Notes to Financial Statements PRUDENTIAL NATIONAL MUNICIPALS FUND, INC.
Prudential National Municipals Fund, Inc. (the 'Fund') is registered under the Investment Company Act of 1940
as a diversified, open-end management investment company. The investment objective of the Fund is to seek a
high level of current income exempt from federal income taxes by investing substantially all of its total assets in
carefully selected long-term municipal bonds of medium quality. The ability of the issuers of debt securities held
by the Fund to meet their obligations may be affected by economic or political developments in a specific state,
industry or region.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its
Securities Valuations: The Fund values municipal securities (including commitments to purchase such securities on
a 'when-issued' basis) on the basis of prices provided by a pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various
relationships between securities in determining values. If market quotations are not readily available from such
pricing service, a security is valued at its fair value as determined under procedures established by the Board of
Directors. All Securities are valued as of 4:15 p.m., New York time.
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.
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 with respect to securities which the Fund
currently owns or intends to purchase. The Fund's principal reason for writing options is to realize, through
receipt of premiums, a greater current return than would be r