Return of Capital, Redesignation, and Qualified Five-Year Gains (New for 2001) Print Printer-friendly version
 
Return of Capital
A non-taxable distribution, or return of capital (ROC), occurs when distributions by the Fund are greater than the earnings of the Fund. Shareholders do not have to pay income taxes on the portion of the dividend that represents the return of capital. This information is reported on 1099-DIV forms, which shareholders should be receiving shortly. Shareholders should always use the distribution figures on their Form 1099-DIV not the annual statements to file their taxes. The information below is reflected on your Form 1099-DIV.

What You Should Know
The impact of this return on capital will be proportionate to the size of your distribution. If you have any questions regarding the tax consequences of this event, you should contact a qualified tax adviser. The immediate tax consequence is impacted by your cost basis in your fund shares.

The return of capital below applies to all dividends paid in 2001 on these funds.

Fund Name Share Class Percentage To Nontaxable (Box 3)
Prudential Global Total Return Fund Class A,B,C,& Z 18.74%
Prudential High Yield Fund Class A,B,C,& Z 4.61%
Prudential International Bond Fund Class A,B,C,& Z 52.28%

Redesignation
This redesignation applies to the dividend payable date of September 20, 2001. The fund is re-designating the entire short-term capital gain dividend to long-term capital gain.

Fund Name Share Class Redesignation Percentage
Prudential Utility Fund Class A,B,C, & Z Long-Term Capital Gains (Box 2a): 100.00%

Below, the redesignation applies to the dividend payable date of December 20, 2001. The percentage is the nontaxable portion of your dividend.

Fund Name Share Class Redesignation Percentage
Prudential Municipal Bond Fund- Insured Series Class A,B,C, & Z Nontaxable Income Div: 99.09%

Below, the redesignation applies to the special dividend payable date of December 24, 2001. The percentage shown is the nontaxable portion of your dividend.

Fund Name Share Class Redesignation Percentage
Prudential California Municipal Fund- California Income Series Class A,B,C, & Z Nontaxable Income Div: 26.92%

Below, the redesignation applies to the special dividend payable date of December 20, 2001. The percentage shown is the nontaxable portion of your dividend.

Fund Name Share Class Redesignation Percentage
Prudential Municipal Bond Fund- High Income Series Class A Nontaxable Income Div: 85.99%
Prudential Municipal Bond Fund- High Income Series Class B Nontaxable Income Div: 85.92%
Prudential Municipal Bond Fund- High Income Series Class C & Z Nontaxable Income Div: 86.01%

Below, the redesignation applies to the special dividend payable date of December 24, 2001. The percentage shown is the nontaxable portion of your dividend.

Fund Name Share Class Redesignation Percentage
Prudential Municipal Series Fund- Pennsylvania Series Class A,B,C Nontaxable Income Div: 82.47%

Qualified Five-Year Gains (New for 2001)
This is the gain on the sale of assets held by the Fund for more than five years. If you are in the 15% or lower federal income tax bracket and eligible for the new 8% capital gains tax rate, enter this information on the worksheet included in the instructions to Schedule D, which will follow through to Schedule D, line 29.

Below, the redesignations apply to the long-term capital gain payable date of December 24, 2001.

Fund Name Share Class Qualified Five Year Gain Percent (Box 2c)
Prudential California Municipal Fund- California Series Class A,B,C, & Z 75.38%
Prudential Municipal Series Fund- New York Series Class A,B,C, & Z 33.57 %
Prudential National Municipals Fund Inc. Class A,B,C, & Z 56.99 %

Below, the redesignations applies to the long-term capital gain payable date of September 19, 2001.

Fund Name Share Class Qualified Five Year Gain Percent (Box 2c)
Prudential Utility Fund Class A,B,C, & Z 5.77 %

Below, the redesignations applies to the long-term capital gain payable date of December 3, 2001.

Fund Name Share Class Qualified Five Year Gain Percent (Box 2c)
Prudential Utility Fund Class A,B,C, & Z 100.00 %

Below, the redesignations applies to the long-term capital gain payable date of November 20, 2001.

Fund Name Share Class Qualified Five Year Gain Percent (Box 2c)
Prudential Value Fund Class A,B,C, & Z 55.62 %
Prudential International Value Fund Class A,B,C, & Z 66.28 %

Neither Prudential nor its sales professionals render tax or legal advice. Please consult your tax or legal adviser before making any tax-related decisions.

Shares of the Funds are distributed by Prudential Investment Management Services LLC (PIMS), 100 Mulberry Street, Three Gateway Center, 14th Floor, Newark, NJ 07102-4077. PIMS (member SIPC) is a Prudential company.

Privacy and Business Integrity | Terms and Conditions

Prudential is authorized to transact business in all U.S. states and the District of Columbia. Product availability varies by state. © Copyright 2002 Prudential Financial, Inc., Newark, NJ, USA. All rights reserved.

IFS-A068222