<PAGE>
SEMIANNUAL REPORT JUNE 30, 2000
Prudential
High Yield Fund, Inc.
Fund Type Junk bond
Objective Current income and capital appreciation (as a
secondary objective)
Build On The Rock
(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
The Prudential High Yield Fund's primary investment
objective is to
maximize current income. To achieve its objective, the
Fund invests in a diversified portfolio of high-yield,
fixed-income securities. As a secondary investment
objective, the Fund seeks capital appreciation. The Fund
invests primarily in bonds rated BB or lower by
independent nationally recognized statistical rating
organizations. Bonds rated BB or lower are below
investment grade and are commonly known as "junk bonds."
As a result, they are subject to greater risk of default
of payment of principal and interest than investment-
grade bonds. There can be no assurance that the Fund will
achieve its investment objectives.
Credit Quality
Expressed as a percentage of
total investments* as of 6/30/00
1.4% Baa
14.5 Ba
65.4 B
4.3 Caa or lower
2.5 Not Rated
7.4 Equities & Other
4.5 Cash & Equivalents
* Excludes cash received as a result of securities on loan.
Ten Largest Issuers
Expressed as a percentage of
net assets as of 6/30/00
2.6% CSC Holdings, Inc.
2.6 Nextel Communications, Inc.
1.9 Level 3 Communications, Inc.
1.5 Adelphia Communications Corp.
1.5 United Pan-Europe
Communications, Inc.
1.4 AES Corp.
1.3 Allied Waste North America, Inc.
1.2 California Fed. Corp.
1.1 Charter Communications
Holdings LLC.
1.1 Global Crossing Holdings Ltd.
<PAGE>
Performance at a Glance
Cumulative Total Returns1 As of 6/30/00
Six One Five Ten Since
Months Year Years Years Inception2
Class A -1.91% -1.12% 38.32% 150.80% 146.37%
Class B -2.03 -1.51 34.43 137.29 537.72
Class C -2.03 -1.51 34.43 N/A 46.35
Class Z -1.77 -0.83 N/A N/A 25.27
Lipper High Current
Yield Fund Avg.3 -1.66 -0.77 36.93 154.20 ***
Average Annual Total Returns1 As of 6/30/00
One Five Ten Since
Year Years Years Inception2
Class A -5.07% 5.84% 9.18% 8.60%
Class B -6.51 5.94 9.03 9.11
Class C -3.50 5.88 N/A 6.47
Class Z -0.83 N/A N/A 5.34
Distributions and Yields As of 6/30/00
Total Distributions 30-Day
Paid for Six Months SEC Yield
Class A $0.36 10.55%
Class B $0.34 10.48
Class C $0.34 10.37
Class Z $0.37 11.25
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.
2 Inception dates: Class A, 1/22/90; Class B, 3/29/79;
Class C, 8/1/94; and Class Z, 3/1/96.
3 Lipper average returns are for all funds in each share
class for the six-month, one-, five-, and ten-year
periods 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 issues.
***Lipper Since Inception returns are 163.25% for Class
A, 649.18% for Class B, 48.55% for
Class C, and 25.24% for Class Z, based on all funds in
each share class.
1
<PAGE>
(LOGO) August 14, 2000
Dear Shareholder,
During our fiscal half-year ended June 30, 2000, the
Prudential High Yield Fund and its benchmark Lipper
Average generated negative returns due to the bearish
conditions in some U.S. fixed-income markets, including
high-yield bonds. Among the factors that pressured prices
of high-yield bonds were the Federal Reserve's three
increases in short-term interest rates along with a rise
in the "junk bond" default rate.
The following report provides a discussion of
developments in the high-yield bond market and an
explanation of the Fund's performance.
STAYING THE COURSE AMID UPS
AND DOWNS OF FINANCIAL MARKETS
Many investors consider selling an asset class that has
performed poorly in favor of investments that are
currently gaining in value. Changes in asset allocation
should, as a general rule, reflect basic shifts in an
investor's time horizon and tolerance for risk-not recent
fluctuations in the performance of financial markets. One
strategy may be to own a diversified portfolio of mutual
funds that invests in stocks, bonds, and money market
instruments because this approach may help to reduce
risk.
Deciding on the appropriate level of diversification is
not easy. It requires an understanding of an investor's
risk tolerance and overall investment strategy. In these
volatile times, we recommend consulting your financial
advisor to develop your asset allocation goals.
Thank you for your continued confidence in Prudential
mutual funds.
Sincerely,
John R. Strangfeld, President
Prudential High Yield Fund, Inc.
2
<PAGE>
Prudential High Yield Fund, Inc.
Semiannual Report June 30, 2000
Investment Adviser's Report
Several factors contributed to making the first half of
the year 2000 a challenging period for the high-yield
bond market. The Federal Reserve repeatedly increased
short-term interest rates to slow U.S. economic growth.
An increasing number of companies defaulted or missed
interest payments on their "junk bonds." Additionally,
many investors redeemed their shares of high-yield mutual
funds and shifted their money into less risky
investments.
The Fed raised short-term rates a quarter of a percentage
point in February and in March, and half a percentage
point-its largest increase in more than five years-in
May. Higher short-term rates led to higher borrowing
costs for consumers and businesses, which could curb
economic activity and help keep inflation in check. In
anticipation of the rate hikes, investors required higher
yields (and lower prices) on most types of U.S. fixed-
income securities, including "junk bonds." This trend was
reflected in the negative returns of the Fund and its
benchmark Lipper Average for the first half of 2000.
Adopting a more defensive investment strategy
With U.S. economic growth slowing from its torrid pace of
late 1999, we adopted a moderately defensive posture.
That is, we emphasized bonds of energy and utility
companies because we believe these industries should
remain relatively profitable despite the general decline
in consumer spending during the spring. An increase in
oil prices also helped to support the energy sector.
Utility bonds accounted for 4% of the Fund's total
investments as of June 30, 2000, while energy bonds stood
at 6%.
Telecommunications industry bonds, which currently
represent about 22% of the high-yield bond market,
comprised the Fund's largest position-23% of total
investments as of June 30, 2000. Most of these holdings
are concentrated in larger, higher-quality issuers. The
industry remains a hot bed of takeover activity as
companies vie to become global providers of both wired
and wireless means of transmitting data, video, and
voice. For example, we owned bonds of VoiceStream
Wireless that agreed to be acquired by Deutsche Telecom.
3
<PAGE>
Meanwhile, we trimmed our exposure to certain cyclical
sectors of the
economy, such as retailing and home building. Higher
mortgage rates and the recent pullback in consumer
spending have hurt these industries.
A preference for better-quality high-yield bonds
Amid concern about rising defaults, the best performing
credit tier of the Lehman High Yield Index for the six-
month period was the BB (or its equivalent Ba) ratings
category-the highest in the "junk bond" market. Companies
in this ratings category comprised most of a select group
that could issue new high-yield bonds. We bought
attractively priced, newly issued bonds of
companies such as Orion Power. Bonds in the Ba ratings
category accounted for 14.5% of the Fund's total
investments as of June 30, 2000.
By contrast, roughly 4.0% of the Fund's total investments
were in bonds rated Caa or lower at the end of our
reporting period, compared with about 10% of Caa-rated
bonds in the Lehman High Yield Index. With the "junk
bond" market generally out of favor, Caa-rated bonds
performed poorly and were a drag on the Fund's
performance. In addition, the Fund experienced credit
quality problems in the healthcare and air transport
sectors, suffering losses on the bonds of companies such
as Dade International, Inc. and Kitty Hawk, Inc.
Looking Ahead: Maintaining a defensive strategy
Newly issued high-yield bonds continue to offer good
relative value, from a historical perspective. Difficult
market conditions over the past several months have
forced companies that issue "junk bonds" to price them at
attractive levels in order to draw investors. We are
continuing to purchase newly issued bonds, particularly
in the utility and telecommunications sectors.
Defaults on junk bonds are expected to remain at high
levels. Therefore, we will continue to shift the Fund's
focus away from bonds of home builders, retailers, and
other cyclical sectors. Similarly, we will continue to
reduce the Fund's exposure to lower-quality "junk bonds,"
such as those rated Caa.
Prudential High Yield Fund Management Team
4
<PAGE>
Prudential High Yield Fund, Inc.
Semiannual Report June 30, 2000
Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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 94.1%
Corporate Bonds 86.7%
----------------------------------------------------------------------------------------
Aerospace 0.1%
BE Aerospace, Inc., Sr. Sub. Notes B2 9.50% 11/01/08 $ 3,500(g) $ 3,220,000
Compass Aerospace Corp.,
Sr. Sub. Notes Caa3 10.125 4/15/05 3,250 487,500
---------------
3,707,500
----------------------------------------------------------------------------------------
Automotive Parts 2.8%
Federal Mogul Corp.,
Sr. Notes Ba2 7.375 1/15/06 1,250 918,750
Sr. Notes Ba2 7.50 1/15/09 6,640(g) 4,648,000
Sr. Notes Ba2 7.875 7/01/10 3,030(g) 2,075,550
Foamex JPS Automotive LLC,
Sr. Notes B1 11.125 6/15/01 17,755 17,888,163
Hayes Wheels Int'l., Inc.,
Sr. Sub. Notes B2 11.00 7/15/06 29,750(g) 29,378,125
Sr. Sub. Notes B2 9.125 7/15/07 4,875 4,374,375
Lear Corp.,
Sr. Notes Ba1 7.96 5/15/05 4,900(g) 4,557,000
Sr. Notes Ba1 8.11 5/15/09 5,350 4,815,000
Stanadyne Automotive Corp.,
Sr. Sub. Notes B(a) 10.25 12/15/07 8,725 7,329,000
Tenneco Automotive, Inc.,
Sr. Sub. Notes B+(a) 11.625 10/15/09 6,210(g) 5,526,900
Venture Holdings, Sr. Notes B 9.50 7/01/05 13,315 9,719,950
---------------
91,230,813
----------------------------------------------------------------------------------------
Broadcasting & Other Media 4.2%
Alliance Atlantis Communications
Corp., Sr. Sub. Notes B2 13.00 12/15/09 5,000 5,125,000
Sr. Sub. Notes B2 13.00 12/15/09 8,920 9,143,000
</TABLE>
6 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
American Lawyer Media, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 12/15/02) Caa1 12.25% 12/15/08 $10,500 $ 6,720,000
Sr. Sub. Notes B2 9.75 12/15/07 3,700 3,367,000
Capstar Radio Broadcasting,
Sr. Disc. Notes, Zero Coupon
(until 2/1/02) B2 12.75 2/01/09 16,675 15,299,312
Sr. Sub. Notes B1 9.25 7/01/07 12,000 11,970,000
Fox Family Worldwide, Inc.,
Sr. Notes B1 9.25 11/01/07 2,755 2,465,725
Garden State Newspapers, Inc.,
Sr. Sub. Notes B1 8.75 10/01/09 600 534,000
Globo Communicacoes, (Brazil)
Sr. Notes B2 10.50 12/20/06 6,000(g)(i) 5,220,000
Liberty Group Publishing, Inc.,
Sr. Disc. Deb., Zero Coupon
(until 2/1/03) Caa2 11.625 2/01/09 5,625 2,756,250
Sr. Sub. Notes Caa1 9.375 2/01/08 6,550 5,436,500
Lin Holdings Corp., Sr. Disc.
Notes, Zero Coupon (until 3/1/03) B3 10.00 3/01/08 17,405 11,443,787
Mail-Well Corp., Sr. Sub. Notes B1 8.75 12/15/08 8,000(g) 6,800,000
Paxson Communications Corp.,
Sr. Sub. Notes B3 11.625 10/01/02 5,295 5,414,138
Production Resource LLC.,
Sr. Sub. Notes CC-(a) 11.50 1/15/08 15,000 3,075,000
SFX Broadcasting, Inc.,
Sr. Sub. Notes B3 9.125 2/01/08 18,875 19,063,750
Spectrasite Holdings, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 4/15/04) B3 11.25 4/15/09 5,500 3,128,125
Sun Media Corp., (Canada)
Sr. Sub. Notes B1 9.50 5/15/07 9,522(g)(i) 9,236,340
Transwestern Publishing Co.,
Sr. Sub. Notes B2 9.625 11/15/07 5,250 5,066,250
Young America Corp.,
Sr. Sub. Notes Caa1 11.625 2/15/06 5,000 3,450,000
---------------
134,714,177
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Building & Related Industries 1.9%
Ainsworth Lumber Ltd., Sr. Notes B2 12.50% 7/15/07 $15,500 $ 15,500,000
American Builders, Sr. Sub. Notes B3 10.625 5/15/07 5,000 4,100,000
Congoleum Corp., Sr. Notes B2 8.625 8/01/08 6,000 3,900,000
Del Webb Corp., Sr. Sub. Deb. B2 9.375 5/01/09 6,950 5,820,625
Kaufman & Broad Home Corp.,
Sr. Sub. Notes B1 9.625 11/15/06 16,425(b) 15,685,875
Kevco, Inc., Sr. Sub. Notes Ca 10.375 12/01/07 8,755 2,626,500
Lennar Corp., Sr. Notes Ba1 9.95 5/01/10 2,345 2,315,688
Nortek, Inc.,
Sr. Notes B1 9.25 3/15/07 8,905 8,281,650
Sr. Notes B1 9.125 9/01/07 4,535(g) 4,194,875
---------------
62,425,213
----------------------------------------------------------------------------------------
Cable 9.7%
Adelphia Communications Corp.,
Sr. Notes B1 8.125 7/15/03 7,095 6,633,825
Sr. Notes B1 9.50 2/15/04 342(g) 317,877
Sr. Notes B1 10.50 7/15/04 11,300 11,300,000
Sr. Notes B1 9.50 3/01/05 12,000 11,490,000
Sr. Notes, Ser. B B1 9.25 10/01/02 3,325 3,258,500
Sr. Notes, Ser. B B1 9.875 3/01/07 7,000(g) 6,720,000
Avalon Cable Holdings LLC,
Sr. Disc. Notes, Zero Coupon
(until 12/1/03) B2 11.875 12/01/08 8,000 5,200,000
Callahan Nordrhein Westfalen,
Sr. Disc. Notes B3 Zero 7/15/10 15,000 6,937,500
Sr. Notes B3 14.00% 7/15/10 15,000 15,018,750
Century Communications Corp.
Sr. Notes, B1 Zero 3/15/03 2,000 1,480,000
Charter Communications Holdings
LLC,
Sr. Disc. Notes, Zero Coupon
(until 4/1/04) B2 9.92 4/01/11 10,755(g) 6,103,462
Sr. Notes B2 8.625 4/01/09 22,750(g) 20,076,875
Sr. Notes B2 10.00 4/01/09 3,500 3,403,750
Sr. Notes B2 10.25 1/15/10 5,600 5,404,000
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Classic Cable, Inc.,
Sr. Sub. Notes B3 9.375% 8/01/09 $ 6,150 $ 5,350,500
Sr. Sub. Notes B3 10.50 3/01/10 5,055(g) 4,650,600
Coaxial Communications, Inc.,
Sr. Notes B3 10.00 8/15/06 5,750 5,491,250
Comcast UK Cable Corp.,
Sr. Disc. Deb., Zero Coupon
(until 11/15/00) B2 11.20 11/15/07 17,000 16,107,500
CSC Holdings, Inc., Sr. Sub. Deb. Ba3 10.50 5/15/16 7,635 8,054,925
Diamond Cable Co., (United
Kingdom)
Sr. Disc. Notes, B3 13.25 9/30/04 8,010(i) 8,410,500
Sr. Disc. Notes, Zero Coupon
(until 12/15/00) B3 11.75 12/15/05 9,275(i) 8,811,250
International Cabletel, Inc.,
Sr. Disc. Notes, B3 12.75 4/15/05 19,450 19,887,625
Mediacom LLC Capital Corp.,
Sr. Notes B2 7.875 2/15/11 11,250 9,843,750
Multicanal S.A., (Argentina)
Sr. Notes, B1 13.125 4/15/09 5,750(i) 5,520,000
NTL, Inc.,
Sr. Notes, Zero Coupon
(until 10/1/03) B3 12.375 10/01/08 18,875 12,174,375
Sr. Notes, Zero Coupon
(until 4/1/03) B3 9.75 4/01/08 25,500(g) 15,810,000
Telewest Communication Plc,
Sr. Disc. Notes B1 Zero 2/01/10 22,970 12,633,500
Telewest Plc, (United Kingdom)
Sr. Disc. Deb., Zero Coupon
(until 10/1/00) B1 11.00 10/01/07 7,400(i) 7,048,500
TVN Entertainment Corp.,
Sr. Notes, Ser. B NR 14.00 8/01/08 5,615 2,246,000
United Int'l. Holdings, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 2/15/03) B3 10.75 2/15/08 25,900(g) 18,065,250
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
United Pan-Europe Communications,
Inc.,
Sr Disc Notes B2 Zero 8/01/09 $21,585 $ 10,576,650
Sr. Disc. Notes B2 Zero 2/01/10 10,000 4,700,000
Sr. Notes B2 10.875% 8/01/09 25,480 22,040,200
Sr. Notes B2 11.25 2/01/10 13,500 12,150,000
---------------
312,916,914
----------------------------------------------------------------------------------------
Capital Goods 1.4%
Allied Waste North America, Inc., Ba3 7.40 9/15/35 5,815 4,012,350
Sr. Notes Ba3 7.625 1/01/06 8,525 7,459,375
Sr. Notes Ba3 7.875 1/01/09 28,700 24,395,000
Sr. Sub. Notes B2 10.00 8/01/09 6,405 5,380,200
Veritas DGC, Inc., Sr. Notes Ba3 9.75 10/15/03 6,300 6,363,000
---------------
47,609,925
----------------------------------------------------------------------------------------
Casinos 2.8%
Alliance Gaming Corp.,
Sr. Sub. Notes Caa1 10.00 8/01/07 1,575(b) 614,250
Aztar Corp., Sr. Sub. Notes B2 8.875 5/15/07 6,300 5,890,500
Boyd Gaming Corp., Sr. Sub. Notes B1 9.50 7/15/07 6,570(g) 6,307,200
Casino Magic Corp.,
First Mtge. Notes B1 13.00 8/15/03 5,255 5,596,575
Circus Circus Enterprises, Inc.,
Sr. Sub. Deb. Ba3 7.625 7/15/13 2,850 2,272,875
Coast Hotels & Casinos, Inc.,
Sr. Sub. Notes B3 9.50 4/01/09 2,055 1,962,525
Fitzgeralds Gaming Corp.,
Sr. Notes, (cost $13,838,440;
purchased 12/22/97) Caa3 12.25 12/15/04 15,000(b)(e) 8,250,000
Harrahs Operating, Inc.,
Gtd. Sr. Sub. Notes Ba2 7.875 12/15/05 6,215 5,842,100
Harveys Casino Resorts,
Sr. Sub. Notes B2 10.625 6/01/06 5,500 5,610,000
Horseshoe Gaming LLC,
Sr. Sub. Notes B2 8.625 5/15/09 7,450 7,003,000
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Mandalay Resort Group,
Sr. Notes Baa3 6.45% 2/01/06 $ 2,925 $ 2,520,882
Sr. Sub. Deb. Baa3 6.70 11/15/96 9,595 8,797,368
Mohegan Tribal Gaming Auth.,
Sr. Notes Ba2 8.125 1/01/06 4,000 3,780,000
Sr. Sub. Notes Ba3 8.75 1/01/09 5,125(g) 4,843,125
Park Place Entertainment Corp.,
Sr. Sub. Notes Ba2 9.375 2/15/07 3,375 3,375,000
Stanfield Casinos Ltd.,
Sr. Notes, Ser. D NR 11.57 4/15/15 5,000 5,000,000
Station Casinos, Inc.,
Sr. Notes B1 9.875 7/01/10 7,240 7,276,200
Sr. Sub. Notes B1 10.125 3/15/06 2,075 2,085,375
Trump Atlantic City Assocs.,
First Mtge. Notes B3 11.25 5/01/06 3,165 2,125,500
Venetian Casino Resort LLC,
Gtd. First Mtge. Notes B-(a) 12.25 11/15/04 2,000 2,020,000
---------------
91,172,475
----------------------------------------------------------------------------------------
Chemicals 1.9%
Avecia Group PLC., (United
Kingdom) Sr. Notes Gtd. B2 11.00 7/01/09 12,990(i) 12,730,200
Huntsman ICI Chemicals LLC,
Sr. Sub. Notes B2 10.125 7/01/09 14,125 14,195,625
Lyondell Chemical Co.,
Sr. Sec'd Notes, Ba3 9.875 5/01/07 12,145 12,023,550
NL Industries, Inc.,
Sr. Sec'd. Notes, B1 11.75 10/15/03 730 744,600
Polymer Group, Inc., Sr. Sub.
Notes B2 8.75 3/01/08 8,110 6,812,400
Sterling Chemical Holdings, Inc.,
Sr. Sub. Notes Caa3 11.75 8/15/06 13,240 10,724,400
Sterling Chemicals, Inc.,
Sr. Sec'd Notes B3 12.375 7/15/06 5,180 5,309,500
---------------
62,540,275
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Consumer Products 2.3%
Borden, Inc., Notes Ba1 9.20% 3/15/21 $13,500 $ 11,590,695
Consumers Int'l., Inc.,
Sr. Sec'd. Notes B3 10.25 4/01/05 16,375 8,351,250
Corning Consumer Prod. Co.,
Sr. Sub. Notes B3 9.625 5/01/08 16,000 10,640,000
Desa Int'l., Inc., Sr. Sub. Notes Caa1 9.875 12/15/07 10,750 8,573,125
Holmes Prod. Corp., Sr. Sub. Notes B3 9.875 11/15/07 8,000 5,560,000
Norampac, Inc., Sr. Notes B1 9.50 2/01/08 2,080(g) 2,007,200
Pierce Leahy Command Co.,
Sr. Notes B3 8.125 5/15/08 4,250 3,782,500
Verio, Inc.,
Sr. Notes B3 11.25 12/01/08 1,125 1,262,813
Sr. Notes B3 10.625 11/15/09 13,140 14,568,975
Windmere Durable Holdings, Inc.,
Sr. Notes B2 10.00 7/31/08 7,000 6,860,000
---------------
73,196,558
----------------------------------------------------------------------------------------
Drugs & Health Care 4.6%
Abbey Healthcare Group, Inc.,
Sr. Sub. Notes B2 9.50 11/01/02 9,470(g) 9,185,900
Bio Rad Labs, Inc., Sr. Sub. Notes B2 11.625 2/15/07 5,385 5,553,281
Columbia/HCA Healthcare Corp.,
Deb. Ba2 7.05 12/01/27 9,160 6,824,200
Deb. Ba2 7.50 11/15/95 6,130 4,674,125
Notes Ba2 7.69 6/15/25 6,140 4,958,050
Notes Ba2 6.63 7/15/45 2,775 2,642,383
Notes Ba2 7.75 7/15/36 5,350 4,253,250
Concentra Operating Corp.,
Sr. Sub. Notes B3 13.00 8/15/09 13,000(g) 10,985,000
Dade Int'l., Inc., Sr. Sub. Notes B2 11.125 5/01/06 14,275 7,851,250
Fresenius Med. Care Capital Trust,
Gtd. Notes B+(a) 9.00 12/01/06 30,365 28,998,575
Harborside Healthcare Corp.,
Sr. Sub. Disc. Notes, Zero Coupon
(until 8/1/03) B3 11.00 8/01/08 11,750 2,350,000
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Healthsouth Corp., Sr. Notes Baa3 6.875% 6/15/05 $11,365 $ 9,861,297
ICN Pharmaceuticals, Inc.,
Sr. Notes Ba3 8.75 11/15/08 13,000 12,610,000
Sr. Notes Ba3 8.75 11/15/08 1,450 1,406,500
Integrated Health Svcs., Inc.,
Sr. Sub. Notes C 10.25 4/30/06 11,350(e) 227,000
Lifepoint Hospitals Holdings,
Inc., Sr. Sub. Notes B3 10.75 5/15/09 7,215 7,413,413
Magellan Health Svcs., Inc.,
Sr. Sub. Notes B-(a) 9.00 2/15/08 22,700 11,577,000
Mariner Post Acute Network, Inc.,
Sr. Sub. Disc. Notes,
Zero Coupon (until 11/1/02) C 10.50 11/01/07 14,240(e) 89,000
Sr. Sub. Notes C 9.50 11/01/07 3,000(e) 18,750
Tenet Healthcare Corp.,
Sr. Sub. Notes, Ser. B Ba3 8.125 12/01/08 3,800 3,467,500
Triad Hospitals Holdings, Inc.,
Sr. Sub. Notes B3 11.00 5/15/09 12,830(g) 13,134,712
---------------
148,081,186
----------------------------------------------------------------------------------------
Energy 9.4%
AES Corp.,
Sr. Notes Ba1 9.50 6/01/09 19,175(g) 18,791,500
Sr. Sub. Notes Ba3 10.25 7/15/06 28,000(b)(g) 27,860,000
Applied Power, Inc., Sr. Sub.
Notes B1 8.75 4/01/09 6,750 6,986,250
Benton Oil & Gas Co., Sr. Notes B3 11.625 5/01/03 9,500 6,127,500
Canadian Forest Oil Ltd., (Canada)
Sr. Sub. Notes B2 8.75 9/15/07 8,085(i) 7,599,900
Cliffs Drilling Co.,
Sr. Notes Ba3 10.25 5/15/03 8,800 8,668,000
Sr. Notes Ba3 10.25 5/15/03 4,000 4,000,000
CMS Energy Corp.,
Sr. Notes Ba3 8.375 7/01/03 5,000(g) 4,836,500
Sr. Notes Ba3 7.50 1/15/09 5,550(g) 4,981,125
Comstock Resources, Inc.,
Sr. Notes B2 11.25 5/01/07 970 982,125
DI Industies, Inc., Sr. Notes B1 8.875 7/01/07 9,860(g) 9,317,700
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Eott Energy Partners, Sr. Notes Ba2 11.00% 10/01/09 $ 1,420 $ 1,441,300
Gothic Prod. Corp., Sr. Sec'd
Notes B3 11.125 5/01/05 3,900 3,666,000
Houston Expl. Co., Sr. Sub. Notes B2 8.625 1/01/08 10,910 10,146,300
Key Energy Group, Inc.,
Sr. Sub. Notes Caa1 5.00 9/15/04 4,000 3,150,000
Leviathan Gas Pipeline/Finance
Corp., Sr. Sub. Notes B2 10.375 6/01/09 4,400 4,477,000
Orion Power Holdings, Inc.,
Sr. Notes Ba3 12.00 5/01/10 31,000(g) 31,930,000
Parker Drilling Co., Sr. Notes B1 9.75 11/15/06 15,550(g) 15,044,625
Plains Resources, Inc.,
Sr. Sub. Notes B2 10.25 3/15/06 7,490 7,433,825
Pogo Producing Co., Sr. Sub. Notes B2 8.75 5/15/07 13,600 12,920,000
R & B Falcon Corp., Sr. Notes Ba3 12.25 3/15/06 7,290 7,982,550
RBF Finance Co.,
Sr. Sec'd Notes Ba3 11.00 3/15/06 12,035 12,907,537
Sr. Sec'd Notes Ba3 11.375 3/15/09 10,000 10,800,000
Snyder Oil Corp., Sr. Sub. Notes Ba3 8.75 6/15/07 11,000 10,890,000
Swift Energy Co., Sr. Sub. Notes B2 10.25 8/01/09 10,430 10,534,300
Tesoro Petroleum Corp.,
Sr. Sub. Notes B1 9.00 7/01/08 14,200 13,525,500
TNP Enterprises, Inc.,
Sr. Sub. Notes B1 10.25 4/01/10 5,000(g) 5,137,500
Universal Compression Holdings,
Sr. Disc. Notes, Zero Coupon
(until 2/15/03) B2 9.875 2/15/08 22,850 16,337,750
USEC, Inc., Sr. Notes Ba1 6.75 1/20/09 5,000 3,461,500
Vintage Petroleum, Inc.,
Sr. Sub. Notes B1 8.625 2/01/09 12,685(g) 12,114,175
York Power Funding,
(Cayman Islands)
Sr. Sec'd. Notes Ba3 12.00 10/30/07 9,916(i) 9,717,680
---------------
303,768,142
----------------------------------------------------------------------------------------
Financial Services 1.4%
Americredit Corp.,
Gtd. Sr. Sub. Notes Ba1 9.25 2/01/04 9,000 8,730,000
Sr. Notes Ba1 9.875 4/15/06 2,500 2,450,000
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Delta Financial Corp., Sr. Notes B-(a) 9.50% 8/01/04 $ 7,320 $ 3,294,000
Hanvit Bank, Sr. Notes B1 12.75 3/01/10 7,500 7,425,000
Metris Cos., Inc., Sr. Notes Ba3 10.125 7/15/06 4,750 4,512,500
Midland Funding II Corp. Deb. Ba3 13.25 7/23/06 1,000 1,176,020
Midland Funding II Corp.,
Sec. Lease Oblig. Bond, Ser. A Ba3 11.75 7/23/05 1,110 1,242,556
Octagon Investment Participating
Ltd., Sr. Sec'd Notes NR 13.06 12/14/11 5,000 4,991,000
PX Escrow Corp., Sr. Sub. Disc.
Notes, Zero Coupon (until 2/1/02) B3 9.625 2/01/06 5,515 2,206,000
Sovereign Bancorp, Inc.,
Sr. Notes Ba3 10.25 5/15/04 2,070 2,041,207
Sr. Notes Ba3 10.50 11/15/06 7,930(g) 7,930,000
---------------
45,998,283
----------------------------------------------------------------------------------------
Food & Beverage 3.0%
Advantica Restaurant Group, Inc.,
Sr. Notes B3 11.25 1/15/08 10,375 6,951,250
Agrilink Foods, Inc., Sr. Sub.
Notes B3 11.875 11/01/08 7,720 6,176,000
Ameriking, Inc., Sr. Notes B3 10.75 12/01/06 3,200(g) 2,656,000
Aurora Foods, Inc., Sr. Sub. Notes Caa1 9.875 2/15/07 4,600 2,668,000
Carrols Corp., Sr. Sub. Notes B2 9.50 12/01/08 14,910 12,375,300
CKE Restaurants, Inc.,
Sr. Sub. Notes B3 9.125 5/01/09 8,000 5,520,000
Cott Corp., Sr. Notes B1 8.50 5/01/07 4,453 4,074,495
Del Monte Foods Co.,
Sr. Disc. Notes,
Zero Coupon (until 12/15/02) B-(a) 12.50 12/15/07 1,650 1,245,750
Fresh Foods, Inc., Sr. Sub. Notes B3 10.75 6/01/06 9,200 5,704,000
Grupo Azucarero, S.A., (Mexico)
Sr. Notes B3 11.50 1/15/05 7,250(e)(i) 1,957,500
Packaged Ice, Inc., Sr. Notes B3 9.75 2/01/05 9,640 8,001,200
Pilgrim's Pride Corp.,
Sr. Sub. Notes B1 10.875 8/01/03 967 974,252
PSF Holdings, LLC,
Sr. Sec'd. Notes NR 11.00 9/17/03 12,299 12,514,713
Purina Mills, Inc., Sr. Sub. Notes Ca 9.00 3/15/10 19,500(e) 5,655,000
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Sbarro, Inc., Sr. Notes Ba3 11.00% 9/15/09 $ 6,530 $ 6,644,275
SFC New Holdings, Inc., Sr. Notes Caa1 11.25 8/15/01 1,994 1,934,180
Stater Brothers Holdings, Inc.,
Sr. Notes B2 10.75 8/15/06 9,875 8,690,000
Vlasic Foods Int'l., Inc.,
Sr. Sub. Notes B(a) 10.25 7/01/09 7,935 2,935,950
---------------
96,677,865
----------------------------------------------------------------------------------------
Industrials 1.2%
Collins & Aikman Products Co.,
Sr. Sub. Notes B2 11.50% 4/15/06 $ 3,100 $ 2,968,250
Eagle Picher Holdings, Inc.,
Sr. Sub. Notes B3 9.375 3/01/08 11,000 9,240,000
Gentek, Inc., Sr. Sub. Notes B2 11.00 8/01/09 6,050 6,140,750
Great Lakes Carbon Corp.,
Sr. Disc. Deb., Zero Coupon
(until 5/15/03) B-(a) 13.125 5/15/09 5,680 2,272,000
Sr. Sub. Notes B3 10.25 5/15/08 5,000 4,000,000
Motors & Gears, Inc., Sr. Notes B3 10.75 11/15/06 3,600 3,492,000
Sun World Int'l., Inc., First
Mtge. B2 11.25 4/15/04 1,440 1,339,200
Thermadyne Holdings,
Sr. Disc. Notes, Zero Coupon
(until 6/1/03) Caa1 12.50 6/01/08 2,000 720,000
Sr. Sub. Notes B3 9.875 6/01/08 6,545 5,039,650
Trench Electric S.A.,
(Netherlands)
Gtd. Sr. Sub. Notes B3 10.25 12/15/07 4,000(i) 2,800,000
---------------
38,011,850
----------------------------------------------------------------------------------------
Leisure & Tourism 3.5%
Ballys Health & Tennis Corp.,
Sr. Sub. Notes, Ser. C B3 9.875 10/15/07 19,840(g) 18,153,600
Extended Stay America, Inc.,
Sr. Sub. Notes B2 9.15 3/15/08 11,050 9,503,000
Felcor Suites L.P., Gtd. Sr. Notes Ba2 7.375 10/01/04 7,435 6,654,325
Hilton Hotels Corp., Sr. Notes Baa3 7.50 12/15/17 6,695 5,640,604
HMH Properties, Inc., Sr. Notes Ba2 7.875 8/01/08 19,375(g) 17,292,187
Hollywood Park, Inc., Gtd. Notes B2 9.25 2/15/07 17,800 17,755,500
</TABLE>
16 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Premier Parks, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 4/1/03) B3 10.00% 4/01/08 $12,250 $ 8,330,000
Sr. Notes B3 9.75 6/15/07 2,575 2,478,438
Six Flags Entertainment Corp.,
Gtd. Sr. Notes B2 8.875 4/01/06 7,300 6,953,250
Starwood Hotel & Resorts, Ba1 7.375 11/15/15 7,000 5,799,920
Town Sports Int'l., Inc., Sr.
Notes B2 9.75 10/15/04 5,885 5,590,750
Yankeenets LLC, Sr. Notes B1 12.75 3/01/07 10,000 9,625,000
---------------
113,776,574
----------------------------------------------------------------------------------------
Miscellaneous Services 1.7%
Coinstar, Inc., Sr. Disc. Notes NR 13.00 10/01/06 5,050 5,100,500
Color Spot Nurseries,
Sr. Sub. Notes Caa2 10.50 12/15/07 8,000 5,680,000
Continental Global Group, Inc.,
Sr. Notes B3 11.00 4/01/07 6,000 1,500,000
Iron Mountain, Inc., Sr. Sub.
Notes B2 8.25 7/01/11 7,400 6,475,000
Kindercare Learning Center, Inc.,
Sr. Sub. Notes B3 9.50 2/15/09 13,355(g) 12,286,600
La. Petite Academy, Inc., Sr.
Notes B3 10.00 5/15/08 6,500 3,835,000
United Rentals, Inc., Sr. Sub.
Notes B1 8.80 8/15/08 7,330(g) 6,413,750
Viasystems, Inc., Sr. Sub. Notes B3 9.75 6/01/07 15,610 13,580,700
---------------
54,871,550
----------------------------------------------------------------------------------------
Paper & Forest Products 2.6%
APP China Group Ltd.,
Sr. Disc. Notes B3 14.00 3/15/10 3,705(d) 2,371,200
Doman Industries Ltd., (Canada)
Sr. Notes B(a) 8.75 3/15/04 13,495(i) 10,391,150
Sr. Notes, Ser. B B(a) 9.25 11/15/07 3,335(i) 2,467,900
Graham Packaging Holdings Co.,
Sr. Disc. Notes, Zero Coupon
(until 1/15/03) B-(a) 10.75 1/15/09 15,925 8,918,000
Sr. Sub. Notes B3 8.75 1/15/08 7,150 6,149,000
Indah Kiat Fin Mauritius Ltd.,
(Indonesia) Gtd. Sr. Notes B3 10.00 7/01/07 10,000(g)(i) 6,050,000
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Radnor Holdings, Inc., Sr. Notes B2 10.00% 12/01/03 $ 1,500(g) $ 1,308,750
Repap New Brunswick, Inc.,
Sr. Sec'd. Notes B-(a) 11.50 6/01/04 3,725 3,743,625
Sr. Sec'd. Notes Caa1 10.625 4/15/05 11,205(g) 9,860,400
Riverwood Int'l. Corp.,
Sr. Notes B3 10.625 8/01/07 1,460 1,423,500
Sr. Notes B3 10.25 4/01/06 1,575(g) 1,496,250
Sr. Sub. Notes Caa1 10.875 4/01/08 9,460(g) 8,230,200
Stone Container Corp.,
Sr. Notes B1 10.75 10/01/02 2,455 2,479,550
Sr. Notes B2 12.58 8/01/16 200 208,000
Sr. Sub. Deb. B3 12.25 4/01/02 5,526 5,567,445
Stone Container Fin. Co., (Canada)
Sr. Notes B2 11.50 8/15/06 3,870(i) 3,986,100
Tekni-Plex, Inc., Sr. Sub. Notes B3 12.75 6/15/10 8,550 8,550,000
---------------
83,201,070
----------------------------------------------------------------------------------------
Real Estate 0.8%
CB Richards Ellis Svcs., Inc.,
Sr. Sub. Notes B1 8.875 6/01/06 8,800 7,535,000
Intrawest Corp., Sr. Notes B1 10.50 2/01/10 7,000 7,140,000
Saul B F Real Estate Investment
Trust, Sr. Sec'd. Notes B-(a) 9.75 4/01/08 13,000 11,277,500
---------------
25,952,500
----------------------------------------------------------------------------------------
Retail 1.3%
Big 5 Holdings Corp.,
Sr. Notes B2 10.875 11/15/07 13,900(b) 12,788,000
Sr. Disc. Notes, Zero Coupon
(until 11/30/02) NR 13.45 11/30/08 10,000 4,900,000
Franks Nursery & Crafts, Inc.,
Sr. Sub. Notes B-(a) 10.25 3/01/08 10,270(b) 3,697,200
French Fragrances, Inc.,
Sr. Notes, Ser. B B2 10.375 5/15/07 15,030 14,503,950
Sr. Notes, Ser. D B2 10.375 5/15/07 3,550 3,425,750
Musicland Group, Inc.,
Sr. Sub. Notes B2 9.00 6/15/03 886 806,260
</TABLE>
18 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Phar-Mor, Inc., Sr. Notes B3 11.72% 9/11/02 $ 2,211(b)(e) $ 1,790,910
Specialty Retailers, Inc., Sr.
Notes Ca 8.50 7/15/05 4,890 244,500
Steel Heddle Manufacturing Co.,
Sr. Sub. Notes Caa1 10.625 6/01/08 4,500 1,575,000
---------------
43,731,570
----------------------------------------------------------------------------------------
Steel & Metals 3.2%
Algoma Steel, Inc.,
First Mtge. Notes B2 12.375 7/15/05 8,635(g) 7,512,450
Great Central Mines Ltd., Sr.
Notes Ba2 8.875 4/01/08 4,010 3,448,600
International Wire Group, Inc.,
Sr. Sub. Notes B3 11.75 6/01/05 18,500 18,592,500
Kaiser Aluminum & Chemical Corp.,
Sr. Sub. Notes B3 12.75 2/01/03 12,650 11,606,375
LTV Corp., Sr. Notes Ba3 11.75 11/15/09 9,345(g) 7,943,250
Lukens, Inc.,
Sr. Notes Ba3 7.625 8/01/04 3,500 3,370,150
Sr. Notes Ba3 6.50 2/01/06 5,000 4,100,000
Neenah Corp., Sr. Sub. Notes B3 11.125 5/01/07 1,500(g) 1,147,500
Renco Steel Holdings, Inc.,
Sr. Sec'd. Notes B-(a) 10.875 2/01/05 7,450 6,109,000
RMI USA LLC, Sr. Notes B1 10.00 6/01/09 1,900 1,805,000
Russel Metals, Inc., Sr. Notes B1 10.00 6/01/09 2,850 2,707,500
Sheffield Steel Corp., First Mtge. B-(a) 11.50 12/01/05 6,650 4,655,000
Silgan Holdings, Inc., Sr. Sub.
Deb. B1 9.00 6/01/09 12,000 11,340,000
Wheeling Pittsburgh Corp.,
Sr. Notes B2 9.25 11/15/07 9,400 6,110,000
WHX Corp., Sr. Notes B3 10.50 4/15/05 15,895(g) 11,921,250
---------------
102,368,575
----------------------------------------------------------------------------------------
Supermarkets 1.1%
Pantry, Inc., Sr. Sub. Notes B3 10.25 10/15/07 16,415(g) 15,512,175
Pathmark Stores, Inc.,
Sr. Sub. Notes Caa3 9.625 5/01/03 11,670(e) 8,169,000
Southland Corp., Sr. Sub. Deb. Baa3 5.00 12/15/03 15,000 13,317,000
---------------
36,998,175
</TABLE>
See Notes to Financial Statements 19
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Technology 0.3%
Details Holding Corp.,
Sr. Disc. Notes, Zero Coupon
(until 11/15/02) B+(a) 12.50% 11/15/07 $ 1,620 $ 1,069,200
Flextronics Int'l Ltd., Sr. Sub.
Notes Ba3 9.875 7/01/10 7,000(g) 7,070,000
MCMS, Inc., Sr. Sub. Notes Caa3 9.75 3/01/08 1,000 575,000
---------------
8,714,200
----------------------------------------------------------------------------------------
Telecommunications 22.8%
360networks, Inc., Sr. Notes B3 12.00 8/01/09 4,880 4,562,800
Allegiance Telecom, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 2/15/03) B(a) 11.75 2/15/08 14,275 10,349,375
Sr. Notes B(a) 12.875 5/15/08 9,500 10,260,000
Barak ITC Int'l. Telecom, (Israel)
Sr. Disc. Notes Zero Coupon
(until 11/15/02) B3 12.50 11/15/07 36,500(i) 18,250,000
Bestel S.A. De CV, (Mexico)
Sr. Disc. Notes Zero Coupon
(until 5/15/01) NR 12.75 5/15/05 11,000(i) 7,810,000
Birch Telecom, Inc., Sr. Notes NR 14.00 6/15/08 5,000 4,850,000
Call-Net Enterprises, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 8/15/03) B2 8.94 8/15/08 2,800 1,064,000
Caprock Communications Corp.,
Sr. Notes B3 12.00 7/15/08 5,000 4,650,000
Cellnet Data Systems, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 10/1/02) (cost
$14,757,683; purchased 9/24/97
and 10/13/97) NR 14.00 10/01/07 13,069 914,830
Clearnet Communications, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 5/1/04) B3 10.125 5/01/09 3,105(g) 1,847,475
Comunicacion Cellular, S.A.,
(Columbia) Sr. Def'd. Bonds,
Zero Coupon (until 9/29/00) B3 14.125 3/01/05 32,750(i) 24,890,000
</TABLE>
20 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Dobson Communications Corp.,
Sr. Notes NR 10.875% 7/01/10 $11,555(g) $ 11,583,887
DTI Holdings, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 3/1/03) NR 12.50 3/01/08 3,250 1,369,063
Exodus Communications, Inc.,
Sr. Notes B3 10.75 12/15/09 8,675(g) 8,371,375
Sr. Notes B3 11.625 7/15/10 20,435 20,537,175
Fairpoint Cmmunications,
Sr. Sub. Notes B3 12.50 5/01/10 7,000 7,070,000
Focal Communications Corp.,
Sr. Notes B3 11.875 1/15/10 3,405 3,430,538
Global Crossing Holdings Ltd.,
Sr. Notes Ba2 9.125 11/15/06 8,925 8,590,312
Sr. Notes Ba2 9.50 11/15/09 24,670 23,683,200
Gtd. Notes Ba2 9.625 5/15/08 1,820 1,774,500
Global Telesystems, Sr. Notes B3 10.50 12/01/06 19,000 14,662,546
Globix Corp., Sr. Notes B-(a) 12.50 2/01/10 8,190 6,756,750
GST Telecommunications, Inc.,
Conv. Sr. Disc. Notes, Zero
Coupon (until 12/15/00) NR 13.875 12/15/05 2,262 452,400
Sr. Sub. Notes NR 12.75 11/15/07 6,000(b) 1,200,000
GT Group Telecom, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 2/01/05) B-(a) 13.25 2/01/10 13,825(d) 7,603,750
Hyperion Telecommunications, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 4/15/01) B3 13.00 4/15/03 8,525(g) 7,843,000
Sr. Sec. Notes B3 12.25 9/01/04 2,300(g) 2,334,500
ICG Holdings, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 9/15/00) B3 13.50 9/15/05 1,100 1,064,250
Sr. Disc. Notes, Zero Coupon
(until 3/15/02) B3 11.625 3/15/07 5,000 3,450,000
Impsat Corp.,
Sr. Notes B2 12.125 7/15/03 9,870 8,784,300
Sr. Notes B3 12.375 6/15/08 12,000(b) 9,480,000
</TABLE>
See Notes to Financial Statements 21
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Intermedia Communications of
Florida,
Sr. Disc. Notes, Zero Coupon
(until 5/15/01) B2 12.50% 5/15/06 $22,500 $ 20,812,500
Sr. Disc. Notes, Zero Coupon
(until 7/15/02) B2 11.25 7/15/07 15,750 12,285,000
Intersil Corp., Sr. Notes B3 13.25 8/15/09 5,174 5,846,620
IPC Information Systems, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 11/1/01) B3 10.87 5/01/08 16,000 14,440,000
KMC Telecom Holdings, Inc.,
Sr. Notes Caa2 13.50 5/15/09 5,675 4,880,500
Level 3 Communications, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 3/15/03) B3 12.875 3/15/08 5,210 5,157,900
Sr. Disc. Notes B3 Zero 3/15/10 57,250 31,487,500
Sr. Disc. Notes, Zero Coupon
(until 12/1/03) B3 10.50 12/01/08 25,765 15,716,650
Sr. Notes B3 11.25 3/15/10 10,000 9,800,000
Maxcom Telecom, NR 13.75 4/01/07 1,120(d) 985,600
McLeodUSA, Inc.,
Sr. Notes B1 9.25 7/15/07 9,500 9,143,750
Sr. Notes B1 8.125 2/15/09 2,495(g) 2,245,500
Metromedia Fiber Network, Inc.,
Sr. Notes B2 10.00 12/15/09 1,190 1,178,100
Microcell Telecommunications,
Sr. Disc. Notes, Zero Coupon
(until 6/1/04) B3 12.00 6/01/09 6,250(g) 4,109,375
Millicom Int'l. Cellular,
Sr. Disc. Notes, Zero Coupon
(until 6/1/01) Caa1 13.50 6/01/06 11,210 9,640,600
Netia Holdings BV, (Poland)
Gtd. Sr. Disc. Notes, Zero Coupon
(until 11/1/01) B2 11.25 11/01/07 12,500(i) 8,406,250
Gtd. Sr. Notes B2 10.25 11/01/07 10,150(g)(i) 8,373,750
</TABLE>
22 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Nextel Communications, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 9/15/02) B1 10.65% 9/15/07 $54,235(g) $ 42,574,475
Sr. Notes B1 9.375 11/15/09 43,045 41,323,200
Nextel Partners, Inc.,
Sr. Disc. Notes B3 Zero 2/01/09 3,516 2,408,460
Nextlink Communications, Inc.,
Sr. Disc. Notes, Zero Copon
(until 12/1/04) B2 12.125 12/01/09 17,965 10,509,525
Sr. Notes B2 10.75 11/15/08 5,000 4,925,000
Sr. Notes B2 10.75 6/01/09 4,105(g) 4,063,950
Sr. Notes B2 10.50 12/01/09 13,970 13,690,600
Northeast Optic Network, Inc.,
Sr. Notes NR 12.75 8/15/08 10,415 9,685,950
Omnipoint Corp., Sr. Notes B2 11.625 8/15/06 3,300 3,531,000
Pagemart Nationwide, Inc.,
Sr. Disc. Notes, B3 15.00 2/01/05 10,210 9,750,550
Price Communications Wireless,
Sr. Sub. Notes B2 11.75 7/15/07 3,000 3,217,500
Primus Telecommunications Group,
Inc., Sr. Notes B3 12.75 10/15/09 12,665 10,132,000
PsiNet, Inc., Sr. Notes B3 11.00 8/01/09 21,050 19,471,250
PTC Int'l. Fin. BV, (Poland)
Gtd. Sr. Sub. Disc. Notes,
Zero Coupon (until 7/1/02) B2 10.75 7/01/07 13,250(i) 9,407,500
RCN Corp., Sr. Notes B3 10.125 1/15/10 6,020 5,056,800
RSL Communications,
Gtd. Sr. Notes B2 9.875 11/15/09 4,700 3,290,000
Sr. Notes B2 12.25 11/15/06 3,500 2,870,000
Sr. Notes B2 12.00 11/01/08 5,750 4,197,500
Rural Cellular Corp., Sr. Sub.
Notes B3 9.625 5/15/08 3,000 2,917,500
SCG Holding & Semiconductor Corp.,
Sr. Sub. Notes B2 12.00 8/01/09 6,539 6,980,382
Spectrasite Holdings, Inc.,
Sr. Disc. Notes B3 Zero 3/15/10 4,460 2,397,250
</TABLE>
See Notes to Financial Statements 23
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Star Choice Communications,
Sr. Sec'd. Notes B3 13.00% 12/15/05 $ 5,000 $ 5,125,000
Tritel PCS, Inc.,
Sr. Sub. Disc. Notes, Zero Coupon
(until 5/15/04) B3 12.75 5/15/09 14,725 9,718,500
US Exchange LLC, Sr. Notes NR 15.00 7/01/08 7,000 7,630,000
US Unwired, Inc., Sr. Sub. Disc.
Notes, Zero Coupon
(until 11/1/04) CCC+(a) 13.375 11/01/09 1,815 984,638
Versatel Telecom BV, (Netherlands)
Sr. Notes B-(a) 13.25 5/15/08 9,000(g)(i) 9,180,000
Sr. Notes B-(a) 11.875 7/15/09 5,375(g)(i) 5,294,375
Viatel, Inc.,
Sr. Disc. Notes, Zero Coupon
(until 4/15/03) B-(a) 12.50 4/15/08 8,400 3,864,000
Sr. Notes B-(a) 11.25 4/15/08 5,050 3,787,500
Sr. Notes B3 11.50 3/15/09 10,976 8,341,760
Voicestream Wireless Corp.,
Sr. Disc. Notes, Zero Coupon
(until 11/15/04) B2 11.875 11/15/09 36,340 24,166,100
Sr. Notes B3 11.50 9/15/09 6,250 6,781,250
Sr. Notes B3 10.375 11/15/09 1,450 1,515,250
WamNet, Inc., Sr. Disc. Notes,
Zero Coupon (until 3/1/02) CC+(a) 13.25 3/01/05 6,000(b) 3,360,000
Williams Communications Group,
Inc., Sr. Notes B2 10.875 10/01/09 31,020(g) 30,399,600
---------------
736,547,986
----------------------------------------------------------------------------------------
Textiles 1.0%
Burlington Industries, Inc.,
Deb. Ba2 7.25 8/01/27 6,045 3,989,700
Notes Ba2 7.25 9/15/05 5,250 3,727,500
Cluett American Corp.,
Sr. Sub. Notes B3 10.125 5/15/08 8,250 6,105,000
</TABLE>
24 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 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>
Foamex L.P., Sr. Sub. Notes Caa2 9.875% 6/15/07 $ 8,550(d) $ 6,412,500
Phillips Van Heusen Corp.,
Sr. Sub. Notes B1 9.50 5/01/08 6,050 5,505,500
Worldtex, Inc., Sr. Notes B+ 9.625 12/15/07 14,250 5,343,750
---------------
31,083,950
----------------------------------------------------------------------------------------
Transportation/Trucking/Shipping 1.7%
American Commercial Lines,
Sr. Notes B1 10.25 6/30/08 15,535 12,738,700
Autopistas Del Sol S.A.,
(Argentina)
Sr. Notes BB-(a) 10.25 8/01/09 3,500(g)(i) 2,625,000
Calair Capital Corp., Sr. Notes Ba2 8.125 4/01/08 1,600 1,376,000
Continental Airlines, Inc., Sr.
Notes Ba2 8.00 12/15/05 7,500(b) 6,938,700
Delta Air Lines, Inc., Sr. Notes Baa3 8.30 12/15/29 4,400 3,847,140
Holt Group, Inc., Sr. Notes Caa3 9.75 1/15/06 8,320 832,000
Kitty Hawk, Inc., Gtd. Notes Ca 9.95 11/15/04 20,105(b)(e) 8,042,000
MRS Logistica S.A., (Brazil)
Sr. Notes B(a) 10.625 8/15/05 10,000(i) 8,600,000
Stena AB, (Sweden)
Sr. Notes Ba2 8.75 6/15/07 5,250(i) 4,593,750
United Air Lines, Inc., Baa3 9.75 8/15/21 1,185 1,155,363
USAir, Inc.,
Sr. Notes B3 9.625 2/01/01 850 840,480
Pass-through Certs. Ba3 10.375 3/01/13 4,340 3,862,600
---------------
55,451,733
Total corporate bonds
(cost $3,198,667,353) 2,804,749,059
---------------
</TABLE>
See Notes to Financial Statements 25
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Value
Description Shares (Note 1)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------
COMMON STOCKS(c) 0.2%
Dr. Pepper Bottling Holdings, Inc., Cl. B 68,580 $ 1,714,500
Envirosource, Inc. 28,690 13,448
GT Group Telecom, Inc., Cl. B (Canada) 600 9,488
Intermedia Communications of Florida 41,705 1,240,724
International Wireless Communication 386,757(f) 38,676
McLeodusa, Inc. 8,506 175,963
Peachtree Cable Assoc., Ltd. 31,559(f) 329,986
Premier Cruise Line 888,704 2,443,936
-------------
Total common stocks
(cost $20,739,514) 5,966,721
-------------
PREFERRED STOCKS 6.4%
--------------------------------------------------------------------------------------
Adelphia Communications Corp., 13.00% 74,000 7,770,000
California Fed. Corp., $9.125 1,822,245 38,608,816
CSC Holdings, Inc.,
Ser. 1995K-1, $11.125 186,779 19,658,535
Ser. 1995K-2, $11.125 3,632 39,044,000
Ser. 1995K-4, $11.75 166,545 17,903,604
Dobson Communications Corp., $13.00 5,000 4,975,000
Eagle Picher Holdings, Inc., $11.75 1,530 4,590,000
Global Crossing Holdings Ltd., 10.50% 10,000 970,000
GPA Group Plc, Conv., 7.00% 13,200,000 6,336,000
Paxon Communications Corp., Jr., $13.25 1,796 17,237,424
Primedia, Inc.,
$8.625 129,681 11,022,885
Ser. D, $10.00 20,000 1,860,000
R & B Falcon Corp., 13.875% 5,174 5,873,026
Rural Cellular Corp., $11.375 110 103,440
TNP Enterprises, Inc.,14.50% 15,000 15,000,000
TXU Corp., 9.25% 72,500 2,818,437
Viasystems Group, Inc., 8.00% 182,849 3,291,285
Waste Systems Int'l., Inc., 8.00% 11,105 2,942,825
World Access, Inc. 4,329 2,770,560
-------------
Total preferred stocks
(cost $211,330,421) 202,775,837
-------------
</TABLE>
26 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Expiration Value
Description Date Warrants (Note 1)
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
WARRANTS(c) 0.5%
Aladdin Gaming 3/1/10 30,000 $ 300
Allegiance Telecom, Inc. 2/03/08 14,200 1,661,400
American Banknote Corp. 12/1/02 3,750 38
Asia Pulp & Paper Ltd. 3/15/05 3,705(d) 37
Bell Technology Group Ltd. 5/1/05 8,500 348,500
Bestel S.A. De CV 5/15/05 11,000 132,000
Birch Telecom, Inc. 6/15/08 5,000 27,500
Cellnet Data Systems, Inc. 9/15/07 44 445
Clearnet Communications, Inc. 9/15/05 66 1,595,880
Communication Cellular S.A. 11/15/03 29 0
DTI Holdings, Inc. 3/1/08 16,250 162
Firstworld Communications, Inc. 4/15/08 4,075 285,250
GT Group Telecom, Inc. (Canada) 2/01/10 13,825(d) 0
Intelcom Group, Inc. 9/15/05 128 2,172,753
International Wireless Communications, Inc. 8/15/01 8 0
Maxcom Telecom S.A. 4/01/07 1,120(d) 0
Price Communications Wireless 8/1/07 17,200 2,872,400
Primus Telecommunications Group 8/1/04 12,250 376,687
R & B Falcon Corp. 5/01/09 4,500 2,250,000
Star Choice Communications 12/15/05 115,800 752,700
Sterling Chemical Holdings, Inc. 8/15/08 5 49,050
TNP Enterprises, Inc. 4/1/11 15 0
TVN Entertainment Corp. 8/1/08 5,615 0
USN Communications, Inc. 10/15/04 92,500 1
Versatel Telecom Int'l. BV 5/15/08 9,000 4,680,000
WamNet, Inc. 3/1/05 22,500 270,000
Waste Systems Int'l, Inc. 1/15/06 165,000 82,500
--------------
Total warrants (cost $532,548) 17,557,603
--------------
Units
--------------------------------------------------------------------------------------
COMMON TRUST UNIT(c) 0.3%
--------------------------------------------------------------------------------------
PSF Holdings LLC
(cost $15,959,021; purchased 5/20/94) 951,717(b)(f) $ 10,468,887
--------------
Total long-term investments (cost $3,447,228,857) 3,041,518,107
--------------
</TABLE>
See Notes to Financial Statements 27
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Principal
Interest Maturity Amount Value
Description Rate Date (000) (Note 1)
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 9.5%
---------------------------------------------------------------------------------------
Commercial Paper 9.5%
American Elec. Corp. 6.85% 7/20/00 $25,000(h) $ 24,909,618
AON Corp. 6.61 7/10/00 16,162(h) 16,135,292
Barton Capital Corp., 6.61 7/19/00 8,241 8,213,763
Bell Atlantic Network Funding Corp. 6.54 7/11/00 38,000 37,930,967
Bombardia Corp. 6.934 7/28/00 11,000(h) 10,942,828
Conagra, Inc. 6.83 7/11/00 27,000(h) 26,948,776
Cooper Tire & Rubber Co. 7.15 7/06/00 25,000 24,975,173
GPU Capital, Inc. 6.82 7/10/00 27,835(h) 27,787,541
GPU Capital, Inc. 6.82 7/12/00 17,297 17,260,955
GPU Capital, Inc. 6.89 7/14/00 42,345(h) 42,239,643
Phillips Petroleum Co. 7.30 7/03/00 19,212(h) 19,202,330
Puget Sound Power Corp. 6.95 7/28/00 7,500(h) 7,460,906
Suntrust Bank 7.00 7/03/00 14,562(h) 14,562,000
TWR, Inc. 6.88 8/15/00 15,000(h) 14,871,000
TWR, Inc. 6.90 8/15/00 17,000(h) 16,853,375
--------------
Total short-term investments
(cost $310,294,167) 310,294,167
--------------
Total Investments 103.6%
(cost $3,757,523,024; Note 4) 3,351,812,274
--------------
Liabilities in excess of other assets (3.6%) (118,082,297)
--------------
Net Assets 100% $3,233,729,977
--------------
</TABLE>
28 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Portfolio of Investments as of June 30, 2000 (Unaudited) Cont'd.
------------------------------
(a) Standard & Poor's Rating.
(b) Indicates a restricted security; the aggregate cost of such securities is
$156,437,025. The aggregate value $110,175,882 is approximately 3.4% of net
assets.
(c) Non-income producing securities.
(d) Consists of more than one class of securities traded together as a unit;
generally bonds with attached stock or warrants.
(e) Represents issuer in default on interest payments, non-income producing
security.
(f) Fair valued security.
(g) Portion of securities on loan, see Note 4.
(h) Represents security, or portion thereof, purchased with cash collateral
received for securities on loan.
(i) US$--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.
The Fund's current Prospectus contains a description of Moody's and Standard &
Poor's ratings.
See Notes to Financial Statements 29
<PAGE>
Prudential High Yield Fund, Inc.
Statement of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
June 30, 2000
<S> <C> <C>
--------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $3,757,523,024) $3,351,812,274
Interest receivable 65,602,525
Receivable for Fund shares sold 39,504,948
Receivable for investments sold 11,503,036
Receivable from manager 3,877,175
Receivable for securities lending 3,832,191
Dividends receivable 2,358,085
Deferred expenses and other assets 56,409
Unrealized appreciation on forward currency contracts 34,627
--------------
Total assets 3,478,581,270
--------------
LIABILITIES
Payable to custodian 10,994
Payable to broker for collateral for securities on loan 167,730,584
Payable for investments purchased 56,423,119
Dividends payable 8,245,871
Payable for Fund shares reacquired 5,365,363
Securities lending rebate payable 3,573,812
Distribution fee payable 1,262,927
Management fee payable 1,119,559
Accrued expenses 1,116,876
Unrealized depreciation on forward currency contracts 2,188
--------------
Total liabilities 244,851,293
--------------
NET ASSETS $3,233,729,977
--------------
--------------
Net assets were comprised of:
Common stock, at par $ 4,687,529
Paid-in capital in excess of par 4,245,066,821
--------------
4,249,754,350
Distributions in excess of net investment income (4,152,120)
Accumulated net realized loss on investments (610,072,074)
Net unrealized depreciation on investments and foreign
currencies (401,800,179)
--------------
Net assets, June 30, 2000 $3,233,729,977
--------------
--------------
</TABLE>
30 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Statement of Assets and Liabilities (Unaudited) Cont'd.
<TABLE>
<CAPTION>
June 30, 2000
<S> <C> <C>
--------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share
($1,673,313,548 / 242,294,350 shares of common stock
issued and outstanding) $6.91
Sales charge (4.00% of offering price) .29
Maximum offering price to public $7.20
--------------
--------------
Class B:
Net asset value, offering price and redemption price per
share ($1,433,700,168 / 208,086,779 shares of common
stock issued and outstanding) $6.89
--------------
--------------
Class C:
Net asset value and redemption price per share ($82,673,374
/
11,997,676 shares of common stock issued and outstanding) $6.89
Sales charge (1.00% of offering price) .07
Offering price to public $6.96
--------------
--------------
Class Z:
Net asset value, offering price and redemption price per
share ($44,042,887 / 6,374,093 shares of common stock
issued and outstanding) $6.91
--------------
--------------
</TABLE>
See Notes to Financial Statements 31
<PAGE>
Prudential High Yield Fund, Inc.
Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
June 30, 2000
<S> <C> <C>
--------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $ 175,509,796
Dividends 6,229,644
Income from securities loaned, net 211,309
-------------
Total Income 181,950,749
-------------
Expenses
Management fee 7,179,577
Distribution fee--Class A 2,035,905
Distribution fee--Class B 6,114,382
Distribution fee--Class C 326,934
Transfer agent's fees and expenses 1,965,000
Custodian's fees and expenses 202,000
Reports to shareholders 196,000
Legal fees and expenses 49,000
Registration fees 37,000
Directors' fees and expenses 35,000
Audit fee and expenses 24,000
Miscellaneous 163,425
-------------
Total expenses 18,328,223
-------------
Net investment income 163,622,526
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions (139,029,898)
Foreign currency transactions 2,135,919
Options written 215,000
-------------
(136,678,979)
-------------
Net change in unrealized depreciation of:
Investments (87,632,406)
Foreign currencies (629,042)
Options written (215,000)
-------------
(88,476,448)
-------------
Net loss on investments and foreign currencies (225,155,427)
-------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (61,532,901)
-------------
-------------
</TABLE>
32 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Statement of Changes in Net Assets (Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
June 30, 2000 December 31, 1999
<S> <C> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 163,622,526 $ 367,935,703
Net realized loss on investment
transactions (136,678,979) (178,020,667)
Net change in unrealized depreciation of
investments and foreign currencies (88,476,448) (53,587,637)
--------------- -----------------
Net decrease in net assets resulting
from operations (61,532,901) 136,327,399
--------------- -----------------
Dividends and distributions (Note 1)
Dividends from net investment income
Class A (80,745,835) (162,305,602)
Class B (76,458,611) (191,445,987)
Class C (4,094,700) (8,404,338)
Class Z (2,323,380) (5,779,776)
--------------- -----------------
(163,622,526) (367,935,703)
--------------- -----------------
Dividends in excess of net investment
income
Class A (1,536,755) (1,490,144)
Class B (1,438,493) (1,757,685)
Class C (73,210) (77,161)
Class Z (54,304) (53,065)
--------------- -----------------
(3,102,762) (3,378,055)
--------------- -----------------
Tax return of capital distributions
Class A -- (9,305,993)
Class B -- (10,976,792)
Class C -- (481,873)
Class Z -- (331,391)
--------------- -----------------
-- (21,096,049)
--------------- -----------------
Fund share transactions (Net of share
conversions)
(Note 5)
Net proceeds from shares sold 527,572,146 2,944,859,997
Net asset value of shares issued in
reinvestment of dividends and
distributions 77,560,190 193,970,292
Cost of shares reacquired (910,059,369) (3,323,984,917)
--------------- -----------------
Net decrease in net assets from Fund
share transactions (304,927,033) (185,154,628)
--------------- -----------------
Total decrease (533,185,222) (441,237,036)
NET ASSETS
Beginning of period 3,766,915,199 4,208,152,235
--------------- -----------------
End of period $ 3,233,729,977 $ 3,766,915,199
--------------- -----------------
--------------- -----------------
</TABLE>
See Notes to Financial Statements 33
<PAGE>
Prudential High Yield Fund, Inc.
Notes to Financial Statements (Unaudited)
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
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.
Repurchase Agreements: 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
34
<PAGE>
Prudential High Yield Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
commenced with respect to the seller of the security, realization of the
collateral by the Fund may be delayed or limited.
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 June 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.
Forward Currency Contracts: A forward currency contract is a commitment
to purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current exchange rates and any
unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments and foreign currencies. Gain or loss is realized on
the settlement date of the contract equal to the difference between the
settlement value of the original and renegotiated forward contracts. This gain
or loss, if any, is included in net realized gain (loss) on foreign currency
transactions. Risks may arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
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 original issue discounts 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.
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.
35
<PAGE>
Prudential High Yield Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
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.
Options: The Fund may either purchase or write options in order to
hedge against adverse market movements or fluctuations in value caused by
changes in prevailing interest rates or foreign currency exchange rates with
respect to securities or currencies which the Fund currently owns or intends to
purchase. When the Fund purchases an option, it pays a premium and an amount
equal to that premium is recorded as an investment. When the Fund writes an
option, it receives a premium and an amount equal to that premium is recorded as
a liability. The investment or liability is adjusted daily to reflect the
current market value of the option. If an option expires unexercised, the Fund
realizes a gain or loss to the extent of the premium received or paid. If an
option is exercised, the premium received or paid is an adjustment to the
proceeds from the sale or the cost basis of the purchase in determining whether
the Fund has realized a gain or loss. The difference between the premium and the
amount received or paid on effecting a closing purchase or sale transaction is
also treated as a realized gain or loss. Gain or loss on purchased options is
included in net realized gain (loss) on investment transactions. Gain or loss on
written options is presented separately as net realized gain (loss) on written
option transactions.
The Fund, as writer of an option, has no control over whether the
underlying securities or currencies may be sold (called) or purchased (put). As
a result, the Fund bears the market risk of an unfavorable change in the price
of the security or currency underlying the written option. The Fund, as
purchaser of an option, bears the risk of the potential inability of the
counterparties to meet the terms of their contracts.
Securities Lending: The Fund may lend securities to broker-dealers. The
loans are secured by collateral at least equal at all times to the market value
of the securities loaned. Loans are subject to termination at the option of the
borrower or the Fund. Upon termination of the loan, the borrower will return to
the lender securities identical to the loaned securities. The Fund may bear the
risk of delay in recovery of, or even loss of rights in, the securities loaned
should the borrower of the securities fail financially. The Fund receives
compensation, net of any rebate, for lending its securities in the form of fees
or it retains a portion of interest on the investment of any cash received as
collateral. The Fund also continues to receive interest, on the securities
loaned and any gain or loss in the market price of the securities loaned that
may
36
<PAGE>
Prudential High Yield Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
occur during the term of the loan will be for the account of the Fund.
Prudential Securities Incorporated ('PSI') is the securities lending agent for
the Fund. For the six months ended June 30, 2000, PSI has been compensated
approximately $71,000.
Reclassification of Capital Accounts: The Fund accounts for and reports
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 decrease net investment income by
$1,680,520 and increase accumulated net realized loss on investments by
$1,680,520. This was primarily due to a reclass of net foreign currency gains.
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 Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement PIMF 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') a wholly owned subsidiary of Prudential. The
Subadvisory Agreement provides that the subadviser will furnish investment
advisory services in connection with the management of the Fund. In connection
therewith, the Subadviser is obligated to keep certain books and records of the
Fund. PIFM continues to have responsibility for all investment advisory services
pursuant to the Management Agreement and supervises the Subadviser's performance
of such services. PIFM pays for the services of PIC, the cost of 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 PIFM 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.
Effective January 1, 2000, the subadvisory fee paid to PIC by PIFM is
computed daily and payable monthly at an annual rate of .25% of the Fund's
average daily net assets up to $250 million, .226% of the next $500 million,
.203% of the next $750 million, .181% of the next $500 million, .160% of the
next $500 million, .141% of
37
<PAGE>
Prudential High Yield Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
the next $500 million and .123% of the Fund's average daily net assets in excess
of $3 billion.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS'), which acts as the distributor of the Class A,
B, C and Z shares of the Fund. The Fund compensates PIMS for distributing and
servicing the Fund's Class A, B and C shares, pursuant to plans of distribution
(the 'Class A, B and C Plans'), regardless of expenses actually incurred by
PIMS. The distribution fees are accrued daily and payable monthly. No
distribution or service fees are paid to PIMS as distributor of the Class Z
shares of the Fund.
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%, .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 .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 June 30,
2000.
PIMS has advised the Fund that it has received approximately $311,600 and
$69,000 in front-end sales charges resulting from sales of Class A and Class C
shares, respectively, during the six months ended June 30, 2000. From these
fees, PIMS paid such sales charges to Pruco Securities Corporation, an
affiliated broker-dealer, which in turn paid commissions to salespersons and
incurred other distribution costs.
PIMS has advised the Fund that for the six months ended June 30, 2000, it
received approximately $2,227,400 and $62,900 in contingent deferred sales
charges imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
PIMS, PIFM and PIC are indirect, 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.
Prior to March 9, 2000, the commitment fee was .065 of 1% of the unused portion
of the credit facility. The Fund did not borrow any amounts pursuant to the SCA
during the six months ended June 30, 2000.
38
<PAGE>
Prudential High Yield Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC, ('PMFS'), a wholly owned subsidiary of
PIFM, serves as the Fund's transfer agent and during the six months ended June
30, 2000, the Fund incurred fees of approximately $1,709,400 for the services of
PMFS. As of June 30, 2000, $276,100 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.
At June 30, 2000, the net receivable of $3,877,175 due from the manager
relates 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 June 30, 2000 were $1,228,238,069 and $1,632,029,191,
respectively.
At June 30, 2000, the Fund had outstanding forward currency contracts to
sell and purchase foreign currencies, as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current
Sale Contracts Receivable Value Appreciation
----------------------------------- ---------------- ----------- -------------
<S> <C> <C> <C>
Euro, expiring 7/20/2000 $ 16,162,516 $16,127,889 $34,627
---------------- ----------- -------------
---------------- ----------- -------------
<CAPTION>
Value at
Foreign Currency Settlement Date Current
Purchase Contracts Payable Value Depreciation
----------------------------------- ---------------- ----------- -------------
<S> <C> <C> <C>
Euro, expiring 7/20/2000 $ 996,965 $ 994,777 $ 2,188
---------------- ----------- -------------
---------------- ----------- -------------
</TABLE>
39
<PAGE>
Prudential High Yield Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
Transactions in options written during the six months ended June 30, 2000,
were as follows:
<TABLE>
<CAPTION>
Number of Premiums
Contracts Received
--------- ---------
<S> <C> <C>
Options outstanding at
December 31, 1999....................................... 10,750 $ 215,000
Options expired........................................... 10,750 215,000
<CAPTION>
--------- ---------
Options outstanding at
June 30, 2000........................................... -- $ --
--------- ---------
--------- ---------
</TABLE>
For federal income tax basis of the Fund's investments, including
short-term investments, as of June 30, 2000 was $3,761,171,696, accordingly, net
unrealized depreciation for federal income tax purposes was $409,359,422 (gross
unrealized appreciation-$64,132,373; gross unrealized
depreciation-$473,491,795).
For federal income tax purposes, the Fund has a capital loss carryforward
as of June 30, 2000 of approximately $442,409,200 of which $110,441,500 expires
in 2000, $162,249,600 expires in 2003 and $169,718,100 expires in 2007. In
addition, the Fund will elect to treat net capital losses of approximately
$28,323,000 incurred in the two month period ended December 31, 1999 as having
been incurred in the current fiscal year. 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.
As of June 30, 2000, the Fund has securities on loan with an aggregate
market value of $159,523,838. The Fund received $167,730,584 in cash, as
collateral for securities on loan with which it purchased highly liquid
short-term investments in accordance with the Fund's securities lending
procedures.
40
<PAGE>
Prudential High Yield Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
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 4.00%. 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 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 3 billion shares of $.01 par value common stock authorized;
equally divided into four classes, designated Class A, Class B, Class C and
Class Z shares.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
----------------------------------------------------- ------------ ---------------
<S> <C> <C>
Six months ended June 30, 2000:
Shares sold 43,504,359 $ 304,978,722
Shares issued in reinvestment of dividends 5,757,865 40,771,095
Shares reacquired (67,269,645) (477,442,865)
------------ ---------------
Net decrease in shares outstanding before conversion (18,007,421) (131,693,048)
Shares issued upon conversion from Class B 23,154,368 163,222,394
------------ ---------------
Net increase in shares outstanding 5,146,947 $ 31,529,346
------------ ---------------
------------ ---------------
Year ended December 31, 1999:
Shares sold 271,460,456 $ 2,090,617,324
Shares issued in reinvestment of dividends and
distributions 12,007,130 92,000,070
Shares reacquired (276,197,826) (2,130,432,426)
------------ ---------------
Net increase in shares outstanding before conversion 7,269,760 52,184,968
Shares issued upon conversion from Class B 16,897,149 128,328,242
------------ ---------------
Net increase in shares outstanding 24,166,909 $ 180,513,210
------------ ---------------
------------ ---------------
</TABLE>
41
<PAGE>
Prudential High Yield Fund, Inc.
Notes to Financial Statements (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B Shares Amount
----------------------------------------------------- ------------ ---------------
Six months ended June 30, 2000:
<S> <C> <C>
Shares sold 26,725,274 $ 188,274,421
Shares issued in reinvestment of dividends 4,630,773 32,752,733
Shares reacquired (53,694,868) (381,272,609)
------------ ---------------
Net decrease in shares outstanding before conversion (22,338,821) (160,245,455)
Shares required upon conversion into Class A (23,220,292) (163,222,394)
------------ ---------------
Net decrease in shares outstanding (45,559,113) $ (323,467,849)
------------ ---------------
------------ ---------------
Year ended December 31, 1999:
Shares sold 92,533,010 $ 712,091,062
Shares issued in reinvestment of dividends and
distributions 11,958,428 91,619,587
Shares reacquired (137,029,543) (1,051,143,533)
------------ ---------------
Net decrease in shares outstanding before conversion (32,538,105) (247,432,884)
Shares reacquired upon conversion into Class A (16,936,033) (128,328,242)
------------ ---------------
Net decrease in shares outstanding (49,474,138) $ (375,761,126)
------------ ---------------
------------ ---------------
<CAPTION>
Class C
-----------------------------------------------------
<S> <C> <C>
Six months ended June 30, 2000:
Shares sold 2,268,793 $ 16,008,854
Shares issued in reinvestment of dividends 285,493 2,018,163
Shares reacquired (3,913,233) (27,839,464)
------------ ---------------
Net decrease in shares outstanding (1,358,947) $ (9,812,447)
------------ ---------------
------------ ---------------
Year ended December 31, 1999:
Shares sold 9,197,134 $ 70,833,321
Shares issued in reinvestment of dividends and
distributions 640,878 4,895,941
Shares reacquired (7,131,689) (54,661,514)
------------ ---------------
Net increase in shares outstanding 2,706,323 $ 21,067,748
------------ ---------------
------------ ---------------
<CAPTION>
Class Z
-----------------------------------------------------
<S> <C> <C>
Six months ended June 30, 2000:
Shares sold 2,584,116 $ 18,310,149
Shares issued in reinvestment of dividends 284,737 2,018,199
Shares reacquired (3,308,002) (23,504,431)
------------ ---------------
Net decrease in shares outstanding (439,149) $ (3,176,083)
------------ ---------------
------------ ---------------
Year ended December 31, 1999:
Shares sold
Shares sold 9,225,121 $ 71,318,290
Shares issued in reinvestment of dividends and
distributions 710,369 5,454,694
Shares reacquired (11,376,862) (87,747,444)
------------ ---------------
Net decrease in shares outstanding (1,441,372) $ (10,974,460)
------------ ---------------
------------ ---------------
</TABLE>
42
<PAGE>
Prudential High Yield Fund, Inc.
Financial
Highlights
' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' '
' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' '
<PAGE>
Prudential High Yield Fund, Inc.
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class A
----------------
Six Months Ended
June 30, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.38
----------------
Income from investment operations
Net investment income .35
Net realized and unrealized gain (loss) on investments (.46)
----------------
Total from investment operations (.11)
----------------
Less distributions
Dividends from net investment income (.35)
Distributions in excess of net investment income (.01)
Tax return of capital distributions --
---------------- ---
Total distributions (.36)
----------------
Net asset value, end of period $ 6.91
----------------
----------------
TOTAL RETURN(a) (1.91)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $1,673,314
Average net assets (000) $1,637,673
Ratios to average net assets:
Expenses, including distribution fees .83%(b)
Expenses, excluding distribution fees .58%(b)
Net investment income 9.92%(b)
For Classes A, B, C and Z shares:
Portfolio turnover rate 38%
</TABLE>
------------------------------
(a) 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.
(b) Annualized.
44 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------------------------------------------
Year Ended December 31,
---------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 7.88 $ 8.65 $ 8.39 $ 8.19 $ 7.68
---------------- ---------------- ---------------- ---------------- ----------------
.71 .76 .73 .75 .81
(.45) (.76) .30 .22 .53
---------------- ---------------- ---------------- ---------------- ----------------
.26 -- 1.03 .97 1.34
---------------- ---------------- ---------------- ---------------- ----------------
(.71) (.76) (.73) (.75) (.81)
(.01) (.01) (.04) (.02) (.02)
(.04) -- -- -- --
---------------- ---------------- ---------------- ---------------- ----------------
(.76) (.77) (.77) (.77) (.83)
---------------- ---------------- ---------------- ---------------- ----------------
$ 7.38 $ 7.88 $ 8.65 $ 8.39 $ 8.19
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
3.38% (0.13)% 12.81% 12.60% 18.17%
$1,750,618 $1,677,605 $1,730,473 $1,564,429 $1,336,354
$1,746,123 $1,712,531 $1,635,480 $1,385,143 $1,056,555
.80% .67% .69% .72% .75%
.55% .52% .54% .57% .60%
9.30% 9.04% 8.59% 9.20% 10.13%
70% 103% 113% 89% .78%
</TABLE>
See Notes to Financial Statements 45
<PAGE>
Prudential High Yield Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
----------------
Six Months Ended
June 30, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.36
----------------
Income from investment operations
Net investment income .32
Net realized and unrealized gain (loss) on investments (.45)
----------------
Total from investment operations (.13)
----------------
Less distributions
Dividends from net investment income (.32)
Distributions in excess of net investment income (.02)
Tax return of capital distributions --
----------------
Total distributions (.34)
----------------
Net asset value, end of period $ 6.89
----------------
----------------
TOTAL RETURN(a) (2.03)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $1,433,700
Average net assets (000) $1,639,461
Ratios to average net assets:
Expenses, including distribution fees 1.33%(b)
Expenses, excluding distribution fees .58%(b)
Net investment income 9.38%(b)
</TABLE>
------------------------------
(a) 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.
(b) Annualized.
46 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class B
---------------------------------------------------------------------------------------------------
Year Ended December 31,
---------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 7.86 $ 8.63 $ 8.38 $ 8.18 $ 7.67
---------------- ---------------- ---------------- ---------------- ----------------
.67 .71 .68 .71 .76
(.45) (.76) .29 .22 .53
---------------- ---------------- ---------------- ---------------- ----------------
.22 (.05) .97 .93 1.29
---------------- ---------------- ---------------- ---------------- ----------------
(.66) (.71) (.68) (.71) (.76)
(.02) (.01) (.04) (.02) (.02)
(.04) -- -- -- --
---------------- ---------------- ---------------- ---------------- ----------------
(.72) (.72) (.72) (.73) (.78)
---------------- ---------------- ---------------- ---------------- ----------------
$ 7.36 $ 7.86 $ 8.63 $ 8.38 $ 8.18
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
2.86% (.70)% 12.07% 11.97% 17.49%
$1,867,620 $2,381,793 $2,640,491 $2,596,207 $2,730,903
$2,180,904 $2,557,252 $2,589,122 $2,652,883 $2,725,385
1.30% 1.27% 1.29% 1.32% 1.35%
.55% .52% .54% .57% .60%
8.78% 8.41% 7.99% 8.62% 9.56%
</TABLE>
See Notes to Financial Statements 47
<PAGE>
Prudential High Yield Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
----------------
Six Months Ended
June 30, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.36
--------
Income from investment operations
Net investment income .33
Net realized and unrealized gain (loss) on investments (.46)
--------
Total from investment operations (.13)
--------
Less distributions
Dividends from net investment income (.33)
Distributions in excess of net investment income (.01)
Tax return of capital distributions --
--------
Total distributions (.34)
--------
Net asset value, end of period $ 6.89
--------
--------
TOTAL RETURN(a) (2.03)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 82,673
Average net assets (000) $ 87,661
Ratios to average net assets:
Expenses, including distribution fees 1.33%(b)
Expenses, excluding distribution fees .58%(b)
Net investment income 9.39%(b)
</TABLE>
(a) 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.
(b) Annualized.
48 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class C
---------------------------------------------------------------------------------------------------
Year Ended December 31,
---------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 7.86 $ 8.63 $ 8.38 $ 8.18 $ 7.67
-------- -------- -------- -------- --------
.67 .71 .68 .71 .76
(.45) (.76) .29 .22 .53
-------- -------- -------- -------- --------
.22 (.05) .97 .93 1.29
-------- -------- -------- -------- --------
(.67) (.71) (.68) (.71) (.76)
(.01) (.01) (.04) (.02) (.02)
(.04) -- -- -- --
-------- -------- -------- -------- --------
(.72) (.72) (.72) (.73) (.78)
-------- -------- -------- -------- --------
$ 7.36 $ 7.86 $ 8.63 $ 8.38 $ 8.18
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
2.86% (0.70)% 12.07% 11.97% 17.49%
$ 98,347 $ 83,687 $ 55,879 $ 43,374 $ 24,021
$ 95,443 $ 67,296 $ 45,032 $ 28,647 $ 12,063
1.30% 1.27% 1.29% 1.32% 1.35%
.55% .52% .54% .57% .60%
8.81% 8.49% 7.99% 8.60% 9.49%
</TABLE>
See Notes to Financial Statements 49
<PAGE>
Prudential High Yield Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class Z
----------------
Six Months Ended
June 30, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.39
--------
Income from investment operations
Net investment income .36
Net realized and unrealized gain (loss) on investments (.47)
--------
Total from investment operations (.11)
--------
Less distributions
Dividends from net investment income (.36)
Distributions in excess of net investment income (.01)
Tax returns of capital distributions --
--------
Total distributions (.37)
--------
Net asset value, end of period $ 6.91
--------
--------
TOTAL RETURN(a) (1.77)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 44,043
Average net assets (000) $ 46,076
Ratios to average net assets:
Expenses, including distribution fees .58%(b)
Expenses, excluding distribution fees .58%(b)
Net investment income 10.14%(b)
</TABLE>
------------------------------
(a) 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.
(b) Annualized.
(c) Commencement of offering of Class Z shares.
50 See Notes to Financial Statements
<PAGE>
Prudential High Yield Fund, Inc.
Financial Highlights (Unaudited) Cont'd.
<TABLE>
<CAPTION>
Class Z
-------------------------------------------------------------------------------------
March 1, 1996(c)
Year Ended December 31, Through
---------------------------------------------------------- December 31,
1999 1998 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 7.88 $ 8.65 $ 8.39 $ 8.34
-------- -------- -------- --------
.73 .76 .74 .63
(.44) (.75) .30 .07
-------- -------- -------- --------
.29 .01 1.04 .70
-------- -------- -------- --------
(.73) (.76) (.74) (.63)
(.01) (.02) (.04) (.02)
(.04) -- -- --
-------- -------- -------- --------
(.78) (.78) (.78) (.65)
-------- -------- -------- --------
$ 7.39 $ 7.88 $ 8.65 $ 8.39
-------- -------- -------- --------
-------- -------- -------- --------
3.79% 0.00% 12.96% 8.77%
$ 50,330 $ 65,068 $ 41,625 $ 31,748
$ 60,652 $ 57,453 $ 35,808 $ 28,978
.55% .52% .54% 57%(b)
.55% .52% .54% .57%(b)
9.53% 9.23% 8.74% 9.31%(b)
</TABLE>
See Notes to Financial Statements 51
<PAGE>
<PAGE>
Prudential High Yield Fund, Inc.
Getting the Most from Your Prudential Mutual Fund
When you invest through Prudential Mutual Funds, you
receive financial advice from a Prudential Securities
Financial Advisor or Pruco Securities registered
representative. Your advisor or representative can
provide you with the following services:
There's No Reward Without Risk; but Is This Risk Worth
It?
Your financial advisor or registered representative can
help you match the reward you seek with the risk you can
tolerate. Risk can be difficult to gauge-sometimes even
the simplest investments bear surprising risks. The
educated investor knows that markets seldom move in just
one direction. There are times when a market sector or
asset class will lose value or provide little in the way
of total return. Managing your own expectations is easier
with help from someone who understands the markets and
who knows you!
Keeping Up With the Joneses
A financial advisor or registered representative can help
you wade through the numerous available mutual funds to
find the ones that fit your individual investment profile
and risk tolerance. While the newspapers and popular
magazines are full of advice about investing, they are
aimed at generic groups of people or representative
individuals-not at you personally. Your financial advisor
or registered representative will review your investment
objectives with you. This means you can make financial
decisions based on the assets and liabilities in your
current portfolio and your risk tolerance-not just based
on the current investment fad.
Buy Low, Sell High
Buying at the top of a market cycle and selling at the
bottom are among the most common investor mistakes. But
sometimes it's difficult to hold on to an investment when
it's losing value every month. Your financial advisor or
registered representative can answer questions when
you're confused or worried about your investment, and
should remind you that you're investing for the long
haul.
<PAGE>
For More Information
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Directors
Eugene C. Dorsey
Delayne Dedrick Gold
Robert F. Gunia
Thomas T. Mooney
Stephen P. Munn
David R. Odenath, Jr.
Richard A. Redeker
John R. Strangfeld
Nancy H. Teeters
Louis A. Weil, III
Officers
John R. Strangfeld, President
Robert F. Gunia, Vice President
David R. Odenath, Jr., 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
194 Wood Avenue South
Iselin, NJ 08830
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 PBHAX 74435F106
Class B PBHYX 74435F205
Class C PBHCX 74435F304
Class Z PHYZX 74435F403
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 June 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
MF110E2 74435F106 74435F205 74435F304 74435F403
(ICON) Printed on Recycled Paper
