<PAGE>
ANNUAL REPORT OCTOBER 31, 2000
Prudential
Global Growth Fund
Fund Type Global stock
Objective Long-term growth of capital
(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
The Prudential Global Growth Fund invests primarily
in U.S. and foreign stocks, seeking to provide
long-term growth of capital. We study cultural,
social, and demographic forces, looking for growth
industries. We try to buy strong companies in these
industries when their earnings growth potential has
not been fully priced by local stock markets.
Because it invests globally, the Fund is subject to
the special risks associated with foreign
investments, including currency, political and
social risks, and illiquidity. There can be no
assurance that the Fund will achieve its investment
objective.
Geographic Concentration
Expressed as a percentage of
net assets as of 10/31/00
48.0% United States
18.8 Continental Europe
8.1 Japan
6.3 United Kingdom
6.1 Pacific Basin (excl. Japan)
1.5 Canada
11.2 Cash & Equivalents
Ten Largest Holdings
Expressed as a percentage of
net assets as of 10/31/00
4.3% Time Warner, Inc.
Broadcasting & Publishing
3.9 Citigroup, Inc.
Banking
3.9 Vodafone AirTouch PLC
Telecommunications
2.9 Solectron Corp.
Electronic Components
2.7 Electronic Arts, Inc.
Computer Software & Services
2.6 Omnicom Group, Inc.
Advertising
2.5 USA Networks, Inc.
Broadcasting & Publishing
2.3 Total Fina SA
Oil & Gas Exploration
2.3 NTT Mobile Communications
Telecommunications
2.2 Nokia Oyi
Telecommunications
Holdings are subject to change.
<PAGE>
www.prudential.com (800) 225-1852
Performance at a Glance
Cumulative Total Returns1 As of 10/31/00
<TABLE>
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A 9.80% 100.56% 251.22% 210.96%
Class B 8.94 93.78 227.32 705.16
Class C 8.89 93.38 N/A 110.24
Class Z 9.97 N/A N/A 94.82
Lipper Global Fund Avg.3 10.26 103.97 232.76 ***
</TABLE>
Average Annual Total Returns1 As of 10/31/00
<TABLE>
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A 4.31% 13.76% 12.81% 10.58%
Class B 3.94 14.03 12.59 13.51
Class C 6.80 13.87 N/A 12.44
Class Z 9.97 N/A N/A 15.36
</TABLE>
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost.
1 Source: Prudential Investments Fund Management
LLC and Lipper Inc. The cumulative total returns do
not take into account sales charges. The average
annual total returns do take into account
applicable sales charges. The Fund charges a
maximum front-end sales charge of 5% for Class A
shares. Class B shares are subject to a declining
contingent deferred sales charge (CDSC) of 5%, 4%,
3%, 2%, 1%, and 1% for six years. Class B shares
will automatically convert to Class A shares, on a
quarterly basis, approximately seven years after
purchase. Class C shares are subject to a front-end
sales charge of 1% and a CDSC of 1% for 18 months.
Class Z shares are not subject to a sales charge or
distribution and service (12b-1) fees.
2 Inception dates: Class A, 1/22/90; Class B,
5/15/84; Class C, 8/1/94; Class Z, 3/1/96.
3 Lipper average returns are for all funds in each
share class for the one-, five-, and ten-year
periods in the Global Fund category. The Lipper
average is unmanaged. Global funds invest at least
25% of their portfolios in securities traded
outside the United States, and may own U.S.
securities as well.
***Lipper Since Inception returns are 208.70% for
Class A, 885.46% for Class B, 124.55% for
Class C, and 88.03% for Class Z, based on all funds
in each share class.
1
<PAGE>
(LOGO) December 15, 2000
DEAR SHAREHOLDER,
During the one-year reporting period ended October
31, 2000, the Prudential Global Growth Fund's Class
A shares posted a 9.80% return--4.31% to those
paying the one-time Class A share sales charge.
This compares to the 10.26% return for the Lipper
Global Fund Average.
The majority of the Fund's gains were generated
during the first four and a half months of the
reporting period. During that time, the Fund was
rewarded for its exposure to technology, media, and
telecommunications stocks--collectively known as
TMT. However, as the period progressed, investors
became concerned about the high valuations of many
of these stocks. Then in mid-March, a severe
correction occurred, and investors fled TMT stocks
in favor of more defensive-oriented securities.
These included value-oriented stocks and high-
quality bonds. By the end of October, despite
several minirallies during the remainder of the
period, global stocks had generally fallen from
their peak levels.
As market volatility increased, the Fund's
management team sought to preserve profits by
shifting the Fund's emphasis to less volatile areas
of the market. The team then redeployed assets as
the period progressed and moved to selectively
invest again in TMT stocks that had become much
more reasonably valued compared to just a few
months previously.
This year's market gyrations have once again
demonstrated the importance of maintaining a
diversified portfolio and taking a long-term
investment approach. While dramatic market gains
and losses can make headlines, it's often best to
look past short-term events and focus on your
longer-range financial goals.
Sincerely,
David R. Odenath, Jr., President
Prudential Global Growth Fund
2
<PAGE>
Prudential Global Growth Fund
Annual Report October 31, 2000
INVESTMENT ADVISER'S REPORT
A Dramatic Increase in Volatility
The period under review could best be characterized
as having two distinct phases. The first phase
occurred from the beginning of November 1999
through mid-March 2000. During that time, investors
around the globe were drawn to growth stocks, in
particular large-capitalization growth and TMT
issues. The Fund participated in this rally, and
was rewarded for its exposure to TMT stocks. Toward
the end of February, we became concerned that
prices on these stocks had moved up too far too
fast. In many cases, the price-to-earning (P/E)
multiples of TMT stocks had risen to all-time high
levels. We took this as a sign to take profits on
many of our holdings, in particular, our computer
equipment and software firms.
The second phase of the period began in mid-March,
when the global stock markets experienced a swift
and, in some cases, dramatic correction. While many
types of stocks were dragged down during the
correction, TMT issues around the world experienced
the brunt of the decline. For example, within just
a few weeks, the Nasdaq Composite Index (a U.S.
composite index that is heavily weighted in TMT
issues) fell 37% from its peak. During this period,
investors shifted their focus to the relative safe
havens of fixed-income securities and more
defensive-oriented value stocks. For the remainder
of the Fund's fiscal year, growth stocks generally
underperformed other areas of the market, and TMT
issues experienced even further declines as the
period drew to a close. This was triggered by
concerns in the United States that slower economic
growth would result in lower corporate profits. In
addition, there was a sharp decline in spending by
global telecommunications firms.
TAKING A DEFENSIVE POSTURE
While it was not possible to totally avoid the
downturn in the price of growth stocks during the
correction, we took several steps in an attempt to
limit the damage. As we previously mentioned, we
pared our holdings in a number of TMT stocks prior
to the mid-March collapse. The proceeds of
3
<PAGE>
Prudential Global Growth Fund
Holdings expressed as a percentage of the Fund's net assets
Comments on Largest Holdings As of 10/31/00
------------------------------------------------------
4.3% Time Warner, Inc. (United States)/Broadcasting & Publishing
The premier communications content provider, with a
vast and varied library of resources. The synergies
between Time Warner and America Online should lead
to tremendous long-term opportunities.
3.9% Citigroup, Inc. (United States)/Banking
The leading financial services company in the
United States. The firm is widely diversified, and
its individual components have been well
integrated. This has helped to enhance Citigroup's
performance.
3.9% Vodafone AirTouch PLC (United Kingdom)/Telecommunications
The world's largest provider of cellular telephone
services. It is No. 1 in the United Kingdom and,
with Verizon (its joint venture with Bell
Atlantic), in the United States. Unlike many
high-profile telecommunications companies, Vodafone
has a very strong financial position.
2.9% Solectron Corp. (United States)/Electronic Components
The world's foremost electronics contract
manufacturer. The telecommunications industry
is still in the early phases of outsourcing its
manufacturing. We believe this could lead to future
positive results for Solectron.
2.7% Electronic Arts, Inc. (United States)/Computer Software & Services
The largest developer of video games in the world.
The firm has a very strong brand franchise in the
United States with its products that include EA
Sport games and the SIM line (e.g., Simcity). It
also has a five-year exclusive contract with
America Online to provide interactive games over
its network.
Holdings are subject to change.
4
<PAGE>
www.prudential.com (800) 225-1852
Annual Report October 31, 2000
these sales were then used to increase the Fund's
exposure to retail, financial, and to some extent,
healthcare stocks. As the period progressed and the
carnage in TMT stocks continued, we shifted out of
some of our higher P/E stocks in favor of issues
with lower relative multiples. This served to help
lower the Fund's overall volatility.
Throughout the downdraft, we also looked to upgrade
the portfolio by very carefully moving back into
certain TMT stocks that we believe continue to hold
strong long-term potential. In particular, we
focused on companies with leadership positions
whose stocks had fallen to attractive levels, given
their long-term growth prospects.
A NUMBER OF STRONG PERFORMERS
Despite the market's volatility, we held a number
of stocks that generated outstanding results during
the reporting period. For example, Time Warner (see
Comments on Largest Holdings), the world's leading
media and entertainment company, saw its stock appreciate
as investors embraced its proposed union with America Online.
Another winning holding was PMC-Sierra, Inc., a
designer, developer, and marketer of high-
performance semiconductor systems for advanced
communications markets. The firm's products are
used in broadband communications infrastructures,
high bandwidth networks, and multimedia personal
computers. PMC's stock more than tripled during
the period, and it continued to appreciate during
the March through October period. In addition,
Nokia Corp., the wireless communications giant,
also performed well, even though it stumbled
late in the period.
A FEW MISSTEPS
To some extent, we underestimated the length and
breadth of the market's correction. In addition,
there were several holdings that did not live up to
our expectations. One example was Micron Technology
Inc., a manufacturer of semiconductor memory
products and personal computer systems.
5
<PAGE>
Prudential Global Growth Fund
Annual Report October 31, 2000
Micron's share price plummeted, as the price and
demand for its chips fell sharply. This was largely
due to excess chip inventory by many PC
manufacturers and an overall slowdown in personal
computer sales.
GLOBAL FUNDAMENTALS APPEAR POSITIVE
Despite the year-to-date decline in many global
stock markets, we believe the reasons for holding
global equities remain compelling. Unlike in the
United States, many international economies have
spare industrial capacity, so their central banks
are pursuing monetary policies that are encouraging
economic growth. In addition, the productivity-
enhancing factors and corporate restructuring that
has driven the lengthy bull market in the United
States are only in the early stages in many
overseas countries. Another positive trend worth
noting is the ongoing promise of the digital
revolution. As consumers and businesses upgrade to
these new products and systems, it should prove
beneficial to those countries that develop and
market these items.
LOOKING AHEAD
Looking ahead, it's not clear when the market
volatility we've experienced will subside. However,
we are extremely comfortable with the Fund's
positioning, and we believe it is poised for strong
future appreciation potential when the global
equity markets do rebound.
Prudential Global Growth Fund Management Team
6
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Portfolio of Investments as of October 31, 2000
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C> <C>
----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 88.8%
Common Stocks 88.8%
-------------------------------------------------------------------------------------
Australia 2.4%
983,400 Broken Hill Proprietary Co., Ltd. $ 9,591,084
603,100 Commonwealth Bank of Australia 9,030,323
245,850 Onesteel Ltd. 117,965
----------------
18,739,372
-------------------------------------------------------------------------------------
Canada 1.5%
259,800 Nortel Networks Corp. 11,820,900
-------------------------------------------------------------------------------------
Finland 2.2%
420,760 Nokia Oyi AB 17,320,827
-------------------------------------------------------------------------------------
France 5.3%
23,505 Legrand SA 3,791,367
97,950 Publicis Groupe SA 3,205,611
195,537 Thomson Multimedia(b) 8,964,059
127,467 Total Fina SA, Ser. B 18,244,725
93,900 Vivendi SA 6,751,978
----------------
40,957,740
-------------------------------------------------------------------------------------
Germany 1.0%
62,700 Siemens AG 7,987,034
-------------------------------------------------------------------------------------
Hong Kong 2.7%
7,625,500 China Merchants Holdings 5,328,893
1,771,200 China Telecom 11,412,371
55,135,000 Guangzhou Investment(a) 4,171,110
----------------
20,912,374
</TABLE>
See Notes to Financial Statements 7
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Portfolio of Investments as of October 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
<C> <S> <C> <C>
Italy 2.0%
2,510,500 Banca Intesa SpA(b) $ 10,422,000
417,000 Riunione Adriatica di Sicurta SpA 5,476,567
----------------
15,898,567
-------------------------------------------------------------------------------------
Japan 8.1%
201,000 Canon Inc. 7,974,437
1,018 Nippon Telegraph & Telephone Corp. 9,262,177
730 NTT Mobile Communications 17,992,487
67,000 Orix Corp. 7,029,045
74,100 Shimamura Co. 5,621,660
186,400 Sony Corp. 14,892,872
----------------
62,772,678
-------------------------------------------------------------------------------------
Netherlands 3.0%
209,850 ING Groep NV 14,416,069
183,268 Ver Ned Uitgevers NV 8,634,985
----------------
23,051,054
-------------------------------------------------------------------------------------
Singapore 1.0%
793,600 Singapore Airlines 7,958,156
-------------------------------------------------------------------------------------
Spain 3.3%
1,160,462 Banco Santander Central Hispano SA(a) 11,250,686
759,100 Telefonica de Espana SA 14,480,517
----------------
25,731,203
-------------------------------------------------------------------------------------
Sweden 2.0%
382,100 Skanska AB, Ser. B 15,131,160
-------------------------------------------------------------------------------------
United Kingdom 6.3%
433,600 BAA PLC 3,604,056
852,641 Bank of Scotland 7,952,887
651,120 GKN PLC 7,461,665
7,286,976 Vodafone AirTouch PLC 30,310,869
----------------
49,329,477
</TABLE>
8 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Portfolio of Investments as of October 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
----------------------------------------------------------------------------------------
<C> <S> <C> <C>
United States 48.0%
183,300 American Home Products Corp. $ 11,639,550
84,500 Cablevision Systems Corp. Class A(a) 6,295,250
248,900 Chase Manhattan Corp. 11,324,950
577,733 Citigroup, Inc. 30,403,199
205,900 Comcast Corp.(a) 8,390,425
30,000 Corvis Corp.(b) 1,968,750
419,400 Electronic Arts, Inc.(a) 20,970,000
364,700 Fox Entertainment Group, Inc., Class A(a) 7,841,050
143,500 Grupo Televisa, S.A. (ADR)(a) 7,766,938
104,200 Home Depot, Inc. 4,480,600
43,900 JDS Uniphase Corp.(a) 3,572,363
55,300 Juniper Networks Inc.(a) 10,783,500
56,200 Level 3 Communications, Inc.(a) 2,680,038
395,700 Micron Technology, Inc.(a) 13,750,575
134,700 Microsoft Corp.(a) 9,277,462
218,400 Omnicom Group, Inc.(a)(b) 20,147,400
339,400 Oracle Corp.(a)(b) 11,200,200
256,000 Pharmacia Corp. 14,080,000
76,200 PMC-Sierra, Inc.(a) 12,915,900
131,500 Portal Software, Inc. 4,627,156
54,400 Quest Software, Inc.(a)(b) 2,376,600
327,500 SCI Systems, Inc.(a) 14,082,500
514,400 Solectron Corp.(a)(b) 22,633,600
519,700 Target Corp. 14,356,713
230,900 Telefonos de Mexico SA, Class L (ADR)(b) 12,454,169
206,200 Texas Instruments, Inc.(b) 10,116,687
445,500 Time Warner, Inc.(b) 33,817,905
960,900 USA Networks, Inc.(a) 19,458,225
236,100 Viacom, Inc.(a) 13,428,187
124,900 Wal-Mart Stores, Inc. 5,667,337
443,400 Worldcom Inc. 10,530,750
----------------
373,037,979
----------------
Total long-term investments (cost $547,456,145) 690,648,521
----------------
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Portfolio of Investments as of October 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C> <C>
------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 14.0%
Commercial Paper 5.4%
$ 6,109 Bombardier Capital Inc.
6.72%, 11/22/00(c) $ 6,085,053
1,556 Infinity Broadcasting Inc.
6.75%, 11/30/00(c) 1,547,540
8,352 Sears Roebuck Acceptance Corp.
6.85%, 11/1/00(c) 8,352,000
Sprint Capital Corp.
3,905 6.71%, 11/10/00(c) 3,898,469
2,250 6.69%, 11/20/00(c) 2,242,032
TRW Inc.
2,785 6.72%, 11/13/00(c) 2,778,761
7,042 6.72%, 11/17/00(c) 7,020,968
9,827 Viacom Inc.
6.85%, 11/1/00(c) 9,827,000
--------------
Total commercial paper (cost $41,751,823) 41,751,823
--------------
-------------------------------------------------------------------------------------
U. S. Government Securities 6.0%
United States Treasury Bills
47,000 5.86%, 12/21/00
(cost $46,610,944) 46,610,944
-------------------------------------------------------------------------------------
Repurchase Agreement 2.6%
Joint Repurchase Agreement Account,
20,293 6.56%, 11/1/00
(cost $20,293,000; Note 5) 20,293,000
--------------
Total short-term investments (cost $108,655,767) 108,655,767
--------------
Total Investments 102.8%
(cost $656,111,912) 799,304,288
Liabilities in excess of other assets (2.8%) (21,683,909)
--------------
Net Assets-100% $ 777,620,379
--------------
</TABLE>
------------------------------
(a) Non-income producing security.
(b) Portion of securities on loan, see Note 4.
(c) Represents security, or portion thereof, purchased with cash collateral
received for securities on loan.
ADR--American Depository Receipt.
10 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Portfolio of Investments as of October 31, 2000 Cont'd.
<TABLE>
<S> <C> <C>
The industry classification of portfolio holdings and other assets/liabilities
(net) shown as a percentage of net assets as of October 31, 2000 was as
follows:
Telecommunications 17.0%
Banking 9.4
Broadcasting & Publishing 7.9
Electronic Components 7.7
U.S. Government Securities 6.0
Computer Software & Services 5.6
Cash & Other Equivalents 5.4
Retail 3.9
Pharmaceuticals 3.3
Advertising 3.0
Media 2.9
Repurchase Agreement 2.6
Oil & Gas Exploration/Production 2.3
Consumer Electronics 1.9
Cable & Pay Television Systems 1.9
Building & Construction 1.9
Semiconductors 1.8
Telecommunications Equipment 1.5
Financial Services 1.5
Airlines 1.5
Networking 1.4
Steel & Metals 1.3
Metals 1.2
Publishing 1.1
Office Equipment & Supplies 1.0
Manufacturing 1.0
Broadcasting 1.0
Automobiles & Auto Parts 1.0
Financial Services Sector 0.9
Conglomerates 0.9
Miscellaneous Manufacturing 0.7
Insurance 0.7
Internet 0.6
Real Estate-Development 0.5
Electrical & Electronics 0.5
Liabilities in excess of other assets (2.8)
-----
100.0%
-----
-----
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
October 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $656,111,912) $799,304,288
Foreign currency, at value (cost $20,260,918) 19,544,362
Cash 356,760
Receivable for Series shares sold 6,695,068
Foreign tax reclaim receivable 280,340
Dividends and interest receivable 234,446
Receivable for securities lending income 170,354
Deferred expenses and other assets 12,402
----------------
Total assets 826,598,020
----------------
LIABILITIES
Payable to broker for collateral for securities on loan 41,338,152
Payable for investments purchased 3,231,266
Payable for Series shares reacquired 1,459,890
Unrealized depreciation on swaps 1,229,619
Management fee payable 487,624
Accrued expenses 475,702
Securities lending rebate payable 367,168
Distribution fee payable 323,201
Payable to securities lending agent 35,318
Withholding taxes payable 29,701
----------------
Total liabilities 48,977,641
----------------
NET ASSETS $777,620,379
----------------
----------------
Net assets were comprised of:
Common stock, at par $ 373,813
Paid-in capital in excess of par 516,161,276
----------------
516,535,089
Distributions in excess of net investment income (29,701)
Accumulated net realized gain on investments and
foreign currency transactions 119,909,651
Net unrealized appreciation on investments and foreign
currencies 141,205,340
----------------
Net assets, October 31, 2000 $777,620,379
----------------
----------------
</TABLE>
12 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Statement of Assets and Liabilities Cont'd.
<TABLE>
<CAPTION>
October 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share ($396,870,041
/ 18,588,573 shares of common stock issued and
outstanding) $21.35
Maximum sales charge (5% of offering price) 1.12
----------------
Maximum offering price to public $22.47
----------------
----------------
Class B:
Net asset value, offering price and redemption price per
share ($288,417,583 / 14,417,430 shares of common stock
issued and outstanding) $20.00
----------------
----------------
Class C:
Net asset value and redemption price per share ($21,376,753
/ 1,069,115 shares of common stock issued and
outstanding) $19.99
Sales charge (1% of offering price) .20
----------------
Offering price to public $20.19
----------------
----------------
Class Z:
Net asset value, offering price and redemption price per
share ($70,956,002 / 3,306,190 shares of common stock
issued and outstanding) $21.46
----------------
----------------
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Statement of Operations
<TABLE>
<CAPTION>
Year
Ended
October 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Dividends (net of foreign withholding taxes of $605,395) $ 4,512,625
Interest 2,823,117
Income from securities loaned (net) 427,052
----------------
Total income 7,762,794
----------------
Expenses
Management fee 6,502,580
Distribution fee--Class A 1,037,588
Distribution fee--Class B 3,323,133
Distribution fee--Class C 188,863
Transfer agent's fees and expenses 1,465,000
Custodian's fees and expenses 380,000
Reports to shareholders 366,000
Registration fees 72,000
Audit fees 35,000
Legal fees and expenses 20,000
Directors' fees and expenses 13,000
Insurance expenses 10,000
Miscellaneous 8,527
----------------
Total expenses 13,421,691
----------------
Net investment loss (5,658,897)
----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investments 208,100,079
Swaps (999,414)
Foreign currencies (587,586)
----------------
206,513,079
----------------
Net change in unrealized appreciation/depreciation on:
Investments (130,746,359)
Foreign currencies (1,976,328)
Swaps (1,472,005)
----------------
(134,194,692)
----------------
Net gain on investments and foreign currencies 72,318,387
----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 66,659,490
----------------
----------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Year
Ended Ended
October 31, 2000 October 31, 1999
<S> <C> <C> <C>
-------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment loss $ (5,658,897) $ (3,771,526)
Net realized gain on investments and
foreign currency transactions 206,513,079 68,352,009
Net change in unrealized
appreciation/depreciation on investments
and foreign currencies (134,194,692) 137,002,352
---------------- ----------------
Net increase in net assets resulting from
operations 66,659,490 201,582,835
---------------- ----------------
Dividends and distributions (Note 1)
Distributions in excess of net investment
income
Class A (2,901,668) (2,173,921)
Class B (788,169) (347,370)
Class C (27,278) (6,461)
Class Z (553,480) (394,708)
---------------- ----------------
(4,270,595) (2,922,460)
---------------- ----------------
Distributions from net realized capital
gains
Class A (28,389,294) (9,316,805)
Class B (27,972,256) (10,421,104)
Class C (1,234,352) (387,651)
Class Z (4,318,040) (1,315,694)
---------------- ----------------
(61,913,942) (21,441,254)
---------------- ----------------
Series share transactions (net of share
conversions) (Note 6)
Proceeds from shares sold $ 892,337,684 $ 489,274,646
Net asset value of shares issued in
reinvestment
of dividends and distributions 63,560,898 23,377,927
Cost of shares reacquired (891,445,112) (549,482,065)
---------------- ----------------
Net increase (decrease) in net assets from
Series
share transactions 64,453,470 (36,829,492)
---------------- ----------------
Total increase 64,928,423 140,389,629
NET ASSETS
Beginning of year 712,691,956 572,302,327
---------------- ----------------
End of year $ 777,620,379 $ 712,691,956
---------------- ----------------
---------------- ----------------
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Notes to Financial Statements
Prudential World Fund, Inc. (the 'Fund') is registered under the
Investment Company Act of 1940, as an open-end, diversified management
investment company and currently consists of three series: Prudential Global
Growth Fund (the 'Series'), Prudential International Value Fund and Jennison
International Growth Fund. The financial statements of the other series are not
presented herein. The Series commenced investment operations in May, 1984. The
investment objective of the Series is to seek long-term capital growth, with
income as a secondary objective, by investing in a diversified portfolio of
securities consisting of marketable securities of U.S. and non-U.S. issuers.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund and the Series in the preparation of its financial statements.
Securities Valuation: Securities traded on an exchange (whether
domestic or foreign) and NASDAQ National Market System securities are valued at
the last sales price of such exchange system on the day of valuation or, if
there was no sale on such day, the mean between the last bid and asked prices on
such day, or at the bid price on such day in the absence of an asked price.
Securities for which reliable market quotations are not readily available are
valued by the Valuation Committee or Board of Directors in consultation with the
manager or subadvisor.
Short-term securities which mature in more than 60 days are valued based
upon current market quotations. Short-term securities which mature in 60 days or
less are valued at amortized cost which approximates market value.
Repurchase Agreements: In connection with transactions in repurchase
agreements 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. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to ensure the adequacy of the collateral. If the seller defaults and
the value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by the
Fund may be delayed or limited.
All securities are valued as of 4:15 p.m., New York time.
Foreign Currency Translation: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
16
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Notes to Financial Statements Cont'd.
(i) market value of investment securities, other assets and
liabilities--at the closing daily rates of exchange;
(ii) purchases and sales of investment securities, income and expenses--at
the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the year, the Fund does not isolate that
portion of the results of operations arising as a result of changes in the
foreign exchange rates from the fluctuations arising from changes in the market
prices of securities held at year end. Similarly, the Fund does not isolate the
effect of changes in foreign exchange rates from the fluctuations arising from
changes in the market prices of long-term portfolio securities sold during the
year. Accordingly, these realized foreign currency gains (losses) are included
in the reported net realized gains (losses) on investment transactions.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains or losses from holdings of foreign currencies, currency
gains or losses realized between the trade and settlement dates on security
transactions, and the difference between the amounts of dividends, interest and
foreign taxes recorded on the Fund's books and the U.S. dollar equivalent
amounts actually received or paid. Net unrealized currency gains and losses from
valuing foreign currency denominated assets and liabilities (other than
investments) at year end exchange rates are reflected as a component of net
unrealized appreciation on investments and foreign currencies.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of domestic origin
as a result of, among other factors, the possibility of political and economic
instability and the level of governmental supervision and regulation of foreign
securities markets.
Forward Currency Contracts: A forward currency contract is a commitment
to purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current exchange rates and any
unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments and foreign currencies. Gain or loss is realized on
the settlement date of the contract equal to the difference between the
settlement value of the original and renegotiated forward contracts. This gain
or loss, if any, is included in net realized gain (loss) on foreign currency
transactions. Risks may arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
17
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Notes to Financial Statements Cont'd.
Swaps: A swap is an agreement between two parties to exchange a series
of cash flows at specified intervals. Based on a notional amount, each party
pays an interest rate or the change in the value of a security. Dividends and
interest on the securities in the swap are included in the value of the
exchange. The swaps are valued daily at current market value and any unrealized
gain or loss is included in net unrealized appreciation or depreciation on
investments. Gain or loss is realized on the termination date of the swap and is
equal to the difference between the Fund's basis in the swap and the proceeds of
the closing transaction, including any fees. During the period that the swap
agreement is open, the Fund may be subject to risk from the potential inability
of the counterparty to meet the terms of the agreement.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized gains and losses from
investment and currency transactions are calculated on the identified cost
basis. Dividend income is recorded on the ex-dividend date, and interest income
is recorded on an accrual basis. Expenses are recorded on the accrual basis
which may require the use of certain estimates by management.
Net investment income (loss), 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: The Fund expects to pay dividends of net
investment income and distributions of net realized capital and currency gains,
if any, annually. Dividends and distributions are recorded on the ex-dividend
date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Taxes: For federal income tax purposes, each series in the Fund is
treated as a separate taxpaying entity. It is the intent of the Series to
continue to meet the requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its taxable income to
shareholders. Therefore, no federal income tax provision is required.
Withholding taxes on foreign dividends, interest and capital gains have
been provided for in accordance with the Fund's understanding of the applicable
country's tax rules and rates.
Securities Lending: The Fund may lend securities to broker-dealers. The
loans are secured by collateral at least equal at all times to the market value
of the securities loaned. Loans are subject to termination at the option of the
borrower or the Fund. Upon termination of the loan, the borrower will return to
the Fund securities
18
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Notes to Financial Statements Cont'd.
identical to the loaned securities. The Fund may bear the risk of delay in
recovery of, or even loss of rights in, the securities loaned should the
borrower of the securities fail financially. The Fund receives compensation, net
of any rebate, for lending its securities in the form of fees or it retains a
portion of interest on the investment of any cash received as collateral. The
Fund also continues to receive interest and dividends on the securities loaned
and any gain or loss in the market price of the securities loaned that may occur
during the term of the loan.
Reclassification of Capital Accounts: The Fund accounts for and reports
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants' Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain and
Return of Capital Distributions by Investment Companies. The effect of applying
this statement was to decrease net investment loss by $16,807,339, decrease
accumulated net realized gain on investments by $85,780,369 and increase paid-in
capital by $68,973,030 for realized foreign currency losses, net operating loss,
passive foreign investment company mark-to-market adjustments and for
redemptions utilized as distributions for federal income tax purposes during the
year ended October 31, 2000. Net investment income, net realized gains and net
assets were not affected by this change.
Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. Pursuant to a subadvisory agreement between PIFM and The Prudential
Investment Corporation ('PIC'), PIC furnished investment advisory services in
connection with the management of the Fund from November 1, 1999 through October
1, 2000. Effective October 2, 2000, the Board of Directors terminated the
subadvisory agreement with PIC, and PIFM entered into a subadvisory agreement
with Jennison Associates LLC ('Jennison'), pursuant to which Jennison is paid
under the same terms as PIC. PIFM paid for the services of PIC and Jennison, the
compensation of officers of the Fund, occupancy and certain clerical and
bookkeeping costs of the Fund. The Fund bears all other costs and expenses.
The management fee paid to PIFM is computed daily and payable monthly, at
an annual rate of .75 of 1% of the average daily net assets of the Series.
Prior to January 1, 2000, PIC was reimbursed by PIFM for reasonable costs
and expenses incurred in furnishing investment advisory services. From January
1, through October 1, 2000, the subadvisory fee paid to PIC, and from October 2
19
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Notes to Financial Statements Cont'd.
through October 31, 2000, the subadvisory fee paid to Jennison by PIFM, was
computed daily and payable monthly at an annual rate of .375 of 1% of the
average daily net assets of the Series. The subadvisory fee has no impact on the
management fee charged to the Fund or its shareholders.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS'), which acts as the distributor of the Class A,
B, C and Z shares of the Fund. The Fund compensated PIMS for distributing and
servicing the Fund's Class A, Class B and Class C shares, pursuant to plans of
distribution, (the 'Class A, B and C Plans'), regardless of expenses actually
incurred by them. The distribution fees are accrued daily and payable monthly.
No distribution or service fees are paid to PIMS as distributor for the Class Z
shares of the Fund.
Pursuant to the Class A Plan, the Series compensates PIMS with respect to
Class A shares, for distribution-related activities at an annual rate of up to
.30 of 1% of the average daily net assets of the Class A shares. Pursuant to the
Class B and C Plans, the Series compensates PIMS for distribution-related
activities at the annual rate of .75 of 1% of the average daily net assets of
Class B shares up to the level of average daily net assets as of February 26,
1986, plus 1% of the average daily net assets in excess of such level of the
Class B shares, and 1% of average daily net assets of Class C shares. Payments
made pursuant to the Plans were .25 of 1%, .94 of 1% and 1% of the average daily
net assets of Class A, B and C shares, respectively, for the year ended October
31, 2000.
PIMS has advised the Series that for the year ended October 31, 2000, they
received approximately $228,900 and $45,600 in front-end sales charges resulting
from sales of Class A and Class C shares, respectively. From these fees, PIMS
paid such sales charges to affiliated broker-dealers, which in turn paid
commissions to salespersons and incurred other distribution costs.
PIMS has advised the Series that during the year ended October 31, 2000,
it received approximately $410,500 and $6,600 in contingent deferred sales
charges imposed upon certain redemptions by Class B and C shareholders,
respectively.
PIFM, PIC, PIMS, and Jennison are wholly owned subsidiaries of The
Prudential Insurance Company of America ('Prudential').
The Fund, along with other affiliated registered investment companies (the
'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $1 billion.
Interest on any such borrowings will be at market rates. The purpose of the
agreement is to serve as an alternative source of funding for capital share
redemptions. The Funds pay a commitment fee of .080 of 1% of the unused portion
of the credit facility. The commitment
20
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Notes to Financial Statements Cont'd.
fee is accrued and paid quarterly on a pro rata basis by the Funds. The
expiration date of the SCA is March 9, 2001. Prior to March 9, 2000, the
commitment fee was .065 of 1% of the unused portion of the credit facility.
The Series utilized the line of credit during the year ended October 31,
2000. The average daily balance and maximum amount the Series had outstanding
during the year, was approximately $2,362,750 and $3,970,000, respectively. The
average daily interest rate was 6.98%.
Note 3. Other Transactions With Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent and during the year ended October 31, 2000,
the Series incurred fees of approximately $1,252,500 for the services of PMFS.
As of October 31, 2000, approximately $91,600 of such fees were due to PMFS.
Transfer agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to nonaffiliates.
Prudential Securities Incorporated ('PSI'), a wholly owned subsidiary of
Prudential, is the securities lending agent for the Fund. For the year ended
October 31, 2000, PSI has been compensated approximately $151,000 for these
services of which approximately $35,000 is payable at year-end.
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the year ended October 31, 2000 were $634,259,811 and $696,964,503,
respectively.
The United States federal income tax basis of the Series' investments at
October 31, 2000 was $656,642,452 and, accordingly, net unrealized appreciation
for federal income tax purposes was $142,661,836 (gross unrealized
appreciation--$184,744,663; gross unrealized depreciation--$42,082,827).
As of October 31, 2000, the Series had securities on loan with an
aggregate market value of $40,814,019. The Fund received $41,338,152 in cash as
collateral for securities on loan which was used to purchase highly liquid
short-term investments in accordance with the Series' securities lending
procedures.
The Series entered into an equity index price return swap agreement with
Merrill Lynch International. At termination, the Series will receive from/pay to
the counterparty the amount of appreciation/(depreciation) in the value of the
underlying Dow Jones Euro Stoxx 50 (Price) Index. In addition, the Series
incurred certain transaction costs in connection with the agreement. The details
of the swap agreement are as follows:
21
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Notes to Financial Statements Cont'd.
<TABLE>
<CAPTION>
Termination Current Current
Open Date Date Shares Value Basis Depreciation
--------- ----------- ------ ----------- ----------- ------------
<C> <C> <S> <C> <C> <C>
9/15/00 12/15/00 852 $36,968,130 $38,197,749 $ (1,229,619)
</TABLE>
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment 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 October 31, 2000, the Fund
had a 3.08% undivided interest in the repurchase agreements in the joint
account. The undivided interest for the Series represents $20,293,000 in
principal amount. As of such date, each repurchase agreement in the joint
account and the collateral therefore were as follows:
ABN AMRO Incorporated, 6.56%, in the principal amount of $150,000,000,
repurchase price $150,027,333, due 11/1/00. The value of the collateral
including accrued interest was $153,000,176.
Bear, Stearns & Co. Inc., 6.56%, in the principal amount of $175,000,000,
repurchase price $175,031,889, due 11/1/00. The value of the collateral
including accrued interest was $184,628,570.
Chase Securities Inc., 6.56%, in the principal amount of $115,000,000,
repurchase price $115,020,956, due 11/1/00. The value of the collateral
including accrued interest was $117,304,831.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 6.375%, in the principal
amount of $43,782,000, repurchase price $43,789,753, due 11/1/00. The value of
the collateral including accrued interest was $44,659,885.
UBS Warburg, 6.56%, in the principal amount of $175,000,000, repurchase
price $175,031,889, due 11/1/00. The value of the collateral including accrued
interest was $178,501,724.
Note 6. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with a front-end sales charge of up to 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 front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. A special exchange
privilege is also available for shareholders who qualify to purchase Class A
shares at net asset value. Class Z shares are not
22
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Notes to Financial Statements Cont'd.
subject to any sales or redemption charge and are offered exclusively for sale
to a limited group of investors.
There are 500 million authorized shares of $.01 par value common stock,
divided equally into four classes, designated Class A, Class B, Class C and
Class Z common stock.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
-------------------------------------------------------- ------------ -------------
<S> <C> <C>
Year ended October 31, 2000:
Shares sold 23,605,336 $ 560,629,691
Shares issued in reinvestment of distributions 1,317,634 29,804,892
Shares reacquired (24,315,105) (581,636,415)
------------ -------------
Net increase in shares outstanding before conversion 607,865 8,798,168
Shares issued upon conversion from Class B 1,951,403 47,137,526
------------ -------------
Net increase in shares outstanding 2,559,268 $ 55,935,694
------------ -------------
------------ -------------
Year ended October 31, 1999:
Shares sold 13,518,704 $ 254,698,276
Shares issued in reinvestment of distributions 666,308 10,960,764
Shares reacquired (14,682,814) (277,579,563)
------------ -------------
Net decrease in shares outstanding before conversion (497,802) (11,920,523)
Shares issued upon conversion from Class B 993,970 18,903,039
------------ -------------
Net increase in shares outstanding 496,168 $ 6,982,516
------------ -------------
------------ -------------
<CAPTION>
Class B
--------------------------------------------------------
<S> <C> <C>
Year ended October 31, 2000:
Shares sold 7,648,703 $ 170,944,436
Shares issued in reinvestment of distributions 1,296,268 27,649,390
Shares reacquired (7,988,496) (177,800,125)
------------ -------------
Net increase in shares outstanding before conversion 956,475 20,793,701
Shares reacquired upon conversion into Class A (2,075,961) (47,137,526)
------------ -------------
Net decrease in shares outstanding (1,119,486) $ (26,343,825)
------------ -------------
------------ -------------
Year ended October 31, 1999:
Shares sold 8,358,906 $ 147,941,437
Shares issued in reinvestment of distributions 661,620 10,321,280
Shares reacquired (10,401,728) (183,866,717)
------------ -------------
Net decrease in shares outstanding before conversion (1,381,202) (25,604,000)
Shares reacquired upon conversion into Class A (1,051,842) (18,903,039)
------------ -------------
Net decrease in shares outstanding (2,433,044) $ (44,507,039)
------------ -------------
</TABLE>
23
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Notes to Financial Statements Cont'd.
<TABLE>
<CAPTION>
Class C Shares Amount
-------------------------------------------------------- ------------ -------------
Year ended October 31, 2000:
<S> <C> <C>
Shares sold 2,475,595 $ 55,018,619
Shares issued in reinvestment of distributions 58,297 1,243,470
Shares reacquired (2,174,909) (48,553,752)
------------ -------------
Net increase in shares outstanding 358,983 $ 7,708,337
------------ -------------
Year ended October 31, 1999:
Shares sold 2,698,972 $ 47,616,508
Shares issued in reinvestment of distributions 24,783 386,616
Shares reacquired (2,715,319) (47,898,845)
------------ -------------
Net increase in shares outstanding 8,436 $ 104,279
------------ -------------
<CAPTION>
Class Z
--------------------------------------------------------
<S> <C> <C>
Year ended October 31, 2000:
Shares sold 4,349,365 $ 105,744,938
Shares issued in reinvestment of distributions 214,330 4,863,146
Shares reacquired (3,532,169) (83,454,820)
------------ -------------
Net increase in shares outstanding 1,031,526 $ 27,153,264
------------ -------------
------------ -------------
Year ended October 31, 1999:
Shares sold 2,088,178 $ 39,018,425
Shares issued in reinvestment of distributions 103,655 1,709,267
Shares reacquired (2,156,231) (40,136,940)
------------ -------------
Net increase in shares outstanding 35,602 $ 590,752
------------ -------------
------------ -------------
</TABLE>
24
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Financial
Highlights
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Financial Highlights
<TABLE>
<CAPTION>
Class A
-------------------
Year Ended
October 31, 2000(a)
-----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 21.19
----------
Income from investment operations
Net investment loss(c) (.09)
Net realized and unrealized gain on investment and foreign
currency transactions 2.25
----------
Total from investment operations 2.16
----------
Less distributions
Distributions in excess of net investment income (.19)
Distributions from net realized capital gains (1.81)
----------
Total distributions (2.00)
----------
Net asset value, end of year $ 21.35
----------
----------
TOTAL RETURN(b): 9.80%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 396,870
Average net assets (000) $ 415,035
Ratios to average net assets(c):
Expenses, including distribution fees 1.27%
Expenses, excluding distribution fees 1.02%
Net investment income (loss) (.38)%
For Class A, B, C and Z shares:
Portfolio turnover rate 82%
</TABLE>
------------------------------
(a) Based on average shares outstanding.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each year reported and includes reinvestment of dividends and
distributions.
(c) For the fiscal year ended October 31, 2000, the distributor of the Fund has
contractually agreed to reduce its distribution and service (12b-1) fees for
Class A shares to .25 of 1% of the average net assets of the Class A shares.
26 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------------------------------
Year Ended October 31,
-------------------------------------------------------------------------------------
1999(a) 1998(a) 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 16.16 $ 17.27 $ 16.62 $ 15.52
---------------- ---------------- ---------------- ----------------
(.05) (.02) (.01) --
5.82 .82 1.96 1.83
---------------- ---------------- ---------------- ----------------
5.77 .80 1.95 1.83
---------------- ---------------- ---------------- ----------------
(.14) (.11) (.05) --
(.60) (1.80) (1.25) (.73)
---------------- ---------------- ---------------- ----------------
(.74) (1.91) (1.30) (.73)
---------------- ---------------- ---------------- ----------------
$ 21.19 $ 16.16 $ 17.27 $ 16.62
---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ----------------
36.83% 5.71% 12.42% 12.33%
$339,620 $251,018 $258,080 $234,700
$298,009 $260,774 $265,380 $222,948
1.32% 1.38% 1.39% 1.45%
1.07% 1.13% 1.14% 1.20%
(.27)% (.14)% .01% (.04)%
59% 61% 64% 52%
</TABLE>
See Notes to Financial Statements 27
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class B
-------------------
Year Ended
October 31, 2000(a)
-----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 19.98
----------
Income from investment operations
Net investment loss (.24)
Net realized and unrealized gain on investment and foreign
currency transactions 2.12
----------
Total from investment operations 1.88
----------
Less distributions
Distributions in excess of net investment income (.05)
Distributions from net realized capital gains (1.81)
----------
Total distributions (1.86)
----------
Net asset value, end of year $ 20.00
----------
----------
TOTAL RETURN(b): 8.94%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 288,418
Average net assets (000) $ 355,100
Ratios to average net assets:
Expenses, including distribution fees 1.96%
Expenses, excluding distribution fees 1.02%
Net investment loss (1.07)%
</TABLE>
------------------------------
(a) Based on average shares outstanding.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each year reported and includes reinvestment of dividends and
distributions.
28 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class B
-------------------------------------------------------------------------------------
Year Ended October 31,
-------------------------------------------------------------------------------------
1999(a) 1998(a) 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15.26 $ 16.42 $ 15.96 $ 15.03
---------------- ---------------- ---------------- ----------------
(.17) (.13) (.12) (.08)
5.51 .78 1.88 1.74
---------------- ---------------- ---------------- ----------------
5.34 .65 1.76 1.66
---------------- ---------------- ---------------- ----------------
(.02) (.01) (.05) --
(.60) (1.80) (1.25) (.73)
---------------- ---------------- ---------------- ----------------
(.62) (1.81) (1.30) (.73)
---------------- ---------------- ---------------- ----------------
$ 19.98 $ 15.26 $ 16.42 $ 15.96
---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ----------------
36.00% 4.95% 11.70% 11.57%
$310,458 $274,248 $335,007 $326,978
$297,322 $312,569 $350,518 $294,230
1.99% 2.06% 2.07% 2.12%
1.07% 1.13% 1.14% 1.20%
(.96)% (.82)% (.68)% (.67)%
</TABLE>
See Notes to Financial Statements 29
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class C
-------------------
Year Ended
October 31, 2000(a)
-----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 19.97
--------
Income from investment operations
Net investment loss (.24)
Net realized and unrealized gain on investment and foreign
currency transactions 2.11
--------
Total from investment operations 1.87
--------
Less distributions
Distributions in excess of net investment income (.04)
Distributions from net realized capital gains (1.81)
--------
Total distributions (1.85)
--------
Net asset value, end of year $ 19.99
--------
--------
TOTAL RETURN(b): 8.89%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $21,377
Average net assets (000) $18,886
Ratios to average net assets:
Expenses, including distribution fees 2.02%
Expenses, excluding distribution fees 1.02%
Net investment loss (1.11)%
</TABLE>
------------------------------
(a) Based on average shares outstanding.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each year reported and includes reinvestment of dividends and
distributions.
(c) Distribution in excess of net investment income was $.001.
30 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class C
-------------------------------------------------------------------------------------
Year Ended October 31,
-------------------------------------------------------------------------------------
1999(a) 1998(a) 1997 1996
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 15.25 $ 16.41 $ 15.96 $15.03
-------- -------- -------- -------
(.18) (.14) (.11) (.05)
5.51 .78 1.86 1.71
-------- -------- -------- -------
5.33 .64 1.75 1.66
-------- -------- -------- -------
(.01) --(c) (.05) --
(.60) (1.80) (1.25) (.73)
-------- -------- -------- -------
(.61) (1.80) (1.30) (.73)
-------- -------- -------- -------
$ 19.97 $ 15.25 $ 16.41 $15.96
-------- -------- -------- -------
-------- -------- -------- -------
35.94% 4.90% 11.63% 11.57%
$ 14,184 $ 10,698 $ 10,244 $7,693
$ 11,866 $ 10,286 $ 9,093 $5,516
2.07% 2.13% 2.14% 2.20%
1.07% 1.13% 1.14% 1.20%
(1.02)% (.90)% (.75)% (.72)%
</TABLE>
See Notes to Financial Statements 31
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class Z
-------------------
Year Ended
October 31, 2000(a)
-----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 21.29
--------
Income from investment operations
Net investment income (loss) (.02)
Net realized and unrealized gain on investment and foreign
currency transactions 2.23
--------
Total from investment operations 2.21
--------
Less distributions
Distributions in excess of net investment income (.23)
Distributions from net realized capital gains (1.81)
--------
Total distributions (2.04)
--------
Net asset value, end of year $ 21.46
--------
--------
TOTAL RETURN(b): 9.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $70,956
Average net assets (000) $77,989
Ratios to average net assets:
Expenses, including distribution fees 1.02%
Expenses, excluding distribution fees 1.02%
Net investment income (loss) (.08)%
</TABLE>
------------------------------
(a) Based on average shares outstanding.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods of less than a full year are not
annualized.
(c) Commencement of offering of Class Z shares.
(d) Annualized.
32 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class Z
-------------------------------------------------------------------------------------
Year Ended October 31, March 1, 1996(c)
---------------------------------------------------------- through
1999(a) 1998(a) 1997 October 31, 1996
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 16.23 $ 17.35 $ 16.65 $ 15.42
-------- -------- -------- --------
-- .02 .04 .06
5.84 .82 1.96 1.18
-------- -------- -------- --------
5.84 .84 2.00 1.24
-------- -------- -------- --------
(.18) (.16) (.05) --
(.60) (1.80) (1.25) (.01)
-------- -------- -------- --------
(.78) (1.96) (1.30) (.01)
-------- -------- -------- --------
$ 21.29 $ 16.23 $ 17.35 $ 16.65
-------- -------- -------- --------
-------- -------- -------- --------
37.25% 5.97% 12.72% 8.06%
$ 48,430 $ 36,338 $ 44,412 $ 40,416
$ 42,312 $ 41,799 $ 46,545 $ 26,452
1.07% 1.13% 1.14% 1.20%(d)
1.07% 1.13% 1.14% 1.20%(d)
(.02)% .12% .27% .55%(d)
</TABLE>
See Notes to Financial Statements 33
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Report of Independent Accountants
To the Shareholders and Board of Directors
Prudential World Fund, Inc.--Prudential Global Growth 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 Prudential World Fund,
Inc.--Prudential Global Growth Fund (the 'Fund', one of the portfolios
constituting Prudential World Fund, Inc.) at October 31, 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 four years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America. 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 of America, 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 October 31, 2000 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion. The accompanying financial
highlights for the period ended October 31, 1996 were audited by other
independent accountants, whose opinion dated December 13, 1996 was unqualified.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
December 20, 2000
34
<PAGE>
Prudential World Fund, Inc. Prudential Global Growth Fund
Federal Income Tax Information (Unaudited)
We are required by the Internal Revenue Code to advise you within 60 days
of the Series' fiscal year end (October 31, 2000) as to the federal tax status
of dividends paid by the Series during such fiscal year. Accordingly, we are
advising you that in the fiscal year ended October 31, 2000, dividends were paid
of $.19, $.05, $.04 and $.23 per share (representing net investment income and
short-term capital gains) for Class A, B, C and Z shares respectively, which are
taxable as ordinary income. In addition, the Series paid to Class A, B, C, and Z
shares a long-term capital gain distribution of $1.81 which is taxable as such.
The Fund utilized redemptions as distributions in the amount of $.165 and $1.676
of ordinary income and long-term capital gains, respectively, for each class of
shares.
We wish to advise you that the corporate dividends received deduction for
the Series is 12.05%. Only funds that invest in U.S. equity securities are
entitled to pass-through a corporate dividends received deduction.
In January 2001, you will be advised on IRS Form 1099 DIV or substitute
1099 DIV as to the federal tax status of the dividends and distributions
received by you in calendar year 2000.
35
<PAGE>
Prudential Global Growth Fund
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 professional 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 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
Prudential Value 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
<PAGE>
www.prudential.com (800) 225-1852
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
New Jersey Series
New York 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>
Prudential Global Growth Fund
Getting the Most from Your Prudential Mutual Fund
Some mutual fund shareholders won't ever read this--
they don't read annual and semiannual reports. It's
quite understandable. These annual and semiannual
reports are prepared to comply with federal
regulations, and are often written in language that
is difficult to understand. So when most people run
into those particularly daunting sections of these
reports, they don't read them.
WE THINK THAT'S A MISTAKE
At Prudential Mutual Funds, we've made some changes
to our report to make it easier to understand and
more pleasant to read. We hope you'll find it
profitable to spend a few minutes familiarizing
yourself with your investment. Here's what you'll
find in the report:
PERFORMANCE AT A GLANCE
Since an investment's performance is often a
shareholder's primary concern, we present
performance information in two different formats.
You'll find it first on the "Performance at a
Glance" page where we compare the Fund and the
comparable average calculated by Lipper, Inc., a
nationally recognized mutual fund rating agency. We
report both the cumulative total returns and the
average annual total returns. The cumulative total
return is the total amount of income and
appreciation the Fund has achieved in various time
periods. The average annual total return is an
annualized representation of the Fund's
performance. It gives you an idea of how much the
Fund has earned in an average year for a given time
period. Under the performance box, you'll see
legends that explain the performance information,
whether fees and sales charges have been included
in returns, and the inception dates for the Fund's
share classes.
See the performance comparison charts at the back
of the report for more performance information.
Please keep in mind that past performance is not
indicative of future results.
<PAGE>
www.prudential.com (800) 225-1852
INVESTMENT ADVISER'S REPORT
The portfolio manager, who invests your money for
you, reports on successful--and not-so-successful--
strategies in this section of your report. Look
for recent purchases and sales here, as well as
information about the sectors the portfolio manager
favors, and any changes that are on the drawing board.
PORTFOLIO OF INVESTMENTS
This is where the report begins to appear
technical, but it's really just a listing of
each security held at the end of the reporting
period, along with valuations and other
information. Please note that sometimes we discuss
a security in the "Investment Adviser's Report"
section that doesn't appear in this listing because
it was sold before the close of the reporting
period.
STATEMENT OF ASSETS AND LIABILITIES
The balance sheet shows the assets (the value of
the Fund's holdings), liabilities (how much the Fund
owes), and net assets (the Fund's equity, or holdings
after the Fund pays its debts) as of the end of
the reporting period. It also shows how we calculate
the net asset value per share for each class of shares.
The net asset value is reduced by payment of your
dividend, capital gain, or other distribution, but
remember that the money or new shares are being
paid or issued to you. The net asset value
fluctuates daily, along with the value of every
security in the portfolio.
STATEMENT OF OPERATIONS
This is the income statement, which details income
(mostly interest and dividends earned) and expenses
(including what you pay us to manage your money).
You'll also see capital gains here--both realized
and unrealized.
<PAGE>
Prudential Global Growth Fund
Getting the Most from Your Prudential Mutual Fund
STATEMENT OF CHANGES IN NET ASSETS
This schedule shows how income and expenses
translate into changes in net assets. The
Fund is required to pay out the bulk of its
income to shareholders every year, and
this statement shows you how we do it (through
dividends and distributions) and how that affects
the net assets. This statement also shows how money
from investors flowed into and out of the Fund.
NOTES TO FINANCIAL STATEMENTS
This is the kind of technical material that can
intimidate readers, but it does contain useful
information. The Notes provide a brief history and
explanation of your Fund's objectives. In addition,
they outline how Prudential Mutual Funds prices
securities. The Notes also explain who manages and
distributes the Fund's shares and, more
importantly, how much they are paid for doing so.
Finally, the Notes explain how many shares are
outstanding and the number issued and redeemed over
the period.
FINANCIAL HIGHLIGHTS
This information contains many elements from prior
pages, but on a per-share basis. It is designed
to help you understand how the Fund performed, and
to compare this year's performance and expenses to
those of prior years.
INDEPENDENT ACCOUNTANT'S REPORT
Once a year, an independent accountant looks over
our books and certifies that the financial
statements are fairly presented in accordance with
generally accepted accounting principles.
TAX INFORMATION
This is information that we report annually about
how much of your total return is taxable. Should
you have any questions, you may want to consult a
tax adviser.
<PAGE>
www.prudential.com (800) 225-1852
PERFORMANCE COMPARISON
These charts are included in the annual report and
are required by the Securities Exchange Commission.
Performance is presented here as a hypothetical
$10,000 investment in the Fund since its inception
or for 10 years (whichever is shorter). To help you
put that return in context, we are required to
include the performance of an unmanaged, broad-based
securities index as well. The index does not reflect
the cost of buying the securities it contains or the
cost of managing a mutual fund. Of course, the index
holdings do not mirror those of the Fund--the
index is a broad-based reference point commonly
used by investors to measure how well they are
doing. A definition of the selected index is also
provided. Investors cannot invest directly in an index.
<PAGE>
Prudential Global Growth Fund
Class A Growth of a $10,000 Investment
(GRAPHIC)
Average Annual Total Returns as of 10/31/00
Since Inception
One Year Five Years Ten Years (1/22/90)
With Sales Charge 4.31% 13.76% 12.81% 10.58%
Without Sales Charge 9.80% 14.93% 13.39% 11.10%
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. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from year
to year by measuring the best and worst calendar
years in terms of total annual return for the
ten-year period. The graph compares a $10,000
investment in the Prudential Global Growth Fund
(Class A shares) with a similar investment in the
Morgan Stanley Capital International World Index
(MSCI World Index) by portraying the initial
account value at the commencement of operations
of Class A shares, and the account value at the
end of the current fiscal year (October 31, 2000), as
measured on a quarterly basis. For purposes of the
graph, and unless otherwise indicated, it has been
assumed that (a) the maximum applicable front-end
sales charge was deducted from the initial $10,000
investment in Class A shares; (b) all recurring
fees (including management fees) were deducted; and
(c) all dividends and distributions were
reinvested.
The MSCI World Index is a weighted, unmanaged index
of performance of approximately 1,500 securities
listed on stock exchanges of the United States,
Europe, Canada, Australia, and the Far East. The
MSCI World Index's total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI World Index may differ substantially from the
securities in the Fund. The MSCI World Index is not
the only one that may be used to characterize
performance of global stock funds. Other indexes
may portray different comparative performance.
Investors cannot invest directly in an index.
This graph is furnished to you in accordance with
SEC regulations.
<PAGE>
www.prudential.com (800) 225-1852
Class B Growth of a $10,000 Investment
(GRAPHIC)
Average Annual Total Returns as of 10/31/00
Since Inception
One Year Five Years Ten Years (5/15/84)
With Sales Charge 3.94% 14.03% 12.59% 13.51%
Without Sales Charge 8.94% 14.15% 12.59% 13.51%
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. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from
year to year by measuring the best and worst
calendar years in terms of total annual return for
the ten-year period. The graph compares a $10,000
investment in the Prudential Global Growth Fund
(Class B shares) with a similar investment in the
Morgan Stanley Capital International World Index
(MSCI World Index) by portraying the initial
account value at the commencement of operations
of Class B shares, and the account value at the
end of the current fiscal year (October 31, 2000),
as measured on a quarterly basis. For purposes of
the graph, and unless otherwise indicated, it
has been assumed that (a) the maximum applicable
contingent deferred sales charge was deducted
from the value of the investment in Class B shares,
assuming full redemption on October 31, 2000; (b)
all recurring fees (including management fees)
were deducted; and (c) 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 MSCI World Index is a weighted, unmanaged index
of performance of approximately 1,500 securities
listed on stock exchanges of the United States,
Europe, Canada, Australia, and the Far East. The
MSCI World Index total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI World Index may differ substantially from the
securities in the Fund. The MSCI World Index is not
the only one that may be used to characterize
performance of global stock funds. Other indexes
may portray different comparative performance.
Investors cannot invest directly in an index.
This graph is furnished to you in accordance with
SEC regulations.
<PAGE>
Prudential Global Growth Fund
Class C Growth of a $10,000 Investment
(GRAPHIC)
Average Annual Total Returns as of 10/31/00
One Year Five Years Ten Years Since Inception
With Sales Charge 6.80% 13.87% N/A 12.44%
Without Sales Charge 8.89% 14.10% N/A 12.62%
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. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from year
to year by measuring the best and worst calendar
years in terms of total
annual return since inception of the share class.
The graph compares a $10,000 investment in the
Prudential Global Growth Fund (Class C shares) with
a similar investment in the Morgan Stanley Capital
International World Index (MSCI World Index) by
portraying the initial account value at the
commencement of operations of Class C shares, and
the account value at the end of the current fiscal
year (October 31, 2000), as measured on a quarterly
basis. For purposes of the graph, and unless
otherwise indicated, it has been assumed that (a)
the maximum applicable front-end sales charge was
deducted from the initial $10,000 investment in
Class C shares; (b) the maximum applicable
contingent deferred sales charge was deducted from
the value of the investment in Class C shares,
assuming full redemption on October 31, 2000; (c)
all recurring fees (including management fees) were
deducted; and (d) all dividends and distri-butions
were reinvested.
The MSCI World Index is a weighted, unmanaged index
of performance of approximately 1,500 securities
listed on stock exchanges of the United States,
Europe, Canada, Australia, and the Far East. The
MSCI World Index's total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI World Index may differ substantially from the
securities in the Fund. The MSCI World Index is not
the only one that may be used to characterize
performance of global stock funds. Other indexes
may portray different comparative performance.
Investors cannot invest directly in an index.
This graph is furnished to you in accordance with
SEC regulations.
<PAGE>
www.prudential.com (800) 225-1852
Class Z Growth of a $10,000 Investment
(GRAPHIC)
Average Annual Total Returns as of 10/31/00
One Year Five Years Ten Years Since Inception
With Sales Charge 9.97% N/A N/A 15.36%
Without Sales Charge 9.97% N/A N/A 15.36%
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. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from year
to year by measuring the best and worst calendar
years in terms of total annual return since inception
of the share class. The graph compares a $10,000
investment in the Prudential Global Growth Fund
(Class Z shares) with a similar investment in the
Morgan Stanley Capital International World Index
(MSCI World Index) by portraying the initial
account value at the commencement of operations of
Class Z shares, and the account value at the end
of the current fiscal year (October 31, 2000), as
measured on a quarterly basis. For purposes of
the graph, and unless otherwise indicated, it has
been assumed that (a) all recurring fees (including
management fees) were deducted, and (b) all
dividends and distributions were reinvested. Class
Z shares are not subject to a sales charge or
distribution and service (12b-1) fees.
The MSCI World Index is a weighted, unmanaged index
of performance of approximately 1,500 securities
listed on stock exchanges of the United States,
Europe, Canada, Australia, and the Far East. The
MSCI World Index's total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI World Index may differ substantially from the
securities in the Fund. The MSCI World Index is not
the only one that may be used to characterize
performance of global stock funds. Other indexes
may portray different comparative performance.
Investors cannot invest directly in an index.
This graph is furnished to you in accordance with
SEC regulations.
<PAGE>
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Visit Prudential's website at:
http://www.prudential.com
Directors
Delayne Dedrick Gold
Robert F. Gunia
Robert E. LaBlanc
David R. Odenath, Jr.
Judy A. Rice
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Clay T. Whitehead
Officers
David R. Odenath, Jr., President
Robert F. Gunia, 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
Jennison Associates LLC
466 Lexington Avenue
New York, NY 10017
Distributor
Prudential Investment
Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Fund Symbols NASDAQ CUSIP
Class A PRGAX 743969107
Class B PRGLX 743969206
Class C PRGCX 743969305
Class Z PWGZX 743969404
MF115E
(LOGO) Printed on Recycled Paper
<PAGE>
ANNUAL REPORT OCTOBER 31, 2000
Prudential
Jennison International Growth Fund
Fund Type Global/International Stock Funds
Objective Long-term growth of capital
(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
The Prudential Jennison International Growth Fund
seeks long-term growth of capital by investing
primarily in equity-related securities of foreign
issuers. We typically invest in about 60 securities
of companies whose shares appear attractively
valued both absolutely and when compared to the
overall market. We look for large- and mid-cap
companies that have above-average earnings growth
and above-average growth potential over the long
term, as well as strong financial and operational
characteristics. Special risks are associated with
foreign investments, including political, economic
and social risks, and potential illiquidity. There
can be no assurance that the Fund will achieve its
investment objective.
Portfolio Composition
Sectors expressed as a percentage of
net assets as of 10/31/00
35.0% Communications Services
27.3 Technology
11.9 Consumer Cyclical
8.8 Financial Services
4.8 Healthcare
4.2 Basic Industries
3.0 Intermediate Goods and Services
2.5 Consumer Staples
1.5 Utilities
1.0 Cash & Equivalents
Geographic Concentration
Expressed as a percentage of
net assets as of 10/31/00
27.9% United Kingdom
15.9 Netherlands
11.5 France
8.2 Hong Kong
6.6 Singapore
6.1 Finland
4.0 Germany
3.7 Mexico
16.1 Other
Ten Largest Holdings
Expressed as a percentage of
net assets as of 10/31/00
4.1% Pearson PLC
Media & Entertainment
4.0 Royal Phillips Electronics N.V.
Electronic Components
4.0 Nokia Oyj
Telecommunications Equipment
3.9 Cable & Wireless PLC
Telecommunications Services
3.8 Vodafone AirTouch PLC
Telecommunications Services
3.5 DBS Group Holdings Ltd.
Banks & Financial Services
3.4 Logica PLC
Computer Software & Services
3.4 Dimension Data Holdings PLC
Network Systems
3.4 VNU N.V.
Publishing
3.2 Li & Fung Ltd.
Exporting/Importing
Holdings are subject to change.
<PAGE>
www.prudential.com (800) 225-1852
Performance at a Glance
Cumulative Total Returns1 As of 10/31/00
<TABLE>
<CAPTION>
Since Inception2 Since Inception2
(Without sales charge) (With sales charge)
<S> <C> <C>
Class A -21.00% -24.95%
Class B -21.40 -26.40
Class C -21.40 -23.19
Class Z -20.90 -20.90
Lipper International Fund Avg.3 -14.84 N/A
</TABLE>
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost.
1 Source: Prudential Investments Fund Management
LLC and Lipper Inc. Since the Fund has been in
existence less than one year, no average annual
total returns are presented. The Fund charges a
maximum front-end sales charge of 5% for Class A
shares. Class B shares are subject to a declining
contingent deferred sales charge (CDSC) of 5%, 4%,
3%, 2%, 1%, and 1% for six years. Class B shares
will automatically convert to Class A shares, on a
quarterly basis, approximately seven years after
purchase. Class C shares are subject to a front-end
sales charge of 1% and a CDSC of 1% for 18 months.
Class Z shares are not subject to a sales charge or
distribution and service (12b-1) fees.
2 Inception date: Class A, B, C, and Z, 3/1/2000.
3 Lipper average returns are for all funds in each
share class for the since inception period in the
International Fund category. The Lipper average is
unmanaged. International funds invest their assets
in securities with primary trading markets outside
the United States.
1
<PAGE>
(LOGO) December 15, 2000
Dear Shareholder,
The environment for global stock markets continued
to be challenging throughout the period covered by
this report. Stocks in sectors heavily favored by
the Prudential Jennison International Growth Fund,
particularly high-growth areas such as
telecommunications and technology, came under
severe downward pressure in the spring, and again
in the early fall. This pressure contributed to a
loss of 21.00% for the Prudential Jennison
International Growth Fund's Class A shares from its
inception on March 1, 2000, through October 31,
2000. The decline was 24.95% for those paying the
maximum one-time Class A share sales charge. In
comparison, the Lipper International Fund Average
posted a loss of 14.84%.
One factor that exerted a negative influence on the
markets during the reporting period was a slowing
U.S. economy. Just as a rock-solid U.S. economy
helped to contain the Asian financial crisis
several years ago, investors worried that weakening
growth in the United States would undermine the
global markets. As pointed out in the Investment
Adviser's Report, however, our management team sees
good long-term potential for many of the Fund's
holdings, based on bright earnings prospects and
more realistic valuations.
When markets correct sharply, it is easy to find
yourself following them on a daily basis. The
Fund's management team generally makes investment
decisions on the basis of a two- to three-year time
horizon. This longer-term outlook and consistent
emphasis on the fastest-growing stocks provide
investors with a useful discipline that should
complement a variety of investment portfolios.
Sincerely,
David R. Odenath, Jr., President
Prudential Jennison International Growth Fund
2
<PAGE>
Prudential Jennison International Growth Fund
Annual Report October 31, 2000
INVESTMENT ADVISER'S REPORT
SLOWING U.S. ECONOMY KEEPS MARKETS ON DEFENSIVE
A slowing U.S. economy and rising interest rates
kept global stock markets on the defensive during
the eight-month period since the Prudential
Jennison International Growth Fund's inception. The
beginning of the period coincided with the peak of
a powerful rally in telecommunications, media, and
technology (TMT) stocks that had started in November
1999. By early March, this rally carried share prices
in the favored sectors to unsustainable heights. At
the same time, the Federal Reserve Board (the Fed)
continued to ratchet up short-term interest rates
in the United States, adding a 0.25% hike in March
to the four increases made since June 1999. Rising
rates tend to have a dampening effect on economic
growth and on corporate earnings. With valuations
stretched, a sharp correction ensued in worldwide
TMT share prices. Markets in Europe and Asia
followed the lead of the Nasdaq Composite Index (a
U.S. composite index that is heavily weighted in
TMT issues), which swooned 37.3% from a March peak
to a May trough.
SUMMER BRINGS MARKET RECOVERY
In May, the Fed increased interest rates once
again, this time by a larger increment of 0.50%.
Sensing that this might be the final increase for
the foreseeable future, investors became more
optimistic about stocks. Accordingly, most global
equity markets made substantial recoveries over the
summer, although the more speculative elements of
the markets were ignored in favor of stocks with
solid earnings growth prospects. In addition,
indications of decelerating growth in the U.S.
economy prompted the rotation of some investor
money into defensive and interest-rate-sensitive
sectors such as healthcare, consumer nondurables,
and financial services. However, we did not
participate meaningfully in this shift, given the
strong growth prospects for many of the Fund's TMT
holdings.
3
<PAGE>
Prudential Jennison International Growth Fund
Holdings expressed as a percentage of the Fund's net assets
Comments on Largest Holdings As of 10/31/00
-------------------------------------------------------------
4.1% Pearson PLC (United Kingdom)/Media & Entertainment
Pearson is a global media company that is rapidly
developing electronic distribution channels for its
educational, entertainment, and business content.
It owns Simon & Schuster educational publishing,
50% of The Economist, and the Financial Times
Group, among other enterprises. We anticipate a
compound annual earnings growth of approximately 18%.
4.0% Royal Philips Electronics N.V. (Netherlands)/Electronic Components
A global conglomerate operating in seven areas:
consumer products, components, semiconductors,
information technology, lighting, professional
products, and a segment comprised of ancillary
businesses.
4.0% Nokia Oyj (Finland)/Telecommunications Equipment
The leading global manufacturer of wireless
telephones, a market that has beaten all growth
forecasts. New digital services, such as short
messaging and Internet access, are expected to add
to revenue growth.
3.9% Cable & Wireless PLC (United Kingdom)/Telecommunications Services
A global telecommunications business focused on
providing high-performance global Internet protocol
(IP) and data services to business customers.
3.8% Vodafone AirTouch PLC (United Kingdom)/Telecommunications Services
Already the largest provider of cellular
telephone services in the world, Vodafone recently
agreed to buy a $2.5 billion stake in China Mobile,
giving the company a significant presence in the
Chinese cellular phone market.
Holdings are subject to change.
4
<PAGE>
www.prudential.com (800) 225-1852
Annual Report October 31, 2000
September and October brought renewed downward
pressure on TMT stocks. Indications of weakening
demand for semiconductors, DRAM (dynamic random
access memory), and other personal computer
components, together with lower-than-expected
third-quarter earnings or warnings about future
quarters from a number of prominent U.S. companies,
caused the markets to sell off sharply once again.
Seasonal factors may have exacerbated the selling.
OIL PRICES AND FALLING EURO HURT EUROPEAN STOCKS
Two other factors were particularly negative
influences on European stocks, which comprised
approximately 75% of the Fund's holdings at period-
end. The euro continued to fall relative to the
U.S. dollar, decreasing the value of European
investments expressed in dollars. Even a rare
coordinated intervention to support the euro in
September failed to have significant lasting
effects. In addition, crude oil prices, which are
quoted in U.S. dollars, surged higher, stoking
inflation fears and prompting a number of strikes
and protests in euro-zone countries.
STOCK SELECTION CRITERIA
Against this challenging backdrop, during which we
were admittedly out of step with the prevailing
trends, it may be helpful to summarize how we make
investment decisions for the Fund. First, we favor
a 100% bottom-up approach to selecting stocks,
meaning that we build the portfolio one stock at a
time based strictly on fundamental prospects over a
two- to three-year investment horizon. We do not
employ top-down analysis to decide, for example,
which regions or countries offer the most promise
and then derive decisions about individual holdings
from those judgments. The fact that the Fund had
roughly three-quarters of its capital allocated to
European stocks at the end of the period reflected
no general decision about Europe, but rather the
fact that European stocks scored most favorably on
our quantitative and qualitative evaluation
methodologies.
5
<PAGE>
Prudential Jennison International Growth Fund
Annual Report October 31, 2000
Second, we look for companies offering above-
average growth, which we define as growth that is
well in excess of both underlying gross domestic
product (GDP), and average industry growth rates.
Moreover, we're interested in growth that is driven
by powerful demand for a company's products or
services--not simply due to where we happen to be in
the economic cycle. The Fund features a relatively
concentrated portfolio with an average of 40 to 60
holdings. Each holding can therefore have a
meaningful influence on performance, and we give
each buy-and-sell decision a corresponding degree
of care and attention.
POSITIONING AND PERFORMANCE
The Fund's positioning during the period was a
logical consequence of our stock selection
criteria. Although the valuations of many TMT
stocks came down substantially from their levels of
earlier in the year, our holdings in these sectors
continued to generate earnings at or above our
expectations for them. We reasoned that lower
valuations plus strong earnings growth should lead
to share price appreciation. In the short term,
however, the Fund was hurt by its large TMT
exposure, particularly to wireless telecom service
providers Sonera (Finland) and Vodafone AirTouch
(United Kingdom), as well as wireless equipment
manufacturer Ericsson (Sweden).
On the other hand, finance stocks were one of the
big winners during the period for the Fund and the
markets overall. Holdings such as Banca Fideuram
(Italy) and Tecis Holding (Germany) made positive
contributions to the Fund's performance. Yet we
remain concerned about asset quality problems, high
valuations, and the unfavorable cost/benefit
outlook for providing online services in the finance
sector.
Healthcare was one sector demonstrating strong
growth that also benefited from its defensive
reputation--that is, the perception that stocks in
the sector are less sensitive to the economy than
those in most other sectors. Healthcare holdings
that helped performance included Aventis and
Sanofi-Synthelabo, two fast-growing French
pharmaceutical stocks. Serono, a Swiss-based
pharmaceutical firm with biotechnology exposure,
was another positive contributor.
6
<PAGE>
www.prudential.com (800) 225-1852
PORTFOLIO MOVEMENT
We added to our TMT holdings on the shares' price
weakness in both spring and fall. In addition, we
cut back or eliminated our exposure to a number of
incumbent wire-line telecom providers. Across the
globe, these established companies are seeing their
businesses erode at more rapid rates than ever
before. Alternative carriers, whose networks
utilize the newer, more cost-efficient IP (Internet
Protocol) technology, are gobbling up market share.
U.K. holdings Cable & Wireless and Colt Telecom
Group are two stocks representing the alternative
carrier group in which we increased the Fund's
positions during the period.
We also sharpened our focus on pure wireless
communications providers. Although that market has
been weighed down lately by concerns over the costs
of acquiring third-generation cellular licenses in
Europe, growth prospects remain bright. Japan's NTT
DoCoMo, the world leader in the introduction of
wireless data services, is one core holding in this
group, as is Vodafone AirTouch (United Kingdom). We
added to both positions.
LOOKING AHEAD
Many of the Fund's difficulties during the period
were due to the euro's weakness. The currency has
depreciated by roughly 10% since the Fund's
inception. While we cannot predict currency
movements, we think it unlikely that the euro will
duplicate that performance over the next eight
months, especially since we are beginning to see a
slowing U.S. economy. A stable euro would provide a
much more favorable backdrop for the Fund's U.S.
dollar-denominated returns.
7
<PAGE>
Prudential Jennison International Growth Fund
Annual Report October 31, 2000
There are other reasons to be optimistic.
Currently, the average company in the portfolio has
a strong expected earnings growth rate, while the
price/earnings ratio of our holdings as a group is
projected to decline to a relatively modest figure
by 2002. In addition, we believe that there is a
good possibility for economic growth in Europe,
where the Fund currently has the vast majority of
its exposure, to be strong in 2001. We continue to
limit exposure to Asian stocks because of their
unattractive earnings growth prospects relative to
their valuations. The markets are currently worried
about slowing growth in the United States, but we see
this merely as a transition from the breakneck pace
of earlier in the year to a more sustainable annual
growth rate. Even a slower-growing United States
could provide a supportive environment for its trading
partners in Europe and Asia.
Prudential Jennison International Growth Fund Management Team
8
<PAGE>
Prudential Jennison International Growth Fund
Annual Report October 31, 2000
Financial
Statements
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Portfolio of Investments as of October 31, 2000
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C> <C>
------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 99.0%
Common Stocks 98.7%
-------------------------------------------------------------------------------------
Australia 2.0%
232,005 Brambles Industries Ltd. $ 6,013,103
199 News Corporation Ltd. 2,081
--------------
6,015,184
-------------------------------------------------------------------------------------
Denmark 1.0%
13,962 Novo Nordisk A/S 2,957,535
-------------------------------------------------------------------------------------
Finland 6.1%
284,990 Nokia Oyj 11,713,738
279,100 Sonera Oyj 6,141,553
--------------
17,855,291
-------------------------------------------------------------------------------------
France 11.5%
128,416 Alcatel 7,826,394
111,200 Aventis SA(a) 8,011,935
52,244 Cap Gemini SA(a) 8,325,455
113,900 Sanofi-Synthelabo SA 5,985,895
58,970 Societe Television Francaise 1 3,214,074
--------------
33,363,753
-------------------------------------------------------------------------------------
Germany 4.0%
53,785 SAP AG 8,794,418
4,068 SGL Carbon AG(a) 248,306
39,300 Tecis Holding AG 2,838,219
--------------
11,880,943
-------------------------------------------------------------------------------------
Hong Kong 8.2%
875,000 China Telecom 5,637,886
4,458,200 Johnson Electric Holdings Ltd. 8,974,888
5,053,000 Li & Fung Ltd. 9,394,791
--------------
24,007,565
-------------------------------------------------------------------------------------
Italy 1.4%
278,600 Banca Fideuram SpA 4,279,106
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Portfolio of Investments as of October 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Japan 3.0%
33,000 Crosswave Communications, Inc. $ 305,250
338 NTT Mobile Communications 8,327,237
--------------
8,632,487
-------------------------------------------------------------------------------------
Mexico 3.7%
1,564,000 Kimberly-Clark de Mexico S.A. de C.V. 3,995,712
123,500 Grupo Televisa S.A. (GDR)(a) 6,684,437
--------------
10,680,149
-------------------------------------------------------------------------------------
Netherlands 15.9%
276,700 ASM International N.V.(a) 4,444,494
254,550 ASM Lithography Holding N.V.(a) 6,949,883
38,260 Gucci Group N.V. 3,729,550
299,666 Royal Philips Electronics N.V. 11,763,213
107,951 STMicroelectronics N.V. 5,439,916
16,880 STMicroelectronics N.V. (ADR) 876,705
125,000 United Pan-Europe Communications N.V.(a) 2,187,982
209,803 VNU N.V. 9,870,028
--------------
45,261,771
-------------------------------------------------------------------------------------
Singapore 6.6%
873,000 DBS Group Holdings Ltd. 10,294,237
1,317,200 Datacraft Asia Ltd.(a) 9,022,820
--------------
19,317,057
-------------------------------------------------------------------------------------
Spain 2.6%
337,700 Banco Bilbao Vizcaya Argentaria SA 4,494,117
345,000 Recoletos Compania Editorial SA 3,114,458
--------------
7,608,575
-------------------------------------------------------------------------------------
Sweden 2.3%
508,850 Telefonaktiebolaget LM Ericsson AB 6,754,401
-------------------------------------------------------------------------------------
Switzerland 1.4%
4,474 Serono Group 4,023,422
-------------------------------------------------------------------------------------
Taiwan 1.1%
141,200 Taiwan Semiconductor Mfg. Co. Ltd. 3,203,475
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Portfolio of Investments as of October 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
------------------------------------------------------------------------------------------
<C> <S> <C> <C>
United Kingdom 27.9%
821,672 Cable & Wireless PLC $ 11,633,208
820,000 Collins Stewart Holdings PLC 4,328,273
262,247 Colt Telecom Group PLC 8,377,793
1,128,010 Dimension Data Holdings PLC 9,893,417
4,059 Granada Compass PLC 35,011
621,391 Granada Media PLC 3,618,310
674,000 International Power PLC 2,720,828
336,970 Logica PLC 9,977,112
633,500 Marconi PLC 8,003,174
442,046 Pearson PLC 11,868,633
2,659,688 Vodafone Airtouch PLC 11,074,663
--------------
81,530,422
Total common stocks (cost $344,831,860) 287,371,136
--------------
-------------------------------------------------------------------------------------
RIGHTS(a) 0.3%
-------------------------------------------------------------------------------------
United Kingdom
35,140 Logica PLC (cost $587,172) 1,010,330
--------------
Total long-term investments (cost $345,419,032) 288,381,466
--------------
SHORT-TERM INVESTMENT 1.6%
<CAPTION>
Principal
Amount
(000)
<C> <S> <C> <C>
-----------------------------------------------------------------------------------
Repurchase Agreement
Joint Repurchase Agreement Account,
$ 4,631 6.55%, 11/1/00 (cost $4,631,000; Note 5) 4,631,000
--------------
Total Investments 100.6%
(cost $350,050,032; Note 4) 293,012,466
Liabilities in excess of other assets (0.6%) (1,674,209)
--------------
Net Assets 100% $ 291,338,257
--------------
--------------
</TABLE>
------------------------------
(a) Non-income producing security.
ADR--American Depository Receipt.
AG--Aktiengesellschaft (German Company).
GDR--Global Depository Receipt.
N.V.--Naamloze Vennootachap (Dutch Corporation).
PLC--Public Limited Company.
S.A.--Sociedad Anonima (Spanish Corporation) or Societe Anonyme (French
Corporation).
SpA--Societa per Azione (Italian Corporation).
12 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Portfolio of Investments as of October 31, 2000 Cont'd.
<TABLE>
<S> <C> <C>
The industry classification of portfolio holdings shown as a percentage of net
assets as of October 31, 2000 was as follows:
Telecommunication Services 22.4%
Telecommunications Equipment 12.6
Media & Entertainment 10.8
Computer Software & Services 9.5
Electronics 7.1
Banks & Financial Services 6.4
Semiconductors 6.1
Pharmaceuticals 4.8
Network Systems 3.3
Exporting/Importing 3.1
Financial Services 2.4
Conglomerates 2.0
Utilities 1.5
Paper & Forest Products 1.3
Biotechnology 1.3
Apparel 1.2
Leisure & Tourism 1.1
Publishing 1.0
Diversified Manufacturing 1.0
Chemicals 0.1
Repurchase Agreement 1.6
-----
100.6
Liabilities in excess of other assets (0.6)
-----
100.0%
-----
-----
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
October 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $350,050,032) $293,012,466
Foreign currency, at value (cost $388,097) 355,452
Cash 159,940
Receivable for investments sold 4,526,259
Receivable for Series shares sold 478,376
Tax reclaim receivable 87,396
Interest and dividends receivable 16,459
Deferred expenses and other assets 70,809
----------------
Total assets 298,707,157
----------------
LIABILITIES
Payable for investments purchased 5,385,414
Payable for Series shares reacquired 1,006,003
Accrued expenses 585,231
Management fee payable 209,535
Distribution fee payable 182,717
----------------
Total liabilities 7,368,900
----------------
NET ASSETS $291,338,257
----------------
----------------
Net assets were comprised of:
Common stock, at par $ 369,662
Paid-in capital in excess of par 366,288,595
----------------
366,658,257
Net realized loss on investments (18,245,731)
Net unrealized depreciation on investments and foreign
currencies (57,074,269)
----------------
Net assets, October 31, 2000 $291,338,257
----------------
----------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Statement of Assets and Liabilities Cont'd.
<TABLE>
<CAPTION>
October 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share ($75,354,448
/ 9,530,029 shares of common stock issued and
outstanding) $7.91
Maximum sales charge (5% of offering price) .42
----------------
Maximum offering price to public $8.33
----------------
----------------
Class B:
Net asset value, offering price and redemption price per
share ($131,918,812 / 16,766,979 shares of common stock
issued and outstanding) $7.87
----------------
----------------
Class C:
Net asset value and redemption price per share ($64,361,751
/ 8,180,072 shares of common stock issued and
outstanding) $7.87
Sales charge (1% of offering price) .08
----------------
Offering price to public $7.95
----------------
----------------
Class Z:
Net asset value, offering price and redemption price per
share ($19,703,246 / 2,489,153 shares of common stock
issued and outstanding) $7.92
----------------
----------------
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Statement of Operations
<TABLE>
<CAPTION>
March 1, 2000(a)
Through
October 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
NET INVESTMENT LOSS
Income
Dividends (net of foreign withholding taxes of $222,188) $ 2,190,107
Interest 1,250,091
-----------------
Total income 3,440,198
-----------------
Expenses
Management fee 1,874,203
Distribution fee--Class A 142,928
Distribution fee--Class B 984,173
Distribution fee--Class C 527,587
Transfer agent's fees and expenses 252,000
Custodian's fees and expenses 202,000
Amortization of offering costs 136,000
Reports to shareholders 117,000
Audit fee 35,000
Organizational cost 19,000
Legal fees and expenses 18,000
Directors' fees and expenses 10,000
Miscellaneous 251,592
-----------------
Total expenses 4,569,483
-----------------
Net investment loss (1,129,285)
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions (18,245,731)
Foreign currency transactions (566,607)
-----------------
(18,812,338)
-----------------
Net change in unrealized appreciation/depreciation on:
Investments (57,037,566)
Foreign currencies (36,703)
-----------------
(57,074,269)
-----------------
Net loss on investments and foreign currencies (75,886,607)
-----------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (77,015,892)
-----------------
-----------------
---------------
(a) Commencement of investment operations.
</TABLE>
16 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
March 1, 2000(a)
Through
October 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment loss $ (1,129,285)
Net realized loss on investment and foreign currency
transactions (18,812,338)
Net change in unrealized appreciation/depreciation of
investments and foreign currencies (57,074,269)
-------------------
Net decrease in net assets resulting from operations (77,015,892)
-------------------
Series share transactions (net of conversions) (Note 6)
Net proceeds from shares sold 463,656,475
Cost of shares reacquired (95,302,326)
-------------------
Net increase in net assets from Series share transactions 368,354,149
-------------------
Total increase 291,338,257
NET ASSETS
Beginning of period --
-------------------
End of period $ 291,338,257
-------------------
-------------------
------------------------------
(a) Commencement of investment operations.
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Notes to Financial Statements
Prudential World Fund, Inc. (the 'Fund') is registered under the
Investment Company Act of 1940, as an open-end, diversified management
investment company and currently consists of three series: Prudential Jennison
International Growth Fund (the 'Series'), Prudential International Value Fund
and Prudential Global Growth Fund. The financial statements of the other Series
are not presented herein. The Series commenced investment operations in March
2000. The investment objective of the Series is to achieve long-term growth of
capital. The Series seeks to achieve its objective primarily through investment
in equity-related securities of foreign issuers.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund and the Series in the preparation of its financial statements.
Securities Valuation: Securities traded on an exchange (whether
domestic or foreign) and NASDAQ National Market System securities are valued at
the last sale price of such exchange system on the day of valuation or, if there
was no sale on such day, the mean between the last bid and asked prices on such
day, or at the bid price on such day in the absence of an asked price.
Securities for which reliable market quotations are not readily available are
valued by the Valuation Committee or Board of Directors in consultation with the
manager or subadviser.
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.
Repurchase Agreements: 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 securities, the value
of which exceeds the principal amount of the repurchase transaction including
accrued interest. To the extent that any repurchase transaction exceeds one
business day, the value of the collateral is marked-to-market on a daily basis
to ensure the adequacy of the collateral. If the seller defaults and the value
of the collateral declines or if bankruptcy proceedings are commenced with
respect to the seller of the security, realization of the collateral by the Fund
may be delayed or limited.
All securities are valued as of 4:15 p.m., New York time.
Foreign Currency Translation: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
(i) market value of investment securities, other assets and liabilities -
at the closing daily rates of exchange.
18
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International
Growth Fund
Notes to Financial Statements Cont'd.
(ii) purchases and sales of investment securities, income and expenses -
at the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal period, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the end of the period. Similarly, the Fund
does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of long-term portfolio
securities sold during the period. Accordingly, these realized foreign currency
gains (losses) are included in the reported net realized gains (losses) on
investment transactions.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains or losses from holdings of foreign currencies, currency
gains or losses realized between the trade and settlement dates on security
transactions, and the difference between the amounts of dividends, interest and
foreign taxes recorded on the Fund's books and the U.S. dollar equivalent
amounts actually received or paid. Net unrealized currency gains or losses from
valuing foreign currency denominated assets and liabilities (other than
investments) at period-end exchange rates are reflected as a component of net
unrealized appreciation (depreciation) on investments and foreign currencies.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of domestic origin
as a result of, among other factors, the possibility of political and economic
instability and the level of governmental supervision and regulation of foreign
securities markets.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized and unrealized gains and
losses from investment and currency transactions are calculated on the
identified cost basis. Dividend income is recorded on the ex-dividend date;
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 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.
Taxes: For federal income tax purposes, each series in the Fund is
treated as a separate taxpaying entity. It is the intent of the Series to meet
the requirements of the Internal Revenue Code applicable to regulated investment
companies and to
19
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Notes to Financial Statements Cont'd.
distribute all of its net income to 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.
Dividends and Distributions: The Fund expects to pay dividends of net
investment income and distributions of net realized capital and currency gains,
if any, at least annually. 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.
Offering and Organization Expenses: Approximately $137,600 were incurred
in connection with the organization of the Series. Offering costs of
approximately $118,600 and organization costs of approximately $19,000 are being
amortized ratably over a period of twelve months and sixty months, respectively,
from the date the Series commenced investment operations.
Reclassification of Capital Accounts: The Series accounts for and reports
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants' Statement of Position 93-2: Determination,
Disclosure and Financial Statement Presentation of Income, Capital Gains, and
Return of Capital Distributions by Investment Companies. The effect for the
Series of applying this statement was to decrease undistributed net investment
loss by $1,129,285, decrease accumulated net realized loss on investments by
$566,607 and decrease paid-in capital in excess of par by $1,695,892 for
expenses not deductible for tax purposes, net operating losses and net realized
foreign currency losses during the year ended October 31, 2000. Net investment
loss, net realized losses and net assets were not affected by this change.
Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. Pursuant to a subadvisory agreement between PIFM and Jennison
Associates LLC ('Jennison'), Jennison furnishes investment advisory services in
connection with the management of the Series. PIFM pays for the services of
Jennison, the cost of compensation of officers and employees of the Fund,
occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears
all other costs and expenses.
The management fee paid PIFM is computed daily and payable monthly, at an
annual rate of .85 of 1% of the average daily net assets of the Series up to and
20
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International
Growth Fund
Notes to Financial Statements Cont'd.
including $300 million, .75 of 1% of the average daily net assets in excess of
$300 million up to and including $1.5 billion and .70 of 1% of the Series'
average daily net assets over $1.5 billion. PIFM pays Jennison a subadvisory fee
at an annual rate of .60 of 1% of the average daily net assets of the Series up
to and including $300 million, .50 of 1% of the average daily net assets in
excess of $300 million up to and including $1.5 billion and .45 of 1% of the
Series' average daily net assets over $1.5 billion.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS') which acts as the distributor of the Class A,
Class B, Class C and Class Z shares of the Fund. The Fund compensates PIMS for
distributing and servicing the Fund's Class A, Class B and Class C shares,
pursuant to plans of distribution, (the 'Class A, B and C Plans'), regardless of
expenses actually incurred by them. The distribution fees are accrued daily and
payable monthly. No distribution or service fees are paid to PIMS as distributor
for Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Series compensates PIMS for
distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class A, B, and C shares, respectively.
Such expenses under the Plans were .25 of 1%, 1% and 1% of the average daily net
assets of the Class A, B and C shares respectively, for the period ended October
31, 2000.
PIMS has advised the Series that they received approximately $2,334,000
and $954,000 in front-end sales charges resulting from sales of Class A and
Class C shares, respectively, during the period ended October 31, 2000. From
these fees, PIMS paid such sales charges to affiliated broker-dealers, which in
turn paid commissions to salespersons and incurred other distribution costs.
PIMS has advised the Series that for the period ended October 31, 2000,
they received approximately $352,000 and $110,000 in contingent deferred sales
charges imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
PIMS, PIFM and Jennison are wholly owned subsidiaries of The Prudential
Insurance Company of America.
The Series, along with other affiliated registered investment companies
(the 'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $1 billion.
Interest on any such borrowings will be at market rates. The purpose of the
agreement is to serve as an alternative source of funding for capital share
redemptions. The Funds pay a commitment fee of .080 of 1% of the unused portion
of the credit facility. The commitment fee is accrued and paid quarterly on a
pro rata basis by the Funds. The expiration date
21
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International
Growth Fund
Notes to Financial Statements Cont'd.
of the SCA is March 9, 2001. Prior to March 9, 2000, the commitment fee was .065
of 1% of the unused portion of the credit facility. The Fund did not borrow any
amounts pursuant to the SCA during the period ended October 31, 2000.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During the period ended October 31, 2000,
the Series incurred fees of approximately $220,800 for the services of PMFS. As
of October 31, 2000, approximately $32,000 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 nonaffiliates.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities of the Series, excluding short-term
investments, for the period ended October 31, 2000 were $559,782,924 and
$196,105,246, respectively.
The cost basis of investments for federal income tax purposes at October
31, 2000 was $355,074,343 and accordingly, net unrealized depreciation of
investments for federal income tax purposes was $62,061,877 (gross unrealized
appreciation--$8,847,576; gross unrealized depreciation--$70,909,453.
For federal income tax purposes, the Fund had a capital loss carryforward
as of October 31, 2000 of approximately $13,221,000 which expires in 2008.
Accordingly, no capital gains distribution is expected to be paid to
shareholders until net gains have been realized in excess of this amount.
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment 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 October 31, 2000, the
Series had a .70% undivided interest in the repurchase agreements in the joint
account. The undivided interest for the Series represents $4,631,000 in the
principal amount. As of such date, each repurchase agreement in the joint
account and the collateral therefore were as follows:
ABN AMRO Incorporated, 6.56%, in the principal amount of $150,000,000,
repurchase price $150,027,333, due 11/1/00. The value of the collateral
including accrued interest was $153,000,176.
Bear, Stearns & Co. Inc., 6.56%, in the principal amount of $175,000,000,
repurchase price $175,031,889, due 11/1/00. The value of the collateral
including accrued interest was $184,628,570.
22
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International
Growth Fund
Notes to Financial Statements Cont'd.
Chase Securities Inc., 6.56%, in the principal amount of $115,000,000,
repurchase price $115,020,956, due 11/1/00. The value of the collateral
including accrued interest was $117,304,831.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 6.375%, in the principal
amount of $43,782,000, repurchase price $43,789,753, due 11/1/00. The value of
the collateral including accrued interest was $44,659,885.
UBS Warburg, 6.56%, in the principal amount of $175,000,000, repurchase
price $175,031,889, due 11/1/00. The value of the collateral including accrued
interest was $178,501,724.
Note 6. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with a front-end sales charge of up to 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 front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares automatically convert to Class A shares on a quarterly
basis approximately seven years after purchase. A special exchange privilege is
also available for shareholders who qualified to purchase Class A shares at net
asset value. Class Z shares are not subject to any sales or redemption charge
and are offered exclusively for sale to a limited group of investors.
There are 500 million authorized shares of $.01 par value common stock,
divided equally into four classes, designated Class A, Class B, Class C and
Class Z common stock.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
---------------------------------------------------------- ----------- ------------
<S> <C> <C>
March 1, 2000(a) through October 31, 2000:
Shares sold 14,509,151 $139,773,215
Shares reacquired (5,102,631) (46,351,336)
----------- ------------
Net increase (decrease) in shares outstanding before
conversion 9,406,520 93,421,879
Shares issued upon conversion from Class B 123,509 1,147,012
----------- ------------
Net increase (decrease) in shares outstanding 9,530,029 $ 94,568,891
----------- ------------
----------- ------------
</TABLE>
---------------
(a) Commencement of investment operations.
23
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Notes to Financial Statements Cont'd.
<TABLE>
<CAPTION>
Class B Shares Amount
---------------------------------------------------------- ----------- ------------
March 1, 2000(a) through October 31, 2000:
<S> <C> <C>
Shares sold 19,156,117 $187,515,754
Shares reacquired (2,265,301) (19,987,510)
----------- ------------
Net increase (decrease) in shares outstanding before
conversion 16,890,816 167,528,244
Shares reacquired upon conversion into Class A (123,837) (1,147,012)
----------- ------------
Net increase (decrease) in shares outstanding 16,766,979 $166,381,232
----------- ------------
----------- ------------
<CAPTION>
Class C
----------------------------------------------------------
<S> <C> <C>
March 1, 2000(a) through October 31, 2000:
Shares sold 10,244,005 $100,815,705
Shares reacquired (2,063,933) (18,205,015)
----------- ------------
Net increase (decrease) in shares outstanding 8,180,072 $ 82,610,690
----------- ------------
----------- ------------
<CAPTION>
Class Z
----------------------------------------------------------
<S> <C> <C>
March 1, 2000(a) through October 31, 2000:
Shares sold 3,681,534 $ 35,551,801
Shares reacquired (1,192,381) (10,758,465)
----------- ------------
Net increase (decrease) in shares outstanding 2,489,153 $ 24,793,336
----------- ------------
----------- ------------
</TABLE>
---------------
(a) Commencement of investment operations.
24
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Financial Highlights
<TABLE>
<CAPTION>
Class A
----------------
March 1, 2000(a)
Through
October 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.00
--------
Income from investment operations:
Net investment loss --(d)
Net realized and unrealized loss on investment and foreign
currency transactions (2.09)
--------
Total from investment operations (2.09)
--------
Net asset value, end of period $ 7.91
--------
--------
TOTAL RETURN(b) (21.00)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 75,354
Average net assets (000) $ 85,757
Ratios to average net assets(c):
Expenses, including distribution and service (12b-1)
fees(e) 1.56%
Expenses, excluding distribution and service (12b-1) fees 1.31%
Net investment income 0%
For Class A, B, C and Z shares:
Portfolio turnover rate 61%
</TABLE>
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales load. 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 return for periods of less than a full year are not
annualized.
(c) Annualized.
(d) Less than $.005 per share.
(e) The distributor of the Fund agreed to limit its distribution and service
(12b-1) fees to .25 of 1% of the average net assets of the Class A shares.
See Notes to Financial Statements 25
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class B
----------------
March 1, 2000(a)
Through
October 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.00
----------------
Income from investment operations:
Net investment loss (.05)
Net realized and unrealized loss on investment and foreign
currency transactions (2.08)
----------------
Total from investment operations (2.13)
----------------
Net asset value, end of period $ 7.87
----------------
----------------
TOTAL RETURN(b) (21.40)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $131,919
Average net assets (000) $147,626
Ratios to average net assets(c):
Expenses, including distribution and service (12b-1) fees 2.31%
Expenses, excluding distribution and service (12b-1) fees 1.31%
Net investment loss (.78)%
</TABLE>
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales load. 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 return for periods of less than a full year are not
annualized.
(c) Annualized.
26 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class C
----------------
March 1, 2000(a)
Through
October 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.00
--------
Income from investment operations:
Net investment loss (.05)
Net realized and unrealized loss on investment and foreign
currency transactions (2.08)
--------
Total from investment operations (2.13)
--------
Net asset value, end of period $ 7.87
--------
--------
TOTAL RETURN(b) (21.40)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 64,362
Average net assets (000) $ 79,138
Ratios to average net assets(c):
Expenses, including distribution and service (12b-1) fees 2.31%
Expenses, excluding distribution and service (12b-1) fees 1.31%
Net investment loss (.74)%
</TABLE>
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales load. 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 return for periods of less than a full year are not
annualized.
(c) Annualized.
See Notes to Financial Statements 27
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class Z
----------------
March 1, 2000(a)
Through
October 31, 2000
----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.00
--------
Income from investment operations:
Net investment income .01
Net realized and unrealized loss on investment and foreign
currency transactions (2.09)
--------
Total from investment operations (2.08)
--------
Net asset value, end of period $ 7.92
--------
--------
TOTAL RETURN(b) (20.90)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 19,703
Average net assets (000) $ 22,320
Ratios to average net assets(c):
Expenses, including distribution and service (12b-1) fees 1.31%
Expenses, excluding distribution and service (12b-1) fees 1.31%
Net investment income .23%
</TABLE>
------------------------------
(a) Commencement of investment operations.
(b) Total return does not consider the effect of sales load. 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 return for periods of less than a full year are not
annualized.
(c) Annualized.
28 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Report of Independent Accountants
To the Shareholders and Board of Directors of
Prudential World Fund, Inc.--
Prudential Jennison International Growth 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 Prudential World Fund,
Inc.--Prudential Jennison International Growth Fund (the 'Fund', one of the
portfolios constituting Prudential World Fund, Inc.) at October 31, 2000 and the
results of its operations, the changes in its net assets and the financial
highlights for the period March 1, 2000 (commencement of operations) through
October 31, 2000, in conformity with accounting principles generally accepted
in the United States of America. 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 audit. We conducted our audit
of these financial statements in accordance with auditing standards generally
accepted in the United States of America, 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 audit, which included confirmation of securities at October 31,
2000 by correspondence with the custodian and brokers, provides a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
December 20, 2000
29
<PAGE>
Prudential World Fund, Inc. Prudential Jennison International Growth Fund
Federal Income Tax Information (Unaudited)
We wish to advise you that the corporate dividends received deduction for
the Series is zero. Only funds that invest in U.S. equity securities are
entitled to pass-through a corporate dividends received deduction.
The Fund has elected to give the benefit of foreign tax credits to its
shareholders. Accordingly, shareholders who must report their gross income
dividends and distributions in a federal income tax return will be entitled to a
foreign tax credit, or an itemized deduction in computing their U.S. income tax
liability. It is generally more advantageous to claim a credit rather than take
a deduction. For the fiscal year ended October 31, 2000 the Fund intends on
passing through a foreign tax credit of $.006 per share.
30
<PAGE>
Prudential Jennison International Growth Fund
Getting the Most from Your Prudential Mutual Fund
When you invest through Prudential Mutual Funds,
you receive financial advice from a Prudential
Securities Financial Advisor or Pruco Securities
registered representative. Your financial
professional can provide you with the following
services:
THERE'S NO REWARD WITHOUT RISK; BUT IS THIS RISK WORTH IT?
Your financial professional can help you match the
reward you seek with the risk you can tolerate.
Risk can be difficult to gauge--sometimes even the
simplest investments bear surprising risks. The
educated investor knows that markets seldom move in
just one direction. There are times when a
market sector or asset class will lose value or
provide little in the way of total return. Managing
your own expectations is easier with help from
someone who understands the markets, and who knows
you!
KEEPING UP WITH THE JONESES
A financial professional can help you wade through
the numerous available mutual funds to find the
ones that fit your individual investment profile
and risk tolerance. While the newspapers and
popular magazines are full of advice about
investing, they are aimed at generic groups of
people or representative individuals--not at you
personally. Your financial professional will review
your investment objectives with you. This means you
can make financial decisions based on the assets
and liabilities in your current portfolio and your
risk tolerance--not just based on the current
investment fad.
BUY LOW, SELL HIGH
Buying at the top of a market cycle and selling at
the bottom are among the most common investor
mistakes. But sometimes it's difficult to hold on
to an investment when it's losing value every
month. Your financial professional can answer
questions when you're confused or worried about
your investment, and should remind you that you're
investing for the long haul.
<PAGE>
Prudential Jennison International Growth Fund
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 professional
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 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
Prudential Value 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
<PAGE>
www.prudential.com (800) 225-1852
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
New Jersey Series
New York 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>
Prudential Jennison International Growth Fund
Class A Growth of a $10,000 Investment
(GRAPH)
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. Since the Fund has been in existence
less than one year, no average annual total returns
are presented. The graph compares a $10,000
investment in the Prudential Jennison International
Growth Fund (Class A shares) with a similar
investment in the Morgan Stanley Capital
International EAFER Index (MSCI EAFER Index) by
portraying the initial account value at the
commencement of operations of Class A shares, and
the account value at the end of the current fiscal
year (October 31, 2000), as measured on a quarterly
basis. For purposes of the graph, and unless otherwise
indicated, it has been assumed that (a) the maximum
applicable front-end sales charge was deducted from
the initial $10,000 investment in Class A shares;
(b) all recurring fees (including management fees)
were deducted; and (c) all dividends and
distributions were reinvested.
The MSCI EAFER Index is an unmanaged, weighted
index of performance that reflects stock price
movements in Europe, Australasia, and the Far East.
The MSCI EAFER Index's total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI EAFER Index may differ substantially from the
securities in the Fund. The MSCI EAFER Index is not
the only one that may be used to characterize
performance of international stock funds. Other
indexes may portray different comparative performance.
Investors cannot invest directly in an index.
This graph is furnished to you in accordance with SEC regulations.
<PAGE>
www.prudential.com (800) 225-1852
Class B Growth of a $10,000 Investment
(GRAPH)
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. Since the Fund has been in existence
less than one year, no average annual total returns
are presented. The graph compares a $10,000
investment in the Prudential Jennison International
Growth Fund (Class B shares) with a similar
investment in the Morgan Stanley Capital
International EAFER Index (MSCI EAFER Index) by
portraying the initial account value at the
commencement of operations of Class B shares, and
the account value at the end of the current fiscal
year (October 31, 2000), as measured on a quarterly
basis. For purposes of the graph, and unless otherwise
indicated, it has been assumed that (a) the maximum
applicable contingent deferred sales charge was
deducted from the value of the investment in Class
B shares, assuming full redemption on October 31,
2000; (b) all recurring fees (including management
fees) were deducted; and (c) 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 MSCI EAFER Index is an unmanaged, weighted
index of performance that reflects stock price
movements in Europe, Australasia, and the Far East.
The MSCI EAFER Index's total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI EAFER Index may differ substantially from the
securities in the Fund. The MSCI EAFER Index is not
the only one that may be used to characterize
performance of international stock funds. Other
indexes may portray different comparative
performance. Investors cannot invest directly in an
index.
This graph is furnished to you in accordance with SEC regulations.
<PAGE>
Prudential Jennison International Growth Fund
Class C Growth of a $10,000 Investment
(GRAPH)
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. Since the Fund has been in existence
less than one year, no average annual total returns
are presented. The graph compares a $10,000
investment in the Prudential Jennison International
Growth Fund (Class C shares) with a similar investment
in the Morgan Stanley Capital International EAFER Index
(MSCI EAFER Index) by portraying the initial account
value at the commencement of operations of Class C shares,
and the account value at the end of the current fiscal
year (October 31, 2000), as measured on a quarterly
basis. For purposes of the graph, and unless otherwise
indicated, it has been assumed that (a) the maximum
appli-cable front-end sales charge was deducted
from the initial $10,000 investment in Class C
shares; (b) the maximum applicable contingent
deferred sales charge was deducted from the value
of the investment in Class C shares, assuming full
redemption on October 31, 2000; (c) all recurring
fees (including management fees) were deducted; and
(d) all dividends and distributions were
reinvested.
The MSCI EAFER Index is an unmanaged, weighted
index of performance that reflects stock price
movements in Europe, Australasia, and the Far East.
The MSCI EAFER Index's total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI EAFER Index may differ substantially from the
securities in the Fund. The MSCI EAFER Index is not
the only one that may be used to characterize
performance of international stock funds. Other
indexes may portray different comparative
performance. Investors cannot invest directly in an
index.
This graph is furnished to you in accordance with SEC regulations.
<PAGE>
www.prudential.com (800) 225-1852
Class Z Growth of a $10,000 Investment
(GRAPH)
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. Since the Fund has been in existence
less than one year, no average annual total returns
are presented. The graph compares a $10,000
investment in the Prudential Jennison International
Growth Fund (Class Z shares) with a similar
investment in the Morgan Stanley Capital
International EAFER Index (MSCI EAFER Index) by
portraying the initial account value at the
commencement of operations of Class Z shares, and
the account value at the end of the current fiscal
year (October 31, 2000), as measured on a quarterly
basis. For purposes of the graph, and unless otherwise
indicated, it has been assumed that (a) all
recurring fees (including management fees) were
deducted, and (b) all dividends and distributions
were reinvested. Class Z shares are not subject to a
sales charge or distribution and service (12b-1) fees.
The MSCI EAFER Index is an unmanaged, weighted
index of performance that reflects stock price
movements in Europe, Australasia, and the Far East.
The MSCI EAFER Index's total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI EAFER Index may differ substantially from the
securities in the Fund. The MSCI EAFER Index is not
the only one that may be used to characterize
performance of international stock funds. Other
indexes may portray different comparative
performance. Investors cannot invest directly in an
index.
This graph is furnished to you in accordance with SEC regulations.
<PAGE>
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Visit Prudential's website at:
http://www.prudential.com
Directors
Delayne Dedrick Gold
Robert F. Gunia
Robert E. LaBlanc
David R. Odenath, Jr.
Judy A. Rice
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Clay T. Whitehead
Officers
David R. Odenath, Jr., President
Robert F. Gunia, 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
Jennison Associates LLC
466 Lexington Avenue
New York, NY 10017
Distributor
Prudential Investment
Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Fund Symbols NASDAQ CUSIP
Class A PJRAX 743969859
Class B PJRBX 743969867
Class C PJRCX 743969875
Class Z N/A 743969883
MF190E
(LOGO) Printed on Recycled Paper
<PAGE>
ANNUAL REPORT OCTOBER 31, 2000
Prudential
International Value Fund
Fund Type International stock
Objective Long-term growth of capital
(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>
INVESTMENT GOALS AND STYLE
The Prudential International Value Fund invests
primarily in stocks of companies located outside
the United States. We use a value investment style
to find stocks selling at low prices compared with
their earnings to seek long-term growth of capital.
Income is a secondary objective. There are special
risks associated with foreign investments,
including political, economic and social risks, and
potential illiquidity. There can be no assurance
that the Fund will achieve its investment objectives.
Geographic Concentration
Expressed as a percentage of
net assets as of 10/31/00
36.4% Continental Europe
22.2 Japan
14.1 United Kingdom
8.1 Pacific Basin (excl. Japan)
6.0 Canada
0.5 Other
12.7 Cash & Equivalents
Ten Largest Holdings
Expressed as a percentage of
net assets as of 10/31/00
3.9% Daiichi Pharma. Ind. Co., Ltd.
Medical-Drug
3.0 Mitsui Fudosan Co., Ltd.
Real Estate Development
2.7 Royal Bank of Scotland PLC
Commercial Banking
2.7 Matsushita Electric Ind. Co., Ltd.
Audio/Video Products
2.5 ING Groep N.V.
Money Center Banks
2.5 Bank of Nova Scotia
Commercial Banking
2.4 Yasuda Fire & Marine Ins. Co., Ltd.
Insurance
2.3 United Overseas Bank Ltd.
Commercial Banking
2.3 Sumitomo Marine & Fire Ins.Co., Ltd.
Insurance
2.3 Hitachi Ltd.
Electric Products-Misc.
Holdings are subject to change.
www.prudential.com (800) 225-1852
Performance at a Glance
Cumulative Total Returns1 As of 10/31/00
<TABLE>
<CAPTION>
One Five Since
Year Years Inception2
<S> <C> <C> <C>
Class A 3.92% N/A 50.62%
Class B 3.22 N/A 46.07
Class C 3.22 N/A 46.07
Class Z 4.24 70.41% 166.75
Lipper International Fund Avg.3 2.70 62.88 ***
</TABLE>
Average Annual Total Returns1 As of 10/31/00
<TABLE>
<CAPTION>
One Five Since
Year Years Inception2
<S> <C> <C> <C>
Class A -1.28% N/A 9.12%
Class B -1.78 N/A 9.49
Class C 1.19 N/A 9.40
Class Z 4.24 11.25% 13.07
</TABLE>
Past performance is not indicative of future
results. Principal and investment return will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their
original cost.
1 Source: Prudential Investments Fund Management
LLC and Lipper Inc. The cumulative total returns do
not take into account sales charges. The average
annual total returns do take into account
applicable sales charges. The Fund charges a
maximum front-end sales charge of 5% for Class A
shares.
Class B shares are subject to a declining
contingent deferred sales charge (CDSC) of 5%, 4%,
3%, 2%, 1%, and 1% for six years. Class B shares
will automatically convert to Class A shares, on a
quarterly basis, approximately seven years after
purchase. Class C shares are subject to a front-end
sales charge of 1% and a CDSC of 1% for 18 months.
Class Z shares are not subject to a sales charge or
distribution and service (12b-1) fees.
2 Inception dates: Class A, B, and C, 9/23/96;
Class Z, 11/5/92.
3 Lipper average returns are for all funds in each
share class for the one- and five-year periods in
the International Fund category. The Lipper average
is unmanaged. International funds invest their
assets in securities with primary trading markets
outside the United States.
*** Lipper Since Inception returns are 47.86% for
Class A, B, and C, and 143.54% for Class Z, based
on all funds in each share class.
1
<PAGE>
(LOGO) December 15, 2000
Dear Shareholder,
The fiscal year of the Fund--the 12 months ended
October 31, 2000--was a difficult period for all
investors, but particularly for international
portfolios. The global markets began a steep
downward correction in March, and continued down
through the rest of the period. In this difficult
environment, the 3.92% return on the Fund's Class A
shares--a 1.28% loss to those paying the maximum
one-time Class A share sales charge--beat the 2.70%
Lipper International Fund Average by more than a
third, and was well ahead of the 2.90% decline of
the Morgan Stanley Capital International Europe,
Australasia, and Far East (MSCI EAFER) Index.
Historically, value stocks have tended to hold
their prices better than growth stocks in falling
markets, and this is what happened during this
period, to the Fund's benefit. In the latter half
of its reporting period, the Fund's share value was
much more stable than the Lipper Average or the
MSCI EAFER benchmark, both of which have
substantial growth-style components. Strong
selection of Japanese stocks and international
financial institutions further helped performance.
The Fund's economically sensitive holdings, notably
metals companies, were a source of weakness.
Moreover, the continuing steep rise of the U.S.
dollar eroded the returns of all international
investors. However, the Fund's almost seven-
percentage-point outperformance of the MSCI EAFER
Index did much to compensate for this disadvantage.
This reporting period included markets that first
favored growth, then value investing styles.
Consequently, neither had a full year of
advantageous investing conditions. Since market
favor does tend to alternate between the styles, we
recommend that investors diversify their holdings,
owning portfolios managed in both styles. This may
help reduce the volatility of short-term returns.
Sincerely,
David R. Odenath, Jr., President
Prudential International Value Fund
2
<PAGE>
Prudential International Value Fund
Annual Report October 31, 2000
INVESTMENT ADVISER'S REPORT
For about a year or so prior to March 2000, global
stock markets had strongly favored telecommunications
and technology stocks. Value indexes and value managers,
such as ourselves, trailed as the market averages
were pushed ever higher by investor demand that was
focused on a few growth industries. This continued,
with some February volatility, through the first four
months of our reporting period. Then in March, market
sentiment changed. As investors became more sensitive
to rising interest rates and the possibility that
corporate earnings growth would be more modest than
they had hoped, the telecommunications/technology
bubble burst. Investors began to look more broadly at
the equity markets. Although overall market returns
fell in the confusion, value stocks held up better
because their prices generally were not based upon
optimistic expectations.
We benefited particularly from our financial
holdings. Banks are leading a change in European
savings habits toward equity investing. As the
demands of monetary union have enforced fiscal and
monetary discipline that drove down interest rates,
investors have turned to bank-managed equity mutual
funds for higher returns. The surge in cross-
continental planning also led to greater capital
investment and to merger and acquisition activity.
Banks benefited from all of this. Even before the
market turn, we had done well on Bipop-Carire, the
product of a merger of Banca Popolare di Brescia
(BIPOP), which had been among our largest holdings,
with Cassa di Risparmio di Reggio Emilia (Carire).
We also had good performance from the ING Group and
the Royal Bank of Scotland. (See Comments on
Largest Holdings for a discussion of these two.)
Since we generally start new positions at about the
same proportion of our portfolio, our largest
holdings tend to be in the stocks that have
appreciated most. Banco Bilbao Vizcaya Argentaria,
Spain's second-largest bank, and the smaller Bank
of Nova Scotia (Canada) each rose substantially
over our fiscal year.
3
<PAGE>
Prudential International Value Fund
Holdings expressed as a percentage of the Fund's net assets
Comments on Largest Holdings As of 10/31/00
-------------------------------------------------------------------
3.9% Daiichi Pharmaceuticals Ind. Co., Ltd./Medical-Drug
A global player in over-the-counter drugs and
beauty aids, it was very attractively priced and
already has appreciated substantially. After more
than doubling in price, its shares are approaching
a level that fully accounts for Daiichi's growth
potential.
3.0% Mitsui Fudosan Co., Ltd./Real Estate Development
Mitsui Fudosan develops and manages office
buildings, condominiums, and land. Japanese real
estate had been exorbitantly overpriced, and then
plummeted, contributing to the severe deflationary
environment in Japan and an overreaction in real
estate prices. We bought the stock very
inexpensively. Demand is increasing and real estate
prices are recovering.
2.7% Royal Bank of Scotland PLC/Commercial Banking
We acquired Royal Bank of Scotland shares in
exchange for our holdings in National Westminster
when it was acquired by Royal Scotland. It is a
well-run group with over 900 branches in the United
Kingdom and (through a subsidiary) the United
States. Share prices rose moderately over our
fiscal year.
2.7% Matsushita Electric Ind. Co., Ltd./Audio/Video Products
Markets electronic products under such globally
known brand names as Panasonic, Technics, and JVC.
It is among the leaders in restructuring Japanese
businesses to meet global competitive standards.
Investors are recognizing the change, and
Matsushita was among our top performers.
2.5% ING Groep N.V./Money Center Banks
One of the five largest global full-range financial
services companies, offering banking, insurance,
and investment banking services. Well positioned to
benefit from global merger and acquisition activity
and from the growth of European banking. Its share
price rose 44% over our reporting period.
Holdings are subject to change.
4
<PAGE>
www.prudential.com (800) 225-1852
Annual Report October 31, 2000
JAPANESE STOCKS HAD BEEN NEGLECTED
We also had found good opportunities in Japan. The
general decline of the Japanese stock markets had
brought down the prices on some stocks of excellent
companies. These began to recover. We took our
profits on Sony, which had become our largest
holding by the beginning of this fiscal year, and
some of our profits on Hitachi, which had
appreciated to become our fifth largest holding.
Both are electronics companies that are
restructuring to become more profit-oriented and
competitive. Matsushita Electric Industrial (see
Comments on Largest Holdings) was among the largest
contributors to this period's return.
VALUE STOCKS GAINED IN MANY SECTORS...
We benefited from gains on stocks in a variety of
sectors and countries. We took our profits on the
telecommunications firms British Telecom (United
Kingdom) and Cable & Wireless (Australia). Their
prices had risen in the telecommunications boom to
fair value or better; they subsequently fell in
the telecommunications correction. Shares of Tesco,
a food retailer in the United Kingdom, gained 47%
over our reporting period. Christian Dior (France)--
which markets luxury goods under brand names such as
Moet & Chandon, Louis Vuitton, and Givenchy--was a
longtime holding. It has shown strong earnings growth
and share price appreciation.
Among industrials, we had a good profit on
Bouygues, a French conglomerate with a large
exposure to the telecommunications sector. It had
been among our largest holdings at the beginning of
the period. It moved up sharply, and we sold it. We
had more modest gains in Rio Tinto, a U.K.-based
mining company. Total Fina (France), which we
received upon its acquisition of Elf Acquitaine,
also was a strong performer, benefiting from the
tight market in oil.
5
<PAGE>
Prudential International Value Fund
Annual Report October 31, 2000
...BUT NOT SOME ECONOMICALLY SENSITIVE STOCKS
The value sector that didn't benefit from
investors' new realism was basic materials.
Although many commodity companies have become more
capital-efficient, a substantial improvement in
earnings depends on continued economic growth.
As investors became more cautious, they continued
to avoid industrials such as metal and paper companies.
Our holdings in Pohang Iron and Steel and Korea
Electric Power both suffered along with the weak
Korean stock market. Carter Holt Harvey, a New
Zealand-based lumber and wood product company, also
saw a sharp share-price decline.
NEW HOLDINGS
We added two Canadian retailers: Canadian Tire and
Hudson's Bay. Both were attractively priced stocks
of companies with good business fundamentals. We
expect their stock prices eventually to catch up
with their earnings. We also added Centros Comerciales
Carrefour, the largest food retailer in Spain. The
company is the product of a merger between
Continente and Pryca. The process of combining
operations offers opportunities for cost cutting,
while the stock was selling at about a 25% discount
to its peers. Reckitt Benckiser (United Kingdom) is
another merger product, this one of Reckitt &
Colman and the Dutch company Benckiser. It makes
brand name household goods such as Lysol, Woolite,
French's Mustard, and Mop & Glo. Its new management
is more aggressive than the old, and should improve
its performance in Europe and in emerging market
countries. Valeo is a French global automobile
parts manufacturer. Parts companies tend to be less
vulnerable to the successes or failures of individual
car models than the big auto companies. Valeo was
selling for only about 13 times estimated 2000 earnings
when we acquired it. Alstom is among the world's largest
engineering firms, making power generating plants,
rail equipment, ships, and electrical equipment. It
is divesting itself of non-core businesses, and cutting
costs in a major refocusing effort, yet its shares
were relatively inexpensive.
6
<PAGE>
www.prudential.com (800) 225-1852
Looking Ahead
Interest-rate increases in the United States and
Europe and higher oil prices have slowed the rate
of global economic growth. The extent of this
slowdown is uncertain, but analysts are decreasing
their earnings projections. Growth stocks that had
been priced for a best-case scenario are falling,
but many value stocks had been priced for a worst-
case scenario. With low investor expectations,
their downside risk is relatively small, while
their potential for price appreciation, should the
global economy continue to chug along, is good.
We think our portfolio is well represented in
several attractive sectors, including banks and
financial services, drugs, household durables,
retailers, and industrials. As of period-end, our
holdings were priced below the MSCI EAFER Index in
comparison to companies' book values and cash
flows. We think we're well positioned whatever
happens to the world economy.
Prudential International Value Fund Management Team
7
<PAGE>
Prudential International Value Fund
Annual Report October 31, 2000
Financial
Statements
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Portfolio of Investments as of October 31, 2000
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS 87.3%
Common Stocks
-------------------------------------------------------------------------------------
Argentina 0.5%
170,000 Telecom Argentina SA (ADR) $ 2,921,875
-------------------------------------------------------------------------------------
Australia 1.9%
780,000 National Australia Bank Ltd. 10,902,480
-------------------------------------------------------------------------------------
Canada 6.0%
355,600 Alcan Aluminum Ltd. 11,228,613
500,000 Bank of Nova Scotia 14,293,225
420,600 Canadian Tire Corp., Ltd., (Class 'A' Stock) 4,919,945
486,200 Hudson's Bay Co. 4,313,399
--------------
34,755,182
-------------------------------------------------------------------------------------
Finland 1.7%
975,000 Stora Enso Oyj, Series R 10,015,485
-------------------------------------------------------------------------------------
France 5.9%
410,900 Alstom 9,034,787
157,000 Christian Dior SA 7,983,778
55,570 Total Fina SA, Series B 7,953,897
221,100 Valeo SA 9,629,153
--------------
34,601,615
-------------------------------------------------------------------------------------
Germany 2.9%
170,000 Adidas-Salomon AG 7,807,791
600,000 Continental AG 9,168,658
--------------
16,976,449
-------------------------------------------------------------------------------------
Hong Kong 1.9%
1,747,000 Swire Pacific, Ltd. (Class 'A' Stock) 10,774,824
-------------------------------------------------------------------------------------
Italy 5.6%
1,600,000 Bipop-Carire SpA 12,659,539
500,000 Banca Popolare Di Bergamo-Credito Vaesino SpA 8,574,392
6,250,700 Benetton Group SpA 11,355,975
--------------
32,589,906
</TABLE>
See Notes to Financial Statements 9
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Portfolio of Investments as of October 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
Japan 22.2%
800,000 Daiichi Pharmaceutical Co., Ltd. $ 22,723,108
1,563,900 Daiwa House Industry Co., Ltd. 9,815,572
1,236,500 Hitachi Ltd. 13,255,498
530,000 Matsushita Electric Industrial Co., Ltd. 15,393,989
1,438,100 Mitsui Fudosan Co., Ltd. 17,419,537
171,400 Oriental Land Co., Ltd. 10,365,036
2,185,800 Sumitomo Marine & Fire Insurance Co., Ltd. 13,338,307
1,700,600 Tanabe Seiyaku Co., Ltd. 12,714,766
2,750,600 Yasuda Fire & Marine Insurance Co., Ltd. 14,189,003
--------------
129,214,816
-------------------------------------------------------------------------------------
Netherlands 5.2%
224,200 Akzo Nobel N.V. 10,211,448
220,000 ING Groep N.V. 15,113,343
260,000 Koninklijke Luchtvaart Maatschappij N.V. 4,745,629
--------------
30,070,420
-------------------------------------------------------------------------------------
New Zealand
68,863 Carter Holt Harvey Ltd. 45,799
-------------------------------------------------------------------------------------
Singapore 2.3%
1,806,300 United Overseas Bank Ltd. 13,379,238
-------------------------------------------------------------------------------------
South Korea 2.0%
425,000 Korea Electric Power Corp. 9,490,110
40,580 Pohang Iron & Steel Co., Ltd. 2,358,099
--------------
11,848,209
-------------------------------------------------------------------------------------
Spain 4.7%
615,400 BBV Argentaria SA 8,202,366
130,000 Banco de Andalucia SA 2,868,346
604,574 Centros Comerciales Pryca SA(a) 7,662,867
700,000 Iberdrola SA 8,563,356
--------------
27,296,935
</TABLE>
10 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Portfolio of Investments as of October 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
-----------------------------------------------------------------------------------------
<C> <S> <C> <C>
Sweden 4.2%
600,000 Electrolux AB, Series B $ 7,560,000
96,800 Pharmacia & Upjohn, Inc. 5,198,160
340,000 SKF AB, Series B 5,049,000
440,000 Svedala Industri AB 6,556,000
--------------
24,363,160
-------------------------------------------------------------------------------------
Switzerland 6.2%
6,000 Novartis AG 9,102,895
17,000 Sulzer AG 10,980,556
70,000 UBS AG 9,697,071
30,000 Valora Holding AG 6,100,309
--------------
35,880,831
-------------------------------------------------------------------------------------
United Kingdom 14.1%
2,000,000 British Airways PLC 8,935,695
6,925,100 Corus Group PLC 6,228,240
1,500,000 Hanson PLC 7,909,396
1,000,000 Reckitt Benckiser PLC 13,142,434
500,000 Rio Tinto PLC 8,087,094
1,600,000 Royal & Sun Alliance Insurance Group PLC 11,384,307
700,000 Royal Bank of Scotland PLC 15,708,546
2,797,100 Tesco PLC 10,661,010
--------------
82,056,722
--------------
Total common stocks
(cost $432,306,192) 507,693,946
--------------
</TABLE>
See Notes to Financial Statements 11
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Portfolio of Investments as of October 31, 2000 Cont'd.
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C> <C>
------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT 11.9%
Repurchase Agreement
$ 69,313 Joint Repurchase Agreement Account,
6.55%, 11/1/00 (cost $69,313,000; Note 5) $ 69,313,000
----------------
Total Investments 99.2%
(cost $501,619,192; Note 4) 577,006,946
Other assets in excess of liabilities--0.8% 4,724,171
----------------
Net Assets 100% $ 581,731,117
----------------
----------------
</TABLE>
------------------------------
(a) Non-income producing security.
AB--Antiebolay (Swedish Stock Company).
ADR--American Depository Receipt.
AG--Aktiengesellschaft (German Stock Company).
N.V.--Naamloze Vennootschap (Dutch Corporation).
Oyj--Osakeyhrio (Finland Stock Company).
PLC--Public Limited Company (British Corporation).
SA-- Sociedad Anonima (Spanish Corporation), or Societe Anonyme, (French
Corporation).
SpA--Societa per Azione (Italian Corporation).
12 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Portfolio of Investments as of October 31, 2000 Cont'd.
The industry classification of portfolio holdings and other assets in excess of
liabilities shown as a percentage of net assets as of October 31, 2000 was as
follows:
<TABLE>
<S> <C>
Commercial Banking........................................................ 16.5%
Pharmaceuticals........................................................... 8.6
Insurance................................................................. 6.7
Household Durable......................................................... 5.6
Food & Drug Retailing..................................................... 5.4
Metal & Mining............................................................ 4.8
Textiles & Apparel........................................................ 4.7
Finance................................................................... 4.4
Electronic Equipment & Instruments........................................ 3.9
Machinery & Engineering................................................... 3.9
Auto Manufacturing........................................................ 3.2
Electrical & Gas Utilities................................................ 3.0
Real Estate............................................................... 3.0
Transportation Airlines................................................... 2.4
Chemicals................................................................. 1.8
Hotels Restaurants & Leisure.............................................. 1.8
Forestry & Paper.......................................................... 1.7
Multi-Line Retail......................................................... 1.6
Construction Materials.................................................... 1.4
Oil & Gas Services........................................................ 1.4
Specialty Retail.......................................................... 1.0
Telecommunications........................................................ 0.5
Repurchase Agreement...................................................... 11.9
-----
99.2%
Other assets in excess of liabilities..................................... 0.8
-----
100.0%
-----
-----
</TABLE>
See Notes to Financial Statements 13
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
October 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
ASSETS
Investments at value, excluding repurchase agreement (cost
$432,306,192) $507,693,946
Repurchase agreement (cost $69,313,000) 69,313,000
Cash 56,542
Foreign currency, at value (cost $138,297) 139,117
Receivable for Series shares sold 6,301,951
Dividends and interest receivable 737,685
Tax reclaim receivable 575,744
Receivable for investments sold 97,303
Other assets 6,461
----------------
Total assets 584,921,749
----------------
LIABILITIES
Payable for Series shares reacquired 2,262,800
Management fee payable 462,174
Accrued expenses 272,323
Distribution fee payable 100,996
Withholding taxes payable 92,339
----------------
Total liabilities 3,190,632
----------------
NET ASSETS $581,731,117
----------------
----------------
Net assets were comprised of:
Common stock, at par $ 263,284
Paid-in capital in excess of par 483,358,882
----------------
483,622,166
Accumulated net realized gain on investments 22,793,271
Net unrealized appreciation on investments and foreign
currencies 75,315,680
----------------
Net assets, October 31, 2000 $581,731,117
----------------
----------------
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Statement of Assets and Liabilities Cont'd.
<TABLE>
<CAPTION>
October 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
Class A:
Net asset value and redemption price per share
($72,184,892 / 3,269,830 shares of common stock issued
and outstanding) $22.08
Maximum sales charge (5% of offering price) 1.16
----------------
Maximum offering price to public $23.24
----------------
----------------
Class B:
Net asset value, offering price and redemption price per
share ($86,451,363 / 3,950,848 shares of common stock
issued and outstanding) $21.88
----------------
----------------
Class C:
Net asset value and redemption price per share
($17,754,707/ 811,398 shares of common stock issued and
outstanding) $21.88
Sales charge (1% of offering price) .22
----------------
Offering price to public $22.10
----------------
----------------
Class Z:
Net asset value, offering price and redemption price per
share ($405,340,155 / 18,296,370 shares of common stock
issued and outstanding) $22.15
----------------
----------------
</TABLE>
See Notes to Financial Statements 15
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Statement of Operations
<TABLE>
<CAPTION>
Year
Ended
October 31, 2000
<S> <C> <C>
----------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Dividends (net of foreign withholding taxes of $1,571,553) $ 10,645,759
Interest 2,938,501
----------------
Total income 13,584,260
----------------
Expenses
Management fee 5,524,090
Distribution fee--Class A 168,405
Distribution fee--Class B 991,060
Distribution fee--Class C 180,819
Transfer agent's fees and expenses 1,015,000
Custodian's fees and expenses 473,000
Reports to shareholders 120,000
Registration fees 80,000
Legal fees and expenses 45,000
Audit fees 35,000
Directors' fees and expenses 15,000
Miscellaneous 22,244
----------------
Total expenses 8,669,618
----------------
Net investment income 4,914,642
----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND FOREIGN
CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investment transactions 62,337,745
Foreign currency transactions (2,001,742)
----------------
60,336,003
----------------
Net change in unrealized appreciation/depreciation on:
Investments (40,024,253)
Foreign currencies 64,707
----------------
(39,959,546)
----------------
Net gain on investments and foreign currencies 20,376,457
----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 25,291,099
----------------
----------------
</TABLE>
16 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended October 31,
-----------------------------------
2000 1999
-----------------------------------------------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 4,914,642 $ 6,286,376
Net realized gain on investment and
foreign currency transactions 60,336,003 24,041,413
Net change in unrealized
appreciation/depreciation of
investments and foreign currencies (39,959,546) 70,216,724
---------------- ---------------
Net increase in net assets resulting from
operations 25,291,099 100,544,513
---------------- ---------------
Dividends and distributions (Note 1)
Dividends from net investment income
Class A (449,461) (384,802)
Class B (45,069) (50,664)
Class C (7,949) (7,740)
Class Z (3,331,846) (2,927,028)
---------------- ---------------
(3,834,325) (3,370,234)
---------------- ---------------
Distributions from net realized capital
gains
Class A (2,879,777) --
Class B (4,822,392) --
Class C (850,578) --
Class Z (16,278,883) --
---------------- ---------------
(24,831,630) --
---------------- ---------------
Series share transactions (net of
conversions)
(Note 6)
Net proceeds from shares sold 1,558,082,803 1,038,865,029
Net asset value of shares issued in
reinvestment of dividends and
distributions 28,429,080 3,360,460
Cost of shares reacquired (1,534,854,738) (1,015,931,671)
---------------- ---------------
Net increase in net assets from Series
share transactions 51,657,145 26,293,818
---------------- ---------------
Total increase 48,282,289 123,468,097
NET ASSETS
Beginning of year 533,448,828 409,980,731
---------------- ---------------
End of year(a) $ 581,731,117 $ 533,448,828
---------------- ---------------
---------------- ---------------
------------------------------
(a) Includes undistributed net investment
income of: $ -- $ 3,562,439
---------------- ---------------
---------------- ---------------
</TABLE>
See Notes to Financial Statements 17
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Notes to Financial Statements
Prudential World Fund, Inc. (the 'Fund') is registered under the
Investment Company Act of 1940, as an open-end, diversified management
investment company and currently consists of three series: Prudential
International Value Fund (the 'Series'), Prudential Global Growth Fund, and the
Prudential Jennison International Growth Fund. The financial statements of the
other Series are not presented herein. The Series commenced investment
operations in November 1992. The investment objective of the Series is to
achieve long-term growth of capital. Income is a secondary objective. The Series
seeks to achieve its objective primarily through investment in common stock and
preferred stock of foreign companies of all sizes.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund and the Series in the preparation of its financial statements.
Securities Valuation: Securities traded on an exchange (whether
domestic or foreign) and NASDAQ National Market System securities are valued at
the last sale price of such exchange system on the day of valuation or, if there
was no sale on such day, the mean between the last bid and asked prices on such
day, or at the bid price on such day in the absence of an asked price.
Securities for which reliable market quotations are not readily available are
valued by the Valuation Committee or Board of Directors in consultation with the
manager or subadviser.
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.
Repurchase Agreements: 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 securities, the value
of which exceeds the principal amount of the repurchase transaction including
accrued interest. To the extent that any repurchase transaction exceeds one
business day, the value of the collateral is marked-to-market on a daily basis
to ensure the accuracy of the collateral. If the seller defaults and the value
of the collateral declines or if bankruptcy proceedings are commenced with
respect to the seller of the security, realization of the collateral by the Fund
may be delayed or limited.
All securities are valued as of 4:15 p.m., New York time.
Foreign Currency Translation: The books and records of the Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
18
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Notes to Financial Statements Cont'd.
(i) market value of investment securities, other assets and liabilities -
at the closing daily rates of exchange.
(ii) purchases and sales of investment securities, income and expenses -
at the rate of exchange prevailing on the respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the fiscal year, the Fund does not
isolate that portion of the results of operations arising as a result of changes
in the foreign exchange rates from the fluctuations arising from changes in the
market prices of securities held at the end of the year. Similarly, the Fund
does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of long-term portfolio
securities sold during the year. Accordingly, these realized foreign currency
gains (losses) are included in the reported net realized gains (losses) on
investment transactions.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains or losses from holdings of foreign currencies, currency
gains or losses realized between the trade and settlement dates on security
transactions, and the difference between the amounts of dividends, interest and
foreign taxes recorded on the Fund's books and the U.S. dollar equivalent
amounts actually received or paid. Net unrealized currency gains or losses from
valuing foreign currency denominated assets and liabilities (other than
investments) at year-end exchange rates are reflected as a component of net
unrealized appreciation on investments and foreign currencies.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of domestic origin
as a result of, among other factors, the possibility of political and economic
instability and the level of governmental supervision and regulation of foreign
securities markets.
Securities Transactions and Net Investment Income: Securities
transactions are recorded on the trade date. Realized gains and losses from
investment and currency transactions are calculated on the identified cost
basis. Dividend income is recorded on the ex-dividend date; 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 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.
Taxes: For federal income tax purposes, each series in the Fund is
treated as a separate taxpaying entity. It is the intent of the Series to
continue to meet the
19
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Notes to Financial Statements Cont'd.
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net income to 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.
Dividends and Distributions: The Fund expects to pay dividends of net
investment income and distributions of net realized capital and currency gains,
if any, annually. 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.
Reclassification of Capital Accounts: The Series accounts for and
reports distributions to shareholders in accordance with the American Institute
of Certified Public Accountants' Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gains, and
Return of Capital Distributions by Investment Companies. The effect for the
Series of applying this statement was to decrease undistributed net investment
income by $4,642,756 and decrease accumulated net realized gain on investments
by $37,440,324 and increase paid-in capital in excess of par by $42,083,080 for
redemptions utilized as distributions for federal income tax purposes and for
realized foreign currency losses during the year ended October 31, 2000. Net
investment income, net realized gains and net assets were not affected by this
change.
Note 2. Agreements
The Fund has a management agreement with Prudential Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, 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 Mercator Asset
Management, L.P. ('Mercator'), a limited partnership where The Prudential Asset
Management Company, Inc. ('PAMCO') is a limited partner. Mercator furnishes
investment advisory services in connection with the management of the Series.
PIFM pays for the cost of the subadviser's services, the compensation of
officers and employees of the Fund, occupancy and certain clerical and
bookkeeping costs of the Fund. The Fund bears all other costs and expenses.
Effective January 1, 2000 the management fee paid PIFM is computed daily
and payable monthly at an annual rate of 1% of the average daily net assets up
to 300 million and .90 of 1% of average daily net assets in excess of 300
million of the Series. Prior to January 1, 2000 the fee was computed daily and
payable monthly at an
20
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Notes to Financial Statements Cont'd.
annual rate of 1% of the average daily net assets of the Series. PIFM pays
Mercator at an annual rate of .75 of 1% of the Series average daily net assets
up to and including $50 million, .60 of 1% of the Series' average daily net
assets in excess of $50 million up to and including $300 million and .45 of 1%
of the Series' average daily net assets in excess of $300 million.
The Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS') which acts as the distributor of the Class A,
Class B, Class C and Class Z shares of the Fund. The Fund compensates PIMS for
distributing and servicing the Fund's Class A, Class B and Class C shares,
pursuant to plans of distribution, (the 'Class A, B and C Plans'), regardless of
expenses actually incurred by them. The distribution fees are accrued daily and
payable monthly. No distribution or service fees are paid to PIMS as distributor
for Class Z shares of the Fund.
Pursuant to the Class A, B and C Plans, the Series compensates PIMS for
distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1%
of the average daily net assets of the Class A, B, and C shares, respectively.
Such expenses under the Plans were .25 of 1%, 1% and 1% of the average daily net
assets of the Class A, B and C shares respectively, for the year ended October
31, 2000.
PIMS has advised the Series that they received approximately $83,000 and
$31,300 in front-end sales charges resulting from sales of Class A and Class C
shares, respectively, during the year ended October 31, 2000. From these fees,
PIMS paid such sales charges to affiliated broker-dealers, which in turn paid
commissions to salespersons and incurred other distribution costs.
PIMS has advised the Series that for the year ended October 31, 2000, they
received approximately $276,000 and $9,000 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
PIMS, PIFM and PAMCO are wholly owned subsidiaries of The Prudential
Insurance Company of America.
The Series, along with other affiliated registered investment companies
(the 'Funds'), entered into a syndicated credit agreement ('SCA') with an
unaffiliated lender. The maximum commitment under the SCA is $1 billion.
Interest on any such borrowings will be at market rates. The purpose of the
agreement is to serve as an alternative source of funding for capital share
redemptions. The Funds pay a commitment fee of .080 of 1% of the unused portion
of the credit facility. The commitment fee is accrued and paid quarterly on a
pro rata basis by the Funds. The expiration date of the SCA is March 9, 2001.
Prior to March 9, 2000, the commitment fee was .065 of 1% of the unused portion
of the credit facility. The Fund did not borrow any amounts pursuant to the SCA
during the year ended October 31, 2000.
21
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
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 Fund's transfer agent. During the year ended October 31, 2000, the
Series incurred fees of approximately $78,100 for the services of PMFS. As of
October 31, 2000 approximately $981,700 such fees were due to PMFS. Transfer
agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to nonaffiliates.
Note 4. Portfolio Securities
Purchases and sales of portfolio securities of the Series, excluding short-term
investments, for the year ended October 31, 2000 were $196,441,943 and
$173,947,399, respectively.
The federal income tax basis of the Series' investments as of October 31,
2000 was $501,676,383 accordingly, net unrealized appreciation on investments
for federal income tax purposes was $75,330,563 (gross unrealized
appreciation--$114,759,746, gross unrealized depreciation--$39,429,183).
Note 5. Joint Repurchase Agreement Account
The Fund, along with other affiliated registered investment 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 October 31, 2000, the
Series had a 10.52% undivided interest in the repurchase agreements in the joint
account. The undivided interest for the Series represents $69,313,000 in the
principal amount. As of such date, each repurchase agreement in the joint
account and the collateral therefor were as follows:
ABN AMRO Incorporated, 6.56%, in the principal amount of $150,000,000,
repurchase price $150,027,333, due 11/1/00. The value of the collateral
including accrued interest was $153,000,176.
Bear, Stearns & Co. Inc., 6.56%, in the principal amount of $175,000,000,
repurchase price $175,031,889, due 11/1/00. The value of the collateral
including accrued interest was $184,628,570.
Chase Securities Inc., 6.56%, in the principal amount of $115,000,000,
repurchase price $115,020,956, due 11/1/00. The value of the collateral
including accrued interest was $117,304,831.
Merrill Lynch, Pierce, Fenner & Smith, Inc., 6.375%, in the principal
amount of $43,782,000, repurchase price $43,789,753, due 11/1/00. The value of
the collateral including accrued interest was $44,659,885.
22
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Notes to Financial Statements Cont'd.
UBS Warburg, 6.56%, in the principal amount of $175,000,000, repurchase
price $175,031,889, due 11/1/00. The value of the collateral including accrued
interest was $178,501,724.
Note 6. Capital
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with a front-end sales charge of up to 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 front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares automatically convert to Class A shares on a quarterly
basis approximately seven years after purchase. A special exchange privilege is
also available for shareholders who qualified to purchase Class A shares at net
asset value. Class Z shares are not subject to any sales or redemption charge
and are offered exclusively for sale to a limited group of investors.
There are 500 million authorized shares of $.01 par value common stock,
divided equally into four classes, designated Class A, Class B, Class C and
Class Z common stock.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
-------------------------------------------------------- ----------- ---------------
<S> <C> <C>
Year ended October 31, 2000:
Shares sold 15,814,956 $ 356,822,680
Shares issued in reinvestment of dividends and
distributions 146,976 3,267,270
Shares reacquired (15,675,172) (354,627,619)
----------- ---------------
Net increase in shares outstanding before conversion 286,760 5,462,331
Shares issued upon conversion from Class B 260,188 5,874,396
----------- ---------------
Net increase in shares outstanding 546,948 $ 11,336,727
----------- ---------------
Year ended October 31, 1999:
Shares sold 5,231,884 $ 108,850,967
Shares issued in reinvestment of dividends and
distributions 20,402 378,859
Shares reacquired (5,239,651) (108,963,225)
----------- ---------------
Net increase in shares outstanding before conversion 12,635 266,601
Shares issued upon conversion from Class B 132,844 2,755,379
----------- ---------------
Net increase in shares outstanding 145,479 $ 3,021,980
----------- ---------------
----------- ---------------
</TABLE>
23
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Notes to Financial Statements Cont'd.
<TABLE>
<CAPTION>
Class B Shares Amount
-------------------------------------------------------- ----------- ---------------
Year ended October 31, 2000:
<S> <C> <C>
Shares sold 1,041,891 $ 23,528,726
Shares issued in reinvestment of dividends and
distributions 213,209 4,728,969
Shares reacquired (1,588,503) (35,900,566)
----------- ---------------
Net decrease in shares outstanding before conversion (333,403) (7,642,871)
Shares reacquired upon conversion into Class A (261,645) (5,874,396)
----------- ---------------
Net decrease in shares outstanding (595,048) $ (13,517,267)
----------- ---------------
----------- ---------------
Year ended October 31, 1999:
Shares sold 1,638,622 $ 33,422,346
Shares issued in reinvestment of dividends and
distributions 2,633 48,820
Shares reacquired (2,127,610) (43,374,506)
----------- ---------------
Net decrease in shares outstanding before conversion (486,355) (9,903,340)
Shares reacquired upon conversion into Class A (133,715) (2,755,379)
----------- ---------------
Net decrease in shares outstanding (620,070) $ (12,658,719)
----------- ---------------
----------- ---------------
<CAPTION>
Class C
--------------------------------------------------------
<S> <C> <C>
Year ended October 31, 2000:
Shares sold 924,516 $ 20,585,463
Shares issued in reinvestment of dividends and
distributions 37,783 838,028
Shares reacquired (964,211) (21,566,618)
----------- ---------------
Net decrease in shares outstanding (1,912) $ (143,127)
----------- ---------------
----------- ---------------
Year ended October 31, 1999:
Shares sold 1,059,135 $ 21,509,606
Shares issued in reinvestment of dividends and
distributions 405 7,502
Shares reacquired (1,031,357) (20,905,913)
----------- ---------------
Net increase in shares outstanding 28,183 $ 611,195
----------- ---------------
----------- ---------------
</TABLE>
24
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Notes to Financial Statements Cont'd.
<TABLE>
<CAPTION>
Class Z Shares Amount
-------------------------------------------------------- ----------- ---------------
Year ended October 31, 2000:
<S> <C> <C>
Shares sold 51,001,500 $ 1,157,145,934
Shares issued in reinvestment of dividends and
distributions 880,270 19,594,813
Shares reacquired (49,302,541) (1,122,759,935)
----------- ---------------
Net increase in shares outstanding 2,579,229 $ 53,980,812
----------- ---------------
----------- ---------------
Year ended October 31, 1999:
Shares sold 42,330,958 $ 875,082,110
Shares issued in reinvestment of dividends and
distributions 157,357 2,925,279
Shares reacquired (40,619,778) (842,688,027)
----------- ---------------
Net increase in shares outstanding 1,868,537 $ 35,319,362
----------- ---------------
----------- ---------------
</TABLE>
Note 7. Change in Subadvisor
On November 15, 2000, the Board of Directors approved a change in the subadvisor
of the Fund from Mercator to Bank of Ireland Asset Management effective in early
January 2001.
25
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Financial Highlights
<TABLE>
<CAPTION>
Class A
-------------------
Year Ended
October 31, 2000(d)
-----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 22.42
--------
Income from investment operations:
Net investment income (loss) .19
Net realized and unrealized gain (loss) on investment and
foreign currency transactions .71
--------
Total from investment operations .90
--------
Less distributions:
Dividends from net investment income (.17)
Distributions from net realized capital gains (1.07)
--------
Total distributions (1.24)
--------
Net asset value, end of period $ 22.08
--------
--------
TOTAL RETURN(a) 3.92%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $72,185
Average net assets (000) $67,362
Ratios to average net assets:
Expenses, including distribution and service (12b-1)
fees(e) 1.52%
Expenses, excluding distribution and service (12b-1)
fees 1.27%
Net investment income (loss) .84%
For Class A, B, C and Z shares:
Portfolio turnover rate 33%
</TABLE>
------------------------------
(a) Total return does not consider the effect of sales load. 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 return for periods of less than a full year are not
annualized.
(b) Annualized.
(c) Figures are actual and are not rounded to the nearest thousand.
(d) Calculated based upon average shares outstanding during the year.
(e) The distributor of the Fund agreed to limit its distribution and services
(12b-1) fees to .25 of 1% of the average daily net assets of the Class A
shares.
26 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class A
---------------------------------------------------------------------------------------------------------------
Year Ended October 31, October 1, 1996 September 23, 1996(c)
---------------------------------------------------------- Through Through
1999 1998 1997(d) October 31, 1996 September 30, 1996
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 18.33 $ 18.24 $ 16.59 $16.48 $ 16.54
-------- -------- -------- ------- -------
.27 .27 .24 (.01) --
3.97 .40 1.85 .12 (.06)
-------- -------- -------- ------- -------
4.24 .67 2.09 .11 (.06)
-------- -------- -------- ------- -------
(.15) (.18) (.24) -- --
-- (.40) (.20) -- --
-------- -------- -------- ------- -------
(.15) (.58) (.44) -- --
-------- -------- -------- ------- -------
$ 22.42 $ 18.33 $ 18.24 $16.59 $ 16.48
-------- -------- -------- ------- -------
-------- -------- -------- ------- -------
23.30% 3.85% 12.85% .67% (.36)%
$ 61,036 $ 47,237 $ 36,184 $5,169(c) $ 199(d)
$ 52,732 $ 44,708 $ 18,779 $2,793(c) $ 199(d)
1.61% 1.62% 1.75% 2.05%(b) 2.46%(b)
1.36% 1.37% 1.50% 1.80%(b) 2.21%(b)
1.35% 1.28% 1.40% (1.03)%(b) .75%(b)
21% 15% 9% 4% 15%
</TABLE>
See Notes to Financial Statements 27
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class B
-------------------
Year Ended
October 31, 2000(d)
-----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 22.23
----------
Income from investment operations:
Net investment income (loss) .02
Net realized and unrealized gain on investment and foreign
currency transactions .71
----------
Total from investment operations .73
----------
Less distributions:
Dividends from net investment income (.01)
Distributions from net realized capital gains (1.07)
----------
Total distributions (1.08)
----------
Net asset value, end of period $ 21.88
----------
----------
TOTAL RETURN(a) 3.22%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 86,451
Average net assets (000) $ 99,106
Ratios to average net assets:
Expenses, including distribution and service (12b-1)
fees 2.27%
Expenses, excluding distribution and service (12b-1)
fees 1.27%
Net investment income (loss) .07%
</TABLE>
------------------------------
(a) Total return does not consider the effect of sales load. 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 return for periods of less than a full year are not
annualized.
(b) Annualized.
(c) Figures are actual and are not rounded to the nearest thousand.
(d) Calculated based upon average shares outstanding during the year.
28 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class B
---------------------------------------------------------------------------------------------------------------
Year Ended October 31, October 1, 1996 September 23, 1996(c)
---------------------------------------------------------- Through Through
1999 1998 1997(d) October 31, 1996 September 30, 1996
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 18.18 $ 18.13 $ 16.57 $16.47 $ 16.54
---------------- -------- -------- ------- -------
.12 .10 .12 (.02) --
3.94 .43 1.84 .12 (.07)
---------------- -------- -------- ------- -------
4.06 .53 1.96 .10 (.07)
---------------- -------- -------- ------- -------
(.01) (.08) (.20) -- --
-- (.40) (.20) -- --
---------------- -------- -------- ------- -------
(.01) (.48) (.40) -- --
---------------- -------- -------- ------- -------
$ 22.23 $ 18.18 $ 18.13 $16.57 $ 16.47
---------------- -------- -------- ------- -------
---------------- -------- -------- ------- -------
22.34% 3.05% 12.04% .61% (.42)%
$101,043 $ 93,896 $ 87,155 $1,922(c) $ 199(d)
$ 98,842 $ 98,444 $ 47,584 $ 313(c) $ 199(d)
2.36% 2.37% 2.50% 2.80%(b) 3.21%(b)
1.36% 1.37% 1.50% 1.80%(b) 2.21%(b)
.59% .53% .65% (1.78)%(b) 0%(b)
</TABLE>
See Notes to Financial Statements 29
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class C
-------------------
Year Ended
October 31, 2000(d)
-----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 22.23
--------
Income from investment operations:
Net investment income (loss) .02
Net realized and unrealized gain on investment and foreign
currency transactions .71
--------
Total from investment operations .73
--------
Less distributions:
Dividends from net investment income (.01)
Distributions from net realized gains (1.07)
--------
Total distributions (1.08)
--------
Net asset value, end of period $ 21.88
--------
--------
TOTAL RETURN(a) 3.22%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $17,755
Average net assets (000) $18,082
Ratios to average net assets:
Expenses, including distribution and service (12b-1)
fees 2.27%
Expenses, excluding distribution and service (12b-1)
fees 1.27%
Net investment income (loss) .07%
</TABLE>
------------------------------
(a) Total return does not consider the effect of sales load. 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 return for periods of less than a full year are not
annualized.
(b) Annualized.
(c) Figures are actual and are not rounded to the nearest thousand.
(d) Calculated based upon average shares outstanding during the year.
30 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class C
---------------------------------------------------------------------------------------------------------------
Year Ended October 31, October 1, 1996 September 23, 1996(c)
---------------------------------------------------------- Through Through
1999 1998 1997(d) October 31, 1996 September 30, 1996
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 18.18 $ 18.13 $ 16.57 $16.47 $ 16.54
-------- -------- -------- ------- -------
.11 .10 .12 (.02) --
3.95 .43 1.84 .12 (.07)
-------- -------- -------- ------- -------
4.06 .53 1.96 .10 (.07)
-------- -------- -------- ------- -------
(.01) (.08) (.20) -- --
-- (.40) (.20) -- --
-------- -------- -------- ------- -------
(.01) (.48) (.40) -- --
-------- -------- -------- ------- -------
$ 22.23 $ 18.18 $ 18.13 $16.57 $ 16.47
-------- -------- -------- ------- -------
-------- -------- -------- ------- -------
22.34% 3.05% 12.04% .61% (.42)%
$ 18,078 $ 14,271 $ 12,354 $ 200(c) $ 199(d)
$ 15,815 $ 14,345 $ 7,473 $ 202(c) $ 199(d)
2.36% 2.37% 2.50% 2.80%(b) 3.21%(b)
1.36% 1.37% 1.50% 1.80%(b) 2.21%(b)
.59% .53% .65% (1.78)%(b) 0%(b)
</TABLE>
See Notes to Financial Statements 31
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class Z
-------------------
Year Ended
October 31, 2000(d)
-----------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 22.48
----------
Income from investment operations:
Net investment income (loss) .25
Net realized and unrealized gain on investment and foreign
currency transactions .71
----------
Total from investment operations .96
----------
Less distributions:
Dividends from net investment income (.22)
Distributions from net realized gains (1.07)
----------
Total distributions (1.29)
----------
Net asset value, end of period $ 22.15
----------
----------
TOTAL RETURN(a) 4.24%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 405,340
Average net assets (000) $ 391,289
Ratios to average net assets:
Expenses, including distribution and service (12b-1)
fees 1.27%
Expenses, excluding distribution and service (12b-1)
fees 1.27%
Net investment income (loss) 1.09%
</TABLE>
------------------------------
(a) 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 return for periods of less than a full
year are not annualized.
(b) Annualized.
(c) Calculated based upon average shares outstanding during the year.
32 See Notes to Financial Statements
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Financial Highlights Cont'd.
<TABLE>
<CAPTION>
Class Z
----------------------------------------------------------------------------------------------------------
Year Ended October 31, October 1, 1996 Year Ended
---------------------------------------------------------- Through September 30,
1999 1998 1997(c) October 31, 1996 1996
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 18.38 $ 18.28 $ 16.59 $ 16.48 $ 15.25
---------------- ---------------- ---------------- ---------------- ----------------
.31 .30 .31 (.01) .22
3.99 .41 1.82 .12 1.20
---------------- ---------------- ---------------- ---------------- ----------------
4.30 .71 2.13 .11 1.42
---------------- ---------------- ---------------- ---------------- ----------------
(.20) (.21) (.24) -- (.19)
-- (.40) (.20) -- --
---------------- ---------------- ---------------- ---------------- ----------------
(.20) (.61) (.44) -- (.19)
---------------- ---------------- ---------------- ---------------- ----------------
$ 22.48 $ 18.38 $ 18.28 $ 16.59 $ 16.48
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
23.62% 4.08% 13.13% .67% 9.44%
$353,292 $254,577 $237,976 $190,428 $188,386
$308,917 $258,322 $219,419 $191,228 $161,356
1.36% 1.37% 1.50% 1.80%(b) 1.61%(c)
1.36% 1.37% 1.50% 1.80%(b) 1.61%(c)
1.59% 1.53% 1.65% (.78)%(b) 1.58%(c)
</TABLE>
See Notes to Financial Statements 33
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Report of Independent Accountants
To the Shareholders and Board of Directors of
Prudential World Fund, Inc.--Prudential International Value 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 Prudential World Fund,
Inc.--Prudential International Value Fund (the 'Fund', one of the portfolios
constituting Prudential World Fund, Inc.) at October 31, 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 four years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America. 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 of America, 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 October 31, 2000 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion. The accompanying financial
highlights for the period ended October 31, 1996 were audited by other
independent accountants, whose opinion dated November 27, 1996 was unqualified.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
December 20, 2000
34
<PAGE>
Prudential World Fund, Inc. Prudential International Value Fund
Federal Income Tax Information (Unaudited)
We are required by the Internal Revenue Code to advise you within 60 days
of the Fund's fiscal year end (October 31, 2000) as to the federal income tax
status of dividends paid by the Fund during such fiscal year. Accordingly, we
are advising you that during its fiscal year ended October 31, 2000, the Fund
paid an ordinary distribution for Class A shares totaling $.17 per share, which
is taxable as ordinary income. The Fund paid an ordinary distribution for Class
B and Class C shares totaling $.01 per share, which is taxable as ordinary
income. The Fund paid an ordinary distribution for Class Z shares totaling $.22
per share, which is taxable as ordinary income. The Fund paid long-term capital
gains distributions for Class A, Class B, Class C and Class Z shares of $1.07
per share, which are taxable as such. The Fund utilized redemptions as
distributions in the amount of $.109 and $1.70 of ordinary income and long-term
capital gains, respectively, for each class of shares.
Further, we wish to advise you that 11.47% of the ordinary income
dividends paid in the fiscal year ended October 31, 2000 qualified for the
corporate dividends received deduction available to corporate taxpayers.
The Fund has elected to give the benefit of foreign tax credits to its
shareholders. Accordingly, shareholders who must report their gross income
dividends and distributions in a federal income tax return will be entitled to a
foreign tax credit, or an itemized deduction in computing their U.S. income tax
liability. It is generally more advantageous to claim a credit rather than take
a deduction. For the fiscal year ended October 31, 2000 the Fund intends on
passing through 40% per share of ordinary income distributions as a foreign tax
credit.
In January 2001, you will be advised on IRS Form 1099 DIV or substitute
1099 DID as to the federal tax status of the dividends and distributions
received by you in calendar year 2000.
35
<PAGE>
Prudential International Value Fund
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
professional 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 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
Prudential Value 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
<PAGE>
www.prudential.com (800) 225-1852
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
New Jersey Series
New York 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>
Prudential International Value Fund
Getting the Most from Your Prudential Mutual Fund
Some mutual fund shareholders won't ever read this--
they don't read annual and semiannual reports. It's
quite understandable. These annual and semiannual
reports are prepared to comply with federal
regulations, and are often written in language that
is difficult to understand. So when most people run
into those particularly daunting sections of these
reports, they don't read them.
WE THINK THAT'S A MISTAKE
At Prudential Mutual Funds, we've made some changes
to our report to make it easier to understand and
more pleasant to read. We hope you'll find it
profitable to spend a few minutes familiarizing
yourself with your investment. Here's what you'll
find in the report:
PERFORMANCE AT A GLANCE
Since an investment's performance is often a
shareholder's primary concern, we present
performance information in two different formats.
You'll find it first on the "Performance at a
Glance" page where we compare the Fund and the
comparable average calculated by Lipper, Inc., a
nationally recognized mutual fund rating agency. We
report both the cumulative total returns and the
average annual total returns. The cumulative total
return is the total amount of income and
appreciation the Fund has achieved in various time
periods. The average annual total return is an
annualized representation of the Fund's
performance. It gives you an idea of how much the
Fund has earned in an average year for a given time
period. Under the performance box, you'll see
legends that explain the performance information,
whether fees and sales charges have been included
in returns, and the inception dates for the Fund's
share classes.
See the performance comparison charts at the back
of the report for more performance information.
Please keep in mind that past performance is not
indicative of future results.
<PAGE>
www.prudential.com (800) 225-1852
INVESTMENT ADVISER'S REPORT
The portfolio manager, who invests your money for
you, reports on successful--and not-so-successful--
strategies in this section of your report. Look
for recent purchases and sales here, as well as
information about the sectors the portfolio manager
favors, and any changes that are on the
drawing board.
PORTFOLIO OF INVESTMENTS
This is where the report begins to appear
technical, but it's really just a listing
of each security held at the end of the
reporting period, along with valuations and other
information. Please note that sometimes we discuss
a security in the "Investment Adviser's Report"
section that doesn't appear in this listing because
it was sold before the close of the reporting
period.
STATEMENT OF ASSETS AND LIABILITIES
The balance sheet shows the assets (the value of
the Fund's holdings), liabilities (how much the
Fund owes), and net assets (the Fund's
equity, or holdings after the Fund pays its debts)
as of the end of the reporting period. It also
shows how we calculate the net asset value per
share for each class of shares. The net asset value
is reduced by payment of your dividend, capital gain,
or other distribution, but remember that the money
or new shares are being paid or issued to you.
The net asset value fluctuates daily, along with
the value of every security in the portfolio.
STATEMENT OF OPERATIONS
This is the income statement, which details income
(mostly interest and dividends earned) and expenses
(including what you pay us to manage your money).
You'll also see capital gains here--both realized
and unrealized.
<PAGE>
Prudential International Value Fund
Getting the Most from Your Prudential Mutual Fund
STATEMENT OF CHANGES IN NET ASSETS
This schedule shows how income and expenses
translate into changes in net assets. The Fund
is required to pay out the bulk of its income to
shareholders every year, and this statement shows
you how we do it (through dividends and distributions)
and how that affects the net assets. This statement
also shows how money from investors flowed into and
out of the Fund.
NOTES TO FINANCIAL STATEMENTS
This is the kind of technical material that can
intimidate readers, but it does contain useful
information. The Notes provide a brief history and
explanation of your Fund's objectives. In addition,
they outline how Prudential Mutual Funds prices
securities. The Notes also explain who manages and
distributes the Fund's shares and, more importantly,
how much they are paid for doing so. Finally, the
Notes explain how many shares are outstanding and
the number issued and redeemed over the period.
FINANCIAL HIGHLIGHTS
This information contains many elements from prior
pages, but on a per-share basis. It is designed to help
you understand how the Fund performed, and to compare
this year's performance and expenses to those of prior years.
INDEPENDENT ACCOUNTANT'S REPORT
Once a year, an independent accountant looks over
our books and certifies that the financial
statements are fairly presented in accordance with
generally accepted accounting principles.
TAX INFORMATION
This is information that we report annually about
how much of your total return is taxable. Should
you have any questions, you may want to consult a
tax adviser.
<PAGE>
www.prudential.com (800) 225-1852
PERFORMANCE COMPARISON
These charts are included in the annual report and
are required by the Securities Exchange Commission.
Performance is presented here as a hypothetical
$10,000 investment in the Fund since its inception
or for 10 years (whichever is shorter). To help you
put that return in context, we are required to include
the performance of an unmanaged, broad-based
securities index as well. The index does not reflect
the cost of buying the securities it contains or the
cost of managing a mutual fund. Of course, the
index holdings do not mirror those of the Fund--the
index is a broad-based reference point commonly used
by investors to measure how well they are doing. A
definition of the selected index is also provided.
Investors cannot invest directly in an index.
<PAGE>
Prudential International Value Fund
Class A Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 10/31/00
One Year Five Years Since Inception
With Sales Charge -1.28% N/A 9.12%
Without Sales Charge 3.92% N/A 10.50%
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. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from year
to year by measuring the best and worst calendar
years in terms of total annual return since inception
of the share class. The graph compares a $10,000
investment in the Prudential International Value
Fund (Class A shares) with a similar investment in
the Morgan Stanley Capital International EAFER Index
(MSCI EAFER Index) by portraying the initial account
value at the commencement of operations of Class A
shares, and the account value at the end of the
current fiscal year (October 31, 2000), as measured
on a quarterly basis. For purposes of the graph,
and unless otherwise indicated, it has been assumed
that (a) the maximum applicable front-end sales
charge was deducted from the initial $10,000
investment in Class A shares; (b) all recurring
fees (including management fees) were deducted; and
(c) all dividends and distributions were reinvested.
The MSCI EAFER Index is an unmanaged, weighted
index of performance that reflects stock price
movements in Europe, Australasia, and the Far East.
The MSCI EAFER Index's total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI EAFER Index may differ substantially from the
securities in the Fund. The MSCI EAFER Index is not
the only one that may be used to characterize
performance of international stock funds. Other
indexes may portray different comparative
performance. Investors cannot invest directly in an
index.
This graph is furnished to you in accordance with SEC regulations.
<PAGE>>
www.prudential.com (800) 225-1852
Class B Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 10/31/00
One Year Five Years Since Inception
With Sales Charge -1.78% N/A 9.49%
Without Sales Charge 3.22% N/A 9.67%
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. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from year
to year by measuring the best and worst calendar
years in terms of total annual return since inception
of the share class. The graph compares a $10,000
investment in the Prudential International Value Fund
(Class B shares) with a similar investment in the Morgan
Stanley Capital International EAFER Index (MSCI
EAFER Index) by portraying the initial account
value at the commencement of operations of Class B
shares, and the account value at the end of the
current fiscal year (October 31, 2000), as measured
on a quarterly basis. For purposes of the graph,
and unless otherwise indicated, it has been assumed
that (a) the maximum applicable contingent deferred
sales charge was deducted from the value of the
investment in Class B shares, assuming full
redemption on October 31, 2000; (b) all recurring
fees (including management fees) were deducted; and
(c) 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 MSCI EAFER Index is an unmanaged, weighted
index of performance that reflects stock price
movements in Europe, Australasia, and the Far East.
The MSCI EAFER Index's total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI EAFER Index may differ substantially from the
securities in the Fund. The MSCI EAFER Index is not
the only one that may be used to characterize
performance of international stock funds. Other
indexes may portray different comparative
performance. Investors cannot invest directly in an
index.
This graph is furnished to you in accordance with SEC regulations.
<PAGE>
Prudential International Value Fund
Class C Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 10/31/00
One Year Five Years Since Inception
With Sales Charge 1.19% N/A 9.40%
Without Sales Charge 3.22% N/A 9.67%
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. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from year
to year by measuring the best and worst calendar
years in terms of total annual return since inception
of the share class. The graph compares a $10,000
investment in the Prudential International Value Fund
(Class C shares) with a similar investment in the Morgan
Stanley Capital International EAFER Index (MSCI
EAFER Index) by portraying the initial account
value at the commencement of operations of
Class C shares, and the account values at the end
of the current fiscal year (October 31, 2000), as
measured on a quarterly basis. For purposes of the
graph, and unless otherwise indicated, it has been
assumed that (a) the maximum applicable front-end
sales charge was deducted from the initial $10,000
investment in Class C shares; (b) the maximum
applicable contingent deferred sales charge was
deducted from the value of the investment in Class
C shares, assuming full redemption on October 31,
2000; (c) all recurring fees (including management
fees) were deducted; and (d) all dividends and
distributions were reinvested.
The MSCI EAFER Index is an unmanaged, weighted
index of performance that reflects stock price
movements in Europe, Australasia, and the Far East.
The MSCI EAFER Index's total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI EAFER Index may differ substantially from the
securities in the Fund. The MSCI EAFER Index is not
the only one that may be used to characterize
performance of international stock funds. Other
indexes may portray different comparative
performance. Investors cannot invest directly in an
index.
This graph is furnished to you in accordance with SEC regulations.
<PAGE>
www.prudential.com (800) 225-1852
Class Z Growth of a $10,000 Investment
(GRAPH)
Average Annual Total Returns as of 10/31/00
One Year Five Years Since Inception
With Sales Charge 4.24% 11.25% 13.07%
Without Sales Charge 4.24% 11.25% 13.07%
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. The best- and worst-year information
within the graph is designed to give you an idea of
how much the Fund's returns can fluctuate from
year to year by measuring the best and worst
calendar years in terms of total annual return
since inception of the share class. The
graph compares a $10,000 investment in the
Prudential International Value Fund (Class Z
shares) with a similar investment in the Morgan
Stanley Capital International EAFER Index (MSCI
EAFER Index) by portraying the initial account
value at the commencement of operations of Class Z
shares, and the account value at the end of the
current fiscal year (October 31, 2000), as measured
on a quarterly basis. For purposes of the graph,
and unless otherwise indicated, it has been assumed
that (a) all recurring fees (including management
fees) were deducted, and (b) all dividends and
distributions were reinvested. Class Z shares are
not subject to a sales charge or distribution and
service (12b-1) fees.
The MSCI EAFER Index is an unmanaged, weighted
index of performance that reflects stock price
movements in Europe, Australasia, and the Far East.
The MSCI EAFER Index's total returns include the
reinvestment of all dividends, but do not include
the effect of sales charges or operating expenses
of a mutual fund. The securities that comprise the
MSCI EAFER Index may differ substantially from the
securities in the Fund. The MSCI EAFER Index is not
the only one that may be used to characterize
performance of international stock funds. Other
indexes may portray different comparative
performance. Investors cannot invest directly in an
index.
This graph is furnished to you in accordance with SEC regulations.
<PAGE>
FOR MORE INFORMATION
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
Visit Prudential's website at:
http://www.prudential.com
Directors
Delayne Dedrick Gold
Robert F. Gunia
Robert E. LaBlanc
David R. Odenath, Jr.
Judy A. Rice
Robin B. Smith
Stephen Stoneburn
Nancy H. Teeters
Clay T. Whitehead
Officers
David R. Odenath, Jr., President
Robert F. Gunia, 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
Mercator Asset Management, L.P.
2400 East Commercial Boulevard
Suite 810
Fort Lauderdale, FL 33308
Distributor
Prudential Investment
Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 8098
Philadelphia, PA 19101
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Fund Symbols NASDAQ CUSIP
Class A PISAX 743969503
Class B PISBX 743969602
Class C PCISX 743969701
Class Z PISZX 743969800
MF115E3
(LOGO) Printed on Recycled Paper
