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

811-21437

 

Cohen & Steers REIT and Utility Income Fund, Inc.

(Exact name of registrant as specified in charter)

 

280 Park Avenue, New York, NY

 

10017

(Address of principal executive offices)

 

(Zip code)

 

Adam M. Derechin

Cohen & Steers Capital Management, Inc.

280 Park Avenue

New York, New York 10017

(Name and address of agent for service)

 

Registrant’s telephone number, including area code:

(212) 832-3232

 

 

Date of fiscal year end:

December 31

 

 

Date of reporting period:

June 30, 2009

 

 



 

Item 1. Reports to Stockholders.

 



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

To Our Shareholders:

We would like to share with you our report for the six months ended June 30, 2009. The net asset value at that date was $8.62 per common share. The Fund's common stock is traded on the New York Stock Exchange (NYSE) and its share price can differ from its net asset value; at period end, the Fund's closing price on the NYSE was $7.13. The total returns, including income, for the Fund and the comparative benchmarks were:

    Six Months Ended
June 30, 2009
 
Cohen & Steers REIT and Utility Income Fund at Market Value a     18.92 %  
Cohen & Steers REIT and Utility Income Fund at Net Asset Value a     –0.17 %  
FTSE NAREIT Equity REIT Index b     –12.21 %  
S&P 1500 Utilities Index b     –1.74 %  
S&P 500 Index b     3.16 %  
Blended benchmark—40% FTSE NAREIT Equity REIT Index,
40% S&P 1500 Utilities Index,
20% Merrill Lynch Fixed Rate Preferred Index b
    –3.92 %  

 

The performance data quoted represent past performance. Past performance is no guarantee of future results. The investment return and the principal value of an investment will fluctuate and shares, if sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Performance results reflect the effects of leverage, resulting from the issuance of preferred shares and borrowings under a credit agreement.

Investment Review

U.S. real estate securities declined in the six-month period, although they were subject to strong swings in sentiment and performance. REITs entered 2009 with positive momentum from December's rally but quickly sold off as concerns about the economy and banking system took a disproportionate toll on the asset class. Real estate securities declined nearly twice as much as the broad stock market in the first two months of the period.

a   As a closed-end investment company, the price of the Fund's New York Stock Exchange-traded shares will be set by market forces and at times may deviate from the net asset value per share of the Fund.

b   The FTSE NAREIT Equity REIT Index is an unmanaged, market-capitalization-weighted index of all publicly traded REITs that invest predominantly in the equity ownership of real estate. The index is designed to reflect the performance of all publicly traded equity REITs as a whole. The S&P 1500 Utilities Index is an unmanaged market-capitalization-weighted index of 71 companies whose primary business involves the generation, transmission and/or distribution of electricity and/or natural gas. The S&P 500 Index is an unmanaged index of common stocks that is frequently used as a general measure of stock market performance. The Merrill Lynch Fixed Rate Preferred Index is an unmanaged index of preferred securities.


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COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

Conditions for REITs improved in March, when there was greater clarity regarding the path the U.S. government was taking to address the financial crisis. Meanwhile, banks began to stabilize; Citigroup jump-started a broad market rally on March 9 when it announced that it expected to be profitable for the first two months of 2009.

Recapitalization comes to the United States

In late March, mall owner Simon Property Group and warehouse operator AMB Property recapitalized, raising $1.2 billion and $500 million, respectively, in the capital markets to strengthen their balance sheets and meet debt maturities. The capital raisings, which followed the earlier success of Australian and U.K. property companies, reassured investors that REITs would survive the current economic downturn and, in a growing number of instances, thrive. In total, U.S. REITs raised $16.8 billion between March and June. Cohen & Steers was instrumental in several capital raisings, and was a cornerstone investor in many of them.

The second quarter saw a continued rally in the broad equity markets but with a distinct acceleration and outperformance by real estate securities (REITs rose 28.9% in the quarter, compared with a total return of 15.9% for the S&P 500 Index). As the stream of recapitalizations continued, some of the activity was undertaken with an eye toward distressed acquisition opportunities. Simon, notably, raised an additional $1.7 billion for that purpose. Earlier capital raisings focused on strengthening balance sheets and meeting debt maturities.

Utilities had a modest decline

Utility stocks were less volatile than REITs and other equities in the period, but they trailed the broad market with a return of –1.7%, as measured by the S&P 1500 Utilities Index. Utilities' defensive characteristics, such as relatively stable cash flows, provided some downside protection in January and February, when they modestly outperformed. However, utilities underperformed when the market rallied and investors focused on beaten-down sectors of the market, such as financial stocks. Certain commodity-sensitive utilities, such as power producers that sell into unregulated markets, had strong returns due to a sharp rise in energy prices.

The preferred market had positive returns

Preferred securities had a total return of +2.7% in the period as measured by the Merrill Lynch Fixed Rate Preferred Index. After struggling early on, preferreds and credit markets broadly rallied in response to signs of stabilization and profitability in the banking industry. REIT preferreds returned +14.8%, boosted by recapitalizations.

Fund performance

The Fund had a slight decline for the six months on a net asset value basis, although it outperformed its blended benchmark. The Fund's utilities holdings outpaced the S&P 1500 Utilities Index, led by our allocation to gas pipeline companies. Among REIT holdings, factors that helped performance included our stock selection in


2



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

diversified companies and overweight in the regional mall sector. The Fund's allocation to REIT and corporate preferreds also enhanced performance; our holdings outpaced the broad preferred market by a wide margin.

Factors that detracted from total return included stock selection in telecommunications companies and regional mall REITs, along with our underweight in hotel REITs. The Fund did not fully participate in the share price appreciation by several companies that recapitalized; and we were underweight hotel REITs because their short-term leases are particularly vulnerable to economic downturns and cut-backs in travel. Our stock selection in apartment and office REITs also detracted from total return.

The Fund's market price had a positive return in the period, rising 18.9%. This reflected a general trend of a narrowing in closed-end funds' discounts to their underlying net asset values. Discounts for most funds reached historically wide levels in 2008, but narrowed considerably in the first half of 2009.

Investment Outlook

We are closely monitoring the flow of economic data, and it is our view that the economy will surprise to the upside later this year, possibly in the fourth quarter, and follow through into 2010.

REIT capital raisings will likely resume again later this year, after June's pause, as companies continue to take advantage of a receptive market. We had expected to see increased instances of distressed selling at this point in the deleveraging cycle, but greater access to capital has given private property owners and their lenders time to explore alternatives. We continue to believe that phase will come, and that companies with the balance sheet capacity will be in a position to play offense when these buying opportunities present themselves. As such, these companies and those fundamentally positioned for a better-than-expected recovery remain our primary focus among REITs.

We maintain a positive long-term outlook for utility stocks, despite the fundamental and regulatory headwinds resulting from the current economic conditions. Utility stocks' valuations remain attractive, in our view, with price-to-earnings multiples below their longtime average despite an earnings growth outlook that exceeds the historical rate.

Supply and demand for power, in our view, will continue to tighten over time, resulting in strong electricity prices and rising physical asset values. Gas pipeline companies should continue to benefit from the need to transport energy from new supply regions. Similarly, electricity transmission developers face growing investment opportunities resulting from the need to upgrade antiquated transmission grids, as well as the need to connect new, renewable sources of electricity (i.e. wind) to consumers. As always, our focus remains on well-capitalized companies that are likely to be part of, and profit from, the eventual economic recovery.

We maintain a meaningful allocation to preferred securities, which can provide attractive levels of income while offering the potential benefits of diversification—as evidenced by the group's performance in the period.


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COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

Sincerely,

   
MARTIN COHEN   ROBERT H. STEERS  
Co-chairman   Co-chairman  
   
ROBERT S. BECKER   WILLIAM F. SCAPELL  
Portfolio Manager   Portfolio Manager  
   
JOSEPH M. HARVEY   THOMAS N. BOHJALIAN  
Portfolio Manager   Portfolio Manager  

 

The views and opinions in the preceding commentary are subject to change. This material represents an assessment of the market environment at a specific point in time, should not be relied upon as investment advice and is not intended to predict or depict performance of any investment.

Visit Cohen & Steers online at cohenandsteers.com

For more information about any of our funds, visit cohenandsteers.com, where you will find daily net asset values, fund fact sheets and portfolio highlights. You can also access newsletters, education tools and market updates covering the global real estate, listed infrastructure, utilities, large cap value and preferred securities sectors.

In addition, our Web site contains comprehensive information about our firm, including our most recent press releases, profiles of our senior investment professionals and an overview of our investment approach.


4



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

Our Leverage Strategy
(Unaudited)

Our leverage strategy utilizes a combination of auction market preferred shares (AMPS) and borrowings up to the maximum permitted by the 1940 Act to provide additional capital for the Fund, with an objective of increasing the net income available for shareholders. As of June 30, 2009, leverage represented 42% of the Fund's managed assets, with AMPS and borrowings each representing 26% and 16%, respectively.

It has been our philosophy to utilize interest rate swap transactions to seek to reduce the interest rate risk inherent in our utilization of leverage. Considering that AMPS have variable dividend rates and borrowings have variable interest rate payments, we seek to lock in those rates on a significant portion of this additional capital through interest rate swap agreements (where we effectively convert our variable rate obligation to a fixed rate obligation for the term of the swap agreements). Specifically, as of June 30, 2009, we have fixed the rate on 65% of our borrowings at an average interest rate of 3.6% for an average remaining period of 3.7 years (when we first entered into the swaps, the average term was 5.7 years). Locking in a significant portion of our leveraging costs is designed to protect the dividend-paying ability of the Fund. The use of leverage increases the volatility of the Fund's net asset value in both up and down markets. However, we believe that locking in a portion of the Fund's leveraging costs for the term of the swap agreements partially protects the Fund's expenses from an increase in short-term interest rates.

Leverage Facts a

Leverage (as a % of managed assets)     42 %  
% Fixed Rate      65 %  
% Variable Rate      35 %  
Weighted Average Rate on Swaps     3.6 %  
Weighted Average Term on Swaps     3.7 years    
Current Rate on AMPS b     1.6 %  
Current Rate on Debt c     1.4 %  

 

The Fund intends to enhance its dividend yield through leverage. The use of leverage is a speculative technique and there are special risks and costs associated with leverage. The net asset value of the Fund's common shares may be reduced by the issuance and ongoing costs of leverage. So long as the Fund is able to invest in securities that produce a realized investment yield that is greater than the total cost of leverage, the leverage strategy will produce higher current net investment income for the common shareholders. On the other hand, to the extent that the total cost of leverage exceeds the incremental income gained from employing such leverage, the common shareholders would realize lower net investment income. In addition to the impact on net income, the use of leverage will have an effect of magnifying capital appreciation or depreciation for common shareholders. Specifically, in an up market, leverage will typically generate greater capital appreciation than if the Fund was not employing leverage. Conversely, in down markets, the use of leverage will generally result in greater capital depreciation than if the Fund had been unlevered. To the extent that the Fund is required or elects to reduce its leverage, the Fund may need to liquidate investments at times of adverse economic conditions which may result in capital losses potentially reducing returns to common shareholders. There can be no assurance that a leveraging strategy will be successful during any period in which it is employed.

a   Data as of June 30, 2009. Information subject to change.

b   See Note 5 in Notes to Financial Statements.

c   See Note 6 in Notes to Financial Statements.


5



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

JUNE 30, 2009

Top Ten Holdings a
(Unaudited)

Security   Value   % of
Managed
Assets
 
Simon Property Group   $ 32,651,261       3.7 %  
Boston Properties     23,294,247       2.7    
Vornado Realty Trust     21,209,490       2.4    
Duke Energy Corp.     19,915,117       2.3    
FPL Group     18,317,904       2.1    
Southern Co.     18,303,259       2.1    
Exelon Corp.     17,953,099       2.0    
Entergy Corp.     17,939,678       2.0    
Public Service Enterprise Group     17,372,212       2.0    
PG&E Corp.     15,858,614       1.8    

 

a   Top ten holdings are determined on the basis of the value of individual securities held. The Fund may also hold positions in other types of securities issued by the companies listed above. See the Schedule of Investments for additional details on such other positions.

Sector Breakdown

(Based on Managed Assets)
(Unaudited)


6




COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS

June 30, 2009 (Unaudited)

        Number
of Shares
  Value  
COMMON STOCK     122.0 %              
ENERGY—OIL & GAS STORAGE & TRANSPORTATION     7.9 %              
DCP Midstream Partners LP a             46,738     $ 1,011,877    
Enbridge Energy Partners LP a             75,981       2,931,347    
Energy Transfer Equity LP a             32,000       811,840    
Energy Transfer Partners LP a             64,610       2,616,059    
Enterprise GP Holdings LP a             30,000       753,900    
Enterprise Products Partners LP a             204,200       5,092,748    
Kinder Morgan Energy Partners LP a             86,192       4,406,135    
Magellan Midstream Partners LP a             106,900       3,715,844    
MarkWest Energy Partners LP a             101,400       1,845,480    
Spectra Energy Corp.             471,326       7,974,836    
TransCanada Corp. (Canada)             91,000       2,450,346    
Williams Cos. (The)             195,000       3,043,950    
Williams Partners LP             196,600       3,550,596    
              40,204,958    
INDUSTRIALS—HIGHWAYS & RAILTRACKS     0.8 %              
Anhui Expressway Co (Hong Kong) b             2,050,000       1,159,170    
Cia de Concessoes Rodoviarias (Brazil)             129,016       2,069,392    
Shenzhen Expressway Co. (Hong Kong) b             2,232,000       1,070,735    
              4,299,297    
REAL ESTATE     62.9 %              
DIVERSIFIED     5.0 %              
Brookfield Properties Corp.             285,100       2,272,247    
Lexington Realty Trust             532,600       1,810,840    
Vornado Realty Trust c             471,008       21,209,490    
              25,292,577    
HEALTH CARE     9.0 %              
Brookdale Senior Living             256,400       2,497,336    
Cogdell Spencer a             612,800       2,628,912    
HCP             743,685       15,758,685    
Health Care REIT a             139,318       4,750,744    
LTC Properties a             95,687       1,956,799    

 

See accompanying notes to financial statements.
7



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

        Number
of Shares
  Value  
Nationwide Health Properties a             153,806     $ 3,958,966    
Omega Healthcare Investors a             363,759       5,645,540    
Ventas             272,587       8,139,448    
              45,336,430    
HOTEL     2.8 %              
Host Hotels & Resorts             1,691,759       14,193,858    
INDUSTRIAL     3.9 %              
AMB Property Corp.             362,610       6,820,694    
EastGroup Properties a             49,717       1,641,655    
ProLogis             1,416,793       11,419,352    
              19,881,701    
MORTGAGE     0.9 %              
Chimera Investment Corp. a             576,700       2,012,683    
MFA Financial a             334,000       2,311,280    
              4,323,963    
OFFICE     13.3 %              
BioMed Realty Trust             450,860       4,612,298    
Boston Properties c             488,349       23,294,247    
Brandywine Realty Trust             440,965       3,285,189    
Highwoods Properties             199,410       4,460,802    
Kilroy Realty Corp.             269,216       5,529,697    
Liberty Property Trust             405,889       9,351,682    
Mack-Cali Realty Corp.             610,564       13,920,859    
SL Green Realty Corp.             140,156       3,215,179    
              67,669,953    
RESIDENTIAL     8.7 %              
APARTMENT     8.1 %              
American Campus Communities a             198,181       4,395,655    
Apartment Investment & Management Co.             679,719       6,015,513    
AvalonBay Communities a             106,074       5,933,780    
Camden Property Trust             110,000       3,036,000    
Education Realty Trust             451,150       1,935,433    

 

See accompanying notes to financial statements.
8



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

        Number
of Shares
  Value  
Equity Residential             445,700     $ 9,907,911    
Home Properties a             132,270       4,510,407    
UDR             509,690       5,265,098    
              40,999,797    
MANUFACTURED HOME     0.6 %              
Equity Lifestyle Properties             88,600       3,294,148    
TOTAL RESIDENTIAL                     44,293,945    
SELF STORAGE     4.5 %              
Extra Space Storage a             276,000       2,304,600    
Public Storage a             224,289       14,686,444    
Sovran Self Storage             148,457       3,652,042    
U-Store-It Trust             477,100       2,337,790    
              22,980,876    
SHOPPING CENTER     14.8 %              
COMMUNITY CENTER     6.3 %              
Federal Realty Investment Trust a             103,980       5,357,050    
Inland Real Estate Corp. a             312,792       2,189,544    
Kimco Realty Corp.             646,782       6,500,159    
Regency Centers Corp.             192,373       6,715,741    
Urstadt Biddle Properties—Class A             297,586       4,190,011    
Weingarten Realty Investors             492,469       7,145,725    
              32,098,230    
FREE STANDING     0.9 %              
National Retail Properties a             259,000       4,493,650    
REGIONAL MALL     7.6 %              
CBL & Associates Properties             254,600       1,372,294    
Macerich Co. c             256,981       4,525,436    
Simon Property Group             634,868       32,651,261    
              38,548,991    
TOTAL SHOPPING CENTER                     75,140,871    
TOTAL REAL ESTATE                     319,114,174    

 

See accompanying notes to financial statements.
9



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

        Number
of Shares
  Value  
TELECOMMUNICATION SERVICES—INTEGRATED
TELECOMMUNICATIONS SERVICES
    0.8 %              
AT&T a             146,000     $ 3,626,640    
UTILITIES     49.6 %              
ELECTRIC UTILITIES     33.6 %              
American Electric Power Co. a             421,963       12,190,511    
Cia de Transmissao de Energia Eletrica Paulista (Brazil)             30,000       736,259    
DPL a             206,739       4,790,143    
Duke Energy Corp. a             1,364,984       19,915,117    
E.ON AG (ADR) (Germany) a             85,696       3,035,430    
E.ON AG (Germany) b             57,000       2,023,369    
Electricite de France (France) b             137,600       6,718,714    
Enel S.p.A. (Italy) b             571,520       2,790,104    
Entergy Corp. a             231,420       17,939,678    
Exelon Corp. a,c,d             350,578       17,953,099    
FirstEnergy Corp. a             176,182       6,827,053    
Fortum Oyj (Finland) b             39,000       888,932    
FPL Group a             322,158       18,317,904    
ITC Holdings Corp. a             78,064       3,540,983    
Northeast Utilities a             260,871       5,820,032    
NV Energy a             596,633       6,437,670    
Pepco Holdings a             206,464       2,774,876    
Pinnacle West Capital Corp.             30,762       927,474    
PPL Corp. a             233,000       7,679,680    
Progress Energy a             220,929       8,357,744    
Scottish and Southern Energy PLC (United Kingdom) b             126,328       2,376,766    
Southern Co.             587,396       18,303,259    
              170,344,797    
GAS UTILITIES     1.9 %              
EQT Corp. a             148,000       5,166,680    
Northwest Natural Gas Co.             7,895       349,907    
Questar Corp.             129,000       4,006,740    
              9,523,327    

 

See accompanying notes to financial statements.
10



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

        Number
of Shares
  Value  
MULTI UTILITIES     13.6 %              
CenterPoint Energy a             421,944     $ 4,675,140    
CMS Energy Corp. a             402,494       4,862,127    
Consolidated Edison a             57,302       2,144,241    
Dominion Resources a             126,400       4,224,288    
GDF Suez (France) b             94,458       3,535,759    
NSTAR             74       2,376    
PG&E Corp. a             412,555       15,858,614    
Public Service Enterprise Group a             532,400       17,372,212    
RWE AG (Germany) b             10,000       788,591    
Sempra Energy             184,500       9,156,735    
United Utilities Group PLC (United Kingdom) b             71,323       584,854    
Wisconsin Energy Corp.             146,469       5,962,753    
              69,167,690    
WATER UTILITIES     0.5 %              
American States Water Co. a             32,045       1,110,039    
American Water Works Co. a             74,000       1,414,140    
              2,524,179    
TOTAL UTILITIES                     251,559,993    
TOTAL COMMON STOCK (Identified cost—$678,464,790)                     618,805,062    
PREFERRED SECURITIES—$25 PAR VALUE     26.9 %              
BANK     0.5 %              
Bank of America Corp., 8.625%, Series MER a             100,000       2,028,000    
BB&T Capital Trust V, 8.95%, due 9/15/63 a             24,121       613,880    
              2,641,880    
BANK—FOREIGN     4.0 %              
Barclays Bank PLC, 8.125% a             207,000       4,274,550    
Deutsche Bank Contingent Capital Trust III, 7.60% a             172,000       3,395,280    
Deutsche Bank Contingent Capital Trust V, 8.05% a             114,525       2,369,522    
Santander Finance Preferred, 6.50%             95,700       1,722,600    
Santander Finance Preferred, 6.80%             253,485       4,904,935    
Santander Finance Preferred, 4.00%, Series 6 (FRN)             309,700       3,484,125    
              20,151,012    

 

See accompanying notes to financial statements.
11



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

        Number
of Shares
  Value  
ELECTRIC—INTEGRATED     1.5 %              
Dominion Resources, 8.375%, Series A             235,000     $ 5,964,300    
Entergy Texas, 7.875% a             60,000       1,511,400    
              7,475,700    
ENERGY—INTEGRATED OIL & GAS     0.0 %              
Nexen, 7.35%, due 11/1/43, Series B             2,413       49,491    
FINANCE     0.6 %              
INVESTMENT ADVISORY SERVICES     0.2 %              
Ameriprise Financial, 7.75%, due 6/15/39             50,000       1,080,625    
INVESTMENT BANKER/BROKER     0.4 %                
Bear Stearns Capital Trust III, 7.80%, 5/15/31 a             90,000       2,128,500    
TOTAL FINANCE                   3,209,125    
INSURANCE     3.0 %              
MULTI-LINE     0.4 %              
MetLife, 6.50%, Series B a             100,000       2,055,000    
MULTI-LINE—FOREIGN     1.5 %              
Allianz SE, 8.375% a             220,000       4,939,000    
ING Groep N.V., 7.375% a             142,000       2,513,400    
              7,452,400    
PROPERTY CASUALTY     0.1 %              
Berkley W R Capital Trust II, 6.75%, due 7/26/45 a             27,406       613,894    
PROPERTY CASUALTY—FOREIGN     0.5 %              
Arch Capital Group Ltd., 8.00% a             129,000       2,832,840    
REINSURANCE—FOREIGN     0.5 %              
Aspen Insurance Holdings Ltd., 7.401%, Series A a             150,000       2,401,500    
TOTAL INSURANCE                     15,355,634    
INTEGRATED TELECOMMUNICATIONS SERVICES     1.1 %              
Telephone & Data Systems, 7.60%, due 12/1/41, Series A             263,375       5,412,356    
MEDIA—DIVERSIFIED SERVICES     1.4 %              
Comcast Corp., 7.00%, due 9/15/55, Series B a             300,000       6,855,000    

 

See accompanying notes to financial statements.
12



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

        Number
of Shares
  Value  
REAL ESTATE     14.3 %              
DIVERSIFIED     1.1 %              
Duke Realty Corp., 8.375%, Series O a             77,300     $ 1,357,388    
Forest City Enterprises, 7.375%, Class A a             299,875       4,342,190    
              5,699,578    
HEALTH CARE     6.0 %              
Health Care REIT, 7.875%, Series D a             150,336       3,385,567    
Health Care REIT, 7.625%, Series F a             305,600       6,585,680    
LTC Properties, 8.00%, Series F a             438,000       9,942,600    
Omega Healthcare Investors, 8.375%, Series D a             496,100       10,666,150    
              30,579,997    
HOTEL     0.9 %              
Host Hotels & Resorts, 8.875%, Series E             80,000       1,650,000    
LaSalle Hotel Properties, 8.00%, Series E a             170,000       3,133,100    
              4,783,100    
OFFICE     3.2 %              
Alexandria Real Estate Equities, 8.375%, Series C a             268,525       5,518,189    
Brandywine Realty Trust, 7.50%, Series C a             160,010       2,588,962    
SL Green Realty Corp., 7.625%, Series C             367,400       6,062,100    
SL Green Realty Corp., 7.875%, Series D             108,150       1,835,305    
              16,004,556    
OFFICE/INDUSTRIAL     0.9 %              
PS Business Parks, 6.875%, Series I a             245,000       4,410,000    
RESIDENTIAL—APARTMENT     0.5 %              
Apartment Investment & Management Co., 8.00%, Series T a             138,400       2,422,000    
SHOPPING CENTER     1.7 %              
COMMUNITY CENTER     1.4 %              
Developers Diversified Realty Corp., 7.50%, Series I a             295,555       3,316,127    
Kimco Realty Corp., 7.75%, Series G a             88,700       1,831,655    
Saul Centers, 8.00%, Series A             96,300       1,935,630    
              7,083,412    

 

See accompanying notes to financial statements.
13



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

        Number
of Shares
  Value  
REGIONAL MALL     0.3 %              
CBL & Associates Properties, 7.75%, Series C a             114,710     $ 1,634,617    
TOTAL SHOPPING CENTER                     8,718,029    
TOTAL REAL ESTATE                     72,617,260    
UTILITIES—MULTI UTILITIES     0.5 %              
Xcel Energy, 7.60%             100,000       2,533,000    
TOTAL PREFERRED SECURITIES—$25 PAR VALUE
(Identified cost—$172,764,557)
                    136,300,458    
PREFERRED SECURITIES—CAPITAL SECURITIES     19.7 %              
BANK     5.1 %              
Astoria Capital Trust I, 9.75%, due 11/1/29, Series B e             3,000,000       2,898,309    
Bank of America Corp., 8.00%, due 12/29/49 a             3,000,000       2,509,119    
CoBank ACB, 11.00%, Series C, 144A f             80,000       3,831,080    
JPMorgan Chase Capital XVIII, 6.45%, due 12/15/65, Series R             2,000,000       1,690,204    
JPMorgan Chase & Co., 7.90%, due 4/29/49 a             3,070,000       2,694,017    
PNC Preferred Funding Trust I, 8.70%, due 12/31/49, 144A f             7,300,000       6,000,213    
Sovereign Capital Trust VI, 7.908%, due 6/13/36             3,415,000       2,566,031    
Wachovia Capital Trust III, 5.80%, due 3/29/49 (FRN)             2,250,000       1,350,459    
Wells Fargo & Co, 7.98%, due 2/28/49             2,500,000       2,078,045    
              25,617,477    
BANK—FOREIGN     1.9 %              
Barclays Bank PLC, 6.278%, due 12/31/49             4,500,000       2,542,500    
Natixis, 10.00%, due 4/29/49, 144A f             3,000,000       1,802,343    
Rabobank Nederland, 11.00%, due 12/29/49, 144A f             4,000,000       4,461,276    
Standard Chartered PLC, 7.014%, due 12/30/49, 144A f             2,000,000       1,423,454    
              10,229,573    
ELECTRIC     1.5 %              
MULTI UTILITIES     0.8 %              
Dominion Resources Capital Trust I, 7.83%, due 12/1/27 a             4,000,000       3,920,284    
UTILITIES     0.7 %              
DPL Capital Trust II, 8.125%, due 9/1/31             4,000,000       3,656,312    
TOTAL ELECTRIC                     7,576,596    

 

See accompanying notes to financial statements.
14



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

        Number
of Shares
  Value  
FINANCE     1.6 %              
CREDIT CARD     0.5 %              
Capital One Capital III, 7.686%, due 8/15/36 a             3,500,000     $ 2,485,521    
DIVERSIFIED FINANCIAL SERVICES     1.1 %              
ZFS Finance USA Trust I, 6.15%, due 12/15/65, 144A f             4,000,000       3,120,000    
ZFS Finance USA Trust II, 6.45%, due 12/15/65, 144A f             3,080,000       2,371,600    
              5,491,600    
TOTAL FINANCE                     7,977,121    
FOOD     1.4 %              
Dairy Farmers of America, 7.875%, 144A e,f             42,500       2,820,938    
HJ Heinz Finance Co, 8.00%, due 7/15/13, 144A f             48       4,524,000    
              7,344,938    
GAS UTILITIES     1.2 %              
Southern Union Co., 7.20%, due 11/1/66             8,750,000       5,993,750    
INSURANCE     6.2 %              
MULTI-LINE     4.1 %              
AXA SA, 8.60%, due 12/15/30             4,800,000       4,507,368    
Catlin Insurance Co., 7.249%, due 12/1/49, 144A f             5,000,000       2,803,415    
ING Capital Funding Trust III, 8.439%, due 12/30/49 a             8,250,000       5,199,010    
MetLife, 10.75%, due 8/1/69             1,500,000       1,499,715    
MetLife Capital Trust IV, 7.875%, due 12/15/67,144A f             2,000,000       1,623,960    
MetLife Capital Trust X, 9.25%, due 4/8/38, 144A f             3,600,000       3,211,369    
Old Mutual Capital Funding, 8.00%, (Eurobond)             3,500,000       2,170,000    
              21,014,837    
PROPERTY CASUALTY     2.1 %              
Liberty Mutual Group, 7.00%, due 3/15/37, 144A f             2,000,000       1,149,280    
Liberty Mutual Group, 7.80%, due 3/15/37, 144A f             7,000,000       3,927,112    
Liberty Mutual Group, 10.75%, due 6/15/58, 144A f             4,000,000       2,884,820    
Liberty Mutual Insurance, 7.697%, due 10/15/97, 144A f             4,000,000       2,397,596    
              10,358,808    
TOTAL INSURANCE                     31,373,645    

 

See accompanying notes to financial statements.
15



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

        Number
of Shares
  Value  
PIPELINES     0.8 %              
Enbridge Energy Partners LP, 8.05%, due 10/1/37 a             2,000,000     $ 1,461,976    
Enterprise Products Operating LP, 8.375%, due 8/1/66 a             3,500,000       2,820,993    
              4,282,969    
TOTAL PREFERRED SECURITIES—CAPITAL SECURITIES
(Identified cost—$117,189,023)
                    100,396,069    
        Principal
Amount
     
CORPORATE BONDS     3.9 %              
INSURANCE—LIFE/HEALTH     0.5 %              
Pacific Life Insurance Co., 9.25%, due 6/15/39, 144A f           $ 2,500,000       2,432,305    
INTEGRATED TELECOMMUNICATIONS SERVICES     1.2 %              
Citizens Communications Co., 7.875%, due 1/15/27 a             2,000,000       1,610,000    
Citizens Communications Co., 9.00%, due 8/15/31 a             5,500,000       4,565,000    
              6,175,000    
MEDIA     1.7 %              
Cablevision Systems Corp., 8.00%, due 4/15/12 a             2,000,000       1,990,000    
Rogers Cable, 8.75%, due 5/1/32             5,430,000       6,576,751    
              8,566,751    
REAL ESTATE-HOTEL     0.5 %              
Hospitality Properties Trust, 5.125%, due 2/15/15             3,000,000       2,383,407    
TOTAL CORPORATE BONDS (Identified Cost—$20,088,681)                     19,557,463    
        Number
of Rights
     
RIGHTS     0.0 %              
UTILITIES—ELECTRIC UTILITIES  
Cia de Transmissao de Energia Eletrica Paulista (Brazil),
expire 7/17/09 g (Identified cost—$0)
            308       157    

 

See accompanying notes to financial statements.
16



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

        Number
of Shares
  Value  
SHORT-TERM INVESTMENTS     1.0 %            
MONEY MARKET FUNDS  
Dreyfus Treasury Cash Management Fund, 0.001% h             2,550,373     $ 2,550,373    
Federated U.S. Treasury Cash Reserves Fund, 0.00% h             2,753,554       2,753,554    
TOTAL SHORT-TERM INVESTMENTS
(Identified cost—$5,303,927)
                5,303,927    
TOTAL INVESTMENTS (Identified cost—$993,810,978)     173.5 %       880,363,136    
WRITTEN CALL OPTIONS     0.0         (136,600 )  
LIABILITIES IN EXCESS OF OTHER ASSETS     (28.9 )       (146,750,341 )  
LIQUIDATION VALUE OF PREFERRED SHARES     (44.6 )       (226,150,000 )  
NET ASSETS APPLICABLE TO COMMON SHARES (Equivalent to $8.62 per
share based on 58,858,135 shares of common stock outstanding)
    100.0 %     $ 507,326,195    

 

See accompanying notes to financial statements.
17



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

        Number of
Contracts
  Value  
WRITTEN CALL OPTIONS     0.0 %              
Utilities Custom Basket, Strike Price 102, 7/16/09
(Premiums Received—$200,000)
            125,000     $ (136,600 )  

 

Glossary of Portfolio Abbreviations

ADR  American Depositary Receipt

FRN  Floating Rate Note

REIT  Real Estate Investment Trust

Note: Percentages indicated are based on the net assets applicable to common shares of the Fund.

a   A portion or all of the security is pledged in connection with the revolving credit agreement: $349,514,408 has been pledged as collateral.

b   Fair valued security. This security has been valued at its fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors. Aggregate fair value securities represent 4.3% of net assets applicable to common shares of the Fund, all of which have been fair valued pursuant to foreign security fair value pricing procedures approved by the Board of Directors.

c   A portion of the security is segregated as collateral for interest rate swap transactions: $37,080,000 has been segregated as collateral.

d   All or a portion of the security is pledged in connection with written option contracts: $2,590,099 has been pledged to brokers.

e   Illiquid security. Aggregate holdings equal 1.1% of net assets applicable to common shares of the Fund.

f   Resale is restricted to qualified institutional investors. Aggregate holdings equal 10.0% of net assets applicable to common shares of the Fund.

g   Non-income producing security.

h   Rate quoted represents the seven day yield of the fund.

See accompanying notes to financial statements.
18



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

SCHEDULE OF INVESTMENTS—(Continued)

June 30, 2009 (Unaudited)

Interest rate swaps outstanding at June 30, 2009 are as follows:

Counterparty   Notional
Amount
  Fixed
Rate
Payable
  Floating Rate a
(reset monthly)
Receivable
  Termination
Date
  Unrealized
Depreciation
 
Merrill Lynch Derivative Products AG   $ 31,000,000       3.461 %     0.308 %   March 29, 2010   $ (679,755 )  
Merrill Lynch Derivative Products AG   $ 70,000,000       3.600 %     0.308 %   January 29, 2014     (2,817,883 )  
Royal Bank of Canada   $ 40,000,000       3.498 %     0.315 %   November 22, 2012     (1,739,586 )  
Royal Bank of Canada   $ 40,000,000       3.634 %     0.310 %   March 31, 2014     (1,624,742 )  
UBS AG   $ 60,000,000       3.639 %     0.319 %   April 17, 2013     (2,847,507 )  
    $ (9,709,473 )  

 

a   Based on LIBOR (London Interbank Offered Rate). Represents rates in effect at June 30, 2009.

See accompanying notes to financial statements.
19




COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES

June 30, 2009 (Unaudited)

AS SETS:  
Investments in securities, at value (Identified cost—$993,810,978)   $ 880,363,136    
Cash (includes $3,680,000 pledged as collateral for open swap positions)     3,714,227    
Receivable for:  
Dividends and interest     5,715,903    
Investment securities sold     2,540,857    
Other assets     102,882    
Total Assets     892,437,005    
LIABILITIES:  
Unrealized depreciation on interest rate swap transactions     9,709,473    
Payable for:  
Revolving credit agreement     143,000,000    
Investment securities purchased     3,968,700    
Dividends declared on common shares     1,164,154    
Investment management fees     504,300    
Dividends declared on preferred shares     185,518    
Options (Premiums received $200,000)     136,600    
Administration fees     43,226    
Interest expense     10,795    
Directors' fees     2,145    
Other liabilities     235,899    
Total Liabilities     158,960,810    
LIQUIDATION VALUE OF PREFERRED SHARES     226,150,000    
TOTAL NET ASSETS APPLICABLE TO COMMON SHARES   $ 507,326,195    
NET ASSETS consist of:  
Paid-in-capital   $ 953,638,570    
Dividends in excess of net investment income     (931,880 )  
Accumulated net realized loss     (322,292,196 )  
Net unrealized depreciation     (123,088,299 )  
    $ 507,326,195    
NET ASSET VALUE PER COMMON SHARE:  
($507,326,195 ÷ 58,858,135 shares outstanding)   $ 8.62    
MARKET PRICE PER COMMON SHARE   $ 7.13    
MARKET PRICE DISCOUNT TO NET ASSET VALUE PER COMMON SHARE     (17.29 )%  

 

See accompanying notes to financial statements.
20



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2009 (Unaudited)

Investment Income:  
Dividend income (net of $194,527 of foreign withholding tax)   $ 19,726,921    
Interest income     5,085,815    
Total Income     24,812,736    
Expenses:  
Investment management fees     3,295,342    
Line of credit fees     2,505,811    
Interest expense     500,885    
Administration fees     369,392    
Preferred remarketing fee     260,150    
Professional fees     103,665    
Custodian fees and expenses     90,014    
Shareholder reporting expenses     61,332    
Directors' fees and expenses     25,702    
Registration and filing fees     12,187    
Transfer agent fees and expenses     11,652    
Miscellaneous     106,817    
Total Expenses     7,342,949    
Reduction of Expenses (See Note 2)     (618,708 )  
Net Expenses     6,724,241    
Net Investment Income     18,088,495    
Net Realized and Unrealized Gain (Loss):  
Net realized gain (loss) on:  
Investments     (170,240,697 )  
Options     1,417,029    
Foreign currency transactions     13,505    
Interest rate swap transactions     (4,326,853 )  
Net realized loss     (173,137,016 )  
Net change in unrealized depreciation on:  
Investments     140,034,056    
Options     63,400    
Foreign currency translations     9,585    
Interest rate swap transactions     6,344,173    
Net change in unrealized depreciation     146,451,214    
Net realized and unrealized loss     (26,685,802 )  
Net Decrease in Net Assets Resulting from Operations     (8,597,307 )  
Less Dividends to Preferred Shareholders     (2,151,725 )  
Net Decrease in Net Assets from Operations Applicable to Common Shares   $ (10,749,032 )  

 

See accompanying notes to financial statements.
21



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

STATEMENT OF CHANGES IN NET ASSETS (Unaudited)

    For the
Six Months Ended
June 30, 2009
  For the
Year Ended
December 31, 2008
 
Change in Net Assets Applicable to Common Shares:  
From Operations:  
Net investment income   $ 18,088,495     $ 71,533,154    
Net realized loss     (173,137,016 )     (150,888,953 )  
Net change in unrealized appreciation (depreciation)     146,451,214       (550,169,851 )  
Net decrease in net assets resulting from operations     (8,597,307 )     (629,525,650 )  
Less dividends and distributions to preferred shareholders from
net investment income
    (2,151,725 )     (28,036,252 )  
Net decrease in net assets from operations applicable to
common shares
    (10,749,032 )     (657,561,902 )  
Less Dividends and Distributions to Common Shareholders from:  
Net investment income     (20,894,638 )     (35,103,984 )  
Tax return of capital           (70,840,661 )  
Total dividends and distributions to
common shareholders
    (20,894,638 )     (105,944,645 )  
Capital Stock Transactions:  
Decrease in net assets from preferred share
offering cost adjustment
          (3,133 )  
Total decrease in net assets applicable to
common shares
    (31,643,670 )     (763,509,680 )  
Net Assets Applicable to Common Shares:  
Beginning of period     538,969,865       1,302,479,545    
End of period a   $ 507,326,195     $ 538,969,865    

 

a   Includes dividends in excess of net investment income and undistributed net investment income of $931,880 and $4,025,988, respectively.

See accompanying notes to financial statements.
22



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2009 (Unaudited)

Increase in Cash:        
Cash Flows from Operating Activities:        
Net decrease in net assets resulting from operations   $ (8,597,307 )  
Adjustments to reconcile net decrease in net assets from
operations to net cash provided by operating activities:
 
Purchases of long-term investments     (397,081,122 )  
Net purchases, sales and maturities of short-term investments     37,597,931    
Net amortization/accretion of premium (discount)     5,366    
Tax adjustments     6,489,162    
Proceeds from sales and maturities of long-term investments     333,336,495    
Net decrease in interest receivable, receivable for investment securities sold and
other assets
    4,279,245    
Net increase in payable for investment securities purchased, accrued expenses and
other payables
    2,887,981    
Increase in premiums received from options     136,600    
Net change in unrealized appreciation on investments     (140,034,056 )  
Net change in unrealized appreciation on interest rate swaps     (6,344,173 )  
Net realized loss from investments     170,240,697    
Cash provided by operating activities     2,916,819    
Cash Flows from Financing Activities:        
Net decrease in preferred shares outstanding     (99,000,000 )  
Net increase in payable for revolving credit agreement     123,000,000    
Distributions paid on preferred shares     (2,151,725 )  
Distributions paid on common shares     (20,894,638 )  
Decrease in payable to common shareholders     (53,691 )  
Decrease in payable to preferred shareholders     (102,538 )  
Cash provided for financing activities     797,408    
Increase in cash     3,714,227    
Cash at beginning of period (including foreign currency)     0    
Cash at end of period (including foreign currency)   $ 3,714,227    

 

See accompanying notes to financial statements.
23




COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

FINANCIAL HIGHLIGHTS (Unaudited)

The following table includes selected data for a common share outstanding throughout each period and other performance information derived from the financial statements. It should be read in conjunction with the financial statements and notes thereto.

    For the Six
Months Ended
  For the Year Ended December 31,   For the Period
January 30, 2004 a
through
 
Per Share Operating Performance:   June 30, 2009   2008   2007   2006   2005   December 31, 2004  
Net asset value per common share, beginning of period   $ 9.16     $ 22.13     $ 25.22     $ 21.26     $ 21.51     $ 19.10    
Income from investment operations:  
Net investment income     0.31       1.22       1.50       1.43       1.17 b       0.90    
Net realized and unrealized gain (loss)     (0.45 )     (11.91 )     (1.85 )     5.47       0.57       2.97    
Total income (loss) from investment operations     (0.14 )     (10.69 )     (0.35 )     6.90       1.74       3.87    
Less dividends and distributions to preferred shareholders from:  
Net investment income     (0.04 )     (0.48 )     (0.55 )     (0.32 )     (0.25 )     (0.12 )  
Net realized gain                 (0.18 )     (0.26 )     (0.12 )     (0.01 )  
Total dividends and distributions to preferred
shareholders
    (0.04 )     (0.48 )     (0.73 )     (0.58 )     (0.37 )     (0.13 )  
Total from investment operations applicable to
common shares
    (0.18 )     (11.17 )     (1.08 )     6.32       1.37       3.74    
Less:  Offering costs charged to paid-in capital—common shares                                   (0.04 )  
Offering costs charged to paid-in capital—preferred shares                 (0.02 )     (0.01 )     (0.02 )     (0.12 )  
Preferred and common share offering cost adjustment           (0.00 ) c                 0.00 c          
Total offering costs                 (0.02 )     (0.01 )     (0.02 )     (0.16 )  
Dilutive effect of common share offering                                   (0.12 )  
Less dividends and distributions to common shareholders from:  
Net investment income     (0.36 )     (0.60 )     (0.99 )     (1.13 )     (0.93 )     (0.79 )  
Net realized gain                 (0.33 )     (0.87 )     (0.46 )     (0.03 )  
Tax return of capital           (1.20 )     (0.67 )     (0.35 )     (0.21 )     (0.23 )  
Total dividends and distributions to common
shareholders
    (0.36 )     (1.80 )     (1.99 )     (2.35 )     (1.60 )     (1.05 )  
Net increase (decrease) in net asset value per common share     (0.54 )     (12.97 )     (3.09 )     3.96       (0.25 )     2.41    
Net asset value, per common share, end of period   $ 8.62     $ 9.16     $ 22.13     $ 25.22     $ 21.26     $ 21.51    
Market value, per common share, end of period   $ 7.13     $ 6.36     $ 20.11     $ 22.35     $ 17.66     $ 18.76    
Net asset value total return d     –0.17 % e     –52.23 %     –3.69 %     32.65 %     7.65 %     19.46 % e  
Market value return d     18.92 % e     –63.50 %     –1.24 %     41.52 %     2.53 %     –0.50 % e  

 

See accompanying notes to financial statements.
24



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

FINANCIAL HIGHLIGHTS (Unaudited)—(Continued)

    For the Six
Months Ended
  For the Year Ended December 31,   For the Period
January 30, 2004 a
through
 
Ratios/Supplemental Data:   June 30, 2009   2008   2007   2006   2005   December 31, 2004  
Net assets applicable to common shares, end of period (in millions)   $ 507.3     $ 539.0     $ 1,302.5     $ 1,484.3     $ 1,251.4     $ 1,266.2    
Ratio of expenses to average daily net assets applicable to
common shares (before expense reduction) f
    3.36 % g     2.11 %     1.60 %     1.57 %     1.57 %     1.49 % g  
Ratio of expenses to average daily net assets applicable to
common shares (net of expense reduction) f
    3.08 % g     1.77 %     1.29 %     1.27 %     1.27 %     1.21 % g  
Ratio of expenses to average daily net assets applicable to common
shares (net of expense reduction and excluding interest expense) f
    2.85 % g     1.74 %                          
Ratio of net investment income to average daily net assets
applicable to common shares (before expense reduction) f
    8.00 % g     6.69 %     5.12 %     5.47 %     5.15 %     5.40 % g  
Ratio of net investment income to average daily net assets
applicable to common shares (net of expense reduction) f
    8.28 % g     7.04 %     5.42 %     5.77 %     5.45 %     5.68 % g  
Ratio of expenses to average daily managed assets (before
expense reduction) f,h
    1.89 % g     1.24 %     1.04 %     1.04 %     1.04 %     1.04 % g  
Ratio of expenses to average daily managed assets (net of
expense reduction) f,h
    1.73 % g     1.04 %     0.84 %     0.84 %     0.84 %     0.84 % g  
Portfolio turnover rate     43 % e     39 %     22 %     24 %     20 %     18 % e  
Preferred Shares/Revolving Credit Agreement:  
Liquidation value, end of period (in 000's)   $ 226,150     $ 325,150     $ 795,000     $ 700,000     $ 645,000     $ 570,000    
Total shares outstanding (in 000's)     9       13       32       28       26       23    
Asset coverage ratio for revolving credit agreement     613 %     4,421 %                          
Asset coverage per $1,000 for revolving credit agreement   $ 6,129     $ 44,206                            
Asset coverage ratio for auction market preferred shares i     237 %     256 %     264 %     312 %     294 %     322 %  
Asset coverage per share for auction market preferred shares i   $ 59,250     $ 64,000     $ 65,958     $ 78,011     $ 73,504     $ 80,534    
Liquidation preference per share   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    
Average market value per share j   $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000    

 

a   Commencement of operations.

b   Calculation based on average shares outstanding.

c   Amount is less than $0.005.

d   Total market value return is computed based upon the New York Stock Exchange market price of the Fund's shares and excludes the effects of brokerage commissions. Total net asset value return measures the changes in value over the period indicated, taking into account dividends as reinvested. Dividends and distributions, if any, are assumed for purposes of these calculations, to be reinvested at prices obtained under the Fund's dividend reinvestment plan.

e   Not annualized.

f   Ratios do not reflect dividend payments to preferred shareholders.

g   Annualized.

h   Average daily managed assets represent net assets applicable to common shares plus liquidation preference of preferred shares and the outstanding balance of the revolving credit agreement.

i   Includes the effect of the outstanding borrowings from the revolving credit agreement.

j   Based on weekly prices.

See accompanying notes to financial statements.
25




COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

Note 1. Significant Accounting Policies

Cohen & Steers REIT and Utility Income Fund, Inc. (the Fund) was incorporated under the laws of the State of Maryland on October 1, 2003 and is registered under the Investment Company Act of 1940, as amended, as a nondiversified, closed-end management investment company. The Fund's investment objective is high current income.

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (GAAP). The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

Portfolio Valuation: Investments in securities that are listed on the New York Stock Exchange are valued, except as indicated below, and at the last sale price reflected at the close of the New York Stock Exchange on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices for the day or, if no asked price is available, at the bid price. Exchange traded options are valued at their last sale price as of the close of options trading on applicable exchanges. In the absence of a last sale, options are valued at the average of the quoted bid and asked prices as of the close of business. Over-the-counter options quotations are provided by the respective counterparty.

Securities not listed on the New York Stock Exchange but listed on other domestic or foreign securities exchanges or admitted to trading on the National Association of Securities Dealers Automated Quotations, Inc. (Nasdaq) national market system are valued in a similar manner. Securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined as reflected on the tape at the close of the exchange representing the principal market for such securities.

Readily marketable securities traded in the over-the-counter market, including listed securities whose primary market is believed by Cohen & Steers Capital Management, Inc. (the investment manager) to be over-the-counter are valued at the official closing prices as reported by Nasdaq, the Pink Sheets, or such other comparable sources as the Board of Directors deem appropriate to reflect their fair market value. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices for the day, or if no asked price is available, at the bid price. However, certain fixed-income securities may be valued on the basis of prices provided by a pricing service when such prices are believed by the Board of Directors to reflect the fair market value of such securities. Where securities are traded on more than one exchange and also over-the-counter, the securities will generally be valued using the quotations the Board of Directors believes most closely reflect the value of such securities. Interest rate swaps are valued utilizing quotes received from an outside pricing service.

Portfolio securities primarily traded on foreign markets are generally valued at the closing values of such securities on their respective exchanges or if after the close of the foreign markets, but prior to the close of business


26



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

on the day the securities are being valued, market conditions change significantly, certain foreign securities may be fair valued pursuant to procedures established by the Board of Directors.

Securities for which market prices are unavailable, or securities for which the investment manager determines that bid and/or asked price does not reflect market value, will be valued at fair value pursuant to procedures approved by the Fund's Board of Directors. Circumstances in which market prices may be unavailable include, but are not limited to, when trading in a security is suspended, the exchange on which the security is traded is subject to an unscheduled close or disruption or material events occur after the close of the exchange on which the security is principally traded. In these circumstances, the Fund determines fair value in a manner that fairly reflects the market value of the security on the valuation date based on consideration of any information or factors it deems appropriate. These may include recent transactions in comparable securities, information relating to the specific security and developments in the markets.

The Fund's use of fair value pricing may cause the net asset value of Fund shares to differ from the net asset value that would be calculated using market quotations. Fair value pricing involves subjective judgments and it is possible that the fair value determined for a security may be materially different than the value that could be realized upon the sale of that security.

Short-term debt securities, which have a maturity date of 60 days or less, are valued at amortized cost, which approximates value.

The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), effective January 1, 2008. In accordance with FAS 157, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in an orderly transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. FAS 157 establishes a single definition of fair value, creates a three-tier hierarchy as a framework for measuring fair value based on inputs used to value the Fund's investments, and requires additional disclosure about fair value. The hierarchy of inputs is summarized below.

•  Level 1—quoted prices in active markets for identical investments

•  Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•  Level 3—significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)

The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards Staff Position No. 157-4 "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP 157-4"), effective June 15, 2009. FSP 157-4 provides additional guidance for estimating fair value in accordance with FAS 157, when the volume and


27



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

level of activity for the asset or liability have significantly decreased as well as guidance on identifying circumstances that indicate a transaction is not orderly.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used as of June 30, 2009 in valuing the Fund's investments carried at value:

        Fair Value Measurements at June 30, 2009 Using  
    Total   Quoted Prices In
Active Market for
Identical Assets
(Level 1)
  Significant
Other Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
 
Common Stock—Industrials—
Highways & Railtracks
  $ 4,299,297     $ 2,069,392     $ 2,229,905     $    
Common Stock—Utilities—
Electric Utilities
    170,344,797       155,546,912       14,797,885          
Common Stock—Utilities—
Multi Utilities
    69,167,690       64,258,486       4,909,204          
Common Stock—Other Industries     374,993,278       374,993,278                
Preferred Securities—
$25 Par Value—Electric—
Integrated
    7,475,700       1,511,400       5,964,300          
Preferred Securities—
$25 Par Value—Finance—
Investment Advisory Services
    1,080,625             1,080,625          
Preferred Securities—
$25 Par Value—Other Industries
    127,744,133       127,744,133                
Preferred Securities—Capital
Securities—Bank—Foreign
    10,229,573             7,687,073       2,542,500    
Preferred Securities—Capital
Securities—Food
    7,344,938             4,524,000       2,820,938    
Preferred Securities—
Capital Securities—
Insurance-Multi-Line
    21,014,837             19,515,122       1,499,715    

 


28



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

        Fair Value Measurements at June 30, 2009 Using  
    Total   Quoted Prices In
Active Market for
Identical Assets
(Level 1)
  Significant
Other Observable
Inputs
(Level 2)
  Significant
Unobservable
Inputs
(Level 3)
 
Preferred Securities—Capital
Securities—Other Industries
  $ 61,806,721     $     $ 61,806,721     $    
Corporate Bonds     19,557,463             19,557,463          
Rights     157       157                
Money Market Funds     5,303,927             5,303,927          
Total Investments   $ 880,363,136     $ 726,123,758     $ 147,376,225     $ 6,863,153    
Other Financial Instruments *   $ (9,846,073 )   $     $ (9,846,073 )   $    

 

*   Other financial instruments are interest rate swap contracts and written call options.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

    Investments
in Securities
 
Balance as of December 31, 2008   $ 3,429,611    
Accrued discount     132    
Realized loss     (928,692 )  
Change in unrealized appreciation     1,181,136    
Net purchases     3,180,966    
Balance as of June 30, 2009   $ 6,863,153    

 

Security Transactions and Investment Income: Security transactions are recorded on trade date. Realized gains and losses on investments sold are recorded on the basis of identified cost. Interest income is recorded on the accrual basis. Discounts are accreted and premiums are amortized over the life of the respective securities. Dividend income is recorded on the ex-dividend date except for certain dividends on foreign securities, which are recorded as soon as the Fund is informed after the ex-dividend date. The Fund records distributions received in excess of income from underlying investments as a reduction of cost of investments and/or realized gain. Such amounts are based on estimates if actual amounts are not available, and actual amounts of income, realized gain and return of capital may differ from the estimated amounts. The Fund adjusts the estimated amounts of the components of distributions (and consequently its net investment income) as an increase to unrealized appreciation/(depreciation) and realized gain/(loss) on investments as necessary once the issuers provide information about the actual composition of the distributions.


29



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

Options: The Fund may write covered call options on an index or a security with the intention of earning option premiums. Option premiums generate current income and may help increase distributable income. When a Fund writes (sells) an option, an amount equal to the premium received by the Fund is recorded in the Statement of Assets and Liabilities as a liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. When an option expires, the Fund realizes a gain or loss on the option to the extent of the premiums received. Premiums received from writing options which are exercised or are closed, are added to or offset against the proceeds or amount paid on the transaction to determine the realized gain or loss. The Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the underlying index or security. Other risks include the possibility of an illiquid options market or the inability of the counterparties to fulfill their obligations under the contract.

Foreign Currency Translations: The books and records of the Fund are maintained in U.S. dollars as follows: (1) the foreign currency market value of investment securities, other assets and liabilities and foreign currency contracts are translated at the exchange rates prevailing at the end of the period; and (2) purchases, sales, income and expenses are translated at the exchange rates prevailing on the respective dates of such transactions. The resultant exchange gains and losses are recorded as realized and unrealized gain/loss on foreign exchange transactions. Pursuant to U.S. federal income tax regulations, certain foreign exchange gains/losses included in realized and unrealized gain/loss are included in or are a reduction of ordinary income for federal income tax purposes. The Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the changes in the market prices of the securities.

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.

Interest Rate Swaps: The Fund uses interest rate swaps in connection with the sale of preferred shares and borrowing under its credit agreement. The interest rate swaps are intended to reduce the risk that an increase in short-term interest rates could have on the performance of the Fund's common shares as a result of the floating rate structure of the preferred shares and the credit agreement. In these interest rate swaps, the Fund agrees to pay the other party to the interest rate swap (which is known as the counterparty) a fixed rate payment in exchange for the counterparty agreeing to pay the Fund a variable rate payment that is intended to approximate the Fund's variable rate payment obligation on the preferred shares and the credit agreement. The payment obligation is based on the notional amount of the swap. Depending on the state of interest rates in general, the use of interest rate swaps could enhance or harm the overall performance of the common shares. The market value of interest rate swaps is based on pricing models that consider the time value of money, volatility, the current market and


30



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

contractual prices of the underlying financial instrument. Unrealized appreciation is reported as an asset and unrealized depreciation is reported as a liability on the Statement of Assets and Liabilities. The change in value of swaps, including the accrual of periodic amounts of interest to be paid or received on swaps, is reported as unrealized appreciation or depreciation in the Statement of Operations. A realized gain or loss is recorded upon payment or receipt of a periodic payment or termination of swap agreements. Swap agreements involve, to varying degrees, elements of market and counterparty risk, and exposure to loss in excess of the related amounts reflected in the Statement of Assets and Liabilities. The Fund's maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from or paid to the counterparty over the contract's remaining life, to the extent that such amount is positive.

For each swap counterparty, the Fund entered into an International Swap Dealers Association Inc. Master Agreement and related annexes thereto ("ISDAs") which sets forth the general terms and conditions of the Fund's swap transactions. During 2008, the Fund notified Merrill Lynch Derivative Products AG ("MLDP"), UBS AG ("UBS") and Royal Bank of Canada ("RBC") that it breached certain terms and conditions of its ISDAs. On November 21, 2008, UBS granted a conditional waiver to the Fund stating that UBS did not intend to presently exercise its rights under the ISDA. MLDP has required that the Fund post collateral. The collateral amount is determined by the approximate unrealized depreciation of a particular swap transaction on each valuation date. As of June 30, 2009, this amount was $3,680,000 and was pledged in cash by the Fund to MLDP.

At June 30, 2009, the Fund continues to operate under the existing terms of all of its various ISDAs, including those with MLDP, UBS and RBC. However, MLDP, UBS and RBC reserve any and all rights to take any future action with respect to such events, including termination of outstanding swap transactions; termination or renegotiation of the ISDAs; posting of collateral in the form of cash or U.S. Treasury securities representing the unrealized depreciation on outstanding interest rate swap transactions or continuation under the current terms of the ISDAs. Any action resulting in the early termination of an interest rate swap transaction would cause the Fund to realize any market depreciation that existed on such transaction. In addition to realizing such losses, the early termination of a swap transaction may generate additional expenses for the Fund.

Dividends and Distributions to Shareholders: Dividends from net investment income and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from GAAP. Dividends from net investment income are declared and paid quarterly. Net realized capital gains, unless offset by any available capital loss carryforward, are typically distributed to shareholders at least annually. Dividends and distributions to shareholders are recorded on the ex-dividend date and are automatically reinvested in full and fractional shares of the Fund unless the shareholder has elected to have them paid in cash.

Distributions paid by the Fund are subject to recharacterization for tax purposes. Based upon the results of operations for the six months ended June 30, 2009, the investment manager considers it likely that a portion of the dividends to common shareholders will be reclassified to return of capital upon the final determination of the Fund's taxable income for the year.


31



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

Series M7, Series T7, Series T7-2, Series W7, Series TH7 and Series F7 preferred shares pay dividends based on a variable interest rate set at auctions, normally held every seven days. Dividends and distributions are declared and recorded for the subsequent seven day period on the auction date. In most instances, dividends are payable every seven days, on the first business day following the end of the dividend period.

Series M28, Series T28, Series W28 and Series F28 preferred shares pay dividends based on a variable interest rate set at auctions, normally held every 28 days. The dividends are declared and recorded for the subsequent 28 day period on the auction date. In most instances, dividends are payable every 28 days, on the first business day following the end of the dividend period.

Income Taxes: It is the policy of the Fund to continue to qualify as a regulated investment company, if such qualification is in the best interest of the shareholders, by complying with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies, and by distributing substantially all of its taxable earnings to its shareholders. Accordingly, no provision for federal income or excise tax is necessary. The Fund has adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position must meet before being recognized in the financial statements. An assessment of the Fund's tax positions has been made and it has been determined that there is no impact to the Fund's financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.

Note 2. Investment Management Fees, Administration Fees and Other Transactions with Affiliates

Investment Management Fees: The investment manager serves as the Fund's investment manager pursuant to an investment management agreement (the investment management agreement). Under the terms of the investment management agreement, the investment manager provides the Fund with day-to-day investment decisions and generally manages the Fund's investments in accordance with the stated policies of the Fund, subject to the supervision of the Board of Directors.

For the services under the investment management agreement, the Fund pays the investment manager an investment management fee, accrued daily and paid monthly, at an annual rate of 0.85% of the Fund's average daily managed asset value. Managed asset value is the net asset value of the common shares plus the liquidation preference of the preferred shares and/or the amount of any loan outstanding.


32



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

The investment manager has contractually agreed to waive its investment management fee as follows:


 

For the Period
  Percentage of
Average Daily
Managed Asset Value
 
1 /01/09—1/31/09     0.20 %  
2 /01/09—1/31/10     0.15 %  
2 /01/10—1/31/11     0.10 %  
2 /01/11—1/31/12     0.05 %  

 

During the six months ended June 30, 2009, the investment manager waived its fee at the annual rate of 0.16%.

Administration Fees: The Fund has entered into an administration agreement with the investment manager under which the investment manager performs certain administrative functions for the Fund and receives a fee, accrued daily and paid monthly, at the annual rate of 0.06% of the Fund's average daily managed assets up to $1 billion, 0.04% of the Fund's average daily managed assets in excess of $1 billion up to $1.5 billion and 0.02% of the Fund's average daily managed assets in excess of $1.5 billion. For the six months ended June 30, 2009, the Fund incurred $232,612 in administration fees. Additionally, the Fund pays State Street Bank and Trust Company as sub-administrator under a fund accounting and administration agreement.

Directors' and Officers' Fees: Certain directors and officers of the Fund are also directors, officers, and/or employees of the investment manager. The Fund does not pay compensation to any affiliated directors and officers except for the Chief Compliance Officer, who received $6,153 from the Fund for the six months ended June 30, 2009.

Note 3. Purchases and Sales of Securities

Purchases and sales of securities, excluding short-term investments, for the six months ended June 30, 2009, totaled $392,357,442 and $331,373,831 respectively.

Transactions in options written during the six months ended June 30, 2009, were as follows:

    Number
of Contracts
  Premium  
Options outstanding at December 31, 2008         $    
Options written     2,031,401       2,715,543    
Options expired     (1,653,664 )     (1,921,733 )  
Options terminated in closing transactions     (251,544 )     (516,456 )  
Options exercised     (1,193 )     (77,354 )  
Options outstanding at June 30, 2009     125,000     $ 200,000    

 


33



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

Note 4. Income Tax Information

As of June 30, 2009, the federal tax cost and net unrealized depreciation on securities were as follows:

Gross unrealized appreciation   $ 43,818,870    
Gross unrealized depreciation     (157,266,712 )  
Net unrealized depreciation   $ (113,447,842 )  
Cost for federal income tax purposes   $ 993,810,978    

 

As of December 31, 2008, the Fund had a net capital loss carryforward of $143,886,996, which will expire on December 31, 2016. This carryforward may be used to offset future capital gains to the extent provided by regulations.

Note 5. Capital Stock

The Fund is authorized to issue 100 million shares of common stock at a par value of $0.001 per share.

During the six months ended June 30, 2009 and the year ended December 31, 2008, the Fund issued no shares of common stock, for the reinvestment of dividends.

On June 12, 2008, the Board of Directors approved the delegation of its authority to management to effect repurchases, pursuant to management's discretion and subject to market conditions and investment considerations, of up to 10% of the Fund's outstanding common shares ("Share Repurchase Program") through the fiscal year ended December 31, 2008. On December 17, 2008, the Board of Directors authorized the continuation of the Share Repurchase Program through fiscal year ending December 31, 2009. During the six months ended June 30, 2009 and the year ended December 31, 2008, the Fund did not effect any repurchases.

During the year ended December 31, 2008, an adjustment of $3,133 was charged to paid-in-capital for differences between estimated and actual preferred offering costs.

The Fund's articles of incorporation authorize the issuance of Fund preferred shares, par value $0.001 per share, in one or more classes or series, with rights as determined by the Board of Directors, by action of the Board of Directors without the approval of the common shareholders.

Preferred shares are senior to the Fund's common shares and will rank on a parity with shares of any other series of preferred shares, and with shares of any other series of preferred stock of the Fund, as to the payment of dividends and the distribution of assets upon liquidation. If the Fund does not timely cure a failure to (1) maintain a discounted value of its portfolio equal to the preferred shares basic maintenance amount, (2) maintain the 1940 Act preferred shares asset coverage, or (3) file a required certificate related to asset coverage on time, the preferred shares will be subject to a mandatory redemption at the redemption price of $25,000 per share plus an amount equal to accumulated but unpaid dividends thereon to the date fixed for redemption. To the extent


34



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

permitted under the 1940 Act and Maryland Law, the Fund at its option may without consent of the holders of preferred shares, redeem preferred shares having a dividend period of one year or less, in whole, or in part, on the business day after the last day of such dividend period upon not less than 15 calendar days and not more than 40 calendar days prior to notice. The optional redemption price is $25,000 per share plus an amount equal to accumulated but unpaid dividends thereon to the date fixed for redemption.

The Fund's common shares and preferred shares have equal voting rights of one vote per share and vote together as a single class, except in certain circumstances regarding the election of directors. In addition, the affirmative vote of the holders of a majority, as defined in the 1940 Act, of the outstanding preferred shares shall be required to (1) approve any plan of reorganization that would adversely affect the preferred shares and (2) approve any matter that materially and adversely affects the rights, preferences, or powers of that series.

The following table reflects the preferred shares issued and outstanding in the amount of $226,150,000 as of June 30, 2009, along with the range of dividend rates paid during the six months ended June 30, 2009:

    Value   Range  
Auction market preferred shares, Series M7,
($25,000 liquidation value, $0.001 par value,  
955 shares issued and outstanding)
  $ 23,875,000       1.49 %-1.69%  
Auction market preferred shares, Series M28,
($25,000 liquidation value, $0.001 par value, 
626 shares issued and outstanding)
  $ 15,650,000       1.57 %-1.81%  
Auction market preferred shares, Series T7,
($25,000 liquidation value, $0.001 par value, 
955 shares issued and outstanding)
  $ 23,875,000       1.49 %-1.70%  
Auction market preferred shares, Series T7-2,
($25,000 liquidation value, $0.001 par value, 
1,083 shares issued and outstanding)
  $ 27,075,000       1.49 %-1.70%  
Auction market preferred shares, Series T28,
($25,000 liquidation value, $0.001 par value, 
854 shares issued and outstanding)
  $ 21,350,000       1.56 %-1.81%  
Auction market preferred shares, Series W7,
($25,000 liquidation value, $0.001 par value, 
955 shares issued and outstanding)
  $ 23,875,000       1.48 %-1.70%  
Auction market preferred shares, Series W28,
($25,000 liquidation value, $0.001 par value, 
854 shares issued and outstanding)
  $ 21,350,000       1.57 %-1.81%  

 


35



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

    Value   Range  
Auction market preferred shares, Series TH7,
($25,000 liquidation value, $0.001 par value, 
955 shares issued and outstanding)
  $ 23,875,000       1.49 %-1.71%  
Auction market preferred shares, Series F7,
($25,000 liquidation value, $0.001 par value, 
955 shares issued and outstanding)
  $ 23,875,000       1.49 %-1.71%  
Auction market preferred shares, Series F28,
($25,000 liquidation value, $0.001 par value, 
854 shares issued and outstanding)
  $ 21,350,000       1.56 %-1.77%  

 

The Articles Supplementary (the "Articles") creating each series of Auction Market Preferred Shares ("AMPS") provide for dividends to be paid at either the rate set in the current auction, or at the maximum rate as defined in the Articles if sufficient clearing bids for the AMPS are not received in the current auction. Beginning on February 13, 2008, sufficient clearing bids were not received for the auctions for the AMPS series of the Fund, and therefore, the maximum rates were declared on the respective AMPS series. Based upon the current ratings of the AMPS, the maximum rate for shares of a series will be the greater of 125% of LIBOR or 125 basis points plus LIBOR.

An existing owner of AMPS may sell, transfer or dispose of AMPS only in an auction, pursuant to a bid or sell order in accordance with the auction procedures, or outside an auction, to or through a broker-dealer. Existing holders will be able to sell all of the AMPS that are the subject of their submitted sell orders only if there are bidders willing to purchase those AMPS in the auction. An auction fails when there is an insufficient number of bidders. A failed auction is not a default. Dividends continue to be paid on the AMPS at the maximum rate rather than an auction rate. Broker-dealers, which have been appointed by the Fund to serve as dealers for the auctions, may submit a bid in an auction to avoid an auction failure, but are not obligated to do so. Due to liquidity concerns in the market, most broker-dealers have decided not to submit bids to purchase AMPS.

The AMPS continue to be rated Aaa by Moody's Investor Services and AAA by Standard & Poor's. In addition, the Fund continues to meet certain specified asset coverage tests required by the rating agencies as well as the 200% asset coverage test with respect to AMPS set forth in the Investment Company Act of 1940, as amended.

During the six months ended June 30, 2009 and the year ended December 31, 2008, the Fund redeemed $99,000,000 and $469,850,000, respectively of its outstanding preferred shares at a redemption price of $25,000 per share plus accrued but unpaid dividends. The partial redemption of the preferred shares was made on a pro rata basis across all preferred series. Redemptions were allocated among participating broker/dealers by the Depository Trust Company using a predetermined methodology and each broker/dealer allocated the redeemed shares to the underlying beneficiaries according to its own procedures.


36



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

The redemption amount and details for the six months ended June 30, 2009 are:

Series   Shares
Outstanding
12/31/08
  Number of
Shares
Redeemed
  Shares
Outstanding
06/30/09
  Total Value
12/31/08
  Amount
Redeemed
  Total Value
06/30/09
 
M7     1,373       418       955     $ 34,325,000     $ 10,450,000     $ 23,875,000    
M28     900       274       626       22,500,000       6,850,000       15,650,000    
T7     1,373       418       955       34,325,000       10,450,000       23,875,000    
T7-2     1,557       474       1,083       38,925,000       11,850,000       27,075,000    
T28     1,228       374       854       30,700,000       9,350,000       21,350,000    
W7     1,373       418       955       34,325,000       10,450,000       23,875,000    
W28     1,228       374       854       30,700,000       9,350,000       21,350,000    
TH7     1,373       418       955       34,325,000       10,450,000       23,875,000    
F7     1,373       418       955       34,325,000       10,450,000       23,875,000    
F28     1,228       374       854       30,700,000       9,350,000       21,350,000    
    $ 325,150,000     $ 99,000,000     $ 226,150,000    

 

The redemption amount and details for the year ended December 31, 2008 are:

Series   Shares
Outstanding
12/31/07
  Number of
Shares
Redeemed
  Shares
Outstanding
12/31/08
  Total Value
12/31/07
  Amount
Redeemed
  Total Value
12/31/08
 
M7     3,360       1,987       1,373     $ 84,000,000     $ 49,675,000     $ 34,325,000    
M28     2,200       1,300       900       55,000,000       32,500,000       22,500,000    
T7     3,360       1,987       1,373       84,000,000       49,675,000       34,325,000    
T7-2     3,800       2,243       1,557       95,000,000       56,075,000       38,925,000    
T28     3,000       1,772       1,228       75,000,000       44,300,000       30,700,000    
W7     3,360       1,987       1,373       84,000,000       49,675,000       34,325,000    
W28     3,000       1,772       1,228       75,000,000       44,300,000       30,700,000    
TH7     3,360       1,987       1,373       84,000,000       49,675,000       34,325,000    
F7     3,360       1,987       1,373       84,000,000       49,675,000       34,325,000    
F28     3,000       1,772       1,228       75,000,000       44,300,000       30,700,000    
    $ 795,000,000     $ 469,850,000     $ 325,150,000    

 


37



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

On June 30, 2009, the Fund announced the redemption of the balance of its outstanding preferred shares.

The redemption amount and details are:

Series   Number of
Shares
Redeemed
  Amount
Redeemed
  Redemption Date  
M7     955     $ 23,875,000     July 21, 2009  
M28     626     $ 15,650,000     July 24, 2009  
T7     955     $ 23,875,000     July 22, 2009  
T7-2     1,083     $ 27,075,000     July 22, 2009  
T28     854     $ 21,350,000     July 24, 2009  
W7     955     $ 23,875,000     July 23, 2009  
W28     854     $ 21,350,000     July 24, 2009  
TH7     955     $ 23,875,000     July 24, 2009  
F7     955     $ 23,875,000     July 20, 2009  
F28     854     $ 21,350,000     July 20, 2009  

 

Note 6. Borrowings

On September 23, 2008 the Fund entered into a $440,000,000 revolving credit agreement (the credit agreement) with BNP Paribas Prime Brokerage Inc. (BNPP). (On July 15, 2009, the credit agreement was amended to reduce the maximum commitment to $405,000.000). The Fund pays a facility fee of 0.95% per annum on the unused portion of the credit agreement. The credit agreement has a 270-day rolling term that resets daily; however, if the Fund exceeds certain net asset value triggers, the credit agreement may convert to a 60-day rolling term that resets daily. The Fund is required to segregate portfolio securities as collateral in an amount up to two times the loan balance outstanding and has granted a security interest in the securities segregated to, and in favor of, BNPP as security for the loan balance outstanding. If the Fund fails to meet certain requirements, or maintain other financial covenants required under the credit agreement, the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the credit agreement necessitating the sale of portfolio securities at potentially inopportune times. The credit agreement also permits, subject to certain conditions, BNPP to re-hypothecate portfolio securities segregated by the Fund up to the amount of the loan balance outstanding. The Fund will receive a portion of the fees earned by BNPP in connection with the re-hypothecation of portfolio securities.

As of June 30, 2009, the Fund has outstanding borrowings of $143,000,000. During the six months ended June 30, 2009, the Fund borrowed an average daily balance of $80,425,478 at a weighted average borrowing cost of 1.42%.


38



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

Note 7. Derivative Investments:

The Fund has adopted the provisions of Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (FAS 161). This new standard requires funds to disclose information intended to enable financial statement users to understand how and why the Fund uses derivative instruments, how derivative instruments are accounted for under FAS 133 and how derivative instruments affect the company's financial position, results of operations, and cash flows. All changes to disclosure have been made in accordance with FAS 161 and incorporated for the current period as part of the Notes to Financial Statements.

Fair Values of Derivative Instruments as of June 30, 2009:

Statement of Assets and Liabilities  
    Assets   Liabilities  
Derivatives   Location   Fair Value   Location   Fair Value  
Interest Rate Swaps   Unrealized appreciation         Unrealized depreciation   $ 9,709,473    
Written Options               Payables     136,000    
Total                 $ 9,845,473    
Statement of Operations  

 

Derivatives   Location   Realized
Gain/(Loss)
  Change in Unrealized
Appreciation/
(Depreciation)
 
Interest Rate Swaps   Net Realized and Unrealized Gain (Loss)   $ (4,326,853 )   $ 6,344,173    
Written Options   Net Realized and Unrealized Gain (Loss)     1,417,029       63,400    
    Total   $ (2,909,824 )   $ 6,407,573    

 

Note 8. Other

In the normal course of business, the Fund enters into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote.


39



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)—(Continued)

Note 9. Merger

On June 10, 2009, the Board of Directors of the Fund and Cohen & Steers Select Utility Fund, Inc. ("UTF") approved a merger, subject to approval by the Fund's shareholders, in which the Fund would merge with and into UTF in accordance with Maryland General Corporation Law. If each fund's shareholders approve the merger, shareholders of the Fund would become shareholders of UTF. In connection with the merger, all of the Fund's assets and liabilities will be combined with UTF, and each shareholder of the Fund will receive a number of shares of UTF in exchange for their shares of the Fund having an aggregate net asset value equal to the aggregate net asset value of the Fund's shares held as of the close of business of the New York Stock Exchange on the closing date of the merger. The merger is subject to approval of the shareholders of each of the Fund and UTF and shareholders will vote separately on the merger. If shareholders approve the merger, the closing date of the merger is expected to be on or about December 18, 2009.

The Investment Manager may elect to consummate the merger at or prior to the closing date and will promptly notify Fund shareholders of any such change.

Merger related expenses, which will be borne by the Fund, are estimated to be approximately $300,000.

Note 10. Subsequent Event—Redemption of Preferred Shares

In May 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 165, Subsequent Events (FAS 165), effective for interim or annual periods ending after June 15, 2009. The FASB has established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued.

Note 5 discloses the subsequent AMPS redemptions which were announced on June 30 and Note 6 discloses the subsequent reduction of the Fund's line of credit. With regard to the Fund's financial statements, subsequent to June 30, 2009 and through August 18, 2009, there have been no recognized subsequent events (subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet) nor have there been any nonrecognized subsequent events (subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet but before the financial statements are issued or are available to be issued), except for those noted above.


40




COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

PROXY RESULTS (Unaudited)

Cohen & Steers REIT & Utility Income Fund shareholders voted on the following proposals at the annual meeting held on April 30, 2009. The description of each proposal and number of shares voted are as follows:

Common Shares

    Shares Voted
For
  Authority
Withheld
 
To elect Directors  
George Grossman     50,392,195       3,001,217    
Robert H. Steers     50,445,453       2,947,959    
C. Edward Ward, Jr.     50,568,803       2,824,609    

 


41



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

AVERAGE ANNUAL TOTAL RETURNS

(Periods ended June 30, 2009) (Unaudited)

Based on Net Asset Value   Based on Market Value  
One Year   Five Years   Since Inception
(1/30/04)
  One Year   Five Years   Since Inception
(1/30/04)
 
  –48.51 %     –4.35 %     –4.41 %     –52.44 %     –6.18 %     –8.48 %  

 

The performance data quoted represent past performance. Past performance is no guarantee of future results. The investment return will vary and the principal value of an investment will fluctuate and shares, if sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Performance results reflect the effect of leverage resulting from the issuance of preferred shares and borrowings under a credit agreement.

REINVESTMENT PLAN

We urge shareholders who want to take advantage of this plan and whose shares are held in 'Street Name' to consult your broker as soon as possible to determine if you must change registration into your own name to participate.

OTHER INFORMATION

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 800-330-7348, (ii) on our Web site at cohenandsteers.com or (iii) on the Securities and Exchange Commission's Web site at http://www.sec.gov. In addition, the Fund's proxy voting record for the most recent 12-month period ended June 30 is available (i) without charge, upon request, by calling 800-330-7348 or (ii) on the SEC's Web site at http://www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available (i) without charge, upon request by calling 800-330-7348, or (ii) on the SEC's Web site at http://www.sec.gov. In addition, the Forms N-Q may 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 800-SEC-0330.

Please note that the distributions paid by the Fund to shareholders are subject to recharacterization for tax purposes. The Fund may also pay distributions in excess of the Fund's net investment company taxable income and this excess would be a tax-free return of capital distributed from the Fund's assets. To the extent this occurs, the Fund's shareholders of record will be notified of the estimated amount of capital returned to shareholders for each such distribution and this information will also be available at cohenandsteers.com. The final tax treatment of all distributions is reported to shareholders on their 1099-DIV forms, which are mailed after the close of each calendar year. Distributions of capital decrease the Fund's total assets and, therefore, could have the effect of increasing the Fund's expense ratio. In addition, in order to make these distributions, the Fund may have to sell portfolio securities at a less than opportune time.


42



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

The Board of Directors, at its June 9-10, 2009 meeting, approved that the Fund may, but is not required to, use, without limit, various strategic transactions described below to seek to generate return, facilitate portfolio management and mitigate risks. Although the investment manager may seek to use these kinds of transactions to further the Fund's investment objectives, no assurance can be given that they will achieve this result. The Fund may enter into exchange-listed and over-the-counter put and call options on securities (including securities of investment companies and baskets of securities), indicies, and other financial instruments; purchase and sell financial futures contracts and options thereon; enter into various interest rate transactions, such as swaps, caps, floors or collars or credit transactions; equity index, total return and credit default swaps; forward contracts; and structured investments. In addition, the Fund may enter into various currency transactions, such as forward currency contracts, currency futures contracts, currency swaps or options on currency or currency futures. The Fund also may purchase and sell derivative instruments that combine features of these instruments. The Fund may invest in other types of derivatives, structured and similar instruments which are not currently available but which may be developed in the future. Collectively, all of the above are referred to as "Derivatives Transactions."

Derivatives Transactions can be highly volatile and involve various types and degrees of risk, depending upon the characteristics of the particular derivative, including the imperfect correlation between the value of such instruments and the underlying assets, the possible default of the other party to the transaction and illiquidity of the derivative instruments. Derivatives Transactions may entail investment exposures that are greater than their cost would suggest, meaning that a small investment in derivatives could have a large potential impact on the Fund's performance, effecting a form of investment leverage on the Fund's portfolio. In certain types of Derivatives Transactions the Fund could lose the entire amount of its investment; in other types of Derivatives Transactions the potential loss is theoretically unlimited.

The market for many derivatives is, or suddenly can become, illiquid. Changes in liquidity may result in significant, rapid and unpredictable changes in the prices for Derivatives Transactions. The Fund could experience losses if it were unable to liquidate its position because of an illiquid secondary market. Successful use of Derivatives Transactions also is subject to the ability of the investment manager to predict correctly movements in the direction of the relevant market and, to the extent the transaction is entered into for hedging purposes, to ascertain the appropriate correlation between the transaction being hedged and the price movements of the derivatives. Derivatives Transactions entered into to seek to manage the risks of the Fund's portfolio of securities may have the effect of limiting gains from otherwise favorable market movements. The use of Derivatives Transactions may result in losses greater than if they had not been used (and a loss on a Derivatives Transaction position may be larger than the gain in a portfolio position being hedged), may require the Fund to sell or purchase portfolio securities at inopportune times or for prices other than current market values, may limit the amount of appreciation the Fund can realize on an investment, or may cause the Fund to hold a security that it might otherwise sell. Amounts paid by the Fund as premiums and cash or other assets held as collateral with respect to Derivatives Transactions may not otherwise be available to the Fund for investment purposes.


43



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

The use of currency transactions can result in the Fund incurring losses as a result of the imposition of exchange controls, political developments, government intervention or failure to intervene, suspension of settlements or the inability of the Fund to deliver or receive a specified currency.

Structured notes and other related instruments carry risks similar to those of more traditional derivatives such as futures, forward and option contracts. However, structured instruments may entail a greater degree of market risk and volatility than other types of debt obligations.

The Fund will be subject to credit risk with respect to the counterparties to certain Derivatives Transactions entered into by the Fund. Derivatives may be purchased on established exchanges or through privately negotiated transactions referred to as over-the-counter ("OTC") derivatives. Exchange-traded derivatives generally are guaranteed by the clearing agency which is the issuer or counterparty to such derivatives. However, many futures exchanges and boards of trade limit the amount of fluctuation permitted in futures contract prices during a single trading day and once the daily limit has been reached in a particular contract no trades may be made that day at a price beyond that limit or trading may be suspended. There also is no assurance that sufficient trading interest to create a liquid secondary market on an exchange will exist at any particular time and no such secondary market may exist or may cease to exist. Each party to an OTC derivative bears the risk that the counterparty will default. OTC derivatives are less liquid than exchange-traded derivatives because the other party to the transaction may be the only investor with sufficient understanding of the derivative to be interested in bidding for it. If a counterparty becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the Fund may experience significant delays in obtaining any recovery under the derivative contract in bankruptcy or other reorganization proceeding. The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances.

The Fund will not be a commodity pool ( i.e. , a pooled investment vehicle which trades in commodity futures contracts and options thereon and the operator of which is registered with the Commodity Futures Trading Commission). In addition, the Fund has claimed an exclusion from the definition of commodity pool operator and, therefore, is not subject to registration or regulation as a pool operator under the Commodity Exchange Act.


44




COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

Meet the Cohen & Steers family of open-end funds:

C OHEN & S TEERS
G LOBAL R EALTY S HARES

  •  Designed for investors seeking total return, investing primarily in global real estate equity securities

  •  Symbols: CSFAX, CSFBX, CSFCX, CSSPX

C OHEN & S TEERS
I NSTITUTIONAL G LOBAL R EALTY S HARES

  •  Designed for institutional investors seeking total return, investing primarily in global real estate securities

  •  Symbol: GRSIX

C OHEN & S TEERS
R EALTY S HARES

  •  Designed for investors seeking total return, investing primarily in REITs

  •  Symbol: CSRSX

C OHEN & S TEERS
I NSTITUTIONAL R EALTY S HARES

  •  Designed for institutional investors seeking total return, investing primarily in REITs

  •  Symbol: CSRIX

C OHEN & S TEERS
R EALTY I NCOME F UND

  •  Designed for investors seeking maximum total return, investing primarily in real estate securities with an emphasis on both income and capital appreciation

  •  Symbols: CSEIX, CSBIX, CSCIX, CSDIX

C OHEN & S TEERS
I NTERNATIONAL R EALTY F UND

  •  Designed for investors seeking total return, investing primarily in international real estate securities

  •  Symbols: IRFAX, IRFCX, IRFIX

C OHEN & S TEERS
A SIA P ACIFIC R EALTY S HARES

  •  Designed for investors seeking total return, investing primarily in real estate securities located in the Asia Pacific region

  •  Symbols: APFAX, APFCX, APFIX

C OHEN & S TEERS
G LOBAL I NFRASTRUCTURE F UND

  •  Designed for investors seeking total return, investing primarily in global infrastructure securities

  •  Symbols: CSUAX, CSUBX, CSUCX, CSUIX

C OHEN & S TEERS
D IVIDEND V ALUE F UND

  •  Designed for investors seeking high current income and long-term growth of income and capital appreciation, investing primarily in dividend paying common stocks and preferred stocks

  •  Symbols: DVFAX, DVFCX, DVFIX

Please consider the investment objectives, risks, charges and expenses of the fund carefully before investing. A prospectus containing this and other information can be obtained by calling 800-330-7348 or by visiting cohenandsteers.com. Please read the prospectus carefully before investing.

Cohen & Steers Securities, LLC, Distributor


45



COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

OFFICERS AND DIRECTORS

Robert H. Steers
Director and co-chairman

Martin Cohen
Director and co-chairman

Bonnie Cohen
Director

George Grossman
Director

Richard E. Kroon
Director

Richard J. Norman
Director

Frank K. Ross
Director

Willard H. Smith Jr.
Director

C. Edward Ward, Jr.
Director

Adam M. Derechin
President and chief executive officer

Joseph M. Harvey
Vice president

William F. Scapell
Vice president

Robert S. Becker
Vice president

Thomas N. Bohjalian
Vice president

Yigal D. Jhirad
Vice president

Francis C. Poli
Secretary

James Giallanza
Treasurer and chief financial officer

Lisa D. Phelan
Chief compliance officer

KEY INFORMATION

Investment Manager

Cohen & Steers Capital Management, Inc.
280 Park Avenue
New York, NY 10017
(212) 832-3232

Fund Subadministrator and Custodian

State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111

Transfer Agent—Common Shares

The Bank of New York Mellon
480 Washington Boulevard
Jersey City, NJ 07310
(866) 227-0757

Legal Counsel

Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038

New York Stock Exchange Symbol: RTU

Web site: cohenandsteers.com

This report is for shareholder information. This is not a prospectus intended for use in the purchase or sale of Fund shares. Past performance is of course no guarantee of future results and your investment may be worth more or less at the time you sell.


46




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COHEN & STEERS

REIT AND UTILITY INCOME FUND

280 PARK AVENUE

NEW YORK, NY 10017

SEMIANNUAL REPORT

JUNE 30, 2009

RTUSAR




 

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. Schedule of Investments.

 

Included in Item 1 above.

 

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.

 

Not applicable.

 

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

None.

 

Item 10. Submission of Matters to a Vote of Security Holders.

 

None.

 

Item 11. Controls and Procedures.

 

(a)  The registrant’s principal executive officer and principal financial officer have concluded, based upon their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures provide reasonable assurance that material information required to be disclosed by the registrant in the report it files or submits on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms

 



 

and that such material information is accumulated and communicated to the registrant’s management, including its principal executive officer and principal financial officer, as appropriate, in order to allow timely decisions regarding required disclosure.

 

(b) There were no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12. Exhibits.

 

(a)(1)  Not applicable.

 

(a) (2)  Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.

 

(a)(3)  Not applicable.

 

(b) Certifications of principal executive officer and principal financial officer as required by Rule 30a- 2(b) under the Investment Company Act of 1940.

 



 

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.

 

COHEN & STEERS REIT AND UTILITY INCOME FUND, INC.

 

 

By:

/s/ Adam M. Derechin

 

 

Name: Adam M. Derechin

 

 

Title: President and Chief Executive Officer

 

 

 

 

Date: August 28, 2009

 

 

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:

/s/ Adam M. Derechin

 

 

Name: Adam M. Derechin

 

 

Title:   President and Chief Executive Officer

 

 

(principal executive officer)

 

 

 

 

By:

/s/ James Giallanza

 

 

Name: James Giallanza

 

 

Title:   Treasurer

 

 

(principal financial officer)

 

 

 

 

 

 

 

Date: August 28, 2009

 

 


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