<PAGE> 1
SALOMON BROTHERS
2008 WORLDWIDE DOLLAR
GOVERNMENT TERM TRUST INC
ANNUAL REPORT
JULY 31, 1995
----------------------------------
SALOMON BROTHERS ASSET MANAGEMENT
-------------------------------
<PAGE> 2
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
September 22, 1995
Dear Shareholder:
Net asset value for the Salomon Brothers 2008 Worldwide Dollar Government Term
Trust Inc (the "Trust") rose to $7.57 per share as of July 31, 1995. Dividends
of $0.073 per share were paid during each month of the quarter ended July 31,
1995. The investment return for the quarter, assuming reinvestment of dividends
in additional shares of the Trust, was 9.91% compared with an increase of 11.09%
in the Salomon Brothers Brady Bond Index, an increase of 4.00% for the Salomon
Brothers Mortgage Index and a 5.10% gain for Lipper's closed-end term trust
category.
Emerging markets sovereign debt securities accounted for 53% of the Trust's
total assets on July 31. The largest holdings in the emerging markets debt
portion of the portfolio were in the government securities of Brazil (11% of
total assets), Argentina (10%), Venezuela (7%), Poland (7%) and Ecuador (6%).
The balance of the portfolio was held in mortgage-backed securities (38% of
total assets) and municipal zero coupon bonds (4%).
EMERGING MARKETS
The quarter began on a strong note, with the Brady Bond Index up 8.22% in May.
Non-Latin Brady bonds continued to register strong gains in June; Latin American
bonds were not as strong because of the decision by Brazil's central bank to
impose a new currency band on the real. Overall, the Brady Bond Index climbed by
2.25% in June, followed by a gain of 0.39% in July. The market has advanced by
another 3.0% since the close of the quarter.
COUNTRY ANALYSIS
Brazil's Senate has given final approval to four out of five constitutional
reform measures needed to address key economic problems. In July, Standard &
Poor's raised its rating of Brazil's currency to single B-plus from single B.
The upgrade was based on the success of a change in the exchange rate band,
political support for President Cardoso's administration and the country's
progress with constitutional reforms.
In Argentina, President Carlos Menem was sworn in for a second term. Menem has
promised to maintain the economic policies that have been successful in
promoting growth. The central bank also implemented new measures, including
lower reserve requirements, that are intended to improve bank liquidity.
Several developments in Venezuela have improved the country's short-term
outlook. Macroeconomic stabilization measures have been announced. Trading in
Brady bonds has resumed on the Caracas stock exchange. There has been some
discussion about allowing the use of Brady debt instruments in the country's
privatization program. Finally, the Congress has approved private sector
participation in the oil sector. Over the long term, the country's fortunes
remain closely tied to global oil markets. In the latest quarter, we pared our
holdings of Venezuelan bonds to 7% of total assets from 9%.
Polish bonds have led the market for much of the year. Investors are hoping that
Moody's will assign these bonds an investment grade rating, making them the
first Brady bonds to be so rated.
<PAGE> 3
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
In Ecuador, the threat of an oil workers' strike diminished when the Congress
agreed to reinstate a law permitting the unionization of public-sector
employees. The news buoyed Ecuadorian Brady bond prices late in the quarter.
U.S. MORTGAGE-BACKED BONDS
U.S. mortgage-backed bonds performed well during the quarter ended July 31 as
U.S. interest rates declined sharply. For the quarter, the mortgage market as
measured by Salomon Brothers Mortgage Index returned 3.99%. Within the mortgage
market, discount mortgage pass-throughs, such as FNMA 6.5%s, led the way with
returns close to 5%. This proved beneficial as the majority of the Trust's
mortgage holdings during the quarter were discount pass-throughs.
We appreciate your continued interest in the Trust. A recorded periodic update
of developments affecting emerging markets debt securities is available by
calling (800) 725-6666.
Sincerely,
/s/ MICHAEL S. HYLAND
----------------------
MICHAEL S. HYLAND
Chairman and President
<PAGE> 4
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
July 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) LONG-TERM INVESTMENTS -- 146.2% VALUE
------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SOVEREIGN BONDS -- 81.5%
Republic of Argentina,
$28,000 Discount Bond, 6.875%*, 3/31/23............................................. $ 16,065,000
54,500 Par Bond, 5.00%*, 3/31/23................................................... 25,376,562
Federal Republic of Brazil,
9,500 Discount Bond, Series ZL, 7.25%*, 4/15/24................................... 5,397,187
5,000 Investment (Exit) Bond, 6.00%, 9/15/13...................................... 2,425,000
713 IDU Bond, 6.6875%*, 1/1/01.................................................. 577,570
20,000 NMB, 7.3125%*, 4/15/09...................................................... 10,700,000
1,353 Capitalization Bond, 8.00%**, 4/15/14....................................... 657,663
55,000 Par Bond, 4.25%*, 4/15/24................................................... 24,096,875
Republic of Bulgaria,
24,000 Discount Bond, Series A, 6.75%*, 7/28/24.................................... 11,565,000
Costa Rica,
9,000 Principal Bond, Series B, 6.25%, 5/21/15.................................... 3,960,000
Republic of Ecuador,
34,000 Discount Bond, 7.25%*, 2/28/25.............................................. 17,297,500
23,750 Par Bond, 3.00%*, 2/28/25................................................... 7,540,625
Mexico,
4,000 Par Bond, Series A, 6.25%, 12/31/19......................................... 2,406,260
(including 4,000,000 warrants expiring 6/30/03)
23,000 Par Bond, Series B, 6.25%, 12/31/19......................................... 13,835,995
(including 23,000,000 warrants expiring 6/30/03)
Republic of The Philippines,
17,500 Par Bond, Series B, 5.75%*, 12/1/17......................................... 12,687,500
Republic of Poland,
25,500 PDI Bond, 3.25%*, 10/27/14.................................................. 14,901,562
27,000 RSTA Par Bond, 2.75%*, 10/27/24............................................. 11,812,500
Uruguay,
3,000 Par Bond, Series A, 6.75%, 2/19/21.......................................... 1,920,000
(including 3,000,000 warrants expiring 2/19/21)
Republic of Venezuela,
8,000 FLIRB, Series A, 7.3125%*, 3/31/07.......................................... 4,000,000
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
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SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
July 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) LONG-TERM INVESTMENTS (CONTINUED) VALUE
------------------------------------------------------------------------------------------------------------
<C> <S> <C>
$25,000 Discount Bond, Series A, 7.1875%*, 3/31/20.................................. $ 12,875,000
(including 178,500 warrants expiring 3/31/20)
20,000 Par Bond, Series A, 6.75%, 3/31/20.......................................... 10,037,500
(including 100,000 warrants expiring 3/31/20)
5,500 Par Bond, Series B, 6.75%, 3/31/20.......................................... 2,760,314
(including 27,500 warrants expiring 3/31/20) ------------
TOTAL SOVEREIGN BONDS
(cost $238,652,005)........................................................... 212,895,613
------------
MORTGAGE-BACKED SECURITIES -- 58.0%
Federal Home Loan Mortgage Corp.,
29,000# Gold, 6.50%, 30 Year (TBA).................................................. 27,676,875
17,443 Series 1576, Class PK, 6.00%, 9/15/02 (PAC I/O)............................. 1,133,198
28,201 Series 1599, Class D, 6.50%, 6/15/19 (PAC I/O).............................. 4,018,697
31,749 Series 1609, Class J, 6.50%, 11/15/13 (PAC I/O)............................. 2,935,919
11,698 Series 1610, Class PH, 6.50%, 3/15/19 (PAC I/O)............................. 1,528,009
21,998 Series 1617, Class PF, 6.50%, 6/15/18 (PAC I/O)............................. 2,577,856
15,566 Series 1679, Class WA, 6.00%, 2/15/03 (PAC I/O)............................. 1,206,398
Federal National Mortgage Assoc.,
72,000# 6.50%, 30 Year (TBA)........................................................ 68,670,000
20,000# 7.50%, 30 Year (TBA)........................................................ 19,962,500
10,000# 8.00%, 30 Year (TBA)........................................................ 10,162,500
18,595 Trust 1993-169, Class QA, 6.50%, 8/25/12, (REMIC) (PAC I/O)................. 1,441,113
23,991 Trust 1993-183, Class EA, 6.50%, 3/25/17, (REMIC) (PAC I/O)................. 2,848,543
18,571 Trust 1993-183, Class EC, 6.50%, 3/25/13, (REMIC) (PAC I/O)................. 1,576,599
14,421 Trust 1993-189, Class PH, 6.50%, 2/25/19, (REMIC) (PAC I/O)................. 1,799,209
42,166 Trust 1993-202, Class Q, 6.50%, 11/25/13, (REMIC) (PAC I/O)................. 3,762,800
5,722 Trust 1993-209, Class PA, 6.00%, 11/25/99, (REMIC) (PAC I/O)................ 187,739
------------
TOTAL MORTGAGE-BACKED SECURITIES
(cost $155,190,955)........................................................... 151,487,955
------------
ZERO-COUPON MUNICIPAL BONDS -- 6.7%
Austin, Texas Utility System Revenue,
11,200 Ser. A, 11/15/08............................................................ 5,259,296
</TABLE>
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See accompanying notes to financial statements.
PAGE 2
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SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
July 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) LONG-TERM INVESTMENTS (CONTINUED) VALUE
------------------------------------------------------------------------------------------------------------
<C> <S> <C>
Edinburg, Texas Cons. Independent School District,
$ 1,845 2/15/08..................................................................... $ 904,124
2,705 2/15/09..................................................................... 1,232,641
Harris County, Texas,
5,470 8/15/08..................................................................... 2,605,361
Texas St. Public Finance Auth. Bldg. Rev.,
10,535 2/1/08...................................................................... 5,174,055
Westmoreland County, Pennsylvania,
2,665 Series G, 6/1/08............................................................ 1,284,263
2,515 Series G, 12/1/08........................................................... 1,178,001
------------
TOTAL ZERO-COUPON MUNICIPAL BONDS
(cost $18,492,941)............................................................ 17,637,741
------------
TOTAL LONG-TERM INVESTMENTS
(cost $412,335,901)........................................................... 382,021,309
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 3
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SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (concluded)
July 31, 1995
<TABLE>
<CAPTION>
<C> <S> <C>
PRINCIPAL
AMOUNT
(000) SHORT-TERM INVESTMENTS -- 0.4% VALUE
------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Merrill Lynch & Co., Inc., 5.77%, dated 7/31/95, due 8/1/95, in the amount
of $1,053,169 (collateralized by $1,335,000 U.S. Treasury Strip, due
2/15/99, value -- $1,076,344)
$ 1,053 (cost $1,053,000)........................................................... $ 1,053,000
------------
TOTAL INVESTMENTS -- 146.6%
(cost $413,388,901)......................................................... 383,074,309
LIABILITIES IN EXCESS OF OTHER ASSETS -- (46.6%)............................ (121,811,792)
------------
NET ASSETS -- 100%.......................................................... $261,262,517
------------
</TABLE>
- --------------------------------------------------------------------------------
* Rate shown reflects current rate on instrument with variable rate or step
coupon rates.
** Payment-in-kind security for which part of the interest earned is capitalized
as additional principal.
# Mortgage dollar roll. See Note 4.
<TABLE>
<S> <C> <C>
FLIRB -- Front Loaded Interest Reduction Bond.
IDU -- Interest Due and Unpaid.
NMB -- New Money Bond.
PAC I/O -- Planned Amortization Class -- Interest Only.
PDI -- Past Due Interest.
REMIC -- Real Estate Mortgage Investment Conduit.
RSTA -- Restructured Trade Agreement.
TBA -- To Be Announced Security.
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 4
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SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $413,388,901)..................................................... $383,074,309
Cash.......................................................................................... 581
Receivable for investments sold............................................................... 7,626,278
Interest receivable........................................................................... 7,551,915
Deferred organization expenses and other assets............................................... 87,742
------------
Total assets.......................................................................... 398,340,825
------------
LIABILITIES
Payable for investments purchased............................................................. 136,773,278
Advisory fee payable.......................................................................... 129,584
Administration fee payable.................................................................... 39,932
Accrued expenses.............................................................................. 135,514
------------
Total liabilities..................................................................... 137,078,308
------------
NET ASSETS.................................................................................... $261,262,517
------------
Net assets were comprised of:
Common Stock, at par value $.001 (200 million shares authorized; 34,510,639
outstanding)............................................................................. $ 34,511
Paid-in capital in excess of par.......................................................... 323,550,779
------------
323,585,290
Undistributed net investment income....................................................... 991,757
Accumulated net realized loss on investments.............................................. (32,999,938)
Net unrealized depreciation on investments................................................ (30,314,592)
------------
Net assets, July 31, 1995............................................................. $261,262,517
------------
Net asset value per share:
($261,262,517 / 34,510,639 shares of common stock issued and outstanding)................. $ 7.57
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 5
<PAGE> 9
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended July 31, 1995
<TABLE>
<S> <C> <C>
NET INVESTMENT INCOME
INCOME
Interest and discount earned............................................... $ 33,110,245
EXPENSES
Investment advisory fees................................................... 1,512,853
Administration fees........................................................ 377,324
Custodian's fees and expenses.............................................. 207,000
Reports to shareholders.................................................... 130,000
Annual shareholder meeting expense......................................... 70,000
Legal fees and expenses.................................................... 56,000
Audit fees and expenses.................................................... 45,000
Transfer agent's fees and expenses......................................... 36,000
Listing fees............................................................... 32,400
Amortization of deferred organization expenses............................. 25,000
Directors' fees............................................................ 19,000
Insurance.................................................................. 10,452
Miscellaneous.............................................................. 7,500
---------
Total expenses......................................................... 2,528,529
------------
Net investment income.......................................................... 30,581,716
------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net realized loss on investment transactions....................................... (32,112,770)
Net change in unrealized depreciation on investments............................... 25,586,089
------------
Net loss on investments............................................................ (6,526,681)
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS......................................... $ 24,055,035
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 6
<PAGE> 10
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
For the Year Ended July 31, 1995
<TABLE>
<S> <C>
INCREASE (DECREASE) IN CASH
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Purchases of long-term portfolio investments............................................. $(198,362,005)
Proceeds from disposition of long-term portfolio investments and principal paydowns...... 191,705,694
Net sales of short-term portfolio investments............................................ 4,246,000
-------------
(2,410,311)
Net investment income.................................................................... 30,581,716
Amortization of net premium/discount on investments...................................... 9,057,903
Amortization of organization expenses.................................................... 25,000
Net change in receivables/payables related to operations................................. (1,621,008)
-------------
Net cash flows provided by operating activities...................................... 35,633,300
-------------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Net decrease from dollar roll transactions............................................... (5,401,958)
Cash dividends paid...................................................................... (30,231,321)
-------------
Net cash flows used for financing activities......................................... (35,633,279)
-------------
Net increase in cash......................................................................... 21
Cash at beginning of period.................................................................. 560
-------------
CASH AT END OF PERIOD........................................................................ $ 581
-------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 7
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SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AUGUST 27,
1993*
FOR THE YEAR THROUGH
ENDED JULY JULY 31,
31, 1995 1994
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income...................................................... $ 30,581,716 $ 26,467,897
Net realized loss on investment transactions............................... (32,112,770) (830,724)
Net change in unrealized depreciation on investments....................... 25,586,089 (55,900,681)
------------ ------------
Net increase (decrease) in net assets from operations...................... 24,055,035 (30,263,508)
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income....................................... (30,231,321) (25,826,535)
Distributions from capital gains........................................... -- (56,444)
------------ ------------
Total dividends and distributions.......................................... (30,231,321) (25,882,979)
CAPITAL SHARE TRANSACTIONS
Net proceeds from initial public offering of shares........................ -- 281,185,283
Net proceeds from underwriters' over-allotment option...................... -- 42,300,000
------------ ------------
Net increase in net assets from capital share transactions................. -- 323,485,283
Total increase (decrease).................................................. (6,176,286) 267,338,796
------------ ------------
NET ASSETS
Beginning of period........................................................ 267,438,803 100,007
------------ ------------
End of period (includes undistributed net investment income of $991,757 and
$641,362, respectively).................................................. $261,262,517 $267,438,803
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
* Commencement of investment operations.
See accompanying notes to financial statements.
PAGE 8
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SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
The Salomon Brothers 2008 Worldwide Dollar Government Term Trust, Inc (the
"Trust") was organized in Maryland on May 24, 1993 and is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, closed-end
management investment company. The Trust commenced operations on August 27,
1993. The investment objective of the Trust is to manage a portfolio of fixed
income securities that will return $10 per share to investors on or about
November 30, 2008 while providing high monthly income. No assurance can be given
that the Trust's investment objective will be achieved.
The Trust will seek to achieve its investment objective by investing
substantially all (at least 90%) of its assets, under normal conditions, in
securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities, securities issued or guaranteed by foreign governments
(sovereign bonds) and collateralized in full as to principal due at their
maturity by U.S. government securities, and zero coupon obligations of municipal
issuers. The market prices of the securities in which the Trust invests are
expected to fluctuate with changes in interest rates and the perceived credit
quality of such assets. The Trust's investments in sovereign bonds may be
affected by political, social, economic or diplomatic changes in such countries
and the Trust's investment in such securities increases the risk that the Trust
will return less than $10 per share in the year 2008.
NOTE 1. ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Trust.
SECURITIES VALUATION. In valuing the Trust's assets, all securities for which
market quotations are readily available are valued (except as described below)
(i) at the last sales price prior to the time of determination if there were a
sale on the date of determination or (ii) at the bid price if there were no sale
on such date. Publicly traded sovereign bonds are typically traded
internationally on the over-the-counter market and are valued at the mean
between the last current bid and asked price as of the close of business of that
market. However, where the spread between bid and asked price exceeds five
percent of the par value of the security, the security is valued at the bid
price. The Trust values mortgage-backed and asset-backed securities and other
debt securities on the basis of current market quotations provided by dealers or
independent pricing services which use prices provided by market-makers or
estimates of market values obtained from yield data relating to instruments or
securities with similar characteristics.
Short-term investments having a maturity of 60 days or less are valued at
amortized cost, which approximates market value. Securities for which reliable
quotations are not readily available are valued at fair value as determined in
good faith by, or under procedures established by, the Board of Directors.
PAGE 9
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SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
In connection with transactions in repurchase agreements, it is the Trust's
policy that the Trust's custodian takes possession of the underlying collateral
securities, the value of which at least equals the principal amount of the
repurchase transaction, including accrued interest. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. 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 Trust may be delayed or limited.
CASH FLOW INFORMATION. The Trust invests in securities and distributes net
investment income and net realized gains which are paid in cash and may be
reinvested at the discretion of shareholders. These activities are reported in
the Statement of Changes in Net Assets and additional information on cash
receipts and cash payments is presented in the Statement of Cash Flows.
Accounting practices that do not affect reporting activities on a cash basis
include carrying investments at value and amortizing discounts or premiums on
debt obligations.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded on the trade date. Realized gains and losses are calculated on the
identified cost basis. Interest income is recorded on the accrual basis and the
Trust accretes discount or amortizes premium on securities purchased using the
effective interest method.
TAXES. It is the Trust's policy to continue to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute sufficient taxable income to shareholders. Therefore, no federal
income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS. The Trust declares and pays dividends and
distributions monthly first from net investment income, then from realized
short-term capital gains and other sources, if necessary. The Trust currently
intends to retain, until the final liquidating distribution, income in an amount
approximately equal to the tax-exempt income accrued on the zero coupon
obligations of municipal issuers in which it invests but in no event greater
than 10% of the Trust's net investment income per year. Net long-term capital
gains, if any, in excess of loss carryforwards will be distributed annually.
Dividends and distributions are recorded on the ex-dividend date.
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 due primarily to deferral of wash sale and
post-October losses.
DEFERRED ORGANIZATION EXPENSES. A total of $125,000 was incurred in connection
with the organization of the Trust. These costs have been deferred and are being
amortized on a straight-line basis over a period of sixty months from the date
the Trust commenced investment operations.
PAGE 10
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SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 2. AGREEMENTS
The Trust has an Investment Advisory Agreement with Salomon Brothers Asset
Management Inc (the "Adviser"), an indirect wholly-owned subsidiary of Salomon
Inc, pursuant to which the Adviser acts as the Trust's investment adviser and is
responsible for the management of the Trust's portfolio in accordance with the
Trust's investment objective and policies for making decisions to buy, sell, or
hold particular securities. The Trust also has an Administration Agreement with
Prudential Mutual Fund Management, Inc. (the "Administrator"), pursuant to which
the Administrator will perform administrative services necessary for the
operation of the Trust.
The Trust pays the Adviser a monthly fee for its advisory services at an annual
rate of .60% of the value of the Trust's average weekly net assets. The Trust
pays the Administrator a monthly fee for its administration services at an
annual rate of .15% of the value of the Trust's average weekly net assets up to
$250 million and .125% of the value of such net assets in excess of $250
million.
Effective September 1, 1995, the Administration Agreement has been amended to
provide for the appointment of the Adviser as Administrator and Prudential
Mutual Fund Management, Inc. as Sub-administrator (the "Sub-administrator"). The
Trust will pay the Administrator a monthly fee at an annual rate of .15% of the
value of the Trust's average weekly net assets up to $250 million and .125% of
the value of such net assets in excess of $250 million for its services, out of
which the Administrator will pay the Sub-administrator eighty percent of such
fees collected for its services.
At July 31, 1995, the Adviser owned 10,639 of the Trust shares outstanding.
The Trust pays each Director not affiliated with the Adviser a fee of $5,000 per
year, plus a fee of $700 and reimbursement for travel and out-of-pocket expenses
for each board and committee meeting attended.
NOTE 3. PORTFOLIO SECURITIES
Purchases and sales of investment securities, other than short-term investments
and dollar rolls, for the year ended July 31, 1995 aggregated $198,362,005 and
$191,705,694, respectively.
The federal income tax basis of the Trust's investments at July 31, 1995 was
$416,419,954 and, accordingly, net unrealized depreciation for federal income
tax purposes was $33,345,645 (gross unrealized appreciation -- $11,695,962;
gross unrealized depreciation -- $45,041,607).
Pursuant to federal income tax regulations, the Trust elected to treat capital
losses of $28,961,332, incurred in the period November 1, 1994 through July 31,
1995, as having occurred on August 1, 1995. In addition, the Trust has a capital
loss carryforward as of July 31,
PAGE 11
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SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
1995 of $1,007,552 which expires in 2003. To the extent future capital gains are
offset by such capital losses, the Trust does not anticipate distributing such
gains to shareholders.
NOTE 4. BORROWINGS
DOLLAR ROLLS. The Trust enters into dollar rolls in which the Trust sells
mortgage-backed securities for delivery in the current month and simultaneously
contracts to repurchase substantially similar (same type, coupon and maturity)
securities on a specified future date. During the roll period the Trust forgoes
principal and interest paid on the securities. The Trust is compensated by a fee
paid by the counterparty. Dollar rolls are accounted for as a financing
arrangement; the fee is accrued into interest income ratably over the term of
the dollar roll and any gain or loss on the roll is deferred until disposition
of the rolled security. The average monthly balance of dollar rolls outstanding
during the year ended July 31, 1995 was approximately $123,931,169.
NOTE 5. DIVIDENDS
Subsequent to July 31, 1995, the Board of Directors of the Trust declared
dividends of $.073 per common share payable August 31, 1995 and September 29,
1995 to shareholders of record on August 11, 1995 and September 11, 1995,
respectively.
NOTE 6. QUARTERLY DATA (UNAUDITED)
<TABLE>
<CAPTION>
NET INVESTMENT INCOME
---------------
QUARTERLY PERIOD TOTAL INCOME AMOUNT PER SHARE
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
August 27, 1993*
to October 31, 1993 $ 4,213,943 $ 3,742,547 $ .11
November 1, 1993
to January 31, 1994 8,223,079 7,493,911 .22
February 1, 1994
to April 30, 1994 8,123,521 7,473,849 .22
May 1, 1994
to July 31, 1994 8,424,530 7,757,590 .22
August 1, 1994
to October 31, 1994 7,420,417 6,804,657 .20
November 1, 1994
to January 31, 1995 8,390,082 7,653,347 .22
February 1, 1995
to April 30, 1995 8,331,322 7,787,434 .23
May 1, 1995
to July 31, 1995 8,968,424 8,336,278 .24
<CAPTION>
NET REALIZED AND
UNREALIZED GAINS NET INCREASE (DECREASE)
(LOSSES) ON IN NET ASSETS
INVESTMENTS RESULTING FROM OPERATIONS
-------------------- ----------------
QUARTERLY PERIOD AMOUNT PER SHARE AMOUNT PER SHARE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
August 27, 1993*
to October 31, 1993 $ 15,377,808 $ .44 $ 19,120,355 $ .55
November 1, 1993
to January 31, 1994 9,305,565 .27 16,799,476 .49
February 1, 1994
to April 30, 1994 (75,995,205) (2.21) (68,521,356) (1.99)
May 1, 1994
to July 31, 1994 (5,419,573) (.15) 2,338,017 .07
August 1, 1994
to October 31, 1994 (7,250,281) (.21) (445,624) (.01)
November 1, 1994
to January 31, 1995 (19,106,384) (.55) (11,453,037) (.33)
February 1, 1995
to April 30, 1995 4,051,303 .11 11,838,737 .34
May 1, 1995
to July 31, 1995 15,778,681 .46 24,114,959 .70
<CAPTION>
DIVIDENDS AND
DISTRIBUTIONS SHARE PRICE
-------------------- -----------
QUARTERLY PERIOD AMOUNT PER SHARE HIGH LOW
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
August 27, 1993*
to October 31, 1993 $ 2,519,277 $ .073 $ 10 1/8 $ 9 5/8
November 1, 1993
to January 31, 1994 8,248,043 .239 10 9 1/8
February 1, 1994
to April 30, 1994 7,557,829 .219 10 7 3/4
May 1, 1994
to July 31, 1994 7,557,830 .219 8 1/2 7 3/4
August 1, 1994
to October 31, 1994 7,557,829 .219 8 1/4 7 1/8
November 1, 1994
to January 31, 1995 7,557,830 .219 7 7/8 6 3/8
February 1, 1995
to April 30, 1995 7,557,830 .219 7 1/2 6 7/8
May 1, 1995
to July 31, 1995 7,557,832 .219 8 1/4 7 3/8
</TABLE>
- --------------------------------------------------------------------------------
* Commencement of investment operations.
PAGE 12
<PAGE> 16
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
AUGUST
FOR THE 27,
YEAR 1993*
ENDED THROUGH
JULY 31, JULY 31,
1995 1994
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period....................................... $ 7.75 $ 9.40++
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income...................................................... .89 .77
Net realized and unrealized losses on investments.......................... (.19) (1.65)
-------- --------
Total from investment operations....................................... .70 (.88)
-------- --------
LESS DIVIDENDS:
Dividends from net investment income....................................... (.88) (.75)
-------- --------
Offering costs with respect to issuance of shares.......................... -- (.02)
-------- --------
Net asset value, end of period............................................. $7.57 $7.75
-------- --------
Market price per share, end of period...................................... $7.875 $7.875
-------- --------
TOTAL INVESTMENT RETURN(a):................................................ 12.05%+++ (8.89%)+
RATIOS TO AVERAGE NET ASSETS:
Total expenses......................................................... 1.01% .89%#
Net investment income.................................................. 12.20% 9.36%#
SUPPLEMENTAL DATA:
Net assets, end of period (000)........................................ $261,263 $267,439
Average net assets (000)............................................... 250,594 $304,526
Portfolio turnover rate................................................ 52% 11%
Asset coverage to dollar rolls outstanding at period end............... 302% 299%
Total mortgage dollar rolls outstanding at period end (000)............ $129,147 $134,549
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
* Commencement of investment operations.
+ Total investment return calculated based on beginning of period price of $9.40 (initial offering price
of $10.00 less sales load of $.60).
++ Net asset value immediately after closing of initial public offering was $9.38.
+++ Total investment return is calculated assuming a purchase of common stock at the current market price on
the first day and a sale at the current market price on the last day of the period.
(a) Dividends are assumed, for purposes of this calculation, to be reinvested at prices obtained under the
Trust's dividend and reinvestment plan. Total investment return does not reflect brokerage commissions.
Total investment returns for periods of less than one full year are not annualized.
# Annualized.
</TABLE>
See notes to financial statements.
PAGE 13
<PAGE> 17
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Salomon Brothers 2008 Worldwide Dollar
Government Term Trust Inc
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations, of cash
flows and of changes in net assets and the financial highlights present fairly,
in all material respects, the financial position of Salomon Brothers 2008
Worldwide Dollar Government Term Trust Inc (the "Trust") at July 31, 1995, the
results of its operations and cash flows for the year then ended, and the
changes in its net assets and the financial highlights for the year then ended
and for the period August 27, 1993 (commencement of operations) through July 31,
1994, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust'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 July
31, 1995 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
September 8, 1995
PAGE 14
<PAGE> 18
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- ---------------------------------------------------------------------------
OTHER INFORMATION
Pursuant to certain rules of the Securities and Exchange Commission the
following additional disclosure is provided.
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"), stockholders
may elect to have all distributions automatically reinvested by American Stock
Transfer & Trust Company (the "Plan Agent") in Trust Shares pursuant to the
Plan. Each registered Stockholder will receive from the Trust, as soon as
practicable, an authorization card to be signed and returned if the Stockholder
elects to participate in the Plan. Stockholders who do not participate in the
Plan will receive all distributions in cash paid by check in dollars mailed
directly to the stockholder by the custodian, as dividend disbursing agent. In
the case of stockholders, such as banks, brokers or nominees, that hold Shares
for others who are the beneficial owners, the Plan Agent will administer the
Plan on the basis of the number of Shares certified from time to time by the
stockholders as representing the total amount registered in such stockholders'
names and held for the account of beneficial owners who are participants in the
Plan. Investors that own shares registered in the name of a bank, broker-dealer
or other nominee should consult with such nominee as to the participation in the
Plan through such nominee, and may be required to have their shares registered
in their own names in order to participate in the Plan.
The Plan Agent serves as agent for the stockholders in administering the Plan.
After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust Shares in the open market, on the New York
Stock Exchange or elsewhere, for the participants' accounts. The Trust will not
issue any new shares in connection with the Plan.
The Plan Agent maintains all stockholder accounts in the Plan and furnishes
written confirmations of all transactions in an account, including information
needed by stockholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Plan Agent in the name of the
participant, and each stockholder's proxy will include those shares purchased
pursuant to the Plan.
There is no charge to participants for reinvesting dividends or capital gains
distributions. The Plan Agent's fees for the reinvestment of dividends and
capital gains distributions will be paid by the Trust. 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. Brokerage charges for purchasing small amounts of
stock for individual accounts through the Plan are expected to be less than the
usual brokerage charges for such transactions because the Plan Agent will be
purchasing stock for all participants in blocks and prorating the lower
commission thus attainable.
The receipt of dividends and distributions under the Plan will not relieve
participants of any federal income tax that may be payable on such dividends or
distributions. See "Taxation -- Taxation of Stockholders."
PAGE 15
<PAGE> 19
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- ---------------------------------------------------------------------------
OTHER INFORMATION (continued)
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Trust and the Plan Agent reserve the right to terminate the Plan as applied
to any dividend or distribution paid subsequent to written notice of the
termination sent to members of the Plan at least 30 days before the record date
for such dividend or distribution. The Plan also may be amended by the Trust or
the Plan Agent, but (except when necessary or appropriate to comply with
applicable law, rules or policies of a regulatory authority) only by at least 30
days' written notice to participants in the Plan. All correspondence concerning
the Plan should be directed to the Plan Agent at 40 Wall Street, 46th Floor, New
York, New York 10005.
PAGE 16
<PAGE> 20
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- -----------
DIRECTORS
CHARLES F. BARBER
Consultant; formerly Chairman,
ASARCO Incorporated
THOMAS W. BROCK
Chairman and Chief Executive Officer,
Salomon Brothers Asset Management Inc
DANIEL P. CRONIN
Vice President -- General Counsel,
Pfizer International Inc.
ALLAN C. HAMILTON
Consultant; formerly
Vice President and
Treasurer, Exxon Corp.
MICHAEL S. HYLAND
President;
Salomon Brothers
Asset Management Inc
- ---------
OFFICERS
MICHAEL S. HYLAND
Chairman and President
STEVEN GUTERMAN
Executive Vice President
PETER J. WILBY
Executive Vice President
ALAN M. MANDEL
Treasurer
TANA E. TSELEPIS
Secretary
LAURIE A. PITTI
Assistant Treasurer
- ----------------------
SALOMON BROTHERS
2008 WORLDWIDE DOLLAR
GOVERNMENT TERM TRUST INC
Seven World Trade Center
New York, New York 10048
For information call (toll free)
1-800-SALOMON
INVESTMENT ADVISER
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048
ADMINISTRATOR
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, New York 10292
CUSTODIAN
Investors Bank and Trust Company
89 South Street, P.O. Box 1537
Boston, MA 02205-1537
TRANSFER AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
New York, New York 10036
LEGAL COUNSEL
Simpson Thacher & Bartlett
New York, New York 10017
NEW YORK STOCK EXCHANGE SYMBOL
SBG
- ---------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, shares of
its common stock at market prices.
- ------------------------------------------------------
This report is for stockholder information.
This is not a prospectus intended for use in
the purchase or sale of Trust shares.
- --------------------------------------------------------------------------------
<PAGE> 21
---------------------
BULK RATE
U.S. POSTAGE
AMERICAN STOCK TRANSFER & TRUST COMPANY PAID
40 WALL STREET STATEN ISLAND, NY
NEW YORK, NEW YORK 10005 PERMIT NO.
169
---------------------
