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 811-21423
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The Gabelli Dividend & Income Trust
------------------------------------------------------
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
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(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, 2007
-----------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
(LOGO)
THE GABELLI
DIVIDEND &
INCOME TRUST
THE GABELLI DIVIDEND & INCOME TRUST
Annual Report
December 31, 2007
TO OUR SHAREHOLDERS,
The Sarbanes-Oxley Act requires a fund's principal executive and financial
officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio manager's commentary
and subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.
Because we do not want our portfolio managers to eliminate their opinions
and/or restrict their commentary to historical facts, we have separated their
commentary from the financial statements and investment portfolio and have sent
it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com.
Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2007.
COMPARATIVE RESULTS
--------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2007 (a)
----------------------------------------------------
Since
Inception
Quarter 1 Year 3 Year (11/28/03)
------- ------ ------ ----------
GABELLI DIVIDEND & INCOME TRUST
NAV TOTAL RETURN (b) ....................... (2.57)% 6.68% 12.52% 12.22%
INVESTMENT TOTAL RETURN (c) ................ (0.42) 4.14 12.91 8.16
S&P 500 Index ................................. (3.33) 5.49 8.61 10.34
Dow Jones Industrial Average .................. (3.99) 8.81 9.65 10.20
Nasdaq Composite Index ........................ (1.82) 9.81 6.83 7.67
(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. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT
ANNUALIZED. 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. INVESTORS SHOULD CAREFULLY
CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE
FUND BEFORE INVESTING. THE DOW JONES INDUSTRIAL AVERAGE IS AN UNMANAGED
INDEX OF 30 LARGE CAPITALIZATION STOCKS. THE STANDARD & POOR'S ("S&P") 500
INDEX OF THE LARGEST U.S. COMPANIES AND THE NASDAQ COMPOSITE INDEX
(MEASURES ALL NASDAQ DOMESTIC AND INTERNATIONAL COMMON TYPE STOCK UNDER AN
UNMANAGED MARKET CAPITALIZATION WEIGHTED METHODOLOGY) ARE UNMANAGED
INDICATORS OF STOCK MARKET PERFORMANCE. DIVIDENDS ARE CONSIDERED
REINVESTED EXCEPT FOR THE NASDAQ COMPOSITE INDEX. YOU CANNOT INVEST
DIRECTLY IN AN INDEX.
(b) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN THE NET ASSET
VALUE ("NAV") PER SHARE AND REINVESTMENT OF DISTRIBUTIONS AT NAV ON THE
EX-DIVIDEND DATE AND ARE NET OF EXPENSES. SINCE INCEPTION RETURN IS BASED
ON AN INITIAL NAV OF $19.06.
(c) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN CLOSING MARKET
VALUES ON THE NEW YORK STOCK EXCHANGE AND REINVESTMENT OF DISTRIBUTIONS.
SINCE INCEPTION RETURN IS BASED ON AN INITIAL OFFERING PRICE OF $20.00.
--------------------------------------------------------------------------------
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
February 22, 2008
THE GABELLI DIVIDEND & INCOME TRUST
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total
investments as of December 31, 2007:
Long Positions
Financial Services .................................................. 14.0%
Energy and Utilities: Oil ........................................... 12.9%
Energy and Utilities: Integrated .................................... 9.4%
Food and Beverage ................................................... 8.2%
U.S. Treasury Bills ................................................. 6.9%
Telecommunications .................................................. 6.6%
Energy and Utilities: Electric ...................................... 4.8%
Energy and Utilities: Services ...................................... 4.0%
Consumer Products ................................................... 3.9%
Health Care ......................................................... 3.7%
Diversified Industrial .............................................. 3.6%
Energy and Utilities: Natural Gas ................................... 3.1%
Retail .............................................................. 2.2%
Cable and Satellite ................................................. 1.8%
Broadcasting ........................................................ 1.5%
Electronics ......................................................... 1.4%
Aerospace ........................................................... 1.4%
Equipment and Supplies .............................................. 1.3%
Specialty Chemicals ................................................. 1.2%
Metals and Mining ................................................... 0.8%
Automotive: Parts and Accessories ................................... 0.7%
Publishing .......................................................... 0.7%
Entertainment ....................................................... 0.7%
Environmental Services .............................................. 0.6%
Hotels and Gaming ................................................... 0.6%
Transportation ...................................................... 0.5%
Computer Software and Services ...................................... 0.5%
Communications Equipment ............................................ 0.4%
Wireless Communications ............................................. 0.4%
Machinery ........................................................... 0.4%
Automotive .......................................................... 0.3%
Energy and Utilities: Water ......................................... 0.3%
Energy and Utilities ................................................ 0.3%
Paper and Forest Products ........................................... 0.3%
Agriculture ......................................................... 0.2%
Building and Construction ........................................... 0.2%
Business Services ................................................... 0.2%
Real Estate ......................................................... 0.0%
Manufactured Housing and Recreational Vehicles ...................... 0.0%
-------
100.0%
=======
THE GABELLI DIVIDEND & INCOME TRUST (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, 2007. 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.
2
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2007
MARKET
SHARES COST VALUE
------------ ------------ ----------------
COMMON STOCKS -- 90.2%
AEROSPACE -- 1.3%
10,000 Goodrich Corp. ................................. $ 281,823 $ 706,100
55,000 Kaman Corp. .................................... 1,006,361 2,024,550
100,000 Rockwell Automation Inc. ....................... 6,039,691 6,896,000
2,000,000 Rolls-Royce Group plc+ ......................... 14,847,048 21,737,395
80,800,000 Rolls-Royce Group plc, Cl. B ................... 165,131 176,925
------------ ----------------
22,340,054 31,540,970
------------ ----------------
AGRICULTURE -- 0.2%
130,000 Archer-Daniels-Midland Co. ..................... 3,369,429 6,035,900
------------ ----------------
AUTOMOTIVE -- 0.3%
27,000 Copart Inc.+ ................................... 796,094 1,148,850
290,000 General Motors Corp. ........................... 9,117,868 7,218,100
10,000 Navistar International Corp.+ .................. 228,717 542,000
------------ ----------------
10,142,679 8,908,950
------------ ----------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.7%
60,000 Dana Corp.+ .................................... 113,641 1,440
386,000 Genuine Parts Co. .............................. 13,063,243 17,871,800
------------ ----------------
13,176,884 17,873,240
------------ ----------------
BROADCASTING -- 1.0%
700,000 Clear Channel
Communications Inc. ......................... 25,899,715 24,164,000
------------ ----------------
BUILDING AND CONSTRUCTION -- 0.2%
15,000 Layne Christensen Co.+ ......................... 449,560 738,150
77,000 Trane Inc. ..................................... 3,490,343 3,596,670
------------ ----------------
3,939,903 4,334,820
------------ ----------------
BUSINESS SERVICES -- 0.2%
60,300 Intermec Inc.+ ................................. 1,354,592 1,224,693
90,000 PHH Corp.+ ..................................... 2,495,651 1,587,600
293,900 Trans-Lux Corp.+ (a) ........................... 2,108,099 1,880,960
------------ ----------------
5,958,342 4,693,253
------------ ----------------
CABLE AND SATELLITE -- 1.8%
600,000 Cablevision Systems Corp.,
Cl. A+ ...................................... 18,374,091 14,700,000
14,200 Cogeco Inc. .................................... 276,997 568,317
230,000 EchoStar Communications
Corp., Cl. A+ ............................... 6,826,542 8,675,600
81,734 Liberty Global Inc., Cl. A+ .................... 1,686,985 3,203,155
34,318 Liberty Global Inc., Cl. C+ .................... 760,276 1,255,696
35,213 PT Multimedia Servicos de
Telecomunicacoes e
Multimedia SGPS SA .......................... 346,144 491,665
7,042 PT Multimedia Servicos de
Telecomunicacoes e
Multimedia SGPS
SA, ADR ..................................... 126,328 95,067
180,000 Rogers Communications Inc.,
Cl. B ....................................... 2,310,816 8,145,000
300,000 The DIRECTV Group Inc.+ ........................ 7,085,728 6,936,000
------------ ----------------
37,793,907 44,070,500
------------ ----------------
COMMUNICATIONS EQUIPMENT -- 0.0%
15,000 Thomas & Betts Corp.+ .......................... 471,962 735,600
------------ ----------------
COMPUTER SOFTWARE AND SERVICES -- 0.5%
150,000 Cognos Inc.+ ................................... 8,593,782 8,635,500
120,333 Metavante Technologies Inc.+ ................... 3,023,136 2,806,165
------------ ----------------
11,616,918 11,441,665
------------ ----------------
MARKET
SHARES COST VALUE
------------ ------------ ----------------
CONSUMER PRODUCTS -- 3.9%
245,000 Alberto-Culver Co. ............................. $ 8,193,427 $ 6,012,300
400,000 Altadis SA ..................................... 26,685,352 29,071,451
25,000 Altria Group Inc. .............................. 1,444,297 1,889,500
100,000 Avon Products Inc. ............................. 2,820,238 3,953,000
40,000 Eastman Kodak Co. .............................. 912,574 874,800
44,000 Fortune Brands Inc. ............................ 3,583,015 3,183,840
40,000 Hanesbrands Inc.+ .............................. 955,063 1,086,800
50,000 Harman International
Industries Inc. ............................. 5,917,286 3,685,500
120,000 Kimberly-Clark Corp. ........................... 8,313,829 8,320,800
60,000 Mattel Inc. .................................... 1,009,842 1,142,400
175,000 Procter & Gamble Co. ........................... 9,719,121 12,848,500
1,000,000 Swedish Match AB ............................... 12,209,126 23,904,567
------------ ----------------
81,763,170 95,973,458
------------ ----------------
DIVERSIFIED INDUSTRIAL -- 3.2%
150,000 Bouygues SA .................................... 5,217,323 12,500,548
215,000 Cooper Industries Ltd., Cl. A .................. 7,001,888 11,369,200
500,000 General Electric Co. ........................... 16,320,036 18,535,000
275,000 Honeywell International Inc. ................... 9,524,517 16,931,750
100,000 ITT Corp. ...................................... 4,506,935 6,604,000
2,000 Pentair Inc. ................................... 63,318 69,620
2,000 Textron Inc. ................................... 51,500 142,600
1,051,000 Tomkins plc .................................... 5,080,148 3,697,831
205,000 Tyco International Ltd. ........................ 10,024,801 8,128,250
131,000 WHX Corp.+ ..................................... 1,288,184 497,800
------------ ----------------
59,078,650 78,476,599
------------ ----------------
ELECTRONICS -- 1.4%
1,075,000 Intel Corp. .................................... 22,362,894 28,659,500
190,000 Tyco Electronics Ltd. .......................... 7,149,331 7,054,700
------------ ----------------
29,512,225 35,714,200
------------ ----------------
ENERGY AND UTILITIES: ELECTRIC -- 4.8%
30,000 Allegheny Energy Inc. .......................... 438,040 1,908,300
100,000 ALLETE Inc. .................................... 3,286,240 3,958,000
280,000 American Electric
Power Co. Inc. .............................. 8,755,206 13,036,800
425,000 DPL Inc. ....................................... 8,553,078 12,601,250
17,500 DTE Energy Co. ................................. 667,957 769,300
273,000 Electric Power
Development Co. Ltd. ........................ 6,654,194 10,190,306
220,000 FPL Group Inc. ................................. 7,596,481 14,911,600
530,000 Great Plains Energy Inc. ....................... 16,163,590 15,539,600
370,000 Integrys Energy Group Inc. ..................... 17,973,626 19,125,300
148,000 Pepco Holdings Inc. ............................ 2,852,964 4,340,840
240,000 Pinnacle West Capital Corp. .................... 9,369,027 10,178,400
110,000 The Southern Co. ............................... 3,184,128 4,262,500
255,000 Unisource Energy Corp. ......................... 6,714,681 8,045,250
------------ ----------------
92,209,212 118,867,446
------------ ----------------
ENERGY AND UTILITIES: INTEGRATED -- 9.4%
12,000 Alliant Energy Corp. ........................... 305,115 488,280
145,000 Ameren Corp. ................................... 6,598,426 7,860,450
3,000,000 Aquila Inc.+ ................................... 12,395,590 11,190,000
50,000 Avista Corp. ................................... 926,534 1,077,000
15,000 Black Hills Corp. .............................. 492,427 661,500
33,000 CH Energy Group Inc. ........................... 1,524,587 1,469,820
108,000 Chubu Electric Power Co. Inc. .................. 2,458,019 2,818,064
270,000 CONSOL Energy Inc. ............................. 9,333,609 19,310,400
200,000 Consolidated Edison Inc. ....................... 8,201,972 9,770,000
2,000 Dominion Resources Inc. ........................ 86,700 94,900
See accompanying notes to financial statements.
3
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2007
MARKET
SHARES COST VALUE
------------ ------------ ----------------
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES: INTEGRATED (CONTINUED)
200,000 Duke Energy Corp. .............................. $ 2,816,130 $ 4,034,000
430,000 Edison SpA ..................................... 1,002,090 1,354,811
300,000 El Paso Corp. .................................. 3,557,045 5,172,000
300,000 Enel SpA ....................................... 2,324,318 3,568,139
47,000 Enel SpA, ADR .................................. 1,839,336 2,775,350
144,000 Energy East Corp. .............................. 3,285,119 3,918,240
165,000 FirstEnergy Corp. .............................. 5,835,087 11,936,100
150,000 Hawaiian Electric Industries Inc. .............. 3,585,226 3,415,500
250,000 Hera SpA ....................................... 552,073 1,126,694
121,500 Hokkaido Electric
Power Co. Inc. .............................. 2,282,208 2,631,965
121,500 Hokuriku Electric Power Co. .................... 2,131,359 2,534,082
114,958 Iberdrola SA, ADR .............................. 5,733,530 6,944,613
80,500 Korea Electric
Power Corp., ADR+ ........................... 1,181,180 1,678,425
121,500 Kyushu Electric
Power Co. Inc. .............................. 2,374,466 2,990,870
21,000 Maine & Maritimes Corp.+ ....................... 594,461 698,250
80,000 MGE Energy Inc. ................................ 2,605,047 2,837,600
35,102 National Grid plc, ADR ......................... 1,588,562 2,929,262
255,000 NiSource Inc. .................................. 5,329,542 4,816,950
600,000 NSTAR .......................................... 14,329,143 21,732,000
450,000 OGE Energy Corp. ............................... 10,830,550 16,330,500
30,000 Ormat Technologies Inc. ........................ 450,000 1,650,300
320,000 Progress Energy Inc. ........................... 14,361,775 15,497,600
155,000 Public Service Enterprise
Group Inc. .................................. 9,505,482 15,227,200
121,500 Shikoku Electric
Power Co. Inc. .............................. 2,264,565 3,257,329
15,000 TECO Energy Inc. ............................... 255,758 258,150
121,500 The Chugoku Electric
Power Co. Inc. .............................. 2,194,052 2,365,506
40,000 The Empire District
Electric Co. ................................ 895,068 911,200
121,500 The Kansai Electric
Power Co. Inc. .............................. 2,333,021 2,833,169
108,000 The Tokyo Electric
Power Co. Inc. .............................. 2,545,172 2,793,895
121,500 Tohoku Electric
Power Co. Inc. .............................. 2,112,763 2,740,724
205,000 Vectren Corp. .................................. 5,572,873 5,947,050
470,000 Westar Energy Inc. ............................. 9,309,271 12,191,800
85,000 Wisconsin Energy Corp. ......................... 2,690,561 4,140,350
230,000 Xcel Energy Inc. ............................... 3,927,605 5,191,100
------------ ----------------
174,517,417 233,171,138
------------ ----------------
ENERGY AND UTILITIES: NATURAL GAS -- 3.1%
8,000 AGL Resources Inc. ............................. 217,299 301,120
70,000 Atmos Energy Corp. ............................. 1,744,791 1,962,800
20,000 Delta Natural Gas Co. Inc. ..................... 504,315 505,000
6,000 Energen Corp. .................................. 124,550 385,380
20,000 Kinder Morgan
Energy Partners LP .......................... 824,553 1,079,800
350,000 National Fuel Gas Co. .......................... 9,372,113 16,338,000
210,000 Nicor Inc. ..................................... 7,147,795 8,893,500
220,000 ONEOK Inc. ..................................... 5,480,182 9,849,400
200,000 Sempra Energy .................................. 5,955,980 12,376,000
30,000 South Jersey Industries Inc. ................... 657,687 1,082,700
70,000 Southern Union Co. ............................. 1,656,784 2,055,200
158,400 Southwest Gas Corp. ............................ 3,844,159 4,715,568
600,000 Spectra Energy Corp. ........................... 13,375,657 15,492,000
60,000 The Laclede Group Inc. ......................... 1,690,312 2,054,400
------------ ----------------
52,596,177 77,090,868
------------ ----------------
MARKET
SHARES COST VALUE
------------ ------------ ----------------
ENERGY AND UTILITIES: OIL -- 12.9%
20,000 Anadarko Petroleum Corp. ....................... $ 650,810 $ 1,313,800
40,000 Apache Corp. ................................... 1,905,219 4,301,600
46,900 BG Group plc, ADR .............................. 1,893,244 5,358,325
160,000 BP plc, ADR .................................... 7,479,063 11,707,200
80,000 Cameron International Corp.+ ................... 1,103,787 3,850,400
140,000 Chesapeake Energy Corp. ........................ 2,429,835 5,488,000
315,000 Chevron Corp. .................................. 18,364,418 29,398,950
1,000 Cimarex Energy Co. ............................. 28,300 42,530
410,000 ConocoPhillips ................................. 20,909,413 36,203,000
78,000 Devon Energy Corp. ............................. 3,448,499 6,934,980
185,000 Eni SpA, ADR ................................... 6,769,273 13,399,550
225,000 Exxon Mobil Corp. .............................. 10,427,150 21,080,250
30,000 Hess Corp. ..................................... 830,468 3,025,800
545,000 Marathon Oil Corp. ............................. 18,377,567 33,168,700
145,000 Murphy Oil Corp. ............................... 7,348,500 12,301,800
4,000 Nabors Industries Ltd.+ ........................ 97,350 109,560
1,000 Niko Resources Ltd. ............................ 57,456 90,430
10,000 Noble Corp. .................................... 254,820 565,100
345,000 Occidental Petroleum Corp. ..................... 12,565,645 26,561,550
14,000 Oceaneering
International Inc.+ ......................... 390,875 942,900
18,000 PetroChina Co. Ltd., ADR ....................... 1,359,633 3,158,460
275,000 Repsol YPF SA, ADR ............................. 5,825,251 9,798,250
250,000 Rowan Companies Inc. ........................... 9,531,210 9,865,000
200,000 Royal Dutch Shell plc,
Cl. A, ADR .................................. 9,567,840 16,840,000
885,000 StatoilHydro ASA, ADR .......................... 12,640,636 27,010,200
200,000 Sunoco Inc. .................................... 10,648,405 14,488,000
200,000 Total SA, ADR .................................. 8,718,885 16,520,000
46,873 Transocean Inc.+ ............................... 4,101,076 6,709,870
------------ ----------------
177,724,628 320,234,205
------------ ----------------
ENERGY AND UTILITIES: SERVICES -- 4.0%
130,000 ABB Ltd., ADR .................................. 1,419,990 3,744,000
20,000 Baker Hughes Inc. .............................. 759,763 1,622,000
250,000 Diamond Offshore
Drilling Inc. ............................... 14,246,961 35,500,000
19,500 Exterran Holdings Inc.+ ........................ 1,085,163 1,595,100
43,000 Grant Prideco Inc.+ ............................ 2,325,608 2,386,930
640,000 Halliburton Co. ................................ 17,703,558 24,262,400
120,000 Schlumberger Ltd. .............................. 3,977,835 11,804,400
260,000 Weatherford
International Ltd.+ ......................... 11,402,283 17,836,000
------------ ----------------
52,921,161 98,750,830
------------ ----------------
ENERGY AND UTILITIES: WATER -- 0.3%
11,000 American States Water Co. ...................... 273,608 414,480
53,333 Aqua America Inc. .............................. 873,085 1,130,660
6,000 Artesian Resources Corp.,
Cl. A ....................................... 113,635 113,400
3,000 California Water
Service Group ............................... 94,710 111,060
11,500 Connecticut Water
Service Inc. ................................ 276,036 271,055
1,000 Consolidated Water Co. Ltd. .................... 26,770 25,190
6,000 Middlesex Water Co. ............................ 111,082 113,700
38,366 Pennichuck Corp. ............................... 839,842 1,024,756
82,000 SJW Corp. ...................................... 1,384,964 2,842,940
16,800 Southwest Water Co. ............................ 192,169 210,336
5,000 Suez SA ........................................ 156,718 337,734
168,000 Suez SA, Strips+ ............................... 0 2,456
36,000 United Utilities plc, ADR ...................... 774,333 1,063,800
9,000 York Water Co. ................................. 115,031 139,500
------------ ----------------
5,231,983 7,801,067
------------ ----------------
See accompanying notes to financial statements.
4
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2007
MARKET
SHARES COST VALUE
------------ -------------- ----------------
COMMON STOCKS (CONTINUED)
ENTERTAINMENT -- 0.6%
8,000 Grupo Televisa SA, ADR ....................... $ 79,516 $ 190,160
300,000 Time Warner Inc. ............................. 5,098,815 4,953,000
195,000 Vivendi ...................................... 6,135,060 8,946,445
-------------- ----------------
11,313,391 14,089,605
-------------- ----------------
ENVIRONMENTAL SERVICES -- 0.6%
65,000 Allied Waste Industries Inc.+ ................ 704,645 716,300
1,000 Hyflux Ltd. .................................. 1,686 2,216
12,375 Veolia Environnement ......................... 395,937 1,129,902
420,000 Waste Management Inc. ........................ 14,809,006 13,721,400
-------------- ----------------
15,911,274 15,569,818
-------------- ----------------
EQUIPMENT AND SUPPLIES -- 1.3%
110,000 CIRCOR International Inc. .................... 2,003,636 5,099,600
30,000 Lufkin Industries Inc. ....................... 513,283 1,718,700
60,000 Mueller Industries Inc. ...................... 2,463,787 1,739,400
420,000 RPC Inc. ..................................... 1,866,263 4,918,200
280,000 Tenaris SA, ADR .............................. 13,437,734 12,524,400
400,000 Xerox Corp. .................................. 6,082,373 6,476,000
-------------- ----------------
26,367,076 32,476,300
-------------- ----------------
FINANCIAL SERVICES -- 13.8%
70,000 AFLAC Inc. ................................... 3,867,534 4,384,100
200,000 AllianceBernstein Holding LP ................. 12,145,967 15,050,000
380,000 American Express Co. ......................... 16,989,679 19,767,600
285,000 American International
Group Inc. ................................ 17,224,221 16,615,500
11,641 AON Corp. .................................... 252,396 555,159
44,000 Astoria Financial Corp. ...................... 1,312,519 1,023,880
400,000 Bank of America Corp. ........................ 18,719,370 16,504,000
4,200 BlackRock Inc. ............................... 329,551 910,560
45,000 Capital One Financial Corp. .................. 3,365,054 2,126,700
50,000 CIGNA Corp. .................................. 2,712,940 2,686,500
60,000 CIT Group Inc. ............................... 1,756,823 1,441,800
650,000 Citigroup Inc. ............................... 32,167,091 19,136,000
250,000 Commerce Bancorp Inc. ........................ 8,457,560 9,535,000
40,000 Deutsche Bank AG ............................. 3,902,091 5,176,400
350,000 Discover Financial Services .................. 7,368,817 5,278,000
155,000 Federal National
Mortgage Association ...................... 5,817,361 6,196,900
48,909 Fidelity National
Financial Inc., Cl. A ..................... 981,053 714,561
21,496 Fidelity National
Information Services Inc. ................. 749,854 894,019
130,000 Fifth Third Bancorp .......................... 5,068,356 3,266,900
80,000 First Horizon National Corp. ................. 3,403,108 1,452,000
60,000 Flushing Financial Corp. ..................... 1,096,793 963,000
80,000 Freddie Mac .................................. 3,343,663 2,725,600
27,000 Hartford Financial
Services Group Inc. ....................... 1,748,090 2,354,130
100,000 HSBC Holdings plc, ADR ....................... 8,969,382 8,371,000
40,000 Hudson City Bancorp Inc. ..................... 544,050 600,800
30,000 Invesco Ltd. ................................. 815,717 941,400
470,000 JPMorgan Chase & Co. ......................... 16,947,592 20,515,500
38,000 Legg Mason Inc. .............................. 3,090,727 2,779,700
10,000 Lehman Brothers
Holdings Inc. ............................. 648,864 654,400
164,999 Marshall & Ilsley Corp. ...................... 5,747,167 4,369,174
182,000 Merrill Lynch & Co. Inc. ..................... 12,557,335 9,769,760
135,000 Morgan Stanley ............................... 5,787,617 7,169,850
60,000 National Australia
Bank Ltd., ADR ............................ 6,994,925 9,900,000
190,000 New York Community
Bancorp Inc. .............................. 3,648,850 3,340,200
MARKET
SHARES COST VALUE
------------ -------------- ----------------
250,000 NewAlliance Bancshares Inc. .................. $ 3,663,853 $ 2,880,000
200,000 PNC Financial
Services Group Inc. ....................... 10,703,980 13,130,000
230,000 Popular Inc. ................................. 4,573,968 2,438,000
220,000 Regions Financial Corp. ...................... 7,211,658 5,203,000
295,000 SLM Corp. .................................... 10,537,863 5,941,300
650,220 Sovereign Bancorp Inc. ....................... 13,190,861 7,412,508
75,050 Sterling Bancorp ............................. 1,237,084 1,023,682
100,000 T. Rowe Price Group Inc. ..................... 3,368,235 6,088,000
40,000 The Allstate Corp. ........................... 2,165,130 2,089,200
330,190 The Bank of New York
Mellon Corp. .............................. 11,338,881 16,100,064
50,000 The Blackstone Group LP ...................... 1,134,580 1,106,500
290,000 The Travelers Companies Inc. ................. 10,913,064 15,602,000
5,000 Unitrin Inc. ................................. 187,486 239,950
30,974 Valley National Bancorp ...................... 712,704 590,364
400,000 Wachovia Corp. ............................... 19,501,106 15,212,000
400,000 Waddell & Reed Financial Inc.,
Cl. A ..................................... 8,823,625 14,436,000
6,000 Webster Financial Corp. ...................... 193,472 191,820
500,000 Wells Fargo & Co. ............................ 14,871,455 15,095,000
90,000 Wilmington Trust Corp. ....................... 3,209,395 3,168,000
177,000 Zions Bancorporation ......................... 12,463,892 8,264,130
-------------- ----------------
358,534,409 343,381,611
-------------- ----------------
FOOD AND BEVERAGE -- 8.2%
180,000 Anheuser-Busch
Companies Inc. ............................ 8,281,672 9,421,200
270,000 Cadbury Schweppes plc, ADR ................... 13,245,499 13,329,900
40,000 Campbell Soup Co. ............................ 1,213,223 1,429,200
80,000 China Mengniu Dairy Co. Ltd. ................. 271,367 293,431
185,000 ConAgra Foods Inc. ........................... 4,599,660 4,401,150
900,000 Davide Campari-Milano SpA .................... 9,199,133 8,618,799
300,000 General Mills Inc. ........................... 14,568,199 17,100,000
350,000 Groupe Danone ................................ 18,895,525 31,419,507
100,000 H.J. Heinz Co. ............................... 3,521,143 4,668,000
160,000 ITO EN Ltd. .................................. 4,068,974 3,043,459
42,000 ITO EN Ltd., Preference ...................... 1,017,809 600,403
1,000 Kellogg Co. .................................. 35,550 52,430
170,000 Kikkoman Corp. ............................... 2,329,958 2,338,898
380,000 Kraft Foods Inc., Cl. A ...................... 11,660,666 12,399,400
150,000 Morinaga Milk
Industry Co. Ltd. ......................... 632,370 439,064
300,000 Nissin Food Products Co. Ltd. ................ 10,434,723 9,694,311
500,000 Parmalat SpA ................................. 1,885,518 1,944,530
339,450 Parmalat SpA, GDR (b)(c) ..................... 981,615 1,320,155
320,000 PepsiAmericas Inc. ........................... 6,616,558 10,662,400
10,000 PepsiCo Inc. ................................. 610,035 759,000
25,000 Pernod-Ricard SA ............................. 5,555,371 5,778,762
5,000 Remy Cointreau SA ............................ 351,864 356,521
1,100,000 Sara Lee Corp. ............................... 18,633,132 17,666,000
290,000 The Coca-Cola Co. ............................ 12,717,402 17,797,300
310,000 The Hershey Co. .............................. 14,595,177 12,214,000
62,000 Wm. Wrigley Jr. Co. .......................... 2,976,799 3,630,100
3,000 Wm. Wrigley Jr. Co., Cl. B ................... 167,630 177,000
470,000 YAKULT HONSHA Co. Ltd. ....................... 12,661,559 10,875,442
-------------- ----------------
181,728,131 202,430,362
-------------- ----------------
HEALTH CARE -- 3.7%
25,000 Advanced Medical
Optics Inc.+ .............................. 714,288 613,250
220,000 Boston Scientific Corp.+ ..................... 3,105,722 2,558,600
115,000 Bristol-Myers Squibb Co. ..................... 2,789,992 3,049,800
90,000 Covidien Ltd. ................................ 3,943,642 3,986,100
170,000 Eli Lilly & Co. .............................. 9,589,661 9,076,300
100,000 IMS Health Inc. .............................. 2,416,170 2,304,000
See accompanying notes to financial statements.
5
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2007
MARKET
SHARES COST VALUE
------------ -------------- ----------------
COMMON STOCKS (CONTINUED)
HEALTH CARE (CONTINUED)
10,000 Medtronic Inc. ............................... $ 487,534 $ 502,700
220,000 Merck & Co. Inc. ............................. 8,376,601 12,784,200
30,000 MGI Pharma Inc.+ ............................. 1,209,150 1,215,900
140,000 Owens & Minor Inc. ........................... 4,250,284 5,940,200
1,020,000 Pfizer Inc. .................................. 27,794,678 23,184,600
35,000 Schiff Nutrition
International Inc. ........................ 207,524 200,900
250,000 Sierra Health Services Inc.+ ................. 10,406,193 10,490,000
40,000 St. Jude Medical Inc.+ ....................... 1,703,655 1,625,600
1,500 Ventana Medical
Systems Inc.+ ............................. 114,633 130,845
130,000 Wyeth ........................................ 6,096,113 5,744,700
120,000 Zimmer Holdings Inc.+ ........................ 8,000,683 7,938,000
-------------- ----------------
91,206,523 91,345,695
-------------- ----------------
HOTELS AND GAMING -- 0.6%
20,000 Boyd Gaming Corp. ............................ 983,723 681,400
95,000 Harrah's Entertainment Inc. .................. 7,506,079 8,431,250
690,000 Ladbrokes plc ................................ 9,056,911 4,439,893
65,000 Pinnacle Entertainment Inc.+ ................. 1,942,376 1,531,400
-------------- ----------------
19,489,089 15,083,943
-------------- ----------------
MACHINERY -- 0.4%
145,000 CNH Global NV ................................ 2,853,859 9,543,900
-------------- ----------------
MANUFACTURED HOUSING AND RECREATIONAL VEHICLES -- 0.0%
4,000 Skyline Corp. ................................ 141,027 117,400
-------------- ----------------
METALS AND MINING -- 0.8%
160,000 Alcoa Inc. ................................... 5,955,730 5,848,000
10,000 Alliance Holdings GP LP ...................... 230,523 237,300
20,000 Arch Coal Inc. ............................... 314,774 898,600
8,000 BHP Billiton Ltd., ADR ....................... 217,549 560,320
10,000 Fording Canadian Coal Trust .................. 305,154 386,000
98,000 Freeport-McMoRan
Copper & Gold Inc. ........................ 3,409,931 10,039,120
10,000 Massey Energy Co. ............................ 235,475 357,500
2,500 Patriot Coal Corp.+ .......................... 21,227 104,350
25,000 Peabody Energy Corp. ......................... 332,562 1,541,000
1,000 Rio Tinto plc, ADR ........................... 127,360 419,900
3,000 Westmoreland Coal Co.+ ....................... 52,605 41,700
-------------- ----------------
11,202,890 20,433,790
-------------- ----------------
PAPER AND FOREST PRODUCTS -- 0.3%
200,000 International Paper Co. ...................... 6,863,452 6,476,000
-------------- ----------------
PUBLISHING -- 0.7%
35,000 Idearc Inc. .................................. 1,019,349 614,600
1,965,000 Il Sole 24 Ore+ .............................. 16,562,225 16,361,353
-------------- ----------------
17,581,574 16,975,953
-------------- ----------------
REAL ESTATE -- 0.0%
18,000 Brookfield Asset
Management Inc., Cl. A .................... 186,196 642,060
-------------- ----------------
RETAIL -- 2.0%
200,000 CVS Caremark Corp. ........................... 7,528,806 7,950,000
142,000 Ingles Markets Inc., Cl. A ................... 1,615,209 3,605,380
410,000 Safeway Inc. ................................. 8,674,488 14,026,100
22,000 Saks Inc.+ ................................... 395,507 456,720
310,000 Sally Beauty Holdings Inc.+ .................. 3,837,420 2,805,500
80,000 SUPERVALU Inc. ............................... 2,385,810 3,001,600
90,400 The Great Atlantic &
Pacific Tea Co. Inc.+ ..................... 2,740,524 2,832,232
350,000 Walgreen Co. ................................. 13,830,730 13,328,000
40,000 Whole Foods Market Inc. ...................... 1,721,713 1,632,000
-------------- ----------------
42,730,207 49,637,532
-------------- ----------------
SHARES/ MARKET
UNITS COST VALUE
------------ -------------- ----------------
SPECIALTY CHEMICALS -- 1.2%
5,000 Arkema, ADR+ ................................ $ 269,656 $ 330,000
130,000 Ashland Inc. ................................. 8,261,467 6,165,900
170,000 E.I. du Pont de
Nemours & Co. ............................. 7,388,852 7,495,300
235,000 Ferro Corp. .................................. 4,572,678 4,871,550
100,000 Olin Corp. ................................... 1,826,861 1,933,000
230,000 The Dow Chemical Co. ......................... 9,415,260 9,066,600
18,146 Tronox Inc., Cl. B ........................... 186,196 156,963
-------------- ----------------
31,920,970 30,019,313
-------------- ----------------
TELECOMMUNICATIONS -- 6.0%
400,000 AT&T Inc. .................................... 9,394,488 16,624,000
500,000 BCE Inc. ..................................... 12,521,468 19,870,000
47,125 Bell Aliant Regional
Communications
Income Fund (b)(d) ........................ 1,278,068 1,386,889
71,000 BT Group plc, ADR ............................ 2,221,635 3,828,320
10,000 CenturyTel Inc. .............................. 407,821 414,600
50,000 Compania de
Telecomunicaciones de
Chile SA, ADR ............................. 607,686 373,000
400,000 Deutsche Telekom AG, ADR ..................... 7,235,343 8,668,000
25,000 Embarq Corp. ................................. 1,080,206 1,238,250
55,000 France Telecom SA, ADR ....................... 1,338,443 1,959,650
210,000 Hellenic Telecommunications
Organization SA, ADR ...................... 1,644,219 3,878,700
240,000 Portugal Telecom SGPS SA ..................... 2,868,388 3,133,471
30,000 Portugal Telecom SGPS SA,
ADR ....................................... 382,479 390,600
200,000 Qwest Communications
International Inc.+ ....................... 1,181,992 1,402,000
840,000 Sprint Nextel Corp. .......................... 16,438,020 11,029,200
21,333 Telecom Corp. of
New Zealand Ltd., ADR ..................... 334,469 354,341
200,000 Telecom Italia SpA, ADR ...................... 5,741,078 6,168,000
26,000 Telefonica SA, ADR ........................... 1,107,367 2,537,340
202,000 Telefonos de Mexico SAB de
CV, Cl. L, ADR ............................ 3,329,962 7,441,680
130,000 Telstra Corp. Ltd., ADR ...................... 2,392,135 2,676,700
76,100 TELUS Corp., Non-Voting,
ADR ....................................... 1,574,713 3,672,586
1,000,000 Verizon Communications Inc. .................. 36,430,533 43,690,000
190,000 Vodafone Group plc, ADR ...................... 5,193,922 7,090,800
-------------- ----------------
114,704,435 147,828,127
-------------- ----------------
TRANSPORTATION -- 0.4%
3,000 Frontline Ltd. ............................... 111,957 144,000
255,001 GATX Corp. ................................... 7,608,244 9,353,437
24,000 Golden Ocean Group Ltd. ...................... 14,400 149,175
3,000 Ship Finance International Ltd. .............. 66,356 83,130
25,000 Teekay Corp. ................................. 875,909 1,330,250
-------------- ----------------
8,676,866 11,059,992
-------------- ----------------
WIRELESS COMMUNICATIONS -- 0.4%
5,000 Crown Castle
International Corp.+ ...................... 80,650 208,000
108,000 United States Cellular Corp.+ ................ 4,930,560 9,082,800
15,000 Vimpel-Communications,
ADR ....................................... 91,155 624,000
-------------- ----------------
5,102,365 9,914,800
-------------- ----------------
TOTAL
COMMON STOCKS ............................. 1,806,778,150 2,236,904,910
-------------- ----------------
See accompanying notes to financial statements.
6
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2007
MARKET
SHARES COST VALUE
------------ -------------- ----------------
CONVERTIBLE PREFERRED STOCKS -- 1.5%
AEROSPACE -- 0.1%
8,200 Northrop Grumman Corp.,
7.000% Cv. Pfd., Ser. B ................... $ 983,758 $ 1,194,330
-------------- ----------------
BROADCASTING -- 0.0%
20,460 Emmis Communications Corp.,
6.250% Cv. Pfd., Ser. A ................... 960,081 728,478
-------------- ----------------
BUILDING AND CONSTRUCTION -- 0.0%
200 Fleetwood Capital Trust,
6.000% Cv. Pfd. ........................... 6,210 4,450
-------------- ----------------
DIVERSIFIED INDUSTRIAL -- 0.4%
175,000 Owens-Illinois Inc.,
4.750% Cv. Pfd. ........................... 5,814,064 8,746,500
46,351 Smurfit-Stone Container Corp.,
7.000% Cv. Pfd., Ser. A ................... 1,161,566 927,020
-------------- ----------------
6,975,630 9,673,520
-------------- ----------------
ENERGY AND UTILITIES -- 0.3%
5,000 Chesapeake Energy Corp.,
5.000% Cv. Pfd. (b) ....................... 512,500 590,625
20,000 CMS Energy Corp.,
4.500% Cv. Pfd., Ser. B ................... 1,069,063 1,812,500
129,000 El Paso Energy Capital Trust I,
4.750% Cv. Pfd., Ser. C ................... 4,649,004 4,644,000
-------------- ----------------
6,230,567 7,047,125
-------------- ----------------
ENTERTAINMENT -- 0.0%
45,000 Six Flags Inc.,
7.250% Cv. Pfd., Ser. B ................... 1,051,988 645,750
-------------- ----------------
FINANCIAL SERVICES -- 0.2%
1,500 Doral Financial Corp.,
4.750% Cv. Pfd. ........................... 207,335 187,500
120,000 Newell Financial Trust I,
5.250% Cv. Pfd. ........................... 5,644,687 5,505,000
-------------- ----------------
5,852,022 5,692,500
-------------- ----------------
HEALTH CARE -- 0.0%
12,000 Omnicare Inc.,
4.000% Cv. Pfd., Ser. B ................... 680,848 430,200
-------------- ----------------
TELECOMMUNICATIONS -- 0.4%
50,000 Cincinnati Bell Inc.,
6.750% Cv. Pfd., Ser. B ................... 2,118,418 2,085,000
120,000 Crown Castle International Corp.,
6.250% Cv. Pfd. ........................... 5,522,500 7,305,000
-------------- ----------------
7,640,918 9,390,000
-------------- ----------------
TRANSPORTATION -- 0.1%
1,500 GATX Corp.,
$2.50 Cv. Pfd. ............................ 199,475 271,500
982 Kansas City Southern,
4.250% Cv. Pfd. ........................... 551,884 1,206,623
-------------- ----------------
751,359 1,478,123
-------------- ----------------
TOTAL CONVERTIBLE
PREFERRED STOCKS .......................... 31,133,381 36,284,476
-------------- ----------------
PRINCIPAL MARKET
AMOUNT COST VALUE
------------ -------------- ----------------
CONVERTIBLE CORPORATE BONDS -- 1.4%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.0%
$ 500,000 Standard Motor Products Inc.,
Sub. Deb. Cv.,
6.750%, 07/15/09 .......................... $ 490,998 $ 478,750
-------------- ----------------
BROADCASTING -- 0.5%
100,000 Lin Television Corp.,
Sub. Deb. Cv.,
2.500%, 05/15/33 .......................... 91,824 98,750
13,000,000 Sinclair Broadcast Group Inc.,
Sub. Deb. Cv.,
6.000%, 09/15/12 .......................... 11,132,579 11,960,000
-------------- ----------------
11,224,403 12,058,750
-------------- ----------------
COMMUNICATIONS EQUIPMENT -- 0.4%
10,000,000 Agere Systems Inc.,
Sub. Deb. Cv.,
6.500%, 12/15/09 .......................... 10,037,654 10,137,500
-------------- ----------------
ENTERTAINMENT -- 0.1%
1,500,000 The Walt Disney Co., Cv.,
2.125%, 04/15/23 .......................... 1,502,925 1,717,500
-------------- ----------------
REAL ESTATE -- 0.0%
1,100,000 Palm Harbor Homes Inc., Cv.,
3.250%, 05/15/24 .......................... 1,059,886 783,750
-------------- ----------------
RETAIL -- 0.2%
5,000,000 The Great Atlantic &
Pacific Tea Co. Inc., Cv.,
5.125%, 06/15/11 .......................... 5,000,000 5,350,000
-------------- ----------------
TELECOMMUNICATIONS -- 0.2%
5,000,000 Nortel Networks Corp., Cv.,
4.250%, 09/01/08 .......................... 4,960,110 4,931,250
-------------- ----------------
TOTAL CONVERTIBLE
CORPORATE BONDS ........................... 34,275,976 35,457,500
-------------- ----------------
SHARES
------------
WARRANTS -- 0.0%
FOOD AND BEVERAGE -- 0.0%
650 Parmalat SpA, GDR,
expire 12/31/15+ (b)(c)(d) ................ 0 1,094
-------------- ----------------
PRINCIPAL
AMOUNT
------------
U.S. GOVERNMENT OBLIGATIONS -- 6.9%
$172,481,000 U.S. Treasury Bills,
2.458% to 3.280%++,
01/10/08 to 06/12/08 ...................... 170,860,686 170,792,214
-------------- ----------------
TOTAL INVESTMENTS -- 100.0% ................................. $2,043,048,193 2,479,440,194
==============
OTHER ASSETS AND LIABILITIES (NET) .......................... (3,609,366)
PREFERRED SHARES
(5,814,200 preferred shares outstanding) ................. (500,000,000)
----------------
NET ASSETS -- COMMON SHARES
(83,829,070 common shares outstanding) ................... $ 1,975,830,828
================
NET ASSET VALUE PER COMMON SHARE
($1,975,830,828 / 83,829,070 shares outstanding) ......... $ 23.57
================
See accompanying notes to financial statements.
7
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2007
----------
(a) Security considered an affiliated holding because the Fund owns at least
5% of its outstanding shares.
(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, 2007, the market value of Rule 144A securities amounted to $3,298,763
or 0.13% of total investments. Except as noted in (c), these securities
are liquid.
(c) At December 31, 2007, the Fund held investments in restricted and illiquid
securities amounting to $1,321,249 or 0.05% of total investments, which
were valued under methods approved by the Board of Trustees as follows:
12/31/07
ACQUISITION ACQUISITION ACQUISITION CARRYING VALUE
SHARES ISSUER DATE COST PER UNIT
------------ ------ ----------- ----------- --------------
339,450 Parmalat SpA, GDR .................. 12/02/03 $ 981,615 $ 3.8891
650 Parmalat SpA, GDR warrants
expire 12/31/15 ................. 11/09/05 -- 1.6831
(d) Security fair valued under procedures established by the Board of
Trustees. The procedures may include reviewing available financial
information about the issuer and reviewing the valuation of comparable
securities and other factors on a regular basis. At December 31, 2007, the
market value of fair valued securities amounted to $1,387,983 or 0.06% of
total investments.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depository Receipt
GDR Global Depository Receipt
% OF
MARKET MARKET
VALUE VALUE
-------------- ----------------
GEOGRAPHIC DIVERSIFICATION
North America ............................................... 78.4% $ 1,944,109,818
Europe ...................................................... 15.5 384,446,081
Latin America ............................................... 2.8 69,076,096
Japan ....................................................... 2.5 62,147,487
Asia/Pacific ................................................ 0.8 19,660,712
------ ----------------
100.0% $ 2,479,440,194
====== ================
See accompanying notes to financial statements.
8
THE GABELLI DIVIDEND & INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2007
ASSETS:
Investments, at value (cost $2,040,940,094) ............... $2,477,559,234
Investments in affiliates, at value (cost $2,108,099) ..... 1,880,960
Cash ...................................................... 538,829
Foreign currency, at value (cost $53) ..................... 53
Receivable for investments sold ........................... 2,187,911
Dividends and interest receivable ......................... 3,021,035
Prepaid expense ........................................... 67,801
--------------
TOTAL ASSETS .............................................. 2,485,255,823
--------------
LIABILITIES:
Payable for investments purchased ......................... 537,562
Distributions payable ..................................... 421,166
Payable for investment advisory fees ...................... 6,703,965
Payable for payroll expenses .............................. 118,319
Payable for accounting fees ............................... 11,251
Unrealized depreciation on swap contracts ................. 1,247,597
Other accrued expenses .................................... 385,135
--------------
TOTAL LIABILITIES ......................................... 9,424,995
--------------
PREFERRED SHARES:
Series A Cumulative Preferred Shares (5.875%, $25
liquidation value, $0.001 par value, 3,200,000 shares
authorized with 3,200,000 shares issued
and outstanding) ....................................... 80,000,000
Series B Cumulative Preferred Shares (Auction Market,
$25,000 liquidation value, $0.001 par value, 4,000
shares authorized with 4,000 shares issued
and outstanding) ....................................... 100,000,000
Series C Cumulative Preferred Shares (Auction Market,
$25,000 liquidation value, $0.001 par value, 4,800
shares authorized with 4,800 shares issued
and outstanding) ....................................... 120,000,000
Series D Cumulative Preferred Shares (6.00%, $25
liquidation value, $0.001 par value, 2,600,000 shares
authorized with 2,600,000 shares issued
and outstanding) ....................................... 65,000,000
Series E Cumulative Preferred Shares (Auction Rate,
$25,000 liquidation value, $0.001 par value, 5,400
shares authorized with 5,400 shares issued
and outstanding) ....................................... 135,000,000
--------------
TOTAL PREFERRED SHARES .................................... 500,000,000
--------------
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS ............ $1,975,830,828
==============
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS CONSIST OF:
Paid-in capital, at $0.001 par value ...................... $1,540,876,648
Accumulated net investment income ......................... 1,741,110
Accumulated distributions in excess of net realized
gain on investments, written options, swap contracts,
and foreign currency transactions ...................... (1,935,749)
Net unrealized appreciation on investments ................ 436,392,001
Net unrealized depreciation on swap contracts ............. (1,247,597)
Net unrealized appreciation on foreign currency
translations ........................................... 4,415
--------------
NET ASSETS ................................................ $1,975,830,828
==============
NET ASSET VALUE PER COMMON SHARE
($1,975,830,828 / 83,829,070 shares outstanding;
unlimited number of shares authorized) .................... $ 23.57
==============
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2007
INVESTMENT INCOME:
Dividends (net of foreign taxes of $1,427,478) ............ $ 60,983,665
Interest .................................................. 11,397,454
--------------
TOTAL INVESTMENT INCOME ................................... 72,381,119
--------------
EXPENSES:
Investment advisory fees .................................. 25,456,085
Auction agent fees ........................................ 900,666
Shareholder communications expenses ....................... 559,489
Custodian fees ............................................ 308,103
Payroll expenses .......................................... 346,692
Trustees' fees ............................................ 172,531
Legal and audit fees ...................................... 87,450
Accounting fees ........................................... 45,000
Shareholder services fees ................................. 38,548
Interest expense .......................................... 6,840
Miscellaneous expenses .................................... 309,466
--------------
TOTAL EXPENSES ............................................ 28,230,870
Less: Custodian fee credits ............................... (136,994)
--------------
NET EXPENSES .............................................. 28,093,876
--------------
NET INVESTMENT INCOME ..................................... 44,287,243
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, WRITTEN OPTIONS, SWAP CONTRACTS,
AND FOREIGN CURRENCY:
Net realized gain on investments .......................... 107,494,194
Net realized gain on written options ...................... 384,353
Net realized gain on swap contracts ....................... 3,457,594
Net realized loss on foreign currency transactions ........ (132,244)
--------------
Net realized gain on investments, written options,
swap contracts, and foreign currency transactions ...... 111,203,897
--------------
Net change in unrealized appreciation/depreciation:
on investments ......................................... 8,311,512
on written options ..................................... 220,307
on swap contracts ...................................... (4,402,906)
on foreign currency translations ....................... 5,634
--------------
Net change in unrealized appreciation/depreciation on
investments, written options, swap contracts,
and foreign currency translations ...................... 4,134,547
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, WRITTEN OPTIONS, SWAP CONTRACTS,
AND FOREIGN CURRENCY ................................... 115,338,444
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...... 159,625,687
--------------
Total Distributions to Preferred Shareholders ............. (27,515,708)
--------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS RESULTING FROM OPERATIONS ................. $ 132,109,979
==============
See accompanying notes to financial statements.
9
THE GABELLI DIVIDEND & INCOME TRUST
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- -----------------
OPERATIONS:
Net investment income ............................................................... $ 44,287,243 $ 72,921,975
Net realized gain on investments, written options, swap contracts, and foreign
currency transactions ............................................................ 111,203,897 93,722,202
Net change in unrealized appreciation/depreciation on investments, written options,
swap contracts, and foreign currency translations ................................ 4,134,547 243,496,939
--------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................ 159,625,687 410,141,116
--------------- ---------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:
Net investment income ............................................................... (8,447,993) (10,255,572)
Net realized short-term gain on investments, written options, swap contracts, and
foreign currency transactions .................................................... (3,890,830) (4,091,893)
Net realized long-term gains on investments, written options, swap contracts,
and foreign currency transactions ................................................ (15,176,885) (11,704,448)
--------------- ---------------
TOTAL DISTRIBUTIONS TO PREFERRED SHAREHOLDERS ....................................... (27,515,708) (26,051,913)
--------------- ---------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS ........................................................ 132,109,979 384,089,203
--------------- ---------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ............................................................... (42,713,304) (50,995,124)
Net realized short-term gain on investments, written options, swap contracts, and
foreign currency transactions .................................................... (19,699,634) (20,346,652)
Net realized long-term gain on investments, written options, swap contracts, and
foreign currency transactions .................................................... (76,860,455) (58,199,561)
--------------- ---------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS .......................................... (139,273,393) (129,541,337)
--------------- ---------------
FUND SHARE TRANSACTIONS:
Net decrease from repurchase of common shares ....................................... (3,091,222) (6,491,041)
Recapture of gain on sale of Fund shares by an affiliate ............................ 4,338 --
Offering costs for preferred shares charged to paid-in capital ...................... -- (130,874)
--------------- ---------------
NET DECREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS ............................. (3,086,884) (6,621,915)
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS ........... (10,250,298) 247,925,951
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Beginning of period ................................................................. 1,986,081,126 1,738,155,175
--------------- ---------------
End of period (including undistributed net investment income of
$1,741,110 and $12,027,863, respectively) ........................................ $ 1,975,830,828 $ 1,986,081,126
=============== ===============
See accompanying notes to financial statements.
10
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION. The Gabelli Dividend & Income Trust (the "Fund") is a
non-diversified closed-end management investment company organized as a Delaware
statutory trust on November 18, 2003 and registered under the Investment Company
Act of 1940, as amended (the "1940 Act"). Investment operations commenced on
November 28, 2003.
The Fund's investment objective is to provide a high level of total return
on its assets with an emphasis on dividends and income. The Fund will attempt to
achieve its investment objective by investing, under normal market conditions,
at least 80% of its assets in dividend paying securities (such as common and
preferred stock) or other income producing securities (such as fixed income debt
securities and securities that are convertible into equity securities).
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 Trustees (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 to the valuation and changes in valuation of similar securities,
including a comparison of foreign securities to the equivalent U.S. dollar value
ADR securities at the close of the U.S. exchange; and evaluation of any other
information that could be indicative of the value of the security.
In September 2006, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. At this time,
management is in the process of reviewing the requirements of SFAS 157 against
its current valuation policies to determine future applicability.
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.
The Fund will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal to 102% of the dollar
amount invested by the 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, 2007, there were no open repurchase agreements.
11
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OPTIONS. The Fund may purchase or write call or put options on securities
or indices. As a writer of put options, the Fund receives a premium at the
outset and then bears the risk of unfavorable changes in the price of the
financial instrument underlying the option. The Fund would incur a loss if the
price of the underlying financial instrument decreases between the date the
option is written and the date on which the option is terminated. The Fund would
realize a gain, to the extent of the premium, if the price of the financial
instrument increases between those dates. If a call option is exercised, the
premium is added to the proceeds from the sale of the underlying security in
determining whether there has been a realized gain or loss. If a put option is
exercised, the premium reduces the cost basis of the security.
As a purchaser of put options, the Fund pays a premium for the right to
sell to the seller of the put option the underlying security at a specified
price. The seller of the put has the obligation to purchase the underlying
security upon exercise at the exercise price. If the price of the underlying
security declines, the Fund would realize a gain upon sale or exercise. If the
price of the underlying security increases or stays the same, the Fund would
realize a loss upon sale or at expiration date, but only to the extent of the
premium paid.
In the case of call options, these exercise prices are referred to as
"in-the-money," "at-the-money," and "out-of-the-money," respectively. The Fund
may write (a) in-the-money call options when the Adviser expects that the price
of the underlying security will remain stable or decline during the option
period, (b) covered at-the-money call options when the Adviser expects that the
price of the underlying security will remain stable, decline or advance
moderately during the option period, and (c) out-of-the-money call options when
the Adviser expects that the premiums received from writing the call option will
be greater than the appreciation in the price of the underlying security above
the exercise price. By writing a call option, the Fund limits its opportunity to
profit from any increase in the market value of the underlying security above
the exercise price of the option. Out-of-the-money, at-the-money, and
in-the-money put options (the reverse of call options as to the relation of
exercise price to market price) may be utilized in the same market environments
that such call options are used in equivalent transactions. At December 31,
2007, the Fund had no investments in options.
SWAP AGREEMENTS. The Fund may enter into equity swap and 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 B Preferred
Shares. 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. In an equity swap, a set of
future cash flows are exchanged between two counterparties. One of these cash
flow streams will typically be based on a reference interest rate combined with
the performance of a notional value of shares of a stock. The other will be
based on the performance of the shares of a stock. Swap and cap transactions
introduce additional risk because the Fund would remain obligated to pay
preferred share dividends when due in accordance with the Statement of
Preferences even if the counterparty defaulted.
The Fund has entered into an interest rate swap agreement with Citibank
N.A. Under the agreement the Fund receives a variable 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, 2007 are as follows:
NOTIONAL VARIABLE RATE* TERMINATION NET UNREALIZED
AMOUNT FIXED RATE (RATE RESET MONTHLY) DATE DEPRECIATION
------------------------------- -------------------------------- -------------------------------- ----------- --------------
$100,000,000 4.01% 5.225% 06/02/10 $(378,356)
----------
* Based on one month LIBOR (London Interbank Offered Rate).
The Fund has entered into equity swap agreements with Bear, Stearns
International Limited. Details of the swaps at December 31, 2007 are as follows:
NOTIONAL EQUITY SECURITY INTEREST RATE/ TERMINATION NET UNREALIZED
AMOUNT RECEIVED EQUITY SECURITY PAID DATE DEPRECIATION
------------------- -------------------- ------------------------ ----------- --------------
Market Value Overnight LIBOR plus 40 bps plus
Appreciation on: Market Value Depreciation on:
$ 4,136,800 (320,000 Shares) Cadbury Schweppes plc Cadbury Schweppes plc 02/15/08 $(188,873)
24,623,128 (1,800,000 Shares) Imperial Chemical Industries plc Imperial Chemical Industries plc 05/15/08 (680,368)
---------
$(869,241)
=========
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
12
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
negatively affect the Fund's ability to make dividend payments. In addition, at
the time an equity swap or 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 in the
Statement of Assets and Liabilities.
Unrealized gains related to swaps are reported as an asset and unrealized
losses are reported as a liability 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.
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, 2007, there were no
open futures contracts.
SECURITIES SOLD SHORT. The Fund may enter into short sale transactions.
Short selling involves selling securities that may or may not be owned and, at
times, borrowing the same securities for delivery to the purchaser, with an
obligation to replace such borrowed securities at a later date. The proceeds
received from short sales are recorded as liabilities and the Fund records an
unrealized gain or loss to the extent of the difference between the proceeds
received and the value of an open short position on the day of determination.
The Fund records a realized gain or loss when the short position is closed out.
By entering into a short sale, the Fund bears the market risk of an unfavorable
change in the price of the security sold short. Dividends on short sales are
recorded as an expense by the Fund on the ex-dividend date and interest expense
is recorded on the accrual basis. At December 31, 2007, there were no open
securities sold short.
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, 2007, 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 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.
13
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 is not subject to an
independent limitation on the amount it may invest 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 shown as "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.
Permanent differences for the fiscal year ended December 31, 2007 were primarily
attributable to REITS, foreign currency transactions, investments in swaps,
reclass of distributions and hybrids. These reclassifications have no impact on
the NAV of the Fund. For the fiscal year ended December 31, 2007,
reclassifications were made to decrease accumulated net investment income by
$3,412,699 and to decrease accumulated distributions in excess of net realized
gain on investments, swap contracts, options, and foreign currency transactions
by $3,470,514, with an offsetting adjustment to paid-in capital.
Distributions to shareholders of the Fund's 5.875% Series A Cumulative
Preferred Shares, Series B Auction Market Cumulative Preferred Shares, Series C
Auction Market Cumulative Preferred Shares, 6.00% Series D Cumulative Preferred
Shares, and Series E Auction Rate Cumulative Preferred Shares ("Cumulative
Preferred Shares") are recorded on a daily basis and are determined as described
in Note 5.
The tax character of distributions paid during the fiscal years ended
December 31, 2007 and December 31, 2006 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
-------------------------- --------------------------
COMMON PREFERRED COMMON PREFERRED
------------ ----------- ------------ -----------
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) ........ $ 62,419,734 $12,332,027 $ 71,341,776 $14,347,465
Net long-term capital gains ....................... 76,853,659 15,183,681 58,199,561 11,704,448
------------ ----------- ------------ -----------
Total distributions paid .......................... $139,273,393 $27,515,708 $129,541,337 $26,051,913
============ =========== ============ ===========
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, 2007, the difference between book basis and tax basis
unrealized appreciation was primarily due to deferral of losses from wash sales
for tax purposes, basis adjustments on investments in partnerships, and basis
adjustments due to income accruals on hybrid securities.
14
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As of December 31, 2007, the components of accumulated earnings (losses) on a
tax basis were as follows:
Undistributed ordinary income ............................. $ 38,659
Undistributed long-term capital gains ..................... 3,892,810
Net unrealized appreciation on investments, swap contracts,
and foreign currency transactions ...................... 430,529,603
Post-October currency loss deferral ....................... (99,471)
Other temporary differences* .............................. 592,579
------------
Total ..................................................... $434,954,180
============
----------
* Other temporary differences are primarily due to investments in swaps.
The following summarizes the tax cost of investments, written options,
swap contracts, and the related unrealized appreciation (depreciation) at
December 31, 2007:
GROSS GROSS NET UNREALIZED
COST/ UNREALIZED UNREALIZED APPRECIATION
PROCEEDS APPRECIATION DEPRECIATION (DEPRECIATION)
-------------- ------------ ------------- --------------
Investments ......... $2,047,667,409 $548,692,680 $(116,919,895) $ 431,772,785
Swap contracts ...... -- -- (1,247,597) (1,247,597)
-------------- ------------ ------------- --------------
$2,047,667,409 $548,692,680 $(118,167,492) $ 430,525,188
============== ============ ============= ==============
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes,
an Interpretation of FASB Statement No. 109" (the "Interpretation") established
a minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether the Fund is taxable in
a particular jurisdiction) and required certain expanded tax disclosures. The
Fund has adopted the Interpretation for all open tax years and it had no impact
on the amounts reported in the financial statements.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Fund has entered into 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 shares. 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 Preferred
Shares 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 Preferred Shares for the fiscal 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 Preferred Shares for the period. For the fiscal year ended December
31, 2007, the Fund's total return on the NAV of the common shares exceeded the
stated dividend rate or corresponding swap rate of all outstanding preferred
shares. Thus, management fees were accrued on these assets.
During the fiscal year ended December 31, 2007, the Fund paid brokerage
commissions on security trades of $1,183,791 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
fiscal year ended December 31, 2007, 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
the officers may receive incentive based variable compensation from affiliates
of the Adviser) and pays its allocated portion of the cost of the Fund's Chief
Compliance Officer. For the fiscal year ended December 31, 2007, the Fund paid
or accrued $346,692, which is included in payroll expenses in the Statement of
Operations.
During the year ended December 31, 2007, the Fund recaptured a gain of
$4,338 on the sale of its shares by an affiliate of the Adviser.
The Fund pays each Trustee who is not considered to be an affiliated
person an annual retainer of $12,000 plus $1,500 for each Board meeting attended
in person and $500 per telephonic meeting, and they are reimbursed for any out
of pocket expenses incurred in attending meetings. All Board committee members
receive $1,000 per meeting attended. In addition, the Audit Committee Chairman
receives an annual fee of $3,000, the Proxy Voting Committee Chairman receives
an annual fee of $1,500, and the Nominating Committee Chairman receives an
annual fee of $2,000. Trustees who are directors or employees of the Adviser or
an affiliated company receive no compensation or expense reimbursement from the
Fund.
15
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the fiscal year ended December 31, 2007, other than short-term and U.S
Government securities, aggregated $1,358,563,428 and $790,935,110, respectively.
Option contracts written by the Fund during the fiscal year ended December
31, 2007 were as follows:
NUMBER OF
CONTRACTS PREMIUMS
--------- -----------
Options outstanding at December 31, 2006 ... 5,544 $ 1,898,621
Options written ............................ 364 76,346
Options expired ............................ (2,075) (384,353)
Options exercised .......................... (3,833) (1,590,614)
------ -----------
Options outstanding at December 31, 2007 ... -- $ --
====== ===========
5. CAPITAL. The Fund is authorized to issue an unlimited number of common shares
of beneficial interest (par value $0.001). The Board has authorized the
repurchase of its shares on the open market when the shares are trading at a
discount of 7.5% or more (or such other percentage as the Board may determine
from time to time) from the NAV of the shares. During the fiscal years ended
December 31, 2007 and December 31, 2006, the Fund repurchased 144,100 and
340,235 shares of beneficial interest in the open market at a cost of $3,091,222
and $6,491,041 and an average discount of approximately 13.45% and 13.99%,
respectively, from its NAV. All shares of beneficial interest repurchased have
been retired.
Transactions in shares of beneficial interest were as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
------------------------- ----------------------------
Shares Amount Shares Amount
--------- ------------ --------- ------------
Net decrease from repurchase of common shares ...... (144,100) $(3,091,222) (340,235) $(6,491,041)
The Fund's Declaration of Trust, as amended, authorizes the issuance of an
unlimited number of shares of $0.001 par value Cumulative Preferred Shares. The
Cumulative Preferred Shares is senior to the common shares and results in the
financial leveraging of the common shares. Such leveraging tends to magnify both
the risks and opportunities to common shareholders. Dividends on shares of the
Cumulative Preferred Shares are cumulative. The Fund is required by the 1940 Act
and by the Statements of Preferences to meet certain asset coverage tests with
respect to the Cumulative Preferred Shares. 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 5.875% Series A, Series B Auction Market, Series
C Auction Market, 6.00% Series D, and Series E Auction Rate Cumulative Preferred
Shares at redemption prices of $25, $25,000, $25,000, $25, 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.
On October 12, 2004, the Fund received net proceeds of $77,280,971 (after
underwriting discounts of $2,520,000 and offering expenses of $199,029) from the
public offering of 3,200,000 shares of 5.875% Series A Cumulative Preferred
Shares. Commencing October 12, 2009 and thereafter, the Fund, at its option, may
redeem the 5.875% Series A Cumulative Preferred Shares in whole or in part at
the redemption price at any time. The Board has authorized the repurchase of
Series A Cumulative Preferred Shares in the open market at prices less than the
$25 liquidation value per share. During the fiscal year ended December 31, 2007,
the Fund did not repurchase any shares of 5.875% Series A Cumulative Preferred
Shares. At December 31, 2007, 3,200,000 shares of 5.875% Series A Cumulative
Preferred Shares were outstanding and accrued dividends amounted to $78,333.
On October 12, 2004, the Fund received net proceeds of $217,488,958 (after
underwriting discounts of $2,200,000 and offering expenses of $311,042) from the
public offering of 4,000 shares of Series B and 4,800 shares of Series C Auction
Market Cumulative Preferred Shares, respectively. 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. If the number of Series B or Series C
Auction Market Cumulative Preferred Shares subject to bid orders by potential
holders is less than the number of Series B or Series C Auction Market
Cumulative Preferred Shares subject to sell orders, then the auction is
considered to be a failed auction, and the dividend rate will be the maximum
rate. In that event, holders that have submitted sell orders may not be able to
sell any or all of the Series B or Series C Auction Market Cumulative Preferred
Shares for which they have submitted sell orders. The current maximum rate for
both Series B and Series C Auction Market Cumulative Preferred Shares is 125% of
the seven day Telerate/British Bankers Association LIBOR on the day of such
auction. The dividend rates of Series B Auction Market Cumulative Preferred
Shares ranged from 4.70% to 6.50% during the fiscal year ended December 31,
2007. The dividend rates of Series C Auction Market Cumulative Preferred Shares
ranged from 4.70% to 6.30% during the fiscal year ended December 31, 2007.
Existing shareholders may submit an order to hold, bid, or sell such shares on
each auction date. Series B and C Auction Market Cumulative Preferred Shares
shareholders may also trade shares in the secondary market. The Fund, at its
option, may redeem the Series B and C Auction Market Cumulative Preferred Shares
in whole or in part at the redemption price at any time. During the fiscal year
ended December 31, 2007, the Fund did not redeem any shares of Series B and C
Auction Market Cumulative Preferred Shares. At December 31, 2007, 4,000 and
4,800 shares of the Series B and C Auction
16
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Market Cumulative Preferred Shares were outstanding with an annualized dividend
rate of 5.30% and 6.00% per share and accrued dividends amounted to $88,333 and
$80,000, respectively.
On November 3, 2005, the Fund received net proceeds of $62,617,239 (after
underwriting discounts of $2,047,500 and offering expenses of $335,261) from the
public offering of 2,600,000 shares of 6.00% Series D Cumulative Preferred
Shares. Commencing November 3, 2010 and thereafter, the Fund, at its option, may
redeem the 6.00% Series D Cumulative Preferred Shares in whole or in part at the
redemption price at any time. The Board has authorized the repurchase of Series
D Cumulative Preferred Shares in the open market at prices less than the $25
liquidation value per share. During the fiscal year ended December 31, 2007, the
Fund did not repurchase any shares of 6.00% Series D Cumulative Preferred
Shares. At December 31, 2007, 2,600,000 shares of 6.00% Series D Cumulative
Preferred Shares were outstanding and accrued dividends amounted to $65,000.
On November 3, 2005, the Fund received net proceeds of $133,379,387 (after
underwriting discounts of $1,350,000 and offering expenses of $270,613) from the
public offering of 5,400 shares of Series E Auction Rate Cumulative Preferred
Shares. 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. If
the number of Series E Auction Rate Cumulative Preferred Shares subject to bid
orders by potential holders is less than the number of Series E Auction Rate
Cumulative Preferred Shares subject to sell orders, then the auction is
considered to be a failed auction, and the dividend rate will be the maximum
rate. In that event, holders that have submitted sell orders may not be able to
sell any or all of the Series E Auction Rate Cumulative Preferred Shares for
which they have submitted sell orders. The current maximum rate is 150% of the
seven day Telerate/British Bankers Association LIBOR on the day of such auction.
The dividend rates of Series E Auction Rate Cumulative Preferred Shares ranged
from 4.50% to 6.40% during the fiscal year ended December 31, 2007. Existing
shareholders may submit an order to hold, bid, or sell such shares on each
auction date. Series E Auction Rate Preferred Shares shareholders may also trade
shares in the secondary market. The Fund, at its option, may redeem the Series E
Auction Rate Preferred Shares in whole or in part at the redemption price at any
time. During the fiscal year ended December 31, 2007, the Fund did not redeem
any shares of Series E Auction Rate Preferred Shares. At December 31, 2007,
5,400 shares of Series E Auction Rate Cumulative Preferred Shares were
outstanding with an annualized dividend rate of 5.84% and accrued dividends
amounted to $109,500.
The holders of Cumulative Preferred Shares 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 shares as a single class. The
holders of Cumulative Preferred Shares voting together as a single class also
have the right currently to elect two Trustees and under certain circumstances
are entitled to elect a majority of the Board of Trustees. 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. TRANSACTIONS IN SECURITIES OF AFFILIATED ISSUERS. The 1940 Act defines
affiliated issuers as those in which the Fund's holdings of an issuer represent
5% or more of the outstanding voting securities of the issuer. A summary of the
Fund's transactions in the securities of this issuer during the fiscal year
ended December 31, 2007 is set forth below:
PERCENT
NET CHANGE IN VALUE AT OWNED OF
BEGINNING ENDING UNREALIZED DECEMBER 31, SHARES
SHARES SHARES DEPRECIATION 2007 OUTSTANDING
--------- ------- ------------- ------------ -----------
Trans-Lux Corp. -- 293,900 $(227,139) $1,880,960 14.55%
7. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
8. OTHER MATTERS. The Adviser and/or affiliates received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund share trading practices involving certain funds managed by the
Adviser. GAMCO Investors, Inc. ("GAMCO"), the Adviser's parent company,
responded to these requests for documents and testimony. In June 2006, GAMCO
began discussions with the SEC regarding a possible resolution of their inquiry.
In February 2007, the Adviser made an offer of settlement to the staff of the
SEC for communication to the Commission for its consideration to resolve this
matter. This offer of settlement is subject to agreement regarding the specific
language of the SEC's administrative order and other settlement documents. On a
separate matter, in September 2005, the Adviser was informed by the staff of the
SEC that the staff may recommend to the Commission that an administrative remedy
and a monetary penalty be sought from the Adviser in connection with the actions
of two of nine closed-end funds managed by the Adviser relating to Section 19(a)
and Rule 19a-1 of the 1940 Act. These provisions require registered investment
companies to provide written statements to shareholders when a dividend is made
from a source other than net investment income. While the two closed-end funds
sent annual statements and provided other materials containing this information,
the funds did not send written statements to shareholders with each distribution
in 2002 and 2003. The Adviser believes that all of the funds are now in
compliance. The Adviser believes that these matters would have no effect on the
Fund or any material adverse effect on the Adviser or its ability to manage the
Fund. The staff's notice to the Adviser did not relate to the Fund.
17
THE GABELLI DIVIDEND & INCOME TRUST
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD:
YEAR ENDED DECEMBER 31,
------------------------------------------ PERIOD ENDED
2007 2006 2005 2004 DECEMBER 31, 2003 (f)
-------- -------- ------- ------- ---------------------
OPERATING PERFORMANCE:
Net asset value, beginning of period .................... $ 23.65 $ 20.62 $ 20.12 $ 19.26 $ 19.06(g)
-------- -------- ------- ------- --------
Net investment income ................................... 0.53 0.87 0.55 0.40 --
Net realized and unrealized gain on investments,
written options, swap contracts, securities sold
short, and foreign currency transactions .............. 1.37 4.00 1.33 1.80 0.20
-------- -------- ------- ------- --------
Total from investment operations ........................ 1.90 4.87 1.88 2.20 0.20
-------- -------- ------- ------- --------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS: (a)
Net investment income ................................... (0.10) (0.12) (0.06) (0.01) --
Net realized gain on investments ........................ (0.23) (0.19) (0.10) (0.01) --
-------- -------- ------- ------- --------
Total distributions to preferred shareholders ........... (0.33) (0.31) (0.16) (0.02) --
-------- -------- ------- ------- --------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS RESULTING FROM OPERATIONS ................ 1.57 4.56 1.72 2.18 --
-------- -------- ------- ------- --------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ................................... (0.51) (0.61) (0.48) (0.39) --
Net realized gain on investments ........................ (1.15) (0.93) (0.72) (0.24) --
Return of capital ....................................... -- -- -- (0.57) --
-------- -------- ------- ------- --------
Total distributions to common shareholders .............. (1.66) (1.54) (1.20) (1.20) --
-------- -------- ------- ------- --------
FUND SHARE TRANSACTIONS:
Decrease in net asset value from common share
transactions .......................................... -- -- -- (0.05) --
Increase in net asset value from repurchase of common
shares ................................................ 0.01 0.01 0.02 -- --
Offering costs for common shares charged to paid-in
capital ............................................... -- -- -- (0.01) --
Offering costs for preferred shares charged to paid-in
capital ............................................... -- (0.00)(e) (0.04) (0.06) --
-------- -------- ------- ------- --------
Total from fund share transactions ...................... 0.01 0.01 (0.02) (0.12) --
-------- -------- ------- ------- --------
NET ASSET VALUE ATTRIBUTABLE TO COMMON SHAREHOLDERS,
END OF PERIOD ......................................... $ 23.57 $ 23.65 $ 20.62 $ 20.12 $ 19.26
======== ======== ======= ======= ========
NAV total return + ...................................... 7.75% 24.09% 9.47% 11.56% 1.0%*
======== ======== ======= ======= ========
Market value, end of period ............................. $ 20.68 $ 21.47 $ 17.62 $ 17.95 $ 20.00
======== ======== ======= ======= ========
Investment total return ++ .............................. 4.14% 31.82% 4.85% (4.15)% 0.0%**
======== ======== ======= ======= ========
See accompanying notes to financial statements.
18
THE GABELLI DIVIDEND & INCOME TRUST
FINANCIAL HIGHLIGHTS (CONTINUED)
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD:
YEAR ENDED DECEMBER 31,
----------------------------------------------------------- PERIOD ENDED
2007 2006 2005 2004 DECEMBER 31, 2003 (f)
----------- ----------- ---------- ---------- ---------------------
RATIOS AND SUPPLEMENTAL DATA:
Net assets including liquidation value of
preferred shares, end of period
(in 000's) ............................... $ 2,475,831 $ 2,486,081 $2,238,155 $2,006,703 --
Net assets attributable to common shares,
end of period (in 000's)................. $ 1,975,831 $ 1,986,081 $1,738,155 $1,706,703 $ 1,451,650
Ratio of net investment income to average
net assets attributable to common
shares before preferred share
distributions ............................ 2.17% 3.91% 2.75% 2.17% (0.04)%(h)
Ratio of operating expenses to average
net assets attributable to common
shares net of advisory fee reduction,
if any ................................... 1.38%(d) 1.41%(d) 1.33%(d) 1.12% 1.38%(h)
Ratio of operating expenses to average
net assets including liquidation value
of preferred shares net of advisory fee
reduction, if any ........................ 1.11%(d) 1.11%(d) 1.12%(d) 1.07% --
Portfolio turnover rate .................... 33.8% 28.8% 25.6% 33.3% 0.4%
5.875% SERIES A CUMULATIVE PREFERRED
SHARES
Liquidation value, end of period
(in 000's) .............................. $ 80,000 $ 80,000 $ 80,000 $ 80,000 --
Total shares outstanding (in 000's) ........ 3,200 3,200 3,200 3,200 --
Liquidation preference per share ........... $ 25.00 $ 25.00 $ 25.00 $ 25.00 --
Average market value (b) ................... $ 23.52 $ 23.86 $ 24.82 $ 24.68 --
Asset coverage per share ................... $ 123.79 $ 124.30 $ 111.91 $ 167.23 --
AUCTION MARKET SERIES B CUMULATIVE
PREFERRED SHARES
Liquidation value, end of period
(in 000's) .............................. $ 100,000 $ 100,000 $ 100,000 $ 100,000 --
Total shares outstanding (in 000's) ........ 4 4 4 4 --
Liquidation preference per share ........... $ 25,000 $ 25,000 $ 25,000 $ 25,000 --
Average market value (b) ................... $ 25,000 $ 25,000 $ 25,000 $ 25,000 --
Asset coverage per share ................... $ 123,792 $ 124,304 $ 111,908 $ 167,225 --
AUCTION MARKET SERIES C CUMULATIVE
PREFERRED SHARES
Liquidation value, end of period
(in 000's) .............................. $ 120,000 $ 120,000 $ 120,000 $ 120,000 --
Total shares outstanding (in 000's) ........ 5 5 5 5 --
Liquidation preference per share ........... $ 25,000 $ 25,000 $ 25,000 $ 25,000 --
Average market value (b) ................... $ 25,000 $ 25,000 $ 25,000 $ 25,000 --
Asset coverage per share ................... $ 123,792 $ 124,304 $ 111,908 $ 167,225 --
6.00% SERIES D CUMULATIVE PREFERRED
SHARES
Liquidation value, end of period
(in 000's) .............................. $ 65,000 $ 65,000 $ 65,000 -- --
Total shares outstanding (in 000's) ........ 2,600 2,600 2,600 -- --
Liquidation preference per share ........... $ 25.00 $ 25.00 $ 25.00 -- --
Average market value (b) ................... $ 24.41 $ 24.37 $ 24.72 -- --
Asset coverage per share ................... $ 123.79 $ 124.30 $ 111.91 -- --
AUCTION RATE SERIES E CUMULATIVE
PREFERRED SHARES
Liquidation value, end of period
(in 000's) .............................. $ 135,000 $ 135,000 $ 135,000 -- --
Total shares outstanding (in 000's) ........ 5 5 5 -- --
Liquidation preference per share ........... $ 25,000 $ 25,000 $ 25,000 -- --
Average market value (b) ................... $ 25,000 $ 25,000 $ 25,000 -- --
Asset coverage per share ................... $ 123,792 $ 124,304 $ 111,908 -- --
ASSET COVERAGE (c) ......................... 495% 497% 448% 669% --
----------
+ Based on net asset value per share, adjusted for reinvestment of
distributions at prices obtained under the Fund's dividend reinvestment
plan. Total return for periods of less than one year are not annualized.
++ Based on market value per share, adjusted for reinvestment of
distributions at prices obtained under the Fund's dividend reinvestment
plan. Total return for periods of less than one year are not annualized.
* Based on net asset value per share at commencement of operations of $19.06
per share.
** Based on market value per share at initial public offering of $20.00 per
share.
(a) Calculated based upon average common shares outstanding on the record
dates throughout the year.
(b) Based on weekly prices.
(c) Asset coverage is calculated by combining all series of preferred shares.
(d) The ratios do not include a reduction of expenses for custodian fee
credits on cash balances maintained with the custodian. Including such
custodian fee credits for the fiscal year ended December 31, 2007, the
ratios of operating expenses to average net assets attributable to common
shares net of fee reduction would have been 1.37% and the ratios of
operating expenses to average net assets including liquidation value of
preferred shares net of fee reduction would have been 1.10%. Custodian fee
credits for the fiscal years ended December 31, 2006 and 2005 were
minimal.
(e) Amount represents less than $0.005 per share.
(f) The Gabelli Dividend & Income Trust commenced investment operations on
November 28, 2003.
(g) The beginning NAV includes a $0.04 reduction for costs associated with the
initial public offering.
(h) Annualized.
See accompanying notes to financial statements.
19
THE GABELLI DIVIDEND & INCOME TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
The Gabelli Dividend & Income Trust:
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 Dividend & Income Trust
(hereafter referred to as the "Trust") at December 31, 2007, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the periods presented, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 2007 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 29, 2008
20
THE GABELLI DIVIDEND & INCOME TRUST
ADDITIONAL FUND INFORMATION (UNAUDITED)
The business and affairs of the Fund are managed under the direction of
the Fund's Board of Trustees. Information pertaining to the Trustees and
officers of the Fund is set forth below. The Fund's Statement of Additional
Information includes additional information about the Fund's Trustees and is
available, without charge, upon request, by calling 800-GABELLI (800-422-3554)
or by writing to The Gabelli Dividend & Income Trust 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) TRUSTEE DURING PAST FIVE YEARS HELD BY TRUSTEE(4)
------------------------ --------------- ------------- ------------------------------------- -------------------------------
INTERESTED TRUSTEES(3):
MARIO J. GABELLI Since 2003*** 26 Chairman and Chief Executive Officer Director of Morgan Group
Trustee and of GAMCO Investors, Inc. and Chief Holdings, Inc. (holding
Chief Investment Officer Investment Officer - Value Portfolios company); Chairman of the
Age: 65 of Gabelli Funds, LLC and GAMCO Asset Board of LICT Corp.
Management Inc.; Director/Trustee or (multimedia and
Chief Investment Officer of other communication services
registered investment companies company)
in the Gabelli/GAMCO Funds complex;
Chairman and Chief Executive Officer
of GGCP, Inc.
SALVATORE M. SALIBELLO Since 2003** 3 Certified Public Accountant and --
Trustee Managing Partner of the public
Age: 62 accounting firm Salibello & Broder
LLP since 1978
EDWARD T. TOKAR Since 2003** 2 Senior Managing Director of Beacon Trustee, LEVCO Series Trust;
Trustee Trust Company (trust services) Director of DB Hedge Strategies
Age: 60 since 2004; Chief Executive Officer Fund LLC; Director of the
of Allied Capital Management LLC Topiary Benefit Plan Investor
(1977-2004); Vice President of Fund LLC (financial services)
Honeywell International Inc.
(1977-2004)
INDEPENDENT TRUSTEES(5):
ANTHONY J. COLAVITA Since 2003* 35 Partner in the law firm of --
Trustee Anthony J. Colavita, P.C.
Age: 72
JAMES P. CONN Since 2003** 16 Former Managing Director and Chief --
Trustee Investment Officer of Financial
Age: 69 Security Assurance Holdings Ltd.
(insurance holding company)
(1992-1998)
MARIO D'URSO Since 2003*** 4 Chairman of Mittel Capital Markets --
Trustee S.p.A. since 2001; Senator in the
Age: 67 Italian Parliament (1996-2001)
FRANK J. FAHRENKOPF, JR. Since 2003* 5 President and Chief Executive Officer --
Trustee of the American Gaming Association;
Age: 68 Co-Chairman of the Commission on
Presidential Debates; Former Chairman
of the Republican National Committee
(1983-1989)
MICHAEL J. MELARKEY Since 2003*** 4 Partner in the law firm of Avansino, Director of Southwest Gas
Trustee Melarkey, Knobel & Mulligan Corporation (natural gas
Age: 58 utility)
ANTHONIE C. VAN EKRIS Since 2003* 19 Chairman of BALMAC International, --
Trustee Inc. (commodities and futures
Age: 73 trading)
SALVATORE J. ZIZZA Since 2003* 26 Chairman of Zizza & Co., Ltd. Director of Hollis-Eden
Trustee (consulting) Pharmaceuticals (biotechnology)
Age: 62 and Earl Scheib, Inc.
(automotive services)
21
THE GABELLI DIVIDEND & INCOME TRUST
ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED)
TERM OF
OFFICE AND
NAME, POSITION(S) LENGTH OF
ADDRESS(1) TIME PRINCIPAL OCCUPATION(S)
AND AGE SERVED(2) DURING PAST FIVE YEARS
------------------------ ---------- ----------------------------------------------------------------------------------------
OFFICERS:
BRUCE N. ALPERT Since 2003 Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC since
President 1988 and an officer of most of the registered investment companies in the Gabelli/GAMCO
Age: 56 Funds complex. Director and President of Gabelli Advisers, Inc. since 1998
CARTER W. AUSTIN Since 2003 Vice President of The Gabelli Equity Trust since 2000, The Gabelli Global Gold,
Vice President Natural Resources & Income Trust since 2005, The Gabelli Global Deal Fund since 2006, and
Age: 41 The Gabelli Healthcare & Wellness(Rx) Trust since 2007; Vice President of Gabelli Funds,
LLC since 1996
PETER D. GOLDSTEIN Since 2004 Director of Regulatory Affairs at GAMCO Investors, Inc. since 2004; Chief Compliance
Chief Compliance Officer Officer of all of the registered investment companies in the Gabelli/GAMCO Funds
Age: 54 complex; Vice President of Goldman Sachs Asset Management from 2000 through 2004
JAMES E. MCKEE Since 2003 Vice President, General Counsel, and Secretary of GAMCO Investors, Inc. (since 1999)
Secretary and GAMCO Asset Management Inc. (since 1993); Secretary of all of the registered
Age: 44 investment companies in the Gabelli/GAMCO Funds complex
AGNES MULLADY Since 2006 Vice President of Gabelli Funds, LLC since 2007; Officer of all of the registered
Treasurer investment companies in the Gabelli/GAMCO Funds complex; Senior Vice President of U.S.
Age: 49 Trust Company, N.A. and Treasurer and Chief Financial Officer of Excelsior Funds from
2004 through 2005; Chief Financial Officer of AMIC Distribution Partners from 2002
through 2004; Controller of Reserve Management Corporation and Reserve Partners, Inc.
and Treasurer of Reserve Funds from 2000 through 2002
----------
(1) Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
(2) The Fund's Board of Trustees 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 2008 Annual Meeting of Shareholders or
until their successors are duly elected and qualified.
** - 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.
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 1940 Act. Mr. Gabelli
is an "interested person" of the Fund as a result of his employment as an
officer of the Adviser. Mr. Gabelli is also a registered representative of
an affiliated broker-dealer. Mr. Tokar is an "interested person" as a
result of his son's employment by an affiliate of the Adviser. Mr.
Salibello may be considered an "interested person" of the Fund as a result
of being a partner in an accounting firm that provides professional
services to affiliates of the Adviser.
(4) 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.
(5) Trustees who are not interested persons are considered "Independent"
Trustees.
CERTIFICATIONS
The Fund's Chief Executive Officer has certified to the New York Stock
Exchange ("NYSE") that, as of June 13, 2007, 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.
22
THE GABELLI DIVIDEND & INCOME TRUST
INCOME TAX INFORMATION (UNAUDITED)
DECEMBER 31, 2007
CASH DIVIDENDS AND DISTRIBUTIONS
TOTAL AMOUNT ORDINARY LONG-TERM DIVIDEND
PAYABLE RECORD PAID INVESTMENT CAPITAL REINVESTMENT
DATE DATE PER SHARE (a) INCOME (a) GAINS (a) PRICE
-------- -------- ------------- ---------- --------- ------------
COMMON SHARES
01/25/07 01/17/07 $0.10000 $0.08890 $0.01110 $21.0284
02/22/07 02/13/07 0.10000 0.05450 0.04550 21.7244
03/26/07 03/16/07 0.11000 0.04530 0.06470 21.4510
04/24/07 04/16/07 0.10000 0.04110 0.05890 22.2116
05/24/07 05/16/07 0.10000 0.04110 0.05890 22.5069
06/25/07 06/15/07 0.11000 0.04530 0.06470 22.1204
07/25/07 07/17/07 0.10000 0.04110 0.05890 21.4287
08/27/07 08/17/07 0.10000 0.04110 0.05890 20.7886
09/24/07 09/14/07 0.11000 0.04530 0.06470 21.5805
10/25/07 10/17/07 0.10000 0.04110 0.05890 21.7684
11/26/07 11/15/07 0.10000 0.04110 0.05890 20.3747
12/17/07 12/12/07 0.53000 0.21800 0.31200 20.3636
-------- -------- --------
$1.66000 $0.74390 $0.91610
5.875% SERIES A PREFERRED SHARES
03/26/07 03/19/07 $0.36719 $0.20516 $0.16203
06/26/07 06/19/07 0.36719 0.15106 0.21612
09/26/07 09/19/07 0.36719 0.15106 0.21612
12/26/07 12/18/07 0.36719 0.15106 0.21612
-------- -------- --------
$1.46875 $0.65835 $0.81040
6.00% SERIES D PREFERRED SHARES
03/26/07 03/19/07 $0.37500 $0.20950 $0.16550
06/26/07 06/19/07 0.37500 0.15430 0.22070
09/26/07 09/19/07 0.37500 0.15430 0.22070
12/26/07 12/18/07 0.37500 0.15430 0.22070
-------- -------- --------
$1.50000 $0.67240 $0.82760
SERIES B AND C AUCTION MARKET AND SERIES E AUCTION RATE PREFERRED SHARES
The Series B Auction Market Preferred Shares, Series C Auction Market
Preferred Shares, and Series E Auction Rate Preferred Shares pay dividends
weekly based on a rate set at auction, usually held every seven days. The
percentage of 2007 distributions derived from long-term capital gains for the
Series B Auction Market Preferred Shares, Series C Auction Market Preferred
Shares, and Series E Auction Rate Preferred Shares was 55.16%, 55.14%, and
55.15%, respectively.
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 2007 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 2 of
Form 1099-DIV. The long-term gain distribution for the fiscal year ended
December 31, 2007 is $92,632,038, or the maximum allowable.
23
THE GABELLI DIVIDEND & INCOME TRUST
INCOME TAX INFORMATION (CONTINUED) (UNAUDITED)
DECEMBER 31, 2007
CORPORATE DIVIDENDS RECEIVED DEDUCTION, QUALIFIED DIVIDEND INCOME, AND U.S.
GOVERNMENT SECURITIES INCOME
The Fund paid to common, 5.875% Series A, and 6.00% Series D preferred
shareholders ordinary income dividends of $0.7439, $0.6583, and $0.6724 per
share, respectively, in 2007. The Fund paid weekly distributions to Series B, C,
and E preferred shareholders at varying rates throughout the year, including
ordinary income dividends totaling $604.6950, $598.6147, and $595.2829 per
share, respectively, in 2007. For the year ended December 31, 2007, 75.99% of
the ordinary dividend qualified for the dividends received deduction available
to corporations, and 93.51% of the ordinary income distribution was qualified
dividend income. The percentage of ordinary income dividends paid by the Fund
during 2007 derived from U.S. Treasury Securities was 0.44%. 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 2007. The percentage of net assets
of U.S. Treasury Securities held as of December 31, 2007 was 6.90%.
HISTORICAL DISTRIBUTION SUMMARY
SHORT-TERM LONG-TERM ADJUSTMENT
INVESTMENT CAPITAL CAPITAL RETURN OF TOTAL TO
INCOME (b) GAINS (b) GAINS CAPITAL (c) DISTRIBUTIONS (a) COST BASIS (d)
---------- ---------- ---------- ----------- ----------------- --------------
COMMON SHARES
2007 .................. $ 0.50910 $ 0.23480 $ 0.91610 -- $ 1.66000 --
2006 .................. 0.60798 0.24082 0.69120 -- 1.54000 --
2005 .................. 0.45996 0.08568 0.65436 -- 1.20000 --
2004 .................. 0.40005 0.10023 0.13893 $0.56079 1.20000 $0.56079
5.875% PREFERRED SHARES
2007 .................. $ 0.45059 $ 0.20776 $ 0.81040 -- $ 1.46875 --
2006 .................. 0.57983 0.22967 0.65925 -- 1.46875 --
2005 .................. 0.56290 0.10493 0.80092 -- 1.46875 --
2004 .................. 0.19150 0.04798 0.06651 -- 0.30599 --
6.00% PREFERRED SHARES
2007 .................. $ 0.46020 $ 0.21220 $ 0.82760 -- $ 1.50000 --
2006 .................. 0.59215 0.23457 0.67328 -- 1.50000 --
2005 .................. 0.08620 0.01610 0.12270 -- 0.22500 --
AUCTION MARKET/RATE PREFERRED SHARES
2007 Class B Shares ... $414.02782 $190.66719 $743.74499 -- $1,348.44000 --
2007 Class C Shares ... 409.97064 188.64406 735.87530 -- 1,334.49000 --
2007 Class E Shares ... 407.63287 187.65002 731.97711 -- 1,327.26000 --
2006 Class B Shares ... 484.90820 192.07260 551.32920 -- 1228.31000 --
2006 Class C Shares ... 484.32800 191.84250 550.66950 -- 1226.84000 --
2006 Class E Shares ... 483.94880 191.69260 550.23860 -- 1225.88000 --
2005 Class B Shares ... 320.22640 59.69220 455.63150 -- 835.55000 --
2005 Class C Shares ... 324.19300 60.43160 461.27540 -- 845.90000 --
2005 Class E Shares ... 67.54440 12.59070 96.10490 -- 176.24000 --
2004 Class B Shares ... 68.71140 17.21520 23.86340 -- 109.80000 --
2004 Class C Shares ... 70.77030 17.73100 24.57840 -- 113.10000 --
----------
(a) Total amounts may differ due to rounding.
(b) Taxable as ordinary income for Federal tax purposes.
(c) Non-taxable.
(d) Decrease in cost basis.
24
THE GABELLI DIVIDEND & INCOME TRUST
ANNUAL APPROVAL OF CONTINUANCE OF INVESTMENT ADVISORY AGREEMENT (UNAUDITED)
During the six months ended December 31, 2007, the Board of Trustees of the
Trust approved the continuation of the investment advisory agreement with the
Adviser for the Trust on the basis of the recommendation by the trustees (the
"Independent Board Members") who are not "interested persons" of the Trust. The
following paragraphs summarize the material information and factors considered
by the Independent Board Members as well as their conclusions relative to such
factors.
NATURE, EXTENT, AND QUALITY OF SERVICES. The Independent Board Members
considered information regarding the portfolio managers, the depth of the
analyst pool available to the Adviser and the portfolio managers, the scope of
administrative, shareholder, and other services supervised or provided by the
Adviser, and the absence of significant service problems reported to the Board.
The Independent Board Members noted the experience, length of service, and
reputation of the portfolio managers.
THE PERFORMANCE OF THE FUND AND OF THE ADVISER. The Independent Board Members
reviewed the performance of the Fund since inception against a peer group of all
leveraged closed-end value funds prepared by Lipper. The Board Members noted the
Fund's excellent performance for the one year period, two year period, and since
inception relative to the Fund's initial goal of earning at least 9%. The Board
Members also noted that the performance was slightly below average in comparison
to the Lipper universe.
THE COST OF THE ADVISORY SERVICES AND THE PROFITS TO THE ADVISER AND ITS
AFFILIATES FROM THE RELATIONSHIP WITH THE FUND. The Independent Board Members
reviewed summary data regarding the profitability of the Fund to the Adviser.
THE EXTENT TO WHICH ECONOMIES OF SCALE WILL BE REALIZED AS THE FUND GROWS AND
WHETHER FEE LEVELS REFLECT THOSE ECONOMIES OF SCALE. The Independent Board
Members noted that the Fund was a closed-end fund trading at a discount to net
asset value and accordingly unlikely to achieve growth of the type that might
lead to economies of scale that the shareholders would not participate in. The
Independent Board Members noted that the investment management fee schedule for
the Fund does not take into account any potential economies of scale that may
develop.
OTHER FACTORS. The Independent Board Members compared the expense ratios of the
investment management fee, other expenses, and total expenses of the Fund to
similar expense ratios of the Lipper peer group of leveraged closed-end value
funds and noted that the Adviser's management fee includes substantially all
administrative services of the Fund as well as investment advisory services. The
Board noted that the Fund was larger than average within the peer group and that
its expense ratios were also slightly above average. The Board Members also
noted that the management fee structure was the same as that in effect for most
of the Gabelli funds. The Board Members were presented with, but did not attach
significance to, information comparing the management fee to the fee for other
types of accounts managed by an affiliate of the Adviser.
CONCLUSIONS. The Independent Board Members concluded that the Fund enjoyed
highly experienced portfolio management services, good ancillary services, and a
favorable performance record. The Independent Board Members also concluded that
the Fund's expense ratios and the profitability to the Adviser of managing the
Fund were reasonable, and that economies of scale were not a significant factor
in their thinking. The Board Members did not view the potential profitability of
ancillary services as material to their decision. On the basis of the foregoing
and without assigning particular weight to any single conclusion, the
Independent Board Members determined to recommend continuation of the Advisory
Agreement to the full Board of Board Members.
25
AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLANS
ENROLLMENT IN THE PLAN
It is the policy of The Gabelli Dividend & Income Trust (the "Fund") to
automatically reinvest dividends payable to common shareholders. As a
"registered" shareholder you automatically become a participant in the Fund's
Automatic Dividend Reinvestment Plan (the "Plan"). The Plan authorizes the Fund
to credit common shares to participants upon an income dividend or a capital
gains distribution regardless of whether the shares are trading at a discount or
a premium to net asset value. All distributions to shareholders whose shares are
registered in their own names will be automatically reinvested pursuant to the
Plan in additional shares of the Fund. Plan participants may send their common
shares certificates to Computershare Trust Company, N.A. ("Computershare") to be
held in their dividend reinvestment account. Registered shareholders wishing to
receive their distributions in cash must submit this request in writing to:
The Gabelli Dividend & Income Trust
c/o Computershare
P.O. Box 43010
Providence, RI 02940-3010
Shareholders requesting this cash election must include the shareholder's
name and address as they appear on the share certificate. Shareholders with
additional questions regarding the Plan or requesting a copy of the terms of the
Plan may contact Computershare at (800) 336-6983.
If your shares are held in the name of a broker, bank, or nominee, you
should contact such institution. If such institution is not participating in the
Plan, your account will be credited with a cash dividend. In order to
participate in the Plan through such institution, it may be necessary for you to
have your shares taken out of "street name" and re-registered in your own name.
Once registered in your own name your distributions will be automatically
reinvested. Certain brokers participate in the Plan. Shareholders holding shares
in "street name" at participating institutions will have dividends automatically
reinvested. Shareholders wishing a cash dividend at such institution must
contact their broker to make this change.
The number of shares of common shares distributed to participants in the
Plan in lieu of cash dividends is determined in the following manner. Under the
Plan, whenever the market price of the Fund's common shares is equal to or
exceeds net asset value at the time shares are valued for purposes of
determining the number of shares equivalent to the cash dividends or capital
gains distribution, participants are issued shares of common shares valued at
the greater of (i) the net asset value as most recently determined or (ii) 95%
of the then current market price of the Fund's common shares. The valuation date
is the dividend or distribution payment date or, if that date is not a New York
Stock Exchange ("NYSE") trading day, the next trading day. If the net asset
value of the common shares at the time of valuation exceeds the market price of
the common shares, participants will receive shares from the Fund valued at
market price. If the Fund should declare a dividend or capital gains
distribution payable only in cash, Computershare will buy shares of common
shares in the open market, or on the NYSE or elsewhere, for the participants'
accounts, except that Computershare will endeavor to terminate purchases in the
open market and cause the Fund to issue shares at net asset value if, following
the commencement of such purchases, the market value of the common shares
exceeds the then current net asset value.
The automatic reinvestment of dividends and capital gains distributions
will not relieve participants of any income tax which may be payable on such
distributions. A participant in the Plan will be treated for federal income tax
purposes as having received, on a dividend payment date, a dividend or
distribution in an amount equal to the cash the participant could have received
instead of shares.
VOLUNTARY CASH PURCHASE PLAN
The Voluntary Cash Purchase Plan is yet another vehicle for our
shareholders to increase their investment in the Fund. In order to participate
in the Voluntary Cash Purchase Plan, shareholders must have their shares
registered in their own name.
Participants in the Voluntary Cash Purchase Plan have the option of making
additional cash payments to Computershare for investments in the Fund's common
shares at the then current market price. Shareholders may send an amount from
$250 to $10,000. Computershare will use these funds to purchase shares in the
open market on or about the 1st and 15th of each month. Computershare will
charge each shareholder who participates $0.75, plus a pro rata share of the
brokerage commissions. Brokerage charges for such purchases are expected to be
less than the usual brokerage charge for such transactions. It is suggested that
any voluntary cash payments be sent to Computershare, P.O. Box 43010,
Providence, RI 02940-3010 such that Computershare receives such payments
approximately 10 days before the 1st and 15th of the month. Funds not received
at least five days before the investment date shall be held for investment until
the next purchase date. A payment may be withdrawn without charge if notice is
received by Computershare at least 48 hours before such payment is to be
invested.
SHAREHOLDERS WISHING TO LIQUIDATE SHARES HELD AT COMPUTERSHARE must do so
in writing or by telephone. Please submit your request to the above mentioned
address or telephone number. Include in your request your name, address, and
account number. The cost to liquidate shares is $2.50 per transaction as well as
the brokerage commission incurred. Brokerage charges are expected to be less
than the usual brokerage charge for such transactions.
For more information regarding the Automatic Dividend Reinvestment Plan
and Voluntary Cash Purchase Plan, brochures are available by calling (914)
921-5070 or by writing directly to the Fund.
The Fund reserves the right to amend or terminate the Plan as applied to
any voluntary cash payments made and any dividend or distribution paid
subsequent to written notice of the change sent to the members of the Plan at
least 90 days before the record date for such dividend or distribution. The Plan
also may be amended or terminated by Computershare on at least 90 days written
notice to participants in the Plan.
------------------------------------------------------------
The Annual Meeting of The Gabelli Dividend & Income Trust's
shareholders will be held on Monday, May 19, 2008 at the
Greenwich Library in Greenwich, Connecticut.
------------------------------------------------------------
26
TRUSTEES AND OFFICERS
THE GABELLI DIVIDEND & INCOME TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES OFFICERS
Mario J. Gabelli, CFA Bruce N. Alpert
CHAIRMAN & CHIEF EXECUTIVE OFFICER, PRESIDENT
GAMCO INVESTORS, INC.
Carter W. Austin
Anthony J. Colavita VICE PRESIDENT
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C. Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
James P. Conn
FORMER MANAGING DIRECTOR & James E. McKee
CHIEF INVESTMENT OFFICER, SECRETARY
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Agnes Mullady
Mario d'Urso TREASURER
CHAIRMAN, MITTEL CAPITAL MARKETS SPA
INVESTMENT ADVISER
Frank J. Fahrenkopf, Jr. Gabelli Funds, LLC
PRESIDENT & CHIEF EXECUTIVE OFFICER, One Corporate Center
AMERICAN GAMING ASSOCIATION Rye, New York 10580-1422
Michael J. Melarkey CUSTODIAN
ATTORNEY-AT-LAW, State Street Bank and Trust Company
AVANSINO, MELARKEY, KNOBEL & MULLIGAN
COUNSEL
Salvatore M. Salibello Skadden, Arps, Slate, Meagher & Flom LLP
CERTIFIED PUBLIC ACCOUNTANT,
SALIBELLO & BRODER, LLP TRANSFER AGENT AND REGISTRAR
Computershare Trust Company, N.A.
Edward T. Tokar
SENIOR MANAGING DIRECTOR, STOCK EXCHANGE LISTING
BEACON TRUST COMPANY 5.875% 6.00%
Common Preferred Preferred
Anthonie C. van Ekris ---------- ---------- ----------
CHAIRMAN, BALMAC INTERNATIONAL, INC. NYSE-Symbol: GDV GDV PrA GDV PrD
Shares Outstanding: 83,829,070 3,200,000 2,600,000
Salvatore J. Zizza
CHAIRMAN, ZIZZA & CO., LTD. The Net Asset Value per share appears in
the Publicly Traded Funds column, under
the heading "General 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 "General 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
its common shares in the open market when the Fund's shares are trading at a
discount of 7.5% or more from the net asset value of the shares. The Fund may
also, from time to time, purchase its Cumulative Preferred Shares in the open
market when the shares are trading at a discount to liquidation value.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THE GABELLI DIVIDEND & INCOME TRUST
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 GDV Q4/2007
--------------------------------------------------------------------------------
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
Trustees has determined that Salvatore J. Zizza 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
$50,700 in 2006 and $53,250 in 2007.
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 $13,800 in 2006 and $6,300 in 2007. 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 $3,100 in 2006 and $4,350
in 2007. Tax fees represent tax compliance services provided in
connection with the review of the Registrant's tax returns.
ALL OTHER FEES
(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are $0
in 2006 and $0 in 2007.
(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) Not applicable
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was zero percent (0%).
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services
to the registrant for each of the last two fiscal years of the
registrant was $0 in 2006 and $0 in 2007.
(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: Frank J. Fahrenkopf, Jr., Anthonie C. van Ekris and Salvatore
J. Zizza.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The Proxy Voting Policies are attached herewith.
THE VOTING OF PROXIES ON BEHALF OF CLIENTS
Rules 204(4)-2 and 204-2 under the Investment Advisers Act of 1940 and
Rule 30b1-4 under the Investment Company Act of 1940 require investment advisers
to adopt written policies and procedures governing the voting of proxies on
behalf of their clients.
These procedures will be used by GAMCO Asset Management Inc., Gabelli
Funds, LLC, Gabelli Securities, Inc., and 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.
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.
Each matter submitted to the Committee will be determined by the vote
of a majority of the members present at the meeting. Should the vote concerning
one or more recommendations be tied in a vote of the Committee, the Chairman of
the Committee will cast the deciding vote. The Committee will notify the proxy
department of its decisions and the proxies will be voted accordingly.
Although the Proxy Guidelines express the normal preferences for the
voting of any shares not covered by a contrary investment guideline provided by
the client, the Committee is not bound by the preferences set forth in the Proxy
Guidelines and will review each matter on its own merits. Written minutes of all
Proxy Voting Committee meetings will be maintained. The Advisers subscribe to
ISS, which supplies current information on companies, matters being voted on,
regulations, trends in proxy voting and information on corporate governance
issues.
If the vote cast either by the analyst or as a result of the
deliberations of the Proxy Voting Committee runs contrary to the recommendation
of the Board of Directors of the issuer, the matter will be referred to legal
counsel to determine whether an amendment to the most recently filed Schedule
13D is appropriate.
II. SOCIAL ISSUES AND OTHER CLIENT GUIDELINES
If a client has provided special instructions relating to the voting of
proxies, they should be noted in the client's account file and forwarded to the
proxy department. This is the responsibility of the investment professional or
sales assistant for the client. In accordance with Department of Labor
guidelines, the Advisers' policy is to vote on behalf of ERISA accounts in the
best interest of the plan participants with regard to social issues that carry
an economic impact. Where an account is not governed by ERISA, the Advisers will
vote shares held on behalf of the client in a manner consistent with any
individual investment/voting guidelines provided by the client. Otherwise the
Advisers will abstain with respect to those shares.
III. CLIENT RETENTION OF VOTING RIGHTS
If a client chooses to retain the right to vote proxies or if there is
any change in voting authority, the following should be notified by the
investment professional or sales assistant for the client.
- Operations
- Legal Department
- Proxy Department
- Investment professional assigned to the account
In the event that the Board of Directors (or a Committee thereof) of
one or more of the investment companies managed by one of the Advisers has
retained direct voting control over any security, the Proxy Voting Department
will provide each Board Member (or Committee member) with a copy of the proxy
statement together with any other relevant information including recommendations
of ISS or other third-party services.
IV. VOTING RECORDS
The Proxy Voting Department will retain a record of matters voted upon
by the Advisers for their clients. The Advisers 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. 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.
o Banks and brokerage firms issuing proxies directly:
The bank is called and/or faxed and a legal proxy is requested.
All legal proxies should appoint:
"REPRESENTATIVE OF [ADVISER NAME] WITH FULL POWER OF SUBSTITUTION."
b) The legal proxies are given to the person attending the meeting along with
the following supplemental material:
o A limited Power of Attorney appointing the attendee an Adviser
representative.
o A list of all shares being voted by custodian only. Client names and account
numbers are not included. This list must be presented, along with the
proxies, to the Inspectors of Elections and/or tabulator at least one-half
hour prior to the scheduled start of the meeting. The tabulator must
"qualify" the votes (i.e. determine if the vote have previously been cast, if
the votes have been rescinded, etc. vote have previously been cast, etc.).
o A sample ERISA and Individual contract.
o A sample of the annual authorization to vote proxies form.
o A copy of our most recent Schedule 13D filing (if applicable).
APPENDIX A
PROXY GUIDELINES
PROXY VOTING GUIDELINES
GENERAL POLICY STATEMENT
It is the policy of GAMCO INVESTORS, INC. to vote in the best economic interests
of our clients. As we state in our Magna Carta of Shareholders Rights,
established in May 1988, we are neither FOR nor AGAINST management. We are for
shareholders.
At our first proxy committee meeting in 1989, it was decided that each proxy
statement should be evaluated on its own merits within the framework first
established by our Magna Carta of Shareholders Rights. The attached guidelines
serve to enhance that broad framework.
We do not consider any issue routine. We take into consideration all of our
research on the company, its directors, and their short and long-term goals for
the company. In cases where issues that we generally do not approve of are
combined with other issues, the negative aspects of the issues will be factored
into the evaluation of the overall proposals but will not necessitate a vote in
opposition to the overall proposals.
BOARD OF DIRECTORS
The advisers do not consider the election of the Board of Directors a routine
issue. Each slate of directors is evaluated on a case-by-case basis.
Factors taken into consideration include:
o Historical responsiveness to shareholders
This may include such areas as:
-Paying greenmail
-Failure to adopt shareholder resolutions receiving a majority of
shareholder votes
o Qualifications
o Nominating committee in place
o Number of outside directors on the board
o Attendance at meetings
o Overall performance
SELECTION OF AUDITORS
In general, we support the Board of Directors' recommendation for 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.
Where a classified board is in place we will generally not support attempts to
change to an annually elected board.
When an annually elected board is in place, we generally will not support
attempts to classify the board.
INCREASE AUTHORIZED COMMON STOCK
The request to increase the amount of outstanding shares is considered on a
case-by-case basis.
Factors taken into consideration include:
o Future use of additional shares
-Stock split
-Stock option or other executive compensation plan
-Finance growth of company/strengthen balance sheet
-Aid in restructuring
-Improve credit rating
-Implement a poison pill or other takeover defense
o Amount of stock currently authorized but not yet issued or reserved for
stock option plans
o Amount of additional stock to be authorized and its dilutive effect
We will support this proposal if a detailed and verifiable plan for the use of
the additional shares is contained in the proxy statement.
CONFIDENTIAL BALLOT
We support the idea that a shareholder's identity and vote should be treated
with confidentiality.
However, we look at this issue on a case-by-case basis.
In order to promote confidentiality in the voting process, we endorse the use of
independent Inspectors of Election.
CUMULATIVE VOTING
In general, we support cumulative voting.
Cumulative voting is a process by which a shareholder may multiply the number of
directors being elected by the number of shares held on record date and cast the
total number for one candidate or allocate the voting among two or more
candidates.
Where cumulative voting is in place, we will vote against any proposal to
rescind this shareholder right.
Cumulative voting may result in a minority block of stock gaining representation
on the board. When a proposal is made to institute cumulative voting, the
proposal will be reviewed on a case-by-case basis. While we feel that each board
member should represent all shareholders, cumulative voting provides minority
shareholders an opportunity to have their views represented.
DIRECTOR LIABILITY AND INDEMNIFICATION
We support efforts to attract the best possible directors by limiting the
liability and increasing the indemnification of directors, except in the case of
insider dealing.
EQUAL ACCESS TO THE PROXY
The SEC's rules provide for shareholder resolutions. However, the resolutions
are limited in scope and there is a 500 word limit on proponents' written
arguments. Management has no such limitations. While we support equal access to
the proxy, we would look at such variables as length of time required to
respond, percentage of ownership, etc.
FAIR PRICE PROVISIONS
Charter provisions requiring a bidder to pay all shareholders a fair price are
intended to prevent two-tier tender offers that may be abusive. Typically, these
provisions do not apply to board-approved transactions.
We support fair price provisions because we feel all shareholders should be
entitled to receive the same benefits.
Reviewed on a case-by-case basis.
GOLDEN PARACHUTES
Golden parachutes are severance payments to top executives who are terminated or
demoted after a takeover.
We support any proposal that would assure management of its own welfare so that
they may continue to make decisions in the best interest of the company and
shareholders even if the decision results in them losing their job. We do not,
however, support excessive golden parachutes. Therefore, each proposal will be
decided on a case-by-case basis.
NOTE: CONGRESS HAS IMPOSED A TAX ON ANY PARACHUTE THAT IS MORE THAN THREE TIMES
THE EXECUTIVE'S AVERAGE ANNUAL COMPENSATION.
ANTI-GREENMAIL PROPOSALS
We do not support greenmail. An offer extended to one shareholder should be
extended to all shareholders equally across the board.
LIMIT SHAREHOLDERS' RIGHTS TO CALL SPECIAL MEETINGS
We support the right of shareholders to call a special meeting.
CONSIDERATION OF NONFINANCIAL EFFECTS OF A MERGER
This proposal releases the directors from only looking at the financial effects
of a merger and allows them the opportunity to consider the merger's effects on
employees, the community, and consumers.
As a fiduciary, we are obligated to vote in the best economic interests of our
clients. In general, this proposal does not allow us to do that. Therefore, we
generally cannot support this proposal.
Reviewed on a case-by-case basis.
MERGERS, BUYOUTS, SPIN-OFFS, RESTRUCTURINGS
Each of the above is considered on a case-by-case basis. According to the
Department of Labor, we are not required to vote for a proposal simply because
the offering price is at a premium to the current market price. We may take into
consideration the long term interests of the shareholders.
MILITARY ISSUES
Shareholder proposals regarding military production must be evaluated on a
purely economic set of criteria for our ERISA clients. As such, decisions will
be made on a case-by-case basis.
In voting on this proposal for our non-ERISA clients, we will vote according to
the client's direction when applicable. Where no direction has been given, we
will vote in the best economic interests of our clients. It is not our duty to
impose our social judgment on others.
NORTHERN IRELAND
Shareholder proposals requesting the signing of the MacBride principles for the
purpose of countering the discrimination of Catholics in hiring practices must
be evaluated on a purely economic set of criteria for our ERISA clients. As
such, decisions will be made on a case-by-case basis.
In voting on this proposal for our non-ERISA clients, we will vote according to
client direction when applicable. Where no direction has been given, we will
vote in the best economic interests of our clients. It is not our duty to impose
our social judgment on others.
OPT OUT OF STATE ANTI-TAKEOVER LAW
This shareholder proposal requests that a company opt out of the coverage of the
state's takeover statutes. Example: Delaware law requires that a buyer must
acquire at least 85% of the company's stock before the buyer can exercise
control unless the board approves.
We consider this on a case-by-case basis. Our decision will be based on the
following:
o State of Incorporation
o Management history of responsiveness to shareholders
o Other mitigating factors
POISON PILL
In general, we do not endorse poison pills.
In certain cases where management has a history of being responsive to the needs
of shareholders and the stock is very liquid, we will reconsider this position.
REINCORPORATION
Generally, we support reincorporation for well-defined business reasons. We
oppose reincorporation if proposed solely for the purpose of reincorporating in
a state with more stringent anti-takeover statutes that may negatively impact
the value of the stock.
STOCK OPTION PLANS
Stock option plans are an excellent way to attract, hold and motivate directors
and employees. However, each stock option plan must be evaluated on its own
merits, taking into consideration the following:
o Dilution of voting power or earnings per share by more than 10%
o Kind of stock to be awarded, to whom, when and how much
o Method of payment
o Amount of stock already authorized but not yet issued under existing
stock option plans
SUPERMAJORITY VOTE REQUIREMENTS
Supermajority vote requirements in a company's charter or bylaws require a level
of voting approval in excess of a simple majority of the outstanding shares. In
general, we oppose supermajority-voting requirements. Supermajority requirements
often exceed the average level of shareholder participation. We support
proposals' approvals by a simple majority of the shares voting.
LIMIT SHAREHOLDERS RIGHT TO ACT BY WRITTEN CONSENT
Written consent allows shareholders to initiate and carry on a shareholder
action without having to wait until the next annual meeting or to call a special
meeting. It permits action to be taken by the written consent of the same
percentage of the shares that would be required to effect proposed action at a
shareholder meeting.
Reviewed on a case-by-case basis.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
PORTFOLIO MANAGERS
Mr. Mario J. Gabelli, CFA, is primarily responsible for the day-to-day
management of The Gabelli Dividend & Income Trust, (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.
Additionally, Barbara G. Marcin serves as Senior Portfolio Manager for the
Trust. Ms. Marcin joined GAMCO Investors, Inc. in 1999 to manage larger
capitalization value style portfolios.
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
Name of Portfolio Total where Advisory where Advisory
Manager or Type of No. of Accounts Total Fee is Based on Fee is Based
Team Member Accounts Managed Assets Performance on Performance
---------------------------- ------------------- ------------------- ------------- ----------------- ----------------
1. Mario J. Gabelli Registered 23 $13.4B 6 $3.1B
Investment
Companies:
---------------------------- ------------------- ------------------- ------------- ----------------- ----------------
Other Pooled 12 $269.6M 11 $188.6M
Investment
Vehicles:
---------------------------- ------------------- ------------------- ------------- ----------------- ----------------
Other Accounts: 1991 $10.6B 6 $1.6B
---------------------------- ------------------- ------------------- ------------- ----------------- ----------------
2. Barbara G. Marcin Registered 3 $70M 0 $0
Investment
Companies:
---------------------------- ------------------- ------------------- ------------- ----------------- ----------------
Other Pooled 1 $6.4M 1 $6.4M
Investment
Vehicles:
---------------------------- ------------------- ------------------- ------------- ----------------- ----------------
Other Accounts: 21 $137.7M 0 $0
---------------------------- ------------------- ------------------- ------------- ----------------- ----------------
POTENTIAL CONFLICTS OF INTEREST
As reflected above, the Portfolio Managers manage accounts in addition to the
Trust. Actual or apparent conflicts of interest may arise when a Portfolio
Manager also has day-to-day management responsibilities with respect to one or
more other accounts. These potential conflicts include:
ALLOCATION OF LIMITED TIME AND ATTENTION. As indicated above, the Portfolio
Managers manage multiple accounts. As a result, he/she will not be able to
devote all of their time to the management of the Trust. The Portfolio Managers,
therefore, may not be able to formulate as complete a strategy or identify
equally attractive investment opportunities for each of those accounts as might
be the case if he/she were to devote all of their attention to the management of
only the Trust.
ALLOCATION OF LIMITED INVESTMENT OPPORTUNITIES. As indicated above, the
Portfolio Managers manage managed accounts with investment strategies and/or
policies that are similar to the Trust. In these cases, if the Portfolio Manager
identifies an investment opportunity that may be suitable for multiple accounts,
a Fund may not be able to take full advantage of that opportunity because the
opportunity may be allocated among all or many of these accounts or other
accounts managed primarily by other Portfolio Managers of the Adviser, and their
affiliates. In addition, in the event a Portfolio Manager determines to purchase
a security for more than one account in an aggregate amount that may influence
the market price of the security, accounts that purchased or sold the security
first may receive a more favorable price than accounts that made subsequent
transactions.
SELECTION OF BROKER/DEALERS. Because of Mr. Gabelli's position with the
Distributor and his indirect majority ownership interest in the Distributor, he
may have an incentive to use the Distributor to execute portfolio transactions
for a Fund.
PURSUIT OF DIFFERING STRATEGIES. At times, the Portfolio Managers may determine
that an investment opportunity may be appropriate for only some of the accounts
for which he/she exercises investment responsibility, or may decide that certain
of the funds or accounts should take differing positions with respect to a
particular security. In these cases, the Portfolio Manager may execute differing
or opposite transactions for one or more accounts which may affect the market
price of the security or the execution of the transaction, or both, to the
detriment of one or more other accounts.
VARIATION IN COMPENSATION. A conflict of interest may arise where the financial
or other benefits available to the Portfolio Manager differs among the accounts
that he/she manages. If the structure of the Adviser's management fee or the
Portfolio Manager's compensation differs among accounts (such as where certain
accounts pay higher management fees or performance-based management fees), the
Portfolio Manager may be motivated to favor certain accounts over others. The
Portfolio Manager also may be motivated to favor accounts in which they have an
investment interest, or in which the Adviser, or their affiliates have
investment interests. Similarly, the desire to maintain assets under management
or to enhance a Portfolio Manager's performance record or to derive other
rewards, financial or otherwise, could influence the Portfolio Manager in
affording preferential treatment to those accounts that could most significantly
benefit the Portfolio Manager. For example, as reflected above, if the Portfolio
Manager manages accounts which have performance fee arrangements, certain
portions of his/her compensation will depend on the achievement of performance
milestones on those accounts. The Portfolio Manager could be incented to afford
preferential treatment to those accounts and thereby be subject to a potential
conflict of interest.
The Adviser, and the Funds have adopted compliance policies and procedures that
are designed to address the various conflicts of interest that may arise for the
Adviser and their staff members. However, there is no guarantee that such
policies and procedures will be able to detect and prevent every situation in
which an actual or potential conflict may arise.
COMPENSATION STRUCTURE FOR MARIO J. GABELLI
Mr. Gabelli receives incentive-based variable compensation based on a percentage
of net revenues received by the Adviser for managing the Trust. Net revenues are
determined by deducting from gross investment management fees the firm's
expenses (other than Mr. Gabelli's compensation) allocable to this Trust. Five
closed-end registered investment companies (including this Trust) managed by Mr.
Gabelli have arrangements whereby the Adviser will only receive its investment
advisory fee attributable to the liquidation value of outstanding preferred
stock (and Mr. Gabelli would only receive his percentage of such advisory fee)
if certain performance levels are met. Additionally, he receives similar
incentive based variable compensation for managing other accounts within the
firm and its affiliates. This method of compensation is based on the premise
that superior long-term performance in managing a portfolio should be rewarded
with higher compensation as a result of growth of assets through appreciation
and net investment activity. The level of compensation is not determined with
specific reference to the performance of any account against any specific
benchmark. One of the other registered investment companies managed by Mr.
Gabelli has a performance (fulcrum) fee arrangement for which his compensation
is adjusted up or down based on the performance of the investment company
relative to an index. Mr. Gabelli manages other accounts with performance fees.
Compensation for managing these accounts has two components. One component is
based on a percentage of net revenues to the investment adviser for managing the
account. The second component is based on absolute performance of the account,
with respect to which a percentage of such performance fee is paid to Mr.
Gabelli. As an executive officer of the Adviser's parent company, GBL, Mr.
Gabelli also receives ten percent of the net operating profits of the parent
company. He receives no base salary, no annual bonus, and no stock options.
COMPENSATION STRUCTURE FOR BARBARA G. MARCIN
The compensation of Ms. Marcin for the Trust is structured to enable the Adviser
to attract and retain highly qualified professionals in a competitive
environment. The Portfolio Manager receives 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 the Trust 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 Portfolio Managers' compensation) allocable to the
Trust (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 Barbara Marcin owned $1,000,000 and $0 of shares,
respectively, of the Trust as of December 31, 2007.
(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
SHARES (OR UNITS) (B) AVERAGE PRICE PAID PER PUBLICLY ANNOUNCED PLANS YET BE PURCHASED UNDER THE
PERIOD PURCHASED SHARE (OR UNIT) OR PROGRAMS PLANS OR PROGRAMS
============= ========================= ========================== ========================== ===============================
Month #1 Common - 20,000 Common - $22.4823 Common - 20,000 Common - 83,929,070 -
07/01/07 20,000 = 83,909,070
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
07/31/07 Preferred Series A - 3,200,000
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A
Preferred Series D - 2,600,000
============= ========================= ========================== ========================== ===============================
Month #2 Common - 20,500 Common - $18.5480 Common - 20,500 Common - 83,909,070 -
08/01/07 20,500 = 83,888,570
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
08/31/07 Preferred Series A - 3,200,000
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A
Preferred Series D - 2,600,000
============= ========================= ========================== ========================== ===============================
Month #3 Common - N/A Common - N/A Common - N/A Common - 83,888,570
09/01/07
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 3,200,000
09/30/07
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - 2,600,000
============= ========================= ========================== ========================== ===============================
Month #4 Common - 35,000 Common - $21.8751 Common - 35,000 Common - 83,888,570 - 35,000
10/01/07 = 83,853,570
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
10/31/07 Preferred Series A - 3,200,000
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A
Preferred Series D - 2,600,000
============= ========================= ========================== ========================== ===============================
Month #5 Common - 24,500 Common - $20.5193 Common - 24,500 Common - 83,853,570 - 24,500
11/01/07 = 83,829,070
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
11/30/07 Preferred Series A - 3,200,000
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A
Preferred Series D - 2,600,000
============= ========================= ========================== ========================== ===============================
Month #6 Common - N/A Common - N/A Common - N/A Common - 83,829,070
12/01/07
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 3,200,000
12/31/07
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - 2,600,000
============= ========================= ========================== ========================== ===============================
Total Common - 100,000 Common - $20.9823 Common - 100,000 N/A
Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A
============= ========================= ========================== ========================== ===============================
Footnote columns (c) and (d) of the table, by disclosing the following
information in the aggregate for all plans or programs publicly announced:
a. The date each plan or program was announced - The notice of the potential
repurchase of common and preferred shares occurs quarterly in the Fund's
quarterly report in accordance with Section 23(c) of the Investment Company
Act of 1940, as amended.
b. The dollar amount (or share or unit amount) approved - Any or all common
shares outstanding may be repurchased when the Fund's common shares are
trading at a discount of 7.5% 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 Trustees, 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 Dividend & Income Trust
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By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 03/07/08
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 03/07/08
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By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady,
Principal Financial Officer and Treasurer
Date 03/07/08
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.