UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-8246
Exact name of registrant as specified in charter: Delaware Investments Global Dividend and Income
Fund, Inc.
Address of principal executive offices: 2005 Market Street
Philadelphia, PA 19103
Name and address of agent for service: Richelle S. Maestro, Esq.
2005 Market Street
Philadelphia, PA 19103
Registrant's telephone number, including area code: (800) 523-1918
Date of fiscal year end: November 30
Date of reporting period: May 31, 2005
Item 1. Reports to Stockholders
Delaware
Investments(R)
-----------------------------------
A member of Lincoln Financial Group
CLOSED END
SEMIANNUAL REPORT MAY 31, 2005
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DELAWARE INVESTMENTS
GLOBAL DIVIDEND AND INCOME FUND, INC.
[LOGO] POWERED BY RESEARCH.(SM)
TABLE
OF CONTENTS
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SECTOR ALLOCATION 1
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FINANCIAL STATEMENTS:
Statement of Net Assets 3
Statement of Operations 10
Statements of Changes in Net Assets 11
Statement of Cash Flows 12
Financial Highlights 13
Notes to Financial Statements 14
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OTHER FUND INFORMATION 18
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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 Management Company, a series
of Delaware Management Business Trust, which is a registered investment advisor.
(C) 2005 Delaware Distributors, L.P.
SECTOR ALLOCATION As of May 31, 2005
DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
The SEC adopted a requirement that all funds present their categories of
portfolio holdings in a table, chart, or graph format in their annual and
semiannual shareholder reports. The following chart lists the Fund's categories
of portfolio holdings as a percentage of total net assets and is provided in
compliance with such requirement.
PERCENTAGE
SECTOR OF NET ASSETS
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COMMON STOCK 80.79%
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Consumer Discretionary 5.21%
Consumer Staples 4.84%
Energy 6.77%
Financials 15.76%
Health Care 8.30%
Healthcare REITs 0.12%
Industrials 4.40%
Industrial REITs 0.93%
Information Technology 2.99%
Lodging 1.63%
Mall REITs 4.29%
Manufactured Housing REITs 0.20%
Materials 3.70%
Mortgage REITs 4.98%
Multifamily REITs 0.30%
Office/Industrial REITs 2.11%
Office REITs 1.92%
Retail Strip Centers REITs 0.90%
Telecommunication Services 5.80%
Utilities 5.64%
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CONVERTIBLE PREFERRED STOCK 0.89%
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Environmental Services 0.23%
Financial 0.18%
Telecommunications 0.48%
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PREFERRED STOCK 3.36%
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Leisure, Lodging & Entertainment 0.52%
Lodging REITs 1.14%
Office REITs 0.72%
Retail Strip Centers REITs 0.38%
Utilities 0.60%
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PERCENTAGE
SECTOR OF NET ASSETS
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COMMERCIAL MORTGAGE-BACKED SECURITIES 0.12%
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CONVERTIBLE BONDS 2.08%
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Capital Goods - Manufacturing 0.16%
Consumer Cyclical 1.04%
Technology 0.50%
Transportation 0.05%
Utilities 0.33%
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CORPORATE BONDS 21.10%
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Capital Goods - Manufacturing 1.41%
Chemicals 0.59%
Consumer Cyclical 1.20%
Consumer Non-Cyclical 1.09%
Energy 1.27%
Finance 4.85%
Forest/Paper Products 1.62%
Gaming 0.95%
Health Care 0.57%
Media 1.80%
Metals/Mining 0.10%
Retail 0.06%
Technology 0.32%
Telecommunications 1.47%
Textile & Apparel 0.14%
Transportation 2.49%
Utilities 1.17%
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REGIONAL AGENCY 1.96%
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Australia 0.78%
Canada 1.18%
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SOVEREIGN AGENCY 3.39%
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Canada 0.55%
Japan 2.84%
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1
SECTOR ALLOCATION (CONTINUED) As of May 31, 2005
DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
The SEC adopted a requirement that all funds present their categories of
portfolio holdings in a table, chart, or graph format in their annual and
semiannual shareholder reports. The following chart lists the Fund's categories
of portfolio holdings as a percentage of total net assets and is provided in
compliance with such requirement.
PERCENTAGE
SECTOR OF NET ASSETS
- --------------------------------------------------------------------------------
SOVEREIGN DEBT 12.91%
- --------------------------------------------------------------------------------
Austria 0.96%
Belgium 0.70%
France 0.97%
Germany 2.96%
Italy 0.67%
Netherlands 0.68%
Norway 0.26%
Poland 2.08%
Sweden 1.58%
United Kingdom 2.05%
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SUPRANATIONAL 1.31%
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U.S. TREASURY OBLIGATIONS 3.51%
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CALL OPTIONS 0.04%
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WARRANTS 0.00%
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SECURITIES LENDING COLLATERAL 13.72%
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TOTAL MARKET VALUE OF SECURITIES 145.18%
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OBLIGATIONS TO RETURN SECURITIES LENDING COLLATERAL (13.72%)
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RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES 0.09%
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BORROWING UNDER LINE OF CREDIT (31.55%)
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TOTAL NET ASSETS 100.00%
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2
STATEMENT DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS* May 31, 2005 (Unaudited)
Number of Market
Shares Value (U.S.$)
COMMON STOCK - 80.79%
Consumer Discretionary - 5.21%
Boots Group 44,819 $ 494,697
Coles Myer 91,055 627,010
Gap 31,017 651,357
GKN 75,215 345,062
GUS 28,285 435,539
Limited Brands 32,800 674,696
Mattel 39,500 718,110
Mitchells & Butlers 29,029 170,755
*+XM Satellite Radio Holdings Class A 400 12,844
-----------
4,130,070
-----------
Consumer Staples - 4.84%
Archer-Daniels-Midland 35,000 694,750
ConAgra Foods 29,500 771,425
Foster's Group 191,687 781,560
Kimberly-Clark 12,500 804,124
Safeway 35,400 779,154
-----------
3,831,013
-----------
Energy - 6.77%
BG Group 66,367 502,526
BP 51,154 512,573
Chevron 14,000 752,920
ConocoPhillips 7,300 787,232
Exxon Mobil 13,500 758,700
*+Petroleum Geo-Services ADR 397 26,897
Royal Dutch Petroleum 13,709 797,997
Sasol 18,841 466,383
*Total 3,440 759,902
-----------
5,365,130
-----------
Financials - 15.76%
Allstate 14,900 867,180
Aon 34,100 850,113
Aviva 62,582 699,856
Banca Intesa 122,698 573,416
Banco Santander Central Hispanoamericano 39,771 453,713
Chubb 10,200 859,146
*Fortis 18,386 499,598
Hartford Financial Services 11,500 860,085
HBOS 54,179 788,487
Huntington Bancshares 33,000 769,560
*ING Groep 27,494 760,622
Lloyds TSB Group 87,256 718,958
Morgan Stanley 13,900 680,544
National Australia Bank 27,457 652,003
Oversea-Chinese Banking 41,000 341,913
*Societe Generale Class A 5,086 499,788
Wachovia 15,700 796,775
Washington Mutual 19,700 813,610
-----------
12,485,367
-----------
Health Care - 8.30%
Abbott Laboratories 17,000 820,080
Baxter International 21,100 778,590
Bristol-Myers Squibb 33,400 847,024
Eisai 7,900 267,883
GlaxoSmithKline 34,722 858,606
Merck 25,500 827,220
Pfizer 31,100 867,691
Takeda Pharmaceutical 10,100 486,736
Wyeth 19,000 824,030
-----------
6,577,860
-----------
Number of Market
Shares Value (U.S.$)
COMMON STOCK (continued)
Health Care REITs - 0.12%
#Medical Properties Trust 144A 9,400 $ 94,470
-----------
94,470
-----------
Industrials - 4.40%
Boeing 14,000 894,600
Brambles Industries 71,495 390,347
*Compagnie de Saint-Gobain 12,800 736,736
*+Foster Wheeler 1,828 27,059
Union Pacific 12,400 830,304
Wesfarmers 1,686 46,745
West Japan Railway 63 215,370
Wharf Holdings Limited 106,000 346,732
-----------
3,487,893
-----------
Industrial REITs - 0.93%
AMB Property 18,300 737,673
-----------
737,673
-----------
Information Technology - 2.99%
Hewlett-Packard 37,200 837,372
International Business Machines 10,500 793,275
+Xerox 54,200 735,494
-----------
2,366,141
-----------
Lodging - 1.63%
InterContinental Hotels Group ADR 36,718 425,962
+Jameson Inns 400,000 864,000
-----------
1,289,962
-----------
Mall REITs - 4.29%
General Growth Properties 73,110 2,846,172
*Simon Property Group 8,000 549,760
-----------
3,395,932
-----------
Manufactured Housing REITs - 0.20%
*Sun Communities 4,400 158,400
-----------
158,400
-----------
Materials - 3.70%
Amcor 78,646 402,608
Bayer 22,875 768,525
BOC Group 10,290 188,081
*+Lanxess 2,288 48,533
Rio Tinto 18,880 560,169
UPM-Kymmene 13,900 268,394
Weyerhaeuser 10,900 699,234
-----------
2,935,544
-----------
Mortgage REITs - 4.98%
*American Home Mortgage Investment 28,000 911,680
Fieldstone Investment 21,200 283,232
*Friedman Billings Ramsey Group Class A 25,940 338,517
+#KKR Financial 144A 49,200 504,300
*MortgageIT Holdings 52,100 883,095
+#Peoples Choice 144A 47,300 473,000
Saxon Capital 32,400 548,532
-----------
3,942,356
-----------
Multifamily REITs - 0.30%
*Education Realty Trust 13,700 235,229
-----------
235,229
-----------
3
STATEMENT DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS (CONTINUED)
Number of Market
Shares Value (U.S.$)
COMMON STOCK (continued)
Office/Industrial REITs - 2.11%
*Duke Realty 26,000 $ 802,620
Liberty Property Trust 21,042 868,824
-----------
1,671,444
-----------
Office REITs - 1.92%
*Prentiss Properties Trust 21,308 735,126
*Reckson Associates Realty 25,000 789,750
-----------
1,524,876
-----------
Retail Strip Centers REITs - 0.90%
Ramco-Gershenson Properties Trust 25,600 710,400
-----------
710,400
-----------
Telecommunication Services - 5.80%
*+Fairpoint Communications 49,000 762,930
SBC Communications 34,500 806,610
*Telecom Corporation of New Zealand 189,000 792,620
*Telefonica 45,877 768,401
Telstra 172,136 652,456
Verizon Communications 22,900 810,201
-----------
4,593,218
-----------
Utilities - 5.64%
*Electrabel 1,376 605,720
Energy East 28,900 809,200
FPL Group 20,100 817,065
Hong Kong Electric 103,000 455,404
Iberdrola 29,226 746,315
RWE 16,967 1,037,757
-----------
4,471,461
-----------
TOTAL COMMON STOCK (cost $49,955,237) 64,004,439
-----------
CONVERTIBLE PREFERRED STOCK - 0.89%
Environmental Services - 0.23%
Allied Waste Industries 6.25% 4,000 181,240
-----------
181,240
-----------
Financial - 0.18%
*Chubb 7.00% 4,000 124,120
Lehman Brothers Holdings 6.25% 750 19,875
-----------
143,995
-----------
Telecommunications - 0.48%
Lucent Technologies Capital Trust I 7.75% 400 377,600
-----------
377,600
-----------
TOTAL CONVERTIBLE PREFERRED STOCK
(cost $844,750) 702,835
-----------
PREFERRED STOCK - 3.36%
Leisure, Lodging & Entertainment - 0.52%
WestCoast Hospitality Capital Trust 9.50% 15,700 414,794
-----------
414,794
-----------
Lodging REITs - 1.14%
Equity Inns Series B 8.75% 10,000 265,000
LaSalle Hotel Properties 10.25% 23,500 637,908
-----------
902,908
-----------
Office REITs - 0.72%
*SL Green Realty 7.625% 22,000 567,875
-----------
567,875
-----------
Number of Market
Shares Value (U.S.$)
PREFERRED STOCK (continued)
Retail Strip Centers REITs - 0.38%
Ramco-Gershenson Properties 9.50% 11,500 $ 305,095
-----------
305,095
-----------
Utilities - 0.60%
Public Service Enterprise Group 10.25% 6,800 473,620
-----------
473,620
-----------
TOTAL PREFERRED STOCK (cost $2,415,584) 2,664,292
-----------
Principal
Amount(degree)
COMMERCIAL MORTGAGE-BACKED SECURITIES - 0.12%
#Meristar Commercial Mortgage Trust
Series 1999-C1 C 144A 8.29% 3/3/16 USD 85,000 93,389
-----------
TOTAL COMMERCIAL MORTGAGE-BACKED
SECURITIES (cost $94,768) 93,389
-----------
CONVERTIBLE BONDS- 2.08%
Capital Goods - Manufacturing - 0.16%
#Tyco International Group
144A 2.75% 1/15/18 USD 100,000 128,750
-----------
128,750
-----------
Consumer Cyclical - 1.04%
Meristar Hospitality 9.50% 4/1/10 USD 300,000 380,624
#Playboy Enterprises
144A 3.00% 3/15/25 USD 160,000 146,400
#Regal Entertainment Group
144A 3.75% 5/15/08 USD 130,000 173,225
#Saks 144A 2.00% 3/15/24 USD 125,000 127,344
-----------
827,593
-----------
Technology - 0.50%
#Mercury Interactive
144A 4.75% 7/1/07 USD 275,000 268,469
#Sybase Convertible
144A 1.75% 2/22/25 USD 125,000 125,469
-----------
393,938
-----------
Transportation - 0.05%
#ExpressJet Holdings
144A 4.25% 8/1/23 USD 50,000 37,000
-----------
37,000
-----------
Utilities - 0.33%
*#CenterPoint Energy
144A 3.75% 5/15/23 USD 200,000 228,250
*++Mirant 2.50% 6/15/21 USD 40,000 30,800
-----------
259,050
-----------
TOTAL CONVERTIBLE BONDS (cost $1,496,313) 1,646,331
-----------
CORPORATE BONDS- 21.10%
Capital Goods - Manufacturing - 1.41%
Allied Waste North America
9.25% 9/1/12 USD 117,000 126,360
Anchor Glass 11.00% 2/15/13 USD 85,000 68,850
*Armor Holdings 8.25% 8/15/13 USD 100,000 107,738
Casella Waste Systems 9.75% 2/1/13 USD 80,000 86,000
*Cenveo 9.625% 3/15/12 USD 40,000 43,100
Foster Wheeler 10.359% 9/15/11 USD 45,000 46,463
Geo Subordinate 11.00% 5/15/12 USD 95,000 95,950
4
STATEMENT DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS (CONTINUED)
Principal Market
Amount(degree) Value (U.S.$)
CORPORATE BONDS (continued)
Capital Goods - Manufacturing (continued)
*#Graham Packaging
144A 9.875% 10/15/14 USD 100,000 $ 99,750
#IMCO Recycling 144A 9.00% 11/15/14 USD 60,000 63,000
Interline Brands 11.50% 5/15/11 USD 120,000 132,599
?Mueller Holdings 14.75% 4/15/14 USD 110,000 80,025
*#Park-Ohio Industries
144A 8.375% 11/15/14 USD 45,000 37,350
Radnor Holdings
o9.891% 4/15/09 USD 50,000 50,250
11.00% 3/15/10 USD 35,000 25,813
Trimas 9.875% 6/15/12 70,000 57,050
-----------
1,120,298
-----------
Chemicals - 0.59%
*#Huntsman International
144A 7.375% 1/1/15 USD 85,000 84,788
Lyondell Chemical 9.875% 5/1/07 USD 55,000 56,650
*Nalco 8.875% 11/15/13 USD 55,000 57,750
Rhodia
*8.875% 6/1/11 USD 50,000 48,250
10.25% 6/1/10 USD 50,000 53,500
++Solutia 6.72% 10/15/37 USD 150,000 115,500
Witco 6.875% 2/1/26 USD 50,000 48,250
-----------
464,688
-----------
Consumer Cyclical - 1.20%
#Accuride 144A 8.50% 2/1/15 USD 95,000 87,875
*Advanced Accessory Systems
10.75% 6/15/11 USD 50,000 37,750
++Avado Brands 9.75% 6/1/06 USD 45,000 6,525
*#Carrols 144A 9.00% 1/15/13 USD 80,000 81,600
#Dana 144A 5.85% 1/15/15 USD 20,000 17,100
Denny's 10.00% 10/1/12 USD 90,000 91,125
#Gaylord Entertainment
144A 6.75% 11/15/14 USD 65,000 62,725
Interface 10.375% 2/1/10 USD 75,000 80,625
#Landry's Restaurant
144A 7.50% 12/15/14 USD 125,000 116,875
#Lone Star Industries
144A 8.85% 6/15/05 USD 60,000 60,000
Nortek 8.50% 9/1/14 USD 30,000 27,000
O'Charleys 9.00% 11/1/13 USD 95,000 100,700
Royal Caribbean Cruises
7.25% 3/15/18 USD 85,000 88,825
?Town Sports International
11.00% 2/1/14 USD 55,000 31,900
#Uno Restaurant 144A 10.00% 2/15/11 USD 65,000 64,025
++Venture Holdings 12.00% 6/1/09 USD 95,000 119
-----------
954,769
-----------
Consumer Non-Cyclical - 1.09%
#Commonwealth Brands
144A 10.625% 9/1/08 USD 95,000 99,988
Corrections Corporation of America
7.50% 5/1/11 USD 95,000 97,969
Cott Beverages 8.00% 12/15/11 USD 100,000 106,500
Great Atlantic & Pacific Tea
7.75% 4/15/07 USD 60,000 61,650
#Knowledge Learning
144A 7.75% 2/1/15 USD 65,000 61,425
#Le-Natures 144A 10.00% 6/15/13 USD 115,000 119,024
*National Beef Packing 10.50% 8/1/11 USD 70,000 67,550
CORPORATE BONDS (continued)
Consumer Non-Cyclical (continued)
Principal Market
Amount(degree) Value (U.S.$)
Pilgrim's Pride 9.625% 9/15/11 USD 85,000 $ 93,500
*Pinnacle Foods 8.25% 12/1/13 USD 40,000 34,400
#Rite Aid 144A 7.50% 1/15/15 USD 50,000 46,250
True Temper Sports 8.375% 9/15/11 USD 80,000 72,800
----------
861,056
----------
Energy - 1.27%
Bluewater Finance 10.25% 2/15/12 USD 80,000 84,000
#Chesapeake Energy
144A 6.625% 1/15/16 USD 40,000 41,550
CMS Energy 9.875% 10/15/07 USD 50,000 54,500
#Dynegy Holdings
144A 10.125% 7/15/13 USD 140,000 156,099
El Paso Natural Gas 7.625% 8/1/10 USD 45,000 47,705
*El Paso Production Holding
7.75% 6/1/13 USD 115,000 119,888
=#Geophysique 144A 7.50% 5/15/15 USD 30,000 30,150
#Hilcorp Energy I 144A 10.50% 9/1/10 USD 90,000 99,450
#Inergy Finance 144A 6.875% 12/15/14 USD 50,000 47,000
Midland Funding II 11.75% 7/23/05 USD 10,325 10,471
Petroleum Geo-Services
8.00% 11/5/06 USD 11,840 12,121
10.00% 11/5/10 USD 109,981 122,629
oSecunda International 11.15% 9/1/12 USD 55,000 52,250
*Tennessee Gas Pipeline
8.375% 6/15/32 USD 70,000 81,510
Whiting Petroleum 7.25% 5/1/13 USD 50,000 50,000
----------
1,009,323
----------
Finance - 4.85%
#America Real Estate
144A 7.125% 2/15/13 USD 70,000 68,950
BF Saul REIT 7.50% 3/1/14 USD 25,000 26,000
E Trade Financial 8.00% 6/15/11 USD 115,000 120,750
#Farmers Exchange Capital
144A 7.20% 7/15/48 USD 55,000 59,067
KFW International Finance
1.75% 3/23/10 JPY 105,000,000 1,030,926
LaBranche & Company
11.00% 5/15/12 USD 75,000 81,000
Oesterrichische Kontrollbank
1.80% 3/22/10 JPY 115,000,000 1,132,131
Rentenbank 1.375% 4/25/13 JPY 129,000,000 1,230,542
Tanger Properties 9.125% 2/15/08 USD 85,000 92,013
----------
3,841,379
----------
Forest/Paper Products - 1.62%
Abitibi-Consolidated 6.95% 12/15/06 USD 70,000 70,700
#Boise Cascade 144A 7.125% 10/15/14 USD 100,000 95,750
Bowater 9.50% 10/15/12 USD 120,000 129,600
Fort James 7.75% 11/15/23 USD 190,000 218,024
MDP Acquisitions 9.625% 10/1/12 USD 115,000 112,988
#NewPage 144A 10.00% 5/1/12 USD 50,000 49,125
Norske Skog 8.625% 6/15/11 USD 105,000 107,625
#Port Townsend Paper
144A 12.00% 4/15/11 USD 100,000 97,500
Potlatch 12.50% 12/1/09 USD 95,000 118,869
Smurfit Capital Funding
7.50% 11/20/25 USD 90,000 81,450
Stone Container 9.75% 2/1/11 USD 105,000 111,563
5
STATEMENT DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS (CONTINUED)
Principal Market
Amount(degree) Value (U.S.$)
CORPORATE BONDS (continued)
Forest/Paper Products (continued)
Tembec Industries 8.625% 6/30/09 USD 115,000 $ 93,725
----------
1,286,919
----------
Gaming - 0.95%
Ameristar Casinos 10.75% 2/15/09 USD 140,000 153,650
Boyd Gaming 9.25% 8/1/09 USD 165,000 174,281
Caesars Entertainment 9.375% 2/15/07 USD 35,000 37,538
Mandalay Resort Group 10.25% 8/1/07 USD 5,000 5,513
MGM MIRAGE 9.75% 6/1/07 USD 55,000 59,744
Penn National Gaming 8.875% 3/15/10 USD 185,000 199,337
Wheeling Island Gaming
10.125% 12/15/09 USD 115,000 122,475
----------
752,538
----------
Health Care - 0.57%
NDCHealth 10.50% 12/1/12 USD 70,000 74,725
Universal Hospital Services
10.125% 11/1/11 USD 40,000 40,600
*US Oncology 10.75% 8/15/14 USD 100,000 109,500
Vangaurd Health 9.00% 10/1/14 USD 95,000 103,075
#Ventas Realty 144A 7.125% 6/1/15 USD 45,000 46,125
*#Warner Chilcott 144A 8.75% 2/1/15 USD 80,000 77,600
----------
451,625
----------
Media - 1.80%
*JAdelphia Communications
8.125% 7/15/06 USD 110,000 95,150
American Media Operation
10.25% 5/1/09 USD 40,000 41,300
#Charter Communications
144A 5.875% 11/16/09 USD 40,000 24,800
Charter Communications Holdings
10.75% 10/1/09 USD 295,000 230,100
*CSC Holdings 10.50% 5/15/16 USD 145,000 159,500
Dex Media West 9.875% 8/15/13 USD 20,000 22,950
Insight Midwest 10.50% 11/1/10 USD 165,000 176,550
*Lodgenet Entertainment 9.50% 6/15/13 USD 115,000 124,200
Mediacom Broadband 11.00% 7/15/13 USD 120,000 130,500
Nextmedia Operating 10.75% 7/1/11 USD 125,000 136,875
Sheridan Acquisition 10.25% 8/15/11 USD 40,000 41,200
Warner Music Group 7.375% 4/15/14 USD 120,000 120,000
XM Satellite Radio 12.00% 6/15/10 USD 110,000 123,475
----------
1,426,600
----------
Metals/Mining - 0.10%
*#Novelis 144A 7.25% 2/15/15 USD 80,000 78,800
----------
78,800
----------
Retail - 0.06%
*Adesa 7.625% 6/15/12 USD 50,000 50,000
----------
50,000
----------
Technology - 0.32%
#Magnachip Semiconductor
144A 8.00% 12/15/14 USD 85,000 74,375
Sanmina-SCI 10.375% 1/15/10 USD 70,000 77,700
#Telcordia Technologies
144A 10.00% 3/15/13 USD 115,000 101,200
----------
253,275
----------
Telecommunications - 1.47%
Alaska Communications Systems
Holdings 9.875% 8/15/11 USD 75,000 79,313
Principal Market
Amount(degree) Value (U.S.$)
CORPORATE BONDS (continued)
Telecommunications (continued)
American Cellular 10.00% 8/1/11 USD 40,000 $ 39,200
American Tower 7.125% 10/15/12 USD 10,000 10,413
*Centennial Cellular Operating
10.125% 6/15/13 USD 65,000 72,881
*Cincinnati Bell 8.375% 1/15/14 USD 130,000 129,349
?Inmarsat Finance 10.375% 11/15/12 USD 115,000 85,675
iPCS 11.50% 5/1/12 USD 40,000 44,000
#Iwo Escrow 144A
o6.891% 1/15/12 USD 15,000 15,000
?10.75% 1/15/15 USD 15,000 9,600
MCI
6.908% 5/1/07 USD 50,000 50,938
7.688% 5/1/09 USD 120,000 126,000
*MetroPCS 10.75% 10/1/11 USD 45,000 53,897
#New Skies Satellite
144A 9.125% 11/1/12 USD 35,000 34,825
PanAmSat 9.00% 8/15/14 USD 60,000 65,550
#Qwest 144A 7.875% 9/1/11 USD 25,000 26,063
#Qwest Services
144A 13.50% 12/15/10 USD 110,000 125,950
Rural Cellular
9.625% 5/15/08 USD 50,000 46,250
9.875% 2/1/10 USD 20,000 19,850
*oUS LEC 11.89% 10/1/09 USD 45,000 46,350
US Unwired 10.00% 6/15/12 USD 5,000 5,500
#Valor Telecom 144A 7.75% 2/15/15 USD 80,000 78,200
----------
1,164,804
----------
Textile & Apparel - 0.14%
Warnaco 8.875% 6/15/13 USD 100,000 109,500
----------
109,500
----------
Transportation - 2.49%
Deutsche Bahn Finance
1.65% 12/1/14 JPY 129,000,000 1,222,559
?#H-Lines Finance Holding
144A 11.00% 4/1/13 USD 115,000 89,700
#Horizon Lines 144A 9.00% 11/1/12 USD 50,000 52,813
Kansas City Southern Railway
9.50% 10/1/08 USD 150,000 164,438
OMI 7.625% 12/1/13 USD 95,000 94,525
Seabulk International 9.50% 8/15/13 USD 100,000 113,750
Stena 9.625% 12/1/12 USD 175,000 192,063
Ultrapetrol 9.00% 11/24/14 USD 45,000 40,725
----------
1,970,573
----------
Utilities - 1.17%
Avista 9.75% 6/1/08 USD 100,000 113,862
Calpine
8.25% 8/15/05 USD 45,000 43,425
10.50% 5/15/06 USD 30,000 25,350
o#Calpine 144A 8.891% 7/15/07 USD 68,850 53,359
Elwood Energy 8.159% 7/5/26 USD 43,841 49,649
Midwest Generation
8.30% 7/2/09 USD 100,000 104,000
8.75% 5/1/34 USD 90,000 100,800
++Mirant Americas Generation
7.625% 5/1/06 USD 80,000 92,600
#NRG Energy 144A 8.00% 12/15/13 USD 61,000 64,660
Orion Power Holdings 12.00% 5/1/10 USD 50,000 60,000
PSE&G Energy Holdings
7.75% 4/16/07 USD 50,000 51,750
STATEMENT DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS (CONTINUED)
Principal Market
Amount(degree) Value (U.S.$)
CORPORATE BONDS (continued)
Utilities (continued)
Reliant Energy 9.50% 7/15/13 USD 50,000 $ 54,750
#Texas Genco 144A 6.875% 12/15/14 USD 60,000 61,950
#USGen New England
144A 7.459% 1/2/15 USD 50,000 48,250
----------
924,405
----------
TOTAL CORPORATE BONDS (cost $16,713,939) 16,720,552
----------
REGIONAL AGENCY - 1.96%
Australia - 0.78%
Queensland Treasury
6.00% 6/14/11 AUD 549,000 428,810
6.00% 8/14/13 AUD 238,000 187,509
----------
616,319
----------
Canada - 1.18%
Ontario Province
1.875% 1/25/10 JPY 73,000,000 719,492
5.375% 12/2/12 CAD 245,000 212,550
----------
932,042
----------
TOTAL REGIONAL AGENCY (cost $1,534,054) 1,548,361
----------
SOVEREIGN AGENCY - 3.39%
Canada - 0.55%
Canada Housing Trust No. 1
3.75% 3/15/10 CAD 538,000 433,053
----------
433,053
----------
Japan - 2.84%
Development Bank of Japan
1.75% 6/21/10 JPY 105,000,000 1,027,358
Japan Finance for Municipal
Enterprises 1.35% 11/26/13 JPY 129,000,000 1,222,258
----------
2,249,616
----------
TOTAL SOVEREIGN AGENCY (cost $2,756,861) 2,682,669
----------
SOVEREIGN DEBT - 12.91%
Austria - 0.96%
Republic of Austria 5.25% 1/4/11 EUR 546,000 757,965
----------
757,965
----------
Belgium - 0.70%
Kingdom of Belgium 5.75% 3/28/08 EUR 413,000 555,624
----------
555,624
----------
France - 0.97%
Government of France
3.50% 4/25/15 EUR 290,000 363,112
4.00% 4/25/13 EUR 309,000 404,594
----------
767,706
----------
Germany - 2.96%
Deutschland Republic
4.50% 1/4/13 EUR 562,000 760,476
4.75% 7/4/08 EUR 480,000 632,353
5.00% 7/4/11 EUR 404,000 557,080
6.25% 1/4/24 EUR 237,000 392,706
----------
2,342,615
----------
Principal Market
Amount(degree) Value (U.S.$)
SOVEREIGN DEBT (continued)
Italy - 0.67%
Republic of Italy 0.65% 3/20/09 JPY 56,600,000 $ 530,325
----------
530,325
----------
Netherlands - 0.68%
Netherlands Government
5.75% 2/15/07 EUR 411,000 536,572
----------
536,572
----------
Norway - 0.26%
Kingdom of Norway 6.00% 5/16/11 NOK 1,169,000 207,238
----------
207,238
----------
Poland - 2.08%
Poland Government
6.00% 5/24/09 PLZ 2,628,000 797,301
6.25% 10/24/15 PLZ 2,654,000 853,626
----------
1,650,927
----------
Sweden - 1.58%
Swedish Government
5.00% 12/1/20 SEK 5,405,000 868,220
6.75% 5/5/14 SEK 2,250,000 386,813
----------
1,255,033
----------
United Kingdom - 2.05%
U.K. Treasury
4.00% 3/7/09 GBP 471,950 851,239
4.75% 6/7/10 GBP 229,000 425,294
4.75% 9/7/15 GBP 186,000 350,227
----------
1,626,760
----------
TOTAL SOVEREIGN DEBT (cost $10,264,107) 10,230,765
----------
SUPRANATIONAL - 1.31%
European Investment Bank
4.00% 10/15/37 EUR 339,000 420,269
Inter-American Development Bank
1.90% 7/8/09 JPY 63,000,000 620,327
----------
TOTAL SUPRANATIONAL (cost $1,037,666) 1,040,596
----------
U.S. TREASURY OBLIGATIONS - 3.51%
*^Treasury Bill 2.660% 7/7/05 USD 2,790,000 2,782,608
----------
TOTAL U.S. TREASURY OBLIGATIONS
(cost $2,782,608) 2,782,608
----------
Number of
Shares
CALL OPTIONS - 0.04%
European Monetary Unit Call Option
vs Japanese Yen 1,547,770 248
U.S. Dollar Call Option vs
European Monetary Unit 1,796,300 33,725
----------
TOTAL CALL OPTIONS (cost $19,470) 33,973
----------
WARRANTS - 0.00%
+#Solutia 144A, exercise price $7.59,
expiration date 7/15/09 130 0
----------
TOTAL WARRANTS (cost $11,059) 0
----------
7
STATEMENT DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS (CONTINUED)
Principal Market
Amount(degree) Value (U.S.$)
TOTAL MARKET VALUE OF SECURITIES BEFORE
SECURITIES LENDING COLLATERAL - 131.46%
(cost $89,926,416) $104,150,810
------------
SECURITIES LENDING COLLATERAL** - 13.72%
Short-Term Investments
Abbey National 3.13% 1/13/06 USD 230,763 $ 230,763
Australia New Zealand 3.08% 6/23/06 USD 311,714 311,714
Bank of New York 3.06% 4/4/06 USD 249,371 249,371
Bank of the West 3.06% 3/2/06 USD 311,776 311,714
Barclays London 3.10% 7/21/05 USD 311,723 311,718
Barclays New York 3.12% 6/1/05 USD 31,166 31,166
Bayerische Landesbank
3.08% 6/30/06 USD 311,646 311,714
Bear Stearns
3.14% 1/17/06 USD 62,341 62,375
3.15% 11/30/05 USD 311,557 311,714
Beta Finance 3.08% 4/18/06 USD 311,740 311,683
Citigroup Global Markets
3.10% 6/1/05 USD 2,497,166 2,497,166
3.13% 6/7/05 USD 336,651 336,651
Credit Suisse First Boston New York
3.07% 4/18/06 USD 336,651 336,651
3.10% 12/29/05 USD 65,445 65,464
Deutsche Bank London 3.10% 7/11/05 USD 249,374 249,371
Goldman Sachs 3.20% 5/31/06 USD 342,851 342,885
Lehman Holdings 3.14% 12/23/05 USD 311,768 311,995
Marshall & Ilsley Bank 3.05% 12/29/05 USD 311,738 311,728
Merrill Lynch Mortgage Capital
3.16% 7/12/05 USD 311,714 311,714
Morgan Stanley
3.21% 6/30/06 USD 62,282 62,343
3.24% 5/31/06 USD 31,153 31,171
National City Bank Cleveland
3.06% 1/23/06 USD 355,398 355,373
Pfizer 3.05% 6/30/06 USD 299,245 299,245
Proctor & Gamble 2.93% 6/30/06 USD 311,714 311,714
Royal Bank of Canada 3.05% 6/27/05 USD 311,706 311,706
Royal Bank of Scotland 3.06% 6/30/06 USD 311,680 311,714
Sigma Finance 3.06% 9/30/05 USD 293,014 292,981
Societe Generale New York
3.06% 6/14/05 USD 281,566 281,554
Sun Trust Bank 3.08% 8/5/05 USD 155,848 155,848
Wal Mart Stores 3.03% 6/21/05 USD 372,740 372,118
Washington Mutual Bank 3.10% 7/8/05 USD 311,708 311,714
Wells Fargo 3.06% 6/30/06 USD 311,714 311,714
Wilmington Trust Company
2.96% 6/3/05 USD 249,459 249,458
------------
TOTAL SECURITIES LENDING COLLATERAL
(cost $10,866,210) 10,866,210
------------
TOTAL MARKET VALUE OF SECURITIES - 145.18%
(cost $100,792,626) $115,017,020(C)
OBLIGATION TO RETURN SECURITIES
LENDING COLLATERAL - (13.72%)** (10,866,210)
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 0.09% 73,050
BORROWING UNDER LINE OF CREDIT - (31.55%) (25,000,000)
-------------
NET ASSETS APPLICABLE TO 5,985,582 SHARES OUTSTANDING;
EQUIVALENT TO $13.24 PER SHARE - 100.00% $79,223,860
-------------
COMPONENTS OF NET ASSETS AT MAY 31, 2005:
Common stock, $0.01 par value, 500,000,000
shares authorized to the Fund $ 64,775,210
Accumulated net realized gain on investments 200,010
Net unrealized appreciation of investments
and foreign currencies 14,248,640
-------------
Total net assets $ 79,223,860
-------------
?Step Coupon Bond. Indicates security that has a zero coupon that remains in
effect until a predetermined date at which time the stated interest rate
becomes effective.
#Security exempt from registration under Rule 144A of the Securities Act of
1933. See Note 10 in "Notes to Financial Statements."
+Non-income producing security for the period ended May 31, 2005.
++Non-income producing security. Security is currently in default.
JSecurity is currently in default. The issue has missed the maturity date.
Bankruptcy proceedings are in the process to determine distribution of assets.
The date listed is the estimated of when the proceedings will be finalized.
^U.S. Treasury bills are traded on a discount basis; the interest rate shown
is the yield at the time of purchase.
oVariable rate notes. The interest rate shown is the rate as of May 31, 2005.
*Fully or partially on loan.
**See Note 8 in "Notes to Financial Statements."
(C)Includes $10,460,644 of securities loaned.
vSecurities have been classified by type of business. Classification by country
of origin has been presented in Note 9 in "Notes to Financial Statements."
=Security is being fair valued in accordance with the Fund's fair valuation
policy. See Note 1 in "Notes to Financial Statements." At May 31, 2005, one
security was fair valued which represented 0.04% of the Fund's net assets.
(degree)Principal amount shown is stated in the currency in which each foreign
bond is denominated.
AUD - Australian Dollar
CAD - Canadian Dollar
EUR - European Monetary Unit
GBP - British Pound Sterling
JPY - Japanese Yen
NOK - Norwegian Kroner
PLZ - Polish Zloty
SEK - Swedish Kroner
USD - U.S. Dollar
SUMMARY OF ABBREVIATIONS
ADR - American Depositary Receipt
REIT - Real Estate Investment Trust
8
STATEMENT DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
OF NET ASSETS (CONTINUED)
FOREIGN CURRENCY EXCHANGE CONTRACTS(1)
The following forward foreign currency exchange contracts were outstanding at
May 31, 2005:
Unrealized
Contracts to Receive (Deliver) In Exchange For Settlement Date Appreciation
- ------------------------------ --------------- --------------- ------------
589,367 European Monetary Units US $ (725,326) 6/28/05 $ 597
(5,095,940) Polish Zloty US $1,537,108 6/28/05 36,451
-------
$37,048
=======
(1) See Note 7 in "Notes to Financial Statements."
See accompanying notes
9
STATEMENT DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
OF OPERATIONS Six Months Ended May 31, 2005 (Unaudited)
INVESTMENT INCOME:
Dividends $1,353,236
Interest 880,321
Securities lending income 22,404
Foreign tax withheld (56,803) $ 2,199,158
---------- -----------
EXPENSES:
Management fees 370,757
Accounting and administration expenses 50,000
Legal and professional fees 42,460
Reports to shareholders 30,551
Custodian fees 14,958
Transfer agent fees 13,200
NYSE fees 12,498
Taxes (other than taxes on income) 8,540
Pricing fees 7,442
Directors' fees 1,769
Registration fees 188
Other 2,292
----------
Total operating expenses (before interest expense) 554,655
Interest expense 393,409
-----------
Total operating expenses (after interest expense) 948,064
-----------
NET INVESTMENT INCOME 1,251,094
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain on:
Investments 2,817,198
Options Written 9,419
Foreign currencies 527,272
-----------
Net realized gain 3,353,889
Net change in unrealized appreciation/depreciation of investments and foreign currencies (3,829,230)
-----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCIES (475,341)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 775,753
===========
See accompanying notes
10
STATEMENTS DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
OF CHANGES IN NET ASSETS
Six Months
Ended Year
5/31/05 Ended
(Unaudited) 11/30/04
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 1,251,094 $ 2,492,195
Net realized gain on investments and foreign currencies 3,353,889 5,658,703
Net change in unrealized appreciation/depreciation of investments and foreign currencies: (3,829,230) 7,225,053
----------- -----------
Net increase in net assets resulting from operations 775,753 15,375,951
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM (SEE NOTE 4):
Net investment income (1,904,292) (4,880,207)
Net realized gains -- (867,345)
Return of capital (968,909) --
----------- -----------
(2,873,201) (5,747,552)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS (2,097,448) 9,628,399
NET ASSETS:
Beginning of period 81,321,308 71,692,909
----------- -----------
End of period (there was no undistributed net investment income at either period end) $79,223,860 $81,321,308
=========== ===========
See accompanying notes
11
STATEMENT DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
OF CASH FLOWS Six Months Ended May 31, 2005 (Unaudited)
NET CASH (INCLUDING FOREIGN CURRENCY) PROVIDED BY OPERATING ACTIVITIES:
Net increase in net assets resulting from operations $ 775,753
-----------
Adjustments to reconcile net increase in net assets from operations to cash provided by operating activities:
Amortization of premium and discount on investments 27,088
Net proceeds from investment transactions 940,930
Net realized gain on investment transactions (2,826,617)
Net realized gain on foreign currencies (527,272)
Net change in unrealized appreciation/depreciation of investments and foreign currencies 3,829,230
Decrease in receivable for investments sold 833,733
Decrease in interest and dividends receivable 104,049
Decrease in payable for investments purchased (786,299)
Increase in interest payable 28,680
Increase in accrued expenses and other liabilities 14,149
-----------
Total adjustments 1,637,671
-----------
Net cash provided by operating activities 2,413,424
-----------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Increase in principal on line of credit --
Cash dividends and distributions paid (2,873,201)
-----------
Net cash used for financing activities (2,873,201)
-----------
Effect of exchange rates on cash (140,846)
-----------
Net decrease in cash (600,623)
Cash at beginning of period 178,201
-----------
Cash (overdraft) at end of period $ (422,422)
===========
Cash paid for interest $ 364,729
===========
See accompanying notes
12
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.
Six Months Year
Ended Ended
5/31/05(5) 11/30/04 11/30/03 11/30/02(3) 11/30/01 11/30/00
(Unaudited)
NET ASSET VALUE, BEGINNING OF PERIOD $13.590 $11.980 $ 9.940 $11.170 $11.770 $13.920
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(4) 0.229 0.416 0.554 0.499 0.620 0.700
Net realized and unrealized gain (loss) on investments
and foreign currencies (0.099) 2.154 2.570 (0.260) 0.280 (1.350)
------- ------- ------- ------- ------- --------
Total from investment operations 0.130 2.570 3.124 0.239 0.900 (0.650)
------- ------- ------- ------- ------- --------
LESS DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income (0.318) (0.815) (0.918) (0.365) (0.195) (0.530)
Net realized gain on investments -- (0.145) -- -- (0.084) (0.470)
Return of capital (0.162)(6) -- (0.166) (1.104) (1.221) (0.500)
------- ------- ------- ------- ------- --------
Total dividends and distributions (0.480) (0.960) (1.084) (1.469) (1.500) (1.500)
------- ------- ------- ------- ------- --------
NET ASSET VALUE, END OF PERIOD $13.240 $13.590 $11.980 $9.940 $11.170 $11.770
======= ======= ======= ======= ======= ========
MARKET VALUE, END OF PERIOD $12.790 $12.300 $11.900 $10.400 $12.400 $10.380
======= ======= ======= ======= ======= ========
TOTAL RETURN BASED ON:(1)
Market value 7.99% 12.01% 25.92% (5.49%) 34.52% 0.29%
Net asset value 1.18% 22.92% 32.63% 0.28% 6.91% (4.04%)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $79,224 $81,321 $71,693 $59,523 $66,870 $70,420
Ratio of expenses to average net assets 2.34% 1.92% 2.04% 2.26% 3.31% 3.45%
Ratio of expenses to adjusted average net assets
(before interest expense)(2) 1.05% 0.98% 1.08% 1.06% 1.10% 1.04%
Ratio of interest expense to adjusted average net assets(2) 0.74% 0.46% 0.46% 0.64% 1.35% 1.62%
Ratio of net investment income to average net assets 3.08% 3.31% 5.14% 4.69% 5.18% 5.34%
Ratio of net investment income to adjusted average
net assets(2) 2.36% 2.48% 3.88% 3.53% 3.84% 4.11%
Portfolio turnover 96% 78% 99% 69% 47% 43%
LEVERAGE ANALYSIS:
Debt outstanding at end of period at par (000 omitted) $25,000 $25,000 $21,000 $21,000 $25,000 $25,000
Average daily balance of debt outstanding (000 omitted) $25,000 $24,410 $21,000 $21,603 $25,000 $25,000
Average daily balance of shares outstanding (000 omitted) 5,986 5,986 5,986 5,986 5,986 6,389
Average debt per share $4.18 $4.08 $3.51 $3.61 $4.18 $3.91
Asset coverage per $1,000 of debt outstanding at end
of period $4,169 $4,253 $4,414 $3,834 $3,675 $3,817
(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 purpose 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
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) As required, effective December 1, 2001, the Fund adopted the provisions of
the AICPA Audit and Accounting Guide for Investment Companies that requires
amortization of all premiums and discounts on debt securities. The effect of
this change for the year ended November 30, 2002 was a decrease in net
investment income per share of $0.024, an increase in net realized and
unrealized gain (loss) per share of $0.024, a decrease in the ratio of net
investment income to average net assets of 0.23%, and a decrease in the
ratio of net investment income to adjusted net assets of 0.17%. Per share
data and ratios for the periods prior to December 1, 2001 have not been
restated to reflect this change in accounting.
(4) The average shares outstanding method has been applied for per share
information.
(5) Ratios and portfolio turnover have been annualized and total return has not
been annualized.
(6) The amount is an estimated return of capital. The actual determination of
the return of capital, if any, can be made only at fiscal year end. For more
information on dividends and distributions, see Note 4 in "Notes to
Financial Statements."
See accompanying notes
13
DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
NOTES May 31, 2005 (Unaudited)
TO FINANCIAL STATEMENTS
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 under the symbol DGF.
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 U.S. generally accepted
accounting principles and are consistently followed by the Fund.
Security Valuation - Equity securities, except those traded on the Nasdaq Stock
Market, Inc. (NASDAQ), 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. Securities traded on the NASDAQ are valued in accordance with the NASDAQ
Official Closing Price, which may not be the last sales price. 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
normally valued at the last quoted sales price before the Fund is valued. If on
a particular day a security does not trade, then the mean between the bid and
the asked prices will normally be used. U.S. government and agency securities
are valued at the mean between the bid and asked prices. 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. 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. Other
securities and assets for which market quotations are not readily available are
valued at fair value as determined in good faith under the direction of the
Fund's Board of Directors. In determining whether market quotations are readily
available or fair valuation will be used, various factors will be taken into
consideration, such as market closures, or with respect to foreign securities,
aftermarket trading or significant events after local market trading (e.g.,
government actions or pronouncements, trading volume or volatility on markets,
exchanges among dealers, or news events).
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 - The Fund has a managed distribution policy. Under the policy,
the Fund declares and pays monthly distributions 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.
The current annualized rate is $0.96 per share. The Fund continues to evaluate
its monthly distribution in light of ongoing economic and market conditions and
may change the amount of the monthly distributions in the future.
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. The Fund isolates
that portion of realized 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. For foreign equity securities,
these changes are included in realized gains (losses) on investments. 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
U.S. generally accepted accounting principles 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.
Management fees and some other expenses are paid monthly. 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. Discounts and premiums are amortized to interest income over the lives of
the respective securities. Premiums and discounts on non-convertible securities
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. Distributions received from Real Estate
Investment Trusts are recorded as dividend income on ex-dividend date, subject
to reclassification upon notice of the character of such distributions by the
issuer.
The Fund receives earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. There were no
earnings credits for the six months ended May 31, 2005.
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. Adjusted average weekly
net assets does not include the line of credit liability.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide accounting and administration services. The Fund pays DSC a monthly
fee computed at the annual rate of 0.05% of the Fund's adjusted average weekly
net assets, subject to an annual minimum of $100,000. Effective June 1, 2005,
the Fund will pay DSC a monthly fee computed at the annual rate of 0.04% of the
Fund's adjusted average weekly net assets, without an annual minimum.
At May 31, 2005, the Fund had liabilities payable to affiliates as follows:
Investment management fee payable to DMC $60,778
Accounting and administration fees
and other expenses payable to DSC 30,863
Other expenses payable to DMC and affiliates* 75,040
*DMC, as part of its administration services, pays operating expenses on behalf
of the Fund and is reimbursed on a periodic basis. Such expenses include items
such as printing of shareholder reports, fees for audit, legal and tax
services, stock exchange fees, custodian fees and directors fees.
14
NOTES DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
TO FINANCIAL STATEMENTS (CONTINUED)
2. INVESTMENT MANAGEMENT, ADMINISTRATION AGREEMENTS AND
OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
As provided in the investment management agreement, the Fund bears the cost of
certain legal services expenses, including internal legal services provided to
the Fund by DMC employees. For the six months ended May 31, 2005, the Fund was
charged $2,203 for internal legal services provided by DMC.
Certain officers of DMC and DSC are officers and/or directors the Fund. These
officers and directors are paid no compensation by the Fund.
During the six months ended May 31, 2005, D. Tysen Nutt, Jr., Jordan L. Irving,
Anthony A. Lombardi and Robert A. Vogel, Jr. (the "New Equity Team") were
appointed co-portfolio managers of the Fund. The New Equity Team replaced Nancy
M. Crouse, and will work with Damon Andres with respect to managing the equity
portion of the Fund. The members of the New Team will work with Damon Andres,
Philip R. Perkins and Timothy L. Rabe in making day-to-day decisions for the
Fund.
On June 21, 2005, Zoe Neale and Edward A. Gray (the "New International Team")
were appointed as co-portfolio managers of the Fund. The New International Team
replaced Damon Andres in managing the international equity portion of the Fund.
The New International Team will work with Mr. Andres, Mr. Irving, Mr. Lombardi,
Mr. Nutt, Mr. Perkins, Mr. Rabe and Mr. Vogel in making day-to-day decisions for
the Fund.
3. INVESTMENTS
For the six months ended May 31, 2005, the Fund made purchases of $50,103,057
and sales of $49,158,718 of long-term investment securities other than long-term
U.S. government securities. For six months ended May 31, 2005, the Fund made
purchases of $26,798,356 and sales of $28,829,357 of long-term U.S. government
securities.
At May 31, 2005, the cost of investments for federal income tax purposes has
been estimated since the final tax characteristics cannot be determined until
fiscal year end. At May 31, 2005, the cost of investments was $100,877,651. At
May 31, 2005, the net unrealized appreciation was $14,139,369 of which
$16,132,459 related to unrealized appreciation of investments and $1,993,090
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 U.S. generally
accepted accounting principles. Additionally, gains (losses) on net short-term
gains on sales of investment securities and gains (losses) on foreign currency
transaction are treated as ordinary income for federal income tax purposes. The
distributions made by the Fund during the fiscal year ended November 30, 2004
were in excess of the net investment income earned by the Fund for financial
reporting purposes. This was offset by realized gains and therefore, there was
not a return of capital for federal income tax purposes. The tax character of
dividends and distributions paid during the six months ended May 31, 2005 and
the year ended November 30, 2004 was as follows:
Six Months Year
Ended Ended
5/31/05* 11/30/04
Ordinary income $1,904,292 $5,747,552
Return of capital 968,909 --
*Tax information for the six months ended May 31, 2005 is an estimate and the
tax character of dividends and distributions may be redesignated at fiscal year
end.
The components of net assets are estimated since final tax characteristics
cannot be determined until fiscal year end. As of May 31, 2005, the estimated
components of net assets on a tax basis were as follows:
Shares of beneficial interest $64,775,210
Undistributed long-term capital gains 322,083
Unrealized appreciation of investments
and foreign currencies 14,126,567
-----------
Net assets $79,223,860
===========
The differences between book basis and tax basis components of net assets are
primarily attributable to tax deferral of losses on wash sales and tax treatment
of market discount and premium on debt instruments.
For financial reporting purposes, capital accounts are adjusted to reflect the
tax character of permanent book/tax differences. For the six months ended May
31, 2005, the Fund recorded an estimate of these differences since the final tax
characteristics cannot be determined until fiscal year end. Reclassifications
are primarily due to tax treatment of net operating losses, gain (loss) on
foreign currency transactions and market discounts and premiums on certain debt
instruments. Results of operations and net assets were not affected by these
reclassifications.
Undistributed net investment income $1,585,059
Accumulated realized gain (loss) (648,035)
Paid-in capital (937,024)
For federal income tax purposes, capital loss carryforwards may be carried
forward and applied against future capital gains. Capital loss carryforwards
remaining at November 30, 2004 will expire as follows: $1,675,876 expires in
2010 and $721,813 expires in 2011.
For the six months ended May 31, 2005, the Fund had capital gains of $2,719,772,
which may be offset by the capital loss carryforwards.
5. CAPITAL STOCK
The Fund did not repurchase any shares under the Share Repurchase Program or
have any transactions in common shares during the six months ended May 31, 2005.
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.
On May 19, 2005, the Fund's Board of Directors approved a tender offer for
shares of the Fund's common stock. The tender offer authorized the Fund to
purchase up to 10% of its issued and outstanding shares at a price equal to the
Fund's net asset value at 4:00 p.m. New York City time on July 1, 2005, the
first business day following expiration of the offer. The tender offer commenced
on June 3, 2005 and expired on June 30, 2005. In connection with the tender
offer, the Fund purchased 521,836 shares of capital stock at a total cost of
$7,018,699.
6. LINE OF CREDIT
The Fund has entered into a Line of Credit Agreement with J.P. Morgan Chase for
$25,000,000 that expires on July 19, 2005. At May 31, 2005, the par value of
loans outstanding was $25,000,000 at a variable interest rate of 3.64%. During
the six months ended May 31, 2005, the average daily balance of loans
outstanding was $25,000,000 at a weighted average interest rate of approximately
3.11%. The maximum amount of loans outstanding at any time during the period was
$25,000,000. Effective June 24, 2005, the Fund reduced the amount of loans
outstanding to $23 million in conjunction with the tender offer. Interest on
borrowings is based on market rates in effect at the time of borrowing. The
commitment fee is computed at a rate of 0.15% per annum on the unused balance.
There were no fees charges for the six months ended May 31, 2005. The loan is
collateralized by the Fund's portfolio.
15
NOTES DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
TO FINANCIAL STATEMENTS (CONTINUED)
7. FOREIGN EXCHANGE CONTRACTS
The Fund may enter into forward foreign currency exchange contracts 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.
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 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.
8. SECURITIES LENDING
The Fund, along with other funds in the Delaware Investments Family of Funds,
may lend its securities pursuant to a security lending agreement (Lending
Agreement) with J.P. Morgan Chase. Initial security loans made pursuant to the
Lending Agreement are required to be secured by U.S. government obligations
and/or cash collateral not less than 102% of the market value of the securities
issued in the United States and 105% of the market value of securities issued
outside the United States. With respect to each loan, if the aggregate market
value of the collateral held on any business day is less than the aggregate
market value of the securities which are the subject of such loan, the borrower
will be notified to provide additional collateral not less than the applicable
collateral requirements. Cash collateral received is invested in fixed-income
securities, with a weighted average maturity not to exceed 90 days, rated in one
of the top two tiers by Standard & Poor's Ratings Group or Moody's Investors
Service, Inc. or repurchase agreements collateralized by such securities.
However, in the event of default or bankruptcy by the lending agent, realization
and/or retention of the collateral may be subject to legal proceedings. In the
event the borrower fails to return loaned securities and the collateral received
is insufficient to cover the value of the loaned securities and provided such
collateral shortfall is not the result of investment losses, the lending agent
has agreed to pay the amount of the shortfall to the Fund, or at the discretion
of the lending agent, replace the loaned securities. The Fund continues to
record dividends on the securities loaned and is subject to change in value of
the securities loaned that may occur during the term of the loan. The Fund has
the right under the Lending Agreement to recover the securities from the
borrower on demand. The security lending agent and the borrower retain a portion
of the earnings from the collateral investments. The Fund records security
lending income net of such allocation.
At May 31, 2005, the market value of securities on loan was $10,460,644 for
which cash collateral was received and invested in accordance with the Lending
Agreement. Such investments are presented on the Statement of Net Assets under
the caption "Securities Lending Collateral."
9. GEOGRAPHIC DISCLOSURE
As of May 31, 2005, the Fund's geographic diversification (based on the issuer
of each security's domicile) of its investments portfolio before security
lending collateral was as follows:
Percentage
Country Market Value of Net Assets
- -------- ------------ -------------
United States $60,395,881 76.24%
United Kingdom 8,804,053 11.11%
Germany 5,427,972 6.85%
Australia 3,778,701 4.77%
Netherlands 3,352,575 4.23%
Japan 3,219,605 4.06%
France 2,896,032 3.66%
Spain 1,968,429 2.48%
Austria 1,890,096 2.39%
Canada 1,768,195 2.23%
Belgium 1,660,942 2.10%
Poland 1,650,927 2.08%
Sweden 1,447,096 1.83%
Italy 1,103,741 1.39%
Supranational 1,040,596 1.31%
Hong Kong 802,136 1.01%
New Zealand 792,620 1.00%
South Africa 466,383 0.59%
Norway 368,885 0.47%
Singapore 341,913 0.43%
Finland 268,394 0.34%
Ireland 194,438 0.25%
Luxembourg 128,750 0.16%
Marshall Island 94,525 0.12%
Liberia 88,825 0.11%
Cayman Islands 84,000 0.11%
Korea 74,375 0.09%
Bahamas 40,725 0.05%
------------- -------
Total $104,150,810 131.46%
============ =======
Like any investment in securities, the value of the Fund may be subject to risk
or loss from market, currency, economic and political factors, which occur in
the countries where the Fund is invested.
16
NOTES DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
TO FINANCIAL STATEMENTS (CONTINUED)
10. 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 invests in high-yield fixed income securities, which carry ratings of
BB or lower by Standard & Poor's Ratings Group and/or Ba or lower by Moody's
Investors Service, Inc. 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. At
May 31, 2005, 144A securities represented approximately 6.70% of total assets.
None of these securities have been determined to be illiquid securities under
the Fund's Liquidity Procedures. While maintaining oversight, the Board of
Directors has delegated to the investment adviser the day-to-day functions of
determining whether individual Rule 144A securities are liquid for purposes of a
fund's limitation on investments in illiquid assets. Illiquid securities, if
any, have been denoted on the Statement of Net Assets.
The Fund invests in real estate investment trusts (REITs) 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 from 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, 2005.
The Fund's REIT holdings are also affected by interest rate changes,
particularly if the REITs it holds use floating rate debt to finance their
ongoing operations.
11. CONTRACTUAL OBLIGATIONS
The Fund enters into contracts in the normal course of business that contain a
variety of indemnifications. The Fund's maximum exposure under these
arrangements is unknown. However, the Fund has not had prior claims or losses
pursuant to these contracts. Management has reviewed the Fund's existing
contracts and expects the risk of loss to be remote.
17
OTHER DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
FUND INFORMATION
BOARD CONSIDERATION OF DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND,
INC. INVESTMENT ADVISORY AGREEMENT
At a meeting held on May 18-19, 2005 (the "Annual Meeting"), the Board of
Directors, including a majority of disinterested or independent Directors,
approved the renewal of the Investment Advisory Agreement for the Delaware
Investments Global Dividend and Income Fund, Inc. (the "Fund"). In making its
decision, the Board considered information furnished throughout the year at
regular Board meetings, as well as information prepared specifically in
connection with the Annual Meeting. Information furnished and discussed
throughout the year included reports detailing Fund performance, investment
strategies, expenses, compliance matters and other services provided by Delaware
Management Company ("DMC"), the investment adviser. Information furnished
specifically in connection with the Annual Meeting included materials provided
by DMC and its affiliates ("Delaware Investments(R)") concerning, among other
things, the level of services provided to the Fund, the costs of such services
to the Fund, economies of scale and the financial condition and profitability of
Delaware Investments. In addition, in connection with the Annual Meeting, the
Board separately received and reviewed independent historical and comparative
reports prepared by Lipper Inc. ("Lipper"), an independent statistical
compilation organization. The Lipper reports compared the Fund's investment
performance and expenses with those of other comparable mutual funds. The Board
also requested and received certain supplemental information regarding
management's policy with respect to advisory fee levels and its philosophy with
respect to breakpoints; the structure of portfolio manager compensation; the
investment manager's profitability organized by client type, including the Fund;
and any constraints or limitations on the availability of securities in certain
investment styles which might inhibit the adviser's ability to fully invest in
accordance with the Fund's policies.
In considering such materials, the independent Directors received assistance and
advice from and met separately with independent counsel and representatives from
Lipper. At the meeting with representatives from Lipper, Jude Driscoll, Chairman
of the Delaware Investments Family of Funds, and Chairman and Chief Executive
Officer of the investment adviser, was present to respond to questions raised by
Lipper and the independent Directors. While the Board considered the Investment
Advisory Agreements for all of the funds in the Delaware Investments Family of
Funds at the same Board meeting, information was provided and considered by the
Board for each fund individually. In approving the continuance of the Investment
Advisory Agreement for the Fund, the Board, including a majority of independent
Directors, determined that the existing advisory fee structure was fair and
reasonable and that the continuance of the Investment Advisory Agreement was in
the best interests of the Fund and its shareholders. While attention was given
to all information furnished, the following discusses the primary factors
relevant to the Board's deliberations and determination, including those
relating to the selection of the investment adviser and the approval of the
advisory fee.
NATURE, EXTENT AND QUALITY OF SERVICE. Consideration was given to the services
provided by Delaware Investments to the Fund and its shareholders. In reviewing
the nature, extent and quality of services, the Board emphasized reports
furnished to it throughout the year at regular Board meetings covering matters
such as the compliance of portfolio managers with the investment policies,
strategies and restrictions for the Fund, the compliance of management personnel
with the Code of Ethics adopted throughout the Delaware Investments Family of
Funds complex, the adherence to fair value pricing procedures as established by
the Board, and the accuracy of net asset value calculations. The Board noted
that it was pleased with the current staffing of the Fund's investment adviser
during the past year, the emphasis on research and the compensation system for
advisory personnel. Favorable consideration was given to DMC's efforts to
maintain, and in some instances increase, financial and human resources
committed to fund matters. Other factors taken into account by the Board were
Delaware Investments' preparedness for, and response to, legal and regulatory
matters. The Board was satisfied with the nature, extent and quality of the
overall services provided by Delaware Investments.
INVESTMENT PERFORMANCE. The Board considered the investment performance of DMC
and the Fund. The Board was pleased by DMC's investment performance, noting
Barron's ranking of the Delaware Investments Family of Funds in the top quartile
of mutual fund families for 2002 -- 2004. The Board placed significant emphasis
on the investment performance of the Fund in view of its importance to
shareholders. While consideration was given to performance reports and
discussions with portfolio managers at Board meetings throughout the year,
particular attention in assessing performance was given to the Lipper reports
furnished for the Annual Meeting. The Lipper reports prepared for the Fund
showed the investment performance of its shares in comparison to a group of
similar funds as selected by Lipper (the "Performance Universe"). A fund with
the highest performance is ranked first, and a fund with the lowest is ranked
last. The highest/best performing 25% of funds in the Performance Universe make
up the first quartile; the next 25% - the second quartile; the next 25% - the
third quartile; and the lowest/worst performing 25% of funds in the Performance
Universe make up the fourth quartile. Comparative annualized performance for the
Fund was shown for the past one, three, five and 10 year periods ended February
28, 2005. The Board noted its objective that the Fund's performance be at or
above the median of its Performance Universe. The following paragraph summarizes
the performance results for the Fund and the Board's view of such performance.
The Performance Universe for this Fund consisted of the Fund and all leveraged
closed-end income and preferred stock funds as selected by Lipper. The Lipper
report comparison showed that the Fund's total return for the one, three, five
and 10 year periods was in the first quartile of such Performance Universe. The
Board was satisfied with such performance.
18
OTHER DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
FUND INFORMATION (CONTINUED)
COMPARATIVE EXPENSES. The Board considered expense comparison data for the
Delaware Investments(R) Family of Funds, Delaware Investments' institutional
separate account business and other lines of business at Delaware Investments.
The Board stated its belief that, given the differing level of service provided
to Delaware Investments' various clients and other factors that related to the
establishment of fee levels, variations in the levels of fees and expenses were
justified. The Board placed significant emphasis on the comparative analysis of
the management fees and total expense ratios of the Fund compared with those of
a group of similar leveraged closed-end funds as selected by Lipper (the
"Expense Group") and among the other Delaware Investments funds. In reviewing
comparative costs, the Fund's contractual management fee and the actual
management fee incurred by the Fund were compared with the contractual
management fees (assuming all funds in the Expense Group were similar in size to
the Fund) and actual management fees (as reported by each fund) of other funds
within the Expense Group, taking into effect any applicable breakpoints and fee
waivers. The Fund's total expenses were also compared with those of its Expense
Group. The Board noted its objective to limit the Fund's total expense ratio to
an acceptable range as compared to the median of the Expense Group. The
following summarizes the expense results for the Fund and the Board's view of
such expenses.
Such expense comparisons for the Fund showed that both its management fee and
total expenses were in the quartile with the second highest expenses of its
Expense Group. The board noted that, while performance had been strong, the
Fund's total expenses somewhat exceeded the Board's stated objective. However,
the Board was satisfied with management's efforts to improve the Fund's total
expense ratio and bring it in line with the Board's objective, including a
reduction in fees under the Fund's Administration and Accounting agreement.
MANAGEMENT PROFITABILITY. The Board considered the level of profits, if any,
realized by Delaware Investments in connection with the operation of the Fund.
In this respect, the Board reviewed the Investment Management Profitability
Analysis that addressed the overall profitability of Delaware Investments'
business in providing management and other services to each of the individual
funds and the Delaware Investments Family of Funds as a whole. Specific
attention was given to the methodology followed in allocating costs for the
purpose of determining profitability. Management stated that the level of
profits of Delaware Investments, to a certain extent, reflected operational cost
savings and efficiencies initiated by Delaware Investments. The Board considered
Delaware Investments' expenditures to improve services provided to fund
shareholders and to meet additional regulatory and compliance requirements
resulting from the Sarbanes-Oxley Act and recent SEC initiatives. The Board also
considered the extent to which Delaware Investments might derive ancillary
benefits from fund operations, including the potential for procuring additional
business as a result of the prestige and visibility associated with its role as
service provider to the Delaware Investments Family of Funds, the benefits from
allocation of fund brokerage to improve trading efficiencies and the use of
"soft" commission dollars to pay for proprietary and non-proprietary research.
At the Board's request, management also provided information relating to
Delaware Investments' profitability by client type. The information provided set
forth the revenue, expenses and pre-tax income/loss attributable to the Delaware
Investments Family of Funds, Delaware Investments' separate account business and
other lines of business at Delaware Investments. Emphasis was given to the level
and type of service provided to the various clients. The Board was satisfied
with the level of profits realized by Delaware Investments from the
relationships with the Fund and the Delaware Investments Family of Funds.
ECONOMIES OF SCALE. As a closed-end fund, the Fund does not issue shares on a
continuous basis. Fund assets increase only to the extent that the value of the
underlying securities in the Fund increase. Accordingly, the Board determined
that the Fund was not likely to experience significant economies of scale due to
asset growth and, therefore, a fee schedule with breakpoints to pass the benefit
of such economies of scale on to shareholders was not likely to provide the
intended effect.
19
Delaware DGF
Investments(R) Listed
- ----------------------------------- NYSE
a member of Lincoln Financial Group THE NEW YORK STOCK EXCHANGE
This semiannual report is for the information of Delaware Investments Global
Dividend and Income Fund, Inc. shareholders. The figures in this report
represent past results which are not a guarantee of future results. The return
and principal value of an investment in the Fund will fluctuate so that shares,
when sold, may be worth more or less than their original cost.
Notice is hereby given in accordance with Section 23 (c) of the Investment
Company 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
JUDE T. DRISCOLL MICHAEL P. BISHOF INVESTMENT MANAGER
Chairman Senior Vice President and Delaware Management Company,
Delaware Investments Family of Funds Chief Financial Officer a Series of Delaware Management Business Trust
Philadelphia, PA Delaware Investments Family of Funds Philadelphia, PA
Philadelphia, PA
THOMAS L. BENNETT+ PRINCIPAL OFFICE OF THE FUND
Private Investor RICHELLE S. MAESTRO 2005 Market Street
Rosemont, PA Executive Vice President, Philadelphia, PA 19103
Chief Legal Officer and Secretary
JOHN A. FRY Delaware Investments Family of Funds INDEPENDENT REGISTERED PUBLIC
President Philadelphia, PA ACCOUNTING FIRM
Franklin & Marshall College Ernst & Young LLP
Lancaster, PA JOHN J. O'CONNOR 2001 Market Street
Senior Vice President and Treasurer Philadelphia, PA 19103
ANTHONY D. KNERR Delaware Investments Family of Funds
Managing Director Philadelphia, PA REGISTRANT AND STOCK TRANSFER AGENT
Anthony Knerr & Associates Mellon Investor Services, LLC
New York, NY Overpeck Centre
85 Challenger Road
LUCINDA S. LANDRETH Ridgefield, NJ 07660
Former Chief Investment Officer 800 851-9677
Assurant, Inc.
Philadelphia, PA FOR SECURITIES DEALERS AND FINANCIAL
INSTITUTIONS REPRESENTATIVES ONLY
ANN R. LEVEN 800 362-7500
Former Treasurer/Chief Fiscal Officer
National Gallery of Art WEB SITE
Washington, DC www.delawareinvestments.com
THOMAS F. MADISON+
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
JANET L. YEOMANS+
Vice President/Mergers & Acquisitions
3M Corporation
St. Paul, MN
J. RICHARD ZECHER+
Founder
Investor Analytics
Scottsdale, AZ
+ Audit Committee Member
(9489)
SA-DGF [5/05] IVES 7/05
- --------------------------------------------------------------------------------
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission for the first and third quarters of each fiscal year on
Form N-Q. The Fund's Forms N-Q, as well as a description of the policies and
procedures that the Fund uses to determine how to vote proxies (if any) relating
to portfolio securities is available without charge (i) upon request, by calling
800 523-1918; (ii) on the Fund's Web site at http://www.delawareinvestments.com;
and (iii) on the Commission's Web site at http://www.sec.gov. The Fund's Forms
N-Q may be reviewed and copied at the Commission's Public Reference Room in
Washington, DC; information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.
Information (if any) regarding how the Fund voted proxies relating to portfolio
securities during the most recently disclosed 12-month period ended June 30 is
available without charge (i) through the Fund's Web site at
http://www.delawareinvestments.com; and (ii) on the Commission's Web site at
http://www.sec.gov.
- --------------------------------------------------------------------------------
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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.
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Printed in the USA
J05-06-090 PO10230
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Included as part of report to shareholders filed under Item 1 of this
Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Applicable to Form N-CSRs filed after fiscal years ending on or after
December 31, 2005.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Companies and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
The registrant's principal executive officer and principal financial
officer have evaluated the registrant's disclosure controls and procedures
within 90 days of the filing of this report and have concluded that they are
effective in providing reasonable assurance that the information required to be
disclosed by the registrant in its reports or statements filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities and
Exchange Commission.
There were no significant changes in the registrant's internal control
over financial reporting that occurred during the second fiscal quarter of the
period covered by the report to stockholders included herein (i.e., the
registrant's second fiscal quarter) that have materially affected, or are
reasonably likely to materially affect, the registrant's internal control over
financial reporting.
Item 12. Exhibits
(a) (1) Code of Ethics
Not applicable.
(2) Certifications of Principal Executive Officer and Principal Financial
Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are
attached hereto as Exhibit 99.CERT.
(3) Written solicitations to purchase securities pursuant to Rule 23c-1
under the Securities Exchange Act of 1934.
Not applicable.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are
furnished herewith as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf, by the undersigned, thereunto duly authorized.
DELAWARE INVESTMENTS GLOBAL DIVIDEND AND INCOME FUND, INC.
/s/ Jude T. Driscoll
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By: Jude T. Driscoll
Title: Chief Executive Officer
Date: July 22, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ Jude T. Driscoll
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By: Jude T. Driscoll
Title: Chief Executive Officer
Date: July 22, 2005
/s/ Michael P. Bishof
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By: Michael P. Bishof
Title: Chief Financial Officer
Date: July 22, 2005