-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P5KdERxT3XY/dT00lWv0cSWRceuXgfA30/+7RIVitE88Pu/HCr78Y2dpKcoxIp2K DfaOkbd9+IExrqNWx6Ddeg== 0000950116-01-000094.txt : 20010129 0000950116-01-000094.hdr.sgml : 20010129 ACCESSION NUMBER: 0000950116-01-000094 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001130 FILED AS OF DATE: 20010125 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELAWARE GROUP GLOBAL DIVIDEND & INCOME FUND INC CENTRAL INDEX KEY: 0000916713 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 232753201 STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-08246 FILM NUMBER: 1515216 BUSINESS ADDRESS: STREET 1: 1818 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2152552127 MAIL ADDRESS: STREET 1: 2005 MARKET STREET STREET 2: P O BOX 9011 CITY: PHILADELPHIA STATE: PA ZIP: 19103 N-30D 1 0001.txt DELAWARE(SM) INVESTMENTS - ----------- Delaware Group Global Dividend and Income Fund, Inc. Closed-End Income [Closed-End Income Artwork] 2000 ANNUAL REPORT TABLE OF CONTENTS - ----------------- Letter to Shareholders 1 Portfolio Management Review 3 Performance Summary 8 Financial Statements Statement of Net Assets 9 Statement of Assets and Liabilities 13 Statement of Operations 14 Statements of Changes in Net Assets 15 Statement of Cash Flows 16 Financial Highlights 17 Notes to Financial Statements 18 A TRADITION OF SOUND INVESTING SINCE 1929 Your Fund's Investment Strategies U.S. Common Stocks with Above-Average Yields The Fund's management focuses on U.S. stocks that pay high dividends relative to their share price. Such high-yields can point the Fund to strong companies whose stocks have capital appreciation potential. The dividend income from these stocks has the potential to add value to total return. Convertible Preferred Stocks and Bonds The Fund invests in both convertible preferred stock and convertible bonds. Both securities pay fixed rates of income, but because they can be converted into common stock, they are indirectly tied to the common stock's performance. As a result, convertible securities generally offer higher income than common stocks and an opportunity for price appreciation when the value of the underlying common stock rises. The Fund may buy convertibles when the underlying common stock offers strong growth potential but a lower yield. High-Yield Corporate Bonds High-yield bonds, those rated BB or lower, have greater default risk than bonds with higher quality ratings, but provide a greater level of income to compensate investors for the additional risk. Prices of high-yield bonds tend to be less sensitive to changes in interest rates than higher rated bonds. Foreign Stocks In evaluating foreign stocks, the Fund's management takes into account risks that include a country's inflation outlook, economy, politics, different accounting standards, tax policies, and the effect of currency fluctuation. The value of a company's projected dividend stream is "discounted" for these risks so that management has a consistent yardstick to compare stocks around the globe. Foreign Bonds The Fund invests in foreign government and corporate bonds whose total return potential relative to currency, and political and economic risks appears attractive. In order to reduce currency risk, the Fund may buy foreign bonds denominated in U.S. dollars rather than the currency of the country issuing the bond. Leveraging About $25 million (35.52%) of your Fund's net assets were leveraged as of November 30, 2000. Leveraging is a tool that is generally not available to open-end mutual funds and one that can be an important contributor to your Fund's income and capital appreciation. Of course, there is no guarantee that the Fund will achieve its objective by using leveraging. Leveraging could result in a higher degree of volatility because the Fund's net asset value could be more sensitive to fluctuations in short-term interest rates and equity prices. We believe this risk is reasonable given the potential benefits of higher income. Your Fund's Buyback Program Your Fund's board of directors approved a share repurchase program in 1994 that authorizes the lead manager of Delaware Group Global Dividend and Income Fund, Inc. to purchase up to 10% of the Fund's outstanding shares on the floor of the New York Stock Exchange. Through November 30, 2000 we did not make use of this option since we did not see this as the most effective way to add value to the portfolio. Tender Offer The Fund commenced a tender offer to purchase, at net asset value, up to 10% of its issued and outstanding shares of common stock on June 1, 2000, which expired on June 29, 2000. The tender offer was oversubscribed and all tenders were subject to proration (at a ratio of approximately 50.40%) in accordance with the terms of the tender offer. Following the purchase of shares tendered, the Fund has 5,985,582 shares of common stock outstanding. Your Reinvestment Options Delaware Group Global Dividend and Income Fund, Inc. offers an automatic dividend reinvestment program. Effective December 8, 2000, Mellon Investor Services, LLC has become the transfer and dividend disbursing agent, registrar and dividend reinvestment agent for the Fund. If you would like to reinvest dividends, and shares are registered in your name, contact Mellon Investor Services, LLC at 1.800.851.9677. You will be asked to put your request in writing. If you have shares registered in "street" name, contact the broker/dealer holding the shares or your financial adviser. Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested. (C)Delaware Distributors, L.P. Dear Shareholder January 9, 2001 "THE TIGHTER MONETARY ENVIRONMENT IN THE MAJOR MARKETS CONTRIBUTED TO THE GENERALLY WEAK PERFORMANCE OF GLOBAL MARKETS." Recap of Events -- As of November 30, 2000, the pace of global economic growth slowed this past year as tightening financial conditions, combined with the high price of oil, generally challenged businesses worldwide. During the year, the U.S. Federal Reserve Board, the European Central Bank, and, for the first time since 1990, even the Bank of Japan raised interest rates. The tighter monetary environment in the major markets contributed to the generally weak performance of global markets. In a poor environment for stocks, returns in many overseas markets have been lackluster, while major U.S. equity indexes such as the Dow Jones Industrial Average and the S&P 500 Index are in negative territory year to date as of November 30, 2000. Unfortunately, the generally poor performance by stocks worldwide did not translate into strong returns for global bonds. Currency volatility and a strong U.S. dollar squeezed returns in many areas of the world, as evidenced by the -6.65% return for the Salomon Smith Barney Non-US World Government Bond Index for the one-year period ended November 30, 2000. Delaware Group Global Dividend and Income Fund, Inc. felt the repercussions of severely volatile U.S. and international equity markets, returning -4.04% (shares at net asset value with distributions reinvested) for the one-year period ended November 30, 2000. Delaware Group Global Dividend and Income Fund, Inc. has a value directive. During the first several months of our fiscal year, the stock market was characterized by momentum investing, with investors focused on growth companies, and technology in particular. This trend began to change in the spring of 2000, as extreme levels of volatility struck the more aggressive equity markets -- prompting many investors to seek safer fixed-income investments and to look more closely at stock valuations.
Average Annual Total Returns Premium (+)/ At Net Asset Value Discount (-) For The Periods Ended November 30, 2000 One Year Five Year Lifetime* As of 11/30/00 - ------------------------------------------------------------------------------------------------------------------ Delaware Group Global Dividend and Income Fund, Inc. -4.04% +7.13% +6.83% -11.85% - ------------------------------------------------------------------------------------------------------------------ Standard & Poor's 500 Index -4.22% +18.67% +19.86% Merrill Lynch High-Yield Bond Index -5.09% +4.78% +6.41% Morgan Stanley Capital International (MSCI) Europe, Australia and Southeast Asia (EASEA) Index -5.86% +12.82% +12.72% Salomon Smith Barney Non-U.S. World Government Bond Index -6.65% +0.98% +3.94% Lipper Closed-End Income and Preferred Stock Funds Average (11 funds) +5.26% +7.37% +8.53% - ------------------------------------------------------------------------------------------------------------------
All performance shown above is at net asset value and assumes the reinvestment of all distributions. The Standard & Poor's 500 Index is an unmanaged composite of mostly large-capitalization U.S. companies. The Merrill Lynch High-Yield Bond Index measures the performance of the U.S. high-yield bond market. The Morgan Stanley Capital International (MSCI) Europe, Australia and Southeast Asia (EASEA) Index measures the performance of stocks in Europe, Australia and Southeast Asia, excluding Japan. The Salomon Smith Barney Non-U.S. World Government Bond Index measures the general performance of non-U.S. bond markets. All indexes are unmanaged. The Lipper category represents the average returns of income and preferred stock mutual funds tracked by Lipper (Source: Lipper Inc.). You cannot invest directly in an index. Past performance is not a guarantee of future results. *Commenced operations on March 4, 1994. 1 "WE THINK GOOD VALUES REMAIN AVAILABLE IN BOTH EMERGING AND DEVELOPED MARKETS..." Despite a difficult year for international investors, the slowing of U.S. economic growth has many analysts hopeful for a "soft landing" for the U.S. economy. This optimistic view points to continued U.S. economic expansion and better times ahead for U.S. stocks, both of which would likely bode well for global markets. International investors can find other reasons to be encouraged, too. These include healthy euro zone employment growth, China's entry into the World Trade Organization, and occasional signs of hope in Japan for eventual economic recovery, despite that country's struggling banking system. In addition, many emerging market countries around the globe are busy adopting pro-business policy changes. Developed markets, meanwhile, become more interdependent each year. The increasing globalization of financial markets and businesses is a very real trend that should encourage international investors who maintain a long-term perspective. Market Outlook -- We believe that the damage done in global equity markets by high oil prices, rising interest rates, and a strong dollar is excessive. We think good values remain available in both emerging and developed markets; however, investors will need to remain focused on companies that can produce sustained profitability. We think investing in overseas markets adds important diversification to your portfolio. Investments in non-U.S. stocks provide opportunity for capital appreciation, but they also come with increased risks and volatility that make it especially important to keep a long investment time horizon. We commend you for remaining steadfast with your international investments. Thank you for your continued confidence and your commitment to Delaware Investments. Sincerely, /s/ Charles E. Haldeman, Jr. /s/ David K. Downes - ------------------------------------- -------------------------------------- Charles E. Haldeman, Jr. David K. Downes Chairman, President and Chief Executive Officer, Delaware Investments Family of Funds Delaware Investments Family of Funds [Closed-End Income Artwork] 2 Peter C. Andersen Senior Portfolio Manager U.S. Fixed Income Delaware Management Company Joanna Bates Senior Portfolio Manager Foreign Fixed Income Delaware Investment Advisers Michael Dugan Senior Portfolio Manager U.S. Equities Delaware Management Company Clive A. Gillmore Senior Portfolio Manager Foreign Equities Delaware Investment Advisers Christopher A. Moth Senior Portfolio Manager Foreign Fixed Income Delaware Investment Advisers January 9, 2001 PORTFOLIO MANAGEMENT REVIEW - --------------------------- Portfolio Highlights For Delaware Group Global Dividend and Income Fund, Inc. 12-month period ended November 30, 2000 was a difficult year, as the Fund suffered from the severe volatility experienced by both the domestic and international financial markets. The Fund provided a total return of -4.04% (shares at net asset value with distributions reinvested) for the period. However, your Fund managed to outperform all of its benchmarks, with the exception of its Lipper peer group. Given the challenging market conditions during our fiscal year, the Fund's performance may have suffered worse were in not for our dollar-denominated holdings in foreign debt. The dollar was strong against other currencies throughout the fiscal year. U.S. Stocks As of November 30, 2000, Delaware Group Global Dividend and Income Fund, Inc. allocation to common stock was nearly 78% of the portfolio's net assets. We maintained a larger portion of the portfolio in U.S. common stocks because we perceived there to be a more favorable investing environment in U.S. equities compared to bonds. Early in our fiscal year, investors focused primarily on technology and growth stocks, largely ignoring stocks with a value orientation, such as those held by your Fund. This trend changed in mid-March when the Nasdaq Composite Index and other major indexes began to tumble -- prompting investors to seek out less risky fixed-income investments and equities with more of a value nature. We believe the Fund can add excellent diversification to your portfolio -- especially in volatile markets -- because it offers a well-balanced blend of growth and value, as well as equity and fixed-income, while exposing you to both domestic and international markets. The biggest contributions to performance came from relatively long-term portfolio holdings in REITs and in utility and energy stocks. Sectors that had a negative impact on performance include those in economically sensitive areas of the economy, such as basic industries, or "cyclicals", and capital goods. Companies that are dependent on price increases (with the exception of energy and oil) generally suffered this year because they were unable to pass along such increases to the public. 3 "AFTER TWO YEARS OF SIGNIFICANT UNDERPERFORMANCE, SECURITIES IN THE REIT SECTOR DELIVERED STRONG RETURNS IN 2000." Basic Industry: Throughout the Fund's fiscal year, we maintained our commitment to cyclical stocks. Since cyclical stocks are strongly tied to the supply-and-demand business cycle, their prices tend to increase when the economy is expanding, and conversely decrease when the economy is slowing down. Cyclical stocks typically underperform during periods when the Federal Reserve Board is aggressively raising interest rates. The Fund saw disappointing earnings from its holdings in Alcan Aluminum, a leading metal manufacturer and International Paper, a global producer of paper and forest products. However, we believe that the Fed's sudden half-point interest rate reduction on January 3, 2001 will re-energize the U.S. economy and will likely produce a favorable environment for cyclical stocks. REITs: After two years of significant underperformance, securities in the REIT sector delivered strong returns in 2000. The sector benefited from stabilized earnings and a well-balanced real estate economy. The NAREIT Equity REIT Index, returned +17.22% for the one-year period ended November 30, 2000, compared to - -9.88% for the one-year period ended November 30, 1999 and -13.13% for the one-year period ended November 30, 1998. The Fund's holdings in MeriStar Hospitality, a Washington, D.C. based hotel chain, and Corporate Office Properties Trust, which own and operate office buildings, were particularly strong performers throughout our fiscal year. Energy: As the price of oil and natural gas rose during our fiscal year, stocks in this sector became more attractive. Our holdings in Chevron, for example, turned in an impressive performance. We expect to maintain our current exposure to this sector, as we believe it is likely that earnings will remain strong at least for the next few quarters. Utilities: The shake-up in the technology sector caused many investors to seek out the relative stability traditionally found in utility company stocks. Investors were attracted to the more reliable earnings and low P/Es available from companies in this sector. Electric companies, in particular, benefited from rising oil and natural gas prices and high demand, and continued to perform well for us. Our holdings in PG&E, based in California, contributed positively to the Fund's performance. [Closed-end Income Artwork] 4 "WE CONTINUE TO MAINTAIN SIGNIFICANT EXPOSURE TO SELECT ASIA PACIFIC MARKETS -- NEW ZEALAND AND AUSTRALIA IN PARTICULAR." Foreign Stocks As of November 30, 2000, the portfolio is allocated in foreign stocks much the same as it was at mid-fiscal-year. Throughout the Fund's fiscal year, we avoided exposure to Japan. Although we are encouraged by signs of some positive economic conditions and some corporate restructuring, we feel Japan's future is still too speculative to risk investing in at the present time. In accordance with our buy-and-hold strategy, our U.K. holdings are quite similar to what they were one year ago. Our U.K. allocation, which is our largest overseas allocation, accounts for nearly 9% of the portfolio and contains a diverse collection of companies, including pharmaceutical giant Glaxo Wellcome (which recently merged with SmithKline Beecham) and Blue Circle Industries, an industrial manufacturing company. We continue to maintain significant exposure to select Asia Pacific markets -- New Zealand and Australia in particular. Although the 2000 Summer Olympics provided an economic boost for Australia, the local currency decreased in value against a strong U.S. dollar throughout the year. The Australian dollar traded at just above 52 U.S. cents at the end of our fiscal year. We believe this level of exchange offers significant value, and Australia continues to be a market for which we have great optimism. Our Australian holdings include the National Australia Bank and Foster's Brewing Group. The Fund also holds stock in U.K.-based mining corporation Rio Tinto, which has a substantial Australian operation. Although we look for undervalued currencies, we do not think that all depressed currencies represent good value. We are currently concerned about the continued descent of the euro, which by November 30, 2000 was down more than 4% against the U.S. dollar for our fiscal year. Partially because of this, we have kept our overall allocation to continental Europe below that of our benchmark. However, we believe that many select value opportunities are available in this market. For example, we hold positions in Bayer, headquartered in Germany, and in Spain's telecommunications giant, Telefonica. The rising price of oil benefited many of our energy stocks across the board, including Europe's Royal Dutch Petroleum, based in the Netherlands. 5 Delaware Group Global Dividend and Income Fund, Inc. Portfolio Asset Mix (As a percentage of the investment portfolio) As of November 30, 2000 Convertible Bonds 1.74% Common Stock 58.03% Non-Convertible Bonds 34.20% Warrants and Short-Term Securities 1.87% Convertible Preferred Stock 4.16% High-Yield Bonds The Fund recently experienced a major shift in its strategy of managing the high-yield bonds within its portfolio. In September 2000, lead fixed-income manager Peter C. Andersen and his seasoned team of bond researchers and traders took over the reins of the high-yield bond portion of the portfolio. They came to Delaware Investments this fall from Conseco Capital Management and bring with them a wealth of knowledge and expertise in the fixed-income arena. Under their leadership, the Fund now focuses on companies with higher credit ratings. Bonds are carefully selected by using a bottom-up, research-intensive process, ensuring that, in our opinion, the best possible high-yield debt securities are chosen for the portfolio. This method is similar to that used in picking stocks. In addition, the management team seeks out individual companies whose bonds are selling at lower prices (or below par) as a result of general market conditions rather than because of concerns about their credit-worthiness. Throughout our fiscal year, the Fund concentrated on high-yield securities in the industrial and cyclical sectors. Unfortunately, despite experiencing a brief turnaround in June 2000, the high-yield bond market continued to be negatively affected by reduced demand and lack of liquidity. In addition, over the past year or so, there has been an increase in the number of defaults in the high-yield market, as banks have begun cutting back lines of credit. Despite these negatives, we believe there are still good reasons for maintaining the Fund's high-yield bond position, as these bonds continue to provide the portfolio with an attractive level of income. We believe that as investors perceive that interest rates have stabilized, they may once again seek out these bonds. Provided their fundamentals remain strong, we believe high-yield bonds have the potential to appreciate as the market regains some of its lost momentum. In addition, we are confident in our new credit-focused management team and believe we will begin to see positive returns in the near term as a result of their efforts. Foreign Bonds Over the past 12-month period, U.S. investors struggled to find valuable investment opportunities in international bonds. Rising interest rates, currency volatility, and a very strong U.S. dollar continued to detract the performance of international bond markets throughout the fiscal year. Evidence of this lackluster performance can be seen in the Salomon Smith Barney Non-U.S. World Government Bond Index, which returned -6.65% for the year ended November 30, 2000. However, we continue to be committed to the foreign bond position in our portfolio as we feel this market offers excellent value and earnings potential. [Closed-end Income Artwork] 6 "ALTHOUGH THE FUND STRUGGLED TO CAPTURE HIGH DIVIDENDS AND YIELDS THROUGHOUT MOST OF ITS FISCAL YEAR, WE FEEL THE INVESTMENT ENVIRONMENT FOR FIXED-INCOME AND EQUITY SECURITIES IS LOOKING MORE FAVORABLE." We believe that a number of international currencies are now extraordinarily undervalued. In particular, the euro and the Australian and New Zealand dollars have been hit hard as the U.S. dollar has risen. We believe the bulk of the portfolio's lower performance compared to our benchmark for our fiscal year is due to our lower percentage of holdings in bonds issued by companies in the Eurozone and in Australia and New Zealand. In our opinion, as time progresses, we anticipate that the U.S. dollar will weaken and we view the outlook for the euro and the Australian and New Zealand dollars as very favorable. Our most significant European bond investments continue to be in emerging markets such as Poland and Greece. As in equities, we currently have no exposure to the Japanese bond market, although there is a large supply of new debt available. We believe Japan's economic earnings potential is still low and Japan will remain a poor value market, at least for the immediate future. We intend to invest in the Japanese bond market only when we see substantial evidence demonstrating the country is capable of producing sustainable growth. Outlook Although the Fund struggled to capture high dividends and yields throughout most of its fiscal year, we feel the investment environment for fixed-income and equity securities is looking more favorable. Our outlook for the high-yield bond market remains cautious though, as it has been lacking a catalyst for two years. However, we are optimistic that the Fed's recent interest rate reduction could provide that catalyst. We also believe the decrease could create a much-needed resurgence in the U.S. economy, and in turn boost investors' confidence, which has been seriously dampened in recent months. Factors that held us back in the short term, in our opinion, could be wind in our sails going forward. For example, we believe current prospects appear better for cyclical stocks in the U.S., as we expect their returns to improve should the Fed continue to reduce interest rates. We also expect the U.S. dollar to weaken, enabling the Australian and New Zealand dollars to regain value and flourish in economic growth. As value investors, we continue to seek out those opportunities that exist across a broad range of sectors and across international markets, which we believe have the potential for better than expected earnings in the quarters to come. We firmly believe that diversification will be the key to success in the current market environment and that value funds, such as Delaware Group Global Dividend and Income Fund, Inc. will serve as an effective complement to more aggressive growth funds in an investor's portfolio. 7 FUND BASICS - ----------- Fund Objectives The Fund seeks to achieve current income and, secondarily, capital appreciation. Total Fund Net Assets As of November 30, 2000 $70.42 million Number of Holdings As of November 30, 2000 160 Fund Start Date March 4, 1994 Nasdaq Symbols DGF Delaware Group Global Dividend and Income Fund, Inc. Asset Allocation by Country November 30, 2000 Greece 2.38% New Zealand 3.03% United States 55.85% Poland 2.50% Germany 3.80% Australia 3.83% South Africa 5.56% United Kingdom 8.61% Mexico 1.98% Others 12.46% [Closed-end Income Artwork] DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC. PERFORMANCE - ---------------------------------------------------------------- Market Price vs. Net Asset Value November 30, 1999 to November 30, 2000 Market Price Net Asset Value Nov '99 $11.75 $13.92 Dec '99 $11.62 $14.26 Jan '00 $11.75 $13.54 Feb '00 $11.06 $12.83 Mar '00 $10.88 $13.33 Apr '00 $11.19 $13.18 May '00 $11.87 $13.04 Jun '00 $11.94 $12.93 Jul '00 $12.06 $12.93 Aug '00 $12.5 $12.71 Sep '00 $11.75 $12.33 Oct '00 $11.5 $12.09 Nov '00 $10.38 $11.77 Source: Bloomberg. Past performance does not guarantee future results. Growth of a $10,000 Investment March 4, 1994 through November 30, 2000 Glob & Div Market Glob & Div Net Lipper Market Lipper Net Mar '94 $10,000 $10,000 $10,000 $10,000 Nov '94 $ 8,258 $ 9,889 $ 9,096 $ 9,543 Nov '95 $10,749 $11,776 $11,738 $12,103 Nov '96 $13,696 $14,614 $13,603 $13,652 Nov '97 $16,296 $17,234 $15,730 $15,860 Nov '98 $16,630 $17,611 $17,113 $17,020 Nov '99 $13,803 $17,511 $14,667 $16,219 Nov '00 $13,843 $16,803 $15,863 $17,303 Chart assumes $10,000 invested on March 4, 1994 and reflects the reinvestment of all distributions at market value. Performance of the Fund and the index at market value are based on market performance during the period. Performance of the Fund and the index at net asset value are based on the fluctuations in net asset value during the period. Delaware Group Global Dividend and Income Fund, Inc. was initially offered with a sales charge of 6.0%. Performance since inception does not include fees, the initial sales charge or any fees or brokerage commissions for purchases made since inception. Investments in the Fund are not available at net asset value. The Lipper Closed-End Income Fund Average represents a peer group of closed-end mutual funds tracked by Lipper Inc. Past performance is not a guarantee of future results. You cannot invest directly in an index or average. 8 Statement of Net Assets DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC. - ---------------------------------------------------- Market Number of Value November 30, 2000 Shares (U.S.$) - -------------------------------------------------------------------------------- Common Stock - 77.80% Aerospace & Defense - 1.07% Lockheed Martin ...................................... 22,000 $ 750,200 ---------- 750,200 ---------- Automobiles & Automotive Parts - 2.84% Continental .......................................... 26,000 378,733 Ford Motor ........................................... 31,467 715,874 General Motors ....................................... 6,000 297,000 GKN .................................................. 56,000 609,809 ---------- 2,001,416 ---------- Banking, Finance & Insurance - 8.80% Bank One ............................................. 20,000 716,250 Bayerische Vereinsbank ............................... 7,800 398,856 Block (H&R) .......................................... 11,000 387,063 Chase Manhattan ...................................... 16,000 590,000 First Union .......................................... 17,200 432,150 Halifax Group ........................................ 32,000 297,018 ING Groep NV ......................................... 12,207 878,777 Keycorp .............................................. 26,000 648,375 National Australia Bank .............................. 58,130 912,863 National City ........................................ 25,000 618,750 Sanlam ............................................... 303,000 315,853 ---------- 6,195,955 ---------- Buildings & Materials - 1.66% Blue Circle Industries ............................... 77,922 512,099 Compagnie de Saint-Gobain ............................ 3,200 441,086 Wharf (Holdings) ..................................... 107,000 217,434 ---------- 1,170,619 ---------- Cable, Media & Publishing - 0.50% Gannett .............................................. 6,600 353,925 ---------- 353,925 ---------- Chemicals - 2.58% Bayer ................................................ 20,750 916,698 Dow Chemical ......................................... 24,000 733,500 Orica ................................................ 56,800 164,793 ---------- 1,814,991 ---------- Computers & Technology - 1.62% International Business Machines ...................... 6,000 561,000 Pitney Bowes ......................................... 20,000 581,250 ---------- 1,142,250 ---------- Consumer Products - 0.67% Siemens .............................................. 4,050 468,437 ---------- 468,437 ---------- Electronics & Electrical Equipment - 2.03% Eaton ................................................ 14,000 981,750 Rockwell International ............................... 6,300 253,575 Thomas & Betts ....................................... 13,000 190,125 ---------- 1,425,450 ---------- Market Number of Value Shares (U.S.$) - -------------------------------------------------------------------------------- Common Stock (continued) Energy - 5.10% Baker Hughes ......................................... 14,000 $ 462,875 Chevron .............................................. 14,000 1,146,250 Conoco Class B ....................................... 21,000 526,313 Royal Dutch Petroleum ................................ 11,700 701,051 RWE .................................................. 11,000 474,481 Sasol ................................................ 39,400 278,045 ---------- 3,589,015 ---------- Food, Beverage & Tobacco - 5.08% Bass ................................................. 56,470 594,030 Foster's Brewing Group ............................... 277,442 684,126 Goodman Fielder ...................................... 970,000 648,657 Heinz (H.J.) ......................................... 14,000 638,750 Philip Morris ........................................ 20,000 763,789 Uniq ................................................. 77,000 250,282 ---------- 3,579,634 ---------- Healthcare & Pharmaceuticals - 1.86% Glaxo Wellcome ....................................... 29,570 862,719 Schering-Plough ...................................... 8,000 448,500 ---------- 1,311,219 ---------- Industrial Machinery - 2.69% Caterpillar .......................................... 11,000 432,438 Deere & Co ........................................... 36,000 1,464,750 ---------- 1,897,188 ---------- Leisure, Lodging & Entertainment - 1.32% Carnival ............................................. 17,000 385,688 Viad ................................................. 24,000 544,500 ---------- 930,188 ---------- Metals & Mining - 2.02% Alcan Aluminum ....................................... 30,000 911,250 Rio Tinto ............................................ 32,111 484,642 Rouge Industries Class A ............................. 14,800 27,750 ---------- 1,423,642 ---------- Packaging & Containers - 0.65% Amcor ................................................ 170,100 454,100 ---------- 454,100 ---------- Paper & Forest Products - 3.65% Carter Holt Harvey ................................... 200,000 144,056 Georgia-Pacific (Timber Group) ....................... 38,300 1,036,494 International Paper .................................. 20,000 677,500 Paperlinx ............................................ 56,700 101,508 Weyerhaeuser ......................................... 14,000 612,500 ---------- 2,572,058 ---------- Real Estate - 17.17% AMB Property ......................................... 23,000 547,688 Apartment Investment & Management .................... 19,700 906,200 Camden Property Trust ................................ 10,000 310,625 9 Market Number of Value Delaware Group Global Dividend and Income Fund, Inc. Shares (U.S.$) - -------------------------------------------------------------------------------- Common Stock (continued) Real Estate (continued) Capital Automotive .................................. 6,500 $ 81,656 Chateau Communities ................................. 14,000 385,000 Corporate Office Properties ......................... 30,700 289,731 Duke-Weeks Realty ................................... 26,000 591,500 Equity Office Properties Trust ...................... 33,000 1,000,313 Franchise Finance ................................... 40,000 877,500 General Growth Properties ........................... 18,100 595,038 Liberty Property Trust .............................. 31,142 817,478 Macerich ............................................ 18,000 345,375 MeriStar Hospitality ................................ 28,000 526,750 Pan Pacific Retail Properties ....................... 33,800 699,238 Philips International Realty ........................ 22,600 384,200 Prentiss Properties Trust ........................... 47,508 1,190,669 Public Storage ...................................... 32,000 702,000 Reckson Associates Realty ........................... 44,000 1,031,250 Simon Property Group ................................ 8,000 183,500 Sun Communities ..................................... 20,000 620,000 ----------- 12,085,711 ----------- Retail - 2.89% Boots ............................................... 65,000 562,634 Great Universal Stores .............................. 128,700 963,894 Target .............................................. 17,000 511,063 ----------- 2,037,591 ----------- Telecommunications - 3.79% BellSouth ........................................... 12,000 501,750 Cable & Wireless .................................... 50,300 618,923 Telecom Corporation of New Zealand .................. 189,000 443,979 Verizon Communications .............................. 13,053 733,427 *WorldCom ............................................ 25,000 373,438 ----------- 2,671,517 ----------- Transportation & Shipping - 0.75% British Airways ..................................... 93,000 530,824 ----------- 530,824 ----------- Utilities - 9.06% BG .................................................. 121,754 500,534 Electrabel .......................................... 1,689 349,877 Hong Kong Electric Holdings ......................... 200,000 689,757 Iberdrola ........................................... 45,000 538,096 *Lattice Group ....................................... 89,957 190,666 PG&E ................................................ 32,000 878,000 Powergen ............................................ 82,300 683,699 Scottish Power ...................................... 26,100 766,688 Southern ............................................ 25,000 789,063 *Telefonica .......................................... 30,332 476,127 TXU ................................................. 13,000 519,188 ----------- 6,381,695 ----------- Total Common Stock (cost $56,551,497) ................................. 54,787,625 ----------- Market Number of Value Shares (U.S.$) - -------------------------------------------------------------------------------- Convertible Preferred Stock - 5.58% Banking, Finance & Insurance - 0.81% Sovereign Capital Trust II 7.50% ..................... 13,000 $ 572,000 ---------- 572,000 ---------- Buildings & Materials - 0.69% Ingersoll Rand 6.75% "PRIDES" ........................ 24,000 486,000 ---------- 486,000 ---------- Paper & Forest Products - 0.96% Georgia-Pacific Units 7.50% .......................... 22,500 675,000 ---------- 675,000 ---------- Real Estate - 1.22% General Growth Properties 7.25% ...................... 38,700 856,238 ---------- 856,238 ---------- Transportation & Shipping - 1.90% Greyhound Lines 8.50% ................................ 26,500 814,875 Union Pacific Capital Trust 6.25% "TIDES" ........................................... 12,000 526,500 ---------- 1,341,375 ---------- Total Convertible Preferred Stock (cost $4,776,700) ................................. 3,930,613 ---------- Principal Amount++ --------- Non-Convertible Bonds - 45.85% Banking, Finance & Insurance - 1.79% Banco Nacional de Comercia Exterior 7.25% 2/2/04 ............................... USD 750,000 725,625 Bank of Greece Series RG (loan stock) 10.75% 9/16/10 ............................. GBP 120,000 226,056 National Bank of Hungary 10.00% 8/5/03 .............................. 200,000 308,611 ---------- 1,260,292 ---------- Cable, Media & Publishing - 1.70% Adelphia Communications 9.375% 11/15/09 ............................ USD 1,000,000 730,000 Charter Communications 8.625% 4/1/09 .............................. 250,000 213,750 Granite Broadcasting 9.375% 12/1/05 ........... 500,000 252,500 ---------- 1,196,250 ---------- Computers & Technology - 0.32% Mercury Interactive 4.75% 7/1/07 .............. 275,000 224,125 ---------- 224,125 ---------- Consumer Products - 1.28% American Safety Razor Series B 9.875% 8/1/05 .............................. 475,000 458,375 Fedders North America 9.375% 8/15/07 ............................. 250,000 218,750 - ---------- All percentages are calculated based on total net assets. 10 Statement of Net Assets (continued) Market Principal Value Delaware Group Global Dividend and Income Fund, Inc. Amount++ (U.S.$) - -------------------------------------------------------------------------------- Non-Convertible Bonds (continued) Consumer Products (continued) Fisher Scientific International 9.00% 2/1/08 ............................... USD 250,000 $ 225,000 ----------- 902,125 ----------- Food, Beverage & Tobacco - 0.76% Chiquita Brands 9.625% 1/15/04 ................ 1,000,000 535,000 ----------- 535,000 ----------- Foreign Government - 26.88% Belgium Kingdom 5.75% 9/28/10 ................. EUR 1,200,000 1,071,548 Deutschland Republic 6.25% 1/1/24 ............. 1,000,000 950,093 Hellenic Republic 8.60% 3/26/08 ............... GRD 250,000,000 749,055 Hellenic Republic 8.70% 4/8/05 ................ 350,000,000 1,004,269 Hellenic Republic 9.20% 3/21/02 ............... 100,000,000 267,372 Hydro-Quebec (loan stock) 12.75% 9/13/15 ............................. GBP 160,000 376,610 New Zealand Government 8.00% 2/15/01 .............................. NZD 2,000,000 820,546 New Zealand Government 8.00% 4/15/04 .............................. 3,400,000 1,455,457 Poland Government Bond 8.50% 2/12/05 .............................. PLZ 7,000,000 1,252,874 Poland Government Bond 12.00% 10/12/03 ............................ 5,500,000 1,103,921 Portugal Government Bond 5.375% 6/23/08 ............................. EUR 1,000,000 873,476 Queensland Treasury 6.00% 7/14/09 ............. AUD 1,250,000 652,634 Republic of Argentina Series BGLO 11.00% 10/9/06 ............................. USD 1,500,000 1,323,750 Republic of Columbia 7.625% 2/15/07 ........... 1,000,000 747,500 Republic of South Africa Series 177 9.50% 5/15/07 .............................. 13,000,000 1,423,080 Republic of South Africa Series 162 12.50% 1/15/02 ............................. 14,000,000 1,828,427 Republic of South Africa Series 153 13.00% 8/31/10 ............................. ZAR 11,000,000 1,400,045 Russian Ministry of Finance 9.25% 11/27/01 ............................. USD 500,000 487,800 United Mexican States Global 8.25% 2/24/09 .............................. EUR 2,500,000 1,139,403 ----------- 18,927,860 ----------- Leisure, Lodging & Entertainment - 0.33% AFC Enterprises 10.25% 5/15/07 ................ USD 250,000 231,250 ----------- 231,250 ----------- Metals & Mining - 0.55% Weirton Steel 11.375% 7/1/04 .................. 950,000 384,750 ----------- 384,750 ----------- Packaging & Containers - 1.13% Container Corporation of America Series A 11.25% 5/1/04 ..................... 200,000 201,500 Delta Beverage Group 9.75% 12/15/03 ............................. 400,000 406,000 Market Principal Value Amount++ (U.S.$) - -------------------------------------------------------------------------------- Non-Convertible Bonds (continued) Packaging & Containers (continued) Pierce Leahy 8.125% 5/15/08 ................... USD 200,000 $ 187,000 ----------- 794,500 ----------- Paper & Forest Products - 1.14% Domtar 10.85% 8/5/17 .......................... CAD 1,000,000 805,893 805,893 Retail - 2.68% ASDA Group 10.875% 4/20/10 .................... GBP 250,000 465,531 Buhrmann 12.25% 11/1/09 ....................... USD 500,000 500,000 Fleming Companies 10.625% 12/15/01 ............ 400,000 390,000 Provigo Series 1991 11.25% 3/15/01 ............ CAD 800,000 529,496 ----------- 1,885,027 ----------- Telecommunications - 3.85% Allied Riser 7.50% 6/15/07 .................... USD 725,000 187,594 Global Crossing Holdings 9.50% 11/15/09 ............................. 850,000 714,000 Level 3 Communications 9.125% 5/1/08 .............................. 1,000,000 670,000 Level 3 Communications 6.00% 3/15/10 .............................. 600,000 277,500 Nextel Communications 9.375% 11/15/09 ............................ 1,000,000 862,500 ----------- 2,711,594 ----------- Transportation & Shipping - 0.90% Atlantic Express Transportation 10.75% 2/1/04 .............................. 300,000 226,500 Worldwide Flight 12.25% 8/15/07 ............... 600,000 411,000 ----------- 637,500 ----------- Utilities - 2.54% AES 10.25% 7/15/06 ............................ 400,000 406,000 Korea Electric Power 6.375% 12/1/03 ........... 1,000,000 958,000 Midland Funding II Series A 11.75% 7/23/05 ............................. 400,000 423,500 ----------- 1,787,500 ----------- Total Non-Convertible Bonds (cost $40,849,527) ......................... 32,283,666 ----------- Convertible Bonds - 2.33% Automobiles & Automotive Equipment - 0.81% MascoTech 4.50% 12/15/03 ...................... 900,000 571,500 ----------- 571,500 ----------- Banking, Finance & Insurance - 0.55% Bell Atlantic Financial 5.75% 4/1/03 .......... 400,000 384,031 ----------- 384,031 ----------- Real Estate - 0.97% IRT Property 7.30% 8/15/03 .................... 500,000 471,250 LTC Properties 8.50% 1/1/01 ................... 250,000 213,438 ----------- 684,688 ----------- Total Convertible Bonds (cost $1,926,055) .......................... 1,640,219 ----------- - ---------------------- All percentages are calculated based on total net assets. 11 Statement of Net Assets (continued) Market Principal Value Delaware Group Global Dividend and Income Fund, Inc. Amount++ (U.S.$) - -------------------------------------------------------------------------------- Short-Term Securities - 2.51% **U.S. Treasury Bills 5.54% due 12/21/00 .............................. USD 1,775,000 $ 1,768,729 ----------- Total Short Term Securities (cost $1,768,729) ......................... 1,768,729 ----------- Number of Shares --------- Stock Warrants - 0.00% Transportation & Shipping - 0.00% *Worldwide Flight ............................ 600 600 ----------- Total Warrants (cost $5,852) ................ 600 ----------- Total Market Value of Securities - 134.07% (cost $105,878,360) ....................... 94,411,452 +Liabilities Net of Receivables and Other Assets - (34.07%) ............... (23,990,992) ----------- Net Assets Applicable to 5,985,582 Shares ($0.01 par value) Outstanding; Equivalent to $11.77 per Share - 100.00% ....................... $70,420,460 =========== - ---------------------- All percentages are calculated based on total net assets. - -------------------------------------------------------------------------------- Components of Net Assets at November 30, 2000: Common stock, $0.01 par value, 500,000,000 shares authorized to the Fund ................................. $90,103,263 Treasury stock, 665,065 shares, at cost ....... (8,599,291) Accumulated net realized gain on investments and foreign currencies .......... 397,995 Net unrealized depreciation of investments and foreign currencies .......... (11,481,507) ----------- Total net assets .............................. $70,420,460 =========== - ---------------------- *Non-income producing security for the year ended November 30, 2000. **US Treasury Bills are traded on a discount basis; the interest rate shown is the effective yield at the time of purchase by the Fund. +Of this amount, $25,000,000 represents borrowings under the the Fund's Line of Credit. See Note 5 in "Notes to Financial Statements." ++Principal amount is stated in the currency in which each bond is denominated. - ---------------------- Summary of Abbreviations PRIDES - Preferred Redeemable Increased Dividend Equity Securities TIDES - Term Income Deferred Equity Securities AUD - Australian Dollar CAD - Canadian Dollar EUR - European Monetary Unit GBP - British Pound Sterling GRD - Greek Drachma NZD - New Zealand Dollar PLZ - Polish Zloty USD - U.S. Dollar ZAR - South African Rand See accompanying notes 12 Statement of Assets and Liabilities
Year Ended November 30, 2000 Delaware Group Global Dividend and Income Fund, Inc. - ---------------------------------------------------------------------------------------------------- Assets: Investments at market (cost $105,878,360) .............................................$94,411,452 Foreign currency contracts, net ....................................................... 20,086 Cash and foreign currencies ........................................................... 55,102 Dividends and interest receivable ..................................................... 1,296,410 Receivable for securities sold ........................................................ 4,215,979 ----------- Total assets .......................................................................... 99,999,029 ----------- Liabilities: Payable for securities purchased ...................................................... 4,158,813 Line of credit ........................................................................ 25,000,000 Accrued interest payable .............................................................. 186,798 Other accounts payable and accrued expenses ........................................... 232,958 ----------- Total liabilities ..................................................................... 29,578,569 ----------- Total Net Assets ......................................................................$70,420,460 ===========
See accompanying notes 13 Statement of Operations
Year Ended November 30, 2000 Delaware Group Global Dividend and Income Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------- Investment Income Interest ........................................................................ $ 4,321,055 Dividends (net of foreign taxes withheld of $72,215) ............................ 3,012,760 $ 7,333,815 ------------ ------------ Expenses: Management fees ................................................................. 757,038 Accounting and administration fees .............................................. 100,000 Professional fees ............................................................... 95,666 Custodian fees .................................................................. 69,050 Reports and statements to shareholders .......................................... 54,446 Taxes (other than taxes on income) .............................................. 16,350 Transfer agent fees ............................................................. 11,750 Directors' fees ................................................................. 8,000 Other ........................................................................... 11,308 ------------ Total operating expenses (before interest expense) .............................. 1,123,608 Interest expense ................................................................ 1,754,676 ------------ Total operating expenses (after interest expense) ............................... 2,878,284 Less: expenses paid indirectly .................................................. (2,038) ------------ Total expenses .................................................................. 2,876,246 ------------ Net Investment Income ........................................................... 4,457,569 ------------ Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currencies: Net realized gain (loss) on: Investments .................................................................. 3,267,814 Options written .............................................................. 38,470 Foreign currencies ........................................................... (1,085,802) ------------ Net realized gain ............................................................... 2,220,482 Net change in unrealized appreciation/depreciation on investments and foreign currencies ............................................ (10,699,190) ------------ Net Realized and Unrealized Loss on Investments and Foreign Currencies ............................................................ (8,478,708) ------------ Net Decrease in Net Assets Resulting from Operations ............................ $ (4,021,139) ============
See accompanying notes 14 Statements of Changes in Net Assets
Delaware Group Global Dividend and Income Fund, Inc. - -------------------------------------------------------------------------------- Year Ended 11/30/00 11/30/99 Operations: Net investment income ............................... $4,457,569 $6,193,806 Net realized gain on investments and foreign currencies ......................................... 2,220,482 3,674,549 Net change in unrealized appreciation/depreciation of investments and foreign currencies .............. (10,699,190) (10,773,534) ------------------------- Net decrease in net assets resulting from operations ......................................... (4,021,139) (905,179) ------------------------- Dividends and Distributions to Shareholders from: Net investment income ............................... (3,371,767) (5,732,051) Net realized gain on investments .................... (3,195,427) (5,207,792) Return of capital ................................... (2,992,791) - ------------------------- (9,559,985) (10,939,843) ------------------------- Capital Stock Transactions: Cost of shares repurchased (See Note 4) ............. (8,599,291) - ------------------------- Decrease in net assets derived from capital stock transactions ................................. (8,599,291) - ------------------------- Net Decrease in Net Assets .......................... (22,180,415) (11,845,022) Net Assets: Beginning of period ................................. 92,600,875 104,445,897 ------------------------- End of period ....................................... $70,420,460 $92,600,875 =========================
See accompanying notes 15 Statement of Cash Flows
Year Ended November 30, 2000 Delaware Group Global Dividend and Income Fund, Inc. - ---------------------------------------------------------------------------------------------------------- Net Cash (Including Foreign Currency) Provided by Operating Activities: Net decrease in net assets resulting from operations ....................................................................... $ (4,021,139) ------------ Adjustments to reconcile net decrease in net assets from operations to cash provided by operating activities: Amortization of discount on securities .............................................. (443,613) Net proceeds from investment transactions ........................................... 10,960,096 Net realized gain on investments .................................................... (3,306,284) Net realized loss on foreign currencies ............................................. 1,085,802 Net change in unrealized appreciation/depreciation of investments and foreign currencies ................................................. 10,699,190 Increase in receivable for investments sold ......................................... (2,746,120) Increase in interest and dividends receivable ....................................... (14,927) Increase in payable for investments purchased ....................................... 3,525,510 Increase in interest payable ........................................................ 33,257 Decrease in accrued expenses and other liabilities .................................. (78,236) ------------ Total adjustments ................................................................... 19,714,675 ------------ Net cash provided by operating activities .............................................. 15,693,536 ------------ Cash Flows Used for Financing Activities: Repurchase of capital stock ......................................................... (8,599,291) Proceeds from line of credit (Note 5) ............................................... 25,000,000 Principal repayment on line of credit (Note 5) ...................................... (25,000,000) Cash distributions paid ............................................................. (9,559,985) ------------ Net cash used for financing activities ................................................. (18,159,276) ------------ Effect of exchange rates on cash ....................................................... (317,829) ------------ Net decrease in cash ................................................................... (2,783,569) Cash at beginning of period ............................................................ 2,838,671 ------------ Cash at end of period .................................................................. $ 55,102 ============ Cash paid for interest ................................................................. $ 1,721,419 ============
See accompanying notes 16 Financial Highlights
Selected data for each share of the Fund outstanding throughout each period were as follows: Delaware Group Global Dividend and Income Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 11/30/00 11/30/99 11/30/98 11/30/97 11/30/96 Net asset value, beginning of period .................................. $13.92 $15.70 $17.09 $15.81 $14.06 Income (loss) from investment operations: Net investment income .............................................. 0.70 0.93 1.09 1.00 0.98 Net realized and unrealized gain (loss) on investments and foreign currencies ............................... (1.35) (1.07) (0.70) 1.78 2.27 -------------------------------------------------------- Total from investment operations ................................... (0.65) (0.14) 0.39 2.78 3.25 -------------------------------------------------------- Less dividends and distributions: Dividends from net investment income ............................... (0.53) (0.86) (1.38) (0.95) (1.02) Distributions from net realized gains on investments ............... (0.47) (0.78) (0.40) (0.55) (0.48) Return of capital .................................................. (0.50) - - - - -------------------------------------------------------- Total dividends and distributions .................................. (1.50) (1.64) (1.78) (1.50) (1.50) -------------------------------------------------------- Net asset value, end of period ........................................ $11.77 $13.92 $15.70 $17.09 $15.81 ======================================================== Market value, end of period ........................................... $10.38 $11.75 $15.88 $17.31 $15.88 ======================================================== Total return based on:(1) Market value .......................................................... 0.29% (17.00%) 2.05% 18.98% 27.42% Net asset value ....................................................... (4.04%) (0.57%) 2.19% 17.93% 24.10% Ratios and supplemental data: Net assets, end of period (000 omitted) ............................ $70,420 $92,601 $104,446 $113,685 $105,120 Ratio of total operating expenses to average net assets ............ 3.45% 2.69% 2.69% 2.67% 2.61% Ratio of total operating expenses to adjusted average net assets (before interest expense)(2) .......................... 1.04% 1.00% 1.03% 1.02% 1.09% Ratio of interest expense to adjusted average net assets(2) ........ 1.62% 1.15% 1.16% 1.16% 1.06% Ratio of net investment income to average net assets ............... 5.34% 6.14% 6.63% 6.03% 6.80% Ratio of net investment income to adjusted average net assets(2) ... 4.11% 4.92% 5.38% 4.93% 5.59% Portfolio turnover ................................................. 43% 58% 51% 68% 88% Leverage analysis: Debt outstanding at end of period (000 omitted) .................... $25,000 $25,000 $25,000 $25,000 $25,000 Average daily balance of debt outstanding (000 omitted) ............ $25,000 $25,000 $25,000 $25,000 $20,355 Average daily balance of shares outstanding (000 omitted) .......... 6,389 6,651 6,651 6,651 6,651 Average debt per share ............................................. $3.91 $3.76 $3.76 $3.76 $3.06
- ---------------------- (1) Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions are assumed for the purposes of this calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Generally, total investment return based on net asset value will be higher than total investment return based on market value in periods where there is an increase in the discount or a decrease in the premium of the market value to the net asset value from the beginning to the end of such periods. Conversely, total investment return based on net asset value will be lower than total investment return based on market value in periods where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the end of such periods. (2) Adjusted average net assets excludes debt outstanding. See accompanying notes 17 Notes to Financial Statements Year Ended November 30, 2000 - -------------------------------------------------------------------------------- Delaware Group Global Dividend and Income Fund, Inc. (the "Fund") is registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended. The Fund is organized as a Maryland corporation. The primary investment objective is to seek high current income. Capital appreciation is a secondary objective. 1. Significant Accounting Policies The following accounting policies are in accordance with accounting principles generally accepted in the United States and are consistently followed by the Fund. Security Valuation - All equity securities are valued at the last quoted sales price as of the regular close of the New York Stock Exchange (NYSE) on the valuation date. If on a particular day an equity security does not trade, then the mean between the bid and asked prices will be used. Securities listed on a foreign exchange are valued at the last quoted sales price before the Fund is valued. Long-term debt securities are valued by an independent pricing service and such prices are believed to reflect the fair value of such securities. Money market instruments having less than 60 days to maturity are valued at amortized cost, which approximates market value. Other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Fund's Board of Directors. Federal Income Taxes - The Fund intends to continue to qualify as a regulated investment company for federal income tax purposes and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements. Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. Distributions - In December 1995, the Fund implemented a managed distribution policy. Under the policy, the Fund declares and pays monthly distributions at an annual rate of not less than $1.50 per share and is managed with a goal of generating as much of the distribution as possible from ordinary income (net investment income and short-term capital gains). The balance of the distribution then comes from long-term capital gains and, if necessary, a return of capital. Foreign Currency Transactions - Transactions denominated in foreign currencies are recorded at the current prevailing exchange rates. The value of all assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of such currencies against the U.S. dollar daily. Transaction gains or losses resulting from changes in exchange rates during the reporting period or upon settlement of the foreign currency transaction are reported in operations for the current period. It is not practical to isolate that portion of both realized and unrealized gains and losses on investments in equity securities that result from fluctuations in foreign currency exchange rates in the Statement of Operations. The Fund does isolate that portion of gains and losses on investments in debt securities, which are due to changes in the foreign exchange rate from that which are due to changes in market prices of debt securities. The Fund reports certain foreign currency related transactions as components of realized gains (losses) for financial reporting purposes, where such components are treated as ordinary income (loss) for federal income tax purposes. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Other - Security transactions are recorded on the date the securities are purchased or sold (trade date). Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Foreign dividends are also recorded on the ex-dividend date or as soon after the ex-dividend date that the Fund is aware of such dividends, net of all non-rebatable tax withholdings. Original issue discounts are accreted to interest income over the lives of the respective securities. Withholding taxes on foreign dividends have been provided for in accordance with the Fund's understanding of the applicable country's tax rules and rates. Certain expenses of the Fund are paid through "commission" arrangements with brokers. These transactions are done subject to best execution. The amount of these expenses was $2,038 for the year ended November 30, 2000. The Fund may receive earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. There were no earnings credits for the year ended November 30, 2000. The expenses paid under the above arrangements are included in their respective expense captions on the Statement of Operations with the corresponding expense offset shown as "expenses paid indirectly." 2. Investment Management, Administration Agreements and Other Transactions with Affiliates In accordance with the terms of the investment management agreement, the Fund pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager of the Fund, an annual fee which is calculated daily at the rate of 0.70% of the adjusted average weekly net assets. At November 30, 2000, the Fund had a liability for investment management fees and other expenses payable to DMC of $122,357. The Fund has entered into a sub-advisory agreement with Delaware International Advisers Ltd. (DIAL), an affiliate of DMC, related to the foreign securities portion of the Fund. For the services provided DMC pays DIAL an annual fee which is equal to 40% of the adjusted average weekly net assets. The Fund does not pay any fees for these services. 18 Notes to Financial Statements (continued) - -------------------------------------------------------------------------------- Investment Management, Administration Agreements and Other Transactions with Affiliates (continued) The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC, to provide accounting and administration services. The Fund pays DSC a monthly fee computed at the annual rate of 0.05% of the Fund's adjusted average weekly net assets subject to an annual minimum of $100,000. At November 30, 2000, the Fund had a liability for such fees and other expenses payable to DSC of $22,491. For purposes of the calculation of investment management fees and administration fees, adjusted average weekly net assets do not include the Line of Credit liability. Certain officers of DMC and DSC are officers, directors and/or employees of the Fund. These officers, directors and/or employees are paid no compensation by the Fund. 3. Investments During the year ended November 30, 2000, the Fund made purchases of $44,537,990 and sales of $52,022,241 of investment securities other than U.S. government securities and temporary cash investments. At November 30, 2000, the aggregate cost of securities and unrealized appreciation/depreciation for federal income tax purposes for the Fund was as follows: Cost of investments .......................................... $105,958,651 ------------ Aggregate unrealized appreciation ............................ $5,561,705 Aggregate unrealized depreciation ............................ (17,108,904) ------------ Net unrealized depreciation .................................. ($11,547,199) ------------ 4. Capital Shares On April 20, 2000, the Fund's Board of Directors approved a tender offer for shares of the Fund's common stock. The tender offer authorized the Fund to purchase and hold as treasury shares up to 10% percent of its issued and outstanding shares at a price equal to the Fund's net asset value on June 30, 2000, the first business day following the expiration of the offer. The tender offer commenced on June 1, 2000 and expired on June 29, 2000. In connection with the tender offer, the Fund purchased 665,065 shares of capital stock at a total cost of $8,599,291. The 665,065 treasury shares will be available for issuance by the Fund without further shareholder action. The Fund did not repurchase any shares under the Share Repurchase Program during the fiscal year ended November 30, 2000. Shares issuable under the Fund's dividend reinvestment plan are purchased by the Fund's transfer agent, Mellon Investor Services, LLC., in the open market. 5. Line of Credit The Fund has entered into a $25,000,000 Line of Credit Agreement with Chase Manhattan Bank. At November 30, 2000, the principal amount outstanding was $25,000,000 at a variable interest rate of 7.27%. During the year ended November 30, 2000, the average daily balance outstanding was $25,000,000 at a weighted average interest rate of approximately 6.86%. The maximum amount outstanding at any time during the year was $25,000,000. Borrowings under the Agreement are collateralized by the Fund's portfolio. 6. Foreign Exchange Contracts The Fund may enter into forward foreign currency contracts and forward foreign cross currency exchange contracts as a way of managing foreign exchange rate risk. A Fund may enter into these contracts to fix the U.S. dollar value of a security that it has agreed to buy or sell for the period between the date the trade was entered into and the date the security is delivered and paid for. The Fund may also use these contracts to hedge the U.S. dollar value of securities it already owns denominated in foreign currencies. Forward foreign currency contracts and forward foreign cross currency exchange contracts are valued at the mean between the bid and asked prices of the contracts and are marked-to-market daily. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. The change in market value is recorded by the Fund as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of forward foreign currency contracts and forward foreign cross currency exchange contracts does not eliminate fluctuations in the underlying prices of the Fund's securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. The following forward foreign cross currency contracts were outstanding at November 30, 2000: Contracts To In Exchange Settlement Unrealized Receive For Date Appreciation - ------------ ----------- ---------- ------------ EUR 1,596,423 GBP 964,000 2/28/01 $20,086 EUR - European Monetary Unit GBP - British Pound Sterling 7. Options Written The Fund may enter into options contracts in accordance with its investment objectives. When the Fund writes an option, a premium is received and a liability is recorded and adjusted on a daily basis to reflect the current market value of the options written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including 19 Notes to Financial Statements (continued) Year Ended November 30, 2000 - -------------------------------------------------------------------------------- Options Written (continued) brokerage commissions, is treated as a realized gain or loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option. Transactions in options written during the year ended November 30, 2000 for the Fund were as follows: Number of Contracts Premiums ------------ -------- Options outstanding at November 30, 1999 ............................ 247 $38,470 Options written ................................. -- -- Options terminated in closing purchase transaction ......................... -- -- Options expired ................................. (247) (38,470) ---- ------- Options outstanding at November 30, 2000 ............................ -- -- ==== ======= 8. Credit and Market Risks Some countries in which the Fund invests require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, if there is a deterioration in a country's balance of payments or for other reasons, a country may impose temporary restrictions on foreign capital remittances abroad. The securities exchanges of certain foreign markets are substantially smaller, less liquid and more volatile than the major securities markets in the United States. Consequently, acquisition and disposition of securities by the Fund may be inhibited. In addition, a significant proportion of the aggregate market value of equity securities listed on the major securities exchanges in emerging markets are held by a smaller number of investors. This may limit the number of shares available for acquisition or disposition by the Fund. The Fund invests in high-yield fixed income securities which carry ratings of BB or lower by S&P and /or Ba or lower by Moody's. Investments in these higher yielding securities may be accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities. The Fund may invest up to 10% of its total assets in illiquid securities which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of some of these securities may adversely affect the Fund's ability to dispose of such securities in a timely manner and at a fair price when it is necessary to liquidate such securities. 9. Geographic Disclosure As of November 30, 2000, the Fund's geographic diversification* was as follows: United States ........................ $52,725,229 55.85% United Kingdom ....................... 8,127,292 8.61% South Africa ......................... 5,245,450 5.56% Australia ............................ 3,618,681 3.83% Germany .............................. 3,587,298 3.80% New Zealand .......................... 2,864,038 3.03% Poland ............................... 2,356,795 2.50% Greece ............................... 2,246,752 2.38% Mexico ............................... 1,865,028 1.98% Canada ............................... 1,711,999 1.81% Netherlands .......................... 1,579,828 1.67% Belgium .............................. 1,421,425 1.51% Argentina ............................ 1,323,750 1.40% Spain ................................ 1,014,223 1.07% Korea ................................ 958,000 1.01% Hong Kong ............................ 907,191 0.96% Portugal ............................. 873,476 0.92% Columbia ............................. 747,500 0.79% Russia ............................... 487,800 0.52% France ............................... 441,086 0.47% Hungary .............................. 308,611 0.33% ----------- ------- Total ................................ $94,411,452 100.00% =========== ======= - --------------- * Based on the domicile of each security's issuer. Like any investment in securities, the value of the portfolio may be subject to risk or loss from market, currency, economic and political factors which occur in the countries where the Fund is invested. 20 Notes to Financial Statements (continued) - -------------------------------------------------------------------------------- 10. Tax Information (Unaudited) The information set forth below is for the Fund's fiscal year as required by federal laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of a Fund. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in early 2001. Please consult your tax advisor for proper treatment of this information. For the fiscal year ended November 30, 2000, the Fund designates distributions paid during the year as follows: (A)* (B)* (C)* (D) (E)** Long-Term Ordinary Capital Gains Income Return Total Distributions Distributions of Capital Distribution Qualifying (Tax Basis) (Tax Basis) (Tax Basis) (Tax Basis) Dividends(1) - ------------- ------------- ----------- ------------- ------------ 9% 60% 31% 100% 42% *Items (A) (B) and (C) are based on a percentage of the Fund's total distributions. **Item (E) is based on a percentage of ordinary income of the Fund. (1)Qualifying dividends represent dividends which qualify for the corporate dividends received deduction. The amount per share of income from the foreign taxes paid to each country is listed in the following schedule: Gross Dividend Foreign Taxes Country Per Share Paid Per Share - ------- ------------------------------- Australia .................................. $0.0272 $0.0015 Belgium .................................... 0.0033 0.0005 Germany .................................... 0.0095 0.0010 France ..................................... 0.0013 0.0002 Hong Kong .................................. 0.0082 0.0000 Netherlands ................................ 0.0072 0.0011 New Zealand ................................ 0.0091 0.0014 Spain ...................................... 0.0039 0.0006 South Africa ............................... 0.0032 0.0000 United Kingdom ............................. 0.0729 0.0058 Report of Independent Auditors - -------------------------------------------------------------------------------- To the Shareholders and Board of Directors Delaware Group Global Dividend and Income Fund, Inc. We have audited the accompanying statement of net assets and statement of assets and liabilities of Delaware Group Global Dividend and Income Fund, Inc. (the "Fund") as of November 30, 2000, and the related statements of operations and cash flows for the year then ended, the statements of changes in 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. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2000, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Delaware Group Global Dividend and Income Fund, Inc. at November 30, 2000, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Philadelphia, Pennsylvania January 5, 2001 21
DELAWARE(SM) DGF Registrar and Stock Transfer Agent INVESTMENTS Listed Mellon Investors Services, LLC - --------------------- NYSE Overpeck Centre Philadelphia o London THE NEW YORK STOCK EXCHANGE 85 - Challenger Road Ridgefield, NJ 07660 1.800.851.9677 For Securities Dealers 1.800.362.7500 For Financial Institutions Representatives Only 1.800.659.2265 www.delawareinvestments.com
This annual report is for the information of Delaware Group Global Dividend and Income Fund, Inc. shareholders. It sets forth details about charges, expenses, investment objectives and operating policies of the Fund. You should read the prospectus carefully before you invest. The return and principal value of an investment in the Fund will fluctuate so that shares, when resold, may be worth more or less than their original cost. Notice is hereby given in accordance with Section 23(c) of the Investment Act of 1940 that the Fund may from time-to-time purchase shares of its Common Stock on the open market at market prices.
BOARD OF DIRECTORS Thomas F. Madison Joseph H. Hastings President and Chief Executive Officer Senior Vice President/Corporate Controller Charles E. Haldeman, Jr. MLM Partners, Inc. Philadelphia, PA Chairman Minneapolis, MN Delaware Investments Family of Funds Michael P. Bishof Philadelphia, PA Janet L. Yeomans Senior Vice President/Treasurer Vice President and Treasurer Philadelphia, PA Walter P. Babich+ 3M Corporation Board Chairman St. Paul, MN Lisa O. Brinkley Citadel Constructors, Inc. Senior Vice President/Compliance Director King of Prussia, PA Philadelphia, PA David K. Downes AFFILIATED OFFICERS Investment Manager President and Chief Executive Officer Delaware Management Company Delaware Investments Family of Funds Richard J. Flannery Philadelphia, PA Philadelphia, PA President and Chief Executive Officer Delaware Family of Funds International Affiliate John H. Durham Delaware Distributors L.P. Delaware International Advisers Ltd. Private Investor London, England Horsham, PA William E. Dodge Executive Vice President/ Principal Office of the Fund John A. Fry Chief Investment Officer, Equity 2005 Market Street Executive Vice President Philadelphia, PA Philadelphia, PA 19103-7057 University of Pennsylvania Philadelphia, PA Jude T. Driscoll Independent Auditors Executive Vice President/ Ernst & Young LLP Anthony D. Knerr+ Head of Fixed Income 2001 Market Street Consultant, Anthony Knerr & Associates Delaware Family of Funds Philadelphia, PA New York, NY Ann R. Leven+ Former Treasurer, National Gallery of Art Washington, DC
+ Audit Committee Member (4154) Printed in the USA AR-DGF [11/00] PPL 1/01 Recordholders as of November 30, 2000: 231 (J6656) -----END PRIVACY-ENHANCED MESSAGE-----