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
The Gabelli Dividend & Income Trust
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
Date of fiscal year end: December 31
Date of reporting period: June 30, 2008
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
(THE GABELLI DIVIDEND & INCOME TRUST LOGO)
THE GABELLI DIVIDEND & INCOME TRUST
Semi-Annual Report
June 30, 2008
TO OUR SHAREHOLDERS,
The Gabelli Dividend & Income Trust's (the "Fund") net asset value ("NAV")
total return fell 9.83% during the first half of 2008, compared with declines of
11.90% and 13.29% for the Standard & Poor's ("S&P") 500 Index and the Dow Jones
Industrial Average, respectively. The Fund's NAV total return outperformed the
benchmark S&P 500 Index for this period, as well as for each of the longer-term
intervals shown in the comparative results table. The total return for the
Fund's publicly traded shares declined 11.78% during the first half of the year.
On June 30, 2008, the Fund's NAV was $20.65, while the price of the publicly
traded shares closed at $17.65 on the New York Stock Exchange.
Enclosed are the financial statements and the investment portfolio as of
June 30, 2008.
COMPARATIVE RESULTS
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2008 (a)
Year Since
to Inception
Quarter Date 1 Year 3 Year (11/28/03)
------- ------ -------- ------ ----------
GABELLI DIVIDEND & INCOME TRUST
NAV TOTAL RETURN (b) ....... 1.64% (9.83)% (11.34)% 7.06% 8.36%
INVESTMENT TOTAL RETURN (c) 0.85 (11.78) (14.18) 5.88 4.36
S&P 500 Index ................. (2.72) (11.90) (13.11) 4.40 6.19
Dow Jones Industrial Average .. (6.84) (13.29) (13.27) 5.81 5.71
Nasdaq Composite Index ........ 0.61 (13.55) (11.92) 3.69 3.48
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE.
WHEN SHARES ARE SOLD, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA
PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST
RECENT MONTH END. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE
NOT ANNUALIZED. 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 S&P 500 AND THE NASDAQ COMPOSITE INDICES 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 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.
We have separated the portfolio managers' commentary from the financial
statements and investment portfolio due to corporate governance regulations
stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that
the content of the portfolio managers' commentary is unrestricted. The financial
statements and investment portfolio are mailed separately from the commentary.
Both the commentary and the financial statements, including the portfolio of
investments, will be available on our website at www.gabelli.com/funds.
THE GABELLI DIVIDEND &INCOME TRUST
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total
investments as of June 30, 2008:
Energy and Utilities: Oil ............................................. 13.9%
Financial Services .................................................... 12.0%
Energy and Utilities: Integrated ...................................... 10.2%
Food and Beverage ..................................................... 9.0%
Telecommunications .................................................... 6.1%
U.S. Government Obligations ........................................... 5.4%
Energy and Utilities: Electric ........................................ 4.7%
Energy and Utilities: Services ........................................ 3.9%
Energy and Utilities: Natural Gas ..................................... 3.8%
Diversified Industrial ................................................ 3.2%
Health Care ........................................................... 3.0%
Consumer Products ..................................................... 2.7%
Retail ................................................................ 2.2%
Cable and Satellite ................................................... 2.1%
Equipment and Supplies ................................................ 1.9%
Computer Software and Services ........................................ 1.5%
Business Services ..................................................... 1.4%
Specialty Chemicals ................................................... 1.4%
Electronics ........................................................... 1.3%
Aerospace ............................................................. 1.3%
Entertainment ......................................................... 1.1%
Metals and Mining ..................................................... 1.1%
Broadcasting .......................................................... 1.0%
Environmental Services ................................................ 0.7%
Automotive: Parts and Accessories ..................................... 0.7%
Energy and Utilities: Water ........................................... 0.7%
Transportation ........................................................ 0.7%
Publishing ............................................................ 0.5%
Communications Equipment .............................................. 0.5%
Paper and Forest Products ............................................. 0.4%
Energy and Utilities .................................................. 0.4%
Wireless Communications ............................................... 0.3%
Machinery ............................................................. 0.3%
Hotels and Gaming ..................................................... 0.3%
Automotive ............................................................ 0.2%
Agriculture ........................................................... 0.1%
Real Estate ........................................................... 0.0%
Building and Construction ............................................. 0.0%
Manufactured Housing and Recreational Vehicles ........................ 0.0%
-----
100.0%
=====
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 MARCH 31, 2008. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT
WWW.GABELLI.COM OR BY CALLING THE FUND AT 800-GABELLI (800-422-3554). THE FUND'S
FORM N-Q IS AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE
REVIEWED AND COPIED AT THE SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, DC.
INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY
CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12
months ended June 30th, no later than August 31st of each year. A description of
the Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.
SHAREHOLDER MEETING - MAY 19, 2008 - FINAL RESULTS
The Gabelli Dividend and Income Trust's Annual Meeting of Shareholders was
held on May 19, 2008 at the Greenwich Library in Greenwich, Connecticut. At that
meeting, common and preferred shareholders, voting together as a single class,
elected Frank J. Fahrenkopf, Jr., Anthonie C. van Ekris, and Salvatore J. Zizza
as Trustees of the Fund. A total of 82,983,876 votes, 83,197,588 votes, and
83,232,462 votes were cast in favor of each Trustee and a total of 3,063,006
votes, 2,849,293 votes, and 2,814,419 votes were withheld for each Trustee,
respectively. In addition, preferred shareholders, voting as a separate class,
elected Anthony J. Colavita as a Trustee of the Fund. A total of 5,342,596 votes
were cast in favor of this Trustee and 114,319 votes were withheld for this
Trustee.
Mario J. Gabelli, James P. Conn, Mario d'Urso, Michael J. Melarkey,
Salvatore M. Salibello, and Edward T. Tokar continue to serve in their
capacities as Trustees of the Fund.
We thank you for your participation and appreciate your continued support.
2
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------------ -------------- --------------
COMMON STOCKS -- 92.2%
AEROSPACE -- 1.3%
30,000 Boeing Co. ......................... $ 2,416,336 $ 1,971,600
50,000 DRS Technologies Inc. .............. 3,930,175 3,936,000
10,000 Goodrich Corp. ..................... 281,823 474,600
55,000 Kaman Corp. ........................ 1,006,361 1,251,800
10,000 Northrop Grumman Corp. ............. 658,360 669,000
130,000 Rockwell Automation Inc. ........... 7,482,367 5,684,900
2,000,000 Rolls-Royce Group plc+ ............. 14,847,048 13,604,219
179,200,000 Rolls-Royce Group plc, Cl. B ....... 355,930 356,937
-------------- --------------
30,978,400 27,949,056
-------------- --------------
AGRICULTURE -- 0.1%
60,000 Archer-Daniels-Midland Co. ......... 2,030,396 2,025,000
-------------- --------------
AUTOMOTIVE -- 0.2%
11,000 Copart Inc.+ ....................... 317,775 471,020
350,000 General Motors Corp. ............... 9,523,381 4,025,000
10,000 Navistar
International Corp.+ ............ 228,717 658,200
-------------- --------------
10,069,873 5,154,220
-------------- --------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.7%
386,000 Genuine Parts Co. .................. 13,063,243 15,316,480
-------------- --------------
BROADCASTING -- 0.5%
350,000 Clear Channel
Communications Inc. ............. 13,305,178 12,320,000
-------------- --------------
BUILDING AND CONSTRUCTION -- 0.0%
15,000 Layne Christensen Co.+ ............. 449,560 656,850
-------------- --------------
BUSINESS SERVICES -- 1.4%
380,000 ChoicePoint Inc.+ .................. 18,322,130 18,316,000
160,000 Diebold Inc. ....................... 6,078,013 5,692,800
86,496 Fidelity National
Information Services Inc. ....... 3,245,902 3,192,567
1,000 HireRight Inc.+ .................... 15,170 17,100
100,000 Intermec Inc.+ ..................... 2,153,301 2,108,000
31,000 PHH Corp.+ ......................... 665,255 475,850
282,600 Trans-Lux Corp.+ (a) ............... 2,025,800 1,017,360
-------------- --------------
32,505,571 30,819,677
-------------- --------------
CABLE AND SATELLITE -- 2.1%
638,000 Cablevision Systems Corp.,
Cl. A+ .......................... 18,640,016 14,418,800
14,200 Cogeco Inc. ........................ 276,997 431,696
230,000 DISH Network Corp.,
Cl. A+ .......................... 5,597,764 6,734,400
46,000 EchoStar Corp., Cl. A+ ............. 1,228,777 1,436,120
81,734 Liberty Global Inc.,
Cl. A+ .......................... 1,686,986 2,568,900
MARKET
SHARES COST VALUE
------------ -------------- --------------
34,318 Liberty Global Inc., Cl. C+ ........ $ 760,276 $ 1,041,894
180,000 Rogers Communications Inc., Cl. B .. 2,310,816 6,958,800
500,000 The DIRECTV Group Inc.+ ............ 12,234,305 12,955,000
35,213 Zon Multimedia Servicos de
Telecomunicacoes e
Multimedia SGPS SA .............. 346,144 292,730
7,042 Zon Multimedia Servicos de
Telecomunicacoes e
Multimedia SGPS SA,
ADR ............................. 126,328 58,582
-------------- --------------
43,208,409 46,896,922
-------------- --------------
COMMUNICATIONS EQUIPMENT -- 0.0%
15,000 Thomas & Betts Corp.+ .............. 471,961 567,750
-------------- --------------
COMPUTER SOFTWARE AND SERVICES -- 1.5%
1,050,000 Electronic Data
Systems Corp. ................... 25,664,554 25,872,000
170,000 Metavante
Technologies Inc.+ .............. 4,099,177 3,845,400
25,000 Microsoft Corp. .................... 712,562 687,750
2,000 NDS Group plc, ADR+ ................ 119,072 118,400
100,000 Yahoo! Inc.+ ....................... 2,796,559 2,066,000
-------------- --------------
33,391,924 32,589,550
-------------- --------------
CONSUMER PRODUCTS -- 2.7%
200,000 Alberto-Culver Co. ................. 6,685,102 5,254,000
25,000 Altria Group Inc. .................. 433,289 514,000
75,000 Avon Products Inc. ................. 2,016,912 2,701,500
100,000 Eastman Kodak Co. .................. 1,730,994 1,443,000
40,000 Fortune Brands Inc. ................ 3,173,363 2,496,400
40,000 Hanesbrands Inc.+ .................. 955,063 1,085,600
78,000 Harman International
Industries Inc. ................. 4,774,569 3,228,420
150,000 Kimberly-Clark Corp. ............... 10,201,219 8,967,000
60,000 Mattel Inc. ........................ 1,009,842 1,027,200
25,000 Philip Morris
International Inc. .............. 1,011,008 1,234,750
175,000 Procter & Gamble Co. ............... 9,719,121 10,641,750
1,020,000 Swedish Match AB ................... 12,706,962 20,916,736
-------------- --------------
54,417,444 59,510,356
-------------- --------------
DIVERSIFIED INDUSTRIAL -- 3.2%
148,000 Bouygues SA ........................ 5,149,282 9,824,102
208,000 Cooper Industries Ltd.,
Cl. A ........................... 6,808,802 8,216,000
500,000 General Electric Co. ............... 16,320,036 13,345,000
275,000 Honeywell International Inc. ....... 9,662,370 13,827,000
See accompanying notes to financial statements.
3
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------------ -------------- --------------
COMMON STOCKS (CONTINUED)
DIVERSIFIED INDUSTRIAL (CONTINUED)
100,000 ITT Corp. .......................... $ 4,506,935 $ 6,333,000
164,000 Owens-Illinois Inc.+ ............... 5,740,858 6,837,160
2,000 Pentair Inc. ....................... 63,318 70,040
2,000 Textron Inc. ....................... 51,500 95,860
1,051,000 Tomkins plc ........................ 5,080,148 3,161,059
205,000 Tyco International Ltd. ............ 10,024,801 8,208,200
129,000 WHX Corp.+ ......................... 1,268,830 192,210
-------------- --------------
64,676,880 70,109,631
-------------- --------------
ELECTRONICS -- 1.3%
1,000,000 Intel Corp. ........................ 20,787,583 21,480,000
190,000 Tyco Electronics Ltd. .............. 7,149,330 6,805,800
-------------- --------------
27,936,913 28,285,800
-------------- --------------
ENERGY AND UTILITIES: ELECTRIC -- 4.7%
30,000 Allegheny Energy Inc. .............. 438,040 1,503,300
85,000 ALLETE Inc. ........................ 2,788,153 3,570,000
250,000 American Electric
Power Co. Inc. .................. 7,904,906 10,057,500
720 Brookfield Infrastructure
Partners LP ..................... 15,120 14,112
410,000 DPL Inc. ........................... 8,260,319 10,815,800
20,000 Edison International ............... 977,494 1,027,600
270,000 Electric Power
Development Co. Ltd. ............ 6,584,683 10,018,364
220,000 FPL Group Inc. ..................... 7,596,481 14,427,600
525,000 Great Plains Energy Inc. ........... 16,005,205 13,272,000
370,000 Integrys Energy Group Inc. ......... 17,973,625 18,807,100
120,000 Pepco Holdings Inc. ................ 2,291,425 3,078,000
240,000 Pinnacle West Capital Corp. ........ 9,369,027 7,384,800
100,000 Southern Co. ....................... 2,893,572 3,492,000
225,000 Unisource Energy Corp. ............. 5,702,134 6,977,250
-------------- --------------
88,800,184 104,445,426
-------------- --------------
ENERGY AND UTILITIES: INTEGRATED -- 10.2%
12,000 Alliant Energy Corp. ............... 305,115 411,120
140,000 Ameren Corp. ....................... 6,365,276 5,912,200
3,267,500 Aquila Inc.+ ....................... 13,375,090 12,318,475
50,000 Avista Corp. ....................... 926,534 1,073,000
15,000 Black Hills Corp. .................. 492,427 480,900
40,000 CH Energy Group Inc. ............... 1,728,883 1,422,800
108,000 Chubu Electric Power Co. Inc. ...... 2,458,019 2,634,270
150,000 CONSOL Energy Inc. ................. 6,316,307 16,855,500
200,000 Consolidated Edison Inc. ........... 8,201,972 7,818,000
50,000 Dominion Resources Inc. ............ 2,212,881 2,374,500
200,000 Duke Energy Corp. .................. 2,816,130 3,476,000
430,000 Edison SpA ......................... 1,002,090 960,686
MARKET
SHARES COST VALUE
------------ -------------- --------------
430,400 El Paso Corp. ...................... $ 5,669,770 $ 9,356,896
80,000 Endesa SA .......................... 3,636,234 3,897,094
300,000 Enel SpA ........................... 2,324,318 2,852,914
47,000 Enel SpA, ADR ...................... 1,839,336 2,239,143
160,000 Energy East Corp. .................. 3,650,404 3,955,200
20,000 Exelon Corp. ....................... 1,598,996 1,799,200
162,000 FirstEnergy Corp. .................. 5,730,248 13,337,460
150,000 Hawaiian Electric Industries Inc. .. 3,585,226 3,709,500
250,000 Hera SpA ........................... 552,073 1,021,428
121,500 Hokkaido Electric Power Co. Inc. ... 2,282,208 2,471,536
121,500 Hokuriku Electric Power Co. ........ 2,131,359 2,889,179
10,000 Iberdrola SA ....................... 156,751 133,986
100,000 Iberdrola SA, ADR .................. 4,987,500 5,363,160
85,000 Korea Electric Power Corp., ADR .... 1,253,867 1,235,050
121,500 Kyushu Electric Power Co. Inc. ..... 2,374,466 2,540,189
22,000 Maine & Maritimes Corp.+ ........... 626,971 932,800
80,000 MGE Energy Inc. .................... 2,605,047 2,609,600
35,102 National Grid plc, ADR ............. 1,588,562 2,315,679
255,000 NiSource Inc. ...................... 5,329,542 4,569,600
600,000 NSTAR .............................. 14,329,143 20,292,000
440,000 OGE Energy Corp. ................... 10,589,559 13,952,400
30,000 Ormat Technologies Inc. ............ 484,088 1,475,400
320,000 Progress Energy Inc. ............... 14,361,775 13,385,600
300,000 Public Service Enterprise
Group Inc. ...................... 9,183,315 13,779,000
121,500 Shikoku Electric Power Co. Inc. .... 2,264,565 3,341,150
15,000 TECO Energy Inc. ................... 255,758 322,350
121,500 The Chugoku Electric
Power Co. Inc. .................. 2,194,052 2,591,680
45,000 The Empire District Electric Co. ... 998,787 834,300
121,500 The Kansai Electric
Power Co. Inc. .................. 2,333,021 2,843,410
108,000 The Tokyo Electric Power Co. Inc. .. 2,545,172 2,776,663
121,500 Tohoku Electric Power Co. Inc. ..... 2,112,763 2,643,170
205,000 Vectren Corp. ...................... 5,572,873 6,398,050
470,000 Westar Energy Inc. ................. 9,309,271 10,109,700
85,000 Wisconsin Energy Corp. ............. 2,690,561 3,843,700
200,000 Xcel Energy Inc. ................... 3,389,999 4,014,000
-------------- --------------
180,738,304 225,569,638
-------------- --------------
See accompanying notes to financial statements.
4
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------------ -------------- --------------
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES: NATURAL GAS -- 3.8%
8,000 AGL Resources Inc. ................. $ 217,299 $ 276,640
50,000 Atmos Energy Corp. ................. 1,251,665 1,378,500
20,000 Delta Natural Gas Co. Inc. ......... 504,315 522,400
6,000 Energen Corp. ...................... 124,550 468,180
2,000 EnergySouth Inc. ................... 99,088 98,120
20,000 Kinder Morgan Energy Partners LP ... 824,553 1,114,600
350,000 National Fuel Gas Co. .............. 9,372,113 20,818,000
210,000 Nicor Inc. ......................... 7,147,795 8,943,900
220,000 ONEOK Inc. ......................... 5,480,182 10,742,600
200,000 Sempra Energy ...................... 5,955,980 11,290,000
35,000 South Jersey Industries Inc. ....... 839,202 1,307,600
90,000 Southern Union Co. ................. 2,154,284 2,431,800
190,000 Southwest Gas Corp. ................ 4,719,351 5,648,700
600,000 Spectra Energy Corp. ............... 13,375,657 17,244,000
60,000 The Laclede Group Inc. ............. 1,690,312 2,422,200
-------------- --------------
53,756,346 84,707,240
-------------- --------------
ENERGY AND UTILITIES: OIL -- 13.9%
20,000 Anadarko Petroleum Corp. ........... 650,810 1,496,800
39,000 Apache Corp. ....................... 1,861,319 5,421,000
45,000 BG Group plc, ADR .................. 1,819,092 5,852,587
160,000 BP plc, ADR ........................ 7,479,063 11,131,200
80,000 Cameron International Corp.+ ....... 1,103,787 4,428,000
85,000 Chesapeake Energy Corp. ............ 1,519,622 5,606,600
243,000 Chevron Corp. ...................... 14,531,853 24,088,590
1,000 Cimarex Energy Co. ................. 28,300 69,670
330,000 ConocoPhillips ..................... 17,735,510 31,148,700
78,000 Devon Energy Corp. ................. 3,448,499 9,372,480
170,000 Eni SpA, ADR ....................... 6,249,080 12,619,100
210,000 Exxon Mobil Corp. .................. 9,845,136 18,507,300
30,000 Hess Corp. ......................... 830,468 3,785,700
475,000 Marathon Oil Corp. ................. 16,752,703 24,638,250
145,000 Murphy Oil Corp. ................... 7,348,500 14,217,250
4,000 Nabors Industries Ltd.+ ............ 97,350 196,920
1,000 Niko Resources Ltd. ................ 57,456 95,852
10,000 Noble Corp. ........................ 254,820 649,600
295,000 Occidental Petroleum Corp. ......... 11,115,782 26,508,700
30,000 Oceaneering International Inc.+ .... 1,368,819 2,311,500
18,000 PetroChina Co. Ltd., ADR ........... 1,359,633 2,319,480
30,000 Petroleo Brasileiro SA, ADR ........ 1,735,716 2,124,900
270,000 Repsol YPF SA, ADR ................. 5,719,267 10,602,900
210,000 Rowan Companies Inc. ............... 7,973,762 9,817,500
200,000 Royal Dutch Shell plc, Cl. A, ADR .. 9,567,840 16,342,000
MARKET
SHARES COST VALUE
------------ -------------- --------------
845,000 StatoilHydro ASA, ADR .............. $ 12,183,860 $ 31,586,100
180,000 Sunoco Inc. ........................ 9,558,099 7,324,200
460,000 Synenco Energy Inc., Cl. A+ ........ 4,110,623 4,055,507
190,000 Total SA, ADR ...................... 8,319,782 16,201,300
45,000 Transocean Inc.+ ................... 3,943,035 6,857,550
-------------- --------------
168,569,586 309,377,236
-------------- --------------
ENERGY AND UTILITIES: SERVICES -- 3.9%
120,000 ABB Ltd., ADR+ ..................... 1,310,760 3,398,400
20,000 Baker Hughes Inc. .................. 759,763 1,746,800
110,000 Diamond Offshore Drilling Inc. ..... 6,139,336 15,305,400
19,500 Exterran Holdings Inc.+ ............ 1,085,163 1,394,055
590,000 Halliburton Co. .................... 16,271,870 31,311,300
120,000 Schlumberger Ltd. .................. 3,977,835 12,891,600
421,000 Weatherford International Ltd.+ .... 9,154,820 20,877,390
-------------- --------------
38,699,547 86,924,945
-------------- --------------
ENERGY AND UTILITIES: WATER -- 0.7%
11,000 American States Water Co. .......... 273,608 384,340
340,000 American Water Works Co. Inc.+ ..... 7,310,000 7,541,200
61,333 Aqua America Inc. .................. 1,025,610 979,488
6,000 Artesian Resources Corp., Cl. A .... 113,635 110,340
3,000 California Water Service Group ..... 94,710 98,310
11,500 Connecticut Water Service Inc. ..... 276,036 257,600
1,000 Consolidated Water Co. Ltd. ........ 26,770 19,800
6,000 Middlesex Water Co. ................ 111,082 99,540
60,000 Pennichuck Corp. ................... 1,362,461 1,389,000
82,000 SJW Corp. .......................... 1,384,964 2,164,800
16,800 Southwest Water Co. ................ 192,169 168,336
5,000 Suez SA ............................ 156,718 341,814
168,000 Suez SA, Strips+ ................... 0 2,645
36,000 United Utilities plc, ADR .......... 774,333 983,700
9,000 York Water Co. ..................... 115,031 131,130
-------------- --------------
13,217,127 14,672,043
-------------- --------------
ENTERTAINMENT -- 1.1%
8,000 Grupo Televisa SA, ADR ............. 79,516 188,960
365,000 Take-Two Interactive
Software Inc.+ .................. 9,465,699 9,333,050
500,000 Time Warner Inc. ................... 8,094,238 7,400,000
200,000 Vivendi ............................ 6,351,618 7,588,878
-------------- --------------
23,991,071 24,510,888
-------------- --------------
See accompanying notes to financial statements.
5
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------ -------------- --------------
COMMON STOCKS (CONTINUED)
ENVIRONMENTAL SERVICES -- 0.7%
1,000 Hyflux Ltd. ........................ $ 1,686 $ 2,198
12,375 Veolia Environnement ............... 395,937 694,211
420,000 Waste Management Inc. .............. 14,809,006 15,838,200
-------------- --------------
15,206,629 16,534,609
-------------- --------------
EQUIPMENT AND SUPPLIES -- 1.9%
102,000 CIRCOR International Inc. .......... 1,858,755 4,996,980
30,000 Lufkin Industries Inc. ............. 513,283 2,498,400
60,000 Mueller Industries Inc. ............ 2,463,788 1,932,000
420,000 RPC Inc. ........................... 1,866,263 7,056,000
256,000 Tenaris SA, ADR .................... 12,024,132 19,072,000
425,000 Xerox Corp. ........................ 6,424,873 5,763,000
-------------- --------------
25,151,094 41,318,380
-------------- --------------
FINANCIAL SERVICES -- 11.7%
70,000 Aflac Inc. ......................... 3,867,534 4,396,000
230,000 AllianceBernstein Holding LP ....... 14,110,132 12,576,400
440,000 American Express Co. ............... 19,643,120 16,574,800
100,000 American International Group Inc. .. 5,503,953 2,646,000
8,000 AON Corp. .......................... 173,453 367,520
80,000 Astoria Financial Corp. ............ 2,005,945 1,606,400
200,000 Bank of America Corp. .............. 9,136,940 4,774,000
4,000 BlackRock Inc. ..................... 315,074 708,000
130,000 Capital One Financial Corp. ........ 6,927,309 4,941,300
260,000 CIT Group Inc. ..................... 4,144,077 1,770,600
400,000 Citigroup Inc. ..................... 17,903,679 6,704,000
10,000 CME Group Inc. ..................... 4,370,188 3,831,900
100,000 Deutsche Bank AG ................... 9,913,140 8,535,000
600,000 Discover Financial Services ........ 11,478,600 7,902,000
390,000 Federal National Mortgage
Association ..................... 12,084,263 7,608,900
78,909 Fidelity National Financial Inc.,
Cl. A ........................... 1,529,570 994,253
70,000 Flushing Financial Corp. ........... 1,253,654 1,326,500
40,000 Freddie Mac ........................ 1,206,051 656,000
60,000 Hilb Rogal & Hobbs Co. ............. 2,659,564 2,607,600
160,000 HSBC Holdings plc, ADR ............. 13,671,864 12,272,000
80,000 Hudson City Bancorp Inc. ........... 1,230,390 1,334,400
75,000 Invesco Ltd. ....................... 1,926,864 1,798,500
420,000 JPMorgan Chase & Co. ............... 15,189,246 14,410,200
100,000 Legg Mason Inc. .................... 6,209,542 4,357,000
25,000 Lehman Brothers Holdings Inc. ...... 1,016,339 495,250
15,000 M&T Bank Corp. ..................... 1,137,745 1,058,100
MARKET
SHARES COST VALUE
------ -------------- --------------
180,000 Marshall & Ilsley Corp. ............ $ 6,151,668 $ 2,759,400
272,000 Merrill Lynch & Co. Inc. ........... 17,251,736 8,625,120
150,000 Moody's Corp. ...................... 5,484,660 5,166,000
185,000 National Australia Bank Ltd., ADR .. 4,372,323 4,704,661
200,000 New York Community Bancorp Inc. .... 3,836,177 3,568,000
270,000 NewAlliance Bancshares Inc. ........ 3,899,679 3,369,600
220,000 PNC Financial Services Group Inc. .. 11,891,734 12,562,000
180,000 Popular Inc. ....................... 3,455,808 1,186,200
100,000 Regions Financial Corp. ............ 3,406,286 1,091,000
90,000 SAFECO Corp. ....................... 6,016,507 6,044,400
285,000 SLM Corp.+ ......................... 9,144,554 5,514,750
500,000 Sovereign Bancorp Inc. ............. 8,593,512 3,680,000
80,050 Sterling Bancorp ................... 1,304,876 956,598
120,000 T. Rowe Price Group Inc. ........... 4,290,139 6,776,400
80,000 The Allstate Corp. ................. 4,076,646 3,647,200
325,000 The Bank of New York Mellon Corp. .. 11,168,893 12,294,750
48,000 The Blackstone Group LP ............ 1,037,780 874,080
290,000 The Travelers Companies Inc. ....... 10,913,064 12,586,000
32,522 Valley National Bancorp ............ 712,688 512,872
500,000 Wachovia Corp. ..................... 19,563,400 7,765,000
400,000 Waddell & Reed Financial Inc., Cl.
A ............................... 8,823,625 14,004,000
15,000 Webster Financial Corp. ............ 469,832 279,000
560,000 Wells Fargo & Co. .................. 16,614,113 13,300,000
130,000 Wilmington Trust Corp. ............. 4,474,468 3,437,200
-------------- --------------
335,562,404 260,956,854
-------------- --------------
FOOD AND BEVERAGE -- 9.0%
177,000 Anheuser-Busch Companies Inc. ...... 8,275,157 10,995,240
175,000 Cadbury plc, ADR ................... 9,520,442 8,806,000
80,000 Campbell Soup Co. .................. 2,470,209 2,676,800
130,000 China Mengniu Dairy Co. Ltd. ....... 422,055 368,463
220,000 ConAgra Foods Inc. ................. 5,404,997 4,241,600
960,000 Davide Campari-Milano SpA .......... 9,710,824 8,025,947
168,000 Dr. Pepper Snapple Group Inc.+ ..... 4,835,755 3,524,640
290,000 General Mills Inc. ................. 14,133,198 17,623,300
270,000 Groupe Danone ...................... 14,818,114 18,959,599
100,000 H.J. Heinz Co. ..................... 3,521,143 4,785,000
200,000 ITO EN Ltd. ........................ 4,905,490 3,149,221
50,000 ITO EN Ltd., Preference ............ 1,116,348 532,090
See accompanying notes to financial statements.
6
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------ -------------- --------------
COMMON STOCKS (CONTINUED)
FOOD AND BEVERAGE (CONTINUED)
1,000 Kellogg Co. ........................ $ 35,550 $ 48,020
210,000 Kikkoman Corp. ..................... 2,822,445 2,565,052
400,000 Kraft Foods Inc., Cl. A ............ 12,241,858 11,380,000
160,000 Morinaga Milk Industry Co. Ltd. .... 659,734 415,878
270,000 Nissin Food Products Co. Ltd. ...... 9,337,512 9,052,126
500,000 Parmalat SpA ....................... 1,885,518 1,306,799
339,450 Parmalat SpA, GDR (b)(c) ........... 981,615 887,798
320,000 PepsiAmericas Inc. ................. 6,616,558 6,329,600
47,000 Pernod-Ricard SA ................... 5,249,770 4,828,463
6,000 Remy Cointreau SA .................. 422,183 328,085
1,200,000 Sara Lee Corp. ..................... 20,004,342 14,700,000
300,000 The Coca-Cola Co. .................. 13,301,591 15,594,000
350,000 The Hershey Co. .................... 15,928,303 11,473,000
310,000 Wm. Wrigley Jr. Co. ................ 22,155,130 24,111,800
3,000 Wm. Wrigley Jr. Co., Cl. B ......... 167,630 233,400
465,000 YAKULT HONSHA Co. Ltd. ............. 12,519,547 13,093,657
-------------- --------------
203,463,018 200,035,578
-------------- --------------
HEALTH CARE -- 3.0%
25,000 Advanced Medical Optics Inc.+ ...... 714,288 468,500
20,000 Applera Corp. ...................... 672,701 669,600
13,000 Apria Healthcare Group Inc.+ ....... 258,694 252,070
200,000 Boston Scientific Corp.+ ........... 2,793,925 2,458,000
115,000 Bristol-Myers Squibb Co. ........... 2,789,992 2,360,950
55,000 Covidien Ltd. ...................... 2,410,003 2,633,950
150,000 Eli Lilly & Co. .................... 8,318,465 6,924,000
100,000 IMS Health Inc. .................... 2,416,170 2,330,000
50,000 Johnson & Johnson . ............... 3,244,276 3,217,000
200,000 Merck & Co. Inc. ................... 7,533,281 7,538,000
135,000 Owens & Minor Inc. ................. 4,079,428 6,168,150
1,050,000 Pfizer Inc. ........................ 27,940,141 18,343,500
34,300 Schiff Nutrition International
Inc. ............................ 202,617 192,080
30,000 St. Jude Medical Inc.+ ............. 1,263,218 1,226,400
12,000 Third Wave Technologies Inc.+ ...... 133,775 133,920
130,000 Wyeth .............................. 6,096,113 6,234,800
75,000 Zimmer Holdings Inc.+ .............. 5,045,940 5,103,750
-------------- --------------
75,913,027 66,254,670
-------------- --------------
HOTELS AND GAMING -- 0.3%
50,000 Boyd Gaming Corp. .................. 1,648,138 628,000
690,000 Ladbrokes plc ...................... 9,056,911 3,528,682
MARKET
SHARES COST VALUE
------ -------------- --------------
22,000 Las Vegas Sands Corp.+ ............. $ 1,802,336 $ 1,043,680
70,000 Pinnacle Entertainment Inc.+ ....... 1,795,795 734,300
-------------- --------------
14,303,180 5,934,662
-------------- --------------
MACHINERY -- 0.3%
185,000 CNH Global NV ...................... 5,080,367 6,284,450
-------------- --------------
MANUFACTURED HOUSING AND
RECREATIONAL VEHICLES -- 0.0%
10,000 Skyline Corp. ...................... 309,265 235,000
-------------- --------------
METALS AND MINING -- 1.1%
170,000 Alcoa Inc. ......................... 6,232,034 6,055,400
10,000 Alliance Holdings GP LP ............ 230,523 298,100
17,000 Arch Coal Inc. ..................... 265,374 1,275,510
8,000 BHP Billiton Ltd., ADR ............. 217,549 681,520
1,000 Fording Canadian Coal Trust ........ 38,886 95,610
98,000 Freeport-McMoRan Copper & Gold
Inc. ............................ 3,409,931 11,484,620
10,000 Massey Energy Co. .................. 235,475 937,500
20,000 Peabody Energy Corp. ............... 274,124 1,761,000
2,000 Rio Tinto plc, ADR ................. 563,767 990,000
3,000 Westmoreland Coal Co.+ ............. 52,605 63,330
-------------- --------------
11,520,268 23,642,590
-------------- --------------
PAPER AND FOREST PRODUCTS -- 0.4%
400,000 International Paper Co. ............ 12,450,227 9,320,000
-------------- --------------
PUBLISHING -- 0.5%
35,000 Idearc Inc. ........................ 138,481 82,250
1,873,750 Il Sole 24 Ore ..................... 15,671,047 10,937,633
-------------- --------------
15,809,528 11,019,883
-------------- --------------
REAL ESTATE -- 0.0%
18,000 Brookfield Asset
Management Inc., Cl. A .......... 186,196 585,720
-------------- --------------
RETAIL -- 2.0%
210,000 CVS Caremark Corp. ................. 7,892,649 8,309,700
142,000 Ingles Markets Inc., Cl. A ......... 1,615,209 3,312,860
410,000 Safeway Inc. ....................... 8,674,488 11,705,500
22,000 Saks Inc.+ ......................... 360,087 241,560
310,000 Sally Beauty Holdings Inc.+ ........ 3,837,420 2,002,600
85,000 SUPERVALU Inc. ..................... 2,526,712 2,625,650
95,000 The Great Atlantic & Pacific Tea Co.
Inc.+ ........................... 2,840,954 2,167,900
360,000 Walgreen Co. ....................... 14,183,090 11,703,600
74,000 Whole Foods Market Inc. ............ 2,902,875 1,753,060
-------------- --------------
44,833,484 43,822,430
-------------- --------------
See accompanying notes to financial statements.
7
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------ -------------- --------------
COMMON STOCKS (CONTINUED)
SPECIALTY CHEMICALS -- 1.4%
5,000 Arkema, ADR+ ....................... $ 269,656 $ 282,811
125,000 Ashland Inc. ....................... 7,939,090 6,025,000
170,000 E.I. du Pont de Nemours & Co. ...... 7,402,747 7,291,300
260,000 Ferro Corp. ........................ 4,980,743 4,877,600
100,000 Olin Corp. ......................... 1,826,861 2,618,000
260,000 The Dow Chemical Co. ............... 10,489,368 9,076,600
15,000 Tronox Inc., Cl. B ................. 155,144 45,300
-------------- --------------
33,063,609 30,216,611
-------------- --------------
TELECOMMUNICATIONS -- 5.7%
570,000 AT&T Inc. .......................... 15,544,153 19,203,300
400,000 BCE Inc. ........................... 9,661,171 13,924,000
47,125 Bell Aliant Regional Communications
Income Fund+ (b)(d) ............. 1,278,068 1,370,395
71,000 BT Group plc, ADR .................. 2,221,635 2,820,830
37,000 CenturyTel Inc. .................... 1,298,775 1,316,830
50,000 Compania de Telecomunicaciones de
Chile SA, ADR ................... 607,686 288,000
625,000 Deutsche Telekom AG, ADR ........... 11,730,650 10,231,250
25,000 Embarq Corp. ....................... 1,080,206 1,181,750
24,959 FairPoint Communications Inc. ...... 230,292 179,954
55,000 France Telecom SA, ADR ............. 1,338,443 1,629,650
210,000 Hellenic Telecommunications
Organization SA, ADR ............ 1,644,219 2,499,000
215,000 Portugal Telecom SGPS SA ........... 2,574,406 2,440,643
200,000 Qwest Communications International
Inc. ............................ 1,181,992 786,000
900,000 Sprint Nextel Corp. ................ 17,041,482 8,550,000
20,000 Telecom Corp. of New Zealand Ltd.,
ADR ............................. 312,271 270,200
190,000 Telecom Italia SpA, ADR ............ 5,432,036 3,792,400
16,000 Telefonica SA, ADR ................. 683,716 1,273,280
196,000 Telefonos de Mexico SAB de CV, Cl.
L, ADR .......................... 1,903,750 4,641,280
196,000 Telmex Internacional SAB de CV,
ADR+ ............................ 1,322,945 3,155,600
130,000 Telstra Corp. Ltd., ADR ............ 2,392,135 2,644,785
76,100 TELUS Corp., Non-Voting, ADR ....... 1,574,712 3,069,113
1,000,000 Verizon Communications Inc. ........ 36,248,381 35,400,000
MARKET
SHARES COST VALUE
------ -------------- --------------
190,000 Vodafone Group plc, ADR ............ $ 5,193,922 $ 5,597,400
-------------- --------------
122,497,046 126,265,660
-------------- --------------
TRANSPORTATION -- 0.6%
3,000 Frontline Ltd. ..................... 105,687 209,340
250,000 GATX Corp. ......................... 7,479,104 11,082,500
24,000 Golden Ocean Group Ltd. ............ 14,400 143,485
3,000 Ship Finance .......................
International Ltd. ................. 66,356 88,590
22,000 Teekay Corp. ....................... 794,715 993,960
-------------- --------------
8,460,262 12,517,875
-------------- --------------
WIRELESS COMMUNICATIONS -- 0.3%
5,000 Crown Castle International Corp.+ .. 80,650 193,650
111,030 United States Cellular Corp.+ ...... 5,129,256 6,278,746
14,000 Vimpel-Communications, ADR ......... 85,375 415,520
-------------- --------------
5,295,281 6,887,916
-------------- --------------
TOTAL COMMON STOCKS ................ 1,823,382,802 2,044,241,596
-------------- --------------
CONVERTIBLE PREFERRED STOCKS -- 1.2%
AGRICULTURE -- 0.0%
3,000 Archer-Daniels-Midland Co.,
6.250% Cv. Pfd. ................. 133,615 131,520
-------------- --------------
BROADCASTING -- 0.0%
20,460 Emmis Communications Corp.,
6.250% Cv. Pfd., Ser. A ......... 960,081 511,500
-------------- --------------
BUILDING AND CONSTRUCTION -- 0.0%
200 Fleetwood Capital Trust,
6.000% Cv. Pfd. ................. 6,210 3,600
-------------- --------------
DIVERSIFIED INDUSTRIAL -- 0.0%
38,000 Smurfit-Stone Container Corp.,
7.000% Cv. Pfd., Ser. A ......... 952,374 665,000
-------------- --------------
ENERGY AND UTILITIES -- 0.4%
5,000 Chesapeake Energy Corp.,
5.000% Cv. Pfd. (b) ............. 512,500 901,875
20,000 CMS Energy Corp.,
4.500% Cv. Pfd., Ser. B ......... 1,069,063 1,564,800
129,000 El Paso Energy Capital Trust I,
4.750% Cv. Pfd. ................. 4,649,004 5,289,000
-------------- --------------
6,230,567 7,755,675
-------------- --------------
See accompanying notes to financial statements.
8
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
MARKET
SHARES COST VALUE
------------ -------------- --------------
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
ENTERTAINMENT -- 0.0%
30,000 Six Flags Inc.,
7.250% Cv. Pfd. ................. $ 687,488 $ 280,500
-------------- --------------
FINANCIAL SERVICES -- 0.3%
1,500 Doral Financial Corp.,
4.750% Cv. Pfd. ................. 207,335 183,842
112,000 Newell Financial Trust I,
5.250% Cv. Pfd. ................. 5,269,687 5,068,000
-------------- --------------
5,477,022 5,251,842
-------------- --------------
HEALTH CARE -- 0.0%
8,000 Omnicare Inc.,
4.000% Cv. Pfd., Ser. B ......... 437,647 310,880
-------------- --------------
TELECOMMUNICATIONS -- 0.4%
50,000 Cincinnati Bell Inc.,
6.750% Cv. Pfd., Ser. B ......... 2,118,418 2,010,000
120,000 Crown Castle International Corp.,
6.250% Cv. Pfd. ................. 5,522,500 6,915,000
-------------- --------------
7,640,918 8,925,000
-------------- --------------
TRANSPORTATION -- 0.1%
1,500 GATX Corp.,
$2.50 Cv. Pfd. .................. 199,475 340,500
982 Kansas City Southern,
4.250% Cv. Pfd. ................. 551,884 1,501,923
-------------- --------------
751,359 1,842,423
-------------- --------------
TOTAL CONVERTIBLE PREFERRED
STOCKS .......................... 23,277,281 25,677,940
-------------- --------------
PRINCIPAL
AMOUNT
------------
CONVERTIBLE CORPORATE BONDS -- 1.2%
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.0%
$ 500,000 Standard Motor Products Inc.,
Sub. Deb. Cv.,
6.750%, 07/15/09 ................ 493,794 478,750
-------------- --------------
BROADCASTING -- 0.5%
13,000,000 Sinclair Broadcast Group Inc.,
Sub. Deb. Cv.,
6.000%, 09/15/12 ................ 11,250,488 11,716,250
-------------- --------------
COMMUNICATIONS EQUIPMENT -- 0.5%
10,000,000 Agere Systems Inc.,
Sub. Deb. Cv.,
6.500%, 12/15/09 ................ 10,028,349 10,200,000
-------------- --------------
PRINCIPAL MARKET
AMOUNT COST VALUE
------------ -------------- --------------
REAL ESTATE -- 0.0%
$ 1,100,000 Palm Harbor Homes Inc., Cv.,
3.250%, 05/15/24 ................ $ 1,060,764 $ 654,500
-------------- --------------
RETAIL -- 0.2%
5,100,000 The Great Atlantic &
Pacific Tea Co. Inc., Cv.,
5.125%, 06/15/11 ................ 5,096,263 4,787,625
-------------- --------------
TOTAL CONVERTIBLE CORPORATE BONDS .. 27,929,658 27,837,125
-------------- --------------
SHARES
------------
WARRANTS -- 0.0%
FOOD AND BEVERAGE -- 0.0%
650 Parmalat SpA, GDR,
expire 12/31/15+ (b)(c)(d) ...... 0 1,075
-------------- --------------
PRINCIPAL
AMOUNT
------------
U.S. GOVERNMENT OBLIGATIONS -- 5.4%
U.S. TREASURY BILLS -- 4.9%
$107,564,000 U.S. Treasury Bills,
1.200% to 2.038%++,
07/03/08 to 11/28/08 ............ 107,316,751 107,301,680
-------------- --------------
U.S. TREASURY NOTES -- 0.5%
11,360,000 U.S. Treasury Note,
5.000%, 07/31/08 ................ 11,386,777 11,386,777
-------------- --------------
TOTAL U.S. GOVERNMENT OBLIGATIONS .. 118,703,528 118,688,457
-------------- --------------
TOTAL INVESTMENTS -- 100.0% ....................... $1,993,293,269 2,216,446,193
==============
OTHER ASSETS AND LIABILITIES (NET) ................ 14,079,883
PREFERRED SHARES
(5,814,200 preferred shares outstanding) ....... (500,000,000)
--------------
NET ASSETS -- COMMON SHARES
(83,792,037 common shares outstanding) ......... $1,730,526,076
==============
NET ASSET VALUE PER COMMON SHARE
($1,730,526,076 / 83,792,037 shares
outstanding) ................................... $ 20.65
==============
----------
(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 June 30,
2008, the market value of Rule 144A securities amounted to $3,161,143 or
0.14% of total investments. Except as noted in (c), these securities are
liquid.
See accompanying notes to financial statements.
9
THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 2008 (UNAUDITED)
(c) At June 30, 2008, the Fund held investments in restricted and illiquid
securities amounting to $888,873 or 0.04% of total investments, which were
valued under methods approved by the Board of Trustees as follows:
06/30/08
ACQUISITION ACQUISITION ACQUISITION CARRYING VALUE
SHARES ISSUER DATE COST PER UNIT
------------ ------ ----------- ----------- --------------
339,450 Parmalat SpA, GDR .................. 12/02/03 $ 981,615 $ 2.6154
650 Parmalat SpA, GDR
warrants expire 12/31/15 ........ 11/09/05 -- 1.6538
(d) Security fair valued under procedures established by the Board of Trustees.
The procedures may include reviewing available financial information about
the company and reviewing the valuation of comparable securities and other
factors on a regular basis. At June 30, 2008, the market value of fair
valued securities amounted to $1,371,470 or 0.06% of total investments.
+ Non-income producing security.
++ Represents annualized yield at date of purchase.
ADR American Depositary Receipt
GDR Global Depositary Receipt
% OF
MARKET MARKET
GEOGRAPHIC DIVERSIFICATION VALUE VALUE
-------------------------- ------ --------------
North America ..................................... 78.5% $1,739,450,659
Europe. ........................................... 14.4 320,208,005
Latin America ..................................... 3.6 80,378,041
Japan ............................................. 2.9 63,557,635
Asia/Pacific ...................................... 0.6 12,851,853
----- --------------
Total Investments ................................. 100.0% $2,216,446,193
===== ===============
See accompanying notes to financial statements.
10
THE GABELLI DIVIDEND & INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2008 (UNAUDITED)
ASSETS:
Investments, at value (cost $1,991,267,469) ..................... $2,215,428,833
Investments in affiliates, at value (cost $2,025,800) ........... 1,017,360
Foreign currency, at value (cost $152,515) ...................... 152,459
Deposit at broker ............................................... 3,679
Cash ............................................................ 934
Receivable for investments sold ................................. 14,296,856
Dividends and interest receivable ............................... 4,113,086
Deferred offering expense ....................................... 73,650
Prepaid expense ................................................. 30,966
--------------
TOTAL ASSETS .................................................... 2,235,117,823
--------------
LIABILITIES:
Unrealized depreciation on swap contracts ....................... 1,250,946
Payable for investments purchased ............................... 843,803
Distributions payable ........................................... 316,209
Payable for investment advisory fees ............................ 1,483,743
Payable for payroll expenses .................................... 149,976
Payable for accounting fees ..................................... 3,751
Payable for auction agent fees .................................. 317,640
Other accrued expenses .......................................... 225,679
--------------
TOTAL LIABILITIES ............................................... 4,591,747
--------------
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 .................. $1,730,526,076
==============
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS CONSIST OF:
Paid-in capital, at $0.001 par value............................. $1,510,573,268
Accumulated distributions in excess of net realized gain on
investments, swap contracts, and foreign currency
transactions ................................................. (1,935,749)
Net unrealized appreciation on investments ...................... 223,152,924
Net unrealized depreciation on swap contracts ................... (1,250,946)
Net unrealized depreciation on foreign currency translations .... (13,421)
--------------
NET ASSETS ...................................................... $1,730,526,076
==============
NET ASSET VALUE PER COMMON SHARE
($1,730,526,076 / 83,792,037 shares outstanding;
unlimited number of shares authorized) .......................... $ 20.65
==============
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 2008 (UNAUDITED)
INVESTMENT INCOME:
Dividends (net of foreign taxes of $1,306,190) .................. $ 33,211,077
Interest ........................................................ 2,556,924
--------------
TOTAL INVESTMENT INCOME ......................................... 35,768,001
--------------
EXPENSES:
Investment advisory fees ........................................ 11,454,499
Auction agent fees .............................................. 450,376
Shareholder communications expenses ............................. 297,454
Custodian fees .................................................. 145,116
Payroll expenses ................................................ 140,873
Trustees' fees .................................................. 86,244
Legal and audit fees ............................................ 57,085
Shareholder services fees ....................................... 22,798
Accounting fees ................................................. 22,500
Interest expense ................................................ 2,332
Miscellaneous expenses .......................................... 123,641
--------------
TOTAL EXPENSES .................................................. 12,802,918
LESS:
Advisory fee reduction ....................................... (2,486,339)
Custodian fee credits ........................................ (5,810)
--------------
NET EXPENSES .................................................... 10,310,769
--------------
NET INVESTMENT INCOME ........................................... 25,457,232
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
SWAP CONTRACTS, AND FOREIGN CURRENCY:
Net realized gain on investments - unaffiliated ................. 8,597,581
Net realized loss on investments - affiliated ................... (41,666)
Net realized loss on swap contracts ............................. (1,479,905)
Net realized gain on foreign currency transactions .............. 18,774
--------------
Net realized gain on investments, written options,
swap contracts, and foreign currency transactions ............ 7,094,784
--------------
Net change in unrealized appreciation/depreciation:
on investments ............................................... (213,239,077)
on swap contracts ............................................ (3,349)
on foreign currency translations ............................. (17,836)
--------------
Net change in unrealized appreciation/depreciation on
investments, swap contracts, and foreign
currency translations ........................................ (213,260,262)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
SWAP CONTRACTS, AND FOREIGN CURRENCY ......................... (206,165,478)
--------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ (180,708,246)
--------------
Total Distributions to Preferred Shareholders ................... (11,924,398)
--------------
NET DECREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS .................................... $ (192,632,644)
==============
See accompanying notes to financial statements.
11
THE GABELLI DIVIDEND & INCOME TRUST
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
SIX MONTHS ENDED
JUNE 30, 2008 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2007
---------------- -----------------
OPERATIONS:
Net investment income ................................................................ $ 25,457,232 $ 44,287,243
Net realized gain on investments, swap contracts, and foreign currency transactions .. 7,094,784 111,203,897
Net change in unrealized appreciation/depreciation on investments, swap contracts,
and foreign currency translations ................................................. (213,260,262) 4,134,547
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ...................... (180,708,246) 159,625,687
-------------- --------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS:
Net investment income ................................................................ (9,457,401)* (8,447,993)
Net realized short-term gain on investments, swap contracts, and foreign currency
transactions ...................................................................... -- (3,890,830)
Net realized long-term gains on investments, swap contracts, and foreign currency
transactions ...................................................................... (2,466,997)* (15,176,885)
-------------- --------------
TOTAL DISTRIBUTIONS TO PREFERRED SHAREHOLDERS ........................................ (11,924,398) (27,515,708)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS ......................................................... (192,632,644) 132,109,979
-------------- --------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ................................................................ (17,740,941)* (42,713,304)
Net realized short-term gain on investments, swap contracts, and foreign currency
transactions ...................................................................... -- (19,699,634)
Net realized long-term gain on investments, swap contracts, and foreign currency
transactions ...................................................................... (4,627,787)* (76,860,455)
Return of capital .................................................................... (29,588,435)* --
-------------- --------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS ........................................... (51,957,163) (139,273,393)
-------------- --------------
FUND SHARE TRANSACTIONS:
Net decrease from repurchase of common shares ........................................ (714,945) (3,091,222)
Recapture of gain on sale of Fund shares by an affiliate ............................. -- 4,338
-------------- --------------
NET DECREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS .............................. (714,945) (3,086,884)
-------------- --------------
NET DECREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS ....................... (245,304,752) (10,250,298)
NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Beginning of period .................................................................. 1,975,830,828 1,986,081,126
-------------- --------------
End of period (including undistributed net investment income of
$1,963,521 and $1,741,110, respectively) .......................................... $1,730,526,076 $1,975,830,828
============== ==============
----------
* Based on fiscal year to date book income. Amounts are subject to change and
recharacterization at fiscal year end.
See accompanying notes to financial statements.
12
THE GABELLI DIVIDEND & INCOME TRUST
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2008 ----------------------------------- PERIOD ENDED
(UNAUDITED) 2007 2006 2005 2004 DECEMBER 31, 2003 (g)
---------------- ------ ------ ------ ------ ---------------------
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING THROUGHOUT EACH PERIOD:
OPERATING PERFORMANCE:
Net asset value, beginning of period ........... $ 23.57 $23.65 $20.62 $20.12 $19.26 $19.06(h)
------- ------ ------ ------ ------ ------
Net investment income .......................... 0.31 0.53 0.87 0.55 0.40 --
Net realized and unrealized gain (loss) on
investments, written options, swap contracts,
securities sold short, and foreign currency
transactions ................................ (2.46) 1.37 4.00 1.33 1.80 0.20
------- ------ ------ ------ ------ ------
Total from investment operations ............... (2.15) 1.90 4.87 1.88 2.20 0.20
------- ------ ------ ------ ------ ------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS: (a)
Net investment income .......................... (0.12)*** (0.10) (0.12) (0.06) (0.01) --
Net realized gain on investments ............... (0.03)*** (0.23) (0.19) (0.10) (0.01) --
------- ------ ------ ------ ------ ------
Total distributions to preferred shareholders .. (0.15) (0.33) (0.31) (0.16) (0.02) --
------- ------ ------ ------ ------ ------
NET INCREASE (DECREASE) IN NET ASSETS
ATTRIBUTABLE TO COMMON SHAREHOLDERS RESULTING
FROM OPERATIONS ............................. (2.30) 1.57 4.56 1.72 2.18 --
------- ------ ------ ------ ------ ------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income .......................... (0.21)*** (0.51) (0.61) (0.48) (0.39) --
Net realized gain on investments ............... (0.06)*** (1.15) (0.93) (0.72) (0.24) --
Return of capital .............................. (0.35)*** -- -- -- (0.57) --
------- ------ ------ ------ ------ ------
Total distributions to common shareholders ..... (0.62) (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 ............................... 0.00(d) 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)(d) (0.04) (0.06) --
------- ------ ------ ------ ------ ------
Total from fund share transactions ............. 0.00 0.01 0.01 (0.02) (0.12) --
------- ------ ------ ------ ------ ------
NET ASSET VALUE ATTRIBUTABLE TO COMMON
SHAREHOLDERS, END OF PERIOD ................. $ 20.65 $23.57 $23.65 $20.62 $20.12 $19.26
======= ====== ====== ====== ====== ======
NAV total return + ............................. (9.44)% 7.75% 24.09% 9.47% 11.56% 1.0%*
======= ====== ====== ====== ====== ======
Market value, end of period .................... $ 17.65 $20.68 $21.47 $17.62 $17.95 $20.00
======= ====== ====== ====== ====== ======
Investment total return ++ ..................... (11.78)% 4.14% 31.82% 4.85% (4.15)% 0.0%**
======= ====== ====== ====== ====== ======
See accompanying notes to financial statements.
13
THE GABELLI DIVIDEND & INCOME TRUST
FINANCIAL HIGHLIGHTS (CONTINUED)
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, PERIOD ENDED
JUNE 30, 2008 ------------------------------------------------------- DECEMBER 31,
(UNAUDITED) 2007 2006 2005 2004 2003 (g)
---------------- ---------- ---------- ---------- ---------- --------------
SELECTED DATA FOR A SHARE OF
BENEFICIAL INTEREST OUTSTANDING
THROUGHOUT EACH PERIOD:
RATIOS AND SUPPLEMENTAL DATA:
Net assets including liquidation
value of preferred shares, end
of period (in 000's)........... $2,230,526 $2,475,831 $2,486,081 $2,238,155 $2,006,703 --
Net assets attributable to common
shares, end of period
(in 000's)..................... $1,730,526 $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.. 2.83%(e) 2.17% 3.91% 2.75% 2.17% (0.04)%(e)
Ratio of operating expenses to
average net assets attributable
to common shares net of
advisory fee reduction,
if any......................... 1.15%(e)(f) 1.38%(f) 1.41%(f) 1.33%(f) 1.12% 1.38%(e)
Ratio of operating expenses to
average net assets including
liquidation value of preferred
shares net of advisory fee
reduction, if any.............. 0.90%(e)(f) 1.11%(f) 1.11%(f) 1.12%(f) 1.07% --
Portfolio turnover rate +++....... 17.9% 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 $ 80,000 --
Total shares outstanding
(in 000's)..................... 3,200 3,200 3,200 3,200 3,200 --
Liquidation preference per share.. $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 --
Average market value (b).......... $ 23.56 $ 23.52 $ 23.86 $ 24.82 $ 24.68 --
Asset coverage per share.......... $ 111.53 $ 123.79 $ 124.30 $ 111.91 $ 167.23 --
SERIES B AUCTION MARKET CUMULATIVE
PREFERRED SHARES
Liquidation value, end of period
(in 000's)..................... $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 --
Total shares outstanding
(in 000's)..................... 4 4 4 4 4 --
Liquidation preference per share.. $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 --
Average market value (b).......... $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 --
Asset coverage per share.......... $ 111,526 $ 123,792 $ 124,304 $ 111,908 $ 167,225 --
SERIES C AUCTION MARKET CUMULATIVE
PREFERRED SHARES
Liquidation value, end of period
(in 000's)..................... $ 120,000 $ 120,000 $ 120,000 $ 120,000 $ 120,000 --
Total shares outstanding
(in 000's)..................... 5 5 5 5 5 --
Liquidation preference per share.. $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 --
Average market value (b).......... $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 --
Asset coverage per share.......... $ 111,526 $ 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 $ 65,000 -- --
Total shares outstanding
(in 000's)..................... 2,600 2,600 2,600 2,600 -- --
Liquidation preference per share.. $ 25.00 $ 25.00 $ 25.00 $ 25.00 -- --
Average market value (b).......... $ 25.09 $ 24.41 $ 24.37 $ 24.72 -- --
Asset coverage per share.......... $ 111.53 $ 123.79 $ 124.30 $ 111.91 -- --
SERIES E AUCTION RATE CUMULATIVE
PREFERRED SHARES
Liquidation value, end of period
(in 000's)..................... $ 135,000 $ 135,000 $ 135,000 $ 135,000 -- --
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.......... $ 111,526 $ 123,792 $ 124,304 $ 111,908 -- --
ASSET COVERAGE (C)................ 446% 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 a period of less than one year is 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 a period of less than one year is not annualized.
+++ Effective in 2008, a change in accounting policy was adopted with regard to
the calculation of the portfolio turnover rate. Had this policy been
adopted retroactively, the portfolio turnover rate for the fiscal years
ended December 31, 2007, 2006, 2005, and 2004 would have been 58.0%, 30.8%,
39.5%, and 48.7%, respectively. The portfolio turnover rate for the period
ended December 31, 2003 would have been as shown.
* 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.
*** Based on fiscal year to date book income. Amounts are subject to change and
recharacterization at fiscal year end.
(a) Calculated based upon average common shares outstanding on the record dates
throughout the period.
(b) Based on weekly prices.
(c) Asset coverage is calculated by combining all series of preferred shares.
(d) Amount represents less than $0.005 per share.
(e) Annualized.
(f) 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%. For the six months ended June 30,
2008 and fiscal years ended December 31, 2006 and 2005, the effect of the
custodian fee credits was minimal.
(g) The Gabelli Dividend & Income Trust commenced investment operations on
November 28, 2003.
(h) The beginning NAV includes a $0.04 reduction for costs associated with the
initial public offering.
See accompanying notes to financial statements.
14
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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.
On January 1, 2008, the Fund adopted Statement of Financial Accounting
Standard No. 157, "Fair Value Measurements" ("SFAS 157") that clarifies the
definition of fair value for financial reporting, establishes a framework for
measuring fair value, and requires additional disclosures about the use of fair
value measurements. The three levels of the fair value hierarchy under SFAS 157
are described below:
15
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
- Level 1 - quoted prices in active markets for identical securities;
- Level 2 - other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit
risk, etc.); and
- Level 3 - significant unobservable inputs (including the Fund's
determinations as to the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities. The
summary of inputs used to value the Fund's net assets as of June 30, 2008 is as
follows:
OTHER FINANCIAL
INVESTMENTS IN INSTRUMENTS
SECURITIES (UNREALIZED
VALUATION INPUTS (MARKET VALUE) DEPRECIATION)*
---------------- -------------- ---------------
Level 1 - Quoted Prices ..................... $2,068,833,486 --
Level 2 - Other Significant Observable
Inputs ................................... 147,612,707 $(1,250,946)
-------------- -----------
Total ....................................... $2,216,446,193 $(1,250,946)
============== ===========
----------
* Other financial instruments are derivative instruments not reflected in the
Schedule of Investments, such as futures, forwards, and swaps which are
valued at the unrealized appreciation/depreciation on the investment.
In March 2008, The Financial Accounting Standards Board (The "FASB") issued
Statement of Financial Accounting Standard No. 161, "Disclosures about
Derivative Instruments and Hedging Activities" ("SFAS 161") that is effective
for fiscal years beginning after November 15, 2008. SFAS 161 is intended to
improve financial reporting for derivative instruments by requiring enhanced
disclosure that enables investors to understand how and why an entity uses
derivatives, how derivatives are accounted for, and how derivative instruments
affect an entity's results of operations and financial position. Management is
currently evaluating the implications of SFAS 161 on the Fund's financial
statement disclosures.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
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 June 30,
2008, there were no open repurchase agreements.
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.
16
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 the 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 June 30, 2008,
the Fund had no investments in options.
SWAP AGREEMENTS. The Fund may enter into equity, contract for difference,
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 a 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. If there is a default by the
counterparty to a swap contract, the Fund will be limited to contractual
remedies pursuant to the agreements related to the transaction. There is no
assurance that the swap contract counterparties will be able to meet their
obligations pursuant to a swap contract or that, in the event of default, the
Fund will succeed in pursuing contractual remedies. The Fund thus assumes the
risk that it may be delayed in or prevented from obtaining payments owed to it
pursuant to a swap contract. The creditworthiness of the swap contract
counterparties is closely monitored in order to minimize this risk. Depending on
the general state of short-term interest rates and the returns on the Fund's
portfolio securities at that point in time, such a default could negatively
affect the Fund's ability to make dividend payments. In addition, at the time a
swap or a 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.
17
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
The use of derivative instruments involves, to varying degrees, elements of
market and counterparty risk in excess of the amount recognized below.
Unrealized gains related to swaps are reported as an asset and unrealized
losses are reported as a liability in the Statement of Assets and Liabilities.
The change in value of swaps, including the accrual of periodic amounts of
interest to be paid or received on swaps, is reported as unrealized gains or
losses in the Statement of Operations. A realized gain or loss is recorded upon
payment or receipt of a periodic payment or termination of swap agreements.
The Fund has entered into an interest rate swap agreement with Citibank
N.A. Under the agreement the Fund receives a variable rate of interest and pays
a respective fixed rate of interest on the nominal value of the swap. Details of
the swap at June 30, 2008 are as follows:
NET
NOTIONAL FLOATING RATE* TERMINATION UNREALIZED
AMOUNT FIXED RATE (RATE RESET MONTHLY) DATE DEPRECIATION
------------ ---------- -------------------- ----------- ------------
$100,000,000 4.01% 2.45938% 06/02/10 $(1,205,009)
----------
* Based on Libor (London Interbank Offered Rate).
The Fund has entered into a contract for difference swap agreement with
Bear, Stearns International Limited. Details of the swap at June 30, 2008 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:
$2,623,129 (204,800 shares) Cadbury plc Cadbury plc 02/16/09 $(45,937)
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 June 30, 2008, 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 June 30, 2008, there were no open
securities sold short.
18
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 June 30, 2008, there were no open forward foreign
exchange contracts.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are
maintained in U.S. dollars. Foreign currencies, investments, and other assets
and liabilities are translated into U.S. dollars at the current exchange rates.
Purchases and sales of investment securities, income, and expenses are
translated at the exchange rate prevailing on the respective dates of such
transactions. Unrealized gains and losses that result from changes in foreign
exchange rates and/or changes in market prices of securities have been included
in unrealized appreciation/depreciation on investments and foreign currency
translations. Net realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Fund and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments, or currency repatriation, a portion of which may be recoverable.
The Fund will accrue such taxes and recoveries as applicable, based upon its
current interpretation of tax rules and regulations that exist in the markets in
which it invests.
RESTRICTED AND ILLIQUID SECURITIES. The Fund 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.
19
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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. These
reclassifications have no impact on the NAV of the Fund.
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 year ended
December 31, 2007 was as follows:
COMMON PREFERRED
------------ -----------
DISTRIBUTIONS PAID FROM:
Ordinary income
(inclusive of short-term capital gains) .. $ 62,419,734 $12,332,027
Net long-term capital gains ................. 76,853,659 15,183,681
------------ -----------
Total distributions paid .................... $139,273,393 $27,515,708
============ ===========
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.
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.
20
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
The following summarizes the tax cost of investments, written options, swap
contracts, and the related unrealized appreciation/(depreciation) at June 30,
2008:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
COST APPRECIATION DEPRECIATION (DEPRECIATION)
-------------- ------------ ------------- --------------
Investments ..... $2,003,880,478 $428,746,073 $(216,180,358) $212,565,715
Swap contracts .. -- -- (1,250,946) (1,250,946)
-------------- ------------ ------------- ------------
$2,003,880,478 $428,746,073 $(217,431,304) $211,314,769
============== ============ ============= ============
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.
For the six months ended June 30, 2008, the Fund did not have any liability
for any unrecognized tax benefits. The Fund recognizes interest and penalties,
if any, related to unrecognized tax benefits as income tax expenses in the
Statement of Operations. The Fund is not subject to examination by U.S. federal
tax authorities for tax years before 2004 and by state tax authorities for tax
years before 2003.
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 six months ended June 30,
2008, the Fund's total return on the NAV of the common shares did not exceed the
stated dividend rate or corresponding swap rate on any of the outstanding
Preferred Shares. Thus, management fees with respect to the liquidation value of
the preferred share assets were reduced by $2,486,339.
During the six months ended June 30, 2008, the Fund paid brokerage
commissions on security trades of $385,467 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 six
months ended June 30, 2008, the Fund paid or accrued $22,500 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 six months ended June 30, 2008, the Fund paid or
accrued $140,873, which is included in payroll expenses in the Statement of
Operations.
21
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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, the Nominating Committee Chairman receives an annual
fee of $2,000, and the Lead Trustee receives an annual fee of $1,000. Trustees
who are directors or employees of the Adviser or an affiliated company receive
no compensation or expense reimbursement from the Fund.
4. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for
the six months ended June 30, 2008, other than short-term securities and U.S
Government obligations, aggregated $381,976,941 and $395,367,642, respectively.
Purchases and sales of U.S. Government obligations for the six months ended
June 30, 2008, other than short-term obligations, aggregated $11,516,200 and $0,
respectively.
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 six months ended June
30, 2008, the Fund repurchased 37,033 shares of beneficial interest in the open
market at a cost of $714,945 and an average discount of approximately 13.10%
from its NAV. All shares of beneficial interest repurchased have been retired.
Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED
JUNE 30, 2008 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2007
------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
------- --------- -------- -----------
Net decrease from repurchase of
common shares ............................ (37,033) $(714,945) (144,100) $(3,091,222)
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.
At the Fund's August 15, 2007 Board meeting, the Board approved the filing
of a shelf registration with the SEC which will give the Fund the ability to
offer additional preferred shares. The shelf registration was declared effective
by the SEC on June 17, 2008.
22
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 six months ended June 30, 2008, the
Fund did not repurchase any shares of 5.875% Series A Cumulative Preferred
Shares. At June 30, 2008, 3,200,000 shares of 5.875% Series A Cumulative
Preferred Shares were outstanding and accrued dividends amounted to $65,278.
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
basis points greater than 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 3.880% to 5.250% during the six months
ended June 30, 2008. The dividend rates of Series C Auction Market Cumulative
Preferred Shares ranged from 2.296% to 4.498% during the six months ended June
30, 2008. 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 six
months ended June 30, 2008, the Fund did not redeem any shares of Series B and C
Auction Market Cumulative Preferred Shares. At June 30, 2008, 4,000 and 4,800
shares of the Series B and C Auction Market Cumulative Preferred Shares were
outstanding with an annualized dividend rate of 3.941% and 3.953% per share and
accrued dividends amounted to $65,683 and $52,706, 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 six months ended June 30, 2008, the Fund
did not repurchase any shares of 6.00% Series D Cumulative Preferred Shares. At
June 30, 2008, 2,600,000 shares of 6.00% Series D Cumulative Preferred Shares
were outstanding and accrued dividends amounted to $54,167.
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,
23
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
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 basis points greater than
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 3.454% to 5.960% during the six months ended June 30, 2008. 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 six months ended June 30, 2008, the Fund did not redeem any
shares of Series E Auction Rate Preferred Shares. At June 30, 2008, 5,400 shares
of Series E Auction Rate Cumulative Preferred Shares were outstanding with an
annualized dividend rate of 4.180% and accrued dividends amounted to $78,375.
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 Shares, voting as a single class, will
be required to approve any plan of reorganization adversely affecting the
Preferred Shares, 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 Shares 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 six months ended
June 30, 2008 is set forth below:
NET PERCENT
CHANGE IN OWNED OF
BEGINNING SHARES ENDING UNREALIZED VALUE AT SHARES
SHARES SOLD SHARES DEPRECIATION JUNE 30, 2008 OUTSTANDING
--------- ------- ------- ------------ ------------- -----------
Trans-Lux Corp. .... 293,900 (11,300) 282,600 $(739,635) $1,017,360 13.99%
7. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of
indemnifications. The Fund's maximum exposure under these arrangements is
unknown. However, the Fund has not had prior claims or losses pursuant to these
contracts and expects the risk of loss to be remote.
8. OTHER MATTERS. On April 24, 2008, the Adviser entered into an administrative
settlement with the SEC to resolve the SEC's inquiry regarding prior frequent
trading activity in shares of the GAMCO Global Growth Fund (the "Global Growth
Fund") by one investor who was banned from the Global Growth Fund in August
2002. In the settlement, the SEC found that the Adviser had violated Section
206(2) of the Investment Advisers Act, Section 17(d) of the 1940 Act and Rule
17d-1 thereunder, and had aided and abetted and caused violations of Section
12(d)(1)(B)(i) of the 1940 Act. Under the terms of the settlement, the Adviser,
while neither admitting nor denying the SEC's findings and allegations, agreed,
among other things, to pay the previously reserved total of $16 million
(including a $5 million penalty), of which at least $11 million will be
distributed to shareholders of the Global Growth Fund in accordance with a plan
to be developed by an independent distribution consultant and approved by the
independent directors of the Global Growth Fund and the staff of the SEC, and to
cease and desist from future violations of the above referenced federal
securities laws. The settlement will
24
THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
not have a material adverse impact on the Adviser or its ability to fulfill its
obligations under the Advisory Agreement. On the same day, the SEC filed a civil
action against the Executive Vice President and Chief Operating Officer of the
Adviser, alleging violations of certain federal securities laws arising from the
same matter. The officer is also an officer of the Global Growth Fund and other
funds in the Gabelli/GAMCO fund complex. The officer denies the allegations and
is continuing in his positions with the Adviser and the funds. The Adviser
currently expects that any resolution of the action against the officer will not
have a material adverse impact on the Adviser or its ability to fulfill its
obligations under the Advisory Agreement.
On a separate matter, in August 2008, the Adviser made an offer to the
staff of the SEC to settle a previously disclosed matter concerning compliance
with Section 19(a) and Rule 19a-1 of the 1940 Act by two closed-end funds
managed by the Adviser. These provisions require registered investment companies
to provide written statements to shareholders when a distribution is made in the
nature of a dividend from a source other than net investment income. While the
two funds sent annual statements and provided other materials containing this
information, the funds did not send the notices required by Rule 19a-1 to
shareholders with each distribution in 2002 and 2003. The Adviser believes that
the funds have been in compliance with Rule 19a-1 since that time. The Adviser
believes that the settlement would have no effect on the funds or any material
adverse effect on the Adviser or its ability to manage the funds. This offer of
settlement is subject to final agreement regarding the specific language of the
SEC's administrative order and other settlement documents and approval by the
SEC.
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.
26
TRUSTEES AND OFFICERS
THE GABELLI DIVIDEND & INCOME TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422
TRUSTEES
Mario J. Gabelli, CFA
CHAIRMAN & CHIEF EXECUTIVE OFFICER,
GAMCO INVESTORS, INC.
Anthony J. Colavita
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C.
James P. Conn
FORMER MANAGING DIRECTOR &
CHIEF INVESTMENT OFFICER,
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.
Mario d'Urso
FORMER ITALIAN SENATOR
Frank J. Fahrenkopf, Jr.
PRESIDENT & CHIEF EXECUTIVE OFFICER,
AMERICAN GAMING ASSOCIATION
Michael J. Melarkey
ATTORNEY-AT-LAW,
AVANSINO, MELARKEY, KNOBEL & MULLIGAN
Salvatore M. Salibello
CERTIFIED PUBLIC ACCOUNTANT,
SALIBELLO & BRODER, LLP
Edward T. Tokar
SENIOR MANAGING DIRECTOR,
BEACON TRUST COMPANY
Anthonie C. van Ekris
CHAIRMAN, BALMAC INTERNATIONAL, INC.
Salvatore J. Zizza
CHAIRMAN, ZIZZA & CO., LTD.
OFFICERS
Bruce N. Alpert
PRESIDENT
Carter W. Austin
VICE PRESIDENT
Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
Agnes Mullady
TREASURER AND SECRETARY
INVESTMENT ADVISER
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
CUSTODIAN
State Street Bank and Trust Company
COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
TRANSFER AGENT AND REGISTRAR
Computershare Trust Company, N.A.
STOCK EXCHANGE LISTING
5.875% 6.00%
Common Preferred Preferred
---------- --------- ---------
NYSE-Symbol: GDV GDV PrA GDV PrD
Shares Outstanding: 83,792,037 3,200,000 2,600,000
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 preferred shares in the open market when
the preferred shares are trading at a discount to the liquidation value.
THE GABELLI DIVIDEND & INCOME TRUST
ONE CORPORATE CENTER
RYE, NY 10580-1422
(914) 921-5070
WWW.GABELLI.COM
SEMI ANNUAL REPORT
JUNE 30, 2008
GDV Q2/2008
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) Schedule of Investments in securities of unaffiliated issuers as of the
close of the reporting period is included as part of the report to
shareholders filed under Item 1 of this form.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
There has been no change, as of the date of this filing, in any of the portfolio
managers identified in response to paragraph (a)(1) of this Item in the
registrant's most recently filed annual report on Form N-CSR.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
=============================================================================================================================
(C) TOTAL NUMBER OF (D) MAXIMUM NUMBER (OR
SHARES (OR UNITS) APPROXIMATE DOLLAR VALUE) OF
(A) TOTAL NUMBER OF PURCHASED AS PART OF SHARES (OR UNITS) THAT MAY YET
SHARES (OR UNITS) (B) AVERAGE PRICE PAID PUBLICLY ANNOUNCED PLANS BE PURCHASED UNDER THE PLANS
PERIOD PURCHASED PER SHARE (OR UNIT) OR PROGRAMS OR PROGRAMS
=============================================================================================================================
=============================================================================================================================
Month #1 Common - 7,033 Common - $19.7795 Common - 7,033 Common - 83,829,070 - 7,033 =
01/01/08 83,822,037
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
01/31/08 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 - 20,000 Common - $19.1000 Common - 20,000 Common - 83,822,037 - 20,000 =
02/01/08 83,802,037
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
02/28/08 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 - 83,802,037
03/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 3,200,000
03/31/08
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - 2,600,000
=============================================================================================================================
Month #4 Common - N/A Common - N/A Common - N/A Common - 83,802,037
04/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 3,200,000
04/30/08
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - 2,600,000
=============================================================================================================================
Month #5 Common - 10,000 Common - $19.3221 Common - 10,000 Common - 83,802,037 - 10,000 =
05/01/08 83,792,037
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
05/31/08 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 - 83,792,037
06/01/08
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 3,200,000
06/30/08
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - 2,600,000
=============================================================================================================================
Total Common - 37,033 Common - $19.3090 Common - 37,033 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) Not applicable.
(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
------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date 9/3/08
----------------------------------------------------------------------------
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 9/3/08
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady,
Principal Financial Officer and Treasurer
Date 9/3/08
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.