Notes to Financial Statements INCOME PORTFOLIO
Morgan (J.P.) Securities, Inc., 4.50%, in the principal amount of $78,685,000, repurchase price $78,714,506,
due 1/3/2000. The value of the collateral including accrued interest was $80,259,686.
Salomon Smith Barney, Inc., 2.00%, in the principal amount of $110,000,000, repurchase price $110,018,333,
due 1/3/2000. The value of the collateral including accrued interest was $112,231,078.
Note 6. Capital
The Portfolio offers Class A, Class B, Class C and Class Z shares. Class A shares are sold with a front-end
sales charge of up to 3.25%. 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 front-end sales
charge of 1% and a contingent deferred sales charge of 1% during the first 18 months. Class B shares
automatically convert to Class A shares on a quarterly basis approximately five years after purchase. A special
exchange privilege is also available for shareholders who qualified to purchase Class A shares at net asset value.
Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited
group of investors.
There are 250 million authorized shares of $.01 par value common stock, divided into four classes, designated
Class A, Class B, Class C and Class Z common stock, each of which consists of 62,500,000 authorized shares.
Of the shares outstanding at December 31, 1999, Prudential owned 202,051.
Transactions in shares of common stock were as follows:
Class A Shares Amount
-------------------------------------- ---------- ------------
Year ended December 31, 1999:
Shares sold........................... 1,885,912 $ 21,004,322
Shares issued in reinvestment of
dividends........................... 299,319 3,345,005
Shares reacquired..................... (2,532,550) (28,250,642)