ....................... 20,648 25,080
8,000 Vodafone Group plc, ADR .......................... 156,665 163,520
200 Xanadoo Co.+ ..................................... 143,565 52,500
------------ ------------
4,346,921 6,474,101
------------ ------------
TOTAL DISTRIBUTION COMPANIES ..................... 61,382,773 64,658,672
------------ ------------
COPYRIGHT/CREATIVITY COMPANIES -- 32.0%
BUSINESS SERVICES: ADVERTISING -- 0.7%
60,000 Clear Channel Outdoor Holdings Inc., Cl. A+ ...... 1,235,153 369,000
20,000 Harte-Hanks Inc. ................................. 147,611 124,800
4,200 Havas SA ......................................... 20,733 8,570
8,000 JC Decaux SA ..................................... 196,558 136,725
2,000 Publicis Groupe .................................. 13,971 51,140
6,000 R. H. Donnelley Corp.+ ........................... 22,044 2,220
38,000 The Interpublic Group of Companies Inc.+ ......... 373,129 150,480
29,000 Trans-Lux Corp.+ ................................. 212,798 22,330
------------ ------------
2,221,997 865,265
------------ ------------
COMPUTER HARDWARE -- 1.0%
15,000 Apple Inc.+ ...................................... 1,802,815 1,280,250
------------ ------------
COMPUTER SOFTWARE AND SERVICES -- 3.9%
66,000 Activision Blizzard Inc.+ ........................ 407,347 570,240
21,500 Alibaba.com Ltd.+ ................................ 37,826 15,480
5,000 America Online Latin America Inc., Cl. A+ (a) .... 2,150 10
3,000 Atlus Co. Ltd. ................................... 17,662 13,006
35,000 eBay Inc.+ ....................................... 829,566 488,600
7,000 Google Inc., Cl. A+ .............................. 3,408,130 2,153,550
8,000 Jupitermedia Corp.+ .............................. 9,654 2,960
8,000 Limelight Networks Inc.+ ......................... 63,854 19,600
120,000 Yahoo! Inc.+ ..................................... 3,317,213 1,464,000
------------ ------------
8,093,402 4,727,446
------------ ------------
SHARES COST MARKET VALUE
------------ ------------ ------------
CONSUMER PRODUCTS -- 0.9%
3,000 Nintendo Co. Ltd. ................................ $ 966,282 $ 1,116,933
------------ ------------
ELECTRONICS -- 0.5%
3,500 IMAX Corp.+ ...................................... 24,453 15,610
30,000 Intel Corp. ...................................... 716,946 439,800
11,000 LSI Corp.+ ....................................... 52,972 36,190
3,570 Royal Philips Electronics NV ..................... 29,368 70,936
6,000 Zoran Corp.+ ..................................... 87,649 40,980
------------ ------------
911,388 603,516
------------ ------------
ENTERTAINMENT -- 13.8%
235,000 Aruze Corp. ...................................... 5,651,620 2,327,965
6,000 Ascent Media Corp., Cl. A+ ....................... 147,293 131,040
1,161 Corporacion Interamericana de Entretenimiento
SAB de CV, Cl. B+ ............................. 2,441 830
20,000 Crown Media Holdings Inc., Cl. A+ ................ 81,890 57,000
25,000 DreamWorks Animation SKG Inc., Cl. A+ ............ 601,790 631,500
70,000 GMM Grammy Public Co. Ltd. ....................... 55,457 19,020
77,843 Liberty Global Inc., Cl. A+ ...................... 968,833 1,239,261
75,000 Liberty Global Inc., Cl. C+ ...................... 906,299 1,138,500
35,500 Liberty Media Corp. - Capital, Cl. A+ ............ 127,830 167,205
142,000 Liberty Media Corp. - Entertainment, Cl. A+ ...... 671,107 2,482,160
1,000 Live Nation Inc.+ ................................ 17,269 5,740
22,891 Macrovision Solutions Corp.+ ..................... 434,858 289,571
1,690 New Motion Inc.+ ................................. 12,500 1,944
100,000 Shaw Brothers (Hong Kong) Ltd. ................... 145,929 165,157
10,500 STV Group plc+ ................................... 250,707 11,700
4,000 The Walt Disney Co. .............................. 99,873 90,760
220,000 Time Warner Inc. ................................. 3,289,448 2,213,200
53,000 Viacom Inc., Cl. A+ .............................. 1,117,913 1,066,360
150,000 Vivendi .......................................... 4,319,985 4,850,917
3,000 Warner Music Group Corp. ......................... 15,705 9,060
3,000 World Wrestling Entertainment Inc., Cl. A ........ 33,305 33,240
------------ ------------
18,952,052 16,932,130
------------ ------------
HOTELS AND GAMING -- 6.8%
158,000 Boyd Gaming Corp. ................................ 4,090,306 747,340
90,000 Gaylord Entertainment Co.+ ....................... 2,053,373 975,600
4,500 Greek Organization of Football Prognostics SA .... 48,690 129,358
65,000 International Game Technology .................... 2,004,305 772,850
18,000 Interval Leisure Group Inc.+ ..................... 349,536 97,020
474,000 Ladbrokes plc .................................... 4,736,608 1,260,766
130,000 Las Vegas Sands Corp.+ ........................... 2,752,962 770,900
120,000 Melco Crown Entertainment Ltd., ADR+ ............. 886,236 380,400
55,000 MGM Mirage+ ...................................... 2,075,516 756,800
175,000 Pinnacle Entertainment Inc.+ ..................... 1,069,621 1,344,000
6,000 Starwood Hotels & Resorts Worldwide Inc. ......... 151,088 107,400
3,000 Wyndham Worldwide Corp. .......................... 50,610 19,650
23,500 Wynn Resorts Ltd.+ ............................... 1,116,897 993,110
------------ ------------
21,385,748 8,355,194
------------ ------------
See accompanying notes to financial statements.
5
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2008
SHARES COST MARKET VALUE
------------ ------------ ------------
COMMON STOCKS (CONTINUED)
COPYRIGHT/CREATIVITY COMPANIES (CONTINUED)
PUBLISHING -- 4.4%
10,000 AH Belo Corp., Cl. A ............................. $ 170,274 $ 21,800
20,000 Arnoldo Mondadori Editore SpA .................... 63,827 96,817
125,000 Belo Corp., Cl. A ................................ 1,056,299 195,000
4,000 Gannett Co. Inc. ................................. 72,014 32,000
1,000 Idearc Inc. ...................................... 3,740 85
90,000 Il Sole 24 Ore ................................... 745,662 283,987
144,400 Independent News & Media plc ..................... 193,226 84,304
800 John Wiley & Sons Inc., Cl. B .................... 5,693 28,600
15,000 Lee Enterprises Inc. ............................. 51,300 6,150
15,000 Meredith Corp. ................................... 481,031 256,800
100,000 Nation Multimedia Group Public Co. Ltd.+ (a) ..... 84,677 8,367
50,000 New Straits Times Press Berhad ................... 35,757 14,090
210,000 News Corp., Cl. A ................................ 2,494,577 1,908,900
40,000 News Corp., Cl. B ................................ 396,739 383,200
150,000 Oriental Press Group Ltd. ........................ 46,315 14,129
8,000 Playboy Enterprises Inc., Cl. A+ ................. 77,525 21,800
974,000 Post Publishing Public Co. Ltd. (a) .............. 47,100 146,884
4,000 PRIMEDIA Inc. .................................... 4,530 8,680
2,360 Sanoma Oyj ....................................... 63,150 30,213
1,000 Scholastic Corp. ................................. 16,500 13,580
252,671 Singapore Press Holdings Ltd. .................... 742,032 545,415
300 Spir Communication ............................... 23,329 8,253
3,000 Sun-Times Media Group Inc., Cl. A+ ............... 15,140 150
14,000 Telegraaf Media Groep NV ......................... 264,091 242,285
20,000 The E.W. Scripps Co., Cl. A ...................... 188,666 44,200
38,000 The McGraw-Hill Companies Inc. ................... 1,217,995 881,220
11,091 United Business Media Ltd. ....................... 123,260 81,086
3,000 Wolters Kluwer NV ................................ 67,969 56,464
------------ ------------
8,752,418 5,414,459
------------ ------------
TOTAL COPYRIGHT/CREATIVITY COMPANIES ............. 63,086,102 39,295,193
------------ ------------
TOTAL COMMON STOCKS .............................. 124,468,875 103,953,865
------------ ------------
PREFERRED STOCKS -- 0.0%
BUSINESS SERVICES -- 0.0%
2,209 Interep National Radio Sales Inc.,
4.000% Cv. Pfd.,
Ser. A (a)(b)(c)+ ............................. 196,201 0
------------ ------------
WARRANTS -- 0.0%
BROADCASTING -- 0.0%
2,250 Granite Broadcasting Corp.,
Ser. A, expire 06/04/12+ ...................... 0 22
254 Granite Broadcasting Corp.,
Ser. B, expire 06/04/12+ ...................... 0 3
------------ ------------
TOTAL WARRANTS ................................... 0 25
------------ ------------
PRINCIPAL MARKET
AMOUNT COST VALUE
------------ ------------ ------------
CONVERTIBLE CORPORATE BONDS -- 0.0%
BUSINESS SERVICES -- 0.0%
$ 50,000 BBN Corp., Sub. Deb. Cv.,
6.000%, 04/01/12+ (a) ......................... $ 49,478 $ 0
------------ ------------
U.S. GOVERNMENT OBLIGATIONS -- 15.3%
U.S. TREASURY CASH MANAGEMENT BILLS -- 3.2%
3,936,000 U.S. Treasury Cash Management Bills,
0.110% to 0.391%++,
04/29/09 to 06/24/09 .......................... 3,933,157 3,933,836
------------ ------------
U.S. TREASURY BILLS -- 11.5%
14,117,000 U.S. Treasury Bills,
0.020% to 1.898%++,
01/02/09 to 06/18/09 .......................... 14,112,756 14,113,115
------------ ------------
U.S. TREASURY NOTES -- 0.6%
790,000 4.500%, 04/30/09 .............................. 798,566 801,419
------------ ------------
TOTAL U.S. GOVERNMENT OBLIGATIONS ................ 18,844,479 18,848,370
------------ ------------
TOTAL INVESTMENTS -- 100.0% ..................................... $143,559,033 122,802,260
============
OTHER ASSETS AND LIABILITIES (NET) .............................. (401,570)
PREFERRED STOCK
(972,149 preferred shares outstanding) ....................... (46,781,225)
------------
NET ASSETS -- COMMON STOCK
(13,994,153 common shares outstanding) ....................... $ 75,619,465
============
NET ASSET VALUE PER COMMON SHARE
($75,619,465 / 13,994,153 shares outstanding) ................ $ 5.40
============
----------
(a) Security fair valued under procedures established by the Board of
Directors. The procedures may include reviewing available financial
information about the company and reviewing the valuation of comparable
securities and other factors on a regular basis. At December 31, 2008, the
market value of fair valued securities amounted to $342,084 or 0.28% of
total investments.
(b) 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, 2008, the market value of Rule 144A securities amounted to $48,397 or
0.04% of total investments.
(c) Illiquid security.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depositary Receipt
CPO Ordinary Participation Certificate
% OF
MARKET MARKET
GEOGRAPHIC DIVERSIFICATION VALUE VALUE
-------------------------- ------ ------------
North America .......................... 68.2% $ 83,697,062
Europe ................................. 14.6 17,940,646
Latin America .......................... 7.4 9,141,837
Japan .................................. 7.0 8,614,576
Asia/Pacific ........................... 2.8 3,408,139
----- ------------
Total Investments ...................... 100.0% $122,802,260
===== ============
See accompanying notes to financial statements.
6
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2008
ASSETS:
Investments, at value (cost $143,559,033) ....................................... $122,802,260
Foreign currency, at value (cost $4,765) ........................................ 4,738
Cash ............................................................................ 370
Receivable for investments sold ................................................. 1,654,393
Dividends and interest receivable ............................................... 177,979
Deferred offering expense ....................................................... 79,217
Prepaid expense ................................................................. 5,964
------------
TOTAL ASSETS .................................................................... 124,724,921
------------
LIABILITIES:
Payable for investments purchased ............................................... 1,005,130
Distributions payable ........................................................... 24,469
Payable for Preferred shares repurchased ........................................ 5,834
Payable for investment advisory fees ............................................ 60,608
Payable for payroll expenses .................................................... 13,926
Payable for accounting fees ..................................................... 7,483
Unrealized depreciation on swap contracts ....................................... 984,393
Payable for auction agent fees .................................................. 53,280
Other accrued expenses .......................................................... 169,108
------------
TOTAL LIABILITIES ............................................................... 2,324,231
------------
PREFERRED STOCK:
Series B Cumulative Preferred Stock (6.00%, $25 liquidation value, $0.001 par
value, 1,000,000 shares authorized with 971,249 shares issued and
outstanding) ................................................................. 24,281,225
Series C Cumulative Preferred Stock (Auction Rate, $25,000 liquidation value,
$0.001 par value, 1,000 shares authorized with 900 shares issued and
outstanding) ................................................................. 22,500,000
------------
TOTAL PREFERRED STOCK ........................................................... 46,781,225
------------
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS .................................. $ 75,619,465
============
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS CONSIST OF:
Paid-in capital, at $0.001 par value ............................................ $107,588,648
Accumulated distributions in excess of net investment income .................... (215)
Accumulated distributions in excess of net realized gain on investments,
swap contracts, and foreign currency transactions ............................ (10,226,272)
Net unrealized depreciation on investments ...................................... (20,756,773)
Net unrealized depreciation on swap contracts ................................... (984,393)
Net unrealized depreciation on foreign currency translations .................... (1,530)
------------
NET ASSETS ...................................................................... $ 75,619,465
============
NET ASSET VALUE PER COMMON SHARE
($75,619,465 / 13,994,153 shares outstanding; 196,750,000 shares authorized) .... $ 5.40
============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2008
INVESTMENT INCOME:
Dividends (net of foreign taxes of $313,109) ................................... $ 3,956,072
Interest ....................................................................... 190,246
-------------
TOTAL INVESTMENT INCOME ........................................................ 4,146,318
-------------
EXPENSES:
Investment advisory fees ....................................................... 1,898,655
Shareholder communications expenses ............................................ 207,700
Legal and audit fees ........................................................... 120,120
Shareholder services fees ...................................................... 101,970
Custodian fees ................................................................. 73,397
Directors' fees ................................................................ 67,791
Auction agent fees ............................................................. 62,880
Accounting fees ................................................................ 45,000
Payroll expenses ............................................................... 31,214
Interest expense ............................................................... 248
Miscellaneous expenses ......................................................... 54,350
-------------
TOTAL EXPENSES ................................................................. 2,663,325
Less:
Advisory fee reduction ...................................................... (494,429)
Custodian fee credits ....................................................... (585)
-------------
NET EXPENSES ................................................................... 2,168,311
-------------
NET INVESTMENT INCOME .......................................................... 1,978,007
-------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS,
SWAP CONTRACTS, AND FOREIGN CURRENCY:
Net realized loss on investments ............................................... (5,230,410)
Net realized loss on swap contracts ............................................ (78,984)
Net realized loss on foreign currency transactions ............................. (32,035)
-------------
Net realized loss on investments, swap contracts, and foreign currency
transactions ................................................................ (5,341,429)
-------------
Net change in unrealized appreciation/(depreciation):
on investments .............................................................. (111,323,316)
on swap contracts ........................................................... (1,000,267)
on foreign currency translations ............................................ (5,046)
-------------
Net change in unrealized appreciation/(depreciation) on investments,
swap contracts, and foreign currency translations ........................... (112,328,629)
-------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS, SWAP CONTRACTS, AND
FOREIGN CURRENCY ............................................................ (117,670,058)
-------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................... (115,692,051)
-------------
Total Distributions to Preferred Shareholders .................................. (2,269,060)
-------------
NET DECREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS RESULTING FROM
OPERATIONS .................................................................. $(117,961,111)
=============
See accompanying notes to financial statements.
7
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
YEAR ENDED YEAR ENDED
DECEMBER 31, 2008 DECEMBER 31, 2007
----------------- -----------------
OPERATIONS:
Net investment income ....................................................... $ 1,978,007 $ 980,284
Net realized gain/(loss) on investments, swap contracts, and foreign currency
transactions ............................................................. (5,341,429) 12,760,725
Net change in unrealized appreciation/(depreciation) on investments,
swap contracts, and foreign currency translations ........................ (112,328,629) 3,734,091
------------- ------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ............. (115,692,051) 17,475,100
------------- ------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:
Net investment income ....................................................... (1,847,467) (292,363)
Net realized short-term gain ................................................ -- (992,507)
Net realized long-term gain ................................................. -- (1,532,763)
Return of capital ........................................................... (421,593) --
------------- ------------
TOTAL DISTRIBUTIONS TO PREFERRED SHAREHOLDERS ............................... (2,269,060) (2,817,633)
------------- ------------
NET INCREASE/(DECREASE) IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS ................................................ (117,961,111) 14,657,467
------------- ------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ....................................................... -- (1,091,095)
Net realized short-term gain ................................................ -- (3,681,967)
Net realized long-term gain ................................................. -- (5,714,592)
Return of capital ........................................................... (7,976,877) (17,111)
------------- ------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS .................................. (7,976,877) (10,504,765)
------------- ------------
FUND SHARE TRANSACTIONS:
Net decrease from repurchase of common shares ............................... (73,084) (230,817)
Net increase in net assets from repurchase of preferred shares .............. 124,267 --
------------- ------------
NET INCREASE/(DECREASE) IN NET ASSETS FROM FUND SHARE TRANSACTIONS .......... 51,183 (230,817)
------------- ------------
NET INCREASE/(DECREASE) IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS ... (125,886,805) 3,921,885
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Beginning of period ......................................................... 201,506,270 197,584,385
------------- ------------
End of period (including undistributed net investment income of $0 and
$0, respectively) ........................................................ $ 75,619,465 $201,506,270
============= ============
See accompanying notes to financial statements.
8
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
YEAR ENDED DECEMBER 31,
--------------------------------------------------
2008 2007 2006 2005 2004
-------- --------- -------- --------- --------
OPERATING PERFORMANCE:
Net asset value, beginning of period ...................................... $14.39 $14.09 $11.77 $12.27 $10.56
------ ------ ------ ------ ------
Net investment income ..................................................... 0.14 0.10 0.29 0.16 0.04
Net realized and unrealized gain/(loss) on investments, swap contracts, and
foreign currency transactions .......................................... (8.41) 1.15 2.85 0.09 1.79
------ ------ ------ ------ ------
Total from investment operations .......................................... (8.27) 1.25 3.14 0.25 1.83
------ ------ ------ ------ ------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:(A)
Net investment income ..................................................... (0.13) (0.02) (0.07) (0.03) (0.04)
Net realized gain ......................................................... -- (0.18) (0.12) (0.13) (0.09)
Return of capital ......................................................... (0.03) -- -- -- --
------ ------ ------ ------ ------
Total distributions to preferred shareholders ............................. (0.16) (0.20) (0.19) (0.16) (0.13)
------ ------ ------ ------ ------
NET INCREASE/(DECREASE) IN NET ASSETS ATTRIBUTABLE TO
COMMON SHAREHOLDERS RESULTING FROM OPERATIONS .......................... (8.43) 1.05 2.95 0.09 1.70
------ ------ ------ ------ ------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ..................................................... -- (0.08) (0.23) (0.12) --
Net realized gain ......................................................... -- (0.67) (0.40) (0.48) --
Return of capital ......................................................... (0.57) (0.00)(e) -- -- --
------ ------ ------ ------ ------
Total distributions to common shareholders ................................ (0.57) (0.75) (0.63) (0.60) --
------ ------ ------ ------ ------
FUND SHARE TRANSACTIONS:
Increase in net asset value from repurchase of common shares .............. 0.00(e) 0.00(e) 0.00(e) 0.01 0.01
Increase in net asset value from repurchase of preferred shares ........... 0.01 -- -- -- 0.00(e)
Offering expenses charged to paid-in capital .............................. -- -- -- (0.00)(e) --
------ ------ ------ ------ ------
Total fund share transactions ............................................. 0.01 0.00(e) 0.00(e) 0.01 0.01
------ ------ ------ ------ ------
NET ASSET VALUE ATTRIBUTABLE TO COMMON SHAREHOLDERS, END OF PERIOD ........ $ 5.40 $14.39 $14.09 $11.77 $12.27
====== ====== ====== ====== ======
NAV total return + ........................................................ (59.40)% 8.03% 26.65% 1.6% 16.2%
====== ====== ====== ====== ======
Market value, end of period ............................................... $ 4.45 $12.89 $12.27 $10.15 $10.68
====== ====== ====== ====== ======
Investment total return ++ ................................................ (62.65)% 11.13% 27.89% 0.7% 17.8%
====== ====== ====== ====== ======
See accompanying notes to financial statements.
9
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
YEAR ENDED DECEMBER 31,
--------------------------------------------------
2008 2007 2006 2005 2004
-------- --------- -------- --------- --------
RATIOS AND SUPPLEMENTAL DATA:
Net assets including liquidation value of preferred shares, end of period
(in 000's) ............................................................. $122,401 $251,334 $247,412 $214,907 $223,739
Net assets attributable to common shares, end of period (in 000's) ........ $ 75,619 $201,506 $197,584 $165,079 $173,912
Ratio of net investment income to average net assets attributable to
common shares before preferred share distributions ..................... 1.40% 0.46% 2.17% 1.44% 0.71%
Ratio of operating expenses to average net assets attributable to common
shares before fees waived .............................................. 1.89% -- -- -- --
Ratio of operating expenses to average net assets attributable to common
shares net of advisory fee reduction, if any (b) ....................... 1.54% 1.62% 1.79% 1.55% 1.87%
Ratio of operating expenses to average net assets including liquidation
value of preferred shares before fees waived ........................... 1.40% -- -- -- --
Ratio of operating expenses to average net assets including liquidation
value of preferred shares net of advisory fee reduction, if any (b) .... 1.14% 1.32% 1.39% 1.20% 1.41%
Portfolio turnover rate +++ ............................................... 14.5% 14.5% 9.8% 12.4% 7.5%
PREFERRED STOCK:
6.00% SERIES B CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) ............................... $ 24,281 $ 24,828 $ 24,828 $ 24,828 $ 24,828
Total shares outstanding (in 000's) ....................................... 971 993 993 993 993
Liquidation preference per share .......................................... $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00
Average market value (c) .................................................. $ 22.59 $ 24.14 $ 24.12 $ 25.00 $ 24.84
Asset coverage per share .................................................. $ 65.41 $ 126.10 $ 124.13 $ 107.83 $ 112.26
SERIES C AUCTION RATE CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) ............................... $ 22,500 $ 25,000 $ 25,000 $ 25,000 $ 25,000
Total shares outstanding (in 000's) ....................................... 1 1 1 1 1
Liquidation preference per share .......................................... $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000
Average market value (c) .................................................. $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000
Asset coverage per share .................................................. $ 65,411 $126,101 $124,134 $107,825 $112,257
ASSET COVERAGE (d) ........................................................ 262% 504% 497% 431% 449%
----------
+ Based on net asset value per share, adjusted for reinvestment of
distributions at prices obtained under the Fund's dividend reinvestment
plan.
++ Based on market value per share, adjusted for reinvestment of distributions
at prices obtained under the Fund's dividend reinvestment plan.
+++ Effective in 2008, a change in accounting policy was adopted with regard to
the calculation of the portfolio turnover rate to include cash proceeds due
to mergers. Had this policy been adopted retroactively, the portfolio
turnover rate for the years ended December 31, 2007, 2006, 2005, and 2004
would have been 14.8%, 16.5%, 14.5%, and 8.9%, respectively.
(a) Calculated based upon average common shares outstanding on the record dates
throughout the year.
(b) For the years ended December 31, 2008, 2007, 2006, and 2005, the effect of
the custodian fee credits was minimal.
(c) Based on weekly prices.
(d) Asset coverage is calculated by combining all series of preferred stock.
(e) Amount represents less than $0.005 per share.
See accompanying notes to financial statements.
10
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION. The Gabelli Global Multimedia Trust Inc. (the "Fund") 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 Fund commenced investment operations on
November 15, 1994. The Fund's primary objective is long-term growth of capital
with income as a secondary objective.
The Fund 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 Fund
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 United States ("U.S.") generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results could differ
from those estimates. The following is a summary of significant accounting
policies followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION. Portfolio securities listed or traded on a nationally
recognized securities exchange or traded in the U.S. over-the-counter market for
which market quotations are readily available are valued at the last quoted sale
price or a market's official closing price as of the close of business on the
day the securities are being valued. If there were no sales that day, the
security is valued at the average of the closing bid and asked prices or, if
there were no asked prices quoted on that day, then the security is valued at
the closing bid price on that day. If no bid or asked prices are quoted on such
day, the security is valued at the most recently available price or, if the
Board of Directors (the "Board") so determines, by such other method as the
Board 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 a foreign market are generally
valued at the preceding closing values of such securities on the relevant
market, but may be fair valued pursuant to procedures established by the Board
if market conditions change significantly after the close of the foreign market
but prior to the close of business on the day the securities are being valued.
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 fair valued 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 fair valued as determined by 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 with the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities with 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.
Statement of Financial Accounting Standard No. 157, "Fair Value
Measurements" ("SFAS 157") clarifies the definition of fair value for financial
reporting, establishes a framework for measuring fair value, and requires
additional disclosures about the use of fair value measurements. The three
levels of the fair value hierarchy under SFAS 157 are described below:
- Level 1 - quoted prices in active markets for identical securities;
- Level 2 - other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit
risk, etc.); and
- Level 3 - significant unobservable inputs (including the Fund's
determinations as to the fair value of investments).
11
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The inputs or methodology used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities. The
summary of the Fund's investments and other financial instruments, by inputs
used to value the Fund's investments as of December 31, 2008 is, as follows:
OTHER FINANCIAL
INVESTMENTS IN INSTRUMENTS
SECURITIES (UNREALIZED
(MARKET VALUE) DEPRECIATION)*
VALUATION INPUTS ASSETS LIABILITIES
---------------- -------------- ---------------
Level 1 - Quoted Prices $103,611,805 --
Level 2 - Other Significant Observable Inputs 18,908,671 $(984,393)
Level 3 - Significant Unobservable Inputs 281,784 --
------------ ---------
Total $122,802,260 $(984,393)
============ =========
----------
* Other financial instruments are derivative instruments not reflected in the
Schedule of Investments, such as futures, forwards, and swaps which are
valued at the unrealized appreciation/depreciation on the investment.
The following is a reconciliation of Level 3 investments for which
significant unobservable inputs were used to determine fair value:
INVESTMENTS IN
SECURITIES
(MARKET VALUE)
--------------
BALANCE AS OF 12/31/07 $114,186
Accrued discounts/(premiums) --
Realized gain/(loss) 2,573
Change in unrealized appreciation/(depreciation)+ 20,704
Net purchases/(sales) (2,573)
Transfers in and/or out of Level 3 146,894
--------
BALANCE AS OF 12/31/08 $281,784
========
Net change in unrealized appreciation/(depreciation) during
the period on Level 3 investments held at 12/31/08+ $(76,410)
========
----------
+ Net change in unrealized appreciation/(depreciation) is included in the
related amounts on investments in the Statement of Operations.
In March 2008, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standard No. 161, "Disclosures about
Derivative Instruments and Hedging Activities" ("SFAS 161") that is effective
for fiscal years beginning after November 15, 2008. SFAS 161 is intended to
improve financial reporting for derivative instruments by requiring enhanced
disclosure that enables investors to understand how and why an entity uses
derivatives, how derivatives are accounted for, and how derivative instruments
affect an entity's results of operations and financial position. Management is
currently evaluating the implications of SFAS 161 on the Fund's financial
statement disclosures.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
It is the policy of the Fund to always receive and maintain securities as
collateral whose market value, including accrued interest, are at least equal to
102% of the dollar amount invested by the Fund in each agreement. The Fund will
make payment for such securities only upon physical delivery or upon evidence of
book entry transfer of the collateral to the account of the custodian. To the
extent that any repurchase transaction exceeds one business day, the value of
the collateral is marked-to-market on a daily basis to maintain the adequacy of
the collateral. If the seller defaults and the value of the collateral declines
or if bankruptcy proceedings are commenced with respect to the seller of the
security, realization of the collateral by the Fund may be delayed or limited.
At December 31, 2008, there were no open repurchase agreements.
SWAP AGREEMENTS. The Fund may enter into interest rate swap or cap
transactions. The use of swaps and caps is a highly specialized activity that
involves investment techniques and risks different from those associated with
ordinary portfolio transactions. Swap agreements may 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. In an interest rate swap, the Fund would agree to pay to the other
party to the interest rate swap (which is known as the "counterparty")
periodically a fixed rate payment in exchange for the counterparty agreeing to
pay to the Fund periodically a variable rate payment that is intended to
approximate the Fund's variable rate payment obligation on Series C Preferred
Stock. In an interest rate cap, the Fund 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 that counterparty payments of the difference
based on the notional amount of such cap. Interest rate swap and cap
transactions introduce additional risk because
12
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the Fund 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 Fund 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 a swap contract or that, in the event
of default, the Fund will succeed in pursuing contractual remedies. The Fund
thus assumes the risk that it may be delayed in or prevented from obtaining
payments owed to it pursuant to a swap contract. 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 Fund's portfolio securities at that point in time, such a default
could negatively affect the Fund's ability to make dividend payments. In
addition, at the time an interest rate swap or cap transaction reaches its
scheduled termination date, there is a risk that the Fund 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 Fund's ability to make dividend payments.
The use of derivative instruments involves, to varying degrees, elements of
market and counterparty risk in excess of the amount recognized below.
Unrealized gains related to swaps are reported as an asset and unrealized
losses are reported as a liability in 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.
The Fund has entered into an interest rate swap agreement with Citibank
N.A. Under the agreement, the Fund receives a floating rate of interest and pays
a respective fixed rate of interest on the nominal value of the swap. Details of
the swap at December 31, 2008 are as follows:
NOTIONAL FLOATING RATE* TERMINATION NET UNREALIZED
AMOUNT FIXED RATE (RATE RESET MONTHLY) DATE DEPRECIATION
----------- ---------- -------------------- ----------- --------------
$10,000,000 4.32% 1.89875% 04/04/13 $(984,393)
----------
* Based on LIBOR (London Interbank Offered Rate).
FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose
of hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin." Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily fluctuations in the
value of the contract, which are included in unrealized
appreciation/depreciation on investments and futures contracts. The Fund
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. In addition, there
is the risk that the Fund may not be able to enter into a closing transaction
because of an illiquid secondary market. At December 31, 2008, there were no
open futures contracts.
FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund 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 Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The use of forward foreign exchange contracts does not eliminate
fluctuations in the underlying prices of the Fund'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. In addition, the Fund could be
exposed to risks if the counterparties to the contracts are unable to meet the
terms of their contracts. At December 31, 2008, there were no open forward
foreign exchange contracts.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are
maintained in 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
13
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
settlement date on investment securities transactions, foreign currency
transactions, and the difference between the amounts of interest and dividends
recorded on the books of the Fund and the amounts actually received. The portion
of foreign currency gains and losses related to fluctuation in exchange rates
between the initial trade date and subsequent sale trade date is included in
realized gain/loss on investments.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Fund will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
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 saleable among qualified
institutional investors under special rules adopted by the 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 on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Fund is informed of the dividend.
CUSTODIAN FEE CREDITS AND INTEREST EXPENSE. 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, if any, shown as "custodian fee credits." When cash balances are
overdrawn, the Fund is charged an overdraft fee of 2.00% above the federal funds
rate on outstanding balances. This amount, if any, would be included in
"interest expense" in the Statement of Operations.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions to common shareholders are
recorded on the ex-dividend date. Distributions to shareholders are based on
income and capital gains as determined in accordance with federal income tax
regulations, which may differ from income and capital gains as determined under
U.S. generally accepted accounting principles. These differences are primarily
due to differing treatments of income and gains on various investment securities
and foreign currency transactions held by the Fund, timing differences, and
differing characterizations of distributions made by the Fund. Distributions
from net investment income include net realized gains on foreign currency
transactions. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, adjustments are made to
the appropriate capital accounts in the period when the differences arise. These
reclassifications have no impact on the NAV of the Fund. For the year ended
December 31, 2008, reclassifications were made to increase accumulated
distributions in excess of net investment income by $114,298 and to decrease
accumulated distributions in excess of net realized gain on investments, swap
contracts, and foreign currency transactions by $114,537, with an offsetting
adjustment to paid-in capital.
Distributions to shareholders of the Fund'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 character of distributions paid during the years ended December 31,
2008 and December 31, 2007 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2008 DECEMBER 31, 2007
----------------------- ------------------------
COMMON PREFERRED COMMON PREFERRED
---------- ---------- ----------- ----------
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) ..... -- $1,847,467 $ 4,842,031 $1,300,869
Net long-term capital gains .................... -- -- 5,645,623 1,516,764
Return of capital .............................. $7,976,877 421,593 17,111 --
---------- ---------- ----------- ----------
Total distributions paid ....................... $7,976,877 $2,269,060 $10,504,765 $2,817,633
========== ========== =========== ==========
14
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for federal income taxes is required.
At December 31, 2008, the difference between book basis and tax basis
unrealized depreciation was primarily due to deferral of losses from wash sales
for tax purposes and five year qualified tax gains.
As of December 31, 2008, the components of accumulated earnings/losses on a
tax basis were as follows:
Accumulated capital loss carryforwards ............................... $ (5,028,031)
Net unrealized depreciation on investments and swap contracts ........ (26,915,152)
Net unrealized depreciation on foreign currency translations ......... (1,531)
Other temporary differences* ......................................... (24,469)
------------
Total ................................................................ $(31,969,183)
============
----------
* Other temporary differences are primarily due to adjustments on dividend
payables.
At December 31, 2008, the Fund had net capital loss carryforwards for
federal income tax purposes of $5,028,031 which are available to reduce future
required distributions of net capital gains to shareholders through 2016.
The following summarizes the tax cost of investments, swap contracts, and
the related unrealized appreciation/depreciation at December 31, 2008:
GROSS GROSS
UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION DEPRECIATION DEPRECIATION
------------ ------------ ------------ --------------
Investments ....... $148,746,543 $21,395,506 $(48,310,658) $(26,915,152)
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes"
("FIN 48") provides guidance for how uncertain tax positions should be
recognized, measured, presented, and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in the
course of preparing the Fund's tax returns to determine whether the tax
positions are "more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the "more-likely-than-not" threshold
are recorded as a tax benefit or expense in the current year. In accordance with
FIN 48, management has analyzed the Fund's tax positions taken on the federal
and state income tax returns for all open tax years (the current and prior three
tax years) and has concluded that no provision for income tax is required in the
Fund's financial statements. Management's determination regarding FIN 48 may be
subject to review and adjustment at a later date based on factors including, but
not limited to, an on-going analysis of tax laws, regulations, and
interpretations thereof.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Fund has an investment
advisory agreement (the "Advisory Agreement") with the Adviser which provides
that the Fund will pay the Adviser a fee, computed weekly and paid monthly,
equal on an annual basis to 1.00% of the value of the Fund'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 Fund's portfolio and oversees the administration of all aspects of the
Fund'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 NAV of the common shares of the Fund, including
distributions and advisory fee subject to reduction, does not exceed the stated
dividend rate or corresponding swap rate of each particular series of the
Cumulative Preferred Stock for the year.
The Fund's total return on the NAV of the common shares is monitored on a
monthly basis to assess whether the total return on the NAV of the common shares
exceeds the stated dividend rate or corresponding swap rate of each particular
series of Cumulative Preferred Stock for the period. For the year ended December
31, 2008, the Fund's total return on the NAV of the common shares did not exceed
the stated dividend rate or net swap expense on any of the outstanding Preferred
Stock. Thus, management fees with respect to the liquidation value of the
preferred share assets were reduced by $494,429.
During the year ended December 31, 2008, the Fund paid brokerage
commissions on security trades of $61,722 to Gabelli & Company, Inc. ("Gabelli &
Company"), an affiliate of the Adviser.
The cost of calculating the Fund's NAV per share is a Fund expense pursuant
to the Advisory Agreement between the Fund and the Adviser. During the year
ended December 31, 2008, the Fund paid or accrued $45,000 to the Adviser in
connection with the cost of computing the Fund's NAV.
As per the approval of the Board, the Fund compensates officers of the
Fund, who are employed by the Fund and are not employed by the Adviser (although
officers may receive incentive based variable compensation from affiliates of
the Adviser) and
15
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
pays its allocated portion of the cost of the Fund's Chief Compliance Officer.
For the year ended December 31, 2008 the Fund paid or accrued $31,214, which is
included in payroll expenses in the Statement of Operations.
The Fund pays each Director who is not considered to be an affiliated
person an annual retainer of $6,000 plus $500 for each Board meeting attended
and they are reimbursed for any out of pocket expenses incurred in attending
meetings. All Board committee members receive $500 per meeting attended. In
addition, the Audit Committee Chairman receives an annual fee of $3,000, the
Nominating Committee Chairman receives an annual fee of $2,000, and the Lead
Director receives an annual fee of $1,000. Directors who are directors or
employees of the Adviser or an affiliated company receive no compensation or
expense reimbursement from the Fund.
4. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the year ended December 31, 2008, other than short-term securities and U.S.
Government obligations, aggregated $22,880,427 and $42,847,769, respectively.
Purchases and sales of U.S. Government obligations for the year ended
December 31, 2008, other than short-term obligations, aggregated $3,222,494 and
$17,390,000, respectively.
5. CAPITAL. The charter permits the Fund to issue 196,750,000 shares of common
stock (par value $0.001). The Board 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 NAV of the shares. During the year ended December 31, 2008, the
Fund repurchased 7,200 shares of its common stock in the open market at a cost
of $73,084 and an average discount of approximately 12.96% from its NAV. All
shares of common stock repurchased have been retired.
Transactions in common stock were as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2008 DECEMBER 31, 2007
------------------ ---------------------
SHARES AMOUNT SHARES AMOUNT
------- -------- -------- ----------
Net decrease from repurchase of common shares ..... (7,200) $(73,084) (17,000) $(230,817)
The Fund'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 Fund 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 Fund fails to meet these requirements and
does not correct such failure, the Fund may be required to redeem, in part or in
full, the 6.00% Series B and Series C Auction Rate Cumulative Preferred Stock at
redemption prices 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 Fund's ability to pay
dividends to common shareholders and could lead to sales of portfolio securities
at inopportune times. The income received on the Fund'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.
At the Fund's November 14, 2007 Board meeting, the Board approved the
filing of a shelf registration with the SEC which will give the Fund the ability
to offer additional preferred shares. The shelf registration was declared
effective by the SEC on June 12, 2008.
On March 31, 2003, the Fund 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 Fund, 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 6.00%
Series B Cumulative Preferred Stock in the open market at prices less than the
$25 liquidation value per share. During the year ended December 31, 2008, the
Fund repurchased 21,851 shares of 6.00% Series B Cumulative Preferred Stock in
the open market at a cost of $422,008 and an average discount of approximately
22.79% from its liquidation preference. All shares of 6.00% Series B Cumulative
Preferred Stock repurchased have been retired. At December 31, 2008, 971,249
shares of 6.00% Series B Cumulative Preferred Stock were outstanding and accrued
dividends amounted to $24,281.
On March 31, 2003, the Fund 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 ("Series C Stock"). The dividend rate, as set by the auction process,
which is generally held every seven days, is expected to vary with short-term
interest rates. Since February 2008, the number of Series C Stock subject to bid
orders by potential holders has been less than the number of Series C Stock
subject to sell orders. Therefore, the weekly auctions have failed, and the
dividend rate since then has been the maximum rate. In that event, holders that
have submitted sell orders may not be able to sell any or all of the Series C
Stock for which they have submitted sell orders. The current maximum rate is
150% of the "AA" Financial Composite Commercial Paper Rate
16
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
on the date of such auction. The dividend rates of Series C Stock ranged from
0.135% to 6.000% for the year ended December 31, 2008. Existing shareholders may
submit an order to hold, bid, or sell such shares on each auction date.
Shareholders of the Series C Stock may also trade their shares in the secondary
market. The Fund, at its option, may redeem the Series C Stock in whole or in
part at the redemption price at any time. During the year ended December 31,
2008, the Fund redeemed 100 shares of Series C Stock. Shareholders received the
redemption price of $25,000 per share, which was equal to the liquidation
preference, together with any accumulated and unpaid dividends, for each share
redeemed. At December 31, 2008, 900 shares of Series C Stock were outstanding
with an annualized dividend rate of 0.300% per share and accrued dividends
amounted to $188.
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
Fund 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. 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 Fund's
outstanding voting stock must approve the conversion of the Fund 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 Fund's outstanding voting securities are
required to approve certain other actions, including changes in the Fund's
investment objectives or fundamental investment policies.
6. INDUSTRY CONCENTRATION. Because the Fund 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. On April 24, 2008, the Adviser entered into an administrative
settlement with the SEC to resolve the SEC's inquiry regarding prior frequent
trading activity in shares of the GAMCO Global Growth Fund (the "Global Growth
Fund") by one investor who was banned from the Global Growth Fund in August
2002. In the settlement, the SEC found that the Adviser had violated Section
206(2) of the Investment Advisers Act, Section 17(d) of the 1940 Act, and Rule
17d-1 thereunder and had aided and abetted and caused violations of Section
12(d)(1)(B)(i) of the 1940 Act. Under the terms of the settlement, the Adviser,
while neither admitting nor denying the SEC's findings and allegations, agreed,
among other things, to pay the previously reserved total of $16 million
(including a $5 million penalty), of which at least $11 million will be
distributed to shareholders of the Global Growth Fund in accordance with a plan
to be developed by an independent distribution consultant and approved by the
independent directors of the Global Growth Fund and the staff of the SEC and to
cease and desist from future violations of the above referenced federal
securities laws. The settlement is not expected to impact the Fund and will not
have a material adverse impact on the Adviser or its ability to fulfill its
obligations under the Advisory Agreement. On the same day, the SEC filed a civil
action against the Executive Vice President and Chief Operating Officer of the
Adviser, alleging violations of certain federal securities laws arising from the
same matter. The officer is also an officer of the Global Growth Fund and other
funds in the Gabelli/GAMCO fund complex including the Fund. The officer denies
the allegations and is continuing in his positions with the Adviser and the
funds. The Adviser currently expects that any resolution of the action against
the officer will not have a material adverse impact on the Adviser or its
ability to fulfill its obligations under the Advisory Agreement.
In a separate matter, on January 12, 2009, the SEC issued an administrative
action approving a final settlement of a previously disclosed matter with the
Adviser involving compliance with Section 19(a) of the Investment Company Act of
1940 and Rule 19a-1 thereunder by two closed-end funds. These provisions require
registered investment companies when making a distribution in the nature of a
dividend from sources other than net investment income to contemporaneously
provide written statements to shareholders, which adequately disclose the source
or sources of such distribution. While the two funds sent annual statements and
provided other materials containing this information, the shareholders did not
receive the notices required by Rule 19a-1 with any of the distributions that
were made for 2002 and 2003. The Adviser believes that the funds have been in
compliance with Section 19(a) and Rule 19a-1 since the beginning of 2004. As
part of the settlement, in which the Adviser neither admits nor denies the
findings by the SEC, the Adviser agreed to pay a civil monetary penalty of
$450,000 and to cease and desist from causing violations of Section 19(a) and
Rule 19a-1. In connection with the settlement, the SEC noted the remedial
actions previously undertaken by the Adviser. The staff's notice to the Adviser
did not relate to the Fund.
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, 2008, 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 five years in the period then ended, 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, 2008 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 27, 2009
18
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
ADDITIONAL FUND INFORMATION (UNAUDITED)
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Directors. Information pertaining to the Directors and officers
of the Fund is set forth below. The Fund's Statement of Additional Information
includes additional information about the Fund's 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.
NUMBER OF
TERM OF FUNDS IN FUND
NAME, POSITION(S) OFFICE AND COMPLEX
ADDRESS(1) LENGTH OF OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE TIME SERVED(2) DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR(5)
----------------- -------------- ------------- -------------------------------- -----------------------
INTERESTED DIRECTORS(3):
MARIO J. GABELLI Since 1994** 26 Chairman and Chief Executive Director of Morgan
Director and Officer of GAMCO Investors, Inc. Group Holdings, Inc.
Chief Investment Officer and Chief Investment Officer - (holding company);
Age: 66 Value Portfolios of Gabelli Chairman of the Board
Funds, LLC and GAMCO Asset of LICT Corp.
Management Inc.; Director/ (multimedia and
Trustee or Chief Investment communication services
Officer of other registered company)
investment companies in the
Gabelli/ GAMCO Funds complex;
Chairman and Chief Executive
Officer of GGCP, Inc.
INDEPENDENT DIRECTORS(6):
THOMAS E. BRATTER Since 1994** 4 Director, President, and Founder --
Director of The John Dewey Academy
Age: 69 (residential college preparatory
therapeutic high school)
ANTHONY J. COLAVITA(4) Since 2001** 36 Partner in the law firm of --
Director Anthony J. Colavita, P.C.
Age: 73
JAMES P. CONN(4) Since 1994* 18 Former Managing Director and --
Director Chief Investment Officer of
Age: 70 Financial Security Assurance
Holdings Ltd. (insurance holding
company) (1992-1998)
FRANK J. FAHRENKOPF JR. Since 1999*** 6 President and Chief Executive --
Director Officer of the American Gaming
Age: 69 Association; Co-Chairman of the
Commission on Presidential
Debates; Former Chairman of the
Republican National Committee
(1983-1989)
ANTHONY R. PUSTORINO Since 1994* 13 Certified Public Accountant; Director of The LGL
Director Professor Emeritus, Pace Group, Inc.
Age: 83 University (diversified
manufacturing)
WERNER J. ROEDER, MD Since 1999*** 22 Medical Director of Lawrence --
Director Hospital and practicing private
Age: 68 physician
SALVATORE J. ZIZZA Since 1994*** 28 Chairman of Zizza & Co., Ltd. Director of Hollis-Eden
Director (consulting) Pharmaceuticals
Age: 63 (biotechnology) and
Earl Scheib, Inc.
(automotive services)
19
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
ADDITIONAL FUND INFORMATION (UNAUDITED) (CONTINUED)
TERM OF
NAME, POSITION(S) OFFICE AND
ADDRESS(1) LENGTH OF PRINCIPAL OCCUPATION(S)
AND AGE TIME SERVED(2) DURING PAST FIVE YEARS
------------------------ -------------- -----------------------------------------------------------------------
OFFICERS:
BRUCE N. ALPERT Since 2003 Executive Vice President and Chief Operating Officer of Gabelli Funds,
President LLC since 1988 and an officer of all of the registered investment
Age: 57 companies in the Gabelli/GAMCO Funds complex; Director and President of
the Teton Advisors, Inc. (formerly Gabelli Advisers, Inc.) since 1998
LAURISSA M. MARTIRE Since 2004 Vice President of The Gabelli Convertible and Income Securities Fund
Vice President and Inc. since 2004; Assistant Vice President of GAMCO Investors, Inc.
Ombudsman since 2003; Prior to 2003, Sales Assistant for GAMCO Investors, Inc.
Age: 32
AGNES MULLADY Since 2006 Vice President of Gabelli Funds, LLC since 2007; Officer of all of the
Treasurer registered investment companies in the Gabelli/GAMCO Funds complex;
and Secretary Senior Vice President of U.S. Trust Company, N.A. and Treasurer and
Age: 50 Chief Financial Officer of Excelsior Funds from 2004 through 2005;
Chief Financial Officer of AMIC Distribution Partners from 2002 through
2004
PETER D. GOLDSTEIN Since 2004 Director of Regulatory Affairs at GAMCO Investors, Inc. since 2004;
Chief Compliance Officer Chief Compliance Officer of all of the registered investment companies
Age: 55 in the Gabelli/GAMCO 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 Fund'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 Fund's 2009 Annual Meeting of Shareholders or
until their successors are duly elected and qualified.
** - Term expires at the Fund's 2010 Annual Meeting of Shareholders or
until their successors are duly elected and qualified.
*** - Term expires at the Fund's 2011 Annual Meeting of Shareholders or
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 Fund as defined in the Investment Company Act of
1940, as amended (the "1940 Act"). Mr. Gabelli is considered an "interested
person" because of his affiliation with Gabelli Funds, LLC which acts as
the Fund's investment adviser, and Gabelli & Company, Inc., which executes
portfolio transactions for the Fund, and as a controlling shareholder
because of the level of his ownership of common shares of the Fund.
(4) Represents holders of the Fund's Preferred Stock.
(5) This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934, as amended (i.e. public
companies) or other investment companies registered under the 1940 Act.
(6) Directors who are not interested persons are considered "Independent"
Directors.
CERTIFICATIONS
The Fund's Chief Executive Officer has certified to the New York Stock
Exchange ("NYSE") that, as of June 17, 2008, he was not aware of any violation
by the Fund of applicable NYSE corporate governance listing standards. The Fund
reports to the SEC on Form N-CSR which contains certifications by the Fund's
principal executive officer and principal financial officer that relate to the
Fund's disclosure in such reports and that are required by Rule 30a-2(a) under
the 1940 Act.
20
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
INCOME TAX INFORMATION (UNAUDITED)
DECEMBER 31, 2008
CASH DIVIDENDS AND DISTRIBUTIONS
TOTAL AMOUNT ORDINARY
PAYABLE RECORD PAID INVESTMENT RETURN OF DIVIDEND
DATE DATE PER SHARE INCOME CAPITAL (c) REINVEST PRICE
-------- -------- ------------ ---------- ----------- --------------
COMMON STOCK
03/25/08 03/17/08 $0.15000 -- $0.15000 $10.3437
06/24/08 06/16/08 0.15000 -- 0.15000 9.0576
09/24/08 09/16/08 0.15000 -- 0.15000 7.4390
12/17/08 12/12/08 0.12000 -- 0.12000 4.2418
-------- ---- --------
$0.57000 -- $0.57000
-------- ---- --------
6.000% SERIES B CUMULATIVE PREFERRED SHARES
03/26/08 03/18/08 $0.37500 $0.31090 $0.06410
06/26/08 06/19/08 0.37500 0.31090 0.06410
09/26/08 09/19/08 0.37500 0.31090 0.06410
12/26/08 12/18/08 0.37500 0.31090 0.06410
-------- -------- ---------
$1.50000 $1.24360 $0.25640
-------- -------- ---------
SERIES C AUCTION RATE CUMULATIVE PREFERRED SHARES
Series C Auction Rate Cumulative Preferred Shares pay dividends weekly
based on a rate set at auction, usually held every seven days. There were no
2008 distributions derived from long-term capital gains for the Series C Auction
Rate Cumulative Preferred Shares.
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 2008 tax returns. Ordinary income distributions include net investment
income and realized net short-term capital gains. Ordinary income is reported in
box 1a of Form 1099-DIV. Capital gain distributions are reported in box 2a of
Form 1099-DIV. There were no long-term gain distributions for the year ended
December 31, 2008.
CORPORATE DIVIDENDS RECEIVED DEDUCTION, QUALIFIED DIVIDEND INCOME, AND U.S.
GOVERNMENT SECURITIES INCOME
The Fund paid to 6.00% Series B Cumulative Preferred shareholders ordinary
income dividends of $1.24360 per share in 2008. The Fund paid weekly
distributions to Series C Auction Rate Cumulative Preferred shareholders at
varying rates throughout the year, including an ordinary income dividend
totaling $628.35200 per share in 2008. For the year ended December 31, 2008,
100.0% of the ordinary dividend qualified for the dividends received deduction
available to corporations, and 100.0% of the ordinary income distribution was
qualified dividend income. The percentage of ordinary income dividends paid by
the Fund during 2008 derived from U.S. Treasury securities was 0.75%. Such
income is exempt from state and local tax in all states. However, many states,
including New York and California, allow a tax exemption for a portion of the
income earned only if a mutual fund has invested at least 50% of its assets at
the end of each quarter of the Fund's fiscal year in U.S. Government securities.
The Fund did not meet this strict requirement in 2008. The percentage of net
assets of U.S. Government securities held as of December 31, 2008 was 15.3%.
HISTORICAL DISTRIBUTION SUMMARY
SHORT- LONG-
TERM TERM NON-TAXABLE ADJUSTMENT
INVESTMENT CAPITAL CAPITAL RETURN OF TOTAL TO
INCOME (b) GAINS (b) GAINS CAPITAL DISTRIBUTIONS(e) COST BASIS
---------- ---------- ---------- ----------- ---------------- ----------
COMMON STOCK
2008 ................. -- -- -- $ 0.57000 $ 0.57000 $0.57000(d)
2007 ................. 0.07790 $ 0.26410 $ 0.40800 -- 0.75000 --
2006 ................. 0.23073 0.01224 0.38703 -- 0.63000 --
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)
6.000% SERIES B CUMULATIVE PREFERRED SHARES
2008 ................. $ 1.24360 -- -- $ 0.25640 $ 1.50000 $0.25640
2007 ................. 0.15560 $ 0.52840 $ 0.81600 -- 1.50000 --
2006 ................. 0.54940 0.02930 0.91230 -- 1.50000 --
2005 ................. 0.31120 0.02000 1.16880 -- 1.50000 --
2004 ................. 0.41320 0.28440 0.80240 -- 1.50000 --
2003 ................. -- -- 1.10420 -- 1.10420 --
SERIES C AUCTION RATE CUMULATIVE PREFERRED STOCK
2008 ................. $628.35200 -- -- $129.44800 $ 757.80000
2007 ................. 140.12030 $475.50103 $734.35867 -- 1,349.98000 $129.44800
2006 ................. 447.80000 23.74500 751.09500 -- 1,222.64000 --
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.
All designations are based on financial information available as of the
date of this annual report and, accordingly, are subject to change. For each
item, it is the intention of the Fund to designate the maximum amount permitted
under the Internal Revenue Code and the regulations thereunder.
21
THE GABELLI GLOBAL MULTIMEDIA TRUST INC.
AND YOUR PERSONAL PRIVACY
WHO ARE WE?
The Gabelli Global Multimedia Trust Inc. (the "Fund") is a closed-end management
investment company registered with the Securities and Exchange Commission under
the Investment Company Act of 1940. We are managed by Gabelli Funds, LLC, which
is affiliated with GAMCO Investors, Inc. GAMCO Investors, Inc. is a publicly
held company that has subsidiaries that provide investment advisory or brokerage
services for a variety of clients.
WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A
SHAREHOLDER?
When you purchase shares of the Fund on the New York Stock Exchange, you have
the option of registering directly with our transfer agent in order, for
example, to participate in our dividend reinvestment plan.
- INFORMATION YOU GIVE US ON YOUR APPLICATION FORM. This could include your
name, address, telephone number, social security number, bank account
number, and other information.
- INFORMATION ABOUT YOUR TRANSACTIONS WITH US. This would include information
about the shares that you buy or sell; it may also include information
about whether you sell or exercise rights that we have issued from time to
time. If we hire someone else to provide services--like a transfer
agent--we will also have information about the transactions that you
conduct through them.
WHAT INFORMATION DO WE DISCLOSE AND TO WHOM DO WE DISCLOSE IT?
We do not disclose any non-public personal information about our customers or
former customers to anyone other than our affiliates, our service providers who
need to know such information, and as otherwise permitted by law. If you want to
find out what the law permits, you can read the privacy rules adopted by the
Securities and Exchange Commission. They are in volume 17 of the Code of Federal
Regulations, Part 248. The Commission often posts information about its
regulations on its website, www.sec.gov.
WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION?
We restrict access to non-public personal information about you to the people
who need to know that information in order to provide services to you or the
Fund and to ensure that we are complying with the laws governing the securities
business. We maintain physical, electronic, and procedural safeguards to keep
your personal information confidential.
(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 & FOUNDER, JOHN DEWEY ACADEMY
Anthony J. Colavita
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C.
James P. Conn
FORMER MANAGING DIRECTOR & 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, ZIZZA & CO., LTD.
OFFICERS
Bruce N. Alpert
PRESIDENT
Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
Laurissa M. Martire
VICE PRESIDENT & OMBUDSMAN
Agnes Mullady
TREASURER AND SECRETARY
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: 13,994,153 971,249
The Net Asset Value per share appears in the Publicly Traded Funds column, under
the heading "Specialized Equity Funds," 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 per share may be obtained each day by calling (914) 921-5070
or visiting www.gabelli.com.
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 Fund may, from time to time, purchase
shares of its common stock in the open market when the Fund's shares are trading
at a discount of 10% or more from the net asset value of the shares. The Fund
may also, from time to time, purchase shares of its preferred stock in the open
market when the preferred shares are trading at a discount to the liquidation
value.
(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 Q4/2008
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
$48,800 for 2007 and $58,200 for 2008.
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 $7,200
for 2007 and $9,212 for 2008. 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 $4,350 for 2007 and
$4,000 for 2008. 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 for 2007 and $0 for 2008.
(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 registered public accounting firm to the registrant and
(ii) all permissible non-audit services to be provided by the
independent registered public accounting firm 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 registered public accounting firm's 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
permissible non-audit services were not recognized by the registrant
at the time of the engagement to be non-audit services; and (ii) 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 for 2007 and $0 for 2008.
(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. INVESTMENTS.
(a) 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.
(b) Not applicable.
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 Teton Advisors, 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
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.
1
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.
B. 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.
2
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
3
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 will supply information on how
an account voted its proxies upon request.
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 clearing firms are responsible
for forwarding proxies directly to the Advisers.
Proxies are received in one of two forms:
o Shareholder Vote Authorization Forms ("VAFs") - Issued by Broadridge
Financial Solutions, Inc. ("Broadridge") VAFs must be voted through the
issuing institution causing a time lag. Broadridge 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
4. Upon receipt of instructions from the proxy committee (see Administrative),
the votes are cast and recorded for each account on an individual basis.
Records have been maintained on the Proxy Edge system. The system is backed up
regularly.
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
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 Broadridge are always sent
directly to a specific individual at Broadridge.
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 Broadridge 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 Broadridge:
The back of the VAF is stamped indicating that we wish to vote in person.
The forms are then sent overnight to Broadridge. Broadridge 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 Broadridge may be implemented.
5
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).
6
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.
7
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 auditors.
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.
8
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.
9
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.
10
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.
11
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.
12
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
13
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.
14
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
PORTFOLIO MANAGERS
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.
Lawrence J. Haverty, Jr., CFA, is associate portfolio manager of the Gabelli
Global Multimedia Trust. (2005 - present). Prior to 2005 Mr. Haverty was a
managing director for consumer discretionary research at State Street Research,
the Boston-based subsidiary of Metropolitan Life Insurance Company.
MANAGEMENT OF OTHER ACCOUNTS
The table below shows the number of other accounts managed by the portfolio
managers 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.
Total Assets
No. of Accounts in Accounts
Total where Advisory where Advisory
No. of Accounts Fee is Based on Fee is Based
Name of Portfolio Manager Type of Accounts Managed Total Assets Performance on Performance
------------------------- ---------------- --------------- ------------ --------------- --------------
1. Mario J. Gabelli Registered 24 10.4B 6 3.3B
Investment
Companies:
Other Pooled 22 355.1M 19 316.4M
Investment
Vehicles:
Other Accounts: 2,049 8.1B 6 994.1M
2. Lawrence J. Haverty, Registered 0 0 0 0
Jr. Investment
Companies:
Other Pooled 0 0 0 0
Investment
Vehicles:
Other Accounts: 0 0 0 0
POTENTIAL CONFLICTS OF INTEREST
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. Because the portfolio managers manage
many accounts, they 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 they were to devote all of their attention to the
management of only a few accounts.
ALLOCATION OF LIMITED INVESTMENT OPPORTUNITIES. If the portfolio managers
identify an investment opportunity that may be suitable for multiple accounts,
the 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.
PURSUIT OF DIFFERING STRATEGIES. At times, the portfolio managers may determine
that an investment opportunity may be appropriate for only some of the accounts
for which they exercises investment responsibility, or may decide that certain
of these accounts should take differing positions with respect to a particular
security. In these cases, the portfolio managers 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 of their
accounts.
VARIATION IN COMPENSATION. A conflict of interest may arise where the financial
or other benefits available to the portfolio manager differ among the accounts
that they manage. 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 managers may be motivated to favor certain accounts over others. The
portfolio managers also may be motivated to favor accounts in which they have an
investment interest, or in which the Adviser, or its affiliates have investment
interests. In Mr. Gabelli's case, the Adviser's compensation and expenses for
the Fund are marginally greater as a percentage of assets than for certain other
accounts and are less than for certain other accounts managed by Mr. Gabelli,
while his personal compensation structure varies with near-term performance to a
greater degree in certain performance fee based accounts than with
on-performance based accounts. In addition, he has investment interests in
several of the funds managed by the Adviser and its affiliates.
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.
COMPENSATION STRUCTURE FOR PORTFOLIO MANAGERS OF THE ADVISER OTHER THAN MARIO
GABELLI
The compensation of the Portfolio Managers for the Fund is structure to enable
the Adviser to attract and retain highly qualified professionals in a
competitive environment. The Portfolio Managers receive a compensation package
that includes a minimum draw or base salary, equity-based incentive compensation
via awards of stock options, and incentive-based variable compensation based on
a percentage of net revenue received by the Adviser for managing a Fund to the
extent that the amount exceeds a minimum level of compensation. Net revenues are
determined by deducting from gross investment management fees certain of the
firm's expenses (other than the respective Portfolio Manager's compensation)
allocable to the respective Fund (the incentive-based variable compensation for
managing other accounts is also based on a percentage of net revenues to the
investment adviser
for managing the account). 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 equity-based incentive and
incentive-based variable compensation is based on an evaluation by the Adviser's
parent, GBL, of quantitative and qualitative performance evaluation criteria.
This evaluation takes into account, in a broad sense, the performance of the
accounts managed by the Portfolio Manager, but the level of compensation is not
determined with specific reference to the performance of any account against any
specific benchmark. Generally, greater consideration is given to the performance
of larger accounts and to longer term performance over smaller accounts and
short-term performance.
OWNERSHIP OF SHARES IN THE FUND
Mario Gabelli and Lawrence J. Haverty, Jr. owned over $1,000,000 and $0 -
$10,000, respectively, of shares of the Trust as of December 31, 2008.
(B) Not applicable.
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 - 13,994,153
07/01/08
through Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - 993,100
07/31/08
Month #2 Common - N/A Common - N/A Common - N/A Common - 13,994,153
08/01/08
through Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - N/A Preferred Series B - 993,100
08/31/08
Month #3 Common - N/A Common - N/A Common - N/A Common - 13,994,153
09/01/08
through Preferred Series B - 400 Preferred Series B - Preferred Series B - 400 Preferred Series B - 993,100 -
09/30/08 $21.2500 400 = 992,700
Month #4 Common - N/A Common - N/A Common - N/A Common - 13,994,153
10/01/08
through Preferred Series B - Preferred Series B - Preferred Series B - Preferred Series B - 992,700 -
10/31/08 14,903 $19.2807 14,903 14,903 = 977,797
Month #5 Common - N/A Common - N/A Common - N/A Common - 13,994,153
11/01/08
through Preferred Series B - Preferred Series B - Preferred Series B - 3,590 Preferred Series B - 977,797 -
11/30/08 3,590 $20.5971 3,590 = 974,207
Month #6 Common - N/A Common - N/A Common - N/A Common - 13,994,153
12/01/08
through Preferred Series B - Preferred Series B - Preferred Series B - 2,958 Preferred Series B - 974,207 -
12/31/08 2,958 $20.2508 2,958 = 971,249
Total Common - N/A Common - N/A Common - N/A N/A
Preferred Series B - Preferred Series B - Preferred Series B -
21,851 $19.3130 21,851
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 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) 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 3/9/09
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
----------------------------------------
Bruce N. Alpert, Principal Executive
Officer
Date 3/9/09
By (Signature and Title)* /s/ Agnes Mullady
----------------------------------------
Agnes Mullady, Principal Financial
Officer and Treasurer
Date 3/9/09
* Print the name and title of each signing officer under his or her signature.