GLOBAL PARTNERS INCOME FUND INC, N-30D, 1998-05-13

GLOBAL PARTNERS INCOME FUND INC
N-30D, 1998-05-13

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GLOBAL PARTNERS
INCOME FUND INC.

SEMI-ANNUAL REPORT
FEBRUARY 27, 1998

American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005

- -------------------
BULK RATE
U.S. POSTAGE
PAID
STATEN ISLAND, NY
PERMIT No.
169
- -------------------

GLOBAL PARTNERS INCOME FUND INC.

April 24, 1998
To Our Shareholders:

We are pleased to provide this semi-annual report for the Global Partners Income
Fund Inc. (the 'Fund') for the six months ended February 27, 1998. Included are
market commentary, a statement of the Fund's investments as of February 27, 1998
and financial statements for the six-month period ended February 27, 1998.

During the six months ended February 27, 1998, the net asset value for the Fund
decreased from $16.18 per share to $15.00 per share as of February 27, 1998.
Dividends totaling $1.72875 per share were paid during this period. This total
represents $0.90375 and $0.825 per share from net investment income and realized
net long-term capital gains, respectively. Assuming the reinvestment of these
dividends in additional shares of the Fund, the net asset value return for the
six months ended February 27, 1998 was 3.94%. During the same period, the
Salomon Brothers Brady Bond Index and the Salomon Brothers High-Yield Market
Index returned 4.03% and 7.24%, respectively.

On February 27, 1998, the Fund, as a percentage of total investments, was
approximately 51% invested in securities of emerging market issuers, including
obligations of sovereign governments and companies. The balance of the Fund's
assets was invested in U.S. high-yield securities and short-term investments.

EMERGING MARKET DEBT SECURITIES

The emerging debt markets, despite the Asian crisis in October, rallied during
the six months ended February 27, 1998.

There has been significant volatility in the market due to the instability in
other markets around the world, most notably in the Asian stock and currency
markets. The stripped spread on the J.P. Morgan Emerging Markets Bond Index
reached a peak of 334 basis points over U.S. Treasuries just prior to the
sell-off on October 22nd, and ended the month with a spread of 606 basis points.
While this spread widening and bond market decline was meaningful, it fails to
capture the volatility experienced in the market over the final nine days of
October when the spread on the J.P. Morgan Index gyrated between the mid-400
basis point range and the low-800 basis point range.

When the crisis started to take shape, we reduced the Fund's exposure to the
market in anticipation of increased volatility. Towards the end of the month of
October and into November, most of the Asian countries began to take steps to
combat the weakness in their currencies: Korea exchanged over US$20 billion in
maturing short-term debt for longer-term bonds and subscribed to an
International Monetary Fund ('IMF') reform package; Thailand and Malaysia began
to implement many IMF reforms; and China reaffirmed its commitment to
maintaining Hong Kong's U.S. dollar currency peg. While we believed, at that
point, that the market risks in Asia had not disappeared, we began to become
more confident in global emerging market bond prospects and began to increase
our exposure to the market. Our increased exposure was concentrated in those
countries that had solid fundamentals and that were not excessively reliant on
the international capital markets that were sold off in sympathy with Asia.
Mexico and Venezuela were two such countries.

LATIN AMERICA

Brady bond exchanges in three Latin American countries dominated the market's
focus. More than US$8 billion of outstanding Bradys were retired in exchange for
nearly US$7 billion in global bonds.

GLOBAL PARTNERS INCOME FUND INC.

Investors tendered collateralized Brady bonds to each country in return for
uncollateralized global bonds. The Brady market, which provided a resolution to
the 1980s' debt crisis in Latin America and several non-Latin countries, has
become less necessary in today's marketplace. The former default countries have
greatly improved their creditworthiness.

Argentina. The Argentine cabinet approved a tax reform package that reduces the
value-added tax ('VAT') to 10.5% from 21% for basic food items, and raises the
top corporate tax rate to 35% from 33%. Additional features include: an
extension of the VAT to advertising, cable television and private health; a 10%
cut in employers' social security contributions; a tax on companies issuing
private bonds; and higher beverage and tobacco taxes. The IMF issued mixed
comments on Argentina, praising the country for having successfully withstood
the Asian storm but expressing concerns on the deteriorating external position.
The IMF urged Argentina to further diversify its export base instead of relying
on its import tariffs.

Brazil. Brazilian policy makers' Asian crisis management capabilities were
impressive as Brazil took several steps to defend its currency, the real, from
attack. First, they doubled interest rates, draining liquidity from the system,
and second, President Cardoso proposed, and then passed, a series of fiscal
measures designed to lend credibility to Brazil's monetary policy and improve
the current account deficit. These steps were implemented over a very short time
frame and despite significant political consequences. Finally, Brazil made
significant advances on the structural reform agenda, including pushing forward
with their privatization plan. While the crisis in Asia leaves prospects for
another year of significant economic growth in doubt, they remove uncertainty
surrounding the political commitment to stabilization and reform.

Colombia. The Clinton administration released the list of countries that it does
not consider being partners in its fight against drugs. Although the Colombian
government was not, in essence, 'certified', economic sanctions were lifted (via
a 'national interest waiver'), to allow for continued cooperation between the
U.S. and Colombian governments.

Ecuador. Despite Ecuador's relative outperformance in November, the country
continues to be unimpressive in its ability to institute reform measures.
Specifically, the government delayed the auction of a 35% stake in state-owned
telephone company EMETEL.

Mexico. Mexico's executive branch submitted a 1998 budget proposal to Congress
calling for no tax cuts and a fiscal deficit equivalent to 1.25% of GDP.
Subsequently, opposition legislators stated that they will push for tax cuts and
increases in public spending, while at the same time maintaining the fiscal
deficit at or below 1.5% of GDP. In addition, open unemployment figures were
released, showing a jobless rate of 3.6% in January -- the rate for December was
2.8%.

Panama. Panama retired US$600 million of outstanding Brady debt and
simultaneously issued a 30-year global bond. It also sold US$100 million of the
global bond for cash. The exchange allowed Panama to improve its debt structure
and offer investors a long duration pure sovereign risk security. The exchange
also enabled the country to realize some savings.

Peru. S&P gave Peru a BB rating on its long-term foreign currency deposits with
a stable outlook. The agency views the rating as supported by successful
structural reforms implemented over the past seven years as well as cautious
fiscal management. Shortly after the issuance of S&P's rating, Moody's updated
the outlook for Peru from stable to positive, citing conservative fiscal and
monetary policies and widespread structural reforms as evidence for improved
growth prospects.

GLOBAL PARTNERS INCOME FUND INC.

Venezuela. Venezuela is less reliant upon the international capital markets than
the majority of Latin American countries due in large part to its enormous oil
reserves. The country enjoys a current account surplus of 7% of GDP and the
government has no need to resort to external financing in 1998. As a result, it
was our contention that Venezuela would be somewhat insulated from the market
volatility that was expected to exist going forward. Additionally with regard to
Venezuela, Congress approved the privatization plan of the aluminum sector,
which the government hopes will bring in US$2 billion from the sale of a 70%
stake in four aluminum companies. In the face of slumping oil prices,
privatization proceeds will be the saving grace for the government's finances
for 1998.

EASTERN EUROPE

Bulgaria. Moody's upgraded Bulgaria's foreign currency rating to B2 from B3,
citing improved credit risk with the election of a reform-oriented government
and establishment of a credit board. Additionally, the IMF approved the fourth
tranche of a US$510 million standby loan. The upgrade puts Bulgaria on par with
Peru and one notch below Brazil and Ecuador.

Russia. Following the Asian crisis, Russia was one of the most scrutinized and
volatile credits as its currency, the ruble, is pegged to the U.S. dollar and
investors feared it would be forced to devalue. In addition, the deterioration
of Russia's fiscal accounts as a result of the capital flight and a
deterioration in the price of oil which is a major export, caused S&P to lower
its outlook for Russia's long-term foreign debt to negative from stable, while
maintaining the rating at BB-. On a positive note, negotiations between the
Russian government and the IMF are continuing with regard to the release of the
next tranche of its Extended Fund Facility loan which began in 1996 to help
Russia face problems surrounding its implementation of reforms.

U.S. HIGH-YIELD SECURITIES

Although the economy was expected to slow as a result of the fourth quarter
Asian crisis, corporate earnings and credit quality were generally very good and
supported spread tightening during the six months ended February 27, 1998. The
market was initially down during late October, as Asian markets tumbled.
However, few bonds traded and the market recovered almost completely in a few
short weeks. The market's firmness appeared to be due to several factors,
including: 1) a high level of cash in the market, 2) a strong rally in the U.S.
Treasury market and 3) a belief that the economy will slow, but no recession
will materialize, keeping fundamental credit quality fairly healthy.

The U.S. high-yield market's healthy increase was fueled by strong demand from
both retail and institutional buyers. High-yield mutual funds were aggressive
buyers, as they experienced record inflows during the period. Collateralized
Bond Obligations (CBOs), insurance companies, pension funds, and other
institutional buyers have also been active participants.

Technology, utilities, gaming, and telecommunications were the outperforming
industries during the six months ended February 27, 1998. Consumer cyclicals,
basic industries and manufacturing lagged during the same period, as investors
feared an economic slowdown would negatively affect the earnings outlook of
companies in these major industry classifications. Also included in the list of
underperformers was energy, which lagged due to the significant decline in oil
prices during the period.

GLOBAL PARTNERS INCOME FUND INC.

ANNUAL SHAREHOLDERS AND SPECIAL MEETINGS

The Fund held a special meeting on October 14, 1997 and its annual shareholders
meeting on January 15, 1998. At the special meeting on October 14, 1997,
shareholders approved a new investment management agreement between Value
Advisors LLC ('Value Advisors') and the Fund and a new investment advisory and
administration agreement among Value Advisors, Salomon Brothers Asset Management
Inc ('SBAM') and the Fund. The new agreement took effect upon the closing of the
sale of Value Advisors by Oppenheimer Group Inc. to PIMCO Advisors L.P., which
occurred on November 4, 1997. At the annual meeting on January 15, 1998,
shareholders approved a new investment advisory and administration agreement
among Value Advisors, SBAM and the Fund, elected each of the nominees proposed
for election to the Fund's Board of Directors and ratified the selection of
Price Waterhouse LLP as the independent accountants of the Fund. Approval of the
agreement was necessary due to the merger of Salomon Inc, which had been the
ultimate parent company of SBAM, with and into Smith Barney Holdings Inc., a
subsidiary of Travelers Group Inc., which occurred on November 28, 1997.
Travelers is now the ultimate parent company of SBAM. The following table
provides information concerning the matters voted on at the meetings:

OCTOBER 14, 1997

1. Approval of a new investment management agreement between Value Advisors
and the Fund.

<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST VOTES ABSTAINED UNVOTED
- ----------- ------------- --------------- ---------
<S> <C> <C> <C>
11,520,553 156,517 299,144 1,682,832
</TABLE>

2. Approval of a new investment advisory and administration agreement among
Value Advisors, SBAM and the Fund.

<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST VOTES ABSTAINED UNVOTED
- ----------- ------------- --------------- -------
<S> <C> <C> <C>
13,213,086 165,729 280,223 8
</TABLE>

JANUARY 15, 1998

1. Approval of a new investment advisory and administration agreement among
Value Advisors, SBAM and the Fund.

<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST VOTES ABSTAINED UNVOTED
- ----------- ------------- --------------- -------
<S> <C> <C> <C>
13,045,341 112,446 260,349 232,266
</TABLE>

2. Election of directors.

<TABLE>
<CAPTION>
NOMINEES VOTES FOR VOTES WITHHELD
- -------------------- ---------- --------------
<S> <C> <C>
Michael S. Hyland* 13,547,023 103,379
Jeswald W. Salacuse 13,533,365 117,037
William D. Cvengros 13,544,501 105,901
</TABLE>

* Mr. Hyland subsequently resigned from the Board of Directors.

3. Ratification of Price Waterhouse LLP as the Independent Accountants of
the Fund.

<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST VOTES ABSTAINED UNVOTED
- ----------- ------------- --------------- -------
<S> <C> <C> <C>
13,422,569 52,736 175,095 2
</TABLE>

GLOBAL PARTNERS INCOME FUND INC.

In a continuing effort to provide timely information concerning Global Partners
Income Fund Inc., shareholders may call 1-888-777-0102 (a toll-free number),
Monday through Friday from 8:00 am to 6:00 pm EST for the Fund's net asset
value, market price and other information regarding the Fund's portfolio
holdings and allocations. Should you require specific information regarding your
Global Partners Income Fund Inc. stock account, or for information regarding the
Fund'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).

Cordially,

WILLIAM D. CVENGROS HEATH B. MCLENDON

William D. Cvengros Heath B. McLendon
Co-Chairman of the Board Co-Chairman of the Board

GLOBAL PARTNERS INCOME FUND INC.
- ------------------------
Statement of Investments
February 27, 1998 (unaudited)

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) Corporate Bonds -- 66.5% (NOTE 2)
- -----------------------------------------------------------------------------------------------------------
<C> <S> <C>

Basic Industries -- 5.7%

$ 1,500 APP International Finance, 11.75%, 10/01/05(C)................................ $ 1,350,000

2,000 Berry Plastics, 12.25%, 4/15/04(C)............................................ 2,210,000

1,000 Envirosource Inc., 9.75%, 6/15/03(C).......................................... 1,025,000

500 Envirosource Inc., 9.75%, 6/15/03(C)(W)....................................... 512,500

1,000 Glencore Nickel, 9.00%, 12/01/14(W)........................................... 985,000

1,000 Printpack Inc., 10.625%, 8/15/06(C)........................................... 1,072,500

2,000 Radnor Holdings, 10.00%, 12/01/03............................................. 2,110,000

2,000,000 Units Stone Container Corp., 12.25%, 4/01/02@....................................... 2,042,500

1,000 Tekni-Plex Inc., 11.25%, 4/01/07.............................................. 1,115,000
------------
12,422,500
------------
Consumer Cyclicals -- 3.1%

2,000 Cole National Group, 8.625%, 8/15/07.......................................... 2,030,000

2,000 Collins & Aikman, 10.00%, 1/15/07(C).......................................... 2,080,000

1,500 HMH Properties Inc., 8.875%, 7/15/07.......................................... 1,578,750

1,000 Synthetic Industries, 9.25%, 2/15/07(C)....................................... 1,055,000
------------

6,743,750
------------
Consumer Non-Cyclicals -- 15.5%

1,500 Ameristar Casinos Inc., 10.50%, 8/01/04(C).................................... 1,582,500

2,000 B&G Foods Inc., 9.625%, 8/01/07(C)(W)......................................... 2,058,750

2,000 Carr-Gottstein Foods Co., 12.00%, 11/15/05(C)................................. 2,230,000

2,000 CFP Holdings Inc., 11.625%, 1/15/04(C)........................................ 1,985,000

1,000 Dade International Inc., 11.125%, 5/01/06(C).................................. 1,120,000

1,000 Doane Products Company, 10.625%, 3/01/06(C)................................... 1,100,000

1,000 Genesis Eldercare, 9.00%, 8/01/07(W).......................................... 1,025,000

2,250 Hines Horticulture, 11.75%, 10/15/05(C)....................................... 2,497,500

1,500 Horseshoe Gaming, 9.375%, 6/15/07............................................. 1,612,500

1,000 Imperial Holly Corp., 9.75%, 12/15/07(W)...................................... 1,030,000

1,500 Integrated Health Services, 9.25%, 1/15/08.................................... 1,563,750

1,900 North Atlantic Trading, 11.00%, 6/15/04....................................... 1,995,000

1,500 Plastic Specialty, 11.25%, 12/01/03(C)........................................ 1,620,000

1,000 Pueblo XTRA International, 9.50%, 8/01/03..................................... 940,000

1,000 Pueblo XTRA International, Series C, 9.50%, 8/01/03........................... 937,500
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.

PAGE 1

GLOBAL PARTNERS INCOME FUND INC.
- ------------------------
Statement of Investments (continued)
February 27, 1998 (unaudited)

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) Corporate Bonds (continued) (NOTE 2)
- --------------------------------------------------------------------------------------------------------------
<C> <S> <C>
Consumer Non-Cyclicals -- 15.5% (concluded)
$ 1,298 Rayovac Corp., 10.25%, 11/01/06(C)............................................ $ 1,434,290

3,000 Revlon Worldwide, Zero Coupon, 3/15/01(C)..................................... 2,212,500

1,500 Riddell Sports Inc., 10.50%, 7/15/07.......................................... 1,590,000

900 SC International Services, 9.25%, 9/01/07(C).................................. 945,000

1,000 Selmer Co. Inc., 11.00%, 5/15/05(C)........................................... 1,090,000

1,000 Shop Vac Corp., 10.625%, 9/01/03(C)........................................... 1,095,000

1,550 Stroh Brewery, 11.10%, 7/01/06(C)............................................. 1,170,250

946 Waterford Gaming LLC, 12.75%, 11/15/03........................................ 1,050,060
------------
33,884,600
------------
Energy -- 8.2%

1,000 Belco Oil & Gas, Series B, 8.875%, 9/15/07(C)................................. 1,025,000

2,000 Cliffs Drilling, 10.25%, 5/15/03(C)........................................... 2,160,000

1,000 Dailey International Inc., 9.50%, 2/15/08(W).................................. 1,000,000

1,500 Hvide Marine Inc., 8.375%, 2/15/08(W)......................................... 1,477,500

1,000 KCS Energy Inc., 11.00%, 1/15/03.............................................. 1,102,500

1,000 Magnum Hunter, 10.00%, 6/01/07................................................ 990,000

2,000 National Energy Group, 10.75%, 11/01/06....................................... 2,060,000

2,000 Parker Drilling Corp., 9.75%, 11/15/06(C)..................................... 2,160,000

1,500 Snyder Oil Corp., 8.75%, 6/15/07.............................................. 1,515,000

500 TransAmerican Energy, 11.50%, 6/15/02......................................... 506,875

2,000 TransAmerican Energy, Zero Coupon until 6/15/99 (13.00% thereafter),
6/15/02..................................................................... 1,680,000

2,000 United Refining, 10.75%, 6/15/07.............................................. 2,130,000
------------
17,806,875
------------
Financial -- 2.5%

1,000 Airplanes Pass Through Trust, 10.875%, 3/15/19(C)............................. 1,125,000

1,500 Units DTI Holdings Inc., Zero Coupon until 3/01/03 (12.50% thereafter), 3/01/08(D).. 813,750

2,000 Morgan Stanley Aircraft Finance, Series 1A, Class D1, 8.70%, 3/15/23(W)....... 1,990,000

1,500 Williams Scotsman Inc., 9.875%, 6/01/07....................................... 1,575,000
------------
5,503,750
------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.

PAGE 2

GLOBAL PARTNERS INCOME FUND INC.
- ------------------------
Statement of Investments (continued)
February 27, 1998 (unaudited)

$ 1,000 Alvey Systems Inc., 11.375%, 1/31/03(C)....................................... $ 1,072,500

1,500 Axiohm Transaction Solution, 9.75%, 10/01/07(C)(W)............................ 1,533,750

1,250 Burke Industries Inc., 10.00%, 8/15/07(C)..................................... 1,337,500

1,500 Clark-Schwebel Inc., 10.50%, 4/15/06(C)....................................... 1,650,000

2,000 Foamex L.P., 9.875%, 6/15/07.................................................. 2,062,500

1,000 Glasstech Inc., 12.75%, 7/01/04............................................... 1,002,500

1,900 High Voltage Engineering, 10.50%, 8/15/04..................................... 2,018,750

1,000 Insilco Corp., 10.25%, 8/15/07................................................ 1,060,000

1,000 Jordan Industries, 10.375%, 8/01/07(C)........................................ 1,027,500

1,000 Jordan Telecom Products, Zero Coupon until 8/01/00 (11.75% thereafter),
8/01/07..................................................................... 855,000

2,000 L-3 Comms Corp., 10.375%, 5/01/07............................................. 2,215,000

2,000 Navistar International, 8.00%, 2/01/08(W)..................................... 2,020,000

1,334 Terex Corp., 13.25%, 5/15/02(C)............................................... 1,547,440

500 Venture Holdings Trust, 9.50%, 7/01/05........................................ 520,000

1,885 Venture Holdings Trust, 9.75%, 4/01/04........................................ 1,932,125
------------
21,854,565
------------
Media/Telecommunications -- 13.9%

1,250 Adelphia Communications, 9.875%, 3/01/07(C)................................... 1,359,375

1,500 American Media Operations, Inc., 11.625%, 11/15/04(C)......................... 1,635,000

750 Big Flower Press, 8.875%, 7/01/07(C)(W)....................................... 772,500

2,000 Cablevision Systems Corp., 10.50%, 5/15/16(C)................................. 2,320,000

4,000 Century Communications, Zero Coupon, 1/15/08(W)............................... 1,700,000

1,050 Diamond Cable Co., Zero Coupon until 12/15/00 (11.75% thereafter),
12/15/05(C)................................................................. 803,250

1,500 Garden State Newspapers, 8.75%, 10/01/09(C)(W)................................ 1,552,500

2,000 Granite Broadcasting, 10.375%, 5/15/05(C)..................................... 2,155,000

6,000 Hollinger Inc., Convertible Bond, Zero Coupon, 10/05/13....................... 2,332,500

1,750 ICG Holding Inc., Zero Coupon until 9/15/00 (13.50% thereafter), 9/15/05(C)... 1,452,500

2,000 Intermedia Communications of Florida, Zero Coupon until 5/15/01 (12.50%
thereafter), 5/15/06........................................................ 1,615,000

2,000 Lin Television Corp., 8.375%, 3/01/08(W)...................................... 1,990,000

3,500 Marcus Cable Co., Zero Coupon until 6/15/00 (14.25% thereafter), 12/15/05(C).. 3,123,750

1,500 Nextel Communications, Zero Coupon until 2/15/99 (9.75% thereafter),
8/15/04..................................................................... 1,432,500

750 Nextel Communications, Zero Coupon until 2/15/03 (9.95% thereafter),
2/15/08(W).................................................................. 461,250

2,500 NTL Inc., Zero Coupon until 2/01/01 (11.50% thereafter), 2/01/06.............. 2,000,000
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.

PAGE 3

GLOBAL PARTNERS INCOME FUND INC.
- ------------------------
Statement of Investments (continued)
February 27, 1998 (unaudited)

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) Corporate Bonds (concluded) (NOTE 2)
- --------------------------------------------------------------------------------------------------------------
<C> <S> <C>
Media/Telecommunications -- 13.9% (concluded)
$ 2,000 Rogers Communications, 8.875%, 7/15/07(C)..................................... $ 2,010,000

1,500 SFX Broadcasting, 10.75%, 5/15/06(C).......................................... 1,680,000
------------
30,395,125
------------
Services/Other -- 3.2%

2,200 Allied Waste Industries, Zero Coupon until 6/01/02 (11.30% thereafter),
6/01/07(C).................................................................. 1,606,000

2,000 Borg-Warner Security Corp., 9.125%, 5/01/03(C)................................ 2,030,000

1,000 Dyncorp Inc., 9.50%, 3/01/07(C)............................................... 1,020,000

1,000 Intertek Finance PLC, 10.25%, 11/01/06........................................ 1,050,000

1,000 Norcal Waste Systems, 13.50%, 11/15/05........................................ 1,165,000
------------
6,871,000
------------
Technology/Electronics -- 1.6%

900 Amphenol Corp., 9.875%, 5/15/07(C)............................................ 963,000

900 Units DecisionOne Corp., Zero Coupon until 8/01/02 (11.50% thereafter), 8/01/08(P).. 553,500

2,000 Unisys Corp., 7.875%, 4/01/08................................................. 2,010,000
------------
3,526,500
------------
Transportation -- 1.5%

1,000 Atlantic Express, 10.75%, 2/01/04(C).......................................... 1,085,000

2,000 TFM Sa De Cv, Zero Coupon until 6/15/02 (11.75% thereafter), 6/15/09(W)....... 1,285,000

750 TFM Sa De Cv, 10.25%, 6/15/07(W).............................................. 781,875
------------
3,151,875
------------
Utilities -- 1.3%

1,000 AES China Generating Co., 10.125%, 12/15/06(C)................................ 935,000

1,250 AES Corp., 10.25%, 7/15/06(C)................................................. 1,381,250

500 Companhia Energetica De Sao Paul, 9.125% until 6/26/02 (9.625% thereafter),
6/26/07(W).................................................................. 486,875
------------
2,803,125
------------

Total Corporate Bonds (cost $138,366,198)..................................... 144,963,665
------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.

PAGE 4

GLOBAL PARTNERS INCOME FUND INC.
- ------------------------
Statement of Investments (continued)
February 27, 1998 (unaudited)

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) Sovereign Bonds -- 52.1% (NOTE 2)
- ----------------------------------------------------------------------------------------------------------
<C> <S> <C>
Argentina -- 11.8%

$ 2,682 Republic of Argentina, BOCON Pre 2, 5.61458%, 4/01/01*........................ $ 2,489,789

9,750 Republic of Argentina, Bonos Del Tesoro, 8.75%, 5/09/02....................... 9,530,625

8,640 Republic of Argentina, FRB, Series L, 6.6875%, 3/31/05*,(C)................... 7,873,200

3,400 Republic of Argentina, Global Bond, 11.00%, 10/09/06(C)....................... 3,816,500

2,500 Republic of Argentina, Par Bond, Series L-GP, 5.50%, 3/31/23*,(C)............. 1,900,000
------------
25,610,114
------------
Brazil -- 8.1%

8,687 Federal Republic of Brazil, C Bond, 8.00%, 4/15/14(C)(X)...................... 7,046,971

4,000 Federal Republic of Brazil, Global Bond, 10.125%, 5/15/27(C).................. 3,891,000

8,250 Federal Republic of Brazil, NMB, Series L, 6.75%, 4/15/09*,(C)................ 6,780,469
------------
17,718,440
------------
Bulgaria -- 1.4%

500 Republic of Bulgaria, FLIRB, Series A, 2.25%, 7/28/12*........................ 324,063

3,500 Republic of Bulgaria, IAB, 6.5625%, 7/28/11*,(C).............................. 2,688,438
------------
3,012,501
------------
Costa Rica -- 6.1%
7,000 Costa Rica, Principal Bond, Series A, 6.25%, 5/21/10##........................ 6,160,000
8,500 Costa Rica, Principal Bond, Series B, 6.25%, 5/21/15##........................ 7,055,000
------------
13,215,000
------------
Ecuador -- 2.4%
7,999 Republic of Ecuador, PDI Bond, 6.625%, 2/27/15*,(C)(X)........................ 5,131,844
------------
Ivory Coast -- 0.3%
2,000 Ivory Coast, FLIRB*,#......................................................... 690,630
------------
Mexico -- 2.8%
5,000 United Mexican States, Global Bond, 11.50%, 5/15/26........................... 6,127,500
------------
Panama -- 4.8%
5,980 Republic of Panama, Global Bond, 8.875%, 9/30/27(C)........................... 5,897,775
4,000 Republic of Panama, IRB, 3.75%, 7/17/14*...................................... 3,130,000
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.

PAGE 5

GLOBAL PARTNERS INCOME FUND INC.
- -------------------------------------------------
Statement of Investments (continued)
February 27, 1998 (unaudited)

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
(000) Sovereign Bonds (concluded) (NOTE 2)
- ----------------------------------------------------------------------------------------------------------
<C> <S> <C>
Panama -- 4.8% (concluded)
$ 1,844 Republic of Panama, PDI Bond, 6.5625%, 7/17/16*,(X)........................... $ 1,523,612
------------
10,551,387
------------
Peru -- 2.6%
9,500 Republic of Peru, FLIRB, 3.25%, 3/07/17*,(C).................................. 5,747,500
------------
Poland -- 1.2%
3,000 Republic of Poland, PDI Bond, 4.00%, 10/27/14*,(C)............................ 2,675,625
------------
Russia -- 3.4%
3,100 Russia, Global Bond, 10.00%, 6/26/07.......................................... 2,872,344
6,617 Russia, IAN, 6.71875%, 12/15/15*,(w).......................................... 4,541,101
------------
7,413,445
------------
Venezuela -- 7.2%
17,619 Republic of Venezuela, DCB Trust, Series DL, 6.8125%, 12/18/07*,(C)........... 15,758,036
------------
Total Sovereign Bonds (cost $106,851,477)..................................... 113,652,022
------------
Loan Participations -- 13.8%
- ----------------------------------------------------------------------------------------------------------
Kingdom of Morocco, Tranche B, 6.65625%, 1/01/04* (Morgan Guaranty Trust
Company of New York, Morgan Stanley Emerging Markets Inc.)(T)............... 20,022,350
21,882
Russia, Principal Loan, 6.71875%, 12/15/20* (Chase Manhattan, Bank of America,
ING Securities, Union Bank of Switzerland)(T)(Y)............................ 8,125,394
13,675
The People's Democratic Republic of Algeria, Tranche A, 7.00%, 9/04/06* (Chase
2,300 Manhattan)(T)............................................................... 1,913,312
------------

Total Loan Participations (cost $30,148,445).................................. 30,061,056
------------
Preferred Stock -- 0.4%
- ----------------------------------------------------------------------------------------------------------
1,000,000 APP Finance (II) Mauritius Limited, Series A, 12.00%* (cost $1,000,000)....... 760,000
shares ------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.

PAGE 6

GLOBAL PARTNERS INCOME FUND INC.
- -------------------------------------------------
Statement of Investments (continued)
February 27, 1998 (unaudited)

<TABLE>
<CAPTION>
VALUE
Warrants & Rights(a) -- 0.1% (NOTE 2)
- ----------------------------------------------------------------------------------------------------------
<C> <S> <C>
1,000 Glasstech Inc. (Exercise Price of $.01 per share expiring on 6/30/04. Each
Warrants warrant exercisable for .125 shares of common stock.)....................... $ 1,250

5,000 In Flight Phone (Exercise price of $.01 per share expiring on 8/31/02. Each
Warrants warrant exercisable for one share of common stock.)......................... 0

8,000 Terex Corporation Stock Appreciation Rights (Expiring on 5/15/02)............. 128,000
Rights

6,000 United International Holdings (Exercise price of $15 per share expiring on
Warrants 11/15/99. Each warrant exercisable for 4.535 shares of common stock.)....... 72,000

3,000 Wireless One Inc. (Exercise price of $11.55 per share. Each warrant
Warrants exercisable for one share of common stock.)................................. 3,000
------------
Total Warrants & Rights (cost $152,964)....................................... 204,250
------------

<CAPTION>
PRINCIPAL
AMOUNT
(000) Repurchase Agreement -- 2.1%
- ----------------------------------------------------------------------------------------------------------
<C> <S> <C>
Merrill Lynch, 5.60%, cost $4,657,000 dated 2/27/98, $4,659,173 due 3/02/98,
(collateralized by $4,690,000 U.S. Treasury Notes, 5.625%, due 11/30/98,
$ 4,657 valued at $4,754,488)....................................................... 4,657,000
------------

Total Investments -- 135.0% (cost $281,176,084).............................. 294,297,993
------------

Liabilities in Excess of Other Assets -- (35.0%)............................. (76,286,555)
------------
Net Assets -- 100.0%
(equivalent to $15.00 per share on 14,535,853 common shares outstanding).... $218,011,438
------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.

PAGE 7

GLOBAL PARTNERS INCOME FUND INC.
- ------------------------
Statement of Investments (concluded)
February 27, 1998 (unaudited)

- --------------------------------------------------------------------------------

* Rate shown reflects current rate on instrument with variable rate or step
coupon rates.

(D) Each unit is comprised of a $1,000 par Senior Note due 3/01/08 and 5
warrants, each warrant to purchase 7.76 shares of common stock.

(P) Each unit is comprised of a $1,000 par Senior Note due 8/01/08 and a
warrant to purchase 1.9 shares of common stock at $23 per share expiring
8/01/07.

(W) Pursuant to Rule 144A under the Securities Act of 1933, this security can
only be sold to qualified institutional investors.

(X) Payment-in-kind security for which all or part of the income earned is
capitalized as additional principal.

(Y) Portion of income earned is capitalized as Russia Interest in Arrears
Notes.

@ Each unit is comprised of a $1 par 10.75% Senior Debenture Note due 4/01/02
and a 1.50% Supplemental Interest Certificate.

# 'When and if issued' security.

## Securities valued at $13,215,000 as of February 27, 1998 were segregated to
be available for the purchase of 'when and if issued' securities with a
cost of $791,500.

(T) Participation interests were acquired through the financial institutions
indicated parenthetically.

(a) Non-income producing securities.

BOCON -- Bonos De Consolidacion.

DCB -- Debt Conversion Bond.

FLIRB -- Front Loaded Interest Reduction Bond.

FRB -- Floating Rate Bond.

IAB -- Interest in Arrears Bond.

IAN -- Interest in Arrears Note.

IRB -- Interest Reduction Bond.

NMB -- New Money Bond.

PDI -- Past Due Interest.

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.

PAGE 8

GLOBAL PARTNERS INCOME FUND INC.
- -----------------------------------
Statement of Assets and Liabilities
February 27, 1998 (unaudited)

<TABLE>
<S> <C>
ASSETS
Investments, at value (cost -- $281,176,084).................................................. $294,297,993
Cash.......................................................................................... 46,421
Interest receivable........................................................................... 5,645,560
Unamortized organization expenses (Note 2).................................................... 14,767
Prepaid expenses.............................................................................. 27,097
------------
Total assets.......................................................................... 300,031,838
------------
LIABILITIES
Loan payable (Note 5)......................................................................... 75,000,000
Payable for investments purchased............................................................. 4,789,160
Accrued interest expense on loan (Note 5)..................................................... 1,962,891
Accrued management fee (Note 3)............................................................... 175,997
Accrued audit and tax return preparation fees................................................. 38,353
Accrued custodian expense..................................................................... 23,170
Other accrued expenses........................................................................ 30,829
------------
Total liabilities..................................................................... 82,020,400
------------
NET ASSETS
Common Stock ($.001 par value, 100,000,000 shares authorized; 14,535,853 shares
outstanding)................................................................................ 14,536
Additional paid-in capital.................................................................... 203,017,899
Undistributed net investment income........................................................... 173,845
Accumulated net realized gain on investments.................................................. 1,683,249
Net unrealized appreciation on investments.................................................... 13,121,909
------------
Net assets............................................................................ $218,011,438
------------
NET ASSET VALUE PER SHARE ($218,011,438[div]14,535,853 shares)................................ $ 15.00
------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.

PAGE 9

GLOBAL PARTNERS INCOME FUND INC.
- -----------------------
Statement of Operations
For the Six Months Ended February 27, 1998 (unaudited)

<TABLE>
<S> <C> <C>
INVESTMENT INCOME
INCOME
Interest (includes discount accretion of $2,763,686)....................... $ 14,792,887
EXPENSES
Interest expense (Note 5).................................................. $2,361,329
Management fee (Note 3).................................................... 1,216,933
Custodian.................................................................. 41,521
Audit and tax services..................................................... 34,520
Legal...................................................................... 27,122
Transfer agent............................................................. 21,674
Directors' fees and expenses (Note 3)...................................... 16,475
Listing fee................................................................ 11,952
Amortization of deferred organization expenses (Note 2).................... 10,984
Printing................................................................... 10,849
Shareholder annual meeting................................................. 8,384
Other...................................................................... 8,452 3,770,195
---------- ------------
Net investment income.......................................................... 11,022,692
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net Realized Gain on Investments............................................... 8,012,255
Change in Net Unrealized Appreciation on Investments........................... (11,103,821)
------------
Net realized gain and change in net unrealized appreciation on investments..... (3,091,566)
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS..................................... $ 7,931,126
------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.

PAGE 10

GLOBAL PARTNERS INCOME FUND INC.
- ----------------------------------
Statement of Changes in Net Assets

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED FOR THE
FEBRUARY 27, YEAR ENDED
1998 AUGUST 31,
(UNAUDITED) 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income................................................. $ 11,022,692 $ 22,562,401
Net realized gain on investments...................................... 8,012,255 18,834,581
Change in net unrealized appreciation on investments.................. (11,103,821) 16,819,689
----------------- ------------
Net increase in net assets from operations............................ 7,931,126 58,216,671
----------------- ------------
DIVIDENDS AND DISTRIBUTIONS
From net investment income............................................ (13,112,480) (24,879,757)
From net realized gain................................................ (11,968,385) --
----------------- ------------
(25,080,865) (24,879,757)
----------------- ------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares issued in reinvestment of dividends
(28,719 and 0 shares issued)........................................ 426,325 --
----------------- ------------
Total increase (decrease) in net assets............................... (16,723,414) 33,336,914
----------------- ------------
NET ASSETS
Beginning of period................................................... 234,734,852 201,397,938
----------------- ------------
End of period (includes undistributed net investment income of
$173,845 and $2,263,633, respectively).............................. $218,011,438 $234,734,852
----------------- ------------
</TABLE>

- -----------------------
Statement of Cash Flows
For the Six Months Ended February 27, 1998 (unaudited)

<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Purchases of portfolio securities......................................................... $(236,363,557)
Proceeds from sales of portfolio securities and principal paydowns........................ 254,476,034
Net purchases of short-term investments................................................... (1,915,000)
-------------
16,197,477
Net investment income..................................................................... 11,022,692
Accretion of discount on investments...................................................... (2,763,686)
Capitalized income on payment-in-kind securities.......................................... (454,018)
Amortization of organization expenses..................................................... 10,984
Net change in receivables/payables related to operations.................................. 687,067
-------------
Net cash provided by operating activities............................................. 24,700,516
-------------
CASH FLOWS USED BY FINANCING ACTIVITIES:
Common stock dividends paid............................................................... (24,654,540)
-------------
Net cash used by financing activities................................................. (24,654,540)
-------------
Net increase in cash.......................................................................... 45,976
Cash at beginning of period................................................................... 445
-------------
CASH AT END OF PERIOD......................................................................... $ 46,421
-------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.

PAGE 11

GLOBAL PARTNERS INCOME FUND INC.
- -----------------------------
Notes to Financial Statements
(unaudited)

Note 1. Organization

Global Partners Income Fund Inc. (the 'Fund') was incorporated in Maryland on
September 3, 1993 and is registered as a non-diversified, closed-end, management
investment company under the Investment Company Act of 1940, as amended. The
Fund commenced operations on October 29, 1993. The Fund seeks to maintain a high
level of current income by investing primarily in a portfolio of high-yield U.S.
and non-U.S. corporate debt securities and high-yield foreign sovereign debt
securities. As a secondary objective, the Fund seeks capital appreciation.

Note 2. Significant Accounting Policies

The following is a summary of significant accounting policies consistently
followed by the Fund 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 results could differ
from those estimates.

SECURITIES VALUATION. In valuing the Fund'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 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. Securities may also be valued by 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.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Investment transactions are
recorded on the trade date. Interest income is accrued on a daily basis. Market
discount on securities purchased is accreted on an effective yield basis over
the life of the security. The Fund uses the specific identification method for
determining realized gain or loss on investments sold.

PAGE 12

GLOBAL PARTNERS INCOME FUND INC.
- -----------------------------
Notes to Financial Statements (continued)
(unaudited)

FEDERAL INCOME TAXES. The Fund 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 all of its
income and capital gains, if any, to its shareholders. Therefore, no federal
income tax or excise tax provision is required.

DIVIDENDS AND DISTRIBUTIONS. The Fund declares and pays dividends to
shareholders monthly from net investment income. Net realized gains, if any, in
excess of loss carryovers (See Note 4) 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. These differences are due primarily to
deferral of wash sale and post-October losses. Dividends which exceed net
investment income for financial reporting purposes but not for tax purposes are
reported as dividends in excess of net investment income.

UNAMORTIZED ORGANIZATION EXPENSES. Organization expenses amounting to $113,655
were incurred in connection with the organization of the Fund. These costs have
been deferred and are being amortized ratably over a five-year period from
commencement of operations.

REPURCHASE AGREEMENTS. When entering into repurchase agreements, it is the
Fund'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 during the term of the repurchase agreement to ensure that it equals or
exceeds the repurchase price. In the event of default of the obligation to
repurchase, the Fund 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.

CASH FLOW INFORMATION. The Fund invests in securities and distributes
dividends from net investment income and net realized gains from investment
transactions. These activities are reported in the Statement of Changes in Net
Assets. 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 premium or accreting discount on debt obligations. For the six months
ended February 27, 1998, the Fund paid interest expense of $2,430,469.

Note 3. Management and Advisory Fees and Other Transactions

The Fund has entered into a management agreement with Value Advisors LLC (the
'Investment Manager'), a subsidiary of PIMCO Advisors L.P., pursuant to which
the Investment Manager, among other things, supervises the Fund's investment
program and monitors the performance of the Fund's service providers. The
agreement with the Investment Manager was approved by

PAGE 13

GLOBAL PARTNERS INCOME FUND INC.
- -----------------------------
Notes to Financial Statements (continued)
(unaudited)

shareholders at a special meeting held on October 14, 1997, and has been in
effect since the closing of the sale of the Investment Manager by Oppenheimer
Group Inc. to PIMCO Advisors L.P., which occurred on November 4, 1997. The
Investment Manager was the transferee of the investment management
responsibilities for the Fund which were previously provided by Advantage
Advisers, Inc.

The Investment Manager and the Fund have entered into an investment advisory and
administration agreement with Salomon Brothers Asset Management Inc (the
'Investment Adviser'), an indirect wholly-owned subsidiary of Travelers Group
Inc. ('Travelers'), pursuant to which the Investment Adviser provides investment
advisory and administrative services to the Fund. The Investment Adviser is
responsible on a day-to-day basis for the management of the Fund's portfolio in
accordance with the Fund's investment objectives and policies and for making
decisions to buy, sell, or hold particular securities and is responsible for
day-to-day administration of the Fund. The agreement with the Investment Adviser
was most recently approved by shareholders at an annual meeting held on January
15, 1998. Approval of the agreement was necessary due to the merger of Salomon
Inc., which had been the ultimate parent company of the Investment Adviser, with
and into Smith Barney Holdings Inc., a subsidiary of Travelers, which occurred
on November 28, 1997.

The Fund pays the Investment Manager a monthly fee at an annual rate of 1.10% of
the Fund's average weekly net assets for its services, out of which the
Investment Manager pays the Investment Adviser a monthly fee at an annual rate
of .65% of the Fund's average weekly net assets for its services.

At February 27, 1998, the Investment Adviser owned 4,587 shares of the Fund.

Certain officers and/or directors of the Fund are also officers and/or directors
of the Investment Manager or the Investment Adviser.

The Fund pays each Director not affiliated with the Investment Manager or the
Investment Adviser a fee of $5,000 per year, $700 for attendance at each board
meeting, $100 for participation in each telephonic meeting and reimbursement for
travel and out-of-pocket expenses for each board and committee meeting attended.

Note 4. Portfolio Activity

Purchases and sales of investment securities, other than short-term investments,
for the six months ended February 27, 1998, aggregated $233,395,967 and
$245,343,354, respectively. The federal income tax cost basis of the Fund's
investments at February 27, 1998 was substantially the same as the cost basis
for financial reporting. Gross unrealized appreciation and depreciation amounted

PAGE 14

GLOBAL PARTNERS INCOME FUND INC.
- -----------------------------
Notes to Financial Statements (continued)
(unaudited)

to $15,317,940 and $2,196,031, respectively, resulting in net unrealized
appreciation for federal income tax purposes of $13,121,909.

In the year ended August 31, 1997, the Fund utilized a capital loss carryforward
of $12,899,400 to offset net realized capital gains.

Note 5. Bank Loan

The Fund has outstanding a $75,000,000 loan pursuant to a secured loan agreement
with ING Baring (U.S.) Capital Corporation. The current interest rate on the
loan is equal to six-month LIBOR plus 0.4375% and the maturity date is April 1,
1998. The collateral for the loan was valued at $136,546,476 on February 27,
1998 and is being held in a segregated account by the Fund's custodian. In
accordance with the terms of the loan agreement, the Fund must maintain a level
of collateral to debt of at least 150%. The loan was renewed on April 1, 1998
with an interest rate equal to six month LIBOR plus 0.4375% and a maturity date
of April 1, 1999.

Note 6. Loan Participations

The Fund invests in fixed and floating rate loans arranged through private
negotiations between a foreign sovereign entity and one or more financial
institutions. The Fund's investment in any such loan may be in the form of a
participation in or an assignment of the loan. The market value of the Fund's
loan participations at February 27, 1998 was $30,061,056.

In connection with purchasing loan participations, the Fund generally will have
no right to enforce compliance by the borrower with the terms of the loan
agreement relating to the loan, nor any rights of set-off against the borrower,
and the Fund may not benefit directly from any collateral supporting the loan in
which it has purchased the participation. As a result, the Fund will assume the
credit risk of both the borrower and the lender that is selling the
participation. In the event of the insolvency of the lender selling the
participation, the Fund may be treated as a general creditor of the lender and
may not benefit from any set-off between the lender and the borrower.

Note 7. 'When and If' Issued Bonds

'When and if' issued bonds are recorded as investments in the Fund's portfolio
and marked-to-market to reflect the current value of the bonds. When the Fund
sells a 'when and if' issued bond, an unrealized gain or loss is recorded equal
to the difference between the selling price and purchase cost of the bond.
Settlement of trades (i.e., receipt and delivery) of the 'when and if' issued
bond is contingent upon the successful issuance of such bond. In the event its
sponsor is unable to successfully issue the security, all trades in 'when and
if' issued bonds become null and void, and, accordingly, the Fund will reverse
any gain or loss recorded on such transactions.

PAGE 15

GLOBAL PARTNERS INCOME FUND INC.
- -----------------------------
Notes to Financial Statements (concluded)
(unaudited)

Note 8. Credit Risk

The yields of emerging market debt obligations and high-yield corporate debt
obligations reflect, among other things, perceived credit risk. The Fund's
investment in securities rated below investment grade typically involve risks
not associated with higher rated securities including, among others, overall
greater risk of timely and ultimate payment of interest and principal, greater
market price volatility and less liquid secondary market trading. The
consequences of political, social, economic or diplomatic changes may have
disruptive effects on the market prices of sovereign bonds and loan
participations held by the Fund.

Note 9. Dividends Subsequent to February 27, 1998

On March 2 and April 1, 1998, the Board of Directors of the Fund declared a
dividend from net investment income, each in the amount of $.11875 per share,
payable on March 31 and April 30, 1998, to shareholders of record on March 17
and April 21, 1998, respectively.

- ----------------------------------------
Selected Quarterly Financial Information (unaudited)
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS:

<TABLE>
<CAPTION>
NET REALIZED GAIN
(LOSS) & CHANGE
IN NET UNREALIZED
NET INVESTMENT APPRECIATION
INCOME (DEPRECIATION)
---------------------- ---------------------
QUARTERS ENDED* TOTAL PER SHARE TOTAL PER SHARE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
May 31, 1996.................................................. $6,347 $.44 $ 9,993 $ .69
August 31, 1996............................................... 6,313 .43 6,317 .44
November 30, 1996............................................. 6,038 .42 18,781 1.29
February 28, 1997............................................. 5,658 .39 10,982 .76
May 31, 1997.................................................. 5,426 .37 (1,100) (.07)
August 31, 1997............................................... 5,440 .37 6,991 .48
November 30, 1997............................................. 5,502 .38 (8,712) (.60)
February 27, 1998............................................. 5,521 .38 5,620 .39
- ----------------------------------------------------------------------------------------------------------------
</TABLE>

* Totals expressed in thousands of dollars except per share amounts.

PAGE 16

GLOBAL PARTNERS INCOME FUND INC.
- --------------------
Financial Highlights
DATA FOR A SHARE OF COMMON STOCK OUTSTANDING THROUGHOUT EACH PERIOD:

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED FOR THE FOR THE FOR THE FOR THE
FEBRUARY 27, YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
1998 AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
(UNAUDITED) 1997 1996 1995 1994(A)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period........................ $ 16.18 $ 13.88 $ 11.11 $ 12.01 $ 14.02
-------- ---------- --------------- ---------- ------------
Net investment income........... 0.76 1.55 1.70 1.54 0.97
Net realized gain (loss) and
change in net unrealized
appreciation (depreciation) on
investments................... (0.21) 2.46 2.56 (1.02) (1.86)
-------- ---------- --------------- ---------- ------------
Total from investment
operations.................... 0.55 4.01 4.26 0.52 (0.89)
-------- ---------- --------------- ---------- ------------
Less dividends and distributions
Dividends from net investment
income...................... (0.90) (1.71) (1.49) (1.42) (0.98)
Distributions from net
realized gains.............. (0.83) -- -- -- (0.07)
Dividends in excess of net
investment income........... -- -- -- -- (0.02)
-------- ---------- --------------- ---------- ------------
Total dividends and
distributions................. (1.73) (1.71) (1.49) (1.42) (1.07)
-------- ---------- --------------- ---------- ------------
Offering costs on issuance of
common stock ................. -- -- -- -- (0.05)
-------- ---------- --------------- ---------- ------------
Net asset value, end of
period........................ $ 15.00 $ 16.18 $ 13.88 $ 11.11 $ 12.01
-------- ---------- --------------- ---------- ------------
Per share market value, end of
period........................ $14.8125 $15.4375 $ 13.25 $ 11.125 $ 11.75
Total investment return based on
market price per share(c)..... 7.64% 31.28% 34.22% 8.01% (9.02%)(b)
Ratios to average net assets:
Operating expenses.......... 1.28%(d) 1.31% 1.32% 1.39% 1.38%(d)
Interest expense............ 2.14%(d) 2.24% 2.87% 3.46% 1.39%(d)
Total expenses.............. 3.42%(d) 3.55% 4.19% 4.85% 2.77%(d)
Net investment income....... 9.98%(d) 10.14% 13.51% 14.10% 9.05%(d)
Portfolio turnover rate..... 79.73% 106.79% 91.80% 85.15% 11.71%
Net assets, end of period
(000)..................... $218,011 $234,735 $ 201,398 $161,178 $174,252
Bank loans outstanding, end
of period (000)........... $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000
Weighted average bank loans
(000)..................... $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 47,272
Weighted average interest
rate on bank loans........ 6.38%(d) 6.65% 6.99% 7.34% 5.44%(d)
- --------------------------------------------------------------------------------------------------------------
</TABLE>

(a) For the period October 29, 1993 (commencement of investment operations)
through August 31, 1994.

(b) Return calculated based on beginning of period price of $14.02 (initial
offering price of $15.00 less sales load of $0.98) and end of period market
value of $11.75 per share. This calculation is not annualized.

(c) For purposes of this calculation, dividends on common shares are assumed to
be reinvested at prices obtained under the Fund's dividend reinvestment
plan and the broker commission paid to purchase or sell a share is
excluded. This calculation is not annualized.

(d) Annualized.

See accompanying notes to financial statements.

PAGE 17

GLOBAL PARTNERS INCOME FUND INC.

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Directors

CHARLES F. BARBER
Consultant; formerly Chairman,
ASARCO Incorporated

WILLIAM D. CVENGROS
Co-Chairman of the Board;
Chief Executive Officer,
President and Member of the
Board of Value Advisors LLC and
President of PIMCO Advisors L.P.

LESLIE H. GELB
President, The Council on Foreign Relations

HEATH B. MCLENDON
Co-Chairman of the Board;
Managing Director, Smith Barney Inc.
President, Smith Barney Mutual Fund
Management Inc.;
Chairman, Smith Barney Strategy Advisors 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,
and formerly Dean, The Fletcher School of
Law & Diplomacy Tufts University

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Officers

HEATH B. MCLENDON
Co-Chairman of the Board

WILLIAM D. CVENGROS
Co-Chairman of the Board

STEPHEN J. TREADWAY
President

NEWTON SCHOTT
Executive Vice President

PETER J. WILBY
Executive Vice President

BETH SEMMEL
Executive Vice President

THOMAS K. FLANAGAN
Executive Vice President

ALAN M. MANDEL
Treasurer

NOEL B. DAUGHERTY
Secretary

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Global Partners
Income Fund Inc.
7 World Trade Center
New York, New York 10048

INVESTMENT MANAGER
Value Advisors LLC
800 Newport Center Drive
Suite 100
Newport Beach, California 92660

INVESTMENT ADVISER
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048

CUSTODIAN
The Chase Manhattan Bank
Four Metrotech Center
Brooklyn, New York 11245

DIVIDEND DISBURSING AND 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
GDF

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STATEMENT OF DIFFERENCES
------------------------

The division symbol shall be expressed as............................. [div]