-----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, I0cjL+9Ojw52dZkMtnxg/jyXxdVj4tYLvMxBxYDLWSTqrChEHWa4e7ER08OJckip O5MO0C1PVHysRhXI1A1SLA== 0000950116-96-000063.txt : 19960207 0000950116-96-000063.hdr.sgml : 19960207 ACCESSION NUMBER: 0000950116-96-000063 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951130 FILED AS OF DATE: 19960206 SROS: NYSE 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: 1940 Act SEC FILE NUMBER: 811-08246 FILM NUMBER: 96511783 BUSINESS ADDRESS: STREET 1: 2005 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2157512926 MAIL ADDRESS: STREET 1: 2005 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 N-30D 1 The Fund's - -------------------- Investment - -------------------- Objectives and - -------------------- Strategies - -------------------- Delaware Group Global Dividend and Income Fund's primary objective is to provide a high level of current income with a secondary goal of capital appreciation. To achieve this, the Fund diversifies assets among several asset classes -- U.S. stocks and high-yield bonds as well as foreign stocks and bonds. The concentration in each asset class depends on the manager's assessment of the relative risks and rewards of a particular market. U.S. AND FOREIGN COMMON STOCKS WITH HIGHER-THAN-AVERAGE YIELDS Yield is the relationship between a stock's dividend and its price. High-yield stocks pay high income relative to their share price, which helps the Fund meet its primary investment objective. A high yield can also point the Fund to strong companies selling for less than they may be worth. Generally, when a stock's yield is high, its price has fallen. A strong company's stock may have a high yield relative to the average stock yield in its market because of a temporary negative outlook for an industry or the company. If the outlook for the company or its industry changes or if the yield attracts income investors -- particularly during periods of low interest rates -- capital appreciation may result. Finally, a high yield can help cushion a portfolio's total return during periods of price declines. 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 the company's projected dividend stream is "discounted" for these risks so that management has a consistent yardstick to compare stocks around the globe. CONVERTIBLE STOCKS AND BONDS The Fund invests in both convertible preferred stock and convertible bonds. Both pay fixed rates of income, but because they can be converted into a certain number of shares of common (or sometimes preferred) 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 security rises. We often buy convertibles when the underlying common stock offers strong growth potential, but only a relatively low yield. U.S. HIGH-YIELD CORPORATE BONDS High-yield bonds are non-investment grade bonds issued by companies across the broad spectrum of corporate America. Because these bonds have greater credit risk than higher rated bonds, they tend to pay income at higher rates, making them attractive to income-oriented investors. FOREIGN BONDS Your Fund invests in foreign government and corporate bonds whose income potential relative to currency, political and economic risk, 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 bonds. The Fund invests in bonds issued by countries with established securities markets such as those of Europe and developed Pacific Basin markets such as Australia. The Fund also owns bonds in emerging markets where management believes the income and capital appreciation potential justifies the risks. December 29, 1995 Dear - -------------------- Shareholder: - -------------------- For selected stock and bond markets around the world, the 12 months ended November 30, 1995, was a period of exceptional performance. In the U.S., subdued inflation, higher-than-expected corporate earnings and sharply reduced interest rates paved the way for the strongest year for stocks and bonds in nearly two decades. Favorable interest rate and inflation environments prevailed in most of the developed world during the past year, and bond markets in Western Europe, Canada and Australia generally provided strong double digit returns. However, few of the world's major stock markets kept pace with soaring U.S. equity prices. - ------------------------------------------------------------------------------- TOTAL RETURN DECEMBER 1, 1994 - NOVEMBER 30, 1995 Performance Performance Based on Based On Net Asset Value Market Price --------------- ------------ Global Dividend and Income Fund +19.08% +29.74% (NYSE Symbol: DGF) Standard & Poor's 500 Index +36.91% Morgan Stanley Europe Australia and South East Asia (EASEA) Index +13.80% Lipper Closed-End Income Fund Average +27.16% The Fund's total return assumes reinvestment of monthly dividends. The Morgan Stanley Index shown above is an index of foreign stocks that does not include Japanese stocks. Total return is measured in U.S. dollars. There are 11 closed-end funds in the Lipper Closed-End Income Fund Average, most of which are domestic-oriented funds. - ------------------------------------------------------------------------------- Though designed to provide high current income, your Fund benefited from the 1995 appreciation of stocks and bonds around the world. As you can see from the chart above, the Fund's net asset value return over the fiscal year was +19.08% (with dividends reinvested). The Fund achieved more than half of the total return of the unmanaged Standard & Poor's 500 Index even though only one-third of the Fund's portfolio was common stocks. Your Fund significantly outperformed the unmanaged Morgan Stanley EASEA Index because of its more than 50% positioning in U.S. common stocks, high-yield bonds and convertible securities. The Fund also benefited from having only modest portfolio exposure to volatile emerging markets and no exposure to Japan, whose stock and bond markets performed poorly during much of 1995. As you can see below, the Fund's market performance was even greater than the Fund's growth in net asset value. The Fund's shares began the fiscal year at a 10.2% discount to net asset value and ended at a modest discount of 2.2%, attributable, in part we believe, to the managed distribution policy which the Fund's Board of Directors adopted on July 20, 1995. Please see page 5 for a full description of this new program. In connection with the managed distribution policy, the Fund's monthly dividend rate was increased from $0.1042 to $0.125 per share, effective with the December 1995 dividend payment. This new monthly dividend rate represents a total increase of 42% and was the third dividend increase announced in the past fiscal year. On the pages that follow, we provide an in-depth review of worldwide market conditions and the Fund's portfolio positioning. Overall, we believe that while U.S. economy may slow further in the coming months, global opportunities abound. It is our opinion that many markets may favor the "value"-oriented, dividend-paying companies the Fund emphasizes and that interest rates in places such as Europe may continue to fall, allowing bond prices to move higher. Thank you for your confidence in the Delaware Group and our best wishes for the coming year. Sincerely, /s/ Wayne A. Stork - ------------------ Wayne A. Stork Chairman Portfolio - -------------------- Managers' - -------------------- Review - -------------------- OUR LARGEST STOCK FOCUS: BANKS, UTILITIES AND REITS It was a great year for the U.S. stock market, with the Standard & Poor's 500 Index rising 36.91% to a new record high by the end of November. The American market's performance was generally better than most other major world markets in 1995. In the U.S., the Fund bought common stocks in the financial services sector because early in the fiscal year we saw value in terms of price, yield, underlying fundamental strengths and possible merger activity. In fact, three banking stocks we held as of November 30 were involved in mergers in the northeast U.S. -- CoreStates Financial Corp., Fleet Financial Group. and UJB Financial Corp. CoreStates was our largest bank stock holding. Two high-yielding sectors where we had large holdings of both foreign and domestic common stocks were electric utilities and telephone companies. Investors often turn to utilities for income, and these stocks benefited over the course of the year as falling interest rates reduced the yields available from most areas of the bond market. We had holdings of utilities in Europe and the southwest U.S. The Fund's single largest stock holding in utilities was Texas Utilities. - --------------------------------------------- Asset Allocation PERCENT OF NET ASSETS AS OF NOVEMBER 30, 1995 Non-Convertible Bonds 45.08% Cash and Other Assets 3.38% Convertible Preferred Stocks 8.72% Common Stocks 33.59% Convertible Bonds 9.23% - --------------------------------------------- An area of the stock market that did not perform as well as the majority of stocks was Real Estate Investment Trusts (REITs), the largest component of the Fund's common stock portfolio. We invest in REITs primarily for income, and for that purpose they served the Fund well. REITs can own mortgages, income-producing real estate, or both. As of November 30, 1995, the Fund focused exclusively on those REITs that owned income-producing property, a strategy we believe helps reduce the Fund's exposure to interest rate risks. REITs are also affected by the risks of owning commercial real estate -- such as changes in office and apartment rental demand, the creditworthiness of tenants and property taxes. In 1995, REITs did not keep pace with the more growth-oriented areas of the stock market. However, we believe these stocks can perform better in the coming months as low interest rates bolster housing and commercial construction demand. A STRONG YEAR FOR HIGH-YIELD BONDS High-yield corporate bonds were one of the best performing sectors in the bond market during the 12 months ended November 30. They benefited from increased demand for high income amid the past year's interest rate declines. Economic growth, though it was slower, remained steady, and earnings at many of the companies that issue high-yield bonds remained strong, bolstering bond prices. Your Fund balanced opportunities for high current income with a relatively conservative approach to potential credit risk. During the year, the high-yield portion of the portfolio consisted primarily of bonds rated BB and B, the highest non-investment grade ratings. We reduced average maturity and average duration, or price sensitivity to changes in interest rates. After the past year's extremely strong bond market, we believed the appreciation potential to be gained from extending maturities was limited. High-yield bond sectors that provided good returns for the Fund in 1995 included cable, media, publishing, leisure and lodging businesses as well as chemical, paper and forest products companies, which we acquired at depressed prices in 1994. CONVERTIBLES PROVIDED INCOME AND GROWTH In 1995, convertible securities provided regular dividend income and generally allowed us to participate in the capital appreciation of "growth"-oriented stocks. Declining interest rates and rising common stock prices helped provide a +23.52% total return for convertibles, as measured by the Merrill Lynch Convertible Index. An example of the type of convertible bond we generally buy is a bond issued by Career Horizons Inc., a Woodbury, N.Y.-based temporary help business with a market capitalization of about $200 million. The company's common shares, which do not pay a dividend and thus did not fall within our income guidelines, more than doubled in value in the past year. The bond, issued at an interest rate of 7%, allowed us to benefit from the underlying stock's appreciation while providing above-average income. Convertibles were somewhat less attractive in terms of price at the end of the fiscal year compared to a year earlier. During 1995, we slightly reduced our holdings as some of these stocks and bonds reached our price targets. - ------------------------------------------------------------------------------- Geographic Diversification PERCENT OF NET ASSETS AS OF NOVEMBER 30, 1995 Pacific Basin 8.3% Canada 2.7% Europe 21.8% South Africa 4.6% USA* 62.6% *NOTE: USA includes foreign bonds in Europe and Latin America denominated in U.S. dollars. - ------------------------------------------------------------------------------- A SLIGHTLY HIGHER FOCUS ON FOREIGN BONDS We focused on bonds issued by foreign governments and financial institutions that provided a high level of income. These bonds and the income they provided were generally denominated in Western European currencies and U.S. dollars. They included bonds issued in European countries such as Sweden, Spain, Hungary, Greece, Austria and Poland. At the start of the fiscal year, our largest holding was Swedish government bonds. These performed very well, and we sold them after they appreciated. The Fund's holdings as of November 30 also included a limited amount of European and Latin American bonds such as Mexican and Argentine government bonds denominated in U.S. dollars. These so-called Brady Bonds were acquired at a substantial discount to their face value. We believe that as the economies of these countries improve, these bonds will offer both income and capital appreciation potential without the currency risk normally associated with investments in Latin America. By year's end, the Fund's holdings of foreign government bonds had increased to 13.9% of net assets from 10% as of November 30, 1994. We believe interest rates may decline in the coming months. Our expectation is that central banks of foreign governments will follow the recent lead of the Federal Reserve Board and cut short-term interest rates. INVESTMENT OUTLOOK In common stocks, we expect our focus to be on sectors where we believe there is still a measure of value -- a feature that should attract investors at this time of relatively high stock prices. We believe the financial sector continues to offer opportunities both in terms of income and appreciation potential. Utilities and REITs should continue to help the Fund provide high current income, in our opinion. One strategy we have begun to implement and which we may make greater use of in the coming months is writing covered call options on U.S. stocks. (Writing a covered call indicates that the Fund is selling a call option on a stock it owns.) We believe this strategy can be a mechanism to help the Fund minimize the effect of market declines. It also allows the Fund to hold stocks that we believe have promising long-term potential but somewhat limited short-term prospects. We may reduce our holdings in convertible securities over the coming year. Because these securities appreciated so much last year, we believe they may offer only limited future appreciation potential. One area where convertible securities remain attractive, however, is in industry groups such as business services whose growth rate is faster than the economy as a whole. In high-yield bonds, we remain somewhat conservative. We are focusing on the higher rated issues among non-investment grade bonds, which again is an effort to counter any potential negative effects a slow-growth economy could have on corporate profits and therefore a company's ability to pay interest and repay principal. /s/ Clive Gillmore - ------------------------ Clive Gillmore Senior Portfolio Manager Foreign Stocks /s/ Ian G. Sims - ------------------------ Ian G. Sims Senior Portfolio Manager Foreign Fixed-Income /s/ Bernard P. Schaffer - ------------------------ Bernard P. Schaffer Senior Portfolio Manager U.S. Equities /s/ Paul A. Matlack - ------------------------ Paul A. Matlack Senior Portfolio Manager U.S. Fixed-Income Fund - -------------------- Updates - -------------------- MANAGED DISTRIBUTION POLICY On July 20, 1995, Global Dividend and Income Fund's Board of Directors adopted a managed distribution policy. The policy's purpose is to make the Fund more attractive to income-oriented investors, thereby, we believe, encouraging share purchases which should help the Fund's market price more accurately reflect the value of its holdings. Under the new policy, the Fund will now be managed with a goal of generating as much of the dividend as possible from ordinary income. However, the balance of the dividend will come from short-term capital gains and, if necessary, a return of capital. The final calendar year dividend payment may include a distribution from net long-term capital gains. For tax purposes, a final audited figure showing the sources of all distributions will be provided on your 1099-DIV statement at the end of each year. LEVERAGING PROGRAM AUTHORIZED On November 16, 1995, the Fund's Board of Directors authorized a program to leverage the Fund's common stock through a bank loan of $25 million. This borrowed money will be invested with the objective of increasing the Fund's net investment income. We hope to implement the leveraging program in the first quarter of 1996. Leverage is a tool that is not available to open-end funds and one that can be an important contributor to the Fund's income potential. As interest rates have declined, the difference between what the Fund will pay to borrow money, an amount tied to short-term interest rates, and the amount we can expect to receive from our investments can be attractive. The use of leverage may enhance your Fund's potential to earn income. However, as with any investment, increased return potential can add to potential risk. Leveraging could result in a higher degree of volatility because the Fund will be more sensitive to market moves on both the upside and the downside. We believe this risk is reasonable given the potential benefits of higher income. - ------------------------------------------------------------------------------- Global Dividend & Income Fund Monthly Dividend History (Dividends Paid Per Share) 5/94 - 12/94 $0.088 1/95 - 7/95 $0.093 8/95 - 11/95 $0.104 12/95 $0.125 - ------------------------------------------------------------------------------- DELAWARE MERGES WITH LINCOLN NATIONAL CORP. As was noted in the semi-annual report, the merger between Delaware Management Holdings, Inc., the parent company of your Fund's investment manager, and a newly created, wholly owned subsidiary of Lincoln National Corp. was completed on April 3, 1995. Delaware Management Holdings, Inc. is now a wholly owned subsidiary of Lincoln National Corp., a diversified financial services company headquartered in Fort Wayne, Indiana. This merger provides Delaware with opportunities to meet the challenges of increasingly complex markets with our existing team of portfolio managers and analysts, while remaining committed to our fundamental investment philosophies. STOCK REPURCHASE PROGRAM IMPLEMENTED The Global Dividend and Income Fund Board of Directors has in place an open market Share Repurchase Program that authorizes the Fund's manager to purchase up to 10% of the outstanding shares on the floor of the New York Stock Exchange. Your Fund's manager bought back 56,800 shares under this program -- nearly 1% of the Fund's outstanding shares -- during the first six months of the 1995 fiscal year, when the Fund's shares traded at a significant discount to net asset value. In the past six months, as the discount narrowed, repurchasing opportunities were not as attractive. The program, however, remains in effect and we may continue to use it from time to time as circumstances warrant. Over the long term, we believe that this program could add to shareholder value in two ways, though there is no guarantee that these results will be met. First, the simultaneous increase in demand and decrease in supply of outstanding shares could have a positive impact on the Fund's stock price. Second, since the share purchases are likely to be made a time when they are trading for less than the underlying value of the assets, the result could be a higher net asset value per share. A REPORT ON GLOBAL DIVIDEND AND INCOME FUND'S ANNUAL MEETING At an annual meeting of shareholders held on March 29, 1995, the following matters were submitted for shareholder vote: the election of directors, the ratification of the selection of Ernst & Young LLP as independent auditors of the Fund and the approval of a new investment management agreement and a new sub-advisory agreement. The new investment management agreement and the new sub-advisory agreement were proposed in connection with the April 3, 1995, merger of Delaware Management Holdings, Inc. (the parent of Delaware Management Company, Inc. and Delaware International Advisors Ltd.) and a subsidiary of Lincoln National Corporation. Whenever there is a change in control of an investment manager, the Investment Company Act of 1940 requires shareholders to vote on a new investment management agreement. Below are the names of each director elected at the meeting as well as the results of the other matters voted on by shareholders. NUMBER OF VOTES* FOR AGAINST/WITHHELD ABSTENTIONS ------------------------------------------------- Election of Directors: Wayne A. Stork 4,966,637 81,204 -- Walter P. Babich 4,967,217 80,624 -- Anthony D. Knerr 4,966,407 81,434 -- Ann R. Leven 4,966,857 80,984 -- W. Thatcher Longstreth 4,966,580 81,262 -- Charles E. Peck 4,966,957 80,884 -- Approval of the New Investment Management Agreement 4,834,631 74,911 138,300 Approval of the New Sub-Advisory Agreement 4,822,662 74,628 150,552 Selection of Ernst & Young LLP as Independent Auditors 4,942,385 30,592 84,865 * Please note that the results of this meeting were not audited by Ernst & Young LLP. Automatic - -------------------- Reinvestment - -------------------- Provides Greater - -------------------- Potential for - -------------------- Dividend Growth - -------------------- If you don't plan to use your dividend income from Global Dividend and Income Fund for current expenses, we recommend that you consider reinvesting your dividends from the Fund automatically. This increases your total number of shares, which in turn earn any subsequent dividends, compounding your income potential. Though dividend reinvestment does not guarantee a profit, it can add to your growth potential, as you can see from the hypothetical illustration on this page. If you would like to reinvest your dividends and your shares are registered in your name, please call Investors Fiduciary Trust Co. at 1-800-596-8396 and tell the Customer Service Representative your decision. You will be asked to put your request in writing. If you have shares registered in "street" name, contact your bank, broker or other nominee who holds the shares to see if you are able to participate in a dividend reinvestment plan. (Shares of Global Dividend and Income Fund are listed on the New York Stock Exchange under the symbol DGF.) - ------------------------------------------------------------------------------- A Strategy to Increase Your Future Income: Reinvestment of Dividends and Capital Gain Distributions Annual Dividend with Annual Dividend with Dividends and Capital Dividends and Capital Gains in Cash Gains Reinvested --------------------- --------------------- Year 1 $1,000 $1,000 Year 2 $1,000 $1,100 Year 3 $1,000 $1,210 Year 4 $1,000 $1,331 Year 5 $1,000 $1,464 Year 6 $1,000 $1,611 Year 7 $1,000 $1,772 Year 8 $1,000 $1,949 Year 9 $1,000 $2,144 Year 10 $1,000 $2,358 Assumes $10,000 initial investment, 10% annual dividend and capital gain distribution and does not include impact of income taxes. This illustration shows only the potential impact of dividend reinvestment on returns and does not reflect the past or future performance of this or any other fund. The illustration assumes there is no additional return on distributions taken in cash. - ------------------------------------------------------------------------------- Financial Statements DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC. STATEMENT OF NET ASSETS NOVEMBER 30, 1995 Number Market of Shares Value COMMON STOCK - 33.59% Automobiles - 0.92% GKN plc ......................................... 51,000 $ 628,716 Turner & Newell plc ............................. 116,000 231,536 ---------- 860,252 ---------- Banking, Finance & Insurance - 5.47% Beneficial ...................................... 5,800 294,350 CoreStates Financial ............................ 40,000 1,550,000 Fleet Financial Group ........................... 12,300 513,525 Great Western Financial ......................... 50,000 1,275,000 National Australia Bank ......................... 66,000 576,083 PT Bank Dagang Nasional ......................... 127,750 106,295 UJB Financial ................................... 24,000 804,000 ---------- 5,119,253 ---------- Computers & Technology - 0.29% B.I.C.C. ........................................ 62,000 269,314 ---------- 269,314 ---------- Energy - 0.87% Elf Gabon ....................................... 2,200 333,565 Royal Dutch Petroleum ........................... 4,050 481,010 ---------- 814,575 ---------- Food, Beverage & Tobacco - 2.34% Dalgety plc ..................................... 73,750 438,794 Philip Morris Companies ......................... 10,000 877,500 Southcorp Holdings Ltd. ......................... 170,000 377,914 Unigate ......................................... 77,000 491,107 ---------- 2,185,315 Healthcare & Pharmaceuticals - 0.86% Bristol-Myers Squibb ............................ 10,000 802,500 ---------- 802,500 ---------- Leisure & Lodging - 0.61% Bass plc ........................................ 54,000 569,892 ---------- 569,892 ---------- Number Market of Shares Value COMMON STOCK (Continued) Metals & Mining - 0.67% Hartebeestfontein ............................... 49,600 $ 128,497 RTZ Corporation plc ............................. 35,000 502,135 ---------- 630,632 ---------- Real Estate - 11.53% American Health Properties ...................... 25,000 496,875 Bay Apartment Communities ....................... 45,000 978,750 Evans Withycombe Residential .................... 27,800 528,200 Glimcher Realty Trust ........................... 30,000 525,000 JDN Realty ...................................... 47,000 963,500 Macerich Company (The) ......................... 50,000 987,500 Oasis Residential ............................... 25,000 521,875 Patriot American Hospitality .................... 38,000 902,500 Reckson Associates Realty ....................... 22,000 613,250 ROC Communities ................................. 28,700 642,163 Simon Property Group ............................ 20,000 465,000 Smith (Charles E.) Residential Realty ........... 10,000 230,000 Sovran Self Storage ............................. 25,000 621,875 Starwood Lodging Trust .......................... 30,000 828,750 Storage Trust Realty ............................ 20,800 418,600 Sun Communities ................................. 20,000 500,000 Union Du Credit Bail Immobil .................... 2,700 268,399 Walden Residential Properties ................... 16,000 286,000 ---------- 10,778,237 ---------- Retail - 0.79% Dickson Concepts ................................ 600,000 434,381 Sime Darby - Hong Kong .......................... 300,000 308,333 ---------- 742,714 ---------- Transportation - 0.49% Brambles Industries ............................. 42,000 459,028 ---------- 459,028 ---------- Utilities - 6.96% British Columbia Telecom ........................ 22,000 386,812 British Gas plc ................................. 91,000 338,914 Electrabel NPV .................................. 3,150 718,271 GTE ............................................. 15,700 669,213 Iberdrola ....................................... 56,000 473,400 North West Water plc ............................ 53,000 483,949 Oklahoma Gas & Electric ......................... 12,000 486,000 Royal PTT Nederland NV ADR ...................... 17,900 633,213 Telecom Corp. of New Zealand .................... 139,000 581,759 Telefonica de Espana ............................ 42,000 580,370 Texas Utilities ................................. 30,000 1,155,000 ---------- 6,506,901 ---------- Miscellaneous - 1.79% Ceramco Corporation Ltd. ........................ 116,000 150,724 Cie De Navigation Mixte ......................... 1,950 293,702 Number Market of Shares Value COMMON STOCK (Continued) Miscellaneous (Continued) Eridania Beghin-Say ............................. 2,550 $ 416,334 Jardine Matheson Holdings Ltd.................... 64,800 392,040 Pacific Dunlop Ltd. ............................. 175,000 418,952 ---------- 1,671,752 ---------- Total Common Stock (cost $31,926,973) ............................. 31,410,365 ---------- CONVERTIBLE PREFERRED STOCK - 8.72% Banking, Finance & Insurance - 1.57% Advanta 6.75% pfd cv ............................ 16,500 635,250 California Federal Bank 7.75% pfd cv "A" ........ 33,800 828,100 ---------- 1,463,350 ---------- Buildings & Materials - 0.41% Blue Circle Industries 7.625% pfd cv ............ 150,000 384,287 ---------- 384,287 ---------- Chemicals - 0.79% ARCO 9.01% "Lyondell" Notes "DECS" .............. 29,700 742,500 ---------- 742,500 ---------- Electronics - 0.71% +Westinghouse Electric $1.30 pfd cv "C" ......... 40,000 660,000 ---------- 660,000 ---------- Food, Beverage & Tobacco - 1.26% RJR Nabisco Holdings $0.60 pfd cv "C" "PERCS" .................................. 200,000 1,175,000 ---------- 1,175,000 ---------- Metals & Mining - 0.54% MascoTech $1.20 pfd cv "DECS" .................. 40,000 505,000 ---------- 505,000 ---------- Paper & Forest Products - 2.45% +International Paper 5.25% pfd cv ............... 34,000 1,547,000 James River Corp 9.00% pfd cv "P" "DECS" ................................... 25,000 750,000 ---------- 2,297,000 ---------- Real Estate - 0.99% Prime Retail 8.50% pfd cv "B" .................. 50,000 928,125 ---------- 928,125 ---------- Total Convertible Preferred Stock (cost $8,689,257) ............................ 8,155,262 ---------- Principal Amount NON-CONVERTIBLE BONDS - 45.08% Aerospace & Defense - 0.73% American General sr notes 12.875% 2002 ..............................US$ 400,000 399,000 K & F Industries sr sub deb 13.75% 2001 .................................US$ 270,000 282,150 ---------- 681,150 ---------- Principal Market Amount Value NON-CONVERTIBLE BONDS (Continued) Automobiles & Auto Equipment - 0.46% Exide sr notes 10.75% 2002 .................US$ 400,000 $432,000 ---------- 432,000 ---------- Banking, Finance & Insurance - 9.45% Bank of Austria 10.875% 2004 ...............AUS 1,000,000 832,704 Bank of Greece matador bonds 12.50% 1997 ...............................ESP 80,000,000 668,157 Commonwealth Bank of Australia unsec unsub 13.75% 1999 ...................AUD 500,000 440,515 Eurofima sr unsec unsub deb 9.875% 2007 ...............................AUD 2,000,000 1,621,729 European Bank for Reconstruction & Development sr unsub marathon bonds 15.25% 1998 ................GRD 100,000,000 425,796 European Investment Bank deb 17.50% 1999 ..........................GRD 50,000,000 222,886 European Investment Bank marathon bonds 14.00% 2001.................ESP 80,000,000 755,131 International Bank for Reconstruction & Development sr unsub 15.50% 1997 ........................GRD 700,000,000 2,951,133 International Finance marathon bonds 15.25% 1999 ................GRD 150,000,000 637,117 Mutual Group unsec sub deb 7.25% 2004 ...............................GBP 200,000 280,472 ---------- 8,835,640 ---------- Buildings & Materials - 0.64% American Standard sr notes 10.875% 1999 ..............................US$ 450,000 490,500 Schuller International Group sr notes 10.875% 2004 ..............................US$ 100,000 112,000 ---------- 602,500 ---------- Cable, Media & Publishing - 2.51% Century Communications sr notes 9.75% 2002 ...............................US$ 600,000 618,000 Cinemark USA sr notes 12.00% 2002 ..............................US$ 400,000 437,000 Infinity Broadcasting sr sub notes 10.375% 2002 .............................US$ 200,000 215,750 Jones Intercable sr notes 9.625% 2002 ..............................US$ 300,000 320,250 Rogers Cablesystems sr sec notes 10.00% 2005 ..............................US$ 300,000 313,500 Rogers Cablesystems sr sec deb 10.00% 2007 ..............................US$ 140,000 144,900 Principal Market Amount Value NON-CONVERTIBLE BONDS (Continued) Cable, Media & Publishing (Continued) Rogers Cablesystems sr sec deb 11.00% 2015 ..............................US$ 90,000 $ 93,150 +Sullivan Graphics sr sub notes 12.75% 2005 ..............................US$ 200,000 200,250 ---------- 2,342,800 ---------- Chemicals - 1.86% Berry Plastics sr sub notes 12.25% 2004 ..............................US$ 600,000 636,000 NL Industries sr sec notes 11.75% 2003 ..............................US$ 265,000 282,225 Polymer Group sr notes 12.25% 2002 ..............................US$ 400,000 414,000 Uniroyal Chemical Acquistion sr sub notes 11.00% 2003 ..................US$ 400,000 405,000 ---------- 1,737,225 ---------- Computers & Technology - 0.21% Unisys credit-sensitive notes 13.50% 1997 ..............................US$ 200,000 197,000 ---------- 197,000 ---------- Consumer Products - 0.46% American Safety Razor sr notes 9.875% 2005 ..............................US$ 200,000 199,000 +Remington Arms sr sub notes 10.00% 2003 ..............................US$ 250,000 234,375 ---------- 433,375 ---------- Electronics - 0.81% ADT Operations sr sub notes 9.25% 2003 ...............................US$ 250,000 265,938 +Pronet sr sub notes 11.875% 2005 ...........US$ 450,000 487,125 ---------- 753,063 ---------- Energy - 0.23% Ferrellgas sr sub notes 10.00% 2001 ........US$ 200,000 210,500 ---------- 210,500 ---------- Environmental Services - 0.46% Allied Waste Industries sr sub notes 12.00% 2004 ..............................US$ 400,000 430,000 ---------- 430,000 ---------- Food, Beverage & Tobacco - 0.30% Purina Mills sr sub notes 10.25% 2003 ..............................US$ 100,000 103,000 Specialty Foods sr notes 11.125% 2002 .............................US$ 190,000 180,500 ---------- 283,500 ---------- Foreign Government - 13.92% National Bank of Hungary deb 10.00% 2002 ..........................GBP 400,000 582,740 Principal Market Amount Value NON-CONVERTIBLE BONDS (Continued) Foreign Government (Continued) Poland Global 2.75% 2024 ....................US$ 2,000,000 $ 895,000 Republic of Argentina 5.00% 2023 ............US$ 1,500,000 785,625 Republic of South Africa 12.50% 2002 ...............................ZAL 16,000,000 4,042,923 Republic of Turkey unsec deb 9.00% 2003 ................................GBP 400,000 525,383 Spanish Government 10.50% 2003 ..............ESP 120,000,000 982,239 Spanish Government 11.30% 2002 ..............ESP 320,000,000 2,723,348 Treasury Corp of Victoria 10.50% 2003 ...............................AUD 1,500,000 1,230,934 *United Mexican States 6.25% 2019 ................................US$ 2,000,000 1,247,500 ---------- 13,015,692 ---------- Healthcare & Pharmaceuticals - 0.37% HEALTHSOUTH Rehabilitation sr sub notes 9.50% 2001 ................................US$ 200,000 213,500 Tenet Healthcare sr sub notes 10.125% 2005 ..............................US$ 120,000 130,800 ---------- 344,300 ---------- Leisure & Lodging - 1.36% Four Seasons Hotel deb 11.05% 1996 ...............................CAD 800,000 594,202 Scott's Hospitality unsec deb 10.95% 2001 ...............................CAD 800,000 673,837 ---------- 1,268,039 ---------- Metals & Mining - 1.85% AK Steel sr notes 10.75% 2004 ..............US$ 500,000 553,125 Armco sr notes 11.375% 1999 .................US$ 250,000 259,375 G.S. Technologies sr notes 12.00% 2004 ...............................US$ 400,000 399,000 G.S. Technologies sr notes 12.25% 2005 ...............................US$ 300,000 300,000 Inland Steel unsec notes 12.75% 2002 ...............................US$ 200,000 222,500 ---------- 1,734,000 ---------- Packaging & Containers - 0.60% Anchor Glass Container 10.25% 2002 ..........US$ 480,000 352,800 Container Corp. of America sr notes 11.25% 2004 ...............................US$ 200,000 208,000 ---------- 560,800 ---------- Paper & Forest Products - 3.05% Crown Paper sr sub notes 11.00% 2005 ...............................US$ 200,000 189,000 Domtar deb 10.85% 2017 .....................CAD 1,000,000 835,853 Domtar sr notes 11.75% 1999 ................US$ 400,000 445,000 Principal Market Amount Value NON-CONVERTIBLE BONDS (Continued) Paper & Forest Products (Continued) Owens-Illinois sr amort deb 11.00% 2003 ............................. US$ 600,000 $ 670,500 Rainy River Forest Products sr sec notes 10.75% 2001 ............................. US$ 300,000 329,250 Repap Wisconsin sr sec notes 9.25% 2002 .............................. US$ 400,000 386,000 ----------- 2,855,603 ----------- Retail - 2.15% ASDA-MFI Group unsec unsub deb 10.875% 2010 ............................ GBP 500,000 872,771 Cort Furniture Rental sr notes 12.00% 2000 ............................. US$ 247,000 264,290 Fleming Companies sr sub notes 10.625% 2001 ............................ US$ 300,000 315,000 Penn Traffic sr notes 10.65% 2004 ......... US$ 200,000 185,750 Ralph's Grocery sr sub notes 13.75% 2005 ............................. US$ 350,000 371,000 ----------- 2,008,811 ----------- Transportation - 0.99% Eletson Holdings 1st pfd mtg notes 9.25% 2003 .............................. US$ 200,000 199,000 Trans Ocean Container sr sub notes 12.25% 2004 .............................. US$ 500,000 521,250 Viking Star Shipping 1st pfd ship mtg notes 9.625% 2003 ............................. US$ 200,000 205,000 ----------- 925,250 ----------- Utilities - 0.93% Comcast Cellular sr notes 0.00% 2000 .............................. US$ 600,000 459,000 Midland Funding II deb 11.75% 2005 ............................. US$ 400,000 414,716 ----------- 873,716 ----------- Miscellaneous - 1.74% +Graphic Controls sr sub notes 12.00% 2005 ............................. US$ 1,000,000 1,021,250 IMO Industries sr sub deb 12.25% 1997 ............................. US$ 187,000 188,400 Lamar Advertising sr sec notes 11.00% 2003 ............................. US$ 400,000 415,000 ----------- 1,624,650 ----------- Total Non-Convertible Bonds (cost $40,526,561) ...................... 42,149,614 ----------- Principal Market Amount Value CONVERTIBLE BONDS - 9.23% Banking - 1.53% +Alfa S.A. De C.V. sub notes 8.00% 2000 ......................... US$ 1,500,000 $1,434,375 ---------- 1,434,375 ---------- Computers & Technology - 0.49% Unisys sub notes 8.25% 2000 .......... US$ 500,000 458,750 ---------- 458,750 ---------- Electronics - 0.30% VLSI Technology sub notes 8.25% 2005 ......................... US$ 300,000 282,750 ---------- 282,750 ---------- Healthcare - 0.60% Theratx sub deb 8.00% 2002 ........... US$ 600,000 561,000 ---------- 561,000 ---------- Paper & Forest Products - 0.24% Repola Ltd sub deb 6.50% 2004 ........ FIM 1,000,000 221,211 ---------- 221,211 ---------- Real Estate - 5.51% IRT Property sub deb 7.30% 2003 ...... US$ 1,200,000 1,113,000 Liberty Property Trust sub deb 8.00% 2001 ......................... US$ 1,000,000 997,500 LTC Properties sub deb 8.50% 2000 ......................... US$ 500,000 505,625 Malan Realty Investors sub deb 9.50% 2004 ......................... US$ 800,000 646,000 Mid-Atlantic Realty Trust sub deb 7.625% 2003 ........................ US$ 1,000,000 860,000 Sizeler Property Investors sub deb 8.00% 2003 ......................... US$ 1,200,000 1,029,000 ---------- 5,151,125 ---------- Miscellaneous - 0.56% +Career Horizons 7.00% 2002 ........... US$ 500,000 520,625 ---------- 520,625 ---------- Total Convertible Bonds (cost $9,276,128) .................. 8,629,836 ---------- SHORT-TERM SECURITIES - 0.45% **U.S. Treasury Bills 5.56% 12/21/1995 .......................... US$ 420,000 418,703 ---------- Total Short-Term Securities (cost $418,703) ..................... 418,703 ---------- Market Value TOTAL MARKET VALUE OF SECURITIES OWNED - 97.07% (cost $90,837,622) ............................ $90,763,780 RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 2.93% ................................... 2,736,493 ----------- NET ASSETS APPLICABLE TO 6,650,647 SHARES ($0.01 par value) OUTSTANDING; EQUIVALENT TO $14.06 PER SHARE - 100.00% ................................... $93,500,273 =========== DECS - Dividend Enhanced Convertible Security PERCS - Preferred Equity Redemption Cumulative Stock *There are 2,000,000 rights attached to these bonds which carry no cost or value to the Fund. **U.S. Treasury Bills are traded on a discount basis; the interest rates shown are the discount rates paid at the time of purchase by the Fund. +Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers (See Note 5). US$ - U.S. dollars AUS - Austrian schillings GBP - British pounds GRD - Greek drachmas CAD - Canadian dollars ZAL - South African rand ESP - Spanish pesetas FIM - Finnish markka AUD - Australian dollars COMPONENTS OF NET ASSETS AT NOVEMBER 30, 1995: Common stock, $0.01 par value, 500,000,000 shares authorized to the Fund ....................................... $ 93,096,054 Accumulated undistributed income (loss): Net investment income++....................................... 449,104 Net realized gain on investments++............................ 45,906 Net unrealized depreciation of investments and foreign currencies .................................... (90,791) ------------ Total net assets applicable to 6,650,647 shares of common stock; equivalent to $14.06 per share ............................... $ 93,500,273 ============ ++Accumulated net investment income includes net realized gain on foreign currencies. During the current fiscal year, the Fund reclassified $173,951 of permanent book and tax basis differences that occurred during the fiscal period ended November 30, 1994, from accumulated net realized gain on investments and foreign currencies to accumulated net investment income. Net realized gains on foreign currencies are distributed as net investment income in accordance with provisions of the Internal Revenue Code. The prior year undistributed net investment income noted in the Statements of Changes in Net Assets, and Notes 8 and 9 have been adjusted to reflect this reclassification. See accompanying notes DELAWARE GROUP Global Dividend and Income Fund, Inc. Statement of Operations For the Year Ended November 30, 1995 INVESTMENT INCOME: Interest ........................................ $ 6,135,195 Dividends ....................................... 2,547,668 $ 8,682,863 ------------ EXPENSES: Management fees ................................. 631,472 Administrative fees ............................. 189,442 Reports to shareholders ......................... 57,641 Custodian fees .................................. 29,954 Amortization of organization expenses ........... 24,820 Transfer agent fees ............................. 22,000 Directors' fees ................................. 21,873 NYSE fees ....................................... 16,171 Professional fees ............................... 14,196 Taxes, other than taxes on income ............... 11,489 Other ........................................... 531 1,019,589 ------------ ----------- NET INVESTMENT INCOME BEFORE FOREIGN TAXES WITHHELD ........................ 7,663,274 FOREIGN TAXES WITHHELD .......................... (101,037) ------------ NET INVESTMENT INCOME ........................... 7,562,237 ------------ NET REALIZED AND UNREALIZED GAIN ON SECURITIES AND FOREIGN CURRENCIES: Net realized gain on: Security transactions .......................... 1,360,794 Foreign currencies ............................. 583,684 ------------ Net realized gain .............................. 1,944,478 Net change in unrealized depreciation on securities and foreign currencies .............. 5,812,377 ------------ NET REALIZED AND UNREALIZED GAIN ON SECURITIES AND FOREIGN CURRENCIES ......................... 7,756,855 ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...................... $ 15,319,092 ============ See accompanying notes DELAWARE GROUP Global Dividend and Income Fund, Inc. Statements of Changes in Net Assets Year For the Period Ended March 4, 1994* to November 30, 1995 November 30, 1994 OPERATIONS: Net investment income ...................... $ 7,562,237 $ 5,628,333 Net realized gain (loss) on securities and foreign currencies .................... 1,944,478 (1,140,937) Net change in unrealized appreciation (depreciation) on securities and foreign currencies .................... 5,812,377 (5,903,168) ----------- ----------- Net increase (decrease) in net assets resulting from operations .................. 15,319,092 (1,415,772) ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ...................... (8,777,060) (4,722,041) ----------- ----------- CAPITAL SHARE TRANSACTIONS: Net proceeds from initial public offering of shares (net of $656,979 offering costs) ... -- 93,813,021 Cost of shares repurchased ................. (713,795) -- Additional offering costs charged to paid-in capital ........................ (108,172) -- ----------- ----------- Increase (decrease) in net assets derived from capital share transactions ........... (821,967) 93,813,021 ----------- ----------- NET INCREASE IN NET ASSETS ................. 5,720,065 87,675,208 NET ASSETS: Beginning of period ........................ 87,780,208 105,000 ----------- ----------- End of period (including undistributed net investment income of $449,104 and $1,080,243, respectively .............. $93,500,273 $87,780,208 =========== =========== - ---------- * Commencement of operations. See accompanying notes DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC. NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 1995 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. The Fund is organized as a Maryland corporation. 1. Significant Accounting Policies The following accounting policies are in accordance with generally accepted accounting principles and are consistently followed by the Fund: Security Valuation - Securities listed or traded on a national exchange, except for debt securities, are valued at the last sale price on the exchange where they are primarily traded. Securities listed on a foreign exchange are valued at the last quoted sale price before the time when the Fund is valued. Securities not traded on a particular day, over-the-counter securities and government and agency securities are valued at the mean value between bid and asked prices. Exchange-traded options are valued at the last reported sale price or, if no sales are reported, at the mean between the last reported bid and asked prices. Non-exchange-traded options are valued using a mathematical model. Short-term instruments having a maturity date of less than 60 days are valued at amortized cost. Debt securities are valued by an independent pricing service when such prices are believed to reflect the fair value of such securities. All assets and liabilities that are expressed in foreign currencies are valued and translated into U.S. dollars at the exchange rate of such currencies against the U.S. dollar as provided by the pricing service as of 3:30 pm New York time; this constitutes a change from the times recited in the Fund's prospectus for the valuation of securities and translation of foreign currencies into U.S. dollars. Forward foreign currency contracts are valued at the mean between the bid and asked prices of the contracts. Interpolated values are derived when the settlement date of the contract is on an interim date for which quotations are not available. Federal Income Taxes - The Fund intends to continue to qualify as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes is required in the financial statements. 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 and distributions are recorded on the ex-dividend date. 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. Interest income and expenses are recorded on an accrual basis. A total of $124,000 was incurred in connection with the organization of the Fund. These costs were deferred and are being amortized ratably over a five year period from the date the Fund commenced operations. Certain fund expenses are paid directly by brokers. The amount of these expenses is less than 0.01% of the Fund's average weekly net assets. 2. Investment Management Fee and Other Transactions with Affiliates In accordance with the terms of the Investment Management Agreement, the Fund pays Delaware Management Company, Inc. (DMC), the Investment Manager of the Fund, an annual fee equal to 0.70% of the Fund's adjusted average weekly net assets. At November 30, 1995, the Fund had a liability for Investment Management fees of $108,939. The Fund has also entered into a advisory agreement with Delaware International Advisers Ltd. (DIAL) (the "Sub-Adviser"). For the services provided to DMC, DMC pays the Sub-Adviser a monthly fee equal to 40% of the fee paid to DMC under the terms of the Investment Management Agreement. The Fund has also entered into an Administration Agreement with Middlesex Administrators L.P., the administrator of the Fund, which provides for payment, subject to an annual minimum fee of $150,000, of a monthly fee computed at the annual rate of 0.21% of the Fund's adjusted average weekly net assets. At November 30, 1995, the Fund had a liability for administration fees of $32,682. Officers, directors and employees of DMC, who are also officers, directors and employees of the Fund, do not receive any compensation from the Fund. On April 3, 1995, Delaware Management Holdings, Inc. the indirect parent of DMC and DIAL through a merger transaction (the "Merger") became a wholly-owned subsidiary of Lincoln National Corporation. Other than the resulting change in ownership, the Merger will not materially change the manner in which DMC and DIAL have heretofore conducted their relationships with the Fund. 3. Investments During the year ended November 30, 1995, the Fund made purchases of $88,591,535 and sales of $91,474,840 of investment securities other than U.S. government securities and temporary cash investments. At November 30, 1995, net unrealized depreciation for federal income tax purposes aggregated $73,842 of which $3,682,235 related to unrealized appreciation of securities and $3,756,077 to unrealized depreciation of securities. The realized gain for federal income tax purposes was $45,906 for the year ended November 30, 1995. Of the ordinary income distributions paid by the Fund during its taxable year ended November 30, 1995, 14% qualifies for the dividends received deduction for corporations. Additionally, there were no long-term capital gain distributions paid by the Fund during the year. Transactions in options written for the year ended November 30, 1995, were as follows: Options Terminated --------------------------------- Number Proceeds from Cost Net of Premiums Sale of of Realized Contracts Received Investments Investments Gain Options outstanding November 30, 1994 ........ -- $ -- Contracts written ......... 335 18,340 Contracts terminated: Exercised ................ 335 18,340 $836,802 $801,822 $53,320 --- ------ -------- -------- ------- Total contracts terminated 335 18,340 $836,802 $801,822 $53,320 Contracts outstanding ======== ======== ======= November 30, 1995 ........ -- $ -- --- ------ 4. Forward Foreign Currency Contracts The Fund will, from time to time, enter into forward foreign currency contracts. There are costs and risks associated with such currency transactions. No type of foreign currency transaction will eliminate fluctuations in the prices of the Fund's foreign securities or will prevent loss if the prices of such securities should decline. No forward foreign currency contracts were outstanding as of November 30, 1995. 5. Concentration of Credit Risk 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 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 in securities whose value is derived from an underlying pool of mortgages or consumer loans. Prepayment of these loans may shorten the stated maturity of the respective obligation and may result in a loss of premium, if any has been paid. The Fund may invest up to 10% of its total assets in illiquid securities which 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. These securities have been denoted in the Statement of Net Assets. 6. Geographic Disclosure As of November 30, 1995, the Fund's geographic diversification was as follows: Percentage of Total Securities Country* Market Value at Value - -------- ------------ ---------------- United States $56,810,226 62.59% United Kingdom 6,600,013 7.27% Spain 6,182,644 6.81% Australia 5,957,861 6.56% Greece 4,236,930 4.67% South Africa 4,171,418 4.60% Canada 2,490,703 2.74% France 1,312,001 1.45% Hong Kong 742,714 0.82% New Zealand 732,483 0.81% Belgium 718,271 0.79% Netherlands 481,010 0.53% Finland 221,211 0.24% Indonesia 106,295 0.12% ----------- ------- Total $90,763,780 100.00% =========== ======= *Based on the country of the currency in which each security is denominated. 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. 7. Capital Stock There are 500,000,000 shares of $0.01 par value capital stock authorized. Under the Share Repurchase Program, the Fund repurchased 56,800 shares at a weighted average discount rate of 4.29% per share during the year ended November 30, 1995. On December 1, 1995, the Fund declared its monthly dividend in the amount of $0.125 per share. This dividend was payable December 29, 1995, to stockholders of record at the close of business on December 15, 1995. The ex-dividend date was December 13, 1995. Shares issuable under the Fund's dividend reinvestment plan are purchased by the Fund's transfer agent, IFTC, in the open market. Notes to Financial Statements (Continued) 8. Financial Highlights Selected data for each share of the Fund outstanding throughout each period were as follows:
For the Period Year Ended March 4, 1994* to November 30, 1995 November 30, 1994 ----------------- ------------------- Net asset value, beginning of period ............................... $13.09 $ 14.00+ Income from investment operations: Net investment income ............................................ 1.23 0.86 Net realized and unrealized gain (loss) from security transactions 1.06 (1.07) -------- -------- Net increase (decrease) in net assets from investment operations . 2.29 (0.21) -------- -------- Less dividends and distributions: Dividends from net investment income ............................. (1.32) (0.70) Distributions from net realized gain on security transactions .... -- -- -------- -------- Total dividends and distributions ................................ (1.32) (0.70) -------- -------- Net asset value, end of period ..................................... $ 14.06 $ 13.09 ======== ======== Market value, end of period ........................................ $ 13.75 $ 11.75 ======== ======== Total investment return based on: (1) Market value ..................................................... 29.74% (17.15)% ======== ======== Net asset value .................................................. 19.08% (1.11)% ======== ======== Ratios and supplemental data: Net assets, end of period (000 omitted) .......................... $93,500 $87,780 ======== ======== Ratio of expenses to average net assets .......................... 1.13% 1.32%** Ratio of net investment income to average net assets ............. 8.39% 8.54%** Portfolio turnover ............................................... 101% 86%
- -------- * Commencement of operations. ** Annualized. + Net of offering costs of $0.10 charged to paid-in capital with respect to issuance of common shares. (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, if any, 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. The total investment return based on market value and net asset value have not been annualized for the period ended November 30, 1994. Notes to Financial Statements (Continued) 9. Quarterly Results of Operations (Unaudited)
Net Realized and Unrealized Gain(Loss) on Investments and Net Increase Net Unrealized (Decrease) in Investment Net Investment Gain (Loss) on Net Assets Resulting Market Price Quarter Ended Income Income Foreign Currencies from Operations on NYSE+ - ------------- ------------- -------------- ------------------ -------------------- -------------- Total Per Total Per Total Per Total Per (000 Share (000) Share (000) Share (000) Share High Low ------ ----- ------ ----- ------- ------- -------- ------- ------ ------ May 31, 1994* ............ $2,078 $0.31 $1,794 $0.27 $(3,661) $(0.54) $ (1,867) $(0.27) $15.13 $11.88 August 31, 1994 .......... 2,231 0.33 1,930 0.29 491 0.07 2,421 0.36 13.13 12.13 November 30, 1994 ........ 2,245 0.34 2,078 0.30 (4,048) (0.60) (1,970) (0.30) 12.88 11.63 ------ ----- ------ ----- ------- ------ ------- ------ $6,554 $0.98 $5,802 $0.86 $(7,218) $(1.07) $(1,416) $(0.21) ====== ===== ====== ===== ======= ====== ======= ====== February 28, 1995 ........ $2,316 $0.38 $2,007 $0.33 $1,192 $ 0.15 $ 3,199 $ 0.48 $12.50 $11.50 May 31, 1995 ............. 2,223 0.33 1,958 0.29 3,074 0.46 5,032 0.75 13.00 12.25 August 31, 1995 .......... 2,066 0.27 1,788 0.24 2,104 0.35 3,892 0.59 13.25 12.25 November 30, 1995 ........ 2,662 0.41 2,393 0.37 803 0.10 3,196 0.47 13.75 12.75 ------ ----- ------ ----- ------- ------ ------- ------ $9,267 $1.39 $8,146 $1.23 $ 7,173 $ 1.06 $15,319 $ 2.29 ====== ===== ====== ===== ======= ====== ======= ======
* The Fund commenced operations on March 4, 1994. + As reported on the New York Stock Exchange - ------------------------------------------------------------------------------ DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC. 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 of Delaware Group Global Dividend and Income Fund, Inc. as of November 30, 1995, and the related statement of operations for the year then ended and the statements of changes in net assets and financial highlights for the year ended November 30, 1995, and for the period March 4, 1994, (commencement of operations) to November 30, 1994. These financial statements and financial highlights are the responsibility of the Fund's 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 generally accepted auditing standards. 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. Our procedures included confirmation of securities owned as of November 30, 1995, 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 the 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, 1995, and the results of its operations for the year then ended and the changes in its net assets and the financial highlights for the year ended November 30, 1995, and for the period March 4, 1994, (commencement of operations) to November 30, 1994, in conformity with generally accepted accounting principles. ERNST & YOUNG LLP Philadelphia, Pennsylvania January 16, 1996
Board of Executive - ------------------ -------------------- Directors Officers - ------------------ -------------------- MR. WAYNE A. STORK MS. ANN R. LEVEN MR. WAYNE A. STORK Chairman, President and Deputy Treasurer Chairman, President and Chief Executive Officer National Gallery of Art Chief Executive Officer Delaware Group of Funds Washington, DC Delaware Group of Funds Philadelphia, PA Philadelphia, PA MR. W. THACHER LONGSTRETH MR. WALTER P. BABICH Vice Chairman MR. WINTHROP S. JESSUP Board Chairman Packquisition Corp. Executive Vice President Citadel Constructors, Inc. Philadelphia, PA King of Prussia, PA MR. RICHARD G. UNRUH, JR. MR. CHARLES E. PECK Executive Vice President MR. ANTHONY D. KNERR Secretary, Consultant Enterprise Homes, Inc. MR. PAUL E. SUCKOW Anthony Knerr & Associates Columbia, MD Senior Vice President/Chief New York, NY Investment Officer, Fixed-Income MR. DAVID K. DOWNES Senior Vice President/Chief Administrative Officer/Chief Financial Officer MR. GEORGE M. CHAMBERLAIN, JR. Senior Vice President/Secretary Audit MR. JOSEPH H. HASTINGS - ------------------ Vice President/Corporate Controller Committee - ------------------ MR. MICHAEL P. BISHOF Vice President/Treasurer MR. WALTER P. BABICH MS. ANN R. LEVEN MR. ANTHONY D. KNERR
The Delaware Group includes funds with a wide range of investment objectives. Stock funds, income funds, tax-free funds, money market funds, closed-end equity/income funds and global funds give investors the ability to create a portfolio that fits their personal financial goals. For more information, including a prospectus of any Delaware Group fund, contact your financial adviser or call the Delaware Group at 800-523-4640. Read the Prospectus carefully before investing. BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE FUND ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SHARES OF THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS. NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(C) OF THE INVESTMENT ACT OF 1940 THAT THE FUND MAY PURCHASE AT MARKET PRICES FROM TIME TO TIME SHARES OF ITS COMMON STOCK IN THE OPEN MARKET. PRINCIPAL OFFICE OF THE FUND 1818 Market Street Philadelphia, PA 19103 INVESTMENT MANAGER Delaware Management Company, Inc. Philadelphia SUB-ADVISER Delaware International Advisers Ltd. London INDEPENDENT AUDITORS Ernst & Young LLP 2001 Market Street Philadelphia, PA 19103 REGISTRAR AND STOCK TRANSFER AGENT Investors Fiduciary Trust Company 210 West 10th Street Kansas City, MO 64105 800-596-8396 NUMBER OF RECORDHOLDERS AS OF NOVEMBER 30, 1995 383 GDIF002[11/95]PP1/96 ==================== GLOBAL DIVIDEND AND INCOME FUND =================== 1995 ANNUAL REPORT A Tradition of Sound Investing Since 1929 DGF DELAWARE Listed GROUP NYSE ===================== Philadelphia o London -----END PRIVACY-ENHANCED MESSAGE-----