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
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The Gabelli Value Fund Inc.
---------------------------------------
(Exact name of registrant as specified in charter)
One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)
Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
---------------------------------------
(Name and address of agent for service)
registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: December 31, 2005
--------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE GABELLI VALUE FUND INC.
ANNUAL REPORT
DECEMBER 31, 2005
TO OUR SHAREHOLDERS,
The Sarbanes-Oxley Act requires a Fund's principal executive and
financial officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio manager's commentary
and subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.
Because we do not want our portfolio managers to eliminate their
opinions and/or restrict their commentary to historical facts, we have separated
their commentary from the financial statements and investment portfolio and have
sent it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com/funds.
Enclosed are the audited financial statements and the investment
portfolio as of December 31, 2005 with a description of factors that affected
the performance during the past year.
PERFORMANCE DISCUSSION
For 2005 Gabelli Value Fund was virtually unchanged declining -0.17%
which compares to gains of 1.83% for the Dow Jones Industrial Average and 4.91%
for the Standard & Poor 500 Index for the same period, respectively.
In the past year, double digit returns were tough to achieve without a
healthy dosage of dividend paying stocks such as energy and utility stocks.
These were the only Standard and Poor's industry groups to show double digit
gains, with energy issues (up about 30%) doing twice as well as utilities (up
about 15%). The Standard and Poor's telecom and consumer discretionary industry
groups were off a bit for the year.
The Fund benefited from a number of holdings being takeover targets in
2005. Clearly, the Fund's energy and utility holdings contributed to returns
with Allegheny Energy Inc., Kerr-McGee Corp. and ConocoPhillips rising by over
30% in the past twelve months. Communication equipment makers were also strong
performers: Corning Inc., Motorola Inc., and Texas Instruments Inc. rose more
than 30% each. Thomas & Betts Corp., a significant holding in the Fund,
appreciated by approximately 35% in 2005.
While many of our holdings had spectacular returns in 2005 they were
not enough to offset the declines of our stocks in the media & entertainment,
telecommunications, publishing, and broadcasting sectors, sectors that the Fund
is overweight in and that did not get investor attention in 2005.
Significant Fund holdings of over 1% that declined more than 10% in
2005 included Telephone & Data Systems Inc. (-52.9%), Liberty Media Corp.
(-28.9%), Media General Inc. (-20.9%), News Corp. (-17.0%), Aztar Corp.
(-12.8%), Viacom Inc. (-12.2%) and Time Warner Inc.(-10.2%).
Sincerely yours,
/s/ Bruce N. Alpert
Bruce N. Alpert
President
February 17, 2006
[GRAPHIC OMITTED]
PLOT POINTS FOLLOW:
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE GABELLI VALUE FUND, THE CONSUMER PRICE INDEX + 10% AND THE S&P 500 INDEX
Gabelli Value Fund
(Class A shares) S&P 500 Index Consumer Price Index +10%
9/29/89 $ 9,450 $10,000 $10,000
12/31/89 9,648 10,205 11,460
12/31/90 9,109 9,888 13,305
12/31/91 10,505 12,893 15,048
12/31/92 11,838 13,875 16,989
12/31/93 16,508 15,270 19,147
12/31/94 16,508 15,470 21,578
12/31/95 20,214 21,277 24,276
12/31/96 21,980 26,160 27,504
12/31/97 32,581 34,884 30,723
12/31/98 40,150 44,860 34,286
12/31/99 52,966 54,295 38,641
12/31/00 48,808 49,354 43,819
12/31/01 51,453 43,491 48,902
12/31/02 43,247 33,884 54,965
12/31/03 57,029 43,598 61,506
12/31/04 64,318 48,337 69,686
12/31/05 64,208 50,710 79,024
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. The performance tables and
graph do not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2005 (A)
----------------------------------------------------
Since
Inception
Quarter 1 Year 3 Year 5 Year 10 Year 15 Year (9/29/89)
- --------------------------------------------------------------------------------------------------------------------
GABELLI VALUE FUND CLASS A ....... (2.07)% (0.17)% 14.08% 5.64% 12.25% 13.90% 12.50%
(7.48)(B) (5.64)(B) 11.96(B) 4.45(B) 11.61(B) 13.47(B) 12.11(B)
S&P 500 Index .................... 2.08 4.91 14.38 0.54 9.07 11.51 10.51
Dow Jones Industrial Average ..... 2.01 1.83 11.24 2.04 9.83 12.34 11.52
Nasdaq Composite Index ........... 2.49 1.37 18.20 (2.25) 7.68 12.56 9.94
Class B .......................... (2.28) (0.92) 13.25 4.83 11.76 13.57 12.20
(7.16)(c) (5.88)(c) 12.47(c) 4.50(c) 11.76(c) 13.57(c) 12.20(c)
Class C .......................... (2.28) (0.92) 13.24 4.83 11.79 13.59 12.21
(3.25)(c) (1.91)(c) 13.24(c) 4.83(c) 11.79(c) 13.59(c) 12.21(c)
(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICES
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.
PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA
PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST
RECENT MONTH END. INVESTORS SHOULD CONSIDER THE INVESTMENT OBJECTIVES,
RISKS, CHARGES, AND EXPENSES OF THE FUND CAREFULLY BEFORE INVESTING. THE
PROSPECTUS CONTAINS MORE INFORMATION ABOUT THIS AND OTHER MATTERS AND
SHOULD BE READ CAREFULLY BEFORE INVESTING.
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 DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH
THESE CLASSES OF SHARES. THE DOW JONES INDUSTRIAL AVERAGE IS AN UNMANAGED
INDEX OF 30 LARGE CAPITALIZATION STOCKS. THE S&P 500 INDEX AND THE NASDAQ
COMPOSITE INDEX ARE UNMANAGED INDICATORS OF STOCK MARKET PERFORMANCE.
DIVIDENDS ARE REINVESTED EXCEPT FOR THE NASDAQ COMPOSITE INDEX.
(b) INCLUDES THE EFFECT OF THE MAXIMUM 5.5% SALES CHARGE AT THE BEGINNING OF
THE PERIOD.
(c) 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.
CLASS B SHARES ARE NOT AVAILABLE FOR NEW PURCHASES.
- --------------------------------------------------------------------------------
2
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)
The following table presents portfolio holdings as a percent of total net assets
as of December 31, 2005:
THE GABELLI VALUE FUND
Entertainment ................................. 17.8%
Publishing .................................... 11.1%
Cable and Satellite ........................... 9.1%
Telecommunications ............................ 7.1%
Hotels and Gaming ............................. 6.0%
Diversified Industrial ........................ 5.8%
Food and Beverage ............................. 5.7%
Metals and Mining ............................. 3.7%
Electronics ................................... 3.5%
Financial Services ............................ 3.3%
Communications Equipment ...................... 3.1%
Equipment and Supplies ........................ 2.8%
Broadcasting .................................. 2.5%
Environmental Services ........................ 2.5%
Automotive: Parts and Accessories ............. 2.4%
Consumer Products ............................. 2.4%
Energy and Utilities .......................... 2.1%
Retail ........................................ 1.7%
Aviation: Parts and Services .................. 1.7%
Agriculture ................................... 1.6%
Specialty Chemicals ........................... 1.2%
Manufactured Housing .......................... 0.7%
Consumer Services ............................. 0.6%
Business Services ............................. 0.5%
Machinery ..................................... 0.5%
Real Estate ................................... 0.3%
Health Care ................................... 0.3%
Aerospace ..................................... 0.3%
Computer Software and Services ................ 0.2%
Wireless Communications ....................... 0.2%
Transportation ................................ 0.0%
Other Assets and Liabilities - (Net) .......... (0.7)%
------
100.0%
======
THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE
FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q, THE LAST OF WHICH WAS
FILED FOR THE QUARTER ENDED SEPTEMBER 30, 2005. SHAREHOLDERS MAY OBTAIN THIS
INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE FUND AT 800-GABELLI
(800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE ON THE SEC'S WEBSITE AT
WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE COMMISSION'S PUBLIC
REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE PUBLIC
REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
PROXY VOTING
The Fund files Form N-PX with its complete proxy voting record for the 12 months
ended June 30th, no later than August 31st of each year. A description of the
Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities are available without charge, upon request, (i)
by calling 800-GABELLI (800-422-3554); (ii) by writing to The Gabelli Funds at
One Corporate Center, Rye, NY 10580-1422; and (iii) by visiting the Securities
and Exchange Commission's website at www.sec.gov.
3
THE GABELLI VALUE FUND INC.
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
For the Six Month Period from July 1, 2005 through December 31, 2005
EXPENSE TABLE
================================================================================
We believe it is important for you to understand the impact of fees and expenses
regarding your investment. All mutual funds have operating expenses. As a
shareholder of a fund, you incur ongoing costs, which include costs for
portfolio management, administrative services, and shareholder reports (like
this one), among others. Operating expenses, which are deducted from a fund's
gross income, directly reduce the investment return of a fund. When a fund's
expenses are expressed as a percentage of its average net assets, this figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The Expense Table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN: This section provides information about actual account
values and actual expenses. You may use this section to help you to estimate the
actual expenses that you paid over the period after any fee waivers and expense
reimbursements. The "Ending Account Value" shown is derived from the Fund's
ACTUAL return during the past six months, and the "Expenses Paid During Period"
shows the dollar amount that would have been paid by an investor who started
with $1,000 in the Fund. You may use this information, together with the amount
you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period" to estimate
the expenses you paid during this period.
HYPOTHETICAL 5% RETURN: This section provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio. It assumes a hypothetical annualized return of 5% before expenses during
the period shown. In this case - because the hypothetical return used is NOT the
Fund's actual return - the results do not apply to your investment and you
cannot use the hypothetical account value and expense to estimate the actual
ending account balance or expenses you paid for the period. This example is
useful in making comparisons of the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs such as sales
charges (loads), redemption fees, or exchange fees, if any, which are described
in the Prospectus. If these costs were applied to your account, your costs would
be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing
costs only, and will not help you determine the relative total costs of owning
different funds. The "Annualized Expense Ratio" represents the actual expenses
for the last six months and may be different from the expense ratio in the
Financial Highlights which is for the year ended December 31, 2005.
Beginning Ending Annualized Expenses
Account Value Account Value Expense Paid During
07/01/05 12/31/05 Ratio Period*
- --------------------------------------------------------------------------------
THE GABELLI VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class A $1,000.00 $ 999.90 1.39% $ 7.01
Class B $1,000.00 $ 996.60 2.14% $10.77
Class C $1,000.00 $ 996.60 2.14% $10.77
HYPOTHETICAL 5% RETURN
Class A $1,000.00 $1,018.20 1.39% $ 7.07
Class B $1,000.00 $1,014.42 2.14% $10.87
Class C $1,000.00 $1,014.42 2.14% $10.87
* Expenses are equal to the Fund's annualized expense ratio for the last six
months multiplied by the average account value over the period, multiplied by
the number of days in the most recent fiscal half-year, then divided by 365.
4
THE GABELLI VALUE FUND INC.
SCHEDULE OF INVESTMENTS -- DECEMBER 31, 2005
================================================================================
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS -- 100.7%
AEROSPACE -- 0.3%
1,000 Lockheed Martin Corp. ..........$ 25,800 $ 63,630
400,000 Rolls-Royce Group plc+ ......... 2,515,352 2,942,036
13,360,000 Rolls-Royce Group plc, Cl. B ... 13,561 23,561
------------ -------------
2,554,713 3,029,227
------------ -------------
AGRICULTURE -- 1.6%
685,000 Archer-Daniels-Midland Co. ..... 7,402,648 16,892,100
30,000 Mosaic Co.+ .................... 373,124 438,900
------------ -------------
7,775,772 17,331,000
------------ -------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 2.4%
38,000 China Yuchai International Ltd. 300,576 297,540
860,000 Dana Corp. ..................... 14,038,487 6,174,800
250,000 Genuine Parts Co. .............. 6,600,695 10,980,000
300,000 Navistar International Corp.+ .. 8,055,166 8,586,000
29,460 Proliance International Inc.+ .. 139,101 155,843
------------ -------------
29,134,025 26,194,183
------------ -------------
AVIATION: PARTS AND SERVICES -- 1.7%
19,000 Curtiss-Wright Corp. ........... 487,166 1,037,400
328,400 Fairchild Corp., Cl. A+ ........ 2,485,541 837,420
450,000 GenCorp Inc.+ .................. 4,371,907 7,987,500
89,000 Sequa Corp., Cl. A+ ............ 3,752,093 6,145,450
33,000 Sequa Corp., Cl. B+ ............ 1,673,268 2,293,500
------------ -------------
12,769,975 18,301,270
------------ -------------
BROADCASTING -- 2.5%
186,250 Gray Television Inc. ........... 2,591,066 1,828,975
540,000 Liberty Corp. .................. 25,137,000 25,277,400
74,500 Young Broadcasting Inc., Cl. A+ 893,671 193,700
------------ -------------
28,621,737 27,300,075
------------ -------------
BUSINESS SERVICES -- 0.5%
250,000 Cendant Corp. .................. 2,235,089 4,312,500
15,000 ChoicePoint Inc.+ .............. 540,551 667,650
30,000 Nashua Corp.+ .................. 258,767 210,600
15,000 UNOVA Inc.+ .................... 351,409 507,000
------------ -------------
3,385,816 5,697,750
------------ -------------
CABLE AND SATELLITE -- 9.1%
130,000 Adelphia Communications Corp.,
Cl. A+ ....................... 91,925 5,200
2,545,430 Cablevision Systems Corp.,
Cl. A+ ....................... 27,773,617 59,741,242
348,611 DIRECTV Group Inc.+ ............ 6,308,775 4,922,388
130,000 EchoStar Communications Corp.,
Cl. A+ ....................... 3,973,740 3,532,100
270,000 Liberty Global Inc., Cl. A+ .... 4,355,175 6,075,000
270,000 Liberty Global Inc., Cl. C+ .... 4,184,384 5,724,000
MARKET
SHARES COST VALUE
------ ---- ------
476,300 Rogers Communications Inc.,
Cl. B ........................$ 4,738,783 $ 20,128,438
------------ --------------
51,426,399 100,128,368
------------ --------------
COMMUNICATIONS EQUIPMENT -- 3.1%
108,000 Agere Systems Inc.+ ............ 1,820,857 1,393,200
650,000 Corning Inc.+ .................. 5,608,594 12,779,000
900,000 Lucent Technologies Inc.+ ...... 4,012,416 2,394,000
480,000 Motorola Inc. .................. 5,177,961 10,843,200
910,000 Nortel Networks Corp.+ ......... 4,417,326 2,784,600
80,000 Scientific-Atlanta Inc. ........ 2,059,362 3,445,600
------------ --------------
23,096,516 33,639,600
------------ --------------
COMPUTER SOFTWARE AND SERVICES -- 0.2%
60,000 Yahoo! Inc.+ ................... 2,113,362 2,350,800
------------ --------------
CONSUMER PRODUCTS -- 2.4%
85,000 Energizer Holdings Inc.+ ....... 1,992,017 4,232,150
93,000 Gallaher Group plc, ADR ........ 2,374,002 5,594,880
500 Givaudan SA .................... 135,440 338,838
135,000 Hartmarx Corp.+ ................ 647,646 1,054,350
20,000 National Presto Industries Inc. 609,961 887,000
190,000 Pactiv Corp.+ .................. 1,841,986 4,180,000
800,000 Swedish Match AB ............... 8,319,382 9,415,319
10,000 Wolverine World Wide Inc. ...... 97,342 224,600
------------ --------------
16,017,776 25,927,137
------------ --------------
CONSUMER SERVICES -- 0.6%
100,000 IAC/InterActiveCorp+ ........... 1,754,940 2,831,000
218,100 Rollins Inc. ................... 1,601,272 4,298,751
------------ --------------
3,356,212 7,129,751
------------ --------------
DIVERSIFIED INDUSTRIAL -- 5.8%
50,000 Ampco-Pittsburgh Corp. ......... 250,018 725,500
330,000 Cooper Industries Ltd., Cl. A 17,872,379 24,090,000
290,000 Crane Co. ...................... 7,676,957 10,228,300
30,000 Griffon Corp.+ ................. 668,566 714,300
50,000 Harbor Global Co. Ltd.+ ........ 133,471 450,000
440,000 Honeywell International Inc. ... 13,970,669 16,390,000
80,000 ITT Industries Inc. ............ 5,661,875 8,225,600
233,400 Katy Industries Inc.+ .......... 1,923,525 723,540
75,000 Lamson & Sessions Co.+ ......... 560,465 1,876,500
------------ --------------
48,717,925 63,423,740
------------ --------------
ELECTRONICS -- 3.5%
230,000 Texas Instruments Inc. ......... 5,889,627 7,376,100
65,000 Thermo Electron Corp.+ ......... 1,249,065 1,958,450
640,000 Thomas & Betts Corp.+ .......... 12,736,898 26,854,400
90,000 Tyco International Ltd. ........ 2,546,117 2,597,400
------------ --------------
22,421,707 38,786,350
------------ --------------
See accompanying notes to financial statements.
5
THE GABELLI VALUE FUND INC.
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2005
================================================================================
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES -- 2.1%
8,000 Allegheny Energy Inc.+ .........$ 98,789 $ 253,200
29,604 Chevron Corp. .................. 1,823,608 1,680,619
195,000 ConocoPhillips ................. 5,417,216 11,345,100
40,000 Kerr-McGee Corp. ............... 1,969,210 3,634,400
200,000 Mirant Corp.+ .................. 61,000 264,000
210,000 Northeast Utilities ............ 3,967,387 4,134,900
75,000 Southwest Gas Corp. ............ 1,491,943 1,980,000
------------ --------------
14,829,153 23,292,219
------------ --------------
ENTERTAINMENT -- 17.8%
8,571 Chestnut Hill Ventures+ (a) .... 233,260 184,046
414,000 Discovery Holding Co., Cl. A+ .. 4,558,514 6,272,100
60,000 Dover Motorsports Inc. ......... 309,314 366,600
1,440,000 Gemstar-TV Guide
International Inc.+ .......... 7,528,130 3,758,400
132,000 Grupo Televisa SA, ADR ......... 4,549,647 10,626,000
4,100,000 Liberty Media Corp., Cl. A+ .... 27,997,367 32,267,000
400,000 The Walt Disney Co. ............ 9,427,101 9,588,000
1,290,000 Time Warner Inc. ............... 18,657,271 22,497,600
2,585,000 Viacom Inc., Cl. A ............. 58,594,232 84,684,600
776,000 Vivendi Universal SA, ADR ...... 13,458,335 24,389,680
------------ --------------
145,313,171 194,634,026
------------ --------------
ENVIRONMENTAL SERVICES -- 2.5%
260,000 Republic Services Inc. ......... 4,733,105 9,763,000
575,000 Waste Management Inc. .......... 13,314,341 17,451,250
------------ --------------
18,047,446 27,214,250
------------ --------------
EQUIPMENT AND SUPPLIES -- 2.8%
210,000 CIRCOR International Inc. ...... 2,325,092 5,388,600
310,000 Flowserve Corp.+ ............... 4,940,899 12,263,600
125,000 Gerber Scientific Inc.+ ........ 873,551 1,196,250
161,000 GrafTech International Ltd.+ ... 1,981,050 1,001,420
360,000 Watts Water Technologies
Inc., Cl. A .................. 4,629,146 10,904,400
------------ --------------
14,749,738 30,754,270
------------ --------------
FINANCIAL SERVICES -- 3.3%
535,000 American Express Co. ........... 17,411,572 27,531,100
105,000 Ameriprise Financial Inc. ...... 2,465,618 4,305,000
28,000 Deutsche Bank AG ............... 1,639,082 2,712,360
115,000 Phoenix Companies Inc. ......... 1,283,908 1,568,600
------------ --------------
22,800,180 36,117,060
------------ --------------
FOOD AND BEVERAGE -- 5.7%
20,000 Corn Products International Inc. 246,550 477,800
80,000 Del Monte Foods Co.+ ........... 606,728 834,400
217,000 Diageo plc, ADR ................ 8,314,676 12,651,100
474,500 Flowers Foods Inc. ............. 3,095,299 13,077,220
MARKET
SHARES COST VALUE
------ ---- ------
94,000 Fomento Economico Mexicano
SA de CV, ADR .................$ 3,442,848 $ 6,815,940
50,000 General Mills Inc. ............. 2,490,310 2,466,000
240,000 Heinz (H.J.) Co. ............... 8,470,388 8,092,800
3,000 Hershey Co. .................... 145,382 165,750
115,000 Kerry Group plc, Cl. A ......... 1,306,152 2,535,369
616,000 PepsiAmericas Inc. ............. 8,384,341 14,328,160
15,000 Wrigley (Wm.) Jr. Co. .......... 920,295 997,350
------------ --------------
37,422,969 62,441,889
------------ --------------
HEALTH CARE -- 0.3%
80,000 Sybron Dental Specialties
Inc.+ ........................ 1,479,621 3,184,800
------------ --------------
HOTELS AND GAMING -- 6.0%
475,000 Aztar Corp.+ ................... 4,056,053 14,435,250
66,494 Dover Downs Gaming &
Entertainment Inc. ........... 708,218 940,890
221,000 Gaylord Entertainment Co.+ ..... 6,298,073 9,633,390
4,000,000 Hilton Group plc ............... 14,922,862 25,015,910
410,000 Hilton Hotels Corp. ............ 3,035,645 9,885,100
33,000 Kerzner International Ltd.+ .... 1,802,733 2,268,750
20,000 Las Vegas Sands Corp.+ ......... 711,122 789,400
65,000 MGM Mirage+ .................... 1,478,602 2,383,550
------------ --------------
33,013,308 65,352,240
------------ --------------
MACHINERY -- 0.5%
154,000 CNH Global NV .................. 2,956,501 2,855,160
40,000 Deere & Co. .................... 1,630,374 2,724,400
------------ --------------
4,586,875 5,579,560
------------ --------------
MANUFACTURED HOUSING -- 0.7%
570,000 Champion Enterprises Inc.+ ..... 5,746,131 7,763,400
------------ --------------
METALS AND MINING -- 3.7%
320,000 Barrick Gold Corp. ............. 2,998,415 8,918,400
123,133 Kinross Gold Corp.+ ............ 1,119,195 1,135,286
470,000 Newmont Mining Corp. ........... 9,046,385 25,098,000
215,000 Placer Dome Inc. ............... 2,020,400 4,929,950
------------ --------------
15,184,395 40,081,636
------------ --------------
PUBLISHING -- 11.1%
190,000 Belo Corp., Cl. A .............. 3,284,122 4,067,900
1,265,000 Media General Inc., Cl. A ...... 24,869,900 64,135,500
89,000 Meredith Corp. ................. 1,780,257 4,658,260
1,140,000 News Corp., Cl. A .............. 16,897,247 17,727,000
465,000 PRIMEDIA Inc.+ ................. 1,409,365 748,650
354,000 Reader's Digest Association
Inc. ......................... 5,807,509 5,387,880
311,000 Scripps (E.W.) Co., Cl. A ...... 10,560,834 14,934,220
338,000 Tribune Co. .................... 14,055,994 10,227,880
------------ --------------
78,665,228 121,887,290
------------ --------------
See accompanying notes to financial statements.
6
THE GABELLI VALUE FUND INC.
SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2005
================================================================================
MARKET
SHARES COST VALUE
------ ---- ------
COMMON STOCKS (CONTINUED)
REAL ESTATE -- 0.3%
135,000 Griffin Land & Nurseries
Inc.+ ........................$ 1,588,939 $ 3,524,175
------------ --------------
RETAIL -- 1.7%
120,000 Albertson's Inc. ............... 2,859,642 2,562,000
320,000 AutoNation Inc.+ ............... 2,603,815 6,953,600
18,000 Burlington Coat Factory
Warehouse Corp. .............. 269,755 723,780
120,000 Ingles Markets Inc., Cl. A ..... 1,435,410 1,878,000
280,000 Safeway Inc. ................... 5,993,100 6,624,800
----------- -----------
13,161,722 18,742,180
----------- -----------
SPECIALTY CHEMICALS -- 1.2%
220,800 Ferro Corp. .................... 4,629,134 4,142,208
683,100 Hercules Inc.+ ................. 10,286,944 7,719,030
50,000 Sensient Technologies Corp. .... 1,024,399 895,000
------------ --------------
15,940,477 12,756,238
------------ --------------
TELECOMMUNICATIONS -- 7.1%
920,000 Cincinnati Bell Inc.+ .......... 4,858,994 3,229,200
25,000 Commonwealth Telephone
Enterprises Inc. ............. 989,702 844,250
1,680,000 Qwest Communications
International Inc.+ .......... 4,404,046 9,492,000
1,510,000 Sprint Nextel Corp. ............ 22,668,733 35,273,600
432,000 Telephone & Data Systems Inc. .. 9,428,220 15,564,960
388,000 Telephone & Data Systems Inc.,
Special ...................... 7,780,949 13,428,680
------------ --------------
50,130,644 77,832,690
------------ --------------
MARKET
SHARES COST VALUE
------ ---- ------
TRANSPORTATION -- 0.0%
100,000 Grupo TMM SA, Cl. A, ADR+ ......$ 791,180 $ 385,000
------------ --------------
WIRELESS COMMUNICATIONS -- 0.2%
40,000 United States Cellular Corp.+ .. 1,880,524 1,976,000
------------ --------------
TOTAL COMMON STOCKS ............ 726,723,636 1,102,758,174
------------ --------------
TOTAL INVESTMENTS -- 100.7% ....$726,723,636 1,102,758,174
============
OTHER ASSETS AND LIABILITIES (NET) -- (0.7)% .... (7,813,964)
--------------
NET ASSETS -- 100.0% ............................ $1,094,944,210
==============
- ----------------
(a) Security fair valued under procedures established by the Board of
Directors. The procedures may include reviewing available financial
information about the company and reviewing valuation of comparable
securities and other factors on a regular basis. At December 31, 2005, the
market value of fair valued securities amounted to $184,046 or 0.02% of
total net assets.
+ Non-income producing security.
ADR American Depository Receipt
See accompanying notes to financial statements.
7
THE GABELLI VALUE FUND INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2005
================================================================================
ASSETS:
Investments, at value (cost $726,723,636) ......$1,102,758,174
Receivable for investments sold ................ 6,992,907
Dividends and interest receivable .............. 921,175
Receivable for Fund shares sold ................ 452,187
Other assets ................................... 37,215
--------------
TOTAL ASSETS ................................... 1,111,161,658
--------------
LIABILITIES:
Payable to custodian ........................... 11,404,144
Payable for Fund shares redeemed ............... 3,093,685
Payable for investment advisory fees ........... 949,487
Payable for shareholder service fees ........... 301,677
Payable for distribution fees .................. 258,141
Payable for shareholder
communications expenses ...................... 136,945
Other accrued expenses ......................... 73,369
--------------
TOTAL LIABILITIES .............................. 16,217,448
--------------
NET ASSETS applicable to 60,542,798
shares outstanding ...........................$1,094,944,210
==============
NET ASSETS CONSIST OF:
Capital stock, each class at $0.001 par value ..$ 60,543
Additional paid-in capital ..................... 724,391,170
Accumulated distributions in excess of net
investment income ............................ (889)
Accumulated distributions in excess of net
realized gain on investments and foreign
currency transactions ........................ (5,541,052)
Net unrealized appreciation on investments ..... 376,034,538
Net unrealized depreciation on foreign
currency translations ........................ (100)
--------------
NET ASSETS .....................................$1,094,944,210
==============
SHARES OF CAPITAL STOCK:
CLASS A:
Net Asset Value and redemption price per share
($1,063,136,861 / 58,702,233 shares outstanding;
100,000,000 shares authorized) ............... $18.11
======
Maximum offering price per share
(NAV / 0.945, based on maximum sales
charge of 5.50% of the offering price) ....... $19.16
======
CLASS B:
Net Asset Value and offering price per share
($17,803,758 / 1,030,509 shares outstanding;
100,000,000 shares authorized) ............... $17.28(a)
======
CLASS C:
Net Asset Value and offering price per share
($14,003,591 / 810,056 shares outstanding;
50,000,000 shares authorized) ................ $17.29(a)
======
- --------------------
(a) Redemption price varies based on length of time held.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2005
================================================================================
INVESTMENT INCOME:
Dividends (net of foreign taxes of $203,108) ......$17,559,233
Interest .......................................... 129,266
-----------
TOTAL INVESTMENT INCOME ........................... 17,688,499
-----------
EXPENSES:
Investment advisory fees .......................... 11,955,962
Distribution fees - Class A ....................... 2,902,740
Distribution fees - Class B ....................... 190,644
Distribution fees - Class C ....................... 154,359
Shareholder services fees ......................... 949,267
Shareholder communications expenses ............... 269,215
Custodian fees .................................... 159,943
Directors' fees ................................... 69,146
Legal and audit fees .............................. 66,729
Registration fees ................................. 37,545
Miscellaneous expenses ............................ 188,332
-----------
TOTAL EXPENSES .................................... 16,943,882
-----------
NET INVESTMENT INCOME ............................. 744,617
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on investments .................. 77,836,480
Net realized loss on foreign currency transactions (70,311)
Net change in unrealized appreciation /
depreciation on investments and
foreign currency translations ....................(82,512,239)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY ................. (4,746,070)
-----------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ..................................$(4,001,453)
===========
See accompanying notes to financial statements.
8
THE GABELLI VALUE FUND INC.
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------
OPERATIONS:
Net investment income (loss) $ 744,617 $ (1,651,707)
Net realized gain on investments, foreign currency, and short sale transactions .. 77,766,169 51,980,502
Net change in unrealized appreciation/depreciation on investments,
short sales, and foreign currency translations ................................. (82,512,239) 99,431,427
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS .................. (4,001,453) 149,760,222
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income
Class A ........................................................................ (666,736) --
-------------- --------------
(666,736) --
-------------- --------------
Net realized gains on investments
Class A ........................................................................ (73,800,544) (48,418,476)
Class B ........................................................................ (1,289,884) (811,174)
Class C ........................................................................ (1,025,214) (652,108)
-------------- --------------
(76,115,642) (49,881,758)
-------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS .............................................. (76,782,378) (49,881,758)
-------------- --------------
CAPITAL SHARE TRANSACTIONS
Class A ........................................................................ (120,095,977) (91,936,401)
Class B ........................................................................ (1,087,763) 1,041,509
Class C ........................................................................ (1,199,523) 368,973
-------------- --------------
NET DECREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS ....................... (122,383,263) (90,525,919)
-------------- --------------
REDEMPTION FEES .................................................................. 52,322 5,857
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS ............................................ (203,114,772) 9,358,402
NET ASSETS:
Beginning of period .............................................................. 1,298,058,982 1,288,700,580
-------------- --------------
End of period (including undistributed net investment income of $0 and $0,
respectively) ..................................................................$1,094,944,210 $1,298,058,982
============== ==============
NOTES TO FINANCIAL STATEMENTS
================================================================================
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
9
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
shall determine in good faith, to reflect its fair market value. Portfolio
securities traded on more than one national securities exchange or market are
valued according to the broadest and most representative market, as determined
by Gabelli Funds, LLC (the "Adviser").
Portfolio securities primarily traded on foreign markets are generally valued at
the preceding 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 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. Debt instruments with remaining maturities of 60 days or less that
are not credit impaired are valued at amortized cost, unless the Board
determines such amount does not reflect the securities' fair value, in which
case these securities will be 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 average of the latest bid and
asked prices. If there were no asked prices quoted on such day, the security is
valued using the closing bid price. Futures contracts are valued at the closing
settlement price of the exchange or board of trade on which the applicable
contract is traded.
Securities and assets for which market quotations are not readily available are
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. At December
31, 2005, there were no open repurchase agreements.
FUTURES CONTRACTS. The Fund may engage in futures contracts for the purpose of
hedging against changes in the value of its portfolio securities and in the
value of securities it intends to purchase. Upon entering into a futures
contract, the Fund is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin." Subsequent payments ("variation margin") are made
or received by the Fund each day, depending on the daily 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.
10
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
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. At December 31, 2005, there were no open futures
contracts.
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 and interest expense is recorded on the
accrual basis. The Fund did not hold any short positions as of December 31,
2005.
FOREIGN CURRENCY TRANSLATIONS. 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 current exchange
rates. Purchases and sales of investment securities, income, and expenses are
translated at the exchange rate prevailing on the respective dates of such
transactions. Unrealized gains and losses that result from changes in foreign
exchange rates and/or changes in market prices of securities have been included
in unrealized appreciation/depreciation on investments and foreign currency
translations. Net realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Fund and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.
FOREIGN SECURITIES. The Fund may directly purchase securities of foreign
issuers. Investing in securities of foreign issuers involves special risks not
typically associated with investing in securities of U.S. issuers. The risks
include possible revaluation of currencies, the ability to repatriate funds,
less complete financial information about companies, and possible future adverse
political and economic developments. Moreover, securities of many foreign
issuers and their markets may be less liquid and their prices more volatile than
those of securities of comparable U.S. issuers.
FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on
investments or currency repatriation, a portion of which may be recoverable. The
Fund will accrue such taxes and recoveries as applicable, based upon its current
interpretation of tax rules and regulations that exist in the markets in which
it invests.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
accounted for on the trade date with realized gain or loss on investments
determined by using the identified cost method. Interest income (including
amortization of premium and accretion of discount) is recorded on the accrual
basis. Premiums and discounts on debt securities are amortized using the
effective yield to maturity method. Dividend income is recorded on the
ex-dividend date except for certain dividends which are recorded as soon as the
Fund is informed of the dividend.
DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Certain
administrative expenses are common to, and allocated among, various affiliated
funds. Such allocations are made on the basis of each Fund's average net assets
or other criteria directly affecting the expenses as determined by the Adviser
pursuant to procedures established by the Board.
11
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
In calculating net asset value ("NAV") per share of each class, investment
income, realized and unrealized gains and losses, redemption fees, 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 borne solely by the class incurring the expense.
CUSTODIAN FEE CREDITS. When cash balances are maintained in the custody account,
the Fund receives credits which are used to offset custodian fees. The gross
expenses paid under the custody arrangement are included in custodian fees in
the Statement of Operations with the corresponding expense offset shown as
"custodian fee credits".
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date. Distributions to shareholders
are based on income and capital gains as determined in accordance with Federal
income tax regulations, which may differ from income and capital gains as
determined under U.S. generally accepted accounting principles. These
differences are primarily due to differing treatments of income and gains on
various investment securities and foreign currency transactions held by the
Fund, timing differences, and differing characterizations of distributions made
by the Fund. Distributions from net investment income include net realized gains
on foreign currency transactions. These book/tax differences are either
temporary or permanent in nature. To the extent these differences are permanent,
adjustments are made to the appropriate equity accounts in the fiscal year when
the differences arise. These reclassifications have no impact on the NAV of the
Fund and the calculation of net investment income per share in the Financial
Highlights excludes these adjustments. For the year ended December 31, 2005,
reclassifications were made to increase accumulated distributions in excess of
net investment income by $78,770 and decrease accumulated distributions in
excess of net realized gain on investments by $78,770.
The tax character of distributions paid during the years ended December 31, 2005
and December 31, 2004 was as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------
DISTRIBUTIONS PAID FROM:
Ordinary income (inclusive of short-term
capital gains) ........................... $ 1,290,094 $ 1,627,581
Net long-term capital gains ................ 75,492,284 48,254,177
----------- -----------
Total distributions paid ................... $76,782,378 $49,881,758
=========== ===========
PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). It is the policy of the Fund to comply with the
requirements of the Code applicable to regulated investment companies and to
distribute substantially all of its net investment company taxable income and
net capital gains. Therefore, no provision for Federal income taxes is required.
As of December 31, 2005, the components of accumulated earnings/(losses) on a
tax basis were as follows:
Undistributed ordinary income ........................... $ 820
Undistributed long-term capital gains ................... 1,032,106
Net unrealized appreciation on investments and
foreign currency ...................................... 369,459,571
------------
Total accumulated gain .................................. $370,492,497
============
12
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
The following summarizes the tax cost of investments and related unrealized
appreciation/depreciation at December 31, 2005:
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
COST APPRECIATION DEPRECIATION (DEPRECIATION)
---- ------------ ------------ --------------
Investments ............. $733,298,504 $409,869,716 $(40,410,046) $369,459,670
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 its 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 affiliated persons of the Adviser.
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, Class B, and Class 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 proceeds from the sales of securities for
the year ended December 31, 2005, other than short-term securities, aggregated
$31,541,065 and $229,338,029, respectively.
6. TRANSACTIONS WITH AFFILIATES. During the year ended December 31, 2005, the
Fund paid brokerage commissions of $342,350 to Gabelli & Company. Additionally,
Gabelli & Company informed the Fund that it received $143,075 from investors
representing commissions (sales charges and underwriting fees) on sales and
redemptions of Fund shares.
The cost of calculating the Fund's NAV per share is a Fund expense pursuant to
the Advisory Agreement between the Fund and the Adviser. During the year ended
December 31, 2005, the Fund reimbursed the Adviser $45,000 in connection with
the cost of computing the Fund's NAV, which is included in miscellaneous
expenses in the Statement of Operations.
7. CAPITAL STOCK TRANSACTIONS. The Fund currently 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 and automatically convert to Class A Shares approximately eight
years after the original purchase. The applicable CDSC is equal to a declining
percentage of the lesser of the NAV per share at the date of the 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 one year after purchase. Class B Shares are
available only through exchange of Class B Shares of other funds distributed by
Gabelli & Company. The Board has approved Class I Shares which have not been
offered publicly.
Effective June 15, 2005, the Fund imposed a redemption fee of 2.00% on Class A
Shares, Class B Shares, and Class C Shares that are redeemed or exchanged on or
before the seventh day after the date of a purchase. (From November 1, 2004
through June 14, 2005, the Fund imposed a redemption fee on shares that were
redeemed or exchanged within the sixtieth day after the date of a purchase.) The
redemption fee is deducted
13
THE GABELLI VALUE FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
from the proceeds otherwise payable to the redeeming shareholders and is
retained by the Fund. The redemption fees retained by the Fund during the years
ended December 31, 2005 and December 31, 2004 amounted to $52,322 and $5,857,
respectively.
The redemption fee does not apply to shares purchased through programs that the
Adviser determined to have appropriate short-term trading policies in place.
Additionally, certain recordkeepers for qualified and non-qualified retirement
plans that could not collect the redemption fee at the participant level due to
systems limitations have received an extension to implement such systems.
Transactions in shares of capital stock were as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- -------------
CLASS A CLASS A
------------------------- ----------------------------
Shares sold ......................................... 3,107,146 $ 59,989,477 6,030,365 $ 110,732,311
Shares issued upon reinvestment of dividends ........ 3,721,831 67,513,966 2,261,031 43,954,437
Shares redeemed ..................................... (12,826,666) (247,599,420) (13,467,997) (246,623,149)
---------- ------------- ----------- -------------
Net decrease .................................... (5,997,689) $(120,095,977) (5,176,601) $ (91,936,401)
========== ============= =========== =============
CLASS B CLASS B
------------------------- ----------------------------
Shares sold ......................................... 20,985 $ 381,787 271,816 $ 4,877,768
Shares issued upon reinvestment of dividends ........ 60,316 1,043,462 35,424 663,482
Shares redeemed ..................................... (134,928) (2,513,012) (256,767) (4,499,741)
---------- ------------- ----------- -------------
Net increase/(decrease) ......................... (53,627) $ (1,087,763) 50,473 $ 1,041,509
========== ============= =========== =============
CLASS C CLASS C
------------------------- ----------------------------
Shares sold ......................................... 119,549 $ 2,220,629 350,382 $ 6,259,650
Shares issued upon reinvestment of dividends ........ 41,465 717,762 25,225 472,969
Shares redeemed ..................................... (223,193) (4,137,914) (359,665) (6,363,646)
---------- ------------- ----------- -------------
Net increase/(decrease) ......................... (62,179) $ (1,199,523) 15,942 $ 368,973
========== ============= =========== =============
8. 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.
9. OTHER MATTERS. The Adviser and/or affiliates have received subpoenas from the
Attorney General of the State of New York and the Securities and Exchange
Commission (the "SEC") requesting information on mutual fund trading practices
involving certain funds managed by the Adviser. GAMCO Investors, Inc., the
Adviser's parent company, is responding to these requests for documents and
testimony. On a separate matter, in September 2005, the Adviser was informed by
the staff of the SEC that the staff may recommend to the Commission that an
administrative remedy and a monetary penalty be sought from the Adviser in
connection with the actions of two of seven closed-end funds managed by the
Adviser relating to Section 19(a) and Rule 19a-1 of the 1940 Act. These
provisions require registered investment companies to provide written statements
to shareholders when a dividend is made from a source other than net investment
income. While the two closed-end funds sent annual statements and provided other
materials containing this information, the funds did not send written statements
to shareholders with each distribution in 2002 and 2003. The Adviser believes
that all of the funds are now in compliance. The Adviser believes that these
matters would have no effect on the Fund or any material adverse effect on the
Adviser or its ability to manage the Fund.
14
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)(a) Investments Operations Income Investments Distributions
- ----------- --------- ---------------- ------------ ---------- ---------- ----------- -------------
CLASS A
2005 $19.49 $ 0.02 $(0.05) $(0.03) $(0.01) $(1.34) $(1.35)
2004 17.97 (0.02) 2.31 2.29 -- (0.77) (0.77)
2003 13.81 (0.05) 4.45 4.40 -- (0.24) (0.24)
2002 16.43 (0.04) (2.58) (2.62) -- -- --
2001 16.13 (0.05) 0.93 0.88 -- (0.58) (0.58)
CLASS B
2005 $18.79 $(0.12) $(0.05) $(0.17) -- $(1.34) $(1.34)
2004 17.47 (0.15) 2.24 2.09 -- (0.77) (0.77)
2003 13.53 (0.17) 4.35 4.18 -- (0.24) (0.24)
2002 16.23 (0.14) (2.56) (2.70) -- -- --
2001 16.07 (0.18) 0.92 0.74 -- (0.58) (0.58)
CLASS C
2005 $18.80 $(0.12) $(0.05) $(0.17) -- $(1.34) $(1.34)
2004 17.49 (0.15) 2.23 2.08 -- (0.77) (0.77)
2003 13.54 (0.17) 4.36 4.19 -- (0.24) (0.24)
2002 16.24 (0.14) (2.56) (2.70) -- -- --
2001 16.07 (0.18) 0.93 0.75 -- (0.58) (0.58)
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
---------------------------------------------------------
Net Asset Net Assets Net
Period Value, End of Investment Portfolio
Ended Redemption End of Total Period Income/ Operating Turnover
December 31 Fees(a) Period Return+ (in 000's) (Loss) Expenses (b) Rate
- ----------- ---------- --------- ------- ---------- ---------- ------------ ----------
CLASS A
2005 $0.00(d) $18.11 (0.2)% $1,063,137 0.08% 1.40% 3%
2004 0.00(d) 19.49 12.8 1,261,293 (0.11) 1.39 12
2003 -- 17.97 31.9 1,255,668 (0.35) 1.44(c) 8
2002 -- 13.81 (16.0) 1,024,452 (0.28) 1.40 16
2001 -- 16.43 5.4 1,267,975 (0.30) 1.40 29
CLASS B
2005 $0.00(d) $17.28 (0.9)% $ 17,804 (0.67)% 2.15% 3%
2004 0.00(d) 18.79 12.0 20,366 (0.86) 2.14 12
2003 -- 17.47 30.9 18,059 (1.10) 2.19(c) 8
2002 -- 13.53 (16.6) 10,493 (1.01) 2.16 16
2001 -- 16.23 4.6 5,505 (1.10) 2.19 29
CLASS C
2005 $0.00(d) $17.29 (0.9)% $ 14,003 (0.67)% 2.15% 3%
2004 0.00(d) 18.80 11.9 16,400 (0.85) 2.14 12
2003 -- 17.49 30.9 14,973 (1.10) 2.19(c) 8
2002 -- 13.54 (16.6) 8,078 (1.01) 2.16 16
2001 -- 16.24 4.6 4,170 (1.08) 2.19 29
- -------------------
+ 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.
(a) Per share amounts have been calculated using the average shares outstanding
method.
(b) 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 1.39% (Class A), 2.18% (Class B), and
2.18% (Class C) for 2001. For the fiscal years ended December 31, 2002 and
2003, the effect of the custodian fee credits were minimal. For the fiscal
years ended December 31, 2004 and 2005, there were no custodian fee credits.
(c) 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.
(d) Amount represents less than $0.005 per share.
See accompanying notes to financial statements.
15
THE GABELLI VALUE FUND INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
================================================================================
To the Board of Directors and Shareholders of
The Gabelli Value Fund Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Gabelli Value Fund Inc.
(hereafter referred to as the "Fund") at December 31, 2005, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the periods presented, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 2005 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 24, 2006
16
THE GABELLI VALUE FUND INC.
ADDITIONAL FUND INFORMATION (UNAUDITED)
================================================================================
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Directors. Information pertaining to the Directors and officers
of the Fund is set forth below. The Fund's Statement of Additional Information
includes additional information about The Gabelli Value Fund Inc. Directors and
is available, without charge, upon request, by calling 800-GABELLI
(800-422-3554) or by writing to The Gabelli Value Fund Inc. at One Corporate
Center, Rye, NY 10580-1422.
TERM OF NUMBER OF
NAME, POSITION(S) OFFICE AND FUNDS IN FUND
ADDRESS 1 LENGTH OF COMPLEX OVERSEEN PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
AND AGE TIME SERVED 2 BY DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR 4
- ---------------- ------------- ---------------- ---------------------- -------------------
INTERESTED DIRECTORS 3:
- ----------------------
MARIO J. GABELLI Since 1989 24 Chairman of the Board and Chief Executive Director of Morgan
Director and Officer of GAMCO Investors, Inc. and Chief Group Holdings, Inc.
Chief Investment Officer Investment Officer - Value Portfolios of Gabelli (holding company)
Age: 63 Funds, LLC and GAMCO Asset Management Inc.;
Chairman and Chief Executive Officer of Lynch
Interactive Corporation (multimedia and services)
NON-INTERESTED DIRECTORS:
- ------------------------
ANTHONY J. COLAVITA Since 1989 34 Partner in the law firm of --
Director Anthony J. Colavita, P.C.
Age: 70
ROBERT J. MORRISSEY Since 1989 7 Partner in the law firm of Morrissey, --
Director Hawkins & Lynch
Age: 66
ANTHONY R. PUSTORINO Since 1989 14 Certified Public Accountant; Professor Director of Lynch
Director Emeritus, Pace University Corporation
Age: 80 (diversified
manufacturing)
WERNER J. ROEDER, MD Since 2001 23 Medical Director of Lawrence Hospital and --
Director practicing private physician
Age: 65
- --------------------------------------------------------------------------------
2005 TAX NOTICE TO SHAREHOLDERS (Unaudited)
For the fiscal year ended December 31, 2005, the Fund paid to shareholders, on
December 28, 2005, ordinary income dividends (inclusive of short-term capital
gains) totaling $0.0236, $0.0115, and $0.0115 and a long-term capital gain
distribution, designated as a capital gain dividend totaling $1.3264, $1.3264,
and $1.3264 per share for Class A, Class B, and Class C, respectively. For the
fiscal year ended December 31, 2005, 100% of the ordinary income dividend
qualifies for the dividend received deduction available to corporations and 100%
of the ordinary income distributions was qualified dividend income.
- --------------------------------------------------------------------------------
17
THE GABELLI VALUE FUND INC.
ADDITIONAL FUND INFORMATION (UNAUDITED) (CONTINUED)
================================================================================
TERM OF
NAME, POSITION(S) OFFICE AND
ADDRESS 1 LENGTH OF PRINCIPAL OCCUPATION(S)
AND AGE TIME SERVED 2 DURING PAST FIVE YEARS
- ---------------- ------------- -----------------------
OFFICERS:
- --------
BRUCE N. ALPERT Since 2003 Executive Vice President and Chief Operating Officer of
President and Treasurer Gabelli Funds, LLC since 1988 and an officer of all
Age: 54 of the registered investment companies in the Gabelli
Funds complex. Director and President of Gabelli
Advisers,Inc. since 1998.
JAMES E. MCKEE Since 1995 Vice President, General Counsel and Secretary of
Secretary GAMCO Investors, Inc. since 1999 and GAMCO Asset
Age: 42 Management Inc. since 1993; Secretary of all of
the registered investment companies in the
Gabelli Funds complex.
PETER D. GOLDSTEIN Since 2004 Director of Regulatory Affairs for GAMCO Investors,
Chief Compliance Officer Inc. Compliance Officer since 2004; Chief
Age: 52 Compliance Officer of all of the registered investment
companies in the Gabelli Funds complex; Vice
President of Goldman Sachs Asset Management
from 2000 through 2004.
- ------------------
1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
2 Each Director will hold office for an indefinite term until the earliest of
(i) the next meeting of shareholders, if any, called for the purpose of
considering the election or re-election of such Director and until the
election and qualification of his or her successor, if any, elected at such
meeting, or (ii) the date a Director resigns or retires, or a Director is
removed by the Board of Directors or shareholders, in accordance with the
Fund's By-Laws and Articles of Incorporation. Each officer will hold office
for an indefinite term until the date he or she resigns or retires or until
his or her successor is elected and qualified. Effective November 16, 2005,
Mr. Karl Otto Pohl resigned from the Board of Directors and now serves as
Director Emeritus.
3 "Interested person" of the Fund as defined in the Investment Company Act of
1940. Mr. Gabelli is considered an "interested person" because of his
affiliation with Gabelli Funds, LLC which acts as the Fund's investment
adviser.
4 This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934(i.e. public companies) or
other investment companies registered under the 1940 Act.
18
- --------------------------------------------------------------------------------
GABELLI FUNDS AND YOUR PERSONAL PRIVACY
================================================================================
WHO ARE WE?
The Gabelli/GAMCO Funds are investment companies registered with the Securities
and Exchange Commission under the Investment Company Act of 1940. We are managed
by Gabelli Funds, LLC and Gabelli Advisers, Inc., which are affiliated with
GAMCO Investors, Inc. GAMCO Investors, Inc. is a publicly held company that has
subsidiaries that provide investment advisory or brokerage services for a
variety of clients.
WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A
GABELLI CUSTOMER?
If you apply to open an account directly with us, you will be giving us some
non-public information about yourself. The non-public information we collect
about you is:
o INFORMATION YOU GIVE US ON YOUR APPLICATION FORM. This could include your
name, address, telephone number, social security number, bank account
number, and other information.
o INFORMATION ABOUT YOUR TRANSACTIONS WITH US, ANY TRANSACTIONS WITH OUR
AFFILIATES, AND TRANSACTIONS WITH THE ENTITIES WE HIRE TO PROVIDE SERVICES
TO YOU. This would include information about the shares that you buy or
redeem, and the deposits and withdrawals that you make. If we hire someone
else to provide services--like a transfer agent--we will also have
information about the transactions that you conduct through them.
WHAT INFORMATION DO WE DISCLOSE AND TO WHOM DO WE DISCLOSE IT?
We do not disclose any non-public personal information about our customers or
former customers to anyone, other than our affiliates, our service providers who
need to know such information, and as otherwise permitted by law. If you want to
find out what the law permits, you can read the privacy rules adopted by the
Securities and Exchange Commission. They are in volume 17 of the Code of Federal
Regulations, Part 248. The Commission often posts information about its
regulations on its web site, www.sec.gov.
WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION?
We restrict access to non-public personal information about you to the people
who need to know that information in order to provide services to you or the
Fund and to ensure that we are complying with the laws governing the securities
business. We maintain physical, electronic, and procedural safeguards to keep
your personal information confidential.
- --------------------------------------------------------------------------------
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 Anthony R. Pustorino
CHAIRMAN AND CHIEF CERTIFIED PUBLIC ACCOUNTANT
EXECUTIVE OFFICER PROFESSOR EMERITUS
GAMCO INVESTORS, INC. PACE UNIVERSITY
Anthony J. Colavita Werner J. Roeder, MD
ATTORNEY-AT-LAW MEDICAL DIRECTOR
ANTHONY J. COLAVITA, P.C. LAWRENCE HOSPITAL
Robert J. Morrissey
ATTORNEY-AT-LAW
MORRISSEY, HAWKINS & LYNCH
OFFICERS
Bruce N. Alpert James E. McKee
PRESIDENT AND TREASURER SECRETARY
Peter D. Goldstein
CHIEF COMPLIANCE OFFICER
CUSTODIAN
Mellon Trust of New England, N.A.
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.
- --------------------------------------------------------------------------------
GAB409Q405SR
[GRAPHIC OMITTED]
TRIANGLE ART
THE
GABELLI
VALUE
FUND
INC.
ANNUAL REPORT
DECEMBER 31, 2005
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, and that relates to any element of
the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, that relates to one or more of the
items set forth in paragraph (b) of this item's instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's Board of
Directors has determined that Anthony R. Pustorino is qualified to serve as an
audit committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$47,858 in 2005 and $50,874 in 2004.
AUDIT-RELATED FEES
(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $0 in 2005 and $0 in 2004.
TAX FEES
(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $2,880 in 2005 and $2,550
in 2004.
Tax fees represent tax compliance services provided in connection with
the review of the Registrant's tax returns.
ALL OTHER FEES
(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are $0
in 2005 and $0 in 2004.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
Pre-Approval Policies and Procedures. The Audit Committee ("Committee")
of the registrant is responsible for pre-approving (i) all audit and
permissible non-audit services to be provided by the independent
auditors to the registrant and (ii) all permissible non-audit services
to be provided by the independent auditors to the Adviser, Gabelli
Funds, LLC, and any affiliate of Gabelli Funds, LLC ("Gabelli") that
provides services to the registrant (a "Covered Services Provider") if
the independent auditors' engagement related directly to the operations
and financial reporting of the registrant. The Committee may delegate
its responsibility to pre-approve any such audit and permissible
non-audit services to the Chairperson of the Committee, and the
Chairperson must report to the Committee, at its next regularly
scheduled meeting after the Chairperson's pre-approval of such
services, his or her decision(s). The Committee may also establish
detailed pre-approval policies and procedures for pre-approval of such
services in accordance with applicable laws, including the delegation
of some or all of the Committee's pre-approval responsibilities to the
other persons (other than Gabelli or the registrant's officers).
Pre-approval by the Committee of any permissible non-audit services is
not required so long as: (i) the aggregate amount of all such
permissible non-audit services provided to the registrant, Gabelli and
any Covered Services Provider constitutes not more than 5% of the total
amount of revenues paid by the registrant to its independent auditors
during the fiscal year in which the permissible non-audit services are
provided; (ii) the permissible non-audit services were not recognized
by the registrant at the time of the engagement to be non-audit
services; and (iii) such services are promptly brought to the attention
of the Committee and approved by the Committee or Chairperson prior to
the completion of the audit.
(e)(2) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) N/A
(c) 100%
(d) N/A
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was zero percent (0%).
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services
to the registrant for each of the last two fiscal years of the
registrant was $0 in 2005 and $0 in 2004.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
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.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's second fiscal
quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is
attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The Gabelli Value Fund Inc.
--------------------------------------------------------------------
By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer
Date March 10, 2006
----------------------------------------------------------------------------
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 & Principal
Financial Officer
Date March 10, 2006
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.