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			811-21485

Cohen & Steers Select Utility Fund, Inc.
(Exact name of registrant as specified in charter)

280 Park Avenue, 10th Floor, New York, NY					10017
(Address of principal executive offices)					(Zip code)

Adam M. Derechin Cohen & Steers Capital Management, Inc. 280 Park Avenue New York, New York 10017
(Name and address of agent for service)

Registrant’s telephone number, including area code:				(212) 832-3232

Date of fiscal year end:	December 31

Date of reporting period:		December 31, 2008

We are pleased to submit to you our report for the year ended December 31, 2008. The net asset value at that date was $13.21 per common share. The Fund's common stock is traded on the New York Stock Exchange (NYSE) and its share price can differ from its net asset value; at year end, the Fund's closing price on the NYSE was $10.30. The total returns, including income, for the Fund and the comparative benchmarks were:

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

A quarterly dividend of $0.24 per common share was declared and will be paid to common shareholders on March 31, 2009.^c The Fund may pay distributions in excess of the Fund's investment company taxable income and net realized capital gains. This excess would be a "return of capital" distributed from the Fund's assets. Distributions of capital decrease the Fund's total assets and, therefore, could have the effect of increasing the Fund's expense ratio. In addition, in order to make these distributions, the Fund may have to sell portfolio securities at a less than opportune time.

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

^b S&P 1500 Utilities Index is an unmanaged market capitalization weighted index of 72 companies whose primary business involves the generation, transmission and/or distribution of electricity and/or natural gas. The S&P 500 Index is an unmanaged index of common stocks that is frequently used as a general measure of stock market performance. The Merrill Lynch Fixed Rate Preferred Index is an unmanaged index of preferred securities.

^c Please note that distributions paid by the Fund to shareholders are subject to recharacterization for tax purposes. The final tax treatment of these distributions is reported to shareholders after the close of the calendar year.

The year was volatile for equities in the United States and around the world. It began with a sell-off driven by a fresh wave of write-downs from major banks, followed by the hastily arranged sale of Bear Stearns to JPMorgan Chase. The shocks kept coming, picking up speed in September with the U.S. government takeover of Fannie Mae and Freddie Mac, Lehman Brothers' bankruptcy and the nationalization of insurance giant AIG.

Amid concerns that the entire financial system could be at risk, the U.S. Congress, Treasury secretary and Federal Reserve chairman structured a $700 billion rescue package that has been used to buy preferred shares in banks to bolster capital and encourage lending. The Fed and other central banks dropped interest rates and implemented stimulus packages in a coordinated effort to break the credit freeze and kick-start the global economy.

Utilities stocks declined in this environment, but not as much as the broader equity market. Utilities' defensive characteristics—less cyclical revenues that benefit from regulation, minimal competition and stable underlying demand—often help relative performance during periods of sharp market downturns.

The utilities market was influenced by trends in natural gas prices, which are a key determinant of U.S. power prices—and therefore, in many cases, utilities' profit margins. Prices for natural gas and other commodities surged in the first half of the year, only to have a strong retreat in the second half. The reversal, and concerns that prices still had room to fall, weighed disproportionately on utilities that operate in unregulated markets, such as some integrated utilities and independent power producers.

Preferred securities outperformed common stocks in 2008, but still experienced their worst bear market in history, with a total return of –25.2% as measured by the Merrill Lynch Fixed Rate Preferred Index. This reflected economic concerns and turmoil within the financial services industry (financial institutions are heavily represented in the preferred market). However, preferreds ended the year on a more positive note, lifted by the massive global policy response to support global banking systems.

The Fund employs leverage as part of an income-enhancement strategy. While leverage can increase total return in rising markets, it can have the opposite effect in declining markets. In the year ended December 31, 2008, the Fund's leverage detracted significantly from its performance, magnifying the steep decline in the securities it held. As described on page 1, the Fund had a total return on net asset value of –49.17%, compared with a total return of –26.70% for the unleveraged S&P 1500 Utilities Index. That decline started early in the year and was more significant in the fourth quarter.

The Fund's leverage initially consisted of auction market preferred securities (AMPS). Then, in the first quarter of 2008, the AMPS market experienced a major disruption that resulted in failed auctions for many of these securities, including the Fund's. The Fund's Board of Directors and its advisor sought a solution that would preserve

the interests of both common and preferred shareholders; and in the third quarter, the Fund entered into a financing arrangement that, along with portfolio liquidations, allowed it to redeem $360 million of its outstanding AMPS and helped diversify its capital structure.

During the fourth quarter of 2008, extreme swings in the equities markets also resulted in volatility in the net asset value of the Fund, causing the Fund to reduce its leverage by $262 million in order to meet required regulatory and rating agency thresholds governing leverage ratios.

In light of these market conditions, which included lower asset values, reduced net investment income and the effects of deleveraging by $262 million, the Fund's Board of Directors changed from a monthly to a quarterly distribution payment schedule and reduced the distribution rate, beginning with the distribution to be paid in March 2009, to reflect the Fund's current estimated net investment income.

The Fund underperformed its benchmarks. Benchmarks do not use leverage and their performance does not reflect its impact. The Fund's utilities holdings underperformed the S&P 1500 Utilities Index. Factors that hindered relative return included our allocation to integrated and electric utilities that own deregulated power plants, as these stocks were hampered by the reversal in commodity prices. Stock selection in the oil and gas storage and transportation sector detracted from performance, more than countering the favorable effect of our overweight in gas pipelines. Our underweight in regulated utilities also hindered relative return.

Performance was helped by our underweight in the lower-yielding independent power producers sector, which had a sizable decline, although stock selection partly offset this. Our allocation to preferred securities, which we consider an important source of income, had little net effect on the Fund's performance compared with the blended benchmark. While security selection was relatively favorable, our underweight detracted from relative return.

We believe that utilities remain attractive, even after discounting the effects that challenging economic and financial conditions are likely to have on earnings and cash flows. Utilities stocks are trading at a multiple of 11.3x year-ahead earnings, well below the long-term average of 14x. We believe that long-term earnings growth should be approximately 7% on an annualized basis, ahead of the 3-4% historical average as fundamentals remain healthy—steady increases in demand over time, with supply constrained by regulatory factors.

We favor regulated utilities that have strong balance sheets and attractive infrastructure opportunities. We also believe that our integrated utility holdings should experience rising values for their generation assets as supply and demand tighten over the next several years.

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

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

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

Our leverage strategy utilizes a combination of auction market preferred shares (AMPS) and borrowings, potentially, up to the maximum permitted by the 1940 Act under certain market conditions, to provide additional capital for the Fund, with an objective of increasing the net income available for common shareholders. As of December 31, 2008, leverage represented 41% of the Fund's managed assets, with AMPS and borrowings each representing 31% and 10%, respectively.

It has been our philosophy to utilize interest rate swap transactions to seek to reduce the interest rate risk inherent in our utilization of leverage. Considering that AMPS have variable dividend rates and borrowings have variable interest rate payments, we seek to lock in those rates on a significant portion of this additional capital through interest rate swap agreements (where we effectively convert our variable rate obligation to a fixed rate obligation for the term of the swap agreements). Specifically, as of December 31, 2008, we have fixed the rate on 45% of our leverage at an average interest rate of 3.4% for an average remaining period of 4.3 years (when we first entered into the swaps, the average term was 5.3 years). Locking in a significant portion of our leveraging costs is designed to protect the dividend-paying ability of the Fund. The use of leverage increases the volatility of the Fund's net asset value in both up and down markets. However, we believe that locking in a portion of the Fund's leveraging costs for the term of the swap agreements partially protects the Fund's expenses from an increase in short-term interest rates.

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

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

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

^a A portion or all of the security is pledged in connection with the revolving credit agreement: $231,752,152 has been pledged as collateral.

^b A portion of the security is segregated as collateral for interest rate swap transactions: $20,232,950 has been segregated as collateral.

^c Fair valued security. This security has been valued at its fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors. Aggregate fair value securities represent 7.1% of net assets applicable to common shares of the Fund, all of which have been fair valued pursuant to foreign security fair value pricing procedures approved by the Board of Directors.

^d Illiquid security. Aggregate holdings equal 0.5% of net assets applicable to common shares of the Fund.

^e Resale is restricted to qualified institutional investors. Aggregate holdings equal 5.0% of net assets applicable to common shares of the Fund.

^a Based on LIBOR (London Interbank Offered Rate). Represents rates in effect at December 31, 2008.

^a Includes undistributed net investment income and dividends in excess of net investment income of $4,450,522 and $1,255,118, respectively.

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

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

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

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

Cohen & Steers Select Utility Fund, Inc. (the Fund) was incorporated under the laws of the State of Maryland on January 8, 2004 and is registered under the Investment Company Act of 1940, as amended, as a nondiversified closed-end management investment company. The Fund's investment objective is a high level of after-tax total return.

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

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

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

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

Portfolio securities primarily traded on foreign markets are generally valued at the closing values of such securities on their respective exchanges or if after the close of the foreign markets, but prior to the close of business on the day the securities are being valued, market conditions change significantly, certain foreign securities may be fair valued pursuant to procedures established by the Board of Directors.

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

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

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

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

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

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

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

The following is a summary of the inputs used as of December 31, 2008 in valuing the Fund's investments carried at value:

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

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

Options: The Fund may write covered call options on an index or a security. When a Fund writes (sells) an option, an amount equal to the premium received by the Fund is recorded in the Statement of Assets and Liabilities as a liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of

the option written. When an option expires, the Fund realizes a gain or loss on the option to the extent of the premiums received. Premiums received from writing options which are exercised or are closed, are added to or offset against the proceeds or amount paid on the transaction to determine the realized gain or loss. The Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the underlying index or security. Other risks include the possibility of an illiquid options market or the inability of the counterparties to fulfill their obligations under the contract.

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

Foreign Securities: The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the ability to repatriate funds, less complete financial information about companies and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.

Interest Rate Swaps: The Fund uses interest rate swaps in connection with the sale of preferred shares and borrowings under its credit agreement. The interest rate swaps are intended to reduce the risk that an increase in short-term interest rates could have on the performance of the Fund's common shares as a result of the floating rate structure of the preferred shares and the credit agreement. In these interest rate swaps, the Fund agrees to pay the other party to the interest rate swap (which is known as the counterparty) a fixed rate payment in exchange for the counterparty agreeing to pay the Fund a variable rate payment that is intended to approximate the Fund's variable rate payment obligation on the preferred shares and the credit agreement. The payment obligation is based on the notional amount of the swap. Depending on the state of interest rates in general, the use of interest rate swaps could enhance or harm the overall performance of the common shares. The market value of interest rate swaps is based on pricing models that consider the time value of money, volatility, the current market and contractual prices of the underlying financial instrument. Unrealized appreciation is reported as an asset and unrealized depreciation is reported as a liability on the Statement of Assets and Liabilities. The change in value of swaps, including the accrual of periodic amounts of interest to be paid or received on swaps, is reported as

unrealized appreciation or depreciation in the Statement of Operations. A realized gain or loss is recorded upon payment or receipt of a periodic payment or termination of swap agreements. Swap agreements involve, to varying degrees, elements of market and counterparty risk, and exposure to loss in excess of the related amounts reflected in the Statement of Assets and Liabilities.

For each swap counterparty, the Fund entered into an International Swap Dealers Association Inc. Master Agreement and related annexes thereto ("ISDAs") which sets forth the general terms and conditions of the Fund's swap transactions. During 2008, the Fund notified Merrill Lynch Derivative Products AG ("MLDP"), UBS AG ("UBS") and Royal Bank of Canada ("RBC") that it breached certain terms and conditions of its ISDAs. On November 21, 2008, UBS granted a conditional waiver to the Fund stating that UBS did not intend to presently exercise its rights under the ISDA.

At December 31, 2008, the Fund continues to operate under the existing terms of all of its various ISDAs, including those with MLDP, UBS and RBC. However, MLDP, UBS and RBC reserve any and all rights to take any future action with respect to such events, including termination of outstanding swap transactions; termination or renegotiation of the ISDAs; posting of collateral in the form of cash or U.S. Treasury securities representing the unrealized depreciation on outstanding interest rate swap transactions or continuation under the current terms of the ISDAs. Any action resulting in the early termination of an interest rate swap transaction would cause the Fund to realize any market depreciation that existed on such transaction. In addition to realizing such losses, the early termination of a swap transaction may generate additional expenses for the Fund.

Dividends and Distributions to Shareholders: Dividends from net investment income and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from GAAP. Dividends from net investment income are declared and paid monthly. Commencing in 2009, dividends will be declared and paid quarterly. Net realized capital gains, unless offset by any available capital loss carryforward, are typically distributed to shareholders at least annually. Dividends and distributions to shareholders are recorded on the ex-dividend date and are automatically reinvested in full and fractional shares of the Fund unless the shareholder has elected to have them paid in cash.

Distributions paid by the Fund are subject to recharacterization for tax purposes. Based upon the results of operations for the year ended December 31, 2008, a portion of the dividends have been reclassified to return of capital.

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

Series T28 and Series TH28 preferred shares pay dividends based on a variable interest rate set at auctions, normally held every 28 days. The dividends are declared and recorded for the subsequent 28 day period on the auction date. In most instances, dividends are payable every 28 days, on the first business day following the end of the dividend period.

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

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

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

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

The investment manager has contractually agreed to waive its investment management fee in the amount of 0.20% of average daily managed asset value for the first five years of the Fund's operations, 0.15% of average daily managed asset value in year six, 0.10% of average daily managed asset value in year seven and 0.05% of average daily managed asset value in year eight. During the year ended December 31, 2008 the investment manager waived its fee at the annual rate of 0.20%.

Administration Fees: The Fund has entered into an administration agreement with the investment manager under which the investment manager performs certain administrative functions for the Fund and receives a fee, accrued daily and paid monthly, at the annual rate of 0.06% of the Fund's average daily managed assets up to $1 billion, 0.04% of

the Fund's average daily managed assets in excess of $1 billion up to $1.5 billion and 0.02% of the Fund's average daily managed assets in excess of $1.5 billion. For the year ended December 31, 2008, the Fund incurred $791,150 in administration fees. Additionally, the Fund pays State Street Bank and Trust Company as sub-administrator under a Fund accounting and administration agreement.

Directors' and Officers' Fees: Certain directors and officers of the Fund are also directors, officers, and/or employees of the investment manager. The Fund does not pay compensation to any affiliated directors and officers except for the Chief Compliance Officer, who received $16,168 from the Fund for the year ended December 31, 2008.

Purchases and sales of securities, excluding short-term investments, for the year ended December 31, 2008, totaled $443,770,781 and $812,061,791, respectively.

Transactions in options written during the year ended year ended December 31, 2008, were as follows:

As of December 31, 2008, the tax-basis components of accumulated earnings and the federal tax cost were as follows:

The other cost basis adjustments are primarily attributable to depreciation on interest rate swaps and book/tax adjustments on partnership investments.

As of December 31, 2008, the Fund had a net capital loss carryforward of $57,633,270, which will expire on December 31, 2016. This carryforward may be used to offset future capital gains to the extent provided by regulations.

As of December 31, 2008, the Fund had temporary book/tax differences primarily attributable to wash sales on portfolio securities and permanent book/tax differences primarily attributable to differing treatment on interest rate swaps and income redesignations. To reflect reclassifications arising from the permanent differences, paid-in capital was charged $2,990,213, accumulated net realized loss was credited $3,608,381 and accumulated net investment income was charged $618,168.

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

During the years ended December 31, 2008 and December 31, 2007, the Fund issued no shares of common stock, for the reinvestment of dividends.

On June 12, 2008, the Board of Directors of the Fund approved the delegation of its authority to management to effect repurchases, pursuant to management's discretion and subject to market conditions and investment considerations, of up to 10% of the Fund's total assets through the current fiscal year ending December 31, 2008. During the period of this report, the Fund did not effect any repurchases. On December 17, 2008, the Board of Directors authorized the continuation of the Share Repurchase Program through fiscal year ending December 31, 2009.

On February 14, 2007, the Fund issued 3,400 auction market preferred shares, Series T7-2 (par value $0.001). Proceeds paid to the Fund amounted to $83,925,000 after deduction of underwriting commissions and offering expenses of $1,075,000. This issue has received a "AAA/Aaa" rating from Standard & Poor's and Moody's.

During the year ended December 31, 2008, an adjustment of $4,920 was debited to common stock for differences between estimated and actual preferred offering costs.

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

Preferred shares are senior to the Fund's common shares and will rank on a parity with shares of any other series of preferred shares, and with shares of any other series of preferred stock of the Fund, as to the payment of dividends and the distribution of assets upon liquidation. If the Fund does not timely cure a failure to (1) maintain a discounted value of its portfolio equal to the preferred shares basic maintenance amount, (2) maintain the 1940 Act preferred shares asset coverage, or (3) file a required certificate related to asset coverage on time, the preferred shares will be subject to a mandatory redemption at the redemption price of $25,000 per share plus an amount equal to accumulated but unpaid dividends thereon to the date fixed for redemption. To the extent permitted under the 1940 Act and Maryland Law, the Fund at its option may without consent of the holders of preferred shares, redeem preferred shares having a dividend period of one year or less, in whole, or in part, on the business day after the last day of such dividend period upon not less than 15 calendar days and not more than 40 calendar days prior to notice. The optional redemption price is $25,000 per share plus an amount equal to accumulated but unpaid dividends thereon to the date fixed for redemption.

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

The following table reflects the preferred shares issued and outstanding in the amount of $292,000,000 as of December 31, 2008, along with the range of dividend rates paid during the year ended December 31, 2008:

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

An existing owner of AMPS may sell, transfer or dispose of AMPS only in an auction, pursuant to a bid or sell order in accordance with the auction procedures, or outside an auction, to or through a broker-dealer. Existing holders will be able to sell all of the AMPS that are the subject of their submitted sell orders only if there are bidders

willing to purchase those AMPS in the auction. An auction fails when there are an insufficient number of bidders. A failed auction is not a default. Dividends continue to be paid on the AMPS at the maximum rate rather than an auction rate. Broker-dealers, which have been appointed by the Fund to serve as dealers for the auctions, may submit a bid in an auction to avoid an auction failure, but are not obligated to do so. Due to liquidity concerns in the market, most broker-dealers have decided not to submit bids to purchase AMPS.

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

During the year ended December 31, 2008, the Fund redeemed $360,000,000 or approximately 55% of its outstanding preferred shares at a redemption price of $25,000 per share plus accrued but unpaid dividends. The partial redemption of the preferred shares was made on a pro rata basis across all preferred series. Redemptions were allocated among participating broker/dealers by the Depository Trust Company using a predetermined methodology and each broker/dealer allocated the redeemed shares to the underlying beneficiaries according to its own procedures.

On September 23, 2008, the Fund entered into a $360,000,000 revolving credit agreement (the credit agreement) with BNP Paribas Prime Brokerage Inc. (BNPP). The Fund pays a facility fee of 0.95% per annum on the unused portion of the credit agreement. The credit agreement has a 270-day rolling term that resets daily; however, if the Fund exceeds certain net asset value triggers the credit agreement may convert to a 60-day rolling term that resets daily. The Fund is required to segregate portfolio securities as collateral in an amount up to two

times the loan balance outstanding and has granted a security interest in the securities segregated to, and in favor of, BNPP as security for the loan balance outstanding. If the Fund fails to meet certain requirements, or maintain other financial covenants required under the credit agreement, the Fund may be required to repay immediately, in part or in full, the loan balance outstanding under the credit agreement necessitating the sale of portfolio securities at potentially inopportune times. The credit agreement also permits, subject to certain conditions, BNPP to re-hypothecate portfolio securities segregated by the Fund up to the amount of the loan balance outstanding. The Fund will receive a portion of the fees earned by BNPP in connection with the re-hypothecation of portfolio securities.

As of December 31, 2008 the Fund has an outstanding borrowing of $98,150,000. During the year ended, the Fund borrowed an average daily balance of $21,433,880 at a weighted average borrowing cost of 2.66%. During the year ended December 31, 2008, BNPP did not re-hypothecate portfolio securities.

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

In March 2008, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities ("FAS 161"), an amendment of FASB Statement No. 133. FAS 161 requires enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect the Fund's financial position, financial performance, and cash flows. Management is currently evaluating the impact the adoption of this pronouncement will have on the Fund's financial statements. FAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008.

To the Board of Directors and Shareholders of
Cohen & Steers Select Utility 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 Cohen & Steers Select Utility Fund, Inc. (the "Fund") at December 31, 2008, 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, 2008 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

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

Pursuant to the Jobs and Growth Relief Reconciliation Act of 2003, the Fund designates qualified dividend income of $55,150,095. Additionally, 72.4% of the ordinary dividends qualified for the dividends received deduction available to corporations.

On March 18, 2008, the Board of Directors of the Fund approved changes to the Fund's dividend reinvestment plan (the "Plan"). The revised Plan is set forth below.

The Fund has a dividend reinvestment plan commonly referred to as an "opt-out" plan. Each common shareholder who participates in the Plan will have all distributions of dividends and capital gains ("Dividends") automatically reinvested in additional common shares by The Bank of New York Mellon as agent (the "Plan Agent"). Shareholders who elect not to participate in the Plan will receive all Dividends in cash paid by check mailed directly to the shareholder of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent, as dividend disbursing agent. Shareholders whose common shares are held in the name of a broker or nominee should contact the broker or nominee to determine whether and how they may participate in the Plan.

The Plan Agent serves as agent for the shareholders in administering the Plan. After the Fund declares a Dividend, the Plan Agent will, as agent for the shareholders, either: (i) receive the cash payment and use it to buy common shares in the open market, on the NYSE or elsewhere, for the participants' accounts or (ii) distribute newly issued common shares of the Fund on behalf of the participants.

The Plan Agent will receive cash from the Fund with which to buy common shares in the open market if, on the Dividend payment date, the net asset value ("NAV") per share exceeds the market price per share plus estimated brokerage commissions on that date. The Plan Agent will receive the Dividend in newly issued common shares of the Fund if, on the Dividend payment date, the market price per share plus estimated brokerage commissions equals or exceeds the NAV per share of the Fund on that date. The number of shares to be issued will be computed

at a per share rate equal to the greater of (i) the NAV or (ii) 95% of the closing market price per share on the payment date.

If the market price per share is less than the NAV on a Dividend payment date, the Plan Agent will have until the last business day before the next ex-dividend date for the common stock, but in no event more than 30 days after the Dividend payment date (as the case may be, the "Purchase Period"), to invest the Dividend amount in shares acquired in open market purchases. If at the close of business on any day during the Purchase Period on which NAV is calculated the NAV on Dividend payment date equals or is less than the market price per share on such day plus estimated brokerage commissions, the Plan Agent will cease making open market purchases and the uninvested portion of such Dividends shall be filled through the issuance of new shares of common stock from the Fund at the price set forth in the immediately preceding paragraph.

Participants in the Plan may withdraw from the Plan upon notice to the Plan Agent. Such withdrawal will be effective immediately if received not less than ten days prior to a Dividend record date; otherwise, it will be effective for all subsequent Dividends. When a participant withdraws from the Plan or upon termination of the Plan as provided below, certificates for whole common shares credited to his or her account under the Plan will be issued and a cash payment will be made for any fraction of a common share credited to such account. If any participant elects to have the Plan Agent sell all or part of his or her shares and remit the proceeds, the Plan Agent is authorized to deduct a $15.00 fee plus $0.10 per share brokerage commissions.

The Plan Agent's fees for the handling of reinvestment of Dividends will be paid by the Fund. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent's open market purchases in connection with the reinvestment of Dividends. The automatic reinvestment of Dividends will not relieve participants of any income tax that may be payable or required to be withheld on such Dividends.

The Fund reserves the right to amend or terminate the Plan. All correspondence concerning the Plan should be directed to the Plan Agent at 800-432-8224.

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

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

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

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that the Fund may purchase, from time to time, shares of its common stock in the open market.

On March 18, 2008, the Board of Directors of the Fund approved the expansion of the options strategy to permit the Fund to write options on custom baskets of securities and customized indexes and to remove any requirement that a fund must hold an exchange-traded fund ("ETF") as a portfolio security in order to write an option on an ETF.

The Fund may write covered call options on securities (including securities of ETFs), stock indices or custom baskets of securities that are traded on U.S. or foreign exchanges or over-the-counter (OTC). An option on a security is a contract that gives the purchaser of the option, in return for the premium paid, the right to buy a specified security (in the case of a call option) from the writer of the option at a designated price during the term of the option. An option on a securities index or basket of securities gives the purchaser of the option, in return for the premium paid, the right to receive from the seller cash equal to the difference between the closing price of the index or basket of securities and the exercise price of the option.

The Fund may write a call option on a security (other than securities of ETFs) only if the option is "covered." A call option on a security written by the Fund is covered if the Fund owns the underlying security covered by the call. The Fund will cover call options on ETFs, stock indices or custom baskets by owning securities whose price changes, in the opinion of the investment manager, are expected to be similar to those of the ETF, index or basket, or in such other manner as may be in accordance with the rules of any exchange on which the option is traded and other applicable laws and regulations. Nevertheless, where the Fund covers a call option on an ETF, stock index or custom basket through ownership of securities, such securities may not match the composition of the ETF, index or basket. In that event, the Fund will not be fully covered and could be subject to risk of loss in the event of adverse changes in the value of the ETF, index or basket.

The value of the underlying securities, ETFs, indices and baskets on which options may be written at any one time will not exceed 25% of the total managed assets of the Fund.

The Fund will receive a premium for writing a call option, which will increase the Fund's realized gains in the event the option expires unexercised or is closed out at a profit. If the value of a security, ETF, index or basket

on which the Fund has written a call option falls or remains the same, the Fund will realize a profit in the form of the premium received (less transaction costs) that could offset all or a portion of any decline in the value of the portfolio securities being hedged. A rise in the value of the underlying security, ETF, index or basket, however, exposes the Fund to possible loss or loss of opportunity to realize appreciation in the value of the underlying security, ETF, index or basket.

There can be no assurance that a liquid market will exist when the Fund seeks to close out an option position. Trading could be interrupted, for example, because of supply and demand imbalances arising from a lack of either buyers or sellers, or the options exchange could suspend trading after the price has risen or fallen more than the maximum specified by the exchange. In addition, when the Fund enters into OTC options (including options on custom baskets of securities), these options are not traded on or govern by the rules of any exchange, and the Fund's ability to close out an OTC option is subject to the terms of the option contract and the creditworthiness of the option counterparty. Although the Fund may be able to offset to some extent any adverse effects of being unable to liquidate an option position, the Fund may experience losses in some cases as a result of such inability.

On June 18, 2008, the Board of Directors of the Fund approved changes to the Fund's policies and procedures with respect to the disclosure of the Fund's portfolio securities permitting the Fund to post an uncertified list of portfolio holdings on the Web site at http://www.cohenandsteers.com, no earlier than 15 days after the end of each calendar quarter. The holdings information remains available until the Fund files a report on Form N-Q or Form NCSR for the period that includes the date as of which the information is current. In addition to information on portfolio holdings, other Fund statistical information may be found on the Cohen & Steers Funds' Web site or by calling 800-330-7348.

On October 3, 2008, the Board of Directors of the Fund approved changes to the Fund's investment policies to permit the Fund to invest in securities of other closed-end or open-end funds, including exchange traded funds ("ETFs"), in accordance with Section 12(d)(1) of the 1940 Act and the rules thereunder, or any exemption granted under the 1940 Act. An investment in the shares of another fund is subject to the risks associated with that fund's portfolio securities. To the extent the Fund invests in shares of another fund, Fund shareholders would indirectly pay a portion of that fund's expenses, including advisory fees, brokerage and other distribution expenses. These fees and expenses are in addition to the direct expenses of the Fund's own operations.

In connection with the ability of BNPP to re-hypothecate portfolio securities segregated by the Fund in connection with a credit agreement between the Fund and BNPP (See Note 6 in the Notes to Financial Statements), the Board of Directors of the Fund, on October 3, 2008, approved a securities lending program and adopted procedures consistent with the requirements imposed by the SEC to permit the Fund to lend portfolio securities to broker/dealers or other institutions. A borrower must maintain with the Fund cash or equivalent collateral equal to at least 100% of the market value of the securities loaned. During the time portfolio securities are on loan, the borrower pays the Fund any dividends or interest paid on the securities. Loans are subject to termination at the option of the Fund or the borrower. The Fund does not have the right to vote securities on loan, but retains the right to vote if a material adverse event occurs with respect to the investment. The Fund may lose money if a borrower defaults on its obligation to return the loaned securities and the value of the collateral held by the Fund is

insufficient to replace the securities. Finally, dividends received from certain types of securities on loan are considered substitute payments and will lose the "qualified dividend income" or QDI benefit.

As required, the Fund has submitted to the New York Stock Exchange ("NYSE") the annual certification of the Fund's chief executive officer certifying as to compliance with of the NYSE's Corporate Governance listing standards. The Fund also has included the certifications of the Fund's chief executive officer and chief financial officer required by Section 302 of the Sarbanes-Oxley Act of 2002 as exhibits to its most recent Form N-CSR.

In the course of doing business with Cohen & Steers, you may share personal information with us. We are committed to maintaining the privacy of this information and recognize the importance of preventing unauthorized access to it. You may provide personal information on account applications and requests for forms or other literature (such as your address and social security number) and through account transactions with us (such as purchases, sales and account balances). You may also provide us with this information through written, electronic and telephone account inquiries.

We do not sell personal information about current and former customers to anyone, and we do not disclose it unless necessary to process a transaction, service an account or as otherwise required or permitted by law. For example, we may disclose information to companies that perform administrative services for Cohen & Steers, such as transfer agents, or printers that assist us in the distribution of investor materials. These organizations will use this information only for purposes of providing the required services or as otherwise may be required by law. We may also share personal information within the Cohen & Steers family of companies to provide you with additional information about our products and services.

We maintain physical, electronic and procedural safeguards to protect your personal information. Within Cohen & Steers, we restrict access to your personal information to those employees who need it to perform their jobs, such as servicing your account or informing you of new products and services.

The accuracy of your personal information is important. If you need to correct or update your personal or account information, please call us at 800-330-7348. We will be happy to review, correct or update your personal or account information.

The Board of Directors of the Fund, including a majority of the directors who are not parties to the Fund's investment management agreement (the "Management Agreement"), or interested persons of any such party ("Independent Directors"), has the responsibility under the 1940 Act to approve the Fund's Management Agreement for its initial two year term and its continuation annually thereafter at a meeting of the Board of Directors called for the purpose of voting on the approval or continuation. At a meeting held in person on December 16 - 17, 2008, the Management Agreement was discussed and was unanimously continued for a one-year term by the Fund's Board

* This privacy policy applies to the following Cohen & Steers companies: Cohen & Steers Capital Management, Inc., Cohen & Steers Securities, LLC, Cohen & Steers Capital Advisors, LLC and the Cohen & Steers Funds.

of Directors, including the Independent Directors. The Independent Directors were represented by independent counsel who assisted them in their deliberations during the meeting and executive session.

In considering whether to continue the Management Agreement, the Board of Directors reviewed materials provided by the Fund's investment manager (the "Investment Manager") and Fund counsel which included, among other things, fee, expense and performance information compared to peer funds ("Peer Funds") prepared by an independent data provider, supplemental performance and summary information prepared by the Investment Manager, and memoranda outlining the legal duties of the Board of Directors. The Board of Directors also spoke directly with representatives of the independent data provider and met with investment management personnel. In addition, the Board of Directors considered information provided from time to time by the Investment Manager throughout the year at meetings of the Board of Directors, including presentations by portfolio managers relating to the investment performance of the Fund and the investment strategies used in pursuing the Fund's objective. In particular, the Board of Directors considered the following:

(i) The nature, extent and quality of services to be provided by the Investment Manager: The Board of Directors reviewed the services that the Investment Manager provides to the Fund, including, but not limited to, making the day-to-day investment decisions for the Fund, and generally managing the Fund's investments in accordance with the stated policies of the Fund. The Board of Directors also discussed with officers and portfolio managers of the Fund the amount of time the Investment Manager dedicates to the Fund and the types of transactions that were being done on behalf of the Fund. Additionally, the Board of Directors took into account the services provided by the Investment Manager to its other funds, including those that invest substantially in utility securities and have investment objectives and strategies similar to the Fund.

The Board of Directors next considered the education, background and experience of the Investment Manager's personnel, noting particularly that the favorable history and reputation of the portfolio managers for the Fund, has had, and would likely continue to have, a favorable impact on the success of the Fund. The Board of Directors further noted the Investment Manager's ability to attract quality and experienced personnel. The Board of Directors then considered the administrative services provided by the Investment Manager, including compliance and accounting services. After consideration of the above factors, among others, the Board of Directors concluded that the nature, quality and extent of services provided by the Investment Manager are adequate and appropriate.

(ii) Investment performance of the Fund and the Investment Manager: The Board of Directors considered the investment performance of the Fund compared to Peer Funds and compared to relevant benchmarks. The Board of Directors noted that the Fund underperformed the median of the Peer Funds for the one- and three-year periods and also noted that the Fund has underperformed its blended benchmark over the same time periods. The Board of Directors also considered the Investment Manager's performance in managing other funds that invest in utility securities. The Board of Directors determined that Fund performance, in light of all the considerations noted above, was satisfactory.

(iii) Cost of the services to be provided and profits to be realized by the Investment Manager from the relationship with the Fund: Next, the Board of Directors considered the management fees and administrative fees payable by the Fund, as well as total expense ratios. As part of their analysis, the Board of Directors gave substantial consideration to the fee and expense analyses provided by the independent data provider. The Board of Directors noted that the actual management fees at common and managed asset levels were lower than the Peer Fund median, but that the contractual management fees were higher than the Peer Fund median. The Board of Directors noted that the Fund's net expense ratios at managed and common asset levels were lower than the Peer Fund median. The Board of Directors concluded that the Fund's current expense structure is competitive in the peer group.

The Board of Directors also reviewed information regarding the profitability to the Investment Manager of its relationship with the Fund. The Board of Directors considered the level of the Investment Manager's profits and whether the profits were reasonable for the Investment Manager. The Board of Directors noted that the Investment Manager was currently waiving fees and/or reimbursing expenses for the Fund. The Board of Directors took into consideration other benefits to be derived by the Investment Manager in connection with the Management Agreement, noting particularly the research and related services, within the meaning of Section 28(e) of the Securities Exchange Act of 1934, as amended, that the Investment Manager receives by allocating the Fund's brokerage transactions. The Board of Directors also considered the fees received by the Investment Manager from its administrative relationship with the Fund, but noted the significant services received, such as operational services and furnishing office space and facilities for the Fund, and providing persons satisfactory to the Board of Directors to serve as officers of the Fund, and that these services were beneficial to the Fund. The Board of Directors concluded that the profits realized by the Investment Manager from its administrative relationship with the Fund were reasonable and consistent with fiduciary duties.

(iv) The extent to which economies of scale would be realized as the Fund grows and whether fee levels would reflect such economies of scale: The Board of Directors considered that as a closed-end fund, the Fund would not be expected to have inflows of capital that might produce increasing economies of scale. The Board of Directors determined that, given the Fund's closed-end structure, shareholders appropriately benefited from economies of scale.

(v) Comparison of services rendered and fees paid to those under other investment management contracts, such as contracts of the same and other investment managers or other clients: As discussed above in (i) and (iii), the Board of Directors compared both the services rendered and the fees paid under the Management Agreement to those under other investment management contracts of other investment managers managing Peer Funds. The Board of Directors also compared both the services rendered and the fees paid under the Management Agreement to the Investment Manager's other fund advisory agreements. The Board of Directors determined that on a comparative basis the fees under the Management Agreement were reasonable in relation to the services provided.

No single factor was cited as determinative to the decision of the Board of Directors. Rather, after weighing all of the considerations and conclusions discussed above, the Board of Directors, including the Independent Directors, unanimously approved the continuation of the Management Agreement.

The business and affairs of the Fund are managed under the direction of the Board of Directors. The Board of Directors approves all significant agreements between the Fund and persons or companies furnishing services to it, including the Fund's agreements with its advisor, administrator, custodian and transfer agent. The management of the Fund's day-to-day operations is delegated to its officers, the advisor and the Fund's administrator, subject always to the investment objective and policies of the Fund and to the general supervision of the Board of Directors.

The directors and officers of the Fund and their principal occupations during the past five years are set forth below. The statement of additional information (SAI) includes additional information about fund directors and is available, without charge, upon request by calling 1-800-330-7348.

** The length of time served represents the year in which the director was first elected or appointed to any fund in the Cohen & Steers fund complex.

¹ "Interested person", as defined in the 1940 Act, of the Fund because of affiliation with CSCM.

** The length of time served represents the year in which the director was first elected or appointed to any fund in the Cohen & Steers fund complex.

¹ "Interested person", as defined in the 1940 Act, of the Fund because of affiliation with CSCM.

The officers of the Fund (other than Messrs. Cohen and Steers, whose biographies are provided above), their address, their ages and their principal occupations for at least the past five years are set forth below.

** Officers serve one-year terms. The length of time served represents the year in which the officer was first elected to that position in any fund in the Cohen & Steers fund complex. All of the officers listed above are officers of one or more of the other funds in the complex.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Item 2. Code of Ethics.

The registrant has adopted a Code of Ethics that applies to its Principal Executive Officer and Principal Financial Officer. The registrant undertakes to provide to any person without charge, upon request, a copy of the Code of Ethics. Such request can be made by calling 800-330-7348 or writing to the Secretary of the registrant, 280 Park Avenue, New York, NY 10017.

Item 3. Audit Committee Financial Expert.

The registrant’s board has determined that Frank K. Ross, a member of the board’s Audit Committee, is an “audit committee financial expert”. Mr. Ross is “independent,” as such term is defined in this Item.

Item 4. Principal Accountant Fees and Services.

(a) — (d) Aggregate fees billed to the registrant for the last two fiscal years for professional services rendered by the registrant’s principal accountant were as follows:

	2008		2007
Audit Fees	$	50,200	$	58,100
Audit-Related Fees	33,500		110,500
Tax Fees	15,800		14,500
All Other Fees	—		—

Audit-related fees were billed in connection with the preparation and issuance of certification reports to rating agencies relating to the registrant’s preferred shares. Tax fees were billed in connection with the preparation of tax returns, calculation and designation of dividends and other miscellaneous tax services.

Aggregate fees billed by the registrant’s principal accountant for the last two fiscal years for non-audit services provided to the registrant’s investment adviser (not including a sub-adviser whose role is primarily portfolio management and is subcontracted 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 registered investment company, where the engagement relates directly to the operations and financial reporting of the registrant, were as follows:

	2008		2007
Audit-Related Fees	—		—
Tax Fees	—		—
All Other Fees	$	110,000	$	85,000

These other fees were billed in connection with internal control reviews.

(e)(1) The registrant’s audit committee is required to pre-approve audit and non-audit services performed for the registrant by the principal accountant. The audit committee also is required to

pre-approve non-audit services performed by the registrant’s principal accountant for 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/or to any entity controlling, controlled by or under common control with the registrant’s investment adviser that provides ongoing services to the registrant, if the engagement for services relates directly to the operations and financial reporting of the registrant.

The audit committee may delegate pre-approval authority to one or more of its members who are independent members of the board of directors of the registrant. The member or members to whom such authority is delegated shall report any pre-approval decisions to the audit committee at its next scheduled meeting. The audit committee may not delegate its responsibility to pre-approve services to be performed by the registrant’s principal accountant to the investment adviser.

(e) (2) No services included in (b) — (d) above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g) For the fiscal years ended December 31, 2008 and December 31, 2007, the aggregate fees billed by the registrant’s principal accountant for non-audit services rendered to the registrant and for non-audit services 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/or to any entity controlling, controlled by or under common control with the registrant’s investment adviser that provides ongoing services to the registrant were $130,885 and $210,000, respectively.

(h) The registrant’s audit committee 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/or to any entity controlling, controlled by or under common control with the registrant’s investment adviser that provides ongoing services to the registrant that were not required to be pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X was compatible with maintaining the principal accountant’s independence.

Item 5. Audit Committee of Listed Registrants.

The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The members of the committee are Frank K. Ross (chairman), Bonnie Cohen, George Grossman and Richard E. Kroon.

Item 6. Schedule of Investments.

Included in Item 1 above.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

The registrant has delegated voting of proxies in respect of portfolio holdings to Cohen & Steers Capital Management, Inc., in accordance with the policies and procedures set forth below.

COHEN & STEERS CAPITAL MANAGEMENT, INC.

STATEMENT OF POLICIES AND PROCEDURES REGARDING THE VOTING OF SECURITIES

This statement sets forth the policies and procedures that Cohen & Steers Capital Management, Inc. (“C&S”) follows in exercising voting rights with respect to securities held in our client portfolios. All proxy-voting rights that are exercised by C&S shall be subject to this Statement of Policy and Procedures.

I. Objectives

Voting rights are an important component of corporate governance. The Advisor and the Subadvisor have three overall objectives in exercising voting rights:

A. Responsibility. The Advisor and Subadvisor shall seek to ensure that there is an effective means in place to hold companies accountable for their actions. While management must be accountable to its board, the board must be accountable to a company’s shareholders. Although accountability can be promoted in a variety of ways, protecting shareholder voting rights may be among our most important tools.

B. Rationalizing Management and Shareholder Concerns. The Advisor and Subadvisor seek to ensure that the interests of a company’s management and board are aligned with those of the company’s shareholders. In this respect, compensation must be structured to reward the creation of shareholder value.

C. Shareholder Communication. Since companies are owned by their shareholders, the Advisor and Subadvisor seek to ensure that management effectively communicates with its owners about the company’s business operations and financial performance. It is only with effective communication that shareholders will be able to assess the performance of management and to make informed decisions on when to buy, sell or hold a company’s securities.

In exercising voting rights, the Advisor and Subadvisor follow the general principles set forth below.

· The ability to exercise a voting right with respect to a security is a valuable right and, therefore, must be viewed as part of the asset itself.

· In exercising voting rights, the Advisor and Subadvisor shall engage in a careful evaluation of issues that may materially affect the rights of shareholders and the value of the security.

· Consistent with general fiduciary principles, the exercise of voting rights shall always be conducted with reasonable care, prudence and diligence.

· In exercising voting rights on behalf of clients, the Advisor and Subadvisor shall conduct itself in the same manner as if the Advisor and Subadvisor were the constructive owner of the securities.

· To the extent reasonably possible, the Advisor and Subadvisor shall participate in each shareholder voting opportunity.

· Voting rights shall not automatically be exercised in favor of management-supported proposals.

· The Advisor and Subadvisor, and its officers and employees, shall never accept any item of value in consideration of a favorable proxy voting decision.

Set forth below are general guidelines followed in exercising proxy voting rights:

Prudence. In making a proxy voting decision, the Advisor and Subadvisor shall give appropriate consideration to all relevant facts and circumstances, including the value of the securities to be voted and the likely effect any vote may have on that value. Since voting rights must be exercised on the basis of an informed judgment, investigation shall be a critical initial step.

Third Party Views. While the Advisor and Subadvisor may consider the views of third parties, the Advisor and Subadvisor shall never base a proxy voting decision solely on the opinion of a third party.

Rather, decisions shall be based on a reasonable and good faith determination as to how best to maximize shareholder value.

Shareholder Value. Just as the decision whether to purchase or sell a security is a matter of judgment, determining whether a specific proxy resolution will increase the market value of a security is a matter of judgment as to which informed parties may differ. In determining how a proxy vote may affect the economic value of a security, the Advisor and Subadvisor shall consider both short-term and long-term views about a company’s business and prospects, especially in light of our projected holding period on the stock (e.g., the Advisor and Subadvisor may discount long-term views on a short-term holding).

Set forth below are guidelines as to how specific proxy voting issues shall be analyzed and assessed.

While these guidelines will provide a framework for the Advisor and Subadvisor decision making process, the mechanical application of these guidelines can never address all proxy voting decisions.

When new issues arise or old issues present nuances not encountered before, the Advisor and Subadvisor must be guided by their reasonable judgment to vote in a manner that the Advisor and Subadvisor deem to be in the best interests of the Fund and its shareholders. In addition, because the regulatory framework and the business cultures and practices vary from region to region, the below general guidelines may be inconsistent in certain circumstances for proxies of issuers of securities in the Asia Pacific region.

Uncontested Director Elections

Votes on director nominees should be made on a case-by-case basis using a “mosaic” approach, where all factors are considered in director elections and where no single issue is deemed to be determinative.

For example, a nominee’s experience and business judgment may be critical to the long-term success of the portfolio company, notwithstanding the fact that he or she may serve on the board of more than four public companies. In evaluating nominees, the Advisor and Subadvisor consider the following factors:

· Whether the nominee attended less than 75 percent of the board and committee meetings without a valid excuse for the absences;

· Whether the nominee is an inside or affiliated outside director and sits on the audit, compensation, or nominating committees;

· Whether the nominee ignored a significant shareholder proposal that was approved by a (i) majority of the shares outstanding or (ii) majority of the votes cast for two consecutive years;

· Whether the nominee, without shareholder approval, to our knowledge instituted a new poison pill plan, extended an existing plan, or adopted a new plan upon the expiration of an existing plan during the past year;

· Whether the nominee is an inside or affiliated outside director and the full board serves as the audit, compensation, or nominating committee or the company does not have one of these committees;

· Whether the nominee is an insider or affiliated outsider on boards that are not at least majority independent;

· Whether the nominee is the CEO of a publicly-traded company who serves on more than two public boards;

· Whether the nominee serves on more than four public company boards;

· Whether the nominee serves on the audit committee where there is evidence (such as audit reports or reports mandated under the Sarbanes Oxley Act) that there exists material weaknesses in the company’s internal controls;

· Whether the nominee serves on the compensation committee if that director was present at the time of the grant of backdated options or options the pricing or the timing of which Advisor and Subadvisor believe may have been manipulated to provide additional benefits to executives;

· Whether the nominee is believed by us to have a material conflict of interest with the portfolio company; and

· Whether the nominee (or the overall board) in our view has a record of making poor corporate or strategic decisions or has demonstrated an overall lack of good business judgment.

The Advisor and Subadvisor vote on a case-by-case basis for shareholder proposals requesting companies to amend their bylaws in order to create access to the proxy so as to nominate candidates for directors.

The Advisor and Subadvisor recognize the importance of shareholder access to the ballot process as a means to ensure that boards do not become self-perpetuating and self-serving. However, the Advisor and Subadvisor are also aware that some proposals may promote certain interest groups and could be disruptive to the nomination process. Special attention will be paid to companies that display a chronic lack of shareholder accountability.

Proxy Contests

Director Nominees in a Contested Election. By definition, this type of board candidate or slate runs for the purpose of seeking a significant change in corporate policy or control. Therefore, the economic impact of the vote in favor of or in opposition to that director or slate must be analyzed using a higher standard such as is normally applied to changes in control. Criteria for evaluating director nominees as a group or individually should also include: the underlying reason why the new slate (or individual director) is being proposed; performance; compensation; corporate governance provisions and takeover activity; criminal activity; attendance at meetings; investment in the company; interlocking directorships; inside, outside and independent directors; number of other board seats; and other experience. It is impossible to have a general policy regarding director nominees in a contested election.

Reimbursement of Proxy Solicitation Expenses. Decisions to provide full reimbursement for dissidents waging a proxy contest should be made on a case-by-case basis.

Ratification of Auditors

The Advisor and Subadvisor vote for proposals to ratify auditors, unless an auditor has a financial interest in or association with the company, and are therefore not independent; or there is reason to believe that the independent auditor has rendered an opinion that is neither accurate nor indicative of the company’s financial position. Generally, the Advisor and Subadvisor vote against auditor ratification and withhold votes from audit committee members if non-audit fees exceed audit fees. The Advisor and Subadvisor vote on a case-by-case basis on auditor rotation proposals. Criteria for evaluating the rotation proposal include, but are not limited to: tenure of the audit firm; establishment and disclosure of a renewal process whereby the auditor is regularly evaluated for both audit quality and competitive price; length of the rotation period advocated in the proposal; and any significant audit related issues. Generally, the Advisor and Subadvisor vote against auditor indemnification and limitation of liability; however the Advisor and Subadvisor recognize there may be situations where indemnification and limitations on liability may be appropriate.

Takeover Defenses

While the Advisor and Subadvisor recognize that a takeover attempt can be a significant distraction for the board and management to deal with, the simple fact is that the possibility of a corporate takeover keeps management focused on maximizing shareholder value. As a result, the Advisor and Subadvisor oppose measures that are designed to prevent or obstruct corporate takeovers because they can entrench current management. The following are our guidelines on change of control issues:

Shareholder Rights Plans. The Advisor and Subadvisor acknowledge that there are arguments for and against shareholder rights plans, also known as “poison pills.” Companies should put their case for rights plans to shareholders. The Advisor and Subadvisor review on a case-by-case basis management proposals to ratify a poison pill. The Advisor and Subadvisor generally look for shareholder friendly features including a two- to three-year sunset provision, a permitted bid provision and a 20 percent or higher flip-in provision.

Greenmail. The Advisor and Subadvisor vote for proposals to adopt anti-greenmail charter or bylaw amendments or otherwise restrict a company’s ability to make greenmail payments.

Unequal Voting Rights. Generally, The Advisor and Subadvisor vote against dual-class recapitalizations as they offer an effective way for a firm to thwart hostile takeovers by concentrating voting power in the hands of management or other insiders.

Classified Boards. The Advisor and Subadvisor generally vote in favor of shareholder proposals to declassify a board of directors, although the Advisor and Subadvisor acknowledge that a classified board may be in the long-term best interests of a company in certain situations. In voting on shareholder proposals to declassify a board of directors, the Advisor and Subadvisor evaluate all facts and circumstances surrounding such proposal, including whether the shareholder proposing the de-classification has an agenda in making such proposal that may be at odds with the long-term best interests of the company or whether it would be in the best interests of the company to thwart a shareholder’s attempt to control the board of directors.

Cumulative Voting. Having the ability to cumulate our votes for the election of directors—that is, cast more than one vote for a director about whom they feel strongly—generally increases shareholders’ rights to effect change in the management of a corporation. The Advisor and Subadvisor generally support, therefore, proposals to adopt cumulative voting.

Shareholder Ability to Call Special Meeting. the Advisor and Subadvisor votes on a case-by-case basis for shareholder proposals requesting companies to amend their governance documents (bylaws and/or charter) in order to allow shareholders to call special meetings. The Advisor and Subadvisor recognize the importance on shareholder ability to call a special meeting, however, the Advisor and Subadvisor are also aware that some proposals are put forth in order to promote the agenda(s) of certain special interest groups and could be disruptive to the management of the company.

Shareholder Ability to Act by Written Consent. The Advisor and Subadvisor generally vote against proposals to allow or facilitate shareholder action by written consent. The requirement that all shareholders be given notice of a shareholders’ meeting and matters to be discussed therein seems to provide a reasonable protection of minority shareholder rights.

Shareholder Ability to Alter the Size of the Board. The Advisor and Subadvisor generally vote for proposals that seek to fix the size of the board and vote against proposals that give management the ability to alter the size of the board without shareholder approval. While the Advisor and Subadvisor recognize the importance of such proposals, the Advisor and Subadvisor are however also aware that these proposals are sometimes put forth in order to promote the agenda(s) of certain special interest groups and could be disruptive to the management of the company.

Miscellaneous Board Provisions

Board Committees. Boards should delegate key oversight functions, such as responsibility for audit, nominating and compensation issues, to independent committees. The chairman and members of any committee should be clearly identified in the annual report. Any committee should have the authority to engage independent advisors where appropriate at the company’s expense.

Audit, nominating and compensation committees should consist solely of non-employee directors, who are independent of management.

Separate Chairman and CEO Positions. The Advisor and Subadvisor will generally vote for proposals looking to separate the CEO and Chairman roles. The Advisor and Subadvisor do acknowledge, however, that under certain circumstances, it may be reasonable for the CEO and Chairman roles to be held by a single person.

Lead Directors and Executive Sessions. In cases where the CEO and Chairman roles are combined, Advisor and Subadvisor will vote for the appointment of a “lead” (non-insider) director and for regular “executive” sessions (board meetings taking place without the CEO/Chairman present).

Majority of Independent Directors. The Advisor and Subadvisor vote for proposals that call for the board to be composed of a majority of independent directors. The Advisor and Subadvisor believe that a majority of independent directors can be an important factor in facilitating objective decision making and enhancing accountability to shareholders.

Independent Committees. The Advisor and Subadvisor vote for shareholder proposals requesting that the board’s audit, compensation, and nominating committees consist exclusively of independent directors.

Stock Ownership Requirements. The Advisor and Subadvisor support measures requiring senior executives to hold a minimum amount of stock in a company (often expressed as a percentage of annual compensation), requiring stock acquired through option exercise to be held for a certain minimum amount of time and issuing restricted stock awards instead of options.

Term of Office. The Advisor and Subadvisor vote against shareholder proposals to limit the tenure of outside directors. Term limits pose artificial and arbitrary impositions on the board and could harm shareholder interests by forcing experienced and knowledgeable directors off the board.

Director and Officer Indemnification and Liability Protection. Proposals concerning director and officer indemnification and liability protection should be evaluated on a case-by-case basis.

Board Size. The Advisor and Subadvisor generally vote for proposals to limit the size of the board to 15 members or less.

Majority Vote Standard. The Advisor and Subadvisor generally vote for proposals asking for the board to initiate the appropriate process to amend the company’s governance documents (charter or bylaws) to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders. The Advisor and Subadvisor would generally review on a case-by-case basis proposals that address alternative approaches to a majority vote requirement.

Confidential Voting. The Advisor and Subadvisor vote for shareholder proposals requesting that companies adopt confidential voting, use independent tabulators, and use independent inspectors of election as long as the proposals include clauses for proxy contests as follows: in the case of a contested election, management should be permitted to request that the dissident group honor its confidential voting policy. If the dissidents agree, the policy remains in place. If the dissidents do not agree, the confidential voting policy is waived.

The Advisor and Subadvisor also vote for management proposals to adopt confidential voting.

Bundled Proposals. The Advisor and Subadvisor review on a case-by-case basis bundled or “conditioned” proxy proposals. In the case of items that are conditioned upon each other, the Advisor and Subadvisor examine the benefits and costs of the packaged items. In instances where the joint effect of the

conditioned items is not in shareholders’ best interests, the Advisor and Subadvisor vote against the proposals. If the combined effect is positive, the Advisor and Subadvisor support such proposals.

Date/Location of Meeting. The Advisor and Subadvisor vote against shareholder proposals to change the date or location of the shareholders’ meeting. No one site will meet the needs of all shareholders.

Adjourn Meeting if Votes are Insufficient. Open-end requests for adjournment of a shareholder meeting generally will not be supported. However, where management specifically states the reason for requesting an adjournment and the requested adjournment is necessary to permit a proposal that would otherwise be supported under this policy to be carried out; the adjournment request will be supported.

Disclosure of Shareholder Proponents. The Advisor and Subadvisor vote for shareholder proposals requesting that companies disclose the names of shareholder proponents. Shareholders may wish to contact the proponents of a shareholder proposal for additional information.

Capital Structure

Increase Additional Common Stock. The Advisor and Subadvisor generally vote for increases in authorized shares, provided that the increase is not greater than three times the number of shares outstanding and reserved for issuance (including shares reserved for stock-related plans and securities convertible into common stock, but not shares reserved for any poison pill plan). Votes generally are cast in favor of proposals to authorize additional shares of stock except where the proposal:

· creates a blank check preferred stock; or

· establishes classes of stock with superior voting rights.

Blank Check Preferred Stock. Votes generally are cast in opposition to management proposals authorizing the creation of new classes of preferred stock with unspecific voting, conversion, distribution and other rights, and management proposals to increase the number of authorized blank check preferred shares. The Advisor and Subadvisor may vote in favor of this type of proposal when it receives assurances to its reasonable satisfaction that (i) the preferred stock was authorized by the board for the use of legitimate capital formation purposes and not for anti- takeover purposes, and (ii) no preferred stock will be issued with voting power that is disproportionate to the economic interests of the preferred stock. These representations should be made either in the proxy statement or in a separate letter from the company to the Advisor and Subadvisor.

Preemptive Rights. Votes regarding shareholder proposals seeking preemptive rights are determined on a case-by-case basis after evaluating:

· The size of the company;

· The shareholder base; and

· The liquidity of the stock.

For example, it would be difficult to support a shareholder proposal that would require an S&P 500 company with over $1 billion in equity held by thousands of shareholders (with no single shareholder owning a significant percentage of outstanding shares) to implement preemptive rights each time it conducted a new offering. Such a requirement would be impractical and extremely costly. Moreover, at companies with that large of a shareholder base and the ease with which shareholders could preserve their

relative interest through purchases of shares on the on the open market, the cost of implementing preemptive rights does not seem justifiable in relation to the benefits.

Dual Class Capitalizations. Because classes of common stock with unequal voting rights limit the rights of certain shareholders, the Advisor and Subadvisor vote against adoption of a dual or multiple class capitalization structure.

Restructurings/Recapitalizations. The Advisor and Subadvisor review proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan on a case- by-case basis.

In voting, the Advisor and Subadvisor consider the following issues:

· dilution—how much will ownership interest of existing shareholders be reduced, and how extreme will dilution to any future earnings be?

· change in control—will the transaction result in a change in control of the company?

· bankruptcy—generally, approve proposals that facilitate debt restructurings unless there are clear signs of self-dealing or other abuses.

Share Repurchase Programs. Boards may institute share repurchase or stock buy-back programs for a number of reasons. The Advisor and Subadvisor will generally vote in favor of such programs where the repurchase would be in the long-term best interests of shareholders, and where the company is not thought to be able to use the cash in a more useful way.

The Advisor and Subadvisor will vote against such programs when shareholders’ interests could be better served by deployment of the cash for alternative uses, or where the repurchase is a defensive maneuver or an attempt to entrench management.

Targeted Share Placements. These shareholder proposals ask companies to seek stockholder approval before placing 10% or more of their voting stock with a single investor. The proposals are typically in reaction to the placement by various companies of a large block of their voting stock in an ESOP, parent capital fund or with a single friendly investor, with the aim of protecting themselves against a hostile tender offer. These proposals are voted on a case-by-case basis after reviewing the individual situation of the company receiving the proposal.

Executive and Director Compensation

Stock-based Incentive Plans. Votes with respect to compensation plans should be determined on a case-by-case basis. The analysis of compensation plans focuses primarily on the transfer of shareholder wealth (the dollar cost of pay plans to shareholders). Other matters included in our analysis are the amount of the company’s outstanding stock to be reserved for the award of stock options or restricted stock, whether the exercise price of an option is less than the stock’s fair market value at the date of the grant of the options, and whether the plan provides for the exchange of outstanding options for new ones at lower exercise prices. Every award type is valued. An estimated dollar cost for the proposed plan and all continuing plans is derived. This cost, dilution to shareholders’ equity, will also be expressed as a percentage figure for the transfer of shareholder wealth and will be considered along with dilution to voting power. Once the cost of the plan is estimated, it is compared to an allowable industry-specific and market cap-based dilution cap.

If the proposed plan cost is above the allowable cap, an against vote is indicated. If the proposed cost is below the allowable cap, a vote for the plan is indicated unless the plan violates the repricing guidelines. If the company has a history of repricing options or has the express ability to reprice underwater stock options without first securing shareholder approval under the proposed plan, the plan receives an against vote—even in cases where the plan cost is considered acceptable based on the quantitative analysis.

The Advisor and Subadvisor vote against equity plans that have high average three year burn rates, unless the company has publicly committed to reduce the burn rate to a rate that is comparable to its peer group (as determined by the Advisor and Subadvisor).

Approval of Cash or Cash-and-Stock Bonus Plans. The Advisor and Subadvisor vote for cash or cash-and-stock bonus plans to exempt the compensation from limits on deductibility under the provisions of Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code).

Executive Compensation. Executive compensation should be tied to the performance of the executive and the company as well as relevant market conditions. The Advisor and Subadvisor feel that the performance criteria and specific amounts and types of executive compensation are best decided by a company’s board of directors and/or its compensation committee and fully disclosed to shareholders.

The Advisor and Subadvisor will, however, vote for shareholder proposals that call for shareholders to vote, in a non-binding manner, on executive pay since such vote is non-binding and is merely informative for the board of directors and/or compensation committee. Further, the Advisor and Subadvisor generally vote for shareholder proposals that seek additional disclosure of executive and director pay information.

Reload/Evergreen Features. The Advisor and Subadvisor will generally vote against plans that enable the issuance of reload options and that provide an automatic share replenishment (“evergreen”) feature.

Golden Parachutes. The Advisor and Subadvisor oppose the use of accelerated employment contracts that result in cash grants of greater than three times annual compensation (salary and bonus) in the event of termination of employment following a change in control of a company. In general, the guidelines call for voting against “golden parachute” plans because they impede potential takeovers that shareholders should be free to consider. The Advisor and Subadvisor generally withhold our votes at the next shareholder meeting for directors who to our knowledge approved golden parachutes.

401(k) Employee Benefit Plans. The Advisor and Subadvisor vote for proposals to implement a 401(k) savings plan for employees.

Employee Stock Purchase Plans. The Advisor and Subadvisor support employee stock purchase plans, although the Advisor and Subadvisor generally believe the discounted purchase price should be at least 85% of the current market price.

Option Expensing. The Advisor and Subadvisor vote for shareholder proposals to expense fixed-price options.

Vesting. The Advisor and Subadvisor believe that restricted stock awards normally should vest over at least a two-year period.

Option Repricing. Stock options generally should not be re-priced, and never should be re-priced without shareholder approval. In addition, companies should not issue new options, with a lower strike price, to make up for previously issued options that are substantially underwater. The Advisor and Subadvisor will

vote against the election of any slate of directors that, to its knowledge, has authorized a company to re-price or replace underwater options during the most recent year without shareholder approval.

Stock Holding Periods. Generally vote against all proposals requiring executives to hold the stock received upon option exercise for a specific period of time.

Transferable Stock Options. Review on a case-by-case basis proposals to grant transferable stock options or otherwise permit the transfer of outstanding stock options, including cost of proposal and alignment with shareholder interests.

Recoup Bonuses. The Advisor and Subadvisor vote on a case-by-case on shareholder proposals to recoup unearned incentive bonuses or other incentive payments made to senior executives if it is later determined that fraud, misconduct, or negligence significantly contributed to a restatement of financial results that led to the awarding of unearned incentive compensation.

Incorporation

Reincorporation Outside of the United States. Generally, the Advisor and Subadvisor will vote against companies looking to reincorporate outside of the U.S.

Voting on State Takeover Statutes. The Advisor and Subadvisor review on a case-by-case basis proposals to opt in or out of state takeover statutes (including control share acquisition statutes, control share cash-out statutes, freeze out provisions, fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions, anti greenmail provisions, and disgorgement provisions). In voting on these shareholder proposals, the Advisor and Subadvisor evaluate all facts and circumstances surrounding such proposal, including whether the shareholder proposing such measure has an agenda in making such proposal that may be at odds with the longterm best interests of the company or whether it would be in the best interests of the company to thwart a shareholder’s attempt to control the board of directors.

Voting on Reincorporation Proposals. Proposals to change a company’s state of incorporation are examined on a case-by-case basis. In making our decision, the Advisor and Subadvisor review management’s rationale for the proposal, changes to the charter/bylaws, and differences in the state laws governing the companies.

Mergers and Corporate Restructurings

Mergers and Acquisitions. Votes on mergers and acquisitions should be considered on a case-by-case basis, taking into account factors including the following: anticipated financial and operating benefits; offer price (cost vs. premium); prospects of the combined companies; how the deal was negotiated; and changes in corporate governance and their impact on shareholder rights.

The Advisor and Subadvisor vote against proposals that require a super-majority of shareholders to approve a merger or other significant business combination. The Advisor and Subadvisor support proposals that seek to lower super-majority voting requirements.

Nonfinancial Effects of a Merger or Acquisition. Some companies have proposed a charter provision which specifies that the board of directors may examine the nonfinancial effect of a merger or acquisition on the company. This provision would allow the board to evaluate the impact a proposed change in control would have on employees, host communities, suppliers and/or others. The Advisor and Subadvisor generally vote against proposals to adopt such charter provisions. The Advisor and

Subadvisor feel it is the directors’ fiduciary duty to base decisions solely on the financial interests of the shareholders.

Corporate Restructuring. Votes on corporate restructuring proposals, including minority squeeze outs, leveraged buyouts, “going private” proposals, spin-offs, liquidations, and asset sales, should be considered on a case-by-case basis.

Spin-offs. Votes on spin-offs should be considered on a case-by-case basis depending on the tax and regulatory advantages, planned use of sale proceeds, market focus, and managerial incentives.

Asset Sales. Votes on asset sales should be made on a case-by-case basis after considering the impact on the balance sheet/working capital, value received for the asset, and potential elimination of diseconomies.

Liquidations. Votes on liquidations should be made on a case-by-case basis after reviewing management’s efforts to pursue other alternatives, appraisal value of assets, and the compensation plan for executives managing the liquidation.

Appraisal Rights. The Advisor and Subadvisor vote for proposals to restore, or provide shareholders with, rights of appraisal. Rights of appraisal provide shareholders who are not satisfied with the terms of certain corporate transactions the right to demand a judicial review in order to determine a fair value for their shares.

Changing Corporate Name. The Advisor and Subadvisor vote for changing the corporate name.

Social Issues.

The Advisor and Subadvisor believe that it is the responsibility of the board and management to run a company on a daily basis. With this in mind, in the absence of unusual circumstances, the Advisor and Subadvisor do not believe that shareholders should be involved in determining how a company should address broad social and policy issues. As a result, the Advisor and Subadvisor generally vote against these types of proposals, which are generally initiated by shareholders, unless the Advisor and Subadvisor believe the proposal has significant economic implications.

Item 8. Portfolio Managers of Closed-End Investment Companies.

Information pertaining to the portfolio managers of the registrant, as of February 28, 2009, is set forth below.

William F. Scapell

· Vice President

· Portfolio manager since inception

Senior vice president of C&S. Previously, chief strategist for preferred securities at Merrill Lynch & Co.

Robert Becker

· Vice President

· Portfolio manager since inception

Senior vice president of C&S. Previously, co-portfolio manager for the Franklin Utilities Fund at Franklin Templeton Investments.

Each portfolio manager listed above manages other investment companies and/or investment vehicles and accounts in addition to the registrant. The following tables show, as of December 31, 2008, the number of accounts each portfolio manager managed in each of the listed categories and the total assets in the accounts managed within each category. The portfolio managers do not receive performance-based fees with respect to any of the registered investment companies, other pooled investment vehicles or other accounts that they manage.

William F. Scapell

	Number of accounts	Total assets
· Registered investment companies	10	$	4,229,569,000
· Other pooled investment vehicles	2	$	35,810,000
· Other accounts	12	$	361,679,000

Robert Becker

	Number of accounts	Total assets
· Registered investment companies	3	$	1,912,725,000
· Other pooled investment vehicles	0	$	0
· Other accounts	0	$	0

Share Ownership. The following table indicates the dollar range of securities of the registrant owned by the registrant’s portfolio managers as of December 31, 2008:

		Dollar Range of Securities Owned
William F. Scapell		None
Robert Becker		None

Conflicts of Interest. It is possible that conflicts of interest may arise in connection with the portfolio managers’ management of the registrant’s investments on the one hand and the investments of other accounts or vehicles for which the portfolio managers are responsible on the other. For example, a portfolio manager may have conflicts of interest in allocating management time, resources and investment opportunities among the registrant and the other accounts or

vehicles he advises. In addition, due to differences in the investment strategies or restrictions among the registrant and the other accounts, a portfolio manager may take action with respect to another account that differs from the action taken with respect to the registrant.

In some cases, another account managed by a portfolio manager may provide more revenue to C&S. While this may appear to create additional conflicts of interest for the portfolio manager in the allocation of management time, resources and investment opportunities, C&S strives to ensure that portfolio managers endeavor to exercise their discretion in a manner that is equitable to all interested persons. In this regard, in the absence of specific account-related impediments (such as client-imposed restrictions or lack of available cash), it is the policy of C&S to allocate investment ideas pro rata to all accounts with the same primary investment objective.

In addition, certain of the portfolio managers may from time to time manage one or more accounts on behalf of C&S and its affiliated companies (the “CNS Accounts”). Certain securities held in the CNS Accounts also may be held in the account of the registrant or other client accounts of C&S. C&S has adopted procedures that are designed to ensure that the interests of the CNS Accounts are never placed ahead of the interests of the registrant or any other client account. In this regard, C&S will not purchase or sell a security for the CNS Accounts until C&S has completed its purchase or sale program for the registrant and any other client accounts. While it is possible that a security will be sold out of the CNS Accounts but continue to be held for the registrant or one or more other client accounts, this will occur only if C&S, acting in its reasonable judgment and consistent with its fiduciary duties, believes this to be appropriate for, and consistent with the objectives and profile of, the registrant or other client accounts.

Advisor Compensation Structure. Compensation of the Advisor’s portfolio managers and other investment professionals has three primary components: (1) a base salary, (2) an annual cash bonus and (3) annual stock-based compensation consisting generally of restricted stock units of the Advisor’s parent, CNS. The Advisor’s investment professionals, including the portfolio managers, also receive certain retirement, insurance and other benefits that are broadly available to all of its employees. Compensation of the Advisor’s investment professionals is reviewed primarily on an annual basis.

Method to Determine Compensation. The Advisor compensates its portfolio managers based primarily on the total return performance of funds and accounts managed by the portfolio manager versus appropriate peer groups or benchmarks. C&S uses a variety of benchmarks to evaluate each portfolio managers’ performance for compensation purposes, including the S&P 1500 Utilities Index, Merrill Lynch Fixed Rate Preferred Index and other broad based indexes based on the asset classes managed by each portfolio manager. In evaluating the performance of a portfolio manager, primary emphasis is normally placed on one- and three-year performance, with secondary consideration of performance over longer periods of time. Performance is evaluated on a pre-tax and pre-expense basis. In addition to rankings within peer groups of funds on the basis of absolute performance, consideration may also be given to risk-adjusted performance. For funds and accounts with a primary investment objective of high current income, consideration will also be given to the fund’s and account’s success in achieving this objective. For portfolio managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis. The Advisor does not have any funds or accounts with performance-based advisory fees. Portfolio managers are also evaluated on the basis of their success in managing their dedicated team of analysts. Base compensation for

portfolio managers of the Advisor varies in line with the portfolio manager’s seniority and position with the firm.

Salaries, bonuses and stock-based compensation are also influenced by the operating performance of the Advisor and CNS. While the annual salaries of the Advisor’s portfolio managers are fixed, cash bonuses and stock based compensation may fluctuate significantly from year to year, based on changes in manager performance and other factors.

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

	(a)	(b)	(c)	(d)
Period	Total number of shares purchased	Average price paid per share	Total number of shares purchased part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
6/12/08 to 6/30/08	N/A	N/A	N/A	N/A
7/01/08 to 7/31/08	N/A	N/A	N/A	N/A
8/01/08 to 8/31/08	N/A	N/A	N/A	N/A
9/01/08 to 9/30/08	N/A	N/A	N/A	N/A
10/01/08 to 10/31/08	N/A	N/A	N/A	N/A
11/01/08 to 11/30/08	N/A	N/A	N/A	N/A
12/01/08 to 12/31/08	N/A	N/A	N/A	N/A

Note: On June 12, 2008, the Board of Directors of the Fund approved the delegation of its authority to management to effect repurchases, pursuant to management’s discretion and subject to market conditions and investment considerations, of up to 10% of the Fund’s total assets (“Share Repurchase Program”) through the current fiscal year ending December 31, 2008. On December 17, 2008, the Board of Directors authorized the continuation of the Share Repurchase Program through fiscal year ending December 31, 2009.

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

Not applicable.

Item 11. Controls and Procedures.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COHEN & STEERS SELECT UTILITY FUND, INC.


By:	/s/ Adam M. Derechin
		Name: Adam M. Derechin
		Title: President and Chief Executive Officer

Date: March 6, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Adam M. Derechin
		Name: Adam M. Derechin
		Title: President and Chief Executive Officer
		(principal executive officer)

By:	/s/ James Giallanza
		Name: James Giallanza
		Title: Treasurer
		(principal financial officer)


Date: March 6, 2009

	Six Months Ended December 31, 2008			Year Ended December 31, 2008
Cohen & Steers Select Utility Fund at Market Value^a		–54.07	%		–57.40	%
Cohen & Steers Select Utility Fund at Net Asset Value^a		–46.25	%		–49.17	%
S&P 1500 Utilities Index^b		–24.80	%		–26.70	%
S&P 500 Index^b		–28.47	%		–36.99	%
Blended benchmark—80% S&P 1500 Utilities Index/ 20% Merrill Lynch Fixed Rate Preferred Index^b		–24.11	%		–25.49	%



MARTIN COHEN				ROBERT H. STEERS

Co-chairman				Co-chairman



ROBERT S. BECKER				WILLIAM F. SCAPELL

Portfolio Manager				Portfolio Manager

Leverage (as a % of managed assets)	41	%
% Fixed Rate	45	%
% Variable Rate	55	%
Weighted Average Rate on Swaps	3.4	%
Weighted Average Term on Swaps	4.3 years
Current Rate on AMPS^b	1.8	%
Current Rate on Debt^c	1.5	%

Security	Value		% of Managed Assets
Exelon Corp.	$	60,568,410		6.3	%
Southern Co.		58,709,417		6.1
Duke Energy Corp.		58,255,731		6.1
FPL Group		45,978,569		4.8
PG&E Corp.		42,188,171		4.4
Entergy Corp.		34,401,688		3.6
FirstEnergy Corp.		32,340,580		3.4
Public Service Enterprise Group		31,614,446		3.3
Xcel Energy		23,033,201		2.4
PPL Corp.		22,842,567		2.4

			Number of Shares		Value
COMMON STOCK	121.1	%
ENERGY	8.0	%
INTEGRATED OIL & GAS	0.1	%
Duncan Energy Partners LP				25,900	$	352,240
OIL & GAS EQUIPMENT & SERVICES	0.1	%
Exterran Partners LP				32,821		368,580
OIL & GAS STORAGE & TRANSPORTATION	7.8	%
DCP Midstream Partners LP				65,733		617,890
Enbridge Energy Partners LP				74,337		1,895,593
Energy Transfer Partners LP^a				150,667		5,124,185
Enterprise Products Partners LP^a				329,500		6,830,535
Kinder Morgan Energy Partners LP^a				199,400		9,122,550
Magellan Midstream Partners LP				110,000		3,323,100
MarkWest Energy Partners LP^a				135,600		1,082,088
Spectra Energy Corp.^a				841,808		13,250,058
Williams Partners LP^a				319,700		3,817,218
						45,063,217
TOTAL ENERGY						45,784,037
TELECOMMUNICATIONS SERVICES	1.1	%
INTEGRATED TELECOMMUNICATIONS SERVICES
Fairpoint Communications				145,953		478,726
Frontier Communications Corp^a				642,000		5,611,080
						6,089,806
UTILITIES	112.0	%
ELECTRIC UTILITIES	76.3	%
Allegheny Energy				139,000		4,706,540
Cleco Corp.^a				253,276		5,782,291
DPL^a				215,200		4,915,168
Duke Energy Corp.^a,b				3,881,128		58,255,731
E.ON AG (ADR) (Germany)^a				185,116		7,543,477
Electricite de France (France)^c				294,700		17,140,301
Enel S.p.A. (Italy)^c				1,377,000		8,870,080
Entergy Corp.^a				413,830		34,401,688

			Number of Shares		Value
Exelon Corp.^b				1,089,164	$	60,568,410
FirstEnergy Corp.				665,718		32,340,580
Fortum Oyj (Finland)^c				215,000		4,673,093
FPL Group				913,542		45,978,569
Great Plains Energy^a				388,697		7,513,513
ITC Holdings Corp.				102,826		4,491,440
Northeast Utilities^a				527,875		12,700,673
NV Energy				719,000		7,110,910
Pepco Holdings^a				657,141		11,670,824
Pinnacle West Capital Corp.^a				436,600		14,027,958
PPL Corp.^a				744,300		22,842,567
Progress Energy^a				205,121		8,174,072
Scottish and Southern Energy PLC (United Kingdom)^c				232,930		4,106,862
Southern Co.^a				1,586,741		58,709,417
						436,524,164
GAS UTILITIES	2.0	%
AGL Resources^a				162,100		5,081,835
Equitable Resources				184,083		6,175,984
						11,257,819
MULTI UTILITIES	33.7	%
Ameren Corp.^b				269,231		8,954,623
CenterPoint Energy				185,000		2,334,700
CMS Energy Corp.				568,000		5,742,480
Consolidated Edison^a				260,198		10,129,508
Dominion Resources^a				450,200		16,135,168
NSTAR^a				231,339		8,441,560
OGE Energy Corp.^a				451,000		11,626,780
PG&E Corp.^a				1,089,852		42,188,171
Public Service Enterprise Group^a				1,083,800		31,614,446
TECO Energy^a				267,900		3,308,565
United Utilities Group PLC (United Kingdom)^c				649,593		5,898,309

			Number of Shares		Value
Vectren Corp.^a				406,067	$	10,155,736
Wisconsin Energy Corp.				325,931		13,682,583
Xcel Energy^a				1,241,682		23,033,201
						193,245,830
TOTAL UTILITIES						641,027,813
TOTAL COMMON STOCK (Identified cost—$649,090,102)						692,901,656
PREFERRED SECURITIES—$25 PAR VALUE	22.7	%
BANK	2.0	%
Bank of America Corp., 4.00%, Series E (FRN)^a				114,136		1,374,197
BB&T Capital Trust V, 8.95%, due 9/15/63^a				110,800		2,764,460
Citigroup, 8.125%, Series AA^a				155,406		2,478,726
HSBC USA, 6.50%, Series H				80,000		1,840,000
Sovereign Bancorp, 7.30%, Series C				95,075		1,530,707
Wells Fargo Capital XIV, 8.625%, due 9/14/68				40,000		1,068,000
Zions Bancorporation, 4.00%, Series A (FRN)				56,275		486,779
						11,542,869
BANK—FOREIGN	3.2	%
Barclays Bank PLC, 8.125%^a				249,800		3,751,996
Deutsche Bank Contingent Capital Trust III, 7.60%^a				201,000		3,412,980
Deutsche Bank Contingent Capital Trust V, 8.05%^a				100,000		1,858,000
HSBC Holdings PLC, 8.125%^a				111,900		2,719,170
Royal Bank of Scotland Group PLC, 6.35%, Series N^a				130,700		1,189,370
Royal Bank of Scotland Group PLC, 6.60%, Series S				71,298		628,848
Royal Bank of Scotland Group PLC, 7.25%, Series T^a				80,361		811,646
Santander Finance, 6.50%^a				80,000		1,508,800
Santander Finance Preferred, 4.00%, Series 6 (FRN)^a				200,000		2,400,000
						18,280,810
FINANCE	1.2	%
INVESTMENT BANKER/BROKER	0.9	%
Merrill Lynch & Co., 8.625%^a				160,000		3,164,800
Merrill Lynch & Co., 4.00%, Series 5 (FRN)^a				117,680		1,276,828
Morgan Stanley Capital Trust III, 6.25%				39,902		632,846
						5,074,474

			Number of Shares		Value
INVESTMENT BANKER/BROKER—FOREIGN	0.3	%
Credit Suisse Guernsey, 7.90%				80,000	$	1,644,000
TOTAL FINANCE						6,718,474
INSURANCE	2.9	%
MULTI-LINE	0.4	%
MetLife, 6.50%, Series B^a				122,500		2,091,075
MULTI-LINE—FOREIGN	1.4	%
Allianz SE, 8.375%^a				179,500		3,500,250
ING Groep N.V., 7.375%^a				375,000		4,725,000
						8,225,250
PROPERTY CASUALTY—FOREIGN	0.2	%
Arch Capital Group Ltd., 8.00%^a				64,000		1,272,320
REINSURANCE—FOREIGN	0.9	%
Aspen Insurance Holdings Ltd., 7.401%, Series A				100,000		1,259,000
Axis Capital Holdings Ltd., 7.25%, Series A^a				82,200		1,428,636
Axis Capital Holdings Ltd., 7.50%, Series B ($100 par value)				40,000		2,618,752
						5,306,388
TOTAL INSURANCE						16,895,033
INTEGRATED TELECOMMUNICATIONS SERVICES	0.6	%
Telephone & Data Systems, 7.60%, due 12/1/41 Series A^a				143,850		2,157,750
United States Cellular Corp., 7.50%, due 6/15/34^a				91,177		1,331,184
						3,488,934
MEDIA—DIVERSIFIED SERVICES	1.3	%
Comcast Corp., 7.00%, due 9/15/55, Series B^a				325,856		7,168,832
REAL ESTATE	8.7	%
DIVERSIFIED	0.4	%
Duke Realty Corp., 8.375%, Series O				54,605		784,128
Forest City Enterprises, 7.375%, Class A				80,800		771,640
Lexington Corporate Properties Trust, 8.05%, Series B				75,000		780,000
						2,335,768

			Number of Shares		Value
HEALTH CARE	2.1	%
Health Care REIT, 7.625%, Series F				218,800	$	4,047,800
LTC Properties, 8.00%, Series F				393,499		8,263,479
						12,311,279
HOTEL	0.0	%
W2007 Grace Acquisition I, 8.75%, Series B^d				43,300		32,475
OFFICE	2.8	%
Alexandria Real Estate Equities, 8.375%, Series C^a				405,400		8,095,838
Brandywine Realty Trust, 7.50%, Series C				75,819		981,098
SL Green Realty Corp., 7.625%, Series C^a				247,000		3,628,430
SL Green Realty Corp., 7.875%, Series D^a				202,333		3,055,228
						15,760,594
OFFICE/INDUSTRIAL	1.1	%
PS Business Parks, 7.00%, Series H				75,700		1,267,975
PS Business Parks, 6.875%, Series I				54,950		854,473
PS Business Parks, 7.95%, Series K^a				230,000		4,250,400
						6,372,848
RESIDENTIAL—APARTMENT	0.4	%
Apartment Investment & Management Co., 8.00%, Series V				87,000		1,195,380
Apartment Investment & Management Co., 7.875%, Series Y				93,000		1,278,750
						2,474,130
SELF STORAGE	0.5	%
Public Storage, 6.45%, Series X^a				150,000		2,706,000
SHOPPING CENTER	1.2	%
COMMUNITY CENTER	1.0	%
Cedar Shopping Centers, 8.875%, Series A				121,125		1,681,215
Developers Diversified Realty Corp., 7.50%, Series I				302,000		2,322,380
Kimco Realty Corp., 7.75%, Series G^a				100,000		1,800,000
						5,803,595
REGIONAL MALL	0.2	%
CBL & Associates Properties, 7.75%, Series C				126,931		1,015,448
TOTAL SHOPPING CENTER						6,819,043

			Number of Shares		Value
SPECIALTY	0.2	%
Digital Realty Trust, 8.50%, Series A				56,000	$	896,000
TOTAL REAL ESTATE						49,708,137
UTILITIES	2.8	%
ELECTRIC UTILITIES	1.2	%
American Electric Power Co., 8.75%				93,383		2,469,980
Entergy Louisiana LLC, 7.60%, due 4/1/32^a				172,063		4,172,528
FPL Group Capital, 7.45%, due 9/1/67, Series E^a				10,075		260,036
						6,902,544
MULTI UTILITIES	1.6	%
Constellation Energy Group, 8.625%, due 6/15/63, Series A				152,050		2,949,770
PPL Electric Utilities Corp., 6.25%				100,000		2,025,000
Xcel Energy, 7.60%^a				167,500		4,175,775
						9,150,545
TOTAL UTILITIES						16,053,089
TOTAL PREFERRED SECURITIES—$25 PAR VALUE (Identified cost—$188,780,751)						129,856,178
PREFERRED SECURITIES—CAPITAL SECURITIES	11.7	%
BANK	4.2	%
Bank of America Corp., 8.00%, due 12/29/49				5,000,000		3,601,600
Citigroup, 8.40%, due 4/30/49				4,930,000		3,261,392
CoBank ACB, 11.00%, Series C, 144A^e				80,000		4,229,480
JPMorgan Chase, 7.90%, due 4/29/49				4,500,000		3,753,117
PNC Preferred Funding Trust I, 8.70%, due 2/28/49, 144A^e				5,400,000		4,000,126
Wachovia Corp., 7.98%, due 12/31/49				5,250,000		4,487,086
Webster Capital Trust IV, 7.65%, due 6/15/37				2,500,000		896,622
						24,229,423
BANK—FOREIGN	0.6	%
Barclays Bank PLC, 7.434%, due 9/29/49, 144A^e				2,000,000		1,012,460
BNP Paribas, 7.195%, due 12/31/49, 144A^e				500,000		318,553
HSBC Capital Funding LP, 10.176%,due 12/29/49, 144A^e				1,250,000		1,020,523
Royal Bank of Scotland Group PLC, 7.64%, due 3/31/49				3,250,000		1,295,872
						3,647,408

			Number of Shares		Value
ELECTRIC	1.7	%
MULTI UTILITIES	1.1	%
Dominion Resources, 7.50%, due 6/30/66, Series A				6,000,000	$	3,003,438
Dominion Resources Capital Trust I, 7.83%, due 12/1/27				2,000,000		1,790,292
PPL Capital Funding, 6.70%, due 3/30/67, Series A				4,000,000		1,762,140
						6,555,870
UTILITIES	0.6	%
DPL Capital Trust II, 8.125%, due 9/1/31				3,000,000		3,238,977
TOTAL ELECTRIC						9,794,847
FINANCE—CREDIT CARD	0.2	%
Capital One Capital III, 7.686%, due 8/15/36				2,500,000		1,143,435
FOOD	1.4	%
Dairy Farmers of America, 7.875%, 144A^d,e				52,500		3,063,050
HJ Heinz Finance Co, 8.00%, due 7/15/13, 144A^e				47		4,843,937
						7,906,987
GAS UTILITIES	0.5	%
Southern Union Co., 7.20%, due 11/1/66				8,100,000		2,835,000
INSURANCE	2.0	%
MULTI-LINE	1.2	%
AFC Capital Trust I, 8.207%, due 2/3/27, Series B				7,000,000		3,255,000
Catlin Insurance Co., 7.249%, due 12/1/49, 144A^e				4,000,000		1,592,680
Old Mutual Capital Funding, 8.00%, (Eurobond)				4,500,000		1,850,625
						6,698,305
PROPERTY CASUALTY	0.8	%
Liberty Mutual Group, 7.80%, due 3/15/37, 144A^e				5,000,000		2,247,060
Liberty Mutual Insurance, 7.697%, due 10/15/97, 144A^e				4,000,000		2,663,468
						4,910,528
TOTAL INSURANCE						11,608,833

			Number of Shares		Value
OIL—EXPLORATION AND PRODUCTION	0.3	%
Pemex Project Funding Master Trust, 7.75%, due 9/28/49				2,000,000	$	1,577,500
PIPELINES	0.8	%
Enbridge Energy Partners LP, 8.05%, due 10/1/37				3,000,000		1,462,230
Enterprise Products Operating LP, 8.375%, due 8/1/66				5,580,000		3,072,504
						4,534,734
TOTAL PREFERRED SECURITIES—CAPITAL SECURITIES (Identified cost—$108,398,966)						67,278,167
			Principal Amount
CORPORATE BONDS	5.8	%
BANK—FOREIGN	0.2	%
Natixis, 10.00%, due 4/29/49, 144A^e			$	3,000,000		1,393,347
INSURANCE—PROPERTY CASUALTY	1.0	%
ACE Capital Trust II, 9.70%, due 4/1/30				4,470,000		3,436,929
Liberty Mutual Group, 10.75%, due 6/15/58, 144A^e				4,000,000		2,202,840
						5,639,769
INTEGRATED TELECOMMUNICATIONS SERVICES	1.7	%
Citizens Communications Co., 7.125%, due 3/15/19				3,000,000		2,025,000
Citizens Communications Co., 9.00%, due 8/15/31				7,550,000		4,794,250
Embarq Corp., 7.995%, due 6/1/36				4,000,000		2,705,616
						9,524,866
MEDIA	2.0	%
Cablevision Systems Corp., 8.00%, due 4/15/12				2,000,000		1,790,000
Rogers Cable, 8.75%, due 5/1/32				6,000,000		6,299,520
Time Warner Cable Inc., 8.75%, due 2/14/19				3,000,000		3,267,555
						11,357,075
PIPELINES	0.7	%
Enbridge Energy Partners LP, 9.875%, due 3/1/19				4,000,000		4,032,052
UTILITIES—MULTI UTILITIES	0.2	%
Sempra Energy, 9.80%, due 2/15/19				1,000,000		1,117,490
TOTAL CORPORATE BONDS (Identified cost—$42,261,874)						33,064,599

			Number of Shares		Value
SHORT-TERM INVESTMENTS	7.0	%
MONEY MARKET FUNDS
Dreyfus Treasury Cash Management Fund, 0.17%^f				8,814,471	$	8,814,471
Federated U.S. Treasury Cash Reserves Fund, 0.40%^f				28,926,871		28,926,871
Fidelity Institutional Money Market Treasury Only Fund, 0.54%^f				2,101,118		2,101,118
TOTAL SHORT-TERM INVESTMENTS (Identified cost—$39,842,460)						39,842,460
TOTAL INVESTMENTS (Identified cost—$1,028,374,153)	168.3	%				962,943,060
LIABILITIES IN EXCESS OF OTHER ASSETS	(17.3	)%				(98,623,371	)
LIQUIDATION VALUE OF PREFERRED SHARES	(51.0	)%				(292,000,000	)
NET ASSETS APPLICABLE TO COMMON SHARES (Equivalent to $13.21 per share based on 43,320,750 shares of common stock outstanding)	100.0	%			$	572,319,689

Counterparty	Notional Amount		Fixed Rate Payable			Floating Rate^a(reset monthly) Receivable			Termination Date	Unrealized Depreciation
Merrill Lynch Derivative Products AG	$	35,000,000		3.510	%		0.508	%	December 22, 2012	$	(2,172,337	)
Royal Bank of Canada	$	35,000,000		3.525	%		0.961	%	October 17, 2012		(2,138,272	)
Royal Bank of Canada	$	72,000,000		3.615	%		0.471	%	March 29, 2014		(5,428,916	)
UBS AG	$	35,000,000		2.905	%		0.471	%	May 25, 2012		(1,276,151	)
										$	(11,015,676	)

ASSETS:
Investments in securities, at value (Identified cost—$1,028,374,153)	$	962,943,060
Receivable for investment securities sold		7,687,262
Dividends and interest receivable		5,234,331
Other assets		674,991
Total Assets		976,539,644
LIABILITIES:
Payable for revolving credit agreement		98,150,000
Unrealized depreciation on interest rate swap transactions		11,015,676
Payable for dividends declared on common shares		1,532,966
Payable for investment management fees		509,665
Payable for dividends declared on preferred shares		212,423
Payable for administration fees		47,046
Payable for interest expense		8,135
Payable for directors' fees		2,058
Other liabilities		741,986
Total Liabilities		112,219,955
LIQUIDATION VALUE OF PREFERRED SHARES		292,000,000
TOTAL NET ASSETS APPLICABLE TO COMMON SHARES	$	572,319,689
TOTAL NET ASSETS APPLICABLE TO COMMON SHARES consist of:
Common stock ($0.001 par value, 43,320,750 shares issued and outstanding)	$	703,227,211
Accumulated undistributed net investment income		4,450,522
Accumulated net realized loss		(58,903,710	)
Net unrealized depreciation		(76,454,334	)
	$	572,319,689
NET ASSET VALUE PER COMMON SHARE:
($572,319,689 ÷ 43,320,750 shares outstanding)	$	13.21
MARKET PRICE PER COMMON SHARE	$	10.30
MARKET PRICE DISCOUNT TO NET ASSET VALUE PER COMMON SHARE		(22.03	)%

	Number of Contracts			Premium
Options outstanding at December 31, 2007		—		$	—
Options written		7,725,322			11,047,763
Options expired		(5,640,000	)		(7,376,100	)
Options terminated in closing transactions		(2,085,322	)		(3,671,663	)
Options outstanding at December 31, 2008		—		$	—

Series	Shares Outstanding 12/31/07		Number of Shares Redeemed		Shares Outstanding 12/31/08		Total Value 12/31/07		Amount Redeemed		Total Value 12/31/08
M7		3,400		1,877		1,523	$	85,000,000	$	46,925,000	$	38,075,000
T7		3,400		1,877		1,523	$	85,000,000	$	46,925,000	$	38,075,000
T7-2		3,400		1,877		1,523	$	85,000,000	$	46,925,000	$	38,075,000
T28		2,680		1,480		1,200	$	67,000,000	$	37,000,000	$	30,000,000
W7		3,400		1,877		1,523	$	85,000,000	$	46,925,000	$	38,075,000
TH7		3,000		1,658		1,342	$	75,000,000	$	41,450,000	$	33,550,000
TH28		3,400		1,877		1,523	$	85,000,000	$	46,925,000	$	38,075,000
F7		3,400		1,877		1,523	$	85,000,000	$	46,925,000	$	38,075,000
							$	652,000,000	$	360,000,000	$	292,000,000

Investment Income:
Dividend income (net of $605,794 of foreign withholding tax)	$	69,538,393
Interest income		11,460,844
Total Income		80,999,237
Expenses:
Investment management fees		13,426,409
Preferred remarketing fee		1,471,372
Administration fees		1,041,004
Line of credit fees		949,754
Professional fees		748,912
Reports to shareholders		746,106
Interest expense		578,989
Custodian fees and expenses		244,254
Directors' fees and expenses		53,216
Transfer agent fees and expenses		20,802
Registration and filing fees		16,180
Miscellaneous		218,413
Total Expenses		19,515,411
Reduction of Expenses (See Note 2)		(3,159,155	)
Net Expenses		16,356,256
Net Investment Income		64,642,981
Net Realized and Unrealized Gain (Loss):
Net realized gain (loss) on:
Investments		(61,185,618	)
Options		7,613,854
Foreign currency transactions		(139,531	)
Interest rate swap transactions		(8,376,909	)
Net realized loss		(62,088,204	)
Net change in unrealized appreciation (depreciation) on:
Investments		(576,133,884	)
Foreign currency translations		(7,464	)
Interest rate swap transactions		(9,780,753	)
Net change in unrealized appreciation (depreciation)		(585,922,101	)
Net realized and unrealized loss		(648,010,305	)
Net Decrease in Net Assets Resulting from Operations		(583,367,324	)
Less Dividends to Preferred Shareholders		(23,023,645	)
Net Decrease in Net Assets from Operations Applicable to Common Shares	$	(606,390,969	)

	For the Year Ended December 31, 2008			For the Year Ended December 31, 2007
Change in Net Assets Applicable to Common Shares:
From Operations:
Net investment income	$	64,642,981		$	65,101,392
Net realized gain (loss)		(62,088,204	)		69,437,025
Net change in unrealized appreciation (depreciation)		(585,922,101	)		80,766,398
Net increase (decrease) in net assets resulting from operations		(583,367,324	)		215,304,815
Less Dividends and Distributions to Preferred Shareholders from:
Net investment income		(23,023,645	)		(17,393,092	)
Net realized gain		—			(16,929,730	)
Total dividends and distributions to preferred shareholders		(23,023,645	)		(34,322,822	)
Net increase (decrease) in net assets from operations applicable to common shares		(606,390,969	)		180,981,993
Less Dividends and Distributions to Common Shareholders from:
Net investment income		(35,295,528	)		(52,055,999	)
Net realized gain		—			(48,184,618	)
Tax return of capital		(66,724,839	)		(31,237,873	)
Total dividends and distributions to common shareholders		(102,020,367	)		(131,478,490	)
Capital Stock Transactions:
Decrease in net assets from preferred share offering cost adjustment		(4,920	)		—
Decrease in net assets from underwriting commissions and offering expenses from issuance of preferred shares		—			(1,075,000	)
Decrease in net assets from fund share transactions		(4,920	)		(1,075,000	)
Total increase (decrease) in net assets applicable to common shares		(708,416,256	)		48,428,503
Net Assets Applicable to Common Shares:
Beginning of year		1,280,735,945			1,232,307,442
End of year^a	$	572,319,689		$	1,280,735,945

	Year Ended December 31,												For the Period March 30, 2004^athrough
Per Share Operating Performance:	2008			2007			2006			2005			December 31, 2004
Net asset value per common share, beginning of period	$	29.56		$	28.45		$	23.95		$	22.38		$	19.10
Income from investment operations:
Net investment income		1.48			1.61			1.56			1.42	^b		0.85	^b
Net realized and unrealized gain (loss)		(14.94	)		3.35			5.13			1.72			3.36
Total income (loss) from investment operations		(13.46	)		4.96			6.69			3.14			4.21
Less dividends and distributions to preferred shareholders from:
Net investment income		(0.53	)		(0.40	)		(0.51	)		(0.37	)		(0.12	)
Net realized gain		—			(0.39	)		(0.13	)		(0.02	)		(0.00	)^c
Total dividends and distributions to preferred shareholders		(0.53	)		(0.79	)		(0.64	)		(0.39	)		(0.12	)
Total from investment operations applicable to common shares		(13.99	)		4.17			6.05			2.75			4.09
Less: Preferred share offering cost adjustment		(0.00	)^c		—			0.00	^c		—			—
Offering costs charged to paid-in capital—common shares		—			—			—			—			(0.04	)
Offering costs charged to paid-in capital—preferred shares		—			(0.02	)		—			(0.02	)		(0.14	)
Anti-dilutive effect of common share offering		—			—			—			—			0.05
Total offering costs		(0.00	)		(0.02	)		0.00			(0.02	)		(0.13	)
Less dividends and distributions to common shareholders from:
Net investment income		(0.82	)		(1.20	)		(1.05	)		(1.03	)		(0.67	)
Net realized gain		—			(1.12	)		(0.28	)		(0.04	)		(0.01	)
Tax return of capital		(1.54	)		(0.72	)		(0.22	)		(0.09	)		(0.00	)^c
Total dividends and distributions to common shareholders		(2.36	)		(3.04	)		(1.55	)		(1.16	)		(0.68	)
Net increase (decrease) in net asset value per common share		(16.35	)		1.11			4.50			1.57			3.28
Net asset value, per common share, end of period	$	13.21		$	29.56		$	28.45		$	23.95		$	22.38
Market value, per common share, end of period	$	10.30		$	27.50		$	24.48		$	20.16		$	19.82
Net asset value total return^d		–49.17	%		15.93	%		27.30	%		13.16	%		21.57	%^e
Market value return^d		–57.40	%		25.34	%		30.13	%		7.55	%		2.82	%^e

	Year Ended December 31,												For the Period March 30, 2004^athrough
Ratios/Supplemental Data:	2008			2007			2006			2005			December 31, 2004
Net assets applicable to common shares, end of period (in millions)	$	572.3		$	1,280.7		$	1,232.3		$	1,037.6		$	969.4
Ratio of expenses to average daily net assets applicable to common shares (before expense reduction)^f		2.00	%		1.54	%		1.59	%		1.55	%		1.51	%^g
Ratio of expenses to average daily net assets applicable to common shares (net of expense reduction)^f		1.68	%		1.24	%		1.28	%		1.26	%		1.22	%^g
Ratio of expenses to average daily net assets applicable to common shares (net of expense reduction and excluding interest expense)^f		1.62	%		—			—			—			—
Ratio of net investment income to average daily net assets applicable to common shares (before expense reduction)^f		6.31	%		4.67	%		5.60	%		5.72	%		5.33	%^g
Ratio of net investment income to average daily net assets applicable to common shares (net of expense reduction)^f		6.64	%		4.97	%		5.90	%		6.02	%		5.62	%^g
Ratio of expenses to average daily managed assets (before expense reduction)^f,h		1.24	%		1.04	%		1.05	%		1.05	%		1.06	%^g
Ratio of expenses to average daily managed assets (net of expense reduction)^f,h		1.04	%		0.84	%		0.85	%		0.85	%		0.86	%^g
Portfolio turnover rate		29	%		23	%		15	%		23	%		14	%^e
Preferred Shares/Revolving Credit Agreement:
Liquidation value, end of period (in 000's)	$	292,000		$	652,000		$	567,000		$	567,000		$	492,000
Total shares outstanding (in 000's)		12			26			23			23			20
Asset coverage ratio for revolving credit agreement		981	%		—			—			—			—
Asset coverage per $1,000 for revolving credit agreement	$	9,806		$	—		$	—		$	—		$	—
Asset coverage ratio for auction market preferred sharesⁱ		247	%		296	%		317	%		283	%		297	%
Asset coverage per share for auction market preferred sharesⁱ	$	61,750		$	74,108		$	79,335		$	70,748		$	74,259
Liquidation preference per share	$	25,000		$	25,000		$	25,000		$	25,000		$	25,000
Average market value per share^j	$	25,000		$	25,000		$	25,000		$	25,000		$	25,000

				Fair Value Measurements at December 31, 2008 Using
	Total			Quoted Prices In Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Investments in Securities	$	962,943,061		$	777,392,963	$	182,487,048		$	3,063,050
Other Financial Instruments^*		(11,015,676	)		—		(11,015,676	)		—

	Investments in Securities
Balance as of December 31, 2007	$	9,716,400
Realized loss		(2,616,027	)
Change in unrealized appreciation		740,668
Net sales		(4,777,991	)
Balance as of December 31, 2008	$	3,063,050

	For the Year Ended December 31,
	2008		2007
Ordinary income	$	58,319,173	$	69,449,091
Long-term capital gains		—		65,114,348
Tax return of capital		66,724,839		31,237,873
Total dividends and distributions	$	125,044,012	$	165,801,312

Cost for federal income tax purposes	$	1,023,126,650
Gross unrealized appreciation		105,125,130
Gross unrealized depreciation		(165,308,720	)
Net unrealized depreciation		(60,183,590	)
Other cost basis adjustments		(13,090,662	)
Total net unrealized depreciation	$	(73,274,252	)

	Value		Range
Auction market preferred shares, Series M7, ($25,000 liquidation value, $0.001 par value, 1,523 shares issued and outstanding)	$	38,075,000		1.52	%-5.94%
Auction market preferred shares, Series T7, ($25,000 liquidation value, $0.001 par value, 1,523 shares issued and outstanding)	$	38,075,000		1.58	%-5.50%
Auction market preferred shares, Series T7-2, ($25,000 liquidation value, $0.001 par value, 1,523 shares issued and outstanding)	$	38,075,000		1.58	%-5.50%
Auction market preferred shares, Series T28, ($25,000 liquidation value, $0.001 par value, 1,200 shares issued and outstanding)	$	30,000,000		2.79	%-5.72%
Auction market preferred shares, Series W7, ($25,000 liquidation value, $0.001 par value, 1,523 shares issued and outstanding)	$	38,075,000		1.52	%-5.77%
Auction market preferred shares, Series TH7, ($25,000 liquidation value, $0.001 par value, 1,342 shares issued and outstanding)	$	33,550,000		1.51	%-6.01%
Auction market preferred shares, Series TH28, ($25,000 liquidation value, $0.001 par value, 1,523 shares issued and outstanding)	$	38,075,000		1.72	%-5.30%
Auction market preferred shares, Series F7, ($25,000 liquidation value, $0.001 par value, 1,523 shares issued and outstanding)	$	38,075,000		1.51	%-5.94%