The Board of Trustees of Reaves Utility Income Fund (NYSE MKT: UTG) has authorized and set the terms of an offering to the Fund’s shareholders of rights to purchase additional common shares of the Fund. The Fund is issuing transferable subscription rights (“Rights”) to its common shareholders of record as of July 9, 2012 (the “Record Date” and such shareholders, “Record Date Shareholders”) who will be allowed to subscribe for new common shares of the Fund (the “Primary Subscription”). Record Date Shareholders will receive one Right for each common share held on the Record Date. For every three Rights held, a holder of Rights may buy one new common share of the Fund. Record Date Shareholders who fully exercise all Rights initially issued to them in the Primary Subscription will be entitled to buy those common shares that are not purchased by other Record Date Shareholders. In addition, the Fund, in its sole discretion, may elect to issue additional common shares in an amount of up to 25% of the common shares issued in the Primary Subscription. The subscription price per common share will be determined based upon a formula equal to 95% of the reported net asset value or market price per common share, whichever is lower on the Expiration Date (as defined below). Market price per common share will be determined based on the average of the last reported sales price of a common share on the NYSE MKT for the five trading days preceding the Expiration Date. The rights offering is subject to the effectiveness of the Fund’s Registration Statement currently on file with the Securities and Exchange Commission (the “SEC”) and will be made only by means of a prospectus. The Fund anticipates that the offering will expire on or about August 8, 2012 (the “Expiration Date”).