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 811-8092
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
(Exact name of registrant as specified in charter)
125 Broad Street, New York, NY 10004
(Address of principal executive offices) (Zip code)
Robert I. Frenkel, Esq.
Salomon Brothers Asset Management Inc
300 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 725-6666
Date of fiscal year end: OCTOBER 31
Date of reporting period: OCTOBER 31, 2004
ITEM 1. REPORT TO STOCKHOLDERS.
The ANNUAL Report to Stockholders is filed herewith.
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
LETTER FROM THE CHAIRMAN
[R. JAY GERKEN PHOTO]
R. JAY GERKEN, CFA
Chairman and Chief
Executive Officer
DEAR SHAREHOLDER,
Emerging markets debt performed well last fall through the first quarter of this
year, but the market's run was disrupted in the early spring due to technical
factors stemming from a sharp pullback in U.S. Treasury bond prices.(i) The
Treasury market's sharp sell-off was triggered by investors' reaction to a
robust U.S. March labor market report and concerns about resurging inflation and
that interest rates were poised to rise, as bond prices move opposite to
anticipated interest rate movements.
As widely anticipated, the Federal Reserve Board ("Fed")(ii) raised its target
for the closely watched federal funds rate(iii) from a four-decade low of 1.00%
to 1.25% in June, marking its first hike in four years. The Fed boosted it again
in 0.25% intervals in August, September and eventually to 2.00% in November
after the fund's reporting period had ended. Higher rates can help slow a
potential acceleration of economic growth and thereby help maintain a balance
between that growth and the inflation that can generally accompany it.
As the U.S. Treasury bond market stabilized, sovereign debt markets regained
ground lost during the spring. Emerging markets continued to perform well
through the remainder of the period as investors refocused their attention on
favorable country fundamentals and strength in commodity prices, such as metals,
agriculture and oil. Despite concerns that higher energy prices might dampen a
global recovery, the markets benefited from better-than-expected global economic
growth. Furthermore, continued progress on political and economic reforms and a
generally positive macroeconomic environment led to a spate of bond rating
upgrades or improved outlooks from credit rating services, which encouraged
broader investor participation in emerging markets.
Please read on for a more detailed look at prevailing economic and market
conditions during the fund's fiscal year and to learn how those conditions have
affected fund performance.
INFORMATION ABOUT YOUR FUND
As you may be aware, several issues in the mutual fund industry have recently
come under the scrutiny of federal and state regulators. The fund's Adviser and
some of its affiliates have received requests for information from various
government regulators regarding market timing, late trading, fees, and other
mutual fund issues in connection with various investigations. The fund has been
informed that the Adviser and its affiliates are responding to those information
requests, but are not in a position to predict the outcome of these requests and
investigations.
In November 2003, Citigroup Asset Management ("CAM") disclosed an investigation
by the Securities and Exchange Commission ("SEC") and the U.S. Attorney relating
to Citigroup
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
Asset Management's entry into the transfer agency business during 1997-1999.
Citigroup has disclosed that the Staff of the SEC is considering recommending a
civil injunctive action and/or an administrative proceeding against certain
advisory and transfer agent entities affiliated with Citigroup, the former CEO
of CAM, two former employees and a current employee of CAM, relating to the
creation, operation and fees of its internal transfer agent unit that serves
various CAM-managed funds. This internal transfer agent did not provide services
to the fund. Citigroup is cooperating with the SEC and will seek to resolve this
matter in discussion with the SEC Staff. Although there can be no assurance,
Citigroup does not believe that this matter will have a material adverse effect
on the fund.
As always, thank you for your confidence in our stewardship of your assets. We
look forward to helping you continue to meet your financial goals.
Sincerely,
/s/ R. JAY GERKEN
R. Jay Gerken, CFA
Chairman and Chief Executive Officer
November 15, 2004
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
MANAGER OVERVIEW
PERFORMANCE REVIEW
For the 12 months ended October 31, 2004, the Salomon Brothers Worldwide Income
Fund Inc. returned 12.19%, based on its New York Stock Exchange ("NYSE") market
price and 13.52% based on its net asset value ("NAV")(iv) per share. In
comparison, the fund's unmanaged benchmark, the J.P. Morgan Emerging Markets
Bond Plus Index ("EMBI+"),(v) returned 12.94% while the Lipper emerging market
debt funds category average(vi) was 13.51% over the same time frame. Please note
that Lipper performance returns are based on each fund's NAV.
During the 12-month period, the fund distributed dividends to shareholders
totaling $1.425 per share. The performance table shows the fund's 30-day SEC as
well as its 12-month total return based on its NAV and market price as of
October 31, 2004. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE FUND'S
YIELDS WILL VARY.
FUND PERFORMANCE
AS OF OCTOBER 31, 2004
<Table>
<Caption>
30-DAY 12-MONTH
PRICE PER SHARE SEC YIELD TOTAL RETURN
- --------------- --------- ------------
$15.53 (NAV) 6.48% 13.52%
$16.34 (NYSE) 6.15% 12.19%
</Table>
ALL FIGURES REPRESENT PAST PERFORMANCE AND ARE NOT A GUARANTEE OF FUTURE
RESULTS. THE FUND'S YIELDS WILL VARY.
Total returns are based on changes in NAV or market price, respectively. Total
returns assume the reinvestment of all dividends and/or capital gains
distributions, if any, in additional shares. The "SEC yield" is a return figure
often quoted by bond and other fixed-income mutual funds. This quotation is
based on the most recent 30-day (or one-month) period covered by the fund's
filings with the SEC. The yield figure reflects the dividends and interest
earned during the period after deduction of the fund's expenses for the period.
These yields are as of October 31, 2004 and are subject to change.
EMERGING MARKETS DEBT OVERVIEW
Emerging markets debt performed positively through the 12 months ended October
31, 2004, returning 12.94% as represented by the EMBI+. Sovereign debt markets
exhibited strong performance from the start of the fund's fiscal year in
November through March 2004 amid a relatively benign stretch in the U.S.
Treasury bond markets; hedge funds joined crossover buyers in adding to their
emerging markets debt allocations. However, markets were disrupted in April and
May following a sharp sell-off in U.S. Treasury bonds caused by an extremely
strong March U.S. jobs report. April saw the EMBI+'s largest sell-off since July
of 2001, and May saw yield spreads(vii) over U.S. Treasuries widening to 569
basis points(vii) during the month, a level not seen since August of 2003.
Markets rallied over the next few months -- taking back all the losses of April
and May -- and performing strongly through the end of the period.
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
Good country fundamentals, commodity price strength and the absence of U.S.
Treasury market volatility during most of the period, supported emerging markets
debt returns.
Through all of this, emerging markets debt fundamentals remained strong and the
markets benefited from increasing signs of a global economic turnaround.
Continued strength in commodity prices including metals, agriculture and oil
provided positive support for many emerging market countries. Oil prices, in
particular, remained high favoring oil exporters, but fears remained that high
energy prices might dampen the global recovery. Revenues from oil production
contributed to positive performance in Ecuador, Russia and Venezuela. The
markets also benefited from higher than expected global economic growth and
higher than expected inflation.
Spreads tightened 57 basis points(viii) during the 12-month period ended October
31, 2004, closing at 413 basis points over U.S. Treasuries. Over the same
period, 12-month return volatility stood at 8.09%,(ix) substantially below
long-term, historical levels of approximately 16.00%.
Continued progress on political and economic reforms in many emerging countries,
combined with the positive macro environment, led to a spate of upgrades or
improved outlook changes during the period; Moody's and Standard & Poors
collectively upgraded 12 countries during the last 12 months, representing more
than 56.00% of the J.P. Morgan Emerging Markets Bond Index Global. The improving
credit quality in emerging markets encouraged broader investor participation and
may have caused some long-term investors to change their allocation to emerging
markets from tactical to strategic, providing some technical support for the
market.
FACTORS IMPACTING FUND PERFORMANCE
Fund performance for the 12-month period ended October 31, 2004, was primarily
driven by macroeconomic and market factors, as outlined above, rather than
individual country events. That said our overweight positions in Ecuador, Brazil
and Colombia, which returned approximately 33.00%, 18.00% and 14.00%,
respectively, positively contributed to overall performance during the period.
Our underweight position in Venezuela, which returned approximately 30.00%
during the 12 months, detracted from fund performance.
LOOKING FOR ADDITIONAL INFORMATION?
The fund is traded under the symbol "SBW" and its closing market price is
available in most newspapers under the NYSE listings. The daily NAV is available
on-line under symbol XSBWX. Barron's and The Wall Street Journal's Monday
editions carry closed-end fund tables that will provide additional information.
In addition, the fund issues a quarterly press release that can be found on most
major financial websites as well as www.sbam.com.
In a continuing effort to provide information concerning the fund, shareholders
may call 1-888-777-0102 or 1-800-SALOMON (toll free), Monday through Friday from
8:00 a.m. to 6:00 p.m. Eastern Time, for the fund's current NAV, market price,
and other information.
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
Thank you for your investment in the Salomon Brothers Worldwide Income Fund Inc.
As ever, we appreciate that you have chosen us to manage your assets and we
remain focused on seeking to achieve the fund's investment goals.
Sincerely,
<Table>
/s/ JAMES E. CRAIGE /s/ THOMAS K. FLANAGAN
JAMES E. CRAIGE, CFA THOMAS K. FLANAGAN, CFA
Executive Vice President Executive Vice President
</Table>
November 15, 2004
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
The information provided is not intended to be a forecast of future events, a
guarantee of future results or investment advice. Views expressed may differ
from those of the firm as a whole.
Portfolio holdings and breakdowns are as of October 31, 2004 and are subject to
change and may not be representative of the portfolio manager's current or
future investments. The fund's top ten holdings as of this date were: Federative
Republic of Brazil, C Bond, 8.000% due 4/15/14 (10.66%), Russian Federation,
5.000% due 3/31/30 (10.45%), United Mexican States, 6.625% due 3/3/15 (8.64%),
Federative Republic of Brazil, 7.720% due 6/29/09 (7.88%), Russian Federation,
11.000% due 7/24/18 (7.55%), Russian Federation, 12.750% due 6/24/28 (6.35%),
Federative Republic of Brazil, Bearer, 3.125% due 4/15/12 (6.11%), PEMEX Project
Funding Master Trust, 9.125% due 10/31/10 (4.79%), Republic of Ecuador, 12.000%
due 11/15/12 (4.51%), Republic of Turkey, 12.375% due 6/15/09 (3.77%). Please
refer to pages 8 through 12 for a list and percentage breakdown of the fund's
holdings.
The mention of sector breakdowns is for informational purposes only and should
not be construed as a recommendation to purchase or sell any securities. The
information provided regarding such sectors is not a sufficient basis upon which
to make an investment decision. Investors seeking financial advice regarding the
appropriateness of investing in any securities or investment strategies
discussed should consult their financial professional. Portfolio holdings are
subject to change at any time and may not be representative of the portfolio
manager's current or future investments. The fund's top five sector holdings as
of October 31, 2004 were: Brazil (32.67%); Russia (24.36%); Mexico (19.15%);
Venezuela (6.85%); Turkey (6.70%). The fund's portfolio composition is subject
to change at any time.
RISKS: An investment in the fund is subject to investment risks, including the
possible loss of the entire principal amount that you invest. Your shares at any
point may be worth less than what you invested, even after taking into account
the reinvestment of fund dividends and distributions. The fund may invest in
foreign securities that are subject to certain risks of overseas investing,
including currency fluctuations and changes in political and economic
conditions, which could result in significant market fluctuations. These risks
are magnified in emerging or developing markets. The fund may also invest in
derivatives, such as options or futures, which can be illiquid and harder to
value, especially in declining markets. A small investment in certain
derivatives may have a potentially large impact on the fund's performance.
Derivatives can disproportionately increase losses as stated in the prospectus.
All index performance reflects no deduction for fees, expenses or taxes. Please
note that an investor cannot invest directly in an index.
(i) As reflected by the performance of the J.P. Morgan Emerging Markets Bond
Plus Index ("EMBI+"). The EMBI+ is a total return index that tracks the
traded market for U.S. dollar-denominated Brady and other similar sovereign
restructured bonds traded in the emerging markets.
(ii) Source: U.S. Federal Reserve Board. The Fed is responsible for the
formulation of a policy designed to promote economic growth, full
employment, stable prices, and a sustainable pattern of international trade
and payments.
(iii) The federal funds rate is the interest rate that banks with excess
reserves at a Federal Reserve district bank charge other banks that need
overnight loans.
(iv) NAV is calculated by subtracting total liabilities from the closing value
of all securities held by the fund (plus all other assets) and dividing the
result (total net assets) by the total number of the common shares
outstanding. The NAV fluctuates with changes in the market prices of
securities in which the fund has invested. However, the price at which an
investor may buy or sell shares of the fund is at the fund's market price
as determined by supply of and demand for the fund's shares.
(v) The J.P. Morgan Emerging Markets Bond Index Plus is a total return index
that tracks the traded market for U.S. dollar-denominated Brady and other
similar sovereign restructured bonds traded in the emerging markets.
(vi) Lipper, Inc. is a major independent mutual-fund tracking organization.
Returns are based on the 12 month period ended October 31, 2004, calculated
among the 12 funds in the fund's Lipper category, including the
reinvestment of dividends and capital gains, if any.
(vii) Yield spread is the difference between yields on securities of the same
quality but different maturities or the difference between yields on
securities of the same maturity but different quality.
(viii) A basis point is one one-hundredth (1/100 or 0.01) of one percent.
(ix) Source: J.P. Morgan Chase.
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
Fund at a Glance (Unaudited)
INVESTMENT BREAKDOWN
(INVESTMENT BREAKDOWN CHART)
<Table>
<Caption>
AS A PERCENT OF TOTAL INVESTMENTS
- ---------------------------------
Sovereign Bonds............................................. 87.6%
91.5%
Repurchase Agreements....................................... 10.0%
0.0%
Corporate Bonds............................................. 0.0%
4.4%
Loan Participations......................................... 2.2%
4.1%
Purchased Options........................................... 0.2%
0.0%
</Table>
OCTOBER 31, 2004
APRIL 30, 2004
PAGE 7
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
SCHEDULE OF INVESTMENTS
October 31, 2004
<Table>
<Caption>
FACE
AMOUNT SECURITY(A) VALUE
- ---------------------------------------------------------------------------------------------------
SOVEREIGN BONDS -- 134.8%
ARGENTINA -- 2.7%
Republic of Argentina:
$ 8,550,000 Discount Bond, Series L-GL, 2.438% due 3/31/23
(b)(c)+................................................. $ 4,659,750
1,260,000 Par Bond, Series L-GP, 6.000% due 3/31/23 (b)+.......... 693,000
-------------
5,352,750
-------------
BRAZIL -- 32.7%
Federative Republic of Brazil:
995,000 10.125% due 5/15/27..................................... 1,060,173
3,795,000 12.250% due 3/6/30...................................... 4,695,364
2,050,000 11.000% due 8/17/40..................................... 2,310,863
21,580,698 C Bond, 8.000% due 4/15/14.............................. 21,452,563
Collective Action Securities:
14,475,000 7.720% due 6/29/09 (c)................................ 15,857,363
725,000 10.500% due 7/14/14................................... 815,806
DCB, Series L:
13,367,754 Bearer, 3.125% due 4/15/12 (c)........................ 12,285,801
1,080,883 Registered, 3.125% due 4/15/12 (c).................... 993,399
3,115,385 FLIRB, Series L, 3.063% due 4/15/09 (c)................. 3,037,500
317 MYDFA, 2.875% due 9/15/07 (c)(d)........................ 308
3,269,292 NMB, Series L, 3.125% due 4/15/09 (c)................... 3,207,993
-------------
65,717,133
-------------
BULGARIA -- 1.9%
Republic of Bulgaria:
1,150,000 8.250% due 1/15/15 (d).................................. 1,441,812
2,434,250 IAB, 2.750% due 7/28/11 (c)............................. 2,428,164
-------------
3,869,976
-------------
CHILE -- 2.2%
4,150,000 Republic of Chile, 5.500% due 1/15/13..................... 4,403,869
-------------
COLOMBIA -- 6.9%
Republic of Colombia:
2,450,000 8.625% due 4/1/08 (e)................................... 2,710,313
2,175,000 9.750% due 4/23/09...................................... 2,470,256
800,000 10.000% due 1/23/12..................................... 897,000
2,275,000 10.750% due 1/15/13..................................... 2,642,413
1,000,000 8.700% due 2/15/16...................................... 978,125
2,625,000 11.750% due 2/25/20..................................... 3,215,625
1,175,000 8.125% due 5/21/24...................................... 1,075,125
-------------
13,988,857
-------------
COSTA RICA -- 0.3%
650,000 Republic of Costa Rica, 9.995% due 8/1/20 (e)............. 698,750
-------------
</Table>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 8
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
SCHEDULE OF INVESTMENTS (continued)
October 31, 2004
<Table>
<Caption>
FACE
AMOUNT SECURITY(A) VALUE
- ---------------------------------------------------------------------------------------------------
ECUADOR -- 5.7%
Republic of Ecuador:
$ 9,035,000 12.000% due 11/15/12 (d)................................ $ 9,080,175
2,825,000 8.000% due 8/15/30 (c)(d)............................... 2,398,425
-------------
11,478,600
-------------
EL SALVADOR -- 1.4%
Republic of El Salvador:
1,650,000 7.750% due 1/24/23 (d).................................. 1,782,000
1,125,000 8.250% due 4/10/32 (d).................................. 1,137,825
-------------
2,919,825
-------------
GERMANY -- 1.9%
3,200,000 Aries Vermoegensverwaltungs GmbH, Russian Federation
Credit-Linked Notes, Series C, 9.600% due 10/25/14
(d)..................................................... 3,752,000
-------------
MALAYSIA -- 3.2%
3,675,000 Federation of Malaysia, 7.500% due 7/15/11................ 4,333,218
1,650,000 Petronas Capital Ltd., 7.875% due 5/22/22................. 2,014,625
-------------
6,347,843
-------------
MEXICO -- 19.1%
PEMEX, Project Funding Master Trust:
325,000 6.125% due 8/15/08...................................... 345,313
8,000,000 9.125% due 10/13/10..................................... 9,640,000
250,000 8.000% due 11/15/11..................................... 288,125
650,000 7.375% due 12/15/14..................................... 721,825
1,100,000 Petroleos Mexicanos, 9.500% due 9/15/27................... 1,358,500
United Mexican States:
1,765,000 7.500% due 1/14/12...................................... 2,008,129
16,175,000 6.625% due 3/3/15....................................... 17,375,994
2,725,000 11.375% due 9/15/16..................................... 4,063,656
2,075,000 5.875% due 1/15/14...................................... 2,126,356
525,000 Medium-Term Notes, Series A, 8.300% due 8/15/31......... 607,687
-------------
38,535,585
-------------
PANAMA -- 3.3%
Republic of Panama:
1,090,000 9.625% due 2/8/11....................................... 1,245,325
200,000 9.375% due 7/23/12...................................... 227,000
3,525,000 10.750% due 5/15/20..................................... 4,230,000
925,900 IRB, 2.750% due 7/17/14 (c)............................. 888,864
-------------
6,591,189
-------------
</Table>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 9
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
SCHEDULE OF INVESTMENTS (continued)
October 31, 2004
<Table>
<Caption>
FACE
AMOUNT SECURITY(A) VALUE
- ---------------------------------------------------------------------------------------------------
PERU -- 5.8%
Republic of Peru:
$ 525,000 9.125% due 2/21/12...................................... $ 590,887
2,675,000 9.875% due 2/6/15....................................... 3,103,000
2,875,000 FLIRB, 4.500% due 3/7/17 (c)............................ 2,583,906
5,852,000 PDI, 5.000% due 3/7/17 (c).............................. 5,398,470
-------------
11,676,263
-------------
THE PHILIPPINES -- 6.2%
Republic of the Philippines:
250,000 8.375% due 3/12/09 (e).................................. 264,375
875,000 9.000% due 2/15/13 (e).................................. 884,297
2,925,000 8.250% due 1/15/14...................................... 2,818,969
1,125,000 9.375% due 1/18/17...................................... 1,165,050
1,068,000 9.500% due 10/21/24..................................... 1,159,447
2,100,000 10.625% due 3/16/25..................................... 2,201,640
3,062,400 DCB, 2.438% due 12/1/09 (c)............................. 2,771,472
1,333,333 FLIRB, Series B, 2.438% due 6/1/08 (c).................. 1,236,666
-------------
12,501,916
-------------
RUSSIA -- 24.4%
Russian Federation:
11,140,000 11.000% due 7/24/18 (d)................................. 15,192,175
8,025,000 12.750% due 6/24/28 (d)................................. 12,779,813
20,995,000 5.000% due 3/31/30 (c)(d)............................... 21,027,805
-------------
48,999,793
-------------
SOUTH AFRICA -- 2.8%
Republic of South Africa:
875,000 9.125% due 5/19/09...................................... 1,045,625
4,125,000 6.500% due 6/2/14....................................... 4,496,250
-------------
5,541,875
-------------
TURKEY -- 6.7%
Republic of Turkey:
6,090,000 12.375% due 6/15/09..................................... 7,582,050
900,000 11.750% due 6/15/10..................................... 1,120,500
3,250,000 11.500% due 1/23/12..................................... 4,086,875
600,000 9.500% due 1/15/14...................................... 691,500
-------------
13,480,925
-------------
URUGUAY -- 0.8%
1,950,000 Republic of Uruguay, Benchmark Bond, 7.875% due 1/15/33
(f)..................................................... 1,599,000
-------------
</Table>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 10
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
SCHEDULE OF INVESTMENTS (continued)
October 31, 2004
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
<Table>
<Caption>
FACE
AMOUNT SECURITY(A) VALUE
- ---------------------------------------------------------------------------------------------------
v
VENEZUELA -- 6.8%
Republic of Venezuela:
$ 6,225,000 5.375% due 8/7/10....................................... $ 5,719,219
1,825,000 10.750% due 9/19/13..................................... 2,117,912
938,000 8.500% due 10/8/14...................................... 953,477
4,400,000 Collective Action Securities, 19.375% due 1/13/34....... 4,521,000
475,000 Par Bond, Series A, 6.750% due 3/31/20.................. 469,359
-------------
13,780,967
-------------
TOTAL SOVEREIGN BONDS (Cost -- $250,771,256).............. 271,237,116
-------------
LOAN PARTICIPATIONS(C) (G) -- 3.3%
MOROCCO -- 3.3%
6,792,208 Kingdom of Morocco, Tranche A, 2.781% due 1/2/09 (CS First
Boston Corp., UBS Financial Services Inc.)
(Cost -- $6,451,496).................................... 6,690,325
-------------
CONTRACTS
-----------
v
PURCHASED OPTION -- 0.4%
230,000 Federative Republic of Brazil, 11.000% due 8/17/40, Call @
112.4, Expire 1/12/05 (Cost -- $791,200)................ 660,100
-------------
WARRANTS/
RIGHTS
-----------
v
WARRANTS AND RIGHTS (h)+ -- 0.0%
2,000 (Warrants) Asia Pulp & Paper (Exercise price of $7.8375 per share
expiring on 3/15/05. Each warrant exercisable for 12.914
shares of common stock) (d)............................. 0
76,755 (Rights) Republic of Venezuela (Rights to purchase Discount Notes,
zero coupon due 4/15/20)................................ 0
-------------
TOTAL WARRANTS AND RIGHTS (Cost -- $0).................... 0
-------------
SUB-TOTAL INVESTMENTS (Cost -- $258,013,952).............. 278,587,541
-------------
</Table>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 11
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
SCHEDULE OF INVESTMENTS (continued)
October 31, 2004
<Table>
<Caption>
FACE
AMOUNT SECURITY(A) VALUE
- ---------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 15.5%
$ 3,137,000 Bank of America dated 10/29/04, 1.830% due 11/1/04;
Proceeds at maturity -- $3,137,478; (Fully
collateralized by various U.S. Government agency
obligations, 0.000% to 7.625% due 11/1/04 to 1/15/30;
Market value -- $3,199,743)............................. $ 3,137,000
7,000,000 Deutsche Bank Securities Inc. dated 10/29/04, 1.840% due
11/1/04; Proceeds at maturity -- $7,001,073; (Fully
collateralized by various U.S. Government agency
obligations, 0.000% to 7.100% due 2/3/05 to 6/1/17;
Market value -- $7,140,000)............................. 7,000,000
7,000,000 Goldman Sachs Group Inc. dated 10/29/04, 1.840% due
11/1/04; Proceeds at maturity -- $7,001,073; (Fully
collateralize by various U.S. Treasury obligations,
0.000% to 10.625% due 12/2/04 to 4/15/29; Market
value -- $7,140,004).................................... 7,000,000
7,000,000 Morgan Stanley dated 10/29/04, 1.810% due 11/1/04;
Proceeds at maturity -- $7,001,056; (Fully
collateralized by various U.S. Government agency
obligations, 0.000% to 8.000% due 11/2/04 to 4/26/24;
Market value -- $7,176,330)............................. 7,000,000
7,000,000 UBS Securities LLC dated 10/29/04, 1.840% due 11/1/04;
Proceeds at maturity -- $7,001,073; (Fully
collateralized by various U.S. Government agency
obligations, 0.000% to 8.875% due 12/7/04 to 8/6/38;
Market value -- $7,140,015)............................. 7,000,000
-------------
TOTAL REPURCHASE AGREEMENTS (Cost -- $31,137,000)......... 31,137,000
-------------
TOTAL INVESTMENTS -- 154.0% (Cost -- $289,150,952*)....... 309,724,541
Liabilities in Excess of Other Assets -- (54.0)%.......... (108,542,949)
-------------
TOTAL NET ASSETS -- 100.0%................................ $ 201,181,592
=============
</Table>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 12
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
SCHEDULE OF INVESTMENTS (continued)
October 31, 2004
<Table>
<Caption>
FACE
AMOUNT SECURITY VALUE
- ---------------------------------------------------------------------------------------------------
LOAN SECURITIES COLLATERAL
$ 1,863,890 State Street Navigator Securities Lending Trust Prime
Portfolio (Cost -- $1,863,890).......................... $1,863,890
=============
</Table>
- ------------------
(a) All securities (except those on loan) are segregated as collateral pursuant
to loan agreement, futures contracts and/or reverse repurchase agreements.
(b) Security is currently in default.
(c) Rate shown reflects current rate on instrument with step variable rate or
coupon rates.
(d) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. This security may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers. This security has
been deemed liquid pursuant to guidelines approved by the Board of
Directors.
(e) All or portion of this security is on loan (See Notes 1 and 3).
(f) Payment-in-kind security for which all or part of the income earned may be
paid as additional principle.
(g) Participation interests were acquired through the financial institutions
indicated parenthetically.
(h) Security is valued in accordance with fair valuation procedures.
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is $289,789,986.
Abbreviations used in this schedule:
C Bond -- Capitalization Bond
DCB -- Debt Conversion Bond
FLIRB -- Front Loaded Interest Reduction Bond
IAB -- Interest-in-Arrears Bond
IRB -- Interest Reduction Bond
MYDFA -- Multi-Year Depository Facility Agreement
NMB -- New Money Bond
PDI -- Past Due Interest
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 13
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2004
<Table>
ASSETS:
Investments, at value (Cost -- $258,013,952).............. $278,587,541
Repurchase agreements, at value (Cost -- $31,137,000)..... 31,137,000
Loaned securities collateral, at value
(Cost -- $1,863,890) (Note 3)........................... 1,863,890
Cash...................................................... 360,456
Receivable for securities sold............................ 11,928,799
Interest receivable....................................... 4,177,159
------------
TOTAL ASSETS.............................................. 328,054,845
------------
LIABILITIES:
Loan payable (Note 4)..................................... 60,000,000
Payable for open reverse repurchase agreements (Notes 1
and 3).................................................. 34,204,947
Payable for securities purchased.......................... 30,145,512
Payable for loaned securities collateral (Note 3)......... 1,863,890
Interest payable (Notes 3 and 4).......................... 162,511
Investment advisory fee payable........................... 152,209
Payable to broker -- variation margin..................... 150,000
Administration fee payable................................ 25,368
Accrued expenses.......................................... 168,816
------------
TOTAL LIABILITIES......................................... 126,873,253
------------
TOTAL NET ASSETS............................................ $201,181,592
============
NET ASSETS:
Common Stock ($0.001 par value, 100,000,000 shares
authorized; 12,956,858 shares outstanding).............. $ 12,957
Capital paid in excess of par value....................... 180,402,956
Overdistributed net investment income..................... (345,407)
Accumulated net realized gain from investment
transactions, futures contracts and options............. 1,529,573
Net unrealized appreciation of investments, futures
contracts and options................................... 19,581,513
------------
TOTAL NET ASSETS............................................ $201,181,592
============
NET ASSET VALUE, PER SHARE ($201,181,592 / 12,956,858 shares
outstanding).............................................. $15.53
============
</Table>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 14
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
STATEMENT OF OPERATIONS
For the Year Ended October 31, 2004
<Table>
INVESTMENT INCOME:
Interest (Note 3)......................................... $20,223,103
-----------
EXPENSES:
Investment advisory fee (Note 2).......................... 1,751,927
Interest expense (Notes 3 and 4).......................... 1,489,319
Administration fee (Note 2)............................... 291,988
Custody................................................... 82,940
Shareholder communications................................ 70,839
Audit..................................................... 68,312
Directors' fees........................................... 51,430
Legal..................................................... 48,150
Shareholder servicing fee................................. 32,592
Other..................................................... 7,815
-----------
TOTAL EXPENSES............................................ 3,895,312
-----------
NET INVESTMENT INCOME....................................... 16,327,791
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN
CURRENCIES, FUTURES CONTRACTS AND OPTIONS (NOTES 1 AND 3):
Realized Gain (Loss) From:
Investment transactions................................. 10,572,354
Foreign currency transactions........................... 2,052
Futures contracts....................................... (748,478)
Options................................................. 39,405
-----------
NET REALIZED GAIN......................................... 9,865,333
-----------
Change in Net Unrealized Appreciation From:
Investments............................................. (1,493,840)
Foreign currencies...................................... (2,172)
-----------
NET DECREASE IN UNREALIZED APPRECIATION................... (1,496,012)
-----------
NET GAIN ON INVESTMENTS, FOREIGN CURRENCIES, FUTURES
CONTRACTS AND OPTIONS..................................... 8,369,321
-----------
INCREASE IN NET ASSETS FROM OPERATIONS...................... $24,697,112
===========
</Table>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 15
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended October 31,
<Table>
<Caption>
2004 2003
- ------------------------------------------------------------------------------------------
OPERATIONS:
Net investment income..................................... $ 16,327,791 $ 18,999,749
Net realized gain......................................... 9,865,333 8,149,328
Increase (decrease) in net unrealized appreciation........ (1,496,012) 40,035,851
------------ ------------
INCREASE IN NET ASSETS FROM OPERATIONS.................... 24,697,112 67,184,928
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income..................................... (17,834,602) (18,873,675)
Net realized gains........................................ (599,183) --
------------ ------------
DECREASE IN NET ASSETS FROM DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS............................................ (18,433,785) (18,873,675)
------------ ------------
FUND SHARE TRANSACTIONS:
Net proceeds from shares issued on reinvestment of
dividends (38,346 and 50,367 shares issued,
respectively)........................................... 581,371 695,931
------------ ------------
INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS....... 581,371 695,931
------------ ------------
INCREASE IN NET ASSETS...................................... 6,844,698 49,007,184
NET ASSETS:
Beginning of year......................................... 194,336,894 145,329,710
------------ ------------
END OF YEAR*.............................................. $201,181,592 $194,336,894
============ ============
* Includes undistributed (overdistributed) net investment
income of:................................................ $(345,407) $330,093
============ ============
</Table>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 16
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED OCTOBER 31, 2004
<Table>
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES:
Interest received......................................... $ 16,827,895
Operating expenses paid................................... (2,497,422)
Net purchase of short-term investments.................... (26,644,200)
Realized gain on foreign currency transactions............ 2,052
Realized gain on options.................................. 39,405
Realized loss on futures contracts........................ (748,478)
Net change in unrealized depreciations on futures
contracts............................................... (992,076)
Purchases of long-term investments........................ (230,447,752)
Proceeds from disposition of long-term investments........ 229,746,220
Change in payable to broker -- variation margin........... 150,000
Interest paid............................................. (1,436,903)
Decrease in loaned securities collateral.................. 9,010,171
Decrease in payable for loaned securities collateral...... (9,010,171)
-------------
NET CASH USED BY OPERATING ACTIVITIES..................... (16,001,259)
-------------
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES:
Cash distributions paid on Common Stock................... (18,433,785)
Net proceeds from reverse repurchase agreements........... 34,204,947
Proceeds from shares issued on reinvestment of
dividends............................................... 581,371
-------------
NET CASH PROVIDED BY FINANCING ACTIVITIES................. 16,352,533
-------------
NET INCREASE IN CASH........................................ 351,274
Cash, Beginning of year..................................... 9,182
-------------
CASH, END OF YEAR........................................... $ 360,456
=============
RECONCILIATION OF INCREASE IN NET ASSETS FROM OPERATIONS TO
NET CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES:
INCREASE IN NET ASSETS FROM OPERATIONS.................... $ 24,697,112
-------------
Accretion of discount on investments...................... (3,533,308)
Amortization of premium on investments.................... 689,787
Increase in investments, at value......................... (57,400,365)
Increase in payable for securities purchased.............. 30,145,512
Increase in interest receivable........................... (551,687)
Increase in receivable for securities sold................ (10,159,297)
Increase in payable to broker -- variation margin......... 150,000
Decrease in prepaid expenses.............................. 6,011
Increase in interest payable.............................. 52,416
Decrease in accrued expenses.............................. (97,440)
-------------
TOTAL ADJUSTMENTS......................................... (40,698,371)
-------------
NET CASH FLOWS USED BY OPERATING ACTIVITIES................. $ (16,001,259)
=============
</Table>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 17
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
FINANCIAL HIGHLIGHTS
Data for a share of common stock outstanding throughout each year ended October
31, unless otherwise noted:
<Table>
<Caption>
2004(1) 2003(1) 2002(1) 2001 2000
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR................ $15.04 $11.29 $12.24 $12.96 $11.77
------- -------- -------- -------- --------
INCOME (LOSS) FROM OPERATIONS:
Net investment income........................... 1.26 1.47 1.57(2) 1.57 1.78
Net realized and unrealized gain (loss)......... 0.66 3.74 (1.01)(2) (0.52) 1.08
------- -------- -------- -------- --------
Total Income From Operations...................... 1.92 5.21 0.56 1.05 2.86
------- -------- -------- -------- --------
LESS DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income........................... (1.39) (1.46) (1.51) (1.77) (1.67)
Net realized gains.............................. (0.04) -- -- -- --
------- -------- -------- -------- --------
Total Dividends and Distributions................. (1.43) (1.46) (1.51) (1.77) (1.67)
------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR...................... $15.53 $15.04 $11.29 $12.24 $12.96
======= ======== ======== ======== ========
MARKET PRICE, END OF YEAR......................... $16.34 $16.00 $11.60 $13.00 $11.50
======= ======== ======== ======== ========
TOTAL RETURN, BASED ON MARKET PRICE(3)............ 12.19% 53.18% 0.61% 30.15% 20.06%
RATIOS TO AVERAGE NET ASSETS:
Total expenses, including interest expense...... 2.00% 2.11% 2.67% 4.04% 4.34%
Total expenses, excluding interest expense
(operating expenses).......................... 1.24% 1.30% 1.46% 1.32% 1.24%
Net investment income........................... 8.39% 10.77% 12.91%(2) 12.13% 13.65%
SUPPLEMENTAL DATA:
Net assets, end of year (000's)................. $201,182 $194,337 $145,330 $156,701 $165,459
Portfolio turnover rate......................... 94% 100% 143% 192% 119%
Asset coverage for loan outstanding............. 435% 424% 342% 361% 376%
Weighted average bank loan (000's).............. $60,000 $60,000 $60,000 $60,000 $60,000
Weighted average interest rate on bank loan..... 2.34% 2.38% 3.10% 7.29% 8.44%
</Table>
- --------------------------------------------------------------------------------
<Table>
(1) Per share amounts have been calculated using the monthly
average shares method.
(2) Effective November 1, 2001, the Fund adopted a change in the
accounting method that requires the Fund to amortize
premiums and accrete all discounts. Without the adoption of
this change, for the year ended October 31, 2002, net
investment income, net realized and unrealized loss and the
ratio of net investment income to average net assets would
have been $1.58, $1.02 and 12.97%, respectively. Per share
information, ratios and supplemental data for the periods
prior to November 1, 2001 have not been restated to reflect
this change in presentation.
(3) For purposes of this calculation, dividends and
distributions are assumed to be reinvested at prices
obtained under the Fund's dividend reinvestment plan and the
broker commissions paid to purchase or sell a share are
excluded.
</Table>
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
PAGE 18
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Salomon Brothers Worldwide Income Fund Inc. ("Fund") was incorporated in
Maryland on October 21, 1993 and is registered under the Investment Company Act
of 1940, as amended, as a non-diversified, closed-end management investment
company. The Fund seeks to maintain a high level of current income by investing
primarily in a portfolio of high-yield non-U.S. and U.S. corporate debt
securities. As a secondary objective, the Fund seeks capital appreciation.
The following is a summary of the significant accounting policies consistently
followed by the Fund and are in conformity with U.S. generally accepted
accounting principles ("GAAP"). Estimates and assumptions are required to be
made regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ.
(a) INVESTMENT VALUATION. In valuing the Fund's assets, all securities,
futures and options for which market quotations are readily available are valued
(except as described below) (i) at the last sale price prior to the time of
determination if there was a sale price on the date of determination, (ii) at
the mean between the last current bid and asked prices if there was no sale
price on such date and bid and asked quotations are available and (iii) at the
bid price if there was no sale price on such date and only bid quotations are
available. Publicly traded sovereign bonds are typically traded internationally
in the over-the-counter market and are valued at the mean between the last
current bid and asked price as of the close of business of that market. However,
when the spread between bid and asked price exceeds five percent of the par
value of the security, the security is valued at the bid price. Securities may
also be valued by independent pricing services which use prices provided by
market-makers or estimates of market values obtained from yield data relating to
instruments or securities with similar characteristics. When market quotations
are not readily available, or are determined not to reflect accurately fair
value, such as when the value of a security has been significantly affected by
events after the close of the exchange or market on which the security is
principally traded (for example, a foreign exchange or market), but before the
fund calculates its net asset value, the fund may value these investments at
fair value as determined in accordance with the procedures approved by the
Fund's Board of Directors. Short-term investments having a maturity of 60 days
or less are valued at amortized cost which approximates market value.
(b) REPURCHASE AGREEMENTS. When entering into repurchase agreements, it is the
Fund's policy that a custodian take possession of the underlying collateral
securities, the value of which at least equals the principal amount of the
repurchase transaction, including accrued interest. To the extent that any
repurchase transaction exceeds one business day, the value of
PAGE 19
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (continued)
the collateral is marked-to-market to ensure the adequacy of the collateral. If
the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
(c) REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements in which the Fund sells portfolio securities and agrees to repurchase
them from the buyer at a specified date and price. Whenever the Fund enters into
a reverse repurchase agreement, the Fund's custodian delivers liquid assets to
the counterparty in an amount at least equal to the repurchase price
marked-to-market daily (including accrued interest), and the counterparty
subsequently monitors the account to ensure that such equivalent value is
maintained. The Fund pays interest on amounts obtained pursuant to reverse
repurchase agreements. Reverse repurchase agreements are considered to be
borrowings by the Fund. Reverse repurchase agreements involve leverage risk and
the risk that the market value of securities purchased with the proceeds from
the reverse repurchase agreements may decline below the repurchase price of the
securities sold by the Fund which it is obligated to repurchase.
(d) FUTURES CONTRACTS. The Fund may enter into futures contracts to the extent
permitted by its investment policies and objectives. Upon entering into a
futures contract, the Fund is required to deposit cash or securities as initial
margin. Additional securities are also segregated up to the current market value
of the futures contracts. Subsequent payments, which are dependent on the daily
fluctuations in the value of the underlying financial instrument, are made or
received by the Fund each day (daily variation margin) and are recorded as
unrealized gains or losses until the contracts are closed. When the contracts
are closed, the Fund records a realized gain or loss equal to the difference
between the proceeds from (or cost of) the closing transactions and the Fund's
basis in the contracts. The Fund enters into such contracts typically to hedge a
portion of the portfolio. The risks associated with entering into futures
contracts include the possibility that a change in the value of the contract may
not correlate with the changes in the value of the underlying instruments. In
addition, investing in futures contracts involves the risk that the Fund could
lose more than the original margin deposit and subsequent payments required for
a futures transaction.
(e) OPTION CONTRACTS. When the Fund writes or purchases a call or a put option,
an amount equal to the premium received or paid by the Fund is recorded as a
liability or asset, the value of which is marked-to-market daily to reflect the
current market value of the option. When the option expires, the Fund realizes a
gain or loss equal to the amount of the premium received or paid. When the Fund
enters into a closing transaction by purchasing or selling an offsetting option,
it realizes a gain or loss without regard to any unrealized gain or loss on the
underlying security. When a written call option is exercised, the Fund realizes
a gain or loss from the sale of the underlying security and the proceeds from
such sale are increased by the
PAGE 20
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (continued)
premium originally received. When a written put option is exercised, the amount
of the premium received reduces the cost of the security that the Fund purchased
upon exercise of the option. The Fund enters into options for hedging purposes.
The risk associated with purchasing options is limited to the premium originally
paid. The risk in writing a covered call option is that the Fund gives up the
opportunity to participate in any increase in the price of the underlying
security beyond the exercise price. The risk in writing a put option is that the
Fund is exposed to the risk of loss if the market price of the underlying
security declines. The risk in writing a call option is that the Fund is exposed
to the risk of loss if the market price of the underlying security increases.
(f) LENDING OF PORTFOLIO SECURITIES. The Fund has an agreement with its
custodian whereby the custodian may lend securities owned by the Fund to
brokers, dealers and other financial organizations, and receives a lender's fee.
Fees earned by the Fund on securities lending are recorded as interest income.
Loans of securities by the Fund are collateralized by cash, U.S. government
securities or high quality money market instruments that are maintained at all
times in an amount at least equal to the current market value of the loaned
securities, plus a margin which may vary depending on the type of securities
loaned. The custodian establishes and maintains the collateral in a segregated
account. The Fund maintains exposure for the risk of any losses in the
investment of amounts received as collateral. The Fund has the right under the
lending agreement to recover the securities from the borrower on demand.
(g) LOAN PARTICIPATIONS. The Fund invests in fixed and floating rate loans
arranged through private negotiations between a foreign sovereign entity and one
or more financial institutions ("lenders"). The Fund's investment in any such
loan may be in the form of a participation in or an assignment of the loan. In
connection with purchasing loan participations, the Fund generally will have no
right to enforce compliance by the borrower with the terms of the loan agreement
relating to the loan, nor any rights of set-off against the borrower, and the
Fund may not benefit directly from any collateral supporting the loan in which
it has purchased the participation. As a result, the Fund will assume the credit
risk of both the borrower and the lender that is selling the participation. In
the event of the insolvency of the lender selling the participation, the Fund
may be treated as a general creditor of the lender and may not benefit from any
set-off between the lender and the borrower. When the Fund purchases assignments
from lenders, the Fund will acquire direct rights against the borrower on the
loan, except that under certain circumstances such rights may be more limited
than those held by the assigning lender. The Fund may have difficulty disposing
of participations/assignments because the market for certain instruments may not
be highly liquid.
(h) CREDIT, EXCHANGE RATE AND MARKET RISK. The yields of emerging market debt
obligations and high-yield corporate debt obligations reflect, among other
things, perceived credit risk. The Fund's investment in securities rated below
investment grade typically involves risks not
PAGE 21
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (continued)
associated with higher rated securities including, among others, overall greater
risk of timely and ultimate payment of interest and principal, greater market
price volatility and less liquid secondary market trading. The consequences of
political, social, economic or diplomatic changes may have disruptive effects on
the market prices of investments held by the Fund.
(i) CASH FLOW INFORMATION. The Fund invests in securities and distributes
dividends from net investment income and net realized gains from investment
transactions which are paid in cash and may be reinvested at the discretion of
shareholders. These activities are reported in the Statement of Changes in Net
Assets and additional information on cash receipts and cash payments is
presented in the Statement of Cash Flows.
(j) INVESTMENT TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded on the trade date. Interest income is accrued on a daily basis.
Discount and premium on securities purchased is accreted and amortized on an
effective yield basis over the life of the security. The Fund uses the specific
identification method for determining realized gain or loss on investments sold.
(k) FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are
maintained in U.S. dollars. Transactions denominated in foreign currencies are
recorded at the current prevailing exchange rates. All assets and liabilities
denominated in foreign currencies are translated into U.S. dollar amounts at the
current exchange rate at the date of valuation. Translation gains or losses
resulting from changes in the exchange rate during the reporting period and
realized gains and losses on the settlement of foreign currency transactions are
reported in the results of operations for the current period. The Fund does not
isolate that portion of realized gains and losses on investments in securities,
which is due to changes in the foreign exchange rate from that which is due to
changes in market prices of the securities.
(l) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. The Fund declares and pays
dividends to shareholders monthly from net investment income. Net realized
gains, if any, in excess of loss carryovers are expected to be distributed
annually. Dividends and distributions to shareholders are recorded on the
ex-dividend date. The amount of dividends and distributions from net investment
income and net realized gains are determined in accordance with federal income
tax regulations, which may differ from GAAP due primarily to differences in the
treatment of foreign currency gains/losses and deferral of wash sales and
post-October losses incurred by the Fund. These "book/tax" differences are
either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal income tax basis treatment; temporary
differences do not require reclassification. Dividends and distributions which
exceed net investment income and net realized capital gains for tax purposes are
reported as tax return of capital. The character of income and gains to be
distributed is determined in accordance with income tax regulations which may
differ from GAAP.
PAGE 22
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(m) FEDERAL AND OTHER TAXES. It is the Fund's policy to comply with the federal
income and excise tax requirements of the Internal Revenue Code of 1986, as
amended, applicable to regulated investment companies. Accordingly, the Fund
intends to distribute substantially all of its taxable income and net realized
gains on investments, if any, to shareholders each year. Therefore, no federal
income tax provision is required. Under the applicable foreign tax law, a
withholding tax may be imposed on interest, dividends and capital gain at
various rates.
(n) RECLASSIFICATIONS. GAAP require that certain components of net assets be
adjusted to reflect permanent differences between financial and tax reporting.
Accordingly, during the current year, $939,165 has been reclassified between
accumulated net realized gain from investment transactions and undistributed net
investment income as a result of permanent differences attributable to the
reclassification of distributions for tax purposes and book/tax differences in
the recognition of market premium on securities sold. Also, $9,988 has been
reclassified between paid-in capital and undistributed net investment income as
a result of non-deductible excise tax paid. These reclassifications have no
effect on net assets or net asset value per share.
NOTE 2. INVESTMENT ADVISORY AND ADMINISTRATION FEES AND OTHER TRANSACTIONS
The Fund has an Investment Advisory Agreement with Salomon Brothers Asset
Management Inc ("Adviser"), an indirect wholly-owned subsidiary of Citigroup
Inc. ("Citigroup"). The Adviser is responsible for the day-to-day management of
the Fund's portfolio in accordance with the Fund's investment objectives and
policies and for making decisions to buy, sell, or hold particular securities.
The Fund pays the Adviser a monthly fee for its investment advisory services at
an annual rate of 0.90% of the value of the Fund's average weekly net assets.
The Adviser also serves as Administrator to the Fund and performs certain
administrative services necessary for the operation of the Fund. Under the terms
of the Administration Agreement, the Fund pays the Administrator a monthly fee
at an annual rate of 0.150% of the value of the Fund's average weekly net assets
up to $250 million and 0.125% of the value of such net assets in excess of $250
million for its services.
Prior to November 1, 2004, Prudential Investments LLC served as
Sub-Administrator to the Fund pursuant to an agreement with the Administrator
and the Fund. However, in a letter dated August 27, 2004, the Fund and the
Administrator gave the Sub-administrator notice that the Sub-Administrative
Agreement was being terminated effective as of the open of business on November
1, 2004. Thus, as of November 1, 2004, the Administrator no longer pays the
Sub-administrator 80% of the fees the Administrator collects for its services.
Certain officers and/or directors of the Fund are also officers and/or directors
of the Adviser and do not receive compensation from the Fund.
PAGE 23
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 3. PORTFOLIO ACTIVITY
For the year ended October 31 2004, the aggregate cost of purchases and proceeds
from sales of investments (excluding short-term investments) were as follows:
<Table>
Purchases................................................... $260,593,264
============
Sales....................................................... $239,907,689
============
</Table>
At October 31, 2004, the aggregate gross unrealized appreciation and
depreciation of investments for federal income tax purposes were as follows:
<Table>
Gross unrealized appreciation............................... $20,816,922
Gross unrealized depreciation............................... (882,367)
-----------
Net unrealized appreciation................................. $19,934,555
===========
</Table>
Transactions in reverse repurchase agreements for the Fund during the year ended
October 31, 2004 were as follows:
<Table>
<Caption>
AVERAGE WEIGHTED MAXIMUM
DAILY AVERAGE AMOUNT
BALANCE INTEREST RATE OUTSTANDING
----------- ------------- -----------
$6,863,965 1.19% $34,204,947
</Table>
Interest rates on reverse repurchase agreements ranged from 0.85% to 1.45%
during the year ended October 31, 2004. Interest paid on reverse repurchase
agreements totaled $65,807.
At October 31, 2004, the Fund had the following open reverse repurchase
agreements:
<Table>
<Caption>
FACE
AMOUNT SECURITY VALUE
- ----------- ------------------------------------------------------------ -----------
$ 9,274,500 Reserve Repurchase Agreement with JPMorgan Chase & Co.,
dated 9/24/04 bearing 1.45% to be repurchased at
$9,410,848 on 9/24/05, collateralized by: $9,000,000
Republic of Ecuador, 12.000% due 11/15/12; Market value
$9,045,000 $ 9,274,500
4,075,976 Reverse Repurchase Agreement with JPMorgan Chase & Co.,
dated 10/27/04 0.850% to be repurchased at $4,111,103 on
10/27/05, collateralized by: $2,725,000 United Mexican
States, 11.375% 9/15/16; Market value $4,063,656 4,075,976
20,854,471 Reverse Repurchase Agreement with JPMorgan Chase & Co.,
dated 10/27/04 bearing 0.900% to be repurchased at
$21,044,768 on 10/27/05, collateralized by: $19,000,000
Federative Republic of Brazil, C Bond, 8.000% due 4/15/14;
Market value $18,887,188 20,854,471
-----------
TOTAL REVERSE REPURCHASE AGREEMENTS
(Cost -- $34,204,947) $34,204,947
===========
</Table>
PAGE 24
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2004, the Fund had the following open futures contracts:
<Table>
<Caption>
NUMBER
OF UNREALIZED
CONTRACTS TO SELL CONTRACTS EXPIRATION BASIS VALUE MARKET VALUE LOSS
- ----------------- --------- ---------- ----------- ------------ ----------
U.S. Treasury 10 Year Note... 400 12/04 $44,432,924 $45,425,000 $ (992,076)
==========
</Table>
The following written covered call option transactions occurred during the year
ended October 31, 2004:
<Table>
<Caption>
NUMBER OF
CONTRACTS PREMIUMS
--------- --------
Options written, outstanding at, October 31, 2003........... -- $ 0
Options written............................................. 12,314 39,405
Options closed.............................................. (12,314) (39,405)
------- --------
Options written, outstanding at October 31, 2004............ -- $ 0
======= ========
</Table>
At October 31, 2004, the Fund held purchased call option contracts having a
market value of $660,000 and a total cost of $791,200.
At October 31, 2004, the Fund loaned securities having a market value of
$1,813,835 and received cash collateral amounting to $1,863,890, which was
invested in the State Street Navigator Securities Lending Trust Prime Portfolio,
a Rule 2a-7 money market fund.
For the year ended October 31, 2004, income earned from securities lending by
the Fund was $9,588.
At October 31, 2004, the Fund held loan participations with a total cost of
$6,451,496 and a total market value of $6,690,325.
NOTE 4. LOAN
At October 31, 2004, the Fund had a $66,000,000 loan available pursuant to a
revolving credit and security agreement, of which the Fund had $60,000,000
outstanding with CXC, LLC (the "Lender"), an affiliate of Citigroup, a
commercial paper conduit issuer for which Citicorp North America, Inc., an
affiliate of the Adviser, acts as administrative agent. The loans generally bear
interest at a variable rate based on the weighted average interest rates of the
underlying commercial paper or LIBOR, plus any applicable margin. Securities
held by the Fund are subject to a lien, granted to the lenders, to the extent of
the borrowing outstanding and any additional expenses. For the year ended
October 31, 2004, the annualized weighted average interest rate of the loan was
2.34%. The Fund paid interest expense related to the loan of $1,371,096.
PAGE 25
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 5. DIVIDENDS SUBSEQUENT TO OCTOBER 31, 2004
On July 29, 2004, the Board of Directors declared a dividend from net investment
income in the amount of $0.11875 per share, payable on November 26, 2004 to
shareholders of record on November 16, 2004.
On October 22, 2004, the Board of Directors declared three dividends from net
investment income, each in the amount of $0.11875 per share, payable on December
17, 2004, January 28, 2004 and February 25, 2004 to shareholders of record on
December 7, 2004, January 19, 2005 and February 15, 2005, respectively.
Finally, the Fund declared a special dividend from net investment income in the
amount of $0.0500 per share payable on December 17, 2004 to shareholders of
record on December 7, 2004.
NOTE 6. INCOME TAX INFORMATION & DISTRIBUTION TO SHAREHOLDERS
The tax character of distributions paid during the fiscal years ended October
31, was as follows:
<Table>
<Caption>
2004 2003
----------- -----------
Ordinary income............................................. $17,834,602 $18,873,675
Net long-term capital gains................................. 599,183 --
----------- -----------
Total distributions paid.................................... $18,433,785 $18,873,675
=========== ===========
</Table>
As of October 31, 2004, the components of accumulated earnings on a tax basis
were as follows:
<Table>
Undistributed long-term capital gain -- net................. $ 831,124
Other book/tax temporary differences........................ 992,076*
Unrealized appreciation..................................... 18,942,479**
-----------
Total accumulated earnings.................................. $20,765,679
===========
</Table>
- --------------------------------------------------------------------------------
* Other book/tax temporary differences are attributable primarily to the
realization for tax purposes of unrealized gains (losses) on certain futures
contracts.
** The difference between book-basis and tax-basis unrealized appreciation is
attributable primarily to the tax deferral of losses on wash sales, the
difference between book and tax amortization methods for premiums on fixed
income securities and the difference between book and tax basis as a result
of investments in Passive Foreign Investment Companies.
PAGE 26
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 7. ADDITIONAL INFORMATION
In connection with an investigation previously disclosed by Citigroup, the Staff
of the Securities and Exchange Commission ("SEC") has notified Citigroup Asset
Management ("CAM"), the Citigroup business unit that includes the funds'
investment manager and other investment advisory companies; Citicorp Trust Bank
("CTB"), an affiliate of CAM; Thomas W. Jones, the former CEO of CAM; and three
other individuals, one of whom is an employee and the other two of whom were
former employees of CAM, that the SEC Staff is considering recommending a civil
injunctive action and/or an administrative proceeding against each of them
relating to the creation and operation of an internal transfer agent unit to
serve various CAM-managed funds.
In 1999, CTB entered the transfer agent business. CTB hired an unaffiliated
subcontractor to perform some of the transfer agent services. The subcontractor,
in exchange, had signed a separate agreement with CAM in 1998 that guaranteed
investment management revenue to CAM and investment banking revenue to a CAM
affiliate. The subcontractor's business was later taken over by PFPC Inc., and
at that time the revenue guarantee was eliminated and a one-time payment was
made by the subcontractor to a CAM affiliate.
CAM did not disclose the revenue guarantee when the boards of various
CAM-managed funds hired CTB as transfer agent. Nor did CAM disclose to the
boards of the various CAM-managed funds the one-time payment received by the CAM
affiliate when it was made.
In addition, the SEC Staff has indicated that it is considering recommending
action based on the adequacy of the disclosures made to the fund boards that
approved the transfer agency arrangement, CAM's initiation and operation of, and
compensation for, the transfer agent business and CAM's retention of, and
agreements with, the subcontractor.
Citigroup is cooperating fully in the investigation and will seek to resolve the
matter in discussions with the SEC Staff. Although there can be no assurance,
Citigroup does not believe that this matter will have a material adverse effect
on the Fund. As previously disclosed, CAM has already agreed to pay the
applicable funds, primarily through fee waivers, a total of approximately $17
million (plus interest) that is the amount of the revenue received by Citigroup
relating to the revenue guarantee.
The Fund did not implement the contractual arrangement described above and
therefore will not receive any portion of the payment.
PAGE 27
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations, of
changes in net assets, of cash flows, and the financial highlights present
fairly, in all material respects, the financial position of Salomon Brothers
Worldwide Income Fund Inc. ("Fund") at October 31, 2004, the results of its
operations and its cash flows for the year then ended, the changes in its net
assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended, in conformity
with accounting principles generally accepted in the United States of America.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2004 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
New York, New York
December 21, 2004
PAGE 28
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
ADDITIONAL INFORMATION (unaudited)
INFORMATION ABOUT DIRECTORS AND OFFICERS
The business and affairs of Salomon Brothers Worldwide Income Fund Inc. ("Fund")
are managed under the direction of the Board of Directors. Information
pertaining to the Directors and Officers of the Fund is set forth below:
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
TERM OF PRINCIPAL OVERSEEN BY
POSITION(S) OFFICE(1) AND OCCUPATION(S) DIRECTOR OTHER
HELD WITH LENGTH OF DURING PAST (INCLUDING BOARD MEMBERSHIPS
NAME, ADDRESS AND AGE FUND(1) TIME SERVED FIVE YEARS THE FUND) HELD BY DIRECTOR
- ----------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED DIRECTORS:
Carol L. Colman Director and Since President, Colman 37 None
Colman Consulting Co. Member of the 2002 Consulting Co.
278 Hawley Road Nominating and
North Salem, NY 10560 Audit Committees,
DOB: 1/23/46 Class II
Daniel P. Cronin Director and Since Formerly, Associate 34 None
24 Woodlawn Avenue Member of the 1993 General Counsel,
New Rochelle, NY 10804 Nominating and Pfizer Inc.
DOB: 2/13/46 Audit Committees,
Class III
Leslie H. Gelb Director and Since President, Emeritus 34 Director of two
150 East 69th Street Member of the 2001 and Senior registered
New York, NY 10021 Nominating and Board Fellow, investment companies
DOB: 3/4/37 Audit Committees, the Council on advised by Advantage
Class I Foreign Relations; Advisers, Inc.
formerly, ("Advantage")
Columnist, Deputy
Editorial
Page Editor and
Editor, Op-Ed Page,
The New York Times
William R. Hutchinson Director and Since 2003 President, W. R. 44 Associated
535 N. Michigan Avenue Member of the Hutchinson & Banc-Corp.
Suite 1012 Nominating and Associates Inc.;
Chicago, IL 60611 Audit Committees, formerly Group Vice
DOB: 10/9/42 Class II President, Mergers
and Acquisitions,
BP Amoco
Riordan Roett Director and Since Professor and 34 None
The Johns Hopkins University Member of the 1995 Director, Latin
1710 Massachusetts Ave., NW Nominating and American Studies
Washington, DC 20036 Audit Committees, Program, Paul H.
DOB: 9/10/38 Class III Nitze
School of Advanced
International
Studies, The Johns
Hopkins University
Jeswald W. Salacuse Director and Since Henry J. Braker 34 Director of two
Tufts University, The Member of the 1993 Professor of registered
Fletcher School of Nominating and Commercial Law and investment companies
Law & Diplomacy Audit Committees, formerly Dean, The advised by Advantage
160 Packard Avenue Class I Fletcher School of
Medford, MA 02155 Law & Diplomacy,
DOB: 1/28/38 Tufts University
</Table>
PAGE 29
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
ADDITIONAL INFORMATION (unaudited)
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
TERM OF PRINCIPAL OVERSEEN BY
POSITION(S) OFFICE(1) AND OCCUPATION(S) DIRECTOR OTHER
HELD WITH LENGTH OF DURING PAST (INCLUDING BOARD MEMBERSHIPS
NAME, ADDRESS AND AGE FUND(1) TIME SERVED FIVE YEARS THE FUND) HELD BY DIRECTOR
- ----------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR:
R. Jay Gerken, CFA(2) Director, Since Managing Director 221 None
Citigroup Asset Management Chairman and 2002 of Citigroup Global
("CAM") Chief Executive Markets Inc.
399 Park Avenue, 4th Floor Officer, Class II ("CGM"); Chairman,
New York, NY 10022 President and Chief
DOB: 4/5/51 Executive Officer
of Smith Barney
Fund Management LLC
("SBFM"), Travelers
Investment Adviser,
Inc. ("TIA") and
Citi Fund
Management Inc.
("CFM"); President
and Chief Executive
Officer of certain
mutual funds
associated with
Citigroup Inc.
("Citigroup");
Formerly, Portfolio
Manager of Smith
Barney Allocation
Series Inc. (from
1996-2001) and
Smith Barney Growth
and Income Fund
(from 1996-2000)
OFFICERS:
Peter J. Wilby, CFA President Since Managing Director N/A N/A
CAM 2002 of CGM and Salomon
399 Park Avenue, 4th Floor Brothers Asset
New York, NY 10022 Executive Vice 1993- Management Inc
DOB: 11/30/58 President 2002 ("SBAM")
Andrew B. Shoup Senior Vice Since 2003 Director of CAM; N/A N/A
CAM President and Senior Vice
125 Broad Street, 10th Floor Chief President and Chief
New York, NY 10004 Administrative Administrative
DOB: 8/1/56 Officer Officer of mutual
funds associated
with Citigroup;
Head of
International Funds
Administration of
CAM from 2001 to
2003; Director of
Global Funds
Administration of
CAM from 2000 to
2001; Head of U.S.
Citibank Funds
Administration of
CAM from 1998 to
2000
</Table>
PAGE 30
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
ADDITIONAL INFORMATION (unaudited)
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
TERM OF PRINCIPAL OVERSEEN BY
POSITION(S) OFFICE(1) AND OCCUPATION(S) DIRECTOR OTHER
HELD WITH LENGTH OF DURING PAST (INCLUDING BOARD MEMBERSHIPS
NAME, ADDRESS AND AGE FUND(1) TIME SERVED FIVE YEARS THE FUND) HELD BY DIRECTOR
- ----------------------------------------------------------------------------------------------------------------------------
Frances M. Guggino Chief Financial Since Vice President of N/A N/A
CAM Officer and 2004 CGM:
125 Broad Street, 10th Floor Treasurer Chief Financial
New York, NY 10004 Officer and
DOB: 9/8/57 Controller 2003 Treasurer of
certain mutual
funds associated
with Citigroup;
Controller of
certain mutual
funds associated
with Citigroup
James E. Craige, CFA Executive Vice Since Managing Director N/A N/A
CAM President 1996 of CGM and SBAM
399 Park Avenue, 4th Floor since December
New York, NY 10022 1998;
DOB: 10/1/67 Director of CGM and
SBAM since January
1998 and Vice
President of CGM
and SBAM from May
1992 to January
1998
Thomas K. Flanagan, CFA Executive Vice Since Managing Director N/A N/A
CAM President 1994 of SBAM (since
399 Park Avenue, 4th Floor 1998); Director of
New York, NY 10022 SBAM and CGM (from
DOB: 1/26/53 1991 to 1999)
Maureen O'Callaghan Executive Vice Since Managing Director N/A N/A
SBAM President 1996 of SBAM (since
399 Park Avenue, 4th Floor January 2001);
New York, NY 10022 Director and Vice
DOB: 3/19/64 President of SBAM
(prior to 2001)
Beth A. Semmel, CFA Executive Vice Since Managing Director N/A N/A
CAM President 1996 of CGM and SBAM
399 Park Avenue, 4th Floor since December
New York, NY 10022 1998; Director of
DOB: 9/10/60 CGM and SBAM since
January 1996
</Table>
PAGE 31
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
ADDITIONAL INFORMATION (unaudited)
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
TERM OF PRINCIPAL OVERSEEN BY
POSITION(S) OFFICE(1) AND OCCUPATION(S) DIRECTOR OTHER
HELD WITH LENGTH OF DURING PAST (INCLUDING BOARD MEMBERSHIPS
NAME, ADDRESS AND AGE FUND(1) TIME SERVED FIVE YEARS THE FUND) HELD BY DIRECTOR
- ----------------------------------------------------------------------------------------------------------------------------
Andrew Beagley Chief Compliance Since Compliance Officer, N/A N/A
CAM Officer 2004 Chief Compliance
399 Park Avenue, 4th Floor Officer and Vice
New York, NY 10022 President of
DOB: 10/9/62 certain mutual
funds associated
with Citigroup;
Director of
Compliance, Europe,
the Middle East and
Africa, Citigroup
Asset Management
(from 1999 to
2000); Compliance
Officer, Salomon
Brothers Asset
Management Limited,
Smith Barney Global
Capital Management
Inc., Salomon
Brothers Asset
Management Asia
Pacific Limited
(from 1997 to 1999)
Wendy S. Setnicka Controller Since Vice President of N/A N/A
CAM 2004 CAM
125 Broad Street, 10th Floor Controller of
New York, NY 10004 certain mutual
DOB: 6/30/64 funds associated
with Citigroup;
Assistant
Controller of CAM
(from 2002 to 2004)
Robert I. Frenkel Secretary and Since 2003 Managing Director N/A N/A
CAM Chief Legal and General Counsel
300 First Stamford Place Officer of Global Mutual
4th Floor Funds for CAM and
Stamford, CT 06902 its predecessor
DOB: 12/12/54 (since 1994);
Secretary of CFM;
Secretary and Chief
Legal Officer of
mutual funds
associated with
Citigroup
</Table>
- ---------------
<Table>
(1) The Fund's Board of Directors is divided into three classes:
Class I, Class II and Class III. The terms of office of the
Class I, II and III Directors expire at the Annual Meetings
of Stockholders in the year 2005, year 2006 and year 2007,
respectively, or thereafter in each case when their
respective successors are duly elected and qualified. The
Fund's executive officers are chosen annually to hold office
until their successors are duly elected and qualified.
(2) Mr. Gerken is an "interested person" of the Fund as defined
in the Investment Company Act of 1940, as amended, because
Mr. Gerken is an officer of SBFM and certain of its
affiliates.
</Table>
PAGE 32
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid monthly by Salomon Brothers
Worldwide Income Fund Inc. (the "Fund") during the taxable year ended October
31, 2004 are taxable as ordinary income to shareholders.
Additionally, the Fund paid long-term capital gains of $0.0370 per share to
shareholders of record on October 13, 2004. The Fund also designates an
additional $119,894 of long-term capital gains for the taxable year.
PAGE 33
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
ANNUAL CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
CERTIFICATION (unaudited)
The Fund's CEO has submitted to the NYSE the required annual certification and,
the Fund also has included the certifications of the Fund's CEO and CFO required
by Section 302 of the Sarbanes-Oxley Act in the Fund's Form N-CSR filed with the
SEC, for the period of this report.
PAGE 34
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
FORM OF AMENDED AND RESTATED TERMS AND CONDITIONS OF DIVIDEND REINVESTMENT
PLAN (unaudited)
Pursuant to certain rules of the Securities and Exchange Commission, the
following additional disclosure is provided.
1. Each shareholder initially purchasing shares of common stock ("Shares") of
Salomon Brothers Worldwide Income Fund Inc. ("Fund") on or after September 6,
1996 will be deemed to have elected to be a participant in the Amended and
Restated Dividend Reinvestment Plan ("Plan"), unless the shareholder
specifically elects in writing (addressed to the Agent at the address below or
to any nominee who holds Shares for the shareholder in its name) to receive all
income dividends and distributions of capital gains in cash, paid by check,
mailed directly to the record holder by or under the direction of American Stock
Transfer & Trust Company as the Fund's dividend-paying agent ("Agent"). A
shareholder whose Shares are held in the name of a broker or nominee who does
not provide an automatic reinvestment service may be required to take such
Shares out of "street name" and register such Shares in the shareholder's name
in order to participate, otherwise dividends and distributions will be paid in
cash to such shareholder by the broker or nominee. Each participant in the Plan
is referred to herein as a "Participant." The Agent will act as Agent for each
Participant, and will open accounts for each Participant under the Plan in the
same name as their Shares are registered.
2. Unless the Fund declares a dividend or distribution payable only in the form
of cash, the Agent will apply all dividends and distributions in the manner set
forth below.
3. If, on the determination date, the market price per Share equals or exceeds
the net asset value per Share on that date (such condition, a "market premium"),
the Agent will receive the dividend or distribution in newly issued Shares of
the Fund on behalf of Participants. If, on the determination date, the net asset
value per Share exceeds the market price per Share (such condition, a "market
discount"), the Agent will purchase Shares in the open-market. The determination
date will be the fourth New York Stock Exchange trading day (a New York Stock
Exchange trading day being referred to herein as a "Trading Day") preceding the
payment date for the dividend or distribution. For purposes herein, "market
price" will mean the average of the highest and lowest prices at which the
Shares sell on the New York Stock Exchange on the particular date, or if there
is no sale on that date, the average of the closing bid and asked quotations.
4. Purchases made by the Agent will be made as soon as practicable commencing on
the Trading Day following the determination date and terminating no later than
30 days after the dividend or distribution payment date except where temporary
curtailment or suspension of purchase is necessary to comply with applicable
provisions of federal securities law; provided,
PAGE 35
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
FORM OF AMENDED AND RESTATED TERMS AND CONDITIONS OF DIVIDEND REINVESTMENT
PLAN (unaudited) (continued)
however, that such purchases will, in any event, terminate on the Trading Day
prior to the "ex-dividend" date next succeeding the dividend or distribution
payment date.
5. If (i) the Agent has not invested the full dividend amount in open-market
purchases by the date specified in paragraph 4 above as the date on which such
purchases must terminate or (ii) a market discount shifts to a market premium
during the purchase period, then the Agent will cease making open-market
purchases and will receive the uninvested portion of the dividend amount in
newly issued Shares (x) in the case of (i) above, at the close of business on
the date the Agent is required to terminate making open-market purchases as
specified in paragraph 4 above or (y) in the case of (ii) above, at the close of
business on the date such shift occurs; but in no event prior to the payment
date for the dividend or distribution.
6. In the event that all or part of a dividend or distribution amount is to be
paid in newly issued Shares, such Shares will be issued to Participants in
accordance with the following formula: (i) if, on the valuation date, the net
asset value per share is less than or equal to the market price per Share, then
the newly issued Shares will be valued at net asset value per Share on the
valuation date; provided, however, that if the net asset value is less than 95%
of the market price on the valuation date, then such Shares will be issued at
95% of the market price and (ii) if, on the valuation date, the net asset value
per share is greater than the market price per Share, then the newly issued
Shares will be issued at the market price on the valuation date. The valuation
date will be the dividend or distribution payment date, except that with respect
to Shares issued pursuant to paragraph 5 above, the valuation date will be the
date such Shares are issued. If a date that would otherwise be a valuation date
is not a Trading Day, the valuation date will be the next preceding Trading Day.
7. The open-market purchases provided for above may be made on any securities
exchange on which the Shares of the Fund are traded, in the over-the-counter
market or in negotiated transactions, and may be on such terms as to price,
delivery and otherwise as the Agent shall determine. Funds held by the Agent
uninvested will not bear interest, and it is understood that, in any event, the
Agent shall have no liability in connection with any inability to purchase
Shares within the time periods herein provided, or with the timing of any
purchases effected. The Agent shall have no responsibility as to the value of
the Shares acquired for the Participant's account. The Agent may commingle
amounts of all Participants to be used for open-market purchases of Shares and
the price per Share allocable to each Participant in connection with such
purchases shall be the average price (including brokerage commissions) of all
Shares purchased by the Agent.
PAGE 36
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
FORM OF AMENDED AND RESTATED TERMS AND CONDITIONS OF DIVIDEND REINVESTMENT
PLAN (unaudited) (continued)
8. The Agent will maintain all Participant accounts in the Plan and will furnish
written confirmations of all transactions in each account, including information
needed by Participants for personal and tax records. The Agent will hold Shares
acquired pursuant to the Plan in noncertificated form in the Participant's name
or that of its nominee, and each Participant's proxy will include those Shares
purchased pursuant to the Plan. The Agent will forward to Participants any proxy
solicitation material and will vote any Shares so held for Participants only in
accordance with the proxy returned by Participants to the Fund. Upon written
request, the Agent will deliver to Participants, without charge, a certificate
or certificates for the full Shares.
9. The Agent will confirm to Participants each acquisition made for their
respective accounts as soon as practicable but not later than 60 days after the
date thereof. Although Participants may from time to time have an undivided
fractional interest (computed to three decimal places) in a Share of the Fund,
no certificates for fractional shares will be issued. Dividends and
distributions on fractional shares will be credited to each Participant's
account. In the event of termination of a Participant's account under the Plan,
the Agent will adjust for any such undivided fractional interest in cash at the
market value of the Fund's Shares at the time of termination less the pro rata
expense of any sale required to make such an adjustment.
10. Any share dividends or split shares distributed by the Fund on Shares held
by the Agent for Participants will be credited to their respective accounts. In
the event that the Fund makes available to Participants rights to purchase
additional Shares or other securities, the Shares held for Participants under
the Plan will be added to other Shares held by the Participants in calculating
the number of rights to be issued to Participants.
11. The Agent's service fee for handling capital gains distributions or income
dividends will be paid by the Fund. Participants will be charged a pro rata
share of brokerage commissions on all open-market purchases.
12. Participants may terminate their accounts under the Plan by notifying the
Agent in writing. Such termination will be effective immediately if notice is
received by the Agent not less than ten days prior to any dividend or
distribution record date; otherwise such termination will be effective on the
first trading day after the payment date for such dividend or distribution with
respect to any subsequent dividend or distribution. The Plan may be amended or
terminated by the Fund as applied to any dividend or capital gains distribution
paid subsequent to written notice of the change or termination sent to
Participants at least 30 days prior to the record date for the dividend or
capital gains distribution. The Plan may
PAGE 37
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
FORM OF AMENDED AND RESTATED TERMS AND CONDITIONS OF DIVIDEND REINVESTMENT
PLAN (unaudited) (continued)
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
be amended or terminated by the Agent, with the Fund's prior written consent, on
at least 30 days' written notice to Plan Participants. Notwithstanding the
preceding two sentences, the Agent or the Fund may amend or supplement the Plan
at any time or times when necessary or appropriate to comply with applicable law
or rules or policies of the Securities and Exchange Commission or any other
regulatory authority. Upon any termination, the Agent will cause a certificate
or certificates for the full Shares held by each Participant under the Plan and
cash adjustment for any fraction to be delivered to each Participant without
charge. If the Participant elects by notice to the Agent in writing in advance
of such termination to have the Agent sell part or all of a Participant's Shares
and remit the proceeds to Participant, the Agent is authorized to deduct a $2.50
fee plus brokerage commission for this transaction from the proceeds.
13. Any amendment or supplement shall be deemed to be accepted by each
Participant unless, prior to the effective date thereof, the Agent receives
written notice of the termination of the Participant's account under the Plan.
Any such amendment may include an appointment by the Agent in its place and
stead of a successor Agent under these terms and conditions, with full power and
authority to perform all or any of the acts to be performed by the Agent under
these terms and conditions. Upon any such appointment of an Agent for the
purpose of receiving dividends and distributions, the Fund will be authorized to
pay to such successor Agent, for each Participant's account, all dividends and
distributions payable on Shares of the Fund held in each Participant's name or
under the Plan for retention or application by such successor Agent as provided
in these terms and conditions.
14. In the case of Participants, such as banks, broker-dealers or other
nominees, which hold Shares for others who are beneficial owners ("Nominee
Holders"), the Agent will administer the Plan on the basis of the number of
Shares certified from time to time by each Nominee Holder as representing the
total amount registered in the Nominee Holder's name and held for the account of
beneficial owners who are to participate in the Plan.
15. The Agent shall at all times act in good faith and use its best efforts
within reasonable limits to insure the accuracy of all services performed under
this Agreement and to comply with applicable law, but assumes no responsibility
and shall not be liable for loss or damage due to errors unless such error is
caused by its negligence, bad faith, or willful misconduct or that of its
employees.
PAGE 38
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
FORM OF AMENDED AND RESTATED TERMS AND CONDITIONS OF DIVIDEND REINVESTMENT
PLAN (unaudited) (continued)
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
16. All correspondence concerning the Plan should be directed to the Agent at 59
Maiden Lane, New York, New York 10038.
----------------------------
PAGE 39
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
ADDITIONAL SHAREHOLDER INFORMATION (unaudited)
The report is transmitted to the shareholders of the Fund for their information.
This is not a prospectus, circular or representation intended for use in the
purchase of shares of the Fund or any securities mentioned in this report.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock in the open market.
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 are available on the Commission's website at
www.sec.gov. The Funds' Forms N-Q may be reviewed and copied at the Commission's
Public Reference Room in Washington D.C., and information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330. To obtain
information on Form N-Q from the Fund, shareholders can call 1-800-446-1013.
Information on how the Fund voted proxies relating to portfolio securities
during the 12 month period ended June 30, 2004 and a description of the policies
and procedures that the Fund uses to determine how to vote proxies relating to
portfolio securities is available (1) without charge, upon request, by calling
1-800-446-1013, (2) on the Fund's website at www.citigroupAM.com and (3) on the
SEC's website at www.sec.gov.
PAGE 40
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
DIRECTORS
CAROL L. COLMAN
DANIEL P. CRONIN
LESLIE H. GELB
R. JAY GERKEN, CFA
WILLIAM R. HUTCHINSON
RIORDAN ROETT
JESWALD W. SALACUSE
OFFICERS
R. JAY GERKEN, CFA
Chairman
PETER J. WILBY, CFA
President
ANDREW B. SHOUP
Senior Vice President and
Chief Administrative Officer
FRANCES M. GUGGINO
Chief Financial Officer
and Treasurer
JAMES E. CRAIGE, CFA
Executive Vice President
THOMAS K. FLANAGAN, CFA
Executive Vice President
MAUREEN O'CALLAGHAN
Executive Vice President
BETH A. SEMMEL, CFA
Executive Vice President
ANDREW BEAGLEY
Chief Compliance Officer
WENDY S. SETNICKA
Controller
ROBERT I. FRENKEL
Secretary and
Chief Legal Officer
SALOMON BROTHERS
WORLDWIDE INCOME FUND INC.
125 Broad Street
10th Floor, MF-2
New York, New York 10004
Telephone 1-888-777-0102
INVESTMENT ADVISER AND ADMINISTRATOR
Salomon Brothers Asset
Management Inc
399 Park Avenue
New York, New York 10022
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
TRANSFER AGENT
American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10038
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, New York 10017
LEGAL COUNSEL
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017-3909
NEW YORK STOCK EXCHANGE SYMBOL
SBW
(This page intentionally left blank.)
SALOMON BROTHERS
WORLDWIDE INCOME FUND INC.
ANNUAL REPORT
October 31, 2004
[WORLD GRAPHIC]
[SALOMON BROTHERS LOGO]
AMERICAN STOCK TRANSFER & TRUST COMPANY
59 MAIDEN LANE
NEW YORK, NEW YORK 10038
SBWANN 10/04
04-7582
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Directors of the registrant has determined that William R.
Hutchinson, the Chairman of the Board's Audit Committee, possesses the
technical attributes identified in Instruction 2(b) of Item 3 to Form
N-CSR to qualify as an "audit committee financial expert," and has
designated Mr. Hutchinson as the Audit Committee's financial expert.
Mr. Hutchinson is an "independent" Director pursuant to paragraph
(a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees for Salomon Brothers Worldwide Income Fund Inc.
were $53,000 and $53,000 for the years ended 10/31/04 and
10/31/03, respectively.
(b) Audit-Related Fees for Salomon Brothers Worldwide Income Fund
Inc. were $85,000 and $85,000 for the years ended 10/31/04 and
10/31/03, respectively. These amounts represent procedures
performed and prepared for agreed upon procedures letter in
accordance with the terms of the Revolving Credit Facility.
In addition, there were no Audit-Related Fees billed in the
years ended 10/31/04 and 10/31/03 for assurance and related
services by the Accountant to the Registrant's investment
adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling,
controlled by or under common control with the investment
adviser that provides ongoing services to the Salomon Brothers
Worldwide Income Fund Inc. ("service affiliates"), that were
reasonably related to the performance of the annual audit of
the service affiliates. Accordingly, there were no such fees
that required pre-approval by the Audit Committee for the
period May 6, 2003 to October 31,2004 (prior to May 6, 2003
services provided by the Accountant were not required to be
pre-approved).
(c) Tax Fees for Salomon Brothers Worldwide Income Fund Inc. were
$5,700 and $5,700 for the years ended 10/31/04 and 10/31/03,
respectively. These amounts represent aggregate fees paid for
tax compliance and tax advice, which includes (the filing and
amendment of federal, state and local income tax returns,
timely RIC qualification review and tax distribution and
analysis planning), rendered by the Accountant to Salomon
Brothers Worldwide Income Fund Inc.
There were no fees billed for tax services by the Accountants
to service affiliates for the period May 6, 2003 through
October 31, 2004 that required pre-approval by the Audit
Committee.
(d) There were no All Other Fees for Salomon Brothers Worldwide
Income Fund Inc. for the years ended 10/31/04 and 10/31/03.
All Other Fees. The aggregate fees billed for all other
non-audit services rendered by the Accountant to Salomon
Brothers Asset Management ("SBAM"), and any entity
controlling, controlled by or under common control with SBAM
that provided ongoing services to Salomon Brothers Worldwide
Income Fund Inc., requiring pre-approval by the Audit
Committee for the period May 6, 2003 through October 31, 2004,
which included the issuance of reports on internal control
under SAS No. 70 relating to various Citigroup Asset
Management ("CAM") entities, were $790,000, all of which were
pre-approved by the Audit Committee.
(e) (1) Audit Committee's pre-approval policies and procedures
described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.
The Charter for the Audit Committee (the "Committee") of the
Board of each registered investment company (the "Fund")
advised by Smith Barney Fund Management LLC or Salomon
Brothers Asset Management Inc or one of their affiliates
(each, an "Adviser") requires that the Committee shall approve
(a) all audit and permissible non-audit services to be
provided to the Fund and (b) all permissible non-audit
services to be provided by the Fund's independent auditors to
the Adviser and any Covered Service Providers if the
engagement relates directly to the operations and financial
reporting of the Fund. The Committee may implement policies
and procedures by which such services are approved other than
by the full Committee.
The Committee shall not approve non-audit services that the
Committee believes may impair the independence of the
auditors. As of the date of the approval of this Audit
Committee Charter, permissible non-audit services include any
professional services (including tax services), that are not
prohibited services as described below, provided to the Fund
by the independent auditors, other than those provided to the
Fund in connection with an audit or a review of the financial
statements of the Fund. Permissible non-audit services may not
include: (i) bookkeeping or other services related to the
accounting records or financial statements of the Fund; (ii)
financial information systems design and implementation; (iii)
appraisal or valuation services, fairness opinions or
contribution-in-kind reports; (iv) actuarial services; (v)
internal audit outsourcing services; (vi) management functions
or human resources; (vii) broker or dealer, investment adviser
or investment banking services; (viii) legal services and
expert services unrelated to the audit; and (ix) any other
service the Public Company Accounting Oversight Board
determines, by regulation, is impermissible.
Pre-approval by the Committee of any permissible non-audit
services is not required so long as: (i) the aggregate amount
of all such permissible non-audit services provided to the
Fund, the Adviser and any service providers controlling,
controlled by or under common control with the Adviser that
provide ongoing services to the Fund ("Covered Service
Providers") constitutes not more than 5% of the total amount
of revenues paid to the independent auditors during the fiscal
year in which the permissible non-audit services are provided
to (a) the Fund, (b) the Adviser and (c) any entity
controlling, controlled by or under common control with the
Adviser that provides ongoing services to the Fund during the
fiscal year in which the services are provided that would have
to be approved by the Committee; (ii) the permissible
non-audit services were not recognized by the Fund at the time
of the engagement to be non-audit services; and (iii) such
services are promptly brought to the attention of the
Committee and approved by the Committee (or its delegate(s))
prior to the completion of the audit.
(2) For the Salomon Brothers Worldwide Income Fund Inc., the
percentage of fees that were approved by the audit committee,
with respect to: Audit-Related Fees were 100% and 100% for the
years ended 10/31/04 and 10/31/03; Tax Fees were 100% and 100%
for the years ended 10/31/04 and 10/31/03; and Other Fees were
100% and 100% for the years ended 10/31/04 and 10/31/03.
(f) N/A
(g) Non-audit fees billed by the Accountant for services rendered
to Salomon Brothers Worldwide Income Fund Inc. and CAM and any
entity controlling, controlled by, or under common control
with CAM that provides ongoing services to Salomon Brothers
Worldwide Income Fund Inc. were $2.2 million and $6.4 million
for the years ended 10/31/04 and 10/31/03.
(h) Yes. The Salomon Brothers Worldwide Income Fund Inc.'s Audit
Committee has considered whether the provision of non-audit
services that were rendered to Service Affiliates which were
not pre-approved (not requiring pre-approval) is compatible
with maintaining the Auditor's independence. All services
provided by the Accountant to the Salomon Brothers Worldwide
Income Fund Inc. or to Service Affiliates which were required
to be pre-approved were pre-approved as required.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The Board of Directors of the Fund has delegated the authority to
develop policies and procedures relating to proxy voting to the
Manager. The Manager is part of Citigroup Asset Management ("CAM"), a
group of investment adviser affiliates of Citigroup, Inc.
("Citigroup"). Along with the other investment advisers that comprise
CAM, the Manager has adopted a set of proxy voting policies and
procedures (the "Policies") to ensure that the Manager votes proxies
relating to equity securities in the best interest of clients.
In voting proxies, the Manager is guided by general fiduciary
principles and seeks to act prudently and solely in the best interest
of clients. The Manager attempts to consider all factors that could
affect the value of the investment and will vote proxies in the manner
that it believes will be consistent with efforts to maximize
shareholder values. The Manager may utilize an external service
provider to provide it with information and/or a recommendation with
regard to proxy votes. However, such recommendations do not relieve the
Manager of its responsibility for the proxy vote.
In the case of a proxy issue for which there is a stated position in
the Policies, CAM generally votes in accordance with such stated
position. In the case of a proxy issue for which there is a list of
factors set forth in the Policies that CAM considers in voting on such
issue, CAM votes on a case-by-case basis in accordance with the general
principles set forth above and considering such enumerated factors. In
the case of a proxy issue for which there is no stated position or list
of factors that CAM considers in voting on such issue, CAM votes on a
case-by-case basis in accordance with the general principles set forth
above. Issues for which there is a stated position set forth in the
Policies or for which there is a list of factors set forth in the
Policies that CAM considers in voting on such issues fall into a
variety of categories, including election of directors, ratification of
auditors, proxy and tender offer defenses, capital structure issues,
executive and director compensation, mergers and corporate
restructurings, and social and environmental issues. The stated
position on an issue set forth in the Policies can always be
superseded, subject to the duty to act solely in the best interest of
the beneficial owners of accounts, by the investment management
professionals responsible for the account whose shares are being voted.
Issues applicable to a particular industry may cause CAM to abandon a
policy that would have otherwise applied to issuers generally. As a
result of the independent investment advisory services provided by
distinct CAM business units, there may be occasions when different
business units or different portfolio managers within the same business
unit vote differently on the same issue.
In furtherance of the Manager's goal to vote proxies in the best
interest of clients, the Manager follows procedures designed to
identify and address material conflicts that may arise between the
Manager's interests and those of its clients before voting proxies on
behalf of such clients. To seek to identify conflicts of interest, CAM
periodically notifies CAM employees (including employees of the
Manager) in writing that they are under an obligation (i) to be aware
of the potential for conflicts of interest with respect to voting
proxies on behalf of client accounts both as a result of their personal
relationships and due to special circumstances that may arise during
the conduct of CAM's and the Manager's business, and (ii) to bring
conflicts of interest of which they become aware to the attention of
compliance personnel. The Manager also maintains and considers a list
of significant relationships that could present a conflict of interest
for the Manager in voting proxies. The Manager is also sensitive to the
fact that a significant, publicized relationship between an issuer and
a non-CAM affiliate might appear to the public to influence the
manner in which the Manager decides to vote a proxy with respect to
such issuer. Absent special circumstances or a significant, publicized
non-CAM affiliate relationship that CAM or the Manager for prudential
reasons treats as a potential conflict of interest because such
relationship might appear to the public to influence the manner in
which the Manager decides to vote a proxy, the Manager generally takes
the position that non-CAM relationships between Citigroup and an issuer
(e.g. investment banking or banking) do not present a conflict of
interest for the Manager in voting proxies with respect to such issuer.
Such position is based on the fact that the Manager is operated as an
independent business unit from other Citigroup business units as well
as on the existence of information barriers between the Manager and
certain other Citigroup business units.
CAM maintains a Proxy Voting Committee, of which the Manager personnel
are members, to review and address conflicts of interest brought to its
attention by compliance personnel. A proxy issue that will be voted in
accordance with a stated position on an issue or in accordance with the
recommendation of an independent third party is not brought to the
attention of the Proxy Voting Committee for a conflict of interest
review because the Manager's position is that to the extent a conflict
of interest issue exists, it is resolved by voting in accordance with a
pre-determined policy or in accordance with the recommendation of an
independent third party. With respect to a conflict of interest brought
to its attention, the Proxy Voting Committee first determines whether
such conflict of interest is material. A conflict of interest is
considered material to the extent that it is determined that such
conflict is likely to influence, or appear to influence, the Manager's
decision-making in voting proxies. If it is determined by the Proxy
Voting Committee that a conflict of interest is not material, the
Manager may vote proxies notwithstanding the existence of the conflict.
If it is determined by the Proxy Voting Committee that a conflict of
interest is material, the Proxy Voting Committee is responsible for
determining an appropriate method to resolve such conflict of interest
before the proxy affected by the conflict of interest is voted. Such
determination is based on the particular facts and circumstances,
including the importance of the proxy issue and the nature of the
conflict of interest. Methods of resolving a material conflict of
interest may include, but are not limited to, disclosing the conflict
to clients and obtaining their consent before voting, or suggesting to
clients that they engage another party to vote the proxy on their
behalf.
ITEM 8. [RESERVED]
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal
financial officer have concluded that the registrant's
disclosure controls and procedures (as defined in Rule 30a-
3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act")) are effective as of a date within 90 days of the
filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the
disclosure controls and procedures required by Rule 30a-3(b)
under the 1940 Act and 15d-15(b) under the Securities Exchange
Act of 1934.
(b) There were no changes in the registrant's internal control
over financial reporting (as defined in Rule 30a-3(d) under
the 1940 Act) that occurred during the registrant's last
fiscal half-year (the registrant's second fiscal half-year in
the case of an annual report) that have materially affected,
or are likely to materially affect the registrant's internal
control over financial reporting.
ITEM 11. EXHIBITS.
(a) Code of Ethics attached hereto.
Exhibit 99.CODE ETH
(b) Attached hereto.
Exhibit 99.CERT Certifications pursuant to section 302
of the Sarbanes-Oxley Act of 2002
Exhibit 99.906CERT Certifications pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
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, there unto duly authorized.
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
By: /s/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer of
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
Date: January 3, 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.
By: /s/ R. Jay Gerken
(R. Jay Gerken)
Chief Executive Officer of
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
Date: January 3, 2005
By: /s/ Frances M. Guggino
(Frances M. Guggino)
Chief Financial Officer of
SALOMON BROTHERS WORLDWIDE INCOME FUND INC.
Date: January 3, 2005