<PAGE> 1
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
SBWANNUAL 10/99
------------------------------------------------------------------
SALOMON BROTHERS
WORLDWIDE INCOME FUND INC
ANNUAL REPORT
OCTOBER 31, 1999
-------------------------------------
SALOMON BROTHERS ASSET MANAGEMENT
---------------------------------
<PAGE> 2
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
November 9, 1999
Dear Shareholders:
We are pleased to provide you with this annual report for the Salomon Brothers
Worldwide Income Fund Inc. (the "Fund") as of October 31, 1999. 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 October 31, 1999 and financial
statements for the year ended October 31, 1999.
During the 12 months ended October 31, 1999, the net asset value of the Fund
increased from $9.70 per share at October 31, 1998 to $11.77 per share at
October 31, 1999. Dividends of $1.82 per share were declared during the period.
Assuming reinvestments of these dividends in additional shares of the Fund, the
total rate of return based on the net asset value for the 12-month period was
43.98%. During the same period, the JP Morgan Emerging Markets Bond Index Plus
("EMBI+"), a standard measure of return for the emerging debt markets, returned
19.98% and the Salomon Smith Barney High-Yield Market Index returned 4.24%. The
Fund's performance was the result of several factors, which we will highlight
below.
EMERGING MARKETS DEBT SECURITIES
The Fund's fiscal year opened in the aftermath of the Russian debt crisis of
1998. The debt securities of market issuers staged a modest recovery in November
but declined slightly in December 1998. This gradual stabilization was due
largely to monetary easing by the U.S. Federal Reserve Board ("Fed") and U.S.
Congressional approval of funding for the International Monetary Fund ("IMF").
The agreement, as well as a lack of forced selling by non-dedicated investors,
caused the market to rise from September through the end of the year. In January
1999, the market again traded down due to concerns over the Brazilian
devaluation of its local currency, which led to investors demanding a higher
risk premium from emerging markets debt.
Despite the market's turmoil at the beginning of the Fund's fiscal year and
worries stemming from Brazil's currency devaluation, global contagion was not as
extensive as might have been expected. This relative calm was due to a number of
positive world events, including the Fed monetary easing, congressional funding
for the IMF and a reduction in leverage dedicated to credit risk investments.
The Fed raised interest rates by 50 basis points during 1999 in response to the
ongoing strength of the U.S. economy. The process of anticipating these two
25-basis-point rate increases influenced bond market investors worldwide and
also impacted emerging markets debt. The Fed has emphasized its commitment to
price stability and its governors have made a number of public speeches
outlining their concerns. This high-profile approach on the part of
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
the Fed has increased the bond market's focus on the U.S. economy and the
outlook for increases in rates.
The following is a brief description of developments in key countries over the
past 12 months:
BRAZIL As mentioned previously, the most notable event to occur in Brazil
during the period was the devaluation of its currency, the Real, in January. The
devaluation caused spillover throughout Latin America, but the deterioration in
market sentiment was short lived. Brazil's recovery from the effects of its
January currency devaluation continues to be impressive. Brazil has exceeded the
fiscal targets outlined in its IMF agreement for the first six months of 1999.
In addition, employment rates and inflation levels have exceeded projections and
underscores the progress Brazil is making in reforming its economy. One very
compelling example of Brazil's progress in 1999 is the change in the overnight
borrowing rate set by the Central Bank. In an effort to stabilize the currency
and prevent an inflationary spike, the Central Bank set the overnight rate at
45% after the devaluation in January. That rate has been gradually reduced over
the ensuing months. The current overnight borrowing rate is 19.0%.
Brazil continues to have an ambitious structural reform agenda, which includes
changes to the taxation and social security schemes. Despite recent political
noise, the working relationship between the administration and Congress remains
intact and we expect further positive developments on these important
initiatives in 2000. Brazil returned 27.60% in the 12 months ended October 31,
1999. Our portfolio is slightly underweighted in Brazil, the second largest
component of the Index after Argentina.
ECUADOR In a development with potentially negative implications for all
emerging markets, Ecuador defaulted on the $96 million coupon payment on its
Brady bonds due on August 31, 1999. In addition, Ecuador also announced plans to
restructure $6 billion of its outstanding Brady debt. Any restructuring is
expected to take considerable time and involve a number of parties including the
Ecuadorian government and Congress, the IMF and international investors. It is
too early to make a definite determination of value in Ecuador until a firm
restructuring proposal is presented.
MEXICO Mexico remains a safe-haven investment in the emerging markets
universe. It is the only major Latin American country that has not been in
recession in 1999. Its political and economic leadership is very solid and its
need for external financing is quite low. We expect a smooth transition to new
leadership in the upcoming presidential election, the most open election in
Mexico's history.
VENEZUELA Venezuela was the second-best-performing emerging markets debt
issuer in the Index over the past 12 months, returning 36.23%. The presidential
race in November resulted in a decisive victory for Hugo Chavez, who won 56% of
the vote. This was the largest victory in 15 years and a clear mandate for
change. Although a controversial figure prior to the election, Chavez seems to
be softening his views with regard to a major shift in economic
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
policy, indicating that he is a proponent of continuing a dialogue with the IMF
and the current "shadow program." The Constituent Assembly, a key element of
President Chavez's plan to reform the Venezuelan political system, was elected
in July. In a stunning development, 91% of the seats were won by allies of
President Chavez. The agenda for the Assembly revolves around the drafting of a
new constitution for Venezuela. This document will have important implications
for the future of external capital investment in Venezuela. We believe the
political agenda will take precedence over any economic issues during the
balance of 1999 as the new constitution is reviewed and ratified. Oil prices at
current levels are giving Venezuela the economic flexibility to address the
constitutional changes. We have been substantially overweighted in Venezuela, a
position which contributed significantly to our performance.
RUSSIA Russia was the best-performing country in the Index over the past 12
months, returning 69.51%. The country continues to work with the IMF on an
expanded financing package. Spokesmen for the IMF indicated pleasant surprise at
the status of Russia's macroeconomic reforms. On the political front, Kremlin
intrigue continues as the Duma elections in December and the presidential
election in June 2000 approach. Prime Minister Stepashin was fired by President
Yeltsin and replaced by Vladimir Putin, the fifth Russian prime minister in 17
months. The upcoming Duma elections and the dialogue with the IMF will likely
keep volatility in Russia high over the next few months.
MOROCCO King Hassan II died after 38 years on the throne. He has been replaced
by his eldest son, King Mohammed VI. We expect the policies that have made
Morocco a steadily improving credit will be continued by the new king. In
another important development in Morocco, a cellular telephone license has been
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 initiatives in Morocco.
OUTLOOK
Our outlook for emerging markets debt is positive based upon the current spread
level of approximately 975 basis points over Treasuries. The economic rebound in
Asia and the apparent bottoming of the recession in many Latin American
countries points to an improving macroeconomic environment for emerging
countries. We expect the market to remain volatile but believe that at current
spread levels, we are being well compensated for this price risk.
U.S. HIGH-YIELD SECURITIES
The U.S. high-yield market returned 4.24% for the Fund's fiscal year, as
measured by the Salomon Smith Barney High-Yield Market Index. The high-yield
market benefited from a strong economy and a booming U.S. equity market during
the first half of the fiscal year, but
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
retraced a significant portion of its first-half gains during the second half of
the fiscal year due to:
1. a backup in U.S. Treasuries due to concerns about rising inflation;
2. sustained mutual fund outflows;
3. a heavy new-issue calendar;
4. a reduction in broker/dealer liquidity;
5. a volatile equity market; and
6. a rise in default rates, especially among marginal commodity producers.
For the period, the high-yield market's top performers included basic
industries, such as metals/mining, containers, chemicals and paper & forest
products, driven by a sustained recovery in commodity prices, the less cyclical
gaming and utilities sectors, telecommunications, cable & media and publishing,
which were driven by mergers & acquisitions activity, and banking. The worst
performers included health care, due to the industry's troubles with the
recently imposed Medicare reimbursement system, textile/apparel, which is
suffering from cheaper imports, services/other and consumer products on earnings
concerns at selected issuers, and leisure/lodging, retail, restaurants and
transportation.
On October 31, 1999, the high-yield market was yielding 11.56%, up from 11.11%
at the beginning of the fiscal year. The excess yield over Treasuries was 5.59%,
down from 6.64% at fiscal 1998 year-end.
Going forward, we expect the high-yield market to suffer continued volatility
through the end of the calendar year as the financial markets focus on
inflation, interest rate, credit and Y2K concerns, and broker/dealers and
investors withhold committing cash to the market. Early in the new calendar
year, we expect that at least some of these issues will be settled, which should
result in improved liquidity for the market.
In a continuing effort to provide timely information concerning Salomon Brothers
Worldwide 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 SBW 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).
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
All of us at Salomon Brothers Asset Management appreciate the confidence you
have demonstrated in the past and hope to continue to serve you in the future
years.
Sincerely,
<TABLE>
<S> <C>
/s/ Heath B. McLendon
Heath B. McLendon
Chairman and President
/s/ Peter J. Wilby /s/ Beth A. Semmel
Peter J. Wilby Beth A. Semmel
Executive Vice President Executive Vice President
</TABLE>
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
October 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) SOVEREIGN BONDS(e) -- 114.0% VALUE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ARGENTINA -- 17.2%
Republic of Argentina:
US$ 3,000 14.250%, 11/30/02(a)........................................ $ 2,865,000
200 BONOS, 6.000%, 3/31/23(a)................................... 152,000
7,040 FRB, Bearer, 6.8125%, 3/31/05(a)............................ 6,249,760
ARS 1,950 Global Bond, 8.750%, 7/10/02................................ 1,691,445
US$ 1,500 Global Bond, zero coupon, 10/15/03.......................... 995,625
3,150 Global Bond, zero coupon, 10/15/04.......................... 1,862,437
3,050 Global Bond, 9.164%, 4/10/05(a)............................. 2,714,500
5,855 Global Bond, 11.000%, 12/4/05............................... 5,598,844
2,425 Global Bond, 11.750%, 4/7/09................................ 2,386,200
1,425 Global Bond, 11.375%, 1/30/17............................... 1,368,000
------------
25,883,811
------------
BRAZIL -- 18.9%
Federal Republic of Brazil:
10,916 C Bond, 8.000%, 4/15/14(b).................................. 7,320,734
3,250 NMB, Series L, 7.000%, 4/15/09(a)........................... 2,398,411
8,100 DCB, Series L, 7.000%, 4/15/12(a)........................... 5,305,500
3,175 DCB, Bearer, Series L, 7.000%, 4/15/12(a)................... 2,079,625
3,000 FLIRB, Series L, 5.000%, 4/15/09(a)......................... 2,017,500
8,937 Global Bond, 14.500%, 10/15/09.............................. 9,267,669
------------
28,389,439
------------
BULGARIA -- 6.3%
14,000 Republic of Bulgaria, FLIRB, Series A, 2.750%, 7/28/12(a)... 9,450,000
------------
COLOMBIA -- 6.7%
Republic of Colombia:
2,750 7.270%, 6/15/03(d).......................................... 2,447,500
2,750 10.875%, 3/9/04............................................. 2,763,750
3,050 12.471%, 8/13/05(a)......................................... 2,867,000
2,650 Global Bond, 8.375%, 2/15/27................................ 1,954,375
------------
10,032,625
------------
COSTA RICA -- 4.7%
8,500 Costa Rica, Principal Bond, Series B, 6.25%, 5/21/15........ 7,097,500
------------
CROATIA -- 5.2%
3,678 Croatia Government, Series B, 6.45625, 7/31/06(a)........... 3,158,589
5,750 Croatia Government, Series A, 6.45625%, 7/31/10(a).......... 4,707,812
------------
7,866,401
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 6
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
October 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) SOVEREIGN BONDS(e) (CONTINUED) VALUE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ECUADOR -- 1.6%
US$ 6,450 Republic of Ecuador, Discount, 6.000%, 2/28/25(a)(g)........ $ 2,426,813
------------
IVORY COAST -- 1.5%
8,550 Ivory Coast, FLIRB, 2.00%, 3/31/18(a)....................... 2,180,250
------------
MEXICO -- 14.8%
United Mexican States:
2,750 Discount Bond, Series A, 6.9325%, 12/31/19 (issued with
value recovery rights)(a)................................... 2,408,828
1,600 Discount Bond, Series B, 6.9425%, 12/31/19 (issued with
value recovery rights)(a)................................... 1,401,500
750 Global Bond, 10.375%, 2/17/09............................... 764,062
6,675 Global Bond, 11.375%, 9/15/16............................... 7,150,594
2,220 Global Bond, 11.500%, 5/15/26............................... 2,481,960
6,650 Par Bond, Series W-A, 6.250%, 12/31/19 (issued with value
recovery rights)............................................ 4,983,344
4,000 Par Bond, Series W-B, 6.250%, 12/31/19 (issued with value
recovery rights)............................................ 2,997,500
------------
22,187,788
------------
PANAMA -- 2.8%
Republic of Panama:
1,500 Global Bond, 9.375%, 4/1/29................................. 1,419,375
2,000 IRB, 4.250%, 7/17/14(a)..................................... 1,498,750
1,617 PDI Bond, 6.500%, 7/17/16(a),(b)............................ 1,218,098
------------
4,136,223
------------
PERU -- 5.3%
12,575 Republic of Peru, PDI Bond, 4.500%, 3/07/17(a).............. 7,882,953
------------
PHILIPPINES -- 5.2%
Republic of Philippines, Global Bond:
3,950 9.875%, 1/15/19............................................. 3,836,438
3,868 9.500%, 10/21/24............................................ 3,950,195
------------
7,786,633
------------
POLAND -- 0.7%
1,201 Republic of Poland, PDI Bond, 5.000%, 10/27/14(a)........... 1,066,638
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 7
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
October 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) SOVEREIGN BONDS(e) (CONCLUDED) VALUE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RUSSIA -- 6.9%
Russia:
US$ 625 Federation, 11.750%, 6/10/03................................ $ 382,812
18,125 Federation, 12.750%, 6/24/28................................ 10,036,719
------------
10,419,531
------------
SOUTH KOREA -- 0.5%
750 Export-Import Bank of Korea, Global Bond, 7.625%, 10/1/02... 750,000
------------
URUGUAY -- 1.2%
1,974 Uruguay, DCB, Series B, 6.500%, 2/19/07(a).................. 1,855,263
------------
VENEZUELA -- 14.5%
Republic of Venezuela:
2,631 DCB, Series DL, 6.3125%, 12/18/07(a)........................ 2,117,907
17,679 FLIRB, Series A, 6.875%, 3/31/07(a)......................... 14,098,631
6,075 Global Bond, 13.625%, 8/15/18............................... 5,573,813
------------
21,790,351
------------
TOTAL SOVEREIGN BONDS (cost $164,119,200)................... 171,202,219
------------
<CAPTION>
LOAN PARTICIPATIONS(c)(e) -- 11.9%
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The People's Democratic Republic of Algeria:
932 Tranche A, 6.8125%, 3/4/00 (Chase Manhattan)(a)............. 920,170
3,591 Tranche 1, 6.8125%, 9/4/06 (Chase Manhattan)(a)............. 2,648,295
5,000 Tranche 3, 7.500%, 3/4/10 (Chase Manhattan)(a).............. 3,450,000
Government of Jamaica,
111 Tranche A, 7.000%, 10/15/00 (Chase Manhattan)(a)............ 104,417
Kingdom of Morocco:
Yen 376,424 Tranche A, 3.0175%, 1/1/09 (Goldman Sachs)(a)............... 2,843,353
US$ 7,941 Tranche B, 5.90625%, 1/1/04 (Morgan Stanley Emerging
Markets Inc., Bankers Trust)(a)......................... 7,303,894
Russia,
7,100 Principal Loan, 12/15/20
(JP Morgan)(f)(g)....................................... 652,313
------------
TOTAL LOAN PARTICIPATIONS (cost $19,014,837)................ 17,922,442
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
October 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) CORPORATE BONDS(e) -- 7.6% VALUE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Brazil:
US$ 2,000 Companhia Energetica De Sao Paul, 9.125% until 6/26/02
(9.625% thereafter), 6/26/07................................ $ 1,770,000
3,000 Tjiwi Kimia International Finance Company B.V., 10.000%,
8/1/04...................................................... 1,980,000
Mexico:
2,000 Grupo Industrial Durango, 12.000%, 7/15/01.................. 1,982,500
1,000 Hylsa S.A. de C.V., 9.250%, 9/15/07......................... 775,000
3,000 TFM Sa De Cv, Zero Coupon until 6/15/02 (11.750%,
thereafter), 6/15/09........................................ 1,740,000
4,825 United States:
Jordan Industries, Inc., Zero Coupon until 4/01/02 (11.750%
thereafter), 4/1/09....................................... 3,100,165
------------
TOTAL CORPORATE BONDS (cost $13,909,421).................... 11,347,665
------------
WARRANTS(e)(f) -- 1.9%
- ----------------------------------------------------------------------------------------------------------------------------
8,700 warrants Republic of Argentina (Exercise price of 93.30% plus accrued
interest per $1,000 bonds expiring 12/3/99)............... 19,575
40,788 warrants United Mexican States (Exchangeable into Mexican Global
Bonds, expiring on 2/18/00)............................... 2,834,766
------------
TOTAL WARRANTS (cost $1,835,619)............................ 2,854,341
------------
PURCHASED PUT OPTIONS(f) -- 0.0%
- ----------------------------------------------------------------------------------------------------------------------------
67,500 contracts Hong Kong Dollar, Exercise Price 7.8025HKD, expires
1/20/00..................................................... 25,582
32,300 contracts Hong Kong Dollar, Exercise Price 7.8165HKD, expires
1/26/00..................................................... 0
------------
TOTAL PURCHASED PUT OPTIONS (cost $808,127)................. 25,582
------------
REPURCHASE AGREEMENT -- 0.2%
- ----------------------------------------------------------------------------------------------------------------------------
255 State Street Bank & Trust, 5.180% due 11/1/99; Proceeds at
maturity-$255,110; (Fully collateralized by U.S. Treasury
Bonds, 12.000% due 8/15/13; Market Value $263,625) (cost
$255,000)................................................. 255,000
------------
TOTAL INVESTMENTS -- 135.6% (cost $199,942,204)............. 203,607,249
------------
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS -- (35.6)%... (53,423,588)
------------
NET ASSETS -- 100.0%
(equivalent to $11.77 per share on 12,762,580 common shares
outstanding).............................................. $150,183,661
============
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (concluded)
October 31, 1999
- --------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT OCTOBER 31, 1999:
<TABLE>
<CAPTION>
CONTRACTS IN EXCHANGE CONTRACTS AT DELIVERY UNREALIZED
TO DELIVER FOR VALUE DATE APPRECIATION
---------- ----------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C>
Sale................. Yen 345,500,000 US$3,044,053 US$3,313,990 11/2/99 (269,937)
</TABLE>
(a) Rate shown reflects current rate on variable rate instrument or instrument
with step coupon rates.
(b) Payment-in-kind security for which part of the income earned is capitalized
as additional principal.
(c) Participation interests were acquired through the financial institutions
indicated parenthetically.
(d) Pursuant to Rule 144A under the Securities Act of 1933, this security can
only be sold to qualified institutional investors.
(e) Security is segregated as collateral pursuant to a loan agreement.
(f) Non-income producing security.
(g) Security is currently in default.
<TABLE>
<C> <C> <S>
C Bond -- Capitalization Bond
DCB -- Debt Conversion Bond.
FLIRB -- Front Loaded Interest Reduction Bond.
FRB -- Floating Rate Bond.
IRB -- Interest Reduction Bond.
NMB -- New Money Bond.
PDI -- Past Due Interest.
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 10
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost -- $199,942,204)................ $203,607,249
Receivable for investments sold............................. 7,376,376
Interest receivable......................................... 4,189,082
Cash........................................................ 667
Prepaid expenses............................................ 11,005
------------
Total assets........................................ 215,184,379
------------
LIABILITIES
Loan payable(Note 5)........................................ 60,000,000
Accrued interest expense on loan(Note 5).................... 837,520
Payable for investments purchased........................... 3,445,380
Accrued expenses............................................ 319,332
Net unrealized depreciation on forward foreign currency
contracts................................................. 269,937
Accrued management Fee...................................... 110,049
Accrued administration...................................... 18,500
------------
Total liabilities................................... 65,000,718
------------
NET ASSETS
Common Stock ($.001 par value, authorized 100,000,000;
12,762,580 shares outstanding)............................ 12,763
Additional paid-in capital.................................. 177,804,801
Undistributed net investment income......................... 3,237,603
Accumulated net realized loss on investments................ (34,269,932)
Net unrealized appreciation on investments and foreign
currency translations..................................... 3,398,426
------------
Net assets.......................................... $150,183,661
------------
NET ASSET VALUE PER SHARE ($150,183,661 / 12,762,580
shares)................................................... $ 11.77
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 11
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1999
<TABLE>
<S> <C> <C>
NET INVESTMENT INCOME
INCOME
Interest............................................ $27,857,609
EXPENSES
Interest on loan.................................... $ 3,926,606
Management fee...................................... 1,232,488
Administration fee.................................. 205,415
Custody fee......................................... 105,000
Printing and mailing fees........................... 50,000
Legal fee........................................... 46,000
Accounting fee...................................... 62,000
Audit & Tax fees.................................... 58,000
Transfer Agent fees................................. 41,975
Registration fees................................... 24,195
Directors' fees & expenses.......................... 32,850
Amortization of deferred organization expense....... 3,582
Other............................................... 8,516
-----------
5,796,627
-----------
Net Investment Income................................... 22,060,982
-----------
NET REALIZED GAIN/(LOSS) ON:
Investments......................................... (15,010,792)
Foreign Currency Transactions....................... 51,568 (14,959,224)
----------- -----------
CHANGE IN NET UNREALIZED APPRECIATION ON:
Investments......................................... 42,627,226
Translation of Foreign Denominated Assets and
Liabilities......................................... (252,607) 42,374,619
----------- -----------
Net Realized Loss and Change in Net Unrealized
Appreciation.............................................. 27,415,395
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $49,476,377
-----------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1999 1998
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income................................... $ 22,060,982 $ 23,671,782
Net realized loss on investments........................ (14,959,224) (18,669,880)
Change in net unrealized appreciation................... 42,374,619 (46,797,908)
------------ ------------
Net increase (decrease) in net assets from operations... 49,476,377 (41,796,006)
------------ ------------
DIVIDENDS
From capital gains...................................... -- (21,074,711)
From net investment income.............................. (23,109,802) (12,547,816)
------------ ------------
(23,109,802) (33,622,527)
------------ ------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares issued in reinvestment of dividends
(89,382 and 16,065 shares issued respectively)........ 940,355 155,564
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... 27,306,930 (75,262,969)
------------ ------------
NET ASSETS
Beginning of period..................................... 122,876,731 198,139,700
------------ ------------
End of period(includes undistributed net investment
income of $3,237,603 and $4,234,147 respectively)..... $150,183,661 $122,876,731
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 13
<PAGE> 15
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
For the Year Ended October 31, 1999
<TABLE>
<S> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Purchases of long-term portfolio investments and options
on investments......................................... $(152,343,181)
Proceeds from disposition of long-term portfolio
investments, options on investments and principal
paydowns............................................... 159,588,470
Net purchases of short-term portfolio investments....... (255,000)
-------------
6,990,289
Net investment income................................... 22,060,982
Accretion of discount on investments.................... (7,423,156)
Interest on payment-in-kind bonds....................... (546,315)
Amortization of organization expenses................... 3,582
Net change in receivables/payables related to
operations............................................. 1,707,042
-------------
Net cash flows provided by operating activities..... 22,792,424
-------------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Proceeds from shares issued in reinvestment of
dividends.............................................. 940,355
Cash distributions paid................................. (23,109,802)
-------------
Net cash used for financing activities.............. (22,169,447)
-------------
Net increase in cash........................................ 622,977
Cash at beginning of period................................. (622,310)
-------------
Cash at end of period....................................... $ 667
-------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 14
<PAGE> 16
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION
The Salomon Brothers Worldwide Income Fund Inc (the "Fund") was incorporated in
Maryland on October 21, 1993 and is registered under the Investment Company Act
of 1940, as amended, as a non-diversified, closed-end management investment
company. The Fund commenced operations on December 31, 1993. The Fund seeks to
maintain a high level of current income by investing primarily in a portfolio of
high-yield foreign sovereign debt securities and high-yield non-U.S. and U.S.
corporate 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 (except as described below)
(i) at the last sales price prior to the time of determination if there was a
sales price on the date of determination, (ii) at the mean between the last
current bid and asked prices if there was no sales price on such date and bid
and asked quotations are available and (iii) at the bid price if there was no
sales price on such date and only bid quotations are available. Publicly traded
sovereign bonds are typically traded internationally in the over-the-counter
market and will be valued at the mean between the last current bid and asked
price as of the close of business of that market. However, where the spread
between bid and asked price exceeds five percent of the par value of the
security, the security is valued at the bid price. Securities may 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.
REPURCHASE AGREEMENTS. When entering into repurchase agreements, it is the
Fund's policy that its custodian takes possession of the underlying collateral
securities, the value of which at least equals the principal amount of the
repurchase transaction, including accrued interest. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral is
marked-to-market to ensure the adequacy of the collateral. If the seller
defaults and the value of the collateral declines or if bankruptcy proceedings
are commenced with respect to the seller of the security, realization of the
collateral by the Fund may be delayed or limited.
PAGE 15
<PAGE> 17
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and liabilities -- at
the 12:00 noon rate of exchange reported by Reuters;
(ii) purchases and sales of investment securities, income and expenses -- at the
rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates
and market values at the close of the period, the Fund does not isolate that
portion of the results of operations arising as a result of changes in the
foreign exchange rates from the fluctuations arising from changes in the market
prices of securities held at the end of the period. Similarly, the Fund does not
isolate the effect of changes in foreign exchange rates from the fluctuations
arising from changes in the market prices of portfolio securities sold during
the period.
Net realized gains on foreign currency transactions represent net foreign
exchange gains from disposition of foreign currency, gains or losses realized
between the trade and settlement dates on security transactions, and the
difference between amounts of interest recorded on the Fund's books and the U.S.
dollar equivalent amounts actually received. Net currency gains and losses from
valuing foreign currency denominated assets, except portfolio securities, and
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation/depreciation on investments and foreign currency
translation.
FORWARD CURRENCY CONTRACTS. A forward currency contract ("forward contract")
is a commitment to purchase or sell a foreign currency at a future date at a
negotiated forward rate. The contracts are valued on each valuation date at
current exchange rates and any unrealized gain or loss is included in net
unrealized appreciation or depreciation on investments and foreign currencies.
The Fund records realized gains or losses on delivery of the currency or at the
time the forward contract is extinguished (compensated) by entering into a
closing transaction prior to delivery. This gain or loss, if any, is included in
net realized gain (loss) on foreign currency transactions.
CASH FLOW INFORMATION. The Fund invests in securities and distributes
dividends and distributions from net investment income and from net realized
gains which are paid in cash and may be reinvested at the discretion of
shareholders. These activities are reported in the Statement of Changes in Net
Assets and additional information on cash receipts and cash payments is
presented in the Statement of Cash Flows.
Accounting practices that do not affect reporting activities on a cash basis
include carrying investments at value and amortizing discounts or premiums on
debt obligations. For the year ended October 31, 1999, the Fund paid interest
expense of $3,099,738.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded on the trade date. Realized gains and losses are calculated on the
identified cost basis. Interest income is recorded on the accrual basis and the
Fund accretes discount on securities purchased using the effective interest
method.
TAXES. It is the Fund's intention to continue to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all
PAGE 16
<PAGE> 18
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
of its taxable income and capital gains, if any, to shareholders. Therefore, no
federal income tax or excise tax provision is required.
DIVIDENDS. The Fund declares and pays dividends monthly from net investment
income. Net long-term capital gains, if any, in excess of loss carryforwards
will be distributed annually. Dividends are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in accordance
with federal income tax regulations which may differ from generally accepted
accounting principles. These "book/tax" differences are either considered
temporary or permanent in nature. To the extent these differences are permanent
in nature, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences do not require
reclassifications. 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 and distributions in excess of net realized capital gains.
DEFERRED ORGANIZATION EXPENSES. A total of $116,182 was incurred in connection
with the organization of the Fund. These costs have been deferred and are being
amortized on a straight-line basis over a period of sixty months from the date
the Fund commenced investment operations. As of October 31, 1999, all deferred
organization expenses have been fully amortized.
NOTE 3. MANAGEMENT AND ADMINISTRATION FEES AND OTHER TRANSACTIONS
The Fund has an Investment Advisory Agreement with Salomon Brothers Asset
Management Inc (the "Adviser"), a wholly-owned subsidiary of Salomon Smith
Barney Holdings Inc. ("SSBH"). The Fund's Adviser is responsible for the day to
day 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. The agreement with the 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 Adviser, with and into SSBH, which occurred on
November 28, 1997. The Fund pays the Adviser a monthly fee for its advisory
services at an annual rate of .90% of the value of the Fund's average weekly net
assets.
The Adviser also serves as Administrator to the Fund and Prudential Mutual Fund
Management, Inc. serves as Sub-administrator. The Administrator and
Sub-administrator perform certain administrative services necessary for the
operation of the Fund. Under the terms of the Administration Agreement, the Fund
pays the Administrator a monthly fee at an annual rate of .15% of the value of
the Fund's average weekly net assets up to $250 million and .125% of the value
of such net assets in excess of $250 million for its services, out of which the
Administrator pays the Sub-administrator eighty percent of such fees collected
for its services.
At October 31, 1999, the Adviser owned 8,474 shares of the Fund.
Certain officers and/or directors of the Fund are also officers and/or directors
of the Adviser.
PAGE 17
<PAGE> 19
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
The Fund pays each Director not affiliated with the Adviser a fee of $5,000 per
year, a fee of $700 for attendance at each in-person meeting, a fee of $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 AND FEDERAL INCOME TAX STATUS
Purchases and sales of investment securities, other than short-term investments,
for the year ended October 31, 1999 aggregated $152,723,226 and $163,535,052,
respectively.
The federal income tax basis of the Fund's investments at October 31, 1999 was
substantially the same as the basis for financial reporting and, accordingly,
net unrealized depreciation for federal income tax purposes was $3,665,045
(gross unrealized appreciation -- $10,252,732; gross unrealized
depreciation -- $6,587,687).
During the year ended October 31, 1999, permanent book/tax differences of
$51,568 arising from foreign currency transactions have been reclassified to
undistributed net investment income from accumulated net realized loss on
investments. Net investment income, net realized gains (losses) on investments
and net assets were not affected by this reclassification.
The Fund has a capital loss carry forward as of October 31, 1999 of 17,450,000
which expires in 2006 and 16,107,000 which expires in 2007. To the extent future
capital gains are offset by such capital losses, the Fund does not anticipate
distributing such gains to shareholders.
NOTE 5. BANK LOAN
The Fund has outstanding a $60,000,000 loan pursuant to a secured loan agreement
with ING Baring (U.S.) Capital Corporation. The current interest rate is
7.17875% and the maturity date is November 22, 1999. The collateral for the loan
was valued at $203,308,599 on October 31, 1999 and is being held in a segregated
account by the Fund's custodian. The loan was renewed on November 22, 1999 with
an interest rate of 8.03375% and a maturity date of May 22, 2000.
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 6. LOAN PARTICIPATIONS
The Fund invests in U.S. dollar-denominated fixed and floating rate loans
("Loans") arranged through private negotiations between a foreign sovereign
entity and one or more financial institutions ("Lenders"). The Fund invests in
such Loans in the form of participations in Loans ("Participations") or
assignments of all or a portion of loans from third parties ("Assignments").
Participations typically result in the Fund having a contractual relationship
only with the Lender, not with the sovereign borrower. The Fund has the right to
receive
PAGE 18
<PAGE> 20
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
payments of principal, interest and any fees to which it is entitled only from
the Lender selling the Participation and only upon receipt by the Lender of the
payments from the borrower. The market value of the Fund's loan participations
at October 31, 1999 was $17,922,442.
In connection with purchasing Participations, the Fund generally has no right to
enforce compliance by the borrower with the terms of the loan agreements
relating to the loan, nor any rights of set-off against the borrower, and the
Fund will not benefit directly from any collateral supporting the Loan in which
it has purchased the Participation. As a result, the Fund assumes the credit
risk of both the borrower and the Lender that is selling the Participation. The
Fund may have difficulty disposing of Participations and Assignments because the
market for such instruments is not highly liquid.
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.
NOTE 8. CREDIT AND MARKET 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 investments held by the Fund. At
October 31, 1999, the Fund has a concentration of credit risk in sovereign debt
of emerging market countries.
Investing in foreign securities may also involve certain considerations and
risks not typically associated with those of domestic origin as a result of,
among other factors, the level of governmental supervision and regulation of
foreign securities markets and the risks of loss from currency devaluations and
other exchange rate fluctuations.
NOTE 9. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Fund enters into forward contracts in order to hedge its exposure to changes
in foreign currency exchange rates on its foreign portfolio holdings or on
specific receivables and payables denominated in a foreign currency. Forward
contracts involve elements of market
PAGE 19
<PAGE> 21
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
risk in excess of the amount reflected in the Statement of Assets and
Liabilities. The Fund bears the risk of an unfavorable change in the foreign
exchange rate underlying the forward contract. Risks may also arise upon
entering into these contracts from the potential inability of the counterparties
to meet the terms of their contracts. As of October 31, 1999, the Fund has an
outstanding contract to sell 345,500,000 Japanese Yen for US$ 3,044,053 for a
scheduled settlement of November 2, 1999.
Consistent with its objective to seek high current income, the Fund invests in
instruments whose values and interest rates may be linked to foreign currencies,
interest rates, indices or some other financial indicator. The value at maturity
or interest rates for these instruments will increase or decrease according to
the change in the indicator to which it is indexed. These securities are
generally more volatile in nature and the risk of loss of principal or interest
is greater.
NOTE 10. EVENTS SUBSEQUENT TO OCTOBER 31, 1999
Subsequent to October 31, 1999, the Board of Directors of the Fund declared
dividends of $.11875 per common share payable November 26 and December 23, 1999
to shareholders of record on November 16 and December 14, 1999, respectively.
PAGE 20
<PAGE> 22
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Data for a share of common stock outstanding throughout each year:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period............... $ 9.70 $ 15.65 $ 15.25 $ 10.71 $ 11.31
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.............................. 1.74 1.87 1.59 1.99 1.71
Net realized and unrealized gain (loss) on
investments...................................... 2.15 (5.16) .30 3.98 (.89)
-------- -------- -------- -------- --------
Total from investment operations............... 3.89 (3.29) 1.89 5.97 .82
-------- -------- -------- -------- --------
LESS DIVIDENDS AND DISTRIBUTIONS:
From net investment income......................... (1.82) (1.66) (1.49) (1.43) (1.37)
From net realized gains............................ -- (1.00) -- -- --
In excess of net investment income................. -- -- -- -- (.05)
-------- -------- -------- -------- --------
Total dividends and distributions.............. (1.82) (2.66) (1.49) (1.43) (1.42)
-------- -------- -------- -------- --------
Offering costs with respect to issuance of
shares........................................... -- -- -- -- --
-------- -------- -------- -------- --------
Net asset value, end of period..................... $ 11.77 $ 9.70 $ 15.65 $ 15.25 $ 10.71
======== ======== ======== ======== ========
Market price per share, end of period.............. $11.0625 $ 10.875 $13.8125 $ 14.00 $ 11.375
======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN(a)......................... 20.49% 4.83% 8.93% 37.34% 20.61%
RATIOS TO AVERAGE NET ASSETS:
Total expenses, including interest expense..... 4.22% 3.48% 3.24% 3.91% 5.04%
Total expenses, excluding interest expense
(operating expenses)......................... 1.36% 1.32% 1.36% 1.44% 1.42%
Net investment income.......................... 16.06% 13.35% 9.52% 15.25% 16.70%
SUPPLEMENTAL DATA:
Net assets, end of period (000)................ $150,184 $122,877 $198,140 $193,014 $135,540
Average net assets (000)....................... $137,389 $177,337 $211,806 $165,059 $129,516
Portfolio turnover rate........................ 80% 122% 175% 97% 101%
Asset coverage for Loan outstanding............ 350% 305% 430% 422% 326%
Weighted average bank loan (000)............... $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000
Weighted average interest rate on bank loan.... 6.45% 6.40% 6.62% 6.80% 7.83%
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
(a) Total investment return is calculated assuming a purchase of common stock at the current market price on the first day and a
sale at the current market price on the last day of each period reported. Dividends and distributions are assumed, for purposes
of this calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Total investment return
does not reflect brokerage commissions. Total investment return for periods of less than one full year are not annualized.
</TABLE>
See accompanying notes to financial statements.
PAGE 21
<PAGE> 23
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Salomon Brothers Worldwide Income Fund Inc
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investments, and the related statements of operations, of cash
flows and of changes in net assets and the financial highlights present fairly,
in all material respects, the financial position of Salomon Brothers Worldwide
Income Fund Inc (the "Fund") at October 31, 1999, the results of its operations
and 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 generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
New York, NY 10036
December 20, 1999
PAGE 22
<PAGE> 24
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
SELECTED QUARTERLY FINANCIAL INFORMATION
(unaudited)
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS:
<TABLE>
<CAPTION>
NET REALIZED AND
CHANGE IN UNREALIZED NET INCREASE
GAINS (LOSSES) ON (DECREASE) IN NET
NET INVESTMENT INVESTMENTS AND ASSETS RESULTING FROM
INCOME FOREIGN CURRENCIES OPERATIONS
--------------------- ----------------------- -----------------------
TOTAL PER PER PER
QUARTERLY PERIOD INCOME AMOUNT SHARE AMOUNT SHARE AMOUNT SHARE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
November 1, 1994
to January 31, 1995......... 6,109,343 4,500,735 .356 (54,531,478) (4.308) (50,030,743) (3.952)
February 1, 1995
to April 30, 1995........... 6,621,361 5,010,043 .396 31,740,675 2.508 36,750,718 2.904
May 1, 1995
to July 31, 1995............ 7,260,442 5,647,319 .446 9,571,130 .756 15,218,449 1.202
August 1, 1995
to October 31, 1995......... 8,164,877 6,466,109 .511 1,986,368 .157 8,452,477 .668
November 1, 1995
to January 31, 1996......... 7,973,433 6,446,891 .509 35,190,168 2.780 41,637,059 3.290
February 1, 1996
to April 30, 1996........... 7,977,538 6,270,053 .495 (8,530,399) (.674) (2,260,346) (.179)
May 1, 1996
to July 31, 1996............ 7,736,752 6,151,223 .486 4,345,548 .343 10,496,771 .829
August 1, 1996
to October 31, 1996......... 7,933,368 6,299,516 .498 19,336,837 1.528 25,636,353 2.026
November 1, 1996
to January 31, 1997......... 7,325,883 5,660,634 .447 19,679,979 1.555 25,340,613 2.002
February 1, 1997
to April 30, 1997........... 6,653,671 4,990,215 .394 (8,834,602) (.698) (3,844,387) (.304)
May 1, 1997
to July 31, 1997............ 6,531,327 4,820,659 .381 24,275,638 1.918 29,096,297 2.299
August 1, 1997
to October 31, 1997......... 6,519,795 4,699,606 .371 (31,370,200) (2.478) (26,670,594) (2.107)
November 1, 1997
to January 31, 1998......... 8,094,991 6,467,875 .511 11,435,981 .904 17,903,856 1.415
February 1, 1998
to April 30, 1998........... 6,995,227 5,384,420 .425 8,028,896 .635 13,413,316 1.060
May 1, 1998
to July 31, 1998............ 7,207,593 5,598,937 .442 (25,557,878) (2.019) (19,958,941) (1.577)
August 1, 1998
to October 31, 1998......... 7,548,553 6,220,550 .492 (59,374,787) (4.680) (53,154,237) (4.188)
November 1, 1998
to January 31, 1999......... 7,463,852 6,159,112 .484 4,274,672 .336 10,433,784 .82
February 1, 1999
to April 30, 1999........... 7,220,621 5,878,798 .466 24,758,841 1.934 30,637,639 2.40
May 1, 1999
to July 31, 1999............ 6,617,080 4,988,099 .391 (7,538,615) (.591) (2,550,516) (.200)
August 1, 1999
to October 31, 1999......... 6,556,056 5,034,973 .399 5,920,497 .471 10,955,470 .870
<CAPTION>
DIVIDENDS AND
DISTRIBUTIONS
---------------------- SHARE PRICE
PER -------------------
QUARTERLY PERIOD AMOUNT SHARE HIGH LOW
- ----------------------------- --------------------------------------------
<S> <C> <C> <C> <C>
November 1, 1994
to January 31, 1995......... 4,509,103 .356 11 3/4 9 1/4
February 1, 1995
to April 30, 1995........... 4,509,103 .356 11 1/8 9 3/8
May 1, 1995
to July 31, 1995............ 4,509,105 .356 11 3/4 10 3/4
August 1, 1995
to October 31, 1995......... 4,509,105 .356 11 5/8 11
November 1, 1995
to January 31, 1996......... 4,509,110 .356 13 3/8 11 1/8
February 1, 1996
to April 30, 1996........... 4,509,109 .356 13 1/2 12 1/8
May 1, 1996
to July 31, 1996............ 4,509,113 .357 13 3/8 12 5/8
August 1, 1996
to October 31, 1996......... 4,509,111 .356 14 1/4 13 1/4
November 1, 1996
to January 31, 1997......... 5,268,534 .416 13 7/8 14 7/8
February 1, 1997
to April 30, 1997........... 4,509,110 .356 14 15 1/4
May 1, 1997
to July 31, 1997............ 4,509,104 .356 16 3/16 14 5/8
August 1, 1997
to October 31, 1997......... 4,509,104 .356 16 3/16 13 9/16
November 1, 1997
to January 31, 1998......... 20,093,217 1.589 15 3/4 13 5/8
February 1, 1998
to April 30, 1998........... 4,509,104 .356 15 11/16 14 11/16
May 1, 1998
to July 31, 1998............ 4,509,112 .356 15 1/4 13 7/8
August 1, 1998
to October 31, 1998......... 4,511,094 .356 14 1/2 7 1/8
November 1, 1998
to January 31, 1999......... 9,492,434 .752 12 1/4 9 5/8
February 1, 1999
to April 30, 1999........... 4,533,053 .356 12 10 3/16
May 1, 1999
to July 31, 1999............ 4,538,585 .356 12 13/16 11 5/8
August 1, 1999
to October 31, 1999......... 4,545,730 .356 11 15/16 10 3/8
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<C> <S>
* Commencement of investment operations.
</TABLE>
See accompanying notes to financial statements.
PAGE 23
<PAGE> 25
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- --------------------------------------------------------------------------------
FORM OF AMENDED AND RESTATED TERMS AND CONDITIONS OF
DIVIDEND REINVESTMENT PLAN
Pursuant to certain rules of the Securities and Exchange Commission, the
following additional disclosure is provided.
1. Each shareholder initially purchasing shares of common stock ("Shares") of
Salomon Brothers Worldwide Income Fund Inc (the "Fund") on or after September 6,
1996 will be deemed to have elected to be a participant in the Amended and
Restated Dividend Reinvestment Plan (the "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 (the "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,
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
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FORM OF AMENDED AND RESTATED TERMS AND CONDITIONS OF
DIVIDEND REINVESTMENT PLAN (continued)
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.
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. The open-market purchases provided for 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 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.
8. The Agent will maintain all Participant 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
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
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FORM OF AMENDED AND RESTATED TERMS AND CONDITIONS OF
DIVIDEND REINVESTMENT PLAN (continued)
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.
9. 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.
10. 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.
11. 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.
12. 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 ten 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 dividend or capital gains distribution
paid subsequent to written notice of the change or termination sent to
Participants at least 30 days prior to the record date for the 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
Plan 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
PAGE 26
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
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FORM OF AMENDED AND RESTATED TERMS AND CONDITIONS OF
DIVIDEND REINVESTMENT PLAN (continued)
adjustment for any fraction to be delivered to each Participant without charge.
If the Participant elects by notice to the Agent in writing in advance of such
termination to have the Agent sell part or all of a Participant's Shares and
remit the proceeds to Participant, the Agent is authorized to deduct a $2.50 fee
plus brokerage commission for this transaction from the proceeds.
13. 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.
14. 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.
15. 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.
16. All correspondence concerning the Plan should be directed to the Agent at 40
Wall Street, 46th Floor, New York, New York 10005.
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SALOMON BROTHERS WORLDWIDE INCOME FUND INC
- -----------
DIRECTORS
CHARLES F. BARBER
Consultant; formerly Chairman,
ASARCO Incorporated
DANIEL P. CRONIN
Vice President -- General Counsel,
Pfizer International Inc.
HEATH B. McLENDON
Managing Director,
Salomon Smith Barney Inc.
President and Director, SSB CitiFund
Management LLC and Travelers
Investment Advisors, 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,
The Fletcher School of Law & Diplomacy, Tufts University
- ---------
OFFICERS
HEATH B. McLENDON
Chairman and President
LEWIS E. DAIDONE
Executive Vice President and Treasurer
THOMAS FLANAGAN
Executive Vice President
PETER J. WILBY
Executive Vice President
BETH A. SEMMEL
Executive Vice President
MAUREEN O'CALLAGHAN
Executive Vice President
JAMES E. CRAIGE
Executive Vice President
CHRISTINA T. SYDOR
Secretary
ANTHONY PACE
Controller
- ----------------------
SALOMON BROTHERS
WORLDWIDE INCOME FUND INC
Seven World Trade Center
New York, New York 10048
For information call (toll free)
1-888-777-0102
INVESTMENT ADVISER AND ADMINISTRATOR
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048
SUB-ADMINISTRATOR
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, New York 10292
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
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
SBW
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Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase, from time to time, shares of
its common stock at market prices.
- ------------------------------------------------------------------------------
This report is for stockholder information.
This is not a prospectus intended for use in
the purchase or sale of Fund shares.
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