<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
SBWSEMI 10/00
-------------------------------------------------------------------
SALOMON BROTHERS
WORLDWIDE INCOME FUND INC
ANNUAL REPORT
October 31, 2000
-------------------------------------
SALOMON BROTHERS ASSET MANAGEMENT
---------------------------------
<PAGE> 2
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
November 24, 2000
Dear Shareholders:
We are pleased to provide you this annual report for the Salomon Brothers
Worldwide Income Fund Inc (the "Fund") as of October 31, 2000. Included in this
report is 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 bond
market, a listing of the Fund's investments as of October 31, 2000 and audited
financial statements for the year ended October 31, 2000.
During the twelve months ended October 31, 2000, the net asset value ("NAV")(1)
of the Fund increased from $11.77 per share at October 31, 1999 to $12.96 per
share at October 31, 2000. In addition, income dividends totaling $1.67 were
paid during this 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 period was 25.30%.
During the same period, the J.P. Morgan Emerging Markets Bond Index Plus
("EMBI+"),(2) returned 20.49% and the Salomon Smith Barney High-Yield Bond
Market Index ("SSB High Yield Bond Market Index ")(3) declined 1.29%. The Fund's
performance was the result of several factors which we will highlight below.
EMERGING MARKET DEBT
The Fund's fiscal year opened in the lead up to Y2K, which after a year of
frenzied discussions and predicted financial disasters passed by with no major
disruptions. Emerging markets debt returns were impressive. The Fund returned
25.30%, outperforming the EMBI+ which returned 20.49% for the Fund's fiscal year
ending October 31, 2000.
The U.S. Federal Reserve Board ("Fed") was extremely active over the course of
the year, raising short-term interest rates 175 basis points4 as it sought to
slow the rate of growth in the U.S. economy and keep inflation in check. The
shift to floating currency exchange regimes in a number of emerging market
countries has reduced the direct impact of U.S. interest rate increases on their
economies. Floating exchange regimes help insulate domestic rates from moves in
U.S. rates.
---------------
1 The NAV is calculated by subtracting total liabilities from the closing value
of all securities held by the Fund (plus all other assets) and dividing the
results (total net assets) by the total number of shares outstanding. The NAV
fluctuates with changes in the value of the securities in which the Fund has
invested. However, the price at which the investor may buy or sell shares of
the Fund is at their market (NYSE) price as determined by supply and demand.
2 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.
3 SSB High-Yield Bond Market Index is a broad-based unmanaged index of high
yield securities. Please note an investor cannot invest directly in an index.
4 A basis point is 0.01% or one one-hundredth of a percent.
PAGE 1
<PAGE> 3
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
In this rising interest rate environment, emerging markets continued to perform
well relative to other fixed-income asset classes. The Salomon Smith Barney
Broad Investment Grade Index ("SSB BIG Bond Index")5 returned 7.28% while the
SSB High Yield Bond Market Index declined 1.29% for the period.
Return volatilities for emerging markets debt remained substantially lower
relative to year-earlier levels. During the period, volatility for the EMBI+
totaled 8.27% versus 16.55% during the year-earlier period. We believe the
decline in volatility in emerging market debt is a function of reduced leverage
in the market coupled with expanded investor interest in the asset class.
Commodity prices in general and oil prices in particular moved higher during the
period. Oil prices closed October in excess of $32 per barrel, up 45% for the
year and had peaked at $37.20 this past September 20th. This trend of higher oil
prices has benefited oil producing emerging market countries including Russia,
Algeria, Venezuela, Mexico, Ecuador and Colombia.
We believe that the improved outlook for world economic growth has encouraged
investors to increase commitments to emerging markets debt. The strength of the
economic recovery in Asia, an important market for Latin American exports, has
benefited emerging markets debt. Evidence of cyclical recoveries in Brazil and
Venezuela also improved the outlook for investors. We also believe that the
success of numerous Brady bond exchanges late in 1999 was further evidence of
strength in the emerging markets. Brazil, Mexico and the Philippines each
exchanged a portion of their Brady debt for uncollateralized global bonds,
reducing their overall debt servicing costs. We think this positive trend is
likely to continue during future periods of market stability.
Individual country performance during the period followed the pattern of 1999,
with strong out-performance concentrated in few countries. Individual country
performance was dominated by Russia, which returned 115.93% (as measured by the
EMBI+) during the period. Ecuador rebounded during the period, returning 60.28%
(as measured by the EMBI+), outperforming the EMBI+ by a significant margin.
Mexico performed more in line with the returns of the EMBI+, posting a 20.78%
return (as measured by the EMBI+) for the period. The remaining thirteen
countries in the EMBI+ underperformed. However, on a more promising note, five
of these underperforming countries posted double-digit returns.
---------------
5 The SSB BIG Bond Index includes institutionally traded U.S. Treasury Bonds,
government-sponsored bonds (U.S. Agency and supranational), mortgage-backed
securities and corporate securities. Please note an investor cannot invest
directly in an index.
PAGE 2
<PAGE> 4
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
The following is a brief description of developments in key countries over the
past twelve months:
RUSSIA
Russia's impressive returns were the result of a variety of important
fundamental developments that occurred over the course of the year.
- Vladimir Putin was elected and inaugurated President. Mr. Putin has moved
aggressively to re-assert federal power over Russia's vast regions.
- Russia successfully concluded a debt restructuring agreement with the London
Club6 of creditors. The Russian government signed the agreements and the debt
exchange closed in August 2000. The terms of the debt exchange were favorable
for Russia. Completion of the restructuring permits Russia to seek future
funding from the international capital markets.
- 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.
Russian reserves have doubled over the previous year and now exceed $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 continue to
remain overweight in Russian debt.
ECUADOR
Ecuador returns were also impressive, posting a 60.28% gain (as measured by the
EMBI+) during the period. Ecuador rebounded in the first quarter of 2000 and
out-performed the EMBI+ sizably through October of 2000. Ecuador is attempting
to restructure its economy to make it more creditworthy. The bond market was
encouraged by Ecuador's willingness to enact a dollarization program and agree
to a number of International Monetary Fund ("IMF") guidelines. These guidelines
are part of a $2 billion, three-year agreement with the IMF.
MEXICO
Mexico posted solid returns of 20.78% (as measured by the EMBI+) during the
period. The key development for Mexico during the year was the election of
Vincente Fox, PAN party
---------------
6 The London Club is the official group of creditors lending to emerging market
governments.
PAGE 3
<PAGE> 5
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
candidate, as President. The election marked the first defeat for the PRI party
in over 70 years of presidential politics. The market viewed the election
results favorably. This evolutionary opening of its political system further
established Mexico as a leading credit in emerging markets. In addition to
enhancements to the political regime in Mexico, their foreign currency debt
rating was upgraded by Moody's Investor Service to investment-grade7 (Baa3.) The
ratings agency cited sound fiscal policies, increased political stability and a
reduced debt burden in explaining its rationale for the upgrade. The ratings
upgrade attracted additional investors into emerging markets debt as Mexico was
added to investment grade debt indexes. The election result, coupled with its
investment grade rating reinforces Mexico's status as the favorite emerging
markets debt investment of "cross-over buyers" (non-dedicated, first time
emerging market investors).
BRAZIL
Brazil performed more in line with the EMBI+, underperforming slightly for the
period, posting a return of 19.38% (as measured by the EMBI+). Positive gross
domestic product ("GDP")8 growth coupled with disciplined expenditure controls
led to good fiscal results. These improved fiscal results have had a positive
impact on Brazilian interest rates and debt levels. The ratio of net public debt
to GDP has stabilized at approximately 50%. The appreciation of the Real in
recent months has reduced the local currency value of external and dollar-linked
domestic debt. We believe the Brazilian economy (as measured by the GDP) is on
track to grow at a rate of 3% for 2000. In addition, negotiations with the IMF
have led Brazil to lower its target for foreign currency reserves, giving its
central bank additional flexibility in supporting the local currency.
VENEZUELA
Venezuela returned 15.55% (as measured by the EMBI+) during the Fund's fiscal
year. Oil price strength has continued 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 contraction. We believe that
Venezuela's large volume of oil production and its relatively low debt load make
it a compelling area to invest in. Moreover, Venezuela financed its 1999 deficit
domestically, without turning to international capital markets. Politics has
been the other key influence on returns in Venezuela this past year. President
Chavez was re-elected to a six year term of office in July. We believe
Venezuela's debt remains competitive at current spread levels (approximately 115
basis points over the EMBI+).
---------------
7 Investment-grade bonds are those rated Aaa, Aa, A and Baa by Moody's Investors
Service, Inc. or AAA, AA, A and BBB by Standard & Poor's Ratings Service, or
that have an equivalent rating by any nationally recognized statistical rating
organization, or are determined by the portfolio manager to be of equivalent
quality.
8 GDP is the market value of the goods and services produced by labor and
property. GDP is comprised of consumer and government purchases, private
domestic investments and net exports of goods and services.
PAGE 4
<PAGE> 6
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
ARGENTINA
Argentina continues to deliver disappointing returns, 5.32% (as measured by the
EMBI+), during the period as it slipped further into recession. Operating with a
tight fiscal budget and weak domestic demand, real economic recovery is
struggling. 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. Argentina's federal government is presently working with the IMF while
negotiating with its congress and the provincial governments to develop a plan
to freeze government spending and stimulate economic growth.
PERU
On a final note, Peru's debt performance significantly trailed the EMBI+ return
for the period, returning 2.78% (as measured by the EMBI+). Peru is currently
immersed in a political crisis following the resignation of President Fujimori
and pending elections. The president's resignation was precipitated by
heightened allegations of election fraud. A new election is scheduled for April
2001. Fujimori will remain interim president until the election and will not
stand for re-election. While the situation is likely to remain volatile, Peru
remains totally committed to servicing its debt.
OUTLOOK
The emerging market sector of the bond market closed the month of October with
spreads at 745 basis points over U.S. Treasuries. We believe the forces that led
to strong emerging markets performance over the last two years remain intact.
Reduced volatility levels and improving country fundamentals should continue to
drive valuations in emerging countries. In addition, six emerging countries are
on alert for credit upgrade by the rating agencies. Our outlook for emerging
markets debt is positive. We believe that we are being well compensated for the
risks in emerging markets at current spread levels.
U.S. HIGH-YIELD SECURITIES.
The U.S. high-yield bond market returned a negative 2.96% for the year ended
October 31, 2000, as reported by the SSB High-Yield Bond Market Index. For most
of the fiscal year, concerns over continued strong growth in the U.S. economy
and rising energy prices heightened inflation worries, which resulted in a
string of interest rate hikes by the Fed. From November 1999 until May 2000, the
Fed lifted its target rate for overnight bank lending four times, a total of
1.25%, 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 bond market, both in
PAGE 5
<PAGE> 7
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
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 and 1998 and a tightening of banks' and the
markets' credit standards, which limited companies' access to new capital. As a
result, liquidity in the market was limited on the investor side, as mutual fund
outflows totaled slightly more than $11 billion during the period, and by broker
dealers, who held back from committing significant capital 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, August and October
2000 in response to data hinting at a slowdown in the U.S. economy. However, the
high-yield bond market was adversely impacted by a series of earnings revisions
in September and October, which renewed cyclical and corporate profitability
concerns. Towards the end of the period, the U.S. high-yield bond market
remained focused on high default rates, potential inflation threats and the
magnitude of an economic slowdown.
According to the SSB High-Yield Bond Market Index, the average market yield at
October 31, 2000 was 13.44%. This compares to 12.48% at April 28, 2000 and
11.56% at October 29, 1999. Spreads, in the high-yield bond market (as measured
by the SSB High-Yield Bond Market Index), which were 559 basis points at October
29, 1999, widened to 611 basis points at April 28, 2000 and further widened to
763 basis points at October 31, 2000. These figures reflect the volatility which
has affected the U.S. credit markets as investors initially focused on inflation
and interest rates early in the year and, subsequently, became more concerned
with credit issues.
Going forward, we believe the high-yield bond market will continue to experience
volatility over the course of the Fund's current fiscal year primarily as a
result of several factors, including (i) continuing mutual fund outflows, (ii)
continued investor 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
grade securities and pursuing selective opportunities in undervalued B and CCC
grade securities.
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 Salomon Brothers
Worldwide Income Fund 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).
PAGE 6
<PAGE> 8
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
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>
/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>
PAGE 7
<PAGE> 9
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS
October 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT(+) SOVEREIGN BONDS(A) -- 85.8% VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ARGENTINA -- 5.4%
Republic of Argentina:
ARS 1,950,000 8.750%, due 7/10/02....................................... $ 1,767,559
3,000,000 14.100% due 11/30/02(b)................................... 2,910,000
3,300,000 11.725% due 4/10/05(b).................................... 3,069,000
475,000 12.125% due 2/25/19....................................... 407,312
1,350,000 12.000% due 2/1/20........................................ 1,172,138
ARS 2,688,951 BOCON, Pro 1, 2.7348% due 4/1/07(b)....................... 1,755,044
108,000 FRB, Series L, 7.625% due 3/31/05(b)...................... 94,905
------------
11,175,958
------------
BRAZIL -- 15.6%
Federal Republic of Brazil:
165,000 14.500% due 10/15/09...................................... 176,591
2,061,000 12.750% due 1/15/20....................................... 1,913,639
4,885,000 12.250% due 3/6/30........................................ 4,268,269
29,751,000 11.000% due 8/17/40....................................... 22,878,519
4,780,000 Par Bond, Series Z-L, 6.000% due 4/15/24(b)............... 3,157,787
------------
32,394,805
------------
BULGARIA -- 5.4%
Republic of Bulgaria:
650,000 Discount Bond, Series A, 7.750% due 7/28/24(b)............ 488,313
15,000,000 FLIRB, Series A, 3.000% due 7/28/12(b).................... 10,659,375
------------
11,147,688
------------
COLOMBIA -- 4.4%
Republic of Columbia:
4,825,000 12.832% due 8/13/05(b).................................... 4,668,188
1,300,000 8.700% due 2/15/16........................................ 854,750
4,050,000 11.750% due 2/25/20....................................... 3,262,275
350,000 8.375% due 2/15/27........................................ 216,125
------------
9,001,338
------------
COSTA RICA -- 1.2%
850,000 9.995% due 8/1/20(c)...................................... 852,125
1,900,000 Principal Bond, Series B, 6.250% due 5/21/15.............. 1,719,500
------------
2,571,625
------------
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 8
<PAGE> 10
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
October 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT(+) SOVEREIGN BONDS(A) (CONTINUED) VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CROATIA -- 1.9%
Republic of Croatia:
1,590,909 Series A, 7.750% due 7/31/10(b)........................... $ 1,471,591
2,612,058 Series B, 7.750% due 7/31/06(b)........................... 2,487,985
------------
3,959,576
------------
ECUADOR -- 1.2%
Republic of Ecuador:
1,500,000 4.000% due 8/15/30(b)..................................... 572,344
4,741,000 4.000% due 8/15/30(b)(c).................................. 1,809,668
------------
2,382,012
------------
IVORY COAST -- 0.6%
8,550,000 Ivory Coast, FLIRB, due 3/31/18(d)(e)....................... 1,191,656
------------
JAMAICA -- 1.1%
Government of Jamaica:
700,000 10.875% due 6/10/05....................................... 673,750
1,650,000 12.750% due 9/1/07(c)..................................... 1,629,375
------------
2,303,125
------------
MEXICO -- 4.9%
United Mexican States:
1,125,000 10.375% due 2/17/09....................................... 1,199,531
7,927,000 11.375% due 9/15/16....................................... 9,003,090
------------
10,202,621
------------
PANAMA -- 4.2%
Republic of Panama:
200,000 8.875% due 9/30/27........................................ 169,500
1,500,000 9.375% due 4/1/29......................................... 1,445,625
7,350,000 IRB, 4.500% due 7/17/14(b)................................ 5,838,656
1,668,983 PDI Bond, 7.750% due 7/17/16(b)(f)........................ 1,300,763
------------
8,754,544
------------
PERU -- 3.9%
13,575,000 Republic of Peru, PDI Bond, 4.500% due 3/7/17(b)............ 8,161,969
------------
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 9
<PAGE> 11
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
October 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT(+) SOVEREIGN BONDS(A) (CONCLUDED) VALUE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PHILIPPINES -- 2.2%
Republic of Philippines:
2,568,000 9.500% due 10/21/24....................................... $ 2,263,050
2,666,667 FLIRB, Series B, 7.9375% due 6/1/08(b).................... 2,266,667
------------
4,529,717
------------
POLAND -- 0.5%
1,201,000 Republic of Poland, PDI Bond, 6.000% due 10/27/14(b)........ 1,113,177
------------
RUSSIA -- 18.5%
Russia:
2,800,000 10.000% due 6/26/07....................................... 2,103,500
5,400,000 8.25% due 3/31/10......................................... 3,483,000
5,526,576 8.25% due 3/31/10(c)...................................... 3,564,641
4,225,000 12.750% due 6/24/28....................................... 3,572,766
22,500,000 2.5000% due 3/31/30(b).................................... 8,507,813
45,561,250 2.5000% due 3/31/30(b)(c)................................. 17,227,848
------------
38,459,568
------------
SOUTH KOREA -- 0.0%
50,000 Korea Development Bank, 7.625% due 10/1/02.................. 50,062
------------
URUGUAY -- 0.8%
1,710,526 Uruguay, DCB, Series B, 7.9375% due 2/19/07(b).............. 1,659,210
------------
VENEZUELA -- 14.0%
Republic of Venezuela:
6,725,000 13.625% due 8/15/18....................................... 6,254,250
3,205,000 9.250% due 9/15/27........................................ 2,119,306
1,890,699 DCB, 7.875% due 12/18/07(b)............................... 1,585,824
7,500,000 Discount Bond, Series W-A, 7.5625% due 3/31/20(b)......... 6,037,500
3,250,000 Discount Bond, Series W-B, 7.875% due 3/31/20(b).......... 2,616,250
10,369,065 FLIRB, Series A, 7.625% due 3/31/07(b).................... 8,547,998
2,103,000 NMB, Series A, 8.000% due 12/18/05(b)..................... 1,787,549
------------
28,948,677
------------
TOTAL SOVEREIGN BONDS (cost $176,556,719)................... 178,007,328
------------
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 10
<PAGE> 12
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (continued)
October 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT(+) LOAN PARTICIPATIONS(A)(G) -- 8.8% VALUE
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Yen 336,800,336 Kingdom of Morocco, Tranche A, 3.0175% due 1/1/09 (Goldman
Sachs)(b)................................................. $ 2,360,858
Yen 332,500,000 The People's Democratic Republic of Algeria, Tranche 3,
7.1875% due 3/4/10 (Chase Manhattan)(b)................... 2,102,213
3,314,685 The People's Democratic Republic of Algeria, Tranche 1,
7.1875% due 9/4/06 (Chase Manhattan)(b)................... 2,800,909
6,650,000 The People's Democratic Republic of Algeria, Tranche 3,
7.1875% due 3/4/10 (Chase Manhattan)(b)................... 5,320,000
6,176,467 Kingdom of Morrocco, Tranche B, 7.750% due 1/1/04 (Morgan
Stanley Emerging Markets Inc., Bankers Trust)(b).......... 5,636,027
------------
TOTAL LOAN PARTICIPATIONS (cost $18,722,917)................ 18,220,007
------------
CORPORATE BONDS(A) -- 5.0%
------------------------------------------------------------------------------------------------------------------------------
Indonesia:
3,000,000 Tjiwi Kimia International Finance Company B.V., 10.000%
due 8/1/04.............................................. 1,590,000
Mexico:
2,000,000 Grupo Industrial Durango, 12.000% due 7/15/01............. 2,030,000
1,000,000 Hylsa S.A. de C.V., 9.250% due 9/15/07.................... 760,000
3,000,000 TFM S.A. de C.V., Zero Coupon until 6/15/02 (11.750%,
thereafter) due 6/15/09................................. 2,175,000
Singapore:
2,000,000 APP China Group, 14.000% due 3/15/10(c)................... 845,000
United States:
4,825,159 Jordan Industries, Inc., Zero Coupon until 4/1/02 (11.750%
thereafter) due 4/1/09.................................. 3,063,972
------------
TOTAL CORPORATE BONDS (cost $14,296,260).................... 10,463,972
------------
WARRANTS(A) -- 0.0%
------------------------------------------------------------------------------------------------------------------------------
2,000 Warrants APP China Group (Exercisable into 12.914 shares of Asia Pulp
& Paper at an exercise price of $7.8375 per share)(cost
$0)(d).................................................... 20
------------
REPURCHASE AGREEMENT -- 0.4%
------------------------------------------------------------------------------------------------------------------------------
768,000 SBC Warburg, 6.540% due 11/1/00; Proceeds at
maturity -- $768,140; (Fully collateralized by U.S.
Treasury Note, 13.125% due 5/15/01; Market
Value -- $784,020) (Cost $768,000)........................ 768,000
------------
TOTAL INVESTMENTS -- 100% (cost $209,575,896*).............. $207,459,327
============
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 11
<PAGE> 13
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (concluded)
October 31, 2000
--------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT OCTOBER 31, 2000:
<TABLE>
<CAPTION>
CONTRACTS IN EXCHANGE CONTRACTS AT DELIVERY UNREALIZED
TO DELIVER FOR VALUE DATE APPRECIATION
---------- ----------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C>
Sale................. Yen 547,850,000 US$5,326,689 US$5,133,177 3/12/01 193,512
</TABLE>
(*) Aggregate cost for federal income tax purposes is substantially the same.
(+) Principal amount denominated in U.S. Dollar unless otherwise indicated.
(a) All or a portion of these securities are segregated as collateral pursuant
to a loan agreement.
(b) Rate shown reflects current rate on variable rate or step coupon rate
instruments.
(c) Pursuant to Rule 144A under the Securities Act of 1933, this security may
be resold in transactions that are exempt from registration, normally to
qualified institutional buyers.
(d) Non-income producing security.
(e) Security is currently in default.
(f) Payment-in-kind security for which part of the income earned may be
capitalized as additional principal.
(g) Participation interests were acquired through the financial institutions
indicated parenthetically.
<TABLE>
<C> <C> <S>
ARS -- Argentine Peso.
BOCON -- Bonos De Consolidacion.
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.
Yen -- Japanese Yen.
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 12
<PAGE> 14
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost -- $209,575,896)................ $207,459,327
Receivable for investments sold............................. 21,478,124
Interest receivable......................................... 4,109,051
Net unrealized appreciation on forward foreign currency
contracts................................................. 193,512
Prepaid expenses............................................ 6,280
------------
Total assets........................................ 233,246,294
------------
LIABILITIES
Payable to bank............................................. 139
Loan payable (Note 5)....................................... 60,000,000
Payable for investments purchased........................... 6,366,819
Accrued interest expense on loan (Note 5)................... 1,072,246
Accrued management fee (Note 3)............................. 128,004
Accrued administration fee (Note 3)......................... 21,493
Accrued expenses............................................ 198,281
------------
Total liabilities................................... 67,786,982
------------
Total Net Assets.................................... $165,459,312
============
NET ASSETS
Common Stock ($.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......................... 3,831,694
Accumulated net realized loss on investments................ (14,265,751)
Net unrealized depreciation on investments and foreign
currencies................................................ (1,924,195)
------------
Total Net Assets.................................... $165,459,312
============
NET ASSET VALUE PER SHARE ($165,459,312 / 12,762,580
shares)................................................... $ 12.96
============
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 13
<PAGE> 15
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended October 31, 2000
<TABLE>
<S> <C> <C>
NET INVESTMENT INCOME
INCOME
Interest............................................ $29,818,114
EXPENSES
Interest on loan (Note 5)........................... $ 5,149,799
Management fee (Note 3)............................. 1,492,701
Administration fee (Note 3)......................... 248,784
Custody fee......................................... 89,000
Accounting fee...................................... 54,000
Audit & tax fees.................................... 50,000
Directors' fees & expenses.......................... 29,940
Transfer agent fees................................. 25,490
Registration fees................................... 24,328
Legal fee........................................... 22,000
Printing and mailing fees........................... 10,000
Other............................................... 1,988
-----------
Total expenses...................................... 7,198,030
-----------
Net Investment Income................................... 22,620,084
-----------
NET REALIZED GAIN ON:
Investments......................................... 19,196,054
Foreign Currency Transactions....................... 43,333 19,239,387
----------- -----------
CHANGE IN NET UNREALIZED APPRECIATION ON:
Investments......................................... (5,781,614)
Translation of Foreign Denominated Assets and
Liabilities......................................... 458,993 (5,322,621)
----------- -----------
Net Realized Gain and Change in Net Unrealized
Appreciation.............................................. 13,916,766
-----------
INCREASE IN NET ASSETS FROM OPERATIONS...................... $36,536,850
===========
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 14
<PAGE> 16
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended October 31,
<TABLE>
<CAPTION>
2000 1999
------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income................................... $ 22,620,084 $ 22,060,982
Net realized gain (loss) on investments and foreign
currency transactions................................. 19,239,387 (14,959,224)
Change in net unrealized appreciation (depreciation).... (5,322,621) 42,374,619
------------ ------------
Net increase in net assets from operations.............. 36,536,850 49,476,377
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................................... (21,261,199) (23,109,802)
------------ ------------
(21,261,199) (23,109,802)
------------ ------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares issued in reinvestment of dividends
(89,382 shares issued)................................ -- 940,355
------------ ------------
TOTAL INCREASE IN NET ASSETS................................ 15,275,651 27,306,930
------------ ------------
NET ASSETS
Beginning of year....................................... 150,183,661 122,876,731
------------ ------------
End of year*............................................ $165,459,312 $150,183,661
============ ============
*Includes undistributed net investment income of:........... $ 3,831,694 $ 3,237,603
============ ============
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 15
<PAGE> 17
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
For the Year Ended October 31, 2000
<TABLE>
<S> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Purchases of long-term portfolio investments............ $(253,924,851)
Proceeds from disposition of long-term portfolio
investments and principal paydowns..................... 261,550,185
Net purchase of short-term portfolio investments........ (513,000)
-------------
7,112,334
Net investment income................................... 22,620,084
Accretion of discount on investments.................... (6,136,878)
Capitalized income on payment-in-kind securities........ (152,227)
Net change in receivables/payables related to
operations............................................. (2,182,920)
-------------
Net cash flows provided by operating activities..... 21,260,393
-------------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Cash dividends paid..................................... (21,261,199)
-------------
Net decrease in cash........................................ (806)
Cash at beginning of year................................... 667
-------------
Payable to bank at end of year.............................. $ (139)
=============
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to financial statements.
PAGE 16
<PAGE> 18
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 are valued at the mean between the last current bid and asked price
as of the close of business of that market. However, where the spread between
bid and asked price exceeds five percent of the par value of the security, the
security is valued at the bid price. 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 17
<PAGE> 19
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, 2000, the Fund paid interest
expense of $4,915,073.
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.
In November 2000, a revised AICPA Audit and Accounting Guide, Audits of
Investment Companies, was issued, and is effective for fiscal years beginning
after December 15, 2000. The revised Guide will require the Fund to amortize
premium on all fixed income securities.
PAGE 18
<PAGE> 20
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
Adopting this accounting principle will not affect the Fund's net asset value,
but will change the classification of certain amounts between interest income
and realized and unrealized gain/loss in the Statement of Operations. The Fund
expects that the impact of the adoption of this accounting principle will not be
material to the financial statements.
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 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.
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 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, 2000, 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 19
<PAGE> 21
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, 2000 aggregated $256,846,290 and $275,651,934,
respectively.
The federal income tax basis of the Fund's investments at October 31, 2000 was
substantially the same as the basis for financial reporting and, accordingly,
net unrealized depreciation for federal income tax purposes was $2,116,569
(gross unrealized appreciation -- $9,501,276; gross unrealized
depreciation -- $11,617,845).
During the year ended October 31, 2000, permanent book/tax differences of
$(764,794) 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, 2000 of $14,022,000
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
9.06125% and the maturity date is November 22, 2000. The collateral for the loan
was valued at $206,658,175 on October 31, 2000 and is being held in a segregated
account by the Fund's custodian. The loan was renewed on November 22, 2000 with
an interest rate of 8.45% and a maturity date of May 21, 2001.
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 20
<PAGE> 22
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, 2000 was $18,220,007.
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, 2000, 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 21
<PAGE> 23
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, 2000, the Fund has
outstanding contracts to sell 547,850,000 Japanese Yen for US$ 5,326,689 for a
scheduled settlement of March 12, 2001.
Consistent with its objective to seek high current income, the Fund may invest
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, 2000
Subsequent to October 31, 2000, the Board of Directors of the Fund declared
dividends of $.11875 per common share payable November 24 and December 29, 2000
to shareholders of record on November 14 and December 12, 2000, respectively.
PAGE 22
<PAGE> 24
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
-----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Data for a share of common stock outstanding throughout each year:
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2000 1999 1998 1997 1996
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period.............................. $ 11.77 $ 9.70 $ 15.65 $ 15.25 $ 10.71
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................ 1.78 1.74 1.87 1.59 1.99
Net realized and unrealized gain
(loss) on investments............... 1.08 2.15 (5.16) .30 3.98
-------- -------- -------- -------- --------
Total from investment
operations...................... 2.86 3.89 (3.29) 1.89 5.97
-------- -------- -------- -------- --------
LESS DIVIDENDS AND DISTRIBUTIONS:
From net investment income........... (1.67) (1.82) (1.66) (1.49) (1.43)
From net realized gains.............. -- -- (1.00) -- --
-------- -------- -------- -------- --------
Total dividends and
distributions................... (1.67) (1.82) (2.66) (1.49) (1.43)
-------- -------- -------- -------- --------
Net asset value, end of period....... $ 12.96 $ 11.77 $ 9.70 $ 15.65 $ 15.25
======== ======== ======== ======== ========
Market price per share, end of
period.............................. $ 11.50 $11.0625 $ 10.875 $13.8125 $ 14.00
======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN(a)........... 20.06% 20.49% 4.83% 8.93% 37.34%
RATIOS TO AVERAGE NET ASSETS:
Total expenses, including interest
expense......................... 4.34% 4.22% 3.48% 3.24% 3.91%
Total expenses, excluding interest
expense (operating expenses).... 1.24% 1.36% 1.32% 1.36% 1.44%
Net investment income............. 13.65% 16.06% 13.35% 9.52% 15.25%
SUPPLEMENTAL DATA:
Net assets, end of period (000)... $165,459 $150,184 $122,877 $198,140 $193,014
Average net assets (000).......... $165,290 $137,389 $177,337 $211,806 $165,059
Portfolio turnover rate........... 119% 80% 122% 175% 97%
Asset coverage for Loan
outstanding..................... 376% 350% 305% 430% 422%
Weighted average bank loan
(000)........................... $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000
Weighted average interest rate on
bank loan....................... 8.44% 6.45% 6.40% 6.62% 6.80%
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<C> <S>
(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 23
<PAGE> 25
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, 2000, 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 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 October 31, 2000 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
December 27, 2000
PAGE 24
<PAGE> 26
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, 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
November 1, 1999
to January 31, 2000......... 6,444,189 4,717,668 .364 11,087,775 .869 15,805,443 1.233
February 1, 2000
to April 30, 2000........... 6,439,857 4,733,497 .370 6,247,899 .490 10,981,396 .860
May 1, 2000
to July 31, 2000............ 7,125,693 5,178,530 .410 8,308,790 .650 13,487,320 1.060
August 1, 2000
to October 31, 2000......... 9,808,375 7,990,389 .636 (11,727,698) (.929) 3,737,309 (.293)
<CAPTION>
DIVIDENDS AND
DISTRIBUTIONS
---------------------- SHARE PRICE
PER -------------------
QUARTERLY PERIOD AMOUNT SHARE HIGH LOW
----------------------------- --------------------------------------------
<S> <C> <C> <C> <C>
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
November 1, 1999
to January 31, 2000......... 7,621,191 .597 11 1/2 10 5/16
February 1, 2000
to April 30, 2000........... 4,546,670 .356 11 11/16 10 11/16
May 1, 2000
to July 31, 2000............ 4,546,670 .356 11 12 3/4
August 1, 2000
to October 31, 2000......... 4,546,668 .356 11 13 3/16
</TABLE>
--------------------------------------------------------------------------------
PAGE 25
<PAGE> 27
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,
PAGE 26
<PAGE> 28
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
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
PAGE 27
<PAGE> 29
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
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 28
<PAGE> 30
SALOMON BROTHERS WORLDWIDE INCOME FUND INC
--------------------------------------------------------------------------------
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.
PAGE 29
<PAGE> 31
(This page intentionally left blank.)
<PAGE> 32
(This page intentionally left blank.)
<PAGE> 33
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.
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
---------------------------------------------------
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.
--------------------------------------------------------------------------------
