<PAGE>
(LOGO)
ANNUAL REPORT
DECEMBER 31, 1999
Prudential
Global Total Return Fund, Inc.
(GRAPHIC)
<PAGE>
A Message from the Fund's President February 3, 2000
(PHOTO)
Dear Shareholder,
Prudential Global Total Return Fund provided negative
returns in 1999, as did its benchmark, the Lipper Global
Income Fund Average. Returns were hampered by rising
interest rates, especially in the United States where
the economic expansion was much stronger than expected.
The Fund's Class A shares posted a negative return of
3.95%, which lagged the negative 2.43% return of the
Lipper Average. However, the return on the Fund's Class
A shares still ranked in the upper half of its Lipper
peer group.
Vigorous U.S. economic growth prompted the Federal Reserve
to increase its main short-term interest rate three times
during 1999, while intermediate- and long-term market rates
rose even more, resulting in poor performance of the Fund's
U.S. Treasury securities. Although the Fund was helped by
its increased exposure to emerging market bonds, a light
emphasis on both the government debt securities and currency
of Japan was the major reason that the Fund's returns
moderately underperformed their benchmark Lipper Average.
While 1999 was certainly a very challenging year for
many major bond markets, any asset class is subject to
occasional periods of weakness. We believe that global
bonds can continue to be an important diversification
tool, helping investors to enhance returns and minimize
risk. The focus of the Fund has always been on identifying
and capitalizing on important, longer-term trends in world
debt markets, and its strong performance over the past 10
years demonstrates its ability to do this effectively.
Thank you for your continued confidence in Prudential mutual funds.
Sincerely,
John R. Strangfeld
President
Prudential Global Total Return Fund, Inc.
<PAGE>
Performance Review
(PHOTO) (PHOTO)
Team portfolio managers Gabriel Irwin (Global Bond
[Sector] Team Leader) and Simon Wells
Investment Goals and Style
Your Fund seeks total return made up of current income
and capital appreciation. The Fund invests primarily in
intermediate-term, investment-grade debt securities issued
around the world. The Fund can invest at least 65% of its
total assets in income-producing debt securities of the
United States and foreign governments, including
developing countries. The Fund can invest up to 35%
of total assets in corporate debt securities. The Fund
may also invest up to 15% of total net assets in bonds
rated below investment grade with a minimum rating of
"B" by Standard & Poor's or Moody's, or of comparable
quality in our view. Lower-rated securities carry a
greater risk of loss of principal and interest than
higher-rated securities. There are special risks
associated with foreign investing, including social,
political and currency risks, as well as potential
illiquidity. There can be no assurance that the Fund's
investment objective will be achieved.
Higher rates battered many bond markets
The year 1999 was a difficult one for global bond
funds, with interest rates on the rise in virtually
all of the markets in which Prudential Global Total
Return Fund invests. Economic growth was stronger
than expected in the United States and much of Asia,
and central bankers worldwide were quick to hike
short-term interest rates as a way of fending off
a return to higher inflation. In the United States,
for example, the Federal Reserve raised the federal
funds rate (what U.S. banks charge each other for
overnight loans) by a quarter of a percentage point
in June, August, and November 1999, bringing the
closely watched rate up to 5.50%.
Meanwhile, the 30-year U.S. Treasury bond yield,
which typically anticipates inflationary pressures,
crept up to the 6.48% level by year end, almost 140
basis points higher than where it began the year.
(A basis point is one one-hundredth of a percent.)
Bond yields move in the opposite direction of bond
prices. Therefore, rising bond yields all along the
maturity spectrum resulted in negative returns for
the Fund and most of its peers, as reflected in the
global funds average monitored by Lipper Inc.
We increased exposure to emerging market bonds
Although robust economic growth hurt U.S. fixed-income
markets, a resurgence in the global economy benefited
emerging market bonds, which typically provide higher
yields than better-rated bonds because they are viewed
as carrying greater credit risk. Emerging market bonds
began 1999 trading cheaply relative to higher-quality
bonds, but they soon grew more expensive on a relative
basis. Improving economic conditions and strengthening
currencies in many developing countries boosted investor
confidence in these bonds. As a result, the Lehman
Brothers Emerging Markets Index returned a stellar
23.07% in 1999, beating all other debt securities markets.
Near the end of the first quarter of 1999, we began
to increase the Fund's holdings of emerging market
bonds. This trend continued throughout the year,
with emerging market debt securities reaching 26.2%
of the Fund's total investments by the end of 1999.
We targeted the upper end of the emerging market
quality spectrum, and about half of these holdings
were in countries with investment-grade ratings.
Our purchases included bonds from Chile, South
Africa, and Hungary. The negative effect of
higher interest rates on the Fund was partially
offset by its increased exposure to emerging market bonds.
<PAGE>
We cut the Fund's duration
Duration was another area where we continued our policy
from the first half of the year. (Duration measures how
much a portfolio's bonds will fluctuate in price for a
change in the level of interest rates. It is expressed
in years.) We shortened the Fund's duration from 6.1
years at the beginning of 1999 to 4.0 years at the end
of the period. Most of this reduction came in the first
half of the year. Our rationale was that a shorter
duration would make the Fund less sensitive to the
decline in bond prices caused by higher interest
rates. In fact, that strategy had a modestly
positive effect on the Fund's performance
relative to its peer group.
We underestimated the Japanese market
Despite our increased position in emerging market
bonds and lower duration, the Fund moderately
underperformed its benchmark Lipper Average
primarily because of the Fund's slight exposure
to the bonds and currency of Japan. The rally in
Japanese bonds was one of the big surprises of 1999.
At the beginning of the year, we expected the Japanese
yen to weaken against most other currencies. Instead,
the yen gained dramatically, especially in the third
quarter. That, together with the apparent beginnings of an
Performance at a Glance
<TABLE>
Cumulative Total Returns1 As of 12/31/99
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A -3.95% 55.26% 119.79% 230.83%
Class B -4.35 N/A N/A 20.44
Class C -4.35 N/A N/A 20.44
Class Z -3.74 N/A N/A 10.82
Lipper Global Income Fund Avg.3 -2.43 37.01 90.18 ***
</TABLE>
<TABLE>
Average Annual Total Returns1 As of 12/31/99
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A -7.79% 8.31% 7.75% 8.95%
Class B -9.35 N/A N/A 4.37
Class C -6.31 N/A N/A 4.54
Class Z -3.74 N/A N/A 3.75
</TABLE>
<TABLE>
Distributions and Yields As of 12/31/99
<CAPTION>
Total Distributions 30-Day
Paid for 12 Mos. SEC Yield
<S> <C> <C>
Class A $0.46 3.31%
Class B $0.41 2.95
Class C $0.41 2.97
Class Z $0.47 3.66
</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. Past performance
numbers, with the exception of one-year returns, do
not fully reflect the higher operating expenses
incurred since the Fund commenced operations as
an open-end mutual fund on January 15, 1996. If
these expenses had been applied since the Fund's
inception, past performance returns would have
been lower. Prior to January 15, 1996, the Fund
operated as a closed-end fund with shares being
traded on the New York Stock Exchange.
1 Source: Prudential Investments Fund Management
LLC and Lipper Inc. The cumulative total returns
do not take into account sales charges. The average
annual total returns do take into account applicable
sales charges. The Fund charges a maximum front-end
sales charge of 4% for Class A shares. Class B shares
are subject to a declining contingent deferred sales
charge (CDSC) of 5%, 4%, 3%, 2%, 1%, and 1% for six
years. Class B shares will automatically convert to
Class A shares, on a quarterly basis, approximately
seven years after purchase. Class C shares are subject
to a front-end sales charge of 1% and a CDSC of 1% for
18 months. Class Z shares are not subject to a sales
charge or distribution and service (12b-1) fees.
2 Inception dates: Class A, 7/7/86; Class B and Class
C, 1/15/96; and Class Z, 3/17/97.
3 Lipper average returns are for all funds in each share
class for the one-, five-, and ten-year periods in the
Global Income Fund category. The Lipper average is
unmanaged. Global Income funds invest primarily in
U.S. dollar debt securities of issuers located in
at least three countries, one of which may be the
United States.
**Lipper Since Inception returns are 179.94% for Class
A, 15.26% for Class B and Class C, and 8.83% for Class
Z, based on all funds in each share class.
1
<PAGE>
Review Cont'd.
economic rebound and the Japanese government's assistance
for its troubled financial sector, caused investors to
flock to Japanese bonds. We increased the Fund's holdings
of Japanese securities to roughly 2% of its total
investments by the end of 1999--a relatively modest
weighting, reflecting our view that many serious
financial problems continue to plague Japan. We
believe that the exceptionally strong debt market
there represents a short-term rather than long-term
opportunity.
Euro's drop hurt the Fund
While the Japanese yen unexpectedly strengthened in 1999,
the euro--the common currency of the European Monetary
Union (EMU), which debuted on January 1, 1999--performed
very poorly during its first year. The euro tumbled 14%
against the U.S. dollar and 23% versus the Japanese yen
in 1999. Unexpectedly sluggish growth in some major EMU
countries led the euro to weaken, detracting from the
performance of the Fund's euro-based positions. However,
the Fund had a relatively modest 19% exposure to the euro
at the end of 1999 (taking into account currency hedging),
with another 14% exposure to euro-peripheral currencies,
such as the Swedish krona and the British pound.
Looking Ahead
Slowing growth may ease upward pressure on rates
There are signs that the long move up in bond yields
may end in the coming months. With central banks steadily
raising short-term interest rates, economic growth should
moderate, allowing the worldwide expansion to continue
without rekindling inflation. That should be a favorable
combination for global debt markets. While bond yields
may edge higher from current levels, they are unlikely
to rise to levels seen at the beginning of the 1990s.
We believe there will continue to be selective
opportunities to enhance the Fund's returns through
holding emerging market and corporate bonds. In 2000,
however, emerging market and corporate bonds will
probably not outperform the U.S. Treasury market by
as great a magnitude as in 1999.
The Fund's currency policy in 2000 is expected to modestly
favor the euro. It is very cheap, particularly in relation
to the Japanese yen. While we are not certain that a
substantial euro rebound will occur, the relatively
positive growth outlook for Europe, rising euro interest
rates, a healthy current account picture, and some
supply-side reforms should support the currency.
Five Largest Issuers
Expressed as a percentage of net assets as of 12/31/99
U.S. Treasury Obligations 15.2%
German Government Bonds 8.4
Danish Government Bonds 4.6
Kingdom of Spain 4.1
United Kingdom 3.9
Geographic/Currency Concentration
Expressed as a percentage of total investments as of 12/31/99
United States 37%
Other 22
Euro 21
United Kingdom 5
Australia 5
Denmark 5
Cash Equivalents 5
2
<PAGE>
Portfolio of Investments as
of December 31, 1999 PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount US$
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
LONG-TERM INVESTMENTS--84.2%
- ------------------------------------------------------------
Australia--4.9%
A$ 6,530 Commonwealth of Australia,
9.75%, 3/15/02 $ 4,570,960
4,000 Queensland Treasury
Corporation,
8.00%, 5/14/03 2,712,312
10,070 New South Wales Treasury
Corporation,
6.50%, 5/1/06 6,350,631
------------
13,633,903
- ------------------------------------------------------------
>Canada--3.9%
C$ 2,000 British Columbia Municipal Fin.
Auth.,
6.75%, 4/24/07 1,388,130
5,000 British Columbia Provincial
Bond,
6.00%, 6/9/08 3,310,800
8,900 Province of Quebec,
6.50%, 10/1/07 6,073,129
------------
10,772,059
- ------------------------------------------------------------
Denmark--4.6%
Danish Government Bonds,
DKr 60,000 7.00%, 12/15/04 8,719,366
27,575 8.00%, 3/15/06 4,222,078
------------
12,941,444
- ------------------------------------------------------------
Euro--20.2%
EURO 3,000 Bank Of Scotland Treasury
Services PLC (United
Kingdom),
5.50%, 7/27/09 2,838,061
480 Esat Telecom Group PLC
(United Kingdom),
11.875%, 11/1/09 550,083
Federal Republic of Germany,
3,670 4.50%, 7/4/09 3,466,342
665 5.375%, 1/4/10 671,357
EURO 1,850 Global Telesystems Group, Inc.
(Netherlands),
10.50%, 12/1/06 $ 1,893,806
2,965 Italian Government Bond,
6.50%, 11/1/27 3,095,014
Kingdom of Spain,
2,832 3.00%, 1/31/03 2,711,976
9,354 3.25%, 1/31/05 8,646,244
500 Municipality Of Sophia
(France),
9.75%, 6/3/02 494,442
Republic of Italy,
2,000 3.00%, 6/15/02 1,945,897
6,920 4.50%, 5/1/09 6,476,669
1,500 Staples Incorporated
(United Kingdom),
5.875%, 11/15/04 1,487,562
2,784 Treuhandanstalt (Gemany),
6.875%, 6/11/03 2,991,716
German Government Bonds,
7,338 6.00%, 1/5/06 7,744,868
10,980 6.25%, 1/4/24 11,467,007
------------
56,481,044
- ------------------------------------------------------------
Germany--1.8%
DM 2,000 Cesp Cia Energetic,
9.25%, 5/10/01 1,040,609
7,000 Tokyo Gas Co. Ltd.,
7.00%, 7/27/05 3,878,565
------------
4,919,174
- ------------------------------------------------------------
Hungary--0.7%
HUF 480,000 Hungarian Government Bond,
15.00%, 7/24/01 1,976,851
- ------------------------------------------------------------
Japan--2.1%
Y 530,100 Japanese Government Bond,
4.20%, 3/20/03 $ 5,774,085
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 3
<PAGE>
Portfolio of Investments as
of December 31, 1999 PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount US$
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
New Zealand--2.8%
NZ$ 14,900 Federal National Mortgage
Association,
7.25%, 6/20/02 7,744,638
- ------------------------------------------------------------
Russia
RUB 18,900 European Bank of Reconstruction
Development,
Zero Coupon, 5/28/02 168,076
- ------------------------------------------------------------
South Africa--1.0%
R 17,550 Republic of South Africa,
13.00%, 8/31/10 2,741,452
- ------------------------------------------------------------
Sweden--4.0%
SEK 27,100 Kingdom of Sweden,
5.00%, 1/15/04 3,148,209
66,000 Swedish Government Bond,
6.00%, 2/9/05 7,950,936
------------
11,099,145
- ------------------------------------------------------------
United Kingdom--4.8%
BP 6,850 United Kingdom,
5.00%, 6/7/04 10,595,015
395 Banco Central del Uruguay, FRN,
6.25%, 2/19/07 580,233
1,300 Powergen PLC,
8.875%, 3/26/03 2,179,686
------------
13,354,934
- ------------------------------------------------------------
United States--33.4%
Corporate Bonds--4.0%
US$ 750 Banco del Estado Chile,
8.39%, 8/1/01 $ 762,495
1,000 Central Bank Tunisia,
7.50%, 9/19/07 933,750
1,300 Chonhung Bank,
11.0725%, 1/7/05 1,322,750
US$ 4,200 General Motors Acceptance
Corp.,
5.75%, 11/10/03 3,999,072
3,000 Household Finance Corporation,
6.40%, 6/17/08 2,773,380
1,300 Philippine Long Dist.
Telephone,
10.50%, 4/15/09 1,313,000
------------
11,104,447
- ------------------------------------------------------------
Sovereign Bonds--14.0%
1,600 Embotelladora Andina S.A.,
7.875%, 10/1/97 1,230,248
500 Jamaican Government Bonds,
9.625%, 7/2/02 477,500
1,350 Kingdom Of Jordan,
6.00%, 12/23/23 898,911
4,300 Ministry Of Finance (Russia),
10.00%, 6/26/07 2,735,875
2,000 Nuevo Grupo Isuacell S.A. del
C.V.,
14.25%, 12/1/06 2,085,000
2,250 Oman Sultanate (India),
7.125%, 3/20/02 2,223,281
3,100 Province of Ontario (Canada),
6.00%, 2/21/06 2,946,550
1,980 Republic of Argentina, FRN,
6.8125%, 3/31/05 1,801,800
6,594 Republic of Brazil,
5.00%, 4/15/14 4,954,313
1,015 Republic of Brazil, FRN,
6.50%, 1/1/01 1,004,602
2,750 Republic of Bulgaria,
2.75%, 7/28/12 $ 1,980,000
3,300 Republic of Colombia,
7.25%, 2/23/04 2,970,000
4,431 Republic of Croatia, FRN,
6.45625%, 7/31/06 4,104,265
1,000 Republic of Italy,
7.00%, 9/18/01 1,004,000
1,700 Republic of Lithuania,
7.125%, 7/22/02 1,623,500
2,600 Republic of Panama,
7.875%, 2/13/02 2,502,500
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 4
<PAGE>
Portfolio of Investments as
of December 31, 1999 PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount US$
(000) Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Sovereign Bonds (cont'd.)
US$ 2,500 Republic of Peru,
4.50%, 3/7/17 1,731,250
3,619 Republic of Venezuela,
7.00%, 12/18/07 2,840,935
------------
39,114,530
- ------------------------------------------------------------
Supranational Bonds--.2%
Corporacion Andina de Fomento,
500 6.93375%, 4/3/01 490,000
- ------------------------------------------------------------
U.S. Government Obligations--15.2%
3,200 United States Treasury Bond,
6.625%, 2/15/27 3,171,488
United States Treasury Notes,
6,000 5.75%, 8/15/03 5,877,180
4,000 12.375%, 5/15/04 4,875,000
13,450 6.25%, 2/15/07 13,233,590
4,175 6.125%, 8/15/07 4,070,625
11,615 6.00%, 8/15/09 11,252,031
------------
42,479,914
------------
93,188,891
Total long-term investments
(cost US$250,562,019) 234,795,696
------------
SHORT-TERM INVESTMENTS--13.6%
Germany--2.6%
DM 1,600 Union Bank Of Estonia,
4.25563%, 6/16/00 820,850
12,000 Republic of Colombia,
7.25%, 12/21/00 6,249,843
------------
7,070,693
- ------------------------------------------------------------
Hungary--2.0%
HUF 480,000 Hungarian Government Bond,
16.00%, 4/12/00 1,914,809
935,000 Republic of Hungary,
15.50%, 7/24/00 3,748,889
------------
5,663,698
Poland--1.4%
Poland Treasury Bills,
PLZ 6,500 16.375%(a), 3/22/00 1,513,967
10,400 16.325%(a), 6/14/00 2,324,836
------------
3,838,803
- ------------------------------------------------------------
Russia--0.1%
RUB 11,600 European Bank of Reconstruction
Development,
31.00%, 5/5/00 345,263
- ------------------------------------------------------------
United States--7.5%
Sovereign Bonds--0.6%
US$ 1,515 Trinidad & Tobago Republic,
9.75%, 11/3/00 1,511,970
- ------------------------------------------------------------
Supranational Bonds--2.2%
6,150 Corporacion Andina de Formento,
7.375%, 7/21/00 6,163,469
- ------------------------------------------------------------
Repurchase Agreement--4.7%
US$ 13,177 Joint Repurchase Agreement
Account,
2.83%, 1/03/99 (Note 5) $ 13,177,000
------------
20,852,439
Total short-term Investments
(cost US$41,613,776) 37,770,896
------------
- ------------------------------------------------------------
Total Investments--97.8%
(cost $292,175,795) 272,566,592
Other assets in excess of
liabilities--2.2% 6,200,308
------------
Net Assets--100% $278,766,900
------------
------------
</TABLE>
- ---------------
Portfolio securities are classified according to the security's
currency denomination.
(a) Percentages quoted represent yield-to-maturity as of purchase date.
FRN--Floating Rate Note.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 5
<PAGE>
Statement of Assets and Liabilities PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Assets December 31, 1999
<S> <C>
Investments, at value (cost $292,175,795)............................................................... $ 272,566,592
Foreign currency, at value (cost $734,886).............................................................. 743,685
Cash.................................................................................................... 29,321
Interest receivable..................................................................................... 5,965,797
Forward currency contracts--amount receivable from counterparties....................................... 2,013,198
Receivable for Fund shares sold......................................................................... 21,094
Other assets............................................................................................ 11,731
-----------------
Total assets......................................................................................... 281,351,418
-----------------
Liabilities
Forward currency contracts-amount payable to counterparties............................................. 1,245,523
Payable for Fund shares reacquired...................................................................... 971,823
Management fee payable.................................................................................. 181,849
Accrued expenses and other liabilities.................................................................. 123,775
Distribution fee payable................................................................................ 61,548
-----------------
Total liabilities.................................................................................... 2,584,518
-----------------
Net Assets.............................................................................................. $ 278,766,900
-----------------
-----------------
Net assets were comprised of:
Common stock, at par................................................................................. $ 384,022
Paid-in capital in excess of par..................................................................... 335,270,180
-----------------
335,654,202
Distributions in excess of net investment income..................................................... (18,244)
Accumulated net realized loss on investment and foreign currency transactions........................ (37,799,341)
Net unrealized appreciation on investments and foreign currencies.................................... (19,069,717)
-----------------
Net assets, December 31, 1999........................................................................... $ 278,766,900
-----------------
-----------------
Class A:
Net asset value and redemption price per share
($257,548,412 / 35,482,085 shares of common stock issued and outstanding)......................... $7.26
Maximum sales charge (4% of offering price).......................................................... .30
-----------------
Maximum offering price to public..................................................................... $7.56
-----------------
-----------------
Class B:
Net asset value, offering price and redemption price per share
($7,809,982 / 1,075,086 shares of common stock issued and outstanding)............................ $7.26
-----------------
-----------------
Class C:
Net asset value and redemption price per share
($561,246 / 77,256 shares of common stock issued and outstanding)................................. $7.26
Sales charge (1.00% of offering price)............................................................... $.07
-----------------
-----------------
Offering price to public............................................................................. $7.33
-----------------
-----------------
Class Z:
Net asset value, offering price and redemption price per share
($12,847,260 / 1,767,809 shares of common stock issued and outstanding)........................... $7.27
-----------------
-----------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 6
<PAGE>
PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
Statement of Operations
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
Net Investment Income December 31, 1999
<S> <C>
Income
Interest and discount earned (net of
foreign withholding taxes of
$25,566)........................... $ 13,684,469
-----------------
Expenses
Management fee........................ 1,324,048
Distribution fee--Class A............. 417,350
Distribution fee--Class B............. 34,812
Distribution fee--Class C............. 2,655
Transfer agent's fees and expenses.... 461,000
Custodian's fees and expense.......... 311,000
Reports to shareholders............... 259,000
Legal fees and expenses............... 178,000
Registration fees..................... 47,000
Audit fee and expenses................ 36,000
Directors' fees....................... 23,000
Insurance............................. 2,000
Miscellaneous......................... 10,289
-----------------
Total expenses..................... 3,106,154
-----------------
Net investment income.................... 10,578,315
-----------------
Realized and Unrealized Gain
(Loss) on Investments and Foreign
Currency Transactions
Net realized gain (loss) on:
Investment transactions............... (7,815,368)
Foreign currency transactions......... (146,835)
-----------------
(7,962,203)
-----------------
Net change in unrealized appreciation/depreciation on:
Investments........................... (20,014,740)
Foreign currencies.................... 272,157
-----------------
(19,742,583)
-----------------
Net loss on investments and foreign
currencies............................ (27,704,786)
-----------------
Net Decrease in Net Assets
Resulting from Operations................ $ (17,126,471)
-----------------
-----------------
</TABLE>
PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
Statement of Changes in Net Assets
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended December 31,
in Net Assets 1999 1998
<S> <C> <C>
Operations:
Net investment income.......... $ 10,578,315 $ 11,321,302
Net realized gain (loss) on
investment and foreign
currency transactions....... (7,962,203) 1,570,888
Net change in unrealized
appreciation (depreciation)
on investments and foreign
currencies.................. (19,742,583) 1,857,462
------------ ------------
Net decrease in net assets
resulting from operations... (17,126,471) 14,749,652
------------ ------------
Dividends and distributions (Note
1)
Dividends from net investment income
Class A..................... (7,213,780) (7,425,915)
Class B..................... (178,555) (127,509)
Class C..................... (13,365) (8,896)
Class Z..................... (224,615) (83,453)
------------ ------------
(7,630,315) (7,645,773)
------------ ------------
Distributions in excess of net
investment income
Class A..................... -- (432,992)
Class B..................... -- (7,435)
Class C..................... -- (519)
Class Z..................... -- (4,866)
------------ ------------
-- (445,812)
------------ ------------
Distributions from net realized
gains
Class A..................... -- (3,221,486)
Class B..................... -- (55,316)
Class C..................... -- (3,859)
Class Z..................... -- (36,203)
------------ ------------
-- (3,316,864)
------------ ------------
Tax return of capital
distributions
Class A..................... (2,951,146) --
Class B..................... (82,514) --
Class C..................... (6,196) --
Class Z..................... (86,864) --
------------ ------------
(3,126,720) --
------------ ------------
Fund share transactions (net of
share conversions) (Note 6 and
7)
Net proceeds from shares
sold........................ 181,565,604 8,184,792
Net asset value of shares
issued in reinvestment of
dividends and
distributions............... 3,609,392 2,953,974
Cost of shares reacquired...... (43,791,864) (35,442,667)
------------ ------------
Increase in net assets from
Fund share transactions..... 141,383,132 (24,303,901)
------------ ------------
Total increase (decrease)......... 113,499,626 (20,962,698)
------------ ------------
Net Assets
Beginning of year................. 165,267,274 186,229,972
------------ ------------
End of year....................... $278,766,900 $165,267,274
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 7
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
Prudential Global Total Return Fund, Inc., (the 'Fund'), formerly known as The
Global Total Return Fund, Inc., is an open-end, nondiversified management
investment company whose investment objective is to seek total return, the
components of which are current income and capital appreciation. The Fund
invests primarily in governmental (including supranational), semi-governmental
or governmental agency debt securities or in short-term bank debt securities or
deposits in the United States and in foreign countries denominated in U.S.
dollars or in foreign currencies, including debt securities issued or guaranteed
by the U.S. Government and foreign governments, their agencies, authorities or
instrumentalities (U.S. Government Securities and Foreign Government Securities,
respectively). The remainder is generally invested in corporate debt securities
or longer term bank debt securities. The bonds are primarily of investment
grade, i.e., bonds rated within the four highest quality grades as determined by
Moody's Investors Service or Standard & Poor's Rating's Group, or in unrated
securities of equivalent quality. In addition the Fund is permitted to invest up
to 15% of the Fund's total assets in bonds rated below investment grade with a
minimum rating of B, or in unrated securities of equivalent quality. The ability
of the issuers of debt securities held by the Fund to meet their obligations may
be affected by economic and political developments in a specific country or
region.
- ------------------------------------------------------------
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Securities Valuation: In valuing the Fund's assets, quotations of foreign
securities in a foreign currency are converted to U.S. dollar equivalents at the
then current currency value. Portfolio securities that are actively traded in
the over-the-counter market, including listed securities for which the primary
market is believed to be over-the-counter, are valued on the basis of valuations
provided by an independent pricing agent or principal market makers. Any
security for which the primary market is on an exchange or NASDAQ National
Market System Securities are valued at the last sale price on such exchange on
the day of valuation or, if there was no sale on such day, at 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. Forward currency exchange contracts are valued at the
current cost of covering or offsetting the contract on the day of valuation.
Securities and assets for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the Board of Directors of the Fund.
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.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians under triparty repurchase agreements as the case may be, take
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction including accrued interest.
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.
Foreign Currency Translation: The books and records of the Fund are maintained
in United States dollars. Foreign currency amounts are translated into United
States dollars on the following basis:
(i) market value of investment securities, other assets and liabilities--at the
current rates of exchange.
(ii) purchases and sales of investment securities, income and expenses--at the
rates 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 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 the securities held at period-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 debt securities sold
during the period. Accordingly, such realized foreign currency gains and losses
are included in the reported net realized gains on investment transactions.
Net realized gains or losses on foreign currency transactions represent net
foreign exchange gains or losses from sales and maturities of short-term
securities and forward currency contracts, disposition of foreign currencies,
currency gains or losses realized between the trade and settlement dates on
securities transactions, and the difference between the amounts of interest,
discount and foreign taxes recorded on the Fund's books and the U.S. dollar
equivalent amounts actually received or paid. Net currency gains and losses from
valuing foreign currency denominated assets (excluding investments) and
liabilities at period-end exchange rates are
- --------------------------------------------------------------------------------
8
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
reflected as a component of net unrealized appreciation or depreciation on
investments and foreign currencies.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. companies as a result of,
among other factors, the possibility of political or 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.
Security Transactions and Net Investment Income: Security transactions are
recorded on the trade date. Realized and unrealized gains and losses from
security and currency transactions are calculated on the identified cost basis.
Interest income, which is comprised of three elements: stated coupon, original
issue discount and market discount, 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: It is the Fund's policy to continue to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income or excise tax provision is required.
Withholding taxes on foreign interest have been provided for in accordance with
the Fund's understanding of the applicable country's tax rules and rates.
Dividends and Distributions: Dividends are declared quarterly. Distributions of
capital gains, if any, will be declared at least annually. Dividends and
distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in accordance
with federal income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for foreign currency transactions.
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 distributions in excess of net investment income
by $160,476 and decrease accumulated net realized loss on investments by
$64,968,790 and decrease paid in capital in excess of par by $65,129,266 due to
a tax return of capital and for foreign currency losses realized and recognized
during the year ended December 31, 1999 and for capital loss carryforward which
expired during the year ended December 31, 1999. 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 The Prudential
Investment Corporation ('PIC'); PIC, through an agreement with PRICOA Asset
Management Ltd. ('PRICOA'), furnishes investment advisory services in connection
with the management of the Fund. PIFM pays for the cost of the subadviser's
services, compensation of officers of the Fund, occupancy and certain clerical
and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.
The management fee paid PIFM is computed daily and payable monthly at an annual
rate of .75 of 1% of the Fund's average daily net assets up to $500 million, .70
of 1% of such assets between $500 million and $1 billion, and .65 of 1% of such
assets in excess of $1 billion.
The Fund has a distribution agreement with Prudential Investment Management
Services LLC ('PIMS'), which acts as the distributor of the Class A, B, C and Z
shares of the Fund. The Fund compensates PIMS for distributing and servicing the
Fund's Class A, 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 of the Class Z
shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund 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%, .75 of 1%
- --------------------------------------------------------------------------------
9
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
and .75 of 1% of the average daily net assets of the Class A, B and C shares,
respectively, for the year ended December 31, 1999.
PIMS has advised the Fund that it has received approximately $17,100 and $800 in
front-end sales charges resulting from sales of Class A and Class C shares,
respectively, during the year ended December 31, 1999. From these fees, PIMS
paid such sales charges to dealers, which in turn paid commissions to
salespersons and incurred other distribution costs.
PIMS has advised the Fund that for the year ended December 31, 1999, it received
approximately $13,500 and $400 in contingent deferred sales charges imposed upon
certain redemptions by Class B and Class C shareholders, respectively.
PIFM, PIC, PIMS and PRICOA are indirect, wholly owned subsidiaries of The
Prudential Insurance Company of America.
As of March 11, 1999, 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. The Funds pay a commitment fee at an annual rate of .065 of 1% on the
unused portion of the credit facility, which is accrued and paid quarterly on a
pro rata basis by the Funds. Interest on any such borrowings outstanding will be
at market rates. The SCA expires on March 9, 2000. Prior to March 11, 1999, the
Funds had a credit agreement with a maximum commitment of $200,000,000. The
commitment fee was .055 of 1% on the unused portion of the credit facility. The
Fund did not borrow any amounts pursuant to either agreement during the year
ended December 31, 1999. The purpose of the agreements is to serve as an
alternative source of funding for capital share redemptions.
- ------------------------------------------------------------
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 December 31, 1999,
the Fund incurred fees of approximately $371,576 for the services of PMFS. As of
December 31, 1999, approximately $54,157 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 investment securities, other than short-term investments
for the year ended December 31, 1999, aggregated $346,136,912 and $218,311,593,
respectively.
At December 31, 1999, the Fund had outstanding forward currency contracts to
pruchase and sell foreign currencies as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Current Settlement Date Appreciation/
Purchase Contracts Value Payable (Depreciation)
- ---------------------- ----------- ---------------- --------------
<S> <C> <C> <C>
Australian Dollars,
expiring 1/18/00..... $ 4,641,818 $ 4,573,929 $ 67,889
<CAPTION>
Value at
Foreign Currency Current Settlement Date Appreciation/
Purchase Contracts Value Payable (Depreciation)
- ---------------------- ----------- ---------------- --------------
Euros,
expiring 1/18/00..... $10,369,306 $ 10,409,482 $ (40,176)
Japanese Yen,
expiring 1/18/00..... 5,898,134 5,870,575 27,559
New Zealand Dollars,
expiring 1/25/00..... 3,995,042 3,878,411 116,631
Norwegian Krone,
expiring 2/8/00...... 6,236,860 6,273,409 (36,549)
Swiss Franc,
expiring 1/12/00..... 8,937,405 9,735,563 (798,158)
----------- ---------------- --------------
$40,078,565 $ 40,741,369 $ (662,804)
----------- ---------------- --------------
----------- ---------------- --------------
</TABLE>
<TABLE>
<CAPTION>
Value at
Foreign Currency Current Settlement Date Appreciation/
Sale Contracts Value Receivable (Depreciation)
- ---------------------- ----------- ---------------- --------------
<S> <C> <C> <C>
Canadian Dollars,
expiring 1/13/00..... $ 3,237,387 $ 3,174,588 $ (62,799)
Danish Krone,
expiring 1/12/00..... 2,054,165 2,190,626 136,461
Euros,
expiring 1/18/00 -
1/19/00.............. 27,893,715 28,217,690 323,975
Japanese Yen,
expiring 1/18/00..... 8,813,844 8,746,604 (67,240)
New Zealand Dollars
expiring 1/25/00..... 13,232,912 13,028,021 (204,891)
Pound Sterling,
expiring 1/21/00..... 4,227,048 4,191,338 (35,710)
Swedish Krona,
expiring 1/13/00..... 2,648,163 2,674,468 26,305
Swiss Franc,
expiring 1/12/00..... 17,874,811 19,189,189 1,314,378
----------- ---------------- --------------
$79,982,045 $ 81,412,524 $1,430,479
----------- ---------------- --------------
----------- ---------------- --------------
</TABLE>
The United States federal income tax basis of the Fund's investments at December
31, 1999 was $292,188,283 and, accordingly, net unrealized depreciation for
United States federal income tax purposes was $19,621,691 (gross unrealized
appreciation--$1,116,608; gross unrealized depreciation--$20,738,299.
For federal income tax purposes, the Portfolio had a capital loss carryforward
as of December 31, 1999, of approximately $33,487,304 of which $9,504,418
expires in 2000, $19,534,654 expires in 2001, $1,565,575 expires in 2002,
$326,238 expires in 2003, $1,656,524 expires in 2005 and $899,895 expires in
2006. Accordingly, no capital gains distributions are expected to be paid to
shareholders until future net gains have been realized in excess of such
carryforward.
The Fund has elected to treat approximately $3,475,442 of net foreign currency
losses and approximately $264,364 of net capital losses incurred in the two
month period ended December 31, 1999 as having occurred in the following fiscal
year.
- --------------------------------------------------------------------------------
10
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
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 December 31, 1999, the
Fund had a 1.86% undivided interest in the joint account. The undivided interest
for the Fund represents $13,177,000 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, 2.75%, in the principal amount of $90,000,000, repurchase
price $90,020,625, due 1/3/2000. The value of the collateral including accrued
interest was $91,800,968.
Bear, Stearns & Co. Inc., 2.75%, in the principal amount of $210,000,000,
repurchase price $210,048,125, due 1/3/2000. The value of the collateral
including accrued interest was $221,923,528.
Lehman Brothers, Inc., 2.50%, in the principal amount of $100,000,000,
repurchase price $100,020,883, due 1/3/2000. The value of the collateral
including accrued interest was $101,979,049.
Morgan (J.P.) Securities, Inc., 3.00%, in the principal amount of $120,000,000,
repurchase price $120,030,000, due 1/3/2000. The value of the collateral
including accrued interest was $122,400,783.
Morgan (J.P.) Securities, Inc., 4.50%, in the principal amount of $78,685,000,
repurchase price $78,714,507, due 1/3/2000. The value of the collateral
including accrued interest was $80,259,686.
Salomon Smith Barney, Inc., 2.00%, in the principal amount of $110,000,000,
repurchase price $110,018,333, due 1/3/2000. The value of the collateral
including accrued interest was $112,231,078.
- ------------------------------------------------------------
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 4%. 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. Prior to November 2, 1998, Class C shares were sold with a contingent
deferred sales charge of 1% during the first year. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately seven
years after purchase. 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 2 billion authorized shares of common stock at $.01 par value per
share, divided equally into Class A, B, C and Z shares. As of December 31, 1999
Prudential owned 24 Class A shares, 12 Class B shares, 12 Class C shares and 12
Class Z shares.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------------ ---------- ------------
<S> <C> <C>
Year ended December 31, 1999:
Shares sold......................... 256,447 $ 1,936,647
Shares issued in connection with
reorganization (Note 7)........... 20,010,669 159,581,878
Shares issued in reinvestment of
dividends and distributions....... 414,519 3,075,349
Shares reacquired................... (5,023,661) (37,816,441)
---------- ------------
Net increase in shares outstanding
before conversion................. 15,657,974 126,777,433
Shares issued upon conversion from
Class B........................... 23,127 173,394
---------- ------------
Net increase in shares
outstanding....................... 15,681,101 $126,950,827
---------- ------------
---------- ------------
Year ended December 31, 1998:
Shares sold......................... 339,598 $ 2,730,063
Shares issued in reinvestment of
dividends and distributions....... 333,052 2,661,857
Shares reacquired................... (4,101,283) (32,833,746)
---------- ------------
Net decrease in shares outstanding
before conversion................. (3,428,633) (27,441,826)
Shares issued upon conversion from
Class B........................... 3,881 31,322
---------- ------------
Net decrease in shares
outstanding....................... (3,424,752) $(27,410,504)
---------- ------------
---------- ------------
<CAPTION>
Class B
- ------------------------------------
<S> <C> <C>
Year ended December 31, 1999:
Shares sold......................... 217,107 $ 976,369
Shares issued in connection with
reorganization (Note 7)........... 648,159 5,241,518
Shares issued in reinvestment of
dividends and distributions....... 28,530 212,311
Shares reacquired................... (247,247) (3,255,251)
---------- ------------
Net increase in shares outstanding
before conversion................. 646,549 3,174,947
Shares reacquired upon conversion
into Class A...................... (23,127) (173,394)
---------- ------------
Net increase in shares
outstanding....................... 623,422 $ 3,001,553
---------- ------------
---------- ------------
Year ended December 31, 1998:
Shares sold......................... 237,833 $ 1,906,388
Shares issued in reinvestment of
dividends and distributions....... 20,064 160,430
Shares reacquired................... (94,011) (752,207)
---------- ------------
Net increase in shares outstanding
before conversion................. 163,886 1,314,611
Shares reacquired upon conversion
into Class A...................... (3,884) (31,322)
---------- ------------
Net increase in shares
outstanding....................... 160,002 $ 1,283,289
---------- ------------
---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
11
<PAGE>
Notes to Financial Statements PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C Shares Amount
- ------------------------------------ ---------- ------------
Year ended December 31, 1999:
<S> <C> <C>
Shares sold......................... 17,923 $ 145,005
Shares issued in connection with
reorganization (Note 7)........... 49,309 386,351
Shares issued in reinvestment of
dividends and distributions....... 2,370 17,612
Shares reacquired................... (26,555) (198,104)
---------- ------------
Net increase in shares
outstanding....................... 43,047 $ 350,864
---------- ------------
---------- ------------
Year ended December 31, 1998:
Shares sold......................... 11,948 $ 95,300
Shares issued in reinvestment of
dividends and distributions....... 1,404 11,227
Shares reacquired................... (3,185) (25,475)
---------- ------------
Net increase in shares
outstanding....................... 10,167 $ 81,052
---------- ------------
---------- ------------
<CAPTION>
Class Z
- ------------------------------------
<S> <C> <C>
Year ended December 31, 1999:
Shares sold......................... 278,304 $ 2,122,619
Shares issued in connection with
reorganization (Note 7)........... 1,481,032 11,175,217
Shares issued in reinvestment of
dividends and distributions....... 41,217 304,120
Shares reacquired................... (335,941) (2,522,068)
---------- ------------
Net increase in shares
outstanding....................... 1,464,612 $ 11,079,888
---------- ------------
---------- ------------
Year ended December 31, 1998:
Shares sold......................... 429,296 $ 3,453,041
Shares issued in reinvestment of
dividends and distributions....... 15,060 120,460
Shares reacquired................... (228,142) (1,831,239)
---------- ------------
Net increase in shares
outstanding....................... 216,214 $ 1,742,262
---------- ------------
---------- ------------
</TABLE>
- ------------------------------------------------------------
Note 7. Reorganization
On May 26, 1999, the Board of Directors of the Fund approved an Agreement and
Plan of Reorganization (the 'Plan') which provided for the transfer of all of
the assets of the Class A, B, C and Z shares of the Prudential Global Limited
Maturity Fund, Inc. and the Prudential Intermediate Global Income Fund, Inc. in
exchange for like shares of the Fund and the Fund's assumption of the
liabilities of the Global Limited Maturity Fund, Inc. and Intermediate Global
Income Fund, Inc.
The Plan was approved by the shareholders of the Global Limited Maturity Fund,
Inc. and the Intermediate Global Income Fund, Inc. at a shareholder meeting held
on October 19, 1999. The reorganization took place on October 22, 1999. The
Global Limited Maturity Fund, Inc. and the Intermediate Global Income Fund, Inc.
and the Fund incurred their pro rata share of the costs of reorganization,
including the costs of proxy solicitation.
The acquisition was accomplished by a tax-free exchange of the following shares:
<TABLE>
<CAPTION>
Prudential Global
Global Limited Maturity Total Return
Fund, Inc.: Fund, Inc. Value
<S> <C> <C> <C> <C>
Class A 6,701,965 Class A 6,692,871 $ 49,296,112
B 92,971 B 93,350 688,151
C 4,375 C 4,393 32,384
Z 6,521 Z 6,530 48,187
Intermediate Global
Income Fund, Inc.:
Class A 13,210,252 A 13,317,798 $ 98,167,564
B 550,329 B 554,809 4,091,534
C 44,554 C 44,916 331,237
Z 1,464,579 Z 1,474,502 10,880,345
</TABLE>
The aggregate net assets and unrealized appreciation of the funds immediately
before the acquisition were:
<TABLE>
<CAPTION>
Unrealized
Net Assets Depreciation
------------ --------------
<S> <C> <C>
Global Limited Maturity Fund,
Inc. $ 50,064,833 $ (3,937,015)
Intermediate Global Income
Fund, Inc. 113,470,681 (6,836,162)
</TABLE>
The aggregate net assets of the Prudential Global Total Return Fund, Inc.
immediately before the acquisition was $134,835,274.
The future utilization of the acquired capital loss carryforwards from Global
Limited Maturity Fund, Inc. and Intermediate Global Income Fund, Inc. in the
amounts of $19,106,058 and $13,554,306, respectively, will be limited by Section
382 of the Internal Revenue Code of 1986, as amended. For each fund, the annual
limitation is $2,728,533 and $6,184,152, respectively.
- --------------------------------------------------------------------------------
12
<PAGE>
Financial Highlights PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A (b)
------------------------------------------------------------
Year Ended December 31,
------------------------------------------------------------
1999(c) 1998(c) 1997(c) 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year............ $ 8.03 $ 7.88 $ 8.38 $ 8.44 $ 7.46
-------- -------- -------- -------- --------
Income from investment operations
Net investment income......................... .44 .52 .55 .62 .54
Net realized and unrealized gain (loss) on
investment and foreign currencies.......... (.75) .16 (.18) .32 1.25
-------- -------- -------- -------- --------
Total from investment operations........... (.31) .68 .37 .94 1.79
-------- -------- -------- -------- --------
Less distributions
Dividends from net investment income.......... (.33) (.35) (.68) (.62) (.54)
Distributions in excess of net investment
income..................................... (.02) (.19) (.50) (.27)
Distributions from net realized capital
gains...................................... -- (.16) -- -- --
Tax return of capital distributions........... (.13) -- -- -- --
-------- -------- -------- -------- --------
Total distributions........................ (.46) (.53) (.87) (1.12) (.81)
-------- -------- -------- -------- --------
Redemption fee retained by Fund............... -- -- -- .12 --
-------- -------- -------- -------- --------
Net asset value, end of year.................. $ 7.26 $ 8.03 $ 7.88 $ 8.38 $ 8.44
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Per share market price, end of year........... N/A N/A N/A $ 8.25
--------
--------
TOTAL INVESTMENT RETURN BASED ON (a):
Market price............................... N/A N/A N/A N/A 49.23%
Net asset value............................ (3.95)% 8.92% 4.55% 13.15% 25.45%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)................. $257,548 $158,932 $183,054 $229,770 $559,071
Average net assets (000)...................... $166,940 $171,427 $204,795 $299,026 $549,407
Ratios to average net assets:
Expenses, including distribution fees...... 1.75% 1.33% 1.39% 1.33% 1.02%
Expenses, excluding distribution fees...... 1.50% 1.18% 1.24% 1.18% 1.02%
Net investment income...................... 6.00% 6.42% 6.73% 7.01% 6.50%
For Class A, B, C, and Z shares:
Portfolio turnover rate.................... 132% 46% 43% 32% 256%
</TABLE>
- ---------------
(a) Total investment return based on net asset value 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 does not consider the effect of sales load. Prior to January
15, 1996 the Fund operated as a closed-end investment company and total
investment return was calculated based on market value assuming a purchase
of common stock at the current market value on the first day and a sale at
the current market value on the last day of each period reported. Dividends
and distributions are assumed for purposes of this calculation to be
reinvested at prices obtained under the dividend reinvestment plan. This
calculation does not reflect brokerage commissions.
(b) Prior to January 15, 1996 the Fund operated as a closed-end investment
company.
(c) Calculated based upon weighted average shares outstanding during the period.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 13
<PAGE>
Financial Highlights PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
------------------------------------------------------
January 15,
Year Ended 1996(c)
December 31, Through
------------------------------------- December 31,
1999(d) 1998(d) 1997(d) 1996
--------- --------- --------- ------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 8.03 $ 7.89 $ 8.39 $ 8.51
--------- --------- --------- ------
Income from investment operations
Net investment income......................... .40 .46 .49 .57
Net realized and unrealized gain (loss) on
investment and foreign currencies.......... (.76) .16 (.16) .26
--------- --------- --------- ------
Total from investment operations........... (.36) .62 .33 .83
--------- --------- --------- ------
Less distributions
Dividends from net investment income.......... (.28) (.30) (.64) (.57)
Distributions in excess of net investment
income..................................... -- (.02) (.19) (.50)
Distributions from net realized capital
gains...................................... -- (.16) -- --
Tax return of capital distributions (.13) -- -- --
--------- --------- --------- ------
Total distributions........................ (.41) (.48) (.83) (1.07)
--------- --------- --------- ------
Redemption fee retained by Fund............... -- -- -- .12
--------- --------- --------- ------
Net asset value, end of period................ $ 7.26 $ 8.03 $ 7.89 $ 8.39
--------- --------- --------- ------
--------- --------- --------- ------
TOTAL INVESTMENT RETURN(a):................... (4.35)% 8.13% 3.98% 11.99%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 7,810 $ 3,625 $ 2,300 $ 175
Average net assets (000)...................... $ 4,642 $ 3,048 $ 1,246 $ 52
Ratios to average net assets:
Expenses, including distribution fees...... 2.25% 1.93% 1.99% 1.93%(b)
Expenses, excluding distribution fees...... 1.50% 1.18% 1.24% 1.18%(b)
Net investment income...................... 5.49% 5.86% 6.13% 6.41%(b)
</TABLE>
- ---------------
(a) Total investment 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 investment return does
not consider the effect of sales load. Total investment returns for periods
of less than a full year are not annualized.
(b) Annualized.
(c) Commencement of offering of Class B shares.
(d) Calculated based upon weighted average shares outstanding during the period.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 14
<PAGE>
Financial Highlights PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C Class Z
------------------------------------------------ -------------------
January 15,
1996(d) Year Ended December
Year Ended December 31, Through 31,
------------------------------- December 31, -------------------
1999(f) 1998(f) 1997(f) 1996 1999 1998(f)
------- ------- ------- ------------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 8.03 $ 7.89 $ 8.39 $ 8.51 $ 8.03 $ 7.88
------- ------- ------- ----- ------- -------
Income from investment operations
Net investment income......................... .40 .46 .49 .57 .42 .52
Net realized and unrealized gain (loss) on
investment and foreign currencies.......... (.76 ) .16 (.16 ) .26 (.71) .17
------- ------- ------- ----- ------- -------
Total from investment operations........... (.36 ) .62 .33 .83 (.29) .69
------- ------- ------- ----- ------- -------
Less distributions
Dividends from net investment income.......... (.28 ) (.30 ) (.64 ) (.57) (.34) (.36)
Distributions in excess of net investment
income..................................... -- (.02 ) (.19 ) (.50) -- (.02)
Distributions from net realized capital
gains...................................... -- (.16 ) -- -- -- (.16)
Tax return of capital distributions (.13 ) -- -- -- (.13) --
------- ------- ------- ----- ------- -------
Total distributions........................ (.41 ) (.48 ) (.83 ) (1.07) (.47) (.54)
------- ------- ------- ----- ------- -------
Redemption fee retained by Fund............... -- -- -- .12 -- --
------- ------- ------- ----- ------- -------
Net asset value, end of period................ $ 7.26 $ 8.03 $ 7.89 $ 8.39 $ 7.27 $ 8.03
------- ------- ------- ----- ------- -------
------- ------- ------- ----- ------- -------
TOTAL INVESTMENT RETURN(a):................... (4.35 )% 8.13 % 3.98 % 11.99% (3.74)% 9.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 561 $ 275 $ 190 $ 210(b) $12,847 $2,435
Average net assets (000)...................... $ 354 $ 220 $ 397 $ 204(b) $ 4,604 $1,771
Ratios to average net assets:
Expenses, including distribution fees...... 2.25 % 1.93 % 1.99 % 1.93%(c) 1.50% 1.18%
Expenses, excluding distribution fees...... 1.50 % 1.18 % 1.24 % 1.18%(c) 1.50% 1.18%
Net investment income...................... 5.51 % 5.84 % 6.05 % 6.41%(c) 6.11% 6.65%
<CAPTION>
March 17,
1997(e)
through
December 31,
1997(f)
------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 8.32
-----
Income from investment operations
Net investment income......................... .39
Net realized and unrealized gain (loss) on
investment and foreign currencies.......... .05
-----
Total from investment operations........... .44
-----
Less distributions
Dividends from net investment income.......... (.69)
Distributions in excess of net investment
income..................................... (.19)
Distributions from net realized capital
gains...................................... --
Tax return of capital distributions --
-----
Total distributions........................ (.88)
-----
Redemption fee retained by Fund............... --
-----
Net asset value, end of period................ $ 7.88
-----
-----
TOTAL INVESTMENT RETURN(a):................... 5.56%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $ 686
Average net assets (000)...................... $ 257
Ratios to average net assets:
Expenses, including distribution fees...... 1.24%(c)
Expenses, excluding distribution fees...... 1.24%(c)
Net investment income...................... 5.41%(c)
</TABLE>
- ---------------
(a) Total investment 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 investment return does
not consider the effect of sales load. Total investment returns for periods
of less than a full year are not annualized.
(b) Figure is actual and not rounded to nearest thousand.
(c) Annualized.
(d) Commencement of offering of Class C shares.
(e) Commencement of offering of Class Z shares.
(f) Calculated based upon weighted average shares outstanding during the period.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 15
<PAGE>
Report of Independent Accountants PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
The Global Total Return Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Prudential Global Total Return
Fund, Inc. (the 'Fund') at December 31, 1999, 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 three years
in the period then ended, in conformity with accounting principles generally
accepted in the United States. These financial statements and financial
highlights (hereafter referred to as 'financial statements') are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at December
31, 1999 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above. The accompanying financial highlights for
each of the two periods in the period ended December 31, 1996 were audited by
other independent accountants, whose opinion dated February 14, 1997 was
unqualified.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
February 16, 2000
- --------------------------------------------------------------------------------
16
<PAGE>
Federal Income Tax Information
(Unaudited) PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
- --------------------------------------------------------------------------------
We are required by the Internal Revenue Code to advise you within 60 days of the
Fund's fiscal year end (December 31, 1999) as to the federal tax status of
distributions paid by the Fund during such fiscal year. Accordingly, during its
fiscal year ended December 31, 1999, the Fund paid distributions of $.456 per
Class A share, $.414 per Class B share, $.414 per Class C share and $.472 per
Class Z share representing dividends from ordinary income (net investment income
and short-term capital gains).
We wish to advise you that the dividends received deduction for the Fund is
zero. Only funds that invest in U.S. equity securities are entitled to
pass-through a corporate dividends received deduction.
- --------------------------------------------------------------------------------
17
<PAGE>
<PAGE>
Comparing a $10,000 Investment
- ------------------------------------------------------
Prudential Global Total Return Fund, Inc. vs. the J.P.
Morgan Government Bond Index--Global (GBI)
Class A
(GRAPH)
Average Annual Total Returns
With Sales Charge As of 12/31/99
Since Inception (7/7/86) 8.95%
Ten Years 7.75
Five Years 8.31
One Year -7.79
Without Sales Charge As of 12/31/99
Since Inception 9.28%
Ten Years 8.19
Five Years 9.20
One Year -3.95
Class B
(GRAPH)
Average Annual Total Returns
With Sales Charge As of 12/31/99
Since Inception 4.37%
One Year -9.35
Without Sales Charge As of 12/31/99
Since Inception 4.81%
One Year -4.35
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 information beneath the
graphs 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 each share class (or for the past
ten years for Class A shares).
These graphs compare a $10,000 investment in Prudential
Global Total Return Fund, Inc. (Class A, B, C, and Z shares)
with a similar investment in the J.P. Morgan Government Bond
Index--Global (the GBI) by portraying the initial account
values of Class B, C, and Z shares at the commencement of
operations, at the beginning of the ten-year period for
Class A shares, and at the end of the fiscal year (December
31), as measured on a quarterly basis, beginning in 1989 for
Class A, 1996 for Class B and Class C, and 1997 for Class
Z shares. For purposes of the graphs, and unless otherwise
indicated in the accompanying tables, it has been assumed
that (a) the maximum applicable front-end sales charge was
deducted from the initial $10,000 investment in Class A and
Class C shares; (b) the maximum applicable contingent
deferred sales charges were deducted from the value of
the investment in Class B and
<PAGE>
Class C
(GRAPH)
Average Annual Total Returns
With Sales Charge As of 12/31/99
Since Inception 4.54%
One Year -6.31
Without Sales Charge As of 12/31/99
Since Inception 4.81%
One Year -4.35
Class Z
(GRAPH)
Average Annual Total Returns As of 12/31/99
Since Inception 3.75%
One Year -3.74
Class C shares, assuming full redemption on December
31, 1999; (c) all recurring fees (including management
fees) were deducted; and (d) all dividends and distributions
were reinvested. Class B shares will automatically convert
to Class A shares, on a quarterly basis, approximately
seven years after purchase. Class Z shares are
not subject to a sales charge or distribution and
service (12b-1) fees.
The GBI is a market-weighted index of the total return
of government bonds of the following nations: Australia,
Belgium, Canada, Denmark, France, Germany, Italy, Japan,
the United Kingdom, and the United States. The GBI is an
unmanaged index and is traded, unhedged, and measured in
U.S. dollars. The returns include the reinvestment of all
dividends, but do not reflect the payment of transaction
costs and advisory fees associated with an investment in
the Fund. The Index is not the only index
that may be used to characterize performance of global
bond funds, and other indexes may portray different
comparative performance. Investors cannot invest
directly in an index.
These graphs are furnished to you in accordance with SEC regulations.
<PAGE>
The Prudential Mutual Fund Family
Prudential offers a broad range of mutual funds designed
to meet your individual needs. For information about these
funds, contact your financial adviser or call us at (800)
225-1852. Read the prospectus carefully before you invest or
send money.
STOCK FUNDS
Prudential Emerging Growth Fund, Inc.
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Index Series Fund
Prudential Small-Cap Index Fund
Prudential Stock Index Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Growth Fund
Prudential Jennison Growth & Income Fund
Prudential Mid-Cap Value Fund
Prudential Real Estate Securities Fund
Prudential Sector Funds, Inc.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund
Prudential Small-Cap Quantum Fund, Inc.
Prudential Small Company Value Fund, Inc.
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund
Prudential 20/20 Focus Fund
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Target Funds
Large Capitalization Growth Fund
Large Capitalization Value Fund
Small Capitalization Growth Fund
Small Capitalization Value Fund
Asset Allocation/Balanced Funds
Prudential Balanced Fund
Prudential Diversified Funds
Conservative Growth Fund
Moderate Growth Fund
High Growth Fund
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced Fund
GLOBAL FUNDS
Global Stock Funds
Prudential Developing Markets Fund
Prudential Developing Markets Equity Fund
Prudential Latin America Equity Fund
Prudential Europe Growth Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Index Series Fund
Prudential Europe Index Fund
Prudential Pacific Index Fund
Prudential Natural Resources Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World Fund, Inc.
Prudential Global Growth Fund
Prudential International Value Fund
Prudential Jennison International Growth Fund
Global Utility Fund, Inc.
Target Funds
International Equity Fund
Global Bond Funds
Prudential Global Total Return Fund, Inc.
Prudential International Bond Fund, Inc.
BOND FUNDS
Taxable Bond Funds
Prudential Diversified Bond Fund, Inc.
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 Index Series Fund
Prudential Bond Market Index Fund
Prudential Structured Maturity Fund, Inc.
Income Portfolio
Target Funds
Total Return Bond Fund
Tax-Exempt Bond Funds
Prudential California Municipal Fund
California Series
California Income Series
Prudential Municipal Bond Fund
High Income Series
Insured Series
Prudential Municipal Series Fund
Florida Series
Massachusetts Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.
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 Special Money Market Fund, Inc.
Money Market Series
Prudential MoneyMart Assets, Inc.
Tax-Free Money Market Funds
Prudential Tax-Free Money Fund, Inc.
Prudential California Municipal Fund
California Money Market Series
Prudential Municipal Series Fund
Connecticut Money Market Series
Massachusetts Money Market Series
New Jersey Money Market Series
New York Money Market Series
Command Funds
Command Money Fund
Command Government Fund
Command Tax-Free Fund
Institutional Money Market Funds
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series
<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
visit our website at www.prudential.com
Fund Symbols
NASDAQ CUSIP
Class A GTRAX 744337106
Class B -- 744337205
Class C -- 744337304
Class Z -- 744337403
Directors
Delayne Dedrick Gold
Robert F. Gunia
Douglas H. McCorkindale
Thomas T. Mooney
Stephen P. Munn
David R. Odenath, Jr.
Richard A. Redeker
Robin B. Smith
John R. Strangfeld
Louis A. Weil, III
Clay T. Whitehead
Officers
John R. Strangfeld, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Marguerite E. H. Morrison, Secretary
Stephen M. Ungerman, Assistant Treasurer
Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Investment Advisers
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777
PRICOA Asset Management, Ltd.
115 Houndsditch
London EC3A 7BR
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 15005
New Brunswick, NJ 08906
Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795
The views expressed in this report and information about
the Fund's portfolio holdings are for the period covered
by this report and are subject to change thereafter.
This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current prospectus.
(ICON) Printed on Recycled Paper
<PAGE>
Fund Symbols
NASDAQ CUSIP
Class A GTRAX 744337106
Class B -- 744337205
Class C -- 744337304
Class Z -- 744337403
visit our website at www.prudential.com
The views expressed in this report and information
about the Fund's portfolio holdings are for the period
covered by this report and are subject to change thereafter.
This report is not authorized for distribution to
prospective investors unless preceded or accompanied
by a current prospectus.
MF169E (ICON) Printed on Recycled Paper
