<PAGE>
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[LOGO]
THE GLOBAL
GOVERNMENT PLUS
FUND, INC.
- ----------------------------
ANNUAL REPORT
DECEMBER 31, 1993
sm The mark is a service mark of The
Prudential Insurance Company of America.
<PAGE>
Letter to Shareholders
January 31, 1994
Dear Shareholder:
The fundamental breakdown of the European exchange rate mechanism in
August and the divergence of global economic growth patterns during the
last 12 months contributed to a volatile global fixed income investment
environment. Despite this, The Global Government Plus Fund, Inc. was able
to circumvent much of the instability and provide competitive returns.
The Fund seeks high income by investing in a portfolio of longer-term,
high quality government debt securities throughout the world.
<TABLE>
<CAPTION>
Fund Performance
12 month Total
Return (12/31/93)
<S> <C>
The Global Government Plus Fund, Inc.* 18.52%
JP Morgan Global Traded Government Bond Index** 12.27%
<FN>
*Total return of the Fund as calculated herein represents the change in net
asset value from 1/1/93 through 12/31/93 and assumes the reinvestment of
dividends and distributions. Shares of the Fund are traded on the NYSE. Past
performance is no guarantee of future results.
**JP Morgan Global Traded Government Bond Index is a weighted index of the
total return of foreign government bonds from 13 countries, including
Australia, Belgium, Canada, Denmark, France, Germany, Italy, Japan,
Netherlands, Spain, Sweden, United Kingdom and the United States and provides
a broad measure of market performance.
</TABLE>
Your Fund's net asset value rose from $7.38 on December 31, 1992 to $7.84 on
December 31, 1993 and paid dividends and distributions of $0.825 per share
during the year.
STOCK LISTING
The Global Government Plus Fund, Inc.'s common stock is traded on the New
York Stock Exchange under the symbol "GOV" and is frequently listed as
"GlobGvtFd" or "GlbGvt" in the financial sections of newspapers. It is also
listed in a closed-end fund table every Monday in The Wall Street Journal.
Bond Markets Yields and Your Fund
During 1993, recession in Europe, slow and uneven growth in the dollar bloc
nations of Australia, Canada, New Zealand and the U.S., and lower global
inflationary pressures encouraged bond yields to fall around the world. Since
bond prices generally rise when interest rates drop, the Fund, by maintaining
a diversified portfolio of longer-dated bonds, was better positioned to
capture significant capital gains in many bond markets.
Decreases in overseas bond yields continued to outpace North American
markets. In particular, the Fund's European bond holdings offered
signifi-
1
<PAGE>
cantly higher total returns than comparable U.S. Treasuries. Sluggish
economic growth in Europe caused interest rates to decline sharply since the
end of June. As of December 31, 1993, the Fund held approximately 56% of its'
assets in Europe with a significant portion of its' European currency exposure
hedged backed into the U.S. dollar. [See accompanying pie chart]
We also maintained our holdings in Japan. The Japanese economy continued to
weaken and inflation remained extremely low. Prior government intervention
intended to benefit the economy has only been modestly successful. The bond
market should continue to benefit as long as these conditions persist.
Our holdings of U.S. bonds were reduced during the period when stronger U.S.
economic data pointed to sustained growth. Despite this resurgence, inflation
does not seem to be a major threat. However, U.S. government bond yields rose
when the Federal Reserve implied that it may move to increase short-term rates
in 1994 if any signs of inflation emerge.
Currency Markets
During the first six months of last year, the U.S. dollar was mixed. The
dollar, however, strengthened during the second half of 1993 on data that
indicated there was an increasing divergence of growth patterns between the
U.S. and most other major industrialized nations. The Japanese yen, after
strengthening dramatically during the first six months of the year, has come
under downward pressure against the U.S. dollar as growth prospects in Japan
remain bleak.
In Europe, tight monetary policy continues to drag down economic growth. As
a result, currency markets have been anticipating further declines in official
interest rates in the coming months. Since this would help to depreciate many
European currencies against a rising U.S. dollar, we have hedged a significant
portion of the Fund's foreign currency exposure back to the United States. The
currencies of the dollar bloc nations of Canada and Australia remained
generally stable over the period.
Outlook
The prospects for the global bond market are positive. Given the low level
of U.S. interest rates, economic weakness abroad, and generally stable
worldwide inflation, global bonds should remain attractive in 1994. We will
attempt to maintain diversified holdings in various world bond markets in
order to capture both high current yields and potential capital gains
resulting from falling interest rates. In coming months, we will continue to
focus on investments outside of the United States. In addition, if the U.S.
dollar appreciates further against other foreign currencies, hedging will
become an important portfolio strategy.
COUNTRY ALLOCATION*
- -------------------
(As of December 31, 1993)
Cash Australia US Mexico Canada Japan European Countries
2.2% 2% 20.9% 5% 4.7% 8.9% 56.3%
*Percent of Net Assets
2
<PAGE>
As always, it is a pleasure to have you as a shareholder of The Global
Government Plus Fund, Inc. and to take the opportunity to report our
activities to you.
Sincerely,
Lawrence C. McQuade
President
Andrew Barnett
Portfolio Manager
3
<PAGE>
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THE GLOBAL GOVER NMENT PLUS FUND, INC.
Portfolio of Investments
December 31, 1993
<TABLE>
<CAPTION>
- --------------------------------------------------------
Principal US$
Amount Value
(000) Description (Note 1)
- --------------------------------------------------------
<C> <S> <C>
LONG-TERM INVESTMENTS--91.8%
Australia--2.0%
Australian Gov't. Bond,
A$ 9,000 9.00%, 9/15/04........... $ 7,148,012
------------
Canada--4.7%
Canadian Gov't. Bonds,
C$ 9,200# 5.75%, 3/1/99............ 6,947,900
12,000# 7.50%, 12/1/03........... 9,638,148
------------
16,586,048
------------
Denmark--5.9%
Danish Gov't. Bonds,
DKr 55,910# 9.00%, 11/15/98.......... 9,360,168
71,000# 8.00%, 5/15/03........... 11,841,969
------------
21,202,137
------------
France--7.2%
French Gov't. Bond,
FF 116,700# 8.50%, 4/25/23........... 25,550,568
------------
Germany--8.8%
Fed. Rep. of Germany
Bonds,
DM 23,775# 8.00%, 7/22/02........... 15,815,300
25,000# 6.75%, 4/22/03........... 15,494,678
------------
31,309,978
------------
Ireland--4.8%
Irish Gov't. Bonds,
IEP 6,140 9.00%, 7/15/01........... 10,058,134
5,200 6.25%, 10/18/04.......... 7,256,762
------------
17,314,896
------------
Italy--7.8%
Italian Gov't. Bonds,
Lira 7,275,000 12.00%, 9/1/97........... 4,697,989
30,670,000 12.00%, 1/20/98.......... 19,852,672
5,140,000 12.00%, 5/19/98.......... 3,355,292
------------
27,905,953
------------
Japan--8.9%
Japanese Gov't. Bonds,
Y 735,000 6.40%, 3/20/00........... 7,944,454
2,234,000 3.90%, 12/22/03.......... 20,937,544
290,000 5.50%, 9/20/13........... 3,119,085
------------
32,001,083
------------
Netherlands--4.4%
Netherlands Gov't. Bond,
DG 27,700 7.50%, 6/15/99........... $ 15,814,770
------------
Spain--3.7%
Spanish Gov't. Bond,
Pts 1,654,000# 11.45%, 8/30/98.......... 13,190,564
------------
Sweden--7.2%
Swedish Gov't. Bond,
Skr 89,700 11.00%, 1/21/99.......... 12,868,749
Swedish Mortgage Bond,
93,000 12.50%, 1/23/97.......... 12,886,093
------------
25,754,842
------------
United Kingdom--6.5%
United Kingdom Treasury
Notes,
9 8,606# 10.50%, 5/19/99.......... 15,425,105
4,600# 8.00%, 9/27/13........... 7,991,997
------------
23,417,102
------------
United States--19.9%
United States Treasury
Notes,
US$ 17,200 5.125%, 11/30/98......... 17,146,336
18,800 5.50%, 4/15/00........... 18,955,664
18,629+ 6.25%, 2/15/03........... 19,257,729
10,150 5.75%, 8/15/03........... 10,116,708
United States Treasury
Strip,**
36,000 6.81%, 5/15/21........... 5,684,760
------------
71,161,197
------------
Total long-term
investments
(cost US$328,476,512).... 328,357,150
------------
SHORT-TERM INVESTMENTS--6.5%
Mexico--5.0%
Mexican Treasury Bills,**
MP 9,000 10.95%, 4/21/94.......... 2,805,799
50,000 11.72%, 9/8/94........... 15,003,946
------------
17,809,745
------------
United States--1.0%
United States Treasury
Bill,**
US$ 3,740 2.98%, 3/31/94........... 3,712,810
------------
</TABLE>
See Notes to Financial Statements.
-4-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------
US$
Contracts Value
(000) Description (Note 1)
- --------------------------------------------------------
<C> <S> <C>
Outstanding Options Purchased*--0.5%
Call Options--0.5%
German Deutschemarks,
expiring 1/19/94 @
18,998 DM1.71................. $ 376,160
expiring 1/6/94 @
38,033 DM1.60................. 38
Japanese Gov't. Bonds,
5.50%, 3/20/02
expiring 1/31/94 @
1,500,000 Y107.63.............. 1,153,899
4.50%, 6/20/03
expiring 3/14/94 @
2,500,000 Y110.75.............. 146,506
------------
1,676,603
------------
Cross-Currency Call Options
German Deutschemarks,
expiring 1/6/94 @ DM.8635
34,347 per Swiss Frank........ 6,869
------------
Put Options
Australian Dollars,
expiring 1/20/94 @
30,634 A$.6815................ 228,223
German Deutschemarks,
expiring 1/4/94 @
18,456 DM1.70................. 738
------------
228,961
------------
Total short-term
investments
(cost US$22,872,560)..... 23,434,988
------------
Total Investments Before
Outstanding Options
Written--98.3%
(cost $351,349,072;
Note 3)................ 351,792,138
------------
OUTSTANDING OPTIONS WRITTEN*--(0.3%)
Call Options--(0.3%)
Australian Dollars,
expiring 1/20/94 @
30,433 A$.6860................ (77,604)
German Deutschemarks,
expiring 1/6/94 @
38,033 DM1.70................. (882,366)
------------
(959,970)
------------
Put Options
Australian Dollars
expiring 1/20/94 @
31,090 A$.6715................ $ (90,161)
German Deutschemarks,
expiring 1/6/94 @
18,456 DM1.675................ 0
------------
(90,161)
------------
Total outstanding options
written
(premiums received
$665,215).............. (1,050,131)
------------
Total Investments, Net of
Outstanding Options
Written--98.0%......... 350,742,007
Other assets in excess of
liabilities--2.0%........ 7,040,814
------------
Net Assets--100%......... $357,782,821
------------
------------
<FN>
- ---------------
Portfolio securities are classified according to the
security's currency denomination. Option contracts are
expressed in local currency units.
* Non-income producing security.
** Percentages quoted represent yields to maturity as of
purchase date.
# Principal amount segregated as collateral for forward
currency contracts and options written. Aggregate
value of segregated securities-$131,256,397.
+ Partially pledged as initial margin on financial
futures contracts.
</TABLE>
See Notes to Financial Statements.
-5-
<PAGE>
<PAGE>
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THE GLOBAL GOVER NMENT PLUS FUND, INC.
Statement of Assets and Liabilities
December 31, 1993
- ----------------------------------------------------------
<TABLE>
<S> <C>
Assets
Investments, at value (cost
$351,349,072)........................ $351,792,138
Receivable for investments sold........ 18,409,671
Interest receivable.................... 9,853,260
Forward currency contracts--net amount
receivable from counterparties....... 1,316,374
Other assets........................... 48,152
------------
Total assets....................... 381,419,595
------------
Liabilities
Dividend payable....................... 15,746,665
Payable for investments purchased...... 5,632,960
Outstanding call options written, at
value (premiums received $665,215)... 1,050,131
Accrued expenses....................... 447,124
Bank overdraft......................... 437,162
Due to Manager......................... 197,618
Due to broker--variation margin........ 125,114
------------
Total liabilities.................. 23,636,774
------------
Net Assets............................. $357,782,821
------------
------------
Net assets were comprised of:
Common stock, at par................. $ 526,425
Paid-in capital in excess of par..... 404,401,640
Cost of 7,000,000 shares held in
treasury........................... (50,685,700)
------------
354,242,365
Accumulated net realized gains on
investment transactions............ 2,516,287
Net unrealized appreciation on
investments
and foreign currencies........... 1,024,169
------------
Net assets, December 31, 1993........ $357,782,821
------------
------------
Net asset value per share:
($357,782,821 3 45,642,508 shares of
common stock outstanding).......... $7.84
------------
------------
</TABLE>
See Notes to Financial Statements.
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THE GLOBAL GOVER NMENT PLUS FUND, INC.
Statement of Operations
Year Ended December 31, 1993
- ----------------------------------------------------------
<TABLE>
<S> <C>
Net Investment Income
Income
Interest and discount earned (net of
foreign
withholding tax of $469,539)........ $28,940,210
-----------
Expenses
Management fee........................ 2,719,621
Custodian's fees and expenses......... 467,000
Reports to shareholders............... 195,000
Transfer agent's fees and expenses.... 189,000
Directors' fees....................... 86,000
Audit................................. 72,000
Insurance............................. 72,000
Legal................................. 23,000
Miscellaneous......................... 59,758
-----------
Total expenses...................... 3,883,379
-----------
Net investment income................. 25,056,831
-----------
Realized and Unrealized Gain (Loss) on
Investment and Foreign Currency
Transactions
Net realized gain (loss) on:
Security transactions................. 25,828,913
Foreign currency transactions......... (4,823,525)
Written option transactions........... 1,389,365
Financial futures transactions........ 2,339,004
-----------
24,733,757
-----------
Net change in unrealized appreciation
on:
Securities............................ 5,038,740
Foreign currencies.................... 4,222,487
Written options....................... (384,916)
Financial futures..................... (8,750)
-----------
8,867,561
-----------
Net gain on investments and foreign
currencies............................ 33,601,318
-----------
Net Increase In Net Assets Resulting
from Operations......................... $58,658,149
-----------
-----------
</TABLE>
See Notes to Financial Statements.
-6-
<PAGE>
<PAGE>
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THE GLOBAL GOVER NMENT PLUS FUND, INC.
Statement of Changes in Net Assets
- ----------------------------------------------------------
<TABLE>
<CAPTION>
Increase (Decrease)
in Net Assets
Year Ended December 31,
-----------------------------
1993 1992
------------ ------------
<S> <C> <C>
Operations:
Net investment income... $ 25,056,831 $ 30,442,516
Net realized gain on
investments and
foreign currency
transactions.......... 24,733,757 7,220,651
Net change in unrealized
appreciation/depreciation
on investments and
foreign currencies.... 8,867,561 (39,085,948)
------------ ------------
Net increase (decrease)
in net assets
resulting from
operations............ 58,658,149 (1,422,781)
------------ ------------
Dividends and
distributions:
Dividends from net
investment income..... (10,398,530) (30,442,516)
Distributions from net
capital gains......... (24,733,757) (9,266,466)
Distributions in excess
of net
capital gains......... (2,522,669) --
------------ ------------
Total dividends and
distributions........... (37,654,956) (39,708,982)
------------ ------------
Total increase
(decrease).............. 21,003,193 (41,131,763)
Net Assets
Beginning of year......... 336,779,628 377,911,391
------------ ------------
End of year............... $357,782,821 $336,779,628
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements.
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THE GLOBAL GOVER NMENT PLUS FUND, INC.
Notes to Financial Statements
- ----------------------------------------------------------
The Global Government Plus Fund, Inc. (the ``Fund'') was organized in
Maryland on April 20, 1987, as a closed-end, non-diversified management
investment company. Investment operations commenced on July 31, 1987.
The Fund's investment objective is to achieve high dividends to shareholders
relative to interest and capital appreciation returns generally available from
investments in longer-term U.S. Government securities, principally by investment
in high quality debt securities of governmental entities in the United States
and in other major countries and denominated in the currencies of such
countries. The Fund's investments will be rated Aa/AA or better by Moody's
Investors Service, Inc./Standard & Poor's Corporation or will in the investment
adviser's judgement be of equivalent quality. The ability of issuers of debt
securities held by the Fund to meet their obligations may be affected by
economic and political developments in a specific country or region.
Note 1. Accounting The following is a summary of
Policies significant accounting policies
followed by the Fund in the preparation of its
financial statements.
Securities Valuation: In valuing the Fund's assets, quotations of foreign
securities in a foreign currency are converted to U.S. dollar equivalents at the
then current currency value. Portfolio securities that are actively traded in
the over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, are valued at the mean between the
most recently quoted bid and asked prices provided by principal market makers.
Any security for which the primary market is on an exchange is valued at the
last sale price on such exchange on the day of valuation or, if there was no
sale on such day, the last bid price quoted on such day. Forward currency
contracts are valued at the current cost of covering or offsetting the contract
on the day of valuation. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its
See Notes to Financial Statements.
-7-
<PAGE>
<PAGE>
custodian takes possession of the underlying collateral securities, the value of
which exceeds the principal amount of the repurchase transaction including
accrued interest. If the seller defaults and the value of the collateral
declines or if bankruptcy proceedings are commenced with respect to the seller
of the security, realization of the collateral by the Fund may be delayed or
limited.
Foreign Currency Translation: The books and records of the Fund are maintained
in United States dollars. Foreign currency amounts are translated into United
States dollars on the following basis:
(i) market value of investment securities, other assets and liabilities--at
the current rates of exchange.
(ii) purchases and sales of investment securities, income and expenses--at
the rates of exchange prevailing on the respective dates of such
transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the year, 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 fluctuations arising from changes in the market
prices of the securities held at year end. Similarly, the Fund does not isolate
the effect of changes in foreign exchange rates from the fluctuations arising
from changes in the market prices of long-term debt securities sold during the
year. Accordingly, realized foreign currency gains (losses) are included in the
reported net realized gains on security transactions.
Net realized losses on foreign currency transactions represent net foreign
exchange losses from sales and maturities of short-term securities and forward
currency contracts, disposition of foreign currencies, currency gains or losses
realized between the trade and settlement dates on securities transactions, and
the difference between the amounts of interest, discount and foreign taxes
recorded on the Fund's books and the US dollar equivalent amounts actually
received or paid. Net currency gains (losses) from valuing foreign currency
denominated assets (excluding investments) and liabilities at year end exchange
rates are reflected as a component of unrealized appreciation/depreciation on
investments and foreign currencies.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. companies as a result of,
among other factors, the possibility of political or economic instability and
the level of governmental supervision and regulation of foreign securities
markets.
Forward Currency Contracts: The Fund enters into forward currency contracts in
order to hedge its exposure to changes in currency exchange rates on its
portfolio holdings. A forward contract is a commitment to purchase or sell a
foreign currency at a future date at a negotiated forward rate. The gain or loss
arising from the difference between the settlement value of the original
contract and the renegotiated forward contract is isolated and is included in
net realized losses from foreign currency transactions. Risks may arise upon
entering into these contracts from the potential inability of the counterparties
to meet the terms of their contracts.
Option Writing: When the Fund writes an option, an amount equal to the premium
received by the Fund is recorded as a liability and is subsequently adjusted to
the current market value of the option written. Premiums received from writing
options which expire unexercised are treated by the Fund on the expiration date
as realized gains from written options transactions. The difference between the
premium and the amount paid on effecting a closing purchase transaction,
including brokerage commissions, is also treated as a realized gain, or if the
premium is less than the amount paid for the closing purchase transaction, as a
realized loss. If a call option is exercised, the premium is added to the
proceeds from the sale of the underlying security or currency in determining
whether the Fund has realized a gain or loss. If a put option is exercised, the
premium reduces the cost basis of the securities or currencies purchased by the
Fund. The Fund as writer of an option may have no control over whether the
underlying securities or currencies may be sold (called) or purchased (put) and
as a result bears the market risk of an unfavorable change in the price of the
security or currency underlying the written option.
Financial Futures Contracts: A financial futures contract is an agreement to
purchase (long) or sell (short) an agreed amount of debt securities at a set
price for delivery on a future date. Upon entering into a financial futures
contract, the Fund is required to pledge to the broker an amount of cash and/or
other assets equal to a certain percentage of the contract amount. The amount is
known as the ``initial margin''. Subsequent payments, known as ``variation
margin'', are made or received by the Fund each day, depending on the daily
fluctuations in the value of the underlying security. Such variation margin is
recorded for financial statement purposes on a daily basis as unrealized gain or
loss.
The Fund invests in financial futures contracts solely for the purpose of
hedging its existing portfolio securities or securities the Fund intends to
purchase against fluctuations in value caused by changes in prevailing market
interest rates. Should interest rates move unexpectedly the Fund may not achieve
-8-
<PAGE>
<PAGE>
the anticipated benefits of the financial futures contracts and may realize a
loss. The use of futures transactions involves the risk of imperfect correlation
in movements in the price of futures contracts, interest rates and the
underlying hedged assets.
Security Transactions and Investment Income: Security transactions are recorded
on the trade date. Realized and unrealized gains and losses from security and
currency transactions are calculated on the identified cost basis. Interest
income which is comprised of three elements: stated coupon, original issue
discount and market discount, is recorded on the accrual basis.
Dividends and Distributions: Dividends are declared quarterly. Distributions of
long-term capital gains, if any, will be declared annually. Dividends and
distributions are recorded on the ex-dividend dates.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for foreign currencies and loss deferrals.
Reclassification of Capital Accounts: Effective January 1, 1993, the Fund began
accounting and reporting for distributions to shareholders in accordance with
Statement of Position 93-2: Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distributions by
Investment Companies. As a result of this statement, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. The effect caused by adopting this
statement was to decrease paid-in capital by $28,432,738, and decrease
accumulated net realized losses on investment transactions by $28,432,738
compared to amounts previously reported through December 31, 1992. For the year
ended December 31, 1993, the Fund reclassified $14,673,097 of net foreign
currency losses to undistributed net investment income from accumulated net
realized gains on investment transactions. In addition, the Fund increased
paid-in capital by $23,847 and undistributed net investment income by $14,796
and decreased accumulated net realized gains on investments by $38,643. Net
investment income, net realized gains and net assets were not affected by this
change.
Taxes: It is the Fund's policy to continue to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income or excise tax provision is required.
Withholding taxes on foreign interest have been provided for in accordance
with the Fund's understanding of the applicable country's tax rates.
Note 2. Agreements The Fund has a management
agreement with Prudential Mutual Fund Management,
Inc. (``PMF''). Pursuant to this agreement PMF has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PMF has entered into a subadvisory agreement with The Prudential
Investment Corporation (``PIC''); PIC furnishes investment advisory services in
connection with the management of the Fund. PMF pays for the cost of the
subadviser's services, the compensation of officers of the Fund, occupancy and
certain clerical and bookkeeping costs of the Fund. The Fund bears all other
costs and expenses.
The management fee paid PMF is computed weekly and payable monthly, at the
annual rate of 0.75% of the Fund's average weekly net assets up to US $1 billion
and 0.70% of average weekly net assets in excess of US $1 billion.
PMF and PIC are indirect wholly-owned subsidiaries of The Prudential
Insurance Company of America (``Prudential'').
Note 3. Portfolio Purchases and sales of invest-
Securities ment securities, other than
short-term investments and options written, for
the year ended December 31, 1993 aggregated $1,454,638,091 and $1,460,414,468,
respectively.
At December 31, 1993, the Fund had outstanding forward currency contracts,
both to purchase and sell foreign currencies, as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Purchase Contracts Payable Value (Depreciation)
- ------------------- --------------- ------------ --------------
<S> <C> <C> <C>
Australian Dollars,
expiring 1/4/94-
2/7/94........... $ 133,675,662 $135,291,570 $ 1,615,908
Belgian Francs,
expiring
1/31/94.......... 9,700,000 9,537,600 (162,400)
British Pounds,
expiring 1/20/94-
2/8/94........... 38,599,251 38,162,901 (436,350)
Canadian Dollars,
expiring
2/15/94.......... 14,672,213 14,904,362 232,149
French Francs,
expiring 1/5/94-
2/15/94.......... 18,999,743 18,813,590 (186,153)
German
Deutschemarks,
expiring 1/4/94-
2/15/94.......... 257,228,574 252,936,817 (4,291,757)
</TABLE>
-9-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Purchase Contracts Payable Value (Depreciation)
- ------------------- --------------- ------------ --------------
<S> <C> <C> <C>
Italian Lira,
expiring 1/8/94-
1/25/94.......... $ 28,369,000 $ 27,002,495 $ (1,366,505)
Japanese Yen,
expiring 1/26/94-
2/14/94.......... 109,066,548 105,742,469 (3,324,079)
New Zealand
Dollars,
expiring
2/8/94........... 19,908,710 20,035,473 126,763
Swiss Francs,
expiring
1/18/94.......... 39,515,568 39,685,736 170,168
--------------- ------------ --------------
$ 669,735,269 $662,113,013 $ (7,622,256)
--------------- ------------ --------------
--------------- ------------ --------------
</TABLE>
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- ------------------- --------------- ------------ --------------
<S> <C> <C> <C>
Australian Dollars,
expiring 1/4/94-
1/31/94.......... $ 121,156,753 $122,967,674 $ (1,810,921)
British Pounds,
expiring
1/20/94.......... 10,115,630 10,086,589 29,041
Canadian Dollars,
expiring 1/6/94-
2/15/94.......... 22,822,719 22,978,723 (156,004)
Danish Kroner,
expiring
1/24/94.......... 10,993,695 10,857,643 136,052
French Francs,
expiring
2/15/94.......... 19,487,351 19,234,682 252,669
German
Deutschemarks,
expiring 1/4/94-
2/15/94.......... 397,329,948 390,464,382 6,865,566
Irish Pounds,
expiring
2/15/94.......... 17,312,378 17,202,161 110,217
Italian Lira,
expiring 1/18/94-
2/15/94.......... 26,141,743 25,848,145 293,598
Japanese Yen,
expiring 1/26/94-
2/8/94........... 109,110,652 106,773,875 2,336,777
Netherland Guilder
expiring 1/5/95-
2/15/94.......... 52,505,098 51,528,929 976,169
New Zealand
Dollars,
expiring
2/8/94........... 19,897,295 19,899,902 (2,607)
Spanish Pesetas,
expiring
2/15/94.......... 13,615,677 13,316,968 298,709
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciation)
- ------------------- --------------- ------------ --------------
<S> <C> <C> <C>
Swedish Krona,
expiring
1/10/94.......... $ 22,659,592 $ 22,652,775 $ 6,817
Swiss Francs,
expiring
1/18/94.......... 37,417,888 37,815,341 (397,453)
--------------- ------------ --------------
$ 880,566,419 $871,627,789 $ 8,938,630
--------------- ------------ --------------
--------------- ------------ --------------
</TABLE>
Transactions in options written for the year ended December 31, 1993 were as
follows:
<TABLE>
<CAPTION>
Number
of
Contracts Premiums
(000) Received
--------- ------------
<S> <C> <C>
Options written................. 1,356,649 $ 3,494,509
Options terminated in closing
purchase transactions......... (134,082) (683,427 )
Options expired................. (677,426) (1,357,152 )
Options exercised............... (427,129) (788,715 )
--------- ------------
Options outstanding at December
31, 1993...................... 118,012 $ 665,215
--------- ------------
--------- ------------
</TABLE>
At December 31, 1993 the Fund bought 40 financial futures contracts on the
Treasury Bond Index expiring in March, 1994. The value at disposition of such
contracts was $4,520,000. The value of such contracts on December 31, 1993 was
$4,511,250, thereby resulting in an unrealized loss of $8,750.
The federal income tax basis of the Fund's investments at December 31, 1993
was $351,519,046 and, accordingly, net unrealized appreciation for United States
federal income tax purposes was $273,092 (gross unrealized appreciation--
$5,095,234; gross unrealized depreciation--$4,822,142).
Note 4. Capital There are 200 million shares
of $.01 par value common stock authorized. Of the
45,642,508 shares outstanding at December 31, 1993, Prudential owned 11,000
shares.
-10-
<PAGE>
<PAGE>
Note 5. Quarterly Data
(Unaudited)
<TABLE>
<CAPTION>
Net realized and
unrealized
gains (losses) on Net increase (decrease)
investments in net assets
Quarterly Net Investment and foreign resulting from
period Total income currencies operations
ended income Amount Per share Amount Per share Amount Per share
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------- ---------- ------------------------ -------------------------- --------------------------
March 31, 1992 $8,721,610 $7,530,009 $0.16 $(15,275,625) $ (0.33) $ (7,745,616) $ (0.17)
June 30, 1992 8,641,563 7,707,659 0.17 8,166,616 0.18 15,874,275 0.35
Sept. 30, 1992 9,467,544 8,430,220 0.19 (27,683,080) (0.61) (19,252,860) (0.42)
Dec. 31, 1992 7,780,717 6,774,628 0.15 2,926,792 0.06 9,701,420 0.21
March 31, 1993 7,647,932 6,639,056 0.15 14,834,350 0.33 21,473,406 0.48
June 30, 1993 7,413,933 6,508,833 0.14 11,850,346 0.26 18,359,179 0.40
Sept. 30, 1993 7,289,441 6,284,989 0.14 1,423,613 0.03 7,708,602 0.17
Dec. 31, 1993 6,588,904 5,623,953 0.12 5,493,009 0.12 11,116,962 0.24
<CAPTION>
Dividends
Quarterly and Share
period distributions price
ended Amount Per share High Low
<S> <C> <C> <C> <C>
- --------------- ------------------------- ------------
March 31, 1992 $ 7,987,439 $ 0.175 $73/4 $7 1/2
June 30, 1992 7,987,439 0.175 77/8 7 3/8
Sept. 30, 1992 7,987,439 0.175 81/8 7 3/8
Dec. 31, 1992 15,746,665 0.345 75/8 6 7/8
March 31, 1993 7,302,526 0.16 73/4 7
June 30, 1993 7,302,526 0.16 73/4 7 1/8
Sept. 30, 1993 7,302,526 0.16 77/8 7 3/8
Dec. 31, 1993 15,747,378 0.345 73/4 7
</TABLE>
-11-
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
THE GLOBAL GOVERNMENT PLUS FUND, INC.
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
---------- ------------ ------------ ------------ ------------
Net asset value, beginning of year....................... $ 7.38 $ 8.28 $ 8.25 $ 8.25 $ 8.95
---------- ------------ ------------ ------------ ------------
Net investment income.................................... .55 .67 .66 .59 .59
Net realized and unrealized gain (loss) on investments
and foreign currencies................................. .74 (.70) .09 .06 (.19)
---------- ------------ ------------ ------------ ------------
Total from investment operations....................... 1.29 (.03) .75 .65 .40
---------- ------------ ------------ ------------ ------------
Dividends from net investment income..................... (.23) (.67) (.66) (.59) (.59)
Distributions from net capital gains..................... (.54) (.20) -- -- --
Distributions in excess of net capital gains............. (.06) -- -- -- --
Distributions from paid-in capital in excess of par...... -- -- (.06) (.21) (.51)
---------- ------------ ------------ ------------ ------------
Total dividends and distributions...................... (.83) (.87) (.72) (.80) (1.10)
---------- ------------ ------------ ------------ ------------
Increase resulting from Fund share transactions.......... -- -- -- .15 --
---------- ------------ ------------ ------------ ------------
Net asset value, end of year............................. $ 7.84 $ 7.38 $ 8.28 $ 8.25 $ 8.25
---------- ------------ ------------ ------------ ------------
Per share market price, end of year...................... $ 7.00 $ 7.00 $ 7.75 $ 7.25 $ 7.50
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
TOTAL INVESTMENT RETURN+................................. 11.57% 1.25% 17.44% 8.04% (5.89)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)............................ $ 357,783 $336,780 $377,911 $376,722 $434,245
Average net assets (000)................................. $ 361,374 $364,037 $364,072 $382,943 $440,037
Ratio of expenses to average net assets.................. 1.07% 1.15% 1.29% 1.47% 1.59%
Ratio of net investment income to average net assets..... 6.93% 8.36% 8.30% 7.40% 7.00%
Portfolio turnover rate.................................. 441% 346% 267% 503% 477%
<FN>
- ---------------
+ Total investment return is calculated assuming a purchase of common stock at the current market value on
the first day and a sale at the current market value on the last day of each year reported. Dividends and
distributions are assumed for purposes of this calculation to be reinvested at prices obtained under the
dividend reinvestment plan. This calculation does not reflect brokerage commissions.
Contained above is selected data for a share of common stock outstanding, total investment return, ratios
to average net assets and other supplemental data for the years indicated. This information has been
determined based upon information provided in the financial statements and market price data for the
Fund's shares.
</TABLE>
See Notes to Financial Statements.
-12-
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
The Global Government Plus Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of The Global
Government Plus Fund, Inc. (the ``Fund'') at December 31, 1993, 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 five years in the period then ended, in conformity with
generally accepted accounting principles. 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 generally accepted
auditing standards which 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, 1993
by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE
1177 Avenue of the Americas
New York, New York
February 17, 1994
-13-
<PAGE>
<PAGE>
OTHER INFORMATION
Dividend Reinvestment Plan. Shareholders may elect to have all
distributions of dividends and capital gains automatically reinvested in Fund
shares (Shares) pursuant to the Fund's Dividend Reinvestment Plan (the Plan).
Shareholders who do not participate in the Plan will receive all distributions
in cash paid by check in United States dollars mailed directly to the
shareholders of record (or if the shares are held in street or other nominee
name, then to the nominee) by the custodian, as dividend disbursing agent.
Shareholders who wish to participate in the Plan should contact the Fund
at (800) 451-6788.
State Street Bank & Trust Co. (the Plan Agent) serves as agent for the
shareholders in administering the Plan. After the Fund declares a dividend
or determines to make a capital gains distribution, if (1) the market price
is lower than net asset value, the participants in the Plan will receive
the equivalent in Shares valued at the market price determined as of the time
of purchase (generally, following the payment date of the dividend or
distribution); or if (2) the market price of Shares on the payment date of
the dividend or distribution is equal to or exceeds their net asset value,
participants will be issued Shares at the higher of net asset value or 95%
of the market price. If net asset value exceeds the market price of Shares on
the payment date or the Fund declares a dividend or other distribution
payable only in cash, the Plan Agent will, as agent for the participants,
receive the cash payment and use it to buy Shares in the open market. If,
before the Plan Agent has completed its purchases, the market price exceeds
the net asset value per Share, the average per share purchase price paid by
the Plan Agent may exceed the net asset value per share, resulting in the
acquisition of fewer shares than if the dividend or distribution had been
paid in shares issued by the Fund. The Fund will not issue Shares under the
Plan below net asset value.
There is no charge to participants for reinvesting dividends or capital
gain distributions, except for certain brokerage commissions, as described
below. The Plan Agent's fees for the handling of the reinvestment of dividends
and distributions will be paid by the Fund. There will be no brokerage
commissions charged with respect to shares issued directly 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 and distributions. The automatic
reinvestment of dividends and distributions will not relieve participants of
any federal income tax that may be payable on such dividends or distributions.
The Fund reserves the right to amend or terminate the Plan upon 90 days'
written notice to shareholders of the Fund.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Shares and cash for
fractional Shares.
All correspondence concerning the Plan should be directed to the Plan Agent,
State Street Bank & Trust Company, P.O. Box 8200, Boston, MA 02266-8200.
-14-
<PAGE>
<PAGE>
TAX INFORMATION
We are required by the Internal Revenue Code to advise you within 60 days of
the Fund's fiscal year end (December 31, 1993) as to the federal tax status of
dividends and distributions paid by the Fund.
During its year ended December 31, 1993, the Fund paid dividends and
distributions of $0.825 per share. Of this amount, $0.085 per share represents a
distribution from long-term capital gains and is taxable as such. The remaining
$0.74 per share represents dividends from ordinary income (net investment income
and short term capital gains). We wish to advise you that the corporate
dividends received deduction for the Fund is zero. Only funds that invest in
U.S. equity securities are entitled to pass-through a corporate dividends
received deduction.
For the purpose of preparing your annual federal income tax return, however,
you should report the amounts as reflected on the appropriate Form 1099-DIV or
substitute Form 1099-DIV.
We are required by Massachusetts and Oregon to inform you that dividends
which have been derived from interest on federal obligations are not taxable to
shareholders. Please be advised that 75.94% of the dividends paid by the Fund
qualify for each of these states' tax exclusion.
-15-
<PAGE>
<PAGE>
Directors
Edward D. Beach
Harry A. Jacobs, Jr.
Donald D. Lennox
Douglas H. McCorkindale
Lawrence C. McQuade
Thomas T. Mooney
Richard A. Redeker
Louis A. Weil, III
Officers
Lawrence C. McQuade, President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Custodian and Transfer Agent
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Independent Accountants
Price Waterhouse
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Dechert Price & Rhoads
1500 K Street., NW
Washington, D.C. 20005
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.
This report is for stockholder information. This is not a
prospectus intended for use in the purchase or sale of Fund
shares.
The Global Government Plus Fund, Inc.
One Seaport Plaza
New York, NY 10292
for information call toll free
(800) 451-6788
or for information regarding
net asset value
(212) 214-3332
378907109
