N-CSRS 1 value.txt GABELLI VALUE FUND 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 811-05848 --------- The Gabelli Value Fund Inc. ------------------------------------------------------- (Exact name of registrant as specified in charter) One Corporate Center Rye, New York 10580-1422 ------------------------------------------------------- (Address of principal executive offices) (Zip code) Bruce N. Alpert Gabelli Funds, LLC One Corporate Center Rye, New York 10580-1422 ------------------------------------------------------- (Name and address of agent for service) registrant's telephone number, including area code: 1-800-422-3554 -------------- Date of fiscal year end: December 31, 2004 ----------------- Date of reporting period: June 30, 2004 ------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. THE GABELLI VALUE FUND INC. SEMI-ANNUAL REPORT JUNE 30, 2004 TO OUR SHAREHOLDERS, During the second quarter of 2004, the Gabelli Value Fund's (the "Fund") Class A shares declined 0.4%, while the Standard & Poor's ("S&P") 500 Index and the Dow Jones Industrial Average rose 1.7% and 1.3%, respectively. For the six-month period ended June 30, 2004, the Fund was up 2.5% versus gains of 3.4% and 0.9% for the S&P 500 Index and the Dow Jones Industrial Average, respectively. Enclosed are the financial statements and the investment portfolio as of June 30, 2004.
COMPARATIVE RESULTS -------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 2004 (A) ------------------------------------------------ YEAR TO SINCE QUARTER DATE 1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION (B) ----------------------------------------------------------------------------- Gabelli Value Fund Class A .......... (0.43)% 2.45% 19.90% 3.08% 3.63% 13.99% 13.13% (5.93)(c) (3.21)(c) 13.28(c) 1.14(c) 2.46(c) 13.35(c) 12.70(c) S&P 500 Index ....................... 1.72 3.44 19.10 (0.69) (2.20) 11.82 10.75 Dow Jones Industrial Average ........ 1.26 0.87 18.68 1.92 0.92 13.43 12.29 Nasdaq Composite Index .............. 2.69 2.22 26.19 (1.78) (5.28) 11.24 10.45 Class B ............................. (0.61) 2.12 19.07 2.30 2.95 13.62 12.88 (5.58)(d) (2.88)(d) 14.07(d) 1.33(d) 2.77(d) 13.62(d) 12.88(d) Class C ............................. (0.61) 2.06 19.05 2.31 3.00 13.65 12.90 (1.61)(d) 1.06(d) 18.05(d) 2.31(d) 3.00(d) 13.65(d) 12.90(d)
(a) Returns represent past performance and do not guarantee future results. Total returns and average annual returns reflect changes in share price and reinvestment of dividends and are net of expenses. Investment returns and the principal value of an investment will fluctuate. When shares are redeemed, they may be worth more or less than their original cost. The Dow Jones Industrial Average is an unmanaged index of 30 large industrial stocks. The S&P 500 Index and the Nasdaq Composite Index are unmanaged indicators of stock market performance. Dividends are considered reinvested (except for the Nasdaq Composite Index). Current performance may be lower or higher than the data presented. Visit www.gabelli.com for performance information as of the most recent month-end. Investors should consider the investment objectives, risks and charges and expenses of the Fund before investing. The prospectus contains more complete information about this and other matters and should be read carefully before investing. Performance for periods less than one year is not annualized. The Class A Shares' net asset values are used to calculate performance for the periods prior to the issuance of Class B Shares and Class C Shares on March 15, 2000. The actual performance for the Class B Shares and Class C Shares would have been lower for periods starting prior to March 15, 2000 due to the additional expenses associated with these classes of shares. (b) Performance is calculated from inception of Class A Shares on September 29, 1989. (c) Includes the effect of the maximum 5.5% sales charge at the beginning of the period. (d) Includes the effect of the applicable contingent deferred sales charge at the end of the period shown for Class B and Class C Shares, respectively. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- We have separated the portfolio manager's commentary from the financial statements and investment portfolio due to new corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the content of the portfolio manager's commentary is unrestricted. The financial statements and investment portfolio are mailed separately. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- A description of the Fund's proxy voting policies and procedures and how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, 2004 are available (i) without charge, upon request, by calling 800-GABELLI (800-422-3554); (ii) by writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; and (iii) on the Securities and Exchange Commission's website at www.sec.gov. -------------------------------------------------------------------------------- THE GABELLI VALUE FUND INC. PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 (UNAUDITED) -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- COMMON STOCKS -- 98.0% AEROSPACE -- 0.7% 14,000 Lockheed Martin Corp. ........... $ 340,200 $ 729,120 146,000 Northrop Grumman Corp. .......... 6,860,048 7,840,200 ------------ -------------- 7,200,248 8,569,320 ------------ -------------- AGRICULTURE -- 1.4% 60,000 Agrium Inc. ..................... 785,099 873,000 1,000,000 Archer-Daniels-Midland Co. ...... 12,048,392 16,780,000 20,000 Terra Industries Inc.+ .......... 114,059 112,600 ------------ -------------- 12,947,550 17,765,600 ------------ -------------- AUTOMOTIVE: PARTS AND ACCESSORIES -- 5.4% 38,000 China Yuchai International Ltd. . 300,576 692,360 1,100,000 Dana Corp. ...................... 19,003,327 21,560,000 750,000 GenCorp Inc. .................... 7,790,788 10,042,500 190,000 Genuine Parts Co. ............... 4,329,694 7,539,200 210,000 Modine Manufacturing Co. ........ 6,159,377 6,688,500 580,000 Navistar International Corp.+ ... 15,671,185 22,480,800 ------------ -------------- 53,254,947 69,003,360 ------------ -------------- AVIATION: PARTS AND SERVICES -- 0.7% 14,000 Barnes Group Inc. ............... 246,529 405,720 22,000 Curtiss-Wright Corp., Cl. B ..... 555,441 1,182,940 370,000 Fairchild Corp., Cl. A+ ......... 3,153,085 1,583,600 72,000 Sequa Corp., Cl. A+ ............. 2,608,934 4,209,840 32,000 Sequa Corp., Cl. B+ ............. 1,613,493 1,912,000 ------------ -------------- 8,177,482 9,294,100 ------------ -------------- BROADCASTING -- 2.9% 187,000 Gray Television Inc. ............ 2,617,453 2,597,430 705,000 Liberty Corp. ................... 30,557,683 33,099,750 225,000 Paxson Communications Corp.+ ........................ 1,825,880 731,250 85,000 Young Broadcasting Inc., Cl. A+ ........................ 1,438,870 1,117,750 ------------ -------------- 36,439,886 37,546,180 ------------ -------------- BUSINESS SERVICES -- 1.3% 630,000 Cendant Corp. ................... 5,900,670 15,422,400 17,800 ChoicePoint Inc.+ ............... 605,878 812,748 20,000 Nashua Corp.+ ................... 150,409 193,800 12,000 National Processing Inc.+ ....... 129,035 345,000 ------------ -------------- 6,785,992 16,773,948 ------------ -------------- CABLE AND SATELLITE -- 6.0% 140,000 Adelphia Communications Corp., Cl. A+ ................. 152,325 70,000 2,700,000 Cablevision Systems Corp., Cl. A+ ........................ 32,449,844 53,055,000 80,000 Charter Communications Inc., Cl. A+ ........................ 355,504 313,600 MARKET SHARES COST VALUE ------ ---- ------- 350,000 Comcast Corp., Cl. A+ ........... $ 9,205,646 $ 9,810,500 310,000 DIRECTV Group Inc.+ .............. 5,922,813 5,301,000 216,000 Liberty Media International Inc., Cl. A+ ......................... 7,040,712 8,013,600 ------------ -------------- 55,126,844 76,563,700 ------------ -------------- COMMUNICATIONS EQUIPMENT -- 3.8% 500,000 Agere Systems Inc., Cl. B+ ...... 1,648,777 1,075,000 580,000 Corning Inc.+ ................... 4,438,968 7,574,800 880,000 Lucent Technologies Inc.+ ....... 4,061,581 3,326,400 720,000 Motorola Inc. ................... 9,034,896 13,140,000 850,000 Nortel Networks Corp.+ .......... 4,304,581 4,241,500 40,000 Scientific-Atlanta Inc. ......... 370,950 1,380,000 650,000 Thomas & Betts Corp. ............ 13,021,825 17,699,500 ------------ -------------- 36,881,578 48,437,200 ------------ -------------- CONSUMER PRODUCTS -- 3.6% 300,000 Energizer Holdings Inc.+ ........ 6,131,565 13,500,000 90,000 Gallaher Group plc, ADR ......... 2,147,905 4,356,000 120,000 Gillette Co. .................... 3,335,739 5,088,000 500 Givaudan SA ..................... 135,440 289,444 185,000 Hartmarx Corp.+ ................. 994,781 1,165,500 38,000 National Presto Industries Inc. . 1,227,695 1,566,740 230,000 Pactiv Corp.+ ................... 2,257,847 5,736,200 909,000 Swedish Match AB ................ 9,445,940 9,291,579 200,000 Wolverine World Wide Inc. ....... 2,551,617 5,250,000 ------------ -------------- 28,228,529 46,243,463 ------------ -------------- CONSUMER SERVICES -- 0.6% 325,000 Rollins Inc. .................... 3,673,368 7,478,250 ------------ -------------- DIVERSIFIED INDUSTRIAL -- 3.2% 50,000 Ampco-Pittsburgh Corp. .......... 250,017 643,000 160,000 Cooper Industries Ltd., Cl. A ... 6,776,215 9,505,600 190,000 Crane Co. ....................... 4,845,766 5,964,100 50,000 Harbor Global Co. Ltd.+ ......... 133,471 475,000 510,000 Honeywell International Inc. .... 16,653,823 18,681,300 30,000 ITT Industries Inc. ............. 1,264,376 2,490,000 244,000 Katy Industries Inc.+ ........... 2,125,720 1,193,160 100,100 Lamson & Sessions Co.+ .......... 661,387 804,804 100,000 Walter Industries Inc. .......... 1,295,675 1,362,000 76,500 WHX Corp.+ ...................... 361,030 123,930 ------------ -------------- 34,367,480 41,242,894 ------------ -------------- ELECTRONICS -- 0.7% 225,000 Texas Instruments Inc. .......... 5,908,377 5,440,500 100,000 Thermo Electron Corp.+ .......... 1,920,038 3,074,000 5,000 Tyco International Ltd. ......... 58,996 165,700 ------------ -------------- 7,887,411 8,680,200 ------------ -------------- See accompanying notes to financial statements. 2 THE GABELLI VALUE FUND INC. PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 2004 (UNAUDITED) -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- COMMON STOCKS (CONTINUED) ENERGY AND UTILITIES -- 2.0% 110,000 Allegheny Energy Inc.+ .......... $ 1,358,860 $ 1,695,100 100,000 ConocoPhillips .................. 5,564,478 7,629,000 80,000 Kerr-McGee Corp. ................ 3,972,878 4,301,600 250,000 Mirant Corp.+ ................... 398,300 89,750 110,000 NiSource Inc. (SAILS)+ .......... 220,000 277,200 400,000 Northeast Utilities ............. 7,495,890 7,788,000 160,000 Southwest Gas Corp. ............. 3,115,980 3,860,800 ------------ -------------- 22,126,386 25,641,450 ------------ -------------- ENTERTAINMENT -- 16.8% 60,000 Dover Motorsports Inc. .......... 309,314 240,000 100,000 Fox Entertainment Group Inc., Cl. A+ .................. 2,911,603 2,670,000 214,000 GC Companies Inc.+ .............. 233,260 117,700 950,000 Gemstar-TV Guide International Inc.+ ........... 5,575,221 4,560,000 155,000 Grupo Televisa SA, ADR .......... 5,171,981 7,016,850 300,000 InterActiveCorp.+ ............... 5,630,992 9,042,000 4,320,000 Liberty Media Corp., Cl. A+ ..... 34,375,242 38,836,800 200,000 Metro-Goldwyn-Mayer Inc.+ ....... 476,546 2,420,000 220,000 The Walt Disney Co. ............. 4,669,420 5,607,800 1,400,000 Time Warner Inc.+ ............... 21,018,581 24,612,000 2,680,000 Viacom Inc., Cl. A .............. 61,156,126 97,418,000 800,000 Vivendi Universal SA, ADR+ ...... 14,729,992 22,320,000 43,000 World Wrestling Entertainment Inc. ............ 460,533 548,250 ------------ -------------- 156,718,811 215,409,400 ------------ -------------- ENVIRONMENTAL SERVICES -- 1.9% 100,000 Allied Waste Industries Inc.+ ... 891,239 1,318,000 260,000 Republic Services Inc. .......... 4,733,105 7,524,400 500,000 Waste Management Inc. ........... 11,148,000 15,325,000 ------------ -------------- 16,772,344 24,167,400 ------------ -------------- EQUIPMENT AND SUPPLIES -- 2.1% 210,000 CIRCOR International Inc. ....... 2,325,092 4,281,900 330,000 Flowserve Corp.+ ................ 5,233,003 8,230,200 115,000 Gerber Scientific Inc.+ ......... 803,697 811,900 250,000 GrafTech International Ltd.+ .... 3,211,823 2,615,000 21,500 SL Industries Inc.+ ............. 155,870 236,715 390,000 Watts Water Technologies Inc., Cl. A ................... 4,932,328 10,510,500 ------------ -------------- 16,661,813 26,686,215 ------------ -------------- FINANCIAL SERVICES -- 2.4% 500,000 American Express Co. ............ 17,953,972 25,690,000 30,000 Deutsche Bank AG, ADR ........... 1,777,647 2,373,300 30,000 Janus Capital Group Inc. ........ 481,500 494,700 160,000 Phoenix Companies Inc. .......... 1,993,978 1,960,000 ------------ -------------- 22,207,097 30,518,000 ------------ -------------- MARKET SHARES COST VALUE ------ ---- ------- FOOD AND BEVERAGE -- 6.5% 200,000 Corn Products International Inc. ............ $ 5,078,702 $ 9,310,000 210,000 Del Monte Foods Co.+ ............ 1,611,227 2,133,600 220,000 Diageo plc, ADR ................. 8,443,826 12,045,000 475,000 Flowers Foods Inc. .............. 4,505,669 12,421,250 90,000 Fomento Economico Mexicano SA de CV, ADR ........ 3,214,381 4,125,600 250,000 Heinz (H.J.) Co. ................ 8,864,372 9,800,000 2,000 Hershey Foods Corp. ............. 62,981 92,540 130,000 Kerry Group plc, Cl. A .......... 1,478,133 2,752,061 1,255,000 PepsiAmericas Inc. .............. 17,812,065 26,656,200 57,000 Wrigley (Wm.) Jr. Co. ........... 3,283,100 3,593,850 ------------ -------------- 54,354,456 82,930,101 ------------ -------------- HEALTH CARE -- 0.7% 105,000 IVAX Corp.+ ..................... 1,230,304 2,518,950 60,000 Sola International Inc.+ ........ 676,114 1,033,800 150,000 Sorin SpA+ ...................... 481,830 386,894 180,000 Sybron Dental Specialties Inc.+ ............. 3,316,577 5,373,000 ------------ -------------- 5,704,825 9,312,644 ------------ -------------- HOTELS AND GAMING -- 4.9% 502,000 Aztar Corp.+ .................... 4,149,742 14,056,000 84,000 Dover Downs Gaming & Entertainment Inc. ............ 923,046 945,000 250,000 Gaylord Entertainment Co.+ ...... 7,044,146 7,847,500 4,100,000 Hilton Group plc ................ 15,400,670 20,521,555 900,000 Hilton Hotels Corp. ............. 8,639,328 16,794,000 15,000 Mandalay Resort Group ........... 1,021,950 1,029,600 45,000 MGM Mirage+ ..................... 2,024,150 2,112,300 ------------ -------------- 39,203,032 63,305,955 ------------ -------------- MACHINERY -- 0.8% 105,000 AGCO Corp.+ ..................... 1,865,268 2,138,850 125,000 CNH Global NV ................... 2,411,354 2,580,000 75,000 Deere & Co. ..................... 2,630,653 5,260,500 ------------ -------------- 6,907,275 9,979,350 ------------ -------------- MANUFACTURED HOUSING -- 0.4% 570,000 Champion Enterprises Inc.+ ...... 5,787,127 5,232,600 ------------ -------------- METALS AND MINING -- 2.3% 320,000 Barrick Gold Corp. .............. 2,998,415 6,320,000 124,000 Kinross Gold Corp.+ ............. 1,145,502 689,440 475,000 Newmont Mining Corp. ............ 9,096,081 18,411,000 215,000 Placer Dome Inc. ................ 2,020,399 3,577,600 ------------ -------------- 15,260,397 28,998,040 ------------ -------------- See accompanying notes to financial statements. 3 THE GABELLI VALUE FUND INC. PORTFOLIO OF INVESTMENTS (CONTINUED) -- JUNE 30, 2004 (UNAUDITED) -------------------------------------------------------------------------------- MARKET SHARES COST VALUE ------ ---- ------- COMMON STOCKS (CONTINUED) PUBLISHING -- 10.7% 200,000 Belo Corp., Cl. A ............... $ 3,460,783 $ 5,370,000 1,340,000 Media General Inc., Cl. A ....... 26,344,400 86,054,800 90,000 Meredith Corp. .................. 1,800,032 4,946,400 500,000 PRIMEDIA Inc.+ .................. 1,617,826 1,390,000 440,000 Reader's Digest Association Inc. .............. 7,455,513 7,035,600 159,000 Scripps (E.W.) Co., Cl. A ....... 10,505,258 16,695,000 340,000 Tribune Co. ..................... 14,154,575 15,483,600 ------------ -------------- 65,338,387 136,975,400 ------------ -------------- REAL ESTATE -- 0.3% 133,100 Griffin Land & Nurseries Inc.+ .. 1,541,344 3,383,402 ------------ -------------- RETAIL -- 2.8% 100,000 Albertson's Inc. ................ 2,376,333 2,654,000 768,000 AutoNation Inc.+ ................ 6,029,450 13,132,800 1,000 Blockbuster Inc., Cl. A ......... 12,700 15,180 20,000 Burlington Coat Factory Warehouse Corp. ............... 299,506 386,000 130,000 Ingles Markets Inc., Cl. A ...... 1,562,910 1,452,100 255,000 Neiman Marcus Group Inc., Cl. B ......................... 6,720,675 13,231,950 180,000 Safeway Inc.+ ................... 4,127,330 4,561,200 ------------ -------------- 21,128,904 35,433,230 ------------ -------------- SPECIALTY CHEMICALS -- 1.3% 185,000 Ferro Corp. ..................... 3,958,196 4,935,800 840,000 Hercules Inc.+ .................. 12,885,449 10,239,600 50,000 IMC Global Inc. ................. 630,693 670,000 40,900 Sensient Technologies Corp. ..... 843,985 878,532 ------------ -------------- 18,318,323 16,723,932 ------------ -------------- TELECOMMUNICATIONS -- 4.9% 300,000 AT&T Corp. ...................... 8,381,314 4,389,000 100,000 CenturyTel Inc. ................. 3,067,483 3,004,000 1,200,000 Cincinnati Bell Inc.+ ........... 7,305,517 5,328,000 190,000 Commonwealth Telephone Enterprises Inc.+ ............. 4,043,377 8,506,300 2,050,000 Qwest Communications International Inc.+ ........... 6,264,165 7,359,500 195,000 Rogers Communications Inc., Cl. B ......................... 3,249,017 3,535,350 1,600,000 Sprint Corp. .................... 25,320,928 28,160,000 85,000 Verizon Communications Inc. ..... 3,151,121 3,076,150 ------------ -------------- 60,782,922 63,358,300 ------------ -------------- TRANSPORTATION-- 0.0% 90,000 Grupo TMM SA de CV, Cl. A, ADR+ .......................... 756,540 220,500 ------------ -------------- MARKET SHARES COST VALUE ------ ---- ------- WIRELESS COMMUNICATIONS -- 6.9% 1,850,000 AT&T Wireless Services Inc.+ ................ $ 18,600,268 $ 26,492,000 400,000 Nextel Communications Inc., Cl. A+ ........................ 5,990,260 10,664,000 240,000 Rogers Wireless Communications Inc., Cl. B+ ........................ 3,351,277 6,492,000 1,200,000 Telecom Italia Mobile SpA 8,333,209 6,803,499 540,000 Telephone & Data Systems Inc. .................. 23,101,052 38,448,000 ------------ -------------- 59,376,066 88,899,499 ------------ -------------- TOTAL COMMON STOCKS ............. 879,917,364 1,254,773,633 ------------ -------------- PREFERRED STOCKS -- 1.3% PUBLISHING -- 1.3% 495,384 News Corp. Ltd., Pfd., ADR ...... 14,859,194 16,288,226 ------------ -------------- PRINCIPAL AMOUNT ------ REPURCHASE AGREEMENTS -- 0.8% $10,130,000 State Street Bank and Trust Co., 1.180%, dated 06/30/04, due 07/01/04, proceeds at maturity, $10,130,332 (a) ..... 10,130,000 10,130,000 ------------ -------------- TOTAL INVESTMENTS -- 100.1% ........................ $904,906,558 1,281,191,859 ============ OTHER ASSETS AND LIABILITIES (NET) -- (0.1)% ... (1,450,914) -------------- NET ASSETS -- 100.0% ........................... $1,279,740,945 ============== ---------------- For Federal tax purposes: Aggregate cost ................................. $ 904,906,558 ============== Gross unrealized appreciation .................. $ 398,267,002 Gross unrealized depreciation .................. (21,981,701) -------------- Net unrealized appreciation/(depreciation) ..... $ 376,285,301 ============== ---------------- (a) Collateralized by U.S. Treasury Note, 1.750%, due 12/31/04, market value $10,333,387. + Non-income producing security. ADR - American Depository Receipt. SAILS - Stock Appreciation Income Linked Securities. See accompanying notes to financial statements. 4 THE GABELLI VALUE FUND INC. STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 2004 (UNAUDITED) -------------------------------------------------------------------------------- ASSETS: Investments, at value (cost $878,562,158) . $1,195,137,059 Investments in affiliates, at value (cost $26,344,400) ...................... 86,054,800 Receivable for investments sold ........... 1,477,747 Dividends and interest receivable ......... 1,337,634 Receivable for Fund shares sold ........... 389,817 Other assets .............................. 21,095 -------------- TOTAL ASSETS .............................. 1,284,418,152 -------------- LIABILITIES: Due to Custodian .......................... 12,393 Payable for Fund shares redeemed .......... 473,825 Payable for investments purchased ......... 2,061,343 Payable for investment advisory fees ...... 1,053,128 Payable for distribution fees ............. 288,138 Payable for shareholder services fees ..... 532,465 Payable for shareholder communication fees 140,235 Other accrued expenses .................... 115,680 -------------- TOTAL LIABILITIES ......................... 4,677,207 -------------- NET ASSETS applicable to 69,563,616 shares outstanding ...................... $1,279,740,945 ============== NET ASSETS CONSIST OF: Capital stock, at $0.001 par value ........ $ 69,564 Additional paid-in capital ................ 896,776,413 Accumulated net investment income ......... 649,855 Accumulated net realized gain on .......... investments, foreign currency and ....... short sale transactions ................. 5,953,970 Net unrealized appreciation on investments and foreign currency transactions ....... 376,291,143 -------------- NET ASSETS ................................ $1,279,740,945 ============== SHARES OF CAPITAL STOCK: CLASS A: Net asset value and redemption price per share ($1,243,260,218 / 67,519,048 shares outstanding; 150,000,000 shares authorized of $0.001 par value) .................... $18.41 ====== Maximum sales charge ...................... 5.50% ====== Maximum offering price per share (NAV / 0.945, based on maximum sales charge of 5.50% of the offering price at June 30, 2004) .......................... $19.48 ====== CLASS B: Net asset value and offering price per share ($21,290,409 / 1,193,646 shares outstanding; 100,000,000 shares authorized of $0.001 par value) ......... $17.84(a) ====== CLASS C: Net asset value and offering price per share ($15,190,318 / 850,922 shares outstanding; 50,000,000 shares authorized of $0.001 par value) .................... $17.85(a) ====== -------------------- (a) Redemption price varies based on length of time held. STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2004 (UNAUDITED) -------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends (net of foreign taxes of $128,608) . $ 9,621,184 Interest ..................................... 207,604 ----------- TOTAL INVESTMENT INCOME ...................... 9,828,788 ----------- EXPENSES: Investment advisory fees ..................... 6,486,369 Distribution fees -- Class A ................. 1,576,995 Distribution fees -- Class B ................. 99,845 Distribution fees -- Class C ................. 78,545 Shareholder services fees .................... 569,843 Shareholder communications expenses .......... 110,205 Custodian fees ............................... 77,894 Legal and audit fees ......................... 50,613 Directors' fees .............................. 41,988 Registration fees ............................ 25,572 Miscellaneous expenses ....................... 61,648 ----------- TOTAL EXPENSES ............................... 9,179,517 ----------- Less: Custodian Fee Credit ................... (584) ----------- Net Expenses ................................. 9,178,933 ----------- NET INVESTMENT INCOME ........................ 649,855 ----------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS, FOREIGN CURRENCY TRANSACTIONS AND SECURITIES SOLD SHORT TRANSACTIONS: Net realized gain on investments and short sale transactions .......................... 13,671,428 Net realized loss on foreign currency transactions ............................... (72) Net change in unrealized appreciation on investments, foreign currency and short sale transactions .......................... 17,175,893 ----------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS, FOREIGN CURRENCY AND SHORT SALE TRANSACTIONS .................... 30,847,249 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................ $31,497,104 =========== See accompanying notes to financial statements. 5 THE GABELLI VALUE FUND INC. STATEMENT OF CHANGES IN NET ASSETS --------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2004 YEAR ENDED (UNAUDITED) DECEMBER 31, 2003 ---------------- ----------------- OPERATIONS: Net investment income/(loss). ............................................. $ 649,855 $ (4,069,919) Net realized gain on investments, foreign currency and short sale transactions ....................................................... 13,671,356 21,249,781 Net change in unrealized appreciation/(depreciation) of investments, foreign currency and short sale transactions ............................ 17,175,893 299,457,722 -------------- -------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...................... 31,497,104 316,637,584 -------------- -------------- DISTRIBUTIONS TO SHAREHOLDERS: Net realized gain on investments Class A ................................................................. -- (16,651,715) Class B ................................................................. -- (245,625) Class C ................................................................. -- (204,547) -------------- -------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS ....................................... -- (17,101,887) -------------- -------------- CAPITAL SHARE TRANSACTIONS Class A ................................................................. (43,285,659) (61,554,611) Class B ................................................................. 2,899,034 3,751,819 Class C ................................................................. (70,114) 3,944,812 -------------- -------------- Net decrease in net assets from capital share transactions ................ (40,456,739) (53,857,980) -------------- -------------- NET INCREASE/(DECREASE) IN NET ASSETS ..................................... (8,959,635) 245,677,717 -------------- -------------- NET ASSETS: Beginning of period ....................................................... 1,288,700,580 1,043,022,863 -------------- -------------- End of period (including undistributed net investment income of $649,855 and $0, respectively) .......................................... $1,279,740,945 $1,288,700,580 ============== ==============
See accompanying notes to financial statements. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -------------------------------------------------------------------------------- 1. ORGANIZATION. The Gabelli Value Fund Inc. (the "Fund") was organized on July 20, 1989 as a Maryland corporation. The Fund is a non-diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund's primary objective is long term capital appreciation. The Fund commenced investment operations on September 29, 1989. 2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. SECURITY VALUATION. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market's official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the "Board") so determines, by such other method as the Board shall determine in good faith, to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by Gabelli Funds, LLC (the "Adviser"). 6 THE GABELLI VALUE FUND INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) -------------------------------------------------------------------------------- Portfolio securities primarily traded on foreign markets are generally valued at the preceding closing values of such securities on their respective exchanges or if after the close, market conditions change significantly, certain foreign securities may be fair valued pursuant to procedures established by the Board. Debt instruments that are not credit impaired with remaining maturities of 60 days or less are valued at amortized cost, unless the Board determines such does not reflect the securities' fair value, in which case these securities will be valued at their fair value as determined by the Board. Debt instruments having a maturity greater than 60 days for which market quotations are readily available are valued at the latest average of the bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. Futures contracts are valued at the official closing settlement price of the exchange or board of trade on which the applicable contract is traded. Securities and assets for which market quotations are not readily available are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons to the valuation and changes in valuation of similar securities, including a comparison of foreign securities to the equivalent U.S. dollar value ADR securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security. REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with primary government securities dealers recognized by the Federal Reserve Board, with member banks of the Federal Reserve System or with other brokers or dealers that meet credit guidelines established by the Adviser and reviewed by the Board. Under the terms of a typical repurchase agreement, the Fund takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the Fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the Fund's holding period. The Fund will always receive and maintain securities as collateral whose market value, including accrued interest, will be at least equal to 102% of the dollar amount invested by the Fund in each agreement. The Fund will make payment for such securities only upon physical delivery or upon evidence of book entry transfer of the collateral to the account of the custodian. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to maintain the adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited. OPTIONS. The Fund may purchase or write call or put options on securities or indices. As a writer of call options, the Fund receives a premium at the outset and then bears the risk of unfavorable changes in the price of the financial instrument underlying the option. The Fund would incur a loss if the price of the underlying financial instrument increases between the date the option is written and the date on which the option is terminated. The Fund would realize a gain, to the extent of the premium, if the price of the financial instrument decreases between those dates. As a purchaser of put options, the Fund pays a premium for the right to sell to the seller of the put option the underlying security at a specified price. The seller of the put has the obligation to purchase the underlying security upon exercise at the exercise price. If the price of the underlying security declines, the Fund would realize a gain upon sale or exercise. If the price of the underlying security increases, the Fund would realize a loss upon sale or at expiration date, but only to the extent of the premium paid. At June 30, 2004, there were no open positions. FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose of hedging against changes in the value of its portfolio securities and in the value of securities it intends to purchase. Upon entering into a futures contract, the Fund is required to deposit with the broker an amount of cash or cash equivalents equal 7 THE GABELLI VALUE FUND INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) -------------------------------------------------------------------------------- to a certain percentage of the contract amount. This is known as the "initial margin." Subsequent payments ("variation margin") are made or received by the Fund each day, depending on the daily fluctuation of the value of the contract. The daily changes in the contract are included in unrealized gains or losses. The Fund recognizes a realized gain or loss when the contract is closed. There are several risks in connection with the use of futures contracts as a hedging device. The change in value of futures contracts primarily corresponds with the value of their underlying instruments, which may not correlate with the change in value of the hedged investments. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market. SECURITIES SOLD SHORT. The Fund may make short sales. A short sale involves selling a security which the Fund does not own. The proceeds received for short sales are recorded as liabilities and the Fund records an unrealized gain or loss to the extent of the difference between the proceeds received and the value of the open short position on the day of determination. The Fund records a realized gain or loss when the short position is closed out. By entering into a short sale, the Fund bears the market risk of an unfavorable change in the price of the security sold short. Dividends on short sales are recorded as an expense by the Fund on the ex-dividend date. FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained in United States (U.S.) dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the exchange rates prevailing at the end of the period, and purchases and sales of investment securities, income and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses, which result from changes in foreign exchange rates and/or changes in market prices of securities, have been included in unrealized appreciation/depreciation on investments and foreign currency transactions. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, foreign currency transactions and the difference between the amounts of interest and dividends recorded on the books of the Fund and the amounts actually received. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial trade date and subsequent sale trade date is included in realized gain/(loss) on investments. SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are accounted for on the trade date with realized gain or loss on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded as earned. Dividend income is recorded on the ex-dividend date. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments of income and gains on various investment securities held by the Fund, timing differences and differing characterization of distributions made by the Fund. For the year ended December 31, 2003, reclassifications were made to decrease accumulated net investment loss for $4,069,919 and increase accumulated net realized loss on investments for $3,484,538, with an offsetting adjustment to additional paid-in capital. The tax character of distributions paid during the fiscal year ended December 31, 2003 was as follows: YEAR ENDED DECEMBER 31, 2003 ---------------- DISTRIBUTIONS PAID FROM: Net long term capital gains ......... $17,101,887 ----------- Total Distributions paid ............ $17,101,887 =========== 8 THE GABELLI VALUE FUND INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) -------------------------------------------------------------------------------- EXPENSES. Certain administrative expenses are common to, and allocated among the Classes of Shares. Such allocations are made on the basis of average net assets or other criteria directly affecting the expenses as determined by the Adviser pursuant to procedures established by the Board. PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). It is the Fund's policy to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for Federal income taxes is required. Dividends and interest from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes at rates ranging up to 30%. Such withholding taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties, and the Fund intends to undertake any procedural steps required to claim the benefits of such treaties. As of December 31, 2003, the components of accumulated earnings/(losses) on a tax basis were as follows: Net unrealized appreciation ........ $351,397,664 ------------ Total accumulated gain ............. $351,397,664 ============ DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. In calculating net asset value per share of each class, investment income, realized and unrealized gains and losses and expenses other than class specific expenses, are allocated daily to each class of shares based upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are solely borne by the class incurring the expense. 3. INVESTMENT ADVISORY AGREEMENT. The Fund has entered into an investment advisory agreement (the "Advisory Agreement") with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of the Fund's average daily net assets. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund's portfolio, oversees the administration of all aspects of the Fund's business and affairs and pays the compensation of all Officers and Directors of the Fund who are its affiliates. 4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the "Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act. Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of the Adviser, serves as distributor of the Fund. Under the Class A, B and C Share Plans, payments are authorized to Gabelli & Company at annual rates of 0.25%, 1.00% and 1.00%, respectively, of the average daily net assets of those Classes, the annual limitations under each Plan. Such payments are accrued daily and paid monthly. 5. PORTFOLIO SECURITIES. Purchases and sales of securities for the six months ended June 30, 2004, other than short-term securities, aggregated $86,756,465 and $90,598,323, respectively. 6. TRANSACTIONS WITH AFFILIATES. During the six months ended June 30, 2004, the Fund paid brokerage commissions of $286,830 to Gabelli & Company. During the six months ended June 30, 2004, Gabelli & Company received $178,211 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares. The cost of calculating the Fund's net asset value per share is a Fund expense pursuant to the Advisory Agreement. During the six months ended June 30, 2004, the Fund reimbursed the Adviser $17,400 in connection with the cost of computing the Fund's net asset value, which is included in miscellaneous expenses in the Statement of Operations. 9 THE GABELLI VALUE FUND INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) -------------------------------------------------------------------------------- 7. CAPITAL STOCK TRANSACTIONS. The Fund offers three classes of shares -- Class A Shares, Class B Shares, and Class C Shares. Class A Shares are subject to a maximum front-end sales charge of 5.50%. Class B Shares are subject to a contingent deferred sales charge ("CDSC") upon redemption within six years of purchase. The applicable CDSC is equal to a declining percentage of the lesser of the net asset value per share at the date of original purchase or at the date of redemption, based on the length of time held. Class C Shares are subject to a 1% CDSC for two years after purchase (one year beginning May 1, 2004). Transactions in shares of capital stock were as follows:
SIX MONTHS ENDED JUNE 30, 2004 YEAR ENDED (UNAUDITED) DECEMBER 31, 2003 -------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------- ----------- ------------ CLASS AAA CLASS AAA -------------------------- --------------------------- Shares sold ....................................... 3,644,576 $ 67,255,899 9,723,938 $ 147,718,210 Shares issued upon reinvestment of distributions .. -- -- 847,940 15,220,497 Shares redeemed ................................... (6,002,051) (110,541,558) (14,881,121) (224,493,318) ---------- ------------- ----------- ------------- Net decrease .................................. (2,357,475) $ (43,285,659) (4,309,243) $ (61,554,611) ========== ============= =========== ============= CLASS B CLASS B -------------------------- --------------------------- Shares sold ....................................... 231,014 $ 4,157,637 479,608 $ 6,891,727 Shares issued upon reinvestment of distributions .. -- -- 11,799 205,899 Shares redeemed ................................... (71,031) (1,258,603) (233,047) (3,345,807) ---------- ------------- ----------- ------------- Net increase .................................. 159,983 $ 2,899,034 258,360 $ 3,751,819 ========== ============= =========== ============= CLASS C CLASS C -------------------------- --------------------------- Shares sold ....................................... 229,689 $ 4,100,401 421,522 $ 6,325,244 Shares issued upon reinvestment of distributions .. -- -- 8,867 154,902 Shares redeemed ................................... (235,060) (4,170,515) (170,497) (2,535,334) ---------- ------------- ----------- ------------- Net increase/(decrease) ....................... (5,371) $ (70,114) 259,892 $ 3,944,812 ========== ============= =========== =============
8. OTHER MATTERS. On October 7, 2003, the Fund's Adviser received a subpoena from the Attorney General of the State of New York requesting information on mutual fund shares trading practices. The Adviser has also received requests for information from the SEC regarding mutual fund trading practices and valuation of portfolio securities. The Adviser has responded to the requests. The Fund does not believe that these matters will have a material adverse effect on the Fund's financial position or the results of its operations. 9. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. 10 THE GABELLI VALUE FUND INC. FINANCIAL HIGHLIGHTS --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding throughout each period: INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS --------------------------------------- ---------------------------------------- Net Net Asset Realized and Total Net Period Value, Net Unrealized from Net Realized Ended Beginning Investment Gain/(Loss) on Investment Investment Gain on Total December 31 of Period Income/Loss Investments Operations Income Investments Distributions ----------- ------------ ----------- -------------- ---------- ---------- ----------- ------------- CLASS A 2004(a)(f) $17.97 $0.01 $ 0.43 $ 0.44 -- -- -- 2003(a) 13.81 (0.05) 4.45 4.40 -- $(0.24) $(0.24) 2002(a) 16.43 (0.04) (2.58) (2.62) -- -- -- 2001(a) 16.13 (0.05) 0.93 0.88 -- (0.58) (0.58) 2000(a) 19.45 (0.03) (1.54) (1.57) -- (1.75) (1.75) 1999 16.08 (0.06) 5.15 5.09 -- (1.72) (1.72) CLASS B 2004(a)(f) $17.47 $(0.05) $ 0.42 $ 0.37 -- -- -- 2003(a) 13.53 (0.17) 4.35 4.18 -- $(0.24) $(0.24) 2002(a) 16.23 (0.14) (2.56) (2.70) -- -- -- 2001(a) 16.07 (0.18) 0.92 0.74 -- (0.58) (0.58) 2000(a)(b) 18.20 (0.14) (0.24) (0.38) -- (1.75) (1.75) CLASS C 2004(a)(f) $17.49 $(0.05) $ 0.41 $ 0.36 -- -- -- 2003(a) 13.54 (0.17) 4.36 4.19 -- $(0.24) $(0.24) 2002(a) 16.24 (0.14) (2.56) (2.70) -- -- -- 2001(a) 16.07 (0.18) 0.93 0.75 -- (0.58) (0.58) 2000(a)(b) 18.20 (0.14) (0.24) (0.38) -- (1.75) (1.75) RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA --------------------------------------------------------------- Net Asset Net Assets Net Period Value, End of Investment Portfolio Ended End of Total Period Income/ Operating Turnover December 31 Period Return+ (in 000's) (Loss) Expenses (c) Rate ----------- -------- ---------- ---------- ---------- --------- ---------- CLASS A 2004(a)(f) $18.41 2.5% $1,243,260 0.12%(e) 1.39%(e) 7% 2003(a) 17.97 31.9 1,255,668 (0.35) 1.44(d) 8 2002(a) 13.81 (16.0) 1,024,452 (0.28) 1.40 16 2001(a) 16.43 5.4 1,267,975 (0.30) 1.40 29 2000(a) 16.13 (7.9) 1,158,085 (0.14) 1.37 66 1999 19.45 31.9 1,205,320 (0.40) 1.38 59 CLASS B 2004(a)(f) $17.84 2.1% $ 21,291 (0.61)%(e) 2.14%(e) 7% 2003(a) 17.47 30.9 18,059 (1.10) 2.19(d) 8 2002(a) 13.53 (16.6) 10,493 (1.01) 2.16 16 2001(a) 16.23 4.6 5,505 (1.10) 2.19 29 2000(a)(b) 16.07 (1.9) 681 (0.89)(e) 2.12(e) 66 CLASS C 2004(a)(f) $17.85 2.1% $ 15,190 (0.61)%(e) 2.14%(e) 7% 2003(a) 17.49 30.9 14,973 (1.10) 2.19(d) 8 2002(a) 13.54 (16.6) 8,078 (1.01) 2.16 16 2001(a) 16.24 4.6 4,170 (1.08) 2.19 29 2000(a)(b) 16.07 (1.9) 566 (0.89)(e) 2.12(e) 66
+ Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the period and sold at the end of the period including reinvestment of dividends and does not reflect applicable sales charges. Total return for the period of less than one year is not annualized. (a) Per share amounts have been calculated using the average daily shares outstanding method. (b) From the commencement of offering on March 1, 2000. (c) The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. Including such custodian fee credits, the expense ratios would be 1.36% (Class A), 2.11% (Class B), and 2.11% (Class C) for 2000 and 1.39% (Class A), 2.18% (Class B), and 2.18% (Class C) for 2001. For the fiscal years ended December 31, 1999, 2002, 2003 and the six months ended June 30, 2004, the effect of the custodian fee credits was minimal. (d) The Fund incurred dividend expense on securities sold short for the year ended December 31, 2003. If the dividend expense had not been incurred, the ratios of operating expenses to average net assets would have been 1.43% (Class A), 2.18% (Class B), and 2.18% (Class C), respectively. (e) Annualized. (f) For the period ending June 30, 2004, unaudited. See accompanying notes to financial statements. 11 THE GABELLI VALUE FUND INC. One Corporate Center Rye, New York 10580-1422 800-GABELLI 800-422-3554 FAX: 914-921-5118 WEBSITE: WWW.GABELLI.COM E-MAIL: INFO@GABELLI.COM Net Asset Value available daily by calling 800-GABELLI after 6:00 P.M. BOARD OF DIRECTORS Mario J. Gabelli, CFA Karl Otto Pohl CHAIRMAN AND CHIEF FORMER PRESIDENT INVESTMENT OFFICER DEUTSCHE BUNDESBANK GABELLI ASSET MANAGEMENT INC. Anthony J. Colavita Anthony R. Pustorino ATTORNEY-AT-LAW CERTIFIED PUBLIC ACCOUNTANT ANTHONY J. COLAVITA, P.C. PROFESSOR EMERITUS PACE UNIVERSITY Robert J. Morrissey Werner J. Roeder, MD ATTORNEY-AT-LAW VICE PRESIDENT/MEDICAL AFFAIRS MORRISSEY, HAWKINS & LYNCH LAWRENCE HOSPITAL CENTER OFFICERS Bruce N. Alpert James E. McKee PRESIDENT AND TREASURER SECRETARY CUSTODIAN Mellon Trust of New England, NA TRANSFER AGENT AND DIVIDEND DISBURSING AGENT State Street Bank and Trust Company LEGAL COUNSEL Willkie Farr & Gallagher LLP DISTRIBUTOR Gabelli & Company, Inc. -------------------------------------------------------------------------------- This report is submitted for the general information of the shareholders of The Gabelli Value Fund Inc. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. -------------------------------------------------------------------------------- GAB409Q204SR {MARIO GABELLI PHOTO OMITTED] THE GABELLI VALUE FUND INC. SEMI-ANNUAL REPORT JUNE 30, 2004 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 Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The Board of Directors has a Nominating Committee comprised of three "non-interested" (as such term is defined by the Investment Company Act of 1940, as amended) Directors, namely Anthony J. Colavita, Robert J. Morrissey and Werner J. Roeder. The Nominating Committee operates pursuant to a written charter. The Nominating Committee is responsible for identifying individuals believed to be qualified to become Board members in the event that a position is vacated or created. In accordance with procedures adopted by the Nominating Committee, the Nominating Committee will consider Director candidates recommended by shareholders. In considering candidates submitted by shareholders, the Nominating Committee will take into consideration the needs of the Board of Directors, the qualifications of the candidate and the interests of shareholders. The Nominating Committee may also take into consideration the number of shares held by the recommending shareholder and the length of time that such shares have been held. To have a candidate considered by the Nominating Committee, a shareholder must submit the recommendation in writing and must include the following information: o The name of the shareholder and evidence of the person's ownership of shares of the Fund, including the number of shares owned and the length of time of ownership; o The name of the candidate, the candidate's resume or a listing of his or her qualifications to be a Director of the Fund and the person's consent to be named as a Director if selected by the Nominating Committee and nominated by the Board of Directors; and o If requested by the Nominating Committee, a completed and signed directors questionnaire. The shareholder recommendation and information described above must be sent to the Fund's Secretary c/o Gabelli Funds, LLC, James E. McKee and must be received by the Secretary no less than 120 days prior to the anniversary date of the Fund's most recent annual meeting of shareholders or, if the meeting has moved by more than 30 days, a reasonable amount of time before the meeting. The Nominating Committee believes that the minimum qualifications for serving as a Director of the Fund are that the individual demonstrate, by significant accomplishment in his or her field, an ability to make a meaningful contribution to the Board of Directors' oversight of the business and affairs of the Fund and have an impeccable record and reputation for honest and ethical conduct in both his or her professional and personal activities. In addition, the Nominating Committee examines a candidate's specific experiences and skills, time availability in light of other commitments, potential conflicts of interest and independence from management and the Fund. The Nominating Committee also seeks to have the Board of Directors represent a diversity of backgrounds and experience. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a)(1) Not applicable. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) The Gabelli Value Fund Inc. ----------------------------------------------------- By (Signature and Title)* /s/ BRUCE N. ALPERT ----------------------------------------------------- Bruce N. Alpert, Principal Executive Officer Date September 7, 2004 ---------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ BRUCE N. ALPERT ----------------------------------------------------- Bruce N. Alpert, Principal Executive Officer and Principal Financial Officer Date September 7, 2004 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.