(ICON)
Prudential
High Yield
Fund, Inc.
SEMI ANNUAL REPORT
June 30, 1995
Prudential Mutual Funds
Building Your Future
On Our StrengthSM (LOGO)
<PAGE>
Prudential High Yield Fund, Inc.
Performance At A Glance.
High yield bonds generated solid returns in the first six months of the year,
powered by stronger corporate earnings and falling interest rates. Interest
rates fell as economic growth slowed, lifting bond prices higher in one of the
strongest bond market rallies in years. We're pleased to report the Prudential
High Yield Fund achieved above-average gains during this time, as measured by
Lipper Analytical Services.
<TABLE>
Cumulative Total Returns1 As of 6/30/95
<CAPTION>
------------------------------------------------------------------------------
Six One Five Ten Since
Months Year Years Years Inception2
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A 9.9% 9.5% 81.3% N/A 78.1%
------------------------------------------------------------------------------
Class B 9.7 9.0 76.5 140.1% 374.4
------------------------------------------------------------------------------
Class C 9.7 N/A N/A N/A 8.9
------------------------------------------------------------------------------
Lipper High Yield Avg.3 9.7 8.2 81.5 155.0 442.7
------------------------------------------------------------------------------
</TABLE>
<TABLE>
Average Annual Total Returns1 As of 6/30/95
<CAPTION>
----------------------------------------------------------------------------
One Five Since
Year Years Inception2
----------------------------------------------------------------------------
<S> <C> <C> <C>
Class A 5.1% 11.7% 10.4%
----------------------------------------------------------------------------
Class B 4.0 11.9 10.1
----------------------------------------------------------------------------
Class C N/A N/A N/A
----------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------
30-Day
Dividend SEC-Yield
<S> <C> <C> <C>
Your Class A $0.69 10.5%
Dividend -------------------------------------
As of 6/30/95 Class B $0.65 10.3
-------------------------------------
Class C $0.65 10.3
------------------------------------------------------
</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.
1Source: Prudential Mutual Fund Management Inc. and Lipper Analytical Services,
Inc. The cumulative total returns do not take into account sales charges. The
average annual returns do take into account applicable sales charges. The Fund
charges a maximum front-end sales load of 4% for Class A shares and a contingent
deferred sales charge of 5%, 4%, 3%, 2%, 1% and 1% for six years, for Class B
shares. Class C shares have a 1% CDSC for one year. Class B shares
automatically convert to Class A shares on a quarterly basis, after
approximately seven years.
2Inception dates: 1/22/90 Class A; 3/29/79, Class B; 8/1/94 Class C.
3Lipper average returns are for 116 funds for six months, one year, 106 funds
for one year, 60 funds for five years, 33 funds for 10 years, and 19 funds
since inception of the Class B shares on 3/29/79.
(CHART)
Source: Lipper Analytical Services, Inc. Financial markets change, so a mutual
fund's past performance should never be used to predict future results. The
risks to each of the investments listed above are different -- we provide
12-month total returns for several Lipper mutual fund categories to show you
that reaching for higher yields means tolerating more risk. The greater the
risk, the larger the potential reward or loss. In addition, we've added
historical 20-year average annual returns to show that 1995's returns (so far)
are higher than normal. These returns assume the reinvestment of dividends.
Stock funds will fluctuate a great deal. Smaller capitalization stocks offer
greater potential for long term growth but may be more volatile than larger
capitalization stocks. Investors receive higher historical total returns from
stocks than from most other investments.
Bond funds provide more income than stock funds, which can help smooth out
their total returns year by year. But their prices still fluctuate (sometimes
a good deal) and their returns are historically lower than those of stock funds.
Sector or specialty stock funds usually entail the greatest risks because they
are not widely diversified. They are designed for sophisticated investors who
can tolerate additional risk in exchange for higher potential rewards or losses.
Money market funds attempt to preserve a constant share value; they don't
fluctuate much in price but their returns are generally among the lowest of the
major investment categories.
<PAGE>
Lars Berkman, Fund Manager
(PICTURE)
Portfolio
Manager's Report
The Fund invests primarily in corporate bonds rated BBB or lower by independent
rating agencies, with a focus on bonds rated B or better. These bonds are below
investment grade and are commonly referred to as "junk bonds." We keep the Fund
well diversified, researching bonds intensively to find those with attractive
yields and improving credit quality.
Overview
Lars and his team of research professionals conduct extensive credit research
to seek high yield bonds which he believes may offer income and appreciation
potential.
1. Strategy Session.
Emphasizing Quality.
Think of high yield bonds as a hybrid of bonds and stocks. Like bonds, their
prices generally rise as interest rates fall. But interest rates are usually
not the most important factor influencing high yield bond prices, like stocks.
GRAPH
Instead, the strength of the economy and of corporate earnings are often more
crucial. That's why while the economy has been slowing and interest rates have
been falling, we've been upgrading the Fund's quality. We are focusing on
noninvestment grade bonds. These bonds have slightly lower income levels but
offer more protection to the Fund's net asset value (should credit quality
weaken in a slowing economy).We have been emphasizing:
- bonds of large, established issuers with proven products;
- bonds that are more senior in the firm's capital structure (those with higher
priority claims on the company's assets);
- bonds from economically defensive companies (those that may do well even if
the economy slows), like supermarkets, cable and health care. These types of
companies have products that generally remain in strong demand regardless of
the economic climate.
As of June 30, 1995, the Fund held 165 bonds. We are purposely limiting the
number of bonds we hold in order to more intensely scrutinize each holding for
quality.
<PAGE>
2. What Went Well.
Better Bonds at
Good Prices.
There were few high yield bonds issued in the first quarter, supporting prices.
But in the second quarter, sharply falling interest rates generated a flood of
new supply. We're buying better quality new bonds at attractive prices. We've
been tempted to buy some single B credits yielding as much as 13%, but these
are very weak issuers so we've passed up these offerings in favor of stronger
bonds rated B and BB that are yielding around 10.5%. They offer lower yields,
but they are still four percentage points higher than U.S. Treasurys of the
same maturity.
Given prospects for weaker economic growth, we're looking to find companies
that have public equity, are leaders in their industries and have strong
management. Some of thecompanies that we purchased are: Rogers Cable, the
largest Canadian cable operator; Host Marriott, a leading hotel chain; and
Exide, the leading car battery manufacturer.
Credit Problems
Avoided.
We've avoided serious credit problems. A number of high yield companies had
serious financial difficulties in the first half, including Bradlees, the
discount department store in the Northeast, and Mesa Petroleum, the natural gas
company. Bradlees filed for reorganization under the bankruptcy laws. When our
credit analysts noted these troubles before the filing, we sold our holdings at
prices significantly above bankruptcy levels. We also sold our Mesa bonds before
the failure of a major asset sale, when our credit analysis showed that Mesa had
little to gain and more to lose.
3. And Not So Well.
Interest Rates and
Higher Credit Quality -
Double-Edged Swords.
Falling interest rates raise bond prices, but they also reduce the income
offered on new bonds. In addition, the BB-rated bonds that we've been buying
have lower coupons than riskier bonds, which also reduces our income. As a
result, we are closely monitoring the Fund's income level and our ability to
sustain our current distributions to you. In light of slower economic growth,
and the potential for an increase in high yield bond defaults, we believe that
our focus on quality is prudent. Avoiding higher-yielding, lower quality bonds
which are more susceptible to default risk should help protect the Fund's net
asset value.
4. Looking Ahead.
As long as economic growth remains positive, high yield bonds should continue
to perform well, although we don't expect the same type of gains experienced
in the first half of the year. Investors should expect to mainly earn coupon
income, with possibly some price gains. Clients should also be prepared for
more price volatility than in the first half, since the sales and earnings of
high yield issuers could slow if the economy weakens further. In this climate
we will carefully scrutinize the creditworthiness of our holdings so that we
can sell bonds of companies that are most prone to weakening credit quality.
1
<PAGE>
President's Letter
July 31, 1995
Dear Shareholder:
You've probably noticed your shareholder report looks different
this month. We've designed it to provide clear, concise and forthright
information about your investment, its performance, risks and potential rewards.
And, from time to time, I'll share some thoughts with you about the industry,
mutual fund trends and how we're responding to them at Prudential Mutual Funds.
On The Hill
One recent trend we like is part of the "Contract with America." It's called
the American Dream Savings Account and it was approved by the House of
Representatives earlier in the year. The Senate has now taken up the proposal,
which would improve the traditional Individual Retirement Account program by
allowing higher non-working spouse contributions. The proposed law would also
allow tax-free and penalty-free withdrawals from the account before age 59 1/2,
for certain expenses. Prudential Mutual Funds supports the proposal and we
urge you to share your opinion about it with your Senator. You can reach your
Senator's office by calling 202-224-3121.
In Closing
One final note: if you're a Class B shareholder, you'll begin noticing a change
on your statements once you've held your shares for seven years. At that time
they will automatically begin to convert to Class A shares on a quarterly
basis. Since Class A shares carry lower annual distribution charges than
Class B shares, your total returns will automatically rise after the conversion.
Conversions started earlier this year and will occur each calendar quarter --
beginning in December, 1995, they'll take place every March, June, September
and December. I hope you'll find this information useful as you work with
your financial advisor or registered representative to develop your personal
investment plan. Thank you for choosing Prudential Mutual Funds for your mutual
fund investment.
Sincerely,
Richard A. Redeker
President
2
<PAGE>
Portfolio of Investments as of PRUDENTIAL HIGH YIELD FUND, INC.
June 30, 1995 (Unaudited)
-----------------------------------------------------------
------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Moody's Amount
Rating (000) Description Value (Note 1)
<C> <C> <S> <C>
-----------------------------------------------------------
LONG-TERM INVESTMENTS--96.0%
BONDS--95.2%
-----------------------------------------------------------
Aerospace--1.7%
B1 $17,515 K & F Industries, Inc.,
Sr. Sec'd. Notes,
11.875%, 12/1/03 $ 17,865,300
Ba3 18,500 Rohr, Inc., Sr. Notes,
11.625%, 5/15/03 19,517,500
B3 27,750 Sequa Corp.,
Sr. Sub. Notes,
9.375%, 12/15/03 25,946,250
--------------
63,329,050
------------------------------------------------------------
Airlines--0.9%
NR 6,716 NWA, Inc., Sr. Notes,
12.09%, 12/31/00 6,846,296
USAir, Inc., Sr. Notes,
B3 5,000 9.625%, 2/1/01 4,250,000
B3 26,275 10.00%, 7/1/03 22,333,750
--------------
33,430,046
------------------------------------------------------------
Automotive Parts--4.5%
B3 13,000 Doehler Jarvis, Inc.,
Sr. Notes,
11.875%, 6/1/02 13,910,000
Exide Corp.,
B1 23,000D Sr. Notes,
(cost $23,204,375;
purchased-1995),
10.00%, 4/15/05 23,632,500
B2 18,000 Sr. Sub. Def'd. Deb.,
12.25%, 12/15/04 14,310,000
Foamex JPS Automotive
L.P.,
B2 23,700 Sr. Notes,
11.125%, 6/15/01 23,344,500
B1 13,500 Foamex L.P., Sr. Notes,
11.25%, 10/1/02 13,297,500
Caa 20,250 Sr. Sec'd. Disc. Deb.,
Ser. B,
Zero Coupon (until
7/1/99),
14.00%, 7/1/04 10,935,000
B3 $ 6,910 Sr. Sub. Deb.,
11.875%, 10/1/04 $ 6,529,950
B2 12,500 Harvard Industries, Inc.,
Sr. Notes,
12.00%, 7/15/04 12,625,000
B2 10,000 J.B. Poindexter & Co.,
Inc.,
Sr. Notes,
12.50%, 5/15/04 9,600,000
B2 10,130 Motor Wheel Corp.,
Sr. Notes,
11.50%, 3/1/00 8,813,100
B3 31,750 SPX Corp., Sr. Sub. Notes,
11.75%, 6/1/02 33,099,375
--------------
170,096,925
------------------------------------------------------------
Broadcasting & Other Media--12.8%
B1 10,000 Ackerly Communications,
Inc., Sr. Sec'd. Notes,
10.75%, 10/1/03 10,500,000
Adelphia Communications
Corp., Sr. Notes,
12.50%, 5/15/02 21,123,850
B3 21,230
B2 19,707 9.50%, 2/15/04, PIK 16,209,010
B3 9,500 Allbritton Communications
Co., Sr. Sub. Deb.,
11.50%, 8/15/04 10,070,000
B2 25,500 Bell Cablemedia Co.,
Sr. Disc. Notes,
Zero Coupon (until
7/15/99),
11.95%, 7/15/04 17,148,750
Benedek Broadcasting
Corp., Sr. Notes,
(cost $15,542,500;
purchased-1995),
11.875%, 3/1/05 15,874,875
B2 15,450D
B1 26,000 Cablevision Industries
Corp.,
Sr. Notes,
9.25%, 4/1/08 26,910,000
--------------------------------------------------------------------------------
See Notes to Financial Statements.
3
<PAGE>
<PAGE>
Portfolio of Investments as of PRUDENTIAL HIGH YIELD FUND, INC.
June 30, 1995 (Unaudited)
-----------------------------------------------------------
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Moody's Amount Description Value (Note 1)
Rating (000)
<C> <C> <S> <C>
-----------------------------------------------------------
Broadcasting & Other Media (cont'd.)
Cablevision System Corp.,
B3 $ 6,560 Sr. Sub. Deb.,
10.75%, 4/1/04 $ 6,888,000
B3 20,750 Sr. Sub. Notes,
9.875%, 2/15/13 21,891,250
B2 33,385 Century Communications
Corp., Sr. Sub. Notes,
11.875%, 10/15/03 35,388,100
B3 9,600 Chancellor Broadcasting
Co.,
Sr. Sub. Notes,
12.50%, 10/1/04 9,936,000
Continental Cablevision,
Inc.,
Ba2 18,500 Sr. Deb.,
9.50%, 8/1/13 19,055,000
B1 15,700 Sr. Sub. Deb.,
11.00%, 6/1/07 17,427,000
NR 750 Cooke Media Group, Inc.,
Sub. Deb.,
11.625%, 4/1/99 720,000
NR 27,468 Falcon Holdings Corp.
L.P.,
Sr. Sub. Notes,
11.00%, 9/15/03, PIK 24,721,239
B3 10,800D Granite Broadcasting
Corp.,
Sr. Notes, Ser. A,
(cost $10,806,750;
purchased-1995),
10.375%, 5/15/05 10,840,500
B3 6,500D/@ Heartland Wireless
Communications, Inc.,
Sr. Notes,
(cost $6,500,000;
purchased-1995),
13.00%, 4/15/03 6,841,250
B3 38,200D International Cabletel,
Inc.,
Sr. Notes,
(cost $21,112,190;
purchased-1995),
Zero Coupon (until
4/15/00),
12.75%, 4/15/05 22,729,000
Jones Intercable, Inc.,
Sr. Sub. Deb.,
B1 14,950 11.50%, 7/15/04 16,519,750
B1 18,645 10.50%, 3/1/08 19,763,700
B3 $50,000 Marcus Cable Operating Co.
L. P., Sr. Sub. Disc.
Notes,
Zero Coupon (until
2/1/00),
13.50%, 8/1/04 $ 31,625,000
Caa 17,000@ Peoples Choice TV Corp.,
Sr. Disc. Notes,
Zero Coupon, 6/1/04 8,075,000
Rogers Cablesystems, Inc.,
NR 60,000 Sr. Notes,
10.00%, 3/15/05 61,650,000
Ba3 10,000 Sr. Sec'd. Deb.,
10.125%, 9/1/12 10,175,000
B3 44,500@ United Int'l. Holdings,
Inc.,
Sr. Disc. Notes,
Zero Coupon, 11/15/99 26,922,500
NR 16,000D Young Broadcasting, Inc.,
Sr. Notes,
(cost $16,000,000;
purchased-1995),
10.125%, 2/15/05 16,040,000
--------------
485,044,774
------------------------------------------------------------
Building & Related Industries--4.8%
B1 35,425 American Standard, Inc.,
Sr. Sub. Deb.,
Zero Coupon (until
6/1/98),
10.50%, 6/1/05 26,923,000
B2 8,250 Baldwin Co., Sr. Notes,
10.375%, 8/1/03 4,991,250
B1 34,750 Building Material Corp. of
America, Sr. Def'd.
Notes,
Zero Coupon (until
7/1/99),
11.75% 7/1/04, Ser. B 20,676,250
B1 10,000 Continental Homes
Holdings, Sr. Notes,
12.00%, 8/1/99 10,050,000
B3 15,000 Greystone Homes, Inc.,
Sr. Notes,
10.75%, 3/1/04 13,050,000
NR 10,000 J.M. Peters, Inc., Sr.
Notes,
12.75%, 5/1/02 8,200,000
--------------------------------------------------------------------------------
4 See Notes to Financial Statements.
<PAGE>
<PAGE>
Portfolio of Investments as of PRUDENTIAL HIGH YIELD FUND, INC.
June 30, 1995 (Unaudited)
-----------------------------------------------------------
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Principal
Moody's Amount Description Value (Note 1)
Rating (000)
<C> <C> <S> <C>
-----------------------------------------------------------
Building & Related Industries (cont'd.)
B3 $25,125 Nortek, Inc.,
Sr. Sub. Notes,
9.875%, 3/1/04 $ 22,612,500
B2 15,600 NVR, Inc., Sr. Notes,
11.00%, 4/15/03 14,196,000
Ba3 8,950 Ryland Group, Inc.,
Sr. Sub. Notes,
10.50%, 7/15/02 8,860,500
Ba3 26,580 U.S. Home Corp.,
Sr. Notes,
9.75%, 6/15/03 25,782,600
NR 25,000 Walter Industries, Inc.,
Sr. Notes,
12.19%, 3/15/00 25,000,000
--------------
180,342,100
------------------------------------------------------------
Casinos--4.6%
B2 25,900 Bally's Grand, Inc.,
First Mtge. Notes,
10.375%, 12/15/03 25,252,500
B1 18,200 Bally's Park Place
Funding, Inc.,
First Mtge. Bonds,
9.25%, 3/15/04 17,108,000
B2 12,500 Boyd Gaming Corp.,
Sr. Sub. Notes, Ser. B,
10.75%, 9/1/03 12,875,000
B1 10,000 Casino Magic Finance
Corp., First Mtge. Bonds,
11.50%, 10/15/01 7,600,000
B1 16,000 Empress River Casino
Finance Corp., Sr. Notes,
10.75%, 4/1/02 16,000,000
Ba3 12,000 Grand Casino Resorts,
Inc.,
First Mtge. Notes, Ser.
B,
12.50%, 2/1/00 12,960,000
NR 8,897 Hollywood Casino Corp.,
Sr. Sec'd. Notes,
14.00%, 4/1/98 9,764,458
NR 5,000 President Riverboat
Casinos, Inc.,
Sr. Notes,
13.00%, 9/15/01 4,300,000
B3 $ 7,960 Resorts Int'l., Inc.,
First Mtge. Notes,
7.25%, 6/30/00 $ 6,576,286
B2 18,800 Station Casinos, Inc.,
Sr. Sub. Notes,
9.625%, 6/1/03 17,343,000
Caa 55,464 Trump Taj Mahal Funding,
Inc.,
First Mtg. Bonds,
Class B, PIK,
11.35%, 11/15/99 43,954,891
--------------
173,734,135
------------------------------------------------------------
Chemicals--4.0%
B2 20,000 Arcadian Partners L.P.,
Sr. Notes, Ser. A,
10.75%, 5/1/05 20,150,000
Ba3 44,500 G-I Holdings, Inc.,
Sr. Notes,
Zero Coupon, 10/1/98 29,815,000
Huntsman Corp.,
First Mtge. Notes,
10.625%, 4/15/01 13,715,000
B1 13,000
B1 3,500 11.00%, 4/15/04 3,823,750
NR 19,427 Indspec Chemical Corp.,
Sr. Sub. Notes,
Zero Coupon (until
12/1/98),
10.50%, 12/1/03 12,239,010
NL Industries, Inc.,
B2 15,830 Sr. Notes,
Zero Coupon (until
10/15/98),
13.00%, 10/15/05 11,081,000
B1 20,850 Sr. Sec'd Notes,
11.75%, 10/15/03 21,736,125
B1 19,600 Rexene Corp., Sr. Notes,
11.75%, 12/1/04 20,972,000
Ba3 16,500D Terra Industries, Inc.,
Sr. Notes,
(cost $16,500,000;
purchased-1995),
10.50%, 6/15/05 16,912,500
--------------
150,444,385
--------------------------------------------------------------------------------
See Notes to Financial Statements.
5
<PAGE>
<PAGE>
Portfolio of Investments as of PRUDENTIAL HIGH YIELD FUND, INC.
June 30, 1995 (Unaudited)
-----------------------------------------------------------
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Moody's Amount Description Value (Note 1)
Rating (000)
<C> <C> <S> <C>
-----------------------------------------------------------
Consumer Goods--2.2%
B3 $ 7,000@ Health O Meter, Inc.,
Sr. Sub. Notes,
13.00%, 8/15/02 $ 6,370,000
B2 5,800D Remington Arms, Inc.,
Sr. Sub. Notes,
(cost $5,002,375;
purchased-1994),
10.00%, 12/1/03 5,452,000
B2 31,345 Revlon Consumer Products
Corp., Sr. Notes,
9.375%, 4/1/01 30,247,925
B3 57,500 Revlon Worldwide Corp.,
Sr. Sec'd. Notes,
Zero Coupon, 3/15/98 39,818,750
--------------
81,888,675
------------------------------------------------------------
Diversified Industries--4.2%
Envirodyne Industries,
Inc.,
Sr. Notes,
10.25%, 12/1/01 14,707,500
B3 18,500
NR 5,000D Sr. Sec'd. Notes,
(cost $5,000,000;
purchased-1995),
12.00%, 6/15/00 4,875,000
B3 5,000 Fairchild Corp., Sub.
Deb.,
12.00%, 10/15/01 4,350,000
B2 14,800 Fairchild Industries,
Inc.,
Sr. Sec'd. Notes,
12.25%, 2/1/99 15,022,000
IMO Industries, Inc.,
Sr. Sub. Deb.,
B3 15,180 12.25%, 8/15/97 15,217,950
B3 5,750 12.00%, 11/1/01 5,951,250
Interlake Corp.,
B2 9,500 Sr. Notes,
12.00%, 11/15/01 9,713,750
B3 27,420 Sr. Sub. Deb.,
12.125%, 3/1/02 27,077,250
B3 27,000 Jordan Industries, Inc.,
Sr. Notes,
10.375%, 8/1/03 24,907,500
B3 $ 1,000 MAXXAM Group, Inc.,
Sr. Sec'd. Disc. Notes,
Zero Coupon (until
8/1/98),
12.25%, 8/1/03 $ 620,000
B3 10,500 Newflo Corp., Sub. Notes,
13.25%, 11/15/02 10,447,500
NR 29,000D/@ Terex Corp., Sr. Notes,
(cost $28,950,000;
purchased-1995),
13.75%, 5/12/02 25,810,000
--------------
158,699,700
------------------------------------------------------------
Drugs & Health Care--3.1%
B2 36,950 Charter Medical Corp.,
Sr. Sub. Notes,
11.25%, 4/15/04 39,351,750
B2 28,500 Continental Medical
System, Inc., Sr. Sub.
Notes,
10.875%, 8/15/02 29,925,000
Ba3 46,500 National Medical
Enterprises, Inc., Sr.
Sub. Notes,
10.125%, 3/1/05 49,115,625
--------------
118,392,375
------------------------------------------------------------
Energy--5.5%
NR 4,100D Chesapeake Energy Corp.,
Sr. Notes,
(cost $4,120,500;
purchased-1995),
10.50%, 6/1/02 4,028,250
B1 30,000 Clark R&M Holdings, Inc.,
Sr. Sec'd. Notes,
Zero Coupon, 2/15/00 18,450,000
Caa 11,750 Empire Gas Corp.,
Sr. Sec'd. Notes,
7.00% (until 7/15/99),
10.00%, 7/15/04 9,400,000
B2 10,250 Falcon Drilling, Inc.,
Sr. Notes,
9.75%, 1/15/01 10,147,500
--------------------------------------------------------------------------------
6 See Notes to Financial Statements.
<PAGE>
<PAGE>
Portfolio of Investments as of PRUDENTIAL HIGH YIELD FUND, INC.
June 30, 1995 (Unaudited)
-----------------------------------------------------------
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Moody's Amount Description Value (Note 1)
Rating (000)
<C> <C> <S> <C>
-----------------------------------------------------------
Energy (cont'd.)
Gulf Canada Resources,
Ltd.,
Ba3 $30,480 Sr. Sub. Deb.,
9.25%, 1/15/04 $ 29,718,000
Ba3 40,000 Sr. Sub. Notes,
9.625%, 7/1/05 39,800,000
B2 12,850 Kenetech Corp.,
Sr. Sec'd. Notes,
12.75%, 12/15/02 12,593,000
B1 11,000 Maxus Energy Corp.,
Notes,
9.375%, 11/1/03 10,175,000
Petroleum Heat & Power,
Inc.,
B2 11,980 Sub. Deb.,
9.375%, 2/1/06 10,722,100
B2 8,010 Sub. Notes,
10.125%, 4/1/03 7,649,550
B2 26,000 Trans Texas Gas Corp.,
Sr. Sec'd. Notes,
11.50%, 6/15/02 26,520,000
B1 18,000 Triton Energy Corp.,
Sr. Sub. Disc. Notes,
Zero Coupon (until
12/15/96),
9.75%, 12/15/00 15,840,000
B1 11,850 Wainoco Oil Corp.,
Sr. Notes,
12.00%, 8/1/02 12,205,500
--------------
207,248,900
------------------------------------------------------------
Financial Services--0.5%
B1 18,700 Reliance Group Holdings,
Inc.,
Sr. Sub. Deb.,
9.75%, 11/15/03 18,139,000
------------------------------------------------------------
Food & Beverage--4.1%
B3 12,500 Curtice Burns Foods, Inc.,
Sr. Sub. Notes,
12.25%, 2/1/05 13,281,250
NR 17,319D Del Monte Corp.,
Sub. Notes,
(cost $18,285,513;
purchased-1993),
12.25%, 9/1/02, PIK 16,428,600
B2 $ 9,000 Di Giorgio Corp.,
Sr. Notes,
12.00%, 2/15/03 $ 6,570,000
B3 26,698 Fresh Del Monte Produce,
N.V., Sr. Notes,
10.00%, 5/1/03 21,358,400
B3 12,531 Heileman Acquisition
Corp., Sr. Sub. Notes,
9.625%, 1/31/04 7,518,600
B3 13,225 Pilgrim's Pride Corp.,
Sr. Sub. Notes,
10.875%, 8/1/03 12,464,562
NR 13,237 PM Holdings Corp.,
Sub. Notes,
Zero Coupon (until
9/1/00),
11.50% 9/1/05 6,750,870
Premium Standard Farms L.
P.,
NR 34,627 Sr. Sec'd. Disc. Notes,
12.00%, 9/15/03 27,009,060
NR 10,000 Sr. Sec'd. Notes,
12.25%, 6/15/04 9,800,000
Caa 8,780 Seven-Up/RC Bottling Co.,
Sr. Sec'd. Notes,
11.50%, 8/1/99 7,726,400
Specialty Foods Corp.,
Sr. Sub. Notes,
11.25%, 8/15/03 14,504,125
Caa 14,725
B3 12,000 Sr. Unsec'd. Notes,
10.25%, 8/15/01 11,520,000
--------------
154,931,867
------------------------------------------------------------
Leisure & Tourism--2.7%
BB-* 48,000D HMH Properties, Inc.,
Sr. Notes,
(cost $46,241,760;
purchased-1995),
9.50%, 5/15/05 46,440,000
BB-* 45,750D Host Marriot Travel
Plazas, Inc., Sr. Notes,
(cost $44,236,875;
purchased-1995),
9.50%, 5/15/05 43,805,625
--------------------------------------------------------------------------------
See Notes to Financial Statements. 7 -----
<PAGE>
<PAGE>
Portfolio of Investments as of PRUDENTIAL HIGH YIELD FUND, INC.
June 30, 1995 (Unaudited)
-----------------------------------------------------------
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Moody's Amount Description Value (Note 1)
Rating (000)
<C> <C> <S> <C>
-----------------------------------------------------------
Leisure & Tourism (cont'd.)
B2 $ 5,000 Kloster Cruise Ltd.,
Sr. Sec'd. Notes,
13.00%, 5/1/03 $ 3,850,000
Ba3 8,500 United Artists, Inc.,
Sr. Sec'd. Notes,
11.50%, 5/1/02 9,201,250
--------------
103,296,875
------------------------------------------------------------
Miscellaneous Services--1.0%
Caa 13,500 Americold Corp.,
First Mtg. Bonds, Ser. B,
11.50%, 3/1/05 13,162,500
B3 5,565 La Petite Holdings Corp.,
Sr. Sec'd. Notes,
9.625%, 8/1/01 5,203,275
B3 18,000D United Stationers Supply
Co., Sr. Notes,
(cost $18,170,000;
purchased-1995),
12.75%, 5/1/05 18,292,500
--------------
36,658,275
------------------------------------------------------------
Packaging & Containers--1.6%
B2 24,940 Anchor Glass Container
Corp., Sr. Sub. Deb.,
9.875%, 12/15/08 22,,820,100
B2 23,500 Container Corp.,
Sr. Notes, Ser. A,
11.25%, 5/1/04 24,440,000
B3 4,250 Gaylord Container Corp.,
Sr. Notes,
11.50%, 5/15/01 4,505,000
B3 10,750 Ivex Packaging Corp.,
Sr. Sub. Notes,
12.50%, 12/15/02 11,556,250
--------------
63,321,350
Paper & Forest Products--7.0%
Domtar, Inc., Notes,
12.00%, 4/15/01 $ 21,045,000
Ba1 $18,300
Caa 63,500 Sr. Sub. Disc. Deb.,
Zero Coupon (until
5/15/96),
12.75%, 5/15/05 62,230,000
Ba3 22,500 Indah Kiat Int'l. Finance
Co.,
Sr. Sec'd. Notes, Ser. C,
12.50%, 6/15/06 22,500,000
Ba3 9,500 Malette, Inc.,
Sr. Sec'd. Notes,
12.25%, 7/15/04 10,545,000
B3 38,653 Pacific Lumber Co.,
Sr. Notes,
10.50%, 3/1/03 35,464,127
B2 43,250 Repap Enterprises, Inc.,
Sr. Notes,
10.625%, 4/15/05 43,682,500
B1 15,000@ SD Warren Co.,
Sr. Sub. Notes, Ser. B,
12.00%, 12/15/04 16,162,500
B1 15,000 Stone Consolidated, Inc.,
Sr. Sub. Notes,
10.25%, 12/15/00 15,562,500
Stone Container Corp.,
B1 19,500 First Mtge. Notes,
10.75%, 10/1/02 20,426,250
Sr. Notes,
B1 1,000 12.625%, 7/15/98 1,085,000
B1 14,272 11.875%, 12/1/98 15,378,080
--------------
264,080,957
------------------------------------------------------------
Plastic Products--0.8%
B2 19,800 Applied Extrusion
Technology, Inc.,
Sr. Notes, Ser. B,
11.50%, 4/1/02 20,790,000
B3 12,000 Plastic Specialty &
Technology, Inc.,
Sr. Notes,
11.25%, 12/1/03 10,980,000
--------------
31,770,000
--------------------------------------------------------------------------------
8 See Notes to Financial Statements.
<PAGE>
<PAGE>
Portfolio of Investments as of PRUDENTIAL HIGH YIELD FUND, INC.
June 30, 1995 (Unaudited)
-----------------------------------------------------------
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Moody's Amount Description Value (Note 1)
Rating (000)
<C> <C> <S> <C>
-----------------------------------------------------------
Pollution Control--0.4%
B2 $ 5,000 Clean Harbors, Inc.,
Sr. Notes,
12.50%, 5/15/01 $ 4,450,000
B3 12,000 ICF Kaiser Int'l., Inc.,
Sr. Sub. Notes,
12.00%, 12/31/03 11,370,000
--------------
15,820,000
------------------------------------------------------------
Publishing--2.3%
B3 14,000 Affiliated Newspapers,
Sr. Disc. Notes,
Zero Coupon (until
7/1/99),
13.25%, 7/1/06 8,330,000
B1 9,000 American Media Operations,
Inc.,
Sr. Sub. Notes,
11.625%, 11/15/04 9,630,000
B3 12,500 Big Flower Press, Inc.,
Sr. Sub. Notes,
10.75%, 8/1/03 12,312,500
B2 10,000 Garden State Newspapers,
Sr. Sub. Notes,
12.00%, 7/1/04 10,000,000
B3 8,500 Mail-Well Envelope Corp.,
Sr. Sub. Notes,
10.50%, 2/15/04 7,565,000
B3 22,750 Marvel Holdings, Inc.,
Sr. Notes,
Zero Coupon, 4/15/98 16,038,750
B3 14,500 Neodata Services, Inc.,
Sr. Def'd. Notes, Ser. B,
Zero Coupon (until
5/1/96), 12.00%, 5/1/03 12,071,250
B2 11,000 Williamhouse Regency
Delaware, Inc.,
Sr. Sub. Deb.,
11.50%, 6/15/05 11,000,000
--------------
86,947,500
Restaurants--1.5%
B2 $16,000 Family Restaurants, Inc.,
Sr. Notes,
9.75%, 2/1/02 $ 10,400,000
Flagstar Corp.,
Sr. Notes,
10.75%, 9/15/01 40,185,000
B2 42,750
Caa 8,000 Sr. Sub. Deb.,
11.25%, 11/1/04 6,240,000
--------------
56,825,000
------------------------------------------------------------
Retail--2.9%
Caa 12,250 Apparel Retailers, Inc.,
Sr. Disc. Deb.,
Zero Coupon (until
8/15/98),
12.75%, 8/15/05 7,472,500
B2 10,000 Brylane L.P.,
Sr. Sub. Notes,
10.00%, 9/1/03 9,300,000
B1 20,600 Cole National Corp.,
Sr. Notes,
11.25%, 10/1/01 19,261,000
B2 20,000 Color Tile, Inc.,
Sr. Notes,
10.75%, 12/15/01 9,600,000
Ba3 20,320 Hills Stores Co.,
Sr. Notes,
10.25%, 9/30/03 20,116,800
B1 14,850 Musicland Group, Inc.,
Sr. Sub. Notes,
9.00%, 6/15/03 13,365,000
B2 6,500 Orchard Supply Corp.,
Sr. Notes,
9.375%, 2/15/02 5,720,000
B1 1,797 Pier 1 Imports, Inc.,
Sub. Deb.,
11.50%, 7/15/03 1,866,634
B3 14,290 Specialty Retailers, Inc.,
Sr. Sub. Notes,
11.00%, 8/15/03 13,146,800
--------------------------------------------------------------------------------
See Notes to Financial Statements.
9
<PAGE>
<PAGE>
Portfolio of Investments as of PRUDENTIAL HIGH YIELD FUND, INC.
June 30, 1995 (Unaudited)
-----------------------------------------------------------
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Moody's Amount Description Value (Note 1)
Rating (000)
<C> <C> <S> <C>
-----------------------------------------------------------
Retail (cont'd.)
B3 $10,000 Wickes Lumber Co.,
Sr. Sub. Disc. Notes,
11.625%, 12/15/03 $ 8,400,000
--------------
108,248,734
------------------------------------------------------------
Steel & Metals--6.0%
B3 22,061 Envirosource, Inc.,
Sr. Notes,
9.75%, 6/15/03 19,799,747
Ba3 4,050 Florida Steel Corp.,
First Mtge. Notes,
11.50%, 12/15/00 4,090,500
Geneva Steel Co.,
11.125%, 3/15/01 12,936,250
B1 16,375
B1 4,750 9.50%, 1/15/04 3,396,250
B2 7,200 GS Technologies Operating,
Inc., Sr. Notes,
12.00%, 9/1/04 7,056,000
B2 10,000 Horsehead Industries,
Inc.,
Sub. Notes,
14.00%, 6/1/99 10,225,000
Kaiser Aluminum & Chemical
Corp.,
B1 23,250 Sr. Notes,
9.875%, 2/15/02 22,610,625
B2 19,850 Sr. Sub. Notes,
12.75%, 2/1/03 21,338,750
B2 6,450 Republic Engineered
Steels, Inc., First Mtge.
Bonds,
9.875%, 12/15/01 5,837,250
B1 4,800 Sherritt Gordon Ltd.,
Sr. Notes,
9.75%, 4/1/03 4,656,000
B1 24,000 Sherritt, Inc., Deb.,
10.50%, 3/31/14 23,280,000
B3 11,695 Silgan Corp., Sr. Sub.
Deb.,
11.75%, 6/15/02 12,221,275
NR 5,000D Tubos De Acero De Mexico
SA, Unsec'd. Notes,
(cost $4,987,500;
purchased-1994),
13.75%, 12/8/99 4,412,500
B2 $18,450 Ucar Global Enterprises,
Inc., Sr. Sub. Notes,
12.00%, 1/15/05 $ 19,926,000
NR 8,750 Waters Corp., Sr. Sub.
Notes,
12.75%, 9/30/04 9,165,625
B1 22,000 WCI Steel, Inc., Sr.
Notes,
10.50%, 3/1/02 21,560,000
B2 8,000D Weirton Steel Corp.,
Sr. Notes,
(cost $7,880,000;
purchased-1995),
10.75%, 6/1/05 7,480,000
B1 20,000 Wheeling Pittsburgh Corp.,
Sr. Notes,
9.375%, 11/15/03 18,200,000
--------------
228,191,772
------------------------------------------------------------
Supermarkets--7.8%
B3 15,610D Dominicks Finer Foods,
Inc.,
Sr. Notes,
(cost $15,733,100;
purchased-1995),
10.875%, 5/1/05 15,844,150
Farm Fresh, Inc.,
Sr. Notes,
B2 12.25%, 10/1/00 11,985,000
12,750
B2 1,250 12.25%, 10/1/00 1,209,375
NR 36,000 Grand Union Co., Notes,**
12.00%, 9/1/04 34,740,000
Pathmark Stores, Inc.,
B2 23,565 Jr. Sub. Notes,
Zero Coupon (until
11/1/99),
10.75%, 11/1/03 14,139,000
B3 22,538 Sr. Sub. Notes,
9.625%, 5/1/03 21,974,550
Sub. Notes,
11.625%, 6/15/02 22,736,250
B3 21,500
B3 10,500 12.625%, 6/15/02 11,235,000
--------------------------------------------------------------------------------
10 See Notes to Financial Statements.
<PAGE>
<PAGE>
Portfolio of Investments as of PRUDENTIAL HIGH YIELD FUND, INC.
June 30, 1995 (Unaudited)
-----------------------------------------------------------
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Moody's Amount Description Value (Note 1)
Rating (000)
<C> <C> <S> <C>
-----------------------------------------------------------
Supermarkets (cont'd.)
B2 $58,675 Penn Traffic Co.,
Sr. Sub. Notes,
9.625%, 4/15/05 $ 55,301,188
B2 21,605 Pueblo Xtra Int'l., Inc.,
Sr. Notes,
9.50%, 8/1/03 19,768,575
Ralphs Grocery Co.,
Sr. Notes,
B1 41,745 10.45%, 6/15/04 41,745,000
B3 31,335 11.00%, 6/15/05 30,159,937
B3 4,950 13.75%, 6/15/05 5,296,500
B2 10,000 Southland Corp.,
Sr. Sub. Deb.,
12.00%, 6/15/09 9,950,000
--------------
296,084,525
------------------------------------------------------------
Telecommunications--5.1%
B2 18,000 Call-Net Enterprises,
Sr. Disc. Notes,
Zero Coupon (until
12/1/99),
13.25%, 12/1/04 10,800,000
NR 19,000D/@ Cellnet Data Systems,
Inc.,
Sr. Disc. Notes,
(cost $10,176,415;
purchased-1995),
13.00%, 6/15/05 10,260,000
Caa 36,330 Cencall Communications
Corp., Sr. Disc. Notes,
Zero Coupon (until
1/15/99),
13.25%, 1/15/04 18,165,000
Centennial Cellular Corp.,
Sr. Notes,
8.875%, 11/1/01 11,609,000
B2 12,350
B2 17,750 10.125%, 5/15/05 17,483,750
Dial Call Communications,
Inc., Sr. Disc. Notes,
Caa 13,000 Zero Coupon (until
4/15/99),
12.25%, 4/15/04 6,240,000
Caa $ 4,250 Zero Coupon (until
12/15/98),
10.25%, 12/15/05 $ 1,912,500
B3 11,250D/@ Intermedia Communications,
Inc., Sr. Notes,
(cost $11,250,000;
purchased-1995),
13.50%, 6/1/05 11,306,250
B3 23,920 Mobilemedia
Communications, Inc.,
Sr. Notes,
Zero Coupon (until
12/1/98),
10.50%, 12/1/03 15,906,800
Nextel Communications,
Inc., Sr. Disc. Notes,
B3 18,620 Zero Coupon (until
9/1/98),
11.50% 9/1/03 10,427,200
B3 27,500 Zero Coupon (until
2/15/99),
9.75%, 8/15/04 13,200,000
Pagemart Nationwide, Inc.,
Sr. Disc. Notes,
Zero Coupon (until
11/1/98),
12.25%, 11/1/03 4,432,300
NR 6,980
NR 20,500D/@ Sr. Disc. Notes,
(cost $10,484,052;
purchased-1995),
Zero Coupon (until
2/1/00),
15.00%, 2/1/05 12,505,000
B2 29,300 Paging Network, Inc.,
Sr. Sub. Notes,
8.875%, 2/1/06 26,663,000
Caa 10,000 Pricellular Wireless
Corp.,
Sr. Sub. Disc. Exch.
Notes,
Zero Coupon (until
11/15/97),
14.00%, 11/15/01 8,050,000
USA Mobile Communications,
Inc.,
Sr. Notes,
B3 5,350 9.50%, 2/1/04 4,708,000
B3 8,000 14.00%, 11/1/04 8,880,000
--------------
192,548,800
--------------------------------------------------------------------------------
See Notes to Financial Statements.
11
<PAGE>
<PAGE>
Portfolio of Investments as of PRUDENTIAL HIGH YIELD FUND, INC.
June 30, 1995 (Unaudited)
-----------------------------------------------------------
------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Moody's Amount
Rating (000) Description Value (Note 1)
<C> <C> <S> <C>
-----------------------------------------------------------
Textiles--1.7%
B1 $15,635 CMI Industries, Inc.,
Sr. Sub. Notes,
9.50%, 10/1/03 $ 14,306,025
B3 10,633 Forstmann Textiles, Inc.,
Sr. Sub. Notes,
14.75%, 4/15/99 10,526,200
B3 40,850 Westpoint Stevens, Inc.,
Sr. Sub. Deb.,
9.375%, 12/15/05 39,318,125
--------------
64,150,350
------------------------------------------------------------
Transportation/Trucking/Shipping--1.5%
Caa 24,160 Great Dane Holdings, Inc.,
Sr. Sub. Notes.,
12.75%, 8/1/01 23,797,600
Ba3 4,000 Moran Transport Co.,
Gtd. First Mtg. Notes,
11.75%, 7/15/04, Ser. B 3,600,000
B3 11,200 OMI Corp.,
Sr. Notes,
10.25%, 11/1/03 9,520,000
B1 10,000 TNT Transport,
Sr. Notes,
11.50%, 4/15/04 10,200,000
B2 11,535 Trism, Inc.,
Sr. Sub. Notes,
10.75%, 12/15/00 11,361,975
--------------
58,479,575
--------------
Total bonds
(cost $3,648,795,829) 3,602,145,645
--------------
Shares
PREFERRED STOCKS--0.4%
200,000D Color Tile, Inc. $13.00
(cost $5,000,000; purchased-1992) 600,000
20,000 Color Tile, Inc., $14.50, Sr. Cum 2,160,000
18,340D Premium Standard Farms, $12.50
(cost $1,834,000; purchased-1992) 1,889,020
214,240 Riggs National Corp. Washington
D.C., $10.75 5,463,120
244,000 SD Warren Co. $ 6,598,248
West Federal Holdings, Inc.,
81,631D Cum. Sr. Pfd., $15.50
(cost $8,000,000; purchased-1988) 816
26,078D Sr. Pfd., Ser. A, $15.50 (cost
$674,047;
purchased-1990) 261
---------------
Total preferred stocks (cost
$31,097,275) 16,711,465
---------------
COMMON STOCKSDD--0.2%
14,000 Affiliated Newspapers 350,000
72,580D Dr. Pepper Bottling Co., Cl. A,
(cost $65,322; purchased-1992) 254,030
428,333 EnviroSource, Inc. 1,981,040
31,559D Peachtree Cable Assn., Ltd.,
(cost $315,590; purchased-1986) 307,700
3,679D PM Holdings Corp; (cost $0;
purchased-1993) 0
4,500 Smittys Supermarkets, Inc. 45,000
323,000 Thrifty Payless Holdings, Inc. 1,049,750
1,122,335 Triton Group Ltd. 2,525,254
7,097 Walter Industries, Inc. 97,584
---------------
Total common stocks (cost
$11,731,258) 6,610,358
---------------
Warrants
WARRANTSDD--0.2%
22,841 Casino America, Inc., expiring
11/15/96 11,421
60,000 Casino Magic Corp., expiring
10/14/96 3,000
27,273D Dial Page Inc., (cost $0;
purchased-1993), expiring
12/15/98 35,455
14,835 Empire Gas Corp., expiring 7/15/04 14,835
20,250 Foamex JPS Automotive L.P.,
expiring 7/1/99 202,500
742,254 Gaylord Container Corp., expiring
7/31/96 7,700,885
57,600 ICF Kaiser Int'l., Inc., expiring
12/31/98 36,000
79,000 JM Peters Co., Inc., expiring
5/1/02 39,500
44,150D President Riverboat Casinos Inc.
(cost $0; purchased-1994),
expiring 9/30/99 0
200 Santa Fe Hotel, Inc., expiring
12/15/96 0
---------------
Total warrants (cost $468,777) 8,043,596
---------------
</TABLE>
--------------------------------------------------------------------------------
12 See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL HIGH YIELD FUND, INC.
Portfolio of Investments as of June 30, 1995 (Unaudited)
-----------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Moody's Amount
Rating (000) Description Value (Note 1)
<C> <C> <S> <C>
-----------------------------------------------------------
SHORT-TERM INVESTMENTS--5.7%
BONDS--0.1%
Fairchild Corp.,
Sr. Notes,
B3 $ 3,400 12.25%, 3/15/96
(cost $3,195,187) $ 3,383,000
------------------------------------------------------------
TIME DEPOSITS--5.6%
100,000 Mitsubishi Bank, Ltd.,
6.375%, 7/3/95 100,000,000
110,744 Sumitomo Bank, Ltd.,
6.375%, 7/3/95 110,744,000
--------------
Total time deposits
(cost $210,744,000) 210,744,000
--------------
Total short-term
investments
(cost $213,939,187) 214,127,000
------------------------------------------------------------
Total Investments--101.7%
(cost $3,906,032,326;
Note 4) 3,847,638,064
Liabilities in excess of
other assets--(1.7%) (63,732,556)
--------------
Net Assets--100% $3,783,905,508
--------------
--------------
</TABLE>
---------------
NR--Not rated by Moody's or Standard & Poor's.
PIK--Payment in kind securities.
L.P.--Limited Partnership.
* Standard & Poor's rating.
** Represents issuer in default on interest payments;
non-income producing security.
D Indicates a restricted security; the aggregate cost of
such securities is $356,072,864. The aggregate value
($342,897,782) is approximately 9.1% of net assets.
DD Non-income producing securities.
@ Consists of more than one class of securities traded
together as a unit; generally bonds with attached stock
or warrants.
The Fund's current Prospectus contains a description of
Moody's and Standard & Poor's ratings.
--------------------------------------------------------------------------------
See Notes to Financial Statements.
13
<PAGE>
<PAGE>
Statement of Assets and Liabilities (Unaudited) PRUDENTIAL HIGH YIELD FUND, INC.
--------------------------------------------------------------------------------
<TABLE>
<S>
<C>
Assets
June 30, 1995
Investments, at value (cost
$3,906,032,326).................................................................
$3,847,638,064
Interest
receivable...................................................................
...................... 71,513,411
Receivable for investments
sold.........................................................................
.... 17,959,140
Receivable for Fund shares
sold.........................................................................
.... 6,753,318
Deferred expenses and other
assets..........................................................................
146,235
--------------
Total
assets.......................................................................
...................... 3,944,010,168
--------------
--------------
Liabilities
Bank
overdraft....................................................................
.......................... 89,715
Payable for investments
purchased....................................................................
....... 110,849,486
Payable for Fund shares
reacquired...................................................................
....... 36,052,208
Dividends
payable......................................................................
..................... 9,686,978
Due to
Distributor..................................................................
........................ 1,785,087
Due to
Manager......................................................................
........................ 1,298,040
Accrued expenses and other
liabilities..................................................................
.... 343,146
--------------
Total
liabilities..................................................................
...................... 160,104,660
--------------
Net
Assets.......................................................................
........................... $3,783,905,508
--------------
--------------
Net assets were comprised of:
Common stock, at
par..........................................................................
........... $ 4,712,222
Paid-in capital in excess of
par.........................................................................
4,486,304,744
--------------
4,491,016,966
Undistributed net investment
income......................................................................
8,525,353
Accumulated net realized loss on
investments.............................................................
(657,242,549)
Net unrealized depreciation of
investments...............................................................
(58,394,262)
--------------
Net assets, June 30,
1995.........................................................................
.......... $3,783,905,508
--------------
--------------
Class A:
Net asset value and redemption price per share
($1,120,995,449 / 139,503,904 shares of common stock issued and
outstanding).......................... $8.04
Maximum sales charge (4.00% of offering
price)...........................................................
.34
Maximum offering price to
public.........................................................................
$8.38
Class B:
Net asset value, offering price and redemption price per share
($2,651,715,698 / 330,323,938 shares of common stock issued and
outstanding).......................... $8.03
Class C:
Net asset value, offering price and redemption price per share
($11,194,361 / 1,394,398 shares of common stock issued and
outstanding)............................... $8.03
</TABLE>
--------------------------------------------------------------------------------
14 See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL HIGH YIELD FUND, INC.
Statement of Operations (Unaudited)
------------------------------------------------------------
------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
June 30,
Net Investment Income 1995
------------
<S> <C>
Income
Interest.................................... $203,086,192
Dividends................................... 833,152
------------
Total income............................. 203,919,344
------------
Expenses
Distribution fee--Class A................... 679,440
Distribution fee--Class B................... 10,258,826
Distribution fee--Class C................... 27,412
Management fee.............................. 7,612,538
Transfer agent's fees and expenses.......... 2,142,000
Custodian's fees and expenses............... 256,000
Franchise taxes............................. 249,000
Reports to shareholders..................... 174,000
Registration fees........................... 68,000
Insurance expense........................... 57,000
Audit fee................................... 33,000
Directors' fees............................. 18,100
Legal fees.................................. 15,000
Miscellaneous............................... 17,449
------------
Total operating expenses................. 21,607,765
Loan commitment fees (Note 2).................. 93,750
------------
Total expenses........................... 21,701,515
------------
Net investment income.......................... 182,217,829
------------
Realized and Unrealized
Loss on Investments
Net realized loss on investment transactions... (69,905,263)
Net change in unrealized appreciation of
investments................................. 235,236,791
------------
Net gain on investments........................ 165,331,528
------------
Net Increase in Net Assets
Resulting from Operations...................... $347,549,357
------------
------------
</TABLE>
PRUDENTIAL HIGH YIELD FUND, INC.
Statement of Changes in Net Assets (Unaudited)
------------------------------------------------------------
------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Ended
Increase (Decrease) Ended December 31,
in Net Assets June 30, 1995 1994
--------------- ---------------
<S> <C> <C>
Operations
Net investment income..... $ 182,217,829 $ 347,531,971
Net realized loss on
investment
transactions........... (69,905,263) (17,213,168)
Net change in unrealized
appreciation/depreciation
of investments......... 235,236,791 (437,098,902)
--------------- ---------------
Net increase (decrease) in
net assets resulting
from operations........ 347,549,357 (106,780,099)
--------------- ---------------
Net equalization credits..... 14,974 53,408
--------------- ---------------
Dividends and distributions (Note 1)
Dividends from net
investment income
Class A................ (47,330,908) (16,316,609)
Class B................ (134,527,099) (331,100,240)
Class C................ (359,822) (115,122)
--------------- ---------------
(182,217,829) (347,531,971)
--------------- ---------------
Dividends in excess of net
investment income
Class A................ (708,900) (381,078)
Class B................ (1,190,561) (9,346,220)
Class C................ (3,945) (3,979)
--------------- ---------------
(1,903,406) (9,731,277)
--------------- ---------------
Fund share transactions (net
of share conversions)
(Note 5)
Net proceeds from shares
issued................. 1,011,062,446 1,151,307,757
Net asset value of shares
issued to shareholders
in reinvestment of
dividends and
distributions.......... 84,104,877 169,199,573
Cost of shares
reacquired............. (952,322,878) (1,294,875,001)
--------------- ---------------
Increase in net assets
from Fund share
transactions........... 142,844,445 25,632,329
--------------- ---------------
Total increase (decrease).... 306,287,541 (438,357,610)
Net Assets
Beginning of period.......... 3,477,617,967 3,915,975,577
--------------- ---------------
End of period................ $ 3,783,905,508 $ 3,477,617,967
--------------- ---------------
--------------- ---------------
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements.
15
<PAGE>
<PAGE>
Notes to Financial Statements (Unaudited) PRUDENTIAL HIGH YIELD FUND, INC.
--------------------------------------------------------------------------------
Prudential High Yield Fund, Inc. (the ``Fund''), is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The primary investment objective of the Fund is to maximize current
income through investment in a diversified portfolio of high yield fixed-income
securities which, in the opinion of the Fund's investment adviser, do not
subject the Fund to unreasonable risks. As a secondary investment objective, the
Fund will seek capital appreciation but only when consistent with its primary
objective. Lower rated or unrated (i.e. high yield) securities are more likely
to react to developments affecting market risk (general market liquidity) and
credit risk (an issuer's inability to meet principal and interest payments on
its obligations) than are more highly rated securities, which react primarily
to
movements in the general level of interest rates. The ability of issuers of debt
securities held by the Fund to meet their obligations may be affected by
economic developments in a specific industry or region.
------------------------------------------------------------
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
mean between the bid and asked prices 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.
In connection with transactions in repurchase agreements, it is the Fund's
policy that its custodian or designated subcustodians, under triparty repurchase
agreements as the case may be, take possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest and, to the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis 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.
The Fund may invest up to 10% of its total assets in securities which are not
readily marketable, including those which are restricted as to disposition under
securities law (``restricted securities''). Certain issues of restricted
securities held by the Fund at June 30, 1995 include registration rights under
which the Fund may demand registration by the issuer, some of which are
currently under contract to be registered. Restricted securities are valued
pursuant to the valuation procedures noted above.
Securities Transactions and 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 original issue discounts as adjustments to interest
income. Income from payment-in-kind bonds is recorded daily based on an
effective interest method.
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.
Federal Income 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.
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. These differences are primarily due to differing treatments for
market discount and wash sales.
Equalization: The Fund follows the accounting practice known as equalization,
by
which a portion of the proceeds from sales and costs of reacquisitions of Fund
shares, equivalent on a per share basis to the amount of distributable net
investment income on the date of the transaction, is credited or charged to
undistributed net investment income. As a result, undistributed net investment
income per share is unaffected by sales or reacquisitions of the Fund's shares.
--------------------------------------------------------------------------------
16
<PAGE>
<PAGE>
Notes to Financial Statements (Unaudited) PRUDENTIAL HIGH YIELD FUND, INC.
--------------------------------------------------------------------------------
Reclassification of Capital Accounts: The Fund accounts and reports for
distributions to shareholders in accordance with AICPA Statement of Position
93-2: Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies. The
effect of applying this statement was to increase undistributed net investment
income and increase accumulated net realized loss on investments by $4,503,878.
This was primarily the result of market discount incurred for the six months
ended June 30, 1995. Net investment income, net realized gains and net assets
were not affected by this change.
------------------------------------------------------------
Note 2. Agreements
The Fund has a management agreement with Prudential Mutual Fund Management, Inc.
(``PMF''). Pursuant to this agreement PMF has responsibility for all investment
advisory services and supervises the subadviser's performance of such services.
PMF 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. PMF pays for the cost of 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 PMF is computed daily and payable monthly, at an annual
rate of .50% of the Fund's average daily net assets up to $250 million, .475%
of
the next $500 million, .45% of the next $750 million, .425% of the next $500
million, .40% of the next $500 million, .375% of the next $500 million and .35%
of the Fund's average daily net assets in excess of $3 billion.
The Fund has distribution agreements with Prudential Mutual Fund Distributors,
Inc. (``PMFD''), which acts as the distributor of the Class A shares of the
Fund, and with Prudential Securities Incorporated (``PSI''), which acts as
distributor of the Class B and Class C shares of the Fund (collectively the
``Distributors''). The Fund compensates the Distributors for distributing and
servicing the Fund's Class A, Class B and Class C shares, pursuant to plans of
distribution (the ``Class A, B and C Plans''), regardless of expenses actually
incurred by them. The distribution fees are accrued daily and payable monthly.
Pursuant to the Class A, B and C Plans, the Fund compensates the Distributors
for distribution-related activities at an annual rate of up to .30 of 1%, .75
of
1% and 1%, of the average daily net assets of the Class A, B and C shares,
respectively. Such expenses under the Plans were .15 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 June 30, 1995.
PMFD has advised the Fund that it has received approximately $552,900 in
front-end sales charges resulting from sales of Class A shares during the six
months ended June 30, 1995. From these fees, PMFD paid such sales charges to
dealers (PSI and Prusec) which in turn paid commissions to salespersons.
PSI has advised the Fund that for the six months ended June 30, 1995, it
received approximately $2,763,700 and $3,500 in contingent deferred sales
charges imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.
The Fund has entered into a credit agreement (the ``Agreement'') with State
Street Bank and Trust Co. with a maximum commitment under the Agreement of
$75,000,000 which expires on December 2, 1995. Interest on any such borrowings
outstanding will be at market rates. The Fund has not borrowed any monies
pursuant to the Agreement but has paid commitment fees at an annual rate of .25
of 1% on the $75,000,000 (unused portion of the credit facility).
------------------------------------------------------------
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services Inc. (``PMFS''), a wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and during the six months ended June
30, 1995, the Fund incurred fees of approximately $1,801,000 for the services
of
PMFS. As of June 30, 1995, $305,000 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 non-affiliates.
------------------------------------------------------------
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the six months ended June 30, 1995 were $1,584,366,411 and $1,457,582,929,
respectively.
The federal income tax basis of the Fund's investments, including short-term
investments, as of June 30, 1995 was $3,909,738,721; accordingly, net unrealized
depreciation for federal income tax purposes was $62,100,208 (gross unrealized
appreciation--$85,449,315; gross unrealized depreciation--$147,549,523).
--------------------------------------------------------------------------------
17
<PAGE>
<PAGE>
Notes to Financial Statements (Unaudited) PRUDENTIAL HIGH YIELD FUND, INC.
--------------------------------------------------------------------------------
For federal income tax purposes, the Fund has a capital loss carryforward as of
December 31, 1994 of approximately $548,496,700 of which $34,055,200 expires in
1997, $326,104,800 expires in 1998, $77,895,200 expires in 1999 and $110,441,500
expires in 2000. Accordingly, no capital gains distribution is expected to be
paid to shareholders until net gains have been realized in excess of the
aggregate of such amounts.
The Fund will elect to treat net capital losses of approximately $33,033,000
incurred in the two month period ended December 31, 1994 as having been incurred
in the following fiscal year.
------------------------------------------------------------
Note 5. Capital
The Fund offers Class A, Class B and Class C shares. Class A shares are sold
with a front-end sales charge of up to 4.00%. 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 contingent
deferred sales charge of 1% during the first year. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately seven
years after purchase.
The Fund has 1.5 billion shares of $.01 par value common stock authorized;
designated 375 million of Class A shares, 750 million of Class B shares, and 375
million of Class C shares.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
------------------------------ ------------ ---------------
<S> <C> <C>
Six months ended June 30,
1995:
Shares sold................... 48,074,774 $ 380,813,422
Shares issued in reinvestment
of
dividends and
distributions............... 3,047,492 24,275,601
Shares reacquired............. (52,608,879) (418,640,272)
------------ ---------------
Net decrease in shares
outstanding before
conversion.................. (1,486,613) (13,551,249)
Shares issued upon conversion
from Class B................ 119,979,422 929,997,227
------------ ---------------
Net increase in shares
outstanding................. 118,492,809 $ 916,445,978
------------ ---------------
------------ ---------------
Year ended December 31, 1994:
Shares sold................... 19,908,158 $ 161,976,895
Shares issued in reinvestment
of dividends and
distributions............... 1,113,364 9,044,345
Shares reacquired............. (19,711,310) (160,632,506)
------------ ---------------
Net increase in shares
outstanding................. 1,310,212 $ 10,388,734
------------ ---------------
------------ ---------------
Class B Shares Amount
------------------------------ ------------ ---------------
Six months ended June 30,
1995:
Shares sold................... 78,345,759 $ 618,590,077
Shares issued in reinvestment
of dividends and
distributions............... 7,544,697 59,640,282
Shares reacquired............. (67,034,377) (527,891,435)
------------ ---------------
Net increase in shares
outstanding before
conversion.................. 18,856,079 150,338,924
Shares reacquired upon
conversion into Class A..... (120,144,447) (929,997,227)
------------ ---------------
Net decrease in shares
outstanding................. (101,288,368) $ (779,658,303)
------------ ---------------
------------ ---------------
Year ended December 31, 1994:
Shares sold................... 118,792,264 $ 983,331,141
Shares issued in reinvestment
of dividends and
distributions............... 19,713,254 160,105,285
Shares reacquired............. (138,058,355) (1,133,205,930)
------------ ---------------
Net increase in shares
outstanding................. 447,163 $ 10,230,496
------------ ---------------
------------ ---------------
Class C
------------------------------
Six months ended June 30,
1995:
Shares sold................... 1,463,929 $ 11,658,947
Shares issued in reinvestment
of dividends and
distributions............... 23,749 188,994
Shares reacquired............. (726,709) (5,791,171)
------------ ---------------
Net increase in shares
outstanding................. 760,969 $ 6,056,770
------------ ---------------
------------ ---------------
August 1, 1994* through
December 31, 1994:
Shares sold................... 757,753 $ 5,999,721
Shares issued in reinvestment
of dividends................ 6,428 49,943
Shares reacquired............. (130,752) (1,036,565)
------------ ---------------
Net increase in shares
outstanding................. 633,429 $ 5,013,099
------------ ---------------
------------ ---------------
</TABLE>
---------------
*Commencement of offering of Class C shares.
--------------------------------------------------------------------------------
18
<PAGE>
<PAGE>
Financial Highlights (Unaudited) PRUDENTIAL HIGH YIELD FUND, INC.
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------------------
January 22,
Six Months
1990(b)
Ended Year
Ended December 31, Through
June 30,
---------------------------------------------- December 31,
1995 1994 1993
1992 1991 1990
<S> <C> <C> <C>
<C> <C> <C>
---------- --------
-------- -------- ------- ------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...... $ 7.68 $ 8.70 $
8.19 $ 7.88 $ 6.72 $ 8.49
---------- --------
-------- -------- ------- -------
Income from investment operations
Net investment income..................... .40 .80
.84 .90 .93 1.01
Net realized and unrealized gain (loss) on
investments............................. .37 (1.00)
.52 .32 1.26 (1.74)
---------- --------
-------- -------- ------- -------
Total from investment operations........ .77 (.20)
1.36 1.22 2.19 (.73)
---------- --------
-------- -------- ------- -------
Less distributions
Dividends from net investment income...... (.40) (.80)
(.84) (.90) (.93) (1.01)
Dividends in excess of net investment
income.................................. (.01) (.02)
(.01) -- -- --
Distributions from paid-in capital
in excess of par........................ -- --
-- (.01) (.10) (.03)
---------- --------
-------- -------- ------- -------
Total distributions..................... (.41) (.82)
(.85) (.91) (1.03) (1.04)
---------- --------
-------- -------- ------- -------
Net asset value, end of period............ $ 8.04 $ 7.68 $
8.70 $ 8.19 $ 7.88 $ 6.72
---------- --------
-------- -------- ------- -------
---------- --------
-------- -------- ------- -------
TOTAL RETURN(c)........................... 9.90% (2.35)%
17.32% 15.97% 34.29% (9.15)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........... $1,120,995 $161,435
$171,364 $106,188 $54,025 $ 21,448
Average net assets (000).................. $ 913,428 $165,517
$149,190 $ 81,129 $37,194 $ 15,594
Ratios to average net assets:
Expenses, including distribution fees... .74%(a) .78%
.76% .85% .88% .93%(a)
Expenses, excluding distributions
fees.................................. .59%(a) .63%
.61% .70% .73% .78%(a)
Net investment income................... 10.45%(a) 9.86%
9.93% 10.96% 12.73% 13.58%(a)
Portfolio turnover rate................... 42% 74%
85% 68% 51% 40%
</TABLE>
---------------
(a) Annualized.
(b) Commencement of offering of Class A shares.
(c) 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 distribtuions. Total returns for periods of less than a full
year are not annualized.
--------------------------------------------------------------------------------
See Notes to Financial Statements.
19
<PAGE>
<PAGE>
Financial Highlights (Unaudited) PRUDENTIAL HIGH YIELD FUND, INC.
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
------------------------------------------------------------------------
Six Months
Ended
Year Ended December 31,
June 30,
-------------------------------------------------------
1995 1994
1993 1992 1991
<S> <C> <C>
<C> <C> <C>
------------ ----------
---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...... $ 7.67 $ 8.69
$ 8.19 $ 7.88 $ 6.71
------------ ----------
---------- ---------- ----------
Income from investment operations
Net investment income..................... .38 .76
.79 .85 .88
Net realized and unrealized gain (loss) on
investments............................. .37 (1.00)
.51 .32 1.26
------------ ----------
---------- ---------- ----------
Total from investment operations........ .75 (.24)
1.30 1.17 2.14
------------ ----------
---------- ---------- ----------
Less distributions
Dividends from net investment income...... (.38) (.76)
(.79) (.85) (.88)
Dividends in excess of net investment
income.................................. (.01) (.02)
(.01) -- --
Distributions from paid-in capital
in excess of par........................ -- --
-- (.01) (.09)
------------ ----------
---------- ---------- ----------
Total distributions..................... (.39) (.78)
(.80) (.86) (.97)
------------ ----------
---------- ---------- ----------
Net asset value, end of period............ $ 8.03 $ 7.67
$ 8.69 $ 8.19 $ 7.88
------------ ----------
---------- ---------- ----------
------------ ----------
---------- ---------- ----------
TOTAL RETURN(c)........................... 9.73% (2.92)%
16.54% 15.30% 33.62%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........... $2,651,716 $3,311,323
$3,745,985 $2,887,698 $2,199,127
Average net assets (000).................. $2,758,358 $3,566,709
$3,389,439 $2,582,922 $1,970,257
Ratios to average net assets:
Expenses, including distribution fees... 1.34%(a) 1.38%
1.36% 1.45% 1.48%
Expenses, excluding distributions
fees.................................. .59%(a) .63%
.61% .70% .73%
Net investment income................... 9.83%(a) 9.28%
9.35% 10.29% 11.65%
Portfolio turnover rate................... 42% 74%
85% 68% 51%
<CAPTION>
Class C
August 1,
Six Months
1994(b)
Ended
Through
June 30,
December 31,
1990 1995
1994
<S> <C> <C> <C>
---------- ----------
------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period...... $ 8.52 $ 7.67 $
8.05
---------- ----------
-----
Income from investment operations
Net investment income..................... 1.00 .38
.32
Net realized and unrealized gain (loss) on
investments............................. (1.76) .37
(.37)
---------- ----------
-----
Total from investment operations........ (.76) .75
(.05)
---------- ----------
-----
Less distributions
Dividends from net investment income...... (1.02) (.38)
(.32)
Dividends in excess of net investment
income.................................. -- (.01)
(.01)
Distributions from paid-in capital
in excess of par........................ (.03) --
--
---------- ----------
-----
Total distributions..................... (1.05) (.39)
(.33)
---------- ----------
-----
Net asset value, end of period............ $ 6.71 $ 8.03 $
7.67
---------- ----------
-----
---------- ----------
-----
TOTAL RETURN(c)........................... (9.52)% 9.73%
(0.79)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)........... $1,626,067 $ 11,194
$4,860
Average net assets (000).................. $1,994,229 $ 7,370
$2,840
Ratios to average net assets:
Expenses, including distribution fees... 1.55% 1.34%(a)
1.48%(a)
Expenses, excluding distributions
fees.................................. .80% .59%(a)
.73%(a)
Net investment income................... 13.34% 9.84%(a)
9.80%(a)
Portfolio turnover rate................... 40% 42%
74%
</TABLE>
---------------
(a) Annualized.
(b) Commencement of offering of Class C shares.
(c) 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 distribtuions. Total returns for periods of less than a
full year are not annualized.
--------------------------------------------------------------------------------
20 See Notes to Financial Statements.
<PAGE>
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll Free (800) 225-1852
Directors
Delayne Dedrick Gold
Arthur Hauspurg
Steven P. Munn
Richard A. Redeker
Louis A. Weil III
Officers
Richard A. Redeker, President
David W. Drasnin, Vice President
Robert F. Gunia, Vice President
Grace Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Ronald Amblard, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
The accompanying financial statements as of June 30, 1995 were not audited and,
accordingly, no opinion is expressed on them.
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
<PAGE>
Prudential Mutual Funds
Building Your Future
On Our StrengthSM (LOGO)
BULK RATE
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PAID
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Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
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