<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
September 22, 2000
Dear Shareholders:
We are pleased to provide you with this annual report for the Global Partners
Income Fund Inc. ('Fund') as of August 31, 2000. Included in this report are an
analysis of the Fund's performance versus its benchmarks and its peer group, a
commentary on the emerging debt markets and U.S. high-yield market, a listing of
the Fund's investments as of August 31, 2000 and financial statements for the
12-month period ended August 31, 2000.
During the year ended August 31, 2000, the net asset value ('NAV') of the Fund
increased from $10.98 per share at August 31, 1999 to $11.94 per share at August
31, 2000. In addition, income dividends totaling $1.43 were paid during this
period. Assuming reinvestment of these dividends in additional shares of the
Fund, the total rate of return based on the net asset value for the 12-month
time frame was 23.02%.
In comparison, the JP Morgan Emerging Markets Bond Index Plus ('EMBI+')(1)
returned 35.22% and the Salomon Smith Barney High Yield Market Index ('SSB High
Yield Index')(2) returned 1.36% for the same time period. The Fund's performance
was the result of several factors that we will highlight below.
EMERGING MARKET DEBT
Emerging markets debt returned 35.22% for the year ended August 31, 2000 as
measured by the EMBI+. This above-average return was generated with
below-average volatility. Return volatility for the year ended August 31, 2000,
was 8.13%, down from 22.07% the previous year. Spreads tightened from 1,166
basis points3 to 643 basis points over U.S. Treasuries during the fiscal year.
The strong returns generated by emerging markets debt was attributable to
improving economic fundamentals in a number of key countries as well as rising
oil prices. Stable technical factors also contributed to overall returns by
encouraging new investors to enter the market. Individual country performance
was dominated by Russia, which returned over 127% during the period, as measured
by the EMBI+. Given the outsized nature of Russia's returns, Brazil, Venezuela
and Ecuador were the only other countries to outperform the EMBI+. That said, a
wide range of countries did generate good performance with 11 of 16 Index
countries returning in excess of 16% for the fiscal year.
The U.S. Federal Reserve Board ('Fed') was active during the period, raising
interest rates four times for a total increase of 125 basis points.(3) The Fed
adopted this aggressive posture in order to slow the rate of growth of the U.S.
economy and keep inflation in check. The expectation that U.S. interest rates
---------
1 The EMBI+ is a total return index that tracks the traded market for U.S.
dollar-denominated Brady and other similar sovereign restructured bonds traded
in the emerging markets. An investor cannot invest directly in an index.
2 The SSB High Yield Index covers a significant portion of the
below-investment-grade U.S. corporate bond market. An investor cannot invest
directly in an index.
3 A basis point is 0.01% or one one-hundredth of a percent.
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
would continue to rise had a negative impact on emerging markets during some
periods of the fiscal year. This expectation had a greater negative impact than
the actual rate increases. The shift to floating currency exchange regimes in a
number of emerging countries has reduced the direct impact of U.S. interest rate
increases on their economies. Nonetheless, fears of future interest rate
increases impacted returns during January, April and May. Most notable was the
50 basis point hike on May 16, 2000, a clear signal that the Fed was maintaining
their tightening bias.
Commodity prices in general and oil prices in particular moved higher during the
fiscal year. Oil prices closed the year at $31.22 per barrel up over $10 per
barrel from the beginning of the year. This trend of higher prices has benefited
oil producing emerging countries including Mexico, Venezuela, Russia and
Ecuador.
The following is a brief description of developments in key countries over the
past 12 months.
RUSSIA
Russia's outstanding returns during the period clearly make it the turnaround
story of the year. Russia has benefited from strong political leadership, rising
oil prices and the favorable debt restructuring terms negotiated with the London
Club.(4) Other key developments in Russia during the Fund's fiscal year include:
The lower house of the Duma passed the 2000 budget, which emphasizes
increased tax collection and deficit reduction.
Duma elections in December 1999 reduced the influence of the Communist
party and made the moderate bloc the largest faction in Congress.
Vladimir Putin was elected and inaugurated President. Mr. Putin has moved
aggressively to reassert federal power over Russia's vast regions.
Russia successfully concluded a debt restructuring agreement with the
London Club of creditors. The terms of the debt exchange were favorable for
Russia. The debt exchange occurred on August 31, 2000.
Tax collections continued to run ahead of budget levels, leading to a
stronger than anticipated fiscal balance.
Rising oil prices helped expand Russia's hard currency reserve position.
Assuming oil prices remain at current levels, Russia will end the year with
reserves in excess of $25 billion. This reserve position substantially
strengthens Russia's credit quality.
This broad range of events encouraged investors to reassess the outlook for
Russia. Russian debt prices reflected this improved outlook. We maintained a
large position in Russian debt securities over the course of the Fund's fiscal
year. These positions were important contributors to the Fund's performance.
---------
(4) The London Club is the official group of creditors lending to emerging
market governments.
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
ARGENTINA
Argentina lagged the returns of the EMBI+ for the fiscal year returning 16.95%.
Argentina started the fiscal year with political uncertainty and concerns about
its ability to refinance its substantial obligations in the latter part of 1999
and through 2000. The election of Fernando de la Rua as President ended ten
years of Peronist party rule. Reflecting Argentina's fiscal uncertainties,
Moody's downgraded Argentina's sovereign rating one notch from Ba3 to B1.
We were underweight in Argentina during the period. We believe that the
Argentine economy must grow at a more accelerated pace in order to reduce the
fiscal pressure of its debt amortization schedule.
BRAZIL
Brazil returned 38.90% for the period, as represented by the EMBI+. Economic
news from Brazil was very positive throughout the Fund's fiscal year. The
current account deficit and the central government primary surplus exceeded
targets established with the International Monetary Fund ('IMF'). The factors
behind these good fiscal results include a combination of one-off revenue events
and very disciplined expenditure control. Brazilian government officials have
made substantial progress in dealing with the country's debt problems. In
addition, negotiations with the IMF have led to a lowering of the target for
foreign reserves, giving the central bank additional flexibility in supporting
the local currency. Brazil's subdued inflation and continued primary surplus led
the Central Bank to lower overnight rates from 45% to 16.5% over the course of
the Fund's fiscal year.
We maintained a large position in Brazil during the fiscal year. Assuming the
Brazilian economic recovery continues, the country will have added flexibility
in dealing with its domestic debt burden.
MEXICO
Mexico returned 28.51% for the year, as represented by the EMBI+. Mexico's
foreign currency debt rating was upgraded by Moody's to investment-grade (Baa3.)
The ratings agency cited sound fiscal policies, increased political stability
and a reduced debt burden in explaining its rationale for the upgrade. Mexico
has benefited from rising oil prices as its economy and export volumes continue
to grow. The ratings upgrade attracted additional investors into emerging
markets debt as Mexico was added to investment-grade debt indexes. In another
important development, Vincente Fox, PAN candidate, was elected president on
July 2. The election marked the first defeat for the PRI party in over 70 years
of presidential politics. This evolutionary opening of the Mexican political
system further establishes Mexico as a leading credit in emerging markets. While
we are impressed by Mexico's progress and its sound fundamentals, we are
underweight relative to the Index because the country trades at substantially
tighter spreads than other potential investments.
VENEZUELA
Venezuela returned 35.41% as represented by the EMBI+ for the year, the
fourth-highest return of the Index. Oil price strength continues to be a bright
spot for the Venezuelan economy. The additional revenue from oil has helped
limit the size of the federal budget deficit during a period of economic
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
contraction. Venezuela financed 1999's deficit domestically, without turning to
international capital markets. This policy has continued through 2000. Political
uncertainty weighed on Venezuelan debt as controversy accompanied the process of
Constitutional reform. The referendum on the new constitution was approved by
71% of the voters on December 15, 1999. The new constitution called for national
elections. President Chavez was re-elected to a six-year term of office in July.
MOROCCO
Morocco returned 24.59% for the year. The Moroccan economy has struggled with
two consecutive years of drought. The government cut spending to offset the
decline in tax revenues. Earlier in the year a cellular telephone license was
awarded to Telefonica for a price of $1.1 billion and a commitment to spend an
additional $700 million developing the network. The proceeds from this sale will
be used to fund a variety of government investments in Morocco.
ECUADOR
Ecuador returned 55.45% for the year, as represented by the EMBI+. The market
was encouraged by Ecuador's establishment of a dollarization program and its
agreement to exchange defaulted Brady bonds for newly issued eurobonds. In
addition, Ecuador reached agreement with the IMF on a $2 billion, three-year
financing.
Our outlook for emerging markets debt is positive based upon the current spread
level of approximately 700 basis points over U.S. Treasuries. Continued economic
growth in Asia coupled with an economic rebound in many Latin American countries
points to an improving macroeconomic environment for emerging countries. In
addition, volatility in the market is well below historic levels, reflecting the
improved technical picture in the market.
HIGH-YIELD DEBT SECURITIES
The year ended August 31, 2000, was a period of investor uncertainty regarding
interest rates, inflation and the sustainability of the North American economic
expansion. These concerns translated into significant mutual fund outflows,
which exacerbated already limited liquidity in the U.S. high-yield market and
resulted in technical weakness for the market for most of the fiscal year. For
the year ended August 31, 2000, the high-yield bond market returned 1.36% as
measured by the SSB High Yield Index.
For most of the fiscal year, concerns over continued strong growth in the U.S.
economy heightened inflation worries, which resulted in a string of interest
rate hikes by the Fed. From June 1999 until May 2000, the Fed lifted its target
rate for overnight bank lending six times, or 1.75%, to 6.50%. The Fed's rate
increases caused significant concern and uncertainty in the fixed-income and
equity markets as to the ultimate end of the rate increases and the
sustainability of robust economic growth. The resulting rise in long-term
interest rates and volatility in the U.S. equity markets put pressure on the
high-yield market, both in terms of asset pricing and liquidity. These pressures
were compounded by relatively high default rates in the high-yield bond market,
primarily due to weak underwriting standards in 1997
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
and 1998 and a tightening of banks' and the market's credit standards, which
limited companies' access to new funds. As a result, liquidity in the market was
limited on the investor side, as mutual fund outflows totaled $10.6 billion
during the period, and by broker-dealers, who held back from committing
significant funds to support the market.
Late in the fiscal year, however, the high-yield market received some relief as
the Fed held interest rates steady at its meetings in June and August 2000 in
response to data hinting at a slowdown in the U.S. economy. As a result, during
the last three months of the fiscal year, inflation and interest rate fears
subsided somewhat and the market enjoyed mutual fund inflows of $1.2 billion and
a three-month return of 4.13% for the SSB High Yield Index. Despite this late
recovery, the high-yield bond market remained focused on high default rates,
potential inflation threats and the possibility that the economy could slip into
a recession.
As reported by the SSB High Yield Index, the high-yield bond market returned
1.36% during the period. The average market yield at August 31, 2000 was 12.39%,
up from 11.13% at August 31, 1999. In addition, the spread over U.S. Treasuries
finished the period at 651 basis points, widening from 521 basis points at
August 31, 1999.
For the year ended August 31, 2000, the top-performing industries in the
high-yield bond market included energy, cable and other media, gaming,
utilities, housing-related companies and chemicals. Energy outperformed due to
higher oil and natural gas prices. The cable and other media, gaming and
utilities sectors were supported by their relatively stable and predictable cash
flows and their perception by investors as higher quality sectors.
Housing-related companies benefited from continued strength in housing activity.
Telecommunications, a growing segment of the market, was a moderate outperformer
as a strong performance early in the fiscal year, driven by explosive industry
growth and mergers and acquisitions, was offset by weakness late in the year due
to increased equity market volatility, heightened competition and funding
concerns.
The worst performing industry groups during the period included leisure, retail
stores, consumer products, supermarkets/drugstores and services. Leisure was
negatively impacted by difficulties arising from overcapacity in the theatre
operator sector. Retail stores and consumer products underperformed due to more
intense competition, flawed operating strategies at several issuers and slower
consumer spending in the latter part of the reporting period.
Supermarkets/drugstores underperformed due to individual credit difficulties at
Rite Aid and Pathmark Stores.
In terms of credit quality, BB issues outperformed B issues, which in turn
outperformed CCC issues as investors favored the greater liquidity and higher
credit quality offered by BB issues. BB, B and CCC issues returned 5.61%, 0.67%
and a negative 13.64%, respectively, for the fiscal year, according to the SSB
High Yield Index.
The Fund's performance was adversely affected by overweightings in retail
stores, consumer products and services/other and by underweightings in utilities
and housing-related companies during the period. However, the Fund's performance
benefited from overweightings in gaming and chemicals and underweightings in
leisure and supermarkets/drugstores. Over the course of the fiscal year, the
Fund responded to market conditions by increasing its positions in energy and
utilities and by reducing its positions in retail stores, consumer products and
services/other.
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
OUTLOOK
Going forward, we expect the high-yield bond market to continue to experience
volatility in the near term primarily as a result of several technical factors,
including (i) mutual fund flows, (ii) continued concerns over default rates,
(iii) reduced secondary market liquidity and (iv) continuing cyclical concerns.
In light of these conditions, we are pursuing a conservative investment strategy
geared to overweighting BB credits, maintaining an underweighting in
Telecommunications, due to the speculative environment surrounding that sector,
and aggressively pursuing selective opportunities in undervalued B and CCC
credits.
In a continuing effort to provide timely information concerning Global Partners
Income Fund Inc., shareholders may call 1-888-777-0102 (toll free), Monday
through Friday from 8:00 a.m. to 6:00 p.m. EST for the Fund's current net asset
value, market price and other information regarding the Fund's portfolio
holdings and allocations. For information concerning your GDF stock account,
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). We appreciate the
confidence you have demonstrated in the past and hope to continue to serve you
in the future years.
Sincerely,
<TABLE>
<S> <C>
Heath B. McLendon William D. Cvengros
Heath B. McLendon William D. Cvengros
Co-Chairman of the Board Co-Chairman of the Board
Peter J. Wilby Beth A. Semmel
Peter J. Wilby Beth A. Semmel
Executive Vice President Executive Vice President
</TABLE>
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GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Schedule of Investments
August 31, 2000
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY(a) VALUE
----------------------------------------------------------------------------------------------
Corporate Bonds -- 38.9%
Basic Industries -- 4.6%
<S> <C> <C>
$ 1,500,000 Asia Pulp & Paper International Finance Co., 11.750% due
10/1/05.................................................... $ 993,750
750,000 Avecia Group PLC, 11.000% due 7/1/09........................ 761,250
1,500,000 Berry Plastics Corp., 12.250% due 4/15/04................... 1,440,000
1,000,000 Doman Industries Ltd., 12.000% due 7/1/04................... 1,025,000
1,000,000 Gentek Inc., 11.000% due 8/1/09............................. 1,022,500
1,000,000 Glencore Nickel Property Ltd., 9.000% due 12/1/14........... 833,750
1,250,000 Holt Group, 9.750% due 1/15/06.............................. 175,000
125,000 LTV Corp., 11.750% due 11/15/09............................. 94,375
1,000,000 Lyondell Chemical Co., 9.875% due 5/1/07.................... 1,018,750
750,000 Norampac Inc., 9.500% due 2/1/08............................ 763,125
Owens-Illinois Inc.:
125,000 7.850% due 5/15/04........................................ 118,281
645,000 7.500% due 5/15/10........................................ 557,925
750,000 P&L Coal Holdings Corp., 8.875% due 5/15/08................. 736,875
750,000 PCI Chemicals Canada Inc., 9.250% due 10/15/07.............. 378,750
1,250,000 Radnor Holdings Corp., 10.000% due 12/1/03.................. 1,156,250
------------
11,075,581
------------
Consumer Cyclicals -- 3.4%
1,000,000 Advance Stores Co. Inc., 10.250% due 4/15/08................ 825,000
750,000 AmeriKing Inc., 10.750% due 12/1/06......................... 521,250
750,000 Aztar Corp., 8.875% due 5/15/07............................. 733,125
1,000,000 B&G Foods Inc., 9.625% due 8/1/07........................... 695,000
500,000 Cole National Group, Inc., 8.625% due 8/15/07............... 332,500
1,500,000 Finlay Fine Jewelry Corp., 8.375% due 5/1/08................ 1,372,500
1,000,000 HMH Properties, Inc., 8.450% due 12/1/08.................... 973,750
500,000 Levi Strauss & Co., 7.000% due 11/1/06...................... 385,000
1,000,000 Mattress Discounters Co., 12.625% due 7/15/07............... 915,000
625,000 Pillowtex Corp., 9.000% due 12/15/07........................ 121,875
Tommy Hilfiger USA, Inc.:
220,000 6.500% due 6/1/03......................................... 177,100
400,000 6.850% due 6/1/08......................................... 278,000
375,000 Vlasic Foods International Inc., 10.250% due 7/1/09......... 204,375
1,000,000 WestPoint Stevens, Inc., 7.875% due 6/15/05................. 870,000
------------
8,404,475
------------
----------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
PAGE 7
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GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Schedule of Investments (continued)
August 31, 2000
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY(a) VALUE
----------------------------------------------------------------------------------------------
Consumer Non-Cyclicals -- 5.1%
<S> <C> <C>
$ 750,000 Columbia/HCA Healthcare Co., 6.910% due 6/15/05............. $ 703,125
750,000 Derby Cycle Corp., 10.000% due 5/15/08...................... 228,750
500 Units Fresenius Medical Capital Trust II, 7.875% due 2/1/08 (b)... 473,750
500,000 Harrah's Operating Co., Inc., 7.875% due 12/15/05........... 487,500
250,000 HCA - The Healthcare Co., 8.750% due 9/1/10................. 251,875
375,000 Home Interiors & Gifts Inc., 10.125% due 6/1/08............. 114,375
1,500,000 Horseshoe Gaming LLC, 9.375% due 6/15/07.................... 1,507,500
1,000,000 Imperial Holly Corp., 9.750% due 12/15/07................... 190,000
750,000 Mandalay Resort Group, 10.250% due 8/1/07 (c)............... 780,000
750,000 MGM Grand Inc., 9.750% due 6/1/07........................... 789,375
750,000 Mohegan Tribal Gaming, 8.750% due 1/1/09.................... 736,875
1,900,000 North Atlantic Trading Co., 11.000% due 6/15/04............. 1,605,500
1,500,000 Park Place Entertainment Corp., 7.875% due 12/15/05......... 1,458,750
Revlon Consumer Products Corp.:
550,000 9.000% due 11/1/06........................................ 396,000
175,000 8.625% due 2/1/08......................................... 91,000
500,000 Simmons Co., 10.250% due 3/15/09............................ 475,000
Sun International Hotels:
500,000 9.000% due 3/15/07........................................ 475,000
1,000,000 8.625% due 12/15/07....................................... 940,000
750,000 Tenet Healthcare Corp., 7.625% due 6/1/08................... 712,500
------------
12,416,875
------------
Energy -- 3.8%
1,000,000 Belco Oil & Gas Corp., 8.875% due 9/15/07................... 950,000
750,000 Canadian Forest Oil Ltd., 8.750% due 9/15/07................ 738,750
250,000 Comstock Resources Inc., 11.250% due 5/1/07................. 261,250
750,000 Gulf Canada Resources Ltd., 9.625% due 7/1/05............... 776,250
1,000,000 Lomak Petroleum Inc., 8.750% due 1/15/07.................... 935,000
750,000 Ocean Energy Inc., 8.875% due 7/15/07....................... 768,750
1,000,000 PennzEnergy Co., 10.250% due 11/1/05........................ 1,101,250
500,000 Pioneer Natural Resource Co., 9.625% due 4/1/10............. 533,750
Plains Resources Inc.:
300,000 10.250% due 3/15/06....................................... 310,500
700,000 10.250% due 3/15/06 (c)................................... 724,500
500,000 R&B Falcon Corp., 9.500% due 12/15/08....................... 542,500
2,000,000 United Refining Co., 10.750% due 6/15/07.................... 1,195,000
435,000 Western Gas Resources, 10.000% due 6/15/09.................. 456,750
------------
9,294,250
------------
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SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
PAGE 8
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GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Schedule of Investments (continued)
August 31, 2000
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY(a) VALUE
----------------------------------------------------------------------------------------------
Finance Services -- 1.5%
<S> <C> <C>
$ 987,700 Airplanes Pass-Through Trust, 10.875% due 3/15/19........... $ 805,766
ContiFinancial Corp.:
1,000,000 7.500% due 3/15/02 (d).................................... 130,000
1,000,000 8.125% due 4/1/08 (d)..................................... 130,000
375,000 Metris Cos. Inc., 10.125% due 7/15/06....................... 354,375
2,000,000 Morgan Stanley Aircraft Finance, Series 1A, Class D1, 8.700%
due 3/15/23................................................ 1,540,000
750,000 Sovereign Bancorp., 10.500% due 11/15/06.................... 763,125
------------
3,723,266
------------
Housing Related -- 0.7%
1,000,000 Blount Inc., 13.000% due 8/1/09............................. 1,025,000
875,000 Nortek Inc., 8.875% due 8/1/08.............................. 818,125
------------
1,843,125
------------
Manufacturing -- 4.2%
1,750,000 Breed Technologies Inc., 9.250% due 4/15/08 (d)............. 21,875
1,500,000 Federal Mogul Corp., 7.500% due 1/15/09..................... 1,095,000
1,250,000 Foamex L.P., 9.875% due 6/15/07............................. 943,750
750,000 Hexcel Corp., 9.750% due 1/15/09............................ 701,250
1,500,000 High Voltage Engineering Corp., 10.500% due 8/15/04......... 1,042,500
1,461,000 Hines Horticulture Inc., 11.750% due 10/15/05............... 1,482,915
500,000 JH Heafner Co., 10.000% due 5/15/08......................... 212,500
750,000 JL French Automotive Casting, 11.500% due 6/1/09............ 630,000
1,000,000 Jordan Industries, 10.375% due 8/1/07....................... 940,000
750,000 Lear Corp., 8.110% due 5/15/09.............................. 709,688
1,750,000 Moll Industries, 10.500% due 7/1/08......................... 428,750
500,000 Polymer Group Inc., 9.000% due 7/1/07....................... 405,000
850,000 Sequa Corp., 9.000% due 8/1/09.............................. 852,125
375,000 Tenneco Automotive Inc., 11.625% due 10/15/09............... 324,375
500,000 Williams Scotsman Inc., 9.875% due 6/1/07................... 438,125
------------
10,227,853
------------
Media and Cable -- 5.7%
1,250,000 Adelphia Communications Corp., 9.875% due 3/1/07............ 1,210,938
375,000 Allbritton Communications, 9.750% due 11/30/07.............. 363,750
1,000,000 Century Communications Corp., zero coupon due 1/15/08....... 418,750
Charter Communications Holdings LLC:
400,000 8.625% due 4/1/09......................................... 367,000
1,625,000 Zero coupon until 4/1/04, 9.920% thereafter, due 4/1/11... 979,063
1,000,000 Citadel Broadcasting Co., 10.250% due 7/1/07................ 1,045,000
----------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
PAGE 9
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GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Schedule of Investments (continued)
August 31, 2000
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY(a) VALUE
----------------------------------------------------------------------------------------------
Media and Cable -- 5.7% (continued)
<S> <C> <C>
CSC Holdings Inc.:
$ 1,000,000 9.875% due 2/15/13........................................ $ 1,022,500
1,000,000 10.500% due 5/15/16....................................... 1,080,000
1,050,000 Diamond Cable Communications PLC, zero coupon until
12/15/00, 11.750% thereafter, due 12/15/05................. 1,002,750
1,250,000 Hollinger International Publishing Inc., 9.250% due
2/1/06..................................................... 1,262,500
750,000 Lin Television Corp., 8.375% due 3/1/08..................... 714,375
1,000,000 NTL Inc., zero coupon until 2/1/01, 11.500% thereafter, due
2/15/06.................................................... 946,250
750,000 Rogers Communications Inc., 8.875% due 7/15/07.............. 753,750
1,065,000 Telewest Communications PLC, 11.250% due 11/1/08............ 1,065,000
2,500,000 United International Holdings, zero coupon until 2/15/03,
10.750% thereafter, due 2/15/08............................ 1,762,500
------------
13,994,126
------------
Services and Other -- 2.9%
750,000 Allied Waste North America Inc., 7.875% due 1/1/09.......... 679,688
500,000 Aqua Chemical Inc., 11.250% due 7/1/08...................... 317,500
900,000 Avis Rent A Car Inc., 11.000% due 5/1/09.................... 985,500
1,500,000 Axiohm Transaction Solutions Inc., 9.750% due 10/1/07 (d)... 307,500
500,000 Crown Castle International Corp., 10.750% due 8/1/11........ 522,500
1,000,000 Dyncorp Inc., 9.500% due 3/1/07............................. 775,000
1,000,000 Intertek Finance, 10.250% due 11/1/06....................... 875,000
500,000 Mail-Well I Corp., 8.750% due 12/15/08...................... 435,000
1,000,000 Pierce Leahy Command Corp., 8.125% due 5/15/08.............. 910,000
1,000,000 Primark Corp., 9.250% due 12/15/08.......................... 1,095,000
2,000,000 Safety-Kleen Services, 9.250% due 6/1/08 (d)................ 100,000
------------
7,002,688
------------
Technology -- 0.5%
375,000 Exodus Communications Inc., 11.625% due 7/15/10 (c)......... 383,438
750,000 Polaroid Corp., 11.500% due 2/15/06......................... 778,125
------------
1,161,563
------------
Telecommunications -- 4.6%
1,000,000 Covad Communications Group Inc., 12.000% due 2/15/10........ 775,000
Global Crossing Holding Ltd.:
500,000 9.125% due 11/15/06....................................... 498,750
250,000 9.500% due 11/15/09....................................... 251,875
1,750,000 ICG Holdings Inc., zero coupon until 9/15/00, 13.500%
thereafter, due 9/15/05.................................... 918,750
----------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
PAGE 10
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GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Schedule of Investments (continued)
August 31, 2000
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY(a) VALUE
----------------------------------------------------------------------------------------------
Telecommunications -- 4.6% (continued)
<S> <C> <C>
Intermedia Communications Inc.:
$ 250,000 8.500% due 1/15/08......................................... $ 207,500
750,000 8.600% due 6/1/08.......................................... 622,500
Level 3 Communications Inc.:
250,000 11.000% due 3/15/08....................................... 248,750
500,000 9.125% due 5/1/08......................................... 450,625
3,500,000 Nextel Communications Inc., zero coupon until 2/15/03,
9.950% thereafter, due 2/15/08............................. 2,660,000
375,000 NEXTLINK Communications, 10.750% due 6/1/09................. 364,688
750,000 Price Communications Wireless Inc., 9.125% due 12/15/06..... 761,250
750,000 PSINet Inc., 11.500% due 11/1/08............................ 661,875
750,000 Rogers Cantel Inc., 8.800% due 10/1/07...................... 751,875
750,000 Telecorp PCS Inc., 10.625% due 7/15/10 (c).................. 783,750
750,000 Ubiquitel Operating Co., zero coupon until 4/15/05, 14.000%
thereafter, due 4/15/10.................................... 393,750
2,250,000 Viatel Inc., zero coupon until 4/15/03, 12.500% thereafter,
due 4/15/08................................................ 776,250
------------
11,127,188
------------
Transportation -- 1.2%
1,500,000 Northwest Airlines Inc., 7.625% due 3/15/05................. 1,398,750
TFM S.A. de C.V.:
750,000 10.250% due 6/15/07....................................... 710,625
1,000,000 Zero coupon until 6/15/02, 11.750% thereafter, due 6/15/09 782,500
------------
2,891,875
------------
Utilities -- 0.7%
1,000,000 Azurix Corp., 10.750% due 2/15/10 (c)....................... 770,000
Calpine Corp.:
500,000 8.750% due 7/15/07........................................ 496,250
500,000 8.625% due 8/15/10........................................ 496,875
------------
1,763,125
------------
Total Corporate Bonds (Cost -- $111,412,971)............... 94,925,990
------------
----------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
PAGE 11
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Schedule of Investments (continued)
August 31, 2000
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY(a) VALUE
----------------------------------------------------------------------------------------------
Sovereign Bonds -- 49.0%
<S> <C> <C>
Argentina -- 7.4%
Republic of Argentina:
$ 8,825,000 11.375% due 3/15/10....................................... $ 8,052,813
7,000,000 12.125% due 2/25/19....................................... 6,571,250
3,850,000 Structured Note, 11.595% due 4/10/05 (e)(f)................. 3,580,500
------------
18,204,563
------------
Brazil -- 10.3%
Federal Republic of Brazil:
7,365,000 14.500% due 10/15/09...................................... 8,272,736
2,905,000 12.250% due 3/6/30........................................ 2,752,488
14,103,000 11.000% due 8/17/40....................................... 11,564,460
2,689,530 MYDFA, 7.187% due 9/15/07 (e)............................. 2,410,491
------------
25,000,175
------------
Bulgaria -- 2.4%
Republic of Bulgaria:
150,000 Discount Bond, Series A, 7.750% due 7/28/24 (e)........... 122,344
7,500,000 FLIRB, Series A, 3.000% due 7/28/12 (e)................... 5,784,375
------------
5,906,719
------------
Colombia -- 1.2%
Republic of Colombia:
700,000 12.832% due 8/13/05 (e)................................... 694,750
2,450,000 11.750% due 2/25/20....................................... 2,156,000
------------
2,850,750
------------
Costa Rica -- 0.3%
900,000 Costa Rica Principal Bond, Series B, 6.250% due 5/21/15..... 837,000
------------
Croatia -- 0.4%
983,456 Republic of Croatia, Series B, 7.750% due 7/31/06 (e)....... 942,888
------------
Ecuador -- 0.5%
Republic of Ecuador:
104,000 12.000% due 11/15/12 (c).................................. 67,756
2,682,000 4.000% due 8/15/30 (c)(e)................................. 1,038,605
------------
1,106,361
------------
----------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
PAGE 12
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Schedule of Investments (continued)
August 31, 2000
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY(a) VALUE
----------------------------------------------------------------------------------------------
Ivory Coast -- 0.2%
<S> <C> <C>
$ 2,000,000 Ivory Coast, FLIRB, due 3/29/18 (d)......................... $ 370,000
------------
Jamaica -- 0.2%
500,000 Government of Jamaica, 12.750% due 9/1/07 (c)............... 491,250
------------
Mexico -- 1.6%
United Mexican States:
3,246,000 11.375% due 9/15/16....................................... 3,847,322
110,000 11.500% due 5/15/26....................................... 136,785
------------
3,984,107
------------
Panama -- 2.5%
Republic of Panama:
800,000 8.875% due 9/30/27........................................ 698,000
1,350,000 9.375% due 4/1/29......................................... 1,336,500
4,900,000 IRB, 4.500% due 7/17/14 (e)............................... 4,085,375
------------
6,119,875
------------
Peru -- 1.3%
Republic of Peru:
1,000,000 FLIRB, 3.750% due 3/7/17 (e).............................. 653,125
3,600,000 PDI, 4.500% due 3/7/17 (e)................................ 2,538,000
------------
3,191,125
------------
Philippines -- 1.0%
Republic of Philippines:
815,000 9.875% due 1/15/19........................................ 704,975
2,000,000 10.625% due 3/16/25....................................... 1,785,000
------------
2,489,975
------------
Poland -- 0.3%
900,000 Republic of Poland, PDI, 6.000% due 10/27/14 (e)............ 836,438
------------
Russia -- 10.4%
Russia:
5,358,695 8.250% due 3/31/10 (c).................................... 3,811,372
5,125,000 11.000% due 7/24/18....................................... 4,029,531
40,110,603 2.250% due 3/31/30 (c)(e)................................. 17,498,243
------------
25,339,146
------------
----------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
PAGE 13
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Schedule of Investments (continued)
August 31, 2000
<TABLE>
<CAPTION>
FACE
AMOUNT SECURITY(a) VALUE
----------------------------------------------------------------------------------------------
Venezuela -- 9.0%
<S> <C> <C>
Republic of Venezuela:
$ 200,000 9.125% due 6/18/07........................................ $ 163,000
8,800,000 13.625% due 8/15/18....................................... 8,415,000
215,000 9.250% due 9/15/27........................................ 147,544
2,500,000 Discount Bond, Series W-A, 7.375% due 3/31/20 (e)......... 2,050,000
FLIRB:
6,666,601 Series A, 7.438% due 3/31/07 (e)........................ 5,772,859
5,333,280 Series B, 7.438% due 3/31/07 (e)........................ 4,618,287
808,850 NMB, 8.000% due 12/18/05 (e).............................. 675,390
------------
21,842,080
------------
Total Sovereign Bonds (Cost -- $111,588,182)............... 119,512,452
------------
Loan Participations -- 8.3%
12,764,700 Kingdom of Morocco, Tranche B, 7.750% due 1/1/04
(Morgan Guaranty Trust Company of New York and Morgan
Stanley Emerging Markets Inc.) (e)(g)...................... 12,142,421
The People's Democratic Republic of Algeria:
1,638,635 Tranche 1, 7.188% due 9/4/06 (Chase Manhattan Bank)
(e)(g)................................................... 1,417,420
8,075,000 Tranche 3, 7.188% due 3/4/10 (Chase Manhattan Bank and First
Boston) (e)(g)........................................... 6,611,407
------------
Total Loan Participations (Cost -- $19,152,823)............ 20,171,248
------------
<CAPTION>
SHARES SECURITY(a) VALUE
----------------------------------------------------------------------------------------------
Preferred Stock -- 0.2%
<S> <C> <C>
12 Anvil Holdings, Series B, 13.000%........................... 89
1,000,000 APP Finance (II) Mauritius Limited, Series A,
12.000% (e)................................................ 452,500
TCR Holding Corp. (h):
4,091 Class B................................................... 41
2,250 Class C................................................... 23
5,932 Class D................................................... 59
12,271 Class E................................................... 123
------------
Total Preferred Stock (Cost -- $1,001,470)................. 452,835
------------
----------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
PAGE 14
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Schedule of Investments (continued)
August 31, 2000
<TABLE>
<CAPTION>
SHARES SECURITY(a) VALUE
----------------------------------------------------------------------------------------------
Warrants and Rights (h) -- 0.1%
<S> <C> <C>
1,000 Glasstech Inc. (Exercise price of $0.01 per share expiring
on 6/30/04.
Each warrant exercisable for 0.125 shares of common
stock.).................................................... $ 500
5,000 In Flight Phone (Exercise price of $0.01 per share expiring
on 8/31/02. Each warrant exercisable for one share of
common stock.)............................................. --
1,000 Mattress Discounters Co. (Exercise price of $0.01 per share
expiring on 7/15/07. Each warrant exercisable for 4.85
shares of Class A common stock and 0.539 shares of Class L
common stock.)............................................. 10,000
8,000 Terex Corp. Stock Appreciation Rights (Expiring 5/15/02).... 113,000
750 Ubiquitel Operating Co. (Exercise price of $22.74 per share
expiring on 4/15/10. Each warrant exercisable for 5.965
shares of common stock.)................................... 48,844
------------
Total Warrants and Rights (Cost -- $41,891)................ 172,344
------------
<CAPTION>
FACE
AMOUNT SECURITY VALUE
----------------------------------------------------------------------------------------------
Repurchase Agreements -- 3.5%
<S> <C> <C>
$ 4,218,000 J.P. Morgan, 6.580% due 9/1/00; Proceeds at maturity --
$4,218,771;
(Fully collateralized by U.S. Treasury Notes, 6.375% due
8/15/27; Market value -- $4,302,358)...................... 4,218,000
4,217,000 Warburg Dillon Read LLC, 6.600% due 9/1/00; Proceeds at
maturity --
$4,217,773; (Fully collateralized by U.S. Treasury Notes,
10.625% due 8/15/15; Market value -- $4,301,646).......... 4,217,000
------------
Total Repurchase Agreements (Cost -- $8,435,000)........... 8,435,000
------------
Total Investments -- 100% (Cost -- $251,632,337).......... $243,669,869
------------
------------
</TABLE>
--------------------------------------------------------------------------------
(a) All securities segregated as collateral pursuant to loan agreement.
(b) Each unit is comprised of a $1,000 par value senior note due 2/1/08.
(c) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers.
(d) Security is currently in default.
(e) Rate shown reflects current rate on instrument with variable rate or step
coupon rates.
(f) Coupon rate is derived from a formula based on the yields of other Argentine
bonds.
(g) Participation interests were acquired through the financial institutions
indicated parenthetically.
(h) Non-income producing security.
Abbreviations used in this schedule:
<TABLE>
<S> <C>
FLIRB -- Front Loaded Interest Reduction Bond.
IRB -- Interest Reduction Bond.
MYDFA -- Multi Year Depository Facility Agreement.
NMB -- New Money Bond.
PDI -- Past Due Interest.
</TABLE>
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 15
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Statement of Assets and Liabilities
August 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost -- $251,632,337)............ $243,669,869
Cash..................................................... 1,298,779
Interest receivable...................................... 7,881,788
Prepaid expenses......................................... 8,974
------------
TOTAL ASSETS............................................. 252,859,410
------------
LIABILITIES:
Loan payable (Note 4).................................... 75,000,000
Payable for securities purchased......................... 1,042,986
Loan interest payable (Note 4)........................... 443,500
Management fees payable (Note 2)......................... 161,819
Accrued expenses......................................... 141,523
------------
TOTAL LIABILITIES........................................ 76,789,828
------------
TOTAL NET ASSETS............................................ $176,069,582
------------
------------
NET ASSETS:
Common stock ($0.001 par value, 100,000,000 shares
authorized; 14,748,540 shares outstanding).............. $ 14,749
Additional paid-in capital............................... 205,371,639
Undistributed net investment income...................... 577,160
Accumulated net realized loss from security
transactions............................................ (21,931,498)
Net unrealized depreciation of investments............... (7,962,468)
------------
TOTAL NET ASSETS............................................ $176,069,582
------------
------------
NET ASSET VALUE PER SHARE ($176,069,582 [div] 14,748,540
shares outstanding)........................................ $11.94
------
------
</TABLE>
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 16
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Statement of Operations
For the Year Ended August 31, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest................................................. $ 29,709,248
------------
EXPENSES:
Interest expense (Note 4)................................ 6,207,943
Management fees (Note 2)................................. 1,869,960
Legal fees............................................... 72,546
Shareholder communications............................... 56,811
Audit and tax services................................... 54,551
Custody.................................................. 40,550
Transfer agent fees...................................... 36,047
Directors' fees and expenses............................. 27,892
Listing fees............................................. 24,302
Other.................................................... 19,338
------------
TOTAL EXPENSES........................................... 8,409,940
------------
NET INVESTMENT INCOME....................................... 21,299,308
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions (excluding
short-term securities):
Proceeds from sales................................... 271,973,630
Cost of securities sold............................... 271,261,357
------------
NET REALIZED GAIN........................................ 712,273
------------
Change in Net Unrealized Depreciation:
Beginning of year..................................... (21,033,639)
End of year........................................... (7,962,468)
------------
DECREASE IN NET UNREALIZED DEPRECIATION.................. 13,071,171
------------
NET GAIN ON INVESTMENTS..................................... 13,783,444
------------
INCREASE IN NET ASSETS FROM OPERATIONS...................... $ 35,082,752
------------
------------
</TABLE>
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 17
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Years Ended August 31,
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
-----------------------------------------------------------------------------------------
OPERATIONS:
Net investment income.................................... $ 21,299,308 $ 23,233,430
Net realized gain (loss)................................. 712,273 (17,552,398)
Decrease in net unrealized depreciation.................. 13,071,171 36,734,971
------------ ------------
INCREASE IN NET ASSETS FROM OPERATIONS................... 35,082,752 42,416,003
------------ ------------
DIVIDENDS PAID TO SHAREHOLDERS FROM:
Net investment income.................................... (21,016,689) (24,514,395)
------------ ------------
DECREASE IN NET ASSETS FROM DIVIDENDS TO SHAREHOLDERS.... (21,016,689) (24,514,395)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued on reinvestment of dividends
(0 and 179,386 shares issued, respectively)............. -- 1,972,489
------------ ------------
INCREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS... -- 1,972,489
------------ ------------
INCREASE IN NET ASSETS...................................... 14,066,063 19,874,097
NET ASSETS:
Beginning of year........................................ 162,003,519 142,129,422
------------ ------------
END OF YEAR*............................................. $176,069,582 $162,003,519
------------ ------------
------------ ------------
*Includes undistributed net investment income of:........... $577,160 $19,470
------------ ------------
------------ ------------
</TABLE>
---------------------------------------
Statement of Cash Flows
For the Year Ended August 31, 2000
<TABLE>
<S> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Proceeds from sales of portfolio securities and principal
paydowns................................................ $ 258,055,272
Purchases of portfolio securities........................ (242,880,940)
Net purchases of short-term securities................... (5,304,000)
-------------
9,870,332
Net investment income.................................... 21,299,308
Adjustments to reconcile net investment income to net
cash provided by operating activities:
Accretion of discount on securities................... (5,690,253)
Capitalized income on payment-in-kind securities...... (216,772)
Net change in receivables/payables related to
operations.......................................... (2,947,614)
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES................ 22,315,001
-------------
CASH FLOWS USED BY FINANCING ACTIVITIES:
Dividends paid........................................... (21,016,689)
-------------
NET CASH USED BY FINANCING ACTIVITIES.................... (21,016,689)
-------------
NET INCREASE IN CASH........................................ 1,298,312
Cash, Beginning of year..................................... 467
-------------
CASH, END OF YEAR........................................... $ 1,298,779
-------------
-------------
</TABLE>
--------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 18
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Notes to Financial Statements
Note 1. Significant Accounting Policies
Global Partners Income Fund Inc. ('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.
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 19
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
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 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 and distributions which exceed net investment
income and net realized capital gains for financial reporting purposes but not
for tax purposes are reported as distributions in excess of net investment
income or distributions in excess of net realized capital gains. To the extent
they exceed net investment income and net realized capital gains for tax
purposes, they are reported as tax return of capital.
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 accreting
discount on debt obligations. For the year ended August 31, 2000, the Fund paid
interest expenses of $6,103,394.
YEAR END TAX RECLASSIFICATIONS. The character of income and gains to be
distributed are determined in accordance with income tax regulations which may
differ from GAAP. At August 31, 2000, reclassifications were made to the capital
accounts of the Fund to reflect permanent book/tax differences and income and
gains available for distributions under income tax regulations. Net investment
income, net realized gains and net assets were not affected by this change.
PAGE 20
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
Note 2. Management and Advisory Fees and Other Transactions
The Fund has entered into a management agreement with PIMCO Advisors L.P.
('Investment Manager'), 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 management agreement was transferred to the
Investment Manager from its subsidiary, Value Advisors LLC, on November 2, 1999.
The Investment Manager and the Fund have entered into an investment advisory and
administration agreement with Salomon Brothers Asset Management Inc ('Investment
Adviser'), a wholly-owned subsidiary of Salomon Smith Barney Holdings Inc.
('SSBH'), which, in turn, is a subsidiary of Citigroup Inc., 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 Investment Adviser has delegated certain administrative services to
SSB Citi Fund Management LLC ('SSBC'), an affiliate of the Investment Adviser,
pursuant to a Sub-Administration Agreement between the Investment Adviser and
SSBC.
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 0.65% of the Fund's average weekly net assets for its services.
At August 31, 2000, the Investment Adviser owned 4,584 shares of the Fund and
Salomon Smith Barney Inc., another subsidiary of SSBH, owned 7 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.
Note 3. Portfolio Activity
During the year ended August 31, 2000, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
<TABLE>
<S> <C>
Purchases................................................... $262,827,681
------------
------------
Sales....................................................... $271,973,630
------------
------------
</TABLE>
PAGE 21
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
At August 31, 2000, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
<TABLE>
<S> <C>
Gross unrealized appreciation............................... $ 12,365,933
Gross unrealized depreciation............................... (20,328,401)
------------
Net unrealized depreciation................................. $ (7,962,468)
------------
------------
</TABLE>
Note 4. 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 2.00% and the maturity date is
November 8, 2000. The collateral for the loan was valued at $235,234,869 on
August 31, 2000 and is being held in a segregated account by the Fund's
custodian.
Note 5. 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. At August 31, 2000, the Fund held
loan participations with a total cost of $19,152,823.
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 6. '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 unrealized gain or loss recorded on such transactions.
PAGE 22
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Notes to Financial Statements (continued)
Note 7. 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 involves 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.
The net asset value of the Fund could be negatively affected if the Fund were
required to liquidate assets in other than an orderly manner and/or in adverse
market conditions to repay any bank loans outstanding.
Note 8. Capital Loss Carryforward
At August 31, 2000, the Fund had, for Federal income tax purposes, a capital
loss carryforward of approximately $15,469,000, available to offset future
capital gains through August 31, 2007. To the extent that these carryforward
losses are used to offset capital gains, it is probable that any gains so offset
will not be distributed.
Note 9. Dividends Subsequent to August 31, 2000
On September 1 and October 2, 2000, the Board of Directors of the Fund declared
a dividend from net investment income, each in the amount of $0.11875 per share,
payable on September 29 and October 27, 2000, to shareholders of record on
September 12 and October 17, 2000, respectively.
PAGE 23
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Financial Highlights
For a share of common stock outstanding throughout each fiscal year ended
August 31, except where noted:
<TABLE>
<CAPTION>
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF YEAR................ $10.98 $9.76 $16.18 $13.88 $11.11
-------- -------- -------- -------- --------
INCOME (LOSS) FROM OPERATIONS:
Net investment income............ 1.44 1.59 1.55 1.55 1.70
Net realized and unrealized
gain (loss).................... 0.95 1.30 (5.53) 2.46 2.56
-------- -------- -------- -------- --------
Total Income (Loss) From
Operations....................... 2.39 2.89 (3.98) 4.01 4.26
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS FROM:
Net investment income............ (1.43) (1.67) (1.62) (1.71) (1.49)
Net realized gains............... -- -- (0.49) -- --
Excess of net realized capital
gains.......................... -- -- (0.33) -- --
-------- -------- -------- -------- --------
Total Distributions............... (1.43) (1.67) (2.44) (1.71) (1.49)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR...... $11.94 $10.98 $9.76 $16.18 $13.88
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
MARKET VALUE, END OF YEAR......... $11.6250 $11.3125 $8.5625 $15.4375 $13.2500
TOTAL RETURN,
BASED ON MARKET VALUE(1)......... 17.57% 53.57% (34.35)% 31.28% 34.22%
RATIOS TO AVERAGE NET ASSETS:
Total expenses, including
interest expense............... 4.95% 4.22% 3.54% 3.55% 4.19%
Total expenses, excluding
interest expense (operating
expenses)...................... 1.30% 1.27% 1.31% 1.31% 1.32%
Net investment income............ 12.53% 14.26% 10.56% 10.14% 13.51%
PORTFOLIO TURNOVER RATE........... 111% 102% 144% 107% 92%
NET ASSETS, END OF YEAR (000S).... $176,070 $162,004 $142,129 $234,735 $201,398
Bank Loans Outstanding,
End of Year (000s)............... $75,000 $75,000 $75,000 $75,000 $75,000
Weighted Average Bank Loans
(000s)........................... $75,000 $75,000 $75,000 $75,000 $75,000
Weighted Average Interest Rate
on Bank Loans.................... 8.28% 6.42% 6.34% 6.65% 6.99%
----------------------------------------------------------------------------------------
</TABLE>
(1)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.
PAGE 24
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Report of Independent Accountants
To the Board of Directors and Shareholders of
Global Partners Income Fund Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations, of
changes in net assets and of cash flows and the financial highlights present
fairly, in all material respects, the financial position of Global Partners
Income Fund Inc. (the 'Fund') at August 31, 2000, the results of its operations
and its cash flows for the year then ended, the changes in its net assets for
each of the two years in the period then ended and the financial highlights for
each of the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as 'financial
statements') are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at August 31, 2000 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, N.Y.
October 17, 2000
PAGE 25
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Selected Quarterly Financial Information (unaudited)
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS:
<TABLE>
<CAPTION>
NET REALIZED
NET INVESTMENT & UNREALIZED
INCOME GAIN (LOSS)
--------------------- --------------------
QUARTERS ENDED* TOTAL PER SHARE TOTAL PER SHARE
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------
November 30, 1997........................................... $5,502 $0.38 $ (8,712) $(0.60)
February 27, 1998........................................... 5,521 0.38 5,620 0.39
May 29, 1998................................................ 5,518 0.38 (5,824) (0.40)
August 31, 1998............................................. 5,972 0.41 (71,568) (4.92)
November 30, 1998........................................... 6,790 0.46 26,849 1.84
February 26, 1999........................................... 5,897 0.41 (9,536) (0.66)
May 28, 1999................................................ 5,334 0.36 8,273 0.56
August 31, 1999............................................. 5,212 0.36 (6,403) (0.44)
November 30, 1999........................................... 4,987 0.34 8,798 0.60
February 29, 2000........................................... 4,911 0.33 7,029 0.48
May 31, 2000................................................ 5,316 0.36 (15,161) (1.02)
August 31, 2000............................................. 6,085 0.41 13,117 0.89
----------------------------------------------------------------------------------------------------------
</TABLE>
* Totals expressed in thousands of dollars except per share amounts.
PAGE 26
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Additional Shareholder Information (unaudited)
On February 24, 2000, a Special Meeting of the Fund's stockholders was held for
the purpose of voting on the following matters:
1. The approval of a new management agreement between PIMCO Advisors L.P.
and the Fund; and
2. The approval of a new investment advisory and administration agreement
among PIMCO Advisors L.P., Salomon Brothers Asset Management Inc and the
Fund.
3. The election of William D. Cvengros and Leslie H. Gelb as directors of
the Fund until the year 2002; and
4. The ratification of the selection of PricewaterhouseCoopers LLP as the
Fund's independent accountants for the fiscal year ended August 31, 2000.
The results of the vote on Proposal 1 were as follows:
<TABLE>
<CAPTION>
% OF SHARES VOTES % OF SHARES VOTES % OF SHARES
VOTES FOR VOTED FOR AGAINST VOTED AGAINST ABSTAINED ABSTAINED
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
13,365,345 97.0% 156,473 1.1% 259,266 1.9%
---------------------------------------------------------------------------
</TABLE>
The results of the vote on Proposal 2 were as follows:
<TABLE>
<CAPTION>
% OF SHARES VOTES % OF SHARES VOTES % OF SHARES
VOTES FOR VOTED FOR AGAINST VOTED AGAINST ABSTAINED ABSTAINED
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
13,376,170 97.1% 154,709 1.1% 250,205 1.8%
---------------------------------------------------------------------------
</TABLE>
The results of the vote on Proposal 3 were as follows:
<TABLE>
<CAPTION>
% OF SHARES VOTES % OF SHARES
NAME OF DIRECTORS VOTES FOR VOTED FOR AGAINST VOTED AGAINST
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William D. Cvengros 13,540,528 98.3% 240,566 1.7%
Leslie H. Gelb 13,541,528 98.3 239,566 1.7
----------------------------------------------------------------------------------------------------
</TABLE>
The results of the vote on Proposal 4 were as follows:
<TABLE>
<CAPTION>
% OF SHARES VOTES % OF SHARES VOTES % OF SHARES
VOTES FOR VOTED FOR AGAINST VOTED AGAINST ABSTAINED ABSTAINED
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
13,549,565 98.3% 71,780 0.5% 159,747 1.2%
---------------------------------------------------------------------------
</TABLE>
PAGE 27
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
PURSUANT TO CERTAIN RULES OF THE SECURITIES AND EXCHANGE COMMISSION, THE
FOLLOWING ADDITIONAL DISCLOSURE IS PROVIDED.
Form of Terms and Conditions of Amended and Restated Dividend
Reinvestment and Cash Purchase Plan (unaudited)
1. Each shareholder initially purchasing shares of common stock ('Shares') of
Global Partners Income Fund Inc. ('Fund') on or after September 6, 1996 will be
deemed to have elected to be a participant in the Amended and Restated Dividend
Reinvestment and Cash Purchase Plan ('Plan'), unless the shareholder
specifically elects in writing (addressed to the Agent at the address below or
to any nominee who holds Shares for the shareholder in its name) to receive all
income dividends and distributions of capital gains in cash, paid by check,
mailed directly to the record holder by or under the direction of American Stock
Transfer & Trust Company as the Fund's dividend-paying agent ('Agent'). A
shareholder whose Shares are held in the name of a broker or nominee who does
not provide an automatic reinvestment service may be required to take such
Shares out of 'street name' and register such Shares in the shareholder's name
in order to participate, otherwise dividends and distributions will be paid in
cash to such shareholder by the broker or nominee. Each participant in the Plan
is referred to herein as a 'Participant.' The Agent will act as Agent for each
Participant, and will open accounts for each Participant under the Plan in the
same name as their Shares are registered.
2. Unless the Fund declares a dividend or distribution payable only in the form
of cash, the Agent will apply all dividends and distributions in the manner set
forth below.
3. If, on the determination date, the market price per Share equals or exceeds
the net asset value per Share on that date (such condition, a 'market premium'),
the Agent will receive the dividend or distribution in newly issued Shares of
the Fund on behalf of Participants. If, on the determination date, the net asset
value per Share exceeds the market price per Share (such condition, a 'market
discount'), the Agent will purchase Shares in the open-market. The determination
date will be the fourth New York Stock Exchange trading day (a New York Stock
Exchange trading day being referred to herein as a 'Trading Day') preceding the
payment date for the dividend or distribution. For purposes herein, 'market
price' will mean the average of the highest and lowest prices at which the
Shares sell on the New York Stock Exchange on the particular date, or if there
is no sale on that date, the average of the closing bid and asked quotations.
4. Purchases made by the Agent will be made as soon as practicable commencing on
the Trading Day following the determination date and terminating no later than
30 days after the dividend or distribution payment date except where temporary
curtailment or suspension of purchase is necessary to comply with applicable
provisions of federal securities law; provided, however, that such purchases
will, in any event, terminate on the Trading Day prior to the 'ex-dividend' date
next succeeding the dividend or distribution payment date.
PAGE 28
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Form of Terms and Conditions of Amended and Restated Dividend
Reinvestment and Cash Purchase Plan (unaudited) (continued)
5. If (i) the Agent has not invested the full dividend amount in open-market
purchases by the date specified in paragraph 4 above as the date on which such
purchases must terminate or (ii) a market discount shifts to a market premium
during the purchase period, then the Agent will cease making open-market
purchases and will receive the uninvested portion of the dividend amount in
newly issued Shares (x) in the case of (i) above, at the close of business on
the date the Agent is required to terminate making open-market purchases as
specified in paragraph 4 above or (y) in the case of (ii) above, at the close of
business on the date such shift occurs; but in no event prior to the payment
date for the dividend or distribution.
6. In the event that all or part of a dividend or distribution amount is to be
paid in newly issued Shares, such Shares will be issued to Participants in
accordance with the following formula: (i) if, on the valuation date, the net
asset value per Share is less than or equal to the market price per Share, then
the newly issued Shares will be valued at net asset value per Share on the
valuation date; provided, however, that if the net asset value is less than 95%
of the market price on the valuation date, then such Shares will be issued at
95% of the market price and (ii) if, on the valuation date, the net asset value
per Share is greater than the market price per Share, then the newly issued
Shares will be issued at the market price on the valuation date. The valuation
date will be the dividend or distribution payment date, except that with respect
to Shares issued pursuant to paragraph 5 above, the valuation date will be the
date such Shares are issued. If a date that would otherwise be a valuation date
is not a Trading Day, the valuation date will be the next preceding Trading Day.
7. Participants have the option of making additional cash payments to the Agent,
monthly, in a minimum amount of $250, for investment in Shares. The Agent will
use all such funds received from Participants to purchase Shares in the open
market on or about the first business day of each month. To avoid unnecessary
cash accumulations, and also to allow ample time for receipt and processing by
the Agent, Participants should send in voluntary cash payments to be received by
the Agent approximately 10 days before an applicable purchase date specified
above. A Participant may withdraw a voluntary cash payment by written notice, if
the notice is received by the Agent not less than 48 hours before such payment
is to be invested.
8. Purchases by the Agent pursuant to paragraphs 4 and 7 above may be made on
any securities exchange on which the Shares of the Fund are traded, in the
over-the-counter market or in negotiated transactions, and may be on such terms
as to price, delivery and otherwise as the Agent shall determine. Funds held by
the Agent uninvested will not bear interest, and it is understood that, in any
event, the Agent shall have no liability in connection with any inability to
purchase Shares within the time periods herein provided, or with the timing of
any purchases effected. The Agent shall have no responsibility as to the value
of the Shares acquired for the
PAGE 29
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Form of Terms and Conditions of Amended and Restated Dividend
Reinvestment and Cash Purchase Plan (unaudited) (continued)
Participant's account. The Agent may commingle amounts of all Participants to be
used for open-market purchases of Shares and the price per Share allocable to
each Participant in connection with such purchases shall be the average price
(including brokerage commissions) of all Shares purchased by the Agent.
9. The Agent will maintain all Participants' accounts in the Plan and will
furnish written confirmations of all transactions in each account, including
information needed by Participants for personal and tax records. The Agent will
hold Shares acquired pursuant to the Plan in noncertificated form in the
Participant's name or that of its nominee, and each Participant's proxy will
include those Shares purchased pursuant to the Plan. The Agent will forward to
Participants any proxy solicitation material and will vote any Shares so held
for Participants only in accordance with the proxy returned by Participants to
the Fund. Upon written request, the Agent will deliver to Participants, without
charge, a certificate or certificates for the full Shares.
10. The Agent will confirm to Participants each acquisition made for their
respective accounts as soon as practicable but not later than 60 days after the
date thereof. Although Participants may from time to time have an undivided
fractional interest (computed to three decimal places) in a Share of the Fund,
no certificates for fractional shares will be issued. Dividends and
distributions on fractional shares will be credited to each Participant's
account. In the event of termination of a Participant's account under the Plan,
the Agent will adjust for any such undivided fractional interest in cash at the
market value of the Fund's Shares at the time of termination less the pro rata
expense of any sale required to make such an adjustment.
11. Any share dividends or split shares distributed by the Fund on Shares held
by the Agent for Participants will be credited to their respective accounts. In
the event that the Fund makes available to Participants rights to purchase
additional Shares or other securities, the Shares held for Participants under
the Plan will be added to other Shares held by the Participants in calculating
the number of rights to be issued to Participants.
12. The Agent's service fee for handling capital gains distributions or income
dividends will be paid by the Fund. Participants will be charged a pro rata
share of brokerage commissions on all open-market purchases.
13. Participants may terminate their accounts under the Plan by notifying the
Agent in writing. Such termination will be effective immediately if notice is
received by the Agent not less than 10 days prior to any dividend or
distribution record date; otherwise such termination will be effective on the
first Trading Day after the payment date for such dividend or distribution with
respect to any subsequent dividend or distribution. The Plan may be amended or
terminated by the Fund as applied to any voluntary cash payments made and any
income dividend or capital gains distribution paid subsequent to written notice
of the change or termination sent to Participants at
PAGE 30
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
--------------------------------------------------------------------------------
Form of Terms and Conditions of Amended and Restated Dividend
Reinvestment and Cash Purchase Plan (unaudited) (continued)
least 30 days prior to the record date for the income dividend or capital gains
distribution. The Plan may be amended or terminated by the Agent, with the
Fund's prior written consent, on at least 30 days' written notice to
Participants. Notwithstanding the preceding two sentences, the Agent or the Fund
may amend or supplement the Plan at any time or times when necessary or
appropriate to comply with applicable law or rules or policies of the Securities
and Exchange Commission or any other regulatory authority. Upon any termination,
the Agent will cause a certificate or certificates for the full Shares held by
each Participant under the Plan and cash adjustment for any fraction to be
delivered to each Participant without charge.
14. Any amendment or supplement shall be deemed to be accepted by each
Participant unless, prior to the effective date thereof, the Agent receives
written notice of the termination of the Participant's account under the Plan.
Any such amendment may include an appointment by the Agent in its place and
stead of a successor Agent under these terms and conditions, with full power and
authority to perform all or any of the acts to be performed by the Agent under
these terms and conditions. Upon any such appointment of an Agent for the
purpose of receiving dividends and distributions, the Fund will be authorized to
pay to such successor Agent, for each Participant's account, all dividends and
distributions payable on Shares of the Fund held in each Participant's name or
under the Plan for retention or application by such successor Agent as provided
in these terms and conditions.
15. In the case of Participants, such as banks, broker-dealers or other
nominees, which hold Shares for others who are beneficial owners ('Nominee
Holders'), the Agent will administer the Plan on the basis of the number of
Shares certified from time to time by each Nominee Holder as representing the
total amount registered in the Nominee Holder's name and held for the account of
beneficial owners who are to participate in the Plan.
16. The Agent shall at all times act in good faith and use its best efforts
within reasonable limits to insure the accuracy of all services performed under
this Agreement and to comply with applicable law, but assumes no responsibility
and shall not be liable for loss or damage due to errors unless such error is
caused by its negligence, bad faith, or willful misconduct or that of its
employees.
17. All correspondence concerning the Plan should be directed to the Agent at 40
Wall Street, 46th Floor, New York, New York 10005.
PAGE 31
<PAGE>
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<PAGE>
(This page intentionally left blank.)
<PAGE>
(This page intentionally left blank.)
<PAGE>
GLOBAL PARTNERS INCOME FUND INC.
---------
Directors
CHARLES F. BARBER
Consultant; formerly Chairman,
ASARCO Inc.
WILLIAM D. CVENGROS
Co-Chairman of the Board;
Chief Executive Officer of PocketVideo Corp.;
formerly Chief Executive Officer 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, Salomon Smith Barney Inc.
President and Director, SSB Citi Fund Management LLC and Travelers
Investment Advisers, 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
-------
Officers
WILLIAM D. CVENGROS
Co-Chairman of the Board
HEATH B. MCLENDON
Co-Chairman of the Board
STEPHEN J. TREADWAY
President
LEWIS E. DAIDONE
Executive Vice President and Treasurer
THOMAS K. FLANAGAN
Executive Vice President
NEWTON B. SCHOTT
Executive Vice President
BETH A. SEMMEL
Executive Vice President
PETER J. WILBY
Executive Vice President
ANTHONY PACE
Controller
CHRISTINA T. SYDOR
Secretary
-----------------
Global Partners
Income Fund Inc.
7 World Trade Center
New York, New York 10048
Telephone 1-888-777-0102
INVESTMENT MANAGER
PIMCO Advisors L.P.
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
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
NEW YORK STOCK EXCHANGE SYMBOL
GDF
--------------------------------------------------------------------------------
<PAGE>
---------------
GLOBAL PARTNERS -------------------
INCOME FUND INC. BULK RATE
U.S. POSTAGE
PAID
STATEN ISLAND, NY
PERMIT NO.
169
-------------------
ANNUAL REPORT
AUGUST 31, 2000
AMERICAN STOCK TRANSFER & TRUST COMPANY
40 WALL STREET
NEW YORK, NEW YORK 10005
STATEMENT OF DIFFERENCES
The division sign shall be expressed as...................................[div]
