<PAGE>
S E M I A N N U A L R E P O R T September 30, 1994
Prudential
Institutional
Liquidity
Portfolio, Inc.
(ICON)
Institutional Money
Market Series
(LOGO)
<PAGE>
Letter to
Shareholders
------------------------------------------------
November 10, 1994
Dear Shareholder:
Short-term interest rates have climbed dramatically over the last six months,
and your Prudential Institutional Liquidity Portfolio -- Institutional Money
Market Series (PILP) has invested to take advantage of these rising short-term
interest rates. The Series' 7-day current yield is now over 4% for the first
time since April, 1992.
For the period, the Series outperformed its competition, as measured by IBC
Donoghue, by shortening its weighted average maturity, thus enabling it to
capture rising interest rates.
<TABLE>
SERIES PERFORMANCE
As of September 30, 1994
<CAPTION>
7-Day Weighted Net Total
Current Avg. Asset Net
Yield* Maturity Value** Assets
<S> <C> <C> <C> <C>
Institutional Money
Market Series 4.47% 32 days $1.00 $391.1 mil.
IBC Donoghue's
Money Fund Avg.*** 4.20% 41 days $1.00 N/A
(All Taxable)
</TABLE>
*Yields will fluctuate from time to time and past performance is no
guarantee of future results.
**An investment in the Series is neither insured nor guaranteed by the
U.S. government and there can be no assurance that the Series will be
able to maintain a stable net asset value of $1.00 per share.
***This is the average 7-day current yield, NAV and WAM of 692 funds in IBC
Donoghue's all taxable money market fund category as of September 30,
1994.
Series Overview
The Series seeks high current income consistent with the preservation of
principal and liquidity by investing in a diversified portfolio of high
quality, U.S. dollar denominated money market obligations of domestic and
foreign issuers, with maturities ranging from one day to 13 months. The Series
attempts to avoid low-quality credits, purchasing only securities rated in the
highest categories by Moody's Investors Service or Standard & Poor's (or
another nationally recognized rating organization), or if unrated, securities
deemed by the adviser to be of equivalent quality.
-1-
<PAGE>
The Fed Tightens
During the last six months, the Federal Reserve Bank has continued to fight
a possible resurgence of inflation by increasing the federal funds rate (the
interbank overnight lending rate) a total of 175 basis points. To date,
movement in the Consumer Price Index has been benign, but some inflation
measures have been more active. Commodity prices are a concern, since the
Commodities Research Bureau raw industrials spot index (a measure of prices of
materials for immediate delivery) has risen 22% this year from its 1993 low.
For example, coffee is up 74%, cotton 56% and lumber 23%. Prices paid by
purchasing managers hit a five-year peak in the August survey. In addition,
gold, a leading indicator of inflation, rose above $400 an ounce in September
for the first time in a year.
Economic expansion has been the strongest in a decade. Growth slowed to
3.3% in the first quarter of 1994, but surged in the second quarter at 4.1%.
Year-to date, employment has risen by 270,000 a month, 76,000 more per month
than last year (as measured by the U.S. Bureau of Labor Statistics). The
length of the manufacturing work week hit a post-World War II record of 42
hours in August, including 4.8 hours of overtime. Capacity utilization reached
84.7% in August, just shy of the peak during the last expansion. And durable
goods orders in August climbed by 6.0%, their highest since December 1992.
Shortened Maturities
As the Fed tightened, we shortened our maturities to take advantage of
rising interest rates. On September 30, our weighted average maturity was 32
days, nearly half of what it was on March 31 -- 62 days. This enabled us to
purchase new investments offering higher interest rates as they came to the
market.
In addition, we increased our holdings in floating and variable rate
instruments to 34% from 27% on March 31 to allow us to capture these higher
rates. Since the coupons on these securities adjust periodically to reflect
current interest rates, they help enhance yield when rates rise. For example,
floating rate notes we purchase may be based on a money market index such as
LIBOR (London Interbank Offered Rate), the 3-month U.S. Treasury bill, or the
fed funds rate. These securities pay the quoted index rate plus a specific
amount, and the rate resets for a specified time period, such as daily, weekly
or monthly. Issuers of some variable rate securities we believe offer good
value are Beneficial and PNC Bank.
A Word About Quality
At the end of September, all the portfolio's investments were rated high
quality by two or more nationally recognized rating agencies, or they were
deemed to be of equivalent quality if they were unrated.
-2-
<PAGE>
The Outlook
The economy has not yet slowed sufficiently to prevent the threat of rising
inflation. We expect short-term interest rates will continue to increase until
the Fed is satisfied that the risk has subsided. We anticipate that there will
be further credit tightening before year-end.
As always, it is a pleasure to report our activities to you and to manage
the Series for your benefit.
Sincerely,
Lawrence C. McQuade
President
Thomas J. Piskula
Portfolio Manager
-3-
<PAGE>
PORTFOLIO Q&A
--------------------------------------------
Straight Talk On Derivatives
Derivatives have been in the news in recent months. Not all deriva-
tives are created equal, however. Money market mutual funds have
invested for a long time in securities which are, technically, deriva-
tives. This straight talk should help you learn a little bit more
about how we use them in Prudential taxable money market funds.
Q. What is a derivative?
A. A derivative is a financial instrument whose value is derived from
an underlying asset, like a stock, bond, commodity, currency or
from an index. That covers just about all financial instruments
except plain stocks or bonds.
Q. What derivatives does the Prudential Institutional
Liquidity Portfolio use?
A. We use liquidity puts and adjustable rate securities, which are
considered derivatives. Liquidity puts simply allow us to resell a
security for cash to the issuer or a third party on specified dates.
The adjustable rate securities we purchase for the Fund have interest
rates which are pegged to a money market index, such as LIBOR, the
three-month U.S. Treasury Bill or the federal funds rate. We do not
invest in those derivative-related securities that the SEC has
suggested are inappropriate for money market funds such as inverse
floaters, dual or cost of funds index floaters.
Q. Is there a danger of Prudential money market funds break-
ing the $1.00 per share net asset value?
A. While there is never a guarantee any Fund will maintain its $1.00
share value, Prudential taxable money market funds emphasize a
conservative, quality oriented investment approach. We continue to
believe that preservation of capital and liquidity cannot be
sacrificed for additional yield.
-4-
<PAGE>
<PAGE>
PRUDENTIAL INSTITUTIONAL
LIQUIDITY PORTFOLIO, INC. Portfolio of Investments
INSTITUTIONAL MONEY MARKET SERIES September 30, 1994 (Unaudited)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
BANK HOLDING PAPER--3.2%
Bankers Trust N.Y. Corp.
$ 10,000 5.15%, 4/3/95................ $ 9,736,778
NationsBank Corp.
3,000 4.81%, 11/7/94............... 2,985,169
------------
12,721,947
------------
BANK NOTES--2.3%
Bank of New York
2,000 4.78%, 10/5/94............... 1,999,995
Republic National Bank of New
York
5,000 4.30%, 3/8/95................ 4,993,306
Society National Bank
2,000 3.55%, 1/20/95............... 1,999,022
------------
8,992,323
------------
CERTIFICATES OF DEPOSIT--
FOREIGN ISSUERS--3.6%
Bank of Tokyo, Ltd.
10,000 4.86%, 10/17/94.............. 10,000,000
Bayerische Landesbank
1,000 6.50%, 10/17/94.............. 1,000,693
Fuji Bank, Ltd.
3,000 5.03%, 10/24/94.............. 2,999,996
------------
14,000,689
------------
COMMERCIAL PAPER--
DOMESTIC ISSUERS--33.8%
Aristar, Inc.
1,000 4.86%, 10/7/94............... 999,190
1,000 5.05%, 10/21/94.............. 997,194
CIT Group Holdings, Inc.
8,000 4.88%, 11/21/94.............. 7,944,693
3,000 4.85%, 11/30/94.............. 2,975,750
1,000 4.88%, 12/1/94............... 991,731
Corporate Asset Funding Co.,
Inc.
12,387 3.35%, 10/6/94............... 12,381,237
Dean Witter, Discover & Co.
$ 14,000 4.81%, 11/1/94............... $ 13,942,013
Ford Motor Credit Corp.
11,000 4.85%, 11/16/94.............. 10,931,831
General Motors Acceptance
Corp.
16,700 4.90%, 11/14/94.............. 16,599,986
Greyhound Financial Corp.
1,611 4.92%, 10/19/94.............. 1,607,037
1,000 4.97%, 10/24/94.............. 996,825
1,050 5.10%, 10/25/94.............. 1,046,430
GTE Corp.
5,000 4.85%, 10/14/94.............. 4,991,243
Household Finance Corp.
5,000 4.90%, 11/16/94.............. 4,952,391
2,000 4.90%, 11/17/94.............. 1,987,206
International Business
Machines Corp.
4,000 4.84%, 10/25/94.............. 3,987,093
ITT Corp.
1,000 4.80%, 10/5/94............... 999,467
ITT Financial Corp.
8,000 4.90%, 11/21/94.............. 7,944,467
PacifiCorp
7,840 5.05%, 10/4/94............... 7,836,701
Pennsylvania Power & Light
Energy
1,000 4.80%, 10/6/94............... 999,333
2,225 4.87%, 10/20/94.............. 2,219,281
PHH Corp.
3,000 4.80%, 10/11/94.............. 2,996,000
Preferred Receivables Funding
Corp.
8,000 4.67%, 10/11/94.............. 7,989,622
Public Service Electric & Gas
Co.
1,000 4.80%, 10/4/94............... 999,600
1,830 4.85%, 10/21/94.............. 1,825,069
Sears Roebuck Acceptance
Corp.
6,000 5.00%, 10/26/94.............. 5,979,167
</TABLE>
-5- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL INSTITUTIONAL
LIQUIDITY PORTFOLIO, INC.
INSTITUTIONAL MONEY MARKET SERIES
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
COMMERCIAL PAPER--
DOMESTIC ISSUERS--(cont'd)
Smith Barney, Inc.
$ 3,000 4.84%, 10/18/94.............. $ 2,993,143
WMX Technologies, Inc.
2,000 5.20%, 5/12/95............... 1,935,578
------------
132,049,278
------------
COMMERCIAL PAPER--
FOREIGN ISSUERS--9.1%
American Honda Finance Corp.
2,000 4.95%, 10/11/94.............. 1,997,250
4,000 5.00%, 10/17/94.............. 3,991,111
1,000 5.00%, 10/25/94.............. 996,667
BAT Capital Corp.
2,000 5.00%, 10/26/94.............. 1,993,056
Bridgestone/Firestone, Inc.
1,000 4.87%, 10/17/94.............. 997,836
Cheltenham & Glouster
Building
Society
3,000 4.82%, 10/24/94.............. 2,990,762
Fundex Corp.
1,000 5.00%, 10/24/94.............. 996,806
Hyundai Motor Finance Co.
1,000 4.85%, 10/17/94.............. 997,844
1,500 4.85%, 10/18/94.............. 1,496,565
Kubota Finance (USA), Inc.
1,000 4.98%, 10/26/94.............. 996,542
Maguire/Thomas Partners
7,000 4.85%, 10/12/94.............. 6,989,626
Mitsubishi International
Corp.
1,500 4.95%, 10/13/94.............. 1,497,525
4,600 4.95%, 10/20/94.............. 4,587,983
National Australia Funding,
Inc.
2,000 4.93%, 10/31/94.............. 1,991,783
NS Finance, Inc.
2,000 4.85%, 10/14/94.............. 1,996,497
Sumitomo Electric Finance
(USA), Inc.
$ 1,000 5.03%, 10/21/94.............. $ 997,206
------------
35,515,059
------------
EURO-TIME DEPOSIT--6.9%
Bankers Trust Co.
8,700 5.00%, 10/3/94............... 8,700,000
First Union National Bank
of North Carolina
18,460 5.00%, 10/3/94............... 18,460,000
------------
27,160,000
------------
LOAN PARTICIPATIONS--0.5%
Hertz Corp.
2,000 4.88%, 10/7/94............... 2,000,000
------------
OTHER CORPORATE
OBLIGATIONS--2.1%
General Motors Acceptance
Corp.
3,150 6.85%, 5/12/95............... 3,170,306
International Lease Finance
Corp.
4,000 4.50%, 3/1/95................ 3,986,175
Morgan Stanley Group, Inc.
1,000 9.875%, 5/1/95............... 1,022,971
------------
8,179,452
------------
VARIABLE RATE
INSTRUMENTS(D)--33.8%
American Express Centurion
Bank
2,000 4.875%, 10/5/94.............. 1,999,831
1,000 4.875%, 10/19/94............. 999,912
Beneficial Corp.
10,000 4.97%, 10/5/94............... 10,000,000
Boatmens National Bank
19,500 4.96%, 10/3/94............... 19,500,000
FCC National Bank
15,000 5.10%, 11/2/94............... 15,000,272
Goldman Sachs Group, L.P.
18,000 5.375%, 1/30/95.............. 18,000,000
</TABLE>
-6- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL INSTITUTIONAL
LIQUIDITY PORTFOLIO, INC.
INSTITUTIONAL MONEY MARKET SERIES
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
<C> <S> <C>
VARIABLE RATE INSTRUMENTS--(cont'd)
Key Bank of New York
$ 18,500 4.87%, 10/3/94............... $ 18,484,219
Lehman Brothers Holdings,
Inc.
10,000 5.25%, 10/24/94.............. 10,000,000
Merrill Lynch & Co., Inc.
2,000 4.8975%, 11/17/94............ 1,999,972
5,000 4.885%, 10/3/94.............. 4,999,022
3,000 4.885%, 10/24/94............. 2,999,429
Money Market Auto Loan Trust
5,000 5.065%, 10/17/94............. 5,000,000
Money Market Credit Card
Trust
5,317 4.96%, 10/11/94.............. 5,317,510
Morgan Stanley Group, Inc.
3,000 5.0625%, 10/17/94............ 3,000,000
5,000 5.15867%, 10/19/94........... 5,000,000
2,000 5.00%, 11/15/94.............. 2,000,000
PNC Bank
8,000 5.02%, 10/21/94.............. 7,996,861
------------
132,297,028
------------
YANKEE EURO-TIME DEPOSIT--4.8%
Sakura Bank, Ltd.
18,700 5.00%, 10/3/94............... 18,700,000
------------
Total Investments--100.1%
(amortized cost
$391,615,776*)............. 391,615,776
Liabilities in excess of
other
assets--(0.1%)............. (468,350)
------------
Net Assets--100%............. $391,147,426
------------
------------
</TABLE>
* The cost of securities for federal income tax purposes is substantially the
same as for financial reporting purposes.
(D)For purposes of amortized cost valuation, the maturity date of variable rate
instruments is considered to be the next date on which the security can be
redeemed at par or the next date on which the rate of interest is adjusted.
The industry classification of portfolio holdings and net liabilities shown as a
percentage of net assets as of September 30, 1994 was as follows:
<TABLE>
<S> <C>
Commercial Banks......................... 39.2%
Securities Brokers & Dealers............. 16.9
Personal Credit Institutions............. 16.6
Asset Backed............................. 7.8
Business Credit (Finance)................ 5.5
Electrical............................... 3.5
Domestic Bank Holding Companies.......... 3.3
Equipment Rental & Leasing............... 2.3
Commodity Trading Firms.................. 1.5
Telephone and Communications............. 1.3
Office Machines.......................... 1.0
Chemicals & Allied Products.............. 0.5
Tobacco.................................. 0.5
Financial Services....................... 0.2
-----
100.1
Liabilities in excess of other assets.... (0.1)
-----
100.0%
-----
-----
</TABLE>
-7- See Notes to Financial Statements.
<PAGE>
<PAGE>
PRUDENTIAL INSTITUTIONAL
LIQUIDITY PORTFOLIO, INC.
INSTITUTIONAL MONEY MARKET SERIES
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
September 30,
Assets 1994
-------------
<S> <C>
Investments, at amortized cost which approximates value.................................. $391,615,776
Cash..................................................................................... 17,574
Interest receivable...................................................................... 1,143,509
Other assets............................................................................. 10,664
-------------
Total assets........................................................................... 392,787,523
-------------
Liabilities
Dividends payable........................................................................ 1,335,706
Accrued expenses and other liabilities................................................... 224,949
Management fee payable................................................................... 60,914
Distribution fee payable................................................................. 18,528
-------------
Total liabilities...................................................................... 1,640,097
-------------
Net Assets............................................................................... $391,147,426
-------------
-------------
Net assets were comprised of:
Common stock, at par................................................................... $ 391,147
Paid-in capital in excess of par....................................................... 390,756,279
-------------
Net assets at September 30, 1994......................................................... $391,147,426
-------------
-------------
Net asset value, offering and redemption price per share
($391,147,426 / 391,147,426 shares of $.001 par value common stock issued and
outstanding)........................................................................... $1.00
-------------
-------------
</TABLE>
See Notes to Financial Statements.
-8-
<PAGE>
<PAGE>
PRUDENTIAL INSTITUTIONAL
LIQUIDITY PORTFOLIO, INC.
INSTITUTIONAL MONEY MARKET SERIES
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
September 30,
Net Investment Income 1994
-------------
<S> <C>
Income
Interest and discount earned......... $ 8,145,135
-------------
Expenses
Management fee....................... 375,529
Distribution fee..................... 225,318
Transfer agent's fees and expenses... 128,000
Custodian's fees and expenses........ 84,000
Registration fees.................... 25,000
Directors' fees...................... 20,000
Audit fees........................... 14,000
Reports to shareholders.............. 12,000
Legal fees........................... 7,000
Insurance expense.................... 6,700
Miscellaneous........................ 5,074
-------------
Total expenses..................... 902,621
-------------
Net investment income.................. 7,242,514
Realized Gain on Investments
Net realized gain on investment
transactions......................... 11,733
-------------
Net Increase in Net Assets
Resulting from Operations.............. $ 7,254,247
-------------
-------------
</TABLE>
PRUDENTIAL INSTITUTIONAL
LIQUIDITY PORTFOLIO, INC.
INSTITUTIONAL MONEY MARKET SERIES
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase (Decrease) September 30, March 31,
in Net Assets 1994 1994
------------- ---------------
<S> <C> <C>
Operations
Net investment
income................ $ 7,242,514 $ 12,776,570
Net realized gain on
investment
transactions........ 11,733 76,316
------------- ---------------
Net increase in net
assets resulting
from operations..... 7,254,247 12,852,886
------------- ---------------
Dividends and
distributions to
shareholders.......... (7,254,247) (12,852,886)
------------- ---------------
Fund share transactions
(at $1 per share)
Proceeds from shares
subscribed.......... 753,546,671 2,092,856,313
Net asset value of
shares
issued to
shareholders
in reinvestment of
dividends and
distributions....... 6,587,618 12,113,835
Cost of shares
reacquired............ (754,009,791) (2,217,160,989)
------------- ---------------
Net increase
(decrease) in net
assets from Fund
share
transactions........ 6,124,498 (112,190,841)
------------- ---------------
Total increase
(decrease)............ 6,124,498 (112,190,841)
Net Assets
Beginning of period..... 385,022,928 497,213,769
------------- ---------------
End of period........... $ 391,147,426 $ 385,022,928
------------- ---------------
------------- ---------------
</TABLE>
See Notes to Financial Statements.
-9-
<PAGE>
<PAGE>
PRUDENTIAL INSTITUTIONAL
LIQUIDITY PORTFOLIO, INC.
INSTITUTIONAL MONEY MARKET SERIES
Notes to Financial Statements
(Unaudited)
Prudential Institutional Liquidity Portfolio, Inc.--Institutional Money
Market Series (the ``Fund'') is registered under the Investment Company Act of
1940 as an open-end, diversified management investment company. The investment
objective of the Fund is high current income consistent with the preservation of
principal and liquidity. The Fund invests primarily in money market instruments
maturing in thirteen months or less whose ratings are within the two highest
ratings categories by a nationally recognized statistical rating organization
or, if not rated, are of comparable quality. The ability of the issuers of the
securities held by the Fund to meet its obligations may be affected by economic
developments in a specific industry or region.
Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund in the preparation of
its financial statements.
Securities Valuations: Portfolio securities are valued at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at its cost on the date of purchase and thereafter assuming a constant
amortization to maturity of any discount or premium.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Interest income is recorded on the
accrual basis.
Federal Income Taxes: It is the intent of the Fund to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies
and to distribute all of its taxable net income to its shareholders. Therefore,
no federal income tax provision is required.
Dividends and Distributions: The Fund declares all of its net investment income
and net realized short-term capital gains/losses, if any, as dividends daily to
its shareholders of record at the time of such declaration. Net investment
income for dividend purposes includes interest accrued or discount earned less
amortization of premium and the estimated expenses applicable to the dividend
period. The Fund does not expect to realize long-term capital gains or losses.
Note 2. Agreements The Fund has a management
agreement with Prudential Mutual Fund Management,
Inc. (``PMF''). Pursuant to this agreement, PMF has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PMF has entered into a subadvisory agreement with The Prudential
Investment Corporation (``PIC''); PIC furnishes investment advisory services in
connection with the management of the Fund. PMF pays for the cost of the
subadviser's services, the compensation of officers of the
Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund
bears all other costs and expenses.
The management fee paid PMF is computed daily and payable monthly, at an
annual rate of .20 of 1% of the average daily net assets of the Fund.
The Fund has a distribution agreement with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), who acts as the distributor of the Fund's shares.
To reimburse PMFD for its expenses incurred pursuant to a plan of distribution,
the Fund pays PMFD a reimbursement which is accrued daily and payable monthly at
an annual rate of .12 of 1% of the average daily net assets of the Fund. PMFD
pays various broker-dealers or financial institutions, including Prudential
Securities Incorporated (``PSI'') and Pruco Securities Corporation, affiliated
broker-dealers, for account servicing fees and other expenses incurred by such
broker-dealers.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect,
wholly-owned subsidiaries of The Prudential Insurance Company of America.
Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS''), a
with Affiliates wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent. During
the six months ended September 30, 1994, the Fund incurred fees of approximately
$120,000 for the services of PMFS. As of September 30, 1994, approximately
$20,000 of such fees were due to PMFS. Transfer agent fees and expenses in the
Statement of Operations include certain out-of-pocket expenses paid to
non-affiliates.
-10-
<PAGE>
<PAGE>
PRUDENTIAL INSTITUTIONAL LIQUIDITY PORTFOLIO, INC.
INSTITUTIONAL MONEY MARKET SERIES
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended March 31,
September 30, --------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1994 1994 1993 1992 1991 1990
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period............. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Net investment income and net realized gains..... .019 .029 .033 .054 .076 .087
Dividends and distributions to shareholders...... (.019) (.029) (.033) (.054) (.076) (.087)
------------- -------- -------- -------- -------- --------
Net asset value, end of period................... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------- -------- -------- -------- -------- --------
------------- -------- -------- -------- -------- --------
TOTAL RETURN#:................................... 1.96% 2.92% 3.40% 5.57% 8.00% 9.07%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000).................. $ 391,147 $385,023 $497,214 $443,172 $519,802 $417,354
Average net assets (000)......................... $ 374,503 $445,867 $543,694 $540,380 $479,849 $421,540
Ratios to average net assets:
Expenses, including distribution fee........... .48%* .48% .44% .42% .46% .38%
Expenses, excluding distribution fee........... .36%* .36% .32% .30% .34% .26%
Net investment income.......................... 3.86%* 2.87% 3.28% 5.32% 7.58% 8.60%
</TABLE>
- ---------------
* Annualized.
# 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. Total returns for periods for less than a full
year are not annualized.
See Notes to Financial Statements.
-11-
<PAGE>
Directors
Eugene C. Dorsey
Donald D. Lennox
Lawrence C. McQuade
Richard A. Redeker
Stanley E. Shirk
Robin B. Smith
Officers
Lawrence C. McQuade, President
Robert F. Gunia, Vice President
Susan C. Cote, Treasurer
S. Jane Rose, Secretary
Marguerite E.H. Morrison, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributors
Prudential Mutual Fund Distributors, Inc.
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281
Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, Illinois 60610-4795
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll free (800) 225-1852, Collect (908) 417-7555
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
The accompanying financial statements as of September 30, 1994 were not audited
and, accordingly, no opinion is expressed on them.
MF137E2
750350109 (LOGO) Cat.#4441652
