-----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, EIk4Bt8wDce4DdXhLjCunxgL1KtsyexW+Rj6QIX2kq740Ql6R+Y/4n5EAFUT1QDj S+YNMJeKCKMMC2fax7I2qw== 0000950116-02-001626.txt : 20020729 0000950116-02-001626.hdr.sgml : 20020729 20020729104440 ACCESSION NUMBER: 0000950116-02-001626 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020531 FILED AS OF DATE: 20020729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELAWARE INVESTMENTS GLOBAL DIVIDEND & INCOME FUND INC CENTRAL INDEX KEY: 0000916713 IRS NUMBER: 232753201 STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-08246 FILM NUMBER: 02712748 BUSINESS ADDRESS: STREET 1: 2005 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2152552127 MAIL ADDRESS: STREET 1: 2005 MARKET STREET STREET 2: . CITY: PHILADELPHIA STATE: PA ZIP: 19103 FORMER COMPANY: FORMER CONFORMED NAME: DELAWARE GROUP GLOBAL DIVIDEND & INCOME FUND INC DATE OF NAME CHANGE: 19931229 N-30D 1 n30d.txt N-30D Delaware Investments(SM) - --------------------------------------- A member of Lincoln Financial Group(R) [Closed End Artwork] CLOSED-END Semiannual Report 2002 DELAWARE INVESTMENTS Global Dividend and Income Fund, Inc. [LOGO] POWERED BY RESEARCH.(SM) Table of Contents Letter to Shareholders 1 Portfolio Management Review 3 Performance Summary 6 Financial Statements: Statement of Net Assets 7 Statement of Operations 13 Statements of Changes in Net Assets 14 Statement of Cash Flows 15 Financial Highlights 16 Notes to Financial Statements 17 Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested. Mutual fund advisory services provided by Delaware International Advisers Ltd., which is a registered investment advisor. (C) Delaware Distributors, L.P. Your Fund's Investment Strategies A Tradition of Sound Investing Since 1929 U.S. Common Stocks with Above-Average Yields The Fund's management focuses on 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 stocks 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 fluctuations. 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, 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 $21 million (30.50%) of your Fund's total net assets were leveraged as of May 31, 2002. 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 Delaware Investments Global Dividend and Income Fund, Inc. to purchase up to 10% of its outstanding shares on the floor of the New York Stock Exchange. During the six-month period ended May 31, 2002, 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. Your Reinvestment Options Delaware Investments Global Dividend and Income Fund, Inc. offers an automatic dividend reinvestment program. If you would like to reinvest dividends, and shares are registered in your name, contact Mellon Investor Services, LLC at 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 advisor. Letter to Shareholders Delaware Investments Global Dividend and Income Fund, Inc. June 11, 2002 Recap of Events During the six months ended May 31, 2002, the U.S. economy showed signs of renewed strength after a brief and mild recession that appeared to end in November. In the first quarter of 2002, the U.S. economy grew by an annualized rate of +6.1% as measured by the gross domestic product (GDP). However, unemployment rates continued to rise, peaking at a 7 1/2 year high of 6% in April. Meanwhile, corporations struggled to resume steady and strong sales and earnings growth. The Federal Reserve's aggressive interest rate cuts (11 reductions to the fed funds rate throughout 2001) are beginning to take effect. It can take nine months or longer for interest rate reductions to be felt throughout the economy. However, the effects have yet to be reflected in rising corporate profits or renewed investor confidence. Complicating things is the skepticism investors have displayed regarding corporate accounting practices in the aftermath of the Enron meltdown and discouraging revelations elsewhere. Clearly, it will take time to shake off the negativity surrounding market news coming out of this very difficult period. Delaware Investments Global Dividend and Income Fund, Inc. returned +9.21% (at net asset value with distributions reinvested) for the six-month period ended May 31, 2002. The Fund outperformed the +0.93% gain by the Morgan Stanley Capital International (MSCI) Europe, Australia, and Southeast Asia (EASEA) Index during the period. It also strongly outperformed the +2.01% gain of its peer group, the Lipper Closed-End Income and Preferred Stock Funds Average. Market Outlook We continue to expect price volatility, as investors remain skeptical in the wake of the Enron collapse and other corporate accounting and reporting uncertainties. Investors will need compelling reasons to begin buying and holding stocks again, which may happen naturally once corporations begin reporting profit growth amidst the economic recovery. Barring an energy crisis or a worsening of the situation in the Middle East, we think investors could see strong earnings improvements in the second half of 2002, within the context of a fairly modest economic recovery. Ultimately, we expect that steady economic growth, low inflation, low interest rates and high levels of productivity will lead to improved profitability in the coming months. Due to the modest expected rate of economic recovery, we do not expect to see any fed funds rate increases for at least several months.
Total Return Premium(+) / At Net Asset Value Discount (-) For the period ended May 31, 2002 Six Months As of 5/31/02 - ------------------------------------------------------------------------------------------------------------ Delaware Investments Global Dividend and Income Fund, Inc. +9.21% +14.78% Standard & Poor's 500 Index -5.67% Merrill Lynch High-Yield Bond Index +2.29% Morgan Stanley Capital International (MSCI) Europe, Australia, and Southeast Asia (EASEA) Index +0.93% Salomon Smith Barney Non-U.S. World Government Bond Index +4.79% Lipper Closed-End Income and Preferred Stock Funds Average (11 funds) +2.01% - ------------------------------------------------------------------------------------------------------------
All performance shown above is at net asset value and assumes reinvestment of all distributions. Performance information at market price and net asset value can be found on page 6. The S&P 500 Index is an unmanaged composite of 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 Closed-End Income and Preferred Stock Funds Average represents the average return of income and preferred stock closed-end funds tracked by Lipper (Source: Lipper Inc.). You cannot invest directly in an index. Past performance is not a guarantee of future results. 1 Overall, we see plenty of investment opportunities beginning to unfold. We expect that long-term investors will continue to benefit from the broad diversification and income-oriented investment style that Delaware Investments Global Dividend and Income Fund, Inc. offers. Thank you for your continued confidence in, and commitment to, Delaware Investments. Sincerely, /s/ Charles E. Haldeman, Jr. - ------------------------------------- Charles E. Haldeman, Jr. Chairman, Delaware Investments Family of Funds /s/ David K. Downes - -------------------------------------- David K. Downes President and Chief Executive Officer, Delaware Investments Family of Funds 2 Portfolio Management Review Delaware Investments Global Dividend and Income Fund, Inc. June 11, 2002 Fund Managers Peter C. Andersen Senior Portfolio Manger U.S. Fixed Income Delaware Management Company Damon J. Andres Senior Portfolio Manager U.S. Equities Delaware Management Company Nancy M. Crouse Senior Portfolio Manager U.S. Equities Delaware Management Company Joanna Bates Senior Portfolio Manager Foreign Fixed Income Delaware Investment Advisers Ltd. Clive A. Gillmore Senior Portfolio Manager Foreign Equities Delaware Investment Advisers Ltd. Christopher A. Moth Senior Portfolio Manager Foreign Fixed-Income Delaware Investment Advisers Ltd. The Fund's Results In late 2001, investors worldwide were grappling with the effects of recessions in the U.S. and Europe, as well as continued market volatility. By March 2002, signs of economic strengthening began to emerge in the U.S., aided in part by low interest rates and strong consumer spending. While an economic recovery is under way in the U.S., the recovery appears more subdued than normal. Meanwhile, legal and accounting issues surrounding several high profile U.S. corporations have plagued investor confidence in recent months. For the six months ended May 31, 2002, the S&P 500 Index fell by -5.67%. As 2002 progressed into spring, non-U.S. equity performance, as measured by the Morgan Stanley Capital International (MSCI) Europe, Australia, and Southeast Asia (EASEA) Index, improved dramatically as major euro zone economies began to record stronger output. This market strength carried through to the end of May, so that during the Fund's first half of its fiscal year the MSCI EASEA Index gained +0.93% (all non-U.S. returns are quoted in U.S. dollars). Despite the challenges of global markets where performance could be called "mixed" at best, Delaware Investments Global Dividend and Income Fund, Inc. enjoyed gains for the six months ended May 31, 2002. During this period, your Fund posted a +9.21% return (at net asset value with distributions reinvested). Positive total return performance in the bond market contributed to the Fund's strong performance. For the period, both the Salomon Smith Barney Non-U.S. World Government Bond Index (+4.79%) and the Merrill Lynch High-Yield Bond Index (+2.29%) posted net gains. Portfolio Highlights In our pursuit of income generated by investments from around the world, we have kept your Fund widely diversified. As always, the portfolio included both stock and bond investments from the U.S. and foreign markets. The Fund had 42.10% of its net assets in non-U.S. investments as of May 31, 2002, and the investment portfolio had been expanded to include 274 different securities in total -- an increase over recent periods that was a consequence of volatility in many world markets. We believe that diversification generally helped the Fund during the period. U.S. Stocks Though the anticipated rebound of cyclical stocks didn't meet our expectations during the period, some of the cyclical stocks that we held performed relatively well. Forest products leader Weyerhaeuser generated attractive returns following completion of its acquisition of Willamette Industries. Within Weyerhaeuser's core business, price increases have begun to surface due to a disciplined capacity shutdown. The Fund also continues to have a significant allocation to real estate investment trusts (REITs), which have performed well for more than two years running. As a group, REITs were among the portfolio's best performers again during the six-month period. REITs offer steady, reliable income, which make them a natural investment for a Fund looking to deliver consistent cash flow to shareholders. 3 Our holdings in the capital goods sectors of the economy -- which included Caterpillar, Emerson Electric, and Deere & Company (better known as John Deere) - -- also generated strong returns. We believe that a recently approved U.S. farm bill enabling farmers to increase equipment spending is likely to benefit companies such as John Deere. We also began increasing our positions in consumer growth areas, specifically large pharmaceutical companies. While we experienced disappointments among pharmaceutical holdings during the period, we believe this sector offers long-term value. A number of issues have negatively impacted drug companies recently, including patent expirations, a decline in new product rollouts, and competition from generic drugs amid demand for lower healthcare costs. Despite these issues, we feel demographics favor this industry strongly, and will continue to capitalize on select opportunities such as Bristol-Myers Squibb, Abbott Laboratories, and Schering-Plough, which we feel offer compelling valuations and strong balance sheets. Foreign Stocks The collapse of Enron in the U.S. had little direct impact on international equity markets. Nonetheless, the debate that has been initiated on appropriate accounting practices has led to some sharp share price reactions in companies with poor transparency and a history of aggressive accounting practices. As investors in international equity markets, we have been very cognizant of the drawbacks to certain accounting practices used in various markets. Varying practices, in our view, highlight the need for detailed country and sector knowledge, rigorous fundamental analysis and an investment methodology that is applicable in all countries. Most of our strategies with regard to the investment portfolio remained in place during the past six months. Within the foreign stock section of the portfolio, we continue to hold a heavier weighting than the MSCI EASEA Index in the U.K. and are generally attracted to the banking, finance, and insurance sector, where we hold HBOS, Lloyds TSB Group, and ING Groep NV of the Netherlands. Many of our top non-U.S. equity holdings at period end were names that have been in the portfolio for some time, including GlaxoSmithKline, Boots, Foster's Brewing Group, and France's Societe Generale, among others. High-Yield Bonds Our high-yield bond allocation was a positive contributor to performance during the period, as the market for non-investment grade debt has improved over recent periods. Despite poor performance among many cable issues stemming from Adelphia's much-publicized troubles, the sector (cable, media, and publishing in the Fund's Statement of Net Assets) remains a large part of high-yield bond indexes. We remain bullish on some cable-related companies, such as Charter Communications, and feel that the yields in the sector are attractive. We continued to focus on companies whose business models and balance sheets are easily understood. With the SEC and ratings agencies further scrutinizing complex accounting practices, we believe these types of companies are easier to analyze and are generally free from "inquiry risk." We also focused on securities rated B or higher by Moody's or Standard & Poor's during the period, and expect to continue to do so going forward. 4 Foreign Bonds Government bond markets seem to be anticipating a global economic recovery. Long-term yields rose sharply in the last several months of our six-month period (except in Japan), reversing the price gains made in the second half of 2001. We continue to believe Australia and New Zealand show the best value based on prospective real yields. Growth in both economies looks set to remain strong during the remainder of 2002, and we expect rapid productivity growth to subdue inflation. We believe euro zone government bonds also offer good value. We believe that underlying inflation in the euro zone should fall in 2002, as spare capacity should lead to slower wage growth. Japan and the U.S. remain poorly valued markets in our opinion, although we are attracted to U.S. index-linked bonds. Outlook We believe it could take time for the global economic picture to brighten fully, but are confident that Delaware Investments Global Dividend and Income Fund, Inc. is well positioned to generate attractive income and returns going forward. We will maintain a cautious approach and avoid making heavy sector bets or reaching too strongly for high yields in search of market outperformance. It is our belief that companies with strong cash flows and an emphasis on fundamentals will be the best performers over the long term. We believe our reliance on bottom-up, individual security selection helps us uncover reasonable valuations and offers investors a portfolio with broad diversification, attractive income, and low volatility. Delaware Investments Global Dividend and Income Fund, Inc. Top 10 Country Allocations As of May 31, 2002 United States 57.90% - ------------------------------------------------------------ United Kingdom 6.65% - --------- Australia 5.98% - --------- Germany 5.22% - ------ New Zealand 4.22% - ----- South Africa 4.03% - ---- France 2.62% - ---- Mexico 2.50% - ---- Poland 2.09% - --- Greece 1.84% - -- - -------------------------------------------------------------> 0% 60% 5 Delaware Investments Global Dividend and Income Fund, Inc. Fund Basics As of May 31, 2002 - -------------------------------------------------------------------------------- Fund Objective: The Fund seeks to achieve high current income and, secondarily, capital appreciation. - -------------------------------------------------------------------------------- Total Fund Net Assets: $68.86 million - -------------------------------------------------------------------------------- Number of Holdings: 274 - -------------------------------------------------------------------------------- Fund Start Date: March 4, 1994 Fund Performance Average Annual Total Returns Through May 31, 2002 Lifetime Five Years One Year - -------------------------------------------------------------------------------- At Market Price +9.43% +6.81% +16.14% At Net Asset Value +8.43% +4.25% +5.04% Returns reflect reinvestment of all distributions. Shares of the Fund were initially offered with a sales charge of 6.0%. Performance since inception does not include the sales charge or any brokerage commissions for purchases made since inception. Past performance is not a guarantee of future results. The performance table and graphs on the following page do not reflect the deductions of taxes the shareholder would pay of Fund distributions or redemptions of Fund shares. - -------------------------------------------------------------------------------- Your Fund Managers: Peter C. Andersen received a Master's degree in finance from Harvard University and a Master's degree in physics from Yale University. Prior to joining Delaware Investments in 2000, Mr. Andersen was a portfolio manager at Conseco Capital Management, where he managed high-yield portfolios for both institutional and retail products. Mr. Andersen is a CFA charterholder. Damon J. Andres earned a bachelor's degree in Business Administration with an emphasis in finance and accounting from the University of Richmond. Prior to joining Delaware Investments in 1994, Mr. Andres performed investment consulting services with Cambridge Associates, Inc. in Arlington, Virginia. He is also co-manager of Delaware REIT Fund. Nancy M. Crouse began her career in finance at Philadelphia National Bank. Before joining Delaware in 1993, she served as Vice President at CoreStates Investment Advisers, where she performed securities analysis and managed balanced portfolios. Ms. Crouse is a CFA charterholder. Joanna Bates is a graduate of London University, and is an associate of the Institute of Investment Management and Research. She joined Delaware's Fixed Income team in 1997, before which she was Associate Director, Fixed Interest at Hill Samuel Investment Management Ltd. She has also worked for Fidelity International and Save & Prosper as a fund manager and analyst for global bond markets. Clive A. Gillmore is a graduate of the University of Warwick. Mr. Gillmore joined Delaware in 1990 after serving in the investment management field for eight years. He previously was Senior Portfolio Manager at Hill Samuel Investment Management Ltd. Christopher A. Moth is an actuarial graduate from The City University in London, and was later awarded the Certificate in Finance & Investment from the London Institute of Actuaries. Mr. Moth joined Delaware in 1992, after working for the GRE insurance company where he was responsible for quantitative models and projections. - -------------------------------------------------------------------------------- NYSE Symbol: DGF Market Price vs. Net Asset Value May 31, 2001 to May 31, 2002 Delaware Investments Global Dividend and Income Fund, Inc. Delaware Delaware Investments Investments Global Global Dividend and Dividend and Income Fund, Income Fund, Inc -- Market Price Inc -- NAV ------------------------------------------------------------ May '01 $12.90 $12.23 Jun '01 $12.83 $11.93 Jul '01 $12.95 $12.01 Aug '01 $13.15 $12.05 Sept '01 $10.85 $10.90 Oct '01 $11.87 $10.79 Nov '01 $12.40 $11.17 Dec '01 $11.85 $11.09 Jan '02 $12.30 $10.96 Feb '02 $12.30 $10.92 Mar '02 $12.60 $11.24 Apr '02 $12.85 $11.30 May '02 $13.20 $11.50 Past performance is not a guarantee of future results. 6 Statement of Net Assets Delaware Investments Global Dividend and Income Fund, Inc. May 31, 2002 (Unaudited) Number of Market Shares Value (U.S.$) Common Stock - 70.03% Automobiles & Automotive Parts - 2.99% Continental 26,000 $ 471,236 Ford Motor 38,667 682,472 General Motors 10,200 633,930 GKN 56,000 274,487 ---------- 2,062,125 ---------- Banking, Finance & Insurance - 10.20% Banco Santander Central Hispano 3,237 29,909 Bank of America 12,100 917,301 Bayerische Hypo-und Vereinsbank AG 7,800 274,726 Gladstone Capital 47,800 889,080 HBOS 32,000 385,101 ING Groep NV 21,489 568,354 IntesaBci 108,500 321,331 J.P. Morgan Chase 22,200 798,090 Lloyds TSB Group 38,600 417,934 Mellon Financial 10,600 393,260 National Australia Bank 25,119 514,429 Sanlam 303,000 272,348 Societe Generale Class A 6,650 451,978 Wells Fargo 15,100 791,240 ---------- 7,025,081 ---------- Building & Materials - 1.59% Compagnie de Saint Gobain 3,200 568,024 CSR 45,172 168,248 Wharf Holdings 153,000 360,930 ---------- 1,097,202 ---------- Chemicals - 3.56% Air Products & Chemicals 15,300 767,295 Bayer 16,433 534,268 Dow Chemical 25,500 850,170 Orica 56,800 296,760 ---------- 2,448,493 ---------- Computers & Technology - 0.84% Pitney Bowes 14,100 577,395 ---------- 577,395 ---------- Consumer Products - 2.07% Kimberly-Clark 10,000 649,200 Procter & Gamble 8,700 779,085 ---------- 1,428,285 ---------- Electronics & Electrical Equipment - 0.84% Emerson Electric 10,000 578,500 ---------- 578,500 ---------- Energy - 4.98% ChevronTexaco 8,300 724,176 Conoco Class B 21,000 564,480 Kerr-McGee 11,600 673,844 Royal Dutch Petroleum 11,700 654,750 RWE 11,000 417,236 Sasol 35,307 392,896 ---------- 3,427,382 ---------- Number of Market Shares Value (U.S.$) Common Stock (continued) Food, Beverage & Tobacco - 6.02% Anheuser-Busch 14,400 $ 743,184 Foster's Brewing Group 205,142 543,445 Goodman Fielder 742,076 684,685 Heinz (H.J.) 22,000 893,860 PepsiCo 14,200 738,116 RJ Reynolds Tobacco Holdings 1 71 Six Continents 48,528 540,338 ---------- 4,143,699 ---------- Healthcare & Pharmaceuticals - 4.39% Abbott Laboratories 12,500 593,750 Biomet 15,900 448,857 Bristol-Myers Squibb 22,500 700,200 GlaxoSmithKline 22,792 468,208 Merck & Company 10,400 593,840 Schering-Plough 8,200 216,890 ---------- 3,021,745 ---------- Industrial Machinery - 1.96% Brambles Industries 56,000 269,161 Caterpillar 11,000 574,970 Deere & Company 10,700 502,900 ---------- 1,347,031 ---------- Metals & Mining - 0.57% Rio Tinto 20,523 392,769 ---------- 392,769 ---------- Paper & Forest Products - 3.14% Amcor 111,800 572,724 Carter Holt Harvey 63,274 60,913 International Paper 16,400 706,840 Paperlinx 19,765 58,849 Weyerhaeuser 11,600 759,800 ---------- 2,159,126 ---------- Real Estate - 12.71% AMB Property 18,300 533,445 Apartment Investment & Management 11,100 517,038 Camden Property Trust 10,000 384,000 Capital Automotive 15,400 368,830 Chateau Communities 18,100 545,715 Duke Realty 26,000 703,560 FBR Asset Investment 9,600 327,840 +Host Marriott 75,000 860,999 Liberty Property Trust 21,042 725,949 Macerich 18,000 513,900 Meristar Hospitality 20,100 321,600 Pan Pacific Retail Properties 17,600 557,568 Prentiss Properties Trust 21,308 682,921 Ramco-Gershenson Properties 18,400 361,560 Reckson Associates Realty 28,100 706,715 Simon Property Group 8,000 272,560 Sun Communities 9,000 369,720 ---------- 8,753,920 ---------- 7 Statement of Net Assets (continued) Delaware Investments Global Dividend and Income Fund, Inc. Number of Market Shares Value (U.S.$) Common Stock (continued) Retail - 2.61% Boots 55,874 $ 559,593 GUS 56,051 531,431 Sears Roebuck & Company 12,000 708,600 ----------- 1,799,624 ----------- Telecommunications - 2.30% BellSouth 12,000 399,360 Cable & Wireless 50,300 154,369 Telecom Corporation of New Zealand 189,000 466,186 Verizon Communications 13,054 561,322 ----------- 1,581,237 ----------- Textiles, Apparel & Furniture - 1.11% Newell Rubbermaid 22,300 761,545 ----------- 761,545 ----------- Transportation & Shipping - 1.70% British Airways 93,000 276,908 Union Pacific 10,000 612,401 West Japan Railway 63 283,260 ----------- 1,172,569 ----------- Utilities - 6.45% BG 121,754 528,198 Electrabel 1,689 372,396 Hong Kong Electric 142,000 551,626 Iberdrola 38,396 534,485 Powergen 51,389 577,458 Scottish Power ADR 26,100 594,036 +Telefonica 32,830 347,508 Telstra 100,953 270,293 TXU 13,000 667,290 ----------- 4,443,290 ----------- Total Common Stock (cost $45,590,695) 48,221,018 ----------- Convertible Preferred Stock - 6.75% Aerospace & Defense - 0.73% Northrop Grumman 7.25% 3,850 500,423 ----------- 500,423 ----------- Banking, Finance & Insurance - 2.47% Equity Securities Trust I 6.50% 13,500 302,940 Sovereign Capital Trust II 7.50% 13,000 1,104,350 Travelers Property Casualty 4.50% 12,000 293,400 ----------- 1,700,690 ----------- Paper & Forest Products - 0.94% Georgia-Pacific PEPS Units 7.50% 22,500 648,000 ----------- 648,000 ----------- Real Estate - 1.73% General Growth Properties 7.25% 38,700 1,190,025 ----------- 1,190,025 ----------- Number of Market Shares Value (U.S.$) Convertible Preferred Stock (continued) Transportation & Shipping - 0.88% Union Pacific Capital Trust TIDES 144A 6.25% 12,000 $ 609,000 ----------- 609,000 ----------- Total Convertible Preferred Stock (cost $4,445,375) 4,648,138 ----------- Preferred Stocks - 0.92% Real Estate - 0.92% LaSalle Hotel Properties 10.25% 23,500 629,800 ----------- 629,800 ----------- Telecommunications - 0.00% Intermedia Communications PIK 13.50% 1 275 ----------- 275 ----------- Total Preferred Stocks (cost $588,063) 630,075 ----------- Principal Amount++ Convertible Bonds - 4.00% Automobiles & Automotive Parts - 1.26% MascoTech 4.50% 12/15/03 USD 900,000 868,500 ----------- 868,500 ----------- Banking, Finance & Insurance - 0.59% Verizon Global Funding 144A 5.75% 4/1/03 400,000 406,000 ----------- 406,000 ----------- Computers & Technology - 0.34% Mercury Interactive 144A 4.75% 7/1/07 275,000 234,781 ----------- 234,781 ----------- Retail - 0.84% Gap 144A 5.75% 3/15/09 500,000 576,875 ----------- 576,875 ----------- Transportation & Shipping - 0.97% Continental Airlines 4.50% 2/1/07 750,000 671,250 ----------- 671,250 ----------- Total Convertible Bonds (cost $2,665,250) 2,757,406 ----------- 8 Statement of Net Assets (continued) Delaware Investments Global Dividend and Income Fund, Inc. Principal Market Amount++ Value (U.S.$) Non-Convertible Bonds - 44.14% Aerospace & Defense - 0.11% BE Aerospace 9.50% 11/1/08 USD 45,000 $ 43,650 Sequa 9.00% 8/1/09 30,000 30,450 ---------- 74,100 ---------- Automobiles & Automotive Parts - 0.40% Advance Stores 10.25% 4/15/08 25,000 26,688 Asbury Auto Group 144A 9.00% 6/15/12 100,000 99,999 Collins & Aikman Products 144A 10.75% 12/31/11 50,000 52,563 Neff 10.25% 6/1/08 50,000 31,500 Venture Holdings Trust 12.00% 6/1/09 95,000 65,075 ---------- 275,825 ---------- Banking, Finance & Insurance - 1.60% Asat Finance 12.50% 11/1/06 91,000 76,895 Depfa Deutsche Pfandbriefbank AG 5.50% 1/15/10 EUR 500,000 471,697 Fairfax Financial Holdings 7.75% 12/15/03 USD 110,000 105,733 Finova Group 7.50% 11/15/09 230,000 82,800 Midland Funding II Series A 11.75% 7/23/05 150,000 158,771 Orion Power Holdings 12.00% 5/1/10 75,000 69,375 Sovereign Bancorp 10.50% 11/15/06 60,000 66,900 Von Hoffman Press 144A 10.25% 3/15/09 30,000 31,313 Western Financial Bank 9.625% 5/15/12 40,000 40,600 ---------- 1,104,084 ---------- Building & Materials - 0.41% Ainsworth Lumber 13.875% 7/15/07 15,000 16,913 Albecca 10.75% 8/15/08 50,000 55,813 Beazer Homes USA 8.625% 5/15/11 60,000 62,550 DR Horton 9.75% 9/15/10 45,000 48,150 10.00% 4/15/06 30,000 30,975 Encompass Services 10.50% 5/1/09 110,000 65,449 ---------- 279,850 ---------- Principal Market Amount++ Value (U.S.$) Non-Convertible Bonds (continued) Cable, Media & Publishing - 1.22% Charter Communications Holdings 10.00% 4/1/09 USD 325,000 $ 294,124 *144A 12.99% 1/15/12 155,000 77,888 Coaxial Communications of Central Ohio 10.00% 8/15/06 110,000 110,549 CSC Holdings 9.875% 2/15/13 45,000 44,888 10.50% 5/15/16 50,000 51,000 Lodgenet Entertainment 10.25% 12/15/06 125,000 126,874 Mediacom Broadband 11.00% 7/15/13 50,000 51,125 Paxson Communications 10.75% 7/15/08 45,000 48,938 WRC Media 12.75% 11/15/09 35,000 36,663 --------- 842,049 --------- Chemicals - 0.77% Avecia Group 11.00% 7/1/09 55,000 55,688 Huntsman International 10.125% 7/1/09 70,000 65,538 144A 9.875% 3/1/09 30,000 30,900 IMC Global 6.55% 1/15/05 65,000 62,803 Lyondell Chemical Series B 9.875% 5/1/07 60,000 58,950 MacDermid 9.125% 7/15/11 75,000 80,250 Solutia 6.50% 10/15/02 110,000 104,258 6.72% 10/15/37 85,000 73,816 --------- 532,203 --------- Computers & Technology - 0.24% Chippac International 12.75% 8/1/09 100,000 109,500 Seagate Technology 144A 8.00% 5/15/09 55,000 55,688 --------- 165,188 --------- Consumer Products - 0.67% American Greetings 11.75% 7/15/08 70,000 76,300 Fedders North America 9.375% 8/15/07 250,000 175,938 Salton 12.25% 4/15/08 75,000 79,875 Service International 6.30% 3/15/03 75,000 74,250 Stewart Enterprises 10.75% 7/1/08 50,000 55,750 --------- 462,113 --------- Energy - 0.63% Compton Petroleum 144A 9.90% 5/15/09 65,000 66,300 Denbury Management 9.00% 3/1/08 30,000 30,150 El Paso Energy Partners 8.50% 6/1/11 80,000 81,600 Grant Prideco 9.625% 12/1/07 50,000 52,875 Swift Energy 9.375% 5/1/12 40,000 39,900 Vintage Petroleum 7.875% 5/15/11 55,000 50,875 9.00% 12/15/05 45,000 45,675 144A 8.25% 5/1/12 65,000 64,350 --------- 431,725 --------- 9 Statement of Net Assets (continued) Delaware Investments Global Dividend and Income Fund, Inc. Principal Market Amount++ Value (U.S.$) Non-Convertible Bonds (continued) Environmental Services - 0.23% Allied Waste North America 8.875% 4/1/08 USD 125,000 $ 128,438 Synagro Technologies 144A 9.50% 4/1/09 30,000 31,050 ----------- 159,488 ----------- Food, Beverage & Tobacco - 1.08% Advantica Restaurant Group 11.25% 1/15/08 150,000 117,750 B&G Foods 144A 9.625% 8/1/07 60,000 62,175 CKE Restaurants 9.125% 5/1/09 150,000 146,999 Constellation Brands 8.125% 1/15/12 75,000 77,156 Di Giorgio Series B 10.00% 6/15/07 115,000 118,019 Fleming 144A 9.875% 5/1/12 65,000 66,300 Ingles Markets 8.875% 12/1/11 50,000 51,250 Marsh Supermarkets 8.875% 8/1/07 100,000 100,750 Perkins Family Restaurants 10.125% 12/15/07 5,000 5,031 ----------- 745,430 ----------- Foreign Government - 28.66% Belgium Government Bond 5.75% 9/28/10 EUR 1,200,000 1,160,002 Deutsche Bundesrepublik 5.00% 7/4/11 350,000 323,443 6.00% 1/5/06 1,200,000 1,171,213 6.25% 1/4/24 1,000,000 1,019,173 France Government Bond O.A.T. 5.50% 4/25/10 1,000,000 957,046 Hellenic Republic Government Bond 8.60% 3/26/08 750,000 822,642 8.70% 4/8/05 800,000 829,871 Italy Government International Bond 5.75% 7/25/16 500,000 474,016 New South Wales Treasury 6.50% 5/1/06 AUD 2,000,000 1,144,710 New Zealand Government Bond 6.00% 11/15/11 NZD 3,000,000 1,359,001 7.00% 7/15/09 2,000,000 970,893 8.00% 4/15/04 1,900,000 933,385 Poland Government Bond 8.50% 2/12/05 PLZ 5,500,000 1,359,257 12.00% 10/12/03 2,000,000 513,779 Queensland Treasury 6.00% 7/14/09 AUD 2,000,000 1,114,372 Republic of Austria 4.00% 7/15/09 EUR 450,000 390,984 Republic of South Africa Series 153 13.00% 8/31/10 ZAR 16,000,000 1,733,803 Series 177 9.50% 5/15/07 13,000,000 1,218,854 United Mexican States Global 7.375% 7/6/06 EUR 1,000,000 976,022 8.25% 2/24/09 2,500,000 1,266,081 ----------- 19,738,547 ----------- Principal Market Amount++ Value (U.S.$) Non-Convertible Bonds (continued) Healthcare & Pharmaceuticals - 0.91% Concentra Operating 13.00% 8/15/09 USD 55,000 $ 62,425 Extendicare Health Services 9.35% 12/15/07 100,000 96,500 Hanger Orthopedic Group 144A 10.375% 2/15/09 60,000 63,975 Healthsouth 10.75% 10/1/08 100,000 111,375 Kinetic Concepts Series B 9.625% 11/1/07 100,000 102,625 Radiologix 10.50% 12/15/08 75,000 78,750 Rotech Healthcare 9.50% 4/1/12 30,000 31,350 Triad Hospitals 8.75% 5/1/09 75,000 79,969 --------- 626,969 --------- Industrial Machinery - 0.06% Building Materials 7.75% 7/15/05 50,000 44,188 --------- 44,188 --------- Leisure, Lodging & Entertainment - 1.08% Alliance Gaming Series B 10.00% 8/1/07 100,000 105,499 Bally Total Fitness Holdings Series D 9.875% 10/15/07 20,000 20,450 Circus & Eldorado Joint Venture 144A 10.125% 3/1/12 80,000 83,600 Extended Stay America 9.875% 6/15/11 105,000 110,512 John Q Hammons Hotels 144A 8.875% 5/15/12 70,000 71,400 Mohegan Tribal Gaming Authority 144A 8.375% 7/1/11 55,000 56,650 Penn National Gaming 11.125% 3/1/08 50,000 54,250 Regal Cinemas 144A 9.375% 2/1/12 65,000 68,413 Six Flags 9.50% 2/1/09 90,000 93,600 Wheeling Island Gaming 144A 10.125% 12/15/09 75,000 78,938 --------- 743,312 --------- Metals & Mining - 0.48% Earle M Jorgensen 144A 9.75% 6/1/12 85,000 86,063 +++Weirton Steel 11.375% 7/1/04 950,000 242,250 --------- 328,313 --------- Miscellaneous - 0.07% aaiPharma 144A 11.00% 4/1/10 50,000 48,313 --------- 48,313 --------- Packaging & Containers - 0.52% AEP Industries 9.875% 11/15/07 75,000 74,999 BPC Holding 12.50% 6/15/06 50,000 53,000 Graphic Packaging 8.625% 2/15/12 50,000 52,500 Plastipak Holdings 10.75% 9/1/11 50,000 55,000 Portola Packaging 10.75% 10/1/05 25,000 25,063 Silgan 9.00% 6/1/09 to 6/1/09 90,000 94,276 --------- 354,838 --------- 10 Statement of Net Assets (continued) Delaware Investments Global Dividend and Income Fund, Inc. Principal Market Amount++ Value (U.S.$) Non-Convertible Bonds (continued) Paper & Forest Products - 0.28% Georgia Pacific 9.50% 12/1/11 USD 85,000 $ 88,373 Tembec Industries 8.50% 2/1/11 100,000 102,250 ---------- 190,623 ---------- Real Estate - 0.50% HMH Properties Series B 7.875% 8/1/08 30,000 29,250 MeriStar Hospitality Operating Partnership 144A 10.50% 6/15/09 50,000 53,125 Nationwide Health Properties 7.06% 12/5/06 100,000 98,226 RFS Partnership 144A 9.75% 3/1/12 50,000 52,500 Senior Housing Properties Trust 8.625% 1/15/12 45,000 47,025 Tanger Properties L.P. 9.125% 2/15/08 30,000 30,733 Ventas Realty 144A 9.00% 5/1/12 30,000 31,425 ---------- 342,284 ---------- Retail - 0.88% Avado Brands 9.75% 6/1/06 70,000 36,750 11.75% 6/15/09 100,000 14,000 Cole National Group 144A 8.875% 5/15/12 15,000 15,338 Gap 8.80% 12/15/08 65,000 66,001 J Crew Operating 10.375% 10/15/07 120,000 105,150 Levi Strauss & Company 11.625% 1/15/08 80,000 83,600 Office Depot 10.00% 7/15/08 125,000 138,124 Petco Animal Supplies 144A 10.75% 11/1/11 90,000 99,000 Remington Arms 9.50% 12/1/03 50,000 49,125 ---------- 607,088 ---------- Telecommunications - 2.05% Alcatel 4.375% 2/17/09 EUR 500,000 375,589 American Tower 9.375% 2/1/09 USD 55,000 38,225 Avaya 11.125% 4/1/09 75,000 74,625 Crown Castle International 10.75% 8/1/11 75,000 64,875 Dobson Communications 10.875% 7/1/10 25,000 22,250 EchoStar Broadband 10.375% 10/1/07 150,000 157,875 +++Global Crossing 8.70% 8/1/07 850,000 17,000 9.125% 11/15/06 50,000 1,000 Horizon PCS 144A 13.75% 6/15/11 40,000 23,800 Insight Midwest 9.75% 10/1/09 40,000 40,000 10.50% 11/1/10 75,000 76,688 Level 3 Communications 11.00% 3/15/08 100,000 49,000 Metromedia Fiber Network 10.00% 12/15/09 100,000 2,750 Principal Market Amount++ Value (U.S.$) Non-Convertible Bonds (continued) Telecommunications (continued) Nextel Communications 9.375% 11/15/09 USD 275,000 $ 179,437 PanAmSat 144A 8.50% 2/1/12 55,000 55,413 Qwest 144A 8.875% 3/15/12 55,000 54,831 Qwest Capital Funding 7.25% 2/15/11 75,000 57,286 *SBA Communications 18.44% 3/1/08 100,000 64,500 WorldCom 7.50% 5/15/11 70,000 34,650 8.25% 5/15/31 50,000 21,750 ---------- 1,411,544 ---------- Textiles, Apparel & Furniture - 0.08% Collins & Aikman Floor Cover 9.75% 2/15/10 50,000 52,563 ---------- 52,563 ---------- Transportation & Shipping - 0.29% Atlas Air 10.75% 8/1/05 25,000 16,875 Hornbeck-Leevac Marine Services 10.625% 8/1/08 90,000 94,838 Petroleum Helicopters 9.375% 5/1/09 35,000 36,575 Teekay Shipping 8.875% 7/15/11 50,000 52,500 ---------- 200,788 ---------- Utilities - 0.92% Avista 9.75% 6/1/08 25,000 27,239 Calpine 10.50% 5/15/06 85,000 76,571 Calpine Canada Energy Finance 8.50% 5/1/08 140,000 114,949 CMS Energy 8.90% 7/15/08 100,000 97,134 Mission Energy 13.50% 7/15/08 65,000 67,925 Ocean Rig Norway 10.25% 6/1/08 45,000 40,725 PG&E National Energy Group 10.375% 5/16/11 80,000 82,544 Western Resources 144A 7.875% 5/1/07 25,000 25,376 9.75% 5/1/07 100,000 98,488 ---------- 630,951 ---------- Total Non-Convertible Bonds (cost $32,940,286) 30,392,376 ---------- Short-Term Securities - 4.45% **U.S. Treasury Bill 1.647% 6/6/02 3,065,000 3,064,294 ---------- Total Short-Term Securities (cost $3,064,294) 3,064,294 ---------- 11 Statement of Net Assets (continued) Delaware Investments Global Dividend and Income Fund, Inc. Total Market Value of Securities - 130.29% (cost $89,293,963) $89,713,307 ----------- ***Liabilities Net of Receivables and Other Assets - (30.29%) (20,855,663) ----------- Net Assets Applicable to 5,985,582 Shares ($0.01 par value) Outstanding; Equivalent to $11.50 per Share - 100.00% $68,857,644 ----------- Components of Net Assets at May 31, 2002: Common stock, $0.01 par value, 500,000,000 shares authorized to the Fund $82,781,531 Treasury stock, 665,065 shares, at cost (8,599,291) Distributions in excess of net investment income(a) (3,943,563) Accumulated net realized loss on investments and foreign currencies (1,761,222) Net unrealized appreciation of investments and foreign currencies 380,189 ----------- Total net assets $68,857,644 =========== +Non-income producing security for the period ended May 31, 2002. ++Principal amount is stated in the currency in which each bond is denominated. +++Non-income producing security. Security is currently in default. *Zero coupon bond. The interest rate shown is the step-up rate. **U.S. 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, $21,000,000 represents borrowings under the Fund's Line of Credit as of May 31, 2002. See Note 6 in "Notes to Financial Statements". (a)Undistributed net investment income includes net realized gains (losses) on foreign currencies. Net realized gains (losses) on foreign currencies are treated as net investment income in accordance with provisions of the Internal Revenue Code. Summary of Abbreviations ADR - American Depositary Receipts PEPS - Partial Equity Linked Securities PIK - Pay-in-kind TIDES - Term Income Deferred Equity Securities AUD - Australian Dollar EUR - European Monetary Unit NZD - New Zealand Dollar PLZ - Polish Zloty USD - U.S. Dollar ZAR - South African Rand See accompanying notes 12 Statement of Operations Delaware Investments Global Dividend and Income Fund, Inc. Period Ended May 31, 2002 (Unaudited) Investment Income Interest $1,315,994 Dividends (net of foreign taxes withheld of $27,800) 1,080,614 $ 2,396,608 ---------- ----------- Expenses: Management fees 311,558 Accounting and administration expenses 50,000 Professional fees 40,600 Reports and statements to shareholders 17,000 Transfer agent fees 15,000 Custodian fees 13,390 NYSE fees 12,480 Directors' fees 3,846 Taxes (other than taxes on income) 1,140 Other 30,042 ---------- Total operating expenses (before interest expense) 495,056 Interest expense 285,127 ----------- Total operating expenses (after interest expense) 780,183 Less expenses paid indirectly (888) Total expenses 779,295 ----------- Net Investment Income 1,617,313 ----------- Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currencies: Net realized loss on: Investments (588,515) Foreign currencies (1,181,923) ----------- Net realized loss (1,770,438) Net change in unrealized appreciation/depreciation on investments and foreign currencies 6,630,633 ----------- Net Realized and Unrealized Gain on Investments and Foreign Currencies 4,860,195 ----------- Net Increase in Net Assets Resulting from Operations $ 6,477,508 =========== See accompanying notes 13 Statements of Changes in Net Assets
Delaware Investments Global Dividend and Income Fund, Inc. Period Year Ended Ended 5/31/02 11/30/01 (Unaudited) Increase (Decrease) in Net Assets from Operations: Net investment income $ 1,617,313 $ 3,710,472 Net realized loss on investments and foreign currencies (1,770,438) (3,623,997) Net change in unrealized appreciation/depreciation of investments and foreign currencies 6,630,633 5,341,691 ----------- ----------- Net increase in net assets resulting from operations 6,477,508 5,428,166 ----------- ----------- Dividends and Distributions to Shareholders from: Net investment income (4,489,581) (1,179,716) Net realized gain on investments -- (502,789) Return of capital -- (7,296,404) ----------- ----------- (4,489,581) (8,978,909) ----------- ----------- Net Increase (Decrease) in Net Assets 1,987,927 (3,550,743) Net Assets: Beginning of period 66,869,717 70,420,460 ----------- ----------- End of period $68,857,644 $66,869,717 =========== =========== See accompanying notes 14
Statement of Cash Flows
Delaware Investments Global Dividend and Income Fund, Inc. Period Ended May 31, 2002 (Unaudited) Net Cash (Including Foreign Currency) Provided by Operating Activities: Net increase in net assets resulting from operations $ 6,477,508 ------------ Adjustments to reconcile net increase in net assets from operations to cash provided by operating activities: Amortization of discount on securities (110,316) Net proceeds from investment transactions 5,826,153 Net realized loss on investments 588,515 Net realized loss on foreign currencies 1,181,923 Net change in unrealized appreciation/depreciation of investments and foreign currencies (6,630,633) Decrease in receivable for investments sold 909,919 Decrease in interest and dividends receivable 251,373 Increase in payable for investments purchased 365,986 Decrease in interest payable (27,552) Increase in accrued expenses and other liabilities 12,226 ------------ Total adjustments 2,367,594 ------------ Net cash provided by operating activities 8,845,102 ------------ Cash flows used for financing activities: Proceeds from line of credit (Note 6) 21,000,000 Principal repayment on line of credit (Note 6) (25,000,000) Cash dividends and distributions paid (4,489,581) ------------ Net cash used for financing activities (8,489,581) ------------ Effect of exchange rates on cash (48,915) ------------ Net increase in cash 306,606 Cash at beginning of period (260,164) ------------ Cash at end of period $ 46,442 ============ Cash paid for interest $ 311,415 ============ See accompanying notes 15
Financial Highlights Selected data for each share of the Fund outstanding throughout each period were as follows:
Delaware Investments Global Dividend and Income Fund, Inc. Period Ended Year Ended 5/31/02(3) 11/30/01 11/30/00 11/30/99 11/30/98 11/30/97 (Unaudited) Net asset value, beginning of period $11.170 $11.770 $13.920 $15.700 $ 17.090 $15.810 Income (loss) from investment operations: Net investment income 0.270 0.620 0.700 0.930 1.090 1.000 Net realized and unrealized gain (loss) on investments and foreign currencies 0.810 0.280 (1.350) (1.070) (0.700) 1.780 ------- ------- ------- ------- -------- -------- Total from investment operations 1.080 0.900 (0.650) (0.140) 0.390 2.780 ------- ------- ------- ------- -------- -------- Less dividends and distributions from: Net investment income (0.750) (0.195) (0.530) (0.860) (1.380) (0.950) Net realized gains on investment transactions -- (0.084) (0.470) (0.780) (0.400) (0.550) Return of capital -- (1.221) (0.500) -- -- -- ------- ------- ------- ------- -------- -------- Total dividends and distributions (0.750) (1.500) (1.500) (1.640) (1.780) (1.500) ------- ------- ------- ------- -------- -------- Net asset value, end of period $11.500 $11.170 $11.770 $13.920 $ 15.700 $ 17.090 ======= ======= ======= ======= ======== ======== Market value, end of period $13.200 $12.400 $10.380 $11.750 $ 15.880 $ 17.310 ======= ======= ======= ======= ======== ======== Total return based on:(1) Market value 12.92% 34.52% 0.29% (17.00%) 2.05% 18.98% Net asset value 9.21% 6.91% (4.04%) (0.57%) 2.19% 17.93% Ratios and supplemental data: Net assets, end of period (000 omitted) $68,858 $66,870 $70,420 $92,601 $104,446 $113,685 Ratio of total operating expenses to average net assets 2.34% 3.31% 3.45% 2.69% 2.69% 2.67% Ratio of total operating expenses to adjusted average net assets (before interest expense)(2) 1.11% 1.10% 1.04% 1.00% 1.03% 1.02% Ratio of interest expense to adjusted average net assets(2) 0.64% 1.35% 1.62% 1.15% 1.16% 1.16% Ratio of net investment income to average net assets 4.86% 5.18% 5.34% 6.14% 6.63% 6.03% Ratio of net investment income to adjusted average net assets(2) 3.65% 3.84% 4.11% 4.92% 5.38% 4.93% Portfolio turnover 72% 47% 43% 58% 51% 68% Leverage analysis: Debt outstanding at end of period (000 omitted) $21,000 $25,000 $25,000 $25,000 $25,000 $25,000 Average daily balance of debt outstanding (000 omitted) $22,209 $25,000 $25,000 $25,000 $25,000 $25,000 Average daily balance of shares outstanding (000 omitted) 5,986 5,986 6,389 6,651 6,651 6,651 Average debt per share $3.71 $4.18 $3.91 $3.76 $3.76 $3.76
(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. (3) Ratios have been annualized and total return has not been annualized. As required, effective December 1, 2001, the Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies that requires amortization of all premium and discounts on debt securities as an adjustment to interest income. The effect of these changes for the six months ended May 31, 2002 was a decrease in net investment income per share of $0.005, an increase in net realized and unrealized gain (loss) per share of $0.005, a decrease in the ratio of net investment income to average net assets of 0.09%, and a decrease in the ratio of net investment income to adjusted average net assets of 0.06%. Per share data for periods prior to December 1, 2001 have not been restated to reflect this change in accounting. See accompanying notes 16 Notes to Financial Statements Delaware Investments Global Dividend and Income Fund, Inc. Period Ended May 31, 2002 (Unaudited) Delaware Investments Global Dividend and Income Fund, Inc. (the "Fund") is organized as a Maryland corporation and is a diversified closed-end management investment company under the Investment Company Act of 1940, as amended. The Fund's shares trade on the New York Stock Exchange. The investment objective of the Fund 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 time 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. Short-term debt securities 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 by or under the direction of the Fund's Board of Directors. Federal Income Taxes - The Fund intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements. 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. Borrowings - The Fund has entered into a $21,000,000 Line of Credit Agreement with J.P. Morgan Chase Bank (See Note 6). Foreign Currency Transactions - Transactions denominated in foreign currencies are recorded at the prevailing exchange rates on the valuation date. 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 foreign exchange rates 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 - Expenses common to all funds within the Delaware Investments Family of Funds are allocated amongst the funds on the basis of average net assets. 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. Original issue discounts are amortized to interest income over the lives of the respective securities. 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. 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. Change in Accounting Principle - As required, effective December 1, 2001, the Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies (the "Guide") and began amortizing all discount or premium on debt securities. Prior to December 1, 2001, the Fund did not amortize premium or market discount, which conformed to the Fund's policy for federal income tax purposes. The cumulative effect of this accounting change had no impact on total net assets of the Fund, but resulted in a $75,551 increase in cost of securities and a corresponding $75,551 reduction in net unrealized appreciation (depreciation) based on securities held by the Fund on December 1, 2001. The effect of these changes for the period ended May 31, 2002, was a decrease in net investment income of $28,720, a decrease in net unrealized appreciation (depreciation) of $5,294, and an increase in net realized gains (losses) of $34,014. The Statements of Changes in Net Assets and Financial Highlights for prior periods have not been restated to reflect this change in accounting. 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 approximately $798 for the period ended May 31, 2002. In addition, the Fund receives earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. The earnings credits for the period ended May 31, 2002 were approximately $90. 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". 17 Notes to Financial Statements (continued) Delaware Investments Global Dividend and Income Fund, Inc. 2. Investment Management, Administration Agreements and Other Transactions with Affiliates In accordance with the terms of its investment management agreement, the Fund pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee of 0.70% which is calculated daily based on the adjusted average weekly net assets. DMC 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 a monthly fee equal to 40% of the fee paid to DMC under the terms of the Investment Management Agreement. The Fund does not pay any fees directly to DIAL. The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC and DIAL, 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 weekly net assets, subject to an annual minimum of $100,000. For purposes of the calculation of investment management fees and administration fees, adjusted average weekly net assets does not include the line of credit liability. At May 31, 2002, the Fund had liabilities payable to affiliates as follows: Investment management fee payable to DMC $52,239 Accounting and other expenses payable to DSC 11,569 Other expenses payable to DMC and affiliates 3,286 Certain officers of DMC, DIAL and DSC are officers and/or directors the Fund. These officers and directors are paid no compensation by the Fund. 3. Investments For the period ended May 31, 2002, the Fund made purchases of $30,270,195 and sales of $35,787,866 of investment securities other than U.S. government securities and short-term investments. At May 31, 2002, the cost of investments for federal income tax purposes approximates the cost for book purposes. At May 31, 2002, the cost of investments was $89,178,041. At May 31, 2002, the net unrealized appreciation was $535,262 of which $8,863,630 related to unrealized appreciation of investments and $8,328,368 related to unrealized depreciation of investments. 4. Dividend and Distribution Information Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. The tax character of dividends and distributions paid during the period ended May 31, 2002 and the year ended November 30, 2001 was as follows: May 31, 2002 November 30, 2001 Ordinary Income $4,489,581 $1,179,716 Long-term capital gain -- 502,789 Return of capital -- 7,296,404 ---------- ---------- Total $4,489,581 $8,978,909 ========== ========== For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Such capital loss carryforwards expire as follows: $1,093,240 in 2009. 5. Capital Stock The Fund did not repurchase any shares under the Share Repurchase Program during the period ended May 31, 2002. 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. For the period ended May 31, 2002, the Fund did not have any transactions in common shares. 6. Line of Credit The Fund has entered into a Line of Credit Agreement with J.P. Morgan Chase Bank for $21,000,000. At May 31, 2002, the par value of loans outstanding was $21,000,000 at a variable interest rate of 2.47%. During the period, the average daily balance of loans outstanding was $22,208,791 at a weighted average interest rate of approximately 2.50%. The maximum amount of loans outstanding at any time during the period was $25,000,000. The loan is collateralized by the Fund's portfolio. 7. Foreign Exchange Contracts The Fund may enter into forward foreign currency exchange as a way of managing foreign exchange rate risk. The 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 that are denominated in foreign currencies. Forward foreign 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 as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded 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 exchange contracts does not eliminate fluctuations in the underlying prices of the securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign currency exchange 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. No forward foreign currency exchange contracts were outstanding at May 31, 2002. 18 Notes to Financial Statements (continued) Delaware Investments Global Dividend and Income Fund, Inc. 8. Geographic Disclosure As of May 31, 2002, the Fund's geographic diversification* was as follows: Country Market Value ---------------------------------------------------------------------------- United States $51,946,241 57.90% ---------------------------------------------------------------------------- United Kingdom 5,969,991 6.65% ---------------------------------------------------------------------------- Australia 5,368,515 5.98% ---------------------------------------------------------------------------- Germany 4,682,992 5.22% ---------------------------------------------------------------------------- New Zealand 3,790,378 4.22% ---------------------------------------------------------------------------- South Africa 3,617,901 4.03% ---------------------------------------------------------------------------- France 2,352,637 2.62% ---------------------------------------------------------------------------- Mexico 2,242,103 2.50% ---------------------------------------------------------------------------- Poland 1,873,036 2.09% ---------------------------------------------------------------------------- Greece 1,652,513 1.84% ---------------------------------------------------------------------------- Belgium 1,532,398 1.71% ---------------------------------------------------------------------------- Netherlands 1,223,104 1.36% ---------------------------------------------------------------------------- Hong Kong 912,556 1.02% ---------------------------------------------------------------------------- Spain 911,902 1.02% ---------------------------------------------------------------------------- Italy 795,347 0.89% ---------------------------------------------------------------------------- Austria 390,984 0.44% ---------------------------------------------------------------------------- Japan 283,260 0.32% ---------------------------------------------------------------------------- Canada 114,949 0.13% ---------------------------------------------------------------------------- Bahamas 52,500 0.06% ---------------------------------------------------------------------------- Total $89,713,307 100.00% ---------------------------------------------------------------------------- * Based on the issuer of each security's domicile. 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. 9. Credit and Market Risks Some countries in which the Fund may invest 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 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 portion 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 may invest 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 are generally 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 these securities may impair the Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. The fund invests in the real estate industry and is subject to some of the risks associated with that industry. If the Fund holds real estate directly as a result of defaults or receives rental income directly form real estate holdings, its tax status as a regulated investment company may be jeopardized. There were no direct holdings during the period ended May 31, 2002. The Fund is also affected by interest rate changes, particularly if the real estate investment trusts it holds use floating rate debt to finance their ongoing operations. 19 This page intentionally left blank. Delaware Investments Family of Funds - -------------------------------------------------------------------------------- Complete information on any fund offered by Delaware Investments can be found in each fund's current prospectus. Prospectuses for all funds offered by Delaware Investments are available from your financial advisor. Please read the prospectus carefully before you invest or send money. - -------------------------------------------------------------------------------- Growth-Equity Group Delaware American Services Fund Delaware Growth Opportunities Fund Delaware Select Growth Fund Delaware Small Cap Growth Fund Delaware Technology and Innovation Fund Delaware Trend Fund Delaware U.S. Growth Fund Value-Equity Group Delaware Decatur Equity Income Fund Delaware Growth and Income Fund Delaware REIT Fund Delaware Small Cap Value Fund International Group (DIAL-Delaware International Advisers Ltd.) Delaware Emerging Markets Fund Delaware International Small Cap Value Fund Delaware International Value Equity Fund (formerly Delaware International Equity Fund) Blend Mutual Funds Delaware Balanced Fund Delaware Core Equity Fund (formerly Delaware Growth Stock Fund) Delaware Devon Fund Delaware Social Awareness Fund Structured Equity Products Group Delaware Diversified Growth Fund Delaware Diversified Value Fund Delaware Group Foundation Funds Delaware Balanced Allocation Portfolio Delaware Growth Allocation Portfolio Delaware Income Allocation Portfolio Fixed Income Group Corporate and Government Delaware American Government Bond Fund Delaware Corporate Bond Fund Delaware Delchester Fund Delaware Extended Duration Bond Fund Delaware High-Yield Opportunities Fund Delaware Limited-Term Government Fund Delaware Strategic Income Fund Money Market Delaware Cash Reserve Fund Delaware Tax-Free Money Fund Municipal (National Tax-Exempt) Delaware National High-Yield Municipal Bond Fund Delaware Tax-Free Insured Fund Delaware Tax-Free USA Fund Delaware Tax-Free USA Intermediate Fund Municipal (State-Specific Tax-Exempt) Delaware Tax-Free Arizona Fund Delaware Tax-Free Arizona Insured Fund Delaware Tax-Free California Fund Delaware Tax-Free California Insured Fund Delaware Tax-Free Colorado Fund Delaware Tax-Free Florida Fund Delaware Tax-Free Florida Insured Fund Delaware Tax-Free Idaho Fund Delaware Minnesota High-Yield Municipal Bond Fund Delaware Tax-Free Minnesota Fund Delaware Tax-Free Minnesota Insured Fund Delaware Tax-Free Minnesota Intermediate Fund Delaware Tax-Free Missouri Insured Fund Delaware Tax-Free New York Fund Delaware Tax-Free Oregon Insured Fund Delaware Tax-Free Pennsylvania Fund DGF Delaware NYSE Investments(SM) Listed - --------------------------------------- A member of Lincoln Financial Group(R) This semiannual report is for the information of Delaware Investments Global Dividend and Income Fund, Inc. shareholders. 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 Affiliated Officers Contact Information Charles E. Haldeman, Jr. William E. Dodge Investment Manager Chairman Executive Vice President and Delaware Management Company Delaware Investments Family of Funds Chief Investment Officer, Equity Philadelphia, PA Philadelphia, PA Delaware Investments Family of Funds Philadelphia, PA International Affiliate Walter P. Babich Delaware International Advisers Ltd. Board Chairman Jude T. Driscoll London, England Citadel Constructors, Inc. Executive Vice President and King of Prussia, PA Head of Fixed Income Principal Office of the Fund Delaware Investments Family of Funds 2005 Market Street David K. Downes Philadelphia, PA Philadelphia, PA 19103 President and Chief Executive Officer Delaware Investments Family of Funds Richard J. Flannery Independent Auditors Philadelphia, PA President and Chief Executive Officer Ernst & Young, LLP Delaware Distributors, L.P. 2001 Market Street John H. Durham Philadelphia, PA Philadelphia, PA 19103 Private Investor Gwynedd Valley, PA Joseph H. Hastings Registrar and Stock Transfer Agent Senior Vice President/Corporate Controller Mellon Investor Services, LLC John A. Fry Overpeck Centre Executive Vice President Michael P. Bishof 85 Challenger Road University of Pennsylvania Senior Vice President/Treasurer Ridgefield, NJ 07660 Philadelphia, PA 800 851-9677 Lisa O. Brinkley Anthony D. Knerr Senior Vice President/Compliance Director For Securities Dealers and Financial Consultant Institutions Representatives Only Anthony Knerr & Associates Richelle S. Maestro 800 362-7500 New York, NY Senior Vice President/Deputy General Counsel/Secretary Web site www.delawareinvestments.com Ann R. Leven+ John J. O'Connor Former Treasurer/Chief Fiscal Officer Senior Vice President/Assistant Treasurer National Gallery of Art Washington, DC Thomas F. Madison+ President and Chief Executive Officer MLM Partners, Inc. Minneapolis, MN Janet L. Yeomans Vice President and Treasurer 3M Corporation St. Paul, MN +Audit Committee Member (6216) Printed in the USA SA-DGF [5/02] VGR 7/02 J8353
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