<PAGE>
SEMIANNUAL REPORT SEPTEMBER 30, 2000
Prudential
High Yield Total Return Fund, Inc.
Fund Type Junk bond and stock
Objective Total return through high current income
and capital appreciation
(GRAPHIC)
The views expressed in this report and information
about the Fund's portfolio holdings are for the
period covered by this report and are subject to
change thereafter.
This report is not authorized for distribution to
prospective investors unless preceded or
accompanied by a current prospectus.
(LOGO)
<PAGE>
Build on the Rock
Investment Goals and Style
Prudential High Yield Total Return Fund seeks total
return through high current income and capital
appreciation. The Fund invests primarily in
highyield fixed-income securities rated Ba or below
by Moody's Investors Services, BB or below by
Standard & Poor's Rating Group, securities either
rated by another major independent rating service,
and unrated securities of comparable quality, that
is, "junk bonds." Junk bonds have a higher risk of
default of payment of principal and interest. The
Fund also invests in equity-related securities,
convertible securities, and preferred stock. There
can be no assurance that the Fund will achieve its
investment objective.
Portfolio Composition
Sectors expressed as a percentage of
total investments as of 9/30/00
84.6% Corporate Bonds
6.4 Preferred Stocks
2.2 Common Stocks
1.3 Money Market
0.8 Warrants
4.7 Cash & Equivalents
Credit Quality
Expressed as a percentage of total investments
as of 9/30/00
2.8% BBB
14.8 BB
49.7 B
8.7 CCC
1.5 CC
0.1 C
8.2 Not Rated
9.8 Equity
4.4 Short-Term/Cash
Ten Largest Holdings
Expressed as a percentage of
net assets as of 9/30/00
2.3% Nextel Communications, Inc.
1.9 Echostar Broadband Corp.
1.8 Capstar Broadcasting
1.8 Diamond Cable Co.
1.7 AES Corp.
1.7 Trump Atlantic City Assoc.
1.5 Aircraft Funding
1.5 Conseco, Inc.
1.4 R & B Falcon Corp.
1.3 Musicland Group, Inc.
Holdings are subject to change.
<PAGE>
www.prudential.com (800) 225-1852
Performance at a Glance
Cumulative Total Returns1 As of 9/30/00
<TABLE>
<CAPTION>
Six One Since
Months Year Inception2
<S> <C> <C> <C>
Class A -1.72% 0.51% -3.32% (-3.95)
Class B -1.96 0.01 -4.51 (-5.14)
Class C -1.96 0.01 -4.52 (-5.14)
Class Z -1.59 0.76 -2.81 (-3.44)
Lipper High Current
Yield Fund Avg.3 -1.15 -0.02 -3.68
</TABLE>
Average Annual Total Returns1 As of 9/30/00
<TABLE>
<CAPTION>
One Since
Year Inception2
<S> <C> <C>
Class A -3.51% -3.05% (-3.31)
Class B -4.99 -3.19 (-3.46)
Class C -1.99 -2.31 (-2.58)
Class Z 0.76 -1.18 (-1.44)
</TABLE>
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost.
1 Source: Prudential Investments Fund Management
LLC and Lipper Inc. The cumulative total returns do
not take into account sales charges. The average
annual total returns do take into account
applicable sales charges. The Fund charges a
maximum front-end sales charge of 4% for Class A
shares. Class B shares are subject to a declining
contingent deferred sales charge (CDSC) of 5%, 4%,
3%, 2%, 1%, and 1% for six years. Class B shares
will automatically convert to Class A shares, on a
quarterly basis, approximately seven years after
purchase. Class C shares are subject to a front-end
sales charge of 1% and a CDSC of 1% for 18 months.
Class Z shares are not subject to a sales charge or
distribution and service (12b-1) fees. Without
waiver and management fees and/or expense
subsidization, the Fund's cumulative and average
annual total returns would have been lower, as
indicated in parentheses ( ). The Fund's management
fee waiver was discontinued as of the end of the
fiscal year ending 3/31/00.
2 Inception date: Class A, B, C, and Z, 5/5/98.
2 Lipper average returns are for all funds in
each share class for the six-months, one-year,
and since-inception period in the High Current
Yield Fund category. The Lipper average is
unmanaged. High Current Yield funds aim at high
(relative) current yield from fixed-income
securities, have no quality or maturity
restrictions, and tend to invest in lower-grade
debt securities.
1
<PAGE>
(LOGO) November 15, 2000
DEAR SHAREHOLDER,
Over the six months ended September 30, 2000, the
Class A shares of the Prudential High Yield Total
Return Fund returned -1.72%, which would be -5.65%
to investors paying the Class A share initial sales
charge. The Fund's benchmark, the Lipper High
Current Yield Fund Average, finished the period
with a -1.15% return, while the Lehman Brothers
High Yield Total Return Index generated a positive
return of 1.72%.
During the reporting period, the Fund suffered from
investors' desire to reduce exposure to high-yield
securities (also known as "junk bonds"), especially
those with credit ratings of CCC or below. The main
factors influencing the migration away from lower-
quality securities were a rising default rate,
slowing economic growth, and higher crude oil
prices. For most of the period, the Fund had a
greater exposure to lower-quality securities than
many funds in the Lipper Average, and this
discrepancy was even more pronounced with respect
to the Lehman Brothers Index.
Although high-yield investments have struggled for
the past two years, it's important to remember
that, while past performance is no guarantee of
future results, historically, the darkest period
for any asset class often preceeds a period of
outperformance. We generally suggest filtering out
the short-term "noise" of the market and keeping
your sights firmly on long-term performance.
Thank you for your continued confidence in
Prudential mutual funds.
Sincerely,
David R. Odenath, Jr., President
Prudential High Yield Total Return Fund, Inc.
2
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Semiannual Report September 30, 2000
INVESTMENT ADVISER'S REPORT
Expectations for slowing economy hurt high-yield market
High-yield securities (also known as "junk bonds")
struggled during the six months ended September 30,
2000, as fixed-income investors displayed a
preference for safety over higher coupon rates, and
aggressively withdrew their money from high-yield
bond funds. This preference was reflected in
returns all along the credit quality spectrum. For
example, investment-grade securities--those with
credit ratings of BBB or better--outperformed high-
yield investments, while BB-rated securities, which
lie at the upper end of the high-yield credit
quality range, did far better than those with a CCC
rating or below. The Fund normally maintains
significant holdings in securities with lower
ratings for the performance boost they provide when
conditions for high-yield investments are
favorable. During the past six months, however,
these securities exerted a drag on performance,
causing the Fund's returns to trail those of the
Lipper Average and Lehman Brothers Index that serve
as our benchmarks.
A rising default rate was one factor hurting high-
yield returns. As more companies default on their
debt, investors become increasingly reluctant to
invest in high-yield bonds, which typically carry a
greater risk of default than securities with higher
credit-quality ratings. A slowing economy was
another negative influence on the Fund's returns.
Slowing economic growth presents a difficult
environment for high-yield investments because
investors worry that corporate earnings growth will
sag, leading more companies to default on their
high-yield obligations.
During the nine months preceding the period, the
Federal Reserve Board (the Fed) had raised short-
term interest rates five times in an attempt to
cool economic growth and head off inflation. In
May, the Fed added another increase, this time by a
larger increment of 0.50%. As the summer wore on,
data on employment, home sales, and business
inventories began to suggest slowing growth.
Accordingly, most economists scaled back their
forecasts for third quarter GDP growth to the 3.5%
area--down considerably from the
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Semiannual Report September 30, 2000
revised 5.6% growth rate of the second quarter.
September brought increasing concerns about the
decelerating demand for personal computers and PC
components. A warning from technology bellwether
Intel that its third-quarter revenue growth would
be substantially below previous estimates added to
investors' worries.
Rising crude oil prices provided another reason for
high-yield investors to be cautious. In September,
oil prices came close to the $35 per barrel mark--
more than triple the levels of less than two years
ago. Previous spikes in oil prices during 1974 and
1979 had a dampening effect on economic growth as
consumers reined in their purchases in other areas
to offset higher expenditures for gasoline and
heating oil. Investors worried that a similar
scenario might be unfolding this time.
We positioned the Fund more defensively
Responding to these developments, we moved the Fund
to a more defensive positioning. This shift was
evident in several ways. For one thing, we
increased holdings of securities in sectors that
tend to be less cyclical, and therefore less
dependent on the current state of the economy. The
Fund's holdings of securities in the gaming sector,
for example, rose from 2.8% to 6.7%, while
utilities increased from 2.9% to 4.0% during the
period. Cable and media were other sectors that saw
increases. Offsetting these purchases were
reductions in the sectors we thought most
vulnerable to a cyclical slowdown: automotive,
building and construction, capital goods, consumer
products, metals, and retail.
A second important initiative was to improve the
Fund's credit-quality profile. In support of this
objective, we reduced the Fund's holdings of CCC-
rated and nonrated securities from 25.1% to 18.5%
at the end of the period, slightly below the Lehman
index weighting for these lower-rated credit-
quality tiers. At the same time, we increased
positions in a number of higher-rated bonds.
Securities with a BB rating--the highest accorded to
high yield investments--increased from 6.9% to
14.8%. For instance, we added to
4
<PAGE>
www.prudential.com (800) 225-1852
our position in the BB-rated securities of AES
Corp., an independent power producer benefiting
from the trend toward deregulation and
privatization of power markets worldwide. Mandalay
Resort Group represents a new BB purchase in the
gaming sector. In addition, we increased positions
in the B-rated securities of Nextel and Global
Crossing--both core holdings in the telecommunications
sector.
A third significant change during the period was
our reduction of telecommunications bonds from
19.5% to 17.2%, a substantially underweighted
position relative to the Lehman Brothers benchmark,
which carried approximately a 25.0%
telecommunications weighting at the end of the
period. Our research revealed that the returns of
investing in the more speculative telecom
companies did not justify the risks, so we
concentrated our holdings on the companies that our
analysis showed to be the strongest. In addition
to Nextel and Global Crossing, these included Level
3 Communications and Echostar.
Looking ahead
At the end of the period, spreads in the high-yield
market were at their widest levels since the
recessionary environment of 1991, and wider than
they were in the third quarter of 1998 when the
credit markets were in crisis mode due to Russia's
debt default and the near failure of hedge fund,
Long Term Capital Management. In spite of scant
evidence to support the view, high-yield investors
appear to be assuming that the current slowdown
will end in recession. We believe that the
selling pressure has been overdone, and the potential
exists for solid gains if there is no recession. If a
recession does occur, there does not appear to be a
lot of downside risk since many participants are
expecting it anyway. Therefore, we are approaching
the end of 2000 with a cautiously optimistic
attitude.
Prudential High Yield Total Return Fund Management Team
5
<PAGE>
Financial
Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 94.0%
Corporate Bonds 84.6%
----------------------------------------------------------------------------------------
Aerospace 0.4%
BE Aerospace, Inc., Sr. Sub.
Notes B1 9.50% 11/01/08 $ 250 $ 244,375
Stellex Technologies, Inc., Sr.
Sub. Notes (cost $856,814;
purchased 7/19/99) B3 9.50 11/01/07 1,000(b)(d) 200,000
------------
444,375
----------------------------------------------------------------------------------------
Airlines 1.0%
Delta Air Lines, Inc., Deb. Baa3 9.75 5/15/21 1,000 1,052,710
United Air lines, Inc., Deb. Baa3 9.75 8/15/21 30 30,093
------------
1,082,803
----------------------------------------------------------------------------------------
Automotive 1.1%
Collins & Aikman Products Co.,
Sr. Sub. Notes B2 11.50 4/15/06 100 96,000
Federal-Mogul Corp.,
Notes Ba3 7.875 7/01/10 115 43,700
Sr. Notes Ba2 7.50 1/15/09 195 74,100
Hayes Wheels Int'l., Inc., Sr.
Sub. Notes B2 9.125 7/15/07 500 437,500
Stanadyne Automotive Corp., Sr.
Sub. Notes B(a) 10.25 12/15/07 185 153,550
Tenneco Automotive Inc., Sr. Sub.
Notes NR 11.625 10/15/09 170 102,000
Venture Holdings, Sr. Notes B2 9.50 7/01/05 460 299,000
------------
1,205,850
----------------------------------------------------------------------------------------
Broadcasting & Other Media 3.3%
Alliance Atlantis Communications
Corp., Sr. Sub. Notes B2 13.00 12/15/09 400 414,000
Capstar Broadcasting, Sr. Disc.
Notes, Zero Coupon (until
2/1/02) B2 12.75 2/01/09 2,000 1,915,000
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fox Family Worldwide Inc., Sr.
Notes B1 9.25% 11/01/07 $ 65 $ 62,237
Lin Holdings Corp., Sr. Disc.
Notes, Zero Coupon (until
3/1/03) B3 10.00 3/01/08 500 362,500
Radio Unica Corp., Sr. Disc.
Notes, Zero Coupon (until
8/1/02) Caa1 11.75 8/01/06 500 360,000
XM Satellite Radio Holdings,
Inc., Sr. Sec'd Notes (cost
$345,000; purchased 3/10/00) NR 14.00 3/15/10 345(b) 307,050
------------
3,420,787
----------------------------------------------------------------------------------------
Building/Construction 1.3%
New Millenium Homes, Sr. Notes NR 13.50 9/03/04 2,000 1,360,000
----------------------------------------------------------------------------------------
Cable 10.2%
Adelphia Communications Corp.,
Sr. Notes B1 10.50 7/15/04 500 499,375
Avalon Cable Holdings LLC, Sr.
Disc. Notes, Zero Coupon (until
12/1/02) B2 11.875 12/01/08 1,000 680,000
Callahan Nordrhein - Westfalen,
Sr. Notes B3 14.00 7/15/10 500 502,500
Charter Communications Holdings
LLC, Sr. Notes B2 10.25 1/15/10 500 488,750
Classic Cable, Inc., Sr. Sub.
Notes B3 10.50 3/01/10 345 288,075
Coaxial Communications, Inc., Sr.
Notes B3 10.00 8/15/06 250 245,000
CSC Holdings Inc., Sr. Sub. Debs. Ba3 10.50 5/15/16 225 241,031
Diamond Cable Co., Sr. Disc.
Notes, Zero Coupon (until
12/15/00) (United Kingdom) B3 11.75 12/15/05 2,000(e) 1,880,000
International Cabletel, Inc., Sr.
Disc. Notes B3 12.75 4/15/05 500 511,250
International Wire Group, Inc.,
Sr. Sub. Notes B3 11.75 6/01/05 334 337,340
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mediacom LLC, Sr. Notes B2 7.875% 2/15/11 $ 250 $ 220,000
Multicanal S.A., (Argentina) B1 13.125 4/15/09 500(e) 465,000
NTL Communications Corp., Sr.
Disc. Notes, Zero Coupon (until
10/1/03) B3 12.375 10/01/08 1,500 930,000
Rogers Cablesystems Ltd., Gtd.
Sr. Sub. Debs. (Canada) B2 11.00 12/01/15 215(e) 240,800
Scott Cable Communications, Inc.,
Jr. Notes, PIK NR 16.00 7/18/02 18(d) 5,436
Telewest Communication PLC, Sr.
Disc. Notes, Zero Coupon (until
2/01/05) (United Kingdom) B1 11.375 2/01/10 620(e) 322,400
United Int'l. Holdings, Inc., Sr.
Disc. Notes, Zero Coupon (until
2/15/03) B3 10.75 2/15/08 1,500 975,000
United-Pan Europe Communications,
Inc. (Netherlands)
Sr. Notes B2 10.875 8/01/09 1,000(e) 875,000
Sr. Disc. Notes Zero Coupon
(until 8/01/04) B2 12.50 8/01/09 2,050(e) 984,000
------------
10,690,957
----------------------------------------------------------------------------------------
Chemicals 1.4%
Avecia Group PLC, Gtd. Sr. Notes
(United Kingdom) B2 11.00 7/01/09 155(e) 149,963
Huntsman ICI Chemicals LLC, Sr.
Sub. Notes B2 10.125 7/01/09 220 216,700
Polymer Group, Inc.,
Gtd. Sr. Sub. Notes B2 8.75 3/01/08 145 108,750
Sub. Notes B3 9.00 7/01/07 85 64,600
Sterling Chemical Holdings, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 8/15/01) Caa 13.50 8/15/08 472 160,480
Sterling Chemical, Inc., GTD.
Sub. Notes B3 12.375 7/15/06 275 279,125
Sr. Sub. Notes B3 11.75 8/15/06 465 325,500
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Texas Petrochemicals Corp., Sr.
Sub. Notes Caa1 11.125% 7/01/06 $ 230 $ 196,650
------------
1,501,768
----------------------------------------------------------------------------------------
Consumer 2.1%
Coinstar, Inc., Sr. Disc. Notes NR 13.00 10/01/06 800 808,000
Corning Consumer Product Co., Sr.
Sub. Notes B3 9.625 5/01/08 1,080 432,000
Desa Int'l., Inc., Sr. Sub. Notes B3 9.875 12/15/07 750 547,500
Packaged Ice, Inc., Sr. Notes B3 9.75 2/01/05 500 435,000
------------
2,222,500
----------------------------------------------------------------------------------------
Containers/Packaging 1.9%
Graham Packaging Holdings Co.,
Sr. Disc. Notes, Zero Coupon
(until 1/15/03) Caa1 10.75 1/15/09 1,000 565,000
Packaging Resources, Inc., Gtd.
Sr. Notes NR 13.00 6/30/03 322(d) 128,646
Radnor Holdings Corp., Gtd. Sr.
Notes B2 10.00 12/01/03 300 267,000
US Can Corp., Sr. Sub. Notes B3 12.375 10/01/10 1,000 1,010,000
------------
1,970,646
----------------------------------------------------------------------------------------
Distribution/Wholesalers 0.1%
Core-Mark Int'l, Inc., Sr. Sub.
Notes B3 11.375 9/15/03 60 56,700
----------------------------------------------------------------------------------------
Drugs & Health Care 4.1%
Apria Healthcare Group, Inc., Sr.
Sub. Notes, B2 9.50 11/01/02 450 447,187
Bio-Rad Labs, Inc., Sr. Sub.
Notes NR 11.625 2/15/07 170 178,075
Columbia/HCA Healthcare Corp.,
Debs. Ba2 7.50 11/15/30 105 82,950
Concentra Operating Corp., Sr.
Sub. Notes B3 13.00 8/15/09 650 572,000
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Harborside Healthcare Corp., Sr.
Sub. Disc. Notes, Zero Coupon
(until 8/1/03) B3 11.00% 8/01/08 $ 750 $ 142,500
HCA-The Healthcare Co., Notes Ba2 7.69 6/15/25 750 628,125
HEALTHSOUTH Corp. Sr. Notes Baa3 6.875 6/15/05 200 171,042
Integrated Health Svcs., Inc.,
Sr. Sub. Notes C 9.25 1/15/08 4,000(d) 40,000
Lifepoint Hospitals Holdings,
Inc., Sr. Sub. Notes B3 10.75 5/15/09 130 137,963
Mariner Post-Acute Network, Inc.,
Sr. Sub. Disc. Notes, Zero
Coupon (until 11/1/02) C 10.50 11/01/07 1,840(d) 13,800
US Healthworks, Inc., Sr. Disc.
Notes NR 13.00 10/15/04 2,044 1,870,691
------------
4,284,333
----------------------------------------------------------------------------------------
Energy 4.8%
Canadian Forest Oil Ltd., Sr.
Sub. Notes (Canada) B2 8.75 9/15/07 255(e) 247,350
Comstock Resources, Inc., Sr.
Notes B2 11.25 5/01/07 500 525,000
Houston Expl. Co., Sr. Sub. Notes B2 8.625 1/01/08 130 124,800
Leviathan Gas Pipeline LLP, Sr.
Sub. Notes Ba2 10.375 6/01/09 350 369,250
Plains Resources, Inc., Sr. Sub.
Notes B2 10.25 3/15/06 150 154,125
R & B Falcon Corp., Sr. Notes Ba3 12.25 3/15/06 1,250 1,487,500
RBF Finance Co., Gtd. Sr. Sec'd.
Notes Ba3 11.00 3/15/06 170 197,200
Reliant Energy Mid-Atlantic Pass
Thru Certs. Baa3 9.681 7/02/26 1,000 980,000
Swift Energy Co., Sr. Sub. Notes B2 10.25 8/01/09 355 363,875
Vintage Petroleum, Inc., Sr. Sub.
Notes B1 9.75 6/30/09 505 527,725
------------
4,976,825
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Entertainment 1.2%
Bally Total Fitness Holdings
Corp., Sr. Sub. Notes B3 9.875% 10/15/07 $ 665 $ 630,088
Intrawest Corp., Sr. Notes B1 10.50 2/01/10 250 260,000
SFX Entertainment, Inc., Sr. Sub.
Notes B3 9.125 2/01/08 375 391,875
------------
1,281,963
----------------------------------------------------------------------------------------
Environmental 2.0%
Allied Waste Industries, Inc.,
Debs. Ba3 7.40 9/15/35 385 278,163
Allied Waste North America, Inc.,
Gtd. Sub. Notes Ba3 7.875 1/01/09 720 626,400
ICF Kaiser Int'l., Inc., Sr. Sub.
Notes B3 13.00 12/31/03 2,020(d) 828,200
IT Group, Inc., Sr. Sub. Notes B3 11.25 4/01/09 360 309,600
------------
2,042,363
----------------------------------------------------------------------------------------
Financial Services 2.7%
Aircraft Funding, Sr. Notes NR 12.00 7/15/00 2,000 1,600,000
DeGeorge Home Alliance, Inc., Sr.
Notes Caa 12.00 4/01/01 300(d) 6,000
Hanvit Bank, Sr. Notes B1 12.75 3/01/10 300 305,250
Metris Cos., Inc., Sr. Notes Ba3 10.125 7/15/06 400 380,000
Midland Funding Corp.,
Debs. Ba3 11.75 7/23/05 20 21,625
Debs. Ba3 13.25 7/23/06 335 376,925
Superior National Insurance
Group, Inc., Sr. Notes C 10.75 12/01/17 1,000 100,000
------------
2,789,800
----------------------------------------------------------------------------------------
Food & Beverage 1.4%
Agrilink Foods, Inc., Sr. Sub.
Notes B3 11.875 11/01/08 820 606,800
Del Monte Foods Co., Sr. Disc.
Notes, Zero Coupon (until
12/15/02) B3 12.50 12/15/07 60 45,000
Fresh Foods, Inc., Sr. Sub. Notes B3 10.75 6/01/06 340 136,000
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Grupo Azucarero S.A., Sr. Notes,
(Mexico) B3 11.50% 1/15/05 $ 1,250(d)(e) $ 237,500
Iowa Select Farms L.P., Sr. Sub.
Notes B3 10.75 12/01/05 1,125 315,000
SFAC New Holdings, Inc., Sr.
Sec'd Disc. Debs., Zero Coupon
(until 6/15/04) B3 13.00 6/15/09 460 13,793
SFC New Holdings, Inc.,
Sr. Notes, Zero Coupon (until
6/15/05) NR 11.00 12/15/09 296(d) 2,964
Sr. Sub. Notes NR 13.25 8/15/03 276(d) 93,840
Sun World International, Inc.,
Gtd. First Mtge. Notes B2 11.25 4/15/04 50 47,500
------------
1,498,397
----------------------------------------------------------------------------------------
Gaming 6.7%
Boyd Gaming Corp., Sr. Sub. Notes B1 9.50 7/15/07 165 155,719
Harveys Casino Resorts, Sr. Sub.
Notes B2 10.625 6/01/06 250 255,625
Hollywood Casino Corp.,
Gtd. Sub. Notes B3 11.25 5/01/07 190 198,075
Horseshoe Gaming Holdings,
Gtd. Sub. Notes B2 8.625 5/15/09 175 172,375
Isle Capri Black Hawk LLC, First
Mtge. Notes B2 13.00 8/31/04 1,000 1,090,000
Mandalay Resort Group, Sr. Notes Ba2 9.50 8/01/08 1,000 1,017,500
Pinnacle Entertainment, Inc.,
Gtd. Sub. Notes B2 9.25 2/15/07 250 256,250
Sr. Sub. Notes B2 9.50 8/01/07 250 255,625
Santa Fe Hotel, Inc., First Mtge.
Notes (cost $1,001,415;
purchased 7/24/98) Caa 11.00 12/15/00 1,000(b) 990,000
Station Casinos, Inc., Sr. Sub.
Notes B1 9.875 7/01/10 280 280,700
Trump Atlantic City Assoc., First
Mtge. Notes B3 11.25 5/01/06 2,535 1,755,487
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Venetian Casino Resort LLC, Gtd.
First Mtge. Notes B-(a) 12.25% 11/15/04 $ 505 $ 520,150
------------
6,947,506
----------------------------------------------------------------------------------------
Industrials 1.7%
AMM Holdings, Inc., Sr. Disc.
Notes, Zero Coupon (until
7/1/03) B-(a) 13.50 7/01/09 2,000 100,000
Eagle-Picher Industries, Inc.,
Sr. Sub. Notes B3 9.375 3/01/08 400 336,000
Gentek, Inc., Gtd. Sr. Sub. Notes B2 11.00 8/01/09 300 306,000
Motors & Gears, Inc., Sr. Notes B3 10.75 11/15/06 265 262,350
Thermadyne Holdings Corp.,
Sr. Disc. Notes, Zero Coupon
(until 6/1/03) Caa1 12.50 6/01/08 500 175,000
Sr. Sub. Notes B3 9.875 6/01/08 500 385,000
United Rentals, Inc., Sr. Sub.
Notes B1 8.80 8/15/08 245 213,762
------------
1,778,112
----------------------------------------------------------------------------------------
Insurance 2.2%
Conseco, Inc.,
Notes B1 8.50 10/15/02 2,000 1,590,000
Notes B1 8.75 2/09/04 1,000 705,000
------------
2,295,000
----------------------------------------------------------------------------------------
Lodging & Leisure 0.4%
HMH Properties, Inc., Sr. Notes Ba2 7.875 8/01/08 425 391,000
----------------------------------------------------------------------------------------
Mining 0.4%
Great Lakes Carbon Corp., Sr.
Sub. Notes, PIK B3 10.25 5/15/08 1,000 450,000
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Miscellaneous Services 0.5%
MSX International, Inc., Gtd.
Sub. Notes B3 11.375% 1/15/08 $ 500 $ 465,000
----------------------------------------------------------------------------------------
Oil Services 0.1%
Eott Energy Partners L.P., Sr.
Notes Ba2 11.00 10/01/09 120 128,100
----------------------------------------------------------------------------------------
Paper & Forest Products 2.0%
Doman Industries Ltd., (Canada)
Sr. Notes Caa1 8.75 3/15/04 280(e) 184,800
Sr. Notes, Ser. B Caa1 9.25 11/15/07 215(e) 126,850
Maxxam Group Holdings, Inc., Sr.
Notes B3 12.00 8/01/03 500 460,000
Norampac, Inc., Sr. Notes B1 9.50 2/01/08 30 30,150
Repap New Brunswick, Inc., Sec'd.
Notes B3 11.50 6/01/04 95 106,400
Stone Container Corp.,
First Mtg. Notes B1 10.75 10/01/02 75 75,937
Sr. Notes B2 12.58 8/01/16 250 258,125
Sr. Sub. Debs. B3 12.25 4/01/02 750 757,500
Stone Container Finance Co., Gtd.
Sr. Notes (Canada) B2 11.50 8/15/06 95(e) 97,613
------------
2,097,375
----------------------------------------------------------------------------------------
Power Generation 1.4%
AES Drax Holdings Ltd., Sec'd.
Notes Baa3 10.41 12/31/20 750 787,500
AES Drax Energy Ltd., Sec'd Notes Ba2 11.50 8/30/10 600 630,000
------------
1,417,500
----------------------------------------------------------------------------------------
Printing/Publishing 1.5%
American Lawyer Media Holdings,
Inc., Sr. Disc. Notes, Zero
Coupon (until 12/15/02) B3 12.25 12/15/08 1,000 667,500
Phoenix Color Corp., Sr. Sub.
Notes B3 10.375 2/01/09 1,000 842,500
------------
1,510,000
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Restaurants 0.1%
Ameriking, Inc., Sr. Notes B3 10.75% 12/01/06 $ 215 $ 118,250
----------------------------------------------------------------------------------------
Retail 2.1%
Big 5 Holdings Corp., Sr. Disc.
Notes, Zero Coupon (until
11/30/02) NR 13.45 11/30/08 1,000 490,000
Musicland Group, Inc., Sr. Sub.
Notes B3 9.00 6/15/03 1,500 1,398,750
Phar-Mor, Inc., Sr. Notes B3 11.72 9/11/02 465 288,300
Specialty Retailers, Inc., Sr.
Notes B2 8.50 7/15/05 375(d) 18,750
------------
2,195,800
----------------------------------------------------------------------------------------
Steel & Metals 2.0%
Algoma Steel, Inc., First Mtge.
Notes B2 12.375 7/15/05 290 205,900
Kaiser Aluminum & Chemical Corp.,
Sr. Sub. Notes B3 12.75 2/01/03 1,000 890,000
LTV Corp., Sr. Notes Ba3 11.75 11/15/09 250 130,000
Sheffield Steel Corp., First Mtg.
Notes, B-(a) 11.50 12/01/05 325 188,500
WHX Corp., Sr. Notes B3 10.50 4/15/05 1,150 690,000
------------
2,104,400
----------------------------------------------------------------------------------------
Supermarkets 0.4%
Pantry, Inc., Sr. Sub. Notes B3 10.25 10/15/07 385 369,600
----------------------------------------------------------------------------------------
Technology 2.1%
Ampex Corp., Sr. Notes B+(a) 12.00 3/15/03 1,000 750,000
InterAct Systems, Inc., Sr. Disc.
Notes, PIK NR 14.00 8/01/03 1,508 693,450
Intersil Corp., Sr. Sub. Notes B3 13.25 8/15/09 202 234,320
SCG Holding & Semiconductor Co.,
Gtd. Sub. Notes B2 12.00 8/01/09 260 272,350
Viasystems, Inc., Sr. Sub. Notes B3 9.75 6/01/07 270 255,150
------------
2,205,270
</TABLE>
16 See Notes to Financial Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Telecommunications 17.2%
Alamosa PCS Holdings, Inc., Gtd.
Sub. Notes,
Zero Coupon (until 2/15/05) Caa1 12.875% 2/15/10 $ 945 $ 500,850
Allegiance Telecom, Inc., Sr.
Notes B(a) 12.875 5/15/08 500 497,500
Bestel S.A. De CV, Sr. Disc.
Notes, Zero Coupon (until
5/15/01) (Mexico) NR 12.75 5/15/05 1,500(e) 975,000
CD Radio, Inc., Sr. Disc. Notes,
Zero Coupon (until 12/1/02) CCC+(a) 15.00 12/01/07 1,000 530,000
Echostar Broadband Corp. Sr.
Notes B3 10.375 10/01/07 2,000 2,000,000
Exodus Communications, Inc., Sr.
Notes B3 11.625 7/15/10 750 757,500
Sr. Notes NR 10.75 12/15/09 295 283,200
Fairpoint Communications, Inc.,
Sr. Sub. Notes B3 12.50 5/01/10 335 326,625
Global Crossing Holdings Ltd.,
Sr. Notes Ba2 9.50 11/15/09 1,000 995,000
Globix Corp., Sr. Notes NR 12.50 2/01/10 505 358,550
GT Group Telecom, Inc., Sr. Disc.
Notes, Zero Coupon (until
2/01/05) NR 13.25 2/01/10 1,170 514,800
ImpSat Corp., Sr. Notes B3 12.375 6/15/08 1,000 770,000
KMC Telecom Holdings, Inc., Sr.
Notes Caa2 13.50 5/15/09 340 204,000
Level 3 Communications, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 3/15/03) B3 12.875 3/15/08 2,000 1,060,000
Sr. Disc. Notes, Zero Coupon
(until 12/1/03) B3 10.50 12/01/08 2,000 1,160,000
Microcell Telecommunications,
Inc., Sr. Disc. Notes, Zero
Coupon (until 6/1/04) B3 12.00 6/01/09 1,250 887,500
Millicom Int'l. Cellular, Sr.
Disc. Notes, Zero Coupon (until
6/1/01) B3 13.50 6/01/06 740 636,400
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Netia Holdings BV, Gtd. Sub.
Notes, Zero Coupon (until
11/1/01) (Poland) B2 11.25% 11/01/07 $ 600(e) $ 402,000
Nextel Communications, Inc., Sr.
Disc. Notes, Zero Coupon (until
9/15/02) B1 10.65 9/15/07 2,980 2,443,600
Nextel Partners, Inc., Sr. Disc.
Notes, Zero Coupon (until
2/1/04) B3 14.00 2/01/09 286 203,060
Nextlink Communications, Inc.,
Sr, Notes B2 10.50 12/01/09 295 274,350
Northeast Optic Network, Inc.,
Sr. Notes NR 12.75 8/15/08 500 410,000
Spectrasite Holdings, Inc., Sr.
Disc. Notes, Zero Coupon (until
4/15/04) B3 11.25 4/15/09 350 191,625
Tritel PCS, Inc. Sr. Sub. Disc.
Notes, Zero Coupon (until
5/15/04) B3 12.75 5/15/09 1,000 670,000
Williams Communications Group,
Inc., Sr. Notes B2 10.875 10/01/09 920 839,500
------------
17,891,060
----------------------------------------------------------------------------------------
Textiles 0.2%
Cluett American Corp., Sr. Sub.
Notes B3 10.125 5/15/08 250 200,000
Collins & Aikman Floorcovering,
Sr. Sub. Notes B3 10.00 1/15/07 45 43,875
------------
243,875
----------------------------------------------------------------------------------------
Transportation/Trucking/Shipping 0.6%
American Commercial Lines LLC,
Sr. Notes B1 10.25 6/30/08 440 374,000
Trism, Inc., Sr. Sub. Notes NR 12.00 2/04/05 435 226,139
------------
600,139
</TABLE>
18 See Notes to Financial Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Principal
Moody's Interest Maturity Amount Value
Description Rating Rate Date (000) (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Utilities 4.0%
AES Corp.,
Sr. Notes Ba1 9.50% 6/01/09 $ 750 $ 761,250
Sr. Subs. Debs. Ba1 8.875 11/01/27 2,000 1,730,000
Orion Power Holdings, Inc., Sr.
Notes Ba3 12.00 5/01/10 650 685,750
York Power Funding, Sr. Sec'd.
Notes (Cayman Islands) NR 12.00 10/30/07 992(e) 972,160
------------
4,149,160
Total corporate bonds
(cost $103,903,171) 88,187,214
------------
COMMON STOCKS 2.2%
Shares
-----------------------------------------------------------------------------------------------------------
AmeriKing, Inc. 50 500
Baycorp Holdings, Ltd.(c) 10,000 86,250
Classic Communications, Inc.(c) 3,000 15,750
Dobson Communications Corp.(c) 2,400 35,250
Dr. Pepper Bottling Holdings, Inc. (cost $250,500; purchased 9/19/97)
11,500(b) 287,500
Electronic Retailing Systems Int'l., Inc.(c) 40,000 33,125
Firearms Training Systems, Inc.(c) 122,000 30,500
Flag Telecom Holdings Ltd.(c) 5,100 56,100
Flextronics International Ltd.(c) 7,500 615,937
Forstmann & Co., Inc.(c) 13,304 426
Grant Geophysical, Inc.(c) 28,675 28,675
GT Group Telecom, Inc.(c) 2,800 36,925
Jordon Telecommunications(c) 125 3,750
Packaging Corporation America 32,900 363,956
Premier Cruises, Ltd.(c) (cost $973,646; purchased 9/14/99) 74,059(b) 18,515
Purina Mills Inc.(c) 41,879 408,319
Samuels Jewelers, Inc.(c) 23,425 112,733
SFAC Holdings, Inc.(c) 25 0
Star Gas Partners L.P. 440 7,755
Trism, Inc.(c) 27,543 25,822
Waste Systems Int'l., Inc. (cost $530,770; purchased 2/18/98, 5/11/98,
4/1/99) 131,410(b) 147,836
------------
Total common stocks
(cost $5,394,475) 2,315,624
------------
</TABLE>
See Notes to Financial Statements 19
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Value
Description Shares (Note 1)
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PREFERRED STOCKS 6.4%
----------------------------------------------------------------------------------------
Adelphia Communications Corp., $13.00 8,750 $ 866,250
AmeriKing, Inc., $13.00 1,221 4,882
Century Maintenance Supply, Inc., $13.25 12,091 882,643
Cluett American Corp., $12.50 1 21
Dobson Communications Corp., $13.00 881 832,864
Geneva Steel Co., $14.00 3,000 300
Global Crossing Holdings, Ltd., $10.50 3,750 371,250
InterAct Systems, Inc., $14.00 2,910 611,100
Paxson Communications Corp., $12.50 1 580
PRIMEDIA, Inc., Series D $10.00 3,185 296,205
PRIMEDIA, Inc., Series F $9.20 2,020 177,255
R & B Falcon Corp., $13.875 654 837,277
Rural Cellular Corp., $11.375 7 6,124
Sovereign Real Estate Invest 1,500 1,335,000
Supermarkets General Holdings Corp., $3.52 10,000 1,250
Waste Systems Int'l Inc., $3.375 (cost $1,594,230; purchased 5/11/98)
1,608(b) 450,240
------------
Total preferred stocks
(cost $8,274,161) 6,673,241
------------
TRADE CLAIM
----------------------------------------------------------------------------------------
Montgomery Ward (cost $245,635;
purchased 8/19/98) 2,450(b)(c) 49,008
------------
</TABLE>
<TABLE>
<CAPTION>
Expiration
Date Warrants
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
WARRANTS(C) 0.8%
----------------------------------------------------------------------------------------
American Banknote Corp., 12/1/02 750 8
Bestel S.A. De CV 5/15/05 1,500 18,000
Birch Telecom, Inc., 6/15/08 1,000 5,500
GT Group Telecom, Inc. 2/1/10 1,170 0
HF Holdings, Inc. 7/15/02 4,375 44
</TABLE>
20 See Notes to Financial Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Portfolio of Investments as of September 30, 2000 (Unaudited)
Cont'd.
<TABLE>
<CAPTION>
Expiration Value
Description Date Warrants (Note 1)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
InterAct Systems, Inc. 08/1/03 2,910 $ 29
Intermediate Act Electronic Mktg., Inc. 12/15/09 2,910 14,550
Isle Capri Casinos, Inc. 3/5/01 2,968 30
R & B Falcon Corp. 5/1/09 550 385,000
Star Choice Communications 12/15/05 8,685 73,822
Versatel Telecom International BV 5/15/08 1,000 305,000
XM Satellite Radio, Inc. 3/3/10 345 0
------------
Total warrants (cost $49,659) 801,983
------------
Total long-term investments (cost $117,867,101) 98,027,070
------------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS 1.3%
<S> <C> <C> <C> <C> <C> <C>
Principal
Interest Amount
Money Market Rate (000)
---------------------------------------------------------------------------------------------------------
Prudential Core Investment
Fund-Taxable Money Market Series
(cost $1,286,094) 6.622% $ 1,286 1,286,094
------------
Total Investments 95.3%
(cost $119,153,195; Note 4) 99,313,164
Other assets in excess of
liabilities 4.7% 4,944,577
------------
Net Assets 100% $104,257,741
------------
------------
</TABLE>
------------------------------
(a) Standard & Poor's Rating.
(b) Indicates a restricted security; the aggregate cost of such securities is
$5,552,375. The aggregate value $2,401,141 is approximately 2.3% of net
assets.
(c) Non-income producing securities.
(d) Represents issuer in default on interest payments; non-income producing
security.
(e) US$ denominated foreign bonds.
NR--Not rated by Moody's or Standard & Poor's.
PIK--Payment in kind securities.
L.P.--Limited Partnership.
LLC--Limited Liability Company.
LLP--Limited Liability Partnership.
The Fund's current Prospectus contains a description of Moody's and Standard &
Poor's ratings.
See Notes to Financial Statements 21
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Statement of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
September 30, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $119,153,195) $ 99,313,164
Receivable for investments sold 7,395,018
Dividends and interest receivable 2,088,164
Receivable from manager 289,766
Receivable for Fund shares sold 208,350
Other assets 85,487
------------------
Total assets 109,379,949
------------------
LIABILITIES
Payable for investments purchased 4,196,991
Payable for Fund shares reacquired 374,323
Accrued expenses and other liabilities 250,824
Dividends payable 243,787
Distribution fee payable 56,283
------------------
Total liabilities 5,122,208
------------------
NET ASSETS $104,257,741
------------------
------------------
Net assets were comprised of:
Common stock, at par $ 1,357
Paid-in capital in excess of par 141,246,512
------------------
141,247,869
Undistributed net investment income 46,847
Accumulated net realized loss on investments (17,196,944)
Net unrealized depreciation on investments (19,840,031)
------------------
Net assets, September 30, 2000 $104,257,741
------------------
------------------
</TABLE>
22 See Notes to Financial Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Statement of Assets and Liabilities (Unaudited) Cont'd.
<TABLE>
<CAPTION>
September 30, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share
($20,968,699 / 2,729,008 shares of common stock
issued and outstanding) $7.68
Maximum sales charge (4% of offering price) .32
Maximum offering price to public $8.00
Class B:
Net asset value, offering price and redemption price per
share ($69,760,536 / 9,078,863 shares of common stock
issued and outstanding) $7.68
Class C:
Net asset value and redemption price per share
($12,480,735 / 1,624,279 shares of common stock
issued and outstanding) $7.68
Sales charge (1% of offering price) .08
Offering price to public $7.76
Class Z:
Net asset value, offering price and redemption price per
share ($1,047,771 / 136,313 shares of common stock
issued and outstanding) $7.69
</TABLE>
See Notes to Financial Statements 23
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
September 30, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $ 5,873,363
Dividends 71,421
------------------
Total income 5,944,784
------------------
Expenses
Management fee 364,407
Distribution fee--Class A 27,617
Distribution fee--Class B 284,037
Distribution fee--Class C 48,176
Custodian's fees and expenses 68,000
Transfer agent's fees and expenses 56,000
Registration fees 25,000
Reports to shareholders 25,000
Amortization of organizational costs 18,000
Audit fees 15,000
Legal fees and expenses 5,000
Directors' fees and expenses 5,000
Miscellaneous 860
------------------
Total expenses 942,097
------------------
Net investment income 5,002,687
------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investment transactions (7,439,147)
Net change in unrealized appreciation (depreciation) of
investments (43,967)
------------------
Net loss on investments (7,483,114)
------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (2,480,427)
------------------
------------------
</TABLE>
24 See Notes to Financial Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
September 30, 2000 March 31, 2000
<S> <C> <C> <C>
-----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 5,002,687 $ 13,631,395
Net realized loss on investments (7,439,147) (5,809,171)
Net change in unrealized appreciation
(depreciation) of investments (43,967) (7,145,217)
------------------ --------------
Net increase (decrease) in net assets
resulting from operations (2,480,427) 677,007
------------------ --------------
Dividends (Note 1)
Dividends from net investment income (Note
1)
Class A (1,028,908) (3,165,069)
Class B (3,338,389) (8,723,889)
Class C (566,661) (1,548,954)
Class Z (68,729) (193,483)
------------------ --------------
(5,002,687) (13,631,395)
------------------ --------------
Fund share transactions (Net of share
conversions)
Net proceeds from shares sold(a) 7,798,016 35,075,107
Net asset value of shares issued in
reinvestment of dividends and
distributions 2,829,521 8,145,708
Cost of shares reacquired (19,762,415) (65,764,308)
------------------ --------------
Net increase decrease in net assets from
Fund share transactions (9,134,878) (22,543,493)
------------------ --------------
Total decrease (16,617,992) (35,497,881)
NET ASSETS
Beginning of period 120,875,733 156,373,614
------------------ --------------
End of period(b) $104,257,741 $120,875,733
------------------ --------------
------------------ --------------
</TABLE>
------------------------------
(a) For year ended March 31, 2000, includes shares issued in connection with
acquisition of Prudential Distressed Securities Fund.
<TABLE>
<S> <C> <C> <C>
(b) Includes undistributed net investment
income of: $ 46,874 $ 46,874
------------------ --------------
</TABLE>
See Notes to Financial Statements 25
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Notes to Financial Statements (Unaudited)
Prudential High Yield Total Return Fund, Inc. (the 'Fund') is registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company. The Fund was incorporated in Maryland on February 18, 1997.
The Fund issued 2,500 shares each of Class A, Class B, Class C and Class Z
common stock for $100,000 on February 18, 1998 to Prudential Investments Fund
Management LLC ('PIFM'). The Fund commenced investment operations on May 5,
1998. The primary investment objective of the Fund is total return through high
current income and capital appreciation. It seeks to achieve this objective by
investing in high yield fixed income securities, equity securities that were
attached to or included in a unit with fixed income securities at the time of
purchase, convertible securities and preferred stocks.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Security Valuation: Portfolio securities that are actively traded in
the over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, are valued at prices provided by
principal market makers and pricing agents. Any security for which the primary
market is on an exchange is valued at the last sales price on such exchange on
the day of valuation or, if there was no sale on such day, the last bid price
quoted on such day. Securities issued in private placements are valued at the
bid price or the mean between the bid and asked prices, if available, provided
by principal market makers. Any security for which a reliable market quotation
is unavailable is valued at fair value as determined in good faith by or under
the direction of the Fund's Board of Directors.
Short-term securities which mature in more than 60 days are valued at
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost, which approximates market value.
All securities are valued as of 4:15 p.m., New York time.
The Fund may hold up to 15% of its net assets in illiquid securities,
including those which are restricted as to disposition under securities law
('restricted securities'). Certain issues of restricted securities held by the
Fund at September 30, 2000 include registration rights under which the Fund may
demand registration by the issuer, of which the Fund may bear the cost of such
registration. Restricted securities, sometimes referred to as private
placements, are valued pursuant to the valuation procedures noted above.
26
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized gains and losses on sales
of portfolio securities are calculated on an identified cost basis. Interest
income is recorded on an accrual basis and dividend income is recorded on the
ex-dividend date. The Fund accretes discount and amortizes premium as
adjustments to interest income. Income from payment-in-kind bonds is recorded
daily based on an effective interest method. Expenses are recorded on the
accrual basis which may require the use of certain estimates by management.
Net investment income (other than distribution fees) and unrealized and
realized gains or losses are allocated daily to each class of shares of the Fund
based upon the relative proportion of net assets of each class at the beginning
of the day.
Dividends and Distributions: The Fund declares daily and pays dividends
of net investment income monthly and makes distributions at least annually of
any net capital gains. Dividends and distributions are recorded on the
ex-dividend date. Income distributions and capital gain distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.
Taxes: It is the intent of the Fund to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
Offering and Organization Expenses: Approximately $283,300 were
incurred in connection with the organization of the Fund. Organization cost of
approximately $172,900 are being amortized ratably over a period of sixty months
from the date the Fund commenced investment operations.
Note 2. Agreements
The Fund has a management agreement with PIFM. Pursuant to this agreement PIFM
has responsibility for all investment advisory services and supervises the
subadviser's performance of such services. PIFM has entered into a subadvisory
agreement with The Prudential Investment Corporation ('PIC'); PIC furnishes
investment advisory services in connection with the management of the Fund. PIFM
pays for the subadviser's services, the compensation of officers of the Fund,
occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears
all other costs and expenses.
The management fee paid to PIFM is computed daily and payable monthly, at
an annual rate of .65% of the Fund's average daily net assets.
Effective January 1, 2000, the subadvisory fee paid to PIC by PIFM is
computed daily and payable monthly at an annual rate of .325% of 1% of the
average daily net assets of the Fund. Prior to January 1, 2000, PIC was
reimbursed by PIFM for
27
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
reasonable costs and expenses incurred in furnishing investment advisory
services. The change in the subadvisors fee structure has no impact on the
management fee charged to the Fund or its shareholders.
Pursuant to the Class A, B and C Plans, the Fund compensates PIMS with
respect to Class A, B and C shares, for distribution-related activities at an
annual rate of up to .30 of 1%, 1% and 1% of the average daily net assets of the
Class A, B and C shares, respectively. Such expenses under the Plans were .25 of
1%, .75 of 1% and .75 of 1% of the average daily net assets of the Class A, B
and C shares, respectively, for the six months ended September 30, 2000.
PIMS has advised the Fund that it received approximately $3,000 and $5,800
in front-end sales charges resulting from sales of Class A and Class C shares,
respectively, during the six months ended September 30, 2000. From these fees,
PIMS paid such sales charges to affiliated broker-dealers, which in turn paid
commissions to salespersons and incurred other distribution costs.
PIMS has advised the Fund that for the six months ended September 30,
2000, it received approximately $193,700 and $3,500 in contingent deferred sales
charges imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
PIFM, PIC and PIMS are wholly owned subsidiaries of The Prudential
Insurance Company of America.
The Fund, along with other affiliated registered investment companies (the
'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $1 billion.
Interest on any such borrowings will be at market rates. The purpose of the
agreement is to serve as an alternative source of funding for capital share
redemptions. The Funds pay a commitment fee of .080 of 1% of the unused portion
of the credit facility. The commitment fee is accrued and paid quarterly on a
pro rata basis by the Funds. The expiration date of the SCA is March 9, 2001.
The Fund did not borrow any amounts pursuant to the SCA during the six months
ended September 30, 2000.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC, a wholly owned subsidiary of PIFM, serves
as the Fund's transfer agent and during the six months ended September 30, 2000,
the Fund incurred fees of approximately $52,600 for the services of PMFS. As of
September 30, 2000, approximately $8,200 of such fees were due to PMFS. Transfer
agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to nonaffiliates.
28
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
At September 30, 2000, the net receivable of $289,766 due from the manager
includes $346,875 relating to an unrealized loss in connection with an
investment transaction. This unrealized loss has been included in net change in
unrealized depreciation of investments in the Statement of Operations.
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the six months ended September 30, 2000 were $90,823,219 and $102,972,959,
respectively.
The federal income tax basis of the Fund's investments as of September 30,
2000 was $119,153,195; accordingly, net unrealized depreciation for federal
income tax purposes was $19,840,031 (gross unrealized appreciation--$3,262,389;
gross unrealized depreciation--$23,102,420).
For federal income tax purposes, the Fund had a capital loss carryforward
as of March 31, 2000, of approximately $8,678,000, of which $1,697,600 expires
in 2007 and $6,980,400 expires in 2008. In addition, the Fund has elected to
treat net capital losses of approximately $913,400 incurred in the five month
period ended March 31, 2000 as having occurred in the current fiscal year.
Note 5. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with a front-end sales charge of up to 4%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. A special exchange
privilege is also available for shareholders who qualify to purchase Class A
shares at net asset value. Class Z shares are not subject to any sales or
redemption charge and are offered exclusively for sale to a limited group of
investors.
The Fund has 2.5 billion shares of $0.0001 par value common stock
authorized; 1 billion shares for Class A and 500 million shares each for Class
B, Class C and Class Z.
29
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
----------------------------------------------------------- ---------- ------------
<S> <C> <C>
Six months ended September 30, 2000:
Shares sold 353,500 $ 2,806,415
Shares issued in reinvestment of dividends 83,161 655,718
Shares reacquired (625,508) (4,925,816)
---------- ------------
Net increase (decrease) in shares outstanding before
conversions (188,847) (1,463,683)
Shares issued upon conversion from Class B 98,307 773,395
---------- ------------
Net increase (decrease) in shares outstanding (90,540) $ (690,288)
---------- ------------
---------- ------------
Year ended March 31, 2000:
Shares sold 976,232 $ 9,080,865
Shares issued in connection with acquisition of Prudential
Distressed Securities Fund (Note 6) 69,637 590,579
Shares issued in reinvestment of dividends 249,600 2,154,014
Shares reacquired (2,762,076) (23,742,436)
---------- ------------
Net increase (decrease) in shares outstanding before
conversions (1,466,607) (11,916,978)
Shares issued upon conversion from Class B 69,457 597,173
---------- ------------
Net increase (decrease) in shares outstanding (1,397,150) $(11,319,805)
---------- ------------
---------- ------------
<CAPTION>
Class B
<S> <C> <C>
Six months ended September 30, 2000:
Shares sold 471,382 $ 3,715,990
Shares issued in reinvestment of dividends 230,920 1,821,883
Shares reacquired (1,570,496) (12,388,459)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion (868,194) (6,850,586)
Shares reacquired upon conversion into Class A (98,307) (773,395)
---------- ------------
Net increase (decrease) in shares outstanding (966,501) $ (7,623,981)
---------- ------------
---------- ------------
Year ended March 31, 2000:
Shares sold 2,005,636 $ 18,038,865
Shares issued in connection with acquisition of Prudential
Distressed Securities Fund (Note 6) 182,384 1,546,694
Shares issued in reinvestment of dividends 574,564 4,953,680
Shares reacquired (3,587,910) (30,685,872)
---------- ------------
Net increase (decrease) in shares outstanding before
conversion (825,326) (6,146,633)
Shares reacquired upon conversion into Class A (69,463) (597,173)
---------- ------------
Net increase (decrease) in shares outstanding (894,789) $ (6,743,806)
---------- ------------
---------- ------------
</TABLE>
30
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C Shares Amount
----------------------------------------------------------- ---------- ------------
Six months ended September 30, 2000:
<S> <C> <C>
Shares sold 122,569 $ 962,572
Shares issued in reinvestment of dividends 38,101 300,546
Shares reacquired (195,935) (1,543,435)
---------- ------------
Net increase (decrease) in shares outstanding (35,265) $ (280,317)
---------- ------------
---------- ------------
Year ended March 31, 2000:
Shares sold 456,465 $ 4,116,251
Shares issued in connection with acquisition of Prudential
Distressed Securities Fund (Note 6) 40,835 346,284
Shares issued in reinvestment of dividends 101,770 878,590
Shares reacquired (1,100,472) (9,540,313)
---------- ------------
Net increase (decrease) in shares outstanding (501,402) $ (4,199,188)
---------- ------------
---------- ------------
<CAPTION>
Class Z
<S> <C> <C>
Six months ended September 30, 2000:
Shares sold 39,564 $ 313,039
Shares issued in reinvestment of dividends 6,502 51,374
Shares reacquired (114,754) (904,705)
---------- ------------
Net increase (decrease) in shares outstanding (68,688) $ (540,292)
---------- ------------
---------- ------------
Year ended March 31, 2000:
Shares sold 156,866 $ 1,355,569
Shares issued in reinvestment of dividends 18,479 159,424
Shares reacquired (207,613) (1,795,687)
---------- ------------
Net increase (decrease) in shares outstanding (32,268) $ (280,694)
---------- ------------
---------- ------------
</TABLE>
Note 6. Acquisition of Prudential Distressed Securities Fund
On January 14, 2000, the High Yield Total Return Fund acquired all the net
assets of Prudential Distressed Securities Fund, Inc. ('Distressed Securities')
pursuant to a plan of reorganization approved by Distressed Securities
shareholders on May 26, 1999. The acquisition was accomplished by a tax-free
exchange of 69,637 Class A shares, 182,384 Class B shares and 40,835 Class C
shares of the High Yield Total Return Fund (valued at $2,483,555 in the
aggregate) for 58,352 Class A shares, 152,526 Class B shares and 34,150 Class C
shares, respectively, of Distressed Securities outstanding on January 14, 2000.
Distressed Securities' net assets at that date ($2,483,555), including
$1,638,031 of unrealized depreciation were combined with those of the High Yield
Total Return Fund. The aggregate net assets of the High Yield Total Return Fund
and Distressed Securities immediately before the acquisition were $135,419,598
and $2,483,555, respectively.
31
<PAGE>
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class A
<S> <C> <C> <C>
------------------------------------------------------------------------------------
Six Months
Ended Year Ended
September 30, 2000 March 31, 2000
------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.21 $ 8.91
-------- --------------
Income from investment operations
Net investment income .37 .85(d)
Net realized and unrealized loss on
investments (.53) (.70)
-------- --------------
Total from investment operations (.16) .15
-------- --------------
Less distributions
Dividends from net investment income (0.37) (.85)
Distributions in excess of net investment
income -- --
-------- --------------
Total distributions (0.37) (.85)
-------- --------------
Net asset value, end of period $ 7.68 $ 8.21
-------- --------------
-------- --------------
TOTAL RETURN(b) (1.72)% 1.38%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 20,969 $ 23,137
Average net assets (000) $ 22,033 $ 32,154
Ratios to average net assets:
Expenses, including distribution fees 1.29%(c) 1.18%(d)
Expenses, excluding distribution fees 1.04%(c) .93%(d)
Net investment income 9.31%(c) 9.84%(d)
For Classes A, B, C and Z shares:
Portfolio turnover rate 86% 101%
</TABLE>
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods of less than a full year are not
annualized.
(c) Annualized.
(d) Net of management fee waiver.
32 See Notes to Financial Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class A Class B
<S> <C> <C> <C> <C>
---------------------- --------------------------------------------------------------------
Six Months
May 5, 1998(a) Ended Year Ended May 5, 1998(a)
through March 31, 1999 September 30, 2000 March 31, 2000 through March 31, 1999
-----------------------------------------------------------------------------------------------------
$ 10.00 $ 8.21 $ 8.91 $ 10.00
---------- ---------- ---------- ----------
.79(d) .35 .80(d) .74(d)
(1.08) (.53) (.70) (1.08)
---------- ---------- ---------- ----------
(.29) (.18) .10 (.34)
---------- ---------- ----------
(.79) (.35) (.80) (.74)
(.01) -- -- (.01)
---------- ---------- ---------- ----------
(.80) (.35) (.80) (.75)
---------- ---------- ---------- ----------
$ 8.91 $ 7.68 $ 8.21 $ 8.91
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
(2.97)% (1.96)% .88% (3.45)%
$ 37,558 $ 69,761 $ 82,438 $ 97,454
$ 35,147 $ 75,536 $ 93,280 $ 92,201
1.06%(c)(d) 1.79(c)% 1.68%(d) 1.64%(c)(d)
0.89%(c)(d) 1.04(c)% 0.93%(d) 0.89%(c)(d)
9.52%(c)(d) 8.82(c)% 9.35%(d) 8.97%(c)(d)
97%
</TABLE>
See Notes to Financial Statements 33
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
------------------------------------------------------------------------------------
Six Months
Ended Year Ended
September 30, 2000 March 31, 2000
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.21 $ 8.91
-------- --------------
Income from investment operations
Net investment income .35 .80(d)
Net realized and unrealized loss on
investments (.53) (.70)
-------- --------------
Total from investment operations (.18) .10
-------- --------------
Less distributions
Dividends from net investment income (.35) (.80)
Distributions in excess of net investment
income -- --
-------- --------------
Total distributions (.35) (.80)
--------
Net asset value, end of period $ 7.68 $ 8.21
-------- --------------
-------- --------------
TOTAL RETURN(b) (1.96)% .88%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 12,481 $ 13,618
Average net assets (000) $ 12,812 $ 16,567
Ratios to average net assets:
Expenses, including distribution fees 1.79%(c) 1.68%(d)
Expenses, excluding distribution fees 1.04%(c) .93%(d)
Net investment income 8.82%(c) 9.35%(d)
</TABLE>
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods of less than a full year are not
annualized.
(c) Annualized.
(d) Net of management fee waiver.
34 See Notes to Financial Statements
<PAGE>
Prudential High Yield Total Return Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C Class Z
<S> <C> <C> <C> <C>
---------------------- --------------------------------------------------------------------
Six Months
May 5, 1998(a) Ended Year Ended May 5, 1998(a)
through March 31, 1999 September 30, 2000 March 31, 2000 through March 31, 1999
-----------------------------------------------------------------------------------------------
$ 10.00 $ 8.21 $ 8.91 $ 10.00
---------- ---------- ---------- ----------
.74(d) .40 .87(d) .80(d)
(1.08) (.53) (.70) (1.08)
---------- ---------- ---------- ----------
(.34) (.13) .17 (.28)
---------- ---------- ---------- ----------
(.74) (.39) (.87) (.80)
(.01) -- -- (.01)
---------- ---------- ---------- ----------
(.75) (.39) (.87) (.81)
---------- ---------- ---------- ----------
$ 8.91 $ 7.69 $ 8.21 $ 8.91
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
(3.45)% (1.59)% 1.63% (2.82)%
$ 19,249 $ 1,048 $ 1,683 $ 2,113
$ 18,089 $ 1,438 $ 1,919 $ 2,060
1.64%(c)(d) 1.04%(c) 0.93%(d) 0.89%(c)(d)
0.89%(c)(d) 1.04%(c) 0.93%(d) 0.89%(c)(d)
8.96%(c)(d) 9.54%(c) 10.08%(d) 9.90%(c)(d)
</TABLE>
See Notes to Financial Statements 35
<PAGE>
www.prudential.com (800) 225-1852
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
---------------------------------------------
Directors
Eugene C. Dorsey
Delayne D. Gold
Robert F. Gunia
Thomas T. Mooney
Stephen P. Munn
David R. Odenath, Jr.
Richard A. Redeker
Judy A. Rice
Nancy H. Teeters
Louis A. Weil, III
Officers
David R. Odenath, Jr., President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Deborah A. Docs, Secretary
William V. Healey, Assistant Secretary
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777
Distributor
Prudential Investment Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Swidler Berlin Shereff Friedman, LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
---------------------------------------------
Fund Symbols NASDAQ CUSIP
Class A PYRAX 74437D109
Class B PYRBX 74437D208
Class C PHYCX 74437D307
Class Z -- 74437D406
The views expressed in this report and information
about the Fund's portfolio holdings are for the
period covered by this report and
are subject to change thereafter.
The accompanying financial statements as
of September 30, 2000, were not audited and,
accordingly, no opinion is expressed on them.
<PAGE>
(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
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U.S. POSTAGE
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