SEMI ANNUAL REPORT June 30, 1995
Prudential
Intermediate Global Income Fund, Inc.
(LOGO)
Prudential Intermediate
Global Income Fund, Inc.
Performance At A Glance.
During the last six months, global bonds have produced double-digit gains, led
largely by the U.S. bond market, which picked up steam as U.S. economic growth
slowed and fears of higher inflation diminished. We are pleased to report that
the Prudential Intermediate Global Income Fund performed better than the Lipper
General World Income Average.
Cumulative Total Returns1 As of 6/30/95
<TABLE>
<CAPTION>
Six One Five Since
Months Year Years Inception2
<S> <C> <C> <C> <C>
Class A 15.0% 12.9% 46.6% 67.6%
Class B 14.6 12.2 N/A 26.0
Class C 14.6 N/A N/A 11.8
*Lipper World Income Avg 10.1 10.6 53.0 9.9
</TABLE
Average Annual Total Returns1 As of 6/30/95
</TABLE>
<TABLE>
<CAPTION>
One Five Since
Year Years Inception
<S> <C> <C> <C>
Class A 9.5% 7.3% 7.1%
Class B 9.2 N/A 6.7
Class C N/A N/A 10.8
</TABLE>
<TABLE>
<CAPTION>
30-Day
Dividend SEC-Yield
<S> <C> <C>
Your Class A $0.036 6.12%
Dividend Class B $0.032 5.70%
As of 6/30/95 Class C $0.032 5.70%
</TABLE>
Past performance is not a guarantee of future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
1Source: Prudential Mutual Fund Management, Inc. and Lipper Analytical
Services, 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 load of 3% for Class A
shares. Class B shares are subject to a declining contingent deferred sales
charge (CDSC) of 3%, 2%, 1% and 1%, for four years. Class C shares have a 1%
CDSC for one year. Class B shares will automatically convert to Class A shares
on a quarterly basis, after approximately five years.
2Inception dates: 5/26/88 Class A; 1/15/92 Class B; 8/1/94 Class C.*
These are the average returns of 154 funds in the Lipper General World Income
Fund category for six months; 132 funds for one year; 25 funds for five years;
and 18 since inception of Class A shares on 5/26/88, as determined by Lipper
Analytical Services, Inc.
<CHART>
Source: Lipper Analytical Services, Inc. Financial markets change, so a mutual
fund's past performance should never be used to predict future results. The
risks to each of the investments listed above are different -- we provide
12-month total returns for several Lipper mutual fund categories to show you
that reaching for higher yields means tolerating more risk. The greater the
risk, the larger the potential reward or loss. In addition, we've added
historical 20-year average annual returns to show that 1995's returns (so far)
are higher than normal. These returns assume the reinvestment of dividends.
Stock funds will fluctuate a great deal. Smaller capitalization stocks offer
greater potential for long term growth but may be more volatile than larger
capitalization stocks. Investors receive higher historical total returns from
stocks than from most other investments.
Bond funds provide more income than stock funds, which can help smooth out
their total returns year by year. But their prices still fluctuate (sometimes
a good deal) and their returns are historically lower than those of stock
funds.
Sector or specialty stock funds usually entail the greatest risks because they
are not widely diversified. They are designed for sophisticated investors who
can tolerate additional risk in exchange for higher potential rewards or
losses.
Money market funds attempt to preserve a constant share value; they don't
fluctuate much in price but their returns are generally among the lowest of
the major investment categories.
<PAGE>
Fund Managers
(PICTURE)
Simon Wells
(PICTURE)
Gabriel Irwin
Portfolio
Manager's Report
The Prudential Intermediate Global Income Fund seeks to maximize total return.
It invests primarily in intermediate-term government debt securities throughout
the world.
Overview
The Fund will invest, generally, in investment grade securities -- those rated
in one of the four highest categories by Moody's, Standard & Poor's or another
recognized rating service. The Fund may also invest up to 10% of its total
assets in debt securities rated below investment grade, with a minimum rating
of B.
1. Strategy Session.
What We See Now.
Our overall strategy is to emphasize country and currency allocations rather
than particular types of bonds. Historically, the range of return between
different markets is much greater than the range of return within a single
market.
While the world's bond markets produced superior results over the last six
months, we believe selectively choosing among markets will continue to be
extremely important going forward. During second quarter 1995, expectations
for world economic growth slowed dramatically to steady, non-inflationary
growth.
We've already begun to see this shift in the U.S., which has led the world's
recent bond recovery. When U.S. economic growth began to slow in 1995, 30-year
U.S. Treasury bond yields fell to 6.6% from 7.9% and U.S. bond prices soared.
Our large position in U.S. securities (31% as of June 30) was a factor in the
Fund's strong performance. Equally positive has been the general decline in
interest rates around the globe, which has resulted in worldwide bond returns
of 10%, on average, over the past six months.
<PAGE>
2. What Went Well.
Weak Dollar=
Strong Returns.
The weakness of the dollar relative to German mark and Japanese yen had a
significant impact on your Fund's returns from Europe and Japan. Returns from
the largest and most stable European countries rose an extra 10% to 12% when
translated into U.S. dollars. Japanese bond performance was even stronger -- a
total return of just below 33% mostly because of the yenOs rise against the
dollar in the first six months of 1995.
Emphasizing
Top Markets.
We are focusing on the worldOs largest bond markets. The bulk of these
investments are in government and supranational issues. This keeps credit
quality high -- predominantly AAA. To enhance yield, a small percentage of the
Fund continues to be allocated to emerging market debt -- in more fundamentally
sound and secure countries such as Thailand (rated A), the Czech Republic
(rated BBB+) and Colombia (rated BBB).
Increased U.S.
Dollar Exposure.
We dramatically reduced the Fund's exposure in foreign currency (from just
over 60% to less than 20%) and raised U.S. dollar exposure, which helped
capture U.S. bond price increases. We felt banking on the idea that the dollar
would remain weak or decline further relative to other currencies was too risky
given its fall to historically low levels. This has substantially reduced our
currency risk if the dollar rises, which we expect it will.
Japan Holdings
Trimmed.
While the FundOs 21% position in Japan (as of March 31, 1995) produced positive
results during the first half of the year, we have since substantially trimmed
our position to about 7%. We believe this is a prudent move following the very
powerful rally in the Japanese bond market earlier this year, which lowered the
yields now available on these bonds. There are economic concerns as well.
Foremost is the slowdown of Japan's economy. The strength of the yen relative
to the U.S. dollar has made more than 90% of Japanese exporters unprofitable.
Given this and other unsettling events, such as Japan's banking crisis, we
prefer to pursue investment opportunities elsewhere. In particular, we like
dollar zone/dollar bloc (U.S., Australia, Canada and New Zealand) and European
bonds, as well as cash.
Largest Holdings.*
7.3% U.S. Treasury Note
6.6% U.S. Treasury Note
5.2% U.S. Treasury Bond
4.2% Canadian Gov't. Bond
4.0% Australian Gov't. Bond
*Expressed as a percentage of net assets.
3. Looking Ahead.
For the remainder of the year, our outlook for global bonds is positive, yet
cautious.
In general, we expect world inflation to remain low, which should continue to
support bond prices. Clouding this picture slightly, of course, is the
uncertainty over the direction of the U.S. dollar. By most measures, the dollar
is significantly undervalued against other leading currencies. The necessary
trigger for it to rise -- Japanese government commitment to programs of fiscal
and monetary expansion, for instance -- has not yet occurred. Until this shows
signs of turning, we will remain somewhat neutral on currency exposure.
1
<PAGE>
President's Letter July 31, 1995
(PICTURE)
Dear Shareholder:
You've probably noticed your shareholder report looks different this month.
We've designed it to provide clear, concise and forthright information about
your investment, its performance, risks and potential rewards. And, from time
to time, I'll share some thoughts with you about the industry, mutual fund
trends and how we're responding to them at Prudential Mutual Funds.
On The Hill
One recent trend we like is part of the "Contract with America." It's called
the American Dream Savings Account and it was approved by the House of
Representatives earlier in the year. This fall the Senate should take up the
proposal, which would improve the traditional Individual Retirement Account
program by allowing higher non-working spouse contributions. The proposed law
would also allow tax-free and penalty-free withdrawals from the account before
age 59 1/2, for certain expenses. Prudential Mutual Funds supports the proposal
and we urge you to share your opinion about it with your Senator. You can reach
your Senator's office by calling 202-224-3121.
In Closing
One final note: if youOre a Class B shareholder, you'll begin noticing a change
on your statements once you've held your shares for five years. At that time
they will automatically begin to convert to Class A shares on a quarterly
basis. Since Class A shares carry lower annual distribution charges than Class
B shares, your total returns will automatically rise after the conversion.
Conversions started earlier this year and will occur each calendar
quarter--beginning in December, 1995, they'll take place every March, June,
September and December.
I hope you'll find this information useful as you work with your financial
advisor or registered representative to develop your personal investment plan.
Thank you for choosing Prudential Mutual Funds for your mutual fund investment.
Sincerely,
Richard A. Redeker
President
2
<PAGE>
Portfolio of Investments as PRUDENTIAL INTERMEDIATE GLOBAL
of June 30, 1995 (Unaudited) INCOME FUND, INC.
------------------------------------------------------------
------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
------------------------------------------------------------
LONG-TERM INVESTMENTS--92.4%
------------------------------------------------------------
Australia--4.8%
A$ 12,730 Australian Government Bond,
9.00%, 9/15/04 $ 8,926,991
2,900 New South Wales Treasury
Corporation,
6.50%, 5/1/06 1,640,118
-------------
10,567,109
------------------------------------------------------------
Canada--5.1%
C$ 3,000 British Columbia Provincial
Bond,
7.75%, 6/16/03 2,138,252
11,900 Canadian Government Bond,
9.00%, 12/1/04 9,234,026
-------------
11,372,278
------------------------------------------------------------
Denmark--7.6%
Danish Government Bonds,
DKr 25,860 8.00%, 11/15/01 4,715,161
30,400 8.00%, 5/15/03 5,461,924
39,560 7.00%, 12/15/04 6,594,346
-------------
16,771,431
------------------------------------------------------------
Germany--11.1%
German Government Bonds,
DM 7,160 5.375%, 2/22/99 5,108,743
6,630 6.75%, 4/22/03 4,723,396
10,000 7.375%, 1/3/05 7,380,780
7,830 6.25%, 1/4/24 4,777,771
3,640 Treuhandanstalt,
6.125%, 3/26/98 2,661,618
-------------
24,652,308
------------------------------------------------------------
Ireland--3.8%
Irish Government Bonds,
IEP 2,700 8.75%, 7/27/97 4,481,355
2,600 6.25%, 4/1/99 3,938,555
-------------
8,419,910
Italy--3.3%
Lira 13,760,000 Italian Government Bond,
7.4375%, 8/1/99 $ 7,430,276
------------------------------------------------------------
Japan--7.2%
Japanese Government Bonds,
Y 550,000 6.60%, 6/20/01 7,975,778
600,000 4.60%, 9/20/04 8,070,014
-------------
16,045,792
------------------------------------------------------------
Netherlands--3.0%
Dutch Government Bonds,
NLG 5,000 7.50%, 6/15/99 3,388,229
2,500 7.00%, 6/15/05 1,613,642
2,600 7.50%, 1/15/23 1,664,602
-------------
6,666,473
------------------------------------------------------------
New Zealand--0.8%
NZ$ 2,500 New Zealand Government Bond,
10.00%, 7/15/97 1,728,395
------------------------------------------------------------
Sweden--4.4%
Swedish Government Bonds,
SKr 22,000 11.00%, 1/21/99 3,050,452
50,000 10.25%, 5/5/00 6,751,522
-------------
9,801,974
------------------------------------------------------------
United Kingdom--7.8%
BP 600 Guaranteed Export Finance
Corp.,
7.25%, 12/15/98 926,317
4,480 United Kingdom Treasury Bond,
7.75%, 9/8/06 6,752,340
United Kingdom Treasury Notes,
2,250 7.00%, 11/6/01 3,344,217
4,000 8.00%, 9/27/13 6,076,628
-------------
17,099,502
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements. 3 -----
<PAGE>
Portfolio of Investments as PRUDENTIAL INTERMEDIATE GLOBAL
of June 30, 1995 (Unaudited) INCOME FUND, INC.
------------------------------------------------------------
------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Value (Note 1)
<C> <S> <C>
------------------------------------------------------------
United States--33.5%
Sovereign Bonds--2.8%
US$ 1,250 National Bank of Hungary,
7.95%, 11/1/03 $ 1,076,250
1,250 Republic of Colombia,
8.75%, 10/6/99 1,303,908
3,100 Republic of Ecuador,
7.25%, 2/28/25 1,515,125
3,100 Republic of Poland,
Discount Bond,
7.125%*, 10/27/24 2,375,375
-------------
6,270,658
U.S. Government Securities--30.7%
United States Treasury Bond,
10,360 7.50%, 11/15/24 11,462,408
United States Treasury Notes,
15,000 5.00%, 1/31/99 14,545,350
15,820 6.75%, 6/30/99 16,227,839
3,800 7.75%, 11/30/99 4,052,928
4,900 6.375%, 1/15/00 4,972,716
7,700 7.75%, 1/31/00 8,226,988
7,800 7.875%, 11/15/04 8,687,250
-------------
68,175,479
-------------
Total long-term investments
(cost US$198,084,024) 205,001,585
-------------
SHORT-TERM INVESTMENTS--5.1%
------------------------------------------------------------
Mexico--0.1%
Mexican Tesobonos,D
US$ 135 8.14%, 7/27/95 133,758
94 7.98%, 8/3/95 94,000
-------------
227,758
New Zealand--2.8%
NZ$ 5,000 New Zealand Government Bond,
8.00%, 11/15/95 $ 3,328,788
4,400 New Zealand Time Deposit,
8.50%, 7/3/95 2,940,528
-------------
6,269,316
------------------------------------------------------------
United States--2.2%
US$ 4,743 Joint Repurchase
Agreement Account,
6.12%, 7/3/95, (Note 5) 4,743,000
-------------
Total short-term investments
(cost US$11,271,342) 11,240,074
-------------
------------------------------------------------------------
Total Investments--97.5%
(cost $209,355,366; Note 4) 216,241,659
Other assets in excess of
liabilities--2.5% 5,471,577
-------------
Net Assets--100% $ 221,713,236
-------------
-------------
</TABLE>
---------------
Portfolio securities are classified according to the securities
currency denomination.
Portfolio securities are segregated as collateral for forward
currency contracts.
D Percentages quoted represent yield-to-maturity as of
purchase date.
* Rate shown reflects current rate on variable rate
instrument.
--------------------------------------------------------------------------------
----- 4 See Notes to Financial Statements.
<PAGE>
Statement of Assets PRUDENTIAL INTERMEDIATE GLOBAL
and Liabilities (Unaudited) INCOME FUND, INC.
--------------------------------------------------------------------------------
<TABLE>
<S>
<C>
Assets
June 30, 1995
Investments, at value (cost
$209,355,366)...................................................................
. $216,241,659
Foreign currency (cost
$664,243).......................................................................
...... 666,803
Cash............................................................................
............................. 49
Receivable for investments
sold............................................................................
.. 5,112,054
Interest
receivable......................................................................
.................... 4,044,852
Forward currency contracts--net amount receivable from
counterparties........................................ 3,010,003
Receivable for Fund shares
sold............................................................................
.. 33,840
Other
assets..........................................................................
....................... 46,760
------------
Total
assets..........................................................................
.................... 229,156,020
------------
------------
Liabilities
Payable for investments
purchased.......................................................................
..... 3,050,161
Forward currency contracts--net amount payable to
counterparties............................................. 2,917,166
Payable for Fund shares
reacquired......................................................................
..... 635,769
Accrued
expenses........................................................................
..................... 318,704
Dividends
payable.........................................................................
................... 300,947
Management fee
payable.........................................................................
.............. 140,516
Tax withholding
liability.......................................................................
............. 41,770
Distribution fee
payable.........................................................................
............ 37,751
------------
Total
liabilities.....................................................................
.................... 7,442,784
------------
Net
Assets..........................................................................
......................... $221,713,236
------------
------------
Net assets were comprised of:
Common stock, at
par.............................................................................
......... $ 27,063
Paid-in capital in excess of
par..........................................................................
296,966,598
------------
296,993,661
Undistributed net investment
income.......................................................................
5,773,538
Accumulated net realized loss on
investments..............................................................
(88,044,238)
Net unrealized appreciation on investments and foreign
currencies......................................... 6,990,275
------------
Net assets, June 30,
1995............................................................................
........ $221,713,236
------------
------------
Class A:
Net asset value and redemption price per share
($202,745,536 / 24,750,370 shares of common stock issued and
outstanding).............................. $8.19
Maximum sales charge (3.00% of offering
price)............................................................
.25
Maximum offering price to
public..........................................................................
$8.44
Class B:
Net asset value, offering price and redemption price per share
($18,955,958 / 2,311,572 shares of common stock issued and
outstanding)................................ $8.20
Class C:
Net asset value, offering price and redemption price per share
($11,742 / 1,432 shares of common stock issued and
outstanding)........................................ $8.20
</TABLE>
--------------------------------------------------------------------------------
See Notes to Financial Statements. 5 -----
<PAGE>
PRUDENTIAL INTERMEDIATE GLOBAL
INCOME FUND, INC.
Statement of Operations (Unaudited)
------------------------------------------------------------
------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
June 30,
Net Investment Income 1995
-----------
<S> <C>
Income
Interest and discount earned (net of foreign
withholding taxes of $10,525)............ $ 8,209,373
Income from securities loaned............... 4,913
-----------
8,214,286
-----------
Expenses
Management fee.............................. 849,966
Distribution fee--Class A................... 154,540
Distribution fee--Class B................... 77,230
Distribution fee--Class C................... 35
Transfer agent's fees and expenses.......... 280,000
Custodian's fees and expenses............... 185,000
Reports to shareholders..................... 34,000
Audit fee................................... 33,500
Legal fees and expenses..................... 20,000
Registration fees........................... 20,000
Directors' fees............................. 15,000
Insurance expense........................... 3,000
Miscellaneous............................... 7,451
-----------
Total expenses........................... 1,679,722
-----------
Net investment income.......................... 6,534,564
-----------
Net Realized and Unrealized Gain (Loss)
on Investment and Foreign
Currency Transactions
Net realized gain (loss) on:
Investment transactions..................... 2,082,511
Foreign currency transactions............... 12,555,909
Written option transactions................. (1,839,478)
-----------
12,798,942
-----------
Net change in net unrealized appreciation/depreciation of:
Investments................................. 10,483,748
Foreign currencies.......................... 2,134,607
Written options............................. 84,821
-----------
12,703,176
-----------
Net gain on investments and foreign
currencies.................................. 25,502,118
-----------
Net Increase in Net Assets
Resulting from Operations...................... $32,036,682
-----------
-----------
</TABLE>
<TABLE>
PRUDENTIAL INTERMEDIATE GLOBAL
INCOME FUND, INC.
Statement of Changes in Net Assets (Unaudited)
<CAPTION>
Six Months
Increase (Decrease) Ended Year Ended
in Net Assets June 30, 1995 December 31, 1994
------------- -----------------
<S> <C> <C>
Operations
Net investment income........ $ 6,534,564 $ 17,615,129
Net realized gain (loss) on
investment and foreign
currency transactions..... 12,798,942 (33,774,304)
Net change in net unrealized
appreciation/depreciation
on investments and foreign
currencies................ 12,703,176 (6,472,524)
------------- -----------------
Net increase (decrease) in
net
assets resulting from
operations................ 32,036,682 (22,631,699)
------------- -----------------
Net equalization debits......... (68,241) (298,272)
------------- -----------------
Dividends and distributions (Note 1)
Dividends from net investment
income
Class A................... (5,863,360) (9,720,977)
Class B................... (537,047) (1,068,617)
Class C................... (231) --
------------- -----------------
(6,400,638) (10,789,594)
------------- -----------------
Distributions from net
realized gains
Class A................... -- (451,238)
Class B................... -- (57,559)
------------- -----------------
-- (508,797)
------------- -----------------
Tax return of capital
distributions
Class A................... -- (7,599,757)
Class B................... -- (836,616)
------------- -----------------
-- (8,436,373)
------------- -----------------
Fund share transactions (net of
share conversions) (Note 6)
Net proceeds from shares
sold...................... 11,471,071 12,598,805
Net asset value of shares
issued in reinvestment of
dividends and
distributions............. 1,619,229 4,734,600
Cost of shares reacquired.... (47,004,075) (104,455,068)
------------- -----------------
Net decrease in net assets
from Fund share
transactions.............. (33,913,775) (87,121,663)
------------- -----------------
Total decrease.................. (8,345,972) (129,786,398)
Net Assets
Beginning of period............. 230,059,208 359,845,606
------------- -----------------
End of period................... $ 221,713,236 $ 230,059,208
------------- -----------------
------------- -----------------
</TABLE>
--------------------------------------------------------------------------------
----- 6 See Notes to Financial Statements.
<PAGE>
Notes to Financial Statements PRUDENTIAL INTERMEDIATE GLOBAL
(Unaudited) INCOME FUND, INC.
--------------------------------------------------------------------------------
Prudential Intermediate Global Income Fund, Inc., (the ``Fund'') was organized
in Maryland as a closed-end, non-diversified management investment company and
commenced investment operations on May 26, 1988. On October 4, 1991 the Fund
concluded operations as a closed-end investment company and effective October 7,
1991, commenced operations as an open-end, non-diversified investment company.
The Fund's investment objective is to maximize total return, the components of
which are current income and capital appreciation, by investing in a portfolio
consisting primarily of U.S. and foreign government securities. The Fund will
also engage in certain hedging strategies to meet its investment objective. The
ability of 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.
Security 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 rate. Portfolio securities (including options) are valued
at their current market value as determined by an independent pricing service,
principal market maker or by reference to the applicable exchange 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 which approximates market value.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, take
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction including accrued interest.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.
Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and liabilities--at the
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/losses on investment
transactions.
Net realized losses on foreign currency transactions represents net foreign
exchange gains and losses from sales and maturities of short-term securities and
forward currency contracts, holding 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 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 reflected as a component of net unrealized
appreciation/depreciation on investments and foreign currencies.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of 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
--------------------------------------------------------------------------------
7 -----
<PAGE>
Notes to Financial Statements PRUDENTIAL INTERMEDIATE GLOBAL
(Unaudited) INCOME FUND, INC.
--------------------------------------------------------------------------------
unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments. 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.
Financial Futures Contracts: A financial futures contract is an agreement to
purchase (long) or sell (short) an agreed amount of securities at a set price
for delivery on a future date. Upon entering into a financial futures contract,
the Fund is required to pledge to the broker an amount of cash and/or other
assets equal to a certain percentage of the contract amount. This amount is
known as the ``initial margin.'' Subsequent payments, known as ``variation
margin,'' are made or received by the Fund each day, depending on the daily
fluctuations in the value of the underlying security. Such variation margin is
recorded for financial statement purposes on a daily basis as unrealized gain or
loss. When the contract expires or is closed, the gain or loss is realized and
is presented in the statement of operations as net realized gain (loss) on
financial futures contracts.
The Fund invests in financial futures contracts in order to hedge its existing
portfolio securities, or securities the Fund intends to purchase, against
fluctuations in value caused by changes in prevailing interest rates. Should
interest rates move unexpectedly, the Fund may not achieve the anticipated
benefits of the financial futures contracts and may realize a loss. The use of
futures transactions involves the risk of imperfect correlation in movements in
the price of futures contracts, interest rates and the underlying hedged assets.
Options: The Fund may either purchase or write options in order to hedge against
adverse market movements or fluctuations in value caused by changes in
prevailing interest rates or foreign currency exchange rates with respect to
securities or currencies which the Fund currently owns or intends to purchase.
When the Fund purchases an option, it pays a premium and an amount equal to that
premium is recorded as an investment. When the Fund writes an option, it
receives a premium and an amount equal to that premium is recorded as a
liability. The investment or liability is adjusted daily to reflect the current
market value of the option. If an option expires unexercised, the Fund realizes
a gain or loss to the extent of the premium received or paid. If an option is
exercised, the premium received or paid is an adjustment to the proceeds from
the sale or the cost basis of the purchase in determining whether the Fund has
realized a gain or loss. The difference between the premium and the amount
received or paid on effecting a closing purchase or sale transaction is also
treated as a realized gain or loss. Gain or loss on purchased options is
included in net realized gain (loss) on investment transactions. Gain or loss on
written options is presented separately as net realized gain (loss) on written
option transactions.
The Fund, as writer of an option, has no control over whether the underlying
securities or currencies may be sold (called) or purchased (put). As a result,
the Fund bears the market risk of an unfavorable change in the price of the
security or currency underlying the written option. The Fund, as purchaser of an
option, bears the risk of the potential inability of the counterparties to meet
the terms of their contracts.
Securities Lending: The Fund may lend its U.S. Government securities to
broker-dealers or government securities dealers. The loans are secured by
collateral at least equal at all times to the market value of the securities
loaned. The Fund may bear the risk of delay in recovery of, or even loss of
rights in, the securities loaned should the borrower of the securities fail
financially. The Fund receives compensation for lending its securities in the
form of fees or it retains a portion of interest on the investment of any cash
received as collateral. The Fund also continues to receive interest on the
securities loaned and any gain or loss in the market price of the securities
loaned that may occur during the term of the loan will be for the account of the
Fund. As of June 30,1995, the Fund had no securities on loan.
Security Transactions and Investment Income: Security transactions are recorded
on the trade date. Realized gains and losses from security and currency
transactions are calculated on the identified cost basis. Interest income is
recorded on the accrual basis.
Net investment income (other than distribution fees), and unrealized 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 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.
Equalization: The Fund follows the accounting practice known as equalization by
which a portion of the proceeds from sales and costs of reacquisitions of Fund
shares, equivalent on a per share basis to the amount of distributable net
investment income on the date of the transaction, is credited or charged to
undistributed net investment income. As a result, undistributed net
--------------------------------------------------------------------------------
----- 8
<PAGE>
Notes to Financial Statements PRUDENTIAL INTERMEDIATE GLOBAL
(Unaudited) INCOME FUND, INC.
--------------------------------------------------------------------------------
investment income per share is unaffected by sales or reacquisitions of the
Fund's shares.
Dividends and Distributions: The Fund declares daily and pays dividends of net
investment income monthly and makes distributions at least annually of any net
capital gains. Dividends and distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. 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 AICPA 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 of Position was to reclassify $10,415,040 of
foreign currency gains to undistributed net investment income from accumulated
net realized loss on investments. 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 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 .75% of the Fund's average daily net assets.
The Fund has distribution agreements with Prudential Mutual Fund Distributors,
Inc. (``PMFD''), which acts as the distributor of the Class A shares of the
Fund, and with Prudential Securities Incorporated (``PSI''), which acts as
distributor of the Class B and Class C shares of the Fund (collectively the
``Distributors''). The Fund compensates the Distributors 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.
Pursuant to the Class A, B and C Plans, the Fund compensates the Distributors
for distribution-related activities at an annual rate of up to .30 of 1%, .75 of
1% and 1%, of the average daily net assets of the Class A, B and C shares,
respectively. Such expenses under the Plans were .15% of 1%, .75% of 1% and .75
of 1% of the average daily net assets of the Class A, B and C shares,
respectively, for the six months ended June 30, 1995.
PMFD has advised the Fund that it has received approximately $3,600 in front-end
sales charges resulting from sales of Class A shares during the six months ended
June 30, 1995. From these fees, PMFD paid such sales charges to dealers (PSI and
Prusec) which in turn paid commissions to salespersons.
PSI has advised the Fund that for the six months ended June 30, 1995, it
received approximately $41,600 in contingent deferred sales charges imposed upon
certain redemptions by Class B shareholders.
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 Transactions with Affiliates
Prudential Mutual Fund Services, Inc. (``PMFS''), a wholly-owned subsidiary of
PMF, serves as the Fund's transfer agent and during the six months ended June
30, 1995, the Fund incurred fees of approximately $211,000 for the services of
PMFS. As of June 30, 1995, fees of approximately $33,000 were due to PMFS.
Transfer agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to non-affiliates.
------------------------------------------------------------
Note 4. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments
and written options, for the six months ended June 30, 1995, aggregated
$329,561,532 and $320,085,608, respectively.
--------------------------------------------------------------------------------
9 -----
<PAGE>
Notes to Financial Statements PRUDENTIAL INTERMEDIATE GLOBAL
(Unaudited) INCOME FUND, INC.
--------------------------------------------------------------------------------
At June 30, 1995, the Fund had outstanding forward currency contracts, both to
purchase and sell foreign currencies, as follows:
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Purchase Contracts Payable Value (Depreciaton)
------------------------------ --------------- ------------ --------------
<S> <C> <C> <C>
Danish Kroner,
expiring 10/6/95............. $ 208,963 $ 209,234 $ 271
Deutschemarks,
expiring 11/1/95............. 5,688,240 6,136,913 448,673
French Francs,
expiring 10/10/95............ 14,771,579 14,708,138 (63,441)
Netherland Guilders,
expiring 7/27/95............. 2,182,435 2,181,194 (1,241)
New Zealand Dollars,
expiring 7/27/95............. 2,010,000 2,000,850 (9,150)
Spanish Pesetas,
expiring 9/11/95............. 16,368,010 17,088,910 720,900
Swiss Francs,
expiring 11/2/95............. 21,139,503 22,754,925 1,615,422
--------------- ------------ --------------
$ 62,368,730 $ 65,080,164 $ 2,711,434
--------------- ------------ --------------
--------------- ------------ --------------
</TABLE>
<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current Appreciation
Sale Contracts Receivable Value (Depreciaton)
------------------------------ --------------- ------------ --------------
<S> <C> <C> <C>
Australian Dollars,
expiring 7/27/95............. $ 3,729,905 $ 3,686,746 $ 43,159
British Pounds,
expiring 7/27/95............. 11,463,731 11,529,269 (65,538)
Danish Kroner,
expiring 10/6/95............. 202,790 209,234 (6,444)
Deutschemarks,
expiring 7/27-11/1/95........ 49,705,846 49,651,190 54,656
French Francs,
expiring 10/10-11/9/95....... 14,391,166 14,586,441 (195,275)
Irish Punts,
expiring 7/27/95............. 4,063,272 4,070,053 (6,781)
Japanese Yen,
expiring 7/27/95............. 7,559,662 7,487,830 71,832
Spanish Pesetas,
expiring 9/11/95............. 16,232,989 17,386,619 (1,153,630)
Swedish Krona,
expiring 9/11/95............. 2,654,757 2,638,157 16,600
Swiss Francs,
expiring 7/27-11/2/95........ 28,340,811 29,717,987 (1,377,176)
--------------- ------------ --------------
$ 138,344,929 $140,963,526 $ (2,618,597)
--------------- ------------ --------------
--------------- ------------ --------------
</TABLE>
Transactions in options written during the six months ended June 30, 1995, were
as follows:
<TABLE>
<CAPTION>
Number of
Contracts Premiums
(000) Received
---------- -----------
<S> <C> <C>
Options outstanding at
December 31, 1994............................. 40,658 $ 466,627
Options written................................ 45,285 436,677
Options terminated in closing purchase
transactions.................................. (69,468) (647,069)
Options exercised.............................. (16,475) (256,235)
---------- -----------
Options outstanding at
June 30, 1995................................. -- --
---------- -----------
---------- -----------
</TABLE>
The federal income tax basis of the Portfolio's investments at June 30, 1995 was
$209,717,848 and, accordingly, net unrealized appreciation for federal income
tax purposes was $6,523,811 (gross unrealized appreciation--$7,732,162 gross
unrealized depreciation--$1,208,351).
For federal income tax purposes, the Fund has a capital loss carryforward as of
December 31, 1994, of approximately $87,639,600 of which $45,765,500 expires in
1997, $23,240,000 expires in 1998 and $18,634,100 expires in 2002.
The Fund will elect to treat approximately $2,165,600 of net capital losses and
$5,287,500 of net foreign currency losses incurred in the two month period ended
December 31, 1994 as having been incurred in the following fiscal year.
------------------------------------------------------------
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 June 30, 1995, the Fund
has a 0.7% undivided interest in the joint account. The undivided interest for
the Fund represents $4,743,000 in the principal amount. As of such date, each
repurchase agreement in the joint account and the collateral therefore were as
follows:
Bear, Stearns & Co. Inc., 6.125%, in the principal amount of $200,000,000,
repurchase price $200,102,083, due 7/3/95. The value of the collateral including
accrued interest is $204,321,562.
CS First Boston Corp., 6.13%, in the principal amount of $160,000,000,
repurchase price $160,081,733, due 7/3/95. The value of the collateral including
accrued interest is $163,246,196.
--------------------------------------------------------------------------------
----- 10
<PAGE>
Notes to Financial Statements PRUDENTIAL INTERMEDIATE GLOBAL
(Unaudited) INCOME FUND, INC.
--------------------------------------------------------------------------------
Goldman, Sachs & Co., 6.10%, in the principal amount of $116,557,000, repurchase
price $116,616,250, due 7/3/95. The value of the collateral including accrued
interest is $118,889,059.
Smith Barney, Inc., 6.13%, in the principal amount of $200,000,000, repurchase
price $200,102,166, due 7/3/95. The value of the collateral including accrued
interest is $204,000,775.
------------------------------------------------------------
Note 6. Capital
The Fund offers Class A, Class B and Class C shares. Class A shares are sold
with a front-end sales charge of up to 3.0%. Class B shares are sold with a
contingent deferred sales charge which declines from 3% to zero depending on the
period of time the shares are held. Class C shares are sold with a contingent
deferred sales charge of 1% during the first year. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately five
years after purchase.
There are 2 billion authorized shares of $.001 par value common stock divided
equally into Class A, B and C shares. Of the 27,063,374 shares of common stock
issued and outstanding at June 30,1995, PMF owned 12,284 Class A shares.
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
---------------------------------- ----------- ------------
<S> <C> <C>
Six months ended June 30, 1995:
Shares sold....................... 1,312,989 $10,468,946
Shares issued in reinvestment of
dividends....................... 171,770 1,342,199
Shares reacquired................. (5,171,081 ) (40,528,791 )
----------- ------------
Net decrease in shares outstanding
before conversion............... (3,686,322 ) (28,717,646 )
Shares issued upon conversion from
Class B......................... 140,828 1,046,057
----------- ------------
Net decrease in shares
outstanding..................... (3,545,494 ) $(27,671,589)
----------- ------------
----------- ------------
Year ended December 31, 1994:
Shares sold....................... 818,956 $ 6,611,489
Shares issued in reinvestment of
dividends and distributions..... 477,735 3,708,750
Shares reacquired................. (11,028,813) (85,609,639 )
----------- ------------
Net decrease in shares
outstanding..................... (9,732,122 ) $(75,289,400)
----------- ------------
----------- ------------
<CAPTION>
Class B Shares Amount
---------------------------------- ----------- ------------
<S> <C> <C>
Six months ended June 30, 1995:
Shares sold....................... 126,600 $ 992,020
Shares issued in reinvestment of
dividends....................... 35,457 276,816
Shares reacquired................. (833,183 ) (6,475,284 )
----------- ------------
Net decrease in shares outstanding
before conversion............... (671,126 ) (5,206,448 )
Shares reacquired upon conversion
into Class A.................... (140,638 ) (1,046,057 )
----------- ------------
Net decrease in shares
outstanding..................... (811,764 ) $(6,252,505 )
----------- ------------
----------- ------------
Year ended December 31, 1994:
Shares sold....................... 741,502 $ 5,987,116
Shares issued in reinvestment of
dividends and distributions..... 131,446 1,025,848
Shares reacquired................. (2,424,396 ) (18,845,429 )
----------- ------------
Net decrease in shares
outstanding..................... (1,551,448 ) $(11,832,465)
----------- ------------
----------- ------------
Class C
----------------------------------
Six months ended June 30, 1995:
Shares sold....................... 1,379 $ 10,105
Shares issued in reinvestment of
dividends....................... 27 214
----------- ------------
Increase in shares outstanding.... 1,406 $ 10,319
----------- ------------
----------- ------------
August 1, 1994* through December 31, 1994:
Shares sold....................... 26 $ 200
Shares issued in reinvestment of
dividends....................... -- 2
----------- ------------
Increase in shares outstanding.... 26 $ 202
----------- ------------
----------- ------------
---------------
* Commencement of offering of Class C shares.
</TABLE>
--------------------------------------------------------------------------------
11 -----
<PAGE>
PRUDENTIAL INTERMEDIATE GLOBAL
Financial Highlights (Unaudited) INCOME FUND, INC.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A(b)
-------------------------------
------------------------------------------------
<S> <C> <C> <C>
<C> <C> <C>
Six Months Year Ended
Ten Months Year Ended February
Ended December 31,
Ended 28,
June 30, ----------------
----- December 31, ---------------------
1995 1994
1993 1992(c) 1992 1991
---------- -------- ---
----- ------------ -------- --------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 7.32 $ 8.43 $
7.77 $ 8.39 $ 8.79 $ 8.56
---------- -------- ---
----- ------------ -------- --------
Income from investment operations
Net investment income......................... .22 .50
.59 .61 .71 .74
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions................................ .87 (1.09)
.63 (.36) (.36) .35
---------- -------- ---
----- ------------ -------- --------
Total from investment operations........... 1.09 (.59)
1.22 .25 .35 1.09
---------- -------- ---
----- ------------ -------- --------
Less distributions
Dividends from net investment income.......... (.22) (.29)
(.48) (.59) (.71) (.74)
Distributions from capital gains.............. -- (.01)
(.08) (.28) -- --
Tax return of capital distributions........... -- (.22)
-- -- (.04) (.12)
---------- -------- ---
----- ------------ -------- --------
Total distributions........................ (.22) (.52)
(.56) (.87) (.75) (.86)
---------- -------- ---
----- ------------ -------- --------
Net asset value, end of period................ $ 8.19 $ 7.32 $
8.43 $ 7.77 $ 8.39 $ 8.79
---------- -------- ---
----- ------------ -------- --------
---------- -------- ---
----- ------------ -------- --------
TOTAL RETURN(e):.............................. 14.95% (7.02)%
16.12% 3.09% 4.24% 13.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $202,746 $207,153
$320,406 $378,865 $271,714 $449,178
Average net assets (000)...................... $207,761 $262,882
$355,018 $331,339 $399,714 $437,752
Ratios to average net assets:
Expenses, including distribution fees...... 1.43%(a) 1.46%
1.41% 1.30%(a) 1.20% 1.04%
Expenses, excluding distribution fees...... 1.28%(a) 1.31%
1.26% 1.15%(a) 1.15% 1.04%
Net investment income...................... 5.82%(a) 6.04%
7.42% 9.08%(a) 8.43% 8.61%
Portfolio turnover rate....................... 158% 554%
361% 201% 170% 250%
Total debt outstanding at end of period
(000)....................................... -- --
-- -- -- $20,240
Asset coverage(d)............................. -- --
-- -- -- $23,193
<CAPTION>
<S> <C>
1990
--------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 8.93
--------
Income from investment operations
Net investment income......................... .73
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions................................ (.10)
--------
Total from investment operations........... .63
--------
Less distributions
Dividends from net investment income.......... (.73)
Distributions from capital gains.............. --
Tax return of capital distributions........... (.27)
--------
Total distributions........................ (1.00)
--------
Net asset value, end of period................ $ 8.56
--------
--------
TOTAL RETURN(e):.............................. 7.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $437,558
Average net assets (000)...................... $455,386
Ratios to average net assets:
Expenses, including distribution fees...... 1.07%
Expenses, excluding distribution fees...... 1.07%
Net investment income...................... 8.16%
Portfolio turnover rate....................... 231%
Total debt outstanding at end of period
(000)....................................... $27,600
Asset coverage(d)............................. $16,854
</TABLE>
---------------
(a) Annualized.
(b) Prior to October 7, 1991, the Fund was organized as a closed-end fund.
(c) The Fund changed its fiscal year end to December 31.
(d) Per $1,000 of debt outstanding.
(e) Total return does not consider the effect of sales loads. Total return
is calculated assuming a purchase of shares on the first day and a sale
on the last day of each period reported and includes reinvestment of
dividends and distributions. Total returns for periods of less than a
full year are not annualized.
--------------------------------------------------------------------------------
----- 12 See Notes to Financial Statements.
<PAGE>
PRUDENTIAL INTERMEDIATE GLOBAL
Financial Highlights (Unaudited) INCOME FUND, INC.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Class C
-------------------------------
------------------------------------- ----------
<S> <C> <C> <C>
<C> <C> <C>
January 15,
Six Months Year Ended
Ten Months 1992(c) Six Months
Ended December 31,
Ended Through Ended
June 30, ----------------
--- December 31, February 29, June 30,
1995 1994
1993 1992(e) 1992 1995
---------- ------- ----
--- ------------ ------------ ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 7.33 $ 8.44 $
7.79 $ 8.40 $ 8.43 $ 7.33
---------- ------- ----
--- ------------ ------ ------
Income from investment operations
Net investment income......................... .20 .45
.54 .57 .08 .20
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions................................ .87 (1.09)
.63 (.35) (.03) .87
---------- ------- ----
--- ------------ ------ ------
Total from investment operations........... 1.07 (.64)
1.17 .22 .05 1.07
---------- ------- ----
--- ------------ ------ ------
Less distributions
Dividends from net investment income.......... (.20) (.26)
(.44) (.55) (.08) (.20)
Distributions from capital gains.............. -- (.01)
(.08) (.28) -- --
Tax return of capital distributions........... -- (.20)
-- -- -- --
---------- ------- ----
--- ------------ ------ ------
Total distributions........................ (.20) (.47)
(.52) (.83) (.08) (.20)
---------- ------- ----
--- ------------ ------ ------
Net asset value, end of period................ $ 8.20 $ 7.33 $
8.44 $ 7.79 $ 8.40 $ 8.20
---------- ------- ----
--- ------------ ------ ------
---------- ------- ----
--- ------------ ------ ------
TOTAL RETURN(f):.............................. 14.59% (7.69)%
15.29% 2.70% 0.58% 14.59%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $18,956 $22,906
$39,440 $33,500 $1,049 $12
Average net assets (000)...................... $20,766 $31,835
$36,197 $18,358 $456 $9
Ratios to average net assets:
Expenses, including distribution fees...... 2.03%(a) 2.07%
2.01% 1.90%(a) 1.03%(a) 2.02%(a)
Expenses, excluding distribution fees...... 1.28%(a) 1.31%
1.26% 1.15%(a) .28%(a) 1.26%(a)
Net investment income...................... 5.21%(a) 5.44%
6.67% 8.54%(a) 9.43%(a) 5.28%(a)
Portfolio turnover rate....................... 158% 554%
361% 201% 170% 158%
<CAPTION>
<S> <C>
August 1,
1994(d)
Through
December 31,
1994
------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.......... $ 7.69
-----
Income from investment operations
Net investment income......................... .14
Net realized and unrealized gain (loss) on
investment and foreign currency
transactions................................ (.32)
-----
Total from investment operations........... (.18)
-----
Less distributions
Dividends from net investment income.......... (.10)
Distributions from capital gains.............. --
Tax return of capital distributions........... (.08)
-----
Total distributions........................ (.18)
-----
Net asset value, end of period................ $ 7.33
-----
-----
TOTAL RETURN(f):.............................. (2.44)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)............... $193(b)
Average net assets (000)...................... $197(b)
Ratios to average net assets:
Expenses, including distribution fees...... 1.05%(a)
Expenses, excluding distribution fees...... .30%(a)
Net investment income...................... 3.30%(a)
Portfolio turnover rate....................... 554%
</TABLE>
---------------
(a) Annualized.
(b) Figures are actual and not rounded to the nearest thousand.
(c) Commencement of offering of Class B shares.
(d) Commencement of offering of Class C shares.
(e) The Fund changed its fiscal year end to December 31.
(f) Total return does not consider the effect of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on
the last day of each period reported and includes reinvestment of
dividends and distributions. Total returns for periods of less than
a full year are not annualized.
--------------------------------------------------------------------------------
See Notes to Financial Statements. 13 -----
<PAGE>
Prudential Intermediate Global Income Fund, Inc. J.P. Morgan Index
The Prudential Intermediate Global Income Fund and the
J.P. Morgan Global Traded Government Bond Index:
Comparing a $10,000 Investment.
(CHART)
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so an investor's shares, when redeemed, will be
worth more or less than their original cost. The charts on the right are
designed to give you an idea how much the Fund's returns can fluctuate from
year to year by measuring the best and worst years in terms of total annual
return since inception of each share class.
These graphs are furnished to you in accordance with SEC regulations. They
compare a $10,000 investment in the Prudential Intermediate Global Income Fund
(Class A, Class B and Class C) with a similar investment in the J.P. Morgan
Global Traded Government Bond Index by portraying the initial account values at
the commencement of operations of each class, and subsequent account values at
the end of this reporting period (June 30),as measured on a quarterly basis,
beginning in 1988 for Class A shares, in 1992 for Class B shares and in 1994
for Class C shares. For purposes of the graphs, and unless otherwise
indicated, in the accompanying tables it has been assumed (a) that the maximum
applicable front-end sales charge was deducted from the initial $10,000
investment in Class A shares; (b) the maximum applicable contingent deferred
sales charge was deducted from the value of the investment in Class B and Class
C shares, assuming full redemption on June 30, 1995; (c) all recurring fees
(including management fees) were deducted; and (d) all dividends and
distributions were reinvested. Class B shares will automatically convert to
Class A shares, on a quarterly basis, beginning approximately five years after
purchase. This conversion feature is not reflected in the graph.
The Index is a weighted index of the total return of government bonds from 13
countries, including Australia, Belgium, Canada, Denmark, France, Germany,
Italy, Japan, Netherlands, Spain, Sweden, United Kingdom and the United States.
It provides a broad measure of market performance. Index is unmanaged and
includes the reinvestment of all dividends, but does not reflect the payment
of transaction costs and advisory fees associated with an investment in the
Fund. The securities in the Index may differ substantially from the securities
in the Fund. The Index is not the only one that may be used to characterize
performance of global bond funds and other indexes may portray different
comparative performance.
<PAGE>
Prudential Mutual Funds
One Seaport Plaza
New York, NY 10292
Toll Free (800) 225-1852
Directors
Thomas A. Owens, Jr.
Richard A. Redeker
Gerald A. Stahl
Stephen Stoneburn
Robert H. Wellington
Officers
Richard A. Redeker, President
Robert F. Gunia, Vice President
Grace Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Deborah A. Docs, Assistant Secretary
Manager
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07101
Distributors
Prudential Mutual Fund Distributors, Inc.
Prudential Securities Incorporated
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Prudential Mutual Fund Services, Inc.
P.O. Box 15005
New Brunswick, NJ 08906
Independent Accountants
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel
Shereff, Friedman, Hoffman & Goldman LLP
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of June 30, 1995 were not audited
and, accordingly, no opinion is expressed on them.
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
<PAGE>
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