Reaves Utility Income Fund : 2023 Annual Report

Annual Report 2023

Section 19(b) Disclosure

October 31, 2023 (Unaudited)

Reaves Utility Income Fund (the "Fund"), acting pursuant to a Securities and Exchange Commission ("SEC") exemptive order and with the approval of the Fund's Board of Trustees (the "Board"), has adopted a plan, consistent with its investment objectives and policies to support a level distribution of income, capital gains and/or return of capital (the "Plan"). In accordance with the Plan, the Fund currently distributes $0.19 per share on a monthly basis.

The fixed amount distributed per share is subject to change at the discretion of the Fund's Board. Under the Plan, the Fund will distribute all available investment income to its shareholders, consistent with its primary investment objectives and as required by the Internal Revenue Code of 1986, as amended (the "Code"). If sufficient investment income is not available on a monthly basis, the Fund will distribute long-term capital gains and/or return of capital to shareholders in order to maintain a level distribution. Each monthly distribution to shareholders is expected to be at the fixed amount established by the Board, except for extraordinary distributions and potential distribution rate increases or decreases to enable the Fund to comply with the distribution requirements imposed by the Code.

Shareholders should not draw any conclusions about the Fund's investment performance from the amount of these distributions or from the terms of the Plan. The Fund's total return performance on net asset value is presented in its financial highlights table.

The Board may amend, suspend or terminate the Fund's Plan without prior notice if it deems such action to be in the best interest of the Fund or its shareholders. The suspension or termination of the Plan could have the effect of creating a trading discount (if the Fund's stock is trading below net asset value) or widening an existing trading discount. The Fund is subject to risks that could have an adverse impact on its ability to maintain level distributions. Examples of potential risks include, but are not limited to, economic downturns impacting the markets, increased market volatility, companies suspending or decreasing corporate dividend distributions and changes in the Code.

Please refer to Additional Information for a cumulative summary of the Section 19(a) notices for the Fund's current fiscal period. Section 19(a) notices for the Fund, as applicable, are available on the Fund's website www.utilityincomefund.com.

Reaves Utility Income Fund	Table of Contents
Shareholder Letter	. . . . . . . . . . . . .2
Report of Independent Registered Public Accounting Firm	. . . . . . . . . . . . .7
Statement of Investments	. . . . . . . . . . . . .8
Statement of Assets and Liabilities	. . . . . . . . . . . . . 12
Statement of Operations	. . . . . . . . . . . . . 13
Statements of Changes in Net Assets	. . . . . . . . . . . . . 14
Statement of Cash Flows	. . . . . . . . . . . . . 15
Financial Highlights	. . . . . . . . . . . . . 16
Notes to Financial Statements	. . . . . . . . . . . . . 21
Additional Information	. . . . . . . . . . . . . 29
Trustees & Officers	. . . . . . . . . . . . . 33
Summary of Fund Expenses	. . . . . . . . . . . . . 37
Summary of Updated Information Regarding the Fund	. . . . . . . . . . . . . 39

Annual Report October 31, 2023

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Reaves Utility Income Fund	Shareholder Letter
	October 31, 2023 (Unaudited)

To our Shareholders:

Fiscal 2023 Investment Portfolio Returns

Total net assets of the Fund were $1.894 billion on October 31, 2023, or $24.53 of net asset value ("NAV") per common share. One year ago, net assets totaled $1.994 billion representing $27.71 of net asset value per common share.

The changes include distributions to shareholders totaling $170.2 million or $2.28 per share. Changes in the market price of the Fund can and do differ from the underlying changes in the net asset value per common share. As a result, the market return to common shares can be higher or lower than the NAV return.

The fiscal 2023 market return for shareholders was -3.40% as is reflected in the table below. The share price of the Fund traded at a premium of 0.12% to the NAV at fiscal year‐end versus a discount of 0.32% at the beginning of the fiscal year.

		Three			Since
	One Year	Years^	Five Years^	Ten Years^ Inception^*
UTG (NAV)**	-3.83%	-0.20%	1.86%	5.69%	8.69%
UTG (Market)**	-3.40%	-0.88%	2.79%	6.48%	8.44%
S&P 500 Utilities Index1	-7.72%	1.67%	5.51%	8.05%	8.62%
Dow Jones Utility Average2	-6.40%	2.20%	5.88%	8.81%	9.58%

• Annualized.

• Index data since February 29, 2004
• Assumes all dividends being reinvested

1. S&P 500 Utilities Index is a capitalization-weighted index containing 30 Electric and Gas Utility stocks (including multi-utilities and independent power producers).
2. The Dow Jones Utility Average is a price-weighted average of 15 utility stocks traded in the United States.

The performance data quoted represents past performance. Past performance is no guarantee of future results.

Distributions to Common Shareholders

Since the Fund's first distribution in April 2004, distributions to shareholders have totaled over $1.3 billion consisting of dividend income and realized capital gains with no returns of capital.

The monthly distribution has increased on 12 occasions from the initial monthly amount of $0.0967 per share to the current amount of $0.19 per share, representing a cumulative increase of 96.5%. The Trustees of the Fund regularly review the amount of the monthly distribution.

For the calendar year 2022, all distributions from the Fund were paid from net investment income including realized capital gains. We anticipate that all distributions for the 12 months ending December 31, 2023, will also be characterized as paid from net investment income and realized

capital gains.

Leverage Facility

The Fund ended the fiscal year with $520 million in debt, up from $500 million at the end of fiscal 2022. Leverage stood at 27.46% (21.44% on total assets) versus 25.07% of net assets (20.02% on total assets) on October 31, 2022. For details about the facility please refer to Note 5 of the accompanying financial statements.

www.utilityincomefund.com

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Reaves Utility Income Fund	Shareholder Letter
	October 31, 2023 (Unaudited)

Overview

The Federal Reserve continued its efforts to rein in inflation, raising the Federal Funds rate six times from a range of 3.00%-3.25% to 5.25%-5.50% in the 12-month period ending October 31, 2023. Yields of U.S. Treasury securities also moved higher, with the 2-year and 10-year notes ending the period at 5.07% and 4.88%, respectively. The rise in both the short and long end of the interest rate curve created a macroeconomic headwind for many of the Fund's investments as the dividend yields of many holdings became less competitive in this environment. Elevated borrowing costs also negatively impacted the Fund.

After a relatively strong 2022, utilities have been the worst performing market sector year-to-date. Most of the weakness can be attributed to rising interest rates as fixed income alternatives became more attractive for income investors. Despite the negative returns, we believe that the financial impact of the current macroeconomic backdrop for most companies in the sector will be small. For regulated utilities, expenses are passed through to customers, leaving previously forecasted long- term growth rates achievable, though there can be a lag between when the company experiences higher costs and when customer bills increase to allow recovery. Companies possessing weaker balance sheets have been forced to sell assets and raise equity, but this financial repair has largely been accomplished, leaving the sector in a much better place entering 2024.

In communications infrastructure, where the Fund invests in cable, data centers, wireless towers and traditional telecom, returns were mixed. Cable stocks rebounded after poor performance in the prior fiscal year. Data centers also contributed to performance due to the continued migration of enterprises to cloud computing, in addition to the potential tailwinds from Artificial Intelligence. These utility-like businesses offer the steady revenue and dividend growth we seek, and their increasing electricity consumption offers another potential reason to be enthused about our core electric utility holdings.

Wireless tower stocks were negatively impacted by a slowdown in wireless carrier capital spending. We believe carriers will need to spend significantly more with towers in future years as they continue to make 5G technology and infrastructure ubiquitous, but we acknowledge that a reacceleration in spending may take a few quarters to develop.

The Fund's pipeline and rail investments contributed positively to performance. Both industries benefited from stronger than expected economic activity. Pipeline companies generate more free cash flow and carry less balance sheet leverage than they have historically, while rails continue to focus on improving operating metrics.

Despite the challenging macroeconomic environment, the Fund continues to pay distributions to shareholders from earned dividends and long-term capital gains with no returns of capital. Looking forward, we anticipate that the Federal Reserve is near the end of its tightening cycle, which could usher in a more supportive backdrop for utilities and other income-oriented equities.

Sincerely,

Timothy O. Porter, CFA, Portfolio Manager, Reaves Asset Management-CIO John P. Bartlett, CFA, Portfolio Manager, Reaves Asset Management-President Jay Rhame, Fund President, Portfolio Manager, Reaves Asset Management-CEO

Sources of distributions to shareholders may include net investment income, net realized short-term capital gains, net realized long-term capital gains and return of capital. If a distribution includes anything other than net investment income, the Fund provides a Section 19(a) notice of the best estimate of its distribution sources at that time. Please refer to Additional Information for a cumulative summary of the Section 19(a) notices for the Fund's current period. The actual

Annual Report

October 31, 2023

3

Reaves Utility Income Fund	Shareholder Letter
	October 31, 2023 (Unaudited)

amounts and sources of distributions for tax reporting purposes will depend upon the Fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The estimates may not match the final tax characterization (for the full year's distributions) contained in the shareholder's Form 1099-DIV. Distribution payments are not guaranteed; distribution rates may vary.

You cannot invest directly in an index.

www.utilityincomefund.com

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Reaves Utility Income Fund	Shareholder Letter
	October 31, 2023 (Unaudited)

Growth of a hypothetical $10,000 investment

The graph below illustrates the growth of a hypothetical $10,000 investment assuming the purchase of common shares at NAV or the closing market price (NYSE: UTG) of $25.92 on October 31, 2013, and tracking its progress through October 31, 2023.

$30,000

$20,000
$10,000
$0
3	1/15	/31	7	9	1/21	/31	3
/31/1	1	10/31/1	2
10	10/3	1		1	10
		/		0/3	/
		0

UTG (NAV) - $17,391

UTG (Market) - $18,743

S&P 500 Utilities Index - $21,692

Past performance does not guarantee future results. Performance will fluctuate with changes in market conditions. Current performance may be lower or higher than the performance data shown. Performance information does not reflect the deduction of taxes that shareholders would pay on Fund distributions or the sale of Fund shares. An investment in the Fund involves risk, including loss of principal.

Annual Report

October 31, 2023

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Reaves Utility Income Fund	Shareholder Letter
	October 31, 2023 (Unaudited)

INDUSTRY ALLOCATION AS OF OCTOBER 31, 2023

Multi-Utilities - 36.32%

Electric Utilities - 30.37%

Diversified Telecommunications Services - 17.70%

Real Estate Investment Trusts (REITs) - 9.69%

Road & Rail - 8.20%

Oil, Gas & Consumable Fuels - 8.16%

Media - 5.86%

Independent Power and Renewable Electricity Producers - 3.75%

Money Market Funds - 3.40%

Water Utilities - 2.34%

Wireless Telecommunication Services - 1.43%

Gas Utilities - 0.22%

Energy - 0.14%

Cable & Satellite - 0.10%

Utilities - 0.09%

Industries are displayed as a % of net assets. Holdings are subject to change.

www.utilityincomefund.com

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	Report of Independent Registered
Reaves Utility Income Fund	Public Accounting Firm

To the shareholders and the Board of Trustees of Reaves Utility Income Fund

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of Reaves Utility Income Fund (the "Fund"), including the statement of investments, as of October 31, 2023, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the ten years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of October 31, 2023, and the results of its operations and its cash flows 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 ten years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2023, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

Denver, Colorado

December 22, 2023

We have served as the auditor of Reaves Utility Income Fund since 2005.

Annual Report October 31, 2023

7

Reaves Utility Income Fund	Statement of Investments
			October 31, 2023
	SHARES		VALUE
COMMON STOCKS - 124.04%
Diversified Telecommunications Services - 17.70%
BCE, Inc.	1,946,500	$	72,273,545
Cogent Communications Holdings, Inc.(a)	185,000		12,021,300
Deutsche Telekom AG	4,268,042		92,465,437
Rogers Communications, Inc., Class B	1,365,000		50,574,148
Telus Corp.	4,170,100		67,238,822
Verizon Communications, Inc.(a)	1,153,102		40,508,473
			335,081,725
Electric Utilities - 30.37%
American Electric Power Co., Inc.	675,000		50,989,500
Duke Energy Corp.(a)	906,000		80,534,340
Edison International(a)	835,000		52,655,100
Entergy Corp.	918,900		87,837,652
Exelon Corp.(a)	1,175,161		45,760,769
FirstEnergy Corp.(a)	348,100		12,392,360
Fortis, Inc.	53,000		2,105,690
NextEra Energy, Inc.	1,100,000		64,130,000
Pinnacle West Capital Corp.	698,000		51,777,640
PPL Corp.	3,315,046		81,450,680
Southern Co.	677,300		45,582,290
			575,216,021
Gas Utilities - 0.22%
Atmos Energy Corp.(a)	20,000		2,153,200
Northwest Natural Holding Co.	55,000		2,019,050
			4,172,250
Independent Power and Renewable Electricity Producers - 3.75%
Constellation Energy Corp.	600,667		67,827,318
Vistra Corp.(a)	100,000		3,272,000
			71,099,318
Media - 5.86%
Charter Communications, Inc., Class A(a)(b)	70,500		28,397,400
Comcast Corp., Class A(a)	2,000,000		82,580,000
			110,977,400
Multi-Utilities - 36.32%
Alliant Energy Corp.(a)	1,503,103		73,336,395
Ameren Corp.(a)	716,000		54,208,360
CMS Energy Corp.(a)	1,570,500		85,340,970
DTE Energy Co.	580,200		55,919,676

See Accompanying Notes to Financial Statements.

www.utilityincomefund.com

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