<PAGE> 1
------------------------------------------------------------
SALOMON BROTHERS
2008 WORLDWIDE DOLLAR
GOVERNMENT TERM TRUST INC
SEMI-ANNUAL REPORT
----------------------------------------
JANUARY 31, 1997
------------------------------------
SALOMON BROTHERS ASSET MANAGEMENT
--------------------------------
<PAGE> 2
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
March 26, 1997
Dear Shareholders:
We are pleased to provide this semi-annual report for the Salomon Brothers 2008
Worldwide Dollar Government Term Trust Inc (the "Trust"), including market
commentary and a statement of the Trust's current investments.
PERFORMANCE HIGHLIGHTS
During the fiscal quarter ended January 31, 1997, the net asset value for the
Trust increased to $10.15 per share from $9.49 per share as of October 31, 1996.
Dividends of $0.256 per share were declared during the quarter. Assuming that
these dividends were reinvested in additional shares of the Trust, the net asset
value return for the quarter ending January 31, 1997 was 9.79%. During the same
period, the Salomon Brothers Brady Bond Index returned 10.41%, while the Salomon
Brothers Mortgage Index increased by 1.78%.
As of January 31, 1997, the long-term portfolio of the Trust was divided between
emerging markets debt (59% of total investments), mortgage-backed securities
(37%) and municipal zero-coupon bonds (4%).
EMERGING MARKETS
The continued strong performance of the emerging debt markets has been driven by
positive economic and political developments in a number of key countries. The
combination of favorable market conditions and attractive yields has encouraged
institutional investors to increase their allocations to emerging market debt.
The outlook for economic growth in emerging markets is especially strong in
Latin America. The major economies of the region are experiencing the benefits
of reform measures which have been enacted over the past few years. GDP growth
rates are expected to accelerate into the 4% to 6% annual range over the next
two years. This level of economic growth should provide the opportunity for
these countries to make progress in reducing unemployment. In addition,
inflation rates in the major Latin American countries are trending lower.
The recent renewed commitment on the part of the Russian government to reform
has been well received by the market. This important emerging economy is
concluding a large debt restructuring and is addressing the tax collection
problem which has hampered economic growth over the past few years.
<PAGE> 3
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
MORTGAGE-BACKED SECURITIES
Mortgage-backed securities performed strongly during the three-month period
ended January 31, 1997, as U.S. interest rates continued to move within a
relatively narrow band. Spreads on mortgage securities tightened significantly
as yield-hungry investors bid up the prices of mortgage securities.
Pass-throughs, which comprise most of the Trust's mortgage holdings, benefited
from strong investor demand and increased REMIC issuance. The demand for
pass-throughs has re-ignited the roll market, providing some of the most
attractive financing opportunities for mortgages in recent years.
FOR ADDITIONAL INFORMATION
In a continuing effort to provide timely information concerning the Salomon
Brothers 2008 Worldwide Dollar Government Term Trust, shareholders may call
1-800-SALOMON (1-800-725-6666), Monday through Friday from 8:30 am to 6:00 pm
EST for a recorded update that includes current portfolio manager commentary,
net asset value, portfolio holdings and allocations. Should you require specific
information regarding your Salomon Brothers 2008 Worldwide Dollar Government
Term Trust stock account, or for information regarding the Trust's Dividend
Reinvestment Plan, please call American Stock Transfer & Trust Company at
1-800-937-5449 (1-718-921-8200 if you are calling from within New York City).
All of us at Salomon Brothers Asset Management appreciate the confidence you
have demonstrated in the past and hope to continue to serve you in future years.
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
January 31, 1997 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) SOVEREIGN BONDS -- 84.2% (NOTE 2)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
ARGENTINA -- 19.0%
$39,000 Republic of Argentina, Discount Bond, 6.375%, 3/31/23*....................... $ 31,711,875
8,820 Republic of Argentina, FRB, 6.625%, 3/31/05*................................. 7,915,950
41,000 Republic of Argentina, Par Bond, 5.25%, 3/31/23*............................. 26,803,750
-------------
66,431,575
-------------
BRAZIL -- 18.6%
6,676 Federal Republic of Brazil, C Bond, 8.00%, 4/15/14**......................... 5,178,334
9,500 Federal Republic of Brazil, Discount Bond, Series ZL, 6.50%, 4/15/24*........ 7,695,000
5,000 Federal Republic of Brazil, Investment (Exit) Bond, 6.00%, 9/15/13........... 3,712,500
653 Federal Republic of Brazil, IDU, 6.50%, 1/01/01*............................. 640,266
2,000 Federal Republic of Brazil, NMB, 6.5625%, 4/15/09*........................... 1,703,750
71,800 Federal Republic of Brazil, Par Bond, 5.00%, 4/15/24*........................ 46,311,000
-------------
65,240,850
-------------
BULGARIA -- .2%
2,000 Republic of Bulgaria, FLIRB, Series A, 2.25%, 7/28/12*....................... 731,250
-------------
COSTA RICA -- 2.1%
9,000 Costa Rica, Principal Bond, Series B, 6.25%, 5/21/15......................... 7,290,000
-------------
ECUADOR -- 9.7%
34,000 Republic of Ecuador, Discount Bond, 6.50%, 2/28/25*.......................... 24,310,000
14,895 Republic of Ecuador, PDI Bond, 6.50%, 2/27/15*(,)**.......................... 9,663,279
-------------
33,973,279
-------------
MEXICO -- 10.2%
1,900 United Mexican States, Global Bond, 11.50%, 5/15/26.......................... 2,065,300
20,500 United Mexican States, Par Bond, Series A, 6.25%, 12/31/19
(including 20,500,000 rights).............................................. 15,490,313
4,000 United Mexican States, Par Bond, Series B, 6.25%, 12/31/19
(including 4,000,000 rights)............................................... 3,022,500
15,750 United Mexican States, Discount Bond, Series A, 6.45313%, 12/31/19*
(including 24,230,000 rights).............................................. 14,322,656
1,000 United Mexican States, Discount Bond, Series D, 6.35156%, 12/31/19*
(including 1,538,000 rights)............................................... 909,375
-------------
35,810,144
-------------
PHILIPPINES -- 3.9%
15,500 Republic of the Philippines, Par Bond, Series B, 6.25%, 12/01/17*............ 13,833,750
-------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 1
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SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
January 31, 1997 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) SOVEREIGN BONDS (CONCLUDED) (NOTE 2)
-----------------------------------------------------------------------------------------------------------
<C> <S> <C>
POLAND -- 7.2%
$ 3,000 Republic of Poland, Discount Bond, 6.50%, 10/27/24*.......................... $ 2,955,000
35,700 Republic of Poland, RSTA Par Bond, 3.25%, 10/27/24*.......................... 22,134,000
-------------
25,089,000
-------------
URUGUAY -- .8%
3,000 Uruguay, Par Bond, Series A, 6.75%, 2/19/21
(including 3,000,000 rights)............................................... 2,640,000
-------------
VENEZUELA -- 12.5%
25,000 Republic of Venezuela, Discount Bond, Series A, 6.4375%, 3/31/20*
(including 178,500 warrants)............................................... 21,671,875
8,000 Republic of Venezuela, FLIRB, Series A, 6.625%, 3/31/07*..................... 7,305,000
13,000 Republic of Venezuela, Par Bond, Series A, 6.75%, 3/31/20
(including 65,000 warrants)................................................ 10,058,750
5,500 Republic of Venezuela, Par Bond, Series B, 6.75%, 3/31/20
(including 27,500 warrants)................................................ 4,255,625
750 Republic of Venezuela, DCB, 6.50%, 12/18/07*................................. 677,344
-------------
43,968,594
-------------
TOTAL SOVEREIGN BONDS (cost $236,845,772).................................... 295,008,442
-------------
MORTGAGE-BACKED SECURITIES -- 51.9%
------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
49,000(#) Gold, 6.50%, 30 Year (TBA)................................................. 46,902,188
6,242 Series 1576, Class PK, 6.00%, 9/15/02 (PAC I/O)............................ 215,551
22,490 Series 1599, Class D, 6.50%, 6/15/19 (PAC I/O)............................. 3,148,647
15,332 Series 1609, Class J, 6.50%, 11/15/13 (PAC I/O)............................ 807,310
6,786 Series 1610, Class PH, 6.50%, 3/15/19 (PAC I/O)............................ 777,203
12,380 Series 1617, Class PF, 6.50%, 6/15/18 (PAC I/O)............................ 1,164,476
7,419 Series 1679, Class WA, 6.00%, 2/15/03 (PAC I/O)............................ 263,137
Federal National Mortgage Assoc.,
78,000(#) 6.50%, 30 Year (TBA)....................................................... 74,514,375
20,000(#) 7.00%, 30 Year (TBA)....................................................... 19,584,375
5,000(#) 7.50%, 30 Year (TBA)....................................................... 5,005,469
25,000(#) 8.00%, 30 Year (TBA)....................................................... 25,511,719
8,548 Trust 1993-169, Class QA, 6.50%, 8/25/12, (REMIC) (PAC I/O)................ 308,544
14,018 Trust 1993-183, Class EA, 6.50%, 3/25/17, (REMIC) (PAC I/O)................ 1,298,828
8,598 Trust 1993-183, Class EC, 6.50%, 3/25/13, (REMIC) (PAC I/O)................ 390,927
8,250 Trust 1993-189, Class PH, 6.50%, 2/25/19, (REMIC) (PAC I/O)................ 942,353
19,511 Trust 1993-202, Class Q, 6.50%, 11/25/13, (REMIC) (PAC I/O)................ 1,009,103
-------------
TOTAL MORTGAGE-BACKED SECURITIES (cost $185,754,050)......................... 181,844,205
-------------
</TABLE>
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See accompanying notes to financial statements.
PAGE 2
<PAGE> 6
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (concluded)
January 31, 1997 (unaudited)
<TABLE>
<CAPTION>
<C> <S> <C>
PRINCIPAL
AMOUNT VALUE
(000) ZERO-COUPON MUNICIPAL BONDS -- 5.7% (NOTE 2)
-----------------------------------------------------------------------------------------------------------
$11,200 Austin, Texas Utility System Revenue, Ser. A, 11/15/08....................... $ 5,934,993
Edinburg, Texas Cons. Independent School District,
1,845 2/15/08.................................................................... 1,017,997
2,705 2/15/09.................................................................... 1,404,328
Harris County, Texas,
5,470 8/15/08.................................................................... 2,937,937
Texas St. Public Finance Auth. Bldg. Rev.,
10,535 2/1/08..................................................................... 5,825,012
Westmoreland County, Pennsylvania,
2,665 Series G, 6/1/08........................................................... 1,461,753
2,515 Series G, 12/1/08.......................................................... 1,343,413
-------------
TOTAL ZERO-COUPON MUNICIPAL BONDS (cost $20,035,113)......................... 19,925,433
-------------
<CAPTION>
REPURCHASE AGREEMENT -- .2%
<C> <S> <C>
-----------------------------------------------------------------------------------------------------------
792 J.P. Morgan, 5.52%, cost $792,000, dated 1/31/97, $792,364 due 2/3/97,
(collateralized by $804,000, U.S. Treasury Notes, 5.875%, due 11/15/99,
valued at $808,020)........................................................ 792,000
-------------
TOTAL INVESTMENTS -- 142.0% (cost $443,426,935).............................. 497,570,080
-------------
LIABILITIES IN EXCESS OF OTHER ASSETS -- (42.0%)............................. (147,195,446)
-------------
NET ASSETS -- 100.0%......................................................... $ 350,374,634
============
NET ASSET VALUE PER SHARE
($350,374,634 / 34,510,639 shares of common stock issued and outstanding).... $10.15
=====
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<C> <S> <C> <C>
* Rate shown reflects current rate on variable rate instrument or instrument with step coupon rates.
** Payment-in-kind security for which part of the interest earned is capitalized as additional principal.
(#) Mortgage dollar roll.
DCB -- Debt Conversion Bond.
FLIRB -- Front Loaded Interest Reduction Bond.
FRB -- Floating Rate 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 3
<PAGE> 7
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
January 31, 1997 (unaudited)
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $443,426,935)..................................................... $497,570,080
Cash.......................................................................................... 289
Receivable for investments sold............................................................... 23,501,690
Interest receivable........................................................................... 7,210,113
Deferred organization expenses and other assets............................................... 39,174
------------
Total assets.......................................................................... 528,321,346
------------
LIABILITIES
Dollar roll payable (Note 5).................................................................. 170,151,313
Payable for investments purchased............................................................. 7,224,688
Advisory fee payable.......................................................................... 170,026
Administration fee payable.................................................................... 46,982
Accrued expenses.............................................................................. 353,703
------------
Total liabilities..................................................................... 177,946,712
------------
NET ASSETS
Common Stock ($.001 par value, authorized 200,000,000 shares; 34,510,639 shares
outstanding)................................................................................ 34,511
Additional paid-in-capital.................................................................... 323,533,363
Undistributed net investment income........................................................... 3,941,755
Accumulated net realized loss on investments.................................................. (31,278,140)
Net unrealized appreciation on investments.................................................... 54,143,145
------------
Net assets............................................................................ $350,374,634
------------
NET ASSET VALUE PER SHARE ($350,374,634 / 34,510,639 shares).................................. $ 10.15
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 4
<PAGE> 8
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended January 31, 1997 (unaudited)
<TABLE>
<S> <C> <C>
NET INVESTMENT INCOME
INCOME
Interest and discount earned................................................. $18,777,664
EXPENSES
Investment advisory fees..................................................... $996,894
Administration fees.......................................................... 233,291
Custodian's fees and expenses................................................ 102,839
Reports to shareholders...................................................... 74,608
Listing fees................................................................. 49,170
Transfer agent's fees and expenses........................................... 36,296
Audit fees and expenses...................................................... 33,271
Legal fees and expenses...................................................... 24,198
Directors' fees.............................................................. 20,669
Amortization of deferred organization expenses............................... 12,602
Miscellaneous................................................................ 4,314
--------
Total expenses........................................................... 1,588,152
-----------
Net investment income............................................................ 17,189,512
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions..................................... 5,067,851
Net change in unrealized appreciation on investments............................. 42,325,572
-----------
Net realized and unrealized gain on investments.................................. 47,393,423
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS....................................... $64,582,935
-----------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 5
<PAGE> 9
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED FOR THE
JANUARY 31, 1997 YEAR ENDED
(UNAUDITED) JULY 31, 1996
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income.................................................. $ 17,189,512 $ 32,384,326
Net realized gain (loss) on investment transactions.................... 5,067,851 (3,346,053)
Net change in unrealized appreciation on investments................... 42,325,572 42,132,165
------------ ------------
Net increase in net assets from operations............................. 64,582,935 71,170,438
DIVIDENDS
Dividends from net investment income................................... (16,392,554) (30,231,286)
------------ ------------
CAPITAL SHARE TRANSACTIONS
Additional offering costs paid......................................... -- (17,416)
------------ ------------
Total increase......................................................... 48,190,381 40,921,736
------------ ------------
NET ASSETS
Beginning of period.................................................... 302,184,253 261,262,517
------------ ------------
End of period (includes undistributed net investment income of
$3,941,755 and $3,144,797, respectively)............................. $350,374,634 $302,184,253
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
For the Six Months Ended January 31, 1997 (unaudited)
<TABLE>
<S> <C>
INCREASE (DECREASE) IN CASH
CASH FLOWS USED BY OPERATING ACTIVITIES:
Purchases of long-term portfolio investments.............................................. $(59,508,074)
Proceeds from disposition of long-term portfolio investments and principal paydowns....... 26,963,051
Net purchase of short-term portfolio investments.......................................... (792,000)
------------
(33,337,023)
Net investment income..................................................................... 17,189,512
Amortization of net premium/discount on investments....................................... (411,339)
Amortization of organization expenses..................................................... 12,602
Net change in receivables/payables related to operations.................................. (161,409)
------------
Net cash flows used by operating activities........................................... (16,707,657)
------------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Net increase from dollar roll transactions................................................ 33,100,500
Cash dividends paid....................................................................... (16,392,554)
------------
Net cash flows provided by financing activities....................................... 16,707,946
------------
Net increase in cash.......................................................................... 289
Cash at beginning of period................................................................... 0
------------
CASH AT END OF PERIOD......................................................................... $ 289
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 6
<PAGE> 10
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(unaudited)
NOTE 1. ORGANIZATION
The Salomon Brothers 2008 Worldwide Dollar Government Term Trust Inc (the
"Trust") was incorporated in Maryland on May 24, 1993 and is registered as a
non-diversified, closed-end, management investment company under the Investment
Company Act of 1940, as amended. 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. At July 31, 1996, a
significant portion of the Trust's investments is in sovereign debt of emerging
market countries. In addition, the Trust's investment in mortgage-backed
securities is subject to the risk that rapid principal repayment, including
prepayment, may have an adverse effect on the yield to maturity of such
securities.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles
("GAAP"). The preparation of financial statements in accordance with GAAP
requires management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual amounts could differ
from those estimates.
(a) SECURITIES VALUATION. In valuing the Trust's assets, all securities for
which market quotations are readily available are valued (i) at the last sale
price prior to the time of determination if there were a sale on the date of
determination, (ii) at the mean between the last current bid and asked prices if
there were no sales on such date and bid and asked quotations are available, and
(iii) at the bid price if there were no sales price on such date and only bid
quotations are available. Publicly traded foreign government debt securities are
typically traded internationally in the over-the-counter market, and are valued
at the mean
PAGE 7
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SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
between the last current bid and asked price as of the close of business of that
market. However, when 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.
(b) INVESTMENT TRANSACTIONS. Investment 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.
(c) FEDERAL INCOME TAXES. The Trust has complied and intends to continue to
comply with the requirements of the Internal Revenue Code of 1986, as amended,
applicable to regulated investment companies, and to distribute sufficient
taxable income to shareholders. Therefore, no federal income tax or excise tax
provision is required.
(d) DIVIDENDS AND DISTRIBUTIONS. The Trust declares and pays dividends to
shareholders monthly from net investment income. Net realized gains, if any, in
excess of loss carryovers are expected to be distributed annually. Dividends and
distributions to shareholders are recorded on the ex-dividend date. The amount
of dividends and distributions from net investment income and net realized gains
are determined in accordance with federal income tax regulations, which may
differ from GAAP. To the extent these differences are permanent in nature, such
amounts are reclassified within the components of net assets. 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.
(e) 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 ratably over a five-year period from commencement of
operations.
(f) REPURCHASE AGREEMENTS. When entering into repurchase agreements, it is the
Trust's policy to take possession, through its custodian, of the underlying
collateral and to monitor its value at the time the arrangement is entered into
and at all times during the term of the
PAGE 8
<PAGE> 12
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
repurchase agreement to ensure that it equals or exceeds the repurchase price.
In the event of default of the obligation to repurchase, the Trust has the right
to liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings.
(g) 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.
NOTE 3. MANAGEMENT AND ADMINISTRATION FEES AND OTHER TRANSACTIONS
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 objectives and policies and for making decisions to buy,
sell, or hold particular securities. Through August 31, 1995, the Trust also had
an Administration Agreement with Prudential Mutual Fund Management, Inc. (the
"Administrator"), pursuant to which the Administrator performed 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
paid 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 was amended to provide
for the appointment of the Adviser as Administrator and Prudential Mutual Fund
Management, Inc. as Sub-administrator (the "Sub-administrator"). Under the
amended Agreement, the Trust pays 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 pays the Sub-administrator eighty
percent of such fees collected for its services.
At January 31, 1997, the Adviser owned 13,485 shares of the Trust.
PAGE 9
<PAGE> 13
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
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 4. PORTFOLIO ACTIVITY AND FEDERAL INCOME TAX STATUS
Purchases and sales of investment securities, other than short-term investments
and dollar rolls, for the six months ended January 31, 1997 aggregated
$66,732,762 and $50,309,741, respectively.
The federal income tax cost basis of the Trust's investments at January 31, 1997
was $443,426,935 and, accordingly, net unrealized appreciation for federal
income tax purposes was $54,143,145 (gross unrealized appreciation --
$61,696,440; gross unrealized depreciation -- $7,553,295).
Pursuant to federal income tax regulations, the Trust elected to treat capital
losses of $2,412,950, incurred in the period November 1, 1995 through July 31,
1996, as having occurred on August 1, 1996. In addition, the Trust has a capital
loss carryforward as of July 31, 1996 of $30,901,987 of which $1,007,552 expires
in 2003 and $29,894,435 expires in 2004. To the extent future capital gains are
offset by such capital losses, the Trust does not anticipate distributing such
gains to shareholders.
NOTE 5. 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 to settle on a specified future date. At January 31, 1997, the Trust
contracted to repurchase mortgage-backed securities of $170,151,313 for a
scheduled settlement on February 13, 1997. 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 six months ended January 31, 1997 was approximately $155,723,477.
PAGE 10
<PAGE> 14
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(unaudited)
NOTE 6. DIVIDENDS
Subsequent to January 31, 1997, the Board of Directors of the Trust declared
dividends of $.073 per common share payable February 28, 1997 and March 31, 1997
to shareholders of record on February 19, 1997 and March 18, 1997, respectively.
NOTE 7. QUARTERLY DATA (UNAUDITED)
<TABLE>
<CAPTION>
NET REALIZED AND
UNREALIZED GAINS
(LOSSES) ON
NET INVESTMENT INCOME INVESTMENTS
------------------------------- ------------------
QUARTERLY PERIOD TOTAL INCOME AMOUNT PER SHARE AMOUNT
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
August 27, 1993*
to October 31, 1993 $ 4,213,943 $3,742,547 $ .11 $ 15,377,808
November 1, 1993
to January 31, 1994 8,223,079 7,493,911 .22 9,305,565
February 1, 1994
to April 30, 1994 8,123,521 7,473,849 .22 (75,995,205)
May 1, 1994
to July 31, 1994 8,424,530 7,757,590 .22 (5,419,573)
August 1, 1994
to October 31, 1994 7,420,417 6,804,657 .20 (7,250,281)
November 1, 1994
to January 31, 1995 8,390,082 7,653,347 .22 (19,106,384)
February 1, 1995
to April 30, 1995 8,331,322 7,787,434 .23 4,051,303
May 1, 1995
to July 31, 1995 8,968,424 8,336,278 .24 15,778,681
August 1, 1995
to October 31, 1995 8,600,890 7,951,429 .23 9,887,863
November 1, 1995
to January 31, 1996 8,980,759 8,256,058 .24 45,110,600
February 1, 1996
to April 30, 1996 8,799,010 7,991,738 .23 (20,711,120)
May 1, 1996
to July 31, 1996 8,894,728 8,185,101 .24 4,498,769
August 1, 1996
to October 31, 1996 8,721,821 7,949,929 .23 24,992,853
November 1, 1996
to January 31, 1997 10,055,843 9,239,583 .27 22,400,570
<CAPTION>
NET REALIZED AND
UNREALIZED GAINS NET INCREASE (DECREASE)
(LOSSES) ON IN NET ASSETS DIVIDENDS AND
INVESTMENTS RESULTING FROM OPERATIONS DISTRIBUTIONS
---------------- ------------------------------------- -------------
QUARTERLY PERIOD PER SHARE AMOUNT PER SHARE AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
August 27, 1993*
to October 31, 1993 $ .44 $19,120,355 $ .55 $2,519,277
November 1, 1993
to January 31, 1994 .27 16,799,476 .49 8,248,043
February 1, 1994
to April 30, 1994 (2.21) (68,521,356) (1.99) 7,557,829
May 1, 1994
to July 31, 1994 (.15) 2,338,017 .07 7,557,830
August 1, 1994
to October 31, 1994 (.21) (445,624) (.01) 7,557,829
November 1, 1994
to January 31, 1995 (.55) (11,453,037) (.33) 7,557,830
February 1, 1995
to April 30, 1995 .11 11,838,737 .34 7,557,830
May 1, 1995
to July 31, 1995 .46 24,114,959 .70 7,557,832
August 1, 1995
to October 31, 1995 .28 17,839,292 .51 7,557,830
November 1, 1995
to January 31, 1996 1.31 53,366,658 1.55 7,557,831
February 1, 1996
to April 30, 1996 (.60) (12,719,382) (.37) 7,557,830
May 1, 1996
to July 31, 1996 .13 12,683,870 .37 7,557,795
August 1, 1996
to October 31, 1996 .72 32,942,782 .95 7,557,830
November 1, 1996
to January 31, 1997 .65 31,640,153 .92 8,834,724
<CAPTION>
DIVIDENDS AND
DISTRIBUTIONS SHARE PRICE
------------- -------------------------------
QUARTERLY PERIOD PER SHARE HIGH LOW
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
August 27, 1993*
to October 31, 1993 $.073 $10 1/8 $9 5/8
November 1, 1993
to January 31, 1994 .239 10 9 1/8
February 1, 1994
to April 30, 1994 .219 10 7 3/4
May 1, 1994
to July 31, 1994 .219 8 1/2 7 3/4
August 1, 1994
to October 31, 1994 .219 8 1/4 7 1/8
November 1, 1994
to January 31, 1995 .219 7 7/8 6 3/8
February 1, 1995
to April 30, 1995 .219 7 1/2 6 7/8
May 1, 1995
to July 31, 1995 .219 8 1/4 7 3/8
August 1, 1995
to October 31, 1995 .219 8 1/8 7 5/8
November 1, 1995
to January 31, 1996 .219 8 7/8 7 3/4
February 1, 1996
to April 30, 1996 .219 9 8
May 1, 1996
to July 31, 1996 .219 8 3/4 8 3/8
August 1, 1996
to October 31, 1996 .219 9 1/4 8 5/8
November 1, 1996
to January 31, 1997 .256 9 3/8 8 3/4
</TABLE>
- --------------------------------------------------------------------------------
* Commencement of investment operations.
PAGE 11
<PAGE> 15
SALOMON BROTHERS 2008 WORLDWIDE DOLLAR GOVERNMENT TERM TRUST INC
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR THE
SIX MONTHS ENDED FOR THE FOR THE AUGUST 27, 1993*
JANUARY 31, 1997 YEAR ENDED YEAR ENDED THROUGH
(UNAUDITED) JULY 31, 1996 JULY 31, 1995 JULY 31, 1994
------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...... $ 8.76 $ 7.57 $ 7.75 $ 9.40++
-------- ------------- ------------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................... .50 .94 .89 .77
Net realized and unrealized gain (loss) on
investments............................. 1.37 1.12 (.19) (1.65)
-------- ------------- ------------- --------
Total from investment operations...... 1.87 2.06 .70 (.88)
-------- ------------- ------------- --------
LESS DIVIDENDS:
Dividends from net investment income...... (.48) (.87) (.88) (.75)
-------- ------------- ------------- --------
Offering costs with respect to issuance of
shares.................................. -- -- -- (.02)
-------- ------------- ------------- --------
Net asset value, end of period............ $ 10.15 $ 8.76 $ 7.57 $ 7.75
-------- ------------- ------------- --------
Market price per share, end of period..... $ 9.125 $ 8.625 $ 7.875 $ 7.875
-------- ------------- ------------- --------
TOTAL INVESTMENT RETURN(a):............... 11.44% 21.39% 12.05% (8.89%)+
RATIOS TO AVERAGE NET ASSETS:
Total expenses........................ .96%# 1.01% 1.01% .89%#
Net investment income................. 10.39%# 11.27% 12.20% 9.36%#
SUPPLEMENTAL DATA:
Net assets, end of period (000)....... $350,375 $ 302,184 $ 261,263 $267,439
Average net assets (000).............. $328,327 $ 287,466 $ 250,594 $304,526
Portfolio turnover rate............... 11% 32% 52% 11%
Asset coverage to dollar rolls
outstanding at period end........... 306% 320% 302% 299%
Total mortgage dollar rolls
outstanding at period end (000)..... $170,151 $ 137,051 $ 129,147 $134,549
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
* Commencement of investment operations.
+ Return calculated based on beginning of period price of $9.40 (initial offering price of $10.00 less
sales load of $.60) and end of period market value of $7.875 per share. The calculated return has not
been annualized.
++ Net asset value immediately after closing of initial public offering was $9.38.
(a) 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 each period reported. For
purposes of this calculation, dividends are assumed to be reinvested at prices obtained under the
Trust's dividend reinvestment plan and the broker commission paid to purchase or sell a share is
excluded. Total investment returns for periods of less than one full year are not annualized.
# Annualized.
</TABLE>
See accompanying notes to financial statements.
PAGE 12
<PAGE> 16
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
Managing Director, Salomon Brothers Inc
President, Salomon Brothers
Asset Management Inc
RIORDAN ROETT
Professor and Director,
Latin American Studies Program,
Paul H. Nitze School of
Advanced International Studies,
Johns Hopkins University
JESWALD W. SALACUSE
Henry J. Braker
Professor of Commercial Law,
The Fletcher School of Law & Diplomacy,
Tufts University
- ---------
OFFICERS
MICHAEL S. HYLAND
Chairman and President
STEVEN GUTERMAN
Executive Vice President
PETER J. WILBY
Executive Vice President
LAWRENCE H. KAPLAN
Executive Vice President
and General Counsel
ALAN M. MANDEL
Treasurer
LAURIE A. PITTI
Assistant Treasurer
JENNIFER MUZZEY
Secretary
NOEL DAUGHERTY
Assistant Secretary
- ----------------------
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 AND ADMINISTRATOR
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048
SUB-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
LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue
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> 17
---------------------
BULK RATE
U.S. POSTAGE
PAID
STATEN ISLAND, NY
PERMIT NO.
169
---------------------
AMERICAN STOCK TRANSFER & TRUST COMPANY
40 WALL STREET
NEW YORK, NEW YORK 10005
