Under the Convertible and Income Securities Fund's payout policy, the Fund pays a minimum annual distribution of 8.00% of the average net asset value of the Fund. Pursuant to this policy, the Fund pays $0.20 per share in each of the first three quarters of the year and an adjusting distribution in the fourth quarter of a sufficient amount to pay 8.00% of the average net asset value of the Fund, as of the last day of the four preceding calendar quarters, or to satisfy the minimum distribution requirements of the Internal Revenue Code, whichever is greater. Each quarter, the Board of Directors reviews the amount of any potential distribution and the income, capital gain or capital available.

The Board of Directors determined to distribute $0.20 per share in an effort to provide a consistent level of distributions for shareholders even though the minimum annual distribution of 8.00% of the average net asset value of the Fund equates to $0.09 per share for the fourth quarter of 2004 or $0.69 per share for full year 2004.

A portion of the distributions paid in 2004 may be treated as a non-taxable return of capital. Since this would be considered a return of a portion of a shareholder's original investment, it is not taxable and is treated as a reduction in the shareholder's cost basis. For more information on return of capital and managed distribution policies, please review our research report, Closed-End Funds - Managed Distribution Policy, on the Gabelli website at www.gabelli.com.

A portion of the distribution may be treated as long-term capital gain and qualifying dividend income for individuals, each subject to the maximum Federal income tax rate, which is currently 15% in taxable accounts for individuals. If the Fund does not generate earnings from dividends, interest and net realized capital gains equal to or in excess of the aggregate distributions paid by the Fund for the year, then the amount distributed in excess of the Fund's investment income and net realized capital gains will be deemed a non-taxable return of capital. Long-term capital gain, qualifying dividend income, ordinary income and non-taxable return of capital, if any, will be allocated on a pro-rata basis to all distributions to common shareholders for the year. The final determination of the source of all distributions in 2004 will be made after year-end. All shareholders with taxable accounts will receive written notification regarding the components and tax treatment for all 2004 distributions in early 2005 via Form 1099-DIV.

The Gabelli Convertible and Income Securities Fund Inc. is a closed-end, diversified management investment company with $148 million in total assets whose primary investment objective is to seek a high level of total return through a combination of current income and capital appreciation. The Fund is managed by Gabelli Funds, LLC, a subsidiary of Gabelli Asset Management Inc. (NYSE:GBL), which is a publicly traded NYSE listed company.