ANNUAL REPORT December 31,1994
Prudential
Equity Fund
(ICON)
(LOGO)
<PAGE>
PRUDENTIAL
EQUITY FUND AT A GLANCE
The Fund seeks long-term growth of capital by investing primarily in common
stocks of major, established corporations.
<TABLE>
Cumulative Total Returns1
As of 12/31/94
<CAPTION>
One Year Five Year Since Inception2
<S> <C> <C> <C>
Class A +2.4% N/A +79.5%
Class B +1.6 +64.1% +538.5
Class C N/A N/A +0.01
Lipper Growth Fund Avg.3 -2.2 +53.0 +428.1
S&P 500 Index* +1.3 +51.8 +564.5
<CAPTION>
Average Annual Total Returns1
As of 12/31/94
One Year Five Year Since Inception2
<S> <C> <C> <C>
Class A -2.7% N/A +11.4%
Class B -3.4 +10.3% +15.6
Class C N/A N/A -0.1
</TABLE>
Past performance is not indicative of future results. Principal and
investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
1 Source: Prudential Mutual Fund Management Inc. and Lipper Analytical
Services, Inc. The cumulative total returns do not take into account
sales charges. The average annual returns do take into account applicable
sales charges. The Fund charges a maximum front-end sales load of 5% for
Class A shares and a contingent deferred sales charge (CDSC) of 5%, 4%,
3%, 2%, 1% and 1% for six years, for Class B shares. Class C shares have
a 1% CDSC for one year. Beginning in February 1995, Class B shares will
automatically convert to Class A shares on a quarterly basis, after
approximately seven years.
2 Inception dates: 1/22/90 Class A; 3/15/82 Class B; 8/1/94 Class C.
3 Lipper growth fund averages include 481 funds for one year, 226 funds
for five years and 195 funds since inception of the Class B shares
on 3/15/82.
* The S&P 500 is a weighted index comprised of 500 stocks, which provides
a broad indicator of stock price movements.
<PAGE>
FIVE LARGEST HOLDINGS
<TABLE>
<CAPTION>
% of Total
As of 12/31/94 Portfolio
1. Scott Paper 4.9%
Forest products
2. Digital Equipment Corp. 3.4%
Computer hardware
3. Tandy Corp. 3.0%
Electronics retailer
4. Baxter International Inc. 2.5%
Drugs & medical supplies
5. Societe Nationale 2.4%
ELF Aquitaine (ADR)
Oil & gas exploration/production
UNDERSTANDING
PERFORMANCE
Historical Investment Results represent the cumulative total returns for
a specified period. These returns assume the reinvestment of dividends and
distributions but do not take into account the applicable sales charges.
Average Annual Total Returns are not actual yearly results but even out
performance so that investors can compare different funds on an equal
basis. These returns take into account sales charges and would produce
the same results as the historic total returns for the same period if
performance had been constant.
GROWTH OF AN ASSUMED
INVESTMENT OF $10,000 IN THE
PRUDENTIAL EQUITY FUND
Class A
(GRAPH)
from inception on
1/22/90 through 12/31/94
The above chart represents historical performance of Class A shares and
assumes a front-end sales load of 5%. The net amount invested, after
taking into account the front-end sales load, was $9,500.
Class B
(GRAPH)
from inception on
3/15/82 through 12/31/94
The above chart represents historical performance of Class B shares and
does not assume the effects of a contingent deferred sales charge. (Class
B shares are subject to a CDSC of 5%, 4%, 3%, 2%, 1% and 1% during the
first six years.)
Key
/ / Value of shares initially purchased plus shares acquired through
reinvestment of all dividends and distributions.
// Value of shares initially purchased with all distributions taken in cash.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate and an investor's shares may be worth more
or less than the original amount when redeemed. Performance data for Class
C shares is not included since the share class commenced operations less
than one year ago.
<PAGE>
Letter to Shareholders
February 1, 1995
Dear Shareholder:
The past year was difficult for U.S. stock market investors, who watched
the Federal Reserve raise short-term interest rates six times in an effort
to slow growth and keep inflation under control. Stock prices were generally
shaky all year as a result, and stumbled in the fourth quarter as investors
waited nervously for the new year. We're pleased to announce that the
Prudential Equity Fund performed well compared to its peers in this rocky
market, as reported by Lipper Analytical Services, Inc.
1994 Investment Results
Total Returns
(GRAPH)
Source: Prudential Investment Corporation. For purposes of comparison only.
Bonds as measured by the Lehman Brothers government/corporate aggregate.
U.S. stocks as measured by the S&P 500 Index. Global stocks as measured
by the Morgan Stanley Capital International World Index. U.S. money markets
as measured by IBC/Donoghue's all taxable funds average.
Using Cash As a Cushion.
For most of the year, your Fund maintained a large cash position relative
to its peers, which acted as a cushion during stock volatility and helped
it perform better than the broad stock market and comparable growth-oriented
mutual funds.
However, toward year-end we began to put cash to work in the Fund. The U.S.
market's decline had created value opportunities in several sectors,
particularly in finance and retail stocks. In line with our value
management style, we looked for stocks of fundamentally sound companies
with prices low in relation to book value, potential earnings and cash
flow. The idea is that over time, other investors will also realize the
discrepancy between the stocks' low prices and their higher intrinsic
values, and bid up the price of such stocks.
As of December 31, 1994, our cash position stood at 7%, its lowest level
in 24 months.
-3-
<PAGE>
Where the Fund Invested.
Banking on Financial stocks... The Fund currently holds a large position
in financial stocks, such as insurance companies, financial services firms
and banks. As of December 31, 1994, financial stocks accounted for 26% of
the Fund.
We believe these stocks, hard hit by rising rates in 1994, now offer many
outstanding value investment opportunities. During 1994, we added to many
of our top finance holdings, including insurance companies like Chubb and
The Equitable, financial services firms such as American Express and Dean
Witter Discover, and banks such as Chase Manhattan and Bank of New York.
Retail Stocks... In the fourth quarter we added to holdings of inexpensive
stocks in the retail industry, including Dillard Department Stores and
K-Mart, on the hopes that recent decisions to concentrate on their core
retail businesses would aid profitability going forward.
Boosting Energy Stocks... Also, we continue to maintain a significant
position in energy stocks, which we believe will benefit from increased
worldwide economic activity. These include oil companies Atlantic
Richfield and ELF Aquitaine, a French oil company recently privatized
by the French government. (See the "Portfolio of Investments" for the
number of shares owned at year end.)
Some of the Fund's other energy industry holdings helped its performance.
During the second half of the year, we eliminated our position in two
energy stocks which we thought had reached their full valuations. We
sold our holdings of British Petroleum and Royal Dutch Petroleum after
good performance from each.
The Fund had some underperformers as well. Spanish telephone company
Telefonica de Espana was hurt by its association with several Latin
American utilities after the Mexican government's devaluation of the
peso upset stocks in that region. The stock lost 10% during the year.
We continue to believe, however, that the firm is fundamentally sound
and its stock relatively inexpensive, with good prospects going forward
in both its Spanish and Latin American operations. Other disappointing
holdings included: Sprint, down 20%, and Continental, which lost 31%.
On the Hill:
In 1995, Congress is set to consider an initiative that would restore
full income tax deductibility for individual retirement account
contributions for middle-income wage earners. In addition, Congress
will also debate creation of a new tax-deferred savings account, called
"the American Dream Savings Account." Prudential Mutual Funds supports
both of these proposals, and we urge you to share your own opinion with
your Congressional representatives. We will keep you updated on the
proposals as they make their way through the legislative process.
-4-
<PAGE>
Fund Update:
Beginning in February 1995, Class B shareholders should begin to notice a
change in their fund holdings. That's when Class B shares will begin to
convert to Class A shares, on a quarterly basis, approximately seven years
after purchase. As you may know, Class A shares generally carry lower
annual distribution expenses than Class B shares. Accordingly, after
conversion, you will earn higher total returns on your investment than
you would have as a Class B shareholder. This conversion will be
processed automatically and won't require any further action on your part.
Outlook: Buying Into 1995.
Despite market volatility in 1994, we remain optimistic that 1995 will be
a good year for U.S. stocks. We expect investor confidence to return once
investors are convinced U.S. interest rates have stabilized and corporate
earnings have remained strong. In fact, it appears recent market volatility
has created many excellent opportunities for funds like the Prudential
Equity Fund, that are managed with a value investment style. We expect
to put the bulk of our cash to work in 1995 as we attempt to take advantage
of some of those opportunities for our shareholders.
Thank you for choosing the Prudential Equity Fund for your stock investment.
Sincerely,
Lawrence C. McQuade
President
Thomas R. Jackson
Portfolio Manager
-5-
<PAGE>
PORTFOLIO Q&A
(PICTURE)
Tom Jackson
Media Mentions: The Prudential Equity Fund was featured in a
listing in Worth Financial Magazine in November 1994. In addition,
look for interviews with portfolio manager Tom Jackson in Barron's
on November 14, 1994 and December 12, 1994.
Q: Why have you decided it's a good time to put your cash to work in
the stock market?
A: In the current market I see many attractively priced stocks
selling at price-to-earnings multiples that I think make them bargains.
Q: Why do you think so many of those bargains are found in the
Finance sector?
A: Money and credit are the raw materials for financial service
products and rising interest rates are viewed by the market as rising
costs which may negatively impact the profitability of the companies
in these businesses. At current prices, I believe that these rates
are largely discounted. In the meantime, an aging population with
increased savings needs combined with the globalization of finance
provides attractive opportunities for growth in a broad array of
financial services.
Q: What do you look for to signal a company is taking steps to
improve its stock price?
A: There are many clues a company with sound fundamentals may
be taking steps to get back on track. Replacing poor management,
restructuring to increase competitiveness, selling an unprofitable
old business or acquiring a profitable new one, or introducing an
exciting new product.
Q: How long does it take for a stock to reach its true value?
A: Patience is a virtue. A stock's price may be down temporarily
for legitimate reasons, while the company is taking steps necessary
to turn things around. It's important to be patient and disciplined
in the meantime and to stick to your strategy while you wait for the
price to appreciate. If the market provides the opportunity to buy
the business at a significant discount to its true worth, the buyer
can afford to be a patient holder. In the meantime, high portfolio
turnover is a negative for the investor. Trading involves commissions
which are a cost, and to the degree that gains are realized, taxes
must be paid.
-6-
<PAGE>
PRUDENTIAL EQUITY FUND, INC. Portfolio of Investments
December 31, 1994
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--93.0%
Common Stocks--91.9%
Aerospace/Defense--3.5%
207,800 Lockheed Corp............... $ 15,091,475
870,000 Loral Corp.................. 32,951,250
500,000 United Technologies Corp.... 31,437,500
------------
79,480,225
------------
Automobiles & Trucks--4.6%
1,000,000 Chrysler Corp............... 49,000,000
800,000 Ford Motor Co............... 22,400,000
600,000 General Motors Corp......... 25,350,000
404,800 Navistar International
Corp.*.................... 6,122,600
------------
102,872,600
------------
Banks & Financial Services--13.0%
1,800,000 American Express Co......... 53,100,000
800,000 American General Corp....... 22,600,000
700,000 Bank of New York Co.,
Inc....................... 20,300,000
500,000 BankAmerica Corp............ 19,750,000
600,000 Chase Manhattan Corp........ 20,625,000
600,000 Comerica, Inc............... 14,625,000
1,000,000 Dean Witter Discover &
Co........................ 33,875,000
177,000 First America Bank Corp..... 5,310,000
1,000,000 Great Western Financial
Corp...................... 16,000,000
800,000 Lehman Brothers Holdings,
Inc....................... 11,800,000
292,505 Mellon Bank Corp............ 8,957,965
256,500 Mercantile Bankshares
Corp...................... 5,033,812
250,000 Morgan (J.P.) & Co., Inc.... 14,000,000
300,000 NationsBank Corp............ 13,537,500
225,000 Republic New York Corp...... 10,181,250
600,000 Salomon, Inc................ 22,500,000
------------
292,195,527
------------
Chemicals--1.7%
555,500 IMC Fertilizer Group,
Inc....................... 24,025,375
500,000 Wellman, Inc................ 14,125,000
------------
38,150,375
------------
Commercial Services--0.4%
600,000 AAR Corp.................... $ 8,025,000
------------
Computer Hardware--9.5%
800,000 Amdahl Corp................. 8,800,000
800,000 Comdisco, Inc............... 18,500,000
2,300,000 Digital Equipment Corp.*.... 76,475,000
412,900 Gerber Scientific, Inc...... 5,367,700
150,000 Hewlett-Packard Co.......... 14,981,250
300,000 International Business
Machines Corp............. 22,050,000
1,368,300 Tandy Corp.................. 68,586,038
------------
214,759,988
------------
Construction & Housing--0.6%
550,000 Centex Corp................. 12,512,500
------------
Diversified Consumer Products--5.2%
400,000 Eastman Kodak Co............ 19,100,000
750,000 Gibson Greetings, Inc....... 11,062,500
500,000 ITT Corp.................... 44,312,500
500,000 Loews Corp.................. 43,437,500
------------
117,912,500
------------
Drugs & Medical Supplies--3.0%
2,000,000 Baxter International,
Inc....................... 56,500,000
400,000 Upjohn Co................... 12,300,000
------------
68,800,000
------------
Electric Power--0.9%
170,000 American Electric Power,
Inc....................... 5,588,750
570,000 General Public Utilities
Corp...................... 14,962,500
------------
20,551,250
------------
Electronics--1.3%
300,000 Avnet, Inc.................. 11,100,000
15,000 Harris Computer Systems,
Inc....................... 183,750
300,000 Harris Corp................. 12,750,000
145,000 Varian Associates, Inc...... 5,075,000
------------
29,108,750
------------
</TABLE>
-7- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL EQUITY FUND, INC.
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Energy Equipment & Services--0.7%
500,000 BJ Services Co.*............ $ 8,437,500
1,300,000 Noram Energy Corp........... 6,987,500
------------
15,425,000
------------
Forest Products--6.9%
400,000 International Paper Co...... 30,150,000
550,000 James River Corp. of
Virginia.................. 11,137,500
125,000 Rayonier, Inc............... 3,812,500
1,600,000 Scott Paper Co.............. 110,600,000
------------
155,700,000
------------
Hospitals--4.6%
649,700 American Medical Holdings,
Inc.*..................... 15,674,013
39,400 Beverly Enterprises,
Inc.*..................... 566,375
400,000 Columbia Healthcare Corp.... 14,600,000
800,000 Foundation Health Corp.*.... 24,800,000
459,500 Hillhaven Corp.*............ 9,764,375
2,665,000 National Medical
Enterprises, Inc.*........ 37,643,125
------------
103,047,888
------------
Insurance--13.3%
1,000,000 Alexander & Alexander
Services, Inc............. 18,500,000
600,000 Chubb Corp.................. 46,425,000
500,000 Citizens Corp............... 8,500,000
2,200,000 Continental Corp............ 41,800,000
406,600 Emphesys Financial Group,
Inc....................... 12,909,550
1,132,700 First Colony Corp........... 25,344,162
127,100 John Alden Financial
Corp...................... 3,654,125
900,828 Old Republic International
Corp...................... 19,142,594
255,500 Providian Corp.............. 7,888,563
700,000 SAFECO Corp................. 36,400,000
350,000 St. Paul Companies, Inc..... 15,662,500
1,153,800 The Equitable Companies,
Inc....................... 20,912,625
700,000 Travelers Corp.............. 22,750,000
1,461,900 Western National Corp....... 18,821,963
------------
298,711,082
------------
Non - Ferrous Metals--3.0%
250,000 Alumax Inc.*................ $ 7,093,750
300,000 Aluminum Company of
America................... 25,987,500
122,750 AMAX Gold, Inc.............. 736,500
1,293,000 Cyprus Minerals Co.......... 33,779,625
------------
67,597,375
------------
Oil & Gas Exploration/Production--7.0%
300,000 Amerada Hess Corp........... 13,687,500
200,000 Atlantic Richfield Co....... 20,350,000
1,100,000 Occidental Petroleum
Corp...................... 21,175,000
1,500,000 Oryx Energy Co.............. 17,812,500
1,530,130 Societe Nationale Elf
Aquitaine
(ADR)(France)*............ 53,937,083
717,640 Total SA, (ADR) (France)*... 21,170,380
504,400 Union Texas Petroleum
Holdings, Inc............. 10,466,300
------------
158,598,763
------------
Retail--6.0%
119,700 Dayton-Hudson Corp.......... 8,468,775
1,100,000 Dillard Department Stores,
Inc....................... 29,425,000
700,000 Federated Department Stores,
Inc.*..................... 13,475,000
2,000,000 K-Mart Corp................. 26,000,000
500,000 Petrie Stores Corp.......... 11,187,500
1,391,900 U.S. Shoe Corp.............. 26,098,125
1,100,000 Waban, Inc.*................ 19,525,000
------------
134,179,400
------------
Specialty Chemicals--0.9%
388,200 Eastman Chemical Co.*....... 19,604,100
100,000 Witco Corp.................. 2,462,500
------------
22,066,600
------------
Steel--0.4%
500,000 Bethlehem Steel Corp.*...... 9,000,000
------------
</TABLE>
-8- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL EQUITY FUND, INC.
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Telecommunications--3.5%
1,446,500 Sprint Corp................. $ 39,959,563
1,100,000 Telefonica de Espana, S.A.,
(ADR) (Spain)............. 38,637,500
--------------
78,597,063
--------------
Transportation--1.9%
1,000,000 OMI Corp.................... 6,625,000
550,000 Overseas Shipholding Group,
Inc....................... 12,650,000
1,200,000 Southern Pacific Rail
Corp...................... 21,750,000
--------------
41,025,000
--------------
Total common stocks
(cost $1,820,818,524)..... 2,068,316,886
--------------
Preferred Stocks--1.1%
4,000,000 RJR Nabisco Holdings Corp.
Conv. Pfd. Stock
(cost $25,999,617)........ 24,000,000
--------------
Total long-term investments
(cost $1,846,818,141)..... 2,092,316,886
<CAPTION>
Principal
Amount
(000) SHORT-TERM INVESTMENT--7.1%
- ---------
<C> <S> <C>
Repurchase Agreement
$160,417 Joint Repurchase Agreement
Account, 5.82%, due 1/3/95
(cost $160,417,000; Note
5)........................ 160,417,000
--------------
Total Investments--100.1%
(cost $2,007,235,141; Note
4)........................ 2,252,733,886
Liabilities in excess of
other
assets--(0.1%).............. (2,582,210)
--------------
Net Assets--100%............ $2,250,151,676
--------------
--------------
</TABLE>
- ---------------
* Non-income producing security.
ADR--American Depository Receipt.
-9- See Notes to Financial Statements.
<PAGE>
PRUDENTIAL EQUITY FUND, INC.
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
Assets December 31, 1994
-----------------
<S> <C>
Investments, at value (cost $2,007,235,141)........................................... $ 2,252,733,886
Cash.................................................................................. 389,193
Dividends and interest receivable..................................................... 4,954,478
Receivable for Fund shares sold....................................................... 4,738,239
Receivable for investments sold....................................................... 351,460
Deferred expenses and other assets.................................................... 18,574
-----------------
Total assets...................................................................... 2,263,185,830
-----------------
Liabilities
Payable for Fund shares reacquired.................................................... 7,690,551
Payable for investments purchased..................................................... 2,191,029
Distribution fee payable.............................................................. 1,685,248
Management fee payable................................................................ 868,456
Accrued expenses...................................................................... 583,373
Deferred Directors' fees.............................................................. 15,497
-----------------
Total liabilities................................................................. 13,034,154
-----------------
Net Assets............................................................................ $ 2,250,151,676
-----------------
-----------------
Net assets were comprised of:
Common stock, at par................................................................ $ 1,699,555
Paid-in capital in excess of par.................................................... 1,945,905,351
-----------------
1,947,604,906
Undistributed net investment income................................................. 47,689,237
Accumulated net realized gain on investments........................................ 9,358,788
Net unrealized appreciation on investments.......................................... 245,498,745
-----------------
Net assets, December 31, 1994......................................................... $ 2,250,151,676
-----------------
-----------------
Class A:
Net asset value and redemption price per share
($276,411,893 / 20,881,953 shares of common stock issued and outstanding)......... $13.24
Maximum sales charge (5.00% of offering price)...................................... .70
-----------------
Maximum offering price to public.................................................... $13.94
-----------------
-----------------
Class B:
Net asset value, offering price and redemption price per share
($1,970,579,538 / 148,834,923 shares of common stock issued and outstanding)...... $13.24
-----------------
-----------------
Class C:
Net asset value, offering price and redemption price per share
($3,160,245 / 238,684 shares of common stock issued and outstanding).............. $13.24
-----------------
-----------------
</TABLE>
See Notes to Financial Statements.
-10-
<PAGE>
<PAGE>
PRUDENTIAL EQUITY FUND, INC.
Statement of Operations
<TABLE>
<CAPTION>
Year Ended
December 31,
Net Investment Income 1994
-----------------
Income
<S> <C>
Dividends (net of foreign
withholding taxes of $808,941).... $42,973,993
Interest............................ 13,484,768
------------
Total income...................... 56,458,761
------------
Expenses
Distribution fee--Class A........... 636,490
Distribution fee--Class B........... 19,019,918
Distribution fee--Class C........... 7,642
Management fee...................... 10,083,085
Transfer agent's fees and
expenses............................ 3,390,000
Reports to shareholders............. 1,454,900
Registration fees................... 330,000
Custodian's fees and expenses....... 305,000
Franchise taxes..................... 256,000
Legal fees.......................... 100,000
Insurance expense................... 59,000
Directors' fees..................... 45,000
Audit fee........................... 45,000
Miscellaneous....................... 43,412
------------
Total expenses.................... 35,775,447
------------
Net investment income................. 20,683,314
------------
Realized and Unrealized
Gain (Loss) on Investments
Net realized gain on investment
transactions........................ 81,494,071
Net change in unrealized
appreciation of investments......... (68,377,840)
------------
Net gain on investments............... 13,116,231
------------
Net Increase in Net Assets
Resulting from Operations............. $33,799,545
------------
------------
</TABLE>
PRUDENTIAL EQUITY FUND, INC.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended
December 31,
---------------------------------
Increase in Net Assets 1994 1993
--------------- --------------
<S> <C> <C>
Operations
Net investment
income............ $ 20,683,314 $ 17,238,874
Net realized gain on
investments....... 81,494,071 116,747,891
Net change in
unrealized
appreciation of
investments....... (68,377,840) 183,732,635
--------------- --------------
Net increase in net
assets resulting
from operations... 33,799,545 317,719,400
--------------- --------------
Net equalization
debits.............. 6,402,186 10,311,865
--------------- --------------
Dividends and distributions
(Note 1)
Dividends from net
investment income
Class A........... (4,339,236) (3,388,881)
Class B........... (16,849,152) (13,831,847)
Class C........... (14,701) --
--------------- --------------
(21,203,089) (17,220,728)
--------------- --------------
Distributions from
net realized
capital gains
Class A........... (12,591,770) (11,075,863)
Class B........... (91,043,748) (85,590,180)
Class C........... (95,226) --
--------------- --------------
(103,730,744) (96,666,043)
--------------- --------------
Fund share transactions (Note 6)
Proceeds from shares
sold.............. 1,454,763,135 1,246,554,009
Net asset value of
shares issued in
reinvestment of
dividends and
distributions..... 117,059,026 107,310,518
Cost of shares
reacquired........ (1,264,107,170) (881,414,705)
--------------- --------------
Net increase in net
assets from Fund
share
transactions...... 307,714,991 472,449,822
--------------- --------------
Total increase........ 222,982,889 686,594,316
Net Assets
Beginning of year..... 2,027,168,787 1,340,574,471
--------------- --------------
End of year........... $ 2,250,151,676 $2,027,168,787
--------------- --------------
--------------- --------------
</TABLE>
See Notes to Financial Statements. See Notes to Financial Statements.
-11-
<PAGE>
PRUDENTIAL EQUITY FUND, INC.
Notes to Financial Statements
Prudential Equity Fund, Inc. (the ``Fund''), is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The investment objective of the Fund is long-term growth of capital by
investing primarily in common stocks of major established corporations.
Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund in the preparation of
its financial statements.
Securities Valuation: Investments, including options, traded on a national
securities or commodities exchange and NASDAQ National Market equity securities
are valued at the last reported sales price on the primary exchange on which
they are traded. Securities traded in the over-the-counter market (including
securities listed on exchanges whose primary market is believed to be
over-the-counter) and listed securities for which no sale was reported on that
date are valued at the mean between the last reported bid and asked prices.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost which approximates market value.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, take
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction, including accrued interest.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
All securities are valued as of 4:15 P.M., New York time.
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. Dividend income is recorded on the
ex-dividend date, and interest income is recorded on the accrual basis.
Net investment income (other than distribution fees) and unrealized and
realized gains or losses are allocated daily to each class of shares based upon
the relative proportion of net assets of each class at the beginning of the day.
Dividends and Distributions: Dividends from net investment income are declared
and paid semi-annually. The Fund will distribute at least annually net capital
gains in excess of loss carryforwards, if any. Dividends and distributions are
recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Equalization: The Fund follows the accounting practice known as equalization by
which a portion of the proceeds from sales and costs of reacquisitions of Fund
shares, equivalent on a per share basis to the amount of distributable net
investment income on the date of the transaction, is credited or charged to
undistributed net investment income. As a result, undistributed net investment
income per share is unaffected by sales or reacquisitions of the Fund's shares.
Taxes: It is the Fund's policy to continue to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable net income and net capital gains, if any, to its
shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends have been provided for in accordance
with the Fund's understanding of the applicable country's tax rules and rates.
Note 2. Agreements The Fund has a management
agreement with Prudential Mutual Fund Management,
Inc. (``PMF''). Pursuant to this agreement, PMF has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PMF has entered into a subadvisory agreement with The Prudential
Investment Corporation (``PIC''); PIC furnishes investment advisory services in
connection with the management of the Fund. PMF pays for the cost of the
subadviser's services, the compensation of officers of the Fund, occupancy and
certain clerical and bookkeeping costs of the Fund. The Fund bears all other
costs and expenses.
The management fee paid PMF is computed daily and payable monthly, at an
annual rate of .50 of 1% of the Fund's average daily net assets up to $500
million, .475 of 1% of the next $500 million of average daily net assets and .45
of 1% of the Fund's average daily net assets in excess of $1 billion.
The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the
-12-
<PAGE>
<PAGE>
distributor of the Class A shares of the Fund, and with Prudential Securities
Incorporated (``PSI''), which acts as distributor of the Class B shares of the
Fund (collectively the ``Distributors''). To reimburse the Distributors for
their expenses incurred in distributing the Fund's Class A and Class B shares,
the Fund, pursuant to plans of distribution, pays the Distributors a
reimbursement accrued daily and payable monthly.
On July 19, 1994, shareholders of the Fund approved amendments to the Class A
and Class B distribution plans under which the distribution plans became
compensation plans, effective August 1, 1994. Prior thereto, the distribution
plans were reimbursement plans, under which PMFD and PSI were reimbursed for
expenses actually incurred by them up to the amount permitted under the Class A
and Class B Plans, respectively. The Fund is not obligated to pay any prior or
future excess distribution costs (costs incurred by the Distributors in excess
of distribution fees paid by the Fund or contingent deferred sales charges
received by the Distributors). The rate of the distribution fees charged to
Class A and Class B shares of the Fund did not change under the amended plan of
distribution. The Fund began offering Class C shares on August 1, 1994.
Pursuant to the Class A Plan, the Fund compensates PMFD for its expenses with
respect to Class A shares at an annual rate of up to .30 of 1% of the average
daily net assets of the Class A shares. Such expenses under the Class A Plan
were .25 of 1% of the average daily net assets of the Class A shares for the
year ended December 31, 1994.
Pursuant to the Class B and Class C Plans, the Fund compensates PSI for its
distribution-related expenses with respect to Class B and Class C shares at an
annual rate of up to 1% of the average daily net assets of the Class B and Class
C shares, respectively.
PMFD has advised the Fund that it has received approximately $1,712,900 in
front-end sales charges resulting from sales of Class A shares during the year
ended December 31, 1994. From these fees, PMFD paid such sales charges to
dealers (PSI and Prusec) which in turn paid commissions to salespersons.
PSI advised the Fund that for the year ended December 31, 1994, it received
approximately $3,369,800 in contingent deferred sales charges imposed upon
certain redemptions by investors.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.
Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS''), a
with Affiliates wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and
during the year ended December 31, 1994, the Fund incurred fees of approximately
$2,755,000 for the services of PMFS. As of December 31, 1994, $238,000 of such
fees were due to PMFS. Transfer agent fees and expenses in the Statement of
Operations include certain out-of-pocket expenses paid to non-affiliates.
For the year ended December 31, 1994, PSI earned approximately $102,300 in
brokerage commissions from portfolio transactions executed on behalf of the
Fund.
Note 4. Portfolio Purchases and sales of invest-
Securities ment securities, other than
short-term investments, for the year ended
December 31, 1994 aggregated $636,556,787 and $217,257,759, respectively.
The federal income tax basis of the Fund's investments at December 31, 1994
was substantially the same as for financial reporting purposes and, accordingly,
net unrealized appreciation for federal income tax purposes was $245,498,745
(gross unrealized appreciation--$368,627,573; gross unrealized
depreciation--$123,128,828).
Note 5. Joint The Fund, along with other
Repurchase affiliated registered invest-
Agreement Account ment companies, transfers
uninvested cash balances into a single joint
account, the daily aggregate balance of which is invested in one or more
repurchase agreements collateralized by U.S. Treasury or Federal agency
obligations. As of December 31, 1994, the Fund has a 20.83% undivided interest
in the joint account. The undivided interest for the Fund represents
$160,417,000 in the principal amount. As of such date, each repurchase agreement
in the joint account and the collateral therefor were as follows:
Goldman Sachs & Co., 5.75%, in the principal amount of $250,000,000,
repurchase price $250,159,722, due 1/3/95. The value of the collateral including
accrued interest is $255,000,108.
Lehman Government Securities, Inc., 5.90%, in the principal amount of
$70,000,000, repurchase price $70,045,889, due 1/3/95. The value of the
collateral including accrued interest is $71,379,084.
Morgan Stanley & Co., 5.75%, in the principal amount of $250,000,000,
repurchase price $250,159,722, due
-13-
<PAGE>
<PAGE>
1/3/95. The value of the collateral including accrued interest is $255,146,220.
Smith Barney Inc., 5.95%, in the principal amount of $200,000,000, repurchase
price $200,132,222, due 1/3/95. The value of the collateral including accrued
interest is $204,036,161.
Note 6. Capital The Fund offers Class A,
Class B and Class C shares. Class A shares are
sold with a front-end sales charge of up to 5%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a contingent
deferred sales charge of 1% during the first year. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately seven
years after purchase commencing in February 1995.
There are 750 million shares of common stock, $.01 par value per share,
dividend into three classes, designated Class A, Class B and Class C common
stock, each of which consists of 250 million authorized shares.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ----------------------------- ---------------- ---------------
<S> <C> <C>
Year ended December 31, 1994:
Shares sold.................. 18,103,878 $ 247,518,724
Shares issued in reinvestment
of dividends and
distributions 1,247,329 16,412,624
Shares reacquired............ (15,323,527) (209,456,746)
---------------- ---------------
Net increase in shares
outstanding................ 4,027,680 $ 54,474,602
---------------- ---------------
---------------- ---------------
Year ended December 31, 1993:
Shares sold.................. 10,666,901 $ 142,866,820
Shares issued in reinvestment
of dividends and
distributions.............. 1,024,585 13,957,895
Shares reacquired............ (6,172,832) (83,163,283)
---------------- ---------------
Net increase in shares
outstanding................ 5,518,654 $ 73,661,432
---------------- ---------------
---------------- ---------------
<CAPTION>
Class B Shares Amount
---------------- ---------------
<S> <C> <C>
Year ended December 31, 1994:
Shares sold.................. 89,556,181 $ 1,203,380,489
Shares issued in reinvestment
of dividends and
distributions.............. 7,818,109 100,544,482
Shares reacquired............ (78,586,261) (1,053,979,338)
---------------- ---------------
Net increase in shares
outstanding................ 18,788,029 $ 249,945,633
---------------- ---------------
---------------- ---------------
Year ended December 31, 1993:
Shares sold.................. 84,220,134 $ 1,103,687,189
Shares issued in reinvestment
of dividends and
distributions.............. 7,009,195 93,352,623
Shares reacquired............ (60,836,074) (798,251,422)
---------------- ---------------
Net increase in shares
outstanding................ 30,393,255 $ 398,788,390
---------------- ---------------
---------------- ---------------
<CAPTION>
Class C
- -----------------------------
<S> <C> <C>
August 1, 1994* through
December 31, 1994:
Shares sold.................. 279,964 $ 3,863,922
Shares issued in reinvestment
of dividends and
distributions.............. 7,877 101,920
Shares reacquired............ (49,158) (671,086)
---------------- ---------------
Net increase in shares
outstanding................ 238,683 $ 3,294,756
---------------- ---------------
---------------- ---------------
</TABLE>
- ---------------
* Commencement of offering of Class C shares.
-14-
<PAGE>
PRUDENTIAL EQUITY FUND, INC.
Financial Highlights
<TABLE>
<CAPTION>
Class A Class
B
-------------------------------------------------------
- -----------------------------------------------
January 22,
1990D
Year Ended December 31, through Year Ended
December 31,
PER SHARE OPERATING ---------------------------------------- December 31,
- -----------------------------------------------
PEFORMANCE: 1994 1993 1992 1991 1990 1994 1993
1992 1991
-------- -------- -------- ------- ------------ ---------- ----------
---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
<C> <C>
Net asset value,
beginning of
period........... $ 13.80 $ 12.07 $ 11.39 $ 9.84 $ 11.25 $ 13.80 $ 12.08
$ 11.40 $ 9.85
-------- -------- -------- ------- ------------ ---------- ----------
---------- --------
Income from invest-
ment operations
Net investment
income........... .22 .23 .24 .27 .31 .12 .12
.14 .18
Net realized and
unrealized gain
(loss) on
investment
transactions..... .09 2.42 1.30 2.09 (.15) .09 2.42
1.30 2.09
-------- -------- -------- ------- ------------ ---------- ----------
---------- --------
Total from
investment
operations..... .31 2.65 1.54 2.36 .16 .21 2.54
1.44 2.27
-------- -------- -------- ------- ------------ ---------- ----------
---------- --------
Less distributions
Dividends from net
investment
income........... (.22) (.22) (.23) (.24) (.35) (.12) (.12)
(.13) (.15)
Distributions from
net
realized capital
gains............ (.65) (.70) (.63) (.57) (1.22) (.65) (.70)
(.63) (.57)
-------- -------- -------- ------- ------------ ---------- ----------
---------- --------
Total
distributions... (.87) (.92) (.86) (.81) (1.57) (.77) (.82)
(.76) (.72)
-------- -------- -------- ------- ------------ ---------- ----------
---------- --------
Net asset value,
end of period.... $ 13.24 $ 13.80 $ 12.07 $ 11.39 $ 9.84 $ 13.24 $ 13.80
$ 12.08 $ 11.40
-------- -------- -------- ------- ------------ ---------- ----------
---------- --------
-------- -------- -------- ------- ------------ ---------- ----------
---------- --------
TOTAL RETURN#:..... 2.38% 22.14% 13.65% 24.55% 0.29% 1.60% 21.13%
12.72% 23.55%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of
period (000)..... $276,412 $232,535 $136,834 $82,845 $ 30,264 $1,970,580 $1,794,634
$1,203,740 $904,382
Average net assets
(000)............ $254,596 $190,778 $111,489 $57,845 $ 27,371 $1,901,972 $1,522,992
$1,042,028 $757,485
Ratios to average
net
assets:##
Expenses,
including
distribution
fees........... 1.00% .91% .94% .97% 1.01%* 1.75% 1.71%
1.74% 1.77%
Expenses,
excluding
distribution
fees........... .75% .71% .74% .77% .84%* .75% .71%
.74% .77%
Net investment
income......... 1.62% 1.71% 1.91% 2.36% 2.86%* .87% .91%
1.11% 1.56%
Portfolio
turnover......... 12% 21% 22% 19% 76% 12% 21%
22% 19%
<CAPTION>
Class C
------------
<S> <C> <C>
August 1,
1994DD
through
PER SHARE OPERATING December 31,
PEFORMANCE: 1990 1994
-------- ------------
<S> <C> <C>
Net asset value,
beginning of
period........... $ 11.83 $14.02
-------- ------
Income from invest-
ment operations
Net investment
income........... .26 .09
Net realized and
unrealized gain
(loss) on
investment
transactions..... (.76) (.10)
-------- ------
Total from
investment
operations..... (.50) (.01)
-------- ------
Less distributions
Dividends from net
investment
income........... (.26) (.12)
Distributions from
net
realized capital
gains............ (1.22) (.65)
-------- ------
Total
distributions... (1.48) (.77)
-------- ------
Net asset value,
end of period.... $ 9.85 $13.24
-------- ------
-------- ------
TOTAL RETURN#:..... (4.28)% .01%
RATIOS/SUPPLEMENTAL
Net assets, end of
period (000)..... $578,213 $3,160
Average net assets
(000)............ $583,016 $1,847
Ratios to average
net
assets:##
Expenses,
including
distribution
fees........... 1.89% 1.83%*
Expenses,
excluding
distribution
fees........... .89% .83%*
Net investment
income......... 2.27% .90%*
Portfolio
turnover......... 76% 12%
</TABLE>
- ---------------
* Annualized.
D Commencement of offering of Class A shares.
DD Commencement of offering of Class C shares.
# Total return does not consider the effects of sales loads. Total return
is calculated assuming a purchase of shares on the first day and a sale on
the last day of each period reported and includes reinvestment of
dividends and distributions. Total returns for periods of less than a full
year are not annualized.
## Because of the events referred to in DD and the timing of such, the ratios
for the Class C shares are not necessarily comparable to that of Class A
or B shares and are not necessarily indicative of future ratios.
See Notes to Financial Statements.
-15-
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
Prudential Equity Fund, Inc.
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 Prudential Equity Fund, Inc. (the
``Fund'') at December 31, 1994, 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 generally accepted accounting principles. 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 generally accepted auditing standards 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
December 31, 1994 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
February 21, 1995
TAX INFORMATION
We are required by the Internal Revenue Code to advise you within 60 days of
the Fund's fiscal year end (December 31, 1994) as to the federal tax status of
dividends paid by the Fund during such fiscal year. Accordingly, we are advising
you that in 1994 the Fund paid distributions to Class A shares totalling $.8725
per share, comprised of $.2825 per share of net investment income and short-term
capital gains which are taxable as ordinary income and $.59 per share of net
long-term capital gains. The Fund paid distributions to Class B and C shares
totalling $.7675 per share, comprised of $.1775 per share of net investment
income and short-term capital gains which are taxable as ordinary income and
$.59 per share of net long-term capital gains. Further, we wish to advise you
that 100% of the ordinary income dividends paid in 1994 qualified for the
corporate dividends received deduction available to corporate taxpayers.
-16-
<PAGE>
Prudential Equity Fund
Comparison of Change in Value of $10,000 Investment in Prudential Equity
Fund and The S&P 500 Index
<TABLE>
Average Annual Total Returns
<CAPTION>
With Sales Load
1 Year Since Inception (1/22/90)
<S> <C> <C>
- -2.7% 11.4%
<CAPTION>
Without Sales Load
1 Year Since Inception (1/22/90)
<S> <C> <C>
2.4% 12.6%
</TABLE>
Class A
(GRAPH)
<TABLE>
Average Annual Total Returns
<CAPTION>
With Sales Load
1 Year 5 Year 10 Year
<S> <C> <C>
- -3.4% 10.3% 14.3%
<CAPTION>
Without Sales Load
1 Year 5 Year 10 Year
<S> <C> <C>
1.6% 10.4% 14.3%
</TABLE>
Class B
(GRAPH)
<TABLE>
Average Annual Total Returns
<CAPTION>
With Sales Load
1 Year Since Inception (8/1/94)
<S> <C> <C>
N/A -1.0%
<CAPTION>
Without Sales Load
1 Year Since Inception (8/1/94)
<S> <C> <C>
N/A 0.0%
</TABLE>
Class C
(GRAPH)
S&P 500 Prudential Equity Fund
Past performance is not predictive of future performance and an investor's
shares when redeemed may be worth more or less than their original cost.
These graphs are furnished to you in accordance with SEC regulations. They
compare a $10,000 investment in the Prudential Equity Fund (Class A, Class
B and Class C) with a similar investment in the S&P 500 Index by portraying
the initial account values at the commencement of operations for Class A and
C shares, and for 10 years for Class B shares, and subsequent account values
at the end of each fiscal year (December 31), as measured on a quarterly
basis, beginning in 1990 for Class A shares, in 1984 for Class B shares and
in 1994 for Class C shares. For purposes of the graphs, and unless otherwise
indicated, in the accompanying tables it has been assumed (a) that the
maximum applicable front-end sales charge was deducted from the initial
$10,000 investment in Class A shares; (b) the maximum applicable contingent
deferred sales charge was deducted from the value of the investment in Class
B and Class C shares, assuming full redemption on December 31, 1994; (c) all
recurring fees (including management fees) were deducted; and (d) all
dividends and distributions were reinvested. Class B shares will automatically
convert to Class A shares, on a quarterly basis, beginning approximately seven
years after purchase. This conversion feature is not reflected in the graph.
The S&P 500 is a capital-weighted index, representing the aggregate market
value of the common equity of 500 stocks primarily traded on the New York
Stock Exchange. The S&P 500 is an unmanaged index and includes the
reinvestment of all dividends, but does not reflect the payment of
transaction costs and advisory fees associated with an investment in
the Fund. The securities in the S&P 500 may differ substantially from
the securities in the Fund. The S&P 500 is not the only index that may
be used to characterize performance of convertible bond funds and other
indexes may portray different comparative performance.
-17-
<PAGE>
The Prudential Mutual Fund Family
Prudential Mutual Fund Management offers a broad range of mutual funds
designed to meet your individual needs. We welcome you to review the
investment options available through our family of funds. For more
information on the Prudential Mutual Funds, including charges and expenses,
contact your Prudential Securities Financial Advisor or Pruco Securities
Representative or telephone the Funds at (800) 225-1852 for a free prospectus.
Read the prospectus carefully before you invest or send money.
Taxable Bond Funds
Prudential Adjustable Rate Securities Fund, Inc.
Prudential Diversified Bond Fund, Inc.
Prudential GNMA Fund, Inc.
Prudential Government Income Fund, Inc.
(formerly known as Prudential
Government Plus Fund)
Prudential Government Securities Trust
Intermediate Term Series
Prudential High Yield Fund, Inc.
Prudential Structured Maturity Fund, Inc.
Income Portfolio
Prudential U.S. Government Fund
The BlackRock Government Income Trust
Tax-Exempt Bond Funds
Prudential California Municipal Fund
California Series
California Income Series
Prudential Municipal Bond Fund
High Yield Series
Insured Series
Modified Term Series
Prudential Municipal Series Fund
Arizona Series
Florida Series
Georgia Series
Hawaii Income Series
Maryland Series
Massachusetts Series
Michigan Series
Minnesota Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.
Global Funds
Prudential Europe Growth Fund, Inc.
Prudential Global Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Global Natural Resources Fund, Inc.
Prudential Intermediate Global Income Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential Short-Term Global Income Fund, Inc.
Global Assets Portfolio
Short-Term Global Income Portfolio
Global Utility Fund, Inc.
Equity Funds
Prudential Allocation Fund
(formerly known as Prudential FlexiFund)
Conservatively Managed Portfolio
Strategy Portfolio
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Growth Opportunity Fund, Inc.
Prudential IncomeVertible(R) Fund, Inc.
Prudential Multi-Sector Fund, Inc.
Prudential Strategist Fund, Inc.
(formerly known as Prudential Growth Fund)
Prudential Utility Fund, Inc.
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Money Market Funds
- -Taxable Money Market Funds
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Special Money Market Fund
Money Market Series
Prudential MoneyMart Assets
- -Tax-Free Money Market Funds
Prudential Tax-Free Money Fund
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
- -Command Funds
Command Money Fund
Command Government Fund
Command Tax-Free Fund
- -Institutional Money Market Funds
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series
<PAGE>
Directors
Edward D. Beach Thomas T. Mooney
Eugene C. Dorsey Thomas H. O'Brien
Delayne Dedrick Gold Richard A. Redeker
Harry A. Jacobs, Jr. Nancy H. Teeters
Lawrence C. McQuade
Officers
Lawrence C. McQuade, President
David W. Drasnin, Vice President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Deborah A. Docs, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll Free (800) 225-1852, Collect (908) 417-7555
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
744316100 MF101E
744316209
744316308 (LOGO)
