<PAGE>
ANNUAL REPORT JUNE 30, 2000
Prudential Securities COMMAND Funds/
COMMAND Money Fund, COMMAND Government Fund,
COMMAND Tax-Free Fund
Fund Type Money market
(GRAPHIC)
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
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.
(LOGO)
<PAGE>
Build on the Rock
Investment Goals and Style
COMMAND Money Fund and COMMAND Government Fund seek high current income,
preservation of capital, and maintenance of liquidity. However, COMMAND Money
Fund invests in a diversified portfolio of money market instruments maturing
in 13 months or less, while COMMAND Government Fund invests in a portfolio of
U.S. government securities maturing in 13 months or less. There can be no
assurance that the Funds will achieve their respective investment objective.
COMMAND Tax-Free Fund seeks high current income that is exempt from federal
income taxes, consistent with the maintenance of liquidity and preservation of
capital. The Fund invests in a diversified portfolio of short-term, tax-exempt
securities with maturities of 13 months or less that are issued by states,
municipalities, and their agencies (or authorities). Some securities may pay
income that is subject to the federal alternative minimum tax (AMT). There can
be no assurance that the Fund will achieve its investment objective.
Fund Facts As of 6/30/00
<TABLE>
<CAPTION>
7-Day Net Asset Weighted Avg. Net Assets
Current Yld. Value (NAV) Mat. (WAM) (Millions)
<S> <C> <C> <C> <C>
COMMAND Money 6.08% $1.00 60 Days $13,489
iMoneyNet, Inc.
Money Fund (General Purpose) Avg.* 5.86% $1.00 57 Days N/A
COMMAND Government 5.88% $1.00 42 Days $687
iMoneyNet, Inc.
Government & Agency Retail Avg.* 5.79% $1.00 46 Days N/A
COMMAND Tax-Free 3.97% $1.00 54 Days $1,429
iMoneyNet, Inc.
SB & GP Avg.** 3.95% $1.00 36 Days N/A
</TABLE>
Note: Yields will fluctuate from time to time, and past performance is not
indicative of future results. An investment in the Funds is neither insured
nor guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Funds seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the Funds.
*iMoneyNet, Inc. reports a seven-day current yield, NAV, and WAM on Tuesdays.
This is the data of all funds in the iMoneyNet, Inc. Money Fund (General
Purpose) Average category and the iMoneyNet, Inc. Gov't & Agency Retail Average
category as of June 27, 2000, the closest date to the end of our reporting
period.
**iMoneyNet, Inc. reports a seven-day current yield, NAV, and WAM on Mondays
for tax-free money funds. This is the data of all funds in the iMoneyNet, Inc.
Stock Broker & General Purpose (SB & GP) Average category as of June 26, 2000,
the closest date to the end of our reporting period.
<PAGE>
(LOGO) August 14, 2000
Dear Shareholder,
Prudential's Money Markets Sector team identified and took advantage of good
investment opportunities as money market yields climbed during our fiscal year
ended June 30, 2000. The team used credit research, interest-rate analysis,
and relative value analysis that enabled COMMAND Money Fund, COMMAND Government
Fund, and COMMAND Tax-Free Fund to provide competitive yields and maintain
stable $1 net asset values.
Increases in short-term interest rates by the Federal Reserve (the Fed), among
other factors, drove yields higher in both the taxable and tax-exempt money
markets. The Fed repeatedly raised rates in an effort to rein in U.S. economic
growth and quell mounting inflationary pressures before they became rooted in
the economy.
Lower risk with high-quality investments
Having a conservative, high-quality investment alternative such as a money
market fund makes good sense for investors who are concerned about volatile
conditions in the financial markets.
Indeed, investors may do well to consider allocating some of their assets to a
money market fund as part of their overall investment strategy. For any of
life's unexpected events, it is reassuring to have quick access to your money
and an investment vehicle that may provide relative safety of principal and
liquidity.
Thank you for your continued confidence in Prudential mutual funds.
Yours sincerely,
John R. Strangfeld, President
Prudential Securities Command Funds
1
<PAGE>
Prudential Securities COMMAND Funds COMMAND Money Fund
www.prudential.com (800) 225-1852
Annual Report June 30, 2000
INVESTMENT ADVISER'S REPORT
COMMAND MONEY FUND
The Federal Reserve's repeated increases in short-term interest rates and
concern that widespread computer problems might have developed at the
beginning of 2000 led investors to require higher yields on bank and corporate
money market securities. As yields climbed during our fiscal year that began
July 1, 1999, we took advantage of many attractive buying opportunities.
In July 1999, we bought bank and corporate money market securities that carried
fixed interest rates and matured in six to seven months. At that time, the
structure of the "yield curve" (a graph depicting money market yields from the
shortest to the longest maturities) was such that six- and seven-month
securities offered good relative value. Yields on these securities maturing in
early 2000 were much higher than yields on shorter-term securities, but only
slightly lower than yields on securities maturing in nine months to one year.
Buying adjustable-rate securities
We also increased the Fund's holdings of bank and corporate securities whose
coupon rates adjusted monthly or quarterly based primarily on London Interbank
Offered Rates (LIBORs). (LIBORs are widely used benchmark rates for such
transactions.) The difference between the coupon rate and LIBOR is called the
"yield spread."
We began to increase the Fund's holdings of these adjustable-rate securities in
mid-summer of 1999 when they were being offered with unusually high "yield
spreads" to attract investors. Banks and corporations would normally have
issued these securities near the end of the year, but in 1999, they issued the
securities long before year-end. This was done to avoid any complications that
might have occurred if computers malfunctioned when switching their internal
dates from 1999 to 2000.
2
<PAGE>
After the change of year proceeded smoothly, "yield spreads" on adjustable-rate
securities began to decline toward historical norms. This trend enhanced the
Fund's relative performance.
Waiting for money market yields to rise sharply
In January 2000, investors awaited further moves by the Federal Reserve, which
had already raised short-term rates three times in 1999 to slow U.S. economic
growth to a more sustainable pace. However, the central bank was expected to
tighten monetary policy further because the economy continued to expand rapidly
as the year 2000 began. In anticipation of additional Fed rate hikes, investors
drove money market yields higher.
Our portfolio positioning gave us the flexibility to avoid purchasing
longer-term money market securities until after short-term rates rose to levels
commensurate with our expectations for tighter monetary policy. At the start of
the year 2000, the Fund's weighted average maturity (WAM) was longer than that
of its competitive average, and we gradually shortened it. (WAM is a
measurement tool that determines a portfolio's sensitivity to changes in the
level of interest rates. It takes into account the maturity level of each
security held by a portfolio.) Shortening the WAM enabled the Fund to have
greater flexibility to buy money market securities when sharply higher yields
became available later in the spring of 2000.
Focus on attractively priced one-year securities
Money market yields moved higher as the Fed increased short-term interest rates
by a quarter of a percentage point in February and in March. They continued to
climb in April and May on expectations that the Fed would tighten monetary
policy again when it met on May 16. Indeed on that date, the central bank
raised short-term rates by half of a percentage point-its largest increase in
more than five years. A statement issued by the Fed after this meeting seemed
to indicate that it might continue to hike rates.
3
<PAGE>
Due to the Fed's three rate increases, we bought one-year securities in
mid-May, which helped the Fund's WAM to lengthen until it was once again in
line with its competitive average. It is always difficult to predict when
rates will peak, and in hindsight, we should have concentrated our purchases of
one-year securities in the last week of May and early June because money market
yields seemed to have crested at that time.
In fact, money market yields began to edge lower as June progressed, and data
indicated that the U.S. economy seemed to be losing steam. Because of mounting
evidence pointing to moderating economic growth, few market participants were
surprised when the Fed voted to leave short-term rates unchanged on June 28.
Looking Ahead
From June 1999 through May 2000, the Fed raised short-term rates six times-the
first five were quarter-point rate hikes and the sixth was half of a percentage
point. We believe the Fed's unusually large half-point rate hike in mid-May
could be a signal that it has nearly completed its current round of tightening.
In fact, the federal funds futures market, where investors hedge against
changes in the overnight bank lending rate, indicates that many believe the
likelihood of further rate increases this year has diminished. We expect U.S.
economic activity to continue to moderate in coming months, decreasing the
amount of additional Fed rate hikes, if any, that might be necessary.
4
<PAGE>
INVESTMENT ADVISER'S REPORT
COMMAND GOVERNMENT FUND
The Federal Reserve's repeated increases in short-term interest rates and
concern that widespread computer problems might develop at the beginning of
2000 led investors to require higher yields on federal agency money market
securities. During our fiscal year that began July 1, 1999, we positioned the
Fund to take advantage of this rising-interest-rate environment.
The Fund held as much as 54% of its total investments in federal agency
securities whose coupon rates adjusted daily, weekly, or monthly based on
changes in appropriate benchmark interest rates. (The difference between a
coupon rate and its benchmark rate is called the "yield spread.") Owning
securities whose coupon rates frequently reset to higher levels enabled the
Fund to benefit more expediently from the trend toward higher yields.
We purchased most of our adjustable-rate securities from mid-summer through
early autumn of 1999 when "yield spreads" were at unusually attractive levels.
Normally, federal agencies issue these securities near the end of the year,
but in 1999, they issued the securities long before year-end. This was done to
avoid any complications that might have occurred if computers malfunctioned
when switching their internal dates from 1999 to 2000. After the change of year
proceeded smoothly, "yield spreads" on adjustable-rate securities returned to
historical norms. This trend enhanced the Fund's relative performance.
Fed's bold inflation-fighting tactics
In January 2000, investors awaited further moves by the Federal Reserve, which
had already raised short-term rates three times in 1999. Higher interest rates
lead to higher borrowing costs for consumers and businesses, which the Fed
hoped would slow U.S. economic growth to a more sustainable pace. As the
economy continued to expand rapidly in early 2000, investors anticipated
additional rate hikes, thereby driving money market yields higher.
5
<PAGE>
The Fed raised short-term rates in February, March, and May 2000. The changes
in monetary policy had the greatest impact on shorter-term money market
instruments. Federal agency securities maturing in six months often yielded
nearly as much (and for a while more) than securities due in one year.
Therefore, among fixed-rate money market securities, we primarily purchased
three- to six-month securities because they offered the most attractive yields
on a relative basis, particularly in the spring of 2000.
Relatively low exposure to repurchase agreements
The Fund's sizable holdings in adjustable-rate federal agency securities
contrasted with its lesser exposure to repurchase agreements. Essentially, a
repurchase agreement is a collateralized loan by which we lend cash to a
financial institution that provides either U.S. Treasury securities or federal
agency securities as collateral. The Fund earns a fixed return on the
transaction.
However, the return that the Fund can earn on a repurchase agreement has
declined markedly because of the reduced supply of Treasury collateral to back
the transactions. Strong U.S. economic growth continues to boost the
government's tax receipts, allowing the U.S. Treasury Department to retire
significant amounts of its outstanding debt securities.
Looking Ahead
From June 1999 through May 2000, the Fed raised short-term rates six times-the
first five were quarter-point rate hikes and the sixth was half of a percentage
point. We believe the Fed's unusually large half-point rate hike in mid-May
could be a signal that it has nearly completed its current round of tightening.
In fact, the federal funds futures market, where investors hedge against
changes in the overnight bank lending rate, indicates that many believe the
likelihood of further rate increases this year has diminished. We expect U.S.
economic activity to continue to moderate in coming months, decreasing the
amount of additional Fed rate hikes, if any, that might be necessary.
6
<PAGE>
INVESTMENT ADVISER'S REPORT
COMMAND TAX-FREE FUND
Two developments dominated the municipal money market during our fiscal year
that began on July 1, 1999: the demand for securities periodically exceeded
the supply and the Federal Reserve repeatedly raised short-term interest rates.
The supply/demand imbalance was evident in early July 1999 as investors,
anxious to reinvest cash from maturing bonds and bond coupon payments, pushed
yields on municipal money market securities lower (and their prices higher).
This seasonal drop in yields, known as the "July effect," was so pronounced
that yields declined even though the Fed had just increased short-term rates at
the end of June 1999.
Navigating through a low-yield period
We prepared the Fund to withstand the "July effect" by purchasing money market
securities when yields hovered at higher levels during the previous month. Our
purchases positioned the Fund's weighted average maturity (WAM) longer than
that of its competitive average. (WAM is a measurement tool that determines a
portfolio's sensitivity to changes in the level of interest rates. It takes
into account the maturity level of each security held by a portfolio.) Having a
longer WAM meant we did not have to invest in longer-term securities when
yields sank to unattractive levels in July.
For that matter, we were able to weather the next major seasonal decline in
municipal money market yields that occurred in early January 2000 because we
kept the Fund's WAM longer than that of its competitive average throughout the
remainder of 1999. As January progressed, we allowed the WAM to shorten by
investing in securities whose coupon rates reset either every day or every
seven days. This strategy enabled the Fund to have sufficient liquidity to buy
any higher-yielding securities that might be available after the Fed hiked
short-term rates at its next meeting in February 2000.
7
<PAGE>
Preparing the Fund for tax season
The Fed tightened monetary policy three times in the previous year to slow U.S.
economic growth to a more sustainable pace. However, it was expected to raise
short-term rates again because the economy continued to expand rapidly in
early 2000.
February brought another rate hike that pushed municipal money market yields
higher. We took advantage of this rise in yields by purchasing two- and
three-month commercial paper, as well as securities that could be sold back to
the issuer at their face value on a quarterly basis. We chose securities that
would mature in late April and early May because they would provide liquidity
to satisfy redemptions that occur as shareholders withdraw money from the Fund
to pay their income taxes. We also purchased school district notes due in one
year.
Fed's bold inflation-fighting tactics
The Fed's next move came in late March. Soon after, municipal money market
yields climbed sharply as it became clear the central bank would raise
short-term rates by half of a percentage point-its largest increase in more
than five years-at its mid-May meeting. During that time, we purchased housing
authority notes that could be tendered to the issuer at their face value in
one year.
In a rising-interest-rate environment, municipal money market yields tend to
lag the rise in taxable money market yields. Therefore under normal
circumstances, we still would have been able to buy higher-yielding money
market securities to extend the Fund's WAM, especially after the Fed
aggressively raised rates in mid-May. But the market behaved in an unusual
fashion as tax-exempt money market yields declined sharply in late May and
June. In hindsight, we should have bought more one-year securities in mid-May,
as money market yields seem to have peaked at that time.
8
<PAGE>
Looking Ahead
From June 1999 through May 2000, the Fed raised short-term rates six times-the
first five were quarter-point rate hikes and the sixth was half of a percentage
point. We believe the Fed's unusually large half-point rate hike in mid-May
could be a signal that it has nearly completed its current round of tightening.
In fact, the federal funds futures market, where investors hedge against
changes in the overnight bank lending rate, indicates that many believe the
likelihood of further rate increases this year has diminished. We expect U.S.
economic activity to continue to moderate in coming months, decreasing the
amount of additional Fed rate hikes, if any, that might be necessary.
Prudential Securities Command Funds Management Team
9
<PAGE>
COMMAND Account COMMAND Money Fund
Portfolio of Investments as of June 30, 2000
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
------------------------------------------------------------------------------------------
Bank Notes 7.0%
American Express Centurion Bank
$ 122,000 7.01%, 7/3/00(a) $ 122,000,000
Bank of America N.A.
8,000 6.32%, 7/25/00 8,000,000
Citicorp
19,000 6.684%, 8/02/00(a) 19,000,000
Comerica Bank N.A.
67,000 6.661%, 7/3/00(a) 66,992,022
92,000 6.656%, 7/6/01 92,005,264
40,000 6.573%, 6/7/01 39,988,789
First Chicago Corp.
50,000 6.441%, 5/1/01(a) 49,998,619
First Union National Bank
138,000 6.283%, 7/21/00(a) 138,000,000
128,000 7.09%, 12/22/00 128,000,000
Key Bank N.A.
13,000 6.331%, 7/17/00(a) 13,000,420
National City Bank
90,000 6.55%, 1/31/01 89,974,932
U.S. Bank N.A.
36,000 6.698%, 7/19/00(a) 35,998,974
146,000 6.581%, 7/21/00(a) 145,996,069
------------------
948,955,089
-------------------------------------------------------------------------------------
Certificates of Deposit - Yankee 16.2%
Bank of Montreal
150,000 6.58%, 7/17/00 150,000,000
Bank Scotland New York Institutional Certificate
95,000 7.13%, 6/29/01 94,955,354
Banque Nationale De Paris
120,000 6.81%, 10/6/00 120,000,000
Canadian Imperial Bank of Commerce
44,042 6.58%, 7/12/00 44,042,000
85,000 6.60%, 7/24/00 85,000,000
240,000 6.75%, 9/19/00 240,000,000
200,000 7.30%, 5/14/01 200,000,000
</TABLE>
10 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Money Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
Credit Suisse First Boston ,Inc.
$ 135,000 6.74%, 9/14/00 $ 135,002,765
Deutsche Bank
250,000 6.075%, 11/24/00 249,928,445
45,000 6.75%, 2/22/01 44,986,204
National Westminster Bank PLC
33,200 6.10%, 11/27/00 33,171,755
Toronto Dominion Bank
200,000 6.30%, 8/7/00 200,000,000
39,000 6.22%, 8/15/00 38,994,143
UBS AG
68,000 6.38%, 12/20/00 67,984,752
200,000 7.125%, 7/5/01 199,914,081
Westpac Banking Corp.
179,000 6.69%, 10/4/00(a) 178,965,154
46,000 6.22%, 11/30/00 45,985,398
50,000 6.52%, 1/29/01 49,986,204
------------------
2,178,916,255
-------------------------------------------------------------------------------------
Commercial Paper 47.3%
Abbey National North America
195,000 6.20%, 9/11/00 192,582,000
Alliance & Leicester
68,000 6.61%, 9/15/00 67,051,098
American General Finance Corp.
75,000 6.20%, 8/8/00 74,509,167
AT&T Corp.
138,688 6.59%, 9/5/00 137,012,418
Banc One Financial Corp.
150,000 6.065%, 8/3/00 149,166,062
46,222 6.18%, 8/18/00 45,841,131
20,000 6.90%, 9/25/00(a) 20,016,043
100,000 6.79%, 11/27/00 97,189,694
Bank One Australia Ltd.
4,369 6.62%, 7/21/00 4,352,932
47,000 6.69%, 8/22/00 46,545,823
Bank Scotland Treasury Services PLC
60,000 6.62%, 9/11/00 59,205,600
</TABLE>
See Notes to Financial Statements 11
<PAGE>
COMMAND Account COMMAND Money Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
BankAmerica Corp.
$ 100,000 6.06%, 8/3/00 $ 99,444,500
91,000 6.05%, 8/14/00 90,327,106
74,000 6.71%, 9/13/00 72,979,334
Barton Capital Corp.
30,358 6.60%, 7/10/00 30,307,909
16,562 6.60%, 7/21/00 16,501,273
11,351 6.60%, 7/24/00 11,303,137
BASF AG
20,000 6.62%, 9/26/00 19,680,033
Baus Funding LLC
65,000 6.62%, 9/14/00 64,103,542
Bell Atlantic Financial Services, Inc.
17,517 6.66%, 8/24/00 17,342,005
Bishops Gate Resident
39,000 6.57%, 7/18/00 38,879,002
Black Forest Corp.
16,000 6.57%, 7/5/00 15,988,320
20,000 6.62%, 7/5/00 19,985,289
30,000 6.60%, 7/17/00 29,912,000
Blue Ridge Asset Funding Corp.
55,000 6.57%, 7/12/00 54,889,587
15,000 6.60%, 7/25/00 14,934,000
Bradford & Bingley Building Society
75,000 6.18%, 7/17/00 74,794,000
Brahms Funding Corp.
174,000 6.705%, 7/28/00 173,124,997
British Telecommunications PLC
187,000 6.67%, 8/16/00 185,406,241
CBA Delaware Finance, Inc.
95,000 6.05%, 8/14/00 94,297,528
50,000 6.08%, 9/7/00 49,425,778
Centric Capital Corp.
13,000 6.23%, 8/28/00 12,869,516
7,223 6.65%, 8/30/00 7,142,945
5,500 6.65%, 9/25/00 5,412,626
</TABLE>
12 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Money Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
Ciesco, L.P.
$ 118,000 6.55%, 7/21/00 $ 117,570,611
99,000 6.55%, 7/27/00 98,531,675
Citicorp
91,013 6.55%, 7/27/00 90,582,458
Clipper Receivables Corp.
50,000 6.57%, 7/12/00 49,899,625
87,000 6.57%, 7/13/00 86,809,470
Countrywide Home Loan, Inc.
30,000 6.76%, 7/14/00 29,926,767
66,000 6.69%, 8/25/00 65,325,425
Den Norske Bank
94,212 6.63%, 9/5/00 93,066,853
Dexia CLF Finance Co.
57,000 6.58%, 7/20/00 56,802,052
44,000 6.55%, 7/27/00 43,791,856
Falcon Asset Securitization Corp.
110,000 6.62%, 8/14/00 109,109,978
Forrestal Funding Master Trust
6,478 6.62%, 7/11/00 6,466,088
139,000 6.19%, 7/17/00 138,617,596
158,000 6.09%, 8/10/00 156,930,867
Fortis Funding LLC
20,000 6.60%, 8/1/00 19,886,333
GE Capital International Funding, Inc.
45,000 6.52%, 7/14/00 44,894,050
General Electric Capital Corp.
18,535 6.55%, 7/5/00 18,521,511
195,000 6.12%, 8/10/00 193,674,000
42,000 6.04%, 8/15/00 41,682,900
143,000 6.75%, 2/27/01 136,538,187
General Electric Capital Services, Inc.
50,000 6.75%, 2/27/01 47,740,625
General Motors Acceptance Corp.
300,000 6.57%, 7/5/00 299,781,000
23,654 6.57%, 7/6/00 23,632,416
100,000 6.15%, 7/24/00 99,607,083
</TABLE>
See Notes to Financial Statements 13
<PAGE>
COMMAND Account COMMAND Money Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
GTE Corp.
$ 15,000 6.62%, 7/5/00 $ 14,988,967
31,960 6.58%, 7/13/00 31,889,901
50,000 6.60%, 7/19/00 49,835,000
9,030 6.60%, 7/20/00 8,998,546
81,500 6.60%, 7/24/00 81,156,342
8,500 6.62%, 7/25/00 8,462,487
22,750 6.65%, 7/25/00 22,649,142
91,462 6.62%, 7/27/00 91,024,710
41,500 6.62%, 7/28/00 41,293,952
18,538 6.62%, 8/1/00 18,432,323
77,000 6.62%, 8/3/00 76,532,738
Hartford Financial Services Group, Inc.
47,000 6.62%, 7/14/00 46,887,135
47,000 6.62%, 7/31/00 46,740,717
Homeside Lending, Inc.
5,513 6.56%, 7/7/00 5,506,972
36,600 6.57%, 7/18/00 36,486,449
20,000 6.35%, 7/24/00 19,918,861
Invensys PLC
8,964 6.85%, 7/17/00 8,936,710
Merrill Lynch & Co., Inc.
63,000 6.05%, 8/1/00 62,671,787
Morgan Stanley Dean Witter
97,000 6.60%, 7/28/00 96,519,850
National Rural Utilities Cooperative Finance
Corp.
30,000 6.12%, 7/17/00 29,918,400
50,000 6.15%, 7/17/00 49,863,333
6.65%, 8/7/00(c)
41,000 (cost $41,000,000; purchased 6/26/00) 41,000,000
Nationwide Anglia Building Society
150,000 6.62%, 9/8/00 148,096,750
142,166 6.62%, 9/11/00 140,283,722
New Center Asset Trust
31,000 6.56%, 7/28/00 30,847,480
Northern Rock PLC
20,000 6.70%, 7/21/00 19,925,556
</TABLE>
14 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Money Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
Preferred Receivables Funding Corp.
$ 11,000 6.60%, 7/19/00 $ 10,963,700
58,000 6.62%, 8/3/00 57,648,037
Receivables Capital Corp.
4,493 6.60%, 7/6/00 4,488,881
Salomon Smith Barney Holdings, Inc.
109,000 6.55%, 7/7/00 108,881,008
21,545 6.62%, 9/11/00 21,259,744
40,056 6.62%, 9/20/00 39,459,366
200,000 6.62%, 9/21/00 196,984,222
Southern Co.
30,000 6.60%, 7/10/00 29,950,500
26,640 6.65%, 7/19/00 26,551,422
27,028 6.65%, 7/26/00 26,903,183
Southtrust Bank National Associates
45,000 6.30%, 8/28/00 45,000,703
Sweetwater Capital Corp.
30,203 6.58%, 7/7/00 30,169,877
1,986 6.58%, 7/10/00 1,982,733
8,545 6.58%, 7/13/00 8,526,258
27,218 6.58%, 7/17/00 27,138,402
Thunder Bay Funding, Inc.
5,979 6.60%, 7/6/00 5,973,519
Travelers Insurance Co.
6.32%, 7/6/00(a)(c)
46,000 (cost $46,000,000; purchased 7/6/99) 46,000,000
Tribune Co.
141,000 6.57%, 8/1/00 140,202,292
Unifunding, Inc.
38,000 6.60%, 7/24/00 37,839,767
Variable Funding Capital Corp.
100,000 6.65%, 7/28/00 99,501,250
</TABLE>
See Notes to Financial Statements 15
<PAGE>
COMMAND Account COMMAND Money Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
Wells Fargo & Co.
$ 1,244 6.60%, 7/18/00 $ 1,240,123
Westpac Capital Corp.
20,000 6.17%, 7/14/00 19,955,439
------------------
6,377,400,318
-------------------------------------------------------------------------------------
Loan Participations 2.7%
ALCOA, Inc.
96,299 6.59%, 7/7/00 96,299,000
6.62%, 7/18/00(c)
198,000 (cost $198,000,000; purchased 6/15/00) 198,000,000
International Lease Finance Corp.
75,000 6.65%, 7/5/00 75,000,000
------------------
369,299,000
-------------------------------------------------------------------------------------
Other Corporate Obligations 22.7%
Abbey National Treasury Services PLC
202,000 6.248%, 7/24/00(a) 201,992,535
43,000 5.92%, 8/7/00 42,998,334
Bank One Corp.
46,000 6.69%, 8/9/00(a) 46,000,000
36,000 6.86%, 8/17/00(a) 36,000,000
68,000 6.85%, 8/21/00(a) 68,000,000
Centex Home Mortgage LLC
6.791%, 10/20/00(a)(c)
47,000 (cost $47,000,000; purchased 12/8/99) 47,000,000
CIT Group, Inc.
206,000 6.676%, 10/16/00(a) 205,703,146
Conseco Finance Vehicle Trust
75,233 6.811%, 1/5/01(a) 75,233,314
DaimlerChrysler North America Holdings, Inc.
193,000 6.534%, 7/6/00(a) 192,996,563
Dover Corp.
50,000 6.848%, 2/28/01(a) 50,000,000
Ford Motor Credit Co.
287,000 6.729%, 8/18/00(a) 286,969,505
344,000 6.77%, 10/2/00(a) 343,914,630
</TABLE>
16 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Money Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
Goldman, Sachs & Co.
$ 588,000 6.924%, 9/15/00(a) $ 588,000,000
Restructured Asset Securities
6.736%, 7/6/00(a)(c)
248,000 (cost $248,000,000; purchased 9/2/00) 248,000,000
Morgan (J.P.) & Co., Inc.
200,000 6.64%, 3/16/01(a) 200,000,000
Short Term Repackaged Asset Trust 1998-E
6.749%, 7/18/00(a)(c)
(cost $148,000,000; purchased 9/11/98 148,000,000
148,000
Strategic Money Market Trust 1999-A
286,000 6.40%, 7/13/00(a) 286,000,000
------------------
3,066,808,027
-------------------------------------------------------------------------------------
U.S. Government Agency Instrumentality Obligations - Non-discount 2.9%
Federal Home Loan Banks
390,000 6.189%, 7/5/00(a) 389,847,120
------------------
Total Investments 98.8%
(amortized cost $13,331,225,809(b)) 13,331,225,809
Other assets in excess of liabilities 1.2% 157,812,301
------------------
Net Assets 100% $ 13,489,038,110
------------------
------------------
</TABLE>
------------------------------
(a) Variable rate instrument. The maturity date presented for these instruments
is the later of the next date on which the security can be redeemed at par
or the next date on which the rate of interest was adjusted.
(b) The cost for federal income tax purposes is substantially the same as for
financial reporting purposes.
(c) Indicates illiquid securities restricted as to resale. The aggregate cost of
such securities was $728,000,000. The aggregate value of $728,000,000 was
approximately 5.4% of net assets.
See Notes to Financial Statements 17
<PAGE>
COMMAND Account COMMAND Money Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<S> <C>
The industry classification of portfolio holdings and other assets in excess
of liabilities as a percentage of net assets as of June 30, 2000 was as
follows:
Commercial Banks....................................................... 46.7%
Motor Vehicle Parts.................................................... 9.2
Security Brokers & Dealers............................................. 9.0
Asset Backed Securities................................................ 8.1
Telephone & Communications............................................. 5.8
Short-Term Business Credit............................................. 5.1
Federal Credit Agencies................................................ 3.6
Bank Holding Companies - Domestic...................................... 3.1
Multi-Media............................................................ 2.2
Mortgage Bankers....................................................... 1.2
Newspaper Publishing................................................... 1.0
Life Insurance......................................................... 0.8
Fire & Marine Casualty Insurance....................................... 0.7
Electrical Services.................................................... 0.6
Equipment Rental & Leasing............................................. 0.6
Personal Credit Institutions........................................... 0.6
Construction Equipment................................................. 0.4
Chemicals and Allied Products.......................................... 0.1
-----
98.8
Other assets in excess of liabilities.................................. 1.2
-----
100.0%
-----
-----
</TABLE>
18 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Money Fund
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
June 30, 2000
<S> <C>
--------------------------------------------------------------------------------------
ASSETS
Investments, at amortized cost which approximates market value $13,331,225,809
Cash 7,418,290
Receivable for Fund shares sold 339,000,651
Interest receivable 60,045,485
Prepaid expenses 85,787
---------------
Total assets 13,737,776,022
---------------
LIABILITIES
Payable for Fund shares repurchased 242,888,807
Management fee payable 4,009,407
Accrued expenses and other liabilities 1,101,209
Distribution fee payable 738,489
---------------
Total liabilities 248,737,912
---------------
NET ASSETS $13,489,038,110
---------------
---------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 134,890,381
Paid-in capital in excess of par 13,354,147,729
---------------
Net assets, June 30, 2000 $13,489,038,110
---------------
---------------
Net asset value, offering price and redemption price per share
($13,489,038,110 /13,489,038,110 shares of beneficial interest
($.01 par value) issued and outstanding) $ 1.00
---------------
---------------
</TABLE>
See Notes to Financial Statements 19
<PAGE>
COMMAND Account COMMAND Money Fund
Statement of Operations
<TABLE>
<CAPTION>
Year
Ended
June 30, 2000
<S> <C>
---------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned $ 771,478,343
-------------
Expenses
Management fee 47,374,169
Distribution fee 16,472,918
Transfer agent's fees and expenses 4,182,000
Reports to shareholders 800,000
Registration fees 530,000
Custodian's fees and expenses 300,000
Insurance expense 144,000
Trustees' fees and expenses 60,000
Audit fee 30,000
Legal fees and expenses 16,000
Miscellaneous 29,312
-------------
Total expenses 69,938,399
-------------
Net investment income 701,539,944
-------------
REALIZED LOSS ON INVESTMENTS
Net realized loss on investment transactions (31,937)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 701,508,007
-------------
-------------
</TABLE>
20 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Money Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
2000 1999
---------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 701,539,944 $ 566,116,045
Net realized loss on investment
transactions (31,937) --
---------------- ----------------
Net increase in net assets resulting
from operations 701,508,007 566,116,045
---------------- ----------------
Dividends and distributions to
shareholders
(Note 1) (701,508,007) (566,116,045)
---------------- ----------------
Fund share transactions (at $1 per share)
Net proceeds from shares subscribed 66,034,737,099 56,589,927,827
Net asset value of shares issued in
reinvestment of dividends and
distributions 701,483,686 566,116,045
Cost of shares reacquired (65,494,128,592) (53,999,386,826)
---------------- ----------------
Net increase in net assets from Fund
share transactions 1,242,092,193 3,156,657,046
---------------- ----------------
Total increase 1,242,092,193 3,156,657,046
NET ASSETS
Beginning of year 12,246,945,917 9,090,288,871
---------------- ----------------
End of year $ 13,489,038,110 $ 12,246,945,917
---------------- ----------------
---------------- ----------------
</TABLE>
See Notes to Financial Statements 21
<PAGE>
COMMAND Account COMMAND Money Fund
Financial Highlights
<TABLE>
<CAPTION>
Year Ended
June 30, 2000
----------------------------------------------------------------------------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.000
Net investment income and net realized gains 0.053
Dividends and distributions to shareholders (0.053)
----------------
Net asset value, end of year $ 1.000
----------------
----------------
TOTAL RETURN(a): 5.42%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 13,489,038
Average net assets (000) $ 13,178,334
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .53%
Expenses, excluding distribution and service (12b-1) fees .41%
Net investment income 5.32%
</TABLE>
------------------------------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
22 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Money Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Year Ended June 30,
--------------------------------------------------------------
1999 1998 1997 1996
--------------------------------------------------------------
<S> <C> <C> <C>
$ 1.000 $ 1.000 $ 1.000 $ 1.000
0.048 0.052 0.049 0.052
(0.048) (0.052) (0.049) (0.052)
----------- ---------- ---------- ----------
$ 1.000 $ 1.000 $ 1.000 $ 1.000
----------- ---------- ---------- ----------
----------- ---------- ---------- ----------
4.85% 5.31% 5.06% 5.30%
$12,246,946 $9,090,289 $6,629,903 $5,309,842
$11,965,069 $7,936,219 $6,078,525 $4,896,794
.54% .54% .57% .58%
.41% .42% .44% .46%
4.73% 5.19% 4.97% 5.15%
</TABLE>
See Notes to Financial Statements 23
<PAGE>
COMMAND Account COMMAND Money Fund
Report of Independent Accountants
To the Shareholders and Trustees of
COMMAND Money Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of COMMAND Money Fund (the 'Fund') at
June 30, 2000, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States.
These financial statements and financial highlights (hereafter referred to as
'financial statements') are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at June 30, 2000 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
August 18, 2000
24 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Government Fund
Portfolio of Investments as of June 30, 2000
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
------------------------------------------------------------------------------------------
U.S. Government Agencies 79.1%
Federal Farm Credit Bank 0.9%
$ 1,000 5.66%, 8/11/00 $ 999,428
5,000 5.85%, 12/1/00 4,995,005
------------------
5,994,433
-------------------------------------------------------------------------------------
Federal Home Loan Bank 42.4%
26,000 6.61%, 7/3/00(a) 25,994,480
26,000 6.51%, 7/4/00(a) 25,997,010
31,500 6.13%, 7/5/00(a) 31,494,377
52,000 6.189%, 7/5/00(a) 51,979,616
23,000 6.23%, 7/5/00(a) 23,000,000
11,000 6.24%, 7/5/00(a) 10,995,284
11,000 6.31%, 7/5/00(a) 10,999,713
25,000 6.54%, 7/5/00(a) 25,012,559
5,500 5.66%, 7/6/00 5,500,100
13,000 6.465%, 7/12/00(a) 12,999,805
3,000 5.48%, 7/13/00 2,999,327
8,000 5.875%, 9/7/00 7,999,361
5,500 Zero Coupon, 9/15/00 5,435,418
1,010 5.01%, 9/21/00 1,007,917
5,000 5.705%, 10/6/00 4,997,526
8,000 5.915%, 10/13/00 7,998,000
10,500 6.04%, 10/25/00 10,462,091
11,000 5.965%, 12/1/00 10,994,521
8,000 6.52%, 3/28/01 7,995,503
8,000 6.625%, 4/6/01 7,994,435
------------------
291,857,043
-------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 1.1%
7,640 5.99%, 12/6/00 7,635,407
</TABLE>
See Notes to Financial Statements 25
<PAGE>
COMMAND Account COMMAND Government Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
Federal National Mortgage Association 28.3%
$ 19,250 6.485%, 7/3/00(a) $ 19,235,089
13,000 6.845%, 7/3/00(a) 12,995,919
26,000 6.89%, 7/3/00(a) 25,998,881
11,000 6.37%, 7/5/00(a) 10,998,518
15,500 6.485%, 8/9/00(a) 15,498,431
8,000 5.80%, 8/17/00 7,999,021
18,000 6.515%, 8/17/00(a) 17,992,549
3,500 6.66%, 9/6/00(a) 3,499,731
1,585 5.97%, 10/2/00 1,585,223
9,500 5.90%, 12/1/00 9,491,456
1,910 8.25%, 12/18/00 1,922,588
5,690 5.89%, 12/22/00 5,685,338
18,700 6.47%, 2/16/01 18,651,491
10,000 5.65%, 3/5/01 9,930,334
27,000 6.224%, 3/6/01 26,990,827
6,000 6.52%, 3/16/01 5,993,397
------------------
194,468,793
-------------------------------------------------------------------------------------
Student Loan Marketing Association 6.4%
13,000 6.895%, 7/3/00(a) 12,998,952
26,000 6.54%, 7/5/00(a) 25,994,724
5,000 6.505%, 2/7/01 4,999,396
------------------
43,993,072
------------------
Total U.S. Government Agencies
(amortized cost $543,948,748) 543,948,748
------------------
</TABLE>
26 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Government Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C>
Repurchase Agreements(b) 18.9%
$ 25,000 Goldman, Sachs & Co., 6.50%, dated 6/13/00, due
7/12/00 in the amount of $25,130,903 (cost
$25,000,000), value of collateral including
accrued interest-$25,500,000 $ 25,000,000
38,992 Morgan (J.P.) Securities Inc., 6.80%, dated
6/30/00, due 7/5/00 in the amount of $39,028,826
(cost $38,992,000), value of collateral
including accrued interest-$39,771,840 38,992,000
30,000 Morgan Stanley Dean Witter, 6.65%, dated 6/28/00,
due 7/5/00 in the amount of $30,038,792 (cost
$30,000,000), value of collateral including
accrued interest-$30,810,209 30,000,000
36,033 Salomon Smith Barney, Inc., 6.68%, dated 6/29/00,
due 7/3/00 in the amount of $36,059,744 (cost
$36,033,000), value of collateral including
accrued interest-$36,753,660 36,033,000
------------------
Total Repurchase Agreements (amortized cost
$130,025,000) 130,025,000
------------------
Total Investments 98.0%
(amortized cost $673,973,748(c)) 673,973,748
Other assets in excess of liabilities 2.0% 13,390,008
------------------
Net Assets 100% $ 687,363,756
------------------
------------------
</TABLE>
------------------------------
(a) Variable rate instrument. The maturity date presented for these instruments
is the later of the next date on which the security can be redeemed at par
or the next date on which the rate of interest is adjusted.
(b) Repurchase agreements are collateralized by U.S. Treasury or Federal agency
obligations.
(c) The cost for federal income tax purposes is substantially the same as for
financial reporting purposes.
See Notes to Financial Statements 27
<PAGE>
COMMAND Account COMMAND Government Fund
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
June 30, 2000
<S> <C>
---------------------------------------------------------------------------------------
ASSETS
Investments, excluding repurchase agreements, at amortized cost
which approximates market value $ 543,948,748
Repurchase agreements 130,025,000
Receivable for Fund shares sold 39,911,482
Interest receivable 6,509,520
Prepaid expenses 7,197
-------------
Total assets 720,401,947
-------------
LIABILITIES
Payable for Fund shares repurchased 32,535,222
Accrued expenses and other liabilities 238,859
Management fee payable 226,642
Distribution fee payable 37,468
-------------
Total liabilities 33,038,191
-------------
NET ASSETS $ 687,363,756
-------------
-------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 6,873,637
Paid-in capital in excess of par 680,490,119
-------------
Net assets, June 30, 2000 $ 687,363,756
-------------
-------------
Net asset value, offering price and redemption price per share
($687,363,756 / 687,363,756 shares of beneficial interest
($.01 par value) issued and outstanding) $1.00
-------------
-------------
</TABLE>
28 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Government Fund
Statement of Operations
<TABLE>
<CAPTION>
Year
Ended
June 30, 2000
<S> <C>
---------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned $40,725,071
-------------
Expenses
Management fee 2,858,618
Distribution fee 893,318
Transfer agent's fees and expenses 102,000
Registration fees 79,000
Custodian's fees and expenses 75,000
Reports to shareholders 43,000
Audit fee 27,000
Legal fees and expenses 18,000
Trustees' fees and expenses 17,000
Insurance expense 9,000
Miscellaneous 1,129
-------------
Total expenses 4,123,065
-------------
Net investment income 36,602,006
-------------
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 23,360
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $36,625,366
-------------
-------------
</TABLE>
See Notes to Financial Statements 29
<PAGE>
COMMAND Account COMMAND Government Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
----------------------------------
2000 1999
<S> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 36,602,006 $ 34,224,418
Net realized gain on investment
transactions 23,360 22,602
--------------- ---------------
Net increase in net assets resulting from
operations 36,625,366 34,247,020
--------------- ---------------
Dividends and distributions to shareholders
(Note 1) (36,625,366) (34,247,020)
--------------- ---------------
Fund share transactions (at $1 per share)
Net proceeds from shares subscribed 3,360,155,858 3,282,787,339
Net asset value of shares issued in
reinvestment of dividends and
distributions 36,624,690 34,247,020
Cost of shares reacquired (3,423,806,329) (3,211,372,225)
--------------- ---------------
Net increase (decrease) in net assets from
Fund share transactions (27,025,781) 105,662,134
--------------- ---------------
Total increase (decrease) (27,025,781) 105,662,134
NET ASSETS
Beginning of year 714,389,537 608,727,403
--------------- ---------------
End of year $ 687,363,756 $ 714,389,537
--------------- ---------------
--------------- ---------------
</TABLE>
30 See Notes to Financial Statements
<PAGE>
COMMAND Account
Financial
Highlights
<PAGE>
COMMAND Account COMMAND Government Fund
Financial Highlights
<TABLE>
<CAPTION>
Year Ended
June 30,
2000
<S> <C>
---------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.000
Net investment income and net realized gains 0.051
Dividends and distributions to shareholders (0.051)
----------
Net asset value, end of year $ 1.000
----------
----------
TOTAL RETURN(a) 5.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $687,364
Average net assets (000) $714,655
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .58%
Expenses, excluding distribution and service (12b-1) fees .45%
Net investment income 5.12%
</TABLE>
------------------------------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
32 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Government Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------------------------------------------
1999 1998 1997 1996
-------------------------------------------------------
<S> <C> <C> <C>
$ 1.000 $ 1.000 $ 1.000 $ 1.000
0.046 0.051 0.049 0.050
(0.046) (0.051) (0.049) (0.050)
---------- ---------- ---------- ----------
$ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
4.74% 5.20% 4.97% 5.12%
$714,390 $608,727 $528,469 $487,485
$739,779 $562,693 $534,580 $477,168
.56% .56% .63% .68%
.44% .44% .51% .56%
4.63% 5.08% 4.84% 4.97%
</TABLE>
See Notes to Financial Statements 33
<PAGE>
COMMAND Account COMMAND Government Fund
Report of Independent Accountants
To the Shareholders and Trustees of
COMMAND Government Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of COMMAND Government Fund (the
'Fund') at June 30, 2000, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the United
States. These financial statements and financial highlights (hereafter referred
to as 'financial statements') are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 2000 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
August 18, 2000
34 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
<C> <C> <S> <C>
-----------------------------------------------------------------------------------------
ARIZONA 0.3%
Maricopa Cnty., St. Joseph's Care
Ctr.,
Prerefunded,
NR $ 3,800 7.75%, 7/1/00, Ser. 90A $ 3,876,000
-------------------------------------------------------------------------------------
CALIFORNIA 1.7%
California Higher Ed. Ln. Auth.
Rev.,
Student Ln. Rev., A.N.N.O.T.,
VMIG1 24,000 4.40%, 7/1/01, Ser. 87B 24,000,000
-------------------------------------------------------------------------------------
COLORADO 1.6%
Colorado Hlth. Fac. Auth. Rev.,
PSL Healthcare Sys.,
Prerefunded,
NR 3,950 8.50%, 2/15/01, Ser. 1991B 4,127,815
Denver City & Cnty. Rev.,
Sngl. Fam. Hsg. Mtge, A.M.T.
SP1+* 6,000 4.45%, 5/15/01, Ser. 00C 6,000,000
Roaring Fork Muni. Prods. LLC,
F.R.W.D., A.M.T.,
A1+* 7,635 5.02%, 7/6/00, Ser. 00-7 7,635,000
Wheat Ridge Ind. Dev. Rev., Var.
Adolph Coors Co. Proj.,
F.R.W.D., A.M.T.,
A1+* 5,000 4.95%, 7/5/00, Ser. 1993 5,000,000
---------------
22,762,815
-------------------------------------------------------------------------------------
CONNECTICUT 0.2%
Connecticut Spec. Assmt.,
Unemploy. Comp. Rev.,
A.N.N.O.T.,
VMIG1 3,200 4.35%, 7/1/01, Ser. 93C 3,200,000
-------------------------------------------------------------------------------------
FLORIDA 5.5%
Jacksonville Elec. Auth., Elec.
Sys. Rev., F.R.W.D.,
M.E.R.L.O.T.,
VMIG1 4,705 4.89%, 7/5/00, Ser. 00FF 4,705,000
Orange Cnty., Hlth. Fac. Auth.,
Hosp. Assoc. Hlth. Facs. Ln.,
F.R.W.D.,
VMIG1 30,000 5.10%, 7/5/00, Ser. 00A 30,000,000
</TABLE>
See Notes to Financial Statements 35
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
Adventist Hlth. Sys. Sunbelt,
F.R.W.D.,
A1+* $ 37,975 4.99%, 7/6/00, Ser. 98171 $ 37,975,000
Sunshine St. Gov't. Fin. Com.,
Rev. Notes, T.E.C.P.
A1+* 5,245 4.55%, 7/21/00, Ser. A 5,245,000
---------------
77,925,000
-------------------------------------------------------------------------------------
GEORGIA 6.4%
Burke Cnty. Georgia Dev. Auth.,
Oglethorpe Pwr. Corp., T.E.C.P.
VMIG1 9,000 4.40%, 7/19/00, Ser. 98 9,000,000
VMIG1 10,800 4.15%, 9/14/00, Ser.98B 10,800,000
Cobb Cnty. Ind. Dev. Auth.,
Inst. of Nuclear Pwr., F.R.W.D.,
CPS1 17,410 4.80%, 7/5/00, Ser. 98 17,410,000
Cobb Cnty. Multifam. Hsg. Rev.,
Post Bridge Proj., F.R.W.D.,
A1+* 10,000 4.75%, 7/5/00, Ser. 96 10,000,000
Terrell Mill II Assoc., F.R.W.D.,
A1+* 10,600 4.85%, 7/6/00, Ser. 93 10,600,000
De Kalb Cnty. Hosp. Auth. Rev.,
De Kalb Med. Ctr., F.R.W.D.,
VMIG1 12,500 4.80%, 7/6/00, Ser. 1999B 12,500,000
Fulton Cnty. Dev. Auth.,
Siemen's Energy, Inc., F.R.W.D.,
VMIG1 7,750 4.85%, 7/6/00, Ser. 94 7,750,000
Gwinett Cnty. Dev. Auth.,
Wesleyan Sch. Proj., F.R.W.D.,
CPS1 10,000 4.80%, 7/5/00, Ser. 99 10,000,000
Macon Bibb Cnty. Hosp. Auth.
Rev.,
Central Georgia Sr.
Hlth.-Carlyle Pl., F.R.D.D.,
VMIG1 3,500 4.65%, 7/3/00, Ser. 00 3,500,000
---------------
91,560,000
</TABLE>
36 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
ILLINOIS 16.1%
Chicago Illinois Rev.,
Homestart Prog., F.R.W.D.
VMIG1 $ 10,000 4.85%, 7/6/00 Ser. 00A $ 10,000,000
Chicago,
Sr. Lein Wtr. Rev., F.R.W.D.,
M.E.R.L.O.T.,
VMIG1 14,385 4.89%, 7/5/00, Ser. 00TT 14,385,000
Stockyards Ind. Proj., F.R.W.D.,
A1+* 13,030 4.85%, 7/5/00, Ser. 96A 13,030,000
Cook Cnty. Illinois Cons. High
Sch.
Dist., Gen. Oblig.,
NR 2,170 4.70%, 12/1/00, Ser. 99 2,176,596
Gurnee Ind. Dev. Rev.,
Sterigenics
Int'l. Proj., F.R.W.D., A.M.T.,
A-1* 6,890 4.95%, 7/5/00, Ser. 96 6,890,000
Illinois Dev. Fin. Auth. Rev.,
Adventist Hlth. Sys.
NR 2,055 4.50%, 11/15/00, Ser. 2000A 2,056,483
American College of Surgeons,
F.R.W.D.,
A1+* 15,200 4.85%, 7/7/00, Ser. 96 15,200,000
Illinois Ed. Fac. Auth. Rev.,
Univ. of Chicago, T.E.C.P.,
P1 25,000 4.10%, 10/20/00 25,000,000
Illinois Hlth. Facs. Auth.,
Central Baptist Home, F.R.W.D.
VMIG1 13,300 4.75%, 7/6/00, Ser. 1999 B 13,300,000
Evanston Hosp. Corp. Prog.,
A.N.N.M.T.,
VMIG1 25,000 3.90%, 10/31/00, Ser. 92 25,000,000
VMIG1 20,000 4.25%, 1/31/01, Ser. 95 20,000,000
Riverside Hlth. Sys., F.R.W.D.,
VMIG1 12,500 4.80%, 7/6/00, Ser. 94C 12,500,000
Servant Cor Falcon II, F.R.W.D.,
A-1* 14,000 4.85%, 7/5/00, Ser. 96A 14,000,000
</TABLE>
See Notes to Financial Statements 37
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
Illinois Hsg. Dev. Auth. Rev.,
Homeowner Mtge., F.R.W.D.,
M.E.R.L.O.T., A.M.T.,
VMIG1 $ 10,000 4.94%, 7/5/00, Ser. 00V $ 10,000,000
Peoria Cnty., Rev., Caterpillar
Inc. Proj., F.R.W.D., A.M.T.
P1 4,300 4.95%, 7/6/00, Ser. 00 4,300,000
Univ. of Illinois Brd. of
Trustees, Aux. Fac. Sys.,
F.R.W.D., M.E.R.L.O.T.,
VMIG1 3,500 4.89%, 7/5/00, Ser. 00S 3,500,000
Wheeling Multifam. Hsg. Rev.,
Woodland Creek II, F.R.W.D.,
SP1+ 17,655 4.85%, 7/7/00, Ser. 90 17,655,000
Woodridge & Dupage Cntys.,
Multifam. Hsg. Rev., Hinsdale
Lake Terr. Apts., F.R.W.D.,
A1+* 20,760 4.85%, 7/7/00, Ser. 90 20,760,000
---------------
229,753,079
-------------------------------------------------------------------------------------
INDIANA 1.3%
Elkhart Com. Sch., T.A.T.W.,
NR 7,500 4.70%, 12/29/00 7,514,640
Fort Wayne Swg. Works,
NR 1,000 4.00%, 8/1/00, Ser. 98B 1,000,410
Indiana Hlth. Fac. Fin.,
Sisters of St. Francis Hlth.
Svcs.,
NR 1,430 5.00%, 11/1/00, Ser. 1997A 1,433,942
Tippecanoe Cnty. Ind. Poll. Ctrl.
Rev.,
Caterpillar, Inc. Proj.,
F.R.W.D., A.M.T.,
P1 8,750 4.95%, 7/6/00, Ser. 91 8,750,000
---------------
18,698,992
</TABLE>
38 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
IOWA 0.6%
Sergeant Bluff Ind. Dev. Auth.,
Sioux City Brick & Tile Proj.,
F.R.W.D., A.M.T.,
NR $ 8,480 5.00%, 7/6/00, Ser. 96C $ 8,480,000
-------------------------------------------------------------------------------------
KANSAS 0.7%
Mission Kansas Multifam. Rev.,
Ref. Hsg., The Falls Apts.
Proj., F.R.W.D., A.M.T.
A1+* 9,350 4.94%, 7/6/00, Ser. 99 9,350,000
-------------------------------------------------------------------------------------
KENTUCKY 0.7%
Henderson Cnty. Ind. Dev. Rev.,
Eastern
Alloys of KY LLC Proj.,
F.R.W.D., A.M.T.,
A1+* 5,500 4.95%, 7/6/00, Ser. 99 5,500,000
Kentucky Hsg. Corp., Hsg. Rev.,
S.E.M.M.T., A.M.T.,
MIG1 5,000 4.40%, 12/1/00, Ser. 00D 5,000,000
---------------
10,500,000
-------------------------------------------------------------------------------------
LOUISIANA 3.1%
Calcasieu Parish Pub. Trust
Auth., Sngl. Fam. Mtge., A.M.T.,
MIG1 5,000 4.50%, 12/1/00, Ser. 00A 5,000,000
New Orleans Ind. Dev. Brd., 3700
Orleans LLC Proj., F.R.W.D.,
A.M.T.,
A1+* 14,000 4.97%, 7/6/00, Ser. 2000 14,000,000
Roaring Fork Municipal Prods.
LLC., F.R.W.D., A.M.T.,
VMIG1 14,590 5.02%, 7/6/00, Ser. 00-2 14,590,000
Shreveport Louisiana, Gen.
Oblig.,
NR 2,600 5.00%, 5/1/01, Ser. 99A 2,611,497
</TABLE>
See Notes to Financial Statements 39
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
W. Baton Rouge Parish Dist.
Pound3,
Dow Chemical Co. Proj.,
F.R.D.D., A.M.T.,
P1 $ 8,800 4.75%, 7/3/00, Ser. 94A $ 8,800,000
---------------
45,001,497
-------------------------------------------------------------------------------------
MARYLAND 2.2%
Anne Arundel Cnty.,
Baltimore Gas & Electric,
A.N.N.O.T.,
VMIG1 6,000 4.50%, 7/1/01, Ser. 84 6,000,000
Maryland St. Hlth. & High. Ed.
Facs. Auth.,
Univ. of Maryland Med. Sys.,
F.R.W.D.,
A-1* 11,600 4.75%, 7/5/00, Ser. 99 11,600,000
Maryland Econ. Dev. Corp.,
CHF-College Park LLC, F.R.W.D.,
VMIG1 6,000 4.90%, 7/6/00, Ser. 2000A 6,000,000
Roaring Fork Municipal Prods.
LLC., F.R.W.D., A.M.T.,
A1+* 7,550 5.02%, 7/6/00, Ser. 00-11 7,550,000
---------------
31,150,000
-------------------------------------------------------------------------------------
MASSACHUSETTS 1.4%
Mass. St. Hlth. & Ed. Facs. Auth.
Rev.,
Univ. Hospital, Prerefunded,
NR 6,000 7.25%, 7/1/00, Ser. C 6,120,000
Mass. St. Hsg. Fin. Agcy.,
Sngl. Fam. Hsg. Rev. Notes,
A.M.T.,
MIG1 7,500 4.90%, 6/1/01, Ser. C-1 7,500,000
Sngl. Fam. Hsg. Rev. Notes,
MIG1 6,105 4.85%, 6/1/01, Ser. C-2 6,105,000
---------------
19,725,000
-------------------------------------------------------------------------------------
MICHIGAN 2.3%
East Detroit Pub. Schs.,
S.A.A.N.,
NR 5,400 4.50%, 8/24/00, Ser. 2000 5,396,874
Michigan Mun. Bond Auth., Rev.
Notes,
SP-1+* 10,000 4.25%, 8/25/00, Ser. 98B-1 10,009,418
</TABLE>
40 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
Michigan Strategic Fund,
Dow Chemical Co. Proj.,
F.R.D.D., A.M.T.,
P1 $ 16,000 4.75%, 7/3/00, Ser. 99 $ 16,000,000
Michigan St. Hosp. Fin. Auth.
Rev.,
Botsford Oblig. Grp.,
NR 2,080 4.20%, 2/15/01, 98A 2,079,363
---------------
33,485,655
-------------------------------------------------------------------------------------
MINNESOTA 2.0%
Bloomington Port Auth. Tax Rev.,
Ref. Mall of America, F.R.W.D.
VMIG1 18,000 4.85%, 7/6/00, Ser. 99B 18,000,000
Dakota Cnty. Com. Dev. Agcy.,
Sngl. Fam. Mtge., Rev. Ref.,
A.M.T.,
SP1+* 7,500 4.30%, 4/1/01, Ser. 00C 7,500,000
Minneapolis Spec. Sch.
Dist. No. 1, Gen. Oblig.,
NR 2,900 5.00%, 2/1/01, Ser. 97 2,912,261
---------------
28,412,261
-------------------------------------------------------------------------------------
MISSISSIPPI 0.3%
Mississippi St. Lease Rev.,
Carlyle Cap. Mkt. Cert.,
NR 4,280 4.25%, 10/15/00, Ser. 99A 4,280,000
-------------------------------------------------------------------------------------
MISSOURI 2.1%
Kansas City Ind. Dev. Auth.
KC Air Cargo Svcs. Proj.,
F.R.W.D., A.M.T.,
A-1* 7,300 4.90%, 7/6/00, Ser. 00 7,300,000
Roaring Fork Municipal Prods.
LLC., F.R.W.D., A.M.T.,
A-1+* 22,530 5.02%, 7/6/00, Ser. OO3 22,530,000
---------------
29,830,000
</TABLE>
See Notes to Financial Statements 41
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
NEW JERSEY 1.8%
Jersey City, Sch. Promissory Notes,
MIG1 $ 20,100 4.50%, 3/2/01 $ 20,138,669
Montclair Township, B.A.N.,
NR 2,200 5.35%, 5/18/01 2,208,281
New Jersey Econ. Dev. Auth. Ref.
Rev.,
865 Centennial Ave. Proj.,
F.R.W.D., A.M.T.,
A1+* 3,000 4.92%, 7/6/00, Ser. 85 3,000,000
---------------
25,346,950
-------------------------------------------------------------------------------------
NEW MEXICO 0.8%
Roaring Fork Municipal Prods LLC,
F.R.W.D., A.M.T.,
A1+* 12,255 5.02%, 7/6/00, Ser. 00-1 12,255,000
-------------------------------------------------------------------------------------
NEW YORK 0.1%
New York Local Gov't. Ass't.
Corp.,
Mun. Secs. Trust Rcpts.,
F.R.D.D.,
A1+* 1,500 4.65%, 7/3/00, Ser. SGA59 1,500,000
-------------------------------------------------------------------------------------
NORTH CAROLINA 0.8%
North Carolina Ed. Fac. Fin.
Agcy. Rev., Warren Wilson Coll.,
F.R.W.D.,
CPS1 12,040 4.80%, 7/6/00, Ser. 98 12,040,000
-------------------------------------------------------------------------------------
OHIO 6.6%
Clinton Cnty. Hosp. Rev.,
Ohio Hosp. Cap. Fin., F.R.W.D.,
A1+* 28,000 4.85%, 7/5/00, Ser. 98 28,000,000
Franklin Cnty. Hosp. Rev., Sub.,
Doctors Ohio Hlth. Corp.,
F.R.W.D.,
VMIG1 9,800 4.83%, 7/6/00, Ser. 1998 9,800,000
Greene Cnty. Ltd., Tax Certs.,
MIG1 16,740 4.50%, 3/2/01, Ser. 2000A 16,772,117
Lorain Cnty., Elyria United
Methodist Vlge. Prog., F.R.W.D.,
A-1* 6,830 4.80%, 7/6/00, Ser. 99 6,830,000
</TABLE>
42 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
Medina Cnty. Hsg. Rev.,
Oaks at Medina Proj., F.R.W.D.,
NR $ 10,055 4.80%, 7/6/00 $ 10,055,000
Ohio Hsg. Fin. Agcy., Res. Mtge.,
F.R.W.D., M.E.R.L.O.T., A.M.T.,
VMIG1 5,000 4.94%, 7/5/00, Ser. 00AA 5,000,000
Multifam. Hsg. Ref.,
10 Wilmington Pl. Prog.,
F.R.W.D.,
A1+* 5,945 4.85%, 7/7/00, Ser. B 5,945,000
Res. Mtge., A.N.N.O.T., A.M.T.,
3.90%, 7/20/00, Ser. 117
(cost $11,910,000; purchased
A1+ 11,910D 8/17/99) 11,910,000
---------------
94,312,117
-------------------------------------------------------------------------------------
OKLAHOMA 0.8%
Muskogee Ind. Trust,
Muskogee Mall Proj., F.R.W.D.,
VMIG1 5,100 5.10%, 7/5/00, Ser. 85 5,100,000
Tulsa Pkg. Auth. Rev.,
Williams Ctr. Proj., S.E.M.M.T.,
VMIG1 6,700 4.75%, 11/15/00, Ser. 87A 6,700,000
---------------
11,800,000
-------------------------------------------------------------------------------------
OREGON 0.2%
Oregon St., Veterans Welfare,
MIG1 3,000 4.30%, 4/1/01, Ser. 79B 3,000,000
-------------------------------------------------------------------------------------
PENNSYLVANIA 4.4%
Dauphin Cnty. Gen. Auth. Rev.,
All Hlth. Pooled Fin. Prog.,
F.R.W.D.,
A1+* 10,000 4.85%, 7/5/00, Ser. B 10,000,000
Ed. & Hlth. Prog., F.R.W.D.,
VMIG1 32,660 4.85%, 7/6/00, Ser. 97 32,660,000
Emmaus Gen. Auth. Rev.,
Loan Prog., F.R.W.D.,
A-1* 20,000 4.85%, 7/6/00, Ser. 2000A 20,000,000
---------------
62,660,000
</TABLE>
See Notes to Financial Statements 43
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
SOUTH CAROLINA 2.2%
South Carolina Pub. Svcs. Auth.,
T.E.C.P.,
P1 $ 17,150 4.35%, 10/2/00 $ 17,150,000
Spartanburg Cnty. Sch. Dist. No.
7, B.A.N.,
MIG1 14,000 4.75%, 2/15/01, Ser. 2000 14,046,103
---------------
31,196,103
-------------------------------------------------------------------------------------
SOUTH DAKOTA 4.3%
Grant Cnty., Otter Tail Pwr. Co.
Proj., F.R.W.D.,
VMIG1 8,000 5.00%, 7/7/00, Ser. 1993 8,000,000
South Dakota Hsg. Dev. Auth.,
Homeownership Mtge.,
MIG1 5,315 3.40%, 7/7/00, Ser. 99E 5,315,000
MIG1 22,000 3.45%, 7/7/00, Ser. 99F, A.M.T. 22,000,000
MIG1 6,000 3.75%, 9/28/00, Ser. 99J 6,000,000
South Dakota Hlth. & Ed. Fac.
Auth.,
Sioux Valley Hosp. & Hlth. Sys.,
F.R.W.D.,
VMIG1 20,000 4.85%, 7/7/00, Ser. 2000 20,000,000
---------------
61,315,000
-------------------------------------------------------------------------------------
TENNESSEE 5.2%
Dickson Cnty., Renaissance
Learning Ctr. Rev., F.R.W.D.,
CPS1 16,000 4.80%, 7/5/00, Ser. 97 16,000,000
Morgan Keegan Mun. Prods. Inc.,
Trust Rcpts, F.R.W.D., A.M.T.
A1+* 18,810 5.07%, 7/6/00, Ser. 2000A 18,810,000
Sumner Cnty. Hlth. Ed. &
Hsg. Bd. Rev., Hosp.
Alliance Pooled, F.R.W.D.,
A1+* 40,000 4.90%, 7/6/00, Ser. 99A 40,000,000
---------------
74,810,000
</TABLE>
44 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
TEXAS 16.5%
Bexar Cnty. Hsg. Fin. Corp.,
Perrin Park Apt., F.R.W.D.,
A.M.T.,
VMIG1 $ 10,375 5.00%, 7/6/00, Ser. 96 $ 10,375,000
Brazos River Harbor Nav. Dist.
Rev.,
Dow Chemical Co. Proj.,
T.E.C.P.,
P1 15,900 4.25%, 7/12/00, Ser. 91 15,900,000
City of Houston, Wtr. & Swr.,
T.E.C.P.,
P1 10,400 4.40%, 8/17/00, Ser. A 10,400,000
Collin Cnty. Hsg. Fin. Corp.
Multifam.
Hsg. Rev., Huntington Apts.
Proj., F.R.W.D.,
A1+* 6,155 4.92%, 7/6/00, Ser. 96 6,155,000
Desoto Ind. Dev. Auth., Solar
Turbines Inc. Proj., F.R.W.D.,
P1 7,050 4.90%, 7/6/00, Ser. 2000 7,050,000
Edgemere-NW Sr. Hsg. Corp.,
F.R.W.D.,
A1+* 10,000 4.78%, 7/6/00, Ser. 99D 10,000,000
Guadalupe Blanco River Auth.,
The BOC Group, Inc., F.R.W.D.,
CPSI 10,000 4.80%, 7/6/00, Ser. 1993 10,000,000
North Central Texas Hlth. Fac.
Dev., Methodist Hosp. of Dallas,
T.E.C.P.,
VMIG1 37,800 4.85%, 8/8/00, Ser. 98 37,800,000
VMIG1 15,000 4.70%, 8/11/00, Ser. 98 15,000,000
San Antonio Elec. & Gas,
T.E.C.P.,
P1 10,000 4.38%, 10/5/00, Ser. A 10,000,000
San Antonio Wtr. Sys. Rev.,
F.R.W.D., M.E.R.L.O.T.,
VMIG1 10,420 4.89%, 7/5/00, Ser. 00VV 10,420,000
South Plains Hsg. Fin. Corp.,
Homeownership Rev.,
A.N.N.O.T., A.M.T.,
VMIG1 7,900 4.25%, 12/1/00, Ser. 00A 7,900,000
</TABLE>
See Notes to Financial Statements 45
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
Tarrant Cnty. Hlth. Fac. Dev.,
Adventist Hlth. Sys., F.R.W.D.,
VMIG1 $ 12,490 4.78%, 7/6/00, Ser. 96A $ 12,490,000
Texas St., T.R.A.N.,
MIG1 72,000 4.50%, 8/31/00, Ser. 1999A 72,029,131
---------------
235,519,131
-------------------------------------------------------------------------------------
UTAH 0.6%
Davis Cnty., Hsg. Auth. Rev.,
Fox Creek Apts., F.R.W.D.,
A-1* 4,240 4.80%, 7/5/00, Ser. 97A 4,240,000
Utah Cnty.,T.R.A.N.,
NR 4,000 4.75%, 12/28/00, Ser. 2000 4,010,544
---------------
8,250,544
-------------------------------------------------------------------------------------
VIRGINIA 0.3%
Virginia Hsg. Dev. Auth.,
Commonwealth Mtge., F.R.W.D.,
M.E.R.L.O.T., A.M.T.,
VMIG1 5,000 4.94%, 7/5/00, Ser. 00CC 5,000,000
-------------------------------------------------------------------------------------
WASHINGTON 1.7%
Washington Hsg. Fin. Comm.,
Mills Plains Crossing Proj.,
F.R.W.D.,
A1+* 5,900 5.10%, 7/4/00, Ser. 88 5,900,000
Washington St. Hlth. Care Fac.,
Sisters of St. Joseph of Peace,
F.R.W.D.,
VMIG1 17,800 4.75%, 7/6/00, Ser. 93 17,800,000
---------------
23,700,000
-------------------------------------------------------------------------------------
WISCONSIN 2.5%
Greenfield Sch. Dist.,
T.R.A.N.,
NR 4,000 4.25%, 9/29/00 4,004,065
Janesville Sch. Dist.,
T.R.A.N.,
NR 3,000 4.25%, 10/5/00 3,003,180
</TABLE>
46 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
<TABLE>
<CAPTION>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <C> <S> <C>
Milwaukee Redev. Auth., Historic
Third Ward Pkg., F.R.W.D.,
NR $ 4,290 4.65%, 7/6/00 $ 4,290,000
Sheboygan Sch. Dist., T.R.A.N.,
NR 5,000 4.10%, 8/30/00 5,002,691
Wausau Sch. Dist., T.R.A.N.,
NR 6,300 4.10%, 9/22/00 6,304,956
West Allis-West Milwaukee Sch.
Dist.,
T.R.A.N.,
MIG1 4,300 4.10%, 9/21/00 4,303,158
Wisconsin Hsg. Eco. Dev. Auth.,
Ownership Rev.,
3.90%, 10/5/00, Ser. 122
(cost $8,395,000; purchased
VMIG1 8,395D 10/7/99) 8,395,000
---------------
35,303,050
-------------------------------------------------------------------------------------
WYOMING 2.9%
Converse Cnty. Poll., Conv. Ref.,
Pacificorp, F.R.W.D.,
VMIG1 22,485 4.95%, 7/5/00, Ser. 92 22,485,000
Lincoln Cnty. Poll., Conv. Ref.,
Pacificorp,
VMIG1 19,000 4.90%, 7/5/00, Ser. 91 19,000,000
---------------
41,485,000
---------------
Total Investments 100.2%
(cost $1,431,483,194**) 1,431,483,194
Liabilities in excess of other
assets (0.2%) (2,395,736)
---------------
Net Assets 100% $ 1,429,087,458
---------------
---------------
</TABLE>
See Notes to Financial Statements 47
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2000 Cont'd.
------------------------------
(a) The following abbreviations are used in portfolio descriptions:
A.M.T.--Alternative Minimum Tax.
A.N.N.M.T.--Annual Mandatory Tender.
A.N.N.O.T.--Annual Option Tender.
B.A.N.--Bond Anticipation Note.
F.R.D.D.--Floating Rate (Daily) Demand Note(b).
F.R.W.D.--Floating Rate (Weekly) Demand Note(b).
M.E.R.L.O.T.--Municipal Exempt Receipt - Liquid Optional Tender.
S.A.A.N.--State Aid Anticipation Notes.
S.E.M.M.T.--Semi-Annual Mandatory Tender.
T.A.T.W.--Tax Anticipation Time Warrants.
T.E.C.P.--Tax Exempt Commercial Paper.
T.R.A.N.--Tax and Revenue Anticipation Note.
(b) For purposes of amortized cost valuation, the maturity date of Floating Rate
Demand Notes is considered to be the later of the next date on which the
security can be redeemed at par or the next date on which the rate of
interest is adjusted.
* Standard & Poor's rating.
** The cost for federal income tax purposes is substantially the same as for
financial reporting purposes.
D Indicates an illiquid security restricted as to resale. The aggregate cost of
such securities is $20,305,000. The aggregate value of $20,305,000 is
approximately 1.4% of net assets.
NR--Not Rated by Moody's or Standard & Poor's.
48 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
June 30,
2000
--------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at amortized cost which approximates market value $1,431,483,194
Cash 35,537
Receivable for investments sold 36,738,978
Receivable for Fund shares sold 17,151,389
Interest receivable 13,598,876
Prepaid expenses 16,551
--------------
Total assets 1,499,024,525
--------------
LIABILITIES
Payable for investments purchased 51,720,568
Payable for Fund shares repurchased 17,354,141
Management fee payable 527,503
Accrued expenses and other liabilities 254,286
Distribution fee payable 80,569
--------------
Total liabilities 69,937,067
--------------
NET ASSETS $1,429,087,458
--------------
--------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 14,290,875
Paid-in capital in excess of par 1,414,796,583
--------------
Net assets, June 30, 2000 $1,429,087,458
--------------
--------------
Net asset value, offering price and redemption price per share
($1,429,087,458 / 1,429,087,458 shares of beneficial
interest
($.01 par value) issued and outstanding) $1.00
--------------
--------------
</TABLE>
See Notes to Financial Statements 49
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Statement of Operations
<TABLE>
<CAPTION>
Year
Ended
June 30, 2000
<S> <C>
---------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned $56,539,257
-------------
Expenses
Management fee 6,557,570
Distribution fee 1,894,190
Transfer agent's fees 178,500
Reports to shareholders 74,000
Audit fee 28,000
Trustees' fees and expenses 22,000
Insurance expense 17,500
Legal fees and expenses 14,000
Miscellaneous 19,742
-------------
Total expenses 8,805,502
Less: custodian fee credit (Note 1) (60,117)
-------------
Net expenses 8,745,385
-------------
Net investment income 47,793,872
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $47,793,872
-------------
-------------
</TABLE>
50 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
2000 1999
----------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 47,793,872 $ 42,127,942
Net realized gain on investment
transactions -- 16,415
--------------- ---------------
Net increase in net assets resulting from
operations 47,793,872 42,144,357
--------------- ---------------
Dividends and distributions to shareholders
(Note 1) (47,793,872) (42,144,357)
--------------- ---------------
Fund share transactions (at $1 per share)
Net proceeds from shares subscribed 5,489,719,243 5,590,973,138
Net asset value of shares issued in
reinvestment of dividends and
distributions 47,791,827 42,144,357
Cost of shares reacquired (5,585,155,129) (5,489,371,232)
--------------- ---------------
Net increase (decrease) in net assets from
Fund share transactions (47,644,059) 143,746,263
--------------- ---------------
Total increase (decrease) (47,644,059) 143,746,263
NET ASSETS
Beginning of year 1,476,731,517 1,332,985,254
--------------- ---------------
End of year $ 1,429,087,458 $ 1,476,731,517
--------------- ---------------
--------------- ---------------
</TABLE>
See Notes to Financial Statements 51
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Financial Highlights
<TABLE>
<CAPTION>
Year Ended
June 30,
2000
<S> <C>
--------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.000
Net investment income and net realized gains .032
Dividends and distributions to shareholders (.032)
----------
Net asset value, end of year $ 1.000
----------
----------
TOTAL RETURN(a) 3.19%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $1,429,087
Average net assets (000) $1,515,352
Ratios to average net assets:
Expenses, including distribution fees .58%
Expenses, excluding distribution fees .46%
Net investment income 3.15%
</TABLE>
------------------------------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
52 See Notes to Financial Statements
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------------------------------------------
1999 1998 1997 1996
-------------------------------------------------------
<S> <C> <C> <C>
$ 1.000 $ 1.000 $ 1.000 $ 1.000
0.027 0.031 0.030 0.031
(0.027) (0.031) (0.030) (0.031)
---------- ---------- ---------- ----------
$ 1.000 $ 1.000 $ 1.000 $ 1.000
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
2.77% 3.16% 3.05% 3.12%
$1,476,732 $1,332,985 $1,129,513 $1,156,935
$1,549,367 $1,279,188 $1,181,084 $1,134,257
.59% .60% .64% .66%
.46% .47% .51% .54%
2.72% 3.11% 3.00% 3.06%
</TABLE>
See Notes to Financial Statements 53
<PAGE>
COMMAND Account COMMAND Tax-Free Fund
Report of Independent Accountants
To the Shareholders and Trustees of
COMMAND Tax-Free Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of COMMAND Tax-Free Fund (the 'Fund')
at June 30, 2000, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States.
These financial statements and financial highlights (hereafter referred to as
'financial statements') are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at June 30, 2000 by correspondence with the custodian and brokers,
provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
August 18, 2000
54 See Notes to Financial Statements
<PAGE>
COMMAND Account
Notes to Financial Statements
COMMAND Money Fund, COMMAND Government Fund and COMMAND Tax-Free Fund
(each a 'Fund' and collectively, the 'Funds') are each registered under the
Investment Company Act of 1940 as an open-end, diversified management investment
company whose shares are offered exclusively to participants in the Prudential
Securities COMMAND Account Program of Prudential Securities Incorporated
(Prudential Securities). The COMMAND Money Fund seeks high current income,
preservation of capital and maintenance of liquidity by investing in a
diversified portfolio of money market instruments maturing in 13 months or less.
The COMMAND Government Fund seeks high current income, preservation of capital
and maintenance of liquidity by investing in a portfolio of U.S. government
securities maturing in 13 months or less. The COMMAND Tax-Free Fund seeks high
current income that is exempt from federal income taxes, consistent with the
preservation of capital and maintenance of liquidity. The Fund invests in a
diversified portfolio of short-term, tax-exempt securities with maturities of 13
months or less that are issued by states, municipalities and their agencies (or
authorities). Some securities may be subject to the federal alternative minimum
tax (AMT). The Funds invest in a portfolio of money market instruments whose
ratings are within the two highest ratings categories by a nationally recognized
statistical rating agency or, if not rated, are of comparable quality. The
ability of the issuers of the securities held by the Funds to meet their
obligations may be affected by economic and/or political developments in a
specific industry, state or region.
Note 1. Accounting Policies
The following is a summary of significant generally accepted accounting policies
followed by the Funds in the preparation of their financial statements.
Securities Valuation: Portfolio securities are valued at amortized
cost, which approximates market value. The amortized cost method involves
valuing a security at its cost on the date of purchase and thereafter assuming a
constant amortization to maturity of any discount or premium. If the amortized
cost method is determined not to represent fair value, the value shall be
determined by or under the direction of the Board of Trustees. All securities
are valued as of 4:30 p.m., New York time. The Funds may hold up to 10% of their
net assets in illiquid securities, including those which are restricted as to
disposition under securities law ('restricted securities'). None of the issues
of restricted securities held by the Funds at June 30, 2000 include registration
rights under which the Fund may demand registration by the issuer.
Repurchase Agreements: In connection with transactions in repurchase
agreements, it is the Funds' policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, take
possession of the
55
<PAGE>
COMMAND Account
Notes to Financial Statements Cont'd.
underlying collateral securities, the value of which exceeds the principal
amount of the repurchase transaction, including accrued interest. To the extent
that any repurchase agreement exceeds one business day, the value of collateral
is marked to market on a daily basis to ensure adequacy of the collateral. If
the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Funds may be delayed or limited.
Securities Transactions and Investment Income: Securities transactions
are recorded on the trade date. Realized gains and losses on sales of
investments are calculated on the identified cost basis. Interest income is
recorded on the accrual basis. Expenses are recorded on the accrual basis, which
may require the use of certain estimates by management. Net investment income
for dividend purposes includes accrued interest and amortization of premiums and
discounts, plus or minus any gains or losses realized on sales of portfolio
securities, less the estimated expenses of the Fund applicable to the dividend
period.
Federal Income Taxes: Each Fund intends to continue to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net income to its shareholders.
Therefore, no federal income tax provision is required. The cost of portfolio
securities for federal income tax purposes is substantially the same as for
financial reporting purposes.
Dividends: Each Fund declares all of its net investment income as
dividends daily to its shareholders of record at the time of such declaration.
Dividends are reinvested daily into additional full and fractional shares of the
respective Fund at the net asset value per share determined on the date of
declaration.
Custody Fee Credits: The COMMAND Tax-Free Fund has an arrangement with
its custodian bank, whereby uninvested money earns credits which reduce the fees
charged by the custodian.
Note 2. Agreements
Each Fund has a management agreement with Prudential Investments Fund Management
LLC (PIFM). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PIFM has entered into a Subadvisory Agreement with The Prudential
Investment Corporation ('PIC'). 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
56
<PAGE>
COMMAND Account
Notes to Financial Statements Cont'd.
pursuant to the Management Agreement and supervises the Subadviser's performance
of such services. PIFM pays for the services of PIC, the cost of the
subadviser's services, the compensation of officers of the Funds, occupancy and
certain clerical and bookkeeping costs of the Funds. The Funds bear all other
costs and expenses.
The management fee paid to PIFM is computed daily and payable monthly on
the following basis:
<TABLE>
<CAPTION>
Average Daily COMMAND COMMAND COMMAND
Net Assets Money Government Tax-Free
--------------------- -------- ----------- --------
<S> <C> <C> <C>
First $500 million .500% .400% .500%
Second $500 million .425% .400% .425%
Third $500 million .375% .375% .375%
Excess of $1.5
billion .350% .375% .375%
</TABLE>
Effective January 1, 2000, PIC is paid by PIFM on the following basis
(computed daily and payable monthly):
<TABLE>
<CAPTION>
Average Daily COMMAND COMMAND COMMAND
Net Assets Money Government Tax-Free
--------------------- -------- ----------- --------
<S> <C> <C> <C>
First $500 million .250% .200% .250%
Second $500 million .191% .200% .191%
Third $500 million .150% .169% .150%
Excess of $1.5
billion .123% .169% .150%
</TABLE>
Prior to January 1, 2000, PIC was reimbursed by PIFM for reasonable costs
and expenses incurred in furnishing investment advisory services.
Each Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS') which acts as the distributor of the shares of
each Fund. Each Fund compensates PIMS for distributing and servicing each Fund's
shares, pursuant to the plan of distribution at an annual rate of .125 of 1% of
the average daily net assets of each Fund's shares. The distribution fees are
accrued daily and payable monthly.
PIFM, PIC and PIMS are wholly owned subsidiaries of The Prudential
Insurance Company of America.
57
<PAGE>
COMMAND Account
Notes to Financial Statements Cont'd.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC (PMFS), a wholly owned subsidiary of PIFM,
serves as the Funds' transfer agent. During the year ended June 30, 2000 the
Funds incurred fees for the services of PMFS of approximately:
<TABLE>
<S> <C>
COMMAND Money $4,181,400
COMMAND Government $ 101,100
COMMAND Tax-Free $ 178,200
</TABLE>
As of June 30, 2000, the following amounts were due to PMFS from the
Funds:
<TABLE>
<S> <C>
COMMAND Money $ 370,400
COMMAND Government $ 8,300
COMMAND Tax-Free $ 14,700
</TABLE>
58
<PAGE>
COMMAND Account
Federal Income Tax Information (Unaudited)
COMMAND TAX-FREE FUND:
We are required by the Internal Revenue Code to advise you within 60 days
of the COMMAND Tax-Free Fund's fiscal year-end (June 30, 2000) as to the federal
tax status of dividends and distributions paid by the Fund during such fiscal
year. Accordingly, we are advising you that for the year ended June 30, 2000,
dividends paid from net investment income totaling $.032 per share were all
federally tax-exempt interest dividends.
COMMAND GOVERNMENT FUND AND COMMAND MONEY FUND:
IMPORTANT NOTICE FOR CERTAIN SHAREHOLDERS
We are required by Massachusetts, Missouri and Oregon to inform you that
dividends which have been derived from interest on federal obligations are not
taxable to shareholders providing the mutual fund meets certain requirements
mandated by the respective state's taxing authorities. We are pleased to report
that 58% and 2% of the dividends paid by the COMMAND Government Fund and COMMAND
Money Fund, respectively, qualify for such deduction.
For more detailed information regarding your state and local taxes, you
should contact your tax advisor or the state/local taxing authorities.
59
<PAGE>
Prudential Securities Command Funds
www.prudential.com (800) 225-1852
Prudential Mutual Funds
Prudential offers a broad range of mutual funds designed to meet your
individual needs. For information about these funds, contact your financial
adviser or call us at (800) 225-1852. Read the prospectus carefully before you
invest or send money.
STOCK FUNDS
Large Capitalization Stock Funds
Prudential 20/20 Focus Fund
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Stock Index Fund
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund
Strategic Partners Focused Growth Fund
Target Funds
Large Capitalization Growth Fund
Large Capitalization Value Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Growth Fund
Small- to Mid-Capitalization Stock Funds
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Prudential Small Company Fund, Inc.
Prudential Tax-Managed Small-Cap Fund, Inc.
Prudential U.S. Emerging Growth Fund, Inc.
Target Funds
Small Capitalization Growth Fund
Small Capitalization Value Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Equity Opportunity Fund
Sector Stock Funds
Prudential Natural Resources Fund, Inc.
Prudential Real Estate Securities Fund
Prudential Sector Funds, Inc.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund
Global/International Stock Funds
Global Utility Fund, Inc.
Prudential Europe Growth Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World Fund, Inc.
Prudential Global Growth Fund
Prudential International Value Fund
Prudential Jennison International Growth Fund
Target Funds
International Equity Fund
BALANCED/ALLOCATION FUNDS
Prudential Diversified Funds
Conservative Growth Fund
Moderate Growth Fund
High Growth Fund
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced Fund
BOND FUNDS
Taxable Bond Funds
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
Short-Intermediate Term Series
Prudential High Yield Fund, Inc.
Prudential High Yield Total Return Fund, Inc.
Prudential Short-Term Corporate Bond Fund, Inc.
Income Portfolio
Prudential Total Return Bond Fund, Inc.
Target Funds
Total Return Bond Fund
Tax-Free Bond Funds
Prudential California Municipal Fund
California Series
California Income Series
Prudential Municipal Bond Fund
High Income Series
Insured Series
Prudential Municipal Series Fund
Florida Series
Massachusetts Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.
Global/International Bond Funds
Prudential Global Total Return Fund, Inc.
Prudential International Bond Fund, Inc.
MONEY MARKET FUNDS
Taxable Money Market Funds
Cash Accumulation Trust
Liquid Assets Fund
National Money Market Fund
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series
Prudential MoneyMart Assets, Inc.
Prudential Special Money Market Fund, Inc.
Money Market Series
Tax-Free Money Market Funds
Prudential California Municipal Fund
California Money Market Series
Prudential Municipal Series Fund
Connecticut Money Market Series
Massachusetts Money Market Series
New Jersey Money Market Series
New York Money Market Series
Prudential Tax-Free Money Fund, Inc.
Other Money Market Funds
COMMAND Government Fund
COMMAND Money Fund
COMMAND Tax-Free Fund
<PAGE>
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Visit Prudential's web site at:
http://www.prudential.com
Trustees
Delayne Dedrick Gold
Robert F. Gunia
Robert E. LaBlanc
David R. Odenath, Jr.
Robin B. Smith
Langdon R. Stevenson
Stephen Stoneburn
John R. Strangfeld
Nancy H. Teeters
Clay T. Whitehead
Officers
John R. Strangfeld, President
Robert F. Gunia, Vice President
David R. Odenath, Jr., Vice President
Grace C. Torres, Treasurer
Robert C. Rosselot, 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
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Cusip Numbers 20050F103
20050R107
20050D108
CFA
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